    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

    .
                             [H.A.S.C. No. 118-70]

                                    HEARING

                                       ON

                       NATIONAL DEFENSE AUTHORIZATION ACT

                              FOR FISCAL YEAR 2025

                                      AND

                  OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS

                                   BEFORE THE

                          COMMITTEE ON ARMED SERVICES

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                           SUBCOMMITTEE ON READINESS

                              MEETING JOINTLY WITH

                         SUBCOMMITTEE ON SEAPOWER AND
                                PROJECTION FORCES

                                     OF THE

                          COMMITTEE ON ARMED SERVICES

                            HOUSE OF REPRESENTATIVES

                                       ON

                          POSTURE AND READINESS OF THE
                             MOBILITY ENTERPRISE--
                               TRANSCOM AND MARAD

                                   __________

                                  HEARING HELD
                                 APRIL 11, 2024

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                    __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    55-591                    WASHINGTON : 2025

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

                           SUBCOMMITTEE ON READINESS

                        MICHAEL WALTZ, Florida, Chairman

    JOE WILSON, South Carolina           JOHN GARAMENDI, California
    AUSTIN SCOTT, Georgia                MIKIE SHERRILL, New Jersey
    CARLOS A. GIMENEZ, Florida           VERONICA ESCOBAR, Texas
    BRAD FINSTAD, Minnesota              MARILYN STRICKLAND, Washington
    DALE W. STRONG, Alabama              GABE VASQUEZ, New Mexico
    JENNIFER A. KIGGANS, Virginia        JILL N. TOKUDA, Hawaii
    JAMES C. MOYLAN, Guam                DONALD G. DAVIS, North Carolina
    LANCE GOODEN, Texas                  MARC VEASEY, Texas

                     Kyle Noyes, Professional Staff Member
                  Phil MacNaughton, Professional Staff Member
                      Ethan Pelissier, Research Assistant

                                     ------

                 SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES

                       TRENT KELLY, Mississippi, Chairman

    ROBERT J. WITTMAN, Virginia          JOE COURTNEY, Connecticut
    SCOTT DesJARLAIS, Tennessee          JOHN GARAMENDI, California
    MIKE GALLAGHER, Wisconsin            DONALD NORCROSS, New Jersey
    JACK BERGMAN, Michigan               JARED F. GOLDEN, Maine
    RONNY JACKSON, Texas                 SARA JACOBS, California
    NANCY MACE, South Carolina           CHRISTOPHER R. DELUZIO,
    JENNIFER A. KIGGANS, Virginia            Pennsylvania
    MARK ALFORD, Missouri                JENNIFER L. McCLELLAN, Virginia
    NICK LaLOTA, New York                JIMMY PANETTA, California

                      Ethan Pelissier, Research Assistant

                                C O N T E N T S

                                  ----------
                                                                       Page

                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Courtney, Hon. Joe, a Representative from Connecticut, Ranking
      Member, Subcommittee on Seapower and Projection Forces.........     2
    Garamendi, Hon. John, a Representative from California, Ranking
      Member, Subcommittee on Readiness..............................     4
    Kelly, Hon. Trent, a Representative from Mississippi, Chairman,
      Subcommittee on Seapower and Projection Forces.................     1
    Waltz, Hon. Michael, a Representative from Florida, Chairman,
      Subcommittee on Readiness......................................     3

                                   WITNESSES

    Van Ovost, Gen Jacqueline D., USAF, Commander, U.S.
      Transportation Command.........................................     5
    Phillips, RDML Ann C., USN (Ret.), Administrator, Maritime
      Administration.................................................     7

                                    APPENDIX

    Prepared Statements:

        Courtney, Hon. Joe...........................................    32
        Garamendi, Hon. John.........................................    36
        Kelly, Hon. Trent............................................    31
        Phillips, RDML Ann C.........................................    72
        Van Ovost, Gen Jacqueline D..................................    39
        Waltz, Hon. Michael..........................................    35

    Documents Submitted for the Record:

        [There were no Documents submitted.]

    Witness Responses to Questions Asked During the Hearing:

        [There were no Questions submitted during the hearing.]

    Questions Submitted by Members Post Hearing:

        Mr. Rogers...................................................    85
        Mr. Scott....................................................    86
        Mr. Waltz....................................................    86
        Mr. Gimenez..................................................    87
        Mr. Finstad..................................................    89
        Mr. LaLota...................................................    90

      POSTURE AND READINESS OF THE MOBILITY ENTERPRISE--TRANSCOM AND MARAD

                                  ----------

                      House of Representatives,
                           Committee on Armed Services,
           Subcommittee on Readiness, Meeting Jointly with the
                Subcommittee on Seapower and Projection Forces,
                              Washington, DC, Thursday, April 11, 2024.
        The subcommittees met, pursuant to call, at 3:01 p.m., in
    room 2118, Rayburn House Office Building, Hon. Trent Kelly and
    Hon. Michael Waltz (chairmen of the subcommittees) presiding.

     OPENING STATEMENT OF HON. TRENT KELLY, A REPRESENTATIVE FROM
    MISSISSIPPI, CHAIRMAN, SUBCOMMITTEE ON SEAPOWER AND PROJECTION
                                 FORCES

        Mr. Kelly. The subcommittee will come to order. I ask
    unanimous consent that the chair be authorized to declare a
    recess at any time. Without objection, so ordered.
        I thank the witnesses for being here. Whether it is
    competition or outright conflict, our strategic insurance will
    depend on our ability to move and sustain people and platforms
    around the globe.
        Force projection is only possible because of the sealift,
    airlift, and refueling operations carried out by Transportation
    Command, TRANSCOM, with support from the MARAD, the Maritime
    Administration.
        TRANSCOM and MARAD support the full range of military
    operations, including everything from humanitarian aides to an
    operation like those underway in the Red Sea. However, we
    cannot take our logistics capabilities for granted.
        We must be prepared to meet the logistic demands of a
    conflict against peer competitors halfway around the world. The
    tyranny of distance will strain our logistics capability, and
    we must make decisions now to meet our operational requirements
    for the future.
        The committee has legislated several key efforts that
    bolster our lift capability and prevent potential backsliding.
    For example, Congress required a minimum 275 intertheater
    aircraft to ensure we can meet our needs for long range
    aircraft.
        For a heavier lift, we rely on commercial vehicles
    supported by the Maritime Security Program (MSP) as well as an
    increasing aging reserve fleet to move mountains of iron and
    material. Sealift recapitalization is a priority, but we need
    to go about it the right way.
        General Van Ovost, in your prepared testimony, you state
    that the purchase of used sealift vehicles is complementary to
    an effort to build new sealift vessels. We have the
    congressional intent reversed. Used purchase authority should
    complement a new build effort. Unfortunately, years of
    collective feet dragging has brought us to where we are now.
        I agree we need to recapitalize the sealift fleet. But
    there must be a dose of reality in the cost and availability of
    foreign built 15-year-old ships that need hardened decks and
    retrofit after the fact.
        The results of the market assessment required in last
    year's NDAA [National Defense Authorization Act] will hopefully
    be informative.
        I thank our witnesses for being here today, and I look
    forward to your testimony.
        I am joined by my colleagues, Ranking Member Joe Courtney,
    Chairman Waltz and Ranking Member Garamendi today. I want to
    thank them for their partnership and continued leadership on
    these important issues before our subcommittee. And with that,
    I recognize Ranking Member Courtney.

         STATEMENT OF HON. JOE COURTNEY, A REPRESENTATIVE FROM
       CONNECTICUT, RANKING MEMBER, SUBCOMMITTEE ON SEAPOWER AND
                           PROJECTION FORCES

        Mr. Courtney. Thank you, Chairman Kelly, and thank you to
    the witnesses again. Time is going to be tight with votes
    coming up so I will try and just truncate my remarks.
        But I just want to really foot-stomp what Trent said that,
    you know, sometimes our committee, it seems like our focus is
    on, you know, big Navy and Air Force in terms of some of these
    programs. But I think I speak for both of us and really most of
    the committee that your departments we view as on part at least
    in terms of the, you know, times that we are living in right
    now, in terms of missions that you both have. And I am proud
    that our subcommittee has over the last few years working in a
    bipartisan manner actually plussed up capabilities in the
    capacity of our mobility enterprise.
        Again, we did not wait to sort of receive ideas or budgets.
    I mean, we took, I think, the initiative, which we should,
    under the Constitution to really, you know, move these critical
    programs forward.
        So we established the Tanker Security Program, the National
    Security Multi-Mission Vessel Program and authorized, as Trent
    just said, a domestic New Build Sealift Program for 10 vessels
    built here in the U.S.
        And in the fiscal year 2024 budget that was just signed by
    the President a few weeks ago, again, our subcommittee led the
    way to secure $12 million for MARAD to carry out design of a
    New Build Sealift Program using the vessel construction manager
    contracting model, which I think we have actually finally
    reached some consensus that this is the way that we can
    efficiently and affordably, you know, really grow the fleet.
        Again, like Trent, I have lots of questions about, you
    know, whether we should be expanding the purchase of used
    vessels. I just had a meeting actually not too long ago today
    where because of what is happening in the Gulf of Aden, the
    cost of buying in the used market has, if anything, gone up
    because the willingness to part with vessels is actually
    contracting and that just, again, it's going to have an impact
    in terms of cost.
        So, again, really, again thank the witnesses. I have the
    greatest respect for the great work that you are doing and all
    the different theaters that Trent said. And I look forward to a
    good hearing. And with that, I yield back.
        Mr. Kelly. And I now recognize Chairman Waltz.

    OPENING STATEMENT OF HON. MICHAEL WALTZ, A REPRESENTATIVE FROM
              FLORIDA, CHAIRMAN, SUBCOMMITTEE ON READINESS

        Mr. Waltz. Thank you, Mr. Chairman, and I echo both of your
    remarks. And I think as we all know and have discussed, that
    with China as the greatest threat this country has ever faced,
    the tyranny of distance will strain everything, platform,
    people, material, fuel, logistics win or lose wars. And I pray
    that with a strong logistics footprint in place, a capable
    sealift, capable airlift capability that the Chinese Communist
    Party every time they see that that will be a powerful,
    powerful deterrent.
        We know the closure of Red Hill in Hawaii is well underway.
    Defueling is now complete. It has been a couple of years since
    Congress has designated TRANSCOM as the executive agent for
    bulk fuel management in fiscal year 2022 NDAA.
        I am interested in how TRANSCOM has embraced the mission,
    this responsibility and what you are doing to support strategic
    operations, especially in INDOPACOM [Indo-Pacific Command]. We
    are in a race against time.
        I am also, as you know, General Van Ovost, keenly
    interested in oversight of the global household goods [GHG]
    contract, the least we can do after our service members come
    home is make sure their moves happen seamlessly and that their
    families are taken care of, particularly in the recruiting and
    retention crisis that we are now in.
        And I do expect, as you know, and I appreciate your
    engagement, for you to work with the prime vendor to make sure
    that we avoid any missteps but that we have a single point of
    failure now for a key element for our military families.
        And then I agree with Chairman Kelly that recapitalization
    of our sealift fleet that we absolutely rely on to move the
    Army, all ground platforms and material into theater, is a
    pressing issue. Crewing these issues is a huge concern. We have
    a significant shortage of credentialed mariners that Admiral
    Philips and I have talked about. That combined with poor vessel
    states, poor maintenance, it has resulted in what I think we
    would all agree is a less than impressive readiness rate during
    recent exercises.
        We rely on all of this small pool, this same pool of
    credentialed mariners, to crew commercial vessels in the
    Maritime Security Program and the Tanker Security Program. And
    we have a tough road ahead.
        In closing, our ability to execute logistics in a contested
    environment, which we have not done as a nation in a very long
    time, will define our ability to succeed or fail in this
    strategic competition.
        I look forward to hearing whether the fiscal year 2025
    budget request meets this task. I yield my remaining time, Mr.
    Chairman.
        Mr. Kelly. Thank you, Chairman. And I now recognize Ranking
    Member Garamendi.

        STATEMENT OF HON. JOHN GARAMENDI, A REPRESENTATIVE FROM
         CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON READINESS

        Mr. Garamendi. Thank you. Well, look who is here. General
    and Admiral, thank you so very much for joining us today.
    Obviously, very, very important.
        I want to start by thanking both of you for your
    leadership. I am proud to represent a district with some of our
    nation's most vital assets. It's the gateway to the Pacific.
    And we also have Mare Island and MOTCO [Military Ocean Terminal
    Concord] and a few other key assets in my district that are
    essential for our presence and activities in the Pacific. And
    General Van Ovost, thank you for recognizing and providing in
    your testimony the critical importance of MOTCO.
        By the way, there is a hill overlooking MOTCO that is going
    to be developed. You may want to purchase an easement and
    prevent that development from going forward.
        Let's talk about air mobility. I remain concerned with the
    low readiness levels of the air refueling fleets. This combined
    with the sunsetting of the KC-10 and the unresolved issues of
    the KC-46 increase the concerns.
        I unfortunately will continue to accept operational risks
    for the KC-46 program, notably deficiencies that threaten the
    already low readiness levels of the air frames. TRANSCOM, you
    are going to have to ensure that given the unresolved issues of
    the [KC] 46, we are not divesting at a rate which exposes the
    U.S. to unacceptable air refueling risks.
        Speaking of unacceptable risks, our mobility fleets have
    been operating without connectivity for decades. We have talked
    about this. I guess people that don't fly in these planes
    really don't care much about it. But if you are in one of these
    airplanes, you basically don't know what is going on around
    you. And you are at great risk. And so it is just unacceptable.
        A minimum investment, and I draw this to the attention of
    my colleagues here, a minimal investment in these transport
    platforms can significantly increase the ability of that
    platform to survive in a contested environment and also be far
    more efficient in its operations.
        Maritime, I thank Mr. Waltz for raising it as have two of
    my other colleagues here, we have got to deal with this issue.
    And I know, Admiral Phillips, you have worked at this for some
    time. We are going to buy used ships that are 25 years old and
    spend a whole lot of money refurbishing them, perhaps
    sufficiently, and they are going to age out very, very quickly.
        We are going to need a different strategy here. Some of
    this has been talked about. I know Mr. Waltz and I have talked
    about the national maritime strategy in which we would use
    Jones Act vessels and other vessels that are in the American
    maritime trade that they would be available, made to be
    militarily useful, and then call them up when we need them,
    building a reserve fleet that is quite different than our
    current reserve fleets.
        I want to -- I am going to continue to look at how this
    might be done. It does not require that the military own all
    the ships. It simply requires that the military make those
    ships that are privately owned militarily useful with an
    additional investment and probably some stipend to keep them
    available if and when needed.
        General Van Ovost, I know you do this with airplanes. In
    fact, I think you took two of the planes I needed to fly back
    and forth nonstop from Sacramento. So you put me on a route to
    Chicago. I blame it on you.
        So this is part of what we need to do. A ready reserve
    fleet, we have had this discussion about how we might be able
    to create a National Maritime Security Program using the Jones
    Act fleet, using the other privately owned vessels that are on
    the water.
        My final point deals with Title 11 financing to support our
    shipyards on the private side. Big issues on the government-
    owned shipyards. We could talk about that ad nauseam. But on
    the privately owned side, we need to -- if we are building
    ships, we will -- on the commercial or the private side, we
    will invariably improve our shipyards and the capacity for
    those shipyards to repair government ships and other ships when
    necessary in the face of a conflict.
        We have enacted legislation to reaffirm MARAD's authority
    to determine cargo preference. We want that to be effectively
    put in place. We want to make sure that if there is cargo --
    cargo is king, I'm told. Military cargo is critically
    important. So let's support our maritime industry by making
    sure that what is in the new law is actually engaged.
        A lot of other things to talk about. The fact that both of
    you are here, I want to thank the chairmen of the committees.
    You have done something unique, which I should have -- I should
    have expected you to do it, but I hadn't. But you brought
    together two of the key critical players in one hearing. Thank
    you for doing so. With that, I yield back.
        Mr. Kelly. Thank you. And before I start, we are going to
    put us on the clock so that we give everybody a chance because
    we have got votes. But General Van Ovost, I would go -- I need
    to make sure. Hopefully, this is not your last posture hearing,
    but I think that it may be. And if it, thank you, for your
    tremendous service to our nation and thank you also Admiral
    Phillips.
        My first question is, General Van Ovost -- oh, I am so
    sorry. I am getting ahead. I still mean that, though, so you
    are recognized.

    STATEMENT OF GENERAL JACQUELINE D. VAN OVOST, UNITED STATES AIR
         FORCE COMMANDER, UNITED STATES TRANSPORTATION COMMAND

        General Van Ovost. Great. Thank you, Chairman. Chairman
    Kelly, Chairman Waltz, Ranking Member Courtney, Ranking Member
    Garamendi, distinguished members of the committees, good
    afternoon. It is my honor to join you today with my senior
    enlisted leader, Chief Master Sergeant Brian Kruzelnick, to
    represent the men and women of the United States Transportation
    Command as we defend the nation, take care of our people and
    succeed through teamwork.
        I am extremely proud of our team of logistics professionals
    who lead the joint deployment and distribution enterprise. They
    continually exceed expectations and ensure hope, deterrence,
    and victory are assured as we contribute to our nation's
    defense.
        From competition to crisis, the entire enterprise proudly
    delivers for our nation, allies, and partners. And we know our
    success around the globe would not be possible without the
    steadfast support of this committee and the whole of Congress.
        The fiscal year 2025 budget request continues to make
    strides in closing gaps in our mobility areas as we prepare for
    global operations in a contested environment.
        A contested environment is the reality of today. Whether it
    is in the homeland or abroad, we cannot presume freedom of
    maneuver to execute operations or full access to our lines of
    communication.
        Our organic fleets, coupled with the vital capacity
    provided by our commercial transportation partners must
    continue to present credible capacity, meaning, we must
    modernize our mobility capabilities to include cyber resiliency
    and digital modernization initiatives.
        A connected, aware, and survivable mobility fleet and
    network is needed to maintain our advantage against a capable
    and determined near peer adversary. My top readiness concerns
    remain sealift and air refueling. Sealift is the backbone of
    our ability to deliver a decisive joint force. However, the age
    of the fleet is dragging readiness rights to alarming levels.
        Seventeen of the 47 organic ready reserve force ships are
    50 years or older. To address readiness and the decrease in
    capacity due to the planned retirements of 27 ships in the next
    8 years, we must add younger ships to the fleet.
        TRANSCOM supports the Navy strategy to acquire used sealift
    vessels from the commercial market and for the requests to
    provide the Secretary of Defense discretionary authority to
    purchase foreign built used ships under favorable market
    conditions without restrictions.
        We acknowledge Congress' intent to include domestic new
    build sealift ships to recapitalize the ready reserve force,
    and we are working with the Navy and the Maritime
    Administration to create an acquisition strategy for new
    construction that will complement the Buy Used Program.
        Admiral Phillips and I recently toured the Philadelphia
    shipyard and saw shipbuilding capacity available there. I
    believe the vessel construction manager model is a viable
    option for a future sealift construction program.
        I greatly appreciate your support for timely, predictable
    and stabilized funding to meet our sealift recapitalization
    requirements. Similarly, air refueling is foundational to our
    nation's power projection advantage. It is our most stressed
    capability.
        We must ensure continuous modernization and
    recapitalization of the aging fleet to meet the operational
    requirements of the modern battle space.
        TRANSCOM supports the Air Force strategy for uninterrupted
    tanker recapitalization and accelerated fielding of the next
    generation air refueling system.
        Over the past year, we have made great strides diversifying
    our bulk fuel distribution and delivery posture by having an
    increased forward presence with fuel afloat in contracted
    maritime tankers and increasing capacity and access to the U.S.
    flag maritime tanker fleet through the Tanker Security Program.
        In addition, we fully support the Maritime Security
    Program, Jones Act, and cargo preference laws that all work to
    ensure we have the necessary U.S. flag capability and U.S.
    merchant mariners ready to move sensitive defense materials
    during a national emergency.
        Maritime stakeholders have been experiencing challenges
    with recruiting and retaining qualified mariners. And we
    support MARAD and industry efforts to identify strategies that
    address the mariner shortage and ensure their readiness.
        To effectively sense adversary threats and activities in
    our logistics networks, both home and abroad, the nation must
    utilize all available resources.
        Section 702 of the Foreign Intelligence Surveillance Act
    provides many insights into adversary's intents, capabilities,
    and activities to contest our logistics capabilities. The loss
    of this authority adds risk to my mission.
        Additionally, passing a national defense supplemental is
    vital for the health of the transportation working capital
    fund, which preserves essential readiness and ensures response
    options for the Secretary of Defense.
        I am honored to join Rear Admiral Ann Phillips. The
    relationship between TRANSCOM and MARAD has never been stronger
    as we work together to strengthen our national security. Thank
    you once again for your leadership and the support you have
    brought our workforce. I look forward to your questions.
        [The prepared statement of General Van Ovost can be found
    in the Appendix on page 39]
        Mr. Kelly. Admiral Administrator Phillips, you are now
    recognized for five minutes.

    STATEMENT OF REAR ADMIRAL ANN C. PHILLIPS, USN (RET.) MARITIME
           ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION

        Admiral Phillips. Thank you, Mr. Chair. Good afternoon,
    Chairman Waltz and Chairman Kelly, Ranking Member Garamendi,
    and Ranking Member Courtney, and members of the subcommittee.
    Thank you for your tremendous support for the Maritime
    Administration, the U.S. Merchant Marine Academy, and the U.S.
    maritime industry.
        Before I go further, allow me to express our condolences on
    behalf of the Department of Transportation to the families of
    those who lost their lives earlier this month when the Francis
    Scott Key Bridge collapsed in Baltimore. Events like this
    highlight how important our maritime transportation system is
    to our nation's national and economic security.
        MARAD's mission is to foster, promote, and develop the
    maritime industry of the United States to meet the nation's
    economic and security needs. In that context, the President's
    fiscal year 2025 budget request of $859.7 million for MARAD
    will enable the agency to continue to strengthen our sealift
    enterprise by advancing recapitalization of the ready reserve
    force and vital commercial sealift programs that support U.S.
    flag vessels operating in foreign trade.
        Let me begin by discussing our ready reserve, an area of
    focus today. Our 2025 budget requests $974 million from DOD
    [Department of Defense] budgetary authority for MARAD to
    acquire, upgrade, and maintain vessels in the NDRF [National
    Defense Reserve Fleet] and ready reserve force.
        These funds help MARAD to keep the fleet in a ready,
    reliable, and responsive condition to ensure MARAD can meet the
    nation's strategic sealift needs.
        The RRF [Ready Reserve Fleet] consists of 48 vessels today,
    averaging over 45 years in age, and they are maintained in
    reduced operating status. This fleet will expand to 51 vessels
    by the end of fiscal year 2025 with the plan to transfer
    vessels from the military Sealift Command.
        MARAD is responsible for maintaining these aging ships as
    part of the Navy sealift recapitalization plan.
        We are actively advancing urgent recapitalization of the
    RRF using congressional authority to purchase vessels through a
    contracted vessel acquisition manager. This approach
    successfully acquired two ships in fiscal year 2022, and in
    fiscal year 2023 purchased three more, one 10 years old and two
    11 years old. The ongoing reflagging process following the
    stringent alternate compliance program will make all five
    vessels ready for use by the third quarter of 2024.
        We continue to collaborate with the vessel acquisition
    manager and have identified several potential ships for
    purchase with the goal of reaching the congressionally limited
    number of nine used vessels by the end of fiscal year 2025.
        In the fiscal year 2023 NDAA, MARAD was directed to develop
    a sealift ship design for the construction of 10 new vessels
    for the NDRF.
        I offer my thanks to Congress for appropriating $12 million
    in fiscal year 2024 funds to begin this vessel design.
        The 2025 budget also requests the full authorization level
    of $318 million for the Maritime Security Program to support 60
    commercially viable military useful vessels currently enrolled.
    We have also fully implemented the 10 vessel Tanker Security
    Program and are requesting $60 million for the program. These
    ships will provide DOD with reliable access to product tankers
    supporting national economic security.
        One program participant withdrew after accepting a long-
    term U.S. government charter. And MARAD is actively working to
    fill the vacancy, and we are expecting to do later this summer.
        We continue to work with the Center for Naval Analysis on
    the body of analysis that will support the maritime strategy,
    and we understand congressional interest in this important
    effort.
        We continue to collaborate as well with stakeholders to
    address the mariner shortage. We recently convened the fiscal
    year 2024 directed maritime workforce working group to identify
    the number of licensed and unlicensed mariners, recommended
    improvements in recruiting and detention, and evaluate how we
    can best recruit, train, and retain and reduce barriers to
    retention to grow our pool of merchant mariners.
        We also continue to expand and mark participation. Today
    there are 21 commercial operators enrolled, which operate over
    180 vessels. We are working to develop a proposed EMBARC [Every
    Mariner Builds a Respectful Culture] rule pursuant to the 2023
    NDAA.
        In addition, the fiscal year 2025 budget request includes
    $191 million to support U.S. Merchant Marine Academy operations
    and our capital asset management program for USMMA [United
    States Merchant Marine Academy]. It also requests $87 million
    to support the six state maritime academies, including
    continuing to build out new training vessels.
        Four national security multi-mission vessels are under
    construction using the VCM [vessel construction manager]
    process, with one delivered last fall, Empire State. The
    second, Patriot State, is expected to be delivered later this
    summer. And State of Maine, just launched last Friday.
        The fiscal year 2024 NDAA doubles the student incentive
    payments program amounts from $32,000 to $64,000. This will
    offer more financial support for cadets in the strategic
    sealift midshipman program at our SMAs [State Maritime
    Academies]. We thank Congress for this authorization.
        These programs reflect MARAD's priorities, supported by the
    President's budget. We plan to keep you updated, of course, on
    our progress in these areas. We are honored to testify here
    today before, again, with General Van Ovost, and we look
    forward to questions you may have.
        Thank you.
        [The prepared statement of Admiral Phillips can be found in
    the Appendix on page 72]
        Mr. Kelly. I thank you, and I'm going to be really strict
    on the clock today, guys. So I may give you 10 seconds but no
    more. And I will cut off answers. And with that, if you will
    put me on the clock.
        General Van Ovost, how do you communicate results of the
    mobility capability requirement study to the military services
    to inform shipbuilding, air refueling and airlift procurements?
        General Van Ovost. Thank you, Chairman. We use the Mobility
    Capability Requirements Study to provide our assessment of
    mobility sufficiency of the fleet.
        We work very carefully with the services, OSD [Office of
    the Secretary of Defense], and the joint staff. They are with
    us throughout the entire process. And I will brief the
    recommendations. And then that turns into the budget process
    where we go after the gaps to try to close them.
        Mr. Kelly. And Admiral Phillips, what is your assessment of
    interest in the Tanker Security Program and ability to meet the
    authorized 20 ships, whether medium-sized tankers or otherwise?
        Admiral Phillips. Thank you for that question, Chairman
    Kelly, sir. We find that there is interest in the program. As I
    have said, we had 10 vessels enrolled. One had an option to
    leave for a long-term charter.
        We thank Congress for the $25 million to help us as we have
    discussed in the past, prepare for additional training
    opportunity, to ensure we are able to man these vessels. And,
    of course, it also depends on the ability of government cargoes
    to help assist and offset the costs of managing a tanker under
    the TSP program. Thank you.
        Mr. Kelly. Thank you. And General Van Ovost, our air
    refueling fleet is comprised of mostly second generation
    aircraft. We have to key to mic to receive threats.
        What is the way ahead on connecting the aircraft to
    information that makes them more survivable in a contested
    environment?
        General Van Ovost. Thank you. I say logistics is
    foundational to any strategy. And we have got to be able to
    move -- air refueling is foundational to the ability to project
    and sustain the joint force.
        We must ensure that they are connected, and they have
    battle space awareness. And so I am working with the United
    States Air Force to define those requirements for all of those
    -- for aircraft. It looks like a lot like the types of
    capabilities we have in the KC-46 aircraft, which is sort of
    the future of air refueling.
        Mr. Kelly. And do you have an assessment of the cost of
    that?
        General Van Ovost. I do not have an assessment of the full
    cost. However, the Air Force does.
        Mr. Kelly. Okay. If you could, if you can provide that just
    so that we have an assessment of that. I think that is very
    helpful for us to understand.
        And then General Van Ovost, how is a contested environment
    expected to affect TRANSCOM's ability to use the ready reserve
    force as well as commercial contracted logistics partners more
    broadly?
        General Van Ovost. The contested environment is going to
    require us to be able to communicate securely with civilian and
    military assets of the fleets. And therefore, we are working on
    installing secure communications on the ready reserve force
    ships as well as working with our commercial mariners and
    commercial shipping to try to understand how we are going to
    get them information.
        We have been learning a lot with respect to the Red Sea as
    we were doing escort operations for U.S. flagged ships. And so
    we are taking those lessons learned, and we will be folding
    them into what we are doing in the Indo-Pacific for
    communications with them.
        Mr. Kelly. And I am going to cede some of my time back. But
    I want to thank both of you for being here today. I want to
    thank you for the visit in the office yesterday where we talked
    much more deeply.
        And with that being said, I now recognize Ranking Member
    Courtney.
        Mr. Courtney. Thank you, Mr. Chairman. And this is a
    question, I guess, to both witnesses, which is that I think you
    know from your meetings with members and, you know, past
    hearings that this subcommittee is very focused on the
    availability of used sealift vessels on the global market. In
    fact, in last year's NDAA, we directed TRANSOM and MARAD to
    conduct a market analysis to determine the availability of used
    sealift vessels that meet military requirements and can be
    purchased.
        So number one where does that report stand? When are we see
    -- going to see that?
        General Van Ovost. You will be seeing that here by June.
        Mr. Courtney. In the meantime, obviously, you have a
    request for another round of buying used vessels. Admiral
    Phillips, I mean, in your testimony you indicated that the
    government was able to purchase, I guess, the last prior round
    for about $90 million a boat, is that correct?
        Admiral Phillips. Yes, sir.
        Mr. Courtney. All right. And does that -- but that doesn't
    represent the total cost because there is an additional cost to
    actually convert that used vessel to your specifications?
        Admiral Phillips. There is. Yes, sir.
        Mr. Courtney. Can you give us sort of, you know, round --
    you know, some kind of estimate in terms of what that number
    looks like?
        Admiral Phillips. I think I would take that question for
    the record, sir, to be absolutely certain that I give you a
    good idea. But it is certainly on the order of between $10 and
    $20 million for the Jolly class vessels. And that, again, I
    will take it for the record so we give you an accurate count.
        Mr. Courtney. We do sort of need that number. And I
    appreciate, you know, your willingness to share that with us. I
    mean, we have heard 20 to 30 from some other folks that have
    visited the office, our offices.
        Because, again, just sort of going back to the math of last
    year's spending bill, in fiscal year 2024 Congress appropriated
    the request of $142 million for two vessels, which, again, if
    you take $90 million and add the conversion costs on top of
    that, it just seems like we are going to have -- you know, we
    are going to run into some problems in terms of being able to
    afford all of that.
        And, you know, I guess that is sort of the thing we
    struggle with, which is, you know, this at some point just
    becomes a cost and a risk and an aging vessel that you just
    sort of wonder whether we are getting the best value.
        So, again, do you feel that you can use last year's
    spending appropriation to buy two vehicles and convert them?
        Admiral Phillips. We do think that we will be able to buy
    two vessels with the appropriation that we have and start the
    conversion process and hopefully complete it as well using
    those funds. But I would add that the key is newer vessels cost
    less money to convert. And when we buy older vessels, we find
    things that we didn't know were there.
        The Alternative Compliance Program is quite strict. And we
    find ourselves in a similar situation to where we find
    ourselves with the ready reserves sometimes, chasing our tail
    trying to catch up with things that have been in existence for
    a very long time and that adds to the cost.
        Mr. Courtney. And I think that describes the dilemma well.
    Again, the problem is that we just don't know what is in the
    market from one day to the next in terms of whether older or
    newer are actually available there.
        So we did provide money for design of new sealifts as you
    point out. And as I mentioned, you know, it seems like the
    vessel contract manager, vessel acquisition manager/model seems
    to be something that people are embracing. I think it was in
    both of your testimonies.
        So if we were to give you the money for a New Build Sealift
    Program in this year's budget, could you put that into contract
    in fiscal year 2025?
        Admiral Phillips. Sir, I think it would be a stretch to put
    into contract in fiscal year 2025 without having 100 percent
    design at this point in time. We would have to have 100 percent
    design, and I would estimate roughly two years to be able to
    get it under contract because I don't want to overpromise
    something that I can't deliver.
        Mr. Courtney. Again, that's helpful. You know, it's a
    question that I think we are going to keep asking. Okay. With
    that, I yield back.
        Mr. Kelly. I now recognize Chairman Waltz.
        Mr. Waltz. Thank you, Mr. Chairman. And forgive me trying
    to get a sign up here, but I think this visual is powerful. We
    are all aware of Chinese Communist Party influence and how far
    the People's Republic of China has come and its influence over
    shipbuilding, over shipping, the industry, maritime
    infrastructure.
        It is to the point where I think the People's Republic of
    China could exact economic warfare, economic coercion on the
    high seas even during peacetime. And when we see the PRC
    [People's Republic of China] with 50 percent of the civilian
    global shipbuilding capacity, that is incredibly concerning.
        Just by point of some numbers here, 7,000 Chinese flag
    ocean going vessels compared to less than 200, and 1,700 orders
    last year that the Chinese are going to build less than five.
    The American people need to understand this, 600,000 workers,
    1,500 ships, large ships they are going to build. We are going
    to build -- Mr. Chairman, we are going to build 20.
        So I think you are both aware of the recent petition filed
    by the administration advocating for investigation into unfair
    and uncompetitive practices by the PRC in the maritime sector,
    behavior I believe that the CCP is doing as part of the long-
    term strategy to basically make it nearly impossible for the
    U.S. to build or operate ships that we need not only for
    economic vitality but to support our warfighter.
        Admiral Phillips, I am going to give you the floor on this.
    What policy decisions and resources does MARAD need from
    Congress to help the maritime sector rise above these
    challenges?
        This is an all of society. This is steel, aluminum,
    shipyards, dry docks, workers, wrench turners. We have asked
    for a national maritime strategy, my office in concert with
    others. Both the House and the Senate have issued our thoughts
    on it. Talk to me about how we get here as a nation and start
    digging ourselves out of this hole.
        Admiral Phillips. Thank you, sir, and thank you for the
    opportunity. What we need is a clear signal from Congress that
    this is a serious issue, that you take it seriously, which I
    know you do, and that you are intent on finding solutions to
    move things forward. By that, I mean, I will frame out --
        Mr. Waltz. How about if I can just interrupt you? How about
    if we gave you a separate budget line? Is that a clear signal?
        Admiral Phillips. It is a clear signal, sir. And, of
    course, appropriations would be required as well. But to put a
    fine point on it with the ready reserve as you have mentioned,
    at the end of 2025, I have authority to buy four more ships and
    then I am done. I have $12 million, for which we thank you, to
    do a design for a sealift vessel. But we would need additional
    appropriations, authorizations, and capacity to move forward
    from there.
        Mr. Waltz. Correct me if I'm wrong, in the first Gulf War,
    approximately what was it, about 400 ships that took our ground
    force over? And now you are sitting on 40 to 60?
        Admiral Phillips. Well, that also would have included, sir,
    the commercial vessels that were available, but they were
    approaching 200 ready reserve force vessels at that time.
        Mr. Waltz. Okay. Keep going though. What do we need to do.
    What else? Clear signal.
        Admiral Phillips. Yes, sir. Clear signal, with intent to
    move forward to begin build programs for things that we need
    nationally. And this could include not only building, but it
    could include programs that are similar to things that we have
    done before where we have either built and then leased or
    leased and then we provided the leases as the U.S. government
    and industry built to meet those leases. Long-term, it would be
    a 20 to 25 year commitment.
        Those are options or ideas for things that could be
    considered for the future. But what comes with that is, of
    course, a clear signal that we care about this, and we are
    going to move forward, support from Congress to make that
    happen. That also, of course, impacts our ability to provide
    crews, too, because then the industry sees, a-ha. I have a
    future here. I have a way to move forward.
        Without that, we have the fleet that we are authorized and
    appropriated to have using the cargo preference laws that we
    have and our DOD cargo requirements over time, which is what
    largely supports what we have today.
        Mr. Waltz. I think there's a -- the Chinese Communist Party
    now has the largest Navy in the world because they have the
    largest civilian shipbuilding industry in the world. And those
    thousands of ships, every one of them, can be a war ship just
    like that.
        And I think we have talked about this. We have talked about
    this sealift recapitalization, this issue since I have been
    here. But Mr. Chairman, I think it is time both of these
    committees start moving out in support of MARAD. Thank you.
        Mr. Kelly. The gentleman's time has expired. I now
    recognize Mr. Garamendi, Ranking Member Garamendi.
        Mr. Garamendi. Chairman Waltz is marching down a path that
    I have just given the rest of my time. It is interesting to
    note that those used ships that you are about to buy, the
    owners of those ships will take that -- what is it, $90 million
    and then go buy a Chinese built ship.
        I am trying to figure out, Mr. Waltz, how that fits into
    the concerns that you so adequately put forward. It seems to me
    that we are headed down the wrong path. But there are
    strategies that we really can and should put forward.
        The bottom line of this, until we authorize and
    appropriate, we are not going to succeed. There are some ways
    we can do this less expensively. I would like to say on the
    cheap but just less expensively.
        For example, we are going to need a lot of oilers if we are
    going to have a problem in the Pacific. In fact, we need them
    today. The John Lewis ship runs what, just under a billion a
    copy? Is that about right? We are not going to build many of
    them.
        However, if we were to pass a piece of legislation that
    Senator Wicker and I put forward, which is called the
    Energizing the American Shipbuilding Industry, Admiral and
    General, this is not for you. This is for my colleagues.
        If we were to do that and say that 10 percent of the export
    of petroleum products from the largest petroleum product export
    nation in the world, the United States, was on American built
    ships, we would build probably 40 to 50 ships in the next
    decade to 15 years, energizing our shipbuilding industry.
        The cost to the government? Not much. However, we would
    want to put in a small requirement that those ships be -- the
    word you used, Mr. Waltz, militarily useful. Have a king post
    in the middle and some communications systems.
        We could do this by simply changing the law, which we once
    had. All of the oil from the North Slope in the original 25
    years was brought to the continental United States refineries
    on American built ships. And then we allowed that to go
    offshore to other refineries over the years and then we did
    away with the ships. And now we are where we are.
        Energizing the American Shipbuilding Industry. Anybody from
    Mr. Wicker's state here? There are ways we can do this. The
    Jones Act, allow and use the Jones Act for militarily useful
    ships. Add maybe 10 percent, and we will subsidize that. We
    will give a stipend as we do with the craft program, the
    aircraft program. And we can then build a domestic fleet at the
    same time rebuilding our shipyards.
        Geez, I'm supposed to ask questions of the witnesses.
        Forgive me, commanders.
        I don't know. You say you are agnostic, General Van Ovost.
    You just need the ships. I don't like that reply, and you know
    why. We have had this conversation. I want you to be an
    advocate for American ships. Can you do that?
        General Van Ovost. I am absolutely an advocate for American
    ships. And we owe you a comeback with MARAD and the Navy to
    talk about a creative acquisition strategy that is going to
    support maritime nation writ large and be part of the national
    maritime strategy that MARAD is putting together.
        Mr. Garamendi. Thank you. I know that we talked earlier
    about the -- my colleagues talked earlier about the mariners
    themselves. Obviously, an ongoing problem not only like across
    almost every part of our economy, it's about pay. It's about
    knowledge. And it's also about in most of these cases, we have
    maritime unions, apprenticeship programs.
        There are apprenticeship programs in some of the more
    recent legislation. We ought to look at that. Use that more
    robustly. With that, I am going to yield back. Thank you so
    very much.
        Mr. Kelly. Well, I think -- and I will not disagree with
    Senator Wicker. And when he and Mr. Garamendi and I all agree
    on something, we are probably in the right space.
        I now recognize the gentleman from South Carolina, Mr.
    Wilson.
        Mr. Wilson. Thank you, Mr. Chairman. Indeed, it is
    remarkable that we get to agree together with Congressman
    Garamendi and General Kelly, and it is wonderful to agree also
    with Senator Wicker. And indeed we support bipartisan your
    efforts in every way.
        And General Van Ovost, I want to thank you for your service
    to the nation and leadership of the United States
    Transportation Command. And taking the opportunity to highlight
    South Carolina, we are so grateful that the servicemembers of
    the 437th Air Wing stationed at Joint Base Charleston from the
    Air Mobility Command under your command of TRANSCOM.
        The Joint Base Charleston is a great example of the joint
    readiness across the force. And this is due to the leadership
    within TRANSCOM enterprise. And I particularly appreciate it.
    My dad served in the Flying Tigers in World War II, Army Air
    Corps, and we used to go visit the Tulsa Air Base to see F-86s
    take off, which we thought were very advanced at that time. And
    so, again, your leadership is very critical.
        And your statement to sadly mention that 17 of the 47 ships
    in the organic ready reserve force are 50 years of age or older
    with the oldest being 56 years of age. This raises readiness
    concerns for the impact of that age and the life cycle for our
    sealift capacity. And that's why I am so glad, as you can
    clearly see, you have the bipartisan support, even bicameral,
    and so of the House and Senate.
        With that in mind, for each of you, the Iranian backed
    puppets, the Houthis, have continued their assault on the
    commercial and military vessels in the Red Sea, disrupting the
    free flow of commerce through transit routes.
        Events like this underscore the importance that the
    contingency plans and redundancy plans we have in the global
    supply chain with the direct challenge to our allies, Korea,
    Japan, India, Philippines, Australia. With that in mind, with
    the ongoing events that, General, Admiral, the military
    exercise, what lessons learned have we captured to help improve
    in the areas that we have against such threats?
        General Van Ovost. Thanks, Congressman. I will start with
    we are very focused on contested lines of communications,
    things like choke points. And so we are working with commercial
    industry to help them communicate with us to give them the
    intelligence. And, in fact, you saw us do convoys with our
    commercial partners through the Straits and into the Red Sea.
        So we are taking those lessons out to the Indo-Pacific. It
    is a different category out there. The threat is much higher.
    So we are also focused on training mariners about how to
    navigate in contested waters. We know that they will be with
    us.
        But also, I think about, we are so dependent on our
    commercial transportation partners we cannot project and
    sustain the force without them. So we will absolutely take
    these contested logistics ideas, and we are exercising them
    right now in the Indo-Pacific.
        Mr. Wilson. And today, it was really outstanding. We had
    Prime Minister Fumio of Japan speak, and I hope everybody saw
    his resolve, stated his resolve to work with NATO [North
    Atlantic Tr, to work very closely, and continue with the United
    States and how important it is that we would be working
    together and indeed with the Red Sea routes. And I know Korea,
    too, has been involved.
        General Van Ovost, would you assess the Middle East as
    being one of the most enduring security and stability
    challenges due to the numerous attacks on our infrastructure,
    Iraq, Syria and losing three American service members in Jordan
    recently on January 28, the horror of that. Are there any
    further steps that Congress can do to better facilitate your
    efforts?
        General Van Ovost. Thank you. Our hearts go out to the
    families of the fallen. When I think about the globe, though, I
    have to think about our pacing challenge is China, and our
    acute threat is Russia, as you all know what is going on there,
    with especially Russia and Ukraine and the future of whether
    Ukraine stands or falls, which is dependent on the
    supplemental. And I will let General Cavoli make that
    statement, but it's critical. And we depend on the supplemental
    as well to continue going.
        There are enduring threats around the globe to include the
    Middle East. We have great partners in the Middle East, and I
    work very closely Erik Kurilla to ensure that he has the
    transportation and logistics he needs to maintain deterrence in
    the Middle East.
        Mr. Wilson. We want to thank both of you. Your service
    could not be important as we have a war between dictators and
    democracy. I yield back.
        Mr. Kelly. And we are sending every witness to the school
    you went to. You were succinct, and you answered the questions.
    I now recognize the gentleman, Mr. Norcross.
        Mr. Norcross. Thank you, Chairman, both Chairmen and
    Ranking Members for holding this meeting and certainly to our
    witnesses. We very much appreciate the time we have had to
    discuss not only in the past but today.
        We have heard a lot about the capacity. Mr. Waltz has a
    chart up there showing what China is doing. And certainly China
    follows a rule that we don't. You don't see any of China's
    naval vessels being made anywhere but China and certainly the
    support boats.
        And our conversation, the one that I would like to have
    today, talks about our industrial base, the ability for
    shipbuilding. Certainly, Seapower has been focused on it and
    Joe Courtney and others.
        But the uninterrupted recapitalization. So on one hand we
    are having to go out to the used market to purchase ships
    because they are not available to us in the time factor and the
    costs that we need them.
        Yet, we don't want to set up that recapitalization to build
    new from the get-go. So it is a self-fulfilled prophecy. We are
    not going to have the capacity until we make that decision
    collectively that we have to build this in America to build up
    that capacity because we talk about supply chain issues,
    particularly between the light during the pandemic.
        Well, the most difficult part to get of any ship, of any
    airplane, of any vessel that might run on tracks is called the
    human capital. And you don't grow it overnight. It takes time
    and certainly it takes a lot of pressure from us to say we need
    to build this. How many times did it take getting it attached
    onto the Jones Act?
        So what I am going to do is the both of you went the full
    yard and talked about the construction management model. And
    what we saw there virtually in naval terms, absolutely on time
    and under budget in naval terms. But what they are doing there
    -- and we can expand that model so that self-fulfilling
    prophecy of not being able to have the capacity, you have to
    start somewhere.
        So, Admiral, share with us a little bit what they are doing
    in Philadelphia under that construction management model and
    how we can take that and potentially expand it because they
    want the work. How can we give them the work they need and more
    importantly have those vessels for what we need to defend
    America?
        Admiral Phillips. Thank you, sir, for that question. I
    would add that Philly isn't the only one that wants the work.
    But certainly Philly has shown, Philadelphia has shown that the
    Vessel Construction Manager Program can work. The program
    consists of us contracting with the vessel construction manager
    who then contracts with the yard to build the vessel as
    designed.
        In this case, I believe a lot of the success is attributed
    to having a strong vessel construction manager first of all but
    also starting with 100 percent design, with a firm fixed price
    contract and a very small change order budget and then using
    commercial best practices to oversee the design, build, and
    implementation of that build with the ship.
        So that is what has made the Philly ship NSMV [National
    Security Multi-Mission Vessel] program so successful. And I
    believe that can be replicated in many senses to facilitate
    additional ship construction programs. And it can be worked
    across many yards at many different vessel construction
    managers.
        Mr. Norcross. We build those ships differently than our
    vessels that go to war. There is no question about that. But
    100 percent design or as close as we can get to it, and we have
    seen that change.
        One of the questions that came up is how can we send a
    clear message to you? Well, we did it last year in the NDAA.
    The modified Buy American provision for major acquisitions used
    to be in the fifties. We are going to move that up
    incrementally per year to send the signal to industry, we are
    going to buy from American, up to the 75 percent.
        That is the sort of signals we are sending. But if we don't
    exercise it on our end and your end to actually implement
    these, they are not going to get it the right way. And I am
    going to yield back my final 30 seconds. Thanks.
        Mr. Kelly. I thank the gentleman. I now recognize Mr.
    Scott.
        Mr. Scott. Thank you, Mr. Chairman. I think I have a little
    take than some of the previous comments that have been made. I
    want the American citizens to know we are not talking about
    aircraft carriers or destroyers when we are talking about the
    buy used. If I'm not mistaken, and correct me if I'm wrong, we
    are typically talking about a roll on, roll off ship very
    similar to what we see in the pictures, unfortunately, of the
    bridge collapse. Is that correct when we are talking about
    these roll on, roll offs?
        Admiral Phillips. Yes, sir, it is, essentially. The three
    most recent ships we bought were ROCONs, so some container
    capacity, some roll on, roll off capacity. The two previous
    were ROROs.
        Mr. Scott. When is the last time that a roll on, roll off
    ship was built inside the United States of America?
        Admiral Phillips. The last commercially built vessels that
    were built in this country, sir, for international trade, not
    Jones Act, international trade, were built in the 80s.
        Mr. Scott. Okay.
        Admiral Phillips. We do have Jones Act construction now of
    -- an example would be Matson and Pasha to West Coast carriers
    who build container vessels.
        Mr. Scott. Okay.
        Admiral Phillips. And they build them in this country.
        Mr. Scott. So how many of those container vessels have been
    built inside the United States in the last 10 years?
        Admiral Phillips. I can't answer the last 10 years. Sir, I
    know Pasha just finished two vessels, and Matson has an order
    for three in Philly that will follow the NSMV program.
        Mr. Scott. And how long will it take to build those three?
        Admiral Phillips. Several years, I would expect. This is an
    estimate, probably four years.
        Mr. Scott. Okay. My point is that if we are going to deal
    with the capacity challenge that we have in the time that we
    have to deal with it, you have to accept that the calendar days
    and the time limit and the capacity is a problem. And I think
    we should raise the nine ship limit.
        And if we get rid of a 50-year-old ship, and we end up with
    a 15 or 20-year-old ship, until we are able to get new ships
    built, if something kicks off between now and then, then we are
    better able to serve this country.
        And so my question is, you know, you have called for,
    General Van Ovost, the nine ship limit to be removed, what if
    it is not removed? How long would it take if it is not removed
    for us to fill the capacity gap that we have?
        General Van Ovost. Given the expected decommissioning of
    the 27 ships in the next 8 years, we will be at a much elevated
    risk to be able to meet our mission requirements, which is why
    we need to come back to you with a more comprehensive strategy
    that looks at the near term, the midterm and the far term --
        Mr. Scott. And that is my --
        General Van Ovost. -- compilation.
        Mr. Scott. And so when we talk about the need to
    temporarily -- to raise the limits so that we are temporarily
    able to use ships not built in China, but built in Singapore,
    built in Japan, we are standing down how many ships over the
    next? Give me that number again, what you just gave me?
        General Van Ovost. Twenty-seven, 56 percent of the fleet.
        Mr. Scott. Okay. So we are going to get rid of 50 percent
    of our transportation capacity over the next how many years?
        General Van Ovost. Eight.
        Mr. Scott. Over the next eight years?
        General Van Ovost. 2032.
        Mr. Scott. Okay. And it doesn't sound to me like in the
    last 30 years there have been that many ships built inside the
    United States in that category. It is simply a question of do
    you want to have something to fill the gap until the U.S.
    manufacturers are able to fill this or not if you ask me.
        So real quick, General Van Ovost, we talked about the
    supplemental and the need for the supplemental for you. Can you
    talk to us just briefly about the $550 million, the specifics
    of that just so that everybody -- I think the people on the
    committee understand. But just so the American citizens
    understand the need for the supplemental from the standpoint of
    Transportation Command.
        General Van Ovost. Yes, sir. From the standpoint of
    Transportation Command, $550 million were earmarked for
    transportation services to account for the transportation for
    the events after October 7 in the Middle East. Those
    transportation costs have not been recouped. We have not been
    reimbursed. And that causes us to drain our funds such that we
    -- if we have another emergency, we would have to look to see
    where we would have capability to provide options for the
    Secretary of Defense.
        So our transportation working capital fund is necessary to
    -- it is really our readiness function for TRANSCOM.
        Mr. Scott. And that money has already been spent because of
    what happened in Israel?
        General Van Ovost. Approximately $180 million has been
    spent so far. But we are forecasting up to 550 because we
    deployed forces, and we will have to bring them back in 2024.
        Mr. Scott. I thank both of you for your time and your
    service.
        Mr. Kelly. The gentleman's time has expired. I will now
    recognize the gentleman from Pennsylvania, Mr. Deluzio.
        Mr. Deluzio. Thank you, Mr. Chairman. General, Admiral,
    good to see you both.
        General Van Ovost, I will start with you. I appreciate the
    Transportation Command report responding to a request I had
    made in this past year's NDAA identifying vulnerabilities in
    transportation networks here in this country.
        Personnel section under USTRANSCOM concerns regarding
    commercial railroad capabilities, the report states, and I will
    read this brief passage. "Over the past decade, the
    implementation of lean operational processes by the major
    railroads, commonly referred to as precision scheduled
    railroading, or PSR, has had impacts on the railroad labor
    force across almost all specialized trades. The railroads have
    reduced the number of employees. Although the intent of PSR is
    to improve the overall economic competitiveness and efficiency
    of rail operations, it has arguably sacrificed resiliency in
    the ability of the rail industry to effectively respond to
    changes."
        General, the overall assessment in the report is that
    essentially freight rail is adequate to meet the needs of your
    command. Although you have identified that risk in the report,
    just give me a sense of those staffing issues and how they
    could raise concerns intermediate longer term to the mission
    you have to accomplish.
        General Van Ovost. Certainly, I would say across the
    transportation industry we are having -- we are seeing labor
    shortages and so railroad is no exception to that. So as you
    have less crews, you have less resiliency. It could occur with
    delays. And so we are working very closely with the railroad
    industry to have discussions about how to ensure resiliency
    across the networks.
        That said, should we have an issue on a rail, we do have
    multiple ways to perhaps offload the rail and go to trucking.
    So I work with NORTHCOM [Northern Command] with respect to
    transportation, making sure that we have a robust way to defend
    the transportation lines. And I work with the DOT [Department
    of Transportation] to ensure we have multiple pathways to get
    our cargo where it needs to go.
        Mr. Deluzio. Very good. Thank you. And I appreciate the
    department's announcement in the last few weeks of implementing
    two-person minimum staffing. I think it will help with real
    safety across the board. It is part my Railway Safety Act in
    general.
        Admiral Phillips, your testimony last year at last year's
    posture hearing mentions direction from Congress from MARAD to
    develop a roll on, roll of ship design for construction. We
    have had a little bit of discussion there.
        Give us a sense where things -- what kind of updates you
    have for us if any.
        Admiral Phillips. Thank you for that question, sir. We
    thank Congress this year for -- last year we didn't have any
    funding to do this. This year we do have funding to do this. So
    2024 NDAA authorized $12 million, and we have an appropriation
    for $12 million to begin to develop this design.
        Mr. Deluzio. Very good, with that in mind given the pace of
    things today and votes, I will yield back, Mr. Chairman.
        Mr. Kelly. I thank the gentleman. I now recognize the
    gentleman from Minnesota who has an accent, Mr. Finstad.
        Mr. Finstad. Thank you, Mr. Chair. And thank you both for
    being here and for your service.
        Many hardworking suppliers of several different
    transportation systems which fulfill missions and requirements
    for the three subordinate commands of U.S. Transportation
    Command live and work in southern Minnesota.
        The demand signals for the industrial base is critical to
    our national security, projecting power and investing in the
    defense workforce. It is these private sector workers and
    innovators that will build and sustain the mobility enterprise.
    Employees and independent contractors alike have a role to play
    in this most important work.
        So with that being said and with the acknowledgment of the
    time that we have here, General Van Ovost, I understand that
    USTRANSCOM favors moving away from the independent contractors
    for truckers that move freight and household goods. Do you
    think this is a wise move? And have you based this course of
    action on any underlying data, considering that a large portion
    of our trucking fleet is made up of independent contractors?
        General Van Ovost. Gosh, I wouldn't say we are walking away
    from independent contractors. In fact, if you provide quality
    move services, you are absolutely welcome and volunteer to join
    the Home Safe Alliance.
        And, again, this is a single move manager. But we will have
    multiple sub-companies set up underneath. In fact, at least 40
    percent of the contractors up underneath Home Safe Alliance
    must be -- you know, are smaller industry small business
    owners. And so we are keeping a close eye to ensure they meet
    that requirement. In fact, it is a performance parameter for
    them to meet.
        Mr. Finstad. Great. Well, that's good to hear. I mean, it
    is obviously important for the folks that I represent. It is a
    great opportunity and partnership to really strengthen and send
    signals to the defense industrial base. And I am just happy to
    hear your response.
        So with that, Mr. Chair, me and my funny accent will yield
    back.
        Mr. Kelly. I now recognize the gentlelady from Hawaii, Ms.
    Tokuda.
        Ms. Tokuda. Thank you very much, Mr. Chair. And General,
    thank you so much for your service.
        General, your written testimony highlighted the fact that
    our forces are not ready, postured, or scaled to optimize
    limited strategic assets for global patient movement. I am
    especially interested in the challenges of patient movement in
    a contested environment and in large scale combat operations
    against a peer or near peer adversary in the Indo-Pacific, my
    back yard.
        The fiscal year 2020 NDAA established a pilot program to
    enhance interoperability and surge capacity of the national
    disaster medical system, which includes three main components,
    medical response, patient movement, and definitive care.
        Now I believe it called for five pilot sites, none of which
    are in the Pacific region. That being said, General, would you
    please briefly discuss how TRANSCOM works with and integrates
    the national disaster medical system into your planning for
    global patient movement in the large-scale Pacific contingency?
        General Van Ovost. I would like to first point out that our
    air medical evacuation personnel have performed brilliantly
    over the last few decades to save our servicemen and women
    around the globe. And I am immensely proud of what they do
    every day.
        That said, we are at risk. To me, the casualty demand
    expected in a large-scale combat operation, especially in the
    waters of the Pacific -- in fact, we expect to have to move the
    amount of the entire patients removed last year in one week in
    such an event.
        This is how we have to think about how we are going to have
    to change our concepts of operation and our modes and actually
    how we deliver when we think about people having to dwell in
    theater, how we have to partner more with our allies and
    partners to provide medical capacity in theater and how do we
    make those routes streamlined to get back to the United States?
        And when we get back to the United States, I work with
    USNORTHCOM to work with NDMS [National Disaster Medical System]
    to try to distribute those patients at different centers.
        So, again, this is an end-to-end discussion. But it is at
    the volume that we have just never seen. In fact, we really
    haven't seen -- should we lose a ship, you know, mariners in
    the water, how we collect them out of the water and how we get
    them into the system. So we are really -- this is going to be a
    whole of nation effort if we have to go to war. And we are
    absolutely going to be using all services and resources of our
    nation to deliver.
        Ms. Tokuda. Thank you. I know I am running out of time. And
    I would --
        Mr. Kelly. You're not. You have got an additional two
    minutes because they didn't restart two minutes. So you have
    got an additional two minutes to what is showing.
        Ms. Tokuda. That being said, I do know we have to go to
    votes. I would suspect that if we are looking at some kind of
    large scale disaster, engagement, casualties in the Pacific,
    Hawaii would play a critical role in supporting patient
    movement and care, especially as we get them towards the
    continent.
        You know, what kind of challenges do you foresee with
    transportation infrastructure both in Hawaii and in the
    Pacific, places like Guam, in terms of our ability to conduct
    air medical evacuations. Also one big problem that we face
    consistently in Hawaii, which will only get worse in the case
    of some kind of contingency, is having sufficient medical
    workforce, equipment, supplies, facilities, to be able to
    support health care needs.
        Is TRANSCOM thinking through what kind of surge capacity
    for health care staff and facilities we need to be prepared
    for, whether military or civilian, to meet any kind of patient
    movement or care through the Indo-Pacific, through Hawaii,
    again to the continent?
        General Van Ovost. Thank you. We are doing a lot of
    thinking about the entire network. Again, I am responsible for
    the end-to-end movement of patients around the globe. So we are
    rethinking. We are reposturing where would we hold patients.
    Where could we bring them for rehab? You know, Tripoli would
    certainly be, you know, an option for that.
        And so as I work with NORTHCOM and NDMS on where we would
    have to expand or where we are thinking, again, about new
    concepts and new ways to take care of them. So that would be
    necessarily the downstream work as we set requirements for
    different locations around the Pacific and in the United
    States.
        Ms. Tokuda. Thank you. You know, I know there is, as I
    said, five pilot sites perhaps if there are an extension of our
    additional pilot sits. One in the Pacific would be a valuable
    one so that we can really start to look at what would be
    necessary for us to be able to prepare for any kind of conflict
    and mass casualties. Thank you, Chair. I yield back.
        Mr. Kelly. I now recognize Mr. Gimenez.
        Mr. Gimenez. Thank you, Mr. Chairman. You know, during
    World War II for every aircraft carrier that was built by the
    Japanese, we could build six. Unfortunately for us today, we
    are Japan, and China is us except their capacity it is even
    greater than what our advantage was in World War II.
        We must, Mr. Chairman and colleagues, we need to make
    shipbuilding a defense, a security priority. It is not going to
    be done here. Whatever we do here is peanuts to be honest with
    you when you look at, you know, really what shipbuilding
    capacity is all about.
        And we are talking about 9 ships or 20 ships, that is
    nothing compared to the capacity that China has. And so we need
    to play the game that China played. They played it very well.
    They subsidized their industry. They captured the market. The
    world is dependent on them. They have got all the capacity. And
    they did it probably not using what we call fair trade. They
    use their own -- they subsidize their industries. And that is
    what they do by the way. That is what they do for everything
    that they feel to be strategic, all those industries are
    strategic for them.
        They subsidize it, capture the market, and then they got
    it. And so we have got to start playing some of that game, not
    just here in HASC [House Armed Services Committee], but on a
    whole of government approach. And that is my comment for this.
        But my question to you, Admiral Phillips, the Port of
    Baltimore is home port of part of the military sealift
    command's national defense reserve fleet. What is the
    assessment of the ability to respond with the tragedy of the
    Francis Scott Key Bridge? Were any of the vessels impacted by
    this incident?
        Admiral Phillips. Sir, Thank you for that question. We
    maintain -- typically we have six ships there. We have four in
    Port Baltimore right now. Two of the four are under
    maintenance. The other two would be fill-up rounds. They are
    unable to leave the port. I would add that we believe once the
    35-foot channel is open, which we expect at the end of April,
    that they are all clear, should they be recalled by the
    Department of Defense.
        Mr. Gimenez. Were you prepared for the event like what
    happened at that bridge and are there any contingency plans for
    let's say a black swan event or deliberate attack on our key
    infrastructure like bridges that could bottle up our fleet?
        Admiral Phillips. So, sir, as you are aware, there are 48
    total vessels in the ready reserve right now. So there are
    additional vessels stationed around the country with similar
    capacities that would be available.
        Of course, a black swan event is always a challenge to
    anticipate, but that is exactly why we don't station them all
    together, and we station them strategically around the nation.
        Mr. Gimenez. Finally, for you, Admiral, I would really be
    interested in your views on how we can build -- we can restore
    shipbuilding capacity here in the United States. And not on an
    incremental basis. Somewhere to it really meets the security
    needs of this country.
        I really believe this is a critical piece of our security
    infrastructure and that we have been asleep at the wheel, and
    we don't have the capacity to respond like we used to. We
    certainly don't have the capacity to respond to an adversary
    like China.
        This is going to be a long-term thing. It is not going to
    happen overnight. How can we get back to having at least the
    capacity that we need to maintain our freedoms here in the
    United States? And I appreciate that. And I will yield back.
        Mr. Kelly. The gentleman yields back. I now recognize the
    gentleman from Texas, Mr. Veasey.
        Mr. Veasey. Thank you, Mr. Chairman. General, I wanted to
    ask if you could talk a little bit about the V-22. I know that
    the Pentagon has cleared it to fly again. And given the unique
    capabilities that the V-22 has, particularly in rapid intra-
    theater transport, can you speak to how the V-22 fits into the
    operational strategy particularly for missions that require
    both speed and versatility?
        General Van Ovost. Sir, I would love to talk about the V-
    22. It is a great airplane. However, I would ask you to speak
    to the Navy and SOCOM about the airplanes. I don't have them in
    my repertoire.
        Mr. Veasey. Okay. And then I also wanted to ask you, and I
    talked with you about this before, I know that it has taken
    nearly six years from the initial announcement in 2018 to begin
    implementing the new military household goods shipment system.
    And I wanted to ask you, why are these specific 14
    installations chosen for the initial rollout?
        General Van Ovost. We are doing a conditions-based rollout.
    And we started here in April. And we chose those locations
    because the services said that they were ready because -- this
    is not just a single contractor. We are changing the entire
    model. So we work with the services to train them. They came
    forward and said we are ready at these locations. And it made
    sense.
        These are local moves within 50 miles. And so as they chose
    sort of the heat map of where the most moves would be and where
    they were the most ready, that is how we selected them. We do
    all of this in conjunction with the services.
        Mr. Veasey. Okay. And what are the parameters for success
    in this initial phase? And based on the current schedule, when
    do you foresee the new system being rolled out to encompass 99
    percent of service members?
        General Van Ovost. So we are going to pause bringing on new
    capability during the peak system to reduce risk and really
    focus on customer experience. So the vast majority of this
    season will be done under the old tender of service system. And
    then we will begin full domestic ramp-up through the end of
    this year, about September through December. And then all the
    way through to next year, we will start doing overseas moves
    beginning in September of 2025 and then ramp up from there
    again, a deliberate conditions-based approach to this
    capability.
        That said, we have, you know, almost 30 metrics that we
    watch. We gather data every day, do analysis weekly, on the
    metrics that they are going to be graded against. So
    immediately we will be able to see if there are any concerns
    and provide immediate feedback. And that feedback is also
    available to the services and to the company and some vendors.
        Mr. Veasey. Yeah. I wanted to ask you also, how do you
    think the moves -- if you look at the current experience versus
    the new system that you want to put in place for the military
    moving system, what steps are being taken to ensure that the
    enhancements are going to be effective?
        General Van Ovost. Absolutely. Look, the current tender of
    service program does not provide consistent, high quality
    moving experience for our service members and their families.
    And it is difficult to hold industry accountable for
    performance failures.
        So this complete change in how we are doing household
    goods, as really mandated in 2018 by Congress, this is going to
    help us achieve a standardization, an integration, and capacity
    management that we can achieve today.
        Accountability with defined standards, with trained
    personnel, modern digital management tools where you could do
    the move on your iPhone, enhanced communications, and
    simplified claims, again, that we do not have today. So given
    all of those changes, we think it is going to be a radically
    different experience.
        Mr. Veasey. And speaking of the accountability that you
    just mentioned, how was this new system as far as service
    quality concerned, how is it going to handle potential issues
    that you hear from families dealing with loss, damages,
    people's belongings during the move?
        General Van Ovost. We now have a 24/7 contact center, and
    the quality assurance representatives that are at the locations
    that will visit onsite are cleared to immediately make a call
    if there is a problem, which then gets funnels to a center that
    is going to take care of the problem right away. So we will
    know immediately if things start to go off the rails because
    what we really desire is that our service members and their
    families have a confident, pleasant, quality move no matter
    where they are moving.
        Mr. Veasey. Thank you very much. Thank you, Mr. Chairman. I
    yield back.
        Mr. Kelly. I now recognize the gentleman from Guam, Mr.
    Moylan.
        Mr. Moylan. Thank you, Mr. Chairman. Thank you, General.
    Thank you, Rear Admiral, for your testimony. And, General, I
    appreciate your visits to my office. It has been very helpful.
    And I truly support your objective to ensuring that we have the
    fleet that is necessary, absolutely.
        Once we get those ships into, especially, the INDOPACOM
    area, we have to get it loaded and unloaded. And, General, in
    our last meeting we talked about the urgency of funding the
    Port Authority of Guam and its unique role for the Department
    of Defense.
        Can you please elaborate on the necessity of the Port
    Authority of Guam in USTRANSCOM operational structure and what
    infrastructure there is critical to your mission?
        General Van Ovost. Thank you. I would say it is an
    understatement to say how important Guam is to our operation in
    the Pacific. So thank you for your leadership out there and
    thank you to the committee for the support of the
    infrastructure and resiliency work that we are doing out there
    right now.
        So Guam is critical. And the Navy Port, the Navy Seaport of
    Guam, is critical for us for a lot of our deployment
    requirements. And then the civilian side of the port has been
    important for our sustainment if you will and construction
    materials which are really critical again right now, as we are
    bolstering our posture in helping the services and our allies
    and partners come out there and get settled in.
        So I think about Guam all the time. In fact, there is a new
    two-star commander that is going to roll out and be responsible
    for integrating all of those projects together. And I look
    forward to working with him or her on how do we help to ensure
    that we can phase in and meet the requirements of the build up
    there.
        Mr. Moylan. Thank you. And the new general is the one-star
    that stepped up. Hoffman will continue on there with his
    family. So that is wonderful.
        Along with that line, there are two phases of
    infrastructure I am concerned about to include the Port of
    Guam's Gantry cranes, which are in need of replacement, and the
    harbor's breakwater, which reportedly one more typhoon could
    destroy.
        If these two pieces of infrastructure fail, the people of
    Guam could lose access to commercial shipping. Considering the
    approximately 40 percent of cargo moving through the Port of
    Guam is for the military, how will the Department of Defense be
    impacted by this infrastructure deterioration?
        General Van Ovost. Certainly, we like resilient options
    with respect to berthing and where the cranes are, you know,
    the Navy Port and the civilian side of the port.
        As you now, the Department of Defense does not fund the
    infrastructure on the civilian side. I turn to our maritime
    administration partners for opportunities for loans because
    essentially, we get billed to use those things. And it is that
    money that goes back, that goes back to reinforce and
    reinvestment supposedly by the civilian contractors. So I defer
    to Admiral Phillips.
        Admiral Phillips. Thank you, ma'am. And Congressman, thank
    you. We have received letters from the governor on the topics
    you are mentioning exactly. And we have also been visited by
    Guam and Port of Guam staff many times. I see them often at
    AAPA [American Association of Port Authorities]. And I thank
    them for their interest and their visits.
        As you aware, we have a discretionary grant program, port
    infrastructure development program. That is an opportunity for
    Guam. They are a strategic port. So they are a part of that
    process as well.
        And, as discussed, our gateway director, who is quite
    familiar with the staff at the Port of Guam, has been in
    contact with them to help them work through opportunities to
    apply not only the PIDP [Port Infrastructure Development
    Program], which I know you have done, and done successfully in
    the past, but also to look at other grants within the
    Department of Transportation that may also facilitate the needs
    of Guam and particularly the Port.
        Mr. Moylan. I thank you for that and am looking forward to
    that being completed.
        And the final question is for you, Rear Admiral. The
    Maritime Security Program helps America's shipping companies
    remain competitive in global markets and service routes to the
    Western Pacific, including Guam. Can you please outline how
    fully funding the Maritime Security Program benefits America
    and the Pacific and supports our national security?
        Admiral Phillips. Yes, sir. Thank you for that question. So
    MSP, the Maritime Security Program, is fully funded at present
    under current appropriations and authorizations, $318 million a
    year. That is also in the President's budget request.
        Certainly, having a full 60 ships ready to support U.S.
    cargo movements around the world and particularly in support of
    DOD requirements and other cargo preference requirements is
    essential to us being able to move our cargo at the time and
    place of our choosing. And MSP in particular is a key element
    to that process. And we are very happy that we have 60 vessels
    in there now who are executing those missions.
        Mr. Moylan. I thank you for that. Thank you for what you
    do. I am looking forward to working with you to make this
    happen.
        Thank you, Mr. Chairman. I yield back.
        Mr. Kelly. And I would be remiss if I didn't recognize our
    senior enlisted leaders and the hard work that they do as our
    battle buddies every day, the aides, the civilian staff that
    work so tremendously. I thank both of our witnesses, no joke,
    for being the most succinct and accurate in answering the
    questions. And I know that doesn't come without the great staff
    that is behind you.
        With that this hearing is adjourned.
        [Whereupon, at 4:21 p.m., the subcommittees were
    adjourned.]

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                                A P P E N D I X

                                 April 11, 2024

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                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                 April 11, 2024

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                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                 April 11, 2024

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                       QUESTIONS SUBMITTED BY MR. ROGERS

        Mr. Rogers. USTRANSCOM's role is to provide the DOD with air, land,
    and sea transportation. California is a major route for USTRANSCOM's
    movements, especially as it pertains to dealing with our Pacific
    posture. The California Air Resources Board, CARB, has a proposal that
    I understand could significantly impact the ability of the national
    rail network to support DOD deployment to the West Coast by banning
    certain locomotives from operating in California starting in 2030 and
    imposing a requirement for zero emission locomotives, which currently
    do not exist. According to the Association of American Railroads about
    65% of the nation's locomotives would be prohibited from entering
    California starting in 2030. What impact would it have on your
    operations if railroads could not service routes in California or had
    to divert cargoes to other areas to meet DOD logistics requirements?
        General Van Ovost. The preservation of robust commercial freight
    rail capability in California is critical to USTRANSCOM's ability to
    deploy and sustain forces rapidly, particularly in support of
    USINDOPACOM requirements.
        There are 15 defense sites or activities in California identified
    in the 2023 Strategic Rail Corridor Network (STRACNET) report as
    requiring commercial rail service. These sites are served primarily by
    BNSF Railway and Union Pacific Railroad. On an annual basis, California
    sees the second most rail shipments of DoD equipment, only behind
    Texas. Many of these shipments are to or from the National Training
    Center (NTC) at Fort Irwin -- a critical U.S. Army maneuver combat
    center, which prepares Soldiers for unit deployments -- and accounts
    for over 10,000 railcars moved in 2023.
        Most critical to the DoD's ability to deploy and sustain forces are
    the five designated Strategic Seaports (three commercial and two
    military) within California. Access to these seaports is necessary to
    project combat power rapidly from U.S. military installations
    throughout the country to USINDOPACOM. USTRANSCOM cannot meet
    USINDOPACOM operational plan requirements without the Strategic
    Seaports located in California and without the ability to move combat
    equipment to these Seaports via rail.
        The most important Strategic Seaport in the nation supporting
    USINDOPACOM is the Military Ocean Terminal Concord (MOTCO) in Concord,
    California. This purpose-built ammunition terminal is the only
    Strategic Seaport with the capacity to ship required quantities of
    containerized munitions. Both MOTCO and NTC are unique installations
    with critical roles that cannot be replicated. Therefore, any impact to
    rail service to these two locations would be extremely detrimental to
    national security.
        Although military locomotives are exempt from the California Air
    Resources Board (CARB) regulation, as noted above, USTRANSCOM relies
    heavily on the commercial rail network. The Command is aware of the
    rail industry's concerns with complying with the CARB regulation within
    its prescribed timelines and specifically questioning the technical
    feasibility of meeting the requirement for Class 1 line-haul
    locomotives to be in zero emission configuration by 2035.
        Regardless of technical feasibility, compliance will be costly and
    USTRANSCOM anticipates the railroads will pass this cost onto
    customers, including the DoD. In some cases, short line railroads would
    not be able to pass these costs down to customers, which may force
    short line railroads to discontinue service and close. More concerning
    than increased transportation costs is the potential for degraded
    service as the railroads are forced to make potentially significant
    changes to their capital investment plans and operating procedures. The
    freight rail network is a national network that benefits from the
    ability to operate across state lines under a predictable and
    consistent regulatory framework. Deferring or delegating rail industry
    regulatory authority to state and local agencies may introduce
    significant disruptions to freight rail service.
                                     ______

                        QUESTIONS SUBMITTED BY MR. SCOTT
        Mr. Scott. US 501c3s are working with the Ukrainian government and
    have vehicles needed by the Ukrainian government. Why can't U.S.
    Transportation Command transport donated emergency vehicles from the
    USA to Ukraine?
        General Van Ovost. USTRANSCOM provides movement of an immediate
    emergency or lifesaving nature, in direct support of a DoD mission,
    when authorized by statute or requested by the head of an executive
    agency of the Federal Government. Law and policy limit what USTRANSCOM
    can provide in the way of transportation support to non-DoD agencies or
    foreign governments, to include the movement of donated goods, even
    when a demonstrated need exists as in the case of donated emergency
    vehicles for Ukraine.
        One statutory authority that would provide the capability to move
    humanitarian goods is the Denton Humanitarian Assistance Program
    (Denton Program). The U.S. Department of State, the U.S. Agency for
    International Development (USAID), and Defense Security Cooperation
    Agency (DSCA) jointly administer the program. The Denton Program is a
    DoD transportation program, authorized by statute (10 U.S. Code 402),
    centrally managed by the DSCA, and supported by USTRANSCOM.
        The program moves humanitarian cargo donated by U.S.-based Non-
    Governmental Organizations (NGOs) to developing nations for
    humanitarian assistance. DoD transports approved humanitarian cargo by
    land, air, or sea assets on a space-available basis. For authorized
    humanitarian assistance and disaster aid support under the Denton Act,
    Federal agencies request DoD move such cargo through the Secretary of
    Defense. Title 10, U.S. Code, provides additional authorities related
    to supporting humanitarian and foreign disaster assistance.
        Mr. Scott. How can established and vetted 501c3 groups that have
    already sent dozens and dozens of emergency vehicles to Ukraine from
    the USA work with U.S. Transportation Command to explore possible
    partnership opportunities?
        General Van Ovost. Specific statutory and regulatory authorities
    limit the ability for DoD to move non-DoD assets and donated goods.
    Established and vetted 501(c)(3) organizations may contact the
    Department of State, or USAID, to have these requests considered for
    movement under authorities related to disaster relief and humanitarian
    aid efforts as authorized in Title 10, U.S. Code, to include the Denton
    Humanitarian Assistance Program (10 U.S. Code 402) that provides for
    DoD movement of humanitarian cargo donated by U.S.-based NGOs to
    developing nations to ease human suffering.
                                     ______

                        QUESTIONS SUBMITTED BY MR. WALTZ
        Mr. Waltz. DoD has introduced a proposal that could jeopardize the
    safety and security of the transportation of arms, ammunition, and
    explosives (AA&E) carried by motor carriers that proudly support DoD
    missions and federal agencies by transporting arms and ammunition,
    disaster relief supplies, and other specialized freight. As you know,
    the DoD requires motor carriers to comply with numerous rules to
    transport any military freight. These truckload and less-than-truckload
    motor carriers play a vital role in moving goods throughout the United
    States to ensure military readiness.
        There are additional safety and security requirements specifically
    for a class of freight called TPS (Transportation Protective Services),
    which includes AA&E (Arms, Ammunition, and Explosives), that motor
    carriers must abide by to haul those sensitive shipments. The unique
    additional requirements include (1) constant surveillance and custody
    of a shipment by a qualified DoD-approved carrier, (2) identification
    requirements to verify the driver's connection to the carrier on the
    bill of lading, (3) the capability to trace an in-transit shipment in
    less than one hour, (4) unique training for drivers, and (5)
    significant investments in specialized equipment.
        This new DoD proposal would allow the tendering of TPS shipments to
    unqualified, non-TPS motor carriers and logistics providers during
    surges in AA&E transportation (such as sharp increases in overseas
    ammunition shipments). It is unlikely that a non-TPS motor carrier,
    that has never previously met the necessarily high security thresholds
    for AA&E shipments and has never moved such shipments before, will have
    the experience and operational protocols in place to safely move these
    sensitive goods.
        DoD has not yet provided any data to justify the need for this
    proposed change, such as identifying the number of AA&E shipments that
    industry was unable to support, anticipated shortfalls in capacity, or
    how many TPS shipments would be hauled by non-TPS carriers. As a
    result, the current pending DoD proposal creates unnecessary risks to
    solve a problem whose scope is unclear. Can you provide me the data to
    justify this proposed change?
        General Van Ovost. USTRANSCOM's responsibility is to ensure access
    to transportation capacity to meet current and potential movement
    requirements. This includes routinely reviewing options designed to
    increase capacity through policy changes, operational changes, and
    waivers. The proposal you describe stems from capacity issues
    encountered during Presidential Drawdown Authority movements supporting
    Ukraine operations. Specifically, this policy proposal would provide
    the Commanding General of the Military Surface Deployment and
    Distribution Command the authority to approve limited Transportation
    Protective Service waivers that may be executed during a contingency or
    crisis situation to expand DoD's available motor ammunition and
    explosives (AE) capacity.
        This waiver authority requires thorough consideration of multiple
    factors before execution to include alternate courses of action, DoD
    mitigating actions to increase required capacity, and situation-
    specific data analysis; these waivers will only be approved after
    formal risk acceptance at the General/Flag-Officer level.
        The specific concerns relative to unique requirements are related
    to a limited proposal which allows SDDC/CG to authorize non-cleared
    drivers with HAZMAT authority to move only Hazard Class 1.4 ammunition
    and explosives, which are generally considered small arms ammunition
    and low risk explosives. This would only be executed when requirements
    exceed available capacity, and the priority would be given to currently
    approved AE carriers or a Freight Carrier Registration Program (FCRP)
    approved affiliated company, who may be able to access additional
    capacity if the driver training and clearance and unique vehicle
    requirements are waived.
        The existing constant surveillance and shipment tracing remain in
    place. This proposal is just one of many policy and operational changes
    under consideration to ensure continued capacity availability to
    support DoD AE movement requirements. Since contingencies or crises may
    come in several -- and often unforeseen -- forms, it is difficult to
    provide data up front to support all the different permutations where
    these proposals may be executed. USTRANSCOM actively is engaged with
    appropriate DoD stakeholders and our industry partners in conducting
    comprehensive risk informed reviews of all proposals. USTRANSCOM will
    continue to partner with industry in further developing and scoping
    these proposals.
                                     ______

                       QUESTIONS SUBMITTED BY MR. GIMENEZ
        Mr. Gimenez. Please describe the challenges you will face
    overcoming the vast distances of the Pacific especially with regards to
    your role coordinating the JDDE (Joint Deployment and Distribution
    Enterprise) for intra-theater distribution in a contested environment?
        General Van Ovost. Part of USTRANSCOM's Unified Command Plan
    assigned mission is to advocate for global deployment and distribution
    capabilities, which includes addressing challenges with intra-theater
    lift capabilities and capacity. Our role includes advocating for
    solutions to mitigate the tyranny of distance which is exacerbated when
    supporting a contingency or crisis in the Indo-Pacific. Our research
    shows intra-theater demands emanating from emerging Military Department
    and Joint Warfighting Concepts are increasing the demand for intra-
    theater airlift and sealift to position or reposition forces and
    sustainment for broadly distributed operations.
        Recent Indo-Pacific analysis highlighted a tight coupling between
    air and sea-lift assets required to maneuver and sustain fielded forces
    given the dearth of overland routes. Absent sufficient shallow-draft
    sealift vessels, movement requirements will shift to intra-theater
    airlift and inter-theater platforms due to the significant distances in
    the Pacific theater. This exacerbates demands already levied on our
    airlift fleets. Consequently, the President's FY25 Budget programmed
    theater airlift fleet of 271 C-130 aircraft is assessed at elevated
    risk to meet the competing theater airlift demands.
        I have similar concerns with regards to intra-theater fuel
    distribution. Reliance on non-U.S. carriers raises questions of assured
    access and continues to be an elevated risk. Expansion of bilateral
    agreements offers promise but carries its own challenges and requires
    continued engagement.
        In summary, multiple simultaneous mission requirements and emerging
    warfighting concepts severely stress theater lift acutely in the Indo-
    Pacific. To alleviate stress on the theater and strategic airlift
    fleets, we must fully resource not only our airlift fleets, but also
    our theater sealift capacity to support maneuver concept requirements,
    especially in the Indo-Pacific. Additionally, the Indo-Pacific theater
    geography and limited U.S. Flag presence emphasizes the need for
    assured access to Allied and partner nation intra-theater fuel
    distribution platforms. USTRANSCOM supports establishing formal allied
    agreements with partner nations and expanding the Tanker Security
    Program to place U.S. Flag intra-theater fuel tankers into economically
    sustainable Indo-Pacific operations.
        Mr. Gimenez. Your written statement talks about our nation's
    strategic network of allies and partners that provides capacity,
    logistical capabilities, intelligence, and Access, Basing and
    Overflight. Can you give us some examples of those capabilities? Do we
    have allies that are as capable as USTRANSCOM for logistics? How do you
    ensure we have those necessary agreements? What happens to your mission
    if we lose those agreements?
        General Van Ovost. Much of the logistics support provided by allies
    and partners is through international agreements. For instance, within
    their respective Areas of Responsibility (AORs), the Geographic
    Combatant Commands (GCC) have a total of 129 Acquisition and Cross
    Servicing Agreements (ACSA) with countries around the globe providing
    varying levels of logistics support.
        Furthermore, our global reach capability would severely be hampered
    without the network of basing agreements with countries such as
    Germany, Italy, Spain, Turkiye, United Kingdom, Qatar, Kuwait,
    Australia, and Japan, to name a few. Additionally, as our country's
    largest consumer of petroleum products, the ability to access fuel
    stocks globally, either by ACSA or via a Defense Logistics Agency
    contracts, is crucial to enabling our logistics mission. USTRANSCOM
    also participates in shared lift consortiums (e.g. the Movement Control
    Center Europe) where Ally and partner capacity supports regional
    mission requirements in exchange for replacement-in-kind capacity or by
    the exchange of services of equal value. Lastly, USTRANSCOM has started
    exploring additional opportunities to gain access to foreign-flagged
    tankers via contract to augment our tanker vessel fleet.
        No other nations have the capabilities to match the strategic
    capacity or capability of USTRANSCOM. On a regional level, however, the
    alliance of nations under NATO presents a robust logistics capability.
    The NATO alliance is now taking a greater interest in the logistics
    capacity and capabilities throughout the continent. Furthermore, we
    have Allies and partners that are experts in their trade routes, local
    economies, and climates, which can be leveraged to enhance global
    operations. For example, our Scandinavian partners are more practiced
    and better prepared for Arctic operations, which we leverage during
    joint training exercises.
        Maintaining regular Ally and partner engagements and participating
    in bilateral exercises can strengthen the relationships that help
    maintain agreements. Assured access to and through foreign nations are
    incorporated into agreements, ranging from an exchange of Diplomatic
    Notes to a comprehensive Mutual Defense Treaty or Defense Cooperation
    Agreement of indefinite duration.
        The reciprocal exchange of Logistic Support, Supplies, and
    Services, including airlift, sealift, aerial refueling, and related
    services, are addressed in ACSAs with Allies and international
    organizations. USTRANSCOM has the authority to negotiate and conclude
    ACSA Implementing Arrangements with Allies and international
    organizations. For treaties, protection agreements, services
    agreements, basing agreements, access agreements, diplomatic notes, and
    implementing arrangements, USTRANSCOM relies on each GCC in
    coordination with the State Department to initiate negotiations and
    conclude agreements with host nations within their areas of
    responsibility.
        The speed and precision of our logistics deployment and
    distribution capability would be impacted significantly depending on
    the terms and capabilities afforded by these agreements. The loss of
    overflight agreements or limited overflight contingent on the mission
    type could force more circuitous routes, thereby slowing delivery
    times. Timelines for country clearances and permissions would be
    extended without approved agreements in place, impacting our ability to
    mobilize forces and deliver sustainment to the point of need. The
    ability to forward stage or refuel would also be impacted without such
    agreements in place, creating additional stress on already strained
    existing resources. USTRANSCOM seeks redundant and resilient options to
    minimize the impact of dynamic changes to agreement status and the
    operational environment.
        Mr. Gimenez. Your written statement mentions your global mobility
    posture. Do you have everything you need to accomplish your global
    mission? What can the Congress do to help?
        General Van Ovost. Accomplishing our global mission relies on a
    vast network of capabilities, forces, footprint, and agreements. While
    USTRANSCOM aggressively and continuously seeks innovative approaches to
    address our global mobility posture requirements, we currently do not
    have everything we need to accomplish our global mission.
        Our most pressing needs for prosecuting our global mission are
    found in capabilities, primarily focused on the age and number of
    aircraft and sealift vessels required. Some mitigating actions involve
    working within the DoD. For example, the FY24 NDAA maintained
    authorities that limit used purchases to no more than total nine
    foreign-built vessels.
        The Buy Used program is projected to reach that limit with the
    purchase of the FY25 vessels. Not purchasing additional used vessels
    beyond FY25 will impact our ability to address identified gaps in
    global capacity.
        The FY25 budget request makes the necessary investments to
    implement and execute the 2022 National Defense Strategy (NDS). The
    FY25 President's budget request allows us to continue to implement the
    NDS and build the right mix of capabilities to defend against current
    and future threats. The budget request also supports investments in
    areas to ensure the DoD maintains key strategic advantages.
        The passage of authorities and appropriations provides the single
    greatest assistance Congress can provide. Additionally, on time passage
    of annual appropriations is critical to the USTRANSCOM's Transportation
    Working Capital Fund (TWCF) efficacy, which provides the agility
    necessary to respond rapidly to complex and unplanned operations.
    Enduring Continuing Resolutions (CRs) impact Military Department
    budgets and their timely purchase of capabilities that enable
    USTRANSCOM missions and future readiness for the Joint Force.
        An essential part of maintaining TWCF solvency is timely
    reimbursement from contingency operations. A CR has great potential to
    increase cash balance volatility that impacts the TWCF. CRs also impact
    our Research, Development, Test, and Evaluation programs. Although
    existing projects receive sufficient funding to continue during a CR,
    new starts, which are approximately 25% of the annual innovation
    program, would be delayed.
        USTRANSCOM submitted four legislative proposals as part of the DoD
    FY25 Legislative Proposal submission to the House and Senate Armed
    Services Committees. USTRANSCOM's number one priority would be
    recommended changes to the working capital fund statute, 10 U.S.C.
    2208. Raising the capital asset threshold from $250K to $350K and
    expanding contract authority to include service and supply contracts
    would not only free up contract authority for immediate USTRANSCOM
    priorities but would also increase the flexibility of limited budgetary
    resources to aid audit readiness for the TWCF.
        A second legislative proposals requests amending the statutory
    language of the General Services Administration's (GSA) audit
    authorities for Federal Acquisition Regulation (FAR)-based
    transportation contracts. The current structure is confusing, has
    spawned and will likely continue to spawn litigation, and does not
    require the GSA to consider the USTRANSCOM Contracting Officers'
    authority, input, and expertise. The legislative proposal would provide
    needed clarity for industry on the audit and appellate authority for
    GSA contract payment offset authority and codify consideration of the
    Contracting Officers' input.
        USTRANSCOM also seeks an extension of the authority for charging
    the DoD reimbursement rate for other Federal agencies; foreign military
    sales; state, local, or tribal agencies; or DOD contractors when
    transporting supplies in the Defense Transportation System. This
    authority, which expires on 1 October 2024, benefits those entities and
    USTRANSCOM by allowing USTRANSCOM to fill excess capacity with paying
    cargo at the DoD rate.
        Lastly, USTRANSCOM requests the ability to apply the credit-debit
    system in the European Air Transport and Air-to-Air Refueling and other
    Exchange of Services to liquidate Acquisition and Cross-Servicing
    Agreement debts at the owing country's request. This flexibility aids
    USTRANSCOM's efforts to build better allied and partner relations,
    particularly considering the challenges with the pacing threat in the
    USINDOPACOM area of responsibility, as well as provides a means for
    owing countries to service their debts through other than cash means.
                                     ______

                       QUESTIONS SUBMITTED BY MR. FINSTAD
        Mr. Finstad. Does TRANSCOM have performance data to support the
    notion that service levels are improved when freight or household goods
    movements are handled by employee drivers and crew as opposed to
    independent contractors? If so, can you provide this to the Committee?
        General Van Ovost. No, our performance data does not distinguish
    between employee drivers and crew as opposed to independent
    contractors. USTRANSCOM collects Customer Satisfaction Survey feedback
    and tracks transportation service provider (TSP) performance data
    points to assess current program performance. The current program
    assesses and evaluates TSP performance at the standard carrier alpha
    code level. The current program does not require TSPs to report or
    distinguish the category of workers (employee driver and crew or
    independent contractor) performing the work.
        Mr. Finstad. Independent contractors make up about 70% of the
    moving industry's drivers and a large portion of on-site crews. The IC
    model provides highly seasonal businesses with flexibility, individuals
    with opportunity, and supports high-quality service during peak season.
    As I talk with movers they are concerned with DOD's approach to ICs
    under the GHC Program, especially after a recent presentation where
    TRANSCOM staff outright stated its goal was to eliminate IC moving
    crews. Isn't it beyond TRANSCOM's scope to be disrupting the underlying
    business model of an industry that supports 300,000 military movements
    annually, especially when you haven't provided any data showing the
    employee model results in better service?
        General Van Ovost. USTRANSCOM does not specify the business
    operating model companies must use to participate in the Defense
    Personal Property Program under the Tender of Service or Global
    Household Goods Contract (GHC). Multiple business operating models are
    in use today, and USTRANSCOM expects multiple business operating models
    will continue to be used in GHC. USTRANSCOM is aware that some in
    industry have concluded the only way to attain compliance with the
    Service Contract Act is to turn all independent contractors into
    employees, but that has never been and is not USTRANSCOM's position.
    Those in the moving industry who wish to provide quality moving
    services to our Servicemembers and their families will need to
    determine how to best organize to meet GHC performance requirements.
        Mr. Finstad. The Service Contract Act is an incredibly complex law,
    and many companies working with the government have legal departments
    to help them navigate it. Yet the moving industry isn't full of big
    companies, instead it is made up of small businesses and one-truck
    owner-operator drivers. Given that the SCA has had limited application
    to the moving businesses that TRANSCOM relies on to provide high-
    quality moving experiences to servicemembers and their families, can
    you commit to me that you and your team will fully and completely
    educate your service providers on how they can apply and comply with
    the SCA under the Global Household Goods Contract?
        General Van Ovost. The Service Contract Act (SCA) applies to the
    GHC by Federal law (41 U.S.C. 6701, et seq.) and contains no relevant
    exemption for the GHC. Per the statute, the U.S. Department of Labor
    (DOL) is responsible for interpreting and enforcing the SCA and has
    extensive SCA reference materials available. USTRANSCOM and DOL are
    committed to assisting industry find the additional resources they need
    to comply with SCA requirements. The SCA currently applies to DoD
    moving and storage programs today. TSPs who participate in our Non-
    Temporary Storage program and those who have Direct Procurement Method
    contracts with USTRANSCOM must comply with the SCA and have done so
    successfully. Companies may achieve SCA compliance under GHC in many
    ways, which is why a prescriptive guide does not exist, providing
    business owners the flexibility to adopt individual labor policies for
    their respective companies.
                                     ______

                       QUESTIONS SUBMITTED BY MR. LALOTA
        Mr. LaLota. Rear Admiral Phillips, recognizing the essential role
    of the maritime workforce in ensuring the competitiveness and security
    of our national maritime industry: Could you outline the major
    challenges MARAD faces in recruiting and retaining a skilled maritime
    workforce? Additionally, how does MARAD plan to engage with educational
    and training institutions, possibly including those in regions rich in
    maritime history like Long Island, to address these challenges?
        Admiral Phillips. [No answer was available at the time of
    publication.]

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