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MARCH 4, 1998

Mr. Chairmen, distinguished members of the Subcommittees, thank you for this opportunity to appear before you to discuss the Department of the Navy's FY 1999 modernization programs.

Since the end of the Cold War, it has been primarily the naval services that have been called upon to respond to crisis around the world. The Navy/Marine Corps team helped control events at the outset of the Iraqi invasion of Kuwait, the Marine Corps rescue of Air Force Captain Scott O'Grady from Bosnia, the evacuation of hundreds of Americans and country national non-combatants from the fighting in the former Zaire, Liberia, Sierra Leone, and Albania, the swift response to tensions in the Strait of Taiwan, the on-going confrontation with Iraq over U.N. weapons inspections-these are but some of the more dramatic naval operations that are performed everyday all over the world in support of our national security. Naval forces are not just the favored option, they often are the only option.

The Presidents FY 1999 Budget request increases the amount of investment in support of the recapitalization and modernization that is critical to maintaining our Navy and Marine Corps team as the pre-eminent naval force in the world. Rebounding from the low-water mark of $15.7 billion as recently as 1996, the FY 1999 Department of the Navy budget request exceeds $20 billion for procurement programs. Main thrusts of our budget request are to provide the resources that fully support the elements of the Shape… Respond… Prepare Defense strategy established by the Quadrennial Defense Review (QDR), and acquisition strategies that focus on program stability and life cycle costs.

The Department proposes a substantial change in the procurement profile of the tenth and final NIMITZ Class aircraft carrier, CVN 77. This change was influenced, in no small part, by the concern of the long construction gap between CVN 76 and CVN 77 and the costly effects of this gap on the labor force of the shipbuilder. The Department has moved the full funding of CVN 77 from FY 2002 to FY 2001 to minimize the cost and has provided for advanced construction/advanced procurement of nuclear and non-nuclear components from FY 1998 through FY 2000. Funding for the DDG 51 procurement continues into the second year of the planned four year multiyear procurement. The first follow-on ship of the SAN ANTONIO Class amphibious transport dock ship is also funded in FY 1999. This ship class will serve as the functional replacement for four existing amphibious ship classes.

We also continue to pursue other efficiencies in our acquisition programs. For example, in order to make the most of available resources, we propose to maximize the use of multiyear procurement. In addition to the ARLEIGH BURKE Class destroyer, CH-60, Javelin and the AV-8B Harrier, our budget proposes three new multiyear programs: E-2C, T-45TS, and Medium Tactical Vehicle Replacement (MTVR). These new multiyear contracts will permit accelerated buyout of both aircraft production lines at a combined savings of $450 million compared to the single year costs. Multiyear procurement of the MTVR is expected to save at least 7.4%, or another $86 million. Our use of the Army's H-60 multiyear contract will save $31 million, or 5.5% off the price of our CH-60 procurement. These contracts, combined with those approved in previous years for DDG-51 and AV-8B, will enhance our modernization potential over the Future Years Defense Program (FYDP) by over two billion dollars.

In other acquisition initiatives, we will continue to exploit new relationships with and among our shipbuilding partners with the objective of lowering the cost of all surface and submarine programs. Also, minimizing the life cycle cost of operating new platforms and systems is being given prominent consideration in every acquisition decision.

The F/A-18E/F Super Hornet, the Navy's top air program, continues to set records for flight hours and flights. The team is closing in on the optimal solution for the wing drop problem and from the technical perspective this deficiency is almost behind us. Several aerodynamic solutions have been identified and demonstrated in flight, any one of which will produce acceptable flight characteristics. At this point, we are in the process of optimizing the final configuration with a goal of ensuring that overall weapon system performance, radar signature, range, carrier landing speeds, etc., is preserved. We are confident that the final solution will not require a redesign to the wing's structure and there will be minimal cost or schedule impact to either the Engineering and Manufacturing Development or Low Rate Initial Production (LRIP) programs. Modifications will be incorporated into the production aircraft in sufficient time to support existing schedules, to include operational evaluation.

Our budget also provides the resources necessary to exploit emerging technologies. For example, funding proposed for Navy Communications, Command, Control, Computers, and Intelligence (C4I) programs will facilitate the transformation of traditional warfighting via a new operational concept called "network centric" warfare. The Navy's Information Technology for the 21st Century (IT-21) architecture will provide the common backbone for inter-netting C4I systems. Marine Corps C4I modernization will also reflect an emphasis on communication and electronics initiatives to ensure connectivity and interoperability on the battlefield.

To ensure that our recapitalization program replaces aging systems with technologically superior systems able to defeat emerging threats, we have increased funding for research and development. Our FY 1999 RDT&E budget request is now more than $250 million higher than it was for FY 1999 in the last budget. Within the Science and Technology portion of the account we have budgeted minor increases to our recent program submission, resulting in a conservative profile that keeps pace with inflation across the FYDP yet retains our technological superiority.

The following provides more detailed information on some of our most significant acquisition programs contained in the Presidents FY 1999 Budget request. They reflect the priorities established by Navy and Marine Corps operational requirements and carefully considered acquisition strategies.


The Department of the Navy is making continuous improvement a part of the way it does business. We are creating the tools, and providing the educational opportunities for our people, which are facilitating successful reform of the acquisition system. DON is rigorously pursuing paperless acquisition. Implementation of an automated Standard Procurement System, now underway, is the first step. A program executive office is currently being staffed to continue this important task. Equally important is the move to Simulation Based Acquisition (SBA), a process that is expected to revolutionize the acquisition of major systems. Simulation Based Acquisition enables large distributed work teams to operate in synthetic environments to produce higher quality systems at reduced cost over shorter periods of time. In February 1998 DON opened our Acquisition Center of Excellence to serve as a test bed and development site for SBA.

In a DON March 1997 survey, over 90% of the acquisition workforce responding to a questionnaire agreed there has been improvement in the Navy/Marine Corps acquisition process. These improvements continue to occur across the acquisition system. The Advanced Amphibious Assault Vehicle (AAAV) will be the most capable combat vehicle in the world with significant advances in supportability and readiness for the Fleet. The AAAV program team of Marines, civilians, and industry exemplifies the characteristics and forward thinking of a superbly managed program. Their efforts this past year will result in millions of dollars of savings through reduced acquisition costs, reduced acquisition time, and implementation of state-of-the-art business practices. By totally embracing the ideas of acquisition reform and industry best practices, the team has reduced the AAAV unit cost, resulting in $155 million of cost avoidance. The team also implemented a unique and innovative contracting approach which has avoided Operating and Support Costs by $238.9 million.

The New Attack Submarine Program Office is the first major program to implement the Integrated Product and Process Development method to complex warship system development and design. Central to this concept is partnering with the submarine design and construction industry, which has been the catalyst for the flexibility enabling a dual yard construction teaming agreement. This shipbuilder teaming will permit unprecedented sharing and cross pollination of submarine related best manufacturing processes and practices, with the expectation of dramatic life-cycle cost savings.

The Naval Tactical Command Support System (NTCSS) Program provides standard information resource management tools to afloat and fleet support shore activities. An aggressive hardware technology insertion program will provide cost avoidance of $753.3 million over the life cycle of this program. Utilizing an automated maintenance environment will produce a cost avoidance of $420.5 million achieved over the next eight years. Reduced database maintenance has returned man-hours to the activity and equates to a productivity gain of $744.1 million over the 15-year life-cycle of the program.

The T-45TS Naval Undergraduate Flight Training System has developed the first totally integrated training system. A multi-year procurement plan will save 5.2% of the program airframe budget, $47.4 million. Use of Commercial-Off-The-Shelf products, innovative contracting and concurrent engineering realized initial procurement cost avoidance of $9 million on simulators. Resource reuse of existing assets reduced military construction with project life cycle cost avoidance of $600K and a five month schedule acceleration.

A small team in the Naval Supply Systems Command, the Fitting Out and Supply Support Assistance Center, PRICE FIGHTERS Department, is demonstrating DON's unwavering commitment to excellence. Providing direct engineering-based cost analysis, and technical and negotiation support throughout the acquisition system, this team has documented savings to the Department of Defense of $1.7 billion since 1983. Fifty-seven repair analysis projects in 1997 netted actual savings of more than $21.3 million. Their involvement in FY 1997 E-2C production contracts resulted in reduction in proposed price of $54.6 million.

The bottom line is that our Navy-Marine Corps team, supported by our Acquisition Reform Office, is implementing acquisition reform. DON has embraced the use of teams and integrated product and process development. DON is focusing on total ownership cost, embracing cost as an independent variable, moving to activity based cost and management approaches, and designing platform systems using an open system architecture allowing for follow-on technology insertion. The Department continues building partnering relationships with our industry counterparts to develop, acquire and support technologically superior and affordable systems. DON is committed to meeting the challenges of an affordable Navy and Marine Corps of the future.

The Acquisition Workforce

During the past year, the Department downsized its acquisition workforce by approximately 14,600 people. Since 1989, this workforce has been reduced by over 46 percent. While there may be opportunities to achieve additional savings by reducing personnel overhead, it is important that such reductions be approached with careful deliberation so that our organization structures remain efficient and effective. The Department's acquisition workforce is already stretched and rapidly reducing this community on top of the large cuts already made would hurt readiness, and impede significantly our weapons modernization and acquisition reform efforts.

With resources limited and operational demands for naval forces remaining at Cold War levels, one of our greatest challenges is to continue to provide high quality, cost effective acquisition support to our warfighters, now into the 21st Century. Toward this end, we continue to focus on providing our people with the education and training they need to provide unsurpassed acquisition support to our warfighters. We've made tremendous progress in this area. During the past year, over 9,300 acquisition workforce employees completed mandatory training and more than 2,500 individuals attended college courses using tuition assistance funds specifically earmarked for the acquisition community. As a result, the majority of our acquisition workforce meets or exceeds the education and training certification requirements of their positions. We also continue work started last year to strengthen the Department's Centralized Acquisition Intern Program to ensure that well-qualified professionals are ready to fill upper-level positions as senior executives retire and otherwise leave employment.

In March 1997, over 40,000 members of our Navy-Marine Corp. acquisition team stood down to focus on how to make their programs even better. The Department of the Navy provided over 14,000 training and education products - products that provide resources and tools for just-in-time use throughout the year -- to facilitate implementation of our new way of doing business. Over 2,000 Acquisition Reform Certificates of Excellence were presented to teams and individuals in the acquisition workforce in appreciation of the many improvements underway throughout our acquisition team.

While we are pleased with our current success in growing highly skilled and talented acquisition professionals, we remain concerned with our progress in ensuring the same degree of development in our senior military ranks. We are working hard to identify our best and brightest officers in the acquisition career fields and to ensure sufficient career development and promotion opportunities to fill our needs.


The Navy operates ten active carrier air wings and three active Marine Corps (USMC) airwings. The FY 1999 Aircraft Procurement budget requests $7.5 billion for 71 aircraft and other aviation modernization and upgrade programs. The 71 aircraft procured include 30 F/A-18E/Fs, 7 V-22s, 3 E-2Cs, 15 T-45s, 4 CH-60s and 12 AV-8B Remanufactured aircraft. Additionally, 3 Remanufactured SH-60Rs are being procured with Research and Development funds.

F/A-18E/F Super Hornet

The F/A-18E/F is one of the Navy's highest priority programs and critical to the future of our carrier airwings. The Super Hornet program is on track, within cost, below weight and meeting or exceeding key performance criteria. The F/A-18E/F modernizes the Navy's tactical aviation through the affordable and low risk evolution of the F/A-18C/D. The FY 1999 budget request for the F/A-18E/F includes $2.9 billion for the procurement of 30 aircraft and $216 million for continued RDT&E. The procurement of the first LRIP aircraft will begin the orderly transition of the F-14 and F/A-18A/B/C/D inventory to this improved strike fighter aircraft. Total planned procurement for the F/A-18E/F is 548 aircraft. Compared to earlier model F/A-18s, the Super Hornet will immediately and significantly increase our capability in every mission area. It provides greater range, greater payload flexibility, increased capability to return to the carrier with unexpended ordnance, and a new aerial refueling platform compatibility integral to the carrier airwing. It also incorporates enhanced survivability features, and provides growth potential for future technology. This aircraft will make up the majority of strike fighter assets for decades, and with the JSF aircraft, continue to provide our nation with credible power projection capability from our forward deployed carrier battle groups.

The Super Hornet program continues to set records for flight hours and flights. The team is closing in on the optimal solution for the wing drop problem and from the technical perspective this deficiency is almost behind us. Several aerodynamic solutions have been identified and demonstrated in flight, any one of which will produce acceptable flight characteristics. At this point, we are in the process of optimizing the final configuration with a goal of ensuring that overall weapon system performance, radar signature, range, carrier landing speeds, etc., is preserved. We are confident that the final solution will not require a redesign to the wing's structure and there will be minimal cost or schedule impact to either the Engineering and Manufacturing Development or Low Rate Initial Production (LRIP) programs. Modifications will be incorporated into the production aircraft in sufficient time to support existing schedules, to include operational evaluation. We are in the process of scheduling an independent assessment by pilots from the operational test community to obtain their concurrence that the problem is fully resolved. Although we are confident that we will be able to close this issue within the next few weeks, our intent is to not approve funding for the next lot of 20 LRIP aircraft until the final configuration has been identified and approval by the Secretary of Defense received.

MV-22 Osprey

The MV-22 is the highest priority for Marine Corps aviation and critical to the implementation of our Operational Maneuver from the Sea concept. The V-22 Osprey is designed to replace the Marine Corps CH-46E and CH-53D as well as the Special Operations Command TH-53A, MH-53J, MH-47D, MH-60G, MC-130E,

HC-130 and HC-130E. The FY 1999 budget request includes $665 million for procurement of 7 MV-22 aircraft and $355 million for continued RDT&E. The V-22 test program has experienced some delay due to technical issues and program taxes. Solutions are in work or in place and the program is fully funded in the President's FY 1999 RDT&E Budget request.

The acquisition of this medium lift tiltrotor, vertical/short takeoff and landing (VSTOL) aircraft represents a revolutionary leap in our ability to project forces from over the horizon toward inland objectives. The MV-22 will fly significantly farther and faster with a greater payload than our aging fleet of medium lift CH-46 helicopters. Its ability to carry 24 combat-loaded Marines at a cruising speed of 240 knots is key to the execution of maneuver warfare. This combat multiplier nearly triples the present day battlespace and will give commanders the tactical flexibility to respond, adapt to, and defeat a wide range of threats. The MV-22 will give us the ability to maintain battlefield dominance well into the 21st Century. Initial Operating Capability for MV-22 is 2001.

Joint Strike Fighter (JSF)

The Joint Strike Fighter (JSF) is the Department of Defense's future strike aircraft for the Navy, Marine Corps, Air Force, and several of our allies. The Department of the Navy's FY 1999 budget request for the JSF RDT&E is $463 million. The program emphasizes affordability-- reducing the life-cycle cost of development and production programs. The JSF program merges fully validated and affordable joint operational requirements with demonstrated cost leveraging technologies and flying concept-demonstration aircraft to lower risks and costs prior to entering Engineering and Manufacturing Development of the JSF in FY 2001.

JSF will lay the foundation for an affordable family of strike aircraft which meet or exceed individual Service requirements. Initial delivery of operational JSF aircraft variants is anticipated circa 2008. Maintaining the JSF schedule is vital to the future of Navy/Marine Corps aviation. The current program includes funding for the development of an alternate engine. We expect to continue funding for this important program through FY 2005 as does the Air Force

Multiyear Air Programs

In addition to the AV-8B Remanufacture program and aircraft procured from the Army's CH-60 program, the FY 1999 budget request proposes two additional air programs for multiyear procurements-the E-2C and T-45TS. The combined acquisition cost savings estimated from these four multiyear aviation programs and repricing efforts total $609 million.

AV-8B Remanufacture:
The economical remanufacture of the AV-8B Day Attack Harrier to the AV-8B II+ Night/Radar Attack configuration significantly increases the multi-mission capabilities of the Harrier. The FY 1999 budget request includes $338 million for the purchase of 12 aircraft. Our 1998 procurement contract contains cost provisions which establish the framework for entering a multiyear procurement contract in the near future. Expected savings from AV-8B Remanufacture program repricing and the multiyear procurement total $128 million.

The CH-60 will to be the Navy's fleet utility aircraft designed to support forward deployed fleets through airborne delivery of materials and personnel, and support amphibious operations through search and rescue coverage. The CH-60 program is based on an engineering change to the Army's UH-60L Blackhawk airframe, incorporating SH-60 dynamic components and commercial-off-the-shelf avionics. As such, the Navy is entering a multiservice procurement with the Army by using the Army's multiyear contract to procure initial CH-60s in FY 1999 through FY 2001, to be followed by multiyear contracts for the balance of the CH-60 procurements. The FY 1999 budget request includes $132 million for the purchase of four aircraft. Expected savings through the CH-60 multiyear programs total $31 million, in conjunction with the SH-60 Remanufacture.

The E-2C Hawkeye carrier based surveillance aircraft extends the carrier task force defense perimeters by providing early warning of approaching enemy air and surface units and vectoring interceptors and strike aircraft to the attack. The E-2C also provides area surveillance, intercept, search and rescue coordination, communications relay, and strike/air traffic control. The FY 1999 budget request includes $389 million for three aircraft. Expected savings through the proposed E-2C multiyear program total $204 million.

: The T-45 Training System (TS) is the Navy's strike pilot training system. It is designed to replace both the T-2C and the T-4J. The aircraft is a derivative of the British Aerospace Hawk, with modifications for carrier catapult take-offs and arrested landings. The FY 1999 budget request includes $342 million for 15 aircraft. Expected savings through the proposed T-45TS multiyear program and acceleration total $246 million.

Shipbuilding Programs

The FY1999 budget request for Shipbuilding and Conversion (SCN) includes $5.7 billion for the acquisition of three ARLEIGH BURKE (DDG 51) Class guided missile destroyers, one SAN ANTONIO (LPD 17) amphibious transport dock ship, one New Attack Submarine (NSSN), one oceanographic ship (TAGS), and the last Large Medium Speed Roll-On/Roll-Off vessel. The FY1999 SCN budget request also includes funding for advance procurement and advance construction of components for CVN 77.

Shipbuilding Industrial Base

Relative to last year's budget, the Department's shipbuilding plan improves the nuclear and surface combatant industrial base that includes the shipbuilders and suppliers that provide equipment and engineering services which support Navy shipbuilding programs. The CVN 77 replacement carrier programmed in FY 2001, a year earlier than planned last year, and the innovative teaming strategy approved by Congress last year for the construction of four New Attack Submarines in FY 1998-2003 maintains the submarine and aircraft carrier nuclear industrial base. In a similar manner, the DDG 51 multiyear plan and two additional ships in FY 2002 implements a long-term acquisition strategy that lowers costs, reduces disruptions from hiring and layoff cycles, level-loads employment, and encourages capital investments; thus improving the performance, efficiency, and viability of the complex surface combatant industrial base. These actions are key steps in a continuing effort to ensure the long term viability of the shipbuilding industry to support our future construction programs for the 21st Century.

The downsizing of the Navy and the lack of significant American commercial shipbuilding business has resulted in a reduction in the number of ships under construction in U.S. shipyards from 181 in 1980 to 65 in 1998 - a 64% decrease. During this same period Navy shipbuilding has declined from 108 to 44 ships. If the current trend continues, this figure could drop to the low 20s over the next five years. This decline in shipbuilding demand is of great concern to the Navy and DoD. In response to the Quadrennial Defense Review's projections of Navy new construction, the Department initiated a comprehensive review of the current shipbuilding industrial base. The study is in its final stages, having benefited from up-front shipbuilder involvement. The results of the study are anticipated this spring and will help determine:

  • If the Navy should place future ship construction contracts without regard to possible yard closings.
  • If DoD should take a position with respect to mergers and consolidations within the domestic shipbuilding industry.

While it is recognized that the volume of commercial work is still quite low, new commercial opportunities available to U.S. shipyards are promising. A prime example is the construction of two cruise ships in the United States - a project that has not been undertaken since 1957. The level of complexity of these ships ensure preservation of shipbuilding skills that can be readily translated to Naval warship construction. The Navy continues to support and promote the industry opportunities for Foreign Military Sales and direct commercial sales for Navy contractors.

Finally, the Navy has to continue to promote expansion of the traditional Navy shipbuilders into the commercial marketplace with programs that benefit the industry by promoting commercial shipbuilding, such as a National Defense Features program. This program will not only promote commercial practices, but will provide much needed naval assets in a timely manner.

Aircraft Carrier Programs

The aircraft carrier is the centerpiece of Navy forward presence. As the tip of the Nation's sword, aircraft carriers project American power like no other weapons systems in our arsenal. Using historical data, we can expect a carrier to respond to approximately twenty major crises and possibly three major conflicts, conduct over 500,000 aircraft launches and recoveries, spend approximately 6,000 days at sea, steam a total of three million nautical miles, and house over 100,000 men and women. Maintaining the Quadrennial Defense Review (QDR)-directed force structure of 12 aircraft carriers and upgrading their capabilities to meet future threats while drastically reducing ownership costs is a critical challenge in accomplishing the Navy's overall mission.

Carrier Maintenance and Modernization

The maintenance and upgrade of our nuclear carriers is accomplished through the Incremental Maintenance Plan, of which the Refueling Complex Overhaul (RCOH) is the industrial availability to extend the life our existing fleet well into the 21st century. We are currently planning for execution of the FY 1998-funded RCOH for USS NIMITZ (CVN 68), and our FY 1999 budget request contains $275 million to continue funding of the RCOH Advance Planning/Procurement for USS EISENHOWER (CVN 69). Such investments are vital to recapitalization of these national assets.

CVN 77

Our aircraft carrier acquisition program responds to future challenges and requirements with a two-track strategy. The near-term track of this strategy is CVN 77, the tenth and final ship of the NIMITZ Class and the first carrier of the 21st Century. The FY 1999 budget request includes $38 million in RDT&E funding to support incorporation of critical transition technologies in CVN 77. Technology innovations fielded in CVN 77, which are targeted to achieve a 15% reduction in Operation and Support Costs, will also be backfit as feasible in the other nine ships of the NIMITZ class through the Carrier Improvement Plan, and forward fit to achieve cost savings and risk reduction in the next class, CVX. Responding to Congressional action on the FY 1998 budget request, we have substantially revised the Department's SCN funding profile for CVN 77 in the FY 1999 budget submission. Including the $50 million provided by Congress in the FY 1998 Appropriations Act, we have applied a total of $241 million above the originally planned advance procurement of nuclear components, for advance procurement and advance construction of components in FYs 1998 through 2000. We accelerated the full funding of CVN 77 one year to FY 2001. The resultant profile, which shortens the production gap between CVN 76 and CVN 77, will provide significant industrial base benefits and savings while balancing other shipbuilding priorities.


The second, and long-term, part of our two-track strategy is a new ship class and a new vision: CVX. The Navy's vision for CVX is to develop a new class of aircraft carriers to significantly reduce total ownership cost and incorporate an architecture for change, while maintaining the core capabilities of Naval aviation (high-volume firepower, survivability, sustainability and mobility) for the 21st century and beyond. Achieving this vision will require significant design changes to incorporate advances in technology and to focus the design on affordability drivers since little carrier research and development has been undertaken since the 1960's. The Navy's FY 1999 plan for CVX includes $40 million in RDT&E funding for feasibility and trade studies supporting CVX design and a Milestone I decision. The FY 1999 request for CVX also includes $149.5 million in RDT&E funding for the development of critical technologies. These R&D efforts include: advanced technology catapult, advanced propulsion concepts, enhanced survivability features, integrated information management technologies, automation for reduced manning, and computer aided design tools. It is crucial that these critical technologies are started in FY 1999 to ensure that CVX can reduce the total cost of ownership of aircraft carriers and meet a required Initial Operational Capability date of 2013.

Aircraft Carrier Acquisition Structure

Recognizing the critical importance of our nation's aircraft carriers, we are also in the process of implementing a significant organizational change to provide increased management focus to these programs.

ARLEIGH BURKE (DDG 51) Class Destroyer

The cornerstone of our new construction surface combatant effort remains the DDG 51 Class program. FY 1999 budget request includes $2.68 billion for the procurement of three DDG 51 Class guided missile destroyers. These ships are the second increment of the four year, 12 ship multiyear contract. Savings of $1.4 billion are expected across the multiyear program which has allowed acceleration of two additional DDG 51 Class ships.

The three ARLEIGH BURKE Class destroyers procured in FY 1999 will be Flight IIA ships with all of the new capability resident in Baseline Seven of the Aegis Combat System including the upgraded SPY-1D(V) radar system, Theater Ballistic Missile Defense and Cooperative Engagement Capability, the longer range 5"/62 gun firing Extended Range Guided Munitions, advanced processing, Remote Minehunting System, and a host of other warfighting upgrades and improvements. In addition, these ships will be selectively fitted with applicable technologies tested in the highly successful "Smart Ship" program, allowing for incremental reductions in operations and maintenance costs for DDG 51 Class ships.

DD 21 Class Destroyer
The FY 1999 budget requests includes $84 million to continue RDT&E for development of the Navy's newest destroyer, the DD 21 Land Attack Destroyer. The DD 21 replaces the highly successful DD 963 and FFG 7 classes of destroyer and frigate in today's inventory. The DD 21 will be a true fleet destroyer, capable of handling any mission that a Fleet commander might ask, from key wartime missions in land attack and undersea warfare to the more mundane, but equally important presence missions, noncombatant evacuations, escort, and diplomatic missions that have been closely associated with Navy destroyers for almost a century.
As with previous destroyer designs, DD 21 will be focused on the key mission areas facing the nation and the Navy during its design phase. Today, the Navy needs a destroyer that is capable of exceptional performance in the littoral regions of the world and one that can provide significant support to forces ashore. As a result, DD 21 must excel in mission areas that include land attack and maritime dominance. Given the large inventory of upgraded CG 47 and new DDG 51 Class ships that will be in the fleet by the time the first few DD 21 class ships begin to join the fleet after 2008, a robust self defense capability in air defense will be sufficient for this ship.  Cost is a key factor in the design of these ships. Projected shipbuilding budgets, constrained operations and maintenance budgets, coupled with a need to recapitalize our submarine, aircraft carrier, and logistics fleets in the early 21st Century dictate that DD 21 must be an affordable ship to build and operate. This has led the Navy to seek, and find, new approaches to ship design and acquisition and apply them to DD 21. The DD 21 program is fostering increased industry involvement and enhanced opportunities for industry competition through use of innovative acquisition strategies and is currently considering use of Section 845/804 authority for the first portion of the DD 21 development process. The surface combatant acquisition community has been completely reorganized to allow for this. Competitive industry involvement is critical to the success of this program, and the Navy is working closely with the Office of the Secretary of Defense to foster a competitive environment. Finally, the Navy has fully incorporated the Maritime Fire Support Demonstrator lessons learned into the DD 21 program. This included transferring all of the Maritime Fire Support Demonstrator contract deliverables and the bulk of the people working on Arsenal Ship to the DD 21 Program Office. A full analysis of all three Maritime Fire Support Demonstrator proposals has been completed, and the good aspects of the program, of which there were many, are being fully incorporated in the DD 21 and CVX programs.

TICONDEROGA (CG 47) Cruiser Conversion Plan
The Navy has funded a plan to enhance and extend the capability of 12 of the 27 existing CG 47 class ships over the FY1999-2003 FYDP, with the initial unit funded in FY 2001. The FY 1999 budget request includes $20.0 million in RDT&E for a mid-life upgrade of these ships to enhance their combat systems capability for the new Theater Ballistic Missile Defense mission area. Other enhanced combat capabilities envisioned for these highly capable ships include a new Area Air Defense Commander suite and upgraded land attack capability. In addition, these ships should continue to be upgraded with the "Smart Ship" technologies successfully demonstrated on USS YORKTOWN (CG 48) in 1996 and 1997. Finally, by extending the useful service life of the weapons systems of these highly capable combatants, we will be able to delay the introduction of CG 21, the follow on ship to DD 21, and second member of the SC 21 "family of ships". This will allow the Navy to build additional lower-cost DD 21.

SAN ANTONIO (LPD 17) Amphibious Transport Dock Ship

The FY 1999 budget request includes $638 million for the second of this 12 ship program. This amount, in conjunction with the $96 million of advance procurement provided by Congress in FY 1998, fully funds this ship.

The SAN ANTONIO Class amphibious transport dock ships represent the Navy and Marine Corps' future in amphibious warfare, and is one of the cornerstones in the Department's strategic plan known as "Forward...from the Sea". The 12 ships of the SAN ANTONIO Class will replace 27 amphibious ships from the classes now in service. This plan will not only modernize our amphibious forces, but will also result in significant manpower and life-cycle cost savings by reducing the total fleet manning required for the older amphibious ships that are replaced.


The USS SEAWOLF (SSN 21) was commissioned in July 1997, the first of a three ship class. Evaluation of SEAWOLF's performance has shown that this submarine is the fastest, stealthiest and most technologically advanced submarine in the world. The SEAWOLF Class is a multi-mission submarine that can operate autonomously against the world's most capable submarine and surface threats.

SEAWOLF (SSN 21) is in the process of conducting Post Delivery Shakedown Period. Pre-Commissioning Unit CONNECTICUT (SSN 22) is 87% completed and is scheduled to be delivered December 1998. SSN 23 is 34% completed and is scheduled to be delivered in December 2001. The program continues to be managed within the Congressionally mandated cost cap. However, the value of the cost cap has run its course. The conditions leading to high levels of cost uncertainty have been overcome and costs are being contained. Continued reviews and interpretation of costs that should or should not be included in the cap divert Navy management attention to managing the program. The need for a cost cap limitation must be revisited.

New Attack Submarine

The FY 1999 budget request includes $1.5billion for the construction of the second of four New Attack Submarines plus $0.5B for advance procurement for the third ship, that are part of the unique single contract and construction teaming plan approved by Congress last year. The plan is expected to achieve cost reductions for the first four submarines versus a similar "allocate and then compete" plan. In addition, it will keep the nations submarine industrial base viable well into the next century.

The New Attack Submarine will improve on every aspect of mission performance versus the SSN 688 Improved LOS ANGELES Class submarine. It will also equal or better operational performance of SEAWOLF including stealth, special warfare, littoral warfare, surveillance, and mission flexibility -but for approximately 30 percent less cost. In addition it will incorporate flexibility for future technology insertion.

The United States maintains a capabilities based, multi-mission submarine force that is sized to satisfy peacetime requirements and is not sized to counter any single country's threat. New Attack Submarine production is essential to maintaining a highly effective multi-mission SSN force level of 50 high performance submarines to meet future operational requirements. The New Attack Submarine program is the only new class of submarine in the Navy FYDP.

Submarine Technology

The FY 1999 budget request includes $64 million in RDT&E funding for Advanced Submarine Technology Development Program. Seventeen design enhancements beyond the core design, in comparison to five a year ago, have been approved thus far for final development or insertion in the New Attack Submarine. Both submarine shipbuilders are playing important roles by assisting the Department's efforts to identify additional technologies for insertion opportunities and by identifying design changes that bring a life cycle or construction cost avoidance benefit.

The Advanced Submarine Technology Development will enhance the capability of the Large Scale Demonstrator System to conduct hydrodynamic/hydroacoustic/flow management/maneuvering tests, as well as development of an advanced propulsion system and sensor & processing technologies being considered for insertion in the New Attack Submarine.

Maritime Prepositioning Force (Enhancement)

The FY 1997 budget requested funds for the third and final conversion for the Maritime Prepositioning Force (MPF). Solicitation for this conversion ship was issued in the spring of 1997 with the contract award expected during the third quarter of FY 1998.

The MPF supports the rapid deployment of Marine forces by providing mobile, long-term, storage of equipment and supplies forward deployed near areas of potential conflict. In crisis scenarios, these ships will respond immediately and provide the requisite forces with sufficient and critical sustainability to conduct a host of crisis response missions around the globe.

Strategic Sealift

The FY 1999 budget request includes $251.4 million for the construction of the final (19th) Large Medium Speed Roll-On/Roll-Off (LMSR) vessel. This fully funds the last ship along with the $35.0 million appropriated for Advance Procurement in FY1998. This year the $251.4 million is funded in the Ship Conversion, Navy account vice the National Defense Sealift Fund.

Oceanographic Survey Ship (T-AGS 65)

The FY 1999 budget request includes $60M for the construction of the T-AGS 65. The FY 1998 Defense Appropriations Act included $16M for advance procurement for the mission electronics and other long lead items in support of the ship. The acquisition and full funding of T-AGS 65 will complete the re-capitalization of the oceanographic survey fleet and maintain it at eight ships. Procurement of this eighth ship will significantly improve the Navy's oceanographic data collection capability to meet existing and emerging Navy, DoD, JCS and other agencies operational requirements.


The FY 1999 budget request maintains support for the Operational Maneuver From the Sea concept through continued modernization and recapitalization of Marine Corps combat forces. The FY 1999 Marine Corps Procurement and Ammunition budget request is $892.5 million, a 49% increase over the FY 1998 funding level. The Marine Corps highest priority programs in these accounts are the Advanced Amphibious Assault Vehicle (AAAV), the Lightweight 155mm Howitzer (LW155), and the Medium Tactical Vehicle Replacement (MTVR). The AAAV, funded under the Research and Development budget and currently in the Program Definition and Risk Reduction phase, will enter production after the turn of the century. Both the MTVR and LW155 programs are in Engineering and Manufacturing Development.

Funding for the procurement of ammunition is reflected in the Procurement of Ammunition, Navy and Marine Corps appropriation. The FY 1999 budget request continues the effort to reach the Marine Corps goal of satisfying the Combat Requirement through the FYDP while meeting the annual ammunition training requirements.

Advanced Amphibious Assault Vehicle (AAAV)

As the most critical ground combat requirement in the Marine Corps, the AAAV program remains the Marine Corps number one priority ground development program in FY 1999. The AAAV's high water speed and superior land mobility, will dramatically improve both battlespace dominance and forcible entry by Marine Corps forces. For the first time, Marines will be able to directly link the maneuver of ships with the landing force maneuver ashore. This capability will fully complement the MV-22's capabilities and realize the full potential of Operational Maneuver From the Sea. The AAAV will carry 17-18 combat equipped Marines at three times the water speed of the current Amphibious Assault Vehicle, and it will significantly increase survivability. The FY 1999 budget request of $104.8 million reflects the third full year of the Program Definition Risk Reduction phase contract and includes funds to complete procurement of materials and assembly for prototypes and contractor/government testing.

Lightweight 155 Howitzer (LW155)

The LW155 is a top priority Marine Corps ground development program as it will be the Corps' sole artillery weapon for all forces and missions. The LW155 will replace the aging M198 howitzer, which ends service life in FY 2002. The light weight design of the LW155 markedly improves the tactical and strategic mobility of artillery units. The LW155 is a joint Marine Corps/Army program with the Marine Corps as the lead service. An Engineering and Manufacturing Development contract was awarded in 1997 with options for the first two years of production. The FY 1999 budget request of $35.4 million contains both RDT&E and PMC funds. The RDT&E funds will be used to continue developmental and operational testing, and the Procurement Marine Corps funds will procure long lead items for the first year of production. Developmental testing commenced in FY 1997 and a production decision is scheduled for 2nd quarter of FY 2000. Marine Corps IOC is scheduled for 2002.

Medium Tactical Vehicle Replacement (MTVR)

The FY 1999 funding request for the MTVR program will begin the replacement of the Marine Corps aging five-ton truck fleet. The MTVR will provide significant improvement under all terrain and environmental conditions. Mobility will be increased through addition of a six wheel, independent suspension and a central tire inflation system. The MTVR will employ a commercial, electronically controlled engine and transmission as well as heavy duty, state of the art, commercial components which will significantly improve reliability. The FY 1999 budget request of $85.7 million contains both RDT&E and PMC funds. The RDT&E funding will be used to continue operational testing while the PMC funds will be used to commence low rate initial production. Contract award for low rate initial production is scheduled for 1st quarter, FY 1999.

Other Expeditionary Forces Programs

The FY 1999 budget request emphasizes modernization and recapitilization in Marine Corps investment accounts. The Marine Corps will initiate the Light Tactical Vehicle Replacement (LTVR) program as a replacement for the Corps aging HMMWV fleet. FY 1998 funds are expected to be used to procure an upgraded version of the Corps current HMMWV. This program, in concert with the MTVR, will modernize the Corps' light and medium transportation fleet of vehicles. In addition, the Marine Corps will invest in a reliability and maintainability rebuild to standard of a portion of its Assault Amphibious Vehicle fleet to extend its life until introduction of the AAAV. The Marine Corps also maintains its commitment to its two anti-armor programs, Javelin and Predator, and it continues to emphasize procurement and use of night vision enhancement devices.

The Marine Corps has continued to emphasize interoperability and connectivity in its communications programs. In addition to the existing suite of communications equipment, the Marine Corps will start the acquisition of two new programs in concert with the Army during FY 1999. The EHF Tactical Satellite Terminal (SMART-T) and SHF Tri-band Tactical Satellite Terminal (STAR-T) will leverage state of the art technology at affordable rates and will ensure the timely and uninterrupted flow of intelligence to battlefield commanders. In addition, progress in modernization of base telecommunications infrastructure continues on schedule along with procurement of Tactical Data Network and Digital Technical Control.

Marine Corps Warfighting Laboratory (MCWL)

The MCWL is the integrating ground for new technologies, a focal point for warfighting refinements, and the critical engine to take the Marine Corps into the next century. The MCWL develops and field-tests future operational and technological concepts through use of a carefully developed, five year experimentation plan.

The completed first phase, Hunter Warrior, focused on mid-intensity level advanced operational concepts and technologies on an extended and dispersed battlefield, in both open and mountainous terrain. The second phase, Urban Warrior, is currently under way and will be completed in FY 1999. This phase focuses on development of new tactics, techniques, and supporting technologies for operations in urban areas, close terrain, and near urban littoral areas. The final phase, Capable Warrior, will use the lessons learned from the first two phases to integrate the full capability of a Marine Air-Ground Task Force with naval units operating at the numbered fleet level of joint task force.


The Navy's mine and undersea warfare capabilities continue to receive great attention from the Chief of Naval Operations, the Commandant of the Marine Corps, the Secretary of the Navy, and the Secretary of Defense. Of particular importance is the Department's Mine Warfare Plan, required by law, updated annually and verified by the Chairman of the Joint Chiefs of Staff for full funding. Details for specific Mine and Undersea Warfare programs follow.

Mine Warfare Plan

The Department continues to modernize its Mine Countermeasures Forces. The FY 1999 budget request fully funds the Navy's Mine Warfare Plan. Programs in the FY 1999 budget request that support the Mine Warfare Plan include:

Integrated Combat Weapon System (ICWS):
The ICWS is a series of major incremental block upgrades to the current combat system of the OSPREY Class (MHC-51) coastal mine hunter ship. The major focus of this program is to reduce total cost of ownership while improving reliability and maintainability. This will be accomplished by transitioning the combat system to an open system architecture with common operator console operating on a Local Area Network. The final two MHC-51 Class mine hunter ships are scheduled for delivery in 1998. These are world-class ships dedicated to MCM operations and are well along the way to integration into the mainstream of Naval operations.

Organic Mine Hunting Capabilities
: While there will always be a requirement for dedicated MCM forces, the Navy is developing organic mine hunting capabilities including the Remote Minehunting System (RMS) program for surface ships, and the Near Term Mine Reconnaissance System (NMRS) and the Long Term Mine Reconnaissance System (LMRS) for submarines utilizing Unmanned Underwater Vehicle technology. Successful RMS prototype propulsion testing was completed in September 1997 and the RMS (V)3 Engineering Development Model will undergo system integration and testing this year. The NMRS will be ready for acceptance testing this summer and the LMRS will complete its Detailed Design phase in FY 1999.

Additional organic MCM efforts such as the Shallow Water Assault Breaching System (SABRE) and the Distributed Explosive Technology (DET) programs are being pursued to neutralize shallow water and surf zone mines. SABRE and DET in combination with the Explosive Neutralization Program will evolve into an Assault Breaching System with a capability of neutralizing known mine threats which would otherwise hinder our forces in the surf zone during an amphibious assault.

Airborne Laser Mine Detection System (ALMDS)
: Scheduled for program start in FY 1999, ALMDS completed the Congressionally mandated flyoff in December 1997. The results of the three systems evaluated by this evolution, Magic Lantern (Deployment Contingency), ATD-111 and the Advanced Airborne Hyperspectral Imaging System, are being analyzed and will be used to develop system specifications for the this program. A report to Congress, based on the analysis of the fly-off results, will be forwarded this summer.

Rapid Airborne Mine Clearance System (RAMICS)
: This helicopter borne system uses a super cavitating 20mm projectile to destroy near surface mines. The supercavitating projectile is specially designed to travel in water and drive a chemical initiator into the mine explosive. Laser detection and ranging is used to locate and target the mine providing aiming coordinates to the fire control system. RAMICS is an FY 1998 Advance Technology Demonstration program and should transition to an acquisition program in FY 2001.

Airborne Mine Neutralization System (AMNSYS)
: This system will explosively neutralize unburied bottom and moored sea mines that are impracticable or unsafe to counter using existing mine sweeping techniques. A successful technology demonstration was conducted first quarter FY 1998. Based on a successful Operational Test and Evaluation, production is planned for FY 2000.

Supporting the Operational Maneuvers from the Sea doctrine, the Airborne Mine Countermeasure community will have the ability to satisfy the need for near real time helicopter positional data, dissemination and promulgation of mine-like contacts, and tactics/equipment performance reporting with a C4I data link between the airborne helicopters and the mine warfare support ship or shore site. The C4I program includes procuring the necessary installation packages to outfit MH-53E helicopters, the USS INCHON (MCS-12), and upgraded Mobile Operating Centers.

Anti-Submarine Warfare (ASW) Programs

The Department continues to develop ASW systems to improve our ability to conduct ASW in the littoral/shallow water regions. The recently completed, Congressionally directed ASW Assessment confirmed that maintaining funding for our ASW programs in this budget will result in protecting our world leadership in this area. It further emphasized that the fielding of systems in this budget will result in an improved ASW capability at the end of the budget cycle.

The Airborne Low Frequency Sonar (ALFS) system is an improved "dipping sonar" that will significantly enhance our ability to conduct active prosecution of subsurface targets, including those in the shallow water environment. ALFS is in the final stages of development and will be incorporated in the SH-60R Light Airborne Multi-Purpose System (LAMPS) helicopter. The SH-60R LAMPS remanufacture program will also include upgraded acoustic processing to dramatically improve the ASW capability of the LAMPS aircraft.

The AN/SQQ-89(V)14 Surface Ship ASW Combat System will integrate COTS into surface ASW combat systems and generates significant cost savings over previous Military Standard Systems. The AN/SQQ-89 is the ASW Combat System for all surface combatants and will be the technological foundation for the ASW combat system of the DD-21.

The New Attack Submarine C3I system, through its extensive use of COTS and open system architecture, is a pace setter on achieving breakthroughs in system affordability and flexibility. This innovative approach will achieve new performance standards while minimizing risk, and promoting new levels of extended contractor responsibility and participation in the maintenance and upgrade of the system over its life-cycle.

The Advance Deployable System (ADS) is being developed to provide the ability to rapidly and covertly deploy an underwater surveillance system designed for use in shallow littoral environments. This surveillance information will be available to the tactical commanders for use in monitoring naval activity in any region of interest. ADS is currently in the Demonstration and Validation phase with Milestone II scheduled for FY 1999.

In addition to providing improvements to our detection and surveillance systems, Navy continues to upgrade our undersea weapons capabilities for improved shallow water performance. The MK-46 Service Life Extension Program and MK-50 Block I program improve the performance of our existing light weight torpedo inventory. The Lightweight Hybrid Torpedo, MK-54, to be introduced in FY 2003, will further improve the lightweight torpedo inventory performance in shallow water. This program will utilize available components of the MK-46 and MK-50 in addition to extensive use of COTS electronic components. The MK-48 ADCAP MODS heavy weight torpedo program is also updating existing submarine launched torpedoes with propulsion and homing systems improvements for the very difficult shallow water ASW environment.


Network Centric Warfare (NCW)

Reliance on NCW is at the heart of current C4I efforts in the Department of the Navy. NCW is based on the ability of a widely distributed, self-synchronizing warfighting force to mass effects when and where desired. To make NCW a reality, the force must be able to share timely, accurate, common information. This requires fast and powerful networks; high quality, widely distributed and netted sensors; a streamlined command structure; and warfighting platforms capable of autonomous operation and unity of effort.

Network Centric Warfare increases the speed, precision, and effectiveness of Naval forces. NCW enables the Navy to attain information superiority, mass effects instead of forces, and disrupt the enemy's ability to carry out its strategy. Achieving this new warfighting concept requires that we take full advantage of the information technology revolution, as we are now doing.

Information Technology for the 21st Century (IT-21)

Information Technology for the 21st Century (IT-21) is the Department of the Navy strategy to optimize IT acquisition through extensive coordination of all information technology infra-structure expenditures within the Department. This IT infrastructure is essential to realizing Department's shift to Network Centric Warfare and enabling the Navy and Marine Corps to implement the Joint Staff's guidance (detailed in Joint Vision 2010) on how U.S. military forces will fight in the next century.

IT-21 embodies affordable, highly capable personal computers for warfighting, characterized by seamless ashore/afloat transfer of voice, video, and data information; extensive use of web technology to manage data; widespread use of industry standards, open architectures and COTS; and the fusion of tactical and non-tactical data on a common IT infrastructure. IT-21 provides an integrated operational capability with satellite communication upgrades, robust local and wide-area networks, infrastructure modernization, and tactical and warfare support C4I enhancements, within an information-protected environment.

Cooperative Engagement Capability (CEC)

A central element of Network Centric Warfare is the Cooperative Engagement Capability. CEC provides a revolutionary improvement in battle group air and missile defense capability with both Congressional and Department of Defense mandates for an aggressive development and delivery schedule to accelerate the capability to the Fleet.

Real time netting of battle group air defense sensors and weapons is now possible through the CEC. Utilizing highly advanced data transfer and processing techniques, CEC is able to integrate the air defense sensors of both CEC-equipped surface ships and aircraft into a single composite fire-control-quality network. CEC integrates the radar measurements of each platform, distributes the measurement data to all participating units, and gives each unit an identical real time air picture. In addition, CEC allows the early cuing of self-defense sensors and permits engagements of threats with remote CEC data.

CEC also has promising potential for Joint Service applications with systems such as Army Patriot and the Air Force Airborne Warning and Control System (AWACs). Fleet initial operational capability was achieved at the end of FY 1996. An initial Operational Test of the smaller production version (USG-2) was conducted in August 1997 on USS Wasp (LHD-1). Further Operational Test and Evaluation is scheduled in mid-1998 with an additional test to demonstrate a large multinode network composed of ships from two battlegroups planned for mid-1999. These test events will be followed by Full Rate Production and installation in over 200 ships and aircraft.

Theater Ballistic Missile Defense

Perhaps the most dramatic new capability to be deployed with U.S. Naval forces in the next decade will be the Navy's Theater Missile Defense (TBMD) programs. The Navy, in conjunction with the Ballistic Missile Defense Organization, has determined the best architecture for Theater Ballistic Missile Defense is a two tiered approach composed of a Theater Wide system and an Area system. The Department, with strong Congressional support, has added over $1 billion to TBMD related programs and implemented several initiatives to accelerate the TBMD program. Among these initiatives are the Aegis Baseline Consolidation plan, the Cruiser Conversion Program and the establishment of a fully distributed architecture for Navy TBMD.

The Area system builds on the current Aegis SPY-1 radar and the Standard Missile/Block IV, requiring minimal modifications to the vertical launch system. By adding this capability as an additional mission for our Aegis capable ships, we leverage the investment already made in these ships and take advantage of the thousands of successful intercepts completed in the Standard Missile program. The Navy Area TBMD is expected to have an initial deployment capability in 1999 on two Aegis cruisers through a User Operational Evaluation System. This will serve to influence the tactical design as well as provide for contingency use by the Commanders in Chief. The first fully equipped operating capability will occur in 2001.

The Navy Theater Wide system will be of a much longer range which will enable exo-atmospheric intercepts against weapons of mass destruction. The Navy has demonstrated the space-tested technologies and has successfully integrated them with the Standard Missile. The Standard Missile-Lightweight Exo-Atmospheric Projectile (LEAP) program will provide the maximum level of operational flexibility against long range threats. The Navy will follow a two-pronged development approach to the Theater Wide system that is expected to field a Block I system capability to counter the preponderant exo-atmospheric missile threats in 2006, and a more robust Block II system that will be able to counter all exo-atmospheric threats in 2010.

Year 2000 (Y2K) Computer Issues

The safety of our Sailors and Marines and our ability to meet our warfighting responsibilities will not be compromised by a failure of our computer hardware, software, and firmware to support the change of century date.

Working closely with the Department of Defense, under the personal leadership of the Deputy Secretary of Defense, the Department of the Navy Chief Information Officer is leading the Navy attack on the Y2K problem. The Chief of Naval Operations is establishing a program office to mitigate the Y2K risk. The Commandant of the Marine Corps has tasked his Assistant Chief of Staff C4I with oversight and management of the Y2K issue within the Marine Corps. Leading industry consultants are assisting us in managing and expanding our approach. Funding will be found within the programs responsible for individual systems. No additional funding is being requested. Our analysts and programmers are hard at work finding potential concerns, fixing them, and planning for contingencies.

Department of the Navy Chief Information Officer (DON CIO)

The Secretary of the Navy has established the Office of the DON CIO to provide top-level advocacy in the development and use of Information Management and Information Technology (IM/IT) and create a unified IM/IT vision for the Department. The DON CIO is responsible for the development of IM/IT strategies, policies, plans, architecture, standards, guidance, and process re-invention support for the entire Department. Additionally, the DON CIO objectively balances the needs and interests of Department of Navy users to ensure that developed and acquired IT systems are efficient, interoperable, and consistent with the Navy's vision.

Research, Development, Test & Evaluation Programs

The RDT&E budget request funds the development and testing of current programs such as the F/A-18E/F, V-22, Joint Strike Fighter, New Attack Submarine, Ship Self Defense, Cooperative Engagement Capability, as well as the continued emphasis on Science and Technology programs. The FY 1999 RDT&E budget request of $8.1 billion represents an increase of 2.9% over the FY 1998 appropriation. The status of programs under development and testing are discussed under their respective platform areas. The following provides more detailed information on our Science & Technology and Manufacturing Technology (MANTECH) programs.

Science & Technology

The superior technology we enjoy today was built on a foundation of basic research laid years ago. From our basic research program through our manufacturing technology program, naval science and technology is the keystone for supporting our ongoing affordability and fleet modernization process, and is the wellspring from which our technological superiority is maintained. Our FY 1999 integrated Science and Technology budget request of $1.3 billion supports Basic, Applied, and Advanced Technology research and Advanced Concept Technology Demonstrations.

Basic Research

Basic Research programs (6.1) provide the knowledge base for subsequent advances in defense-related technologies in such areas as ocean science, advanced materials and information sciences. The FY 1999 budget request of $362 million for Basic Research programs reflects an increase of $24 million from the FY 1998 appropriation and puts the Department on a path toward a goal of achieving and sustaining $400 million in basic research by the end of the FYDP.

Applied Research and Advanced Technology Development

Applied Research programs (6.2) provide the necessary link between scientific understanding and proof-of-principle experiments that establish whether promising technologies can satisfy unique Navy and Marine Corps requirements. Advance Technology Development programs (6.3) demonstrate specific technologies for naval systems. It is here technologies with the most promise are demonstrated to determine their potential to contribute to future naval capabilities.

During the last year many results from our research and development investments have had global implications: a Nobel Prize winner in Chemistry; the discovery of the atom laser; and a new anti-rejection immune technologies for transplant recipients. The anti-rejection immune technologies holds great promise in combating infectious agents and is currently undergoing testing in individuals infected with the HIV virus. The immune technologies will also be tested as a cancer treatment and for the many infectious agents not yet preventable using a vaccine. Ultimately, the value of this research to the military will be the prevention or treatment of infectious illnesses and to save the lives of combat casualties with severe burns, organ failure, and/or bone marrow failure.

Advanced Concept Technology Demonstrations

The goal of our Advanced Concept Technology Demonstration (ACTD) program is to conduct essential technical demonstrations of mature technologies and provide acquisition options for those technologies. An example of an ongoing ACTD to be conducted in FY 1998 is the second Joint Countermine Demonstration as a large scale, real-time operation that will clearly assess the military utility of new Joint Countermine technologies. Eleven novel countermine systems will exercise the full range of countermine operations from deep water to shallow water and from over the beach to the land battle space behind the littoral zone. With a free-playing Opposing Forces, Demonstration II will build on the user feedback and lessons learned from Demonstration I. In addition, some of the novel systems will be available as residuals to support subsequent force training, contingency operations, military utility assessment, and continued concept of operations/tactics development.

The FY 1999 budget request includes funds for core programs that support eight ACTD's that are particularly important to the Navy and Marine Corps mission. Two examples of those demonstrations include:

Extending the Littoral Battlespace (ELB)
: The ELB ACTD will demonstrate enhanced capabilities for Joint Expeditionary Warfare that leverage command, control communications, computational, sensing and fire direction technologies for operations in the littoral battlespace. The first major demonstration will be conducted during exercise Kernel Blitz'99 using operating forces from the 1st Marine Expeditionary Forces, 3rd Fleet and other commands to evaluate the ELB concept and technology.

Link 16/Variable Message Format (VMF) Interface
: The Link 16/VMF ACTD will demonstrate a new interface for exchange of tactical information between two existing systems to provide a seamless sensor picture to shooters. A successful demonstration will significantly improve joint warfighters effectiveness and provide improved over-the-horizon sensor-to-shooter cuing.

Manufacturing Technology (MANTECH)

The MANTECH program is an important element of our acquisition strategy to improve productivity of the industrial base and make our weapon systems and platforms more affordable. The principal goal is to reduce acquisition costs by developing and utilizing manufacturing technology, cost-containment technology, and life-cycle support (repair) technology. The Department has substantially increased its commitment to MANTECH programs in the FY 1999 budget request of $59 million. This reflects an increase of 10% from the FY 1998 appropriation. A 1997 validation study of nearly one-third of Navy MANTECH programs show a substantial return on our investments. Three examples illustrate the considerable contribution MANTECH programs can offer to the affordability of our systems.

Centrifugally Cast Titanium Carbide/Bronze Components project
: Also known as spin casting, this project built upon very strong applied research work to develop friction drums for the Standard Navy Hauling (refueling) Winch. The operating cost of these winches has been reduced from $235 per hour to $18 per hour, with the development and installation costs being recouped in the first year of operation of these new friction drums. This MANTECH project received the Department of Defense Logistics Life Cycle Cost Reduction award.

Aegis Electronics Demonstration project
: This MANTECH project supports a high priority Naval Sea Systems Command requirement to reduce the cost of manufacturing advanced High Density Interconnect Transmit/Receive (T/R) modules for radar phase arrays in the DD 21 Class surface combatants. Up to 50,000 T/R modules will be purchased for each of the 32 DD 21 Class ships. An estimated manufacturing savings of $83 per T/R module will yield a potential total cost avoidance of $128 million, or 30%, using the improved manufacturing process. This Navy MANTECH demonstration project enjoys a 2 to 1 cost share advantage with our industry partners and has a projected return on investment of close to 13 to 1.

EA-6B Universal Exciter Upgrade
: This project involved new technology insertion for this critical component in the aircraft's electronic warfare suite. In addition to leveraging a 1 to 1 cost share between the Navy and the manufacturer, an overall cost avoidance of ten percent was achieved with a return on investment for the Navy of 4 to 1.

Overall, our MANTECH program continues to show a wide range of successes such as these. The returns are truly starting to show a definitive payoff.


In summary, Mr. Chairman, the Navy and Marine Corps community is working hard everyday to make acquisition success a routine occurrence. Our guiding principles are to communicate fully and openly with the Congress, industry, our warfighters, and our acquisition professionals, to do everything it takes to make sure our Sailors and Marines are provided with the best equipment for the lowest investment possible. Our highest priorities are to bring stability to our acquisition programs-this alone will save billions of dollars; strengthen our industrial base; and ensure that our children and grandchildren who serve in the Navy and Marine Corps of the future, defending America, have what they need to prevail. We believe that the Department of the Navy's budget request for FY 1999 supports the requirements to maintain our status as the world's greatest naval power, forward deployed and combat ready. We appreciate the support provided by the Congress and look forward to working together with this Committee toward a secure future for our nation.

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