Seapower and Expeditionary Forces Subcommittee Chairman Gene Taylor Opening Statement Hearing on the Fiscal Year 2009 Budget Request for Ship Construction
March 14, 2008
"The hearing will come to order.
"This morning the subcommittee meets to receive testimony from representatives of the Department of the Navy, the Congressional Budget Office and the Congressional Research Service on the fiscal year 2009 budget request for ship construction. The subcommittee is pleased to welcome our witnesses:
"Our first panel will consist of: the Honorable Allison Stiller, Deputy Assistant Secretary of the Navy, Ship Programs; and VADM Barry McCullough, Deputy Chief of Naval Operations Resources and Requirements.
"Our second panel will consist of: Mr. Ronald O'Rourke, Specialist in Naval Affairs, Congressional Research Service; and Dr. Eric Labs, Senior Analyst, Congressional Budget Office.
"I would like to personally welcome all four of our witnesses for their testimony.
"The Navy and the Congress have some very difficult decisions to make regarding shipbuilding. It is no secret that the current administration has not been a friend to the Navy. By the time this President leaves office the Navy will have about 60 ships less than when he started. It will be up to the next President and the next Congress to put our nation back on track to building and maintaining a powerful fleet. However, there are some things we can do and we must do this year to set the course for recovery.
"The current shipbuilding plan for the 313 ship fleet is pure fantasy. It is totally unaffordable with the resources the Department of Defense allocates to the Navy for ship construction. This year in the Annual Long Range Report to Congress on Shipbuilding, the Navy essentially admits it does not have the funding to build the ships it requires in the 'far term' which is defined as after 2020. The Navy also increased projections of the 'near term' shipbuilding costs from $13.4 billion dollars per year to $15.8 billion dollars per year (using constant 2007 dollars). These projections were forecast by Dr. Labs from the Congressional Budget Office last year, to the Navy's adamant denial. Today we will have the opportunity for the Navy to explain their revised forecasts and receive an update from Dr. Labs as to his evaluation of the new forecasts.
"I am disappointed with the ever changing shipbuilding plan. We have been told for the past two years that the key to efficiency is stability, I agree. However, there is nothing stable in this shipbuilding plan.
"As I analyze the shipbuilding plan I see four programs that are building ships on time and on budget. Those are the LPD 17 class amphibious assault ships, the Arleigh Burke class destroyers, the Virginia Class submarines, and the T-AKE Dry Cargo Ammunition Ship. And what is the Navy answer to programs which build ships on cost and schedule?
"As a side note, I asked ADM Keating, the Commander of the Pacific Fleet, on Wednesday if he would rather have 2 DDG 1000s or 5 DDG 51s - he told me he wanted the DDG 51s. This proves to me that the Navy in Washington does not always listen to the Navy which actually operates the Fleet.
"Although I put the T-AKE in the list of programs which are healthy, I would like our witnesses to address why the T-AKE that was requested and funded in fiscal year 2008 is not being put on contract. The subcommittee understands that the money that was requested to purchase a ship was instead used to re-negotiate contract terms. I understand the Navy thinks they can do this because the money is in a working capital fund called the National Defense Sealift Fund or NDSF.
"I assure you that it is not the intent of the Congress that money authorized and appropriated for a specific purpose, in this case the procurement of a ship, would be used for any other purpose without further authorization or reprogramming. I expect our Navy witnesses to comment on this today.
"So, instead of being asked to fund programs that are building ships on time and at projected cost, we are asked to fund programs which are not. One such program is the Littoral Combat Ship or LCS. This program will go into the textbooks to train future acquisition officials how not to run a program. The LCS will be at least twice as expensive as advertised, it has taken twice as long to build the lead ships, neither vessel has been underway on its own power, and the Navy cancelled two contract options last year, which were already funded, because of cost overruns.
"Yet this year we are asked to authorize two more ships - why? What has changed between then and now that indicates that this program is in any way ready to build more ships? We have been told the answer to this question is that there is an 'emergent need' for these ships in the fleet. If that is true why did the Navy cancel two of the ships? At some point we must stop throwing money at this program until the Navy can prove that at least one of the ships can get to sea and do its mission.
"We are also asked to continue to fund a class of seven destroyers that are the most expensive surface warships ever built. I understand that the program manager has gone to great lengths to ensure that mistakes that occurred in the LCS program are not repeated in the DDG 1000 program. That is good. However, this ship is on an order of complexity which is orders of magnitude greater than the LCS. A cost overrun of only 10% for the first two ships, which would be excellent for a first in ship class, is still close to $700 million dollars. With all the new technologies that must work for this ship to sail, a cost overrun of 20% or even 30% is not out of the question.
"Another very risky program is the new aircraft carrier. Not that the Navy and Newport News Shipyard don't know how to build aircraft carriers, they do. However, one of the major new technologies, the electro-magnetic launch system, or EMALS, has not even been tested in a shipboard configuration and the ship is already under construction. Just this last week the Navy requested an additional $40 million dollars for continued development of EMALS because, and I quote, 'the contractor underestimated design and production cost.'
"The cynic in me would say the contractor purposefully low-balled the bid to get the contract knowing full well the Navy would be forced to pay whatever the true costs of the system turned out to be. Perhaps we should have built another Nimitz class carrier until the research and design for EMALS was complete.
"I am concerned with the plans for the so called Maritime Prepositioning Force (Future) commonly known as the MPF(F). I am not convinced that the Navy and Marine Corps are in sync with the requirements for this force and I am not sure that the Navy has a reasonable plan to build these ships efficiently. One thing I do know is that breaking production lines and then restarting is expensive. Losing the tradesmen who build these ships because of gaps in the Navy build plan is unacceptable.
"And last, I am very concerned that the Navy is not taking seriously the law that Congress enacted last year concerning the next generation cruiser. The law mandates the cruiser have an integrated nuclear power system, and it will have. Analysis of alternatives notwithstanding, I expect that the Navy will abide by the law. I understand that the planned start date of fiscal year 2011 may have to slip due to radar design, among other issues. But the issue is not the power plant. That plant is designed and ready to be built and installed in a hull form resembling our current surface combatant vessels.
"Again, I thank our witnesses. And for our first panel I realize the two of you are doing everything you can to restore our fleet and I thank you for your service. The decisions allowing our Navy to deteriorate are being made at levels far above you and this subcommittee understands that. I look forward to your testimony and hope that we can reach some common sense solutions for restoring our fleet.
"With that I recognize my friend from Maryland, the Honorable Roscoe Bartlett for any opening remarks he may wish to make."
|
NEWSLETTER
|
| Join the GlobalSecurity.org mailing list |
|
|
|
