[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 111-61]
HEARING
ON
NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 2010
AND
OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS
BEFORE THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE HEARING
ON
BUDGET REQUEST FOR DEPARTMENT
OF THE NAVY SHIPBUILDING
ACQUISITION PROGRAMS
__________
HEARING HELD
MAY 15, 2009
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SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
GENE TAYLOR, Mississippi, Chairman
SOLOMON P. ORTIZ, Texas W. TODD AKIN, Missouri
JAMES R. LANGEVIN, Rhode Island ROB WITTMAN, Virginia
RICK LARSEN, Washington ROSCOE G. BARTLETT, Maryland
BRAD ELLSWORTH, Indiana J. RANDY FORBES, Virginia
JOE COURTNEY, Connecticut DUNCAN HUNTER, California
JOE SESTAK, Pennsylvania MIKE COFFMAN, Colorado
GLENN NYE, Virginia THOMAS J. ROONEY, Florida
CHELLIE PINGREE, Maine
ERIC J.J. MASSA, New York
Will Ebbs, Professional Staff Member
Jenness Simler, Professional Staff Member
Elizabeth Drummond, Staff Assistant
C O N T E N T S
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CHRONOLOGICAL LIST OF HEARINGS
2009
Page
Hearing:
Friday, May 15, 2009, Fiscal Year 2010 National Defense
Authorization Act--Budget Request for Department of the Navy
Shipbuilding Acquisition Programs.............................. 1
Appendix:
Friday, May 15, 2009............................................. 33
----------
FRIDAY, MAY 15, 2009
FISCAL YEAR 2010 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST FOR
DEPARTMENT OF THE NAVY SHIPBUILDING ACQUISITION PROGRAMS
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Akin, Hon. W. Todd, a Representative from Missouri, Ranking
Member, Seapower and Expeditionary Forces Subcommittee......... 3
Taylor, Hon. Gene, a Representative from Mississippi, Chairman,
Seapower and Expeditionary Forces Subcommittee................. 1
WITNESSES
McCullough, Vice Adm. Barry J., USN, Deputy Chief of Naval
Operations for Integration of Capabilities and Resources, U.S.
Navy........................................................... 7
Stackley, Hon. Sean J., Assistant Secretary of the Navy
(Research, Development and Acquisition), U.S. Navy............. 5
APPENDIX
Prepared Statements:
Akin, Hon. W. Todd........................................... 39
Stackley, Hon. Sean J., joint with Vice Adm. Barry J.
McCullough................................................. 41
Taylor, Hon. Gene............................................ 37
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:
[There were no Questions submitted post hearing.]
FISCAL YEAR 2010 NATIONAL DEFENSE AUTHORIZATION ACT--BUDGET REQUEST FOR
DEPARTMENT OF THE NAVY SHIPBUILDING ACQUISITION PROGRAMS
----------
House of Representatives,
Committee on Armed Services,
Seapower and Expeditionary Forces Subcommittee,
Washington, DC, Friday, May 15, 2009.
The subcommittee met, pursuant to call, at 10:02 a.m., in
room 2212, Rayburn House Office Building, Hon. Gene Taylor
(chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM
MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES
SUBCOMMITTEE
Mr. Taylor. The subcommittee will come to order. Good
morning and welcome.
Today, we need concession to receive testimony on the
fiscal year 2010 budget request for shipbuilding programs.
Appearing before us today are the chief acquisition officer of
the Navy, the Honorable Sean Stackley; the chief requirements
officer of the Navy, Vice Admiral Barry McCullough.
Admiral, you are well-known to this committee. Welcome
back.
Secretary Stackley, while many know you and have worked
with you in the past, we believe this is the first time that
you will testify before this committee, and welcome.
The good news is that we are not going to be interrupted by
votes because the House stands in recess. It is my hope that
this will allow us to have a frank and detailed discussion on
where we are and where we need to go with our shipbuilding
programs.
I thank the members in attendance for staying in town to
participate in this very important hearing.
In previous years at this hearing, I have commented that
the budget request and the accompanying 30-year shipbuilding
plans were unachievable. In fact, I have stated that the long-
range plan was pure fantasy.
It nows appears that the Navy has learned how to deflect
criticism of the shipbuilding plan. They don't submit one.
Although required by title 10 of the United States Code, all
plans for future years' ship procurement are being withheld
from the Congress. This obviously makes it very difficult for
the Members of Congress to fulfill the Article I obligations to
provide and maintain a Navy.
I realize the two witnesses sitting before this committee
today did not make that decision, and I will not continue to
dwell on the subject. But I state for the public record that
the failure of the Department to describe the future
shipbuilding plan will not prevent this subcommittee from doing
due diligence required in recommending to the full committee
and to the full House a shipbuilding plan which will restore
the Navy to an acceptable number of ships which will preserve
domestic industrial capacity of the construction of warships.
I will say that again. If the Navy chooses not to submit a
shipbuilding plan to Congress, Congress will provide one for
the Navy.
With limited time, the subcommittee has to review this
year's budget request. It appears to be somewhat better than
previous years. The Department is requesting authorization for
the procurement of eight new ships. And it is requesting
advanced procurement funds for the procurement of at least
seven more next year, including two submarines.
If you take into account that the Littoral Combat Ship
program (LCS) and the joint high speed vessel do not require
advanced procurement, then the potential exists for a 12-ship
request next year. And the following concerns, which I trust
that our witnesses will address today--none of this should come
as a surprise, particularly to our two witnesses, since I have
expressed these concerns either publicly or directly to them.
I am concerned about the Electromagnetic Aircraft Launch
System (EMALS) program of the next aircraft carrier. Mr.
Secretary well knows I recently visited the production
facility, and I was favorably impressed. However, failure of
this one system to deliver on its promises means that we are
building the world's largest helicopter carrier. I would like
the Secretary to address what additional oversight and
continued out oversight envisions for the program.
I also remain very concerned about the LCS program. I am
not happy with either the cost or scheduled performance.
In January, I spoke with the captain of the first ship, and
to the credit of the shipbuilder, he is pleased with the ship
and I am happy that he is pleased with the ship. But the fact
remains that the ship was delivered 18 months late and two-and-
a-half times over the cost that the contractor promised. No
one, neither the Navy nor the contractor, should be patting
themselves on the back for the first ship or for the second
ship, which has still not been delivered.
I am not convinced that the costs are being properly
monitored by the Navy. These ships are too expensive. We need
to drive the costs down and/or we need to see who can build
these ships for a fair price.
I think it is important to note that everything about this
program is different from other shipbuilding programs. The Navy
does not contract with the shipyards building the ship. They
have agreements with two prime contractors. The ship's
propulsion systems; combat systems; Command, Control,
Communications, Computers, and Intelligence (C4I) systems were
not specified by the Navy; they were chosen by the prime
contractors to meet performance specifications. Because of
this, there is very little common equipment between the two
types of ships.
Lack of commonality costs money now, it will increase
training costs for the sailor and it will increase overall life
cycle costs. I request that the Admiral and the Secretary
address this issue for lacking commonality today.
Returning to the destroyer program, it is no secret that
this committee last year supported the Chief of Naval
Operations' (CNO's) desire to return to construction of the
Arleigh Burke-class guided missile destroyer (DDG-51). Not
everyone is happy with the final decision. We seem to now have
a final decision for the Secretary of Defense on the way
forward, an agreement between the two shipyards, which will
level the industrial load. I request the Secretary explain the
agreements and I request the Admiral give us some sense of how
he will use these two very different types of destroyers.
I would also like an explanation this morning of some
fairly significant funding requests in the research and
development accounts. The Secretary of Defense has testified
that future procurement decisions will be based on the results
of the Quadrennial Defense Review, and it has stated that as
the reason to not request funds to alleviate shortfalls and
validate requirement gaps, such as the current Strike Fighter
shortfall of the F/A-18s.
If the Department is requesting one-half of a billion
dollars for the development efforts for replacement of a
higher-class submarine before the QDR validates the
requirement, make no mistake, this subcommittee has been the
strongest proponent over the last three years in submarine
construction and the preservation of our Nation's submarine
industrial base. The subcommittee has been supportive of
pulling forward the design of the next-generation submarine to
ensure we do not lose our skilled-edge designer workforce. Yet
this request goes far beyond that goal.
I ask the witnesses to please explain why the subcommittee
should recommend the full request for a nonvalidated
requirement when there are very real shortfalls and other
validated requirements today.
These are a few of our concerns. I am sure the other
members will express theirs.
Again, I welcome the Secretary. I welcome the Admiral for
being with us.
And I now turn to my friend from Missouri, the ranking
member, Mr. Akin.
[The prepared statement of Mr. Taylor can be found in the
Appendix on page 37.]
STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE FROM MISSOURI,
RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
Mr. Akin. Thank you, Mr. Chairman. And good morning to our
witnesses. I had the opportunity to meet with Admiral
McCullough for the first time yesterday. I had another good
discussion yesterday with Secretary Stackley, also in our
office.
I would like to thank you again for taking time to answer
my questions and share your thoughts regarding some of the
shipbuilding programs proposed in this year's budget.
I was also interested to hear the Chief of Naval Operations
state yesterday at the full committee hearing that the Navy
still intends to maintain the 313 ships. It had begun to sound
as if the Secretary of Defense in his Foreign Affairs article
and the Navy in its budget rollout were beginning to back away
from that number. It was not clear to me how the Navy planned
to implement the joint maritime strategy with its emphasis on
forward presence if the Navy intended to accept fewer ships. A
ship can only be in one place at a one time, and today's fleet
is the smallest it has been for nearly 100 years.
Despite the good news, however, that the Navy is not
backing away from the goal of increasing the size of the fleet,
the CNO also acknowledged in his written statement for fiscal
year 2010 budget aligns with the path of our maritime strategy
is that, ``However, we are progressing at an adjusted pace.''
That sounds like code to me for, this budget request doesn't
invalidate our maritime strategy, but it will allow us to meet
our goals.
I see evidence of this in the budget request for
shipbuilding. For example, the Navy will commission and
decommission the same number of ships this year, which means no
net increase to the number of ships. To be fair, it can't be
blamed on the budget request, for the simple math, 300 ships
with an average 30-year life, means that we need to commission
and decommission about 10 ships a year. And this budget
request, only eight ships, presents no future plan to give
Congress any reason to believe the Navy will ever meet its
force structure requirements.
Our colleague, Representative Forbes, asked Secretary Gates
and Admiral Mullen about the lack of a 30-year shipbuilding
plan at a hearing earlier this week. Admiral Mullen stated it
will come in the 2011 budget.
I would say we can rely reasonably well on the 30-year
shipbuilding plan that has been submitted before, but I count
at least nine ways this budget diverges from the 2009 plan:
One, moving the funding of carriers to 5-year centers drops
the force to 10 carriers by 2039;
Two, building three DDG-1000 destroyers instead of seven;
Three, building one DDG-51 destroyer instead of zero;
Not building the next-generation cruiser;
Not building a large-deck amphib for the maritime
prepositioning force in 10;
Not building a mobile landing platform ship for the
maritime prepositioning force in 2010; and then
Seven, not shutting down the amphibious transport dock
(LPD-17) production line at nine ships;
But funding the final increment for the tenth ship;
Nine, building two T-AKE ships for 10, instead of zero; and
Investing half a billion dollars in research and
development (R&D) for the replacement of the Ohio-class
submarine.
So, in fact, we cannot rely upon the last shipbuilding plan
and evidently we don't receive a new one. We have the same
problems on the aviation front, but I will save those comments
for next week's aviation hearing.
Therefore, we can only rely on the testimony you provide
today to shed light on the analysis that went into the
decisions that were made within the shipbuilding account.
The investments that the Navy is making in ship
construction and R&D were evidently a higher priority than
addressing the Strike Fighter gap which until recently the Navy
said was a serious concern. This may be true, but to do our
jobs, it becomes critically important that this committee
understand your reasoning.
Thank you again, Mr. Chairman.
To our witnesses, I appreciate your being with us today and
truly look forward to our discussion.
[The prepared statement of Mr. Akin can be found in the
Appendix on page 39.]
Mr. Taylor. Thank you, Mr. Akin.
The Chair now recognizes the Secretary, Mr. Stackley.
STATEMENT OF THE HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF
THE NAVY (RESEARCH, DEVELOPMENT AND ACQUISITION), U.S. NAVY
Secretary Stackley. Thank you, sir.
Mr. Chairman, Representative Akin, distinguished members of
the subcommittee, thank you for the opportunity to appear
before you today to address Navy shipbuilding. If it is
acceptable to the committee, I would propose to keep my opening
remarks brief and submit a formal statement for the record.
Mr. Taylor. Without objection, Mr. Stackley.
I also want to inform that although it is the norm for the
full committee to limit witnesses for five minutes, please take
whatever time you feel is necessary.
Secretary Stackley. Thank you, sir.
Mr. Taylor. Thank you.
Secretary Stackley. Today's Navy is a fleet of 283 battle
force ships, as many as half of which may be underway on any
given day, supporting combat operations, building global
partnerships, providing international security, performing
humanitarian assistance and disaster response, prosecuting
piracy, testing future capabilities and training for future
operations.
Beyond numbers, the quality of the force--our ships,
aircraft, weapons systems and, most importantly, our sailors
and marines--is unmatched at sea. So it would be easy to take
comfort in knowing that for the next decade, and certainly
beyond, the Navy and Marine Corps stand ready to respond to
major conflict with the most capable naval warfare systems in
the world today. The events of the century, however, point to
our future and must increasingly contend with irregular and
asymmetric threats. And two, we must pace the capabilities of
rogue states and emerging naval powers that would intend to
challenge our influence in the regional security of our friends
and allies.
In the face of these growing challenges, the Chief of Naval
Operations has outlined requirements for the future force, the
313-ship Navy. In fact, CNO has emphasized, the 313 ships
represents the floor if we are to meet the full range of
missions confronting the Navy in the next decade and beyond.
The fiscal year 2010 budget request funds eight ships, a
modest but important step forward towards meeting the CNO's
requirements. Again, however, it is more than numbers.
The Navy is moving to close gaps in our capabilities. To
this end, we will restart the DDG-51 construction in 2010 to
provide increased air and missile defense to meet the demand
from combatant commanders. The success of the Aegis system
against ballistic missiles demonstrates that at-sea testing
and, two, through real-world performance against an earthbound
satellite provides a solid foundation for this mission.
At the other end of the warfare spectrum, we are increasing
production of the Littoral Combat Ship with our request to
deliver this needed capability to the fleet. We know there are
many challenges ahead as we ramp up construction, tackle
affordability and learn how to best operate and support this
new class. But we are confident that the utility and
flexibility of this ship will prove indispensable in future
naval operations.
This year's request also includes the twelfth Virginia-
class fast attack submarine and two T-AKE dry cargo and
ammunition ships. Both of these are strongly performing
programs. The eight ships in our request is one of two joint
high speed vessels that the Navy is jointly procuring with the
Army.
The budget request also funds the balance of LPD-26 and
DDG-1002 and includes advanced procurement for seven future
ships.
The underlying challenge, indeed the pressing requirement
before us today, is affordability. This is not a new challenge,
but it has taken on new dimensions. The fact is that ship costs
are rising faster than our top line. Per-ship costs have risen
due to such factors as low-rate production, reduced
competition, increased system complexity, build rate,
volatility, instability in ship class size and challenges with
introducing new technologies into new platforms.
Perhaps most significantly, over the past decade, we have
introduced 11 new class designs, 11 lead ships, each a highly
complex prototype bringing its own unique challenges.
And then, compounding these issues, particularly in the
case of lead ships, where there is greater risk and
uncertainty, we have fallen short in our ship cost estimates,
or in certain cases, in our willingness and ability to fully
fund to the estimate.
All of these factors lead to inefficient production and
cost growth. We have learned, or in certain cases relearned,
the lessons of this experience.
Accordingly, the Navy understands and agrees with the
objectives of the House bill on acquisition reform, and we
strive to meet its spirit and intent in our ongoing initiatives
to raise the standards, to improve the processes, to instill
necessary discipline and to strengthen the professional core
that manages our major defense acquisition programs. And to
this end, the 2010 Navy shipbuilding plan strives to provide
stability, which would underpin improved performance across
government and industry.
The budget request builds on ship programs which are
currently in serial production. There is renewed emphasis on
minimizing change to requirements, minimizing change to design
and improving our estimates for follow-up ships. This leads to
reducing risk to the shipyard's ability to execute follow-on
vessels and enabling the Navy to expand the use of fixed-price-
type contracts.
We are committed to ensuring that new ship designs are
mature enough to commence production. We are working to fully
leverage competition at every level of our shipbuilding
programs, recognizing at the prime there are often limited
competitions, but we are drawing down to the first and second
tier vendors as well.
Within our shipbuilding contracts, we are implementing
affordability programs, reuse of existing design and incentives
for selected industrial capital investments and improvement
projects. As well, open architecture, both for hardware and
software, promises to be a powerful cost-avoidance tool as well
as a process for improving our warfighting capability.
The challenge before us is great, but so is the need. And
in meeting the need, this subcommittee has been steadfast and
unwavering in its support for a strong Navy and Marine Corps.
We thank you for that.
Again, I thank you for your time today and look forward to
your questions.
[The joint prepared statement of Secretary Stackley and
Admiral McCullough can be found in the Appendix on page 41.]
Mr. Taylor. Thank you, Mr. Secretary.
STATEMENT OF VICE ADM. BARRY J. MCCULLOUGH, USN, DEPUTY CHIEF
OF NAVAL OPERATIONS FOR INTEGRATION OF CAPABILITIES AND
RESOURCES, U.S. NAVY
Mr. Taylor. Admiral McCullough.
Admiral McCullough. Chairman Taylor, Representative Akin
and distinguished members of the subcommittee, I am honored to
appear before you this morning with Secretary Stackley to
discuss Navy shipbuilding. I request our written statement be
made a part of the record.
Mr. Taylor. Without objection.
Admiral McCullough. Mr. Chairman, before I begin, I would
like to mention that in addition to our role in seapower, the
Navy currently has more than 13,000 Navy personnel serving on
the ground in Iraq and Afghanistan. They serve in traditional
roles with the Marine Corps, but also in support of the land
service combat support and combat service support in support of
joint commands in the Army. We provide these sailors, in
addition to fulfilling our commitments to the country and our
allies to provide persistent forward presence, incredible
combat power in support of the maritime strategy.
Today, we have a balanced fleet capable of meeting most
combating commander demands, from persistent presence to
counter piracy to ballistic missile defense. Right now, we have
40,000 sailors deployed aboard 124 ships and submarines around
the world as part of our ever-deployed force.
However, as we look ahead, in the balance of capability and
capacity, we are seeing emerging warfighting requirements in
open ocean antisubmarine warfare, antiship cruise missile and
theater ballistic missile defense. Gaps in these warfare areas
pose increased risk to our forces; state and nonstate actors
who in the past have only posed limited threats in the littoral
are expanding their reach beyond their shores and with improved
warfighting capabilities.
A number of countries who historically have only possessed
regional military capabilities are investing in their navies to
extend their reach and influence as they compete for global
markets. Our Navy needs to outpace other navies' capabilities
as they extend their reach.
The Navy must be able to assure access in undeveloped
theaters. We have routinely had access to forward staging bases
in the past. This may not always be the case as we go forward.
In order to align our surface combatant investment strategy
to best meet evolving warfighting gaps, our fiscal year 2010
budget request truncates the Zumwalt-class guided missile
destroyer (DDG-1000) program at three ships and restarts the
DDG-51 production line. This plan best aligns our service
combatant investment strategy to meet Navy and combatant
commander warfighting needs.
The Navy must have the right capacity to meet combatant
commander warfighting requirements and remain a global
deterrent. Combatant commanders continue to request more ships
and increased presence to expand cooperation with new partners
in Africa, the Black Sea, the Baltic region and the Indian
Ocean. This is in addition to the presence required to maintain
our relationships with current allies and partners.
The Navy can always be persistently present in areas of our
choosing. We lack the capacity to be persistently present
globally. This creates a presence deficit, if you will, where
we are unable to meet combatant commander demands. Africa
Command (AFRICOM) capacity commands will not mitigate the
growing European Command (EUCOM) requirement and Southern
Command (SOUTHCOM) has consistently required more presence that
goes largely unfilled.
The Navy remains committed to procuring 55 Littoral Combat
Ships. The LCS program will deliver capabilities to close
validated warfighting gaps. LCS's inherent speed, agility,
shallow draft, payload capacity and reconfigurable mission
spaces provides an ideal platform for conducting additional
missions in support of the maritime strategy to include
irregular warfare maritime security and antipiracy operations.
The Navy remains committed to an 11-carrier force for the
next three decades, which is necessary to ensure that we can
respond to national crisis with the currently, presently
described time lines. Our carrier force provides the Nation the
unique ability to overcome political and geographic barriers to
access for all missions and to project power ashore without the
need for host-nation ports and airfields.
The Ohio-class ballistic submarine, originally designed for
a 30-year service life, will start retiring in 2027 after over
40 years of service life. The Navy commenced an analysis of
alternatives in fiscal year 2008 for a replacement Ohio-class
ballistic submarine (SSBN). Early research and development will
set the stage for the first ship to begin construction in
fiscal year 2019. This time line is consistent with the
development of the Ohio class.
The Virginia-class submarine is a multimission platform
that fulfills full spectrum requirements. Virginia was designed
to dominate the undersea domain in the littorals, as well as in
the open ocean, in today's challenging security environment;
and it is replacing our aging 688 class submarines. Now, in its
tenth year of construction, the Virginia program is
demonstrating that this critical capability can be delivered
affordably and on time.
In this budget request, we have delayed the start of the
follow-on cruiser program known as Future Class Cruiser (CGX).
This requirement has been validated by the Joint Requirements
Oversight Council (JROC), and the JROC approved the initial
capabilities document. However, this system is dependent on
development of certain aspects of the ballistic missile defense
system, total architecture, specifically sensors and sensor
netting. Thus, the analysis of alternatives remains in Navy
staffing until we better understand the required sensors for
this platform and our ability to deliver that capability.
The Commandant of the Marine Corps is determined that a
minimum of 33 assault echelon ships is necessary to support
Marine Corps lift requirements; specifically, he has requested
a force of 11 aviation capable ships, 11 LPD-17s and 11 LSDs.
The Chief of Naval Operations supports the Commandant's
requirement; however, this requirement, as well as the CGX
requirement, will be further reviewed by the Department during
the Quadrennial Defense Review (QDR).
The Navy must maintain its carrier submarine and amphibious
forces. In addition, we need to increase our surface combatant
capacity with additional destroyers in LCS to meet combatant
commander needs today and for ballistic missile defense,
theater security cooperation. And then steady state security
posture of the future.
I thank you for this opportunity to discuss the Navy
shipbuilding program and your support of our Navy. I look
forward to answering your questions and, again, thank you very
much for your support to the Navy.
[The joint prepared statement of Admiral McCullough and
Secretary Stackley can be found in the Appendix on page 41.]
Mr. Taylor. Admiral, thanks for your comments and, above
all, thanks for your many years of service to our Nation.
I am going to turn to Mr. Akin.
Mr. Akin. I didn't have any specific--I guess I could run
through a couple of different things here.
The first one is the Arleigh Burke-class guided missile
destroyer (DDG-51). Last year, the Navy was criticized for
proposing to restart the DDG-51 line without having revalidated
the requirement through the Joint Requirements Oversight
Council (JROC).
In your opinion, was that necessary? Have you done so? Or
is it not really necessary?
Admiral McCullough. We took the DDG-51 brief through the
Joint Requirements Oversight Council. There were specific
questions about what drove the change. The change was driven by
our evaluation of changing threats globally.
This was conveyed to the JROC, specifically the development
of antiship ballistic capability in the western Pacific; the
proliferation of ballistic missiles globally; the improved
capability in nonstate actors, specifically demonstrated by
Hezbollah in the 2006 war with Israel when Hezbollah launched
two C-8O2 coastal defense cruise missiles, one striking the
Israeli ship Ahi-Hanit, and the other striking a merchant
vessel.
So from an area air defense perspective and an
antiballistic defense perspective, we saw a rapid increase in
development of threat capability and the proliferation of this
capability.
Additionally, we have been monitoring submarine deployments
of potential adversaries in the Pacific and have noted an
increase in deployment numbers and times of that potential
adversary out into areas east of Taiwan. These are not with
previously noted noisy-type submarines, but with increasingly
quiet, advanced diesel electric submarines with antiship cruise
missile capability.
When we looked at the development of the threat and the
fact that the development of that threat had moved to the left,
we found it increasingly necessary to increase our capability
and capacity in those areas.
This goes hand in hand with the capability that we have
developed in the DDG-51 class ship. There are those that would
say that is older technology, and I would say that the
capability we put in DDG-112 is substantially much better from
a capability standpoint than what was originally put in the
Arleigh Burke in the early 1990s. Arleigh Burke DDG-51's first
deployment was in 1991.
When we look----
Mr. Akin. Is that capability that you are talking about
stronger in terms of the ballistic defense or also submarine,
antisubmarine?
Admiral McCullough. Open ocean submarine warfare in the
case of the Arleigh Burke destroyers is much better. The
Arleigh Burke has a much more powerful, active sonar; and that
was by design. The DDG-1000 has a lower-power sonar, but that
is required in littoral operations, specifically in a
reverberation environment.
The DDG-1000 ship is an excellent ship for what we asked
the designers to design and the shipbuilders to build, but it
does not answer the threats we see today in antiballistic
missile defense, cruise missile defense and open ocean
antisubmarine warfare.
That is why we made the change, sir.
Mr. Akin. One other question, then.
My understanding is that the Navy intends to spend $1.6
billion to complete research and development (R&D) on DDG-1000,
and that may have benefits for future platforms such as CVN-78,
the Ford-class carrier, and help the industrial base. But since
DDG-1000 provides a capability that is less valuable to the
Navy in the future, can you tell me if the Navy has considered
sacrificing some of that capability in order to save the money
for R&D or procurement, or it could be applied elsewhere?
Secretary Stackley. Sir, if I could take that question, let
me break down the R&D elements of DDG-1000 into a couple of
categories.
First, you have an R&D stream that goes for the total
platform that, regardless of the quantity that you build, if
you are going to build one, we have to complete the design
development for the class.
There is a second R&D stream that goes to supporting
completion of development of major systems, such as the dual
band radar, the advanced gun system; and again, if you are
going to field one DDG-1000, you are going to have to invest in
those dollars. And then the dual band radar, as well, goes to
the carrier program. So that stream would stay in place.
But there are significant opportunities to improve on the
total dollars, particularly when we take a look at some of the
test and evaluation (T&E) requirements. The T&E program for
DDG-1000 is extremely robust, and I am working with the program
office right now. We are basically going line by line, tracing
requirements--program requirement, platform requirements,
system requirements--to test requirements and basically looking
to be able to harvest some of those opportunities. Those aren't
in the near years. You don't get heavy into T&E until the
outyear.
But we are attacking it, and I would be happy at the right
time to return to the subcommittee here and give you greater
insight into both the opportunities and the approach we are
taking.
Mr. Akin. Thank you very much.
I yield back, Mr. Chairman.
Mr. Taylor. Thank you, Mr. Akin.
Secretary Stackley--and again you are fairly new to the
job; when we express our disappointment in the Navy's failure
to articulate a shipbuilding plan, you just happen to be the
one to get the message today.
Without the Navy articulating a plan, let me tell you what
I think is the plan.
Apparently, one of the centerpieces will be, as the Admiral
mentioned, a very large purchase of LCSs. The LCS was--when the
Navy came to Congress and said they wanted the ship, the
centerpiece of it was, it was going to be an affordable
warship. And the price grows from $220 to $500 or $600 or $700
billion per ship.
To use an analogy that the Secretary of Defense did the
other day on a smaller aircraft, when it starts getting in the
league, same price range as a DDG-51, and it is about one-fifth
of the capability, then something is wrong.
I am going to ask you for the record, what is your target
price for the follow-on vessels in the LCS program starting
with the seventh and the eighth?
Secretary Stackley. Yes, sir.
Now the 2010 budget is requesting the fifth, sixth----
Mr. Taylor. I understand. Again, I realize this is going to
continue to be a learning curve on the part of the
manufacturer.
So what is your target price since we have a goal of about
50 of these vessels? What is your target price for the seventh
and eighth?
Secretary Stackley. Sir, let me describe two pieces. One is
budget and the other is target price. Because the target price
would be our contract price with the contractors for delivering
the ship, and then beyond that we have additional budget
requirements associated with government--associated with
integrated logistic support.
Mr. Taylor. I understand the additional packages.
Secretary Stackley. Yes, sir.
So we have taken the $460 million cost cap and we have used
that, I will call it, as a ``forcing function'' in terms of
driving to that number because that is not where we are today.
So the numbers that you quoted, the 700 number, that would
be a total budget number for the first two ships. We have come
down measurably, going from the first two ships to three and
four, and we look to make about equal strides in ships five,
six and seven with the 2010. That means we have not hit 460 for
total program, but we are targeting 460 or, as you describe it,
a target price.
Mr. Taylor. I was an early convert to Admiral Roughhead's
decision to end the DDG-1000 program, go back to the 51s. I am
in total agreement.
Since that is apparently going to be our warship of choice
for the foreseeable future, what steps are you taking for a
multiyear procurement contract, again, to get the best
economies that the Nation can get on this warship?
Secretary Stackley. Yes, sir.
If I could combine this with your opening statement with
regards to the agreement with industry, what we are doing as a
part of that agreement is, we have made the decision that we
are going to restart at one location, at Northrup Grumman
Ingall's operation. And by making that decision, we are
coupling it with investments in terms of production planning
and in terms of yard-wide improvements to facilitate not just
restarting, not just building like they built the last DDG-51
off the line, but let us look forward, at ways to significantly
improve the way we bring this ship together in the long term--
get off to a good start--those two ships in the 2010 and, we
project, 2011 budget request, if you will.
And my target is to be able to move back into multiyear
procurements in 2012 and out. That is a target; we have to work
this through the 2011 process. We are going to have to be able
to come back to you all to demonstrate that we are going to be
able to achieve this significant savings.
As well, we are going to have to put together an economic
order quantity advanced procurement plan that would start with
planning in 2011, as well, at the Bath Iron Works. They will
get their first DDG-51, their equivalent of a restart, 2012,
they would be competing with Northrup Grumman in a multiyear
environment. That is my goal.
Mr. Taylor. Thirdly, it has been my observation--and I will
use the LCS program as the poster child program gone horribly
wrong.
For years, Mr. Bartlett, the previous chairman and ranking
member, and I would get reports from captain or admiral, one
after another, Everything is fine; it is all on time, it is on
budget. And then within a week or two, the change to where the
Democrats got control of Congress, another admiral comes into
my office, and it is literally an ``awe-shucks'' moment, ``We
have cut the main reduction gear backwards, everything is
wrong, things really spun out of control on the program.''
Part of that problem I think was that the officer in charge
of the program, the baton would be passed to use a better
analogy, about once a year. And every one of those officers
left and said, Everything is fine.
We can't afford mistakes like that anymore. As I spoke on
the Electromagnetic Aircraft Launch System (EMALS) program,
electromagnetic launch on the next carrier, if it fails--and I
support your decision to go with it, but if it fails--and it is
not a joke--we have taken what should have been a $7 billion
aircraft carrier and we now have a $7 billion helicopter
carrier. No one wants that to happen.
It is my intention to recommend to the committee, as a part
of our markup, to tell the Navy in our markup that you should
appoint an officer who is going to be in charge of that program
from today through the development of the prototype. Then tell
the Navy that after that prototype is developed and accepted by
the Navy, a second officer will be in charge of the development
of the prototype to delivery of the vessel by the United States
Navy in approximately five to seven years.
What would be your reaction to that?
Secretary Stackley. Let me describe that the program
manager who is currently responsible for EMALS is top-notch. He
is one of our superstars. And at this critical stage in the
program, I have separately determined that he needs to stay
until we complete system development demonstration.
And so we are on that path. So what you are proposing is
what we are doing.
Mr. Taylor. What about for the second half?
Secretary Stackley. Likewise, sir. We are looking at
timing. We want to be able to bring on the relief for the
current program manager and give him more than two weeks
turnover, actually start to lay the groundwork, because his
focus is going to be on transitioning from the design
development to the ship installation and integration. And it is
a little bit longer than a normal rotation, if you will.
We are going to have to work that hard. But we see the
value and the importance and the criticality.
Mr. Taylor. Again, I am glad to hear we are in agreement.
I think it makes perfect sense to put it in the law. Since
people come and go, we need to see to it that the law remains
steady and that the program is--again, that it is done right.
I want you to know that I do support your decision to go to
the EMALS. We want to make sure we get it right.
Having said that, the Chair recognizes the gentleman from--
the Chair recognizes the gentleman from California, Mr. Hunter.
Mr. Hunter. Thank you, Mr. Chairman.
Secretary Stackley, General Dynamics-NASCO in San Diego,
according to the Navy's view, is doing really well with their
T-AKEs. The costs are going down, they are on schedule, and it
is a pretty amazing job that they are doing.
I know that funding for the last two planned ships in the
dry cargo/ammunition ship (T-AKE) program, 13 and 14, are in
this year's budget, and there is $120 million in advanced
procurement funding and some R&D funding also requested towards
the MLP, which represents a critical capability to the Marine
Corps, and it is also NASCO's nearest-term ship they are going
to be building after the T-AKEs.
Secretary Gates announced last month that the procurement
of the first mobile landing platform (MLP) ship was going to be
deferred to 2011, as with the procurement of the eleventh
amphibious transport dock (LPD-17) ship and the QDR, even
though, from what understand from the Navy, they wanted the MLP
funded in 2010.
So the question is, do you agree that we need to do what we
can to make sure that there is not a production gap between the
T-AKE and the MLP, which there would be with only $120 million,
from what I understand. That is not going to be enough to
sustain the shipbuilder in between 2010 and when the MLP starts
being produced; there is going to be a gap there.
And to add on to that, too, with what is going on in the
general economy, this is kind of just a broad question, I would
think that the Navy and you especially, Mr. Secretary, would be
more intent on letting the administration know what
shipbuilding does for the local economies and where we are--it
creates job, it helps out the economy in general.
You hire American workers and make an American product and
buy American steel; and I think that ties in with the entire
state of the American economy. And if you lobby harder, maybe
we might be able to get some of this stuff done. This creates
jobs.
Anyway, back to the MLP, please.
Secretary Stackley. Yes, sir. Let me describe a couple of
components there, first, T-AKE.
The T-AKEs that are being requested in the 2010 budget,
those were originally--in terms of the contract, there was a
2010 option, a 2011 option, and then in terms of the budget,
what we see is an opportunity to improve cost on those
contracts by joint buying, buying two ships in the same year.
So there is an economic decision, if you will. We are
looking at savings of $170 million, the way we have programmed
in the T-AKEs, two ships in the 2010 budget request. So that
helps stabilize the shipyard. That helps stabilize the vendor
base. And it also meets our Phase 1 Maritime Prepositioning
Force (Future) (MPF(F)) requirement. So that is the logic and
justification for bringing two T-AKEs into 2010.
The MLP program, on the other hand, was originally intended
to have been a competed program. And in fact, when we went
through the competition process, we found ourselves quickly in
a sole source, so we were able to improve on the schedule, if
you will, to get to a contract, and our marching down the R&D
line and the design development for MLP with NASCO in that
sole-source environment. But we did not see a contract award
prior to the fourth quarter of 2010 in that schedule.
Mr. Hunter. What I am talking about is the R&D, the $120
million that is being put out there now to keep them going for
all their design change, reducing risk, trying to make--for
once they are actually doing it right, where they are trying to
get risks down, get everything done early, get engineering done
early on, get everything designed so that when they actually
start making it, there are not a bunch of changes along the way
and then everything skyrockets like the LCS. They are actually
doing it the right way.
What I am saying is, there is not enough money in there in
that 120 for them to sustain between the T-AKE and the MLP.
There is a gap there that is going to end up costing them more
down the line, costing the Navy more down the line, because
they are going to have a gap in their shipbuilding.
It is not an incredible amount of money that they will
need. I am not sure what it is, but there is a gap there when
it comes to what they are going to be getting between the T-AKE
and the MLP.
Secretary Stackley. Yes, sir, to try to tack on top of
that:
$120 million of R&D that goes to the shipbuilder, primarily
to the shipbuilder, for his design and development for MLP, it
also includes advance procurement to lead the ship
construction. We did not see a ship construction contract,
though, based on the design development schedule before the
fourth quarter of 2010.
There is a potential gap right now, looking at the workload
at NASCO. We never like seeing a production gap at our
shipyards. But given the choices between T-AKE and MLP--timing,
potential savings--we believe the right answer is, put in
advanced procurement to try to take care of the up-front
activities so they can move quickly into a construction
contract if, as a result of the QDR, we request an MLP in 2011;
and we will be staged to minimize any potential gap between the
T-AKE and the MLP.
Mr. Hunter. Wasn't the MLP already slated for 2010, though?
The MLP was originally asked for for 2010 by the Navy.
Secretary Stackley. In the 2009 budget request, when you
look in the 2010 column, you would see an MLP.
Mr. Hunter. It was slated for then and it was pushed off to
2011, so--okay, I understand what you are saying.
I think you are making the wrong decision by leaving that
gap there. If the Navy originally wanted it then, it is being
pushed off and it is going to produce that gap. You could
potentially see thousands of jobs lost, literally, and then you
are also going to see production suffer in the future for the
MLP based on that gap that exists between the T-AKE and the
MLP.
That is all I have, Mr. Chairman. I yield back.
Mr. Taylor. The Chair thanks the gentleman from California.
We now recognize the gentleman from Connecticut. Mr.
Courtney.
Mr. Courtney. Thank you, Mr. Chairman. I want to focus a
minute on the Ohio research and development request.
Again, in your opening remarks, Mr. Stackley, there was a
comment that ``ship designs must be appreciably complete before
the start of fabrication to avoid concurrency and rework,''
which Mr. Hunter referred to in his comments, is that trying to
get the design done and finished so you don't have to change in
midconstruction seems to be a new sort of mantra here.
Given the fact that the Ohios are going to be coming off
line, as the Admiral said, in 2027 and the construction is
targeted for 2019, I mean, that is the point here, isn't it, to
get the R&D and design work started so that we won't have that
kind of difficulty?
Secretary Stackley. Yes, sir. What is referred to as the
sea-based strategic deterrent, which is the Ohio-class
replacement boat, if you will, we are targeting 2019
procurement; and the R&D receiving that procurement includes a
request in 2010.
That R&D targets a couple of things primarily. One is what
is referred to as the common missile compartment. The U.S. and
the U.K. are jointly developing a common missile compartment
that will support both our requirements as well as the U.K.'s
successor class, which will replace the Vanguard. This is
rather unique that the U.K. is ahead of the United States in
terms of its requirements because the successor class is due,
basically initial operation--operational capability, in 2024.
So they are three years ahead of us in terms of need.
We are going to develop this jointly. So, in fact, our R&D
is a bit ahead of historical R&D streams. So approximately 387
million of our 495 request goes towards that joint development
with the U.K., the balance of the request going to the front
end of design and feasibility studies for a new reactor plant
design for this new boat.
Mr. Courtney. Just one question--the SSGNs are going to
start coming off line probably pretty soon after the Ohio. And
I guess the question--if we are going to invest in this early
research and development, then we have got SSGN sort of right
next in line in terms of coming off use.
Should we maybe be focusing a little broader than just the
SSBN in terms of R&D or--I don't know if you have any comment
on that.
Admiral McCullough. Sir, what I would say about that is,
you know, we just completed the first deployment with Ohio; and
initial indications are, that submarine did exceptionally well
in performing its missions and what it was tasked to do. We are
still trying to get our arms around what a follow-on strategy
for SSGN and what the operational requirements would be.
Now, that said, as we go forward with an Ohio replacement,
we need to look at what else we could potentially use that
submarine for and what it could be adapted to, to go into an
SSGN replacement. But at the same time, we have to be very
conscious of what the potential cost of that submarine will be.
And if you just did the inflation from an Ohio, it would be a
substantial piece of our shipbuilding budget if you just
inflated the cost of the original Ohio boat into the 2015 time
frame.
So there will be a nuclear posture review, and I know there
is a lot of discussion about that. But I can't see any decrease
in requirement for the sea-based part of the strategic triad.
You might see some reduction in the number of tubes required,
but I don't see a reduction in that requirement.
And so we have to look at both what we see coming out of
the SSGNs as operational capability and how we want to go to
backfill that capability in the future and to contain the cost
on a replacement ballistic missile submarine, sir.
Mr. Courtney. Thank you, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman. The Chair now
recognizes the gentleman from Colorado, Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman.
Mr. Secretary, one question about the--given the current
situation the economy is in, it seems that commodity prices
have dropped, labor prices have dropped. In terms of
acquisition, how have we benefited from that in terms of
reductions in cost?
Secretary Stackley. Let me describe a couple of things. You
said commodity and labor. In fact, we are not seeing a
reduction in labor costs. And I will come back to that.
Commodities--commodities have come down significantly when
you look at where they were one to two years ago, versus where
they are today. Now, commodities in terms of shipbuilding, as
an example, represent a small percentage of the total cost of
the ship. So whether you are talking steel, pipe, cable, you
are in the less than five percent total cost for the ship, for
the raw material. So we are going after those benefits, but
they aren't appreciably changing the cost of the ships.
On the labor side, it is a more complex equation. When we
look at labor and labor rates, they are affected by several
factors. One is the direct wage that you pay to the worker, and
that direct wage goes up with the cost of living or labor union
agreements that are contracts between the shipyards and the
labor unions. Those have been going up at a steady, predictable
rate, and so in fact what we have with the shipyards are what
are called forward pricing rate agreements that account for
that.
The second major component associated with those rates is
the overhead and indirects. Overhead is associated with the
facilities' costs that the shipyard is operating. So they have
a cost that comes back in their pricing for such factors as
appreciation or capital expenses that get spread out over the
term of the equipment; and then you have the indirect costs
which would include such things as insurance, health insurance,
a number of those factors that again are not coming down. Those
are going up.
So when I look at the categories that you just described,
commodities, we are going after it; it is not having the big
bang because commodities don't represent a large percentage of
the cost. And then rates, we don't have much influence--I am
going to say, frankly, we don't have influence on the direct
wages that are going to the workers or some of the indirects.
But what we do have the ability to go after are the
overheads. So I have spent time with the CEOs of our shipyards,
attacking that issue. Much of our overhead was sized for larger
throughput than what we have got today, okay? Some of these
facilities, going back to the buildup of the 1980s, some of
them have been drawn down over time. So many of them have
recapitalized.
What we have to do is ensure that the shipyards that are
building our ships are the right size for the production we
have got going through them to bring that overhead down. It
doesn't happen quickly. So we have to work closely with those
shipyards to be able to drive that overhead rate down.
The piece you didn't talk about, when you mentioned
commodities and rates, was the rest of the material costs, in
this case, for ships. And that is where you start to get into
equipments, components, hardware. That is not coming down with
the price of commodities because that, in fact, brings a lot of
touch labor to it and it is typically highly skilled touch
labor when you talk about whether it is gas turbine engine or
whether it is a common equipment enclosure for electronics. In
that case, what we have to look at is--commonality as an
example, where we try to drive common equipments, yet the
benefit of economic order quantities to get at that material
cost.
So we are tackling the equipments; commodities, we don't
have the bang for the buck that we--you might look to see based
on what is happening with economic rates; and we are going
after overheads.
Mr. Coffman. It seems like what you mentioned earlier was a
lack of competition. It seems like that is a factor in the fact
that we haven't been rightsizing in terms of capacity.
Secretary Stackley. There are certain cases where you don't
have competition. And so we have to work--we have to use other
methods to attack some of the cost structure in the
noncompetitive environment. But even in those cases, you go
after the material underneath of the prime, if you will.
So if you have a shipyard that is the only shipyard
building that type of ship, you have to go after the whole cost
structure, which includes everything that he buys and drive
competition down throughout the program. Where we do have
competition has proved to be extremely effective in motivating
a focus on cost performance.
Mr. Coffman. Mr. Chairman, I yield back the balance of my
time.
Mr. Taylor. The Chair thanks the gentleman.
The Chair now recognizes the gentleman from New York,
Captain Massa.
Mr. Massa. Thank you, Mr. Chair. And I have no questions at
this time.
Mr. Taylor. The Chair then recognizes Ms. Pingree.
Ms. Pingree. Thank you, Mr. Chair.
Mr. Taylor. The gentlelady from Maine.
Ms. Pingree. Well, thank you very much. I appreciate both
your service and your testimony this morning. And as you
probably know, I am one of the newer members of this committee,
just elected in November. But I represent the First
Congressional District of Maine. So Bath Iron Works is in my
district, and we are very proud of the work they do and their
ability to work with you.
Honestly, much of what I am concerned about, of course, is
the size of the future Navy. Some of these questions have
already been posed to you and I appreciate your answers. I know
that much of this won't come up until the Quadrennial Review,
but we are very anxious, of course, to make sure that the
industrial capacity not only for my district, but just
generally in the shipbuilding industry continues to grow, that
we have the competition in the business, but also we have the
business going on in building ships. For us, the opportunity to
continue to build ships is important.
The plan right now clearly works well for us to build the
DDG-1000s and to be in line to go back to building the DDG-51s.
Ms. Pingree. But I just want to hear you talk a little bit
more about that from our perspective. I know that we had
Admiral Roughead visit our district recently to launch our most
recent ship and talked about the capacity of Bath Iron Works
(BIW) and the quality of our work. And, frankly, I just want to
hear you say it again and say that this is important to us,
that industrial capacity is important, that we will be hearing
more, as has been asked today and was asked previously in our
hearing yesterday, about, you know, continuing to build ships
and the importance of shipyards and not losing that capacity as
we see our work force being downsized and some of the issues
that have gone on in the past which I think is bad for national
security, bad for the manufacturing capacity of this country,
and worrisome about the future.
Secretary Stackley. Yes, ma'am.
Let me first say that I was at that christening with
Admiral Roughead, and I was able in my remarks to bring back to
everybody the statement that Bath built is best built. It is
not just a logo.
Ms. Pingree. That is our favorite statement.
Secretary Stackley. It is tattooed in the hearts and minds
of every worker up there, and I say that with all sincerity.
A couple of quick comments. We just talked about
competition and how important competition is. When we look at
surface combatants, Bath Iron Works and Northrop Grumman have
been our surface combatant builders for my life, and what we
see is we see a very robust competition between the two, not
just in terms of costs but in terms of innovation. And when I
look at the land level facility at Bath Iron Works and the
investment that really turned the corner in terms of their
performance, that was driven by competition. And so when we
look forward to future construction of surface combatants, I
look forward to continued competition.
The chairman made reference to the agreement between the
Navy, Northrop Grumman, and Bath Iron Works. An important part
of that agreement which builds the three DDG-1000s at BIW is
the stability that it brings to that shipyard. We are able to
address what was a concern associated with future workload and,
at the same time, take advantage of three ships, one learning
curve, one shipyard, which is good for the Navy, good for the
Nation, and just happens to be good for Bath Iron Works.
Admiral McCullough. And if I could, ma'am, let there be no
confusion that the Chief of Naval Operations (CNO) stated in
his testimony and I will state it here, the minimum number of
ships to execute the maritime strategy--global maritime
strategy for the 21st century is 313. We have said that
repeatedly. CNO stands by that, I stand by that, and that is
what we need. And so that is a minimum of 313 ships.
Ms. Pingree. Well, thank you for your thoughts. And, again,
that has been brought up several times since I have been on
this committee, this concern that while there is a commitment
to increasing the size of the ships, and 313 is the number, the
current plan does not look like we are going to get there. So I
know there is a lot of talk about that being in the Quadrennial
Review. I just want to say that I am anxious to see that and
make sure that we do continue to reinforce that capacity.
And just to add a note, I am glad you brought up the land
level facility; and I think that is another important factor
about Bath Iron Works. I served in the State legislature at the
time when the State made that commitment. The State of Maine
helped to build that part of the facility to modernize it, and
so this is a commitment that not only is part of the companies
that work there and the workers that work there but our State,
too. We clearly recognize this is important to us and to the
industrial capacity of our Nation and to the future of the Navy
and so appreciate this partnership and look forward to it
continuing.
Secretary Stackley. Let me go a little bit out of bounds
here and talk a little bit further on that. Because that land
level facility represents a couple of things. It was the result
of competition. Basically, General Dynamics (GD) Bath Iron
Works knew that they had to do something different or they
weren't staying in the game.
But it was also the result of stability and a multi-year
procurement that gave them the ability to commit the investment
to the facility where they knew that they would get the return
on investment. So we have competition, stability, and a solid
acquisition approach that resulted in driving down the cost, as
well as delivering to the Navy what it needed in terms of ships
on schedule and on budget.
Ms. Pingree. Well, thank you. It seems to have been a
successful plan, and I can guarantee you we are committed in
our State to continuing to be innovative and bring down costs
and deliver best-built ships on time. So thank you.
Mr. Taylor. The Chair thanks the gentlewoman from Maine.
The Chair now recognizes the gentleman from Virginia, Mr.
Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Secretary Stackley, Admiral McCullough, thank you for
joining us today and thank you for your service to our Nation.
Admiral McCullough, I will begin with you. The other day
when Admiral Mullen came to testify before us concerning the
authorization process, one of the questions I asked him was
concerning a proposal to go from 11 carriers down to 10
carriers; and I have a couple of questions along those lines
for you.
Is it the Navy's intention to ask for a change in the law
which presently requires 11 carriers, or a waiver? And, if so,
it looks like that drop from 11 to 10 would take place,
according to Admiral Mullen, in the years 2014 and 2015 for
about a 24-month period. Can you tell me if you believe that
that is going to have a strategic impact on this Nation's naval
capabilities? And, if so, what are the contingencies that you
would put in place to make sure that there is not a drop or a
gap in the strategic capability of this Nation?
Admiral McCullough. Yes, sir. Thanks for the question.
First of all, what we need to do is take Enterprise out of
service on time; and she is supposed to go out of service in
November of 2012. That carrier will be about 47 years old. As
you well know, it is an eight reactor ship, one of a kind. It
was our Nation's ability to try to put nuclear power to sea in
an aircraft carrier that drove the design and construction of
Enterprise, and it was very successful, and it has served in
everything from the Cuban missile crisis to recently in the
Arabian Sea and the Arabian Gulf.
The ship needs to be retired on schedule. So the waiver we
request is to be able to decommission Enterprise and inactivate
Enterprise in November, 2012.
Now, that will lead us to a 10 carrier level until the
delivery of the Ford, CVN-78, which is scheduled for September,
2015. So the question, can we mitigate our operational
availability of the Nation's aircraft carriers during that
period? Yes, sir, we can.
We have moved some availabilities forward, PIAs for the
aircraft carriers maintenance availabilities, and we have moved
some to the right in order to produce that operational
availability to meet the commitment of the Navy to the Nation
during that time frame.
I would also tell you that if we don't take Enterprise out
and the direction is to keep her in service and we have to put
her in the dock to do the maintenance required to continue that
ship in service beyond 2012, it significantly disrupts the
refueling schedules for the remaining Nimitz-class carriers.
The one immediately impacted in that time frame is Abraham
Lincoln, CVN-72. When Lincoln comes home from her last
deployment prior to her currently scheduled refueling
availability, she is out of gas, if you will. So if we put
Enterprise in the dock to do the maintenance availability on
her to get her beyond 2012, not only do you have that aircraft
carrier out of service, you can't get any more operational
availability out of Nimitz or out of Lincoln because she is out
of fuel. And then each subsequent refueling would be delayed.
Now, there is a compounding factor associated with that.
Because now you have to retain Enterprise after she comes home
from a deployment, after the maintenance availability. So if
she went into that maintenance availability in 2012, she got
one deployment's worth of fuel left in her. So if she deploys,
she comes home, now, because we have delayed the refueling
availabilities of Lincoln and beyond, we have no place to fit
her in to do her inactivation availability.
It is a nuclear powered warship. You can't lay it up and
put a very reduced crew on it. You have to keep the crew on it
to maintain the propulsion plant.
So now we have got this carrier set aside with no
operational availability out of it, maintaining a crew of
around 2,000 people on it, which have to be there and can't
contribute to the Navy elsewhere. And we looked at taking those
people out and putting them on the follow-on ship. So the
answer is we need legislative relief to take Enterprise out of
service on time, and we can mitigate the operational
availability.
Mr. Wittman. Would that legislative relief be in the form
of a waiver or a request to change the law?
Admiral McCullough. I think it is in the form of a waiver,
was what the legislative proposal was. I will get back to you
on that for sure. I don't want to sit here and sort of give you
a half answer.
[The information referred to is retained in the committee
files and can be viewed upon request.]
Admiral McCullough. But the Nation, as I said in my opening
statement, is committed to--or the Navy is committed to 11
aircraft carriers for the next three decades; and Secretary
Gates was clear on that when he talked about moving the build
cycle to five-year centers.
Mr. Wittman. Thank you, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman for a great
question and wants to compliment the Admiral on an excellent
answer. I appreciate, for the sake of the committee, you
walking us through that.
The Chair now recognizes the gentleman from Indiana, Mr.
Ellsworth.
Mr. Ellsworth. Thank you, Mr. Chairman; and I apologize for
being late. If these questions were already answered, I
apologize to you all.
I was in a meeting--I heard Secretary Stackley say our
favorite saying. I was in a meeting with the President about
three weeks ago, and he said that at some point we have to
start making decisions on national defense based on national
defense. I hope that is up there in the top of our favorite
sayings, also, because I think that is very true.
I want to ask three questions, hopefully from the short
answer up to the longer answer.
My first question is when we plan to announce the
propulsion system for our cruisers. If you will think about
that one, if you can give me an answer on that.
The second, I would like your thoughts and plans on spare
long-lead reactor parts, addressing that issue.
And, thirdly, and what might take the longer answer, is
that Secretary Gates announced in April about going to the
five-year building procurement on the carrier. I would like the
justification and logic on that and what that might do to the
price of these carriers.
And if you can get all three of those in my five minutes, I
would appreciate it, if possible.
Secretary Stackley. Okay. Let me start with the question
regarding the propulsion system for the cruiser.
The cruiser, as Admiral McCullough alluded to earlier, is
outside of the Fiscal Year Defense Plan (FYDP), and I don't
want to try to pin down a date right now. Let me simply state
it is outside of the FYDP.
What we are doing in terms of preparing for the cruiser is
identifying what the capabilities are that are required to not
just meet the mission but we are also projecting the threat, if
you will. So the immediate work that is going on, that is
follow-up to the analysis of alternatives that was done about a
year ago that is continuing to be reviewed is to identify the
capabilities and the system and technology developments that
are needed for that cruiser. That will inform what the
requirements are, the larger hull, mechanical and electrical
requirements are for the ship in terms of electrical power
propulsion, size, displacement, et cetera.
With that information, then you start to get into the
design cycle for the propulsion plant or the integrated
propulsion plant, which would also bring your power systems. So
we don't have sufficient fidelity for those requirements to
start serious analysis, if you will, for the propulsion plant.
Absent that, what we are doing is feasibility studies.
So we are quite mindful of the NDA requirement that a
future cruiser would be nuclear powered. We have to have
greater fidelity in terms of what size, shape, what it is going
to look like, what it is going to operate to be able to come
back to the committee and provide any specifics regarding our
analysis.
So in terms of our feasibility, what we are doing is taking
existing propulsion plants, CVN-78 design, and scaling, if you
will, what would half of a CVN-78 propulsion plant mean in
terms of size of ship required, if you will, to drive that
around, and do we have a match or do we have a mismatch with
the systems and capabilities required for the future cruiser to
meet its requirements against the future threat.
The second question regarding spare long-lead reactor
plants parts, we do have a very unique and somewhat fragile
industrial base associated with U.S. Navy reactor plants. And
so we are very mindful, very careful to try to avoid peaks and
valleys regarding workload associated with, whether it is
carriers or submarines, and we used advanced procurement, if
you will, to try to help smooth out the workload there. So
regarding long lead, I think we have a very healthy long-lead
advanced procurement plan for our nuclear powered ships.
Regarding spare reactor plant parts, I would have to get
back to you on that. I don't know that we are not properly
spared in that case.
[The information referred to is retained in the committee
files and can be viewed upon request.]
Mr. Ellsworth. And, thirdly, just the justification logic
for the four- to five-year announcement on the carrier
procurement, what that is going to do, add to the cost, take
away from the cost, how that works into the goal of the 313
ships.
Secretary Stackley. I think the justification is more of a
requirements issue.
I will just quickly touch on the cost considerations. When
we look at Newport News and its workload for what was to be a
2012 carrier and is now projecting to be a 2013 carrier, at
that same point in time we will have a Refueling and Complex
Overhaul (RCOH) ongoing at Newport News, and we are into the
two-boat-per-year phase for the Virginia class. So there is, in
fact, a lot of activity, a lot of work going into Newport News
in that period of time.
The impact on costs would be, as I was discussing earlier,
the effect on overheads associated with pulling the work to the
right as well as the effect associated with inflation when you
delay procurements an additional year. So we use advance
procurement. We have an opportunity to use advance procurement
to offset some of those escalation impacts, and we are going to
work around the work going on in the shipyard at the time,
completion of CVN-78, ramping up to two submarines per year on
the Virginia class and the RCOH to try to minimize the cost
impacts. And I am not at this point able to give you a good
assessment of that because we are still going through all the
puts and takes, and it will be significantly impacted by the
lead stream that we put into the CVN-79.
Mr. Ellsworth. Thank you.
I yield back, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman.
Secretary Stackley, I think you are hearing a lot of
interest on the parts of the members of this committee, a lot
of concern about the industrial base. And I think you are
hearing a willingness on the part of this subcommittee to make
investments in our yards if we can turn around and tell the
American people that, by making taxpayer investments in these
yards, we are getting a better ship, quicker, greater
capability and, above all, a better price for the taxpayer at
the end of the day. I was curious what type of initiatives that
you have in mind that we could help you with legislatively
towards that end.
Secretary Stackley. Yes, sir.
Let me first walk through the way we incentivize
investments today. I gave a generic discussion on competition.
Competition basically drives shipyards to figure out how to get
costs out, which means investing in facilities to improve their
performance. Ship construction is labor intensive and it is
capital intensive, so what that means is heavy front end load
in terms of facilities tooling machinery that gets written off
over time on ship construction contracts.
So what we do there is we do a couple of things. They have
the ability to depreciate on their contracts, their
investments. As well, we provide what is called a facilities
cost capital of money. If they tie money up into facilities, we
allow that to come back on the contracts. We replace the
equivalent earnings of that money that got tied up into
facilities.
And then, going beyond that, what we have done is we have
opened up what we refer to as capital expenditure incentives,
where we put incentives in the programs where the shipyard
identifies a return on investment. We pay the front end in an
incentive. When he demonstrates a return on investment, then we
pay the back end in terms of incentives.
Mr. Taylor. If I may, Mr. Secretary, I appreciate
everything you said. But since most of our shipyards operate on
basically a cost plus basis, what incentive do they have to
identify that saving?
I am going to disagree. I think it is our job as a Nation
to identify those things and point it out to the shipyard,
rather than the other way around.
Secretary Stackley. Yes, sir.
Mr. Taylor. That is what purchasing agents do for a
company.
Secretary Stackley. Yes, sir. Let me try to--let me clarify
in terms of most of our shipyards working on a cost plus. I
think what we have is most of our ship construction contracts
right now are fixed-price type contracts. But we buy ships one
year at a time. So when a shipyard is trying to make or a
corporation is trying to decide whether or not to make a
significant capital investment to reduce its costs, even if it
is a fixed-price type contract, it has to be able to convince
itself that it will get the return on investment not just this
year but guessing what will happen in the outyears.
So in terms of the government as the customer, as the
buyer, what we have to do is work with industry to try to
either offset the risks associated with an investment up front
with nothing on the back end to justify it, and we try to do
that through--some through incentives, some through the way we
buy our ships. And, frankly, we struggle to get to the things
like multi-year procurements where, when you are laying a
multi-year, you are laying in potentially five years' worth of
known quantity of work, and that will drive him to invest on
the front end to get the return over the five years. Those are
the tools that we have in hand today.
We have chartered a separate group to do an independent
assessment regarding investments, costs and investments in our
shipyards. And the facts come to bear that there are
investments pretty much across the board where there is either
a healthy front-end stable workload or competition to drive the
investments.
What we don't have is a tool where we would go in and pay
direct for a shipyard to upgrade its facilities. That starts to
go down a path where, when you look at the industrial base, how
would you meter that out? How would you decide where the
government makes its investments, where the government will get
the return on investments across the broad industry? It is a
challenge.
Mr. Taylor. It is a challenge, Mr. Secretary, but I think
it is your job to do that, quite honestly. And I don't say this
happily, but we are in a situation where our six major
shipyards have one customer, that is the United States
Government. Whether it is the United States Navy, the United
States Coast Guard, they have got one customer. And as that
customer, I think, and with the responsibility of 300 million
people to defend them but at a price that is reasonable, I
cannot encourage you enough to take those steps to identify
those procedures, come to this committee with your
recommendations, and then put the responsibility on us to make
a pitch to the rest of the Congress to make those things
happen. I think you are the man to do that, and I hope you will
do that.
Secretary Stackley. Sir, I will take it for action.
Mr. Taylor. Thank you.
Going back to Mr. Ellsworth's questions, it is the
committee's decision to try to work with the Navy on the LCS
program. I believe the committee is in agreement with the CNO
as far as the DDG-51.
The fact of the matter is they are both extremely capable
warships, but they are both gas guzzlers. Last summer, when
gasoline prices were $4 a gallon, that committee responded by
saying that the next generation of amphibious assaults ships
would be nuclear powered. The year before that, when gasoline
was about $3 a gallon, this committee decided that the next
generation of cruisers would be nuclear powered. I am of the
opinion that gasoline is temporarily down. I am of the opinion
that when the world economy recovers that price is going to go
back up and that I am told that the next--that a typical
cruiser uses about 10 million gallons of fuel per ship per
year.
So since I believe it is inevitable that the price is going
up, that it is a military vulnerability to have warships that
need to be refueled every three to five days, and that you can
remove that vulnerability with a nuclear powered ship, I must
express my disappointment in the Navy's decision to delay the
building of the CGX.
I would also like to hear your thoughts on what steps you
are taking when we build the nuclear powered cruiser to use the
common propulsion plant that is going into the Ford carrier,
the A1B, in order to not only get some economies of scale on
the manufacturing side but also get economies of scale within
the Navy on your training.
Secretary Stackley. Yes, sir.
Let me start with the last question there. The Ford-class
propulsion plant, as I was discussing earlier, the CGX research
and development (R&D) funding that we do have, the piece of
that that is associated with the propulsion plant is doing
feasibility studies taking exactly a look at the Ford plant,
scaling it in half and trying to come to grips with what that
means in terms of a total ship.
We don't design a ship around a propulsion plant, but the
propulsion plant will start to put some limitations, if you
will, on the ship design. So we have got a known configuration.
We are figuring out what does it mean to scale it in half and
then what does that mean in terms of driving, length, beam
displacement for our cruiser. While, separately, we are
attacking the issue associated with technology and systems
development and design to meet the requirement, the capability
warfighting requirement for that cruiser.
Mr. Taylor. Mr. Secretary, what is the Navy's reluctance to
just go ahead and make that decision to say it is going to be
an A1B, and, yes, we are going to build a ship around this
power plant?
Secretary Stackley. Well, you start with the requirements.
Mr. Taylor. Going back to your earlier comments about the
problem of having at one point, I think, 12 different ships
under construction and all the issue of costs that went that.
If you have got a power plant that you believe works, if we all
know the economies of scale and that there are huge benefits to
sticking with something that you know works, I would like you
to walk the committee through why you are reluctant not just to
say that is going to be the power plant.
Secretary Stackley. Yes, sir.
Let me--I will start by offering follow up in terms of a
classified briefing. But in an unclassified setting let me walk
through--and Admiral McCullough might jump in here as well--
where we are in terms of the analysis of alternatives (AOA) for
the CGX.
The AOA was conducted a year plus ago, and there were two
parts to the AOA, one part associated with the capability that
is required to meet the mission, to defeat the threat, and the
other part of the AOA was the platform that would carry the
capability.
A couple of significant issues emerge. First and foremost
is cost and size of the systems that are required for that
mission. So that informs a decision that the CGX needs to move
outside of the Future Years Defense Plan (FYDP). We can't get
there from here in the time where the CGX was showing up in the
budget. So the platform moves outside of the FYDP while we look
forward at not just looking at the technology but how do we
best go after this threat. Because we cannot get there based on
the costs that emerged from the AOA. We have to look at other
alternatives.
So the nuclear power plant piece of that discussion is
really tied to the platform piece, while we tackle the more
difficult issue of how do we get the threat, what technologies
do we need. And it goes beyond a single platform. It goes
beyond a CGX discussion.
Admiral McCullough. The reason--one of the reasons for the
slip at a cruiser, Mr. Chairman, was how much radar do we need
in a ship. And some of this I will have to take off line with
you.
But if you look at not only ship-based sensors but land-
based sensors and overhead sensors and put them together in the
right network, what size capability or sensitivity radar do you
need to put on a ship? And as we worked through that, we saw no
clear path to get to the capability we needed in the sensor for
the ship that would get that ship built inside the Future Years
Defense Plan (FYDP). So what pushed the ship outside the FYDP
was no debate over the engineering plant. It was what size and
sensitivity sensor do we need and what can we rely on from
other sensors to mitigate the size of the one we would have to
put on the ship.
And, as Mr. Stackley has said, the plant--when we looked at
nuclear power plant options, the plant that would go in that
ship is a variant of the A1B power plant because we have that
designed and we would not want to commit a vast amount of money
to redesigning another power plant to put inside the ship.
But what we really don't know is, because we haven't yet
defined the sensor, we don't know what the electric generation
capacity is that will be needed to drive the combat system in
that ship. And until we can bring all the pieces of the puzzle
together, we don't know what the length beam and the
displacement of the ship will be and what the power density
requirements to drive that combat system and to propel the ship
through the water will be. And so we are working our way
through that.
If you look at the tankage required for extremely high-
powered radar in a fossil-fueled ship, you also have to look at
what the rotation rate would be from that ship being on station
and have to go alongside in order to refuel. And so what is the
true operational availability of the platform, because you are
going to have to take it off line to refuel it.
And so, the cost of fuel aside, it gets down to really what
the power density requirements are. We just haven't sorted that
out yet, and we are working hard to get through it. So that is
where we are, sir.
Mr. Taylor. The gentleman from Colorado, Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman.
Just one question in general, because I think the chairman
has raised a very critical point in terms of the logistical
complexity as well as the long-term cost of relying upon
conventional fuels. Is it that in the short run that the
capital cost of a nuclear power plant is more expensive than a
conventional power plant? In addition to the issues that you
have raised?
Admiral McCullough. That is something we consider, sir.
But, in the end, you have to look at the total ownership cost
of the ship or the life-cycle cost of shipment. And when you
make an up-front investment in a nuclear propulsion plant it
will add acquisition cost to the ship. But then as you look at
the projected cost of fuel over the life of that ship and if we
are going to build a ship that we are looking at--we are
looking at a 50-year service life on this ship, similar to an
aircraft carrier. What would be the life-cycle cost to operate
that ship using fossil fuel?
So we don't just look at it from an up-front acquisition
cost. I mean, obviously, that is an input, but we try to look
at it from a total ownership cost. And that easily mitigates
the up-front cost of nuclear power if you look at what we think
the ship would require, if it requires the high-end radar.
Secretary Stackley. One of the CNO's priorities is fuel. If
you look at the rate at which we consume fuel, it is both
logistics and it is cost. And so, across the board, Navy
systems platforms, we are attacking our fuel consumption rates.
So we are looking--you look at aircraft, you look at ships, you
look at ground vehicles. We are trying to figure out how to get
a better handle on the rate at which we are consuming fuel.
Admiral McCullough. And to add on to that, we are looking
at alternative fuels, not just fossil-based fuels. And we would
like to get to what we call the Green Hornet sometime in the
near term that runs off a non-petroleum-based fuel.
Mr. Taylor. The Chair recognizes the gentleman from
Virginia, Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Admiral McCullough, I go back on another issue concerning
our carriers. And I know that--I appreciate the Navy's
willingness in the decision making process for home porting, to
make that decision through the Quadrennial Defense Review (QDR)
process. I do, though, have a couple of questions that do seem
to create some contradictions; and I would like for you to just
elaborate a little bit on that.
I see in the Navy's justification book it clearly indicates
that future projects at Mayport would include a controlled
industrial facility, ship maintenance support facilities, and
other construction projects that would be necessary only if a
carrier were home ported there in Mayport. So I wanted you to
maybe explain to me. Is there maybe a disconnect there or an
updating that is needed in the justification book between the
budget planning process and the decision deferral?
And then also the request for $76 million for dredging and
dockside improvements there at Mayport that, again, you would
question, knowing that there are other ports in the Nation
where they could accommodate a nuclear carrier on an emergency
basis. And certainly that $76 million might lead you to believe
that there is the beginning of an effort there to create a
permanent home porting facility there in Mayport.
So I was wondering if you couldn't comment on those.
Admiral McCullough. Yes, sir. Thank you.
As we look at carrier facilities on the east and west
coast, there are three bases, if you will, on the west coast
that can accommodate a nuclear powered aircraft carrier in the
Nimitz class. On the east coast, we currently have one; and
that is Norfolk. So we believe that it is in the Nation's best
interests to have an alternate carrier facility on the east
coast to include both the ability to berth the aircraft carrier
there and to service it as required if something would preclude
getting in and out of Norfolk.
Sir, as you well know, the carriers won't fit through the
Panama Canal. So if something happened and we couldn't get a
carrier in or out of Norfolk for some period of time and the
ship was coming home from deployment and required service,
based on the current distribution of bases, we would have to
send it around South America to get it to a west coast
facility.
So we believe it is in the Nation's interest to have an
alternate capability on the East Coast; and we believe the
easiest place to do that is in Mayport, where the Navy has had
aircraft carriers based since I believe about 1952 until the
Kennedy was decommissioned. To get that ship in that turning
basin with adequate bottom clearance requires dredging even to
tie that ship up in Mayport. And that is what is in the budget
request today.
The pier work in Mayport is not particularly associated
with--that is in the budget this year. The budget request this
year is not associated with an alternate carrier facility. That
amount of money was in the budget for other pier work in
Mayport to support the ships that are currently there.
As we looked at the requirement for Mayport, as you
suggest, if we are going to truly have an alternate carrier
facility on the east coast, you would need the ship's
maintenance facility and the consolidated industrial facility
to support the nuclear work. We would additionally need to do
further upgrades to the wharf in Mayport.
So, given we are going to look at carrier basing and global
force dispersal, or deployment, rather, in the QDR, we think it
is in the Nation's and the Navy's best interest to proceed with
the dredging project, to at least have an adequate facility to
berth a carrier in Mayport, should we need to do that.
I know there are other ports on the East Coast that various
folks think you could put an aircraft carrier in; and I have
heard mention of Charleston, South Carolina, and Baltimore. The
sea detail going in and out of Charleston in the Cooper River,
with the flow and shape of the Cooper River, is difficult for
attack submarine and cruiser destroyer type ships. Having
served on Enterprise for 26 months and been the commander of
two carrier strike groups, I would not want to have to live
through that sea detail on a nuclear powered aircraft carrier.
I have also heard of Baltimore. And while the Baltimore
ship channel going up the Bay I believe is dredged to a depth
of 50 feet, having taken a DDG 10,000-ton destroyer to
Annapolis, I, again, would not wish that sea detail on anybody
to put a nuclear powered--or try to get a nuclear powered
aircraft carrier into Baltimore.
So, given all those factors, the Navy came to the
conclusion that Mayport is probably the best alternative for an
additional carrier facility on the East Coast.
Mr. Wittman. Just as a follow-up on that then, it sounds
like then from what you are telling me is that the Navy has
pretty much got their mind made up prior to going into the QDR
that Mayport's going to be the place and that we are
essentially ramping up for that by the first phase with this
$76 million improvement there.
Admiral McCullough. I would say we need the capability. I
think the dredging is the first start. But the Navy and the
Defense Department believe that needs to be looked at in the
QDR. And while I have some ideas what the projects proposed in
Mayport are, if the QDR decides that that is not the
appropriate place to put the aircraft carrier, then we will
revisit the whole issue.
Mr. Wittman. Thank you, Mr. Chairman.
Mr. Taylor. The Chair recognizes the gentlewoman from
Maine, Ms. Pingree.
Ms. Pingree. Thank you very much.
I hadn't really intended to ask you about this, but since I
have this opportunity and a chance to ask another question, not
only do I have BIW in my district but I have the Kittery
Portsmouth Naval Shipyard where we recondition submarines. I
have only had one opportunity to visit there, but it seemed
like there was a tremendous amount of work going on and the
need for a fair amount of construction to handle the capacity.
It looked to me like there was more work than they could handle
in spite of the excellent workforce, and I know they are hiring
more and doing more. But I didn't know if you wanted to just
talk about a little bit about the need for that capacity and
what is going on there.
Secretary Stackley. Let me just describe a couple of
things.
We have recently submitted in a report to Congress what is
referred to as the Shipyard Business Plan, which takes a look
at public-private, the division of work going into the public
shipyards, and then how do we plan and manage that workload to
ensure that we are meeting our public-private requirements as
well as ensuring that our shipyards are efficiently loaded.
And at Portsmouth--and I will get the number exactly
wrong--but I would say that there is what we call full-time
equivalents for workload at Portsmouth looks fairly stable at
the 4--roughly 4,000 per year rate. In the repair world,
particularly in Portsmouth's world where most of their work--
all of their work is submarine, but most of their workload was
tied to refuelings, and as we move--as we have moved out of 688
refuelings and have gone to Virginia where you don't have a
mid-life refueling plan, then it becomes more of a challenge.
So what we are trying to do is balance that skill level, 4,000,
to workload to ensure we are not operating the shipyard
inefficiently. And it will be a continual challenge.
Ms. Pingree. Thanks.
Mr. Taylor. The Chair recognizes the gentleman from
Missouri, the ranking member.
Mr. Akin. We are starting to run long here, but I just had
one quick question or concern. And that was, having been in
charge of maintenance in a steel mill I know when there is a
lot of budget pressure it is easy to sort of shave off the
maintenance budget. Certainly in the last number of weeks we
have been sensitive to a lot of budgetary pressures.
In addition, I believe that a lot of the maintenance
requirements have been sort of moved out of the public domain
in a way. I guess it is just a thought or a concern that we
make sure that, you know, you are trying to keep a 300-
something ship Navy, you have got to keep up on the
maintenance, too. I hope that that is being balanced carefully.
It might be something that we need to look at just to make sure
that we are not shaving that too tight.
Admiral McCullough. Yes, sir. Thanks very much for that
statement.
We look at maintenance very carefully. And as we talk about
a 313 ship floor, as we go forward, two-thirds of that 313 is
sitting at the pier right now. And if we don't get our ships to
their estimated service lives we will never achieve the 313
floor structure plan.
In the current budget request we have funded or requested
funding for service ship maintenance to a level of 96 percent
of what we perceived the requirement is. And when we looked at
the entire portfolio and the risk we were taking with respect
to procurement and manpower and ops and maintenance, that four
percent we believed was acceptable risk.
But absolutely, sir, we look at that. We think it is very
important to do the right maintenance on the ships at the right
times. And I would tell you, as part of our 2009 execution year
challenge, we have curtailed some operations to continue to
fund maintenance availabilities. And that is the way we view
that, sir.
Mr. Akin. I appreciate your keeping that kind of balance in
the whole thing. Because there is so much pressure for
platforms and new technology and all that kind of thing. And,
as you know, if you let maintenance get away from you, then it
can really eat you alive. Because it is a preventive thing. And
you didn't catch it early and now you have got to tear
something all to pieces in order to get into some part you have
got to change.
Thank you, Mr. Chairman.
Mr. Taylor. The Chair thanks the ranking member.
Gentlemen, I want to compliment you on what I think has
been one of the better presentations that I have seen in my
time in Congress.
Secretary Stackley, I think we are lucky as a Nation to
have you where you are. And I would leave you with just one
last thought. I am always amazed at the caliber of our officer
corps and our enlisted corps. We are, as a Nation, are blessed.
I think, though, that, over the years, the most glaring
weakness in our Department of Defense has been the acquisition
force. It has been my observation that a grounding, no matter
how slight, is a career-ending move for a ship captain. I would
hope that a program that runs over budget or fails to be
delivered on time, that we, as a Nation, would take the same
attitude towards those programs, that we could instill in our
acquisition force the need to--with a Nation that is going to
run a $1 trillion deficit this year and with a series of
programs that have run late and well over budget, I would hope
that one of your goals would be to get within your acquisition
force that type of a mentality that we are going to be on time,
we are going to be on budget, and we are going to get the best
value for the fleet, for the sailors, and for the people who
pay for that.
Secretary Stackley. Sir, can I offer a comment?
Mr. Taylor. Absolutely.
Secretary Stackley. Thank you.
Let me first say that, yes, sir, we have absolutely--we
have to change course in terms of where we are going regarding
cost and schedule performance on our major defense acquisition
programs.
As far as the caliber of the individuals that you have
working for you day in and day out to achieve that, we have
top-notch individuals who are working hard. One of the
challenges that we face is that in the course of the past 15
years we have taken the acquisition and work force and reduced
it by 55 percent. So now what you have done is you have taken
hard-working individuals and you have stretched them way too
thin. So the Congress recognizes that, and the Department
recognizes that, and we are taking the steps necessary to start
the rebuild.
The Department of the Navy has 5,000 acquisition workforce
members that we are going after in the FYDP. We have got it
identified in terms of critical skills, where do we need them
placed, and we are actively going after getting the best folks
we can to come into the government to help us take on that
task.
Mr. Taylor. Mr. Secretary, again, I think we are lucky to
have you where you are. I very much appreciate the attitude you
are taking towards this, and we are going to work with you to
make that happen.
If there are no other questions, then the subcommittee
stands adjourned.
[Whereupon, at 11:46 a.m., the subcommittee was adjourned.]
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A P P E N D I X
May 15, 2009
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
May 15, 2009
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