[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
[H.A.S.C. No. 111-129]
HEARING
ON
NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 2011
AND
OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS
BEFORE THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE HEARING
ON
BUDGET REQUEST FOR DEPARTMENT OF THE NAVY SHIPBUILDING ACQUISITION
PROGRAMS
__________
HEARING HELD
MARCH 3, 2010
[GRAPHIC] [TIFF OMITTED]
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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
2010
Page
Hearing:
Wednesday, March 3, 2010, Fiscal Year 2011 National Defense
Authorization Act--Budget Request for Department of the Navy
Shipbuilding Acquisition Programs.............................. 1
Appendix:
Wednesday, March 3, 2010......................................... 51
----------
WEDNESDAY, MARCH 3, 2010
FISCAL YEAR 2011 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
Blake, Vice Adm. John Terence, USN, Deputy Chief of Naval
Operations for Integration of Capabilities and Resources....... 7
Flynn, Lt. Gen. George J., USMC, Deputy Commandant, Combat
Development and Integration, and Commanding General, Marine
Corps Combat Development Command............................... 9
Heebner, David K., Executive Vice President, Marine Systems,
General Dynamics Corporation................................... 34
Petters, C. Michael, Corporate Vice President and President,
Northrop Grumman Shipbuilding.................................. 32
Stackley, Hon. Sean J., Assistant Secretary of the Navy for
Research, Development and Acquisition.......................... 4
APPENDIX
Prepared Statements:
Akin, Hon. W. Todd........................................... 59
Heebner, David K............................................. 91
Petters, C. Michael.......................................... 75
Stackley, Hon. Sean J., joint with Vice Adm. John Terence
Blake and Lt. Gen. George J. Flynn......................... 61
Taylor, Hon. Gene............................................ 55
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
Mr. Taylor................................................... 109
Questions Submitted by Members Post Hearing:
[There were no Questions submitted post hearing.]
FISCAL YEAR 2011 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, Wednesday, March 3, 2010.
The subcommittee met, pursuant to call, at 2:35 p.m., in
room HVC-210, Capitol Visitor Center, 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 hearing will come to order.
Good afternoon, and I want to thank you all for coming. I
apologize for the delay in the start, but we had some votes on
the House floor. Today the subcommittee meets in open session
to receive testimony from the Department of the Navy's
witnesses on the shipbuilding budget request for the fiscal
year and the proposed shipbuilding plan for the next 30 years.
Because the shipbuilding plan has such a large effect on
the shipbuilding industrial base, the subcommittee has
requested that the leaders of our two largest shipyards appear
to discuss how their plan in their view affects the industrial
base and if they are willing to recommend changes to Congress
on ways to achieve the goals of the shipbuilding plan in a more
cost-effective manner.
First, I would like to make some observations on the
shipbuilding plan. Some of you may remember a few years ago I
referred to the shipbuilding plan of the Navy as pure fantasy.
Shipbuilding plans in the past have been full of unrealistic
assumptions about the cost of ships and unrealistic assumptions
on the amount of money the Navy would receive from the
Department of Defense to buy those ships.
Then realistic portions of the plan always started just
beyond the five-year procurement plan because the Navy was not
obligated to justify its assumptions on cost and budget in the
past five years. Today I will make a slightly different
observation.
The plan submitted by the Navy this year is not pure
fantasy as in years past, but it is possibly overly optimistic.
It is very optimistic. The plan as submitted by the Navy, if
funded and if executed within that funding, would restore the
Navy fleet above 300 ships by 2018; peak at 320 ships in the
year 2024; but return to a fleet size in the 280s by the year
2032.
The plan would maintain aircraft carriers at levels of 11,
in some years 12. The plan would not meet the Marine Corps
requirement of 38 amphibious assault ships but would hover
around the 33 ships the Navy and Marine Corps have stated is
the minimum number of ships that would meet an acceptable level
of risk. The attack submarine force goes below the requirement
of 48 boats in the year 2024, and stays below that requirement
through 2040, with a low of 39 boats in the year 2030.
Although it is very clear that the Navy has worked harder
on removing fantasy from the plan, it does not build the number
of ships at a satisfactory rate to restore our Navy to the full
capability that I believe is necessary. The Navy was clearly
limited in the development of this plan by the amount of
funding for ship construction they were provided by the
Department of Defense. Some relatively simple arithmetic
indicates that the Navy really needed about $10 billion more
per ship than was provided.
Leaving aside the issue of underfunding, the shipbuilding
plan is troubling in a few areas. First, the procurement of
amphibious assault ships is occurring in an inefficient manner.
The ship construction starts are not spaced to optimize the
workforce or its supply chain. You just cannot stop and start
shipbuilding programs and expect any cost savings in quantity
buys or in workforce familiarity. I know that the Navy knows
this, and certainly the one official in the Navy who knows it
best is sitting at our witness table today.
If the Navy has still decided to place amphibious ships in
a plan in years which ensure extra cost due to inefficiency,
this goes back to my previous point that the Navy really needed
about $10 billion more per year. If that were the only issue
with a long-term plan, it would probably be fixable, but the
real issue facing the Navy is the cost to recapitalize the
Ohio-class submarine. Billions in development costs followed by
12 years each costing anywhere from $6 billion to a high of
$8.5 billion will crush the rest of the Navy shipbuilding
account if the Navy is required to pay the bill.
The submitted plan assumes the Navy will pay all the costs
for these boats and has a very optimistic assumption that extra
funding will be available to cover some of the costs. During
the years that these submarines are funded the rest of the Navy
shipbuilding might be on life support. Minimal levels of
shipbuilding construction will occur during these years
according to this plan, and the Navy will lose over 30 ships
from the overall force from 2024 to 2034, and that is
optimistic.
I have been around here long enough to know that the
reality is increased funding will likely not be available, and
even more significant cuts in the surface fleet could occur.
On the positive side, the Navy 5-year plan is better than
any plan that has been submitted in a long time. Fifty new
ships, an average of 10 per year, is an achievable goal with
projected funding. The problem is that the Navy is
decommissioning ships as fast and, in the case of this year,
faster than the Congress can fund them. And the overall numbers
don't start to increase until 2016.
I expect our witnesses to discuss today why this has
happened and provide this committee with options to retain some
of these vessels in service while new ships are built to
replace them.
Joining us today on our first panel, the Honorable Sean
Stackley, Assistant Secretary of the Navy for Research,
Development and Acquisition; Vice Admiral Terry Blake, Deputy
Chief of Naval Operations for the Integration of Resources and
Capabilities; Lieutenant General George Flynn, Commander,
Marine Corps Combat Development Command, and Deputy Commandant
for the Combat Development and Integration.
A second panel will consist of Mr. Mike Petters, Corporate
Vice President and President of Northrop Grumman Shipbuilding;
and Mr. Dave Heebner, Executive Vice President, Marine Systems,
General Dynamics Corporation.
I want to thank our witnesses for attending. Again, I
apologize for the delayed start.
I now turn to the gentleman from Missouri, Mr. Akin, for
any opening statement he has.
[The prepared statement of Mr. Taylor can be found in the
Appendix on page 55.]
STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE FROM MISSOURI,
RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE
Mr. Akin. Thank you, Mr. Chairman.
Secretary Stackley, Admiral Blake and General Flynn, good
afternoon and welcome, and we look forward to your testimony
today.
The President's fiscal year 2011 defense budget for the
Department of the Navy represents $179 billion for
discretionary and war funding. This represents an increase of
$52 billion over fiscal year 2010 enactment levels. The news
was even better for shipbuilding, which saw an increase of $1.9
billion over fiscal year 2010 enactment levels. This is clearly
a sign that someone in the Department has gotten a message
about the value that our maritime forces bring to our current
and future security.
I congratulate you and thank you for your advocacy for Navy
and the Marine Corps personnel and programs.
With that said, I wish all the news were positive. I have
major concerns, particularly with the lack of future planning
at the DOD [Department of Defense] level and our Navy's out-
year budgets. The Navy's long-term shipbuilding plan is based
on the 113-ship force structure originally set forth in the
2005 Naval Force Structure Assessment, as well as decisions
made during the 2010 Quadrennial Defense Review [QDR], yet the
2005 Naval Force Structure Assessment did not anticipate the
Navy would be given responsibility for regional ballistic
missile defense, and the QDR appears to have largely focused on
the capabilities required for the near to midterm, not on the
capabilities required for the long term to deter and defeat a
near-peer competitor.
Indeed, long-range shipbuilding plan explicitly states in
summary, then, the QDR has resulted in revised mission
priorities to better focus the Department on the war we are in.
I am concerned that this emphasis on developing capabilities
for today's conflicts and assessing risks based in today's
operating environments puts our future force in jeopardy.
Lacking better guidance from the Office of the Secretary of
Defense, the Navy and the Marine Corps have offered their best
judgment about a reasonable ship construction profile in the
form of this 30-year shipbuilding plan. It is superior to many
previous plans in several ways, but the shipbuilding plan
acknowledges that a new force structure assessment will have to
be completed, which causes me to question whether or not we can
rely on this latest plan as a yardstick for assessing the
service's capital building requirements.
Furthermore, even though QDR states that U.S. forces must
be able to deter, defend against and defeat aggression in anti-
access environments, the long-term shipbuilding plan does not
appear to be driven by this goal. Instead, in the period that
the Navy considers most likely to be characterized by a near-
peer competitor with anti-access capabilities, our forces fall
to their lowest levels. We can't wait until that period to
attempt to recapitalize our service combatants, attack and
guided missile submarines and amphibious forces. If
shipbuilding moves too slow, it will be too late.
On a related issue, I am not convinced that this
shipbuilding plan adequately addresses the needs for ballistic
missile defense capable ships. Supposedly this will be
considered as part of the new force structure assessment. I
hope that the assessment does not shortchange the other
missions that our combatant commanders have for these ships or
destroyers, particularly our BMD [Ballistic Missile Defense]
destroyers, who are already in high demand, before the
President announced his decision to use Navy assets to defend
Europe rather than the ground-based system.
The Navy is being asked to support a new mission but has
not been given new resources necessary to succeed. Today I will
be interested in your perspectives on the hard choices that
were made in preparing this shipbuilding plan and whether or
not you believe the shipbuilding plan meets the Navy in a
position of strength--puts the Navy in a position of strength
to face a near-peer competitor in the far term.
On a separate note, I know our witnesses realize that I am
keenly interested in our Strike Fighter programs. Normally I
wouldn't raise this subject in a shipbuilding hearing, but
today I hope you will have a chance to discuss your ship
integration plans for the Joint Strike Fighter. Too often we
overlook the requirements being levied on our ships by the
introduction of this fifth-generation fighter.
Thank you again for being here today. I look forward to
your testimony.
And I yield back Mr. Chairman.
[The prepared statement of Mr. Akin can be found in the
Appendix on page 59.]
Mr. Taylor. The Chair thanks the gentleman from Missouri.
The Chair now recognizes Secretary Stackley.
STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE
NAVY FOR RESEARCH, DEVELOPMENT AND ACQUISITION
Secretary Stackley. Thank you, Mr. Chairman, Representative
Akin, distinguished members of the subcommittee. Thank you for
the opportunity to appear before you today to address Navy
shipbuilding. And thank you for your steadfast support to
provide and maintain the Navy and, more importantly, for your
commitment to our sailors and Marines.
With the permission of the committee, I would propose to
keep my opening remarks brief and submit a formal, more
detailed statement for the record.
Mr. Taylor. Without objection.
Secretary Stackley. Today we are a battle force of 286
ships supporting global operations with arguably greater reach,
greater command of the seas than any navies at any point in
history. And while we take pride in knowing that our ships,
aircraft and weapon systems are unmatched at sea, as formidable
as our technology may be, it is the skill, dedication and
resourcefulness of our sailors and Marines that gives us our
asymmetric advantage. And it is our responsibility to place in
the hands of these young men and women the tools that they need
to conduct our Nation's business under the most stressing
conditions imaginable to win the fight we are in. And two, it
is our responsibility to provide the capabilities and
capacities to win the next fight.
The Chief of Naval Operations [CNO] and the Commandant of
the Marine Corps have outlined those capabilities and
capacities in what has been referred to as the 313-ship Navy.
And to this end, the fiscal year 2011 budget request includes
funding for nine ships, a modest but important step towards
meeting the CNO's and Commandant's requirements; important,
because this year we increased Virginia-class fast-attack
submarine procurement to two boats per year.
In 2005, then CNO Mullen challenged the program to put the
Navy in a position to be able to buy two boats for $4 billion
in 2012. And this year, with Congress's support, two for four
in 2012 has become two for four in 2011. Important because we
increased DDG-51 production to two ships in 2011, which
alongside the Aegis Modernization Program, adds both capability
and capacity to our fleet's sea-based missile defense. The
success of the Aegis system against ballistic missiles, as
demonstrated through at-sea testing, provides a solid
foundation for this mission. Important because with a
competitive down select to a single design for the Littoral
Combat Ship [LCS] later this year, our 2011 budget request
sustains an efficient build rate of two LCS ships per year for
the winning shipyard.
Congress's support for this revised acquisition strategy
has been critical to the Navy's efforts to bring much needed
stability and to improve affordability on this vital program.
Important, because this year's--with this year's request, we
significantly increase our amphibious lift capability with
procurement of an LHA-6 amphibious assault ship, and our
logistics lift capability with procurement of a mobile landing
platform and a joint high-speed vessel. Additionally, a second
joint high-speed vessel has funded another procurement army for
a total of 10 ships in fiscal year 2011.
As we look to the near term, the Navy shipbuilding plan
averages 10 ships per year while balancing requirements,
affordability and industrial-based considerations in the next
decade. We have placed aircraft carrier procurement on a 5-year
cycle, which will ensure our ability to sustain an 11-carrier
force from the delivery of Gerald R. Ford in 2015 through the
year 2040. We sustain submarine construction at two boats per
year.
We have cancelled the CGX [Next Generation Cruiser] program
because of technical risk and affordability concerns, and we
will continue DDG-51 construction, leveraging a stable and
mature infrastructure while increasing the ship's air and
missile defense capabilities through spiral upgrades to the
weapons and sensor suites.
And we have restructured the Maritime Prepositioning Force
to provide enhanced yet affordable sea-basing capabilities.
In the second half of this decade, we will need to proceed
with the recapitalization of three major ship programs. We plan
to commence procurement of the replacement for the LSD-41 class
amphibious ships, following definition of lift requirements for
this new class. We look to accelerate introduction of our next
fleet oiler. T-AO(X) [cargo ship] will bring greater efficiency
and modern commercial design to our refueling at sea
capabilities while also providing critical stability to an
important sector of our industrial base.
And most significantly, we will procure the lead ship of
the Ohio-class replacement, SSBN(X), in 2019.
The Navy's long-range shipbuilding plan fairly outlines the
challenges we confront today and for the long term in meeting
our Navy's force structure requirements; operational,
technical, manufacturing and fiscal challenges all come to bear
as we impose upon the plan greater cost realism and budget
realism. In the most pragmatic terms in balancing requirements,
risk, and realistic budgets, affordability controls our
numbers.
For different reasons, we face the same imperative that
President Franklin Roosevelt faced when he addressed America as
the arsenal of democracy. He stated, ``All of our present
efforts are not enough; we must have more ships, more guns,
more planes, and this can be accomplished only if we discard
the notion of business as usual.''
The challenge in Roosevelt's time was to increase
production at any cost. The challenge in our time is to
increase production at an affordable cost. And to this end, we
are focusing on bringing stability to the shipbuilding program,
adjusting our sights to find the affordable 80 percent solution
when 80 percent meets the needs, working across our systems
commands to improve the quality of our cost and schedule
estimates that inform our requirements decisions, placing
greater emphasis on competition and fixed price contracts. We
are continuing to improve our ability to affordably deliver
combat capability to the fleet through open architecture. We
are clamping down on contract design changes, and we have
cancelled high-risk programs.
Our goals for modernizing today's force and recapitalizing
the fleet affordably cannot be accomplished without strong
performance by our industry partners. And so it is important
that we have a clear understanding of the issues affecting
industry's performance. So we will be building upon past
studies this year to assess our shipyards, the vendor base and
the design industrial base with an eye towards capability,
capacity and productivity requirements needed by our Navy near
term and far term.
In the end, industry must perform. We will work to
benchmark performance, to identify where improvements are
necessary, to provide the necessary incentives for capital
investments where warranted, and to reward sustained strong
performance with favorable terms and conditions.
And finally, to meet our objectives, we must be smart
buyers. We have gone far in the course of the past year to
reverse the downsizing trend in the acquisition workforce. From
supervisors of shipbuilding to the warfare centers to the
SYSCOMs [System Commanders] and program executive offices, we
have added professionals in the fields of systems engineering,
manufacturing, program management contracts, and test and
evaluation.
Of course, we have much farther to go. The objective is not
merely to increase the workforce but to restore core
competencies that have slipped loose over the course of a
decade and a half of downsizing.
In sum, the Department is committed to building the fleet
required to support the National Defense Strategy, to which the
fiscal year 2011 budget request addresses the near-term
capability needs while also laying the foundation for long-term
requirements. Ultimately, we recognize that as we balance
requirements, affordability and industrial-based
considerations, it is vital that we, Navy and industry, improve
affordability within our programs in order to achieve a balance
that gives greater favor to requirements in the industrial
base.
Mr. Chairman, thank you for the opportunity to appear
before you today, and I look forward to your questions.
[The joint prepared statement of Secretary Stackley,
Admiral Blake, and General Flynn can be found in the Appendix
on page 61.]
Mr. Taylor. The Chair thanks the Secretary. I read your
statement last night. I thought it was one of the best I have
ever seen.
The Chair now recognizes Vice Admiral Blake.
STATEMENT OF VICE ADM. JOHN TERENCE BLAKE, USN, DEPUTY CHIEF OF
NAVAL OPERATIONS FOR INTEGRATION OF CAPABILITIES AND RESOURCES
Admiral Blake. Chairman Taylor, Congressman Akin, members
of the committee, it is my honor to appear before you today
with Mr. Stackley and General Flynn to discuss the Navy force
structure and shipbuilding.
Forty-three percent of our fleet is deployed today carrying
out our maritime strategy. They are projecting power into
Afghanistan, building partnerships in Africa, delivering relief
in Haiti and providing ballistic missile defense in the Arabian
Gulf, Western Pacific and Eastern Mediterranean.
We are a maritime nation, and our national security depends
upon a Navy that can keep the sea lanes free, deter aggression,
safeguard our sources of energy, protect the interest of our
citizens at home and abroad and reassure our friends and
allies. To do this, our Navy must maintain its global reach and
persistent presence while always being ready to answer the call
for our warfighting capacity wherever and whenever it is
needed.
With this budget, the Navy will continue to maintain the
maritime security of our forces, sustain a strong American
shipbuilding base and ensure our capacity for rapid global
response. In this year's budget, we plan to procure 9 ships and
an average of 10 ships per year across the FYDP [Future Years
Defense Plan].
To achieve this shipbuilding level, hard choices are
required across the Navy program. These choices reflect our
commitment to a fleet that is shaped and sized to deal with
current and future threats. The fiscal year 2011 shipbuilding
program is based upon the most cost-effective decisions to
achieve the most capable force. Across the next 5 years, the
Navy is committed to an average of $14.5 billion per year to
build an average of 10 ships a year. The challenge for us is in
procuring the required mix of ships with the right warfighting
capabilities for an affordable cost. To meet this challenge,
our shipbuilding rate will depend upon aggressive cost control
which will require both the Navy and the shipbuilding industry
to work together in partnership.
Demand for the ballistic missile defense, or BMD, capable
ships continues to increase globally. To support this demand,
we will continue to modernize the Arleigh Burke-class guided
missile destroyers to gain BMD capability commencing in fiscal
year 2010. After exhaustive analysis, we intend to spiral the
DDG-51 program to the DDG-51 Flight III. This will allow us to
develop air and missile defense radar and install it on a DDG-
51 hull. The upgraded destroyer is envisioned to be procured in
fiscal year 2016. The DDG-51 Flight IIA procurement will
restart the award for the contract with DDG-113 this summer.
New construction of DDG-51 IIA destroyers will deliver
integrated air and missile defense capabilities in new
construction ships for the first time, providing critical BMD
capacity for the fleet. Our amphibious warfare ships are key
enablers in providing forward distributed presence to support
missions ranging from theater security cooperation and
humanitarian assistance to conventional deterrence in assuring
access for the Joint Force.
The Chief of Naval Operations and the Commandant of the
Marine Corps have determined that with risk a minimum of 33
assault echelon amphibious ships are necessary to support
Marine Corps lift requirements for forceable entry operations.
The Navy remains committed to procure 55 Littoral Combat Ships.
The LCS fills warfighter gaps in support of maintaining
dominance in the littorals and strategic chokepoints around the
world. USS Freedom LCS-1 is currently deployed. Last week the
ship, outfitted with the surface warfare mission package,
achieved its first drug seizure, recovering more than a quarter
ton of cocaine. I am convinced that both the LCS ship types--
that both the LCS ship types meet our warfighting requirements
and fully support the decision to down select to a single hull.
The Ohio-class ballistic missile submarines will start retiring
in 2027 after 40 years of service life. To ensure there is no
gap in our strategic deterrent capability we will need to start
procuring the Ohio-class replacement in 2019. We are making the
appropriate investment in research and development now which is
essential for the delivery of our reliable survivable and
adaptable ballistic missile submarine intended to operate until
around 2080. The Virginia-class submarine is a multi-mission
platform that fulfills a full spectrum of requirements. Now in
its 13th year of construction, the Virginia-class program is
demonstrating that this critical capability can be delivered
affordably and on time. In fiscal year 2011 we will increase
our build rate to two submarines per year.
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 within the current prescribed timeframes.
Our carrier force provides the Nation a unique ability to
overcome political and geographic barriers for all missions and
project power ashore without the need for host nation ports and
airfields. The Navy's fiscal year 2011 long-range shipbuilding
plan addresses the requirements to support the National Defense
Strategy, the maritime strategy and the 2010 Quadrennial
Defense Review [QDR].
I ask for your support for our fiscal year 2011 budget
request and thank you for all you do to make the United States
Navy a global force for today and the future.
That concludes my remarks, sir.
[The joint prepared statement of Admiral Blake, Secretary
Stackley, and General Flynn can be found in the Appendix on
page 61.]
Mr. Taylor. Thank you, Vice Admiral Blake.
The Chair now recognizes Lieutenant General Flynn.
STATEMENT OF LT. GEN. GEORGE J. FLYNN, USMC, DEPUTY COMMANDANT,
COMBAT DEVELOPMENT AND INTEGRATION, AND COMMANDING GENERAL,
MARINE CORPS COMBAT DEVELOPMENT COMMAND
General Flynn. Chairman Taylor, Representative Akin and
distinguished members of the subcommittee, first, thank you for
your support of all our service men and women and, in
particular, for your support of our Marines and sailors.
I appreciate the opportunity to appear today to address how
the Nation's sea-based expeditionary force views its role
within the Joint Force and the requirements needed to bring
these unique and essential capabilities to the warfighter.
I am also honored to be here today with the rest of the
Naval team, Secretary Stackley and Vice Admiral Blake.
As a maritime nation, naval forces, Navy and Marine Corps
forces working together, use the sea as maneuver space and are
a key component of our Nation's capability to protect and
advance our interests around the globe. Today the key
characteristics of military forces most valued in this ever-
changing security environment are versatility and adaptability.
Since the beginning of this Nation, the Navy and Marine Corps
have demonstrated these key attributes. In recent times, the
amphibious withdrawal from Somalia in 1995; the projection of
power from the sea to Afghanistan in 2001; several responses to
natural disasters; and the Lebanon noncombat evacuation
operation of 2006 have proven the value of our investment in
these forces and their wide-ranging utility.
Today your Marine Corps is once again demonstrating its
versatility and adaptability. From Haiti to the Helmand
province in Afghanistan, we are demonstrating our ability to
respond across the full range of military operations and
proving that we are truly no better friend and, if the
situation requires, an adversary's worst enemy.
As soldiers of the sea, our unique capabilities are enabled
by the Navy's ability to provide force protection and
amphibious and preposition lift. The linchpin of our ability to
operate from the sea is our amphibious fleet. The requirement
for amphibious ships that has been agreed to within the
Department of the Navy is 38 ships. And in order to have a
balanced and affordable shipbuilding program, we must be
willing to accept risk down to 33 ships. This number gives you
the capability needed for both steady state operations and the
minimum number of ships needed to provide the Nation with a
credible sea-based power projection capability of two brigades
at an acceptable level of risk.
The recent deployment of amphibious ships shows the utility
of these platforms and their utilization. In January of this
year, of the 31 amphibious ships in the current inventory, 9
were conducting steady state operations; 7 responded to the
disaster in Haiti; 9 were in maintenance; and 6 were available
to respond to other missions.
The key to the utility of our amphibious fleet is the
versatility and flexibility built into the mix and design of
the ships. We believe this is achieved by a balanced mix of
platforms and integrated command and control, stalwart
survivability and both air-and-surface connector capabilities.
This is why we believe it is important to put the well deck
back into our largest platform at the earliest opportunity. We
also believe that adequately defining the requirement for the
LSD(X), both as a ship and as part of the overall amphibious
capability, is of vital importance to the overall flexibility
and utility of the amphibious fleet.
In an era of increasing access challenges, the ability to
operate our expeditionary forces from a sea base is a required
and valued tool in a joint warfighting tool kit. The minimum
sea base requirements that are needed now are the ability to
operate without a port, the ability to conduct selective
offload, and the ability to conduct at-sea transfer of
equipment. The original Maritime Prepositioning Force Program
(Future) was to provide these capabilities along with organic
command-and-control connectors, medical maintenance and
building.
The Maritime Prepositioning Force (Future) program in
current vision is not affordable at present. Working with the
Department and Navy leadership, we found a way to provide some
of these capabilities at an affordable cost and thus
capitalized on the investments already made in our legacy MPS
[Maritime Prepositioning Ship] squadrons. Accordingly, we are
going to add a mobile logistics platform and T-AKE platform to
each of our squadrons. This will give us the capability to do
the first three of these and envision capabilities of the sea
base at an affordable cost.
Again thank you for the opportunity to be here. I look
forward to answering your questions.
[The joint prepared statement of General Flynn, Secretary
Stackley, and Admiral Blake can be found in the Appendix on
page 61.]
Mr. Taylor. The Chair thanks you very much, gentlemen.
The Chair now recognizes the ranking member, Mr. Akin.
Mr. Akin. Thank you, Mr. Chairman.
I had a couple of different questions here. One was the
result of a trip I took just a week or so ago. And I think that
we had talked about being sensitive to the workforce and
smoothing the workforce and trying to buy our ships in the most
strategic way to keep our costs effective. I guess the question
that came up was, particularly, we have I think a plan for
building three MLPs [Maritime Landing Platforms] on, I believe,
a 2-year set of centers, that would be 2011, 2013 and 2015. As
we talked to people in the shipyard, they were saying it would
be much, much better from a demanding of the work load, so you
could keep an equal level of manning for building these ships,
if they could be built on 1-year as opposed to 2-year centers.
So I guess my first question is, is that something that throws
the whole budget into chaos to do that, or is that something
that, if we could get some reduction in cost, that that might
be a possibility?
Secretary Stackley. Let me first describe, we have the
ability to move right into the first MLP in 2011 because of the
advance work that had been done by NASSCO, the shipyard that
has that contract. And so we have a nice dovetailed production
plan following the T-AKE production moving into MLP.
Traditionally--more than traditionally--the Navy has
strived to provide a gap year between a lead ship and a first
follow ship so that as you are building your first of class, if
you run into design technical issues that need to be resolved,
that you have more time to incorporate those corrections into
the first follow ship. You described the one, I believe you
described it as 1, 3, 5, one every other year. So, in fact, we
do have another gap between the first follow ship and the third
MLP. And that is, frankly, a concern with regards to the
stability of the workforce at NASSCO.
Of our major shipyards, NASSCO is the one that is having to
manage the greatest gap in workload. We look at the MLP as
providing a base workload for the shipyard, but we recognize
that MLP alone is not sufficient workload for NASSCO to be able
to maintain the level of performance that we are seeing today.
So step one is, establish a base; step two is establish
opportunities for NASSCO to compete for additional work.
Mr. Akin. I guess my question was, if you took the ships
scheduled in 2015 and moved it over to the 2012 spot, so you
would have 2011, 2012, 2013 instead of 2011, 2013, 2015. That
is assuming that they could do that without having to have a
lot of modifications between 2011 and 2012 on the ship, I
understand that.
Secretary Stackley. Yes, sir. That becomes a trade between
what is affordable inside of the budget in 2012, closing that
gap year, which we do prefer to have a gap just to ensure that
production--design is stable, production is off to a smooth run
before you immediately start to bring in the first follow ship.
And those are the competing considerations.
Mr. Akin. From a finance point of view, does it throw the
budgeting requirements off though as well by moving that? Is it
something you have to pay for earlier in the plan?
Secretary Stackley. It is about a half a billion dollar
ship with certain assumptions, and the assumptions include that
there is other work in the shipyard, and the three MLPs don't
stand by themselves in that regard. So moving it from 2015 to
2012 would be about half a billion dollars added in fiscal year
2012.
Mr. Akin. Thank you. That was the first question.
The second is a little bit more general. And that is, as we
take a look at the potential of near-peer competitor and a
denial to access, as I took a look at specific areas of where
our access would be denied, that is a ballistic kind of threat,
a cruise type of threat or submarine kinds of threats, my
concern was that it seemed that we had at least potentially
some significant challenges in all three of those areas.
And I guess my question, with large surface combatant force
levels decreasing from a high of 96 down to a 60s and 70s kind
of range; attack submarines from a high of 55 down to 39, with
maybe sustained levels of 40; cruise missile submarines would
be disappearing entirely. Recognizing those kinds of threats I
guess I am curious whether, are we confident that this force
could deter or defeat at low or moderate risk a near-peer
competitor with that anti-access capability? I am thinking--I
suppose you know what I am talking about. I am thinking of
those charts of solid fuel missiles that we are not too good at
stopping and certain wave skimmers that can dodge and weave a
bit and increased range on submarines and things like that.
Does it seem like there is a window here where we have to be a
little concerned?
Admiral Blake. Sir, if you look at it, several of the
reasons which you just articulated are the reason why we went
to two submarines per year for the Virginia class. It is also
why we are accelerating our ballistic missile defense piece,
not only on the Navy side, but General O'Reilly is also doing
that on the ballistic missile agency side of the equation. And
additionally, if you look at the entire spectrum----
Mr. Akin. By the way, do they work on that IIA, or is that
a Navy, or is that the air project?
Admiral Blake. It is a IIA, sir. I deal with General
O'Reilly from the BMD perspective on the Navy side, but then he
also has his funding which he does.
Mr. Akin. So do you do the IIA, or does he do the IIA,
Standard Missile Block IIA?
Admiral Blake. We do Standard Missiles Block II and Block
III and the SM-3, sir. But they also do them. It is a shared
line, if you will.
Mr. Akin. Okay thank you.
Admiral Blake. But to go back to the point, that was one of
the reasons, as we truncated the DDG-1000 and went to the DDG-
51, was the fact that we wanted to get that ballistic missile
defense [BMD] capability out there. And as I mentioned in my
statement, with the 2016 ship, we are going to be putting out
the first ship built from the ground up if you will that is
going to be BMD capable. So our ships are, as you know, multi-
mission ships, and the idea was that we were going to deal with
the anti-access piece, as you mentioned ASW [anti-submarine
warfare] and BMW, and that is exactly how we are approaching
it.
Mr. Akin. I hear what you are saying. What you are saying
is, you are wrapping up the submarines, and you are trying to
wrap up the destroyers.
Admiral Blake. Yes, sir. And we are.
Mr. Akin. Right. The only thing is that your destroyer
doesn't do you much good until you get that new higher-powered
missile on it pretty much.
Admiral Blake. Well, actually, sir, we are taking, if you
will, sort of a three-pronged approach. We have got the Aegis
system at sea, and we currently have 21 ships in the inventory
that are capable of doing BMD. By the end of the FYDP, we will
have 27 out there capable of doing it.
So we are approaching it not only from new construction; we
are also approaching it from ship sets. We are buying, if you
will, BMD-capable ship sets which we then put on those--put on
the ships that are currently in the fleet in order to make them
BMD-capable. There are two varieties. One is called the 3.6;
one is called the 4.0. And they give us varying capabilities.
And the idea--and the third piece of it is that we are going to
push out in fiscal year 2015 what we are calling Aegis Ashore.
So we are going to have a piece out there, so it is going to
be, if you will, a three-pronged approach. You will have Aegis
Ashore; you will have the BMD piece on the ships that we
currently have in the fleet, we will be upgrading them; and
then you will start to deliver the new ships from the ground up
starting in 2016.
Mr. Akin. Okay. Thank you.
At last, I couldn't resist this last little question here,
Secretary Stackley. It is a little off topic maybe. But could
you update me on the status of the F/A-18 multi-year effort? Do
you think the 10 percent savings offered by Boeing was a good
deal, first? And what is the timeline for entering into a
multi-year contract? That is assuming that there is one. And
why is it that the Secretary of Defense is not more eager to
enter into the multi-year when it meets that 10 percent
threshold that he mentioned in HASC [House Armed Services
Committee]?
Secretary Stackley. Let me start with the 10 percent
savings, the question there. We do not have a priced proposal
from Boeing that we can state with clarity that is 10 percent
savings. What we have is a letter of commitment for a not-to-
exceed value that we will use to commence negotiations with a
contractor. So we are starting off with a not-to-exceed value
that is based on Boeing's estimate for single-year procurements
level of savings. The Secretary of Defense is supporting us
going forward with this because there is promise here. And so
the Cost Assessment Program Evaluation Office is going to go
through the required cost analysis to validate that in fact we
can achieve at least the 10 percent savings that we have
established here as the benchmark while we in parallel proceed
with negotiation of the contract.
So we are pushing both efforts in parallel, and the front
end of those activities are common in terms of fact finding and
pricing data, working closely with Boeing. And so I think we
have got a lot of momentum in this area. We are working at an
aggressive time line, but we are giving it our full emphasis
and putting the first team on this.
Mr. Akin. That is encouraging because it seemed like the
last week or two ago, I heard that we were going to be fine for
the March deadline, and all of a sudden that slides, and they
are kind of going, what in the world is going on?
Secretary Stackley. Well, we received the letter of
commitment on the 22nd of February. And in order for the CAPE
[Cost Assessment and Program Evaluation], the cost assessment
group, to do a valid cost analysis to meet, frankly, the multi-
year statute, they need more than that amount of time to
complete the analysis.
Mr. Akin. I wish they had said that a couple weeks ago, but
thank you. That is very straightforward.
Thank you, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman from Missouri
and now recognizes the gentleman from Washington State, Mr.
Larsen.
Mr. Larsen. Thank you, Mr. Chairman.
Either for the Secretary or Admiral Blake, I want to give
you a quick short tale of two populations of Boomers. In 2019,
the Baby Boomers come flooding into the Social Security and
Medicare systems. As a result of that, without other changes
made in the structural budget of the Federal Government, we are
going to see a large expansion of cost in the Social Security
and Medicare system, again absent of any changes, that will
consume, begin to consume over time larger and larger
percentages of the entire Federal budget.
That may sound very familiar to you, because it seems in
2019, there is another tale of another set of boomers that come
into the Navy's shipbuilding budget, and it will begin to
consume larger and larger percentages of the Navy's
shipbuilding budget at the expense, potentially, of other
shipbuilding alternatives. I am on the Budget Committee, so I
won't ask you to address what we are going to do about the
first set of Boomers.
The second set of boomers, I am very interested in hearing
your opinions on how we are going to address this cost,
marginal additional cost, in 2019, of this new class to replace
the Ohio, given--now, I know you have a plan for it, but I am
curious if you actually have received commitments from OSD
[Office of the Secretary of Defense] and OMB [Office of
Management and Budget] to advocate for the level of funding
that you need, starting in 2015 and then eventually into 2019,
to do what we want to do on destroyers and on aircraft and all
the other lines in the Navy and on the Ohio-class replacements.
And if we haven't received those commitments, how realistic can
we assume the shipbuilding plan with regards to the Ohio-class
replacement is going to be?
Mr. Secretary.
Secretary Stackley. Let me start with the construction of
the 30-year plan that brings the boomer into the picture. In
the past, in the past, the Navy had not included the cost for
that program inside of the 30-year plan. This year, in doing
that, it does a couple of things. It brings the problem front
and center in terms of the pressures and the challenges that
that program places on the total shipbuilding account. And we
work very closely with OSD in determining, the best I can
describe it is a notional top line because this is well beyond
the FYDP, a notional top line for our shipbuilding account, as
we start to march towards those years.
And so what you see with regards to the total funding level
for shipbuilding beyond the FYDP, that was coordinated with
OSD, and it will continue to be revisited in each budget cycle
as those years move inside the FYDP, while, in parallel, we
also work the process of going from what we have today, which
is an AOA [Analysis of Alternatives] under review at OSD, come
through the nuclear posture review to continue to inform the
requirements and then get into the actual requirements
definition, the R&D [Research and Development] efforts that go
from requirements to design and then ultimately to
construction.
Mr. Larsen. Admiral Blake, anything to add on that?
Admiral Blake. I would just say, sir, the Department
recognized the fact that, when we went into the budget, there
were two assumptions made. The first is that it would be
fiscally informed. So if you look at the 30-year shipbuilding
plan, over the entire 30 years, it is at a $15.9 billion level.
You absolutely point out the area where the high point occurs,
when the SSBN(X) buy starts, and you will see that that goes up
to $17.9 billion. That was recognized by the Department, and
the position taken was that we would again continue to visit
this.
And as Mr. Stackley pointed out, in the past, we have put
the SSBN(X) above the top line. It just sat there. This year,
when we put the plan together, we brought it within the top
line.
Mr. Larsen. Thank you.
So Secretary Stackley, the AOA, are you suggesting that
there are other alternatives we are considering with regards to
that element of the triad within the context of the nuclear
posture review? Is that what I gather you are saying?
Secretary Stackley. Within the AOA, if you assume the
boomer is part of the triad, you still have a wide range of
alternatives that you want to evaluate under the definition of
a boomer in terms of everything from the size of the missile
tubes to the number of missile tubes; you want to see what
technologies you can leverage from the existing platforms, as
well as bring to bear what we know today regarding threats,
obsolescence and new technologies.
Mr. Larsen. Well, my time is done. I appreciate your
answers.
And Mr. Chairman, I just suggest maybe this is something we
can explore further as we are going through the budget.
Mr. Taylor. Mr. Larsen, it is an excellent line of
questioning. We do intend to pursue your line of questioning,
hopefully in a separate hearing. Because of the sticker shock
of the Ohio-class replacement, maybe it would make sense to do
something with the Virginia class. But we are going to pursue
that. That was an excellent line of questioning.
The Chair now recognizes the gentleman from Virginia, Mr.
Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Secretary Stackley, Admiral Blake, General Flynn, thank you
so much for joining us today and thank you for your service to
our Nation.
In looking at the Navy's budget, I am generally pleased. I
think it is a good start down the road of where we need to go.
I guess that I still have some concerns about the budget in the
QDR [Quadrennial Defense Review], in looking at where does it
leave our force structure out into the future. It seems like to
me that our Navy five years down the road is going to look
almost exactly like it does today, and I am concerned that
those folks that wish to do us harm, their navies are not going
to look the same five years from now. So I am concerned about,
where does that leave us?
In addition to the near-term focus, I think there are some
further strains on our naval forces in adding the ballistic
missile defense mission to our fleet in trying to figure out,
how are we going to make sure that we have the ships to do the
regular missions plus the BMD mission? And if the shipbuilding
budget itself doesn't increase, I don't see a 313-ship Navy. I
see more like, and that is 30 years down the road, I don't see
a 313-ship Navy; I see more like a 275-ship Navy.
So I am concerned about the funding aspects of that and
where it leaves us in the long term. I think the plan that the
Navy has laid out is a good one in some aspects, but I am also
concerned about the resources necessary to get to that 313
within a reasonable period of time. And that leads me to this
line of questioning.
In developing the future year's defense plan, can you tell
me what consideration was given to the impact on the core
shipbuilding industrial base? And specifically, why do we seem
to be pushing funding off for the more expensive ships into
future years into the later portion of the 30-year shipbuilding
plan.
Secretary Stackley. Let me start with the second question
first. In developing the shipbuilding plan, we have done some
serious restructuring in terms of, what was the program on
record? I described in my opening remarks that we have
determined that the CGX, which was planned for 2011, it was not
feasible in 2011. That was going to be an extraordinarily
expensive ship based on technologies that are simply not mature
in 2011. And so we moved to a more affordable approach
spiraling through the DDG-51 class. Now, we ultimately have to
go beyond today's level of missile defense capability that is
in the 51 class, which is why we have continued to move forward
on development of the air and missile defense radar technology.
So that is an ongoing development. And those two intercept in
about 2016 in terms of maturity of that technology and
spiraling of the 51.
So I believe Admiral Blake referred to a Flight III DDG in
the 2016 timeframe. That simply reflects when that technology
is available. We, frankly, would like to get there sooner. The
Maritime Prepositioning Force (Future), we described
restructuring that program for a more affordable enhanced sea-
basing capability, building off of our MPS today. That, again,
was driven by affordability and looking for that solution that
balances the requirement, cost and, frankly, looking for what
they call a sweet spot or knee in the curve, and that is how we
have arrived at today's construct for the Maritime
Prepositioning Force.
The next two programs that I touched on in my opening
remarks, the replacement for the LSD-41 class, the LSD-41 class
will be with us until the mid-2020s. So, in fact, when we look
at that program starting up in 2017 in a 30-year plan, that is
ahead of need. And so we are struggling between recognizing
that we are going to have the challenges going through the
period in which the Ohio-class replacement is being built, and
that is why you see a build plan that is earlier than required
and stretches out, trying to work within our top line
constraints but yet not allow the amphibious force structure to
dip too low. So it is looking for that balance.
T-AO(X) was the other program that is just beyond the FYDP.
Again, that is ahead of need. The existing T-AOs start retiring
about 2026, and so this is trying to pull T-AO to the left,
looking again at industrial base consideration for that sector
of our industrial base and also looking at an opportunity to
modernize that force, some efficiencies that we can gain there.
And the other major new start, of course, is the Ohio-class
replacement which stands by itself in terms of 2019, need to
start procuring then to support 2017 retirement.
Mr. Wittman. Thank you.
Mr. Taylor. The Chair now recognizes the gentleman from
Connecticut, Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman.
I just want to follow up a little bit on what Mr. Larsen
was probing. And I know the chairman is planning a hearing
specifically on the issue of the Ohio-class replacement. It is
pretty clear that is going to be a topic of focus for this
subcommittee for this year and years to follow.
But just sort of moving back from the long-range question,
which Mr. Larsen asked, sort of right to the immediate future.
The language that accompanied the budget document about the
proposed spending for Ohio design work was pretty strong and
emphatic that there is no leeway in this plan to allow a later
start or delay in the procurement plan. And I guess the one
question I wanted to ask is, of that $672 million which was put
in the budget, I mean, is that going to potentially give us
some flexibility or some options for this program as it moves
along? And why the urgency?
Secretary Stackley. Let me start; 2019, I think everyone
understands the urgency there. With the first retirement in
2027, we have to deliver the Ohio-class replacement in the 2027
timeframe to have her on station 2029. So we view that as a
national priority; 2019 then is a well-defined procurement
year.
The R&D stream that precedes that covers several aspects.
One, we have to go from defining a requirement to not just the
technology or capability that will meet the requirement, but we
also have to look at some of the manufacturing challenges that
we have to work our way through because Ohio was built a
quarter century ago. And so there are a lot of unique aspects
associated with Ohio that you don't see in other submarine
design and construction that we have to recreate those
capabilities. And so that is very much on the front end, so
that, by the time we get to the procurement years, those
manufacturing processes and facilities that have to deliver
these pieces of hardware for the boat are mature enough that we
have retired the risk.
So there is a manufacturing design piece. There is a
technology piece, and then there is the reactor piece. So we
have reactor design activities; we call it rest-of-ship design
activities, manufacturing and technology activities ongoing
today to retire risk so that when we get into 2019 procurement,
we do not suffer first-of-class issues, but in fact, we have
got a reliable schedule so that the SSBN(X) can replace the
Ohio on station.
Mr. Courtney. And I guess the question of--I mean, there is
no--I think it is pretty clear that there are Members here that
are sort of asking about whether or not we need to do it
exactly the way it is sort of being proposed. I mean, will that
early start of design give us some at least answers to that
question about whether there are other alternatives?
Secretary Stackley. Yes, sir.
In the near term, I described the AOA that is under review,
the analysis of alternatives. We have what is referred to as a
milestone A with OSD later in the spring. And so between now
and milestone A, we will continue to work the details inside of
the AOA, as well as work the, I will call it the spend plan,
associated with the R&D that supports that long-term schedule.
This is--you know, the significance of this investment requires
that more than just a program office, more than the SSP
[Strategic Systems Program] office are involved in the
decisions associated with these design details. So there is
going to be significant amount of oversight to ensure that we
are investing the right dollars for the right capability at the
right time to meet that mission.
Mr. Courtney. Thank you.
Actually some people argue that even deserves its own
special line item in the budget, but that, again, may be a
discussion later.
Secretary Stackley. I will let Admiral Blake take that one.
Mr. Courtney. I have a few seconds left, and this is
something completely different.
Admiral Roughead, when he was before the full committee,
actually made a pretty powerful statement about the issue of
alternate engines and whether or not it is feasible to have two
different types of engines on aircraft carriers for the F-35.
And I wondered if you wanted to expand or maybe the Admiral did
in terms of the Navy's position regarding that issue.
Admiral Blake. If you go to the alternative engine, what
you end up with is two complete infrastructures on board a
single unit and then you have--if you have those two systems
there, then what you are dealing with is you are dealing with
two complete lines, if you will. And so that would be one of
the concerns that you would have if you had an alternate engine
out there. And therefore, it would not be considered prudent,
if you will, and I think the CNO brought that up during his
remarks and that is why he took the position he did.
Mr. Courtney. Thank you. Thank you, Mr. Chairman.
Mr. Taylor. The Chair now recognizes the former chairman of
this committee, the gentleman from Maryland, Mr. Bartlett.
Mr. Bartlett. Thank you very much.
Mr. Secretary, I understand that the 1000 has now breached
the Nunn-McCurdy rules for per-unit cost growth?
Secretary Stackley. That is correct, sir.
Mr. Bartlett. The Weapon Acquisition Reform Act of just
last year sets a very high bar for proceeding with a program
rather than terminating it following this kind of breach. As
you may remember, the 1000 was originally going to be a 32-ship
class, and then its cost went up. Then it went to a seven-ship
class, and then it ended up as a three-ship class. And we were
told that the 1000 program was truncated because the
requirements had changed and the DDG-51 with upgrades could
better provide capability against this changed requirement.
In light of this, what is the correct path forward relative
to the 1000?
Secretary Stackley. Let me start with the reduction from
the program from 78 ships to 3 ships. The decision to truncate
the program was made last year and was announced by Secretary
Gates with his budget statement in April of 2009. It was after
careful consideration of not whether the 51 could meet the DDG-
1000 requirements, but careful consideration of competing
requirements between the need for increased air and missile
defense and the capabilities that DDG-1000 brings which is more
closely associated with surface fires and operations in the
littorals.
So the decision was made that the priority for the
Department is to go towards increased air and missile defense
and that the DDG-1000 program then, the land attack
requirement, that would be truncated to a three-ship program.
So the requirement for DDG-1000 did not go away, but the
priorities were placed on air and missile defense.
So when we decided to truncate the DDG-1000 at three ships,
we continued to consider the platform to be a platform to meet
the future surface combatant requirements for missile defense.
Admiral Blake referred to the study that was conducted in the
course of the past year. As we evaluated that platform, we
determined that the best alternative was to spiral the 51
program in the mission area.
So as the budget came forward, having decided to truncate
the DDG-1000 to three ships and to not use that platform for
air and missile defense, then it became clear that there would
be a Nunn-McCurdy for each, which was driven not by cost
increases to the program associated with performance, but
rather by costs that have been incurred in the program
predominantly through research and development that when you
divide those costs over three ships as opposed to over seven
ships, now mathematically, in fact, you do have a breach.
So this does not reflect having to increase investment in
the program to continue it. In fact, what we have done is we
have reduced investment in the program through the truncation
and the balance of funding is to complete the three ships in
the budget.
Mr. Bartlett. Our shipbuilding plan acknowledges that we
will be building just enough ships to sustain our industrial
base. If the cost of these ships go up--and that may very well
be true of the SSBN--then we will be building fewer ships. What
confidence do you have that we will continue to keep six major
shipyards viable?
Secretary Stackley. Let me first address the part of the
question referring to the costs going up.
We have----
Mr. Bartlett. Assuming, sir, the costs as they always may
go up in the future and if we are now building just enough
ships to barely maintain the industrial base, if the cost goes
up, obviously unless the top line goes up, we will be yielding
less ships. And my question is, what kind of confidence do you
have that we would be able to keep six major shipyards viable?
Secretary Stackley. Yes, sir.
Let me first describe that as we put together a
shipbuilding plan, we take a close look at what we refer to as
workload curves that show the projected workload across not
just the six major shipyards, but also other shipyards that are
building ships for the Navy. And clearly certain shipyards have
a very healthy workload looking into the future.
We do have a couple of yards that we are quite concerned
with. We talked earlier about NASSCO and its projected
workload. We keep a close eye on our surface combatant
builders. We have our nuclear yards that frankly are very solid
workload going forward, and our amphib and auxiliary yards.
Nuclear yards are in good shape in terms of workload.
Surface combatants we are keeping a close eye. We look at
completing the three DDG-1000s, go to the DDG-51s and
ultimately getting back to a status on the 51 program where we
can reengage in a multi-year which helps provide stability for
those yards. Amphibs and auxiliaries, we have three yards that
historically have built amphibs and auxiliaries. And between
those three yards, two yards, the work yard is of concern.
I described in my opening remarks that we are going to
engage in a shipbuilding industrial-base study and a
significant part of that industrial-base study is to get to the
heart of your question exactly, so that as we go forward in POM
12 [Program Objective Memorandum for fiscal year 2012] and we
revisit the shipbuilding program as we do each year, we can
have most current information with regards to not just the
impact of the Navy program, but other work at those shipyards
and what that means in not just their viability, but also our
costs.
Mr. Bartlett. Thank you, Mr. Chairman.
Mr. Taylor. The Chair now recognizes the gentlewoman from
Maine, Ms. Pingree.
Ms. Pingree. Thank you very much, Chairman Taylor. First, I
would like to start by thanking all of you for your service to
the country, and Secretary Stackley, it is good to see you
again, although I prefer seeing you at the shipyard in my
district, Bath Iron Works, and you are welcome back any time
for a visit and, of course, a lobster.
I want to go on with--actually you were talking about this
a little bit, and I know in your written testimony, even though
I came late, said capable ships supported by effective
industrial base have been the decisive element during war,
crisis response, and peacetime operations for more than two
centuries. Several Navy reports have agreed with this statement
and have gone on to say that in order to maintain the two major
surface combatant shipyards a minimum of three DDG-51s must be
procured each year along with additional work.
So my question goes back to this workload industrial
capacity one. If the DDG-51 procurement rate is on average 1\1/
2\ per year, what impact will it have on this decisive element?
And I am certainly thinking of our yard and the challenges that
we face.
Secretary Stackley. Yes, ma'am.
Not to repeat the discussion I just had with Representative
Bartlett, but the surface combatant build rate is something
that we are keeping a very close eye on. It involves not just
the shipbuilders, but also the combat systems suppliers because
that industrial base is much broader than just the shipyards.
We do not have an acquisition strategy that addresses going
beyond the ships that are currently budgeted and requested in
2011. We do have a plan to deliver that acquisition strategy
this summer as we work it through OSD, and we widen the
aperture beyond the two-one-two-one-two-type profile that you
see in the 30-year shipbuilding plan; and by widening the
aperture, we are looking at beyond just the continuation of the
51 construction at those two yards to determine what are the
critical skills, what are the capabilities and capacities that
we need to preserve to ensure that we have this unique
capability at these two shipyards.
Ms. Pingree. I appreciate you are looking into that, and I
certainly will look forward to your further study.
Going back to another question you talked about a little
bit on the DDG-1000, can you comment a little bit on the
importance of leveraging the DDG-1000 technologies for other
future Navy platforms once the DDG-1000s are operational?
Secretary Stackley. Yes, ma'am. The DDG-1000 frankly broke
a lot of ground with engineering development models, new
technologies that it is bringing to the surface fleet. Perhaps
most significantly, I would highlight reduced manning concepts
that--not just the technology but how we will operate a ship at
those manning levels. We will be looking to bring those
concepts forward to the extent practical. With reduced manning
comes a lot of technologies to reduce workload for the crew. So
that has high interest for further applicability.
A very clear crossover is in the combat systems arena where
the dual band radar for the DDG-1000 is also the dual band
radar that is going to go on the CVN 78 class. So that has
direct applicability. And when we look at the Flight III DDG-51
and the studies that we performed there where we took a look at
the threat and the requirements, we looked very closely at the
MFR [Multi-Function Radar] radar on the DDG-1000, and we
believe that that will be the best solution for the DDG Flight
III when we consider future threats.
So as we move forward with the air and missile defense
radar, we are also looking at something like a dual band radar
capability with an MFR or what is referred to as a SPY-3 radar
for the future DDG-51.
Ms. Pingree. Just to follow up on that a little more,
Admiral Blake.
Despite the fact that as we talked about earlier, the DDG-
1000 program has been truncated to three ships, can you talk a
little bit about the operational importance of having these
three ships in the fleet and what valuable technological
lessons the Navy will gain from having these ships?
Admiral Blake. Absolutely. One of the principal seams this
ship is going to fill is the 155 gun which it carries is going
to be a critical seam-filler for the naval surface fire
support. It has a long-range land attack projectile, and it
will be used to engage targets deep inland in order to be able
to support Marine operations. And that is a critical piece.
If you look at our DDG-51s, they have a 13-mile gun. And so
this is going to give us a significant force multiplier out
there. It is going to give us precision fires, volume fires at
a longer range. So it is an absolutely critical piece for naval
surface fire support. Naval surface fire support is made up of
a triangle, and three elements in it are naval surface fire
support, tactical air, close air support, and then organic
fires which come from the Marine Corps piece of the puzzle.
So those three together give us a significant force
multiplier when we are doing forcible injury.
Ms. Pingree. Thank you. Thank you, Mr. Chair.
Mr. Taylor. The Chair thanks the gentlewoman.
The Chair now recognizes the gentleman from Virginia, Mr.
Forbes, for 5 minutes.
Mr. Forbes. Thank you, Mr. Chairman. I hear bells going off
for some votes. I will try to be brief.
General Flynn, I saw you in a hallway a little bit earlier
coming down here and I was wondering why you were here so
early. And after I left, I looked at my watch and realized it
was time for our hearing.
The chairman mentioned earlier about the fact that he did
not think that this 30-year shipbuilding plan was a fantasy,
and I have enormous respect for him and hope he is right. But
when Secretary Gates testified, that is exactly the word he
used to describe the money set forth in the 30-year plan. He
said it was a fantasy.
And I am looking, Mr. Secretary, at your statement, and I
know you were briefed so that you could put your statement in
the record, but in the summary, you say the Navy's long-range
plan for the construction of Naval vessels addresses the
requirements in support of the national defense strategy, the
maritime strategy, and the new 2010 Quadrennial Defense Review.
And my first question is: is the shipbuilding plan and the
QDR based upon the June 2008 National Defense Strategy or is it
a more recent version?
Secretary Stackley. I think we need to take that for the
record.
[The information referred to was not available at the time
of printing.]
Mr. Forbes. Let me tell you why I am concerned about that.
First of all, I think we should know. Secondly, according
to the National Security Act, the administration had 150 days
from the time they came in office, I think--you can check this
too and confirm--to have that national security strategy and
the national defense strategy. I haven't seen it. So if perhaps
it has been sent to Congress and it is over here, we appreciate
that.
I would just love for you to get me a copy because we have
been asking for it and haven't seen it, and I think it is
important to know if we are going to make statements that it is
based on that national defense strategy, what year it was based
on. The last one that I know of was the 2008 one.
The second thing I would ask you, Mr. Secretary, is this: I
look at the plan that we have that has been laid out, and we
look over the last 30 years, and I think everybody would agree
the last 30-year average has been about $15 billion that we
have had for shipbuilding. I think we would agree with that,
Admiral. I think that was some of your testimony as well.
You heard Mr. Larsen talk about earlier in 2019, we have
got huge problems with Social Security because of the baby
boomer situation. We hear the White House talking about the
fact that we could have these high unemployment rates hitting
us as long as the next decade. And I look at the CBO
[Congressional Budget Office] analysis of this 30-year plan,
and according to their analysis, which is an independent
analysis, a bipartisan analysis, they think it is going to take
$20 billion a year to reach this plan. That is a $5 billion
difference between the 30-year average and what they think to
reach this plan.
Where are you going to get the $5 billion from? If you look
at what Mr. Bartlett talked about costs going up, if you look
at the fact that we don't have any realistic projections that
the budget is going to get better any time soon, where are we
going to get that $5 billion per year to make up that
shortfall?
Secretary Stackley. Let me start by saying that the pricing
we have laid into the 30-year plan is, I will call it the best
estimates that we have today for what these ships will cost in
the future. Now, that does not mean that they don't carry risk.
Certainly they do.
What we have to put in place is better governance of our
requirements definition, our design, and our procurement so
that as we confront these risks, we don't roll into programs
that bring continued cost growth that end up eating away at the
force structure.
Mr. Forbes. I don't want to interrupt you. Please do
whatever you need to in terms of the record, but I have got 40
seconds left.
CBO is looking at your costs. They are not taking into
account, as I understand it, cost projections, and still they
say it is a $5 billion shortfall. Assuming we don't have these
cost increases, where are you going to make up that $5 billion
a year?
Secretary Stackley. I don't see the added $5 billion per
year for the ships that we have laid into the budget.
Mr. Forbes. Do you disagree with the CBO's estimates? Is
that what you are saying?
Secretary Stackley. I haven't had the opportunity to go
through the shipbuilding plan that we have submitted to
Congress with CBO, but I do know the estimates that we have
laid into our plan and the basis for those estimates.
Mr. Forbes. Mr. Chairman, thank you.
Mr. Taylor. We believe that we have enough time for Mr.
Langevin from Rhode Island.
Mr. Langevin. Gentlemen, thank you for your testimony today
and for your service to our Nation.
If I could, Secretary Stackley, talking about--you
mentioned in your testimony the issue of missile defense. You
talked about that a little already. I was wondering if you
could elaborate a little further on how the Navy plans on
achieving both its missile defense and ship defense
requirements on this platform and what challenges does the Navy
face using one platform, but for both roles?
Secretary Stackley. Yes, sir. Let me start with the
baseline. The baseline is, Admiral Blake referred to 321 Aegis
ships today that have a degree of ballistic missile defense
capability, and those are in service. That capability was
backfit, brought to the ship in terms of adjunct processors
that provide the missile defense capability working side by
side with the AAW [anti-air warfare] capability that the Aegis
system provides. And then, of course, you have got the missile
load-up that works in conjunction with the AAW and missile
defense capability.
As we move forward and get into the later capability builds
for the Aegis program, we come to what is referred to as a
multi-mission signal processor that brings together both the
air and missile defense capability so that the single system
provides that capability without having to change modes. That
is currently in the program. Again, it will be coming in
through backfit as well as being introduced on the DDG-113.
That gives us processing capability.
And then we continue to step up capability in terms of
sensor system as we move to the AMDR, the Air and Missile
Defense Radar to be introduced in the 2016 timeframe.
So we need to move from today's capability, build upon that
to expand the integrated air and missile defense capability as
well as sensor power so that we can more than keep pace with
the threat as we move forward.
Mr. Langevin. Thank you.
Do you have anything to add on that?
Admiral Blake. I would only say that following the decision
to increase our BMD capability at sea, both the Navy and the
Ballistic Missile Defense Office took the action to accelerate
the procurement of the ship kits in order to be able to push
those ship sets out there so that we would increase over the
fit-up in order to meet up the demand signal of the COCOMs
[combatant commanders].
One of the concerns that we had was we wanted to ensure
that we were also taking care of the ships when we put them out
there so that we wanted to push as many sets out as we could so
that we wouldn't have sustained deployment times out there. We
would keep them within the windows that we currently have. That
was one of our priorities.
So as we built the budget, we ended up putting additional
dollars and sets in during what we call endgame in order to
make sure we were meeting the COCOM demand signals.
Mr. Langevin. As I see technology changes and improves, one
of the challenges is also meeting the power requirements.
Particularly, we talked about new technology developments in
radar. One of the advantages of the DDG-1000, it is a larger
platform and could expand--you could easily incorporate
expansions of things like add power requirements on the
platform, and the DDG-1000 obviously doesn't easily expand to
accommodate those expansions.
Can you talk a little bit how we plan to meet the power
requirements of the radar of the DDG-51?
Secretary Stackley. Right now the DDG-51 class is equipped
with three 3,000 KW generators. And as we look at the power
requirements with the added radar capabilities that we bring to
the ship, in order to restore further margin, we are looking at
adding a fourth generator to the DDG-51, and preliminary design
studies have identified location and ship impacts. That is
important and that gives us a baseline.
But we are also separately working a development effort
towards what is referred to as hybrid electric drive. We have
an ongoing technology program where we are going to take an in-
service ship, bring effectively a motor that couples to the
reduction gear of a 51 giving us the ability to drive the ship
through the electric plant. And then the next step will be to
reverse that so you generate power from the propulsion plant
giving--this is where the term ``hybrid electric drive'' comes
from. Very promising technology. We have it in a demonstration
mode today.
We are going to look at that in conjunction with the fiscal
year 2016 Flight III destroyer, with the hopes of being able to
mature that technology and actually increase the ship's power
generation capability.
I would like to be able to come back and give you further
information as we move down that development time line, give
you a greater sense whether in fact we are driving to adding a
generator or whether this alternate technology that doesn't
just provide power, also provides much greater fuel efficiency,
can mature enough to arrive in 2016.
Mr. Langevin. Are you completely banking on that hybrid
technology to meet the requirements of the power generation of
the radar?
Secretary Stackley. No, sir. The baseline is adding a
fourth generator.
In parallel with that, we see this hybrid electric drive as
a promising alternative that more than adding the generating
capacity to the ship would also provide a more fuel-efficient
way of driving the ship.
Mr. Langevin. Thank you. I yield back.
Mr. Taylor. There is a vote on the House floor in about 2
minutes.
When we get back, we are going to recognize Mr. Coffman and
Mr. Hunter in that order.
Again, I want to thank our witnesses first for the delay in
getting started and the delay now. We should be back in 20
minutes or less. Thank you very much.
[Recess.]
Mr. Taylor. The committee will come to order.
Again, I apologize for the delay.
The Chair now recognizes the gentleman from Colorado, Mr.
Coffman, for 5 minutes.
Mr. Coffman. Thank you, Mr. Chairman.
General Flynn, speaking recently to the Service Navy
Association, the Commandant of the United States Marine Corps
stated that during the Quadrennial Defense Review
deliberations, that amphibious forces were stressed in every
scenario. However, in looking at the 30-year shipbuilding plan,
it does not meet the Marine Corps' stated requirement of 38
ships in the amphibious assault force.
Could you please comment on the risk the Nation is taking
by not planning for a 38-ship amphibious assault force?
General Flynn. On the requirement of 38 ships, we also
agree that the minimum number with the degree of risk that is
acceptable is 33, that is both for our forcible entry
capability and our steady stream operation. The way that risk
has to be mitigated is you increase your OpTempo [operational
tempo]. So that means your ships have to be out at sea more and
also compresses some of your maintenance requirements, which
also probably adds to your O&M [operation and maintenance]
costs.
So we believe that 38 is the requirement, but we can do it
at 33, and the cost is deployment tempo and also operations and
maintenance funding, sir.
Mr. Coffman. Thank you.
Mr. Secretary or Admiral Blake, 6 amphibious ships--2 LHAs,
4 LPDs [Amphibious Transport Ship, Dock]--will be
decommissioned in the next 3 years, at the same time that our
amphibious force falls to 30 ships and below. This is 10
percent below the level the Navy and the Marine Corps
characterize the limit of acceptable risk and 22 percent below
that requirement.
Understanding that the Navy plans to retain these vessels
in the inactive fleet rather than selling or dismantling them,
what would be the cost of continuing to operate these vessels
given the significant level of risk we are assuming? What
prevents the Navy from retaining these ships?
Admiral Blake. Sir, to the first part of your question, you
were absolutely right. The number is going to come down. We are
going to be decommissioning those ships in the years as
indicated. And it should also be noted that they will be in the
inactive force and that if there were a national emergency,
that those ships could be brought back out on line in order to
support whatever the event happened to be.
If we had to, if you will, determine what it would require
to take the ships that are currently being decommissioned in
that year we did a couple of excursions, it would require at
least we estimate $1.3 billion, and that is a ROM number, Rough
Order Magnitude. And the concern we had, it is never easy for
the Navy as we are balancing priorities and we are looking
within the fiscal boundaries that we are operating in, it is
never easy to come to the decision that we have to decomission
ships.
However, in the case of the LPDs, they are at the end of
their service lives, and one of the concerns that we would have
is if we had to bring those ships back on line, there are
probably, in addition to the number I mentioned, there would
probably be some unforeseen costs as we kept those on line. I
would also tell you if you look at our budget, basically we
operate in five pots or colors of money.
First, we have got the manpower account, and if we had to
keep those ships in service, we would have to pressurize that
account. So we wouldn't be able to go there to cover the cost.
You have your R&D account, and that is where we are trying
to build a force for the future and determine how we are going
to meet the future threats.
You have your infrastructure account, which has got a
number of high priority items, everything in it from family
housing to quality for our sailors and Marines.
And then you have got the O&M account, the operation and
maintenance account, and the procurement account.
So there would be no easy place to go, if you will, when
you look at that account if we were to, in fact, go back if we
had to bring those ships out.
General Flynn. One of the key things that I think you have
to be considering when you look at the decommissioning, even
though it may be budget driven, there still needs to be an
operational assessment by all of the key stakeholders as to
what that does. And when you make that decision, that is driven
sometimes by fiscal realities. It also has to be informed of
the operational realities and capabilities you are going to
have or not have by doing it.
Mr. Coffman. Thank you.
Mr. Chairman, I yield back.
Mr. Taylor. I thank the gentleman for a really great line
of questioning.
The chair recognizes Mr. Hunter.
Mr. Hunter. Gentlemen, I thank you all for your service.
Secretary Stackley, when it comes to the NASSCO, you have
been asked about the MLP [Mobile Landing Platform], you have
been asked about the amphibs. One last question here. When it
comes to the actual T-AKE hull and propulsion system, do you
have any thoughts about putting that into the next fleet oiler
double hull T-AO(X) using that hull in that propulsion plant in
that ship?
Secretary Stackley. Yes. We have looked at concept designs
where you leverage the existing design and take a look at what
the capacities are for T-AKE-type hull versus what a T-AO(X)
would need to provide.
So there are concept studies and feasibility looks that
indicate that T-AKE hull would be a viable platform for the T-
AO(X).
Mr. Hunter. Would you say it is a pressing matter right now
to get a double hulled oiler fleet out there right now?
Secretary Stackley. Right now--in terms of the force
requirements for oilers, we meet all of our requirements. And
as I described earlier, service life for the T-AO classes go
out to the mid-2020s.
So when we, in a 30-year plan, look at pulling T-AO(X)
forward into the 2017 timeframe, it is looking at both the
industrial base as well as getting to that more modern
refueling-at-sea capability that would bring the double hull.
So that was an important consideration as we moved it to the
left.
Our forces have a waiver or an exemption from the MARPOL
[Maritime Pollution Act] requirements for double hulling, but
we do see the benefit of getting there sooner rather than
later.
Mr. Hunter. Moving them left up against the actual T-AKE
production line would probably save a lot of money because they
could keep going from there with that hull, the materials and
everything else. But that is not going to happen? There is for
sure going to be a gap in between if it was chosen to use that
hull and that propulsion plant for the T-AO(X)? There is no way
that it can be backed up to save money?
Secretary Stackley. We took a hard look at the timing for
the T-AO(X) and the plan, and across the alternatives when we
tried to look at the feasibility of building T-AO(X) that much
earlier, then we are starting to trade off other higher
priorities inside of our requirements to fill this other
requirement ahead of need. So that is how we ended up in the
2017 timeframe.
And the other thing I have to caution is when we talk about
a T-AO(X), new ship class, there would be time devoted to that
design but then we would also compete that new ship class so
that it is not a given that T-AO(X), if it were on a T-AKE hull
form would be going right behind T-AKE. There is a design piece
and a competition piece that would intercede.
Mr. Hunter. So even if you took that hull form, you
wouldn't necessarily give it to the people who had been making
those ships. It is going to be competed?
Secretary Stackley. We would be competing.
Mr. Hunter. So you would compete it with other shipbuilders
that hadn't built that ship instead of having the folks having
the expertise in building that ship carry it on?
Secretary Stackley. We would be taking the requirements for
the T-AO(X), we would be looking at detailed design and
construction, determine what the proper hull form is, and we
would be looking--from day one our intent would be to compete
T-AO(X).
Mr. Hunter. Even if that T-AKE hull form was chosen to be
the model?
Secretary Stackley. Yes, sir. At this time, I don't have
any compelling justification to go to the sole source for T-
AO(X).
Mr. Hunter. Thank you, Mr. Chairman.
Mr. Taylor. The Chair will recognize the gentleman from
Virginia for an additional 5 minutes.
Mr. Wittman. I want to follow up a question earlier about
amphibious ship capacity.
Can you articulate for the committee what impact the
availability of amphibious ships has on the Marine Corps? And
let me ask you a little bit further.
Have Marines and sailors been subject to back-to-back or
unscheduled deployments because of the lack of depth in our
amphibious inventory? And what difficulty does the Marine Corps
face when, for instance, a ship fails to pass its end serve or
breaks immediately upon its acceptance? I just want to put that
in perspective to understand some of the nuances on amphibious
capacity and what it means to the current Marine Corps.
General Flynn. I can honestly tell you upfront we haven't
missed a deployment because of amphibious ships. But what we
have had to do is what was in the planned availability and what
was actually deployed has sometimes had to be modified at the
last minute. And what you lose then is the training time that
you spent together working up prior to the deployment so there
is a measure of effectiveness. That has happened recently on
some of the deployments that we have had to substitute an LPD
for one that couldn't deploy, and in another case, we had to
look at another deck to do that.
So I don't think we have missed the point. I know we
haven't missed a deployment. But you do then lose that work-up
time prior to deployment.
It hasn't really affected the Marines that deploy on the
ships, but I do think if you are the ship that was not
scheduled to deploy and then you were put in at the last
minute, I think it would affect the sailors that were doing
that.
But I think the recent deployments that you saw in January
when we had Haiti and our other operations going on just show
how much the fleet is used and how valuable it is to what we do
every day, and the more flexibility you could have the better.
That is why we went with the 11-11-11 mix of 11 big decks, 11
LPDs and 11 LSDs to give you that overall capacity and
flexibility.
Mr. Wittman. I yield back, Mr. Chairman.
Mr. Taylor. The former chairman, Mr. Bartlett.
Mr. Bartlett. Just one short question.
Admiral, in your testimony, you said that one of the
missions of your Navy was to protect our sources of energy. As
you may know, the Chinese have been very aggressively buying up
oil all over the world. In today's world, that doesn't make
much sense because those who come to the auction with dollars
get the oil. We have only two percent of the world's oil. We
use 25 percent of the world's oil.
Do you think that the Chinese anti-ship missile may be
relevant to their buying up oil all over the world?
Admiral Blake. I am not sure there is a connection there,
sir. I will tell you that we take their anti-ship missile
seriously and that we are definitely considering ways to
position ourselves so that we would be allowed access in an
anti-access scenario. But other than that, sir, I don't think--
I don't know of a connection between oil buyout and the access
missile.
Mr. Bartlett. It makes no sense in today's world why they
are buying oil. I think the time may come, since oil is finite,
that they will say, Gee, guys, I am sorry. But the oil is ours
and we can't share it.
To make that a reality, they have to be able to protect the
sea lanes for the shipment of oil. And if our ships can get
there, they can't protect them, can they? That is why I think
this new anti-ship missile may be relevant to their buying up
oil all over the world. Because if they are going to protect
their sea lanes, they can't have us near them, can they?
Admiral Blake. Well, sir, I would say that we, as I
previously said, we do take the anti-ship capability seriously
and that the issue for us is to evolve our ballistic missile
defense systems so that we are able to counter that capability
and I think we are doing that.
Mr. Bartlett. It comes close to being a gamechanger,
doesn't it?
Admiral Blake. I think it is a serious threat, and I think
we need to be able to address it.
Mr. Bartlett. I thank the gentleman.
Mr. Taylor. Secretary Stackley, I appreciate you sticking
around as long as you have.
One question that comes to mind is the affordability of the
LCS [Littoral Combat Ship] and what you expect to see
pricewise. My question is, is it your intention to award a
contract of 10 to the first vendor or 5 separate 2-ship
contracts? And do you think that there would be any merit to
giving you the legal authority to make that an award of 10 for
multi-year, if it is not the case already?
Secretary Stackley. Yes, sir. We do not have multi-year
authority. What we have structured is what has been referred to
as is a block buy where we would be awarding two firm ships,
fiscal year 2010 ships, with options for eight additional
ships. And we have requested in the 2011 budget request
economic order of quantity [EOQ] advance procurement funding
that would allow the winner to combine the two ships with
select material buys for the eight additional ships to gain
some savings on the material side.
And what we structure is competition for those EOQ dollars
so that the winner has the ability to go out to his vendor base
and compete, who gets the multi-ship material buys as a part of
his bid.
So it is not a multi-year but within the authorization that
we received in 2010, it attempts to achieve much of the benefit
of a multi-year when it comes to stability, savings through
material procurement and then planning, if you will, on the
part of the winner.
Mr. Taylor. Given that I am certainly disappointed in the
price of that platform, I am curious if either of the vendors
has expressed any interest in making a better deal if given a
multi-year? Has that subject ever been broached by them?
Secretary Stackley. I don't remember getting into a multi-
year discussion with this solicitation. We have talked about
getting to a multi-year, and in fact, the acquisition strategy
that we have structured, the next procurement, in fact, would
be a multi-year procurement. But at this stage given the
turbulence at the front end of the program, we did not
anticipate that we would be able to move directly into a multi-
year with this buy.
Mr. Taylor. Shifting gears. Given the critical importance
of the EMALS [Electromagnetic Aircraft Launch System] system
being delivered in a timely, cost-effective manner, where does
that stand on the fourth-class carriers?
Secretary Stackley. Let me break that out into a couple of
pieces.
One is the development, what is referred to as a system
development and demonstration, SDD. We have several activities
going on there. We have what is referred to as highly
accelerated life testing taking place in Tupelo where system
components are being tested and run through and accelerated
alive to get learning in terms of the system's ability to meet
the 50-year lifecycle that it was designed for.
We have high-cycle testing, which takes critical components
through--we are up to 30,000 cycles, which is about a 16-year
lifetime of the equipment looking for information on fatigue
and performance at those high ends of the system's performance.
But most importantly is we have got the system, one
catapult in the ground at Lakehurst where we bring together
hardware, software, power system and are ramping our way up
through what we refer to as no load tests, ultimately leading
to aircraft launches in the end of the summer.
So the SDD program is scheduled to complete around the
second quarter of 2012 of the development at Lakehurst. I still
have to get you up there, sir, when we can coordinate
schedules, but we are learning greatly there. We have
identified software issues that set us back in a test program.
It came through those software issues and are continuing to
march forward. So the SDD continues to support the CVN 78.
Secondly, we have production. And the production we have
the total system broken down into a half a dozen subsystems
that we are tracking closely. For all but two major pieces of
equipment, we are looking at significant float in the
production schedule on the order of about 4 months.
Two pieces of equipment. It is actually one piece of
equipment, two of, and that is motor generator sets. We are
closely managing that production schedule. There is no float in
that schedule so we have to be careful that we don't incur any
interruptions on the production side. But today we support the
CVN 78 schedule in both SDD and production, and we have got a
pretty strong team managing this day-in-day-out to keep it that
way.
Mr. Taylor. Secretary Stackley, the Navy has pointed out
the need for surface combatants. The general has done an
excellent job of pointing out the need for large-deck amphibs.
This Congress has been good enough to authorize and appropriate
funds for two DDGs, two LPDs and one LHA, and yet the Navy has
not signed the contract. And quite honestly, we have delivered
identical letters to both Northrop Grumman and the Navy
reminding both of you that these are a finite amount of funds
for a fleet that needs to grow. And I want to do everything I
can from this end to encourage you to sign those contracts.
Secretary Stackley. Yes, sir. Can I give you a status on
where we are and how we are attacking this.
In shipbuilding, what you just described is frankly the
most significant issue that I am dealing with on a day-to-day
basis--that is the significant amount of shipbuilding that is
pending at Northrop Grumman on the gulf coast.
In terms of those five ships, we, in fact, have advanced
procurement contracts in place for the DDGs, and we have
received proposals for the advanced procurement contract on
LPD-26--I am sorry. We have advanced procurement contract in
place for LPD-26. We have received proposals for construction
for LPD-26 and proposals for construction of DDG-113. We
received those proposals about a month ago, a little bit over a
month ago. We are evaluating those proposals. But more
importantly, we are engaging in direct and intensifying
discussions with the shipbuilder to come through the
differences between their position and our position.
It is a collaborative but hard effort to get there. It is
our priority, and I know it is Northrop Grumman's priority, and
we understand and agree with your sense of urgency.
What we have to do on the government side is ensure that we
arrive at a contract that meets our requirements and is in the
best interest of the taxpayer. We will keep you informed as we
continue to move through these negotiations. They will be
difficult. But we are, both Navy and industry, very committed
to getting these completed successfully.
Mr. Taylor. Lastly, and I do want to thank you for what I
consider to be your strong efforts to turn the LCS program
around, your good work on the Virginia program. There are a
number of programs going in the right direction.
The thing that continues to trouble me is that this is, to
my knowledge, the third Chief of Naval Operations that has come
before the committee and says we need a 313-ship fleet. We
finally hit bottom and started growing the fleet until this
year. This year the Navy wishes to commission 7 ships but
wishes to decommission 10 ships. That is going the wrong way.
And I think you have heard up and down this panel our desire,
as Members of Congress, who have the responsibility to provide
for the Navy, to grow the Navy.
I think the most sensible way to do that--and I am going to
let you tell me why not--would be to SLEP [Service Life
Extension Program]--at least until the LCS's start being
delivered in sufficient quantities--to SLEP the FFGs [guided
missile frigates]. Now, the first thing that was thrown back at
me was, Well, we don't have the manpower. I can't see where
one-quarter of 1 percent of the 330 men and women in the United
States Navy is really going to kill you. So I think you are
going to have to come back with a better argument than that.
The cost of some of these vessels--and again, I want to
work with you on this. If we are going to SLEP them, should we
SLEP the best, start with the best, or should we start with the
five worst that we know need generators and other things.
But I don't think anyone wanted the LCS program to drag out
as long as it has. I don't think anyone wanted the fleet to
shrink as much as it has, but we do have an alternative to a
shrinking fleet and that is to SLEP the FFGs, so we will be
sending you some questions in the near future, and I hope you
will get back to me in a timely manner.
Thank all of you for a very long day here and for your
service to our Nation. The panel is dismissed.
Mr. Taylor. We now call to the witness stand Mr. Mike
Petters, the corporate vice president and president of Northrop
Grumman Shipbuilding; and Mr. Dave Heebner, executive vice
president, Marine Systems, General Dynamics Corporation.
Mr. Petters, I have been told you have been on the job
longer, if that is the case, we are going to allow you to go
first.
STATEMENT OF C. MICHAEL PETTERS, CORPORATE VICE PRESIDENT AND
PRESIDENT, NORTHROP GRUMMAN SHIPBUILDING
Mr. Petters. Thank you, Mr. Chairman.
Chairman Taylor, Ranking Member Akin, distinguished members
of the Seapower and Expeditionary Forces Subcommittee. I really
appreciate this opportunity to be here today and I appreciate
the invitation.
Mr. Chairman, your invitation asked for my opinion of the
Navy's 30-year shipbuilding plan, and I will limit my remarks
to a summary of my written testimony which I request be
submitted for the record.
First, I think the Navy has presented a courageous plan
with the budget discussion taking center stage across America
today. The Navy has stood up and said, This is what we need to
be effective, and they have not allowed today's fiscal
restraints to overwhelm what they believe are the mission
requirements. But having said that, there is something
important to understand about this plan from my perspective.
It presumes that there will be a smaller industrial base
required to support the plan, and it presumes that that base
will be healthy. I think these are very bold presumptions. Our
industrial base today, albeit with some minor adjustments over
the years, has been established to support a 600-ship Navy, and
yet this plan presumes even greater adjustments are to come.
And when we do our planning at Northrop Grumman
Shipbuilding, we always start with the assumption that the
Navy's 30-year plan is the best case. Now, if any industry were
to go through this kind of rationalization there would be a lot
of turmoil and uncertainty. The Navy's plan doesn't really
appear to consider that part of the issue.
These kinds of adjustments would require significant
collaboration with the Navy, the Congress, and the industry to
enable this transition and minimize a lot of uncertainty. I
believe that the major work areas that will be affected would
be workforce, the facilities and the supply chain. And building
these complex ships, as you know, requires very uniquely
skilled craftsmen.
At Northrop Grumman, our demographics have shifted to a
workforce of employees with less than 5 years, coupled with a
large population of shipbuilders with more than 25 years
experience nearing their retirement eligibility, and that
experience is not easily replaced. We have addressed this by
investing in our people through leadership training, workforce
development and apprenticeship programs. However, should some
sort of rationalization occur, it is probable that the very
same people that we are investing in today would be the very
first ones we would be forced to let go. That combined with the
projected retirement levels would jeopardize our productivity
in the future.
A rationalization would also be challenging in terms of our
facilities. Shipbuilding is not like the hotel industry, where
the solution for two hotels with 40 percent occupancy is
closing one to reach 80 percent in the other. Each of our
facilities are tailored for specific applications and support
of particular missions. A great degree of thoughtfulness would
be needed to answer the question, how would we move from where
we are today to where we would need to be in the future? And
yet the choices associated with facility rationalization, like
redeployment, face capital investment and environmental
challenges just to name two. In other words, one size solution
would not fit all cases.
The issue of the supply chain would be how to create a
sustainable consistent volume of demand, which is the same
issue we have today. Today's low volumes are eliminating
competition. We have 80 percent sole-source in many programs,
and 60 percent sole-source across all of our programs. Even
with 80 percent sole-sourcing, we can still manage our costs,
as long as we have consistent demand. And without consistent
demand, even with competition, we struggle with managing that
cost.
Now, we have come through a period of multiple lead ships
with the supply chain competition, but we are transitioning to
follow-on ships which inevitably leads to significantly less
competition. So how can we ensure the health of that chain?
As I testified to this subcommittee last July, at the heart
of our difficulties in shipbuilding is that most of the time
the Navy must buy ships one at a time and must pay for them up
front. This results in tough challenges in creating a healthy
and efficient shipbuilding industry. We need to increase the
use of initiatives that enable us to amortize our investments
in our people, facilities and supply chain, like multi-year
appropriations and multi-year contracts.
And I would like to conclude my statement with a point
regarding the Ohio-class replacement program. It has already
been talked about at length today, but I just add, if we could
be moving to a smaller base, as the plan seems to indicate, all
of us, the Navy, the Congress and the industry will be
wrestling with what size base that is. One of the factors that
will drive that decision, in fact I think the largest factor
that will drive that decision, is how the Ohio replacement
program will be budgeted. If it is in the SCN [Shipbuilding and
Conversion, Navy] account, the base would be significantly
smaller, as this program will absolutely impact every other
program in that account.
If it is not in the SCN, if it is taken off the budget or
funded as a strategic enterprise, then the base required to
support the SCN is a different size and will minimize the
turmoil and the uncertainty that lies ahead.
Now, this second option would certainly be my respectful
recommendation.
I welcome the attention of the Congress and this
subcommittee in particular to the needs of our industry, and I
thank you once again for allowing me to talk with you today. I
really appreciate the invitation. I look forward to your
questions.
[The prepared statement of Mr. Petters can be found in the
Appendix on page 75.]
Mr. Taylor. The Chair thanks the gentleman very much.
And again, our apologizes for keeping you here so late.
The Chair now recognizes Mr. David Heebner of General
Dynamics.
STATEMENT OF DAVID K. HEEBNER, EXECUTIVE VICE PRESIDENT, MARINE
SYSTEMS, GENERAL DYNAMICS CORPORATION
Mr. Heebner. Thank you, Chairman Taylor, Congressman Akin,
members of the subcommittee. It is a pleasure to appear before
this committee again. And I want to thank you for your
committee's support for the United States shipbuilding. I would
like to make a brief opening statement and, if you would permit
me, submit a written statement to be added to the hearing
record.
Mr. Taylor. Without objection, so ordered.
Mr. Heebner. My name is Dave Heebner, and I am the
Executive Vice President of General Dynamics Marine Systems. GD
Marine Systems includes Bath Iron Works in Bath, Maine;
Electric Boat in Groton, Connecticut, and Quonset Point, Rhode
Island; and NASSCO in San Diego, California.
Our shipyards employ nearly 22,000 people who design, build
and support submarines, surface combatants and auxiliary ships
to the U.S. Navy and commercial ships for the U.S.-Flag
customers.
Our primary objective at General Dynamic [GD] shipyards is
to provide the Navy quality ships that achieve fleet
performance requirements and are the best possible value to the
American taxpayer.
When I last testified before this committee in July of
2009, I mentioned three aspects that have direct and
substantial impact on our shipyards' ability to achieve that
goal. They are, one, stability of requirements. Stable
requirements lead to more mature designs which reduce
production risk and promote efficiency. Two, predictability in
funding and scheduling. Predictability allows time for planning
and commitment of resources that enhance shipbuilding
processes. And three, sufficient volume for efficient
production. Building enough ships to enable investment in
processes, people and facilities to lower costs and maximize
the value of each ship we deliver.
While assessment of the industrial base impact of the
Navy's new 30-year shipbuilding plan is ongoing, I am certain
that the Navy has worked hard to balance available resources
among a broad and diverse set of competing demands. Stability
of requirements is implicit in this plan, and predictability is
enhanced because the plan is based on reasonable assumptions
and can be executed.
With regard to these two aspects, the plan promotes our
ability to provide quality ships at the best possible value.
However, the most challenging aspect of the plan is volume.
While we credit the Navy for its balance in allocating
available resources, the new plan is funded at levels that
build 13 fewer surface ships in the near term when compared to
the previous shipbuilding plan. Internal to our shipyards, the
volume challenge will trigger workforce resizing. And external
to our shipyards, reduced volume will negatively affect the
thousands of suppliers who provide components and commodities.
In the end, this reduction in volume will lead to higher
shipbuilding costs, not the best possible value for the
taxpayer.
This simply reflects the principle of economy of scale.
Over the past decade, GD made major capital investments in our
shipyards to enable production efficiencies, but the return on
these investments to the Navy will be limited without
sufficient volume. Our objective remains unchanged. We will
deliver high-quality, capable ships to our Navy. The new 30-
year shipbuilding plan is a good baseline, and we will work
with the Navy and the Congress to address the volume issues.
Mr. Chairman, thank you for your continued strong support
of American shipbuilders. I am proud of the high quality ships
that the men and women of General Dynamics deliver to the Navy,
and I invite the committee to visit our shipyards, so that our
skilled workers can show you the magnificent ships they build.
I thank you for this opportunity to testify. I look forward
to your questions.
[The prepared statement of Mr. Heebner can be found in the
Appendix on page 91.]
Mr. Taylor. Thank you, Mr. Heebner.
The Chair now recognizes the ranking member, Mr. Akin.
Mr. Akin. Thank you, Mr. Chairman. I did have one quick
question of Mr. Heebner. I understand that moving work on the
MLP into fiscal year 2012 or at least into 2014 creates more
stability for the workforce at NASSCO, but would moving that
work to the left create any savings on these platforms? That is
the first question.
And then the second question would be, what additional work
do you hope to compete on, and will those opportunities be
available before fiscal year 2014?
And I guess maybe add a third thing relative to a comment
that was made by Secretary Stackley, and that was, I think they
said that you have got one MLP scheduled in 2011. They are
going to skip 2012, so that there is time to work out possible
bugs between the first and then the next couple. I just wanted
you to respond to those if you would. Thank you.
Mr. Heebner. Thank you, Congressman Akin.
I would like to draw back some attention to the hearing
that we had in July of last year, and remember that the focus
on that hearing was the efficiency in American shipbuilding, in
both military ships and also in commercial shipbuilding.
And I can tell you that the investments that we have made
to reengineer our shipyards in facilities and people and
processes have been effective in working toward that
efficiency. I can point out to you the Virginia-class submarine
program and our ability to anticipate the Block III ship buy
and significantly improve the cost of those ships, getting
those ships down to $2 billion a copy, to be able to transition
from an initial ship that took 84 months of span time to
construct down to our target of 60 months, a significant
savings. That is a credit to being able to plan effectively for
what we want to do.
For the MLP program, another important ingredient in being
able to build ships serially and efficiently is by creating a
complete design before you start building the ship. That design
factor is built into our plans for the MLP, and I am not
interested in going back to the old days where we wait to
develop requirements, where we start construction with a low
level of design completion. I think we have found the model
that works. We have done it with the Virginia class. We have
done it with a product carrier at NASSCO, and I think we should
continue to do it by getting the designs complete first. That
is our plan on MLP, and we have looked at it from the viewpoint
of being able to build those ships serially, year after year,
so that we can maintain the workforce and those efficiencies
that we have built into the yard.
Mr. Akin. So I think what I am hearing you say is because
you are moving to the new method of building the ships which is
less expensive, part of that says, is you have got your whole
design as done. You know that everything is going to hook
together, and so when you build the first one, you are not
anticipating any major changes, so you can build the second one
right after the first. Am I understanding you?
Mr. Heebner. As long as our Navy partners maintain
consistency in the requirements for those ships, we intend to
leverage the design build process that we have now proven in
our own processes to be effective.
It is clearly evident in the PC [Patrol Craft] program that
we built out there in the NASSCO shipyard, where we delivered
that ship 6 months early, and we reduced the cost on the ship.
We produced the first ship 6 months ahead of the schedule, and
we reduced the cost in that to all of the stakeholders.
So I think that that is possible in shipbuilding. We have
demonstrated it there, and we are showing that we can meet our
commitments in the submarine programs as well.
Mr. Akin. So then the other part of my question was, does
that mean savings, and can the ships be built at a lower price
if you can, leveling your workforce, if you can build them on
1-year increments, does that help you out? And does that
translate to savings for the Navy?
Mr. Heebner. As I mentioned in my opening statement,
obviously one of the important objectives we have in
shipbuilding is to deliver the best possible value to the
taxpayer and by being able to maintain a skilled workforce
without the cycles of reductions and increases, to be able to
maintain the trained base. And I will give you a quick example.
When we were having difficulties at NASSCO 5 or 6 years ago
in meeting production and time lines, basically, we were
experiencing five trainees to one journeyman. Today we have
five journeymen to one trainee. That is the way to do it. That
is the way you build efficiency into your yard. If you want to
break production on us, if you want to move the next ship out
to meet some fiscal timeline, we can do that. But that
workforce changes under those conditions, and we go back to the
other condition. We know what the answer is. Let's maintain the
momentum that we have in building efficiency into our yards.
The answer is, yes, we can save money on those ships.
Mr. Akin. Thank you very much.
Thank you, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman.
The Chair now recognizes the gentleman from Connecticut,
Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman.
Just a follow-up on the Ohio-class discussion from the
prior panel and Mr. Petters' reference to it.
First of all, I think you would find a lot of support on
this committee to finding a separate funding mechanism for
that. It would solve a lot of problems by itself.
I mean, obviously, the other issue is just, you know, the
projection, the $6 billion to $7 billion per submarine, which
the Navy has built into its shipbuilding plan. I mean given the
fact that, obviously, the Virginia-class program achieved a
great deal of success, as all the witnesses have mentioned
earlier, do you think we can maybe be a little more optimistic
about whether or not building on, you know, what we have
learned from that, that there may be hope that we can do better
than that projection?
Mr. Heebner. Thank you, Congressman.
The direct answer is yes.
Let me just compliment the Navy at this point and the
Congress and this committee for supporting the Ohio-class
development process. We know what it takes to get to an
effective design at the time of construction start. And we have
programmed into this Ohio replacement program the time to be
able to do that efficiently. We have engaged our partners in
the United Kingdom, so we can cost share in that process as
well. So we have an effective plan in place right now to be
able to deliver those submarines, and begin construction in
2019, and deliver those submarines on the schedule that we have
intended.
There is a lot of work that has to be done between now and
then. The Navy and our UK partners have to decide on the
requirements, the requirements for each individual boat and
also for those that we share commonly between us. As we get
through that process, we will build that into the design. And
our intention is to complete the design so that we can build
the ships in 2019 without making multiple changes as we begin
construction. That will enable the efficiency that will keep
the cost down.
Mr. Courtney. Well, we are rooting for you.
Tomorrow we are going to have a lot of people on the Hill
who are part of the submarine industrial base. The suppliers
are kind of swarming the place. I mean, you described how you
know when you begin these programs, you have multiple bidders,
and then as it goes along, because just by nature, you end up
with sort of sole-source. I mean, how fragile is the supply
base right now?
Mr. Petters. As I mentioned, our overall supply chain today
for all of Northrop Grumman shipbuilding is about 60 percent
sole-source.
For the submarine community, it is actually 80 percent
sole-source. On the one hand a sole-source supplier or sole-
source condition can be particularly challenging to manage from
a cost perspective because when you go to negotiate it with a
sole source supplier, you have a lot different kinds of
leverage, less leverage frankly. But what we found in all the
studies that we have done across all of our programs is that
the most important factor in being able to manage the cost is
really not whether they are sole-source or not. It really is,
are we able to provide consistent demand and steady, consistent
demand that we can forecast and then meet our forecast on?
So, in the case of the Virginia-class program, that has
actually been our best program, from a cost-management
perspective in the supply chain, because we have been able to
predict to our supply chain, even though it is 80 percent sole-
source, we have been able to predict to them what the demand is
going to be. And we have been able to place work with them in
such a way that we have been able to come to good cost-
effective solutions that make sense for both the suppliers
because they have consistent demand, as well as the
shipbuilders and the taxpayers because of the bill.
And so, for me, the issue is, well, while we talk about
sole-source and lead ships kind of drive competition, at the
end of the day, the competition is really not the panacea I
think that people would like it to be. I think the real issue
is treating the program as a class and then being able to keep
a steady, consistent demand out there for that supply chain to
manage to. And I think you can do that whether it is 80 percent
sole-source or 20 percent sole-source. That consistent demand
is the key.
Mr. Courtney. Mr. Heebner.
Mr. Heebner. The supply base for General Dynamics Electric
Boat is 70 percent single-source supply. I would echo Mr.
Petters' comments that it is manageable as long as we can
provide predictability and stability to that supply base. From
time to time, there are some of those suppliers who just cannot
sustain themselves over time, and we take exceptional action to
be able to maintain that source. But I do believe that it is
manageable even at that high rate.
Mr. Courtney. Thank you.
Mr. Taylor. The Chair recognizes the gentleman from
Virginia, Mr. Wittman, for 5 minutes.
Mr. Wittman. Thank you, Mr. Chairman.
Gentlemen, thank you so much for joining us today. We
appreciate the great ships you build, and so do our men and
women in uniform.
I want to just start out with a question in looking at the
shipbuilding plan. And you all had talked about consistency in
demand and making sure that we had that capacity within the
industrial base to make sure we can meet this Nation's needs.
When I look at certain classes, I look at DDG bills, and I see
it go from two to one, two to one, two to one. I am wondering
how you see that affecting your capacity. And again, I realize
the challenges there with making sure you have the experts
there trained and making sure you keep those experts in
building those ships. I want to talk about that particular
class.
And then, also, the SSNs, as you look out in the future,
when we get to 2030, you see we start to trail off with the
number of SSNs that we are building off to being at 39 in 2030.
So I am wondering with the trail trailing off of the builds on
SSNs and then it ramps back out, what does that do to the
industrial base? And then what does the two-one-two-one
schedule for DDG-51s do to your ability to maintain that
capacity in the industrial base?
Mr. Heebner. If I could start with two comments. The first
is the DDG-51 is a good example of what can happen successfully
in shipbuilding when you get the serial production of ship and
you have competition between two surface combatant yards, as
you do between Ingalls and Bath Iron Works. Now, we were
successful in building that ship for a long time. But several
years ago, we made an investment in the Bath Iron Works yard in
concert with the United States Congress, the Navy, the
communities in the State of Maine. And we built the land level
transfer facility and we built an ultra hull manufacturing
facility.
And the result of that is, from the last slider we had to
the most recent launch ship, we have taken over 2 million man
hours, labor hours, out of the production of a single DDG-51.
That is the type of thing you can do with investment. And you
get--I am able to convince my board to make these kinds of
investments when I can show them that we have the likelihood of
serial production.
When I saw the 30-year plan and noted three ships every 2
years, as compared to significantly more than that in the
periods that allowed us to build that efficiency, I don't know
how the Navy or the Congress would intend for us to maintain
two competitive surface combatant yards. So I think we need to
take a look at that, keep competition in, build five ships
every 2 years, certainly a requirement, but do it so that we
compete with each other and get the best possible price for the
taxpayer. Make us work hard to do that. We are ready for that
competition. But it takes more volume than three ships every 2
years.
Mr. Petters. And I would just echo that there is not
sufficient volume, in my opinion, in the plan today to have
healthy competition. Competition works where you have
sufficient volume to keep the competition moving year in and
year out. And I think the DDG-51 program was the Virginia-class
program before the Virginia-class program came along in terms
of its model program, serial production, attracting investment,
attracting talent, using competition to drive efficiencies. It
is also a model program. We are on the edge of restarting that
program now and we have a plan in front of us that is going to
restart it at low production rates. If the expectation is that
we can achieve what we did before in the 51 program at higher
production rates, I would agree with my compatriot here that
volume is not sufficient to warrant that. And so we would have
the same issues of trying to justify investment, trying to
attract talent and those kinds of things.
Mr. Wittman. An additional question about our amphibious
ships. And I know there is a lot of debate. We heard it earlier
with General Flynn with 38 versus 33. We know we are
transitioning. We are transitioning from the LPD to the LHD
[Amphibious Assault Ship]. Tell me, is that transition going to
be taking place in a way that is going to make sure we transfer
efficiency in the process to make sure we can meet our
amphibious ship needs?
Mr. Petters. Up until this plan was published, the plan
that we were working to was a plan that would finish the 11th
LPD, then go and use the LPD hull to build a couple of LCCRs
and use that to transition into the LSDX program. And that
would be a bridge, if you will. It would be a bridge, a design
bridge. It would also be a talent and capability bridge and
facility bridge.
This plan has removed those two LCCRs, and so basically it
has taken the bridge out. What the implications of that are for
LSDX, I don't know. If the idea is that somehow you can bridge
from an LPD-27 to an LSDX with a 4- or 5-year gap, I think that
that is a bridge too far. And so we will have to--that is one
of--in my written testimony, that is an area where I think that
the plan could use a little bit more scrutiny.
Mr. Wittman. Thank you, Mr. Chairman.
I apologize. That should have been LPD to LSD, but anyway.
Mr. Taylor. The Chair thanks the gentleman.
The Chair now recognizes the gentlewoman from Maine, Ms.
Pingree, for 5 minutes.
Ms. Pingree. Thank you very much, Chairman Taylor.
And thank you both for being here today and speaking with
us about your industry. You both did a good job of answering
one of my questions about the competition, industrial base, and
the procurement rate of the DDG-51, so I don't know that I have
anything else to say. But I appreciate, and you have heard in
earlier testimony, how often that comes up with the committee
members and our concern about maintaining the industrial
capacity and the competition.
My other question is for Mr. Heebner. And thank you again
for being here today. It is nice to see you. As you know, the
DDG-1000 program is experiencing a Nunn-McCurdy cost breach due
to the decision to truncate the program to only 3 ships instead
of 10 and not likely because of program or shipbuilder
performance. What is your perspective on the Secretary's
explanation for the cost breach, and can you give us an update
of the production of the DDG-1000?
Mr. Heebner. Thank you, Congresswoman Pingree.
It is a program that we are particularly proud of at this
stage. A couple of comments I think would be appropriate before
I talk about the Nunn-McCurdy breach. The DDG-1000 program is
leveraging off of the success of the DDG-51 program at Bath
Iron Works. And we have had the opportunity to exercise a land
level transfer facility in the ultra hull and made great
strides in improving efficiency in shipbuilding performance. We
designed this ship more completely before start of construction
than any other ship that has been built at Bath. And as a
result, as we have begun the process, we have maintained the
schedule for production and, in some cases, exceeded it.
But you shouldn't just listen to my view of this thing.
Secretary Stackley has a quarterly meeting with all of the
major contributors to the DDG-1000. And I commend the Navy for
the way they are managing and overseeing the performance of the
multiple contributors to that program. And that ship is coming
along.
From our perspective, the hull mechanical and electrical is
about 10 percent complete, so it is too early to declare
victory, but the reality is, we are on or ahead of schedule in
the projection. We have leveraged lessons learned in the DDG-
51. I like the comment that CNO Roughead made in his testimony
where he said, the Nunn-McCurdy breach is mathematics. And he
talked about a program that went from 10 ships in his last
assessment to 3 ships, and when you do the mathematics, you
simply get a technical breach that must be reported and must be
dealt with.
My suggestion to you though is that we are in the process
right now of contracting for the DDG-1000 three ships. The
first one is under contract. The second and the third ships are
not under contract. If we can keep those on contract, then we
can generate the savings that have been built into the plan. If
we must delay those contracts, then that will have impact on
both the workforce and also on the cost of the ship. So it is
important that we maintain our vigilance in moving forward and
getting those two ships under contract.
Ms. Pingree. Thank you very much.
Thank you, Mr. Chair.
Mr. Taylor. Mr. Bartlett.
Mr. Bartlett. Thank you very much.
When I became Chair of this subcommittee, I was concerned
that our platforms were two few and very large and provided
very enticing targets for a peer. And I would imagine that if a
peer chose to start a war with a Pearl Harbor kind of an event,
I wondered how many of our major assets would be available to
us the next morning. And we commissioned three naval
architecture studies looking at what a future navy might ought
to look like considering these threats. And one of those was
chaired by Art Cebrowski, who I am sure you know.
And his study indicated that he thought that we should have
a 600- to 800-ship navy that would cost no more than our
present navy because he was envisioning much smaller ships. I
noted that we had unmanned aircraft. The pilots are in Nevada.
And we have unmanned submarines. We still have people on ships.
And I asked them why we still had people on ships since they
are obviously easier to drive than either an airplane or a
submarine. And the answer I got was that we have so few of
them, and they are so big and so valuable, we have to have
people on board for damage control.
As you know, half the cost of keeping a ship at sea is the
people. So if you got rid of half the fleet, we could have 50
percent more ships. If you got rid of all the people, we would
have twice as many ships.
Well, if you had a navy like Art Cebrowski envisioned, 600
to 800 ships, and now if you took the people off them, you
could have 1,200 to 1,400 ships out there. With that many
ships, you could consider them semi-expendable, and you could
rest easy if you didn't have manpower on them to help put out
the fires and control the damage. What would life be like in
your yards if you were building six ships a year for each yard?
That is what this would amount to, by the way. They wouldn't be
quite today's ships, but they would be six ships in each yard a
year.
Mr. Petters. Well, Congressman, I guess my first reaction
to that is, if I could be in serial production on any kind of
platform, it would be preferable to building ships one at a
time. And if I could manage the investment stream around a
class of ships instead of trying to do it on an annual basis
the way the budgeting process works, I could also create a set
of efficiencies.
I, frankly, don't think the issue is, what would it look
like in the year that you were actually building six ships of a
different kind? You are talking about a whole different kind of
a concept for ships at that point.
I think the challenge for the industry and for the Congress
in something like that and the requirements piece of it would
be the turbulence of the transition from the large platforms,
the facilities to build large platforms, to creating a
different kind of facility, a different set of qualifications
in our workforce to set up that serial production. That would
be a very turbulent period that would be, you know, a
significant amount of challenges around efficiencies of
investment.
I can point to, you know, just an example of a composite
facility that we have invested in heavily in Gulfport, you
know, creating a new technology for a composite deck house for
the DDG-1000. Those investments were made based on the concept
that this composite deck house would be available for a class
of ships that was a couple of dozen ships. We are now down to
three. And so the return, you know, the managing of that return
is a big challenge.
And so if that is where you are going to want to end up--if
you could say today that we knew for a fact we were going to
end up there, I think we could all chart a path that could get
us there efficiently.
The challenge that I see is that, I am not sure we can
chart that path, you know a 5- or a 10-year path when we move
things around year in and year out.
Mr. Bartlett. With the new Chinese anti-ship missile, I
think having smaller and more is a distinct advantage. And if
we had enough of them that you could consider them semi-
expendable, like we do our unmanned aircraft, then we could
have twice as many ships for the same dollars because half the
cost of keeping a ship at sea is the people on the ship.
Thank you very much, Mr. Chairman.
Mr. Taylor. The Chair thanks the gentleman and now
recognizes the gentleman from Connecticut for 5 minutes.
Mr. Courtney. Thank you, Mr. Chairman.
I wanted to just pick up an item which was in your written
testimony, Mr. Petters, regarding the workforce challenges as
far as the bulges that you sort of have in terms of the
demographics.
In your testimony, you mentioned the fact that Northrop
Grumman is doing some partnering with community colleges and I
guess probably hopefully the vo-tech schools in terms of trying
to solve that problem. The House actually enacted or passed a
bill last year which is waiting, is pending in the Senate, the
Student Aid and Fiscal Responsibility Act, which is basically a
way of sort of reorganizing higher ed assistance that will free
up some dollars in a budget neutral way that I think will be
very beneficial to our country. And one of the aspects of it is
setting up the competitive grant program for community colleges
that show that they are collaborating with business in terms of
workforce needs in their region.
If it does make it through the Senate, who knows, but it
will create I think a lot more financial resources for
community colleges to sort of, again, get more connected to
workforce needs in their areas. Assuming that happens and that
your area of community colleges could sort of expand those
types of programs, I mean, is there more capacity for Northrop
Grumman to grow those types of programs, and would that benefit
your workforce needs?
Mr. Petters. Thank you for the question, Congressman.
It is an area of personal interest for me. I served for
several years on the State Board of Community Colleges in the
State of Virginia, and today I am a member of the Shipbuilding
Executive Team that does that in the State of Virginia. We are
heavily engaged in the Workforce Council in the State of
Mississippi, and we are also heavily engaged in the Workforce
Development Committee in the State of Louisiana. It is so
critical to us that I personally believe that my business has
to be involved in the pipeline of workforce development all the
way from the Governor's office all the way down through the
classrooms and into the shipyard itself.
We have in the past worked hard with the community
colleges, and we have been able to get some Department of Labor
grants for almost exactly the concept of things that you are
talking about. I would have to go back and look at the specific
legislation here, but certainly, the opportunity to compete for
grants that would create alignment between what the community
college's mission is and what our requirements are would be
very beneficial to us.
You know, the challenge for us today is that nobody
graduates anybody with a degree in shipbuilding. You have to
get that by coming into the shipyard. And we have actually been
able to go into the colleges and use some of our training
programs in the community colleges so folks work on their
associates degree on our curriculum, which is actually very
helpful to us.
Mr. Courtney. In the case of EB [Electric Boat], I know for
a fact that this is happening in southeastern Connecticut.
There is a mentoring high school program which EB has had for a
number of years, where students from high school get brought
into the design area with mentors to kind of really--you know,
they have a science and math proclivity, and this kind of helps
them really see an end game in terms of the value of those
skills. And we now have a situation at EB where there are
mentors who are now mentoring high school students who
themselves went through this program 10 or 15 years ago as high
school kids. And Three Rivers Community College, again, does
have those kind of relationships with EB.
But personally, I just feel that this legislation will
provide real resources and also policy to get our educational
system working to help businesses, not just shipbuilding, but
certainly it appears anyway that the demographics suggest that
we really have got to do a better job to produce that. Again I
don't know if you want to comment on it. But again, I really
appreciated your testimony focusing on that issue.
Mr. Heebner. I would make just a brief comment, Congressman
Courtney, and I know we have spoken about this in the past.
Clearly the path to success in a shipyard for a young man or
woman is through experience, but it is also through education.
And while we can do a portion of that in the shipyard itself,
we rely on the local communities at all of our shipyards to
augment that with formal education. We get the net benefit of
that in the shipyard as the individual worker becomes more
proficient at what he does. But we also get the benefit of that
in the community because we have more educated people who are
more engaged in the community and help to set the role models
that others will follow as well as they come along. So it is a
very important part of the development program in each of our
yards.
Mr. Courtney. Thank you, Mr. Chairman.
Mr. Taylor. I am curious, because at different times, both
of your corporations have been to see me and probably every
member of this subcommittee, in, you know, what appears to be a
semi-panic as you are trying to look out for your workforce, as
you are trying to keep your operations going. And the question
that always comes up in the back of my mind is, obviously,
someone saw this downturn coming, no matter what the program
was, a while back. To what extent do your corporations feel
like the Navy is listening when you speak several years out and
say, do you know what? I am going to hit a bathtub of
employment in 2 years. I am willing to negotiate a price, a
little bit better price on another of something that I am
already making, would you be willing to enter into that type of
negotiation?
To what extent does the Navy listen to that type of an
approach from your corporations?
Mr. Petters. Mr. Chairman, I have a personal experience of
going through that in Virginia. In about 2005 or 2006, we saw
that the delivery of the Bush and the delivery of a refueling
overall, coupled with submarine deliveries, would cause us to
have a significant drop-off, which would then translate into a
ramp backup as we started work on the Ford class and started to
build into the two submarines per year.
We started as a management team to start thinking about all
of the different ways you can deal with that kind of an issue,
and we started it 3 to 4 years in advance. We worked our way
through not only the things that we can do, which adjusting our
overtime rates, adjusting our leased employees as opposed to
our hiring rates, trying to manage within an employment ban, so
that we didn't hire people and then just turn right around and
lay them off.
We also engaged with the Navy Carrier Program Office on
this issue. And the Navy Carrier Program Officer over the
course of a couple of years was able to accelerate some work
into the valley. You know, they brought the next refueling,
they brought it into the shipyard a few months early. They were
able to work with us on how we scheduled our PSAs [Post
Shakedown Availability] for the ships we were going to deliver.
And so the Navy couldn't solve the problem alone. We had to do
a lot of work on our part to make sure that we managed it far
enough out from a hiring and workforce perspective. But the
Navy did lean forward in that particular case, I thought, as
constructively as I have ever seen. When we got to 2009, when
we were expecting a couple of thousand people, 5 years ago, we
were expecting a couple of thousand people might be in
jeopardy. In 2009, we didn't lay anybody off.
Now, I can say that, you know, in the carrier business, you
have got a horizon that is long enough there where you can see
far enough in advance. In some of our other programs, the
horizon is not quite that far, and you have to be more reactive
and more responsive, which makes the challenge a little bit
harder you know. And on top of that, you have things that move
around on you, like attrition rates and things like that, that
you might have an estimate that changes which causes you to
make some adjustments.
Where we have been able to forecast far enough in advance
for people to actually take action that would matter, the Navy
seems to have been able to constructively engage in that to the
best of their ability.
On the other hand, I think the Navy is--you know, you are
asking my opinion--I think the Navy is constrained by their
resources sometimes, and they understand that we take two LCCRs
out of the program, that is going to have an effect on the size
of the base. It is. And so I think that that has been kind of
the, that is the challenge that we are up against now.
Mr. Taylor. Given that it is a pretty safe bet that the
centerpiece of the Navy surface fleet for the foreseeable
future will be the DDG-51, do you think the Navy is doing a
good enough job, or those people in the Navy that you deal
with, of trying to gain whatever economies you can from things
that you know you are going to be buying in the near and
distant future?
Mr. Petters. I think the first problem with the challenge
of the restarting of the 51 line is that, whenever you restart
a production line, really smart people sit down and try to
figure out what is the cost? What is the extra cost going to be
associated with gapping the line? What is the extra schedule
going to be required?
In my experience, we have always underestimated the cost
impact and we have underestimated the schedule impact. And I
think that, as we are working our way through the 51 restart,
we are dealing with that, those issues right now, trying to
make sure we have the best estimates of what the cost of
restart is going to be, what the schedule should be. And I
think the Navy has been constructively working with us to
understand that.
But we are not--we are right at the front end of that to
step off and get the program rolling. And my biggest concern is
not really the engagement we have had on the restart of the
program, but it is on the volume following. If the volume of
that program is going to be two-one, two-one, two-one, when the
volume that sustained us in the previous years was three ships
per year, that is half the volume that we had before. And I
think that is--to me, that is the fundamental issue in the
program; it is not really the challenge of the restart. I think
we have good people doing good work to try to figure out the
restart, but I think the volume is a challenge.
Mr. Taylor. Well, toward that end, you know our dilemma; a
shipbuilding budget that has basically been frozen about $15
billion, huge challenges coming down the line with the Ohio
replacement, a $7 billion aircraft carrier. To what extent have
either of your corporations approached the Navy and said, and I
will use the F-18 program as an example, where this vendor came
to Congress and said, you give us a long-term contract, we will
reduce the price of the platform? To what extent have either of
your corporations approached the Navy and said, for this kind
of stability, I will offer you this kind of price? I am just
curious.
Mr. Heebner. I could make an immediate comment on it. I
would like to make two points on it, though.
The first is that I spent 33 years in uniform; 11 of my
last 14 years were in the Pentagon. And I wish I had been as
good as Secretary Stackley at opening up my communications with
my suppliers. I think he has done an exceptional job
understanding the various elements of making decisions about
national security and building ships, at creating an
environment where his staff and the industry can communicate
openly and effectively. So my compliments to the Navy, and
specifically to Secretary Stackley.
A second point is an example. The MLP program that
Secretary Stackley referred to here today was going to be
terminated with the MPFF program. But when we discussed that
with the Navy, we went back to the drawing boards at NASSCO,
and we laid out a program where we could get 70 to 80 percent
of the capabilities in the ship that was required for 50
percent of the cost or thereabouts. And we worked hard on doing
that and with the Navy, to make sure that it would work for
them.
Now, as it turns out, after reviewing their requirements
and our capabilities to deliver a ship at a lower rate, we came
to a mutual agreement that it was in fact possible. So it is
clear to me that the environment is healthy, and we can have
discussions like this between industry and the Navy.
Mr. Taylor. I am curious, I will mention to both of you
that, since the Stackley plan, and I think credit is due to him
on bringing some stability to the LCS program, since the
Stackley plan has become the congressional plan, I have been
approached by at least one yacht maker and several people who
build offshore supply vessels as to their interest in bidding
on the second five, the second block of five. I was curious if
either of your corporations are looking into bidding on the
second block of five LCSs.
Mr. Petters. We are interested. We are looking at both
programs, and we will be doing evaluations about our fit on the
program.
Mr. Taylor. Mr. Heebner.
Mr. Heebner. And a similar comment. We have looked at both
ships and the capabilities within our yards--and I say that
with an S, because I have to look at it that way--that we do
have the capabilities to build either of those ships, and we
will look carefully at what the requirements are and how we can
most effectively compete in that competition.
Mr. Taylor. Mr. Petters, my last question goes to your
remark, and actually both of you touched on a very high
percentage of your subcontractors are sole-source contractors
to you. Given the economic environment in America today, given
the record low prices that I am seeing for public works
projects across the country, the record number of bidders on
construction projects, publicly funded construction projects
around the country, my instinct tells me that there should be
the same thing throughout America's industrial base. And my
instinct tells me that, you know, with the price of metals
being approximately one half of where they were 2 years ago,
that there ought to be some bargains out there.
Now, Mr. Petters in fairness to you, in your recent visit
to Mississippi, you pointed out to me the amount of time it
takes to get a contractor approved by the Navy. Keeping that in
mind, do you feel like that the Navy is resourcing enough
people and the right people toward bringing as many
subcontractors as possible on line to broaden both of your
industrial bases?
And I am just curious, let's take a valve for an example. A
valve manufacturer comes to both of you. I want a bid. I think
we have the technology. We have the people to make this valve.
They are not on the approved vendors list. What is the process
that you go through to get them approved, and approximately how
long does it take? Or if you have a better example, I would
like to hear it.
Mr. Petters. I will walk you through a hypothetical if you
would like. It will help illustrate it. And I can take the
question in detail for the record if you would like.
But hypothetically, if you were a manufacturer of a product
that you sold commercially in a retail environment and you sold
it at a hardware store, at a pump to the offshore rigs or
things like that, and you saw that there was a requirement to
sell that valve to--the Navy had a requirement for a 2-inch
valve that had this kind of flow rate and that matched the
valve you were using, there would be, depending on the ship,
depending on the design, the criticality of the systems, there
would be a set of requirements that you would be asked to check
off as the supplier, things like, have you shock qualified the
valve? Does it require an acoustic qualification? Are the
materials U.S. materials? Do we have specialty materials
involved? Do you have a cost accounting system in your company
that can separate the cost of the government work from the cost
of your nongovernment work? Would you have, be able to support
a quality organization that would be there to support the
Navy's or the government's requirements for validation of the
pedigree of the valve and the organization of that?
And I think that the challenge you have is that, because I
thought about it again after our conversation last week, I
think the challenge you have is that you have a lot of folks
who would like to do this work, but when they step back and
look at the history of the work, they don't see enough
predictability or sustainability there to warrant the kind of
investment to go do those kind of things to get qualified to go
into it. That is not a worker issue. That is a business issue.
And so my sense of this, as we go out into the marketplace,
is I know of companies who start up. And one of the
requirements when they start up is that they will not do
government work because they don't want to have to deal with
separating their government cost collection system from their
other cost collection systems, and they don't want to deal with
the tracking of special pedigree of materials and go through
the shock qualifications and the acoustic qualifications you
have to go through. I think that is the fundamental issue.
And so all of those things become barriers to entry, if you
will, for the people that are in the business. And so, for me,
that--when we talk about them being sole-source, those barriers
to entry are really the sole-source piece of it. And for me,
the issue then is they are sole-source, now I have to manage
them from a consistency of demand issue. And we have
demonstrated over the past 10 years that, even when we have
gone sole-source in a large way like we have on the submarine
program, we have consistent demand. We have predictable demand.
We are able to manage the cost.
Mr. Taylor. Mr. Heebner.
Mr. Heebner. Mr. Chairman, I would like to answer that
question just slightly differently.
At these hearings, Mr. Petters and I get to speak on behalf
of the shipyards. I think somebody needs to speak on behalf of
the suppliers as well.
And I would just make the point that, by definition,
single-source suppliers does not mean inefficient or
overpriced. I think the fact is that people are working hard
out there to keep their prices down, and we have within our
procurement systems checks and balances to make sure that what
we are paying for products are in fact fair return for a fair
investment. So I don't by definition start out with the
assumption that they are not efficient.
I certainly subscribe to what Mr. Petters said in the sense
that qualifying suppliers is an arduous process that is
established by rules that must be followed. But I give a lot of
credit to our suppliers today who have stuck with us in this
process of reduced production, and I think we should recognize
them and pat them on the back for what they are doing to keep
supplying important parts for us.
Mr. Taylor. Absolute last question. In today's environment
and given an excellent conversation I had on the streets of
Biloxi this weekend with a shipyard worker, I would hope that
both of your firms are making every effort to hire Americans
first. And what is the policy of your two particularly when it
comes to defense-related work? What is the policy of your two
companies?
Mr. Petters. In our nuclear work, we have an American
citizenship requirement. In our nonnuclear work, the
requirement is not quite as rigid as that. And I will get to
you for the record exactly what our rules are if you would
like.
Mr. Taylor. I would like that, sir.
[The information referred to was not available at the time
of printing.]
Mr. Petters. But we are looking for American citizens.
Mr. Taylor. Mr. Heebner.
Mr. Heebner. And I think it best that I take that for the
record because I don't have a complete answer for you.
[The information referred to can be found in the Appendix
on page 109.]
Mr. Taylor. That is fair. But if you would, a couple of
weeks response. Thank you.
Again, the Navy is hiring 5,000 acquisition specialists.
When people at some of the shipyards are telling me that the
price of their subcontracts is increasing by 30 percent in a
time when government contracts that normally get 5 bidders are
getting 30 and when things are regularly coming in at 10, 20,
30 percent below the estimated cost for other government
contracts, there is a part of me that says, why aren't we
experiencing the same savings? And so if our 5,000 new Navy
acquisition specialists can help you to do that and if you need
the legal authority to make that happen, I would hope that both
of you gentlemen would be making some suggestions to this
committee.
Again, I thank you very, very much for appearing before
this committee. I apologize for the late delay and for keeping
you so long.
Are there any further questions.
The committee stands adjourned.
[Whereupon, at 6:06 p.m., the subcommittee was adjourned.]
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A P P E N D I X
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
March 3, 2010
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RESPONSE TO QUESTION SUBMITTED BY MR. TAYLOR
Mr. Heebner. The vast majority of employees at the three General
Dynamics shipyards have been hired from within their local communities.
No H2B visa holders (temporary foreign production workers) are
employed at the General Dynamics shipyards.
All employees at two of our shipyards, Bath Iron Works and Electric
Boat, are US citizens.
Due to its' location and unique regional demographics, GD-NASSCO's
workforce consists primarily of US citizens but also includes a number
of legal permanent residents (green card holders)--eligible to pursue
naturalization (US citizenship), and all of whom have gone through
company background checks. [See page 49.]
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