U.S. Department of Defense
|Presenter: Deputy Assistant Secretary of the Navy for Budget Rear Admiral Brian E. Luther||February 13, 2018|
LT CHATMAS: Ladies and gentlemen, thank you for being here. I would like to introduce Rear Admiral Brian E. Luther, deputy assistant secretary of the Navy for budget. After he presents the Navy's PB19 budget, time permitting, he'll be available to answer questions.
Without further ado, Admiral Luther.
LUTHER: Thank you.
Good afternoon. I'd like to thank you for the opportunity to brief the Department of the Navy's Fiscal Year 2019 President's Budget request.
This brief address is the third step of the Department of Defense's multi-year effort that increases funds to build capability and capacity.
The first step began in February 2017, with our request for additional appropriations to address immediate warfighting needs.
The second followed closely in May, with our Fiscal Year 18 request which, when enacted, will address multiple holes or programmatic deficits caused by the Budget Control Act, or BCA, and numerous continuing resolutions, or CRs.
Next slide, please.
The agenda for the brief is listed here.
The funding priorities set by Secretary Mattis in January 2017 remain, and I will briefly touch on the new National Security Strategy and the National Defense Strategy, which, going forward, I will refer to as the NDS.
The NDS calls for sustained and predictable funding. I will discuss how the increased funding of the recent Bipartisan Budget Act, or BBA, completes the third step, in alignment with the NDS.
I will close the brief with topics of reform and audit, as the Department understands and appreciates the responsibility associated with the stewardship of the trust and treasure of our nation.
The next slide begins with the recently published National Security Strategy, which identifies four vital national interests: protect the American people, homeland and way of life; promote American prosperity; preserve peace through strength; and advance American influence.
In alignment with the National Security Strategy, the NDS directs the Department to compete, deter and win in a strategic environment described as an "ever-more lethal and disruptive battlefield, combined across domains and conducted at increasing speed and reach."
It also identifies that long-term strategic competitions with China and Russia are the principal priorities for the Department, which require both increased and sustained investment.
Concurrently, Navy and Marine Corps forces will be tasked to deter and counter aggressive rogue nations like North Korea and Iran, and defeat terrorist threats to the United States.
The NDS has three lines of effort: rebuild military readiness as we build a more lethal joint force; to strengthen alliances as we attract new partners; and reform the department's business practices for greater performance and affordability.
The Department of the Navy component of the NDS will be addressed through the secretary of the Navy's priorities of people, capability and processes; the Navy's overarching plan, known as The Navy the Nation Needs; and the Marine Corps operating concept, which will generate the force of choice.
The NDS lays out threats facing our country in the next slide, which shows how operations are contested in every domain by great power competitors, unconventional forces, by state and non-state actors, all of which seek to challenge the rules-based global order and threaten the global security environment.
The global employment of naval forces remains extensive, as shown on the next slide. At this moment, over 100,000 sailors and Marines are forward-based or -deployed around the world.
A few examples from the last year are: in November, seven of the fleet's 11 aircraft carriers were operating underway at the same time. Three–the USS Ronald Reagan, Nimitz and Theodore Roosevelt–were on deployment. The USS Carl Vinson and John C. Stennis were training in the Pacific. And the Abraham Lincoln and the Gerald R. Ford were operating in the Atlantic.
The Kearsarge Amphibious Ready Group, with other ships, was deployed for more than two months to support multiple hurricane relief efforts after Hurricanes Harvey, Irma and Maria caused damage across Texas, Florida, the Virgin Islands and Puerto Rico.
And as a testament to our ship depot maintenance efforts, the 220-year-old Constitution left dry dock after a two-year restoration.
This slide shows the hotspots and choke points of today, many of which the sailors and Marines aboard a newly commissioned Constitution would recognize.
The next slide represents the environments for today's sailors and Marines. Next slide, please.
The NDS describes growing competition in general, and this slide shows the specific importance of the maritime domain. Displayed in white is shipping traffic, which represents 90 percent of global trade. Under the sea is an area of increasing importance as well.
The tan lines represent undersea cables, over which 99 percent of all international data is carried. Not only are those cables eight times faster, but only 3 percent of that data could be reconstituted using satellites. The red circles show conflict zones or hot spots, where transits through the sea could be easily impeded. The green circles represent major shipping ports. Blue cloudy areas to the north are ice caps for emerging shipping lanes. Purple areas are oil and natural gas resources. And diamonds are mineral deposits. Trade, information, resources and free access to all are critically important to the continued prosperity of the global economy.
Next slide, please.
The NDS has stated that we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding. That erosion is displayed on this slide as the gray area, and is the difference between the black line, which represents the 2012 budget, the last instance where strategy and budget were aligned, and the purple line, which represents inactive budget values.
The areas founded in time at FY 17 as the increases in Fiscal Year 18 were provided to address these readiness shortfalls. The gray area then represents the deficits accrued across all capabilities that create our military advantage and sets the recovery challenge before us. As this erosion accrues over time, it will take time to restore it.
The final requirement for the restoration of readiness is the stability of both time and resources. Assuming the BBA is enacted in late March, the first 18 months of FY 17 and 18 will include the longest CR in DOD history, the fourth longest CR in DOD history, five months of enacted budget authorities across two fiscal years, and two government shutdowns.
When this brief was built, we were executing Fiscal Year 18 under three possible funding levels, which is displayed on the slide: a CR funding, president's budget submitted, or possible congressional action. The BBA has already provided needed predictability by clarifying the funding levels for 18 and 19.
The 2012 NDS saw the nation at a period of transition as Al Qaida was on the path to defeat and the passage of the then-BCA, it directed a smaller, leaner force with a global presence and the ability to defeat and deter adversaries.
The current NDS states interstate strategic competition and not terrorism is now the primary concern in U.S. national security, and directs departments to build a lethal joint force sufficient to sustain American influence and ensure favorable balances of power that safeguard the free and open international order.
As mentioned earlier, long-term strategic competition is the principle priority for the department, and require increases in sustained investment.
This concern was addressed by BBA, as shown on the next slide.
While the final enacted numbers of FY 18 are being worked, we now know the DOD toplines for 18 and 19.
The need for stable and predictable funding is highlighted here, as well. Stable and predictable funding restores time to the services to execute the plans that were deliberately created to build the lethal joint force required by the NDS.
The Marine Corps' overarching plan to support this strategy is referred to as the Marine Operating Concept, which generates the force of choice. The Navy's overarching plans to support this strategy is referred to as the Navy the Nation Needs. The pillars common to these plans are readiness, capability, capacity, manning, network and operating concepts.
The department is grateful for the increased funding and has worked diligently in this request to ensure the funding provides and protects and sustains the readiness gains of 18 and creates a balanced warfighting force with the capabilities needed for the fight and the capacity to win the fight.
After two congressional emergency budget amendments, the FY 18 request totals $181.4 billion; $172.8 on base, and $8.6 billion in OCO. This request increases $12.6 billion, to a total of $194.1 billion; $179.1 billion in base, and $15 billion in OCO.
The final split between base and OCO is being worked as part of the BBA. As the split may change, the accounts have been totaled, with the current split provided parenthetically.
Operations and maintenance increased $800 million, to $63.4 billion; military personnel increased $2.1 billion, to $50.2 billion; procurement accounts increased $8 billion, to $58.5 billion; research and development increased $800 million, to $18.6 billion; infrastructure increased $900 million, to a total of $3.4 billion.
The next section of slides provides a detailed overview of how the department balanced funding increases across the pillars to generate the lethal naval and Marine Corps elements of the joint force.
Our ability to complete our mission rests on the entire Navy-Marine Corps team, sailors and Marines, active duty and Reserves, our civilian teammates and all of our families.
In this request, the active Navy force will increase 7,500 billets, to a total of 335,400. This growth will eliminate gaps at sea as well as grow the force to match additional force structure. This growth will use a balanced approach of retention and accessions.
We are beginning to see the impacts of an improving economy on our recruiting and retention, as we increasingly compete with the civilian sector for the same talent. To better compete, this request funds a pay raise of 2.6 percent and substantially increased both enlistment and retention bonuses.
Specific growth in this request includes funding our total ownership cost, strength increases for four CGs, completing phase modernization, and to support Special Operation Force growth.
In this request, the Navy Reserve force will increase 100 billets to support operational requirements.
In this request, the active Marine Corps force will increase 1,100 billets, to 186,100. The increased number of Marines is informed by the Marine operating concept, and is balanced across the pillars to provide a more experienced, better-trained and more capable force with the special skills required for special operations, intelligence operations, electronic, information and cyber warfare.
In this request, the Marine Corps Reserve remains at 38,500. The Marine Corps Reserve maintains a ready, relevant, responsive force to fill combatant commander and service rotational and emergency requirements.
In civilian personnel, this request funds the additional workforce necessary to sustain readiness and support the increasing capability and capacity required to support the Navy and Marine Corps.
To accomplish this, the Department budgeted an additional 3,187 full-time equivalents to sustain readiness improvements. For example: in our ship depot maintenance efforts, in efforts at our warfare centers with a focus on increasing our air, surface and undersea capabilities.
The Department maintains its progress towards major headquarters activities reduction and, in this request, reflects a decrease of 97 FTE from Fiscal Year 18.
Ship depot maintenance is funded as max executable, or 96 percent of the requirement. This request increases slightly from Fiscal Year 18.
The blue hatched area denotes $673 million provided by Congress for the repairs of the Fitzgerald and McCain, the bulk of which will be conducted in the shipbuilder yards.
This request funds 57 maintenance availabilities across public and private shipyards: eight carrier availabilities, eight submarine availabilities and overhauls, 40 surface availabilities, and one service craft overhaul.
Ship operations is funded to 100 percent of the requirement, and as with last year's request, it funds 58 days underway per quarter when deployed, and 24 days underway when not deployed.
The ship operations growth from 18 to 19 is comprised of higher fuel costs and the addition of nine new warships and two ships in our MSC charter fleet.
In aviation readiness, our aircraft depot maintenance is funded to max executable capacity, which, this year, increases to 92 percent of the requirement. This request increases slightly from Fiscal Year 18, and our increased capacity is largely due to investing in people, yet we remain limited by space and older tooling, in which we continue to invest.
The Flying Hours Program is funded to a maximum executable level of 95 percent of the requirement. This request decreases slightly from Fiscal Year 18 as a result of lower cost per hour and the Navy's divestiture of legacy Hornets.
This request continues to build on our 18 request, and adds additional funds to critical aviation logistics and maintenance accounts, such as aviation logistics, aviation support and aviation spares, which are funded in APN.
The aviation logistics account increased 11 percent, to a high of 98 percent of the requirement. The $173 million increase provides for maintenance costs associated with more F-35s, KC-130Js and MV-22 aircraft entering the fleet.
Additionally, this request continues to invest in aviation support accounts to improve aircraft availability, and also includes an increase to support aircrew systems physiological episode mitigation efforts.
Program-related engineering and logistics is funded to 100 percent of the requirement. This account also funds critical chain initiatives to improve depot throughput and increased hiring of planning, engineering and maintenance support manpower to align the workforce to the projected workload.
Our aviation spare funding increases from 91 percent to 95 percent of the requirement. Given that our aviation support or enabling accounts have all increased, it's important to note the true output metric is flying hours. Flying hours are flown daily, and are significantly impacted by CR levels of funding. On-time enacted budgets are critical to our readiness recovery.
Next slide, please.
Navy and Marine Corps installations enable fleet operations, equipment reconstitution, materiel sustainment, total force training, unit recovery and quality-of-life programs. This request increases sustainment funding to 80 percent of the requirement for the Marine Corps, and the Department is on track to increase those levels to 85 percent of the requirement by the end of the FYDP. The blue hatched area indicates the additional $262 million provided by Congress to address hurricane damages.
$153 million was added in this request for demolition to remove excess infrastructure. The request includes a 12.7 percent capital investment in shipyard depot maintenance, exceeding the 6 percent legislative requirement, which demonstrates the department's commitment to capital investment at our shipyards, fleet readiness centers and Marine Corps depots.
The Department continues to take risks in funding installations but mitigates this risk by focusing investments on critical components that directly support warfighting operations and ensure the health and safety of sailors and Marines.
Marine Corps ground equipment is funded to depot execution levels, which increased -- 82 percent of the requirement.
Reset is 99 percent complete, with an estimated completion date of third quarter 19. Funding for operational force readiness declined slightly as a result of business reforms that allowed reinvestment in critical modernization efforts.
This reduced request does not result in reduced readiness, and provides investments in the following programs: long-range precision fires; High-Mobility Artillery Rocket System, or HIMARS; air defense; the Ground/Air Task Operated, or G/ATOR, Radar; Ground-Based Air Defense Future Weapon Systems; C2 in a degraded environment; Network On-The-Move tactical communication modernization, and projected enhanced maneuver Amphibious Combat Vehicles, ACBs, or Joint Light Tactical Vehicles, JLTVs.
The department appreciates the strong support in Congress for naval shipbuilding. New construction totals have increased since last year's plan, with three additional ships added in this request: one DDG 51, one expeditionary sea base and one fleet oiler, for a total of 10 battle force ships in Fiscal Year 19.
Throughout the FYDP, the department added a total of 11 ships in the battle force count. The department expects to be at 326 ships by Fiscal Year 23, and 355 by the 2050s.
Specific key efforts for this request include continuing the Columbia-class program in its third year of advance procurement, and it remains on schedule for its first deployment. The USS Enterprise is in its second year of funding, and the delivery date remains September of 2027.
Continued procurement of two of our Virginia-class submarines in the Block V multi-year contract -- all future Virginia-class will have the acoustic superiority upgrade, and the second ship of this year begins incorporation of the Virginia Payload Module.
An increase of one Flight III destroyer in each year of 19, 21, 22, and 23, for a total of four additional DDG 51s in the FYDP.
The remaining LCS completes the program and supports the transition to the FFG(X) in Fiscal Year 20.
One ESB was added in 19 and one programmed in 20, for a total of two ESBs added in the FYDP. An increase of one oiler in Fiscal Years 19, 21, and 23, for an increase of three in the FYDP; an increase of one T-ATS towing, rescue and salvage ship in 20 and one TAGO ship in Fiscal Year 23.
Other ship construction includes request for two LCUs in 19 and five ship-to-shore connectors requested in 19, increasing to eight ships a year, 20 to 23, for a total of 12 additional ships in the FYDP.
There's additional information available on the 30-year ship acquisition plan, which has been released today and can be found on our website. Next slide, please.
The department appreciates continuous support by Congress for naval aviation. All major aviation acquisition programs remain consistent or increase from 18 to 19. There's a net increase of 29 aircraft from the President's Budget 18 submission.
In this request, there's an increase of five F-35Cs, 10 F-18s, three P-8s, two C-40s, four 53Ks, one Navy MV-22, and three Zulu Cobras and six presidential helos. There is reduction of one E2D and four STUAS.
Specifically, the F-35 increased four to nine aircraft, as scheduled in the second year of their Block V. The F-18s were increased by 10, for a total of 24, to support a follow-on multi-year procurement, beginning in 19, which will include the Block III upgrade. Additionally, there's an increase of 34 aircraft programs across the FYDP.
The E2D was reduced five to four aircraft to support a follow-on multi-year profile, beginning in 19, with a total procurement of 24 aircraft. This will complete the program of record with 75 aircraft.
The P-8s increased three aircraft in 19, bringing procurement from 7 to 10, and has an additional three aircraft programmed in 20. An increase of six would complete the program of record at 117 aircraft.
The C4A increased two aircraft in 19. The CH-53K increased from four to eight aircraft, as low-rate initial production, or LRIP, begins and keeps the schedule on track from initial operating capability, or IOC, of Fiscal Year 20.
The Zulu Cobras increased from 22 to 25. This completes the program of record at 342 aircraft. The VH-92A, or Presidential Helo, increased zero to six aircraft, as scheduled for its LRIP. This program is a new start in 19, will IOC in 20, and will complete in Fiscal Year 21.
The CMV-22 increased six to seven aircraft to meet its IOC in Fiscal Year 21. And the RQ-21 STUAS end of procurement profile was reduced from four to zero systems.
All major weapons acquisition programs remain consistent or increase from 18 to 19 and support the Department's goal of increased capability and/or increased capacity.
The tactical Tomahawk includes the A2AD upgrade with its recertification and the maritime-strike Tomahawk starts in Fiscal Year 20.
The SM-6 quantity increased 25 in order to support a five-year multi-year. Multiple programs, to include the RAM Block 3, Mark 48 heavyweight torpedo, LCS over the horizon missiles, the standoff precision guided munition, or "Griffin," AIM-9X Sidewinder, AARGM Block 1, JAGM, and small-diameter bombs were increased to meet capacity requirements.
The Mark 54 Lightweight Torpedo reduced quantity in order to fund lethality improvements in shallow-water capability and counter measure effectiveness. LCS surface-to-surface mission module decreased to align with program capacity.
The AIM-120 AMRAAM production is set at capacity due to a parts-obsolescence license issue that we are working to correct.
And the Hellfire and Maverick procurements were reduced to reflect reduced OCO requirement.
This request includes key investments in cyber, C4I, and electronic warfare. Cybersecurity and its ability to ensure the resiliency of our networks and operational technologies is a Department priority.
Programs providing increased capacity and capability in this domain include CANES, the Consolidated Float Networks and Enterprise Services program, which provides the infrastructure and services required for the Navy to dominate the cyber-warfare domain. The Navy Multiband Terminal System will ensure survival of communications during all levels of conflict.
Various communication enhancements to meet emerging communications threats, such as the assured command-and-control upgrade, which allows the fleet to operate contested and denied environments.
This request also increases Surface Electronic Warfare Improvement Program Block 2 units by six to a total of 16, and SEWIP Block 3 units by two for a total of four.
In addition to the efforts already mentioned, the Department is investing in other modernization programs. The DDG modernization program includes all improvements in integrated air and missile defense, the Navy Integrated Fire Control-Counter Air, NIFC-CA, and cooperative engagement capability.
The Submarine Warfare Federated Tactical System provides hardware and software upgrades to submarines' sonar, fire control, imaging, electronic warfare systems for SSNs, SSGNs and SSBNs.
The naval shipyard monetization funding is increased 46 million to a total of 197 million in this request, to recapitalize industrial plant equipment, weight handling equipment and nuclear support equipment infrastructure.
The improved maintenance capabilities provided by the service life extensions for 25-ton portal cranes, 175 ton heavy-lift cranes, 60 ton dock cranes, and improved shipyard systems such as flush systems will contribute to decreasing availability costs, reduce schedules, and so return ship mission days to the fleets.
Next slide, please.
The Marine Corps continues to bounce ground equipment procurement and future development to support the current fight, while modernizing to dominate the future fight. The procurement Marine Corps request funds major programs including initial procurement of 30 ACVs, six G/ATOR systems, and 1,642 JLTVs.
All major acquisition programs remain consistent or increase, with a few exceptions.
ACVs increase procurement by four vehicles, plus the procurement of the related support items. The estimated approved acquisition objective of 204 vehicles will be achieved in Fiscal Year 21.
G/ATOR procurement increased three to six systems as part of its first year of full-rate production. JLTV increased 1,115 vehicles with this request.
This request also supports the reactivation of the 5th Battalion, 10th Marine Regiment as a HIMARS rocket battalion and supports procurement of HIMARS systems and support equipment for the new battalion and an associated increase of the total munitions requirement for rockets.
For Procurement of Ammunition Navy-Marine Corps, it buys vital munitions and related weaponry for the warfighter and replenishes weapons expended in ongoing contingency operations. This request provides for munitions such as the Joint Direct Attack Munition guidance systems and Advanced Precision Kill Weapon System rockets used to combat ISIS, five-inch 54 rounds for cruisers and destroyers, and 155-millimeter precision-guided artillery used by the Marine Corps.
In the research and development appropriation, this request provides for science and technology funding consistent with our 18 levels; decreased funding for the Columbia-class submarine as the program moves from contract design to detail design, which is SCN-funded; continued support for the FFG(X) development; increased funding for the Navy laser family of systems, which is a designated Rapid Prototyping Experimentation and Demonstration initiative, or RPED, to provide near-term ship-based laser weapon capabilities.
And it provides for increased funding in our unmanned undersea vehicle, which will accelerate future capability and support steady growth in the fleet's Family of Systems; increased funding for unmanned aerial vehicles, which will support acceleration of vital UAV fleet capabilities; increase for the MQ-25 Stingray to meet a fleet IOC of 2026.
The Marine Corps's initiatives support improvements in current systems, such as ACVs, JLTVs, HIMARS, and G/ATORs; future systems, such as the Ground-Based Air Defense future weapon system and the MUX UAS.
The Department continues to support the Marine Corps Rapid Capability (sic) Office and the Navy RPED initiatives, focused on the expeditious development, exploration and fielding of innovative combat system technologies and engineering prototypes to provide advanced warfighting capabilities across all naval warfighting domains.
Next slide, please.
This request reflects a 48 percent increase of military construction and funds 49 projects, including 33 for the Navy and 16 for the Marine Corps. Nearly half are in direct support of the secretary of defense's lines of effort to increase lethality with new platforms and strengthen alliances through the European Deterrence Initiative.
The remainder focus on targeted investments to provide maximum readiness and warfighting capability. These include shipyard maintenance projects at Portsmouth Naval Shipyard to support submarine force structure and maintenance requirements, such as the new dry dock or extended portal crane rail; warfighting readiness projects, to include pier replacement at Naval Base San Diego; and a causeway, boat channel and turning basin at Naval Weapons Station Seal Beach.
Investment in new platforms and technologies include a submarine propulsor manufacturing support facility at the Philadelphia Naval Shipyard and the directed energy systems integration lab in Naval Base Ventura County.
Global posture is supported by improvements to port operation facilities at Naval Station Rota; and a Joint Mobility Processing Center at Souda Bay; P-8 hangars in Sigonella; logistics supports at Sigonella; and various P-8 taxiway and air apron improvements.
Construction of four projects in Guam supports the relocation of Marine Corps forces from Okinawa and provides facilities to meet current and future aviation training requirements.
The family housing budget includes the operation, maintenance, capitalization, leasing, privatization, oversight of the Department's family housing worldwide.
OMB has directed reforms that should include a lean, accountable, more efficient government that works for the American people. The Secretary of the Navy challenged the Department to improve our processes and drive efficiency to ensure mission success today and in the future.
The Department appreciates the responsibility associated with the efficient, effective use of additional funds provided by the BBA over the next two years.
One fiscal reform has been the Department's focus on improving the expenditure of funds through an emphasis on the quality of our obligations. Leadership is committed to ensure that a dollar appropriated to the Department is expended by the Department to achieve the direction laid out by the NDS.
Additionally, the Department has reviewed duplicative programs or programs that are no longer mission-essential. This has resulted in the divestiture of legacy F-18 Hornets, transitioning the HH-60H Reserve squadron from legacy aircraft to newer MH-60S aircraft, and a review of Marine Corps training munitions.
This request supports auditability goals set by the Congress and Department of Defense. The Marine Corps was the first service to undergo a full-scope audit on all of its statements. The findings from this audit have served as a lessons-learned for the Navy and other services.
The Navy began a full-scope financial statement audit on all four of its financial reports in January. Navy and Marine Corps financial statements will be completely integrated for audit beginning in 2020.
Annual financial statement audits will highlight changes which must be made to bring the department in line with accepted business practices, and will also spotlight progress in moving towards compliance.
Going forward, leadership has a two-prong strategy to tackle audit deficiencies and achieve a favorable audit opinion. They will be pursued simultaneously. First, achieve an auditable baseline; and second, ensure system, data and process improvements made over time can be sustained.
The Department is fully committed to the audit effort in transforming our business culture by adopting strong internal controls consistent with industry standards.
Secretary Mattis closed the National Defense Strategy with a challenge to use creative approaches, sustained investment, and disciplined execution to field a joint force, fit for our time; one that can compete, deter and win in this increasingly complex security environment. This budget answers that bill.
This completes my overview. And I look forward to your questions.
LT CHATMAS: Thank you.
That leaves us with about ten minutes for questions. I ask that you state your name and your organization, and please limit it to one follow-up question.
QUESTION: Hi, Lara Seligman, Aviation Week.
I understand in the Nuclear Posture Review that was rolled out, there was a discussion about a sea-launched cruise missile -- a nuclear-tipped sea-launched cruise missile, as well as modifying a small number of the existing ballistic missiles with low-yield nuclear warheads.
So, I am wondering if any of that is going to be reflected in the (inaudible), if you could give us any information about how much R&D funding is going into that?
LUTHER: No, I think that -- that is the beginning salvo for determining what the requirements are in follow-on investment.
QUESTION: So there's not going to be anything in the -- this budget about that?
LUTHER: No, not in this -- not in the exhibits for this budget.
QUESTION: Admiral, Rick Burgess, Seapower Magazine.
I noticed in the aircraft table, you had a new training helicopter starting next -- in '20. Is that going to be a program of record, or will that be a leased system? Have you all determined that yet?
LUTHER: That will be a program of record to procure it for replacement for the aviation training, yes.
LT CHATMAS: Megan?
QUESTION: Thank you. Megan Eckstein, USNI News.
So, in the effort to get up to 355-ship Navy, we've been hearing that it has to be a two-pronged effort with certified extension programs for existing ships and building new. But I was wondering what you have in this budget on the SLEP side of things.
And then also, within shipbuilding, there seems to be a couple billion dollars that don't necessarily equate to new ships, particularly in the SSN program. So I was wondering if you could explain a little bit what that funding goes for.
LUTHER: So, I'll start with the latter part of your question.
So the -- there's $3 billion for advance procurement for Columbia, and there are $1.6 billion associated with carrier advance procurement. So that -- that's $4.6 billion that doesn't have an associated tick mark for a ship in the SCN Program.
There are six cruiser SLEPs funded in this, and one, the -- the precursor funding required for an SSN SLEP in this account, as well.
In the -- the specifics associated with the 30-year ship acquisition plan going out would be in the document that's provided on the website. So -- but there's stable and sustained funding as part of it, which is in this FYDP. And yes, as you said, SLEPs are another thing that are included in this FYDP.
QUESTION: If I could just (inaudible), I said the -- the $7.2 billion for the SSN funding, (inaudible) that includes funding for SSNs as well as the carriers and the (inaudible)?
LUTHER: Oh, I'm sorry. I thought you said "SCN" for -- so --
QUESTION: So with that Virginia-class program, there's $7.2 billion?
QUESTION: So I know that includes some advance procurement, and some economic order quantity funding.
QUESTION: Is that specifically for the attack submarines, or does that help --
LUTHER: For -- yeah. It's -- if it's in the Virginia line, it's for the Virginia. Yeah.
LT CHATMAS: Tony?
QUESTION: Tony Capaccio with Bloomberg.
On the shipbuilding issue, going to 355, did you say the Navy hopes to hit that goal by the 2050s?
LUTHER: Early 2050s, yeah.
QUESTION: And yet, you're going to hit 320 by 2023.
LUTHER: 326, yes.
QUESTION: What's the planning assumption for that? Because you're going for -- increasing by 40 ships by 2023, and then --
LUTHER: So again, I -- I would, outside of the FYDP is the purview of the 30-year ship acquisition plan.
So inside the FYDP, as -- as I discussed with Megan, we balanced the resources across the pillars that I mentioned: so, the readiness, the capability, capacity networks, people and operating concepts. And so, in that, we made the best decisions on what ships to buy, and what ships were suited for SLEP improvements.
And so, that's how you got the additional ships, 11 ships in the FYDP, for a total of 54 Battle Force ships in the FYDP. And then the SLEP -- the candidates for the SLEP.
Outside the FYDP, it'll be a constant iteration as you run through the balancing across those pillars, and other considerations for the industrial base, that really are not a purview for this FYDP, because I -- I don't not have that.
QUESTION: A quick board question. You were supposed to do the full ship shock testing in fiscal 19, as three years ago you were directed. The Navy removed the money in this budget, even before Secretary Mattis waived -- granted a waiver. Can you explain why that was, why the money wasn't included?
LUTHER: So the -- I -- I -- there's an ongoing communication with OSD, and -- and the Navy has that under review with our RD&A, and with AT&L, and we were briefing that up to OSD. So we are confident in -- in the data that was provided for the full-ship shock trial, and our plan for when it would be done.
So it's -- it's on -- it's an ongoing discussion between the Navy and OSD.
QUESTION: I've got to ask you, though, if he says, "No, do the tests in 19," where's the money going to come from?
LUTHER: Then that would be a -- we have an alternate plan that we will work, and we'll address that in 19.
QUESTION: So end-strength, it looks like you're looking at 344 or -8 by 2023. Are you confident that's enough to man 326 ships, and that's with training, and shore-side support and all that? Or is that, kind of, a provisional number, until you get the mix right?
LUTHER: I think that the number that is identified in FYDP matches across the pillars and the ownership cost that we identified. So we grow in lead of some of the equipment that it's arriving because you have to train the people before the ship that's there.
So, but it is match. When I say that the balance, we balanced across all; there was a disciplined approach, so that we did not procure a ship without people, we didn't procure a ship without armaments, we didn't procure a ship without ordnance, so it is aligned across all. It's a very balanced discipline approach for all of those readiness pillars or --
QUESTION: And just a real quick follow up on the six cruiser modernizations, would those be the six part of the program of record for the 321 plan or is that the --
LUTHER: It's an additional six that were done as they reviewed. It's --
QUESTION: Okay. So these are --
LUTHER: These are separate.
QUESTION: Okay. Got it.
LUTHER: So, as part of the plan, they looked -- four (inaudible) they identified candidate ships with sufficient life that it would be worth.
QUESTION: Right. I got it.
LUTHER: So, separate effort.
QUESTION: (Hudson) Hi, could you talk a little bit about the one ship LCS in 19? Is that enough of a bridge for FFG(X) for the industrial base?
LUTHER: We believe it is and the -- in building the ship acquisition plan, small-surface combatants has a requirement for 32 ships, and the program ship in 19 is the 32nd small combatant ship. So we feel it meets the requirement, and it's sufficient bridge to get us to the FFGX program.
QUESTION: Hope Seck with military.com.
Could you provide a breakdown of the bonuses and incentives you mentioned that are built into this budget request?
LUTHER: I believe it's $88 million, but we can get you the specifics after, if I can take that.
QUESTION: Okay. If I could follow up on -- could you break down the decreased OCO funding? I know you said the numbers are not completely firm how that breakdown is going to be, but that's nonetheless a significant increase there.
LUTHER: It is, and so we have where we think it is, but as part of the BBA negotiations go, those numbers will change, but we have where we think it is. So, we can get the specifics on that breakdown for you after. It was -- we have it in the slide in the brief as a parenthetical in each one of the accounts.
QUESTION: (Inaudible) from (inaudible).
I was wondering if you could go though, perhaps a breakdown, what costs were included to make some recommendations (inaudible) from the comprehensive review?
LUTHER: So, the comprehensive review specifically was briefed to Congress and then the secretaries, SRR, the Strategic Readiness Review was briefed. And so, those two efforts are being included in one oversight group, and we went through for the recommendations for the comprehensive review and identified the (?) and other procurement and put those in by year.
And so I think it's approximately $70 million of efforts went in in 18, and then there's an additional -- we have it here -- I think it's about $100 million for the remainder of the FYDP. We can get you the specifics, but we went through each one of the recommendations, built a funding plan and incorporated that into the -- into this request.
QUESTION: (Inaudible) 70 and then 100 more?
LUTHER: And then 100 more per year. Across all of it -- all of the issues, yes. We have it specifically.
QUESTION: Seventy-nine and 19.
LUTHER: Seventy-nine and 19.
QUESTION: And then it goes up to 137 (inaudible)?
LUTHER: And $137 million per year across the FYDP.
LT CHATMAS: We have time for one more question. You in the back.
QUESTION: Hi. (Inaudible), Federal News Radio.
You've been in a pretty big maintenance hole when it comes to facilities. How are you prioritizing that with the, kind of, bonus you're getting on facilities maintenance? And are you spending any money to mothball any facilities in order to save in the future?
LUTHER: I'm sorry, could -- can you say the beginning part of the question again?
QUESTION: Sure. Just that you've been in a hole for facilities maintenance, keeping facilities up to date for quite a while. How are you prioritizing which ones you want to spend the new money on? And are you mothballing any future -- any ones now for future savings?
LUTHER: No. No, actually in -- in our 18 submit, we were -- there's a 6 percent floor funding limit. And we exceeded that last year for depot maintenance by 4.7 percent. In this submit, we exceed, for ship depot maintenance, that 6 percent floor by 6.7 percent.
So our ship depot maintenance and recapitalization is at 12 percent. So we're exceeding the requirements and we've provided additional funding for our other depots. And we -- we, in no case, go below the 6 percent.
So there is no mothballing. We are maintaining at least the minimum. And where -- where applicable, we're increasing the funding for those efforts.
LT CHATMAS: And that's all we have time for, thank you. If you have any further questions, please follow up with me.
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