and request that my statement be submitted for the record and more time for questions so i think we would very much like to hear what you have to say that politely said ok mr chairman subcommittee thank you for the opportunity here before you today shipbuilding in particular to address navan industry efforts to reduce acquisition cost of new construction ships if it is acceptable i would propose to keep my opening remarks brief and submit a formal statement for the record that objection today's navy is a fleet of two hundred eighty three battle four ships as many as half of which may be under way on any given day providing security and assistance for our interests and interests of our friends and allies around the world the quality of our force our ships aircraft and weapons systems is unmatched at sea the fact is that your navy and marine corps stand ready to respond a major conflict with the most capable naval warfare systems in the world today a group of senior leaders from industry government and retired military known as the business executives for national security with these to report this past week titled getting to best be forming the defense acquisition and apprise the report is rich in lessons understanding and fundamental recommendations for today's leadership regarding the challenges before us an acquisition taskforce clearly points out that most of the equipment produced by the us defense acquisition process remains the equipment of choice of most of the world's military forces and this downward pressure on resources for national security generates a sense of urgency in making the acquisition process as efficient and effective as our war fighters deserve and american taxpayers expect that we need to be careful to focus on fixing what is broken not what works as we're all well aware ship costs are rising faster than our top line and our ability to build that future fleet which will guarantee our naval superior ty for the next generation and beyond realizing no small part on our ability to fix what is broken not what works and i would like to discuss each of these considerations briefly at the risk of  oversimplification the causes for cost growth and ship building could be divided into a couple of categories the environment we're in and the way we manage within the environment we're in that environment is characterized by a couple of key factors first low rate production low rates of navy ship building production compounded by the long loss of commercial ship building that once helped underpin our industrial base drives many unfavorable economic factors that impact our shipping costs it causes overhead cost increases slows shipyard capital investments weakens the underlying vendor base stifles opportunities for shipyards to leverage buying power with the vendors and constantly threatens production gaps which result in loss of learning in the harmful effects of cyclic layoffs subsequent hiring and retraining second reduced competition reduced competition is somewhat a fallout of low rate production and the related industry consolidation and today we confronted ship building program by ship building program with the limited options for leveraging the benefits of competition while simultaneously we seek to preserve the unique critical skills and capabilities of our already downsized shipping industrial base as a result we are continually challenge to compensate for the impacts are reduced in certain cases lack of competition and third is increases complexity the ships and weapons systems we are delivering today are far more capable and accordingly far more complex than the systems they are replacing this increased complexity however has raised the stakes regarding risks in development while also causing an upward shift in the system costs and the skills required to develop build install integrate and test these new systems these challenges require changes to the way to the way we navy and industry managers shipbuilding portfolio and they're compounded when discipline and or best practice breakdown in the way we manage our shipping programs perhaps the most commonly cited cause for cost growth is excessive requirements accompanied by unrealistic cost estimates troubled programs are typically ham strong at the outset by estimates and budgets that do not adequately account for risks inherent to the design and development associated with meeting very stressing requirements we need to do a better job of informing the process with realistic cost estimates and realistic risk risk assessments at the front end of programs this will drive the difficult requirements decisions early when there are two choices and two opportunities to be had then we need to hold to these requirements for is well understood that stability is key to the success of major programs stable plans stable budgets stable requirements stable design need to predictable performance and steady improvement this is perhaps best evidence by those programs that are performing strongly today most notably the d g fifty one for junior and t a k e ship building programs each of which is capitalizing on a long stable production run it is incumbent on the government preferably through competition but as is often necessary in shipbuilding through negotiation to structure contract terms and conditions that protect our interests and properly incentivize industries performance and it is necessary for us to be diligent in overseeing execution of the contracts this brings me to shipyard performance in the end having arrived at a contract we look to the ship builder and systems integrators to perform to standard and to deliver a quality product in accordance with the terms of the contract the reality is that we are pressing a large number of initiatives practices and standards across the board to improve shipping cost performance as noted we are beginning with requirements in ensuring that our requirements are informed by realistic cost estimates and balanced by our resources and we are seeking to impose stability we do not have a good track record here but i can assure you that from the secretary right down to the individual ship building program managers we understand the importance of the stability and we are intent on holding the line we look to more effectively employ competition at all levels of shipbuilding from prime contractors to individual equipment vendors and to continue the current trend toward greater use of fixed price contracts we have employed and continue to explore indirect and direct investments to sustain and improve upon the capabilities of our industrial base and we have increased our focus on design from produce ability and through initiatives employing the national shipbuilding research program we're making progress in driving costs out of our specifications and standards similarly working with industry we need to continue to leverage our automated design and manufacturing capability to gain the benefits that that brings to the process are instilling greater discipline to ensure our designs and production planning are mature prior to starting construction and in order to minimize the costly rework associated with out of sequence work to meet these objectives we must be smart buyers the acquisition workforce has been downsized over the past decade to the extent that our professional corps has been stretched too thin and we've outsourced too much of our core competenc accordingly we're rebuilding our navy and workforce for example the navy has conducted a comprehensive bottom up analysis of our onsite supervisors of ship building organization and identified shortfalls are being addressed by augmenting the onsite waterfront capability of the supervisors in the areas of engineering project management and or in value management the strategic moves properly executed more effective contract incentives capital improvement programs software reuse and other related cost reduction initiatives over the past decade we've introduced eleven new designs eleven lead chips each a highly complex prototype bring its own unique challenges compounding these issues particularly in the case of beazley chips where there is greater risk and uncertainty we fell short on our ship cost estimates were in certain cases on our willingness and ability to fully fund the estimate all of these factors lead to inefficient ship production and cost growth we have learned or in certain cases we learned the lessons of this experience accordingly the navy understands and agrees with the objectives of the weapon systems acquisition reform act we strive to meet that spirit intent and the ongoing initiatives i've described to raise the standards to improve the processes to instill necessary discipline to strengthen the professional core that manages our major defense acquisition programs all of this with the ultimate objective of delivering the fleet the war fighter deserves at the cost the taxpayer expects mr chairman thank you for the opportunity to appear before you today look forward to answering your questions thank you great opening statement are now recognizes the mcallen commander of navy sea systems command good afternoon mr chairman and members of the subcommittee thank you for the opportunity to be here today and discuss our strategies for reducing the rising costs  building ships in the twenty first century my written comments are included along with those in the joint statement that mr stack we requested be submitted for the record i do have a short opening statement those are without objection your statement will appear in the record  as a commander of naval sea systems command i am the technical authority for navy ships weapons systems and infrastructure is critical that we hold ourselves to the highest standards in our engineering and decision making as we have the responsibility to ensure we buy equip build and maintain and modernize the navy fleet now and well into the future our technical authority responsibility is about making sure our ships and weapons systems operate safely effectively and reliability our technical responsibility is also about making sure that ships and weapons systems are affordable and that we specify only those requirements that support w fighting needs and no more first and foremost nav c is a technical organization and our credibility and value to the navy start with technical discipline and rigor in the written statement we outline the challenges to achieving our goal of three hundred thirteen ships there is no single fix but we're working hard with our industry partners on several fronts to decrease the costs of new construction improve first pass quality and ensure are ships and weapons systems operate safely affectively and reliable we're working hard to address these twenty first century challenges in order to keep america's navy number one in the world mr chairman thank you again for the opportunity to be here with you today i'd be happy to take any questions three panels of witnesses so i don't want to take too much time but i just want to toss out something that i'm not totally satisfied or settled on and i appreciate both of your gentlemen's expertise and my own concern is around the idea project management and there are many of the different things that are in our different written testimonies that are common to manufacturing and common sense that are all things we know that we've got to manage and pay attention to the concern i have and it's maybe because i'm not familiar with it but i have an intuitive sense and  that is the way the navy is organized in terms of the idea of the people that had developed the requirements and then you move that over to the people who do the purchasing i'm still not comfortable with that system is a seamless as it might be and and particularly in making it clear that there's a very clean chain of command and that one person is responsible for a project and that they have a team that is on top of things and keeping us from having problems and i think you gentleman know because of your expertise you could take very very good people and put them in the wrong system and end up with problems so that's something that if you'd like to comment on i don't want to take a lot of time on it but it is something i'd like to look at the future which it's not so much some of the things about upgrading the size cranes or the layout or different buildings or being smarter and making sure we have the design done before we start building something all those kind of go without saying but but that organizational structure is still so that's a little bit hung up on if you'd like to comment thank you yes sir let me let me describe a few things one your concerns are well placed because inside of a large organization where you have separate requirements budgeting and acquisition processes there's plenty of opportunity for things to go wrong and there's plenty of history to show examples of where that has occurred what the department of the navy has done to try to  make this more seamless is take a look at the process that we use and bring requirements budgeting and acquisition together inside of what we referred to as a review process the gate review process is co chaired by myself and so you know we're for the vice chief on the op map side of the of the house and depending on what phase of the program the front end requirements governs the process so in that case you know where is representative chairs that get review process when it gets handed over to acquisition i would chair but the membership is the same regardless of where we are in the process and reviews are conducted for every major milestone and at least once per year for every major program on top of that where we ensure that programs as the requirements are being developed we're ensuring that the costs and technical aspects of the requirements are being informed so that those tough decisions that need to be made can be made and then the budgeting process financial management is at the table when we transfer over to the budgeting process the burden is on the f m side of the house or the programmers depending on where we are in the budget cycle to ensure that the requirements that were defined and estimate as to made are budgeted and then when we move into the acquisition process and it gets handed over to the program manager for execution he now has requirements baseline  as he puts together the request for proposal to go to a contract before he goes to contract that are brought back to the table to get review process and reviewed so now we have each member of the requirements budgeting acquisition process in step as we move into acquisition and execution of the contracts and then changes to the contracts are brought back on that annual basis or otherwise as required to a version of the ga review referred to as a configuration steering board to ensure that again each voting member has insight into the decisions that need to be made and the information is provided so that healthy decisions can be made it's the way you describe it it sounds very organized and logical we've not done it that way in the past that's that's correct in the past and is there any particular is there any help that congress can be or you have all the authority need to set that up that process to where you want without us you don't need us particularly to pass any law or anything i think we have but it's a significant step forward in terms of elevating visibility and basically bringing everybody to the table to address the issues before major decisions so you won't bring as many surprises that way that's the intent thank you very much if the contracts were to be awarded now let me let me describe we're not delaying the award of the ship what we have done and we brought forward in the spring time was   one thousand is being allocated to bath iron works as a part of that business agreement and we have been very steadily and focused fashion marching through the execution of that and we look at workflow at the shipyards addressing the concerns that you raise regarding most efficient scheduling we believe that we're on track to support that  that that significant figure you just offered was put on the table and my first question was that's one hundred twenty million savings to what baseline we just completed negotiations for the combat system for the d d one thousand for the first two holes perhaps two to three months ago was when that goshi ations wrapped up so having gone through that effort we have a pretty solid technical baseline we're not proposing any significant changes to that technical baseline so i think the one and a half to two year effort to complete those negotiations we should be able to wrap up in a fairly streamlined fashion here when we get going in earnest now i have to work the milestone decision authority for do you want thousand is the undersecretary of defense i'll be working with him to clear that package in terms of going forward on the negotiation process so we're aware of the opportunity we're pursuing the opportunity and i'll get you back a more specific response in terms of  in your written testimony point out a number of different points but i want to focus on three of them first you say we need healthy competition the other say we need aggressive cost reduction programs and next we need to invest in facilities in training for ship building industrial base and looking at those three elements of your suggestions seems like to me that all of those are related in some relationship or other to scale and if we don't have a large enough scale  production that some of those things might be hard to obtain and i know we always look at foreign shipbuilders and say you know how come they can produce ships at a lower rate than we can and i think if you look at that these are these are admirable objectives but all of a related to scale can you talk a little bit about how you would look at achieving this within the within the current scale of production and then are there things that we should be doing maybe with title eleven in the jones act that could help this industrial base be able to achieve some of these efficiencies that you see through competition aggressive cost reduction programs and investing in facilities there at these facilities certainly  me start with competition we do have very limited competition and shipbuilding basically we have two large corporations that own the six what we've heard to as the big six shipyards and the competition across those two corporations is limited we don't have competition at the prime level on carriers we have teaming submarine programs most of our are singled up at least after the initial down select and then we have the d g fifty one program where we have had very successful competition in the past and after this front and restart with look forward to continued competition in that program and then when you get to the second tier shipbuilders and the programs there are in fact we have more ship builders involved and so we have had competition and we have to continue to work some of the challenges of sustaining that competition over the longer haul in that tier that's at the prime level what we have to be more steadfast on is driving that competition down below the prime level and we'll be working with the ship builders where they are now the prime contractor to leverage competition whether it's major components or otherwise and then there will be in the intellectual assessment that needs to take place between where do you leverage competition or where do you leverage commonality because sometimes we'll be going down  commonality path where we prior had competition and those are going to have to be evaluated on a case by case basis there's a separate universe that comes to ship associated with combat systems and see for  and again we find ourselves quite often the situation where after the down select for the prime contract now we're largely in a sole source at the prime level and we have to continue to drive competition below that on the combat system side what we are investing heavily in is going towards open architecture where an open architecture we do a couple things we decouple the heavy software from the components to  allow the component that hardware to be competed and then we're going to the hard part now which is going inside of the software and busting that up into a modular construct so in fact we can bring small businesses into the game and compete for some of the software development shifting over to cost reduction i believe every program and in fact today virtually every program has needs to launch a very focused cost reduction program that's program specific particularly after you have the start of the front end design after you have awarded the contract from day one we need to be focusing our engineering efforts on produce ability on the ways that we can bring the cost down and i turn to our mccoy who owns the tech and the technical authority to specifications to identify ways that within our specifications we can enable the shipbuilders to design a more affordable ship and then once the ship is built we need to continue to identify opportunities based on the as built condition to drive down the cost and as i said i think every program right now has some element of a reduction program and we need to keep focus on it the third area regarding facilities and training we have a number of initiatives in terms of incentives working across the ship builders largely focused on their specific needs and our ability within a contract to provide those incentives as well as terms and conditions within our contracts that allow for investment in their facilities to be borne either in terms of  the depreciation in the overhead or cost of money issues trainings a little bit harder but i think it's equally important we do not have the ability to directly fund training for the workforce but i look forward to exploring opportunities to provide example of how you can actually make those efforts all come together and get to that point my question is just very simple the opening part of your statement you again cited the three hundred thirteen ship navy target  budget we are building that that report commensurate with the q t r that's being worked with the so for me to give you a better timeframe than your reference twenty nineteen which is  going back to the two thousand and nine submission of the thirty year report i cannot give you a better estimate and not likely be back here  lack of petition and this reality is reflected in a number of things one is the problem of modernizing the officers that run our shipyards have a fiduciary responsibility to the stockholders we understand that in this country is not their responsibility to us it is not a responsibility to the taxpayer and the reality is that because the volume is so low and because it's these contracts are largely cost plus contracts there's little essentially no business incentive there may be a patriotic incentive and no business incentive to modernize now we could the government could provide this new equipment like laser cutting and welding and so forth but if we did that then we would make sure there would never ever be any competition in the commercial world because then they couldn't use that equipment for building commercial ships because it would certainly be a w t o suit for that there are two solutions to the problem of  competition one is to reduce the infrastructure if we had half the infrastructure in building the same amount of ships then we'd have some competition i don't think we're going to do that i don't think i'd want to do that because there may be a time when we would need this infrastructure s that we could build more ships so then the only other way to to increase competition is to build commercial ships so that we have more throughput for the arts but we are just not competitive and we cannot build commercial ships we're kind of like in the situation of a power production plant which can only do a good where they can't do a black start and that's kind of where we are i don't know to get from how to get from where we are they essentially noncompetitive position for commercial ship building we're a pretty represent twenty five percent of the world's economy and we build essential zero percent of the world's large commercial ships and it's clear if we're ever going to get ship building cost down for our military ships we have to do that on the back of a big commercial ship building program how do we get there but how do we get from where we are to commercial ship building so we have real competition yes sir let me i've been working on that for twenty five years and  i don't say that in jest let me first say that commercial shipping in this country is virtually one hundred percent associated with jones act ship building that they're not really competitive because the only place they can be built is in this country no matter what they cost we're going to build them here because that's what the law says right yes sir and so what i'm providing for you is what the base work looks like in terms of commercial shipping in the country today and even in differential subsidies went away during the one nine hundred eighty s during the one nine hundred eighty s the build up of naval ship construction the administration determined that we're going to invest in navy warships we're going to remove the differential subsidies for commercial ship building the u s industry moved to naval warship construction after the wall comes down there warship construction drops off differential subsidies are gone and haven't been competitive in the international commercial market since so in considering what we need to do to get back into that business i can tell you that we have we have benchmarking we had a company by the name of f m i that came in and benchmark our shipbuilding industry story if i might my time has run out we had two more panels and this is a huge subject and you can't in one second remaining do justice to it but thank you for your concern about it and i hope that we can have a dialogue in the future this is a really really challenging problem and it's not going to be easy but unless we do that i think we're going to forever be stuck with  huge costs for our ships and a three hundred thirteen ship navy is going to be a real challenge so thank you for your testimony you know you go back to texas bob i would like to remind all the members of the subcommittee that there will be diego but what encourage those of you can find the time to please do so mr bartlett got this program started when he was the chairman and we've learned a lot from it disciplines can be a little bit different in that we're inviting both a lot of gr very impressed with the efforts by nasco to team with i will that has helped them in terms of not just competing for and winning the contract but in terms of their success in building the p class that's interesting to the navy but what's more important to the navy is that the lessons that they have learned from the koreans and that they're applying to that commercial contract we are getting equal benefit on the program they're being very defense authorization bill was language we included for the total combat program ship program that offered the vendor what you the amount that you determined was a fair price gave them a take it or leave it offer but also specify that if they chose not to build the ship for that price that approximately eighty million of that money would be taken out for it so that the nation would have the technical data baggage effect the specifications for that you have so we could put it out for bid and see if someone else would build it for that price using that analogy and using the frustration of some of our colleagues that we want to get a good price on something is it going to be now as you reconstitute your acquisition force is it going to be one of the goals of your group to see to it that is in clear language that every time we buy something as a part of that contract we let it be known that we are we the united states of america are going to own that technical data package so that for follow on purposes not necessary taxpayer and hopefully the best year for the navy as we do so yes or that's that's a straightforward question but it's a difficult question because of the number of variations on that theme our intent is to pursue the technical data package for future competitions but there will be cases in examples where either components or specific system designs are elements of that tech technical data package are owned by the better either because they were developed separately for some other purpose some other competition that didn't involve the guy i meant and then we would have to choose between paying what is what is often a very high price for that  technical data package or taking government purpose right that gives us a significant amount of liberty in terms of how we employ that technical data package for future competition and  what i could what i could commit to today is when we run into those exceptions sure that congress is aware of them before we go to contract so that there are no surprises on the back and such of such a contract a very crude mine in the water is significantly damaged i would think without the technical data package that would preclude you from taking that ship to the nearest shipyard and having it repaired you originally spec it and give us just one as i realize that's a larger than average package but i think for a lot of reasons again i'm very grateful that appropriators upped our budget to fifteen point eight billion dollars but we still have three hundred thirteen ships to build with that hopefully ten to twelve of them a year with this amount of money that we've just got to do better now i would think that i understand where you're coming from but to the greatest extent possible we have got to own the rights to those things  example let me start by saying that we do well in the technical data package for the l c s to the extent that we their own out right or we have government purpose right and so for the example you just described we absolutely have what we need to  conduct any repair on that ship when it comes to structural details system details i cannot envision a scenario where we don't own the technical data package unless we were buying right now i cannot envision that where you start to get into some difficulty with commercial items that might be a part of a ship design software that's commercial these elements that were developed for a commercial market that we're bringing  and inside of the ship design we typically would not pursue those data right ok again i would i'm going to ask of the navy's legal team for them to draft language so that we can spell this corps we didn't need to we did not mean to leave you out if there's anything you wish to say again this is more working on the acquisition so that's why we've kind of spoken to the civilian end of it rather than the folks who follow up on it empower those people who work for you on a day to day basis if they see a better way to do so that they would get back they would feel like they could speak freely to this committee as to what we are missing what opportunities are we missing to get a better bargain for the taxpayer i don't fault the people in corporate america for trying to get the most money for the ship that's their job it's our job to get the most for the money i would encourage you to encourage your people  whatever extent you can do so to encourage them to keep us aware and to try to find a better way in everything we do as we work to rebuild that acquisition workforce and it's in many  areas we've hired over two hundred new supervisor shipbuilding folks in the last year and a half and i'm not sure that that's the end state we're taking a pause right now we just added another thirty because we weren't happy with the lay down and we may add we had some more but it's also contracts people trying to do a fifty percent increase in my contracts expert because we've had a pretty good drain and cost estimate hers were regrowing that part but also in my engineering staff forcing them every one of the technical word holders to do what i call put things in the hopper that are teed up in terms of what arc specs currently require and what's out there in terms of best practice anywhere around the world commercial for that really take a different look at it how we're doing business and we have a big part of the ship builders and taking costs out of our ship and that's a mentality as we rebuild the acquisition workforce that's going into that rebuilding and in fact one of the things i'm doing here in two weeks with my executive director is we're going to be approving next year's national security personnel system objectives for our engineers along this line of how do we systematically take cost out of our ships we've had a number of projects this year that have shown a huge benefit and that when we really look at our specs and our standards in a systematic way often there that we don't need and that we can work with the ship builders to take cost out so  as we follow your line of questioning sir yes sir we as we rebuild this acquisition workforce is a great opportunity for us to inject that culture in there to get the most bang for the american dollar with the  k was very patient to walk us through a couple of things last week one of which was the loss within your acquisition force of those people who tell us what something should cost those experts and that is incredibly house to say with something should call so that we know we're getting a good deal for the taxpayer i think there is probably two parts to that answer the first thing i would tell you we started this year with about forty people in our cost estimating branch we concluded we need one hundred i'm going to be at sixty two by the end of this year and as you probably know we don't just find these people out there you have to grow them and in fact because of the complexity of what we do our cost estimate are in high demand throughout the government homeland homeland defense and so we've suffered we've suffered losses there i would tell you on our major on our major acquisition programs we're not perfect but we're pretty good but we we've got some more work to do there we're where we're not hating it and in my opinion right now where we really have the deep rebuilding to do is more on the weapons systems side unmanned vehicles those new technologies and right now i'm going to hit about one hundred and twelve so i think where i still think we're about three years away from being able to tell you across our portfolio that we are where we need to be we are we are much better on the major programs because that's where we put our people but again there we still have lots of work to do because as you know periodic lee we we get a surprise that we shouldn't get so i think where we're on a path on forty i can't go any place i will tell  we've gone to detroit and we're actually going to hiring cost estimate that have been laid off from the from the auto companies and particularly good and things like unmanned vehicles and things like that so we're trying to get some mid career professionals as well as we build from the bottom up with new graduates so i think sir we're about three years off and we're on a plan to get there i thank you hope i have given you the opportunity to say what you wish to say we have two other great panels i'd like to at least let the second panel have their say before we break for the for the vote so without hope without objection from the committee the first panel is dismissed thank gentlemen thank you for coming again we apologize for the delay if you wish you may submit your statement for the record and feel free to would like to go first mr chairman gene economic order quantities improve vendor performance lordship building stability requirements second factor setting requirements early more mature design before construction begins and enables more effective production planning builders are responsible for the efficiency of our ship we know that you must sustain our culture of continuous process improvement briefly address for that have significant impact on early collaboration capital investment workforce training and applying lessons learned by early collaboration i mean conduct an open and crisp selection process through direct competition or negotiation then down select and immediately begin collaboration between industry and we support the fact that the government must preserve the benefits of celebration of the selection process because early and continuous collaboration is where substantial efficiency benefits  continual process improvement is now ingrained in our culture we encourage our workers to look for better faster and less costly ways to build ships and they take pride in the fact that their good ideas are valued and applied portability program to develop design changes essential to price reduction congress provided advance funding and accelerated the production of these collaborative efforts improve the design increase the  build and reduce the total ownership cost of the program by nearly four billion dollars at best ironworks investment in the land level facility in the ultra fitting building reduced direct labor hours by more than twenty percent compared to the last  building increased efficiency and reduced cost in our commercial ships and many of those improvements have carried over to our navy program mr chairman subcommittee's initiatives have also contributed to more efficient and affordable shipbuilding more can be done we will work together with the congress and navy to achieve this common objective i'm proud of the high quality general dynamics shipbuilders are delivering to our navy and i invite the committee to visit our shipyard at our work  without objection thank you chairman taylor ranking member akan distinguished members of the sea power and expeditionary forces subcommittee thank you for this opportunity to appear before you today to discuss what i believe will enable the shipbuilding industry to become even more efficient mr chairman your invitation to testify ask me to address challenges in maximizing the efficiency of shipbuilding and i will limit my oral remarks to a brief summary of my written testimony which i asked to be submitted for the record without objection for the next few minutes i would like to emphasize a few key points first i think it's important to note that ship building industry is not broken but it's not it's also not as healthy as it should be and the healthy healthier we are as an industry the better we can serve the needs of our navy and the american people at the heart of our difficulties and shipbuilding in my view is that most of the time the navy must buy ships one at a time and it must pay for each of them up front these funding and procurement requirements result in significant challenges in creating a healthy and efficient ship building industry i define a healthy ship building industry is one that attracts capital investment talent and technology buying one ship at a time stifles that investment and forces us to struggle as we try to capture the talent the technology and the capital that we need to remain healthy at the ship builders who build for the u s navy choose to invest in equipment or processes that benefit the navy they must even with that investment on the first ship where it is applied this discourages investment in machinery tools designs and people even when we believe that making an investment is the right business decision most of the time the return on investment does not support our shareholders requirements for the use of their capital now all is not lost there are  very few examples of things that have been done to encourage this kind of investment i'd like to briefly highlight one of those it's been discussed some today but in the virginia class submarine program the navy is buying more than one submarine at a time using multi year and mal ship contracts the nation and the navy also has incentivized both northrop grumman and general dynamics to make capital investments neither of us might otherwise be able to make if we looked at it as on a one ship basis they've done that by taking a look at how the investment would play out over the entire class of the ships and these would be ships that are not even in the appropriations yet these incentives do require an upfront use of shipyards capital with an opportunity to earn back an incentive if the anticipated improvements result this program has been a very important part of delivering on the two for four billion dollars goal we have discussed in this chamber on previous occasions and even earlier today but it's just one part of a broader effort so as mentioned the virginia class program has benefited greatly the congress and this subcommittee in particular has supported and funded and that is a very critical point i've been in this industry for more than two decades and i'm often asked why american ship builders are not as efficient as foreign shipyards i've visited many of these yards and i'm always struck by the size and the nature of their order books one yard i visited last fall had orders for over three hundred ships in that environment the ship builder has a lot of incentive to be innovative and to invest capital to lower their costs and this is in stark contrast to the environment in which u s shipyards must operate or ship ships at low rates of production one ship at a time clearly runs counter to this idea of serial production which is the most efficient way to build ships ship building although it is a technologically complex industry still relies heavily on our talent craftsman labor cost savings are cheap when craftsmen move down a learning curve by working a task frequently enough so they improve their performance ship over ship once again we can look to virginia class for a glimpse of what the future could hold this program is now and serial production is benefiting from solid learning curve improvements both in cost and schedule and achieving learning curves savings on ships which have longer construction time such as aircraft carriers is tough and the longer the gap between the start of construction of one of these complex ships and the completion of the proceeding ship the more difficult it is to achieve those savings and i'm well aware that these problems are not easy to solve the industry is doing much to become more efficient including modernizing our facilities with whatever capital we are able to find and investing heavily in our workforce but we can't do it alone and we need to work together all of us and by we i mean ship builders as well as the acquisition professionals navy program managers fleet customers and congress we need to continue to work on changing the funding of particular practices if we ever hope to break the cycle of buying one ship at a time and until then however we must focus on the go shooting good contracts that are based upon realistic cost estimates a more complete understanding of the risks within each program and true recognition of the difficulties the shipbuilding industry faces as a result of the processes we have in place today i welcome your tension of the congress and the subcommittee in particular to the needs of our industry shipbuilders are skilled men and women who choose this difficult off occupation because of their strong belief in america and a desire to contribute to the nation security all of us are working hard to build the approximately two hundred twenty five minutes thank you very much question i asked about the scaling of our ship manufacturing and the impact that that has on us being able to control cost and just wanted to get a little more i guess into depth about your thought about  where we are and what we can do to help with that whole aspect of ship building how can how can we get better at it how can we is it is it's merely a matter of doing more than purchasing one ship at a time is it the the idea that we're building one ship as a at a time as a principle that we should try to us and i don't think that it's necessarily going to happen by ordering more ships but i think we have to create create mechanisms that will allow us to behave in the same way that we would behave if we were ordering more ships and so highlighted that extraordinary capital investment program the cap ex program that's a recognition  that these are investments that probably could not be justified if you had to break even on the very first on the other hand if you think if you know you're going to have a class of ships it's going to extend to thirty ships and we can find a way to to incentiv e and and capture and calculate the return on investment over the whole class of thirty ships then we can create these outside of the normal course of business kinds of incentives that allow the investments to be made you time aircraft carriers built one of the time but we were able to refill it ties or create some facilities in our in our facility in newport news by looking at the value of upgrading our crane for instance upgrading our crane allows us to use to lift bigger modules by putting incentives in our design and planning contracts we were able to make that investment pay for itself even inside of the one ship so there are ways to do that but you have to be very deliberate about saying i'm going to think about this in terms of i'm going to think about this mechanism as being a mechanism that's going to overcome the fact that we're that we're building one ship at a  applications on the defense ship building side maybe lessons we could learn or things that we could do better based on your lessons from thank you congressman it has been a very productive relationship for us right  being able to reduce costs and all and knowing dave of the fact that you have some excellent engineering background under your belt as you come to us here today i was was just wondering in the area of whole design and architecture particularly the way it works in the water and that is it possible to basically have sort of small medium large sized holes that you could just exchange or are the missions of the different navy ships so different that you almost have to have specialized faults or is there some ways that we could basically do something for the coast guard and maybe do something for the bereans to do something for the navy all on the same basic platform and i'm going to mr patterson and give mission ships have different different requirements so you end up getting having an interest in producing different designs i think in the context of what this hearing is about looking at the importance of  how packages have to be loaded on to the ship thank you very much better congressman i think your question you actually get set a very very important point that i think we have to wrestle with and that is can we can we as we sit down to design ship can we move from an environment where we try to optimize every aspect of the ship design and move to an environment where we decide on what are the critical aspects that we need to make sure we optimize those and then where where else can we live with good enough  and i'll be the first one to tell you that good enough is not something that the warfighter wants to hear a lot about and so that's i'm not going to argue what good enough might be but what i do see is i see some recognition of this issue in the  navy the navy leadership now is talking about a common haul design to go from the lp d s in all the way through into the l s d as a potential way to do some of what you're talking about there and  think that whether it's whole design or system design piping design or electrical design i think this the real test is going to be how do we how do we start to think our way through not optimizing this particular part of the system in this particular part of the ship but how do we how do we optimize the mission of the ship and then accept some pieces that may not be optimal in that particular aspect i think that's a tough challenge for engineering  technical community come through and i think it's going to take some pretty strong leadership would it be helpful i would think that where you'd want to start with that would be when you're actually coming up with your initial design and you nail down these particular parameters are what we're very concerned with and the other ones we're going to give you a bracket that you can hit anywhere and does that make sense that you'd start that way so i would argue that it actually goes back to the mission of the  ship one of the one of the things that made it that's what i meant we should you start with the mission of the ship and say well other than that though these ranges of speed are ok in this but over abilities ok and precisely what was done in virginia class at the very beginning the idea was ok we're we're we're not going to try to build the fastest submarine we can build we're going to build a submarine that is fast enough and then that allowed us to make some decisions on the whole design that we then went forward with and so we've done efficiency of having a good skilled labor force and i was one if you just comment please on the status of your apprenticeship program and the challenges in maintaining that skilled workforce and things that we could keep in mind a way to be helpful in helping you  for your program or five years now where we have some design even some design apprentices we've we've linked that with our community college system in the state of virginia and we are heavily invested in the entire workforce development pipeline that runs from the governor's office all the way down to our waterfront we have we have representation at every level of that activity in virginia we have been making the same kind of commitment and investment in the state of mississippi and in the states in the state of louisiana to the point where the governor of mississippi has taken the lead on creating helping to create an apprentice training for basically  building school located outside of the shipyard in pascagoula which would be not just for the for the ship builders of northrop grumman but for all of the ship builders on the gulf coast again connected to the community college system and connected to the entire workforce development pipeline i think that's a tremendous understanding by governor barbour that how important that workforce development pipeline is to our future success  you know this is a business where we can't just go grab people off the street nobody graduates from from high school with a degree in ship building i mean we we have to make our own ship builders and and the programs that we have are we're very proud of the good work that our skilled chipotles are doing in keeping our navy strong and recognizing that it's how it's helpful i think if we can give us for as possible a good way to plan ahead of time on what's coming up if there are any other thank you very much there are three classes of actors in this drama one is the industry second is the navy and the third is the congress and none of the  present cast of actors is responsible for how we got to where we are today so we can talk very frankly because none of the president years are to be faulted for how we got here but here we are  under capitalized too few ships to build and so you have employment gaps so now you're faced with retraining you have too few subcontractors that needs to little competition there and therefore the costs go up there and so that makes us even more non competitive and since we're more noncompetitive we build fewer ships now we're building no commercial ships except the jones act ships and of course is now is a vicious cycle because when you're in that position where you're then there was little incentive to capitalize and you have more employment gaps and more so we're the vicious cycle we've been in that downed birol for referred to earlier as collaboration we found for example in our collaboration with the congress and with the navy on the virginia class program that we've been able to find money to  workers on the dock have accepted that task and they're responding been there and i was very impressed with the commitment that your people had to do it better in spite of the fact they didn't have to because we're going to build those submarines whether they're doing better and i was very impressed with that but nobody's buying commercial submarines how do we transfer this to where people are buying something commercial and that ships well if i today are shipping resident we partnered with a korean ship to build the ship we we were able to use a korean design to start with modified some work for our customers and what we demonstrated through that process is that we can build the first of the last six months sooner than the plan and under budget who has ever heard of doing that in the shipbuilding program why did it happen it happened because we had  addressed and this program has been approached in a disciplined way that recognizes that we want to take appropriate amount of time to do it right to build the requirements to take time to write the design to make sure we get that right  the collaboration between the ship builder and the customer not just the acquisition community but also to make sure that we get the design exactly right we do the tradeoffs to control the costs in a proper way and make that to respond all the ways that are necessary to be able to make that next program a success it's a critically important program and i can't say enough about the about the engineers and such as adopting a multi year contract with sufficiently mature programs what are some of the measures that can be enacted at the supplier and the customer level and what opportunities are there for the yod to work more closely production have gone down and the competition in the supplier base has gone down as well and so as we were able to work through the issue we talked about a little bit earlier which is not trying to optimize every aspect of every ship but trying to figure out what what we really need to get the mission done that needs to common out across halls and if you can get commonality of systems or piping or bows or pumps across halls you could you can create more  opportunity for competition in the supplier base and i think that's probably the biggest challenge that we have is trying to find a way to create more of that kind of competition a supplier base and then in the virginia class program that we share  the you know the supplier base is eighty percent sole source or or not competitive and so it's creates a real you know we have to put people in shops to make sure we get our money's worth when we go to them in the same way that the navy does that with why are they more efficient why do they have less production hours because this almost sounds like when the japanese came back after and started competing with our our big three automakers they were more efficient they were more productive they had had better processes and they whipped up on us for a while but then we kind of cut back up and some would say that their weapon up on us again here but we're going to catch back up again but what do you see the other guys doing much better than us and around the world my wife and i went to buy our first car we looked at an american car you could pick out the you could pick out the seat covers the windshields the mirrors but you had to pick them all out and the manufacturing process was so tailored that every car that came up that assembly line was a different kind of car the competition from from overseas basically had the standard model in the deluxe model and an assembly line that basically made standard models and they put a few things on it to make it the locks and that those were choices  i would i would like in the same situation we have today between naval ship building and commercial ship building i think it does it a dozen american naval ship builders a disservice to talk about the efficiency of commercial ship builders around the world because we're not doing the same thing it would be like comparing english football with american football if you go if you go to the foreign shipyards what you see is they might have four or five welding process that everybody learns to use and they they do single pass welding on very thin plate the welders in northrop grumman shipbuilding master several hundred welding processes and we handle all all thickness of plate from then level then plate to plate in excess of five inches we spent a lot of time training our craftsman to go do those things and so they're very different businesses i think that the challenge is really quick if you're that good at the complex processes why are we just as good at the simple ones what we've found that the technologies and investments that have been made in foreign shipyards and  semi lines of panel lines and things like that when we bring those here we use them for the small stuff we don't do a lot of small stuff for the big stuff it usually breaks it's not able to handle the big stuff and so from my view the challenge is there's things that we can learn from this and i think that i think that getting at the issue of of what's good enough in the design i think a robust commercial design process to balance against the technical requirements that we put in our warships would be very healthy for our industry today from the manufacturing side of this you're starting from a place where people have order books that are as we talked about you know one water bucket i saw was in excess of three hundred three hundred ships on the water and they were all exactly the same so the question is how do i go and capitalize myself to not get to the point where my price point is i mean i how do i get three hundred ships on my water book so i can compete on the three  hundred we have that has gotten away from us and i and i don't know that i have a really good answer for how i make up three hundred ships of learning in one in one fell swoop i will i will hand it to my partner here i do think that what nasco did with the partners with daewoo and what fred harris and his team did there stands out as one of the most significant things that american shipbuilding has done in the last twenty years it is a testament to the builders of nascar that they were able to make that work and i think what we can all learn in the industry is the things that they learn completeness of design discipline in the process making sure that you don't have a plethora of craft practices to go to go work through i think those are all things that we can work with success which obviously is not in the genes now of the workforce i mean they really have got the culture of cost containment now just in every aspect i want to go back in january when the stimulus bill was being discussed you know there was a lot of talk certainly among some circles about f d r in the one nine hundred thirty s when they came out with a national industrial recovery act actually focused on shipbuilding as a way of trying to revive the economy at that time it was one of the areas that got resources and that measure and after was ruled unconstitutional by the supreme court the vinson trammell act  was enacted which again was not tied to an ira and was focused again and industrial strategy that was based on spending more and ship building you know we have a situation right now where the fleet is to eighty three  in the administration and that there really was a willingness to try and accelerate towards that goal and do it frankly is not just a national security strategy but also as an industrial policy we would be yards be capable of  perspective of being able to build more ships our workers have always been skilled our workers have always built quality ship but our workers may not have always know what efficiency is we know how to do it we're building it we have a great workforce up there in groton and up there want to point to building submarines and we need to load them up given the opportunity run to show what the capable of doing the months so they've got a they've got a program in place in their own mind that looks for ways from the bottom up to be able to build  committed to making ship building in the united states stable productive environment and he's looking through his staff and for ways to do that we are in discussions with the chairman thank you i would say echoing all of my colleagues comments here but i would i would go on to say that we've done it at a couple levels one is that a ship program level and on virtually every class of ship that northrop grumman is involved in we've had robust discussion with the navy about does a multi year make sense or are there ways to phase that and we've talked a lot about how do you how do you take most advantage of of the things that the mechanisms that have been put out there to to improve the efficiency and the buy program of the ship but at another level we've gone even further we go into the design and we on in several cases we've come back and push back on requirements in the design and said you know here's a here's a requirement that you know we understand that it is a requirement we will build to that but you know you could actually relax that particular requirement would not affect in our opinion would not affect the overall  capability of the ship and would significantly and change the acquisition cost of the platform we did that in a pretty robust way on the c v and seventy eight where we had a very very steady dialogue of here are some things that we can we can actually not change the mission functionality of the ship but change some of the some of the local requirements inside the ship that would save some acquisition cost we talked earlier about the design for affordability that was done on the virginia class program which is a very very close contact sport if you will on on one of the things that are really driving the cost of the ship and how can we how can we apply a little bit of design and and planning to go and take some take some cost out of the ship i still fundamentally believe that the things that we have to do are the things that will attack the problems created by low rate production whether it's capital investment or or design commonality those are those are ways to attack the problem that we have when we're buying ships at such low rates to that point because we've got the world's largest navy we are on track again thanks to some action that took place in the house today to get back to that three hundred thirteen ship fleet that would that we see no says we need and so i think it's fair in anyone's mind that if you're going to get your numbers a back part of it has got to come from commercial shipping too to get the volume the throughput through your yards as folks out in san diego are doing to what extent are the folks at north are looking at some private sector opportunities and i'll give you one example i happen to have been here when we passed the all pollution act in one thousand nine hundred one of the many benefits of that was we thought we would see significant action in the building of double hulls first rico's wide trade jones act but also if we if there were some serious production at eighty or then the opportunities might be there to be competitive worldwide and one of the things that really struck me going to hunt i i went over there thinking a bunch of guys filthy dirty  being paid loan money to in making up for by low wages building a ship competitively i was all struck that i saw an extremely well financed your people walking around  virtually spotless uniforms being paid very well could be low turnover of their staff and yet they're kicking out a thousand foot ship every week so the question is if they can do it what are we as a nation doing wrong that's not allowing you to do and what suggestions would you have for this committee and again i don't all limit this to north grumman suggestions would you have that so we take advantage of some of those opportunities and i realize that the world economy is temporarily down but at some point it's going to recover at some point i think twenty fifteen years the target date where every single poll taker that goes on united states of america has to be chairman we've talked about this a few times our excursions into trying to restart commercial business and in our shipyards and this is both virginia and on the gulf coast in addition to being financially challenging i think that the piece that strikes me the most is that in each of those cases when we step back and look at that the cost to build the ship in our shipyard and the market price on the international market space what we found and this was this is about ten years ago when we were going through this what we found at that point in time was that the cost of the material in the ship itself international material we were using international buyers to buy the material the cost of that material was higher than the price so there was some discussion earlier today about the can actually talk about the cancellation of the subsidies and in the early eight s i believe that there are a lot of those hidden subsidies around the world that help those shipbuilders around the world that help make it tougher for us to be competitive with that i will grant that the situation has changed in the last ten years in terms of the value of the dollar and some of those things and so i i can't say that with certainty that that would be exactly the case today but then what i would tell you is that what we've come through is a period of time where we've been focused on focused on building i believe the number was eleven lead chips for the u s navy those have been exceptionally challenging across all of our shipyards and as we've come through that the focus that we have at north to get ourselves narrowly focused in on series production of ships now if there's an opportunity to take what i learned in series production of the ships that we have if we have an opportunity to translate that that capability to another marketplace that i'm in favor of doing that an example of where i have done that and where my corporation has done that is that we have entered into a partnership to do nuclear power mod s for the array of a french nuclear power company and we're going to build a factory in virginia right next to the shipyard where we will use the skill base of the ship builders to manufacture heavy components five hundred ton components because that's you know we have to be very careful about what are we good at we're really good at high high high rate high high weight high pressures high vol high voltage kinds of systems those are the things that american ship builders are really really good at and so we're marketplaces are able to take advantage of those particular skills i'm interested in taking a look at those marketplaces the operational stability that i'm in pursuit of on the gulf coast  is all about getting to series production in the programs that i have and and so the swap arrangement that was talked about earlier was a way for us to help the navy with their with their destroyer program but it was a way for needs we can build them and we can start immediately so we've made that we've made that ability you know but the thing that the things that we control the variables that are already are becoming more efficient we simply have to do that it contributes to our navy ships and our coast guard ships as we make those we are motivated to become more efficient our workers are motivated to do that but you have to have subsidies you certainly could be more efficient if you had better equipment but then you couldn't build my understanding and you couldn't build ships competitively on the world market because you would be sued by w t o because we're subsidizing you so we have kind of a catch twenty two here that we've got to get around do we not situation and see that situation where there are charges going both ways in terms of what subsidized and what isn't i don't know where the subsidies are in the internet and international marketplace could be an health care could be entertained and pension it could be any number of things it may not be in tooling but that as i said our experience has been that that there are real and that it's a big challenge and the order book that i saw last fall was for three hundred ships if we started today you could say we're three hundred ships behind that particular shipyard but we're really ten years of three hundred ships behind that shipyard so trying to one of the questions that i asked my guys all the time when they bring ideas to me as it is what is it that would distinguish us from any of the other commodity kinds of producers that are out there that would give us an opportunity to compete in this marketplace in the commercial ship building business the kinds of things that are important to that business is not something that is terribly distinguishable to american shipbuilding it's it's probably not everywhere when you go to korea you'll see anybody who has half a half of a parking  lot they will be building a unit in that half of the parking lot to be selling to the ship builder down the road because it's a it's a commodity kind of business and that's not that's not the businesses that we've created to support the united states navy come up well i'm not i'm not always at the board meeting so i don't know that i could say that it comes up or doesn't come up i know that i'm not terrible i was last on your way or i haven't been gentlemen we were a few minutes out thank you for the long delays that you had to put up with in order to give your testimony with that this panel is really now recognizes mr ronald alter the president of mr mr olcott if you don't mind because of the lateness of the hour and the fact that there will be other votes we are going to allow you to make your statement when the vote is called we'll probably have to call it four day so we will give every member the opportunity to submit records to you for the record and hopefully you will respond come up today particularly the jones act and commercial building we at one time in the metal part i had contracts that had one point seven million american ship building workers building ships glad we were the largest ship building nation on earth but we're no longer and we also represent the coast guard's only ship yard in baltimore maryland and we represent the four naval ship yards including the shipyard in portsmouth virginia and admiral mccoy spoke earlier today we represent all of the naval sea systems command workers at all of those four shipyards where we do overhauling conversions of naval ships and submarines one of the things that strikes me is our experience at philadelphia shipyard with our unit there that builds commercial ships the product tankers those ships are  flagged as jones act ships however we have sued the coast guard for their interpretation of that because they're mostly south korean built ships brought over three hundred twenty containers per ship we build a barge and own that barge the ballet is built in south korea and the stern is built in south korea and everything inside that ship is built in south korea so we have about five  hundred eighty workers in our bargaining unit there had we built that ship american we would have over four thousand american workers working there so we would adamantly say that we're not really supportive of that type of build american jones act ship however that that experience has been limited exclusively and hopefully it won't go anywhere else yeomen the best thing that we can do for lowering the cost is buil commercial ships and i think everybody here agrees we also agree in the metal department you can lower the cost per ship enormously with the with the ability to build commercial ships one of our problems has been the subsidies we've lost the subsidies we lost the commercial building and i keep hearing folks complain about the number of suppliers and all going out of business but we put them out of business we've lost two hundred american suppliers in the last ten years that's go because they cannot make a profit making the products they make for the american ship building industry so we're in a death spiral and unless we do something to revive the american ship building industry we're dying and i can tell you that no major power in the world can exist as a major power without shipbuilding and our russian counterparts know that our chinese counterparts know that everybody knows that and they subsidize their ship building we don't unless we get a national maritime policy that subsidizes or otherwise supports the american ship building industry you know we're just voting ourselves it's not going to happen everybody set it u here if they can't make a profit they're not interested in doing it and i understand how that works so you know we can we can keep talking to a good game but unless we're willing to pony up and make it work it's not going to happen we would love to build ships we know how to build our people build ships that nobody else does we had the u s s san francisco at flank speed hit a mountaintop last thirty foot of its bow and came to the surface because of american ship builders they built such a ship that nobody else builds so we know how to build ships we know how to build em right we build em under cost you heard that we don't make the kind of wages they make in south korea we don't make the kind of wages they make in japan but we also don't have the money not belittle all that they have in south korea and japan we don't have health care that they have in south korea and japan congressman taylor we were on a four week strike over health care cost at northrop grum pascagoula mississippi if we could get a national health care product would cut approximately forty percent of the cost of doing business in america so we could be more competitive there are lots of things we've got to do but it's going to take a national policy and the  shipbuilders game that alone and neither can the shipbuilding labor it's going to require a national consensus to do these kinds of things and it's a very difficult thing to do and nobody is saying it's easy but the other thing is is that admiral mccoy and the metal part i had a wonderful cooperative relationship in our friendship programs and by the way apprenticeships are a trade union product and i'm glad to see that the commercial interests have taken got on the on the panel so thank you very much for inviting me today mr reich a member of course i appreciate your comments and understand the tensions you're right wonderful new program that's taken off like wildfire with the abbey for our returning veterans where they're bringing the veterans in and they're working him into the apprentice utilization program and i would ask that his remarks also be entered into the record we're nowhere near where we need to be in the program the problem we've got is catch twenty two we have more people my age still employed i'm sixty three years old we have people still at my age employed in shipbuilding industry that's not retired and allowing new people to come in and we lost an entire generation in the seventy's where we had th young people didn't come in and the shipyard stayed where they were we have mostly mechanics and we don't have the apprentices to put with the mechanics the thirty year veterans are mostly in the shipyards today they're in their fifty's late forty's early fifty's and we're getting ready tidal wave of retirements and we don't have the to replace them in the pipeline the problem we have congressman is that we don't have the orders and we don't have the work to support the number of apprentices that we need to bring on so it's another catch twenty two we're going to see a massive number of retirees in the next ten years in the shipbuilding industry and we do not industry about where do you think we need to be as far as the magnitude of ship building other words how many commercial ships do you think we ought to be building to get to the point where we have maximum capability for both building naval ships and commercial ships and you know i think we're missing out on some opportunities we see what's going on in south korea be nice if we could capture some of that business what do you what do you think the magnitude of that business could be utilized that capacity that we have existing right now in the in the people that you talk about that we could bring in could train and could could put to work thank you very much question where miss an opportunity replacing the jones act the jones act fleet will give us about fifty holes just replace what's out there with the jones act one of the problems we're having is with the d o d d o d is not buying jones act ships or american built ships under title ten they're leasing foreign ships so we're missing opportunities to do commercial type work there we're also missing a lot of commercial work on the double haul product anchors we could if we could get just the one in the jones act to begin the american hip building in the commercial flying i believe that we could start the program back up and start training the next generation of american ship builders we have the facilities you heard mr patterson talk a little bit about the building the the reactors there's nothing that cannot be built in an american shipyard where the arsenal of defense whether it's a bridge or whatever we could build it anything heavy one of the things that i spoke about earlier this year at the rightsizing reactor technology at mit using modular construction techniques at electric boat to build modular nucular reactors for the for the power industry and there's a lot of discussion now in the green power industry of using the smaller nuclear reactors and build them in our commercial shipyards that would be another way of bringing people in and train him because of those skills are readily transferable to ship building so there's a lot of opportunities we just have to have the jobs to place the people and to get the draining to start so what you're saying is we need to make sure that the jones act in force for those ships that are containers coming in from components built elsewhere and then the ship is constructed here of the ships that are of the domestic ships that are produced here and you tell me what proportion of those are manufactured from foreign components and what do you think we need to do to make sure that the component element of those ships or that we encourage or incentivize those components to be built here so that we can broaden the base of are now china china is going to be the next world shipbuilder nobody else is going to close if you're going to south korea go to china because they're going to be the world's shipbuilder but to make the point is most of those components are now foreign customer if we had the orders we would open those factories most of those factories are still in the united states and could be reopened with just the just the promise of a definite quantity order and you know that we see that across the board in all of ship building whether it's navy ship building or other every year we lose more and more component manufacturers even in the navy realm and one of the things they'll ship component manufacturers are asking us to give them is a definite quantity order if they could get three ordered instead of a bid on one pump and maybe you get two more you would get a substantial savings on those three pumps over the fact that they may get three burden thank you there's a vote on the floor there was approximately twelve minutes remaining on the vote most of us have not had an opportunity to see the motion to recommit that we're going to be voting on if someone has a question that they definitely want to ask we will make it available otherwise i would like to make one comment when we toured the shipyards you went to all of them with the specifically ask them if they were subsidised th all denied it now if they either are or they aren't and who do we go to to find out who's telling the truth one thing for sure when we can't buy the components for what they're selling to ship for and buy the components from them for what they're selling the ship for we can't buy the steel to build a ship that they're building in china for the price the chinese are charging for the ship if they were subsidized have a national health plan that doesn't put the burden on employers to pay for it and that obviously not just in shipbuilding but a whole array of manufacturing is really hurt this country and you know we're obviously in the middle  of health care mania right now but i think your words are something that people really should think about when we talk about trying to revive manufacturing in this country and quickly i mean loan guarantees though is that i don't i don't know about export in the worldwide commercial market i'm not one of those persons that would be qualified to really speak on that again we want to thank all of our witnesses we again apologize for the delays you or all of your time is valuable we have had a series of votes on the floor today some of which i did not anticipate all the members will have five working days since we are wrapping up tomorrow five working