many opening statements as possible before we have to head out for that purpose subcommittees meet today to receive testimony on the department of the navy in the department of the air force budget requests for combat aircraft for fiscal year tw and we have two panels of witnesses today i will introduce them first and then we'll have our opening statements from our chairs and ranking members and then turn it over to our first panel for their opening statements and we have the honorable ashton carter who is the undersecretary of defense for acquisition technology and logistics office of the secretary of defense we have the honorable christine fox director of the office of cost assess and program evaluation also with o s d the honorable j michael gilmore director operational test d mr michael sullivan director of acquisition and sourcing for the government accountability office that is the first to tell on the second panel have the honorable sean stack wayne assistant secretary of the navy for research development and acquisition lieutenant general george troutman deputy commander of the marine corps for aviation rear admiral dick filmon director of the air warfare division for the u s navy mr david van buren acting assistant secretary of the air force for acquisition and last but not least lieutenant general philip breedlove who is the deputy chief of staff for operations plans and requirements as i mentioned with schedule this hearing to give members the opportunity to address issues related to all combat aircraft programs of the navy marine corps and air force will be having another subcommittee hearing in late april to address mobility aircraft programs i have a complete statement and unanimous consent i will ask you to be included in the record and i will just briefly summarize  this committee is very interested in this issue this is arguably the biggest financial issue facing the department of defense in the armed services committee with the price tag on the joint strike fighter going forward and the challenges that the program has face and what we really want to learn today on the committee is what the four structure for combat aircraft is and what our plans are for meeting that force structure requirement i'm sure some members were also be curious about how we arrived at those requirement numbers year to year going forward and then the specifics of how we get there there are a number of different air platforms or aircraft that are going to be factored into that but obviously the big ticket item here is the f thirty five joint strike is meant to replace a fair number of airframes within our force and therefore how it is progress plays a major role but there are other issues but how long can  fifteen's in the sixteen's last in your estimation how many more f eighteen might we need to buy and how does all of that combined to give us the four structure that we require for fighter aircraft we need to have a better understanding that in the main concern is the slippage in the cost overruns within joint strike joint strike is considerably behind its original schedule and on pace to be considerably more expensive and my biggest concern at this point is not just that though certainly that is a concern that to a certain degree is the past the future is what is our path forward and in my study of this issue it is not become clear to me that we have a clear pa forward that we can confidently assert that we will meet i am worried about whether or not this program will continue to slip to the right it will get more expensive as we go we've laid out a new schedule again it is not clear to this committee yet how it is that we have confidence in that schedule as we know our test aircraft have encountered a variety of different difficulties i don't think we yet have a clear idea of this is what any one a b or c variant is going to look like this is what we're building we know we can build it i'm ready to get started it's quite a ways out before we get to that point one of the aircraft i believe was scheduled to start production aircraft in two thousand and twelve the other two variants are going to be twenty sixteen and with all of the testing problems that we've had with all of the cost overrun problems that we have our committee really needs to gain greater confidence that we have a plan going forward certainly people will study what went wrong in the past but for our purposes right now the most important thing is to know that we have restructured a schedule that we can confidently meet so we're not sitting back here again next year going here new plan to a certain degree that's what happened between last year and this year we procured a certain number of aircraft in the f y ten budget that after having done it through the authorization act and appropriations process came back to us and said we don't really need that many because we can't get there we would rather not keep having that happen every year this is over ten billion dollars of our procurement budget the largest chunk we have and we need to make sure that we're spending it wisely because as i'm sure all of you are aware we clearly and unequivocally have other needs as well as i said i have a longer statement for the record that gets into some of these details that will mean a vailable but those are the main concerns that we hope to hear from our witnesses today and from the questioning forty percent more than some of the legacy platforms that is replacing so i would hope that those three things could be addressed in today's hearing like everyone else i realize there is a need for the f thirty five i would also remind our panel and everyone in this room that about the time whereby the f thirty five will have the ohio replacement coming online at an estimated seven billion dollars per ship the social security trust fund will no longer be collecting more spencer will be spending more than it collects medicare trust fund will be spending more than it collects there'll be a lot of problems the nation will be facing which means if we need the platform as a nation and i think we do we all have a huge responsibility to make it affordable so i thank you for calling this hearing  and thank you mr bartlett thank you mr chairman i'll keep my remarks brave as we've got a busy schedule today with two panels of witnesses and both subcommittees independence i welcome all of our witnesses and thank you for being here today this committee has been actively working to try to understand the risk the department is taking in its combat aviation programs i hope that this hearing will clarify some things for us because i have some real concerns about the force structure decisions that have  reviewing the report to congress on the combat air force restructuring plan it appears to me that the recommendation to retire two hundred fifty five years in the air force inventory and the subsequent budget reductions were made before the secretary of defense announced he was terminating the f twenty two production and before any of us learned of the years of the lineout forecasts in joint strike fighter fielding so while the air force assumptions back in two thousand and eight led to a conclusion to this that the short term risk was manageable the fact is today those assumptions are not reality despite that it appears approach the air force is going ahead with the plan i also share my colleague's concern over the health of the joint strike fighter program this as an enormously expensive program that promises a great deal of capability but i'm frankly concerned that the cost growth will render an affordable in the long term in my eighteen years in congress i have seen program after program in which the cost grows the production is reduced to fit inside a fixed budget and the program ends in a spiral that leaves the services well short of their inventory requirements and attempting to manage the risk associated with the j s f program all of the services appear to be looking for stopgap measures however to my knowledge the engineering analysis needed to determine if service life extension programs in our existing fighter planes are a reasonable course of action have not been completed yet so we don't know what it will cost how long it will take or the resultant service life is worth the investment to make matters worse it has been very difficult to get details from the office of the secretary defense and the j s f program that is generating not only a sense of frustration for the committee but also an element elevated our concerns about the true state of the program and validity of the proposed restructuring some  continue our work on the fiscal year two thousand and eleven defense authorization act i hope the witnesses before the committee today will help us do that thank you mr chairman for holding this hearing i look forward to the discussion thank you mr bartlett mr mr chairman my sincere hope is that during our first panel be able to reach a common understanding on the progress being made to date on the joint strike fighter program any remaining schedule in affordability challenges and the department's plan for managing those risks i'm particularly concerned about the unprecedented concurrency of testing and production and i'm convinced that this is a bad idea at the same time i believe it is just as important that we come to a common understanding of the big big picture affordability and inventory risk of our nation's strike fighters the department has many competing priorities including but certainly not limited to tactical aviation much like shipbuilding we're seeing alarming for structural levels and increased demand on our equipment across the board although we may differ in terms of our recommendations for balancing d o d s invest but against those many priorities we should at least be able to come to agreement on the shortfalls and risk we are assuming as a result of our decisions sadly to date the department has been unable to articulate the shortfall it faces in navy and marine corps strike fighters let alone tactical aviation across all of services without consensus within the o d in the on the situation we can hardly hope for a fair share definition of the problem between the executive and legislative branches let me show you what i mean in march two thousand and eight the department briefed the committee part of the navy shortfall was one hundred eighty eight aircraft that's march or wait in march of zero nine we're told the shortfall was three twelve as if by magic two months later on may two thousand and nine we're told the shortfall was only one forty six at the beginning of february two thousand and ten secretary gates testified the shortfalls only one hundred aircraft for the end of february the committee was told of the shortfall was one seventy seven five days later my staff was told a shortfall of a hundred was shortfall was one hundred aircraft in testimony before the sas this month miss fox stated that one hundred was an old number and while she could not provide an estimate of the shortfall it was under review some change to these estimates could be expected as changes are made to the j s f program of record and the other fact of life issues arise but based on this track record i think it's easy to see how we could become concerned that either the department does not know how to handle handle the viability of the strike fighter of authority or the department is changing that a mask a problem in response to this uncertainty the congress has provided tools to the department to a create affordable options to improve the strike fighter inventory among these is the authority to enter into a multi year contract and super hornets and growlers that could save the taxpayers nearly half a billion dollars unfortunately d o d has yet to take advantage of this tool and time is running out even if the d o d comes to its senses and proceeds with the multi year the department of the navy will still be several hundred plane short i am baffled by the continued reluctance of senior d o d leadership to honestly address this shortfall my goal today is to achieve that mutual understanding of the problem we could benefit greatly from the panel's views and updates on these issues i do look forward to your testimony but my the biggest single question i have is if you and the many other people who have appeared as witnesses before this committee over the past two years would simply look us in the eye and say you guys or congressman you're the ones that make the decision about what kind of budget we have for defense and given the abou the money you're giving us this is our best bet as to how we balance things i don't have a complaint but when all i get is year after year smoke and mirrors and people pretending like there's not a problem and people pretend like they're answering a question everybody in the room know you're not answering questions and makes us have a very very low opinion of your ability to actually deal with what the situation is in a rational manner i hope i make myself at least a little bit clearer thank you mr chairman tactical aircraft programs i have a lengthy and detailed written statement the department's also provided you with responses to many questions you had in the letter of invitation to us and we've also provided you with the several independent reviews that importantly illuminated our department wide review of the joint strike fighter program which is one topic i'll be reporting on today so with your leave in my oral statement i wanted to describe the basis for and the main ingredients of the restructuring of the joint strike fighter program to put it on a more realistic basis mr chairman i thought i'd touch on the analytical foundation for the department's decision not to pursue a second engine for the joint strike fighter i'd of course be pleased to answer questions on other topics with respect to the force structure requirements i'm pleased to talk about that as well i just thought in view of the time that that might be better pursued with the navy and air force panel which follows me but again i'm happy to address that i'm accompanied on this panel by christine fox the director of cape mike gilmore director of operational test and evaluation and on the next panel by the service acquisition executives mr van buren and mr stack we all four of those individuals participated in the internal reviews of j s f which led to its restructuring and they can all provide additional detail is our largest as has been noted critically important program and it's important for the three services that are going to  depending on this aircraft our international partners and of course you to know whether after the recent restructuring is now a realistic and stable path to complete development and testing and eventually full production to produce twenty four hundred forty three aircraft for us the marines the air force and the navy and seven hundred thirty for international partners the easiest way to answer this question i think is to recount the sequence of events over the past several years again full detail as provided in the written statement but j s f development began in two thousand and one and at that time the unit cost of a joint strike fighter there were twenty eight fifty two u s fighters planned at that time now twenty four forty three was fifty million dollars in two dollars which would be fifty nine million dollars today in retrospect this estimate may have been unrealistically low something we're trying to trying to avoid in the future by requiring independent cost estimates early in the lifetime of a program as is required by the weapons system acquisition reform act but in any event by two thousand and seven the estimated cost had grown thirty six percent namely to sixty nine million dollars in two dollars in late two thousand and eight and this may go to a point you were making earlier mr  bartlett the first joint estimating team analysis was conducted yet one ms fox will describe how this was done but jet one found that j s s costs were continuing to rise in the development program was le taking longer and therefore costing more than projected by the joint program office and the contractor secretary gates at that time determined that the jet estimate was credible and early in two thousand and nine and he accordingly added four hundred seventy six million to the program that is for fiscal year ten to try to arrest this trend by november of two thousand and nine a few months ago jet completed a second analysis jet to that was that became one of the foundations for the restructuring the jet to use results were substantially similar to those of jet one a year before namely the line at fort worth was still taking longer than planned to produce the initial j s f aircraft and this was delaying flight testing and therefore the ramp up to full rate production and also costing more money so that the unit cost of the aircraft which had been fifty million in two dollars would now be as much as ninety five million dollars that is up to ninety percent cost growth so it was clear in november of last year that if we took the jet to estimate as credible would have been none mccurdy reach similar results from the jet over two consecutive years clearly indicated to the department that we needed to take a more forceful management action this year than we had taken in light of the jet one estimate a year before at about this time also two additional reviews were  conducted the jet by the way as i said indicated was conducted by ms fox's office my office sponsored an independent manufacturing review team which looked at the performance of the manufacturing process and also something we've got a joint as assessment team to look at the performance of the engine the f one thirty five engine all of these things came in together  late last year and we accordingly undertook a department wide review in november as though we were already in an mccurdy breach this review continued through december and january and the result was the restructuring announced by secretary gates in february and i realize i may say so during this time we were conducting the review and before the president's budget was better in the future but that is what led that is what led up to the restructuring that secretary gates announced in february and let now let me describe the main features of that restructuring and the rationale for each first the department undertook several steps to stop the development and test programs schedule from slipping yet further there were three actions one was the purchase of an additional aircraft to add to test that's just the physics of getting through the test points faster if you have more test assets so also secondly the addition are actually borrowing or luna of three developmental aircraft to chat i'm sorry three operational test their crap to developmental test again to hasten the process of completing developmental test and third integration of a sorry addition of another software integration line to ensure that the writing of mission systems software would not become the factor that lengthen the development schedule after we tried to take care of the lengthening of the developmental flight test program these three steps the schedule slip that had been estimated by jet to be thirty months of schedule slip was reduced to thirteen months of substantial though not complete restoril of the original schedule second feature the restructuring was recognizing that the three step sign it just described cost money the department decided to withhold six hundred fourteen million dollars a fee from the contractor since it was not reasonable for the taxpayer to bear the entire burden of what is after all disappointing performance by the program i might add that the contractors have been part of this process from the beginning in event of size their commitment to better performance and we're expecting that third the department directed that the results of the independent manufacturing review team i described earlier regarding the ramp up to full rate production be adopted meaning that the joint strike fighter program should plan for a somewhat later that's the thirteen months and somewhat flatter ramp to full rate production that had been planned this step had the effect of reducing concurrency in the program fourth the department determined that the jet to estimate revised to take into account the changes i've already described would be adopted as the program baseline for budgeting purposes throughout the future years defense program and beyond that is that we would accept the independent cost estimate as the basis for the program and that is the basis mr chairman for what we hope and believe is a realistic forecast ah come back to that point in a moment but as i mentioned also accepting that forecast implies a non mccurdy breach fifth the department directed that the position of program executive officer for the joint strike fighter program be elevated to three star rank to give a fresh eye and vigorous management  strike fighter and i'm pleased that president obama has nominated by sentinel dave been led to this position these five steps then are the j s f restructuring in a nutshell we believe that this restructuring puts ja h on a realistic path to restore its performance over the next few years will be looking closely to the program to show progress against a reasonable set of specific objectives according to this overall plan will be managing aggressively to see if we can improve the performance of the program relative to the jet to forecast including the possibility of buying more than forty three aircraft in fiscal year eleven and an earlier transition to fixed price production contracts while mr chairman the plan is realistic this is still a challenging program entering its period of flight test and these are all forecasts not weather forecasting but as program forecasting reality is going to get a vote at the same time no fundamental technological problems have surfaced in the reviews to date nor have the capabilities of the aircraft changed in some in response to the jet and other estimates of the j s f programs performance and the impending none mccurdy breach the department is undertaking a fundamental restructuring of the program we believe it's now in a stronger footing we now turn to the subject of whether two engine should be part of the joint strike fighter program rather than one the department's decision not to support the second engine is a judgment informed by the analysis conducted by cape under ms fox and which has been provided to the comm we weighed the very real up front costs of preparing a second engine for competition estimated two point nine billion dollars against the possible long term savings produced in the outyears from the competition assumed in the analysis the analysis shows that under these assumptions the long term savings calculated just balance the large upfront investment however the assumptions that need to be made to produce this breakeven result are optimistic and in some cases unrealistic for example the analysis assumes that the second engine quickly follows upon the same learning curve as the first engine that the additional learning will outweigh the fact that each manufacturer will build fewer engines and therefore proceed less far down the learning curve and perhaps most importantly that there will be true competition the more likely dynamic is a series of split or shared by us since j s f will be by diverse set of customers many of whom are unable or unwilling to purchase from two engine manufacturers we therefore concluded that the department is unlikely to realize these long term savings and that the two point nine billion dollars required to prepare the second engine for competition would be better spent on other critical military needs we also considered potential nonfinancial benefits of having a second engine for the f thirty five but did not find them compelling on this basis the department is respectfully requesting that the congress not direct pursuit of the second engine again this year thank you mr chairman distinguished members of the committee thank you for the opportunity to appear before you dr card statement in our written testimony to provide you with the specific information about the joint strike fighter independent reviews and the sub restructuring today i would like to quickly emphasize just a few key points first tape conducts independent cost estimates for major weapon systems providing the secretary and o s d leadership an estimate derived independently from the contractor and the program office the weapon systems acquisition reform act recently increased the responsibility and authority of cape in the conduct of these estimates in the case of j s f we went one step further and built a team of experts from the defense tactical aircraft community specifically the joint estimating team or jet was composed of multi functional government experts drawn from the navy air force and o s d staff the members of the team provided technical expertise across the areas of air vehicle and mission systems engineering testing and cost estimation the jet conducted comprehensive onsite reviews with the prime contractor and each of the major sub contractors for the j f program they then benchmark this information against past programs to forecast the likely path of events going forward as dr carter just explained the jet conducted two reviews the first  conducted last year and was made available to the o s d leadership in the congress this past summer the deputy secretary of defense directed that the jet one be updated and the results of this update jet two were consistent with the findings of jet one and lead the secretary to significantly restructure the program as dr carter has just described to you it's important to let you know that this restructuring in my view is completely aligned with the findings of the jet too and fully consistent with the congress goal of using realistic cost estimates and schedule information to assess and structure a program in particular jet work because it's based on historical comparisons allows more time for test and allows for more test points than was in the original program allowing for more tests discovery it is difficult to mathematically calculate calculate the precise confidence levels associated with independent cost estimates prepared for major acquisition programs based on the rigor of the methods used in building cape estimates the strong adherence to the collection and use of historical cost information and the review of the slide assumptions we project that it is about equally likely that the jet estimate will prove too low or too high for execution of the restructured program as described finally i would like to discuss the analysis behind the secretary's decision not to fund the alternate engine for j s f we've provided you with more details on this but quickly i wanted to let you know that we were able to conduct a business case analysis of the alternate engine and that analysis after accounting for all of the sunk costs to date suggests that we are at the breakeven point in net present value term the business case analysis included several optimistic assumptions dr carter has described on another is that the start of the competitive engine  twenty fourteen was also able to estimate that d o d would have to invest approximately two point nine billion dollars to fully fund the alternate engine on a more realistic schedule in light of the program restructuring to the point where it could participate in a competitive procurement that we now estimate would be and twenty seventeen we could not however quantify the intangible values of competition that are often cited based on the fact that the additional early cost to the program are known but the intangible intangible benefits of competition are speculative the secretary decided that we could not afford to invest the additional two point nine billion dollars thank you again for the opportune need to appear before you today thank you mr gilmore german smith chairman taylor members of the committee my primary concern is that the joint strike fighter program be structured to conduct robust developmental testing so that we'll be ready to do the operational testing which will confirm the combat capabilities of the aircraft in january twenty fifth meaning complete that testing in april twenty sixth we don't want discovery of problems significant problems to be postponed to operational testing because problems discovered that late will be more costly and more kind consuming to fix than if they're discovered early and the only way to assure that is to have a robust developmental test flight program the changes to the program that secretary gates and dr carter have directed are going to be key to assuring that that robust developmental flight test program occurs and the important changes that have been made are of course providing additional flight test aircraft for additional flight test aircraft providing the resources and time needed to develop deliver and test effective software because the mission system software is very complex and provides that combat capability  have to account realistically the inevitable discovery problems during flight testing which means you have to have sufficient time to do the flight testing and you have to provide the engineering other resources needed to maintain an adequate pace of testing and the changes that have been directed address all of those issues so my concern is that the rig the developmental flight test program be the robots that restructured program takes the steps necessary to do that thank you and i look forward to your question our updated analysis to the competitive engine discussion in brief mr chairman even given the strong actions taken by the department to recently restructure the joint strike fighter program it continues to struggle with increased costs slow progress and risk of not being able to deliver expected capability and quantities of aircraft to the war fighter on time it's also important i think to note that setbacks and costs and deliveries of the joint strike fighter directly impact modernization plans and retirement schedules for our aging legacy aircraft that the fighter is slated to replace the recent restructuring increase program acquisition cost by forty six billion dollars in the near dollars compared to the program baseline approved in two thousand and seven about ninety two billion dollars when compared to the original two thousand and one baseline it also read it also did the things that dr carter went through which we think a lot of those things are very important to put to actually putting the program on firm footing and having much more reasonable cost and estimates at this point and another thing it did is that we found important was a reduced near term procurement quantities by as much as one hundred twenty two aircraft which again we think helps reduce the risk of buying aircraft that may not be through flight test at that time that's two thousand and fifteen these actions should put the program on a firmer footing and they should establish more reasonable estimates for aircraft deliveries however there is still substantial overlap between development testing and production activities slowed by manufacturing delays later craft deliveries and low productivity the flight test program has barely begun and only completed about ten percent of its planned sorties during two thousand and nine in addition the program is relying on an extensive but largely unproven network of ground test laboratories and simulation models to evaluate aircraft performance it's developing and integrating very large and complex software requirements and is still maturing some of the technologies that are essential to the cost savings the program plans to get in the lifecycle due to logistical support requirements with the restructuring in place the department still plans to procure up to three hundred seven aircraft at an estimated cost of fifty eight point two billion dollars through two thousand and fifteen before completing flight testing we view that as very risky these aircraft are currently being procured using cost reimbursable contracts which i think that chairman in the committee members understand that that indicates that there is a great deal of cost risk still in the aircraft due to many uncertainties the contractor doesn't feel prepared to bit of a fixed price i believe dr carter did address that and i think that the department now is trying to move much more quickly towards fixed price contracts we're hoping that that they can do that that would be good now turn to the the alternate engine discussion as requested for this hearing we have updated the analysis that we've done in the past for this committee to assess whether that changes to the joint strike fighter program that dr carter just discussed have impacted the costs and benefits of sole source and competitive scenarios scenarios for acquisition and sustainment of the joint strike fighter engine are updated analysis indicates that given certain assumptions competition may reasonably be expected to provide enough savings over the life of the engine to offset the investment in developing a second engine source in a small source scenario the engines will cost an estimated sixty two point five billion dollars in two thousand and two dollars over the remainder of the program additional cost of between four point five billion and five point seven billion dollars may be needed to maintain competition some of that is the upfront investment that we've discussed to get the other contractor through development i think that's somewhere between one and two billion dollars and the rest of the ad is due to the increased overall cost the recurring cost per engine that would and the learning curve losses that will take place if the competition goes forward we ascertain that the cost that all of that cost the four point five to five point seven billion could possibly be recouped if competent if competition were to generate approximately ten to twelve and a half percent savings over the life of the program air force data from past engine programs where competition was introduced into a sole source environment indicates that savings of that much or more have been achieved in the past however whether they add happens on this program will ultimately depend on the final approach for competition the number of aircraft aircraft eventually purchased the ratio of engines awarded to each contractor and when the competition actually begins in addition to cost savings most experts also agree that there are other benefits to competition that are not directly tied to savings such as improved contractor responsiveness engine reliability and technical innovation currently both the primary and second engine sources have experience cost growth and delays b f one thirty five primary engine development cost is now at summated at approximately seven point three billion dollars a fifty percent increase over the current budget estimate the most recent unit cost for the conventional engine is now seventeen point seven million dollars which is forty two percent higher than the original estimate similarly the unit cost for the short takeoff and vertical landing engine rose from twenty seven point six million dollars to thirty three point four million dollars a twenty one percent increase as planned one thirty six alternate engine development is about three years behind the f one thirty five program it also is facing cost and schedule challenges similar to the f one thirty five both programs have experienced about twenty one months delays for their initial release for flight testing mr chairman that concludes my prepared statement i'd be happy to entertain questions thank you very much a lot of ground to cover a lot to ask about force and have a lot of members on the committee who are very informed on this program so we'll spread that around but i'll i'll start by asking dr carter ms fox about these cost estimates going forward and i realize you as you quite accurately said dr carter events will happen and we will have to adjust to them but i want to get some greater idea for how how much we've clarified the picture i mean going forward there are a lot of taylor's territory here but with the sea model i think it is not got that right the one that takes off in the navy version what's it going to do in terms of how we have to adjust aircraft carriers so different military construction i don't understand it k p still looking at some of this can you give us some idea of what you're done with what you're still looking at in terms of what what are sort of if you it's a terrible phrase but the the anticipated surprises that you still haven't quite been able to calculate can you turn your back yes my chairman the cape estimate upon which we based the restructuring was of the development program the ramp up to production and initial production because that is the part that is the phase that is immediately were on us and we had that estimate and then we had another estimate from the program office and the contractor which was a which showed less cost and a more accelerated schedule the essence of accepting the jet estimate is is i what i certainly believe and i know the secretary does that that is a more credible forecast for those three phases than was the program offices and the contractors beyond that when we get out beyond production to sustainment that course many years in the future so there isn't managerial action that needed to be taken at this moment about that but it is something we need to manage going forward what are the costs of these airplanes going to be to operate them in the years in the future when they come not too early to take a look at that beginning begin to manage that and that is something we will be looking for going forward it doesn't affect our managerial decisions at the moment but you're absolutely right that's a phase out there in the future that will need to be cost it also but we think we have our most realistic estimates of the development ramp to production and production i'll repeat what ms fox said about these are so called in the art that her office practice is a fifty percent estimate meeting in this isn't math it's judgment that there is in the judgment of the estimators a fifty percent chance that the cost will be greater than estimated a fifty percent chance last that's why i talk about no it's not weather forecasting but it is and we are giving you our most realistic judgment and we're trying to manage to that realistic what was quite clear was that the path we were on was not realistic enough dr morris sullivan said to have you deal with a couple different aspects of what is one of the central problems at this point we're going to be procuring aircraft while we're still testing them and there's always a delicate balance there i mean ideally you'd like to have it tested know exactly what you've got in your good to go but the rapid pace of technology and the changes make that difficult with some of our new systems but i want to get a greater idea of the risks involved with that plan again our hope is i think by twenty sixteen i get my  balance those risks in terms of what it's hard to say you don't know exactly what you're going to figure out the flight testing on the other hand we have been testing it for a little while and have some idea of what's going on is it a good risk that is being taken here by saying that we're going to an ass and sort of bet on the come we're going to start building this thing and we're going to learn as we go and then make changes to it as we go what are the risks there and how do you think the approach that has been laid thirty seven flights out of fifty seven hundred that will be required so we're at the beginning now with regard to how many aircraft will be delivered as one flight test has begun and it's just now started the program will be living more aircraft than almost any other aircraft program have been delivered as before flight testing is complete that's just the situation obviously we will know more and more as we go along and the rate of discovery of knowledge of knowledge is going to increase rapidly under current plans that's also consistent with past history so i mean there's a there's concurrency in the program that concurrency is greater than it's been in the past but there you know the history of these programs is that there is concurrency is a fairly big risk as described given how really we are in the testing portion  comparison not to be making that big a production commitment well on the one hand there is there is risk that you could run into structural problems and have to fix those and that would could potentially be time consuming and costly to fix now so far there's no indication of major structural problems and they have completed a good deal of the ground testing of the structure although that's not completely that's not completed there's also a risk that you could run into problems developing the mission system software however if you if you run into those problems a lot of those problems can be fixed not by changing the hardware but by continuing to work on the problems fixing the software and doing a new software release a good deal of the risk and program is associated with developing mission systems software for example the mission system software lines of code are two and a half times in joint strike fighter at the current estimate that they were in the f twenty two but you can't fix those kinds of problems without major hardware changes in a number of instances so that that counterbalances that mr solomon did you have an add on that our perspective on that is first of all there  is actually in the in the acquisition policies of the department a kind of a rule that you shouldn't procure more than ten percent of your total buy in el ramp which is what they are  in and you should try to get to fix the fact that these are cost plus contracts if the department can get this to a fixed price environment that will settle a lot of this risk but in addition to that i think the risk moving forward dr gilmore alluded to the complexity of the software and i think there's a lot of risk left in that because to get to the full capability aircraft which is black three software i not sure how far along a program is in doing that they haven't even established the lines of code for that so they've got an enormous effort in software they haven't flown i think that the development flight test program now has probably basically and said you only needed half of those how confident are are you in the number that you're asking for us this year because on the surface of it we're not confident at all and that's a big chunk of our budget were put into this and we've had to do that again and then have the number change six months after we did it what's different this year from last year on that issue as that yes i just mean dr carson we have slowed the ramp down  considerably going forward and that was one of the most important decisions we made in the restructuring it was in recognition of some of the risk that has been a deuced here and we did try to reduce that risk including the concurrency risk if i were trying to strike a balance here mr chairman in the concurrency issue on the one hand if you if we tried to pull the ramp back to the ramp up to production and steeping it unrealistically we would have excessive concurrency in an excessive risk that we would discover in the course of flight testing things that had to be retrofitted and fixed and it would be expensive against that if we slip the ramp too much or flatten it more than we have already you're adding cost and adding schedule unnecessarily so we're trying to fix that bounce we think we're in the sweet spot of that balancing as best as we can ascertain it now so we have slipped the ramp and flattened it we're not recommending slipping it further and flattening it further because that increases cost and delays the delivery of the aircraft to the services we're not recommending keeping the ramp however where it was before the review began because that seemed that not only seemed it where our judgment was that that was  comment also on the fixed price of the very important point i'm glad mr sullivan their willingness to go to fix prices a measure of whether the contractor judges that the the assembly line is stable and therefore the contractors able to predict its performance well enough to offer a fixed price so that is an indicator that's why we are using it and i indicated that in my opening statement we want to move to fixed price contracts as early as possible in l ramp that asks the contractor to make a commitment to the stability of the line contractors indicated a willingness to do that that's a good deal for us willingness but they've not actually done it yet we're in negotiations now we will learn that i do have to if you have some really quick i just want to very quickly to say that i think another issue in all this is the ability for them to deliver aircraft from the manufacturing facility now that's not going well and with flight testing there's going to be more design changes there's an awful lot of design change traffic hitting the floor  i think manufacturing this aircraft moving forward is going to be that's another one of the risks on the program yes mr bartlett thank you very much mr chairman mr sullivan how long after we started the development of engine one thirty five did we start the development of engine one thirty six by memory serves me right it was forty six months correct i think approximately it's about a three to four year forty six is a number i remember you said that the one thirty six was one year behind the one thirty five which means in fact that it of that one thirty six is proceeding faster than development of one thirty five this three years behind one thirty five is because its development started forty six months nearly four years behind so it's in reality almost a year ahead of the development of were in fact ahead in development plan or that the program was planned to be three years behind so that it could they could ramp into competition congressman barton the information i have is that the development of the one thirty six is about two years behind schedule that was planned in two thousand two thousand and five which placed the development of the engine did start by design four years later than the development of the one third of the one thirty five of the one thirty six is about two years behind the schedule that the contractor and the program office had laid out as recently as two thousand and five and how far behind is one thirty five it's about the same amount that much or more it's about the same amount to hide they had the both engines of had similar kinds of problems the kinds of problems that should be expected when you're trying to develop and build a high performance jet engine dr carter in both your written testimony oral testimony you noted that analysis and cost estimates done in november of zero nine estimate at that time it was very different from what we had our program office was to ling us which was the official baseline at that time it was then around the turn of the year that we completed our review of the jet estimate and concluded that the jet estimate and not the program office estimate was the more realistic of the two it was january when the secretary of  breach it'll be a matter of days before the official declaration goes but once we accepted the jet estimate for adopted that that meant that the program would be in in one mccurdy breach  because the forecast of the programs progress made in the jet estimate suggested greater than fifty percent cost growth which is the trigger for not mccurdy are there regulations written unwritten in the  building that precludes including us as a partner in those discussions i have to get back to you on the technicality of that certainly as a general matter no we try promptly to keep this committee informed of important developments and programs that are in your your purview as i said when i earlier because of the particular time ino the jet estimate and the department's deliberations which were in the december january period leading up to the release of the president's budget it wasn't until the president's budget was released that the  the jet estimate was which was included in that budget was available we did however as my understanding that the jet estimate even back in two thousand and eight was made available to the the committee thank you your statement goes on to say that program management contractors and the department need to surface candidly and openly issues with this program as they arise so that congress is aware of them and they can be addressed close quote in this spirit of that statement it would have been nice i think it would have been a part of that two months discussion between november and january would you agree i promise that going forward we will be as open as we possibly can and candid about the the the what's going on in this program i firmly believe as the acquisition executive that you've got to create a climate in which people are willing to surface issues and programs that's the only way to solve them and that's the only way we can get programs are particularly at this particular inflection point in the transition from development to production they're going to have issues and if you don't create an environment in which those things are surfaced you're never going to solve them have thank you mr chairman i yield back thank you for members information we have had i think how many were four votes i think it's called one fifteen minute three five we're going to get to mr taylor at least before we go push this up a little bit and then we will have to take a break and come back mr taylor actress sharon and mr carter of been listening to your rational arguments on the dual sourcing for the engines and you tell me that because of the huge r and d costs that even if you get a second source in a about the time you bought all these engines you end up with i think the word you used was a wa i'm curious since that is the way you have chosen to proceed are you demanding that vendor the successful band provide to the services a technical data package that we would own the specification said engine the reason being is if r and d is the reason it makes that second engine and affordable then you're only paying in effect for one case of r and d but then you are in a position to take the specifications and see if a second vendor wants to build the engine that you have now blessed if you have and we're doing that with some other things right as we speak in navy ship building if you perceive that line of thought at all if not tell me why to the that particular approach to second sourcing engines was tried once before in the case of the f an eighteen  and was not successful walk me through it we just to answer your specific question we have not required the vendor of the f one thirty five engine to to  produce the technical data package that would allow a building to print version of a competitive engine decent competitive engine program that has been pursued has been an independent development of a second engine  i'm just down without the technical data package we're paying for this research and what i can tell we're paying for every penny of this research as a nation then why should we not have the knowledge that is ga why should someone have a monopoly on that knowledge for replacing that engine and some point for fixing that engine at some point wouldn't it be a wise acquisition tool for our nation to own that nickel data package  a specific answer to that question what i can tell you is this regarding the r and d two things one is that with respect to the r and d on the so called second engine the f one thirty six that is a part of but not all of the cost of repair that due to compete the other thing that i think may be useful to say at this point is that we do value competition in the military jet aircraft engine field and innovation in that field and we have a number of programs to increase the fuel efficiency the thrust to weight and other desirable features in the military aircraft engine area so that only ok so then you just talked yourself into a dual source so which one is not a dual source for the joint strike fighter engine i'd like to have more than one and we do have more than one competitor in the military aircraft field i don't need to have two duplicative engines for the f thirty five in order to have two parties in the military jet aircraft  engine business i do want that and some of our tech base programs in addition to developing technology have that purpose on the question of the second engine for the f thirty five i have the greatest respect for people who come to the opposite decision from the one we've come to know that many people with great expertise do and i completely respect that point of view it's simply a matter of looking at upfront costs which are very real and assumed savings as a result of a competitive process that is much harder to have confidence would actually produce those savings and one just has to make a judgment between those two we made a judgment that the large near term costs which displace other things we could spend our money on not those costs are not outweighed but again i respect people who come to the other view we needed to make a judgement between those two cases and this is the judgment that we can discard not to belabor this because there are other people with good questions but i would like you say within the next two to three on in that is that the one behind their predicted schedule for development and the other is frankly the restructuring of the program overall in order to get the engines in a place where they can compete we need to have directed by a need to be sufficiently mature in order to successfully compete given that we've slowed the ramp and move the program out we need planes to do that with and so it has just mostly the nature of the restructuring pushed it out some of the delay in the one thirty six of a thirty five's is prudent do you believe procuring if you are at thirty five in fiscal year twenty eleven would decrease the program risk if so what leads you to believe i think we you it as any aircraft that you get out of the near term fiscal year eleven specifically would reduce risk to the buyer and we base that out a couple of things number one as we said earlier the lack of development flight testing that has been done so far so that there are still a lot of unknowns about the design and about how the software is going to work in the hardware is going to work but in addition to that we think it's prudent because as i alluded to earlier they're still having the contractor still having trouble learning how to build the aircraft it's not coming down the learning curve real well so in effect there's kind of a backlog of aircraft as we speak i think in fiscal year two i think there's like twenty eight aircraft on order now in this year they're asking for another forty three you're beginning to get a backlog aircraft orders that we're not sure they're going to be able to build within two years and then i do want you know i haven't the communities that represent south carolina the marine corps air station i represent communities adjacent the community arabs and enjoy the sound of freedom so we'd love to have the congressman may i make a comment on that in response yes last question there are two kinds of risk here  and i really think we need to balance the two risk at least we're trying to do that one can reduce the risk of the kind that mr sullivan is referring to by waiting until develop all the testing is done and then starting production that reduces that risk but it means that you don't get the airplanes until later and they cost more so one can't talk about only one kind of risk there are two risks here that are being balanced one is the risks associated with concurrency which mr sullivan stalking about which is real but one has to balance against that the risk of slipping the schedule and the ramp to the point where production isn't economical and jets are delivered later than they otherwise could be that's the balance seen that we're trying to do so risk has several dimensions to it and just reducing risk by by slipping the program introduces yet another kind of risk we're  trying to balance those two and in the restructured program have done our level best to strike that balance and i i just can't imagine all the different risk in the balancing you have to do but thank you for expediting however i understand the official restructuring acquisition decision memorandum has been read recently approved a quarter you mentioned that if contractors can execute a development program and or deliver aircraft at lower cost to work with congress to shell aircraft what would be the incentive for the contractor and the government team to reach these milestones it's in the interest of the contractor to get up that production learning  curve have confidence in the department of defense in you in the services in the international partners in the ability to produce aircraft so it's very much in their interest to produce more than forty three aircraft and in f y eleven if that is at all possible we're trying to use that incentive to get better performance and that's a commitment the contractor has made and i'd like to hold them to and and enjoy the benefits of on that we have to go we'll hopefully be back in twenty minutes to a half hour there are four votes we're about out of time on the first and we have the next three so we should be able to maximize our time  if we could have everybody sort of refined their seats where we're done now members should be drifting back and here shortly want to make sure we maximize our time thank you joint strike fighter because of the large portion of our fleet that's going to make up because you talk a little bit about some some of the other options in terms of how we get to the force structure that we're looking for at the various points five ten fifteen twenty years out and in particular what role the aircraft the f eighteen the f fifteen and the f sixteen s plan that and how how the slippage to the right of the j s f can affect that and how also determinations on things like what is the realistic life cycle for existing f if teens are not sixteen's are there ways to retrofit them to give them a longer life what sort of are you playing around with those other pieces as well and how do they fit in our long term short term and long term for structure demands and dr carter let you go ahead and start us off on that thank you mr chairman i'll do that and then probably ask miss fox if i if i may and then the witnesses in the principal effort is to restore affordability and schedule to the joint strike fighter that's been the burden of what we've been trying to do over the last few months because of the key role it plays in recapitalizing the tac air fleet going forward and it's not just a matter of numbers i guess is the second comment i'd make mr chairman it's the capabilities of the aircraft the aircraft it's replacing are good aircraft also but the joint strike fighter has capabilities that the legacy aircraft don't know obviously we want to have those cape those capabilities as as soon as possible with respect to  five minutes and then mr lowe beyond after him thank the chairman for his line of questioning that i stumbled in on i do think it's important for us to hear you know with the recent changes that you've made on the ramp and  flattening out the f thirty five how that also changes other things obviously force structure decisions were made with the different contemplated availability of the f thirty five in mind  constraints sector carter you mentioned just a minute ago you know which displaces other things you know the dollars involved in this displacing other things we can spend our money on but we get a new secretary that a decision is made comes as a surprise to us given what we've heard from the pentagon for years concerning the value of the competitive engine decisions made to cancel it we fund it that year and request that k do a study does a study comes back to look at the study we concluded what we should continue funding this thing we just respectfully disagree after flunking a bunch more money into it just sort of looking at the numbers looked us like both then year and current year  dollars were either even or positive for the alternate engine and then comes a veto threat over this which just stunned all of us frankly it was pretty harsh rhetoric over something that we thought was pretty close call and it sort of because we've been funding it repeatedly things that you mention that make you uncomfortable with the projection that currently is available and it looks like it's a wash present dollars i don't know what the venue or dollars look like maybe it's positive then your dollars we were only given present dollars  and so the decision seems to rest on whether or not you buy all these attendant benefits and whether will it will actually realize those attendant benefits that's one thing then the second thing is are we willing to spend the money are we willing to say gosh we'll find money someplace else or we'll just run a little red ink in order to avoid as you put it displacing other things that are priorities as it puts us in a real awkward position it seems to me that we're sort of where we've been for the last four or five years nothing's really changed and consistently we've made this judgment that the alternate engine should be funded now understood from the discussion earlier that the slippage in both programs have been about the same person that means we're spending more money than we anticipated spending the development of the one thirty five as well both of those programs and i'm just still it up a loss to figure out why i mean i can understand that there's you know judgment back and forth called for but i'm in a loss to figure out why the department would be threatening a veto over this is that currently the department attitude about it it is and i think there are there are two things that make what is the the analytical wash which is you described and i think ms fox has described are two other ingredients to the story that i think lie behind the department's judgment that it's not advisable to proceed with a second agent to other ingredients are both of which you mentioned one is attendant benefit are there attendant non economic nonfinancial if i could interrupt you mr sullivan addressing the competition question will we receive payback that's valuable from competition you're skeptical considering whether or not that  starkly that paybacks in the range of ten or twelve percent which is what mr sullivan identified in his opinion as being necessary in order to breakeven dollars wise that that historically has occurred you don't think so here that that's the other thing our judgment is that the assumptions that show that payback historical analytical are very optimistic and therefore if one accepts that though you have a to compare very real very certain upfront costs to hypothesized savings and i we have not been able to substantiate economic payback or include improved security etc i mean there are all kinds of projections that you make i don't see why these are really that different making an upfront investment to realize savings for the taxpayer in the long run is a very prudent thing making it all the time investing real upfront money against a to us not analytically well grounded expectation of future savings that's where we have trouble making that particular this investment so it's the failure by k to properly analyze this to come up with the right balance you know i think they've done the best analysis that can be done which is kind of that presumes a competition in the out years a certain competitive dynamic that just doesn't look like is realistically based there some of the customers will not in fact  whatever engine is produced more cheaply in that particular year they want one engine or the other engine so when one hypothesizes a free and open competition we're concerned that it would actually be a original study wouldn't have been able to think through exactly those risks what has changed that all of sudden somebody concludes we didn't think their thoughts concerning the value of competition are faulty i kind of don't know where to begin to start i don't know how other members feel there aren't that many here but i can't believe what i'm hearing i mean there have been slippage is there been cost overruns there been all kinds of problems and what we're being told is just spend a little more money take a little more time don't worry about it everything is ok i've been really on this wider gap issue for some time now and no one can explain how we're going to make this up you all have dug your heels in on this if thirty five and i think this is going to come back in years to come and haunt us as a monumental mistake to look at what we're doing to our legacy fighters in the fight or gap issue the bathtub issue there's no way anyone's been able to explain for years how you're going to make up this gap when these f sixte fifteen s are no longer able to fly and the f thirty five still have problems because someone hasn't figured it out you're going to have air guard units that are not going to have planes and as someone pointed out earlier all we're doing when we say what we need in terms of numbers is shrinking them down when someone points out that we've got a problem chairman i don't know how we get our arms around this mr taylor you talked about it earlier we've got serious serious fiscal problems that are facing this country and we're billions and billions of dollars down the wrong track because somebody made a decision that the f thirty five was where we're going to put all our eggs into that basket and i'm really angry about this hearing after hearing it's the same thing more time slippage more money more problems just have a little more patience congress we know more than you working with the vendors working with the contractors don't worry we're buying these things we're doing it i'll tell you i hope somebody wakes up on this i really do i apologize because i had not intended to go this route but i'm listening to this and there's only so much we can take somebody has got to wake up and start giving us some answers if you're able to give us some answers on what you're to make up the bathtub issues and how substantive we're going to solve that problem i would be quiet be calm but i feel like a second grader being patted on the head saying don't worry about it everything's going to be ok just go back into the classroom and fold your hands and sensing perhaps some frustration on our committee and to try to put to give an overarching kind of sense of what's going on is we feel like we're being given the mushroom treatment over here we were not included there's not transparency there's not visibility as to what the decisions are we talk about q t r this morning and as i said earlier we live in the political world we play with budgets and we make decisions about how much the department of defense gets in their spending and if you're not getting enough money we need to know about it before going to give you this much money you say ok with this much money here's what we can do to give you the least amount of risk then you go tell us yeah but we've left these gaps and here that are a problem and it's our job to go back and get more money for d o d but we can't do that if we don't know what's going on and the transparency has been nonexistence like as transparent as a concrete wall now here's one that i i've asked this question about two and a half years in a row now i just keep trying because i think maybe somebody can answer it's not on j s f but it's it's related tightly first of all what's the status be we are going to meet the may first deadline if we possibly can the only reason i had as we possibly can sir is that that's not entirely when under our control it's a matter of the interaction with the contractor it's an important discussion that we're having  we had some indication from the contractor of a willingness to make an offer that we would be interested in and we're trying to wrap that up just as soon as we can because we  is that we were seen in the jet estimate a picture of the joint strike fighter program so different from the one that had been portrayed by the joint program off contractor and that is the reason why that the secretary took the action he did so i can very much relate to your anger about it and certainly had sir was that it wasn't just in one issue it wasn't just joint strike fighter it's been across the board in a whole series of different areas so it's not like it's that one program we know that there are certain problems a certain programs understand that but this is been a broader sense the quadrennial defense review is not just specifically that one plane it's a whole series and how do you come to the decision of how many ships how many this how you balancing that and that process is what i'm talking about is being opaque it's not just this one program which also is that way so you're saying you're going to try to meet that deadline the best depending on the goshi sions with the contractor now here's absolutely next question there is a memo we got from the navy says this shortfall it's actually one seventy seven but but off of aircraft carriers is one of the options to buy some more of them may seems like you've got three options one you take old ones fix them up to you just get by with what you've got don't have as many airplanes on an aircraft carrier or three you buy some new ones that seems to me to be common sense now i asked that specific question i asked three times and never got an answer are all options on the table does that mean buying more f a teens is an option or is it not an option we are buying more f a time being beyond what's currently on record the program record because the program a record the shortfall is after we buy the ones on record it's still a shortfall crap i want to be very clear and then of course mr stack lee will be addressing this also the options that we're looking at now and that we would then fund in f way to twelve and beyond are ones designed to prolong the life of the existing fleet of f a teens until they can be replaced by joint strike fighters using you're talking about rebuilding old planes it's extending the life the operational life of the f a teens but you're not considering buying some new ones instead of that you know the options that are being considered that i think we're in for specifically referenced in the quote dance ok well i'm about out of time so i guess my concern is we've taken a look at the cost for flight our doing that and boy is at an expensive alternative and i guess the question i have is why wouldn't you consider the alternative of buying a new one if it comes out to be a whole lot financially more desirable but i've never had anybody say what we consider that i made it's obviously logically something you could consider either fix up the old one you go without or you buy a new and but why not consider buy the new and because the fix up the old one is half the cost  the new one and you get whatever it is six thousand more hours on the sucker so i don't understand that here's one last question if you indulge me just a minute mr chairman in the previous testimony the committee has been told that the a f eighteen manufacturer submitted a proposal offering a ten percent cost savings for a multi year procurement in fact that's what secretary gates said he had to have ten percent or he would be happy i guess i'd take any amount of money we could get if we get to improve but anyway in your recent testimony to this ask you indicated that a ten percent savings was simply not enough to meet a threshold of interest but the savings in the teens would actually be required for a multi it appears to me that you're either trying to posture yourself to negotiate more savings from the manufacturer or you're arbitrarily setting requirements on the fly what is the basis for now requiring a savings that exceeds ten percent i'd like to believe that this figure was an arbitrarily chosen so i'd like to see your analysis that supports this new figure and would allow you to justify walking away from nearly half a billion dollars of savings i understand this is one that was kind of carefully written to understand what we're saying i do and i couldn't respond very directly to it the secretary indicated that ten percent was the threshold of a interest i think that was the phrase i use obviously we would like to get as much savings as we possibly can that's something that is a matter of discussion and negotiation with the contractor and also as we do our own independent assessment of what we should pay for the aircraft so we're trying to get the best deal for the taxpayer and the warfighter the best deal and now when you're doing that negotiation why wouldn't you in that negotiation say hey if we throw some more planes in instead of fixing up the old ones what kind of deal you give us why wouldn't you throw that part of the table to where at the moment we are discussing with them very specifically plan to buy  both e f models and growlers and trying to leverage the opportunity of placing a larger order to see if it's possible that we can get a multi year savings that would warrant taking the action of a multi year and obviously i'd like to get the best deal that we possibly can in that regard but i understand you're trying to get the best deal but currently you have a program of record you're going to buy some planes the contractor came and said hey we can do ten percent to help you in this if you do a multi year if you're really trying to get the best buy and you have the shortfall and you've got a tremendously high cost to rebuild some planes why wouldn't you at least consider tossing out how about we increase the number of planes we're going to buy what will you give us as a price meet with the secretary has said i like the eighty percent solutions instead of the real price the big ticket thing why don't we use a little of that reasoning to say if you get a plane it whatever it is fifty million dollars versus another one that's going to be what you think one hundred twenty when you get done with thirty five and you don't have that thirty five anyway at the time and you do need some of them maybe you say we can't afford to fill this gap because we don't have enough money i could understand that is the answer but i keep feeling like you're not being rational about the way you're approaching it that's my sense of frustration the analysis certainly compares life extension to recapitalization you're right that's that's logical i think that has taken us to looking at different variants of life extension and i don't  that's an issue that's analysis that is very straightforward to do and i think we can share entirely with the basis of that is as we go forward and i think we'll get an advantage and work on that thank you big i just get one more question this panel and see if anyone else has anything move on to the next one one thing on the alternate engine that we have not talked about as a may two thousand and eight defense contract management agency fighter engine industrial capability assessment that basically recommended the f one thirty six sort of mr marshall's another side of that argument if you will we have asked for different opinions about different studies and it seems that the department is not commenting on that one are you aware of it and if so how do you get i'll need to get back to you on this is a d c m a analysis i will get back to you on that ok i will be sure to provide that for you and would very much like your feedback on that particular study production is different from other engine production i would like to have i think the department wants to have more than one participant in the military  engine business we have strong contenders now we have ongoing procurements we have technology based programs are in deep programs that are intended to example an industrial base without the competitive engine and then if you could go back and specifically determine whether or not when it originally considered all of this took into account and trying to make their fifty fifty judgement which is the same thing that does now took into account the very things that you're now suggesting against continuing with the alternate engine that would be very helpful to that the in the estimate that we did in two thousand and seven in the update we did make several optimistic assumptions and dr carter's referring to them is accurate we do delineate them in the report and are clear about them in the in the current and it does bring us to tried to make if i may if i may toss out the point optimistic assumption is a matter of opinion at a certain point i'm sure when they put together the paper they didn't say and these assumptions are optimistic i'm sure when they put it together when they did the study and all the studies mr marshall cons do they did them based on what they thought was going to happen i mean your assessment now that it's not a good idea it's a pessimistic assumption if you want to put it that way i mean those really are just sort of semantic words what would be helpful when we're talking about for instance the discussion about you know it's an optimistic assumption these cost savings are going to come forward and we put forward and say well historically if you have the sort of competition a ten to twelve percent savings  is reasonable that's that's not just sort of pulling it out of the air that's going back and looking and seeing historically what have we learned i mean those are the assumptions you make and we i think would be obvious to anybody working in the joint strike fighter that assumptions are far far from guaranteed we understand that but to call them optimistic it really doesn't help us much unless you can say well gosh you know they say that historically you save ten to twelve percent well look we looked at ten programs certainly that group could have been aware of the issues that are now being specifically discussed you made your best judgment frank honest not optimistic not pessimistic judgment and gave it to  us and based on that we decided to proceed so that's what we're struggling with right now the suggestion that somehow that group did not accurately well two things one either that group somehow was faulty and it made overly optimistic assumptions they'd probably say no we don't think we did we were we we thought we were right on the mark or things have changed that's so that's what we're really struggling with there if i if i could i think i think we've beaten the horse efficiently at this point so i think i would like to move on to the next panel unless there is something new and different that members want to raise that we have not yet raised with this panel ok and we will obviously from this and i've been taking notes about some of the questions that we've had and get specific answers to them and we know i mean it's a very difficult program and it's very expensive big burden for all of us communication between your office and congress would be important and i would concur with with mr aiken and some others who have said that communication has been not what it could be to this point you know we all have to make tough decisions you know we just want to make sure that we're informed as much as possible so that we can hopefully come up with a plan that we can all agree on so hopefully we'll do a better job of that in the future i thank you for your testimony we will move on to the second  panel and i'll give you a moment to switch out we have introduced this panel previously but i'll fire through it again quickly here just so that we know who we're dealing with and the way i read these awful also be the order in which you will be asked to testify we have the honorable sean stokley assistant secretary of the navy of the navy for research develop an acquisition lieutenant general george troutman deputy commandant of the marine corps for aviation rear admiral dick filmon director of the air warfare division for the u s navy mr david who is the acting assistant secretary of the air force for acquisition and lieutenant general philip breedlove who is the deputy chief of staff for operations plans and requirements u s air force a lot has been said about this already as you gentlem no doubt heard and i would ask that we have your statements if we will by unanimous consent submit them all for the record we will have more votes coming up shortly and i would hope that we can get done with this hearing before we do that so it's a very long complicated way of saying try to be as brief as you can and with that we will go with mr stack lee to get us started here yes sir chairman smith chairman taylor representatives of bartlett and aiken and distinguished members three aviation programs represent the department's greatest warfare investment and this year program continues recent trends which reflect an increase in our aviation pretty common in formulating our investment strategy where mindful of balance y ten to thirteen while completing development and ramping up argument on the f thirty five joint strike fighter our commitment to the j s f program is unequivocal now within the framework of the restructured program it's essential that we deliver of the cost and schedule performance that matched our commitment to the program department's long recognize our ability to afford li meet our requirements relies upon our ability to manage a service life for aviation fleet as example the p three sustainment with congress h p with able to ensure that that aging aircraft is able to meet our operational requirements while we await the arrival of the more capable p eight aircraft and equally similarly the department is aggressively managing service life of the legacy f and eighteen a through d aircraft until its replacement by joint strike fighter into this and we are initiating further steps to mitigate the impacts of delays associated with the restructured j s f program again we thank the subcommittees for this opportunity to discuss navy marine corps aviation programs and look forward to your questions sorry thank you general trout thank you for the opportunity to address the committee regarding the forces current and future aviation requirements and capabilities with an acquisition we are focused on are war fighting customers represented by general breedlove focused on what we well on modernizing our aging force we have a robust acquisition improvement program with the affordability of what we buy and a cycle time reduction effort of how long it takes to deliver to our warfighting joined mr marks thank you starting off talking about the bomber program as you know we canceled the next generation bomber program not long ago and now we have we started the process of figuring out what are the next generation long range strike platforms going to look like two things about that one can you walk us through sort of what the plans are and then explain how it's going to be different this time it is  happy that program we began immediately looking at what that would mean for our requirements and the secretary commission another group to study what those requirements would be in that group is working vigorously across the department with the help of the united states air force far as our contribution so that and what this program would look like some things do not change much in the aggregate and that is the overall range  payload and stealth capability of the aircraft some of that will remain fairly constant but but the program is being given a hard look we are looking at it as you and i talked about before as a family of systems where the one platform for the bomber would only be one of the contributions to that family of systems it would be supported probably by penetrating i os are an electronic attack capability a standoff cruise missile capability prompt global strike capability and those are across two different services would be a joint family of systems that would bring a capability to our department and to our nation to take care of whichever target set the original bomber was looked at more in the vein of being a single penetrating capability we see that is a capability that one might need in certain less dense targets in more dense targets it may take the entire family of systems in order to accomplish the mission that we would need and that i think will be the change in the look from the first time we are concentrating soley on one pin trading platform and now  how we get to this capability across both naval and air force thank you and then the force structure crush and question that i was asked the previous panel as i understand it that was adjusted i think this year from twenty two hundred down to two thousand couple questions around that one why the downward adjustment what is the threat that we're attempting to counter with that four structure how did it change that allowed us to have two hundred  fewer aircraft and then talk to us a little bit about the fifteenth and the f sixteen what their service life is going to be and what the variables are there how confident are you that they will get to their service life and if you aren't confident what are our plans to  hundred thirty six of those that we will elect to retire the investment in those aircraft is too high in order to buy them the remaining about fifty percent of that we're looking at cost of about five hundred thousand and repairs for the block forty's in the block fifty's are newer those are the ones that will be looked the hardest in this program which we initiated in this budget and we'll finish in the next budget to do the detailed t esting and we'll know more about those aircraft when that is complete but what we already do know is that we need to invest in avionics and we're closing out this year common configuration cockpit  capability which brings all of the black forty's and fifty's up to one standard a standard that will carry them well into twenty twenty or possibly beyond and we are investing in that in that program is ongoing now in fact down to a couple of categories one is managing the fleet of aircraft and then the other is extending the service life for the legacy aircraft in terms of managing the fleet we look at several things that we have ongoing one is we currently have in place what we refer to as tac air integration navy marine corps between respective services squadrons both deployed on carriers and expedition so there's attack here integration piece that's in place today that provides a baseline for what our requirements are and then between the marine corps what's referred to as bed down plan for  legacy aircraft a and c type aircraft so they can then go back into a deep hole pipeline for service life extension purposes so it's a fleet management piece and then on the service life extension piece we have a series of ongoing efforts for the f eighteen that take it from what was a originally six thousand our aircraft we have been able to extend its service life out to eight thousand hours through a number of sustainment efforts which depending on which what version aircraft you are that would define what your stayman effort is this would include things like essential barrel replacements which you may be familiar with it's a significant upgrade to the early version f eighteen they will get it out to the eight thousand hour time frame but as well to go from eight thousand hours up to eighty six hundred hours there's a series of inspections that are required where we know what the aircraft hotspots are that are of interest and so an inspection regimen has been established to and give us confidence in taking the aircraft eight thousand out to eighty six hundred hours so an earlier discussion regarding what the tac air shortfall is for the department of the navy the baseline hours that go with the most recent number that was described one hundred seventy seven is that would be able to get the legacy f eighteen aircraft out to eighty six hundred hours of service life the balance to get to go drive down below one hundred seventy seven aircraft that's where we need to go the next step in terms of service life extension is to get out to ten thousand hours we have not started the aircraft had not got to that point in their age and we have not started that slap program that would be eight twenty twelve it's a palm twelve issue for us a and twelve issue in terms of starting to procure kits for inducting the aircraft into that service life extension program and this this slip program basically buys an additional four to five years of service life on the legacy f eighteen aircraft what we've got to carefully determine is the extent of the the slab that effort is going on today to define the piece parts of the slab sorry i need to interrupt for just one quick minute votes are what it would contain today that's everything from the technical details starting to develop what i would call production type of packages and and the cost estimates then it's a matter of managing the throughput through the slab and it's a signal a matter of managing the throughputs through the slab so that we're not impacting the operational in service aircraft by pulling too many aircraft out and maintaining inefficient throughput at the depot and then there's a timing issue when we talk about the strike fighter  shortfall it's really a period of time from start to finish the numbers that you're quoted are the peak about a twenty seventeen timeframe so what we would be doing is attacking that peak through the slap program if the f thirty five like so many other programs takes longer than any of this was do you have a backup plan to continue by an f eighteen s the we talked about the one hundred twenty four aircraft that are in the program of record that  that multi year would be in f y ten through thirteen multi year so those production lines would remain hot the front end of the production line would remain hot till about the thirteen fourteen timeframe ok and l on to what extent as you know mr bartlett and i are both adamant that a foundation pays for some research by nation pays to develop something we ought to own those plans whether in case we ever need to bow parts of that engine the supplier of that engine or whatever burns down is destroyed by act of god active man to what extent are you insisting on as you have done on the o c s program that we on the technical data packets to the engine to the f thirty five s are the same question i did as dr carson had an opportunity to discuss a little bit with him during the break there's two pieces to the technical data package there's there's the i'll call it the paper or the electrons that come with form fitting function dimensions characteristics of the engine that's all those are all deliverables associate with the engine development the part that i would say is proprietary and we do owe you for building that engine so while we would own a technical data package that would suggest a bill to print the processes that go with that would you will own the specs of what that of what each for the engine looks  a build to print drawing but the processing and the process the manufacturing processes and tooling that go with that but different manufacturers use different processes and tooling ag my question is is what we o adequate to get competitive bidding i can't give you a confident answer today so i need to come back to you for we'd appreciate that very much do you know how much it will cost to to do the service life extension on so the first part of service life extension i'm going to hit you with is the center bar replacement that is laid into the budget there's a north of a billion dollars for four hundred twenty one aircraft that were already in process with the second part is planning for the more expensive slip program which takes the aircraft or maybe six hundred ten thousand hours we are in that planning phase that's a palm twelve issue for the department of the navy and in palm twelve we will take a look at not just the numbers of the aircraft that we're going to drive through the slab but the extent of the slab or the different versions of the aircraft that gets you the airframe as well you want capability so we also need to take a look at the any upgrades that would be associated with an additional five years of service life for the f eighteen s thank you what kind of confidence you have that you'll be able to achieve adequate service life extension or is this the only option left to you now that the twenty two has been canceled in the thirty five years late so i'm going to tell you that we have significant confidence now the there's a lot of say a business case that emerges as you go deeper and deeper into a slip around in other words as the aircraft get older the sustainment cost increases and when we look at the fleet of aircraft that are under consideration for slap to attend to do them all would not be a good that's not an alternative that we would look at so we have taken the eighty aircraft and we have shrunk in the potential air potential aircraft down to the one fifty to two eighty range that we would drive through a slab and that's that's the range that we'll be looking at in palm twelve  one more quick question to which i just made a yes or no answer looking at the deep strike heavy bomber i note that the chinese are able to take out of satellite i know that we are able to take out a missile with a missile this new airplane will fly lower than the satellite and slower than the missile it may be stealthy sir but it still has a cross sectional area i'm not sure that in this new world that we're entering that the juice is worth the squeeze and in produce and a new deep strike heavy bomber i think that things may have changed can you include us in your decision process as to how we decide what we're going to do in that area that's the only question i have if the answer is yes please  i guess we've got to maybe beat this dead horse still haven't gotten really an answer i had a chance to see those f eighteen s being taken apart with the cracks in the wings and cracks and other parts and it's looks like a pretty tedious process the numbers saying it's pretty expensive process and just seems to me like common sense that you've got to compare one thing with the other and and trying to pay a tremendous about of money to get it you know less than ten percent more hours on the airframe when you can get a whole new era for a minute i guess my question is are you willing to to do the cost analysis at least to compare those two alternatives right now everything i've heard you say is well we're going to take a good look at taking the old ones and fixing them up and compare it to what welcome to when i go say it or we're going to compare it to something is a couple comparison that is not do it at all or is it a comparison to buying a new one i've never heard anybody say that yet let me first describe that slept program under all circumstances we've got to get the program running and and producing we cannot when you take a look at a shortfall number of one hundred seventy seven aircraft and twenty seven thousand timeframe you cannot buy a new out of that shortfall and the economics of slap versus buying a new we look at it and we are doing the business case analysis we look at what it will cost to slap and then there's a range of answers they are depending on the material condition of the aircraft so we have a we have a bottom bottom number and we have an upper number and we believe the answer is in between and will vary by aircraft and when you take that and you compared to what it would cost to buy a new there's a there's a factor there so you will consider what it cost to buy new them when you do that analysis factor that comes into play is what are we trying to what are we trying to resolve into our terms of the shortfall and it's a shortfall that extends from the peak at twenty seventeen and it goes down towards you're in the twenty twenty three timeframe so we the sled program overlays that well when we buy new we are getting more hours and we're getting those additional service hours in a period of time beyond when we have the shortfall that's not a bad thing but those extra dollars repave those extra hours are coming away from potentially for example a j s f program which gives us that capability in that timeframe that we believe got to compare something to something and it seems to me to compare especially if you were to go shooting a multi year if i were a camel trader i'd say well ok you give me this what happens if we throw a couple more aircraft in you know for the goshi ation just toss that out for your consideration thank you mr chairman thank you very much we are out of time regrettably i know members have had more questions there are some questions that we have prepared we will submit to you and for the record reflect that would appreciate any answers please you can get them to us and obviously we have a deep interest in the subject matter and we'll continue to work with all of you on resolving the issues that were raised thank you i appreciate your testimony the questions of the members and we are a