prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: This report presents background information and issues for Congress concerning the Navy's force structure and shipbuilding plans  The current and planned size and composition of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy's shipbuilding plans have been oversight matters for the congressional defense committees for many years  The Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships, including one Gerald R  Ford (CVN-78) class aircraft carrier, three Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one FFG(X) frigate, two John Lewis (TAO-205) class oilers, and two TATS towing, salvage, and rescue ships  The issue for Congress is whether to approve, reject, or modify the Navy's proposed FY2020 shipbuilding program and the Navy's longer-term shipbuilding plans  Decisions that Congress makes on this issue can substantially affect Navy capabilities and funding requirements, and the U S  shipbuilding industrial base  Detailed coverage of certain individual Navy shipbuilding programs can be found in the following CRS reports: CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke  CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke  CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke  (This report also covers the issue of the Administration's FY2020 budget proposal, which the Administration withdrew on April 30, to not fund a mid-life refueling overhaul [called a refueling complex overhaul, or RCOH] for the aircraft carrier Harry S  Truman [CVN-75], and to retire CVN-75 around FY2024 ) CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke  CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke  CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke  CRS Report R43543, Navy LPD-17 Flight II Amphibious Ship Program: Background and Issues for Congress , by Ronald O'Rourke  (This report also covers the issue of funding for the procurement of an amphibious assault ship called LHA-9 ) CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke  For a discussion of the strategic and budgetary context in which U S  Navy force structure and shipbuilding plans may be considered, see Appendix A   On December 15, 2016, the Navy released a force-structure goal that calls for achieving and maintaining a fleet of 355 ships of certain types and numbers  The 355-ship force-level goal replaced a 308-ship force-level goal that the Navy released in March 2015  The 355-ship force-level goal is the largest force-level goal that the Navy has released since a 375-ship force-level goal that was in place in 2002-2004  In the years between that 375-ship goal and the 355-ship goal, Navy force-level goals were generally in the low 300s (see Appendix B )  The force level of 355 ships is a goal to be attained in the future; the actual size of the Navy in recent years has generally been between 270 and 290 ships  Table 1 shows the composition of the 355-ship force-level objective  The 355-ship force-level goal is the result of a Force Structure Assessment (FSA) conducted by the Navy in 2016  An FSA is an analysis in which the Navy solicits inputs from U S  regional combatant commanders (CCDRs) regarding the types and amounts of Navy capabilities that CCDRs deem necessary for implementing the Navy's portion of the national military strategy and then translates those CCDR inputs into required numbers of ships, using current and projected Navy ship types  The analysis takes into account Navy capabilities for both warfighting and day-to-day forward-deployed presence  Although the result of the FSA is often reduced for convenience to single number (e g , 355 ships), FSAs take into account a number of factors, including types and capabilities of Navy ships, aircraft, unmanned vehicles, and weapons, as well as ship homeporting arrangements and operational cycles  The Navy conducts a new FSA or an update to the existing FSA every few years, as circumstances require, to determine its force-structure goal  Section 1025 of the FY2018 National Defense Authorization Act, or NDAA ( H R  2810 / P L  115-91 of December 12, 2017), states the following: SEC  1025  Policy of the United States on minimum number of battle force ships  (a) Policy —It shall be the policy of the United States to have available, as soon as practicable, not fewer than 355 battle force ships, comprised of the optimal mix of platforms, with funding subject to the availability of appropriations or other funds  (b) Battle force ships defined —In this section, the term "battle force ship" has the meaning given the term in Secretary of the Navy Instruction 5030 8C  The term battle force ships in the above provision refers to the ships that count toward the quoted size of the Navy in public policy discussions about the Navy  The Navy states that a new FSA is now underway as the successor to the 2016 FSA, and that this new FSA is to be completed by the end of 2019  The new FSA, Navy officials state, will take into account the Trump Administration's December 2017 National Security Strategy document and its January 2018 National Defense Strategy document, both of which put an emphasis on renewed great power competition with China and Russia, as well as updated information on Chinese and Russian naval and other military capabilities and recent developments in new technologies, including those related to unmanned vehicles (UVs)  Navy officials have suggested in their public remarks that this new FSA could change the 355-ship figure, the planned mix of ships, or both  Some observers, viewing statements by Navy officials, believe the new FSA in particular might shift the Navy's surface force to a more distributed architecture that includes a reduced proportion of large surface combatants (i e , cruisers and destroyers), an increased proportion of small surface combatants (i e , frigates and LCSs), and a newly created third tier of unmanned surface vehicles (USVs)  Some observers believe the new FSA might also change the Navy's undersea force to a more distributed architecture that includes, in addition to attack submarines (SSNs) and bottom-based sensors, a new element of extremely large unmanned underwater vehicles (XLUUVs), which might be thought of as unmanned submarines  In presenting its proposed FY2020 budget, the Navy highlighted its plans for developing and procuring USVs and UUVs in coming years  Shifting to a more distributed force architecture, Navy officials have suggested, could be appropriate for implementing the Navy's new overarching operational concept, called Distributed Maritime Operations (DMO)  Observers view DMO as a response to both China's improving maritime anti-access/area denial capabilities (which include advanced weapons for attacking Navy surface ships) and opportunities created by new technologies, including technologies for UVs and for networking Navy ships, aircraft, unmanned vehicles, and sensors into distributed battle networks  Figure 1 shows a Navy briefing slide depicting the Navy's potential new surface force architecture, with each sphere representing a manned ship or a USV  Consistent with Figure 1 , the Navy's 355-ship goal, reflecting the current force architecture, calls for a Navy with twice as many large surface combatants as small surface combatants  Figure 1 suggests that the potential new surface force architecture could lead to the obverse—a planned force mix that calls for twice as many small surface combatants than large surface combatants—along with a new third tier of numerous USVs  Observers believe the new FSA might additionally change the top-level metric used to express the Navy's force-level goal or the method used to count the size of the Navy, or both, to include large USVs and large UUVs  Table 2 shows the Navy's FY2020 five-year (FY2020-FY2024) shipbuilding plan  The table also shows, for reference purposes, the ships funded for procurement in FY2019  The figures in the table reflect a Navy decision to show the aircraft carrier CVN-81 as a ship to be procured in FY2020 rather than a ship that was procured in FY2019  Congress, as part of its action on the Navy's proposed FY2019 budget, authorized the procurement of CVN-81 in FY2019  As shown in Table 2 , the Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships, including one Gerald R  Ford (CVN-78) class aircraft carrier, three Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one FFG(X) frigate, two John Lewis (TAO-205) class oilers, and two TATS towing, salvage, and rescue ships  If the Navy had listed CVN-81 as a ship procured in FY2019 rather than a ship to be procured in FY2020, then the total numbers of ships in FY2019 and FY2020 would be 14 and 11, respectively  As also shown Table 2 , the Navy's FY2020 five-year (FY2020-FY2024) shipbuilding plan includes 55 new ships, or an average of 11 new ships per year  The Navy's FY2019 budget submission also included a total of 55 ships in the period FY2020-FY2024, but the mix of ships making up the total of 55 for these years has been changed under the FY2020 budget submission to include one additional attack submarine, one additional FFG(X) frigate, and two (rather than four) LPD-17 Flight II amphibious ships over the five-year period  The FY2020 submission also makes some changes within the five-year period to annual procurement quantities for DDG-51 destroyers, ESBs, and TAO-205s without changing the five-year totals for these programs  Compared to what was projected for FY2020 itself under the FY2019 budget submission, the FY2020 request accelerates from FY2023 to FY2020 the aircraft carrier CVN-81 (as a result of Congress's action to authorize the ship in FY2019), adds a third attack submarine, accelerates from FY2021 into FY2020 a third DDG-51, defers from FY2020 to FY2021 an LPD-17 Flight II amphibious ship to FY2021, defers from FY2020 to FY2023 an ESB ship, and accelerates from FY2021 to FY2020 a second TAO-205 class oiler  Table 3 shows the Navy's FY2020-FY2049 30-year shipbuilding plan  In devising a 30-year shipbuilding plan to move the Navy toward its ship force-structure goal, key assumptions and planning factors include but are not limited to ship construction times and service lives, estimated ship procurement costs, projected shipbuilding funding levels, and industrial-base considerations  As shown in Table 3 , the Navy's FY2020 30-year shipbuilding plan includes 304 new ships, or an average of about 10 per year  Table 4 shows the Navy's projection of ship force levels for FY2020-FY2049 that would result from implementing the FY2020 30-year (FY2020-FY2049) 30-year shipbuilding plan shown in Table 3   As shown in Table 4 , if the FY2020 30-year shipbuilding plan is implemented, the Navy projects that it will achieve a total of 355 ships by FY2034  This is about 20 years sooner than projected under the Navy's FY2019 30-year shipbuilding plan  This is not primarily because the FY2020 30-year plan includes more ships than did the FY2019 plan: The total of 304 ships in the FY2020 plan is only three ships higher than the total of 301 ships in the FY2019 plan  Instead, it is primarily due to a decision announced by the Navy in April 2018, after the FY2019 budget was submitted, to increase the service lives of all DDG-51 destroyers—both those existing and those to be built in the future—to 45 years  Prior to this decision, the Navy had planned to keep older DDG-51s (referred to as the Flight I/II DDG-51s) in service for 35 years and newer DDG-51s (the Flight II/III DDG-51s) for 40 years  Figure 2 shows the Navy's projections for the total number of ships in the Navy under the Navy's FY2019 and FY2020 budget submissions  As can be seen in the figure, the Navy projected under the FY2019 plan that the fleet would not reach a total of 355 ships any time during the 30-year period  The projected number of aircraft carriers in Table 4 , the projected total number of all ships in Table 4 , and the line showing the total number of ships under the Navy's FY2020 budget submission in Figure 2 all reflect the Navy's proposal, under its FY2020 budget submission, to not fund the mid-life nuclear refueling overhaul (called a refueling complex overhaul, or RCOH) of the aircraft carrier Harry S  Truman (CVN-75), and to instead retire CVN-75 around FY2024  On April 30, 2019, however, the Administration announced that it was withdrawing this proposal from the Navy's FY2020 budget submission  The Administration now supports funding the CVN-75 RCOH and keeping CVN-75 in service past FY2024  As a result of the withdrawal of its proposal regarding the CVN-75 RCOH, the projected number of aircraft carriers and consequently the projected total number of all ships are now one ship higher for the period FY2022-FY2047 than what is shown in Table 4 , and the line in Figure 2 would be adjusted upward by one ship for those years  (The figures in Table 4 are left unchanged from what is shown in the FY2020 budget submission so as to accurately reflect what is shown in that budget submission ) As shown in Table 4 , although the Navy projects that the fleet will reach a total of 355 ships in FY2034, the Navy in that year and subsequent years will not match the composition called for in the FY2016 FSA  Among other things, the Navy will have more than the required number of large surface combatants (i e , cruisers and destroyers) from FY2030 through FY2040 (a consequence of the decision to extend the service lives of DDG-51s to 45 years), fewer than the required number of aircraft carriers through the end of the 30-year period, fewer than the required number of attack submarines through FY2047, and fewer than the required number of amphibious ships through the end of the 30-year period  The Navy acknowledges that the mix of ships will not match that called for by the 2016 FSA but states that if the Navy is going to have too many ships of a certain kind, DDG-51s are not a bad type of ship to have too many of, because they are very capable multi-mission ships  One issue for Congress is whether the new FSA that the Navy is conducting will change the 355-ship force-level objective established by the 2016 FSA and, if so, in what ways  As discussed earlier, Navy officials have suggested in their public remarks that this new FSA could shift the Navy toward a more distributed force architecture, which could change the 355-ship figure, the planned mix of ships, or both  The issue for Congress is how to assess the appropriateness of the Navy's FY2020 shipbuilding plans when a key measuring stick for conducting that assessment—the Navy's force-level goal and planned force mix—might soon change  Another oversight issue for Congress concerns the prospective affordability of the Navy's 30-year shipbuilding plan  This issue has been a matter of oversight focus for several years, and particularly since the enactment in 2011 of the Budget Control Act, or BCA ( S  365 / P L  112-25 of August 2, 2011)  Observers have been particularly concerned about the plan's prospective affordability during the decade or so from the mid-2020s through the mid-2030s, when the plan calls for procuring Columbia-class ballistic missile submarines as well as replacements for large numbers of retiring attack submarines, cruisers, and destroyers  Figure 3 shows, in a graphic form, the Navy's estimate of the annual amounts of funding that would be needed to implement the Navy's FY2020 30-year shipbuilding plan  The figure shows that during the period from the mid-2020s through the mid-2030s, the Navy estimates that implementing the FY2020 30-year shipbuilding plan would require roughly $24 billion per year in shipbuilding funds  As discussed in the CRS report on the Columbia-class program, the Navy since 2013 has identified the Columbia-class program as its top program priority, meaning that it is the Navy's intention to fully fund this program, if necessary at the expense of other Navy programs, including other Navy shipbuilding programs  This led to concerns that in a situation of finite Navy shipbuilding budgets, funding requirements for the Columbia-class program could crowd out funding for procuring other types of Navy ships  These concerns in turn led to the creation by Congress of the National Sea-Based Deterrence Fund (NSBDF), a fund in the DOD budget that is intended in part to encourage policymakers to identify funding for the Columbia-class program from sources across the entire DOD budget rather than from inside the Navy's budget alone  Several years ago, when concerns arose about the potential impact of the Columbia-class program on funding available for other Navy shipbuilding programs, the Navy's shipbuilding budget was roughly $14 billion per year, and the roughly $7 billion per year that the Columbia-class program is projected to require from the mid-2020s to the mid-2030s (see Figure 3 ) represented roughly one-half of that total  With the Navy's shipbuilding budget having grown in more recent years to a total of roughly $24 billion per year, the $7 billion per year projected to be required by the Columbia-class program during those years does not loom proportionately as large as it once did in the Navy's shipbuilding budget picture  Even so, some concerns remain regarding the potential impact of the Columbia-class program on funding available for other Navy shipbuilding programs  If one or more Navy ship designs turn out to be more expensive to build than the Navy estimates, then the projected funding levels shown in Figure 3 would not be sufficient to procure all the ships shown in the 30-year shipbuilding plan  As detailed by CBO and GAO, lead ships in Navy shipbuilding programs in many cases have turned out to be more expensive to build than the Navy had estimated  Ship designs that can be viewed as posing a risk of being more expensive to build than the Navy estimates include Gerald R  Ford (CVN-78) class aircraft carriers, Columbia-class ballistic missile submarines, Virginia-class attack submarines equipped with the Virginia Payload Module (VPM), Flight III versions of the DDG-51 destroyer, FFG(X) frigates, LPD-17 Flight II amphibious ships, and John Lewis (TAO-205) class oilers, as well as other new classes of ships that the Navy wants to begin procuring years from now  The statute that requires the Navy to submit a 30-year shipbuilding plan each year (10 U S C  231) also requires CBO to submit its own independent analysis of the potential cost of the 30-year plan (10 U S C  231[d])  CBO is now preparing its estimate of the cost of the Navy's FY2020 30-year shipbuilding plan  In the meantime, Figure 4 shows, in a graphic form, CBO's estimate of the annual amounts of funding that would be needed to implement the Navy's FY2019 30-year shipbuilding plan  This figure might be compared to the Navy's estimate of its FY2020 30-year plan as shown in Figure 3 , although doing so poses some apples-vs -oranges issues, as the Navy's FY2019 and FY2020 30-year plans do not cover exactly the same 30-year periods, and for the years they do have in common, there are some differences in types and numbers of ships to be procured in certain years  CBO analyses of past Navy 30-year shipbuilding plans have generally estimated the cost of implementing those plans to be higher than what the Navy estimated  Consistent with that past pattern, as shown in Table 5 , CBO's estimate of the cost to implement the Navy's FY2019 30-year (FY2019-FY2048) shipbuilding plan is about 27% higher than the Navy's estimated cost for the FY2019 plan  ( Table 5 does not pose an apples-vs -oranges issue, because both the Navy and CBO estimates in this table are for the Navy's FY2019 30-year plan ) More specifically, as shown in the table, CBO estimated that the cost of the first 10 years of the FY2019 30-year plan would be about 2% higher than the Navy's estimate; that the cost of the middle 10 years of the plan would be about 13% higher than the Navy's estimate; and that the cost of the final 10 years of the plan would be about 27% higher than the Navy's estimate  The growing divergence between CBO's estimate and the Navy's estimate as one moves from the first 10 years of the 30-year plan to the final 10 years of the plan is due in part to a technical difference between CBO and the Navy regarding the treatment of inflation  This difference compounds over time, making it increasingly important as a factor in the difference between CBO's estimates and the Navy's estimates the further one goes into the 30-year period  In other words, other things held equal, this factor tends to push the CBO and Navy estimates further apart as one proceeds from the earlier years of the plan to the later years of the plan  The growing divergence between CBO's estimate and the Navy's estimate as one moves from the first 10 years of the 30-year plan to the final 10 years of the plan is also due to differences between CBO and the Navy about the costs of certain ship classes, particularly classes that are projected to be procured starting years from now  The designs of these future ship classes are not yet determined, creating more potential for CBO and the Navy to come to differing conclusions regarding their potential cost  For the FY2019 30-year plan, the largest source of difference between CBO and the Navy regarding the costs of individual ship classes was a new class of SSNs that the Navy wants to begin procuring in FY2034 as the successor to the Virginia-class SSN design  This new class of SSN, CBO says, accounted for 42% of the difference between the CBO and Navy estimates for the FY2019 30-year plan, in part because there were a substantial number of these SSNs in the plan, and because those ships occur in the latter years of the plan, where the effects of the technical difference between CBO and the Navy regarding the treatment of inflation show more strongly  The second-largest source of difference between CBO and the Navy regarding the costs of individual ship classes was a new class of large surface combatant (i e , cruiser or destroyer) that the Navy wants to begin procuring in the future, which accounted for 20% of the difference, for reasons that are similar to those mentioned above for the new class of SSNs  The third-largest source of difference was the new class of frigates (FFG[X]s) that the Navy wants to begin procuring in FY2020, which accounts for 9% of the difference  The remaining 29% of difference between the CBO and Navy estimates was accounted for collectively by several other shipbuilding programs, each of which individually accounts for between 1% and 4% of the difference  The Columbia-class program, which accounted for 4%, is one of the programs in this final group  Detailed coverage of legislative activity on certain Navy shipbuilding programs (including funding levels, legislative provisions, and report language) can be found in the following CRS reports: CRS Report R41129, Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress , by Ronald O'Rourke  CRS Report RL32418, Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress , by Ronald O'Rourke  CRS Report RS20643, Navy Ford (CVN-78) Class Aircraft Carrier Program: Background and Issues for Congress , by Ronald O'Rourke  (This report also covers the issue of the Administration's FY2020 budget proposal, which the Administration withdrew on April 30, to not fund a mid-life refueling overhaul [called a refueling complex overhaul, or RCOH] for the aircraft carrier Harry S  Truman [CVN-75], and to retire CVN-75 around FY2024 ) CRS Report RL32109, Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress , by Ronald O'Rourke  CRS Report R44972, Navy Frigate (FFG[X]) Program: Background and Issues for Congress , by Ronald O'Rourke  CRS Report RL33741, Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress , by Ronald O'Rourke  CRS Report R43543, Navy LPD-17 Flight II Amphibious Ship Program: Background and Issues for Congress , by Ronald O'Rourke  (This report also covers the issue of funding for the procurement of an amphibious assault ship called LHA-9 ) CRS Report R43546, Navy John Lewis (TAO-205) Class Oiler Shipbuilding Program: Background and Issues for Congress , by Ronald O'Rourke  Legislative activity on individual Navy shipbuilding programs that are not covered in detail in the above reports is covered below  The Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships: 1 Gerald R  Ford (CVN-78) class aircraft carrier; 3 Virginia-class attack submarines; 3 DDG-51 class Aegis destroyers; 1 FFG(X) frigate; 2 John Lewis (TAO-205) class oilers; and 2 TATS towing, salvage, and rescue ships  As noted earlier, the above list of 12 ships reflects a Navy decision to show the aircraft carrier CVN-81 as a ship to be procured in FY2020 rather than a ship that was procured in FY2019  Congress, as part of its action on the Navy's proposed FY2019 budget, authorized the procurement of CVN-81 in FY2019  The Navy's proposed FY2020 shipbuilding budget also requests funding for ships that have been procured in prior fiscal years, and ships that are to be procured in future fiscal years, as well as funding for activities other than the building of new Navy ships  Table 6 summarizes congressional action on the Navy's FY2020 funding request for Navy shipbuilding  The table shows the amounts requested and congressional changes to those requested amounts  A blank cell in a filled-in column showing congressional changes to requested amounts indicates no change from the requested amount  Appendix A  Strategic and Budgetary Context This appendix presents some brief comments on elements of the strategic and budgetary context in which U S  Navy force structure and shipbuilding plans may be considered  Shift in International Security Environment World events have led some observers, starting in late 2013, to conclude that the international security environment has undergone a shift over the past several years from the familiar post-Cold War era of the past 20-25 years, also sometimes known as the unipolar moment (with the United States as the unipolar power), to a new and different strategic situation that features, among other things, renewed great power competition with China and Russia, and challenges to elements of the U S -led international order that has operated since World War II  This situation is discussed further in another CRS report  World Geography and U S  Grand Strategy Discussion of the above-mentioned shift in the international security environment has led to a renewed emphasis in discussions of U S  security and foreign policy on grand strategy and geopolitics  From a U S  perspective on grand strategy and geopolitics, it can be noted that most of the world's people, resources, and economic activity are located not in the Western Hemisphere, but in the other hemisphere, particularly Eurasia  In response to this basic feature of world geography, U S  policymakers for the past several decades have chosen to pursue, as a key element of U S  national strategy, a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another, on the grounds that such a hegemon could represent a concentration of power strong enough to threaten core U S  interests by, for example, denying the United States access to some of the other hemisphere's resources and economic activity  Although U S  policymakers have not often stated this key national strategic goal explicitly in public, U S  military (and diplomatic) operations in recent decades—both wartime operations and day-to-day operations—can be viewed as having been carried out in no small part in support of this key goal  U S  Grand Strategy and U S  Naval Forces As noted above, in response to basic world geography, U S  policymakers for the past several decades have chosen to pursue, as a key element of U S  national strategy, a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another  The traditional U S  goal of preventing the emergence of a regional hegemon in one part of Eurasia or another has been a major reason why the U S  military is structured with force elements that enable it to cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival  Force elements associated with this goal include, among other things, an Air Force with significant numbers of long-range bombers, long-range surveillance aircraft, long-range airlift aircraft, and aerial refueling tankers, and a Navy with significant numbers of aircraft carriers, nuclear-powered attack submarines, large surface combatants, large amphibious ships, and underway replenishment ships  The United States is the only country in the world that has designed its military to cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival  The other countries in the Western Hemisphere do not design their forces to do this because they cannot afford to, and because the United States has been, in effect, doing it for them  Countries in the other hemisphere do not design their forces to do this for the very basic reason that they are already in the other hemisphere, and consequently instead spend their defense money on forces that are tailored largely for influencing events in their own local region  The fact that the United States has designed its military to do something that other countries do not design their forces to do—cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival—can be important to keep in mind when comparing the U S  military to the militaries of other nations  For example, in observing that the U S  Navy has 11 aircraft carriers while other countries have no more than one or two, it can be noted other countries do not need a significant number of aircraft carriers because, unlike the United States, they are not designing their forces to cross broad expanses of ocean and air space and then conduct sustained, large-scale military operations upon arrival  As another example, it is sometimes noted, in assessing the adequacy of U S  naval forces, that U S  naval forces are equal in tonnage to the next dozen or more navies combined, and that most of those next dozen or more navies are the navies of U S  allies  Those other fleets, however, are mostly of Eurasian countries, which do not design their forces to cross to the other side of the world and then conduct sustained, large-scale military operations upon arrival  The fact that the U S  Navy is much bigger than allied navies does not necessarily prove that U S  naval forces are either sufficient or excessive; it simply reflects the differing and generally more limited needs that U S  allies have for naval forces  (It might also reflect an underinvestment by some of those allies to meet even their more limited naval needs ) Countries have differing needs for naval and other military forces  The United States, as a country located in the Western Hemisphere that has adopted a goal of preventing the emergence of a regional hegemon in one part of Eurasia or another, has defined a need for naval and other military forces that is quite different from the needs of allies that are located in Eurasia  The sufficiency of U S  naval and other military forces consequently is best assessed not through comparison to the militaries of other countries, but against U S  strategic goals  More generally, from a geopolitical perspective, it can be noted that that U S  naval forces, while not inexpensive, give the United States the ability to convert the world's oceans—a global commons that covers more than two-thirds of the planet's surface—into a medium of maneuver and operations for projecting U S  power ashore and otherwise defending U S  interests around the world  The ability to use the world's oceans in this manner—and to deny other countries the use of the world's oceans for taking actions against U S  interests—constitutes an immense asymmetric advantage for the United States  This point would be less important if less of the world were covered by water, or if the oceans were carved into territorial blocks, like the land  Most of the world, however, is covered by water, and most of those waters are international waters, where naval forces can operate freely  The point, consequently, is not that U S  naval forces are intrinsically special or privileged—it is that they have a certain value simply as a consequence of the physical and legal organization of the planet  Uncertainty Regarding Future U S  Role in the World The overall U S  role in the world since the end of World War II in 1945 (i e , over the past 70 years) is generally described as one of global leadership and significant engagement in international affairs  A key aim of that role has been to promote and defend the open international order that the United States, with the support of its allies, created in the years after World War II  In addition to promoting and defending the open international order, the overall U S  role is generally described as having been one of promoting freedom, democracy, and human rights, while criticizing and resisting authoritarianism where possible, and opposing the emergence of regional hegemons in Eurasia or a spheres-of-influence world  Certain statements and actions from the Trump Administration have led to uncertainty about the Administration's intentions regarding the U S  role in the world  Based on those statements and actions, some observers have speculated that the Trump Administration may want to change the U S  role in one or more ways  A change in the overall U S  role could have profound implications for DOD strategy, budgets, plans, and programs, including the planned size and structure of the Navy  Declining U S  Technological and Qualitative Edge DOD officials have expressed concern that the technological and qualitative edge that U S  military forces have had relative to the military forces of other countries is being narrowed by improving military capabilities in other countries  China's improving military capabilities are a primary contributor to that concern  Russia's rejuvenated military capabilities are an additional contributor  DOD in recent years has taken a number of actions to arrest and reverse the decline in the U S  technological and qualitative edge  Challenge to U S  Sea Control and U S  Position in Western Pacific Observers of Chinese and U S  military forces view China's improving naval capabilities as posing a potential challenge in the Western Pacific to the U S  Navy's ability to achieve and maintain control of blue-water ocean areas in wartime—the first such challenge the U S  Navy has faced since the end of the Cold War  More broadly, these observers view China's naval capabilities as a key element of an emerging broader Chinese military challenge to the long-standing status of the United States as the leading military power in the Western Pacific  Longer Ship Deployments U S  Navy officials have testified that fully meeting requests from U S  regional combatant commanders (CCDRs) for forward-deployed U S  naval forces would require a Navy much larger than today's fleet  For example, Navy officials testified in March 2014 that a Navy of 450 ships would be required to fully meet CCDR requests for forward-deployed Navy forces  CCDR requests for forward-deployed U S  Navy forces are adjudicated by DOD through a process called the Global Force Management Allocation Plan  The process essentially makes choices about how best to apportion a finite number forward-deployed U S  Navy ships among competing CCDR requests for those ships  Even with this process, the Navy has lengthened the deployments of some ships in an attempt to meet policymaker demands for forward-deployed U S  Navy ships  Although Navy officials are aiming to limit ship deployments to seven months, Navy ships in recent years have frequently been deployed for periods of eight months or more  Limits on Defense Spending in Budget Control Act of 2011 as Amended Limits on the "base" portion of the U S  defense budget established by Budget Control Act of 2011, or BCA ( S  365 / P L  112-25 of August 2, 2011), as amended, combined with some of the considerations above, have led to discussions among observers about how to balance competing demands for finite U S  defense funds, and about whether programs for responding to China's military modernization effort can be adequately funded while also adequately funding other defense-spending priorities, such as initiatives for responding to Russia's actions in Ukraine and elsewhere in Europe and U S  operations for countering the Islamic State organization in the Middle East  Appendix B  Earlier Navy Force-Structure Goals Dating Back to 2001 The table below shows earlier Navy force-structure goals dating back to 2001  The 308-ship force-level goal of March 2015, shown in the first column of the table, is the goal that was replaced by the 355-ship force-level goal released in December 2016  Appendix C  Comparing Past Ship Force Levels to Current or Potential Future Ship Force Levels In assessing the appropriateness of the current or potential future number of ships in the Navy, observers sometimes compare that number to historical figures for total Navy fleet size  Historical figures for total fleet size, however, can be a problematic yardstick for assessing the appropriateness of the current or potential future number of ships in the Navy, particularly if the historical figures are more than a few years old, because the missions to be performed by the Navy, the mix of ships that make up the Navy, and the technologies that are available to Navy ships for performing missions all change over time; and the number of ships in the fleet in an earlier year might itself have been inappropriate (i e , not enough or more than enough) for meeting the Navy's mission requirements in that year  Regarding the first bullet point above, the Navy, for example, reached a late-Cold War peak of 568 battle force ships at the end of FY1987, and as of May 7, 2019, included a total of 289 battle force ships  The FY1987 fleet, however, was intended to meet a set of mission requirements that focused on countering Soviet naval forces at sea during a potential multitheater NATO-Warsaw Pact conflict, while the May 2019 fleet is intended to meet a considerably different set of mission requirements centered on influencing events ashore by countering both land- and sea-based military forces of China, Russia, North Korea, and Iran, as well as nonstate terrorist organizations  In addition, the Navy of FY1987 differed substantially from the May 2019 fleet in areas such as profusion of precision-guided air-delivered weapons, numbers of Tomahawk-capable ships, and the sophistication of C4ISR systems and networking capabilities  In coming years, Navy missions may shift again, and the capabilities of Navy ships will likely have changed further by that time due to developments such as more comprehensive implementation of networking technology, increased use of ship-based unmanned vehicles, and the potential fielding of new types of weapons such as lasers or electromagnetic rail guns  The 568-ship fleet of FY1987 may or may not have been capable of performing its stated missions; the 289-ship fleet of May 2019 may or may not be capable of performing its stated missions; and a fleet years from now with a certain number of ships may or may not be capable of performing its stated missions  Given changes over time in mission requirements, ship mixes, and technologies, however, these three issues are to a substantial degree independent of one another  For similar reasons, trends over time in the total number of ships in the Navy are not necessarily a reliable indicator of the direction of change in the fleet's ability to perform its stated missions  An increasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform its stated missions is increasing, because the fleet's mission requirements might be increasing more rapidly than ship numbers and average ship capability  Similarly, a decreasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform stated missions is decreasing, because the fleet's mission requirements might be declining more rapidly than numbers of ships, or because average ship capability and the percentage of time that ships are in deployed locations might be increasing quickly enough to more than offset reductions in total ship numbers  Regarding the second of the two bullet points above, it can be noted that comparisons of the size of the fleet today with the size of the fleet in earlier years rarely appear to consider whether the fleet was appropriately sized in those earlier years (and therefore potentially suitable as a yardstick of comparison), even though it is quite possible that the fleet in those earlier years might not have been appropriately sized, and even though there might have been differences of opinion among observers at that time regarding that question  Just as it might not be prudent for observers years from now to tacitly assume that the 286-ship Navy of September 2018 was appropriately sized for meeting the mission requirements of 2018, even though there were differences of opinion among observers on that question, simply because a figure of 286 ships appears in the historical records for 2016, so, too, might it not be prudent for observers today to tacitly assume that the number of ships of the Navy in an earlier year was appropriate for meeting the Navy's mission requirements that year, even though there might have been differences of opinion among observers at that time regarding that question, simply because the size of the Navy in that year appears in a table like Table H-1   Previous Navy force structure plans, such as those shown in Table B-1 , might provide some insight into the potential adequacy of a proposed new force-structure plan, but changes over time in mission requirements, technologies available to ships for performing missions, and other force-planning factors, as well as the possibility that earlier force-structure plans might not have been appropriate for meeting the mission demands of their times, suggest that some caution should be applied in using past force structure plans for this purpose, particularly if those past force structure plans are more than a few years old  The Reagan-era goal for a 600-ship Navy, for example, was designed for a Cold War set of missions focusing on countering Soviet naval forces at sea, which is not an appropriate basis for planning the Navy today, and there was considerable debate during those years as to the appropriateness of the 600-ship goal  Appendix D  Industrial Base Ability for, and Employment Impact of, Additional Shipbuilding Work This appendix presents background information on the ability of the industrial base to take on the additional shipbuilding work associated with achieving and maintaining the Navy's 355-ship force-level goal and on the employment impact of additional shipbuilding work  Industrial Base Ability The U S  shipbuilding industrial base has some unused capacity to take on increased Navy shipbuilding work, particularly for certain kinds of surface ships, and its capacity could be increased further over time to support higher Navy shipbuilding rates  Navy shipbuilding rates could not be increased steeply across the board overnight—time (and investment) would be needed to hire and train additional workers and increase production facilities at shipyards and supplier firms, particularly for supporting higher rates of submarine production  Depending on their specialties, newly hired workers could be initially less productive per unit of time worked than more experienced workers  Some parts of the shipbuilding industrial base, such as the submarine construction industrial base, could face more challenges than others in ramping up to the higher production rates required to build the various parts of the 355-ship fleet  Over a period of a few to several years, with investment and management attention, Navy shipbuilding could ramp up to higher rates for achieving a 355-ship fleet over a period of 20-30 years  An April 2017 CBO report stated that all seven shipyards [currently involved in building the Navy's major ships] would need to increase their workforces and several would need to make improvements to their infrastructure in order to build ships at a faster rate  However, certain sectors face greater obstacles in constructing ships at faster rates than others: Building more submarines to meet the goals of the 2016 force structure assessment would pose the greatest challenge to the shipbuilding industry  Increasing the number of aircraft carriers and surface combatants would pose a small to moderate challenge to builders of those vessels  Finally, building more amphibious ships and combat logistics and support ships would be the least problematic for the shipyards  The workforces across those yards would need to increase by about 40 percent over the next 5 to 10 years  Managing the growth and training of those new workforces while maintaining the current standard of quality and efficiency would represent the most significant industrywide challenge  In addition, industry and Navy sources indicate that as much as $4 billion would need to be invested in the physical infrastructure of the shipyards to achieve the higher production rates required under the [notional] 15-year and 20-year [buildup scenarios examined by CBO]  Less investment would be needed for the [notional] 25-year or 30-year [buildup scenarios examined by CBO]  A January 13, 2017, press report states the following: The Navy's production lines are hot and the work to prepare them for the possibility of building out a much larger fleet would be manageable, the service's head of acquisition said Thursday  From a logistics perspective, building the fleet from its current 274 ships to 355, as recommended in the Navy's newest force structure assessment in December, would be straightforward, Assistant Secretary of the Navy for Research, Development and Acquisition Sean Stackley told reporters at the Surface Navy Association's annual symposium  "By virtue of maintaining these hot production lines, frankly, over the last eight years, our facilities are in pretty good shape," Stackley said  "In fact, if you talked to industry, they would say we're underutilizing the facilities that we have " The areas where the Navy would likely have to adjust "tooling" to answer demand for a larger fleet would likely be in Virginia-class attack submarines and large surface combatants, the DDG-51 guided missile destroyers—two ship classes likely to surge if the Navy gets funding to build to 355 ships, he said  "Industry's going to have to go out and procure special tooling associated with going from current production rates to a higher rate, but I would say that's easily done," he said  Another key, Stackley said, is maintaining skilled workers—both the builders in the yards and the critical supply-chain vendors who provide major equipment needed for ship construction  And, he suggested, it would help to avoid budget cuts and other events that would force workforce layoffs  "We're already prepared to ramp up," he said  "In certain cases, that means not laying off the skilled workforce we want to retain " A January 17, 2017, press report states the following: Building stable designs with active production lines is central to the Navy's plan to grow to 355 ships  "if you look at the 355-ship number, and you study the ship classes (desired), the big surge is in attack submarines and large surface combatants, which today are DDG-51 (destroyers)," the Assistant Secretary of the Navy, Sean Stackley, told reporters at last week's Surface Navy Association conference  Those programs have proven themselves reliable performers both at sea and in the shipyards  From today's fleet of 274 ships, "we're on an irreversible path to 308 by 2021  Those ships are already in construction," said Stackley  "To go from there to 355, virtually all those ships are currently in production, with some exceptions: Ohio Replacement, (we) just got done the Milestone B there (to move from R&D into detailed design); and then upgrades to existing platforms  So we have hot production lines that will take us to that 355-ship Navy " A January 24, 2017, press report states the following: Navy officials say a recently determined plan to increase its fleet size by adding more new submarines, carriers and destroyers is "executable" and that early conceptual work toward this end is already underway     Although various benchmarks will need to be reached in order for this new plan to come to fruition, such as Congressional budget allocations, Navy officials do tell Scout Warrior that the service is already working—at least in concept—on plans to vastly enlarge the fleet  Findings from this study are expected to inform an upcoming 2018 Navy Shipbuilding Plan, service officials said  A January 12, 2017, press report states the following: Brian Cuccias, president of Ingalls Shipbuilding [a shipyard owned by Huntington Ingalls Industries (HII) that builds Navy destroyers and amphibious ships as well as Coast Guard cutters], said Ingalls, which is currently building 10 ships for four Navy and Coast Guard programs at its 800-acre facility in Pascagoula, Miss , could build more because it is using only 70 to 75 percent of its capacity  A March 2017 press report states the following: As the Navy calls for a larger fleet, shipbuilders are looking toward new contracts and ramping up their yards to full capacity     The Navy is confident that U S  shipbuilders will be able to meet an increased demand, said Ray Mabus, then-secretary of the Navy, during a speech at the Surface Navy Association's annual conference in Arlington, Virginia  They have the capacity to "get there because of the ships we are building today," Mabus said  "I don't think we could have seven years ago " Shipbuilders around the United States have "hot" production lines and are manufacturing vessels on multi-year or block buy contracts, he added  The yards have made investments in infrastructure and in the training of their workers  "We now have the basis     [to] get to that much larger fleet," he said     Shipbuilders have said they are prepared for more work  At Ingalls Shipbuilding—a subsidiary of Huntington Ingalls Industries—10 ships are under construction at its Pascagoula, Mississippi, yard, but it is under capacity, said Brian Cuccias, the company's president  The shipbuilder is currently constructing five guided-missile destroyers, the latest San Antonio-class amphibious transport dock ship, and two national security cutters for the Coast Guard  "Ingalls is a very successful production line right now, but it has the ability to actually produce a lot more in the future," he said during a briefing with reporters in January  The company's facility is currently operating at 75 percent capacity, he noted     Austal USA—the builder of the Independence-variant of the littoral combat ship and the expeditionary fast transport vessel—is also ready to increase its capacity should the Navy require it, said Craig Perciavalle, the company's president  The latest discussions are "certainly something that a shipbuilder wants to hear," he said  "We do have the capability of increasing throughput if the need and demand were to arise, and then we also have the ability with the present workforce and facility to meet a different mix that could arise as well " Austal could build fewer expeditionary fast transport vessels and more littoral combat ships, or vice versa, he added  "The key thing for us is to keep the manufacturing lines hot and really leverage the momentum that we've gained on both of the programs," he said  The company—which has a 164-acre yard in Mobile, Alabama—is focused on the extension of the LCS and expeditionary fast transport ship program, but Perciavalle noted that it could look into manufacturing other types of vessels  "We do have excess capacity to even build smaller vessels … if that opportunity were to arise and we're pursuing that," he said  Bryan Clark, a naval analyst at the Center for Strategic and Budgetary Assessments, a Washington, D C -based think tank, said shipbuilders are on average running between 70 and 80 percent capacity  While they may be ready to meet an increased demand for ships, it would take time to ramp up their workforces  However, the bigger challenge is the supplier industrial base, he said  "Shipyards may be able to build ships but the supplier base that builds the pumps … and the radars and the radios and all those other things, they don't necessarily have that ability to ramp up," he said  "You would need to put some money into building up their capacity " That has to happen now, he added  Rear Adm  William Gallinis, program manager for program executive office ships, said what the Navy must be "mindful of is probably our vendor base that support the shipyards " Smaller companies that supply power electronics and switchboards could be challenged, he said  "Do we need to re-sequence some of the funding to provide some of the facility improvements for some of the vendors that may be challenged? My sense is that the industrial base will size to the demand signal  We just need to be mindful of how we transition to that increased demand signal," he said  The acquisition workforce may also see an increased amount of stress, Gallinis noted  "It takes a fair amount of experience and training to get a good contracting officer to the point to be [able to] manage contracts or procure contracts " "But I don't see anything that is insurmountable," he added  At a May 24, 2017, hearing before the Seapower subcommittee of the Senate Armed Services Committee on the industrial-base aspects of the Navy's 355-ship goal, John P  Casey, executive vice president–marine systems, General Dynamics Corporation (one of the country's two principal builders of Navy ships) stated the following: It is our belief that the Nation's shipbuilding industrial base can scale-up hot production lines for existing ships and mobilize additional resources to accomplish the significant challenge of achieving the 355-ship Navy as quickly as possible     Supporting a plan to achieve a 355-ship Navy will be the most challenging for the nuclear submarine enterprise  Much of the shipyard and industrial base capacity was eliminated following the steep drop-off in submarine production that occurred with the cancellation of the Seawolf Program in 1992  The entire submarine industrial base at all levels of the supply chain will likely need to recapitalize some portion of its facilities, workforce, and supply chain just to support the current plan to build the Columbia Class SSBN program, while concurrently building Virginia Class SSNs  Additional SSN procurement will require industry to expand its plans and associated investment beyond the level today     Shipyard labor resources include the skilled trades needed to fabricate, build and outfit major modules, perform assembly, test and launch of submarines, and associated support organizations that include planning, material procurement, inspection, quality assurance, and ship certification  Since there is no commercial equivalency for Naval nuclear submarine shipbuilding, these trade resources cannot be easily acquired in large numbers from other industries  Rather, these shipyard resources must be acquired and developed over time to ensure the unique knowledge and know-how associated with nuclear submarine shipbuilding is passed on to the next generation of shipbuilders  The mechanisms of knowledge transfer require sufficient lead time to create the proficient, skilled craftsmen in each key trade including welding, electrical, machining, shipfitting, pipe welding, painting, and carpentry, which are among the largest trades that would need to grow to support increased demand  These trades will need to be hired in the numbers required to support the increased workload  Both shipyards have scalable processes in place to acquire, train, and develop the skilled workforce they need to build nuclear ships  These processes and associated training facilities need to be expanded to support the increased demand  As with the shipyards, the same limiting factors associated with facilities, workforce, and supply chain also limit the submarine unique first tier suppliers and sub-tiers in the industrial base for which there is no commercial equivalency     The supply base is the third resource that will need to be expanded to meet the increased demand over the next 20 years  During the OHIO, 688 and SEAWOLF construction programs, there were over 17,000 suppliers supporting submarine construction programs  That resource base was "rationalized" during submarine low rate production over the last 20 years  The current submarine industrial base reflects about 5,000 suppliers, of which about 3,000 are currently active (i e , orders placed within the last 5 years), 80% of which are single or sole source (based on $)  It will take roughly 20 years to build the 12 Columbia Class submarines that starts construction in FY21  The shipyards are expanding strategic sourcing of appropriate non-core products (e g , decks, tanks, etc ) in order to focus on core work at each shipyard facility (e g , module outfitting and assembly)  Strategic sourcing will move demand into the supply base where capacity may exist or where it can be developed more easily  This approach could offer the potential for cost savings by competition or shifting work to lower cost work centers throughout the country  Each shipyard has a process to assess their current supply base capacity and capability and to determine where it would be most advantageous to perform work in the supply base     Achieving the increased rate of production and reducing the cost of submarines will require the Shipbuilders to rely on the supply base for more non-core products such as structural fabrication, sheet metal, machining, electrical, and standard parts  The supply base must be made ready to execute work with submarine-specific requirements at a rate and volume that they are not currently prepared to perform  Preparing the supply base to execute increased demand requires early non-recurring funding to support cross-program construction readiness and EOQ funding to procure material in a manner that does not hold up existing ship construction schedules should problems arise in supplier qualification programs  This requires longer lead times (estimates of three years to create a new qualified, critical supplier) than the current funding profile supports     We need to rely on market principles to allow suppliers, the shipyards and GFE material providers to sort through the complicated demand equation across the multiple ship programs  Supplier development funding previously mentioned would support non-recurring efforts which are needed to place increased orders for material in multiple market spaces  Examples would include valves, build-to-print fabrication work, commodities, specialty material, engineering components, etc  We are engaging our marine industry associations to help foster innovative approaches that could reduce costs and gain efficiency for this increased volume     Supporting the 355-ship Navy will require Industry to add capability and capacity across the entire Navy Shipbuilding value chain  Industry will need to make investment decisions for additional capital spend starting now in order to meet a step change in demand that would begin in FY19 or FY20  For the submarine enterprise, the step change was already envisioned and investment plans that embraced a growth trajectory were already being formulated  Increasing demand by adding additional submarines will require scaling facility and workforce development plans to operate at a higher rate of production  The nuclear shipyards would also look to increase material procurement proportionally to the increased demand  In some cases, the shipyard facilities may be constrained with existing capacity and may look to source additional work in the supply base where capacity exists or where there are competitive business advantages to be realized  Creating additional capacity in the supply base will require non-recurring investment in supplier qualification, facilities, capital equipment and workforce training and development  Industry is more likely to increase investment in new capability and capacity if there is certainty that the Navy will proceed with a stable shipbuilding plan  Positive signals of commitment from the Government must go beyond a published 30-year Navy Shipbuilding Plan and line items in the Future Years Defense Plan (FYDP) and should include: Multi-year contracting for Block procurement which provides stability in the industrial base and encourages investment in facilities and workforce development Funding for supplier development to support training, qualification, and facilitization efforts—Electric Boat and Newport News have recommended to the Navy funding of $400M over a three-year period starting in 2018 to support supplier development for the Submarine Industrial Base as part of an Integrated Enterprise Plan Extended Enterprise initiative Acceleration of Advance Procurement and/or Economic Order Quantities (EOQ) procurement from FY19 to FY18 for Virginia Block V Government incentives for construction readiness and facilities / special tooling for shipyard and supplier facilities, which help cash flow capital investment ahead of construction contract awards Procurement of additional production back-up (PBU) material to help ensure a ready supply of material to mitigate construction schedule risk     So far, this testimony has focused on the Submarine Industrial Base, but the General Dynamics Marine Systems portfolio also includes surface ship construction  Unlike Electric Boat, Bath Iron Works and NASSCO are able to support increased demand without a significant increase in resources      Bath Iron Works is well positioned to support the Administration's announced goal of increasing the size of the Navy fleet to 355 ships  For BIW that would mean increasing the total current procurement rate of two DDG 51s per year to as many as four DDGs per year, allocated equally between BIW and HII  This is the same rate that the surface combatant industrial base sustained over the first decade of full rate production of the DDG 51 Class (1989-1999)     No significant capital investment in new facilities is required to accommodate delivering two DDGs per year  However, additional funding will be required to train future shipbuilders and maintain equipment  Current hiring and training processes support the projected need, and have proven to be successful in the recent past  BIW has invested significantly in its training programs since 2014 with the restart of the DDG 51 program and given these investments and the current market in Maine, there is little concern of meeting the increase in resources required under the projected plans  A predictable and sustainable Navy workload is essential to justify expanding hiring/training programs  BIW would need the Navy's commitment that the Navy's plan will not change before it would proceed with additional hiring and training to support increased production  BIW's supply chain is prepared to support a procurement rate increase of up to four DDG 51s per year for the DDG 51 Program  BIW has long-term purchasing agreements in place for all major equipment and material for the DDG 51 Program  These agreements provide for material lead time and pricing, and are not constrained by the number of ships ordered in a year  BIW confirmed with all of its critical suppliers that they can support this increased procurement rate     The Navy's Force Structure Assessment calls for three additional ESBs  Additionally, NASSCO has been asked by the Navy and the Congressional Budget Office (CBO) to evaluate its ability to increase the production rate of T-AOs to two ships per year  NASSCO has the capacity to build three more ESBs at a rate of one ship per year while building two T-AOs per year  The most cost effective funding profile requires funding ESB 6 in FY18 and the following ships in subsequent fiscal years to avoid increased cost resulting from a break in the production line  The most cost effective funding profile to enable a production rate of two T-AO ships per year requires funding an additional long lead time equipment set beginning in FY19 and an additional ship each year beginning in FY20  NASSCO must now reduce its employment levels due to completion of a series of commercial programs which resulted in the delivery of six ships in 2016  The proposed increase in Navy shipbuilding stabilizes NASSCO's workload and workforce to levels that were readily demonstrated over the last several years  Some moderate investment in the NASSCO shipyard will be needed to reach this level of production  The recent CBO report on the costs of building a 355-ship Navy accurately summarized NASSCO's ability to reach the above production rate stating, "building more … combat logistics and support ships would be the least problematic for the shipyards " At the same hearing, Brian Cuccias, president, Ingalls Shipbuilding, Huntington Ingalls Industries (the country's other principal builder of Navy ships) stated the following: Qualifying to be a supplier is a difficult process  Depending on the commodity, it may take up to 36 months  That is a big burden on some of these small businesses  This is why creating sufficient volume and exercising early contractual authorization and advance procurement funding is necessary to grow the supplier base, and not just for traditional long-lead time components; that effort needs to expand to critical components and commodities that today are controlling the build rate of submarines and carriers alike  Many of our suppliers are small businesses and can only make decisions to invest in people, plant and tooling when they are awarded a purchase order  We need to consider how we can make commitments to suppliers early enough to ensure material readiness and availability when construction schedules demand it  With questions about the industry's ability to support an increase in shipbuilding, both Newport News and Ingalls have undertaken an extensive inventory of our suppliers and assessed their ability to ramp up their capacity  We have engaged many of our key suppliers to assess their ability to respond to an increase in production  The fortunes of related industries also impact our suppliers, and an increase in demand from the oil and gas industry may stretch our supply base  Although some low to moderate risk remains, I am convinced that our suppliers will be able to meet the forecasted Navy demand     I strongly believe that the fastest results can come from leveraging successful platforms on current hot production lines  We commend the Navy's decision in 2014 to use the existing LPD 17 hull form for the LX(R), which will replace the LSD-class amphibious dock landing ships scheduled to retire in the coming years  However, we also recommend that the concept of commonality be taken even further to best optimize efficiency, affordability and capability  Specifically, rather than continuing with a new design for LX(R) within the "walls" of the LPD hull, we can leverage our hot production line and supply chain and offer the Navy a variant of the existing LPD design that satisfies the aggressive cost targets of the LX(R) program while delivering more capability and survivability to the fleet at a significantly faster pace than the current program  As much as 10-15 percent material savings can be realized across the LX(R) program by purchasing respective blocks of at least five ships each under a multi-year procurement (MYP) approach  In the aggregate, continuing production with LPD 30 in FY18, coupled with successive MYP contracts for the balance of ships, may yield savings greater than $1 billion across an 11-ship LX(R) program  Additionally, we can deliver five LX(R)s to the Navy and Marine Corps in the same timeframe that the current plan would deliver two, helping to reduce the shortfall in amphibious warships against the stated force requirement of 38 ships  Multi-ship procurements, whether a formal MYP or a block-buy, are a proven way to reduce the price of ships  The Navy took advantage of these tools on both Virginia-class submarines and Arleigh Burke-class destroyers  In addition to the LX(R) program mentioned above, expanding multi-ship procurements to other ship classes makes sense     The most efficient approach to lower the cost of the Ford class and meet the goal of an increased CVN fleet size is also to employ a multi-ship procurement strategy and construct these ships at three-year intervals  This approach would maximize the material procurement savings benefit through economic order quantities procurement and provide labor efficiencies to enable rapid acquisition of a 12-ship CVN fleet  This three-ship approach would save at least $1 5 billion, not including additional savings that could be achieved from government-furnished equipment  As part of its Integrated Enterprise Plan, we commend the Navy's efforts to explore the prospect of material economic order quantity purchasing across carrier and submarine programs  At the same hearing, Matthew O  Paxton, president, Shipbuilders Council of America (SCA)—a trade association representing shipbuilders, suppliers, and associated firms—stated the following: To increase the Navy's Fleet to 355 ships, a substantial and sustained investment is required in both procurement and readiness  However, let me be clear: building and sustaining the larger required Fleet is achievable and our industry stands ready to help achieve that important national security objective  To meet the demand for increased vessel construction while sustaining the vessels we currently have will require U S  shipyards to expand their work forces and improve their infrastructure in varying degrees depending on ship type and ship mix – a requirement our Nation's shipyards are eager to meet  But first, in order to build these ships in as timely and affordable manner as possible, stable and robust funding is necessary to sustain those industrial capabilities which support Navy shipbuilding and ship maintenance and modernization     Beyond providing for the building of a 355-ship Navy, there must also be provision to fund the "tail," the maintenance of the current and new ships entering the fleet  Target fleet size cannot be reached if existing ships are not maintained to their full service lives, while building those new ships  Maintenance has been deferred in the last few years because of across-the-board budget cuts     The domestic shipyard industry certainly has the capability and know-how to build and maintain a 355-ship Navy  The Maritime Administration determined in a recent study on the Economic Benefits of the U S  Shipyard Industry that there are nearly 110,000 skilled men and women in the Nation's private shipyards building, repairing and maintaining America's military and commercial fleets 1 The report found the U S  shipbuilding industry supports nearly 400,000 jobs across the country and generates $25 1 billion in income and $37 3 billion worth of goods and services each year  In fact, the MARAD report found that the shipyard industry creates direct and induced employment in every State and Congressional District and each job in the private shipbuilding and repairing industry supports another 2 6 jobs nationally  This data confirms the significant economic impact of this manufacturing sector, but also that the skilled workforce and industrial base exists domestically to build these ships  Long-term, there needs to be a workforce expansion and some shipyards will need to reconfigure or expand production lines  This can and will be done as required to meet the need if adequate, stable budgets and procurement plans are established and sustained for the long-term  Funding predictability and sustainability will allow industry to invest in facilities and more effectively grow its skilled workforce  The development of that critical workforce will take time and a concerted effort in a partnership between industry and the federal government  U S  shipyards pride themselves on implementing state of the art training and apprenticeship programs to develop skilled men and women that can cut, weld, and bend steel and aluminum and who can design, build and maintain the best Navy in the world  However, the shipbuilding industry, like so many other manufacturing sectors, faces an aging workforce  Attracting and retaining the next generation shipyard worker for an industry career is critical  Working together with the Navy, and local and state resources, our association is committed to building a robust training and development pipeline for skilled shipyard workers  In addition to repealing sequestration and stabilizing funding the continued development of a skilled workforce also needs to be included in our national maritime strategy     In conclusion, the U S  shipyard industry is certainly up to the task of building a 355-ship Navy and has the expertise, the capability, the critical capacity and the unmatched skilled workforce to build these national assets  Meeting the Navy's goal of a 355-ship fleet and securing America's naval dominance for the decades ahead will require sustained investment by Congress and Navy's partnership with a defense industrial base that can further attract and retain a highly-skilled workforce with critical skill sets  Again, I would like to thank this Subcommittee for inviting me to testify alongside such distinguished witnesses  As a representative of our nation's private shipyards, I can say, with confidence and certainty, that our domestic shipyards and skilled workers are ready, willing and able to build and maintain the Navy's 355-ship Fleet  Employment Impact Building the additional ships that would be needed to achieve and maintain the 355-ship fleet could create many additional manufacturing and other jobs at shipyards, associated supplier firms, and elsewhere in the U S  economy  A 2015 Maritime Administration (MARAD) report states, Considering the indirect and induced impacts, each direct job in the shipbuilding and repairing industry is associated with another 2 6 jobs in other parts of the US economy; each dollar of direct labor income and GDP in the shipbuilding and repairing industry is associated with another $1 74 in labor income and $2 49 in GDP, respectively, in other parts of the US economy  A March 2017 press report states, "Based on a 2015 economic impact study, the Shipbuilders Council of America [a trade association for U S  shipbuilders and associated supplier firms] believes that a 355-ship Navy could add more than 50,000 jobs nationwide " The 2015 economic impact study referred to in that quote might be the 2015 MARAD study discussed in the previous paragraph  An estimate of more than 50,000 additional jobs nationwide might be viewed as a higher-end estimate; other estimates might be lower  A June 14, 2017, press report states the following: "The shipbuilding industry will need to add between 18,000 and 25,000 jobs to build to a 350-ship Navy, according to Matthew Paxton, president of the Shipbuilders Council of America, a trade association representing the shipbuilding industrial base  Including indirect jobs like suppliers, the ramp-up may require a boost of 50,000 workers " Appendix E  A Summary of Some Acquisition Lessons Learned for Navy Shipbuilding This appendix presents a general summary of lessons learned in Navy shipbuilding, reflecting comments made repeatedly by various sources over the years  These lessons learned include the following: At the outset, get the operational requirements for the program right  Properly identify the program's operational requirements at the outset  Manage risk by not trying to do too much in terms of the program's operational requirements, and perhaps seek a so-called 70%-to-80% solution (i e , a design that is intended to provide 70%-80% of desired or ideal capabilities)  Achieve a realistic balance up front between operational requirements, risks, and estimated costs  Impose cost discipline up front  Use realistic price estimates, and consider not only development and procurement costs, but life-cycle operation and support (O&S) costs  Employ competition where possible in the awarding of design and construction contracts  Use a contract type that is appropriate for the amount of risk involved , and structure its terms to align incentives with desired outcomes  Minimize design/construction concurrency by developing the design to a high level of completion before starting construction and by resisting changes in requirements (and consequent design changes) during construction  Properly supervise construction work  Maintain an adequate number of properly trained Supervisor of Shipbuilding (SUPSHIP) personnel  Provide stability for industry , in part by using, where possible, multiyear procurement (MYP) or block buy contracting  Maintain a capable government acquisition workforce that understands what it is buying, as well as the above points  Identifying these lessons is arguably not the hard part—most if not all these points have been cited for years  The hard part, arguably, is living up to them without letting circumstances lead program-execution efforts away from these guidelines  Appendix F  Some Considerations Relating to Warranties in Shipbuilding and Other Defense Acquisition This appendix presents some considerations relating to warranties in shipbuilding and other defense acquisition  In discussions of Navy (and also Coast Guard) shipbuilding, one question that sometimes arises is whether including a warranty in a shipbuilding contract is preferable to not including one  The question can arise, for example, in connection with a GAO finding that "the Navy structures shipbuilding contracts so that it pays shipbuilders to build ships as part of the construction process and then pays the same shipbuilders a second time to repair the ship when construction defects are discovered " Including a warranty in a shipbuilding contract (or a contract for building some other kind of defense end item), while potentially valuable, might not always be preferable to not including one—it depends on the circumstances of the acquisition, and it is not necessarily a valid criticism of an acquisition program to state that it is using a contract that does not include a warranty (or a weaker form of a warranty rather than a stronger one)  Including a warranty generally shifts to the contractor the risk of having to pay for fixing problems with earlier work  Although that in itself could be deemed desirable from the government's standpoint, a contractor negotiating a contract that will have a warranty will incorporate that risk into its price, and depending on how much the contractor might charge for doing that, it is possible that the government could wind up paying more in total for acquiring the item (including fixing problems with earlier work on that item) than it would have under a contract without a warranty  When a warranty is not included in the contract and the government pays later on to fix problems with earlier work, those payments can be very visible, which can invite critical comments from observers  But that does not mean that including a warranty in the contract somehow frees the government from paying to fix problems with earlier work  In a contract that includes a warranty, the government will indeed pay something to fix problems with earlier work—but it will make the payment in the less-visible (but still very real) form of the up-front charge for including the warranty, and that charge might be more than what it would have cost the government, under a contract without a warranty, to pay later on for fixing those problems  From a cost standpoint, including a warranty in the contract might or might not be preferable, depending on the risk that there will be problems with earlier work that need fixing, the potential cost of fixing such problems, and the cost of including the warranty in the contract  The point is that the goal of avoiding highly visible payments for fixing problems with earlier work and the goal of minimizing the cost to the government of fixing problems with earlier work are separate and different goals, and that pursuing the first goal can sometimes work against achieving the second goal  The Department of Defense's guide on the use of warranties states the following: Federal Acquisition Regulation (FAR) 46 7 states that "the use of warranties is not mandatory " However, if the benefits to be derived from the warranty are commensurate with the cost of the warranty, the CO [contracting officer] should consider placing it in the contract  In determining whether a warranty is appropriate for a specific acquisition, FAR Subpart 46 703 requires the CO to consider the nature and use of the supplies and services, the cost, the administration and enforcement, trade practices, and reduced requirements  The rationale for using a warranty should be documented in the contract file     In determining the value of a warranty, a CBA [cost-benefit analysis] is used to measure the life cycle costs of the system with and without the warranty  A CBA is required to determine if the warranty will be cost beneficial  CBA is an economic analysis, which basically compares the Life Cycle Costs (LCC) of the system with and without the warranty to determine if warranty coverage will improve the LCCs  In general, five key factors will drive the results of the CBA: cost of the warranty + cost of warranty administration + compatibility with total program efforts + cost of overlap with Contractor support + intangible savings  Effective warranties integrate reliability, maintainability, supportability, availability, and life-cycle costs  Decision factors that must be evaluated include the state of the weapon system technology, the size of the warranted population, the likelihood that field performance requirements can be achieved, and the warranty period of performance  Appendix G  Some Considerations Relating to Avoiding Procurement Cost Growth vs  Minimizing Procurement Costs This appendix presents some considerations relating to avoiding procurement cost growth vs  minimizing procurement costs in shipbuilding and other defense acquisition  The affordability challenge posed by the Navy's shipbuilding plans can reinforce the strong oversight focus on preventing or minimizing procurement cost growth in Navy shipbuilding programs, which is one expression of a strong oversight focus on preventing or minimizing cost growth in DOD acquisition programs in general  This oversight focus may reflect in part an assumption that avoiding or minimizing procurement cost growth is always synonymous with minimizing procurement cost  It is important to note, however, that as paradoxical as it may seem, avoiding or minimizing procurement cost growth is not always synonymous with minimizing procurement cost, and that a sustained, singular focus on avoiding or minimizing procurement cost growth might sometimes lead to higher procurement costs for the government  How could this be? Consider the example of a design for the lead ship of a new class of Navy ships  The construction cost of this new design is uncertain, but is estimated to be likely somewhere between Point A (a minimum possible figure) and Point D (a maximum possible figure)  (Point D, in other words, would represent a cost estimate with a 100% confidence factor, meaning there is a 100% chance that the cost would come in at or below that level ) If the Navy wanted to avoid cost growth on this ship, it could simply set the ship's procurement cost at Point D  Industry would likely be happy with this arrangement, and there likely would be no cost growth on the ship  The alternative strategy open to the Navy is to set the ship's target procurement cost at some figure between Points A and D—call it Point B—and then use that more challenging target cost to place pressure on industry to sharpen its pencils so as to find ways to produce the ship at that lower cost  (Navy officials sometimes refer to this as "pressurizing" industry ) In this example, it might turn out that industry efforts to reduce production costs are not successful enough to build the ship at the Point B cost  As a result, the ship experiences one or more rounds of procurement cost growth, and the ship's procurement cost rises over time from Point B to some higher figure—call it Point C  Here is the rub: Point C, in spite of incorporating one or more rounds of cost growth, might nevertheless turn out to be lower than Point D, because Point C reflected efforts by the shipbuilder to find ways to reduce production costs that the shipbuilder might have put less energy into pursuing if the Navy had simply set the ship's procurement cost initially at Point D  Setting the ship's cost at Point D, in other words, may eliminate the risk of cost growth on the ship, but does so at the expense of creating a risk of the government paying more for the ship than was actually necessary  DOD could avoid cost growth on new procurement programs starting tomorrow by simply setting costs for those programs at each program's equivalent of Point D  But as a result of this strategy, DOD could well wind up leaving money on the table in some instances—of not, in other words, minimizing procurement costs  DOD does not have to set a cost precisely at Point D to create a potential risk in this regard  A risk of leaving money on the table, for example, is a possible downside of requiring DOD to budget for its acquisition programs at something like an 80% confidence factor—an approach that some observers have recommended—because a cost at the 80% confidence factor is a cost that is likely fairly close to Point D  Procurement cost growth is often embarrassing for DOD and industry, and can damage their credibility in connection with future procurement efforts  Procurement cost growth can also disrupt congressional budgeting by requiring additional appropriations to pay for something Congress thought it had fully funded in a prior year  For this reason, there is a legitimate public policy value to pursuing a goal of having less rather than more procurement cost growth  Procurement cost growth, however, can sometimes be in part the result of DOD efforts to use lower initial cost targets as a means of pressuring industry to reduce production costs—efforts that, notwithstanding the cost growth, might be partially successful  A sustained, singular focus on avoiding or minimizing cost growth, and of punishing DOD for all instances of cost growth, could discourage DOD from using lower initial cost targets as a means of pressurizing industry, which could deprive DOD of a tool for controlling procurement costs  The point here is not to excuse away cost growth, because cost growth can occur in a program for reasons other than DOD's attempt to pressurize industry  Nor is the point to abandon the goal of seeking lower rather than higher procurement cost growth, because, as noted above, there is a legitimate public policy value in pursuing this goal  The point, rather, is to recognize that this goal is not always synonymous with minimizing procurement cost, and that a possibility of some amount of cost growth might be expected as part of an optimal government strategy for minimizing procurement cost  Recognizing that the goals of seeking lower rather than higher cost growth and of minimizing procurement cost can sometimes be in tension with one another can lead to an approach that takes both goals into consideration  In contrast, an approach that is instead characterized by a sustained, singular focus on avoiding and minimizing cost growth may appear virtuous, but in the end may wind up costing the government more  Appendix H  Size of the Navy and Navy Shipbuilding Rate Size of the Navy Table H-1 shows the size of the Navy in terms of total number of ships since FY1948; the numbers shown in the table reflect changes over time in the rules specifying which ships count toward the total  Differing counting rules result in differing totals, and for certain years, figures reflecting more than one set of counting rules are available  Figures in the table for FY1978 and subsequent years reflect the battle force ships counting method, which is the set of counting rules established in the early 1980s for public policy discussions of the size of the Navy  As shown in the table, the total number of battle force ships in the Navy reached a late-Cold War peak of 568 at the end of FY1987 and began declining thereafter  The Navy fell below 300 battle force ships in August 2003 and as of April 26, 2019, included 289 battle force ships  As discussed in Appendix C , historical figures for total fleet size might not be a reliable yardstick for assessing the appropriateness of proposals for the future size and structure of the Navy, particularly if the historical figures are more than a few years old, because the missions to be performed by the Navy, the mix of ships that make up the Navy, and the technologies that are available to Navy ships for performing missions all change over time, and because the number of ships in the fleet in an earlier year might itself have been inappropriate (i e , not enough or more than enough) for meeting the Navy's mission requirements in that year  For similar reasons, trends over time in the total number of ships in the Navy are not necessarily a reliable indicator of the direction of change in the fleet's ability to perform its stated missions  An increasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform its stated missions is increasing, because the fleet's mission requirements might be increasing more rapidly than ship numbers and average ship capability  Similarly, a decreasing number of ships in the fleet might not necessarily mean that the fleet's ability to perform stated missions is decreasing, because the fleet's mission requirements might be declining more rapidly than numbers of ships, or because average ship capability and the percentage of time that ships are in deployed locations might be increasing quickly enough to more than offset reductions in total ship numbers  Shipbuilding Rate Table H-2 shows past (FY1982-FY2019) and requested or programmed (FY2020-FY2024) rates of Navy ship procurement 


Report 2: JWST is envisioned to be a large deployable space telescope, optimized for infrared observations, and the scientific successor to the aging Hubble Space Telescope  JWST is being designed for a 5-year mission to find the first stars, study planets in other solar systems to search for the building blocks of life elsewhere in the universe, and trace the evolution of galaxies from their beginning to their current formation  JWST is intended to operate in an orbit approximately 1 5 million kilometers—or 1 million miles—from the Earth  With a 6 5-meter primary mirror, JWST is expected to operate at about 100 times the sensitivity of the Hubble Space Telescope  JWST’s science instruments are designed to observe very faint infrared sources and therefore are required to operate at extremely cold temperatures  To help keep these instruments cold, a multi-layered tennis court-sized sunshield is being developed to protect the mirrors and instruments from the sun’s heat  The JWST project is divided into three major segments: the observatory segment, the ground segment, and the launch segment  When complete, the observatory segment of JWST is to include several elements (Optical Telescope Element (OTE), Integrated Science Instrument Module (ISIM), and spacecraft) and major subsystems (sunshield and cryocooler)  The hardware configuration referred to as OTIS was created when the Optical Telescope Element and the Integrated Science Instrument Module were integrated  Additionally, JWST is dependent on software to deploy and control various components of the telescope, and to collect and transmit data back to Earth  The elements, major subsystems, and software are being developed through a mixture of NASA, contractor, and international partner efforts  See figure 1 for the elements and major subsystems of JWST and appendix 1 for more details, including a description of the elements, major subsystems, and JWST’s instruments  For the majority of work remaining, the JWST project is relying on two contractors: Northrop Grumman and the Association of Universities for Research in Astronomy’s Space Telescope Science Institute  Northrop Grumman plays the largest role, developing the sunshield, the Optical Telescope Element, the spacecraft, and the Mid-Infrared Instrument’s cryocooler, in addition to integrating and testing the observatory  Space Telescope Science Institute’s role includes soliciting and evaluating research proposals from the scientific community, and receiving and storing the scientific data collected, both of which are services that it currently provides for the Hubble Space Telescope  Additionally, the Institute is developing the ground system that manages and controls the telescope’s observations and will operate the observatory on behalf of NASA  JWST will be launched on an Ariane 5 rocket, provided by the European Space Agency  JWST depends on 22 deployment events—more than a typical science mission—to prepare the observatory for normal operations on orbit  For example, the sunshield and primary mirror are designed to fold and stow for launch and deploy once in space  Due to its large size, it is nearly impossible to perform deployment tests of the fully assembled observatory, so the verification of deployment elements is accomplished by a combination of lower level component tests in flight-simulated environments; ambient deployment tests for assembly, element, and observatory levels; and detailed analysis and simulations at various levels of assembly  We have previously found that complex development efforts like JWST face numerous risks and unforeseen technical challenges, which can often become apparent during integration and testing  To accommodate unanticipated challenges and manage risk, projects reserve extra time in their schedules, which is referred to as schedule reserve, and extra funds in their budgets, which is referred to as cost reserve  Schedule reserve is allocated to specific activities, elements, and major subsystems in the event of delays or to address unforeseen risks  Each JWST element and major subsystem has been allocated schedule reserve  When an element or major subsystem exhausts schedule reserve, it may begin to affect schedule reserve on other elements or major subsystems whose progress is dependent on prior work being finished for its activities to proceed  Cost reserves are additional funds within the project manager’s budget that can be used to address unanticipated issues for any element or major subsystem, and are used to mitigate issues during the development of a project  For example, cost reserves can be used to buy additional materials to replace a component or, if a project needs to preserve schedule reserve, reserves can be used to accelerate work by adding shifts to expedite manufacturing  NASA’s Goddard Space Flight Center— the NASA center with responsibility for managing JWST—has issued procedures that establish the requirements for cost and schedule reserves  In addition to cost reserves held by the project manager, management reserves are funds held by the contractors that allow them to manage program risks and to address unanticipated cost increases throughout development  We have previously found that management reserves should contain 10 percent or more of the cost to complete a project and are generally used to address various issues tied to the contract’s scope  NASA’s cost-plus-award-fee contract with Northrop Grumman has spanned almost two decades, during which there have been significant variances in contractor performance  Cost-reimbursement contracts are suitable when uncertainties in the scope of work or cost of services prevent the use of contract types in which prices are fixed, known as fixed-price contracts  Award fee contracts provide contractors the opportunity to obtain monetary incentives for performance in designated areas identified in the award fee plan  Award fees may be used when key elements of performance cannot be defined objectively, and, as such, require the project officials’ judgment to assess contractor performance  For JWST’s contract with Northrop Grumman, these areas include cost, schedule, technical, and business management and are established in the contracts’ performance evaluation plans  In December 2013, the JWST program and the contractor agreed to replace a $56 million on-orbit incentive—incentives based on successful performance in space—with award fees  The award fees are to incentivize cost and schedule performance during development  This shift increased the available award fee for the entire contract to almost a quarter of a billion dollars  According to officials, restructuring the incentives gave NASA more flexibility to incentivize the contractor to prioritize the cost and schedule performance over exceeding technical requirements  In December 2014, we found that NASA award fee letters of award fee periods from February 2013 to March 2014 indicated that the contractor had been responsive to interim award fee period criteria provided by NASA and that contractor officials confirmed that they pay close attention to this guidance in prioritizing their work  For example, Northrop Grumman officials reported that they had made specific changes to improve communications in direct response to this guidance, which was validated by award fee letters from NASA  The JWST program has a history of significant schedule delays and increases to project costs, which resulted in replans in 2011 and 2018  Before 2011, early technical and management challenges, contractor performance issues, low levels of cost reserves, and poorly phased funding caused the JWST program to delay work  As a result, the program experienced schedule overruns, including launch delays, and cost growth  The JWST program underwent a replan in September 2011, and a rebaseline in November of that same year, and Congress placed an $8 billion cap on the formulation and development costs for the project  On the basis of the replan, NASA rebaselined JWST with a life- cycle cost estimate of $8 835 billion, which included additional money for operations and a planned launch in October 2018  Congress also required that NASA treat any cost increase above the cap according to procedures established for projects that exceed their development cost estimates by at least 30 percent  This process is known as a rebaseline  Congress must authorize continuation of the JWST program if formulation and development costs increase over the $8 billion cost cap  In June 2018, after a series of launch delay announcements due to technical and workmanship issues identified during spacecraft element integration, NASA notified Congress that it had again revised the JWST program’s cost and schedule estimates  NASA estimated that it now required $828 million in additional resources and 29 more months to complete beyond those estimates agreed to in the 2011 rebaseline  As of November 2018, NASA had funding to continue to execute the program and was waiting to see if Congress would authorize the program’s continuation and appropriate funds for the program in fiscal year 2019  Figure 2 shows the project’s history of changes to its cost or schedule and key findings from two external independent review teams and our prior work  As discussed above, various technical and workmanship errors drove some of the more recent delays  Examples of some of the workmanship issues we found in the past include: In October 2015, the project reported that a piece of flight hardware for the sunshield’s mid-boom assembly was irreparably damaged during vacuum sealing in preparation for shipping  The damaged piece had to be remanufactured, which consumed 3 weeks of schedule reserve  In April 2017, a contractor technician applied too much voltage and irreparably damaged the spacecraft’s pressure transducers, components of the propulsion system that help monitor spacecraft fuel levels  The transducers had to be replaced and reattached in a complicated welding process  At the same time, Northrop Grumman also addressed several challenges with integrating sunshield hardware  These issues combined took up another 1 25 months of schedule reserve  In May 2017, some of the valves in the spacecraft propulsion system’s thruster modules were leaking beyond permissible levels  Northrop Grumman determined that the most likely cause was the use of an improper cleaning solution, and the thruster modules were returned to the vendor for investigation and refurbishment  Reattaching the refurbished modules was expected to be complete by February 2018, but was delayed by one month when a technician applied too much voltage to one of the components in a recently refurbished thruster module  NASA and Northrop Grumman reported that resolving the thruster module issue resulted in a 2-month delay to the project’s overall schedule  In October 2017, when conducting folding and deployment exercises on the sunshield, Northrop Grumman discovered several tears in the sunshield membrane layers  According to program officials, a workmanship error contributed to the tears  The tears resulted in another 2-month delay to the project’s overall schedule  In addition, some first-time efforts took longer than planned  For example, in fall 2017, the project determined that it would need to use up to 3 months of schedule reserve based upon lessons learned from the contractor’s initial sunshield folding operation  This first deployment, or unfolding, took 30 days longer than planned  The sunshield has since undergone another deployment, and will be deployed twice more before launch  The IRB took into account these technical and workmanship errors, as well as other considerations, when it analyzed the project’s organizational and technical issues  The board’s final report, issued in May 2018, included 31 recommendations that addressed a range of factors  For example, the IRB recommended that the project: Conduct an audit to identify potential embedded design flaws— problems that have not been detected through analysis, inspection, or test activities and pose a significant risk to JWST schedule, cost, and mission success; Establish corrective actions to detect and correct human mistakes during integration and test; Establish a coherent, agreed-upon, and factual narrative on project status and communicate that status regularly across to all relevant stakeholders; and Augment integration and test staff to ensure adequate long-term staffing and improve employee morale  In its response to the IRB’s report, NASA stated that it accepted the report’s recommendations and had already begun implementing action in response to many of them  Further, project officials told us that some of the actions were underway before the IRB completed its review  To develop a new schedule for JWST’s 2018 replan, NASA took into account the remaining integration and test work and added time to the schedule to address threats that were not yet mitigated  This includes 5 5 months to address an anomaly that occurred on the sunshield’s cover in 2018  The project also replenished its schedule reserves—which we found in February 2018 had been consumed—so that they now exceed the recommended levels  Both the project and IRB conducted schedule risk assessments that produced similar launch dates  The project relied on the replan schedule to determine its remaining costs because the workforce necessary to complete the observatory represents most of the remaining cost  Following is additional information on the schedule and cost considerations  Schedule: JWST’s revised launch readiness date of March 2021 reflects a consideration of the hardware integration and test challenges the project has experienced, including adding time to: Add snag guards for the membrane tensioning system—which helps deploy the sunshield and maintain its correct shape—to prevent excess cable from snagging, Repair tears of the sunshield membrane, Deploy, fold, and stow the sunshield, and Mitigate contractor schedule threats  In addition, the project added extra time to the schedule to complete repairs to the membrane cover assembly, which did not perform as expected during acoustics testing in April 2018  The membrane cover assembly shown in figure 3 is used to cover the sunshield membrane when in the stowed position to provide thermal protection during launch  After the anomaly occurred, the project halted spacecraft element testing, investigated the anomaly, and found that the fasteners had come loose due to a design change made to prevent the fasteners from damaging the sunshield membrane  The design change caused the nuts to not lock properly  According to project officials, due to the design of the membrane cover assembly, the project was not able to conduct flight-like, stand- alone testing on the cover prior to spacecraft element testing  As a result, the project did not discover the design issue until the hardware came loose while installed on the spacecraft element  The project determined that the repairs would take approximately 5 5 months  The project’s replan also reflected schedule reserves above the level required by Goddard Space Flight Center policy, which would have been approximately 5 months at that time  The new schedule includes a total of 293 days or 9 6 months of schedule reserves leading up to its committed launch readiness date of March 2021  NASA approved a JWST launch date of March 2021, but the project and the contractor are working toward a launch date in November 2020  Figure 4 shows the project’s new schedule following the 2018 replan, including how the project distributed its schedule reserves through different integration and test activities  As part of its May 2018 study, the IRB reviewed the project’s schedule and recommended a launch date of March 2021, which was subsequently reflected in NASA’s new schedule for the program  In reviewing the project’s schedule, the IRB found that the project had robust scheduling practices for ensuring that the schedule represented a complete and dynamic network of tasks that could respond automatically to changes  This schedule also passed a standard health check with minimal errors indicating that it was well constructed  However, the IRB noted that this schedule does not account for certain types of unknown risks to the program such as integration and test errors which can take many months to resolve, or the potential need to remove a science instrument from the observatory, which can have about a 1 year impact  As a result, the program could experience additional delays if a risk of this magnitude is realized  Cost: The project’s new $9 7 billion life-cycle cost estimate is principally driven by the schedule extension, which requires keeping the contractor’s workforce to complete integration and test longer than expected  Specifically, the project determined that almost all of the hardware had been delivered and the remaining cost was predominantly the cost for the workforce necessary to complete and test the observatory  For the past 3 years, we have reported that Northrop Grumman’s ability to decrease its workforce was central to JWST’s capacity to meet its long- term cost commitments  However, Northrop Grumman’s actual workforce continued to exceed its projections  This was because it needed to maintain higher workforce levels due to technical challenges, including problems with spacecraft and sunshield integration and test  It also needed to keep specialized engineers available when needed during final assembly and test activities  In developing the cost estimate supporting the 2018 replan, the project used a Northrop Grumman workforce profile that is higher than previous projections because Northrop Grumman now plans to maintain personnel longer during integration and test  According to project officials, the planned reduction of Northrop Grumman’s workforce is now more gradual and conservative than the prior plan  For example, the Northrop Grumman workforce will not start to significantly decline until the observatory ships to the launch site, which is expected to occur in August 2020  As shown in Figure 5, the JWST workforce assembling the observatory declines and the government and contractor workforce necessary to manage and operate the observatory remains after the internal launch readiness date of November 2020  As seen in the above figure, the Space Telescope Science Institute workforce, the contractor responsible for operating JWST, will remain generally flat between fiscal years 2021 to 2026 when it operates the observatory  The NASA civil service and support contractor will remain relatively flat through November 2020 launch date and then decline  In addition, the new cost estimate also took into account $61 million for implementing the IRB recommendations and mission success enhancements, funding for project cost reserves, and operations costs  In June 2018, the NASA associate administrator—who is the project’s decision authority—approved the project to proceed with its replan with a March 2021 launch date and $9 7 billion in life-cycle costs based on the Agency Program Management Council review and replan documents  The associate administrator did not require the project to conduct an updated Joint Cost and Schedule Confidence Level (JCL) analysis for this replan

ground_truth: The current and planned size and composition of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy's shipbuilding plans have been oversight matters for the congressional defense committees for many years. On December 15, 2016, the Navy released a force-structure goal that calls for achieving and maintaining a fleet of 355 ships of certain types and numbers. The 355-ship force-level goal is the result of a Force Structure Assessment (FSA) conducted by the Navy in 2016. The Navy states that a new FSA is now underway as the successor to the 2016 FSA. This new FSA, Navy officials state, is to be completed by the end of 2019. Navy officials have suggested in their public remarks that this new FSA could change the 355-ship figure, the planned mix of ships, or both. The Navy's proposed FY2020 budget requests funding for the procurement of 12 new ships, including one Gerald R. Ford (CVN-78) class aircraft carrier, three Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one FFG(X) frigate, two John Lewis (TAO-205) class oilers, and two TATS towing, salvage, and rescue ships. The Navy's FY2020 five-year (FY2020-FY2024) shipbuilding plan includes 55 new ships, or an average of 11 new ships per year. The Navy's FY2020 30-year (FY2020-FY2049) shipbuilding plan includes 304 ships, or an average of about 10 per year. If the FY2020 30-year shipbuilding plan is implemented, the Navy projects that it will achieve a total of 355 ships by FY2034. This is about 20 years sooner than projected under the Navy's FY2019 30-year shipbuilding plan—an acceleration primarily due to a decision announced by the Navy in April 2018, after the FY2019 plan was submitted, to increase the service lives of all DDG-51 destroyers to 45 years. Although the Navy projects that the fleet will reach a total of 355 ships in FY2034, the Navy in that year and subsequent years will not match the composition called for in the FY2016 FSA. One issue for Congress is whether the new FSA that the Navy is conducting will change the 355-ship force-level objective established by the 2016 FSA and, if so, in what ways. Another oversight issue for Congress concerns the prospective affordability of the Navy's 30-year shipbuilding plan. Decisions that Congress makes regarding Navy force structure and shipbuilding plans can substantially affect Navy capabilities and funding requirements and the U.S. shipbuilding industrial base.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2:  A JCL is an integrated analysis of a project’s cost, schedule, risk, and uncertainty whose result indicates the probability of a project’s success of meeting cost and schedule targets  NASA policy states that a JCL should be recalculated and approved as a part of the rebaselining approval process, but it is not required  In its replan decision memo, NASA’s associate administrator explained that he did not require the project to update the JCL because project costs are almost entirely related to the workforce and most of the remaining planned activities will be performed generally in sequence  Therefore, according to NASA’s associate administrator, the total cost would be driven almost entirely by the schedule because the workforce levels will remain the same through delivery of the observatory  Both the project and independent estimators used multiple schedule estimating methods to analyze the schedule for the remaining work, and NASA’s associate administrator said these analyses returned consistent, high confidence launch dates  The project’s ability to execute to its new schedule will be tested as it progresses through the remainder of challenging integration and test work  The project has yet to complete three of five integration and test phases  The remaining phases include integration and test of OTIS, the spacecraft element, and the observatory  Our prior work has shown that integration and testing is the phase in which problems are most likely to be found and schedules tend to slip  For a uniquely complex project such as JWST, this risk is magnified as events start to become more sequential in nature  As a result, it will continue to become more difficult for the project to avoid schedule delays by mitigating issues in parallel  As of November 2018, the project is about a week behind its replanned schedule because repairs on the membrane cover assembly took longer than planned  Completing the membrane cover assembly repairs and returning the spacecraft to vibration testing was a key event for the project to demonstrate that it could execute to its new schedule  When the project developed its 2018 replanned schedule, it had planned to complete the membrane cover assembly repairs and reinstall the assembly onto the sunshield and restart spacecraft element integration and test activities by November 6, 2018  The project allocated 4 weeks of schedule reserves specifically for these repairs  However, the membrane cover repairs proved more difficult than anticipated  For example, the program had to address unanticipated technical challenges on the membrane cover assemblies, including repairing tears and pin holes in the covers discovered after the covers were removed  The project also had to allot time to install bumpers, which are kapton tubes, to the assembly to protect the composite material on a sunshield structure during launch  The project identified the need to add the bumpers during subassembly vibration testing  As a result, as of November 2018, the project had used about 4 5 weeks of schedule reserves to cover delays associated with these activities  The use of reserves beyond what the project had planned for the repairs pushed the restart of spacecraft element integration and test activities out about a week to November 14, 2018  Figure 6 compares the project’s initial membrane cover assembly schedule in June 2018 to the actual schedule in November 2018  While the project repaired the membrane cover assembly, it also used this time to conduct risk mitigation activities on OTIS  For example, the project worked to mitigate a design issue on the frill connections  The frill is composed of a single layer of blankets placed around the outside of the primary mirror used to block stray light (see figure 7)  A combination of modeling and inspections revealed that most of the frill sections did not have as much slack as expected at the near-absolute zero cryogenic temperatures of space  This caused shrinkage that put stress on the edges of the outer ring of mirrors, which could affect the stability of the optical mirror and image quality  The project loosened these outer connections by adding a ring to the connecting points  As of November 2018, project officials said they were in the process of verifying the fix through inspections  Examples of technical issues and risks that the project continues to face during the remaining phases of integration and test include: The project is working to mitigate a design issue on the sunshield membrane tensioning system—which helps deploy the sunshield and maintain its correct shape  In our February 2018 report, we found that Northrop Grumman was planning to modify the design of the membrane tensioning system after one of the sunshield’s six membrane tensioning systems experienced a snag when conducting folding and deployment exercises on the sunshield in October 2017  The project and Northrop Grumman determined that a design modification was necessary to fully mitigate the issue, which includes modifying clips used to progressively release the cable tension and adding guards to control the excess cable  The project identified a concern that the depressurization of trapped air in the folded sunshield membrane when the fairing separates to release the JWST observatory may overly stress the membrane material  The project is working with Arianespace—the company responsible for operating JWST’s launch vehicle—and experts at the Kennedy Space Center to resolve this concern  Officials estimated that a design solution would be in place in mid-2019  However, if the project determines that it needs to reinforce the membrane covers to survive excessive residual pressure as it works on this design solution, a multi-month schedule delay could occur  As of November 2018, the project has mitigated 21 of its 47 hardware and software risks to acceptable levels, and reviews these risks monthly for any changes that might affect the continued acceptability of the risk  Five of these 21 risks are related to the project’s more than 300 potential single point failures—several of which are related to the deployment of the sunshield  The project is actively working to mitigate the remaining 26 risks to acceptable levels or closure prior to launching  The project also has several first-time and challenging integration and test activities remaining  For example, the project must integrate OTIS and the completed spacecraft element and test the full observatory in the final integration phase, which includes another set of challenging environmental tests  See figure 8 for an image of OTIS and the spacecraft element prior to being integrated  As previously discussed, the project also has two remaining deployments of the sunshield, and prior deployments have taken longer than planned  To help mitigate the risks associated with the deployments, the project added additional time for deployments in the 2018 replanned schedule based on lessons learned from prior deployments  The two remaining deployments are to occur after spacecraft element integration and test and again after observatory integration and test  The JWST project office is required to evaluate whether the project can complete development within its revised cost and schedule commitments at its next major review—the system integration review—planned for August 2019  This review is to occur after the project has completed two major tasks—OTIS and spacecraft element integration and test  The review is to evaluate whether the project (1) is ready to enter observatory integration and test, and (2) can complete remaining project development with acceptable risk and within its cost and schedule constraints  NASA guidance does not require projects to conduct a JCL at this review  However, project officials said that they plan to conduct another schedule risk analysis in the future  They do not intend to complete a new JCL for the same reasons they did not complete one for the 2018 replan— because costs are almost entirely related to the workforce and can be derived from a schedule that takes into account known risk  While not required, conducting a JCL prior to the system integration review would inform NASA about the probability of meeting both its cost and schedule commitments  If the project proceeds with its plan to conduct only a schedule risk analysis, NASA would be provided only with an updated probability of meeting its schedule commitments  Our cost estimating best practices recommend that cost estimates should be updated to reflect changes to a program or kept current as it moves through milestones and as new risks emerge  In addition, government and industry cost and schedule experts we spoke with noted that integration and testing is a critical time for a project when problems can develop  These experts told us that completing a JCL is a best practice for analyzing major risks at the most uncertain part of project execution  Conducting a JCL at system integration review—a review that occurs during the riskiest phase of development, the integration and test phase— would allow the project to update its assumptions of risk and uncertainty based on its experiences in OTIS and spacecraft element integration and test  The project could then determine how those updated assumptions affect overall cost and schedule for the JWST project  As noted above, the project has many risks to mitigate, technical challenges to overcome, and challenging test events to complete, which could affect the project’s schedule and risk posture  Further, the project has an established history of significant cost growth and schedule delays  In its June 2018 letter notifying an appropriate congressional committee of its updated cost and schedule commitments, NASA acknowledged that recent cost growth for the project will likely impact other science missions  Conducting a JCL at system integration review would provide NASA and Congress with critical information for making informed resource decisions on the JWST project and its affordability within NASA’s portfolio of projects more broadly  NASA has taken steps to augment oversight of the contractor and project following the discovery of the embedded design flaws and workmanship errors that contributed to the project’s most recent schedule delays and cost increases  See table 1 for examples of changes NASA has made to contractor and project oversight—some of which NASA self-identified and others that were in response to IRB recommendations  The IRB made 31 recommendations that ranged from improving employee morale to improving security during transporting JWST to its launch site  NASA has also used award fees to try to incentivize Northrop Grumman to improve its performance  In a July 2018 hearing on the JWST program before the House Science, Space, and Technology Committee, Administrator Bridenstine stated that NASA had reduced the available award fee through commissioning by $28 million out of a total of about $60 million  Northrop Grumman also did not earn its full award fee in the two most recent periods of performance that NASA assessed  For the performance period of April 1, 2017 to September 30, 2017, Northrop Grumman earned approximately 56 percent of the available award fee  Reasons that NASA cited for its evaluation of award fees in this period included workmanship errors on the propulsion system, schedule delays, as well as issues with schedule execution, management, and quality control  For the period of October 1, 2017 to March 31, 2018, Northrop Grumman earned none of the available award fee  Northrop Grumman’s overall score was driven by an “unacceptable” rating in schedule and cost due to delays and in anticipation of exceeding the project’s $8 billion cost cap  Northrop Grumman received an “excellent” rating under the technical category, but the evaluation noted ongoing issues with quality controls, which resulted in delays  For example, the process steps for applying voltage to the spacecraft’s pressure transducers were not clear enough, which resulted in technician error and irreparable damage to the hardware  According to Northrop Grumman officials, the contractor has started to take action to try to improve its quality assurance processes  Officials described actions that ranged from rewriting hardware integration and test procedures to starting efforts to change aspects of the company’s culture that contributed to quality control issues  For example, in July 2018, Northrop Grumman initiated a JWST mission assurance culture change campaign to increase focus on product quality and process compliance  This effort includes having inspectors affirm by signature that they have personally inspected, verified, and confirmed that all aspects of an activity meet quality standards  According to the form instructions, if the inspector is uncertain on compliance or if instructions are unclear, workers are to halt work, investigate and assess the situation, and request help to resolve the situation  Project and Northrop Grumman officials provided an example of these changes working  During a manual deployment of a radiator panel, a Northrop Grumman employee discovered that a flap used as thermal protection for a radiator was installed incorrectly and reported the error  Northrop Grumman technicians found that this flap had been swapped with another flap in the process of moving them to be installed and corrected the problem before work proceeded  Further, NASA and Northrop Grumman are conducting audits to try to minimize the risk of failures during the remaining phases of integration and test  These audits are conducted on items that have not been fully tested, are in workmanship-sensitive areas, or have had a late design change  The first phase of the audit was completed in September 2018 and found no major design issues or hardware rework required  The project plans to audit other areas through at least spring 2019, but will add audits if needed  The JWST oversight structure includes a number of positions that could be responsible for ensuring that the recent augmentations to contractor and project oversight are sustained through launch (see table 2)  In response to our review, NASA officials clarified that the project manager has sole responsibility for ensuring that these improvements are sustained through launch  Further, these officials stated that the project office is responsible for monitoring these changes at the project level and at Northrop Grumman  The project manager’s continued focus on these efforts will be important because: The project is implementing a wide span of improvement efforts, ranging from more on-site coverage at the contractor facility to cultural improvements, which will now need to be sustained for an additional 29 months  The project has had recurring issues with effective internal and external communication as well as defining key management and oversight responsibilities, both of which are important to sustaining oversight  For example, the Independent Comprehensive Review Panel identified communication problems—between the JWST project and Science Mission Directorate management as well as between NASA and Northrop Grumman—and that the project’s governance structure lacked clear lines of authority and accountability  In December 2012, we found the JWST project had taken several steps to improve communication—such as instituting meetings that include various levels of NASA, contractor, and subcontractor management— but the IRB’s findings in 2018 indicate that communication and governance issues have resurfaced in some areas  For example, the IRB found that communication with key stakeholders including the science community, Congress, and NASA leadership, has been variable and at times inconsistent  The project may encounter new schedule pressures as it proceeds through integration and test  A senior NASA official with expertise in workmanship issues told us that schedule pressure is a key reason for increased quality problems on projects  For example, this official said that companies tend to give experts leniency to operate without the burden of quality assurance paperwork when schedule pressures arise, which can lead to workmanship errors  While JWST project officials told us they do not view this as applicable to their project, the perspective regarding potential schedule pressures and workmanship is important to keep focus on given the magnitude of technical challenges and delays the project has faced  We will continue to monitor the project’s efforts at maintaining these oversight augmentations in future reviews, given that less than a year has passed since the project began implementing many of them  Moreover, the project may find that some actions will be required of officials outside the project, particularly since the communication problems identified by the IRB may well extend to headquarters’ interaction with stakeholders from the science community, industry, and the Congress  JWST is one of NASA’s most expensive and complex science projects, and NASA has invested considerable time and resources on it  The project first established its cost and schedule baseline in 2009  Since then, the project made progress by completing two of five phases of integration and test, but has also experienced significant cost growth and schedule delays  However, the project did not complete a JCL analysis as part of its second replan  Between now and its system integration review planned for August 2019, the JWST program will have to continue to address technical challenges and mitigate risks  Conducting a JCL would better inform decision makers on the status of the project as they determine whether the project can complete remaining project development with acceptable risk and within its cost and schedule constraints  Given the project is now on its third iteration of cost and schedule commitments, conducting a JCL is a small step that NASA can take to demonstrate it is on track to meet these new commitments  We are making the following recommendation to NASA: The NASA Administrator should direct the JWST project office to conduct a JCL prior to its system integration review  (Recommendation 1) We provided a draft of this report to NASA for comment  In written comments, NASA agreed with our recommendation  NASA expects to complete the JCL by September 2019, prior to the system integration review  The comments are reprinted in appendix II  NASA also provided technical comments, which have been addressed in the report, as appropriate  We are sending copies of this report to the appropriate congressional committees, the NASA Administrator, and other interested parties  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions on matters discussed in this report, please contact me at (202) 512-4841 or chaplainc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix III  In addition to the contact named above, Molly Traci (Assistant Director), Karen Richey (Assistant Director), Jay Tallon (Assistant Director), Brian Bothwell, Daniel Emirkhanian, Laura Greifner, Erin Kennedy, Jose Ramos, Sylvia Schatz, Roxanna Sun, and Alyssa Weir made key contributions to this report 
Report 2:  NCA’s Cost Estimates for Most of Its Rural Initiative Sites Have Increased Significantly We found that NCA’s cost estimates for seven rural initiative sites have increased significantly above what NCA officials had initially estimated  In its strategy, NCA had estimated that the construction cost estimate for each of the seven rural initiative sites would be approximately $1 million (totaling approximately $7 million)  However, NCA officials told us in August 2018 that the construction cost estimates for these sites had increased to more than $3 million each (totaling almost $24 million)  This amounts to a cost increase of more than 200 percent  Further, the information they provided was not always consistent  For example, in July 2018 NCA officials provided us the average land acquisition and construction costs for the urban and rural initiatives  According to the document they provided, the average construction cost for each urban initiative cemetery is $7 5 million  However, in August 2018 NCA stated in a written response that the construction cost estimates for each of the urban initiatives ranged from approximately $9 million to more than $22 million, reflecting an average cost of $13 6 million  NCA’s cost-estimating guidance used to prepare construction cost estimates does not fully incorporate the 12 steps identified in our Cost Guide that should result in reliable and valid estimates that management can use to make informed decisions, as shown in table 2  Appendix I provides a detailed summary of our assessment of NCA’s cost-estimating guidance  Specifically, NCA’s cost-estimating guidance fully met one step, substantially met four steps, partially met four steps, minimally met two steps, and did not meet one step  For example: NCA’s cost-estimating guidance fully met the step of “obtaining the data” in that it requires a market survey that explores all factors that will affect the bid cost and collects valid and useful historical data to develop a sound cost estimate  NCA’s cost-estimating guidance substantially met the step of “updating the estimate” in that it requires cost estimates to be regularly updated  For instance, it requires an updated cost-estimating report at each stage of the design of the construction project  NCA’s cost-estimating guidance minimally met the step of “conducting a risk and uncertainty analysis” in that, while it mentions the inclusion of a risk analysis, it does not describe what a risk analysis is and how it relates to cost  Additionally, none of the guidance we reviewed contains any discussion of risk management  NCA’s cost-estimating guidance did not meet the step of “conducting a sensitivity analysis ” According to our Cost Guide, a sensitivity analysis should be included in all cost estimates because it examines the effects of changing assumptions and ground rules  Because uncertainty cannot be avoided, it is necessary to identify the cost elements that represent the most risk, and cost estimators should if possible quantify the risk  NCA uses multiple guidance documents on cost estimation and requires that managers and contractors use all of these documents in implementing their projects  Specifically, NCA uses VA’s 2011 Manual for Preparation of Cost Estimates and Related Documents for VA Facilities (Manual); VA’s 2011 Architect/Engineer (A/E) Submission Requirements for National Cemetery Projects Program Guide PG 18-15 Volume D (Guide); and NCA’s Construction Program Conceptual Estimate Worksheet  We refer to these documents collectively as “NCA’s cost- estimating guidance ” We previously reported on VA’s management of minor construction projects and made several recommendations, including that the Veterans Health Administration revise its cost-estimating guidance to incorporate the 12 steps presented in the Cost Guide, to help VA have greater assurance that its cost estimates for minor construction projects are reliable  VA concurred and stated that it would ensure that the Veterans Health Administration update its cost-estimating guidance by incorporating the 12 steps outlined in the Cost Guide, as applicable  As of August 2019, VA had not taken any action to implement this recommendation  The guidance document it plans to update, the VA Manual, is also used by NCA  Further, NCA uses additional guidance documents to develop cost estimates for its cemetery construction projects—including the urban and rural initiatives—that do not fully incorporate the 12 steps presented in the Cost Guide  Without NCA’s revising its cost-estimating guidance to more fully reflect the 12 steps in the Cost Guide, including “conducting a risk and uncertainty analysis,” NCA will not be well-positioned to provide reliable cost estimates to VA and enable it to make informed decisions regarding the management of cemetery construction projects  As noted earlier, the Grants Program is part of NCA’s plan to increase veterans’ reasonable access to burial options  According to NCA officials, their plan to meet their strategic goal of 95 percent of veterans being served by burial options relies, in part, on the state and tribal government efforts funded by the Grants Program  The Grants Program, in turn, relies on states and tribal governments applying for funding to build new cemeteries or expand existing cemeteries  An NCA official told us that NCA does not have the authority to formally request that a state seek grant funding to expand access in an unserved area  However, according to VA officials, the Grants Program has had informal discussions with states that it believes have larger concentrations of unserved veterans, in order to encourage grant applications to provide increased burial access for unserved veteran populations  When reviewing grant applications, NCA considers a number of factors, including how the grant would enhance access for unserved veterans  NCA officials stated that they use the VA’s county-level population data to identify veteran population areas unserved by national, state, or tribal government veterans’ cemeteries  This analysis also allows NCA to project where additional state and tribal government veterans’ cemeteries may be most needed  Specifically, NCA has ranked what it identified as the 40 largest currently unserved veteran population areas  NCA performs this ranking at the county level, not the more precise census tract level, although as we have previously reported it has the technical ability to use census tract data  In September 2014, we reported that NCA was using population data at the county level to identify veterans not served by burial options, and that using population data at the census tract level would enhance NCA’s management of the national cemetery program  Specifically, we recommended that NCA use its existing capabilities to estimate the served and unserved veteran populations using census tract data  This would have allowed them to make better-informed decisions concerning where to locate new national cemeteries, as well as identify which state and tribal government cemetery grant applications would provide reasonable burial access to the greatest number of veterans  However, VA did not concur with that recommendation  In its comments on our draft report, VA agreed that census tract data may yield more precise information than county-level population data, but it disagreed with our conclusion that the use of census tract data would have helped VA to make better-informed decisions regarding the location of burial options  For this review, we performed an analysis using census tract data to examine the 40 prospective sites that NCA has identified as the currently largest unserved areas, using current veteran population data  Our analysis yielded estimates for veterans in the service areas for these prospective sites that differed substantially in some instances from the numbers used by NCA (see figure 5)  For example, NCA ranked Erie, Pennsylvania, as 4th on its list of prospective sites, based on its estimate that an additional 45,154 veterans could be served by a cemetery at this location  However, using census tract data we estimate that only about 10,000 veterans could be served there, resulting in a lower priority for Erie, Pennsylvania, on this list of prospective sites  Similarly, the county- based methodology used by NCA ranked Decatur, Alabama, as 25th on the list of prospective sites, while our methodology based upon nearby census tracts placed it 2nd on the list by estimated number of veterans in the service area  Thus, even though it could serve many additional veterans, Decatur, Alabama, would not be ranked highly on the list for funding using NCA’s methodology  By using the more precise census tract data to help inform its grant- making decisions, NCA could enhance its ability to implement its plan to provide burial options to unserved veterans  Comparing estimates of unserved veterans based on current census tract data with such estimates based on current county-level data can be a useful supplement to NCA’s current reliance on long-term projected county-level population data  Comparing census tract data with county-level data could also identify areas where the county-level projections might be overridden or require additional scrutiny  This could position NCA to better identify those areas of the country that will have the most significant unserved veteran populations  Additionally, this could help NCA refine its current plans or develop new ones, as it deems appropriate  We therefore continue to maintain the validity of our 2014 recommendation for VA to use census tract data to estimate the served and unserved veteran populations to help inform its plans for providing reasonable access to burial options  By NCA’s estimates, more than 2 1 million veterans—about 10 percent of the veterans in the United States—did not have reasonable access to burial options at the end of fiscal year 2013  According to NCA, its plan had helped increase the percentage served by burial options to about 92 percent of the veteran population by the end of fiscal year 2018  However, completion of some of the urban and rural sites that are part of NCA’s plan is currently estimated to take 5 years or longer than planned at significantly higher cost, in part because construction cost estimates for the remaining sites may be unreliable  Without NCA’s revising its cost- estimating guidance to more fully reflect the 12 steps in the Cost Guide, including “conducting a risk and uncertainty analysis,” NCA will not be well-positioned to provide reliable cost estimates to VA and enable it to make informed decisions regarding the funding and oversight of NCA’s ongoing minor construction projects to enhance veterans’ burial options  The Secretary of Veterans Affairs should ensure that the Under Secretary for Memorial Affairs update its cost-estimating procedures for cemetery construction projects to fully incorporate the 12 steps identified in the GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs  We provided a draft of this report to VA for review and comment  In written comments, VA concurred with our recommendation  VA also provided technical comments, which we incorporated as appropriate  VA’s comments are printed in their entirety in appendix II  In its technical comments, VA disagreed with our finding that NCA had made limited progress implementing its plan for increasing burial access for veterans and stated that NCA had instead made significant progress  As we note in this report, in 2014, NCA planned to open 18 new sites by the end of fiscal year 2017 to better serve the burial needs of the veteran population  However, as of September 2019, only six of the planned sites were open, with NCA years behind its original schedule  For this reason, we characterized the progress as “limited ” While the progress has been limited, it is important to note that the opening of the six sites has increased accessibility of burial options to veterans  VA also stated that it continues to disagree with our 2014 recommendation that VA use census tract data to estimate the current served and unserved veteran populations to inform its plans for providing reasonable access to burial options  In its written response, VA stated that we recommended NCA use census tract rather than county-level data  However, that is not what we recommended  As we stated in this report, comparing estimates of unserved veterans based on current census tract data with estimates based on current county-level data would provide a useful supplement to NCA’s current reliance on long-term projected county-level population data  Specifically, NCA would be better positioned to identify those areas of the country that will have the most significant unserved veteran populations and refine its current plans or develop new ones, as it deems appropriate  We are sending copies of this report to interested congressional committees and the Secretary of Veterans Affairs  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-9627 or maurerd@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff members who made key contributions to this report are listed in appendix III  We compared NCA’s cost-estimating guidance with the 12 steps identified in the GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs (Cost Guide)  We found that NCA’s cost-estimating guidance on preparing cost estimates for cemetery construction projects—specifically Department of Veterans Affairs’ (VA) Manual for Preparation of Cost Estimates & Related Documents for VA Facilities (Manual), VA’s Architect/Engineer Submission Requirements for National Cemetery Projects, Program Guide 18-15 Volume D (Guide), and NCA’s Construction Program Conceptual Estimate Worksheet (Worksheet)—does not fully incorporate these 12 steps, as shown in table 3  The guidance incorporates some of the 12 steps to some degree, but not others, raising the possibility of unreliable cost estimates for NCA’s urban and rural initiatives  Specifically, NCA’s guidance on preparing cost estimates: fully or substantially met five of the 12 steps, partially met four of the 12 steps, and minimally met or did not meet three of the 12 steps  Diana Maurer, (202) 512-9627 or maurerd@gao gov  In addition to the contact named above, Brian Lepore, Director (Retired); Maria Storts, Assistant Director; Pamela Nicole Harris, Analyst-in-Charge; Brian Bothwell, Jennifer Echard, Alexandra Gonzalez, Jason Lee, Amie Lesser, Serena Lo, John Mingus, Brenda Mittelbuscher, Maria Staunton, Frank Todisco, Cheryl Weissman, and John Wren made significant contributions to this report 

ground_truth: JWST, a large, deployable telescope, is one of NASA's most complex projects and top priorities. The project has delayed its planned launch three times since September 2017 due to problems discovered in testing. In June 2018, NASA approved new cost and schedule estimates for JWST. Since the project established its cost and schedule baselines in 2009, the project's costs have increased by 95 percent and the launch date has been moved back by 81 months. Conference Report No. 112-284, accompanying the Consolidated and Further Continuing Appropriations Act, 2012, included a provision for GAO to assess the project annually and report on its progress. This is the seventh report. This report assesses (1) the considerations NASA took into account when updating the project's cost and schedule commitments and (2) the extent to which NASA has taken steps to improve oversight and performance of JWST, among other issues. GAO reviewed relevant NASA policies, analyzed NASA and contractor data, and interviewed NASA and contractor officials. In June 2018, the National Aeronautics and Space Administration (NASA) revised the cost and schedule commitments for the James Webb Space Telescope (JWST) to reflect known technical challenges, as well as provide additional time to address unanticipated challenges. For example, the revised launch readiness date of March 2021 included 5.5 months to address a design issue for the cover of the sunshield (see image). The purpose of the sunshield is to protect the telescope's mirrors and instruments from the sun's heat. NASA found that hardware on the cover came loose during testing in April 2018. The new cost estimate of $9.7 billion is driven by the schedule extension, which requires keeping the contractor's workforce on board longer than expected. Before the project enters its final phase of integration and test, it must conduct a review to determine if it can launch within its cost and schedule commitments. As part of this review, the project is not required to update its joint cost and schedule confidence level analysis—an analysis that provides the probability the project can meet its cost and schedule commitments—but government and industry cost and schedule experts have found it is a best practice to do so. Such analysis would provide NASA officials with better information to support decisions on allocating resources, especially in light of the project's recent cost and schedule growth. NASA has taken steps to improve oversight and performance of JWST, and identified the JWST project manager as responsible for monitoring the continued implementation of these changes. Examples of recent changes include increasing on-site presence at the contractor facility and conducting comprehensive audits of design processes. Sustaining focus on these changes through launch will be important if schedule pressures arise later and because of past challenges with communications. GAO will follow up on the project's monitoring of these improvements in future reviews. GAO recommends NASA update the project's joint cost and schedule confidence level analysis. NASA concurred with the recommendation made in this report.