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i

43–093 2008

[H.A.S.C. No. 110–140]

HEARING

ON

NATIONAL DEFENSE AUTHORIZATION ACT

FOR FISCAL YEAR 2009

AND

OVERSIGHT OF PREVIOUSLY AUTHORIZED

PROGRAMS

BEFORE THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

AIR AND LAND FORCES SUBCOMMITTEE HEARING

ON

BUDGET REQUEST FROM THE UNITED

STATES TRANSPORTATION COMMAND

AND AIR FORCE MOBILITY AIRCRAFT

PROGRAMS

HEARING HELD

APRIL 1, 2008

(II)

AIR AND LAND FORCES SUBCOMMITTEE

NEIL ABERCROMBIE, Hawaii, Chairman

JOHN SPRATT, South Carolina

SOLOMON P. ORTIZ, Texas

SILVESTRE REYES, Texas

ADAM SMITH, Washington

MIKE MCINTYRE, North Carolina

ELLEN O. TAUSCHER, California

ROBERT A. BRADY, Pennsylvania

JIM MARSHALL, Georgia

DAN BOREN, Oklahoma

HANK JOHNSON, Georgia

JOE SESTAK, Pennsylvania

GABRIELLE GIFFORDS, Arizona

KENDRICK B. MEEK, Florida

KATHY CASTOR, Florida

JIM SAXTON, New Jersey

HOWARD P. ‘‘BUCK’’ MCKEON, California

JEFF MILLER, Florida

JOE WILSON, South Carolina

FRANK A. LOBIONDO, New Jersey

TOM COLE, Oklahoma

ROB BISHOP, Utah

MICHAEL TURNER, Ohio

PHIL GINGREY, Georgia

CATHY MCMORRIS RODGERS, Washington

GEOFF DAVIS, Kentucky

W. TODD AKIN, Missouri

DOUG LAMBORN, Colorado

HEATH BOPE, Professional Staff Member

LYNN WILLIAMS, Professional Staff Member

BEN GLERUM, Staff Assistant

(III)

C O N T E N T S

CHRONOLOGICAL LIST OF HEARINGS

2008

Page

HEARING:

Tuesday, April 1 2008, Fiscal Year 2009 National Defense Authorization

Act—Budget Request from the United States Transportatioon Command

and Air Force Mobility Aircraft Programs ......................................................... 1

APPENDIX:

Tuesday, April 1, 2008 ............................................................................................ 45

TUESDAY, APRIL 1, 2008

FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST FROM THE UNITED STATES TRANSPORTATION COMMAND AND AIR FORCE MOBILITY AIRCRAFT PROGRAMS

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Abercrombie, Hon. Neil, a Representative from Hawaii, Chairman, Air and

Land Forces Subcommittee ................................................................................. 1

Saxton, Hon. Jim., a Representative from New Jersey, Ranking Member,

Air and Land Forces Subcommittee ................................................................... 4

WITNESSES

Lichte, Gen. Arthur J., Commander, Air Mobility Command, U.S. Air Force ... 10

Payton, Hon. Sue, Assistant Secretary of the Air Force for Acquisition ............. 6

Schwartz, Gen. Norton A., Commander, United States Transportation Command, U.S. Air Force ........................................................................................... 8

APPENDIX

PREPARED STATEMENTS:

Lichte Gen. Arthur J. ....................................................................................... 49

Payton, Hon. Sue .............................................................................................. 62

Schwartz, Gen. Norton A. ................................................................................ 69

DOCUMENTS SUBMITTED FOR THE RECORD:

[There were no Documents submitted.]

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:

Mr. Abercrombie ............................................................................................... 97

Mr. Bishop ......................................................................................................... 107

Ms. Bordallo ...................................................................................................... 104

Mr. Hayes .......................................................................................................... 105

Mr. Hunter ........................................................................................................ 103

Mr. Miller .......................................................................................................... 106

Mr. Saxton ......................................................................................................... 104

(1)

FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST FROM THE UNITED

STATES TRANSPORTATION COMMAND POSTURE AND

AIR FORCE MOBILITY AIRCRAFT PROGRAMS

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, AIR AND LAND FORCES SUBCOMMITTEE, Washington, DC, Tuesday, April 1, 2008.

The subcommittee met, pursuant to call, at 1 p.m., in room 2118,

Rayburn House Office Building, Hon. Neil Abercrombie (chairman

of the subcommittee) presiding.

OPENING STATEMENT OF HON. NEIL ABERCROMBIE, A REPRESENTATIVE FROM HAWAII, CHAIRMAN, AIR AND LAND

FORCES SUBCOMMITTEE

Mr. ABERCROMBIE. Hello, everybody. Thank you for coming

today.

This is a hearing on the posture of the United States Transportation Command (TRANSCOM) and the Air Force mobility aircraft

program.

Today, the Air and Land Forces Subcommittee meets to receive

testimony from Air Force officials on the posture of the United

States Transportation Command and the status of Air Force mobility aircraft programs.

Our panel of witnesses today includes the honorable Sue Payton,

Assistant Secretary of the Air Force for Acquisition.

Welcome and aloha to you, Ms. Payton.

Secretary PAYTON. Thank you.

Mr. ABERCROMBIE. General Norton Schwartz, commander of the

United States Transportation Command.

Nice to see you again, General. Aloha.

And General Arthur Lichte, commander of the Air Force Mobility

Command (AMC).

Aloha to you, General.

Three main issues the subcommittee will strive to understand,

three main issues, although some people may think that the only

issue facing the Air Force at this time in terms of acquisition is the

continuing saga of the tanker, which we will not be concentrating

on today.

If there are questions in that regard, Ms. Payton, am I correct

that you would be quite willing to sit with anybody and speak to

those who may want to comment? But I would prefer today that

we go on with the substance of the other elements that are at

issue.

Secretary PAYTON. Yes, sir.

2

Mr. ABERCROMBIE. Does that make sense?

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. And I do want to thank you for the briefing

that we had, which I feel exercised the—I almost said exorcised,

but exercised all the relevant territory that needed to be traversed

on this, without going into the proprietary—past the proprietary

boundaries, and I do thank you for that.

Secretary PAYTON. Thank you.

Mr. ABERCROMBIE. And you would be quite willing to have that

kind of discussion with any member that desires it, if they were

not able to be there, correct?

Secretary PAYTON. Yes, sir. Yes, sir.

Mr. ABERCROMBIE. Okay. The issues then I am hoping that we

will deal with today, the Department’s mobility requirements and

aircraft inventory for both short and long-range airlift aircraft.

I am going to go over this. We have your testimony, obviously,

but I want you to know where I think we are going to zero in, and

you can perhaps attune your summary remarks in this area.

The mobility requirements, the short and long-haul airlift aircraft, the degree to which the projected budget meets the airlift requirement—this is very important to us—and the Air Force requirements and operational needs for the Joint Cargo Aircraft

(JCA) program, those three items.

Concerning the Department’s mobility requirements in the airlift

aircraft inventory, there appear, in my judgment, to be conflicting

views within the Department as to what the C–5 and C–17 inventory should be.

Ms. Payton, I am sure you know there are lots of discussion

about this in terms of keeping lines open and all the rest of that.

I don’t want to get into that, per se. That is not the question.

The question here is what you believe the C–5 and C–17 inventory should be.

TRANSCOM states 205 C–17s and 111 C–5s. Air Force planning

officials state 248 C–17s and 52 C–5s.

And, General Lichte, in your written statement, you indicate the

actual program of record of 189 C–17s and 111 C–5s doesn’t provide what is really needed. This is what I extract from your testimony.

There also appears to be a mixed message on what size the C–

130 fleet should be. On the one hand, the Air Force indicates that

395 C–130 aircraft are enough, but then eight C–130J aircraft are

included in the Air Force unfunded requirement list.

Regarding the C–17, currently, the last C–17 will be delivered in

June 2009, 14 months from now. There is a 34-month lead time for

key C–17 components.

The budget request does not include funding for additional aircraft—excuse me.

The budget request does not include funding for additional aircraft or funding for shutting down the C–17 production line. Yet,

15 C–17 aircraft or $3.9 billion are included in the Air Force unfunded requirements list.

You see where I am going, Ms. Payton and General Lichte.

Secretary PAYTON. Yes, sir.

3

Mr. ABERCROMBIE. I have to reconcile this in order to make recommendations that make some sense. And let’s set aside for the

moment, I hope, for our conversation’s sake, anything that is in the

papers of general circulation about what members are saying needs

to be done or not done or what is a good idea or what isn’t.

That is a political dimension that I hope we can avoid in the

sense of the premises of our discussion.

Six key Department of Defense (DOD) mobility studies were recently delivered to the committee—six. However, we understand

the mobility studies do not account for several key factors—this is

what we have derived from that—despite six different papers that

were read.

The end strength growth of 92,000 personnel for the Army and

the Marine Corps. Now, if I am wrong on some of these things, and

you do have studies that take this into account, we don’t have them

as yet and I am quite happy to get those or if you are in the course

of doing it, that is another thing, but we need to know that.

So let me cite the other factors. This is now with the mobility

study and in anticipation of what we need to recommend.

End strength growth of the 92,000 personnel—and I understand

that that is on paper right now. That is not necessarily here and

the time factor and all that may alter proposals in this area. But

nonetheless, that is what is proposed to this point.

Again, mobility requirements for the Army’s Future Combat System (FCS) and Army modularity. Again, believe me, you are not

going to have to make much of an argument to me that the Future

Combat System is, at best, problematic.

But for planning purposes and recommendation purposes, we

have to take this into account.

The determination by the Army that its FCS, the Future Combat

System, manned ground vehicles are too large to fit into a C–130

aircraft. Use of dedicated C–17s as an intra theater airlift role for

which they are extensively being used.

These are some of the factors we don’t think have been taken

into account in the studies we received or taken into account fully

in the studies we have received to this point.

All these factors call into question the value of the recently completed airlift studies, the value in the sense of being a comprehensive baseline against which to try and make our recommendations.

Concerning the final issue, we would like to better understand

the Air Force’s rationale for its procurement plans for the Joint

Cargo Aircraft.

According to our understanding of the conclusions of the Department’s airlift studies, the Air Force airlift capability would be better met by investing in other mobility aircraft rather than a Joint

Cargo Aircraft.

That is something I think we need to speak candidly about today,

if we can.

There also appears to be a significant unit cost difference between the Air Force and the Army version of the aircraft that

needs to be reconciled.

The Army says its version will cost $36 million and the Air Force

version reportedly is projected to cost $61 million per aircraft.

4

We, therefore, need to better understand the JCA requirement,

the Joint Cargo Aircraft requirement and the cost structure. It

seems the Pentagon first made the decision to procure the Joint

Cargo Aircraft and then did studies associated with the procurement decision, perhaps using outdated information or incomplete

information and perhaps now is trying to determine what the program costs are.

I am not trying to judge ahead of time. I am just giving you the

impression that can be made by reading what we have read to this

point.

There has been enough nodding of heads out there in my direction. So I presume I have said quite enough to give you pause for

thought.

And so with that, I would like to turn to my good friend and colleague from New Jersey, my mentor on this committee. So anything I say which makes sense he can take credit for, but he also

has to take the blame.

That is Mr. Saxton.

STATEMENT OF HON. JIM SAXTON, A REPRESENTATIVE FROM

NEW JERSEY, RANKING MEMBER, AIR AND LAND FORCES

SUBCOMMITTEE

Mr. SAXTON. Mr. Chairman, thank you.

Mr. Chairman, you have done a great job here opening this hearing this morning.

My opening statement reflects, to a large degree, some of the

points that you made.

Let me make one overarching point before I actually get into my

statement. That is that we are here today facing a situation, which

I have said before, and I strongly believe that we collectively, as

a government, have failed to provide the proper level of funding for

our military services across the board.

Today’s discussion will be reflective of that, in my opinion. We

simply can’t buy what we need, with the dollars that are made

available, to do what we need to do to support our warfighters and

to provide the level of national security that our country needs and

deserves.

The White House plays its part. Congress plays its part. The

input that we all get from various sectors, the Department of Defense plays its part. But the fact of the matter is that when we get

to the top line, it is too low.

It is not often that circumstances permit us to engage the operational commanders and the acquisition officials in the same

forum. So I would like to thank them all for being here today. We

appreciate it very much.

This is a unique opportunity. I would like to thank Chairman

Abercrombie for assembling this panel of witnesses for the subcommittee.

Global mobility is a key component of our national security. The

ability to globally project strategic national security capabilities

and to provide responsive support to the U.S. Government, multinational and nongovernmental logistical requirements is the heart

of USTRANSCOM.

5

Without this capability, the rest of our defense posture and our

ability to provide global humanitarian relief and support for our

friends and allies is largely irrelevant.

This simple fact is the reason that I have been such a longstanding advocate of the Department’s strategic airlift programs, especially, in this case, the C–17.

Mr. Chairman, you have often heard me express concerns, as I

did a minute ago, about the current trends in defense funding levels. All of the Department’s sustainment, modernization and recapitalization programs are severely constrained by the top line

that is inadequate to ensure our military is ready and equipped to

support the national military strategy.

Unanticipated cost growth in programs such as the C–5 Reliability Enhancement and Reengining Program, RERP, and the C–130

Avionics Modernization Program, AMP, only increase these challenges.

I am very glad to have Ms. Payton with us today to discuss the

challenges the Air Force is having in fielding required capabilities

to the warfighter on time and on cost.

As I have said, we simply cannot afford to do all the things that

we need to do and there is no longer room in the budget to compensate for poorly defined and poorly managed programs.

As you all know, Secretary Young recently certified to Congress

that the C–5 RERP program was essential to national security,

that there were no alternatives which provide equal or greater

military capability at less cost, and that the modified program cost

is reasonable.

The modified program includes performing the program of 52 C–

5Bs and C aircraft and only modernizing avionics on the remaining

59 C–5A aircraft.

The total program cost for the restructured C–5 program, modernization program is projected to be $7.7 billion for the 52 aircraft.

Now, I would like to bring your attention to the fact that in 2005,

the mobility capability study, which was used as an analytical

basis for determining the C–5 inventory requirement, states that

112, not 52, 112 modernized and reliability improved C–5s are required to make the Department’s strategic airlift requirements.

It is unclear to me how we are going to be able to meet the stated requirement for strategic airlift if we are going to perform reliability improvements to less than half of the C–5 fleet—52 aircraft.

Reliability equates to availability and availability renders capacity. This was the original thought behind the C–5 RUP program of

procuring C–17s. Improving the reliability of the existing C–5 fleet

was thought to be more affordable than to gaining the needed organic capability.

Now we are faced with a dilemma. We are only going to perform

reliability enhancements on 52 C–5s at a cost of $7.7 billion and,

at the end of the day, we are not going to achieve the minimum

organic strategic airlift force structure capability to support the

stated requirement of 33.95 ton-miles per day.

I noted that Secretary Young, in his testimony before this subcommittee last month, stated that the new tanker, the KC–45,

would be used to fill the remainder of the airlift gap.

6

General Schwartz, I hope that you will be able to expand on that

statement a bit and explain to us how a tanker, which, as you have

said in the past, is going to be used as a tanker first and is going

to also be used to offset the shortfall in strategic airlift requirements.

I raise these points because the Department’s fiscal year 2009

budget request does not include funding for any C–17s. No funding

in the budget request for 2009 means that the C–17 line will be

shut down unless this body takes steps to keep it open.

We now know that the C–5 modernization program will not meet

the requirements identified in the 2005 MCS. We must also account for the end strength increases of the Army, as the chairman

pointed out, and the Marine Corps, the mobility requirements of

the Army’s Future Combat System, as the chairman also pointed

out, and the fact that we are over-utilizing the current C–17 fleet.

In fact, I noted in one of our accompanying notes here that some

of the C–17 aircraft are already on restricted status.

That said, I would like to hear from each of our witnesses as to

their thoughts on the wisdom of shutting down the C–17 production line at this time.

Ladies and gentlemen, let me just conclude by saying I know this

is a top line problem, and I know that you are struggling to do your

jobs within the constraints that we and the White House seem to

be determined to impose.

And so I look forward to working with you to work through these

problems that the chairman outlined and that I reiterated, and we

look forward to hearing your testimony.

Mr. ABERCROMBIE. Thank you, Mr. Saxton.

Without further ado, then, and without objection, I hope we will

proceed to the panel’s testimony and then go into questions.

All the witnesses’ prepared statements are included in the hearing record.

So in light, Ms. Payton, of the opening comments, perhaps you

could address your summary remarks in that vein and we can proceed apace.

STATEMENT OF HON. SUE PAYTON, ASSISTANT SECRETARY

OF THE AIR FORCE FOR ACQUISITION

Secretary PAYTON. Yes, sir. Thank you very much.

Good afternoon, Chairman Abercrombie and Congressman

Saxton and all the distinguished members of this committee.

It is my distinct honor to appear before you today to testify on

the state of several Air Force mobility and tanker programs.

I am further honored to be joined by General Norton Schwartz,

the commander of U.S. Transportation Command, and General Arthur Lichte, the commander of Air Mobility Command.

I look to these gentlemen as my customers.

I look forward to discussing how the Air Force is committed to

modernizing and recapitalizing our aging aircraft to protect our

Nation and support our airmen, while providing the best value to

the American taxpayers.

In the interest of time, I will limit my opening remarks to the

KC–45A, the C–5 modernization, C–130J production, and C–27,

also known as the Joint Cargo Aircraft or JCA.

7

The KC–45A is our number one procurement priority. The KC–

45A tankers will provide greater overall capability than the current

inventory of 500-plus KC–135E and KC–135R tankers, which will

take several decades to replace.

With the average age of the fleet over 47 years, when the last

KC–135R is retired, it will be more than 80 years old. It is also absolutely critical for the Nation to move forward on this program

pending the findings of the GAO protest investigation.

The Air Force spent an unprecedented amount of time and effort

with the offerors, ensuring opening communications and a completely transparent process, and I am extremely proud of the KC–

45A acquisition team and I am certain that the Air Force selected

the best overall value to the warfighter—the taxpayer—based on

the competition evaluation factors.

With regards to our strategic airlift fleet, modernization of the

C–5 fleet remains an Air Force priority to meet combatant commanders’ requirements.

The last time I testified before a subcommittee of the Senate

with General Schwartz, Secretary Wynne had announced that the

C–5 Reengining Reliability Program was in a critical Nunn-McCurdy breach.

And I am very pleased to tell you that on February 14th of 2008,

the Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) certified the restructure of the C–5 RERP.

The certified production program consists of modernizing the remaining 47 C–5Bs and two C–5Cs.

A key component of the intra theater airlift modernization effort

is our C–130J. As of February 2008, we have fielded 63 of the 87

funded C–130J aircraft. The current C–130J multiyear procurement contract ends in fiscal year 2008 and we will be using suboptimized additional procurements through annual contracts to

procure future aircraft until a new multiyear program contract can

be negotiated.

As a joint Army-Air Force program, the JCA is uniquely qualified

to perform time-sensitive mission-critical re-supply. On February

29, Office of the Secretary of Defense (OSD) sent the required six

reports and certification required by Fiscal Year 2008 National Defense Authorization Act.

We are now prepared to move forward with this joint program.

I look forward to your questions on that.

The men and women in Air Force acquisition take great pride in

developing on our promise to deliver war fighting capabilities on

time and on cost.

I am very honored to represent them in front of this committee,

and I thank you again for the opportunity to be here. I look forward to any of your comments and questions.

[The prepared statement of Ms. Payton can be found in the Appendix on page 62.]

Mr. ABERCROMBIE. We will move now to General Schwartz.

8

STATEMENT OF GEN. NORTON A. SCHWARTZ, COMMANDER,

UNITED STATES TRANSPORTATION COMMAND, U.S. AIR

FORCE

General SCHWARTZ. Chairman Abercrombie, Congressman

Saxton, distinguished members of the committee, it is my privilege

to be with you today representing the more than 140,000 men and

women of the United States Transportation Command.

We are a supporting command and our number one mission is

provide outstanding support to the warfighter and our Nation by

rapidly delivering combat power and sustainment to the joint force

commander, providing the utmost care, moving our wounded troops

from the battlefield to world class medical treatment facilities and

redeploying our forces home to their families.

As the Department’s distribution process owner, USTRANSCOM

also leads a collaborative effort within the logistics community to

improve the broader DOD supply chain.

We execute our mission through the many fine people in our

component commands, the Army’s Military Surface Deployment

and Distribution Command, the Navy’s Military Sealift Command,

and the Air Force’s Air Mobility Command, led by General Art

Lichte, whom I am honored to have up here with me today.

The components provide the mobility resources and the expertise

necessary to execute military and commercial transportation, terminal management, aerial refueling, and global patient movement

through the defense transportation system.

Our effectiveness is the direct result of the hard work and dedication of these professionals, and I am grateful to you and all of

Congress for the needed support you provide.

I could not be prouder of the TRANSCOM team and our national

partners.

Today, we are supporting the global war on terror (GWOT) and

keeping our promises to the warfighter.

The delivery of much needed Mine-Resistant, Anti-Ambush Protected (MRAP) vehicles to protect our troops continues to be a top

priority. To date, we have delivered more than 4,900 MRAPs to the

U.S. Central Command (USCENTCOM) theater and by the beginning of next week, we will top 5,000.

Delivered almost exclusively by air in the early stages and as

production levels declined, we have reached a balance between air

and surface modes of transportation to optimize distribution.

We continue to advance to normalized transportation operations

throughout the Central Command. In 2007, we initiated the first

U.S. flagged commercial cargo flights into Afghanistan and Iraq

since combat operations began and increased the use of alternative

air and seaport facilities in the regions, thus broadening our capability to provide the best possible support to our warfighters.

We have also focused on improving the quality of life for our people. Through the Families First program, we are improving household goods shipments, as this recurring event directly effects the

lives of our service people and their families.

We now protect household goods with full replacement value. In

addition, the defense personal property system, the web-based software which will better facilitate household moves will be fully integrated into all shipping offices later this year.

9

We are also transforming the military deployment and distribution enterprise by incorporating best commercial practices wherever it makes sense.

Much like Fortune 500 companies, which realize savings through

the use of transportation management services, our Defense Transportation Coordination Initiative (DTCI), in partnership with the

Defense Logistics Agency (DLA) and the services, will use a commercial transportation coordinator to help manage a significant

portion of DOD routine freight movement.

We are currently implementing DTCI at three Continental

United States (CONUS) sites and, in fact, the first shipment occurred yesterday at Puget Sound, and we are encouraged by the potential savings and improved support we can provide as DTCI expands to additional sites throughout the coming year.

It is through a combination of military and commercial capabilities that USTRANSCOM fields a transportation and distribution

system that is unmatched anywhere in the world.

As we look to the future, rapid global mobility will continue to

be a key enabler and ensuring the appropriate mix of lift assets is

vitally important to the mission.

My top acquisition and airlift recapitalization priority is our

tanker fleet. I am encouraged that the KC–X is now under contract, albeit under protest, and the Air Force will proceed with this

very important procurement program consistent with the pending

determination by the Government Accountability Office (GAO).

The KC–X will provide multipoint refueling, significant cargo

and passenger carrying capability and appropriate defensive systems and it will be a game-changing platform for the future of global mobility.

I am also encouraged by the Department’s decision to certify the

C–5 modernization program. The Nation needs the outsized and

oversized lift capability provided by a reliable C–5 as a complement

to the C–17.

We are optimistic that the newly certified modernization program will deliver the needed reliability and performance to make

the C–5 a more productive platform.

With these modernized C–5s, I remain convinced that the 205 C–

17s, 111 C–5s and commercial capacity provides the right balance

to meet our strategic mobility requirement.

Despite our very substantial military force structure,

USTRANSCOM will always depend on a mix of government-owned

and commercial assets. We should guard against overbuilding the

organic airlift and sealift fleets, which could place our longstanding

commercial partnerships at risk.

A critical national capability for projecting military power and

sustaining forces is a viable Civil Reserve Air Fleet. The continued

success of craft relies upon the strength of our U.S. flagged airlines.

We are, however, looking toward the post-Operation Iraqi Freedom (OIF) timeframe, when lift requirements will decrease substantially. Given that eventual reality, we are looking at innovative

ways, such as the craft assured business initiative, to encourage

participation, thus ensuring the long-term health of this program.

10

As we look to the future, two important studies will address increasing Army and Marine force structure, unit positioning, equipment modernization, including the Army’s FCS program, and other

changes that may alter or influence the lift demand signal.

These study efforts, with extensive TRANSCOM participation,

will deliver in January and May 2009, respectively.

I am grateful to you, sir, and the committee for allowing me to

appear before you today to discuss these and other important

issues. I thank you for the essential support that you provide in enabling our capabilities, and I look forward to your questions.

Thank you.

[The prepared statement of General Schwartz can be found in

the Appendix on page 69.]

Mr. ABERCROMBIE. Thank you.

General Lichte.

STATEMENT OF GEN. ARTHUR J. LICHTE, COMMANDER, AIR

MOBILITY COMMAND, U.S. AIR FORCE

General LICHTE. Mr. Chairman, Mr. Saxton, distinguished committee members, thanks for the opportunity to appear before you

today.

As a total force team of over 133,000 active duty, Air National

Guard and Air Reserve mobility airmen, Air Mobility Command is

a proud member of the United States Transportation Command

joint team, and we are proud to provide global reach to our nation’s

warfighters through airlift, air refueling, global patient movement,

and air base opening.

I am extremely pleased by what the committee has accomplished,

what the command has accomplished, and we continue our focus on

winning today’s fight, taking care of our people and preparing for

tomorrow’s challenges.

Perhaps the most notable was the recent Air Force announcement for the development and procurement of up to 179 KC–45A

tanker aircraft. Although the process of recapitalizing our entire

tanker fleet will take three decades and require a long commitment, this is a great first step toward retiring our geriatric Eisenhower era KC–135s, a first step that will foster future generations

of mobility airmen to be able to continue their great support of the

joint warfighter and United States Transportation Command’s

global mission.

As the Air Force’s number one acquisition priority, the new tanker is vitally important to our national security. As the combat enabler for global vigilance, reach and power, it will be able to carry

more fuel and more cargo and more passengers than the KC–135

that it is replacing, and it will be able to refuel joint and coalition

aircraft on every mission.

Likewise, we received good news on the certification of the C–5

reliability enhancement and reengining program and the selection

of the C–27 as the new Joint Cargo Aircraft.

Even though these announcements did not receive the same visibility as the KC–45, they are still critical to AMC’s support to our

nation.

11

Fully modernizing a total of 52 C–5s will enhance the capabilities of our nation’s largest airlifter, increase its reliability rates,

and allow us to operate at reduced cost.

And on the other end of the airlift scale, the C–27 Spartan will

satisfy the requirement for a platform that can deliver to that last

tactical mile.

But the good news in Air Mobility Command is not just about

modernization and recapitalization. We continue to take care of airmen and not just airmen, but soldiers, sailors and Marines, as well.

Through airlift and precision airdrop, we have pulled the supply

chain vertically up out of the threat and eliminated the need to

place over 12,000 soldiers, sailors, airmen and Marines in harm’s

way on the road to Iraq and Afghanistan in each of the last 4

months.

And for those who must be on the front lines to perform their duties, AMC has airlifted over 2,600 mine-resistant ambush-protected

vehicles, MRAPs, to Iraq on C–17s and contract carriers as part of

United States Transportation Command’s joint effort to rapidly deliver these high priority systems by both sea and air.

The command also continues to press forward with the improvements to the aeromedical evacuation system and, as many of you

heard last fall, when Resolution 640 was presented on the floor of

the House, our aeromedical evacuation system continues to work

miracles for Americans wounded while answering our nation’s call.

Both of our new airframes, the KC–45A and C–27, will support

this absolutely vital aeromedical evacuation.

In a true example of joint service synergy, I am proud to say that

if one of America’s sons or daughters gets wounded in Iraq, is able

to make it to the theater hospital in Balad Air Base, they have a

98 percent chance of survival, thanks to our amazing medical care

system.

And within that system, it is our aeromedical evacuation heroes

who provide those wounded joint warriors their lifeline back home.

It is a moral imperative and it is a promise we intend to keep for

everyone who serves.

As we look to the future and prepare for tomorrow, there are

plenty of challenges on the horizon, challenges we must meet to ensure the next generation of airmen and joint warfighters can continue to deliver America’s clenched fist to its enemies or its outstretched hand to those in need around the world.

The continued wear and tear on our airframes remains a major

concern. While our C–130 center wing box replacement program is

making great progress, we are beginning to see wear and tear and

other issues on other airframes, as well.

Even though the C–17 is a fairly young aircraft, we are beginning to see cracks in the fuselage caused by repetitive fatigue from

thrust reverses, and the C–5 fleet is not immune either, with

cracks appearing on the top of the aircraft and in the structure

near the forward cargo door hinges.

We are pressing ahead with fixes for these issues, but others will

undoubtedly appear in the future as the fleet remains heavily

tasked to meet mission requirements.

12

We are also facing looming deadlines to complete avionics upgrades so we can meet global air traffic requirements and continue

to access congested airspace worldwide.

Thus far, we have been able to modify a considerable portion of

our fleets, but we have a lot to do before the restrictions begin to

impact operations in the year 2015.

In conclusion, I would like to say that I am proud to be both a

mobility airman and a member of the United States Transportation

Command’s joint team.

From direct support of the warfighter on the battlefield to humanitarian airlift and response to natural disasters, our air mobility fleet is and will continue to be a critical component of America’s

strategic capability.

I am humbled to represent the 133,000 mobility airmen of the

command, as we support United States Transportation Command

in demonstrating our national resolve, delivering combat power,

and saving lives.

And, sir, I am ready for any questions you may have.

[The prepared statement of General Lichte can be found in the

Appendix on page 49.]

Mr. ABERCROMBIE. Thank you very much, General.

For today’s hearing, for our members, we are going, as you know,

from hearing to hearing, reversing the order, starting for those who

have least seniority on the way up and then the regular seniority

on the way down.

We are at regular seniority, moving sideways, I guess, is more

accurate.

So I have some questions, but I will start with Mr. Spratt.

Mr. SPRATT. Thank you very much for your testimony.

I am interested in the fate of the C–5. Forty years ago, I was

working in the Department of Defense dealing with the acquisition

of the C–5A, which was a checkered history, to say the least, and

we still have many of the same problems.

It is kind of the symptom of the system.

Madam Secretary, you were very complimentary of the acquisition workforce that you have under your command, but we have

got, in the case of the C–5, an astounding increase in unit cost over

and above the Average Procurement Unit Cost (APUC)—I don’t

know how you pronounce that acronym—68 percent from the original baseline.

How do you account for that and is that an acquisition problem

or does that have more to do with the climate in which all acquisition is transacted today?

Secretary PAYTON. Thank you very much for the question, Congressman Spratt.

I believe it is a combination of both. The day that I walked in

to take over this position, I took a look at the funding profiles for

the programs that were heavily in cost overrun, 50 percent or

more, and I realized that to a program, they had been baselined

at a cost way too low.

They had been baselined way too early, before we really understood what the cost of the program would be.

13

Relative to C–5 RERP, we have also had an increase in the cost

of titanium, about 503 percent since 2004, and C–5 RERP is very

titanium dependent because it is mostly an engine program.

So the titanium that was needed to really make the engines and

put them on the aircraft had gone up. Material costs had gone up.

Labor rates had gone up.

So I would say that we baselined the program too early, before

we had done adequate prototyping, and we did not pick the right

cost number. We picked a 30 or 40 percent confidence level to begin

with instead of an 80 or 90 percent.

I have since put out guidance and any program that comes before

me will be funded at a level of 80 percent confidence that our acquisition people will be able to succeed.

So it is a combination of a lot of things going wrong. On the C–

5 AMP program, having issues with that, we kicked the can down

the road. C–5 RERP was dependent on C–5 AMP.

So the acquisition strategy, I believe, on that was flawed and I

do believe we have had some cost escalation in materials and in

labor hours.

Mr. SPRATT. Do I understand the background material correctly

to say that you have taken the RERP and taken the reliability out

of the RERP, so that basically we have got a reengineering, but not

the reliability components?

Secretary PAYTON. No, sir. We still have the reliability component in there. That was up for discussion, but that was thrown off

the bus. We are definitely having a reengining and reliability improvement to that program.

I think there are 70 items that are going to be improved in the

reliability.

Mr. SPRATT. Now, by my account of your testimony, there are

about 111 C–5s left.

Secretary PAYTON. Yes, sir.

Mr. SPRATT. And we have 170 C–17s.

Secretary PAYTON. I believe there are 190 currently in the program of record.

General SCHWARTZ. It is 171 delivered, sir.

Mr. SPRATT. It is 171.

General SCHWARTZ. Yes, sir.

Mr. SPRATT. And you indicate, however, that the Air Force continues to support the acquisition of this airplane. You just don’t

have the money to pay for it, but you are sending us a signal that

if we can find the money, that you would be agreeable to a continuation.

Am I reading between the lines correctly here?

Secretary PAYTON. Based on the acquisition decision memorandum of the 14th of February, we will reengine and improve the reliability on 52 C–5s that will become C–5Ms and the other 59 C–

5As will be AMP’d.

The acquisition strategy right now is to go ahead and improve

the avionics on those As and to, obviously, do the avionics and the

reengining reliability on the Bs and Cs.

Mr. SPRATT. The testimony of one witness was to the effect that

I think the U.K. and Australia and the Canadians have bought the

14

C–17, and we kept the F–16 line going despite the fact that the

DOD was recommending we stop the C–17 line.

The market overseas developed to take up a lot of the production

in San Antonio.

Is there a possibility here that if we can keep the C–17 line

going, it might be something that our allies and others around the

world might want to procure, as well?

Secretary PAYTON. Sir, I believe that is what I am hearing, but

maybe General Schwartz would have more information on that.

General SCHWARTZ. Sir, as you are aware, the Canadians are in

for four, the Aussies for four, the Brits a total of seven.

There are Gulf nations that have expressed interest probably in

excess of four and the North Atlantic Treaty Organization (NATO)

allies have indicated an interest in three.

It is absolutely clear to me that there is an appetite for these machines outside the DOD procurement profile and it requires aggressive marketing on behalf of the manufacturer to see that those opportunities are realized.

Mr. SPRATT. Thank you for your testimony.

Mr. ABERCROMBIE. Thank you very much.

Just to make clear, General Schwartz, are you saying that the

question of shutting down the line has to be seen in the context of

outside sales as opposed to shutting down the line simply because

the Air Force is not necessarily requesting nor requiring more?

General SCHWARTZ. Sir, I am saying that it is a strategy for extending the production line and it is one that——

Mr. ABERCROMBIE. For the corporation that is involved.

General SCHWARTZ. And it is something that should be aggressively pursued.

Mr. ABERCROMBIE. Thank you.

Mr. Saxton.

Mr. SAXTON. Thank you, Mr. Chairman.

And, again, thank you for being here with us. We appreciate it

very much.

The C–5 program, first, let me say that I have been a longtime

supporter of the C–5 modernization program. In fact, some years

ago, the Air Force was kind enough to make a C–5 available to us

out at Andrews Air Force Base and a group of us went, when the

program was just a proposal, to actually get a feel for what the program was like and what the requirements would be, et cetera.

And at the time, we were going to modernize, I think, just the

C–5Bs, if my memory serves me correctly, and then one thing led

to another, some activity in Congress and in other places and the

program—a study was put in place for the potential modernization

of the entire fleet of 111 airplanes.

And when that study looked promising, we concluded that we

could meet our airlift requirements with a fleet of less than 200—

I have forgotten what the number was exactly—C–17s and 111

modernized C–5s.

And then another turn in the road occurred recently and the cost

of modernizing 111 C–5s became too much for a measuring stick

called Nunn-McCurdy.

And so now we have a program where we are back where we

started to modernize 52 Bs and AMPing, I guess, the 59 As.

15

And in my opening statement, I posed the question, if 111 modernized C–5s and less than 200 C–17s gave us the required amount

of lift, how does 52 modernized Bs and 59 As, with new electronics,

which doesn’t, from what I understand, improve capability in terms

of reliability, how does this give us the same amount of lift or how

does this help us—how does this make it possible for us to meet

our requirements, our lift requirements, when we concluded previously that we needed the entire fleet modernized?

Mr. ABERCROMBIE. Before you answer, this is essentially what

General Lichte is saying in his testimony, as well.

What Mr. Saxton has put forward as the proposition, as the

premise, is also the testimony that has come to us. I think that is

a fair summary on page four under C–5 reliability and reengineering program.

General SCHWARTZ. Congressman, the bottom line is that the

original baseline was 180 and 111 modernized aircraft. That is,

modernized C–5 aircraft.

The numbers give you 33.95 ton-miles with 205 and 111 with the

C–5Bs, the 52 aircraft that you addressed, being reliability improved.

So in part, that is where the number which Senator Levin solicited from me last fall came from.

General LICHTE. Mr. Saxton, if I might add, and it goes to what

the chairman was asking about, mobility capability studies, as

well.

The 33.95 that we talk about were slightly short, but we are

within shooting distance.

The problem, as you point out, with the studies, we have a lot

of studies and we haven’t captured everything, because this is a

changing and dynamic world.

So we have not captured what we would say keeps moving the

goalpost for us, that we have to go back and keep readdressing the

numbers.

We haven’t captured that increase in the Army. We haven’t captured the fact that the C–130 is no longer a platform that Future

Combat Systems will fit on.

So, therefore, it leads to a C–17 or C–5 platform and you have

to ask the question on a concept of operations. If you have to go

into unimproved or semi-improved runways, it leads you back to C–

17.

And so while we are at the bottom of the range—and, by the

way, the study has provided a range that we shoot for, but on every

study, we end up being forced to the bottom of that range, which

means you assume some of the risk that you would have if you increase the numbers all the way up.

So as General Schwartz points out, the 205 C–17s and 111

makes that 33.95 million ton-miles per day, as we know it today,

but doesn’t take into account some of the other studies.

So while we accept the numbers that we have in the program

and in the President’s budget right now, my feeling is, as the commander of Air Mobility Command, I would like to see us keep the

C–17 production line open and I would like us to get the results

of some of those studies back in with the increased amount of information, which is undergoing right now through Transportation

16

Command and the MCRS, mobility capabilities and requirements

studies, so that we can refine that number and make sure we have

it right.

Mr. SAXTON. General, when you say that the requirements

change from time to time, I guess one of the changes that we didn’t

anticipate was the need to deploy MRAP by air over the past

months.

That was certainly something that was not anticipated.

General LICHTE. That is true. But, of course, the studies we look

at are wartime and, obviously, the MRAPs are part of wartime, in

all the war plans for the initial surge and especially in that early

30 days where we worked very closely with Transportation Command to determine whether we will go by air or whether we will

go by land or by sea.

Mr. SAXTON. Now, it is our understanding that in planning for

future airlift requirement, that the requirements involving the Future Combat System have not been considered in arriving at the

conclusions that the Air Force has come to relative to the lift that

we need.

Mr. Abercrombie and I, on Friday, are going to go to see some

demonstrations of FCS, because it is a reality and if it is a reality

and if history is a good teacher, we will have the need to deploy

FCS in the foreseeable future.

My information is that FCS will begin to come online as early as

2010, but will be fully operational—will have initial operational capability in 2015, 7 years from now.

And, yet, the Army has not put forth the requirement, from what

I understand, for this deployment and, therefore, these matters involving FCS and its deployment have not been factored into the

need for lift.

Is that correct?

General SCHWARTZ. Congressman, the mobility capability study

2005 did not address FCS, because its window of analysis extended

through 2012 and, at the time, FCS was not delivering, certainly

in quantity, until 2017.

And as you are aware, the Army now has an interest in accelerating that timeline, as you indicated. And so the studies that we

have at the moment do not consider FCS, the mobility capability

and requirements study, as well as the McCaskill-Tauscher study,

which the Institute for Defense Analysis is doing, the latter January 2009 deliverable, the former in May of 2009 deliverable, will

include FCS requirements.

Mr. SAXTON. Thank you.

Thank you, Mr. Chairman.

Mr. ABERCROMBIE. Just so we are clear on that, before we go to

Mr. Smith.

When you say FCS requirements, there is a whole slew of proposals there. What we are going to see doesn’t involve the kind of

equipment that won’t fit right now, right?

General SCHWARTZ. Sir, we are talking about vehicles which are

C–17 compatible.

Mr. ABERCROMBIE. Right. And they say are ready now?

17

General SCHWARTZ. Sir, they are not ready now, but we have dimensional data which is from the manufacturer and so on and we

will do our best analysis based on the best information.

Mr. ABERCROMBIE. So that is a separate issue to be settled, right,

on when these actually are deliverable in a form that actually requires an airlift capability?

General SCHWARTZ. Of course.

Mr. SAXTON. If I could just take 30 seconds, Mr. Chairman.

Mr. ABERCROMBIE. Yes.

Mr. SAXTON. General Schwartz was very articulate about explaining why the FCS requirement has not been included in the

current set of requirements for airlift, and I just want to make that

clear for the record.

Is that right, General?

General SCHWARTZ. They have not been factored in, that is correct.

Mr. ABERCROMBIE. Mr. Smith.

Mr. SMITH. Thank you, Mr. Chairman.

A quick question on the C–17. Forgive me, there are a lot of facts

floating around on this. I want to make sure I am clear on this.

So you are not planning on purchasing any more, but I think the

viewpoint of most is that, at some point, we will likely need more

C–17s. So the concern is in keeping the line open.

Is that accurate? Are you envisioning a point in the future where

you will need more C–17s, but just not right now and just not within the funding? Is that an accurate assessment of what is going

back and forth here?

General SCHWARTZ. That is not necessarily my view, sir. The secretary and General Lichte can sort of address their view.

Mr. ABERCROMBIE. Would you pull the microphone a touch closer,

please?

General SCHWARTZ. I think it is premature to suggest that we require additional 17s as far as the eye can see, sir.

Mr. SMITH. I wasn’t saying as far as the eye can see. I was just

saying more than we have now. But you are saying it is still possible that we might not even need more.

General SCHWARTZ. As I have articulated, sir, I think the right

number of C–17s is 205, which is 15 short of where the program

is right now.

Mr. SMITH. Anything different?

General LICHTE. I would add, as Secretary Wynne and General

Moseley have mentioned, that once we determine where the requirements are and as we have talked about with the chairman, we

are at the bottom of the requirements.

So as we hear about Future Combat Systems, as we know about

some increase in the size of the Army, it will depend on where

those soldiers are positioned.

If they are part of the force that we need to take their equipment

forward or back, that may drive a higher requirement, and we are

at the bottom of the scale.

So if that drives us up, it may require that we look at it.

Mr. SMITH. That answers—sorry—other questions to our

timeline.

18

I want to ask you two questions about the tanker decision. There

is a lot certainly that has come out of it, but I still have more to

learn. I can’t speak for anybody else on the panel.

And I guess one of the biggest questions I have is in terms of assessing the risk and reliability of the delivery schedule in assessing

for or against two competitors, which seem to, to some degree, ding

the 767 requirement.

I know there are a lot of different pieces to this, but one of the

biggest pieces certainly is having the plant to build the tanker,

which the 767 has and has been building, whereas the 330 has

been contemplating building a new plant in Alabama, no guarantees of workforce there, at least not the same guarantees that you

have with the people who have already been building it.

So it seems hard for me to understand that that would be a negative against the 767 proposal in terms of their reliability versus

a plant that hasn’t even been built yet.

I am wondering if you could explain that.

Secretary PAYTON. Yes. Congressman Smith, thank you for the

question.

I would love to go to a closed session. We did look at the facilities

implication and I would be more than happy to describe any of that

with you, but not in an open forum.

Mr. SMITH. The other question is on the changes in the assumptions that have been made, and I have been seeing different answers to this in a variety of different forums, none of which have

been terribly satisfactory, because certainly there are many different changes that are made on a procurement this size and you

can get so buried in the details.

But the bottom line is what the Air Force seemed to be asking

for in the 2002 timeframe is different than what they ultimately

wound up asking for. I think we would all agree upon that.

I mean, to the point where last year sometime, there was considerable scuttlebutt that the 330 proposal, they were saying, ‘‘We

might not make one, given the requirements that are put here. We

think they are skewed unfavorably toward 767.’’

And then they went, gosh, in a year’s timeframe, from having a

set of requirements—and I know that is not the right word here,

because you didn’t actually formally change the requirements, but

there were changes within the proposal requests.

They went from saying, ‘‘Gosh, we might not be able to compete

at all’’ to getting the contract. And the big difference here is medium-sized versus large, but there are others.

What changed between 2002 and 2008 in terms of those requirements that took it in such a radically different direction?

Secretary PAYTON. Well, to start with, I would have to take for

the record the question about what changed between 2002 and the

point at which we put the official RFP out in January of——

Mr. SMITH. Things changed after that, too.

Secretary PAYTON. I would be more than happy to address what

changed prior to the request for proposal (RFP) going out and then

the one thing that changed, and it wasn’t a requirement, but it was

a piece of the data that goes into a model.

So I could answer that part, and I think that General Lichte may

want to add to it.

19

The main thing we wanted to make sure we were doing in the

integrated fleet aerial refueling assessment was to be able to compare one offeror to the KC–135 and compare the other offeror to

the KC–135 in a very high stress wartime environment that would

be realistic.

So as we were reviewing the datasets that would feed into the

model, it became apparent that in a time of war, you do have the

aircraft parked closer together on the ramp. There is an Air Force

instruction, I believe, that says no closer than 25 feet.

And you do start parking the aircraft on ramps that can handle

heavier weight first. And so the things that were improved in the

datasets were making the actual data more realistic for a wartime

scenario.

Now, at the time that we did this, we had no idea what either

offeror was going to bid. We were being told that we might get two

bids from Boeing.

So those things were changed just to make more realistic the scenario.

There was one thing that was changed after the RFP was released and that was that we discovered there was one more parking ramp at Bahrain than the model was allowing as a data input.

And so that was added for more realism, as well.

But at no time were any datasets changed to try to skew or

unlevel the playing field.

And I don’t know, General Lichte, if you have anything you

might want to add.

Mr. SMITH. I would yield to the chairman. I am out of time. I

don’t want to take too much time.

Mr. ABERCROMBIE. Why don’t you make your remark, General,

and then we will conclude this segment.

General LICHTE. Yes, Mr. Chairman.

What I would say, because, as the operator, we helped establish

the requirements and the KC–X requirements were set and established by the Joint Requirements Oversight Council, the JROC, in

November of 2006 and it didn’t change after that.

And the evaluation criteria were established when the RFP went

out on 30 January 2007 and we didn’t change after that. The items

that Ms. Payton referred to, there were five things that affected the

Integrated Fleet Aerial Refueling Assessment (IFARA), but they

were all operational realities.

Mr. ABERCROMBIE. Can you say what that is, for the record?

General LICHTE. The five things, four of them were made actually prior to the RFP going out, with the wingtip clearance that Ms.

Payton alluded to.

In peacetime, we use about 50 feet between aircraft. In wartime

and what we are using today, it is 25-foot wingtip clearance.

So we decided that is what we should be. That is the fair way

of looking at it. So with wingtip clearance, the ramp utilization

with regard to pavement stress, and that is the same thing we do

as we assess airfields.

Obviously, we are going to have a mix of aircraft, tankers, fighters, bombers, and so we assessed where the tankers will be. So we

looked at that and put it out.

20

One of the things that came up was tanker receptacle credit. On

the tanker aircraft, the new KC–X can take gas, as well as give

gas. Our KC–135s can’t take gas. There is a flexibility that that

gives a commander by being able to take gas.

So we had to evaluate what is the credit we should give to someone who puts a receptacle on the tanker.

And so that was one of the things that came up, and then a realistic tanker ground time. There was discussion whether you just

give a ground time to the tanker, how much time it takes to just

pump fuel on it.

But for all our aircraft in the entire system, we have published

ground times, because there is a lot more than just pumping gas.

Crew chiefs have to be ready. The latrines need to be serviced.

There are a lot of other things that go into make an aircraft

ready. So we used our standard time for tankers, which is four

hours and 15 minutes, and we used that and applied it across the

board.

And then the last one was, as Ms. Payton alluded to, the one

base that we didn’t have the ramp right at Bahrain and that was

changed and was given to all the competitors in advance, and we

offered to answer any questions about the requirements on that.

Mr. SMITH. Thank you.

Thank you, Mr. Chairman. I appreciate it.

Mr. ABERCROMBIE. Ms. Payton, will you make arrangements to

meet with Mr. Smith or his designee about the factory question?

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. We will move to Mr. Akin now.

Mr. AKIN. Thank you, Mr. Chairman.

Mr. ABERCROMBIE. Just one thing. Excuse me, Todd.

Again, so I make it clear, I didn’t want to use Mr. Smith’s time,

but there was an implication there, and I wanted to make certain

that, for the record, we have it.

General Schwartz, if I understood you correctly and if I understood the answers to Mr. Smith, is it the Air Force position—and

perhaps I need to address it to you, Ms. Payton.

Is the Air Force position that if 15 more C–17s come into the picture, if you get to 205, which is approximately 15 more, 13 to 15

more C–17s, that is sufficient unto the day?

The reason I ask that question is—I am not trying to trick you—

the reason I ask the question is under your unfunded requirements

list, you list 15 C–17s for almost $4 billion.

So the question, if you are answering—if I understood what has

been directed to Mr. Smith to this point, if 15 come in, for example,

say the Appropriations Committee deals in a supplementary or

even in this bill with 15 more, then will you remove that from your

unfunded requirements list?

Secretary PAYTON. I think that is a General Schwartz question.

General SCHWARTZ. I don’t think it is. The bottom line is 205 is

the right top line, in my view.

Mr. ABERCROMBIE. Yes. I understood you and General Lichte

have 205 as the number, is that correct?

General LICHTE. That is correct, as I know all the requirements

today. So I still need, Mr. Chairman, that the numbers for the FuVerDate 22-MAR-2001 07:26 Aug 20, 2008 Jkt 043093 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\110-140\092250.000 HNS1 PsN: HNS1
21

ture Combat System be increased in the Army, all those things we

talked about earlier.

I need the results of that before I would be able to commit to a

final number, but 205——

Mr. ABERCROMBIE. Well, then, why are they on the unfunded requirements list?

General LICHTE [continuing]. And 111 brings us to the bottom of

that requirement capability.

Mr. ABERCROMBIE. I am still not quite exactly clear whether Mr.

Smith’s question has been answered.

Mr. SMITH. It has to my satisfaction, Mr. Chairman. The last

piece is the key piece. The requirements may well change based on

other things that are asked for by us or by DOD and if that happens and, all of a sudden, the Future Combat Systems requires airlift of a certain kind, then they may have to reevaluate it. It is in

flux, I gather that.

Mr. ABERCROMBIE. Do you understand why I am asking these

questions? Because we have drifted into a pattern of having a

budget and a defense bill and then something called an emergency

supplemental bill, which, all of a sudden, doesn’t have much to do

with emergencies and doesn’t have much to do with supplemental,

but has a whole lot to do with politics and a whole lot to do with

bouncing requirements back and forth, particularly where procurement is concerned.

And what it does is it throws a political element into it, particularly from the congressional side, which is easily criticized or easily

critiqued and probably criticized, as well, but, nonetheless, is almost inevitable when we get into this kind of situation where it is

tough for us to figure out exactly what the hell are you asking for.

Is silence assent in the Thomas Moore sense?

General SCHWARTZ. Mr. Chairman, the need is 205 C–17s. I do

not presume that those things that are yet to be assessed and concluded will add to that number. Some people do. That is not where

I am at.

Mr. ABERCROMBIE. I accept that. You understand regular order

gets severely compromised when there is an assumption that, well,

let’s not really worry about—I am not saying you are doing this,

but there is going to be a tendency to say, ‘‘Well, it really doesn’t

matter whether the studies are finished yet or when they do, we

will just toss it into the supplemental,’’ and all of a sudden, F–22s

are appearing and Joint Strike Fighters (JSF) and what have you.

It becomes a kind of procurement reserve.

General SCHWARTZ. One thing, sir, to make clear that if the decision is to build more than 205, then my best military advice to the

committee is that we look for trade space elsewhere in the fleet

mix.

So if you build above 205 C–17s, it means taking capacity out

elsewhere, which probably means C–5As. That is the trade space,

in my opinion.

Mr. ABERCROMBIE. This all presumes, by the way, that we don’t

ever change the way we procure, that we don’t ever get to capital

budgeting or any other system, that we just keep on going the way

we have been doing all along. Right?

22

Which would be the sensible way to do it, because absent changing the way we finance things, this is what we are going to face,

correct?

Todd, I am sorry to take the time, but I thought it needed to be

clarified.

Mr. AKIN. Thank you, Mr. Chairman, and I agree with you, I

think it did.

I was going to ask along the same lines, as well.

Currently, we have 171 C–17s, is that right?

General SCHWARTZ. A 171 delivered birds, yes, sir.

Mr. AKIN. And how many are on order then?

General SCHWARTZ. A 190 is the program.

Mr. AKIN. One-ninety.

General SCHWARTZ. Yes, sir.

Mr. AKIN. So if we don’t do anything else, if we follow the budget

that you are recommending, we are going to end up with 190.

General SCHWARTZ. That is the current program.

Mr. AKIN. And you are saying 205 takes you to the point where

you are totally comfortable that you will never need anything more

than 205 of them.

General SCHWARTZ. Sir, it takes me to the point where I think

the risks are reasonable.

Mr. ABERCROMBIE. It takes him to the point of retirement, Todd.

Mr. AKIN. Now, you are factoring in, General, the—I mean, you

have some sense of Future Combat Systems. You are in charge of

shipping things all over the planet. I mean, that is your command.

So you have a little bit of a sense, if we do this, this or this, you

have a feel for just the general proportional change that that might

be if something is bigger you are shipping or this or that, right?

General SCHWARTZ. Yes, sir, we do.

Mr. AKIN. And that is why you say that, with some level of confidence, you think that is just a good number and you would be

okay.

General SCHWARTZ. It is with a level of confidence and the key

thing here is, sir, we have more than one way to do things.

Mr. AKIN. Right.

General SCHWARTZ. Not everything goes by air.

Mr. AKIN. The next question I had was it said that on the C–

5As, you are putting avionics on those. You said that.

Now, was I mistaken? I thought the C–5As had a very, very low

reliability, that they are very old and that there is a whole lot of

maintenance on those. Is that true?

General SCHWARTZ. That is the case, sir.

General LICHTE. And, sir, the majority of the maintenance is

done on the engines. It is time to remove engines. So the reliability

enhanced and reengining program will help on the number that we

are RERPing.

Mr. AKIN. So when you talk about putting avionics on the C–5As,

does avionics mean engines?

General LICHTE. No, sir. It is the equipment in the cockpit that

allows it to fly in some of the airspace that some of that equipment

is required in.

Mr. AKIN. That is what I thought. So it doesn’t help the reliability.

23

General SCHWARTZ. Some.

General LICHTE. Only a little bit.

General SCHWARTZ. It does some. The issue here is obsolescence

and if we are going to continue to operate the C–5 even at its current 55 percent or so reliability.

Mr. AKIN. How many C–5As do we have now?

General SCHWARTZ. Sir, given the program, there will be 59 C–

5As.

Mr. AKIN. Fifty-nine. So, now, if you were trying to get the best

bang for the taxpayer’s buck, would it be better—this is just your

opinion, and I know I am putting you on the firing a little bit, but

that is what your job is, so it is okay.

Would you rather have the 59 C–5As or would you rather have

more C–17s? You need some C–5s because there are some things

that are just big that you need to haul, but you have got the Bs

and the Cs.

General SCHWARTZ. If money were no object, I would rather have

the C–17s, but it is not.

Mr. AKIN. So the reason for keeping any C–5As around is more

just the cost of the additional C–17s.

General SCHWARTZ. It is having a balanced force that can accomplish the tasks that we see that need to be done, and operating it

effectively and, yes, there is cost as a consideration.

Capacity is a consideration. Reliability is a consideration. Taking

that all into balance, 205, 111, was where we came out.

Mr. AKIN. The 111 includes then the 59As.

General SCHWARTZ. It does, sir.

Mr. AKIN. But you are saying if somebody wanted to do it a different way, if you got rid of some of the C–5As, you could put more

C–17s. You could mix that way, but it is a little bit more expensive,

you are saying, to go that route.

General SCHWARTZ. Substantially.

Mr. AKIN. And you are figuring new engines for the C–5As or

not?

General SCHWARTZ. No. Sir, there are a number of options, clearly, but the current position is, based on the certification for the

Nunn-McCurdy and on the C–5 program is specific to aircraft that

will become reliability—improved C–5Ms.

There are any number of options out there, to be sure, fewer C–

5As, more C–17s, RERP, all 111. There are a number of options,

but the place where we are at the moment is 205, 52 and 59.

Mr. AKIN. I guess another thing that has always been curious to

me, you say they are something like 50 percent reliable. At least

as I look at a number like that, I wouldn’t want to get in an airplane that is 50 percent reliable.

General SCHWARTZ. It doesn’t mean it is unsafe, Congressman.

What it means is that the airplane might not depart on time. It

might need maintenance for whatever reason.

We would not operate an aircraft that was unsafe.

Mr. AKIN. Well, I assumed that you wouldn’t do that. But I guess

when you have an unreliability factor in a plane, then you have to

sort of figure that if you really only have 50 of them, you have got

some number less than that, because you don’t know for sure they

are ready to go. Is that right?

24

General SCHWARTZ. You manage the fleet in a way that you acknowledge the fact that they are less reliable and you compensate.

For example, perhaps you schedule two to make one sortie.

Mr. AKIN. Am I out of time, Mr. Chairman?

Mr. ABERCROMBIE. Thirty seconds.

Mr. AKIN. Thirty seconds, okay.

Changing subjects here a little bit, on the question of the tanker

situation, I had a chance to sit in on——

Mr. ABERCROMBIE. I knew I shouldn’t have said that.

Mr. AKIN. I had a chance to sit in on the meeting. I guess it was

what you call the Secret level or it was a closed briefing on that.

I got the impression, just sort of as a takeaway, that the sense

was that one of the competitors felt that the Air Force was really

looking at a medium-sized plane and at least had that sense

enough that that is what they bid, and yet the parameters the way

the numbers and the algorithms worked out, there was an advantage to have a bigger plane.

The question that is not quite clear, in my mind, was there were

a series of sort of like you have to meet this parameter, you have

to meet that parameter, you have to meet the other.

Once you meet it, my understanding was there was no additional

benefit for exceeding the parameter.

Is that true or did you give extra sort of benefit to people who

exceeded what was required?

Secretary PAYTON. Yes, sir.

Mr. AKIN. Because on that point, it seems like that turns on the

question of whether or not the other contractor should have bid a

bigger plane, also, to have a big plane fighting a big plane instead

of a medium one and a big one.

Secretary PAYTON. Yes. Yes, sir. I appreciate the question.

The RFP was very clear that each offeror had to meet the minimum threshold in order to stay in the competition, in order to be

compliant at all.

If they didn’t meet the very minimum threshold of the requirement, if it was a key performance parameter, then they would be

unawardable.

Mr. AKIN. Right.

Secretary PAYTON. Now, it was also very clear that extra credit

would be given to the offeror who exceeded that threshold, but we

would not give any extra credit to someone who exceeded an objective, which was something way up high.

So relative to the RFP, it was very clear that we had no requirement for size, large or medium. We did have requirements to meet

capabilities and there would be extra credit given for exceeding

that minimum threshold.

And on three occasions, we did debrief each of the offerors as to,

of the 808 requirements, exactly what they were getting credit for.

Mr. AKIN. That answers the question.

Thank you, Mr. Chairman.

Mr. ABERCROMBIE. You are welcome.

Mr. Marshall.

Mr. MARSHALL. Thank you, Mr. Chairman.

Thank you all for your service, General Schwartz, General

Lichte.

25

It seems to me that the posture we now have with the C–17 and

C–5 question is that the can has been kicked down the road, assuming Congress goes ahead and authorizes another 13 to 15.

The only issue would be the long lead time suppliers and at this

point, that has actually kicked off a little bit.

So I am pleased that we are adding C–17s. I am pleased that we

are continuing with the RERP-AMP program where the C–5s are

concerned, and we will figure out a year or so from now just where

we are going from here.

Ms. Payton, if I could, in the tanker question, one thing Air

Force was not permitted to take into account is the fact that Airbus, McDonnell-Douglas’ partner in this venture, is supported by

European governments, subsidized. Is that correct?

Secretary PAYTON. That is correct, sir. Yes, sir.

Mr. MARSHALL. Has that factor been taken into account at all in

this process, that you are aware of?

Secretary PAYTON. To my knowledge, subsidies and things like

that were not taken into account anywhere in the evaluation.

Mr. MARSHALL. Have you thought about whether or not there is,

at this point, some mechanism for taking not only that into account, in trying to evaluate the choice that Air Force prefers, but

also taking into account the number of American jobs that will be

located here in the continental United States?

Have you thought about that? I am sure you have. Could you

share with us what your thoughts have been about that?

Secretary PAYTON. That is a question across the entire Department of Defense that probably needs to be addressed.

At this point, subsidies and the number of Americans working

and the number of jobs and even the supply chain, the Buy America Act, as it is written and enforced within the Department of Defense, was what we went with relative to the supply chain.

So I would think that it is a question for Secretary Young or Secretary Gates about, across the board, what you look at relative to

subsidies or work share of American jobs.

Mr. MARSHALL. But that is not a question—those questions were

not taken into account with regard to this particular decision.

Do you see any mechanism for those kinds of questions to now

be addressed as it applies to this particular decision?

Secretary PAYTON. Yes, sir. I mean, we address all kinds of

things, especially as things come across in legislation to us to address.

We had many, many updates just in the fiscal year 2008 National Defense Authorization Act about acquisition. But at this

time, I see nothing going on within the Department relative to this.

Mr. MARSHALL. Thank you. There are some other questions that

I have, but I appreciated the closed session that we had, the secret

level session that we had, and I thought that there is some followup that we are going to have to engage in in some other setting

that I will call you about.

Secretary PAYTON. I would be happy to do that, sir.

Mr. MARSHALL. JCA.

Secretary PAYTON. Yes, sir.

Mr. MARSHALL. And I don’t know that this is—I don’t know to

whom this is addressed, but maybe for the panel generally. What

26

has concerned me for some time now, assuming that this is a platform that should be shared jointly, is that there hasn’t been the degree of jointness in the acquisition process that we would like to

see.

A lot of effort has been made in that regard, but Army is still

set on contractor logistics being supplied and Army has really been

set up to do anything other than that with regard to a platform

like this.

Conversely, Air Force is set up to do this kind of work, has depots that do this kind of work, and, in fact, given corps requirements, would be interested in making sure that in the acquisition

process, there is an appropriate consideration given to the longterm maintenance, repairs and modernization.

In other words, let’s not replicate the C–17, where we are just

struggling almost annually to try and figure out the appropriate

balance.

What work has been done on that lately, any? Where are we as

far as that question is concerned?

Secretary PAYTON. Yes, sir. As a matter of fact, the original question earlier about the difference in the APUC numbers between the

Air Force’s JCA and how much it will cost per unit and how much

the Army’s will cost per unit, we did include in our calculation the

price to stand up the depot, the price that it took to negotiate the

data rights so that we in the Air Force could do the logistics and

meet our corps 50–50 requirements.

We are working very closely with the Army. I met with Dean

Popps yesterday to discuss this. We are going to work on a study

so that in fiscal year 2010, these numbers will converge, and we

will understand better how we can do joint training better.

In our number, we quoted how much the simulators would be for

training. That is something that the Army does under their O&M

numbers and would not be part of the APUC.

So we have nine positions in Huntsville. The Air Force has

manned up eight of those. So the joint acquisition program is very

healthy and we are teeing up these issues so that we can get the

best for the taxpayer.

And I believe that we could see that number, that APUC number

for the Army come down as they start relying on more of the logistics that we have that are organic.

So we are dedicated to working this out.

Mr. MARSHALL. I appreciate that and I would just highlight your

words. We could see the cost come down if Army worked more

closely with Air Force, considering the long-term maintenance and

sustainment of this system.

Secretary PAYTON. Yes, sir. And I think that——

Mr. MARSHALL. The taxpayers win, in other words.

Secretary PAYTON [continuing]. This particular aircraft is very

exciting to our coalition partners and to other people, the Air National Guard and other folks in the U.S., as well.

And so we may just on the beginning of how many we will sell

and the more you sell, the lower your price per unit comes down,

as well.

So we are very, very excited about this program and what it can

mean for our coalition and international interoperability.

27

Mr. MARSHALL. Thank you all for your service, what you do for

our Air Force and our country.

Mr. ABERCROMBIE. Thank you.

Before we go to Dr. Gingrey, what you are saying is a little disconcerting to me.

You say you are doing studies now. Why wouldn’t they be done

before you have the aircraft?

I am not quite sure what you are saying. Why wouldn’t you have

the need or requirements determined before you are completing an

award contract?

I mean, you already have an existing——

Secretary PAYTON. Yes.

Mr. ABERCROMBIE. Well, I am going to ask you. The reason I am

doing this is you referred to the question I asked at the beginning

in my remarks and part of the argument here is that you already

have an existing plane.

Secretary PAYTON. I am sorry. I missed the last part of that.

Mr. ABERCROMBIE. I am saying part of the argument here is between the Army and the Air Force, and you are saying here you

are still doing studies.

Secretary PAYTON. Yes. What we were told during the acquisition

reviews of this by the OSD cost estimators to use our historical

numbers as to how we do business, and then we are now kicking

off discussions and reviews of how we actually will stand up the

joint training together and how we will actually stand up the joint

sustainment together.

And so a lot of the money that we have in our Research, Development, Test & Evaluation (RDT&E) line is to solve some of those

disconnects.

Dr. GINGREY. Mr. Chairman, if I could. I have been pretty actively involved in trying to pull the two services together with regard to this particular platform and that is, in part, because of the

problems we have had with C–17, trying to figure out what we are

going to do where C–17 maintenance and modernization and

sustainment over a period of time is concerned.

And it is two separate acquisition entities with different history,

different budget organization, different everything. And so it

doesn’t surprise me that they are still working on details, and we

will still be working on details of this as time progresses.

I think what we need here in Congress is to see a commitment

from both services that they are going to move forward jointly with

regard to this, and they are going to do what is most practical from

the perspective of the taxpayer and our general objectives militarily.

So far, I am seeing that. It has been difficult as we have moved

along. There have been some bumps in the road. But I have actually been pretty impressed with the extent to which they have

come together.

Mr. ABERCROMBIE. I am willing to grant that, but—excuse me,

Phil, if we could just pursue this a moment.

But underlying all of our discussion, including the tankers, for

that matter, is this whole question of funding and how much

money is available and how to meet the requirements given the

funding that is available.

28

General Schwartz, virtually all of his testimony has as a theme

going through it that there is only so much money and there is so

much in the way of requirement and that a prudent person has to

simply deal with those realities.

Supplemental budgets and so on are theoretical, for all intents

and purposes. You don’t know when they are going to come. You

don’t know when they are going to be put forward. You don’t know

when they are going to be completed, et cetera. You don’t know

what else is going to get added in there.

Now, the intra theater airlift fleet mix analysis, I have to think

to myself so that I can make sure I get all of that in there, concludes—at least my judgment is that do you have to procure this

JCA to meet your airlift intra theater requirements.

Why not procure additional C–130Js?

Secretary PAYTON. I would like to answer——

Mr. ABERCROMBIE. Given the fiscal constraints that you yourself

have put forward to our attention today saying that we need to recognize.

General LICHTE. Mr. Chairman, I can jump in here and help out

a little bit.

Mr. ABERCROMBIE. Yes.

General LICHTE. That study went over to you recently and it acknowledged the requirement that we had with the Army and the

Air Force numbers, 24 for the Air Force.

What we found out as we did that study, if you are talking the

war fight, no matter how you begin the war fight, what you really

need are bigger platforms. You need the C–5s, you need the C–17s,

and you need C–130Js to get a lot of stuff over to the fight quickly.

What we found as we did that study, and they acknowledged the

numbers that were in there for the Air Force and the Army and

said, ‘‘Yes, that is a valid need,’’ when you get to a certain phase

in the war, which we happen to be in now in Iraq and Afghanistan,

there may be a requirement where it is more effective to use a

smaller airplane so that you are not using a C–130J size aircraft,

but you are not filling it up.

And so we have asked the folks to go back and take a look at

that part of the phase of the war that you are in, what do you really need, what would be most effective, and, in conjunction with

that, we were looking at what are the needs for homeland defense,

what are the needs for the National Guard if a calamity or crisis

develops in a certain part of our country.

Would it be easier to forward medical supplies and people in a

smaller aircraft or will you need the size of the aircraft that we are

talking about with C–17s and C–130Js?

And so the one study that authorized the numbers is there, but

we are looking at what else or how else would those aircraft be

used.

Certainly, as Ms. Payton pointed out, in the international arena,

it helps us with partnering and working with other air forces.

Mr. ABERCROMBIE. That is not essentially—I appreciate all that,

but essentially what I am asking here is the Army is maintaining,

for example, that it can do it for almost half the price of—its version of the aircraft at half the price of the Air Force.

I am asking a money sensitive question.

29

Secretary PAYTON. Yes, sir, and if I could reply to that.

The Army’s cost number did not include standing up a depot,

which the Air Force is going to be doing. It did not include negotiating the data rights from the provider of the aircraft so that we

can do our own maintenance in the future.

It did not include the cost of simulators and trainers for crew

maintenance. Those are all put in another line.

Mr. ABERCROMBIE. The cost I am referring to is from the Air

Force of 60.7. You are saying you are putting that in your unit cost.

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. And the Army doesn’t have the same definition of a unit cost.

Secretary PAYTON. That number——

Mr. ABERCROMBIE. Well, if you are doing things jointly, when the

hell are we going to get this done? That is not an answer that satisfies me very well.

You mean you are in such elementary opposition to one another

that you don’t even agree as to what a unit cost is when you

present it to the Congress.

Secretary PAYTON. Well, they don’t——

Mr. ABERCROMBIE. Am I to take from your remarks that the

Army is trying to deceive us?

Secretary PAYTON. No, sir. The Army doesn’t have a depot

standup cost because they are going to have their maintenance

done by the contractor.

That is in a different line for operation & maintenance (O&M).

Mr. ABERCROMBIE. So you are saying the Army is finessing this.

Secretary PAYTON. No, sir. I think that the RDT&E and procurement costs, as the Army has stated them, are accurate. I believe

that the O&M costs for the Army—I think those need to be examined.

Mr. ABERCROMBIE. Ms. Payton, you are right on the edge of getting into the Blues Brothers.

Secretary PAYTON. Sorry, sir, I don’t mean to be there.

Mr. ABERCROMBIE. That is when Jake says, ‘‘Well, but you lied

to us about the band, lied to me when I was in prison about the

band. You haven’t kept the band together.’’ ‘‘I never lied to you. I

bullshitted you a little bit, but I never lied to you.’’

Secretary PAYTON. Sir, I would never give any misinformation

that——

Mr. ABERCROMBIE. No, but you are saying that the Army is doing

that.

Secretary PAYTON. No, sir. I believe that——

Mr. ABERCROMBIE. They are trying to finesse this. You are telling

me they have got a cost that they know about, but they are not

telling us about it, and they are trying to pretend their unit cost,

given information to us, is the same as your unit cost, and they

know better.

Secretary PAYTON. Well, sir, we would have to get with the Army

and we are doing a business case analysis study, not a requirements study, on how to do training better together, how to do

sustainment better together.

I didn’t want to leave the impression the requirements have

changed in any way.

30

Mr. ABERCROMBIE. Well, there is a hell of a big difference, a $30

million difference.

Secretary PAYTON. One of the additional things that we are doing

is we are paying for all the joint live fire testing. We are paying

for, as I said earlier, the tech manuals, training systems.

Mr. ABERCROMBIE. So I have to go back now, and I have got to

have my staff then start making comparisons to make sure the

Army isn’t telling us one thing and the Air Force telling us something else, and we have to try and figure out what it is that puts

apples to apples.

Secretary PAYTON. No, sir. We would be glad to come together

and——

Mr. ABERCROMBIE. But that is what the joint thing is all about.

I don’t understand. Why, if this is a joint operation, do you have

two different sets of—you apparently know that there are.

You are telling them to me in detail right now. In the Air Force,

why aren’t they operating off the same page when it comes to determining unit cost?

Secretary PAYTON. Sir, I will take that action for the record, and

I will return.

Mr. ABERCROMBIE. Is that a reasonable question?

Secretary PAYTON. Absolutely.

Mr. ABERCROMBIE. Do you dispute that the unit costs are stated

differently?

Secretary PAYTON. No, sir. I believe the unit costs are correct. I

will tell you that on the 25th, JCA, from the Air Force, our unit

costs will start going down, because that investment that we have

made upfront, now each unit that we build after the 24th will be

factored in, so the price per tail will decrease.

Mr. ABERCROMBIE. But if you know that your criteria for the unit

cost is different from the Army, why hasn’t this been reconciled?

Secretary PAYTON. Sir, I will have to take that question for the

record.

Mr. ABERCROMBIE. I don’t understand. Why should you have to

take it for the record?

Secretary PAYTON. Because I need to get with my counterparts

and understand in detail how they calculated the APUC for this

program.

We do have——

Mr. ABERCROMBIE. Why hasn’t it been done already?

Secretary PAYTON. Because we—I will have to take that for the

record. I apologize.

Mr. ABERCROMBIE. You don’t have to apologize. This seems to me

elemental. The whole basis of the questioning that is going on here

and the whole basis of the idea of jointness is that there is at least

a common understanding of what it is that is being determined and

given to the committee.

You obviously already know this difference. This is not news to

you. You have it in detail.

Knowing the difference, how come it hasn’t been reconciled in

terms of what is presented to the committee?

Secretary PAYTON. Well, sir, I——

Mr. ABERCROMBIE. I have got the Army telling me one set of

things. You know, I feel like I am being jerked around here.

31

I am on the edge of having to make recommendations to the

membership here and I am dealing with different numbers, different unit costs, where you are saying there are different criteria,

which you know. You know that there are different unit costs.

Secretary PAYTON. Again, we are taking a different approach on

acquisition and sustainment.

Mr. ABERCROMBIE. Why? How can we make a decision if you are

taking a different acquisition process from the Army, and, yet, it

is being presented to us as if it is reconciled, I mean, as if you are

all operating from the same page?

That is why I asked the question. I am thinking how the hell can

the Army come in with a unit cost significantly less here? Why is

it tens of millions of dollars less?

Secretary PAYTON. I will get more detail for you on that, but I

know they are building more. So the more that you build relative

to APUC numbers, the lower the price per aircraft is.

I will tell you that we do have to invest in the data rights. Because we are doing our own maintenance, we have a 50–50 law

that we must abide by because we have logistics centers.

Mr. ABERCROMBIE. And the Army doesn’t.

Secretary PAYTON. No, sir. They do not do their own——

Mr. ABERCROMBIE. I know that.

Secretary PAYTON [continuing]. Logistics on airplanes.

Mr. ABERCROMBIE. Let me ask this then. Why are we even bothering with the Army? Why don’t I just dismiss it entirely, that it

doesn’t have anything to do with this version of the Joint Cargo

Aircraft, operating in separate universes?

Why are we even talking about it being joint then? Why don’t

they just do what you tell them to do?

Secretary PAYTON. I think that is probably above my grade level,

sir. I am trying to do the best I can in bringing jointness into something that was sort of formed separately and pulled together.

Mr. ABERCROMBIE. I am sorry, but it is very difficult. It is very

difficult to understand then, if all of these things are, in fact, the

case, and you are just telling me right now, why wouldn’t that information have been given to the Army so that they could make a

decision as to whether or not they should just simply join in your

program? It is joint, what the hell. What difference does it make?

Secretary PAYTON. Yes, sir. The decision was made this would be

an Army-led program and we are working through this the best

that we can.

Mr. ABERCROMBIE. So the Army thought that they could lead in

this program and not have anything to do with depots, and they

didn’t understand that, and it never occurred to them, even though

they have depots for MRAPs and everything else that the Army

has to deal with, that they wouldn’t need to have a depot factor involved in a cargo aircraft.

It didn’t occur to them?

Secretary PAYTON. Sir, those are questions for the Army. And as

I say, we have people supporting that program in Huntsville.

Mr. ABERCROMBIE. You know, you are saying these are questions

for the Army. You are saying that I need to ask the Army.

Secretary PAYTON. No, sir. I am suggesting that we come back

together and any and all questions that you have relative to this.

32

Mr. ABERCROMBIE. Isn’t it a little late in the game to be getting

together with the Army?

Secretary PAYTON. No, sir. We have been together with them. We

were on the source selection with them. We have had our people

involved.

Mr. ABERCROMBIE. The source selection, didn’t elemental stuff

like this come up during the source selection?

Secretary PAYTON. Yes, sir. The acquisition strategy that was approved by OSD at our request was that there would be some differences in the approach here, but we would manage the program

together, and we would do the business case analysis to determine

how we would move forward.

Mr. ABERCROMBIE. Do you think it is being managed very well

together at this stage?

Secretary PAYTON. Sir, from what I can tell from talking to

our——

Mr. ABERCROMBIE. From you can tell from the last 10 minutes,

do you think it is well managed together?

Secretary PAYTON. I think there are some differences that we

need to be able to articulate better to you.

Mr. ABERCROMBIE. Thank you.

Dr. Gingrey.

Dr. GINGREY. Mr. Chairman, thank you.

Madam Secretary, the chairman obviously has got some tough

decisions to make, and it requires some tough questions, and I certainly appreciate it, from his perspective.

I am going to direct my questions and give you an opportunity

to take a breath and direct my questioning to General Schwartz

and General Lichte.

It seems that you have an agreement in regard to the total need,

getting back to airlift specifically, of 205 C–17s, 52 C–5Bs and Cs

that have been fully AMP’d and RERP’d, and then 59 C–5As that

have just had the AMP program.

How do you 52 modernized C–5s added to 189 or even, General

Schwartz, as you said, 205 C–17s, how does that give us enough

airlift to meet our airlift requirements?

Either way, it seems we are going to come up woefully short of

the mobility capability study’s recommendation. So considering we

are going to—nobody has mentioned this, I don’t think, during the

long hearing, but we are going to be standing up a new command.

We all know that, Africa Command, AFRICOM.

We are also going to increase the end strength of the Army and

the Marine Corps something like 92,000 additional troops.

So it seems like our need for airlift is not going to decrease, it

is going to grow.

I ask the two Generals. Would you agree with that? As we look

long, and not so long, that the needs certainly could be projected

greater than what you have outlined here today in regard to our

overall airlift capability?

General SCHWARTZ. Congressman, it is a great question. Fundamentally, the shock absorber in all of this, again, as I indicated

earlier, is the fact that we have an organic fleet, a very substantial

fleet, which is what we have talked about thus far.

33

And, of course, we use our commercial partnerships extensively

to augment the organic fleet when that is required, and, in fact,

that has been the case.

As you are aware, the Civil Reserve Air Fleet and our commercial partners deliver about 90 to 95 percent of our passengers, typically, and at least in the most recent conflict now ongoing, 35 to

40 percent of the cargo.

So it is important to recognize that this is a system which includes both U.S. government-owned assets and sealift in exactly

the same way, as well as commercial capacity.

Dr. GINGREY. Yes. But, General, let me just add that with the

price of jet fuel, I just wonder how many of the Deltas of the world

will be able to take on that business as we look long on this.

General SCHWARTZ. It is a concern, there is no question. There

is fragility in the American airline industry and that is something

that is a national defense issue, in my view. I agree with you completely.

And with regard to the other matters, AFRICOM, size of the

Army and the Marine Corps and so on, without a doubt, we have

to look at that. But I would just offer this context, that a presumption that all changes in requirements lead to more airlift, I think,

is not necessarily the right way to approach the problem.

I think it is important to look at this in a multi-mode fashion.

This is what the upcoming studies will do. And I think it is important, again, to recognize that in the case of the Army and the Marine Corps——

Dr. GINGREY. Well, General, let me just say that I personally, I

do, I do believe that the number to meet our airlift requirement

should be revised and it is going to take more C–17s.

I think it is going to take more modernized C–5s to meet it. I

think you can’t ignore the fact that the C–5As, the 59 that you are

just going to modernize the cockpit—in the late 1980’s, they had a

wing modernization program, and those airframes, in many cases,

may have more flight capability than the Bs and the Cs because

of that modernization of the wings.

So funds for C–17s I don’t think can be realized by forgoing C–

5 modernization, because those funds reside in 2014 and beyond.

Obviously, funding for C–17s is a 2009 issue. It is next year.

So if we are going to look at a more general five-year picture,

then you need to consider that if you save $38 billion in total ownership costs by increasing the life of the C–5s through modernization, then you could use that to buy C–17s.

So, General Lichte, you may want to comment on that.

General LICHTE. Sir, I would just add to General Schwartz. We

do rely on the commercial world a lot and we use the C–17 and C–

5 fleet to handle really our oversized and outsized cargo.

And so we manage the fleet to the best of our ability and that

is why we need to take a look at the two studies that are critical

right now, the MCRS, capabilities and requirements study, as well

as the study that is led by Senator McCaskill and Congressman

Tauscher that we are looking at the airlift issues that you raise

with AFRICOM, the 92,000 extra, and on and on.

And so that is why, while I agree with everything that General

Schwartz has said, I would like to see the C–17 line stay open, beVerDate 22-MAR-2001 07:26 Aug 20, 2008 Jkt 043093 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 C:\DOCS\110-140\092250.000 HNS1 PsN: HNS1
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cause it is our only insurance policy right now if anything else goes

wrong or if there is another development that we need to look at.

And until we have things settled down as to where we are going

to be basing all our Army soldiers, whether they are be homebased, whether they will be overseas-based, and how we are going

to handle the future crises, that is what these studies will look at.

That is what we will hope to come back and have some answers

for the committee.

Dr. GINGREY. Well, General, I don’t disagree with that, I don’t.

I think you make a good case for it and I think we are going to

need additional C–17s.

I am in favor of fully RERPing all of the C–5As, as well as the

Bs and the Cs. But I honestly think, as I sit here, in regard to

what our commercial partners, what our civilian partners have

done in the past, going back to the first Gulf War, I know many

of those pilots, Delta pilots in particular, as I am a native Atlantan,

that they not only welcomed those contracts, but they did out of

their compassion and love of their country and flew those flights.

But, again, with the price of jet fuel and the consolidation of the

industry and possibly some failures, you can’t count on that piece

being there, and I think we absolutely need to think in terms of

all of the airlift being done on the military side and not count on

our civilian partners, even though they would like to do that.

Mr. Chairman, that is all I have, and I will yield back the remaining balance of my time.

I thank the Generals, and I thank the Secretary.

Mr. ABERCROMBIE. Mr. Bishop, would you yield to Mr. Saxton for

a moment, because he has to leave?

Mr. BISHOP. I would be happy to yield.

Mr. SAXTON. Thank you very much.

General Schwartz, the KC–45, I am told, has a wingspan of real

close to 200 feet, it is 197 or 198, and the maximum gross takeoff

weight of over 500,000 pounds.

Will the size and weight of the KC–45 present challenges to the

operational employment of the KC–45, and are there airfields that

you will not be able to operate the KC–45 from where we are currently operating the KC–135?

General SCHWARTZ. Those challenges are manageable, Congressman, and no doubt there are some airfields that will be—we will

have to use the 135s, which will be around for another 30 years,

accordingly.

But I am personally persuaded that this is manageable, and I

think General Lichte will confirm that, as well.

Mr. SAXTON. But the answer to my specific question is that there

are some airports that currently are based—where we base KC–

135s that will not be able to be used for the KC–45.

General SCHWARTZ. Presumably, that is the case and, in addition, that is not unlike the airlift scenario, sir, where some airplanes—some fields are C–5 capable and some are not.

Mr. SAXTON. I know, but I just wanted to get an answer to my

question.

The answer is that there are some airfields——

General SCHWARTZ. There are some.

35

Mr. SAXTON [continuing]. That will not be able to accommodate

the KC–45.

General SCHWARTZ. There are some, but that, again, in my view,

will be manageable.

General LICHTE. Mr. Saxton, could we come back to you on the

record with that? Because I am not aware of any of the airfields.

I know there is some discussion on the weight and everything, but

really, for the runway lengths, I am not aware of any difference

that we would be restricted from the 135.

So General Schwartz and I can go back and take a look at that

just to make sure we give you the accurate answer.

Mr. SAXTON. Thank you very much. Appreciate that.

Mr. Bishop.

Mr. BISHOP. Well, Mr. Ranking Member, I am going to talk very

slowly here until the chairman can return.

I just want to thank you all for being here.

To be very honest, I had a couple of questions which I think are

going to be redundant, because I am sure they have been covered

already, and I apologize for not being here to listen to the earlier

testimony.

So I am sure that Mr. Abercrombie will not be opposed for me

submitting those questions for the record, and I will ask unanimus

consent (UC) to allow us to quit if that is the end of it.

Mr. SAXTON. That is kind of unusual. Why don’t we just suspend

for a few minutes until the chairman gets back?

[Recess.]

Mr. BISHOP. Ms. Payton and Generals, until Mr. Abercrombie returns, in all sincerity, you probably—if this is redundant, just say

so. okay? But let me at least go through the three that I have written down here, and then we can go from there.

And let me start with Ms. Payton, if I could.

At the time, Congress is adding funds to the budget to keep the

C–17 line and airlift production capability going. We are allowing

another power project capability, in this case, aerial refueling, to

now be produced primarily by another country, which is the Airbus,

obviously.

Does it make sense to the United States to not preserve the capability to produce C–17 aerial refueling aircraft, as well as other

strategic bombers along the current line?

Do you understand what I am trying to say with that?

Secretary PAYTON. Yes, sir, I understand the question.

I think that I look to the people in charge of readiness and the

people in charge of operations to answer that question. I really

don’t have an answer for that question.

Mr. BISHOP. Ms. Payton and Mr. Chairman, if you have already

answered that already in this committee hearing, and I am making

the assumption you probably have, I have these questions.

Once again, I have two others. I am more than happy to put

them for the record, because I am assuming they will probably replowing ground that has already been done here.

Mr. ABERCROMBIE. That is all right, if you want to do it. If you

need answers and you want them today, go ahead.

Mr. BISHOP. Actually, I would be more than happy to submit

these for the record and allow them a chance to look at them again.

36

I was actually just filling time, to be honest with you.

Mr. ABERCROMBIE. Thank you very much. I appreciate that.

Mr. BISHOP. And I am done filling the time right now.

Mr. ABERCROMBIE. Ms. Payton, I want to go back over this, what

we just were discussing, and make sure we are on the same page.

What I don’t understand is, at this stage—that is why I asked

about studies being done and before contracts go out and so on.

What I don’t understand is why haven’t we gotten to a stage,

let’s say, where you are going to have Air Force personnel at the

Army bases for the maintenance.

I understand very clearly that the Army is using a different

bookkeeping system. Again, I don’t understand. It is supposed to be

joint operation. Why we do this is beyond me.

For their support equipment, for the spares and so on, they contract, right?

Secretary PAYTON. Sir, I would have to defer to the Army. I am

not the lead of this program and I——

Mr. ABERCROMBIE. You have Air Force personnel maintaining

the planes.

Secretary PAYTON. We have Air Force personnel in the program

office. Yes, sir.

Mr. ABERCROMBIE. The plane is essentially the same, is it not?

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. General Lichte and General Schwartz, right?

General SCHWARTZ. The airframe is the same.

General LICHTE. Yes.

Mr. ABERCROMBIE. I mean, they have versions, I understand, but

essentially it.

Doesn’t it make sense then for Air Force personnel to have the

maintenance even if it is at the Army base?

I am very concerned that you are going to have maintenance taking place on these planes—and the planes could be switched back

and forth, right? They might be servicing the Air Force at one

point, but depending on deployments and all the rest of it, be at

an Army base at another and so on. Right?

I don’t like this idea of contracting. Why the hell should the

Army be contracting for these?

This accounts for some of the difference. Right?

Secretary PAYTON. Sir, I think that is something for the Army.

I know that we do maintenance at logistics centers, because we

have thousands and thousands of airplanes.

And so it is part of the way we do business.

Mr. ABERCROMBIE. That is what I meant. You are already doing

this.

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. And you have personnel in whom you have

confidence.

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. And you have protocols set up for their training and their in-service training and their maintenance of capacity,

right?

Secretary PAYTON. Yes, sir. That is part of our cost.

Mr. ABERCROMBIE. Contractors come and go. I am willing to venture, I can’t say for sure, but I am willing to venture that a good

37

portion of the difference between the Army costs, as presented to

us, and your costs probably have to do with contracting and maintenance and in those areas.

In fact, you cited them to me yourself right now, right?

Secretary PAYTON. That is a portion of it, but I would remind you

that we are only doing 24 and when you divide that number into

the 1.4, 1.5, 1.6 billion or whatever it is, it comes out to be about

60.68 million per unit.

The Army is doing 74, I believe. So when you divide that number

in, the price per unit goes down, because you have more that you

are doing.

That may be part of the reason, as well.

Mr. ABERCROMBIE. The proper analysis of what the Army needed

then by—how do you come up with 24? How do we come up with

24?

Secretary PAYTON. That was a requirement that came in from

our A–3 in the Air Force. It was not an acquisition determination.

It was a requirement that came in from the uniformed side of the

world.

General LICHTE. It was validated by the JROC, the Joint Requirements Oversight Council.

Mr. ABERCROMBIE. Every time I hear the word JROC, trepidation

sets in.

General SCHWARTZ. Mr. Chairman, the requirement, remember,

is to address the current fleet obsolescence issue in the Army,

which includes C–23s and C–12s, in addition to this mission set,

as General Lichte alluded to, of mission critical, time sensitive, the

last tactical mile.

The numbers—that limited set of the 78 airplanes has been validated, as General Lichte indicated, and it is my personal view, having watched this, that there is a compelling need for this size airplane in the environment we are currently operating in, supporting

provincial reconstruction teams, disperse soft elements, small elements that are distributed about the battlefield.

And so 78——

Mr. ABERCROMBIE. The fleet mix analysis, at least our reading of

it, that wasn’t covered. You may be doing it now.

General SCHWARTZ. No, sir. That is on the books, and it was certainly attested to by the RAND study, which was recently presented to you. But as Art suggested——

Mr. ABERCROMBIE. Well, I am not sure that is the case. Maybe

you can point out to me where that is the case.

General SCHWARTZ. We will take that on, sir.

Mr. ABERCROMBIE. I am still not persuaded necessarily that the

C–130J, even if you don’t use it full-up all the time, wouldn’t be

just—because you are, by definition, switching your deployments

all the time, why not use it?

Sometimes you would fill it all the way up, sometimes you

wouldn’t.

Secretary PAYTON. It is interesting to note that at the point

where we were looking at APUC of the C–130J, which is where we

would be with the JCA, it was about $100 million per tail.

38

But now that we have built so many more of them, the price has

come down to something like 74. So we are just on the very beginning of this JCA relative to the price per unit cost.

So the more that we would build for our coalition partners, the

price will come down drastically once we get——

Mr. ABERCROMBIE. The C–130.

Secretary PAYTON [continuing]. The return for the JCA from that

investment.

General SCHWARTZ. Sir, I guess the best way I could describe this

is in the motor carrier industry, you have some folks that run

80,000-pound trucks and you have some folks that run much smaller vehicles or that do less than truckload kind of service and others

that do—where they specialize in filling the trucks up and doing

long haul kind of activity.

The same thing applies to a lesser extent, but still applies in the

airlift end of the business, and, that is, what you want to try to

do, ideally, is to fit the platform to the mission requirement.

Mr. ABERCROMBIE. Okay. Let’s, for conversation, accept that. But

I will tell you, the mechanic that works on it has to work on all

of them. You don’t go into the truck stop then and say, ‘‘You know

what I am going to do? I am going to contract for an outside mechanic to come in here, because this is a different model.’’

If you guys are already doing the maintenance and the servicing

and the utilizing and maintaining the support equipment, you have

got the professionalism, we have already alluded—not alluded to—

stated specifically today that in terms of readiness, 50 percent or

55—in fact, General Schwartz, you yourself said we never send a

plane up that isn’t safe, that isn’t ready.

It is just that there are different factors that come into play in

terms of their readiness, if you will, to leave. Different cargoes

have come in and they require—so on and so forth.

It seems to me then that you need to put the people—in order

to make this most efficient, there is nothing to prevent Air Force

personnel from being stationed at an Army base, is there?

Secretary PAYTON. No, sir, not that I know of. But we will come

in and bring you that.

Mr. ABERCROMBIE. I mean, we are taking the people from different services and putting them to work for the Army and the Marine Corps right now, are we not, in Iraq and Afghanistan?

Aren’t Navy personnel and Air Force personnel serving under

commands of the Army and the Marine Corps?

General SCHWARTZ. Sir, I think I have to tell you candidly that

I believe in unit cohesion and I don’t know whether it—if an airplane needs to get serviced en route, it doesn’t matter who does it.

But if you are talking about making that a deployable capability,

which it needs to be——

Mr. ABERCROMBIE. Yes.

General SCHWARTZ [continuing]. I think then what you need to

have is a unit that can act with cohesion and singleness of purpose.

Mr. ABERCROMBIE. I have always been against this contracting

anyway. When people say to me, ‘‘Well, you don’t want personnel

cutting—why should personnel cut the grass,’’ I said, ‘‘Because they

report to the commanding general on the base, that is why,’’ beVerDate 22-MAR-2001 07:26 Aug 20, 2008 Jkt 043093 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 C:\DOCS\110-140\092250.000 HNS1 PsN: HNS1
39

cause they are a part of a unit and they are not somebody that just

came in from the outside.

Setting aside the homeland security implications and the terrorism implications, it is because they have an entirely different

mindset.

General SCHWARTZ. My experience is that it depends on where

you are at. I have been with contract personnel downrange that

were as committed, as devoted to the mission as anybody in uniform.

Mr. ABERCROMBIE. Luckily.

General SCHWARTZ. Well, it has to be the right folks in the right

circumstances with the right protocols for employment. And, again,

Secretary——

Mr. ABERCROMBIE. In all honesty, General, that requires a hell

of a lot of oversight from someone like yourself or your designee,

and I am not sure you get that from a corporation. But we can discuss this from another point.

My point here is that I have got to get this thing reconciled about

where the true costs are and where they are not, because it affects—even if it is out of the billions and it is only 24 and it doesn’t

amount to that much, believe me, in the recommendations we are

trying to put together now, a couple of hundred million dollars one

way or the other can make a big difference in what we say or don’t

say in terms of making a sensible recommendation.

I don’t mean to hurt your feelings, anybody out there, by getting

as charged up at this, but when we say joint and all that, I get a

vision in my mind that there is a cooperative endeavor going on,

and we can count on what is happening, and that everybody has

decided ahead of time where they are going and how they are going

to work it, and then the recommendation comes forward.

But that isn’t the case here.

General SCHWARTZ. Sir, I think, if I may, Madam Secretary, my

recommendation is to have both the Army and the Air Force folks

come and join a panel together so that that——

Mr. ABERCROMBIE. You want to sit in on the 10th of April? They

are coming in next week, and I am sure they are hearing about it

right now. Some gremlin is probably already out there.

Secretary PAYTON. They will be getting a phone call from me.

Mr. ABERCROMBIE. You maybe can’t get interoperable communication in the Future Combat System, but it sure as hell seems

to be able to leave the Hill and go across the river.

General SCHWARTZ. That is what BlackBerries are for, Mr.

Chairman.

Mr. ABERCROMBIE. Well, I have got a couple of more things.

Thank you very much.

General Lichte, are you comfortable that the retirement of 24 C–

130Es this fiscal year will not impact the Air Mobility Command

mission?

General LICHTE. Yes, sir, I am. I think we have to get rid of the

old aircraft, and the E models are one that we target to retire, and

we will be able to do the best we can to make up the difference

in any of the lift requirements.

Mr. ABERCROMBIE. General Schwartz.

40

General SCHWARTZ. I concur, sir. Just by way of context, the E

model C–130 right now delivers about 25 percent of what an H

model C–130 can, the support it provides. If you compare it to a

J model, it is 15 percent.

The bottom line is the E model contributes, but modestly compared to the others.

General LICHTE. And I would also add that—you probably know

this, but we have some of them already restricted and two of them

grounded. So really we just need to get them off the ramps and retire them completely.

General SCHWARTZ. And by the way, Chairman, and I am sure

General Lichte will confirm this, those crews and those maintainers get applied to make those other machines more ready.

Mr. ABERCROMBIE. Parenthetically, that kind of effort, that kind

of work, that kind of experience isn’t going to be necessarily duplicated by contractors. Right? Am I right in that?

What you are just citing is people who are extraordinarily experienced, right? They deal with situations that require all their skill

and call upon probably years of teamwork and understanding

about what they are dealing with.

General SCHWARTZ. There is no question but that that that is the

ideal. But I must tell you, Mr. Chairman, that my experience with

contract support has not been a great disappointment—has not

been a disappointment, to be absolutely candid.

I mean, there are good and——

Mr. ABERCROMBIE. Do you suggest then we get rid of the Air

Force personnel you have in contract?

General SCHWARTZ. There are some places where it works and

there are some places where we shouldn’t, and you rely on us to

give you the best advice on where are those—what are those circumstances.

Mr. ABERCROMBIE. All right. Fair enough. Now, there is an item

from last year’s authorization bill, and I am not up to par on or

up to speed on how it is being implemented.

The Air Force was asked to develop a fee-for-service aerial refueling pilot program.

Are you familiar with that, Ms. Payton?

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. Can you just give me an—can you do that

today, or should I ask you to put it in writing?

Secretary PAYTON. Yes, sir. I can tell you that we have released

a request for information. We have at least six responders to that

request for information.

We will be holding an industry day on the 14th of April, and we

are moving out with putting an RFP out as soon as we get enough

input from industry to understand the capabilities there.

So we are moving out on that.

Mr. ABERCROMBIE. Do you feel that authorization—excuse me—

are the Defense Act requirements being met satisfactorily?

Secretary PAYTON. Yes, sir, I do. At this point, I would like to

ask if General Lichte might have some more information on that,

as the customer of this.

General LICHTE. Right. Everything is moving out. There is really

a three-phase program. Ms. Payton alluded to the first phase.

41

The second phase will be up to the contractor to develop his procedures and everything, and then the third phase, where Air Mobility Command will be involved in seeing how they can execute, if

they can execute.

Mr. ABERCROMBIE. Do you have confidence in it or not?

General LICHTE. Well, sir, I have some questions that we need

to answer with regard to the operational procedures, FAA requirements and certifications, legal issues that come up.

Mr. ABERCROMBIE. Is there anything we need to address in this

upcoming bill or should we wait on events?

General LICHTE. I think, at this point, we have all that we need

to proceed with the rest and the proof of concept and then we

would like to come back to you and let you know how it is progressing.

Mr. ABERCROMBIE. In the next bill?

General LICHTE. Well, really, the law says it is a five-year plan.

Mr. ABERCROMBIE. No. I meant would you have some idea in the

next bill whether we need to modify anything.

General LICHTE. We might, at that point, after we find out what

the folks are doing in phase one and phase two.

Mr. ABERCROMBIE. Okay. General Schwartz, on the Civil Reserve

Air Fleet question, in the 2008 act, there was a study to be delivered to us, but I think it was to be April 1, and I don’t believe we

have it, and I just wondered if you can update me.

General SCHWARTZ. Yes, sir, absolutely. Sir, we have formally requested the consent of the committees to extend the delivery of

that to 30 September. And one of the reasons that was necessary,

Mr. Chairman, is because, as you are aware, the Authorization Act

slipped in terms of approval, and we were unable to get it on contract until last month.

And so it was simply a matter of allowing the Institute for Defense Analysis to do their good work.

Mr. ABERCROMBIE. The reason I ask is—are you saying then we

don’t need to make decisions on the reserve air fleet, civil air reserve air fleet issues in this Defense Act?

General SCHWARTZ. The Department has requested that the committee consider the assured business initiative. I believe that that

is still relevant for consideration. You will have an interim report

from the study contractor in time, I think, to inform your development of language.

My point is that the assured business proposal is not a 100 percent fix for what ails the American flagged airlines, but it will provide financial predictability, which, in this setting, I am told by the

airlines, is very important to their business plans.

Mr. ABERCROMBIE. When is the interim report due, then?

General SCHWARTZ. This summer, sir, they will give us——

Mr. ABERCROMBIE. But this summer, we will already be past—

we may very well be past this bill.

We are already getting hit—the reason I bring it up, General, I

am not trying to give you a bad time about it, but I am telling you

what my time problems are.

General SCHWARTZ. I understand.

Mr. ABERCROMBIE. We are already getting the—Ms. Payton can

attest to the fact that you are having an argument about subsidies,

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whether it is the World Trade Organization (WTO) or whether it

is Airbus or whether we get all the rest of it.

Now, this could easily be seen as a subsidy to airlines.

General SCHWARTZ. Mr. Chairman, we——

Mr. ABERCROMBIE. That doesn’t bother me, as such, but that is

a separate philosophical or political issue.

General SCHWARTZ. Yes, sir. We will come back to you with the

exact schedule of when the interim progress reviews will occur and

when those insights will be available, at least in draft form.

We will do that for the record, and we will turn that this week.

Mr. ABERCROMBIE. I don’t mind hearing about it informally. It is

not like you are going to be forced into a gauntlet or something.

General SCHWARTZ. But if you would allow me, Mr. Chairman,

the presumption that assured business is a subsidy I think is unfair. Assured business is not paying anybody to do—subsidizing

zero activity or even a modest amount of activity.

The way this is designed is that we will make a financial commitment up front, but the Civil Reserve Air Fleet would fly the

hours and we would pay them on that basis.

You would hold me accountable not to leave a nickel on the table

at the end of the year. If I do, we have made that commitment,

they get the money. But that is not the way we will manage the

program.

I will make sure I get fired if we don’t use those flying hours productively that we have committed to provide.

Mr. ABERCROMBIE. I have no doubt with respect to your professional commitment. I am just saying how if someone has a political

agenda, they can interpret it much differently.

General SCHWARTZ. Understood.

Mr. ABERCROMBIE. If they want to. It is like the political pundits

and some politicians who call member initiatives earmarks. I only

have member initiatives that I deal with, and, believe me, I get

plenty of them coming in from everywhere, including the armed

services of the United States. Right?

And all is for good reason. Everybody has got a case to make. I

am just citing that I need to have some basis for it, that is all,

other than my reference to your goodwill, good intentions and professionalism.

General SCHWARTZ. Understood, Mr. Chairman.

Mr. ABERCROMBIE. I think that is it—oh, one other thing before

we close, and I thank you. I thank you for the candidness of the

exchange and your answers, well considered answers.

Because you have had so much to do today, maybe you didn’t

have a chance to look at the paper. I make reference to it because

you are probably already dealing with the material coming to you,

the GAO examination of close to 100 major systems.

The principal element—this is in the ‘‘Washington Post’’ today I

just referred to.

The principal point that they made with regard to whether it is

things like the joint strike fighter or the Future Combat System or

whatever they happened to look at—I have not read it yet, read

this particular summary yet.

But the newspaper summary hits on three things, and some of

the reason I bring it to your attention today, I think it will be useVerDate 22-MAR-2001 07:26 Aug 20, 2008 Jkt 043093 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 C:\DOCS\110-140\092250.000 HNS1 PsN: HNS1
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ful for you to take a look at it and perhaps comment on it before

we go to our markups.

At least from the point of view of Mr. Sullivan and the GAO, he

cited three things with respect to cost overruns and delays, and I

will quote from the paper for you.

‘‘There are too many programs chasing too few dollars.’’ Sound

familiar? ‘‘And technologies are often not mature enough to go into

production, and it takes too long to design, develop and produce a

system.’’

Now, the latter part, of course, means, to me, you can’t bend the

laws of physics. You may be asking something to be produced that

is, by definition, challenging or maybe impossible to do.

And I don’t certainly mind spending money to find out whether

something can’t be done. Sometimes that is even more important

knowledge to gain than actually accomplishing something that you

set out to do and it turns out you could actually do it.

Rushing something into production when it is not really ready,

because, politically, that seems like something that people want to

do, again, that is bending the laws of physics sometimes.

And then too many programs chasing too few dollars, and it may

not even be, in my judgment, too many programs, it may be just

that the programs themselves have too few dollars, because the

costs associated with it become exponential rather than arithmetic.

But I still think it is probably worth all of our time to take a look

at that, not so much with the idea of refuting or getting into an

arm-wrestling match with Mr. Sullivan and his colleagues at the

GAO, but maybe to give us some perspective on what our difficulties are here in making sensible recommendations by virtue of cost

analysis and mission requirements and the human dimension that

has to come into play in making all these decisions.

You are bound to get references to this study, I think, in days

and weeks to come. So we might as well all take a good look at

it.

I don’t know whether we are going to have a hearing or a briefing on it where we invite commentary where it seems pertinent,

but I am thinking of doing that. Okay?

Secretary PAYTON. Yes, sir.

Mr. ABERCROMBIE. Thank you very much.

[Whereupon, at 3:26 p.m., the subcommittee was adjourned.]

A P P E N D I X

APRIL 1, 2008

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QUESTIONS AND ANSWERS SUBMITTED FOR THE

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QUESTIONS SUBMITTED BY MR. ABERCROMBIE

Mr. ABERCROMBIE. Using Contract Logistics Support for the C–17 is very expensive. Does the Air Force have any future plans to transition more of C–17

sustainment operations to organic ‘‘blue-suit’’ sustainment? Do you feel the Department has a good grasp on how to determine whether or not Contractor Logistics

Support is more cost effective than organic sustainment? ’

Ms. PAYTON. [The witness did not respond in a timely manner.]

Mr. ABERCROMBIE. Has Lockheed Martin signed a contract with General Electric

for the new C–5 engines with unit costs that support the overall C–5 RERP cost

estimate developed by the Cost Analysis Improvement Group during the NunnMcCurdy breach certification process?

Ms. PAYTON. [The witness did not respond in a timely manner.]

Mr. ABERCROMBIE. The Air Force included $650.8 million on its Unfunded Requirements List for procurement of an additional 8 C–130Js and 2 JCA Special Operations Aircraft. Is the Air Force requirement for C–130 greater than 395 aircraft

and can you explain to us the Special Operations version of the JCA and if a JROC

validated requirement exists for the platform?

General LICHTE. [The witness did not respond in a timely manner.]

Mr. ABERCROMBIE. When is the interim report due, then?

General SCHWARTZ. An initial review of the Civil Reserve Air Fleet viability study

is due June 20, 2008. United States Transportation Command will accomplish the

final review by July 18, 2008. Pertinent insights will be available within a week

after the accomplishment of our review. The command is negotiating with the federally-funded research and development center conducting the study to make available to the House Armed Services Committee staff one or more individuals conducting the study for preliminary observations and to answer questions prior to the

Committee mark-up of the Defense Authorization Bill.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the 2005

MCS states that 111 ‘‘modernized and reliability improved’’ C–5 are needed to meet

the strategic airlift requirements of the Department, but the newly certified C–5

program will only provide the Department with 52 modernized and reliability improved C–5 aircraft. Why does the new program of record counter the 2005 MCS

that was used as the analytical basis for determining airlift requirements?

Ms PAYTON. The C–5 Reliability Enhancement and Re-engining Program (RERP)

Nunn-McCurdy certification process considered fourteen alternatives to meet organic strategic airlift requirements. Each alternative was evaluated on its ability to

meet strategic airlift requirements as well as on program acquisition cost, life cycle

cost and affordability within the Future Years Defense Program. USD (AT&L) determined that of all the alternatives, fully modernizing 52 C–5s provides the greatest military capability at the lowest cost. It is my role, as the senior Air Force Acquisition official, to ensure the Air Force executes the Nunn-McCurdy certified program.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the 2005

MCS states that 111 ‘‘modernized and reliability improved’’ C–5 are needed to meet

the strategic airlift requirements of the Department, but the newly certified C–5

program will only provide the Department with 52 modernized and reliability improved C–5 aircraft. Why does the new program of record counter the 2005 MCS

that was used as the analytical basis for determining airlift requirements?

General LICHTE. It was determined through the Nunn-McCurdy process and vetted by the Joint, Requirements Oversight Council (JROC) that the required capability of the MCS strategic airlift fleet (180 C–17s/112 ‘‘modernized and reliability improved’’ C–5s) equates to 33.95 MTM/D. This capability requirement can be achieved

by varying the strategic airlift fleet mix. Since the contribution of the C–5 fleet is

being reduced by only RERPing the B’s, additional C–17s will be needed to make

up for the MTM shortfall. A fleet of 205 C–17s and 111 C–5s (52 C–5Ms & 59 C–

5As) exceeds the 33.95 MTM/D requirement.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the 2005

MCS states that 111 ‘‘modernized and reliability improved’’ C–5 are needed to meet

the strategic airlift requirements of the Department, but the newly certified C–5

98

program will only provide the Department with 52 modernized and reliability improved C–5 aircraft. Why does the new program of record counter the 2005 MCS

that was used as the analytical basis for determining airlift requirements?

General SCHWARTZ. It was determined through the Nunn-McCurdy process and

vetted by the Joint Requirements Oversight Council (JROC) that the required capability of the Military Capabilities Study strategic airlift fleet (180 C–17s/112 ‘‘modernized and reliability improved’’ C–5s) equates to 33.95 million-ton-miles per day

(MTM/D). This capability requirement can be achieved by varying the strategic airlift fleet mix. Since the contribution of the C–5 fleet is being reduced by only completing the Reliability Enhancement & Re-engining Program on the B’s, additional

C17s will be needed to make up for the MTM/D shortfall. A fleet of 205 C–17s and

111 C–5s (52 C–5Ms & 59 C–5As) accomplishes the 33.95 MTM/D requirement. I

believe this is the correct fleet mix for the future. I reached this opinion by combining the analysis of available MTM/D capability, fleet mission capable rates, the annual flying hour program, average cost per flying hour, total number of organic aircraft tails, available pallet capacity, and average age of the fleet.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the Air

Force program of record is 189 C–17 aircraft for which all funding has been appropriated. However, no funding has been requested in the FY09 budget request for

either continued C–17 procurement or production line shutdown. What does the Air

Force intend to do with the C–17 production line in fiscal year 2009 given that the

last Air Force aircraft will be delivered in June 2009? How much will it cost to shutdown the C–17 production line?

Ms PAYTON. The Air Force intends to comply with any direction that may be provided by the FY2009 National Defense Authorization and Defense Appropriations

Acts. Current estimates for shutdown are $485M assuming no FY08 procurement.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the Air

Force program of record is 189 C–17 aircraft for which all funding has been appropriated. However, no funding has been requested in the FY09 budget request for

either continued C–17 procurement or production line shutdown. What does the Air

Force intend to do with the C–17 production line in fiscal year 2009 given that the

last Air Force aircraft will be delivered in June 2009? How much will it cost to shutdown the C–17 production line?

General LICHTE. With no additional USAF procurement above 190 aircraft, the

Boeing C–17 production line may begin to shutdown in 2008. The last contracted

foreign customer delivers Jun 08 (UK–6) and the final production line C–17 (USAF

190) delivers in Aug 09. Boeing is currently at risk protecting long lead items for

30 aircraft. C–17s have a 34 month build time. Without commitment for more procurement, Boeing may halt production on protected aircraft.

Current estimates for shutdown are $485M. If additional aircraft are procured,

the shutdown is deferred and shutdown costs increase due to inflation.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the Air

Force program of record is 189 C–17 aircraft for which all funding has been appropriated. However, no funding has been requested in the FY09 budget request for

either continued C–17 procurement or production line shutdown. What does the Air

Force intend to do with the C–17 production line in fiscal year 2009 given that the

last Air Force aircraft will be delivered in June 2009? How much will it cost to shutdown the C–17 production line?

General SCHWARTZ. With no additional U.S. Air Force procurement above 190 programmed aircraft, the Boeing C–17 production line may begin to shutdown in 2008.

The last contracted foreign customer delivers June 2008 and the final production

line C–17 delivers in August 2009. Boeing is currently at risk protecting long lead

items for 30 aircraft. C–17s have a 34 month build time. Without commitment for

more procurement, Boeing may halt production on protected aircraft.

Current estimates for shutdown are $485 million. If additional aircraft are procured, the shutdown is deferred and shutdown costs increase due to inflation.

Mr. ABERCROMBIE. General Schwartz, you stated in November 2007 that you require 205 C–17s to meet your airlift requirements. What analytical basis did you

use to determine that 205 C–17s is what you require and will you submit it to the

Subcommittee?

General SCHWARTZ. As I stated in a November, 2007, letter to Senator Levin, I

believe 205 C–17s and 111 C–5s is the correct fleet mix for the future. I reach this

opinion by combining the analysis of available million-ton-miles per day (MTM/D)

capability, fleet mission capable rates, the annual flying hour program, average cost

per flying hour, total number of organic aircraft tails, available pallet capacity, and

average age of the fleet. Taking these factors together, I personally conclude 205/

111 is correct.

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The analysis behind this conclusion compared various fleet combinations of C–17s

and C–5s, all with MTM/D capacity equal to the previously programmed fleet of 180

C–17s and 112 fully, modernized C–5s - the strategic airlift fleet capability requirement described in the 2005 Mobility Capability Study. Specifically, if only the C–

5B fleet undergoes the Reliability Enhancement and Re-Engining Program (RERP)

and C–5As are retained without RERP, a total of 205 C–17s are required to retain

the equivalent capacity.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the 2005

MCS did not take into account new and critical planning factors such as: The end

strength increases of 92,000 personnel for the Army and Marine Corps; mobility requirements of the Army’s Future Combat System and Modularity concepts of employment; the recent announcement by Army officials that the Army MannedGround Vehicle is too large to be transported by a C–130 aircraft; the 159% overutilization rate of the current fleet of C–17 aircraft; and the use of C–17s in multiuse roles for which the C–17 is being used extensively in current operations. Is it

in the best interest of the Nation to close the only strategic airlift production line

given these important factors that were not considered in the MCS?

Ms PAYTON. Our current C–17 program of record is based on the 2005 Mobility

Capabilities Study (MCS) and Quadrennial Defense Review (QDR), the last validated strategic airlift requirements. As you noted, the 2005 MCS did not take into

account recent emerging factors. In Jan 08, we initiated another comprehensive

study to address current airlift requirements. This study will also take into account

the recent decision to restructure the C–5 modernization program. The study will

not produce findings until mid-2009. Unfortunately, the study’s completion date is

at odds with the pending C–17 production line closure. Without procurement of additional C–17s, the production line will begin to shutdown in mid-2008 as the last

contracted C–17 is built, and delivered in Aug 09. Without speculating on the results of the study, closing the C–17 line prior to the study’s completion would be

detrimental if the study determines additional C–17s are required.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the 2005

MCS did not take into account new and critical planning factors such as: The end

strength increases of 92,000 personnel for the Army and Marine Corps; mobility requirements of the Army’s Future Combat System and Modularity concepts of employment; the recent announcement by Army officials that the Army MannedGround Vehicle is too large to be transported by a C–130 aircraft; the 159% overutilization rate of the current fleet of C–17 aircraft; and the use of C–17s in multiuse roles for which the C–17 is being used extensively in current operations. Is it

in the best interest of the Nation to close the only strategic airlift production line

given these important factors that were not considered in the MCS?

General LICHTE. The ongoing Mobility Capabilities and Requirements Study

(MCRS) will consider factors not initially identified by the 2005 Mobility Capabilities Study (MCS). The results of this study may require additional capacity, beyond

the current program of record of 190 C–17s and 111 (52Ms &59As). During the

Nunn-McCurdy process for the C–5 RERP Program, the Joint Requirements Oversight Council (JROC) determined that 33.95 MTM/D of organic strategic airlift capacity is essential to national security. The current program of record of 190 C–17s

and 111 C–5s (52 C–5Ms & 59 C–5As) does not provide 33.95 MTM/D of organic

capacity. A fleet of 205 C–17s and 111 C–5s (52 C–5Ms & 59 C–5As) exceeds the

33.95 MTM/D, requirement, however congressional assistance is required to continue production beyond the current program for 190 C–17s.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, the 2005

MCS did not take into account new and critical planning factors such as:The end

strength increases of 92,000 personnel for the Army and Marine Corps; mobility requirements of the Army’s Future Combat System and Modularity concepts of employment; the recent announcement by Army officials that the Army MannedGround Vehicle is too large to be transported by a C–130 aircraft; the 159% overutilization rate of the current fleet of C–17 aircraft; and the use of C–17s in multiuse roles for which the C–17 is being used extensively in current operations.Is it

in the best interest of the Nation to close the only strategic airlift production line

given these important factors that were not considered in the MCS?

General SCHWARTZ. The ongoing Mobility Capabilities and Requirements Study

(MCRS) will consider factors not initially identified by the 2005 Mobility Capabilities Study (MCS). The results of this study may require additional capacity, beyond

the current program of record of 190 C–17s and 111 C–5s (52 C–5Ms & 59 C–5As).

During the Nunn-McCurdy process for the C–5 Reliability Enhancement & ReEngining Program, the Joint Requirements Oversight Council (JROC) determined

that 33.95 million-ton-miles per day (MTM/D) of organic strategic airlift capacity is

essential to national security. The current program of record of 190 C–17s and 111

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C–5s (52 C5Ms & 59 C–5As) does not provide 33.95 MTM/D of organic capacity. A

fleet of 205 C–17s and 111 C–5s (52 C–5Ms & 59 C–5As) will make possible the

33.95 MTM/D requirement and therefore I cannot recommend terminating the C–

17 production line at this time.

Mr. ABERCROMBIE. General Lichte and General Schwartz, do you know of any

commercial markets for Fee-for-Service providers? If there are none, would commercial air carriers still be competitive to the organic tankers?

General LICHTE. The Air Force is not aware of a commercial market for Fee-forService Air Refueling providers. Historically, air to air refueling has been the domain of military operations. One company, Omega Air Inc., has the capability to refuel US Naval probe-equipped aircraft through an active government contract. It is

our understanding, however, that Omega does not refuel commercial (non-military)

aircraft.

Commercial air carriers utilized in an air to air refueling role are not competitive

with organic tankers since Omega Air is currently the only commercial source and

their operational commercial refueling fleet size is small. Boom/receptacle refueling

comprises the majority of Air Force refueling operations. Based on recent industry

responses to a government request for information, there is no existing commercial

capability, including Omega Air, that can refuel receptacle-equipped Air Force aircraft. The most recent industry information indicates it will take over 18 to 24

months from contract award to develop, integrate, test, and certify/qualify a commercial boom capability ready to refuel Air Force aircraft.

Mr. ABERCROMBIE. General Lichte and General Schwartz, do you know of any

commercial markets for Fee-for-Service providers? If there are none, would commercial air carriers still be competitive to the organic tankers?

General SCHWARTZ. The Air Force is not aware of a commercial market for Feefor-Service Air Refueling providers. Historically, air to air refueling has been the domain of military operations. One company, Omega Air Inc., has the capability to refuel U.S. Naval probe-equipped aircraft through an active government contract;

however it is our understanding that Omega does not refuel commercial (non-military) aircraft.

Commercial air carriers utilized in an air to air refueling role are not competitive

with organic tankers since there is only one current commercial source (Omega Air)

and their operational commercial refueling fleet size is small. Boom/receptacle refueling comprises the majority of Air Force refueling operations and based on recent

industry responses to a government request for information, there is no existing

commercial capability, including Omega Air, that can refuel Air Force (receptacle

equipped) aircraft. Responses from industry indicate it will take over 18 to 24

months to develop, integrate, test, and certify/qualify a commercial capability.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, insurance

coverage and limitations have been raised as a potential barrier to participation by

commercial carriers. How could this barrier be overcome?

General SCHWARTZ. The Air Force has formed a team to address all issues associated with Fee-for-Service Pilot Program. We are currently engaged in a dialogue

with industry, through a request for information, to discuss issues that present challenges to the execution of this pilot program. Our findings thus far indicate insurance for several potential commercial providers of air refueling services may be prohibitively expensive or not available. This may require the government to assume

risk through indemnification of some commercial providers offering refueling services for Air Force aircraft. We hope to address insurance and all other concern in

greater detail once we have completed the market research phase of this effort.

Mr. ABERCROMBIE. Ms. Payton, General Schwartz, and General Lichte, insurance

coverage and limitations have been raised as a potential barrier to participation by

commercial carriers. How could this barrier be overcome?

General LICHTE. The Air Force has formed a team to address all issues associated

with the Fee-for-Service Pilot Program. Through a request for information, we are

discussing with industry issues that present challenges to the planning and execution of this pilot program. Our findings thus far indicate insurance for several potential commercial providers of air refueling services may be prohibitively expensive

or not available to some. Based on our dialogue with industry all potential commercial providers offering refueling services for Air Force aircraft require indemnification while conducting refueling operations. We have not discovered alternative solutions to this issue but we hope to address insurance, indemnification, and all other

concerns in greater detail once we have completed the market research phase of this

effort.

General SCHWARTZ. The Air Force has formed a team to address all issues associated with Fee-for-Service Pilot Program. We are currently engaged in a dialogue

with industry, through a request for information, to discuss issues that present chalVerDate 22-MAR-2001 07:26 Aug 20, 2008 Jkt 043093 PO 00000 Frm 00104 Fmt 6601 Sfmt 6621 C:\DOCS\110-140\092250.000 HNS1 PsN: HNS1
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lenges to the execution of this pilot program. Our findings thus far indicate insurance for several potential commercial providers of air refueling services may be prohibitively expensive or not available. This may require the government to assume

risk through indemnification of some commercial providers offering refueling services for Air Force aircraft. We hope to address insurance and all other concerns in

greater detail once we have completed the market research phase of this effort.

Mr. ABERCROMBIE. General Schwartz, will you attempt to incorporate Fee-forService provides into the Civil Reserve Air Fleet program?

General SCHWARTZ. Until the Fee-for-Service Pilot Program test phase is complete, we won’t be able to determine whether commercial air refueling Fee-for-Service providers are compatible with Civil Reserve Air Fleet requirements and regulations. If proven and compatible, incorporating into the CRAF-like arrangement

would be a logical next step.

Mr. ABERCROMBIE. General Schwartz, why do you believe we must move forward

with this Assured Business Model approach now—even though it has not been

shown to be necessary and it is unknown if it would actually provide the intended

effect?

General SCHWARTZ. Our intent in seeking authority for the Assured Business

model is to allow sufficient time to develop an implementation process prior to the

inevitable decline in post-Operation Iraqi Freedom business levels. Doing so now,

while there is still ample business, will enable us to implement the concept under

relatively benign conditions. It will give us time to improve related contract practices and techniques before the situation reaches a critical juncture. Civil Reserve

Air Fleet (CRAF) carriers are unanimous in their support for Assured Business as

a means of stabilizing future business levels.

Further, the Assured Business concept should not be considered a stand-alone

process. By itself, it is not large enough to solve all CRAF problems. It is intended

to be a ‘‘no extra cost to the government’’ process to provide stability to the CRAF

program and thus more attractive to United States air carriers. It has the potential

to provide the Department additional time as we explore other options. We are already researching other possible changes to enable CRAF to meet future challenges.

We have added questions related to these issues to the CRAF study mandated by

the fiscal year 2008 National Defense Authorization Act.

Assured Business should be viewed within the context of these other potential

changes. Depending on the future health of the United States air carrier industry,

additional changes may not be needed. The Assured Business concept is intended

to set the stage for a reinvigorated CRAF by providing a useful tool for contract

management, even as we explore further needed program refinements.

Mr. ABERCROMBIE. Ms. Payton and General Lichte, why were the necessary infratheater airlift studies to determine whether an actual need or requirement existed

for JCA initiated and completed after JCA contract award? Is this approach prudent

and do you think it fully informs decision makers on how taxpayer funding should

be invested by the Department?

General LICHTE. In May 2007, USD/AT&L found that the Army’s Analysis of Alternatives, with addendum, sufficient to meet the requirements established for the

analysis to support an initial JCA acquisition program baseline of up to 75 aircraft.

Air Mobility Command and the Air Force accept the outcome of the Army’s AoA.

Subsequently, USD/AT&L authorized 78 JCAs, split between the Army and Air

Force, 54–24 respectively, in his June 2007 Acquisition Decision Memorandum. The

contract was not awarded until these actions occurred.

During the last half of 2007, Air Mobility Command sponsored a RAND study

commonly referred to as the Fleet Mix Analysis (FMA). The purpose of the FMA

was to identify the most cost effective solution for maintaining sufficient

intratheater airlift capability and included analysis to determine Air Mobility Command requirements for JCAs beyond the 78 (54 Army/24 Air Force) previously approved by USD/AT&L. The study concluded that the stretch variant of the C–130J

is the most cost effective solution in performing the intratheater airlift mission.

There are other emerging and specialized mission areas such as supporting

AFRICOM, special operations, and Air National Guard support of FEMA for which

the specialized capabilities of the C–27 may be a good fit. The Air Force is interested in further analysis of those areas. I will defer comment on additional Air

Force JCAs to Ms. Payton, as the Air Force lead for acquisition.

Mr. ABERCROMBIE. Ms. Payton and General Lichte, why were the necessary infratheater airlift studies to determine whether an actual need or requirement existed

for JCA initiated and completed after JCA contract award? Is this approach prudent

and do you think it fully informs decision makers on how taxpayer funding should

be invested by the Department?

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Ms. PAYTON. The requirement for the 78 Joint Cargo Aircraft is based on the

Army’s Time Sensitive Mission Critical mission analysis of alternatives. OSD determined that the mission would be split with the Army receiving 54 aircraft and the

Air Force receiving 24 aircraft. The analysis was completed and thoroughly vetted

before the decision to award a contract for the aircraft.

Mr. ABERCROMBIE. Ms. Payton, the unit cost of the Air Force JCA is $60.7 million

per aircraft. The Army’s unit cost of the JCA is $36.6 million per aircraft. Can you

explain to the Subcommittee the significant cost difference between the Army and

Air Force version of the two aircraft?

Ms. PAYTON. Let me clarify that there is only one version of the Joint Cargo Aircraft. The Army and Air Force are procuring the same version of the C–27 for the

same price, which is about $31 million per aircraft. The JCA program acquisition

procurement cost is about $44 million per aircraft for both Services. The costs you

referred to are derived from the support strategies assumed for each service in order

to establish the program cost baseline. A common support strategy has not been determined, so the Department of Defense directed the program cost estimate be based

on the way each Service traditionally supports aircraft. Army costs are based on

Contractor Logistics Support using Operations & Maintenance funding, which is not

part of the procurement unit cost quoted. Air Force costs are based on organic support, including establishment of depot maintenance and service provided training.

These items are purchased with investment funding and are therefore included in

the Air Force procurement unit cost. The long-term sustainment and training strategies will be determined at the Full Rate Production decision and will be the same

for each Service.

Mr. ABERCROMBIE. Ms. Payton, the Army is choosing to use Contractor Logistics

Support (CLS) to procure its initial spares, sustain its JCA aircraft and to train its

JCA aircrews and maintainers. What analysis was behind the Air Force decision to

not pursue Contractor Logistics Support as its acquisition strategy for these items?

What benefits did the Air Force see in organic support?

Ms. PAYTON. No decision has been made to use organic support. Both Services will

utilize the same long-term sustainment and training strategy. We have initiated

depot support and training studies to support determination of a common

sustainment and training strategy at the Full Rate Production decision. For planning purposes only, the Air Force budgeted funding in the FYDP for organic support

since we traditionally use this support strategy, whereas the Army traditionally

uses contract support and budgeted accordingly. We will update FYDP funding requirements when a long-term strategy is determined at the Full Rate Production

decision. Prior to the Full Rate Production decision, both Services will utilize Interim Contractor Support and Training.

Mr. ABERCROMBIE. Ms. Payton, since air refueling tankers currently are not available in the commercial market, how would the development and conversion of aircraft to a refueling tanker be paid for? Wouldn’t all such costs be passed on to the

Air Force in the fees it pays?

Ms. PAYTON. Up front costs for development and conversion of commercial aircraft

into commercial tankers would be paid for by industry. Those costs would be amortized over the length of the fee for service pilot program and therefore passed on

to the Air Force in the fees it pays.

Mr. ABERCROMBIE. General Lichte, the Air Force requested $3.9 billion for procurement of an additional 15 C–17s on its Unfunded Requirements List. Given this,

is the actual Air Force requirement for C–17s greater than 198 aircraft that have

been authorized?

General LICHTE. The ongoing Mobility Capabilities and Requirements Study

(MCRS) will consider factors not initially identified by the 2005 Mobility Capabilities Study (MCS). The results of this study may require additional capacity, beyond

the current program of record of 190 C–17s and 111 (52Ms & 59As). During the

Nunn-McCurdy process for the C–5 RERP Program, the Joint Requirements Oversight Council (JROC) determined that 33.95 MTM/D of organic strategic airlift capacity is essential to national security. The current program of record of 190 C–17s

and 111 C–5s (52 C–5Ms & 59 C–5As) does not provide 33.95 MTM/D of organic

capacity. As stated in the USD(AT&L) letter to Congress dated 14 Feb 08, Congressional assistance is required to continue production beyond the current program for

190 C–17s with a goal of 205 C–17s and 111 C–5s (52 C–5Ms & 59 C–5As) that

will provide the 33.95 MTM/D organic strategic airlift capacity validated by the

JROC as essential to national security.

Mr. ABERCROMBIE. General Lichte, in testimony last year before the Committee

in November, 2007, both Secretary Wynne and General Mosley articulated concerns

about the impact on organic resources and the Air Force flying hour program. How

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does the Air Force intend to address those concerns as it moves forward with a pilot

program?

General LICHTE. If AMC is required to fund the Fee-for-Service (FFS) aircraft

from our tanker flying hour programs, we will be unable to keep our current authorized tanker aircrew force structure fully qualified. Flying hours for AMC tanker aircrews are earned to meet aircrew currency events only. Missions performed by FFS

aircraft will not reduce active duty training requirements. There are no additional

hours added to the programs to meet customer refueling needs. It takes 1,000 flying

hours to keep 5.3 crews, or 2% of total active duty tanker crews, current for a year.

Therefore, we will work with the Air Staff to ensure that the FFS pilot program

does not negatively impact our organic flying hour program requirements.

Mr. ABERCROMBIE. If the current Congressional restriction for prohibiting C–5A

retirement was lifted, does the Air Force desire to retire any C–5A aircraft?

General LICHTE. The Mobility Capabilities Study calls for a range of 292–383

inter-theater airlift aircraft with a minimum million ton-mile per day (MTM/D) capability of 33.95 MTM/D. Further, the FY08 National Defense Authorization Act

(NDAA) calls for a minimum of 299 strategic tails. The current program of record

is 190 C–17s and 111 C–5s with 52 of the C–5s validated to receive the Reliability

Enhancement and Re-Engining Program (RERP). A fleet of 52 RERPed C–5s, 59

non-RERP C–5s and 205 C–17s, assures AMC of meeting known requirements.

Given the maintenance challenges of the C–5A, if the fiscal environment allowed for

additional C–17s beyond 205, the Command would retire the aging A-models onefor-one based on current requirements.

Mr. ABERCROMBIE. General Lichte, what impact will this have on organic training

and flying missions?

General LICHTE. Since CRAF missions are funded through the Transportation

Working Capital Fund (TWCF), there is no impact to the organic flying hour programs.

Mr. ABERCROMBIE. What impacts do Type-1000 storage Congressional restrictions

on retired aircraft have on maintaining current aircraft fleets? Can you assign a

monetary value of the Type-1000 storage impacts as it concerns maintaining the C–

130 and KC–135R fleets of aircraft, and the costs involved to maintain retired aircraft in Type-1000 storage status? What is the cost avoidance if Type-1000 storage

restrictions were lifted on C–130 and KC–135E aircraft?

General LICHTE. The Type 1000 storage restricts the Air Force from using the

KC–135E and C–130E aircraft for spare parts. One example of how this restriction

affects maintaining the fleet is the KC–135 autopilot. In December 2005, 94 new

autopilot processors were purchased at a cost of $95K each ($8.93M total). Access

to these critical components could offset many similar costs in the future.

The initial cost to the USAF nearly doubles for Type 1000 vs. full retirement and

does not allow salvage of critical spare parts. The first year bill for the KC–135 goes

from $1.1M for 48 aircraft for full retirement to $1.9M for placement into Type 1000

storage. Additionally, there will be a 4 year recurring cost of $1.6M for those aircraft

to remain in Type 1000 storage. The initial cost for interring 24 C–130s into Type

1000 storage is $799K and the 4-year recurring cost is $900K; full retirement costs

$468K.

Removal of the Type 1000 restrictions would provide the taxpayer a total cost

avoidance of approximately $3.6M in the first 4 years alone. This does not include

the cost savings that would be provided with access to the aircraft for spare parts.

I defer the question ‘‘Can you assign a monetary value of the Type-1000 storage

impacts as it concerns maintaining the C–130 and KC–135R fleets of aircraft. . .’’

to the AFMC/CC, Gen. Carlson, because this relates directly to spare parts and aircraft sustainment that are under AFMC’s responsibility.

QUESTIONS SUBMITTED BY MR. HUNTER

Mr. HUNTER. While we understand that Families First is going to begin coming

on-line in April 2008, what is the current timeline for full deployment of the program and the new DPS support system and when do you expect it to be fully operational?

General SCHWARTZ. While portions of Families First are already on-line, a protest

to the Government Accounting Office from the Household Goods Forwarders Association of America (HHGFAA) on some portions of Families First has caused a delay

in awarding shipments in Defense Personal Property System (DPS). We expect to

continue roll-out in mid July 2008 to the initial 18 sites. At that point, after further

consultation with each of the military Services, we will schedule the roll-out with

the remaining sites.

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Mr. HUNTER. What problems with Families First and the DPS system, including

information technology (IT) problems, still need to be corrected in order for the program and system to be fully operational?

General SCHWARTZ. The Defense Personal Property System (DPS) system currently has no known significant information technology problems. The Families

First and DPS system may be impacted as a result of the current Government Accountability Office (GAO) action. A GAO protest by industry concerning some elements of the Families First program could potentially require additional DPS work

that could incur additional cost and schedule impacts.

Mr. HUNTER. What are the specific costs associated with addressing each of the

remaining IT problems and do you have funding to address these problems before

transportation offices begin making awards for the movement of households goods

under the new program?

General SCHWARTZ. The Defense Personal Property System (DPS) currently has

no known significant information technology problems. DPS is adequately funded to

meet capabilities for FY08 and FY09. The Families First and DPS systems may be

impacted as a result of the current Government Accountability Office (GAO) action.

A GAO protest by industry concerning some elements of the Families First program

could potentially require additional DPS work that could incur additional cost and

schedule impacts.

QUESTIONS SUBMITTED BY MR. SAXTON

Mr. SAXTON. General Schwartz, the KC–45, I am told, has a wingspan of real

close to 200 feet, it is 197 or 198, and the maximum gross takeoff weight of over

500,000 pounds.

Will the size and weight of the KC–45 present challenges to the operational employment of the KC–45, and are there airfields that you will not be able to operate

the KC–45 from where we are currently operating the KC–135?

General SCHWATZ. There is no requirement in the Capability Development Document to operate the KC–45 from all KC–135 airfields. Because the maximum weight

is a key factor in determining airfield suitability, we used the KC–10 to answer your

question as it has a heavier maximum weight than the KC–45. The Airport Suitability and Restrictions Report contains 1,755 worldwide airfields that are suitable

for the KC–135. Of these airfields, only 32 are unsuitable for the KC–10. Therefore,

we can reasonably establish that approximately 98% of the airfields currently available to the KC–135 would also be available to the KC–45. This would be, in my

opinion, a manageable operational situation.

QUESTIONS SUBMITTED BY MS. BORDALLO

Ms. BORDALLO. General Schwartz, Commander, MSC, in his Report to Congress

in May 2004, assured us that MSC would only send ships to foreign shipyards when

‘‘directed by operational necessity’’. Did MSC, under your jurisdiction, make the decisions that ‘‘operational necessity’’ required Tippecanoe and Rappahannock to be

sent to Singapore for repair? What was the basis for these decisions? How are ‘‘operational necessity’’ decisions made? What are the specific criteria for determining

‘‘operational necessity’’?

General SCHWARTZ. The USNS Rappahannock and USNS Tippecanoe are Fleet

Replenishment Oilers in the Naval Fleet Auxiliary Force (NFAF). These vessels perform a Navy unique mission and are not among forces assigned to the United States

Transportation Command. The Navy coordinates scheduling and execution of maintenance for NFAF ships to meet operational requirements. As such, I respectfully

defer this question to the Department of the Navy.

Ms. BORDALLO. General Schwartz, U.S. Transportation Command and the Military Sealift Command (MSC) as ship operating contracts and long term charter contracts with commercial shipping companies for moving military cargo and for

prepositioning requirements. How do you enforce the requirements of Section 7310

of Title 10 with regard to these private ship operating companies to ensure these

vessels are repaired at U.S. domestic shipyards?

General SCHWARTZ. Repair and overhaul of all MSC ships are conducted in accordance with the provisions of 10 U.S.C. 7310. In cases where a private company

operates a government-owned ship, the company is required to award and manage

subcontracts for necessary overhaul and repair in compliance with Title 10. MSC

enforces compliance by designating the bid area for the work and granting subcontracting approval to the operating company before an award is made.

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Privately-owned ships under time charter to MSC, other than time-chartered

ships in the Maritime Prepositioning Ship (MPS) program, conduct only necessary

voyage repairs while under contract. Overhauls and maintenance are performed outside of the charter period, and are therefore not subject to the provisions of 10

U.S.C. 7310. For MPS vessels, overhaul and maintenance are performed in shipyards in the U.S. or Guam in association with scheduled equipment offloads.

Ms. BORDALLO. General Schwartz, in 2005, USNS Petersburg, a ship

prepositioned in Guam as part of the Maritime Administration (MARAD) Ready Reserve Force (RRF), and an element of the MSC Pre-positioning Program, was sent

from its homeport of Guam to Singapore for overhaul. At the time, the Memorandum of Understanding (MOU) between U.S. Transportation Command

(TRANSCOM) and MARAD required that repairs to RRF vessels be done in US

shipyards. Yet, that requirement in the MOU has been repeatedly ignored. What

is TRANSCOM doing to ensure that MARAD is complying with the MOU, and that

RRF vessels are being repaired in U.S. domestic shipyards?

General SCHWARTZ. The United States Transportation Command

(USTRANSCOM) maintains a close and continuous relationship with the Maritime

Administration—a staunch advocate of the United States shipyards. In the case of

the SS Petersburg, Guam Shipyard challenged the Maritime Administration’s actions in Federal District Court. The Court did not find that the Maritime Administration violated either statutes or the terms of the 1997 Memorandum of Agreement

(MOA). Subsequently, 10 USC 7310(a) and 50 USC App 1744 were amended.

USTRANSCOM and the Maritime Administration currently are updating the 1997

MOA and this revision will reflect the recent legislative changes. The Maritime Administration continues its compliance with the law, and performs ship repairs in accordance with the revised statute.

QUESTIONS SUBMITTED BY MR. HAYES

Mr. HAYES. The Civil Reserve Air Fleet (CRAF) provides a cost-effective compliment to our organic mobility airlift fleet. You have been a proponent for the recently announced KC–45 Tanker aircraft. I understand the US Air Force recently

released a Request For Information (RFI) to industry to support a Fee-For-Service

Pilot Program as directed by the 2008 Defense Authorization Bill. As the Combatant

Commander responsible for providing airlift and air refueling support to the supported COCOMs, do you see a future where commercial air carriers provide a similar CRAF-like air refueling capability for our nation?

General SCHWARTZ. Until we get the results from our upcoming Fee-for-Service

pilot program, we won’t be able to chart a future for the application of commercial,

Civil Reserve Air Fleet (CRAF)-like, air refueling capability. The pilot program will

determine whether the concept is feasible from a business and operational perspective, while also validating the missions that can be supported with this capability.

Once feasibility and applicability have been determined, we can build upon that to

develop a larger construct for a CRAF-like capability.

Mr. HAYES. Ms. Payton, the 2008 NDAA (Sec 1081) directed the Air Force to conduct a Fee-For-Service (FFS) Pilot Program to determine the feasibility of FFS air

refueling to ‘‘support, augment or enhance the air refueling mission of the Air

Force’’ by utilizing commercial air refueling providers & I understand the Air Force

released a FFS Pilot Program Request For Information (RFI) on 26 Feb 2008. Has

Industry responded to the RFI and what timelines have you established for industry

to deliver this capability? Do you see these timelines as aggressive?

Ms. PAYTON. Industry has responded to the Request for Information by the requested 28 Mar 2008 response date. We are reviewing the RFI responses and held

Government/Industry one-on-one discussions during the week of 14–18 April 2008.

While it is too early in the process to provide a definitive answer to this question,

we hope to gain further insight into industry’s capability to meet the proposed

timeline for providing fee for service refueling to the Air Force in Fiscal,Year 2010.

Initial responses from industry indicate that no potential provider can develop, integrate, test and qualify/certify a boom equipped aircraft prior to the 2010 timeframe

and no provider has indicated that they will develop the proposed capability without

a signed government contract. We may find that through this process the planning

timeline for the Congressionally directed Fee for Service Pilot Program may be aggressive, however we want to be responsive to Congressional direction and the AF’s

commitment to a proof-of-concept for this pilot program. If we find that the current

planning schedule is too aggressive we will adjust our expectations accordingly,

prior to submitting a request for proposal.

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Mr. HAYES. Ms. Payton has Industry responded to the RFI and what timelines

have you established for industry to deliver this capability? Aren’t these timelines

pretty aggressive?

General LICHTE. Industry has responded to the Request for Information by the requested 28 Mar 2008 response date. We are reviewing the RFI responses and held

Government/Industry one-on-one discussions during the week of 14–18 April 2008.

While it is too early in the process to provide a definitive answer to this question,

we hope to gain further insight into industry’s capability to meet the proposed

timeline for providing fee for service refueling to the Air Force in Fiscal Year 2010.

Initial responses from industry indicate that no potential provider can develop, integrate, test and qualify/certify a boom equipped aircraft prior to the 2010 timeframe

and no provider has indicated that they will develop the proposed capability without

a signed government contract. We may find that through this process the planning

timeline for the Congressionally directed Fee for Service Pilot Program may be aggressive, however we want to be responsive to Congressional direction and the AF’s

commitment to a proof-of-concept for this pilot program.. If we find that the current

planning schedule is too aggressive we will adjust our expectations accordingly,

prior to submitting a request for proposal.

Mr. HAYES. General Lichte, what role/responsibilities will the Air Mobility Command have in administering/overseeing the Fee-For-Service Pilot Program?

General LICHTE. We anticipate AMC will have a role in contracting oversight and

payment distributions. We will also provide execution support to identify air refueling support requirements and command and control direction. We will be lead on

working with air refueling users to determine whether contract providers are satisfactorily meeting requirements and work with all parties to identify and mitigate

negative operational or safety trends if they should develop.

Mr. HAYES. General Lichte, how many air refueling requests were not fulfilled in

2007? How many since we began the global war on terror?

General LICHTE. Two hundred sixty six non-supports of 7,589 valid requests—

3.5% non-support rate (Priority 1 and 2 only) were not fulfilled in 2007. One thousand three hundred and fifty eight non-supports of 57,144 valid requests—2.4% nonsupport rate (Priority 1 and 2 only) were not fulfilled since we began the global war

on terror. ‘‘Unfilled’’ is defined as validated missions that went non-supported. This

only reflects Priority 1 & 2 missions; there is no accurate way of capturing unfilled

numbers for Priority 3–5. Air refueling priorities are defined in AFI 11–221. A short

synopsis of priorities is included below:

Priority 1: Presidential-directed missions and operational National Emergency

Airborne Command Post (NEACP) support. Wartime or contingency combat support

designated by (JCS). Special operations support and other programs approved by

the President for top national priority. Deployments to conduct contingency operations and special missions directed by the Secretary of Defense or the JCS. Missions in support of counterdrug operations and operational reconnaissance.

Priority 2: Nonscheduled JCS-directed operational deployments. JCS-directed exercise missions which require air refueling to meet JCS objectives. Extended over

water deployments (aircraft range will not allow a fuel stop en route) or deployments of aircraft tasked for Priority 1 missions for which an en route fuel stop is

not practical. Foreign Military Sales (FMS) case support. (Unless mission qualifies

for a higher priority). Aircraft test operations extended over water. JCS exercise

missions which require air refueling to meet MAJCOM, NAF, or wing objectives.

Employment missions in support of MAJCOM-directed exercises or operations or

MAJCOM-, NAF-, or wing-directed over water deployments for the Marines is

FMFPAC or FMFLANT. Predeployment qualification training.

Priority 3: MAJCOM-, NAF-, or wing-directed redeployments or NAF-directed exercises and ORIs. Intratheater deployments and redeployments. Combat Crew

Training School (CCTS), Replacement Training Unit (RTU), and requalification

training and upgrade training, when air refueling training is accomplished during

the mission. Wing-directed exercises and evaluations. Expeditionary Brigade (MEB).

Priority 4: Missions launched to satisfy US Air Force, Navy, and other DoD agency training requirements.

Priority 5: Unit to unit scheduled non-allocated air refueling (soft air refueling).

QUESTIONS SUBMITTED BY MR. MILLER

Mr. MILLER. AF Special Operations will continue to be integral in the GWOT and

it’s certain these aircraft will continue to be in high demand for the foreseeable future. Specifically, the Special Mission C–130 fleet at AFSOC is being utilized at an

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accelerated rate due to the GWOT and one of the highest priorities for AFSOC is

the recapitalization of their C–130 fleet. What is Air Mobility Command’s role in

ensuring AFSOC C–130 assets are recapitalized and what is the plan for getting

this accomplished?

General LICHTE. AFSOC’s C–130 fleet, much the same as AMC’s C–130 fleet, has

seen increased utilization due to GWOT. As lead command for common modifications across all C–130 variants, AMC oversees the center wing box (CWB) replacement program. AMC has worked closely with AFSOC to accelerate their LD/HD assets into the existing production line in order to mitigate capability gaps. However,

responsibility for AFSOC’s fleet recapitalization does not fall under AMC.

Mr. MILLER. In the FY09 Unfunded Requirements Listing, the Air Force has requested two C–27s to place in AFSOC to develop the AC–27 gunship, and SOCOM

has also stated its priority for this program. Can you elaborate on how the AF will

make this happen and specifically, what role will Air Mobility Command play in

making sure the AC–27 begins development sooner rather than later?

General LICHTE. AMC does not play a role in the AC–27s development or acquisition.

QUESTIONS SUBMITTED BY MR. BISHOP

Mr. BISHOP. How will the new multi-mission KC–45 be used to compliment the

rest of your airlift and refueling fleets? Will it provide better efficiencies?

General SCHWARTZ. This clearly is the case. Even with a significant airlift capability, the KC–45A is a tanker first, the KC–45s primary war-time mission. It serves

as a crucial part of the air bridge that allows us to get forces where they are needed

as soon as possible. As an air refueler with its modern design, efficient engines,

greater fuel capacity (as well as its ability to take on fuel while airborne), greater

range, the ability to deliver fuel via either boom or drogue, coupled with its nightvision compatibility and defensive systems, make it a very effective platform for replacing our aging KC–135 fleet. Additionally, its cargo/passenger-carrying capabilities will make unit self-deployments and other lift missions less demanding on our

existing airlift assets. Finally, the KC–45 also has the capability to perform aeromedical evacuation missions, a capability that could be used to augment this vital

mission as well.

Mr. BISHOP. Ms. Payton, at the same time Congress is adding funds to the budget

to keep open the C–17 line, America’s ‘‘only’’ large military airlift production capability (and a top unfunded priority for the Air Force), you are allowing another

power projection capability—aerial refueling—to now be produced primarily by another country (Airbus). What sense does it make for the US—a power projection nation—to not preserve the capability to produce C–17s, aerial refueling aircraft, as

well as aircraft carriers, strategic bombers, etc.

Ms. PAYTON. Whether maintaining existing production lines, or acquiring new

weapon systems, cost effective industrial and technological capabilities are important to national security and military readiness. Participation of allied countries in

the procurement of weapon systems not only fosters competition and innovation in

the industrial base, but the Department of Defense believes it can also promote security cooperation and improve our national security. Regarding the Air Force’s new

aerial refueling aircraft, Northrop Grumman’s major subcontractors outside the

United States are located in Spain, Germany, and France. These three countries are

NATO allies, and the experiences we have had with our NATO allies on other programs have not negatively impacted our national security.

Mr. BISHOP. General Schwartz, how will the new multi-mission KC–45 be used

to compliment the rest of your airlift and refueling fleets? Will it provide better efficiencies?

General SCHWARTZ. That is clearly the case. Even with a significant airlift capability, the KC–45A is a tanker first, the KC–45s primary war-time mission. It serves

as a crucial part of the air bridge that allows us to get forces where they are needed

as soon as possible. As an air refueler with its modern design, efficient engines,

greater fuel capacity (as well as its ability to take on fuel while airborne), greater

range, the ability to deliver fuel via either boom or drogue, coupled with its nightvision compatibility and defensive systems, make it a very effective platform for replacing our aging KC–135 fleet. Additionally, its cargo/passenger-carrying capabilities will make unit self-deployments and other lift missions less demanding on our

existing airlift assets. Finally, the KC–45 also has the capability to perform aeromedical evacuation missions, a capability that could be used to augment this vital

mission as well.

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Mr. BISHOP. Ms. Payton, some are claiming that because the Northrop Grumman

award relies significantly on EADS—Airbus components and airframe, that there is

a risk of having France cut off supplies and future support of this critical system.

How valid are those concerns?

Ms. PAYTON. The experiences we have had with our NATO allies on other programs have not negatively impacted our national security. As an example, the engines that power our KC–135R tankers are manufactured by CFM International, a

joint venture between General Electric and the French company Snecma. Despite

past disagreements between the United States and France over foreign policy, we

have not experienced problems in maintaining these engines. We have no reason to

anticipate negative impacts to our national security due to Northrop Grumman’s

production and sustainment of KC–45 tankers.

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