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i 

57–950 2010

[H.A.S.C. No. 111–129] 

HEARING 

ON

NATIONAL DEFENSE AUTHORIZATION ACT 

FOR FISCAL YEAR 2011 

AND

OVERSIGHT OF PREVIOUSLY AUTHORIZED 

PROGRAMS 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

SEAPOWER AND EXPEDITIONARY FORCES 

SUBCOMMITTEE HEARING 

ON

BUDGET REQUEST FOR DEPARTMENT OF 

THE NAVY SHIPBUILDING ACQUISITION 

PROGRAMS 

HEARING HELD 

MARCH 3, 2010 
(II) 

SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE 

GENE TAYLOR, Mississippi, Chairman 

SOLOMON P. ORTIZ, Texas 

JAMES R. LANGEVIN, Rhode Island 

RICK LARSEN, Washington 

BRAD ELLSWORTH, Indiana 

JOE COURTNEY, Connecticut 

JOE SESTAK, Pennsylvania 

GLENN NYE, Virginia 

CHELLIE PINGREE, Maine 

ERIC J.J. MASSA, New York 

W. TODD AKIN, Missouri 

ROB WITTMAN, Virginia 

ROSCOE G. BARTLETT, Maryland 

J. RANDY FORBES, Virginia 

DUNCAN HUNTER, California 

MIKE COFFMAN, Colorado 

THOMAS J. ROONEY, Florida 

WILL EBBS, Professional Staff Member 

JENNESS SIMLER, Professional Staff Member 

ELIZABETH DRUMMOND, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2010 

Page 

HEARING: 

Wednesday, March 3, 2010, Fiscal Year 2011 National Defense Authorization 

Act—Budget Request for Department of the Navy Shipbuilding Acquisition 

Programs ............................................................................................................... 1 

APPENDIX: 

Wednesday, March 3, 2010 ..................................................................................... 51 

WEDNESDAY, MARCH 3, 2010 

FISCAL YEAR 2011 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST FOR DEPARTMENT OF THE NAVY SHIPBUILDING ACQUISITION PROGRAMS 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Akin, Hon. W. Todd, a Representative from Missouri, Ranking Member, 

Seapower and Expeditionary Forces Subcommittee .......................................... 3 

Taylor, Hon. Gene, a Representative from Mississippi, Chairman, Seapower 

and Expeditionary Forces Subcommittee ........................................................... 1 

WITNESSES 

Blake, Vice Adm. John Terence, USN, Deputy Chief of Naval Operations 

for Integration of Capabilities and Resources ................................................... 7 

Flynn, Lt. Gen. George J., USMC, Deputy Commandant, Combat Development and Integration, and Commanding General, Marine Corps Combat 

Development Command ....................................................................................... 9 

Heebner, David K., Executive Vice President, Marine Systems, General Dynamics Corporation .............................................................................................. 34 

Petters, C. Michael, Corporate Vice President and President, Northrop Grumman Shipbuilding ................................................................................................. 32 

Stackley, Hon. Sean J., Assistant Secretary of the Navy for Research, Development and Acquisition ....................................................................................... 4 

APPENDIX 

PREPARED STATEMENTS: 

Akin, Hon. W. Todd .......................................................................................... 59 

Heebner, David K. ............................................................................................ 91 

Petters, C. Michael ........................................................................................... 75 

Stackley, Hon. Sean J., joint with Vice Adm. John Terence Blake and 

Lt. Gen. George J. Flynn .............................................................................. 61 

Taylor, Hon. Gene ............................................................................................. 55 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 
Page

IV 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Taylor ......................................................................................................... 109 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 
(1) 

FISCAL YEAR 2011 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST FOR DEPARTMENT OF 

THE NAVY SHIPBUILDING ACQUISITION PROGRAMS 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE, 

Washington, DC, Wednesday, March 3, 2010. 

The subcommittee met, pursuant to call, at 2:35 p.m., in room 

HVC–210, Capitol Visitor Center, Hon. Gene Taylor (chairman of 

the subcommittee) presiding. 

OPENING STATEMENT OF HON. GENE TAYLOR, A REPRESENTATIVE FROM MISSISSIPPI, CHAIRMAN, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE 

Mr. TAYLOR. The hearing will come to order. 

Good afternoon, and I want to thank you all for coming. I apologize for the delay in the start, but we had some votes on the House 

floor. Today the subcommittee meets in open session to receive testimony from the Department of the Navy’s witnesses on the shipbuilding budget request for the fiscal year and the proposed shipbuilding plan for the next 30 years. 

Because the shipbuilding plan has such a large effect on the 

shipbuilding industrial base, the subcommittee has requested that 

the leaders of our two largest shipyards appear to discuss how 

their plan in their view affects the industrial base and if they are 

willing to recommend changes to Congress on ways to achieve the 

goals of the shipbuilding plan in a more cost-effective manner. 

First, I would like to make some observations on the shipbuilding 

plan. Some of you may remember a few years ago I referred to the 

shipbuilding plan of the Navy as pure fantasy. Shipbuilding plans 

in the past have been full of unrealistic assumptions about the cost 

of ships and unrealistic assumptions on the amount of money the 

Navy would receive from the Department of Defense to buy those 

ships. 

Then realistic portions of the plan always started just beyond the 

five-year procurement plan because the Navy was not obligated to 

justify its assumptions on cost and budget in the past five years. 

Today I will make a slightly different observation. 

The plan submitted by the Navy this year is not pure fantasy as 

in years past, but it is possibly overly optimistic. It is very optimistic. The plan as submitted by the Navy, if funded and if executed within that funding, would restore the Navy fleet above 300 

ships by 2018; peak at 320 ships in the year 2024; but return to 

a fleet size in the 280s by the year 2032. 
2 

The plan would maintain aircraft carriers at levels of 11, in some 

years 12. The plan would not meet the Marine Corps requirement 

of 38 amphibious assault ships but would hover around the 33 

ships the Navy and Marine Corps have stated is the minimum 

number of ships that would meet an acceptable level of risk. The 

attack submarine force goes below the requirement of 48 boats in 

the year 2024, and stays below that requirement through 2040, 

with a low of 39 boats in the year 2030. 

Although it is very clear that the Navy has worked harder on removing fantasy from the plan, it does not build the number of ships 

at a satisfactory rate to restore our Navy to the full capability that 

I believe is necessary. The Navy was clearly limited in the development of this plan by the amount of funding for ship construction 

they were provided by the Department of Defense. Some relatively 

simple arithmetic indicates that the Navy really needed about $10 

billion more per ship than was provided. 

Leaving aside the issue of underfunding, the shipbuilding plan is 

troubling in a few areas. First, the procurement of amphibious assault ships is occurring in an inefficient manner. The ship construction starts are not spaced to optimize the workforce or its supply chain. You just cannot stop and start shipbuilding programs 

and expect any cost savings in quantity buys or in workforce familiarity. I know that the Navy knows this, and certainly the one official in the Navy who knows it best is sitting at our witness table 

today. 

If the Navy has still decided to place amphibious ships in a plan 

in years which ensure extra cost due to inefficiency, this goes back 

to my previous point that the Navy really needed about $10 billion 

more per year. If that were the only issue with a long-term plan, 

it would probably be fixable, but the real issue facing the Navy is 

the cost to recapitalize the Ohio-class submarine. Billions in development costs followed by 12 years each costing anywhere from $6 

billion to a high of $8.5 billion will crush the rest of the Navy shipbuilding account if the Navy is required to pay the bill. 

The submitted plan assumes the Navy will pay all the costs for 

these boats and has a very optimistic assumption that extra funding will be available to cover some of the costs. During the years 

that these submarines are funded the rest of the Navy shipbuilding 

might be on life support. Minimal levels of shipbuilding construction will occur during these years according to this plan, and the 

Navy will lose over 30 ships from the overall force from 2024 to 

2034, and that is optimistic. 

I have been around here long enough to know that the reality is 

increased funding will likely not be available, and even more significant cuts in the surface fleet could occur. 

On the positive side, the Navy 5-year plan is better than any 

plan that has been submitted in a long time. Fifty new ships, an 

average of 10 per year, is an achievable goal with projected funding. The problem is that the Navy is decommissioning ships as fast 

and, in the case of this year, faster than the Congress can fund 

them. And the overall numbers don’t start to increase until 2016. 

I expect our witnesses to discuss today why this has happened 

and provide this committee with options to retain some of these 

vessels in service while new ships are built to replace them. 
3 

Joining us today on our first panel, the Honorable Sean Stackley, 

Assistant Secretary of the Navy for Research, Development and Acquisition; Vice Admiral Terry Blake, Deputy Chief of Naval Operations for the Integration of Resources and Capabilities; Lieutenant 

General George Flynn, Commander, Marine Corps Combat Development Command, and Deputy Commandant for the Combat Development and Integration. 

A second panel will consist of Mr. Mike Petters, Corporate Vice 

President and President of Northrop Grumman Shipbuilding; and 

Mr. Dave Heebner, Executive Vice President, Marine Systems, 

General Dynamics Corporation. 

I want to thank our witnesses for attending. Again, I apologize 

for the delayed start. 

I now turn to the gentleman from Missouri, Mr. Akin, for any 

opening statement he has. 

[The prepared statement of Mr. Taylor can be found in the Appendix on page 55.] 

STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE 

FROM MISSOURI, RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE 

Mr. AKIN. Thank you, Mr. Chairman. 

Secretary Stackley, Admiral Blake and General Flynn, good 

afternoon and welcome, and we look forward to your testimony 

today. 

The President’s fiscal year 2011 defense budget for the Department of the Navy represents $179 billion for discretionary and war 

funding. This represents an increase of $52 billion over fiscal year 

2010 enactment levels. The news was even better for shipbuilding, 

which saw an increase of $1.9 billion over fiscal year 2010 enactment levels. This is clearly a sign that someone in the Department 

has gotten a message about the value that our maritime forces 

bring to our current and future security. 

I congratulate you and thank you for your advocacy for Navy and 

the Marine Corps personnel and programs. 

With that said, I wish all the news were positive. I have major 

concerns, particularly with the lack of future planning at the DOD 

[Department of Defense] level and our Navy’s out-year budgets. 

The Navy’s long-term shipbuilding plan is based on the 113-ship 

force structure originally set forth in the 2005 Naval Force Structure Assessment, as well as decisions made during the 2010 Quadrennial Defense Review [QDR], yet the 2005 Naval Force Structure 

Assessment did not anticipate the Navy would be given responsibility for regional ballistic missile defense, and the QDR appears to 

have largely focused on the capabilities required for the near to 

midterm, not on the capabilities required for the long term to deter 

and defeat a near-peer competitor. 

Indeed, long-range shipbuilding plan explicitly states in summary, then, the QDR has resulted in revised mission priorities to 

better focus the Department on the war we are in. I am concerned 

that this emphasis on developing capabilities for today’s conflicts 

and assessing risks based in today’s operating environments puts 

our future force in jeopardy. 
4 

Lacking better guidance from the Office of the Secretary of Defense, the Navy and the Marine Corps have offered their best judgment about a reasonable ship construction profile in the form of 

this 30-year shipbuilding plan. It is superior to many previous 

plans in several ways, but the shipbuilding plan acknowledges that 

a new force structure assessment will have to be completed, which 

causes me to question whether or not we can rely on this latest 

plan as a yardstick for assessing the service’s capital building requirements. 

Furthermore, even though QDR states that U.S. forces must be 

able to deter, defend against and defeat aggression in anti-access 

environments, the long-term shipbuilding plan does not appear to 

be driven by this goal. Instead, in the period that the Navy considers most likely to be characterized by a near-peer competitor 

with anti-access capabilities, our forces fall to their lowest levels. 

We can’t wait until that period to attempt to recapitalize our service combatants, attack and guided missile submarines and amphibious forces. If shipbuilding moves too slow, it will be too late. 

On a related issue, I am not convinced that this shipbuilding 

plan adequately addresses the needs for ballistic missile defense 

capable ships. Supposedly this will be considered as part of the new 

force structure assessment. I hope that the assessment does not 

shortchange the other missions that our combatant commanders 

have for these ships or destroyers, particularly our BMD [Ballistic 

Missile Defense] destroyers, who are already in high demand, before the President announced his decision to use Navy assets to defend Europe rather than the ground-based system. 

The Navy is being asked to support a new mission but has not 

been given new resources necessary to succeed. Today I will be interested in your perspectives on the hard choices that were made 

in preparing this shipbuilding plan and whether or not you believe 

the shipbuilding plan meets the Navy in a position of strength— 

puts the Navy in a position of strength to face a near-peer competitor in the far term. 

On a separate note, I know our witnesses realize that I am keenly interested in our Strike Fighter programs. Normally I wouldn’t 

raise this subject in a shipbuilding hearing, but today I hope you 

will have a chance to discuss your ship integration plans for the 

Joint Strike Fighter. Too often we overlook the requirements being 

levied on our ships by the introduction of this fifth-generation 

fighter. 

Thank you again for being here today. I look forward to your testimony. 

And I yield back Mr. Chairman. 

[The prepared statement of Mr. Akin can be found in the Appendix on page 59.] 

Mr. TAYLOR. The Chair thanks the gentleman from Missouri. 

The Chair now recognizes Secretary Stackley. 

STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, DEVELOPMENT AND 

ACQUISITION 

Secretary STACKLEY. Thank you, Mr. Chairman, Representative 

Akin, distinguished members of the subcommittee. Thank you for 
5 

the opportunity to appear before you today to address Navy shipbuilding. And thank you for your steadfast support to provide and 

maintain the Navy and, more importantly, for your commitment to 

our sailors and Marines. 

With the permission of the committee, I would propose to keep 

my opening remarks brief and submit a formal, more detailed 

statement for the record. 

Mr. TAYLOR. Without objection. 

Secretary STACKLEY. Today we are a battle force of 286 ships 

supporting global operations with arguably greater reach, greater 

command of the seas than any navies at any point in history. And 

while we take pride in knowing that our ships, aircraft and weapon 

systems are unmatched at sea, as formidable as our technology 

may be, it is the skill, dedication and resourcefulness of our sailors 

and Marines that gives us our asymmetric advantage. And it is our 

responsibility to place in the hands of these young men and women 

the tools that they need to conduct our Nation’s business under the 

most stressing conditions imaginable to win the fight we are in. 

And two, it is our responsibility to provide the capabilities and capacities to win the next fight. 

The Chief of Naval Operations [CNO] and the Commandant of 

the Marine Corps have outlined those capabilities and capacities in 

what has been referred to as the 313-ship Navy. And to this end, 

the fiscal year 2011 budget request includes funding for nine ships, 

a modest but important step towards meeting the CNO’s and Commandant’s requirements; important, because this year we increased 

Virginia-class fast-attack submarine procurement to two boats per 

year. 

In 2005, then CNO Mullen challenged the program to put the Navy in a position to be able to buy two boats for $4 billion in 

2012. And this year, with Congress’s support, two for four in 2012 

has become two for four in 2011. Important because we increased 

DDG–51 production to two ships in 2011, which alongside the 

Aegis Modernization Program, adds both capability and capacity to 

our fleet’s sea-based missile defense. The success of the Aegis system against ballistic missiles, as demonstrated through at-sea testing, provides a solid foundation for this mission. Important because 

with a competitive down select to a single design for the Littoral 

Combat Ship [LCS] later this year, our 2011 budget request sustains an efficient build rate of two LCS ships per year for the winning shipyard. 

Congress’s support for this revised acquisition strategy has been 

critical to the Navy’s efforts to bring much needed stability and to 

improve affordability on this vital program. Important, because this 

year’s—with this year’s request, we significantly increase our amphibious lift capability with procurement of an LHA–6 amphibious 

assault ship, and our logistics lift capability with procurement of 

a mobile landing platform and a joint high-speed vessel. Additionally, a second joint high-speed vessel has funded another procurement army for a total of 10 ships in fiscal year 2011. 

As we look to the near term, the Navy shipbuilding plan averages 10 ships per year while balancing requirements, affordability 

and industrial-based considerations in the next decade. We have 

placed aircraft carrier procurement on a 5-year cycle, which will 
6 

ensure our ability to sustain an 11-carrier force from the delivery 

of Gerald R. Ford in 2015 through the year 2040. We sustain submarine construction at two boats per year. 

We have cancelled the CGX [Next Generation Cruiser] program 

because of technical risk and affordability concerns, and we will 

continue DDG–51 construction, leveraging a stable and mature infrastructure while increasing the ship’s air and missile defense capabilities through spiral upgrades to the weapons and sensor 

suites. 

And we have restructured the Maritime Prepositioning Force to 

provide enhanced yet affordable sea-basing capabilities. 

In the second half of this decade, we will need to proceed with 

the recapitalization of three major ship programs. We plan to commence procurement of the replacement for the LSD–41 class amphibious ships, following definition of lift requirements for this new 

class. We look to accelerate introduction of our next fleet oiler. T– 

AO(X) [cargo ship] will bring greater efficiency and modern commercial design to our refueling at sea capabilities while also providing critical stability to an important sector of our industrial 

base. 

And most significantly, we will procure the lead ship of the Ohioclass replacement, SSBN(X), in 2019. 

The Navy’s long-range shipbuilding plan fairly outlines the challenges we confront today and for the long term in meeting our 

Navy’s force structure requirements; operational, technical, manufacturing and fiscal challenges all come to bear as we impose upon 

the plan greater cost realism and budget realism. In the most pragmatic terms in balancing requirements, risk, and realistic budgets, 

affordability controls our numbers. 

For different reasons, we face the same imperative that President Franklin Roosevelt faced when he addressed America as the 

arsenal of democracy. He stated, ‘‘All of our present efforts are not 

enough; we must have more ships, more guns, more planes, and 

this can be accomplished only if we discard the notion of business 

as usual.’’ 

The challenge in Roosevelt’s time was to increase production at 

any cost. The challenge in our time is to increase production at an 

affordable cost. And to this end, we are focusing on bringing stability to the shipbuilding program, adjusting our sights to find the 

affordable 80 percent solution when 80 percent meets the needs, 

working across our systems commands to improve the quality of 

our cost and schedule estimates that inform our requirements decisions, placing greater emphasis on competition and fixed price contracts. We are continuing to improve our ability to affordably deliver combat capability to the fleet through open architecture. We 

are clamping down on contract design changes, and we have cancelled high-risk programs. 

Our goals for modernizing today’s force and recapitalizing the 

fleet affordably cannot be accomplished without strong performance 

by our industry partners. And so it is important that we have a 

clear understanding of the issues affecting industry’s performance. 

So we will be building upon past studies this year to assess our 

shipyards, the vendor base and the design industrial base with an 
7 

eye towards capability, capacity and productivity requirements 

needed by our Navy near term and far term. 

In the end, industry must perform. We will work to benchmark 

performance, to identify where improvements are necessary, to provide the necessary incentives for capital investments where warranted, and to reward sustained strong performance with favorable 

terms and conditions. 

And finally, to meet our objectives, we must be smart buyers. We 

have gone far in the course of the past year to reverse the 

downsizing trend in the acquisition workforce. From supervisors of 

shipbuilding to the warfare centers to the SYSCOMs [System Commanders] and program executive offices, we have added professionals in the fields of systems engineering, manufacturing, program management contracts, and test and evaluation. 

Of course, we have much farther to go. The objective is not merely to increase the workforce but to restore core competencies that 

have slipped loose over the course of a decade and a half of 

downsizing. 

In sum, the Department is committed to building the fleet required to support the National Defense Strategy, to which the fiscal year 2011 budget request addresses the near-term capability 

needs while also laying the foundation for long-term requirements. 

Ultimately, we recognize that as we balance requirements, affordability and industrial-based considerations, it is vital that we, Navy 

and industry, improve affordability within our programs in order to 

achieve a balance that gives greater favor to requirements in the 

industrial base. 

Mr. Chairman, thank you for the opportunity to appear before 

you today, and I look forward to your questions. 

[The joint prepared statement of Secretary Stackley, Admiral 

Blake, and General Flynn can be found in the Appendix on page 

61.] 

Mr. TAYLOR. The Chair thanks the Secretary. I read your statement last night. I thought it was one of the best I have ever seen. 

The Chair now recognizes Vice Admiral Blake. 

STATEMENT OF VICE ADM. JOHN TERENCE BLAKE, USN, DEPUTY CHIEF OF NAVAL OPERATIONS FOR INTEGRATION OF 

CAPABILITIES AND RESOURCES 

Admiral BLAKE. Chairman Taylor, Congressman Akin, members 

of the committee, it is my honor to appear before you today with 

Mr. Stackley and General Flynn to discuss the Navy force structure 

and shipbuilding. 

Forty-three percent of our fleet is deployed today carrying out 

our maritime strategy. They are projecting power into Afghanistan, 

building partnerships in Africa, delivering relief in Haiti and providing ballistic missile defense in the Arabian Gulf, Western Pacific 

and Eastern Mediterranean. 

We are a maritime nation, and our national security depends 

upon a Navy that can keep the sea lanes free, deter aggression, 

safeguard our sources of energy, protect the interest of our citizens 

at home and abroad and reassure our friends and allies. To do this, 

our Navy must maintain its global reach and persistent presence 
8 

while always being ready to answer the call for our warfighting capacity wherever and whenever it is needed. 

With this budget, the Navy will continue to maintain the maritime security of our forces, sustain a strong American shipbuilding 

base and ensure our capacity for rapid global response. In this 

year’s budget, we plan to procure 9 ships and an average of 10 

ships per year across the FYDP [Future Years Defense Plan]. 

To achieve this shipbuilding level, hard choices are required 

across the Navy program. These choices reflect our commitment to 

a fleet that is shaped and sized to deal with current and future 

threats. The fiscal year 2011 shipbuilding program is based upon 

the most cost-effective decisions to achieve the most capable force. 

Across the next 5 years, the Navy is committed to an average of 

$14.5 billion per year to build an average of 10 ships a year. The 

challenge for us is in procuring the required mix of ships with the 

right warfighting capabilities for an affordable cost. To meet this 

challenge, our shipbuilding rate will depend upon aggressive cost 

control which will require both the Navy and the shipbuilding industry to work together in partnership. 

Demand for the ballistic missile defense, or BMD, capable ships 

continues to increase globally. To support this demand, we will continue to modernize the Arleigh Burke-class guided missile destroyers to gain BMD capability commencing in fiscal year 2010. After 

exhaustive analysis, we intend to spiral the DDG–51 program to 

the DDG–51 Flight III. This will allow us to develop air and missile defense radar and install it on a DDG–51 hull. The upgraded 

destroyer is envisioned to be procured in fiscal year 2016. The 

DDG–51 Flight IIA procurement will restart the award for the contract with DDG–113 this summer. New construction of DDG–51 

IIA destroyers will deliver integrated air and missile defense capabilities in new construction ships for the first time, providing critical BMD capacity for the fleet. Our amphibious warfare ships are 

key enablers in providing forward distributed presence to support 

missions ranging from theater security cooperation and humanitarian assistance to conventional deterrence in assuring access for 

the Joint Force. 

The Chief of Naval Operations and the Commandant of the Marine Corps have determined that with risk a minimum of 33 assault echelon amphibious ships are necessary to support Marine 

Corps lift requirements for forceable entry operations. The Navy remains committed to procure 55 Littoral Combat Ships. 

The LCS fills warfighter gaps in support of maintaining dominance in the littorals and strategic chokepoints around the world. 

USS Freedom LCS–1 is currently deployed. Last week the ship, 

outfitted with the surface warfare mission package, achieved its 

first drug seizure, recovering more than a quarter ton of cocaine. 

I am convinced that both the LCS ship types—that both the LCS 

ship types meet our warfighting requirements and fully support the 

decision to down select to a single hull. The Ohio-class ballistic 

missile submarines will start retiring in 2027 after 40 years of 

service life. To ensure there is no gap in our strategic deterrent capability we will need to start procuring the Ohio-class replacement 

in 2019. We are making the appropriate investment in research 

and development now which is essential for the delivery of our reli-
9 

able survivable and adaptable ballistic missile submarine intended 

to operate until around 2080. The Virginia-class submarine is a 

multi-mission platform that fulfills a full spectrum of requirements. 

Now in its 13th year of construction, the Virginia-class program is 

demonstrating that this critical capability can be delivered 

affordably and on time. In fiscal year 2011 we will increase our 

build rate to two submarines per year. 

Navy remains committed to an 11-carrier force for the next three 

decades, which is necessary to ensure that we can respond to national crisis within the current prescribed timeframes. Our carrier 

force provides the Nation a unique ability to overcome political and 

geographic barriers for all missions and project power ashore without the need for host nation ports and airfields. The Navy’s fiscal 

year 2011 long-range shipbuilding plan addresses the requirements 

to support the National Defense Strategy, the maritime strategy 

and the 2010 Quadrennial Defense Review [QDR]. 

I ask for your support for our fiscal year 2011 budget request and 

thank you for all you do to make the United States Navy a global 

force for today and the future. 

That concludes my remarks, sir. 

[The joint prepared statement of Admiral Blake, Secretary 

Stackley, and General Flynn can be found in the Appendix on page 

61.] 

Mr. TAYLOR. Thank you, Vice Admiral Blake. 

The Chair now recognizes Lieutenant General Flynn. 

STATEMENT OF LT. GEN. GEORGE J. FLYNN, USMC, DEPUTY 

COMMANDANT, COMBAT DEVELOPMENT AND INTEGRATION, 

AND COMMANDING GENERAL, MARINE CORPS COMBAT DEVELOPMENT COMMAND 

General FLYNN. Chairman Taylor, Representative Akin and distinguished members of the subcommittee, first, thank you for your 

support of all our service men and women and, in particular, for 

your support of our Marines and sailors. 

I appreciate the opportunity to appear today to address how the 

Nation’s sea-based expeditionary force views its role within the 

Joint Force and the requirements needed to bring these unique and 

essential capabilities to the warfighter. 

I am also honored to be here today with the rest of the Naval 

team, Secretary Stackley and Vice Admiral Blake. 

As a maritime nation, naval forces, Navy and Marine Corps 

forces working together, use the sea as maneuver space and are a 

key component of our Nation’s capability to protect and advance 

our interests around the globe. Today the key characteristics of 

military forces most valued in this ever-changing security environment are versatility and adaptability. Since the beginning of this 

Nation, the Navy and Marine Corps have demonstrated these key 

attributes. In recent times, the amphibious withdrawal from Somalia in 1995; the projection of power from the sea to Afghanistan in 

2001; several responses to natural disasters; and the Lebanon noncombat evacuation operation of 2006 have proven the value of our 

investment in these forces and their wide-ranging utility. 

Today your Marine Corps is once again demonstrating its 

versatility and adaptability. From Haiti to the Helmand province 
10 

in Afghanistan, we are demonstrating our ability to respond across 

the full range of military operations and proving that we are truly 

no better friend and, if the situation requires, an adversary’s worst 

enemy. 

As soldiers of the sea, our unique capabilities are enabled by the 

Navy’s ability to provide force protection and amphibious and 

preposition lift. The linchpin of our ability to operate from the sea 

is our amphibious fleet. The requirement for amphibious ships that 

has been agreed to within the Department of the Navy is 38 ships. 

And in order to have a balanced and affordable shipbuilding program, we must be willing to accept risk down to 33 ships. This 

number gives you the capability needed for both steady state operations and the minimum number of ships needed to provide the 

Nation with a credible sea-based power projection capability of two 

brigades at an acceptable level of risk. 

The recent deployment of amphibious ships shows the utility of 

these platforms and their utilization. In January of this year, of the 

31 amphibious ships in the current inventory, 9 were conducting 

steady state operations; 7 responded to the disaster in Haiti; 9 

were in maintenance; and 6 were available to respond to other missions. 

The key to the utility of our amphibious fleet is the versatility 

and flexibility built into the mix and design of the ships. We believe this is achieved by a balanced mix of platforms and integrated 

command and control, stalwart survivability and both air-and-surface connector capabilities. This is why we believe it is important 

to put the well deck back into our largest platform at the earliest 

opportunity. We also believe that adequately defining the requirement for the LSD(X), both as a ship and as part of the overall amphibious capability, is of vital importance to the overall flexibility 

and utility of the amphibious fleet. 

In an era of increasing access challenges, the ability to operate 

our expeditionary forces from a sea base is a required and valued 

tool in a joint warfighting tool kit. The minimum sea base requirements that are needed now are the ability to operate without a 

port, the ability to conduct selective offload, and the ability to conduct at-sea transfer of equipment. The original Maritime 

Prepositioning Force Program (Future) was to provide these capabilities along with organic command-and-control connectors, medical maintenance and building. 

The Maritime Prepositioning Force (Future) program in current 

vision is not affordable at present. Working with the Department 

and Navy leadership, we found a way to provide some of these capabilities at an affordable cost and thus capitalized on the investments already made in our legacy MPS [Maritime Prepositioning 

Ship] squadrons. Accordingly, we are going to add a mobile logistics 

platform and T–AKE platform to each of our squadrons. This will 

give us the capability to do the first three of these and envision capabilities of the sea base at an affordable cost. 

Again thank you for the opportunity to be here. I look forward 

to answering your questions. 

[The joint prepared statement of General Flynn, Secretary 

Stackley, and Admiral Blake can be found in the Appendix on page 

61.] 
11 

Mr. TAYLOR. The Chair thanks you very much, gentlemen. 

The Chair now recognizes the ranking member, Mr. Akin. 

Mr. AKIN. Thank you, Mr. Chairman. 

I had a couple of different questions here. One was the result of 

a trip I took just a week or so ago. And I think that we had talked 

about being sensitive to the workforce and smoothing the workforce 

and trying to buy our ships in the most strategic way to keep our 

costs effective. I guess the question that came up was, particularly, 

we have I think a plan for building three MLPs [Maritime Landing 

Platforms] on, I believe, a 2-year set of centers, that would be 2011, 

2013 and 2015. As we talked to people in the shipyard, they were 

saying it would be much, much better from a demanding of the 

work load, so you could keep an equal level of manning for building 

these ships, if they could be built on 1-year as opposed to 2-year 

centers. So I guess my first question is, is that something that 

throws the whole budget into chaos to do that, or is that something 

that, if we could get some reduction in cost, that that might be a 

possibility? 

Secretary STACKLEY. Let me first describe, we have the ability to 

move right into the first MLP in 2011 because of the advance work 

that had been done by NASSCO, the shipyard that has that contract. And so we have a nice dovetailed production plan following 

the T–AKE production moving into MLP. 

Traditionally—more than traditionally—the Navy has strived to 

provide a gap year between a lead ship and a first follow ship so 

that as you are building your first of class, if you run into design 

technical issues that need to be resolved, that you have more time 

to incorporate those corrections into the first follow ship. You described the one, I believe you described it as 1, 3, 5, one every other 

year. So, in fact, we do have another gap between the first follow 

ship and the third MLP. And that is, frankly, a concern with regards to the stability of the workforce at NASSCO. 

Of our major shipyards, NASSCO is the one that is having to 

manage the greatest gap in workload. We look at the MLP as providing a base workload for the shipyard, but we recognize that 

MLP alone is not sufficient workload for NASSCO to be able to 

maintain the level of performance that we are seeing today. So step 

one is, establish a base; step two is establish opportunities for 

NASSCO to compete for additional work. 

Mr. AKIN. I guess my question was, if you took the ships scheduled in 2015 and moved it over to the 2012 spot, so you would have 

2011, 2012, 2013 instead of 2011, 2013, 2015. That is assuming 

that they could do that without having to have a lot of modifications between 2011 and 2012 on the ship, I understand that. 

Secretary STACKLEY. Yes, sir. That becomes a trade between 

what is affordable inside of the budget in 2012, closing that gap 

year, which we do prefer to have a gap just to ensure that production—design is stable, production is off to a smooth run before you 

immediately start to bring in the first follow ship. And those are 

the competing considerations. 

Mr. AKIN. From a finance point of view, does it throw the budgeting requirements off though as well by moving that? Is it something you have to pay for earlier in the plan? 
12 

Secretary STACKLEY. It is about a half a billion dollar ship with 

certain assumptions, and the assumptions include that there is 

other work in the shipyard, and the three MLPs don’t stand by 

themselves in that regard. So moving it from 2015 to 2012 would 

be about half a billion dollars added in fiscal year 2012. 

Mr. AKIN. Thank you. That was the first question. 

The second is a little bit more general. And that is, as we take 

a look at the potential of near-peer competitor and a denial to access, as I took a look at specific areas of where our access would 

be denied, that is a ballistic kind of threat, a cruise type of threat 

or submarine kinds of threats, my concern was that it seemed that 

we had at least potentially some significant challenges in all three 

of those areas. 

And I guess my question, with large surface combatant force levels decreasing from a high of 96 down to a 60s and 70s kind of 

range; attack submarines from a high of 55 down to 39, with 

maybe sustained levels of 40; cruise missile submarines would be 

disappearing entirely. Recognizing those kinds of threats I guess I 

am curious whether, are we confident that this force could deter or 

defeat at low or moderate risk a near-peer competitor with that 

anti-access capability? I am thinking—I suppose you know what I 

am talking about. I am thinking of those charts of solid fuel missiles that we are not too good at stopping and certain wave skimmers that can dodge and weave a bit and increased range on submarines and things like that. Does it seem like there is a window 

here where we have to be a little concerned? 

Admiral BLAKE. Sir, if you look at it, several of the reasons 

which you just articulated are the reason why we went to two submarines per year for the Virginia class. It is also why we are accelerating our ballistic missile defense piece, not only on the Navy 

side, but General O’Reilly is also doing that on the ballistic missile 

agency side of the equation. And additionally, if you look at the entire spectrum—— 

Mr. AKIN. By the way, do they work on that IIA, or is that a 

Navy, or is that the air project? 

Admiral BLAKE. It is a IIA, sir. I deal with General O’Reilly from 

the BMD perspective on the Navy side, but then he also has his 

funding which he does. 

Mr. AKIN. So do you do the IIA, or does he do the IIA, Standard 

Missile Block IIA? 

Admiral BLAKE. We do Standard Missiles Block II and Block III 

and the SM–3, sir. But they also do them. It is a shared line, if 

you will. 

Mr. AKIN. Okay thank you. 

Admiral BLAKE. But to go back to the point, that was one of the 

reasons, as we truncated the DDG–1000 and went to the DDG–51, 

was the fact that we wanted to get that ballistic missile defense 

[BMD] capability out there. And as I mentioned in my statement, 

with the 2016 ship, we are going to be putting out the first ship 

built from the ground up if you will that is going to be BMD capable. So our ships are, as you know, multi-mission ships, and the 

idea was that we were going to deal with the anti-access piece, as 

you mentioned ASW [anti-submarine warfare] and BMW, and that 

is exactly how we are approaching it. 
13 

Mr. AKIN. I hear what you are saying. What you are saying is, 

you are wrapping up the submarines, and you are trying to wrap 

up the destroyers. 

Admiral BLAKE. Yes, sir. And we are. 

Mr. AKIN. Right. The only thing is that your destroyer doesn’t do 

you much good until you get that new higher-powered missile on 

it pretty much. 

Admiral BLAKE. Well, actually, sir, we are taking, if you will, sort 

of a three-pronged approach. We have got the Aegis system at sea, 

and we currently have 21 ships in the inventory that are capable 

of doing BMD. By the end of the FYDP, we will have 27 out there 

capable of doing it. 

So we are approaching it not only from new construction; we are 

also approaching it from ship sets. We are buying, if you will, 

BMD-capable ship sets which we then put on those—put on the 

ships that are currently in the fleet in order to make them BMDcapable. There are two varieties. One is called the 3.6; one is called 

the 4.0. And they give us varying capabilities. And the idea—and 

the third piece of it is that we are going to push out in fiscal year 

2015 what we are calling Aegis Ashore. So we are going to have 

a piece out there, so it is going to be, if you will, a three-pronged 

approach. You will have Aegis Ashore; you will have the BMD 

piece on the ships that we currently have in the fleet, we will be 

upgrading them; and then you will start to deliver the new ships 

from the ground up starting in 2016. 

Mr. AKIN. Okay. Thank you. 

At last, I couldn’t resist this last little question here, Secretary 

Stackley. It is a little off topic maybe. But could you update me on 

the status of the F/A–18 multi-year effort? Do you think the 10 percent savings offered by Boeing was a good deal, first? And what is 

the timeline for entering into a multi-year contract? That is assuming that there is one. And why is it that the Secretary of Defense 

is not more eager to enter into the multi-year when it meets that 

10 percent threshold that he mentioned in HASC [House Armed 

Services Committee]? 

Secretary STACKLEY. Let me start with the 10 percent savings, 

the question there. We do not have a priced proposal from Boeing 

that we can state with clarity that is 10 percent savings. What we 

have is a letter of commitment for a not-to-exceed value that we 

will use to commence negotiations with a contractor. So we are 

starting off with a not-to-exceed value that is based on Boeing’s estimate for single-year procurements level of savings. The Secretary 

of Defense is supporting us going forward with this because there 

is promise here. And so the Cost Assessment Program Evaluation 

Office is going to go through the required cost analysis to validate 

that in fact we can achieve at least the 10 percent savings that we 

have established here as the benchmark while we in parallel proceed with negotiation of the contract. 

So we are pushing both efforts in parallel, and the front end of 

those activities are common in terms of fact finding and pricing 

data, working closely with Boeing. And so I think we have got a 

lot of momentum in this area. We are working at an aggressive 

time line, but we are giving it our full emphasis and putting the 

first team on this. 
14 

Mr. AKIN. That is encouraging because it seemed like the last 

week or two ago, I heard that we were going to be fine for the 

March deadline, and all of a sudden that slides, and they are kind 

of going, what in the world is going on? 

Secretary STACKLEY. Well, we received the letter of commitment 

on the 22nd of February. And in order for the CAPE [Cost Assessment and Program Evaluation], the cost assessment group, to do 

a valid cost analysis to meet, frankly, the multi-year statute, they 

need more than that amount of time to complete the analysis. 

Mr. AKIN. I wish they had said that a couple weeks ago, but 

thank you. That is very straightforward. 

Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman from Missouri and 

now recognizes the gentleman from Washington State, Mr. Larsen. 

Mr. LARSEN. Thank you, Mr. Chairman. 

Either for the Secretary or Admiral Blake, I want to give you a 

quick short tale of two populations of Boomers. In 2019, the Baby 

Boomers come flooding into the Social Security and Medicare systems. As a result of that, without other changes made in the structural budget of the Federal Government, we are going to see a 

large expansion of cost in the Social Security and Medicare system, 

again absent of any changes, that will consume, begin to consume 

over time larger and larger percentages of the entire Federal budget. 

That may sound very familiar to you, because it seems in 2019, 

there is another tale of another set of boomers that come into the 

Navy’s shipbuilding budget, and it will begin to consume larger and 

larger percentages of the Navy’s shipbuilding budget at the expense, potentially, of other shipbuilding alternatives. I am on the 

Budget Committee, so I won’t ask you to address what we are 

going to do about the first set of Boomers. 

The second set of boomers, I am very interested in hearing your 

opinions on how we are going to address this cost, marginal additional cost, in 2019, of this new class to replace the Ohio, given— 

now, I know you have a plan for it, but I am curious if you actually 

have received commitments from OSD [Office of the Secretary of 

Defense] and OMB [Office of Management and Budget] to advocate 

for the level of funding that you need, starting in 2015 and then 

eventually into 2019, to do what we want to do on destroyers and 

on aircraft and all the other lines in the Navy and on the Ohio- class replacements. And if we haven’t received those commitments, 

how realistic can we assume the shipbuilding plan with regards to 

the Ohio-class replacement is going to be? 

Mr. Secretary. 

Secretary STACKLEY. Let me start with the construction of the 

30-year plan that brings the boomer into the picture. In the past, 

in the past, the Navy had not included the cost for that program 

inside of the 30-year plan. This year, in doing that, it does a couple 

of things. It brings the problem front and center in terms of the 

pressures and the challenges that that program places on the total 

shipbuilding account. And we work very closely with OSD in determining, the best I can describe it is a notional top line because this 

is well beyond the FYDP, a notional top line for our shipbuilding 

account, as we start to march towards those years. 
15 

And so what you see with regards to the total funding level for 

shipbuilding beyond the FYDP, that was coordinated with OSD, 

and it will continue to be revisited in each budget cycle as those 

years move inside the FYDP, while, in parallel, we also work the 

process of going from what we have today, which is an AOA [Analysis of Alternatives] under review at OSD, come through the nuclear posture review to continue to inform the requirements and 

then get into the actual requirements definition, the R&D [Research and Development] efforts that go from requirements to design and then ultimately to construction. 

Mr. LARSEN. Admiral Blake, anything to add on that? 

Admiral BLAKE. I would just say, sir, the Department recognized 

the fact that, when we went into the budget, there were two assumptions made. The first is that it would be fiscally informed. So 

if you look at the 30-year shipbuilding plan, over the entire 30 

years, it is at a $15.9 billion level. You absolutely point out the 

area where the high point occurs, when the SSBN(X) buy starts, 

and you will see that that goes up to $17.9 billion. That was recognized by the Department, and the position taken was that we 

would again continue to visit this. 

And as Mr. Stackley pointed out, in the past, we have put the 

SSBN(X) above the top line. It just sat there. This year, when we 

put the plan together, we brought it within the top line. 

Mr. LARSEN. Thank you. 

So Secretary Stackley, the AOA, are you suggesting that there 

are other alternatives we are considering with regards to that element of the triad within the context of the nuclear posture review? 

Is that what I gather you are saying? 

Secretary STACKLEY. Within the AOA, if you assume the boomer 

is part of the triad, you still have a wide range of alternatives that 

you want to evaluate under the definition of a boomer in terms of 

everything from the size of the missile tubes to the number of missile tubes; you want to see what technologies you can leverage from 

the existing platforms, as well as bring to bear what we know 

today regarding threats, obsolescence and new technologies. 

Mr. LARSEN. Well, my time is done. I appreciate your answers. 

And Mr. Chairman, I just suggest maybe this is something we 

can explore further as we are going through the budget. 

Mr. TAYLOR. Mr. Larsen, it is an excellent line of questioning. We 

do intend to pursue your line of questioning, hopefully in a separate hearing. Because of the sticker shock of the Ohio-class replacement, maybe it would make sense to do something with the Virginia class. But we are going to pursue that. That was an excellent 

line of questioning. 

The Chair now recognizes the gentleman from Virginia, Mr. 

Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Secretary Stackley, Admiral Blake, General Flynn, thank you so 

much for joining us today and thank you for your service to our Nation. 

In looking at the Navy’s budget, I am generally pleased. I think 

it is a good start down the road of where we need to go. I guess 

that I still have some concerns about the budget in the QDR 

[Quadrennial Defense Review], in looking at where does it leave 
16 

our force structure out into the future. It seems like to me that our 

Navy five years down the road is going to look almost exactly like 

it does today, and I am concerned that those folks that wish to do 

us harm, their navies are not going to look the same five years 

from now. So I am concerned about, where does that leave us? 

In addition to the near-term focus, I think there are some further 

strains on our naval forces in adding the ballistic missile defense 

mission to our fleet in trying to figure out, how are we going to 

make sure that we have the ships to do the regular missions plus 

the BMD mission? And if the shipbuilding budget itself doesn’t increase, I don’t see a 313-ship Navy. I see more like, and that is 30 

years down the road, I don’t see a 313-ship Navy; I see more like 

a 275-ship Navy. 

So I am concerned about the funding aspects of that and where 

it leaves us in the long term. I think the plan that the Navy has 

laid out is a good one in some aspects, but I am also concerned 

about the resources necessary to get to that 313 within a reasonable period of time. And that leads me to this line of questioning. 

In developing the future year’s defense plan, can you tell me 

what consideration was given to the impact on the core shipbuilding industrial base? And specifically, why do we seem to be 

pushing funding off for the more expensive ships into future years 

into the later portion of the 30-year shipbuilding plan. 

Secretary STACKLEY. Let me start with the second question first. 

In developing the shipbuilding plan, we have done some serious restructuring in terms of, what was the program on record? I described in my opening remarks that we have determined that the 

CGX, which was planned for 2011, it was not feasible in 2011. That 

was going to be an extraordinarily expensive ship based on technologies that are simply not mature in 2011. And so we moved to 

a more affordable approach spiraling through the DDG–51 class. 

Now, we ultimately have to go beyond today’s level of missile defense capability that is in the 51 class, which is why we have continued to move forward on development of the air and missile defense radar technology. So that is an ongoing development. And 

those two intercept in about 2016 in terms of maturity of that technology and spiraling of the 51. 

So I believe Admiral Blake referred to a Flight III DDG in the 

2016 timeframe. That simply reflects when that technology is available. We, frankly, would like to get there sooner. The Maritime 

Prepositioning Force (Future), we described restructuring that program for a more affordable enhanced sea-basing capability, building off of our MPS today. That, again, was driven by affordability 

and looking for that solution that balances the requirement, cost 

and, frankly, looking for what they call a sweet spot or knee in the 

curve, and that is how we have arrived at today’s construct for the 

Maritime Prepositioning Force. 

The next two programs that I touched on in my opening remarks, 

the replacement for the LSD–41 class, the LSD–41 class will be 

with us until the mid-2020s. So, in fact, when we look at that program starting up in 2017 in a 30-year plan, that is ahead of need. 

And so we are struggling between recognizing that we are going to 

have the challenges going through the period in which the Ohioclass replacement is being built, and that is why you see a build 
17 

plan that is earlier than required and stretches out, trying to work 

within our top line constraints but yet not allow the amphibious 

force structure to dip too low. So it is looking for that balance. 

T–AO(X) was the other program that is just beyond the FYDP. 

Again, that is ahead of need. The existing T–AOs start retiring 

about 2026, and so this is trying to pull T–AO to the left, looking 

again at industrial base consideration for that sector of our industrial base and also looking at an opportunity to modernize that 

force, some efficiencies that we can gain there. 

And the other major new start, of course, is the Ohio-class replacement which stands by itself in terms of 2019, need to start 

procuring then to support 2017 retirement. 

Mr. WITTMAN. Thank you. 

Mr. TAYLOR. The Chair now recognizes the gentleman from Connecticut, Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

I just want to follow up a little bit on what Mr. Larsen was probing. And I know the chairman is planning a hearing specifically on 

the issue of the Ohio-class replacement. It is pretty clear that is 

going to be a topic of focus for this subcommittee for this year and 

years to follow. 

But just sort of moving back from the long-range question, which 

Mr. Larsen asked, sort of right to the immediate future. The language that accompanied the budget document about the proposed 

spending for Ohio design work was pretty strong and emphatic 

that there is no leeway in this plan to allow a later start or delay 

in the procurement plan. And I guess the one question I wanted 

to ask is, of that $672 million which was put in the budget, I mean, 

is that going to potentially give us some flexibility or some options 

for this program as it moves along? And why the urgency? 

Secretary STACKLEY. Let me start; 2019, I think everyone understands the urgency there. With the first retirement in 2027, we 

have to deliver the Ohio-class replacement in the 2027 timeframe 

to have her on station 2029. So we view that as a national priority; 

2019 then is a well-defined procurement year. 

The R&D stream that precedes that covers several aspects. One, 

we have to go from defining a requirement to not just the technology or capability that will meet the requirement, but we also 

have to look at some of the manufacturing challenges that we have 

to work our way through because Ohio was built a quarter century 

ago. And so there are a lot of unique aspects associated with Ohio 

that you don’t see in other submarine design and construction that 

we have to recreate those capabilities. And so that is very much on 

the front end, so that, by the time we get to the procurement years, 

those manufacturing processes and facilities that have to deliver 

these pieces of hardware for the boat are mature enough that we 

have retired the risk. 

So there is a manufacturing design piece. There is a technology 

piece, and then there is the reactor piece. So we have reactor design activities; we call it rest-of-ship design activities, manufacturing and technology activities ongoing today to retire risk so that 

when we get into 2019 procurement, we do not suffer first-of-class 

issues, but in fact, we have got a reliable schedule so that the 

SSBN(X) can replace the Ohio on station. 
18 

Mr. COURTNEY. And I guess the question of—I mean, there is 

no—I think it is pretty clear that there are Members here that are 

sort of asking about whether or not we need to do it exactly the 

way it is sort of being proposed. I mean, will that early start of design give us some at least answers to that question about whether 

there are other alternatives? 

Secretary STACKLEY. Yes, sir. 

In the near term, I described the AOA that is under review, the 

analysis of alternatives. We have what is referred to as a milestone 

A with OSD later in the spring. And so between now and milestone 

A, we will continue to work the details inside of the AOA, as well 

as work the, I will call it the spend plan, associated with the R&D 

that supports that long-term schedule. This is—you know, the significance of this investment requires that more than just a program 

office, more than the SSP [Strategic Systems Program] office are 

involved in the decisions associated with these design details. So 

there is going to be significant amount of oversight to ensure that 

we are investing the right dollars for the right capability at the 

right time to meet that mission. 

Mr. COURTNEY. Thank you. 

Actually some people argue that even deserves its own special 

line item in the budget, but that, again, may be a discussion later. 

Secretary STACKLEY. I will let Admiral Blake take that one. 

Mr. COURTNEY. I have a few seconds left, and this is something 

completely different. 

Admiral Roughead, when he was before the full committee, actually made a pretty powerful statement about the issue of alternate 

engines and whether or not it is feasible to have two different types 

of engines on aircraft carriers for the F–35. And I wondered if you 

wanted to expand or maybe the Admiral did in terms of the Navy’s 

position regarding that issue. 

Admiral BLAKE. If you go to the alternative engine, what you end 

up with is two complete infrastructures on board a single unit and 

then you have—if you have those two systems there, then what you 

are dealing with is you are dealing with two complete lines, if you 

will. And so that would be one of the concerns that you would have 

if you had an alternate engine out there. And therefore, it would 

not be considered prudent, if you will, and I think the CNO 

brought that up during his remarks and that is why he took the 

position he did. 

Mr. COURTNEY. Thank you. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair now recognizes the former chairman of 

this committee, the gentleman from Maryland, Mr. Bartlett. 

Mr. BARTLETT. Thank you very much. 

Mr. Secretary, I understand that the 1000 has now breached the 

Nunn-McCurdy rules for per-unit cost growth? 

Secretary STACKLEY. That is correct, sir. 

Mr. BARTLETT. The Weapon Acquisition Reform Act of just last 

year sets a very high bar for proceeding with a program rather 

than terminating it following this kind of breach. As you may remember, the 1000 was originally going to be a 32-ship class, and 

then its cost went up. Then it went to a seven-ship class, and then 

it ended up as a three-ship class. And we were told that the 1000 

program was truncated because the requirements had changed and 
19 

the DDG–51 with upgrades could better provide capability against 

this changed requirement. 

In light of this, what is the correct path forward relative to the 

1000? 

Secretary STACKLEY. Let me start with the reduction from the 

program from 78 ships to 3 ships. The decision to truncate the program was made last year and was announced by Secretary Gates 

with his budget statement in April of 2009. It was after careful 

consideration of not whether the 51 could meet the DDG–1000 requirements, but careful consideration of competing requirements 

between the need for increased air and missile defense and the capabilities that DDG–1000 brings which is more closely associated 

with surface fires and operations in the littorals. 

So the decision was made that the priority for the Department 

is to go towards increased air and missile defense and that the 

DDG–1000 program then, the land attack requirement, that would 

be truncated to a three-ship program. So the requirement for 

DDG–1000 did not go away, but the priorities were placed on air 

and missile defense. 

So when we decided to truncate the DDG–1000 at three ships, 

we continued to consider the platform to be a platform to meet the 

future surface combatant requirements for missile defense. Admiral 

Blake referred to the study that was conducted in the course of the 

past year. As we evaluated that platform, we determined that the 

best alternative was to spiral the 51 program in the mission area. 

So as the budget came forward, having decided to truncate the 

DDG–1000 to three ships and to not use that platform for air and 

missile defense, then it became clear that there would be a NunnMcCurdy for each, which was driven not by cost increases to the 

program associated with performance, but rather by costs that 

have been incurred in the program predominantly through research 

and development that when you divide those costs over three ships 

as opposed to over seven ships, now mathematically, in fact, you 

do have a breach. 

So this does not reflect having to increase investment in the program to continue it. In fact, what we have done is we have reduced 

investment in the program through the truncation and the balance 

of funding is to complete the three ships in the budget. 

Mr. BARTLETT. Our shipbuilding plan acknowledges that we will 

be building just enough ships to sustain our industrial base. If the 

cost of these ships go up—and that may very well be true of the 

SSBN—then we will be building fewer ships. What confidence do 

you have that we will continue to keep six major shipyards viable? 

Secretary STACKLEY. Let me first address the part of the question referring to the costs going up. 

We have—— 

Mr. BARTLETT. Assuming, sir, the costs as they always may go 

up in the future and if we are now building just enough ships to 

barely maintain the industrial base, if the cost goes up, obviously 

unless the top line goes up, we will be yielding less ships. And my 

question is, what kind of confidence do you have that we would be 

able to keep six major shipyards viable? 

Secretary STACKLEY. Yes, sir. 
20 

Let me first describe that as we put together a shipbuilding plan, 

we take a close look at what we refer to as workload curves that 

show the projected workload across not just the six major shipyards, but also other shipyards that are building ships for the 

Navy. And clearly certain shipyards have a very healthy workload 

looking into the future. 

We do have a couple of yards that we are quite concerned with. 

We talked earlier about NASSCO and its projected workload. We 

keep a close eye on our surface combatant builders. We have our 

nuclear yards that frankly are very solid workload going forward, 

and our amphib and auxiliary yards. 

Nuclear yards are in good shape in terms of workload. Surface 

combatants we are keeping a close eye. We look at completing the 

three DDG–1000s, go to the DDG–51s and ultimately getting back 

to a status on the 51 program where we can reengage in a multiyear which helps provide stability for those yards. Amphibs and 

auxiliaries, we have three yards that historically have built 

amphibs and auxiliaries. And between those three yards, two 

yards, the work yard is of concern. 

I described in my opening remarks that we are going to engage 

in a shipbuilding industrial-base study and a significant part of 

that industrial-base study is to get to the heart of your question 

exactly, so that as we go forward in POM 12 [Program Objective 

Memorandum for fiscal year 2012] and we revisit the shipbuilding 

program as we do each year, we can have most current information 

with regards to not just the impact of the Navy program, but other 

work at those shipyards and what that means in not just their viability, but also our costs. 

Mr. BARTLETT. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair now recognizes the gentlewoman from 

Maine, Ms. Pingree. 

Ms. PINGREE. Thank you very much, Chairman Taylor. First, I 

would like to start by thanking all of you for your service to the 

country, and Secretary Stackley, it is good to see you again, although I prefer seeing you at the shipyard in my district, Bath Iron 

Works, and you are welcome back any time for a visit and, of 

course, a lobster. 

I want to go on with—actually you were talking about this a little bit, and I know in your written testimony, even though I came 

late, said capable ships supported by effective industrial base have 

been the decisive element during war, crisis response, and peacetime operations for more than two centuries. Several Navy reports 

have agreed with this statement and have gone on to say that in 

order to maintain the two major surface combatant shipyards a 

minimum of three DDG–51s must be procured each year along 

with additional work. 

So my question goes back to this workload industrial capacity 

one. If the DDG–51 procurement rate is on average 11⁄2 per year, 

what impact will it have on this decisive element? And I am certainly thinking of our yard and the challenges that we face. 

Secretary STACKLEY. Yes, ma’am. 

Not to repeat the discussion I just had with Representative Bartlett, but the surface combatant build rate is something that we are 

keeping a very close eye on. It involves not just the shipbuilders, 
21 

but also the combat systems suppliers because that industrial base 

is much broader than just the shipyards. 

We do not have an acquisition strategy that addresses going beyond the ships that are currently budgeted and requested in 2011. 

We do have a plan to deliver that acquisition strategy this summer 

as we work it through OSD, and we widen the aperture beyond the 

two-one-two-one-two-type profile that you see in the 30-year shipbuilding plan; and by widening the aperture, we are looking at beyond just the continuation of the 51 construction at those two yards 

to determine what are the critical skills, what are the capabilities 

and capacities that we need to preserve to ensure that we have this 

unique capability at these two shipyards. 

Ms. PINGREE. I appreciate you are looking into that, and I certainly will look forward to your further study. 

Going back to another question you talked about a little bit on 

the DDG–1000, can you comment a little bit on the importance of 

leveraging the DDG–1000 technologies for other future Navy platforms once the DDG–1000s are operational? 

Secretary STACKLEY. Yes, ma’am. The DDG–1000 frankly broke 

a lot of ground with engineering development models, new technologies that it is bringing to the surface fleet. Perhaps most significantly, I would highlight reduced manning concepts that—not 

just the technology but how we will operate a ship at those manning levels. We will be looking to bring those concepts forward to 

the extent practical. With reduced manning comes a lot of technologies to reduce workload for the crew. So that has high interest 

for further applicability. 

A very clear crossover is in the combat systems arena where the 

dual band radar for the DDG–1000 is also the dual band radar that 

is going to go on the CVN 78 class. So that has direct applicability. 

And when we look at the Flight III DDG–51 and the studies that 

we performed there where we took a look at the threat and the requirements, we looked very closely at the MFR [Multi-Function 

Radar] radar on the DDG–1000, and we believe that that will be 

the best solution for the DDG Flight III when we consider future 

threats. 

So as we move forward with the air and missile defense radar, 

we are also looking at something like a dual band radar capability 

with an MFR or what is referred to as a SPY–3 radar for the future DDG–51. 

Ms. PINGREE. Just to follow up on that a little more, Admiral 

Blake. 

Despite the fact that as we talked about earlier, the DDG–1000 

program has been truncated to three ships, can you talk a little bit 

about the operational importance of having these three ships in the 

fleet and what valuable technological lessons the Navy will gain 

from having these ships? 

Admiral BLAKE. Absolutely. One of the principal seams this ship 

is going to fill is the 155 gun which it carries is going to be a critical seam-filler for the naval surface fire support. It has a longrange land attack projectile, and it will be used to engage targets 

deep inland in order to be able to support Marine operations. And 

that is a critical piece. 
22 

If you look at our DDG–51s, they have a 13-mile gun. And so this 

is going to give us a significant force multiplier out there. It is 

going to give us precision fires, volume fires at a longer range. So 

it is an absolutely critical piece for naval surface fire support. 

Naval surface fire support is made up of a triangle, and three elements in it are naval surface fire support, tactical air, close air 

support, and then organic fires which come from the Marine Corps 

piece of the puzzle. 

So those three together give us a significant force multiplier 

when we are doing forcible injury. 

Ms. PINGREE. Thank you. Thank you, Mr. Chair. 

Mr. TAYLOR. The Chair thanks the gentlewoman. 

The Chair now recognizes the gentleman from Virginia, Mr. 

Forbes, for 5 minutes. 

Mr. FORBES. Thank you, Mr. Chairman. I hear bells going off for 

some votes. I will try to be brief. 

General Flynn, I saw you in a hallway a little bit earlier coming 

down here and I was wondering why you were here so early. And 

after I left, I looked at my watch and realized it was time for our 

hearing. 

The chairman mentioned earlier about the fact that he did not 

think that this 30-year shipbuilding plan was a fantasy, and I have 

enormous respect for him and hope he is right. But when Secretary 

Gates testified, that is exactly the word he used to describe the 

money set forth in the 30-year plan. He said it was a fantasy. 

And I am looking, Mr. Secretary, at your statement, and I know 

you were briefed so that you could put your statement in the 

record, but in the summary, you say the Navy’s long-range plan for 

the construction of Naval vessels addresses the requirements in 

support of the national defense strategy, the maritime strategy, 

and the new 2010 Quadrennial Defense Review. 

And my first question is: is the shipbuilding plan and the QDR 

based upon the June 2008 National Defense Strategy or is it a 

more recent version? 

Secretary STACKLEY. I think we need to take that for the record. 

[The information referred to was not available at the time of 

printing.] 

Mr. FORBES. Let me tell you why I am concerned about that. 

First of all, I think we should know. Secondly, according to the 

National Security Act, the administration had 150 days from the 

time they came in office, I think—you can check this too and confirm—to have that national security strategy and the national defense strategy. I haven’t seen it. So if perhaps it has been sent to 

Congress and it is over here, we appreciate that. 

I would just love for you to get me a copy because we have been 

asking for it and haven’t seen it, and I think it is important to 

know if we are going to make statements that it is based on that 

national defense strategy, what year it was based on. The last one 

that I know of was the 2008 one. 

The second thing I would ask you, Mr. Secretary, is this: I look 

at the plan that we have that has been laid out, and we look over 

the last 30 years, and I think everybody would agree the last 30- 

year average has been about $15 billion that we have had for ship-
23 

building. I think we would agree with that, Admiral. I think that 

was some of your testimony as well. 

You heard Mr. Larsen talk about earlier in 2019, we have got 

huge problems with Social Security because of the baby boomer situation. We hear the White House talking about the fact that we 

could have these high unemployment rates hitting us as long as 

the next decade. And I look at the CBO [Congressional Budget Office] analysis of this 30-year plan, and according to their analysis, 

which is an independent analysis, a bipartisan analysis, they think 

it is going to take $20 billion a year to reach this plan. That is a 

$5 billion difference between the 30-year average and what they 

think to reach this plan. Where are you going to get the $5 billion from? If you look at 

what Mr. Bartlett talked about costs going up, if you look at the 

fact that we don’t have any realistic projections that the budget is 

going to get better any time soon, where are we going to get that 

$5 billion per year to make up that shortfall? 

Secretary STACKLEY. Let me start by saying that the pricing we 

have laid into the 30-year plan is, I will call it the best estimates 

that we have today for what these ships will cost in the future. 

Now, that does not mean that they don’t carry risk. Certainly they 

do. 

What we have to put in place is better governance of our requirements definition, our design, and our procurement so that as we 

confront these risks, we don’t roll into programs that bring continued cost growth that end up eating away at the force structure. 

Mr. FORBES. I don’t want to interrupt you. Please do whatever 

you need to in terms of the record, but I have got 40 seconds left. 

CBO is looking at your costs. They are not taking into account, as I understand it, cost projections, and still they say it is a $5 billion shortfall. Assuming we don’t have these cost increases, where 

are you going to make up that $5 billion a year? 

Secretary STACKLEY. I don’t see the added $5 billion per year for 

the ships that we have laid into the budget. 

Mr. FORBES. Do you disagree with the CBO’s estimates? Is that 

what you are saying? 

Secretary STACKLEY. I haven’t had the opportunity to go through 

the shipbuilding plan that we have submitted to Congress with 

CBO, but I do know the estimates that we have laid into our plan 

and the basis for those estimates. 

Mr. FORBES. Mr. Chairman, thank you. 

Mr. TAYLOR. We believe that we have enough time for Mr. Langevin from Rhode Island. 

Mr. LANGEVIN. Gentlemen, thank you for your testimony today 

and for your service to our Nation. 

If I could, Secretary Stackley, talking about—you mentioned in 

your testimony the issue of missile defense. You talked about that 

a little already. I was wondering if you could elaborate a little further on how the Navy plans on achieving both its missile defense 

and ship defense requirements on this platform and what challenges does the Navy face using one platform, but for both roles? 

Secretary STACKLEY. Yes, sir. Let me start with the baseline. The 

baseline is, Admiral Blake referred to 321 Aegis ships today that 

have a degree of ballistic missile defense capability, and those are 
24 

in service. That capability was backfit, brought to the ship in terms 

of adjunct processors that provide the missile defense capability 

working side by side with the AAW [anti-air warfare] capability 

that the Aegis system provides. And then, of course, you have got 

the missile load-up that works in conjunction with the AAW and 

missile defense capability. 

As we move forward and get into the later capability builds for 

the Aegis program, we come to what is referred to as a multi-mission signal processor that brings together both the air and missile 

defense capability so that the single system provides that capability 

without having to change modes. That is currently in the program. 

Again, it will be coming in through backfit as well as being introduced on the DDG–113. That gives us processing capability. 

And then we continue to step up capability in terms of sensor 

system as we move to the AMDR, the Air and Missile Defense 

Radar to be introduced in the 2016 timeframe. 

So we need to move from today’s capability, build upon that to 

expand the integrated air and missile defense capability as well as 

sensor power so that we can more than keep pace with the threat 

as we move forward. 

Mr. LANGEVIN. Thank you. 

Do you have anything to add on that? 

Admiral BLAKE. I would only say that following the decision to 

increase our BMD capability at sea, both the Navy and the Ballistic Missile Defense Office took the action to accelerate the procurement of the ship kits in order to be able to push those ship sets 

out there so that we would increase over the fit-up in order to meet 

up the demand signal of the COCOMs [combatant commanders]. 

One of the concerns that we had was we wanted to ensure that 

we were also taking care of the ships when we put them out there 

so that we wanted to push as many sets out as we could so that 

we wouldn’t have sustained deployment times out there. We would 

keep them within the windows that we currently have. That was 

one of our priorities. 

So as we built the budget, we ended up putting additional dollars 

and sets in during what we call endgame in order to make sure we 

were meeting the COCOM demand signals. 

Mr. LANGEVIN. As I see technology changes and improves, one of 

the challenges is also meeting the power requirements. Particularly, we talked about new technology developments in radar. One 

of the advantages of the DDG–1000, it is a larger platform and 

could expand—you could easily incorporate expansions of things 

like add power requirements on the platform, and the DDG–1000 

obviously doesn’t easily expand to accommodate those expansions. 

Can you talk a little bit how we plan to meet the power requirements of the radar of the DDG–51? 

Secretary STACKLEY. Right now the DDG–51 class is equipped 

with three 3,000 KW generators. And as we look at the power requirements with the added radar capabilities that we bring to the 

ship, in order to restore further margin, we are looking at adding 

a fourth generator to the DDG–51, and preliminary design studies 

have identified location and ship impacts. That is important and 

that gives us a baseline. 
25 

But we are also separately working a development effort towards 

what is referred to as hybrid electric drive. We have an ongoing 

technology program where we are going to take an in-service ship, 

bring effectively a motor that couples to the reduction gear of a 51 

giving us the ability to drive the ship through the electric plant. 

And then the next step will be to reverse that so you generate 

power from the propulsion plant giving—this is where the term 

‘‘hybrid electric drive’’ comes from. Very promising technology. We 

have it in a demonstration mode today. 

We are going to look at that in conjunction with the fiscal year 

2016 Flight III destroyer, with the hopes of being able to mature 

that technology and actually increase the ship’s power generation 

capability. 

I would like to be able to come back and give you further information as we move down that development time line, give you a 

greater sense whether in fact we are driving to adding a generator 

or whether this alternate technology that doesn’t just provide 

power, also provides much greater fuel efficiency, can mature 

enough to arrive in 2016. 

Mr. LANGEVIN. Are you completely banking on that hybrid technology to meet the requirements of the power generation of the 

radar? 

Secretary STACKLEY. No, sir. The baseline is adding a fourth generator. 

In parallel with that, we see this hybrid electric drive as a promising alternative that more than adding the generating capacity to 

the ship would also provide a more fuel-efficient way of driving the 

ship. 

Mr. LANGEVIN. Thank you. I yield back. 

Mr. TAYLOR. There is a vote on the House floor in about 2 minutes. 

When we get back, we are going to recognize Mr. Coffman and 

Mr. Hunter in that order. 

Again, I want to thank our witnesses first for the delay in getting started and the delay now. We should be back in 20 minutes 

or less. Thank you very much. 

[Recess.] 

Mr. TAYLOR. The committee will come to order. 

Again, I apologize for the delay. 

The Chair now recognizes the gentleman from Colorado, Mr. 

Coffman, for 5 minutes. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

General Flynn, speaking recently to the Service Navy Association, the Commandant of the United States Marine Corps stated 

that during the Quadrennial Defense Review deliberations, that 

amphibious forces were stressed in every scenario. However, in 

looking at the 30-year shipbuilding plan, it does not meet the Marine Corps’ stated requirement of 38 ships in the amphibious assault force. 

Could you please comment on the risk the Nation is taking by 

not planning for a 38-ship amphibious assault force? 

General FLYNN. On the requirement of 38 ships, we also agree 

that the minimum number with the degree of risk that is acceptable is 33, that is both for our forcible entry capability and our 
26 

steady stream operation. The way that risk has to be mitigated is 

you increase your OpTempo [operational tempo]. So that means 

your ships have to be out at sea more and also compresses some 

of your maintenance requirements, which also probably adds to 

your O&M [operation and maintenance] costs. 

So we believe that 38 is the requirement, but we can do it at 33, 

and the cost is deployment tempo and also operations and maintenance funding, sir. 

Mr. COFFMAN. Thank you. 

Mr. Secretary or Admiral Blake, 6 amphibious ships—2 LHAs, 4 

LPDs [Amphibious Transport Ship, Dock]—will be decommissioned 

in the next 3 years, at the same time that our amphibious force 

falls to 30 ships and below. This is 10 percent below the level the 

Navy and the Marine Corps characterize the limit of acceptable 

risk and 22 percent below that requirement. 

Understanding that the Navy plans to retain these vessels in the 

inactive fleet rather than selling or dismantling them, what would 

be the cost of continuing to operate these vessels given the significant level of risk we are assuming? What prevents the Navy from 

retaining these ships? 

Admiral BLAKE. Sir, to the first part of your question, you were 

absolutely right. The number is going to come down. We are going 

to be decommissioning those ships in the years as indicated. And 

it should also be noted that they will be in the inactive force and 

that if there were a national emergency, that those ships could be 

brought back out on line in order to support whatever the event 

happened to be. 

If we had to, if you will, determine what it would require to take 

the ships that are currently being decommissioned in that year we 

did a couple of excursions, it would require at least we estimate 

$1.3 billion, and that is a ROM number, Rough Order Magnitude. 

And the concern we had, it is never easy for the Navy as we are 

balancing priorities and we are looking within the fiscal boundaries 

that we are operating in, it is never easy to come to the decision 

that we have to decomission ships. 

However, in the case of the LPDs, they are at the end of their 

service lives, and one of the concerns that we would have is if we 

had to bring those ships back on line, there are probably, in addition to the number I mentioned, there would probably be some unforeseen costs as we kept those on line. I would also tell you if you 

look at our budget, basically we operate in five pots or colors of 

money. 

First, we have got the manpower account, and if we had to keep 

those ships in service, we would have to pressurize that account. 

So we wouldn’t be able to go there to cover the cost. 

You have your R&D account, and that is where we are trying to 

build a force for the future and determine how we are going to 

meet the future threats. 

You have your infrastructure account, which has got a number 

of high priority items, everything in it from family housing to quality for our sailors and Marines. 

And then you have got the O&M account, the operation and 

maintenance account, and the procurement account. 
27 

So there would be no easy place to go, if you will, when you look 

at that account if we were to, in fact, go back if we had to bring 

those ships out. 

General FLYNN. One of the key things that I think you have to 

be considering when you look at the decommissioning, even though 

it may be budget driven, there still needs to be an operational assessment by all of the key stakeholders as to what that does. And 

when you make that decision, that is driven sometimes by fiscal realities. It also has to be informed of the operational realities and 

capabilities you are going to have or not have by doing it. 

Mr. COFFMAN. Thank you. 

Mr. Chairman, I yield back. 

Mr. TAYLOR. I thank the gentleman for a really great line of 

questioning. 

The chair recognizes Mr. Hunter. 

Mr. HUNTER. Gentlemen, I thank you all for your service. 

Secretary Stackley, when it comes to the NASSCO, you have 

been asked about the MLP [Mobile Landing Platform], you have 

been asked about the amphibs. One last question here. When it 

comes to the actual T–AKE hull and propulsion system, do you 

have any thoughts about putting that into the next fleet oiler double hull T–AO(X) using that hull in that propulsion plant in that 

ship? 

Secretary STACKLEY. Yes. We have looked at concept designs 

where you leverage the existing design and take a look at what the 

capacities are for T–AKE-type hull versus what a T–AO(X) would 

need to provide. 

So there are concept studies and feasibility looks that indicate 

that T–AKE hull would be a viable platform for the T–AO(X). 

Mr. HUNTER. Would you say it is a pressing matter right now to 

get a double hulled oiler fleet out there right now? 

Secretary STACKLEY. Right now—in terms of the force requirements for oilers, we meet all of our requirements. And as I described earlier, service life for the T–AO classes go out to the mid2020s. 

So when we, in a 30-year plan, look at pulling T–AO(X) forward 

into the 2017 timeframe, it is looking at both the industrial base 

as well as getting to that more modern refueling-at-sea capability 

that would bring the double hull. So that was an important consideration as we moved it to the left. 

Our forces have a waiver or an exemption from the MARPOL 

[Maritime Pollution Act] requirements for double hulling, but we 

do see the benefit of getting there sooner rather than later. 

Mr. HUNTER. Moving them left up against the actual T–AKE production line would probably save a lot of money because they could 

keep going from there with that hull, the materials and everything 

else. But that is not going to happen? There is for sure going to 

be a gap in between if it was chosen to use that hull and that propulsion plant for the T–AO(X)? There is no way that it can be 

backed up to save money? 

Secretary STACKLEY. We took a hard look at the timing for the 

T–AO(X) and the plan, and across the alternatives when we tried 

to look at the feasibility of building T–AO(X) that much earlier, 

then we are starting to trade off other higher priorities inside of 
28 

our requirements to fill this other requirement ahead of need. So 

that is how we ended up in the 2017 timeframe. 

And the other thing I have to caution is when we talk about a 

T–AO(X), new ship class, there would be time devoted to that design but then we would also compete that new ship class so that 

it is not a given that T–AO(X), if it were on a T–AKE hull form 

would be going right behind T–AKE. There is a design piece and 

a competition piece that would intercede. 

Mr. HUNTER. So even if you took that hull form, you wouldn’t 

necessarily give it to the people who had been making those ships. 

It is going to be competed? 

Secretary STACKLEY. We would be competing. 

Mr. HUNTER. So you would compete it with other shipbuilders 

that hadn’t built that ship instead of having the folks having the 

expertise in building that ship carry it on? 

Secretary STACKLEY. We would be taking the requirements for 

the T–AO(X), we would be looking at detailed design and construction, determine what the proper hull form is, and we would be 

looking—from day one our intent would be to compete T–AO(X). 

Mr. HUNTER. Even if that T–AKE hull form was chosen to be the 

model? 

Secretary STACKLEY. Yes, sir. At this time, I don’t have any compelling justification to go to the sole source for T–AO(X). 

Mr. HUNTER. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair will recognize the gentleman from Virginia for an additional 5 minutes. 

Mr. WITTMAN. I want to follow up a question earlier about amphibious ship capacity. 

Can you articulate for the committee what impact the availability of amphibious ships has on the Marine Corps? And let me 

ask you a little bit further. 

Have Marines and sailors been subject to back-to-back or unscheduled deployments because of the lack of depth in our amphibious inventory? And what difficulty does the Marine Corps face 

when, for instance, a ship fails to pass its end serve or breaks immediately upon its acceptance? I just want to put that in perspective to understand some of the nuances on amphibious capacity and 

what it means to the current Marine Corps. 

General FLYNN. I can honestly tell you upfront we haven’t 

missed a deployment because of amphibious ships. But what we 

have had to do is what was in the planned availability and what 

was actually deployed has sometimes had to be modified at the last 

minute. And what you lose then is the training time that you spent 

together working up prior to the deployment so there is a measure 

of effectiveness. That has happened recently on some of the deployments that we have had to substitute an LPD for one that couldn’t 

deploy, and in another case, we had to look at another deck to do 

that. 

So I don’t think we have missed the point. I know we haven’t 

missed a deployment. But you do then lose that work-up time prior 

to deployment. 

It hasn’t really affected the Marines that deploy on the ships, but 

I do think if you are the ship that was not scheduled to deploy and 
29 

then you were put in at the last minute, I think it would affect the 

sailors that were doing that. 

But I think the recent deployments that you saw in January 

when we had Haiti and our other operations going on just show 

how much the fleet is used and how valuable it is to what we do 

every day, and the more flexibility you could have the better. That 

is why we went with the 11–11–11 mix of 11 big decks, 11 LPDs 

and 11 LSDs to give you that overall capacity and flexibility. 

Mr. WITTMAN. I yield back, Mr. Chairman. 

Mr. TAYLOR. The former chairman, Mr. Bartlett. 

Mr. BARTLETT. Just one short question. 

Admiral, in your testimony, you said that one of the missions of 

your Navy was to protect our sources of energy. As you may know, 

the Chinese have been very aggressively buying up oil all over the 

world. In today’s world, that doesn’t make much sense because 

those who come to the auction with dollars get the oil. We have 

only two percent of the world’s oil. We use 25 percent of the world’s 

oil. 

Do you think that the Chinese anti-ship missile may be relevant 

to their buying up oil all over the world? 

Admiral BLAKE. I am not sure there is a connection there, sir. 

I will tell you that we take their anti-ship missile seriously and 

that we are definitely considering ways to position ourselves so 

that we would be allowed access in an anti-access scenario. But 

other than that, sir, I don’t think—I don’t know of a connection between oil buyout and the access missile. 

Mr. BARTLETT. It makes no sense in today’s world why they are 

buying oil. I think the time may come, since oil is finite, that they 

will say, Gee, guys, I am sorry. But the oil is ours and we can’t 

share it. 

To make that a reality, they have to be able to protect the sea 

lanes for the shipment of oil. And if our ships can get there, they 

can’t protect them, can they? That is why I think this new antiship missile may be relevant to their buying up oil all over the 

world. Because if they are going to protect their sea lanes, they 

can’t have us near them, can they? 

Admiral BLAKE. Well, sir, I would say that we, as I previously 

said, we do take the anti-ship capability seriously and that the 

issue for us is to evolve our ballistic missile defense systems so that 

we are able to counter that capability and I think we are doing 

that. 

Mr. BARTLETT. It comes close to being a gamechanger, doesn’t it? 

Admiral BLAKE. I think it is a serious threat, and I think we 

need to be able to address it. 

Mr. BARTLETT. I thank the gentleman. 

Mr. TAYLOR. Secretary Stackley, I appreciate you sticking around 

as long as you have. 

One question that comes to mind is the affordability of the LCS 

[Littoral Combat Ship] and what you expect to see pricewise. My 

question is, is it your intention to award a contract of 10 to the 

first vendor or 5 separate 2-ship contracts? And do you think that 

there would be any merit to giving you the legal authority to make 

that an award of 10 for multi-year, if it is not the case already? 
30 

Secretary STACKLEY. Yes, sir. We do not have multi-year authority. What we have structured is what has been referred to as is a 

block buy where we would be awarding two firm ships, fiscal year 

2010 ships, with options for eight additional ships. And we have requested in the 2011 budget request economic order of quantity 

[EOQ] advance procurement funding that would allow the winner 

to combine the two ships with select material buys for the eight additional ships to gain some savings on the material side. 

And what we structure is competition for those EOQ dollars so 

that the winner has the ability to go out to his vendor base and 

compete, who gets the multi-ship material buys as a part of his bid. 

So it is not a multi-year but within the authorization that we received in 2010, it attempts to achieve much of the benefit of a 

multi-year when it comes to stability, savings through material 

procurement and then planning, if you will, on the part of the winner. 

Mr. TAYLOR. Given that I am certainly disappointed in the price 

of that platform, I am curious if either of the vendors has expressed any interest in making a better deal if given a multi-year? 

Has that subject ever been broached by them? 

Secretary STACKLEY. I don’t remember getting into a multi-year 

discussion with this solicitation. We have talked about getting to 

a multi-year, and in fact, the acquisition strategy that we have 

structured, the next procurement, in fact, would be a multi-year 

procurement. But at this stage given the turbulence at the front 

end of the program, we did not anticipate that we would be able 

to move directly into a multi-year with this buy. 

Mr. TAYLOR. Shifting gears. Given the critical importance of the 

EMALS [Electromagnetic Aircraft Launch System] system being 

delivered in a timely, cost-effective manner, where does that stand 

on the fourth-class carriers? 

Secretary STACKLEY. Let me break that out into a couple of 

pieces. 

One is the development, what is referred to as a system development and demonstration, SDD. We have several activities going on 

there. We have what is referred to as highly accelerated life testing 

taking place in Tupelo where system components are being tested 

and run through and accelerated alive to get learning in terms of 

the system’s ability to meet the 50-year lifecycle that it was designed for. 

We have high-cycle testing, which takes critical components 

through—we are up to 30,000 cycles, which is about a 16-year lifetime of the equipment looking for information on fatigue and performance at those high ends of the system’s performance. 

But most importantly is we have got the system, one catapult in 

the ground at Lakehurst where we bring together hardware, software, power system and are ramping our way up through what we 

refer to as no load tests, ultimately leading to aircraft launches in 

the end of the summer. 

So the SDD program is scheduled to complete around the second 

quarter of 2012 of the development at Lakehurst. I still have to get 

you up there, sir, when we can coordinate schedules, but we are 

learning greatly there. We have identified software issues that set 

us back in a test program. It came through those software issues 
31 

and are continuing to march forward. So the SDD continues to support the CVN 78. 

Secondly, we have production. And the production we have the 

total system broken down into a half a dozen subsystems that we 

are tracking closely. For all but two major pieces of equipment, we 

are looking at significant float in the production schedule on the 

order of about 4 months. 

Two pieces of equipment. It is actually one piece of equipment, 

two of, and that is motor generator sets. We are closely managing 

that production schedule. There is no float in that schedule so we 

have to be careful that we don’t incur any interruptions on the production side. But today we support the CVN 78 schedule in both 

SDD and production, and we have got a pretty strong team managing this day-in-day-out to keep it that way. 

Mr. TAYLOR. Secretary Stackley, the Navy has pointed out the 

need for surface combatants. The general has done an excellent job 

of pointing out the need for large-deck amphibs. This Congress has 

been good enough to authorize and appropriate funds for two 

DDGs, two LPDs and one LHA, and yet the Navy has not signed 

the contract. And quite honestly, we have delivered identical letters 

to both Northrop Grumman and the Navy reminding both of you 

that these are a finite amount of funds for a fleet that needs to 

grow. And I want to do everything I can from this end to encourage 

you to sign those contracts. 

Secretary STACKLEY. Yes, sir. Can I give you a status on where 

we are and how we are attacking this. 

In shipbuilding, what you just described is frankly the most significant issue that I am dealing with on a day-to-day basis—that 

is the significant amount of shipbuilding that is pending at Northrop Grumman on the gulf coast. 

In terms of those five ships, we, in fact, have advanced procurement contracts in place for the DDGs, and we have received proposals for the advanced procurement contract on LPD–26—I am 

sorry. We have advanced procurement contract in place for LPD– 

26. We have received proposals for construction for LPD–26 and 

proposals for construction of DDG–113. We received those proposals about a month ago, a little bit over a month ago. We are 

evaluating those proposals. But more importantly, we are engaging 

in direct and intensifying discussions with the shipbuilder to come 

through the differences between their position and our position. 

It is a collaborative but hard effort to get there. It is our priority, 

and I know it is Northrop Grumman’s priority, and we understand 

and agree with your sense of urgency. 

What we have to do on the government side is ensure that we 

arrive at a contract that meets our requirements and is in the best 

interest of the taxpayer. We will keep you informed as we continue 

to move through these negotiations. They will be difficult. But we 

are, both Navy and industry, very committed to getting these completed successfully. 

Mr. TAYLOR. Lastly, and I do want to thank you for what I consider to be your strong efforts to turn the LCS program around, 

your good work on the Virginia program. There are a number of 

programs going in the right direction. 
32 

The thing that continues to trouble me is that this is, to my 

knowledge, the third Chief of Naval Operations that has come before the committee and says we need a 313-ship fleet. We finally 

hit bottom and started growing the fleet until this year. This year 

the Navy wishes to commission 7 ships but wishes to decommission 

10 ships. That is going the wrong way. And I think you have heard 

up and down this panel our desire, as Members of Congress, who 

have the responsibility to provide for the Navy, to grow the Navy. 

I think the most sensible way to do that—and I am going to let 

you tell me why not—would be to SLEP [Service Life Extension 

Program]—at least until the LCS’s start being delivered in sufficient quantities—to SLEP the FFGs [guided missile frigates]. Now, 

the first thing that was thrown back at me was, Well, we don’t 

have the manpower. I can’t see where one-quarter of 1 percent of 

the 330 men and women in the United States Navy is really going 

to kill you. So I think you are going to have to come back with a 

better argument than that. 

The cost of some of these vessels—and again, I want to work 

with you on this. If we are going to SLEP them, should we SLEP 

the best, start with the best, or should we start with the five worst 

that we know need generators and other things. 

But I don’t think anyone wanted the LCS program to drag out 

as long as it has. I don’t think anyone wanted the fleet to shrink 

as much as it has, but we do have an alternative to a shrinking 

fleet and that is to SLEP the FFGs, so we will be sending you some 

questions in the near future, and I hope you will get back to me 

in a timely manner. 

Thank all of you for a very long day here and for your service 

to our Nation. The panel is dismissed. 

Mr. TAYLOR. We now call to the witness stand Mr. Mike Petters, 

the corporate vice president and president of Northrop Grumman 

Shipbuilding; and Mr. Dave Heebner, executive vice president, Marine Systems, General Dynamics Corporation. 

Mr. Petters, I have been told you have been on the job longer, 

if that is the case, we are going to allow you to go first. 

STATEMENT OF C. MICHAEL PETTERS, CORPORATE VICE 

PRESIDENT AND PRESIDENT, NORTHROP GRUMMAN SHIPBUILDING 

Mr. PETTERS. Thank you, Mr. Chairman. 

Chairman Taylor, Ranking Member Akin, distinguished members 

of the Seapower and Expeditionary Forces Subcommittee. I really 

appreciate this opportunity to be here today and I appreciate the 

invitation. 

Mr. Chairman, your invitation asked for my opinion of the 

Navy’s 30-year shipbuilding plan, and I will limit my remarks to 

a summary of my written testimony which I request be submitted 

for the record. 

First, I think the Navy has presented a courageous plan with the 

budget discussion taking center stage across America today. The 

Navy has stood up and said, This is what we need to be effective, 

and they have not allowed today’s fiscal restraints to overwhelm 

what they believe are the mission requirements. But having said 
33 

that, there is something important to understand about this plan 

from my perspective. 

It presumes that there will be a smaller industrial base required 

to support the plan, and it presumes that that base will be healthy. 

I think these are very bold presumptions. Our industrial base 

today, albeit with some minor adjustments over the years, has been 

established to support a 600-ship Navy, and yet this plan presumes 

even greater adjustments are to come. 

And when we do our planning at Northrop Grumman Shipbuilding, we always start with the assumption that the Navy’s 30- 

year plan is the best case. Now, if any industry were to go through 

this kind of rationalization there would be a lot of turmoil and uncertainty. The Navy’s plan doesn’t really appear to consider that 

part of the issue. 

These kinds of adjustments would require significant collaboration with the Navy, the Congress, and the industry to enable this 

transition and minimize a lot of uncertainty. I believe that the 

major work areas that will be affected would be workforce, the facilities and the supply chain. And building these complex ships, as 

you know, requires very uniquely skilled craftsmen. 

At Northrop Grumman, our demographics have shifted to a 

workforce of employees with less than 5 years, coupled with a large 

population of shipbuilders with more than 25 years experience 

nearing their retirement eligibility, and that experience is not easily replaced. We have addressed this by investing in our people 

through leadership training, workforce development and apprenticeship programs. However, should some sort of rationalization 

occur, it is probable that the very same people that we are investing in today would be the very first ones we would be forced to let 

go. That combined with the projected retirement levels would jeopardize our productivity in the future. 

A rationalization would also be challenging in terms of our facilities. Shipbuilding is not like the hotel industry, where the solution 

for two hotels with 40 percent occupancy is closing one to reach 80 

percent in the other. Each of our facilities are tailored for specific 

applications and support of particular missions. A great degree of 

thoughtfulness would be needed to answer the question, how would 

we move from where we are today to where we would need to be 

in the future? And yet the choices associated with facility rationalization, like redeployment, face capital investment and environmental challenges just to name two. In other words, one size solution would not fit all cases. 

The issue of the supply chain would be how to create a sustainable consistent volume of demand, which is the same issue we have 

today. Today’s low volumes are eliminating competition. We have 

80 percent sole-source in many programs, and 60 percent solesource across all of our programs. Even with 80 percent solesourcing, we can still manage our costs, as long as we have consistent demand. And without consistent demand, even with competition, we struggle with managing that cost. 

Now, we have come through a period of multiple lead ships with 

the supply chain competition, but we are transitioning to follow-on 

ships which inevitably leads to significantly less competition. So 

how can we ensure the health of that chain? 
34 

As I testified to this subcommittee last July, at the heart of our 

difficulties in shipbuilding is that most of the time the Navy must 

buy ships one at a time and must pay for them up front. This results in tough challenges in creating a healthy and efficient shipbuilding industry. We need to increase the use of initiatives that 

enable us to amortize our investments in our people, facilities and 

supply chain, like multi-year appropriations and multi-year contracts. 

And I would like to conclude my statement with a point regarding the Ohio-class replacement program. It has already been talked 

about at length today, but I just add, if we could be moving to a 

smaller base, as the plan seems to indicate, all of us, the Navy, the 

Congress and the industry will be wrestling with what size base 

that is. One of the factors that will drive that decision, in fact I 

think the largest factor that will drive that decision, is how the 

Ohio replacement program will be budgeted. If it is in the SCN 

[Shipbuilding and Conversion, Navy] account, the base would be 

significantly smaller, as this program will absolutely impact every 

other program in that account. 

If it is not in the SCN, if it is taken off the budget or funded as 

a strategic enterprise, then the base required to support the SCN 

is a different size and will minimize the turmoil and the uncertainty that lies ahead. 

Now, this second option would certainly be my respectful recommendation. 

I welcome the attention of the Congress and this subcommittee 

in particular to the needs of our industry, and I thank you once 

again for allowing me to talk with you today. I really appreciate 

the invitation. I look forward to your questions. 

[The prepared statement of Mr. Petters can be found in the Appendix on page 75.] 

Mr. TAYLOR. The Chair thanks the gentleman very much. 

And again, our apologizes for keeping you here so late. 

The Chair now recognizes Mr. David Heebner of General Dynamics. 

STATEMENT OF DAVID K. HEEBNER, EXECUTIVE VICE PRESIDENT, MARINE SYSTEMS, GENERAL DYNAMICS CORPORATION 

Mr. HEEBNER. Thank you, Chairman Taylor, Congressman Akin, 

members of the subcommittee. It is a pleasure to appear before this 

committee again. And I want to thank you for your committee’s 

support for the United States shipbuilding. I would like to make 

a brief opening statement and, if you would permit me, submit a 

written statement to be added to the hearing record. 

Mr. TAYLOR. Without objection, so ordered. 

Mr. HEEBNER. My name is Dave Heebner, and I am the Executive Vice President of General Dynamics Marine Systems. GD Marine Systems includes Bath Iron Works in Bath, Maine; Electric 

Boat in Groton, Connecticut, and Quonset Point, Rhode Island; and 

NASSCO in San Diego, California. 

Our shipyards employ nearly 22,000 people who design, build 

and support submarines, surface combatants and auxiliary ships to 

the U.S. Navy and commercial ships for the U.S.-Flag customers. 
35 

Our primary objective at General Dynamic [GD] shipyards is to 

provide the Navy quality ships that achieve fleet performance requirements and are the best possible value to the American taxpayer. 

When I last testified before this committee in July of 2009, I 

mentioned three aspects that have direct and substantial impact on 

our shipyards’ ability to achieve that goal. They are, one, stability 

of requirements. Stable requirements lead to more mature designs 

which reduce production risk and promote efficiency. Two, predictability in funding and scheduling. Predictability allows time for 

planning and commitment of resources that enhance shipbuilding 

processes. And three, sufficient volume for efficient production. 

Building enough ships to enable investment in processes, people 

and facilities to lower costs and maximize the value of each ship 

we deliver. 

While assessment of the industrial base impact of the Navy’s 

new 30-year shipbuilding plan is ongoing, I am certain that the 

Navy has worked hard to balance available resources among a 

broad and diverse set of competing demands. Stability of requirements is implicit in this plan, and predictability is enhanced because the plan is based on reasonable assumptions and can be executed. 

With regard to these two aspects, the plan promotes our ability 

to provide quality ships at the best possible value. 

However, the most challenging aspect of the plan is volume. 

While we credit the Navy for its balance in allocating available resources, the new plan is funded at levels that build 13 fewer surface ships in the near term when compared to the previous shipbuilding plan. Internal to our shipyards, the volume challenge will 

trigger workforce resizing. And external to our shipyards, reduced 

volume will negatively affect the thousands of suppliers who provide components and commodities. In the end, this reduction in volume will lead to higher shipbuilding costs, not the best possible 

value for the taxpayer. 

This simply reflects the principle of economy of scale. Over the 

past decade, GD made major capital investments in our shipyards 

to enable production efficiencies, but the return on these investments to the Navy will be limited without sufficient volume. Our 

objective remains unchanged. We will deliver high-quality, capable 

ships to our Navy. The new 30-year shipbuilding plan is a good 

baseline, and we will work with the Navy and the Congress to address the volume issues. 

Mr. Chairman, thank you for your continued strong support of 

American shipbuilders. I am proud of the high quality ships that 

the men and women of General Dynamics deliver to the Navy, and 

I invite the committee to visit our shipyards, so that our skilled 

workers can show you the magnificent ships they build. 

I thank you for this opportunity to testify. I look forward to your 

questions. 

[The prepared statement of Mr. Heebner can be found in the Appendix on page 91.] 

Mr. TAYLOR. Thank you, Mr. Heebner. 

The Chair now recognizes the ranking member, Mr. Akin. 
36 

Mr. AKIN. Thank you, Mr. Chairman. I did have one quick question of Mr. Heebner. I understand that moving work on the MLP 

into fiscal year 2012 or at least into 2014 creates more stability for 

the workforce at NASSCO, but would moving that work to the left 

create any savings on these platforms? That is the first question. 

And then the second question would be, what additional work do 

you hope to compete on, and will those opportunities be available 

before fiscal year 2014? 

And I guess maybe add a third thing relative to a comment that 

was made by Secretary Stackley, and that was, I think they said 

that you have got one MLP scheduled in 2011. They are going to 

skip 2012, so that there is time to work out possible bugs between 

the first and then the next couple. I just wanted you to respond to 

those if you would. Thank you. 

Mr. HEEBNER. Thank you, Congressman Akin. 

I would like to draw back some attention to the hearing that we 

had in July of last year, and remember that the focus on that hearing was the efficiency in American shipbuilding, in both military 

ships and also in commercial shipbuilding. 

And I can tell you that the investments that we have made to 

reengineer our shipyards in facilities and people and processes 

have been effective in working toward that efficiency. I can point 

out to you the Virginia-class submarine program and our ability to 

anticipate the Block III ship buy and significantly improve the cost 

of those ships, getting those ships down to $2 billion a copy, to be 

able to transition from an initial ship that took 84 months of span 

time to construct down to our target of 60 months, a significant 

savings. That is a credit to being able to plan effectively for what 

we want to do. 

For the MLP program, another important ingredient in being 

able to build ships serially and efficiently is by creating a complete 

design before you start building the ship. That design factor is built 

into our plans for the MLP, and I am not interested in going back 

to the old days where we wait to develop requirements, where we 

start construction with a low level of design completion. I think we 

have found the model that works. We have done it with the Virginia class. We have done it with a product carrier at NASSCO, 

and I think we should continue to do it by getting the designs complete first. That is our plan on MLP, and we have looked at it from 

the viewpoint of being able to build those ships serially, year after 

year, so that we can maintain the workforce and those efficiencies 

that we have built into the yard. 

Mr. AKIN. So I think what I am hearing you say is because you 

are moving to the new method of building the ships which is less 

expensive, part of that says, is you have got your whole design as 

done. You know that everything is going to hook together, and so 

when you build the first one, you are not anticipating any major 

changes, so you can build the second one right after the first. Am 

I understanding you? 

Mr. HEEBNER. As long as our Navy partners maintain consistency in the requirements for those ships, we intend to leverage the 

design build process that we have now proven in our own processes 

to be effective. 
37 

It is clearly evident in the PC [Patrol Craft] program that we 

built out there in the NASSCO shipyard, where we delivered that 

ship 6 months early, and we reduced the cost on the ship. We produced the first ship 6 months ahead of the schedule, and we reduced the cost in that to all of the stakeholders. 

So I think that that is possible in shipbuilding. We have demonstrated it there, and we are showing that we can meet our commitments in the submarine programs as well. 

Mr. AKIN. So then the other part of my question was, does that 

mean savings, and can the ships be built at a lower price if you 

can, leveling your workforce, if you can build them on 1-year increments, does that help you out? And does that translate to savings 

for the Navy? 

Mr. HEEBNER. As I mentioned in my opening statement, obviously one of the important objectives we have in shipbuilding is to 

deliver the best possible value to the taxpayer and by being able 

to maintain a skilled workforce without the cycles of reductions 

and increases, to be able to maintain the trained base. And I will 

give you a quick example. 

When we were having difficulties at NASSCO 5 or 6 years ago 

in meeting production and time lines, basically, we were experiencing five trainees to one journeyman. Today we have five journeymen to one trainee. That is the way to do it. That is the way 

you build efficiency into your yard. If you want to break production 

on us, if you want to move the next ship out to meet some fiscal 

timeline, we can do that. But that workforce changes under those 

conditions, and we go back to the other condition. We know what 

the answer is. Let’s maintain the momentum that we have in 

building efficiency into our yards. 

The answer is, yes, we can save money on those ships. 

Mr. AKIN. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman. 

The Chair now recognizes the gentleman from Connecticut, Mr. 

Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

Just a follow-up on the Ohio-class discussion from the prior panel 

and Mr. Petters’ reference to it. 

First of all, I think you would find a lot of support on this committee to finding a separate funding mechanism for that. It would 

solve a lot of problems by itself. 

I mean, obviously, the other issue is just, you know, the projec- tion, the $6 billion to $7 billion per submarine, which the Navy has 

built into its shipbuilding plan. I mean given the fact that, obviously, the Virginia-class program achieved a great deal of success, 

as all the witnesses have mentioned earlier, do you think we can 

maybe be a little more optimistic about whether or not building on, 

you know, what we have learned from that, that there may be hope 

that we can do better than that projection? 

Mr. HEEBNER. Thank you, Congressman. 

The direct answer is yes. 

Let me just compliment the Navy at this point and the Congress 

and this committee for supporting the Ohio-class development process. We know what it takes to get to an effective design at the time 
38 

of construction start. And we have programmed into this Ohio replacement program the time to be able to do that efficiently. We 

have engaged our partners in the United Kingdom, so we can cost 

share in that process as well. So we have an effective plan in place 

right now to be able to deliver those submarines, and begin construction in 2019, and deliver those submarines on the schedule 

that we have intended. 

There is a lot of work that has to be done between now and then. 

The Navy and our UK partners have to decide on the requirements, the requirements for each individual boat and also for those 

that we share commonly between us. As we get through that process, we will build that into the design. And our intention is to complete the design so that we can build the ships in 2019 without 

making multiple changes as we begin construction. That will enable the efficiency that will keep the cost down. 

Mr. COURTNEY. Well, we are rooting for you. 

Tomorrow we are going to have a lot of people on the Hill who 

are part of the submarine industrial base. The suppliers are kind 

of swarming the place. I mean, you described how you know when 

you begin these programs, you have multiple bidders, and then as 

it goes along, because just by nature, you end up with sort of solesource. I mean, how fragile is the supply base right now? 

Mr. PETTERS. As I mentioned, our overall supply chain today for 

all of Northrop Grumman shipbuilding is about 60 percent solesource. 

For the submarine community, it is actually 80 percent solesource. On the one hand a sole-source supplier or sole-source condition can be particularly challenging to manage from a cost perspective because when you go to negotiate it with a sole source supplier, you have a lot different kinds of leverage, less leverage frankly. But what we found in all the studies that we have done across 

all of our programs is that the most important factor in being able 

to manage the cost is really not whether they are sole-source or 

not. It really is, are we able to provide consistent demand and 

steady, consistent demand that we can forecast and then meet our 

forecast on? 

So, in the case of the Virginia-class program, that has actually 

been our best program, from a cost-management perspective in the 

supply chain, because we have been able to predict to our supply 

chain, even though it is 80 percent sole-source, we have been able 

to predict to them what the demand is going to be. And we have 

been able to place work with them in such a way that we have 

been able to come to good cost-effective solutions that make sense 

for both the suppliers because they have consistent demand, as 

well as the shipbuilders and the taxpayers because of the bill. 

And so, for me, the issue is, well, while we talk about sole-source 

and lead ships kind of drive competition, at the end of the day, the 

competition is really not the panacea I think that people would like 

it to be. I think the real issue is treating the program as a class 

and then being able to keep a steady, consistent demand out there 

for that supply chain to manage to. And I think you can do that 

whether it is 80 percent sole-source or 20 percent sole-source. That 

consistent demand is the key. 

Mr. COURTNEY. Mr. Heebner. 
39 

Mr. HEEBNER. The supply base for General Dynamics Electric 

Boat is 70 percent single-source supply. I would echo Mr. Petters’ 

comments that it is manageable as long as we can provide predictability and stability to that supply base. From time to time, there 

are some of those suppliers who just cannot sustain themselves 

over time, and we take exceptional action to be able to maintain 

that source. But I do believe that it is manageable even at that 

high rate. 

Mr. COURTNEY. Thank you. 

Mr. TAYLOR. The Chair recognizes the gentleman from Virginia, 

Mr. Wittman, for 5 minutes. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Gentlemen, thank you so much for joining us today. We appreciate the great ships you build, and so do our men and women in 

uniform. 

I want to just start out with a question in looking at the shipbuilding plan. And you all had talked about consistency in demand 

and making sure that we had that capacity within the industrial 

base to make sure we can meet this Nation’s needs. When I look 

at certain classes, I look at DDG bills, and I see it go from two to 

one, two to one, two to one. I am wondering how you see that affecting your capacity. And again, I realize the challenges there with 

making sure you have the experts there trained and making sure 

you keep those experts in building those ships. I want to talk about 

that particular class. 

And then, also, the SSNs, as you look out in the future, when 

we get to 2030, you see we start to trail off with the number of 

SSNs that we are building off to being at 39 in 2030. So I am wondering with the trail trailing off of the builds on SSNs and then 

it ramps back out, what does that do to the industrial base? And 

then what does the two-one-two-one schedule for DDG–51s do to 

your ability to maintain that capacity in the industrial base? 

Mr. HEEBNER. If I could start with two comments. The first is 

the DDG–51 is a good example of what can happen successfully in 

shipbuilding when you get the serial production of ship and you 

have competition between two surface combatant yards, as you do 

between Ingalls and Bath Iron Works. Now, we were successful in 

building that ship for a long time. But several years ago, we made 

an investment in the Bath Iron Works yard in concert with the 

United States Congress, the Navy, the communities in the State of 

Maine. And we built the land level transfer facility and we built 

an ultra hull manufacturing facility. 

And the result of that is, from the last slider we had to the most 

recent launch ship, we have taken over 2 million man hours, labor 

hours, out of the production of a single DDG–51. That is the type 

of thing you can do with investment. And you get—I am able to 

convince my board to make these kinds of investments when I can 

show them that we have the likelihood of serial production. 

When I saw the 30-year plan and noted three ships every 2 

years, as compared to significantly more than that in the periods 

that allowed us to build that efficiency, I don’t know how the Navy 

or the Congress would intend for us to maintain two competitive 

surface combatant yards. So I think we need to take a look at that, 

keep competition in, build five ships every 2 years, certainly a re-
40 

quirement, but do it so that we compete with each other and get 

the best possible price for the taxpayer. Make us work hard to do 

that. We are ready for that competition. But it takes more volume 

than three ships every 2 years. 

Mr. PETTERS. And I would just echo that there is not sufficient 

volume, in my opinion, in the plan today to have healthy competition. Competition works where you have sufficient volume to keep 

the competition moving year in and year out. And I think the 

DDG–51 program was the Virginia-class program before the Virginia-class program came along in terms of its model program, serial production, attracting investment, attracting talent, using competition to drive efficiencies. It is also a model program. We are on 

the edge of restarting that program now and we have a plan in 

front of us that is going to restart it at low production rates. If the 

expectation is that we can achieve what we did before in the 51 

program at higher production rates, I would agree with my compatriot here that volume is not sufficient to warrant that. And so 

we would have the same issues of trying to justify investment, trying to attract talent and those kinds of things. 

Mr. WITTMAN. An additional question about our amphibious 

ships. And I know there is a lot of debate. We heard it earlier with 

General Flynn with 38 versus 33. We know we are transitioning. 

We are transitioning from the LPD to the LHD [Amphibious Assault Ship]. Tell me, is that transition going to be taking place in 

a way that is going to make sure we transfer efficiency in the process to make sure we can meet our amphibious ship needs? 

Mr. PETTERS. Up until this plan was published, the plan that we 

were working to was a plan that would finish the 11th LPD, then 

go and use the LPD hull to build a couple of LCCRs and use that 

to transition into the LSDX program. And that would be a bridge, 

if you will. It would be a bridge, a design bridge. It would also be 

a talent and capability bridge and facility bridge. 

This plan has removed those two LCCRs, and so basically it has 

taken the bridge out. What the implications of that are for LSDX, 

I don’t know. If the idea is that somehow you can bridge from an 

LPD–27 to an LSDX with a 4- or 5-year gap, I think that that is 

a bridge too far. And so we will have to—that is one of—in my 

written testimony, that is an area where I think that the plan 

could use a little bit more scrutiny. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

I apologize. That should have been LPD to LSD, but anyway. 

Mr. TAYLOR. The Chair thanks the gentleman. 

The Chair now recognizes the gentlewoman from Maine, Ms. Pingree, for 5 minutes. 

Ms. PINGREE. Thank you very much, Chairman Taylor. 

And thank you both for being here today and speaking with us 

about your industry. You both did a good job of answering one of 

my questions about the competition, industrial base, and the procurement rate of the DDG–51, so I don’t know that I have anything 

else to say. But I appreciate, and you have heard in earlier testimony, how often that comes up with the committee members and 

our concern about maintaining the industrial capacity and the competition. 
41 

My other question is for Mr. Heebner. And thank you again for 

being here today. It is nice to see you. As you know, the DDG–1000 

program is experiencing a Nunn-McCurdy cost breach due to the 

decision to truncate the program to only 3 ships instead of 10 and 

not likely because of program or shipbuilder performance. What is 

your perspective on the Secretary’s explanation for the cost breach, 

and can you give us an update of the production of the DDG–1000? 

Mr. HEEBNER. Thank you, Congresswoman Pingree. 

It is a program that we are particularly proud of at this stage. 

A couple of comments I think would be appropriate before I talk 

about the Nunn-McCurdy breach. The DDG–1000 program is 

leveraging off of the success of the DDG–51 program at Bath Iron 

Works. And we have had the opportunity to exercise a land level 

transfer facility in the ultra hull and made great strides in improving efficiency in shipbuilding performance. We designed this ship 

more completely before start of construction than any other ship 

that has been built at Bath. And as a result, as we have begun the 

process, we have maintained the schedule for production and, in 

some cases, exceeded it. 

But you shouldn’t just listen to my view of this thing. Secretary 

Stackley has a quarterly meeting with all of the major contributors 

to the DDG–1000. And I commend the Navy for the way they are 

managing and overseeing the performance of the multiple contributors to that program. And that ship is coming along. 

From our perspective, the hull mechanical and electrical is about 

10 percent complete, so it is too early to declare victory, but the reality is, we are on or ahead of schedule in the projection. We have 

leveraged lessons learned in the DDG–51. I like the comment that 

CNO Roughead made in his testimony where he said, the NunnMcCurdy breach is mathematics. And he talked about a program 

that went from 10 ships in his last assessment to 3 ships, and 

when you do the mathematics, you simply get a technical breach 

that must be reported and must be dealt with. 

My suggestion to you though is that we are in the process right 

now of contracting for the DDG–1000 three ships. The first one is 

under contract. The second and the third ships are not under contract. If we can keep those on contract, then we can generate the 

savings that have been built into the plan. If we must delay those 

contracts, then that will have impact on both the workforce and 

also on the cost of the ship. So it is important that we maintain 

our vigilance in moving forward and getting those two ships under 

contract. 

Ms. PINGREE. Thank you very much. 

Thank you, Mr. Chair. 

Mr. TAYLOR. Mr. Bartlett. 

Mr. BARTLETT. Thank you very much. 

When I became Chair of this subcommittee, I was concerned that 

our platforms were two few and very large and provided very enticing targets for a peer. And I would imagine that if a peer chose to 

start a war with a Pearl Harbor kind of an event, I wondered how 

many of our major assets would be available to us the next morning. And we commissioned three naval architecture studies looking 

at what a future navy might ought to look like considering these 
42 

threats. And one of those was chaired by Art Cebrowski, who I am 

sure you know. 

And his study indicated that he thought that we should have a 

600- to 800-ship navy that would cost no more than our present 

navy because he was envisioning much smaller ships. I noted that 

we had unmanned aircraft. The pilots are in Nevada. And we have 

unmanned submarines. We still have people on ships. And I asked 

them why we still had people on ships since they are obviously 

easier to drive than either an airplane or a submarine. And the answer I got was that we have so few of them, and they are so big 

and so valuable, we have to have people on board for damage control. 

As you know, half the cost of keeping a ship at sea is the people. 

So if you got rid of half the fleet, we could have 50 percent more 

ships. If you got rid of all the people, we would have twice as many 

ships. 

Well, if you had a navy like Art Cebrowski envisioned, 600 to 800 

ships, and now if you took the people off them, you could have 

1,200 to 1,400 ships out there. With that many ships, you could 

consider them semi-expendable, and you could rest easy if you 

didn’t have manpower on them to help put out the fires and control 

the damage. What would life be like in your yards if you were 

building six ships a year for each yard? That is what this would 

amount to, by the way. They wouldn’t be quite today’s ships, but 

they would be six ships in each yard a year. 

Mr. PETTERS. Well, Congressman, I guess my first reaction to 

that is, if I could be in serial production on any kind of platform, 

it would be preferable to building ships one at a time. And if I 

could manage the investment stream around a class of ships instead of trying to do it on an annual basis the way the budgeting 

process works, I could also create a set of efficiencies. 

I, frankly, don’t think the issue is, what would it look like in the 

year that you were actually building six ships of a different kind? 

You are talking about a whole different kind of a concept for ships 

at that point. 

I think the challenge for the industry and for the Congress in 

something like that and the requirements piece of it would be the 

turbulence of the transition from the large platforms, the facilities 

to build large platforms, to creating a different kind of facility, a 

different set of qualifications in our workforce to set up that serial 

production. That would be a very turbulent period that would be, 

you know, a significant amount of challenges around efficiencies of 

investment. 

I can point to, you know, just an example of a composite facility 

that we have invested in heavily in Gulfport, you know, creating 

a new technology for a composite deck house for the DDG–1000. 

Those investments were made based on the concept that this composite deck house would be available for a class of ships that was 

a couple of dozen ships. We are now down to three. And so the return, you know, the managing of that return is a big challenge. 

And so if that is where you are going to want to end up—if you 

could say today that we knew for a fact we were going to end up 

there, I think we could all chart a path that could get us there efficiently. 
43 

The challenge that I see is that, I am not sure we can chart that 

path, you know a 5- or a 10-year path when we move things 

around year in and year out. 

Mr. BARTLETT. With the new Chinese anti-ship missile, I think 

having smaller and more is a distinct advantage. And if we had 

enough of them that you could consider them semi-expendable, like 

we do our unmanned aircraft, then we could have twice as many 

ships for the same dollars because half the cost of keeping a ship 

at sea is the people on the ship. 

Thank you very much, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman and now recognizes the gentleman from Connecticut for 5 minutes. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

I wanted to just pick up an item which was in your written testimony, Mr. Petters, regarding the workforce challenges as far as the 

bulges that you sort of have in terms of the demographics. 

In your testimony, you mentioned the fact that Northrop Grumman is doing some partnering with community colleges and I guess 

probably hopefully the vo-tech schools in terms of trying to solve 

that problem. The House actually enacted or passed a bill last year 

which is waiting, is pending in the Senate, the Student Aid and 

Fiscal Responsibility Act, which is basically a way of sort of reorganizing higher ed assistance that will free up some dollars in a 

budget neutral way that I think will be very beneficial to our country. And one of the aspects of it is setting up the competitive grant 

program for community colleges that show that they are collaborating with business in terms of workforce needs in their region. 

If it does make it through the Senate, who knows, but it will create I think a lot more financial resources for community colleges 

to sort of, again, get more connected to workforce needs in their 

areas. Assuming that happens and that your area of community 

colleges could sort of expand those types of programs, I mean, is 

there more capacity for Northrop Grumman to grow those types of 

programs, and would that benefit your workforce needs? 

Mr. PETTERS. Thank you for the question, Congressman. 

It is an area of personal interest for me. I served for several 

years on the State Board of Community Colleges in the State of 

Virginia, and today I am a member of the Shipbuilding Executive 

Team that does that in the State of Virginia. We are heavily engaged in the Workforce Council in the State of Mississippi, and we 

are also heavily engaged in the Workforce Development Committee 

in the State of Louisiana. It is so critical to us that I personally 

believe that my business has to be involved in the pipeline of workforce development all the way from the Governor’s office all the 

way down through the classrooms and into the shipyard itself. 

We have in the past worked hard with the community colleges, 

and we have been able to get some Department of Labor grants for 

almost exactly the concept of things that you are talking about. I 

would have to go back and look at the specific legislation here, but 

certainly, the opportunity to compete for grants that would create 

alignment between what the community college’s mission is and 

what our requirements are would be very beneficial to us. 

You know, the challenge for us today is that nobody graduates 

anybody with a degree in shipbuilding. You have to get that by 
44 

coming into the shipyard. And we have actually been able to go 

into the colleges and use some of our training programs in the community colleges so folks work on their associates degree on our curriculum, which is actually very helpful to us. 

Mr. COURTNEY. In the case of EB [Electric Boat], I know for a 

fact that this is happening in southeastern Connecticut. There is 

a mentoring high school program which EB has had for a number 

of years, where students from high school get brought into the design area with mentors to kind of really—you know, they have a 

science and math proclivity, and this kind of helps them really see 

an end game in terms of the value of those skills. And we now have 

a situation at EB where there are mentors who are now mentoring 

high school students who themselves went through this program 10 

or 15 years ago as high school kids. And Three Rivers Community 

College, again, does have those kind of relationships with EB. 

But personally, I just feel that this legislation will provide real 

resources and also policy to get our educational system working to 

help businesses, not just shipbuilding, but certainly it appears anyway that the demographics suggest that we really have got to do 

a better job to produce that. Again I don’t know if you want to comment on it. But again, I really appreciated your testimony focusing 

on that issue. 

Mr. HEEBNER. I would make just a brief comment, Congressman 

Courtney, and I know we have spoken about this in the past. 

Clearly the path to success in a shipyard for a young man or 

woman is through experience, but it is also through education. And 

while we can do a portion of that in the shipyard itself, we rely on 

the local communities at all of our shipyards to augment that with 

formal education. We get the net benefit of that in the shipyard as 

the individual worker becomes more proficient at what he does. 

But we also get the benefit of that in the community because we 

have more educated people who are more engaged in the community and help to set the role models that others will follow as well 

as they come along. So it is a very important part of the development program in each of our yards. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

Mr. TAYLOR. I am curious, because at different times, both of 

your corporations have been to see me and probably every member 

of this subcommittee, in, you know, what appears to be a semipanic as you are trying to look out for your workforce, as you are 

trying to keep your operations going. And the question that always 

comes up in the back of my mind is, obviously, someone saw this 

downturn coming, no matter what the program was, a while back. 

To what extent do your corporations feel like the Navy is listening 

when you speak several years out and say, do you know what? I 

am going to hit a bathtub of employment in 2 years. I am willing 

to negotiate a price, a little bit better price on another of something 

that I am already making, would you be willing to enter into that 

type of negotiation? 

To what extent does the Navy listen to that type of an approach 

from your corporations? 

Mr. PETTERS. Mr. Chairman, I have a personal experience of 

going through that in Virginia. In about 2005 or 2006, we saw that 

the delivery of the Bush and the delivery of a refueling overall, cou-
45 

pled with submarine deliveries, would cause us to have a significant drop-off, which would then translate into a ramp backup as 

we started work on the Ford class and started to build into the two 

submarines per year. 

We started as a management team to start thinking about all of 

the different ways you can deal with that kind of an issue, and we 

started it 3 to 4 years in advance. We worked our way through not 

only the things that we can do, which adjusting our overtime rates, 

adjusting our leased employees as opposed to our hiring rates, trying to manage within an employment ban, so that we didn’t hire 

people and then just turn right around and lay them off. 

We also engaged with the Navy Carrier Program Office on this 

issue. And the Navy Carrier Program Officer over the course of a 

couple of years was able to accelerate some work into the valley. 

You know, they brought the next refueling, they brought it into the 

shipyard a few months early. They were able to work with us on 

how we scheduled our PSAs [Post Shakedown Availability] for the 

ships we were going to deliver. And so the Navy couldn’t solve the 

problem alone. We had to do a lot of work on our part to make sure 

that we managed it far enough out from a hiring and workforce 

perspective. But the Navy did lean forward in that particular case, 

I thought, as constructively as I have ever seen. When we got to 

2009, when we were expecting a couple of thousand people, 5 years 

ago, we were expecting a couple of thousand people might be in 

jeopardy. In 2009, we didn’t lay anybody off. 

Now, I can say that, you know, in the carrier business, you have 

got a horizon that is long enough there where you can see far 

enough in advance. In some of our other programs, the horizon is 

not quite that far, and you have to be more reactive and more responsive, which makes the challenge a little bit harder you know. 

And on top of that, you have things that move around on you, like 

attrition rates and things like that, that you might have an estimate that changes which causes you to make some adjustments. 

Where we have been able to forecast far enough in advance for 

people to actually take action that would matter, the Navy seems 

to have been able to constructively engage in that to the best of 

their ability. 

On the other hand, I think the Navy is—you know, you are asking my opinion—I think the Navy is constrained by their resources 

sometimes, and they understand that we take two LCCRs out of 

the program, that is going to have an effect on the size of the base. 

It is. And so I think that that has been kind of the, that is the challenge that we are up against now. 

Mr. TAYLOR. Given that it is a pretty safe bet that the centerpiece of the Navy surface fleet for the foreseeable future will be the 

DDG–51, do you think the Navy is doing a good enough job, or 

those people in the Navy that you deal with, of trying to gain whatever economies you can from things that you know you are going 

to be buying in the near and distant future? 

Mr. PETTERS. I think the first problem with the challenge of the 

restarting of the 51 line is that, whenever you restart a production 

line, really smart people sit down and try to figure out what is the 

cost? What is the extra cost going to be associated with gapping the 

line? What is the extra schedule going to be required? 
46 

In my experience, we have always underestimated the cost impact and we have underestimated the schedule impact. And I think 

that, as we are working our way through the 51 restart, we are 

dealing with that, those issues right now, trying to make sure we 

have the best estimates of what the cost of restart is going to be, 

what the schedule should be. And I think the Navy has been constructively working with us to understand that. 

But we are not—we are right at the front end of that to step off 

and get the program rolling. And my biggest concern is not really 

the engagement we have had on the restart of the program, but it 

is on the volume following. If the volume of that program is going 

to be two-one, two-one, two-one, when the volume that sustained 

us in the previous years was three ships per year, that is half the 

volume that we had before. And I think that is—to me, that is the 

fundamental issue in the program; it is not really the challenge of 

the restart. I think we have good people doing good work to try to 

figure out the restart, but I think the volume is a challenge. 

Mr. TAYLOR. Well, toward that end, you know our dilemma; a shipbuilding budget that has basically been frozen about $15 billion, huge challenges coming down the line with the Ohio replace- ment, a $7 billion aircraft carrier. To what extent have either of 

your corporations approached the Navy and said, and I will use the 

F–18 program as an example, where this vendor came to Congress 

and said, you give us a long-term contract, we will reduce the price 

of the platform? To what extent have either of your corporations 

approached the Navy and said, for this kind of stability, I will offer 

you this kind of price? I am just curious. 

Mr. HEEBNER. I could make an immediate comment on it. I 

would like to make two points on it, though. 

The first is that I spent 33 years in uniform; 11 of my last 14 

years were in the Pentagon. And I wish I had been as good as Secretary Stackley at opening up my communications with my suppliers. I think he has done an exceptional job understanding the 

various elements of making decisions about national security and 

building ships, at creating an environment where his staff and the 

industry can communicate openly and effectively. So my compliments to the Navy, and specifically to Secretary Stackley. 

A second point is an example. The MLP program that Secretary 

Stackley referred to here today was going to be terminated with 

the MPFF program. But when we discussed that with the Navy, we 

went back to the drawing boards at NASSCO, and we laid out a 

program where we could get 70 to 80 percent of the capabilities in 

the ship that was required for 50 percent of the cost or thereabouts. And we worked hard on doing that and with the Navy, to 

make sure that it would work for them. 

Now, as it turns out, after reviewing their requirements and our 

capabilities to deliver a ship at a lower rate, we came to a mutual 

agreement that it was in fact possible. So it is clear to me that the 

environment is healthy, and we can have discussions like this between industry and the Navy. 

Mr. TAYLOR. I am curious, I will mention to both of you that, 

since the Stackley plan, and I think credit is due to him on bringing some stability to the LCS program, since the Stackley plan has 

become the congressional plan, I have been approached by at least 
47 

one yacht maker and several people who build offshore supply vessels as to their interest in bidding on the second five, the second 

block of five. I was curious if either of your corporations are looking 

into bidding on the second block of five LCSs. 

Mr. PETTERS. We are interested. We are looking at both programs, and we will be doing evaluations about our fit on the program. 

Mr. TAYLOR. Mr. Heebner. 

Mr. HEEBNER. And a similar comment. We have looked at both 

ships and the capabilities within our yards—and I say that with an 

S, because I have to look at it that way—that we do have the capabilities to build either of those ships, and we will look carefully at 

what the requirements are and how we can most effectively compete in that competition. 

Mr. TAYLOR. Mr. Petters, my last question goes to your remark, 

and actually both of you touched on a very high percentage of your 

subcontractors are sole-source contractors to you. Given the economic environment in America today, given the record low prices 

that I am seeing for public works projects across the country, the 

record number of bidders on construction projects, publicly funded 

construction projects around the country, my instinct tells me that 

there should be the same thing throughout America’s industrial 

base. And my instinct tells me that, you know, with the price of 

metals being approximately one half of where they were 2 years 

ago, that there ought to be some bargains out there. 

Now, Mr. Petters in fairness to you, in your recent visit to Mississippi, you pointed out to me the amount of time it takes to get 

a contractor approved by the Navy. Keeping that in mind, do you 

feel like that the Navy is resourcing enough people and the right 

people toward bringing as many subcontractors as possible on line 

to broaden both of your industrial bases? 

And I am just curious, let’s take a valve for an example. A valve 

manufacturer comes to both of you. I want a bid. I think we have 

the technology. We have the people to make this valve. They are 

not on the approved vendors list. What is the process that you go 

through to get them approved, and approximately how long does it 

take? Or if you have a better example, I would like to hear it. 

Mr. PETTERS. I will walk you through a hypothetical if you would 

like. It will help illustrate it. And I can take the question in detail 

for the record if you would like. 

But hypothetically, if you were a manufacturer of a product that 

you sold commercially in a retail environment and you sold it at 

a hardware store, at a pump to the offshore rigs or things like that, 

and you saw that there was a requirement to sell that valve to— 

the Navy had a requirement for a 2-inch valve that had this kind 

of flow rate and that matched the valve you were using, there 

would be, depending on the ship, depending on the design, the 

criticality of the systems, there would be a set of requirements that 

you would be asked to check off as the supplier, things like, have 

you shock qualified the valve? Does it require an acoustic qualification? Are the materials U.S. materials? Do we have specialty materials involved? Do you have a cost accounting system in your company that can separate the cost of the government work from the 

cost of your nongovernment work? Would you have, be able to sup-
48 

port a quality organization that would be there to support the 

Navy’s or the government’s requirements for validation of the pedigree of the valve and the organization of that? 

And I think that the challenge you have is that, because I 

thought about it again after our conversation last week, I think the 

challenge you have is that you have a lot of folks who would like 

to do this work, but when they step back and look at the history 

of the work, they don’t see enough predictability or sustainability 

there to warrant the kind of investment to go do those kind of 

things to get qualified to go into it. That is not a worker issue. 

That is a business issue. 

And so my sense of this, as we go out into the marketplace, is 

I know of companies who start up. And one of the requirements 

when they start up is that they will not do government work because they don’t want to have to deal with separating their government cost collection system from their other cost collection systems, 

and they don’t want to deal with the tracking of special pedigree 

of materials and go through the shock qualifications and the acoustic qualifications you have to go through. I think that is the fundamental issue. 

And so all of those things become barriers to entry, if you will, 

for the people that are in the business. And so, for me, that—when 

we talk about them being sole-source, those barriers to entry are 

really the sole-source piece of it. And for me, the issue then is they 

are sole-source, now I have to manage them from a consistency of 

demand issue. And we have demonstrated over the past 10 years 

that, even when we have gone sole-source in a large way like we 

have on the submarine program, we have consistent demand. We 

have predictable demand. We are able to manage the cost. 

Mr. TAYLOR. Mr. Heebner. 

Mr. HEEBNER. Mr. Chairman, I would like to answer that question just slightly differently. 

At these hearings, Mr. Petters and I get to speak on behalf of the 

shipyards. I think somebody needs to speak on behalf of the suppliers as well. 

And I would just make the point that, by definition, single-source 

suppliers does not mean inefficient or overpriced. I think the fact 

is that people are working hard out there to keep their prices 

down, and we have within our procurement systems checks and 

balances to make sure that what we are paying for products are 

in fact fair return for a fair investment. So I don’t by definition 

start out with the assumption that they are not efficient. 

I certainly subscribe to what Mr. Petters said in the sense that 

qualifying suppliers is an arduous process that is established by 

rules that must be followed. But I give a lot of credit to our suppliers today who have stuck with us in this process of reduced production, and I think we should recognize them and pat them on the 

back for what they are doing to keep supplying important parts for 

us. 

Mr. TAYLOR. Absolute last question. In today’s environment and 

given an excellent conversation I had on the streets of Biloxi this 

weekend with a shipyard worker, I would hope that both of your 

firms are making every effort to hire Americans first. And what is 
49 

the policy of your two particularly when it comes to defense-related 

work? What is the policy of your two companies? 

Mr. PETTERS. In our nuclear work, we have an American citizenship requirement. In our nonnuclear work, the requirement is not 

quite as rigid as that. And I will get to you for the record exactly 

what our rules are if you would like. 

Mr. TAYLOR. I would like that, sir. 

[The information referred to was not available at the time of 

printing.] 

Mr. PETTERS. But we are looking for American citizens. 

Mr. TAYLOR. Mr. Heebner. 

Mr. HEEBNER. And I think it best that I take that for the record 

because I don’t have a complete answer for you. 

[The information referred to can be found in the Appendix on 

page 109.] 

Mr. TAYLOR. That is fair. But if you would, a couple of weeks response. Thank you. 

Again, the Navy is hiring 5,000 acquisition specialists. When people at some of the shipyards are telling me that the price of their 

subcontracts is increasing by 30 percent in a time when government contracts that normally get 5 bidders are getting 30 and 

when things are regularly coming in at 10, 20, 30 percent below 

the estimated cost for other government contracts, there is a part 

of me that says, why aren’t we experiencing the same savings? And 

so if our 5,000 new Navy acquisition specialists can help you to do 

that and if you need the legal authority to make that happen, I 

would hope that both of you gentlemen would be making some suggestions to this committee. 

Again, I thank you very, very much for appearing before this 

committee. I apologize for the late delay and for keeping you so 

long. 

Are there any further questions. 

The committee stands adjourned. 

[Whereupon, at 6:06 p.m., the subcommittee was adjourned.] 

A P P E N D I X 

MARCH 3, 2010 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

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RESPONSE TO QUESTION SUBMITTED BY MR. TAYLOR 

Mr. HEEBNER. The vast majority of employees at the three General Dynamics 

shipyards have been hired from within their local communities. 

No H2B visa holders (temporary foreign production workers) are employed at the 

General Dynamics shipyards. 

All employees at two of our shipyards, Bath Iron Works and Electric Boat, are 

US citizens. 

Due to its’ location and unique regional demographics, GD–NASSCO’s workforce 

consists primarily of US citizens but also includes a number of legal permanent residents (green card holders)—eligible to pursue naturalization (US citizenship), and 

all of whom have gone through company background checks. [See page 49.] 

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