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i 

57–219 2010

[H.A.S.C. No. 111–61] 

HEARING 

ON

NATIONAL DEFENSE AUTHORIZATION ACT 

FOR FISCAL YEAR 2010 

AND

OVERSIGHT OF PREVIOUSLY AUTHORIZED 

PROGRAMS 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

SEAPOWER AND EXPEDITIONARY FORCES 

SUBCOMMITTEE HEARING 

ON

BUDGET REQUEST FOR DEPARTMENT 

OF THE NAVY SHIPBUILDING 

ACQUISITION PROGRAMS 

HEARING HELD 

MAY 15, 2009 
(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 

2009 

Page 

HEARING: 

Friday, May 15, 2009, Fiscal Year 2010 National Defense Authorization Act— 

Budget Request for Department of the Navy Shipbuilding Acquisition Programs ..................................................................................................................... 1 

APPENDIX: 

Friday, May 15, 2009 ............................................................................................... 33 

FRIDAY, MAY 15, 2009 

FISCAL YEAR 2010 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 

McCullough, Vice Adm. Barry J., USN, Deputy Chief of Naval Operations 

for Integration of Capabilities and Resources, U.S. Navy ................................ 7 

Stackley, Hon. Sean J., Assistant Secretary of the Navy (Research, Development and Acquisition), U.S. Navy ...................................................................... 5 

APPENDIX 

PREPARED STATEMENTS: 

Akin, Hon. W. Todd .......................................................................................... 39 

Stackley, Hon. Sean J., joint with Vice Adm. Barry J. McCullough ............ 41 

Taylor, Hon. Gene ............................................................................................. 37 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

[There were no Questions submitted during the hearing.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

FISCAL YEAR 2010 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, Friday, May 15, 2009. 

The subcommittee met, pursuant to call, at 10:02 a.m., in room 

2212, Rayburn House Office Building, 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 subcommittee will come to order. Good morning 

and welcome. 

Today, we need concession to receive testimony on the fiscal year 

2010 budget request for shipbuilding programs. Appearing before 

us today are the chief acquisition officer of the Navy, the Honorable 

Sean Stackley; the chief requirements officer of the Navy, Vice Admiral Barry McCullough. 

Admiral, you are well-known to this committee. Welcome back. 

Secretary Stackley, while many know you and have worked with 

you in the past, we believe this is the first time that you will testify 

before this committee, and welcome. 

The good news is that we are not going to be interrupted by 

votes because the House stands in recess. It is my hope that this 

will allow us to have a frank and detailed discussion on where we 

are and where we need to go with our shipbuilding programs. 

I thank the members in attendance for staying in town to participate in this very important hearing. 

In previous years at this hearing, I have commented that the 

budget request and the accompanying 30-year shipbuilding plans 

were unachievable. In fact, I have stated that the long-range plan 

was pure fantasy. 

It nows appears that the Navy has learned how to deflect criticism of the shipbuilding plan. They don’t submit one. Although required by title 10 of the United States Code, all plans for future 

years’ ship procurement are being withheld from the Congress. 

This obviously makes it very difficult for the Members of Congress 

to fulfill the Article I obligations to provide and maintain a Navy. 

I realize the two witnesses sitting before this committee today 

did not make that decision, and I will not continue to dwell on the 

subject. But I state for the public record that the failure of the Department to describe the future shipbuilding plan will not prevent 
2 

this subcommittee from doing due diligence required in recommending to the full committee and to the full House a shipbuilding 

plan which will restore the Navy to an acceptable number of ships 

which will preserve domestic industrial capacity of the construction 

of warships. 

I will say that again. If the Navy chooses not to submit a shipbuilding plan to Congress, Congress will provide one for the Navy. 

With limited time, the subcommittee has to review this year’s 

budget request. It appears to be somewhat better than previous 

years. The Department is requesting authorization for the procurement of eight new ships. And it is requesting advanced procurement funds for the procurement of at least seven more next year, 

including two submarines. 

If you take into account that the Littoral Combat Ship program 

(LCS) and the joint high speed vessel do not require advanced procurement, then the potential exists for a 12-ship request next year. 

And the following concerns, which I trust that our witnesses will 

address today—none of this should come as a surprise, particularly 

to our two witnesses, since I have expressed these concerns either 

publicly or directly to them. 

I am concerned about the Electromagnetic Aircraft Launch System (EMALS) program of the next aircraft carrier. Mr. Secretary 

well knows I recently visited the production facility, and I was favorably impressed. However, failure of this one system to deliver 

on its promises means that we are building the world’s largest helicopter carrier. I would like the Secretary to address what additional oversight and continued out oversight envisions for the program. 

I also remain very concerned about the LCS program. I am not 

happy with either the cost or scheduled performance. 

In January, I spoke with the captain of the first ship, and to the 

credit of the shipbuilder, he is pleased with the ship and I am 

happy that he is pleased with the ship. But the fact remains that 

the ship was delivered 18 months late and two-and-a-half times 

over the cost that the contractor promised. No one, neither the 

Navy nor the contractor, should be patting themselves on the back 

for the first ship or for the second ship, which has still not been 

delivered. 

I am not convinced that the costs are being properly monitored 

by the Navy. These ships are too expensive. We need to drive the 

costs down and/or we need to see who can build these ships for a 

fair price. 

I think it is important to note that everything about this program is different from other shipbuilding programs. The Navy does 

not contract with the shipyards building the ship. They have agreements with two prime contractors. The ship’s propulsion systems; 

combat systems; Command, Control, Communications, Computers, 

and Intelligence (C4I) systems were not specified by the Navy; they 

were chosen by the prime contractors to meet performance specifications. Because of this, there is very little common equipment 

between the two types of ships. 

Lack of commonality costs money now, it will increase training 

costs for the sailor and it will increase overall life cycle costs. I re-
3 

quest that the Admiral and the Secretary address this issue for 

lacking commonality today. 

Returning to the destroyer program, it is no secret that this committee last year supported the Chief of Naval Operations’ (CNO’s) 

desire to return to construction of the Arleigh Burke-class guided 

missile destroyer (DDG–51). Not everyone is happy with the final 

decision. We seem to now have a final decision for the Secretary 

of Defense on the way forward, an agreement between the two 

shipyards, which will level the industrial load. I request the Secretary explain the agreements and I request the Admiral give us 

some sense of how he will use these two very different types of destroyers. 

I would also like an explanation this morning of some fairly significant funding requests in the research and development accounts. The Secretary of Defense has testified that future procurement decisions will be based on the results of the Quadrennial Defense Review, and it has stated that as the reason to not request 

funds to alleviate shortfalls and validate requirement gaps, such as 

the current Strike Fighter shortfall of the F/A–18s. 

If the Department is requesting one-half of a billion dollars for 

the development efforts for replacement of a higher-class submarine before the QDR validates the requirement, make no mistake, this subcommittee has been the strongest proponent over the 

last three years in submarine construction and the preservation of 

our Nation’s submarine industrial base. The subcommittee has 

been supportive of pulling forward the design of the next-generation submarine to ensure we do not lose our skilled-edge designer 

workforce. Yet this request goes far beyond that goal. 

I ask the witnesses to please explain why the subcommittee 

should recommend the full request for a nonvalidated requirement 

when there are very real shortfalls and other validated requirements today. 

These are a few of our concerns. I am sure the other members 

will express theirs. 

Again, I welcome the Secretary. I welcome the Admiral for being 

with us. 

And I now turn to my friend from Missouri, the ranking member, 

Mr. Akin. 

[The prepared statement of Mr. Taylor can be found in the Appendix on page 37.] 

STATEMENT OF HON. W. TODD AKIN, A REPRESENTATIVE 

FROM MISSOURI, RANKING MEMBER, SEAPOWER AND EXPEDITIONARY FORCES SUBCOMMITTEE 

Mr. AKIN. Thank you, Mr. Chairman. And good morning to our 

witnesses. I had the opportunity to meet with Admiral McCullough 

for the first time yesterday. I had another good discussion yesterday with Secretary Stackley, also in our office. 

I would like to thank you again for taking time to answer my 

questions and share your thoughts regarding some of the shipbuilding programs proposed in this year’s budget. 

I was also interested to hear the Chief of Naval Operations state 

yesterday at the full committee hearing that the Navy still intends 

to maintain the 313 ships. It had begun to sound as if the Sec-
4 

retary of Defense in his Foreign Affairs article and the Navy in its 

budget rollout were beginning to back away from that number. It 

was not clear to me how the Navy planned to implement the joint 

maritime strategy with its emphasis on forward presence if the 

Navy intended to accept fewer ships. A ship can only be in one 

place at a one time, and today’s fleet is the smallest it has been 

for nearly 100 years. 

Despite the good news, however, that the Navy is not backing 

away from the goal of increasing the size of the fleet, the CNO also 

acknowledged in his written statement for fiscal year 2010 budget 

aligns with the path of our maritime strategy is that, ‘‘However, we 

are progressing at an adjusted pace.’’ That sounds like code to me 

for, this budget request doesn’t invalidate our maritime strategy, 

but it will allow us to meet our goals. 

I see evidence of this in the budget request for shipbuilding. For 

example, the Navy will commission and decommission the same 

number of ships this year, which means no net increase to the 

number of ships. To be fair, it can’t be blamed on the budget request, for the simple math, 300 ships with an average 30-year life, 

means that we need to commission and decommission about 10 

ships a year. And this budget request, only eight ships, presents no 

future plan to give Congress any reason to believe the Navy will 

ever meet its force structure requirements. 

Our colleague, Representative Forbes, asked Secretary Gates and 

Admiral Mullen about the lack of a 30-year shipbuilding plan at a 

hearing earlier this week. Admiral Mullen stated it will come in 

the 2011 budget. 

I would say we can rely reasonably well on the 30-year shipbuilding plan that has been submitted before, but I count at least 

nine ways this budget diverges from the 2009 plan: 

One, moving the funding of carriers to 5-year centers drops the 

force to 10 carriers by 2039; 

Two, building three DDG–1000 destroyers instead of seven; 

Three, building one DDG–51 destroyer instead of zero; 

Not building the next-generation cruiser; 

Not building a large-deck amphib for the maritime prepositioning 

force in 10; 

Not building a mobile landing platform ship for the maritime 

prepositioning force in 2010; and then 

Seven, not shutting down the amphibious transport dock (LPD– 

17) production line at nine ships; 

But funding the final increment for the tenth ship; 

Nine, building two T–AKE ships for 10, instead of zero; and 

Investing half a billion dollars in research and development 

(R&D) for the replacement of the Ohio-class submarine. 

So, in fact, we cannot rely upon the last shipbuilding plan and 

evidently we don’t receive a new one. We have the same problems 

on the aviation front, but I will save those comments for next 

week’s aviation hearing. 

Therefore, we can only rely on the testimony you provide today 

to shed light on the analysis that went into the decisions that were 

made within the shipbuilding account. 

The investments that the Navy is making in ship construction 

and R&D were evidently a higher priority than addressing the 
5 

Strike Fighter gap which until recently the Navy said was a serious concern. This may be true, but to do our jobs, it becomes critically important that this committee understand your reasoning. 

Thank you again, Mr. Chairman. 

To our witnesses, I appreciate your being with us today and truly 

look forward to our discussion. 

[The prepared statement of Mr. Akin can be found in the Appendix on page 39.] 

Mr. TAYLOR. Thank you, Mr. Akin. 

The Chair now recognizes the Secretary, Mr. Stackley. 

STATEMENT OF THE HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY (RESEARCH, DEVELOPMENT AND ACQUISITION), U.S. NAVY 

Secretary STACKLEY. Thank you, sir. 

Mr. Chairman, Representative Akin, distinguished members of 

the subcommittee, thank you for the opportunity to appear before 

you today to address Navy shipbuilding. If it is acceptable to the 

committee, I would propose to keep my opening remarks brief and 

submit a formal statement for the record. 

Mr. TAYLOR. Without objection, Mr. Stackley. 

I also want to inform that although it is the norm for the full 

committee to limit witnesses for five minutes, please take whatever 

time you feel is necessary. 

Secretary STACKLEY. Thank you, sir. 

Mr. TAYLOR. Thank you. 

Secretary STACKLEY. Today’s Navy is a fleet of 283 battle force 

ships, as many as half of which may be underway on any given 

day, supporting combat operations, building global partnerships, 

providing international security, performing humanitarian assistance and disaster response, prosecuting piracy, testing future capabilities and training for future operations. 

Beyond numbers, the quality of the force—our ships, aircraft, 

weapons systems and, most importantly, our sailors and marines— 

is unmatched at sea. So it would be easy to take comfort in knowing that for the next decade, and certainly beyond, the Navy and 

Marine Corps stand ready to respond to major conflict with the 

most capable naval warfare systems in the world today. The events 

of the century, however, point to our future and must increasingly 

contend with irregular and asymmetric threats. And two, we must 

pace the capabilities of rogue states and emerging naval powers 

that would intend to challenge our influence in the regional security of our friends and allies. 

In the face of these growing challenges, the Chief of Naval Operations has outlined requirements for the future force, the 313-ship 

Navy. In fact, CNO has emphasized, the 313 ships represents the 

floor if we are to meet the full range of missions confronting the 

Navy in the next decade and beyond. 

The fiscal year 2010 budget request funds eight ships, a modest 

but important step forward towards meeting the CNO’s requirements. Again, however, it is more than numbers. 

The Navy is moving to close gaps in our capabilities. To this end, 

we will restart the DDG–51 construction in 2010 to provide increased air and missile defense to meet the demand from combat-
6 

ant commanders. The success of the Aegis system against ballistic 

missiles demonstrates that at-sea testing and, two, through realworld performance against an earthbound satellite provides a solid 

foundation for this mission. 

At the other end of the warfare spectrum, we are increasing production of the Littoral Combat Ship with our request to deliver this 

needed capability to the fleet. We know there are many challenges 

ahead as we ramp up construction, tackle affordability and learn 

how to best operate and support this new class. But we are confident that the utility and flexibility of this ship will prove indispensable in future naval operations. 

This year’s request also includes the twelfth Virginia-class fast 

attack submarine and two T–AKE dry cargo and ammunition 

ships. Both of these are strongly performing programs. The eight 

ships in our request is one of two joint high speed vessels that the 

Navy is jointly procuring with the Army. 

The budget request also funds the balance of LPD–26 and DDG– 

1002 and includes advanced procurement for seven future ships. 

The underlying challenge, indeed the pressing requirement before us today, is affordability. This is not a new challenge, but it 

has taken on new dimensions. The fact is that ship costs are rising 

faster than our top line. Per-ship costs have risen due to such factors as low-rate production, reduced competition, increased system 

complexity, build rate, volatility, instability in ship class size and 

challenges with introducing new technologies into new platforms. 

Perhaps most significantly, over the past decade, we have introduced 11 new class designs, 11 lead ships, each a highly complex 

prototype bringing its own unique challenges. 

And then, compounding these issues, particularly in the case of 

lead ships, where there is greater risk and uncertainty, we have 

fallen short in our ship cost estimates, or in certain cases, in our 

willingness and ability to fully fund to the estimate. 

All of these factors lead to inefficient production and cost growth. 

We have learned, or in certain cases relearned, the lessons of this 

experience. 

Accordingly, the Navy understands and agrees with the objectives of the House bill on acquisition reform, and we strive to meet 

its spirit and intent in our ongoing initiatives to raise the standards, to improve the processes, to instill necessary discipline and 

to strengthen the professional core that manages our major defense 

acquisition programs. And to this end, the 2010 Navy shipbuilding 

plan strives to provide stability, which would underpin improved 

performance across government and industry. 

The budget request builds on ship programs which are currently 

in serial production. There is renewed emphasis on minimizing 

change to requirements, minimizing change to design and improving our estimates for follow-up ships. This leads to reducing risk 

to the shipyard’s ability to execute follow-on vessels and enabling 

the Navy to expand the use of fixed-price-type contracts. 

We are committed to ensuring that new ship designs are mature 

enough to commence production. We are working to fully leverage 

competition at every level of our shipbuilding programs, recognizing at the prime there are often limited competitions, but we are 

drawing down to the first and second tier vendors as well. 
7 

Within our shipbuilding contracts, we are implementing affordability programs, reuse of existing design and incentives for selected industrial capital investments and improvement projects. As 

well, open architecture, both for hardware and software, promises 

to be a powerful cost-avoidance tool as well as a process for improving our warfighting capability. 

The challenge before us is great, but so is the need. And in meeting the need, this subcommittee has been steadfast and unwavering in its support for a strong Navy and Marine Corps. We thank 

you for that. 

Again, I thank you for your time today and look forward to your 

questions. 

[The joint prepared statement of Secretary Stackley and Admiral 

McCullough can be found in the Appendix on page 41.] 

Mr. TAYLOR. Thank you, Mr. Secretary. 

STATEMENT OF VICE ADM. BARRY J. MCCULLOUGH, USN, DEPUTY CHIEF OF NAVAL OPERATIONS FOR INTEGRATION OF 

CAPABILITIES AND RESOURCES, U.S. NAVY 

Mr. TAYLOR. Admiral McCullough. 

Admiral MCCULLOUGH. Chairman Taylor, Representative Akin 

and distinguished members of the subcommittee, I am honored to 

appear before you this morning with Secretary Stackley to discuss 

Navy shipbuilding. I request our written statement be made a part 

of the record. 

Mr. TAYLOR. Without objection. 

Admiral MCCULLOUGH. Mr. Chairman, before I begin, I would 

like to mention that in addition to our role in seapower, the Navy 

currently has more than 13,000 Navy personnel serving on the 

ground in Iraq and Afghanistan. They serve in traditional roles 

with the Marine Corps, but also in support of the land service combat support and combat service support in support of joint commands in the Army. We provide these sailors, in addition to fulfilling our commitments to the country and our allies to provide 

persistent forward presence, incredible combat power in support of 

the maritime strategy. 

Today, we have a balanced fleet capable of meeting most combating commander demands, from persistent presence to counter 

piracy to ballistic missile defense. Right now, we have 40,000 sailors deployed aboard 124 ships and submarines around the world as 

part of our ever-deployed force. 

However, as we look ahead, in the balance of capability and capacity, we are seeing emerging warfighting requirements in open 

ocean antisubmarine warfare, antiship cruise missile and theater 

ballistic missile defense. Gaps in these warfare areas pose increased risk to our forces; state and nonstate actors who in the 

past have only posed limited threats in the littoral are expanding 

their reach beyond their shores and with improved warfighting capabilities. 

A number of countries who historically have only possessed regional military capabilities are investing in their navies to extend 

their reach and influence as they compete for global markets. Our 

Navy needs to outpace other navies’ capabilities as they extend 

their reach. 
8 

The Navy must be able to assure access in undeveloped theaters. 

We have routinely had access to forward staging bases in the past. 

This may not always be the case as we go forward. 

In order to align our surface combatant investment strategy to 

best meet evolving warfighting gaps, our fiscal year 2010 budget 

request truncates the Zumwalt-class guided missile destroyer 

(DDG–1000) program at three ships and restarts the DDG–51 production line. This plan best aligns our service combatant investment strategy to meet Navy and combatant commander 

warfighting needs. 

The Navy must have the right capacity to meet combatant commander warfighting requirements and remain a global deterrent. 

Combatant commanders continue to request more ships and increased presence to expand cooperation with new partners in Africa, the Black Sea, the Baltic region and the Indian Ocean. This is 

in addition to the presence required to maintain our relationships 

with current allies and partners. 

The Navy can always be persistently present in areas of our 

choosing. We lack the capacity to be persistently present globally. 

This creates a presence deficit, if you will, where we are unable to 

meet combatant commander demands. Africa Command 

(AFRICOM) capacity commands will not mitigate the growing European Command (EUCOM) requirement and Southern Command 

(SOUTHCOM) has consistently required more presence that goes 

largely unfilled. 

The Navy remains committed to procuring 55 Littoral Combat 

Ships. The LCS program will deliver capabilities to close validated 

warfighting gaps. LCS’s inherent speed, agility, shallow draft, payload capacity and reconfigurable mission spaces provides an ideal 

platform for conducting additional missions in support of the maritime strategy to include irregular warfare maritime security and 

antipiracy operations. 

The 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 with the currently, presently described time lines. 

Our carrier force provides the Nation the unique ability to overcome political and geographic barriers to access for all missions 

and to project power ashore without the need for host-nation ports 

and airfields. 

The Ohio-class ballistic submarine, originally designed for a 30- 

year service life, will start retiring in 2027 after over 40 years of 

service life. The Navy commenced an analysis of alternatives in fiscal year 2008 for a replacement Ohio-class ballistic submarine 

(SSBN). Early research and development will set the stage for the 

first ship to begin construction in fiscal year 2019. This time line 

is consistent with the development of the Ohio class. 

The Virginia-class submarine is a multimission platform that fulfills full spectrum requirements. Virginia was designed to dominate 

the undersea domain in the littorals, as well as in the open ocean, 

in today’s challenging security environment; and it is replacing our 

aging 688 class submarines. Now, in its tenth year of construction, 

the Virginia program is demonstrating that this critical capability 

can be delivered affordably and on time. 
9 

In this budget request, we have delayed the start of the followon cruiser program known as Future Class Cruiser (CGX). This requirement has been validated by the Joint Requirements Oversight 

Council (JROC), and the JROC approved the initial capabilities 

document. However, this system is dependent on development of 

certain aspects of the ballistic missile defense system, total architecture, specifically sensors and sensor netting. Thus, the analysis 

of alternatives remains in Navy staffing until we better understand 

the required sensors for this platform and our ability to deliver 

that capability. 

The Commandant of the Marine Corps is determined that a minimum of 33 assault echelon ships is necessary to support Marine 

Corps lift requirements; specifically, he has requested a force of 11 

aviation capable ships, 11 LPD–17s and 11 LSDs. The Chief of 

Naval Operations supports the Commandant’s requirement; however, this requirement, as well as the CGX requirement, will be 

further reviewed by the Department during the Quadrennial Defense Review (QDR). 

The Navy must maintain its carrier submarine and amphibious 

forces. In addition, we need to increase our surface combatant capacity with additional destroyers in LCS to meet combatant commander needs today and for ballistic missile defense, theater security cooperation. And then steady state security posture of the future. 

I thank you for this opportunity to discuss the Navy shipbuilding 

program and your support of our Navy. I look forward to answering 

your questions and, again, thank you very much for your support 

to the Navy. 

[The joint prepared statement of Admiral McCullough and Secretary Stackley can be found in the Appendix on page 41.] 

Mr. TAYLOR. Admiral, thanks for your comments and, above all, 

thanks for your many years of service to our Nation. 

I am going to turn to Mr. Akin. 

Mr. AKIN. I didn’t have any specific—I guess I could run through 

a couple of different things here. 

The first one is the Arleigh Burke-class guided missile destroyer 

(DDG–51). Last year, the Navy was criticized for proposing to restart the DDG–51 line without having revalidated the requirement 

through the Joint Requirements Oversight Council (JROC). 

In your opinion, was that necessary? Have you done so? Or is it 

not really necessary? 

Admiral MCCULLOUGH. We took the DDG–51 brief through the 

Joint Requirements Oversight Council. There were specific questions about what drove the change. The change was driven by our 

evaluation of changing threats globally. 

This was conveyed to the JROC, specifically the development of 

antiship ballistic capability in the western Pacific; the proliferation 

of ballistic missiles globally; the improved capability in nonstate actors, specifically demonstrated by Hezbollah in the 2006 war with 

Israel when Hezbollah launched two C–8O2 coastal defense cruise 

missiles, one striking the Israeli ship Ahi-Hanit, and the other 

striking a merchant vessel. 
10 

So from an area air defense perspective and an antiballistic defense perspective, we saw a rapid increase in development of threat 

capability and the proliferation of this capability. 

Additionally, we have been monitoring submarine deployments of 

potential adversaries in the Pacific and have noted an increase in 

deployment numbers and times of that potential adversary out into 

areas east of Taiwan. These are not with previously noted noisytype submarines, but with increasingly quiet, advanced diesel electric submarines with antiship cruise missile capability. 

When we looked at the development of the threat and the fact 

that the development of that threat had moved to the left, we 

found it increasingly necessary to increase our capability and capacity in those areas. 

This goes hand in hand with the capability that we have developed in the DDG–51 class ship. There are those that would say 

that is older technology, and I would say that the capability we put 

in DDG–112 is substantially much better from a capability standpoint than what was originally put in the Arleigh Burke in the 

early 1990s. Arleigh Burke DDG–51’s first deployment was in 1991. 

When we look—— 

Mr. AKIN. Is that capability that you are talking about stronger 

in terms of the ballistic defense or also submarine, antisubmarine? 

Admiral MCCULLOUGH. Open ocean submarine warfare in the 

case of the Arleigh Burke destroyers is much better. The Arleigh 

Burke has a much more powerful, active sonar; and that was by design. The DDG–1000 has a lower-power sonar, but that is required 

in littoral operations, specifically in a reverberation environment. 

The DDG–1000 ship is an excellent ship for what we asked the 

designers to design and the shipbuilders to build, but it does not 

answer the threats we see today in antiballistic missile defense, 

cruise missile defense and open ocean antisubmarine warfare. 

That is why we made the change, sir. 

Mr. AKIN. One other question, then. My understanding is that the Navy intends to spend $1.6 billion 

to complete research and development (R&D) on DDG–1000, and 

that may have benefits for future platforms such as CVN–78, the 

Ford-class carrier, and help the industrial base. But since DDG– 

1000 provides a capability that is less valuable to the Navy in the 

future, can you tell me if the Navy has considered sacrificing some 

of that capability in order to save the money for R&D or procurement, or it could be applied elsewhere? 

Secretary STACKLEY. Sir, if I could take that question, let me 

break down the R&D elements of DDG–1000 into a couple of categories. 

First, you have an R&D stream that goes for the total platform 

that, regardless of the quantity that you build, if you are going to 

build one, we have to complete the design development for the 

class. 

There is a second R&D stream that goes to supporting completion of development of major systems, such as the dual band radar, 

the advanced gun system; and again, if you are going to field one 

DDG–1000, you are going to have to invest in those dollars. And 

then the dual band radar, as well, goes to the carrier program. So 

that stream would stay in place. 
11 

But there are significant opportunities to improve on the total 

dollars, particularly when we take a look at some of the test and 

evaluation (T&E) requirements. The T&E program for DDG–1000 

is extremely robust, and I am working with the program office 

right now. We are basically going line by line, tracing requirements—program requirement, platform requirements, system requirements—to test requirements and basically looking to be able 

to harvest some of those opportunities. Those aren’t in the near 

years. You don’t get heavy into T&E until the outyear. 

But we are attacking it, and I would be happy at the right time 

to return to the subcommittee here and give you greater insight 

into both the opportunities and the approach we are taking. 

Mr. AKIN. Thank you very much. 

I yield back, Mr. Chairman. 

Mr. TAYLOR. Thank you, Mr. Akin. 

Secretary Stackley—and again you are fairly new to the job; 

when we express our disappointment in the Navy’s failure to articulate a shipbuilding plan, you just happen to be the one to get 

the message today. 

Without the Navy articulating a plan, let me tell you what I 

think is the plan. 

Apparently, one of the centerpieces will be, as the Admiral mentioned, a very large purchase of LCSs. The LCS was—when the 

Navy came to Congress and said they wanted the ship, the centerpiece of it was, it was going to be an affordable warship. And the 

price grows from $220 to $500 or $600 or $700 billion per ship. 

To use an analogy that the Secretary of Defense did the other 

day on a smaller aircraft, when it starts getting in the league, 

same price range as a DDG–51, and it is about one-fifth of the capability, then something is wrong. 

I am going to ask you for the record, what is your target price 

for the follow-on vessels in the LCS program starting with the seventh and the eighth? 

Secretary STACKLEY. Yes, sir. 

Now the 2010 budget is requesting the fifth, sixth—— 

Mr. TAYLOR. I understand. Again, I realize this is going to continue to be a learning curve on the part of the manufacturer. 

So what is your target price since we have a goal of about 50 of 

these vessels? What is your target price for the seventh and 

eighth? 

Secretary STACKLEY. Sir, let me describe two pieces. One is budget and the other is target price. Because the target price would be 

our contract price with the contractors for delivering the ship, and 

then beyond that we have additional budget requirements associated with government—associated with integrated logistic support. 

Mr. TAYLOR. I understand the additional packages. 

Secretary STACKLEY. Yes, sir. 

So we have taken the $460 million cost cap and we have used 

that, I will call it, as a ‘‘forcing function’’ in terms of driving to that 

number because that is not where we are today. 

So the numbers that you quoted, the 700 number, that would be 

a total budget number for the first two ships. We have come down 

measurably, going from the first two ships to three and four, and 

we look to make about equal strides in ships five, six and seven 
12 

with the 2010. That means we have not hit 460 for total program, 

but we are targeting 460 or, as you describe it, a target price. 

Mr. TAYLOR. I was an early convert to Admiral Roughhead’s decision to end the DDG–1000 program, go back to the 51s. I am in 

total agreement. 

Since that is apparently going to be our warship of choice for the 

foreseeable future, what steps are you taking for a multiyear procurement contract, again, to get the best economies that the Nation 

can get on this warship? 

Secretary STACKLEY. Yes, sir. 

If I could combine this with your opening statement with regards 

to the agreement with industry, what we are doing as a part of 

that agreement is, we have made the decision that we are going 

to restart at one location, at Northrup Grumman Ingall’s operation. 

And by making that decision, we are coupling it with investments 

in terms of production planning and in terms of yard-wide improvements to facilitate not just restarting, not just building like they 

built the last DDG–51 off the line, but let us look forward, at ways 

to significantly improve the way we bring this ship together in the 

long term—get off to a good start—those two ships in the 2010 and, 

we project, 2011 budget request, if you will. 

And my target is to be able to move back into multiyear procurements in 2012 and out. That is a target; we have to work this 

through the 2011 process. We are going to have to be able to come 

back to you all to demonstrate that we are going to be able to 

achieve this significant savings. 

As well, we are going to have to put together an economic order 

quantity advanced procurement plan that would start with planning in 2011, as well, at the Bath Iron Works. They will get their 

first DDG–51, their equivalent of a restart, 2012, they would be 

competing with Northrup Grumman in a multiyear environment. 

That is my goal. 

Mr. TAYLOR. Thirdly, it has been my observation—and I will use 

the LCS program as the poster child program gone horribly wrong. 

For years, Mr. Bartlett, the previous chairman and ranking 

member, and I would get reports from captain or admiral, one after 

another, Everything is fine; it is all on time, it is on budget. And 

then within a week or two, the change to where the Democrats got 

control of Congress, another admiral comes into my office, and it 

is literally an ‘‘awe-shucks’’ moment, ‘‘We have cut the main reduction gear backwards, everything is wrong, things really spun out of 

control on the program.’’ 

Part of that problem I think was that the officer in charge of the 

program, the baton would be passed to use a better analogy, about 

once a year. And every one of those officers left and said, Everything is fine. 

We can’t afford mistakes like that anymore. As I spoke on the 

Electromagnetic Aircraft Launch System (EMALS) program, electromagnetic launch on the next carrier, if it fails—and I support 

your decision to go with it, but if it fails—and it is not a joke—we 

have taken what should have been a $7 billion aircraft carrier and 

we now have a $7 billion helicopter carrier. No one wants that to 

happen. 
13 

It is my intention to recommend to the committee, as a part of 

our markup, to tell the Navy in our markup that you should appoint an officer who is going to be in charge of that program from 

today through the development of the prototype. Then tell the 

Navy that after that prototype is developed and accepted by the 

Navy, a second officer will be in charge of the development of the 

prototype to delivery of the vessel by the United States Navy in approximately five to seven years. 

What would be your reaction to that? 

Secretary STACKLEY. Let me describe that the program manager 

who is currently responsible for EMALS is top-notch. He is one of 

our superstars. And at this critical stage in the program, I have 

separately determined that he needs to stay until we complete system development demonstration. 

And so we are on that path. So what you are proposing is what 

we are doing. 

Mr. TAYLOR. What about for the second half? 

Secretary STACKLEY. Likewise, sir. We are looking at timing. We 

want to be able to bring on the relief for the current program manager and give him more than two weeks turnover, actually start to 

lay the groundwork, because his focus is going to be on 

transitioning from the design development to the ship installation 

and integration. And it is a little bit longer than a normal rotation, 

if you will. 

We are going to have to work that hard. But we see the value 

and the importance and the criticality. 

Mr. TAYLOR. Again, I am glad to hear we are in agreement. 

I think it makes perfect sense to put it in the law. Since people 

come and go, we need to see to it that the law remains steady and 

that the program is—again, that it is done right. 

I want you to know that I do support your decision to go to the 

EMALS. We want to make sure we get it right. 

Having said that, the Chair recognizes the gentleman from—the 

Chair recognizes the gentleman from California, Mr. Hunter. 

Mr. HUNTER. Thank you, Mr. Chairman. 

Secretary Stackley, General Dynamics-NASCO in San Diego, according to the Navy’s view, is doing really well with their T–AKEs. 

The costs are going down, they are on schedule, and it is a pretty 

amazing job that they are doing. 

I know that funding for the last two planned ships in the dry 

cargo/ammunition ship (T–AKE) program, 13 and 14, are in this 

year’s budget, and there is $120 million in advanced procurement 

funding and some R&D funding also requested towards the MLP, 

which represents a critical capability to the Marine Corps, and it 

is also NASCO’s nearest-term ship they are going to be building 

after the T–AKEs. 

Secretary Gates announced last month that the procurement of 

the first mobile landing platform (MLP) ship was going to be deferred to 2011, as with the procurement of the eleventh amphibious 

transport dock (LPD–17) ship and the QDR, even though, from 

what understand from the Navy, they wanted the MLP funded in 

2010. 

So the question is, do you agree that we need to do what we can 

to make sure that there is not a production gap between the T– 
14 

AKE and the MLP, which there would be with only $120 million, 

from what I understand. That is not going to be enough to sustain 

the shipbuilder in between 2010 and when the MLP starts being 

produced; there is going to be a gap there. 

And to add on to that, too, with what is going on in the general 

economy, this is kind of just a broad question, I would think that 

the Navy and you especially, Mr. Secretary, would be more intent 

on letting the administration know what shipbuilding does for the 

local economies and where we are—it creates job, it helps out the 

economy in general. 

You hire American workers and make an American product and 

buy American steel; and I think that ties in with the entire state 

of the American economy. And if you lobby harder, maybe we 

might be able to get some of this stuff done. This creates jobs. 

Anyway, back to the MLP, please. 

Secretary STACKLEY. Yes, sir. Let me describe a couple of components there, first, T–AKE. 

The T–AKEs that are being requested in the 2010 budget, those 

were originally—in terms of the contract, there was a 2010 option, 

a 2011 option, and then in terms of the budget, what we see is an 

opportunity to improve cost on those contracts by joint buying, buying two ships in the same year. 

So there is an economic decision, if you will. We are looking at 

savings of $170 million, the way we have programmed in the T– 

AKEs, two ships in the 2010 budget request. So that helps stabilize 

the shipyard. That helps stabilize the vendor base. And it also 

meets our Phase 1 Maritime Prepositioning Force (Future) 

(MPF(F)) requirement. So that is the logic and justification for 

bringing two T–AKEs into 2010. 

The MLP program, on the other hand, was originally intended to 

have been a competed program. And in fact, when we went through 

the competition process, we found ourselves quickly in a sole 

source, so we were able to improve on the schedule, if you will, to 

get to a contract, and our marching down the R&D line and the 

design development for MLP with NASCO in that sole-source environment. But we did not see a contract award prior to the fourth 

quarter of 2010 in that schedule. 

Mr. HUNTER. What I am talking about is the R&D, the $120 million that is being put out there now to keep them going for all their 

design change, reducing risk, trying to make—for once they are actually doing it right, where they are trying to get risks down, get 

everything done early, get engineering done early on, get everything designed so that when they actually start making it, there 

are not a bunch of changes along the way and then everything skyrockets like the LCS. They are actually doing it the right way. 

What I am saying is, there is not enough money in there in that 

120 for them to sustain between the T–AKE and the MLP. There 

is a gap there that is going to end up costing them more down the 

line, costing the Navy more down the line, because they are going 

to have a gap in their shipbuilding. 

It is not an incredible amount of money that they will need. I am 

not sure what it is, but there is a gap there when it comes to what 

they are going to be getting between the T–AKE and the MLP. 

Secretary STACKLEY. Yes, sir, to try to tack on top of that: 
15 

$120 million of R&D that goes to the shipbuilder, primarily to 

the shipbuilder, for his design and development for MLP, it also includes advance procurement to lead the ship construction. We did 

not see a ship construction contract, though, based on the design 

development schedule before the fourth quarter of 2010. 

There is a potential gap right now, looking at the workload at 

NASCO. We never like seeing a production gap at our shipyards. 

But given the choices between T–AKE and MLP—timing, potential 

savings—we believe the right answer is, put in advanced procurement to try to take care of the up-front activities so they can move 

quickly into a construction contract if, as a result of the QDR, we 

request an MLP in 2011; and we will be staged to minimize any 

potential gap between the T–AKE and the MLP. 

Mr. HUNTER. Wasn’t the MLP already slated for 2010, though? 

The MLP was originally asked for for 2010 by the Navy. 

Secretary STACKLEY. In the 2009 budget request, when you look 

in the 2010 column, you would see an MLP. 

Mr. HUNTER. It was slated for then and it was pushed off to 

2011, so—okay, I understand what you are saying. 

I think you are making the wrong decision by leaving that gap 

there. If the Navy originally wanted it then, it is being pushed off 

and it is going to produce that gap. You could potentially see thousands of jobs lost, literally, and then you are also going to see production suffer in the future for the MLP based on that gap that exists between the T–AKE and the MLP. 

That is all I have, Mr. Chairman. I yield back. 

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

We now recognize the gentleman from Connecticut. Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. I want to focus a 

minute on the Ohio research and development request. 

Again, in your opening remarks, Mr. Stackley, there was a comment that ‘‘ship designs must be appreciably complete before the 

start of fabrication to avoid concurrency and rework,’’ which Mr. 

Hunter referred to in his comments, is that trying to get the design 

done and finished so you don’t have to change in midconstruction 

seems to be a new sort of mantra here. 

Given the fact that the Ohios are going to be coming off line, as 

the Admiral said, in 2027 and the construction is targeted for 2019, 

I mean, that is the point here, isn’t it, to get the R&D and design 

work started so that we won’t have that kind of difficulty? 

Secretary STACKLEY. Yes, sir. What is referred to as the seabased strategic deterrent, which is the Ohio-class replacement boat, 

if you will, we are targeting 2019 procurement; and the R&D receiving that procurement includes a request in 2010. 

That R&D targets a couple of things primarily. One is what is 

referred to as the common missile compartment. The U.S. and the 

U.K. are jointly developing a common missile compartment that 

will support both our requirements as well as the U.K.’s successor 

class, which will replace the Vanguard. This is rather unique that 

the U.K. is ahead of the United States in terms of its requirements 

because the successor class is due, basically initial operation—operational capability, in 2024. So they are three years ahead of us in 

terms of need. 
16 

We are going to develop this jointly. So, in fact, our R&D is a 

bit ahead of historical R&D streams. So approximately 387 million 

of our 495 request goes towards that joint development with the 

U.K., the balance of the request going to the front end of design 

and feasibility studies for a new reactor plant design for this new 

boat. 

Mr. COURTNEY. Just one question—the SSGNs are going to start 

coming off line probably pretty soon after the Ohio. And I guess the 

question—if we are going to invest in this early research and development, then we have got SSGN sort of right next in line in terms 

of coming off use. 

Should we maybe be focusing a little broader than just the SSBN 

in terms of R&D or—I don’t know if you have any comment on 

that. 

Admiral MCCULLOUGH. Sir, what I would say about that is, you 

know, we just completed the first deployment with Ohio; and initial 

indications are, that submarine did exceptionally well in performing its missions and what it was tasked to do. We are still trying to get our arms around what a follow-on strategy for SSGN and 

what the operational requirements would be. 

Now, that said, as we go forward with an Ohio replacement, we 

need to look at what else we could potentially use that submarine 

for and what it could be adapted to, to go into an SSGN replacement. But at the same time, we have to be very conscious of what 

the potential cost of that submarine will be. And if you just did the 

inflation from an Ohio, it would be a substantial piece of our shipbuilding budget if you just inflated the cost of the original Ohio 

boat into the 2015 time frame. 

So there will be a nuclear posture review, and I know there is 

a lot of discussion about that. But I can’t see any decrease in requirement for the sea-based part of the strategic triad. You might 

see some reduction in the number of tubes required, but I don’t see 

a reduction in that requirement. 

And so we have to look at both what we see coming out of the 

SSGNs as operational capability and how we want to go to backfill 

that capability in the future and to contain the cost on a replacement ballistic missile submarine, sir. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman. The Chair now 

recognizes the gentleman from Colorado, Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Mr. Secretary, one question about the—given the current situation the economy is in, it seems that commodity prices have 

dropped, labor prices have dropped. In terms of acquisition, how 

have we benefited from that in terms of reductions in cost? 

Secretary STACKLEY. Let me describe a couple of things. You said 

commodity and labor. In fact, we are not seeing a reduction in 

labor costs. And I will come back to that. 

Commodities—commodities have come down significantly when 

you look at where they were one to two years ago, versus where 

they are today. Now, commodities in terms of shipbuilding, as an 

example, represent a small percentage of the total cost of the ship. 

So whether you are talking steel, pipe, cable, you are in the less 

than five percent total cost for the ship, for the raw material. So 
17 

we are going after those benefits, but they aren’t appreciably 

changing the cost of the ships. 

On the labor side, it is a more complex equation. When we look 

at labor and labor rates, they are affected by several factors. One 

is the direct wage that you pay to the worker, and that direct wage 

goes up with the cost of living or labor union agreements that are 

contracts between the shipyards and the labor unions. Those have 

been going up at a steady, predictable rate, and so in fact what we 

have with the shipyards are what are called forward pricing rate 

agreements that account for that. 

The second major component associated with those rates is the 

overhead and indirects. Overhead is associated with the facilities’ 

costs that the shipyard is operating. So they have a cost that comes 

back in their pricing for such factors as appreciation or capital expenses that get spread out over the term of the equipment; and 

then you have the indirect costs which would include such things 

as insurance, health insurance, a number of those factors that 

again are not coming down. Those are going up. 

So when I look at the categories that you just described, commodities, we are going after it; it is not having the big bang because 

commodities don’t represent a large percentage of the cost. And 

then rates, we don’t have much influence—I am going to say, 

frankly, we don’t have influence on the direct wages that are going 

to the workers or some of the indirects. 

But what we do have the ability to go after are the overheads. 

So I have spent time with the CEOs of our shipyards, attacking 

that issue. Much of our overhead was sized for larger throughput 

than what we have got today, okay? Some of these facilities, going 

back to the buildup of the 1980s, some of them have been drawn 

down over time. So many of them have recapitalized. 

What we have to do is ensure that the shipyards that are building our ships are the right size for the production we have got 

going through them to bring that overhead down. It doesn’t happen 

quickly. So we have to work closely with those shipyards to be able 

to drive that overhead rate down. 

The piece you didn’t talk about, when you mentioned commodities and rates, was the rest of the material costs, in this case, for 

ships. And that is where you start to get into equipments, components, hardware. That is not coming down with the price of commodities because that, in fact, brings a lot of touch labor to it and 

it is typically highly skilled touch labor when you talk about 

whether it is gas turbine engine or whether it is a common equipment enclosure for electronics. In that case, what we have to look 

at is—commonality as an example, where we try to drive common 

equipments, yet the benefit of economic order quantities to get at 

that material cost. 

So we are tackling the equipments; commodities, we don’t have 

the bang for the buck that we—you might look to see based on 

what is happening with economic rates; and we are going after 

overheads. 

Mr. COFFMAN. It seems like what you mentioned earlier was a 

lack of competition. It seems like that is a factor in the fact that 

we haven’t been rightsizing in terms of capacity. 
18 

Secretary STACKLEY. There are certain cases where you don’t 

have competition. And so we have to work—we have to use other 

methods to attack some of the cost structure in the noncompetitive 

environment. But even in those cases, you go after the material underneath of the prime, if you will. 

So if you have a shipyard that is the only shipyard building that 

type of ship, you have to go after the whole cost structure, which 

includes everything that he buys and drive competition down 

throughout the program. Where we do have competition has proved 

to be extremely effective in motivating a focus on cost performance. 

Mr. COFFMAN. Mr. Chairman, I yield back the balance of my 

time. 

Mr. TAYLOR. The Chair thanks the gentleman. 

The Chair now recognizes the gentleman from New York, Captain Massa. 

Mr. MASSA. Thank you, Mr. Chair. And I have no questions at 

this time. 

Mr. TAYLOR. The Chair then recognizes Ms. Pingree. 

Ms. PINGREE. Thank you, Mr. Chair. 

Mr. TAYLOR. The gentlelady from Maine. 

Ms. PINGREE. Well, thank you very much. I appreciate both your 

service and your testimony this morning. And as you probably 

know, I am one of the newer members of this committee, just elected in November. But I represent the First Congressional District 

of Maine. So Bath Iron Works is in my district, and we are very 

proud of the work they do and their ability to work with you. 

Honestly, much of what I am concerned about, of course, is the 

size of the future Navy. Some of these questions have already been 

posed to you and I appreciate your answers. I know that much of 

this won’t come up until the Quadrennial Review, but we are very 

anxious, of course, to make sure that the industrial capacity not 

only for my district, but just generally in the shipbuilding industry 

continues to grow, that we have the competition in the business, 

but also we have the business going on in building ships. For us, 

the opportunity to continue to build ships is important. 

The plan right now clearly works well for us to build the DDG– 

1000s and to be in line to go back to building the DDG–51s. 

Ms. PINGREE. But I just want to hear you talk a little bit more 

about that from our perspective. I know that we had Admiral 

Roughead visit our district recently to launch our most recent ship 

and talked about the capacity of Bath Iron Works (BIW) and the 

quality of our work. And, frankly, I just want to hear you say it 

again and say that this is important to us, that industrial capacity 

is important, that we will be hearing more, as has been asked 

today and was asked previously in our hearing yesterday, about, 

you know, continuing to build ships and the importance of shipyards and not losing that capacity as we see our work force being 

downsized and some of the issues that have gone on in the past 

which I think is bad for national security, bad for the manufacturing capacity of this country, and worrisome about the future. 

Secretary STACKLEY. Yes, ma’am. 

Let me first say that I was at that christening with Admiral 

Roughead, and I was able in my remarks to bring back to every-
19 

body the statement that Bath built is best built. It is not just a 

logo. 

Ms. PINGREE. That is our favorite statement. 

Secretary STACKLEY. It is tattooed in the hearts and minds of 

every worker up there, and I say that with all sincerity. 

A couple of quick comments. We just talked about competition 

and how important competition is. When we look at surface combatants, Bath Iron Works and Northrop Grumman have been our 

surface combatant builders for my life, and what we see is we see 

a very robust competition between the two, not just in terms of 

costs but in terms of innovation. And when I look at the land level 

facility at Bath Iron Works and the investment that really turned 

the corner in terms of their performance, that was driven by competition. And so when we look forward to future construction of 

surface combatants, I look forward to continued competition. 

The chairman made reference to the agreement between the 

Navy, Northrop Grumman, and Bath Iron Works. An important 

part of that agreement which builds the three DDG–1000s at BIW 

is the stability that it brings to that shipyard. We are able to address what was a concern associated with future workload and, at 

the same time, take advantage of three ships, one learning curve, 

one shipyard, which is good for the Navy, good for the Nation, and 

just happens to be good for Bath Iron Works. 

Admiral MCCULLOUGH. And if I could, ma’am, let there be no 

confusion that the Chief of Naval Operations (CNO) stated in his 

testimony and I will state it here, the minimum number of ships 

to execute the maritime strategy—global maritime strategy for the 

21st century is 313. We have said that repeatedly. CNO stands by 

that, I stand by that, and that is what we need. And so that is a 

minimum of 313 ships. 

Ms. PINGREE. Well, thank you for your thoughts. And, again, that 

has been brought up several times since I have been on this committee, this concern that while there is a commitment to increasing 

the size of the ships, and 313 is the number, the current plan does 

not look like we are going to get there. So I know there is a lot 

of talk about that being in the Quadrennial Review. I just want to 

say that I am anxious to see that and make sure that we do continue to reinforce that capacity. 

And just to add a note, I am glad you brought up the land level 

facility; and I think that is another important factor about Bath 

Iron Works. I served in the State legislature at the time when the 

State made that commitment. The State of Maine helped to build 

that part of the facility to modernize it, and so this is a commitment that not only is part of the companies that work there and 

the workers that work there but our State, too. We clearly recognize this is important to us and to the industrial capacity of our 

Nation and to the future of the Navy and so appreciate this partnership and look forward to it continuing. 

Secretary STACKLEY. Let me go a little bit out of bounds here and 

talk a little bit further on that. Because that land level facility represents a couple of things. It was the result of competition. Basically, General Dynamics (GD) Bath Iron Works knew that they had 

to do something different or they weren’t staying in the game. 
20 

But it was also the result of stability and a multi-year procurement that gave them the ability to commit the investment to the 

facility where they knew that they would get the return on investment. So we have competition, stability, and a solid acquisition approach that resulted in driving down the cost, as well as delivering 

to the Navy what it needed in terms of ships on schedule and on 

budget. 

Ms. PINGREE. Well, thank you. It seems to have been a successful 

plan, and I can guarantee you we are committed in our State to 

continuing to be innovative and bring down costs and deliver bestbuilt ships on time. So thank you. 

Mr. TAYLOR. The Chair thanks the gentlewoman from Maine. 

The Chair now recognizes the gentleman from Virginia, Mr. 

Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Secretary Stackley, Admiral McCullough, thank you for joining 

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

Admiral McCullough, I will begin with you. The other day when 

Admiral Mullen came to testify before us concerning the authorization process, one of the questions I asked him was concerning a 

proposal to go from 11 carriers down to 10 carriers; and I have a 

couple of questions along those lines for you. 

Is it the Navy’s intention to ask for a change in the law which 

presently requires 11 carriers, or a waiver? And, if so, it looks like 

that drop from 11 to 10 would take place, according to Admiral 

Mullen, in the years 2014 and 2015 for about a 24-month period. 

Can you tell me if you believe that that is going to have a strategic 

impact on this Nation’s naval capabilities? And, if so, what are the 

contingencies that you would put in place to make sure that there 

is not a drop or a gap in the strategic capability of this Nation? 

Admiral MCCULLOUGH. Yes, sir. Thanks for the question. 

First of all, what we need to do is take Enterprise out of service 

on time; and she is supposed to go out of service in November of 

2012. That carrier will be about 47 years old. As you well know, 

it is an eight reactor ship, one of a kind. It was our Nation’s ability 

to try to put nuclear power to sea in an aircraft carrier that drove 

the design and construction of Enterprise, and it was very successful, and it has served in everything from the Cuban missile crisis 

to recently in the Arabian Sea and the Arabian Gulf. 

The ship needs to be retired on schedule. So the waiver we request is to be able to decommission Enterprise and inactivate Enterprise in November, 2012. 

Now, that will lead us to a 10 carrier level until the delivery of 

the Ford, CVN–78, which is scheduled for September, 2015. So the 

question, can we mitigate our operational availability of the Nation’s aircraft carriers during that period? Yes, sir, we can. 

We have moved some availabilities forward, PIAs for the aircraft 

carriers maintenance availabilities, and we have moved some to 

the right in order to produce that operational availability to meet 

the commitment of the Navy to the Nation during that time frame. 

I would also tell you that if we don’t take Enterprise out and the 

direction is to keep her in service and we have to put her in the 

dock to do the maintenance required to continue that ship in service beyond 2012, it significantly disrupts the refueling schedules for 
21 

the remaining Nimitz-class carriers. The one immediately impacted 

in that time frame is Abraham Lincoln, CVN–72. When Lincoln 

comes home from her last deployment prior to her currently scheduled refueling availability, she is out of gas, if you will. So if we 

put Enterprise in the dock to do the maintenance availability on 

her to get her beyond 2012, not only do you have that aircraft carrier out of service, you can’t get any more operational availability 

out of Nimitz or out of Lincoln because she is out of fuel. And then 

each subsequent refueling would be delayed. 

Now, there is a compounding factor associated with that. Because now you have to retain Enterprise after she comes home 

from a deployment, after the maintenance availability. So if she 

went into that maintenance availability in 2012, she got one deployment’s worth of fuel left in her. So if she deploys, she comes 

home, now, because we have delayed the refueling availabilities of 

Lincoln and beyond, we have no place to fit her in to do her inactivation availability. 

It is a nuclear powered warship. You can’t lay it up and put a 

very reduced crew on it. You have to keep the crew on it to maintain the propulsion plant. 

So now we have got this carrier set aside with no operational 

availability out of it, maintaining a crew of around 2,000 people on 

it, which have to be there and can’t contribute to the Navy elsewhere. And we looked at taking those people out and putting them 

on the follow-on ship. So the answer is we need legislative relief 

to take Enterprise out of service on time, and we can mitigate the 

operational availability. 

Mr. WITTMAN. Would that legislative relief be in the form of a 

waiver or a request to change the law? 

Admiral MCCULLOUGH. I think it is in the form of a waiver, was 

what the legislative proposal was. I will get back to you on that for 

sure. I don’t want to sit here and sort of give you a half answer. 

[The information referred to is retained in the committee files 

and can be viewed upon request.] 

Admiral MCCULLOUGH. But the Nation, as I said in my opening 

statement, is committed to—or the Navy is committed to 11 aircraft carriers for the next three decades; and Secretary Gates was 

clear on that when he talked about moving the build cycle to fiveyear centers. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman for a great question and wants to compliment the Admiral on an excellent answer. 

I appreciate, for the sake of the committee, you walking us through 

that. 

The Chair now recognizes the gentleman from Indiana, Mr. Ellsworth. 

Mr. ELLSWORTH. Thank you, Mr. Chairman; and I apologize for 

being late. If these questions were already answered, I apologize to 

you all. 

I was in a meeting—I heard Secretary Stackley say our favorite 

saying. I was in a meeting with the President about three weeks 

ago, and he said that at some point we have to start making decisions on national defense based on national defense. I hope that is 
22 

up there in the top of our favorite sayings, also, because I think 

that is very true. 

I want to ask three questions, hopefully from the short answer 

up to the longer answer. 

My first question is when we plan to announce the propulsion 

system for our cruisers. If you will think about that one, if you can 

give me an answer on that. 

The second, I would like your thoughts and plans on spare longlead reactor parts, addressing that issue. 

And, thirdly, and what might take the longer answer, is that Secretary Gates announced in April about going to the five-year building procurement on the carrier. I would like the justification and 

logic on that and what that might do to the price of these carriers. 

And if you can get all three of those in my five minutes, I would 

appreciate it, if possible. 

Secretary STACKLEY. Okay. Let me start with the question regarding the propulsion system for the cruiser. 

The cruiser, as Admiral McCullough alluded to earlier, is outside 

of the Fiscal Year Defense Plan (FYDP), and I don’t want to try 

to pin down a date right now. Let me simply state it is outside of 

the FYDP. 

What we are doing in terms of preparing for the cruiser is identifying what the capabilities are that are required to not just meet 

the mission but we are also projecting the threat, if you will. So 

the immediate work that is going on, that is follow-up to the analysis of alternatives that was done about a year ago that is continuing to be reviewed is to identify the capabilities and the system 

and technology developments that are needed for that cruiser. That 

will inform what the requirements are, the larger hull, mechanical 

and electrical requirements are for the ship in terms of electrical 

power propulsion, size, displacement, et cetera. 

With that information, then you start to get into the design cycle 

for the propulsion plant or the integrated propulsion plant, which 

would also bring your power systems. So we don’t have sufficient 

fidelity for those requirements to start serious analysis, if you will, 

for the propulsion plant. Absent that, what we are doing is feasibility studies. 

So we are quite mindful of the NDA requirement that a future 

cruiser would be nuclear powered. We have to have greater fidelity 

in terms of what size, shape, what it is going to look like, what it 

is going to operate to be able to come back to the committee and 

provide any specifics regarding our analysis. 

So in terms of our feasibility, what we are doing is taking existing propulsion plants, CVN–78 design, and scaling, if you will, 

what would half of a CVN–78 propulsion plant mean in terms of 

size of ship required, if you will, to drive that around, and do we 

have a match or do we have a mismatch with the systems and capabilities required for the future cruiser to meet its requirements 

against the future threat. 

The second question regarding spare long-lead reactor plants 

parts, we do have a very unique and somewhat fragile industrial 

base associated with U.S. Navy reactor plants. And so we are very 

mindful, very careful to try to avoid peaks and valleys regarding 

workload associated with, whether it is carriers or submarines, and 
23 

we used advanced procurement, if you will, to try to help smooth 

out the workload there. So regarding long lead, I think we have a 

very healthy long-lead advanced procurement plan for our nuclear 

powered ships. 

Regarding spare reactor plant parts, I would have to get back to 

you on that. I don’t know that we are not properly spared in that 

case. 

[The information referred to is retained in the committee files 

and can be viewed upon request.] 

Mr. ELLSWORTH. And, thirdly, just the justification logic for the 

four- to five-year announcement on the carrier procurement, what 

that is going to do, add to the cost, take away from the cost, how 

that works into the goal of the 313 ships. 

Secretary STACKLEY. I think the justification is more of a requirements issue. 

I will just quickly touch on the cost considerations. When we look 

at Newport News and its workload for what was to be a 2012 carrier and is now projecting to be a 2013 carrier, at that same point 

in time we will have a Refueling and Complex Overhaul (RCOH) 

ongoing at Newport News, and we are into the two-boat-per-year 

phase for the Virginia class. So there is, in fact, a lot of activity, 

a lot of work going into Newport News in that period of time. 

The impact on costs would be, as I was discussing earlier, the effect on overheads associated with pulling the work to the right as 

well as the effect associated with inflation when you delay procurements an additional year. So we use advance procurement. We 

have an opportunity to use advance procurement to offset some of 

those escalation impacts, and we are going to work around the 

work going on in the shipyard at the time, completion of CVN–78, 

ramping up to two submarines per year on the Virginia class and 

the RCOH to try to minimize the cost impacts. And I am not at 

this point able to give you a good assessment of that because we 

are still going through all the puts and takes, and it will be significantly impacted by the lead stream that we put into the CVN–79. 

Mr. ELLSWORTH. Thank you. 

I yield back, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the gentleman. 

Secretary Stackley, I think you are hearing a lot of interest on 

the parts of the members of this committee, a lot of concern about 

the industrial base. And I think you are hearing a willingness on 

the part of this subcommittee to make investments in our yards if 

we can turn around and tell the American people that, by making 

taxpayer investments in these yards, we are getting a better ship, 

quicker, greater capability and, above all, a better price for the taxpayer at the end of the day. I was curious what type of initiatives 

that you have in mind that we could help you with legislatively towards that end. 

Secretary STACKLEY. Yes, sir. 

Let me first walk through the way we incentivize investments 

today. I gave a generic discussion on competition. Competition basically drives shipyards to figure out how to get costs out, which 

means investing in facilities to improve their performance. Ship 

construction is labor intensive and it is capital intensive, so what 

that means is heavy front end load in terms of facilities tooling ma-
24 

chinery that gets written off over time on ship construction contracts. 

So what we do there is we do a couple of things. They have the 

ability to depreciate on their contracts, their investments. As well, 

we provide what is called a facilities cost capital of money. If they 

tie money up into facilities, we allow that to come back on the contracts. We replace the equivalent earnings of that money that got 

tied up into facilities. 

And then, going beyond that, what we have done is we have 

opened up what we refer to as capital expenditure incentives, 

where we put incentives in the programs where the shipyard identifies a return on investment. We pay the front end in an incentive. 

When he demonstrates a return on investment, then we pay the 

back end in terms of incentives. 

Mr. TAYLOR. If I may, Mr. Secretary, I appreciate everything you 

said. But since most of our shipyards operate on basically a cost 

plus basis, what incentive do they have to identify that saving? 

I am going to disagree. I think it is our job as a Nation to identify those things and point it out to the shipyard, rather than the 

other way around. 

Secretary STACKLEY. Yes, sir. 

Mr. TAYLOR. That is what purchasing agents do for a company. 

Secretary STACKLEY. Yes, sir. Let me try to—let me clarify in 

terms of most of our shipyards working on a cost plus. I think what 

we have is most of our ship construction contracts right now are 

fixed-price type contracts. But we buy ships one year at a time. So 

when a shipyard is trying to make or a corporation is trying to decide whether or not to make a significant capital investment to reduce its costs, even if it is a fixed-price type contract, it has to be 

able to convince itself that it will get the return on investment not 

just this year but guessing what will happen in the outyears. 

So in terms of the government as the customer, as the buyer, 

what we have to do is work with industry to try to either offset the 

risks associated with an investment up front with nothing on the 

back end to justify it, and we try to do that through—some through 

incentives, some through the way we buy our ships. And, frankly, 

we struggle to get to the things like multi-year procurements 

where, when you are laying a multi-year, you are laying in potentially five years’ worth of known quantity of work, and that will 

drive him to invest on the front end to get the return over the five 

years. Those are the tools that we have in hand today. 

We have chartered a separate group to do an independent assessment regarding investments, costs and investments in our shipyards. And the facts come to bear that there are investments pretty 

much across the board where there is either a healthy front-end 

stable workload or competition to drive the investments. 

What we don’t have is a tool where we would go in and pay direct for a shipyard to upgrade its facilities. That starts to go down 

a path where, when you look at the industrial base, how would you 

meter that out? How would you decide where the government 

makes its investments, where the government will get the return 

on investments across the broad industry? It is a challenge. 

Mr. TAYLOR. It is a challenge, Mr. Secretary, but I think it is 

your job to do that, quite honestly. And I don’t say this happily, 
25 

but we are in a situation where our six major shipyards have one 

customer, that is the United States Government. Whether it is the 

United States Navy, the United States Coast Guard, they have got 

one customer. And as that customer, I think, and with the responsibility of 300 million people to defend them but at a price that is 

reasonable, I cannot encourage you enough to take those steps to 

identify those procedures, come to this committee with your recommendations, and then put the responsibility on us to make a 

pitch to the rest of the Congress to make those things happen. I 

think you are the man to do that, and I hope you will do that. 

Secretary STACKLEY. Sir, I will take it for action. 

Mr. TAYLOR. Thank you. 

Going back to Mr. Ellsworth’s questions, it is the committee’s decision to try to work with the Navy on the LCS program. I believe 

the committee is in agreement with the CNO as far as the DDG– 

51. 

The fact of the matter is they are both extremely capable warships, but they are both gas guzzlers. Last summer, when gasoline 

prices were $4 a gallon, that committee responded by saying that 

the next generation of amphibious assaults ships would be nuclear 

powered. The year before that, when gasoline was about $3 a gallon, this committee decided that the next generation of cruisers 

would be nuclear powered. I am of the opinion that gasoline is temporarily down. I am of the opinion that when the world economy 

recovers that price is going to go back up and that I am told that 

the next—that a typical cruiser uses about 10 million gallons of 

fuel per ship per year. 

So since I believe it is inevitable that the price is going up, that 

it is a military vulnerability to have warships that need to be refueled every three to five days, and that you can remove that vulnerability with a nuclear powered ship, I must express my disappointment in the Navy’s decision to delay the building of the CGX. 

I would also like to hear your thoughts on what steps you are 

taking when we build the nuclear powered cruiser to use the common propulsion plant that is going into the Ford carrier, the A1B, 

in order to not only get some economies of scale on the manufacturing side but also get economies of scale within the Navy on your 

training. 

Secretary STACKLEY. Yes, sir. 

Let me start with the last question there. The Ford-class propulsion plant, as I was discussing earlier, the CGX research and development (R&D) funding that we do have, the piece of that that is 

associated with the propulsion plant is doing feasibility studies taking exactly a look at the Ford plant, scaling it in half and trying 

to come to grips with what that means in terms of a total ship. 

We don’t design a ship around a propulsion plant, but the propulsion plant will start to put some limitations, if you will, on the ship 

design. So we have got a known configuration. We are figuring out 

what does it mean to scale it in half and then what does that mean 

in terms of driving, length, beam displacement for our cruiser. 

While, separately, we are attacking the issue associated with technology and systems development and design to meet the requirement, the capability warfighting requirement for that cruiser. 
26 

Mr. TAYLOR. Mr. Secretary, what is the Navy’s reluctance to just 

go ahead and make that decision to say it is going to be an A1B, 

and, yes, we are going to build a ship around this power plant? 

Secretary STACKLEY. Well, you start with the requirements. 

Mr. TAYLOR. Going back to your earlier comments about the 

problem of having at one point, I think, 12 different ships under 

construction and all the issue of costs that went that. If you have 

got a power plant that you believe works, if we all know the economies of scale and that there are huge benefits to sticking with 

something that you know works, I would like you to walk the committee through why you are reluctant not just to say that is going 

to be the power plant. 

Secretary STACKLEY. Yes, sir. 

Let me—I will start by offering follow up in terms of a classified 

briefing. But in an unclassified setting let me walk through—and 

Admiral McCullough might jump in here as well—where we are in 

terms of the analysis of alternatives (AOA) for the CGX. 

The AOA was conducted a year plus ago, and there were two 

parts to the AOA, one part associated with the capability that is 

required to meet the mission, to defeat the threat, and the other 

part of the AOA was the platform that would carry the capability. 

A couple of significant issues emerge. First and foremost is cost 

and size of the systems that are required for that mission. So that 

informs a decision that the CGX needs to move outside of the Future Years Defense Plan (FYDP). We can’t get there from here in 

the time where the CGX was showing up in the budget. So the 

platform moves outside of the FYDP while we look forward at not 

just looking at the technology but how do we best go after this 

threat. Because we cannot get there based on the costs that 

emerged from the AOA. We have to look at other alternatives. 

So the nuclear power plant piece of that discussion is really tied 

to the platform piece, while we tackle the more difficult issue of 

how do we get the threat, what technologies do we need. And it 

goes beyond a single platform. It goes beyond a CGX discussion. 

Admiral MCCULLOUGH. The reason—one of the reasons for the 

slip at a cruiser, Mr. Chairman, was how much radar do we need 

in a ship. And some of this I will have to take off line with you. 

But if you look at not only ship-based sensors but land-based 

sensors and overhead sensors and put them together in the right 

network, what size capability or sensitivity radar do you need to 

put on a ship? And as we worked through that, we saw no clear 

path to get to the capability we needed in the sensor for the ship 

that would get that ship built inside the Future Years Defense 

Plan (FYDP). So what pushed the ship outside the FYDP was no 

debate over the engineering plant. It was what size and sensitivity 

sensor do we need and what can we rely on from other sensors to 

mitigate the size of the one we would have to put on the ship. 

And, as Mr. Stackley has said, the plant—when we looked at nuclear power plant options, the plant that would go in that ship is 

a variant of the A1B power plant because we have that designed 

and we would not want to commit a vast amount of money to redesigning another power plant to put inside the ship. 

But what we really don’t know is, because we haven’t yet defined 

the sensor, we don’t know what the electric generation capacity is 
27 

that will be needed to drive the combat system in that ship. And 

until we can bring all the pieces of the puzzle together, we don’t 

know what the length beam and the displacement of the ship will 

be and what the power density requirements to drive that combat 

system and to propel the ship through the water will be. And so 

we are working our way through that. 

If you look at the tankage required for extremely high-powered 

radar in a fossil-fueled ship, you also have to look at what the rotation rate would be from that ship being on station and have to go 

alongside in order to refuel. And so what is the true operational 

availability of the platform, because you are going to have to take 

it off line to refuel it. 

And so, the cost of fuel aside, it gets down to really what the 

power density requirements are. We just haven’t sorted that out 

yet, and we are working hard to get through it. So that is where 

we are, sir. 

Mr. TAYLOR. The gentleman from Colorado, Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Just one question in general, because I think the chairman has 

raised a very critical point in terms of the logistical complexity as 

well as the long-term cost of relying upon conventional fuels. Is it 

that in the short run that the capital cost of a nuclear power plant 

is more expensive than a conventional power plant? In addition to 

the issues that you have raised? 

Admiral MCCULLOUGH. That is something we consider, sir. But, 

in the end, you have to look at the total ownership cost of the ship 

or the life-cycle cost of shipment. And when you make an up-front 

investment in a nuclear propulsion plant it will add acquisition 

cost to the ship. But then as you look at the projected cost of fuel 

over the life of that ship and if we are going to build a ship that 

we are looking at—we are looking at a 50-year service life on this 

ship, similar to an aircraft carrier. What would be the life-cycle 

cost to operate that ship using fossil fuel? 

So we don’t just look at it from an up-front acquisition cost. I 

mean, obviously, that is an input, but we try to look at it from a 

total ownership cost. And that easily mitigates the up-front cost of 

nuclear power if you look at what we think the ship would require, 

if it requires the high-end radar. 

Secretary STACKLEY. One of the CNO’s priorities is fuel. If you 

look at the rate at which we consume fuel, it is both logistics and 

it is cost. And so, across the board, Navy systems platforms, we are 

attacking our fuel consumption rates. So we are looking—you look 

at aircraft, you look at ships, you look at ground vehicles. We are 

trying to figure out how to get a better handle on the rate at which 

we are consuming fuel. 

Admiral MCCULLOUGH. And to add on to that, we are looking at 

alternative fuels, not just fossil-based fuels. And we would like to 

get to what we call the Green Hornet sometime in the near term 

that runs off a non-petroleum-based fuel. 

Mr. TAYLOR. The Chair recognizes the gentleman from Virginia, 

Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Admiral McCullough, I go back on another issue concerning our 

carriers. And I know that—I appreciate the Navy’s willingness in 
28 

the decision making process for home porting, to make that decision through the Quadrennial Defense Review (QDR) process. I do, 

though, have a couple of questions that do seem to create some contradictions; and I would like for you to just elaborate a little bit on 

that. 

I see in the Navy’s justification book it clearly indicates that future projects at Mayport would include a controlled industrial facility, ship maintenance support facilities, and other construction 

projects that would be necessary only if a carrier were home ported 

there in Mayport. So I wanted you to maybe explain to me. Is there 

maybe a disconnect there or an updating that is needed in the justification book between the budget planning process and the decision deferral? 

And then also the request for $76 million for dredging and dockside improvements there at Mayport that, again, you would question, knowing that there are other ports in the Nation where they 

could accommodate a nuclear carrier on an emergency basis. And 

certainly that $76 million might lead you to believe that there is 

the beginning of an effort there to create a permanent home 

porting facility there in Mayport. 

So I was wondering if you couldn’t comment on those. 

Admiral MCCULLOUGH. Yes, sir. Thank you. 

As we look at carrier facilities on the east and west coast, there 

are three bases, if you will, on the west coast that can accommodate a nuclear powered aircraft carrier in the Nimitz class. On the 

east coast, we currently have one; and that is Norfolk. So we believe that it is in the Nation’s best interests to have an alternate 

carrier facility on the east coast to include both the ability to berth 

the aircraft carrier there and to service it as required if something 

would preclude getting in and out of Norfolk. 

Sir, as you well know, the carriers won’t fit through the Panama 

Canal. So if something happened and we couldn’t get a carrier in 

or out of Norfolk for some period of time and the ship was coming 

home from deployment and required service, based on the current 

distribution of bases, we would have to send it around South America to get it to a west coast facility. 

So we believe it is in the Nation’s interest to have an alternate 

capability on the East Coast; and we believe the easiest place to 

do that is in Mayport, where the Navy has had aircraft carriers 

based since I believe about 1952 until the Kennedy was decommissioned. To get that ship in that turning basin with adequate bottom clearance requires dredging even to tie that ship up in 

Mayport. And that is what is in the budget request today. 

The pier work in Mayport is not particularly associated with— 

that is in the budget this year. The budget request this year is not 

associated with an alternate carrier facility. That amount of money 

was in the budget for other pier work in Mayport to support the 

ships that are currently there. 

As we looked at the requirement for Mayport, as you suggest, if 

we are going to truly have an alternate carrier facility on the east 

coast, you would need the ship’s maintenance facility and the consolidated industrial facility to support the nuclear work. We would 

additionally need to do further upgrades to the wharf in Mayport. 
29 

So, given we are going to look at carrier basing and global force 

dispersal, or deployment, rather, in the QDR, we think it is in the 

Nation’s and the Navy’s best interest to proceed with the dredging 

project, to at least have an adequate facility to berth a carrier in 

Mayport, should we need to do that. 

I know there are other ports on the East Coast that various folks 

think you could put an aircraft carrier in; and I have heard mention of Charleston, South Carolina, and Baltimore. The sea detail 

going in and out of Charleston in the Cooper River, with the flow 

and shape of the Cooper River, is difficult for attack submarine and 

cruiser destroyer type ships. Having served on Enterprise for 26 

months and been the commander of two carrier strike groups, I 

would not want to have to live through that sea detail on a nuclear 

powered aircraft carrier. 

I have also heard of Baltimore. And while the Baltimore ship 

channel going up the Bay I believe is dredged to a depth of 50 feet, 

having taken a DDG 10,000-ton destroyer to Annapolis, I, again, 

would not wish that sea detail on anybody to put a nuclear powered—or try to get a nuclear powered aircraft carrier into Baltimore. 

So, given all those factors, the Navy came to the conclusion that 

Mayport is probably the best alternative for an additional carrier 

facility on the East Coast. 

Mr. WITTMAN. Just as a follow-up on that then, it sounds like 

then from what you are telling me is that the Navy has pretty 

much got their mind made up prior to going into the QDR that 

Mayport’s going to be the place and that we are essentially 

ramping up for that by the first phase with this $76 million improvement there. 

Admiral MCCULLOUGH. I would say we need the capability. I 

think the dredging is the first start. But the Navy and the Defense 

Department believe that needs to be looked at in the QDR. And 

while I have some ideas what the projects proposed in Mayport are, 

if the QDR decides that that is not the appropriate place to put the 

aircraft carrier, then we will revisit the whole issue. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair recognizes the gentlewoman from Maine, 

Ms. Pingree. 

Ms. PINGREE. Thank you very much. 

I hadn’t really intended to ask you about this, but since I have 

this opportunity and a chance to ask another question, not only do 

I have BIW in my district but I have the Kittery Portsmouth Naval 

Shipyard where we recondition submarines. I have only had one 

opportunity to visit there, but it seemed like there was a tremendous amount of work going on and the need for a fair amount of 

construction to handle the capacity. It looked to me like there was 

more work than they could handle in spite of the excellent workforce, and I know they are hiring more and doing more. But I didn’t 

know if you wanted to just talk about a little bit about the need 

for that capacity and what is going on there. 

Secretary STACKLEY. Let me just describe a couple of things. 

We have recently submitted in a report to Congress what is referred to as the Shipyard Business Plan, which takes a look at public-private, the division of work going into the public shipyards, and 
30 

then how do we plan and manage that workload to ensure that we 

are meeting our public-private requirements as well as ensuring 

that our shipyards are efficiently loaded. 

And at Portsmouth—and I will get the number exactly wrong— 

but I would say that there is what we call full-time equivalents for 

workload at Portsmouth looks fairly stable at the 4—roughly 4,000 

per year rate. In the repair world, particularly in Portsmouth’s 

world where most of their work—all of their work is submarine, 

but most of their workload was tied to refuelings, and as we 

move—as we have moved out of 688 refuelings and have gone to 

Virginia where you don’t have a mid-life refueling plan, then it becomes more of a challenge. So what we are trying to do is balance 

that skill level, 4,000, to workload to ensure we are not operating 

the shipyard inefficiently. And it will be a continual challenge. 

Ms. PINGREE. Thanks. 

Mr. TAYLOR. The Chair recognizes the gentleman from Missouri, 

the ranking member. 

Mr. AKIN. We are starting to run long here, but I just had one 

quick question or concern. And that was, having been in charge of 

maintenance in a steel mill I know when there is a lot of budget 

pressure it is easy to sort of shave off the maintenance budget. Certainly in the last number of weeks we have been sensitive to a lot 

of budgetary pressures. 

In addition, I believe that a lot of the maintenance requirements 

have been sort of moved out of the public domain in a way. I guess 

it is just a thought or a concern that we make sure that, you know, 

you are trying to keep a 300-something ship Navy, you have got 

to keep up on the maintenance, too. I hope that that is being balanced carefully. It might be something that we need to look at just 

to make sure that we are not shaving that too tight. 

Admiral MCCULLOUGH. Yes, sir. Thanks very much for that 

statement. 

We look at maintenance very carefully. And as we talk about a 

313 ship floor, as we go forward, two-thirds of that 313 is sitting 

at the pier right now. And if we don’t get our ships to their estimated service lives we will never achieve the 313 floor structure 

plan. 

In the current budget request we have funded or requested funding for service ship maintenance to a level of 96 percent of what 

we perceived the requirement is. And when we looked at the entire 

portfolio and the risk we were taking with respect to procurement 

and manpower and ops and maintenance, that four percent we believed was acceptable risk. 

But absolutely, sir, we look at that. We think it is very important 

to do the right maintenance on the ships at the right times. And 

I would tell you, as part of our 2009 execution year challenge, we 

have curtailed some operations to continue to fund maintenance 

availabilities. And that is the way we view that, sir. 

Mr. AKIN. I appreciate your keeping that kind of balance in the 

whole thing. Because there is so much pressure for platforms and 

new technology and all that kind of thing. And, as you know, if you 

let maintenance get away from you, then it can really eat you alive. 

Because it is a preventive thing. And you didn’t catch it early and 
31 

now you have got to tear something all to pieces in order to get into 

some part you have got to change. 

Thank you, Mr. Chairman. 

Mr. TAYLOR. The Chair thanks the ranking member. 

Gentlemen, I want to compliment you on what I think has been 

one of the better presentations that I have seen in my time in Congress. 

Secretary Stackley, I think we are lucky as a Nation to have you 

where you are. And I would leave you with just one last thought. 

I am always amazed at the caliber of our officer corps and our enlisted corps. We are, as a Nation, are blessed. 

I think, though, that, over the years, the most glaring weakness 

in our Department of Defense has been the acquisition force. It has 

been my observation that a grounding, no matter how slight, is a 

career-ending move for a ship captain. I would hope that a program 

that runs over budget or fails to be delivered on time, that we, as 

a Nation, would take the same attitude towards those programs, 

that we could instill in our acquisition force the need to—with a 

Nation that is going to run a $1 trillion deficit this year and with 

a series of programs that have run late and well over budget, I 

would hope that one of your goals would be to get within your acquisition force that type of a mentality that we are going to be on 

time, we are going to be on budget, and we are going to get the 

best value for the fleet, for the sailors, and for the people who pay 

for that. 

Secretary STACKLEY. Sir, can I offer a comment? 

Mr. TAYLOR. Absolutely. 

Secretary STACKLEY. Thank you. 

Let me first say that, yes, sir, we have absolutely—we have to 

change course in terms of where we are going regarding cost and 

schedule performance on our major defense acquisition programs. 

As far as the caliber of the individuals that you have working for 

you day in and day out to achieve that, we have top-notch individuals who are working hard. One of the challenges that we face is 

that in the course of the past 15 years we have taken the acquisition and work force and reduced it by 55 percent. So now what you 

have done is you have taken hard-working individuals and you 

have stretched them way too thin. So the Congress recognizes that, 

and the Department recognizes that, and we are taking the steps 

necessary to start the rebuild. 

The Department of the Navy has 5,000 acquisition workforce 

members that we are going after in the FYDP. We have got it identified in terms of critical skills, where do we need them placed, and 

we are actively going after getting the best folks we can to come 

into the government to help us take on that task. 

Mr. TAYLOR. Mr. Secretary, again, I think we are lucky to have 

you where you are. I very much appreciate the attitude you are 

taking towards this, and we are going to work with you to make 

that happen. 

If there are no other questions, then the subcommittee stands adjourned. 

[Whereupon, at 11:46 a.m., the subcommittee was adjourned.] 

A P P E N D I X 

MAY 15, 2009 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

MAY 15, 2009 

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