S. HRG. 112–590, PT. 2 

DEPARTMENT OF DEFENSE AUTHORIZATION FOR 

APPROPRIATIONS FOR FISCAL YEAR 2013 AND 

THE FUTURE YEARS DEFENSE PROGRAM 

HEARINGS 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

ON 

S. 3254 

TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY 

ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF 

ENERGY, TO PRESCRIBE MILITARY PERSONNEL STRENGTHS FOR 

SUCH FISCAL YEAR, AND FOR OTHER PURPOSES 

PART 2 

SEAPOWER 

APRIL 19 AND 26, 2012 

( 

Printed for the use of the Committee on Armed Services 

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76–538 PDF 2013

S. HRG. 112–590 PT. 2 

DEPARTMENT OF DEFENSE AUTHORIZATION FOR 

APPROPRIATIONS FOR FISCAL YEAR 2013 AND 

THE FUTURE YEARS DEFENSE PROGRAM 

HEARINGS 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

ON 

S. 3254 

TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY 

ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF 

ENERGY, TO PRESCRIBE MILITARY PERSONNEL STRENGTHS FOR 

SUCH FISCAL YEAR, AND FOR OTHER PURPOSES 

PART 2 

SEAPOWER 

APRIL 19 AND 26, 2012 

Printed for the use of the Committee on Armed Services 

( 

Available via the World Wide Web: http://www.fdsys.gov/ 

COMMITTEE ON ARMED SERVICES 

CARL LEVIN, Michigan, Chairman 

JOSEPH I. LIEBERMAN, Connecticut 

JACK REED, Rhode Island 

DANIEL K. AKAKA, Hawaii 

E. BENJAMIN NELSON, Nebraska 

JIM WEBB, Virginia 

CLAIRE MCCASKILL, Missouri 

MARK UDALL, Colorado 

KAY R. HAGAN, North Carolina 

MARK BEGICH, Alaska 

JOE MANCHIN III, West Virginia 

JEANNE SHAHEEN, New Hampshire 

KIRSTEN E. GILLIBRAND, New York 

RICHARD BLUMENTHAL, Connecticut 

JOHN MCCAIN, Arizona 

JAMES M. INHOFE, Oklahoma 

JEFF SESSIONS, Alabama 

SAXBY CHAMBLISS, Georgia 

ROGER F. WICKER, Mississippi 

SCOTT P. BROWN, Massachusetts 

ROB PORTMAN, Ohio 

KELLY AYOTTE, New Hampshire 

SUSAN M. COLLINS, Maine 

LINDSEY GRAHAM, South Carolina 

JOHN CORNYN, Texas 

DAVID VITTER, Louisiana 

RICHARD D. DEBOBES, Staff Director 

ANN E. SAUER, Minority Staff Director 

SUBCOMMITTEE ON SEAPOWER

JACK REED, Rhode Island, Chairman 

DANIEL K. AKAKA, Hawaii 

JIM WEBB, Virginia 

KAY R. HAGAN, North Carolina 

RICHARD BLUMENTHAL, Connecticut 

ROGER F. WICKER, Mississippi 

JEFF SESSIONS, Alabama 

KELLY AYOTTE, New Hampshire 

SUSAN M. COLLINS, Maine 

(II) 

C O N T E N T S 

CHRONOLOGICAL LIST OF WITNESSES 

NAVY SHIPBUILDING PROGRAMS

APRIL 19, 2012

Page 

Stackley, Hon. Sean J., Assistant Secretary of the Navy (Research, Development, and Acquisition); Accompanied by VADM Kevin M. Mccoy, USN, 

Commander, Naval Sea Systems Command; VADM John T. Blake, USN, 

Deputy Chief of Naval Operations, Integration of Capabilities and Resources (N8); VADM William R. Burke, USN, Deputy Chief of Naval Operations, Warfare Systems (N9); and Lt. Gen. Richard P. Mills, USMC, Deputy Commandant for Combat Development and Integration/Commanding 

General, Marine Corps Combat Development Command ................................. 5 

MARINE CORPS ACQUISITION PROGRAMS

APRIL 26, 2012

Stackley, Hon. Sean J., Assistant Secretary of the Navy (Research, Development, and Acquisition) ......................................................................................... 61 

Mills, Lt.Gen. Richard P., USMC, Deputy Commandant for Combat Development and Integration/Commanding General, Marine Corps Combat Development Command ................................................................................................ 68 

(III) 

(1) 

DEPARTMENT OF DEFENSE AUTHORIZATION 

FOR APPROPRIATIONS FOR FISCAL YEAR 

2013 AND THE FUTURE YEARS DEFENSE 

PROGRAM 

THURSDAY, APRIL 19, 2012 

U.S. SENATE, SUBCOMMITTEE ON SEAPOWER, COMMITTEE ON ARMED SERVICES, Washington, DC. 

NAVY SHIPBUILDING PROGRAMS 

The subcommittee met, pursuant to notice, at 9:30 a.m. in room 

SR–232A, Russell Senate Office Building, Senator Jack Reed 

(chairman of the subcommittee) presiding. 

Committee members present: Senators Reed, Sessions, and Wicker. 

Majority staff member present: Creighton Greene, professional 

staff member. 

Minority staff members present: Bryan D. Parker, minority investigative counsel; and Christopher J. Paul, professional staff 

member. 

Staff assistant Present: Brian F. Sebold. 

Committee members’ assistants present: Carolyn Chuhta, assistant to Senator Reed; Gordon Peterson, assistant to Senator Webb; 

Lenwood Landrum, assistant to Senator Sessions; and Joseph Lai, 

assistant to Senator Wicker. 

OPENING STATEMENT OF SENATOR JACK REED, CHAIRMAN 

Senator REED. Let me call the hearing to order. I want to welcome and thank our witnesses who have joined us this morning. 

We’re honored to have the Honorable Sean J. Stackley, who’s the 

Assistant Secretary of the Navy for Research, Development, and 

Acquisition; Vice Admiral Kevin M. McCoy, USN, Commander, 

Naval Sea Systems Command; Vice Admiral John T. Blake, USN, 

Deputy Chief of Naval Operations (CNO), Integration of Capabilities and Resources, N8; Vice Admiral William R. Burke, USN, Deputy CNO, Warfare Systems, N9; and Lieutenant General Richard 

P. Mills, USMC, Deputy Commandant for Combat Development 

and Integration/Commanding General, Marine Corps Combat Development Command. Thank you, gentlemen, thank you. 

We’re obviously grateful not only for your appearance today, but 

for your extraordinary service to the Nation and to the extraordinarily courageous and professional men and women of the Navy 

2 

and the Marine Corps that you have the privilege to lead, and we 

thank you and we hope you thank them, too, on our behalf. 

The Navy continues to be faced with a number of critical issues 

as it tries to balance its modernization and procurement needs 

against the cost of current operations. The shipbuilding budget remains at a level where it will be difficult at best to field the Navy 

we want, and indeed even the Navy that we need. 

With that in mind, we need to ensure that we are getting good 

value for every shipbuilding dollar that we spend. We were very 

pleased to see the Department of Defense’s (DOD) original decision 

to budget for two Virginia-class submarines per year, but are troubled by the new shipbuilding plan that would delay one of the two 

fiscal year 2014 boats until fiscal 2018. We know that the Navy 

and contractor team are able to drive down costs under the two 

boats per year plan. We will need to hear more about why the 

Navy made this change and what options may exist for reinstating 

the two boats per year plan. 

We support the Navy’s continuing efforts to drive costs out of the 

Ohio replacement SSBN program. SSBNs will remain a vital leg of 

the nuclear triad for the foreseeable future. Establishing and 

achieving cost reduction goals in the Virginia-class and Ohio replacement programs will yield significant stability to our Nation’s 

submarine industrial base and provide the Navy with a modern, 

capable submarine fleet for many years to come. 

Last month, the subcommittee held a private briefing on issues 

surrounding the Ohio replacement program. But we should get on 

the record that the Navy continues to try to reduce costs on this 

program to make it more affordable and potentially less disruptive 

to the rest of the shipbuilding account. 

Also last month, the full committee heard testimony from Secretary Frank Kendall, who agreed that, even with Navy cost reduction efforts of the program, DOD may need to step in and help the 

Navy pay for this critical program, the SSBN program particularly. 

We will want to hear from our witnesses about the cost reduction 

efforts and how DOD might step in to help pay for this program. 

I think you understand, I have a certain affection and regard for 

submarines. 

The subcommittee met last year and focused primarily on other 

programs that were experiencing quality control issues or other 

production issues. It is never a pleasant situation where major programs are having such problems. In receiving last year’s testimony 

from the Navy, it seemed to me that the Navy was making good 

faith efforts to improve the situation through changes in staffing, 

training, and organization. 

We’re eager to hear from Secretary Stackley and Vice Admiral 

McCoy this morning on the progress they have made on these initiatives since last year. 

In our country’s fiscal environment, it’s very unlikely it will have 

as much money to spend as the 30-year shipbuilding plan assumes. 

Fundamentally, that is why this hearing is so important. We need 

to focus on managing these important programs in ways that are 

efficient and effective in delivering the capability the country needs 

from its Navy. We need to improve quality and efficiency in all of 

our shipbuilding programs, not only because of the direct savings, 

3 

but also because we need to demonstrate to the taxpayers that we 

are using defense dollars wisely. 

We look forward to hearing your testimony this morning on these 

and other issues facing the Navy. 

With that, let me recognize Senator Wicker. 

Thank you. 

STATEMENT OF SENATOR ROGER F. WICKER 

Senator WICKER. Thank you, Mr. Chairman. I know you have an 

affection for submarines, but you also have an affection for defending the country in general, as a whole; and I think in that regard 

we’re very well-served by this very distinguished panel; we have 

five men with very difficult tasks and responsible jobs. I appreciate 

them being here at this important hearing. 

Vice Admiral Burke is here, I believe, for the first time before 

this panel. Last month, the CNO assigned Admiral Burke to the 

new position of Deputy CNO for Warfare Systems, responsible for 

integration of manpower, training, sustainment, modernization, 

and procurement of ships, submarines, and air programs. We look 

forward to seeing him again before this subcommittee. 

Let me take a moment to mention that this is a particularly momentous year in our history. It marks the bicentennial of the War 

of 1812 and the writing of our national anthem, the Star Spangled 

Banner. Notably, the War of 1812 was the first declared war in our 

Nation’s history. The Battle of Lake Erie, which is depicted in William Henry Powell’s beautiful and profound painting in the east 

stairwell of the Senate, was fought during this conflict and is one 

of the Navy’s greatest victories. 

Today, our sailors and marines continue to exemplify the benchmarks of leadership, seamanship, and heroism set by their predecessors 200 years ago. 

I also want to recognize the outstanding efforts of the Navy’s expeditionary sailors in places like my State of Mississippi. Our Seabees from the Naval Construction Battalion Gulfport have facilitated the fastest combat theater expansion in U.S. Central Command’s (CENTCOM) history. In the past year, approximately 2,400 

of our Gulfport-based Seabees from two naval construction regiments and nine naval mobile construction battalions deployed to 

Afghanistan and Kuwait, Okinawa, Guam, Europe, and Africa. 

Their hard work and dedication reflects the very finest traditions 

of the Navy. 

Mr. Chairman, the Navy’s 30-year shipbuilding plan that was 

submitted to Congress last month projects that for the first time 

the fleet would remain below 310 ships during the entire 30-year 

period. The plan also foresees critical shortfalls in cruisers, destroyers, and amphibious ships. 

I believe these proposed cuts to our naval capabilities without a 

plan to compensate for them will place our strategic interests in 

the Asia-Pacific region and Arabian Sea at greater risk. I’d like to 

hear from our witnesses on what I consider five key issues that our 

subcommittee will review this year. 

First, viability of the industrial base. The viability of the 30-year 

shipbuilding plan is essential to the strength of our shipbuilding 

industrial base. The strength of the skills, capabilities, and capacVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
4 

ities inherent to new construction, shipyards, and weapons system 

developers reinforce the Navy’s dominant maritime position. I’d 

like to hear from our witnesses how they carefully weighed the effects on the shipbuilding industrial base when they balanced resources and requirements in drafting the shipbuilding plan. 

Second, balance of the force. I remain concerned about the 

amount of funding needed for ship construction going forward. 

With more than half the construction and development cost dollars 

allocated to build nuclear submarines, submarine construction 

costs could crowd out funding needed to build large surface ships 

and to modernize the fleet. I hope our witnesses can tell us what 

they’re doing to reduce the cost of building these submarines and 

give us their views on the impact of submarine construction costs 

on surface shipbuilding, including amphibious ships and destroyers. 

Third, I’m interested in learning the views of our witnesses on 

ways we can ensure the Navy’s shipbuilding plan meets the demand for amphibious ships from our combatant commanders. This 

demand has increased more than 80 percent over the last 5 years. 

I’m particularly pleased that the Navy and Huntington Ingalls 

signed a Memorandum of Agreement (MOA) last month for LHA– 

7, the second America-class amphibious assault ship to be built in 

my home State of Mississippi. 

As we begin to pivot toward the Asia-Pacific region, the Navy 

and Marine Corps will serve as the linchpin of American force projection abroad. Amphibious ships such as LHA–7 will help enable 

our troops to meet any challenges that our country may face in the 

future. 

Fourth, multiyear procurement authority. This subcommittee will 

carefully consider in the coming weeks the Navy’s two shipbuilding 

multiyear procurement requests included in its budget submission: 

authority for the Virginia-class submarines and the DDG–51 

Arleigh Burke-class destroyers. I know members of our subcommittee will be interested to learn how these multiyear proposals will offer the best value to the warfighter and the American 

taxpayers. 

Finally, sequestration. The Navy faces significant budget challenges ahead. The Budget Control Act (BCA) passed by Congress 

and signed by the President last August requires sequestration to 

be implemented across all the departments, including DOD. Sequestration is not a hypothetical. It is the law of the land, unless 

changed. On January 3, 2013, a mere 257 days from today, sequestration will happen unless legislation is passed to undo it. 

Mr. Chairman, our national defense is solely a Federal responsibility. Defense spending is also a two-fer that supports our national 

security and our high-tech manufacturing workforce. As such, I 

hope our witnesses today will elaborate on their assessment of the 

impact that sequestration will have on our sailors, marines, and 

our industrial base. 

With that in mind, I look forward to the testimony of all these 

fine witnesses. Also, Mr. Chairman, without objection, at this point 

I would like to submit the statement for the record of our colleague, 

Senator Susan Collins, who could not be here due to a scheduling 

conflict. Thank you, sir. 

5 

[The prepared statement of Senator Collins:] 

PREPARED STATEMENT BY SENATOR SUSAN COLLINS

Secretary Stackley, I want to thank you and the other witnesses for your public 

service. The challenges facing our country and our Navy are great. The administration and Congress have a responsibility to establish budget priorities. The Senate 

has not passed a budget in 2 years, and I am troubled by the priorities established 

in the budget of this administration, and previous administrations when I look at 

the historic budget topline for shipbuilding. The annual shipbuilding budget has 

averaged about $14 billion, which is troubling when I compare that figure to other 

Federal spending each year. 

For example, our country pays as much in interest on the national debt each 

month as we do for shipbuilding for an entire year. We spend the equivalent of the 

shipbuilding budget, $15 billion a year, on Federal agency travel and conferences. 

The Army spent more than a year’s worth of shipbuilding—$19 billion—for research 

and development on the Future Combat System—a program it ultimately cancelled. Shipbuilding represents a mere 2.2 percent of the $614 billion requested by the 

Department of Defense (DOD) this year. So, the point I simply would like to make 

is that Navy ships are a great value for our country. Ships promote U.S. diplomacy 

overseas. They deter aggression from happening in the first place. They protect the 

commercial sea lanes that underpin our national economy. 

It seems to me that the shipbuilding account punches above its weight in comparison to the small portion of the DOD and Federal budget it represents. 

Senator REED. Thank you, Senator Wicker. 

Senator Sessions, do you have any comments? 

Senator SESSIONS. Thank you, Mr. Chairman, for your leadership. I value that so much. You’ve been a real asset to the Senate. 

Senator Wicker, thank you for those good comments. 

I’m concerned about the sequester. Senator Reed, he is exactly 

correct. That is the law. We need to be taking some real action to 

fix it so we don’t end up scrambling at the last minute. 

So I thank all of you for your testimony and I look forward to 

participating. 

Senator REED. Thank you very much. 

I want to commend my colleagues, too, for their great service in 

support in a very collaborative and cooperative basis on so many 

different issues. So thank you, gentlemen. 

Secretary Stackley, I presume you will go first; is that correct? 

Or do you have another preference? 

STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY (RESEARCH, DEVELOPMENT, AND ACQUISITION); ACCOMPANIED BY VADM KEVIN M. MCCOY, USN, 

COMMANDER, NAVAL SEA SYSTEMS COMMAND; VADM JOHN 

T. BLAKE, USN, DEPUTY CHIEF OF NAVAL OPERATIONS, INTEGRATION OF CAPABILITIES AND RESOURCES (N8); VADM 

WILLIAM R. BURKE, USN, DEPUTY CHIEF OF NAVAL OPERATIONS, WARFARE SYSTEMS (N9); AND LT. GEN. RICHARD P. 

MILLS, USMC, DEPUTY COMMANDANT FOR COMBAT DEVELOPMENT AND INTEGRATION/COMMANDING GENERAL, MARINE CORPS COMBAT DEVELOPMENT COMMAND 

Mr. STACKLEY. Yes, sir, I’m going to propose that we have a single statement for the Navy and Marine Corps. 

Senator REED. That is welcome. Thank you very much, Secretary 

Stackley. 

Mr. STACKLEY. Yes, sir. Thank you, Mr. Chairman, Senator 

Wicker, Senator Sessions, for the opportunity to appear before you 

today to discuss Navy shipbuilding. As always, thank you for your 

6 

leadership on the many issues that fall under Congress’ broad responsibility to provide and maintain our Navy and, perhaps most 

importantly, for your steadfast commitment to our sailors and marines around the world. 

With the permission of the subcommittee, I have a brief opening 

statement and would propose to submit a more formal statement 

for the record. 

Senator REED. Without objection. 

Mr. STACKLEY. Thank you. 

Today we are a force of 282 ships, about half of which on any 

given day are underway, performing missions around the globe, 

supporting operations in Afghanistan, providing maritime security 

along the vital sea lanes, missile defense in the Mediterranean and 

the Sea of Japan, intelligence, surveillance, and reconnaissance 

(ISR), as needed, global presence at sea and with an embarked marine force, and readiness to move ashore. 

They’re conducting anti-piracy patrols, global partnership stations humanitarian assistance, and they are quietly, reliably on patrol and providing strategic deterrence. All the while they’re training for the next deployment, the next operation. 

In support of the defense strategic guidance, we’re building toward a force of about 300 warships, ships that will provide the capability and the capacity to maintain our maritime superiority 

today and for the foreseeable future. 

We have reshaped our shipbuilding plan over a year ago to reflect the priorities of the new defense strategy and the reality of 

fact-of-life top-line reductions consistent with the BCA. This year’s 

shipbuilding plan strikes a balance between capacity, capability, affordability, and the industrial base. 

We have important work to do in order to close out-year gaps or 

risks identified by the long-range shipbuilding plan. In doing so, we 

need to drive the equation to deliver the full capability and capacity that our warfighters need, at the lowest possible cost. 

The Secretary of the Navy remains strongly committed to investing in shipbuilding and we have put that commitment to work over 

the last year. Since this time last year, two destroyers, a submarine, an LPD–17 amphibious ship, and a T–AKE dry cargo-ammunition ship have joined the fleet. The submarine Mississippi, the 

Littoral Combat Ship (LCS) Fort Worth, and the Joint High-Speed 

Vessel (JHSV) Spearhead will deliver this spring. Another half a 

dozen ships have been christened, keels have been laid for the lead 

ship of the DDG–1000-class, the mobile landing platform (MLP) 

class, and the next LCS, Virginia, and T–AKE. Construction has 

begun on another 11 warships. 

In total, since December 2010, we’ve awarded contracts to procure 38 ships, including options, most competitively awarded, all 

fixed-price contracts, and we’re on track to increase that number 

to 40 this spring with the anticipated awards of the next amphibious assault ship, the LHA–7, and the 11th and final ship of the 

LPD–17 class. These contracts provide an important degree of certainty to our industrial base in an otherwise uncertain period in 

defense spending. 

7 

We recognize, however, that it is not possible to simply buy our 

way to recapitalizing our force. We must focus relentlessly on improving affordability in our shipbuilding programs. 

This year’s 2013 budget request includes funding for 10 ships, including the first year of full funding for the second ship of the Gerald R. Ford-class, CVN–79, maintaining aircraft carrier construction starts on 5-year intervals. CVN–79 is required to deliver in 

2022, which aligns with the end of service life for Nimitz, the ship 

CVN–79 will functionally replace to maintain an 11-aircraft carrier 

force structure. This provides schedule flexibility, which is important for this ship for it enables the Navy and the shipbuilder to develop and implement a more affordable build strategy that incorporates the findings and recommendations emerging from lessons 

learned in the design and construction of the lead ship CVN–78. 

We continue with Virginia-class fast attack submarine procurement at two boats in fiscal year 2013 and are requesting authorization of a nine-boat multiyear procurement commencing in fiscal 

year 2014. The Virginia program reliably delivers critical undersea 

capacity affordably and on time, in large part due to multiyear savings resulting from economic order quantity opportunities, improved workforce planning, and workload sequencing, optimized 

construction scheduling, increased opportunities for facilities investment, and reduced support and engineering workload. 

Within this request, however, top-line constraints have forced the 

Navy to defer a planned second boat from fiscal year 2014 to fiscal 

year 2018. 

We’re requesting funding for two Flight 2A DDG–51 Arleigh 

Burke-class destroyers in 2013 in conjunction with the multiyear 

request for nine ships, projected to save $1.5 billion. This strongperforming, stable program provides much-needed ballistic missile 

defense (BMD) capability and capacity to the fleet. 

Key to meeting the growing ballistic missile threat is our Air and 

Missile Defense Radar (AMDR) program, which will greatly improve the sensitivity and long-range detection and engagement of 

increasingly complex threats. In the course of the AMDR competitive development, we’ve witnessed impressive progress, while assessments of technology maturity steadily improve and estimates 

for cost steadily decline. 

We are continuing to execute the dual-award strategy for LCS. 

In 2013, we’re requesting funds for 4 ships and a total of 16 ships 

across the Future Years Defense Program (FYDP). Program affordability continues to improve as we ramp up production. Notably, 

the fixed-price options for the 10th ship of these block buys are 

about half the cost of their respective lead ships. Likewise, the 

ships’ mission packages are moving smartly forward in developmental testing in support of initial operational capability (IOC) 

milestones. 

With five LPD–17-class ships in various stages of construction 

and the lead ship of the America-class preparing to float off this 

summer, our shipbuilding program continues to build towards the 

amphibious lift capability required for the assault echelon of two 

Marine Expeditionary Brigades in support of joint forcible entry operations. Quality continues to improve with each ship delivered on 

8 

the Gulf Coast and we are likewise working closely with the shipbuilder to improve cost and schedule on these critical programs. 

While today we are finalizing contract details for LHA–7, we are 

requesting funding in 2013 to begin design for the fiscal year 2017 

assault ship, LHA–8. Although we have shifted our plans to procure the replacement for the LHD–41-class amphibious ships beyond the FYDP, we are pressing on with the LSDX analysis of alternatives (AOA) this year in advance of preliminary design. 

We’re continuing to increase our logistics lift capability with the 

10th JHSV and the first of three MLPs currently under contract. 

As well, to meet CENTCOM’s requirement for an afloat forward 

staging base, the Navy has requested funding to modify the third 

MLP and advance procurement toward a fourth fiscal year 2014 

MLP for this mission. This highly versatile four-ship MLP-class 

will then support the two maritime prepositioning squadrons as 

well as the Afloat Forward Staging Base (AFSB) mission. 

In view of fiscal constraints, we are shifting procurement for the 

lead ship of the Ohio replacement program to 2021. This 2-year 

shift defers $8.5 billion of cost beyond this decade, while providing 

opportunity to reduce developmental risk by increasing the new 

ballistic missile submarine’s level of design completion and maturity. Equally important, we’ll need to employ this time to further 

our efforts to drive down costs in every stage of development, engineering, construction, operations, and support on this program. 

However, the delay will result in a temporary reduction to 10 

available SSBNs in the 2030s. With no major SSBN overhauls 

planned during this period, the risk associated with meeting at-sea 

present requirements is assessed to be moderate, but manageable. 

The strength of our shipbuilding plan is closely coupled with the 

strength of our shipbuilding industrial base. Over the past several 

years, the Navy has placed a priority in increasing shipbuilding 

rates and providing stability for the shipbuilding industrial base, 

which translates into retention of skilled labor, improved material 

purchasing and workforce planning, strong learning curve performance, and the ability for industry to invest in facility improvements, all resulting in more efficient ship construction and a more 

affordable shipbuilding program. 

Accordingly, in the course of balancing resources and requirements in the formulation of the shipbuilding plan, the effect of program decisions on the industrial base must continue to be closely 

weighed. 

One of the greatest challenges to our future shipbuilding program and therefore elements of our industrial base is the rapidly 

increasing cost of our ship programs. To this end, in addition to the 

emphasis on stability, the Navy is establishing affordability requirements and investing in design for affordability for future ship 

programs, mandating use of open system design, leveraging competition where it exists in shipbuilding, employing fixed-price contracts to control costs in production, imposing strict criteria, limiting disruptive change to contracts, investing in industry-wide 

manufacturing process improvements through the national shipbuilding research program, and incentivizing capital investment in 

facilities where warranted. 

9 

Ultimately, we recognize that as we balance requirements, affordability, and industrial base considerations, it is ever more important that our shipbuilding plan closely aligns with the priorities 

outlined in the new defense strategy. In view of increasing pressure 

on our top line, it’s equally paramount that we, Navy and industry, 

continue to improve the affordability within our programs in order 

to build the Navy needed by the future force. 

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

you today and we look forward to answering your questions. 

[The joint prepared statement of Mr. Stackley, Vice Admiral 

McCoy, Vice Admiral Blake, Vice Admiral Burke, and Lieutenant 

General Mills follows:] 

JOINT PREPARED STATEMENT BY HON. SEAN J. STACKLEY; VADM KEVIN M. MCCOY, 

USN; VADM JOHN TERENCE BLAKE, USN; VADM WILLIAM R. BURKE, USN; AND

LT. GEN. RICHARD P. MILLS, USMC 

Mr. Chairman, Senator Wicker, and distinguished members of the subcommittee, 

thank you for the opportunity to appear before you today to address Department 

of the Navy (DoN) shipbuilding. The Department is committed to build the fleet that 

best supports the Defense Strategic Guidance that emerged from collaborative efforts of the Services, combatant commanders, Chairman of the Joint Chiefs of Staff, 

the Secretary of Defense and the President. The fiscal year 2013 President’s budget 

request for shipbuilding provides for platforms that will evolve and adapt, allowing 

our warfighters to fight and win the Nation’s wars, remain forward and be ready. 

While the Budget Control Act of 2011 placed new constraints on the DoN budget, 

which required hard choices and prioritization to address, our shipbuilding plan attempts to balance capacity, capability and the industrial base. 

Today’s Navy is a Battle Force of 282 ships. As described in the Long-Range Plan 

for Construction of Naval Vessels for fiscal year 2013, which outlines the DoN’s 5- 

year shipbuilding plan (included in the fiscal year 2013 President’s budget request) 

and provides a projection for new ship construction and planned ship retirements 

over the following 25-year period, the Navy is building for a 21st century battle 

force of about 300 warships. 

The last year has proven eventful for Navy and Marine Corps operations across 

the entire spectrum of the Maritime Strategy from building maritime partnerships 

to executing our core capabilities of forward presence, deterrence, power projection, 

sea control, maritime security, and humanitarian assistance and disaster response. 

As 2011 began, the Enterprise Strike Group sailed east from Norfolk, headed out 

on a penultimate deployment for the carrier. The Vinson Strike Group was already 

operating in 7th Fleet and sailing toward the Arabian Sea where it would join the 

Kearsarge Amphibious Ready Group supporting marines of I Marine Expeditionary 

Force in theater. Kearsarge, in its fifth month of deployment, had left Norfolk in 

the summer of 2010 with the 26th Marine Expeditionary Unit (MEU) embarked, on 

a mission to provide disaster relief to the flood stricken people of Pakistan. With 

relief efforts complete, the 26th MEU moved on to Operation Enduring Freedom in 

Afghanistan. 

Shortly after Enterprise deployed, Reagan, Chancellorsville, and Preble would get 

underway from San Diego to conduct multinational training in the Western Pacific 

before relieving the watch in the Indian Ocean. 

Then, a month later, a fuse was lit in the Middle East—unleashing instability, 

causing governments to topple, jeopardizing American citizens and interests in this 

strategic region. As the Arab Spring emerged, Kearsarge and 26th MEU would sail 

to the Mediterranean and Enterprise would swing west. Amphibious ships Boxer, 

Green Bay, and Comstock and the 13th MEU would get underway from San Diego. 

Then in March of last year, half the world away, unimaginable devastation swept 

away whole villages and towns along the coast of Japan, claiming an untold number 

of lives while leaving the smoldering threat of greater destruction and loss. Before 

the world fully grasped the situation, marines, stationed in Okinawa, would airlift 

to the region for disaster response. The Essex Amphibious Group, forward deployed 

to Japan, would get underway and the Reagan Strike Group, now in the Western 

Pacific, would sail north, joining Essex, to provide critical supplies, medical services 

and rescue efforts. Operation Tomodachi would eventually employ 22 ships, 140 aircraft and 15,000 sailors and marines to deliver more than 260 tons of relief supplies 

to earthquake and tsunami survivors. 

10 

Meanwhile, as Muammar Qaddafi launched his army in an assault against his 

own citizens, guided-missile destroyers Stout and Barry and attack submarines 

Providence and Scranton and the guided missile submarine Florida, as well as British ships and submarines, launched their cruise missiles against Libyan air defense, 

surface-to-air missile sites and communication nodes, demonstrating our extraordinary power projection capability. Over the course of the NATO operation, Florida 

would launch more than 90 Tomahawks of the more than 200 total. 

Aircraft of the Enterprise and 26th MEU operating from Kearsarge, joined by the 

first deployed EA–18G Growler squadron, would leave Afghanistan and redeploy to 

the Mediterranean to join coalition forces in establishing a no-fly zone to halt the 

Libyan army and the bloodshed it threatened. 

That same week, Bataan, Mesa Verde, Whidbey Island, and the 22nd MEU would 

surge from Norfolk to strengthen the coalition Operation ‘‘Odyssey Dawn.’’ 

Through 2011, carrier air wings embarked aboard Enterprise, Abraham Lincoln, Carl Vinson, John C. Stennis, Ronald Reagan, and George H.W. Bush, on her firstever combat deployment, would fly nearly 15,500 sorties totaling more than 49,000 

flight hours in support of coalition forces on the ground in Iraq and Afghanistan and 

Operation New Dawn. 

What is most remarkable about this story of the first 3 months of 2011 is that 

it is replayed month after month in Navy and Marine Corps operations. On any 

given day in any given year, nearly half of our battle force ships are underway, supporting missions around the globe—conducting anti-piracy patrols, global partnership stations, under-ice operations, supporting operations ashore, strategic deterrence, missile defense missions, amphibious operations or humanitarian assistance 

missions, such as the hospital ship Comfort in Operation Continuing Promise. 

Today, Enterprise, commissioned in 1961, is once again on deployment, this time, 

for the last time. 

No other military and no other nation on earth today, has the reach, the presence, 

the capability, the training and the resolve to maintain this pace or breadth of operations. Global reach, persistent presence, and operational flexibility, the inherent 

characteristics of U.S. seapower articulated in the Cooperative Strategy for 21st 

Century Seapower, are demonstrated in all we have done in 2011 and continue to 

do in 2012. These tenets, along with the Defense Strategic Guidance, guide the priorities and direction of the Department of the Navy’s fiscal year 2013 President’s 

budget request. 

THE FISCAL YEAR 2013 BUDGET REQUEST

The fiscal year 2013 President’s budget request funds 10 ships: 1 Gerald R. Fordclass aircraft carrier, 2 Virginia-class fast attack submarines, 2 DDG–51 Arleigh 

Burke-class destroyers, 4 Littoral Combat Ships (LCS), and 1 Navy Joint High 

Speed Vessel (JHSV). In addition, the Department is requesting Multiyear Procurement (MYP) authority for the Virginia-class (fiscal year 2014 through fiscal year 

2018 ships) and the DDG–51 Arleigh Burke-class (fiscal year 2013 through fiscal 

year 2017 ships). 

AIRCRAFT CARRIERS

Our aircraft carriers are best known for their unmistakable forward presence, 

ability to deter potential adversaries and assure our allies, and capacity to project 

power at sea and ashore; however, they are equally capable of providing our other 

core capabilities of sea control, maritime security, and humanitarian assistance and 

disaster relief. Our carriers provide our Nation the ability to rapidly and decisively 

respond globally to crises with a small footprint that does not impose unnecessary 

political or logistic burdens upon our allies or potential partners. 

The Gerald R. Ford is the lead ship of our first new class of aircraft carrier in 

nearly 40 years. Gerald R. Ford-class carriers will replace aging Nimitz-class carriers and are expected to be the premier forward deployed asset for crisis response 

and early decisive striking power in a major combat operation through the remainder of this century. While the Gerald R. Ford aircraft carrier design uses the Nimitz-class hull form, it is essentially a brand new ship with new technologies and interior arrangements that improve warfighting capability, operational availability, 

and quality of life, while reducing crew size (approximately 1,200 sailors including 

air wing reductions) and total ownership costs (TOC). TOC reduction by hull is expected to result in $5 billion over the 50 year service life of each ship of the Gerald 

R. Ford-class. 

The fiscal year 2013 President’s budget requests the first year of full funding for 

the second ship of the Gerald R. Ford-class, CVN–79, effectively maintaining aircraft carrier construction starts on 5 year intervals. This is an important benchmark 

11 

for sustaining the large vendor base that supports this unique ship class. The build 

duration for CVN–79, though, has been extended by 2 years. This adjusted profile 

provides for delivery no later than 2022, which aligns with the end of service life 

for Nimitz, the ship CVN–79 will functionally replace to maintain an 11 carrier 

force structure. This extended build period will also allow for production efficiencies 

which are discussed in more detail below. 

Inarguably, this new class of aircraft carrier brings forward tremendous capability 

and life cycle cost advantages compared to the Nimitz-class she will replace. However, the design, development and construction efforts required to overcome the 

technical challenges inherent to these advanced capabilities have significantly impacted cost performance on the lead ship. In the course of this past year, the Navy 

conducted a detailed review of the Gerald R. Ford-class build plan to improve endto-end aircraft carrier design, material procurement, production planning, build and 

test. This effort, taken in conjunction with a series of corrective actions with the 

shipbuilder on the lead ship, will not erase cost growth on Gerald R. Ford, but 

should improve performance on the lead ship while fully benefitting CVN–79 and 

following ships of the class. The added build duration planned for CVN–79 allows 

the Navy and shipbuilder to develop and implement a more affordable, optimal 

build strategy that incorporates the findings of the end-to-end review as well as lessons learned from design and construction of the lead ship. This year’s budget request includes prior year completion funding to address increases incurred to date 

in Gerald R. Ford government furnished equipment, non-recurring design, and ship 

construction. 

Among the new technologies being integrated is the Electromagnetic Aircraft 

Launch System (EMALS) which will support Ford’s increased sortie generation 

rates. EMALS testing continues and has been successful. To date, EMALS has 

launched more than 1,500 dead loads and 134 aircraft launches from the full scale 

EMALS production representative unit using 5 different types of test aircraft, including an F–35C Joint Strike Fighter. EMALS’ production schedule supports the 

planned delivery of Gerald R. Ford in September 2015. 

Advanced Arresting Gear (AAG) is also a new technology planned for Gerald R. 

Ford. This technology will provide the capability to recover all existing and future 

carrier-based fixed wing air vehicles, including those too heavy or too light for current systems. Testing of a full-scale, land-based installation of AAG is ongoing. It, 

too, supports the planned delivery of Gerald R. Ford. 

Dual Band Radar (DBR) will also be introduced on Gerald R. Ford. DBR integrates an X-band Multi-Function Radar with an S-band Volume Search Radar to 

provide a single interface to the ship’s combat system. Its active planar arrays enable Gerald R. Ford to be designed with an island smaller than those on current 

carriers, which contributes to the ship’s increased sortie generation rate. With the 

truncation of the DDG–1000 program at three ships and subsequent removal of the 

S-band radar from the DDG–1000 baseline, Gerald R. Ford will be the lead ship for 

DBR developmental testing. DBR production schedule supports the planned delivery 

of Gerald R. Ford. 

Gerald R. Ford’s newly designed reactor delivers more core energy and nearly 

three times the electrical output of the current carrier’s plant, yet will need only 

half as many sailors to operate and will be easier to maintain. Gerald R. Ford also 

incorporates several survivability enhancements to counter current and emerging 

threats. 

With more than half of the service life of the Nimitz-class still remaining, the Refueling Complex Overhaul (RCOH) continues as a key enabler for the enduring presence of the aircraft carrier fleet. This year’s budget request includes prior year completion funding for the RCOH of the fourth ship of the Nimitz-class, Theodore Roosevelt, whose availability was extended due to unexpected growth work discovered 

during execution. In addition, the budget request includes incremental funding to 

initiate the RCOH of Abraham Lincoln and advance procurement funding for the 

RCOH of George Washington. 

THE SUBMARINE FLEET

Submarines have a unique capability for stealth and persistent operation in an 

access-denied environment and to act as a force multiplier by providing high-quality 

Intelligence, Surveillance, and Reconnaissance (ISR) as well as indication and warning of potential hostile action. In addition, attack submarines are effective in antisurface ship warfare and anti-submarine warfare in almost every environment, thus 

eliminating any safe-haven that an adversary might pursue with access-denial systems. As such, they represent a significant conventional deterrent. While our attack 

submarine fleet provides considerable strike capacity already, our guided missile 

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submarines provide significantly more strike capacity and a robust capability to covertly deploy special operations force (SOF) personnel. Today the Navy has four guided missile submarines (SSGN). To mitigate the loss of strike capacity when SSGNs 

retire in the next decade, the Navy has requested Research and Development funding in fiscal year 2013 to begin design of a modification to the Virginia-class SSN, 

the Virginia Payload Module. This added capability would contain four SSGN-like 

tubes for strike and future payloads. Pending the future fiscal environment, modified Virginia-class SSNs could be procured starting no earlier than fiscal year 2019. 

This would permit Navy to sustain undersea strike capacity without requiring the 

Navy to construct a purpose-built ship to replace the SSGN—an option that would 

be cost prohibitive. 

The fiscal year 2013 President’s budget requests funding for two Virginia-class 

submarines in fiscal year 2013 as well as advance procurement and economic order 

quantity funding for the fiscal year 2014 through 2018 boats. The fiscal year 2013 

boats are the last two submarines under the Block III (fiscal years 2009 through 

2013 Multiyear Procurement (MYP) contract). Now in its 15th year of construction, 

the Virginia program reliably delivers this critical undersea capability affordably 

and on time, in large part due to the cost savings and stability provided by the program’s multiyear procurement strategy. The Department expects continuation of 

this strategy to yield similar benefits, and is including a legislative proposal for the 

authorization of a nine-ship MYP for procurement of the next block of Virginia-class 

submarines (fiscal years 2014 through 2018) with the fiscal year 2013 President’s 

budget request. The Navy estimates 14.4 percent savings on this MYP versus single 

ship procurement, as result of economic order quantity opportunities, improved 

workforce planning and workload sequencing, optimized construction scheduling, increased opportunity for facilities investment, and reduced support and engineering 

workload; all made possible by leveraging the stability offered by the MYP. 

The Navy is mitigating the impending attack submarine force structure gap in the 

2020s through three parallel efforts: reducing the construction span of Virginia-class 

submarines, extending the service lives of selected attack submarines, and extending the length of selected attack submarine deployments. 

Ballistic missile submarines are the most survivable leg of the Nation’s strategic 

arsenal and provide the Nation’s only day-to-day assured nuclear response capability. They provide survivable nuclear strike capabilities to assure allies, deter potential adversaries, and, if needed, respond in kind. The Ohio Replacement Program 

inventory is assumed to be 12 ships. The Nuclear Posture Review (NPR) completed 

in April 2010 determined that the United States would retain a nuclear triad under 

New START and that, for the near-term, the Navy would retain all 14 SSBNs in 

the current inventory. The NPR stated that, depending upon future force structure 

assessments and how SSBNs age in the coming years; the United States will consider reducing from 14 to 12 Ohio-class submarines in the second half of this decade. To maintain an at-sea presence for the long term, the United States must continue development of the follow-on to the Ohio-class submarine. Due to budget constraints, the Department has shifted procurement of the lead Ohio Replacement 

submarine by 2 years (from fiscal year 2019 to fiscal year 2021). The delay results 

in a temporary reduction to 10 available SSBNs in the 2030s during the transition 

period between Ohio and Ohio Replacement SSBNs. Because there are no major 

SSBN overhauls planned during this period, an available force of 10 ships will be 

able to meet the current U.S. Strategic Command’s at-sea presence requirements, 

albeit with increased operational risk that stems from the reduced force levels. The 

fiscal year 2013 budget requests funding to continue development of the Ohio Replacement Program and ensures Common Missile Compartment efforts are on track 

to support the United Kingdom’s Successor Program’s schedule. All aspects of the 

Ohio Replacement Program will continue to be thoroughly reviewed and aggressively challenged to drive down engineering, construction, and operations and support costs. 

As threats evolve, it is vital to continue to modernize existing submarines with 

updated capabilities. The submarine modernization program includes advances in 

weapons, integrated combat control systems, sensors, open architecture, and necessary hull, mechanical and electrical upgrades. These upgrades are necessary to retain credible capabilities for the future conflicts and current peacetime ISR and Indication and Warning missions and to continue them on the path of reaching their 

full service life. Maintaining the stability of the modernization program is critical 

to our future Navy capability and capacity. 

Modernization is also critical to sustaining the current combat capabilities of the 

submarine fleet. Through extensive use of commercial off-the-shelf (COTS) equipment, modern submarine Control, Communications, Computers, and Intelligence 

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placement of electronics through the Tech Insertion process prevents part obsolescence and related impacts to operational availability. This successful COTS model 

has sustained the submarine fleet for the past decade at a fraction of legacy combat 

system costs. Maintaining the stability of the modernization program is critical to 

our future Navy capability and capacity. 

LARGE SURFACE COMBATANTS

Guided missile cruisers (CGs) and guided missile destroyers (DDGs) comprise our 

large surface combatant fleet. When viewed as a whole, these ships fulfill broad mission requirements both independently and in conjunction with a strike group. The 

demands for increased capability and capacity in Ballistic Missile Defense (BMD), 

Integrated Air and Missile Defense (IAMD) and open ocean anti-submarine warfare 

(ASW) have resulted in a shift of focus on the type and quantity of these ships. The 

Navy’s ongoing analysis is influenced by the emerging shift of focus for large surface 

combatants; the increased demand for capability and capacity in integrated air and 

missile defense; and open ocean anti-submarine warfare resulting from changing 

global threats. BMD forward presence is assumed to be ‘‘in stride’’ meaning that a 

BMD capable ship can transition rapidly between BMD and other operations historically assigned to these classes of ships. 

The DDG–1000 Zumwalt guided missile destroyer will be an optimally crewed, 

multi-mission surface combatant designed to provide long-range, precision naval 

surface fire support to marines conducting littoral maneuver and subsequent operations ashore. The DDG–1000 features two 155mm Advanced Gun Systems capable 

of engaging targets with the Long-Range Land Attack Projectile at a range of over 

63 nautical miles. In addition to providing offensive, distributed and precision fires 

in support of marines, it will provide valuable lessons in advanced technology such 

as signature reduction, active and passive self-defense systems, and enhanced survivability features. The first DDG–1000 is approximately 65 percent complete and 

is scheduled to deliver in fiscal year 2014 with initial operating capability planned 

in 2016. 

The fiscal year 2013 President’s budget requests funding for two Flight IIA DDG– 

51 Arleigh Burke-class destroyers as well as advance procurement and economic 

order quantity funds for the fiscal year 2013 through fiscal year 2017 Multiyear Procurement (MYP). These two ships are planned as part of the fiscal years 2013 

through 2017 MYP. The Flight IIA ships will incorporate Integrated Air and Missile 

Defense (IAMD), providing much-needed BMD capacity to the Fleet. In evaluating 

the merits of a MYP contract for fiscal years 2013 through 2017 DDG–51s, the Navy 

projected $1.5 billion in savings for nine ships across that time period and has leveraged these savings in the procurement of the nine ships. 

The Navy is proceeding with the Air and Missile Defense Radar (AMDR) program 

to meet the growing ballistic missile threat by greatly improving the sensitivity and 

longer range detection and engagement of increasingly complex threats. This scalable radar is planned for installation on the DDG–51 Flight III ships to support 

joint battle space threat awareness and defense, including BMD, area air defense, 

and ship self defense. The AMDR radar suite will be capable of providing simultaneous surveillance and engagement support for long range BMD and area air defense. Three Fixed Price Incentive Technology Development phase contracts were 

awarded in the fall of 2010. AMDR technology development is on track and successfully completed the three System Functional Reviews in December 2011. Prototype 

development to demonstrate critical technologies is well underway. The program remains on schedule for the Preliminary Design Reviews in the fall of 2012 and the 

Navy plans to award an Engineering and Manufacturing Development contract in 

early fiscal year 2013. Pending the successful demonstration of technical maturity 

and final determination that production risks have been suitably mitigated, the 

Navy intends to conduct a separate fixed price competition for installation of the 

AMDR Engineering Change Proposal into DDG–51 ships, commencing in fiscal year 

2016. 

To counter emerging threats, the Navy continues to make significant investments 

in cruiser and destroyer modernization to sustain combat effectiveness and to 

achieve the 35 year service life of the Aegis fleet. Destroyer and cruiser modernization programs include Hull, Mechanical, and Electrical (HM&E) upgrades, as well 

as advances in warfighting capability and open architecture to reduce total ownership costs and expand mission capability for current and future combat capabilities. 

The fiscal year 2013 President’s budget request includes funding for the modernization of three cruisers (one Combat Systems and two HM&E) and five destroyers 

(two Combat System and three HM&E). Beyond Aegis modernization, the Navy is 

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neering Site to mature this promising technology. An initial shipboard demonstration of HED is targeted for installation in a DDG–51 ship in early calendar year 

2013. 

The Aegis Fleet serves as the Surface Navy’s sea-based BMD force. The Advanced 

Capability Build 12/Technology Insertion 12 (ACB 12/TI 12), also known as Baseline 

9, constitutes the most significant combat system upgrade of the Aegis Fleet. In 

service DDGs will undergo a comprehensive modernization of their combat system, 

and new construction DDGs starting with DDG–113 will be outfitted with ACB 12/ 

TI 12. ACB 12/TI 12 brings the Integrated Air and Ballistic Missile Defense (IAMD) 

capability to Surface Combatants. IAMD allows Aegis Destroyers to perform the 

BMD mission without any degradation to their ability to conduct Anti Air Warfare 

(AAW) simultaneously through the introduction of the Multi-Mission Signal Processor (MMSP). ACB 12/TI 12 software development is 97 percent complete and on 

schedule. John Paul Jones’s ACB 12/TI 12 modernization will begin in the fall of 

2012. John Paul Jones will be the first IAMD capable destroyer, paving the way 

for backfit into existing destroyers as well as forward fit on new construction ships 

in the restart of the DDG–51-class. ACB 12/TI 12 also provides a platform for rapid 

introduction of additional BMD capabilities. 

As in the past, cruisers and destroyers will continue to deploy with strike groups 

to fulfill their traditional roles. Many will be required to assume additional roles 

within the complex BMD arena. Ships that provide BMD will sometimes be stationed in remote locations, away from strike groups, in a role as theater BMD assets. The net result of these changes to meet demands for forward presence, strike 

group operations and BMD places additional pressure on the existing inventory of 

surface combatants. In addition, the constraints of the current budget resulted in 

the Navy having to retire seven CGs (four in fiscal year 2013 and three in fiscal 

year 2014) before the end of their service lives. While the specific CGs chosen for 

decommissioning were selected with a view toward minimizing the impact their loss 

will have on BMD capability and capacity, the loss of these ships will necessitate 

other ships fulfilling their roles in non-BMD situations—further exacerbating the 

demands for large surface combatant structure. To support the President’s Phased 

Adaptive Approach for defense of Europe, Navy plans on placing four BMD capable 

DDG–51 platforms in a Forward Deployed Naval Forces status in Rota, Spain, significantly reducing the number of ships required to source this mission. Further, the 

Navy will continue to explore alternatives that will redistribute assets currently 

being employed for missions of lesser priority to meet the missions contained in the 

updated defense strategy. 

SMALL SURFACE COMBATANTS

The Navy remains committed to an inventory of 55 Littoral Combat Ships (LCS). 

These ships expand the battle space by complementing our inherent blue water capability and filling warfighting gaps in the littorals and strategic choke points 

around the world. LCS design characteristics (speed, agility, shallow draft, payload 

capacity, reconfigurable mission spaces, air/water craft capabilities) combined with 

its core C4I, sensors, and weapons systems, make it an ideal platform for engaging 

in Maritime Security Operations. 

The Navy’s fiscal year 2013 President’s budget funds four LCSs in fiscal year 

2013, with a total of 16 to be procured across the Future Years Defense Program 

(FYDP). Affordability remains the key factor in acquiring the needed future capacity 

of these highly flexible and capable ships. The Navy remains on course to deliver 

these ships in the quantities needed through the execution of the two competitive 

block buy contracts (for ten ships of each version) awarded in fiscal year 2010. Each 

ship brings unique strengths and capabilities to the mission and each has been designed in accordance with overarching objectives for reducing total ownership cost. 

LCS capabilities address specific and validated capability gaps in Surface Warfare, Mine Countermeasures, and Anti-Submarine Warfare. The concept of operations and design specifications for LCS were developed to meet these gaps with focused mission packages that deploy manned and unmanned vehicles to execute a 

variety of missions. The first two Mine Countermeasure (MCM) Mission Modules 

(MM), first two Surface Warfare (SUW) MMs, and the first Anti-Submarine (ASW) 

MM have been delivered. The fiscal year 2013 President’s budget requests approximately $300 million in Research and Development funding for continued development of mission modules, and Procurement funding to buy common mission module 

equipment and three mission packages (one MCM and two SUW). 

15 

AMPHIBIOUS SHIPS

Amphibious ships operate forward to support allies, respond to crises, deter potential adversaries, and provide the Nation’s best means of projecting sustainable 

power ashore; they provide the best means for providing humanitarian assistance 

and disaster relief. Amphibious forces comprised of sailors, marines, and ships provide the ability to rapidly and decisively respond to global crises without a permanent footprint ashore that would place unnecessary political or logistic burdens upon 

our allies or potential partners. There are two main drivers of the amphibious ship 

requirement: maintaining the persistent forward presence, which enables both engagement and crisis response, and delivering the assault echelons of up to two Marine Expeditionary Brigades (MEB) for joint entry operations. 

The Chief of Naval Operations and Commandant of the Marine Corps have determined that the optimal force structure for amphibious lift requirements is 38 amphibious ships to support the operations of 2.0 MEBs. Balancing the total naval 

force structure requirements against fiscal projections imposes risk on meeting this 

requirement. Based on the footprint of a 2.0 MEB force, the minimum number of 

operationally available ships necessary to meet the assault echelon requirement is 

30: a force made up of ten Amphibious Assault Ships (LHD/LHA), 10 Amphibious 

Transport Docks (LPD) and 10 Dock Landing Ships (LSD). The DoN can meet this 

requirement as long as all 10 of each type is operationally available when needed. 

Historically, the Navy has carried more than this minimum number of ships to mitigate the impact that long-duration maintenance has on their availability when they 

are tasked to respond during conflict. Planning factors call for a force of 33 ships 

to achieve this availability. Today, the Amphibious Force Structure stands at 28 

ships, which includes 9 LHD/LHAs, 7 LPDs, and 12 LSDs. 

The Navy is commencing recapitalization of the large deck amphibious assault 

ships with the construction of America (LHA–6). America is now more than 60 percent complete and is scheduled for delivery in fiscal year 2014. The fiscal year 2013 

President’s budget request includes a funding request to complete construction of 

America, which will cover government liabilities up to the contract ceiling and impacts from the Pension Protection Act of 2006. Beginning with LHA 8, which is 

planned for procurement in fiscal year 2017, the Navy will reintegrate the well deck 

into the large deck amphibious assault ships to provide necessary surface lift capacity. Funding to design this reintegration of the well deck is included in the fiscal 

year 2013 President’s budget request. 

The San Antonio-class LPD (LPD–17) serves as the replacement for four classes 

of older ships: the LKA, LST, LSD–36, and the LPD–4. Six of the 11 authorized and 

approved ships of this class have been delivered to the Navy. Lessons learned from 

the effort to resolve material reliability concerns identified in the early ships of the 

class are being applied to ships currently under construction. Quality continues to 

improve with each ship delivered as the Navy continues to work closely with the 

shipbuilder to address cost, schedule, and performance issues. The utility of this 

class was best demonstrated by USS Mesa Verde (LPD–19) as she recently returned 

after 19 months of deployed operation over a 25 month period. 

LSD(X) will replace the aging LSD–41/49 Whidbey Island/Harpers Ferry-class 

vessels and will perform an array of amphibious missions. An Analysis of Alternatives (AoA) will be conducted in fiscal year 2012. The fiscal year 2013 President’s 

budget requests funds for Research and Development required for technology development and initial design efforts resulting from the AoA. Affordability will be a key 

factor in acquiring the needed future capacity and operational capabilities of this 

highly flexible multifaceted ship. 

A fully funded LSD mid-life program, to include repairs, is essential for ensuring 

the LSD–41/49 ships are able to meet their readiness for tasking requirements and 

meet their expected service life. Funding for LSD mid-life is included in the fiscal 

year 2013 President’s budget request. 

AUXILIARY SHIPS

Combat Logistics Support ships fulfill the vital role of providing underway replenishment of fuel, food, repair parts, ammunition and equipment to forward deployed 

ships and their embarked aircraft, to enable them to operate for extended periods 

of time at sea. Combat Logistic Support Ships consist of T–AOE fast support ships, 

T–AKE auxiliary dry cargo ships, and T–AO fleet oilers. The T–AO and T–AKE 

ships tend to serve as shuttle ships between resupply ports and their customer 

ships, while the T–AOE tends to serve as a station ship, accompanying and staying 

on-station with a Carrier Strike Group (CSG) to provide fuel as required to customer ships. 

16 

Support Vessels such as the Mobile Landing Platform (MLP) and the Joint High 

Speed Vessel (JHSV) provide additional flexibility to the combatant commander 

within the operating area. The MLP enables at sea transfer of vehicles from cargo 

ships and facilitates the delivery of these vehicles, equipment, personnel and supplies between the sea and restricted access locations ashore. The JHSV provides a 

high-speed, shallow draft alternative to moving personnel and material within and 

between the operating areas, and to support security cooperation and engagement 

missions. Other support vessels, such as salvage ships, fleet tug boats, and submarine tenders serve in various supporting roles, but are not counted as part of the 

battle force. 

The fiscal year 2013 President’s budget requests Research and Development funds 

to mature the Navy’s concept for the replacement T–AO fleet oiler in fiscal year 

2016. The Analysis of Alternatives (AoA) is nearing completion. The new oilers will 

have a double-hull design to ensure compliance with the environmental protection 

requirement for this type of ship. 

In support of the enhanced Maritime Prepositioning Ship Squadron (MPSRON) 

concept of operations, two T–AKE auxiliary dry cargo ships are being allocated to 

the Maritime Prepositioning Squadrons (MPS) to provide sea-based logistic support 

to Marine Corps units afloat and ashore. Further, the Navy recognizes the need to 

provide for at-sea transfer of vehicles from a cargo ship and to provide an interface 

with surface connectors. The Mobile Landing Platforms (MLP) (support vessels) will 

provide an enhanced throughput option for the MPS and increase capacity to support combatant commander requirements. It will facilitate delivery of vehicles, 

equipment, personnel, and supplies between the sea base and restricted access locations ashore. The Navy has awarded a contract for three MLPs. As part of the fiscal 

year 2013 budget deliberations, the Department will retain two MPSRONs and return the third to U.S. Transportation Command for common sealift support. The 

first two MLPs will be built to support the two MPSRONs. 

During the fiscal year 2013 deliberations, U.S. Central Command submitted a Request for Forces for Afloat Forward Staging Base (AFSB) capability with capacity 

for Mine Warfare. In the past, the Navy has provided fleet assets to address the 

AFSB demand. In order to avoid diverting a fleet asset to fulfill this request, the 

Department has elected to convert Ponce to provide an interim AFSB capability 

until fiscal year 2016. To meet the enduring AFSB mission, Navy plans to modify 

the MLP 3 (fiscal year 2012 ship) to become a dedicated AFSB asset and will request an MLP 4 in fiscal year 2014 to provide an additional MLP variant for the 

AFSB mission. This will result in a class of four MLPs—two dedicated to the two 

MPSRONs and two dedicated to the AFSB mission. The two dedicated MLP/AFSBs 

are required to provide continuous AFSB support anywhere in the world. Advance 

Procurement funds for the fiscal year 2014 ship as well as Research and Development funds for AFSB are included in the fiscal year 2013 budget request. MLP 3 

is planned for delivery in order to replace Ponce by fiscal year 2016. 

The fiscal year 2013 President’s budget request includes funding for construction 

of the tenth and final JHSV (support vessel). A Memorandum of Agreement with 

the Army transferred programmatic oversight and mission responsibility for the entire JHSV program, including operations and maintenance, to the Navy. All delivered JHSV’s will be operated by the Military Sealift Command and manned by civilian or contract mariners. 

DECOMMISSIONINGS/INACTIVATIONS

As a result of fiscal constraints, the Navy chose to prioritize readiness over capacity. The fiscal year 2013 decision to decommission seven Ticonderoga-class guided 

missile cruisers (CG), four in fiscal year 2013 and three in fiscal year 2014, and two 

LSDs exemplify our resolve to provide a more ready and sustainable Fleet within 

our budget constraints. The resources made available by these retirements will 

allow increased funding for training and maintenance. Both the cruisers and the 

LSDs were in need of significant maintenance investment and six of the seven cruisers required further investment to install BMD capability. Inactivating the CGs resulted in approximately $4.1 billion in savings across the FYDP, including manpower and maintenance savings and costs avoided by not executing combat system 

and hull, mechanical, and electrical upgrades. These savings were shifted to other 

portions of the Fleet. Inactivation of the two LSDs in fiscal year 2014 saved approximately $293 million across the FYDP. These ships will be placed in Mobility ‘‘B’’ 

category, allowing for re-activation should conditions warrant. The reduction in 

cruiser and amphibious capacity and shift to a more sustainable deployment model 

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seas in some select areas, or a change in the nature of that presence to favor innovative and lower-cost approaches. 

AFFORDABILITY AND THE SHIPBUILDING INDUSTRIAL BASE

The strength of our shipbuilding plan is closely coupled with the strength of our 

shipbuilding industrial base. The critical skills, capabilities, and capacities inherent 

to our new construction shipyards and weapon systems developers inarguably underpin the U.S. Navy’s dominant maritime position. Accordingly, in the course of 

balancing resources and requirements in the formulation of the shipbuilding plan, 

the effect of program decisions on the industrial base must be closely weighed. 

Over the past several years, the Navy has placed a priority on increasing shipbuilding rates and providing stability for the shipbuilding industrial base. Stability 

translates into retention of skilled labor, improved material purchasing and workforce planning, strong learning curve performance, and the ability for industry to 

invest in facility improvements; all resulting in more efficient ship construction and 

a more affordable shipbuilding program. 

The past Virginia-class and DDG–51-class MYPs, the DDG–1000 Swap/DDG–51 

Restart Agreement, the LCS dual block buy, the three ship MLP procurement, the 

continuation of CVN–78-class procurements on constant 5 year centers, and the 

heel-to-toe CVN RCOH induction-to-delivery cycle have provided critical stable 

workload for the affected shipyards and their respective vendor base. The fiscal year 

2013 President’s budget request for the next Virginia-class and DDG–51–class 

MYPs will help to further stabilize the surface combatant and submarine industrial 

base through this decade. Likewise, the funding requested to procure a fourth MLP, 

and to configure MLP–3 and MLP–4 as AFSBs will also provide for added workload 

within the auxiliary shipbuilding sector. 

However, the shipbuilding plan submitted with the fiscal year 2013 President’s 

budget request also reflects difficult choices guided by the strategic priorities and 

fiscal constraints brought with two governing works; the 2011 Budget Control Act 

and the recently released ‘Sustaining U.S. Global Leadership: Priorities for 21st 

Century Defense.’ The decisions to truncate the JHSV program, to delay starting 

the TAO(X), LSD(X), and SSBN(X) programs, and to defer a destroyer, a submarine, 

LHA–8, and two LCS ships to later years in the FYDP (or beyond) are decisions 

which place added stress on the industrial base and on the affordability of the respective programs; yet best match our resources to our requirements. 

Any strategy which seeks to improve upon these projections by relying upon increasing investment above the current plan for shipbuilding is, at best, high risk. 

In fact, the current shipbuilding program calls for significant added investment 

through the FYDP and beyond (particularly during the period of SSBN(X) procurement). Accordingly, the Navy must continue to explore and implement alternatives 

to improve upon these projections for shipbuilding and the industrial base through 

other means. 

The strategy going forward must continue to center upon improving affordability. 

One of the greatest challenges to our future shipbuilding program, and therefore to 

elements of our industrial base, is the rapidly increasing cost of our ship programs. 

To this end, in addition to the emphasis on stability discussed above, the Navy is 

establishing affordability requirements and investing in Design for Affordability for 

future ship programs; mandating use of open systems design; leveraging competition 

where it exists in shipbuilding; employing fixed-price contracts to control cost for 

ships and weapon systems in production; imposing strict criteria limiting disruptive 

change to contracts; investing in industry-wide manufacturing process improvements through the National Shipbuilding Research Program; and incentivizing capital investment in facilities where warranted. There are additional mechanisms to 

improve affordability, which have required or will require congressional support: 

• Strong industry performance in restarting DDG–51 production has yielded substantial savings for the fiscal year 2011/2012 ships placed under contract. The Navy is targeting additional savings through the competitive fiscal year 2013 to fiscal year 2017 MYP. 

• Provision of a Shipbuilding Capabilities Preservation Agreement (SCPA), 

to improve a Navy shipbuilder’s competitiveness for commercial work, is 

particularly effective for auxiliary shipbuilders that possess the skills and 

capabilities common to both Navy and commercial shipbuilding. Navy has 

signed one SCPA agreement in the recent past. 

The Navy will continue to aggressively pursue the mutual objectives of improving 

the affordability of our shipbuilding program and increasing the strength of our 

shipbuilding industrial base, and is committed to working closely with Congress on 

these efforts. 

18 

SHIPBUILDER PERFORMANCE

The Navy continues to work with the shipbuilders to improve performance on current contracts and to invest in process improvements to maximize affordability on 

current and future contracts. The majority of the Navy’s shipbuilding contracts are 

now fixed price type contracts, where industry bears a significantly increased responsibility for risk. The Navy, in conjunction with the shipbuilders, has been and 

continues to identify specific areas in design and build specifications that have the 

most potential to realize savings across multiple platforms. The four highest priority 

functional areas being examined are hull and structure, electrical systems, piping 

systems, and paint and coatings. Some of these will yield near-term cost savings 

while others will yield even more significant cost savings over a longer period of 

time. 

The Navy’s Supervisors of Shipbuilding (SUPSHIP) work closely with the shipbuilders to address cost, schedule, and performance issues while providing on-site 

oversight of the shipbuilder’s quality management systems. There are numerous examples where multiple initiatives were implemented to address quality issues but 

some specific examples worth highlighting are associated with the construction and 

delivery of the San Antonio-class ships. Welding and production processes were significantly revised to improve quality and the workforce was retrained and recertified 

to ensure consistency throughout all of the shipbuilder’s facilities. More stringent 

procedures were developed and implemented to improve the removal of contaminants from the ship’s lube oil system. In addition, these procedural changes were 

accompanied by design improvements to the lube oil filters and strainers on all San 

Antonio-class ships. The shipyard also took steps to improve cleanliness in the pipe 

shop which will improve quality in the installation of pipe on the ships As a result 

of these and many other initiatives, contractor quality continues to improve with 

each ship delivered to the Navy. 

The Navy is focused on compliance with the fundamental processes of structural, 

electrical, piping, and paint and coating work. Striving to better understand quality 

trends, the Navy is engaging earlier with the shipbuilder on potential cost and 

schedule issues through the use of earned value management and other schedule 

and cost tools. 

Acquisition Workforce 

The Navy has embarked on a deliberate plan to strengthen the acquisition workforce over the FYDP. The Navy’s position is to continue its current plan as stated 

in the Department of Navy (DoN) Acquisition Workforce (AWF) Strategic Plan, to 

rebuild the DoN civilian acquisition workforce. In the past 2 years, the DoN AWF 

has hired approximately 4,300 full-time equivalents and has improved its education 

and training programs in shipbuilding program management and contracting. 

The Navy continues to emphasize the need for a professional cadre of onsite 

SUPSHIP personnel co-located with the Nation’s shipbuilding industrial base in an 

oversight role. Over the last year, the number of onboard SUPSHIP staff reached 

1,146. This marks a continued growth trend of SUPSHIP staffing from approximately 900 onboard in fiscal year 2007 and marks another successful year of achieving hiring targets, as SUPSHIPs have done every year from fiscal year 2007 to fiscal 

year 2011. Preserving these staffing gains made over the past 4 years is critically 

important to ensuring sufficient oversight and management of the Navy’s shipbuilding programs. 

Summary 

The Navy continues to instill affordability, stability, and capacity into the shipbuilding plan and to advance capabilities to become a more agile, lethal and flexible 

force to address the challenges and opportunities facing the Nation. The carrier 

force will sustain a 5 year interval for construction starts to better align delivery 

of the Gerald R. Ford-class ships with the ends of service life for the Nimitz-class 

ships while ensuring the Navy maintains an eleven carrier fleet. The submarine 

force will continue to be preeminent in the world as the Navy continues to invest 

in Virginia-class submarines via multiyear contracts, submarine modernization, and 

prepare for replacement of the ballistic missile capability. The plan also continues 

DDG–51 construction via a multiyear contract to leverage a stable design and mature infrastructure to achieve affordable capabilities. LCS will address specific and 

validated capability gaps in Mine Countermeasures, Surface Warfare, and Anti-Submarine Warfare, and the selection of both LCS designs leverages the unique capability delivered by each platform while providing stability to the shipbuilding infrastructure. The Navy’s amphibious force will remain capable with full funding of LSD 

mid-life upgrades, replacement of the LSD–41/49-class ships with LSD(X), construction of the LHA Replacement Class, and successful deliveries of the LPD–17-class 

ships. Finally, the Navy is investing in the auxiliary fleet with the procurement of 

19 

the last JHSV and four MLPs, with variants supporting the MPS and the AFSB demands. 

The Navy and Marine Corps, on the high seas and closing foreign shores, stand 

ready to answer the call of the Nation. We thank you for your continued support 

and request your approval of the fiscal year 2013 President’s budget request for 

shipbuilding. 

Senator REED. Thank you very much, Mr. Secretary, for an excellent statement. 

Mr. STACKLEY. Thank you. 

Senator REED. Let me go back to the issues in terms of submarines. As you indicated, we had reached some significant economies, producing the ships under budget, on time and two per year. 

Now we’re in a situation where we’re going to skip a year. That 

will have implications on the ability to maintain these efficiencies 

in the shipyards and it also will cause some disruption, which usually ends up in paying more ultimately than paying less. 

I know you had to make some very difficult decisions, but I wonder if there is a way to restore a second boat to fiscal year 2014 

or to mitigate the effects of the delay. Can you describe in more detail, if you feel it necessary, the reasons for the delay and what 

could be done to fix this issue, and is legislative authority necessary? 

Mr. STACKLEY. Yes, sir. Let me just punctuate your assessment 

of the value of two per year and the efforts that were taken to get 

to that rate of production and our intent and desire to be able to 

sustain it. First in terms of force structure requirements, our requirements for attack submarines is laid out fairly well in the 30- 

year shipbuilding report and states squarely that 48 attack boats 

is what the Nation needs in order to meet our requirements for the 

near-term and long-term. 

Today we have greater than 48 boats in the force. However, in 

order to sustain 48 boats, if you do the math, assuming a service 

life of about 33 years, you need to be building at a rate of 1 to 2 

per year sustained. We’ve endured a long period of submarine construction when, in fact, we were building at one and in certain 

cases zero submarines. So while today we have a force greater than 

48 boats, when you look ahead to the late 2020s and 2030s our 

force structure will dip down as a result of that past low rate of 

submarine construction. 

So two per year, not only is it beneficial from an industrial base 

perspective, but it’s critical from a force structure perspective that 

we sustain two per year in the near-term as best as possible to 

minimize that longer-term force structure gap. 

Now, why are we staring at a one-boat year in 2014? This is simply the hard line that came with the new top line. In the Navy’s 

budget submit, and frankly with the Office of the Secretary of Defense (OSD) throughout the budget process, I will state that everything that could be done within the top line was done to hold onto 

that second boat in 2014. But in the end we had to compromise on 

that second boat in order to balance, and in doing so we moved it 

from 2014 to 2018, kept it within the multiyear, which mitigates 

some of the impact. But it was perhaps one of the harder decisions 

that the Navy had to deal with. 

Let me address the next part of your question, which is what are 

our alternatives at this point. When we were faced with making 

20 

that move, first as it was important to keep it in the multiyear because we want to at least work with industry to level load to the 

extent possible that dip in 2014, but we also looked at the funding. 

In order to fully fund a second boat in 2014, it would require, first, 

advanced procurement in 2013, plus the balance of full funding required in 2014. 

That total is north of $700 million. It’s approximately $777 million in 2013 that would be required, as well as a balance of greater 

than $1.2 billion in 2014. We couldn’t get there within our top line. 

We couldn’t get there. 

When it comes to executing at shipbuilding, the reality is that, 

while we fully fund ships, our outlay rate is drawn out over a 

longer period of time. So for a particular program such as aircraft 

carriers and large-deck amphibs, where there’s such a significant 

spike in the budget in the full funding year, the Navy, working 

with OSD, the Office of Management and Budget (OMB), and Congress, have adopted an incremental funding approach that 

smoothes out that spike, because what we need to do is ensure that 

our outlays and obligation rates are covered by the funding in any 

particular year. If we go to that alternative funding mechanism, 

then it smoothes out the spike. 

In many respects, we’re looking at a similar circumstance here 

with Virginia. That additional boat in 2014 created a spike for us 

in the budget and, absent the ability to other than fully fund the 

boat, we had to push it to the right. So we have looked at what 

it would take to restore the boat within the top line, and a couple 

of things happened. 

First, when you add the boat, in addition to addressing the requirement, you generate savings associated with additional economic order quantity material, savings associated with sustained 

learning curve performance, as opposed to a potential negative 

learning curve performance, and savings associated with improved 

planning. 

[The information referred to follows:] 

There are two alternative proposals recommended, both using incremental funding, to restore the fiscal year 2014-2 ship making the Block IV contract a 10 ship 

MYP. One proposal requires $778 million of fiscal year 2013 Advanced Procurement 

funding and incremental funding authority for the fiscal year 2014–fiscal year 2016 

ships. The second proposal is Total Obligation Authority (TOA) neutral and requires 

incremental funding authority for the fiscal year 2013–fiscal year 2018 ships. As fiscal year 2013 is the last year of the Block III contract and the Navy is currently 

contractually required to fully fund these ships, a contract modification would be required to amend the Block III contract. In both options, the addition of a second 

ship in fiscal year 2014 to the Block IV contract will result in an incremental cost 

of $1,736.7 million across Block IV, which is funded via incremental funding authority and largely TOA neutral. Program of record and both options are depicted in the 

attached chart. 

21 

Mr. STACKLEY. Every step along the process you generate savings 

by having that second boat in 2014. If you then look at the total 

Virginia program and you look at the bottom line for the total Virginia program and you assess, without tripping over full funding 

versus incremental funding discussions, at the bottom line what is 

the net cost impact of adding a second boat in 2014, it’s near neutral. 

In other words, the net savings associated effectively adding the 

boat by pulling it to the left outweigh the upfront costs associated 

with that. The trouble is that in the budget framework requiring 

full funding we don’t have that top line to do that. 

So the long-term savings associated with the second boat balance 

out the upfront investment required by the second boat, but within 

the constraints of our budget we were unable to get there. 

Senator REED. You might be able to help us help you get there 

through appropriate legislative language. Is that feasible? . 

Mr. STACKLEY. We could work with your staffs to address the 

total picture and leave that for your action. 

Senator REED. That is very fair. 

I have many additional questions, but let me recognize Senator 

Wicker so everyone gets a chance to engage, and then Senator Sessions, and then I’ll pick up with the second round. 

Senator WICKER. To pick up on some of the questions I mentioned in my opening statement, the Navy’s long-term 30-year shipbuilding plan, which indicates we’ll build ships at minimum sustaining rates—and I realize there are funding constraints that we 

all have to work with. But I’m particularly concerned about the 

proposed construction of new ships that will lead to job reductions, 

that we’re going to have to make up for later on. 

I think all five of you agree and all three of us up here agree, 

it’s irresponsible to think that we can lay off skilled workers, engiVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB

419sea1.eps
22 

neers for example, and expect them to be available when future 

contracts are awarded. These are the peaks and valleys that we’ve 

talked about. I know the Navy’s concerned about employment valleys. 

Admiral McCoy, I may just let you go first on this, and I’m sure 

Secretary Stackley will want to follow up. Is the number of ships 

currently planned enough to keep the Navy’s six major shipyards 

in business? If we don’t keep them in business, what does that do 

to competition going forward in the medium-term and long-term? 

Does it make us rely long-term on more sole source contracts because we don’t have enough yards competing? What are you gentlemen doing to think of every possible option for avoiding these employment valleys that we can’t recover from in a decade when we 

need those jobs again? 

Admiral MCCOY. Senator, thank you for the question. I think if 

you look out over certainly the next 5 years, I think the answer to 

your question is yes, there’s workload out there in each one of our 

big six shipyards, except for the actions that Huntington Ingalls is 

taking relative to their Avondale yard, so big five shipyards. There 

is that work. 

There are peaks and valleys that we do have to manage. I will 

say that three of our yards—Electric Boat, NASSCO, and Huntington Ingalls-Newport News—are also in the repair business, and 

we work very closely with those three yards to level load the repair 

business along with the spikes and valleys in the new construction 

business. One, for example, is Electric Boat. We are closely coupled 

on the nuclear submarine repair business with the naval shipyards. 

Today, for example, on any given day we may have from 200 to 300 

Electric Boat employees anywhere around the country in one of our 

four naval shipyards helping us with peaks and valleys, so that we 

minimize overtime in naval shipyards and things like that. 

We are constantly looking across the industrial base at those 

peaks and valleys to see where, between post-shakedown availability work, where it makes sense repair work, and those kinds of 

things, Senator. 

Senator WICKER. Let me interject, and I know you haven’t given 

a complete answer yet. Is the repair work at all a possibility for 

Pascagoula? Is that something you’ve discussed at all? 

Mr. STACKLEY. May I? 

Senator WICKER. Please. 

Mr. STACKLEY. Yes, sir. First, when it comes to repair work, 

there is a homeporting policy that we’re not going to ship a ship 

out of its homeport for limited repair availabilities. What that 

means is for Huntington-Ingalls Industries (HII) on the Gulf Coast, 

they would only have the opportunity to compete for major repair 

availabilities that are bid coast-wide. Those are limited in number. 

But when we bid coast-wide it is an open competition. 

So it’s up to in this case HII to choose to bid. The back end of 

that is would they be competitive in the bid? In other words, if you 

have a ship construction yard that’s competing against a repair 

yard and you look at the total associated with the competitiveness, 

the rate structure, the overhead costs that you carry with a shipbuilder, they have to assess whether or not they’re competitive to 

determine whether they will compete for those bids. 

23 

Senator WICKER. So it’s not a conversation you’ve really had with 

Ingalls in Pascagoula? 

Mr. STACKLEY. Actually, we have talked with regards to major 

modernization for combatants, and particularly the Aegis modernization program when it was in its formulation stage, whether 

or not the building yards would have the opportunity to bid. There 

have been alternatives that we looked at and continue to look at. 

But today those availabilities are captured within the 6-month 

timeframe of a homeport policy, and so it’s been beyond their 

reach. 

Senator WICKER. Admiral McCoy, I did cut you off in mid-statement. So I want to give you an opportunity to complete your 

thought. 

Admiral MCCOY. That was basically what I had to say. To sum 

up, I’d say, yes, over the next 5 years we see enough work for the 

yards. There will be peaks and valleys and we are working with 

them all the time to see what legitimate other work we have that 

can help them through that period, where they can be competitive 

as well. 

Senator WICKER. Okay. Let me ask you this, Secretary Stackley. 

Secretary Napolitano was testifying March 8 before the Senate Appropriations Committee and she was asked by Senator Murkowski 

about the Coast Guard’s future shipbuilding plans. Let me just 

read her response. The Secretary said this: 

‘‘In light of what DOD is doing with respect to its budget 

reductions under the BCA, we are coordinating with naval 

operations, looking at what the Navy is doing with its assets, then really correlating on what 7 and 8’’—meaning 

National Security Cutters 7 and 8—‘‘would do should they 

be built. We think that, given where we are with the budget and the fiscal environment, before moving on numbers 

7 and 8 we want to make sure we’re coordinating with the 

Navy.’’ 

The 30-year shipbuilding plan does not mention Coast Guard cutters. Can you explain what coordination there is and what Secretary Napolitano could have been talking about? Is there coordination between the Services, DOD, and the Department of Homeland 

Security on ensuring that the shipbuilding rate is meeting our commanders’ requirements? 

Mr. STACKLEY. Yes, sir. There’s going to be a two-part answer to 

this. I’m going to answer the first part and ask Admiral Blake to 

answer the second part. The two parts have to deal with a MOA 

between the Navy and the Coast Guard when it comes to force responsibilities, that I’ll ask Admiral Blake to address. 

The other part of the coordination side is on the procurement 

side, and there’s a very healthy dialogue in place between the Navy 

and the Coast Guard regarding the national security cutter, as well 

as the other elements of the Coast Guard recapitalization program. 

So we have detailed discussions in terms of how we the Navy can 

help the Coast Guard in its procurement efforts while separately, 

at the CNO and Commandant level, there’s the larger discussion 

taking place regarding how the Navy and the Coast Guard operate 

together, not just in terms of missions and capabilities, but Service 

to Service. 

24 

Admiral BLAKE. Sir, the Navy and the Coast Guard, and the 

Navy and all the Services, we have a series of meetings, we call 

them warfighter talks, in which we discuss areas in which we can 

find commonality. One of the challenges we have is the different 

requirements that each of the Services have. Where we can find 

commonality among requirements, then we proceed down that 

path. 

For example, if you look at Coast Guard ships, Coast Guard 

ships have many of the same systems that we have on Navy ships. 

But where we have a tendency to diverge as we’re heading down 

that path is because of the differing requirements that each of the 

Services bring to the table. But for both efficiency and effectiveness, we attempt to find as many common areas as possible and 

then go down those paths. 

Senator REED. Thank you, Senator Wicker. 

Senator Sessions. 

Senator SESSIONS. Thank you. 

Secretary Stackley, the Secretary of the Navy and the CNO testified before our full Senate Armed Services Committee and the Secretary of the Navy has met with me, describing the improvements 

made with the LCS in its cost and schedule. Recent press articles 

describe problems with the LCS, including Defense News on April 

5 and the New York Times. 

What is your assessment? It seems to me these articles are basing their concerns on older data. Maybe we’re not getting the word 

out about the progress that I understand is occurring there. The 

LCS is such a critical part of the Navy’s future. It has fewer sailors, higher speeds, less fuel cost, and remarkable capabilities. 

If you would, tell us where you think we are in that system? 

Mr. STACKLEY. Yes, sir. I’ll look to share this response with Admiral Blake. But let me start with the platform. The history of the 

startup of this program is well known. I’m not going to replow that 

turf there. However, as I mentioned in my opening remarks, we 

have the first follow ships, one near complete. The LCS–3 up north 

is completing her builder’s trials and getting ready for acceptance 

trials to be delivered this spring. 

Near textbook. It’s going extremely well in terms of schedule and 

being on target, and in terms of quality of construction. That’s the 

result of not just plowing in the lessons learned from the lead ship, 

but the significant investment that was made by that shipyard to 

support this construction program. 

Separate and very similar on the Gulf Coast. Austal, which is 9 

to 12 months removed from the construction up north, simply by 

the sequencing of the contracts. Again, plowing the lessons learned, 

investing in the facilities, accomplishing the training that needs to 

be accomplished for the workforce, and cleaning up the design. 

We’re seeing the same rate of improvement on the Gulf Coast. 

So both construction efforts north and south are quickly capturing lessons learned from the lead ship, making the investments 

necessary, and on the production ramp that we need to see to support the 55-ship program. That’s the construction side. We see stability, we see steady improvement, and we see good cost returns on 

the front end of this dual block buy strategy. 

25 

Now we have to be talking about mission packages. The mission 

package development efforts, we have today three-plus mission 

packages in development: mine countermeasures (MCM), anti-surface warfare, and anti-submarine warfare (ASW). As well we have 

a search and seize, a small module that we’ve put to work. They’re 

conducting development testing to support their IOC milestones in 

the 2014 through 2016 timeframe. 

This spring, for example, we conducted the first shipboard demonstration of the MCM mission package on board the Independence, working down at the Navy’s Warfare Center in Panama City. The 

first time we brought all the elements that make up the first increment of the MCM package to the ship, and operated with sailors. 

We learned some things, but we also demonstrated the ability to 

conduct these mission scenarios using the unmanned and remote 

operated vehicles that make up a large part of the LCS mission 

package. 

So the development and testing for the mission packages, in that 

case MCM, separately the anti-surface warfare mission package, 

testing, and in fact we’ll be outfitting the LCS–1 with the first increment of the anti-surface warfare mission package when it deploys next year to Singapore, and then development of the ASW 

mission package, all moving forward. 

So that effort lags the construction timeframe by deliberation so 

that the ships and mission packages are all IOC-ing in the middle 

of this decade. 

The third important piece is fleet introduction. So we have one 

lead ship on the West Coast, LCS–1, and LCS–2, right now making 

its way to her homeport in San Diego. We’re on the front end of 

fleet introduction at the same time. As with any new ship class, we 

learn a lot. We also train up a sailor force that becomes proficient 

in this ship class. 

We’re on the front end of this program. I don’t spend too much 

time studying the reports that come from the press other than to 

be aware of what information is out there and try to correct any 

misperceptions. But she’s going well. We’re learning a lot. We look 

forward to deploying LCS–1 next year, and we have a lot of work 

that we have to do to make sure that when she deploys she is well 

supported and succeeds in all the mission areas that we assign to 

her. 

Senator SESSIONS. You don’t see any cost or technical problems 

of great concern to you at this point? 

Mr. STACKLEY. I think cost is under control. I think I’ve addressed that fairly well. 

Senator SESSIONS. I thought I heard you say the 10th ship would 

perhaps be half the cost of the first ship? 

Mr. STACKLEY. Inside of our block buys, each 10th ship, in other 

words, for each shipbuilder, when you look at the fixed-price option, that’s a 2015 ship. When you look at a fixed-price option for 

those 10 ships, they’re at about half of the lead ship’s price. You 

have to take escalation out and put them all in the same base year 

dollars. But it’s a very impressive learning curve that these shipyards have committed to inside of those fixed-price contracts, and 

that they’ve put the investment behind to ensure that they hit the 

numbers. 

26 

Senator SESSIONS. The Navy hasn’t changed its view of the important role it would play in the future fleet? 

Mr. STACKLEY. No, sir, and I think I should allow Admiral Blake 

to address that. 

Senator SESSIONS. Admiral Blake. 

Admiral BLAKE. Yes, sir. I would tell you the LCSs are replacing 

three classes of ships. They’re replacing the PCs, they’re replacing 

the MCMs, the minesweepers, and they’re replacing the FFGs. I 

think that alone just gives you an idea of how critical these are to 

the future of the Navy. We’re being able to replace three classes 

of ships with a single class because of the fact that we are going 

to modularity. 

I’ll just anchor for a second on the Avenger-class, the 

minesweeps. They’ll be starting to come out of service in fiscal year 

2019. When those ships start coming out, we’ll be bringing the 

LCSs on line. One of the big or key transformations in there is that 

we’re going to be able to get the man out of the minefield. In the 

current technology, we have to put the man in the minefield in 

order to be able to clear it. When we go to the LCS with its 

modularity, we will be able to take the man out of the minefield. 

We’ll be able to use unmanned vehicles. We’ll be able to use helicopters, which we currently use, but we’ll be able to get that individual out of there. So we’ll be able to keep our sailors out of 

harm’s way, or out of harm’s way as opposed to where they currently are, which is in the field. 

You can look at each of the modules that are coming on line, 

whether it’s the surface one or the ASW module, and I think you 

would see that these are absolutely critical, that we have to fill in 

for these as those assets come out of the fleet. 

Senator SESSIONS. How old is the current minesweeper fleet? 

Admiral BLAKE. I’d have to get you the age. But they’re coming 

to the end of their expected service lives, starting with the ones in 

fiscal year 2019. But I’d have to get you the exact age on all of 

them. 

[The information referred to follows:] 

The current minesweeper fleet is between 18 to 25 years old. The USS Avenger 

was the first ship commissioned in 1987, and the USS Chief was the last ship commissioned in 1994. 

Senator SESSIONS. I was on one a number of years ago. It was 

pretty old. 

Admiral BLAKE. Yes, sir, they are old. 

Senator SESSIONS. That was a number of years ago. 

Admiral MCCOY. Senator, may I jump in on your question about 

technical concerns? 

Senator SESSIONS. Yes. 

Admiral MCCOY. One of the things about LCS was the first two 

ships, in fact, are research and development (R&D) platforms. They 

were bought with R&D funds. Normally on a new ship design, we 

have a fairly robust R&D program ahead of the ship. These were 

our R&D platforms. In fact, if you look at LCS–1, we went from 

concept of the ship to deployment in 7 years, which is a record for 

the Navy. 

On every single one of our new classes, even ones that we put 

R&D money in upfront, we learn technical issues on the first of the 

27 

class, that we feed back into the subsequent ships. We’ve learned 

on LCS as well. But if we take LCS–1, it did a Fourth Fleet deployment, then took it out to the Rim of the Pacific (RIMPAC) Exercise, 

took it out to Hawaii, rode it very hard for 25 days out there, most 

of the time at very high speed, and brought it back. 

We’ve had some technical issues, but nothing that would tell us 

that the platform itself is fundamentally unsound or will not be a 

very well performing ship in service. Every time we find something, 

we fold it back into the construction line, sir. 

Senator SESSIONS. Thank you. 

Mr. Chairman, thank you. We are concerned about the size of the 

fleet and that budget-driven fact is a problem and, I think, as you 

answered, Mr. Stackley, and our chairman here mentioned, sometimes we just have to find the money, Senator Reed, because it 

costs so much to delay and put off the construction. It has so many 

ramifications not to stay in track at an efficient level of production. 

Mr. Stackley, we value your judgment and insight, and I hope you 

will keep us posted. 

Thank you. 

Senator REED. Thank you very much, Senator Sessions. 

We’ll begin a second round. If necessary, we’ll do a third round. 

These are all very good questions. 

I think we’re focusing on some critical issues in the shipbuilding 

program. Last year we had a very, very good hearing. Admiral 

McCoy attended and Captain Galinis from the Gulf Coast was 

there. Mr. Secretary, you were there also, among others. At that 

hearing we recognized that there were some serious problems with 

quality and cost, but that you were seriously engaged, Admiral 

McCoy and your colleagues, in dealing with the cost issues and 

dealing with the quality issues, too. 

So could you give us an update of the measurable progress we’ve 

made going forward in these shipyards and assurances that we’ve 

now reached a point where costs are under control and quality is 

acceptable? 

Admiral MCCOY. Yes, sir. Let me start with quality, because if 

you don’t get quality right you’re cost isn’t going to be right. We’ve 

worked very, very hard with both the shipbuilder on the Gulf Coast 

as well as my Supervisor of Shipbuilding Office. Since 2007 or so, 

I’ve increased the staff of my team down there by about 20 percent. 

One of the things we’ve done over the last 3 years very hard down 

there is get the Supervisor of Shipbuilding as well as the shipbuilder focused on fundamental, everyday deckplate compliance. 

We look at four key areas: piping, electrical, structural, and coatings, areas where we had the problems with the LPD–17 class, for 

example. In addition, we took the lessons learned from the fleet introduction of the LPD–17 class and we made a significant number 

of design changes and we folded those back into the line, and some 

of those we still have to backfit onto our ships, principally in the 

area of how do we keep blue oil clean and making smart system 

design changes there. 

Since those efforts, we delivered LPD–22, the soon to be USS 

San Diego, it will be commissioned in about a month. It was delivered in December. That ship went through the most rigorous acceptance trials we’ve had to date. In fact, we added what I call an 

28 

endurance trial, it was actually a third trial after the builder’s trial 

and acceptance trial, and then an endurance trial, where we ran 

the ship’s main propulsion diesels as well as the ship service electrical diesel generators, ran them very hard for a period of time, 

and then we came back in port, we rolled out bearings, did inspections, and in fact verified the oil was clean, no scoring, that kind 

of thing. 

San Diego just made the transit from the Gulf Coast and reached 

its port of San Diego about 2 weeks ago. So it was very successful. 

In fact, the remarks from INSURV in terms of the number of deficiencies in their report was the best ever LPD–17 class. 

On top of that, in the last 2 years I’ve brought an outside audit 

team in three times—they’re going back in this fall—of outside experts, not only to audit the shipbuilder, but also the Supervisor of 

Shipbuilding. 

So I think I am satisfied that on any given day fundamental 

compliance is happening back down at the yard. We look at those 

metrics every week, I have my folks intently focused on going out 

and doing inspections, as well as the yard, and we compare those 

notes, and I’m satisfied at this point, and we’re now in a 

sustainment mode to make sure we don’t lose ground. 

I think cost is one area where we still have work to do. The cost 

of compliance of quality in the yard is still high and the yard is 

working on that. We are working with the shipbuilder on moving 

more work to the left in the build cycle, more outfitting, to get the 

cost down. We’re working with them on the material builds in 

terms of better pricing and that kind of stuff. 

We still have a ways to go with costs and along with that schedule. But I’m satisfied right now that quality is where it needs to 

be. We just need to drive the cost of obtaining that quality, continue to drive that down, sir. 

Senator REED. Thank you. Secretary Stackley, who shares those 

costs? This is part of the contractual arrangements going forward, 

but also these were bid, there was the presumption that they could 

deliver quality with the costs that they stated. Those costs are still 

challenging. So how are we not only reducing costs in the present 

time, but as we go forward, with our contractual arrangements 

making sure that we don’t absorb costs that should be properly 

done by the contractor? 

Mr. STACKLEY. Yes, sir. Generally speaking, each shipbuilding 

contract has its own terms and conditions and cost structure. So 

who pays or what the share is for those costs, it’s a contract-bycontract discussion. However, as I mentioned in my opening remarks, the 38 ships that we’ve put under contract since December 

2010 are all fixed-price ships. Some of those are firm-fixed-price, in 

which case all of the costs of rework or any cost growth is on the 

shipbuilder’s side of the ledger. 

Most of those are a fixed-price incentive contract, which means 

that there is a share line associated with cost growth, and in almost every case it’s a 50–50 share line, which states that, regardless of the cause of the cost growth, if the shipbuilder’s costs increase we share those costs 50–50 up to a point of total assumption, in which case it converts basically to a firm-fixed-price contract at that point in time. 

29 

We believe that’s the right cost structure and it’s proven very effective over our shipbuilding history to control costs. 

The several steps to this are: before going into the contract, make 

sure your requirements, your design, your specs are all nailed 

down, so there’s not unnecessary churn that’s driving cost growth; 

and then make sure of processes and procedures, the build plan, 

that contribute to controlling quality are in place; and then in the 

event of additional cost growth, it does appear on a 50–50 share 

line up to the ceiling. 

In the case of the ships that Admiral McCoy discussed on the 

Gulf Coast, those ships are at ceiling, in which case the cost growth 

was the burden of the shipbuilders beyond the ceiling. 

Senator REED. Thank you. 

Let me turn quickly now to the Ohio replacement. As we mentioned, Secretary Kendall was here and he conceptually agreed 

that, because of the role of the Ohio-class replacement in the strategic triad, that this is not strictly a Navy program; this is a DOD 

program, a national program; and that he seemed to be open to efforts to provide support for the Navy. 

It goes back to the question that Senator Wicker posed, too. At 

some point you could have one class of ships that are necessary, 

but crowd out other necessary ships without this type of DOD support. 

Are you actively working with DOD to develop financial support 

for the Ohio-class replacement? 

Mr. STACKLEY. Sir, I’m going to say the answer is yes. You have 

to recognize that actively working with DOD on a procurement program that’s 8 years away, it’s hard to nail something down today 

that when you get out there it will still be in effect. 

So for today, we’re talking about planning. Inside of the 30-year 

shipbuilding plan that we submitted as a report to Congress, we 

lay out today’s force structure, the procurement plan over the next 

30 years, and what it would cost to support that procurement plan. 

In fact, OSD has provided for planning purposes some headroom in 

the years of the Ohio replacement construction program to give the 

Navy the ability to better accommodate it. That’s not full headroom. That’s simply if you look at the average shipbuilding investment between now and the start of the Ohio replacement program 

and then you look at the period of the Ohio replacement program, 

there’s about a $2 billion per year hedge that’s been allowed for the 

Navy for planning purposes. 

So today, in the long-term planning phases we provide some 

room for working with OSD, provide some room for planning purposes. But we have to relentlessly hammer on this issue between 

now and when that becomes real money inside the FYDP, or what 

we’ll be looking at is a shipbuilding plan that’s not executable. 

Senator REED. Admiral Blake, please. 

Admiral BLAKE. Sir, when we put the 30-year plan together, one 

of the good-news items that comes out of that is the fact that we 

highlight issues like the fact that when you’re in that second period 

of 5-year defense plans from the 2019 period out, we highlighted 

the fact that the Shipbuilding and Conversion, Navy plan at that 

point will go up over $4 billion. It will go from a $15.1 billion averVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
30 

age, which we’re currently in in this FYDP and the next, it’ll go 

up in excess of $19 billion. 

So what we end up doing is, as we point that out to DOD, they 

recognize, as you saw in the plan, that there is a significant challenge for the Navy because that is such a steep curve as we’re trying to balance across the entire portfolio, and that there will have 

to be something done in order to be able to keep a balanced program. 

Senator REED. Thank you very much. 

We’ve been joined by Senator Blumenthal. We recognize Senator 

Blumenthal for his questions and then Senator Wicker. I have 

other questions and I’ll finish up. Senator Blumenthal. 

Senator BLUMENTHAL. Thank you. Thank you, Mr. Chairman, 

and thank you all for your great work in DOD on behalf of our Nation and the men and women under your command. 

I want to follow up on the questions that have been asked about 

the Ohio-class, in particular whether the 2-year delay will achieve 

substantial R&D progress that will in the long run save money as 

well as advance the superiority of the weapons system. Is that your 

view? 

Mr. STACKLEY. Yes, sir. If I could simply outline what is being 

done inside the 2-year delay. First, as we look at this we have critical path activities that need to support the start of construction for 

the Ohio replacement program. So when we lay out the timeframe 

between now and the 2021 procurement, we keep the critical path 

activities on track. 

In total, between now and that start we have increased R&D investments. The R&D budget between now and 2021 is more than 

a billion dollars above what it would have been for a 2019 start. 

So there is R&D wholeness that will contribute to continued development, critical path activities, greater design maturity, and overall risk retirement going into the start of construction of the Ohio 

replacement program. 

There’s also a parallel program with the United Kingdom. 

They’re replacing the Vanguard, their strategic deterrent submarine, at about the same timeframe. So we have an effort, referred to as the Common Missile Compartment, which is common 

to both the United States and the United Kingdom’s submarine 

programs. That is staying on track to the United Kingdom’s schedule. 

What that means is that is slightly ahead of the U.S. submarine 

program now. That means that that entire effort and the risk associated with it will be reduced for the United States by virtue of the 

fact that we’ll be staying on the United Kingdom’s schedule. So 

there’s direct improvement to risk management associated with the 

Common Missile Compartment. There’s direct improvement to retiring risk in developments through the total of additional R&D investment during the timeframe. 

What’s absolutely critical is that we manage the money and the 

time wisely, so that when we get to the start of construction for the 

Ohio replacement program we are at a higher level of design completion, a higher level of technology maturity, and we’ve taken advantage of this time and opportunity to find those ways to reduce 

cost in the program. 

31 

Senator BLUMENTHAL. My understanding is that this 2-year 

delay continues our schedule to be in sync with the British; is that 

correct? 

Mr. STACKLEY. As a result of the 2-year delay, the United Kingdom’s successor program is ahead of the U.S. Ohio replacement 

program. The parts of the respective programs that are common, 

the Common Missile Compartment, which is a section of the ship 

that includes the strategic weapons system, that is staying on 

schedule to support the U.K.’s successor program. 

Senator BLUMENTHAL. Going to the Virginia-class submarine, I 

have followed a number of the questions and your answers in response to Senator Reed’s inquiries about it. Number one, I just 

want to second that I hope that perhaps this subcommittee and the 

full committee and Congress can work with the Navy in seeking to 

restore that funding for the boat that was pushed to 2018 because 

of the potential savings that you have mentioned in connection 

with building that second submarine in 2014. 

If there is a way to avoid the budget spike in cost that right now 

has caused the delay, if there is some accounting or legislative language that could be devised, I’m very eager to join with Senator 

Reed on working on that. 

Mr. STACKLEY. If I can just state it as squarely as I can, today 

you are working on the 2013 budget. The options before you include adding money to the Navy’s budget to support the advance 

procurement of a second 2014 budget, and the total there is north 

of $700 million. If you do that, that leaves the Navy with about a 

$1.2 billion bill in 2014, which is the same problem that we confronted in building the Program Objective Memorandum (POM) for 

fiscal year 2013, that we don’t have the headroom for that $1.2 billion. 

That would be a significant reduction in the bill for the Navy, 

but it does still leave us with a problem in 2014 that we’d have to 

address in the POM. 

The other alternative, frankly, is incremental funding, which is 

not in accordance with policy. Policy would dictate that we fully 

fund each boat in the multiyear procurement. I’m simply going to 

state that these are extraordinary times. This is an extraordinarily 

important program and this is a fleeting opportunity. If we don’t 

capture that second boat in 2014, the opportunity cannot be recovered in terms of force structure, in terms of savings potential, and 

in terms of the industrial base. 

Under these extraordinary times, it is perhaps appropriate that 

the Navy and Congress look at whether or not this is the right time 

to provide an exception to full funding. It has its drawbacks, going 

to an incremental funding approach. We explore it and we would 

welcome a discussion with the Hill in that regard. 

Senator BLUMENTHAL. I would welcome a discussion as well. I 

very much appreciate your putting it so squarely and, I might say, 

eloquently, and I think that the burden is on us to recognize that 

we are in extraordinary times. We face extraordinary challenges, 

but also extraordinary opportunities to make sure that we meet our 

obligations, take advantage of the opportunities to secure our undersea warfare capability at the least possible cost in the long 

term. 

32 

I welcome your responses to Senator Reed and just now to myself, and I hope to follow up with you. 

Mr. STACKLEY. Sir, the only thing I think it’s important to add 

is, the Navy’s willingness to have this discussion is underpinned by 

the strong performance of the Virginia program. Otherwise we 

wouldn’t even consider it. It’s the strong performance on the Virginia program. It’s the fact that we, the Navy, DOD, and we look 

for Congress to follow, are willing to make the long-term commitment associated with multiyear procurement, that that offsets concerns associated with incremental funding during that period. 

Senator BLUMENTHAL. I think you’ve just stated a very critical 

factor in this discussion, which is that the performance under this 

program ahead of schedule, under budget, consistently, and reliably 

is another extraordinary circumstance that has to be part of this 

discussion to justify incremental funding. So I welcome your responses. 

Thank you. 

Senator REED. Thank you, Senator Blumenthal. 

Senator Wicker. 

Senator WICKER. Thank you. 

Admiral Burke and General Mills, from an operational perspective, the Navy budget calls for decreases in large amphibious ships, 

among other categories. In my opening statement, I mentioned the 

requests from combatant commanders for amphibious ships has increased over 80 percent in the last 5 years, a very dramatic number. What is the reason for that and what will be the impact if 

these requests are not met? 

Admiral BURKE. Senator, thanks for the question. You’re right, 

the combatant command (COCOM) demand signal has gone up significantly, to the point where if we were to meet all their requirements it would take a Navy of greater than 500 ships. I certainly 

am not here to begrudge the COCOM demand signal because they 

have challenges that they’re trying to deal with. But we can’t meet 

all their demands. 

There is a process in DOD, run by the Joint Staff, called the 

global force management process, by which they take in the 

COCOM requirements and adjudicate that along with the forces we 

have to come to a reasonable allocation of force. That’s a process 

we’re dealing with today. We’ve been using that process for a number of years and I would expect we will continue to use that process 

in the future to bridge the gap between supply and demand. 

General MILLS. Senator, if I could just add to that, I would say 

the increased demand really is testimony to the flexibility, the 

versatility, the value of our forward-deployed amphibious forces, 

and what it gives to those COCOMs out there who use those forces 

across a large range of mission sets. I think it’s a testimony to how 

valuable the forces are to our people out there who are doing the 

job. 

As we look at the inventory of ships, I think we look at it in 

three ways. We certainly look at it in the ships it takes to maintain 

that forward presence on a day-to-day basis, and provides those 

tools to the COCOMs for their engagement, for their crisis response, et cetera. We look at it for the ability to give training opportunities for our homestationed forces who need to train with 

33 

those amphibious ships in order to build both our skill sets and our 

interoperability with the Navy. Of course, we have been relatively 

clear in our requirement in the event of a major crisis that we need 

30 operationally available, ready amphibious ships at the point of 

action, and that we have worked with the Navy closely as they developed their shipbuilding plan over the next 30 years to take a 

look at those requirements and plan to meet them. 

Senator WICKER. General, when we drop below 30 to 29 amphibious ships, what’s that going to do to your capability? 

General MILLS. Each time we have dropped the number of our 

requirement, I think, it’s been an acceptance by us of additional 

risk at each step along the road. I think that we worked very closely again with the Navy so they understand what the requirement 

is and that they do their best to meet them. 

I think in the long range we’re poised well to meet those requirements. In the short range, there is risk. There is risk associated. 

Senator WICKER. Can you help us understand that risk? Can you 

be a little more specific? 

General MILLS. I think the risk comes in in the event of a major 

crisis it would be incumbent upon the commander who is moving 

forward to work, to decide what he could or could not bring along 

because he didn’t have the capability to load it on board the ships. 

He’d have to seek mitigation through other processes, either other 

transportation venues or he would have to simply take that risk 

that he initially on the beach would have less than what he had 

initially anticipated. 

Senator WICKER. I alluded to sequestration, Secretary Stackley, 

so I’m going to let you comment on that. Has OMB provided the 

Navy with specific guidance on sequestration? Will you be required 

to submit a revised plan that takes sequestration into account? 

Have you initiated contingency planning for sequestration? 

Mr. STACKLEY. Yes, sir. I’m going to share this response again 

with Admiral Blake. But let me describe that the first guidance has 

not come down regarding sequestration at this point in time. 

Today, we’re literally in the middle of our build for POM for fiscal 

year 2014, so we’re going through establishing the fiscal years 2014 

through 2018 baseline, which clearly starts with POM 2013 and 

makes adjustments and changes associated with the top line and 

associated with the total program. 

We’re moving forward with the POM for fiscal year 2014 build, 

in accordance with a schedule that supports submitting the budget 

to the Hill next February. We’ll complete those deliberations inside 

the Navy this summer. 

At that time, we expect OMB, working with Congress, to make 

a determination regarding sequestration planning. I can state that, 

and it’s been stated before by the Secretary of Defense and the Secretary of the Navy, that if we have to adjust our top lines to reflect 

another potentially half trillion dollar reduction to the defense 

budget over the ensuing decade, we’re looking at an entirely different force. 

The first half trillion dollars that we reflected in the 5 years of 

POM 2013 and then the 5 years beyond, that caused a lot of significant change to our program, much of which we’ve just discussed 

34 

here this morning. The notion of doubling that amount of reduction 

cuts deeply. 

Senator WICKER. That takes the minimal risk that General Mills 

alluded to and just completely blows that up by an order of magnitude at least. 

Mr. STACKLEY. You cannot take the force and the operations that 

we have in place today and are conducting today and try to imagine continuing that with another half a trillion dollar reduction to 

our defense program over the next 10 years. It’s a significant shift 

and we have not at this point in time put contingencies in place, 

although we are always looking at opportunities to be able to reduce our programs’ costs, and we are also looking at potential 

builds that will be coming down the path, but nothing to the size 

of what sequestration would impose. 

Senator WICKER. You’re going to share that answer with Admiral 

Blake, I believe. 

Mr. STACKLEY. Yes, sir. 

Admiral BLAKE. Yes, sir. Just to echo what Mr. Stackley has 

said, we have not begun any form of formalized looks at the sequestration process. That said, it is always in the back of our minds. 

Senator WICKER. I’ll bet it is. 

Admiral BLAKE. Yes, sir. 

But as also Mr. Stackley said, what we are currently doing right 

now is we are working on our POM 2014 proposal as we go forward 

in the fiscal year. I would tell you that if, in fact, sequestration 

were put in place you would have a radically different force for the 

Navy. It would be extremely different than what you currently see 

today. 

When we were putting the current budget together and we were 

coming up with the half a trillion dollar cut in the program, we 

were looking at a couple of fundamentals. We were looking at capability versus capacity. We said do we want to have this capability 

and, if so, at what capacity. Then we went to the issue of wholeness versus hollowness. We wanted to ensure that the force was 

whole, as opposed to keeping additional force structure that would 

lead us to a hollow force. 

If you take what we have already done and then you compound 

it with sequestration, the task ahead of us would be extremely difficult and, as I said, you would not end up with the force that you 

currently have today in any way, shape, or form. 

Senator WICKER. Thank you. 

Admiral Burke, go ahead, please. 

Admiral BURKE. Just to put the potential cut from sequestration 

in context, it’s about the size of the annual shipbuilding budget potentially, the full amount. It’s almost the same amount as our aviation procurement budget, and it’s about twice the size of the sum 

of our maintenance and aviation maintenance budgets. So it is significant. 

I think were it to come to pass, I believe we’d have to re-look at 

our strategy as well. 

Admiral BLAKE. Yes, sir. If I can just add to that, we essentially 

have five pots of money. You have your manpower piece, you have 

your infrastructure piece, you have your R&D piece, you have your 

operations and maintenance (O&M) piece, and you have your proVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
35 

curement piece. On the Navy’s side of the equation, procurement 

is our largest account. 

When you put something in place, as Admiral Burke was just 

saying, to the extent that sequestration would do, you can look at 

those accounts and you would see that it’s either in your O&M account, or it’s in your procurement account. The only other big account we have is our manpower account. Infrastructure and R&D 

are relatively small compared to those three. Manpower is a mustpay bill. We have to pay the people. So that takes that one off the 

table. 

Then you end up going to the two accounts. It’s either your O&M 

account or it’s your procurement account to cover something like 

that. 

Senator WICKER. Thank you very much. 

Let me just observe, Mr. Chairman and Senator Blumenthal, I 

voted for the legislation that puts sequestration in place. I think, 

like most of the people who voted yes, I voted for it believing in 

my heart that we would have the leadership in this city both in the 

administration and in Congress to come to grips with where the 

real spending is, to come to grips with the fact that we need a different taxation policy that provides for greater growth, but also 

that we have 60 percent of the budget plus that’s off limits every 

year. We don’t look at it every year in the appropriations process. 

It’s on automatic pilot. 

I believed that we would be able to come to grips with that. To 

date we’ve not. We’ve either not had the leadership or the will in 

this city to come to grips with those issues. While sitting here in 

this room it’s unthinkable that we would get to actually this brinkmanship of sequestration, I don’t know if it’s any more or less unbelievable than it was last year when I actually voted for it, Mr. 

Chairman. 

I’m not absolutely convinced that we won’t face this. I certainly 

hope we don’t. I think it would be the disaster that you gentlemen 

have described. But it is indeed disappointing that our inability to 

come to grips with the part of our budget that makes up the majority of taxpayer spending is seemingly still off limits and we haven’t 

been able to address that. I hope we can. 

Thank you, Mr. Chairman. 

Senator REED. Thank you, Senator Wicker. 

Let me continue with some issues regarding the proposed retirement of the Aegis cruisers. Admiral Burke, Admiral Blake, and Mr. 

Secretary, as I understand it, seven cruisers are going to be retired, 

and they have a direct impact on our anti-missile capabilities. In 

fact, there’s some suggestion that these retirements might reduce 

our ability to meet the Navy’s objectives in terms of missile defense 

platforms and missile capabilities. 

Has our missile defense-capable ships requirement changed, allowing us to reduce the number of ships that we have? If not, what 

are we doing to mitigate? Then I’ll have a follow-on question. 

Admiral BURKE. Sir, as you’ve heard today in many of our other 

decisions, the cruiser decommissioning proposal was a very difficult 

choice, and we find ourselves balancing procurement, readiness, 

and people accounts to achieve the global force management and 

avoid the hollow force that Admiral Blake talked about. 

36 

No, our missile defense requirement has not abated. It continues. 

The demand continues to grow. But these were not missile defense 

ships. These were not BMD ships. These were carrier and strike 

group defense ships, that would have required significant resources. The numbers are roughly just short of $2 billion to do the 

maintenance and repairs to get them up to speed. Some of those 

ships were built with some aluminum that has suffered from significant cracking problems and it’s been quite a challenge for us. 

There’s also some maintenance backlog that would need to be addressed there to make them viable for the long run. 

In addition, there’s the annual O&M dollars that one would have 

to pay to keep them viable, and that’s another just over $1 billion. 

Then the helicopters, the communications upgrades, and the people 

is another a little more than $1 billion. 

So overall across the FYDP we’re talking about $4.1 billion. Then 

to meet the potential BMD requirements we’d have to put BMD on 

those ships as well, which is more than another billion dollars. 

We’re talking about a lot of money to keep those ships in the fleet. 

Part of the reason we make the decision to do that is because 

they are not BMD ships yet. But I think over the last couple of 

years, we have finally found our way on taking care of our surface 

ships. We need to make sure that we continue down that track and 

take care of the young ships so they don’t get into the condition 

that these older ships have gotten into, where they have a backlog 

of maintenance. 

The reason I fully support this decision is because if you want 

to maintain the largest, most sustainable, and most capable fleet 

you can have, you need to do all of the maintenance and modernization. We have a bunch of ships and we’re unable to take care 

of them all properly, and so we can either choose to continue to do 

that or we can go down a more righteous and judicious path in my 

view, which is to maintain the fleet as well as we possibly can, and 

we’ll end up with a better, larger fleet as a result. 

Senator REED. Just to clarify that, the short-run operational loss 

is the protection of the carrier battle groups by these Aegis submarines from missile attack, either land-based missile attack or 

any missile attack; is that correct? 

Admiral BURKE. Yes. We have 22 cruisers today. We have 11 carriers, 10 carriers at the moment, but 11 carriers in the future. We 

typically will deploy each carrier strike group with one of these 

cruisers. So it will not have a direct impact on the carrier strike 

group, sir. 

Senator REED. Then the other issue here, too, is there was at 

least a very theoretical consideration of moving these platforms 

onto BMD capabilities. That’s now essentially off the table, and it 

raises the question of—and this is perhaps at the Secretary level— 

has there been discussion within DOD of moving resources from 

land-based systems into more sea-based systems, where you would 

get more bang for your buck effectively? 

That’s, I’m sure, an object of debate within the building, but has 

that discussion taken place? 

Mr. STACKLEY. I would say constantly, sir. There’s no single solution or single element when it comes to missile defense. From the 

Navy’s perspective, first we look at force structure. We need to deVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
37 

fend the battle group. But at the larger national level, there is constant discussion about what contributions could be made by the 

sea-based element of missile defense. 

There’s some tension there in terms of what does that mean regarding the dedication of platforms to that mission, what does that 

mean to the overall force structure, and how does that affect 

things? Today we’re moving forward with the Phased Adaptive Approach with Europe, and, in fact, the land-based piece of that effort 

is taking Aegis ashore. 

Senator REED. Yes. 

Mr. STACKLEY. So we’re putting the capability on land, because 

it has proven effect. The early increments associated with seabased is bringing Aegis destroyers to the Mediterranean, where 

they provide a capability for that region. Then to address the impact on force structure, what that means is a part of the solution 

is forward deploying Aegis destroyers, so that the number of ships 

that are affected is limited. 

There’s constant discussion. There are capabilities that have 

come forward through the Aegis program that have proven extremely effective in the missile defense arena. Throughout those 

discussions, we have to look at our priorities, the suitability of the 

capabilities for the respective missions, and then, as Admiral 

Burke described, managing the total force. 

Admiral BLAKE. Sir? 

Senator REED. Go ahead, sir. 

Admiral BLAKE. If I could just expand on or expound on what 

Admiral Burke was talking about, when we were putting the budget together one of the fundamentals we had was the issue of hollowness versus wholeness. I don’t think anybody in the Navy was 

pleased when we came forward and said that we were going to 

have to take both amphibious ships and cruisers out of service earlier than their expected service lives. 

But I would tell you that if someone were to direct that those 

ships be put back in, my real concern would be, all right, I still 

have a bill to pay and I am probably very likely going to have to 

put something else on the table which will be considered equally 

egregious. It was not an easy decision on our part, but we were 

driven by the fundamental approach that we wanted to ensure at 

the end of the day our force was whole and that we were not heading down a hollow path. 

Admiral MCCOY. Senator, just to complete that thought, both Admiral Blake and Admiral Burke talked about the difficult decision. 

But for the first time in fiscal year 2013, we have fully funded 

maintenance, and particularly surface maintenance, which has always been short. So with Overseas Contingency Operations (OCO) 

funding we have fully funded in our budget surface maintenance, 

and that goes to that wholeness discussion. 

Senator REED. With OCO funding, which is transitory at best. 

Admiral MCCOY. About 20 percent of our maintenance budget 

right now is reliant on OCO, yes, sir. 

Senator REED. Okay. Just for the record, the 313-ship target 

total, is that still under the Secretary’s guidance, is that still the 

requirement for the Navy? 

38 

Admiral BLAKE. What we’re doing right now, sir, is, based on the 

new strategy which we have received, we are in the process of 

doing a force structure assessment, and then we will then brief 

that to DOD and we will ascertain the requirement for the right 

size of the fleet. 

Senator REED. So it’s a work in progress? 

Admiral BLAKE. Yes, sir. That is going on even as we speak. 

Senator REED. A final question, and then I’ll recognize Senator 

Blumenthal. 

We talked about the commitment of both the Navy and the contractors to get ships out on time, under budget, et cetera. One of 

the things that complicates that is sometimes the Navy changes 

the plan midway through. There are some examples. I’m told that 

the MLP program, which just signed a contract for a third vessel, 

now intends to build a ship in an AFSB configuration, which is 

new. The Navy wants to sign a multiyear for the DDG–51 destroyer, but plans to shift to a new configuration, new radar, et 

cetera. 

To what extent are those changes adding costs and to what extent can we avoid those kinds of changes so that we can mitigate 

costs? 

Mr. STACKLEY. Yes, sir. I’m going to pound the table on stability. 

That has to be one of the cornerstones to our program going forward, and that’s requirements, design, build plan, et cetera. So 

throughout our process we do everything we can to maintain stability. 

In terms of the MLP, we also have to deal with the real world. 

When new requirements emerge, you have to address the requirements and you have to look at how can we best meet that in terms 

of cost and schedule so that the warfighter is getting what he 

needs, when he needs it, within the fiscal constraints that we have. 

Specifically regarding the MLP and the modification associated 

with the AFSB, we’ve done a preliminary review in terms of what 

the impact would be to the MLP technical baseline and the impact 

is measured in terms of small impact to the base ship, small, single 

digit percent to the base ship. Effectively, what we’re doing is we’re 

adding to it, as opposed to redesigning the interior. 

The AFSB brings an aviation capability for basically vertical lift, 

as opposed to the baseline MLP, which is more of a horizontal lift. 

So the designs that we’re looking at are all very much cost conscious to minimize the impact to the base ship, but deliver the core 

capability that’s been requested by Fifth Fleet. 

We see that as a very controlled and measured approach to bring 

the capability without downstream trying to backfit it or holding 

up the program and introducing cost and delay otherwise. We’d be 

happy to share the details with the staff to get a full understanding 

of what that impact is and what those details are, as they mature. 

The other discussion on DDG–51, the fiscal year 2013 multiyear 

that we’ve requested is for a Flight 2A baseline multiyear. We’re 

looking at nine Flight 2A ships in the multiyear. But what we need 

to do is introduce the capability that I described in my opening remarks regarding the AMDR. In parallel with that multiyear, we’re 

completing the development of the AMDR, targeting 2016 DDG–51 

ships. We are not making that a part of the contract baseline, but 

39 

at the point of maturity when we’ve completed not just the technology development phase, but the engineering and manufacturing 

development phase, and we have a firm handle on the details associated with the impacts of AMDR to that ship, then we’ll have a 

decision point downstream in advance of the 2016 ship that tells 

us, and we share that with Congress, that the technology is mature, that we understand the impacts, and that we have the design 

complete sufficient to support introduction in the 2016 ships, we 

understand the costs. 

We will be competing this engineering change proposal between 

the two builders as a fixed price competition to incorporate the 

cost, so that stability, cost control, and introduction of this key capability that we need can all come together. I believe it’s very 

measured. We are not jumping the gun here. We’re not slamming 

that into the multiyear at the front end. It is a downstream decision, but we believe it’s important enough to get that capability introduced to the fleet that we want to do it smartly, but timely as 

well. 

Senator REED. Thank you. 

Admiral BLAKE. Sir, just to give you a little more background on 

the AFSB, we are filling an urgent COCOM demand signal. In the 

near term, we are going to take the Ponce, which was originally 

going to be decommissioned this past March, and we are now going 

to do some minor modifications on her, and then we will push that 

ship out to meet the COCOM demand. That’s the near term. 

Then the far-term solution is to do the modifications, as Mr. 

Stackley described, to the MLP in order to be able to meet that 

COCOM demand signal for the AFSB. 

Senator REED. Thank you. 

General Mills, I’ll see you next Thursday, right? So I’ll have a 

chance to just quiz you in depth. I don’t know if you have a quick 

comment? 

General MILLS. Sir, I look forward to next Thursday. 

Senator REED. So do I, sir. Thank you. I wasn’t ignoring you. 

Senator Blumenthal. 

Senator BLUMENTHAL. Thank you, Mr. Chairman. 

I have a question that is a little bit different than most that have 

been asked so far, although I missed some at the beginning part 

of your testimony. I’m very interested in renewable energy, particularly the use of fuel cells. I think the Navy really has been leading 

the way in this effort, and I want to thank you for what you’ve 

been doing. 

But I wonder whether you could comment on whether the extraordinary times that we face, to use a euphemism, Secretary 

Stackley, for these extraordinary constraints and challenges, are in 

any way inhibiting the drive toward using more renewable energy 

in the shipbuilding program, whether it is viewed as a means of 

cutting costs in the long-run, as I believe it should be viewed? If 

you could comment generally on that? 

Mr. STACKLEY. Yes, sir, and I’ll probably share this with Admiral 

McCoy. But as you’re well aware, alternative energy has been a top 

priority for the Secretary of the Navy, and we have been investing 

across the board—ships, deployed forces, our installations and 

40 

sites—to reduce our energy demands so that we’re driving up efficiency. So step one is reduce your energy demands. 

A very simple example is the development that’s going on right 

now for a hybrid electric drive for our surface combatants. We’re 

looking at employing technologies that are already at sea on other 

ships and introducing that onto our larger ship class, the DDG– 

51s, to try to reduce their fuel bill and to get greater legs for those 

ships. 

We see an opportunity there to drive our fuel costs down by simply 5 percent on each of our destroyers, which when you add it up 

is a fairly significant savings. So we’re working that technology. 

We’re going to do a demonstration here in the next year with one 

ship in service, with a long-term goal of backfit and forward fit that 

type of technology. That’s one simple example. 

Separately, I think you’re well aware of the efforts that the Navy 

has been working on the R&D for alternative fuels. So that’s 

biofuels. We’re looking at all of our prime movers, gas turbines predominantly, to ensure that they are certified for operating with 

biofuels. There’s been much discussion regarding the economics of 

that. The economics are probably a long-term issue. But side-byside with the economics is the operational imperative of trying to 

reduce our reliance on fossil fuels from offshore. 

You specifically asked about fuel cells. Fuel cell technology has 

been under development for decades. In fact, some other navies are 

employing fuel cell technology for their non-nuclear submarines. It 

is a good alternative energy source for non-nuclear submarines. For 

the Navy, that would not meet our mission requirements. I would 

say the large-scale application of fuel cell technology doesn’t in that 

case meet our mission requirements. 

But for commercial and military, fuel cell is a very promising 

technology. We’re not going to drive that equation in terms of its 

development, but we are going to look to leverage it. 

Admiral MCCOY. Senator, I’ll just chime in. Most of the attention 

in this area has been on the alternative fuels. On the ship side, for 

example, we’ve already sailed one of our test gas turbine ships off 

the coast of California and we don’t see any issue with being able 

to use that fuel. We’re going to continue to expand that, including 

with the RIMPAC exercise this summer. 

But an area that really hasn’t gotten a lot of air time is what 

I call dozens of initiatives that we’ve fast-tracked out there to reduce the amount of fuel, as Mr. Stackley was saying. These are everything from the hybrid motor that Mr. Stackley talked about to 

simple things like hull coatings. 

The good news about the things I’m going to talk about real 

quickly here is we’re not on the leading edge of technology. We’re 

adapting what’s already in industry that can be smartly used in 

Navy ships. Slippery hull coatings that Maersk lines and other 

folks are using, we have them on a number of ships, and we are 

testing those. I really think we’re talking about really hundreds, if 

not by the time we’re done, initiatives that might get us very small, 

1 percent, whatever, a half a percent, but when you think about 

the number of steaming hours that we have. 

LED lighting, we’re putting those on our ships and looking for 

the effect of those. Smart voyage management systems that plot 

41 

the course for the weather to minimize the drag on the ship. A hybrid motor, but also efficient motors, compressors, and pumps, and 

we’re putting those on our ships and measuring the effect of those. 

So we have a very active program that we’re funding, that’s getting this stuff out to sea, taking what makes sense, what has a 

good payback, and going ahead and further deploying it. 

Admiral BLAKE. Sir, if I can just add, just from a fiscal perspective, for every dollar that a barrel of oil goes up we end up spending approximately an additional $31 million on the Navy side of 

the equation in order to get that fuel out there. So we have to do 

something. We’re currently executing the fiscal year 2012 budget 

and you see the daily fluctuations in the fuel prices, we’re having 

to come to grips with that. Every time you see that price of a barrel 

go up a dollar, we have to come up with an additional $31 million 

in order to cover it. 

Admiral BURKE. Senator, you’ve heard a lot about what we’re 

doing afloat. We’re doing some of the very similar situations in the 

air, looking at coatings, engine development, flight profiles, and 

getting adjustments to air corridors to allow us to fly through those 

to save fuel. 

But also on the shore side, there’s a lot of effort going into that. 

As Admiral McCoy said, we are not on the leading edge of technology there. But the implementation there has wide-ranging impact. For example, we are just beginning to meter all the buildings, 

and particularly base housing is on the leading end of this. We 

meter those houses and evaluate how much energy they use relative to other very similar houses, and then charge the occupants 

if they go over the average, or refund their money if they save 

money. 

The holy grail on this on the shore side is to be able to do this 

in all our bases, and we are well into installing those monitoring 

devices, metering, such that we can do that. 

General MILLS. Sir, I would offer up from the Marine Corps side 

several things. First, on the individual bases already in theater, 

being used by troops downrange, are battery saving and renewables there, along the lines of batteries, green blankets, solar panels, those types of things; very, very successful, to include troops 

that are in heavy combat. 

On the shore side, to mirror the Admiral’s comments, for example, up at Bridgeport, CA, which is our Mountain Warfare Training 

Command, we are soon to be energy neutral because of what we’re 

producing through solar and geothermal energy, and, in fact, in the 

very near future we’ll actually be able to sell some of that electricity to the local power grid because we’ll be producing more than 

what we, in fact, need. 

Our warfighting lab down at Quantico is exploring a multitude 

of projects that we can push out to the fleet quickly to lighten up 

the individual marine’s load and also to save fuel. Fuel efficiency 

is a major factor in all of our AOA as we look at new vehicles and 

new equipment to put on line. 

It’s a multi-fronted effort to really get some fuel savings in order 

to save those O&M dollars. 

Senator BLUMENTHAL. Thank you very much. Thank you for 

those very impressive answers. 

42 

Thank you, Mr. Chairman. 

Senator REED. Thank you, Senator Blumenthal. 

Gentlemen, thank you for your excellent testimony, and for your 

service to the Navy and the Marine Corps and the Nation. 

We will keep the record open for 1 week. Some of my colleagues 

might have statements they want to submit or questions they 

might direct to you. Please promptly respond to the questions. 

With no further ado, this hearing is adjourned. 

[Questions for the record with answers supplied follow:] 

QUESTIONS SUBMITTED BY SENATOR JACK REED

LITTORAL COMBAT SHIP DESIGN ISSUES

1. Senator REED. Secretary Stackley, USS Freedom (LCS–1) has experienced some 

issues with cracking. As I understand it, after sea trials in February 2011, the Navy 

found 17 cracks on the ship. I also understand that the Littoral Combat Ship (LCS) 

program manager issued a memorandum indicating that the cracks represented a 

risk in operating the LCS–1 at the extreme edges of its safe operating envelope, and 

directed that the maximum speed for the LCS–1 to be capped at 20 knots in rough 

water. Additionally, the Navy found cracks in nearly identical locations on opposite 

sides of the ship. I understand that these cracks may be indicative of some systematic design issue with the LCS–1. What is your view on the reports of cracking in 

the hull and the limitations it puts on the ship’s capabilities? 

Mr. STACKLEY. The cracks detected on LCS–1 are not indicative of a systematic 

design issue on the Freedom variant of the LCS. 

As was briefed to the Senate and House Armed Services Committees (SASC/ 

HASC) in March and April 2011, respectively, there were 17 cracks discovered on 

LCS–1 after 30 months of operation (including post delivery test and trials, early 

deployment, and fleet operations). There was a single crack in the hull and 16 minor 

cracks in the superstructure. 

The hull crack was discovered in February 2011 while LCS–1 was undergoing 

heavy weather trials off the coast of Northern California. A limitation to the safe 

operating envelope was implemented until the crack was repaired. The hull crack 

was attributed to a weld defect and undersized backing chocks, both of which exposed that area to higher than expected stress. The hull crack was repaired during 

a Continuous Maintenance Availability (CMAV) in February/March 2011 and the 

safe operating envelope restriction was lifted, allowing the ship to resume all ranges 

of speeds and operations. During a subsequent post shakedown availability, the undersized chocks were replaced. In addition, design changes were implemented on 

LCS–3 to ease accessibility to that area of the hull during construction to facilitate 

welding. 

Regarding the 16 superstructure cracks, the investigation found 11 of these cracks 

coincide with high stress areas discovered in subsequent detailed structural modeling and analysis and 6 of the cracks had some form of workmanship issue during 

either construction or post delivery. All of these cracks have been repaired. Based 

on additional analysis, the LCS–3 design was modified to reduce the stresses in the 

superstructure. Design modifications from LCS–3 have been incorporated into LCS– 

1 and no further design-related superstructure cracking risk is anticipated for the 

LCS–1 design. 

In summary, the cracks are not indicative of a systematic design issue on LCS– 

1. The Navy has been proactive in discovering the root cause of the cracks and implementing design and production improvements on all of the follow ships of the 

Freedom variant. 

2. Senator REED. Secretary Stackley, are cracks in nearly identical locations on 

opposite sides of the ship, as apparently were identified in the LCS–1, indicative of 

a systematic flaw in the design of the LCS–1, and if so, how will the Navy address 

this issue? 

Mr. STACKLEY. The cracks detected on LCS–1 are not indicative of a systematic 

design issue on the Freedom variant of the LCS. 

As Navy briefed to the SASC/HASC in March and April 2011, respectively, there 

were 17 cracks discovered on LCS–1 after 30 months of operation (including post 

delivery test and trials, early deployment, and fleet operations). There was a single 

crack in the hull and 16 minor cracks in the superstructure. The small subset of 

43 

the 16 superstructure cracks that were mirrored on the opposite side of the ship was 

also detailed in the congressional briefs. 

The hull crack was discovered in February 2011 while LCS–1 was undergoing 

heavy weather trials off the coast of Northern California. A limitation to the safe 

operating envelope was implemented until the crack was repaired. The hull crack 

was attributed to a weld defect and undersized backing chocks, both of which exposed that area to higher than expected stress. The hull crack was repaired during 

a CMAV in February/March 2011 and the safe operating envelope restriction was 

lifted, allowing the ship to resume all ranges of speeds and operations. During a 

subsequent post shakedown availability, the undersized chocks were replaced. In addition, design changes were implemented on LCS–3 to ease accessibility to that area 

of the hull during construction to facilitate welding. 

Regarding the 16 superstructure cracks, the investigation found 11 of these cracks 

coincide with high stress areas discovered in subsequent detailed structural modeling and analysis and 6 of the cracks had some form of workmanship issue during 

either construction or post delivery. All of these cracks have been repaired. Based 

on additional analysis, the LCS–3 design was modified to reduce the stresses in the 

superstructure. Design modifications from LCS–3 have been incorporated into LCS– 

1 and no further design related superstructure cracking risk is anticipated for the 

LCS–1 design. 

In summary, the cracks are not indicative of a systematic design issue on LCS– 

1. The Navy has been proactive in discovering the root cause of the cracks, and implementing design and production improvements on all of the follow ships of the 

Freedom variant. 

3. Senator REED. Secretary Stackley and Admiral Blake, I also understand that 

during transit from Mayport, FL, to its homeport in San Diego, CA, the LCS–1 experienced a number of equipment failures, perhaps as many as 80 such failures, and 

at least once the ship lost all electricity, temporarily leaving her adrift at sea. Nevertheless, the committee has received favorable testimony on the LCS, including testimony from Secretary Mabus, who praised the performance of the ship, testifying 

that: ‘‘LCS–1, the Freedom, demonstrated some of the things we can expect during 

her maiden deployment earlier this year,’’ and then-Chief of Naval Operations 

(CNO), Admiral Gary Roughead, stating: ‘‘I deployed the LCS earlier than any other 

ship class to assure we were on the right path operationally. It is clear to me that 

we are.’’ Are these two testimonies inconsistent with the LCS–1 performance during 

that transit? 

Mr. STACKLEY and Admiral BLAKE. No, these two testimonies are not inconsistent. 

Throughout its deployment, USS Freedom (LCS–1) safely operated and conducted 

its mission. Few of the 80 equipment failures cited above were mission critical. The 

ship did experience a brief loss of power; however, it should be noted that many 

commercial and U.S. Navy vessels have periods of power loss due to plant set-up 

and operator control. In the event of power loss, there are specific Navy procedures 

documented in the Engineering Operational Sequencing System (EOSS) to quickly 

restore power throughout the ship. To address concerns documented with electric 

power generation, the LCS Program executed Electric Plant Reliability Improvement Programs on both ship designs to increase reliability of ship service diesel generators and the performance and management of the shipboard electrical systems. 

This has resulted in changes that have been implemented through post delivery 

availabilities on LCS–1 and LCS–2 as well as captured for LCS–3 and follow ships. 

Additionally, sensors were installed to monitor performance trends. 

LCS–1 arrived in San Diego on April 23, 2010, successfully completing her maiden 

deployment having traveled 6,500 miles, including transiting the Panama Canal. 

Highlights of operations in 3rd and 4th Fleet Areas of Responsibility include theater 

security cooperation port visits in Colombia, Panama, and Mexico, successful performance of strike group operations with the USS Carl Vinson Carrier Strike Group, 

joint maneuvers with the Mexican Navy, and counter-illicit trafficking patrols which 

resulted in four interdictions yielding over five tons of cocaine, two seized vessels, 

and nine suspected smugglers taken into custody. The second phase of the early deployment included LCS–1 participating in the bi-annual Rim of the Pacific 

(RIMPAC) exercise with 14 other nations, 34 ships, 5 submarines, 100 aircraft, and 

over 20,000 personnel. The early deployment included the development of a coordinated logistics support plan. The lessons learned from the LCS–1 deployment have 

provided critical data to inform the permanent support plan for the 55 ships of the 

LCS class, as well as valuable information used in the construction of both LCS– 

3 and the block buy ships. 

44 

4. Senator REED. Secretary Stackley, does the experience with the cracks and 

other equipment failures call into question the survivability of the LCS–1 in a hostile combat environment? 

Mr. STACKLEY. The cracks and other equipment failures experienced by LCS–1 do 

not call into question the survivability. These types of issues are not uncommon to 

first of class ships and the Navy has corrected the underlying technical issues. 

LCS ships are built to meet JROC-approved survivability requirements and include OPNAVINST 9070.1 Level 1 Survivability standards. The LCS design specifically includes Level 1 plus additional tailored survivability enhancements (‘‘Level 

1+’’). LCS survivability depends on a combination of ship design, ship numbers, and 

ship CONOPS which says LCS will: 

• Operate as part of a networked battle force 

• Independent operations in low- to medium-threat scenarios 

• Part of a networked battle force ops in high threat environments 

• Create Battle Space/Avoid being hit 

• Reliance on networked battle force for threat attrition 

• Reliance on offboard systems 

• Fight and survive if hit 

• Ship design: Accept ship mission kill; keep ship afloat and protect crew 

after hit 

• Battle force design: Maintain battle force fight-through capability through 

LCS numbers and mission flexibility 

• Withdraw/reposition if hit-LCS is designed to maintain essential mobility 

after a hit allowing the ship to exit the battle area under its own power. The 

LCS systems allow ship’s crew to navigate and communicate while repositioning 

after a hit all the while utilizing numbers (of LCSs), and CONOPS as force multipliers. LCS incorporates survivability systems to perform required missions in 

the littoral with an emphasis on crew survival. 

5. Senator REED. Secretary Stackley, can the Navy ensure that these issues with 

the LCS program will be addressed before follow-on ships are delivered? 

Mr. STACKLEY. Yes. The LCS program incorporates lessons learned during construction of the lead ship of both LCS variants. For example, the Navy has implemented design modifications and production process improvements on LCS–3 and 

follow-on hulls to correct the superstructure cracking experienced. The LCS program 

has collected data on the lead ships, executed design reviews/design updates, and 

continues to implement those findings into the follow-on ships as required. In addition, those findings have led to upgrades and changes on LCS–1 and LCS–2 to ensure that these research and development (R&D) hulls are fully operational fleet assets. 

6. Senator REED. Secretary Stackley, if you are unable to fix these issues, would 

that result in a need to discontinue the Navy’s dual-source acquisition strategy? 

Mr. STACKLEY. As a result the of lessons learned from LCS–1 and LCS–2, the risk 

of discontinuing the dual-source block buy continues to decrease as the program matures. The Navy has implemented design modifications and production process improvements on LCS–3 and follow-on hulls to correct the superstructure cracking experienced on LCS–1. In addition, the lessons-learned have led to upgrades and 

changes on LCS–1 and LCS–2 to ensure that these R&D hulls are fully operational 

fleet assets. 

7. Senator REED. Secretary Stackley, I also understand that the Director of Operational Test and Evaluation (DOT&E) may not have released any formal developmental test and evaluation (T&E) reports. Does this lack of releasing reports in any 

way reflect the fact that the Navy and the DOT&E are not cooperating effectively 

on the LCS program? 

Mr. STACKLEY. No. The LCS Program Office has been working in close coordination with the DOT&E community since the early days of the program. DOT&E has 

been an active member of the T&E Working-level Integrated Program Teams 

(WIPT) since 2004 and most recently at the OSD level in the Milestone-related Integrating IPTs (IIPT) and Overarching IPTs (OIPT) that occurred in 2011. The Navy 

is actively developing the required reports documenting the results of all the developmental testing that has occurred on LCS–1. Once completed, these reports will 

be delivered to DOT&E. 

45 

8. Senator REED. Secretary Stackley, how will you ensure that the Navy works 

more closely with the DOT&E on the LCS program and better informs the DOT&E 

and Congress of vulnerabilities with the LCS during the T&E process? 

Mr. STACKLEY. The LCS Program Office has been working in close coordination 

with the DOT&E community since the early days of the program. DOT&E has been 

an active member of the T&E WIPTs since 2004 and most recently at the OSD level 

in the IIPTs and OIPTs that occurred in 2011. The Navy provided Draft Detail Design Integrated Survivability Assessment Reports (DDISAR) to DOT&E in the second quarter of fiscal year 2012, in advance of completion of modeling results and 

shot line selections. DOT&E and the Program Office now are working jointly to complete the DDISARs before planning and conduct of the Total Ship Survivability 

Trials (TSST) to assess seaframe survivability in fiscal year 2014. Additionally, the 

LCS Program Office provided a draft of the 57mm Live Fire T&E Management Plan 

to OSD/DOT&E on March 29, 2012, and received comments on April 3, 2012. Comment resolution is in process. 

QUESTIONS SUBMITTED BY SENATOR KAY R. HAGAN

AMPHIBIOUS SHIPS

9. Senator HAGAN. General Mills, in 2009, the Navy identified the requirement 

for 38 amphibious ships, but accepted the risk of 33 ships due to fiscal constraints. 

This risk was deemed acceptable based on an assumed fleet readiness rate of 90 

percent, which would have 30 operational ships at any given time. The current shipbuilding plan shows an average inventory of 29 ships across the Future Years Defense Program (FYDP) and historical trends demonstrate amphibious ship readiness 

well below the assumed rate of 90 percent, closer to 80 percent. The shipbuilding 

plan doesn’t get us to the required number of 32 or 33 amphibious ships, depending 

on the year of the report, until 2022. What impact, if any, has amphibious ship 

availability had on readiness? 

General MILLS. One Marine Expeditionary Brigade (MEB) assault echelon requires 17 operationally available amphibious warships and we require a minimum 

of two MEBs to meet combatant commander requirements. These ships, along with 

the requisite number of ship-to-shore connectors, represent the minimum number 

of ships needed to provide the Nation with a sea-based power projection capability 

for full spectrum amphibious operations. Fiscal constraints reducing this operational 

availability down to 30 ships have already required us to assume risk, not only in 

quantities, but also the speed with which we can respond. As of May 2012, there 

are 28 ships in the Navy’s amphibious fleet, with 3 scheduled for decommissioning 

and 4 new ships under construction in the yards. Within the coming FYDP, the inventory will decline in fiscal year 2014 before rising to an average of 30 amphibious 

warships over the next 30 years. The key to meeting amphibious lift requirements 

with acceptable risk is maintaining a fleet which provides 30 operationally available 

ships. 

Shortfall in amphibious lift remains a concern as we work with the CNO and his 

staff to mitigate risk in meeting the amphibious lift requirement. We are aggressively reviewing our amphibious concepts, doctrine, and plans and have recently developed an Ellis Group specifically charged with developing innovative solutions to 

overcome these obstacles and look for new methods given these amphibious ship 

shortfalls. 

10. Senator HAGAN. General Mills, what level of risk is being assumed across the 

FYDP? 

General MILLS. The combatant commanders’ cumulative operational demand for 

amphibious ships falls into three basic categories: forward presence and engagement; crisis response; and operations plans. While operations plans amphibious warship requirements have remained consistent, the demand for the first two categories 

has dramatically increased in the post-Cold War era. In the past 20 years, U.S. amphibious forces have responded to crises and contingencies well over 100 times, a 

response rate that approximately doubles that of the Cold War. Furthermore, during 

the same period, forward-postured amphibious forces have continually conducted 

sea-based security cooperation with international partners—reflecting the philosophy espoused in the Maritime Strategy that preventing war is as important as winning wars. 

An inventory of 33 ships allows the Navy/Marine Corps team to: meet desired 

presence goals; fully supports our ability to build partnerships through engagement; 

and respond to crisis. Optimally, deploying 3 forward ARG/MEUs and 2 enhanced 

46 

MPSRONs—each with an MLP and T–AKE integrated into the squadron—provides 

the Nation the ability to respond to small to large scale crisis within 7–10 days. 

These ships, equipment, marines, and sailors are the same capability used to 

strengthen our relationships worldwide and provide a strategic ‘‘buffer’’ protecting 

our interests and a global economy and stability. Rotational Amphibious Ready 

Groups and Marine Expeditionary Units form together to provide forward deployed 

naval forces in four Geographic Combatant Command areas of responsibility. 

In addition to forward presence and episodic crises response, we maintain the requirement for an amphibious warship fleet for contingencies requiring our role in 

joint operational access. One MEB assault echelon requires 17 operationally available amphibious warships and we require a minimum of 2 MEBs to meet combatant 

commander requirements. These ships, along with the requisite number of ship-toshore connectors, represent the minimum number of ships needed to provide the 

Nation with a sea-based power projection capability for full spectrum amphibious 

operations. As of May 2012, there are 28 ships in the Navy’s amphibious fleet, with 

3 scheduled for decommissioning and 4 new ships under construction in the yards. 

Within the coming FYDP, the inventory will decline in fiscal year 2014 before rising 

to an average of 30 amphibious warships over the next 30 years. Fiscal constraints 

reduce operational availability down to 30 ships, based on an inventory of 33 ships, 

which requires us to assume risk, not only in quantities, but also the speed with 

which we can respond. The key to meeting amphibious lift requirements with acceptable risk is maintaining a fleet which provides 30 operationally available ships 

for the 3 categories described. 

11. Senator HAGAN. General Mills, how important are amphibious ships and other 

amphibious capabilities to your plans to distribute forces throughout the Pacific? 

General MILLS. The geographic realities of the Pacific theater demand naval responsiveness. The genesis of the amphibious and power projection capabilities of the 

Navy and Marine Corps traces back more than 70 years to operations in the Pacific—where today key terrain and strategic chokepoints are separated by large expanses of ocean. The Pacific theater is where 30 percent of the world’s population 

and the same percentage of our primary trading partners reside; where five major 

defense treaties are focused; where 50 percent of the world’s megacities are situated; 

and where natural disasters over the past decade have required the greatest attention from the international community. The geography of the Pacific has not 

changed, though our tactics and operations continually evolve with the changing 

character and lethality of modern warfare. Approximately 24,000 marines already 

in the Pacific conduct an ambitious, annual training cycle of more than 80 exercises, 

engagements, and initiatives, in addition to the crises we respond to such as Operation Tomodachi in Japan last year. 

Forward presence involves a combination of land- and sea-based naval forces. Our 

enduring bases and presence have served U.S. National Security interests well for 

decades. Our rotational presence in locations such as Japan, Korea, Australia, the 

Philippines, Thailand, and Singapore reassures our allies and partners. Sea-basing, 

the act of using amphibious warships with support from maritime prepositioned 

ships with various types of connectors is uniquely suited to provide the geographic 

combatant commander with the flexibility to deploy forces anywhere in the Pacific 

region without having to rely on multiple bases ashore or imposing our presence on 

a sovereign nation. Sea-basing enables forward deployed presence at an affordable 

cost. Forward-deployed naval forces serve as a deterrent and provide a flexible, agile 

response capability for crises or contingencies. Maritime prepositioning offers the 

ability to rapidly support and sustain Marine Corps forces in the Pacific during 

training, exercises, or emerging crises, and delivers the full range of logistical support those forces require. 

12. Senator HAGAN. General Mills, what is the current amphibious ship requirement? 

General MILLS. One MEB assault echelon requires 17 operationally available amphibious warships and we require a minimum of 2 MEBs to meet combatant commander requirements. These ships, along with the requisite number of ship-to-shore 

connectors, represent the minimum number of ships needed to provide the Nation 

with a sea-based power projection capability for full spectrum amphibious operations. Fiscal constraints reducing this operational availability down to 30 ships 

have already required us to assume risk, not only in quantities, but also the speed 

with which we can respond. As of May 2012, there are 28 ships in the Navy’s amphibious fleet, with 3 scheduled for decommissioning and 4 new ships under construction in the yards. Within the coming FYDP, the inventory will decline in fiscal 

year 2014 before rising to an average of 30 amphibious warships over the next 30 

47 

years. The key to meeting amphibious lift requirements with acceptable risk is 

maintaining a fleet which provides 30 operationally available ships. 

13. Senator HAGAN. Admiral McCoy, why don’t we have these ships now or expect 

to have them anytime soon for that matter? 

Admiral MCCOY. The Navy remains committed to providing 30 operationally 

available amphibious ships to meet naval amphibious lift demand. Although budgetary pressures have led us to shift priorities elsewhere in the short-term and the 

future fiscal environment is unclear, the Navy can achieve this goal by sustaining 

an inventory of about 32 amphibious ships in the mid- to long-term. 

The 32-ship amphibious force we are procuring to support this need will optimally 

be comprised of 11 LHA/D, 11 LPD–17, and 10 LSD. Our proposed delivery/decommissioning profile will meet historical sourcing for Amphibious Ready Groups. 

The 30-year shipbuilding plan procures the first LHA(R) Flight 1 amphibious assault ship in fiscal year 2017, 1 year later than originally expected. Current plans 

call for this ship to include a well deck and a reduced island to improve its surface 

and aerial assault capabilities. Additionally, the plan delays decommissioning of an 

amphibious assault ship (LHA–5) from fiscal year 2014 to fiscal year 2015 to maintain large deck amphibious ships in the inventory pending LHA–6 delivery to the 

fleet. The Navy will continue to procure Flight I LHA(R) amphibious assault ships 

in the mid-term period. Three of these large, multi-purpose warships will be built 

every 4 years, starting in fiscal year 2024. 

The 30-year shipbuilding plan procures the first LSD(X), the replacement for 

LSD–41 and –49 dock landing ships, in fiscal year 2018. Three of the 10 planned 

LSD(X)s are to be procured in the near-term planning period with the remaining 

7 ships procured during the mid-term planning period; the last coming in fiscal year 

2032. As the first of these legacy ships will not retire until fiscal year 2026, this 

procurement action is ahead of need; it is being taken primarily to preserve the 

shipbuilding industrial base and to maintain a long-term total amphibious inventory 

at or slightly above 32 ships. The additional ships in the inventory will help reduce 

the risk associated with generating the 30 operationally available amphibious ships 

needed to meet amphibious lift demand. 

14. Senator HAGAN. Admiral McCoy, why, with fewer ships this year than last, 

are we looking to decommission two more amphibious ships? 

Admiral MCCOY. The decision to inactivate certain fleet assets was made to maintain the proper mix of capability in the battle force and provide a fiscal pathway 

to sustain, modernize, and update the existing and future fleet while maintaining 

an industrial base. 

• The Navy plans to transfer 2 of 12 LSDs to the inactive fleet and delay 

procurement of LSD(X). This will maintain an adaptable amphibious landing force of approximately 30 ships. 

In the short-term, we are accepting risk to aviation and vehicle lift. We may be 

able to reduce the risk by relying more heavily on carrier tactical aviation for close 

air support and by delivering additional support vehicles via Mobile Landing Platform (MLP) and/or Joint High Speed Vessel (JHSV) to support ground maneuver. 

This decision reflects the judicious use of limited resources while balancing operational risk. 

QUESTIONS SUBMITTED BY SENATOR ROGER F. WICKER

CVN–78 FORD-CLASS AIRCRAFT CARRIER

15. Senator WICKER. Secretary Stackley and Admiral McCoy, it is likely that the 

cost to complete construction of the USS Gerald R. Ford aircraft carrier will overrun 

significantly. What new approaches will the Navy take to ensure that the Ford-class 

carrier’s costs get under control? 

Mr. STACKLEY and Admiral MCCOY. The Navy’s ongoing efforts to control cost in 

the CVN–78 class are detailed in the March 26, 2012 letter from the Secretary of 

the Navy to Senators Levin and McCain. Strategies to incorporate lessons learned 

from CVN–78 and apply them to CVN–79 are described below. 

Improving Cost Performance on CVN–78 

Cost growth to date is attributable to increases in design, contractor furnished 

material, government furnished material (notably, the Electromagnetic Aircraft 

Launching System (EMALS) and the Dual Band Radar (DBR)), and production labor 

performance. To achieve the best case outcome, the program must execute with zero 

48 

additional cost growth in design and material procurement, and must improve production performance. The Navy and the shipbuilder have implemented a series of 

actions and initiatives in the management and oversight of CVN–78 that cross the 

full span of contracting, design, material procurement, government furnished equipment, production planning, production, management, and oversight. 

CVN–78 is being procured within a framework of cost plus contracts. Within this 

framework, however, the recent series of action taken by the Navy to improve contract effectiveness are achieving the desired effect of incentivizing improved cost 

performance and reducing government exposure to further cost growth. 

• CVN–78 design has been converted from a level of effort, fixed fee contract to a completion contract with a firm target and incentive fee. Shipbuilder cost performance has been on target or better since this contract 

was changed. 

• CVN–78 construction fee has been retracted, consistent with contract performance. However, the shipbuilder is incentivized by the contract shareline 

to improve upon current performance to meet agreed-to cost goals. 

• Contract design changes are under strict control; authorized only for safety, damage control, mission-degrading deficiencies, or similar. Adjudicated 

changes have been contained to less than 1 percent of contract target price. 

• The Navy converted the EMALS and AAG production contract to a firm, 

fixed-price contract, capping cost growth to that system and imposing penalties for late delivery. 

• Naval Sea Systems Command is performing a review of carrier specifications with the shipbuilder, removing or improving upon overly burdensome 

or unneeded specifications that impose unnecessary cost on the program. 

The largest impact to cost performance to date has been contractor and government material cost overruns. These issues trace to lead ship complexity and CVN– 

78 concurrency, but they also point to inadequate accountability for carrier material 

procurement, primarily during the ship’s advance procurement period (2002–2008). 

These effects cannot be reversed on CVN–78, but it is essential to improve upon material delivery to the shipyard to mitigate the significant impact of material delays 

on production performance. Equally important, the systemic material procurement 

deficiencies must be corrected for CVN–79. To this end, the Navy and shipbuilder 

have taken the following actions. 

• The Navy has employed outside supply chain management experts to develop optimal material procurement strategies. The Navy and the shipbuilder are reviewing remaining material requirements to employ these 

best practices (structuring procurements to achieve quantity discounts, 

dual-sourcing to improve schedule performance and leverage competitive 

opportunities, etc.). 

• The shipbuilder has assigned engineering and material sourcing personnel to each of their key vendors to expedite component qualifications 

and delivery to the shipyard. 

• The shipbuilder is inventorying all excess material procured on CVN–78 

for transfer to CVN–79 (cost reduction to CVN–78), as applicable. 

• The Program Executive Officer (Carriers) is conducting quarterly flaglevel government furnished equipment summits to drive cost reduction opportunities and ensure on-time delivery of required equipment and design 

information to the shipbuilder. 

The most important finding regarding CVN–78 remaining cost is that the CVN– 

78 build plan, consistent with the Nimitz class, focuses foremost on completion of 

structural and critical path work to support launching the ship on schedule. This 

emphasis on structure comes at the expense of completing ship systems, outfitting, 

and furnishing early in the build process and results in costly, labor-intensive system completion activity during later, more costly stages of production. Achieving the 

program’s cost improvement targets will require that CVN–78 increase its level of 

completion at launch, from current estimate of 60 percent to no less than 65 percent. To achieve this goal and drive greater focus on system completion: 

• The Navy fostered a collaborative build process review by the shipbuilder 

with other tier-1 private shipyards in order to benchmark its performance 

and identify fundamental changes that would yield marked improvement; 

• The shipbuilder has established specific launch metrics by system (foundations, machinery, piping, power panels, vent duct, lighting, etc.) and increased staffing for waterfront engineering and material expediters to support meeting these metrics; 

• The shipbuilder has linked all of these processes within a detailed integrated master schedule, providing greater visibility to current performance 

49 

and greater ability to control future cost and schedule performance across 

the shipbuilding disciplines; 

• The Navy and shipbuilder are conducting Unit Readiness Reviews of 

CVN–78 erection units to ensure that the outfitted condition of each hull 

unit being lifted into the dry-dock contains the proper level of outfitting. 

These initiatives, which summarize a more detailed list of actions being implemented and tracked as result of the end-to-end review, are accompanied by important management changes. 

• The shipbuilder has assigned a new Vice President in charge of CVN–78, 

a new Vice President in charge of material management and purchasing, 

and a number of new general shop foremen to strengthen CVN–78 performance. 

• The Navy has assigned a second tour flag officer with considerable carrier 

operations, construction, and program management experience as the new 

Program Executive Officer (PEO). 

• The PEO and shipyard president conduct bi-weekly launch readiness reviews focusing on cost performance, critical path issues, and accomplishment of the target for launch completion. 

• The Assistant Secretary of the Navy (Research, Development, and Acquisition) conducts a monthly review of program progress and performance 

with the PEO and shipbuilder, bringing to bear the full weight of the Department, as needed, to ensure that all that can be done to improve on cost 

performance is being done. 

Early production performance improvements can be traced directly to these actions, however, significant further improvement is required. To this end, the Navy 

is conducting a line-by-line review of all cost-to-go on CVN–78 to identify further 

opportunity to reduce cost and to mitigate risk. 

Improving Cost Performance on CVN–79 

CVN–79 advance procurement commenced in 2007 with advance construction activities following in 2011. Authorization for CVN–79 procurement is requested in 

the fiscal year 2013 President’s budget request with the first year of incremental 

funding. Two years have been added to the CVN–79 production schedule in this 

budget request, afforded by the fact that CVN–79 will replace CVN–68 when she 

inactivates. To improve affordability for CVN–79, the Navy plans to leverage this 

added time by introducing a fundamental change to the carrier procurement approach and a corresponding shift to the carrier build plan, while incorporating 

CVN–78 lessons learned. 

The two principal documents which the Navy and shipbuilder must ensure are 

correct and complete at the outset of CVN–79 procurement are the design and the 

build plan. 

Design is governed by rules in place that no changes will be considered for the 

follow ship except changes necessary to correct design deficiencies on the lead ship, 

fact-of-life changes to correct obsolescence issues, or changes that will result in reduced cost for the follow ship. Exceptions to these rules must be approved by the 

JROC or designee. Accordingly, the Navy is requesting procurement authority for 

CVN–79 with the Design Product Model complete and construction drawings approximately 95 percent complete (compared to approximately 30 percent complete 

at time of lead ship authorization). 

As well, first article testing and certification will be complete for virtually all 

major new equipments introduced in the Ford-class. At this point in time, the shipbuilder has developed a complete bill of material for CVN–79. The Navy is working 

with the shipbuilder to ensure that the contractor’s material estimates are in-line 

with Navy should cost estimates; eliminating non-recurring costs embedded in lead 

ship material, validating quantities, validating escalation indices, incorporating lead 

ship lessons learned. The Navy has increased its oversight of contractor furnished 

material procurement, ensuring that material procurement is competed (where competition is available); that it is fixed priced; that commodities are bundled to leverage economic order quantity opportunities; and that the vendor base capacity and 

schedule for receipt supports the optimal build plan being developed for production. 

In total, the high level of design maturity and material certification provides a 

stable technical baseline for material procurement cost and schedule performance, 

which are critical to developing and executing an improved, reliable build plan. 

In order to significantly improve production labor performance, based on timely 

receipt of design and material, the Navy and shipbuilder are reviewing and implementing changes to the CVN–79 build plan and affected facilities. The guiding principles are: 

50 

• Maximize planned work in the shops and early stages of construction, 

• Revise sequence of structural unit construction to maximize learning 

curve performance through families of units and work cells, 

• Incorporate design changes to improve Ford-class producibility, 

• Increase the size of erection units to eliminate disruptive unit breaks and 

improve unit alignment and fairness, 

• Increase outfitting levels for assembled units prior to erection in the drydock, 

• Increase overall ship completion levels at each key event. 

The shipbuilder is working on detailed plans for facility improvements that will 

improve productivity, and the Navy will consider incentives for capital improvements that would provide targeted return on investment, such as: 

• Increasing the amount of temporary and permanent covered work areas, 

• Adding ramps and service towers for improved access to work sites and 

the dry-dock, 

• Increasing lift capacity to enable construction of larger, more fully outfitted super-lifts. 

An incremental improvement to carrier construction cost will fall short of the improvement necessary to ensure affordability for CVN–79 and follow ships. Accordingly, the shipbuilder has established aggressive targets for CVN–79 to drive the 

game-changing improvements needed for carrier construction. These targets include: 

• 75 percent complete at launch (15 percent > Ford); 

• 85–90 of cable pulled prior to Launch (25–30 percent > Ford); 

• 30 percent increase in front-end shop work (piping details, foundations, 

etc); 

• All structural unit hot work complete prior to blast and paint; 

• 25 percent increase to work package throughput; 

• 100 percent of material available for all work packages in accordance 

with the integrated master schedule; 

• Zero delinquent engineering and planning products; 

• Resolution of engineering problems in < 8 hours. 

In parallel with efforts to improve shipbuilder costs, the PEO is establishing 

equally aggressive targets to reduce the cost of government furnished equipment for 

CVN–79; working equipment item by equipment item with an objective to reduce 

overall GFE costs by $500 million. Likewise, the Naval Sea Systems Command is 

committed to continuing its ongoing effort to identify specification changes that 

could significantly reduce cost without compromising safety and technical rigor. 

The output of these efforts comprises the optimal build plan for CVN–79 and follow, and will be incorporated in the detail design and construction baseline for 

CVN–79. CVN–79 will be procured using a fixed price incentive contract. 

16. Senator WICKER. Secretary Stackley and Admiral McCoy, one of the many new 

technologies on the Ford-class aircraft carrier is the Electromagnetic Aircraft 

Launch System (EMALS) and the Advanced Arresting Gear. Please describe how 

these key programs are doing. 

Mr. STACKLEY and Admiral MCCOY. The EMALS is designed for the CVN–78- 

class aircraft carrier. EMALS System Development and Demonstration (SDD) program is 87.4 percent complete and currently in the T&E phase. T&E status is as 

follows: 

• Highly Accelerated Life Testing (HALT) of trough components completed 

13,144 cycles of 18,000 planned cycles. 

• High Cycle Testing (HCT) of power equipment completed 32,217 cycles of 

40,000 planned cycles. 

• Full Scale Catapult System Functional Demonstration (SFD) completed: 

• 5,648 maneuvers, including 1,622 no-load and 2,014 deadload launches 

• Four F/A–18E risk reduction launches in December 2010 

• One F–35C risk reduction launch in November 2011 

• Test site is undergoing reconfiguration until July 2012 

• Aircraft Compatibility Testing (ACT) Phase I is complete; 

• 129 aircraft launches including F/A–18E (with and without stores), C–2A, 

T–45C and E–2D 

• Electromagnetic Interference (EMI) tests completed: 

• Weapons (HERO): Electronic Explosive Device response tests 

51 

• Aircraft systems: F/A–18E, T–45C and C–2A tested to EMALS emissions 

levels in the Patuxent River anechoic chamber. F/A–18E, T–45C, C–2A, E– 

2D, and F–35C tested at the SFD site against actual EMALS emissions 

• Personnel (HERP): Component testing complete 

The EMALS firm-fixed-price production contract was definitized in June 2010 and 

production is complete or underway on all major subsystems. EMALS component deliveries to the shipyard commenced in May 2011, and the last component will deliver in April 2014. EMALS component deliveries to date have met CVN–78 Required In-Yard Dates (RIYDs) or have delivered in time to avoid major construction 

delays. EMALS is on track to meet all future CVN–78 RIYDs. 

The Advanced Arresting Gear (AAG) is designed for forward fit in CVN–78-class 

carriers as well as back fit in Nimitz-class carriers. The SDD Program is 80 percent 

complete and in the T&E phase. Test status is as follows: 

• Extended Reliability Testing (ERT) of components has completed 5,610 cycles • Jet Car Track Site (JCTS) testing has completed: 

• Hardware Commissioning including 13 deadloads • Deadload Commissioning including: 

• 80 percent of full operating envelope available for test • 125 deadloads representative of F/A–18E/F, EA–18G, F/A–18C/D, E– 

2C, C–2A, and T–45 recoveries 

• Testing is on hold while system water twisters undergo structural redesign to prevent internal structural failure 

• Estimated return to commissioning is June 2012 with commencement of 

JCTS performance testing in fiscal year 2013 

The AAG firm-fixed-price production effort was definitized in June 2010 as part 

of a combined contract with EMALS. Production is underway on most major subsystems. The first AAG component deliveries to the shipyard occurred in March 

2012. Delivery of most major AAG hardware will be complete by fall of 2012. Final 

delivery of the production water twisters is under evaluation. 

17. Senator WICKER. Secretary Stackley and Admiral McCoy, will these systems 

meet the required in-yard date for delivery and installation on the Ford? 

Mr. STACKLEY and Admiral MCCOY. To date, EMALS has delivered 259 hardware 

end items for CVN–78, including 12 schedule-critical energy storage subsystem 

(ESS) motor/generators and 70.5 miles of cable to the shipyard. EMALS component 

deliveries to date have met CVN–78 RIYDs or have delivered in time to avoid major 

construction delays. 

AAG production for CVN–78 is underway on all major subsystems. The first AAG 

component deliveries to the shipyard began in March 2012. To date, 142 hardware 

end items have been delivered to the shipyard including 4 of the 8 required electric 

motors needed to meet 2012 RIYDs and 12.6 miles of cable. The Navy and the shipbuilder are coordinating revision to the delivery dates for AAG water twisters and 

purchase cable drum assemblies to address component design modifications while 

ensuring minimal impact to ship’s build schedule. The remaining 62 hardware items 

have either been completed or are in manufacture to meet RIYDs later in 2012 and 

2013. Installation of AAG hardware is planned to begin in late summer of 2012. 

PROPOSED EARLY RETIREMENTS OF CRUISERS AND AMPHIBIOUS SHIPS

18. Senator WICKER. Admiral Blake, why did the Navy cut seven Ticonderoga 

Aegis-class cruisers early and put two landing ship dock (LSD) amphibious ships in 

reduced operating status? 

Admiral BLAKE. As a result of fiscal constraints, the Navy chose to prioritize readiness over capacity. The fiscal year 2013 decision to decommission the cruisers (CG) 

and LSDs exemplify our resolve to provide a more ready and sustainable fleet within our budget constraints. The resources made available by these retirements will 

allow increased funding for training and maintenance. Both the cruisers and the 

LSDs were in need of significant maintenance investment and six of the seven cruisers required further investment to install BMD capability. Inactivating the CGs resulted in approximately $4.1 billion in savings across the FYDP, including manpower, helicopters, and maintenance savings and costs avoided by not executing 

combat system and hull, mechanical, and electrical upgrades. These savings were 

shifted to other portions of the fleet. Inactivation of the two LSDs in fiscal year 2014 

saved approximately $293 million each across the FYDP. These ships will be placed 

in Mobilization Category B allowing for reactivation should conditions warrant. The 

reduction in cruiser and amphibious capacity and shift to a more sustainable deployVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
52 

ment model will result in some reductions to the amount of presence the Navy will 

provide overseas in some select areas, or a change in the nature of that presence 

to favor innovative and lower-cost approaches. This decision supports wholeness of 

the force by not having more force structure than we can afford to maintain, equip, 

and man. 

19. Senator WICKER. Admiral Burke, how does retiring seven Ticonderoga Aegisclass cruisers early and putting two LSD amphibious ships in reduced operating status square away with the Secretary of Defense’s new strategic guidance, which puts 

renewed emphasis on the Asia-Pacific region? 

Admiral BLAKE. The Navy can meet the Defense Strategic Guidance with the current and projected force structure provided in Navy’s President’s budget for 2013 

submission. Keeping these ships that are increasingly expensive to maintain and operate, in service, would divert funding from other programs vital to the Navy’s mission, including the modernization and procurement of ships critical to fleet needs, 

and compete for scarce operations and maintenance dollars to sustain fleet readiness. Consistent with the Defense Strategic Guidance, the Navy will posture continuous, credible combat power in the Western Pacific and the Arabian Gulf/Indian 

Ocean to protect our vital interests, assure friends and allies, and deter potential 

adversaries. Naval forces remain flexible and agile, able to swing rapidly in response to emergent high priority requirements in other theaters, as well as to surge 

from U.S. homeports in the event of crises. The Navy can meet these challenges 

under our current operational tempo and deployment lengths. 

As reported in the Annual Report to Congress on Long-Range Plan for Construction of Naval Vessels for Fiscal Year 2013, all nine ships being retired will be placed 

in Out of Commission in Reserve Status (OCIR) and not in Reduced Operating Status (ROS). 

20. Senator WICKER. Admiral Burke, what is the Navy doing to enable it to reactivate at a later date the seven cruisers it plans to retire early? 

Admiral BLAKE. The Addendum to the Report to Congress on the Long-Range 

Plan for the Construction of Naval Vessels in Fiscal Year 2013 indicates the seven 

cruisers will be designated to be retained in an OCIR status. The seven cruisers will 

undergo a standard inactivation program and be placed in a Mobilization Category 

B status, which includes dehumidification and cathodic protection to prepare them 

for long-term storage and potential future reactivation. In the future, if a decision 

to return any/all of the cruisers to service is made, the Navy will have to determine 

the cost and duration of the activation availability needed to recommission these 

ships in a meaningful combat status after assessing individual ship material readiness and determining the required warfighting capability upgrades necessary to return the ship(s) to operation. 

21. Senator WICKER. Admiral Burke, what are the potential operational implications of these early retirements? 

Admiral BLAKE. The primary operational impact will be fewer assets to address 

geographic combatant commanders’ demand. To mitigate the impact of early ship 

retirements, other employment models have been adopted. For example, relocating 

Ballistic Missile Defense (BMD) destroyers to Rota, Spain, is one approach to source 

geographic combatant commanders’ demand. Innovative amphibious shipbasing concepts are more challenging since true capability must include Marine Corps resources, training, and embark factors. Nevertheless, Navy will continue to explore 

new employment models to place more capacity forward in order to maximize responsiveness and readiness of our force. 

Overall, the current and planned Navy battle force provides a fleet capable of 

sourcing combatant commanders’ demands with manageable risk. Going forward, 

our current shipbuilding plan balances the anticipated future demand for naval 

forces with expected resources. 

22. Senator WICKER. Admiral Blake, what would be the cost to keep these ships 

without retiring them? 

Admiral BLAKE. As a result of fiscal constraints, the Navy chose to prioritize readiness over capacity. The fiscal year 2013 decision to decommission the CGs and 

LSDs exemplify our resolve to provide a more ready and sustainable fleet within our 

budget constraints. The resources made available by these retirements will allow increased funding for training and maintenance. The reduction in cruiser and amphibious capacity and shift to a more sustainable deployment model will result in some 

reductions to the amount of presence the Navy will provide overseas in some select 

53 

areas, or a change in the nature of that presence to favor innovative and lower-cost 

approaches. This decision supports wholeness of the force by not having more force 

structure than we can afford to man, train, and equip. 

Based on additional analysis, the cost to retain and fully modernize the following 

three CGs scheduled for decommissioning in fiscal year 2013 (USS Cowpens (CG– 

63), USS Anzio (CG–68), and USS Vicksburg (CG–69)), including BMD upgrade and 

MH–60R helicopter procurement, is: 

Fiscal Year 2013: $640 million 

Fiscal Year 2014: $590 million 

FYDP: $2.7 billion 

The cost to retain and fully modernize the remaining cruisers is dependent upon 

the decisions to be made in fiscal year 2013. 

The Navy estimates overall cost to retain and modernize, maintain, man, and 

equip the two LSDs proposed for decommission is: 

Fiscal Year 2013: $63 million 

Fiscal Year 2014: $105 million 

FYDP: $512 million 

23. Senator WICKER. Admiral Blake, the Department of Defense has cited reversibility in connection with its new strategic guidance. What is the Navy doing to enable it to reactivate the seven cruisers at a later date after the ships are retired 

early? 

Admiral BLAKE. The Addendum to the Report to Congress on the Long-Range 

Plan for the Construction of Naval Vessels in Fiscal Year 2013 indicates the seven 

cruisers will be designated to be retained in an OCIR status. The seven cruisers will 

undergo a standard inactivation program and be placed in a Mobilization Category 

B status, which includes dehumidification and cathodic protection to prepare them 

for long-term storage and potential future reactivation. In the future, if a decision 

to return any/all of the cruisers to service is made, the Navy will have to determine 

the cost and duration of the activation availability needed to recommission these 

ships in a meaningful combat status after assessing individual ship material readiness and determining the required warfighting capability upgrades necessary to return the ship(s) to operation. 

QUESTIONS SUBMITTED BY SENATOR SUSAN M. COLLINS

MULTIYEAR PROCUREMENT SAVINGS

24. Senator COLLINS. Secretary Stackley, at a recent House Armed Services Committee hearing regarding Navy ship acquisition, industry officials testified that 

multiyear procurements (MYP) are incredibly important in terms of stability for the 

workforce, achieving efficient ship construction compared to annual procurements 

and reducing overall costs. Please discuss the affordability and possible savings 

achieved by an MYP for the DDG–51 destroyer program. 

Mr. STACKLEY. A MYP achieves affordability for the Navy by enabling industry 

to maintain a stable workforce which in turn facilitates efficiencies in the shipbuilding process including planning, scheduling, and material purchasing efforts. 

The MYP also enables the contractor to buy materials in economic order quantities 

providing for additional savings during construction. In addition, MYP contracts 

drive a more stable design configuration reducing the amount and cost of engineering changes over the course of the construction cycle. For the DDG–51 fiscal years 

2013–2017 MYP, the Navy estimates a cost savings of $1.5 billion during the next 

5 years, a net savings of 8.7 percent, in comparison to single year procurements over 

the same timeframe. A detailed breakdown of the savings is provided below: 

54 

IMPORTANCE TO THE FLEET OF THE DDG–51

25. Senator COLLINS. Admiral Blake, at a recent House Armed Services Committee hearing regarding Navy ship acquisition, you were asked: ‘‘what would the 

Navy have preferred to see stay in the budget if you had more resources?’’ Your response was, ‘‘the DDG and the SSN that we had to give up in 2014.’’ Please elaborate on this answer. 

Admiral BLAKE. The projected Navy battle force is fully capable of meeting the 

strategic guidance found in Sustaining U.S. Global Leadership: Priorities for 21st 

Century Defense, and as importantly, the construction plan that builds it, sustains 

the national shipbuilding design and industrial base. In the current budget environment, the Navy must carefully prioritize its commitments in the various areas of 

responsibility. Removing the DDG and SSN from the budget was purely a financial 

decision as, over the next decade, the Navy will see a decline in its DDG and SSN 

inventory resulting from the large number of Aegis CGs and Los Angeles-class SSNs 

reaching the end of their service lives. Buying additional DDGs and SSNs in the 

near term, provided they are affordable and do not disrupt other priorities, would 

help address this growing gap between the supply of these multi-purpose warships 

and the combatant commanders’ demands for more assets. 

26. Senator COLLINS. Admiral Blake, please describe the importance and flexible 

capabilities of these additional platforms in the context of the new defense strategy. 

Admiral BLAKE. The DDG–51 destroyer operates independently or as part of a 

carrier strike group (CSG), surface action group, or in support of Marine amphibious 

task force in environments that include air, surface, and subsurface threats. Fiscal 

year 2010 and follow on DDG–51s also provide BMD. These ships respond to low 

intensity conflict, coastal, and littoral offshore warfare scenarios as well as open 

ocean conflict by providing power projection and forward presence and conducting 

escort operations at sea. 

The Virginia-class nuclear-powered attack submarine’s high endurance and covert 

nature make it an ideal platform for anti-access/area denial environments. The complement of sensors, torpedoes, and Tomahawk missiles enable the Virginia-class 

submarine to execute missions including anti-submarine warfare, anti-surface warfare, strike warfare, intelligence surveillance and reconnaissance, and special warfare. 

These two multi-mission warships would provide additional capacity and enhance 

the Navy’s ability to accomplish the primary missions set out in the new Defense 

Strategic Guidance, including deter and defeat aggression, project power despite 

anti-access/area denial challenges, and stabilizing global presence. 

FORCE STRUCTURE AND REQUIREMENTS

27. Senator COLLINS. Admiral Blake, in recent years, I have repeatedly cited the 

analyses of the 2010 Quadrennial Defense Review Independent Panel and the Center for New American Security that have called for a fleet of 328 ships or more, even 


419sea2.eps
55 

as each CNO since 2005 has said that 313 ships is the minimum number required. 

You testified last month that the unconstrained combatant command is probably 

about 500 ships. That is 100 ships more than Admiral Greenert testified before Congress last year when he was still at Fleet Forces Command, and 215 ships more 

than we will have in our fleet now or we will have in 5 years. This week at the 

Sea-Air-Space Symposium, the CNO indicated the Navy cannot run at its current 

pace for much longer, that the pace of operations is unsustainable. In your view, 

how do we address this problem? 

Admiral BLAKE. The Navy is addressing the current unsustainable pace of operations through our fiscal year 2013 budget submission. The Navy plans to prioritize 

improving readiness over capacity and shift to a more sustainable deployment model 

by: 

• Fully funding ship maintenance and midlife modernization periods, and 

continuing a series of actions to address surface ship material condition 

• Increasing investment in training and adjusting the FRTP to be more 

sustainable and provide units adequate time to train, maintain, and achieve 

the needed fit and fill in their manning between deployments 

• Forward basing and forward deploying ships to reduce transit time, so 

that the Navy-Marine Corps team can continue delivering the rapid response our Nation requires of us 

• Employing rotating crews on mine countermeasures, patrol coastal class 

ships, and soon LCSs as the force grows, and further studying the benefits 

and costs of expanding and using rotational crewing 

The Navy is in the process of conducting a Force Structure Assessment (FSA) 

based on the new Defense Strategic Guidance (DSG). The FSA will evaluate the capabilities needed to execute the DSG, the ships and aircraft needed to deliver these 

capabilities, and the resulting inventory requirements. Overall, the proper mix of 

critical capabilities necessary to support the DSG will prove more significant than 

the exact number of ships in the fleet. 

SURFACE COMBATANT SERVICE LIFE ASSUMPTIONS

28. Senator COLLINS. Admiral Blake, the Navy has proposed to retire six nonBMD-capable cruisers, at an average service life of 21 years, because it was cheaper 

to retire them and buy new than it was to upgrade and modernize them to perform 

BMD. I understand that the projected service life for these ships was 30 years. I’m 

concerned that this one case is actually the tip of the iceberg of a significant issue 

the Navy and Congress must face together, even if we are capable of maintaining 

ships for more than 3 decades, the prohibitive cost to perform the necessary maintenance may lead us to question whether the maintenance investment is worth the 

benefit. The shipbuilding plan makes considerably optimistic assumptions that all 

destroyers will at least reach 35 years of service life and the newer versions will 

reach 40-year service lives. The actual retirement data for these ships suggests that 

a more realistic assumption for the service life of these ships is much less than that. 

Are the Navy’s assumptions for estimated service life based upon the Navy’s actual 

experience with those classes of ships or is it based upon a different model the Navy 

has developed? 

Admiral BLAKE. Expected Service Life (ESL) is based in part on previous shiptype platform experience, design, and materials, but is also tied to force capability, 

ship maintenance funding, ship manning, and recapitalization requirements. An 

ESL is planning guidance, not a technical limitation. The Navy uses the ESL of 

ships as an estimate on which to base long-range ship planning, budget development, and force structure for procurement or recapitalization. 

Actual service life depends on maintenance, modernization, and operational employment. Additionally, other factors such as design changes or modifications made 

to the ship, or a design that is not amenable to a subsequent operational system 

upgrade, may make it infeasible to continue its service. Without ongoing ship maintenance and modernization, ships will not achieve their expected service lives. 

For destroyers specifically, the Navy has implemented a DDG Modernization Program to upgrade each ship’s systems and extend service life to 40 years. The Navy 

will closely monitor the material condition of these ships during the various maintenance and modernization periods as they progress through their service lives to enable them to reach a 40-year ESL. The Navy will also utilize spiral upgrades to existing ships to maximize ship operational availability, enable learning curve efficiencies, and perform continuous and emergent maintenance. The Navy will endeavor to operate every ship procured to the very end of its ESL. 

56 

The shipbuilding plan takes into account the expected retirement of ships during 

the 30-year period. By using open, flexible payload bays and open architecture combat systems, the Navy is designing ships that can accommodate capability upgrades 

throughout their service lives in order to remain operationally and tactically relevant. The Navy policy is to ensure all ships reach their ESL. ESL extensions could, 

in a span of years, reduce the numbers of ships that must be recapitalized; however, 

any deferral of shipbuilding costs would be offset by the additional cost of maintenance, system upgrades, and modernization required to keep the ships operational 

and tactically relevant in their latter years. 

[Whereupon, at 11:20 a.m., the subcommittee adjourned.] 

(57) 

DEPARTMENT OF DEFENSE AUTHORIZATION 

FOR APPROPRIATIONS FOR FISCAL YEAR 

2013 AND THE FUTURE YEARS DEFENSE 

PROGRAM 

THURSDAY, APRIL 26, 2012 

U.S. SENATE, SUBCOMMITTEE ON SEAPOWER, COMMITTEE ON ARMED SERVICES, Washington, DC. 

MARINE CORPS ACQUISITION PROGRAMS 

The subcommittee met, pursuant to notice, at 10:05 a.m. in room 

SR–222, Russell Senate Office Building, Senator Jack Reed (chairman of the subcommittee) presiding. 

Committee members present: Senators Reed, Blumenthal, Wicker, and Ayotte. 

Majority staff member present: Creighton Greene, professional 

staff member; and Thomas K. McConnell, professional staff member. 

Minority staff member present: Bryan D. Parker, minority investigative counsel. 

Staff assistant present: Brian F. Sebold. 

Committee members’ assistants present: Carolyn Chuhta, assistant to Senator Reed; Ethan Saxon, assistant to Senator 

Blumenthal; Joseph Lai, assistant to Senator Wicker; and Brad 

Bowman, assistant to Senator Ayotte. 

OPENING STATEMENT OF SENATOR JACK REED, CHAIRMAN 

Senator REED. The subcommittee will come to order. I thank our 

ranking member, Senator Wicker, and my colleagues. We particularly thank Sean J. Stackley, the Assistant Secretary of the Navy 

for Research, Development, and Acquisition; and Lieutenant General Richard P. Mills, USMC, the Deputy Commandant for Combat 

Development and Integration and Commanding General for Marine 

Corps Combat Development Command, for joining us here today. 

We are grateful for your dedicated service to the Nation, the Marine Corps, and the marines and families who represent us so well 

and so bravely every day. So thank you, gentlemen, for what you 

do. 

A year ago at our last hearing on this topic, Marine Corps 

ground force acquisition programs were in turmoil following the 

termination of the Expeditionary Fighting Vehicle (EFV), amidst 

the realization that the Marine Corps could not afford either the 

58 

cost to procure or to subsequently operate and maintain the portfolio of ground vehicles it had on the books. 

In the last year, the Marine Corps leadership has taken action 

to address this impending bow wave. The target price for the replacement of the terminated EFV, called the Amphibious Combat 

Vehicle (ACV), is about one-third less than the EFV. This cost reduction is to be achieved mainly by greatly reducing water speed 

and the complexity associated with transforming a tracked combat 

vehicle into a speedboat. This procurement cost reduction should 

directly translate into operations and maintenance (O&M) savings 

as well. 

The Army and the Marine Corps also have dramatically reduced 

the costs of the Joint Light Tactical Vehicle (JLTV) and the Marine 

Corps has pared their projected inventories of trucks and other 

wheeled tactical vehicles by 25 percent. 

In the National Defense Authorization Act (NDAA) for Fiscal 

Year 2012, the committee enacted a requirement for the Marine 

Corps to conduct a comprehensive vehicle portfolio life cycle affordability study before proceeding further with its modernization 

plans. That study should be completed soon and we hope that it 

will show whether the actions that the Marine Corps has taken 

thus far are sufficient. 

For the remainder of my opening statement, I want to focus on 

what I see as the central planning issue facing the Marine Corps 

at this time. Since the end of the Cold War and Operation Desert 

Storm, the size of the assault echelons of the largest amphibious 

operation that the Navy and Marine Corps could conduct has dwindled from four Marine expeditionary brigades (MEB) to two. The 

entry assault portion of that force consists of six battalions. The 

Marine Corps currently has enough Amphibious Assault Vehicle 

(AAV)–7 Amphibious Assault Tractors to self-deploy all of those 

battalions ashore plus many more. The supporting tanks, heavy artillery, light armored vehicles, and trucks would be brought ashore 

with ship-to-shore connectors once the assault infantry has established a secure beachhead. 

When the cost of the EFV ballooned in the middle of the last decade, the Marine Corps took two related steps. It cut the number 

of EFVs it planned to produce almost in half, reducing the number 

of infantry battalions that could be self-deployed in amphibious assault craft from 12 to 8; and it initiated plans to procure a nonamphibious wheeled armored personnel carrier to lift 4 infantry 

battalions. 

This would appear to represent an erosion of the Nation’s amphibious assault capability. Marine Personnel Carriers (MPC), at 

least as currently envisioned, would require the use of ship-to-shore 

connectors to enter the battle and cannot conduct an assault 

against a defended shoreline. These connectors, the Landing Craft 

Air Cushions (LCAC) and Landing Craft Utility (LCU), are large, 

expensive, and few in number. To the extent they are used to 

transport infantry assault forces, they cannot be used to move 

tanks, artillery, and other critical supporting elements. The rate at 

which combat power could be built up on shore would be substantially decreased and there would be increased risk to the infantry 

assault forces themselves. 

59 

In addition, whereas one amphibious tractor can lift a rifle 

squad, it would take two MPCs to do so, which will consume significantly more volume and weight on already stressed amphibious 

shipping. 

When the Marine Corps terminated the EFV and decided to acquire a substantially cheaper substitute, the committee assumed 

that the Marine Corps would want to return to a strategy of acquiring enough self-deploying amphibious tractors to equip 12 infantry assault battalions. This assumption was buttressed by the 

likelihood that a slower speed assault vehicle would have the 

weight margin to support armor protection equal to a prospective 

armored personnel carrier. 

However, the Marine Corps may be headed in the opposite direction, towards a further reduction in the acquisition objective for the 

ACV. The subcommittee is informed that the Marine Corps is seriously considering an option to limit ACV procurement to four infantry assault battalions and making up the difference with MPCs 

and other vehicles such as mine-resistant ambush protected 

(MRAP) vehicles. 

Marine Corps staff have stated that there is an independent requirement for a wheeled armored personnel carrier apart from any 

consideration of ACV cost, mobility, or armored protection, and 

rather than sustaining the time-honored doctrine that splitting 

rifle squads in two, necessitated by the small internal volume of 

wheeled armored personnel carriers, would seriously degrade combat capability, this is being characterized as a potentially positive 

method of coping with distributed land warfare environments. 

We are concerned that substituting wheeled armored personnel 

carriers for amphibious tractors could erode the Marine Corps’ amphibious assault capability, the capability that separates the Marine Corps from the Army in one dimension at least. The Marine 

Corps is now conducting a so-called fleet mix study to help it decide 

how many of what vehicle types it should buy in the future. 

The Marine Corps also points out that it is possible to postpone 

a decision on how many ACVs to procure until full-scale development is underway. I look forward to a dialogue about this issue 

today with our witnesses. 

Before I turn it over to Senator Wicker, we are at a critical moment. The Marine Corps has performed magnificently for the last 

10 years in a non-amphibious role. In fact, amphibious operations 

have essentially taken a back seat to the extraordinary and courageous actions in Iraq and Afghanistan, dealing in a counterinsurgency environment, using equipment that’s designed for urban 

warfare, not beach assaults. We’re at the point now where doctrinally, operationally, and in terms of acquisition, we have to 

make a decision, are we getting back into the amphibious business 

with both feet or are we putting one foot in and still looking back 

at potential operations that require skill, courage, but they’re not 

amphibious operations. 

That’s why I think this hearing and the timing of this hearing 

and your deliberations are so important and I wanted to go at 

length at some of the concerns that we have. These are concerns 

I think we all share. 

60 

With that, let me recognize the ranking member and apologize 

for the length of my statement. 

STATEMENT OF SENATOR ROGER F. WICKER 

Senator WICKER. Thank you, Mr. Chairman, for holding this important hearing, and thanks to our witnesses, very talented public 

servants, for your participation and continued service to our Nation. 

Since our last hearing on the Marine Corps acquisition programs, 

we’ve witnessed some significant developments. In August, Congress passed and the President signed the Budget Control Act 

(BCA), which threatens further, deeper cuts to our military. Meanwhile, the United States is rebalancing its national security strategy and realigning its forces with greater focus on the Asia-Pacific 

region. However, the President’s proposed budget seeks to reduce 

Marine Corps end strength by 20,000 marines and delay or defer 

certain weapons system purchases. 

I would like our witnesses to elaborate on the Marine Corps’ 

strategy for modernizing its ground combat and tactical vehicle 

fleet, including the ACV, the JLTV, and the MPC. I’m particularly 

interested to learn how the Marine Corps plans to meet its ground 

vehicle requirements within current and projected budget constraints, yet still maintain high operational capability and readiness. 

Our Nation’s increased emphasis on the Asia-Pacific region underscores the importance of the core competency that distinguishes 

the Marine Corps from other ground forces, its ability to conduct 

amphibious assaults against a defended shoreline. However, in today’s threat environment the Marine Corps cannot continue to rely 

on the Vietnam era AAV. 

Many supporters of the Marine Corps, including this Senator, 

were disappointed by the cancellation of the EFV, but we also understood that it was not a financially viable solution. I hope our 

witnesses can explain how the current program will benefit from 

the more than $3 billion spent on this EFV. The American taxpayers need to be assured that this program was not a complete 

loss. As such, I look forward to hearing from our witnesses the specific steps the Marine Corps is taking on the ACV program to ensure the delivery of a vehicle that: one, meets Marine Corps requirements; two, is cost effective; and three, is delivered as quickly 

as possible. 

On the issue of the JLTV, I’m encouraged by the progress that 

the Marine Corps and the Army have made on this multi-service 

program. The JLTV Program Office will award prototype development contracts in June. I trust our witnesses will reassure this 

subcommittee that the Marine Corps JLTV requirements are stable 

to ensure that the Marine Corps can afford to field this important 

replacement for our HMMWVs as soon as possible. 

With regard to both the ACV and the JLTV, I’m told that the 

Marine Corps is relying on competition to gauge early on what is 

technologically feasible and to reduce cost. Secretary Stackley, I 

commend you and your team for your efforts to pursue competitive 

acquisition programs for the Navy and Marine Corps. However, 

competition requires viable competitors, which we do not always 

61 

have. So I’d like our witnesses’ best assessment of the state of the 

U.S. industrial base for ground combat and tactical vehicles and 

what can be done to sustain the vitality of our manufacturing base 

at the contractor and supply chain levels. 

Finally, the Marine Corps faces significant budget challenges 

ahead. As I have mentioned repeatedly, the BCA passed by Congress and signed by the President last August requires sequestration to be implemented across all departments, including the Department of Defense (DOD). Sequestration is not a hypothetical. It 

is the law of the land. On January 3rd of next year, 250 days from 

today, sequestration will take place unless legislation is passed to 

undo it and signed by the President. 

Our national defense is solely a Federal responsibility. Defense 

spending is also a two-fer, as we all know. It supports our national 

security and our high technology manufacturing workforce. 

The Marine Corps budget accounts for approximately 8 percent 

of the DOD total budget. I’m gravely concerned that sequestration 

could disproportionately impact the Marine Corps on everything 

from modernization to readiness. As such, I hope our witnesses 

today will elaborate on their assessment of the impact that sequestration will have on our expeditionary Marine Corps and our industrial base. 

Thank you very much, Mr. Chairman. 

Senator REED. Thank you very much, Senator Wicker. 

We’ll recognize Secretary Stackley and then General Mills, if he 

has comments. Mr. Secretary, please. 

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

Mr. STACKLEY. Yes, sir. Chairman Reed, Senator Wicker, thank 

you for the opportunity to appear before you today to address Marine Corps modernization. I will be testifying alongside Lieutenant 

General Mills and if it’s acceptable to the subcommittee, I propose 

to keep opening remarks brief and submit a formal statement for 

the record. 

Senator REED. Without objection and with great enthusiasm. 

[Laughter.] 

Mr. STACKLEY. Sir, your Marine Corps serves as America’s expeditionary force in readiness, a balanced air-ground-naval force, forward deployed and forward engaged. Today, over 30,000 marines 

are deployed around the world, on the ground in Afghanistan in 

support of Operation Enduring Freedom (OEF), and at sea deployed aboard amphibious ships operating off coasts from Northern 

Africa to Japan, conducting air operations and ship-to-shore operations, building partnerships, deterring enemies, and responding to 

crises and contingencies. 

Unequivocally, our top priority is to support these marines, who 

by their service and sacrifice have placed in the hands of our Nation’s leaders the tools and options that they need to respond to today’s world events and shape future events, all the while defending 

those freedoms we hold most dear. 

Over the past year, the Navy and Marine Corps have responded 

to a rapid succession of unpredicted political upheavals, natural 

62 

disasters, social unrest, piracy, and emerging threats in various unstable areas of the world’s littoral regions. Marines were first on 

the scene to provide humanitarian assistance and disaster relief in 

Japan in the wake of that nation’s devastating tsunami; the first 

to fly air strikes over Libya in Operation Odyssey Dawn. They were 

on scene to evacuate noncombatants from Tunisia and reinforced 

our embassies in Egypt, Yemen, and Bahrain. Of course, all of 

these and similar global response operations were conducted 

against the backdrop of sustained combat and counterinsurgency 

operations in Afghanistan. 

To say that your Navy-Marine Corps team is the best at what 

they do does not do justice, for among the world’s fighting forces, 

none other can do what they do. Accordingly, we will develop for 

the current and future force those capabilities that give our marines the ability to respond rapidly and to shape, deter, defeat, and 

deny our enemies sanctuary. 

In readying for its role as the post-OEF expeditionary force in 

readiness, the Marine Corps will accept risk in extended ground 

operations while reshaping the force for scaleable crisis response 

missions such as countermeasures, counterproliferation, disaster 

relief, protection of U.S. citizens overseas, security cooperation, and 

support of our allies. We’ll rebalance our force posture back to the 

Pacific, remain postured to the Middle East, yet remain globally responsive, ever mindful of the world’s choke points and prepared to 

respond where needed, as needed, as directed by the President. 

The seamless maneuver of marines from the sea to conduct operations ashore, whether for training, humanitarian assistance, or 

combat operations, remains a key priority as the Marine Corps 

shapes its future force. To this end, the Marine Corps modernization strategy includes sustainment of amphibious lift capabilities as 

outlined in the Navy’s 30-year shipbuilding plan. Landing craft, air 

cushion and utility, will be replaced with more capable, more reliable connectors. Recapitalization of critical aviation capabilities, 

from the short takeoff vertical landing (STOVL) version of the Joint 

Strike Fighter (JSF) to modernized attack and utility H–1 helicopters to the development of the heavy lift H–53K helicopter. 

Modernization of the Marine Corps’ expeditionary combat command, control, and communication capabilities with the development of the Ground-Air Task-Oriented Radar, the Common Aviation Command and Control System, and the Global Combat Support System; and modernization of the Marine Corps’ ground combat vehicles. 

The Navy has developed and is implementing a four-phase strategy, the Ground Combat Tactical Vehicle Strategy, to guide the 

planning, programming, and investment required to provide balanced maneuver and mobility capabilities to the force. The strategy 

is focused on achieving the mix of wheeled and tracked vehicles 

that best balances performance, payload, survivability, fuel efficiency, transportability, and cost. 

It is within this construct that the Navy will determine the future capabilities and numbers of the ACV, the JLTV, and the MPC. 

Within the ground vehicle portfolio, our top priority is the ACV. In 

the highly complex and uncertain future security environment, the 

execution of amphibious operations will require a self-deploying 

63 

amphibious vehicle. This vehicle is essential to our ability to conduct surface littoral maneuver and seamlessly project ready-to-fight 

marines ashore from sea to land in permissive, uncertain, and hostile environments. 

It allows us to maximize available amphibious lift and increase 

the rate at which we build power ashore. This capability is key to 

overcoming access challenges posed by the lack of improved infrastructure or the threat of an adversary. 

Throughout 2011, we conducted a comprehensive systems engineering review of amphibious vehicle operational requirements. 

The review evaluated the requirements for water mobility, land 

mobility, lethality, and force protection for the future combat environment. It provided well-informed preliminary cost estimates for 

development, production, and sustainment for the range of capabilities suited for these requirements. The systematic review ultimately provided well-informed analytical data to support the currently ongoing ACV analysis of alternatives (AOA). 

Alongside the ACV program, the JLTV addresses shortfalls for 

select light combat vehicles which perform our most demanding 

missions. These two critical programs are being developed in concert with the overall integrated vehicle strategy, which includes select upgrade and sustainment of the HMMWV fleet, upgrade of the 

legacy AAV as a bridge to the ACV, continued research and development (R&D) for the MPC in support of vehicle fleet mix alternatives, and management of the overall vehicle fleet, reduced by 

greater than 20 percent as a result of the most recent force structure review. 

For our entire portfolio and particularly the ACV and JLTV, the 

Marine Corps has taken a textbook approach to developing these 

critical combat vehicles, placing priority on getting the requirements right at the front end, employing mature technology where 

possible to reduce cost and risk in development, establishing affordability as a requirement, conducting comprehensive systems engineering and cost analysis, streamlining the acquisition process 

where feasible, leveraging competition, and, perhaps most importantly, integrating the requirements and acquisition team to enable 

effective cost performance trades throughout the requirements definition and systems development process. 

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

you today. We look forward to answering your questions. 

[The jont prepared statement of Mr. Stackley and General Mills 

follows:] 

JOINT PREPARED STATEMENT BY HON. SEAN J. STACKLEY AND

LT.GEN. RICHARD P. MILLS, USMC 

INTRODUCTION

Chairman Reed, Senator Wicker, and distinguished members of this subcommittee, we are honored to appear here today. We want to thank you for your 

continued support to our sailors, marines, and their families, and we appreciate the 

opportunity to address Marine Corps acquisition programs. 

As America’s Expeditionary Force in Readiness, the Marine Corps’ ground modernization investments support our Nation’s ability to be prepared for all manner 

of crises and contingencies. As a ‘‘middleweight force,’’ marines do not seek to supplant any Service or ‘‘own’’ any domain. Rather, Marine forces transit in a ‘‘lane’’ 

that passes through all domains—land, sea, air, space and cyber—operating capably 

and freely throughout the spectrum of threats, whether they be conventional, irregVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00069 Fmt 6601 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
64 

ular or the uncertain hybrid areas where they overlap. Key is the ability to deploy 

and employ from the sea in austere environments at a time and place of our choosing—a significant asymmetric, strategic and operational advantage that has been 

used more than 130 times in the past 2 decades. 

Our ground investments allow us to develop and sustain a ready, middleweight 

force that is easily deployable, energy efficient, and highly expeditionary. Complementary to our ground investment, we are making parallel investments in amphibious ships, amphibious combat vehicles, connectors such as the landing craft air 

cushion (LCAC) and landing craft utility (LCU), naval surface fire support assets, 

mine counter measures, radars, command and control, vertical lift, and fixed-wing, 

short takeoff and vertical landing (STOVL) aircraft, and many other programs critical to maintaining tactical and operational readiness. These investments are designed to provide a full range of complementary capabilities for our Nation’s Expeditionary Force in Readiness. 

The Department of the Navy and its Marine Corps are fully aware of the fiscal 

challenges facing our Nation and have critically examined and streamlined our capabilities for the future. We have accepted our share of the additional risk associated with reduced resources; however, we have also sought innovative and practical 

means to mitigate that risk. We leverage programs, technologies, technical skills 

and competencies of other Services to ensure we deliver the most effective and affordable combat capability to our marines. We also seek to capitalize on our industrial base to identify and pursue innovative and ground-breaking solutions to meeting the warfighter’s needs and to reduce acquisition and sustainment costs of our 

systems. 

OPERATING ENVIRONMENT

During the past year, the Navy and Marine Corps have responded to a rapid succession of unpredicted political upheavals, natural disasters, social unrest, piracy 

and emerging threats in various unstable areas of the world’s littoral regions. Marines were first on the scene to provide humanitarian assistance and disaster relief 

in Japan in the wake of a monumental tsunami; were the first to fly air strikes over 

Libya; evacuated noncombatants from Tunisia; and reinforced our embassies in 

Egypt, Yemen, and Bahrain. While accomplishing all of that, marines continued sustained combat and counterinsurgency operations in Afghanistan. 

History has shown that crises usually come with little or no warning; stemming 

from the same conditions of uncertainty, complexity and chaos continue as risks 

across the world today. Regardless of the financial pressures placed on governments 

and markets today, crises requiring military intervention undoubtedly will continue 

tomorrow. In this environment, physical presence and readiness matter significantly. As a maritime nation, dependant on the sea for the free exchange of ideas 

and trade, America requires security both at home and abroad. Since the 1990s, 

America has been reducing its foreign basing and presence, bringing forces back 

home. This trend is not likely to change in the face of the strategic and budget realities we currently face. There remains an enduring requirement to balance presence 

with cost. In the past, the Nation has chosen to depend on the Navy and Marine 

Corps to provide a lean and economical force of an expeditionary nature, operating 

forward and in close proximity to potential trouble spots. Investing in naval forces 

that can respond to a wide range of crisis situations creates options and decision 

space for our Nation’s leaders. 

ROLE OF THE MARINE CORPS

New strategic guidance issued by the President and the Secretary of Defense provides the framework by which the Marine Corps will balance the demands of the 

future security environment with the realities of our current budget. The guidance 

calls for a future force that will ‘‘remain capable across the spectrum of missions, 

fully prepared to deter and defeat aggression and to defend the homeland and our 

allies in a complex security environment.’’ As America’s force in readiness, the Marine Corps provides efficient and effective insurance against the unexpected with an 

adaptive, multi-capable force that has the reach to defend American citizens, commerce and our vital national interests. 

Bridging a seam in our Nation’s defense between heavy conventional and Special 

Operations Forces (SOF), the U.S. Marine Corps is light enough to arrive rapidly 

at the scene of a crisis, but heavy enough to carry the day and sustain itself upon 

arrival. Operating in a state of persistent forward presence aboard amphibious warships, your Marine Corps remains the most economical, agile and ready force immediately available to deter aggression and respond to crises. This flexible and multicapable force maintains high readiness levels and can mitigate risk; satisfy the 

65 

1 Reconstitution refers to actions beyond reset, taken during or after operational employment, 

to restore and/or upgrade combat capability to full-spectrum operational readiness. Reconstitution includes personnel, equipment, and training. Force reconstitution includes activities from 

normal sustainment (rearm, refuel, recover (dwell), repair, and replace), through reorganization 

and regeneration of units to redeployment. As to equipment, our reconstitution efforts include 

reset, replenishing tables of equipment, and modernization. 2This $3 billion liability is our ‘‘strategic’’ reset—which is the cost to reset our Afghanistan 

equipment to a zero-hours/zero-miles condition. In addition to strategic reset, we have a $1.3 

billion OCO request in fiscal year 2013—primarily to cover cost of war issues; but some of which 

is slated for strategic maintenance for reset. The precise amount of the $1.3 billion to be used 

for reset depends on the quantity of equipment that flows out of Afghanistan and our depot capacity. 

standing strategic need for crisis response; and, when necessary, spearhead entry 

and access for the Joint Force. Given likely future operations set forth in the new 

guidance—ranging from defeating rogue actors to responding to natural disasters— 

the Nation should invest in the small premium it pays for high readiness levels 

within its naval amphibious forces. Because our Nation cannot afford to hold the 

entire Joint Force at such high rates of readiness, it has historically ensured that 

marines remain ready, and has repeatedly relied on marines to fill gaps, buy time 

for decision makers, ensure access, or respond when and where needed. 

As a ‘‘middleweight force,’’ the Marine Corps is optimized for rapid deployment, 

versatile employment, and self-sustainment via Marine Air-Ground Task Forces 

(MAGTF), which are balanced, combined-arms formations under a single commander. All MAGTFs consist of four core elements: a Command Element, Ground 

Combat Element, Aviation Combat Element, and Logistics Combat Element. 

MAGTFs are scalable in size and capability. 

Both the Secretary of Defense and the Secretary of the Navy have reaffirmed the 

necessity of the Marine Corps’ amphibious assault mission. Accordingly, we must 

develop an affordable and capable amphibious combat vehicle to project marines 

from sea to land in permissive, uncertain, and hostile environments. We ask for 

your continued support to reach this goal. 

In order to adapt to the future operating environment and address access challenges, the Navy and Marine Corps are pursuing a number of other programs that 

leverage operational lessons learned and adopt acquisition best practices. 

RESET

Reset is a subset of reconstitution and comprises the actions taken to restore 

units to a desired level of combat capability commensurate with the units’ future 

missions; and after more than a decade of combat, this will require an unprecedented level of effort.1 The Marine Corps is resetting its forces ‘‘in stride’’ with fighting the war in Afghanistan and transitioning to the new Defense Strategic Guidance. Unlike previous post-conflict periods, such as after Operation Desert Storm, 

we do not anticipate taking an ‘‘operational pause’’ to reset as we transition from 

Operation Enduring Freedom (OEF). 

The Marine Corps’ Operation Enduring Freedom Ground Equipment Reset Strategy, which was released in January 2012, helps to identify the equipment we will 

reset or divest. We currently estimate, subject to change, that the ground equipment 

reset liability is in excess of $3 billion.2 This forecast is primarily based on the replacement of combat losses, the repair of items to serviceable condition, and the extension in service life of selected items. The Strategy prioritizes reset requirements 

along with investment and modernization decisions to develop our middleweight 

force, per the Defense Strategic Guidance. 

Our reset effort is already underway and it maximizes the Marine Corps’ depot 

capacity, where we expect the bulk of reset execution to occur for 2 to 3 years after 

our equipment’s return to the depot. The continued availability of our total ground 

equipment depot capacity at both Barstow, CA, and Albany, GA, is essential for 

timely reset, our ability to generate readiness, and to surge in response to wartime 

demand. Continued congressional support to our long-term reset challenge is critical 

to reset the Marine Corps’ equipment. 

We are examining future equipment requirements with an ongoing comprehensive 

review of the Marine Corps’ equipment inventories. This effort will validate reset 

strategies, future acquisition plans, depot maintenance programming, and required 

modernization initiatives. This review will incorporate the lessons we learned from 

over a decade of combat to upgrade our tables of equipment to reflect the way we 

fight today and our warfighting requirements of tomorrow. 

66 

MODERNIZATION

In conjunction with reset efforts, the Marine Corps is undertaking several initiatives to conduct only essential modernization of the Marine Corps Total Force. This 

will place the Corps on a sustainable course to achieve institutional balance. We are 

doing so by judiciously developing and procuring the right equipment needed for 

success in the conflicts of tomorrow, especially in those areas that underpin our core 

competencies. As such, we ask for continued Congressional support to modernize 

equipment and maintain a high state of readiness that will place us on solid footing 

in a post-Afghanistan security environment. While budgetary pressures will likely 

constrain modernization initiatives, we will mitigate pressure by continuing to 

prioritize and sequence both our modernization and sustainment programs to ensure 

that our equipment is always ready and that we are proceeding in a fiscally responsible manner. Modernization programs that require significant additional funding 

above current levels will be evaluated for continued operational requirement and capability/capacity modification. 

Our force structure, and associated vehicles, are highly leveraged investments. 

They optimize strategic lift capability and provide aggregate utility across the range 

of military operations. Our ground modernization strategy is to sequentially modernize priority capabilities, reduce equipment requirements wherever possible, and 

judiciously sustain remaining equipment. The current baseline budget allows for 

equipment modernization on a reasonable timeline. Possible future reductions in the 

baseline budget will result in delay, modification or elimination of key modernization programs. Modernization in the following areas is critical to maintaining operational capabilities and readiness: 

• Ground Combat and Tactical Vehicles; 

• Aviation; 

• Preparing for Future Battlefields; 

• Amphibious and Pre-positioning Ships; 

• Expeditionary Energy; and 

• Intelligence, Surveillance and Reconnaissance. 

GROUND COMBAT AND TACTICAL VEHICLE STRATEGY

The programmatic priority for our ground forces is the seamless maneuver of marines from the sea to conduct operations ashore whether for training, humanitarian 

assistance or combat. The Marine Corps’ Ground Combat and Tactical Vehicle Strategy (GCTVS) is the basis for planning, programming and budgeting to provide balanced maneuver and mobility capabilities to operating forces. The GCTVS is focused 

on achieving the right mix of assets, while balancing performance, payload, survivability, fuel efficiency, transportability and cost. Vehicles comprising the GCTVS include the entire inventory of wheeled and tracked vehicles, and planned future capabilities, including the Amphibious Combat Vehicle (ACV), Joint Light Tactical Vehicle (JLTV), and the Marine Personnel Carrier (MPC). 

The current priorities within the GCTVS include the following: 

• Develop a modern ACV; 

• Develop and procure JLTV; 

• Sustain a portion of the High Mobility Multipurpose Wheeled Vehicles 

(HMMWVs) through 2030; 

• Initiate a legacy Assault Amphibious Vehicle upgrade as a bridge to ACV; 

• Continue research and development in MPC through fiscal year 2014 to 

identify the most effective portfolio mix of vehicles; and 

• Limit procurement of vehicles to reduced Approved Acquisition Objective 

estimates as identified. 

Our top ground modernization priority is the ACV. Based on our 10-year investment plan, we intend to address our light combat vehicle shortfalls both before and 

after development of the ACV. Our JLTV strategy depends on procuring those vehicles with the most demanding mission profiles before we turn our focus to ACV. The 

biggest risk to sequential modernization is schedule—not program schedules but 

rather decision schedules. If JLTV is delayed, we lose an opportunity that we cannot 

readdress until after ACV procurement in the late 2020s. 

Throughout 2011 and informed by cost, we conducted a comprehensive systems 

engineering review of amphibious vehicle operational requirements. The review 

evaluated the requirements for water mobility, land mobility, lethality and force 

protection of the future environment. The identification of essential requirements 

helped to drive down both the production and the sustainment costs for future amphibious vehicles. 

67 

We are conducting an Analysis of Alternatives (AoA) to review six ACV options. 

The results of the AoA are expected to be complete in June of this year, and the 

results will inform the direction and scope of the ACV program. The MPC program 

is maturing as a wheeled armored personnel carrier that is complementary to the 

ACV as a solution to the general support lift requirements of Marine Forces operating in the littorals. 

We are firmly partnered with the U.S. Army in fielding a Joint Light Tactical Vehicle to replace a portion of our legacy light lift utility vehicles. Our long-term participation in this program remains predicated on development of a cost-effective vehicle, whose payload integrates seamlessly with our expeditionary operations and 

likely amphibious and strategic lift profiles. The Joint Requirements Oversight 

Council approved the JLTV Capability Development Document, and the Department 

of the Navy is working with the Army to establish a program of record at Milestone 

B in the third quarter of fiscal year 2012. Our approach to JLTV is as an incremental acquisition, and our objective for Increment I currently stands at 5,500 vehicles. 

We are focused on developing and procuring Multiple Mission Role Variants of the 

JLTV family of light vehicles to modernize for the most demanding missions, providing increased payload, energy efficiency, performance and protection. The JLTV 

will replace 30 percent of the High Mobility Multipurpose Wheeled Vehicle 

(HMMWV) family. At this time, JLTV is on schedule, affordable, and performing to 

meet essential validated Marine Corps light combat capability gaps. 

Last fall, the Marine Corps conducted an affordability review of the portfolio— 

which included the process of using Knowledge Points to tailor JLTV cost versus 

capability decisions. Our end-state is to develop a more relevant and affordable portfolio of combat and tactical vehicles. Through procurement and service-life extension, we will provide the capacity for Marine forces to respond to crises with up to 

a Marine Expeditionary Force-sized forcible entry operation, address irregular 

threats, and conduct sustained operations ashore when necessary. 

ADDITIONAL MODERNIZATION

To complement future ground and amphibious vehicles, the Marine Corps is investing in other key support areas. For example, the Corps is leading the way to 

build a next generation medium-range radar system called the Ground/Air Task-Oriented Radar. This system will replace five radars, and will be significantly more advanced in its capabilities. It will improve threat detection and be more deployable, 

able to be set up in a fraction of the time compared with current systems. In addition, the Corps is investing in the Common Aviation Command and Control System, 

which will help better network our communications, radars, intelligence, and ultimately our forces. To better protect the marine on patrol, we are also planning to 

replace electronic jamming equipment with the next-generation, open architecture 

JCREW 3.3 system. This system will ensure sailors and marines are better able to 

counter future improvised explosive device (IED) threats. We are also investing in 

the Ground Renewable Expeditionary Energy System and Solar Portable Alternative 

communications Energy System. These systems will provide portable power, increasing self sufficiency, and reduce requirements for fuel resupply for small units operating at the forward edge. 

Over the last 10 years of near continuous combat operations, the need for fuel and 

batteries on the battlefield has grown exponentially. Since 2001, the Corps has increased the number of radios infantry battalions use by 250 percent and the number 

of computers/information technology equipment by 300 percent. The number of vehicles has risen by 200 percent, with their associated weight increasing more than 75 

percent as a result of force protection requirements. In the end, the force today is 

more lethal, but we have become critically dependent on fuel and batteries, which 

has increased the risk to our logistics trains. Moreover, a 2010 study found that one 

marine is wounded for every 50 fuel and water convoys. 

To reduce risk and increase combat effectiveness, in March 2011, the Commandant issued the ‘‘Marine Corps Expeditionary Energy Strategy and Implementation Plan’’ to change the way the Corps thinks about and values energy. This is a 

‘‘bases-to-battlefield’’ strategy, which means all marines will be trained to understand the relationship between resource efficiency and combat effectiveness. 

Throughout the Navy and the Marine Corps, we will consider energy performance 

in all our requirements and acquisitions decisions. 

FISCAL YEAR 2013 BUDGET REQUEST

The Navy and Marine Corps team is fully aware of the fiscal challenges facing 

our Nation and has critically examined and streamlined our force needs for the fuVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00073 Fmt 6601 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
68 

3This percentage is based on the fiscal year 12 Defense budget authorization and is slightly larger than the 7.8 percent sum cited in the past. The percentage includes $3 billion in fiscal 

year 2012 funding for amphibious warship new construction as well as Navy funding for chaplains, medical personnel, amphibious warships (operations and maintenance) and Marine Corps 

aircraft. 4The 9 percent figure in this sentence is based on the fiscal year 2012 Defense budget author- ization. The percentage includes procurement Marine Corps and RDT&E, and totals $2.3 billion. 

ture. We continually strive to be good stewards of the public trust by maintaining 

the very best financial management practices. The Marines are proud of the reputation for frugality and remain one of the best values for the defense dollar. As a 

force-in-readiness, the Marine Corps must judiciously preserve readiness, manning 

and modernization with only 8.2 percent 3 of DOD’s budget—this amount includes 

all Marine and associated Navy accounts including amphibious ship construction 

and operation. Our ground forces modernization comprises only 9 percent of our 

total budget; and is only about $2 billion a year.4

CONCLUSION

Through the support of Congress, our marines and sailors responding to crisis and 

in the fight have received everything necessary to ensure success over the past decade of near constant combat operations. As we begin to transition to the challenges 

and opportunities of the post-OEF world and reorient to the Pacific under our new 

Defense Strategic Guidance, the Marine Corps must begin to rebalance and modernize for the future. We must also keep faith with and provide the right resources 

for those who have served and sacrificed so selflessly in our All-Volunteer Force 

since September 11. With the continued support of Congress and the American people, we will ensure amphibious forces are well prepared to secure our national interests in an uncertain future. Thank you for the opportunity to be here today and we 

look forward to answering your questions. 

Senator REED. Thank you very much, Mr. Secretary. 

General Mills, do you have a comment? 

STATEMENT OF LT.GEN. RICHARD P. MILLS, USMC, DEPUTY 

COMMANDANT FOR COMBAT DEVELOPMENT AND INTEGRATION/COMMANDING GENERAL, MARINE CORPS COMBAT DEVELOPMENT COMMAND 

General MILLS. Sir, I’ll just add my personal thanks to both of 

you for your continued support to our marines, the sailors who support us, and of course our families. Without your support we simply 

could not do our mission. Thank you. 

Senator REED. Thank you very much, gentlemen. 

I propose an 8-minute first round, and then we have a long list 

of questions, so we’ll go back and forth after that. I want to ask 

a few questions and then recognize my ranking member. 

General Mills, we’ve talked about the recent exercise that you 

conducted, a major amphibious exercise. When we were younger, 

this used to be an annual operation under various code names. I 

remember Solid Shield. We got out of that business for about 10 

years, frankly, because of the requirements in Afghanistan and 

Iraq. 

Could you give us some details on what you learned, both 

strengths and the deficiencies of the Marine Corps, from that amphibious operation? One point you mentioned was inserting a Marine Corps unit 150 miles downrange, which raises questions of 

how to provide support. I’d appreciate any comments on that. 

General MILLS. Yes, sir, I appreciate the opportunity to discuss 

that. That’s Exercise Bold Alligator, which was our largest amphibious exercise in the past 10 years. Obviously, over the past 10 

years we have been primarily focused on providing well-trained 

forces to Iraq and Afghanistan and therefore we haven’t attempted 

69 

an exercise of this scale in a while. It’s going to be both an experiment and interesting for us to see how we do it. 

Let me preface this by saying, however, there’s a myth that we 

have been ignoring amphibious operations over the past 10 years, 

and that’s really not true. In the past 10 years, we have not missed 

a Marine Expeditionary Unit (MEU) deployment. We’ve had three 

MEUs on the water deployed at all times, working with our Navy 

counterparts. So we have retained that amphibious capability over 

the years in which our main focus, of course, has been the war in 

Afghanistan. But again, I just remind everyone that we have not 

lost that experience level nor that capability. 

For Bold Alligator, it was a very, very aggressive schedule of 

events. We wanted to see whether we could composite two MEUs 

into a MEB afloat, work with our Navy counterparts then to plan 

an amphibious operation ashore in support both of Special Operations Forces (SOF) already operating within the AOA and in order 

to resolve a series of tactical scenarios which we would face. 

The highlight, I think, was our emphasis on distributed operations, realizing that we are going to have to attack through different means to avoid hard spaces and avoid enemy defenses and 

move and looking for gaps and openings, which requires the force 

to be spread out further than perhaps when you and I did operations when we were younger. We felt that was very successful. We 

were able to insert the reinforced company, really a battalion 

minus, several hundred miles inland and we were able to sustain 

them over a period of time as they linked up with friendly forces 

ashore and conducted a series of tactical evolutions. 

We were expressly interested in communications and our ability 

to command and control at those kinds of distances. So, taking 

some experimental projects that we’re working on down at the Marine Corps Laboratory in Quantico, we were able to do that. At the 

same time, we were able to lighten the load of the force going in 

and of the individual marines and sailors ashore. Some of the experimental communications equipment that we have takes one 

radar and replaces three that would normally be carried at the 

squad, platoon, and company level. 

Other areas in which we found some success were in logistically 

being able to self-sustain them through energy conservation methods, bringing in things like solar blankets and our greens experiments so we wouldn’t have to carry as many batteries nor as much 

fuel to sustain forces at that level. We found that to be very, very 

successful. 

Logistically, we looked at things like being able to purify our own 

water once ashore, once again to alleviate that logistics burden 

that’s placed on units that are that deep into enemy territory. 

We had lessons learned, of course, but we found that staff interaction at sea was very successful. We worked very well with the 

Navy counterparts at the flag officer level and the staffs that were 

fully integrated. Our ship to shore movement was done well and 

was done successfully, and again reinforced many of the things 

that we’ve been working at over the past 10 years. 

So all in all, a very good exercise, but one in which we didn’t simply want to replicate things we had done 10 years ago, but one in 

which we wanted to stretch the boundaries and take a look at how 

70 

we conduct amphibious operations in the future. I think at that 

level we were successful. 

Senator REED. Do you plan to have a similar operation this year 

and following years? Has this become the new routine? 

General MILLS. We do intend to. We’re going to have a regular 

series of exercises, both on the east coast and on the west coast and 

afloat in the Western Pacific, again to revalidate some of our concepts, to test some of our new concepts out, and as our new equipment comes on line to ensure that that’s fully integrated in the amphibious capability. 

Senator REED. As I mentioned in my opening comments, we’re at 

a critical juncture here where we’re moving from a major focus on 

ground operations in Afghanistan and counterinsurgency into more 

of a focus on the Pacific, inherently amphibious maritime operations. Can you, General Mills and Mr. Stackley, but General Mills 

first, give us a notion of the alternatives or the strategies and doctrines that you’re looking at going forward, and also based, of 

course, on the threats that you perceive? I know this could fill 15 

volumes of single-spaced pages, but in as succinct as possible a 

way, what is the threat-driven doctrine that you’re trying to rebuild the Marine Corps to face? 

General MILLS. We believe that under the current threat if you 

look at the high end threat in the Pacific area, that that’s going 

to force us to have, initially at least, more standoff distance of our 

amphibious forces and more pre-assault operations as you move 

forward towards the objective area. Those shaping operations that 

would take place on the ground at the target area would involve 

such things as long-range air, involve SOFs, and other, more highly 

classified systems that you could bring to bear on that area in 

which you were going to attempt to land. 

We also believe that distributed operations, both at sea and once 

we arrive on the ground, will alleviate some of that threat. Working with our Navy partners, we take a look at what the ranges are, 

what the capability of the enemy threat would be, and once we arrive in the area again to bypass those defended beaches that we 

spoke about a little bit earlier and by using concepts such as shipto-objective maneuver to bypass the hard surfaces and move to 

areas in which we can accomplish our mission without doing an 

old-fashioned amphibious assault. 

It’s a combination of new equipment, new tactics, techniques, and 

procedures, and some new strategy that will allow us to remain relevant. We certainly believe that forward-deployed amphibious 

forces is a requirement and a price that the United States has to 

bear in order to be a world power. We provide you with a flexible 

force, forward deployed, ready to respond to crisis, and ready to 

give our decisionmakers here in Washington time to make key decisions. We believe that interacting with our allies, especially in the 

Pacific, reinforcing our old ties with the Australians, looking back 

at some of our other old allies and again reinforcing them through 

our training, through our presence, and through our engagement 

will pay large benefits in the long run. 

Senator REED. Let me follow up with one very quick question, 

then recognize Senator Wicker. Your first exposure to the Marine 

Corps as a child in the 1950s was watching a landing craft go to 

71 

the beach. Do you have in your doctrine a ratio between sealift and 

airlift for getting marines to the shore? Is that a number that’s situationally determined or is it doctrinally we want to have twothirds landing craft a third lift, or vice versa? 

General MILLS. Yes, sir. Doctrinally, the rule of thumb would be 

two-thirds of the force would land by surface, one-third would go 

in by air. Of course, there’s a lot of other factors that play into 

that, weather, sea conditions, things like that. But essentially that 

allows you to get your combat power quickly ashore and then allows you to build up that beachhead, bringing in your logistics 

trains, bringing in your supporting arms, expanding that beachhead, and then conducting your subsequent operations ashore. 

As we look at the portfolio of vehicles, for instance, and decide 

what mix we’re going to have between tracked amphibians and 

wheeled MPCs, much of that depends on our analysis of what do 

we need to bring in initially across that beach. But then 90 percent 

of that time is going to be spent expanding that beachhead, so 

what’s the capability you’re going to need for subsequent operations 

ashore. 

Those are the kinds of factors that we’re looking at as we balance 

what that ultimate portfolio mix will be between our tracked amphibians, our MPCs, and our JLTVs. 

Senator REED. Thank you, sir. 

Senator Wicker. 

Senator WICKER. Thank you very much. 

General Mills, the Marine Corps and Army were able to reduce 

the JLTV vehicle cost from a projected $634,000 to $266,000 per 

vehicle. I understand you’re trying to reduce that vehicle cost even 

further. How did you do this? Describe briefly to our subcommittee 

the requirements that were eliminated. Were they key requirements, and how will they affect the vehicle performance? 

General MILLS. Sir, we believe probably the biggest driving factor 

in cost reduction will be competition in order to provide that. For 

instance, currently we have six major organizations that are interested in providing that vehicle to us. So we believe competition 

within the acquisition process will naturally drive the price down 

as those companies compete for the business. 

Second of all, working with the Army, and the Army has been 

extraordinarily cooperative and it’s been a great team effort to take 

a look at the vehicle and pare down not what we want, but what 

we need on board a vehicle. Both of us were very concerned about 

protection levels and we arrived at a solution set that allowed us 

to take the protection level that we needed, yet keep the weight 

down, so that we were able to both transport it on our amphibious 

ships and—or sling it beneath our heavy lift helicopters and get it 

ashore quickly. 

We also looked at perhaps, rather than buy everything we wanted at one time, have a vehicle that would give us some capability 

for growth, that would allow us later on to perhaps upgrade the 

weapons system that might be on board it, take a look at weight 

growth that could be allowed if we wanted to add armor, and then 

take a look at kits, if you will, that would allow us to increase the 

levels of armor based on threat that we would see ashore. 

72 

I think it’s been a real teamwork effort between the Army and 

the Marine Corps to lay our requirements on the table and then 

look for ways in which we could compromise and yet ensure that 

we were providing our soldiers and our marines with the right level 

of protection, with the right speed and mobility on the ground, and 

with equipment that we know would be reliable and available to 

them for years to come. 

Senator WICKER. So we reduce protection levels, weight, and cut 

back on weapons systems and levels of armor; is that a fair summary? 

General MILLS. What I would really say, sir, is we scrubbed our 

requirements extraordinarily hard. We didn’t surrender any of our 

requirements, but we really studied them and said, what is it that 

we absolutely needed, what level of protection was needed by our 

forces on the ground, what weapons system best serves our purpose, and all of which could fold into an affordability matrix. 

Mr. STACKLEY. If I can add to that, one of the challenges that the 

JLTV has had in its history has been taking this joint requirement 

between the Army and the Marine Corps and arriving at a single 

family of vehicles. There is a divergence when it comes to mobility, 

the impact of weight, transportability of the JLTV when you look 

at what the Marine Corps needs to load these vehicles onto amphibious ships, get them to shore, and to have the maneuverability 

that it needs ashore, versus some of the requirements on the Army 

side that drives greater reliance on armor and that drives up 

weight. 

One of the keys to arriving at a more affordable program was to 

tailor JLTV so that the armor solution could be scaleable, it could 

be provided by kits, so that the Marine Corps could get the vehicles 

of the size and weight that it needs for its mobility purposes, and 

if the situation warrants or dictates an upgrade, the additional 

armor kits. 

That helps tremendously in terms of affordability, transportability, and the mobility requirements for the Marine Corps while 

also serving the Army. That solution was one of the keys to really 

getting to a more affordable vehicle, really just hammering out the 

requirements on the front end between the two Services to stay 

with the family of vehicles that gives you the benefit of large-volume procurement, not just through competition, but just the large 

volume helps to drive down the cost. 

Senator WICKER. Mr. Secretary, you mentioned in your statement getting the requirements right at the front end. Is it accurate 

to say that now the requirements of the JLTV are stable? 

Mr. STACKLEY. Yes, sir. We went through what’s referred to as 

a Defense Acquisition Board with the joint program, Army, Marine 

Corps, and Acquisition, Technology, and Logistics, to review the acquisition plan, and with the Joint Staff present and subsequently 

through the requirements definition process with the Joint Staff; 

and a lot of good discussion and debate over how much capability 

was required for the JLTV, and the Joint Staff helped shape some 

of those requirements to scale back some of those requirements to 

drive affordability of the program. 

Senator WICKER. General Mills mentioned that competition was 

a key factor. I think I told you in my opening statement that I’d 

73 

like some assurances that we’re going to continue to have viable 

competitors. What reassuring words can you give the subcommittee 

about what you’ve done to sustain the viability of these competitors 

in the manufacturing base? 

Mr. STACKLEY. Yes, sir. First, General Mills referred to about a 

half a dozen interested industry members. In fact, what we expect 

to see is teaming in industry for competition on the program. 

One of the keys to keep the industrial base primed in this particular case is time. If this were going to be a long, drawn-out development program, in fact the industrial base would be marching 

through a valley waiting for JLTV to emerge in production. So 

again going back to looking at the sweet spot between capability 

and affordability, the industrial base piece, if you can leverage mature technologies and make this more of an integration effort as opposed to a development effort, you can cut down significantly on 

the timeline to get to production. 

In fact, for the JLTV program we’re doing that. We’re driving integration of existing capabilities as opposed to a significant development effort, so we can get through the design, into the limited 

rate initial production phase, more quickly. That helps in terms of 

meeting the capability gap, it helps in terms of the industrial base, 

it helps in terms of cost. 

We think we have that about right. We’ve managed the risk in 

the definition of the requirements and balanced that against the affordability of the program. The Marine Corps and the Army have 

worked very closely in terms of when the Marine Corps buys its vehicles, when the Army buys its vehicles, looking at respective gaps 

and also looking at respective budgets in terms of what they can 

afford, and then adding them together so that the industrial base 

ramp is nice and stable. 

We’re working that with industry. There has been very open dialogue with industry in every regard in terms of through the development of the requirements and looking at the ramp in numbers. 

Senator WICKER. You two can decide who will take this question. 

Assuming we prevent sequestration, give us your best guess on the 

schedule for the Marine Corps to procure JLTV? When will the Marine Corps receive its first delivery of operationally capable vehicles 

and how many do you expect in that first delivery lot? 

Mr. STACKLEY. Yes, sir. The first Marine Corps buy for production units is about 2015. Right now the plan is 2015 and we’re on 

the front end of that procurement process. It goes up in a ramp. 

So in the Future Years Defense Program (FYDP), through the end 

of the FYDP, the Marine Corps procures about 400 JLTVs on a 

ramp between 2015 and 2017, and the delivery timeframe is about 

a 2-year lag. So until industry gets up into a steady state in terms 

of production, you’ll see a solid 2-year lag between when we procure and when those vehicles are delivered. 

Senator WICKER. I wonder if I could squeeze in one more question. General, what did we get out of our $3 billion on the EFV? 

General MILLS. Yes, sir. We’re taking the lessons learned from 

that across the board and applying them to our ACV. We still have 

several of those at Camp Pendleton that we can operate and learn 

from. But we’re looking at things like the stability in the water, 

habitability, because the marines are going to be in the new ACVs 

74 

for longer periods of time. So there were lessons learned that we 

can apply directly to our AOA as we look at that coming down. 

Some of our power train and power requirement lessons learned 

from the previous vehicle could be applied to the new one as we 

look at the AOA and decide which vehicle we want to proceed with. 

Senator WICKER. What have you learned about habitability? How 

long can a marine stay in one of those vehicles? 

General MILLS. We’ve done some experiments on the west coast 

with marines in vehicles, in both the old EFV and our AAVs, and 

we have found that the rule of thumb is less than an hour. We actually can put marines in them and it can last longer. It depends 

obviously on a number of things: sea state, for instance; the number of marines you put in the back of these kinds of vehicles. 

We just recently completed an experiment off Camp Pendleton, 

where we put some of our old AAVs in the water at 12 miles, floated them in. Some of those vehicles were in the water for up to 3 

hours. Now, they did not have marines in the back. They had crews 

on board. But the crews landed and were surprisingly fit. We are 

doing some studies to see what is the time that we could put marines in the back of them, how far can we move them in the water, 

and what can we expect of them once they land. That’s still in the 

study process. 

Senator WICKER. Thank you. 

Senator REED. Thank you. 

Senator Blumenthal. 

Senator BLUMENTHAL. Thank you, Mr. Chairman. 

Let me pursue that line of questioning for just a couple of moments, if I may. I understand the lessons learned from the EFV in 

terms of its capabilities. How about in terms of cost control, General Mills or Secretary Stackley? 

Mr. STACKLEY. Let me start. The lessons learned in terms of cost 

control were extraordinarily fundamental. In fact, they’re similar to 

lessons learned we have picked up in other programs that broke 

along the way. I stated at the opening, getting the requirements 

right at the front end. That is so critical. The EFV concept was developed greater than 20 years ago now, and the requirements at 

the front end were very far-reaching. It was orders of magnitude 

beyond the fleet’s experience and also beyond industry’s ability at 

the time, without an understanding of cost. 

One of the things that we have done through the EFV is we’ve 

done a complete teardown of cost in terms of development and, 

equally or more importantly, procurement, and then through that 

you extrapolate to operating and support cost. One of the things 

that broke the EFV was operating and support costs. 

We’ve done that teardown, so we have a fairly strong understanding of a cost basis for the alternatives that are being evaluated today through the ACV AOA, a fairly good cost breakdown 

that we’re putting side-by-side during the requirements definition 

process, so that requirements aren’t being written unconstrained or 

uninformed by costs. 

Then that effort is being done jointly between the requirements 

and the acquisition offices. So they’re locked together debating, assessing, and ultimately arriving at a set of requirements for the 

ACV with a good understanding of what it will cost to procure and 

75 

to support, and then that is being overlaid by what the projections 

are for Marine Corps procurement and budgets, so that you have 

a good balance between requirements and capability, cost, and then 

affordability as defined by the budget. 

This work has been going on since the decision to cancel the EFV 

program and it is, frankly, moving pretty smartly forward. I think 

when we come out of the AOA we’ll have a half a dozen alternatives that we’ll be well-postured for and be able to make decisions that 3, 4, or 5 years from now the basis of those decisions will 

still ring true. 

Senator BLUMENTHAL. It sounds to me like those are very profound lessons that could be useful not only in the ACV context, but 

really for many other procurement programs across the Services. 

Mr. STACKLEY. Yes, sir. We’re struggling to get to a point where 

we can make affordability a requirement. So while we have key 

performance parameters that go into our requirements document, 

that document does not capture what those systems will cost. So 

in our overall acquisition process we want to be able to tag affordability against those requirements, so we don’t end up out of 

bounds when we’re halfway through development or at the front 

end of production. 

Senator BLUMENTHAL. Thank you. 

General Mills, I had occasion yesterday to speak with Major General Toolan about the progress and the outstanding performance of 

our marines in Afghanistan. I know you’re very familiar with it. He 

emphasized the gains that we’ve made, but the continuing dangers 

to our troops. We all know that one of the greatest sources of those 

dangers is the improvised explosive device (IED), the roadside 

bombs that continue to maim and kill our brave marines there. 

I wonder if you could update the subcommittee on the ability of 

the Marine Corps to equip our troops with the protective gear, pelvic protective gear and biker shorts and so forth, but also what perhaps in the way of new programs might be in the works, because 

this kind of warfare will no doubt continue in the future. It’s asymmetric, extraordinarily damaging, but cost effective for our enemies 

to use. So any comments you would have, I would appreciate. 

General MILLS. Sir, I would thank the Senate and Congress for 

their support on being able to provide very quickly needed countermeasures to IEDs to the marines in the field. Our urgent needs 

process, in which we respond very quickly to commanders’ absolutely urgent warfighting requirements, has been very successful 

for us across the board, I think everything from the MRAP program, which was done extraordinarily rapidly, as efficiently, I 

think, as possible, but bottom line was it saved countless lives on 

the battlefield, is a great example of that. Everything from that 

large project down to protective devices that marines now wear 

across their hips in order to protect vital organs, which was responded to very, very quickly. 

Everything in between, when a commander on the ground sees 

a need and there is either a commercially available solution or a 

process to rapidly develop to fill that need, it’s done extraordinarily 

quickly and given to those marines. I saw in my time in Afghanistan and in talking to General Toolan during his time, whenever 

they came up with a new idea that was useful, whether it be the 

76 

low metal detectors that were in response to the insurgent capability to fashion these IEDs out of wood and plastic, whether it be 

the mine clearing equipment that went forward that was needed, 

everything from boat hook type things to very sophisticated explosive ordnance disposal (EOD) robots, again very, very quickly. 

I think the process worked. I think that there was a point there 

where cost or competition perhaps was not the driving factor, but 

it was what does that marine need on the ground to save his life, 

and that was met very, very well. 

In the lessons learned, we certainly agree with you that this is 

a threat that will carry on. It’s cheap, it’s easy to do, and it has 

a significant asymmetric effect on the battlefield. We’ve taken that 

into consideration. I point to probably the JLTV as a great example. If you look at the HMMWV, which the JLTV will replace, the 

HMMWV was an unarmored vehicle, it was a Jeep, soft-skinned, 

and proved itself extraordinarily vulnerable to IEDs and small 

arms. HMMWVs don’t go outside the wire in Afghanistan any 

more. They’re all inside the wire. Only armored protection goes outside the wire. 

When the JLTV requirements were put together, armored protection was a significant requirement. Probably 10 years ago, 15 years 

ago, it wouldn’t have been. We would have produced another softskinned vehicle. 

If you look at our MPC, protection underneath from the IED 

threat becomes a critical requirement that we have to look at as 

we go forward. I think the lessons learned both from the self-protection equipment that a marine wears into combat to the vehicle 

suite that he’s going to have access to, all are going to show lessons 

learned from the war and have IED protection, explosive protection, and mine protection built into it. The ACV is another example 

of that. 

Senator BLUMENTHAL. Thank you very much, General Mills. 

Thank you both for your excellent testimony this morning. 

Thank you. 

Senator REED. Thank you, Senator Blumenthal. 

We’ll initiate a second round, presumably 8 minutes. If my colleagues want to come back and ask questions, I certainly want to 

give them that opportunity. 

General Mills, one of the urgent procurement initiatives because 

of Afghanistan and Iraq was the MRAP, and the MRAP All-Terrain 

Vehicles. They don’t seem to fit into the amphibious strategy that 

we’re talking about. So it begs the simple question: What are you 

going to do with these vehicles? Will you park them someplace, or 

will a portion of them be used? Can you give us some ideas? 

General MILLS. Sir, we have a little over 4,000 of them in the 

inventory right now as we come out of Afghanistan. We’re going to 

do several things with them. Our plan, we’re going to keep about 

2,500 of them on inactive service. They will be used in countermine 

operations with our EOD folks, with our combat engineers, with 

our route clearance units. That is a requirement developed directly 

out of the war and they’ll play an important role in there. 

We’ll have some available to the operating forces, whether 

they’re pre-staged forward at a location or here in the United 

States. We’ll have some available for training at our various trainVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00082 Fmt 6601 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
77 

ing locations and some available for training for our maintainers 

and our operators. 

The remainder—we’ll work through Marine Corps Systems Command to rid ourselves of. We don’t want to maintain an excessive 

number of those due to costs. So it’ll be a split strategy of divesting 

ourselves of what we don’t need for the future, but also keeping 

that capability and being able to deploy it. 

The deployment piece will be an issue we have to work our way 

through. As you stated, they’re heavy. They’re big. They do take up 

an awful lot of footprint if you put them on your forward-deployed 

ships. However, I will keep them accessible to our forward-deployed 

forces, able to come forward through a transportation method when 

needed and when called for by the commander on the ground. 

Senator REED. One aspect of both the Navy and the Marine 

Corps budget which, I think, has huge implications is the F–35B, 

with the sheer size of the procurement dollars required for that activity. General Mills and Secretary Stackley, your view is that this 

is critical to your doctrinal approach to the future in terms of amphibious operations, and if you have to pay some of the costs indirectly you’re prepared to do that, I presume? 

General MILLS. Sir, I believe the F–35 is an absolutely critical 

requirement for the Marine Corps. The ability to forward deploy 

with our large-deck amphibs and bring fixed wing aviation, with all 

the benefits that has attached to it, is critical to the Marine Corps 

air-ground task force concept in which we fight now and will fight 

in the future. 

Certainly one of the things you want when you’re conducting amphibious operations is the ability to put supporting arms ashore to 

support your landing force in the initial hours of any operation. 

With the decline in naval gunfire surface support that we’ve seen, 

I think the use of Marine Corps aviation becomes even more critical, that you can impact targets well inland. We talk about a 

threat that has been developed against the amphibious forces 

which can be launched from well beyond the beachhead. That capability to do that is absolutely critical. 

Our Harriers have done a great job for us. They’re beginning to 

run out of life, as we know. General Roebling has done some excellent programs to extend that as far as possible, but they will run 

out of life in the early 2020s and the F–35, the STOVL capability, 

is critical to Marine Corps’ capabilities going forward into this century. 

Senator REED. Secretary Stackley, the cost factor is significant 

and, despite the best planning, it’s going to impact probably every 

system in the Marine Corps and the Navy. From both perspectives, 

how do you soften the blow, if you will, in terms of not only what 

the Marine Corps has to acquire, but what the Navy has to acquire 

to support the Marine Corps, to complement the emerging doctrine? 

Mr. STACKLEY. Yes, sir. With particular regard to the JSF, as 

you’re well aware, two factors come to play inside of this FYDP. 

First is the program schedule, and the schedule has moved to the 

right, which has resulted in the product ramp being brought down 

while we complete the developmental testing and get to a more maVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00083 Fmt 6601 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
78 

ture point in the program where we can ramp up to steady production. 

The unit cost on the aircraft has increased as well, and we’re battling that through the design and development phase, and also 

through the way we buy the aircraft. But it does put significant 

pressure on the overall tactical air (TACAIR) portfolio for the Navy 

and the Marine Corps. 

So we don’t try to solve the JSF cost in isolation. The requirement is unchanged, for the Navy 680 JSFs split between a carrier 

version and a STOVL version. What we are managing in the nearto mid-term is the total TACAIR portfolio, where we’re at risk of 

a TACAIR shortfall. That’s more than just the effects of the JSF. 

We do have the aging Harriers and the F/A–18A through D 

versions that need to go through a service life extension program 

(SLEP), as well as completing the production and procurement of 

the E&F aircraft. 

So between those three, we’re balancing within the budget to determine how many A through Ds can we afford to SLEP, and 

what’s the right production ramp for JSF that we can sustain within our budget. We count on the E&F in terms of its service life. It’s 

a healthy aircraft for the near- to mid-term. What that leaves us 

with is managing the amount of risk inside the TACAIR portfolio. 

We’ve briefed the committee over the last several years as that 

picture has unfolded. This past year we’ve revised our estimates in 

terms of the TACAIR shortfall, which peaks in about 6 or 7 years 

from now. The revision was, frankly, a downward revision, despite 

the upward pressure on costs on the JSF program, primarily as a 

result of the revised estimates of fly rates as we have gotten out 

of Iraq and we look forward to getting out of Afghanistan. 

Frankly, it’s one of the two things that keeps me up at night. But 

we’re managing it closely. We have to continue to manage the execution of the SLEP. We have to make sure that the F–18 aircraft 

that go through the SLEP get the upgrades they need to be combat-capable, while we continue to work the introduction of the JSF. 

It’s a complex problem with many variables. JSF has added some 

pressure in terms of cost, but what we’re managing is total portfolio. 

Senator REED. Thank you. 

We have a chart. I think you’re familiar with it. This is the chart 

we used last year. 

[The chart referred to follows:] 

79 

Senator REED. I think it’s useful because it’s the O&M cost of the 

vehicles. The bottom orange line is the EFV. That’s gone, so you 

just pull that out. But still the rest of the colored areas representing individual vehicles go above that dark line, which is the 

steady state without a significant combat operation, and even 

above the dotted line, which is steady state with combat operations. 

If you can give us a notion of, one, how well you’re doing to bring 

those lines underneath your expected budget; and then, two, when 

you would think because of the wear and tear on vehicles, et 

cetera, that the cost of O&M would go up. Mr. Secretary, please 

comment generally on what we’re doing. 

The final point I’ll make is this chart was available last year for 

the testimony and what I think repeatedly we heard was the way 

we’re going to deal with this is reducing the overall number of vehicles. Is that still the bottom line, what we have to do? So if you 

can elaborate? 

Mr. STACKLEY. Yes, sir. I’ll start and then let General Mills finish. 

Senator REED. Yes. 

Mr. STACKLEY. First, the approach we took on looking at the affordability of ground combat tactical vehicles for the Marine Corps, 

we’re adopting this same approach across the board program-byprogram, because we can’t afford to look at the individual program. 

We have to look at its affordability inside of a total portfolio. Then 

quite often when we do that, we realize in the out-years we’re overprogrammed. 

I will give the Marine Corps credit for doing a tremendous job 

of taking a look at the problem—this goes back 2 years ago—and 

realizing we can’t get there from here. We are overprogrammed. 

The first decision that came out of that was we have to do a scrub 


426sea1.eps
80 

of the fleet mix of vehicles, and in that was the decision to terminate the EFV program. 

But by itself—and we were very clear—that’s not enough to solve 

this problem. A part of the ground combat tactical vehicle strategy 

was taking a look at the total fleet size and mix and determining 

what can we do to get from what has built up over the years down 

to what we absolutely need going forward. 

The first cut coming out of that strategy was a readiness of about 

10,000 vehicles planned for the portfolio for the foreseeable future, 

greater than 20 percent. That has a direct impact on the O&M projections going forward. 

The other half of the equation was looking at what we buy and 

when we buy it. So while this is O&M, there’s a similar picture 

that reflects the procurement side at the same timeframe. So the 

vehicle strategy has placed a sequence of what we buy and also has 

driven affordability into what we buy. As far forward as we can 

look and project today, our vehicle procurement strategy aligns 

with our budget projections. 

The other aspect that’s built into this chart, not immediately apparent, is the front end of that chart, the left-hand side, is augmented by Overseas Contingency Operations (OCO) funding. One 

of the challenges that remains before us is a post-OCO environment, what does that mean for sustaining our vehicle fleet? We’re 

continuing to work that. We have a near-term reset that we have 

budgeted, but there is a longer-term strategic buildout there that 

we’ve identified to everyone. But that’s very much contingent upon 

when we get out of Afghanistan. 

Your specific question regarding why does that tail down. I can’t 

reconstruct the last couple of years of that chart, but I’m going to 

tell you that that’s probably more than anything else a budget peculiarity in terms of how far forward we project certain programs, 

and since we don’t have other programs identified yet, the budget 

numbers probably took over the chart at that point in time. 

Senator REED. Realistically, the chart is accurate, but with the 

right assumptions the lines would continue to go up, or be level at 

least? 

Mr. STACKLEY. Yes, sir. 

Senator REED. Thank you. 

I have additional questions, so we’ll have another round. 

General MILLS. Senator, if I could just add. 

Senator REED. Excuse me, General. 

General MILLS. He covered very clearly what our procurement 

piece was. Regarding O&M costs, other things which we’re doing 

to take a look to try to control some of those costs, because we realize that will be pressurized under the new budget system when you 

look at the budget amounts that are available to us, regarding our 

older vehicles we do have a plan to do a sustainment package on 

81 percent of the vehicles that we’re going to retain in the fleet, 

both our HMMWVs, our ACVs, and our other vehicles. So as they 

come out of theater, we have a very thorough sustainment package 

we put them through that will restore them to we think a good, reliable level. 

For our newer vehicles, of course, we’re looking at raising reliability standards, challenging the builders to give us vehicles that 

81 

are more reliable the longer time between major breakdowns. Also 

fuel efficiency. Fuel is a big piece of O&M costs and we’re looking 

at vehicles that are more fuel efficient, and that becomes a factor 

that we’re going to consider heavily, where in the past perhaps we 

didn’t give it as much set. That’s the reset that Mr. Stackley talked 

about. We want to bring those vehicles that are coming out of theater, that have been used and have been ridden hard, and bring 

them back to as good a state as we can so they are reliable in the 

future, driving down future maintenance costs. 

We have a pretty comprehensive effort to keep those costs as low 

as possible, understanding also that O&M costs drive training, and 

you have to be able to make sure that you keep levels there that 

you’re able to use vehicles, train on them, and keep them in the 

field for preparation. 

Senator REED. Thank you, sir. 

With that, Senator Ayotte. 

Senator AYOTTE. Thank you, Mr. Chairman. 

I want to thank both of our distinguished witnesses for being 

here and for their service to our country. 

Secretary Stackley, I want to follow up on your testimony from 

last week’s shipbuilding hearing and particularly ask you about the 

Virginia-class submarine. First of all, is the Virginia-class submarine performing well? 

Mr. STACKLEY. Yes, ma’am, absolutely. It’s performing well in 

terms of production, but more importantly performing well in terms 

of the fleet. If you had one of the fleet sailors on board here talking 

about when they compare a Virginia to even Los Angeles-class, it’s 

a leap forward in terms of combat capability. They’re very excited 

about it. 

Senator AYOTTE. Terrific. 

As you’re probably aware, the Chief of Naval Operations has testified that the Navy is only able to meet 61 percent of the combatant commander requirements and requests for attack submarines. 

Are you familiar with that number? 

Mr. STACKLEY. Yes. 

Senator AYOTTE. Yet, for budget reasons, the Navy has recommended, because of the numbers that were given in the BCA, 

that we postpone the procurement of one Virginia-class submarine 

from 2014 to 2018. I wanted to ask you about some of your testimony at the shipbuilding hearing about this issue, particularly the 

issue of if we were able to move to say that if we were to lower 

the cost by doing it, the cost to purchase on an incremental basis. 

I believe that you testified last week about the fact that if you assess the bottom line or the net cost impact of adding a second Virginia-class, in other words bringing it back up to 2014, that it’s 

near neutral. In other words, the net savings associated with pulling the boat to the left if we did it on an incremental basis would 

effectively, adding the boat by pulling it to the left, outweigh the 

upfront cost if we had to purchase the entire submarine up front. 

As I understand it, the House Armed Services Committee 

(HASC) Seapower Subcommittee did just that and recommended 

that we actually push back the purchase, but do it on an incremental basis. 

82 

Can you help me? Can you comment on this and also explain 

that if we were to purchase the Virginia-class in the incremental 

way that you described in the shipbuilding hearing, what impact 

that would have? 

Mr. STACKLEY. Yes, ma’am. First, the way the cost analysis 

works out is we assess the Virginia-class program as opposed to individual boats, what the program cost would be, not simply moving 

a boat from 2018 back to 2014, but literally moving a boat from the 

end of the program to 2014, because we want to sustain two per 

year. 

Senator AYOTTE. Right. 

Mr. STACKLEY. Then when you look at the total program cost for 

those two different procurement profiles, the upfront cost for that 

second boat in 2014 is offset by savings across the program in the 

later years. 

Senator AYOTTE. By moving it up, right. 

Mr. STACKLEY. Yes, ma’am. So at the bottom line, for the Virginia multi-year, 9 versus 10 boats, it is near neutral adding that 

second boat in 2014. That’s independent of how you fund it. 

The discussion regarding incremental funding simply reflects the 

constraints that we have for our top line in 2014. We did not have 

sufficient head room to fully fund the second boat in 2014. So there 

is an exception to the full funding policy that’s been put in place 

for carriers and large-deck amphibs that allows you to spread those 

costs over a number of years to eliminate the spike that it causes 

in the budget. 

In this particular case, that would enable us to fund a second 

boat in 2014 without giving up the second boat in 2018 and stay 

near neutral at the bottom line. 

Senator AYOTTE. The only reason that you weren’t able to recommend that to us is because you didn’t have that capacity for the 

submarine fleet, is that right, in terms of how you could budget? 

Mr. STACKLEY. You say ‘‘capacity’’? 

Senator AYOTTE. I mean you didn’t have the authority, is what 

I meant to say. 

Mr. STACKLEY. Yes, ma’am. The policy is that we fully fund our 

capital investments in the year in which we procure them. There 

are exceptions to that, but we do not have an exception in this case 

for Virginia. So while it works out analytically, policywise we don’t 

have the authority to incrementally fund it. 

Senator AYOTTE. Wouldn’t it make sense to have an exception for 

Virginia, the way you just described it in terms of how we look at 

this? 

Mr. STACKLEY. When you simply look at the fact that we have 

this demand for submarine service that exceeds our capacity, and 

in fact longer-term our number of attack boats in the fleet goes 

down until we hit a valley in the 2030s. 

Senator AYOTTE. Right, the nine-sub valley is by 2030? 

Mr. STACKLEY. Our requirement is 48 boats. 

Senator AYOTTE. Right. 

Mr. STACKLEY. Our force structure out in the 2030s timeframe 

drops well below 48 boats. So to affect that, to try to improve upon 

that, you really have to sustain two boats per year as long as you 

83 

can, until you get to the point where you have some flexibility in 

the buy rate. We’re not at that point yet. 

So it’s a budget constraint that drove us to make this reduction 

in 2014, but the requirement would insist otherwise, that we get 

back up to two boats and sustain it as best we can. 

Senator AYOTTE. This would be something that perhaps would be 

a very important authority that we could give you with respect to 

our attack submarine fleet and also making sure if we did what the 

HASC Seapower Subcommittee just did we could ensure that the 

two remained constant in a way that would be much better in 

terms of trying to meet our combatant commanders’ requirement 

for the attack submarines; isn’t that true? 

Mr. STACKLEY. Let me describe that the President’s budget didn’t 

request it, but I think it’s important that we discuss and provide 

the information regarding this alternative to full funding, so that 

everyone can assess the value to the force, the value to the industrial base, and then the affordability that adding that second boat 

provides, and weigh that against the importance of the full funding 

policy. 

Senator AYOTTE. Right. But as we’re talking about it in the testimony before the subcommittee today, this is a very sensible move, 

as well as making sure that we meet the requests of our combatant 

commanders, and we already are not meeting them. We’re only 

meeting 61 percent of those requests now. 

Mr. STACKLEY. Getting that second boat in 2014 is the most affordable way to buy another submarine. 

Senator AYOTTE. I very much appreciate your providing that insight to us. I want you to know that this is something that I am 

going to be proposing and pushing with the rest of the members 

of the Senate Armed Services Committee, and I think it only 

makes sense in terms of not only the cost, but also making sure 

that we maintain our attack submarine fleet and given the needs 

of our combatant commanders, and particularly if we look at our 

shift in strategy as a focus on the Asia-Pacific region, obviously our 

naval fleet and the importance of it, that’s very, very important 

that we have a robust attack submarine fleet, and the Virginia 

class is very important to that. I appreciate your testimony today. 

Thank you very much. Thank you for being here. 

Senator REED. As long as you want to speak about submarines, 

Senator, you may continue. [Laughter.] 

Senator BLUMENTHAL. I’m prepared to speak about submarines. 

Senator REED. In that case, we’ll recognize Senator Blumenthal. 

Senator BLUMENTHAL. Thank you. 

I want to thank Senator Ayotte for that line of questioning, 

which you and I really engaged in at the last hearing. I think Secretary Stackley put it extraordinarily in that hearing, and I don’t 

want to put words in your mouth, but effectively you suggested 

that the committee should adopt this incremental funding approach, which you said is an extraordinary method of funding, but 

we live, as you put it, in extraordinary times, and we are facing 

extraordinary challenges. I agree with you completely. 

Senator Ayotte, I’m glad you followed up with those questions, 

because I’ve already written to the chairman, and I know others 

have as well, endorsing the idea of moving that submarine forward 

84 

without necessarily funding it up front and doing the incremental 

funding. I’m glad to see that the HASC has adopted that approach, 

which perhaps we can follow here. 

I want to thank you for the testimony this morning in effect endorsing—that may be too strong a word—but at least suggesting 

favorable consideration on the part of our committee. 

Senator AYOTTE. We may be able to have bipartisan agreement 

on this. I like that. 

Senator BLUMENTHAL. I think we will, and I’m sure that Senator 

Reed may have favorable things to say about it as well. 

Senator REED. I have made a note to myself. 

Senator BLUMENTHAL. I would like to just move to another topic 

if I may, Mr. Chairman. It was really suggested by the testimony 

making reference to the Commandant’s energy efficiency statement. I know there was a more high-falutin term for it, but I want 

to commend and thank the Marine Corps for focusing on this issue. 

Secretary Stackley, you and I discussed it a little bit in the last 

hearing. 

But I’m wondering, in light of this chart and other analyses that 

show, as you put so well, General Mills, the costs of simply running 

these vehicles using our present source of energy; and certainly I 

think one of the lessons in Afghanistan has to be the tremendous 

cost of providing fuel, which when you think about it is really staggering, not only the cost in dollars, but the vulnerability in terms 

of the Pakistan route that it creates and the cost in human lives 

in the convoys that is required. 

I’m wondering whether there is thought to alternative means of 

running these machines, so to speak. I don’t know whether I can 

put it in a more sophisticated way, but just alternative sources of 

energy that can be used in these vehicles. 

Mr. STACKLEY. The chart that was displayed regarding the O&M 

costs for the vehicle fleet, General Mills hit the issue when he described the majority of those vehicles, they are aging; they are 

going to go through a sustainment program. They’ll get modernized. They’ll go through improvements so they can serve well beyond their service life. 

Regarding your specific question, the point there is that the majority of those vehicles, those drive trains are what they are. If 

there’s an opportunity to improve upon the drive train as we go 

through the modernization, we’re going to explore that and do that 

to the extent it improves the operation of the vehicle and drives 

down its operation and support cost. 

But there’s little opportunity to introduce new technologies for 

drive trains beyond the programs that we’re introducing today. So 

the JLTV program, in particular, we’ve discussed whether or not 

there’s an opportunity to look at a more fuel efficient system. In 

fact, energy is one of the requirements that’s being drafted up for 

that vehicle. But it doesn’t drive you to a leap-ahead technology in 

a drive train when it comes to military vehicles, not yet. 

It is something that we have to continue to look at. So while we 

do development in parallel on the components and the subsystems, 

at some point downstream we have to explore how do we introduce 

these more efficient drive trains to the fleet of vehicles. It will be 

85 

a slow, slow transition because of the large numbers of legacy vehicles that we start with. 

General MILLS. Sir, I would just add two things that we’re looking at from the Marine Corps perspective. One, of course, is life in 

the barracks when you’re back, not in the field, not at war, not 

training, looking at various energy supplements there that we can 

use. Solar is the one that we’re most active in, and we’re having 

success at many of our bases in replacing fossil-driven fuels with 

our solar capabilities. Our Mountain Warfare Training Command 

up in Bridgeport, CA, is soon to be a negative energy user. They’re 

going to provide everything they need through solar and through 

thermo, which they have access to, and may, in fact, be able to sell 

some of that energy out in town to the local power grid. 

We’re looking at ways back in the barracks in which we can ensure those barracks are green, for want of a better term, and which 

we can save power. 

Out in the field, in the vehicles, we’re looking at ensuring our 

new vehicles have alternate power units attached to them, so that 

you don’t have to run a 10K generator that uses an awful lot of 

fuel when you simply want to keep some lights on in the Combat 

Operations Center (COC). You can use a more efficient method of 

providing that electricity, looking for more efficiency. Lighting in 

our COCs and places like that, those aren’t huge savings, but they 

chip away at the requirements. 

I found that when I was in Afghanistan, surprisingly, the troops 

were extraordinarily receptive to energy-saving devices, because 

they knew what that meant to them as far as the logistics trail 

they had to drag along and the risks they had to take in moving 

large quantities of fuel around the country in which fuel trucks 

were lucrative targets, both for the enemy and for corruption. 

We’re looking for ways big and small to save power, save energy, 

reduce that logistics trail, and also to reduce costs, as pointed out 

by that graph. 

Senator BLUMENTHAL. I thank you for those answers. Also, the 

March 2011 Marine Corps Expeditionary Strategy and Implementation Plan was the report that I was referring to before. I think 

it’s a great step in the basis to battlefield strategy and I hope that 

it will be updated because technology is moving so quickly that 

there’s a lot of opportunity. 

General MILLS. Sir, if I can just add, twice a year we sponsor 

what we call an expeditionary forward operating base, one at Camp 

Pendleton and one at Camp Lejeune. The one at Camp Lejeune 

goes next week and we’re going to have a group of staffers accompany us down there. The intent of that is to look at expeditionary 

ways to save fuel, both through solar and other experimental methods. It will expose us to them, it will allow us to identify some 

projects worthwhile to take forward to us on our deployments, try 

them out in the field under real conditions, and then report back 

as to whether there are things that we want to exploit. It’s an ongoing project for us. 

Senator BLUMENTHAL. Thank you very much. 

Senator REED. Thank you, Senator Blumenthal. 

Let me ask some additional questions. General Mills, I want to 

get a feel for the procurement strategy. We started off with the noVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00091 Fmt 6601 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
86 

tion of buying about 1,000 EFVs to replace roughly 1,000 AAV–7s, 

which you have in your inventory now. The EFV is out and now 

we’re looking at basically dividing your resources between the ACV, 

which would be the assault craft, and the wheeled armored personnel carrier. 

The wheeled armored personnel carrier doesn’t swim. It carries 

only half a squad, so it has some tactical consequences. It’s about 

as heavy to lift as the ACVs, which raises the question, particularly 

if we’re still doctrinally looking at roughly two-thirds of our assault 

forces going ashore by amphibious vehicle, what is the ratio of investment in the ACV versus the personnel carrier, and why are we 

buying personnel carriers? Can you comment? 

General MILLS. Sir, we feel the portfolio approach is the best one, 

that both from an affordability perspective, but more importantly 

for the flexibility it gives the commander on the ground. We don’t 

believe that every marine has to swim ashore in a self-propelled 

amphibious vehicle, that the forces flown ashore off of the ships 

will go ashore through a series of means. A third of the force will 

go in by aviation, for instance, and land and link up with heavy 

equipment later on ashore. Initial assault waves will go in in our 

ACVs because of the uncertainty of what they’re going to meet once 

they reach that beachhead. 

Once that beachhead is established, however, we can begin to 

run connectors in there, which are our LCAC and our LCU, bringing in the remainder of our vehicles. They can bring in the MPCs 

that you spoke of. 

Then, once ashore, those vehicles give us great flexibility, give us 

better speed than the tracked vehicles do in the field, give us efficiencies in fuel, and provide us with, I think, better combat power 

for that commander as he pushes the beachhead in and proceeds 

on to exploit the opportunities on the ground. 

We currently have a mixture of vehicles. We have a portfolio. It 

works. It fits into our concept of operations very, very well. We’re 

still doing the study as to what that breakdown should be. We 

think that the total requirement is the ability to have 12 battalions 

with some armored protection mobility. Whether we break down to 

all of them being on ACVs, probably an unaffordable strategy, or 

what the exact breakdown will be, is an ongoing study and will be 

a decision that we’re going to push down the road a little bit for 

the Commandant to make. But once the AOA on the ACV is complete, once we have a better feel for the MPC characteristics and 

costs, we think we will give him an opportunity to make his decision as to how he sees the fleet motored up, if you will. 

Senator REED. So you’re teeing this up for a decision on numbers 

based on what you think is the optimal configuration for your doctrine, your tactical operations? 

General MILLS. Exactly, sir. Of course, cost has to be a factor. 

Senator REED. Let me go back to the point that you have a vehicle that takes half a squad, which complicates command and control. That is a factor which I assume you’re going to also consider. 

My sense, over the last several decades the thrust of buying military equipment for land forces was to at least have a squad size 

as the minimum organization point carrier, both lift as well as the 

personnel carriers. This seems to be a diversion from that. 

87 

General MILLS. Sir, it is different. But we think that it does also 

mitigate some risk. It does disperse that unit, so should you lose 

one of the vehicles, you haven’t lost an entire squad. Some of our 

experience in Iraq, for instance, where we lost some AAVs that had 

full squads on board, and then you lost an entire fighting unit, so 

there is some advantage to splitting that squad into units. 

There are challenges with command and control as you pointed 

out. It also gives us some advantage in distributed operations as 

we begin to spread these units out, fight at greater distances and 

fight in smaller units. There is some capability there. But we do 

feel that the MPC will give us some flexibility, some efficiencies, 

some reliability that a tracked vehicle, which is more complicated 

and complex, doesn’t give us. 

Mr. STACKLEY. If I could just add? 

Senator REED. Yes, Mr. Secretary. 

Mr. STACKLEY. First, sir, you’re asking exactly the right questions, and they’re the same questions that we’re asking ourselves 

internally. Those are all built into the AOA that’s being accomplished for the ACV. 

But also, as we look at that portfolio mix, the fleet mix of vehicles, it’s very similar to the discussion we had earlier when you laid 

out the total O&M costs for the fleet of vehicles. It’s the same portfolio approach that we’re taking when we look ahead through the 

ground combat tactical vehicle strategy. 

Senator REED. Let me raise a question with you, Mr. Secretary, 

on that. We have communicated back and forth about habitability 

issues with respect to the assault ships coming ashore. From General Mills’ initial comment about the new threat, the new doctrine, 

that you’re going to have to swim a long way to the beach, longer 

than we thought before, there’s been some testing and you responded to the committee that it does not appear that the multihour water movements have degraded the capability of the marines 

coming ashore. 

We understand that this test was done under mild weather conditions, et cetera. I raise the issue because I would presume this 

is again something that you’re going to test again and again and 

again under a whole series of conditions, because you have to get 

to the beach, but if you get off the amphibious vehicle in a degraded state, that’s not doing your marines any favors. I know you 

don’t want that to happen. 

Mr. STACKLEY. Yes, sir. Inconclusive is a good word for this case. 

We did about a 1-week habitability assessment test and submitted 

the report to Congress. We did not get the challenging sea conditions that would have provided more meaningful results. But what 

we did gain from that is we did not find anything in that early testing that said it can’t be done. The assessment and the testing of 

the marines that participated concluded that, at least for these sea 

conditions and under the 1-, 2-, and 3-hour scenarios, when they 

got to the beach they were operationally effective. 

The report describes that when it comes to cognitive skills and 

things, there was some marginal degradation, but when it came to 

marines being able to perform a combat mission, for those conditions everything looked okay. We have to go beyond, though. We 

have to do further testing. This is important, not just to developVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00093 Fmt 6601 Sfmt 6602 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
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ment of the ACV, but it’s important to how we operate going forward for amphibious operations. 

Senator REED. Do you have a comment, General? 

General MILLS. Sir, I would just add one comment to that. We 

know what the optimum conditions are now. We’ve been doing it 

for years; 4,000 yards off the beach and sea state one. You get 

ashore quickly and you barely know you’re in the water. 

Our challenge, as we plan to use the exercises that I talked to 

you about earlier to push those limits, is to find what’s the worst 

case. We know what the best case is, 4,000 yards and sea state one. 

Now what’s the worst case? How many miles off the beach could 

you be? What kind of sea states could you operate in, and what decisions will that Marine Air-Ground Task Force commander have 

to make when he looks at amphibious operations in the future? 

So we’re going to do that. We’re going to do it incrementally, 

we’re going to do it safely, because we certainly don’t want to put 

loaded vehicles well out at sea with marines in the back and have 

a problem. So we’re going to do it incrementally, we’re going to do 

it safely, and we’re going to use what we’ve learned to help guide 

our decisions when we see those results of the AOA. 

It is very concerning to us and we are working it. 

Senator REED. I have just a few additional questions, but Senator Ayotte, if you would like to do an additional round, go ahead. 

Senator AYOTTE. Thank you, Mr. Chairman. I really appreciate 

it. I just have two areas of questioning. I appreciate it. 

General Mills, I wanted to thank you for coming to my office recently to talk about the Navy’s proposal to eliminate one of the 

three maritime prepositioning squadrons and to reduce the number 

of maritime prepositioning ships in the fiscal year 2013 proposal. 

We just recently received the report that I had asked for in the 

2012 NDAA about this topic and also the risks associated in terms 

of our readiness with reducing the prepositioned squadrons. 

Obviously, this is something that we’re looking at. We’re reducing status, but in the fiscal year 2013 budget we’re eliminating one 

because of the fiscal pressures that we face. In the report, General 

Amos consulted with the U.S. European Command and U.S. Africa 

Command (AFRICOM) commanders. They certified that the risk 

was acceptable, but still acknowledged that it’s going to create capability gaps and influence force closure and crisis response times 

in terms of some of the gaps we might have. 

But the mitigating factor, as you and I also talked about in my 

office, was the prepositioning program in Norway. In terms of the 

equipment in Norway, that equipment is not on ships, is that 

right? 

General MILLS. That’s correct. It’s in caves that are maintained 

by the Norwegians under an agreement. 

Senator AYOTTE. We would probably need to get it on a ship. 

That’s one of the capacities we may need, unless we need it right 

there. But most likely we’d need to get it on a ship, correct? 

General MILLS. Yes, ma’am. 

Senator AYOTTE. So that’s one additional step we would have to 

take, as opposed to already having the ship right there, the squad, 

and what we’re eliminating in capacity now; is that right? 

General MILLS. That’s correct. 

89 

Senator AYOTTE. How long will it take to get the equipment on 

the ships? 

General MILLS. That’s a difficult question to answer because of 

the many factors that would play into that. Depending on how 

much equipment you needed, what that slice was, weather conditions, that kind of thing, a MEU loads out in about a week from 

Camp Lejeune to Moorehead City and gets on board ships and 

moves out. I’d have to get back to you with exact planning figures 

to get out of the caves and get to commercially available shipping. 

But I think it’s a reasonable amount that we could respond to 

large-scale contingencies. 

Senator AYOTTE. If you’re able to answer me more specifically as 

a follow-up, I’d appreciate it. 

General MILLS. Yes, ma’am. 

[The information referred to follows:] 

Surge sealift ships can be activated and sail to Norway in about 2 weeks. An additional option is to call upon U.S.-flagged ships from the Maritime Security Program 

(MSP). Some of these MSP ships conduct trade in northern Europe, thus can likely 

respond in days. 

It will take 7 to 10 days to load the equipment in Norway onto ships once they 

arrive. However, Marine Corps Prepositioning Program-Norway (MCPP–N) is 

versatile, and ground, rail, and air are all possible modes of transportation. Strategic air was used for MCPP–N support of the Russian wildfires in 2011 and humanitarian assistance to Turkey following the earthquakes in 2011, allowing equipment and supplies to be delivered very quickly. 

Current MCPP–N on hand, ground and aviation equipment will require two ships, 

and a fully-attained prepositioning objective will require three ships. It takes 5 days 

to load each ship, and ships can be loaded concurrently if berths and required personnel are available. 

Current MCPP–N munitions on hand, and a fully attained prepositioning objective, will require one ship. It will take 5 days to load the current on hand munitions 

and 9 days to load a fully attained prepositioning objective. Munitions conduct load 

out from a different port than ground and aviation equipment. 

Senator AYOTTE. Then also, how is the equipment in Norway in 

the caves different than the equipment that’s in a maritime 

prepositioning squadron? Is it a different type of equipment or is 

it the same? 

General MILLS. It’s basically the same. It’s a cross-section of Marine Corps equipment. The plan to reload the caves, because we’re 

going to reload them, is to organize them around MEU- or MEBsized units, which are probably the appropriate size unit you’d 

want to have respond to something that was going to happen either 

in Africa or in the Levant. 

Senator AYOTTE. Are we going to have to do some modernization 

and update on the equipment in Norway? 

General MILLS. We would have to as we restock it. We have a 

plan with all of our prepositioning, whether afloat or ashore, to 

modernize it on schedule at the times it needs to be done. But 

those caves are going to be restocked. They’re low in our priorities, 

in all honesty, but they are on our priorities to restock them and 

have them prepared and ready to go. 

Senator AYOTTE. One of the factors we’re dealing with in terms 

of just thinking about a difference in capability between the squadron and the caves is not only loading the ships, but also the equipment there isn’t as modern as what’s in the squadron right now, 

is it? 

90 

General MILLS. I’d say it’s comparable. I would say it’s comparable. 

Senator AYOTTE. It’s comparable? 

General MILLS. I can get you some information on that, but I 

would say it’s comparable. 

Senator AYOTTE. Okay. I would appreciate if you have any additional information on that as well. Thank you very much. 

[The information referred to follows:] 

The equipment sets within the Maritime Prepositioning Force (MPF) program and 

the Marine Corps Prepositioning Program-Norway (MCPP–N) are comparable in 

terms of modernization and maintenance readiness; however, the MPF equipment 

set includes larger quantities and a wider array of equipment than MCPP–N. The 

MCPP–N equipment set does not currently have all of the communications and 

weapons systems prepositioned in the MPF. 

The Marine Corps is currently conducting an assessment of MCPP–N to ensure 

future operational relevance from a capability and capacity standpoint. The Marine 

Corps is in the process of modifying the composition of prepositioning stocks within 

MCPP–N as part of an ongoing transformation effort. MCPP–N formerly supported 

an air-landed Marine Expeditionary Brigade (MEB) with engineering, transportation, aviation support equipment, and various classes of supply. This existing 

equipment set is being reshaped, with the addition of communications and additional ordnance assets, to support a Marine Air-Ground Task Force built around an 

infantry battalion task force and composite aviation squadron. MCPP–N will retain 

its primary role of augmenting up to a MEB-sized force to support the reinforcement 

of Norway and U.S. Marine Corps expeditionary operations. 

Over the course of the next several years, and to the maximum extent possible, 

MCPP–N will be restocked with equipment that becomes available as a result of the 

decommissioning of Maritime Prepositioning Ship Squadron-1 (MPSRON–1) and 

drawdown from combat operations in support of Operation Enduring Freedom. This 

is essential to increasing attainment levels in Norway and mitigating risk to U.S. 

European Command and U.S. Africa Command associated with the loss of 

MPSRON–1. Though MCPP–N will mitigate this risk to some extent, it is not a substitute for the afloat prepositioned capability within MPSRON–1. 

Senator AYOTTE. This has just been something I’ve been very interested in, in terms of our capacity and our ability of eliminating 

one of these squadrons in terms of response times. So I do appreciate your follow-up on it. We certainly are taking on additional 

risk by doing this. I think you’d agree with me on that. 

General MILLS. Yes, ma’am, there is additional risk. As we discussed earlier, the squadrons that we’re going to have are enhanced. They are better than the squadrons that we had. They 

have newer ships, they have more capacity, and so the individual 

squadron gives us a better capability. 

Senator AYOTTE. But also, location is helpful, too. 

General MILLS. Location is very helpful. 

Senator AYOTTE. Especially with AFRICOM, yes. 

General MILLS. Although those ships will be focused to the Pacific, the advantage they give you is the flexibility of being able to 

move them should a crisis arise someplace in the European or African theaters. You always have the flexibility with forward-deployed 

amphibious capability to move it to the point of crisis. 

Senator AYOTTE. Thank you, General Mills. I look forward to also 

continuing to talk with you about this issue. 

Secretary Stackley, if we undertake what I think would be foolish, to allow sequestration to go into place, on an annual basis 

that’s about $15 billion to the Navy, which as I understand it 

would be the equivalent of our entire shipbuilding budget in 1 year 

91 

or the equivalent of 2 years of maintaining our fleet, or would be 

the entire naval air fleet procurement in 1 year. Is that true? 

Mr. STACKLEY. In terms of numbers, that’s about right, yes, ma’am. The impact of the first $487 billion over the decade to the 

Navy was about $50 billion over the FYDP, and so the first thing 

when you talk about sequestration is you have to recognize that 

we’ve already carved out $50 billion and the budget that you’re 

looking at reflects those actions. 

To consider sequestration and its impact, the next thing you 

have to recognize is a lot of the budget can’t be adjusted. There’s 

some core of O&M that you have to have. So that $10 to $15 billion 

of additional impact per year really lays on top of a relatively small 

portion of the overall budget. So its impact will just be devastating. 

We don’t today plan for sequestration. The first step of planning 

sequestration would probably have to be arriving at a new defense 

strategy because the defense strategy that’s in place could not be 

supported if sequestration hit. 

Senator AYOTTE. General, I assume that if sequestration goes forward it would be devastating to the Marine Corps as well? 

General MILLS. Yes, ma’am, across the board; acquisition, the 

O&M part of it, and the training piece of it. Assuming the personnel section was excused from it, it would have a devastating effect on our acquisition, our training, and our readiness. 

Senator AYOTTE. It is my hope that we will take this issue up 

very quickly around here, so you don’t have to undertake any type 

of planning for things that would be devastating to our military, as 

well as for our industrial base, that has to look ahead in terms of 

planning and the capacity. I think about our shipbuilding capacity. 

This is a very, very important issue. So I appreciate both of your 

being here today. 

Thank you. 

Senator REED. Thank you, Senator Ayotte. 

I have two concluding questions. We’ve talked about the Littoral 

Combat Ship (LCS), a program that gets a lot of attention. The Marine Corps has expressed some interest in developing and fielding 

some modules for the LCS that would support Marine Corps warfare missions. Can you discuss, General Mills, what these modules 

might be and how it would complement everything we’ve talked 

about this morning? 

General MILLS. Certainly. We have a planning team right now, 

as a matter of fact, that’s out visiting the ships and working with 

the Navy to take a look at ways in which the Marine Corps could 

complement the capability of the LCSs. I think one that leaps immediately to mind is there’s an overriding requirement out in the 

combatant commands for amphibious ships. A lot of that requirement is relatively low-level engagement opportunities. I think that, 

given the fact that we can get some helicopters on board one of the 

LCSs, we could put a module on board in which marines could live 

and do some training and get ashore. I think that would be ideal 

for those kinds of low-level operations. 

Second, I think when you look at operations in littorals, in the 

shallow waters and perhaps the bays and rivers, those ships give 

you some capability in those areas, small-scale Marine Corps units, 

that you want to send forward. 

92 

I think there’s lots of opportunity there. We’re going to take a 

hard look at it. We’re going to work with the Navy fleet command 

to find opportunities to experiment with it. I think that we’ll find 

some use. 

Senator REED. Mr. Secretary, the program of record for LCS 

doesn’t have an expeditionary module or a Marine Corps component. How are you beginning to plan for this, or is this in such an 

early stage that it hasn’t reached your attention? 

Mr. STACKLEY. No, sir, the program of record has the three mission modules: anti-submarine warfare, mine countermeasures, and 

anti-surface warfare. But we recognize that that’s a starting point. 

What the LCS brings is flexibility. It’s a modular concept, so it 

brings space, volume, displacement, and margin. It provides power 

and links. It provides aviation capability and also provides boathandling capability. 

We’re looking at missions that that capacity that the LCS brings 

can neatly support. General Mills just talked about the Marine 

Corps. We are also in discussions with SOF. We look at some specialty niches associated with humanitarian assistance, as well as 

search and seizure. 

Admiral Harvey has been pounding the table on this: hey, we 

need to look beyond the first three mission packages. We need to 

be looking at where else can we employ LCS and get started now 

on developing the concepts so we can have that capability in hand 

sooner. 

Senator REED. Thank you. 

General Mills and Secretary Stackley, you’re probably aware that 

the Chinese have an amphibious vehicle. One version is a tank in 

which a 105-millimeter gun appears. The other is an infantry fighting vehicle with a 30-millimeter cannon. They’re both high speed 

planing vehicles. They look a lot or something like the EFV might 

have looked like. They’re also building their first set of large amphibious ships that compare to, roughly, the LPD–17 class. 

Can you give us an assessment of your view or your take, or is 

this something that you’re still considering? 

General MILLS. I think it reflects the interest that China has in 

overseas areas in which they’re very interested in looking for natural resources and things like that, and they begin to have the capability to project power. I think that any country, any world 

power, has to have that capability, the ability to project power, and 

I think that amphibious forces are the natural growth from making 

that assumption. So I think that it’s their beginning steps on a way 

to being able to project power to areas that they’re interested in. 

Senator REED. Mr. Secretary? 

Mr. STACKLEY. I would say that China’s not alone. There are several nations around the world that are expanding their amphibious 

warfare capabilities. I think statistically there’s a 200 percent increase when you look globally at investment in amphibious capabilities beyond the United States. More recently, it’s been well-advertised that the Russian navy is acquiring a French-designed and 

built amphibious ship, the Mistral-class. 

So, as General Mills described, it is a method of power projection, 

increasing attention in the littorals; I think that simply reflects 

that. 

93 

Senator REED. Thank you very much, gentlemen, not only for 

your testimony today, but for your service to the Navy and the Marine Corps and to the Nation. Obviously, as always, please commend those that you lead for their extraordinary efforts. 

We’ll keep the record open for a week, and there may be additional statements or questions submitted by colleagues. We would 

ask you to respond as quickly as you could to any written questions. 

With no further business, this hearing is adjourned. 

[Questions for the record with answers supplied follow:] 

QUESTIONS SUBMITTED BY SENATOR KAY R. HAGAN

MODERNIZED EXPANDED CAPACITY VEHICLE

1. Senator HAGAN. Lieutenant General Mills, until recently, there were plans to 

modify and upgrade High Mobility Multipurpose Wheeled Vehicle (HMMWV), 

through the Modernized Expanded Capacity Vehicle (MECV) program, to provide a 

light tactical vehicle that could be useful in an environment where improvised explosive devices (IED) are prevalent. Now, all efforts are focused towards the Joint Light 

Tactical Vehicle (JLTV). The decision to move away from the MECV program has 

impacted the defense industrial base. Industry moved to address HMMWV survivability and crew protection concerns and now they are told the program is terminated. Meanwhile, the JLTV is still in the research, development, test, and evaluation (RDT&E) phase. What is the Marine Corps’ plan should the JLTV program’s 

timeline slide? 

General MILLS. The HMMWV Survivability Improvement Initiative (HSII) was 

developed in early 2011 as a complementary effort to JLTV, recapitalizing a portion 

of our light tactical vehicles and extending their service life. The Army and Marine 

Corps collaboratively developed JLTV and HMMWV recapitalization requirements 

and programs (called MECV in the Army) throughout this period. The Marine Corps 

evaluated, through experimentation, testing, and analysis, a recapitalization approach, HSII, but decided against it. Given the added weight necessary to improve 

protection, HMMWV-based platforms will not meet Marine Corps requirements in 

terms of reliability, payload, service life, mobility, ability to fit on Maritime 

Prepositioning Force (MPF) shipping. The Army does not intend to invest to meet 

these requirements. Therefore, the Marine Corps will reduce the scope of our 2011 

HMMWV competitive survivability initiative and establish a HMMWV sustainment 

program. The purpose of that effort, through modification to existing platforms, is 

to extend HMMWV service life out to 2030. Marine Corps collaboration with the 

Army MECV program will continue to identify successful component designs that 

may be applied in our HMMWV sustainment program. 

2. Senator HAGAN. Lieutenant General Mills, do you see any value in continuing 

to explore options with the MECV testing, for which approximately $20 million had 

been budgeted for fiscal year 2012? 

General MILLS. No. HMMWV recap does not meet the Marine Corps requirements 

for light vehicles meeting the full desired mission profile, while remaining transportable and possessing the desired characteristics of our sustainment effort, returning 

reliability, payload, and mobility. 

3. Senator HAGAN. Lieutenant General Mills, what factors were behind the decision to cancel the MECV program and focus on the JLTV? 

General MILLS. Last year, we determined that with the added weight necessary 

to improve protection, HMMWV-based platforms will not meet Marine Corps requirements in terms of reliability, payload, service life, mobility, or ability to fit on 

amphibious and MPF shipping. Therefore, we reduced the scope of our HMMWV 

competitive survivability initiative to a HMMWV sustainment program. The purpose of that effort is to extend the service life of our roughly 14,500 light tactical 

vehicle fleet out to 2030, as a portion is replaced by the JLTV. The focus of the 

HMMWV sustainment effort will be toward safety and engineering enhancements, 

a return of mobility and payload, increased reliability, and reduced operating costs 

for those vehicles for the operating forces. 

94 

QUESTIONS SUBMITTED BY SENATOR ROGER F. WICKER

EXPEDITIONARY FIGHTING VEHICLE

4. Senator WICKER. Secretary Stackley, the Expeditionary Fighting Vehicle (EFV) 

program went through a Nunn-McCurdy breach and recertification in 2007 during 

which the Department of Defense (DOD) certified to Congress that requirements for 

an amphibious assault capability were still operationally necessary and that the 

most cost-effective means to achieve that capability was the EFV. Not much has 

changed in terms of the need for the Marine Corps to have the capability to carry 

out an amphibious assault. If anything, the area denial capabilities of our adversaries that would oppose Navy-Marine Corps amphibious operations have increased. 

What leads DOD and the Navy to believe that lesser requirements for a vehicle like 

the EFV are adequate to accomplish the amphibious assault mission? 

Mr. STACKLEY. The Navy and Marine Corps have conducted/supported campaign 

analysis and a wargame examining scenarios requiring power projection from the 

sea using the EFV as well as the legacy Amphibious Assault Vehicle (AAV) and our 

current and projected suite of air assault connectors. The analysis used official 

threat assessments and modeled battlespace preparation in order to define threats 

to landings. Using fielded and planned capabilities to conduct pre-assault battlespace preparation, the Navy assessed that U.S. weapons and sensors will allow amphibious ships to operate at 12 nautical miles from the coast with acceptable risk 

against any residual threats. This analysis suggests a 25 nautical miles assault 

range of the EFV may not be required. 

For the past 2 decades, both the threats in the littorals and U.S. area and selfdefense capabilities against those threats have evolved, enabling discharge of amphibious vehicles at approximately 12 nautical miles from shore. While the tactical 

advantages of at-sea speed capability provided by the EFV are not dismissed, the 

principal driving factor leading to the EFV’s water speed requirement was the assumption that marines would not be combat-ready after spending more than an 

hour in the vehicle at sea—a legacy of the current AAV. Initial developmental testing indicated that improvements in habitability (air conditioning and improved vehicle exhaust) permitted marines to ride in the vehicle longer without suffering ill effects associated with the legacy AAV. At-sea speed requirements were a significant 

system complexity and cost-driver that did not significantly contribute to the operational effectiveness of the vehicle. 

5. Senator WICKER. Secretary Stackley, do the Navy and the Marine Corps stand 

behind the requirement to conduct amphibious operations against a defended shoreline, or can requirements and costs be reduced to support landings in only 

uncontested areas—in other words, is the amphibious assault mission still relevant 

for the future? 

Mr. STACKLEY. There is absolutely an enduring requirement for the capability to 

conduct opposed amphibious operations; in simple terms, this gives the United 

States an assured access capability under any circumstances. America remains a 

maritime nation with global responsibilities. The majority of the world’s population 

lives within 200 miles of the sea. The Marine Corps-Navy team provides the Nation’s only assured access force that can come from the sea to project and sustain 

power ashore in this environment. Amphibious forces provide a maritime power 

such as the U.S. significant advantages including the ability to overcome the tyranny of distance and project power where we have no basing or infrastructure. The 

amphibious capability inherent in the Marine Corps also provides a powerful deterrent that is central to our National Security Strategy. 

Forward deployed amphibious forces are capable of conducting security cooperation, building partnership capacity, responding to crises by providing humanitarian 

assistance and disaster response (HA/DR) or conducting non-combatant evacuation 

operations, serving as a deterrent to hostility, and conducting forcible entry as either a single force or facilitating the forward movement of a larger force. In all 

cases, the global presence and rapid response of amphibious forces provide critical 

options to the Joint Force Commanders, Geographic Combatant Commanders, and 

the National Command Authority. 

Conversely, the risks associated with a lost or diminished amphibious capability 

present serious threats to our national security from lost influence with our global 

partners, an inability to develop new partnerships, an inability to counter growing 

threats from terrorism, an inability to protect our interests in the global commons 

from piracy threats, and unchecked competition from peer nations. It is imperative 

that the Navy-Marine Corps team maintains its amphibious capabilities forward deVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00100 Fmt 6601 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
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ployed and globally postured so that it remains the ‘‘most ready’’ when the Nation 

is ‘‘least ready.’’ 

6. Senator WICKER. Secretary Stackley, fundamentally, what has changed since 

the Nunn-McCurdy certification in 2007 that favored continuing the EFV as the 

most cost-effective way to meet the amphibious assault requirement? 

Mr. STACKLEY. The decision to cancel EFV procurement was not made lightly, as 

we recognized the importance of the Marine Corps’ ability to respond to crisis 

around the globe as vital to our Nation’s security. Two factors were at the core of 

the decision to cancel the EFV: affordability, both in procurement and sustainment; 

and the impact of that cost on our ability to reset or modernize other warfighting 

capabilities after 10 years of combat. Projected costs of EFV grew substantially over 

the course of the program, and it simply became unaffordable to procure and sustain 

over time, especially in light of this Nation’s emerging fiscal environment and other 

critical capability needs of the Marine Corps. 

7. Senator WICKER. Secretary Stackley and Lieutenant General Mills, when the 

Marine Corps provided information to Congress in January supporting the decision 

to end the EFV program, the case for termination was made by citing the affordability of the EFV, not whether the EFV would be reliable and capable of meeting 

mission requirements. The Marine Corps said that continuing with the EFV would: 

consume about half the Marine Corps total procurement budget for 2018 to 2025; 

consume all of the budget that was projected to be available for procurement of 

ground combat vehicles over that period; and consume about 90 percent of the operation and maintenance (O&M) budget for Marine Corps ground vehicles when the 

EFV was fully fielded. These cost projections were made against historical cost averages. The affordability concerns raised by the Marine Corps are significant, but 

should we allow comparisons to historical costs to drive an assessment of what is 

required to do the mission? 

Mr. STACKLEY and General MILLS. One element used to evaluate the affordability 

of the EFV and all other ground vehicle modernization and sustainment efforts was 

the 30-year average of vehicle procurement as it related to the Marine Corps 

warfighting investment account. The last 30 years contained periods of significant 

investment in ground equipment modernization (LAV, M1A1, MTVR, LVSR, 

HMMWV, and HIMARS). During that period, vehicle investment averaged 33 percent of total procurement except during modernization peaks, when it approached 

or slightly exceeded 50 percent of total procurement. A principal consideration of 

EFV affordability was the measure of cost versus capability delivered. The EFV represented a major expense in combat vehicle modernization, with a great deal of the 

cost being driven by a high water speed requirement where water mobility constituted only 20 percent of the vehicle’s operational mission profile. During the 

EFV’s development, landward threats grew exponentially as evidenced by enemy 

employment of IEDs in Iraq and Afghanistan but the constraints imposed by the 

EFV’s water mobility requirements did not allow for growth to accommodate armor 

and other protective systems to make the vehicle more operationally effective in its 

landward mission. We believe future vehicle modernization should focus investments in more operationally relevant capabilities, procured faster, and—where operational or threat complexity exceed a single vehicle type’s capacity—a portfolio approach to modernization mitigates the weakness imposed by overinvesting in specialized mission vehicles. 

8. Senator WICKER. Secretary Stackley and Lieutenant General Mills, since almost all new procurement programs are more technically sophisticated than the 

equipment they replace, is the historical cost of legacy programs relevant to the requirements needed to execute the mission today? 

Mr. STACKLEY and General MILLS. To the extent that historical data provides a 

benchmark from which to begin planning, historical data regarding the cost data of 

legacy programs is relevant to the requirements needed to execute the mission 

today. 

As to the EFV, the Marine Corps assessed the affordability of EFV along with 

other key elements of our ground combat and tactical vehicles against several affordability metrics, one of which was based on historical vehicle investments projected into the future. EFV was unaffordable by every metric; however, it is just as 

important to note that even without EFV, the potential required investment in vehicle modernization and sustainment is also potentially unaffordable when measured 

against the same metrics. This means that our fiscal trade-space within the vehicle 

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portfolio is very limited, even for a capability as important as that provided by an 

amphibious combat vehicle (ACV). 

9. Senator WICKER. Secretary Stackley and Lieutenant General Mills, the Average 

Procurement Unit Cost—the cost of the vehicle not including research and development (R&D) and program-unique military construction costs—of the EFV was estimated to be $16.8 million in fiscal year 2007 dollars while some projections have 

the cost reaching more than $23 million per vehicle. The cost of the legacy AAV is 

about $4 million per vehicle. What sort of methodology or analysis of the operational 

requirements went into making the decision to end the EFV other than concern 

about its cost? 

Mr. STACKLEY. The Navy and Marine Corps conducted campaign analysis and 

wargames examining scenarios requiring power projection from the sea using the 

EFV as well as the legacy AAV and our current and projected suite of air assault 

connectors. The analysis used official threat assessments and modeled battlespace 

preparation in order to define threats to landings. Using fielded and planned capabilities to conduct pre-assault battlespace preparation, the Navy assessed that U.S. 

weapons and sensors will allow amphibious ships to operate at 12 nautical miles 

from the coast with acceptable risk against any residual threats. The closure timeframe for ship to shore movement no longer requires a high speed vessel to ensure 

combat build-up ashore. 

General MILLS. The decision to cancel EFV procurement was not made lightly, as 

we recognized the importance of the Marine Corps’ ability to respond to crisis 

around the globe as vital to the Nation’s security. Three factors were at the core 

of the decision to cancel the EFV: affordability, both in procurement and 

sustainment; the impact of that cost on our ability to reset or modernize other 

warfighting capabilities after 10 years of combat; and cost of the EFV in relation 

to its overall operational suitability across the range of military operations. Projected costs of EFV grew substantially over the course of the program, and it simply 

became unaffordable to procure and sustain over time, especially in light of the Nation’s emerging fiscal environment and other critical capability needs of the Marine 

Corps. 

The following is a summary of the key operation and sustainment (O&S) ground 

rules and assumptions in the EFV O&S estimate: 

• Total Life Cycle Systems Management Program (Program Manager has cradle-to-grave responsibility for O&S) 

• Contractor Logistics Support (Procurement, Marine Corps (PMC) and Operation and Maintenance, Marine Corps (OMMC)) 

• PMC will cover these costs until a determined Depot Support Date at 

which time these costs will be split 50/50 for 1 year; OMMC funding will 

be used thereafter 

• Three Levels of Maintenance (organizational, intermediate, depot) 

• Peacetime Operation—437 hrs/yr 

• Engine: 150 hrs/vehicle/yr 

• APU: 287 hrs/vehicle/yr 

• Mature System Reliability—21.9 hrs mean time between failure 

• Tech Insertion Costs (PMC) are excluded 

• Any applicable O&S-related surcharges are not included at this time 

Procurement of the EFV was simply no longer affordable; and the projected operation and support costs became too onerous. 

10. Senator WICKER. Lieutenant General Mills, the concept of ship-to-shore maneuver supporting the EFV considered anti-ship threats from land-based mobile 

cruise missiles, air-to-surface weapons, and mines sufficiently serious that amphibious assaults were planned to be launched from over-the-horizon to minimize the 

chances of loss or damage to Navy ships. In the years since the EFV program was 

started in 1996, anti-ship ballistic missile capabilities have been added as a potential threat to large Navy ships, including the large-deck amphibious ships, and the 

sophistication of the other threats has increased. What has changed about the NavyMarine Corps concept of ship-to-shore maneuver that makes the Navy more willing 

to bring marines closer to shore to launch the assault phase? 

General MILLS. 25 nautical miles was based on keeping the amphibious force beyond the enemy’s radar horizon, thereby making it more difficult for the enemy to 

monitor amphibious force activity and target amphibious warships. The proliferation 

of anti-ship cruise missiles already allowed most of our adversaries to engage well 

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plicated. The triad of EFV, Landing Craft Air Cushion (LCAC), and MV–22 allowed 

amphibious warships to project forces ashore and remain beyond the 25 nautical 

miles. 

However, the capabilities of our Aegis capable combatants have always allowed 

our Navy systems to engage incoming anti-ship cruise missile/airborne threats at 

distances less than 25 nautical miles, and our analysis continually indicates that 

these tactics are successful with very few leakers. Ships could go into as close as 

10 nautical miles and still be protected from these leakers with organic maritime 

defense systems. 12 nautical miles was selected as the distance for our revised concept for amphibious operations because it also keeps ships out of range of coastal 

gun systems. 

With the cancellation of EFV, ships of the amphibious force will now have to come 

in closer than 25 nautical miles to deploy the ACV. 

The LCAC and MV–22 still allow most of the amphibious warships to stay outside 

25 nautical miles. Only those ships deploying the ACVs need to come into 12 nautical miles and then they only need to remain as long as needed to launch the initial 

ACV assault force. Once complete, these ships could go back outside 25 nautical 

miles, and the LCAC with the MV–22 (in concert with other surface and vertical 

connectors) remain sufficient to sustain the force. 

11. Senator WICKER. Lieutenant General Mills, if a 25-knot water speed is no 

longer required to launch from about 25 miles from the shore, what range of speed 

and distance from shore are being considered for the EFV’s replacement? 

General MILLS. The launch distance is not a static position; it’s going to be dependent on a number of factors: our tactics, techniques, and procedures of using the 

sea as maneuver space. Also, there have been significant improvements in the 

Navy’s ability to deal with the threat. 

For the past 2 decades, both the threats in the littorals and U.S. area and selfdefense capabilities against those threats have evolved, enabling discharge of ACVs 

at distances beyond the visual horizon (approximately 12 nautical miles from shore). 

While the tactical advantages of at-sea speed capability provided by the EFV are 

not dismissed, the principal driving factor leading to the EFV’s water speed requirement was the assumption that marines would not be combat-ready after spending 

more than an hour in the vehicle at sea—a legacy of the current AAV. Initial developmental testing indicated that improvements in habitability (air conditioning and 

improved vehicle exhaust) more than high speed or longer duration permitted marines to ride in the vehicle longer without suffering ill effects associated with the 

legacy AAV. At-sea speed requirements were a significant system complexity and 

cost-driver that did not significantly contribute to the operational effectiveness of 

the vehicle. 

12. Senator WICKER. Lieutenant General Mills, what drives the speed and distance requirement in terms of how long marines can stay in an amphibious vehicle 

and be effective when they reach shore? 

General MILLS. For the past 2 decades, both the threats in the littorals and U.S. 

area and self-defense capabilities against those threats have evolved, enabling discharge of amphibious vehicles at approximately 12 nautical miles from shore. While 

the tactical advantages of at-sea speed capability provided by the EFV are not dismissed, the principal driving factor leading to the EFV’s water speed requirement 

was the assumption that marines would not be combat-ready after spending more 

than an hour in the vehicle at sea—a legacy of the current AAV. Initial developmental testing indicated that improvements in habitability (air handling and improved vehicle exhaust) more than high speed or longer duration permitted marines 

to ride in the vehicle longer without suffering ill effects associated with the legacy 

AAV. At-sea speed requirements were a significant system complexity and cost-driver that did not significantly contribute to the operational effectiveness of the vehicle. 

13. Senator WICKER. Lieutenant General Mills, can this be improved? 

General MILLS. Yes. Improved habitability is a key system attribute defining the 

ACV. There are various mature, low-risk technologies that can be incorporated that 

will improve both sea and landward ride quality. 

14. Senator WICKER. Lieutenant General Mills, the Marine Corps proposes responding to the EFV termination through a three-phased acquisition policy: upgrade 

a portion of the legacy AAV inventory through a Service Life Extension Program 

(SLEP) that will extend their life and add capability; accelerate the Marine Personnel Carrier (MPC) program designed to complement the EFV, AAV, or the reVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00103 Fmt 6601 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
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placement for the EFV known as ACV; and develop the new ACV building on the 

lessons learned from the EFV. The wind-up of the EFV is focused on harvesting relevant technology from the EFV program to transfer to the new ACV. The MPC 

would not be designed to swim ashore, but would be a fighting vehicle on land. Design requirements are being developed. How many of the legacy AAVs now in service will undergo a SLEP? 

General MILLS. The SLEP is now referred to as a survivability upgrade which is 

intended to address the greatest limitation of the current AAV—survivability and 

force protection against underbelly mines and IEDs. The upgrade will improve overall vehicle survivability for ∼392 AAVP7A1s by adding underbelly blast protection, 

interior spall mitigation, and blast attenuating seating. Anticipating resulting 

weight growth, the program will also restore vehicle land and water mobility to previously achieved performance levels with power train, track, and suspension upgrades. These vehicles will be phased out of the inventory as the ACV reaches full 

operational capability. 

15. Senator WICKER. Lieutenant General Mills, what capabilities will be added to 

the AAV? 

General MILLS. The survivability upgrade is intended to address the greatest limitation of the current AAV—survivability and force protection against underbelly 

mines and IEDs. The upgrade will improve overall vehicle survivability for ∼392 

AAVP7A1s by adding underbelly blast protection, interior spall mitigation, and blast 

attenuating seating. Anticipating resulting weight growth, the program will also restore vehicle land and water mobility to previously achieved performance levels with 

power train, track, and suspension upgrades. These vehicles will be phased out of 

the inventory as the ACV reaches full operational capability. 

16. Senator WICKER. Lieutenant General Mills, how old are the AAVs and how 

much additional life will the SLEP provide? 

General MILLS. Today’s AAV are built upon the LVT–7 family of vehicles which 

began fielding in 1971. Over the past 40 years these systems have been service life 

extended, product improved, rebuilt to standard, upgraded, and continuously maintained at all echelons. Our current survivability upgrade is intended to address the 

greatest limitation of the current AAV—survivability and force protection against 

underbelly mines and IEDs. The upgrade will improve overall vehicle survivability 

for ∼392 AAVP7A1s by adding underbelly blast protection, interior spall mitigation, 

and blast attenuating seating. Anticipating resulting weight growth, the program 

will also restore vehicle land and water mobility to previously achieved performance 

levels with power train, track, and suspension upgrades. These vehicles will be 

phased out of the inventory as the ACV reaches full operational capability by 2030. 

17. Senator WICKER. Lieutenant General Mills, how much funding does the Marine Corps estimate will be required—or how much is available—for a SLEP? 

General MILLS. The 2013 President’s budget supports the initiation of the AAV 

survivability upgrade program. The total cost estimate is based on an Average Production Unit Cost of $1.65 million for 392 vehicles. 

18. Senator WICKER. Lieutenant General Mills, given budget constraints, how confident is the Marine Corps that improvement of the amphibious assault capability 

may not be limited to a SLEP of the AAV? 

General MILLS. Under any future budgetary constraint, the survivability upgrade 

of the AAV is essential to maintaining an operationally relevant ACV capability 

until a modern ACV is developed and fielded. We have planned a prioritized, 

sequenced, and balanced combat vehicle modernization program that is achievable, 

with moderate risk to other ground combat modernization and within the President’s budget fiscal year 2013 levels of investment extended through fiscal year 

2030. ACV modernization is our top ground combat investment priority but future 

budgetary pressures could severely limit our ability to achieve this capability. 

19. Senator WICKER. Lieutenant General Mills, in terms of the MPC, how expensive is this vehicle estimated to be in comparison to the EFV or its proposed replacement, the ACV? 

General MILLS. In order to better distribute combat power for sustained operations ashore, two MPCs are required to lift the same reinforced rifle squad that 

is concentrated in a single ACV. Based on responses we have received from industry 

and our own estimates, the cost to procure an equivalent number of MPC is approximately a quarter of the cost of EFV. Based on a range of cost estimates and affordVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00104 Fmt 6601 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
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ability predictions, dependent on capability, quantity, and production schedules, 

MPCs are estimated to cost half or less than that to procure ACV. In terms of total 

life cycle costs, equivalent numbers of MPC will cost about one-third of EFV and 

one-half of ACV. 

20. Senator WICKER. Lieutenant General Mills, how much money will actually be 

saved by cancellation of the EFV if the Marine Corps must extend the life of the 

AAV and design and build two new vehicles, the ACV and the MPC? 

General MILLS. The decision to procure MPC and to upgrade AAV was independent of the decision to cancel EFV. The AAV upgrade was necessary to bridge 

to EFV and will be necessary to bridge to ACV; and MPC was a complementary capability to EFV to address overall tactical lift capacity. Both initiatives pre-dated 

the cancellation of the EFV program. The principal cost avoidance will be attained 

by developing an ACV that costs substantially less to procure than the EFV would 

have. We have done extensive systems engineering cost-to-capability analysis in 

support of the ACV program in order to prioritize capabilities, ensure a lower risk 

engineering, manufacturing, and development program, and to control cost from the 

outset of requirements development. 

21. Senator WICKER. Lieutenant General Mills, what is the timeline for designing 

and building the MPC? 

General MILLS. We are working to fully develop an integrated acquisition plan in 

support of ACV, MPC, and AAV survivability upgrade. Over the last several years, 

we have conducted extensive market research and technology development in support of the MPC program which we believe will lead to the potential for a lower 

risk, more rapid acquisition. Still, our acquisition plans are sequenced and are 

shaped by cost and affordability projections over time and by the necessity to consider other required modernization and sustainment efforts across our warfighting 

portfolio. Based on these estimates, we will have an initial operational capability in 

fiscal year 2022. 

22. Senator WICKER. Lieutenant General Mills, won’t an improved AAV that will 

be in service for a long time together with the new ACV leave the Marine Corps 

with two different sets of amphibious vehicles and the associated higher costs of a 

mixed inventory? 

General MILLS. Improvements to the AAV are intended to enable the Marine 

Corps to sustain its amphibious capability until the ACV is fielded. As with other 

equipment replacement programs, the transition period between the initial fielding 

of a new capability and attainment of full operational capability will result in a 

mixed fleet of vehicles. During this transition period, the AAV inventory will be disposed as the ACV inventory increases. 

23. Senator WICKER. Lieutenant General Mills, how will the MPC get ashore if 

it doesn’t swim as the EFV and the ACV would? 

General MILLS. Introduction of the MPC into theater is planned as part of a Maritime Prepositioning Force deployment. MPC is a reinforcing capability relative to 

the self-deploying ACV. MPC will transit to the beach or port via connectors such 

as the LCAC, conventional landing craft, or via pier-side offload. The ACV will be 

optimized to support ship-to-objective water and land mobility as the main effort of 

an amphibious assault, while the MPC is optimized to provide a combat vehicle capable of protected land mobility in support of sustained operations ashore. 

24. Senator WICKER. Lieutenant General Mills, does this mean that the Marine 

Corps will be operating two different combat vehicles during the land phase of an 

amphibious assault, the ACV and the MPC? 

General MILLS. The Marine Corps operates multiple combat and tactical vehicles 

including AAVs, Light Armored Reconnaissance Vehicles, tanks, and several tactical 

vehicles. The role of providing tactical mobility in armored personnel carriers would 

have been fulfilled by a combination of the EFV and the MPC. The ACV will fulfill 

the role intended for the EFV and it will be complemented by the MPC to achieve 

our required mobility capacity across the range of military operations. 

25. Senator WICKER. Lieutenant General Mills, won’t protection from IEDs and 

other threats necessarily be different in the two vehicles? 

General MILLS. Yes. Each system will need to be designed to counter and mitigate 

the effects of the IED threat. The ACV design will be driven, in part, by its strenVerDate Aug 31 2005 13:41 Feb 19, 2013 Jkt 000000 PO 00000 Frm 00105 Fmt 6601 Sfmt 6621 Y:\BORAWSKI\DOCS\76538.TXT JUNE PsN: JUNEB
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uous amphibious requirements which will likely mean a different survivability and 

force protection approach than for the MPC which will be designed for superior land 

mobility. However, common materials and approaches will be evaluated in order to 

reduce life cycle costs. ACV protection methodologies, performance, and payload protection trade-space assessments and capability level estimates will be a critical part 

of early technology demonstration and development efforts just as they were for the 

MPC. 

[Whereupon, at 11:48 a.m., the subcommittee adjourned.] 

Æ