[House Hearing, 114 Congress] [From the U.S. Government Publishing Office] [H.A.S.C. No. 114-145] OVERSIGHT REVIEW OF THE U.S. NAVY'S LITTORAL COMBAT SHIP PROGRAM __________ HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON ARMED SERVICES HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION __________ HEARING HELD DECEMBER 8, 2016 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] __________ U.S. GOVERNMENT PUBLISHING OFFICE 23-763 PDF WASHINGTON : 2017 ---------------------------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Publishing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-mail, [email protected]. SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS VICKY HARTZLER, Missouri, Chairwoman JEFF MILLER, Florida JACKIE SPEIER, California K. MICHAEL CONAWAY, Texas JIM COOPER, Tennessee JOSEPH J. HECK, Nevada HENRY C. ``HANK'' JOHNSON, Jr., AUSTIN SCOTT, Georgia Georgia MARTHA McSALLY, Arizona GWEN GRAHAM, Florida Heath Bope, Professional Staff Member Katy Quinn, Professional Staff Member Anna Waterfield, Clerk C O N T E N T S ---------- Page STATEMENTS PRESENTED BY MEMBERS OF CONGRESS Hartzler, Hon. Vicky, a Representative from Missouri, Chairwoman, Subcommittee on Oversight and Investigations................... 1 Speier, Hon. Jackie, a Representative from California, Ranking Member, Subcommittee on Oversight and Investigations........... 3 WITNESSES Gilmore, Dr. J. Michael, Director, Operational Test and Evaluation, Department of Defense.............................. 12 Mackin, Michele, Director, Acquisition and Sourcing Management, Government Accountability Office............................... 9 O'Rourke, Ronald, Specialist in Naval Affairs, Congressional Research Service............................................... 14 Rowden, VADM Thomas S., USN, Commander, Naval Surface Forces..... 10 Stackley, Hon. Sean J., Assistant Secretary of the Navy for Research, Development, and Acquisition, Department of the Navy. 5 APPENDIX Prepared Statements: Gilmore, Dr. J. Michael...................................... 101 Hartzler, Hon. Vicky......................................... 45 Mackin, Michele.............................................. 74 O'Rourke, Ronald............................................. 133 Speier, Hon. Jackie.......................................... 47 Stackley, Hon. Sean J., joint with VADM Thomas S. Rowden..... 50 Documents Submitted for the Record: Two charts displayed by Ms. Speier........................... 159 Witness Responses to Questions Asked During the Hearing: Mr. Byrne.................................................... 163 Ms. Speier................................................... 163 Questions Submitted by Members Post Hearing: Mrs. Hartzler................................................ 167 Ms. Speier................................................... 168 OVERSIGHT REVIEW OF THE U.S. NAVY'S LITTORAL COMBAT SHIP PROGRAM ---------- House of Representatives, Committee on Armed Services, Subcommittee on Oversight and Investigations, Washington, DC, Thursday, December 8, 2016. The subcommittee met, pursuant to call, at 9:05 a.m., in room 2118, Rayburn House Office Building, Hon. Vicky Hartzler (chairwoman of the subcommittee) presiding. OPENING STATEMENT OF HON. VICKY HARTZLER, A REPRESENTATIVE FROM MISSOURI, CHAIRWOMAN, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS Mrs. Hartzler. Good morning. I would like to extend a warm thank you to our witnesses testifying before us today and welcome them to our subcommittee's last hearing event for the 114th Congress. I thank the subcommittee members for your contributions and dedication during this Congress. I wanted to especially express gratitude to those members who are not going to be returning next year. Certainly, Representative Graham, you have been a wonderful member on this committee and on Armed Services and just here in Congress as well. I have enjoyed getting to know you and appreciate your work, your dedication. Representative Graham is--comes to the hearings. I don't think she missed hardly any, so responsible and cares so deeply about the military, so we are going to miss you, but thank you. Thank you. And we also have subcommittee member Representative Heck and Representative Miller who may be joining us, but we appreciate their service as well. So in connection with today's hearing, I welcome the members also of the full committee who are not permanent members of the subcommittee, who are or who will be attending. And I ask unanimous consent that these committee members be permitted to participate in this hearing, with the understanding that all sitting subcommittee members will be recognized for questions prior to those not assigned to the subcommittee. Without objection, so ordered. So today, we take testimony of the littoral combat ship [LCS] program. We seek to gain a deeper understanding of the challenges that this program has presented us in the past and the opportunities that exist as the program moves forward. We need to grow the size of this Navy's surface fleet. The LCS could have an important role in increasing our capabilities and our flexibility. I know that there is a critical need to replace our less capable and decommissioned mine countermeasure ships, patrol craft, and all of our Hazard Perry-class frigates. I believe the littoral combat ship and the eventual upgrade to the frigate design has great potential to fulfill the roles for the platforms it replaces. This is why the LCS has garnered bipartisan support in the Seapower Subcommittee. The concept of the LCS and the decision to begin the program came at a time in the Department of Defense's acquisition history in which senior leaders of the Department thought it was necessary and possible to disregard the natural evolution of technology by skipping a generation of development. It was good theory but proved costly and cumbersome to implement. We have learned many lessons from this period. For example, introducing immature technologies into acquisition programs will lead to cost and schedule growth. Awarding contracts without a stable design and directing prescriptive government specifications also increases cost and schedule. It is only with unleashing the power of best buying practices that we can realize acquisition efficiencies. These lessons have been hard learned in a multitude of acquisition contracts. For example, stable government funding is essential to providing material ordering and labor efficiencies. Additionally, innovative multiyear procurements or block buys save money because long-term agreements with subcontractors and vendors provides contracting stability. Dangerous reductions below minimum order quantities only serve to exacerbate our industrial base and increase the cost of the taxpayer. That is why the House has advocated adding a third LCS in fiscal year 2017, and has expressed reservations about the Navy's acquisition strategy, which involves procuring one LCS frigate every year during fiscal year 2018, 2019, and 2020. I also want to discuss the Navy's force structure requirements of 52 small surface combatants. The Navy's force structure is based on their ability to meet combatant commander requirements both in peace and in war. That is why I am perplexed with Secretary Carter's determination that we only need 40 LCS frigates. I believe the Secretary's decision lacks analytical rigor. I am hoping that the next administration will review this issue. We must absolutely integrate the program's acquisition lessons learned as we evaluate, with prudent scrutiny, the opportunity to invest an additional $14 billion to complete the purchase of LCS and transition its hull form into a frigate design. We must also ensure that the mission modules which are integral to the first LCS designs are successfully completed, tested, and fielded at the lowest possible price. So I look forward to discussing this program with our distinguished panel of witnesses we have here before us. But before I introduce the witnesses, I turn to the Oversight Investigation Subcommittee ranking member for any opening remarks that she would like to make. [The prepared statement of Mrs. Hartzler can be found in the Appendix on page 45.] STATEMENT OF HON. JACKIE SPEIER, A REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS Ms. Speier. Thank you, Madam Chair. We are here today to examine a case study in gross mismanagement on the part of the Navy. At virtually every decision point--from conceiving the initial flawed concept, to the concurrent acquisition process, to the huge cost overruns, to the huge fundamental flaws in the ships themselves, and to the feeble attempts by the Navy and DOD [Department of Defense] to correct course--the Navy has wasted billions in taxpayer dollars and failed to produce a ship that meets its objectives. What we examine today is: Has the Navy learned its lesson, have they corrected course, and are they moving forward with a stable ship design based on a sound analytical foundation? From the testimony of witnesses today, I fear the answer is a resounding no. I would especially like to know who certified that LCS would cost $220 million each. We know it now costs more than double per ship, at $478 million. Who briefed this to Congress, and who signed off on this gross escalation in cost? While cost overruns are by no means acceptable, perhaps they can be explained if they resulted in a functional ship. But the LCS isn't just outrageously expensive, it is also outrageously bad at doing its job. In simple terms, it is a dud. Just look at how many issues six out of eight ships in service have had, and I point to this chart, which you can see. Every one of these six ships, and there have only been eight that have been in the water, six out of the eight ships have had serious problems in which the engines have flooded, the couplings cracked, and the ships broke down in transit. [The chart displayed can be found in the Appendix on page 159.] Ms. Speier. Now, the USS Montgomery was commissioned in September of this year, and it has already had two engine failures and two collisions that resulted in major damage. What is even worse is that because of the way the Navy structured the contracts, taxpayers are still responsible for most of the repair costs, even when the shipbuilders are at fault. These contracts mean that, in some cases, the shipbuilders aren't responsible for even one cent of potential defects. In other words, you take delivery of an LCS, it immediately breaks down, and there is no warranty, there is no lemon law. So there is no compunction on the part of the shipbuilder to make sure that this product is indeed worthy to be afloat, because if it breaks down, it is the taxpayers that will pick up the tab. Why is it that the Coast Guard can hold its shipbuilders responsible for defects, but the Navy puts the burden on the taxpayers? If that is not enough, there is more bad news. The Secretary of Defense has admitted that continuing to produce two versions of the ship makes no sense, and he has ordered a down-select. The Navy has admitted that its transformative interchangeable mission module will likely never be interchanged as originally envisioned. The Navy has also admitted that its transformative crewing concept won't work and has essentially scrapped it. Look at how much the program has changed from the Navy's early pie-in-the-sky promises. Cost overruns, delayed schedule, design changes, cannot survive combat. In part, the reason why we are changing the name of LCS is because the word ``combat'' is in its name and we now know it is not survivable in a combat setting. Poor mission capabilities. [The chart displayed can be found in the Appendix on page 160.] Ms. Speier. Now, in all of the Navy's wisdom, they have decided to change the name of the LCS to a frigate, and plan to purchase more of what is essentially still an LCS but whose modifications are unproven, lack critical capabilities, and can't pass original survivability tests. Why? Because they have determined it will meet their multi-mission requirements. Yet once again, we don't have a ship design, we don't know what it will cost, or whether the ship can survive in combat. Instead, as I have joked many times, we have a ship that even the Chinese don't want to copy. You would think all this uncertainty would prompt calls for a pause to get the LCS conceptual house in order before the Navy does a binge buy for more. But if you think that, you don't know the LCS program. Instead, in an act of astonishing arrogance and disregard of taxpayers' money, reports indicate that the Department of Navy is gearing up to ask Congress for a block buy of 12 of these ships. This would give us all leverage--this would give us all our leverage away with a contractor to ensure the ships are tested and fixed. What are they thinking? Does anyone honestly believe that the taxpayers, the Tea Party, or President-elect Donald Trump would approve this buy if they were in charge of doing so? From the beginning, the Navy has regularly submitted LCS budget requests that are not consistent with shipbuilding programs, making it nearly impossible for Congress to exercise oversight. It did this in 2003 when it funded the first ships with research and development funding and in 2010 when it wanted to switch to a plan of buying two parallel LCS designs inside of a 20-ship block buy. When issues continued to occur throughout construction and fielding, the block buy was always cited as the reason why Congress shouldn't slow the program down. Yet again, as the Navy moves towards a different design that they claim will address many of the LCS shortcomings, they are looking for a block buy authority before the design is even completed. This is a strategy that even the shipyards criticized, since it doesn't give them time to complete the frigate design before beginning construction. The single greatest contributor to cost inflation on the LCS was an incomplete design when construction began. The Navy still hasn't learned their lesson. I am glad that the Navy has acknowledged reality and changed some of its operational concepts, but in many respects, I am concerned they are still hiding the ball. The next time LCS flaws become apparent, it could be in the heat of battle and, frankly, get our sailors killed. Furthermore, if the Navy's plan for a block buy moves forward, Congress and the Navy's hands will be tied. I realize what this is really about. We know the LCS is the Ford Edsel of the sea, and yet certain of my colleagues say we can't afford to pause production and get it right because of, quote, ``industrial base concerns,'' unquote, even though, and I want to emphasize this, even though the shipyards will be building the existing buy until 2021 even if we canceled funding for the program today. Let's be real. This is about getting pork back to their districts. The LCS is a $120 billion pork ship, and they are putting pork barrel politics above the safety of our service members. The Navy has shown a callous disregard for the taxpayer, and frankly, the Congress has been derelict in doing its job. We think no one will notice. We think our obligation is to the shipbuilders to keep building a defective ship just because we want to retain jobs. Today, we need the guts to say that the LCS was a mistake. To protect the United States interests and to do what is best for our service men and women, we need a ship that is capable of fulfilling its intended mission. The taxpayers deserve to know if what they are paying for is actually effective. That is why Congress needs to find out if the most recent changes will really make the LCS better or if we are just trying to make a silk purse out of a sow's ear. I look forward to your insights and about how we got here and how we should go forward and who is to blame. And with that, I yield back. [The prepared statement of Ms. Speier can be found in the Appendix on page 47.] Mrs. Hartzler. Thank you. I am pleased today to recognize our witnesses. I want to thank them for taking the time to be with us. We have the Honorable Sean Stackley, Assistant Secretary of the Navy for Research, Development, and Acquisition. We have Dr. J. Michael Gilmore, director of tests--Operational Test and Evaluation for the Department of Defense. We have Vice Admiral Thomas Rowden, commander of the Naval Surface Forces for the United States Navy. We have Ms. Michele Mackin, director of Acquisition and Sourcing Management for the Government Accountability Office; and Mr. Ron O'Rourke, specialist in naval affairs at the Congressional Research Service. So thank you all for being here today. Really, really appreciate it, and we look forward to hearing your comments. And now we turn to Mr. Stackley. STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, DEVELOPMENT, AND ACQUISITION, DEPARTMENT OF THE NAVY Secretary Stackley. Chairwoman Hartzler, Ranking Member Speier, members of the subcommittee, thank you for the opportunity to appear before you today to address the littoral combat ship program. With your permission, I would like to make a brief opening statement and have my full testimony entered into the record. Mrs. Hartzler. Without objection. Secretary Stackley. The littoral combat ship, or LCS, is designed to fill critical warfighting gaps in anti-surface, anti-submarine, and mine countermeasures warfare mission areas. And as a replacement for three legacy small surface combatant ships, she is about one-third the size of a DDG-51-class destroyer, is designed to perform missions the DDG [guided- missile destroyer] is not equipped to do or that could otherwise be better performed, at least well performed by a small surface combatant, and thus freeing the destroyer for missions tailored for its higher end capabilities. LCS's reduced size results in greatly reduced procurement and operating and support cost. In fact, the procurement unit cost for LCS is about one-third of that of a DDG-51, and likewise, the manpower requirements for the ship. The LCS hull is designed and built to provide the ship with its high-speed, mobility, damage control, survivability, aviation, and combat systems, including its 57-millimeter gun, surface-to-air missiles, and an over-the-horizon missile that the Navy is currently adding for offensive firepower against long-range threats. In addition to this core capability, the ship carries modular mission packages tailored for the mission's planned deployments. The surface warfare mission package adds 30- millimeter guns, an armed helicopter, an unmanned aerial vehicle for extended surveillance, and surface-to-surface missiles. The anti-submarine warfare, ASW, mission package adds a variable depth sonar that operates in tandem with a multifunction towed array, an ASW helicopter with dipping sonar sonobuoys and airdrop torpedoes and a towed decoy. The mine countermeasure mission package has air unmanned surface and unmanned underwater vehicles with associated sensors and systems to detect and neutralize mines. And there are four cornerstones of the program I would like to briefly summarize. First, the shipbuilding program. As the committee is well aware, the LCS program was initiated with unrealistic cost and schedule estimates and with highly incomplete design, resulting in extraordinary budget overruns and schedule growth. The program was subsequently restructured in 2009. Production was placed on hold pending the insertion of production readiness reviews to verify design quality and completeness; authorization to approve design and requirements changes was raised to the four-star level, specifically the CNO [Chief of Naval Operations] and myself; Navy oversight of the shipyards was greatly increased; the acquisition strategy was restructured to compete long-term contracts under fixed-price terms and conditions. And in response to this strategy, industry made significant investments in terms of skilled labor and facilities to improve productivity and quality. As a result, cost, schedule, and quality have greatly improved such that current ships under construction are delivering at less than half the constant year dollar cost of the lead ships. Performance has stayed reliably within the budget throughout this time, and the quality of each ship has successively improved, as measured by the Navy's Board of Inspection and Survey. Bottom line, the block buy strategy approved by Congress in 2010 has delivered on its promise. LCS construction is stable, and performance continues to improve on a healthy learning curve. Second, mission packages. The program's acquisition strategy is that we will incrementally introduce weapons systems as a part of a mission package when they are mature and ready for deployment. The strategy provides tremendous flexibility, affordability, and speed for introducing new capabilities to the ship when those capabilities are ready to deploy. Consistent with this approach, the LCS has been highly successful integrating mature weapons systems. The MH-60 helicopter, the Fire Scout unmanned aerial vehicle, the 11- meter rigid hull inflatable boat, the Mark 50 30-millimeter gun system, and most recently, the Harpoon Block II over-the- horizon missile, the Airborne Laser Mine Detection System, the Airborne Mine Neutralization System, and we are currently integrating the Hellfire Longbow missile in support of testing in 2017. As a result, we have successfully fielded the first increments of the surface warfare mission package. They are deployed today and are on track to complete the next increment in 2018. The next mission package we will field is the anti- submarine warfare, or ASW, mission package. The performance of this system, as demonstrated by its prototype in 2014, greatly exceeds that of any other ASW sensor system afloat. And we are currently in the process of awarding the contract to build the developmental model, which will be put to sea for shipboard testing on LCS in 2018. These mission packages are late to their original schedules in part due to technical challenges and in part due to budget challenges. They do, however, demonstrate the benefit provided by the LCS modular design. And as the Navy develops or acquires new systems appropriate to the LCS mission, we will leverage the ship's design and flow these new weapons to the ship in rapid fashion once they are mature. We have run headlong, however, into challenges with developing those capabilities that are central to filling one of the critical shortfalls in terms of warfighting, and that is the mine countermeasures, or MCM, mission package. The Navy's requirements for the LCS MCM mission package are to locate, identify, and clear mines at a rate that significantly exceeds our current capability and to do so without putting the ship or the crew into the minefield. The MCM mission package airborne capability and MH-60 helicopter carrying the Airborne Laser Mine Detection System and the Airborne Mine Neutralization System has completed testing and is ready to deploy. Additionally, an unmanned aerial vehicle carrying a sensor capable of detecting mines close to shore is on track to complete testing in 2017. The workhorse of the mission package is the high-endurance unmanned vehicle that tows a sonar for mine detection. The Navy is satisfied with the performance of the towed sonar system and its ability to detect mines, but we are halting development of the unmanned vehicle--we refer to it as the Remote Multi- Mission Vehicle [RMMV]--due to poor reliability. And we are revising the MCM mission package to employ an alternative unmanned surface vessel, specifically one that is currently being built to tow the minesweeping system to likewise tow the mine detection system. Testing with this vehicle is to commence in 2019. This puts the MCM mission package back to 2021 timeframe, a significant delay to that capability. The likely long-term solution will be to eliminate the tow vehicle altogether and operate with an unmanned underwater vehicle with an embedded sonar when technology can support it. The third cornerstone is performance of in-service ships. In total, LCS material readiness, as reflected in operational availability and casualty report metrics, is consistent with other combatant ship classes and meets the Navy's threshold requirements. However, I would like to address five engineering casualties of concern that have occurred over the past year. The Navy has conducted formal engineering reviews and command investigations to assess the root causes, and corrective action for each of these casualties are in action. One was design related. A deficiency with a new propulsion gear on the Freedom variant resulted in the gear's clutch failure. The shipbuilder has been responsive with the manufacturer to correct the design, and we are currently testing this correction. The shipbuilder and manufacturer are being held accountable for these corrective actions. Two of the five engineering casualties were due to Navy crews departing from established operating procedures. The type commander, Vice Admiral Rowden, has taken appropriate corrective action, including revising the LCS training program and conducting an engineering standdown for all LCS class crews to review, evaluate, and renew their commitment to safe ship operation and good engineering practices. The remaining two engineering casualties trace to deficiencies in ship construction and repair procedures. One involves the waterborne alignment of the propulsion train, which is being addressed by the Naval Sea Systems Command with industry, equipment manufacturers, shipbuilders, and ship repair yards. The second involves contamination of a hydraulic system on a newly delivered ship, requiring the ship to reflush the system and the shipyard to make corrections to its flushing procedures. This was corrected under warranty provisions by the shipbuilder in accordance with the contract. Across the board, we are raising the level of engineering and design discipline on this new ship class to that of zero tolerance for departure from standards. In this vein, the Naval Sea Systems Command has initiated a comprehensive engineering review of LCS propulsion systems and will make their findings available to the subcommittee upon their completion. The fourth cornerstone is transition to the frigate. Following an intense period reviewing alternative designs, which was ultimately approved by the Secretary of Defense, we are proceeding with modifications to the design of the LCS to incorporate the combined features of the LCS core capabilities, surface warfare mission package, anti-submarine warfare mission package, plus enhancements to the ship's combat systems and survivability features. Industry is currently working on this new design, which trades the modularity of the LCS for a highly capable multi- mission frigate, and is on track to award in late 2018. The estimated cost for the 12 frigates outlined in the Navy's budget and report to Congress is approximately $8.1 billion. I want to make clear to the subcommittee that unlike the experience at the outset of the LCS program, we will not proceed with frigate construction before design is complete and of high quality and that cost estimates are validated. And to enable this committee to conduct its new oversight, we will provide your staff with full insight to our design review process, products, and criteria. Madam Chairwoman, thank you for the opportunity to discuss this important program, and I look forward to answering your questions. [The joint prepared statement of Secretary Stackley and Admiral Rowden can be found in the Appendix on page 50.] Mrs. Hartzler. Thank you. Ms. Mackin. STATEMENT OF MICHELE MACKIN, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE Ms. Mackin. Thank you, Madam Chairwoman. Good morning, Ranking Member Speier and members of the subcommittee and committee. Thank you for having me here today to discuss the littoral combat ship and frigate programs. We have been reporting to Congress on LCS for over 10 years now. Our concerns have been and continue to be the Navy's decisions to prioritize seaframe and mission package procurements ahead of needed testing. Testing is critical to ensure that expected capabilities and operational concepts can be proven out. Over the past few years, we have recommended the LCS program be halted or slowed down while important knowledge was gained through testing. But DOD has generally not taken any actions that would impact the production piece of the program, even in light of some serious concerns. Instead, it has warned that the prices under the two LCS block buy contracts would increase if the program were disrupted. Almost 3 years ago, the Secretary of Defense directed the Navy to assess options for its small surface combatant that would be more survivable and have more combat capability than the LCS. The resulting study found that a minor modified LCS, which is now the frigate program, was the least capable option considered. Nevertheless, that option was ultimately chosen. In addition to affordability, which was a very important consideration, a key factor was the determination not to have a gap in production at the two LCS shipyards. We all know that the initial promises of LCS have not come to fruition in terms of cost, schedule, or capabilities. As the Navy pivots now from the LCS to the frigate, there are key questions yet to be answered. First, what will the frigate cost? This is unknown. A rough estimate is about $9 billion for 12 ships, but the Navy won't develop a more robust estimate until the middle of next year, and not until fiscal year 2018 will DOD prepare an independent cost assessment--cost estimate. Independent cost estimates are very important because they provide an unbiased assessment as to whether the program's cost estimate is reasonable. Second, what will the frigate design look like? This is also unknown. While the frigate design will be based on the same LCS seaframes we have today, those seaframes have significant weight issues that will need to be addressed, among other considerations. The Navy plans to award a frigate contract to one of the shipyards in 2018 and start construction as early as 2019, but specific contractor design proposals won't be received until a year from now. Until the detailed design is understood, exactly what the Navy is buying isn't known. I want to stop here and address the industrial base issue. Our work has shown that both LCS shipyards are running quite a bit behind in delivering the ships already under contract. Backlogs are many months long and up to a year or more in some cases. So the bottom line here is that both shipyards will be building LCSes for years to come, at least into 2021 at this point. So there is no schedule imperative to add frigates to the pipeline right now. And finally, what is Congress being asked to do? With its fiscal year 2018 budget request, the Navy plans to ask Congress to approve a 12-ship frigate block buy strategy and also to approve procurement of the lead ship based only on a rough cost estimate. From a contracting standpoint, the initial block buy prices will be for 12 LCS, that is 12 regular LCS. If past is prologue, the Navy might get great pricing for those ships, but only later will the price of adding the frigate capabilities be known. At that point, under a block buy contract, there is a risk that the program will be considered locked in, as has been the case with LCS, and any inclination to make needed changes may be foregone. There is an opportunity here to not repeat the mistakes of the past. Continued concerns about the capabilities of LCS, testing that is years away from being completed, unknowns about the frigate, and the production backlog at the shipyards are all factors that need to be taken into account. This potentially $9 billion investment can wait until more is known about what the taxpayers are being asked to fund. Thank you. [The prepared statement of Ms. Mackin can be found in the Appendix on page 74.] Mrs. Hartzler. Thank you. Admiral Rowden. STATEMENT OF VADM THOMAS S. ROWDEN, USN, COMMANDER, NAVAL SURFACE FORCES Admiral Rowden. Good morning, Chairwoman Hartzler, Ranking Member Speier, distinguished members of the subcommittee. I am honored for the opportunity to testify about the littoral combat ship. As the commander of our Naval Surface Forces, I am responsible for leading the 58,000 sailors that man and support our surface ships, and I am responsible for manning, training, and equipping those same ships. To execute these responsibilities, I rely on a staff of dedicated officers, enlisted, and civilian professionals. I rely on the experience I have gained over my 34 years of service to our Nation. I rely on almost 14 years to over 40 percent of my professional life serving on ships at sea, ships that range from our Coast Guard cutters all the way to tours on our aircraft carriers. I rely on the experiences I have operating on every ocean and sea from the Gulf of Guinea to the Sea of Japan. I rely on experiences I have gained through port calls in 52 different cities in 36 different countries around the world. When it comes to driving, fighting, and steaming our ships, I have experienced firsthand what our Nation can produce, both in terms of sailors with magnificent talent, determination, professionalism, and sheer grit, and in terms of the superb technical capability our phenomenal military industrial complex can produce. Time and again, in real-world situations I have seen our talent, training, tools, and tactics come together to produce a maritime fighting force that, on the whole, is significantly greater than the sum of its parts. Time and again, the value of our Navy to our Nation manifests itself through engagement and through partnership building on a gray ship with a white number and Old Glory flying atop the mast, tied to the pier or at anchor in the harbor. I have experienced the palpable sense of relief when by our very presence the level of angst in a potentially volatile situation is erased. To execute our missions, we rely on our ships and aircraft and the sailors who man them. The ships and aircraft are the tools we use. Our sailors round out our fleet's capability by providing the talent, the training, and tactics we need to win and win decisively. One of the tools we have coming online is the littoral combat ship. So far, eight of these tools have been delivered. Many more are on the way, and to be quite honest, I cannot wait to have them in the fleet and cannot get them there fast enough. This tool, this ship will be--will soon be deployed in numbers to our forward fleet commanders and will provide them with a highly valued and absolutely necessary capability. For in addition to the anti-mine, anti-submarine, and anti-ship capabilities it will carry, it brings the ability to enter ports we have rarely or never been able to visit because of draft limitations. It brings the ability to build partnerships and partnership capacity that we have been able to--that we have only been able to execute in very limited ways. In the day-to-day shaping and stabilizing operations our Navy executes daily, these ships will be invaluable and are needed right now. Beyond the shaping and stabilizing operations that dominate our operations today, I see a vital role for our littoral combat ships should our adversaries take an aggressive stand towards our maritime forces. And this is where the talent, tactics, and training really come into play. We understand well the requirements these ships are built to, and we understand the testing and evaluation has proven they are built to the approved requirement. In short, we understand the tool. We understand the ship. We also understand well our talent, tactics, and our training. We can and must take all of these into account when planning for combat operations. As such, we will employ all of our ships and our talent, training, and tactics to maximize their value to the combatant commander while continually assessing the risk to the force. All risk can never be eliminated, not to our littoral combat ships or any other ship in the inventory, for that matter. However, in planning for any mission, we are constantly evaluating our ability to achieve the objective while limiting the risk to the fleet. In other words, we will never lean into a punch if it can be avoided. While all this is well and good, there have been challenges in fielding these ships, which is why earlier this year I was tasked to lead, along with Vice Admiral Dave Johnson, the principal military assistant to Secretary Stackley, and Mr. Brian Persons from the CNO staff, a review of the LCS program and to come up with recommendations on how to address and overcome the challenges to providing robust operational capability for our littoral combat ships. In truth, I was thrilled with the opportunity. Our team looked at the ships and their challenges through three lenses, these lenses being simplicity, stability, and ownership. We looked at all aspects of LCS through these three lenses and came up with what I know to be reasonable, prudent, and appropriate recommendations to start to accelerate the value of these ships to the forward fleet commanders. We are moving out on these recommendations, and I am already seeing the benefits of our new approach on the waterfront. And we will continue to evaluate, assess, and adjust as we move forward. Beyond this, we have already deployed twice and are in the leading edge of a third LCS deployment. In addition to learning a heck of a lot about how to support these ships forward, I believe the facts speak for themselves: Over 500 days at sea; helicopter landing qualifications with eight nations; boarding operations with seven nations; fleet operations with diverse ships ranging from aircraft carriers down to coastal patrol ships; special operations force operations with the Republic of Korea; humanitarian assistance and disaster response during Typhoon Haiyan, relief operations in the Philippines, and the search for AirAsia Flight 8501 in the Java Sea; regional partners who welcome and want LCS with a high demand signal, having visited 15 cities in 8 countries around the Western Pacific. There is still much work to be done to fully unlock the significant potential of these ships. I am 100 percent confident that with the talent, training, and tactics our U.S. Navy sailors possess, the promise of our littoral combat ships will be fully realized, and I look forward to being part of this valuable effort. Thank you very much, ma'am, and I look forward to your questions. [The joint prepared statement of Admiral Rowden and Secretary Stackley can be found in the Appendix on page 50.] Mrs. Hartzler. Thank you. Dr. Gilmore. STATEMENT OF DR. J. MICHAEL GILMORE, DIRECTOR, OPERATIONAL TEST AND EVALUATION, DEPARTMENT OF DEFENSE Dr. Gilmore. Chairwoman Hartzler, Ranking Member Speier, members of the committee and subcommittee, I will try to briefly summarize my written testimony. The Increment 2 surface warfare mission package is the only fielded system on LCS seaframes, and it has demonstrated a modest ability to aid the ship in defending itself against small swarms of fast inshore attack craft, though not against threat-representative numbers and tactics, and the ability to support maritime security operations such as launching and recovering boats and conducting pirate interdiction operations. When the Hellfire missile is fielded in the next increment, the surface warfare package capability has the potential to improve significantly, provided targeting and other challenges can be surmounted. In a June 2016 report, based on this testing conducted before 2016, I concluded that an LCS employing the current mine countermeasures package would not be operationally effective or suitable if called upon to conduct mine countermeasure missions. The testing that was done demonstrates the LCS mine countermeasure mission package did not achieve the sustained area mine clearance rate of the Navy's legacy systems, nor can the package be used even under ideal benign conditions to meet the Navy's reduced Increment 1 mine countermeasures requirements for mine area clearance rate, achieving, at best, one-half those requirements, which are a fraction of the Navy's full requirements. And by the way, my assessment is the same as the Navy's commander of operational test force. The ships as well as many of the mine countermeasure systems are not reliable, and all the MCM systems, not just the Remote Minehunting System and the Remote Multi-Mission Vehicle, had significant shortfalls or limitations in performance. For example, limitations in the Airborne Mine Neutralization System depth for neutralizing mines means that it cannot be used to neutralize the majority of the mines in the Navy's own scenarios. Based on those results, after more than 15 years of development, the Navy decided this past year to cancel the Remote Minehunting System, which is a hard decision for the Navy, halted further procurement of the Remote Multi-Mission Vehicle, abandoned plans to conduct operational testing of individual MCM mission package increments, and delayed the start of full integrated LCS mine countermeasure mission package operational testing until at least fiscal year 2020. As the Navy attempts to fill capability gaps and correct the shortfalls in performance of these canceled and restructured elements of the mine countermeasures package, it is likely operational testing of either LCS variant equipped with the final fully capable mine countermeasures, MCM, package will not be completed until at least 2023, more than a decade after the schedule set in the Navy's original requirements. All of the LCSes have suffered from significant repeated reliability problems with both seaframe and mission package equipment. No matter what mission equipment is loaded on either of the LCS variants, the low reliability and availability of seaframe components, coupled with the small crew size, imposed significant constraints on mission capability. When averaged over time, LCS 4, which was used in the testing last year, was fully mission-capable for surface warfare missions just 24 percent of the 2015 test period. Both variants fall substantially short of the Navy's reliability requirements, and have a near-zero chance of completing a 30- day mission, the Navy's requirement, without a critical failure of one or more seaframe subsystems essential for wartime operations. The Navy's most recent reliability reports show upward trends for a few LCS systems, so that is good news, but the majority of the ship's systems demonstrate flat or declining reliability well below the Navy's objectives, and that is the Navy's data. It was only through testing of the full mission packages at sea and aboard the ship with sailors from the fleet that the significant problems and shortfalls I have described, both in system performance and sailor training, were clearly revealed. In fact, the Navy's independent mine countermeasures review team emphasized that a reliance on unrealistic, segmented, shore-based testing, quote, ``provided a false sense of maturity,'' unquote. As in all operational testing, we interacted extensively with the ships' sailors and surveyed them to capture their views of the ships' capabilities. These sailors are proud of their ships and determined to make the best use of them. The sailors are also straightforward in identifying the many problems they have encountered. We--I have a long list of the comments from the surveys that were done during the testing, and I am going to read just a couple, but there is a long list that are consistent with these, so I am not just cherry- picking. ``Well, 130 duty days to complete technical evaluation, which should have only taken 45 days. That should tell you something about the reliability of the RMMVs.'' ``The tasking would be easier to complete if the equipment didn't constantly break.'' ``As equipment breaks, we are required to fix it without any training.'' Those are not my words. Those are the words of the sailors who were doing the best they could to try and accomplish the missions we gave them in the testing. So to provide the sailors with what they need to accomplish their missions, it is my hope that the Navy will be provided the resources, meaning the time and money it needs to fix these problems, which we should acknowledge, because if we don't acknowledge them, we can't fix them. And the Congress, obviously, has a key role to play in providing those resources. Thank you very much. [The prepared statement of Dr. Gilmore can be found in the Appendix on page 101.] Mrs. Hartzler. Thank you, Dr. Gilmore. Mr. O'Rourke. STATEMENT OF RONALD O'ROURKE, SPECIALIST IN NAVAL AFFAIRS, CONGRESSIONAL RESEARCH SERVICE Mr. O'Rourke. Chairwoman Hartzler, Ranking Member Speier, distinguished members of the subcommittee, thank you for the opportunity to appear before you today to discuss oversight issues relating to the LCS program. With your permission, I would like to submit my written statement for the record and summarize it here briefly. Mrs. Hartzler. Without objection. Mr. O'Rourke. I have been tracking the LCS program since its inception 15 years ago. In my 32 years as a naval issues analyst for CRS, no program has been more complex to track or has posed more potential oversight issues for Congress than this program. The LCS program is at a crossroads not only because of the Navy's proposal to shift to production of the frigate variant, but also because of three additional factors. These are the rapidly shifting international security environment, the possibility that the incoming Trump administration might make significant changes in U.S. foreign and security policy, and the Trump campaign organization's announced objective of building the Navy toward a goal of 350 ships. A key oversight issue for the Navy's proposal for procuring the frigate variant concerns its analytical foundation as a result of how the program was restructured twice in less than 2 years at the direction of two Secretaries of Defense. The Navy's proposal for procuring the frigate variant of the LCS appears to have three potential weaknesses in its analytical foundation. These potential weaknesses are now compounded by the shifting international security environment and the possibility that the incoming Trump administration might make significant changes in U.S. foreign and security policy. This situation doesn't prove that the Navy's proposal for procuring the frigate variant of the LCS isn't the most cost- effective approach for meeting the Navy's future needs. It might very well be the most cost-effective approach. But as a result of this situation, the Navy now has less of a basis for being certain of that and less ability to demonstrate this compellingly to others. This situation also, however, creates a fresh opportunity for the Navy to create a new analytical foundation for the effort that is both rigorous and fully up to date. Doing that would take some time, but it wouldn't prevent some variant of the LCS from being procured in fiscal year 2017 or 2018. Another oversight question concerns the plan to total quantity of 40 ships. This is 12 less than the 52 small surface combatants called for in the Navy's current 308-ship force structure objective, and the 52 number itself could change again as a result of a decision to build the Navy toward a fleet of about 350 ships. Building up to a force of 52 or more small surface combatants over the next several years could involve increasing the small surface combatant procurement rate to 3 or 4 ships per year. In terms of industrial base capacity, it might be easier to execute such a procurement rate with two LCS builders rather than one. If the ships are acquired with annual contracting, then depending on the annual procurement rate, maintaining two LCS builders might enhance the Navy's ability to use competition effectively in procurement of these ships. Another oversight question concerns whether to use annual contracting or block buy contracting for procuring the frigate variant. Annual contracting preserves flexibility for Congress regarding whether and when to procure follow-on units in an ongoing procurement program, while multiyear contracting in the form of block buy contracting or multiyear procurement reduces that flexibility in return for reducing the cost of the units being procured. My written statement discusses some of the considerations that come into play in considering annual versus block buy contracting. My statement also discusses two other oversight issues, the survivability of the frigate variant and the mine countermeasures module. It then presents some potential oversight questions for Congress relating to two additional oversight matters, the recent propulsion equipment casualties and the Navy's new plan for crewing and operating the ships. Now that we are 15 years into the program and with the Navy's proposal to shift to procurement of the frigate variant now being considered, there is a question about the acquisition lessons learned from the LCS program. My written statement concludes with some comments on that question, particularly in terms of the rapid acquisition strategy that the Navy originally pursued for the LCS program which aimed at reducing acquisition cycle time. Chairwoman Hartzler, this concludes my statement. Thank you again for the opportunity to testify, and I will be pleased to respond to any questions the subcommittee may have. [The prepared statement of Mr. O'Rourke can be found in the Appendix on page 133.] Mrs. Hartzler. Thank you very much. Very good comments. I think very clearly laid out some of the challenges and the opportunities. I would like to start with Admiral Rowden. What specific combatant commanders' requirements have changed over the past 10 years that necessitates converting the LCS platform into a more capable and survivable frigate? Admiral Rowden. The requirement for the littoral combat ships and the frigates, the 52 number, is a number that provides them with the capability to address not only the day- to-day operations that we are executing during the shaping and stabilizing operations that we are executing now, but also as we transition to the high end. Clearly, as we look at--reflect on the last 10 years and we see a potential adversary's growing numbers of ships and aircraft and submarines that are being fielded, in order to be able to address those threats, those potential threats, we need a Navy that can do that. And they--and the littoral combat ships and the frigates with either the ASW package installed or the ASUW [anti-surface warfare] package installed, and the frigates with both of those capabilities installed will certainly give capability to the combatant commanders that they need as they look at the ever-changing threat and to be able to address that. Mrs. Hartzler. So you would say that the need to change to the frigate is because of the threats and the increased capabilities that the frigate would have over the LCS? Because that was what the question was. Why--what are the changes that would necessitate moving to a frigate from an LCS? Admiral Rowden. Yes, ma'am. Given the wider range of operations that the frigate will be able to execute against the growing threat, that certainly would drive us towards building the frigate over the littoral combat ship. Mrs. Hartzler. So bottom line is because they have more mission capability. Admiral Rowden. Yes, ma'am. Mrs. Hartzler. Multiple rather than just singular, correct? Admiral Rowden. Yes, ma'am. Mrs. Hartzler. Okay. Secretary of Defense's December 2014, 2015 memorandum that directed the Secretary of Navy to reduce the total procurement quantity of littoral combat ships and frigates from 52 to 40 states, and I quote, ``40 littoral combat ships and frigates, the number that the Navy's own warfighting analysis says it is sufficient to need,'' end quote. So it appears to be the rationale as to why the Secretary of Defense reduced the program's quantity. So does the Navy have warfighting analysis that demonstrates that 40 littoral combat ships and frigates are sufficient to meet warfighting requirements? And if so, what is the Navy's number of 52 total small surface combatants based on? Admiral Rowden. Yes ma'am. I think that is a good question to be addressed by Secretary Stackley, but what I can tell you about the conversations that I have with our forward deployed fleet commanders now, the commander of the 6th Fleet in the Mediterranean and the commander of the 7th Fleet in the Western Pacific and the commander of the 5th Fleet in the Arabian Gulf and even the commander of the 4th Fleet down in Southern Command is, in my conversations with them, that one of the questions that always comes up is how many LCS can I get and how fast can you get them to me. So the demand is there. With respect to the--and the requirement remains 50. With respect to the reduction from 52 to 40, Secretary Stackley. Secretary Stackley. Yes, ma'am. Let me start by the document of requirement which goes to the Force Structure Assessment that the CNO has conducted. 2012 Force Structure Assessment updated in 2014 continues to emphasize the need for no less than 52 small surface combatants to address the full mission requirements across the balanced fleet. And the CNO, since then, has been clear about a couple of things. One, all pressure on our fleet points towards the need for a larger fleet to continue to perform the missions at the level that the Nation requires. And so there is not a requirement that is going to come through, and this--the 2014 update is going to be updated again this year, will be delivered with the budget. But I can tell you that that requirement will not go down in terms of the number of small surface combatants. The decision to go from 52 to 40, that was a decision that did not come from the requirements community. It, frankly, didn't come from the Navy. This was driven in a budget environment where the determination was made that we have to take risk somewhere. This is a place where we will take risk in terms of the size of our force. Mrs. Hartzler. Okay. And I know a lot of our members want to ask questions, so I will come back to some others. But I do want to ask--something you said, Secretary Stackley, caught my attention. Where you said the shipbuilders are being held accountable. I know that as contracting goes forward, there is a warranty type of a provision added. But is there--how are they being held accountable now? Secretary Stackley. Yes, ma'am. Let me start by describing that I have been doing shipbuilding for over 30 years. Mrs. Hartzler. Right. Secretary Stackley. In our contracts, we do have explicit warranty provisions. When the ship is delivered, we first bring the Board of Inspection--well, first, our supervisors of shipbuilding are monitoring the construction of the ship as it goes to ensure compliance with process and procedures. And in terms of the delivered ship, the Board of Inspection and Survey comes on board and conducts a pretty extensive full-week inspection of the ship, including underway periods. Deficiencies are documented. When the ship is delivered, it is still within a warranty period so that if other deficiencies emerge during the warranty period, then we first--we evaluate who is responsible for the deficiency. If it is a government responsibility, if it is a government system, then we own it. But if it is a contractor responsibility, we take it back to the contractor to fulfill his requirements under the contract within that warranty provision. And then at the end of this period, we have what is referred to as a final contract trial to shake out any last remnants before we go into a post-shakedown availability, at which point in time the government and the contractor are both on board the ship correcting our response--our respective deficiencies. Mrs. Hartzler. Sure. What is the time period for these--has been for the warranty period? Secretary Stackley. Notionally, it is 12 months. Mrs. Hartzler. So of the--you outlined in your testimony five engineering--five concerns, and a couple of them dealt with crews, dealt with training. That is why you are changing, Vice Admiral---- Secretary Stackley. Yes, ma'am. Mrs. Hartzler [continuing]. The training, which makes perfect sense. So you are saying that those were--those costs were incurred by the Navy because it was basically the crew's fault that the structural problem occurred. Secretary Stackley. Yes, ma'am. Mrs. Hartzler. But with the design, like on the propulsion and those others, who ate those costs---- Secretary Stackley. Let me walk through that. Mrs. Hartzler [continuing]. To fix that? Secretary Stackley. First the gear. This was a new gear manufacturer brought to the ship. The prior gear manufacturer ceased its business. And specifications went out to the gear manufacturer. When that gear was coupled with the rest of the propulsion plant, there was a, I will call it a mistiming in terms of software controlling the system. That was not discovered until the USS Milwaukee was en route to her home port, and we tripped over this failure and the clutch--the clutch burnt out. That--the shipbuilder in this case and the gear manufacturer are paying for the correction of the design, and we are withholding payments on subsequent ships until that is corrected on the subsequent ships. And then the USS Milwaukee itself, that final correction is waiting for the design, verification, and validation. And prior ships, the LCS 1 and LCS 3, are not affected because they are under a different gear design. So that is being covered today with withholdings, with fee---- Mrs. Hartzler. Very good. Secretary Stackley [continuing]. And cost under the contract. Mrs. Hartzler. Good. That makes sense. Secretary Stackley. Can I hit the other one, because the other one is important? Mrs. Hartzler. Well, I think we need to--we are going to have votes coming up. Secretary Stackley. Yes, ma'am. Mrs. Hartzler. And we want to get to some other questions, but thank you for that. Ranking Member Speier. Ms. Speier. Thank you, Madam Chair. Before beginning my questioning, I just want to compliment Congresswoman Graham for an outstanding service to this committee and to Congress, and I am really very disappointed that you are leaving because you really are the kind of member we need that is always going to be responsive to the needs of their constituents and to their responsibilities as members of the committee. So thank you very much for your leadership. Mr. Stackley, I am so disappointed in your testimony I can't begin to tell you. You just answered a question for the chair that I thought was very deceptive. Let me just read from a GAO [Government Accountability Office] report: ``Our past work has found that by virtue of using guaranty provisions as opposed to warranties (such as the U.S. Coast Guard generally uses), the Navy is responsible for paying the vast majority of defects. ``Specifically regarding the LCS, we found that for LCS 4, the Navy's guaranty provisions were structured such that the Navy paid all of the costs to correct the defects. For LCS 3, the shipbuilder was responsible for 30 percent of the costs of the first $100,000 of defects, a number the Navy surpassed just days after delivery. Thus, the Navy was 100 percent responsible for the costs of all remaining defects, for LCS 5-8, the shipbuilder is responsible for some portion of the first $1 million in defects for each ship.'' Now, I don't think you were very responsive. I am not going to ask you to respond. I am going to ask Ms. Mackin to clarify what the warranty versus guaranty provisions, how the Coast Guard is so different, and how for the vast majority of defects, it is the taxpayer picking up the tab. Ms. Mackin. Yes. We looked into this issue for Coast Guard and Navy ships. It was a pretty comprehensive review. Not just LCS, but other Navy ships as well, and what we found is the Navy does not use warranty provisions as outlined in the Federal Acquisition Regulation warranty the way we would think of a warranty. They use a guaranty clause in the contract, and it is subject to a limitation of liability. Those are the numbers you were citing. So it is negotiated in the contract. The limitation was zero on LCS 4. The more recent ships it is a million dollars. The way these contracts are structured, however, the government and shipbuilder, even for shipbuilder- responsible defects, would split the cost in essence of paying for the fixes, up to a million dollars. After a million dollars, it is all on the government. The Coast Guard, on the other hand, for their more recent cutters has a pretty stringent warranty provision, kind of the way we would think of it, that they negotiate at the outset and hold their shipbuilders more accountable to fix problems. Ms. Speier. Thank you. So, Mr. Stackley, why is it the Coast Guard can get it right and the Navy can't? Secretary Stackley. I will review the Coast Guard warranty provisions, but our contract---- Ms. Speier. You have been doing this for 30 years. Why haven't you looked at it before---- Secretary Stackley. I don't look at the Coast Guard contracts unless it comes under my purview. The provisions that we have on our contract, they hold the contractor responsible, for what he--he is responsible regarding specifications, regarding performance of the systems that they deliver. And if, in fact, there is a deficiency, the costs go back to that contractor during the warranty period. Ms. Speier. I think that we are talking around some realities. The reality is the Coast Guard has figured out a way to do it appropriately. The Navy has basically taken the position that we will pay for most of the costs. And that was reflected in the GAO report. Secretary Stackley, let me ask you a question. Last week a similar hearing was held by our colleagues in the Senate. You were asked who was responsible for briefing Congress that the ship would cost $220 million. As we see from the chart, it is now costing $470 million per frame. You said you had to check your records. So you have had about a week. Who was responsible for that? Secretary Stackley. Yes, ma'am. Let me go back to, that was the 2003, 2004 timeframe. I have got to be careful about the term briefing because that number was briefed by everybody from the Chief of Naval Operations to the Assistant Secretary of the Navy to the program executive officer to the program manager. Ms. Speier. So who is it? Who was it? Secretary Stackley. I would start at the top of the chain of command. Ms. Speier. Well, evidently, I have a tweet from a reporter that suggests that it was Vern Clark. Secretary Stackley. I said I would start at the top of the chain of command, and Vern Clark was the Chief of Naval Operations at the time. His counterpart in terms of acquisition was Assistant Secretary Young. They carried forward the program based on what they had for affordability targets at the time. Ms. Speier. Okay. But I guess my point is, in your statement you made the case that, you know, we are really moving along appropriately. They are costing about the right amount. We are saving money. We are not saving money. They are costing over twice as much as they were originally intended to cost. Now, Dr. Gilmore, do you think the LCS is survivable? Dr. Gilmore. The admiral noted that the ship meets its requirements for survivability, which it does. The testing that we have done and that we will continue to do is indicating that is true. And here are what its requirements are. Its requirements against very modest threats, and the details are classified, are to exit the area, not to continue in combat, but to exit the area if they are attacked by modest threats. If they are attacked by, and hit by, more stressing threats, and unfortunately these threats are proliferating throughout the world and they are quite stressing--they are stressing for any ship to deal with--but if the ships are hit by these more stressing threats, the requirement is for an orderly abandon ship. And the testing that we have done and will continue to do is probably going to indicate that those requirements have been met. That means that the ship is not going to be able to stay in the battle area and conduct operations. Now, it is a challenge for any ship to do that, if hit by some of these threats, but all the other surface combatants that we have are built with compartmentalization, redundancy, and other features that at least give them much more of a chance to survive hits by some of these stressing threats. So that is the basis of my evaluation. The requirements were set when the vision for using these ships actually as articulated first by Admiral Clark--I have looked at his testimony before the Congress in March of 2004-- the requirements were set consistent with the vision that the ship would have many off-board systems that could go potentially over the horizon, attack targets, which would mean the ship could stay out of harm's way, and I am paraphrasing what Admiral Clark said. Unfortunately, those capabilities have not materialized. They may in the future. The Navy is getting ready to deploy with some unmanned aerial vehicles that will have reconnaissance capabilities. But in terms of long-range attack, those systems are probably a number of years away. In fact, many of the upgrades that the Navy has talked about in the past as being available either in the last decade or this decade are probably slipping into the middle of the next decade at best. So that is the basis of my assessment. If in the future the Navy is able to develop and deploy systems that enable the ship to stay out of the range of some of these threats, then the survivability assessment would change. Ms. Speier. So if an LCS is hit by a torpedo, what is survivability, that the sailors can get overboard or that they can exit the area? Dr. Gilmore. Actually I am going to have to not answer that directly because the details are classified. Talking about specific threats makes the discussion classified, so I would be happy to discuss that with you in the---- Secretary Stackley. I would like to answer that. I would like to answer that, ma'am. Ms. Speier. Well, if it is classified, why should you be discussing it? Secretary Stackley. I can get into some generic discussion regarding survivability that might be helpful. Ms. Speier. All right. Secretary Stackley. Okay. First, Dr. Gilmore's assessment regarding the ship's meeting its survivability requirements is correct. The ship was not designed for what you call fight- through survivability. If it takes a devastating blow, the key is to exit the area and ensure the crew survives. But since the mission is built around these mission packages that work off- board, then it is not envisioned that the ship's ability to continue to operate the off-board mission packages is critical at that point. In the case of a torpedo striking the ship, the comment regarding compartmentalization of the ship, this ship is designed to the same compartmentalization standards as the rest of the United States Navy, and that is to be able to survive a blow that covers 15 percent of what is referred to as floodable length of the ship to provide three-compartment flooding. So whether it is an LCS, or whether it is a DDG-51, or whether it is a carrier, that compartmentalization standard is the same. The fact that it is smaller, it has a bigger impact on a smaller ship. But a compartmentation requirement in the event that a torpedo, if it breaches more than three compartments, then that crew is going to have to abandon that ship. Ms. Speier. When I was on the---- Dr. Gilmore. Could I say something---- Ms. Speier. Yes, Dr. Gilmore. Dr. Gilmore. The ship still doesn't have all of the redundancy---- Mrs. Hartzler. Excuse me, Dr. Gilmore. I just want to let everyone know we are voting. There is 9 minutes to go. So if we could wrap up this question, then what I would like to do is just to pause our hearing, let us go vote. It should be about a half hour in voting, and then reconvene, because we have a second vote series later on. So if that would be good. So if you would finish the question. Dr. Gilmore. I will just very briefly say---- Mrs. Hartzler. Sure. Dr. Gilmore. The ship doesn't have the redundancy of the other combatants. That is because it is a small ship. It also has a very small crew, which is very important to recoverability. So the other ships have a larger crew and more redundancy, and if they are hit, that means they have a better opportunity to survive. There is no guarantee of survival when hit by any of these threats. So there is in my view, as I have explained in multiple reports in detail, a significant difference in survivability between these ships and all the other surface combatants. Mrs. Hartzler. Great. Thank you very much. So, we will stand in recess and reconvene as soon as possible. [Recess.] Mrs. Hartzler. This hearing will now reconvene. Thank you for your patience while we voted. I appreciate that very much. I would like to go to Mr. Scott. Mr. Scott. Thank you, Madam Chair. One of the questions I had has already been answered, and that was for Mr. Stackley, and that is if the Coast Guard is doing a better job or has better provisions in their contracts, we should at least look at that and see if that is something that we can incorporate. I know you have said that you all would do that, and I appreciate that. I guess as I listen to this, I think back to the quote that nothing will ever be attempted if all possible objections must first be overcome. And regardless of the weapons system or the branch, if we are talking about the Army, there is a reason we have Strykers, and there is a reason we have M1 Abrams, and the Stryker cannot handle the same type of strike from another weapons system that the Abrams can. But the Abrams can't do all of the things that the Stryker can. And if we are looking for a light, nimble craft, then we have just got to accept the fact that you can't build it as thick as you are going to build some of our other weapons systems. It is just part of the tradeoff. We have this tradeoff with every weapons system that we have. And so I just, nimble and fast, in and of itself, and quantity in and of itself, I believe are important in winning the battle. I do have a question, Ms. Mackin. As you talk about the cost per ship, do you consider the development cost a variable cost or a fixed cost? Ms. Mackin. When we look at the cost per ship, there is several different ways to look at it. So there is a cost cap for this program, which is somewhat generous. We usually look at the selected acquisition report, the unit cost as reported by DOD---- Mr. Scott. But do you consider the research and development [R&D] of the system a fixed cost or a variable cost? Ms. Mackin. I think that would depend on the system. Maybe somebody else can weigh in with more detail on that. Mr. Scott. Well, research and development is a fixed cost. It doesn't matter if you build 1 or 50---- Ms. Mackin. I think one issue for this program and other programs is that some of the systems on this ship may be R&D funded but not by the Navy. Maybe another part of the Navy that is funding the system that will eventually go on the ship. So it is hard sometimes to totally capture the entire cost of the ship. But, again, we go with what is reported to Congress. Mr. Scott. But the same type of analysis is what led to the cancellation of the F-22, when the per unit cost of the F-22, when the project was cancelled, was significantly lower than the cost per unit that was being reported in reports like this. Because the research and development costs are already sunk. It doesn't matter if you build 1 or if you build 1,001. Ms. Mackin. Quite frankly, cost is not our main concern with this program right now. After the rebaseline, I do think they have gotten costs more or less under control. The key concern we have is the testing, the lack of completed testing, while they have continued to buy the seaframes and the mission packages. There are still significant concerns. And, again, the frigate is going to be based on these same seaframes that have reliability issues. So I would characterize that as our main concern at this point. Mr. Scott. Well, a lot is said about cost from the people who want to cancel the program. So you are telling me the cost is not the primary concern---- Ms. Mackin. The cost has doubled since the initial estimate, as was discussed earlier. But let's look at what is happening right now. After the restructuring, I think they have gotten costs more or less under control. That is not our main concern. Schedules are late, and the capabilities aren't there, and the testing hasn't been completed, would be how I would characterize our main concerns at this point. Mr. Scott. Admiral, what are we giving up? What are we accepting in additional risk, as a nation, when we move from 52 ships to 40 ships? And what is your understanding of any studies that were done with OSD [Office of the Secretary of Defense] to form any type of analysis foundation for the quantity reduction to the LCS program? Admiral Rowden. Thank you, sir. I will let Secretary Stackley discuss the analysis. But, I mean, clearly when we reduce the number of ships from 52 to 40, we are taking risk in the capacity that we want to have forward. And so that will result in more water under the keels of the ships that we have. It will result in more wear and tear on those ships. It will result in more wear and tear on the crew and a greater time deployed for the same amount of availability forward. And so that is risk that has to be weighed and has to be accepted as we attempt to fulfill the requirements of the combatant commanders. Mr. Scott. My time is expired, but as I understand it there was no analytical foundation for the reduction. That this was simply a budget-driven decision. Is that correct? Admiral Rowden. That is my understanding. Mr. Scott. Thank you. Mrs. Hartzler. Thank you. Ms. Graham. Ms. Graham. Thank you, Madam Chairwoman, and I really appreciate your kind remarks earlier, thank you so much, and Jackie, thank you as well. As a representative of a State with nearly 100 vendors that undergird the LCS program, I am very grateful to have an opportunity to talk with you all today. This is my actual last day here on the Hill, so it is very special to be able to be with you all. I would first like to thank the House Armed Services Committee for fighting for the Graham amendment in this year's NDAA [National Defense Authorization Act], which would express the sense of Congress on the role of Panama City, Florida, to the Armed Forces of the United States. I would also like to thank the conferees who noted that Panama City has played a long role and an important role in the development and support of the United States Armed Forces. This, I hope, is just the first step in recognizing Panama City with the ultimate hope, and I have talked to the Secretary of the Navy about this--that the Navy will name a future LCS after Panama City, a much deserving community. So now I would like to direct a question to Secretary Stackley. As you know, the United States shipbuilding capacity had been in steady decline for years. As many have noted, shipbuilding is not a faucet that can be turned on and off. Indeed, once lost, it can take years to recapitalize a vendor base and labor force necessary to build our Navy's warships. So, Secretary Stackley, you have suggested that a block buy strategy enables a shipbuilder to go out to its vendor base and secure long-term agreements to achieve the best pricing. Can you please expand on this and comment on how such a strategy may contribute to maximum efficiency and capacity in our industrial base as well as best price for the taxpayers? Secretary Stackley. Yes, ma'am. Thanks for the question. First, you described the level of ship production that we have going on in the country, and it is below capacity, and it is, frankly, below where we need it to be in the long-term in terms of being able to sustain the force structure that the Navy needs. And there are three critical elements to that. First is the shipbuilders themselves, and shipyards are capital- intensive and require significant investment in order to be able to produce these extraordinarily complex, large warships. And so in order to support the investment that is required, you have to have throughput in terms of ships. I mean, it is just fundamental. And so if production drops to an unsustainable level-- unsustainable meaning they can't invest in those facilities-- then those facilities are going to ultimately shutter. That is one part. The second part is skilled labor. Shipbuilding requires unique skills in terms of shipfitters, pipefitters. We have nuclear-trained mechanics, production control in the shipyard, very skilled set of labor. And what we can't afford to have happen is a sawtooth effect in terms of hiring and firing at our shipyards. One, we will be continually dealing with learning in terms of the labor themselves. And, two, we will lose the skilled labor. They will go to other areas where there is more stable employment, and that will come back to us in terms of cost and quality. So we have to maintain those two key elements in our industrial base, and it is particularly fragile at a time when your shipbuilding rates are below where you believe they need to be. And then the third is the vendor base itself. We can't lose sight of the vendors that support our shipyards because at low rates, quite often those vendors are uniquely supporting our shipbuilding, and at lower rates, they are fragile. So we have to be careful that we don't break the vendor base and have that come back to us again in terms of cost and quality. That is all on the industrial base side. On the requirement side, we have to make sure that we are building our ships at a rate to support the force structure that we have laid out in terms of our 30-year plan which is backed up by the maritime strategy in support of the national military strategy. And so if you look at our long-term plan, we are below where we need to be. If you look at what we have done over the last 8 years, it has been to try to increase our shipbuilding rates to support that long-term plan. And if you are going to do that when you are starting at a fragile base, those long-term agreements with the shipbuilders to incentivize them to invest and with the vendor base to incentivize them to basically support the shipbuilders through the material flow are absolutely critical. So in the Department of the Navy--I will stand by the record over the last 8 years--whether it is the LCS program across two shipbuilders, the Virginia program across two shipbuilders, the DDG-51 program across two shipbuilders, the T-AO(X) program that we just awarded, with one shipbuilder-- program by program we have done our best to be able to line up, whether it is a multiyear or a block buy, a long-term run of production to stabilize performance, to attract, retain the skilled workforce that we need, and to reduce cost from the vendor base right to the shipbuilder because that comes back to us in terms of the government and the taxpayer. And that allows us to, in fact, plow those funds back into whether it is shipbuilding or aviation or whatever it is that is the priority at the time to support our national security strategy. Ms. Graham. Thank you for that very thorough answer. I really appreciate it, and I am out of time. I want to end with this. Please continue to feel my spirit and my commitment and my thanks for all that you all do. And I hope that spirit will one day result in an LCS being named after Panama City. And I will let that be my final comment, and I yield back to the chairwoman. Thank you. Mrs. Hartzler. Thank you, Representative Graham. Representative Byrne. Mr. Byrne. Thank you. As a member of the Seapower Subcommittee, I am particularly glad to be here today. Admiral, Mr. Stackley, thank you for your years of experience, for the expertise and professionalism you bring to your jobs. It helps us do our jobs to have you do what you do and give us such great information. Admiral, you stated your years of experience. You can never replace that. We can sit here and read pieces of paper and listen to you, but your experience really speaks volumes to us, so thank you for that. Admiral, you said that there is a significant need in the Western Pacific and the Mediterranean for the LCS. You said that the fleet commanders are asking for more LCSes and to get them there more quickly, which I heard from Admiral Harris when I was out in Hawaii at the RIMPAC [Rim of the Pacific] exercise. I asked him, what is the message, Admiral? He said get more of them to me. Get them to me as quickly as you possibly can. You also stated that you are 100 percent confident in the LCS and that you have seen the need for the capability it currently has and that you are optimistic of the added capabilities as the program continues to mature. And you stated that there is growing threats in the world and a demonstrated need for both the LCS and its transition to the frigate. I want to make sure I have summarized what you have told us today. Did I get that right? Admiral Rowden. Yes, sir, I think you nailed it. Mr. Byrne. Good. Mr. Stackley, you said that the LCS acquisition program has been steady since 2008, and since then has been under the cost cap. You also explained that the casualties of the LCS have been addressed and that there are no systemic or recurring issues with these casualties. You also said the Navy continues to have a need for 52 small surface combatants, and, in fact, that number may increase. And the reason to go down to 40 LCSes was driven by the budget and not by any sort of operational study. So I want to make sure that you continue to believe, and the Navy continues to believe, you need 52 of these small surface combatants, these LCSes to frigates? Have I summarized your statements correctly? Secretary Stackley. Yes, sir. As I described earlier, the 52 number, I don't anticipate any downward change to that number when the updated Force Structure Assessment comes back from the CNO with the next budget. I want to make a minor correction, but an important correction. In terms of stabilizing the program, I would tag that to the 2010 timeframe, and that is when we basically came over to Congress with the block buy approach, and that is the environment that we are executing in today. The other comment regarding the casualties, those specific casualties that were identified that we are tackling, those by themselves, not systemic, we are correcting those and we are going beyond that though. Naval Sea Systems Command is doing a comprehensive review of propulsion systems for both ship types to ensure that we don't run into further unanticipated casualties that could have been corrected ahead of time. Mr. Byrne. Thank you. I have been on, I think, three of these ships at dock and one at sea. And when I go on them, Admiral, I talk to not just to the officers on the ships, I talk to the sailors, because if you want to know what is really happening, you talk to the sailors. You know that better than I do. And what I have heard uniformly from the officers and sailors on these LCSes, is that they love them. They are proud to be serving on them, and they are having fun operating the ships. I know you have been on them. I know you have talked to a lot of these officers and sailors. What are you hearing from the officers and sailors that are actually serving on the LCSes? Admiral Rowden. Sir, I hear a lot of things, clearly, and I think that there are some things that we need to work on, but those comments--and we take those onboard, and we go and we attack them. From my experiences, not only on the LCSes both on the East and West Coast, whether it is the Freedom variant or the Independence variant, the young men and women that are serving on these ships, they are excited for the mission. They are excited for the mission. They are excited for the opportunities that these ships present. When I talk to the young men and women that have come back from deployment, the varied missions that they are able to accomplish, the engagement that they are allowed to execute, it gives them a tremendous sense of pride. They also are monumentally innovative, and so they are constantly coming up with new ideas and new ways as we think about the future of these ships in order to be able to fully utilize and fully get the value out of these ships. They talk about the modularity. You know, one of the things that I think is important is that when we go to modernize a guided-missile destroyer, we have to take that ship offline for a significant period of time; but they understand that we can modernize the module ashore and in a very short period of time have a fully modernized combat system in order to be able to go put it back out to sea, get the crew trained up, and away we go. And so the capacity and the capability that these ships bring, the opportunities that they bring to contribute to three very important missions, and the opportunities to provide the presence that sometimes we just can't get because the guided- missile destroyers, the cruisers, the submarines, and carriers, are off doing other things. That is what really gets them fired up. Mr. Byrne. Well, thank you for that, and thank you for your service, sir. And I yield back. Mrs. Hartzler. Thank you. A few more questions here. Dr. Gilmore, what specific LCS platform characteristics and design do you believe that the Navy will need to address in its design for the frigate in order for your office to deem the frigate operationally suitable and effective? Dr. Gilmore. Well, the most important problem, set of problems, that will have to be addressed, are associated with the continuing reliability problems of many of the ships' systems, and many of those may end up being the same on the frigate, although Mr. Stackley will know more about that than I do because he is the one who is involved in developing the detailed design, but the initial assumption was that many of those would be the same. And there are continuing reliability problems with those systems. And if those problems are not fixed and addressed, it will be hard to, in fact, probably impossible to say that the frigate would be suitable, but I assume the Navy is looking at that. And then, of course, in the testing that we have done so far, there are problems with the guns, and some of the guns may end up being the same in terms of the ability of the crews to use them consistently to accomplish the missions that they are supposed to accomplish. They can in some instances accomplish those missions, but it turns out to be very difficult. But the other thing I have to say about combat missions is that we have only done a very limited amount of testing so far in that regard, very limited testing of the surface warfare package, and then truncated testing of the mine countermeasures package. Of course, the mine countermeasures package isn't at issue for the frigate. So at this point what I would say is with regard to the problems that might be encountered with the combat systems, the anti-submarine warfare systems, and the augmented surface warfare package on the frigate, we will have to see how that goes. The Navy is in development of those systems, but the Navy should devote a lot of attention, and I think Mr. Stackley has indicated they are devoting a lot of attention to the continuing reliability problems with the systems on the ships. Mrs. Hartzler. Thank you. Mr. Stackley, I wanted to ask you about that because in your testimony you talked about the packages that they include, and you said they will deliver when available, and they are ready to deploy. They have successfully fielded the surface warfare. They were late due to budget and technological challenges. I know you went in depth and explained about the mine countermeasures challenges and what you are doing with that regard. But I was a little surprised to hear you talk about how these other packages are ready. Can you give a little further assessment on that? Are they ready? And it sounds like you are putting old systems on them and bringing on new ones as they come about, or what is the status of the packages? Secretary Stackley. Yes, ma'am. Thanks for the question. I will try to be real clear here. We launched the program with three mission packages as the targeted initial round of capabilities as we delivered the ship. Across those mission packages, certain subsystems were mature and certain subsystems were going through development. And as I indicated in my opening statement, we are delivering mission package capability late. And the lateness ties to the extended development of certain of those subsystems. However, when one is ready, when it is mature, we are bringing it to the ship, so that as those capabilities mature and as these ships deploy, you are seeing increasing capability on board. And, in fact, I would argue that the approach that we are taking with the LCS regarding bringing mature capability to the ship in an incremental fashion is exactly what you all have outlined for the Department of Defense to do in the 2017 NDAA. I think if you take that, what you have outlined in terms of practice for the Department, and you line that up with the LCS program, that is the approach that we are taking here. The reason that we are having this hearing frankly is, one of the reasons, is the time that it has taken to complete the development and testing for some of these subsystems. We spend a lot of time talking about the RMMV, for example, but there are other examples where we have had to actually cancel parts of the mission packages because the development was not getting there and then find an alternative. The beauty is that when that decision is made, we don't have to go in and do a significant redesign to the ship because the ship was designed in a modular fashion, and we can bring these alternatives to the ship with a far less intrusive integration onboard. And I can walk through some of those examples, but I think it is instructive in terms of the benefit of the modular approach. Mrs. Hartzler. I think that is a good point because we have talked about open architecture and some of those things in acquisition reform. Just a question. Curious about the contracting, the subcontractors, so I got a list of them and looked at them because this has been problematic as far as the delay. Are they penalized for not delivering on time, or how is a contract set up initially in that regard? Secretary Stackley. Yes, ma'am. Bottom line, most of these developmental systems are under a cost-plus R&D contract where the terms and conditions of the contract are we take on responsibility for cost in a cost-plus environment, recognizing that in many cases we are looking for new invention and discovery. And so we assume the responsibility in a cost-plus environment for the cost, but the contractor loses if it is a cost overrun or delays, they are going to lose the fee that goes with the work. And ultimately they will lose the contract. I mean, RMMV was under development with Lockheed Martin. They had their eyes on the production contract and when we cancelled, they didn't just lose the fee on the RMMV development, but they lost the production that was going to come with it. Mrs. Hartzler. Very good. And I want to go to other members too, but I do want to ask Mr. O'Rourke a question. You have waited patiently, and you are a known expert on these issues on the Hill. So GAO has previously indicated that Congress limits their oversight by authorizing a block buy. A few questions. How has the previous block buy been used to manage cost growth, and is Congress able to perform oversight during the block buy? And, third, what are the implications of Congress not approving the next block buy for LCS? Mr. O'Rourke. In terms of conducting oversight during the period of a block buy, we have actually been through a test of that over the last several years as we have executed the current block buy contracts. There are many aspects to congressional oversight. One is what we are doing right now, which is asking questions during hearings. And there has been quite a lot of that over the past several years. The LCS has been a recurrent topic of questioning, sometimes quite intensive or extensive, at the annual Navy budget review hearings. I would venture that most of the annual Navy posture and budget review hearings have at one point or another discussed the LCS, so there has been a lot of Q&A at the hearings. Another aspect of oversight are legislative provisions and there have been a lot of---- Mrs. Hartzler. If I could ask you, I think maybe you didn't hear the question. What I am looking for, how has a block buy been used to manage cost growth not oversight? So how has a block buy managed cost growth, and what are the implications for us as Congress if we don't approve a block buy? Mr. O'Rourke. Right I was going to the---- Mrs. Hartzler. That is what we are looking at so---- Mr. O'Rourke. Right. I had picked out the middle part of your question first. Mrs. Hartzler. Yeah there was a question---- Mr. O'Rourke. But let me return to the first part, which is, if you would say that again, I want to make sure? Mrs. Hartzler. Sure. How has a previous block buy been used to manage cost growth? Mr. O'Rourke. Okay. I think it is important to get into the record that most of the cost growth on the procurement cost of the seaframes occurred prior to the block buys. Once the program was put under the block buy contracts, there has been only minor growth within that contract, some of which has been paid by the Navy. But the majority of the increase in the cost of the ships occurred during the period of annual contracting on the first four ships. Mrs. Hartzler. So you would say block buy locks in the price and helps save money? Mr. O'Rourke. It stabilized the costs and put the program into an environment where the costs have been not one that assembled a record of cost growth of anything like what we saw on the first four ships. Furthermore, by doing a block buy contract, you are getting the kinds of savings that are possible under a block buy contract compared to annual contracting. And those savings for the kind of block buy contract we are looking at here, which did not include upfront batch orders of components, could be upwards of 5 percent, so if we had been in an annual contracting environment, the ships might have been that much more expensive as well. A third point on this is that---- Mrs. Hartzler. Very quickly. Mr. O'Rourke. These block buy contracts are fixed price incentive contracts, and so that tends to limit the government's exposure to the amount of cost growth that does occur during the contract. That was the first part of your question. Mrs. Hartzler. Makes sense. Thank you very much. Representative Speier. Ms. Speier. Thank you. Let's talk more about block buys, because my understanding is that, Secretary Stackley, you have already put out an RFP [request for proposal] that presupposes a block buy, even though you don't have authorization yet from Congress. Is that correct? Secretary Stackley. What we have put out an RFP for is the 2017 ships with an option for a block buy where we will be coming back to the Congress with the 2018 budget for authorization for the block buy. Ms. Speier. But the shipbuilders are even saying that a block buy at this time won't afford them the necessary time for the completion of design. Secretary Stackley. We are doing the design today with the shipbuilder. We won't award the contract until we have completed a design review so that we, the government, are satisfied based on their presentation of the design information that will inform their proposal for the frigate. Ms. Speier. Ms. Mackin, what are the downsides of a block buy? Ms. Mackin. You know, it could have advantages for cost control, number one. Ms. Speier. Which Mr. O'Rourke has talked about. Ms. Mackin. Right. The disadvantages in our view, is that, as I mentioned in my opening remarks, the program can be considered, quote-unquote, ``locked in,'' so that any attempt to adjust the procurement pace, if Congress has concerns about the program, they want to make some changes, DOD has consistently come back and said, well, the pricing will increase then. So you are not locked in. I mean, you can make changes, but there is that risk that, oh, well, the contractors, we had this deal, and now they are going to raise their prices. So, I think it needs to be carefully considered if the block buy proposal for the frigate right now, which will be based initially on LCS prices, is the best strategy. Ms. Speier. Secretary Stackley, and you can provide this for the record if you don't have it off the top of your head, I want to know--and I would like for you to send it to the committee and also to my personal office--how much money we have spent on repairs to the LCS fleet to date, how much has the government spent, and how much has the shipbuilder spent. Secretary Stackley. Yes, ma'am. I will submit that for the record. [The information referred to was not available at the time of printing.] Secretary Stackley. Now, I am going to ask for clarification because, for example, the LCS 1 has been in the fleet for about 8 years, the LCS 2 for about 7 years; and so when you say how much money for repairs, we will come back with a--it will probably be a large dollar amount for repairs, but you understand that most repair, the predominance of the repair that we do in operations is because of the wear and tear that we put on the ships by operating them. For clarification, are you looking for contractor-responsible deficiencies? Ms. Speier. I want all repairs, and you can give it to us by date so we can look at the date the ship was commissioned and the date of the repairs so we can make that kind of assessment as to whether it is just wear and tear on the ship or whether it is something relative to a newly commissioned ship that has a series of problems, as many of these have already had. We will make that determination. If you just provide to us the dates of the repairs and how much they cost and who paid for them, that would be sufficient. Secretary Stackley. Yes, ma'am. Ms. Speier. And then I was on the LCS 4 on its very first trip, and I talked to the commander at the time who said they were having trouble with the design of the ship because they couldn't see over the hull. Now they left Cartagena and came back to Coronado to be christened. And as they went through the Panama Canal, the hull got damaged when pieces of the lock penetrated the hull. I would like again, if you don't have that figure off the top of your head, to provide it to me and the committee how much that cost to repair. Because in my conversations with the commander, I said this seems like a serious problem, and it seems like you need cameras or mirrors or something to be able to see over the hull. And he said, well, we won't be able to get that until it goes back into dry dock in 2 years. And literally within weeks, they had damaged the hull. So if you would provide that to me, I would appreciate it. Secretary Stackley. Yes, ma'am. [The information referred can be found in the Appendix on page 163.] Ms. Speier. Back to you, Dr. Gilmore, the testing of the modules for the LCS, can you go over that? How many of them-- according to the Secretary there is three now. How many of them have been fully tested? Dr. Gilmore. The only mission module that has been partially tested consistent with the--you know, there is a series of incremental requirements associated with the increments of each package, so we have tested the Increment 2 surface warfare package against its requirements, which are reduced relative to the requirements for surface warfare that the Navy ultimately hopes to meet with the fully capable surface warfare package which will come in the next several years, probably middle of the next decade, perhaps a little sooner. So what we have done so far in terms of operational testing is to test both LCS variants equipped with the Increment 2 surface warfare package against the Navy's requirements for surface warfare for the Increment 2 package. We had initiated what is called the technical evaluation last year, which was of the mine countermeasures package, which was the lead-up to what was supposed to have happened in operational testing. But given what happened in the technical evaluation testing, the Navy made the decision not to go to operational testing, commissioned an independent review team, and ultimately decided to cancel the RMS [Remote Minehunting System] program and make other changes to the mine countermeasures program. And we now have in place a plan for testing that future mine countermeasures package, which will be different from what the Navy had been thinking, at least in some respects, but that won't take place for several years. So just to sum up, what we have done so far in terms of operational testing is operational testing of the Increment 2 surface warfare package. There has been a lot of developmental testing done on elements of the other packages. For example, there has been developmental testing done of a variable depth sonar, not the one that the Navy has recently contracted for, but it was a foreign source variable depth sonar. There was developmental testing done of that. I forget exactly when that was, a year or two ago, and that was very promising. But it was done under conditions that weren't operationally realistic because, you know, the crews doing the testing actually were engineers, and the submarine that they were using the sonar to look for, the operators knew where it was, and the submarine wasn't evading. Now having said all of that, the test results were nevertheless very promising, and there have been lots of other developmental testing that has been done and that the Navy continues to do. But I am the operational test guy, and what we have done is what I said. Ms. Speier. So if I understand you correctly, this whole concept of having modules that you could interchange on the ship, making it more flexible, has been tabled, and we are now doing single modules for the ships, and only one has been operationally tested? Dr. Gilmore. Well, the original concept was that different modules could be interchanged among different ships, and that the ship crews and the module crews could be separate and interchangeable. My understanding is that the Navy as a result of another review in which Admiral Rowden was involved, has decided that they are going to merge the ship crews and the module crews on LCS and pretty much dedicate given modules to given ships and crews. And based on what we have seen, we think that is a good decision, so the Navy is giving up on some of the original vision based on what it has learned as we have done operational and developmental testing. Now, you still will be able to pull a module off a ship. The points have been made about, well, you can modernize the module and not take the entire ship down. So suppose you want to implement Increment 4 of the surface warfare package, you can take those modules off the ships. You can take the existing surface warfare modules off the ships and replace them with another module for another warfare area, and the ships aren't completely down and going through a lot of construction and changes in a dry dock. So that part of the concept is still alive, but the Navy has modified its thinking about how it is going to implement modularity on these ships going forward. Admiral Rowden. Ma'am, if I may provide some clarification. Ms. Speier. Sure. Admiral Rowden. Yes ma'am. So, I led the review team that came up with the recommendation to think differently about the modularity of these ships, and in the execution of the review, we were concentrating on three things really: simplification, stabilization, and ownership. My experience in going to sea is that the crew has to own the mission, and my concern was as we were looking at the modularity and shifting the mission over perhaps the course of a weekend, you are taking the vast majority of the crew and you are trying to shift them from hunting submarines on Thursday to hunting mines on Tuesday, and that just didn't make sense to me from the operational perspective. I still value and wanted to fully utilize the modularity of the ships for the reasons that Dr. Gilmore points out. We can modernize it much more effectively and much more rapidly. But I think it is important to understand that while we will single up crews and we will single up ships dedicated to a specific mission, if the need arises, we also have those crews given the similarity between the ships, or the identical between the ships, if we need to shift ships from hunting mines to hunting submarines, we have crews available, and we have modules available to do that if we have to expand that capacity. So we will have divisions dedicated to specific missions, and we will have crews dedicated to specific missions, but we can still utilize the modularity to expand our capacity should we have to do that in a time of crisis. Ms. Speier. Okay. But we started off with a concept. We built eight ships under that concept. We have got another 12 ships in development, and we keep changing our design expectations or assessments. And it just seems to me that we should design and then build because then we built things that aren't adequate to do what we want them to do. Let me ask you this, Secretary Stackley, and just one more question after that, Madam Chair. It is my understanding that because we didn't have a U.S.-based or U.S. Navy capability, a repair technician was flown to Florida from Australia in 2015 to make a 90-minute repair but essentially delaying operations by 4 days. How many other pieces of equipment could require similar repairs and/or delays, and has this happened more than once? Secretary Stackley. I will have to get back to you on the record in that specific instance and see if there are other instances. But I will describe that for every ship in our Navy, if we have to, and we do, we reach around the world to get the right tech rep there to the ship to provide the technical support that it will need in timely manner. And when we have original equipment manufacturers that are located overseas, then in fact we do on occasion have to go overseas to get that repair assist. Ms. Speier. All right. So if you would just provide to us how many times have we had to utilize resources that were not available within the Navy on these specific ships? Secretary Stackley. Yes, ma'am. [The information referred to was not available at the time of printing.] Ms. Speier. Okay. And then finally one last question. If we are now taking the LCS and turning it into a frigate, wouldn't we be better served to design a frigate that meets what our needs are? We have always had problems with the LCS because we were bumping up against the weight restriction. We have always had problems with the fact that there is not adequate number of crew on the ship, and we have a hull that is made out of aluminum that gets pierced easily and has been damaged in a number of settings. It seems to me that maybe we should go back to the drawing board and build a frigate that we want as opposed to just superimposing it on an LCS frame that appears to have many problems. Secretary Stackley. Yes, ma'am. Thanks for the question. Back in the 2014 timeframe, we spent a year reviewing design alternatives for this frigate, and we worked with the fleet. We worked across the design community. We worked with the Joint Staff. We worked with the CNO staff. And we reviewed existing designs, U.S. and foreign frigate designs, as well as considered a clean sheet. So, in fact, we did consider a clean sheet. We considered other existing designs, other existing designs as parent designs that could be modified, and included in that was the LCS itself. Reviewed all those alternatives, looked at the range of capabilities. The fleet weighed in in terms of their priorities in terms of the capabilities. Had to consider the missions that the ship would perform in, and had to consider things like cost and maturity and risk. And out of all that and that review that was conducted with OSD, with the Joint Staff, and we invited review by committee staffs as well, out of all of that, we landed on the proposal that came across to Congress last year and which we are continuing to discuss, which is the modified LCS, using the existing ASW and surface warfare capabilities that we either have or are developing to reduce the risk to first and foremost provide the capability that the fleet has prioritized, reduce the risk in terms of technical time and cost, and ensure that when we make a commitment to the Congress in terms of this frigate, this capability, this cost, that we are not bringing a lot of risk to the table and have a repeat of what we just experienced on the LCS at the beginning of this program. We are trying to leverage. It goes back to my comment regarding the 2017 NDAA---- Ms. Speier. All right. Ms. Mackin, could you just respond to that as well? Ms. Mackin. We also looked at the study. We looked at how the study was done. The study team did a pretty good job given a very limited time that they had. They did consider existing design, modification of existing new designs, and a major and minor modified LCS. As I mentioned earlier, the minor modified LCS, which is now the frigate, was the least capable option that the study team assessed. It did not meet all the fleet's needs, everything that they wanted. Cost was a big driver in deciding to go with the minor modified LCS, but another big driver was that they didn't want to disrupt the workload at the two existing LCS shipyards, so that was also a factor in addition to cost, and what we have now is the frigate. Ms. Speier. But the actual production is not jeopardized until 2021? Ms. Mackin. That is right. And even the study team noted that the current workload, even at that time they were doing their work, was taking both yards into 2021. So as I mentioned, there is no schedule imperative right now to get the frigate into the pipeline for industrial base concerns. Ms. Speier. So for the record, of everything that was studied, this was the least attractive alternative that was, indeed, selected? Is that what you just said? Ms. Mackin. It was the least capable option. Secretary Stackley. I would not agree with that, for the record, ma'am. Ms. Speier. All right. Now---- Secretary Stackley. For the record, and I would, rather than have this be a debate at this hearing, that you invite your staff or the members to review, we will brief, we will go through the extensive review that was done of the alternatives. And for the record, the disruption to the shipbuilders, that is important, but the decisionmakers, and that included the CNO first and foremost, and the CNO first and foremost is less concerned about disruption to the shipbuilders and more concerned about delivering capabilities to the fleet. And that was the priority that he placed in terms of the ultimate recommendation that went forth to the Secretary. Ms. Speier. Well Mr. Stackley, I do not want to engage in a discussion on this right now, but I think in the end, for all of us, what is most important is, one, that our seamen are safe and secure at sea and that they can survive and that the ship can survive. And, two, that we build competent, capable ships, and, three, that the costs be known and that we are prudent in making sure that we are not paying for pigs in the poke. And that we are not providing sweetheart deals to the shipbuilders for not providing us ships at the outset that are capable of doing the job that we contracted for, and that is why that warranty/guaranty issue must be addressed. With that, I yield back. Secretary Stackley. I 100 percent concur, ma'am. Mrs. Hartzler. Very good. Mr. Byrne. Mr. Byrne. A couple of follow-up questions. Have we had other classes of ships that have moved through the Panama Canal that have had some sort of damage as they have gone through? Admiral Rowden. Sir, I can't think of any specific instances at this time. However, I will take that for the record; and if that, in fact, has occurred, I will get that back to you, sir. [The information referred can be found in the Appendix on page 163.] Mr. Byrne. When the ship is going through the Panama Canal--I have watched commercial ships go through the canal, and the crew is still on board the ship, but the Panama Canal personnel are actually operating the transit through the locks. Is that true with U.S. Navy ships? Admiral Rowden. Yes, sir, that is. Mr. Byrne. So if there has been damage as it is going through the locks, it is really not our personnel that has caused it. It has been caused by the people that work for the Panama Canal? Admiral Rowden. That is correct, sir. And specifically with the latest damage that occurred on the ship, when we took the first ship through and there was some damage associated with it, we sent a team down to the Panama Canal to talk to them about how we needed to take these ships through the canal, the modifications that needed to be made to the way they hook the lines up and pull the ship through the canal. Unfortunately, and we discussed this at length with how they were going to do it, unfortunately in the most recent transit, that was not executed. We have gone back to them, and we are going to get it squared away in the future, but we know how to get the ships through the canal safely, and if we execute the procedures as we have outlined them, I don't think we will have any problems with that in the future. Secretary Stackley. If I can add to that? Mr. Byrne. Sure. Secretary Stackley. The LCS 2 variant is what we would refer to as Panamax. In other words, the ship design maximizes the beam width of the ship up to the limits of the Panama Canal, so it is going to be tight. And it is also a very unique design in terms of the sides of the ship, and you are well familiar with this. So the first couple of instances of transiting the canal, the damage has occurred because we are pressing up against the full width of the canal with this unique design, and the system that is used, what's referred to as a fendering system, for all ships--all ships have a fendering system to minimize the damage--just was not prepared for that situation. So as Admiral Rowden indicated, it is both handling, but it is also the fendering system that we are putting in place to deal with those type constraints. Mr. Byrne. And with the casualties that we have experienced with this class of ships, the LCS class, are they on par with other classes of ships when they are new? Is this what you get when you get a new class of ship, that you have a certain level of casualties, any worse or any better? Secretary Stackley. The answer is absolutely yes, but we are not satisfied. And so I reviewed what we refer to as casualty---- Mr. Byrne. Absolutely yes, that it is on par? Secretary Stackley. Absolutely yes, that it is on par, but we are not satisfied. I reviewed the history of the last 4 years' worth of casualty reports, and LCS is in the mix for combatants in terms of casualty reports status 2, 3 and 4, which are different degrees of severity. So that is in the mix. However, Dr. Gilmore's comments regarding reliability are absolutely on. This is a relatively new ship class. We do have new ship systems. We are going through what is referred to as reliability growth. And what we have got to do is get there faster on a system-by-system basis so that the concerns that he raises and that we share with regards to reliability, we can retire more quickly, and we will just as we have with every prior ship class that we have introduced to the Navy. Mr. Byrne. And, Admiral, one final question for you. We have heard a lot about distributed lethality. I hope I said that right. It is a lot of syllables in a couple words for somebody from Alabama to say. When we added the missile capability to these ships, what did it do to these ships' distributed lethality? Admiral Rowden. Sir, thank you for the question. It is interesting because our first thoughts of how to distribute the lethality of the fleet, distribute the lethality of the force, came when we were up at the Naval War College actually conducting a war game utilizing the littoral combat ship. And in this specific war game, we were playing in the mid 2020s timeframe, and one of the capabilities that we indicated would be available and on the ship at that time was an extended-range over-the-horizon missile. And this was a war game in that we set up live players, playing live players as we executed the moves. And I was just, I was quite pleased with the effectiveness that we had out of the littoral combat ships that had been discounted by the adversary given the capability that we had built on to the ship, and they had full understanding of what was happening there. And so as we have looked back and as we conducted the after-action reports, one of the things that I realized as we were looking at the requirements that we built into our ships is this migration towards pretty defensive ships. Defend the aircraft carrier. Defend the logistics train. Defend the amphibious readiness groups. And what we have found in subsequent war games is that if we increased the offensive capability of the ship, if we increased the range at which we could go out and attack our adversary, it caused a couple problems. One, they had to think very differently about all of the different aspects of the fight. They had to pay less attention to the undersea domain. They had to pay less attention to the space of the domain because they had to pay much more attention to the surface ships and the lethality of those surface ships. Mr. Byrne. Well, I noted when I was at the RIMPAC exercise, that the Chinese ships that were participating were all closest to the Coronado, the littoral combat ship, and watching it very carefully. And so I think the Chinese are very interested in what this new capability has been added to that ship and what it would do in that theater. Thank you, Madam Chairman. I yield back. Mrs. Hartzler. Thank you. We have had a very thorough and, I think, helpful hearing today discussing this very important platform for our sailors and for our Nation. Before we conclude the hearing, I was wondering if any of the witnesses have any closing remarks that they want to make or anything they want to say to put on the record that they haven't gotten to say yet. So I will just go through Mr. Stackley, if there is anything you want to add. Secretary Stackley. Ma'am, I would be at risk of repeating my opening statement. But just to synopsize, the ship works. We have reliability issues. We will get through those. But the ship works. Concerns with things like redundancy, I agree with Dr. Gilmore's assessment that we need to increase redundancy, particularly for critical systems, and we are going about that, first with the frigate design and then looking at backfitting that to the earlier hulls. The ship works. The mission packages are correctly selected in terms of warfighting gaps. We have got to deliver that capability regardless of what the platform is, and we have selected the LCS platform to deliver those capabilities. We are late. We understand that, but we are bringing that capability forward in an incremental fashion when it is ready so every deployment, every deployment, littoral combat ships are deploying with increased capability. And yes, we have changed the program as we go. That is because we are learning. This is a new concept. And concepts that were struck back in the 2001, 2002 timeframe, now that we are out there operating and deploying, we are learning and we are improving. So I thank you for the hearing, and we will follow up on all the requested actions. Mrs. Hartzler. Very good. And you are--each of you can submit comments for the record in addition. Vice Admiral Rowden, any closing comments? Admiral Rowden. Yes, ma'am. I too sincerely appreciate the opportunity to be here on behalf of the littoral combat ship. It is an exciting time in our Navy, and it is an exciting time bringing this capability into the fleet. The capabilities that it is going to deliver and understanding that we have a team focused on the issues, we are learning about the issues, we are learning about how to maintain it, and going forward, I am 100 percent confident that we will tackle those issues and we will defeat them. And as we deliver that capability forward, as we--and in my mind, it is all about the center of the universe, and I think the center of the universe, at least from the professional perspective, are the ships and the men and women that serve on those ships. They are excited about the capability that these ships bring, and I know that they will deliver to the forward forces. And we are going to continue to work hard and make sure that we maximize the value of these ships to our fleet commanders. Mrs. Hartzler. Very good. Ms. Mackin. Ms. Mackin. I just would reiterate the need for prudence in pursuing a block buy strategy at this point in time, which will be initially 12 LCS prices, with the frigate upgrades to be added in later. There are a lot of unknowns about the basic ship right now that is going to be modified, what will the design look like, what will the cost be. So I will just reiterate that caution. And then just for the record, I did want to mention on the warranty issue, we recommended that the Navy take a look and see if it would be possible to move more toward a warranty approach, as the Coast Guard does, and they agreed to do so. That study is supposed to be provided to us this month. So we haven't seen it yet, but we will look forward to taking a look at the results. Mrs. Hartzler. Very good. Dr. Gilmore. Dr. Gilmore. I just emphasize what I said in my opening comments, which is we need to acknowledge the many problems that exist and fix them. And I am glad the Navy is now acknowledging many of these problems, but in the past, that always hasn't been true. For example, in 2014 testimony from senior Navy officials, they said the Remote Minehunting System completed its reliability growth program this past year and continues to test well. At that time, that simply wasn't the case. It was testing poorly. So I hope that the Navy, as it is now doing and as it did with its mine countermeasures independent review team, thoroughly reviews all of the test results that are available, takes those onboard, and provides the resources, with your help, to fix these problems. And it seems that Mr. Stackley and Admiral Rowden are committed to doing that, and I hope they continue to do that in the future. Mrs. Hartzler. Very good. Thank you. Mr. O'Rourke. Mr. O'Rourke. Thanks for having me at the hearing today. Just to close the loop on your earlier question about block buys and oversight. There is a lot of aspects of oversight. We talked about Q&A [question and answer] at the hearings. There is legislative provisions, there have been many of those over the years, lots of report language in the committee reports, a lot of GAO reports also, as well as--as well as my tracking report and CBO [Congressional Budget Office] report. So those are all other aspects of oversight that have taken place during the block buy contracts that we have executed. There is one additional aspect of conducting oversight, and that is the ability to terminate the program if you are just dissatisfied with it. Congress does retain the ability to terminate a block buy contract, and a block buy contract can be written without a cancellation penalty. Furthermore, a block buy contract can be implemented without upfront batch buys of components that might add to your reluctance to cancel the contract, and in fact, that is how the Navy has done the LCS block buy contracts, without any upfront batch buys. The block buy contract does add to your reluctance to cancel the program, but it might also be argued that most of the reluctance for terminating a program arises from the mere fact that the program has begun procurement. There have been relatively few defense acquisition program cancellations over the years, and the vast majority of those programs that have not been canceled were done under annual contracting. One final note. If we were to do a down-select as currently planned and then use annual contracting, we could be getting ourselves into a situation of limiting the Navy's ability to use leverage in its negotiation with the contractor. When you down select to a single builder, you are creating a monopoly supplier at that point. And if the Navy then has to go back to that sole builder and contract on an annual basis and get into an annual negotiation with that builder, the Navy's leverage in that situation might be reduced. That is a situation we are in, for example, with aircraft carriers, and people have expressed dissatisfaction with the fact that we have only one builder of aircraft carriers and we have to then negotiate with them every time we build a carrier. If you were to do a down-select on the LCS program and then also use annual contracting rather than block buy, you are creating a situation not too unlike that one that people have expressed dissatisfaction with. Mrs. Hartzler. Great. Thank you all for your service to this Nation. This hearing is now adjourned. [Whereupon, at 12:10 p.m., the subcommittee was adjourned.] ======================================================================= A P P E N D I X December 8, 2016 ======================================================================= PREPARED STATEMENTS SUBMITTED FOR THE RECORD December 8, 2016 ======================================================================= [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] ======================================================================= DOCUMENTS SUBMITTED FOR THE RECORD December 8, 2016 ======================================================================= [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] ======================================================================= WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING December 8, 2016 ======================================================================= RESPONSE TO QUESTION SUBMITTED BY MS. SPEIER Secretary Stackley. USS CORONADO (LCS 4) transited the Panama Canal in February, 2014. As the ship transited the canal, CORONADO suffered four separate allisions (instances where the ship structure was pierced or deformed by hitting the Panama Canal wall structure). Two of the allisions were created transiting the Gatun Locks and the two others were created in the Pedro Miguel Locks. The total cost to repair CORONADO as a result of the damage was $820,492. Initially, temporary repairs were conducted to remove debris and install additional structure to the damaged areas to continue operating at sea, until the ship was able to conduct more permanent repairs. Permanent repairs were completed during CORONADO's Post Shakedown Availability (PSA). Lessons learned from prior LCS ships transiting the Panama Canal are being incorporated to mitigate the risk of recurring instances of the damages referenced above. For instance, prior to the transit of the Panama Canal, both LCS 6 and LCS 8 had a temporary fendering system installed to provide additional mooring fender strengthening. Permanent Independence variant improvements to protect against ship damage in the canal and in port include strengthening for fendering and tug loads. This improvement will be accomplished during PSA for LCS 6 through LCS 12 and in line construction on LCS 14 and follow. The decision for the point of incorporation for each of these improvements is based upon available funding, and considerations for minimizing schedule disruption and significant amounts of re-work in the construction yard. In addition to addressing hull strengthening issues, a delegation from the Navy has held on-going meetings with the Panama Canal Authority (ACP), most recently on February 7, 2017 to discuss lessons learned and actions that could be taken by the ACP to mitigate or eliminate damage to LCS ships during canal transits. The February 2017 meeting was very productive and Commander, FOURTH Fleet is codifying the agreements reached in a letter to the ACP. [See page 32.] ______ RESPONSE TO QUESTION SUBMITTED BY MR. BYRNE Admiral Rowden. The following table summarizes all known incidents of ships sustaining damage while transiting the Panama Canal: ---------------------------------------------------------------------------------------------------------------- SHIP Hull Number Date of Incident Incident ---------------------------------------------------------------------------------------------------------------- USS TORTUGA-----------------------LSD 46----------------13 Feb 06----------------Allision----------------------- ---------------------------------------------------------------------------------------------------------------- SWIFT HSV 2 02 Apr 07 Allision ---------------------------------------------------------------------------------------------------------------- USS HALYBURTON FFG 40 16 Nov 07 Grounding ---------------------------------------------------------------------------------------------------------------- USNS COMFORT T-AH 20 21 Jul 09 Allision ---------------------------------------------------------------------------------------------------------------- USNS DAHL T-AKR 312 03 Jan 10 Allision ---------------------------------------------------------------------------------------------------------------- USNS 1st LT JACK LUMMUS T-AK 3011 10 May 10 Allision ---------------------------------------------------------------------------------------------------------------- USS PASADENA SSN-752 25 Aug 11 Allision ---------------------------------------------------------------------------------------------------------------- USS INDEPENDENCE LCS 2 15 Apr 12 Allision ---------------------------------------------------------------------------------------------------------------- USS CORONADO LCS 4 23 Feb 14 Allision ---------------------------------------------------------------------------------------------------------------- USS BARRY DDG 52 09 Feb 16 Damage to Flight Deck Nets ---------------------------------------------------------------------------------------------------------------- [See page 36.] ======================================================================= QUESTIONS SUBMITTED BY MEMBERS POST HEARING December 8, 2016 ======================================================================= QUESTIONS SUBMITTED BY MRS. HARTZLER Mrs. Hartzler. In your written testimony you stated that the revised Independent Review Team (IRT) implementation plan focuses on one delivery vehicle with the current MCM package sonar; however, the FY17 NDAA Conference report requires a review of synthetic aperture sonar technologies for the MCM package. Please provide the subcommittee the following information:Does the Navy plan to test and evaluate any additional conventional or synthetic aperture sonar technologies as part of its revised IRT implementation plan briefed to the committees in September 2016? In light of the Conference Report requirement (section 1071), does the Navy intend to revise its September 2016 implementation plan for testing sonar technologies for the MCM package? Has the Navy considered all available synthetic aperture sonar technologies to include those from our ally navies? How many conventional and synthetic aperture sonar technologies does the Navy plan to test to meet the requirements of the FY17 NDAA and to ensure the success of the MCM package? Admiral Rowden. The Navy has selected the Common Unmanned Surface Vehicle as the tow vehicle for the minehunting sonar as part of the MCM Mission Package. The Navy continues to conduct testing and evaluation of synthetic aperture sonar technologies through existing program of records (POR). Does the Navy plan to test and evaluate any additional conventional or synthetic aperture sonar technologies as part of its revised IRT implementation plan briefed to the committees in September 2016? Yes, additional direct testing and evaluation of synthetic aperture sonar technologies is being conducted through existing programs of record (POR). The AQS-20C production configuration of the towed sonar is conducting sub-system testing. The AQS-24C towed sonar and the Surface Mine Countermeasure Unmanned Underwater Vehicle (SMCM UUV) POR containing the Knifefish Engineering Design Model (EDM) are both currently undergoing in-water developmental testing. The AQS-24C sensor configuration for the MH-53E helicopter is undergoing production testing with an anticipated completion date of July 2017. In addition to these POR efforts, the Navy has coordinated with and sent observers to the UK Royal Navy through technology exchange agreements to participate in ongoing evaluations of the Thales sonar system towed by both the ATLAS Elektronik and Thales unmanned surface vehicles. In light of the Conference Report requirement (section 1071), does the Navy intend to revise its September 2016 implementation plan for testing sonar technologies for the MCM package? No, the current test and evaluation approach is sufficient to provide a sound technical and operational assessment to support the IRT Implementation for the MCM mission package and the Congressional reporting requirements. Has the Navy considered all available synthetic aperture sonar technologies to include those from our ally navies? Yes, the Navy has evaluated foreign produced systems and continues through technology exchange agreements to monitor ongoing allied efforts of the most mature systems that have potential application for the MCM mission package. The most mature foreign systems under review are produced by ATLAS Elektronik and Thales, both of which are being assessed by the UK Royal Navy. How many conventional and synthetic aperture sonar technologies does the Navy plan to test to meet the requirements of the FY17 NDAA and to ensure the success of the MCM package? The current Navy plan assesses a total of six (6) sonar technologies that will inform the final configuration of the MCM mission package: 1) AQS-20C configuration with a synthetic aperture sonar, a digital gap filler sonar, and a high frequency wide band forward looking sonar is the primary candidate at present. 2) AQS-24C configuration with a high speed synthetic aperture sonar and high frequency wide band rear looking sonar. 3) Knifefish UUV with low frequency broad band synthetic aperture sonar. 4) AQS-20A configuration with conventional real aperture sonar. 5) AQS-24B configuration with high speed synthetic aperture sonar. 6) Thales towed sonar with synthetic aperture sonar.* --------------------------------------------------------------------------- * U.S. Navy controlled testing is not planned but performance data will be captured for comparison via existing data/technology exchange agreements. --------------------------------------------------------------------------- ______ QUESTIONS SUBMITTED BY MS. SPEIER Ms. Speier. Your written testimony states that ``the department chose a frigate concept based on a minor modified LCS in lieu of more capable--and more expensive--small surface combatant options.'' What are the key mission capabilities that the Navy identified and prioritized as needed for a potential frigate in its recent study of alternatives? Ms. Mackin. Our report GAO-16-356, ``Littoral Combat Ship: Need to Address Fundamental Weaknesses in LCS and Frigate Acquisition Strategies'' described our evaluation of the Navy's Small Surface Combatant Task Force's efforts to meet the Secretary of Defense's direction to study alternatives to the LCS that would provide capabilities ``consistent with a frigate''. As we reported, the task force identified eight concepts for the capability of the small surface combatant (SSC)--known as capability concepts--representing the range of operationally acceptable mission alternatives. These are shown below. [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] .epsThe task force found that a minor modified LCS (of either variant) was the least technically feasible of meeting any of the eight capability concepts among all of design categories that it considered. As shown, 7 of the 8 concepts included local surface warfare (meaning the ship can defend other ships against threats and attack targets within a medium range); 5 feature local anti-air warfare (meaning the ship can defend other ships against air-based threats within a medium range), and 5 also featured anti-submarine warfare capability. However, based on direction from senior Navy leaders, the task force ultimately focused on creating ship design concepts based on capability concept 7, which does not include a local anti-air warfare capability. As part of its methodology, the task force solicited feedback from fleet operators. In these fleet engagement sessions, Navy operators were given a set of performance capabilities--like speed, range, over- the-horizon surface warfare capability, and others--and were told to prioritize them. All of the concepts featured some degree of multi- mission capability--meaning that the ship can conduct more than one type of mission (e.g., surface warfare and anti-submarine warfare) at one time. The fleet operators consistently ranked local anti-air warfare and over-the-horizon surface warfare with anti-submarine warfare as their highest priorities for a future SSC. However, as noted above, capability concept 7 does not have local anti-air warfare capability. Other trade-offs were also made. For example, the fleet operators also highly valued an endurance range of 4,000 nautical miles and an ability to remain underway for 30 days. The chosen capability concept will have a range of less than 4,000 nautical miles, and only a 14 day underway duration. As shown below, the task force found that an LCS with minor modifications was the least feasible at meeting the Navy's identified capability requirements, meaning that LCS with minor modifications was the least capable option considered. [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] .epsMs. Speier. How does GAO rank-order the capabilities and design characteristics of each of the ships that the Navy considered during its study to determine how to develop the frigate platform, and how does GAO assess the capabilities of the ship that the Navy ultimately chose as the baseline for the frigate? Ms. Mackin. GAO does not have the information to conduct a detailed analysis such as this, because the task force used statistical analysis software that GAO does not possess to assess the most likely cost and characteristics of over 19 million potential ship designs. Since new designs provide the most flexibility, the Navy would be able to identify many potential new design configurations to meet any set of SSC requirements. For existing designs, the task force analyzed 23 designs, but its supporting workpapers do not contain adequate information for a rank-ordering since limited information is presented about each option and the relative cost. We found that the task force considered both new and existing ship design options that were more capable than the LCS with minor modifications than the Navy ultimately selected. According to task force documentation, the inherent space, weight, power, and cooling constraints of the LCS with minor modifications limited the extent of changes that could be accommodated. With modifications, the task force found that other existing designs could provide additional capability, including local anti-air warfare. For example, the task force identified that an LCS with major modifications and a modified U.S. Coast Guard National Security Cutter--which, like LCS, is also currently in production--could both provide a full multi-mission capability, would provide greater weight and other margins which would allow for future upgrades, and have greater range and underway days. The task force also found that most of the existing designs considered could accommodate survivability improvements above those found on LCS. Ms. Speier. Does GAO believe that the minor modified LCS will or will not meet the combatant commander's stated operational requirements for a frigate? Why, or why not? Ms. Mackin. A frigate based on an LCS with minor modifications will not meet all the requirements prioritized by the fleet operators during engagement sessions. The results of the fleet engagement process imply that the fleet prioritized local anti-air warfare capabilities which are not included in ability concept 7, and the Navy subsequently based its frigate requirements on a reduced capability concept 7, so it may no longer be reflective of the concepts developed in consultation with the fleet. An LCS with minor modifications could not achieve these requirements. The task force also determined that a minor modified LCS could not be modified to the level of vulnerability resistance like that of a legacy FFG 7 class frigate due to LCS weight and design constraints that would prevent adding more physical structure. If a greater level of vulnerability resistance was desired, a minor modified LCS would also not meet these requirements. The task force found that a minor modified LCS (of either variant) was the least technically feasible of meeting any of the eight capability concepts among all of design categories that it considered. According to the task force's report, the Navy would need an LCS with major design modification, a new design, or a modified (non-LCS) existing design if it wanted an SSC with multi-mission surface warfare, anti-submarine warfare, and local anti-air warfare capability and/or major survivability improvements. An LCS with minor modifications could not support these upgrades. Moreover, a minor modified LCS will not fully address all lethality and survivability concerns raised by the former Secretary of Defense. The planned modifications to LCS will offer some improvements (multi-mission capability and some survivability improvements related to reducing the susceptibility of the ship to attack). However, beyond the addition of an over-the-horizon missile that is also under consideration for addition to LCS, the proposed frigate does not add any new offensive anti-submarine or surface warfare capabilities that are not already part of LCS. Ms. Speier. Were other options considered that were more capable at meeting all of the Navy's capability priorities other than LCS? Ms. Mackin. The task force identified a number of designs that were more capable than the minor modified LCS, including a major modified LCS (of either variant), a modified National Security Cutter, and some foreign frigate designs. New designs--since they are by definition the most flexible--could also be developed to achieve the higher levels of capability sought by the Navy. However, Navy leaders, based on affordability concerns and a desire not to have a production break at the current LCS shipyards, ultimately recommended the minor modified LCS. Ms. Speier. What role did industrial base considerations have in the frigate study and in the Navy's choice of using a minor modified LCS for the frigate baseline? Ms. Mackin. In a November 2014 memo in which it recommends selecting a minor modified LCS, senior Navy leadership highlighted the speed with which they believe a minor modified LCS based frigate could be fielded as a deciding factor in its deliberations, as well as a desire to maintain stability in the LCS industrial base and vendor supply chain. The task force report stated that this option could achieve full capability faster than the others, and with a neutral impact to the industrial base (i.e., the LCS shipyards). In particular, the task force wrote that a minor modified LCS design would provide the shortest timeline to first ship delivery and that a major modified LCS and new and existing designs would result in production gaps of 1 to 5 years. Due to the scope and timeframe for our audit, we did not verify these task force findings. [all]