STATEMENT BY
MR. JOHN J. YOUNG, JR.
ASSISTANT SECRETARY OF THE NAVY
(RESEARCH, DEVELOPMENT, AND ACQUISITION)
BEFORE THE
SUBCOMMITTEE ON PROJECTION FORCES
HOUSE ARMED SERVICE
COMMITTEE
UNITED STATES HOUSE OF REPRESENTATIVES
CONCERNING
U.S. NAVY SHIPBUILDING, WEAPONS AND OTHER
PROCUREMENT PROGRAMS
MARCH 27, 2003
Mr. Chairman, distinguished members of the
Subcommittee, thank you for this opportunity
to appear before you to discuss the
Department of the Navy's fiscal year (FY)
2004 Budget request. I recently visited our
Sailors and Marines in the Persian Gulf
area, including Kuwait and Bahrain, and we
can rest assured that our Sailors and
Marines guard our freedom with a dedication
born from a voluntary commitment to defend
the ideals of our founding fathers. I am
proud to come before you today and outline
the contribution that we in the Navy and
Marine Corps acquisition community are
making to enable the Department of the Navy
to field the most capable, mobile and lethal
force since its inception over 225 years
ago.
The Global War on Terrorism has
fundamentally changed the national debate on
defense. To meet this challenge,
difficult decisions were required to find
the optimal mix within the portfolio of
Naval responsibilities, and within that, the
shipbuilding acquisition objectives of the
Department. We have been good stewards for
the taxpayer by demonstrating creative
thinking such as shipbuilding workload
swaps, R&D funding for lead ships, and split
funding for CVN 21; making sound
fiscal decisions including stopping the
growth in prior year shipbuilding costs;
reviewing the need for some of our legacy
systems; and leveraging these actions to
increase the number of ships being requested
in the FY 2004 budget. By addressing key
issues such as the cultivation of promising
shipbuilding technologies, cost effective
acquisition of mature platforms and systems,
and improved maintenance of existing systems
we have been able to increase the number of
ships from the five indicated in last year's
budget request to seven in the FY 2004
budget request.
In
striving to provide the warfighter with the
latest capabilities, we have adopted the
tenets of Naval Vision 21 and Naval
Transformation Roadmap 21. In doing this,
we have engaged in a full assessment of
Naval Science and Technology funding to
ensure we have addressed all technology
needs to support these transformation
mandates. To this end, technology
demonstrations are planned using Future
Years Defense Program (FYDP) funds that aim
to meet the needs of our forces --
stretching from the ocean floor to the edge
of space, and from facilities in the
United States to the tip of the spear
throughout the world.
We are
working extensively with industry to make
each defense dollar go further. For
example, the DDX Team is cultivating the
best minds in industry to ensure the DDX
will provide the best ship design and ship
systems possible. Our efforts however
aren't limited to the early stages of a
program's life cycle. We have recently
brokered a swap with Northrop Grumman and
General Dynamics to align our LPD and DDG
shipbuilding programs more effectively. The
result is a more robust and competitive
shipbuilding industry with a lowered cost to
the taxpayer. A true win-win situation.
Additionally, we completed a disinvestments
effort to identify and eliminate those items
we carry and maintain in inventory that have
limited function or application or are
becoming obsolete and unaffordable. We plan
to continue this effort to eliminate older
systems with limited capabilities that have
an inordinately high infrastructure cost to
supply, train for and support. Finally, we
will continue to use multi-year procurements
(MYP), for example, the proposed VIRGINIA
Class submarine MYP, and cost effective
procurement quantities to help drive down
the cost to the taxpayer but drive up the
support to our Sailors and Marines.
Our
actions to get the best value reach beyond
the Department of the Navy. For example, we
recently arranged a deal with the Missile
Defense Agency (MDA) that assigns to them
the USS LAKE ERIE to test sea-based
ballistic missile defense. In return MDA
will pay for, and upgrade, up to 20 Aegis
equipped ships with as many as 90 Standard
Missile 3 (SM 3) weapons to be installed for
missile defense. This provides a limited
sea-based missile defense capability by 2004
and greater capability by 2006, well in
advance of the plans presented to you last
year. It is this type of creative thinking
that marks the new mindset that we are
instilling within the Navy's acquisition
community.
In a
similar initiative, the Navy has worked in
partnership with the Air Force to define a
joint strategy for developing an unmanned
combat air vehicle (UCAV). The Air Force
and Navy have been able to define a common
set of requirements while also recognizing
the unique needs of each service. This work
has allowed definition of a competitive
acquisition strategy for UCAV and patterned
after the successful Joint Strike Fighter (JSF)
competition. UCAV is a critical tool for
providing persistent surveillance and combat
capability for sea based Navy platforms.
ENHANCING
WARFIGHTING CAPABILITIES
We are
changing and initiating programs to improve
the warfighting capability of current and
future forces. We are seeking joint
opportunities and options wherever possible
in taking these steps.
One
critical initiative is known as Open
Architecture. This effort will allow all
Navy ships to eventually share common
computers and computer operating systems.
Key functions, such as tracking, fire
control, and navigation, can be software
applications that are shared among all ships
and easily upgraded as discrete software
modules. Unique software functions can
easily be added for ships that need special
capabilities. We can enhance our
competition opportunities by allowing all
qualified industry partners to offer
proposals for writing software modules. The
DDX engineering development modules and
planned Aegis Combat System and Ship Self
Defense System upgrades will be combined to
achieve the greater goal of an open
architecture for all Navy ships.
In
addition to moving the Navy into the future
of combat systems, the DDX also moves naval
surface combatants to the future of electric
powered, stealthy, and automated destroyers
and cruisers. DDX will essentially take the
next step towards efficiency in the
destroyer construction process by
implementing the design-build process
successfully applied to VIRGINIA Class and
LPD-17 Class. Further, the Total Ship
Computing Environment developed for DDX will
automate many ship systems and damage
control functions, allowing the Navy to
reduce the crew and thus the life cycle
operating cost. The DDX hull and
technologies will lead directly to CGX, the
cruiser for the air and missile defense
threat of the future.
Through the support of the Congress, we have
gotten an accelerated start on the other
surface combatant family member, the
Littoral Combat Ship (LCS). LCS will allow
the Navy to more affordably and effectively
conduct mine countermeasure, maritime
interdiction and anti-surface warfare
operations, and enhance our capabilities
against asymmetric threats. LCS also
represents a new approach to building ships
- where the hull will be a flexible "sea
frame". The sea frame's common computer
architecture, the "backbone", will enable
the sea frame to accommodate a variety of
mission modules and will provide a path for
future spiral upgrades to LCS'
capabilities. This family of ships will be
the heart of the Navy's Sea Strike
capability until 2050 and beyond.
With
the leadership of Secretary Rumsfeld, the
Navy team defined a strategy to accelerate
and integrate the technologies of CVNX-1 and
CVNX-2 to yield the CVN21 design. This ship
will provide greater sortie generation
capability through improved flight deck
operational concepts. Further, the ship
will use automation and survivability
enhancements to accelerate the manpower
reduction goals, providing lower operating
costs for the fleet.
Ships
alone cannot accomplish missions. First and
foremost, we must have the unmatched Sailors
and Marines of today's force who turn our
weapon systems into true warfighting
capability. They need the tools that expand
their reach and improve their
effectiveness. The Department has taken
several truly dramatic steps that will
change combat capability in this area.
First,
the Extended Range Active Missile (ERAM)
provides an active missile allowing Navy
ships to fire-and forget and do so 200 miles
over-the horizon using surveillance systems
such as the E-2C Advanced Hawkeye. ERAM
will leverage the significant investment
made by the Defense Department in the
Advanced Medium Range Air-to-Air Missile (AMRAAM)
seeker, achieving the goals of maintaining
jointness and of leveraging past investments
wherever possible.
The
UCAV will achieve the Chief of Naval
Operation's goal of persistent airborne
surveillance capability combined with
effective strike capability. The Office of
the Secretary of Defense, the Air Force, and
the Navy have worked together to harmonize
requirements for UCAV. This partnership
will accelerate the delivery of UCAVs for
the Navy, providing competition and the
potential for jointness.
The
Army, Navy and Air Force are working to join
our requirements for Intelligence,
Surveillance and Reconnaissance (ISR)
systems. Navy ships are relying to a
greater degree than ever on real-time
delivery of ISR products and the commanders
increasingly have the command and control
tools to act on this information. Achieving
a joint strategy in this area will
accelerate delivery of these systems to our
Sailors and Marines while assuring
interoperability among the services for
joint operations.
Cooperative Engagement Capability (CEC)
systems allow one Navy ship to fire on a
threat based on the better quality tracking
information provided from another Navy
ship. CEC inherently improves the picture
of the battlefield for all naval assets.
The acquisition team has defined a strategy
that will more efficiently use limited
bandwidth and provide CEC-quality
situational awareness to all participants in
the theater of operations.
These
and other tools will ensure that our Sailors
and Marines have unmatched capability and
technology for the battlefield of the
future.
CHANGING OUR BUSINESS
PRACTICES
The Department of the Navy remains committed
to simplifying the acquisition system,
streamlining the bureaucratic decision
making process, and promoting innovation.
We are streamlining our regulations and
instructions to remove unnecessary
impediments and provide the maximum
flexibility to our acquisition workforce
consistent with law and higher regulation.
We are also continuing to take
advantage of numerous acquisition
initiatives to shorten cycle times, leverage
commercial products and capabilities, and
improve the quality of equipment being
provided to our warfighters. For example,
we used direct dialogue with industry to
accelerate by several months the process of
defining and selecting the ERAM missile
design.
In an environment where competition is
limited, the structure of contracts is
critical to providing tools for the program
manager to use in delivering ships and
weapons on schedule and within the budget.
The Department is applying new contract
strategies in an effort to focus greater
attention on cost and schedule. We are
implementing broken or stepped profit share
lines to ensure that the Navy and industry
are very focused on the cost target and that
industry is rewarded for beating the target
and penalized for exceeding the cost
target. Further, we are shifting greater
portions of fee to be awarded on an
incentive basis upon accomplishment of
critical path tasks. Finally, we are
weighting fee towards the critical events at
the end of a program that result in the
desired goal - delivery of ships and
weapons.
Evolutionary acquisition techniques show
promise in programs such as DDX and LCS. We
are seeking to strictly control requirements
at each evolution or spiral in order to
avoid program churn and associated cost
growth. Program risk, and cost, can be most
effectively managed by properly timing the
development and introduction of new
technologies at specific points in the
development and production process. The
extension of this step to production
programs means carefully limiting changes
during the carefully planned production
process. We have imposed a strict
discipline on ourselves that limits change
during the critical phases of our major
shipbuilding programs to stop the growth in
prior year completion bills. By controlling
the scope and timing of change in a planned
manner, we know what changes will cost and
how we will install them in the most
economical manner.
The Department is working with industry as a
partner across the full breadth of our
shipbuilding programs. Industry can help us
identify the best technologies and business
practices for Department of the Navy
programs. Such partnerships have been
critical to negotiation of the new DDG
multi-year contract, to completion of the
DDG/LPD swap, and to formation of the DDX
Team. For example, the tri-partite
agreement between Navy, General Dynamics and
Northrop Grumman stabilized both our DDG 51
and LPD 17 programs, avoided a "second lead
ship" challenge for the LPD program,
dramatically reduced risk and provided cost
savings on the LPD program, and enhanced
stability and competitiveness in destroyer
construction. Furthermore, the swap
agreement created a rare opportunity to
build LPD-18 and LPD-19 as twin ships,
providing the additional benefits of near
term cost savings and the longer-term
benefit of having two ships with one
configuration. This idea was adapted and
applied to the carrier program by taking
steps to share planning efforts and combine
purchasing power on the CVN 70 complex
overhaul and the CVN 77 new construction.
The Department also is actively improving
its internal business practices, including
integrating commercial best practices where
feasible. By improving these practices, we
expect to be able to shift more dollars into
combat capability and quality of service.
We believe that better information makes for
better decision making, both on the
battlefield and at the budget table. We
have four pilot programs in place utilizing
enterprise resource planning, or ERP, which
aim to improve the quality of information
available to our decision makers. These
pilot projects will eliminate dozens of
incompatible computer databases and the
business processes that once supported those
databases. ERP should produce financial and
managerial information that is more
complete, accurate and timely. ERP will
allow greater efficiency in our ship
maintenance processes that should in turn
deliver more ship availability for training
or deployment. Our recent focus has been on
converging the pilot programs to achieve
even greater synergy of management
information across a broader spectrum of the
Department, and working with the DoD
Comptroller to ensure these efforts are
advancing the uniform business management
architecture under development.
In
addition to better information, we need
flexible and innovative tools to help manage
the Department. Some of these tools, such
as strategic sourcing, are being used
already. Furthermore, competition helps
achieve the best quality support to the
Sailor and Marine at the lowest possible
cost by introducing the discipline of the
marketplace. Another approach we are taking
to improve logistics support to the
warfighter and reduce total life cycle
system costs is through Performance Based
Logistics (PBL). This year, all ACAT I & II
fielded programs and all new programs
submitted PBL implementation plans with
milestones. PBL has been successfully
implemented on numerous weapon system
components (improving capability and
lowering costs) and the intention is to
expand these successes to major weapon
systems and subsystems. We are also
continuing to pursue Depot Maintenance
Partnerships between the private and public
sector. These partnerships provide
increased capability to our depots while
simultaneously reducing cost and improving
warfighter capability.
We are
working hard to ensure that our Sailors and
Marines get needed technology in their hands
today, not tomorrow. In areas ranging from
Forward Looking Infrared upgrades for Marine
Corps tanks, to ISR tools, to active
anti-air warfare missiles, we are seeking
greater jointness and taking advantage of
prior DoD investments in order to reduce
risk, lower cost, accelerate delivery, and
provide greater interoperability.
FOCUSING ON
OUR PEOPLE AND ORGANIZATION
To enable development of new capabilities
and facilitate the adoption of new business
practices, a number of organizational
changes have been made. Because of the
importance of opening the computing
architectures and sharing combat system
development across all ship platforms, we
established a Deputy Assistant Secretary and
a Program Executive Officer for Integrated
Warfare Systems.
We also reorganized our business process
owners by combining the Director of
Acquisition and Business Management with the
Acquisition Reform Office into a single
Deputy for Acquisition Management. This
new office focuses on business policy and
implementation and infuses it with the
innovative thinking and ideas of the office
dedicated to reforming the way we do
business. One of the primary goals of this
reorganization is to shorten the time it
takes new ideas to find their way into our
acquisition business practices. The Deputy
for Acquisition Management is directly
supporting the DoD effort to streamline the
OSD policy and processes for major weapon
systems embodied in the new DoD 5000 series
directives.
In order
to improve logistics support to the
warfighter, we established a Deputy for
Logistics. The Logistics office will
coordinate efforts to insert logistics
considerations early in the acquisition
process where over 60% of the total life
cycle costs are determined. Equally
important, logistical support of our current
systems is a costly and complex part of
today's acquisition management task.
Finally, the Deputy for Logistics will play
an important role in guiding the
implementation of ERP across the Department.
In
today's environment, many technologies and
systems cut across program, platform and
Systems Command boundaries. To leverage the
expertise within our Systems Commands and
ensure consideration and coordination of
concepts that cross program boundaries, we
created a virtual Systems Command. The
Systems Command Commanders will now work
together to avoid duplication of capability
and ensure that we achieve integration and
interoperability benefits wherever possible
within the Navy and Marine Corps.
Equally important, we are reshaping the
acquisition workforce to concentrate on
mission critical functions. These human
resource plans call for an analysis of key
characteristics of the acquisition
workforce, an assessment and projection of
changes in the workforce into 2008, and the
identification of human resource process
shortfalls that inhibit the ability to
effectively manage this workforce. With
the advent of civilian personnel
"demonstration" programs with pay banding
and the increase in outsourcing of
commercial functions, we are seeing an
emerging workforce that will be compensated
based on their level of responsibility and
contribution. Through enhancements to our
career development program, which include
continuous learning activities that augment
minimum education, training, and experience
requirements, we are developing our
acquisition professionals to be better
managers and leaders.
INTERNATIONAL COOPERATION
Cooperation with our allies remains a
continued objective from which we can
leverage our Navy funds and accrue
interoperability and coalition warfighting
capability. Program such as Evolved
Seasparrow Missile, which is being developed
in cooperation with nine of our partners, is
proof that cooperation works as demonstrated
by recent successful firings. The Rolling
Airframe Missile program is a further
testament that cooperation has substantive
benefits. We have also continued to
cooperate with Japan on technology to
enhance our SM 3 missile and reduce
development risk and cost. We are
continuing our strong ties with the UK in a
number of areas. Efforts are also underway
to expand our cooperation into area and
theater missile defense through the eight
Navy Maritime Theater Missile Defense
Forums. Each of these cooperative
initiatives is aimed at reducing our costs,
increasing interoperability and achieving
enhanced coalition warfighting capability.
SHIPBUILDING
PROGRAMS
Our FY 2004 budget request calls for
construction of seven ships in FY 2004:
three DDG 51 Class destroyers; one VIRGINIA
Class submarine; one SAN ANTONIO (LPD 17)
Class Amphibious Transport Dock ship; two
LEWIS & CLARK (T-AKE) Auxiliary Cargo &
Ammunition ships; and incremental funding
for the FY 2002 LHD 8, resulting in 34 ships
under contract. The FY 2004 budget request
represents an increase of two ships over the
five ships indicated in last year's budget
request. In addition, we have requested
funding for advance procurement of the
seventh and eighth VIRGINIA Class
submarines, for advance procurement of CVN
21 and the CVN 70 refueling complex overhaul
(RCOH), the first TICONDEROGA Class cruiser
conversion and for service life extension
modifications of three Landing Craft Air
Cushion (LCAC) craft. The budget request
fully commits the Navy to the conversion of
four OHIO Class SSBNs into SSGNs.
Completion of
Prior Year Shipbuilding Contracts
Growth on ship construction contracts has
eroded the confidence of the DoD and
Congress in our estimating, budgeting, and
execution process for current and future
procurements. The Navy is committed to
restoring the confidence of Congress and
building stable programs to ensure force
structure requirements are sustained.
The Congress provided over
$700 million in FY 2002 and almost $1.3
billion in FY 2003 to address cost growth
for ships contracted in 1996 - 2001. The FY
2004 budget request reflects $636 million to
address similar shortfalls in order to
deliver ships authorized and appropriated in
1996 - 2001. Also visible in the Navy's
budget request are the known requirements
through the FYDP to address similar issues
for ships appropriated through 2002.
The Department has taken a
number of management actions to mitigate the
existing condition and to prevent a
reoccurrence of the situation for ships
requested in FY 2004 and future budget
submissions. To prevent further increases
to the Prior Year Cost to Complete funding
shortfall, the Navy has instituted the
following corrective actions:
-
In FY 2003 and beyond,
shipbuilding programs have been budgeted
to independent cost estimates prepared by
the Cost Analysis Improvement Group or
independent Navy estimate.
-
Change order budgeting
levels have been established to reflect
maturity of respective programs.
-
Shipbuilding and Government
Furnished Equipment program managers have
been directed to limit changes to critical
safety issues.
-
The Department has
reestablished a senior level ship
configuration panel to ensure required
changes are validated and fully funded.
-
We motivated industry cost
performance through incentives in FY 2002
and 2003 contracts.
-
Prior decisions regarding
workload splits among multiple yards have
been reevaluated in light of the increased
cost of having multiple "lead" ships.
-
We are implementing more
aggressive share lines and positive
incentive strategies in new ship
construction contracts in a further effort
to establish realistic targets and to
motivate industry management and
performance.
The swap of DDG 51 and LPD 17 between
General Dynamics and Northrop Grumman will
also alleviate the potential for significant
new prior year bills and allow the
construction of the individual ship classes
in the most efficient manner. We will
continue to pursue innovative business
approaches like this to reduce the risk of
future Prior Year Cost to Complete bills.
Surface
Combatants
ARLEIGH BURKE
(DDG 51) Class Destroyer
The FY 2004 budget request includes $3.198
billion for the procurement of three ARLEIGH
BURKE Class (DDG 51) destroyers of a 10 ship
MYP. The additional DDGs in FY 2004 and FY
2005 facilitate the innovative DDG/LPD swap
agreement and increase force structure
capability. The new four year, 10 ship, FY
2002 through 2005, MYP contract awarded last
year has cemented the DDG procurement
profile and sustains our industry partners
as we work toward the transition to DD(X)
production.
DDX Destroyer
The Navy competitively awarded the DDX
design agent and technology development
contract in April 2002. The winning
contractor has organized a National Team of
industry experts to achieve the most
innovative and cost-effective solutions for
development of the DDX through spiral
development of technology and engineering,
with promising systems being employed on
existing platforms and other future ship
classes. The Department will link the
development of the DDX combat system to the
opening of computer architectures in our
DDG's, CGs, LPDs, and CVNs. This is a
critical step for the Department and
represents an effort to leverage every
dollar the Congress provides. Applying new
design - build concepts to DDX is critical
to improving the construction process for
destroyers. The DDX design will reduce
manpower requirements. The ship will
capitalize on electric drive and electrical
distribution systems to simplify ship
operations, reduce maintenance, and enable
future upgrades including directed energy
weapons. The ship will be designed with
reduced signature to provide the
survivability necessary in the future combat
environment. These and other features will
provide more affordable future ship classes
in terms of both construction and operation.
Littoral
Combat Ship (LCS)
The LCS
will be a networked, agile, stealthy surface
combatant designed to counter asymmetric
littoral threats such as diesel submarines,
shallow water mines, and small boats through
organic manned and unmanned vehicles and as
part of a network centric battle force. The
LCS was granted new start authority in the
FY 2003 Authorization Act and initial
program funds were appropriated by the
Congress. The FY 2004 budget request
includes $158M for LCS platform and mission
system development. The LCS spiral
development acquisition strategy will
support construction of multiple flights of
focused mission ships with progressive
capability improvements. Flight 0 is
comprised of one ship planned for
authorization in FY 2005 (currently budgeted
in RDT&E) and one ship planned for
authorization in FY 2006 (currently budgeted
in SCN). Flight 0 will develop and
demonstrate a modular hull design with
performance attributes needed for new
operational concepts in the littoral. The
solicitation for preliminary design of LCS
Flight 0 was released in February 2003.
TICONDEROGA
(CG 47) Cruiser Conversion Plan
The FY
2004 budget request includes $194 million
for systems that will add new mission
capabilities and extend the combat system
service life of the TICONDEROGA (CG 47)
Class. The upgrade of these ships will add
new, and enhance existing, combat system
capabilities for land attack, CEC, and Area
Air Defense Commander missions to improve
compatibility in joint and coalition warfare
environments.
AIRCRAFT
CARRIERS
NIMITZ Class
In May
2003, we will commission USS RONALD REAGAN (CVN
76), the ninth of the NIMITZ Class of
aircraft carriers. Also in 2003, we will
lay the keel of the tenth, and last, ship in
the NIMTZ Class. That ship, recently named
the GEORGE H. W. BUSH (CVN 77), is scheduled
for delivery in 2008.
AMPHIBIOUS SHIPS and CRAFT
LPD 17
The LPD 17 SAN ANTONIO Class
of amphibious transport dock ships
represents a critical element of the Navy
and Marine Corps future in expeditionary
warfare. The 12 ships of the SAN ANTONIO
Class will functionally replace four classes
of amphibious ships. The FY 2004
budget request includes $1.2 billion to
fully fund the construction of the sixth
ship of the Class. Five additional LPD 17s
are included in the FYDP, with the final
ship of the 12 ship Class planned beyond the
FYDP. Current metrics indicate the LPD 17
program team is now performing in a
predictable and disciplined manner.
Detail design of the lead ship is completing
and fabrication has started on over
two-thirds of the lead ship construction
units. LPD 18 construction began in
February 2002 and LPD 19 construction
commenced last summer. We plan to award the
contract for LPD 21 (USS NEW YORK) later
this year to honor the victims of the World
Trade Center attack.
LHD 8
In
accordance with Congressional direction to
incrementally fund LHD 8, the FY 2004 budget
requests $355M for continued detailed design
and construction. LHD 8 will be the first
big deck amphibious ship that will be
powered by gas turbine propulsion and all of
its auxiliary systems will rely on
electricity, rather than steam. This change
is expected to realize significant lifecycle
cost savings.
LHA(R)
The FY
2004 budget requests $65M in R&D for LHA(R),
a spiral development variant of the LHD 8
known as the Plug Plus, which provides a
longer and wider platform capable of
increased vehicle lift, better
survivability, and a suitable weight
margin. This funding supports ship design
development, live fire testing activities,
and other risk mitigation efforts leading to
a planned ship construction award in FY
2007.
Auxiliary Dry
Cargo Ammunition Ship (T-AKE)
The FY 2004 budget request
includes $722 million for the fifth and
sixth ships of this 12 ship T-AKE Class.
Last summer the initial critical design
review was conducted for the Class design,
and construction of the lead ship is
expected to commence this fall. Lead ship
delivery is scheduled in FY 2005.
Landing Craft
Air Cushion (LCAC)
Our fleet LCACs saw dramatically increased
operational tempo supporting worldwide
operations during the past year,
underscoring the need for the LCAC Service
Life Extension Program (SLEP). The program,
designed to extend the service life of LCACs
to 30 years, had several notable
accomplishments during the past year
including:
-
"On schedule-on budget"
delivery of LCAC 44, the first SLEP craft;
-
Excellent production
progress on the FY 2000 and 2001 SLEP
craft with delivery scheduled before the
end of 2003; and
-
Contract award for the FY
2002 and 2003 SLEP craft.
The FY 2004
budget requests $73 million SCN for three
additional LCAC SLEPs.
SUBMARINE
PROGRAMS
VIRGINIA (SSN
774) Class Attack Submarines
With
current construction progressing as
scheduled, the FY 2004 budget request
includes $2.5 billion for the sixth ship and
advance procurement for the seventh and
eighth ships of the VIRGINIA Class.
Further, the budget requests permission to
enter into a multi-year contract to provide
program stability and enable substantial
cost savings. Approximately $400 million in
FY 2004 for Economic Order Quantity advance
procurement in support of a
seven-ship, FY 2004 - 2008 MYP is
included in the budget request. The
VIRGINIA Class detailed design is complete.
The lead ship, the USS VIRGINIA, is over 80%
complete and early construction has
validated the effectiveness of the design -
build concept. Negotiations are underway on
the FY 2003 Block Buy contract and the Navy
is reviewing strategies to optimize the
planned MYP.
SSGN
The FY 2004 budget request
includes over
$1.2 billion in Procurement and R&D for the
conversion efforts of the first two
OHIO Class submarines, funding for the
Engineered Refueling Overhaul (ERO) of the
third submarine, and advanced planning for
the fourth and final ERO and conversion
planned to begin in FY 2005.
When completed, these
submarines will provide transformational
warfighting capability carrying up to 154
Tomahawk cruise missiles, support sustained
deployed special operating forces, and
sustain our submarine force structure.
The FY
2004 budget request also funds attack
weapons system procurement. Recently USS
FLORIDA successfully launched two
Tomahawk missiles from a Multiple
All-Up-Round Canister in a demonstration and
validation (DEMVAL) test. The DEMVAL test
confirmed that the conversion of SSBNs to
SSGNs will work as envisioned with the
ability to carry Tomahawk cruise missiles
and support deployed special operating
forces. Lastly, we
are exploring opportunities for
public-private partnering in this program.
The USS OHIO recently entered Puget Sound
Naval Shipyard and began its refueling
overhaul, the first step towards SSGN
capability. The acquisition team has
developed a creative plan to accelerate
delivery of SSGNs while working to stagger
the conversions to allow key workers and
managers to apply lessons learned to each
sequential submarine. The assistance of
Congress was critical to the signing of the
SSGN design contract in September
2002.
PRECISION
MUNITIONS
Tactical
Tomahawk
Tactical Tomahawk missile begins full rate
production in FY 2004. Tactical Tomahawk
significantly improves performance through
an improved warhead, fuzing, and navigation
improvements. This is accomplished at
almost half the cost by using innovative
manufacturing and production techniques.
The Tactical Tomahawk completed successful
developmental test shots from a simulated
ground launcher in August 2002 and an
underwater launcher in December 2002. The
program subsequently awarded a Low Rate
Initial Production (LRIP) Contract in
October 2002, and exercised an option for
additional missiles in January 2003, for a
total of 192 missiles. The FY 2004 budget
requests authority for a FY 2004 - FY 2008
MYP.
MINE WARFARE
PROGRAMS
Organic
Airborne Mine Countermeasures
The FY 2004 President's Budget requests
funding for a variety of airborne mine
countermeasure systems that will be employed
by the MH-60S helicopter as an organic
capability. Specific systems are:
-
AN/AQS-20A Advanced Mine
hunting Sonar and the Airborne Mine
Neutralization System (AMNS) are being
developed to counter deeper moored mines
and visible bottom mines. The Department
is requesting $17.2 million for the
AN/AQS-20A to continue system
developmental testing and $14.5 million to
continue development through critical
design reviews on the AMNS.
-
The Airborne Laser Mine
Detection System (AN/AES-1) and the Rapid
Airborne Mine Clearance System (AN/AWS-2)
are being developed to counter near
surface and floating mines. The
Department is requesting $21.9 million to
complete developmental testing and award
two AN/AES-1 LRIP units. The budget also
requests $31.2 million to complete
critical design review and begin
developmental testing of AN/AWS-2.
-
The Organic Airborne and
Surface Influence Sweep (OASIS) will
counter influence mines not found using
hunting systems. The Navy is requesting
$14.8 million for completion of critical
design review and commencement of
development testing.
Long-term
Mine Reconnaissance System (LMRS)
The budget request of $56.5 million will
continue LMRS baseline development through
developmental test and preparation for
operational testing. The LMRS program also
incorporates development of a Mission
Reconfigurable Unmanned Undersea Vehicle (MRUUV).
Remote Mine
hunting System
The Remote Mine hunting System (RMS) is
being developed as an unmanned
semi-submersible vehicle to deploy from
surface combatants and operate remotely
over-the-horizon. This new organic mine
hunting capability is to be integrated into
DDG 51 Flight IIA (Hull 91-96) ships and is
being considered for LCS. The Department
requested $55.5 million to complete critical
design and continue fabrication of
Engineering Development Models and to
conduct technical evaluation in preparation
for operational evaluation in FY 2005.
INTEGRATED
WARFARE SYSTEMS PROGRAMS
Open Architecture Concepts
The Navy
intends to implement open architecture
concepts into its future ships and current
and future combat systems using commercially
available, widely accepted interface
standards to bring commercial products from
multiple vendors to bear on mission-critical
systems. The Navy efforts will include
leveraging the Hiper-D open architecture
effort into the DDX total ship computing
environment and into all future ship and
submarine system developments. The Navy is
integrating the command and control and
combat systems information flow using open
specifications and standards and open
architecture constructs, in order to
participate in FORCEnet and other global
information networks.
FORCEnet
Through the FORCEnet concept, the Navy is
transforming future and existing assets to a
joint, netted, distributed and forward
stationed force. It will bring an expanded
"toolbox" of capabilities to the joint
warfare commander as the Navy participates
more and more in integrated joint
operations. Network centric operations will
be the foundation of our transformation to
the force of the future and the key enabler
in network centric operations will be the
FORCEnet concept. FORCEnet is not a system;
rather it is the architecture by which we
will integrate our sensors, networks,
decision aids, weapons and warfighters into
an adaptive human centered maritime system.
FORCEnet will allow the Navy, as a part of
an integral joint force, to leverage legacy
and developing capabilities to achieve
dominance across the full spectrum of
warfare missions.
Ship Self
Defense (SSD)
Ship
self defense is provided by weapon systems
and equipment related to multiple primary
warfare areas; Anti Ship Cruise Missile
Defense, Surface Warfare, Undersea Warfare,
Electronic Warfare, Anti Terrorism/Force
Protection, Mine Warfare and Command &
Control. Currently fielded systems allow
ships to defend against today's threats,
while new systems and improvements to
existing systems are being developed and
procured to meet the future stressing
threats. The Ship Self Defense System (SSDS)
forms the centerpiece of future combat
systems for aircraft carriers and amphibious
ships, enabling them to pace the
increasingly lethal threat. SSDS is the
integrator for the individual detection and
engagement elements of the combat system.
An open architecture system with automated
weapons control doctrine, SSDS also
integrates with the Cooperative Engagement
Capability (CEC) and the Tactical Data
Links. Last year, the Navy conducted
rigorous land based testing on SSDS Mk 2 Mod
0 at the Surface Combat System Center,
Wallops Island, in preparation for the USS
NIMTZ battle group. In May 2002, land based
testing was transitioned to at sea testing
for the NIMITZ and the Wallops Island
facility started to focus on SSDS Mk 2 Mod 1
testing for the USS RONALD REAGAN. After
REAGAN, Wallops will focus on SSDS Mk 2 Mod
2 for "first of class" testing for LPD 17
bringing a revolutionary combat capability
to the amphibious Fleet. The FY 2004
budget includes $94 million for the SSDS.
In
addition, we continue to invest in upgrading
the detect and engage portions of Ship Self
Defense programs. The Surface Electronic
Warfare Improvement Program (SEWIP) is a
spiral development effort initiated to
provide a robust, full spectrum electronic
warfare system following cancellation of the
Advanced Integrated Electronic Warfare
System. SEWIP will build on the legacy
SLQ-32 system to field capabilities against
next-generation threats. FY2004 Budget
includes $53 million for the development of
Block 1 electronic warfare improvement. The
FY 2004 President's Budget request includes
$41 million WPN for the Close-In Weapons
System (CIWS) that funds procurement,
engineering support and installation of
Block 1B for eight ORDALT kits and
upgrades. The eight ORDALT kits and
upgrades will be combined with kits already
on-hand for installation on 13 ships. FY
2004 Rolling Airframe Missile (RAM) funding
is $48 million WPN for Block 1 ORDALT Kits,
Block 1 Guidance and Control section
procurements, and 90 missiles. FY 2004 RAM
installations will be on five ships.
Finally the Evolved Sea Sparrow Missile has
just completed successful Developmental
Testing on the Self Defense Test Ship and
remains on schedule for OPEVAL in April
aboard the USS SHOUP. The FY 2004 budget
includes $113M WPN for procurement of 105
missiles, production engineering and
performance characterization.
Extended Range Active Missile (ERAM)
Despite the cancellation of the Standard
Missile 2 (SM 2) Block IVA in December 2001,
the Navy has an existing extended range (ER)
AAW mission requirement as defined in the
2002 Navy Transformational Roadmap. A
robust ER AAW missile with engage-on-remote
capability against overland cruise missiles
is key to achieving this requirement,
providing flexible firepower throughout the
battle space utilizing a variety of
targeting platforms. The Navy's approach to
this mission is the ERAM, which uses a SM 2
Block IV propulsion stack with an active
AMRAAM seeker to provide enhanced
capabilities. The ERAM approach is a low
risk, non-developmental item approach and
supports an FY 2010 Initial Operational
Capability. The FY 2004 budget includes $35
million for ERAM development.
Sea-based
Terminal Missile Defense
The Navy sees a unique requirement for
sea-based, terminal ballistic missile
defense capabilities. The Department of
Defense has tasked the Navy in conjunction
with Missile Defense Agency (MDA), to study
the requirement of a sea-based, terminal
missile defense. The Navy acquisition team
has identified at least two options for
providing a Sea-Based Terminal Missile
Defense:
-
Spirally evolve the ERAM
missile to incorporate TBM fuzing and
lethality improvements; or
-
Evaluate the potential for
the extended range PAC-3, known as
Pegasus, to integrate with Navy ship
systems.
The recommended approach will depend on the
specific threat and performance requirements
defined, operational need date and funding
environment.
Midcourse
Missile Defense
The Navy-MDA team executed three consecutive
successful missile intercepts utilizing the
Aegis Element of the Ballistic Missile
Defense System culminating in the
groundbreaking milestone of a ship-launched
missile intercepting a target missile during
its ascent phase. The Aegis BMD element
also successfully met all objectives in two
ground based missile defense tests in late
2002.
Standard
Missile
The FY
2004 budget request for $148.3M will procure
75 SM 2 Block IIIB missiles. The budget
request will extend missile procurement of
the remaining 942 missiles through FY 2013
vice FY 2008.
Joint Fires Network (JFN)
A further step forward in Network-Centric
Warfare and one of the Navy's
transformational initiatives is the Joint
Fires Network (JFN). The FY 2004 budget
includes $159 million for JFN. It is the
interface of the intelligence/surveillance/
reconnaissance, target, and command and
control capabilities of three existing
stand-alone systems: Joint Services Imagery
Processing System-Navy; Global Command and
Control System - Maritime; and Tactical
Exploitation System - Navy. The JFN is not
a traditional program. The virtual program
office works to eliminate duplication and
retain complementary elements each has to
offer. In addition, the team that validated
the JFN AOA has continued to support the JFN
engineering team in its spiral development
efforts to interface and converge the
various functions of the three programs.
JFN will serve as a building block for the
Navy's more extensive FORCEnet concept and
is being fielded as part of the Department's
emergency wartime response to get critical
capability to the warfighter quickly.
Cooperative
Engagement Capability (CEC)
The FY 2004 budget request includes
$160 million for CEC. CEC provides a
significant step forward in transforming our
situational awareness of the battle space.
CEC's successful completion of OPEVAL allows
implementation of this capability within the
fleet and is a major step in developing a
network-centric force. This
transformational program allows one ship to
shoot a weapon at a generated target based
on another ship's firing solution for the
first time in Naval history. CEC is being
integrated into our E-2C aircraft and Follow
on Test and Evaluation of this added
capability is ongoing. CEC is moving
forward with a solicitation this summer to
compete a next generation design that will
be smaller, more affordable, and more
bandwidth efficient while providing
significantly higher performance and
potentially supporting joint service use.
SUMMARY
The Navy
acquisition team has taken many positive
steps during the past year. From moving
forward with the SSGN design contract to
initiating the LCS program, the support and
direction of the Congress has been essential
to our progress. I am most grateful for the
assistance of this Committee for all of the
Department of the Navy's efforts.
I would
report to you today that the shipbuilding
program and associated industrial base is on
the verge of being stabilized, a key
remaining facet of this is the proposed
VIRGINIA Class submarine multi-year. The
Department will have a chance to manage
these programs and control cost going
forward. This core shipbuilding program can
be built upon in the future to continue the
recapitalization of the Navy fleet. Through
the use of innovative acquisition
initiatives, our nation will have a healthy
shipbuilding industrial base and an
efficient and an appropriately sized
infrastructure to support an optimal force
structure.
In the
end, the ship fleet is a tool of our Sailors
and Marines. Today, the Navy and Marine
Corps have used all of the ships in that
fleet to fullest degree possible, putting
combat capability exactly where the nation
needs it as part of the Joint Force. Naval
forces are also forward deployed, providing
clear presence and protecting the United
States' strategic interests. We have the
finest Naval Force in the world. With your
assistance, we will continue to improve
every aspect of our business to provide the
maximum capability for our Sailors and
Marines and the maximum security for
America.
