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[H.A.S.C. No. 109–8]









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MARCH 3, 2005




CURT WELDON, Pennsylvania, Chairman
HOWARD P. ''BUCK'' McKEON, California
KEN CALVERT, California
JEB BRADLEY, New Hampshire
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WALTER B. JONES, North Carolina
JIM RYUN, Kansas
W. TODD AKIN, Missouri
JOE WILSON, South Carolina
BILL SHUSTER, Pennsylvania

JOHN SPRATT, South Carolina
LANE EVANS, Illinois
ADAM SMITH, Washington
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
JIM COOPER, Tennessee
G.K. BUTTERFIELD, North Carolina
DAN BOREN, Oklahoma

Douglas Roach, Professional Staff Member
Bob Lautrup, Professional Staff Member
JJ Gertler, Professional Staff Member
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John Sullivan, Professional Staff Member
Bill Natter, Professional Staff Member
Jesse Tolleson, Research Assistant




    Thursday, March 3, 2005, Fiscal Year 2006 National Defense Authorization Act—The Department of the Navy and Department of the Air Force Aviation Acquisition Programs and Future Technology Initiatives


    Thursday, March 3, 2005



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    Abercrombie, Hon. Neil, a Representative from Hawaii, Ranking Member, Subcommittee on Tactical Air and Land Forces

    Weldon, Hon. Curt, a Representative from Pennsylvania, Chairman, Subcommittee on Tactical Air and Land Forces


    Li, Allen, Director for Acquisition and Sourcing Management (F/A–22), United States Government Accountability Office

    Sullivan, Mike, Director for Acquisition and Sourcing Management (Joint Strike Fighter), United States Government Accountability Office

    Szemborski, Vice Adm. Stanley, USN, Deputy Director, Program Analysis and Evaluation, Office of the Secretary of Defense; Hon. John J. Young, Jr., Assistant Secretary of the Navy (Research, Development and Acquisition), Department of the Navy; Vice Adm. Joseph A. Sestak, Deputy Chief of Naval Operations for Warfare Requirements and Programs (N6/7), United States Navy; Brig. Gen. Martin Post, Assistant Deputy Commandant for Aviation, United States Marine Corps; Lt. Gen. John D.W. Corley, Principal Deputy, Office of the Assistant Secretary of the Air Force (Acquisition), Department of the Air Force; and Lt. Gen. Ronald E. Keys, Deputy chief of Staff for Air and Space Operations, United States Air Force

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Abercrombie, Hon. Neil
Keys, Lt. Gen. Ronald
Sullivan, Mike, joint with Allen Li
Szemborski, Vice Adm. Stanley
Weldon, Hon. Curt
Young, Hon. John J., Jr., joint with Vice Adm. Joseph A. Sestak, Jr., and Brig. Gen. Martin Post

[There were no Documents submitted.]

[The Questions and Answers can be viewed in the hard copy.]

Mr. Abercrombie
Mr. Bradley
Mr. Everett
Mr. Spratt
Mr. Weldon


House of Representatives,
Committee on Armed Services,
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Tactical Air and Land Forces Subcommittee,
Washington, DC, Thursday, March 3, 2005.

    The subcommittee met, pursuant to call, at 9:12 a.m., in room 2118, Rayburn House Office Building, Hon. Curt Weldon (chairman of the subcommittee) presiding.


    Mr. WELDON. The subcommittee will come to order.

    This morning we will receive testimony from the Government Accountability Office (GAO), the Office of the Secretary of Defense (OSD), Department of the Navy and the Department of the Air Force.

    The subject of today's hearing is ''Navy, Marine Corps and Air Force Aviation Issues for Fiscal Year 2006.''

    This is the first of four subcommittee hearings this year.

    Our tradition in this subcommittee has always been to be mindful of the needs of our war-fighters. So I would ask Members to keep the needs of our military men and women as our first and foremost priority.

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    I apologize for the lack of attendance, but there is a mandatory budget conference meeting going on right now, and a lot of our colleagues are at that meeting. We hope they will join us as soon as it ends—a lot of conflict today.

    We have asked the witnesses to address three primary areas: tactical fighters, including the F/A–22, Joint Strike Fighter (JSF), and F–18E/F; airborne electronic warfare programs and the C–130J program, including the C–130J variant for the Air Force; and the KC–130J variant for the Marine Corps.

    This hearing will be followed by a classified briefing in room 2337, which will further address capabilities of the three fighter programs and the Department's electronics warfare programs.

    As most Members know, since 1996 when I was the Chairman of the Research and Development Subcommittee, I have repeatedly warned that it was unlikely that our nation could afford all three tactical fighter programs as initially planned. Let's see, that was nine years ago. Since that time, development costs for the F/A–22 have increased, and unit production costs for the F/A–22 climbed because planned procurement quantities were reduced.

    Development costs for the Joint Strike Fighter have also increased substantially. And like the F/A–22, planned procurement quantities have been cut.

    Back in 1996, we warned of impending bow waves that would cause major perturbations in those and other programs. It could very well be that this bow wave is breaking over us as we deliberate the fiscal year 2006 budget request. So I do not want anyone to deny the fact that we did not tell you that this was going to occur nine years ago.
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    In late December of 2004, the Deputy Secretary of Defense issued a program budget decision which cuts spending a net total of $30 billion in the future year defense program, 2006 through 2011.

    The fiscal year 2006 portion of that cut is about $6 billion. This decision substantially affects two programs in this subcommittee's jurisdiction: the F/A–22 and the C–130J.

    If the F–22 cut is endorsed by the Congress, the budget would remove $10.5 billion in future years defense program and limit F/A–22 procurement to between 165 and 179 aircraft.

    We also note that the Quadrennial Defense Review scheduled for publication this fall will include an assessment of joint air dominance, including the contributions of all types of tactical aircraft that could conduct joint air dominance missions.

    The proposed budget would also have a significant effect on the number of C–130J aircraft being procured for the Air Force and KC–130J aircraft being procured for the Marine Corps since it would remove about $5 billion in future years defense program and terminate—and this is important—a six-year, multiyear contract after the fourth year.

    I wonder what that is going to cost the taxpayers of this country?

    Termination of a multiyear contract for a major weapon system for the convenience of the government would be unprecedented.
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    If this decision is sustained in the congressional budget process, only 53 of the Air Force's planned 168 C–130Js would be procured, and only 33 of the Marine Corps requirement for 51 aircraft would be met.

    Government estimates of termination costs and other costs are very preliminary. But indications are that costs could be substantial.

    And we plan to be here when those costs are incurred. Many people in the current Administration are not going to be here. We will be here. So we are here to ask the tough questions.

    These costs include: cancellation ceiling costs, equitable adjustment costs to reflect fewer aircraft than planned, F/A–22 overhead cost increases, an increased cost to procure the 12 KC–130Js in fiscal year 2006.

    The aggregate of these unplanned for and unbudgeted costs could exceed $2 billion—and I want my colleagues to understand that: $2 billion. That is unacceptable. It is outrageous. And the Department of Defense and OSD is going to be called to answer for that publicly in this subcommittee and this committee this year.

    These costs do not include the prospect that increased force structure costs could be required to modernize older C–130 fleets in the Air Force and the Marine Corps to meet force structure requirements.

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    On February 16th, before our full committee, Secretary Rumsfeld said, ''In the past the Department's budget process for procurement has too often resembled a shopping list for traditional bureaucratic economic and political constituencies rather than a rational strategy to meet real and likely threats. And instead of assessing actual capabilities, many tended to measure military strength simply by counting the number of pieces of hardware or number of troops. In the 21st century, we must measure capability as well as quantity.''

    We understand that it is actual capabilities, not merely numbers, that really count. But we also understand that these capabilities must be properly budgeted for and prioritized so that the most effective capabilities are provided to our troops on tomorrow's battlefields.

    In today's hearing and subsequent classified briefing, we want to understand the F/A–22 decision in the context of all the actual tactical fighter and electronic warfare capabilities being planned, as well as understand how the department would address tactical airlift capabilities if the C–130J program were terminated.

    To speak to these subjects, we have assembled two panels. Our first panel will be the Government Accountability Office witness who will report the results of their review of the F/A–22 and Joint Strike Fighter programs. They are Mr. Michael Sullivan and Mr. Allen Li, both who are directors for acquisition and sourcing management and outstanding public servants.

    Our second panel will be six military witnesses who are Vice Admiral Stanley Szemborski, U.S. Navy, Deputy Director of Program Analysis and Evaluation, Office of the Secretary of Defense; Mr. John Young, Assistant Secretary of the Navy, Research, Development and Acquisition; Vice Admiral Joseph Sestak, Navy, Deputy Chief of Naval Operations for Warfare Requirements and Programs, N–6/7; Brigadier General Martin Post from the Marine Corps, Assistant Deputy Commandant for Aviation; Lieutenant General Ron Keys, Air Force, Deputy Chief of Staff for Air and Space Operations; and finally, Lieutenant General John Corley, Air Force, Principal Deputy, Office of the Assistant Secretary of the Air Force for Acquisition.
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    Before we begin, if you have sensed some frustration in my voice it is because it is filled with frustration. Nine years ago we said we would be here. Well, we are here. And OSD gives us numbers that are absolutely outrageously unrealistic. And we are not going to sit here and just let those numbers roll by, because we have to deal with that from the structured standpoint of coming up with an authorization bill this year.

    I would like to call on my good friend for his comments, the Ranking Democrat of the subcommittee, Mr. Abercrombie, for any remarks he would like to make.

    [The prepared statement of Mr. Weldon can be viewed in the hard copy.]


    Mr. ABERCROMBIE. Thank you very much, Mr. Chairman.

    As you know, ordinarily I don't make a lengthy statement at this point, usually because you already have. [Laughter.]

    And usually because I am in agreement with what you are saying and the direction you are going.

    However, today I feel the need to supplement, if you will, or complement what you are saying. And with your indulgence I would like to read my statement into the record to make sure that everybody understands, who is coming before us, that this subcommittee is deadly serious about the issues that you have raised and that I think I can say, not necessarily on your behalf but with respect to the direction that you are taking this committee, that we intend to make certain that the appropriators know as well what we are talking about and where we are going. And if that means to sit down face to face with the appropriators, that is what we are going to be doing.
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    Mr. WELDON. Would the gentleman yield?


    Mr. WELDON. The gentleman is absolutely correct, I should have mentioned that. In this new reorganization of our Appropriation Committee process, we have played a very active role—in fact, I sit on the steering committee that helped resolve that crisis for the Republican conference. We have met with both Jerry Lewis and with Bill Young, who are in very close contact with Jack Murtha, and what we do in this committee will be very closely mirrored and in cooperation with the Appropriation Committee.

    And I can tell you, I do not speak for them and neither does my good friend, but they share the same frustration that we share with these numbers that we have been given preliminarily.

    I thank my colleague for yielding.

    Mr. ABERCROMBIE. Thank you, Mr. Chairman.

    Whenever military technology changes, there is an adjustment period where military organizations try to figure out how to exactly use the new technologies available, and we are in that kind of period today.

    Parenthetically, Mr. Chairman, I want to say at that point of my remarks that I, too, was here nine years ago when we discussed these issues at that time, and I agree entirely with you that we are now where we thought we might be, unfortunately, today.
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    For example, we have a lot of UAVs today, but we cannot use them as much as we want to because we are still figuring out how to manage the bandwidth to support them.

    Another challenge is figuring out how to afford new systems, which frequently cost two or three times as much as the old ones.

    What is the tradeoff between smaller numbers and more capable aircraft?

    The budget before us reflects two military services struggling with these issues, and there are some tough choices in this budget.

    I have several main concerns that I hope today's hearing touches on.

    First, there is a big-picture concern that we are starting to create a silver bullet Air Force with a small number of extremely expensive airplanes. One problem with a silver bullet force is that they are so precious to us that they may not be usable for many missions because the risk of losing them is so high. Today's B–2 fleet of just 21 planes is a good example.

    A second broad concern I have is that I think we may be creating an Air Force and a Navy designed to fight today's wars in Iraq and Afghanistan and not tomorrow's wars somewhere else.

    It is always a temptation to take current situations and extrapolate from them in a linear way, but we need to be careful about doing that.
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    Another concern I have is with the cuts in the budget in the future C–130 fleet. The reason for this concern is that the Army has based its entire plan of its future force on the assumption that large numbers of C–130's will be available.

    Let me get more specific, Mr. Chairman, with a specific point that I intend to elaborate in the context that you have established.

    What stands out most in the budget for tactical aviation is the Program Budget Decision 753, PBD–753. By cutting two big tactical aviation programs, PBD–753 shows that the Department of Defense (DOD) is finally paying attention to the tradeoffs that must be made in the defense budget.

    In an era of exploding deficits, DOD must make hard choices. I understand that. In tactical aviation, DOD has to decide whether it is the fighter acquisition programs with airlift and all of its other aviation requirements. That is what has to be decided.

    Seven-fifty-three (753) is a textbook case on how not to decide these issues. Seven-fifty-three does not attempt to balance the capabilities of the F/A–22 versus the F–35 or the C–130J versus the C–130 rebuild program.

    Instead, 753 cuts two major programs, apparently in order to generate funding for Army modularity with no analysis of the impacts of these cuts.

    Seven-fifty-three breaks a multiyear procurement completed with no analysis on termination liability costs.
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    DOD does not know how it intends to fill the Marine Corps requirement for 51 aerial refueling tanker aircraft, nor how much it will cost.

    DOD does not know how to modernize the Air Force's C–130 fleet, which is one of the oldest average ages in the inventory, nor the cost to do so.

    Am I making a point here with you, Mr. Chairman?

    Seven-fifty-three (753) also makes the decision to reduce the buy of the F/A–22 from 277 to something less than 180, depending on production costs.

    DOD has given us no analysis of how adequate 180 or fewer F/A–22s will be to meet the foreign threat from the surface to air missiles (SAM), and other adversary aircraft.

    DOD does not know whether F–15Cs will have to be extended to provide the capability that would have been provided by those last F–22s, nor whether the Joint Strike Force might be accelerated to fill this gap, or what those options might cost.

    In short, the budget before us makes big reductions in tactical aviation programs, but we do not know what future bills are being committed to. Congress has been given no supporting analysis or path forward on tactical aviation that will meet our legitimate military requirements at a reasonable cost—which, Mr. Chairman, is our responsibility.

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    The Secretary of Defense has all but admitted that the decision to terminate the C–130J was a mistake. Well, we need to hear in today's hearing is how Department of Defense will make sure that future PBDs have at least some justification that can be presented to the Congress—because that is what our job is; we have to make the presentation—and when and how the Department will seriously address the affordability of its tactical aviation programs.

    Mr. Chairman, I realize that is quite a bit of detail, but I think it follows on the discussions that you and I have had as to the direction we should be going in. And I can assure you that as far as this Member is concerned—and I believe I speak for the majority of the democrats on this side of the chamber—that we are in accord on this direction that you are setting.

    Mr. WELDON. I thank the gentleman, and I appreciate him reading the prepared statement, because I think it made some excellent points.

    And I would say to the distinguished gentleman, the reason we are having the classified brief is to exactly answer some of the points that you raised here that we will not get into in the public arena.

    So his points were well made, and the questions that you raised, we will attempt to answer all of them in this hearing.

    Thank you.

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    I would like to now turn to the distinguished Ranking Member of the full committee, someone who spends every available moment of the day working on these issues, the distinguished Ranking Democrat, Ike Skelton.

    Mr. SKELTON. Mr. Chairman, thank you. I compliment you and Mr. Abercrombie, the Ranking Member of the subcommittee, on your statements, on your attitudes.

    Indeed, Neil Abercrombie, you did speak for me. Thank you for your homework on this.

    Mr. Chairman, in looking out at the audience today, I see all the blue suits, Air Force officers. I made a mistake a good number of years ago. In the early days of the F–22, I attended a breakfast where Chief of Staff General Ryan was the speaker, and I made the mistake of asking a disparaging question about the F–22. Subsequent to that, I received four—count them, four—unsolicited briefings on the F–22.

    Mr. Chairman, I feel like I should be one of the witnesses today as opposed to sitting up here listening to the positive views on the F–22.

    It is good to be with you and welcome the witnesses. Thank you for this hearing.

    Mr. WELDON. Thank you, Mr. Skelton, for your outstanding work.

    Again, just for my colleagues, if I sound a little harsh in my opening, it was meant to be, because we are facing a real dilemma here. I mean, I went through this committee when the cancellation of the Comanche program occurred. That program, we had spent $10 billion on and then decided that we did not want to pursue it.
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    We are still reeling from the cancellations back in the early 1990's. They are still in litigation.

    And here we are talking about an unprecedented action that would terminate a multiyear contract that we were basically led into.

    Somebody has to understand that somebody is going to pay the price for this, and we are going to have to come up with that funding unless there are changes made in the way that we are being given numbers and outlooks in terms of defense spending.

    And that is the frustration that I have and that my colleagues have on the other side of the aisle.

    With that, we will turn to our witnesses, Mr. Sullivan and Mr. Li.

    Your statements will be entered in the record. We would ask you to keep your statements as brief as possible.

    But because you do such great work, and we have praised you publicly many times, and we know the tremendous pressure you are under from a variety of sources, we want you to get out the full gist of the message you have, so whatever time it takes for that, so be it.

    I guess, Mr. Li is going to go first and then Mr. Sullivan.

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    Mr. ABERCROMBIE. Mr. Chairman, the moral of the story is: Beware of great praise coming from the Chairman's dais, because something else is sure to follow. [Laughter.]


    Mr. Li. Chairman Weldon, Mr. Abercrombie, Mr. Skelton, Members of the subcommittee, it is good to see you again.

    Mr. ABERCROMBIE. Mr. Chairman? Would you mind—perhaps you could ask the witnesses to have these—we have something in front of us that other people cannot see it. Maybe they can move it to the side.

    Mr. WELDON. So the future witnesses can see this, because they are going to have to respond to these, so it might be good to have them, like, on the side so that people in the audience—and, Members, you have copies of these charts in front of you, so you can look at your charts while the audience gets a look at the big pictures.

    Thank you.

    You may proceed.

    Mr. Li. We are pleased to be here to today to participate in the subcommittee's hearing on the status of DOD's tactical fighter acquisition.
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    I will highlight key issues in the F/A–22 program, while my colleague, Mike Sullivan, will follow and cover the Joint Strike Fighter and implications for the overall tactical aircraft strategy.

    We were fortunate to have a great team supporting us on the statement, and I would like to knowledge them now: Mike Hazard, Matt Lay and Bruce Fairban.

    I will make three points this morning.

    Point one: According to the Air Force, initial operational testing of the F/A–22's air-to-air capability has been successful.

    Although final reports detailing the results from initial operational testing and evaluation were not available for our review, briefing materials show and test officials told us that the aircraft was ''overwhelmingly effective'' as an air superiority fighter, and its supporting systems were ''potentially suitable.''

    Operational testing of the initial limited ground attack capability is scheduled for later this year. Air Force officials believe that deficiencies identified during testing are readily correctable and that test results support a full-rate production decision planned for later this month. Whether the Air Force can correct these deficiencies and accomplish ground-attack testing by the planned, initial operational capability (IOC) of December 2005 remains to be seen.

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    Point number two: Follow-on modernization plans are uncertain. Issued last December, as Mr. Abercrombie mentioned, program budget decision 753 places much of the F/A–22's modernization plans in doubt. This is because it terminates aircraft procurement after fiscal year 2008.

    Many of the advance capabilities coming out of modernization had been planned for aircrafts that now may not be bought. Therefore, if the budget reduction is sustained, the modernization plan to add robust air-to-ground attack, intelligence gathering and suppression of enemy air defense capabilities will no longer be applicable.

    Point number three: It is time for a new business case. Given current estimates for development costs, quantities——

    Mr. ABERCROMBIE. Mr. Chairman, excuse me.

    What do you mean by that, is no longer applicable?

    Mr. Li. The issue that we are raising, Mr. Abercrombie, is that modernization was to occur after the development this year.

    Mr. ABERCROMBIE. No, I understand. So what do you mean when you say it is no longer applicable?

    Mr. Li. If there is additional aircraft to be procured, as we indicated in our prepared statement, those aircraft would no longer be modified with those capabilities.
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    Mr. ABERCROMBIE. Due to the doctrine, that is what the Chairman's talking about. What the hell have we been doing the last five years?

    Mr. Li. The bottom line of this capability, and the decision, is possibly that the F/A–22 will only be an F–22, that the robust ground attack capability that had been planned may no longer be available.

    Mr. ABERCROMBIE. No, no, don't say may no longer. Are you changing the doctrine?

    Mr. Li. I am not—you would have to talk to DOD.

    Mr. ABERCROMBIE. I do not mean you personally. Is the doctrine being changed?

    Mr. Li. The mission—this is——

    Mr. ABERCROMBIE. I want to know what you think.

    Mr. SULLIVAN. If I could?

    Mr. Li. Sure.

    Mr. SULLIVAN. Later on in our statement I think we cover that, when we get into the implications for the overall tactical aircraft investment strategy.
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    Mr. ABERCROMBIE. Okay.

    Mr. SULLIVAN. We think that some of this can be dealt with in the Quadrennial Defense Review, that there are options there that they can get into that I think would get to what you are talking about.

    Mr. ABERCROMBIE. Okay.

    Mr. Li. Point number three: It is time for a new business case, and I think this will deal will some of the issues that Mr. Abercrombie's talking about.

    Given current estimates for development costs, quantities and changing missions, the F/A–22 program needs a new business case now more than over. When it was initiated in 1986, the F–22 acquisition program called for development of an air-dominance fighter to be completed in 1995, an IOC by March of 1996, and procurement of 750 aircraft.

    As you know, things have changed.

    The chart in front of you labeled, ''F/A–22 Acquisition Program''—and that is for our members of the audience; it is the chart on the left.

    The chart in front of you labeled ''F/A–22'' illustrates these dramatic changes. The chart shows that assuming the addition of a more robust ground attack capability, total development costs will increase by 136 percent, and total development time, an additional 15 years.
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    And if the budget decision is sustained, the number of aircraft decreases to 178 aircraft, a substantial decrease of initial plans.

    Consequently, the original business case is no longer valid. It is still not clear how the Air Force plans to reconcile its needs in terms of quantities and capabilities with available resources.

    And this is the issue that the Chairman just indicated. What is needed now is a comprehensive assessment developed within the context of total threats, risks, projected needs, mix of capabilities, including joint systems, and resources available.

    Such a business case, developed in conjunction with all defense needs, would provide a sound basis for how many F/A–22s are needed and DOD can afford.

    Last March we recommended that OSD direct the Air Force to consider needs and resources for the F/A–22 and examine constraints of future defense spending. In subsequent testimony, we reiterated this position, stating that competing priorities, internal and external to DOD, require a sound business case for DOD's acquisitions based on comprehensive needs assessments and thorough analyses of available resources.

    In response, DOD stated its routine budgeting processes annually address business-case issues on the F/A–22. We continue to disagree. And we do not think those processes provide the breadth or depth of analysis needed to develop a comprehensive business case to get the most out of the significant acquisition.
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    Mr. Chairman, this ends my verbal statement. Mike Sullivan will now provide the balance of GAO's testimony.

    [The joint prepared statement of Mr. Li and Mr. Sullivan can be viewed in the hard copy.]

    Mr. WELDON. Thank you, Mr. Li.

    Mr. Sullivan.


    Mr. SULLIVAN. Thank you, Mr. Chairman.

    I have four points to make on the Joint Strike Fighter acquisition that cover the program's current business case, its acquisition approach moving forward, future funding assumptions and implications for DOD's overall tactical aircraft investment strategy for both of these programs.

    Point number one: The Joint Strike Fighter program must reassess its business case now. Increased development costs, delayed schedules and reduced quantities have made the original Joint Strike Fighter business case unexecutable.
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    If I may direct your attention and the audience's attention to the poster on our right here entitled, ''Joint Strike Fighter Acquisition Program,'' it shows that in 1996, when the program began, development was to cost $25 billion over 12 years, completing in 2008. Today those costs are estimated at nearly $45 billion and will take 17 years, completing in 2013.

    This reflects an 81 percent increase in estimated development cost and a five-year delay in development schedule.

    At the same time, procurement quantities have been reduced by more than 535, or 18 percent.

    So far, the program has experienced problems with aircraft weight that require changes to its design, causing significant cost and schedule uncertainty at this point.

    In addition, the program's customers are still not sure how many JSFs they need.

    However, DOD has been working over the past year to restructure the Joint Strike Fighter program, and if time is given now, to gather knowledge needed to accurately estimate program costs, a new, more predictable acquisition approach can be achieved.

    The program may not be able to estimate costs more accurately until after the critical design review, which currently is scheduled in 2006.

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    Some aircraft capabilities may have to be deferred to stay within the cost and schedule constraints. The program office is working now to determine what those capabilities might be, and for follow-on development efforts, while still meeting the basic needs of the war-fighter.

    Also, the content and schedule of the planned seven-year, 10,000-hour flight test program is also being examined. According to the program office, recent changes have increased the risk of completing it on time.

    Finally, there remains uncertainty about the number and mix of variants the services need.

    The Air Force intends to acquire the short takeoff and vertical landing variant, but has yet to announce how this will impact the quantity of the conventional takeoff and landing variant they plan to buy. The number and mix of Joint Strike Fighter variants that the Navy and Marine Corps intend to purchase also remain undetermined.

    Foreign partners have expressed intent to buy about 700 aircraft between 2012 and 2015, but no formal agreements have been signed at this time.

    My second point: The Joint Strike Fighter program must adopt a knowledge-based acquisition approach moving forward. In recent years, DOD has revised its weapons systems acquisition policy to support evolutionary knowledge-based strategies based on best practices.

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    With an evolutionary acquisition approach, new products are developed in increments based on available resources.

    Capabilities not currently achievable are planned for as separate acquisitions as technologies become available. Our past work has shown that high levels of technology, design and manufacturing knowledge at critical junctures are necessary to adequately reduce risk before decisions are made to significantly increase investments on these programs. JSF so far has not followed that approach.

    As currently planned, the program will not capture adequate design and manufacturing knowledge for investment decisions at future key junctures.

    The program is asking for long-lead funding for the start of production in 2006. If production begins without knowledge that the design is mature, critical manufacturing processes are under control and reliability of the aircraft is demonstrated, changes to the design and the manufacturing processes to build it can significantly increase cost and delay delivery to the war-fighter in the future.

    The size of this potential risk on the Joint Strike Fighter program is illustrated in investments it is planning to make soon. Between 2007 and 2009, the program plans to increase spending from about $100 million a month to nearly $1 billion a month to invest increasingly in tooling, facilities and workforce as it ramps up toward production.

    This capital investment should wait until the program knows there will be no more major design changes to the aircraft.
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    A key indicator of risk on the Joint Strike Fighter program is its use of cost-reimbursable contracts for a number of production aircraft until it is sure the aircraft design is stable—the risk that is created by a significant overlap of development testing and production. These contracts provide payment of all allowable incurred costs, indicating higher risk than usual for procurement aircraft.

    The Joint Strike Fighter program has an opportunity to improve its chances for success if it takes the time right now to apply lessons from the F/A–22 acquisition. Time taken now to gather design knowledge may save significant time and money in the long term.

    My third point: Joint Strike Fighter's assumed funding will be difficult to sustain. Regardless of likely increases in program costs, a sizable continued investment in Joint Strike Fighter must be viewed within the context of the fiscal imbalance facing the nation.

    While the Joint Strike Fighter program will have to compete with many other large defense programs as well as other external priorities, its acquisition strategy assumes an unprecedented $225 billion in funding over the next 22 years, or an average of $10 billion per year.

    Funding challenges will be even greater if the program fails to stay within current cost and schedule estimates. The consequences of an even modest increase or scheduled delay would be dramatic.

    My final point, which gets us more to the implications, is outcomes from both the F/A–22 and the Joint Strike Fighter acquisitions have significant implications for our overall tactical aircraft investment strategy.
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    DOD's investment in both aircraft is substantial and integral to maintaining fighter capabilities. It is critical, therefore, that the investments be well managed and balanced against other DOD priorities.

    To date, because DOD has made investment decisions without critical pieces of knowledge on technology design and manufacturing, cost has climbed on both programs and reduced DOD's overall buying power for tactical aircraft.

    When the F/A–22 and the Joint Strike Fighter acquisitions are taken together, a comparison of their originally planned costs and quantities to their current plans reveal significant gaps.

    The two posters we have up now on either side of us—''F/A–22 and Joint Strike Fighter Acquisition Programs,'' and the other entitled ''Tactical Aircraft Inventory Implications''—provide an aggregate summary of development cost estimates, quantities and delivery timeframes, both original and current, for both the F/A–22 and the Joint Strike Fighter programs together.

    The first poster, the F/A–22 and JSF acquisition programs, shows that DOD will be receiving almost 30 percent less fighter aircraft, reduced from 3,728 to 2,621 for just about 100 percent more in development costs, $74.6 billion instead of $37.4 billion as originally planned. That reflects a significant loss of buying power for DOD over those years.

    The second poster shows the gap between planned and actual deliveries has already begun. This has implications for our overall tactical aircraft investment strategy and underscores the need for a clear understanding, first, of the requirement for these aircraft and, second, whether we have the available resources to meet that requirement.
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    Because these two programs plan to procure significantly fewer aircraft and at a slower pace than originally planned, legacy systems must continue operating longer.

    As the subcommittee is painfully aware, as legacy tactical aircraft age, they require ever increasing investments to keep them ready and capable as the threat evolves.

    The reduced F/A–22 size could also affect the Air Force's overall force structure and employment strategy. The Air Force still maintains a requirement for enough aircraft to meet its new global strike concept of operations and had planned on 10 F/A–22 squadrons to support it. The reduced fleet size resulting from the budget decision may require the Air Force to consider the F/A–22 as a high-demand, low-density asset, which would require changes in these expected management and employment strategies.

    OSD's current Quadrennial Defense Review will soon assess joint air dominance in future warfare and the role provided by all tactical aircraft. A goal is to redirect investment from areas of conventional warfare, where we hold a strong combat advantage, toward more transformational capabilities needed to counter irregular threats, such as the insurgency in Iraq and the ongoing war on terror.

    As the Chairman noted in his opening statement, new tactical aircraft will have to compete with operational systems as they look at these things, such as the F–15 and F–18, and future systems, such as the joint unmanned combat air system.

    The Quadrennial Defense Review provides an opportunity right now for DOD to develop options in terms of needs as well as resources for accomplishing its tactical aircraft goals. Through the review, DOD can seek basic answers to overall investment strategy questions.
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    In our written statement, we have included what we think are key questions about DOD's overall tactical Air Force investment and more specific questions about how the F/A–22 and Joint Strike Fighter programs fit into that investment.

    If DOD fails to answer these questions and continues with its current modernization strategy, it will likely arrive in the future with needs similar to those that exist today but with fewer options and resources to resolve those needs—very much like you were talking about what we knew nine years ago.

    Mr. Chairman, we plan to issue our F/A–22 and Joint Strike Fighter reports on March 15th. They will include recommendation that DOD answer some of these questions before significant additional investments are made in those programs.

    This concludes our oral statement. We would be happy to respond to any questions that you or other Members may have.

    [The joint prepared statement of Mr. Sullivan and Mr. Li can be viewed in the hard copy.]

    Mr. WELDON. Thank you both for your outstanding statements and your excellent work.

    Let me start out by saying to my colleagues on the subcommittee: We are in a very difficult time limitation here this morning. I had planned to start the classified brief for you, which will go into great detail about things that we cannot discuss here, relative to missions and future capabilities of the services relative to the topics of this hearing, and that is scheduled to start at 10:30.
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    With that in mind, we have a second panel of six witnesses from the services in the public portion that I want to get started by approximately 10, which leads us approximately 10 minutes to ask questions of our GAO witnesses here.

    And I am not trying to limit anyone. We will put any questions in the record. But just from a practical standpoint of getting through this portion of the hearing, I am letting you go to 2337 where you will get the more in-depth look and can ask the tougher questions relative to the services in each of these programs, I am going to have to ask for your indulgence.

    Mr. ABERCROMBIE. Mr. Chairman.

    Mr. WELDON. Mr. Abercrombie.

    Mr. ABERCROMBIE. We can always ask—you folks can come back and meet with us in another time. Right?

    Mr. Li. Sure.

    Mr. SULLIVAN. Certainly.

    Mr. ABERCROMBIE. I mean, your statement is clear. It does not bother me any at this point, because we are not going to deal with this all today anyway.

    Mr. WELDON. I do not want you to think a lack of questions indicates that we do not have tons of questions, because I do myself. You could tell that by the tone of the opening statement.
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    But are there pressing questions that Members would like to ask now? If so, I will recognize you.

    Mr. ABERCROMBIE. I just have one. It does not have to do with anything with what you said.

    Can you answer this question: In your judgment, is the Department of Defense following its own existing procurement policies in the present instance?

    Mr. SULLIVAN. Could you repeat that, please?

    Mr. ABERCROMBIE. Is the Department of Defense following its own existing procurement policies in the present instance that you have analyzed.

    Mr. SULLIVAN. If we are talking about acquisition policy——

    Mr. ABERCROMBIE. I am.

    Mr. SULLIVAN [continuing]. For these major weapon systems——

    Mr. ABERCROMBIE. Is it following its existing procurement policies, the written——
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    Mr. SULLIVAN. I would say the policies are written in such a way that, yes, they follow those policies. But there is a difference between the spirit of the policy and the letter of the policy.

    Mr. ABERCROMBIE. Okay, thanks.

    Mr. WELDON. Any other questions from Members?

    Mr. Gingrey.

    Dr. GINGREY. Thank you, Mr. Chairman.

    Mr. Li, you talked about—and Mr. Sullivan as well—about making a business case. I remember last year when you testified before the committee, you had some specific concerns. You were concerned about the avionics and a number of other things. And all these problems have been solved, I think you would agree with that. Your report indicates that now you are coming back maybe from 30,000 feet and saying, or suggesting, you do not like the business program, both on F/A–22 Raptor and the Joint Strike Fighter.

    Can you very briefly and quickly tell us what would be a good business case? What do you have in mind?

    And then later on during the classified briefing, I am sure we will have an opportunity to ask the Air Force the same question.
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    Mr. Li. Let me address the first issue that you raise in terms of what happened last year and what is happening this year.

    I think that you are absolutely correct in terms of some of the progress that has been made. They have completed initial operational tests and evaluation. They have indeed—and this was a big issue. I remember two years ago that the Chairman was extremely upset about the fact that the software was unstable and they had problems.

    According to the test reports and what we have seen about the reliability, the software issue has been pretty much resolved. And you are absolutely right there.

    There are some issues that are still outstanding in terms of the reliability of the aircraft. That has not been resolved yet.

    There is also an issue in terms of the maintenance, the help system. It is going to be a very innovative way to maintain this aircraft. That one still has some issues to be resolved.

    Mr. SULLIVAN. If I could add, I think where we would come from now, the business case for an F–22, at least on the performance side, has pretty much—I think with this first round of testing they did, they have proven that it is a fully capable air-to-air combat fighter.

    I think what they need to do now is understand better where they are going with the enhanced ground-to-air, to make it an F/A–22.
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    We would say right now, that business case is still rather risky in terms of technologies they need, some of the radars they need on that, and where they would be with design and things like that. That should almost be—they should make a case before they move forward.

    Mr. WELDON. Thank you, Mr. Gingrey.

    I would just add that it was this subcommittee that put mandatory language in on the software issue that you brought to us, which kind of got the attention of the contractors, I would say, and allowed us to have the success that we have experienced.

    Any other Members have some pressing questions? I will give you an opportunity.

    Just one quick item, Mr. Li: Based on your research, bottom line, do you believe that a rationale business case can be made to justify future production of the F/A–22?

    Mr. Li. Yes. Yes, I do.

    Mr. WELDON. And we will go into detail on that in our private session.

    Mr. Sullivan, how much additional time do you think the Joint Strike Fighter program needs before low-rate production could begin?
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    Mr. SULLIVAN. We think that before they decide to make big investments, it would be good to wait for the critical design review, which is early 2006.

    Mr. WELDON. I thank you both for your outstanding testimony. We will submit some questions for the record.

    I am going to ask staff to find a way to get you back up for Members to have a more in-depth chance to interact with you.

    Please thank those working with you. We know it is a difficult process that you are undertaking for the taxpayer.

    But as supporters of our military and those who have funded continual plus-ups—well above Presidential requests, since I have been in this Congress—we absolutely have to have the kind of candid assessments that you give us so that we do not have the kind of embarrassments that occur—like the Comanche, like other program cancellations—and in this case, a potentially precedent-setting cancellation of a long-lead contract.

    Thank you both.

    Mr. SULLIVAN. Thank you, Mr. Chairman.

    Mr. Li. Thank you.
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    Mr. WELDON. With that, we will ask our second panel to come forward.

    This panel represents the services, and we are pleased to welcome each of our six witnesses—although my understanding is we are only going to have statements from three of the witnesses.

    So if you would all come forward, we will begin the second part of the hearing.

    We thank you all for appearing today.

    Again, my comments at the beginning of this hearing were to express the frustration of this subcommittee. Many of my colleagues have been here for six, seven, eight, 10, 12, 14 terms and have to make the long-term decisions about where we are going with our defense spending.

    We realize and I acknowledge that most of you have not been in your positions for more than a short period of time, and you are living with facts that were given to you that you had no chance to modify.

    However, our most recent concern emanates from the decision by the Secretary of Defense relative to the dollar cuts and how they are going to impact these programs. That is the point that we do want to get into both in this session and in more detail, capability-wise, in the classified session that we will have following this.
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    So I would just say to each of you, as you can probably imagine, we are going to monitor the issues of this hearing very, very closely this year. We are going to be tough, we are going to be aggressive, we are going to ask hard questions, and we are going to hold people accountable. I mean, that is what this is all about, because we are going to be held accountable.

    You know, some of us are tired of being embarrassed when things occur and we have the oversight responsibility, and then after the fact we say, ''Oh, we should have done that. Well, we did not anticipate that.'' Or, ''Well, that happened before my watch.''

    So with those thoughts in mind, I welcome you all here.

    Again, your prepared statements will be entered into the record.

    I would ask you to make whatever brief comments that you would want to make and then the members have a chance to have some questions in this session before we go upstairs.

    We will start—the three—I have already introduced all the witnesses in my opening statement. I will not do that a second time.

    But our three witnesses who will speak are Admiral Stanley Szemborski, Deputy Director of PA&E for the Office of Secretary of Defense; John Young, Assistant secretary of the Navy, Research, Development and Acquisition; and General Ron Keys, Air Force, Deputy Chief of Staff for Air and Space Operations, U.S. Air Force.
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    So with that, I will invite the three of you to make whatever opening statements you would like make. And thank you all for appearing.


    Admiral SZEMBORSKI. Good morning, Mr. Chairman, Mr. Abercrombie. My name is Vice Admiral Stan Szemborski from PA&E. Thank you very much for the opportunity to testify today.

    The defense budget reflects priorities set by the President and an implementation plan developed by the Secretary and his most senior military and civilian advisers.

    The budget was drafted in light of the progress that has been made and the changes that have taken place since September 11, 2001. As such, the budget responds to the need for prepare for an uncertain future that will require more agile, lethal and responsive force.

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    At the same time, to ensure that we maximize capabilities gained from our defense dollars, the budget seeks to eliminate duplicative efforts across the force, particularly in mission areas where the United States already enjoys substantial advantage.

    In developing the budget request, the Secretary and his senior advisers were guided by a series of priorities—three of these priorities are particular relevant to the discussions today: the challenge of moving our military forces rapidly around the globe, the need to operate seamlessly as a joint force, and a need to adjust to a new world where some of the most worrisome threats come from rogue regimes and extremist cells that can work together, share information and spread lethal capabilities.

    Today we have the finest fighting force in the world. The Department's budget will keep it that way.

    Mr. Chairman, my written testimony discusses many of the programs you mentioned in your letter to Secretary Rumsfeld.

    I am prepared to address your questions.

    Thank you very much.

    [The prepared statement of Admiral Szemborski can be viewed in the hard copy.]

    Mr. WELDON. Thank you.
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    Boy, you know how to score points in a hearing, I will tell you that. For brevity that was outstanding, thank you.

    We will move on to Secretary Young.

    Secretary YOUNG. Mr. Chairman, Congressman Abercrombie, distinguished Members of the subcommittee, it is a privilege to appear before the Tactical Air and Land Forces Subcommittee to discuss Navy and Marine Corps tactical aviation programs in the fiscal year 2006 budget request.

    I would like to thank you and each of the Members of the committee for your outstanding support of Navy and Marine Corps programs.

    In multiple theaters throughout the world, as you know, your Navy and Marine Corps is prosecuting the Global War on Terror in a wide range of operations. From pursuit of hostile forces in Iraq and Afghanistan to providing humanitarian relief after the tsunami, your Navy and Marine Corps team has executed superbly.

    In each of these operations, naval aviation has provided a unique demonstration to the world of the immense capabilities of the United States Marine Corps-Navy team and what they provide for the nation.

    There are a number of programs and initiatives that merit your consideration within this budget. In the interest of time, I will only highlight a few of the recent actions undertaken by the team.
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    The Marine Corps and the acquisition team acted to install advanced survivability equipment on all helicopters going into Iraq with the 1-MEF last spring in advance of their deployment.

    The Department achieved initial operation capability for Tactical Tomahawk this year, awarding the Navy's first weapons multiyear contract at a 12 percent savings for up to 2,200 missiles at $1.6 billion.

    The Navy has used multiyear procurements to achieve significant savings and stability in our procurement accounts. The fiscal year 2006 budget before you continues multiyear arrangements for the F–18E/F, both the air frame and the engine; the MH–60's helicopter; the MH–60R, common cockpit and helicopter; and the E–2C advanced Hawkeye.

    This year we successfully awarded the Multimission Maritime Aircraft SDD contract.

    As we will discuss, the Joint Strike Fighter program made significant progress as adjusted design, ground rule and requirements to restore short take-off and vertical landing (STOVL), viability and reviewed that program with an independent review team.

    The STOVL weight has been reduced 2,500 pounds through design optimization. Other improvements assure that STOVL and all variants meet their key performance parameters.

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    The conventional take-off and landing (CTOL) flight test aircraft is under way and roughly 40 percent complete with assembly times much less than planned.

    The E–18G development continues as the Navy's replacement for the EA–6B. The Navy is using the FA–18E/F multiyear contract to buy four SDD aircraft in 2006 and incorporate the ICAP–3 capability on these aircraft.

    The V–22, which the committee has had a great interest in, has flown in excess of 4,900 hours since resuming flight test in May of 2002.

    Operational evaluation of this platform will begin this month.

    There are many other programs to mention, but out of respect for the committee I will stop, leaving much more to say.

    We are grateful to the committee for the chance to offer these examples in our testimony today and assure you that day in and day out, the sailors and Marines fighting the Global War on Terrorism are executing their missions, thanks to congressional support.

    Thank you for your consideration of these issues, and we look forward to your questions.

    [The prepared statement of Secretary Young can be viewed in the hard copy.]

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    Mr. WELDON. Thank you, Secretary.

    General Keys.

    General KEYS. Thank you, Mr. Chairman, Congressman Abercrombie, Members.

    Just as a scene-setter, I would like to point out that today we have almost 30,000 Air Force people deployed away from home, many directly in harm's way. We will fly 225 sorties in Iraq and Afghanistan in addition to filling eight 24-hour Predator orbits, provide support for over 16 contingency bases, augment Army forces in guarding detainees, and set out on 10 ground convoy and convoy protection elements in support of ground operations.

    Overall, today we have nearly 70 percent of our Air Force conducting operations from the nuclear and satellite operations to flying nearly 300 missions by our global airlift and tanker fleet, as well as manning five combat air patrols and sitting alert at 25 sites here in the United States.

    As we sit here, we have Air Force aircraft moving in every time zone of the world and on six or seven continents, and we left Antarctica five days ago.

    The American flag will fly on the tail of an American Air Force aircraft in 102 countries this morning, and they are backed by the tens of thousands of maintenance, security and support people that make that happen.

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    The sun never sets on your Air Force. But that sun shines on an Air Force that has been in constant deployment and combat operations since the first Gulf War—over two decades, five conflicts and 12 constant years of operation in Northern Watch and Southern Watch.

    It shines on an Air Force that when I arrived as a 2nd lieutenant, the average age of our aircraft was just over eight years. It is now over 24 years.

    That and a high OPTEMPO have taken a toll. Despite the great effort of our people, we have operational restrictions on our C–5s, our F–15s, our 117s, our 135-Es and 130's, and in those two aircraft I have both restricted and some grounded.

    Meanwhile, the world and our adversaries have moved on—better systems, better training, tougher threats. As a result, recapitalization of our capabilities is the number one challenge we are facing in TACAIR and across our Air Force. That theme will no doubt run through our testimony as we outline a portfolio that balances recapitalization, transformation and risk against the missions that we must do today, as well as the missions we must do in the future.

    And General Corley and I are very proud to be here to represent your great Air Force, and we appreciate your continuing support to buy them the best equipment, the training and personnel that we can afford.

    [The prepared statement of General Keys can be viewed in the hard copy.]

    Mr. WELDON. Thank you, General, we appreciate your statement.
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    We thank each of you. That was a record-setting series of opening statements for us so that we can maximize the time for the Members.

    I will make my initial question brief.

    You sense the frustration the Members have. And let me say at the outset: This committee will take a back seat to no one in terms of support for our troops.

    I sat here during the 1990's when the service chiefs came in with recommendations for dollar amounts that we said were unacceptable. In each of the six years from 1994 to 2000, it was this committee, this subcommittee, that plussed up defense spending by a total of $43 billion more than what the service chiefs or the Secretary of Defense said was necessary.

    I hate to think where we would be today if this Congress had not gone above and beyond what the Administration in the past said would be necessary to modernize our forces and to take care of the upgrading of our platforms as well as our personnel.

    Continuing in this Administration, we have been very aggressive in standing up where we felt the Administration was being unrealistic in terms of putting requirements—we were the ones that led the effort for the first supplemental to take care of the needs in Iraq and Afghanistan—in spite of White House objection, it was this committee.

    So this committee will not take a back seat to anyone in terms of support for our troops.
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    What is so frustrating with this committee is that we see things happening on the horizon that we know are going to cost us extended dollars that we cannot pay for, and we ask our service chiefs and our military personnel to come in to us with realistic assessments.

    Nine years ago we said tactical aviation will be unaffordable. And here we are nine years later now having to deal with what appears to be a request to do an unprecedented thing and terminate a multiyear contract. That is our frustration.

    And believe me, we travel overseas, we see our troops. This committee—I have the highest respect for every Member on both sides of the aisle. They are dedicated to the support of the men and women who serve this country. In fact, many of them—like, Joe Wilson has three sons serving today, active duty in the service. Many of us have relatives who are serving.

    We want to do the right thing by the troops. But doggone it, sometimes it is extremely frustrating, and the position that this subcommittee is in right now, trying to balance the dollar decreases that have been allegedly proposed to us and put together a defense authorization bill that meets the needs of the services, based on the threats that you see out there, just appears to be at this time unrealistic.

    I am going to save any questions and let my other colleagues go first. So I will turn first to Mr. Abercrombie and ask him if he intends to do what I did and hold his time so every Member gets a chance to ask——

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    Mr. ABERCROMBIE. Mr. Chairman, thank you.

    Admiral Szemborski, I want to refer you to your statement here, which I appreciate.

    You cite in it the F/A–18E/F, derivative of earlier F/A–18, right?

    Admiral SZEMBORSKI. Yes, sir.

    Mr. ABERCROMBIE. Now, this is what you said here: ''The F/A–18E/F is a multi-roll aircraft optimized for air-to-ground attack fully capable of meeting fleet air superiority and air defense needs.'' That is your statement.

    Admiral SZEMBORSKI. Yes, sir.

    Mr. ABERCROMBIE. E/F variant can be fitted, and so on, to do refueling and reconnaissance possibilities, because you previously cited intelligence, surveillance, these kinds of things as being necessary. Good.

    Then you go on and talk about the difficulties of Joint Strike Fighter and the F/A–22—right?—being phased.

    Now, your final statement and in the final part of the paragraph here, ''We plan to buy Joint Strike Fighter in numbers needed to outfit a large share of the Air Force, Navy and Marine Corps tactical fleets.''
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    But then you go on to say, ''Meanwhile, our current aircraft have proven to be highly effective in the very demanding missions conducted in Operation Enduring Freedom and Operation Iraqi Freedom. In short, we are strong today in air dominance and have a balanced plan to improve tactical aviation.''

    You go on, then, later with the joint common missile and you say you have terminated it for a variety of reasons, almost all of which apply to the F–22 and the Joint Strike Fighter. Good alternatives you say exist for the Joint Common Missile.

    Why aren't you making an argument that the F/A–18E/F constitutes the same kind of argument you are making where the joint common missile is concerned with respect to these programs that are climbing off the charts in terms of cost and the testing for which has not been concluded?

    Why isn't the joint common missile argument that you are making apply to your assessment of the F–22 and the Joint Strike Fighter?

    Admiral SZEMBORSKI. Sir, let me start, first of all, on the aircraft side.

    We like to talk about not individual platforms but overall joint capabilities. And when we try to assess our forces and our capabilities, we do it from a joint standpoint.

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    Today we have air dominance and we plan to maintain air dominance in the future.

    Today our F/A–18 fleet is performing very well in a variety of missions. However, when we look to the future and we look toward the type of threats with some of the types of double-digit SAMs and those types of things that we can talk about in the classified session, we see that we will need advanced capabilities, and we believe that the F/A–22 and the JSF will provide us capabilities over what we have, the F–18 right now, which America will need in the future.

    Mr. ABERCROMBIE. I will not get argumentative; we do not have the time. But you can say the same things with the joint common missile in terms of—you said current joint munitions platforms, vehicles, the current situation.

    Admiral SZEMBORSKI. Sir, in the joint common missile, we face a situation where—there is a niche that the joint common missile can fit, but we have already several munitions that can do those types of things.

    So we looked at and did an independent cost estimate for this Joint Common Missile, and we saw the cost dramatically going up. So——

    Mr. ABERCROMBIE. I know you did. That is just what is happening—I will not pursue it further, but I think maybe the same kind of reasoning that you put to the joint common missile, perhaps you need to relook at the other programs as well to see whether or not it is worth the cost and the time and the limited numbers that we apparently will be able to achieve, whether it is worth it to continue.
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    Admiral SZEMBORSKI. Sir, in the Quadrennial Defense Review, that is exactly what we are taking on.

    Mr. ABERCROMBIE. Okay, thank you.

    Admiral SZEMBORSKI. We will be looking at risk, and we will be looking at what our capabilities are, and we will present that to the Secretary of Defense.

    Mr. ABERCROMBIE. Thank you, Mr. Chairman.

    Thank you.

    Mr. WELDON. Mr. LoBiondo is recognized.

    Mr. LOBIONDO. Thank you, Mr. Chairman.

    To all of you, thank you for being here.

    General Keys, the Air Force has proposed the future total force plan, which contains cuts to the legacy fighter plane, in particular I am talking about our F–16s in the Air National Guard. And that is being done to provide future fighter programs.

    With the cuts to the F/A–22 program included in the President's budget, and the cuts to the legacy fighter inventory included in the future total force plan, I am really concerned that we face even a larger backup in terms of our aircraft inventory.
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    I have talked about this on a number of occasions. I have talked about it to some folks privately. Privately, I have had some acknowledgement that this is a very real problem but a lot of hesitancy to talk about it publicly to what it means.

    But I am really interested in trying to get to the bottom at what price to overall Air Force readiness is the future total force plan. How many in defense in the 24-hour alert mission are vital to our national security? They are vital and critical.

    I have talked to Chairman Weldon, I have talked to Chairman Hunter. To think of what we would do in this country without that, I am not quite sure, but nobody is able in this national security environment and the post–9/11 environment.

    If we take away these old fighters, they are going to come away from the Air National Guard, and what will the Air National Guard use for their vital homeland security mission?

    General KEYS. It is good to see you again, Congressman, and I understand the issue.

    Of course, with the respect to the fighter backup, I think we have to look at it—we will readily admit that we are going to have 25 percent fewer fighters in the future.

    I could not come before this subcommittee and say that I need as many F/A–22s, for example, as I need F–15s, or I need as many JSFs as I need F–16s. It is not a one-to-one replacement.
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    So there will be fewer tails.

    Now, the distribution of those tails—for example, just I think last week, perhaps next week, we start the Richmond Guard through F/A–22 training to fly the F/A–22 in an associate status with Langley. Those are the kinds of future force mixes that we see, that as these new airplanes come on, it won't be just that we are taking down airplanes, alert sites that we need and not backing anything back into it.

    So there is a force flow of iron along with missions in those areas that we need to do it.

    As you know, the drawdown for F–16th starts about 2007 right now.

    This year, of course as you also know, we are facing Base Realignment and Closure (BRAC), and the QDR, and out of that we believe we will have a definitive program of where the iron is going to flow and when it is going to flow and how the lay-down will be continued.

    Mr. LOBIONDO. Thank you.

    Mr. WELDON. Thank you, Mr. LoBiondo.

    Mr. Spratt.

    Mr. SPRATT. Already? Thank you, Mr. Chairman. I was waiting longer.
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    Mr. WELDON. We are trying to expedite, so we are trying to give everybody a chance. We have two more after you.

    Thank you.

    Mr. SPRATT. For as long as I can remember, there have been a few constants in our defense planning. One of them is air dominance, or air superiority—call it what you will—and clearly it is one of the constants we want to maintain.

    What advantages does the F–22 give us over what we have today with F–16 and the F–15?

    General KEYS. Let me give you an example.

    We have had successful air superiority in all of our engagements—Yugoslavia, Iraq—but we are yet to face the SA–10 or something comparable to that on the ground.

    Mr. SPRATT. Does the F/A–22 give us the capability we simply would not have in the F–15 or the F–16 in the suppression of enemy air defense (SEAD), mission?

    General KEYS. Across the board it does. And I will get into that in detail in our classified session.
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    But the stealth, the super cruise, the avionics, the integration gives us capabilities that we have nothing in our force, or there is no force in the world that has that capability. And we believe those are the capabilities that are required for the fight of the future.

    Mr. SPRATT. If we cut back to whatever it is—170-odd airplanes—are you going to have to also replenish your mix by going and acquiring additional F–16s?

    I don't guess you can reopen the F–15E line at this point in time.

    General KEYS. Well, of course there are a number of analyses that we are going through, because we have to balance the portfolio obviously. But if you have 176 or 165 airplanes, that is going to drive some sort of risk or some sort of gap somewhere. So now the question is: Do you change radars on airplanes, do you try and buy new airplanes of a legacy sort of lineage?

    That is I think the real tough discussion that we have to have during QDR as we throw all of the air dominance—and there is not just air dominance; it is dominance of the battle space. We throw all of those systems and capabilities out there and say, ''How do we leverage the best investment to cover the threat and accept the least amount of risk based on what we can afford?''

    Mr. SPRATT. There is an old saying that the first rule of analysis is to forget the sunk cost. If you leave aside the sunk cost, what is the fly-away cost, the marginal costs, to complete the buy that you are talking about now, 170-odd airplanes?
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    General KEYS. Let me have my acquisition——

    Mr. SPRATT. All right.

    General KEYS [continuing]. Because once I get—I try not to do math in public as a fighter pilot, so I will hand it to my colleague.

    General CORLEY. Sir, I think the best way to take a look at this is the difference between the 2005 President's budget and the 2006 President's budget was about $10.5 billion, as the Chairman opened the conference with.

    It also meant about 100 less airplanes.

    So essentially what is currently in the 2006 budget, which we will be informed of from the Quadrennial Defense Review, winds up being somewhere around $100 million to $110 million for each F/A–22.

    Mr. SPRATT. Fly-away costs, costs to complete.

    General CORLEY. Sir, that does not include some of the fly-away cost. Nor does it include of course all those program acquisition unit costs, or the sunk costs that has already been paid for.

    Mr. SPRATT. It does not include aaircraft ground equipment (AGE), initial spares and provisions, things like that. It is just the air frame and the engine itself?
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    General CORLEY. Sir, the fly-away cost on the last F/A–22 in Lot Four was approximately $150 million. The fly-away cost for every F/A–22 that we have purchased in the program to date has steadily decreased in cost.

    In fact, we are approximately 50 percent less in fly-away cost on F/A–22s today than when we first were.

    Mr. SPRATT. Now, if you replace the F/A–22s that you do not buy with F–16Ds, in an equivalence—it might not be one for one—in an air equivalence, what would be the cost of the alternative F–16s?

    General CORLEY. It is an excellent question, sir.

    Essentially what F/A–22s are costing today are probably within 10 to 15 percent of what a legacy aircraft, which is far less capable, success or failure——

    Mr. SPRATT. On a one-for-one basis, about 15 percent more expensive?

    General CORLEY. Yes, sir.

    For example, sir, the F–15E line is still open. There are still F–15s being produced today. So if we were to compare the cost of purchasing another F–15—a magnificent weapons platform, one that we see great viability for in the future—vice an F/A–22 that has designed in, thanks to your investment, there is probably only about a 10 or 15 percent difference in cost.
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    Mr. SPRATT. One final question, if the Chairman will—could I ask one more question?

    Shift gears to the C–130J. The Air Force sold us on that system as a superior system, a complete redesign—new props, new engines, much greater efficiency, lots of pluses. But one of the selling points was that its life-cycle costs would be significantly less, its operating operation and maintenance (O&M) costs, than the existing C–130's we have.

    Is there any comparison between the life-cycle costs as to what it will cost if we do not have this mix of C–130Js added to our airlift capacity?

    General CORLEY. Sir, I do not have those numbers in front of me and would respectfully request to take that for the record.

    Things that I would be able to say to you is: The C–130J aircraft are in the fight and in the AOR in supporting our joint forces in the AOR.

    Mr. SPRATT. How much have we spent on development costs of the C–130J that we will forsake if we do not build any?

    General CORLEY. Well, number one, sir, we have to remember that that was a commercial product to start with. The contractor, Lockheed Martin, spent approximately $1.2 billion of their own money to develop that particular program. That is dollars that the Department of Defense, that would authorize, were not spent on the development of the program——
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    Mr. SPRATT. And those are not termination for convenience damages that the government——

    General CORLEY. Sir, if we terminate the multiyear contract, we are talking about the sizable sums of money that the Chairman mentioned as we opened.

    For example, if we do terminate the multiyear contract, there will be a cancellation ceiling that we would have to pay—approximately $400 million-plus, an equitable adjustment, given that items may have been purchased for that multiyear based on the quantity. Those would have to be negotiated. That number could be $500 million up toward $1 billion, perhaps.

    We would have to pay the increase in terms of production costs, because the anticipation was for a certain number of KC–130Js for the Marine Corps. Now, within a modification of that number of aircraft, there would be an additional cost to that.

    There would be a cost to modify our existing fleet of C–130's that we had we anticipated retiring due to their center wing box problems and their age, there would be additional overhead costs. These are all cumulative.

    Sir, I do not have the exact numbers, and I am sure that is why the Secretary had previously said we need to go back and take a hard look and scrub on this.

    Mr. SPRATT. Well, I will officially request it for the record, if you could provide it, along with the other life-cycle information——
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    General CORLEY. Yes, sir.

    Mr. SPRATT [continuing]. Life-cycle cost information.

    Thank you very much for your answers.

    Mr. WELDON. Thank you, Mr. Spratt.

    Mr. Akin and Dr. Gingrey, and we will be out of here by 10:30. And then we are going to upstairs and we can ask additional questions.

    Mr. AKIN. Just a quick question on the F–18G model: Is that proceeding as we had anticipated? I gather that it is, and it still looks promising?

    Mr. YOUNG. Actually, the schedule is proceeding very well on the E–18G. We have been through baseline requirements review and some of the initial design reviews, and the program seems to be tracking to schedule, which led us to stay with the commitment for the four system and development (SD) aircraft that will be part of the E/F multiyear purchase this year.

    Mr. AKIN. And does that actually technically save money when you start putting your maintenance cost in those old 25-year-old Prowlers that are out there?

    Mr. YOUNG. Admiral Sestak may want to add more, but there is a significant benefit to—we are running out of life cycle, if you will, on the Prowlers. We need to replace them.
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    And then there is a longer-term benefit on particular the carriers in the deployed forces. We have E/Fs and-Gs which share a lot of common maintenance practices and parts.

    Mr. AKIN. Thank you.

    Thank you, Mr. Chairman.

    Mr. WELDON. Dr. Gingrey?

    Dr. GINGREY. Mr. Chairman, thank you.

    Mr. Secretary, Admirals, Generals, thank you so much for taking some of your valuable time to come and visit with us today.

    I think it would be extremely helpful for you to briefly develop your summary of the F/A–22 program.

    General Keys, you may remember that one year ago we were sitting in this very hearing discussing how the Defense Acquisition Board had just approved the Raptor to enter into the initial operation testing.

    And since that time, the Raptor has completed IOT&E, and with the exception of a few small issues characteristic of any new program, it exceeded every expectation, as far as I can tell.
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    In addition, the doomsday scenario that we worried about last year with regard to the avionics stability—we talked about that earlier with the first panel—have been corrected. The plane is doing everything we hoped it would do.

    And despite this awesome performance, General Keys, there still seems to be some confusion about how the F/A–22 will fit into the larger landscape of the Air Force's modernization efforts.

    If you could, please summarize for us one more time, perhaps even using a hypothetical, of what the F/A–22 is designed to do and why no other fighter can perform this unique mission.

    General KEYS. I will give you a quick overview, and then we will need to talk about some of this in more depth in the next classified briefing.

    But essentially, we view the F/A–22 as our kick-down-the-door force. It is combination of stealth and speed and integrated avionics allows it to penetrate into the double-digit SAMs against very high-end fighters, it gets the first shot—the first look, the first shot, the first kill, both air-to-ground and air-to-air. There is no other airplane that is going to be able to do that.

    So we see this as the lead force that then enables the rest of the joint force, including our JSFs and any of our other legacy airplanes. That is what it was designed to do, and that is what it is proving itself to do in testing.
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    Dr. GINGREY. Well, you know, I think General Corley just said in response to Mr. Spratt's question about the slight increased cost for all this increased capability.

    General Corley—if I might in the remaining time I have, Mr. Chairman—examine the cancellation of the C–130J multiyear from a taxpayer's perspective. By canceling the C–130J multiyear contract three years before completion, the Nation ends up paying two-thirds of the remaining contract costs, receives less than one-third of the remaining J models.

    In addition, as I understand it, the Air Force has to either ground or severely restrict the flying of 90 C–130Es and-H models due to wing box fatigue, a dozen or so were performing missions of course in the Middle East.

    General Corley, if we do not replace these aircraft now, and if the multiyear contract is canceled, as the budget proposes, isn't it correct to say that the only tactical airlifter remaining in production would be the French-made Airbus A400M? Is that correct?

    General CORLEY. Sir, I am not familiar with the entire worldwide production of air vehicles.

    What I am familiar with is that the requirement for C–130J aircraft for the United States Air Force has been 168.

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    If we truncate the multiyear contract, the United States Air Force will receive only 53 of that 168, if you will, tactical airlift aircraft.

    Two, I think one thing that we have seen from this current operation and what we would envision into the future is the demand for intra-theater airlift is in fact very well substantiated.

    We are able to in this intra-theater airlift deliver many things via C–130J that would otherwise have to go over the ground and causing more of those individuals to be at risk.

    I would also suggest that the inventory for the Marine Corps—and my colleagues could talk about their KC–130J program and where they would in fact fit into the requirements basis of this.

    We will continue to inform ourselves and revisit the C–130J issue and its impact, because you are right, sir, it will have an impact on what we do with the existing legacy C–130 fleet.

    The number of airplanes that would have to be modified, that we would have to do the avionics modernization program—all of which will be informed by further discussions inside of the Department, and as promised, we would be back to discuss with the committee.

    Dr. GINGREY. Thank you.

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    Mr. WELDON. Thank you, Dr. Gingrey.

    We thank our witnesses for bearing with us on our time constraints.

    And for my colleagues and Mr. Abercrombie, I would ask unanimous consent, without object, to enter the questions of Solomon Ortiz, as well as questions that I have and other Members might have for the record.

    With that, again, we thank you for your service. We are very proud of our troops and the job that is being done in terms of air support, second to none. We have all seen it and want to continue to have that happen for the future. And that is why we are looking to ask the tough questions that we will be asking at the second part of this.

    This hearing will stand adjourned, and the classified briefing will occur in 2337.

    [Whereupon, at 10:32 a.m., the subcommittee was adjourned.]