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tv   Key Capitol Hill Hearings  CSPAN  October 6, 2015 8:00am-10:01am EDT

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program for parole, which is a program that has i think some difficulties. i'm not sure that kind of thing that ought to be done with regard to syria, but apparently it is being considered. is it still being considered, to your knowledge, using a role programs to deal with the syrian problem? >> sir, the uscis received a letter that had been signed by 70 members of congress asking the administration to consider what we've called a.c. green family reunification program. at the time there was a model based on the cuban family reunification program. under the design of the cuban program, family members in the united states are eligible to apply for green cards for the family members, form i 130. but they were eligible for that application and have been
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approved beneficiaries of their family members were not able to actually take advantage of it and come to the united states because of the numerical limits on family based immigration every year. .. continued to deteriorate. as we have had requests from other stake holders to take another look at that, my leadership would agree to take
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another look at the program. they have agreed to consider it. >> you have a request and i'm sure you should consider it. that is a problematic to do business. we're increasing number of refugees for syria and i think that is the appropriate way to openly and directly deal with this. the parole system was never designed to be used in this fashion as i understand the law. with regard to resettlement, i guess, mr. chair, does that follow within your area? >> yes, it does. >> and general, i believe some sort of consultation with communities about a desire to resettle a number of people in
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their community. what is your policy on that, and can you assure us any community that would receive direct flow of refugees would be consulted before this happens? >> i believe i will defer to my colleagues at the department of state on that who handle admissions and placement portion of the program. >> sir, i can, the state department has a responsibility for the first, for placement of refugees in u.s. communities and hhs's responsibilities then are longer term in terms of support and integration adjustment. we have, again, we do consult very closely at the community level. we put the responsibility on the partner in that community. so the affiliates i talked about before, 320 or so. and, we ask them, in fact we, we
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require them to do consultations each quarter of the year. and those -- >> consultations with the government? >> consultations include elected officials. could be city council as well as mayor. it includes other people providing services. so schools, health clinics, other medical service providers, law enforcement, as well as volunteer groups supporting refugees. we want too talk with the broad community, not just people who are involved exactly in the resettlement program, but also people who are affected by it. so that consultation takes place quarterly. that consultation includes a representative from the state government. so somebody who is working either attached to the governor's office or has communication with the governor's office. those consultations are fed back through the national headquarters and then to the state department. what i can assure you is, in fact i was just in twin false idaho two weeks ago, that, we
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want to listen to every voice in the community. not everybody is supporter of refugees. not everybody is a supporter of syrian resettlement. we can't to take all the voices in into account and see how we can respond. what i can tell you overwhelming ly the majority of citizens appreciate the program and support it. so we want to find a way to make that work for everybody. >> very good. well, we're talking about a very major undertaking. heritage foundation study has reported that 10,000 refugees over a lifetime, will cost the united states treasury $4 billion. excuse me, 6.5 billion for
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10,000. because most of the people are going to struggle at lower incomes and, so there is a cost on that, and then you say you go to 30,000. 70,000, 100,000. that is a substantial cost and each year, if you did another 100,000, over 30 years you've increased a very large number of people statistically speaking, will be drawing more benefits than they pay in. it puts stress on medicare. it puts stress on the food stamp program. it puts stress on social security. medicare, because most will pay into the program presumably if they work, but like most people, they will pay in less than they take out. that's why those programs are on such a crisis path today. so it is a huge financial cost. then we have the difficulty of
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being able to screen the applicants effectively. and, i think if you need more help, mr. emrich or miss strack, i hope you will ask for it. i'm worried it is almost impossible with more staff to get the information. we're not going to be able to at some people might think, go out to the neighborhood and interview people that make sure the person that lived on this street was a doing a good job and good and december person. we're seeing in europe how it is happening in huge numbers. i believe the american people are generous, kind and decent. they want to contribute helping solve this refugee crisis and we are, in a significant degree. but we're entitled to have our officials protect our interests, the people's interest. that is what i think we tried to
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do today. i don't blame any of you for the difficult job you have. but i do think that, we need to ask ourselves how much so much instability occurred in the world. we need to ask ourselves how we can postively assure that stability is returned to as much of that area of the world as possible. to try to create a circumstance and financially help in a humanitarian way, people that are really hurting. many of them are and we know that. so, thank you for your service to your country. we appreciate that. so, the record will stay open for one week. and you're dismissed. thank you very much.
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[inaudible conversations]. [inaudible conversations]. >> afghanistan operations commander, general john campbell testifies today about the recent airstrike that hit a "doctors without borders" clinic, killing
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19 people. his testimony comes before the senate armed services committee, live at 9:30 a.m. eastern on c-span3. veterans affairs department officials and representatives from veterans organizations testified today about pending veterans health benefits legislation. we'll have live coverage of the senate veterans affairs committee hearing starting at 2:30 p.m. eastern on c-span3. energy secretary earnest moniz is on capitol hill to testify before the senate energy and natural resources committee. members are considering the modernization of strategic petroleum reserve and exporting of domestic oil. see it live at 10:30 a.m. eastern here on c-span2. ♪ >> the annual documentary
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competition for students in grades six through 12. it is an opportunity for students to think critically of issues of national importance of creating a five to seven-minute documentary in which they can express those views. it is important for student to get involved because it gives them the opportunity and a platform to have their voices heard on issues that are important to them. so they can express those views by creating a documentary. we do get a wide range of entries. the most important aspect for every documentary that we get is going to be the content. we have had winners in the pat created by just using a cell phone and we have others that are created using more high-tech equipment but once again it is really the content that matters and shines through in these documentaries. the response from students in the past has been great. we have many different issues that they have created videos on that are important to them. we have topics ranging from education, the economy and the environment, showing a wide
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variety of issues that are important for students. >> having more water in the river would have many positive impacts to better serve the tulsa community and businesses inside it. >> we definitely come to the consensus that humans can not run without food. >> prior to the individuals with disabilities education act or the idea, children with disabilities were not given the opportunity of an education. >> this year's theme is road to the white house. what is the most important issue you want candidates to discuss in the 2016 presidential campaign. it is full on into the campaign season. there are many different candidates discussing several issues. one of the key requirements in creating a documentary is to include some c-span footage. this footage should really compliment and further their point of view, and not just dominate the video but it is a great way for them to include more information on the video that furthers their points. >> first bill i'll sign today is the water resources reform and
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development act, also known as wrrda. >> we heard about meals and burnt fish sticks and mystery meat tacos. >> there is a vital role that the federal government plays. it is especially vital for students with disabilities. >> students and teachers can go to our website, they will find more information about the rules and requirements. they will find teacher tips. rubrics to help incorporate into their classroom and prizes incorporating c-span video and ways to contact us if they have further questions. the deadline for this year's competition is january 20, 2016 which is exactly one year away from the next presidential inauguration. >> headline in "roll call" says boehner postpones election for majority leader whip. the author of that piece, emma
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dumain, joins us from capitol hill. why did speaker boehner decide to postpone the other leadership elections. >> speaker boehner was under some pressure of the conference to delay down ballot elections until after a speaker has been selected. the favorite right now is majority leader kevin mccarthy. the conference will nominate him secret ballot in closed-door members meeting this thursday october 8th. exactly three weeks from that date, october 29th. all 435 members of congress will come to the floor of the house and hold a live roll call vote for their next speaker. assuming that leader mccarthy is chosen to be boehner's successor as speaker of the house he will have vacated his majority leader position. at such time members could vote for a new majority leader, assuming its majority whip, steve school lease, will be open for whip, triggering another
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election. members were concerned that there would be elections for members of leadership not accounting for the fact that the nomination for mr. mccarthy isn't the same as actually electing him on the floor. and there is also concerns about whether he can get the 218 votes necessary on the floor to even become the speaker in the first place. does that make sense? there are a lot of moving parts. >> you talked about kevin mccarthy, the presumptive favorite. there are a couple of other candidates for house speaker. tell us about those. they're set to speak before a couple of the republican caucuses on tuesday and wednesday. why that process? >> that's right. leader mccarthy is the presumptive favorite the establishment pick if you will, for speaker of the house. he is being challenged by a rank-and-file florida republican
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daniel webster who some conservatives like who talks about process and collaboration and new to washington, more or less. he is a member of 2010 class. so people sort of like that he, you know, is a fresher face and not spoiled by capitol hill, if you want to call it that but the new wrinkle in this is the candidacy of oversight and government reform committee chairman jason chaffetz, utah republican, has taken on a very high-profile role since the start of this congress. announced on "fox news sunday" that he would be challenging mccarthy as well. chaffetz, his argument is that mccarthy can't get the necessary 218 votes on the house floor. there are just too many conservative is who don't want to vote for him. all democrats will vote for their minority leader, nancy pelosi. he is trying to put himself forward as alternative, someone
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who can bridge divides and conservative alternative to mr. mccarthy and that is kind of the case he is going to be making in the days ahead. >> move us forward a couple weeks. the process of the conference meeting this thursday to make their selection, tell us about the house election for speaker. what would that look like? >> with similar what we see, almost exactly what we see, at the start of every new congress, something we saw in january, all of the members gather on the floor. the clerk calls everyone's name individually. and they stan and they announce their pick for speaker. traditionally, the majority party will speak in favor, or vote, rather in favor of the nominee who comes out of the conference committee. so in this case they nominated boehner inside of the conference. that is who you were expected to vote for if you were a republican. the minority party votes for
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their minority leader to be speaker in symbolic vote. in their case that would be nancy pelosi. not everybody votes for the nominee inside of the conference. we saw that in january. there were, you know, about two dozen republicans who voted for candidates other than speaker boehner. some of them were punished for it. some of them are still facing retribution for it for not playing with the team. you will see some of that too. if mr. mccarthy has enough defections for his nomination on the floor and doesn't get the necessary winning threshold, the 218 votes, the house will vote again and keep votes on a second ballot and a third ballot, all live roll call votes until somebody gets 218 votes to become speaker of the house. >> all of that happening the day before house speaker boehner ends his time in congress on october 30th. that leadership election,
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october 289th. following it all, emma dumain. "roll call" house leadership voter. follow her at "roll call." emma dumain. thank you so much. >> thank you. >> the senate armed services committee held a hearing on the navy's ford class carrier program. the first two aircraft carriers in the program are facing serious delays and are a total of $4.7 billion overbudget. this hearing is two hours and ten minutes. >> good morning. for more than seven decades the aircraft carrier has been the centerpiece of america's global power projection. we rely on our carrier fleet to defend our interests, our allies and our allies around the world. a mission that is more important than ever today as global
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threats multiply from the gulf to the western pacific to the north atlantic. for 13 years the department of defense has sought to develop our newest aircraft carrier, uss gerald r. ford, marking the beginning of an entire new class of this ship. the ford class aircraft carrier program is one of our nation's most complex and most expensive defense acquisition projects. it is also become unfortunately one of the most spectacular acquisition debacles in recent memory. and that is saying something. the ford class program is currently estimated to be more than $6 billion overbudget. despite recent announcement after two-month delay the first ship is scheduled for delivery next year. the second ship, however is five years behind schedule. significant questions still remain about the capability and reliability of the core systems of these aircraft carriers. and yet, when i asked the former chief of naval operations who is
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responsible for the cost overrun on the uss gerald r. ford, he said he didn't know. this committee has been actively involved with this program from the very start and since the beginning of this year, our oversight has increased significantly. at the direction of senator reed and myself, committee staff have conduct ad thorough investigation of the ford class program. this work has entailed thousand of pages of work plans, proprietary documents, contracting information, correspondence and operational testing data as well as numerous interviews with key players from the office of the secretary of defense the navy and industry. this work has been done on bipartisan basis in keeping with the best traditions of this committee. as a result we meet today with clear goals. to examine what has gone wrong with this program, to identify who is accountable, to assess what these failures mean for the future of our aircraft carrier fleet and navy ship building and
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to determine whether any reforms to our defense acquisition system could prevent these failures from ever happening again. to help us answer these questions today, are the key civilian and military officials who are responsible for developing, procuring, testing and overseeing the ford class program. the honorable katrina mcfarland, assistant secretary of defense for acquisition is principle advisor to the secretary of defense and undersecretary of defense for acquisition and technology and logistics on matters relating to acquisition. the honorable sean strackly, assistant secretary of knave for development and acquisition the navy executive responsible for research development and acquisition of marine corps and navy systems. rear admiral michael munizer, director of air warfare on navy staff is responsible for aviation requirements. rear admiral thomas moore, is
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responsible for aircraft carrier acquisition. rear admiral donald grad dis, for tactical aircraft is responsible for naval taxable aircraft and aircraft launch and recovery equipment. honorable j michael gilmore, director of operational test ans and senior advisor for the secretary of defense tore live fire test and valuation of weapons systems. mr. paul franciss managing director of acquisition of sourcing management at the government accountability office who's 40 year career with gao focused mostly on major weapons acquisition especially shipbuilding. we thank each much our distinguished witnesses and thank them for joining us today. in 2002, secretary donald rumsfeld, the office of the secretary of defense and navy conceived of the uss gerald r. ford or cvm 78 as quote, transformational weapons system.
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they decided to develop concurrently an integrate on to one ship all at once, a host of advanced and entirely unproven technologies, including a new nuclear reactor plant, a new electrical distribution system, a new and large flight deck, a new dual band radar, a new new electromagnet catapult system to launch aircraft and new arresting gear to recover them. this was the original sin, in my view that so damaged this program. since 2008, the estimated procurement cost for cvn 78 has grown by $2.4 billion or 23% for a total cost of $12.9 billion. the story of the uss john f. kennedy, or vvn 79, could be worse because the department of defense began bidding it before proving the new systems on cvn 78. while continue to make major changes to the cvn 79 including
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a new radar. this made cvn 79 a second leadership with all of the associated problems. it is estimated cost has risen to $11.5 billion. a $2.3 billion, or 25% increase. and the ship has been delayed five years. to 2024. much of cost growth and scheduled delays for the ship have been due to problems with the major components which the navy has been developing separately. these systems, especially to launch and recover aircraft faced their own significant cost growth and scheduled delays and they are still not ready. for example, the advanced arresting gear or aaag, was billed as more efficient and effective way to recover a wide variety of aircraft on the carrier debt however the development costs have more than quadrupled. it is expected to take twice as
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long as originally estimated, 15 years in total, to complete. as a result, if cvn 78 goes to sea as planned in 2016, it will do so without the capability to recover all of the types of aircraft that would land on the ship. furthermore the cost and schedule programs with aag so driven up per unit cost the navy will be upgrade to nimitz-class carriers with the new system as originally planned. this means by the 2030s, many of our naval aircraft may be able to land on just a few of our carriers. the ford class program is actually symptomatic of a larger problem. the dysfunction of our defense acquisition system as a whole. a decade of oversight reporting that show cvn 78 have been plagued by the same problems found throughout navy shipbuilding and indeed most major defense acquisition
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programs. unrealistic business cases, poor cost estimates, new systems rushed to production, concurrent design and construction, and problems testing systems to demonstrate promised capability. all of these problems have been made worse bit absence of competition in aircraft carrier construction once more, the ford class program exemplifies the miss alignment of accountability and responsibility in our defense acquisition system. to my knowledge, not a single person has ever been accountable, held accountable for the failures of this program. that is due in no small part to diffusion of authority across multiple offices and program managers. these blurred lines of accountability, allow the leaders of our defense acquisition system to evade responsibility for results. everyone is responsible. so no one is responsible. while the navy and contractors deserve much of the blame, the
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milestone decision authority for the ford class program rests with the office of the secretary of defense, specifically, the undersecretary of defense for acquisition, technology and logistics. at and l, is responsible for determining whether a program has a sound business case and for approving start of development and production. the navy can be faulted for excessive optimism and deficient realism but at & l was either complacent or complicit. indeed, at & l authorized navy to start construction of cvn 78 when only 27% of the ship was designed and just five of its 13th new systems were mature. despite 10 years of warnings from independent cost estimators and weapons testtores and gao, at & l failed to make timely and
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course corrections. anyone think congress is above reapproach, we are not. while congressional oversight helped to control the cost and improve the program we could have intervened more forcefully and demanded more from the department of defense and we did not. ultimately all of us need to internalize the lessons of this program. i'm encouraged that the navy appears to be doing so in their efforts to stablize the program. and change their approach to contracting for cvn 79. this year's national defense authorization act also contains several provisions that increase oversight of the ford class program, streamline authority accountability and responsibility in our defense acquisition system. but perhaps the lesson i would most stress is this. we can not afford another acquisition failure like the ford class aircraft carrier, especially in the current physical environment. we simply can not afford to pay
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$12.9 billion, for a single ship. and if these costs are not controlled, we must be willing to pursue alternatives that can deliver similar capability to our warfighters, on time, and on budget. we must be willing to question whether we need to build smaller, cheaper, aircraft carriers that can bring new competitors into this market. we might have to consider rebalancing our long-range strike portfolio with fewer carriers or more land-based or precision-guided weapons. if we can't do better, everything must be on the table. as long as i am chairman it will. i thank the witnesses look forward to their testimony. senator reed. >> thank you, mr. chairman. commend you for calling this very important hearing, not only calling the hearing but your attention to this issue over the many, many years, but your advice and insistence we pay close attention to this program
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and other programs too. the gerald ford aircraft carrier program has been plagued by delays and cost overruns since its inception over a decade ago. today's hearing will focus on many problems we've seen during the excuse of the program. some of these delays and deficiencies are responsibility of the ship builder operating on cost plus incentive fee type of contract and slow to apply modern building techniques, such as the virginia class program. some of the problems stem from including new technologies that were not sufficiently matured into the design of ship. these immature technologies include systems critical for successful operation of the aircraft carrier, answered arresting gear, electromagnetic aircraft launch system and dual manned radar. each of these systems pose challenges and millions of dollars over budget we realize building and designing aircraft carrier is costly exercise,
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committee observed some of these problems could have been solved years ago. there is larger issue into this drama. the flav very was facing inevitable retirement of uss enterprise, cvn 65 was scheduled to run out of fuel 2013 or 2014. this pressurized for starting the first ship in the cvn program which would evolve what would become the next aircraft carrier gerald r. ford. the cvnx-1 and cvn accident h 2 and install systems when they achieved sufficient maturity to involve inclusion. the two step plan was more keeping with spiral acquisition approach by the weapons acquisition reform act of 2009. however, in late 2000 two, the navy was directed as senator
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mccain indicated by secretary of defense to pursue a program more transformational. this involved incorporating all of the new technologies on the first ship which caused dod to make risky choices in the aircraft carrier program. we're living with the results of those choices now in the delayed deliveries and increased costs. the navy is not blameless in this process either. the navy shares blame for failing to lay out potential off-ramps for risky technologies that did not mature in time to meet the underlying schedule. i believe the navy could have done this within the parameters of transformation. while such off-ramps may have not prevented all the problems we faced but would have give us better options when we had unpleasant discoveries during the development phase. the navy and contractor dive blame for starting construction of the ship before sufficient work had been completed on design of the ship. history has shown this inevitably leads to inefficient production, delays and cost increases. finally congress shares
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responsibility for having approved the department of defense approach to acquiring these aircraft carriers. only change to the program that congress insisted upon, legislative cost gap on three ships in the program. while i think this cost gap brought better discipline in the program has not prevented cost and schedule problems. i look forward hearing from the witnesses about the important program about changes that can be made in the future to avoid cost overruins we see today and thank you, mr. chairman, for your leadership. >> thank the witnesses. we'll hear opening witness statement from secretary mcfarland, secretary stackley, dr. gilmore and mr. francis. then we will proceed with questions. we will begin with you, secretary mcfarland. welcome. >> chairman mccain, ranking member reed, distinguished members of this committee, i appreciate the opportunity to appear today to testify about procurement, acquisition, testing oversight of the navy
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cvn 78 gerald r. ford class carrier program. i asked my prepared statement be taken and submitted for the record. >> all statements will be included. >> thank you. >> the cvx program was initiated in knit 96. its developments and timelines expanded numerous ad flip station and as chairman and ranking member noted. the program is subject of many multiple program reviews looking to reduce costs and achieve deficiencies redirected acquisition approach or technical baseline. as with all the department's programs, the cvn 78 had to complete for resources in the president's budget review. while each change in policy, acquisition approach, or technical baseline was made in the best interests of the war fighter, the department, and the taxpayer in mind, the cumulative effect of these changes has resulted in program instability.
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since 2010, coincident with the introduction of the department's better buy are power initiatives this program has been largely stablized. while technical challenges remain, the undersecretary of defense for acquisition technology and logistics continues to work with the navy to taylor the -- tailor the program to assure appropriate oversight at knave staff level and as well as osd. we work together to change processes and policies that impacted ability of the program to succeed, to include revitalizing the acquisition workforce and the skills of them of whom we represent here several thousand men and women who lead our nation's ship bidding acquisition. the timeline and complex 'tis associated with construction of aircraft carriers are enormous and sensitive to wide range of technological, economic, policy and business factors. many of which can not be predicted in time to be readily mitigated. nevertheless we are committed to applying the resources needed to
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keep control of aircraft carrier program costs and schedules for the cvn 78, 79 and all that follow and deliver these carriers to meet the needs of the war fighter. again, thank you for the opportunity to appear today and i look forward to your questions. >> secretary stackley. >> mr. chairman, ranking member reed, members of the committee, thank you for the opportunity to appear to discuss the cvn 78 carrier program. this committee and no one more than you, mr. chairman, fully understands the role of the carriers as instrument of american diplomacy, power projection and global security. george will summed it well in his column just yesterday. the navy's operations on which the sun never sets, are the nation's nerve endings connecting it with the turbulent world. although the next president may be elected without addressing the navy's size and configuration, for four years he or she will be acutely aware of
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where the carriers are. newest of these carriers will be the gerald r. ford, cvnp -- 78, first new design since the nimitz was authorized by congress in 1967. the ford itself will be in service for 50 years and three ship class until almost 2080. it is therefore imperative, as this committee has so clearly impressed upon the department and re-emphasizes here today, that our future carrier force have the capability necessary to defeat the future threat but, two, that it does so at a cost that the nation can bear. designing, building, manning operating, maintaining these incredibly complex ships is beyond any other nation's undertaking. those members that visited the ford under construction fully appreciate the daunting numbers that measure her. tens of thousand of tons of structure, thousands of miles of
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cable and fiberoptics. hundreds of thousands miles of pipe, thousands of compartments, hundreds of ship systems, tens of thousands of sensors integrated to drive a greater than 1,000 megawatt of nuclear power across the globe throughout its life. it is remarkable demonstration what american industry is able to achieve and it's a quantum increase in capability for the war fighter, capability required by our navy in the century ahead. to be clear, however, this program has had significant challenges resulting in unacceptable cost growth. to understand the cause of this cost growth, it is important to understand the carrier's history. as the nimitz approached midlife requirements were drafted to modernize future carriers to traditional serial every solution of ship design and construction. a total of 23 new capability as were to be incrementally introduced across three ships, commencing with cvn 77, at a pace consistent with maturity of
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the related technologies. these development capabilities would provide a 33% increase in the rate at which aircraft are launched and recovered. propulsion plant providing three times the electrical generating capacity and 25% more energy than nimitz, increase service life allowances to allow future modernization, increase survivability and improvement to the combat systems, firefighting systems, weapons handling, basic hull design and 4 billion-dollar reduction in per ship, in total ownership cost over the ship's life. technology initiated for electromagnetic launching system, advanced arresting gear or aag an advanced weapons elevators. weapons, sensors and communication systems would be accomplished by incorporating new capabilities developed or being developed by other programs including dvg 1000 dual band radar, new power
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distribution, automated control systems would be incorporated to improve survivability and react tore plant an machinery control systems with power requirements. super structure or island would be resigned to accommodate new electronic systems and improve flight deck operations. all upgrades would contribute to total man power reduction of 1200 sailors. as chairman pointed out in 2002 with prior put on transformation of the secretary of defense, dod changed course that the three ship incremental modernization would be accomplished in single step on single ship, cvn 78. this decision resulted proven to be critically high degree of concurrent development, design, material procurement and construction. costs were estimated and design and construction proceeded with inadequate information regarding the complexity of the new systems. with inadequate risk factors to account for high degree of
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concurrency sir, ultimately impacting cost and performance in each phase of development, design, build and test of cvn 78. today design is effectively complete and production is near 9 a% complete and we are focused on completing the test program and delivering the leadership. actions put in place from 2009 through 2011 have been effective halting early cost growth on cvn 78, including design from level of effort to completion contract and target and incentive fee. design changes are under strict control. reducing fee consistent with contract provision, yet incentivizing improvements upon current cost performance. removing overly burdensome special if idations that imposed unnecessary costs. competing sources of supply to mitigate significant impact of material delays, raising completion levels at each stage of production, to improve production efficiencies.
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meanwhile following detailed, non-mccurdy like review in 2009, the navy converted the contract to a firm fixed price contract for production to cap costs on each of those systems. and ship builder subjected its build process to review by competitor shipyards in order to identify fundamental changes necessary to improve their performance. finally, management changes were instituted and coupled with increased readiness reviews, focused on cost performance and critical path issues to insure we're doing all that can be done to improve cost performance. i personally conduct reviews on no less quarterly basis, often monthly, assigned for bass dozen years, rear admiral moore, with greatest experience on carrier operation, construction and program management ad as the program executive officer.
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we confront impacts concurrency on cvn 78 we made essential changes to eliminate cost growth and improved performance on cvn 79 and 80. as reported in congress in may of 2013 requirements for cvn 79 are locked down. the design model is complete and 80% of the initial drawings released. new technologies on cvn 78 are virtually mature on cvn 79. materials are being ordered efficiently and on schedule. the ship builder leveraged lessons learned and made significant investments to modernize tooling and facilities and implemented build sequence changes to drive down production costs. navy simply meanting a two-phase delivery plan to allow basic ship to be constructed and tested most efficient manner by the ship builder, enabling systems and compartments to be completed in second phase where the work can be competed, accomplished more effectively and use of skilled installation
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teams. the net result of all of these actions was recent award of cvn 79 as a fixed price construction contract that in conjunction with gfe, government furnished equipment, procures cvn 79 at or below the congressional cost cap. we're on target on cvn 79 and will continue to reduce future costs of ship of class. mr. chairman, you raised questions about accountability. i'm accountable for the decisions make about this ship or navy, marine corps program which i'm acquisition executive this simple statement doesn't adequately address your concern. the current system is challenged to align responsibility, accountability, and decision-making for large complex projects that take years to develop and deliver. this program in particular has spanned four secretaries of the navy, six chiefs of naval operations, four naval acquisition executives, six,
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defense acquisition executives, four program executive officers, four program managers, and eight congresses. gaps and course changeses in decisions have been critical. the decision to pursue a transformational approach, driving three incrementally enhanced ships into one was made for what was believed to be the right decision at that time. as the acquisition executive, what can be done to stablize the cost on on cvn 78 and cost improvements on remainder of the class i believe is being done. we have much further to go in this regard but i believe we're on the right path. going forward, under the secretary's direction, cno, commandant and i are changing way we do business within the department of navy to achieve much greater clarity of authority, traceability, to cost, visibility to performance, and therefore, accountability for cost and schedule on our
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major programs. we hope to have the opportunity to share these details with you and your staff. in sum, the navy is committed to providing sailors with the capability they need to perform missions around the world, around the clock, every single day of the year. we strive every day to do this in a way that enhances affordability, while insuring we maintain robust industrial base to hedge against an uncertain future. we look forward to answering your questions, sir. >> thank you. dr. gilmore. >> mr. chairman, senator reed, members of the committee i will briefly summarize my written statement. whether the projected quantum improvements and combat effective productions in total ownership will be realized with the new systems being incorporated cvn 78 are not now known the navy indicates reliability of the emal, advanced arresting gear and dual band radar will support initial
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operational and test valuation in the first deployment. most recent definitive data i have indicate the reliability of emals is below the navy's goal by more than a factor of 10. the reliability of the dbr and redesigned aeg are unknown. we have only engineering estimates. very little test data. prior to redesign, aag was 800 buy low its goal. redesigned aag will be available later this year as a result of ongoing testing. in the case of emals, navy notes deliability is above the december 2014 reliability growth curve. however as consequence of poor performance in tests that growth curve was rebaselined well below reliability goal. data indicate emals was not on path to meet its goal. what the effect on combat effectiveness of shortfalls, ultimate reliability of these systems could be, will not be known until developmental operational tests conducted
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postdelivery. in particular the specific nature of the failures encountered and difficulty of repair will be important to understand. in that regard the navy recently indicated that emals installation on cvn 78 that failures could result in multiple catapults being down for extended periods. this is because there is no ability to readily electrically isolate components, permitting as in current fleet operations maintenance on not operating catapults while operations performed on operating catapults the schedule of activities for cvn 78 sub extent to it is delivery including timing and number of independent steaming exercises determined primarily by navy certification and safety requirements operational testing and strike combat operations which can not being accomplished until carrier air wing are
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complete will be conducted as joint task force exercise integral part of the navy's evolution for ship and her crew. the plan to test systems realistically as early as possible to drive feedback to the component office and combine training and testing. current test schedule is in my view aggressive with current ship based and land based developmental testing and some developmental testing first important integration testing past the start of operational testing. in august the deputy secretary of defense directed the navy to conduct a full ship shock trial on cvn 78 before the ship's first deemployment. historical experience indicates this is clearly key means to identify and mitigate mission critical failures before the ship and her crew deploy into harm's way. finally cvn 78 was designed to reduce manning to eliminate total ownership costs. recent navy assessments raise concerns been maaing issues that would only be exacerbated by any
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shortfalls realized in reliability of emals, aag and dbr in particular the manning war game three states, front end analyses have not been finalized to capture the true maintenance and operational work load with the carrier's new systems and that will not be possible until we know more about reliability will actually be and maintainability will actually be. thank you. >> mr. francis. >> thank you, mr. chairman, mr. reed, members of the committee. i appreciate the opportunity to talk about the carrier program this morning. let me start with the cvn 78. a little feet back there. my bottom line on the cvn 78 is same story, different program. in 2007 we reported that costs were likely to be underestimated by 22% on the construction of the ship. and that the three main technologies, emals, aag and dbr, were immature, likely to slip to the right and out of
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schedule margin and we said the navy would be faced with the decision to either push the ship to the right or push the technologies to the right. fast forward to today, 2015, cost increases are 22%. the three key technologies, don't have the slide up, they have slipped about five years. so the decisions made to keep the ship construction schedule pretty much intact but the let the technologies slip. so, that is probably hard to see. but the top chart, we have circles here. 3, 4, 5, and 6. those are the three key circles technology in beginning ship board testing. original plan on the top was clearly fly before buy. where we are, three technologies and ship board testing have slipped past ship launch. that is buy before fly. so my, my view at this point, ship costs are going to continue
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to increase, full capability of the ship has been deferred right now we're looking at getting less for more. why would i say that? i remember 25 years ago i was interviewing the second undersecretary of defense or at & l, john beatty, he told me, cost estimates in the department of defense, not like they're i amable to be achieved but they do count on hitting seven home runs in the bottom of the ninth. so i apologize for the sports analogy but it is not mine. look at the home runs that the cvn 78 has to hit. and you can kind of see them bunched up lear. do land-based testing ship-based testing, integrated testing iot and he, all the time we're trying to complete construction. it's a big list. go to cvn 79 the, what are its home runs? right now the cvn 79 cost
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estimate depends on reducing construction labor hours by 11%. 9.3 million labor hours. never been done before. twice of whatever had been done in the past. the dual band radar has been removed. it will be replaced with a radar that is to be determined. and upgrades planned for the ship have been postponed. so i think that is ringing a lot out of the program already. it is already, with all these changes at cap and we're seven years from delivery. i think cost increases are likely. regardless of what's reported against the cost cap. i like to put the carrier in a little context here against acquisition, and i think, mr. chairman, you brought this up, as did mr. reed. the cvn 78 program is a typical acquisition outcome. 22% increase in cost, schedule delays are actually pretty typical for acquisitions.
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mr. chairman, i testified before you a number of times on different things but we can think of worse examples. jsf, fcs, f-22, lcs. so, i think what's different here is this program, we knew all along this was going to be the case. we shouldn't be surprised by anything that has happened here. we saw it coming. it is not and i told you so moment. it is we all knew it. you ask yourself why does something like this happen? best practices are pretty well-known and we can go through them. mature technologies before you put them on the program. wasn't done here. go with realistic cost estimate and budget to it. we've always gone with the lowest cost estimate, the navy's estimate and we still are. and fly before buy. it wasn't done here. you ask yourself, why don't we do these things? and, my belief is it is prevailing acquisition culture. it's the collective pressures that the different participants
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bring upon the process that create incentives for programs to overstate what they think they can do, to understate technical risk, to understate cost, and to understate schedule. that is how you get funding and how you get programs approved. i would just like to say where does this leave us today? and i'll say, i know it is popular today to talk about the acquisition process being broken. but i think it is in a happy equalibrium. maybe not so happy but it is in equalibrium. it has been this way for 50 years. i think it is going to stay this way until incentives change. and as the chairman, excuse me as the chairman said, i have been in this job for 40 years. i haven't given up hope yet. and i believe that congress is the game-changer here. i think congress can change the incentives by reclaiming its oversight role which i think has
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been diminished over the years. excuse me. so what do i mean by that? i will cite three things. first the most important oversight tool is initial funding you provide to a program. but you give that tool up pretty early. so if i'm a program today and i'm at milestone b, congress had to approve my funding two years ago. information was less. optimism fills the void. there is a cardinal rule in acquisition, says, don't take money off the table. once you have approved my funding, two years later you actually made the milestone b decision for me. second thing is, i know, the committee has many, many heavy responsibilities but one of your responsibilities is you're the appeals court for the services. if osd says something a service disagrees with, and i'm speaking broadly, if mike gilmore's shop
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says something that they don't agree with, if the cape estimate they don't like, if it is a gao recommendation they don't like, the services come up here. you're the appeals court and they try to strike a deal. and they get those deals. then finally, a movement in the department, and i think particularly with the navy to bundle up programs in multiyear procurements, block buys and option contracts, not only do you give up funding, initial funding power, you can't touch the program afterwards because it is all locked down in a block contract. so, i guess my appeal to you, today, is, let's not think of cvn 78 program as the story per se. let's think about it as object lesson in acquisition process and acquisition culture. and what the congress can do about it. not just telling what the
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department can do, but how you might do differently. i really think what you do with money sends messages as to what is acceptable. thank you, mr. chairman. >> thank you, mr. francis. have you seen some of the changes we've made in acquisition and defense bill that we passed through the senate? >> i have, mr. chairman. >> is those steps in the right direction? >> i think they're in the right direction in many cases for the department. but i think as, you said in your opening statement, to the extent that the department comes in with a bad business case, if you still approve it, and fund it, you're sanctioning it. so with all of those improvements in acquisition reform legislation, that has to be coupled with what you do on programs. i think a couple of good nos would be healthy. >> i think senator reed and i realize we're just beginning in
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acquisition reform and, we will continue to make it our highest priority. secretary mcfarland or secretary stackley, is there anything you disagree with that mr. francis said? >> mr. chairman, i was paying close attention and taking notes and, if i were changing places with paul, looking at this from his perspective i would think i would write a very similar summary with some minutes i don't want to quibble overright here. but i think his summation of some of the systemic issues i think they are, i think he is correct on spot and what i would, what i would suggest is that we are making some systemic changes on our side and you likewise with the congress to try to address these issues. and i don't give up on them. . .
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paul hit the word incentives, and the context that he uses i would make a much broader. if you look at the complexity of our acquisition system starting with congress back into program manager and industry, and since across the board are not all of i'm to the same outcomes.
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as long as that is true with forces pulling in opposite directions. >> i would like to direct the witnesses attention to probably one of those egregious aspects of these cost overruns and, of course, that's the advanced arresting gear which from an original estimate of $143 million is to estimate of $1 billion. it grows so much that two years ago this, just this aspect of the carrier had grown so much to hit the threshold to become a major defense acquisition program. and it continues as we mentioned to go up. understand the navy has assessed how the contractor has performed on this program, is consistently substandard having significant difficulty meeting cost and schedule targets that we ask the contractor management officials,
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the territories of this type of performance to my staff is typical or average. secretary stackley, do you agree with the characters that across growth of 6% is typical or average speed was absolutely not, mr. chairman. >> secretary mcfarland, on page three of your statement you said acknowledging that be problems about the largest effect on construction you stated these engine design problems are now in the past and that's in your statement. and yet i haven't from the defense contract management agency evaluation of the performance on this past month that directly contradicts your statement. in fact, expect additional delays due to issues have not yet been resolved. i understand you see the defense contract management agency. tell me what's the disconnect between you and the people that
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are making this estimate about the aag? and can you come -- can you assure this committee that this cost increase have stopped? >> chairman, i do not believe that the costs have stopped. i do believe the majority of the engineering aspects of this program in terms of technological risks and development have been retired. there's still testing to be completed. there's still opportunities for risk to be realized as part of the effort and i do believe that there will be activities in front of us. it's essentially that we have in front of the program that have sunk a lot of effort into getting to where just commented about good with the opportunities that this is as operationally to provide for the carrier does not make a good business case. >> thank you. i would just point out that recently manufacturers of the new tanker experience cost
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overrun, they absorb that cost overrun within that corporation. i wonder if maybe we should make that a standard procedure here in defense contracting. i think it should be a subject of a lot of consideration. senator reed. >> thank you very much, mr. chairman, and first, doctor gilmore, you are urged the shock trials be conducted on the cdn 78 and is not going to be done on the cbs dashing cvn-78, be shipped to the 79. we wrote to the navy basically accepting your advice and your opinion. why is it so important that these trials be done on cvn-78 and not divert? >> as i mentioned in my testimony, the deputy secretary
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decide to direct the shock copied on 78 reports first diplomat last month. you made that decision but it's important because history has shown clearly, if you shock trials have shown clearly that they are the only way to discover mission-critical failures. there has been some claim that shock qualification testing which by the way had not been founded for the forward class, it had been divided, not the navy says it will do it, and simulation are sufficient to but if those were things sufficient we should never see any mission-critical coach when we do shock trials which are conducted unless the design level shock, but we always do. and i think it was the captain who sent to the committee a letter, he was that coo of the princeton when it was hit in the persian gulf, indicating his expense with the shock trials another provided that
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information, that enable this chip to survive and function in the gulf after being hit. so the history is clear that he will not know about mission-critical failures and lets you do shock trial, and i can assume and i know that the history that we present to the deputy secretary of the secretary figured in the decision. >> just for the record, secretary stackley, you are onboard, no pun intended, for the shock trials of the cvn-78? >> we are moving out. dr. gilmore's reference to the component testing. the component testing was being fined up with a potential cvn 79 full shippe shipped shock trial. removing the back to support the cvn78. >> thank you. let me follow-up, secretary stackley, with the bishop of -- particularly when this was decided in 2002 to be a transformative technology and
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risk went higher. in other cases you have used the off ramps. i know with the ddg 1000 you are able to select a different type of motor when the desire or at least a breakthrough technologies and -- materialize. what's your position with respect to the cvn-78 and 79 and others, do you have a backup or are we just going to follow this down to the point at which you can't work? when the point i think cindy mccain made for useful was a bit of a system that cannot become in every type of aircraft in the because for all of our carriers, then we are diminishing our force projecti projection. >> yes, sir. you are touching on the off ramps is striking a chord here. the amount of risk that was
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stacked up on cvn-78 without adequate off ramps put us in just in an untenable position where we ran into issues. i made reference to this, not like the review we did on females in the 2900. that was with concern, cost and technical regarding the program's performance. at that point in time we had, the ship was off and running in terms of production. when you look at a potential offramp, it would have caused a significant holes in the production, delay, complete redesign that many of the ship systems to bring us feedback up to the flight deck to go to an alternative. so there was no tangible offramp in that regard. anand much of are focused in the game with the work, army golf and the system will work, can we cap the cost? that ended up leading to the decision and, frankly, that coo chairing the decision for that will press on because of the trades and costs one path or the
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other comed, the about on sched, the impact on performance if we were to the point in time take and offramp that we had not planned. going back in time, if we had the ability, we could have, in fact, laid it in offramp in the early design stages of the cvn-78 in the event that we determined it was not mature enough. i think this manifestation of what became a highly compressed timeframe for development, design, production and also decision-making that precluded that. your example of the ddg-1000 going from what was going to be the permanent mode which was high risk, failed the test, we had a backup ready in shinseki advanced motor to prove -- and that has proven very successful in terms of its completion of development, installation and test on the program.
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>> just very quickly, going forward speak with yes, sir. >> one lesson is that when you're doing transformative technology, very high risk technology, will you always make it routine to have in offramp? >> yes, sir. our assessment of technical risk, if you have a high risk system and would bring to a production program we got to keep a hand on what are our alternatives at least it's her decision point with the confidence is compelling to go forward speak with thank you very much spin you specifically about e-mails and aag going forward. we have the confidence. we conducted thousands of cycles in the system. recalled what we refer to as fatigue testing come highly accelerated lifetime testing between the test and -- system imaging performance that we need. apg is behind what needs to be. obligated that dr. gilmore referred to in terms of reliability, that's not because it's poorly designed. that's because we're behind we
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need in terms of time demonstrate test, fix, test fix we have that merge between development and production going forward in terms of an offramp. first question, every meeting i have my start with mysticism going to work to make sure there's no doubt, no question that there is we're addressing it. mr. chairman describe how to was a plan to back the aag on all the carriers and it's proven to be not affordable. that's not affordable as much because of the impact to the carrier and the cost of the aag system itself. but if we had to we could. >> thank you. >> how many years have we been seeing that remarkable record? senator ernest. >> thank you, mr. chair. secretary mcfarland, gentlemen, thank you for being with us today. secretary stackley, test fix,
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test fix, how long are they going to continue to do that? >> when it comes to every developmental system, we are still doing test and fix on the ddg-51 aegis system has been in a ple play for 30 years. there's going to be a continual test and fix it to bring in upgrades and added performance improvements. on a specific systems we're delivering to the cvn-78 will be in a test and fix mode right to operational testing, identify for the issues and operational testing just like we do every major weapons system would bring to the fleet and continued to fix those. did a test and fix primarily primarily is software really. software, not hardware. >> or is the carrier right now in? >> cvn-78 is about 95% complete at the piers at newport news shipbuilding. >> been sitting in a shipyard, correct?
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>> yes, ma'am spent iowa, we don't have shipyard. the only time it matters to the folks back home for me is when they're actually out there operating. now, across military services i have been told that 90% solution on time is better than the 100% solution too late. and at some point is going to be too late. we are rapidly approaching that. now, you have been the assistant secretary of the navy for research, development and acquisition since 2008. and that was the senior cvn-78 procurement was authorized. have you ever received adverse action by the navy or dvd due to the delays -- beauty, at the $2.4 billion in program cost growth? >> no, ma'am. >> has anybody within your chain, your structure, have ever received adverse action for
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this? >> the chain, yes, ma'am. >> and can you describe those actions to me, please speak with there was a program manager associated with the aircraft launch and recovery equipment wawho was relieved of his responsibilities. >> what love was he? >> program manager our captain of the united states naked. >> secretary mcfarland, also if you received adverse action? >> no, ma'am. >> has anybody within your structure been reprimanded? >> not to my knowledge. >> folks, this is, i can see a lot of folks have been let go for a lot less. and you can tell i am extremely frustrated with the cost overruns not being on time. there's no excuse. you can talk about all the geewhiz gadgets that you want. that's fantastic, but i would to your this is affecting all of the other services as well.
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i still serve in the national guard. i am a ground pounder, great, good for me. we are losing in the national guard with the new ndaa. 8200 national guard soldiers, been cut 1100 dual steps technicians, losing 800 active guard and reserve members. we are being cut forces and at some point this is going to hit the navy. if we keep spending money on geewhiz gadgets are sitting in a shipyard, someday you may not have the sailors to get that thing out of course. it's affecting everyone and our taxpayers are going to hold anyone accountable for this. everyone. i am really upset because i have been working very hard early hours, early months of the work here in the senate in this committee and on homeland security trying to restore the program management process. and i had a bill passed
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unanimously on program management and to try to get something into the ndaa, specific for the department of defense but, unfortunately, it didn't survive the conference and i am baffled, baffled by the focufocus on program management. and cost overruns. this is in epidemic and we've got to do something about it or i'm sorry i'm on a soapbox but you can tell that i'm upset in the folks back home are upset because new is any good unless it's actually out there providing protection for the united states. and if we keep sitting on it not moving forward in a timely manner come it doesn't do us any good. so i'd like to hear a response. just when are we going to get this done? anybody, anybody, please still let me specifically addressed cvn-78 in terms of when she will deliver to the navy. the cvn-78 at one point i will be at 2006 procurement, delayed
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to 2007, the late the 2000 for budget purposes. as was described earlier she was tied to maintain and often carry your navy. they were at the income requirement is for 11. since the ship was put under construction there was a four-month delay of launching a ship and that is associate with getting completion levels to a higher level to ensure that we could control the costs going forward on the program. since that time is a six to eight week delay we announced a couple weeks ago which is tagged to ensuring that we maintain the discipline and cost and escape the bounds of the test program. we have not moved the delivery date. we change the trials of day. today we're still targeting, april, good going to me, delivery date for cvn-78 all of that lines up to get the ship on a scheduled deployment in 2019 spend i appreciate the response. i hope everybody understands my frustration as well as the other members on the committee.
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this has got to be corrected and somebody needs to be held accountable. >> center ernst, and make a comic? >> absolutely. >> i think your concerns about the budget are well founded and how those bills are going to be paid. i think if you look at the cbo's analysis of the navy shipbuilding plan, if it's executed as it is hardly planned the navy will need 30% bigger budget than it has historically done, so that's on the navy site. on air force side we have the tanker, jsf at a long-range strike are coming. at the same time the army is shrinking. so those bills are going to have to be paid somewhere, and if they are higher than we think now, we would be in real trouble. the program managers, i remember we are adhering to a few months ago and you'd asked me a question about that. one thing i want to bring up which i didn't and was we really put program managers in terrible
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positions. when we create this is cases where a program is under estimate and is in a scheduled to get things done and technology is immature, we put a program manager in that position and they have to do two things. they have to manage the program and participant, at the same time have to defend the program. so what we do with our program managers is not what industry does come and we grind really good people. why do they take the jobs? >> exactly. thank you so much. >> may i make an operational comic? >> absolutely. >> captain john maier indiscriminate mood aboard. there in the galley aboard forward. the crew is extraordinarily happy with the ship at this point. secretary stackley is out on the retirement of risk and the time level to do that. the warfighter does need to ship and were pleased with the fact that the crew likes to keep the building where delivering their and the statement referred to that capability, yes, ma'am,
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absolute gospel and takes longer but we will have the ship delivered with a higher capability by the time it did was add up like to know for the record the crew is very happy with the technology we are delivering to the warfighter. >> thank you, admiral. i will make a closing. i have gone way of my time but i will take it $2.4 billion is a lot of of armor that could help the guys on the ground as well. we could've saved a lot of arms, a lot of leaks, a lot of lives if we had that money allocated in our budget as well. thank you. >> thank you. on behalf of the chairman let me recognize senator manchin. >> thank you, mr. chairman. let me just say it's unbelievable to sit here and listen to this. i'm reminded in 1961 farewell speech of then president eisenhower in the councils of government we must guard against the acquisition of unwarranted influence whether sought or unsought i the military industrial complex.
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mr. francis can i don't know, i would like to know how you're able to do this job and be can keep from being so frustrated, seeing direct -- recommendations, the forecast that you put out all these years and knowing that deficiencies will happen. has anyone followed those people who i've left on ice think someone mentioned her, how many people that were in charge whether it be from the secretary on down, how many have left during the process of some of these acquisitions and where they have gone to work afterwards? >> i don't know that there's been a comprehensive study. spent back home we always say all the money and you can figure out what the problem is. >> i think there's a fair amount of government personnel retiring and moving to industry spent do they move to the same industry
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is that they were in charge of overseeing? >> there are laws about conflict of interest, if they apply to different levels. they have to abide by that but many of them to eventually do that. >> i understanding and listen to the testimony of that there's no repercussions whatsoever. i think the last statement was made by secretary stackley come nobody at higher level has ever been recommended, relieved by whatever for intrepidity a summit at a low level has been, one person was mentioned. back home in west virginia if we build a home and it goes over budget and later on to build another home, you would learn from the first, and the definition of insanity is continuing to do the same thing thinking you'll get different results. you would think sooner or later we would learn. >> i think sean made a good point when he, these programs takes a long. the leadership changes at every level so many times that we're starting over again.
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the people who are in the position of don't remember what happened then. i will also say i don't think this is a case of bad actors. i think these are people trying to act rationally in the environment. i'm not accusing anybody of being a bad actor i'm accusing probably a system the way it has evolved over the years. president eisenhower saw something coming. there's something that got his attention for him to make this statement in his farewell speech. and being a military person, if we operated in one or two probably was thinking the way he saw the evolution of industrial complex military, god help us in world war ii, probably. i missing something stoked his interest to say we've got problems can't be careful. you telling me this has evolved for 50 years. so he had tremendous vision back in november going down a slippery path giunta sang a look at what china is able to do. if you look at other able to
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advance and jumping very quickly. i'm sure there are other other ways of acquiring the information they're getting and with suspicion about that. but still yet there's a process to move the able to do things in a much quicker timeframe. what recommendation would you make to all of us here and people who make decisions and people that maybe can change the law or create laws would help us were prevented this from continuing? at the gao we pay no attention to all. it's a shame. it should be a lot when jailed makes recommendation we should the opportunity people to give an answer back we accepted your recommendation for what we don't accept a recommendation to its principal. myself as, and former senator coburn try to get that done. someone has to enter what you are seeing. what's your recommendation? >> i actually don't think it's a matter of law, regulation are telling the department to do anything. i think it's, when you're making
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them your biggest opportunity is when you're approving a new program and you have to scrutinize that program for what principles it embodies. so if you really believe in mature technology before you put them in a program, if you really believe in flight before viacom if you believe in realistic estimating and scheduling him at the program up that doesn't measure up, you've got to say no. >> the gao found in 2010 agendas, the forward class aircraft carriers leadership began construction with an unrealistic is this case. you identified that. did anybody hear of whoever was there at the time, did you talk to you for education and information what of mission what you saw in evaluation? >> yes in terms of the report but i believe this is the first hearing a carrier or outside witnesses have been invited.
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i think that's right spent i thank the chairman for that because he's had some great hearings for us to learn to love it more. i appreciate all of your services. is a gentleman we've got to change. $18 billion of debt is underfunded from the standpoint, our lack of direction. mr. francis, thank you. i would love to meet with you later on. >> i would like that. >> thank you spent i thank the senator from west virginia for his involvement and his commitment on this issue. senator tillis. >> thank you, mr. chair. mr. francis, i think it opened up your statement by saying the same story different program. the also common in your opening statement about this committee and the senate or congress as a whole playing a more aggressive oversight role that we have over recent years. can you give me some sense of
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how much of that is going forward with new programs? how much of it should be applied retroactively to this subject or any of the other major project that we have? what are your recommendations to this committee for what specifically wished to, say the next committee meeting or over the course of figure? >> i would say right now we are kind of in a period whether or not as many big new programs coming down the pike, eventually your opportunity. i don't know how much you can do on a program that's already to the milestone and under contract with the making more of a mess of it. >> maybe just going back, i think he used the analogy of seven home runs in the bottom of the ninth with respect to this graphic. to what extent do we need to go back and say we know, i think maybe the twins did it to the tigers, but it's very uncommon to it was widely reported as a
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result. so what do we need to do with respect to this timeline about being realistic and we're going to have a timeline that we're going to achieve a what do we need to do to places just to come back and have the same frustration that senator ernest has about we sit, we know that likely to happen, therefore what should we be doing to set realistic expectations about what's already in the pipeline. >> for something like this i would say, i think the navy has moved the schedule out a little but so far on testing i think you have to make it okay for the navy to come up and say we need to move the schedule and it's going to cost more. it has to be okay. right now we sort of places, we are on egg shells because the navy might not want to come in and say that because they're good to take a beating over increased cost. we kind of play -- >> i'm waiting until that happens.
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i will tell you, somebody who's been responsible for long-term complex project, that's when people lose their jobs. i think the thing we ought to put on the table now is if you come back and you explain to us why you're going to initial dates, that becomes our problem come to become senior leadership's problem in the department. eqa and ultimately realized overcome to us and i to say we were wrong, then somebody else needs to lose their job it's a matter of this problem is. i'm not signing any one person but it seems like it's obvious that we're going to have to pull a rabbit out of a hat to achieve these days. somebody owns the responsibility to speak about that and set the right expectations. if they don't then they need to own it. i don't think you disagree. i think going forward because you said it's the same story different program.
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we do need to come up with some sort of findings of fact he for we've approved future programs so that we can really have people on this going forward instead of having it come as senator manchin said, the insanity that seems be driving a lot of these large complex programs. for the admirals a good ask you just a general question. first off with respect to china, i know you spent a lot of time trying to take the edge off of our quantitative disadvantage with let's accounted like china that is churning out a lot of ships by the qualitative advantage. but as admiral harris said, quantity has a part of its up at some point our capabilities making that being matched by the sheer quantity that some of our potential adversaries are building up. what was so important in terms of some of the unproven capabilities that are going on to these ships? what sort of leaping
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capabilities justified the cost overruns and the basis of the discussion we're having today? >> senator come as director of our warfare i'm responsible for stable of requirements that go into our acquisition programs. when you have stable requirements you control costs or at least that's what aspect of controlling costs. we develop the forward class carrier starting in the '90s with actually before that, a look at the future of aircraft carriers. we don't look at only one country. would look around the world the potential conflicts and to take the complex from relatively low into conflict like you're sitting in northern our baby gulf, the carriers operate over the top of northern iraq and syria. would look at higher end conflicts against countries who can't to technology attempt to match our capabilities. we do campaign modeling.
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we have names within like thunder in storm at thei storm t campaign models using u.s. air force, u.s. navy, u.s. army and other military assets to affect that campaign. as has only been stated by secretary stackley, the united states navy nuclear power is a chess piece in our navy. those chess pieces are a critical factor on the campaign plans we bring forward. we would look at the future and the way the threats around the world were going, we divide pashtun we devised before class with 33% great capabilities with advanced technology and electric capacity and with e-mails at aag and ability interesting airplanes on and off the she. and other technologies around the shoe. that campaign model looking at threats around the world is what delivered the requirements is the result in the forward design you see today. we stabilize those requirements, that is one aspect of stabilizing the cost to
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schedule. >> if i made from a pure acquisition standpoint, the reason we built at the forward class is the in this cluster and to reach -- nimitz class is starting to reach the end of its usefulness. the other thing is that the nimitz class was built in an era where people were relatively inexpensive. from a total lifetime cost perspective the nimitz class was very expensive. people make up 40% of the cost of the ship over its 50 year service life. it's berger as we went forward not only do we need the war fighting capability but we had to drive long-term affordability over the 50 years. the most important thing we could do was to get people off the she. that requires complete resides issued some of the things you were saying, that onto to provide operational capability they also provide a significant reduction for the people on the she. we will take six under 63 sailors off the word in 30
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minutes, 1200 when you compare the air wing. net result over 50 years the cost to buy the ship own and operate and maintain it will be about $4 billion less than amendments class carrier today. >> well, i must say all those things that both admirals pointed out are undeniable accurate, but those numbers there are totally unacceptable and i hope you realize that. i'd like to point out that senator kaine has been more involved in this situation regard is carried in any number of this committee. he has been very constructive. he spent and will be helpful in informing this committee, and he is a strong advocate for the men and women who are doing great work and construction of these aircraft carriers, and arguably one of the finest shipyard in the world. senator king.
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>> thank you, mr. chair do you think it took him about the shipyard i'm proud to rep that the thousands of shipbuilders who manufacture the largest and most complicated items on the planet earth, nuclear aircraft carriers and subs, made from north carolina and virginia who work at the shipyard. they did make the decision abot putting all the new technologies on the first in class a before class. they also didn't develop the weapons systems and the aag and e-mail system and then come look at it. those were developed elsewhere. they're working to install the but i've been on the ship many times and seem to work, i saw the court inserted into the ship one day. i've seen the navy take control of the ship in recent months him and they are very excited about it but a couple of items. cost overruns, and i agree that there's very system issues that are demonstrated that we need to tackle. cost overruns, i would say a lot of this is less than overruns and poor cost estimation. i think you unpack what cost
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overruns are, poor cost estimation. before 2010 when the navy was talking about their cost estimate on this project to this committee and others, repeatedly the navy said that their confidence level and the cost estimate was less than 50%, or even in some cases less than 40%. isn't that correct? >> yes, sir. >> i gather that was because first in class and the addition of all these untried technological systems as mandated by a previous -- it was one of the reasons the confidence level was low, is that right? >> yes, sir spent let me talk about first in class history because esther francisca you talked about this is a similar problem which just an example. i think it was a cbo study with elected navy acquisition programs and look at first in class over a variety of programs and he basically concluded i
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think that as a general matter first in class acquisitions and should building tend to be 30 or 40% higher than the estimate that the navy has begun with. isn't that essentially to? >> yes, i think it may stay that we have listed the most recent the first in class and average cost increase is 28% speaks on that going to defend 23% as better than average but to put in context, isn't that unusual? may be the thing that's more important is what happens after first in class. first in class on the ticonderoga class cruiser, there's a lot of problems, and obese $1 billion walrus of the ics potentially dangerous stability problems. that was the assessment in 1982. that program ended up being significantly improved as it moved along.
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the destroyer was called the navy's billion dollar hole in the water another sample of the navy try to itself to the poor house and the cadillac that was the "washington post" in 1986 are generally that acquisition program significant improved after the first in class, one that i would love marcia curtis the virginia-class sub ring that's done intended between the shipyard in newport news. that's turned into a very successful acquisition program but wouldn't you agree the first in class that had some significant challenge and cost overruns or cost estimation problems? have a basically given a secret on these three, speak with your absolutely correct. one important thing to keep sight of isn't each case unlike other major weapons assistance programs there is not -- collegiate is the prototype, the first opportunity to bring these complex systems together,
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integrate, test and our uncertainties come on nobles and risks that get brought to the ship in production when it is most costly to find and fix those issues. >> i love try it and buy it. for some weapon systems actually what you do. you don't start but, try and buy. the prototype is actually does what you often see difference between first in class and the subsequent history. utah, secretary stackley, about the changing and the contracting mechanism between 78 as a cost-plus to 79 as a fixed cost and unassuming '80s will be fixed cost as will? >> yes. fixed price contracts spent and violent launches, senator tillis asked a question about the savings. action for much we talked about the cost of constructing the cost of operating is even larger
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our platform such as this because they have such a long life. and i gather one of the main design features of this is to put in physical design to dramatically reduce the number of sailors and then drop the personal cost by about $4 billion. it was either dr. gilmore or mr. francis who said yes, there's a projected savings in personal cost but we haven't achieved it gets. we have to see whether that's accurate. there may be some challenges that would reduce that. but i do know those bring down the number of personnel is one of the main advances over the nimitz designed as part of this war class. august i think the committee should stay very much on y'all. we should all stay out of to make sure that actually achieved. i strong support that shares acquisition reform strategy. what we did in this years ndaa was important but i think i sort i see that as just a down payment on what we'll be doing
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going forward and i think it's important that we give it. >> can i make a couple comments? >> please. >> first on the contract for the cvn-79. the current contract is fixed price but the cubs about 45% of the construction cost. 55% has already been paid for under cost-plus contract. keep that in mind. and then i think you're exactly right. the first of class of any weapons assistance and to have a lot of trouble with. and then later on we kind of get comfortable with the fact that we worked out the problems that are being looks good. it creates a little complacency. i think the challenge for us is if we repealed having trouble with first article and it's not just navy, what is it we can do in terms of estimating risk analysis so we are not making those same estimating errors every time to? >> could i add to that? i think it's important this
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committee has accuracy from the director and information package that showed a since the implementation that the cost of switching techniques were improved because we were given access to information and data right directly from contractors, and it shows the disparate as this between the service costs position have gone adding medium from over 6% to less than 2% and 3% which is in the margin of error. over the last period of time, what the senator points out is exactly what needs to be done to improve our future understanding of how costs have gone. >> but isn't it also true that the delays in cvn-78 that a significant effect on the cost of cvn-79? >> yes, sir. there's a program plan for the
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carrier cvn-78, 79 and 80 have been shut down programmatically and budgetary. as i described earlier seven it was going to be an 06 carrier, he can go seven and then away. into 2008 ndaa the navy was authorized to procure 78, sir nine and 80 which was consistent with 12 carrier navy. a decision was subsequently made by the department of defense they're going to stretch that out to five year centers. so now the cd and 79 which was going to be an earlier carrier is not put under contract until 2013 budget. the '80s was bumped for the. so the program has been stretched out that has brought frankly more cost to the program. >> sarah ayotte -- senator ayotte? >> thank you, chairman. of what you think i'll be. i just wanted to say that i think one of the challenges,
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mr. francis, the referenced this in your testimony is, he we cq today billions of dollars of overrun, and people are very frustrated by it. and decided also the jsf program, the littoral combat ship, they were worse than that this is a typical acquisition outcome. so here's the challenge. we've got to change this dynamic because we've had the leader of all for all of our military rightly coming in and testify about the impact of sequestration. the fact that we are going to diminish the size of our fleet, that we need more ships, attack submarines, more ground troops, obviously more fighters in addition we have a drink of course our men and women in uniform. and then my constituents look at
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these billions of dollars of overruns that of the multiple examples of it and look at us and say, why aren't you getting with that? we are going to give you more money, then we need you to deal with that. so all of us who care deeply about making sure that we do what needs to be done to defend this great nation. this is an issue, it's got to go from being the bottom priority to a top priority. the one question i would ask all of you, whoever is the best, secretary stackley, mr. francis, whoever is best to answer this, you mentioned a line responsibility, accountability and decision-making. how are we rewarding good acquisition behaviors within the pentagon? in other words, if you're doing a good job, how are you rewarded? and internet think one of the questions you hearing from all of us is how are those being held accountable, not just at
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the cabinet level that we've heard about today, but at the highest levels at this has to be a priority for all of us if we want to make sure that our men and women in uniform have what they need and that we can make this case to the american people about how important this is. so whoever is best to deal with that but i think that is the question, we are clearly not aligned in accountability, priority, and how are we reporting that he would do a good job and also holding accountable the people who are not doing a good job. i'm sure that is demoralizing to the people who are doing a good job. >> i think your points are very well made. i'm not sure we reward our program managers very well. i think the only thing that i can see from experience is you promote them. in terms of holding folks accountable, when we see a clear connection between what they did and their outcome can we do retire them or move them.
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of civilian and military. beyond that the incentive structure that you are referring to is not clear and it's not adequate and enticed with the earlier chairman and the ranking member talked about is whether those decisions are made. and what paul talked about in terms of how is it that the culture and how the decisions are directed into program manager relates to the ability to perform. >> one thing i would say is that also as leaders, if you got someone you got to let go at the capital level, the leader needs to be held accountable also. because any one of us of our can do something, we are ultimate responsible as the leaders. i think that coming from the top is so critical of making this a priority. i had a specific question also about senator mccain referenced mr. francis
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mentioning the casey 46 program and other contractors absorb the cost overruns. wouldn't it make sense for all major defense acquisition production programs to be designed so that the contractor absorbs the cost overruns for production? >> if i could, senator? >> yes. >> it's important to understand the risks. sometimes the threat crisis to take risk because we need you. and when the risks are not clear, that cost sharing between us and the contractor has to be considered. when we asked for a fixed price contract when the risks are high, the contractor in order to get their corporate headquarters to agree upon working in the contract, they add that risk related to cost. >> i understand the issues with regard to r&d. want to talk about his production costs spent i agree with you in production. >> are we doing that
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consistently across the board underproduction? >> we to look at our contracts across all the enterprise, across the services and, indeed, yes. >> let me make one point regarding that. talk of shipbuilding, lead shipping the prototype. the leadership of a new class has been a cost-plus of sugar over the last, we've been trying to drive down the number of cost-plus ships and a program your candidate across the department of the nitwits to cost-plus ships in production. one of those is the cvn-78. >> my time someone will submit a question for the record that concerns me as a look at the cvn-78 cost growth. i'd like to understand as a look at after the ohio class submarine replacement program what lessons we've learned from this so that we don't go down the same road with the ohio class which is the important to our nation. i will submit that for the record. thank you all. >> can i jump in on the time you
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don't have left? >> of course. with the chairman's latitude, how was that? >> thank you. you are right on production contracts, and they should be fixed price. but there's still times gunships aside, there's still some contracts are cost-plus going into low rate production. egypt to manage the risks you're taking with the contracts. so a good contract can't say that that program. so if the risks are high i don't necessarily fault the contract type. i raised the question why are we going to production if we are not done with development yet? >> if it's a bad program we should be investing it in the first place come is about the fundamental question? >> yes, or if it's just not ready to take the next step. and on your first point on program managers, people held accountable, i think it's a good philosophical question about accountable for what? what constitutes success?
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if i'm a program manager and in trying to get my program to the next milestone, and to do that and then there's the cost increase, what am i going to be rated on, getting to the next milestone of the cost increase? if you can support the program and get it moving, that's what jermaine accountable. >> that's the problem. if it costs you a lot more agger putting it through but you get on time, that's not meeting your target. so people need to be held accountable for both, otherwise this is what we end up with the billions of dollars in overrun. thank you. >> senator serrano. >> pashtun senator hirono. thank you, mr. chairman. i know the department has undertaken headquarters reductions and congress has reiterated the need to look at reducing headquarters positions or efficiencies and other savings. while we all want to reduce waste and inefficiency, i would
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urge the department to look at possible headquartered reduction targets on a case by case basis and to make informed decisions, keeping in mind that cuts today can come back, cost much with a long-term family get in the short-term savings. the acquisition workforce is not to ensuring that our acquisition programs such as the ford class carrier i managed and lead to successful outcomes so that our men and women in uniform are given the tools that need to the effectively carry out their missions. we have to ensure we are able to recruit and retain a quality acquisition workforce if there are to be successful and defense acquisitions. if we have acquisition teams that are understaffed, under trained are too inexperienced we cannot expect a good result in our acquisition programs. as described in secretary mcfarland's testimony today we cut the dod acquisition workforce by roughly 57% during economy drives the late 1990s
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and early 2000s. i believe he's a deep reductions contributed directly to a large number of the problems that dod has had a major acquisition programs over the last two decades. i agree congress has an important oversight role to play on acquisitions. however, at the start i want to know that our acquisition workforce can perform and that we can rely on the analyses and processes of our acquisition team before a program is befores recommended. therefore, when the look to implement mandatory cuts we should consider the potential long-term effects our acquisition programs a month of course other programs. so for secretary mcfarland what is your assessment of the health of the acquisition workforce? >> senator, first thank you. this is such a human endeavor. that is the principal
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understanding, the underlying problems that we have inside of acquisitions to ensure that our workforce is a properly trained and experienced to do these jobs. in 1986 we had 622000 core acquisition people. by the time frame of this program and 78 was conceived and 96 through 2002, we've reduced that workforce to less than 300,000. this committee and congress in general has provided us with the defense acquisition workforce development fund that has allowed us to regrow, returning and reeducate about eight to 10,000 people to bring aboard a sense of them. that has been a critical improvement to where we are. the majority of our workforce is imminent to retirement your the workforce that we do have is predominately younger and not necessarily an age of an experience in this program and
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these capabilities that we discussing were inherently bred by people that may not have the adequate acquisition experience or understanding of the business case that need to be executed. so i would say that we are very fragile right now the best way i can see. these people working for hard. they're very loyal, their patriotic people. they don't give a well-paid. they get a lot of abuse in the press. there's an opportunity to forget what they have done which is done well. i generally commended the services to the navy and the marine corps and the army and others that are doing much better by having a disciplined approach. the only way we can protect our future is to invest to protect that core capability. >> secretary stackley, would you like to comment also? >> i think i will add just one comment. back in may of 2014, chairman
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mccain and senator levin solicited input from a number of individuals and organization regarding what do we need to give to improve this acquisition system. i was fortunate enough to have the opportunity to respond to after getting much thought, my concern and conclusion was programs that succeed, succeed because you've got a highly touted experienced team in place that is able to overcome, work through in and around this very dense, difficult a system that we've got come at the same time master the technical details and program oversight to deliver a complex weapons systems, programs that fail quite often fail because of not having the same attributes in terms of the acquisition workforce team. so first and foremost we've got to give us the tools to attract, train and retrain -- retain
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those professions to get the job done spent i emphasize that acquisition team we can rely upon because these are very complicated systems and programs, and it would be very difficult for congress to be the first line in terms of analyzing the efficacy is empty liability of these programs consider. i expect our acquisition people to do that and, therefore, you know, thank you very much, mr. chairman. >> secretary carter's hearing for confirmation, i showed a chart of $40 billion that was spent on programs that never became reality. that is not an acceptable system or situation. we value the men and women a work in this business, but these problems are of such magnitude.
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the view of most members of this committee that we can't lose sight of the fact that the system is badly broken. senator sullivan. >> thank you, mr. chair, and thank you for your leadership on this issue in terms of oversight, critical important function of this committee. and i'm not sure the question has been asked but maybe i will just ask it. secretary stackley, secretary mcfarland, who is responsible? who is responsible? who is going to raise their hand and say this cost overrun is my responsibility, i accept it? >> i will take that today i am responsible. you see the gentleman at the table responsible for element of the program that all the come together for the carrier. as i said in opening remarks i assume responsibility for this program. the decisions i've had the opportunity to make as we execute. >> secretary mcfarland?
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>> the navy is responsible -- >> i'm not talking about an organization. that's very amorphous. i'm talking people, individuals. >> i believe we could have done much better in preparing and advocating for the right aspect of this program to be conducted at the beginning and throughout its execution. >> so who is responsible, in your view? >> the department. not a good answer, not something that -- >> no, it's a ridiculous answer, okay? so who -- in your view, who is responsible? part of the issue here is that the responsibility seems to be placed, i mean, secretary stackley, i appreciate your statement. it's up front. secretary mcfarland come i'm asking the same question a few. who is responsible? undocking individuals. that's how we fix it. we can't blame it on the navy spent i will take absolute


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