Hearing of the Seapower Subcommittee of the United States Senate Armed Services Committee - Navy Shipbuilding Programs

Statement

Senator REED. Let me call the hearing to order.
Senator McCain has indicated that he might be delayed and
asked us to go forward. When he arrives, I will interrupt the proceedings and ask him if there are any comments that he would
make.

Let me make an opening statement. Then if any of my colleagues
want to make a brief comment, it would be appropriate. But we
will get right to the testimony.

Let me welcome our witnesses: the Honorable Sean Stackley, Assistant Secretary of Defense for Research, Development and Acquisition; Vice Admiral Kevin McCoy, Commander, Naval Sea Systems
Command; and Vice Admiral Allen G. Myers, Deputy Chief of Naval Operations, Integration of Capabilities and Resources.
Thank you, gentlemen, very much.

We are certainly grateful for your service and also for the incredibly professional and courageous service of the men and women of
the U.S. Navy and the U.S. Marine Corps.
I especially want to thank Admiral McCoy this morning because
I believe, sir, this will be your last opportunity--and ""opportunity''
is used wisely or diplomatically--to appear before the committee.
Thank you for your service, sir. Thank you very much.
Admiral MCCOY. Thank you, sir.

Senator REED. I also want to welcome Senator McCain when he
joins us. He is the new ranking member. There are few people with
the expertise, the experience, and the insight of Senator McCain
when it comes to anything to do with the U.S. Navy. So he is an
extraordinary addition to this subcommittee as the ranking member.
Now, again, I would ask my colleagues to bear in mind that the
President of South Korea will be attending a joint session. So we
will want to move forward as expeditiously as possible. If someone
would like to make a very brief statement, I will recognize them
at the appropriate time.

The Navy continues to be faced with a number of critical issues
as it tries to balance its modernization and procurement needs
against the costs of current operations. A number of ongoing critical issues confront the Department of the Navy, but principally
complicating the Navy's efforts this year to support current operations in Central Command, CENTCOM, and elsewhere is the
specter of sequestration. The shipbuilding budget remains at a
level where it will be difficult, if not impossible, to field the Navy
we believe we need. Sequestration will only exacerbate that shortfall. We need to understand how sequestration may complicate the
Navy's job of maintaining current readiness while building for the
fleet of the future.

Another topic of concern is the change in fleet size goals since
last year. The Navy has now defined a new requirement for the
size of the fleet, changing the goal from 313 ships to 306 ships. We
hope to understand more about this change during the hearing this
morning.

With that in mind, a continuing focus of the subcommittee has
been to see that we improve our acquisition stewardship and thereby ensuring that we are getting good value for every shipbuilding
dollar that we spend.

We were very pleased to see that the Navy Department has been
able to use the jump start in advance procurement funds Congress
provided in fiscal year 2013 to maintain Virginia-class attack submarine production at a level of two per year. We have seen that
stability helps drive down costs and improve productivity.

We also support the Navy's continuing efforts to drive costs out
of the Ohio replacement SSBN program. SSBNs will remain a vital
leg of the nuclear triad for the foreseeable future. Establishing and
achieving cost reduction goals in these Virginia-class and Ohio replacement programs will yield significant stability to our Nation's
submarine industrial base, which provides good paying jobs all
through the country but particularly in my region and will ensure the Navy has a modern, capable submarine fleet for many years to
come.

The subcommittee has met the last 2 years and focused primarily
on other programs that were experiencing quality control issues or
other production issues. It is never a pleasant situation when
major programs are having such problems. During these hearings,
testimony from the Navy made it seem to me that the Navy Department and the contractor teams were making good faith efforts
to improve the situation through changes in staffing, training, and
organization. We are eager to hear an update from Secretary
Stackley and Vice Admiral McCoy this morning on the progress
that they have made on these initiatives since last year.

In our country's current fiscal environment, it is very unlikely
that we will have as much money to spend as the 30-year shipbuilding plan assumes. And, fundamentally, that is why these continuing hearings on efficiency and productivity are so important.

We need to focus on managing these important programs in ways
that are efficient and effective in delivering the capability the country needs from its Navy. We need to improve quality and efficiency
in all of our shipbuilding programs not only because of the direct
savings, but also because we need to demonstrate to the taxpayer
that we are using defense dollars wisely.

Gentlemen, we look forward to your testimony this morning.
Senator REED. Senator King, do you have any opening comments,
brief comments?

Senator KING. No, thank you.

Senator REED. Thank you very much.

Senator Ayotte, if you have a brief comment.

Senator AYOTTE. I do not, Mr. Chairman. Thank you.

Senator REED. Thank you.

This is an extremely cooperative committee. [Laughter.]

I appreciate your contributions very much.

Let me now recognize Secretary Stackley. I understand, Mr. Secretary, that you will have a statement, as well as Admiral McCoy
and Admiral Myers.

Mr. STACKLEY. That is correct, sir.

Senator REED. Please proceed.

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