legislative and executive branch. that is with regard to human rights particularly dealing with authoritarian regimes. a tradition of us foreign policy for decades. i witnessed it. i was in meetings. president bush raised these issues. one of the disappointments of the administration and the press and everything is how they downplay that element of our relationship with china. that is not a way to advance our interests as a nation. i think that has been a strategic mistake because it looks like then we do not care command we do. we need to show that to our leaders.leaders. i think we have not done a good enough job subordinating those concerns

over the last several years. that has not been a policy that is bipartisan or in the american interest. but this is something we should have seen more focus on. i held a hearing with chris johnson and others talking about the aftermath, what we achieved comeau we fell short of, and what we should be doing looking forward. their concern over treatment of christians in china, there is a need for more focus on human rights in china. it goes back to that point. working with the world in terms of international norms violating human rights is no way to do that. >> follow-up.

>> once said we should not let human rights get in the way. do you think she set the wrong tone? >> probably. but i think how do you tell someone, just ignore human rights. >> lady in the front. can you please identify yourself? >> i wanted to ask you. what are your predictions? >> the administration command do you think there is a role for china? thank you. >> we have got to get this

done sooner than later. i want to see this done now. we need to get this agreed to. they restart of the toxin conversations. as soon as we can get it and start the 68 time frame, look, like to see it done this year. i know that is probably my you and optimistic. we have to look out. and really with regard to china and tpp, it is very concerning. that is why we need to do it , to work with the nations and representatives to build a strong relationship. they are trying to do it. eventually perhaps this will show what an organization can do.

send over and negative list, list that was pretty objectionable by most standards. mixed messages on whether the list was acceptable or not. progress, but more work to be done. that's why we see more progress, at least a few more steps being taken. >> and from my perspective i would agree with everything corey mentioned. we are certainly encouraging them to finish, the president has been focused. and i think he has done a good job talking how this is a strategic agreement. our free trade agreements are very different from almost any other countries free trade agreement. very, very detailed on

critical issues. i puerto rico, investment. we need to make sure your writing the rules of the road, i think that's important. and i think there are a lot of countries in the region who want to be a part of it. so i certainly don't think it would be ready for china any time in the foreseeable future. whatfuture. what is key is that it sets the standards. it helps us our discussion with the chinese. more than just an irritant. i think you see most republicans interested in finishing it up. >> and this will have to be the last question. >> hello. you talked about having an

energy component. can we expand on that? in the climate agreement that the president announced for how it plans. >> and go back to the early question, my understanding, but was a coto, and my understanding, there was a poll out that was pretty dramatic in terms of the interest of the citizens in sweden, which is another very strong example of what is going on. i don't think ten years ago there was any interest at all. with regard to energy, with its japan, korea, korea is the biggest importer of lng

in the world. and whether it's taiwan or china, all of these countries need energy, all of these countries are looking, particularly at lng, cleanburning gas. and right now the united states but from what was looking like to be in importer of lng to the world's energy superpower, largest producer of oil in the world's largest producer of natural gas in the world right now. in russia, huge opportunity for us domestically. jobs, domestically. jobs, energy security, but it is a huge strategic opportunity. i give you one example. we are working hard and have been for a long time. and a very large scale lng project that would get affordable gas to alaskans

more importantly to the japanese, koreans, and any other country in the region. that is a strategic play cause not only in terms of energy, but our broader national security with our allies in the region. we have been exporting lng to japan for four years. we want to build upon that, and i think that it would benefit the region and it would certainly benefit the united states. >> thank you so much for your time. let's give them a round of applause. thank you for joining us. [applause]

>> [inaudible conversations] >> good morning for more than seven decades the power production -- projection to rely on our carrier fleet to protect our values around the world is more important than ever as the global threats multiplied to the

north atlantic. for 15 years the department of defense has sought to develop our newest aircraft air carrier ford of marking the beginning of an entire new class of the ship the program is one of our nation's most complex and expensive acquisition projects it has become unfortunately one of the most spectacular acquisition debacle's in recent memory and that says something. the program is estimated to be more than $6 billion over budget despite the recent announcement of a two month delay the first ship is scheduled for delivery next year. the second is five years behind schedule. but questions remain of the capability and reliability of these systems that yet to and i asked the former chief of naval operations that is responsible for the cost

overrun he said he did not know. we have been actively involved with this program from the star in since the beginning of this year our oversight has increased significantly at the direction the senator reid and myself committee staff have conducted a thorough investigation of the program this work has entailed requested review of work plants a proprietary documents correspondence and testing data as well as steamers interviews with key players from those in the industry it has been done and a bipartisan basis to keep with the best traditions of this committee. we meet with clear goals to examine what has gone wrong wrong, identify who was accountable, and assess what it means for the future of our aircraft carrier fleet and to determine with any reforms to the system could

prevent the failures from happening again. to help us today are key officials responsible for developing testing to oversee the program the honorable mcfarland is the principal adviser for acquisition is in technology and logistics'. assistant secretary of navy for research development and acquisition is the executive responsible for research and development of the marine corps systems. director of air warfare for the staff is said and charger the requirements and the we are admiral is the

tattoo aircraft is responsible for naval acquisition programs. michael gilmore is a senior in advisor to secretary of defense with the evaluation of weapon system and a managing director of the acquisition at the gao whose 40 year career is focused mostly on major weapons acquisition and especially shipbuilding. and we think them for joining us today. secretary rumsfeld to see a transformational weapon system.

all have one day host of unproven technologies including a new nuclear plant a distribution system the flight deck electromagnetic catapult system to launch aircraft this was the original sin did my view. since 2008 the estimated procurement has grown by 2.%procurement cost has grown by 2.$4 million for a total cost of 12.$9 billion. and it could be worse. to prove the new systems this has made them the

second to lead ship for all the associated problems that cost as risen to $11.5 million or 25% increase and the ship has been delayed five years. and the delays are due to the major components which sped neighbor it -- the navy is developing separately. id to face their oats it if it can cost growth and they're still not ready. the advanced and arresting gear was built as a memory efficient way to cover a wide variety of aircraft on the deck. but the development cost have more than quadrupled

and as a result in 2016 will do so without the capability you with all the types of aircraft on the ship. t.j. of that cost the navy could not upgrade with the new system as originally planned. by the 23rd season in the aircraft could land on the carrier's. those that is symptomatic of a larger problem. it is a defense acquisition and system as a whole. with the same problems with the navy shipbuilding in

then they rushed to production to talk about the capability for all these problems have been made worse with the absence of competition. the fourth class program with the misalignment in our defense acquisition system and to my knowledge no other single person is ever accountable to the failures of this program in no small part across multiple offices and program managers for the blurred lines of accountability allow the defense acquisition and system for results as everyone is responsible so no one is responsible. they deserve much of the blade and a rest with the

office of the secretary of defense specifically the undersecretary to new technology and logistic said his response will for determining if a program has the sound a business case and the navy can be faulted for sufficient realism but with the there complacent and authorized the navy to start construction with only 27 percent of the ship was designed to 13 systems were richard despite ted years of warnings from the weapons testers they failed to make timely course correction. we're not above reproach

while congressional oversight is to control the congress we could have intervened more forcefully and demanded more from the department of defense and we did not. we need to internalize the lessons. i encourage and the navy appears to be doing so to stabilize the program to approach -- changed their approach. the national defense authorization act contains several provisions that increase oversight of this program to streamline responsibility in our defense acquisition system. and with a foreword aircraft carrier especially in the current fiscal environment to have 12.$9 billion for

those alternatives with a capability on time and on budget. you must be willing to question if we build bigger or cheaper carriers to bring in competitors we may have to consider our portfolio with fewer carriers and more precision guided weapons if we cannot do better everything must me on the table and as long as i am chairman it will. i'll look forward to their testimony. >>. >> thank you for calling this extremely important hearing and calling your attention bedstead careful

word -- the class has been plagued by overruns and today's hearing will focus on the problems some delays of the shipbuilder has been applied that the shipbuilders are using. these imager technologies with operation of the aircraft carrier the electromagnetic aircraft system in each has scheduled challenges and millions of dollars over budget. law realizing is a costly enterprise some of the problems should have been resolved years ago.

to look back at the inception with that inevitable retirement of the uss enterprise which was scheduled to run other fuel at 2013 bertolt -- 2014 that evolves into the gerald r. ford. and then to install new systems to the inclusion. with that two-step plan with the reform act however in late 2002 with the secretary of defense for a program that was more of

transformational. that allow them to make risky choices in a real living with results of those now. and then failing for those that did not measure in time. in to see those parameters on maybe it is and all the problems they have faced but to give better options with the unpleasant discoveries. the navy before sufficient work had been completed. and history has shown a schedule delays and cost increases. congress shares irresponsibility hill may

change that they insist upon is to institute a although i think it has brought a better discipline but i look forward to hearing from these witnesses about changes that have been mating can be made in the future to schedule those overruns that we see today. >> we will hear opening statements from the secretary's and then we will proceed with questions. we will begin with secretary mcfarlane. >> senator mccain and distinguished members of the committee i appreciate the opportunity to do testify of the navy gerald ford aircraft carrier program.

the program is initiated in 1996 multiple changes of acquisition policy as noted. the program has been subject of many reviews looking to reduce cost of a acquisition approach or of the baseline. bid had to compete for the resources in the budget review while each change of policy and the technical base line was made in the best interest of the department of inland the taxpayer in mind making the but if the fact is to instability. since 2010 with the introduction of the

initiative it has been largely stabilized. polytechnic gold challenges remain it continues to work with the navy to ensure appropriate oversight. we have established a relationship with the navy in order to succeed to include the skills several thousand men and women who lead the relationship building of the acquisition. the complexity is enormous to economic policy and business sectors many of which cannot be predicted in time to be mitigated but we're committed to their resources to keep control

for all that followed to deliver them to beat the needs of the war fighter. 80 for the opportunity and i look forward to your questions. >> 80 for the opportunity to discuss this program. this committee fully understands the role of the carrier of american diplomacy power projection and a global security. just yesterday the navy operation on which the sun never sets with the turbulent world although the next president may be elected without addressing this size and configuration configuration, for four years they will be acutely aware of where the carriers are.

the newest is the gerald r. ford the new carrier design from 1967 it will be a service 50 years through a 20 adn therefore it is imperative that this committee has so clearly impressed upon the department better future force has the capability necessary and does so at a cost that the nation can bear. to operate and maintain these ships is beyond any of their nations undertaking. those members who have visited fully appreciate the daunting numbers that measure tens of thousands of structure of thousands of miles of cable and fiber-optic says thousands

of departments of ship systems and integrated to air dry if nuclear power throughout its life in remarkable demonstration of what industry is able to achieve as a quantum increase that is required in the century ahead and to lou we clear this program has had significant challenges resulting of an acceptable cost growth it is important to a understand the carrier history to modernize beecher carriers will ship design and construction and the total capabilities were to be introduced across three ships at a pace consistent with maturity of the related technologies.

it provides that 33 percent increase. . .

transformation by the secretary of defense dod changed course such said it will be modernization. this decision resulted in what is a high degree of concurrent development, development, design, procurement, and construction. costs were estimated adequate information regarding the complexity of the new systems and with inadequate risk factors to account for the high degree of concurrency ultimately invest in cost and concurrence in each phase of development, build, design,

and test. today design is effectively complete abstraction is near 95 percent complete, and we are focused on text program. actions put in place from 2,009 through 2011 have been ineffective in halting the early cost growth including converting the design from a level of effort to a completion contract that the firm target and incentive fee placing contract design changes under strict control producing fees. removing overly burdensome specifications that impose unnecessary cost contracting and competing alternative sources of supply to mitigate the significant impact of material delays raising completion levels at each stage of construction to improve production efficiencies and while following a detailed review the navy converted the e-mails and the contract to

a firm fixed-price contract for production to cost on the systems. the shipbuilder suggested is built process to view by competitive ship in order to review fundamental changes necessary. finally coupled with increased readiness reviews focused on cost performance critical path issues to ensure we are doing all it can be done to improve cost performance. the rear admiral more with experience across care operations construction and program management as an executive officer. concurrently we made changes to eliminate colleges for cost growth and to further improve performance and 80.

as reported to congress and may 2013 requirements are locked down. the design model is complete, and 80 percent of initial drawings released. new technologies are virtually mature. materials being ordered efficiently and on schedule. leverage learn course ability and implementing bill sequence changes to drive down protection cost. the navy is implementing a two phased delivery plan to allow the basic ship to be constructed and tested in the most efficient manner my labeling compartments to be completed in the 2nd phase for the work can be completed,completed, accomplished more effectively, and use of skill installation teams. the fixed-price construction

contract pictures cvm 79 nine or below the congressional cost. wecost. we are on target and will continue to reduce the cost. mr. chairman, you have raised questions regarding accountability. i am accountable for the decisions i make. this simple statement does not adequately address your concern. the current system is challenged to align responsibility, accountability, and decision-making, large complex projects that take years to develop and deliver. his program in particular has encompassed many people.

course changes in decisions have been critical. a decisioncritical. a decision to pursue a transformational approach driving three shifts and one was made for what was believed to be the right decision at that time. as the acquisition executive what can be done to stabilize the cost on cvn 70 and pursue cost performance improvements on the remainder is being done. much further to go in this regard, but, but i believe we are on the right path. going forward undersecretary's direction the cnl, they are changing the 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 major programs. we hope to have the opportunity to share these details with you and your staff.

your navy is committed to providing sailors with the capability they need to perform missions around the world. and we striveand we strive every day to do this in a way that enhances affordability while ensuring we maintain the robust industrial base to hedge against an uncertain future. we look forward to answering your questions. >> mr. chairman, senator reed, members of the committee, whether the combat improvements will be realized that are associated with the new systems being incorporated not now known, the navy indicates the reliability of the electric aircraft launch system in the past arresting gear will support initial operational test and evaluation for deployment.

the most recent definitive date i have indicates the reliability of emails is below the navy's goal by more than a factor of ten. the reliability is unknown and we only have engineering estimates and little test data. prior to redesign reliability was a factor of 800 below goal with data providing a 1st indication available later this year as a result of ongoing testing. testing. the navy knows reliability is above the december 14 reliability growth curve. however, that was very baselined below the liability gold and consequently the data we have indicates emails was not on the path. what the effect if any of

the oath of the liability of the systems could be not be known until development of operational tests are conducted post delivery, and particular the specific nature and the difficulty of the repair will be important to understand. the navy has recently said that failures and selected e-mail components could result in multiple catapults being down. this is because there is no ability to read too readily electrically isolate components permitting maintenance on nonoperating catapults will fight operations are performed. a key determinant of whether projected lifecycle cost savings will be realized. the schedule of activities subsequent to its delivery including the timing for a number of independence exercises and determined primarily by the safety and training requirements. operational testing will be

conducted as part of the force joint task force exercise which is an integral part of the training exercise. the plan is to test systems realistically, as early as possible to provide feedback for the program office and to provide training and testing. nonetheless, the current test schedule is aggressive with concurrent ship and land-based developmental testing and with some developmental testing including important 1st time integration testing continuing past the start of operational testing. in august the deputy secretary of defense. historical experience indicates clearly this is a key means to identify and mitigate mission-critical failures before the ship and her crew deploying the times way. finally, designed. finally, designed to reduce manning thereby limiting total ownership costs. however recent assessments raise concerns about manning issues that would only be exacerbated by any shortfalls realized in the reliability of e-mails. in particular, the navy's many wargame three states

fund and analyses have not been finalized. that won't be possible until we know more about what the reliability will actually be thank you. >> thank you. iyou. i appreciate the opportunity to talk about the carrier programs morning. let me start with the cbm 78. my bottom line is same story different program. in 2007 we reported that costsare likely to be underestimated by 22 percent on the construction of the ship and that the three main technologies were immature, likely to slip to the right and out of schedule margin.

we said the navy or be faced with the decision to either push the shift to the right or approach the technologies to the right. fast-forward to today, 2015, cost increases of 22 percent. the three key technologies slipped about five years. the decisions made to keep the ship construction schedule pretty much intact but with the technologies that. it is probably hard to see. the top chart, we have circles you. that is i before fly. so my view at this point is ship costs are going to continue to increase. full capability of the ship has been deferred command right now we're looking at getting less for more.

error over 25 years ago i was interviewing the 2nd undersecretary of defense john betty who told me, cost me, cost estimates and the department of defense, solitaire impossible to be achieved, but they count on hitting seven home runs in the bottom of the 9th. let's look at home runs. and you can see them bunched up. i'lli land-based test, ship -based test, integrated testing, ilt in the come all the time trying to complete construction. it is a big list. what are its home runs? right now the cost estimate depends on reducing construction labor hours by 18 percent.

9.3 million labor hours, never been done before. the dual band radar has been removed and will be replaced with one that is to be determined. anddetermined. and upgrades of a planned for the ship postponed. so ii think that's raining a lot out of the program already. his already withhis already with all of these changes at command we are seven years from delivery. i think cost increases are likely regardless of what is reported. ii would like to put the carrier in context against the acquisition. you brought this up. the cbm seven a program is the typical acquisition outcome. the 22% increase in cost, schedule delays are pretty typical for acquisitions. andacquisitions. and mr. chairman, i have testified before you a number of times on different things, but we can think of worse examples.

so i think what's different here is this program we knew all along was going to be the case. we should not be surprised by anything that happened. it is not an i told you so moment. and so ask yourself why do something like this happen? best practices are pretty well known. mature technologies before you put them on the program. go with the realistic cost estimate and budget to it. weit. we have always gone with the lost cost estimate and still are. and 54 by was not done here. you ask yourself why don't we do these things. mymy belief is, it is the prevailing acquisition culture, the collective pressures that the different participants bring upon the process that create incentives for programs to overstate what they think they can do, the state

technical risk, understood cost and understood schedule which is how you get funding and programs approved. so i would just like to say where does this leave us today? and i we will say, i no it's popular today photography acquisition process being broken, but i think it is in a happy equilibrium. maybe not so happy, but. maybe not so happy, but it has been this way 50 years, and i think is going to say this way until the incentives change. as the chairman said, i've beensaid, i've been in this job 40 years and have not given up hope yet. i believe that congress is the game changer here. i think congress can change the incentives by reclaiming its oversight role which i think is been diminished over the years.

what do i mean by that? i will cite three things. first is, your most important oversight is the initial funding you provide to a program. you give that up pretty early. if our program today, congress had to prove my funding two years ago. information was less. optimism fills the void. as a cardinal rule this is don't take money off the table. once you approve my funding two years later he made the decision for me. the committee has many, many heavy responsibilities, but one of them is the appeals court for services. if osd says something that is service disagrees with, if my gilmore says something that they don't agree with,

if the cape estimate they don't like, if it's a gal recommendation recommendation they don't like, the services, fear and try to strike a deal, and they get those deals. finally,deals. finally, movement and the department and particularly with the navy is the bundle of programs and multiyear procurements blocked by zend block buys induction programs or option contracts. not only do you give up funding, initial funding power, you can't touch the program afterwards. i guess my appeal to you today is let's not think of the cvn 78 program as the story per se but let's think about it as an object lesson and acquisition process and acquisition culture. what the congress can do about it, not just what the department can do, but how you might do differently because i really think what you do with money sends messages as to what is acceptable.

thank you, mr. chairman. >> thank you. have you seen some of the changes we have made in acquisition and defense? >> i have. >> are those steps in the right direction? >> i think they are in the right direction in many cases for the department, but i think as you said in your opening statement, to the extent the department comes in with a bad business case, if you approve it and funded you are sanctioning it. so with all of those improvements in acquisition reform legislation that has to be coupled with what you do on programs. a couple of good nose would be healthy. >> i think sen. reid and i i realize that we are just beginning in acquisition reform command we will continue to make it our highest priority.

secretary mcfarlane or statically, is there anything you disagree with? >> mr. chairman, paying close attention and taking notes. if i were changing places children are very similar sobering with some edits that i don't want to quibble over. his summation of the systemic issues, i think he is correct come on spot, and what i would suggest is that we are making some systemic changes on our side,side, and you likewise with the congress to try to address these issues, and i don't give up on them. >> chairman, ranking member, i agree with agree with what to much of what paul said. i has been spending at least

30 plus years paying a program manager and tester. the challenges the people in the work force itself. at the department is grateful for providing defense acquisition work fund development, but inside of this culture there needs to be a constructive change as to how we work together as a team to provide these products. >> am going to buy back one moment. paul hit the word incentives , and the context that he used, i would make it much broader. the complexity of our acquisition system and stand starting with congress, the incentives across the board are not all lines to the same outcomes. as long asas long as that is true we have forces pulling in opposite directions. >> i would like to direct

the witnesses attention to probably one of the most egregious acts backs of these cost overruns. from the original estimate of $143 million is now an estimate of $1 billion. so much that two years ago this aspect of the carrier had grown so much it hit the threshold to become a major defense acquisition program, and it continues, as we mentioned. i understand thei understand the navy has assessed how they are contractor has performed on this program consistently substandard having significant difficulties. we asked the contractor and the contractor's department management officials to characterize this type of performance as to score average.

do you agree with the characteristic that across growth of 600 percent is typical or average? >> absolutely not. >> on page three of your statement said acknowledging they have had the largest effect on construction is engineering design problems are now in the past, and yet i have in front of me a defense contract management evaluation of the performance from just this past month that directly contradicts your statement and in fact expects additional delays was the disconnect here? can you assure this committee that this cost

increases stopped? >> i do not believe that cost us stopped. i believe believe the majority of the engineering aspects of this program in terms of technological risk and development has been retired there is still testing to be completed, opportunities for risk to be realized as part of that effort command i do believe they're will be activities in front of us. a program that has sunk a lot of effort into getting to where it is ending a backwards with the opportunity that the system as operationally to provide for their carrier does not make a good business case. >> i would just.out that recently the manufacturers of the new tanker experience cost overrun. they absorb that cost overrun within that corporation. i wonder if maybe we should

make that is standard procedure here and defense contracting? i think that it should be a subject of a lot of consideration, senator reed. >> thank you very much. doctor gilmore, you are urged that shock trials be conducted, and those will not be done. they will be postponed to the next check the glass. wrote to the navy basically accepting your advice and opinion, why is it so important that these be done >> as ii mentioned in my testimony the deputy secretary decided to direct that they be done before the 1st appointment. history has shown clearly

that there really way to discover critical failures. there has been some claims the component level shock qualification testing which had not been funded but defunded and modeling and simulation are sufficient, but if those things were sufficient we should never see any mission critical failures but we do shock trials that are conducted in less than the design level shock, but we always do. it was captain on zeus of the committee a letter, the ceo testimony was a plan mine the persian gulf indicating his experience the shock trials now they provide a key information that enable his ship to survive and function after being hit.

the history is clear that you will not know about mission critical failures unless you do the shock trial, and i can assume and no that the history we presented to the deputy secretary and secretary figured into that decision. >> just for the record, you are on board, no pun intended, with the shock trial? >> we are moving out. doctor gilmore make reference to the component testing. it was being lined up with a potential for ship shock trial. they are moving their back to the left. >> thank you. let me follow up with the issue of off ramps. particularly when this was decided in 2002 to be a transformative technology and risk went significantly higher. in otherhigher. in other cases you have used

off ramps. with the ddg 1,000 you were able to select a different type of motor when the desired or at least breakthrough technology did not materialize. what is your position with respect to the cbn 78 and nine? do you have aa backup, were you just going to follow this down? one of the things that was made useful, if weuseful, if we have a system that cannot accommodate every type of aircraft then we are diminishing our 4th projection. >> yes, sir. let sir. let me -- you are touching on the off ramps and that is striking a chord. the amount of risk that was stacked up without adequate off ramps put us in an untenable position. i made reference to the review that we did with

concern, cost and technical regarding the program's performance. we had -- the ship was off and running in terms of production. we look at a potential offramp it would have caused a significant halted production, delay, complete redesign of many of the ship's systems to bring this team back up to the flight deck to go to an alternative. there was no tenable offramp in that regard, and much of our focus became we will the system work, can we the cost? that ended up leading to a decision that weof going to press on because of the trades and cost one path of the other, the impact on schedule, performance if we were to that.in time taking offramp we had not planned. going back in time command

we have the ability we could have in fact laid in an offramp in the early design stages of the cbn 78 in the event we determined it was not mature enough. this was a manifestation of what became a highly concurrent and compressed time line for development, design, production, and decision-making. your example going from what was going to be the permanent magnet motor that failed in test and we had a backup ready to replace, and that has proven very successful in terms of its completion of the development, installation, and testing of that program. >> quickly going forward. >> one of the lessons of this very expensive exercises when your doing transformative technology and very high-risk technology, we will you

always make it her team to have an offramp? >> our assessment of technical risk, if we have a high risk system that we are bringing to a production program we have to keep a hand on our alternatives at least to a decision point where the conference is going to go forward. >> you specifically asked about e-mails and ag going forward. we have conducted thousands of cycles, gone through what we refer to as high cycle fatigue testing, highly accelerated lifetime testing , system at lakehurst aeg is behind rate needs to be. the data is not because it is poorly designed but because we are behind her we need to be in terms of time that demonstrate reliability. we have that emerge between development and production going forward in terms of an

offramp. first question, is the system going to work to make sure there is no doubt or question. the chairman describes other was a plan to back fit all the carriers that have proven to be not affordable. that is not affordable as much is the impact on the carrier and the cost of self >> how many years have we been seeing that? it's a remarkable record. >> thank you, mr. chair. how long are we going to continue? >> ma'am, when it comes to developmental systems we are still doing test and fix on

the weapon system that has been in the fleet for 30 years. there willthere will be a continual test and fix as you bring in upgrades and add in performance improvements. on the specific improvements we will be in test and fix mode through operational testing, identify further issues dislike we do and continue to fix those. today test and fix primarily of software related. >> where is the carrier right now? >> about 95 percent complete >> it is sitting in the shipyard? >> yes. >> okay. and i always don't have shipyards. the only time matters to the folks back home has been they are out they're operating.

now, across military services i have been told the 90% solution90 percent solution on time is better than the 100 percent solution too late, and at some point this is going to be too late, and we are rapidly approaching that. now, you have been the assistant secretary of the navy for research, development command acquisition since 2,008, the same year the procurement was authorized. have you ever received adverse action by the navy or the department of defense due to the delays and the $2.4 billion in program cost growth? >> no, ma'am. >> has anybody within your chain, your structure ever received adverse action for this? >> in the chain, yes, ma'am. >> can you describe his actions to replace?

>> it wasthere was a program manager associated with the aircraft launch recovery equipment was relieved of his responsibilities. >> i will level was see? >> program manager, captain, united states navy. >> secretary mcfarland, have you received adverse action? >> no ma'am. >> has anybody within your structure? >> not to my knowledge. >> not to your knowledge? folks, this is, i can tell you, a lot of folks have been let go for a lot less. and you can tell, i am extremely frustrated with the cost overrun not being on time. there is no excuse. you can talk about all the gadgets you want, but i tell you, this is is affecting all of the other services swell. i still serving the national guard. i am a ground pounder. we are losing in the national guard with this knew nba 8200 national guard

soldiers, being cut 1100 dual status technicians, being cut forces, and this will hit the navy. someday you may not have the sailors to get that out of port. it is affecting everyone, and taxpayers will hold everyone accountable. everyone. i am upset because i have been working hard, early hours, early months of my work in this committee and on homeland security trying to restore the program management process. i have a bill passed unanimously. trying to get something in specifically. unfortunately i did not survive the conference.

i am baffled why we are not focusing on program management and cost overrun? this is an epidemic command we have got to do something about it. you can tell that i am upset. the folks back home are upset, and it does not do us any good unless it is out there providing protection. and if we keep sitting on it , not moving forward in a timely manner it does us no good. i would like toyour response. whenever you going to get this time? >> let me specifically address cbn 78. at one point in time it will be a 2,006 procurement. she was tied to maintain and 11 carrier navy.

since the ship was put under construction there was a four-month delay to launching the ship associated with getting completion levels to aa higher level to ensure that we could control the costs going forward. since thatsince that time there was a six-day week delay that we announced which is tanks to ensuring that we maintain the discipline and cost and executing the balance of the test program. we have not moved the delivery date change the trial state. still targeting. all of that lines up to get the ship on its scheduled deployment. >> i appreciate the response and hope everyone understands my frustration as well as the other members on the committee. this is got to be corrected. >> my -- may i make a

comment? >> absolutely. >> your concerns are well founded and how those bills will be paid, if you look at the cbo analysis of the navy shipbuilding plan, if it is executed as currently planned the navy will need a 30 percent bigger budget than it has historically gotten. that is the navy side. on the air force suddenly of the tanker and a ss. we were adhering a few months ago. one thing i want to bring up, which i didn't, we put program managers in terrible positions. when we create business estimates and technologies and mature, we put a program

manager in that position, and they have to do two things, manage the program and then part discipline and at the same time defend the program. but we dobut we do with our program managers is not what industry does and it is a wonder they take the jobs. >> captain john mayer and his crew have moved upward. in the valley -- operating a lost 50%a lost 50 percent of the systems and the crew is extraordinarily happy. they outline the retirement. the war fighter does need the ship and we are pleased with the fact that the crew likes that capability and the statement referred to the capability.

>> thank you, admiral. i will make a closing comment. i we will tell you, that is a lot of up armor. they could save a lot of arms, legs, lives if we had had that money allocated in our budget as well. >> thank you. >> thank you, mr. chairman. it's unbelievable to sit here and listen to this. i'm reminded of farewell speech of then president eisenhower. keep from being so frustrated, seeing the recommendations, seeing the forecast to put out all

these years and knowing that deficiencies will happen. has anyone fallen, those people who have left, someone mentioned here, how many people 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 going to work afterwards? >> i don't know that there has been a comprehensive study. >> we always always say follow the money and usually figure out the problem. >> there is a fair amount of government personnel retiring and moving industry >> moved to the same industry that they were in charge of overseeing? >> they have to abide by that.

>> i understanding and listening to testimony. nobody of the higher-level have been reprimanded, relieved, whatever for incompetency. one person was mentioned. back come in west virginia, if we build a homea home and goes over budget you could learn from the 1st one. the definition of insanity is continuing to do the same thing and thinking your going to get a differenta different result. >> i think sean made a very good. these programs take so long, the leadership faces a summary level. these people don't remember what happened. i we will also say i don't think this is a case of bad actors. as a people trying to act rationally probably the

system. president eisenhower saw something coming. what he was thinking that we solve the evolution, god help us in world war ii. some things don't his interest to say we have a problem. be careful. this has evolved for 50 years. going down aa slippery path. i was looking at what china is able to do. look at how they are able to advance and jumping quickly. ii am sure they have other ways of acquiring the information they are getting yet there is a process and move that they are able to

do things in a much quicker timeframe. what recommendation what you have? people that make decisions and maybe can change or create laws that would help us will prevent this from continuing? we pay no attention. it is a shame. there should be a law. we should at least owe it to the american people to give you an answer back. it's very simple. we try to get that done. what's your recommendation? >> i don't think it's a matter of law or regulation or telling the department to do anything. i think it -- wing your biggest opportunity is when you are improving a new program and you have to scrutinize the program for

what principles and bodies. if you really believe in mature technologies before you put them in a program, if you believe in fly before by, if you believe in realistic estimating and scheduling and the program comes up that does not measure up, you have got to say no. >> the jail, the forward class aircraft carriers leadership began construction with an unrealistic business case. you identified that. they talk to you? some hearing still learn a little bit more about. i appreciate your services.

that is and gentlemen, we have got to change. $18 trillion of debt in the way we are funded. thank you. i would love to meet with you later on. >> i would like that. >> i thinki think the senator from west virginia for his involvement and commitment on this issue. >> thank you. mr. francis, i think you opened up your statement by saying the same story program and commented in your opening statement about the committee and the senate are congress as a whole playing a more aggressive oversight role than we have a recent years. can you give me some sense of how much of that is going forward with new programs? how much of that should be applied retroactively to the subject or any other major?

what are your recommendations to this committee for what specifically we should do in the next committee meeting or over the course of the year? >> i would say right now we are kind of in a time whena time when they are not as many big new programs coming down the pike which is really your opportunity. i don't know how much you can do want a program that is already through the milestone and under contract without making more of a mess of it. >> maybe just going back, he is the analogy of seven home runs in the bottom of the 9th. toto what extent do we need to go back and say we know, i think maybe the twins did it to the tigers, but it is very uncommon. what do we need to do with respect to this timeline about being realistic that we will have a timeline of your going to achieve?

what we need todo we need to do here to at least not come back and have the same frustration that senator arts tasks. we see it and now it is not likely to happen, therefore what should we be doing? >> for something like this i would say -- and the navy has moved to schedule a little bit. i think youi think you have to make it okay for the navy to come up and say we need to move this schedule and it's going to cost more. right now they sort of play -- we are on eggshells because the navy might not want to come in and say that because there going to take a beating over increased cost. i'm waiting until it happens >> and i will tell you, someone who has been responsible for long-term complex projects is where people lose their jobs. the thing we ought to put on

the table now is if you come back and explain why you miss, that becomes our problem, senior leadership problem. if you wait and ultimately realize her come to us that someone else needs to lose their job. it's a matter of who's problem it is. it seems like it is obvious that we are going to have to pull a rabbit out of a hat to achieve these dates. someone knows a responsibility to speak honestly about that and set the right expectations. if not then he doubted. the same story different program. we have to call for some sort of finding of fact before we improve future programs so that we can really have people on this going forward and set of

having this as senator mansion said the insanity that seems to be driving card -- large complex programs. for the admirals i will ask you a general question. with respect to china we spend a lot of time trying to take the edge off of our quantitative disadvantage with a country like china that is turning out a lot of ships by the qualitative advantage.advantage. as admiral harris said, quality is a quantity of its own. at some point are capability may be matched by the shirt quantity. what was so important in terms of some of the unproven capabilities i going on to the ships, what sort of leaping capabilities justified the cost overruns on the basis of the discussion we are having today.

>> the sender, i am responsible for stability of requirements that go into our acquisition programs. when youwhen you have stable requirements you control costs, or at least that is one aspect. we develop a forward class carrier starting in the mid- 90s with before that a look at the future of aircraft carriers. wewe don't look at only one country. we look around the world and take conflicts from relatively low-end conflict like you see in the gulf with the carriers operating over the top of northern iraq in syria and high-end conflicts against countries who can through technology attempt to match are capability. we do campaign modeling. joint campaign models using us air force, navy, army command of the military aspects to affect that

campaign. as has been stated, the united states navy nuclear power is a just piece in our navy. those chess pieces are critical factor on the campaign plans. when. elected the future and the way that the threats are going, we devised the forward class with 33 percent greater sortie livability with enhanced technology and electric capacity and with the email and ability to increase getting airplanes on and off the ship and other technology. that campaign model is what delivered the requirements phase that resulted in the forward design you see today. >> sir, if i may from an acquisition standpoint.

the other reason we built the forward class, the nimitz class was reaching the end of its useful service life. technology does change. the other thing is that the nimitz class was built in an era where people are relatively inexpensive. so from a total lifecycle cost perspective the nimitz class was expensive. so it's pretty clear not only do we need the war fighting capability but we have to drive long-term affordability in the most important thing we could do was to get people off the ship which required a complete redesign of the ship. some of the things are seeing provide a significant reduction in the people on the ship. it will take 663 sailors off the net result is over 50

years. the cost to buy, own, and operate we will be about 4 billion less than a nimitz carrier today. >> ii must say, all those things that both admirals pointed out are undeniably accurate. put those numbers there are totally unacceptable, and i hope you realize that. i would like to.out that senator cain has been more involved in this situation that any member of this committee. he has been constructive, incredibly helpful in forming the committee and is a strong advocate for the men and women who are doing great work in the construction of these aircraft carriers and arguably one of the finest shipyards in the world. >> thank. >> thank you. thank you for your comments about the shipyard. i am proud to represent thousands of shipbuilders

who work at the shipyard and did not make the decision about putting a new technologies on the 1st in class of the 4th class and they did not develop the weapon systems that have developed. they arethey are working to install them. i have seen the work that is underway. i have seen the navy take control of the ship in recent months command they are excited. a couple of items. cost overruns, and i agree that there are very systemic issues. cost overruns, i would say that a lot of this is less and overrun that a court cost estimation. you unpack. 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 in the cost estimate was less than 50 percent or even in some cases less than 40 percent. isn't that correct? >> yes, sir. >> and i gather that was because 1st in class and the addition of all these untried technological systems as mandated by a previous sect death was one of the reasons that the confidence level was low. is that right? >> yes,yes, sir. >> let me talk about 1st in class history because you talk about this is a similar problem with the knew example. iexample. i think it was eric plavsic in the cbo study were elected navy acquisition programs and looked at 1st in class over a variety of programs and basically concluded that as a general matter 1st in class acquisitions and shipbuilding tend to be 30 or 40 percent higher than the estimate that the navy

has begun with. >> yes, sen. in my statement we have a list of the most recent, 1st in class, an average cost, and average cost increases. >> and that's kind to defend 23 percent is a better than an average. ..

>> >>

>> >> me is exactly what needs to be done. >> isn't it also of a true of the delay had a significant effect? hell won't have to do that? that to do that budget fairly rigidly would be a

2006. but in the 2008 it was authorized to procure the and centers of a 12 carrier navy. subsequently made by the department of defense the with the 2013 budget. the that is stressed out to have adding more cost to the program. but one of the challenges that you referenced in your testimony is millions of

dollars of overruns that this is the a typical outcome. when we come in here and testified with the my constituents at the billions of dollars of overruns. why are you dealing with

that? we give you more money we need you to deal with that. but even to end aligning responsibility to make this right.