Secretary, Chief discuss fiscal 2011 Air Force budget|
5/14/2010 - WASHINGTON, D.C. -- Secretary of the Air Force Michael Donley and Air Force Chief of Staff Gen. Norton Schwartz appeared before the Defense Subcommittee for the Senate Appropriations Committee in a hearing to discuss the fiscal 2011 Air Force budget May 12.
Chairman Daniel K. Inouye (D Hawaii): -- the Honorable Michael Donley, Secretary of the Air Force, and General Norton Schwartz, the Air Force Chief of Staff. We thank you for being here. As a committee we review the Air Force's budget request for FY 2011.
For FY 2011 the Air Force is requesting $150 billion in base budget. This funding level is an increase of $15.3 billion over last year's enacted budget excluding funding appropriated in FY 2010 supplemental.
The Air Force is also requesting $20.8 billion for overseas contingency operations for FY 2011, and $6.1 for the remainder of FY 2010 primarily to fund the surge operations in Afghanistan.
The 2010 Quadrennial Defense Review emphasized the need to prevail in today's wars while building the capabilities to deal with future threats. The FY 2011 budget request is consistent with these goals. The Air Force's budget supports its highest priorities which are to strengthen air, space and cyber capabilities to help win the wars in Iraq and Afghanistan.
For example, the Air Force continues to invest in intelligence, surveillance and reconnaissance programs. These assets such as the MC-12 Liberty aircraft and Reapers and Predator UAVs are significantly improving the situational awareness of our forces in the area. Success in getting timely information to the warfighter directly depends on having the manpower available to pilot the vehicles and to provide actionable intelligence. The Air Force will allocate more than 3,600 employees to support the processing, exploitation and dissemination of intelligence collected by manned and remotely piloted vehicles. By the end of FY 2011 the Air Force will be operating 50 continuous Combat Air Patrols with remotely piloted vehicles in the theater. The committee is pleased with the way the Air Force is rapidly increasing intelligence, surveillance and reconnaissance capabilities to meet high theater demands and interested in how these assets will become part of the enduring force structure.
While fully engaging in the present complex, the Air Force is also aggressively addressing deficiencies in the older mission, the nuclear enterprise.
The Air Force implemented a number of measures to strengthen stewardship of the nuclear arsenal including the creation of the Air Force Global Strike Command in August of 2009. This action was a significant step in revitalizing the commitment to high safety and compliance standards in this critical mission.
The budget also portrays the Air Force preparing for the future. Funds are requested to initiate a new tanker program and begin the requirements work for the new next generation bomber.
So too the Joint Strike Fighter program is funded consistent with the department's most recent cost, schedule and performance assessments. These are all important recapitalization efforts.
The budget also contains substantial investment in space and space-related systems including both major satellite programs and small efforts like the Operation Responsive Space program which focuses on rapid and innovative technologies.
Looking to the future, the Air Force has a number of challenges from modernizing aircraft and other equipment to ensuring that there is adequate manning for growing missions such as cyber security, ISR, and the acquisition work force.
The committee is interested in understanding how the Air Force is addressing these challenges.
Yesterday the Air Force announced its force structure plans for 2011. We hope our witnesses will address the proposed changes and their impact on the force capability and readiness.
So gentlemen, we sincerely appreciate your service to our nation and recognize the dedication and services made daily by the men and women in our Air Force. We could not be more grateful for what those who wear our nation's uniform do for our country each and every day.
I look forward to our testimony this morning and your full statements will be included in the record. At this moment the Vice Chairman is still at the voting chamber, so I will call upon Senator Bond if he has any statement to make.
Senator Christopher S. Bond (R Missouri): Thank you very much, Mr. Chairman. I asked them to be sure and start the timer because I've got a lot to say, but I join with you in welcoming Secretary Donley and General Schwartz. We welcome you back to the subcommittee. Thank you for your service.
Mr. Secretary, I especially want to thank you for attending the launch of the Senate Aerospace Caucus last week with Senator Murray. We believe the American aerospace industry has made our nation a global leader in the civil aviation sector, has helped produce the strongest military in the world.
Despite its importance, not only to our military but to our economy, we all recognize the industry faces several challenges. Senator Murray and I look forward to working with you and the rest of the Aerospace Caucus to elevate the awareness about the challenges and the effort to protect a strong and competitive American aerospace industrial base.
In addition to that, I am very much concerned about the ability of the Air National Guard to continue to operate amid the looming shortfalls and the age of our aircraft. Mr. Secretary and General, let me dive right in. I am afraid we are looking at a backdoor BRAC on the Air Guard. In my view no progress or proactive steps have been taken to address substantively the looming TacAir bathtub in the Air Guard. That's first.
All I continue to hear about are plans to reduce the size of the Air Force and the Air Guard. The Air Guard cannot be expected to give up aircraft and missions in the near term only to be told they will eventually be provided with new, still undefined missions later. Or be told that the Joint Strike Fighter replacements are coming when we all know they will not be available in time. Such a leap of faith will result in the atrophy of a number of Air Guard units that won't be able to train or recruit without viable replacements missions or aircraft. I'm afraid that's exactly what we're doing. That's why I've labeled it, I believe appropriately, as a backdoor BRAC of Air National Guard Units. This backdoor BRAC will threaten our ability to police our nation's skies. A roll of the dice with our national security that I'm not willing to take and I don't think anybody here should.
Further, I don't subscribe to the overall thinking that we have to accept a smaller Air Force. It's my strong view that falsehood is being driven not by a thorough analysis of foreseeable threats and requirements, but by self-fulfilling Pentagon budget studies and the extreme cost overruns and scheduling delays of a major program like JSF. Delays in cost growth from the JSF are sucking all the oxygen and resources out of other procurement needs. That results in our pilots flying aircraft that are in many instances older than they are. That ought to be unacceptable for the world's greatest super power.
In addition, the threat to the Air Guard and their critical missions to defend our nation's skies, going down the current path is a threat to our defense industrial base. The Air Force long term budget contains few new programs of the kind required to retain engineers and designers that will preserve our air dominance in the years to come. Secretary Gates killed or scaled back almost 50 major U.S. defense programs last year, but still poured billions more into a program that has had a Nunn/McCurdy breach, a big-time breach, a huge cost overrun on the JSF. Without other new programs, aerospace engineering and design skills will atrophy. With the atrophy of the defense industrial base which we've been seeing since the '90s, innovation will be stifled and a lack of competition will lead to higher price tags for new platforms that will be procured in smaller numbers.
Does that sound familiar?
With the threats to our long term and short term security emanating from all over the globe and for places where 4.5 aircraft could meet the needs, I think it's important to maintain a quantitative edge as well as it's important to maintain a quality edge. As capable as an F-22 is, it cannot be in three places at once.
With that, Mr. Chair, I thank you and await the questions.
Senator Inouye: Senator Leahy?
Senator Patrick J. Leahy (D Vermont): Thank you, Mr. Chairman, and because of the new Supreme Court nominee I have to go to meet up with her, but I am delighted to see Secretary Donley and General Schwartz here and I am going to have some questions I will submit for the record with the Chairman's permission, Mr. Secretary, on the whole area of community basing, especially the initiative in Burlington, Vermont. I'm very interested in knowing the answers, and I hope either you can call me with the answers or your staff can work with mine to do that. And of course the so-called bathtub issue, the fighter bathtub issue that's looming over the Guard. Senator Bond and I are co-chairs of the National Guard Caucus and we're both concerned about that.
So with your permission, Mr. Chairman, I will submit those for the record. I'm delighted to see Secretary Donley here. We've had a chance to chat on other occasions. It's great to be here with him, and also with General Schwartz who I've talked with on other occasions.
Chairman Inouye: Senator Dorgan?
Senator Byron Dorgan (D North Dakota): Mr. Chairman, thank you very much. I know that the Air Force has been through a couple of years of, two or three years of some real turbulence and difficulties and embarrassments and so on, and I just want to observe that I think the Secretary and the Chief have taken action to provide some stability and I think things are on track in the Air Force. I appreciate very much their leadership. Even while saying that I don't want to cast aspersions on some of the others. I understand the captain of the ship is responsible for all that goes on in the ship, but the Air Force has had some good leadership over time and I appreciate the willingness of the Secretary and the Chief to serve.
Let me just say I think the least surprising development in the last decade was if you go to war and wage war for eight years halfway around the world and don't pay for one penny of it but just put it all on emergency spending, don't ask the taxpayers to pay for it, charge it all as emergency spending, that someday you're going to run up against a fence with no gate. That's what Secretary Gates I think was saying the other day. This country can't continue to do that. Its fiscal policy is absurd. We know better than this. So it puts an enormous pinch on services like the Air Force.
I think my colleague raised the point about the new fighter, and I think it is the case that all of us are concerned about the per unit costs of the planes we're buying. It's not just planes, it's every piece of equipment for the military. The per unit cost continues to go up, up and up. That's a great concern.
But I think Secretary Gates is saying the right things publicly and with some courage. We've got to address all of these issues. This will not be a time going forward like the time that we've just seen. Whatever someone needs, it's fine, we'll just pay for it and charge it.
Let me also say that I visited Creech Air Force Base (Nev.) last Friday and had briefings on the unmanned aerial vehicles and it's very interesting to me as it has always been, that that represents in many ways the future of the Air Force. I mean we fly, as all of us know, fighter missions out of the most unusual places in this country real time with unmanned aerial vehicles halfway around the world with the most sophisticated satellite and so on, it's pretty unbelievable. I also think that much of what we're going to be discussing going forward is what this new paradigm, this new unmanned aerial vehicle systems means in terms of how we fight, how we train, and all of those issues.
I just want to say, General Schwartz, the folks that you have at Creech, the commander and others, are really first rate. I had the chance to observe those who are flying the UAVs. I came away mightily impressed, as I always do, but especially I think that it's the first place where we've had these unmanned aerial vehicle operations I think starting maybe eight, nine years ago, but it's an extraordinary place.
I have a few questions. I'm not sure I'm going to be able to stay for all of it today, but thank you, Mr. Chairman, for inviting the Secretary and the Chief.
Chairman Inouye: Thank you.
Mr. Vice Chairman?
Senator Thad Cochran (R Mississippi): Mr. Chairman, thank you very much for convening the hearing. I join you in welcoming our distinguished witnesses at this hearing. They have very important responsibilities, managing the Air Force and making sure that we're protecting our national security interests with the best there is. We appreciate that very much. Thank you.
Chairman Inouye: Thank you.
Senator Patty Murray (D Washington): Mr. Chairman, thank you so much for having this hearing. And Secretary Donley, I join with Senator Bond in thanking you for joining us for our first meeting of the Aerospace Caucus. It's extremely important that we begin to look at long term planning to make sure that we maintain our aerospace industry in this country for all the reasons that are important to our military as well as our economy in the future. We appreciate your participation in that.
I do have a number of questions and I will use those during my question time. Again, welcome to both of you and thank you for having this hearing.
Chairman Inouye: Thank you.
Secretary Donley: Thank you, Mr. Chairman, members of the committee. It is truly an honor to be here today representing almost 680,000 active duty, Guard, Reserve airmen, and Air Force civilians. I'm also honored to be here with General Schwartz who has been a tremendous partner and a tireless public servant, especially over the past couple of years in addition to a very long and distinguished career prior to this assignment.
I'm pleased to report today that America's Air Force continues to make progress in strengthening our contributions as part of the joint team and the excellence overall that is the hallmark of our service. We're requesting $150 billion in our baseline budget and $20.8 billion in the overseas contingency operations supplemental appropriation to support this work.
In the past year and planning for the future we focused on balancing our resources and risk among the four objectives outlined by Secretary Gates in the 2010 QDR.
First, as the Chairman noted, we must prevail in today's wars. Your Air Force understands the gravity of the situation in Afghanistan and as we continue to responsibly draw down our forces in Iraq we are committed to rapidly fielding the needed capabilities for the joint team, such as surging ISR assets into the theater and maximizing air mobility to accelerate the flow of forces into Afghanistan.
Second, we must prevent and deter conflict across the spectrum of warfare. As we assess potential implications of the Nuclear Posture Review and the new START Treaty, we continue concentrating on the safety, security and sustainment of two legs of the nation's nuclear arsenal.
Last year we stood up the Air Force Global Strike Command and we now have realigned our ICBM and nuclear bomber wings under the control of a single commander.
We also stood up the Nuclear Weapon Center to consolidate the management of all our nuclear weapon sustainment activities.
To increase our engagement across the world we're building partner capacity in Afghanistan and Iraq especially, and developing a training framework that emphasizes light attack and mobility that can benefit other nations.
Third, we must prepare to defeat adversaries and to succeed in a wide range of conflicts. We need to ensure we're providing the right capabilities with our strategic airlift and ISR platforms, and ensure that our space-based assets continue to deliver needed capabilities into the future.
In addition, the last two decades of sustained operations have strained our weapon systems. We continue to determine which aircraft we will modernize and sustain and which we must retire and recapitalize. One of our primary efforts includes retiring and recapitalizing many of our legacy fighters and tankers, replacing them with the F-25 and the KCX.
These decisions require tough choices as well as the ability to quickly field systems that meet warfighter needs at an affordable price. Because acquisition underpins this effort, we're continuing our work to recapture excellence in this area as well.
In the past year we've made significant strides in reforming our internal processes. We've added more program executive officers and are growing our acquisition workforce by several thousand professionals over the next five years.
Finally, we need to preserve and to enhance our all volunteer force. Airmen are our most valuable resource and they've performed superbly in every mission and deployment they've undertaken.
With the understanding that their families serve alongside them in July of last year the Chief and I and the Chief Master Sergeant of the Air Force began a year-long focus on our men and women and their families. This Year of the Air Force Family recognizes their sacrifices and looks to determine how we can better support, develop, house and educate them. As this effort draws to a close later this summer, we're determining which programs are performing well and where we can do better.
Mr. Chairman, your Air Force is performing exceptionally well in supporting the current fights, responding to growing demands and shifting personnel priorities on short notice. But we're increasingly stressed inside the continental United States. Rebuilding nuclear expertise will require continued determination and patience. We are taking more risk in non-deployed force readiness, and as you mentioned, Mr. Chairman, we're facing significant challenges in modernization and in our infrastructure.
At the same time, however, we are developing and fielding new technologies and capabilities that bode very well for our future.
I can tell you after a recent trip to the CENTCOM area that we are recruiting and training some incredible airmen. General Schwartz and I can again confirm that the Air Force is blessed with an outstanding civilian and military leadership team to help us address these challenges.
Our priorities are clear. We must make the most of those resources available to balance capability against risk; balance winning today's wars against preparing for tomorrow's. We need to prevail in today's fights and we continue to add capability in every way possible to help ensure the success of ongoing conflicts.
We must prevent and deter future conflict where we can, and continue to be prepared for and succeed across the full spectrum of conflict.
Finally, we must continue to preserve our airmen and their families for they are truly our hedge against an uncertain future.
We're very grateful for the committee's support in this work and we look forward to working with you and to answering your questions today. Thank you, Mr. Chairman.
Chairman Inouye: Thank you very much, Mr. Secretary.
General Schwartz: Mr. Chairman, Senator Cochran, members of the committee. I'm proud to be here representing your Air Force with Secretary Donley.
Let me begin by reaffirming that the United States Air Force is fully committed to effective stewardship of the resources that you and the nation place in our trust. Guided by integrity, service and excellence, our core values, America's airmen I think are performing courageously every day with precision and with reliability on behalf of the American people. This budget request supports these airmen and our continuing efforts to rebalance the force, to make difficult decisions on what and how we buy, and to sustain our needed contributions to the joint team.
Secretary Donley and I established five priorities shortly after taking office to ensure that the entire force was focused on the right objectives. Most of our initial efforts centered on reaffirming our long established standards of excellence and recommitting ourselves to areas where our focus had waned. I am pleased to report to you today that our dedicated and talented airmen broadly understood our intent and have delivered in a meaningful fashion.
Although these initial priorities were not designed to change from year to year our progress in the nuclear enterprise is such that we can now shift our efforts to sustaining the progress that we've made. Thus our first priority is to continue to strengthen excellence in our nuclear enterprise.
The rigor of our nuclear surety inspections demonstrates a renewed commitment to the highest levels of performance. We must and we will do even more to ensure 100 percent precision and reliability in nuclear operations and logistics, as close to 100 percent of the time as such a human endeavor will allow.
For our second priority, and that is partnering with the joint and coalition team to win today's fight, Secretary Donley mentioned several ways in which our airmen are providing critical air and space power for the joint and coalition team. Your airmen are also performing admirably whenever and wherever our joint teammates require including providing battlefield medical support and evacuation, ordnance disposal, convoy security, and much more.
Our third priority remains to develop and care for our airmen and their families. We initiated the Year of the Air Force Family shortly after our testimony last year in recognition of the vital role that our families fulfill in mission accomplishment. Although their sacrifice is perhaps less conspicuous, their efforts are certainly no less noble and their contributions are no less substantial.
Modernizing our inventories, our organizations and our training, our fourth priority, is among the most difficult tasks that our service has undertaken in these last 18 months. In order to achieve the balance that Secretary Gates envisioned for our forced, we are compelled to decision and to action. This budget represents a continuation of that effort.
We set forth a plan last year to accelerate the retirement of some of the older fighter aircraft. This year we are not retiring any additional fighters, but we are transitioning from some of our oldest and least capable C-130s and C-5s. We will modernize where we can, but where modernization no longer is cost effective, we will pursue recapitalization. KCX is one such example.
With the delivery of the request for proposal, our top acquisition effort to procure the next generation refueling aircraft passed another significant milestone.
A similar imperative is the F-35. I want to underscore Secretary Donley's comment by noting that this weapon system will be the work horse driving our Air Force and our joint team forward.
Long range strike is the last program that I number among our top initiatives. The Air Force fully supports the development of the family of systems providing both penetrating and standoff capabilities for the next two or three decades as described in the QDR.
Finally, recapturing acquisition excellence, our fifth priority, is now only beginning to pay dividends with our acquisition improvement plan at the heart of our reform effort. While promising, the initial successes must continue for a number of years before we can declare victory on this front. We are fully aware that we must wring every bit of capability and value that we can from the systems that we procure, so this effort will require a sustained focus on acquisition excellence.
Mr. Chairman, the Air Force will continue to provide our best military advice and stewardship, delivering global vigilance, reach and power for America.
Thank you for your continued support of the Air Force and particularly for our airmen and their families. Sir, I look forward to your questions.
Chairman Inouye: Thank you very much, General Schwartz.
Because of the change in our time schedules regretfully I will have to impose the five minute rule. I'll begin with the questioning.
Mr. Secretary, because of emerging requirements on UAVs and cyber security missions which will require thousands of trained personnel, how do you propose to meet this challenge of bringing together all these highly trained personnel?
Secretary Donley: Mr. Chairman, this has been a tremendous challenge that the Air Force has stepped up to do. Our end strength is planned to be stable at about 330,000, but inside that active duty end strength we are making the internal adjustments necessary to man the ISR systems and the intelligence support as it comes on-line.
Most recently we proposed and the Congress had approved last year with some caveats, the reduction in fighter force structure which we had laid on the table last year. That early retirement of about 250 legacy fighters allows us to free up the manpower to put into the intelligence, surveillance and reconnaissance area. So it is those internal adjustments, identifying career fields where we had excess strength and diverting that into areas that are growing, is a significant priority for us.
Chairman Inouye: Are you getting most of your personnel internally?
Secretary Donley: Yes, we are. Of course we continue to assess and recruit new airman every year. That's part of our normal operation, but we are redirecting expertise inside the Air Force to these new missions.
Chairman Inouye: Thank you.
If I may now ask General Schwartz, there is a growing concern that there will be a lack of missile warning satellite coverage because of continued delays in the space-based infrared program. As you know, the Air Force terminated a third generation missile warning program in FY 2011. How do you plan to mitigate this potential gap in coverage?
General Schwartz: Mr. Chairman, we have two SBIRS payloads -- that's space-based infrared system payloads on orbit as we speak, and we intend to launch two more in the not too distant future to address General Chilton's requirement for warning and so on.
The bottom line is that we believe we have a stable program and one that will satisfy with some margin General Chilton's needs.
Chairman Inouye: Thank you very much.
May I now call on Senator Cochran?
Senator Cochran: Mr. Chairman, thank you for your leadership of our committee and for convening this important hearing.
Mr. Secretary, I've been informed that Australia, Germany and France are leasing unmanned aerial vehicles to support their intelligence, surveillance and reconnaissance and other assets in theater which continue to grow. Has the Air Force considered leasing on a short term basis unmanned aerial vehicles to meet this demand like many of our NATO allies are doing?
Secretary Donley: My understanding is that we have done that in very limited situations. Our allies took this approach for different reasons, in part the urgent need that they had for these capabilities and the need for them to take a bit longer time working through their internal defense and appropriations processes inside their government. So those were the motivations, as I understand it, behind their approach to leasing.
Generally speaking, we prefer to buy. When one does a lease, a major and significant issue is indemnification for loss. And in our case we knew we had access to the manufacturers, the capability to buy this. We intend to keep this capability over a longer term. Generally speaking buying is, depending on the circumstances, in general buying and owning tends to be less expensive than leasing over the long term. So we have taken the course that we should buy and own these capabilities.
Senator Cochran: General Schwartz, I understand that the combatant commanders outside of Central Command have requirements for intelligence, surveillance and reconnaissance that are not being met. Would the Air Force consider leasing UAVs to meet this demand until requirements in the Central Command area of operation are reduced?
General Schwartz: Sir, we have a mandate to get to 50 24-hour orbits by the end of 2011. The Secretary has mandated that we grow to 65 at the end of '13. That is as much as we can do, both from a resource, a talent and a manpower point of view.
My recommendation would be not to pursue lease. We are maximizing the production, for example, of the Reapers, so that will be the backbone of our remotely piloted aircraft fleet going forward. Given that that's the case, we think we are on sort of the max performance glide path here to growing the capability so that we can satisfy the needs of other combatant commanders, whether that be in the Pacific or the Horn of Africa or elsewhere.
Senator Cochran: General, your prepared statement indicates that the Air Force continues to the air superiority fleet, including the F-15s specifically. Could you describe the operational benefits of the F-15E radar modernization program and tell us whether the Air Force has considered accelerating this effort?
General Schwartz: Sir, there are a couple of initiatives, both for the E model F-15 as well as the air superiority Cs and Ds. One of the things that the reduction in the fighter force structure allowed us to do was to reallocate resources to the remaining aircraft, so-called Golden Eagles, if you will, where we will modify the radars with the Active Electronically Scanned Array capabilities, that technology, which is clearly superior to the mechanically scanned radars that the airplanes currently possess. Greater service volume, greater ability to track multiple targets, and so on and so forth.
In addition, installing an infrared search and track capability on the Golden Eagles, which they do not currently possess, are two examples of how we are improving the legacy birds that will stay with us for a while.
With respect to the E model and its radar, as you know, its major mission is air-to-ground, and the electronically scanned array radar for that platform will not only permit better targeting of ground targets but also moving targets, which is a significant advantage in that installation.
Senator Cochran: Thank you very much.
I'd ask, Mr. Chairman, that my additional questions be submitted to the witnesses.
Chairman Inouye: Without objection, so ordered.
Senator Bond: Thank you, Mr. Chairman.
Gentlemen, following my opening comments, I believe we can harness savings by putting more missions, not less, into the cost-effective Air Guard and procuring a blend of fifth generation and highly capable, more affordable and proven 4.5 generation fighters. That would ensure our nation has at least two competing production lines.
It's obvious that the situation has only grown more dire. As evidenced by the Nunn/McCurdy breaches, the GAO reports and the Jet Study findings since you last told me at this subcommittee that "all options are on the table" to address the shortfall.
General Schwartz, with shortfalls growing and the inordinate delays of the key JSF program, with the costs going from the originally projected $55 million per copy to somewhere between $135 to $150 and the situation getting worse, why have you taken the 4.5 generation option off the table as a means of addressing these shortfalls?
General Schwartz: Sir, the simple answer is that acquiring a 4.5 generation capability that will last as long in the force structure as a generation 5 seems to me to be not the most prudent way to approach this problem. We have a limited pool of resources and it is our sense, sir, that we should not dissipate that limited pool of resources which we would prefer to devote to generation 5 capability by purchasing generation 4.5 that will last just as long. Instead, we believe that it is more prudent to extend the service life of certain elements of our existing fleet at some 10 to 15 percent of the cost of purchasing new, and maintaining our commitment to the F-35 which as I suggested earlier we believe will be the backbone of tactical aviation not just for the Air Force, but for the Navy, Marine Corps, and international partners as well.
Senator Bond: General Schwartz, I've heard questions about whether the JSF can even operate off of a carrier. There is a need right now, we have a shortfall right now. You could get perhaps three or more 4.5 generations for replacing some of the F-35s you're waiting to buy if they ever complete their tests. But when you talk about service life extension, I'm not willing to buy the 14th Street Bridge again. The P-3C life extension program terminated due to excessive costs. The same for the A-63, the F-14A. The SH-60R cost increased from $4 billion to over $12 billion; the UH-1 and the AH-1 cost increased from $2.78 billion to $8.78 billion. I think it's far better if you need those 4.5, if you need to extend, to buy those.
Let me address one very urgent question that the Guard has. Approaching the C-130 seems to be done in a vacuum. The Air Force identified the Mobility, Capabilities and Requirements Study as the reason for reduction in the tactical airlift aircraft. But like many other self-fulfilling studies, it ignored the homeland defense mission and the role that the C-130s play, a key element of the strategy.
Additionally, the Air Force has admitted the plan was to accelerate the early retirement of the E models. My understanding, and please correct me if I'm wrong, is that the Air Force has 45 C-130 aircraft at Little Rock, and the Air Force has 15 C-130 that will not have any restriction for over three years. Without prior planning I believe the Air Force could recapitalize the fleet and meet all training needs for the three years without Banana Republic, iron swapping of aircraft for the Air Guard.
Secretary Donley, I appreciate your reply to Senator Leahy and me. I believe that any temporary movement of aircraft is unrealistic. Can either of you tell me whether options like conducting the training at Guard C-130 units where savings could be harnessed and which would take advantage of the experience of the Guard were considered before making this swap that I have heard from so many people was unwarranted and unjustified?
General Schwartz: Sir, let me give you a little background on this.
The way the airplanes are distributed in our Air Force is as follows: Those aircraft that will be staying with us, and that is the C-130H model, H2, H2.5, H3s, are predominantly, in fact 83 percent of those aircraft reside in the Guard and the Reserve currently. The thinking was that given that we were going to recapitalize the remainder of the fleet -- by the way, that's 141 aircraft -- that we were going to recapitalize the remainder of the fleet with the J model over time, that it made sense for the Guard to assume the training mission for that body of our capability. For the H model capability.
Now I will acknowledge, sir, that we didn't do as thorough a job as we should have in articulating the rationale for this earlier on. We now have a solution which the Secretary responded to you on, which makes the schoolhouse mission at Little Rock a Guard and Reserve combined mission, something for which, as you suggest, they are very well qualified to perform, and to do it with airplanes from a number of units around the country on loan. And as we recapitalize, we grow the Js and reduce the Hs, that the need for that schoolhouse will subside over time and the aircraft will return to their host units.
Importantly, it will be largely because of the way the force is distributed, it is the Guard and Reserve that will benefit from this approach. So, sir, that is the background on this. Again, I acknowledge that we did not reach out as well as we should have to explain what the logic was to the TAGs and others and we'll do better in that respect, sir.
Secretary Donley: I'd just like to reinforce that in working through the second round of this problem which we did in the last couple of months and which I've responded to you on in a letter, the Air Force Reserve and the Air National Guard led that work. They went through a number of options for how best to accommodate the early retirement of C-130s to take a stronger role in running the schoolhouse at Little Rock, and to do that in a way that was, we felt, least disruptive to the individual Guard units. I believe we worked through a successful conclusion on that. And we also had the benefit in that mix, in that solution, of not only retiring the active duty C-130s, but being able to reapply the manpower, active duty manpower, to higher priority missions such as those the Chairman mentioned.
Senator Bond: Thank you, Mr. Secretary.
Thank you, Mr. Chairman. My apologies.
Chairman Inouye: Senator Dorgan?
Senator Dorgan: Mr. Chairman, thank you.
General Schwartz, I noticed that Keith Zuggar, Colonel Zuggar, is sitting behind you and he's retiring this month, I believe. I just wanted to say on behalf of the subcommittee that he's, I think, been the Chief of your Liaison Office for some long while and I think done a great job working with the subcommittee. So Colonel Zuggar, good luck in your retirement.
General Schwartz: He is a great example of the talent that we have in our Air Force, sir.
Senator Dorgan: Let me ask you about two things, and I'll just ask both of them and then perhaps both of you could respond.
One is, you're going to stand up about 25 more Combat Air Patrol units across the country for UAVs, and I notice some of them are going to bases that house fighters and bombers. I also noticed that is not necessarily the requirement for a Combat Air Patrol unit. Some might think, in kind of an old fashioned way, that there has to be a merger, but we also have Combat Air Patrol units in area that don't have fighters and bombers who do just as well. I guess what I would ask, and you know why I'm asking, because we have a terrific base with substantial capability to house additional missions, and that's the Grand Forks base, that you take a look at, and you probably already do this, but take a look at how do you minimize the need for MilCon as you place these units? You've got some capacity, particularly the Grand Forks Air Force Base, as you're moving tankers out. The opportunity for another Combat Air Patrol unit up in that area, or two, is a great opportunity. That's number one. I understand why some will counsel you, put it near fighters and bombers; others will say completely unnecessary.
Second, my colleague from Missouri asked about the Joint Strike Fighter, and all of us who have been so supportive of that are also disappointed in the sense that as I calculate it, what we were told, I was on this subcommittee in 2002, and we were told, I guess 2001, that the estimated cost was going to be $50 million per copy; and the latest estimate, an independent group formed by the Pentagon, estimated $80 to $95. Taking the mid range of that, this is in 2002 dollars now, that's about a 75 percent increase in the per unit cost for a Joint Strike Fighter. That's really alarming. What happens is there is this relentless march in increased costs that is going to break the back of the Air Force and the Pentagon if we don't get some handle on it.
So the simple question is why. What accounts for a 75 percent projected per unit cost of the Joint Strike Fighter? Because it was heralded to us as something that was nirvana. It was going to serve over the range of services. We were going to build enough of them to have the per unit costs substantially down. But it turns out now in a very few short years as we're just starting to produce, that the cost has just climbed way beyond that which is reasonable. So the question is why.
Secretary Donley: Mainly this is time. It's a function of time.
Senator Dorgan: I'm talking about 2002 dollars as estimated by the independent group --
Secretary Donley: Yes, sir. And what it means is that there have been delays internal to the program which add years or months and then years to the projected schedule of the program, and then add years to the end of the program. So you carry the program further out.
Senator Dorgan: What has caused the delays?
Secretary Donley: A variety of issues have caused that. We've had too much engineering hours which have not come down as the manufacturer kind of works through the transition from development to production. They have fallen behind in the flight testing because they haven't produced the initial jets on the schedule that they had planned. Then they've fallen behind on the test programs so we have to work through the production issues. Then we have to slip the test program and add money for development.
This was the work that was done by the department over the winter to restructure this program. It was a top to bottom scrub. It was really the product of a two year effort. When the Chief and I came in there was already an independent estimate going on on this program, and Secretary Gates made the correct decision to make adjustments in the FY 2010 program, adding money for development, over $400 million as I recall, just in FY 2010. By the time we got to the end of calendar year 2009, we'd had two rounds of independent estimates and we stepped up to the fact that the program was not executing as it needed to. This was really the strategic level decision to restructure the program.
Senator Dorgan: Did we miss some early warning flags here on this committee? Because I don't remember sitting and listening to the fact that we may end up having a 75 percent increase in per unit costs for the Joint Strike Fighter. Was this just laid in our lap all at once?
Secretary Donley: If I can be bold here, from a staff level perspective I don't believe there were surprises that the program had challenges, that the program was falling behind in some areas. The issue was whether or not to believe the program office and the contractor that they had a fix for those shortfalls. And really, it was the last two year period where we had independent eyes on it, we determined we were not going to take a promissory note for a get well plan that was not materializing. So we decided to make a huge adjustment in the program at that time.
Senator Dorgan: Mr. Chairman, I know my time has expired. Could I ask for a one-minute response on the combat air patrol units and one of the best air bases in America, the Grand Forks --
General Schwartz: Senator Dorgan, let me explain two things. First of all the rationale for collocation with other fighter or bomber Combat Air Force units. This is a human capital question. The issue is how do we groom combat leaders that understand both the traditional kinds of capabilities that we've fielded for decades and the new? And how do you integrate remotely piloted and traditionally manned aircraft in the right kind of packages?
This is the logic behind fundamentally the notion of collocation in some locations. It is not a major point driver in terms of our evaluation of installations. I would argue that the availability of facilities is, on a point basis, is a greater consideration. But the logic was to give some deference to our need to grow airmen commanders who understand all aspects of our portfolio and can apply them as required.
Senator Dorgan: Mr. Chairman, thank you very much.
Chairman Inouye: Thank you.
Senator Murray: Thank you very much, Mr. Chairman.
The President's budget for this year, 2011, doesn't include any investments in military construction at Fairchild Air Force Base. I wanted to ask you why. I was just out at the base, Fairchild, in April. I had a chance to tour, take a look at all that's going on there, and talked directly with the base community. There are a lot of facilities at Fairchild that are in need of upgrades and some aren't even sufficient to meet the needs of a 21st Century Air Force.
Can you explain, Mr. Secretary, why there's no military construction investment in Fairchild this year?
Secretary Donley: Very simply, we have chosen to take risk in infrastructure. We have underfunded our MilCon and facility infrastructure for several years running now. I believe our Air Force budget is, we'll get you the exact numbers, but I believe it is less than $2 billion a year at this point. So it is at low levels and has been for several years.
As we confront other resource challenges inside the budget, pressures of varying kids --
Senator Murray: Every one of us knows that if you don't fix the roof now, it costs a whole lot more in the future. Do we have a long term recapitalization plan for bases?
General Schwartz: Ma'am, I would just say that there's a difference between MilCon and facility maintenance. We have maintained the department standard on facility maintenance.
Primarily we focus the limited MilCon dollars on new mission. RPA is a case in point, and so on. We don't have, did not have apparently in this case, and we'll confirm that, new mission at Fairchild. So --
Senator Murray: Let me ask directly about that. In the past we've heard promises that the first KCX tankers will come to Fairchild. That was walked back. The men and women who serve at Fairchild have a great proven track record with our tankers, and they're ready and willing to fly the KCX. Have you yet prioritized which squadrons needs to have their aircraft replaced first, based on their maintenance records? Mr. Secretary?
Secretary Donley: Let us get you an answer for the record on the specific question and the way you asked it with respect to maintenance records.
In general, we have not yet had to make the decision on the initial bed downs for KCX tankers, but we did include in the RFP that is now out and a matter of public record, a representative list of bases that were CONUS bases and overseas bases, to which tankers would be bedded down. We did that for the purposes of the evaluation. Fairchild is included in that list.
Senator Murray: With respect to the tanker, I wanted to ask you, with bids not due now until July 9th, this is starting to sound like a fairly compressed bid evaluation timeline for the Air Force. It's really important that the Air Force has enough time to make a full and fair assessment of bids that come in and then that decision will be held up under scrutiny, as we all know. I'm very concerned about this discussion of a projected contract start date of November 12th when there's no projected award date that I know of yet, and the entire acquisition process now continues to be hampered by delays.
Mr. Secretary, how can the Air Force talk about tentative start dates when they haven't projected an award date yet, and seem sort of uncertain about when that will be?
Secretary Donley: Based on our experience in this RFP and previous RFPs, the judgment was it's best at this point not to exactly try to pin down exactly when the contract award would be, or source selection would be completed. We'll leave that to the source selection authority. They have, I think, ample time to review the proposals which are due July 9th, so we think there's several months in there for reviews. There are, I would say, multiple reviews, independent reviews as well, that need to be factored in.
But we did feel as a matter of record for the RFP that it is important to tell the contractors, all offerors, when we think a contract award would be made so that they have a firm date at which they need to be prepared to proceed.
Senator Murray: My understanding is November 12th is the contract start date, not the award date.
Secretary Donley: Yes.
Senator Murray: You have not given an award date yet.
Secretary Donley: That's correct. Contract start date was the --
Senator Murray: And you believe that will give you enough time? Okay.
I also wanted to ask you about the World Trade Organization ruling that Airbus has received illegal trade distorting subsidies for years and in particular the World Trade Organization found that the A-330, which is the very airframe that they plan to use in this tanker competition, has been built using illegal subsidies.
Now I continue to be very troubled that DoD is awarding this contract, it's taxpayer funded, $35 billion competition, without accounting for the billions of dollars of subsidies that Airbus has received.
I want to know how you can assure American taxpayers that they won't be spending money now to support an illegally subsidized company that one part of our government, the USTR, has already declared harmful to American jobs?
Secretary Donley: We have in the Department of Defense worked through this issue with the Trade Rep and --
Senator Murray: Have you been personally briefed by the Trade Rep?
Secretary Donley: We've had conversations with the Trade Rep, yes, and the judgment inside the Executive Branch, not just the Air Force or DoD, but working with our interagency partners, is that it would not be appropriate for the Department of Defense in a single contract action to take action representative of a WTO level decision.
Senator Murray: But you do understand if one company is bidding against a company that has been subsidized, our taxpayers are essentially fighting against a country rather than a company.
Secretary Donley: The WTO has an appeal process which still needs to play out. There is, as you know, an additional suit in front of the WTO that involves, if you will, a counter-suit, and there are appeal processes that are laid out in WTO procedures. We need to follow, as a government we need to follow those appeal processes which eventually get to the point of making tradeoffs and making determinations on how to affect the results of the appeal process at the --
Senator Murray: I understand the end result of the ruling, but again, the A-330 is what they said has been illegally subsidized.
Secretary Donley: I understand.
Senator Murray: I'm sure we'll have more conversations about this as we move forward.
Secretary Donley: Yes, ma'am.
Senator Murray: Thank you very much, Mr. Chairman.
Chairman Inouye: Thank you.
Senator George Voinovich (R Ohio): Thank you very much, Mr. Chairman. Gentlemen, welcome. I appreciate your good work. You know what I'm going to talk about, which is the solid rocket booster program.
I believe this administration has made a very serious mistake in restructuring NASA. You say why do we care in a defense hearing? It's because it has to do with the industrial base of solid rockets.
Regarding the Minuteman specifically, I'd like to know if the Office of the Secretary of Defense had any conversations with NASA or the Air Force had any conversations with NASA before the President announced his intention to shut down solid rocket production?
Secretary Donley: I'm not aware that the Air Force was consulted specifically on the NASA decisions.
Senator Voinovich: You're very definitely affected by this. Do you have any plans to sustain the industry in order to continue to meet current deployed and future anticipated strategic spacelift and tactical missile needs? Because you can't meet those needs with liquid fueled rockets.
Secretary Donley: We do understand the challenge, and we do not have an answer at this moment as to how we intend to proceed. I've had discussions, Air Force has had discussions at a couple of levels with the National Reconnaissance Office and with NASA officials including at the highest levels. I've talked to Administrator Bolden, I've talked to General Carlson at NRO. We have recognized this as something we need to work together going forward, but we don't have answers right now, but we have folks that are focused on this challenge.
Senator Voinovich: Both the Chairman and the Vice Chairman know of my strong interest in this. I'm glad to know you recognize that you have a challenge independent of what may happen with NASA. And I'm going to be working with Senator Mikulski to see what I can do to see to it that there is a delay in the decision as far as the President is concerned. I think we have to solve the question of how does the Defense Department cover its needs in solid rockets if NASA goes ahead with what I consider to be a very ill considered decision on the part of the President.
Do you see any increased risk if the Minuteman motors, if we stop the production of Minuteman motors 19 years short of the planned operational status of that particular missile?
Secretary Donley: In general, Minuteman has been a very reliable system for us, and it continues to test well. But we do know that we have challenges ahead with respect to maintaining a warm base. And we're not satisfied with the bridging solution that we had developed here over the last couple of years, which takes us through 2011. So we need to find a way forward for FY12 and beyond on this subject.
Senator Voinovich: I agree with that absolutely. Anything you can do to weigh in with the administration, you say you're talking to the Administrator of NASA, and that's fine. But life being what it is, I don't think that's where the decision was made. Frankly, I won't put words into his mouth and I won't give any suggestion of his intentions, but strictly my own opinion is that, let us say a generic NASA Administrator concerned primarily for the survival of his organization, would not have approved this. I think it's a decision that was made at OMB and dictated to this particular NASA Administrator. So conversations with the NASA Administrator may not be productive in this area, and I would urge you to have conversations with whatever elves within the administration you deal with over at OMB, because I think that's where the decision was made, or whoever the masters are, and that the NASA Administrator being a good soldier, or good airman, depending on where he went to college, carrying out orders. But this is a very serious kind of question.
I just would close, Mr. Chairman, with this observation. Do you know where the term Minuteman came from? It came from the initial rockets that were created in our race with Sputnik and afterwards, that was liquid fuel, and to get those things fired up, get them launched, took hours. And suddenly we had a Minuteman that could be fired within minutes because it had a solid rocket motor rather than a liquid rocket motor, and could go immediately. Now we're in the process of eliminating our industrial base of solid rocket motors. You may not have any Minuteman left over if we go back by virtue of the decision at
NASA to an industrial base that is given entirely to liquid rocket motors.
I've made my speech. Thank you, Mr. Chairman. I appreciate your indulgence.
Chairman Inouye: Thank you very much.
Senator Sam Brownback (R Kansas): Thank you very much, Mr. Chairman.
I'm glad to hear that history about Minuteman. I didn't know that piece. We want to go back to Dayman, I guess, the Six Hour Man.
Mr. Secretary, I want to follow up with what Senator Murray asked. This is obviously a major issue for my state and the tanker contract. I've been frustrated about the lack of being able to consider the illegal subsidy and we've had many discussions about this with Senator Murray.
For the military, if every step of appeal were exhausted and the World Trade Organization found that Airbus had illegally subsidized the A-330 that they had bid, and this was conclusive, and all the appeals are done, would you consider that in the bid, the base bid of the contract?
Secretary Donley: I wouldn't commit to that at this point. I think our answer would be we would be working with the USTR and he would be working, he or she would be working through that WTO process to arrive at the appropriate specific steps to be taken at the end of that process. This is why the internal judgment to the administration is that it would be premature to take any particular action at this point on this program.
Senator Brownback: Doesn't that invite other countries to do very similar actions to get our military contracts? Whether it be ships or virtually anything of a military contract?
Secretary Donley: I wouldn't speculate on what motivations might be from other companies to do this. I would simply, and I don't know that this is completely satisfactory to your concern, but both of the offerors involved here are international companies. So we need to think through very carefully as a nation how we operate in the WTO and in the international marketplace with respect to sort of imports and exports and goods and services provided. So at the same time there are concerns about bringing on-shore competitors to U.S. industrial base partners. We also have to recognize that our international companies here in the United States want to sell abroad, and that door is open for that as well.
Senator Brownback: And can be sued under the WTO as well abroad. But it seems like to me if you're a foreign country and you're reading the tea leaves on this, and frankly, I think we've bent over backwards to try to get Airbus to bid on this. We've held it open an extra length of time. And certainly citizens in my state are livid about what the military is doing to try to give this to Airbus with the extra holding it open for a longer period of time, do all these steps. But at least on this illegal subsidy piece, if we don't fix that hole I would think other countries would say you know, the United States builds ships, why don't we subsidize our way into shipbuilding? Let's get some of these contracts, these are great contracts. Why don't we do, there's just a whole series of ones to the point that I think we should put in statutory form that if there is a subsidy as determined by WTO that that's considered into the base price of the bid. Whether it's a U.S. company or a foreign company that does something like that. I'm particularly targeted at foreign companies, but to give us some teeth and to make some clarity on a major issue that I think you're inviting more foreign companies or others to figure ways to subsidize, to get major U.S. military contracts. I think it would be wise to just put that in statutory form.
Secretary Donley: Without responding directly to that proposal I would just offer that in the context of the KCX RFP, our approach to this is to hold the U.S. taxpayers harmless from any penalties that might be assessed on one manufacturer or another ax we go through this WTO process. So if there are penalties somewhere along the line, that we do not pay for those in the KCX program.
General Schwartz: And Senator, if I may, just to clarify, there was no change in the requirements for the platform. The extension, the decision to extend was, in my view, largely in the interest of a competitive scenario, but I can assure you there was no change in the requirements.
Senator Brownback: If you award this to Airbus after this step, extraordinary step of extending the time period, and it's a $35 billion contract, and it's a subsidized platform, which we all know is a subsidized platform, I think you're going to have some very irritated people in the United States of America. I would hope that wouldn't be the case and I hope we can give you some statutory clarity on figuring the subsidy price into these military contracts.
Thank you, Chairman.
Chairman Inouye: Thank you very much.
Because of the conflict in the Senate schedule several members have not been able to attend and they have questions. They've asked me to submit them to you. It should be obvious that all of us had other questions to ask. So without objection I will be submitting to you, Mr. Secretary and General, questions for your responses.
On behalf of the Committee I thank you for your testimony this morning. We want to thank you and the men and women in your command for their service to our nation.
This subcommittee will next meet on Tuesday, May 18 at 10:00 a.m. in a close session at which I will be briefed on issues concerning the United States Pacific Command and the United States European Command.
We'll now stand in recess.