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i [H.A.S.C. No. 114–145] OVERSIGHT REVIEW OF THE U.S. NAVY’S LITTORAL COMBAT SHIP PROGRAM HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON ARMED SERVICES HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION HEARING HELD DECEMBER 8, 2016 U.S. GOVERNMENT PUBLISHING OFFICE 23–763 WASHINGTON : 2017 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS VICKY HARTZLER, Missouri, Chairwoman JEFF MILLER, Florida JACKIE SPEIER, California K. MICHAEL CONAWAY, Texas JIM COOPER, Tennessee JOSEPH J. HECK, Nevada HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia AUSTIN SCOTT, Georgia GWEN GRAHAM, Florida MARTHA MCSALLY, Arizona HEATH BOPE, Professional Staff Member KATY QUINN, Professional Staff Member ANNA WATERFIELD, Clerk (II) C O N T E N T S Page STATEMENTS PRESENTED BY MEMBERS OF CONGRESS Hartzler, Hon. Vicky, a Representative from Missouri, Chairwoman, Subcom- mittee on Oversight and Investigations ............................................................. 1 Speier, Hon. Jackie, a Representative from California, Ranking Member, Sub- committee on Oversight and Investigations ...................................................... 3 WITNESSES Gilmore, Dr. J. Michael, Director, Operational Test and Evaluation, Depart- ment of Defense .................................................................................................... 12 Mackin, Michele, Director, Acquisition and Sourcing Management, Govern- ment Accountability Office .................................................................................. 9 O’Rourke, Ronald, Specialist in Naval Affairs, Congressional Research Serv- ice .......................................................................................................................... 14 Rowden, VADM Thomas S., USN, Commander, Naval Surface Forces .............. 10 Stackley, Hon. Sean J., Assistant Secretary of the Navy for Research, Devel- opment, and Acquisition, Department of the Navy ........................................... 5 APPENDIX PREPARED STATEMENTS: Gilmore, Dr. J. Michael .................................................................................... 101 Hartzler, Hon. Vicky ........................................................................................ 45 Mackin, Michele ................................................................................................ 74 O’Rourke, Ronald .............................................................................................. 133 Speier, Hon. Jackie ........................................................................................... 47 Stackley, Hon. Sean J., joint with VADM Thomas S. Rowden ..................... 50 DOCUMENTS SUBMITTED FOR THE RECORD: Two charts displayed by Ms. Speier ............................................................... 159 WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: Mr. Byrne .......................................................................................................... 163 Ms. Speier ......................................................................................................... 163 QUESTIONS SUBMITTED BY MEMBERS POST HEARING: Mrs. Hartzler .................................................................................................... 167 Ms. Speier ......................................................................................................... 168 (III) OVERSIGHT REVIEW OF THE U.S. NAVY’S LITTORAL COMBAT SHIP PROGRAM HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, Washington, DC, Thursday, December 8, 2016. The subcommittee met, pursuant to call, at 9:05 a.m., in room 2118, Rayburn House Office Building, Hon. Vicky Hartzler (chair- woman of the subcommittee) presiding. OPENING STATEMENT OF HON. VICKY HARTZLER, A REPRE- SENTATIVE FROM MISSOURI, CHAIRWOMAN, SUBCOMMIT- TEE ON OVERSIGHT AND INVESTIGATIONS Mrs. HARTZLER. Good morning. I would like to extend a warm thank you to our witnesses testifying before us today and welcome them to our subcommittee’s last hearing event for the 114th Con- gress. I thank the subcommittee members for your contributions and dedication during this Congress. I wanted to especially express gratitude to those members who are not going to be returning next year. Certainly, Representative Graham, you have been a wonderful member on this committee and on Armed Services and just here in Congress as well. I have enjoyed getting to know you and appre- ciate your work, your dedication. Representative Graham is—comes to the hearings. I don’t think she missed hardly any, so responsible and cares so deeply about the military, so we are going to miss you, but thank you. Thank you. And we also have subcommittee member Representative Heck and Representative Miller who may be joining us, but we appre- ciate their service as well. So in connection with today’s hearing, I welcome the members also of the full committee who are not permanent members of the subcommittee, who are or who will be attending. And I ask unani- mous consent that these committee members be permitted to par- ticipate in this hearing, with the understanding that all sitting subcommittee members will be recognized for questions prior to those not assigned to the subcommittee. Without objection, so ordered. So today, we take testimony of the littoral combat ship [LCS] program. We seek to gain a deeper understanding of the challenges that this program has presented us in the past and the opportuni- ties that exist as the program moves forward. We need to grow the size of this Navy’s surface fleet. The LCS could have an important role in increasing our capabilities and our flexibility. I know that (1) 2 there is a critical need to replace our less capable and decommis- sioned mine countermeasure ships, patrol craft, and all of our Haz- ard Perry-class frigates. I believe the littoral combat ship and the eventual upgrade to the frigate design has great potential to fulfill the roles for the plat- forms it replaces. This is why the LCS has garnered bipartisan support in the Seapower Subcommittee. The concept of the LCS and the decision to begin the program came at a time in the De- partment of Defense’s acquisition history in which senior leaders of the Department thought it was necessary and possible to disregard the natural evolution of technology by skipping a generation of de- velopment. It was good theory but proved costly and cumbersome to implement. We have learned many lessons from this period. For example, in- troducing immature technologies into acquisition programs will lead to cost and schedule growth. Awarding contracts without a stable design and directing prescriptive government specifications also increases cost and schedule. It is only with unleashing the power of best buying practices that we can realize acquisition effi- ciencies. These lessons have been hard learned in a multitude of acquisition contracts. For example, stable government funding is essential to providing material ordering and labor efficiencies. Additionally, innovative multiyear procurements or block buys save money because long- term agreements with subcontractors and vendors provides con- tracting stability. Dangerous reductions below minimum order quantities only serve to exacerbate our industrial base and increase the cost of the taxpayer. That is why the House has advocated add- ing a third LCS in fiscal year 2017, and has expressed reservations about the Navy’s acquisition strategy, which involves procuring one LCS frigate every year during fiscal year 2018, 2019, and 2020. I also want to discuss the Navy’s force structure requirements of 52 small surface combatants. The Navy’s force structure is based on their ability to meet combatant commander requirements both in peace and in war. That is why I am perplexed with Secretary Carter’s determination that we only need 40 LCS frigates. I believe the Secretary’s decision lacks analytical rigor. I am hoping that the next administration will review this issue. We must absolutely integrate the program’s acquisition lessons learned as we evaluate, with prudent scrutiny, the opportunity to invest an additional $14 billion to complete the purchase of LCS and transition its hull form into a frigate design. We must also en- sure that the mission modules which are integral to the first LCS designs are successfully completed, tested, and fielded at the lowest possible price. So I look forward to discussing this program with our distin- guished panel of witnesses we have here before us. But before I in- troduce the witnesses, I turn to the Oversight Investigation Sub- committee ranking member for any opening remarks that she would like to make. [The prepared statement of Mrs. Hartzler can be found in the Appendix on page 45.] 3 STATEMENT OF HON. JACKIE SPEIER, A REPRESENTATIVE FROM CALIFORNIA, RANKING MEMBER, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS Ms. SPEIER. Thank you, Madam Chair. We are here today to examine a case study in gross mismanage- ment on the part of the Navy. At virtually every decision point— from conceiving the initial flawed concept, to the concurrent acqui- sition process, to the huge cost overruns, to the huge fundamental flaws in the ships themselves, and to the feeble attempts by the Navy and

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