“I’m baffled why we are not focusing on program management and cost overruns. This is an epidemic and we’ve got to do something about it.”

WASHINGTON, D.C. – U.S. Senator Joni Ernst (R-IA) highlighted the importance of program management to counter cost overruns and delays in construction of the Department of Navy’s Gerald R. Ford-class Aircraft Carrier, in a Senate Armed Services Committee hearing entitled, “Procurement, Acquisition, Testing, and Oversight of the Navy’s Gerald R. Ford-class Aircraft Carrier Program.”

Senator Ernst pressed the witnesses on whether there were consequences within the Department of the Navy to counteract the continued delays in the delivery of the Gerald R. Ford Aircraft Carrier, pointing to poor program management and a lack of accountability as major problems derailing project completion. The Iowa Senator also highlighted frustrations that the aircraft carrier is currently sitting idle in a shipyard, explaining “it doesn’t do us any good unless it’s actually out there providing us protections for the United States. And if we keep sitting on it, not moving forward in a timely manner, it doesn’t do us any good.”

The Iowa Senator stressed that the $4.7 billion in cost overruns from the first two carriers underscore the importance of her previous work to overhaul federal program management through her bipartisan legislation, the Program Management Improvement and Accountability Act. This legislation passed unanimously out of the Homeland Security & Governmental Affairs Committee and would streamline federal government processes by adopting the program management standards, practices and procedures of high-performing, private sector organizations. During the hearing, Ernst declared, “I’m baffled why we are not focusing on program management and cost overruns. This is an epidemic and we’ve got to do something about it.”

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Witnesses on the panel included Honorable Katrina G. McFarland, Assistant Secretary Of Defense (Acquisition) Department Of Defense; Honorable Sean J. Stackley, Assistant Secretary, Research, Development & Acquisition Department Of The Navy; Rear Admiral Donald E. Gaddis, USN, Program Executive Officer, Tactical Aircraft Department Of The Navy; Rear Admiral Thomas J. Moore, USN, Program Executive Officer, Aircraft Carriers Department Of The Navy; Rear Admiral Michael C. Manazir, USN, Director, Air Warfare (OPNAV); Honorable J. Michael Gilmore, Director Of Operational Test And Evaluation Department Of Defense; Mr. Paul L. Francis, Managing Director Of Acquisition And Sourcing Management U.S. Government Accountability Office.

TRANSCRIPT

SEN. ERNST: Thank you Mr. Chair. Secretary McFarland, gentlemen, thanks for being with us today. Secretary Stackley, test, fix, test, fix – how long are we going to continue to do that?

SEC. STACKLEY: Ma’am, when it comes to every developmental system, we are still doing test and fix on the DDG-51 Aegis Weapon System that has been in the fleet for 30 years. So there’s going to be a continual test and fix as you’re bringing in upgrades and added performance improvements on the specific systems that we’re delivering to the CVN78 we’ll be in a test and fix mode, right through operational testing, we’ll identify some further issues in operational testing and just like we do with every major weapons system that we bring to the fleet, and we’ll continue to fix those. Today, test and fix primarily, primarily is software related, software not hardware.

SEN. ERNST: And where is this carrier right now?

SEC STACKLEY: CVN78 is about 95 percent complete at the piers at Newport News Ship Building in Hampton Rhodes.

SEN. ERNST: It’s sitting in a shipyard, correct?

SEC. STACKLEY: Yes, yes ma’am.

SEN. ERNST: Well, Iowa, we don’t have shipyards. The only time it matters to the folks back home for me – is when they are actually out there operating. Now, across military services – I have been told that 90 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 and Acquisition since 2008. And that was the same year the CVN78 procurement was authorized. Have you ever received adverse action by the Navy or DOD due to the delays and the $2.4 billion in program cost growth?

SEC. STACKLEY: No ma’am.

SEN. ERNST: Has anybody within your chain, your structure, have they ever received adverse action for this?

SEC. STACKLEY: In the chain? Yes ma’am.

SEN. ERNST: And can you describe those actions to me please?

SEC. STACKLEY: There was a program manager associated with the aircraft launch and recovery equipment who was relieved of his responsibilities.

SEN. ERNST: And at what level was he?

SEC. STACKLEY: Program manager, Captain, United States Navy.

SEN. ERNST: And Secretary McFarland, also, have you received adverse action?

SEC. MCFARLAND: No, ma’am.

SEN. ERNST: Has anybody within your structure been reprimanded?

SEC. MCFARLAND: Not to my knowledge.

SEN. ERNST: Not to your knowledge. Folks, this has been – 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 overruns, not being on time, there’s no excuse. You can talk about all the gee-whiz gadgets that you want. That’s fantastic. But I will tell you that this is affecting all of the other services as well. I still serve in the National Guard, you know, I’m a ground pounder. Great. Good for me. We’re losing in the National Guard with this new NDAA. 8,200 National Guard soldiers, we’re being cut 1,100 dual status technicians. We’re losing 800 active Guard and Reserve members. We’re being cut forces. And at some point this is going to hit the Navy too, if we keep spending money on gee-whiz gadgets that are sitting in a shipyard, someday you may not have the sailors to get that thing out of port. It’s affecting everyone and our taxpayers are going to hold everyone accountable for this – everyone. I am really upset because I have been working very hard early hours, early months of my work here in the Senate, in this Committee, and on Homeland Security, trying to restore the program management process. And I had a bill passed unanimously out of HSGAC on the program management and I tried to get something into the NDAA specifically for the Department of Defense, but unfortunately it didn’t survive the Conference. And I’m baffled. I’m baffled why we are not focusing on program management and cost overruns. This is an epidemic and we’ve got to do something about it. I’m sorry I’m on a soapbox, but you can tell that I’m upset, the folks back home are upset, and it doesn’t do us any good unless it’s actually out there providing protections for the United States. And if we keep sitting on it, not moving forward, in a timely manner, it doesn’t do us any good. So, I’d like to hear a response. Just, when are we going to get this done? Anybody, anybody please.

SEC. STACKLEY: Let me just specifically address CVN78 in terms of when she will deliver to the Navy. Now CVN78 at one point in time was going to be a 2006 procurement, it was delayed to 2007, delayed to 2008 for budget purposes. As was described earlier, she tied to being, to maintain 11 carrier Navy. Today we’re at 10 carriers. Requirement is for 11. Since the ship was put under construction, there was a 4-month delay to launching the ship and that was associated with getting completion levels to a higher level to ensure that we could control the cost going forward on the program. Since that time, there’s a 6 to 8 week delay that we announced a couple of weeks ago which is tagged to ensuring we maintain the discipline and cost in executing the balance of the test program. We have not moved the delivery date, we have changed the trials date so today we are still targeting an April – could go into May – delivery date for CVN78, all of that lines up to get the ship on its scheduled deployment in 2019.

SEN. ERNST: I appreciate the response. I hope everybody understands my frustration as well as the other members on the Committee. This has got to be corrected. And somebody needs to be held accountable.

MR. FRANCIS: Senator Ernst, may I make a comment?

SEN. ERNST: Absolutely.

MR. FRANCIS: I think your concerns about the budget are well founded and how those bills are going to be paid, I think if you look at the CBO’s analysis of the Navy shipbuilding plan, if it’s executed as it’s currently planned, the Navy will need a 30 percent bigger budget than it has historically got. So that’s on the Navy’s side. On the Air Force side, we have the tanker, we have the JSF, and the Long Range Strike Bomberis coming. And at the same time the Army is shrinking. So those bills are going to have to be paid somewhere. And then if they’re higher than even we think now, we’re going to be in real trouble. And on the program managers, I remember we were at a hearing a few months ago and you had asked me a question about that. One thing I wanted to bring up that I didn’t then was that we put program managers in terrible positions. So when we create business cases where a program is underestimated, and there isn’t enough schedule to get enough things done, and technology is immature, we put a program manager in that position, and they have to do two things they have to manage the program and impart discipline, at the same time, they have to defend the program. So, what we do with our program managers is not what industry does and we grind really good people up. It’s a wonder they take the jobs.

SEN. ERNST: Exactly. Thank you so much.

ADMIRAL MANAZIR: Sen. Ernst may I make an operational comment?

SEN. ERNST: Yes, absolutely Admiral.

ADMIRAL MANAZIR: Captain John Meyer and his crew have moved aboard Ford. They are in the galley aboard Ford, they are operating almost 50 percent of systems and the crew is extraordinarily happy with the ship at this point. Secretary Stackley has already outlined the retirement of risk and the timeline we have to do that, but the warfighter does need this ship – we’re pleased with the fact that the crew likes the capability that we’re delivering there and the statement referred to that capability. Yes Ma’am, absolutely – it costs more and it’s taking longer, but we will have that ship delivered at that higher capability by the time it deploys. And I’d just like to note for the record that the crew is very happy with the technology that we’re delivering to the warfighter.

SEN. ERNST: And thank you Admiral, and I will make a closing comment. I have gone way over my time. I will tell you $2.4 billion is a lot of up-armor that could help the guys on the ground as well. We could have saved a lot of arms, a lot of legs, a lot of lives – if we had that money allocated in the budget as well. Thank you.

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