[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


 
                       [H.A.S.C. No. 117-74]

                      UPDATES ON MODERNIZATION OF

                   CONVENTIONAL AMMUNITION PRODUCTION

                               __________

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             MARCH 31, 2022

                                     
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
48-577                     WASHINGTON : 2023                    
          
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              SUBCOMMITTEE ON TACTICAL AIR AND LAND FORCES

                 DONALD NORCROSS, New Jersey, Chairman

RUBEN GALLEGO, Arizona               VICKY HARTZLER, Missouri
SALUD O. CARBAJAL, California        MICHAEL R. TURNER, Ohio
ANTHONY G. BROWN, Maryland           ROBERT J. WITTMAN, Virginia
MIKIE SHERRILL, New Jersey, Vice     SCOTT DesJARLAIS, Tennessee
    Chair                            MATT GAETZ, Florida
KAIALI'I KAHELE, Hawaii              DON BACON, Nebraska
MARC A. VEASEY, Texas                MARK E. GREEN, Tennessee
STEPHANIE N. MURPHY, Florida         RONNY JACKSON, Texas
STEVEN HORSFORD, Nevada

                 Liz Griffin, Professional Staff Member
                Kelly Repair, Professional Staff Member
                           Payson Ruhl, Clerk
                           
                           
                           C O N T E N T S

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                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Hartzler, Hon. Vicky, a Representative from Missouri, Ranking 
  Member, Subcommittee on Tactical Air and Land Forces...........     3
Norcross, Hon. Donald, a Representative from New Jersey, 
  Chairman, Subcommittee on Tactical Air and Land Forces.........     1

                               WITNESSES

Bush, Hon. Douglas R., Assistant Secretary of the Army for 
  Acquisition, Logistics and Technology, Department of the Army; 
  accompanied by BG William M. Boruff, USA, Joint Program 
  Executive Officer, Armaments and Ammunition, and BG Gavin J. 
  Gardner, USA, Commanding General, Joint Munitions Command......     5
Daly, GEN Edward M., USA, Commanding General, Army Materiel 
  Command........................................................     6
Flaugher, Brett, President, Winchester Ammunition................    23
Gaines, Jason W., Senior Vice President and General Manager, 
  Munition Systems, General Dynamics Ordnance and Tactical 
  Systems........................................................    24
Gathright, Brian, Vice President and General Manager, BAE Systems 
  Ordnance Systems Inc...........................................    26
McGuiness, BG John J., USA (Ret.), President, American Ordnance 
  LLC............................................................    27

                                APPENDIX

Prepared Statements:

    Bush, Hon. Douglas R., joint with GEN Edward M. Daly, BG 
      William M. Boruff, and BG Gavin J. Gardner.................    49
    Flaugher, Brett..............................................    62
    Gaines, Jason W..............................................    71
    Gathright, Brian.............................................    80
    McGuiness, BG John J.........................................    94
    Norcross, Hon. Donald........................................    45

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    Mr. Wittman..................................................   111
    
    
    UPDATES ON MODERNIZATION OF CONVENTIONAL AMMUNITION PRODUCTION

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
              Subcommittee on Tactical Air and Land Forces,
                          Washington, DC, Thursday, March 31, 2022.
    The subcommittee met, pursuant to call, at 10:02 a.m., in 
room 2118, Rayburn House Office Building, Hon. Donald Norcross 
(chairman of the subcommittee) presiding.

  OPENING STATEMENT OF HON. DONALD NORCROSS, A REPRESENTATIVE 
  FROM NEW JERSEY, CHAIRMAN, SUBCOMMITTEE ON TACTICAL AIR AND 
                          LAND FORCES

    Mr. Norcross. The subcommittee will come to order.
    I would like to welcome everybody to today's Tactical Air 
and Land Subcommittee hearing. This morning, the Army will be 
updating committee members on efforts to modernize and update 
ammunition production and the progress made on these efforts 
since we last had a hearing on this back in September of 2020.
    We are in person, without masks, so I want to first say how 
good it is to see everyone. It has been a rough couple of years 
when it has come to the pandemic, but the good news is I 
believe we are on the other side of it. Doesn't mean we are 
completely out of the woods, but being with people and having 
an exchange I think is just so much more beneficial. But 
together we did get through it, so welcome back.
    And for those on remote, it is good to have you here. And 
let us continue.
    The hearing was the start of an ongoing conversation 
between our committee and the Army [on] improving the state of 
conventional ammunition production facilities across the 
country. Both Congress and the Army are certainly aware the 
facilities are long due for modernization, and I can't 
emphasize that enough.
    I have had the honor of visiting several of these. And 
having someone who came out of an industrial background, 
shocking is not overstating the condition of some of our 
facilities. And I know I am speaking to those here that 
understand that, but we want to make sure that when we start 
talking about single points of failure and supply chain, 
particularly in the environment that we are living in today in 
this world, to say this is more important than ever is also an 
understatement.
    So the production [process], the tooling facilities, are 
all operating much like they did during the Second World War, 
and that is certainly true.
    Since September 2020, our last hearing, two NDAAs [National 
Defense Authorization Acts] have come and gone, and in both 
bills this committee supported the Army in addition to the 
baseline, the unfunded priorities, and that was meant to 
kickstart the process of upgrading our modernization and safe, 
efficient production of conventional ammunition.
    Once again, this year the budget request does not appear to 
adequately prioritize the conditions we are looking at to 
modernize, and we have been very focused on this. So while it 
is encouraging to see some movement, the Army is paying closer 
attention to these facilities, and we remain concerned that the 
Army will lose momentum if these efforts aren't sufficiently 
funded in the base budget.
    The Army should not rely on unfunded priorities for these 
efforts. If these facilities are meant to continue to operate 
in critical strategic assets, that everyone recognizes they 
are, the funding needs to reflect the importance.
    And I just want to take a quick moment of deviation from my 
prepared remarks and just reference the conversations that have 
been on everybody's lips in this building and others talking 
about the Stinger and the Javelin. Without Holston, without 
Radford, that does not happen.
    As a way [of] encouraging the Army to achieve realistic and 
affordable modernization, [the] committee included a provision 
in this year's NDAA requiring the Army to submit to Congress 
its facilities master plan documenting planned upgrades and 
improving to the five government-owned, contractor-operated--
GOCO--ammo plants.
    We are looking forward to reviewing those plans and as part 
of our oversight, and I was up until 1:30 in the morning 
because we have just received them and going through them. And 
we are going to have a number of questions concerning that, 
both today and moving on. Modernizing these facilities is and 
will continue to be important to the warfighters and to our 
industrial partners--the long-term ability to protect our 
Nation.
    Today we are pleased that representatives from both 
contractors who operate these facilities will be joining the 
conversation. The people who execute the production and their 
operation of these sites, their perspective on what the Army is 
doing, as well as their thoughts on what can be improved, is 
incredibly important.
    And today we are pleased to welcome, after being officially 
confirmed in his new role, as I did welcome him home, is the 
Assistant Secretary of the Army for Acquisition, Logistics and 
Technology, the Honorable Doug Bush. Great to have you here.
    And we also welcome back General Daly, Commanding General 
of Army Materiel Command. Good to have you back, General.
    And first time to the committee at least, the Brigadier 
General Gavin Gardner, Commander of Joint Munitions Command. 
And Brigadier General William Boruff, Program PEO [Program 
Executive Officer] for Armaments and Ammunition up at 
Picatinny, which Mikie [Sherrill] represents in New Jersey.
    We are looking forward to their observation, ideas how the 
Army will continue to modernize and improve ammunition 
production.
    We also have--in the second panel today we will hear from 
our industrial partners I referenced who operate these GOCO 
sites. First we have Brett Flaugher, President of Olin-
Winchester. Olin operates Lake City Army Ammunition Plant in 
Independence, Missouri, which we visited with Mrs. Hartzler.
    Jason Gaines, Senior Vice President and General Manager of 
Munition Systems at General Dynamics. And they operate the GOCO 
out of Scranton Army Ammunition Plant, which is on my list. If 
it wasn't for the pandemic, we would have been there already.
    And Brian Gathright, Vice President and General Manager of 
BAE Systems Ordnance, both Radford and Holston's, which we both 
have visited, one being in Kingsport and the other one in 
Radford, Virginia.
    And John McGuiness, Brigadier General retired, President, 
American Ordnance, operating in Iowa, Army Ammunition Plant in 
Middletown, Iowa.
    But, first, I want to turn to Ranking Member, our good 
friend from Missouri, Mrs. Hartzler, for any opening remarks.

    STATEMENT OF HON. VICKY HARTZLER, A REPRESENTATIVE FROM 
MISSOURI, RANKING MEMBER, SUBCOMMITTEE ON TACTICAL AIR AND LAND 
                             FORCES

    Mrs. Hartzler. Well, thank you, Mr. Chairman. And I just 
want to start off and commend everyone for the wonderful job 
that you did during COVID [coronavirus disease] to keep those 
plants open and to keep this capability in production. It is 
just key, and I know that was an all-hands-on-deck endeavor.
    And so I just appreciate the work that you did there to 
make sure that that kept going because we can't--our 
adversaries don't give up and take time off, and so we had to 
do it, but you guys did. So thank you for that, and I want to 
thank our chairman for his continued partnership and keeping 
this critical topic as a key focus of the subcommittee's 
oversight efforts. As you know, we oversee all of the 
acquisition for the Air Force and the Army and the tactical air 
assets for the Navy and the Marines. So there is a lot in our 
portfolio, but this is so so key, and I just appreciate that 
focus.
    And I am pleased for this opportunity to be here with our 
witnesses again to receive an update on the Army's plans and 
the ongoing efforts to modernize the production of conventional 
ammunition.
    As the leadership of this subcommittee, the chairman and I 
have given this topic our personal attention over the past 5 
years, as he mentioned, as you know. In addition to the funding 
increases and reporting requirements this committee has 
sponsored in the last two NDAAs, we have personally conducted 
site visits to the five government-owned, contractor-operated 
ammunition production facilities to get a better idea firsthand 
of the modernization, safety, and operational challenges, and 
the needs that these facilities are dealing with.
    And as the chairman said, as you know, many of these 
facilities were built during World War II, and yet we need that 
capability today just as much, if not more. So it is important 
that these facilities are modern and safe and operational. 
These ammunition plants are vital to nearly all munition 
programs for the U.S. military and the long-term defense of our 
Nation. Many of these plants have been around, as said, since 
World War II and they need improvements.
    Modernization [to] facilities and machinery, safety 
upgrades, and the increased reliability of ammunition 
production are essential for establishing and sustaining a 
resilient defense industrial base capable of meeting future 
combat requirements while better supporting both the warfighter 
and our industrial base partners and workers.
    As the chairman already mentioned, in addition to 
increasing the ammunition procurement funding in the past two 
NDAAs, we also included a provision in the fiscal year 2022 
NDAA requiring the Army to provide Congress, on a 5-year 
recurring basis, the Army's master plans and investment 
strategy for implementing upgrades and improvements for the 
five government-owned, contractor-operated ammunition plants.
    With the first submission of the Army's plans due today, I 
expect our witnesses to provide an overview of these plans and 
their implementation status during their testimony here today.
    While I commend our witnesses for your efforts in taking on 
and addressing the matter of modernizing these facilities, I 
share the chairman's concerns that the Army continues to 
insufficiently fund these efforts in the base budget. 
Unfortunately, the President's proposed budget for fiscal year 
2023, publicly released this past Monday, appears to be much of 
the same--continuing the trend of using ammunition procurement 
and production-based support accounts as bill payers for our 
other Army priorities.
    And I also want to hear--and I am concerned about--with all 
of the munitions and weapons that we are giving Ukraine during 
this conflict--the Stingers and the Javelins--do we see 
increased production reflected in what you are proposing this 
year to backfill those things as well? So I hope you will 
address that.
    I expect our witnesses today to address all of these 
concerns and specifically provide how the Army is prioritizing 
modernization funding to ensure the necessary upgrades for 
manufacturing, safety, and infrastructure improvements will be 
accomplished for this critical industrial base.
    And like I said, I am adding a second one here ad lib, but 
to make sure--I want to hear more information about how we are 
replacing the Javelins and the Stingers and the ammunition, 
frankly, that we are sending over to Ukraine. Are we 
sufficiently backfilling that as well as to meet our own needs?
    So I thank the witnesses for their dedicated service. I 
look forward to hearing from you, and I yield back.
    Mr. Norcross. Thank you. And thank you for bringing up the 
idea of something that we talk about everywhere. And in normal 
times, it is a dangerous, tough job, at those ammunition 
plants, those depots. During the pandemic, it was incredible 
the work that they continued to do, even in the early days when 
we weren't quite sure what was going on. So to all of you who 
participated in that, please make sure that you relay back to 
those folks on the line how much we really do appreciate that.
    And to our witnesses here today, we have seen the 
conditions. We understand the complexity of how we got to where 
we are. And, amazingly, you make it work even in the toughest 
of circumstances. But there is risk, and that is what we are 
going to talk about today.
    So, as I understand it, the Honorable Doug Bush will be 
leading off with the statements for our panel. So, sir.

 STATEMENT OF HON. DOUGLAS R. BUSH, ASSISTANT SECRETARY OF THE 
 ARMY FOR ACQUISITION, LOGISTICS AND TECHNOLOGY, DEPARTMENT OF 
   THE ARMY; ACCOMPANIED BY BG WILLIAM M. BORUFF, USA, JOINT 
  PROGRAM EXECUTIVE OFFICER, ARMAMENTS AND AMMUNITION, AND BG 
  GAVIN J. GARDNER, USA, COMMANDING GENERAL, JOINT MUNITIONS 
                            COMMAND

    Secretary Bush. Chairman Norcross, Ranking Member Hartzler, 
and distinguished members of the House Armed Services 
Subcommittee on Tactical Air and Land Forces, good morning. 
Thank you for the invitation to appear before you to discuss 
the Army's progress on efforts to modernize production of 
conventional ammunition across the industrial base.
    I am pleased to be joined by General Ed Daly and Brigadier 
Generals Bill Boruff and Gavin Gardner. We appreciate you 
making our written statement part of the record for today's 
hearing.
    I also want to acknowledge our industrial base partners 
that will be testifying later today, and, more importantly, 
acknowledge, as both of you did, the workforce at these 
facilities who worked through COVID. As you have seen, they 
work in very difficult conditions at times, and keep things 
going and supply the joint force and our allies with ammunition 
they need.
    It is a credit to that workforce that we have been able to 
keep on track, and we owe it to them to improve those 
facilities. And I would just let you know that I am committed 
to that, and I believe the Army is committed to that.
    Mr. Chairman, as the single manager for conventional 
ammunition for the entire Department of Defense, the Army is 
responsible for providing superior products, reliable sources 
of supply, and economies of scale to meet joint warfighter and 
coalition partner requirements in peacetime, wartime, and 
during national emergencies.
    I am pleased to report that there have been no significant 
shortfalls in conventional ammunition production despite COVID 
and other challenges, and the Army is committed to ensuring 
that ammunition remains available, reliable, and affordable. A 
vital part of the Army's commitment to continually meet 
warfighter ammunition requirements is the urgent need to 
improve production facilities and manufacturing processes to 
enhance worker safety, reduce environmental impacts, and 
sustain production continuity.
    Let me emphasize that our highest priority among those is 
improving worker safety by incorporating the latest automation 
technology to over time reduce worker exposure to hazardous 
situations. To guide our way forward, the Army has developed a 
comprehensive Army Ammunition Plant Modernization Plan that, if 
supported by members, will result in a more resilient, safe, 
environmentally compliant, and effective organic ammunition 
industrial base.
    In addition to our holistic modernization plan, the Army is 
focused on--is also focused on eliminating single-point 
failures as well as securing the full munitions supply chain 
through the identification and mitigation of foreign dependency 
in high-risk areas, while we are exploring new production 
processes to enhance capacity and improve resiliency, rebuild 
organic capabilities, and develop new ways to leverage 
innovation and technologies within the national industrial 
base.
    Additionally, automated supply chain risk management tools 
will help us identify and monitor potentially problematic 
sources of supply and proactively identify potential commercial 
sources capable of supporting requirements.
    Before turning to General Daly for his statement, I would 
like to thank you for this opportunity to discuss conventional 
ammunition production and for your continued support of our 
soldiers, civilians, and their families.
    I look forward to your questions.
    [The joint prepared statement of Secretary Bush, General 
Daly, General Boruff, and General Gardner can be found in the 
Appendix on page 49.]

STATEMENT OF GEN EDWARD M. DALY, USA, COMMANDING GENERAL, ARMY 
                        MATERIEL COMMAND

    General Daly. Chairman Norcross, Ranking Member Hartzler, 
distinguished members of the subcommittee, good morning. I 
truly appreciate the opportunity to testify today with my 
colleagues on the modernization of the Army's organic 
industrial base.
    Eighteen months ago, Chairman, as you mentioned, we 
committed to providing Congress with a comprehensive 
modernization plan for the Army's organic industrial base, with 
guidance and intent from both the Secretary and Chief of Staff 
of the Army and in close partnership with ASA(ALT) [Assistant 
Secretary of the Army (Acquisition, Logistics and Technology)]. 
I am proud to testify today that we have met our commitment.
    We recently produced a 15-year Army modernization plan for 
the entire OIB [organic industrial base], which includes all 
depots and arsenals as well as ammunition plants, and within 
the ammunition plant community, both contractor- and 
government-operated.
    As the Army undergoes the greatest transformation in more 
than 40 years, the 15-year OIB modernization plan represents a 
once-in-a-generation chance to holistically modernize. With 
collaboration, input, and feedback from our industry partners, 
consulting companies, and academia, the plan provides a 
deliberate and comprehensive roadmap to a 21st century OIB 
focused on processes, facilities, equipment, workforce, data 
and information technology, as well as energy and cyber 
resilience.
    This three-phase plan represents an estimated $16 billion 
investment, $8-plus billion of which will upgrade ammunition 
sites alone. This effort will be significant and bring our 
ammunition plant capabilities into the 21st century.
    Critical to modernization efforts are minimizing human 
exposure to hazards through robotics and remote operating 
processes, seeking to reduce single points of failure and 
dependence on foreign suppliers, and building capacity and 
capability to support the Army and the joint force as we move 
into the future, all while sunsetting and divesting of legacy 
equipment, facilities, and processes.
    As Honorable Bush mentioned, the Army, as a single manager 
for conventional ammunition, has excelled for more than four 
decades in areas of acquisition, production, stockpile 
accountability, and distribution management. ASA(ALT), Army 
Materiel Command [AMC], and the ammunition lifecycle managers 
are completely integrated and synchronized in our roles and 
responsibilities. Together we are absolutely committed to 
providing the joint force and our Nation's allies with quality 
ammunition and being responsive at the tactical points of need.
    AMC directly supports ASA(ALT) across the munitions life 
cycle, producing, storing, distributing, surveilling, and 
demilitarizing conventional munitions, with a dedicated 
workforce of more than 10,000 skilled artisans.
    And I appreciate, Chairman, you mentioning that today about 
their professionalism and what they do each and every day.
    Ammunition plants remain critical to our national defense, 
and I can unequivocally attest to the performance and 
responsiveness of the ammunition OIB. Ammunition plants are 
serving their fundamental purpose of supporting current 
munitions requirements, maintaining surge core capability and 
capacity for potential large-scale combat operations, and 
posturing to support future modern weapon systems.
    We have made some progress over the past several years, but 
now opportunities are replete for real momentum going forward.
    Distinguished members of the subcommittee, thank you again 
for allowing me to appear before you. We truly appreciate 
Congress' continued support of the Army's OIB, and specifically 
this subcommittee's support of the Army's ammunition plants.
    Thank you. I look forward to your questions.
    Mr. Norcross. Are we going to hear testimony--okay. Just 
the two of you. First of all, thank you for your remarks. You 
certainly touched base on a number of areas that we are going 
to touch on today.
    I just want to start out by setting the framework. We have 
ongoing operations that are taking place in the facilities the 
way they sit today, and we talked about you are making it work. 
But we all know there is risk involved in that, and you 
provided a plan that we are looking into and have questions on 
today moving forward.
    We switched over to the GOCO configuration back at the 
Second World War, so it would be flexible, that we could use 
the advantage of having industry and what they bring to the 
table and be able to ramp up when we needed it and to ramp 
down. And it has worked, but it is being stressed simply 
because of the modernization, and obviously we change weapons 
and the way they work each and every day.
    So my question is, with the modernization plan--and you 
talk about 15 years--and we talk about the base budget, which 
was released just the other day: General Daly, does this fully 
fund in the appropriate timeframe your modernization plan? 
Because typically in something that is in dire need of 
upgrading you see a large influx of assets in the beginning, 
because that is where your greatest need is for planning, 
design, construction.
    But I am not seeing it in the base budget the way it came 
out. So could you give me some clarity on how this gets done in 
15 years with the priorities that we are talking about.
    General Daly. Chairman, thank you for that question. The 
way we have structured the 15-year plan is in three phases, as 
I mentioned. The first phase is really building a foundation 
for 21st century capabilities, really getting at the most 
critical processes and capabilities that we need immediately.
    The second phase is really expanding those 21st century 
capabilities and reducing our vulnerabilities as we mentioned. 
And then the third phase is really continuing to expand beyond 
that. And I will just tell you, Chairman, that all three phases 
are linked in with the modernization efforts of both the Army 
and the joint force.
    To answer your question in terms of funding and 
programming, I feel comfortable that with the way we have laid 
this out, it is feasible in terms of execution, and that we can 
still maintain the capabilities that we need in stride to 
support the organic industrial base requirements over time, and 
that it is realistic in terms of its programming requirements 
in terms of the outyears.
    I know you are specifically talking about the budget for 
2023, but in the follow-on years, as I mentioned, being 15 
years, I feel comfortable that the Army recognizes the 
importance of the investment.
    Mr. Norcross. Thank you for answering. Let me follow--and I 
am looking at the chart that was released, and I know it will 
be tough from there, but essentially the budget each year is 
flatlined across there. And what I am getting to is, from what 
we have seen and what you know and what is reported, the risk 
that we are facing today because of the condition of the 
facilities, and typically you would see a larger influx in the 
beginning because this is where we are trying to catch up.
    Why aren't we seeing that in the plan? Let's put the budget 
submission aside. And maybe, Mr. Bush, are you able to----
    Secretary Bush. If I could, sir, yes. So I believe 
ammunition plants specifically, the Army is on a steady level 
of half a billion a year 2023 through 2027, bearing between 
499.6 in 2023 to a peak of 518.9 in 2027. That is based on our 
understanding that is historically high, and it is----
    Mr. Norcross. No question.
    Secretary Bush. So not peaks and valleys. I can also assure 
you that when I was there last year and we were working on this 
budget, this committee's attention to this issue absolutely 
makes a difference. So members going to plants, talking about 
it in hearings, conducting oversight, absolutely helps us in 
the Army make sure that these funds are protected across the 
board.
    There are potential opportunities to accelerate some of the 
projects that we would be happy to share with the committee on 
request. However, sir, there is a limitation on how much 
funding we can put through this process based on the timelines 
for construction--planning and construction while continuing to 
operate the plants. But we are happy to work through 
opportunities to accelerate with you, sir.
    Mr. Norcross. So we will get into that a little bit more. 
And certainly, our partners who have shared with us in the 
past, some of their thoughts on doing that. But the good news 
is, yes, historically high numbers, but it is needed 
incredibly.
    Let me just follow up with that, because as we were 
visiting the plants, the one facility at Radford has a 
relatively new complex that was getting ready to come online. 
Incredible facility. The original budget for that facility and 
the timeline that was laid out, radically different. Much 
longer.
    It is hard to say there is a typical building, particularly 
in this type of area, but what is the timeline from--you have 
laid out a plan here for modernization. We know what facilities 
need to be done. What are we expecting? Because in the past we 
haven't really met those. How is this going to be different for 
these facilities that we are going to be able to lay out the 
budget, the timeline, and actually roll them on when we need 
it?
    Secretary Bush. So, sir, if I may, I have our two experts 
here at the far ends of the table, General Gardner--I could let 
General Boruff speak specifically about the Radford plant you 
are talking about. That might illuminate some of the larger 
issues you are pointing to.
    Mr. Norcross. Great.
    General Boruff. Thank you, Chairman. At the Radford plant, 
as you know, the nitrocellulose that we are referring to, it is 
on schedule to open up later this summer. So we are excited 
about that. There were some construction delays as we 
transitioned some of the partners. We let one of the partners 
go, and the contractor that runs the plant now took it over. 
So----
    Mr. Norcross. Would you please--forgive me for 
interrupting--is that this was a design/build versus a 
government design/build?
    General Boruff. It was. What we do, sir, is we do a 30 
percent design, and then we go through about 2 years, then we 
do the 60 percent design, and then once we have the 60 percent 
design, we lock it in after 2 years and we go to the 90 percent 
design about 2 years later. So that is the design phase.
    I will use an example of an ammunition plant that we are 
building for the 6.8 [mm round]. We have just done our second 
charrette out at Lake City where we are using--we are working 
hand in hand with the operating contractor as we go through and 
build that facility. We have been planning that for about 2 
years now. And once we get the down-select for the Next 
Generation Squad Weapon, we will be able to dive into that with 
the contractor to build that facility up correctly.
    Mr. Norcross. So the design/build is the way that you are 
looking at for this modernization plan versus there are several 
other methods you can look at. Are you comfortable with those 
design/build and getting it in on time and budget?
    General Boruff. As to the 6.8, yes, we are comfortable with 
that. We have just been through our second charrette there with 
the operating contractor. We are using their facility as an 
example.
    With the government requirements compared to their 
requirements, they were able to stand their facility up in 
about 9 months to--9 to 15 months. Ours were probably--we are 
estimating--about 2 years. The reason for that is the extensive 
safety requirements that we have as the Federal Government that 
they do not have to do on the commercial side.
    Mr. Norcross. That is what I am looking to get at. Could 
you just give us some clarity on what some of those advantages 
are that they have that we don't?
    General Boruff. So we have to have fire extinguishment 
processes. We have to have the Halon fire extinguishers at all 
of the bays. They do not have to have--they have to have them 
in certain bays where they are just handling certain materials, 
but our safety professionals came in and said, ``No, we need 
them in all bays.''
    So that is a design piece that we didn't have off of their 
plant out of Oxford, Mississippi, that we are mirroring to go 
to our 6.8 facility. So we have to add the extra safety things 
in, so we had the DOD [Department of Defense] and the OSD 
[Office of the Secretary of Defense] safety folks come in and 
advise us what we must--what we need to do for safety, and that 
adds the time and the additional cost from the commercial 
sector.
    Mr. Norcross. I am not sure if safety is the one we want to 
hone in on trying to save money on. But certainly some of the 
other areas, other than safety--typically, at an ammo plant, 
fire extinguishers are not a bad thing, and we certainly want 
to do it.
    But let me----
    General Daly. Chairman.
    Mr. Norcross. Sir.
    General Daly. If I could, I think the other big concern 
that Honorable Bush and I have going forward is the continued 
escalation of building materials and labor in this process. And 
so as we go forward, we just need to continue to look at this, 
and as we revisit the modernization plan every year, obviously, 
adjusting accordingly based on those potential escalation in 
prices.
    Mr. Norcross. We will get more into that, but I want to 
give my colleagues a chance. Mrs. Hartzler.
    Mrs. Hartzler. Thank you. The first question was dealing 
with the 6.8 and the new Next Generation Squad Weapon program 
at Lake City. So you may have answered it, but I just want to 
make sure. I was just wondering how you are planning to 
integrate this new round into the production at Lake City, and 
if you could walk us through some of the facility modernization 
projects that are going on there.
    So can you clarify between--you said there is already a 
facility, but you are building a new one--anyway, just kind of 
clarify what is going on there.
    General Boruff. I can. Thank you for the question. So for 
the 6.8 facility, we are actually demolishing the old--an old 
building on the installation. We are doing that now. That 
doesn't partake in where we need to go for the new facility. We 
are waiting for the down-select. And, as you know, that will 
happen probably in the next month or two.
    So once that down-select is made, whomever wins that, they 
have a 10-year responsibility to build the ammunition. About 2 
years into it, in the 2024 to 2026 timeframe, they will start 
working with us. They will work before that, but we will 
actually have a building then. They will start working on the 
building with us to make sure we have the facility set up to 
optimize it as we move forward. And then they will be our 
second source for ammunition in the future, the winning 
contractor, for whatever round we start building at the 
ammunition plant.
    Mrs. Hartzler. So what is the first source?
    General Boruff. It will be us. So, in 2026, we will be the 
primary source; 2026, 2028, we will take over the mass 
production of that said round. And our second source will be 
the winning contractor, so we will always have a domestic 
second source, ma'am.
    Mrs. Hartzler. So you build the building, but you work with 
them on what needs to be inside.
    General Boruff. We build the building, and we work with the 
operating contractor, and they work with that winning 
contractor vendor, and we team together to build the government 
plant. That is correct, ma'am.
    Mrs. Hartzler. Very good. Okay. Great.
    And, Honorable Bush, you mentioned in your statement 
something that I wanted to hear more about. What are some of 
the most specific single points of failure and single foreign 
sources in the ammunition production supply chain that need to 
be addressed? This is something I am very concerned about, and 
I think most everybody in Congress, especially after COVID, are 
concerned about--our dependence on other countries, and 
certainly as we are producing ammo.
    So can you kind of let us know, what are some of the single 
points of failure, as well as foreign sources?
    Secretary Bush. Thank you. Thank you, ma'am. I will start 
way out if I could. So, you know, our ammunition production 
partners and the government, you know, are in a global 
marketplace; for example, precursor chemicals.
    Mrs. Hartzler. Yeah.
    Secretary Bush. I am confident that we have a good 
understanding of those supply chains and where chemicals, for 
example, come from. They can come from, in some cases, China, 
but also, in some cases, India, but also a lot of NATO [North 
Atlantic Treaty Organization] allies and partners. And we do a 
lot of work with Canada, for example. So I believe we have a 
good visibility of that supply chain. That is step one.
    Step two is what you are referring to, which is mitigation. 
So we are constantly looking at ways to qualify additional 
sources, if necessary work with our vendors to shift sources 
from countries less friendly to the United States to more, if 
it is something that we don't produce in the United States. 
That is ongoing work, ma'am.
    The details of which sources tie to which weapons are 
sensitive information that I could provide in a different 
forum, but we do have examples of that, ma'am.
    Mrs. Hartzler. Can you say generally, some of these 
sensitive, critical sources that are not available in our 
country, do we have the capacity to build them here? I mean, do 
we have those minerals in the ground in some mountain somewhere 
that we could, if we had the right policy, be able to source 
from here?
    Secretary Bush. Well, ma'am, I think probably yes, if we 
chose to. You know, we can do anything in America. We could 
build all of these things. We could have chemical plants. We 
have them to produce materials. I think it is a question of, as 
you mentioned, policy.
    So the degree to which you are comfortable with us sourcing 
from friendly countries, for example, but also some that are a 
little less friendly, and those are individual choices we need 
to make, and happy to work with you on specific examples where 
you have serious concerns and illuminate our detailed plans.
    Mrs. Hartzler. I would like that. I would be very 
interested in sitting down with you in a different setting and 
getting a briefing on what some of those materials are and what 
we need to do here, because I just think we are very 
vulnerable. There is a lot of bad guys in the world, and we 
need to become self-sufficient in many of these defensive 
capabilities. So thank you.
    So I wanted to ask again, Mr. Bush, having personally 
visited several of these ammunition plants and witnessed the 
dangerous conditions in which some of these manufacturing 
processes are currently operating, I am specifically pleased 
the Army is including machinery and facilities investments in 
automation and remote operations. And you mentioned that, and 
you specifically mentioned such plans for the modernization at 
Lake City.
    So can you provide an update on how these efforts are 
progressing and what challenges still remain?
    Secretary Bush. Yes, ma'am. If I could start, and then turn 
to my expert colleagues, if I may. Overall, as you have seen 
when you visited the plants, they are a combination of brand-
new things and very old things.
    Mrs. Hartzler. Right.
    Secretary Bush. So one building right beside another 
might--one might be very modern, and one might be of serious 
concern, as you saw. So I think we are making progress, but it 
will take time. If I could defer to my expert colleagues to add 
a little more detail----
    Mrs. Hartzler. Sure.
    Secretary Bush [continuing]. On some specific examples.
    General Boruff. Thank you, ma'am. So we--as you know, it is 
in the study, you will read we worked with Sandia Labs to 
identify a lot of the safety issues that we go through. They 
gave us--they broke it down into three--1 to 5 year, 6 to 10, 
10 to 15--and the recommendations we will go through.
    We are looking at the infrastructure as we go through to 
make sure as we put those facilities in--and specifically at 
Lake City, you know, looking at cameras, a lot of inspections 
done by the people, by the energetics. Honorable Bush and 
General Daly is one--they both spoke to one of our highest 
priorities is safety and getting the folks away from 
energetics.
    So looking at cameras to do some of the inspections for the 
primers. I know you have seen that. It is a lot of hands-on. 
And getting them away from that and having cameras do that, 
that is what we are looking at, working with Sandia Labs.
    Mrs. Hartzler. So the cameras will do the inspecting, 
right. I mean----
    General Boruff. Right.
    Mrs. Hartzler [continuing]. You still have to have the 
hands-on, putting the primer in the bullet.
    General Boruff. We are also looking at automating that, 
automation to make that done with robotics, but that is--we 
have got to make sure we have the right infrastructure before 
we start putting those type of things in.
    Mrs. Hartzler. That is what I wanted to hear. And who pays 
for that? Is that the contractor, or will you be buying the 
robot?
    General Boruff. So that comes out of our PAA money, 
procurement Army ammunition--procurement Army ammunition 
funding that you give us, and we really appreciate it. At the 
GOCOs, we do that type of funding. It is different at the other 
installations we talk about, but that is our money that we plan 
with.
    The contractors can put--and they do invest their own 
funding. You will hear that later this afternoon. And so we do 
partner with them often as we do these endeavors.
    Mrs. Hartzler. Okay. Great. And the last question--I want 
to give my colleagues an opportunity, but back to my original 
question. I have two goals today--to hear more about the 
modernization efforts and what we are doing, and increased 
safety and production capability. But the other is to address 
the shortfalls or what is going on with Ukraine and other parts 
of the world.
    So what is the status of the Javelin, the Stinger, and ammo 
inventory that we have now? And does the President's budget 
adequately address these transfers and needs to backfill, plus 
to make sure--shore up what we have?
    Secretary Bush. So, ma'am, it is a multi-part thing. One 
thing Congress already did--and thank you--was provide $3\1/2\ 
billion in the Omnibus, a fund that we can draw from to 
replenish weapons and equipment provided to Ukraine. So that 
is--we already have that money. Congress will very soon get the 
first of several responses showing how we intend to use that 
funding. It will be specifically to Stinger and Javelin. So 
that is imminent, that first--you will see the plan to address 
that near-term thing.
    There is also--the Army has also transferred large amounts 
of conventional ammunition, as you know, ma'am. So I expect--I 
am working with my DOD colleagues--that that will be also 
something we notify you of using to replenish our stocks out of 
that $3\1/2\ billion.
    So that will be money we already have that, once approved 
by Congress, it is a notification process. Once approved, we 
will get that immediately into the ammo plants to start 
rebuilding our stocks.
    Ma'am, if I could about different risk areas, it varies. In 
some cases, what we have provided is a tiny amount of our 
overall stocks. In other areas, it is a more significant 
amount. Details are classified, but we can provide those and 
you would see which areas are more concerning than others.
    Mrs. Hartzler. Very good. Thank you.
    I yield back.
    Mr. Norcross. Thank you.
    Ms. Sherrill.
    Ms. Sherrill. Thank you. And, General Boruff, I want to 
thank you for hosting myself and Mr. Bush and local elected 
leaders. It was really a wonderful visit, and everyone shared 
my real pride in the incredible work that you and the men and 
women at Picatinny do. So thank you very much. And thank you, 
Mr. Bush, for coming up to Jersey. We appreciate it.
    So, Secretary Bush, I think we can all agree on the need to 
bring our ammunition plants into the 21st century. From your 
perspective, how do we foster the kind of change necessary to 
modernize the ammunition industrial base?
    Secretary Bush. Thank you for the question, ma'am. And, 
yes, it was great to get up to Picatinny to see that amazing 
workforce in your district. Thank you.
    Well, we have to lead. So the government needs to lead. I 
mean, as I mentioned, under legislation, the Secretary of the 
Army is responsible for being the single manager for the entire 
Department [Department of Defense]. So we can't expect others. 
And I think it starts with what General Daly was referring to--
sustained funding across the FYDP [Future Years Defense 
Program] that we can work with our industry partners to get 
things moving.
    I think there has been a definite change in tone in the 
discussions in the Army with regard to this, and it is largely 
a product of the great work the committee has done on doing 
oversight here. So keeping that going helps us as we tussle for 
resources inside the Army to make sure that these things remain 
well funded. So that is one, ma'am.
    The other is we need to be--if I may defer to General Daly 
for a couple of specifics--thoughtful and flexible about how we 
do this, so we are doing it in a modern way and not just 
falling back into all of our old practices that, as the 
chairman was referring to, can sometimes add time where it is 
not necessary.
    General Daly. Congresswoman, thank you for the question. 
And just to expand on what Honorable Bush mentioned, in terms 
of framework, the way we have worked this new modernization 
plan, we did it a little bit differently than in the past.
    If you were to look at our master planning efforts at each 
depot, arsenal, and ammunition plant, you would pick up a hard 
copy document that was done recurringly over a several-year 
period. And it wasn't dynamic and fluid in nature and didn't 
really keep up, in some cases, with industry standards and 
processes.
    What you will see now is the transition from those hard 
copy documents to a data repository that is dynamic and 
flexible in nature and that is revisited on an annual basis and 
we will provide the committee with--the subcommittee with that 
information.
    But, really, not only in terms of the way we looked at how 
we modernize, but the processes and framework we looked at to 
get at this modernization effort over time, so that if we can 
accelerate in certain cases based on funding, we will. If we 
have cost escalations where we have to defer, we know exactly 
what moves and holds us, we can hold ourselves accountable to 
the execution of that comprehensive plan that will bring us 
into the 21st century.
    Ms. Sherrill. Thank you. And, Secretary Bush, what role do 
you envision for JPEO A&A [Joint Program Executive Office, 
Armaments and Ammunition] in these efforts, and how is 
Picatinny as the home of both the JPEO and the Armaments Center 
uniquely qualified to carry out that vision?
    Secretary Bush. Yes, ma'am. Picatinny, and more importantly 
the people who work there, are absolutely vital and essential 
to any of this coming together. So, as you saw from your visit, 
that is both a facility where we have people who just manage 
ongoing contracts and production, but also, just as important, 
the future.
    So that workforce that does research and development on, 
for example, the range of new munitions we are going to need 
for the Extended Range Cannon Artillery system, which I think 
is only going to be more and more once that is fielded, and as 
you are seeing from the current conflict the importance of 
precision at range and what it can do, I think I only see 
growth.
    So I believe that the amazingly talented workforce we have 
there as the Army rebuilds its long-range fires capability in 
particular, but also invests in new small arms ammunition, is 
only going to see more and more work.
    Ms. Sherrill. Thank you. And, General Boruff, did you have 
anything to add?
    General Boruff. Ma'am, thank you for your visit. Having you 
there, and Honorable Bush there, was fantastic for the 
workforce, showing them the importance of what they do. And as 
Honorable Bush said, we are working--the requirements that will 
go in the outyears, we are working with long-range fires, we 
are working with the cross-functional teams, and making sure 
whatever the new weapons are, we are building the rounds in 
Scranton.
    We are taking them out to Iowa where we are doing the LAP 
[load, assemble and pack] there, which load assemble. And then 
we are bringing all of that back together to the industrial 
base. So we are using the whole OIB for these efforts. As has 
been said before, the 6.8, that is all controlled out of 
Picatinny, ma'am.
    So even though it is in other States, that is the nexus of 
where all the planning starts, working hand in hand with 
General Gardner at the other end of the table at those 
respective plants.
    Thank you, ma'am.
    Ms. Sherrill. Thank you. I would love to go on, but my time 
is up. So I yield back.
    Mr. Norcross. Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. I would like to thank 
our witnesses for joining us today. I would like to get the 
panel's perspective on where we are and the risk we face today. 
If you go to 2017, the Association of the United States Army 
Institute of Land Warfare did a study looking at production of 
munitions and what the challenges were from that point going 
forward.
    What they found in the 2017 study is that about a third of 
the 3,000 different types of ammunition were actually 
undersupply. So we weren't producing what we needed within that 
realm. What they also found in that study was that 25 percent 
of the current munitions stores that we have are 25 years of 
age or older.
    So as we look at the risk we take on with aging munitions 
stores, with lack of production capability, I think that is an 
unacceptable risk. So I want to get your perspective on, where 
do we see the future need--and I say ``future,'' starting 
tomorrow--the future need not only in the munitions that we 
need to counter the challenges in front of us, but also how do 
we get that production capability in place and operational as 
quickly as possible?
    A great example is we are using up lots of Javelins and 
lots of Stingers. The Stinger is a circa 1960s weapons 
platform. Listen, very, very effective, but the question is, if 
we are going to go into production large scale to replace the 
ones that we are using, is it a wise thing to reproduce a circa 
1960s platform, or is it something that we ought to look at 
something like the Starstreak, the Starstreak II, 2007, a 
pretty incredible weapon.
    If we are going to be doing that recapitalization, 
shouldn't we be looking in the future? So I want to get your 
perspective on where things are in the future, and then what 
are you doing in communications with the industrial base? They 
have an incredibly important part of this. They are the 
innovators and creators, and to me you can leverage them in a 
lot of different ways.
    So I wanted to get the panel's perspective on that.
    Secretary Bush. Mr. Wittman, if I could start, sir, on the 
Stinger specific. I think the approach the Army is going to 
take--as you know, we have a current requirement for the 
current weapon, which, as you note, is a classic design but 
still effective. So I believe we are going to use funding 
provided by Congress to replenish weapons similar to what we 
provided--our current weapon.
    However, the Army has a requirement underway--work on a 
requirement for a new missile potentially underway that will 
look at the future you are talking about. So I think all of the 
above, sir. So I think we need to get the Stinger back in 
production to replenish our--what we have sent, and also to 
support likely allies requesting more weapons than have 
happened today. So we are trying to get ahead of that.
    But also look to start, once the Army decides, a research 
and development effort to look at a potential new missile with 
perhaps greater range, sir, but that process in the Army is 
still underway to determine what the requirements would be for 
that. But I expect us to do both, sir.
    Mr. Wittman. Thank you.
    General Daly. Sir, if I may. Congressman, just to add on to 
what Honorable Bush mentioned. First, I would just tell you 
that as the Army acquisition executive prioritizes efforts for 
production, and we work collaboratively on production 
requirements increases over time, I do feel very, very 
comfortable that we are working collaboratively with our 
industry partners in terms of making sure that there is no 
degradation in support of current and future requirements.
    I feel very, very comfortable that we continue to mitigate 
any potential shortfalls based on the partnership with our 
industry partners. And as we look to the future, we 
continuously reassess our overall requirements by specific type 
of ammunition as we move into the future.
    If you don't mind, I would like to turn it over very, very 
quickly over to General Gardner, so he can give you just a 
little bit more perspective on it.
    Mr. Wittman. General Gardner.
    General Gardner. Sir, additionally, the quality that our 
manufacturers produce of really amazing munitions allows us to 
do a stockpile reliability program at the Joint Munitions 
Command, every single munition ever produced in this country. 
Every 3 to 5 years it is retested to make sure it performs as 
designed. When it doesn't, we go to industry to see can it be--
get a service life extension, so that we maybe can make those 
missiles go longer, those rockets go longer, et cetera.
    And when we can't, sir, obviously, that helps inform JPEO 
on my right, General Boruff, on an acquisition strategy as we 
see it in advance of a deteriorating [inaudible], so that we 
can maintain that reliability that you are concerned about. 
Over.
    General Boruff. Sir, as far as the programmatic side for 
production, in 2016, 2017, we identified we need to up the RDX 
[Research Department Explosive] and IMX [Insensitive Munitions 
Explosive]. That is what you were referencing to. In 2025, we 
will have those facilities done. We let three contracts last 
year. They will be finishing around the 2024 timeframe. The 
last one we will let this year to finish around the 2025 
timeframe.
    But you can see how long it takes to take 8\1/2\ million 
pounds per year to get to 15 million pounds a year for RDX. And 
for IMX, going from 3 million pounds a year to 8 million pounds 
a year, it took us from 2017, and we will have it--we will have 
it set in 2025. But we are getting after it.
    As we identify those--that was an OSD--as a single manager 
of conventional ammunition, they gave us direction and we have 
been moving out ever since with the contractor.
    Mr. Wittman. Very good.
    Thank you, Mr. Chairman. I yield back.
    Mr. Norcross. Can I just follow up on--for both? The 
Stinger is not in hot production; Javelin is. The propellants 
and explosives that are used in those are not unique just to 
those. We use them in many products.
    General Boruff. Yes, sir. That is correct. We use them in 
many products. Correct.
    Mr. Norcross. Mr. Carbajal, you are now recognized.
    Mr. Carbajal. Thank you, Mr. Chair. Russia's unprovoked war 
in Ukraine highlights the Army's need to increase ammunition 
production capacity at its production installations. As the 
Army conducts its facilities upgrade, it should also be alert 
to potential single points of failure in the supply chain, 
because operational readiness is critical.
    For example, the government-owned, contractor-operated, 
GOCO, Holston Army Ammunition Plant in Tennessee produces the 
majority of explosives used in every lethal system within DOD, 
from bombs and missiles to hand grenades, mortars, and tank and 
artillery ammunition.
    General Boruff, what measures in the Army Ammunition Plant 
(AAP) Modernization Plan are being taken to reduce single point 
of failures at its ammunition production facility? And what 
additional redundancy measures, if any, should be considered?
    General Boruff. Thank you very much for the question. That 
is a multi-part answer. As Honorable Bush said earlier, we are 
doing an analysis to see where those single points of failure 
are at. We have done that. We work very close with our OSD 
partners. And as we identify those, as an example, black powder 
became a single point of contact as the--in June of this year, 
we had an explosion, but it is the only source.
    We have gone back and we have got a second source, which is 
WANO powder out of Germany. That is our second source now; we 
are testing that. And Estes [Estes Energetics] bought out the 
company which is GOEX, and we are working with them using the 
Defense Production Act Title III, which has funding by Congress 
to make sure we can stand up that single point of failure and 
get other sources, as Mr. Bush stated earlier.
    General Daly. Congressman, if I could--if I could make a 
quick comment.
    Mr. Carbajal. Yes, please, please proceed.
    General Daly. Congressman, I think the other key piece is 
that--to add on to what General Boruff mentioned is building 
into the organic industrial base modernization plan the ability 
to protect our ammunition plants from both kinetic threat as 
well as cyber threat.
    And so we mentioned, as an example, the increase in 
production that is forthcoming at Holston, and there are 
several other points of failure that as you know very well 
exist. But our efforts with investing for protection I think 
are robust in this plan, and our efforts with Army Cyber 
Command and other organizations to be able to protect upon 
potential threat in the cyber domain have been significant.
    And if you don't mind, General Gardner has about 30 seconds 
of an update he would like to give you just to answer the other 
part of the question. Over.
    Mr. Carbajal. Okay.
    General Gardner. Sir, additionally, on top of the cyber 
activities--and, again, we thank Congress for their funding to 
enable us to get after the internal controls and other areas 
that might make us vulnerable in these facilities--it also 
becomes the efforts to increase water production and water 
treatment, because in order to expand capacity at Holston in 
particular, we know we have to upgrade the facilities there to 
go from 55 million gallons of water a day to maybe up to 100 
million, which, you know, we will take it in from the Holston 
River and turn it back in actually at the same quality, if not 
better, than what we received it. But it will support the 
production efforts and do the single points of failure 
mitigation. Over.
    Mr. Carbajal. Thank you. The Army has been the single 
manager of conventional ammunition for DOD, providing central 
management of the conventional munitions for all the services. 
However, the Army's organic ammunition production industrial 
base requires critical infrastructure and manufacturing process 
upgrades to support the warfighter's current and future 
ammunition requirements, address continued facility 
deterioration, increase in safety, and improved environmental 
compliance.
    Mr. Bush, do you believe there is sufficient funding to 
execute the AAP Modernization Plan? And what additional actions 
can be taken to accelerate critical upgrades to Army ammunition 
plants?
    Secretary Bush. Yes, sir. So as far as the budget request 
before members, the sustained amount of a half a billion per 
year would be historic for the Army in terms of investments in 
ammunition plants' refurbishment. I believe there may be some 
opportunities for accelerating some of those projects, but 
these are multiyear projects. As General Boruff was mentioning, 
we are only now getting close to finishing some work that was 
done at Holston started years ago.
    So I am comfortable with the levels we have in the budget, 
as long as they are sustained across the 15 years General Daly 
was mentioning. That will get at our most critical items.
    However, happy to talk to the committee and provide members 
with opportunities for acceleration of some of the future 
years' work if that is desired.
    Mr. Carbajal. Thank you. I am out of time.
    I yield back, Mr. Chair.
    Mr. Norcross. Thank you. Mr. DesJarlais. Dr. Desjarlais, 
excuse me.
    Dr. DesJarlais. Thank you, Mr. Chairman. And thanks to the 
panel for coming before us today.
    I would like to spend some time today discussing the 
Holston Army Ammunition Plant in Kingsport, Tennessee. First, 
can you outline all of the critical work that takes place at 
Holston and how their work supports the warfighter? And, 
secondly, can you outline some of the issues that Holston 
currently faces as well, and provide some history surrounding 
Holston's issues with meeting sufficient production capacity in 
the past?
    General Daly. Congressman, thank you for that question. I 
would categorize Holston as absolutely critical and essential 
to the Army's organic industrial base and to supporting the 
warfighter each and every day.
    In terms of explosives and the products that are 
manufactured there, capability is absolutely critical. When you 
talk about specific upgrades to get to the levels that General 
Boruff talked about in terms of RDX, HMX [High Melting 
Explosive], and IMX, behind that are several different projects 
that really will support Holston into the future.
    And so I would like to turn it over to General Gardner and 
General Boruff to just hit some of those from the standpoint of 
production, and then support of the infrastructure as well.
    General Gardner. So, sir, your question about what it 
supports, basically every type of bomb, hand grenade, tank 
round, et cetera, the explosives produced at Holston will go to 
those. And it goes across all of our joint partners.
    Sir, setting the base, whether it is water distribution, 
water treatment, it is very hard to do--work acids without 
water. And so what you will see in this modernization plan is a 
detailed plan to get after water and to safely return water, as 
needed, back to the environment in the Holston River.
    Additionally, there will be additional storage capability 
for acids, and our ability to store acids in order to beat the 
production requirements over time.
    And the last is to get after drying, which is one of our 
most dangerous operations, and you will see that we are 
modernizing the drying activities at Holston. Over.
    General Boruff. Thank you very much, sir. As was said 
earlier, the explosives are key to us. The 2016/2017 bill that 
we talked about earlier to bring those--those were U.S. Air 
Force requirements. So as the single manager of conventional 
ammunition, we look across all of DOD. So it is not just the 
Army's munition; this goes in almost all the munitions across 
the whole OSD. So the importance can't be overstated. They are 
critical, and we are proud of all the work they do there.
    Dr. DesJarlais. Thank you. In reviewing the current 
modernization strategy, it does not seem clear to me that 
enough recognition is given to the challenge of simultaneously 
executing these massive modernization projects while also 
meeting production levels.
    How do you engage with your contractor counterparts to make 
these decisions concerning cost, schedule, production rates, in 
order to maintain this balance of today's production demands 
and new construction needs?
    General Boruff. That is a very hard balance, and that is 
very difficult for us. We work very closely with the operating 
contractor to make sure we maintain it, because as you said and 
as you can discern from this conversation, they can't stop 
production. It is critical for the Department of Defense. 
Balancing those two is key.
    And probably--we work very closely with the OEM [original 
equipment manufacturer] and they will have the distinguished 
body that can address that from their perspectives. But that 
balance is key with the government. We have to manage our 
expectations, and we manage their expectations. But partnering 
together is how we make it through that, Congressman.
    General Daly. Congressman, I would just tell you, to give 
you the confidence of the validity and the feasibility of the 
15-year modernization plan, great collaboration with our 
industry partners. Eighteen months of work to get here. And 
very well, I think, synchronized and orchestrated, so that we 
balance between infrastructure improvements and continued 
production.
    We will reassess that every year in our process, so that we 
don't get into a situation where we have a degradation in the 
ability of the organic industrial base to produce the munitions 
required.
    Dr. DesJarlais. Okay. Thank you. This may be a better 
question for the contractor panel, but I know my colleague, 
Diana Harshbarger, who represents Kingsport, Tennessee, and I 
share concern at how the workforce is being taken into account 
in these modernizations. These communities have a bond with 
these workers, and there is often generational families 
involved.
    How are you considering and balancing these relationships 
as you look to modernize these AAPs to improve safety and 
efficiency?
    General Gardner. So, sir, what I would tell you is that 
people are center to everything that we do at these facilities, 
and so we work hand in hand with our contractors. As we bring 
on modernization efforts, it really becomes, how are we going 
to--you know, I won't use the term ``modernize,'' but how do we 
increase the talent of our workforce, so they can execute the 
new processes and implementations that we are going to do at 
these facilities.
    So it is a hand-in-hand requirement. And so that we get 
ahead of that--so we train the force, we prepare the force, as 
we bring in these new modernization efforts. And I can 
guarantee you the teammates behind me do that as well as part 
of this plan.
    General Daly. And, Congressman, I would just tell you that 
as we talk about minimizing human exposure to hazards through 
robotics and remote operational processes, we are really not 
talking about reducing the workforce. We are talking about 
realigning the workforce accordingly.
    I feel very, very comfortable that we will continue to 
recruit, retain, train, and treat our great artisan workforce 
the same way we have for years, and understanding the 
importance of what they provide the Army and the joint force.
    Dr. DesJarlais. Thank you all for your great work. Thanks 
for your indulgence.
    Mr. Chairman, I yield back.
    Mr. Norcross. Thank you.
    Mr. Jackson, you are now recognized.
    Dr. Jackson. Thank you, Mr. Chairman. I am extremely 
concerned about some of the budget numbers that I have seen 
from the Department of Defense. We heard yesterday from General 
Wolters about the potential need to change our force posture in 
Europe. However, we are also supposed to simultaneously keep 
the Indo-Pacific as our priority theater.
    The budget documentation that was sent to my office from 
the Army states that the fiscal year 2023 decrease in funding 
for research, development, and acquisition is due to a reduced 
requirement for ammunition replenishment. I agree with looking 
at ways to save money, but we need to--we need to do it 
responsibly and in the appropriate manner.
    Mr. Bush, does the budget--does the budget give you what 
you need for these modernization efforts? And do you believe 
that the Army is expecting Congress to add funding like we had 
to do last year when this is all ultimately over? And, lastly, 
after the drawdown in Afghanistan, are there any U.S. 
stockpiles of ammunition that we are able to draw from that 
have contributed to the reduced requirement of ammunition 
replenishment?
    Secretary Bush. Sir, if I could answer in a couple of 
parts. If I could first talk to the money provided by Congress 
for production. So this is the money that flows into the base. 
So the Army very much appreciates approximately $100 million 
that was added to the budget in 2022 for additional ammunition 
production that will flow into our plants.
    A second source of funds to assist there will be the 
funding I mentioned regarding Mrs. Hartzler's question about 
replenishing munitions provided to Ukraine. That will be 
additional funding that will flow through the plants that will 
help.
    And then, Congressman, your question about 2023, that is of 
course up to members to judge whether we hit the target. The 
Army does in every year have to balance across its accounts to 
prioritize certain things over others. And every year we want 
to work with Congress to make sure they understand where we 
accepted risk, and so members can make their judgments about 
whether we got that right. I am happy to do that, sir.
    Dr. Jackson. Okay. Thank you, Mr. Bush. I appreciate that.
    One more question. In 2018, Army Futures Command was 
established in the great State of Texas. Army Futures Command 
oversees the cross-functional teams that help address the 
Army's modernization priorities, such as future vertical lift, 
long-range precision fire, and soldier lethality.
    General Boruff, how does the Joint Program Executive Office 
for Armaments and Ammunition work with the cross-functional 
teams to ensure that our modernization efforts are in line with 
the research and development being conducted by Army Futures 
Command?
    General Boruff. Thank you very much. We work very closely, 
to answer your question, with the CFTs [cross-functional 
teams], the respective CFTs. We are in line as they design the 
new ammunition for the long-range precision fires. We will 
build those rounds. We will build piece parts for those rounds 
in Scranton. We will take them to Iowa, and we will do a load, 
assembly, and pack there. So we will use our entire industrial 
base--industrial base will do that.
    Next Generation Squad Weapon--you mentioned soldier 
lethality--that falls under them. We are building a new plant 
out in Missouri, in Lake City, so those are positive things 
moving forward.
    We are going to demolish an old building, build a new 
facility, work with the winning contractor once they are 
identified to build the ammo plants there. We are building all 
the projectiles for whomever wins out of our facilities now at 
Lake City. Then we will start doing the rounds there, probably 
around 2026, 2028 timeframe, sir.
    Dr. Jackson. Thank you. I just want to say I appreciate all 
of you taking time to be here today, and I look forward to 
working with each of you with my colleagues on the committee 
here to provide our young men and women in the armed services 
the training and the resources they need to accomplish their 
mission.
    And with that, Mr. Chairman, I yield back.
    Mr. Norcross. Thank you. We are going to wrap up this 
section. There is certainly a lot--you are good? Okay. I want 
to thank our colleagues for some great questions, a number of 
things that we are going to have to dig deeper into.
    The study that Mr. Wittman talked about, absolutely, those 
stockpiles critically, but they also pointed out that much of 
those who are out of date are the ones that aren't first on our 
list, second on our list. But the fact of the matter is we need 
to be ready to ramp up, and you bring up a great point.
    Ms. Sherrill talked about the rare earth materials. When we 
were up at Picatinny, with General Malone at the time, we had a 
list of those at-risk materials. We look to get an update on 
that and maybe we will follow up by going up there.
    But, again, we appreciate it. Modernization plan, glad we 
have it, the risk that is involved, the single point of 
failures, and the idea that you are going to reevaluate each 
year. But in the event that something does go wrong, and there 
is a failure, those backup plans are critical. Stockpiles, age 
depends.
    So I want to thank each of you for being with us today. And 
this phase of our hearing will adjourn and we will bring up our 
next witnesses. Thank you.
    [Recess.]
    Mr. Norcross. We are going to try to bring the committee 
back to order. I want to make sure we leave enough time for our 
partners from private industry. Really glad to have you here. I 
think it is a perspective that we need to hear. We talked about 
earlier, you know, the concept, very different from World War I 
to World War II when we brought in industry in a different way 
because you are the subject experts on generally how to build 
things. We know what we want. And it is great to have you here 
today.
    So, again, we have Brett Flaugher from Olin-Winchester, 
Lake City, which Mrs. Hartzler knows. Jason Gaines, who is 
General Manager with General Dynamics, who handles our Scranton 
facility. Brian Gathright from BAE, who has two very important 
plants, in Radford and in Holston--or Holston. And John 
McGuiness, who is President of the American Ordnance.
    Why don't we start going from left to right. It is great to 
have you here today. You heard certainly the plan coming from 
Department of Defense and the Army and what we need, and we 
want to hear your perspective, not only what you heard but what 
your vision is. So if you would.

 STATEMENT OF BRETT FLAUGHER, PRESIDENT, WINCHESTER AMMUNITION

    Mr. Flaugher. Thank you, Chairman Norcross, Ranking Member 
Hartzler, and distinguished members of the subcommittee.
    Good morning. I am Brett Flaugher, President of Winchester 
Ammunition. Winchester is a key supplier of small-caliber 
ammunition to the U.S. warfighter, and we proudly operate the 
government's Lake City Army Ammunition Plant.
    Thank you for inviting me here today to discuss Lake City 
and the important role it plays in the industrial base in 
support of the United States warfighter. Lake City is the 
Nation's only government-owned small-caliber ammunition plant 
employing more than 1,700 highly skilled people. Today, 
Winchester can operate Lake City at a high level of readiness 
because of significant historic investments made to equipment, 
processes, infrastructure, as well as current production 
funding.
    However, Lake City is an 80-year-old facility built during 
World War II. It sits on approximately 4,000 acres with over 
300 separate structures, many beyond their serviceable life 
that must be maintained, updated, or replaced.
    Winchester engages daily in the development of long-term 
strategic initiatives with the government in support of the 
master plan and how it relates to the ongoing modernization and 
transformation of Lake City. Key and immediate actions needed--
some of which are included in the master plan--are ongoing 
improvements in Lake City's safety, manufacturing processes, 
infrastructure improvements, cyber security, and eliminating 
single points of failure.
    The tip of the spear that furthers the change of Lake City 
to a transformational small-caliber facility is the 6.8 Next 
Generation Squad Weapon program. The 6.8 NGSW will bring 
transformational safety systems, facility design, manufacturing 
processes, to Lake City, and a new cartridge for the first time 
in more than 50 years.
    Winchester has safely and efficiently operated ammunition 
facilities for more than 150 years, supplying the U.S. 
warfighter since World War I. While we need little assistance 
in most areas of the day-to-day operation, there are key areas 
to consider for maintaining and improving a high level of 
readiness to serve the warfighter.
    First, our employees are highly skilled in small-caliber 
ammunition manufacturing, facilities management and 
construction, equipment design and build, and high explosives 
operations. Consistent and predictable funding is required to 
maintain the readiness of this highly skilled workforce and 
support ongoing modernization efforts. In short, the ever-
increasing competitive workforce landscape requires job 
security that only comes through secure funding.
    Second, the 6.8 NGSW program is critical to establishing a 
best-in-class small-caliber manufacturing operation and is 
consistent with the overall goal of the modernization of Lake 
City. Ongoing funding support for this state-of-the-art program 
is required. As this new cartridge is developed and stood up at 
Lake City, we must not lose sight of the fact that funding must 
also remain strong for the current operations to address key 
areas of Lake City that are beyond their serviceable life.
    And, last, Winchester does fully support the Army 
Ammunition Plant Modernization Plan. The plan addresses 
significant projects required at Lake City to improve 
technology and critical infrastructure deficiencies that will 
ultimately maximize reliability and readiness.
    Rapid modernization and transformation of Lake City 
requires ongoing partnering between all stakeholders and 
requires timely decisions to drive successful execution of the 
plan.
    On behalf of Winchester's entire workforce, I want to say 
we are proud of the support we provide to the Nation's 
warfighters. I thank you for the opportunity to discuss Lake 
City and Winchester's dedication to the mission and look 
forward to your questions.
    Thank you.
    [The prepared statement of Mr. Flaugher can be found in the 
Appendix on page 62.]

STATEMENT OF JASON W. GAINES, SENIOR VICE PRESIDENT AND GENERAL 
   MANAGER, MUNITION SYSTEMS, GENERAL DYNAMICS ORDNANCE AND 
                        TACTICAL SYSTEMS

    Mr. Gaines. Thank you, Chairman. Good morning, Chairman 
Norcross, Ranking Member Hartzler, and distinguished members of 
the subcommittee. I appreciate the opportunity to appear before 
the subcommittee to testify on the possible ways and means of 
successfully modernizing the U.S. production of conventional 
ammunition.
    I am pleased to be joined by my fellow witnesses, all of 
whom I have personally worked with and respect as distinguished 
industry colleagues. I also wish to acknowledge our Army 
leadership present here this morning whose mission we all 
proudly serve.
    I also wish to thank this committee for your continued 
support of the ammunition industrial base, as well as your keen 
interest in the needed modernization of our vital production 
enterprise.
    I am honored to be here today representing General Dynamics 
Ordnance and Tactical Systems as a Senior Vice President of the 
Munition Systems Business Unit. In addition to serving as a 
systems integrator for over 60 configurations of fielded 
ammunition end items, General Dynamics Ordnance and Tactical 
Systems is also the most prolific producer of energetics 
components and subsystems servicing the U.S. munitions and 
missile sectors.
    Our munition system business unit is dedicated to providing 
full families of tactical and training ammunition across all 
medium and large calibers of ammunition. I am especially proud 
to be representing our 1,600 employees operating across our 10 
operating locations.
    My focus today pertains on our Scranton operations where we 
operate the Scranton Army Ammunition Plant. General Dynamics 
took over operation of the Scranton plant in 2006 when General 
Dynamics acquired Chamberlain Manufacturing, and we have been 
the continuous operator ever since. The dedicated 265 Scranton 
employees produce metal parts or projectile bodies for all U.S. 
Army and Marine Corps artillery programs as well as Navy 5-inch 
54 [caliber] programs.
    The Scranton Army Ammunition Plant is truly a national 
strategic asset, producing in excess of 28 million artillery 
and mortar projectile bodies over the past 60-plus years. It is 
a highly specialized manufacturing center with production 
capabilities and capacities unmatched anywhere in the free 
world.
    Our Scranton workforce is proud of its safety record and 
the reliability of its products in support of our U.S. 
artillery and mortar units on the battlefield. At the present 
time, the Scranton Army Ammunition Plant faces a dual challenge 
in modernizing both its aged infrastructure as well as its 
production capabilities to meet current and future mortar and 
artillery needs.
    This is particularly challenging as we are preparing to 
produce the next generation of artillery projectiles that will 
be fielded as part of the Army's artillery modernization 
efforts. This will involve the introduction of multiple new 
projectile configurations, each requiring some level of unique 
production equipment and tooling.
    More importantly, though, is the need for critical 
infrastructure upgrades that are an absolute imperative in 
restoring the requisite production capability required to 
fulfill Scranton's core mission.
    Our Army customer has been actively working with us to 
identify and fund these critical infrastructure improvements 
with several Scranton facility projects being readied for 
funding, award, and execution yet this year. This includes an 
imminent award to modernize Scranton's production capability to 
support the production of the next-generation 155-millimeter 
XM1128 projectiles. We applaud the U.S. Army's innovative 
thinking and approach in accelerating this effort and award.
    My primary concern is the need to maintain a continued 
focus on this type of transactional velocity, the ability to 
obligate funding, and execute modernization scope on time and 
under budget. I believe this is the way that we, the U.S. 
industrial base, can meet the U.S. Army's long-range precision 
fires modernization and fielding timelines--with an urgent and 
collaborative strategic focus.
    The Scranton Army Ammunition Plant will remain an integral 
component of the U.S. Army's artillery modernization success. 
Our proud Scranton team, in conjunction with our U.S. Army 
stewards, stand ready to not only meet this modernization 
challenge but exceed the fielding objectives of the U.S. Army's 
must-have long-range precision fires mission.
    I look forward to answering your questions and informing a 
success path for modernizing the U.S. production of 
conventional ammunition.
    Thank you.
    [The prepared statement of Mr. Gaines can be found in the 
Appendix on page 71.]
    Mr. Norcross. Thank you.
    Sir.

   STATEMENT OF BRIAN GATHRIGHT, VICE PRESIDENT AND GENERAL 
           MANAGER, BAE SYSTEMS ORDNANCE SYSTEMS INC.

    Mr. Gathright. Good morning. Chairman Norcross, Ranking 
Member Hartzler, members of the subcommittee, thank you for 
inviting me here today to discuss modernizing and sustaining 
the Army's ammunition facilities.
    I will deliver an abbreviated statement now and ask that my 
full written statement be entered into the record.
    I am grateful for the opportunity to provide industry 
perspective on this important mission and the people who 
support it. As a quick introduction, BAE Systems is the 
operator of two GOCO sites: the Radford Army Ammunition Plant 
in Radford, Virginia, and the Holston Army Ammunition Plant 
located in Kingsport, Tennessee. These two sites are essential 
to Army's firepower mission across a range of platforms.
    I am proud of the work that we do in support of the U.S. 
military. Through our unique heritage, BAE Systems is qualified 
as an explosive chemical manufacturer. As the industry leader 
in industry--in energetics manufacturing, we are committed to 
partnering with the U.S. Government on modernization.
    Before I go further, I want to take a moment to highlight 
and put a spotlight on the dedication of the people at Radford 
and Holston during the COVID-19 pandemic. They, along with our 
defense industrial base colleagues, showed up every day under 
difficult circumstances to deliver the readiness to our 
warfighter. They absolutely deserve our gratitude.
    While it may appear on the surface that GOCO sites have 
common themes and adjoining elements, not all GOCO sites in the 
organic industrial base are created equally. Radford and 
Holston have common elements like large acid chemical plants 
and specialty chemical production, while the others focus on 
mechanical load, assembly, and pack facilities, or storage and 
demilitarization.
    It should be our highest priority to continue to modernize 
and transform Radford and Holston into state-of-the-art 
chemical processing facilities, as our Nation's entire 
munitions supply starts at these two sites. This is vital for 
our national security.
    I want to share three perspectives about the important 
challenges of modernizing facilities like Radford and Holston. 
First, the modernization of these sites is a long-term journey. 
These are capital-intensive, and projects of any meaningful 
size take years to execute. Both sites have undergone limited 
modernization over the past 20 years.
    The commitment to a long-term strategy, as well as stable 
and predictable funding, is essential to transforming and 
modernizing Radford and Holston through complex projects that 
will take place over time.
    Second, more funding, even above the Army's recommendation, 
accelerates improvements for the scale of modernization 
required. Over the last decade, these sites have seen 
improvements, including a $1 billion investment in Research 
Department Explosives, otherwise RDX, capability at Holston, 
and tens of millions of dollars of investment in a new 
nitrocellulose facility at Radford. BAE Systems itself has 
invested more than $100 million at both sites combined.
    While this is a substantial amount of funding, I think it 
is important to understand these investments are only for 
building replacements to maintain current processes. There has 
not been timely, adequate, or predictable funding at a rate 
necessary to develop new modern facilities that meet the needs 
of a 21st century operation that is both safer, more reliable, 
and environmentally friendly.
    We need a greater focus on long-term operations rather than 
just managing day-to-day fixes. Recognizing the capital-
intensive nature of this work, we believe that reasonable 
periods of performance should be a standard across all GOCO 
contracts. I recommend a performance period of no less than 25 
years to give contractors the opportunity to invest and realize 
necessary returns on those investments.
    Finally, while the strategy defines projects and funding 
levels, the current modernization strategy does not adequately 
recognize the challenges of simultaneously exercising 
modernization and meeting production levels. I emphasize this 
not as a criticism of the strategy; rather, as a focus on the 
work that Army and industry must engage to modernize these 
facilities.
    There are real and difficult trades around cost, schedule, 
technology, and production rates. If we are to execute 
modernization successfully, then we must find an approach that 
strikes that right balance between today's production needs and 
construction of tomorrow's future plant.
    I would like to thank the subcommittee again for bringing 
attention to this critical issue and recognizing industry's 
role in this important mission.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Gathright can be found in 
the Appendix on page 80.]
    Mr. Norcross. Thank you.
    General.

   STATEMENT OF BG JOHN J. McGUINESS, USA (RET.), PRESIDENT, 
                     AMERICAN ORDNANCE LLC

    General McGuiness. Chairman Norcross, Ranking Member 
Hartzler, and distinguished members of the Tactical Air and 
Land Forces Subcommittee, thank you for inviting me to testify 
about this important subject, and I think--and it is an honor 
for me to be here with you today.
    I think I offer a unique perspective on this challenging 
task because I have literally sat on both sides of this panel. 
My last duty assignment while on Active Duty was the Program 
Executive Officer for Ammunition and the Commanding General at 
Picatinny Arsenal.
    More recently, for the past 5 years, I have been the 
President of American Ordnance, responsible as the operating 
contractor for both the Milan, Tennessee, and the Iowa Army 
Ammunition Plants. Both of these facilities are over 30 square 
miles each and were built in 1941. They are big and they are 
old.
    While the Milan facility is in a state of transition, the 
Iowa plant provides the Nation a facility in size, scope, and 
surge capability unmatched in the national organic industrial 
base. The purpose of the Iowa facility is to load, assemble, 
and pack medium-caliber and tank munitions; C4 products such as 
the M112 lot and the mine line clearing charge; energetic 
products such as mortar prop charges and modular artillery 
charge systems; indirect fire products such as artillery and 
mortars, and unique warhead capability producing warheads for 
Javelin, Stinger, Hellfire, Sidewinder, and additional 
specialty warheads, to include supporting the Department of 
Energy.
    The first topic you asked me to discuss was an explanation 
of current modernization initiatives. In the case of the Iowa 
facility, the major initiative is a long-range precision 
artillery production facility. We are just completing the 30 
percent design phase of this important capability. We will 
complete the 90 percent design phase in the summer of 2023, and 
we will enter the construction phase beginning in the 
government's fiscal year 2024.
    We were fortunate that early on in the planning process, 
Dr. Bruce Jette visited the plant when he was the Assistant 
Secretary of the Army for Acquisition, Logistics and 
Technology. The visit prompted him to not only draft his vision 
for the Iowa facility but also draft up a set of planning 
tenets that subsequently became the planning objectives for 
future modernization projects across the Army's organic 
industrial base as outlined in the Army's Ammunition Plant 
Modernization Plan.
    The second topic that I was asked to speak to was if there 
are any modifications of law, regulation, or practices. I would 
suggest two, but in the interest of time will refrain from 
going in more depth but would be happy to address in questions.
    The first is a review of title 10, U.S. Code, [section] 
2692, entitled ``Storage, treatment, and disposal of nondefense 
toxic and hazardous materials.'' The specific request would be 
to allow GOCO contractors to lease space to commercial 
contractors that use explosives, such as the mining industry. 
These lease fees can bring in revenue to help reduce the 
operating contractor's overhead costs due to meeting the 
government's performance work statement requirements.
    The second item would be more widespread use of FAR 
[Federal Acquisition Regulation] Clause 52.216-4, ``Economic 
Price Adjustment--Labor and Material.'' In today's rapidly 
changing environment, translating into increasing inflation 
rates we have not seen in decades, it is becoming more and more 
difficult to get price quotes that are valid for longer than 30 
days.
    As defense contractors, we must take these short-term 
quotes and respond to government solicitation asking for 5-
year, sometimes 10-year, firm-fixed pricing. And I can 
understand why the government likes firm-fixed-price contracts. 
However, in today's environment, I am not sure the Department 
of Defense really gets the best value in these instances.
    The last item you asked me to address is to identify any 
other consideration for GOCO operations. In this area, I would 
suggest the recognition of the unique costs put on government 
in running a GOCO. One of the challenges confronting GOCO 
operators is the Army has a set of requirements written in the 
form of performance work statements that the operating 
contractor must perform.
    These costs are then rolled up in the pricing of the 
products we make. Some of these requirements are above and 
beyond which a contractor at a commercial facility would incur. 
In the case of Iowa, we must compete for our business. When 
compared to a commercial facility, this is like your competitor 
running a 100 meter dash when you have to run 120 meters.
    But I want to be very clear. We are not looking for a 
handout. What we are looking for is a level playing field to 
compete, and then it is up to us.
    In summary, I want to thank you again for allowing the 
operating contractors to participate in the discussion today. 
The organic industrial base is a crucial component to the 
overall national industrial base and forms the Nation's 
insurance policy, especially when it comes to wartime surge 
requirements.
    I appreciate your time, and I look forward to your support 
of these vital facilities and to answer any questions you may 
have.
    Thank you.
    [The prepared statement of General McGuiness can be found 
in the Appendix on page 94.]
    Mr. Norcross. Thank you for your testimony. I took several 
notes, and it goes to the heart of why we wanted you in. The 
relationship that started under GOCOs decades ago was because 
of your power, your experience, your workforce, your ability to 
be flexible, and certainly your technical expertise. It is why 
you are here.
    The partnership that you had is unique in ways that are 
very different than normal industry, but in most ways you are a 
business. You are running it, and there is risk. But there is 
also reward. And trying to get that right for both sides is 
always the challenge.
    We have a new modernization plan. Each of you spoke to your 
input on it. I am not going to ask you, did it reflect it in 
the end product? We can have those conversations later, but, 
obviously, making those decisions are based on the information 
that you gave them, but also what they know and what they want 
to have.
    So we have a plan, and it is coming together. There is 
risk. I have been to most of the plants and some of you have a 
lot more risk than others because of the facility.
    General, you sat on both sides of the table, and you 
understand it. And when I get a chance on the second round, I 
want to ask you about some of the items that you brought up.
    But are we using you effectively in the contractual 
relationships we have? And you are each unique. We compete. You 
used 25 years. That is a lifetime. We like to think 2 years is 
a lifetime. We live in those cycles, so we do understand that. 
But to make investments, are the incentives that we set up 
working? What can we do better?
    So why don't we start with you, Mr. Flaugher.
    Mr. Flaugher. Well, I think the first part of that question 
was related to our involvement in the--you know, the 
development of the modernization plan. As I mentioned in my 
opening statement, I do believe that we are engaged quite a bit 
with the Army and the government as a whole in the development 
of the needs of Lake City. That starts at the very low level of 
us producing a call letter list that identifies the key areas 
of concern, of projects that need to happen at Lake City to 
support the modernization.
    It gets rolled up, then, into an ADEP plan, an area 
development execution plan, and then focuses up to the 
modernization plan. So I do feel that we have a lot of input 
into that plan.
    Mr. Norcross. And this is for each of you. When you put 
that plan together, obviously, you are looking through your 
lens. You are not necessarily, or are you, including that 
single point of failure into those calculations. Or does that 
take place once you submit it?
    Mr. Flaugher. I think that, really, both. I mean, it is 
part of the thinking in going into the plan, but it also is 
part of that execution and after the plan is put together.
    On our single points of failure at Lake City, those are 
identified very clearly in our plan. We currently work on each 
one of those to identify alternative materials, alternative 
supply, and we have inventory strategies to mitigate as well. 
Yes, sir.
    Mr. Gaines. Thank you for the question. Number one, I think 
that the plan very much took into account what we were looking 
for at Scranton. I mentioned in my testimony there is two 
elements, really, at Scranton. We are preparing the facility 
for a number of new projectiles that are going to support the 
Army's artillery modernization plan. That is one element. The 
other element is the infrastructure piece of an aged facility.
    I think the plant has elements of both that we have 
submitted, worked with our Army customer. I think there is some 
prioritization and some timing challenges or changes that we 
might want to see, but overall we were very pleased with what 
came out in that plan.
    In terms of whether or not we are being used effectively, I 
do believe that our partnership leverages that to the greatest 
extent possible. The Army is absolutely collaborating with us 
as we develop these modernization plans, and I am confident 
that our input is taken into consideration, and that is 
reflected in the plan that was submitted. And I think that just 
speaks to the partnership that we continue to have with the 
Army.
    Mr. Gathright. So looking at the plan, I think generally 
our inputs were well taken and reflected in the plan. So there 
was good coordination, as my colleagues have pointed out. On 
the effectiveness question, I think I would point to three 
things. For each of our sites, there are some unique commercial 
aspects of what we do.
    So I will borrow Mr. McGuiness' analogy of running a 100-
meter race but actually being asked to run 120 meters. And that 
makes it very challenging for us to take advantage of the 
commercial opportunities that these sites could access, which 
would improve affordability for the Army.
    Similarly, for the Army, is work loading these facilities. 
These are U.S. Government sites, so bringing as much work as 
possible to these sites, while it does benefit the contractor, 
is really about the best benefit to the U.S. Army and the 
taxpayer.
    Secondly, the reference to 25 years. If I look to my 
commercial chemical colleagues, when they proceed to build 
something like the large acids facility which we have just 
completed in Holston, they don't have to contemplate that 
investment and the thought that within a short period of time, 
much less than 25 years, they might turn the keys to that 
facility over to another operator. Makes the investment really 
challenging.
    Lastly, on the effectiveness, I think Radford and Holston 
represent a place where the Army and contractor have improved 
significantly through the modernization journey. This morning's 
comments highlighted both the challenges in the NC 
[nitrocellulose] facility at Radford and then spoke to what we 
have done at Holston in terms of a massive $1 billion 
modernization around RDX. And you see those projects being 
executed well and on time to deliver that capacity and improve 
both safety and environmental performance at Holston.
    General McGuiness. Sir, I appreciate the question. The 
first part of that question about the modernization plan, I 
would say that we did have a lot of input. There was a lot of 
discussion. And at the end of the day, there is a lot of 
priority shifting that has to be set forth.
    I agree with Mr. Gathright. And even back when I was in 
uniform, I always saw the ammunition enterprise as a big tree, 
but the trunk of that tree is Radford and Holston, because 
without propellant and explosive, there is nothing else. And so 
we have to get that right as a nation. And then, beyond that, 
the branches and the leaves, that is where the rest of us come 
in and be able to do that.
    So that is what you see in the modernization plan, an 
emphasis towards the Radford and Holston, and then later on 
would be, you know, facilities like Iowa that were going 
through the design phase now, and then the other facilities 
listed in the plan.
    In terms of clarifying from our perspective the 25 years 
that Mr. Gathright brought up, a lot of times it would be nice 
to have the 25 years set. Right now, we are currently under a 
25-year contract, but it goes under 5-year increments. And so 
if you are an investment--and the other companies are 
commercial companies, whereas we are a Day & Zimmermann 
company, a private company.
    So for us it is three owners. If we are asking our owners 
to invest in a facility that every 5 years their option could 
be up, it is very difficult for them. But they won't--but it is 
not that they won't do it. They have invested over $45 million 
of their own dollars since we have--American Ordnance was taken 
over in 2008. So they will do it, but there is a certainty that 
has to be there.
    And in terms of are we being used effectively, it is a 
complex--it is a very complex environment that we are in, but I 
would say that everyone is trying their best to make sure that 
everything is set and our voices are heard.
    Thank you.
    Mr. Norcross. Thank you.
    Vicky.
    Mrs. Hartzler. Thank you. As you know, last year the Army 
came over with a recommendation that severely cut down the 
number of small-caliber ammunition that is produced, and it 
would have resulted in loss of about 500 jobs there at Lake 
City, and these are individuals who have worked for years, have 
an expertise, many that their parents worked there, their 
grandparents.
    And I just appreciate and want to thank this subcommittee 
and the chairman who helped us lead the effort to make sure 
that money was replaced. And I wonder if you could talk, Mr. 
Flaugher, about the importance of just having a steady state of 
budgeting and what that does when the government comes in and 
cuts it, and what severe ramifications that could have provided 
for our national defense.
    And I would like for all of you to talk about that just a 
little bit, because that is something this subcommittee has to 
watch out for.
    Mr. Flaugher. Sure. Thank you for the question. So you are 
right, if that original budget would have been executed, we 
would have lost about 500 of our 1,700 jobs there at Lake City. 
And, to us, it is very critical for a lot of reasons. One, we 
are asked to maintain a level of readiness in our contract at 
Lake City, and it is very difficult to do that if production 
funding goes down too much.
    But probably the most important aspect of reduced budgets 
and layoffs that may occur when that happens is related to the 
skill of our workforce. We make ammunition, small-caliber 
ammunition. In the process of making that, we deal with high 
explosives. We have almost 90 people that we rely on to be well 
trained in our high explosives operations, in our priming 
operations.
    If we lose that workforce, and the requirements go up or 
there is a national emergency, we just can't hire people and 
train them fast enough. It could take up to a year to train 
people to get back to that level of skill that we require.
    So in the art of making ammunition, the skill of our 
workforce is critical.
    Mrs. Hartzler. Very good.
    Mr. Gaines, quickly.
    Mr. Gaines. Thank you for the question. I echo everything 
that he just said about the skilled workforce, but I will also 
highlight the importance of our supply chain. Many of us depend 
on a robust supply chain. Much of that is made up of small 
businesses, and we have these cyclical dips or, you know, ups 
and downs, specifically the downs.
    It doesn't incentivize them to continue in that role. And, 
therefore, your supply chain will get degraded as a result, and 
I think that is very critical when it comes to budget 
[inaudible].
    Mrs. Hartzler. Thank you.
    Mr. Gathright.
    Mr. Gathright. I will echo the same things, but add a 
couple here. With respect to readiness, you know, we are at the 
same time talking about minimum sustaining rates while also 
talking about surge capacity. So that is very difficult to try 
and--you talk to a workforce that is really artisan in what 
they do, and then on the modernization side, we are really 
talking about highly skilled engineers, construction 
professionals, and program managers.
    So being able to have a transparent and level loaded 
approach to modernization funding is critical to retaining 
those jobs in this kind of difficult setting of a GOCO versus 
operations outside of this kind of environment.
    Mrs. Hartzler. Thank you.
    Mr. McGuiness.
    General McGuiness. Ma'am, I really do appreciate your 
thoughts on the workforce, because that is the driver. When the 
Army built--when the Nation built these ammo plants back in the 
1940s, they didn't build them in Fairfax, Virginia. They are 
out there. And, in many respects, they are the main employer 
for some of the areas of which we are in.
    And as you mentioned, you know, this is a family lineage of 
people that have worked at our facilities, and I consider it a 
moral obligation that we provide good-paying jobs for the 
people in that area. And our operators are--as the gentlemen 
have spoke, they are truly craftsmen.
    I mean, to operate a 300-ton press to build a Stinger 
warhead, a Javelin warhead, takes experience. Or if you are 
working 800 pounds of molten TNT, producing TNT rounds, you 
want to have somebody with experience. And a state level of 
funding allows us to be able to maintain a talented workforce.
    Thank you.
    Mrs. Hartzler. Yes. Yes.
    Mr. Gaines, you oversee the Scranton facility. And in the 
Army's testimony, they said that there is going to be future 
investment or repair and replace failing infrastructure, as 
well as install a new manufacturing line to support production 
of the next generation artillery metal parts. Who pays for that 
new manufacturing line? I am still trying to figure out who 
pays for what.
    Mr. Gaines. The Army pays for that.
    Mrs. Hartzler. The Army pays for that.
    Mr. Gaines. Yes, ma'am.
    Mrs. Hartzler. Okay. Very good. And then I had a couple of 
questions here.
    General McGuiness, you had some really great points in your 
testimony. I think the idea of incorporating the mining 
industry and utilizing them to have on the site and lease 
areas, you know, that is something that makes sense, to kind of 
spread the load, bring in some additional investment. And then 
I think we need to look at this price fixing. That was a good 
point.
    But I wanted to ask you about the performance work 
statements where you said there are six specific areas where 
you have to comply that the commercial industry doesn't, in 
safety, fire, security, environmental, material management, 
maintenance.
    Do you have a list that breaks down the specific 
requirements that you have to do that is above commercial, like 
a comparison between commercial and then what you do in the 
same areas, that we could look at and maybe should review?
    General McGuiness. We can provide you that list certainly. 
You know, for example, we have a fire department with EMTs 
[emergency medical technicians] that have to be operational 24 
hours a day. A lot of commercial facilities, they would just 
say opt out and come to an agreement with the local fire 
department there.
    We have a 56-person work--security force, operates the 
gates, 24 hours a day. We have different--in terms of safety 
and environmental inspections, which need to be done and should 
be done, there is a balance of what is done on a commercial 
facility, but then there are things to meet Army policies, Army 
regulations, things of that nature.
    Mrs. Hartzler. Okay. Thank you very much.
    General McGuiness. But I can provide that.
    Mrs. Hartzler. I yield back.
    Mr. Norcross. And those are the sort of lists we are 
looking for that are important.
    Yes, Dr. DesJarlais.
    Dr. DesJarlais. Thank you, Mr. Chairman. We touched a 
little bit on the prospect of the Army entering into longer 
contracts, but from a contracting perspective, what could the 
government do to improve doing business with industry at GOCO 
AAPs? And you can all chime in.
    Mr. Gathright. Sir, I will start with kind of where I left 
off in my last comments around the commercial opportunities 
that are at each of these sites. For Holston and Radford, we 
provide both the propellant that goes into small-caliber rounds 
that are used by hunters and sportsmen, as well as explosives 
that are used in various oil and gas opportunities from 
Holston.
    So making these accessible. And when we think about trying 
to do commercial work on a GOCO site, where there are these 
additional regulations that we are complying with, making that 
accessible for the contractor, such that we can bid 
economically for those opportunities, ultimately reduces the 
cost of operation to the Army for these sites.
    I think it ties back to the comments from Ms. Hartzler 
around the PWS [performance work statements] work statements. 
You know, Radford has just gone through a renegotiation of its 
contract, and this was an area of focus. I will say, for 
contractor and Army, there is a lot of frustration about how 
much these work statements cost the government. But yet we are 
bound by these requirements in ways that we cannot get to more 
efficient solutions that are certainly available if we operated 
in a more commercial fashion. So I think getting that balance 
right helps the Army get the most out of the GOCO part of this.
    Mr. Gaines. I would like to add that I think, in terms of 
improving, you know, contracting relationship, and execution 
more importantly, I think is the speed in which we go through 
these contracting actions. I think there is a lot of great 
intent by all parties, and it often seems to get bogged down. 
And it is no fault of Contracting Command or any specific 
agency. It is as an enterprise we all need to do a little 
better in terms of executing those contract requirements as--
especially when it comes to modernization. I think that 
philosophy would really improve things.
    Mr. Flaugher. I really agree with my colleagues on really 
studying some of the best commercial practices that are out 
there and maybe applying those to some of the GOCOs. It 
definitely adds a lot of cost, and maybe studying those best 
commercial practices in each one of our situations would be 
very helpful.
    General McGuiness. I would just like to add on that, again, 
the recognition of the performance work statements, 
understanding where that is in terms of the requirements that 
are--that we are then bringing into our pricing, and then 
having, say, a predictable level of contracts. As Mr. Gathright 
said, not all the GOCOs are treated equal, you might say, and 
so for us operating Iowa, moving forward, there is no set, say, 
supply contract where the government says, ``We will be issuing 
you contracts in these type of areas,'' which is needed in the 
explosive and propellant areas. But in Iowa, it is not, so for 
us we will be--what we would be asking for is a recognition of 
these. That is all.
    Dr. DesJarlais. One other question. What does the industry 
perceive as the most significant threat to the ammunition 
enterprise supply chain?
    Mr. Flaugher. I think it is the same that we discussed 
earlier. It is the significant--having significant secure 
funding that has continuity from year to year that encourages 
our supply chain to make investments. Right now, we struggle 
with certain supply chains to make investments because of the 
uncertainty of a 1-year or 2-year contract and not knowing what 
it is. And that is a challenge also from single points of 
failure in the supply chain as well.
    Mr. Gaines. I would like to add, back to the labor point 
that Mr. Flaugher brought up earlier, attracting new talent, 
new young talent into our industry is challenging right now. 
And that continued funding and that continued pursuit of 
modernization, not just in facilities but products, I think is 
critically important to attracting the next generation of 
talent, which we are always working to do.
    Mr. Gathright. I would focus in on the workforce. As much 
as we talk about single points of failure or overseas sourcing, 
it is that artisan workforce. And, honestly, really looking at 
the Kingsport area, there are opportunities in the market if we 
think post-COVID economy. And folks are asking themselves, is 
this the right job for me, as Holston goes through a 
competition and as they look at opportunities outside of the 
base.
    So I think protecting that workforce and growing that next 
generation of the workforce is essential, first and foremost, 
to what we do.
    General McGuiness. Sir, I appreciate the question. In many 
respects, I would say the most significant threat is the threat 
we haven't been seeing or thinking about. You know, it seems 
like we deal in threats every single day, but I think--and I 
would agree with the panel--the workforce is paramount, to be 
able to keep them, to be able to attract new talent from the 
colleges and universities nearby. Supply chain is something 
that we worry about constantly.
    There is a bunch of different alligators out there.
    Dr. DesJarlais. Thank you all for your expertise and being 
here.
    I yield.
    Mr. Norcross. Mr. Jackson.
    Dr. Jackson. This will be pretty quick. My colleague from 
Tennessee just asked most of what I was going to ask you about. 
I was going to ask you about single point of failure in the 
supply chain, and you kind of addressed that already.
    There is not a single point of manufacturing. You know, we 
don't get like a certain, you know, element of the ammunition 
from one specific supplier or anything like that. Is there 
anything like that that we should be worried about? I guess 
would just expand on what he just asked a little bit.
    And the other is, I was going to comment that, you know, we 
have defense industry in my district. We have Pantex, and we 
have Bell Helicopter there. And when I go talk to them, the 
biggest issue they have, which I think is a big national 
security issue for us, is the workforce. I mean, they cannot 
get people to do the jobs, to come to work. I mean, it is a 
little bit harder because it is Amarillo, Texas, and, you know, 
it is kind of in the middle of nowhere.
    But are you guys experiencing the same kind of issues? It 
sounds like you are. And, you know, I think you gave a little 
bit of information, but I was going to ask you just like, what 
would be your advice to other companies to overcome this? 
Because if you can't find people to do the job, the job doesn't 
get done.
    So thank you.
    Mr. Gaines. I will go first this time. Thank you for your 
question, sir. Number one, in terms of advice that I would give 
to some of our industry peers is, you have to absolutely 
demonstrate to your prospective workforce your core values, 
your strategy. You have got to really put an emphasis on, you 
know, the culture within our organization.
    And I don't think that is something that in the past we 
really had to emphasize, and now we are really out there in 
terms of marketing our company for a recruiting purpose, not 
necessarily for a customer purpose. And so I think that is 
really critical.
    The earlier question you asked about single points of 
failure, when it comes to Scranton Army Ammunition Plant, there 
are other competitors with like capability. So in terms of a 
single point of failure for Scranton, that really isn't the 
case.
    Dr. Jackson. Okay.
    Mr. Gathright. I will chime in there. I think Pantex is a 
critical partner for Holston for the products that we provide 
on the DOE [Department of Energy] side. So we talk a lot with 
our colleagues at Pantex up in Amarillo.
    I think on the overcoming the challenge, the thing that I 
feel like our employees do well is really aspire to the 
mission, and that really reflects on what we have done through 
the COVID-19 pandemic. These people put themselves at personal 
risk to deliver munitions that were absolutely essential. And I 
think that is the part that we have got to continue to bring 
home to the workforce to have folks want to come to work on 
these kind of sites.
    I think one of the highlights of the work on the RDX 
expansion at Holston is really trying to address some of those 
single points of failure. So I think the Army is getting that 
right as we move forward.
    And, lastly, I would just focus on the foreign sourcing, 
because this is a key focus for us are some of the raw 
chemicals and upstream products that we use. And I think these 
are absolutely accomplishable things in the United States, but 
they are not without cost. And I think that is the part of this 
that we have got to hit face on to understand how to move 
beyond some of these foreign sourcing challenges.
    Dr. Jackson. Thank you. And I will say I think that, you 
know, one of the things that I hear that works sometimes is to 
focus on recruiting on retired military folks and folks that 
are transitioning out of the military, because I think that, 
you know, they have somewhat of a natural fit for some of this 
kind of stuff.
    And so, thankfully, there is a lot of folks that get out of 
the military and want to continue to serve, you know, in a 
national security, you know, position, or, you know, a job that 
is pertinent to our national security.
    So thank you for your time. I appreciate it.
    Mr. Chairman, I yield back.
    Mr. Norcross. Thank you. There is a few extra questions, so 
we are going to go to a next round if you have time, and really 
appreciate it.
    A couple of items. Domestic supply chain. Yes, we do things 
that have environmental regulations, labor standards are 
considerably different, safety. It has a cost, but it also has 
a cost if you don't have access to it. So that is the balance, 
and I think we are starting to realize that the pandemic and 
the supply chain certainly brought that out on us.
    New young talent. There is not a committee that has a 
hearing that this doesn't come up, particularly you are unique 
in the sense that, gee, come work in a place that--really 
dangerous stuff that can kill you in a heartbeat. Not every 
position you need to be a Ph.D. from Harvard. I understand 
that; I went to the other 4-year school. It is called an 
apprenticeship.
    Society has to make some changes that we value both of 
those, and that you can have a good job that has benefits and 
raise your family. And, each of you, that is what is critical 
is you take care of your employees. And they need to understand 
it.
    The pandemic has thrown a curve ball. Everybody is 
evaluating their spot in the universe. And it is going to 
continue for a little bit, and it--our family is going through 
the same thing.
    But when we start talking about investment, and each of 
you, the major investments--and that is a relative term--you 
know, the government is going to pay for the facility for the 
most part. So we talk about 25 years, yes, you are not going to 
invest $1 billion in a plant for a 2-year length of time.
    There are some things that contractually they can make 
decisions on, and there is other things we have to change. The 
NDAA is revving up again. Please, Liz [Elizabeth Griffin] is 
our lead on this. Those ideas that you mentioned, please 
expound, get it to her. We want to have a conversation where, 
if this is a good idea, I would love to try these things in a 
pilot.
    So we really do--that is why you are here today. And 
certainly the material, cost-fixed pricing, depending on how 
long, right, it is all relative. So we want to talk about that, 
and certainly a level playing field is something that we deal 
with every day.
    But I want to give Vicky a chance to go to a second set, 
and then we will wrap this up.
    Mrs. Hartzler. Thank you. So as the managers of these GOCO 
facilities, do you agree with what we just heard in the first 
panel where the Army is proposing half a billion dollars a year 
funding for a 15-year modernization plan? Do you think that 
adequately accounts for the rises in cost for both materials 
and labor due to inflation and material shortages which General 
Daly highlighted?
    What is your thoughts on that? Why don't we go backwards 
here. So, McGuiness.
    General McGuiness. Well, ma'am, I appreciate the question, 
and I appreciate leading this off. It is a balance of 
priorities. I think the Army showed a very significant 
commitment to these facilities. I was--my initial remarks back 
to the Army was that I was very impressed that the Army put 
dollars--put projects and dollars in years.
    That is something that we haven't seen before, and I think 
it is very important to at least put a mark on the ground. This 
is what it is. Things can change, but at least it was 
significant to be able--for the Army to be able to do that. So 
I do appreciate that.
    Mrs. Hartzler. Good. Mr. Gathright.
    Mr. Gathright. Yeah. I would start with the fact that it is 
a significant increase in the investment that the Army has 
made. I think two things strike me. Certainly, in the near 
term, volatility in the marketplace is critical, both in raw 
materials and labor, so that does have a critical impact on 
some of these modernization construction projects.
    I think the other aspect of this--and I referenced this in 
my opening comments--of, you know, at least in the case of 
Radford, I can speak to there are shovel-ready projects today 
that would benefit the workforce that are in this plan, but 
could be funded sooner if additional funding were allocated, 
and these would be improvements to operational readiness as 
well as safety and environmental. So these are projects that 
are there today--where designs are complete.
    Mrs. Hartzler. Can you get us a list of those?
    Mr. Gathright. Yes, I can.
    Mrs. Hartzler. Thanks. Mr. Gaines.
    Mr. Gaines. Very good question. Thank you very much for 
asking it. I think we are in very good shape, specifically 
compared to a couple of years ago when none of this really 
existed. So for that we are very thankful.
    As I mentioned earlier, all of the projects that we have 
been collaborating on with the Army are included in the plan. 
There are a couple here and there that, you know, may be 
underfunded in terms of estimates that--you know, in our 
opinion. But I think, by and large, those are small differences 
that can be easily overcome.
    But I agree with Mr. Gathright that there are some projects 
that I think that we can pull forward, that we can execute 
quicker, if the funding is there. And so we would be happy to 
provide that list of projects if you would like.
    Mrs. Hartzler. Yes. Yes, that would be great. Thanks.
    Mr. Gathright. Okay.
    Mr. Flaugher. You know, I agree with my colleagues and 
don't have a lot to add on top of that. But I do believe that 
the funding level is appreciated, especially for Lake City and 
what we see there, and we can actually move to the left if 
there was increased funding. But there is priorities that have 
to be established, and I think they were done in the 
modernization plan.
    Mrs. Hartzler. The last question I had is probably for 
General McGuiness, but all of you, but I have heard that your 
production request has not increased due to what is going on in 
Ukraine. So does that need to be increased? I mean, or were you 
satisfied with--it seemed like the Army was saying that they 
are going through this reevaluation stage, and then they will 
come to you with the next contract. So how comfortable do you 
feel with, are we meeting the needs? Are they coming through?
    General McGuiness. Ma'am, that is a question I would defer 
to Mr. Bush, and Mr. Bush I think responded to your question on 
that, saying that there's a response that's going to be 
imminent----
    Mrs. Hartzler. Okay.
    General McGuiness [continuing]. Going to be sent over to 
you.
    Mrs. Hartzler. Yeah. Mr. Gathright.
    Mr. Gathright. Thank you. Given that each of these products 
start with manufacturing in Radford and Holston, I can share 
with you that we are in discussions with the Army on some of 
these replacement supplies. So that is moving forward. I think 
the positive from a Radford and Holston perspective is these 
products support other weapons as well. So we are able to move 
forward with that production timely, as soon as we complete 
those discussions with the Army.
    Mrs. Hartzler. Will you be able to meet increased demand if 
they come to you and say, ``We need a whole bunch more''?
    General McGuiness. Yes, ma'am.
    Mrs. Hartzler. Great.
    Mr. Gaines. Initial activity has really focused on some 
reprioritization of production requirements. I think the 
majority of the activities surrounding Ukraine and providing 
stockpiles of ammunition to them will come in that secondary 
tranche of replacement contracts, which we won't see for, you 
know, some time.
    Mr. Flaugher. I don't have visibility right now on whether 
or not it is on the increase. But to answer the second part of 
your question, if it does, we are ready, too.
    Mrs. Hartzler. Very good. Well, I appreciate--we all 
appreciate what you do and how important you are to our 
national defense, kind of the unsung heroes sometimes I think 
people just take for granted in this country. Of course there 
is bombs, there is ammunition, but it is--a lot more goes into 
that, and I thank you for your diligence every day to make sure 
that we have what we need.
    So thank you, and please pass on our appreciation to the 
workforce.
    I yield back.
    Mr. Norcross. And seeing no other [inaudible], again, on 
behalf of the committee, thank you for sharing your thoughts. 
It is good to have you here. Look forward to you coming back 
and telling us how well the plan is being implemented.
    We are adjourned.
    [Whereupon, at 12:05 p.m., the subcommittee was adjourned.]
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                            A P P E N D I X

                             March 31, 2022
     
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              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                             March 31, 2022

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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 31, 2022

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                   QUESTIONS SUBMITTED BY MR. WITTMAN

    Mr. Wittman. I would like to discuss the management of the design 
and construction of ammunition infrastructure. I am told that a 
nitrocellulose facility experienced significant cost growth and delays. 
It seems to me that the management of the program is best accomplished 
by design and construction firms not firms that were hired based on the 
capability to manufacture ammunition. I understand that the Corps of 
Engineers Norfolk District started the solicitation for design firms, 
but the final request for proposal has been on hold for some time. Does 
the Army have an approved acquisition strategy for the modernization of 
the ammunition infrastructure? If there is, how does the Army execute 
the program--with the on-site contractors or with the design and 
construction industries?
    Secretary Bush. The Army Ammunition Plant (APP) Modernization Plan, 
published on March, 31, 2022, describes the Army's strategy towards 
modernization of the Government Owned, Contractor Operated (GOCO) AAP's 
infrastructure and production capabilities. The strategy considers 
whether the project is basic infrastructure or production related, and 
whether it could potentially interrupt on-going production. Maintaining 
production continuity while modernizing the AAPs is a key challenge and 
a significant factor in determining the specific project acquisition 
strategy. For infrastructure projects that do not impact ongoing 
production, the AAP operating contractor, a 3rd party vendor, or the 
Army Corps of Engineers are considered for project execution. For 
construction of new production capabilities or modernization of legacy 
production facilities, the AAP operating contractor is principally 
considered for project execution given their manufacturing knowledge 
and their vested interest in safety, efficiency, and manufacturing 
readiness. In all modernization project execution scenarios, the same 
pool of Architectural and Engineering (A&E) and construction firms are 
utilized, whether executed by the Army Corps of Engineers, a 3rd party 
vendor, or the AAP operating contractor. Overall execution is managed 
by the Army's Joint Program Executive Office, Armaments and Ammunition.
    Mr. Wittman. Digital twins involve the creation of a digital model 
of an operation, process or facility based on key metrics such as 
throughput, manhours, turn-around-time, etc. Besides its value in 
design, fully implemented, digital twinning is valuable in the 
efficient and safe operation of a facility or production process. This 
tool is widely used in manufacturing.
    I remain concerned that the Army may spend billions of dollars and 
end up with new facilities that use the same processes as are used now. 
Can you tell us how the Army is using industrial engineering software 
to optimize the safety and efficiency of the new production lines? Is 
the Army using a digital twin for the new ammunition plants? If not, 
why not?
    General Daly. The Army has taken a holistic look at how to best 
modernize the entire Organic Industrial Base (OIB) and has acknowledged 
the vital need for digital twin capability. The Army's 15-year Organic 
Industrial Base Modernization Implementation Plan (OIB MIP) includes 
utilization of Digital Twins for OIB and Ammunition manufacturing 
facilities and processes in order to optimize production, reduce risk 
to the workforce, and guide future technology updates. The Army's goal 
for digital twins is to enable efficient insertion of modern 
manufacturing technology and development of digitized processes in a 
manner that supports current and future systems. This would include 
initiatives such as developing and/or acquiring the industrial 
engineering software necessary to optimize the safety and efficiency of 
the new production lines in our OIB MIP. The OIB MIP is set to begin in 
2024 and our goal is to have the digital twins in time to inform MIP 
execution. AMC has prioritized its top 5 facilities to include two 
ammunition plants (Holston Army Ammunition Plant, Radford Army 
Ammunition Plant) as well as two depots (Anniston Army Depot, and 
Corpus Christi Army Depot) and one arsenal (Watervleit Arsenal). The 
top five facilities will serve as the test bed and proof of concept for 
digital twins. AMC's goal is to create a digital twin at each of its 23 
OIB sites to inform the modernization of each facility throughout the 
MIP execution.

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