[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]





 
                        STRENGTHENING THE FLEET:


                      CHALLENGES AND SOLUTIONS IN


                    NAVAL SURFACE SHIP CONSTRUCTION

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                    THE BORDER, AND FOREIGN AFFAIRS

                                 of the

                         COMMITTEE ON OVERSIGHT
                           AND ACCOUNTABILITY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 11, 2023

                               __________

                           Serial No. 118-30

                               __________

  Printed for the use of the Committee on Oversight and Accountability
  
  
  
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 

                       Available on: govinfo.gov
                         oversight.house.gov or
                             docs.house.gov
                             
                             
                             
   
                       ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
 52-164          WASHINGTON : 2023
 
                            
                             
                             
                             
                             
                             
                             
               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                    JAMES COMER, Kentucky, Chairman

Jim Jordan, Ohio                     Jamie Raskin, Maryland, Ranking 
Mike Turner, Ohio                        Minority Member
Paul Gosar, Arizona                  Eleanor Holmes Norton, District of 
Virginia Foxx, North Carolina            Columbia
Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama                 Gerald E. Connolly, Virginia
Clay Higgins, Louisiana              Raja Krishnamoorthi, Illinois
Pete Sessions, Texas                 Ro Khanna, California
Andy Biggs, Arizona                  Kweisi Mfume, Maryland
Nancy Mace, South Carolina           Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas                Katie Porter, California
Pat Fallon, Texas                    Cori Bush, Missouri
Byron Donalds, Florida               Jimmy Gomez, California
Kelly Armstrong, North Dakota        Shontel Brown, Ohio
Scott Perry, Pennsylvania            Melanie Stansbury, New Mexico
William Timmons, South Carolina      Robert Garcia, California
Tim Burchett, Tennessee              Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia      Becca Balint, Vermont
Lisa McClain, Michigan               Summer Lee, Pennsylvania
Lauren Boebert, Colorado             Greg Casar, Texas
Russell Fry, South Carolina          Jasmine Crockett, Texas
Anna Paulina Luna, Florida           Dan Goldman, New York
Chuck Edwards, North Carolina        Jared Moskowitz, Florida
Nick Langworthy, New York
Eric Burlison, Missouri

                       Mark Marin, Staff Director
       Jessica Donlon, Deputy Staff Director and General Counsel
             Kaity Wolfe, Senior Professional Staff Member
         Grayson Westmoreland, Senior Professional Staff Member
      Mallory Cogar, Deputy Director of Operations and Chief Clerk

                      Contact Number: 202-225-5074

                  Julie Tagen, Minority Staff Director

                      Contact Number: 202-225-5051
                                 ------                                

   Subcommittee on National Security, the Border, and Foreign Affairs

                  Glenn Grothman, Wisconsin, Chairman
Paul Gosar, Arizona                  Robert Garcia, California, Ranking 
Virginia Foxx, North Carolina            Minority Member
Clay Higgins, Louisiana              Stephen F. Lynch, Massachusetts
Pete Sessions, Texas                 Dan Goldman, New York
Andy Biggs, Arizona                  Jared Moskowitz, Florida
Nancy Mace, South Carolina           Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas                Katie Porter, California
Pat Fallon, Texas                    Cori Bush, Missouri
Kelly Armstrong, North Dakota        Maxwell Frost, Florida
Scott Perry, Pennsylvania
                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on May 11, 2023.....................................     1

                               Witnesses

                              ----------                              

Rear Admiral Thomas J. Anderson, Program Executive Officer for 
  Ships, United States Navy
Oral Statement...................................................     5
Rear Admiral Casey Moton, Program Executive Officer for Unmanned 
  and Small Combatants, United States Navy
Oral Statement...................................................     6

Written opening statements and statements for the witnesses are 
  available on the U.S. House of Representatives Document 
  Repository at: docs.house.gov.

                           Index of Documents

                              ----------                              

  * Letters from DHS and US Navy; submitted by Rep. Higgins.

  * Letter to DHS and U.S. Navy; submitted by Reps. Higgins and 
  Dunn.

  * Article, Baird Maritime, ``Jianglong Shipbuilding wins China 
  Coast Guard vessel tender''; submitted by Rep. Dunn.

  * Press Release, U.S. Department of Defense, ``DOD Announces 
  $187 Million in Defense Production Act Title III COVID-19 
  Actions''; submitted by Rep. Dunn.

  * Press Release, Department of Justice, ``Three Men Indicted 
  for Multimillion-Dollar Accounting Fraud Scheme at U.S. Navy 
  Shipbuilder''; submitted by Rep. Dunn.

  * Questions for the Record: to Adm. Anderson; submitted by Rep. 
  Grothman.

  * Questions for the Record: to Adm. Anderson; submitted by Rep. 
  Higgins.

  * Questions for the Record: to Adm. Anderson; submitted by Rep. 
  Fallon.

  * Questions for the Record: to Adm. Anderson; submitted by Rep. 
  Garcia.

  * Questions for the Record: to Adm. Moton; submitted by Rep. 
  Grothman.

  * Questions for the Record: to Adm. Moton; submitted by Rep. 
  Higgins.

  * Questions for the Record: to Adm. Moton; submitted by Rep. 
  Garcia.

Documents are available at: docs.house.gov.


                        STRENGTHENING THE FLEET:



                      CHALLENGES AND SOLUTIONS IN



                    NAVAL SURFACE SHIP CONSTRUCTION

                              ----------                              


                         Thursday, May 11, 2023

                        House of Representatives

               Committee on Oversight and Accountability

   Subcommittee on National Security, the Border, and Foreign Affairs

                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:03 a.m., in 
room 2154, Rayburn House Office Building, Hon. Glenn Grothman 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Grothman, Gosar, Foxx, Higgins, 
Sessions, Biggs, Perry, Garcia, Lynch, Goldman, and Frost.
    Also present: Representative Dunn.
    Mr. Grothman. The Subcommittee on National Security, the 
Border, and Foreign Affairs will come to order. Welcome, 
everyone.
    Without objection, Representative Neal Dunn of Florida is 
waived on to the Subcommittee for the purpose of questioning 
witnesses at today's hearing.
    Without objection, the Chair may declare a recess at any 
time.
    I am going to recognize myself for the purpose of making an 
opening statement.
    Good morning, and welcome to the Subcommittee on National 
Security, the Border, and Foreign Affairs' hearing on 
``Strengthening the Fleet: Challenges and Solutions to the 
Naval Surface Ship Construction.'' Today we are examining the 
U.S. Navy's shipbuilding programs, America's shipyards, naval 
competition with China and Russia, and the future architecture 
of the fleet. I represent the 6th District of Wisconsin, and 
Wisconsinites have a long, proud history of providing high-
quality vessels to the U.S. Navy and the world, as do other 
districts represented on this Subcommittee. By the way, I will 
add something here I do not know if the staff knows. We used to 
make submarines in Manitowoc, Wisconsin during World War II.
    I want to thank both of our witnesses here today to testify 
on behalf of the Navy. As of April 2023, the Navy included 296 
battle force ships. Since 2003, the number of ships in the 
fleet has varied been between 270 and 300. The Fiscal Year 2018 
National Defense Authorization Act established requirements for 
a 355-ship Navy. In 2020, the then-Acting Secretary of the Navy 
testified to the House Armed Services Committee that achieving 
the 355-ship Navy would cost an additional $120 to $130 billion 
over the next 10 years, yet naval leadership has signaled that 
355 ships are not enough. In February 2022, the chief of naval 
operations, Admiral Michael Gilday, stated that he believed the 
Navy needed a fleet of over 500 ships to meet the commitments 
outlined in President Biden's National Defense Strategy.
    So, let us understand this. The 2018 NDAA required a 355-
ship Navy. We still do not even have 300 ships. It is going to 
cost at least another $120 to $130 billion to get to 355, but 
the Biden Administration wants over 500 ships. It does not look 
like the Biden Administration is balancing costs, efficiency, 
or even practical goals when creating the National Defense 
Strategy, and the Administration is creating these unrealistic 
goals at a time when military recruitment and retention is at 
one of its lowest points.
    Additionally, CNO Gilday stated in August 2022 that ``The 
biggest barrier to adding more ships to the Navy is the 
industrial base capacity.'' There have been numerous reports on 
issues related to ship design flaws, fraudulent contracting 
practices, and delays due to supply chain issues made worse by 
the pandemic. Poor design, unrealistic timeliness, and labor 
recruitment issues, these are the barriers to a more modern and 
efficient Navy that we hope to explore today. Cost overruns and 
delays have plagued several programs of high importance. For 
example, the Zumwalt-class destroyers have cost the U.S. 
taxpayer around $22.4 billion in research and development 
alone.
    The Navy has also struggled to produce a coherent 30-year 
shipbuilding strategy. This strategy is necessary to enable 
Congress to effectively fund future programs and create 
stability within the defense industrial base. While the Navy 
continues to encounter delays, between 2015 and 2020, China 
surpassed the U.S. Navy in size and is expected to grow to 400 
operational ships by 2025. The United States Navy is and must 
continue to remain the greatest the world has ever seen. Its 
firepower and professionalism are unmatched. By focusing on 
modernization and future technologies, the U.S. can remain 
unmatched. I hope to hear from our witnesses today about ways 
that Congress can cut the bureaucratic red tape and unleash 
American manufacturing and ingenuity to meet the threats of the 
future. Thank you, again, for each of our witnesses for 
participating, and I look forward to your testimony.
    I would now like to recognize Ranking Member Garcia for the 
purpose of making his opening statement.
    Mr. Garcia. Thank you very much, Mr. Chairman, and I want 
to thank our witnesses and thank you so much for your service 
to our country.
    We all know that maritime security is critical for us as a 
Nation. The security of our supply chains and our allies' 
across the Pacific is incredibly important, and certainly the 
Biden-Harris Administration is focused on those goals. I want 
to also commend the Biden Administration for reaching the 
historic August agreement with Australia and the U.K. that will 
provide Australia with submarine technology, which will bolster 
security in the Indo-Pacific region.
    In my district back in Long Beach, California, it is 
actually a historic Navy town. It was home to the Navy's first 
two aircraft carriers, the USS Lexington and Saratoga, and most 
of the Long Beach economy just a generation ago was really 
driven and was really developed through the Navy infrastructure 
and through all the amazing jobs that were across the region. 
Shipbuilding, of course, was once a huge industry here in the 
United States, but we also know it has long been in decline. 
Forty thousand shipbuilding jobs were lost just under President 
Reagan, and the Long Beach shipyards actually closed in the 
1990's, which caused a major economic blow to our local economy 
but also to the economy of places across the West and the 
country.
    Now, I fully understand the importance of shipbuilding to 
communities all around the country. Long Beach has had to work 
hard to rebuild and reimagine itself after, of course, losing 
the Navy as its main source of economic driver in jobs, but 
that has transitioned to a port economy. The Port of Long Beach 
now handles trade valid over $200 billion annually and supports 
over two million jobs across United States in our supply chain. 
Now, this would not be possible without the freedom of 
navigation, guaranteed, of course, by the United States Navy.
    Now, you can, of course, slice and dice numbers all you 
want compared to China or any other country, but I think the 
evidence is clear--we do have a strong Navy in the United 
States, and whether you look at the size of vessels, the 
number, experience, quality of our service members, the number 
and quality of our aircraft carriers and advanced submarines, 
and even the number of missiles, the Navy is the most powerful 
in the world. No one in the world can do what you gentlemen do 
and what our Navy does.
    Now, we are facing new challenges in the 21st century, and 
the fast-moving technological environment creates real 
uncertainty for us. It is critical that we work across the 
aisle, and I look forward to doing so in this Subcommittee with 
the Administration and all of you to ensure we have the 
absolute best in innovation, manpower, and industrial base to 
keep us at pace.
    Now, the Biden-Harris Administration is working to craft a 
plan to meet the evolving military force needs and to adapt to 
emerging threats. Congress should be a constructive partner in 
planning and to give domestic producers more certainty in our 
shipbuilding plans, but it is also critical to note that we 
cannot just, of course, throw money at the problem. There are a 
lot of ways of solving this challenge, and we cannot 
reflexively count the number of vessels in our fleet or the 
number of dollars we devote to defense as measures alone. We 
should make sure that our investments deliver the security and 
the capabilities that we need. We need to also make choices 
about our priorities. We must support policies that rebuild our 
industrial base and our work force.
    The real source of our power, of course, is also our 
economic strength, our industrial base, our moral leadership, 
and our allies and partners. We have learned hard lessons in 
the last few years, particularly in the War on Ukraine and the 
COVID air supply chain disruptions, that have emphasized so 
much in lessons learned for us here in our country. We can and 
should secure those supply chains while creating and protecting 
good union jobs.
    Investments like the CHIPS and Science Act, the Bipartisan 
Infrastructure Law, the Inflation Reduction Act all have 
contributed directly to security and, of course, in investing 
in American jobs. We have rebuilt our industrial base, we have 
promoted a secure, clean energy future for our supply chain, 
and ensured economic prosperity for so many more Americans. And 
as the saying goes, which we all know and I think is 
appropriate for this hearing, ``A rising tide raises all 
boats.''
    Now, I am glad we are having this hearing today, and I also 
want to briefly discuss another issue that is really important 
for us, for the American shipbuilding industry, and our 
security, and that is our merchant marine fleet. In a crisis, 
American civilian vessels will be critical to supplying our 
allies and partners and our military. I understand that the 
Marine Corps is deepening its partnership with the merchant 
marine, which is really encouraging for us. Now, Congress can 
and should do more to support merchant marine shipbuilding, 
along with our ports and our supply chains, and, Mr. Chairman, 
I hope to work with you on this critical issue.
    Finally, I want to stress an important point. No conflict 
is ever inevitable, and I want to warn this Committee again 
against reckless or overheated rhetoric. Our goal, standing 
shoulder to shoulder with our allies, is to have the best 
possible Navy and cooperation in the world. With that, again, 
thank you both for being here and for your service, and, Mr. 
Chairman, I yield back.
    Mr. Grothman. I am pleased to introduce our witnesses 
today. Our first witness is Rear Admiral Thomas Anderson. He is 
the Program Executive Officer for Ships for the United States 
Navy, a position he has held since 2020. As PEO for ships, 
Anderson has been responsible for the acquisition of surface 
combatants for the Navy. Prior to his current assignment, 
Anderson was the Program Director for the Littoral Combat Ship 
Program and was the commander of the Naval Surface Warfare 
Center. Our second witness is Rear Admiral Casey Moton. He is 
the Program Executive Officer for Unmanned and Small Combatants 
for the United States Navy, a position he has held since 2019. 
As PEO for unmanned and small combatants, Moton is responsible 
for the acquisition of unmanned maritime systems and small 
surface combatants. I look forward to hearing from both of you 
today on this these very important issues facing U.S. naval 
shipbuilding.
    Pursuant to Committee Rule 9(g), the witnesses will please 
stand and raise their right hands.
    Do you solemnly swear or affirm that the testimony that you 
are about to give is the truth, the whole truth, and nothing 
but the truth, so help you God?
    [A chorus of ayes.]
    Mr. Grothman. Let the record show the witnesses all 
answered in the affirmative. Thank you. We appreciate all of 
you being here today and look forward to your testimony.
    Let me remind the witnesses that we have read your written 
statements, and they will appear in full in the hearing record. 
Please do what you can to limit your oral statements to as 
close to five minutes as possible. As a reminder, please press 
the button on the microphone in front of you so it is on, and 
the Members can hear you. When you begin to speak, the light in 
front of you will turn green. After four minutes, the light 
will become yellow, and when the red light comes on, your five 
minutes are up, though I am not a stickler on that.
    I recognize the Admiral Anderson to please begin his 
opening statements.

              STATEMENT OF REAR ADMIRAL THOMAS J. ANDERSON

               PROGRAM EXECUTIVE OFFICER (PEO) FOR SHIPS

                           UNITED STATES NAVY

    Admiral Anderson. Chairman Grothman, Ranking Member Garcia, 
and distinguished Members of the Subcommittee, thank you for 
the opportunity to appear before you today to address the state 
of Naval surface ship construction. Make no mistake: the U.S. 
Navy fields the most capable warships on the planet. Platforms 
like the Virginia-class submarine; forward-class aircraft 
carrier; Arleigh Burke-class destroyer; and amphibious assault 
ship, America class, are unmatched in their contribution to the 
high-end fight.
    The U.S. shipyards which produce and maintain these 
exceptional ships can be broken down into two categories: 
repair shipyards and new construction shipyards. Currently, 
there are seven, what we call, Tier 1 new construction 
shipyards in the United States. These large, heavily 
facilitized shipyards build the vast majority of the U.S. 
Navy's capital ships. Five of these shipyards--Bath Iron Works 
in Maine, Marinette Marine in Wisconsin, Austal USA in Alabama, 
Huntington Ingalls in Mississippi, and NASSCO in California--
build conventionally powered ships. The ships built in these 
shipyards are the one that fall underneath Admiral Moton and my 
portfolios.
    There are two other Tier 1 shipyards--Electric Boat in 
Connecticut and Newport News in Virginia--and they build 
nuclear-powered aircraft carriers and submarines. The highest 
priority and greatest challenge resides in our nuclear 
shipyards and their associated supply chains as they look to 
ramp up submarine production to two Virginia-class submarines 
and one Columbia-class submarine annually.
    On the topic of China, I understand the Navy has offered to 
provide a future classified briefing on China's shipbuilding 
capacity, but for our discussion today, it is important to 
understand the major difference between Chinese and U.S. 
shipbuilding industrial bases, the difference being the China 
benefits from a massive commercial shipbuilding workload. It 
leverages the associated workforce, infrastructure, and supply 
chain in the construction of its naval vessels.
    A first Marine International 2022 benchmarking study 
reports that China accounts for 47 percent of the world's 
commercial vessel shipbuilding volume. Behind them are our 
partners in South Korea and Japan at 25 and 16 percent, 
respectively. And the U.S. is much further down the list. Less 
than one percent resides in the U.S. commercial shipbuilding 
industry. This means that unlike countries which heavily 
leverage commercial investments, the U.S. Government largely 
goes it alone, bearing all the costs of the ships and the 
associated infrastructure.
    For perspective, today in our seven Tier 1 shipyards, there 
is no commercial shipbuilding work. Clearly China's commercial 
shipbuilding industry provides them a massive advantage when it 
comes to shipbuilding capacity. Despite this gap in commercial 
shipbuilding scale, there are over 42,000 trades' people, 
66,000 employees in the Navy Tier 1 shipyards, and over 5,000 
primary suppliers spending themselves in the worthy cause of 
building world-class ships for the U.S. Navy every day. Within 
the next few months, we will deliver, amongst other things, the 
Navy's first Flight-III destroyer. DDG-125, the 75th ship of 
the Arleigh Burke-class, with its upgraded combat system, will 
provide the ability for one ship to perform both anti-air 
warfare and ballistic missile defense missions with improved 
performance via the world's newest and most capable surface 
radar.
    To keep deliveries of capital ships like these on time 
going forward, we, along with our shipyards, are focused on 
attracting and retaining the necessary work force and improving 
resiliency in our supply chain. The President's Fiscal Year 
2024 budget has provisions that aid in addressing those 
concerns as well as procuring the ships necessary to maintain 
our surface ship industrial base in a way that achieves our 
operational needs.
    I will end my comments with some perspective on the scale 
and complexity of what we do. One of the ships that we are 
currently building in Pascagoula, Mississippi is the future 
America-class amphibious assault ship, USS Bougainville LHA-8. 
For perspective, the ship is 104 feet longer than this U.S. 
Capitol Building is wide. Now, imagine taking that structure, 
that size, and making it float, then making it capable of 
propelling and steering itself at speeds of 25 miles per hour, 
then adding all the services required to make it a home to 
2,800 people who live on it at sea--birthing spaces, water, 
sewage, heat, air conditioning, dining facilities, computer and 
servers, food storage, and refrigeration, laundry, the list 
goes on--encompassing over 150 miles of pipe and over 1,000 
miles of cable. Then add to it a full hospital for humanitarian 
efforts or wartime support to injured Marines. Add to it a fire 
department and installed firefighting and damage-controlled 
systems, then add to it radars, communication gear, and self-
defense systems. Then add to it an airport the size of almost 
two football fields capable of supporting 20 Joint Strike 
fighters and interoperability with other nations. And build it 
in a way that allows it to operate at sea in all conditions for 
deployments lasting at least six months and reliably over a 40-
year service life.
    The ships we design, build, and deliver are some of the 
most complex system of system machines in existence. We in the 
acquisition community do not shy away from the challenges of 
delivering such capability. We actually embrace them, because 
we know the importance of these ships to our Navy and 
ultimately to our Nation's defense.
    Thank you for your time today, and I look forward to your 
questions.
    Mr. Grothman. Thank you. Admiral Moton?

                    STATEMENT OF REAR ADMIRAL MOTON

                  PROGRAM EXECUTIVE OFFICER (PEO) FOR

                     UNMANNED AND SMALL COMBATANTS

                           UNITED STATES NAVY

    Admiral Moton. Chairman Grothman, Ranking Member Garcia, 
and distinguished Members of the Subcommittee, thank you for 
the opportunity to appear before you today to discuss the state 
of Naval surface ship construction, alongside my partner in 
this effort, Rear Admiral Anderson. I am honored to lead the 
sailors and Department of the Navy civilians of the Program 
Executive Office Unmanned and Small Combatants in our mission 
of acquiring and sustaining the ships required by our Navy and 
Marine Corps.
    Our small combatant ship construction programs, including 
the Constellation-class frigate now under construction, provide 
important capability for the Nation. My team is also developing 
and building the Navy's nascent fleet of unmanned surface and 
undersea systems, including their autonomy and enabling 
technologies. These unmanned vessels, teamed with manned ships, 
will form the hybrid fleet that the chief of naval operations, 
Admiral Gilday, has set as the Navy's objective. In addition to 
our ship construction work, my command is also responsible for 
acquisition of systems for mine warfare, expeditionary 
missions, and special warfare.
    Our shipbuilding efforts are smaller in magnitude than 
those conducted by Admiral Anderson's program offices, but are 
nevertheless important to both the Navy and industry. Our two 
organizations work in close coordination with each other and 
with the Navy's other shipbuilding programs to jointly manage 
the Naval Shipbuilding Industrial Base. We also work closely 
with industry on matters fostering the efficient execution of 
shipbuilding, such as work force development, strengthening of 
the supply chain, and infrastructure.
    Certainly, the same factors regarding the overall state of 
our ship construction capacity that Admiral Anderson discussed 
also apply to our small combatant efforts. In addition to our 
Navy efforts, I also appreciate the support of Congress in 
these matters and particularly thank Congress for the funds 
appropriated in Fiscal Year 2023 to help foster the Frigate 
Industrial Base and work force development.
    Equally foundational to efficient shipbuilding is stable 
acquisition of modern and mature designs. The Navy has worked 
hard in applying lessons learned to the Constellation-Class 
Program. To reduce technical risk and to develop this new class 
faster, the Navy worked closely with industry to set the 
conditions for a successful program of record by developing 
realistic requirements, utilizing non-developmental systems, 
and leveraging existing frigate designs, enhanced with U.S. 
Navy combat and communication systems. Construction is underway 
in Marinette, Wisconsin on the future USS Constellation, the 
first-in-class ship.
    With the emergence of unmanned surface and undersea 
systems, the Navy is positioned to catalyze a broader segment 
of the Nation's industrial base, including many companies that 
are not currently associated with defense. Alongside our 
shipyards producing smaller ships and craft, these other 
companies include both small businesses and larger firms that 
specialize in developing technologies, such as reliable 
autonomous systems, artificial intelligence, energy storage, 
and cyber defense.
    We have engaged early with industry and, for example, 
recently completed a comprehensive Department of the Navy 
Unmanned Systems Industry Day, which was attended by 430 
companies, with almost 50 percent of those being small 
businesses. These companies, plus academia and other 
institutions, in partnership with the Navy, will enable our 
goal of the hybrid fleet with potentially 150 unmanned vessels 
by 2045.
    The Navy is taking a deliberate approach to mature the 
required technologies, utilizing land-based testing and at-sea 
prototyping, while also operationalizing unmanned capabilities 
in the fleet. This data and knowledge is informing our Large 
Unmanned Surface Vessel Program, which the Navy intends to 
procure in Fiscal Year 2025, but it will also enable future 
fielding of other unmanned vessels. We are using a solve-once-
and-scale approach, and while the size of unmanned systems are 
smaller, there will also be similar challenges and 
opportunities as in the broader industrial base while we 
achieve this scale. We will continue working closely with 
industry and with Navy partners to prepare for this significant 
acquisition effort to achieve our hybrid fleet.
    I thank the Subcommittee for your time and support and 
interest in Navy ship construction, and I look forward to your 
questions.
    Mr. Grothman. Thank you. I will recognize myself for the 
purpose of asking a couple of questions. We are going to start 
with Admiral Anderson.
    In February, the Navy awarded a $2 billion contract to 
Lockheed Martin to develop a hypersonic missile system for the 
Zumwalt-class destroyers. The Zumwalt-class destroyers have 
seen plenty of overruns and only three have been built out of 
an original plan to build 32. Now that these three ships are 
stuck in testing and not deployed, how will this new contract 
with Lockheed Martin help develop the Zumwalt destroyers, and 
what do you believe went wrong in the acquisition and 
construction of the ship?
    Admiral Anderson. Yes, sir. Thanks for the question. I will 
talk a little bit about lessons learned from the construction 
of the ship first, and then I will talk about where we are 
headed with regards to our capability going forward, if that is 
OK.
    So, I would say that one of the lessons learned that we 
have had from the Zumwalt Program is how much technology to 
attempt to insert into a ship at one given time. The Zumwalt-
class was going to be revolutionary in the technologies that we 
implemented in that ship. Twelve new technologies all coming 
together in one ship is a significant amount of risk, and much 
of that risk was realized through the program. Costs for those 
ships went up, and, ultimately, the Navy made the determination 
that we were not going to buy the 32 that were originally 
envisioned. We were going to knock that down to three and go 
back to building DDG-51s.
    So, we are now talking about what our next large surface 
combatant will be after the DDG-51 Program. Currently, it is 
titled DDG(X). We have been very mindful to take the lessons 
learned from the DDG-1000 Program. We are not looking to have 
12 new technologies in our new large surface combatant. We are 
really largely looking to change from a revolutionary approach 
to an evolutionary approach. The two major changes that we 
currently envision in that ship are a change in hull form and a 
change to integrated propulsion systems. Integration propulsion 
systems exist in the Navy in other places, but they are not in 
our large surface combatant DDG-51. We also working very 
closely with our shipyards to make sure they are involved early 
on, so we are getting their perspective on the cost, we are 
getting their perspective on producibility so we can build that 
DDG(X) efficiently.
    To your second question on CPS, so we currently have two 
ships that are out in operation. DDG-1000 has already employed. 
She has already gone forward. DDG-1001 is wrapping up her new 
construction process. She is already a ship available to the 
fleet. We have one ship left to complete their combat systems 
on, and the Navy made the determination that we were going to 
install conventional prompt strike in that ship. Conventional 
prompt strike is a game-changing technology with regards to 
hypersonic capability. It is a real game changer with regards 
to our position with regards to China and their capability. CPS 
will be fielded in DDG-1000 starting in 2025, so we are moving 
very quickly to get this capability installed.
    The other thing that I would share with you is that we do 
have two program offices working this. We are working to mature 
CPS, the missile itself through SSP, strategic programs, and 
then my office is responsible for actually getting it installed 
in the ship.
    Mr. Grothman. Just a quick follow-up.
    Admiral Anderson. Yes.
    Mr. Grothman. You know, the original plan was 32. If you 
were testifying eight years ago today, how many ships we would 
have done by now, would you have guessed at that time?
    Admiral Anderson. Well, I think we made the determination, 
you know, around that time that we were going to decrease the 
numbers. That determination for three ships was made many years 
ago, sir.
    Mr. Grothman. OK. OK.
    Admiral Anderson. Yes.
    Mr. Grothman. OK. Now I guess for either one of you, it has 
been reported China has surpassed U.S. when it comes to 
shipbuilding and today has 340 modern capable ships, whereas 
the U.S. stands at 296. When it comes to numbers, should we be 
more concerned with quality or quantity?
    Admiral Anderson. I think the answer on concern is quantity 
and quality. We should be concerned with both. I think if we 
take advantage of the ONI brief, they will give you more detail 
on the capability they have in their ships today. What I would 
share with you is that----
    Mr. Grothman. Does China sell a lot of ships to other 
countries?
    Admiral Anderson. Yes, sir, they do. They sell ships and 
submarines in addition to commercial ships, as do South Korea 
and other countries.
    Mr. Grothman. Do we ever compete with them for business?
    Admiral Anderson. Currently, I think we are limited in our 
foreign military sales of ships to Saudi, which Admiral Moton 
administers that program, and then AUKUS, as we heard earlier, 
submarine construction is where we are having discussions 
today. But we do not have a large volume of ships that we are 
outsourcing in new construction to foreign countries.
    Mr. Grothman. Is that a mistake?
    Admiral Anderson. I go back to this early discussion about 
capacity and China.
    Mr. Grothman. OK.
    Admiral Anderson. It would be wonderful to be in a position 
where we had the industrial base that was competitive with 
other countries----
    Mr. Grothman. We are not competitive. OK. Ranking Member 
Garcia?
    Mr. Garcia. Thank you very much, and I am going to just go 
off of what the Chairman was just discussing. I think the 
shipbuilding disparity is real. I mean, certainly our Navy is 
the strongest in the world and we are proud of that, but the 
disparity is decades and decades in the making. I think it is 
important to note that one of the real issues is that China 
produces about a thousand commercial cargo vessels per year, 
and that is on the commercial side. And so, the commercial 
capacity that China then exports to countries across the world, 
and we see these ships, by the way. You go to any port along 
the Pacific, whether it is my port in Long Beach and Los 
Angeles, or it is the Ports of Seattle, or anywhere else, even 
down through Mexico, or ports that go on to other parts of the 
world across Asia, most of the ships in the world are actually 
built by China.
    And so, I think it is important to note that what the 
shipbuilding does, is it provides China with a capacity to then 
actually streamline their shipbuilding on the military side. 
And because United States over many decades has decreased their 
kind of focus on shipbuilding as an economy, that has allowed 
China, you know, over the last 40, 50 years to be the world's 
producer, essentially, of cargo ships on the commercial side. 
And I will note, you know, having had the Port of Long Beach as 
a mayor and the city, that, in my opinion, Chinese commercial 
ships are of less quality and less focused on climate and some 
of the other goals as ships that might be produced, for 
example, in Korea and other places across the world, or the 
work that we are doing in the U.S.
    I just want to want to note real quick for both the 
admirals, what is the current maximum capacity for military 
shipbuilding in the U.S.?
    Admiral Anderson. Sir, we are engineers on this side of the 
table, so we are currently calculating how to best----
    Mr. Garcia. I mean, around 10? Does that sound about right?
    Admiral Anderson. Yes. If you look at the surface 
shipbuilding budget, routinely, we are somewhere in the 
vicinity of seven to nine ships requested per year.
    Mr. Garcia. Yes, that sounds about right.
    Admiral Anderson. It is a good indication.
    Mr. Garcia. And----
    Admiral Moton. Sir, it also has to be kind of a yard-by-
yard answer. Our nuclear shipyard capability, large amphibious 
ships, right? So, it is a rough range, but certainly, you know, 
you kind of have to look class by class as well.
    Mr. Garcia. I think that sounds right, and what do you 
think are the most important steps that Congress could take to 
actually build shipping capacity?
    Admiral Anderson. So, you know, as I mentioned, our Fiscal 
Year 2024 budget has the quantity of ships we believe we need 
operationally and to maintain the industrial base. There is 
also funding in there that helps us to expand the work force. 
One of the real challenges we have in this country is 
availability of blue-collar labor, and we saw that as a 
challenge as we were in COVID and came out of COVID, and we 
continue to struggle to identify talent to come in, people who 
are interested in the blue-collar trades.
    So, support of our budget requests that provide funding to 
develop the work force, that comes in two ways. The submarine 
industrial base, which I mentioned earlier, has targeted funds 
to help advance the work force. Additionally, last year in the 
NDAA, Section 122 provided a requirement for the Navy when 
awarding shipbuilding contracts in the future to fund a 
percentage of the overall cost of the ship to go toward work 
force development items. Those are helpful.
    Admiral Moton. Sir, if I might add?
    Mr. Garcia. Yes, briefly. Yes, sir.
    Admiral Moton. First of all, your points about, you know, 
China's capacity are certainly correct, as Admiral Anderson 
discussed. You know, the U.S. Navy's approach is to focus on, 
you know, not just capacity but also the capability and the 
readiness, and so that is the way we are approaching it. From 
what can we do to help, you know, certainly anything that we 
can do to strengthen our industrial base to meet our current 
demand and to surge if we need that to happen. The Navy tries 
to do a stable planning, efficient planning, efficient 
acquisition. That is why we ask for things like multi-year 
procurements in certain programs, Congress' support of those, 
for example. And just reiterate Admiral Anderson, you know, to 
invigorate shipbuilding as a profession in the United States--
--
    Mr. Garcia. Absolutely.
    Admiral Moton [continuing]. With young people.
    Mr. Garcia. Just to wrap up. My time is almost up here. I 
agree completely with both of you, and I just want to remind 
the Committee that there is synergy between the commercial side 
of shipbuilding and what we are able to do on the military 
side. And because United States for the last generation has 
essentially withdrawn from shipbuilding as a major source of 
manufacturing jobs, that does impact, while, of course, China 
has ramped up those efforts. So, I want to thank you both for 
your answers.
    Mr. Grothman. Congressman Dunn. I am sorry. Congressman 
Higgins.
    Mr. Higgins. Thank you, Mr. Chairman. Admiral Anderson, 
Admiral Moton, thank you for being here today. Admiral Moton, 
sir, we have a high level of confidence in your leadership and 
as you guide the MUSV Program, a critical shipbuilding program 
for our Nation. I just want to personally reassure you that my 
office stands aligned with your vision for completion, and we 
stand with the primary contractor and the subcontractor 
shipbuilders, and we avail ourselves to you and your office and 
your staff, sir. We look forward to moving the project forward. 
And we have had meaningful engagement with your staff and your 
office regarding that program, so thank you for your 
accessibility and your interaction with my office regarding the 
MUSV Program. We shall find a path forward there.
    Admiral Anderson, I have a lot to unpack here and a few 
minutes to do it in. Thank you, sir, for your service to your 
country, and although I have many questions to get to, you said 
something that was just striking earlier. You said it would be 
wonderful if we had the industrial base in America. You were 
being asked about our competitive shipbuilding capabilities as 
compared to China. What exactly did you mean by that, sir? We 
have been building vessels in America for a very long time and 
quite successfully. The quality of our shipbuilding, I believe, 
in America is second to none. It is a communist-run over there. 
It is slave labor and no environmental regulations, no safety 
standards. What exactly do you mean you wish we had the 
industrial base in America that they do in China?
    Admiral Anderson. Yes. Yes, sir. Just to be clear, the 
point I made was that the commercial work that China has 
provides opportunity to them with regards to their military 
production. It is not to in any way impugn U.S. work force, the 
quality. I actually think in my opening remarks I was pretty 
clear on that we deliver the finest warships on the planet.
    Mr. Higgins. Is it the----
    Admiral Anderson. The advantage----
    Mr. Higgins [continuing]. The cornerstone of our Nation's 
military, the moral integrity upon which we stand, is it an 
opportunity for a Chinese family to provide slave labor in the 
shipbuilding industry in China?
    Admiral Anderson. No, sir. Maybe to explain the point a 
little bit better, I will talk to South Korea. So, I recently 
visited South Korea. South Korea has a simple----
    Mr. Higgins. South Korea. The only reason South Korea is 
free is because of America.
    Admiral Anderson. Yes, sir.
    Mr. Higgins. So, I do not want to get into the weeds on 
that. That was just a striking statement. Let me say for the 
record, I believe that our shipbuilding industry in America is 
the strongest in the world, and our industrial skill and the 
quality of the products we produce in America are second to 
none. And I think that shipbuilders and welders and fitters and 
fabricators and machinists across the country would agree with 
that.
    Chairman, I would like unanimous consent to enter into the 
record a letter addressed to Secretary Mayorkas of Homeland 
Security and Secretary Del Toro of the United States Navy, 
dated September 30, 2022, from my office and signed by myself 
and Congressman Neal Dunn, and the corresponding responsive 
letters from the Navy, October 28, and from Department of 
Homeland Security on November 14. I would like to enter them 
into the record, sir.
    Mr. Grothman. So, ordered.
    Mr. Higgins. Admiral Anderson--wow, five minutes rolls by 
very quickly here--I am going to ask you one question. Does the 
Navy have the authority to reallocate awarded contracts from 
one shipyard to another to preserve industrial capabilities?
    Admiral Anderson. The Navy has authority to act on 
individual contracts and to make determinations on the use of 
dual source for shipbuilding platforms.
    Mr. Higgins. So, if the Chairman will indulge to complete 
this question----
    Mr. Grothman. Go ahead.
    Mr. Higgins. Thank you. It has come to my office's 
attention that a law cited by you and your office, sir, 
regarding moving ships from a smaller shipyard to a larger 
shipyard was 10 U.S. Code 2304(c), ``Charlie,'' (3), which 
states, ``as necessary to award the contract to a particular 
source or sources in order to maintain a facility, produce, or 
manufacture, or other suppliers.'' So, that law makes sense, 
but how would this law give your office the authority to move 
shipbuilding from a contract at a smaller shipyard building 
steel vessels and sole source award those ships to a 
shipbuilder, a large shipbuilder, that had never built a steel 
vessel? How is that maintaining an asset?
    Admiral Anderson. So, not to delve too far into the 
details, the justification for that is signed by the Assistant 
Secretary of the Navy for Research Development and Acquisition. 
In other words, that authority does not reside with me. That is 
the Navy's authority----
    Mr. Higgins. That is the authority you cited, though. That 
is the law that you cited, correct?
    Admiral Anderson. That is the law that, in the memo signed 
by RDA, was utilized.
    Mr. Higgins. Do you agree with that citation of law?
    Admiral Anderson. I do.
    Mr. Higgins. OK. My time has expired. I will have questions 
to submit in writing to both admirals. Deepest respect for you 
both as we forge a path forward for our shipbuilding in 
America. Thank you, Mr. Chairman for your----
    Mr. Grothman. Thank you. Congressman Lynch?
    Mr. Lynch. Thank you, Mr. Chairman. Admiral Anderson, 
Admiral Moton, thank you very much for your willingness to come 
before the Committee and help us with our work. Just a little 
bit of background here, I am a former shipfitter. I worked at 
the General Dynamics Shipyard in Quincy, Massachusetts before 
coming to Congress. I share Mr. Higgins' frustration sometimes 
with the bidding process, and I just want to emphasize that I 
am worried about the work force situation here, and the number 
of shipyards and the number of dry docks that we have across 
the country. And I worry about our national security if we ever 
had to rely on an enhanced shipbuilding program or a ship-
enhanced repair program with the number of dry docks we have.
    And I just want to say on the record that it is important 
that you spread the work out. Mr. Higgins was talking about, 
you know, moving work from a small shipyard to a bigger 
shipyard that has a lot of work but does not necessarily have 
the same expertise. You are going to put those smaller 
shipbuilding facilities and ship repair facilities out of 
business. I was very involved with Boston Ship Repair. It is 
right outside my office, and, you know, we can fit most ships 
in there except for the largest carriers, and we have put 17 
bids in, in the past couple of years, and we got one successful 
bid.
    And so, you know, look, I have traveled around a bit as an 
iron worker as well. You know, I worked in Norco, Louisiana. I 
know what they are doing down in Avondale. I know that we have 
got some other bigger shipyards and repair facilities. But it 
is important if you are going to put a bid out there, you want 
to have a lot of competition to try to get that number down, 
and if you whittle it down to just a few shipyards, you are 
going to pay more. You are going to put our work force at risk, 
and you are going to close down a lot of these smaller 
shipyards, so I would just ask you to be mindful of that.
    On a personal note, I got a buddy of mine, Thomas G. Kelly. 
He is a congressional Medal of Honor recipient, and we were 
lucky enough in the 2023 budget to put in some money to have a 
DDG-140 named after him. It is in construction. It is just 
beginning right now, so it is going to be a few years. But I 
just want to put on the record I am going to write to Secretary 
Del Toro that I would like to have that christened in our home 
port of South Boston and not anywhere else. Tom, you know, he 
is a dearly loved member of our community, and I think it would 
do him proud to have that ship dedicated in our home port, and 
I think it would be a fitting crowning achievement of his 
career and a wonderful recognition of his service.
    You know, I am concerned about how we post up against 
China, and I guess the question is, and I have seen their 
shipbuilding program, and I am not talking about quality, but I 
am talking about the number of vessels. I think they have got 
programmed to--I think they are doing 340 right now. They can 
put 340 ships, or platforms anyway, and we are at about 290 or 
something like that. So, it seems to me if we stay on the 
current path, we are going to fall further behind. And what is 
it that you would recommend for us to do, the changes that we 
need to make to catch up given our limitations on supply chain 
and the current pace at which we are turning out ships? Admiral 
Anderson?
    Admiral Anderson. Sir, I think there are two pieces to it. 
The first piece is the discussion about our capability versus 
their capability, the quality of their capability, their 
ability actually to project power with that capability. One of 
the things that we have is absolutely a strategic strength for 
us are the sailors that operate our ships, their proficiency at 
operating ships around the world, the technology that we have 
within our ships.
    One of our major areas of advantage is our submarines. I go 
back to that initial discussion that says our submarine force 
absolutely needs to ramp up. We are currently delivering 
somewhere less than 1-and-a-half Virginia-class submarines per 
year. We need to ramp up the work force to do that two 
Virginia-class and one Columbia-class. Estimates of that 
program office is that that will take somewhere between 80,000 
and 100,000 trades people to be hired over the 10 years.
    Mr. Lynch. Wow.
    Admiral Anderson. It is significant.
    Mr. Lynch. Yes.
    Admiral Anderson. So, when you look at the Navy budget 
where we are focused, we are focused in making that happen. I 
go back to this supplier industrial base, funds that were using 
to get people interested in blue-collar labor, get them married 
up with companies that support that supply chain. So, while I 
am not being overly vocal in the portfolio that we work in with 
regards to additional need, submarine industrial base is really 
where we need efforts.
    Mr. Lynch. Mr. Chairman, if I could just----
    Mr. Grothman. Sure. We will give you another question.
    Mr. Lynch [continuing]. Ten more seconds. I just want you 
to think about, look, I am a union iron worker, and I am also a 
member of shipfitters union. We have the apprentice program, 
and it is a four-year program. We train these kids coming in, 
these young men and women. There is a pathway there to get that 
work force trained up and put them to work, but you got to work 
with us. The Navy has to work with us. Thank you for your 
courtesy, Mr. Chairman. I appreciate that, and I yield back.
    Mr. Grothman. Thank you. Congressman Gosar.
    Mr. Gosar. Thank you, Mr. Chairman, and I thank the spirit 
in which the last two Members of this body have asked 
questions. So, my opening statement, the Department of Defense 
and the Navy are in a bad way. The Department of Defense is the 
only agency since 2013 that has never passed a financial audit. 
Last year, DOD failed its 5th consecutive audit. A staggering 
61 percent of DOD funds were unaccounted for. The Government 
Accountability Office. Gentleman, are you familiar with that 
office? Both of you?
    Admiral Anderson. Yes, sir.
    Admiral Moton. Yes, sir.
    Mr. Gosar. OK. The Government Accountability Office 
estimates that the DOD has no idea where millions of dollars' 
worth of valuable equipment is. The last time DOD even bothered 
to compile the amount of the DOD equipment in the hands of 
Federal contractors was 2014. In the last few years, China has 
surpassed the United States of America for the first time in 
numbers of warships. By 2025, as has been reiterated here, 
China's fleet is expected to grow to 400 ships, 60 more than 
the U.S. Navy's current fleet.
    Instead of a focus on a more lethal, efficient, and deadly 
fighting force, the Navy instead seeks to appease the woke. 
Just a year ago, 240 servicemen were discharged from the Navy 
for refusing the experimental vaccine. That is a national 
disgrace. They ought to be brought back in and given back pay. 
Talking about the U.S., Reagan, the former President, has got 
to be rolling in his grave. Now, Admirals, how have the endless 
wars in the Middle East, and now Ukraine, affected the Navy's 
military readiness?
    Admiral Moton. Sir, if I could start, you know, your 
initial comments just to assure you the Department is certainly 
committed to completing successfully the audit. And certainly, 
at Admiral Anderson's eye level and shipbuilding, we understand 
the importance of transparency at the level that we manage, 
making sure that our contractors are following contract 
requirements in terms of compliance, business systems.
    Mr. Gosar. Well, I get that, but, I mean, to the two 
gentlemen that preceded me with questions, you have to know 
where money is in order to get money out.
    Admiral Moton. Yes, sir, and we are----
    Mr. Gosar. And it is a disgrace that there is no audit. I 
cannot tell you how that is disgraceful.
    Admiral Moton. Yes, sir, and at our level, we are 
completely committed to that. I know the Navy is as well. In 
terms of the readiness, again, I would just offer, you know, 
again, Admiral Anderson's and my role is to build the 
shipbuilding program that the Navy determines, you know. So, in 
terms of shipbuilding, you know, we have probably kept a fairly 
steady rate, I would say, of shipbuilding, even during the 
conflicts. You know, we certainly had our missions we had to 
prepare. Shipbuilding is a long game, as we like to say.
    Mr. Gosar. Yes.
    Admiral Moton. It takes multiple years. So, we certainly 
have a lot of challenges, you know, with our industrial base 
and our future capacity. But kind of your question about tying 
that back to the wars, you know, I think we are focused on our 
capability for the future, and we are committed to providing 
that capability.
    Mr. Gosar. So, let us get back to the Government 
Accountability Office. As you know, it is an independent agency 
that provides policy recommendations to executive agencies 
through extensive research and coordination with government 
officials. Do either one of you know how many priority 
recommendations from the GAO has the Navy, that are still 
remaining unaddressed?
    Admiral Moton. Sir, I do not think either of us know that. 
We certainly can speak to our specific----
    Mr. Gosar. Well, the answer is----
    Admiral Moton [continuing]. But----
    Mr. Gosar. The answer is 17. There are entire agencies that 
do not have higher numbers than that. For contrast, Air Force 
and Army only have three unaddressed priority recommendations. 
Could you please explain why the Navy is falling so far behind 
its peers? I mean, the questions here are geared toward the 
readiness of this fighting force, and something is wrong here.
    Admiral Moton. Sir, I think with our level in shipbuilding, 
we probably cannot give you the whole picture of the Navy, but 
we can certainly provide a response on the priority actions you 
mentioned and where we are with closing those.
    Mr. Gosar. I would definitely demand that we get that 
because we cannot do our job without you doing your job first. 
You know, here is another thing. Out of the 17 recommendations, 
you are not aware of how many you are actually addressing, are 
you?
    Admiral Moton. Sir, Admiral Anderson and I are not because, 
again, we are focused on the recommendations relevant to our 
shipbuilding efforts, but certainly at the Navy level, I am 
confident we are aware, and we can get you that information.
    Mr. Gosar. Well, do you see our frustration?
    Admiral Moton. Yes, sir.
    Mr. Gosar. OK. Well, you know, we would like to get that 
back in writing, and I share the frustration with my 
colleagues. We got to do better. I yield back.
    Admiral Moton. Yes, sir.
    Mr. Grothman. Thank you. Congressman Frost?
    Mr. Frost. Thank you, Mr. Chairman. Chief of Naval 
Operations, Admiral Gilday, recently testified to Congress that 
the biggest barrier to adding more Navy ships is industrial 
base capacity at American shipyards. There is more work to be 
done on ship maintenance and production that can be done within 
the facilities currently available. Our Navy has been engaging 
in this strategic outsourcing by partnering with smaller and 
larger shipyards to assemble ships, but it is not necessarily 
clear that having defense contractors take on so much of this 
work is sustainable in the long term, but what is clear is that 
something needs to be done to meet our national security needs.
    Admiral Anderson, how do the cost and production cycle 
times of shipbuilding that is associated with strategic 
outsourcing compared to those associated with public shipyards?
    Admiral Anderson. When you talk about strategic outsourcing 
comparing to public shipyards, you are predominantly talking 
about submarine work, and unfortunately, I do not have the 
details related to submarines. We certainly can take that for 
the record and get back to you.
    Mr. Frost. OK. Thank you. And what can the Navy do to 
ensure that shipyards work together to establish an adequate 
flow of materials and maximize production?
    Admiral Anderson. There is quite a bit of that that takes 
place naturally. The Navy is aware of it. There is a 
shipbuilding ecosystem. There are professional organizations 
where the shipyards get together and talk about their relative 
needs and partnering. The Shipbuilders Council of America is an 
example where that forum exists. There is naturally competition 
between the shipyards, so it is not completely as transparent 
as one might like, but there absolutely are examples where 
shipyards are partnering together, not only on core 
shipbuilding work but work with their supply chains. There are 
also companies that have multiple shipyards, so I will point to 
GD, NASSCO, and BIW, who certainly leverage each other's supply 
chains in the construction of ships, and the same thing with 
Huntington Ingalls. And, Casey, I do not know if you have----
    Admiral Moton. I would just add quickly that, of course, at 
the Navy level, we watch the entire shipbuilding industrial 
base and certainly look for the factors that you are talking 
about, Congressman. The shipbuilders also cooperate. There are 
organizations where shipbuilders get together and the suppliers 
get together, and there is some collaboration there. We have 
activities where we do research and development on shipbuilding 
and improving the industrial base. So, it is a balance. The 
shipyards obviously want to be competitive with one another, 
and we want competition, but at the same time, we want a strong 
industrial base that is going to support both our production 
work and our repair and modernization work, like you mentioned, 
at the public shipyards.
    Mr. Frost. Thank you. Our four public shipyards, the budget 
documents show that their workload exceeds the capacity by 
about 117 to 153 percent. These shipyards are losing a ton of 
Marine welders who get trained up and quickly move on to 
better-paying jobs. The average shipyard worker only takes home 
roughly $41,000 a year, but President Biden's budget calls for 
salary raise of 5.2 percent for the public shipyard workers. 
For both of you all, shipyards increasingly need to attract a 
sizable and skilled work force. How can Congress help the Navy 
attract more skilled workers to public shipyards and retain 
them throughout their careers?
    Admiral Anderson. I will share the perspective of private 
shipyards again. The public shipyards fall underneath different 
admirals than are represented here, but I think the argument is 
the same. One is building those pipelines to develop people, 
blue-collar labor that is interested in the kind of work we do 
in naval shipyards. One of the things we have seen very 
successful is building ecosystems around the shipyards. So, you 
know, Congress working with state and local governments to aid 
in the development of ecosystems around shipyards really 
provides opportunity. If there is no housing in the area of a 
shipyard, you are going to have a hard time having blue-collar 
labor come in and be interested in a job there. Things like 
healthcare, things like daycare, things like housing are really 
important to have in the vicinities of the yards to attract the 
talent that we need to build the ships we need in the future.
    Admiral Moton. And at all levels, I would just add, you 
know, whether it is in your districts, or at the state level, 
or, in some cases, at the Federal level, such as the industrial 
base funds that have been appropriated, you know, growing the 
work force, you know, making sure that young people understand 
it is an honorable and important profession to build ships or 
to repair ships for the U.S. Navy is, you know, something that 
I think, not just the Congress but really at all levels of our 
country, is something that we could stress and will pay 
dividends as we expand our capacity.
    Mr. Frost. Thank you. Thank you. You know, it is 
interesting we have to play catchup, though. We have the 
largest military budget in the world, and shipyard workers are 
still making less than a livable wage, but we can responsibly 
and do it in a sustainable way to ensure that our military has 
the resources they need. Thank you for your service and 
testimony. I yield back.
    Mr. Higgins. [Presiding.] The gentleman yields. The Chair 
recognizes my colleague from Texas, Representative Sessions.
    Mr. Sessions. Mr. Chairman, thank you very much. Gentleman, 
thank you to being here today, and thank you for your service 
to our country.
    I would like to focus, if I can, a conversation that I 
would like for you to have with us about the classes of ships 
that are being built and the long term, I do not know whether 
the word is return on investment, or that help the fleet out, 
but seemingly there are problems with these ships. Maybe it is 
LCS. Maybe it is some other types. Tell me about that. Are 
there requirements that standards are stuck to them, and all of 
a sudden, some ships are OK and others aren't? Are we requiring 
more than is available by industry, and we are seeking, and we 
are pushing that too far? Talk to me about the classes of ships 
and the reliability of those standards and the product 
delivered. Either one of you gentlemen.
    Admiral Anderson. Yes, sir, I will start, and Admiral Moton 
can join me in process. So, there are multiple classes of 
ships, and those ships are built to a set of higher-level 
requirements. What are the operational requirements, what are 
the mission requirements for the ship? In my opening statement, 
I talked about the Destroyer Program, the Arleigh Burke-class 
Destroyer Program, a model for us in ship construction. That 
shipbuilding program has requirements for the ship to be a 
multi-mission surface combatant, air warfare, surface warfare, 
and anti-submarine warfare. In addition, it has gotten a 
ballistic missile defense mission over time.
    The thing that makes the Arleigh Burke-class special is 
that that ship class now, you know, 30-plus years in the 
making, we are building our 75th ship. I mentioned earlier, 
75th ship. We have been able to evolve that ship over time to 
meet evolving requirements. We have flexibility in that hull. 
It is the longest-standing program that we have in the Navy.
    Different programs are built to different standards. We 
made a decision. We talked earlier about another large surface 
combatant DDG-1000 Program. We put a lot of technology in it in 
the beginning, and in the end it became very expensive, and we 
terminated it. We decreased the number of ships we are going to 
build from 32 to three, and we have examples like that across 
the spectrum. Casey, do you want to talk to the programs in 
your----
    Admiral Moton. Thank you, Tom.
    Admiral Anderson. Yes.
    Admiral Moton. Yes, sir. I would just say, you know, for 
each class, in terms of us as shipbuilders, the designs are 
tailored depending on the mission of the class, right? It is a 
carefully thought-out process, and not all ships are the same. 
Even though Admiral Anderson and I are not the nuclear ship 
builders, you know, from the nuclear all the way down, we kind 
of tailor it to the mission and the need for the class. What 
does not change is that for each contract, the Navy and the 
shipbuilder are responsible for delivering us a ship that meet 
those requirements and meet those standards, and, you know, we 
work to ensure that we only accept ships when they meet those 
standards, and that we hold shipbuilders accountable to their 
contracts in delivering.
    Mr. Sessions. Yes, sir. Yes, sir, but the testimony is you 
went from what was projected, 32 ships to three. Someone needed 
a new pencil, right?
    Admiral Moton. Yes, sir. Maybe I will answer that question 
a little bit differently, maybe with LCS, if that is all right.
    Mr. Sessions. I will let you give your own answer, Admiral. 
Thank you.
    Admiral Moton. Yes, sir. You know, you certainly did 
mention LCS, and, you know, absolutely, you know, that class 
has had some reliability challenges in several areas. You know, 
we have focused very hard on correcting those, making those 
ships reliable, providing the support that they need to do to 
the shipbuilders. As an acquisition shipbuilder, the quality 
issues are unacceptable, right? We have worked to fix them and 
have made significant progress on LCS, but they are 
unacceptable in terms of the quality issues.
    Mr. Sessions. So, would you say, sir, that they were 
oriented at, not the design, but the manufacturing?
    Admiral Moton. Sir, there are many aspects of the LCS that 
caused the reliability, some manufacturing, some equipment, 
some design. Quite frankly, it was significant in several 
areas. What I will assure you, is that on the frigate design, 
which is kind of the successor to LCS in our frigates, those 
lessons learned have been applied. We made sure to start with 
mature systems, non-developmental systems. We are ensuring that 
the frigate is built to sort of core Navy quality standards and 
survivability and reliability. We leveraged existing designs to 
ensure that we did not have the developmental issues there. We 
made sure that we had a mature production before the ship 
started construction.
    I know many of those are kind of shipbuilding details, but 
those are the important lessons learned from LCS, an example 
that we are applying now, and I know that Admiral Anderson is 
doing that as well on the next destroyer.
    Mr. Sessions. Mr. Chairman, I would like the record to 
reflect that as I started, I end. I want to thank these 
gentlemen for their service to the United States of America, a 
grateful Nation, and I yield back my time, Chairman.
    Mr. Higgins. The gentleman yields. His time has expired. 
The Chair recognizes my friend and colleague from North 
Carolina, Representative Foxx.
    Ms. Foxx. Thank you, Mr. Chairman, and I want to thank our 
witnesses for their service to our country also. Rear Admiral, 
I am going to follow up with some more detail from what my 
colleague from Texas was asking you in a general way. Admiral 
Anderson, the Navy has discovered that the Freedom-class 
littoral combat ship suffers from design flaw, which has led to 
repeated failures in the combining gear, which is part of the 
ship's propulsion system. Can you provide an estimate on how 
much it will cost to repair the combining gear issue and when 
design flaws are discovered on ships, that the Navy has 
accepted who is on the hook for cost to fix the issue, the 
contractors or the taxpayers? And I want to say I have several 
questions, so I would appreciate short answers.
    Admiral Anderson. Ma'am, I am going to actually ask Admiral 
Moton to answer that.
    Ms. Foxx. OK.
    Admiral Anderson. It falls under his command.
    Ms. Foxx. All right. That is fine.
    Admiral Moton. I have the LCS Program.
    Ms. Foxx. OK.
    Admiral Moton. Yes, ma'am. So, you are correct. The 
Freedom-class, in particular, has had this design issue with 
the combining gear that you mentioned. You know, I want to 
start by immediately, you know, telling you that a solution has 
been determined for that combining gear, and we are part way 
through the class of ships in installing that fix and restoring 
the ship to its full capability. That combining gear fix or 
combining gear issue, again, was unacceptable. It was a design 
issue in the gear that should never have been there. You know, 
we have held industry accountable.
    Ms. Foxx. And who is paying for it, the industry is?
    Admiral Moton. Ma'am, in our shipbuilding contracts, in 
general, we share cost with industry, and that is not specific 
to LCS. That is how we do it. It is fixed price incentive 
contracting, and that is how it is working on LCS is that we 
are sharing the cost. However, you know, typically once a ship 
delivers, we do not have the ability to do that. In this case, 
for LCS, we declared what is called a latent defect, and I 
apologize for the term, but it is a contractual mechanism where 
we hold the building yard accountable for the mistake that they 
made. We still share the cost, but it is certainly not the U.S. 
Navy or the taxpayer paying 100 percent. And so that is the way 
that----
    Ms. Foxx. What percent are we paying?
    Admiral Moton. On the----
    Ms. Foxx. Let us be specific.
    Admiral Moton. On the LCS contract, ma'am, it is a 50/50 
cost share, so----
    Ms. Foxx. OK. All right. It has also been reported that the 
LCS requires preventive maintenance by contractors about once a 
month for a 1-2 week period. I mean, this means half of the 
time, the ship is not available for use. It is absurd to think 
that a ship that cost north of a half million dollars could be 
in preventive maintenance cycle for up to six months a year. I 
know you have said that you found a solution and you are 
working on it, but will the repairs that have been needed and 
maintenance now go away?
    Admiral Moton. Ma'am, any ship, of course, requires 
preventive maintenance. That is the way that we keep the 
availability, the time that the ships are available, up. The 
LCS Program utilized a construct that is different than much of 
the rest of our surface force originally, which was to keep a 
small crew and to have industry repair those. Certainly, we 
have had some challenges there. We have made changes. The Navy 
sailors are now doing more and more of that maintenance in 
order to keep those ships more operable.
    We are also trying to reduce--you mentioned preventive 
maintenance--but corrective maintenance, right? We are 
implementing reliability fixes to the class to reduce the 
number of equipment failures they have and to provide the fleet 
that the ships need. And certainly, there is more work to go, 
but there are four LCSs currently deployed today in the U.S. 
7th Fleet and several more elsewhere in the world, so we are 
making progress. But as the shipbuilder, I am the first to say 
there is more to do.
    Ms. Foxx. Oh. OK. One more question. Based on the Navy's 
experience with the LCS, would it be beneficial to the service 
to procure multiple ship variants produced by different 
contractors in the future, or would it be a hindrance? It seems 
to me having all our eggs in one basket has not been very 
productive.
    Admiral Moton. So, it is obviously different for each 
class. LCS was sort of a unique construct where we ended up 
with our two different variants that basically meet the same 
requirement. We have other cases, you know, in some cases where 
our production rate supports it, DDG-51 under Admiral 
Anderson's portfolio, where we have two shipyards building DDG-
51. So, where it is possible, it is helpful to have multiple 
ships. It kind of depends on every ship class and what our 
build rate is.
    Ms. Foxx. Thank you very much. Again, thank you for your 
service, and, Mr. Chairman, I yield back.
    Mr. Higgins. The gentlelady yields. The Chair recognizes my 
colleague, Representative Dunn, for five minutes.
    Mr. Dunn. Thank you very much, Mr. Chairman. I also want to 
thank you for the opportunity to waive on to this hearing 
today. This Subcommittee is conducting extremely important 
work, and I appreciate the opportunity to be part of the 
conversation. What I want to know is are the Chinese weakening 
our Navy and Coast Guard from within. In 2016, a family owned 
shipyard in my district was awarded a U.S. Coast Guard Phase 1 
contract for the first four of 25 offshore patrol cutters. 
These cutters are being completed on time and on budget, 
despite Hurricane Michael's Category 5 devastation in our 
region. The Coast Guard has repeatedly stated that the quality 
of these ships was as good or better than any they had.
    Despite this success, the Coast Guard awarded the OPC Stage 
2 contract to another company, Austal USA, which is the largest 
shipbuilding contract ever awarded by the Coast Guard at $3.3 
billion. This is the same Austal that was awarded the contract 
to build the littoral combat ships for the Navy. As widely 
reported, these ships are plagued by cracked hulls, broken 
equipment, and technologies that do not work. They are severely 
delayed, and they suffer massive cost overruns.
    Despite these complete failures, DOD announced a grant of 
$50 million, using taxpayer money, to Austal so they would be 
eligible to bid on the Coast Guard contract. You would think 
that the U.S. Navy would be hesitant to award another contract 
to a company that delivered faulty products, but Austal was 
also awarded a contract to design and build the Navy's 
expeditionary fast transport ships, also a failure. Most 
recently, Austal was awarded the contract to build the command-
and-control modules for the nuclear-powered submarines that are 
central to our nuclear defense front for Triad. All this, and 
now Austal CEO and other C-Suite executives have been indicted 
for fraud by the Department of Justice. In what universe does 
this happen?
    Austal USA is part of Austal International, an Australian 
company with close China links. In fact, Austal co-owned a 
shipyard in China until December 2021, the entire time it was 
building ships for the United States Navy. It should alarm 
everyone that a company like Austal, that has won multiple 
defense and Homeland Security contracts, has such close ties to 
the CCP. This is a deeply troubling national security threat.
    Admiral Anderson, the Chief of Naval Operations, on 
multiple occasions, has stated that China is the strategic 
threat to this country and the time to act is now. Do you agree 
with that statement?
    Admiral Anderson. Yes.
    Mr. Dunn. Thank you. I do, too. Given your position, what 
prime contractors for the Navy have had direct partnerships 
with the CCP over the last five years? Admiral Anderson.
    Admiral Anderson. Yes, I am thinking. I am making sure I 
understand your question. Which prime shipbuilding contractors 
that do work for the United States have direct contact?
    Mr. Dunn. With the Navy, are also working with the CCP. Let 
me help you--let me help your----
    Admiral Anderson. I would say none.
    Mr. Dunn. I will reclaim my time. Mr. Chairman, I want to 
submit to the record an article from Baird Maritime, titled, 
``Zhang Long Shipbuilding Wins China Coast Guard Vessel 
Tender.''
    Mr. Higgins. Without objection.
    Mr. Dunn. Thank you, Mr. Chair.
    Mr. Higgins. Admiral Anderson, should prime contractors for 
the Navy or their subsidiaries have direct relationships with a 
country that your CNO believes poses the greatest threat to our 
Nation's sovereignty and security?
    Admiral Anderson. No.
    Mr. Dunn. I agree. Thank you. Admiral Anderson, did the 
Navy provide a $50 million defense production grant, a grant 
funded by taxpayer dollars, to a company that had an active 
partnership with the CCP?
    Admiral Anderson. I cannot answer the question on active 
partnership. I am not aware of any active partnership with the 
CCP----
    Mr. Dunn. Let me jog----
    Admiral Anderson [continuing]. But to be----
    Mr. Dunn. Admiral, let me jog your memory.
    Admiral Anderson. OK.
    Mr. Dunn. Mr. Chairman, I would like to submit for the 
record a DOD press release announcing a $50 million Defense 
Production Act Title III grant with Austal USA. That is a nice 
gift.
    [No response.]
    Mr. Dunn. Mr. Chair?
    Mr. Grothman. [Presiding.] So, ordered.
    Mr. Dunn. Thank you.
    Mr. Dunn. Admiral Anderson, do you believe it is 
responsible and sensible to award contracts to a company whose 
entire leadership structure was actively being investigated by 
the Department of Justice and the SEC for defrauding our 
government, and by the way, have since been indicted? Is that 
reasonable.
    Admiral Anderson. No.
    Mr. Dunn. I agree. It is not. Mr. Chairman, I would like to 
enter into the record a DOJ press release, titled, ``Three Men 
Indicted for Multi-Million Dollar Accounting Fraud Scheme at a 
U.S. Navy Shipbuilder,'' and I think we can all guess who that 
shipbuilder is. Admiral, thank you very much your service. I 
appreciate it.
    Mr. Grothman. So, ordered.
    Mr. Dunn. Mr. Chairman, I yield back.
    Mr. Grothman. Thank you. Is that it? OK. In closing, I 
would like to thank our witnesses once again for their 
important and insightful testimony.
    First of all, I would like to yield to Congressman Garcia 
for your closing comments.
    Mr. Garcia. Sure. Thank you very much, Mr. Chairman. I just 
want to just correct one thing that was mentioned earlier and 
then just give a couple of general closing thoughts. I just 
want to just, I think, remind the Subcommittee, and I think it 
is important for the public to remember, when we are talking 
about the capacity and the ability of the American shipbuilding 
to Chinese shipbuilding, no one certainly is going to argue 
that we do not have the best work force and that we do not have 
the best military anywhere in the world. But the capacity and 
our ability to build ships is dramatically different, and I 
just want to remind us that, in China, they build on the 
commercial side approximately 1,000 ships a year. The United 
States builds approximately 10 ships a year. We build one 
percent of China's shipbuilding capacity. Globally, 47 percent 
of all ships produced are made in China. Globally, 0.2 percent 
of the ships produced are made of the United States. And so, 
yes, our ships are better, our workers are better, but as far 
as who is building more ships and the capacity there is no 
question that over many decades, that has shifted, 
unfortunately, to China.
    I just want to also just close by thanking all of you for 
your service. I am particularly just grateful, Admiral, sir, 
that you had gone to Korea to look at the shipyard. They are 
really doing some innovative work there, and I know that you 
are trying to implement some of what we have learned from some 
of our allies across the globe. And also at a later time, I 
just want to also get into some conversation about 3D printing, 
which I know the printing of metals for submarines and what we 
are doing here in the United States is incredible. And I want 
to commend all the innovation that is happening in the Navy 
around 3D printing and what that is going to do to our 
shipbuilding capacity in the future, as well as with within our 
work force. So, thank you for doing that. Thank you for your 
interest in high-performing organizations, and I look forward 
to the Navy continuing that work. Thank you, Mr. Chairman.
    Mr. Grothman. Thank you. I appreciate all your time today. 
It is always frustrating when you are kind of limited to five 
minutes, but that is why we do things in Congress.
    I want to remind everybody they have five legislative days 
within which to submit materials and to submit additional 
written questions for the witnesses, which will be forwarded to 
the witnesses for their response. And particular areas that I 
wish we would have got into a little bit more is, maybe some of 
the labor laws or labor requirements and see the degree to 
which that maybe slows things down or affects something, as 
well I hope to give you some questions regarding the degree to 
which you feel that we are dependent on parts from other 
countries, and the degree to which that is a potential problem 
in the future.
    Mr. Grothman. But in any event, if there is no further 
business, without objection, the Subcommittee stands adjourned.
    [Whereupon, at 11:21 a.m., the Subcommittee was adjourned.]