by senator kaine and other members read we are in the midst of voting. i like to welcome her awareness as to the hearing this afternoon. frederick stefany deputy secretary. that is a mouthful. welcome mr. secretary. assistant secretary of the navy for research development and acquisition admiral william galinis systems command rear admiral troy mcclelland program executive officer for industrial infrastructure and ms. diana maurer in the government accounting office. thank you for your service to the nation and for the truly professional service of the men and women under your command. i also want to recognize the ranking member senator cramer and senator kaine and senator sullivan and i appreciate my colleagues joining us to hold this joint readiness hearing on this very important subject. we stand at a crossroads today. the nation shipyards are in dire need of modernization to make sure to maintain the current fleet in the fate of the future. encourage the navy has finally gotten serious about investing and critical infrastructure that has been for far too long. hawaii we are proud of her naval shipyard is a contribution to our fleet readiness and i want to be sure we received the resources we need to keep our fleet in shape. i look forward to hearing from you about how fiscal year 2023 plan to the navy has begun a once in a generation program at to modernize its shipyards under the shipyard infrastructure optimization program or buyout. this 20 or program has been sorely for many years and we have to get it right. we are relying on the simulation ever to develop the most efficient or productive operations at the public shipyards. last year for example we added $250 million to fund the dry dock naval shipyard due to onyx -- unexpected ballooning of the estimated cost costs. we need to understand and make sure we have good cost estimates on the projects we are undertaking. this is important at the pearl harbor navy shipyard that will require significant dredging and filling. we also need to understand how the navy is structuring the effort to improve the efficiency of the navy shipyards to deal with the ship maintenance challenges. it's not limited just to derive docs that. extends optimizing the work on the shipyards and production facilities and other improvements configurations for this is why i've been so focused on the waterfront prediction or -- production workforce and i want to make sure the navy remains -- we need to maintain if we have if we are ever to reach the fleet required to respond to future threats. our success is critical to that goal. i once asked the navy to consider how the program could be accelerated without impacting it and i look forward to hearing how we can work together to make sure it's fully successful. i will now go to senator cramer. >> thank you chairwoman hirono as well as senator kaine the ranking member sullivan for holding this hearing gently to discuss our range of important naval ship issues. let's face it it's not just the issue of the day that the issue of -- with regard to the navy. as i think about her naval shipyards it striking how intertwined it is in our nations history. in other words they are really old. for example naval shipyard near and dear to senator kaine's cain's heart was established and seized seven years later during the revolutionary war. in the 1790s the uss chesapeake one of the first six u.s. navy ships authorized by congress was built there. later the first dry dock in western hemisphere opened in 1833 known as dry-docked one and now it's a historical national landmark and still use today. it's 189 years old. suffice it to say our public shipyards have storied histories international at the structure just over 100 sold the poor condition of the shipyards as having a serious effect on fleet operation today. this is not a future problem but it's here now and one we must work together onto salford while there's a lot to discuss i appreciate chairwoman hirono's opening comments what she had to say. i've plan to focus my porsche on how congress can help in terms of authority's workforce development and funding. last point i'm hopeful that by the artisan of the structures working on the shipyard act many of whom are in the room today. i look forward to the testimony. thank you madam chair. >> thank you. to turn to senator kaine the chair of the ranking committee. >> thank you chair hirono. the subcommittees are fun but bs joint meeting and i want to thank the chair and the witnesses for being here today and for your dedicated service to the country. we have some friendly faces as we constitute support for neither shipyards and at the same time they have significant challenges regarding the implementation of siop especially the ability or inability to be on time for the budget. there's no doubt that these are necessary investments. big conditions of our shipyards in terms of infrastructure workforce and the aging shipyards as indicated by his mr. cramer we have to do our part in congress. when we look at how we execute the project to date i have some concerns and i also see some positives. on the concerned side how do we average a billion dollars a year in budget request of the next 20 years. the dry dock replacement in portsmouth in maine not virginia was estimated by the navy to cost $250 million in the cost doubled and that it increased another $250 million as a result the first contracts of today i'm particularly interested in hearing from you on how we build permanent lessons learned for the siop portfolio. the navy has invested well over the statutory required 6% investment program since 27 -- the work of the jail has never been more important it is today so i'm glad to have the testimony before the committee. the navy can modernize it's capital and shipyard operations the madam chair thank you for leading the charge in this hearing to discuss ocean -- in detail. >> thank you madam chair and i want to thank you and senator kaine and all of my colleagues for conducting this hearing, very important hearing and senator cramer's discussion of history and the latest movie midway. it's quite a good movie and it has got a scene where the shipyard i believe in hawaii did a miraculous job getting the yorktown back on line to go fight for the shipyard pointed out what senator cramer's really made history in that article battle that was one of the most important world war ii and one of the most important battles in our nations history. that's how important the topic of discussion is. this is ariba noted the average age of naval shipyard facilities are over 60 years old and the average dry dock ages approaching 100 years old. we have seen the readiness of shipyards weekend as decisions were made to prioritize ship building over ship maintenance. we initially developed the shipyard optimization bill of $21 billion over 20 years and that number has increased in the last few years and it's a topic i hope we can discuss in detail today. additionally according to the gao the navy cannot currently complete all required maintenance for aircraft carriers and submarines with our existing dry-docked capabilities. how can we balance these capitol investments with existing maintenance requirements? i think we find ourselves in a challenging situation as it relates to operational demands, ship maintenance and conditions of the fleet. not to mention the challenges of pacom theater and where china is with regard to its shipbuilding and maintenance capabilities. another issue that i think impacts is conventionally powered ships delayed overhauls of surface combatants that escort nuclear aircraft carriers and impact readiness. i believe one option in that regard is to conduct lower-level maintenance and not mall or private shipyards to free up more space for more complex maintenance at our larger private shipyards. i hosted the secretary of the navy a couple of years ago to our shipyard in ketchikan alaska that has enormous capabilities and let to do a lot of work for the u.s. coast guard. we have another shipyard in seward alaska that just completed $11 million worth of work for the navy rescue and salvage vessel delivered on time on budget and received outstanding -- this is an all hands on deck need and i think they are shipyards across america including my state that can participate and help out with regard to the challenges. thank you and i look forward to hearing from her witnesses. >> thank you sullivan and i suggest we all good see the midway movie because it highlights the importance of our public shipyards. we will hear from senator -- secretary stefany first. >> i will be reading a statement for all three of us. chairwoman hirono chairman kaine ranking members cramer and sullivan distinguished members of the subcommittee on behalf of myself vice admiral galinis and mcclelland thank you for allowing us to appear before you to discuss the infrastructure optimization program known as siop. modernizing british shipyards are the strength of our national security. we appreciate the strong support this committee and particularly the subcommittees have shown for infrastructure optimization. we are committed to maintaining transparency throughout the planning and execution of the siop. as mentioned siop is a once in the center opportunity to revitalize or nations public shipyards ensuring that these critical national security facilities are properly positioned to meet the current and future needs of the navy. it's about modernizing aging facilities equipment and dry docks that have served our fleet for generations in doing that modernization without disrupting our current maintenance that supports readiness. we also need to upgrade the spezza lovelies and equipment to support new classes of ships such as the aircraft carriers and the virginia block five sufferings. at the same time making the shipyards more efficient and more effective in maintaining all of our ships returning to bring them up to modern standards and ensure they are resilient to climate change at all this will take years of consistent funding instruction and leadership at all levels. the complete future years defense program for fiscal year 23 budget includes her strongest siop funding since the program was established. $1.7 billion with a sustained commitment of a $.3 billion. in fy23. their quest would support modernization of capitol equipment and will enable advanced to today's and require and then set -- environmental assessment. it will enable critical projects such as the start of the replacement of the dry-docked three at pearl harbor and the continuation of multimission drydock one in maine and dry-docked eight in portsmouth virginia as well as the planning of the dry dock it warmer to an in washington. multiple navy command play key role in siop's execution. navy facilities assistance program builds and maintains the shipyards. to ensure discipline oversight while maintaining a narrow to support the fleet the navy as treating siop as if it's a major to vent acquisition program. if established an executive officer late last year for developing an overall siop acquisition strategy and we are developing individual master plans that cost schedule and performance baselines for each of the shipyards to measure our progress as we go. we understand that for siop to succeed we must plan and execute by work without impacting the shipyard's ability to execute their mission. balancing seiyu's needs with the fleet and the shipyards is and will continue to be critical and an iterative process. we are committed to working as a team to ensure the program is -- and conversely the ship maintenance availabilities did not impact downstream siop projects. with governance and can assist in finding we will explore if this long-term edition. strengthening maritime dominance and without we look forward to your questions. thank you. >> ms. maurer. thank you very much and good afternoon chairwoman hirono chairman kaine and ranking member cramer sullivan and other members of the staff. it's good to be back before the committee today. over the past five years we have issued a series of reports about the poor condition of infrastructure at the navy shipyards. 37,000 skilled overhauled repair carriers and submarines at the subtleties that are important -- and using equipment that's well past its expect its service life. as was mentioned the shipyards of both well over a century ago to repair windows team powered ships. it's far from -- moving people equipment and parts necessary to repair some things like trying to drive a century old -- perhaps most significantly the navy does not have enough drydock capacity to meet the future maintenance needs of the fleet. in 2017 we found the navy the competence of plan for addressing the significant problems for the navy to its credit developed as siop created a program office to manage it and kept navy leadership informed of its programs. in late 2019 we took an in-depth look at siop and we thought it was a decent first step essentially a series of plans to improve each apparent that time the navy admitted 20 years and spend $21 billion to implement planned improvements. we found the initial cost estimate was unrealistically low. among other things at the 21 million-dollar price tag did not factor in inflation did not not include the cost to improve underlying facilities could be recommended to maybe improve its cost estimates to help manage the program can provide congress the information you need to help make funding decisions and those recommendations are still open. fast-forward to today today the navy has refined its planned identified resource needs and enhance leadership engagement. this provides a reasonable framework for eventually proving shipyard infrastructure but the reality of the shipyards have not significantly changed since her 2019 report. in a report that we should yesterday we found that overall facility conditions at all were shipyards remains for and among the lowest across the entire enterprise. the average age of equipment has increased up beyond its expected service life and the backlog restoration and modernization project has grown to $7 billion. the navy faces real time pressure. work class carriers and expanded virginia class submarines will need drydock capacity the navy currently does not have. her remains to be seen how the navy will specifically address these problems. proposed actions are complex and many years away from being fully implemented. we have a number of concerns about the siop limitations. first the navy's estimated date to complete the shipyard is 2020 fornes result we don't know the full details of whether the navy will upgraded optimize and how long it will take and what it will cost. second as was mentioned the estimated cost of the first drydock improvement projects have grown from just under 1 billion to nearly $6 billion through this does not bode well for the future cost of the 11 other projects. we are concerned the increasing guide. drydock cost could impede other improvements. dry dock should be a top priority but they aren't the only brady. as maintaining that top level support will be vital because this effort spans many administrations in many congresses. gao will continue our dependent oversight of shipyard improvements. later this month we will start her next review focusing on the navy's cost estimates and schedule for siop projects. our continued oversight will help inform congress and enhance the navy's efforts to improve its shipyards which are vital for ensuring naval readiness. madam chairwoman and mr. chairman thank you for the opportunity to testify this afternoon and i look forward to your questions. >> admiral mcclelland are you the person that is charged with overseeing siop? >> yes, senator. i am admiral jorge mcclelland i'm assigned the opposite infrastructure in siop is in my portfolio. i will note that i've worked very closely with the naval facilities engineering systems command the construction agent for design and construction and naval sea systems command. >> you are the point person to oversee siop? >> yes senator, i am. mao one of the major issues leading to the modernization program and that is a vast difference between the cost estimates is a prime example of the difference between the estimate and what it would cost to modernize those shipyards and what the contract goes out for it. what is being done or has been done to make sure as you embark on the naval shipyard modernization that the estimates are accurate? >> thank you senator for that question. a mechanism for early contract engagement has been installed by the construction agent naval facilities engineering systems command and specifically it's an acquisition strategy that allows us to have early engagement with multiple contractors so we can discuss means and methods and talk to them about the cost and implement lessons learned as we develop the program and that has been done for the pearl harbor work senator. >> do you think that is a lesson learned from the portsmouth example? >> thank you senator. i would hope that the navy has learned lessons in terms of cost growth. >> future microphone on? i'm having a little difficulty hearing you. i would hope it's clear from the navy's reporting that they have listed a number of -- and one of the items that they are learning lessons from the portsmouth project as well as others. that's something we will be looking into much more depth and we start her new review and schedule estimates for some of the larger siop projects. i would note as well there has been a significant cost growth for the pro harper project as well which is a critical capability that is required and there has been significant cost growth as well as increase in the overall scope. >> mr. stefany in view of the challenges that u.s. had in making sure that our cost estimates are accurate and in the 2023 budgets 1.7 billion going forward what i heard today was 82 billion for a siop project. do you think that's going to be enough? and do you see any challenges in the cost estimates? >> one of the other lessons we want to bring up was giving the design much more measure before you put out the formal estimate and that's a lesson we learned as well. the projects and the designs are mature enough to wear confident that there will be continued growth in those projects and do we have enough funding to do the work we have planned for those five years? yes maam. i think we'll talk about accelerating. guess in the five years we have enough money to do the work we need to do. >> i think we are going to be very much focused on making sure that there's enough funding to proceed with siop. public shipyards are counting on us to be able to move forward and i have been very focused on the waterfront facility to a don't quite understand why that production facility which allows the workers to be more efficient in the work that they do i don't understand why the part of the modernization is not happening at the same time as the drydock facility. can you comment very briefly? i'm running out of time. >> in the previous budgets like we had to make a hard choice to push the design in the planning of the waterfront facility off because of budget constraints in the previous cycle and now we are looking to see if we can bring it back. the decision to post the facility out two years down the drydock itself. looking into the next budget cycle can we bring this forward and try to lighten them up as i'd really be like to have them lined up in a perfect world. >> the maurer testified a lot of the equipment is -- and if we don't have the waterfront facility next to or near worth the drydock is we better make sure equipment they are using is -- i would like to recognize senator cramer. >> thank you chairwoman and thanks again to all of you. sticking with