John Young DWG transcript: EPX, CSAR-X, F-22

Q: Can you give us some general outlines of which areas you're talking about when you say that they should be scrutinized? A little more detail to flesh out your thinking.

A: I'll give you one, not as a forward looking or future issue, just as a today issue. I had a meeting last week on aerial common sensor and EPX which is the Navy's replacement for the EP-3. 

I had that as a joint meeting because a few years ago as a Navy acquisition executive with the support of Admiral Clark who was a great team mate to work with, we joined those two programs.

The Navy said I'll give some ground here to be joint with the Army to buy roughly comparable capability. But not all the Navy requirements for sure get met when you do that.

Now obviously ACS was basically a disaster, from my point of view, and sure enough, the recovery from that is no longer a joint program.

It's a Navy, separate EPX program with some Navy unique requirements that say why they can't buy the Army's ACS and the Army has unique requirements that says what won't, and I want to have an intense discussion about doing that jointly, which is the hardest thing to do in the department.

Then I think there's a bigger macro discussion like you're raising, because these are modest numbers of airplanes, 20s and 30s. And when you add up the development and the purchase price of these airplanes, they are also 20 and 30 billion dollar kind of packages.

These airplanes on an aggregate cost, I guess a procurement average unit cost where you include the development and the purchase price are $500 to $700 million airplanes.

How many times can the department buy in pockets of 20, 30, 40, 50 airplanes worth of capability for $20 to $30 billion? I think those are the kind of issues that are getting attention right now and will continue to need attention.

In the end the department may decide this is exactly what we have to do. We have to pay the price to have that capability to make sure our warfighters can succeed. But I think it merits more debate than rubber stamping unique service requirements.
 

Q: The Air Force has a couple of operational communities that would desperately love to get their hands on anything. The combat search and rescue community needs a CSARX. They probably don't care which one. The mobility communities are in desperate need of a replacement for the oldest KC-130s, they probably don't care which one. The Air Force picked a winner for both of those programs. Whether or not the Air Force picked the right airframe, do you think the contractors have become too eager to resort to protests on these programs and throw things into limbo?

A: ... I'd start back from the beginning premise of your question. You said a very important thing. I think you said community. I do find an intensity of community in the enterprise that probably is going to have to be revisited by the new leadership so that you have an enterprise view instead of a community view. Right now we're doing pretty good on the community view and I think you've heard Secretary Gates say that. I'm not so sure, and I said this internal to the building. You start with the premise CSARX community is in desperate need. Well, we have a lot of assets that can be used in rescue missions with planning, so I don't necessarily just automatically rubber stamp the CSARX requirement. I don't know that that community has to have its own set of assets for the occasional rescue mission. We have new things coming one line like V-22s and other things that can be pressed into service. When we do our rescue mission we're going to do a come as you are operation anyway, unless all the CSAR assets are prepositioned for that. So I don't start with some of these starting premises. I think that's one of the things the enterprise has to do much better is from the beginning question the requirement.

 
Q: Two separate questions. One is a budget question. How is the Pentagon trying to [inaudible] supplementals? I'm asking because, for example, the Army has been [inaudible] supplementals [inaudible] on the FCS [inaudible] program. Obviously the next administration [inaudible] there's going to be huge [inaudible]. How are you trying to [inaudible] big programs [inaudible]? My second question is on the F-22, how concerned are you about the [inaudible] problems. I understand they weren't discovered up until a while ago, and [inaudible]. But [inaudible] maintenance on the F-22 [inaudible].

A: I'm not going very far on, because I already opened the door and I feel like others have opened the door, I told you that at least the budget template that will be left behind, because it's going to be subject certainly to change and review, has increased the top line from 9 to 13, in the '10 to '15 budget the top line was increased relative to the numbers you're familiar with in 9 to 13.

A significant portion of that increase was to try to recognize the higher pace of operations globally, largely associated with activities to combat terrorism and other things. And essentially put some portion of the supplemental costs in the base. That's one of the buzz words in the building is sup to base. And some amount of supplemental to base was accommodated because of the top line. The one thing that's not realistic is to say you're going to continue all the current operations, have no supplemental, and do all that within the base budget, I think that would be extreme, although I want to be clear, there are, I already said, there are some programs and I think some scrutiny that can be brought to bear to many things in the defense budget. But that is how the department is dealing with trying to reduce some of the supplemental demand and make sure the enterprise budgets in the base budget for a core set of activities and accepts that that core set of activities is probably going to include some heightened level of presence, some higher tempo of operations through depots because we're using the equipment harder, and all those other things.

F-22. I'm not as familiar with the corrosion per se other than maybe at a macro level to tell you there's been this, it's not unlike the community discussion. There's obviously this level of discussion in support about F-22 and the Congress has added money for advanced procurement to buy more airplanes. And I don't think that debate's informed by all those facts. The recent mission capable data for FY2008 on F-22s had a mission capable rate somewhere in the 62 percent range. I think that's troubling. 

Follow-on operation tests in 2007 raised operational suitability issues and noted that the airplane still does not meet most of its KPPs. It meets some, but not all. Key performance parameters. The trend in those operational tests, there was an IOT&E, a follow-on test I think in 2004 and a follow-on test in 2007. The trend is actually negative.

The maintenance man hours per flying hour have increased through those tests. The last one was a substantial increase. The airplane is proving very expensive to operate, not seeing the mission capable rates we expected. And it's complex to maintain.

In the Air Force I did talk about this a little bit yesterday in the hearing, the Air Force had planned and expected to have kind of a two-tiered structure where some of the earlier jets were not fully capable jets, not to the block 35 or increment 3.2 configuration which provides important capabilities. I think something like 100 jets would kind of be lesser models. So one thing that's in the budget and I talked about yesterday is to bring more of that fleet, most of that fleet, to a common, high end, capable configuration. But the cost of that is $6.3 billion of R&D. This is in a platform we've already developed. We're going to spend six billion more of R&D to engineer the 3.2 upgrade for the software and the changes in the jet, and then about $2 billion to modify on the jets. That's $8 billion more, and $8 billion I think needs to be spent in order to make sure the 183 airplanes we have will be highly capable fighters.

Those discussions need to be had before I think you talk about buying more jets. You still might have that discussion. That's really a requirements and a capability discussion that the Air Force and OSD has to have, and there are lots of studies, as people said yesterday. But I think people are executing a fair amount of discipline and just making sure the airplanes that we've already made a substantial investment are capable, and I'm not so sure there still isn't more work to do there. You've highlighted corrosion. I would highlight in general the maintenance on the airplane is too high. They're struggling with some of the LO and other issues, and there's clearly work that needs to be done there to make that airplane both capable and affordable to operate.

Q: Do you have a cost per flight hour on the F-22 currently?

A: I don't with me.

...

Q: The F-22 program. Why not end it?

A: ... F-22, pretty simple answer. Secretary Gates is the Secretary of Defense. He went to the Congress. He knew the Air Force had some disagreements with the OSD studies and some concerns and he felt like it was fair and reasonable for the next administration to be able to review this issue, so he directed that we create a reasonable bridge to allow them to make that decision. You can take any other sets of course of action. I tend to agree with him. 

There is a new administration that's going to have to lead the country in the years ahead and they've got to take responsibility for preparing the nation four years beyond that. The things I'm doing today are really, as I told you, one the, success of them will play out in one to three years from now, but the capability they deliver will play out five to 20 years from now. The next administration has to assume that role and in assuming that role they need to make a decision about F-22 and I think it's fair and reasonable.

Q: Up until the time when Wynne and Moseley left, the Air Force still had a validated requirement for 381 F-22s. Does it still?

A: I don't know the exact state ... [inaudible] ... There is an answer to that question. I am not ducking that. I just don't know the answer to that. I can tell you the Air Force--I said this at the hearing yesterday--the deputy had the discussion with the Air Force about this. He said to Air Force, 'Do you or don't you require more F-22s?' And they couldn't answer that question. They said, 'We are reviewing this issue.'" 

Q: When was this? 

A: About two weeks ago. 'We are reviewing this issue so we can have a solid recommendation to support this new Presidential certification.' So the fact that they couldn't answer the question then, I think, is troubling, and I'll be honest with you the deputy said that to them. He said ...

Q: You are talking about Schwartz and Donley?

A: Well, Gen. Schwartz wasn't there. I don't want to talk about who was there. 'Air Force leadership'--whoever wanted to come to the meeting. Whoever the Air Force deemed appropriate to meet with the deputy. The deputy said, 'Where is the Air Force on this?' And the Air Force said 'We are looking at this so that we can have a recommendation.' And the deputy said, 'Well the transition team is going to show up shortly and you need to have a recommendation.' But the other thing to be clear: the building is filled with requirements that are not met, that aren't funded, that aren't addressed.... [inaudible] ... 

And I would tell you in building POM '10--and I have said this publicly--the Air Force had the hardest time getting in balance. I think the Air Force will really struggle to find a way to address all of the demands .... [inaudible] ... And I see a refreshing responsibility about that shown by Gen. Schwartz and Mike Donley. They understand the Air Force has accepted the mission responsibilities in space and they have to resource space. They have mission responsibilities for airlift and tankers and they have to meet that. And they have mission responsibilities in force application and tactical aircraft and they've got to meet those. They have got to balance across all of those. And I think Gen. Schwartz is taking a very disciplined approach to this. It's great. He has got to have some time to get his feet on the ground, but he is going to do a great job.