JIM WEBB VIRGINIA

WASHINGTON OFFICE:

WASHINGTON, DC 20510 12021 224-4024

COMMITIEE ON ARMED SERVICES

COMMITIEEON FOREIGN RELATIONS

COMMITIEEON VETERANS' AFFAIRS

JOINT ECONOMIC COMMITIEE

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WASHINGTON, DC 20510-4605

December 23, 2009

The Honorable William J. Lynn III Deputy Secretary of Defense

The Department of Defense

The Pentagon

Washington, DC 20301

Dear Secretary Lynn,

Before the Quadrennial Defense Review completes its consideration of the Navy's proposal to homeport a nuclear-powered aircraft carrier in Mayport, Florida, I wish to bring several important issues to the attention of those officials who are responsible for assessing the Navy's scheme. For reasons summarized below, I am convinced more than ever that homeporting a carrier in Mayport is fiscally irresponsible and strategically unjustified.

Fiscal Responsibility

As I said in my letter of June 11, during the Navy's fiscal year 2009 budget testimony, Admiral Roughead, the Chief of Naval Operations stated: "Future shore readiness ... is at risk." I asserted to you that shore readiness is already at risk, citing the Navy's acknowledgment that it had a $28 billion backlog in restoration and modernization for the total Navy shore infrastructure. In May, it reported a $1.3 billion funding shortfall for the four naval shipyards. In fact, I have now learned that the Navy substantially understated those backlogs at the time.

This month, the Navy confirmed that its total fiscal year 2009 restoration-modernization backlog for shore installations totaled $36.6 billion. The backlog at the naval shipyards totals $3.0 billion, a sum that includes a $907 million shortfall at Norfolk Naval Shipyard. I have enclosed a copy of the Navy's response to my information request.

The Government Accountability Office (GAO) is currently investigating the shipyards' material condition to determine how their deterioration is affecting productivity, quality of work, safety, and worker morale. I am confident the GAO's findings and recommendations will assist Congress exert more rigorous oversight of the Navy's shore readiness. We do not need the GAO's findings, however, to conclude that responsible stewardship of taxpayer dollars demands that the Navy first maintain its existing facilities properly before investing what could be up to $1 billion to build a new Controlled Industrial Facility in Mayport to support a nuclear-powered aircraft carrier.

The Navy is not simply deferring needed maintenance and repair of its nuclear-support shore infrastructure; it also is apparently delaying critically needed military construction. I understand that the Navy has deferred the construction of a $74.6 million Controlled Industrial Facility (ClF) at Norfolk Naval Shipyard from fiscal year 2011 to 2012. This facility, which will replace an antiquated building that is more than 40-years old, is needed to perform depot-level maintenance and refuelings for the Navy's nuclear-powered aircraft carriers and submarines more safely and efficiently.

The Naval Nuclear Propulsion Program has identified significant safety, health, productivity, and other deficiencies with the shipyard's existing facility. It is inconceivable to me that the Navy would propose to build a new CIF in Mayport while delaying a critically needed replacement CIF at Norfolk Naval Shipyard. I will firmly oppose any Navy authorization or appropriation request to do so.

Mayport Dredging

The administration's fiscal year 2010 defense budget request included authorization of an appropriation of $46.3 million for the dredging of the channel and turning basin at Naval Station Mayport, Florida. During congressional consideration of this request, you and the Secretary of the Navy confirmed that this dredging project is not associated with the carrier homeporting proposal for Mayport. It is important that the Quadrennial Defense Review be informed that there is no linkage between the two issues.

Last April, when Secretary of Defense Gates announced key decisions associated with the president's fiscal year 2010 defense budget request, the Navy called me to confirm that its military requirement for dredging is to permit safer routine and emergency port visits by an aircraft carrier by lessening the current severe restrictions associated with the existing water depth in Mayport's channel and basin. You amplified this rationale in your August letter to me, noting, "Secretary Gates has taken the prudent step of seeking funding for the dredging of the Mayport channel within the fiscal year 2010 budget to provide an alternative port to dock East Coast earners in the event of a disaster."

Conferees for the fiscal year 2010 defense authorization bill from the House of Representatives' and Senate's armed services committees met in September and October to reconcile differences between each chamber's bill. During their consideration of military construction projects, the conferees recognized that confusion could exist regarding the dredging project owing to erroneous assertions that it would pave the way for homeporting a carrier in Mayport.

As a result, a manager's statement accompanied the Fiscal Year 2010 National Defense Authorization Act that was signed into law by President Obama in October. It states, in part, that the conferees authorized funding for the project based on assurances provided by the Secretary of the Navy and the Chief of Naval Operations that the dredging is needed for current operational considerations irrespective of a final decision on carrier homeporting at Mayport. Of note, the manager's statement says:

"The conferees emphasize that the inclusion of an authorization for dredging at NS Mayport is not an indication of conferee support for the establishment of an additional homeport for nuclear aircraft carriers on the East Coast, or intended to influence the ongoing Quadrennial Defense Review, which may include a recommendation on the establishment of a second East Coast homeport for nuclear aircraft carriers. Furthermore, the conferees note that this funding is provided solely to permit use of Mayport as a transient port, and that any potential designation of Mayport as a nuclear carrier homeport will require future authorizations from the Committees on Armed Services of the Senate and House of Representatives."

Military Risk

Last year, when I was briefed on the carrier homeporting proposal, the Navy said that the risk of a catastrophic event (natural or man-made) closing Hampton Roads is "small." The Navy's comparative assessment of Hampton Roads and Mayport concluded, "The most compelling strategic rationale to homeport a CVN/LHA in Mayport is as a hedge against a catastrophic event in Norfolk." Pressed during a congressional briefing to identify a precise threat warranting this conclusion, the Navy stated Mayport had a "slight advantage," but there was not a clear, credible threat (i.e., natural disaster, terrorist attack) distinguishing one homeport from the other.

The Navy has failed to provide any credible threat-based intelligence assessment that justifies the rationale for its planned actions. Dredging Mayport's channel and turning basin so that it can accommodate a nuclear-powered aircraft carrier for an unlikely emergency port visit clearly obviates the need to invest up to $1 billion to build duplicative nuclear-support infrastructure for carrier homeporting,

Contrary to the low risk of a natural Of man-made catastrophic event closing Hampton Roads, the Navy continues to incur significant industrial-safety risks every day at Norfolk Naval Shipyard by failing to maintain it properly and by not funding necessary military construction projects with the priority they deserve. The consequences of the Navy's failure to maintain the material condition of the shipyard properly faUs on the backs of the yard's dedicated work force.

During her confirmation hearing before the Senate Committee on Armed Services in October, Christine H. Fox, your department's director of cost assessment and program evaluation, testified that sound cost-benefit analysis and technical risk assessments were needed to manage complex acquisition programs properly. "I believe that sound and unbiased cost and schedule estimates, including thorough risk assessments, are absolutely essential for effective acquisition decision-making and oversight," she responded to one of the Committee's advance policy questions. The same principles should guide the Quadrennial Defense Review's assessment ofthe Navy's homeporting plan.

Statements by Adm. Robert 1. Natter, U.S. Navy (Retired)

In November, I was stunned by USA Today's revelation that the Department of Defense and the military departments are paying retired flag and general officers extraordinary salaries under contract to serve as "mentors." It was gratifying to learn that Secretary of Defense Gates has promised a full review of the program. A provision in the Fiscal Year 2010 Defense Appropriations Act also requires the DOD Inspector General to investigate the program. I promise vigorous action to correct what I see as a blatant conflict of interest and flagrant waste of taxpayer dollars for officers who are already well-compensated for their military careers with generous pensions.

In this regard, I wish to be informed if retired Admiral Robert 1. Natter, the former commander of the U.S. Atlantic Fleet, met at any time with officials or officers participating in the Quadrennial Defense Review's consideration of the Navy's carrier homeporting proposal. If so, I ask that they be directed to disregard any statements he made or information he provided.

During the past two years, Natter has firmly advocated the Navy's carrier homeporting proposal for Mayport. Unfortunately, press reports quoting his views do not generally reveal that he is a paid lobbyist for the state of Florida and the City of Jacksonville, Fla. In addition to his Department of Defense contracts in the "four-star-for-hire" mentor program, USA Today reported, "He [Natter] is also a defense consultant and a board member of weapons-maker BAE Systems. From 2004 through 2006, his firm received $1.5 million from the state of Florida to lobby the Navy and Congress on base-closing decisions, federal lobbying records show."

The Senate Office of Public Records documents that the City of Jacksonville paid Natter's finn $30,000 through the third quarter of 2009 to support the city's military advocacy and lobbying efforts. It would be totally inappropriate for Natter to leverage his retired status, special access, and prior service to lobby any officials participating in the Quadrennial Defense Review.

Hampton Roads Military and Federal Facilities Alliance

The Alliance, an organization of elected officials and civic leaders that includes the mayors and chairs of the 13 cities and counties that make up Virginia's Hampton Roads region, recently wrote me to provide its assessment of a Congressional Research Service report on the Navy's carrier homeporting proposal. A copy of the group's letter is enclosed. The Alliance poses important questions, and I request that they be addressed during the Quadrennial Defense Review's evaluation of the Navy's plan.

In closing, I wish to emphasize that there is a well-defined need to sustain Naval Station Mayport as an East Coast homeport for the Navy. As the Navy's own studies reveal, however, there are other more fiscally responsible and strategically sound homeporting options than an aircraft carrier. The assignment of a large-deck amphibious ship or added numbers of the Littoral Combat Ship, for example, would be far less expensive, be more strategically responsive to the operational requirements of the U.S. Southern Command, and do more to provide higher levels of contracted maintenance work to sustain Jacksonville's ship-repair industrial base.

I appreciate your consideration of these matters.

Sincerely,

,WJ)6

Webb

Enclosures:

1. Department of Defense Information Paper of 18 December 2009

2. Hampton Roads Military and Federal Facilities Alliance letter of November 19,2009

Copy to:

Undersecretary of Defense (Policy) Secretary of the Navy

Chief of Naval Operations

DEPARTMENT OF DEFENSE INFORMATION PAPER

SERVICE/AGENCY: U. S. NAVY

SUBJECT: RESTORATION/MODERNIZATION (RM) BACKLOG AT NAVY SHIPYARDS

DATE: 18 December 2009

1. QUESTIONIREQUEST: Confirm the current RM backlog Navy-wide and at the four naval shipyards. If there is any change for the shipyards (between May 2009 and now), he has asked the Navy to break it out by yard.

RESPONSE: The following are confirmed RM backlogs at the four Naval Shipyards as reported in the Navy Facilities Asset Database as indicated:

30 Sep 09 Mid-Sep 09 May09Cong
GAO RFI
Request
Total Shipyard RM backlog $3.0B $3.0B $1.3B
Puget Sound NSY RM backlog $802M $802M $327M
Norfolk NSY RM Backlog $907M $887M $451M
Pearl Harbor NSY RM Backlog $817M $817M $313M
Portsmouth NSY RM Backlog $513M $507M $206M Note: Backlog includes Mission & Support Facilities

The RM backlog (OMN, OMNR, NWCF, MCON, MCNR, RDTEN, FHN) for the total Navy shore infrastructure on 30 Sep 09 was $36.6B.

2. QUESTIONIREQUEST: Provide an explanation of the specific issues that account for the disparity.

RESPONSE:

In June 2008, Senator Webb's MLA asked the question "What is the funding backlog for Navy Sustainment, Restoration and Modernization (SRM) requirements at each of Navy's four public Shipyards?

- The Navy response, dated August 2008, stated the Navy's SRM backlog for OMN funded Special Projects for the four shipyards within the Controlled Industrial Areas is $791M.

In May 2009, Navy responded to a POM-lO Request for Information (RFI), "What is the amount of the Navy's FYI 0 funding backlog in Sustainment, Restoration, and Modernization projects at the 4 naval shipyards, by yard."

1

Enclosure (1)

- Navy's response for the unfunded facilities requirements for the four Navy Shipyards:

PSNSY: $327M NNSY: $451M PHNSY: $313M PNSY: $206M

Note: This information was for the Controlled Industrial Areas, Shipyard Mission Facilities, and Shipyard Support Facilities. For each shipyard, regretfully only the larger of restoration or modernization backlog was reported, which significantly understated the actual backlog. The response should have included the summation of both the restoration and the modernization backlog.

In October 2009 Navy was asked by GAO to provide the total restoration and modernization backlog by Shipyard. Navy provided the following information as of mid-Sep '09.

Shipyard Modernization Restoration Total
PSNSY $297M $505M $802M
NNSY $364M $523M $887M
PHNSY $489M $328M $817M
PNSY $288M $219M $507M
Total $3.0B 2

November 19, 2009

The Honorable James Webb

U.S. Senator, Commonwealth of Virginia 144 Russell Senate Office Building Washington, DC 20510

RE: CONGRESSIONAL RESEARCH SERVICE REPORT FOR CONGRESS

Dear Senator Webb:

On October 21, 2009, the Congressional Research Service (CRS) released its report "Navy Nuclear Aircraft Carrier (CVN) Homeporting at Mayport: Background and Issues for Congress." While this 41 page document provides a comprehensive summary of the background leading to the January 2009 Navy Record of Decision (ROD) to homeport a CVN in Mayport, and a basic summary of issues for Congressional consideration, we believe a number of critical questions remain unanswered. Specifically:

• What is the total cost to create the required nuclear maintenance infrastructure, port facilities, housing, workforce development, family support, tactical jet aviation maintenance support, etc. to accommodate a CVN and her crew?

• How is true ucapability" built at Mayport to sustain CVN horne porting beyond just the infrastructure (l.e, qualified nuclear workers)? How much will it cost?

• What does the workforce do when the CVN is deployed?

• What is the impact on dwell ratio for sailors when major overhauls/refueling will still be required to be accomplished at Northrop Grumman Newport News, Virginia?

• What capacity exists for follow-on tours ashore in the Mayport area for personnel transferring from the CVN at the completion of their sea assignment? Specifically, large numbers of tactical aviation assignments for aircrew and maintainers are not presently available in Mayport.

• What is the cost to move a Navy air wing, complete with an Aircraft Intermediate Maintenance Department from Oceana, Virginia to Mayport, Florida and back again each time the ship deploys and several times during the wworkup cycle" prior to deployment?

• What overarching Navy strategy document necessitates creating a second east coast CVN homeport?

• The Navy argues that loss of a homeport in Norfolk due to a catastrophiC event would require a 12,700 nautical mile transit around South America to reach the

430A World Trade Center • Norfolk, Virginia 23510 • (757) 644-6324

Enclosure (2)

.. I·

CONGRESSIONAL RESEARCH SERVICE REPORT FOR CONGRESS November 19,2009

Page 2

closest CVN harbor in San Diego because CVNs are too large to pass through the Panama Canal. However, current efforts to widen the canal to accommodate massive container ships will result in changes to all deep water ports in the U.S., including dredging shipping channels to 50 feet. What impact will post-Panamax have on the ability of U.S. ports to accommodate CVNs on a temporary, contingency basis? Will the widened canal and new third set of locks allow transit of CVNs through the canal?

• Strategic dispersal of the Navy fleet is not a new concept. It was attempted during the Reagan administration based on a strategic plan which envisioned a 600 ship Navy. What was the cost of the strategic dispersal effort in the 1980's? How are facilities created under that initiative being used today?

• What is the bottom line figure for creation of a second CVN homeport in Mayport, Florida?

We believe the answers to these questions are essential to inform Congressional action on the Navy's desired creation of a second east coast CVN homeport. Accordingly, we recommend requesting the Congressional Research Service answer these questions. We believe the answers will clarify the issues and provide solid information on which to base critical national defense decisions.

The nation and the Navy have operated nuclear carriers for 50 years without the need for a second east coast nuclear carrier homeport. The Navy has yet to present a security argument for investing in one now. We continue to believe the creation of a second east coast nuclear carrier homeport is, at its core, a political matter which would cost American taxpayers billions in earmarks primarily for the economic benefit of the State of Florida and the cities of Jacksonville and Mayport.

We appreciate the strong commitment of the entire Virginia delegation in this matter. We stand ready to assist in your legislative engagement.

Sincerely,

/JIdt~

~~WlL4(

Molly Joseph Ward

Mayor, City of Hampton Co-Chair, Hampton Roads

Military & Federal Facilities Alliance

William D. Sessoms, Jr. Mayor, City of Virginia Beach Co-Chair, Hampton Roads

Military & Federal Facilities Alliance