THURSDAY, MARCH 19, 1987. RESEARCH, DEVELOPMENT, TEST AND EVALUATION, NAVY WITNESSES RICHARD RUMPF, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF THE NAVY FOR RESEARCH, ENGINEERING AND SYSTEMS VICE ADMIRAL PAUL MCCARTHY, UNITED STATES NAVY, DIRECTOR OF RESEARCH, DEVELOPMENT AND ACQUISITION MAJOR GENERAL RAYMOND "M." FRANKLIN, UNITED STATES MARINE CORPS, DEPUTY CHIEF OF STAFF, RESEARCH, DEVELOPMENT AND STUDIES JOHN KEANE, DIRECTOR, SUBMARINE-ASW PROGRAMS MARVIN MOSS, DIRECTOR OF NAVAL RESEARCH P.A. SELWYN, DIRECTOR OF NAVAL TECHNOLOGY REAR ADMIRAL PETER DEMAYO, ASSISTANT COMMANDER FOR CONTRACTS, NAVAIRSYSCOM INTRODUCTION Mr. CHAPPELL. The Committee will please come to order. This morning the Committee will hear testimony regarding the Navy RDT&E budget request for fiscal year 1988. That request totals $10.5 billion, which is eight percent real growth over fiscal year 1987. The hearing today will focus on the Navy's RDT&E acquisition policy due to major concerns in this area. However, the Committee will also cover major programs and priorities including ASW investment, the SSN-21 submarine, the V22 aircraft, and Marine Corps programs. The Committee welcomes back as principal witnesses Mr. Richard Rumpf, Principal Deputy Assistant Secretary for Research, Engineering and Systems; and Major General Raymond Franklin, Marine Corps Deputy Chief of Staff for R&D. The Committee also offers a special welcome to Vice Admiral Paul McCarthy, who heads up Research, Development and Acquisition for the CNO's office, and who has previously appeared before the Committee as Director Aviation Plans and Requirements Division. We welcome each and every one of you and we will put your statements, if you have statements, in the record and invite you to summarize. You may proceed. SUMMARY STATEMENT OF MR. RUMPF Mr. RUMPF. Thank you, Mr. Chairman. As we sit here, I am proud to tell you that only a few days ago the Secretary signed out a reorganization plan which puts the three of us sitting here in positions working for the New Assistant Secretary, who will follow Mr. Paisley, as part of the reorganization that resulted from Congressional guidance. This action will further improve the efficiency of our organization which we feel already is working well together. I would like to submit for the record the posture statement of Mr. Paisley-which your staff has received and will be part of the record. Mr. CHAPPELL. It will be received in the record. Mr. RUMPF. This morning Vice Admiral McCarthy, Major General Franklin and I have short opening remarks after which we would like to get into the questions so that we can answer, to the greatest ability, your questions and not provide responses for the record unless absolutely necessary. Accordingly, I have brought with me key people from our staff to address specific issues that we know that you are interested in. Included are such people as the head of contracting in NAVAIR, Rear Admiral Demayo, who will be one of our key witnesses this morning on issues relative to tooling and test equipment and contracting issues. TWO YEAR BUDGET Before we begin today, however, I would like to make an observation. For the first time in my nine years in the Navy Secretariat, I have seen something in the procedure that we began this yeartwo-year budgeting-which is a very positive step that we hope the Congress would fully endorse. I believe that the process that we have gone through internally has led to a more stabilized approach to fully funding all of the programs. This was, as you recall, one of the Carlucci Initiatives some years ago. Two year budgeting efficiently puts into place effective contracting and program management, streamlining of specifications and better management control that will lead a more efficient R&D program for the Department of the Navy. That efficiency and stability, I believe, will be the key in the future to providing the R&D needs that will support the fleet as programs roll from R&D into procurement. I would like to take a moment to put on the record and solicit your support for the tremendous contribution and influence on the present and future of the Department of the Navy Research and Development Test and Evaluation budget that was made by the two individuals who are not present here today, specifically Mr. Melvin Paisley, the Assistant Secretary of the Navy for Research Engineering and Systems; and Vice Admiral Albert Baciocco, Director of Research, Development and Acquisition in the Office of the Chief of Naval Operations. EFFICIENCIES IN CONTRACTING Mr. Paisley's influence has led to efficiencies in contracting, transfer of cost risk from government to industry and full competition from R&D through procurement. These initiatives are leading toward fulfillment of one important initiative-the full funding of R&D programs. With the fixed price-type contracting that we are putting into place in major programs, and the fact that we and the contractors are being disciplined by the approach that we are taking to cost control, we believe that we are able to avoid cost overruns which we have seen in the past using cost-plus type contracts. We end up with a more efficient and cost-effective way of doing research and development. This is because the risk is assessed to be moderate to low when we enter into fixed price type contracts. These are the types of contributions on the acquisition side that we all have recognized as the key tools of Mr. Paisley, who has devoted his six years here with tremendous efforts to modernize our acquisition policy. PROGRAM DOCUMENTATION Vice Admiral Baciocco likewise was instrumental in demanding the full support of program documentation ranging from operational requirements to the contact that we have with the Office of the Secretary of Defense, the Decision Coordination Papers. His regime has led us to have full documentation supporting each of the programs that we bring forward to you for review each year. He also initiated the very important transition program line which we call the Advanced Technology Demonstration. This program pulls the most promising exploration development technology forward into either one, two or three-year maximum demonstration efforts which are followed by the commitment by the platform sponsors to incorporating those improvements and those demonstrations, assuming they were successful into their platforms. We have done away with, the dead ending of new starts. If something looks promising and meets the requirement, there is not a hiatus between the time it is funded in the advance tech demo line and the time it becomes a reality as a fleet-supported line through a platorm sponsor. Both men together have brought about a drastic reduction in the number of projects, resulting in better management in the budget, starting with 523 projects in 1983 to 387 in FY 1988. That is another testimony to the streamlining and consolidation for efficiency that these two gentlemen were responsible for. Therefore, I hope you will join me in acknowledging the tremendous contribution that each of these gentlemen made to the Department of the Navy and to the Department of Defense in general. Mr. CHAPPELL. Mr. Secretary, we commend you for bringing that to our attention and join you in praising these fine gentlemen. They are great Americans and have made an unusual contribution to the Navy and to our country. Mr. RUMPF. Thank you, Mr. Chairman. I would like to turn the podium over to Vice Admiral McCarthy. [The statement follows:] |