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NAVY LIEUTENANT CAROLINE HUTCHESON: Good afternoon. I'm Lieutenant J.G. Caroline Hutcheson, public affairs officer for Rear Admiral Joe Mulloy, deputy assistant secretary of the Navy for budget. He'll be briefing the fiscal year 2014 budget submission for the Department of the Navy. If you have any questions following the briefing, please let me know.
Ladies and gentlemen, Admiral Mulloy.
REAR ADMIRAL JOSEPH MULLOY: Thank you. Well, good afternoon, ladies and gentlemen. I am Rear Admiral Joe Mulloy. And I first want to open with I am a submarine officer. And it's important I'd just highlight 50 years ago today, at 9:17 in the morning, the USS Thresher was lost 300 miles off the coast of Cape Cod which certainly profoundly affected our service and affected safety within the Navy. And although I did not personally know someone on the crew, I knew people -- and people that live in Kittery. And when I qualified in submarines, I was up there and met a number of people who had worked on the ship. Certainly a profound issue for all of us, and something to remember. Today on submarine bases across the Navy, at 9:17, there was a moment of silence. And I just needed to be part of that process.
So first slide, I think you've already heard before from Mr. Hale and also the chairman that there's a continuity of this budget, is it's the second year in the strategy, and as the chairman discussed, it's on a path to the force of 2020. And the Navy certainly was part of this whole strategy development. And as we do this within the Navy, as we develop our budget in the summer that goes to the fall and then it finally becomes the president's budget, we're influenced at various paths along the way.
Coming out of '13, we knew the 10 areas of missions of the strategy here laid down by the president and the secretary of defense. We also have the guidance that we get from the CNO [Chief of Naval Operations] and the commandant as they develop their service POMs [Program Objectives Memorandum], and then the secretary of the Navy inputs his imprint -- imprimatur on it, and then reflected again through the fall review.
I can clearly state you'll see on the slides is that the Navy's -- the Department of the Navy, the Navy and Marine Corps team, its role in all 10 areas was fully validated and continued to be in some areas of continued responsiveness, in terms of electronic warfare, undersea dominance, expeditionary movements and items like that, that we're able to main stability in our budget through this period.
Your Navy and Marine Corps team around the world, right now there are 47,000 sailors deployed underway, along with 3,100 Marines in -- on the three MEUs [Marine Expeditionary Units], on the amphibs [amphibious ships]. We also have 29,000 Navy personnel living forward and 26,000 Marine personnel living forward. So we are -- around the world remain the 911 force on our Marine Corps and the Navy response force around the world, and we continue to have 101 ships deployed, including three aircraft carriers and four large-deck amphibs, along with making up all these ships.
You can also see clearly in the Pacific the 52 ships that are there, of which about 40 are home-ported overseas. The others are deployers. And then we have 30 ships in the Middle East, exactly what we said in the strategy, exactly as we're continuing to carry it out as our role as part of the national strategy.
FY '13 -- next slide -- the public law made a big difference for us and for the Navy. And as we've talked in the fall, with the continuing resolution and a sequester coming, the Navy was tremendously short in O&M [Operations and Maintenance]. And I'll talk more about O&M in a moment.
But reality was, the other portion was, our accounts -- the same for other services, but really in our accounts is the ship construction Navy is all broken under a C.R. [Continuing Resolution]. That was the single biggest change that happened when we were able to get this public law, was we got multiyear authorities for the submarines and for the Burkes. We also got the ability to change quantity, the money is lined up properly, and in the carrier force, we could do nothing, and then we could do everything. And it's all a stroke of a pen in the way of SCN is done.
So dramatic change for us. That's why we're on -- you know, talking to OSD, getting to the Hill, myself going over and seeing the various senators was, there was nothing more important for the Navy than to get this bill.
It also solved half of my own end problem. I am still sequestered down. Navy and Marine Corps a total of $4.5 billion. But I'm not $8.6 billion in the Navy and over $2 billion -- or almost $2 billion in the Marine Corps. So a dramatic difference in terms of what we're able to do forces forward.
So the bottom line is, I got all my multiyears, I got my note, new start quantities, and all my MILCON projects. However, I'm still down $10.7 billion of that up to $41 billion sequester.
So what does that do for us, is in the DON O&M accounts, about 90 percent Navy and 10 percent Marine Corps is we are still short in some areas of what I'd call significant training, readiness and maintenance. We are deploying forward. We are continuing to support all the forces forward. We are preparing all the ships and Marines to deploy in '14 and doing the ship -- as much of the ship maintenance in '15 as we can to support those operations.
So where are the slowdowns? There are two air wings, as was spoken first thing this morning. One of them is at minimum safety flying. The other one will transition to minimum safety flying. Across the full expeditionary helicopter force and Marine Corps force, there's another couple hundred million dollars of reductions of training.
Once again, people are flying to be safe and flying to get ready to deploy, but not at the level necessary to work up. But anyone who is deploying early in '14 has the appropriate hours, and we're still scheduling air wings to go to Fallon, as required in the MEUs to work as teams to be that ace. But if you're not deploying to late in '14 or late in '15, you may have fewer hours to fly, and all you're doing is getting your individual training skills, and you're not mastering what we call our group training.
The biggest reduction is in infrastructure. We're doing some R.M [restoration and modernization] projects, but we're doing no demolition. And it's very -- you know, it's a small number of R.M. projects, restoration, modernization. We also have recruiting and training and other commands, so it's a smattering across the board, slowing down, but we are able to do the preponderance of our operations.
In investment accounts, we're still in a lot of analysis. I will tell you is, there are two items that I have to fix right away. There is -- Mr. Hill talked about a reprogramming going on, which is largely readiness, but there are two items. There's a $28 million reduction against the Burke advanced procurement for '13, which is necessary to support the multiyear. That has been one of the items we are going to submit as part of that.
And the other one was a reactor core has been sequestered, and it comes as a lump unit, $23 million. I need to get that restored so I can put the core in order as part of '13 to lead the refueling overhaul that's later in the FYDP, but it takes years to build these core.
So those are two I'm going to put on the reprogramming. Many other items we're going to have to look at. We are sourcing through -- essentially as you look at trying to maintain quantity, you have prior-year assets, but the bill actually swept up about $850 million of prior-year dollars for the Navy as they used for a rescind and re-appropriate, to be able to fund the third ship.
So many of the same things, when I was looking at a sequester plan under the C.R., I had more assets in the past that I don't have now. So we're looking line by line. It's about 1,045 lines in the Department of the Navy budget that we have to go line by line, put in your '13 reduction, figure out what your prior year is, and then figure out when you have to buy it back.
So that process is ongoing. We will probably lose some quantity of aircraft. We will lose quantity of weapons. And that will be -- that will take out over the next -- I'd say about another month or so. We have to report what's called a “1414 “ not less than 60 days after the law is signed by the president, so not later than 26 May, I have to come back with a spend plan to Congress, and part of that spend plan will have within it where the minuses by year are laid in, at least for the '13 and prior year funds, and we'll be able to talk about as we do the '15 budget over the summer, the restorations later in the FYDP for those.
But there are some that will come. Example I'll give you, the Virginia class submarine. I know it's about $240 million, will have to be restored. Very likely in '15 or '16 though, when the boat comes closer to being the cost of complete line or finish the planning and design prior to float off.
So a lot of these don't have to be bought back right away, but if you maintain the strategy, the O&M you can stop training, I can defer a building, but on the investment side, if you maintain the strategy, you are going to have to buy it back at some point in the next one to six years.
And also, we're accommodating the unfunded requirements as part of this, and some of those are reflected in terms of either the execution dollars this year -- Congress gave us money from [USS] Miami and [USS] Porter is a repair that will probably be covered through -- on this reprogramming.
OK, next slide. The funds -- it wouldn't be a budget brief without laying out all my money. The bottom line here is, you can see is that '13 ended up being -- prior to being sequestered was actually a robust year with the creation of the fund for the surface ship maintenance and operations, as well as good support from Congress of what the Navy's plans were, and the Marine Corps plans as part of this strategy. '14 will be a tight year as we go -- and also -- I also don't have my OCO budget, since we're certainly wrapped up in those same discussions.
The bottom line across the FYDP, on real terms, this is 0.1 percent growth real, 1.7 percent nominal growth across the FYDP from '14 to '18 for the Department of the Navy. And I'll go more into each appropriation coming up.
So the famous Navy money bag slide. Our proportions remain about the same in this budget, 29 percent military personnel. That's gone up about $1 billion, 2 percent. What that is, is 1 percent for pay and about 3.4 percent for food allowances and 4 percent for housing, so the net effect is a 2 percent increase in our MILPERS [military personnel] account.
That is the only one that actually was going up here. The rest come down, because of the higher water, but actually they're all going up because of the sequester, so it's an unusual set of math as we work our way through this one.
Procurement is 28 percent. It's a little bit smaller. Two years ago, when I was doing this rollout, it was last year that procurement was the biggest of all these accounts. When we started under the efficiencies and the other -- the drawdown last year of that first $500 billion, procurement actually dipped a little bit.
But we still are a capital intensive service for the Navy and Marine Corps, so it's still not that much smaller than our MILPERS or our O&M account.
O&M -- I don't have a detailed slide, more the breakdown by the bottom line. That's the oil and grease that keeps our machine and engines running. Research and development is also important to the Navy force. There is a slight reduction here from years, but really transitions, because more items are transitioning to deployments and operations. The P-8A Poseidon aircrafts, the 1st Squadron people just saw is now formed up, will actually deploy this year, so R&D for a number of items, I'll show you, will be going down over time. But the net effect over the FYDP, the Navy is adding a substantial amount of money over the FYDP. And we'll talk about that later.
Military personnel. Two services on a slightly different path, but it's the same that was laid out last year, except the Navy really took a hard look at what we have to do for structure. So the Navy's growth reflects a number of items. It is the enhanced maintenance facility for petty officers for shore, training, so it facilitates sea/shore rotation and also gets this idea of maintenance for people onboard 500 billets. We have 1,000 billets for nuclear trained personnel, combination of -- this is over the FYDP, over the five years. Part of that growth is 1,000 billets, which is people at sea on aircraft carriers and also in the training commands at Naval Nuclear Power School and nuclear prototypes.
We have about 980 people for F-18G Growler squadrons, and they're training for that, and I'll share the airplane buys for that one, as Mr. Hale talked about. We also have about 1,000 personnel for LCS [Littoral Combat Ship] crews and instructors, so -- and about 1,000 personnel for what we call the combination of cyber and then IA, the individual accounts, which -- even though I'm buying a billet of short actually helps sea manning, because it was -- it pays for that person when they're going to school, so I actually don't have to take as many gaps at sea, so it's kind of unusual. I buy essentially what's a shore billet, but it helps my sea manning.
So the bottom line, the Navy's going to slow -- grow slightly over time. We've pretty much reached the point where to be able to operate with the force we have and to be able to properly man and train, we need these forces.
The Marines continue their downsizing. They've certainly been able to step through and are slightly ahead of this ramp. There's still plenty to get to the force of 182,100, as dictated last year. And this is the only time you really see a little bit of OCO here, is there is Marine Corps end strength in OCO for that residual personnel coming down. And about -- you know, you'll see that money, when I submit the amended budget, but the bottom line on this ramp, that's where the additional people are as we step our way through that.
Civilian personnel. Department of the Navy is -- has a -- what I say is a net number for a slight amount of growth here. What you have growing on is also the civilian personnel, 500 personnel for cyber. We have 160 for audit readiness. As Mr. Hale talked about, audit readiness was important. And the Navy is stepping forward on our path through as probably the first service to go into the '14 ready to start audit.
We also have 1,200 personnel for Navy working capital fund. Essentially, it's the workload to be able to do all the reset on all the airplanes and all the equipment that's go into our warfare centers, and we also have about 1,300 personnel at shipyards as part of this maintaining the fleet we have and be able to continue to operate, you know, carrier presence at a greater level, but offset by about 1,500 personnel reductions at our bases through efficiencies and in terms of base structure, base maintenance, and base support dollar personnel.
The bottom line, over 85 percent of the Department of the Navy personnel are outside Washington, and the Marine Corps is over 93 percent are outside of Washington. These people (inaudible) all 212,000 or 214,000 are people turning wrenches, training personnel, fixing gear, riding on our ships. In fact, all of our major ships usually have civilians either meeting them in port or riding them port to port from SPAWAR [Space and Naval Warfare Systems Command] in-service teams maintaining this. So these people out and about. Hence, our issue on furlough is to get down to zero or get support and pus that way, because we have a dramatic impact ton our equipment and our readiness at furlough in the Navy and Marine Corps.
Readiness. The standard bar charts, you can see the OCO is missing, but the same kind of data you see, ship operations are funded, make up the balance in OCO. Flying hours remain 2,520 in the base. Marine Corps ground equipment is flat because of the equipment they have, it'll be reset dollars in OCO. Ship depot maintenance, 80 percent once again funded in the base, and aircraft depot maintenance 79 percent, almost 80 percent funded in base, and the balance will be there in OCO. And our base support numbers, very little will be in OCO in this case. It will be a small amount for some overseas areas.
The bottom line is we are continuing to refine the -- in '14, the Marine Corps stays at 90 percent ready FSR model. The Navy's at 80 percent. We're eying over the FYDP to go to 85 percent. As we're adjusting our restoration and modernization, we're able to adjust our sustainment, up a little bit on sustainment.
We kind of did analysis for the secretary of defense to task and a bill to come back to the Navy, and the CNO asked the question, what's the right point? And it looks like for us over the FYDP is 85 percent sustainment, so a year from now when I'm doing this, you'll see this as an 85 percent slide for the Navy, trying to find that sweet spot.
Next slide. Probably one of the most important ones is shipbuilding. Our secretary of the Navy's goals is stability in shipbuilding. He's been pushing that for four years, and he's going to be here for a while, and I know that day in, day out. And I think you'll find is that we're still very, very -- very few changes on this slide. And I'll go over them for you.
We're still building 41 ships. The difference is, we are one less LCS in '18. Two of the T-AHs or the tugs move from 16 to 17 to balance in that year, but they're still produced in time when they're needed for the fleet to replace the ones we have. An extra submarine is there, you'll see in '14. And then the LX(R), which is the replacement for the amphibious dock landing ship, moved out one year, to '19. So that was a reduction of a ship.
The submarine is funded as part of that. We have authority for up to 10 multiyear. This is funded at taking -- Congress put in $772 million for AP [advanced procurement] for submarine. Working with OSD, this is -- that 10th submarine is funded over two years, so it is done with advanced appropriations with a specific waiver for one boat from OMB to allow us to put in -- basically it's $710 million in one year, and I think it's $684 million in the second year. The net effect is, between those three increments and the savings across the multiyear, I'm able to get the 10 submarine. And it's “ticked” in FY12 for the balance on this one.
The DDG [guided missile destroyer], it's listed as three from Congress. Effectively, that'll become the -- a nine-ship multiyear that could become 10 when we work our way through contracting and getting the bids in. We'll also then be able to have a robust DDG force.
It remains as one of the 16 DDGs is a flight three, and then the two and 17 are flight threes and remain that in this plan, along with the AMDR [Air and Missile Defense Radar], which continues to move ahead.
New that portion at the bottom is, the carriers -- because the Lincoln was technically funded in the last week of '12, it's not ticked in the '13 column, because we moved that $96 million to try to get -- be able to, quote, "get a start on it," but then the C.R. blocked the start. So even though you don't see any tick marks, there is $1.6 billion in '13 for the Lincoln and $1.70 billion in '14 to compete the Lincoln refueling overhaul. So you don't see a tick mark there, but that's the money that's laid in down there for that.
For the total ship count, we'll end up -- we'll be delivering six ships this year and retiring 11. So the net effect is we started this year at 287. We'll finish it with 282. And we'll be back -- we will continue to decline slowly and then climb again, and we'll still be back at 300 ships in FY '19.
OK, aircraft procurement. Bit more of some changes here, although at the top you'll see there's no change in JSF [Joint Strike Fighter]. The Marine Corps variant is out of probation. It continues to work and test. And both services are looking forward to delivery of these airplanes, and we do not change or affect our buy in any way.
On the F/A-18s, there is a lot of churn. Probably most of it probably ends up being good news, especially if you're -- if you're Boeing. Congress added 11 in '13 of the E and F [variants], so what did that -- that did allow us to -- my strike fighter shortfall, I can still maintain the same number, so there is a bit of a savings in that I didn't buy the ones I had ticked in '14, but between OSD and the Navy, the desire to grow the electronic jamming force -- and the Navy has picked that up as a national -- it’s actually a national force.
So we have our 10 squadrons in our air wings. We also have four ground squadrons. This grows two more ground squadrons, as well as the attrition and maintenance aircraft for the entire buy. So that's why there's 21 airplanes, and there's -- a chunk of the money's there, but it's an over $2 billion initiative over the FYDP, because it pays to buy the airplanes, delivers them two years later, and then integrates them in and pays for the manpower and the operations.
So a significant investment by the secretary of defense to say is that, hey, electronic jamming, the electromagnetic spectrum's important to the U.S. military, and the -- the projection of our airplanes there. These airplanes flow to support any service. You remember last year in Libya, the Libyan events, we had -- we had a squadron in -- I guess it was actually -- what was it, two years ago? The Libya event, Odyssey Dawn, a squadron flowed from Iraq to Aviano and supported all missions over Libya were supported, even though the Navy -- the carriers were over in the Middle East, but they were supporting the Marines and Air Force, and all our NATO support was supported by Navy F-18Gs.
So the value of the airplane to the composite force of the military is necessary, and the growth was to have two more of these ground squadrons to be able to flow to combatant commander requirements, as well as have the ability to take at least one off one of the carriers that would be in maintenance that you have now a force of seven to be able to move around the world.
Other items in here is the P-8A Poseidon aircraft. We're just readjusting slightly for balancing. There is nine P-8A Poseidon aircraft now. There are 19. They're not in this FYDP, but we still do the entire buy before the 737 line closes. And the KC-130Js, Congress bought three, so the Marines adjusted down one each of those years in the middle of the period.
Helicopters had slight adjustments of buying to budget for the AH-1s and the UH-1s. And then in the 60Rs, the Navy was able to -- since we're decommissioning seven -- or seven ships that had them, we took those helicopters out, but the [recently signed budget legislation has] money to buy helicopters. So I would view is that the helicopter account for the Navy is basically intact here, just a matter of where we're buying them from.
On the unmanned air vehicles, there are some reductions here, and I'll show you the BAMS [Broad Area Maritime Surveillance]is one that slid one year. The bottom line -- we had to put in about $200 million in R&D and take out $425 million of production in '14 for the BAMS which is the naval variant of the Global Hawk. The reason is -- there's two technical issues on the airplane that have caused a delay in testing.
First off, it has a unique double tail called a ruddervator, which looks like a little V in the back. It's different on the Navy model, based -- I think based upon the design and the sensors onboard, be able to get through that complex V-tail is taking a little longer on the design modules, and also integration of the mission computer onboard and all the software, since the naval variant is designed to mesh with our P-8A Poseidons and fly over the Pacific with a very slightly different set of sensors than the Air Force variation. Integrating to make it a naval variant is taking longer on this IMMC computer system.
So with those two items, basically put a year delay, so we took the production, put in the R&D to balance it off, and still produced them by the end of -- continued to produce them by the end of FYDP the STUAS [Small Tactical Unmanned Air System] truncated. It'll be a Marine Corps program, moving on Navy ships that go ashore with Marines, so we adjusted 10 of those sets down. We'll balance off between Navy and Marines using the equipment.
And then the V2AV [V2 Unmanned Aerial Vehicle], the last 16 were taken off here, because we're trying to figure out, what do we want to buy for LCS and follow-on? We have enough to be able to man the necessary circles for Special Operations Forces, for the support from naval variant, and enough for the initial LCS, and then we're going to take a pause to figure out what is the actual variant?
We're doing a lot of Fire Scout operations in the Middle East off our frigates. We're still developing what we're going to do with LCS on that. So there's a bit of a pause. I would say it'll be next year before I could lay out where I go with MQ-8.
OK, next slide.
Weapons, some changes, but the bottom line is, not a lot changed here, but -- so a couple key ones. Standard Missile-6 is a slight reduction, and that really is buying to -- I wouldn't say -- it's not buying to budget. It's buying to ships. The SM-6 requires the advanced either ACB 12 or 16 Aegis system. So buying a lot of other missiles that you can't put on non-ACB ships doesn't really matter, so we kind of -- working with OSD, adjusted the buy to buy when basically the ships are getting modified over time.
The other one here is, AM9X is a step up. And that really reflects in terms of what I'd call the two lines of operation for our attack aircraft force, significant investments of $459 million for infrared development for F-18s and 585 for radio frequency improvements. Basically, to be able to allow our F-18s to fly all around the world whether it's an electronic jamming area or high-threat area, the F-18s to be able to have a kill is you want to have an infrared so you can even say if someone's jamming it, you can still see, and so what you do is you link the F-18s with improved (inaudible) and modifications. That's where the money went into the F-18s over the FYDP. And now I buy more AM9X, and these become block threes. I now have a greater range, faster weapon, that I will be able to use in an infrared mode against any aircraft anywhere, no matter what the jamming world is.
You also want to say is, if I'm in a jamming world with an F-18, I want to be able to use these weapons, and so that's where the RF [radio frequency] improvements were made in the F-18s. So it's in the F-18 mod lines, but it's supported here in terms of the weapons lines that, once again, we come forward to the joint force for the warfights wherever they are around the world or whatever's necessary.
Marine Corps procurement. The Marines continue to develop the vehicles they want in the future. This is the last year of R&D for JLTV [Joint Light Tactical Vehicle]. They start the LRIP [low rate initial production] in '15, so procurement dollars are not in PMC [procurement Marine Corps] for the JLTV yet, and the ACV is also -- the amphibious combat vehicle is also still in R&D throughout a good chunk of this FYDP.
So what you're seeing here is some modest ground equipment on what they need to maintain and upgrade. And once again, the focus, as you can see for three years, has been Marine Corps distributed operations on the move as radar and combat equipment -- and electric equipment really dominates their PMC accounts.
And their OCO will come -- will come later, but a lot of that is related to reset and replenishing reset and home gear when it comes back. And the other items are all the various things the Marines need to have ashore or coming from Navy ships.
Next slide, R&D.
In R&D, a slight decline, but as indicated, as you go line by line, you'll see most of the programs are transitioning. As I said, most of the Navy and programs are transitioning, and the Marine Corps, there's a slight increase as they step through their vehicles, but it largely is, the Navy's the more capital service, except for Marine Corps aviation, and the Marine Corps is all -- all Marine Corps aviation funded in the Navy.
So you can see JSF ramps down in the -- in the R&D as part of that. The C-130 or the 53-K is a slight decline. They're getting ready to start in production on that. Next-gen jammer is a slight increase or stepping through that model of the -- of engineering manufactured EMD items to be able to down-select -- produce those by the end of the FYDP. And P-8s continue to transition down.
OHIO-class submarine replacement is a big step-up. That really just brings it back on the plan. If you remember two years ago, we laid in a two-year delay in that. And so the '13 down to 400 really was a -- basically being able to operate as a forward finance. You really looked at '12 and '13 together, and you average that that's how we're spending the money on that, so we do need to continue to step ahead to be able to support the three lines of operation to develop an Iowa class replacement submarine is you have common missile component with the United States and U.K. You have the reactor plant and reactor core and that. And then you have the submarine hull mechanical and electrical. So the three phases all come together and are sequenced in research and development here.
The Triton BAMs [Broad Area Maritime Surveillance]isnot as big a decrease as you'd see, that -- of the $200 million we had to put back in, at least 50 was going back in to '14 to be able to allow us to execute a transition to work IMMC and the ruddervators, as we didn't go into procurement there. And then you could see the other Marines, a few Marine Corps are one step up over time here.
OK, next slide. Military construction. What we have here is -- once again, is a relatively flat profile. And I know the commandants, you know, we both say they're taking as much risk as they can in this area, because they need to be able to maintain the forces -- be able to support our forces forward and buy the equipment of the future, and that for the Navy and Marines, and especially the Navy, the bases -- bases and MILCON come last, but there are some significant investments here.
In enhancing global defense posture, there's only one program for the Marine Corps, which is aviation based at Anderson, but the Navy's doing six projects on Guam. Once again, Guam is important for -- in terms of harbors, construction, submarine repair facility, modular storage magazine, because it's the balance of a very large weapons area for us in our (inaudible). We put $63 million in to actually build an ammo magazine on a (inaudible) to be able to on- or off-load to support ammo ships and carriers coming or going and not having to truck everything to the road.
I also have it right there on the base for ready -- ready replenishment. So significant investment there and then around the various harbors with wharf repairs. That'll follow on with the ramp-up for the Marines. Their Guam money will come later when the SEIS is done.
Other items are facility improvements around the country at Pearl Harbor, New River, Portsmouth. We also have -- a preponderance of our money is in supporting new systems, so there's money for Marine Corps cyber, there's money for V-22 and BAMs bases and P-8s. And then we complete -- this will be the third or fourth years for the explosive handling wharf (in Bangor for the submarine nuclear weapon on- and offload at Bangor.
On the family housing, we basically have no new PPV [Public Private Venture] projects. And what is here is the money to support the $390 million is supporting the operations of 11,000 -- pardon me, 10,000 homes around -- primarily overseas, the Navy owns and leases for families. And the $73 million is not building new homes, but is renovating 177 units between Japan, Guam and Iwakuni.
So as I'm just about done wrapping up, I'll emphasize the mantra of the -- our secretary of the Navy, for his focus is on people, and he means the Marines, the sailors, and the civilians that take care of us -- take care of our equipment and our people, and all their families. He also means we have to have the platforms, the right ones, which is the ships and aircraft and also the Marine Corps vehicles that come from our ships and fly off -- and fly off our ships.
We also have to have power. In his mind, that means electrical power, and electrical power and propulsion power come from two areas. If it's either fuel-generated, we need to be efficient and effective, and it's also nuclear power and maintain our important submarine and carrier database -- or base, and then partnerships. We're once again engaged around the world. As you saw in one of my opening slides, that has never changed in the Navy. We're out, and we'll continue to remain about.
So subject to your questions, that completes my brief. Yes, ma'am?
Q: Just wanted to clarify on the reprogramming. You mentioned the reactor core and the money for the Arleigh Burkes. Will they -- is that what you're proposing to be in the reprogramming or...
REAR ADM. MULLOY: (inaudible) a lot more of my readiness. I'm certainly not -- as the Army, as you probably heard along the way, will get the preponderance of the -- you know, we have authority up to $7.5 billion. Mr. Hale is still working through it. Most of mine will be -- will be readiness related, to recover some of the ship avails I want to do, to be able to buy back other things and items.
So I am looking at a preponderance of that money to be readiness. In fact, those are the ones I need to do, and it's somewhat of an arbitrary little fact. If the reactor core -- if I propose an OPN [Other Procurement, Navy]source and the course is an OPN, it doesn't use up threshold . So I'm happy to try to pick sources that don't-- that don't affect my readiness portion of this or impact the problem for Mr. Hale.
The ship construction I can't do, because it's SCN [Shipbuilding and Conversions]. I'm going to have to request that. So that's one of the ones, as we develop it over the next few weeks, will be in there. So those are the only two investment items. The rest of it of my portion of it's all readiness, O&M.
Q: (OFF-MIKE) you've requested that they -- you haven't received any assurances yet that...
REAR ADM. MULLOY: No, no. I need to work the process through OSD [Office of the Secretary of Defense] and OMB [Office of Management and Budget], and then I need to get it to the Hill, so I expect in the next few weeks that'll be a quick turn to try to get that done. And it's primarily driven, as you heard from the Army -- in the Army's viewpoint of their OCO shortfall, and they were impacted largely through the C.R. or the sequester, like I was, you know, in terms of the money, especially in the operating and maintenance accounts.
Q: When the sequester debate and C.R. are both in play, the Navy talked about a whole range of cuts. Among them were a couple dozen ship (OFF-MIKE), depot maintenance, half of them in Norfolk, where I represent. People are trying -- still trying to understand, is that still going to happen? Are there -- are their cancellations void now? Are they still -- where is that?
REAR ADM. MULLOY: We are down to eight, which we are now looking through this readiness reprogramming...
REAR ADM. MULLOY: Eight that might not be done, except I believe that's part of where it was , two in Norfolk, six on the West Coast. All are late in the year.
So the timing is, I believe -- you know, we always get great support from the Hill and from OSD for ship maintenance. So since I've got two in the Pacific in June, and the two in Norfolk are in September, and the other four in the Pacific are in August, I've got time to cash flow that. So in terms of our strategy is, I can re-program to recover all my ship maintenance.
Q: (OFF-MIKE) other (OFF-MIKE)
REAR ADM. MULLOY: Are all funded?
REAR ADM. MULLOY: They're all going to have to, because, remember, my -- my bill was $8.6 million. Now it's 4.1. I am putting the money into all of the other operations first to be able to support. Because, remember, when we were at 8.6, we were talking about not even able to finish all the '13 deployments or have -- essentially, if we did 13 deployments, I would gaps in '14, because I would not have had the money to work up the Bush and the Vincent and everybody else that was supposed to be going.
And so those ships and air wings would not have gone training, because I would have supported only -- the Ike, the Nimitz, and the Truman would have been the only ones working to deploy. Every other aircraft carrier which deploys in '14 would not have had an air wing or ship underway.
So I'm still short. I've got like an average of 19 or 20 days now for the non-deployed ships. So every ship is losing about 20 percent of their underway days. It doesn't seem like a lot, but I'll tell you, having been an XO in the training office or commanding officer of a ship, five underway days in a quarter is officer training, petty officer training, navigation in and out.
So that's what we're saying is, those are sequenced for the ships that deploy later. They will still get underway days, but I'm not whole. I'm still down $4.1 billion, primarily on the shore side, but I'm still having to hit some of my fleet accounts.
Q: (OFF-MIKE) activation for the Enterprise? And are you totally backing off decommissioning any of these cruisers now? Is that just a null and void subject?
REAR ADM. MULLOY: The Enterprise is funded and supported in this budget. And, in fact, Enterprise is -- will go to contract sometime here in the spring. I think there was a $70 million ahead need monies from Congress, which we'll address later on, but we had almost about -- $800-something, almost $900 million was funded. So Enterprise is a go.
She will have a lot of work before she gets in dock to take the quarters off. And, in fact, she goes in the same dry dock that Lincoln is in. So that's one reason why -- you know, as soon as we got this bill and the president signed it, I don't know if people saw that, about a couple days later, tugboats grabbed Lincoln and towed her over. On Thursday, she didn't even go to the yard and then go into the dock the next day. They had the sill off, and she left the pier in Norfolk and went directly into the dry dock, because that dry dock is a lynchpin or -- I don't know how many years in my future right now, but Lincoln goes in, Lincoln comes out, Enterprise goes in, Enterprise comes out, and Washington goes in. They are all tied to that dry dock.
But -- so the point was, the moment the president signed that bill, we knew we had the money coming, would be apportioned from OMB, PO carriers and the company came quickly to a contract, and the ship started right on time where we need to be. She's lost a couple of weeks in dock. You know, we're certainly talking to Admiral Moore. It's a three-year ship avail, so, I mean, she'll be in dry dock for at least a year-and-a-half.
Does she affect Enterprise? I would say is there might be a week or two, but we certainly haven't analyze that down to that point yet. But Enterprise should be able to get done in time to support George Washington coming in FY 16.
Q: (OFF-MIKE) cruiser (OFF-MIKE)
REAR ADM. MULLOY: Oh, the cruiser decom [decommission]. Since Congress provided the funding for cruisers fund, all we have to do -- we just have to -- so right now I will say is that you will not find the decommissioning of the cruisers in my '14 budget. That is certainly an item for the future, as the secretary of defense talked about a strategy review and reconciliation long term in the sequester, is I don't need to do that, I have the money to be able to operate and maintain those ships, and that's what we're doing. In fact, I think a bunch of those are now in maintenance availabilities, and they will operate, and we'll buy spares and we'll take care of those ships.
So that's a quick conversion for the not -- it's actually nine ships, seven cruisers, two amphibs, scattered over these two years. There are no decommissionings for any of those ships in this budget. Now, that doesn't mean, once again, we complete this reconciliation or we get sequestered that I won't -- won't entertain that fact in '15.
Q: Two other carrier questions.
REAR ADM. MULLOY: Yes, sir.
Q: One, the Truman. The high-profile move to delay its deployment to the gulf, has that now been mitigated by the full appropriations for '13?
REAR ADM. MULLOY: No, because the actual -- the actual adjudicated global force management plan has a ship not going. So one of the items is, her not going provides dollars to allow us to have the '14 carriers. So there was no reason -- since the secretary of defense and the president said is, we'll live with the global force we have. There was no -- if they turned it back on or something happens in the world, or in the Middle East, I could deploy a carrier. She's ready to go on short notice. But there is no need to just put her out or to put her out here.
Since they'd already made the decision not to, there was no one coming back in -- CENTCOM or PACOM did not come in asking for another aircraft carrier. If someone does come in and ask for an aircraft carrier, Truman is the one.
Q: (OFF-MIKE) question, you've got $1.6 billion in the budget this year for that line. How much of that goes to the -- of building the Kennedy? And how much of that goes to cover the previously acknowledged cost overrun of about $700 million?
REAR ADM. MULLOY: Yeah, the Kennedy is -- let me get that number. I want to make sure I give you the exact number for the Kennedy. And the balance would be the other one here, is the Kennedy is -- I want to say right here, (inaudible) full funding -- is 945. And so what we did was, the Navy in this budget -- you'll see we added $506 million to actually then fully finance. Last year, we added money and we said was, OK, it will be of the variance that has -- that's awarded -- that we settled on a line with the company, as we ran up the share line, the company paid part of it, the Navy paid -- what we had realized then. The balance to bring us to the full funding is this $506 million, which is $417 million for our portion of the -- of the slow delivery, and then $89 million for tools, special tooling and other items to complete the delivery.
Q: All right, so $506 million is to cover the overrun that was acknowledged...
REAR ADM. MULLOY: Right. And so it's actually -- and think -- between '14 and '15 for cost to complete, so it's $506 million total.
Q: OK. And what -- are you going to be going to Congress this month to seek relief on the cap of -- it's about $500 million over the cap...
REAR ADM. MULLOY: Right, and so -- yeah, so there is going to be a legislative proposal delivered to Congress along with the budget within short order. There's a whole series of personnel pay ones. One of the leg props is a change in the carrier cost capability.
Q: And you're the budget guy. Is the cost -- are the costs stabilized on the -- on the Ford or not?
REAR ADM. MULLOY: Yes, they are. Right now, so far as we can tell, in terms of all their variances, that's why we put this money in, is what we thought was we covered the whole variance on that. And so I think you'll find the cost cap will be very close to -- we're not putting some cost cap in way, way over of where we're at, projecting to have a problem.
Q: Next-gen jammer?
REAR ADM. MULLOY: Right.
Q: Can you go into a little bit more about the plus-up in R&D development for that? Is the increase in the Growler money to sort of fill the gap until that's available? Do you have an airframe...
REAR ADM. MULLOY: No, no, they're actually two separate tracks. The next-gen jammer is stepping down its path of going from a tech maturation process for -- I think it was from three or four companies down to two. And so the ramp-up that it's on is the same plan I've been on. The extra Growlers being bought will be using our current ALQ-99 pods, so if there's extra procurement in next-gen jammers, it's well outside the FYDP. I've not seen the numbers in terms of what the total buy on that would be.
But, remember, I've already got a lot of pods and equipment, because they have Marine Corps airplanes. So all of my Growlers will just deploy for the period of this FYDP with the current ALQ-99 jammers I have.
Q: And do you have a timetable for when you can move next-gen jammer out from R&D and into...
REAR ADM. MULLOY: No, I'm going to have to -- I'll have to get back to you when -- after the first procurement. I'm pretty sure it's right near the very end of the FYDP. I'm looking at the profile. I believe it's not until 18 or 19 that I actually start producing those jammers. And I'll have these extra Growlers by two years after this '14 by '16.
So once again, we'll be living -- because, remember, the Marines ramped down our of their EA-6Bs not later than '19. I believe between '18 and '19 is the last squadron. So there are expeditionary jamming equipment available for the extra squadrons I have. I'm not going to be short on that.
Q: Yeah, could you just go back a little bit? (OFF-MIKE)
REAR ADM. MULLOY: Right.
Q: Exactly how that plays out and if that has any impact on, you know, expanding the use of ScanEagle.
REAR ADM. MULLOY: No, well, what it is, is it just says is a -- we have enough for -- in the Marine Corps to use them on the big-deck amphibs and when they transition ashore, so the Navy looked at the mix of things we have to have between the fire scouts and others, that that was a niche that the Navy would never go without a Marine with it, so the Navy didn't need to have a Navy buy essentially, on that case.
So they've got to think it's 15 sets for the Marine Corps. And we got 11 big-deck amphibs. And I've got training or Marines that deploy as a MEB, not with them, so there's more than enough to cover whatever we need to have for them to be able to support them.
And we have the MQ-8 Charlies for the special forces, and they're targeted to deploy off of either the some off Burkes and then also potentially the JSV [Joint High Speed Vessels], so we're looking through various solutions over time and/or even one of the AFSB [Afloat Forward Staging Base] modified ones will be able to support the soft orbits, so they'll use the MAQ-8 Charlie . They weren't going to use STUAS .
LT. HUTCHESON: We have time for one more question.
REAR ADM. MULLOY: OK. In the back, sir?
Q: Very quick. Do you know the reactor core, what refueling that's associated with?
REAR ADM. MULLOY: It is a carrier one, and it's well outside the FYDP. So, I mean, it takes about eight years to build them, so that's -- it seems like I'm reacting to it very quickly, but the issue on core is, is because the assembly time and the accuracy required, I need to get them back on contract, but I also can't deobligate part of it. So it's a -- I think it's $287 million core, it got sequestered by 7 percent. I've got to put that money back and to be able to start the production to create a core outside the FYDP.
I got another minute here. In the front, yes, sir?
Q: Could you talk a little bit about the production schedule for the America class? Is -- this one in '17 ?, is that LHA-8?
REAR ADM. MULLOY: It's LHA 8. And what that is going to be -- that's the first one they'll have a well (inaudible) and have increased aviation capability on it, so it's -- it's a modification of the America class. And the America is still scheduled to deliver and commission in '14. That's one of the ships that -- of the deliveries we have.
REAR ADM. MULLOY: Yes, ma'am?
Q: As far as manpower goes, with the uncertainty of sequestration still lingering, is it possible the Marine Corps would still have to dip down below that 1,821?
REAR ADM. MULLOY: No -- no, first, manpower wasn't ever sequestered. And the Marines are at a position right now, is they're -- since they're -- they're trying to defer and curtail to be able to execute the rest of the year, make sure they don't have to go up . Their footprint Afghanistan came down a little bit faster than they were expecting, so they're able to balance off right now what they're doing around the world, because of the money they spend.
So the Marines are in a position to where they have risk, but they're not having to curtail as much as others, but so -- in case they have to flow, they have a reserve of O&M, but it doesn't affect their troop strength at all. And the drawdown is, as the commandant mentioned, was they have recruit cycles of when they grew, and now the Marines come through in a four-year cycle. The last couple years, they got ahead because of -- they had a very large group they grew to 202, and so now those people coming out, they could even have increased enlistment, but still end up having the numbers go down. Does that make sense to you? That's what's going on with their numbers. It's nothing to do with sequestration at all.
OK? Thank you all very much. I appreciate your time.