1 Navy Aviation Building the Future Fleet RDML Michael Manazir (N880)Head, Aviation Programs NDIA Defense Forum March 12, 2010

2 AV-AV-Weapon and Relayed LOS C2 / Data via Directional LPI Anti-Access Network Stubs BLOS C2 / Data between AVs / CV / CAOC via Wideband SATCOM; Bandwidth / Transmissions restricted in AOR Tanker / UCAS Local Mesh EMCON Network CCA Ops with Mesh EMCON Network Supporting ADMACS, JPALS Connections F-35 Aerial Refueling JFACC/CAOC Carrier Strike Group CV-Based Mission Control Element E-2 BAMS USAF deep attack forces Ground Forces/SOF Relayed SATCOM and LOS to Directional Anti-Access Network Stubs via UCAS, E-2, OG, BAMS, etc THE BATTLE SPACE NAVAIR Public Release Distribution Statement A – “Approved for Public Release, Distribution Unlimited.”

3 BOTTOM LINE UP FRONT Trends in the “cost to own and operate” the fleet point to an unaffordable future Every one of us must proactively drive to continuously reduce total life cycle costs Operational concepts should inform design & integration of ship hull, weapons, and communications systems, mission modules, manning and training plans, and infrastructure requirements. We must understand how these factors individually, and as a whole, impact the cost of our Surface Fleet. - CNO letter of 3 Aug 09 Today’s fiscal environment demands that every dollar invested in sustaining today’s Navy & building tomorrow’s Navy be spent effectively and efficiently Source: N4B Navy Readiness Overview Brief dated 2 February 2010, Mr. Pat Tamburrino

4 FEDERAL BUDGET Discretionary Defense Discretionary Non-Defense Medicare Medicaid Social Security Veterans’ Benefits Interest Projection TY $ in B Defense Budget 2010 ~$719 B 19% of Total Budget Federal Budget* 2010 ~$3700 B Source: OMB Historical Tables *Doesn't include undistributed offsets 2009 Stimulus Package

5 DEFENSE BUDGET BROKEN OUT BY SERVICE TY $ in B FEDERAL BUDGET Defense Budget Army Navy/USMC Air Force OSD Source: National Defense Budget Estimates 2009 – Green Book, June 2009

6 NAE BUDGET PRESSURES Reduced Top Line Due to OCO Budget Transition APN RDTE SCN OPN OMN WPN PANMC MILCON TY$(B) - Fact of Life - Change Proposals TOC is critical to controlling our costs so that we can afford future war fighting systems Top Line Pressures will cause cuts in RDTE and APN accounts - Other Corporate Bills MPN - RMD adjustments

7 AIRCRAFT TOTAL OWNERSHIP/ LIFE CYCLE COST COMPOSITION TOTAL OWNERSHIP COST FLYAWAY COST WEAPON SYSTEM COST PROCUREMENT COST ACQUISITION COST LIFE CYCLE COST RECURRING FLYAWAY Management Hardware ECOs PLUS Non-recurring Ancillary Equip PLUS Tech Data Pubs CSS Support Equip Training Equip Factory Training PLUS Initial Spares PLUS RDT&E Facility Construc- tion PLUS Operating & Support (Includes Operating Production Support) Disposal PLUS Common Spares/ Support Items Infrastruc- tureCost for Planning, Managing, Operating, and Executing Linked Indirect Costs Modification Improve- ments Reducing TOC is a major initiative within the Navy

8 NAVAL AVIATION TYPICAL LIFE CYCLE COST DISTRIBUTION R&DPRODUCTIONO&S 10% 46% 44% CONCEPT REFINE- MENT TECH DEV PRODUCTION DEVELOPMENTOPERATION & SUPPORTENG AND MFG DEV (EMD) ABC DESIGN INFLUENCES TO REDUCE TOC (INCLUDING PRODUCTION AND O&S) COST DEVELOP BUSINESS MODEL FOR SUPPORT STRATEGY (INCLUDING PBL) Ability to reduce/ influence TOC (including production and O&S) costs decreases over time PERCENTAGES BASED ON CARRIER AIR WING STUDY –STUDY COVERED 50 YEAR CYCLE –ASSUMED 75 AIRCRAFT WING MAKE UP –25 YEAR LIFE CYCLE –REPLACEMENT AIRCRAFT DEVELOPED & FIELDED AFTER 25 YEARS NOTE: PERCENTS VARY BY T/M/S BUT ARE GENERALLY ARE IN THE RANGE SHOWN ABOVE

9 PROGRAM DEFINITION UNCERTAINTY vs. TIME Ability to influence TOC reduces over time Pre Systems Acquisition Systems AcquisitionSustainment Concept Refinement Systems Development & Demonstration Production & DeploymentOperations & Support ABC IOCFOCDisposal Cost, Technical, and Programmatic Uncertainty 10% Development 46% Production44% O&S 70-75% OF COST DECISION HAVE BEEN MADE 85% OF COST DECISIONS MADE 90-95% OF COST DECISIONS MADE 95% OF COST DECISIONS MADE

10 FUTURE CARRIER AIR WING NOTIONAL CVW OF THE FUTURE COMPRISED OF: 44 STRIKE FIGHTER (F/A-18, JSF) AIRCRAFT 5 EA-18G AIRBORNE ELECTRONIC ATTACK (AEA) AIRCRAFT 5 E-2D ADVANCED HAWKEYE AIRCRAFT 19 MH-60R/S HELOS (11 ON THE CARRIER/8 DISPERSED THROUGH THE CSG) 2 CARRIER ONBOARD DELIVERY (COD) AIRCRAFT AUGMENT THE ENTIRE CSG

11 3 PRIMARY TOC CHALLENGES 1. Life Cycle Costs are set early –Understanding and influencing the cost drivers are essential –Need to increase the focus on TOC at every decision point 2. The majority of the 2020 Battle Force exists today –Platforms must achieve their expected service life –222 of today's 285 ships are required in Life cycle costs of next generation systems must be more fully understood –Increased fidelity of sustainment strategies is essential –The F-35 challenge is representative of the future Think strategically about how to reduce the cost of doing business without compromising warfighting effectiveness Source: N4B Navy Readiness Overview Brief dated 2 February 2010, Mr. Pat Tamburrino

12 WAY AHEAD Think well past the POM/PR…Create and exploit every opportunity to reduce cost Develop Catalog of Initiatives that Reduce TOC –Build base of unfunded affordability initiatives with ROI potential Develop TOC Performance Capture Methodology –Identify data sources with fidelity to facilitate senior leadership decision making Source: N4B Navy Readiness Overview Brief dated 2 February 2010, Mr. Pat Tamburrino

13 DISCUSSION