Industrial Base and Workforce Development for Skilled Trades
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House Appropriations Subcommittee on Defense U.S. House of Representatives
Follow its sittingsEd Case
Our specific focus in this hearing is on our industrial workforce and how to develop and implement thoughtful, sustainable solutions to recruit, train, and retain skilled workers, not just now, but over the next generation. In doing so, we must realistically assess our challenges, including a shortage of welders, electricians, pipefitters, and other skilled trades, 76 million baby boomers retiring, as the chair noted, a too-prevalent bias against careers in the trades, and difficulty in recruiting international talent from our allies and partners. We must also factor in changes in industrial production over that same generation that will significantly alter our projections and assumptions as to workforce needs, such as AI and robotics, maximized leverage of expertise and funding across government and the private sector. We appreciate this administration's building on previous administration's efforts to develop our nation's defense industrial base workforce. And on this Defense Appropriations Subcommittee, we are especially interested in specific programs, funding, and other efforts inside and through the Department of Defense that will amplify our efforts.
As part of that, these are a couple of issues that I hope we focus on here today.
First, we need a better understanding of the current administration's strategy for workforce development generally, and especially through the very promising Build Freedom campaign. Specifically, what is the ultimate target, what metrics will you utilize to track our progress, and what will it cost? Much of our effort is through the Industrial Base Analysis and Sustainment, or IBAS, program, which also is producing results. The fiscal year 2027 IBAS request for workforce programs is about 160 million in discretionary funding and close to 2.3 billion in mandatory funding. It would help us to understand how, if provided, these funds will help the administration meet our goals and over what time period, and more directly, how would your efforts be impacted if the proposed 350 billion additional reconciliation package is not enacted.
Are there other existing programs that address our needs and are they properly identified and funded? What are the known gaps in our current approach and what unexpected challenges have we faced along the way? Finally, we need to better understand how these programs tie into other programs within the department or across other departments and agencies. For example, many current Department of Labor programs serve to enhance community colleges such as this and other workforce training programs. How are we working with them to avoid overlap?
I think we all realize we cannot also solve this problem through spending alone. We would like to understand from our witnesses, especially in our first panel, how we can help find, develop, and meet our workforce needs by working directly with primary schools. Regarding the administration's proposal to, quote, deploy a national K through 12 curriculum aligned with defense industrial base skills, we need to understand which groups and business partnerships will inform this curriculum, will it be accredited, how many educational institutions are we hoping to reach, what will it cost. We would also like our witnesses to address how to retain trained workers since training and recruitment is only half the challenge. Further, we'd like to discuss the buildfreedom.us website's representation that these defense industrial jobs are, quote, AI-proof six-figure jobs because hands-on trades are harder to automate.
This characterization seems to overlook the major leaps forward in robotics which are made possible by AI and machine learning, and as we encourage our young people to train for trade jobs, we must realistically assess whether the jobs we are all investing in are those that we will actually need over a generation. And ultimately, all of these challenges will require multi-generation investment, so we need to continue this work in earnest. I offer Pearl Harbor Naval Shipyard in my own district and other efforts in Hawaii as examples of how the defense industrial workforce of today and tomorrow can be trained, recruited, and retained. Our shipyard's success in these areas with close to 7,000 high-quality industrial jobs maintaining and repairing some of the most complicated and sophisticated equipment in our military has been sustained by investment over generations in the workforce. The shipyard's apprentice program, which reaches initially down into the middle schools, draws thousands of applicants each year and has secured jobs for multiple generations within the same family.
Additionally, with IBAS and other assistance from the department, Honolulu Community College offers advanced manufacturing courses and capacity to meet defense industrial base requirements in the Indo-Pacific, the heart of our nation's priority theater. This and other efforts are facilitated by a very close coordination with our Pacific Command, with direct involvement from Admiral Paparo and especially through its regional sustainment framework.
Across our nation, we see many opportunities and many challenges in rebuilding our defense industrial base and its foundation, our workforce. I look forward to sharpening our focus here today. I also note that this has been and must remain a bipartisan focus and appreciate your own direct and continued efforts, Mr. Chair. I yield back.
Ken Calvert
I thank the gentleman. I would like to now turn to my colleague here from California, Mr. Valadao, for his opening comments.
David Valadao
I want to thank Chairman Calvert, Mr. Case, and the subcommittee for a hearing on this critical national security issue. As a lifelong farmer, I personally understand the hard work and the consequences of not being fully understood or supported culturally through policy or resourcing. Our national and defense industrial bases and skilled trades and professionals deserve attention and support, and I'm proud to participate in this discussion. So thank you, Mr. Chairman, and I yield back.
Ken Calvert
Thank the gentleman. I want to make a comment. Mr. Mike Rowe, who is host of the Dirty Jobs and The Way I Heard It and CEO of the Mike Rowe Works Foundation and an unwavering leader and subject matter expert on these topics, was invited to participate in this hearing, but unfortunately was unable to attend. Mr. Rowe has sent a video statement for inclusion, and without objection, his video statement will be included in the record, and without objection, we will now play his statement.
Mike Rowe
Hello, friends. My name is Mike Rowe, and I am delighted to be here with you today, virtually, to offer a very brief testimony at this field hearing for the industrial base and workforce development. First of all, to Chairman Calvert and Ranking Member McCollum, apologies for my casual attire and non-traditional surroundings. Circumstances beyond my control have brought me to northern Wyoming, of all places. It's a long story.
I would much prefer to be there with you in person, however, because this issue really is near and dear to me and has been for the last two decades. Some of you might remember a TV show called Dirty Jobs. It's still on the air. The best thing to come out of that show was a foundation called Mike Rowe Works, which I launched on Labor Day back in 2008. My intent 19 years ago was to launch a kind of PR campaign for a couple million really good jobs that were open in our country that did not require a four-year degree.
Electricians, steamfitters, pipefitters, mechanics, welders, plumbers, CNC operators, HVAC technicians, shipbuilders. There's a long list of really good jobs that employers were struggling to fill. So I did what I could to make a more persuasive case for those jobs, and over time, we morphed into a scholarship program, and today I'm delighted to tell you that we've awarded nearly $20 million to 3,500 men and women to help them get the training they need to fill these jobs. Anyway, 15 years ago, when things started to get going, I went to Congress to pitch an idea for a large national effort to reinvigorate the skilled trades on a national level. I really thought it was important that our country do that because the skills gap was wide and it was getting wider.
And today, 15 years later, it's wider than it's ever been. It's real. Don't let anyone tell you the skills gap isn't real. There are millions of jobs open right now, 400,000 of which exist in the defense industrial base. These are the people who build our submarines and our warships and our planes and so many other essential items.
And I don't believe I'm overstating it when I tell you that the people you're going to hear from today are here to ring the metaphorical alarm bell. If I had an actual alarm bell, I would ring it right now because not a week goes by that I don't hear from the CEO of some Fortune 500 company or the leader of some consequential industry or a governor or any number of elected officials who are starting to understand just how serious the issue is. We have a 10 to 12 trillion dollar infrastructure that needs to be built out in the next decade. We don't have the workers to do it. In the private sector, that's making people's heads explode.
But in the Pentagon, it's a matter of national security. We simply must reinvigorate the skilled trades and we need to do it yesterday. I'm so happy to tell you that Mike Kadenacy is on the case. The honorable Mike Kadenacy, you'll be hearing from him today. He was the guy who just six months ago reached out to me 15 years after I testified before Congress to say, okay, let's talk about what this campaign might look like.
What it looks like is an initiative called buildfreedom.us. He'll tell you more about it, but you can go to the website anytime and you can see for yourself just how much opportunity exists today and how important it is that we close the skills gap. That's my message in a nutshell. Again, I'm sorry I'm not delivering it in person, but from a Motel 6. Anyhow, that's the way it is.
Thanks again. Good luck with the hearing.
Ken Calvert
Thank you, Mike. It looks like a nice Motel 6. We thank Mr. Rowe for contributing to this hearing. Gentlemen, your full written testimony will be entered into the record. Please provide a summary of your statements.
We're going to start with you, Mr. Chuning. We happy to give you recognize your time for your opening comments.
Erik Chuning
Chairman Calvert and members of the subcommittee, thank you. Thank you for this opportunity to testify about America's defense industrial base and skilled workforce. This is the fourth time I've offered testimony to the US House of Representatives on defense industrial base issues, and I appreciate this subcommittee's unique importance to keeping our warfighters armed and ready and the freedom forge working full blast. I serve as the executive leadership team on HII, America's sea power company. The mission of HII is to deliver the world's most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world.
Our ability to execute this mission is only possible by a dedicated skilled workforce of 45,000 employees. My HII colleagues represent a remarkable mix of skills, everything from high school apprentices in maritime trades like pipefitting and welding to master shipbuilders with over 40 years of shipbuilding experience to PhDs in cutting-edge scientific fields driving state-of-the-art advances in manufacturing, artificial intelligence, and autonomous systems. Each of our three divisions, Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies, fulfills a critical role in the generation of sea power and the integration of all-domain capabilities. While our three divisions have unique needs for their respective workforces, the importance of workforce development and the continued recovery of the maritime industrial base remain paramount in the execution of our mission.
HII has been building and modernizing warships since Teddy Roosevelt's Great White Fleet first established the United States as a global maritime power. In our 140-year history, we have seen the ebbs and flow of US shipbuilding. The post-COVID-19 era has been particularly hard for US heavy industry, shipbuilders included. And while challenges still remain, we are confident in the American shipbuilding renaissance currently underway. Today, with a sense of urgency, we are using our hard-earned experience to accelerate throughput in our shipyards and revitalize American shipbuilding.
In 2025, throughput in our shipyards increased by 14% year-over-year. And with approximately 40 ships at Ingalls and at Newport News in active construction or modernization, our focus in 2026 is clear. We must build on this momentum and continue delivering ships at greater pace to the US Navy. We are targeting a 15% year-over-year throughput increase in 2026. Our throughput acceleration strategy consists of three parts.
First, we are hiring, teaching, and retaining a 21st-century workforce through wage increases, a network of vocational schools, in-yard education, world-renowned HII apprenticeship programs, and quality-of-life investments for our shipbuilders. Our shipbuilding workforce has endured in spite of the double-digit attrition driven largely by the inflationary impacts of the post-COVID-19 economy. Thanks to support from the Congress and the US Navy, earlier this year, Ingalls Shipbuilding entered into a new collective bargaining agreement with union leadership at the shipyard. The contract provides an immediate base wage increase of at least 18% for union-represented shipbuilders and projected total wage growth of between 35 to 47% over the life of this agreement, marking the single largest wage increase in the history of Ingalls Shipbuilding. At Newport News, collective bargaining agreements were extended with our unions in 2025, providing steelworkers, for example, an average base wage increase of 20% with projected total wage growth at 31% over the life of this extension.
Collectively, these investments reflect a commitment to maintaining a highly skilled workforce by providing competitive wages and a standard of living commensurate with the critical demands placed on our nation's shipbuilding industrial base. Second, we are building new shipbuilding infrastructure with approximately $600 million in capital investments planned for 2026 alone. An example of our deployment of new manufacturing technologies is our High Yield Production Robotics, or HYPR program, which leverages a network of emerging industrial technology companies like Path Robotics and GrayMatter Robotics to rapidly accelerate our use of physical AI in shipbuilding. Earlier this month, we announced an historic contract worth up to $900 million with our HYPR partners, where we would guarantee production agreements should their technologies meet Navy certifications and demonstrate improvement on cost and schedule to Navy programs. Third, we are expanding the maritime industrial base by growing our supply chain and implementing a distributed shipbuilding strategy.
We plan to outsource over 2 million hours of work in 2026, a 178% increase from 2024. We have partnered with 23 smaller shipyards and manufacturing centers to build components and large structure for integration within our shipyards. Not only does this approach increase our throughput, but it also creates jobs in communities across the country. This strong demand signal gives small and medium-sized businesses improved confidence to invest in their own capacity and workforce, contributing to shipbuilding industrial base revitalization. In conclusion, I'd like to share an example of the American shipbuilding renaissance in action.
Last year, we acquired the assets of W International in Charleston, South Carolina. The business was underutilized and employed several hundred welders, most of whom were trained at the local community college, Trident Technical College. In W, we saw a vision for a flexible, advanced manufacturing campus that would uplift the submarine industrial base. In partnership with the Navy, we invested to modernize the facility. In partnership with the state of South Carolina, as well as the IBAS program within the Department of War's Industrial Base Policy Office, we expanded the local training programs to grow not only more welders, but also a broader set of maritime trades like electricians and pipefitters.
Today, we are on a path to grow our Charleston workforce to a thousand shipbuilders by the end of this year, and there's more room to grow. A powerful example of what we can do when industry, the federal government, and state governments work together to revitalize America's maritime dominance. I want to thank the US Navy, Congress, and this subcommittee for its support. We look forward to continuing to work together to strengthen America.
Michael Reed
Thank you, thank you, Mr. Chewning. I now recognize Dr. Reed for your remarks. Doctor?
Chairman Calvert, Mr. Case, and Valadao, and distinguished members of the House Appropriation Defense Subcommittee, thank you for the opportunity to address you today regarding the critical importance of workforce development and skilled trades education to America's defense industrial base. I am Michael Reed, president of Pennsylvania College of Technology in Williamsport, Pennsylvania. Penn College educates and trains approximately 10,000 students and incumbent workers annually through degree, certificate, apprenticeship, dual enrollment, and short-term training programs. For more than 113 years, we've adapted quickly to industry needs by preparing a highly skilled workforce through a hands-on, industry-driven education model. Our story began with returning World War I veterans learning new skills to re-enter the workforce.
Penn College is a nationally recognized applied technology institution and special mission affiliate of the Pennsylvania State University. This collaborative partnership is closely aligned with Penn State's land-grant mission. Together, Penn State and Penn College create a powerful combination of research, innovation, and workforce development. Penn College graduates enter careers in advanced manufacturing, welding, automation, aviation, heavy equipment, electrical, construction, information technologies, transportation, and other essential and other essential to America's economy and national security. Just as importantly, they develop durable skills, including problem-solving, adaptability, communication, collaboration, and confidence.
Employers consistently tell us we produce the workforce that knows how to figure things out when challenges arise. Today, I urge the subcommittee to recognize workforce education, particularly investments in skilled trades, as a strategic imperative for our national defense. 20 million Americans work in skilled trades, yet we're not producing enough talent to meet demand. Today, there are roughly three jobs open for every skilled trade graduate, creating a workforce gap of more than 1 million workers. As nearly one-quarter of the skilled trade workers approach retirement, this challenge will only grow.
America possesses the most advanced military systems in the world, but those systems ultimately depend on skilled workers who build, maintain, troubleshoot, and deploy them.
At a time when our Department of War is calling for greater manufacturing capacity and defense readiness, we simply are not producing the technical talent at a rate required to meet demand. Aircraft, submarines and naval ships, armored vehicles and weapon systems cannot exist without welders, machinists, electricians, automation specialists, mechanics and countless other highly trained technicians. In Pennsylvania alone, the defense workforce now includes approximately 190,000 employees across nearly 9,000 companies. More than 288,000 defense-related parts are sourced in Pennsylvania. These numbers highlight the importance of maintaining a strong pipeline of skilled workers.
I'd like to highlight four key points with you today. First, workforce demand continues to outpace supply. Manufacturers throughout the defense supply chain consistently report difficulty filling positions requiring technical skills and industry credentials. At Penn College, employers regularly recruit our students before graduation and tell us they could hire significantly more graduates if they were available. Penn College graduates achieve a 98% placement rate and according to the US Department of Education's College Scorecard, our graduates now earn 36% more than the national average for all college graduates.
To be clear, the challenge is not job availability, it's talent availability. Second, education-industry partnerships are essential. Addressing workforce shortages requires strong partnerships between educators and employers. At Penn College, more than 4,000 employers shape curriculum and training experiences. Industry-supported equipment helps power our 150 plus labs and last year alone we implemented more than 200 curriculum updates to keep pace with industry needs.
As Congress considers investments to strengthen the defense workforce, I strongly encourage support for institutions and programs with demonstrated success and capacity for growth. Strategic investments in proven programs, equipment, faculty and employer partnerships can rapidly increase the number of skilled workers available to bolster the defense industry base. One example is Penn College graduate Ken Healy, who's now the executive vice president and director of engineering at PMF, which is Precision Metal Forming Industries, a Pennsylvania manufacturer that supplies critical components to the aerospace and defense industries. Today, Ken hires Penn College graduates and interns to help meet the workforce needs of his growing business. His story of rapid growth and superior production capabilities demonstrates the power of workforce education and the importance of maintaining a strong pipeline of skilled talent.
Third, the talent pipeline challenge is growing. While workforce demand continues to rise, the number of traditional college-age students is shrinking. Pennsylvania's projected to experience a 17% decline in high school graduates between 2023 and 2041, a trend occurring across much of our country. To meet this challenge, we must expand technical career pathways, strengthen career and technical education programs, support apprenticeships and increase awareness of the opportunities available in the skilled trades. These are good-paying jobs with a bright future.
These are jobs that are also less likely to be replaced or reshaped by artificial intelligence. Fourth, workforce reskilling and support for displaced workers must remain a priority. Meeting workforce needs will require more than attracting the next generation of workers. We must also create pathways for adults seeking new careers and displaced workers affected by technological and economic change. At Penn College, we have seen how short-term training programs, apprenticeships and industry-recognized credentials can help individuals transition quickly into high-demand, well-paid careers and contribute to our workforce.
Flexible financial aid and support for short-term training programs can significantly expand the talent pipeline while helping individuals achieve economic mobility and long-term stability.
In conclusion, America's military strength depends on America's workforce strength. The defense industrial base cannot grow, innovate, or meet national security demands without the technically trained people. Investments in workforce education, technical training, apprenticeships, scholarships, reskilling programs, and skilled trades development should be viewed not simply as an educational expenditure, but as a strategic investment in national security. To address workforce challenges at the speed required to meet national security demands, we must build upon what already works, invest in existing facilities, programs, equipment, and partnerships that are already producing strong workforce outcomes and are positioned to succeed. When Penn College invests in expanding capacity, our programs do grow.
The college also traditionally maintains waitlists for programs that align most closely with the defense industry workforce needs that are positioned for expansion. On behalf of the Pennsylvania College of Technology and our many industry partners, I thank the subcommittee for its leadership and attention to this issue. I respectfully urge continued investment in programs and initiatives that strengthen the skilled trades workforce and ensure America maintains the industrial capacity necessary to sustain our defense mission. Thank you for the opportunity to provide this testimony.
Ken Calvert
Thank you, Dr. Reed. Since the advisory notice of this hearing, my staff's received requests from stakeholders to submit statements of support. Without objection, statements from the following organizations will be included in the record: the Associated Builders and Contractors and the Riverside Community College District. First, I'm going to start with questions. Mr. Case, Mr. Valadao, and I are going to probably go through a couple of rounds here.
We'll first designate seven minutes for each person and then we'll see how many rounds we can get through. We'll go through about 2:15 on this panel and then we'll go to the second panel. So I'll recognize myself for the first seven minutes. We went on a tour here at the College of the Canyons and one of the things that struck me, you know, in my prior life I developed industrial parks and things like that over the years, and it looked like a small industrial park going through some of the requirements that it takes to build these various, you know, labs. And I know that is extremely expensive.
Can you give the feeling of the infrastructure that is required by these technical schools to do this and how much more it costs? It must be significantly more than a typical college classroom.
Michael Reed
Yeah, certainly. Welcome. You know, it is, it costs a great deal more to deliver effective applied technology education than traditional education models. As similarly as we walked through the tours, you could see the level of equipment. I'm going to speak mostly for from the Penn College perspective, which there's a lot of similarities between the campus we're on today.
When we first, when I first think about infrastructure, I want to first look at it as what is that baseline and what's needed to produce highly effective applied technologies. We're sitting on 515 acres at Penn College with 150 plus labs that are already built out, over 4,000 industry partners, and a highly effective and lean trained team. When we think about operations of what that costs to build out, even just to update and stay current with today's technologies, and we look at just the rapid advancements within within the applied technologies and the engineering technologies, our operation costs range usually around just to keep things operational about $150 million a year to build. We could expand, but it would take significant investment within those key lab areas to build out that infrastructure.
I was asked once if we had to rebuild Penn College at a different location from start, what would it be? And it would, I mean, it would be a 10-digit figure to try to build that out based on the acreage, the labs, the equipment, to build something out of that extensive. And so when we think about what would it cost for the technologies, it's one is you have to have the financial investment to build. Two, you have to have the land, the power, the energy to part. And you also have to have the ability to staff it and to build out the partnerships that are necessary.
So it is a, when I look at our general ed courses in comparison to what our technical courses, our students spend a tremendous amount of time working with their hands in the labs. To build out those labs, it's significantly probably eight, nine, 10-fold to build out that space. And then two, the delivery even on a daily basis, it's about four or five times more expensive to deliver those programs just based on the commodities that go through, the energy, and then the staffing numbers that are in that space.
Ken Calvert
Certainly, I understand that. I'm curious, Doctor, if obviously the demand for skilled workers is very high. We've had this discussion. But to, and you have a supply problem, and obviously when you have that, obviously that there's going to be significant demand. Do the students, your students, how many offers do they get before they even graduate?
And then if after they graduate, can you give us a sense of the salary range for these recent graduates?
Michael Reed
Sure. First, yeah, our students, especially within the programs that we're talking about, are extremely high demand. Many students are looking at multiple offers well before graduation. Most of our graduates, whether it's in a certificate, associate degree, or bachelor degree, they have offers that they're already exploring before their graduation of this year. Those usually emerge during the fall semester.
We have a 98% placement rate of our graduates. And as mentioned even in testimony, look at the livable wage where we're 36% higher than a national average of a US college graduate right now. So what does that land as a starting salary? That's usually between a starting salary between 65 and 70,000 with a lot of room for growth. And then there's also the advancement because we, you know, the technical skills are so important, but I also want to point out the durable skills are equally as important for someone who's willing to adapt quickly, to learn, can pull a team together, that can problem solve, that can communicate effectively and pull the teams.
And our students walk out with a business understanding behind their trade and the durable skills within, and they advance quickly within their fields too.
Speaker 8
So it's accurate to say that virtually all of your students are hired and they're hired at a 35% plus higher salary range than a four-year college.
Michael Reed
So yes, we cover the whole range. But that looks at, in the way the US Department of Education, they pull together graduates of all programs. Correct. Yes. And we do have four-year degrees too.
So that would be, I think that includes certificates and bachelor degrees if I understand the Department of Education scorecard system correctly. But yeah, they do very well.
Amazing. Mr. Case.
Ed Case
Thank you, Mr. Chair. Mr. Chuning, I'm, let me just ask you a really basic question. If there's so much demand, then why isn't the market kind of taken care of the problem? Why aren't we seeing, you just renegotiated a tremendous new contract with your workers. Does that lead to a kind of a cascading effect of greater interest in the program, greater retention, greater interest on your part in investing in training programs and apprenticeship programs?
I guess where I'm going with my question is there's kind of three ways we can approach this admitted challenge. We can, I'm talking about we, the government. One way is to let the market take care of it. One way is to come in with complete subsidies from government training, training right across the board, just we're going to solve this problem for you.
And another way is kind of the hybrid that we're pursuing. But I am asking the question, if there's so much demand, will there be an adjustment under which we actually will see, I mean, that's a pretty compelling figure. If you have 34% more coming out of these programs than an average four-year degree, that's your testimony, right? Then why wouldn't we see more people going into the trades to start with? And so I guess what I'm trying to figure out in my head is I don't want to overreact and throw money where it's not necessary because that will be an adjustment in the market anyway.
Erik Chuning
Yes, sir, I think over time the labor supply will increase to meet market demand. But let me maybe address your question through our lens. As I think about the workforce challenge, it really comes down to jointly attacking four different elements. So the first element for us is how do we find folks that want to work in a trade? And as we've talked about, up until recently, kind of the culture in the United States has been to get a good job you have to go to a four-year college, right?
And I think changing that perception is something that's going to require industry, academia, and the government to work together on. We do our part. We engage actually at the elementary school level, in addition to middle schools and high schools, about telling folks, hey, going to get a maritime trade working with us leads to a great life, right? That culture, and I'll give you a good example, folks who come to our apprentice school, we recruit them out of high school, we pay for their time at the apprentice school, that's a $270,000 investment per student by us. They get a multi-year apprenticeship, there's no college debt, and they come out making $80,000 or more a year.
Right, that's a great value proposition and that should help us over time expand the pool of the maritime trades. The second piece is in that, in that, in that sort of link is how do we convince them to work for us? Right, so if we all agree we need to increase how we think about the, the trades, how do we then as an individual employer tell someone, hey, come work with me specifically? The most important thing about my company is our mission. Right, we build the most powerful ships for the US Navy.
That's going to get people excited, right? If you believe in the mission, then the second thing we have to do is we have to deliver a livable wage. And as we talked about in my written testimony, up until recently, we had trouble with wages because of the nature of the shipbuilding contracts, right? Unlike other industries, we have one customer, most of our contracts were struck as firm fixed-price contracts pre-COVID. And when you saw a 30% increase in manufacturing, those contracts weren't able to keep pace.
Now with support from this committee and, and the Navy, we're able to get those contracts adjusted and we're able to increase wages and that's helped retain, retain and attract people into the workforce. The second element within that is the geographic concentration of shipbuilding trades, right? Shipbuilding trades tend to be concentrated in certain geographic areas of the country. So what you find is similar employers sort of working to try and get the same types of trades within that area. So that's led to our work around the distributed shipbuilding plant, where in instances where we can't get the workforce, we'll go ahead and take the work to where the workers are.
A third element to touch on is training, and we've talked about that in partnerships like with our technical community colleges as well as our own programs. We spend about $120 million per year on our own training programs within, within the company.
Ed Case
How much? 120 million? Do you invest in the actual schools? I'm talking about a direct investment in, in the, you know, we saw, we saw incredible capacity here, College of the Canyons today, with the needs for an upgrade to provide. Is that, do you invest in the schools themselves, a direct investment in upgrading their training abilities?
Erik Chuning
Yes, sir, so we've got, think about our investments along a couple different lines.
So one would be in our own facilities. Second would be partnerships we have with the 80 different community colleges and technical schools that work with across the country where it's not just an investment in potential infrastructure, but it's providing the curriculum, it's providing the teachers, it's working to help uplift those pipelines that we need to make our operations work.
Ed Case
Okay. Do you, you're right, we did fund you tremendously in the post-COVID time to keep those those incredibly important production lines going, part of which went to to employment, to maintaining your your employment base. With the with the increase in your, well first of all, I think you have a better demand signal from us. I hope I hope you would agree with that. We've we've funded these programs, but I guess my real question is we came in on a kind of one-time emergency to to jump-start the entire, you know, production capacity including employment in the post-COVID period when you lost a lot of people to retirement, etc.
Is that something that has to continue or are you back to a sustainable level where you can actually continue to fund your the workforce at the levels you need, at the increased salaries that you've provided over time, or is that is that something where you have an expectation that somehow that's a that's an ongoing subsidy to you? I won't call it a subsidy, but definitely coming in to help you out.
Erik Chuning
Yes, sir, so as the as the pre-COVID contracts roll off and then we establish new contracts with the Navy for the post-COVID economics, those contracts reflect sort of the the realities of what it takes to hire and train a workforce today.
Mr. Valadao.
David Valadao
Thank you, Chairman. Dr. Reed, one of the challenges we hear about across the skill trades is the workforce is aging. Many of the professionals with the highest level of expertise have spent decades developing those skills, and those are exactly the type of experienced individuals we want helping train the next generation. Is it possible to recruit the talent needed to serve as faculty, and what are the chal- are some of the challenges you face in getting someone who has spent a career in the field to make a transition into teaching?
Michael Reed
Yeah, thank you. It, you know, first, I can't thank our team enough. The the dedication and the and the skills and expertise of our faculty and staff is truly extraordinary. And when we look at the applied technologies and the trades and the experiences that they have in industry and how important those experiences are to to make sure that we're delivering the best programs possible are just so incredibly important. So much of it depends on on the program and the areas.
Some of our programs, particularly in the engineering technology space, are more complex and more difficult. What we typically see is somebody working in industry for an extended period of time, maybe at a point in life where they want to give back or build out. We talk about, I really like what you talked about purpose, and you see if you get to build the next generation that's going to keep that's going to be the backbone of our country. You're going to see you get you can build that that next the next level of tomorrow makers to drive our to drive our our country forward. So we do get it is complex, it is difficult at times, some programs are more more challenging than other.
But, you know, where that again where kind of put on that infrastructure point is so critical is with having 4,000 industry partners that help supply our labs, which help drive our curriculum changes, which lead as advisory boards for all of our committees, often times we can we can recruit our our faculty and staff through those programs too. So having that entire ecosystem of growth is is really important.
David Valadao
So how many of your faculty are also working full-time in the trade they teach, and what are they typically balancing between their work in the field and the classroom?
Michael Reed
Yeah, so most of our faculty have worked full-time in industry before, and many of them while they're I mean their teaching load is heavy. We're not a research institution, we're a teaching institution, so our faculty will be teaching anywhere on average between 15 and 20 credit hours. In approximately we have about three hours of lab for every hour of lecture, so our faculty are with our students a great deal within the space. What a lot of our our particularly our trades experts will do, they will be teaching full-time during the year, but they may be providing consultation with other companies or during the summers or during the break areas are spending a lot of time working closely in industry of balancing to stay to stay current within their industry space, but also kind of maximizing their calendar to to both contribute in the industry space and to to build the student the the workforce of tomorrow.
David Valadao
I mean it sounds like it essentially be two full-time jobs, so it's difficult, but are there ways to make it easier for experienced tradespeople to teach part-time while continuing to work in the field?
Michael Reed
I think it's is there is there strategies? Yeah, I think there's always incentives that can be that can be made. I think first and foremost of we talk we continually talk about what is our purpose, what is our mission, how do we build, and and often times that is a lot to build. The other is most of us are wired to want to help, and there's there's opportunity to to help build in that space. I think creating other unique incentives for for industry partners to share their expertise, I think there's always opportunity there to to get on the radar.
David Valadao
I imagine compensation is one of those. I mean even one of the Most certainly. the professors today mentioned that a lot of the students who are graduating making more money than the professor themselves, and so to take a part-time job taking less. But what else outside of compensation do you think it could be?
Michael Reed
You know one is within I'm just going to speak on our ecosystem within itself. You're coming in with our our faculty, we've 270 full-time faculty on our campus, and you haven't 270 experts that you're going to be working with and learning with and engaging with every day to try to set the next the next level. So there's incentive to be able to grow and learn and develop within that space. There's also some some pretty nice benefit incentives too for dependents can can also obtain this applied technology education at at no or low cost within that space. So there's there's incentives to help the family to kind of grow.
We and we have to make sure we keep our salaries competitive too to be able to attract in the best talent to build our next generation.
David Valadao
No, that's fair. Is there a particular change, whether related to funding, credentialing, partnership partnerships with industry or any something else that would make it easier to bring experienced tradespeople to the classroom?
Michael Reed
I think it's a yes and. I think it's I think there's not a one I think it's going to have to be a multi a multi-pronged approach. We have to continually work with our industry partners to show to create those partnerships where we can build those relationships, show the value within the space. We have to be able to compensate our professionals at a level that's competitive, and and I think through that process we'll be able to continually sustain.
David Valadao
So it was mentioned earlier during the tour that sometimes the the transition from the day they graduate to getting the job, sometimes you need folks with more experience and companies want to hire folks with more experience. But Mr. Chu, you mentioned earlier that you're taking folks and you've got you're investing yourself. Is that the norm in the industry?
Erik Chuning
Sir, I you know I can't speak to the way all industries operate. I know just given the importance of maritime trades and like I said, some of the programs we've established, like our apprentice school's been around since 1919. And so I think we've had the recognition and we often think of ourselves as a workforce development company, that we're we've got to invest to make sure those trade skills are there in place.
Now, we're obviously operating at a scale, you know, with 38,000 shipbuilders, that maybe small-medium enterprises couldn't, and so they're probably more dependent on external sources. That said, the partnerships we have with the local community colleges across the country are an important feeder for us as well.
David Valadao
No, that's one of the things I hear from parents in my district most often is kids graduate, they've got a degree in a field that makes the most sense, but getting that first job, getting that experience under their belt is always the biggest hurdle. And it sounds like you've figured that out in your own company, but we need to do that across more boards, more broadly in more industries. And I guess a question for either one of you in the last 20 seconds if you want to try to address a better way for us to handle that.
Michael Reed
You know, I think what's been effective for us is setting up internships with companies, particularly local companies, while students are in taking their coursework so they can get that relevant experience. We also have job fairs which allow students to get even summer internship work or paid experience within those fields, and that gives them that experience before they earn their certificates and degrees.
David Valadao
And I think we'll be able to come back when I get the second round. So I appreciate and I yield back.
Ken Calvert
Right, thanks. Thank you. So interesting in the testimony, obviously it costs significantly more to build these classrooms than it is a typical classroom where you have desks and a particular professor teaching a class. And it takes more teachers per student, I would presume, because you're working with equipment and difficult, potentially, you know, safety issues that have to be adhered to and the rest. Another issue, when I was a young person a long time ago and was going to high school, we had metal shop and we had wood shop, learned how to use wood, you know, learned how to use tools, various others, vocational as they used to call it back in the day.
Those all went away. All went away. And of course in a lot of schools too, I mean, I remember we had calculus in high school when I was going to high school and physics and all that. All that went away in a lot of schools, not everywhere, sometimes it's geographical in nature. But that's got to be a challenge in itself.
And then I think also culturally, parents and grandparents wanted to see their children go to college and get a four-year degree, which is noble and it's great, but sometimes people are pushed into degrees where it's difficult to obtain a job after they get that four-year degree. And I guess there may be sometimes a certain stigma attached, as I mentioned in my testimony, well, you don't have a degree, a four-year degree, whereas the students that you have, they get a paycheck and a significant paycheck and a job and they don't have debt. All of those positive things. Can you kind of, how do we get that out to young people today that this is an honorable profession, it's well-paid, and you don't have the costs, and I would hope that the stigma issue is going away. Would you agree with that?
For both of you.
Michael Reed
I think we're making progress. We have a lot of work to do but we're making progress. When we think about who influences students' decisions, classroom teachers, parents, grandparents, those are the three big ones. We're dealing with a generation of parents right now that their parents may have lost their jobs to offshoring. We're dealing with grandparents who maybe worked in the manufacturing space when maybe it wasn't as it is today with the space and they want to see.
Do you want to start?
So I think there's work that we have to educate those key influencers of what's in that space. And also exposure. As you mentioned, we used to within the middle schools and high schools had a lot more access to the applied technologies and the hands-on and there's less of that in some respect. We're starting to see more of that come back into particularly the high school areas. But that's where institutions like us and others that are similar, we have to do everything we can to get parents on our campus, students on our campus, to get in with our industry partners to walk through the labs and the factories and the spaces to see what these jobs look like of today and tomorrow and to show those pathways within.
I do want to point out is that our students do they still earn degrees whether it's an associate of applied science or a bachelor of science within that space. And there is cost associated with there and one of those barriers sometimes is the cost of tuition. And I think there's opportunity a lot of our industry partners have stepped up to provide scholarship or sponsorship within that space. We couldn't do what we do without the industry partners. But I think there's still a lot of opportunity to help as we reduce that stigma within that space but also to show how do we make it affordable for students to go through and earn these types of degrees and skills and credentials that they have a lot of pathways in and out to maximize those opportunities.
And I think ultimately the proof will be in the pudding, right? As we've established these pipelines, students go through those pipelines, they see the quality of life they have through the economic benefits, the training, they go back, they tell their friends, it scales over time. I think what we see is, you know, the people in our programs are excited about it and they go and they tell their friends and they come and that's how you help grow it organically. And I think that's an important element of it. As a country, we certainly have a lot of work to do to dig ourselves out of the hole we've put ourselves in, but we're doing the hard work necessary to get out of it.
Mr. Case.
Ed Case
Yeah, this is both for both of you. Dr. Reed, I'll start with you. So I made a comment in my opening statement just wondering out loud how we anticipate the job needs of the future, like ten years from now. So let's just say that we're going into the high schools. We all agree we need to try to reach people young in their careers to track them.
And we talked earlier today about getting in in the eighth, ninth grade levels, maybe even earlier in some cases. So you're then trying to interest a fourteen-year-old in a career that they would commence working with experience at twenty-four, right? Fourteen-year-old, two, three, four years, a couple of years of apprenticeship, they're into the full-on skilled trades at twenty-four. But you're interesting them in that ten years before they go into the job. And is that job going to be there then?
How do you try to anticipate this? I think back to robotic surgery. You know, twenty years ago I don't think you would have necessarily tracked somebody in a robotic surgery and yet today it's totally normal. And you know, for that matter, consider that ironically the college degree that we're talking about here, a lot of those jobs are the most in danger because of AI. And so how do you shoot into the, you know, shoot at a moving target ten, fifteen years out?
How do you actually, how do you work that into your curriculum, or for your cases, how do you track that into your workforce investment? And how does that relate to government assistance? Is it flexible enough to anticipate that? Let me start with you, please.
Michael Reed
You know, first is, I think we always have to go with our students and be eyes wide open as careers are going to change, industries are going to change, there's going to be disruptions within the technologies. And we try to listen very closely to our industry partners again. We have over 4,000 industry partners. Every program's required to have an industry advisory board, not to solve yesterday's problems, but to solve tomorrow's problems.
Speaker 10
Are you taking your leads from industry? Are they telling you what they need?
Michael Reed
Most certainly. We made over 200 changes to our curriculum last year based on that just ongoing continual feedback. And it's how we, that's how we teach, and we hire industry experts to deliver these programs. But again, I still think we look at what data, what information is available to inform students as they want to, it's always about putting the student the most competitive position for long-term success. And when we look at where are the job growths happening, what's projected over the next five or 10 years, there's so much within the infrastructure, defense, the manufacturing space in our country just based on those needs.
And whether AI has massive advancements or not within the current area, those needs are still going to be there. So if people want to wager on a safer bet, it's likely that when your air conditioning goes out in your home, you're still going to be calling a technician regardless of what AI is available. When a bridge needs to be inspected and built, it's going to be that workforce that goes out when you're doing the inspections within the space. And that's, so I think that's going to be key is that while there's always going to be evolution, disruptions, and how to maximize opportunities, that core foundation of our defense, that core foundation of our infrastructure of our country is going to be there.
Ed Case
Okay. I'm sorry, Mr. Trining, let me, I'm going to go back to him just because I'm running out of time for another question. We've talked here mostly about really large, complex, you know, the most advanced machines of defense here, aircraft carriers, submarines, fighter jets, etc. And so we've been talking about that workforce, but we've got all kinds of stuff that we need in the defense industrial base. We talked earlier today about munitions, which is our, really our number one priority here right now.
And we've got a whole range of other stuff going on in defense from very small-scale parts being provided to somebody else to mid-scale to larger scale, everywhere in between, all kinds of stuff, all kinds of trades, all manner of needs there. Does your program and the support that you get for your program, do you have enough flexibility to adjust to all of those various needs? Is that an industry demand, like, hey, I need more munitions, small munitions technicians or whatever?
Michael Reed
The short answer is yes. We try to develop our programs that have a wide range of making sure that students have the skills and expertise. And when I think about, like, let's just look at the manufacturing and the manufacturing engineering and automated manufacturing and the amount of subcontracting that happens within some of these smaller manufacturing space to keep our military and those parts, maybe those small components. Making sure students understand the various technologies from a five-axis machine to working with electronic discharge machines to make sure that they're able to build those high-tolerance pieces. And when they're being hired by these companies, that company may not be solely 100% military contracting.
They might be contracting out with a significant amount of different partners, but they're going to be, they are going to be well-equipped to take on some of the more complex assignments with the tightest tolerances and so forth in that space.
Ed Case
Okay. Shooting at the dark, shooting into the future of what you need and how to train to it, what what do you how do you know how your jobs are what your jobs are going to be in 10 or 15 years?
Erik Chuning
So I think I think there's there's two important elements to that. One is that tight linkage between industry and academia, as Dr. Reed mentioned, and then in our case also with the Navy, because the Navy will put a requirement around the tech warn holders around what kind of manufacturing process can go on a US Navy warship. And so that that three-legged stool of us all working together is an important element of it. And then I think the second piece is manufacturing innovation, the innovation around how we actually do the processes is so critical. And I think that linkage also helps inform that, because it it's it's not like the future will evolve de novo, it's going to evolve based on how our relationship evolves, feedback from the Navy, and all that goes into how we train the workforce.
David Valadao
Thank you. I know we finished off and were cut off, I don't know if you did you want to add something to that last question I asked, or I can just go on to my next question.
Go ahead.
David Valadao
I appreciate that. All right, so we'll start off, I was one of the shop kids in school. So I took all my welding classes, did all the different things, in fact one of the trailers I built as a sophomore in high school we still use on the farm pretty regularly today. But today, now as a member of Congress going around the district, I mean I've had situations where like one day I went to a graduation for a continuation school and talking to a bunch of the kids after graduation, a couple of them mentioned they were going into some welding programs. And the way they made it sound, the way they said it to me was almost like they were settling and not proud of what they were doing.
And and I reminded them, like there are lots of amazing opportunities, but that doesn't mean you have to be embarrassed, but there's a lot of money, there's a lot of resources, a lot of opportunity. But how do we get rid of that stigma? And that's one of the things that I struggle with the most, and are we getting enough kids? I've got some of the schools in my districts that are actually investing in some of the shop classes, I mean McFarland's got this amazing McFarland, California just north of here, has spent a bunch of money on their shop, they've done an amazing job there, but there's a lot that are starting to pull back, they're getting less students engaged. I mean what are you guys seeing on that front, are we doing enough to get kids interested in this, proud of this, and wanting to step into these roles?
Erik Chuning
I think it's something we need to continue to work on for sure, right? I think we've all acknowledged that culturally we've had a de facto industrial policy that has promoted people to go to college, and we need to adjust that to get folks actively working in the trades. And and I think what we where we have seen success is through dedicated efforts by the government, both federal, state, and local, industry, and the local local educational resources all providing the same messaging back and getting people excited about what it is. I mean it and to be honest, it should sell itself.
Michael Reed
I agree. I think we're making progress. When we look at even just the amount of applications that are coming in, the amount of people touring campus, I think that message is slowly getting out. We got to continually stay pervasive on on that messaging. We talked about how that population is going down, however we have increased enrollment over 13% over the past four years, so we're starting to pull more students into those into these such important areas.
And I think it is it's a societal problem that we got to keep hammering because that student who put their head down when you were talking with them, that's because he got he or she got feedback on that space of to feel that way because it was if they're feeling less than, they've had an experience from what they've had with other adults in that area. And how do we keep educating particularly the influencers of these of this next generation?
David Valadao
No, and that's the issue that I struggle with because even when I take staff or friends or even colleagues to my family's farm, I drive around and I show them and I point things that I had built, welding, pouring concrete, whatever I did. And it's something I take pride in, and it's something that I'm like very proud of. My staff I think makes fun of me behind my back because I like to point those things out, but it's something that I think there's an art behind. And when you see some of these folks who obviously do things that you see on the internet, the creativity behind some of the designs and some of the products that are being built, it attracts folks in that direction. But into the industrial side where obviously it's a much larger operation, you're not going to have an influencer inside of one of your shipbuilding yards, maybe you should, but trying to bring some positive attention to those types of roles.
I mean, what can we do more? What are we doing wrong? And what are we missing here?
Erik Chuning
I think some of this may, Congressman, come down to time, right? And I think an important element of that is the success associated with programs like what Dr. Reed and I are talking about. People will see the benefits of it. They'll get excited about it. They'll see the new trucks driving around as a result of the wages and the opportunities associated with it.
And to your earlier point, people will vote with their feet. I mean, eventually the people will vote with their feet because they'll see where the opportunity is.
David Valadao
Do you feel like we're doing a good enough job of getting the information out on the opportunities out there for wages and lifestyle and all these different positives of these roles?
Erik Chuning
I think we're trying, but I think more work needs to be done given the challenges we've talked about here.
Speaker 12
I know for where we are locally, that's a focus area for us. I can't speak to all the areas.
Michael Reed
Yeah, I think it's similarly in some areas, yes. I think these are areas that are yielding a result and we have to perhaps even amplify it even more to get that message out to make sure we hit that tipping point where people see, you know, there was something that was said that Eric said earlier I just want to revisit again. When we think about the trades and the applied technologies and we think about what we're talking today with our national defense, like what an opportunity to serve in a unique way, how to lift our nation. And I think there's an opportunity there that we could be pushing that message even harder to say, one is there's well-paying jobs and two, our national security, you could be part of the solution to our long-term national security needs.
David Valadao
Is there room for every student that wants to go to a class to learn these trades, or are we turning any away?
Michael Reed
There are students being turned away because we don't have the lab space to handle all the applications that are coming in, particularly within some of those targeted areas. And I can speak on Pennsylvania too. We have seen a shift of more students going into the high school technical areas and some of those programs are now getting waitlisted. So some of that marketing is getting out and we got to figure out where those bottlenecks are. And when we do know where they are, how do we strategically pull together, like that three-legged stool, to say, okay, if we have a waitlist in this program and we know we have a 98% placement rate and we know our nation needs it, how do we invest in these areas so that we can continually accelerate and grow?
David Valadao
Because I think you mentioned earlier that there was almost three job offers for every student. And so there's obviously a bottleneck there. And if there's not enough room for every person that wants to get into these programs, I mean, we do need to make some changes there.
Michael Reed
Yeah, and where that comes from, and that's where again, my testimony is I think it's strongly encouraged to look at opportunities to invest in this space for those that do have the opportunity to amplify and expand to invest in the long-term security.
David Valadao
Well, the tour we saw today, they're making a huge investment. We just need to see more of that across the country. For sure. All right, thank you, and I yield back.
Ken Calvert
Thank the gentleman. You know, a point, it's an interesting conversation. I come from the business world and some of the best people I've ever worked with started at one profession and continued to work through that profession as they got additional education.
We have so many opportunities now to go to night school and online and still get their four-year degree. When I was in the restaurant business, a small chain of restaurants, cooks became chefs and chefs became managers and managers became eventually owners of their own restaurants. And I would presume that or assume that the same thing applies if you're a great welder and you're going to night school, you learn how to do other things and you may be an executive at Huntington Ingalls someday. And you're probably a better executive because you understand what's going on in the shipyard from day to day and you can see the complexities of the industry from that light. And so I think that we can help hopefully change this stigma to say, hey, this is just not only does it pay good money and you come out of this with a smaller debt potentially, but you can continue your education.
And if you want to move on to an executive position at Huntington Ingalls, there's I'm sure that you guys love to bring people up from those positions into management. So just as we did in the restaurant business. So we thank you, both of you, for your testimony. And we're going to recess for 15 minutes and then we'll start up again. Thank you.
Thank you.
Okay.
Speaker 13
If everybody could have their seats, we're going to be resuming the hearing in about one minute. Thank you.
Ken Calvert
Today the subcommittee is conducting a field hearing on the defense industrial base and workforce development for skilled trades. In our first panel we heard from the witnesses representing industry and academia. In our second panel we'll exchange ideas with the government. The Honorable Mike Condan-Anzi, Assistant Secretary of War for the Industrial Base Policy. In fiscal year 2026 I worked with colleagues on both the Defense Authorization and Appropriations Committee to establish and fund a new effort called the Civil Reserve Manufacturing Network, or CRAMEN for short.
It exists to address the qualification and certification barriers that prevent commercial manufacturers or new defense manufacturers from serving as critically needed second and alternative sources in our supply chain. CRAMEN was aggressively pursued by Congress knowing the nation must be able to leverage the national industrial base in addition to the defense industrial base. Now the department must advance the Civil Reserve Manufacturing Network to maximize American manufacturing. I'm keenly aware of the difficulty of this task and equally aware of the upside of breaking through the barriers and constraints related to certification and qualification. Additional manufacturing capability and capacity, which is what CRAMEN will provide, will not be successful unless we also address our workforce challenges.
As previously noted on panel one, over the last several years appropriation bills have supported significant investment for workforce development for skilled trades, largely for shipbuilding. But we have other industries obviously out here in the aerospace industry. According to the analysis conducted by McKinsey published in January 2026, between 200,000 and 250,000 maritime workers specialized in welding, assembly, fabrication, frontline management are needed in the next decade. It's worth noting again, shipbuilding is one of the many industries with a significant demand signal for welding and fabrication, but I would say the same thing about the aerospace industry here in Southern California. According to the American Welding Society, approximately 20% of the welding force are approaching retirement and in 2025 they estimate the need for 320,000 new welders by 2029.
These estimates are prior to the data center boom, or some people now call the compute center boom, which relies heavily on welders and fabrication. Last but certainly not least is the access to critical minerals. Critical minerals are foundational to the entire supply chain by providing raw materials to sub-tier suppliers, which manufacture components and increasingly employ the most skilled trade professionals as compared to the original equipment manufacturers, often referred to as primes. We were reminded in April 2025 of the vulnerability and fragility of our supply chain when China imposed export restrictions and licensing requirements on critical minerals and permanent magnets. The administration has prioritized investments in critical minerals, permanent magnets, and energy infrastructure, leveraging authorities in the Defense Production Act of 1950 and the expertise of investment professionals in the Office of Strategic Capital.
Understanding the criticality of both the Defense Production Act and the Office of Strategic Capital, we worked very hard in fiscal year 26 to return Defense Production Act funds to no-year funds and did the same for the Office of Strategic Capital.
I would now like to turn to my friend Mr. Case for his opening comments.
Ed Case
Thank you so much Mr. Chair. I said quite a bit in my opening statement and I certainly look forward to Secretary's testimony along these lines. I think you know we've heard from both industry and the education community and I think the key question we obviously have is are we on the right track now from a federal perspective and that has several ingredients to it. So some of this stuff that we're going to get into now is a little bit more in the weeds about okay what are we actually doing. You have some very innovative and as I said promising and productive programs going.
How do we improve on them? How do we fund them because they're on kind of short-term funding streams and so that's one thing on my mind in terms of the next chapter of our of our hearing here is how do we how do we keep this nascent momentum going and is it going to continue to continue to produce? But that's really all I have to say for now Mr. Chair and we'll just get into it.
David Valadao
Thank you Mr. Chair. Appreciate the Honorable Kadin-Naze. I'm struggling with the name and I'd struggle even more with the title because you've got such a long title but I did listen to you on the podcast with Mike Rowe and I enjoyed listening to you there and I'm looking forward to this conversation. I think you breathe a lot of common sense to a very important issue that we're dealing with. So appreciate the chair bringing this committee together for this specific hearing and I yield back.
Ken Calvert
Thank you. Honorable Kadin-Naze, your full written testimony will be entered into the record. Please provide a summary of your statements and we recognize you for your opening statement.
Mike Condan-Anzi
Chairman Calvert, distinguished members of the committee, it is an honor to appear before you today to discuss the health of America's defense industrial base and more specifically the men and women of that industrial base. I want to thank this committee for treating the skilled trades with the seriousness they deserve. Let me be clear about the threats we face. For the first time in a long time, the primary threat comes from a competitor who can outbuild us in many of the most important weapons of modern war. We must meet that challenge by rebuilding the DIB.
We need to restore America's critical minerals independence, scale production of key munitions, gain full visibility into defense supply chains, and ensure the industrial base is ready to mobilize in the event of conflict. This undertaking requires patience, bipartisan commitment, and willingness to invest in something greater than any of us here today, future generations of Americans. There are no overnight solutions. Prior generations met the challenge but at no small cost. And the cost grows each day we delay our response.
That is my job now, to make sure we have the industrial base to meet that challenge again. My focus here today is on the skilled tradespeople we need to rebuild and scale the DIB. The engineers, the pipefitters, the welders, and those who make the world's finest weapons for our warfighters. Decades of government policy and societal pressure have driven millions of talented young Americans towards degrees which haven't delivered the benefits they were promised and have left defense manufacturers with few skilled workers waiting in the wings. There are as many as 400,000 unfilled skilled trade jobs in the DIB today and that number could grow to 2.5 million by 2035.
The efforts my organization manages are made possible by the men and women of our DIB whom I call the wizards behind the warriors. Strengthening and expanding our workforce, especially in skilled trades, is both our greatest obstacle and our greatest opportunity to ensure our nation's security. We need to reach Americans in their living rooms and classrooms, break the stigma of blue-collar work, and drive a massive influx of passionate, capable people into these programs. That's why the department launched the Build Freedom initiative this July. Build Freedom will act as a national hiring, training, and awareness campaign to drive America's resurgence in defense manufacturing.
Build Freedom aligns more than 70 Industrial Base Analysis and Sustainment or IBAS workforce projects under one campaign, ensuring that federally funded workforce opportunities reach the Americans they were designed to serve.
We've rolled out Build Freedom in three states, with plans to expand the program nationwide. This national awareness campaign will drive individuals to our new buildfreedom.us website, a one-stop shop where their interests can be converted into scholarships, training, credentials, and job opportunities. I was proud to launch Build Freedom with Mike Rowe and the MikeRoweWorks Foundation, with an initial $10 million grant that will fund more than 9,000 scholarships. Our goal with Build Freedom is to send a clear, compelling message to the American public: there are hundreds of thousands of good-paying, IA-approved jobs available today in the DIB and in other skilled trades. These jobs will allow young men and women to serve their country, build something worthwhile, and enjoy a better quality of life for them and their families.
The Department is taking aggressive action across our workforce portfolios. These programs range across all 50 states and down to the K-through-12 level, where last year we reached over 800,000 students wondering about what paths to take after graduation. In fiscal year 2026 alone, my office invested $340 million into workforce programs. Our training programs produced over 22,000 skilled tradespeople and technical workers for the DIB in the past year. To highlight a few examples, the New England Submarine Shipbuilding Partnership, as a part of SNETIA, has trained nearly 11,000 total students in skilled trade jobs to support the submarine industry.
SNETIA can train up to 4,000 students per year and is building towards 6,500 students per year. The Talent Pipeline Program provides hiring and onboarding and retention support for over 600 small-to-mid-sized DIB suppliers around the country. Our office is expanding this program to support sectors through the broader DIB. There is also a larger ecosystem of service, department, interagency, and local workforce programs. The Office of the Under Secretary of War for Personnel and Readiness recently established the Patriot Pipeline initiative, which provides transition pathways, including the transition to skilled trades, for veterans and their spouses.
The Department of Labor recently announced $162 million to expand registered apprenticeships, including $40 million for apprenticeships in shipbuilding and the DIB. The Department of War and Department of Labor have partnered to allow active-duty service members who log on-the-job training hours to earn a Department of Labor-issued certificate of completion of apprenticeship. The skilled trades have been in decline in this country for too long. If we are able to deter grand conflict, we have no other option other than to overcome these obstacles and invest heavily in the men and women of America. Rebuilding the Arsenal of Freedom is a crucial opportunity to bring back good-paying jobs to communities devastated by factory closures and outsourcing.
Under this administration, we are scaling the workforce that will secure this nation for decades to come. The Build Freedom campaign brings new energy and focus to the Department's commitment to secure the workforce of the future. The enthusiasm and support we have seen for this initiative has been remarkable. We expect these initiatives to deliver measurable, on-the-ground results nationwide, from Hawaii to Virginia, from the Gulf Coast to Michigan, and everything in between. This is a fight we can and will win.
Thank you for everything this committee does to resource these key programs. I look forward to working with you to maintain this momentum and ensure our workforce and industrial base can meet this moment. Thank you.
Ken Calvert
Thank you, Mr. Secretary. Thank you for that opening statement. I just, for those who are not informed of all the acronyms around here, the DIB means the Defense Industrial Base. So, thank you. I just, because I get sometimes caught up in that too.
Mr. Secretary, your team's leading the way in the Civil Reserve Manufacturing Network effort as I previously mentioned. And that's a means to maximize American manufacturing. And as you know, we didn't get here overnight. We 30 years ago, we went down this path of managed decline and we thought the wars were over. We defeated the Soviet Union at that time.
We didn't perceive any real adversary. So we went down a path to basically eliminate about 50% of our military capability. We probably did a little bit more than that actually. Went from about a little over 6% of GDP to less than 3% of GDP in the national security expenditures. Europe even did more.
They went down to significantly less than that to the point, as I pointed out earlier today, the Great Britain has 15 operative ships in their entire United States Navy. I don't want to pick on Great Britain. That's kind of reflective of Europe right now. It's so that's why they're going through this process to relook at their defense budgets and to re-energize their military capability. But along the way, as you know, we exported our supply chain and our industrial base elsewhere, primarily to China.
And so we woke up especially during the COVID period and found that our manufacturing capability is not what it needs to be, especially for our defense industrial base and which you're obviously extremely aware of. And we're aware of the certification and qualification constraints. I'd like you to share what you've learned about those constraints and what your team is doing to work through these various challenges and to get back manufacturing into the United States.
Mike Condan-Anzi
Thank you, Mr. Chairman. Certification and qualification issues are at the core of what is holding back the expansion of the defense industrial base. We have a series of requirements, often times which have been established in the Cold War or shortly thereafter, which are based on a rosy set of assumptions regarding our availability and access to materials and also the decision making. Things like shelf stable life for a weapon can sometimes be 30 years, which drives a set of requirements that are very distinctive, expensive, and hard to meet. We need to go ahead and update those requirements for the future.
And there's sort of five key tools that we're focused on to improve that. One, we need to go ahead and rebuild the technical engineering and scientific workforce that actually drives the decision making that underpins the qualification of weapons. Two, we need additional test equipment at every level to allow us to go through and do the kind of testing necessary to validate changes in weapon systems that will allow us to accelerate. Three, we need a substantially increased range and operational test budget to go ahead and allow us to deploy and fire weapons at a rate that allows us to rapidly advance and qualify new providers and new capabilities at every level. We need to go ahead and improve our digital infrastructure and data.
And then five, we need to go ahead and update all of the standards and modules and doctrine that underpin how we operate the C and Q enterprise. Collectively, we're working on things like reducing the certification and qualification timeline for second source rocket motors by 50%. This is a major aggressive target and something that is an example of a focus area within munitions that the department is undertaking. The industrial base policy team is taking the lead.
Ken Calvert
You brought up ranges. I and I know we have challenges across the board, but we have to, you know, we're on a we seem to continue to operate on a peacetime operation. I'll just pick one range out, White Sands. They operate, I think, nine to five, Monday through Friday and take weekends off. And I hear from a number of folks that are trying to test their capabilities and to get moving as quickly as possible to move their various products.
Do you share that concern about the range space and how we can use that more efficiently to get things out quicker?
Mike Condan-Anzi
Mr. Chairman, I'm not familiar with the particular issue at White Sands, but in general, I think we have underutilized and underinvested in our range capabilities in the past. They need additional instrumentation. We need more ranges to meet new requirements such as for unmanned undersea vessels and for UASs. We also need to update statutory requirements. I think Anduril CEO Palmer Luckey has been pretty public on his concerns about rules regarding FAA rules regarding the destruction of aircraft in the US can constrain UAS testing in a way that seems inappropriate when you're actually just working on to specifically test your ability to destroy UASs.
So there's a lot of constraints and we need to modernize the entire range and test infrastructure to meet the needs of the moment.
Ken Calvert
You mentioned modernization. We discussed I'm not going to pick on any one particular company, but there are various companies that have been in the defense industry for some time that have not put reinvested money back into their industrial capability. And their production lines are are literally from the past. And so the cost and the capability to build on scale is is not where it needs to be. And you mentioned we have some challenges on munitions.
What can we do to enhance our defense capabilities by or to and to push these production numbers up? What are we doing to to do that?
Mike Condan-Anzi
Mr. Chairman, as I think you're well aware, the Secretary of War and the Deputy Secretary of War have been aggressively pursuing moving the department to a war-time footing since the beginning of the administration. We've engaged in a series of initiatives. You're familiar with the Business Operators for National Defense initiative, the wartime production unit, and our focus on making sure that industry is investing in its production capacity at the shop floor. This is a matter of great importance to everyone involved within the acquisition and research and engineering enterprises. Our office alone will push over two billion dollars into munitions supply chains within fiscal year 26 and through the end of this year.
So this is major priorities for us. We're focused on industry and incentivizing them through the multi-year framework agreements, the MIPs, and we're excited to have those funded going forward. We think that sort of demand signal is going to be critically important for the future. We also think it's going to incentivize them to solve many of their manufacturing problems by virtue of the fact they'll be able to invest in things like workforce, technology, automation, and supply chains, which they need to be much more robust to meet the scaling targets of the moment. It's an all-hands effort within the department to focus on these critical areas.
Ed Case
Thank you, Mr. Secretary, and thanks for your service. I know you've you have other alternatives and you chose this one and really appreciate your turning to. I don't think you're even one year into the job, right?
This month, yes sir.
Ed Case
Okay, please don't lose your perspective because one year is a dangerous time. I'm just going to give you an open question. You heard the testimony of the the discussion that we had in the first panel with Mr. Chewning and Dr. Reed, you know, one from kind of the the trade training side and one from industry. Was there anything in there that you you had kind of a you wanted to comment on or that you thought was particularly relevant from the perspective of what you're focusing on?
Mike Condan-Anzi
I think it's very critical to under to for everyone to recognize how much effort is already underway by industry and by academia to to start closing the gaps. Mr. Chewning talked about HIAS program started in 1919. Pennsylvania Technical College, College of Technology has been around for a long time working these issues.
College of the Canyons has been working these issues at scale for a long time. And so there are multiple efforts underway. I think it also dimensionalizes the scale of the challenge we face. So Mike Rowe and our work on Build Freedom talks about that for every five skilled tradespeople that retires, two are entering the workforce. So we need to not only double the amount of current capacity, we need to more than double it, and that's just to keep pace with current trends.
Presumably we ramp up with the industrial base, we reindustrialize across the board as we start to separate from our number one strategic competitor, we'll anticipate that we have additional demand that we'll have to close for the workforce.
Ed Case
And, you know, we were we were talking to two of the major players here, of course one of the largest defense contractors in our country, and then one of the one of the best, you know, technical training programs in our whole country. And I guess it begs the question, how broad is that effort? I mean, we talked we talked in the first panel about how we're not just building the big stuff, we're building the small stuff and the really small stuff and the medium stuff, and it's all across the country. And do we have even the capacity in that area? I mean, are companies focused as HII is on their own internal apprenticeship, workforce training programs?
Do they need more help? I mean, that's a big company, they can do it themselves, but not all companies can. And then how much, you know, capacity do we have in the schools themselves to be able to produce the programs and the people that we need? Is that an area that we need to focus on as well, provide more far more incentive? I think about the small medium and small-sized companies who just get lost in the defense industrial base sometimes, I have them in my district.
Mike Condan-Anzi
So Congressman, it's a terrific point. I think we are likely to see the primes, the major aerospace and defense companies, more or less sort out their problems over time. It won't be easy and it won't necessarily be cheap, but they have the resources, the infrastructure, and the incentive to pull in the the resources and the people necessary to meet those requirements. Resources and interest will flow to them, you'll meet with them, you'll support that. But even if they meet their requirements, we're not likely to see their second and third-tier suppliers, to your point, be able to go ahead and scale at the same rate.
They won't have the same access to capital, they'll have challenges with people moving from particularly smaller towns and companies up to the bigger companies in towns, that that natural draw of talent will occur. Therefore we need to double down our investments in the second and third tier of the supply chain, which is where we focus, and why we have 70 programs across the country to make sure we're not focused only on the major fleet concentration areas or the development areas like Norfolk or Dallas or Los Angeles. We need programs all across the company. We need them in the Gulf Coast, we've got programs in Mississippi and Arkansas and in the Northwest and the Northeast to make sure that we're adequately addressing all of the problems. And that's part of the excitement of the Build Freedom campaign is it provides us a galvanizing force to unify not just our programs, but also our affiliate programs that we work with in the companies, the programs that we talk to and touch every day, to make sure that we're all aligning efforts in the most coherent way for the greatest impact to meet just the problem that you've laid out.
Ed Case
Yeah, I mean, as you talked, I was I was recalling our colleague on the subcommittee, Ms. Kaptur, who comes from Ohio. And her her point as she drives home all the time is is the is the devastation of of the industrial base in that part of the country. Do you do you consciously go out there and try and find companies and and, you know, efforts in those parts of the country as well where, even if even if industry is not there, is is there a way to respark respark that in those areas as well by giving that technical assistance? I mean, you don't have the large defense contractors in those areas, but you certainly have still industrial training, industrial capacity, people needing jobs, far more than other parts of the country. Is that a conscious effort to spread it around and?
Mike Condan-Anzi
Absolutely, Congressman. So I'm lucky in this job as the Assistant Secretary for Industrial Base Policy that I inherit the Office of Small Business Programs. We've actually rebranded that the Industrial Base Growth Team, because the goal is not just small business, it's also new entrants of any size. So think the Andurils of the world. We want all those companies to be part of the DIB without losing focus on small businesses.
As part of that office, we have a series of tools and capabilities to include the APEX Accelerators, which Congress has robustly funded in the past, which is 96 separate programs in 300 plus locations, which are almost always tied into a local university or local economic development authority that allows us on-the-ground capability. Last year, I think we talked to 26,000 firms that generate over $65 billion worth of Department of Work contracts. It's an incredible tool to actually get beyond the major, you know, industrial hubs to connect with companies that are in places that you wouldn't normally be able to get to. So it's leverage for us to identify those companies. We also recently launched linksconnect.io, which is our online platform connecting all new entrants.
And so if you go to linksconnect.io, companies can sign up. We're encouraging all of our APEX partners to use that as our galvanizing platform, and we're going to use that data set to drive additional connectivity, and we'll link those into Build Freedom, we'll link them into our needs that we're getting from industry as they come to us and say, we're having a problem finding a casting company. We'll be able to go out and use those tools over time to directly connect companies and sort of matchmake and provide some liquidity to that market.
Ed Case
Okay. I will tell Ms. Kaptur I did her job for her today. I probably made some points with her. I'll defer until my next round.
Ken Calvert
Well, speaking of Ms. Kaptur and Ohio, Anduril, as you mentioned, they're building a significant plant in a previous manufacturing facility right outside of Columbus, Ohio, and they're going to employ several thousand people there. So she should be happy.
Speaker 18
I don't think that's her district, though, so she's not going to be all that happy.
David Valadao
Thank you, Chairman. Secretary Kadenacy, what are the most significant workforce constraints facing the defense industrial base today, and where are these shortages having the biggest impact?
Mike Condan-Anzi
So, Congressman, I'm not sure that there's one particular thing you can point to. I'm sure if I talked to Mr. Chuning from MCI, he'd talk to particular skills for naval quality welders at the yard. I'm sure if I went to Dallas, I'd find constraints in the aerospace sector. I'm sure if I went down to Palmdale here, there's concerns locally about their ability to build the most classified and advanced aircraft weapons in the world. So I think it's all of the above sort of problem that stems from engineers and scientists to work in the aerospace and defense industry down to welders, pipefitters, machinists, you name it.
The scale of the gap on the skilled trade side is where we're so particularly concerned. Again, I think that market economics will sort out the engineering and scientific issues. As we start to reindustrialize, demand goes up, they'll be some of the first people brought in to design weapons and the capabilities of the future. The 2.5 million dollar gap to 2030 is sort of our current trajectory projection of the gaps in the defense industrial base. As you look forward and you think about additional demand, you think about additional conflict, other tensions that may arise, that is a sort of a baseline assumption and potentially the floor for the need within the DIB.
So that's our focus is on the overall number.
David Valadao
So you kind of hit my second question, but where are the shortages most concerning for you?
Mike Condan-Anzi
So I think oddly, you know, the Chairman in his opening statement mentioned minerals. This is something we're increasingly concerned about. Last year, we received $5 billion through the one big beautiful Build for America Act to invest directly into critical minerals. You mentioned the MP Materials deal and the issues we've done there with rare earths. We've done a series of deals in that regard and investments.
But part of the challenge in ramping up mines is that there's just not as much of a robust mining workforce from the mine all the way through to production and refining through to recycling. It's a major challenge and one that we've actually added in as part of our workforce commitments this year is mining, because I think it's at the base of every supply chain. And you can have dreams of scaling up production of weapons, but if you don't have germanium, gallium, and yttrium, it's going to be very, very difficult for you to meet that requirement.
David Valadao
All right.
Are there specific regions of the country or parts of the defense industrial base where the workforce challenges are more severe?
Mike Condan-Anzi
I think yes. So we can see places like New England which have ramped up substantially. They've gone through a cycle, if you went to Maine, they went through a cycle of difficulty with the yards there with regards to shipbuilding. There are challenges in Connecticut, or Eastern Connecticut around Electric Boat and the ramp up of the submarine fleet. They're seeing things and challenges in Newport News around the the increase of the the number of ships that they need and the workforce retirements post-COVID at HII.
So those are some of the big places. However, I do think there are pockets that are likely to see additional strain. Arkansas, the rapid increase of the munitions capabilities there, the number of companies moving in is going to go ahead and start to pressure them and that's a place where we're really excited about finding opportunities to connect and grow. The Gulf Coast, we've well known that. There's a series of yards along the Gulf Coast that all share the same workforce and compete on them and as we increase the demand there and invest further, we're likely to see additional pressure.
And then the California marketplace given just sort of the the prices for a lot for where to live, the the mix of capabilities and sort of the the additional requirements to survive here and operate a business make it incredibly difficult. We recognize that's something that we're working on. We're partnered with Workshop for Warriors down in San Diego as part of our commitment to making sure that San Diego's getting part of the workforce that it needs.
David Valadao
So, obviously we're here at this campus and we received a tour today. There's a ton of industry nearby and it makes it very convenient for a lot of the companies to come and spend time and help make sure that this educational institution is doing a great job of serving their needs. I'm about two hours from here. My district, the border of my district's probably an hour from here. A lot of the focus of of my local schools, I mean they're trying to diversify obviously.
I mean you've got some robotics in some of the programs, I've got some coding, they call it gaming to get the kids more engaged, but it's more focused towards coding. But getting folks in communities like mine where we can start to get more kids interested in some of these trades, how do we do that without the industry being in those regions? How do we attract those kids and maybe even work with those educational institutions so that we can help train for some of those programs in those job opportunities here and hopefully create the the workforce that would encourage more investment in regions like mine, the Central Valley?
Mike Condan-Anzi
That's great. The Industrial Base Analysis and Sustainment workforce programs predate Build Freedom by a decade. There's been a at the at the focus and the core of these growth programs is a desire, need, and recognition of the requirement to connect with students in elementary school, middle school, and high school and just expose them not to the DIB per se, but to the essential elements of working within the skilled trades. So for example, we have the MIRROR program and the ACE programs are part of our commitments in K through 12. We'll go into a school and melt chocolate to go ahead and talk about forging, right?
So we'll literally go ahead and do with chocolate things around casting. Um so those are really interesting, you know, capabilities that allow us to go ahead and connect with kids, get them excited. Our approach is that if you don't get kids excited in elementary, middle school about the trades, by the time that they graduate high school, they're not actually interested or they've they're significantly more challenged. And if your next generation of submarine builders is in middle school today for 10 years from now, so we've got to get them excited in the moment. We also need to go ahead and talk to their parents, and the parents are often times have gone to college.
Um sometimes they're the first one in their generation or their family to go to college.
We need to help the parents understand that this is a great alternative for their children for the future. And we also need to talk to the grandparents. The grandparents oftentimes worked in the trades and were excited to get their kid into college. And now you're asking that grandparent to look at their grandkid and say they're going back to the trades. And so we often talk about, you know, Jenny was the first person in her family to go to college.
Maybe it's Billy's the first kid in his family to return to the trades. We've got to start thinking differently about that communications model. That's at the heart of what Build Freedom is trying to do from a messaging standpoint and why it's so critical that we partner with Mike Rowe, who brings arguably the number one brand and sort of messaging and storytelling around this challenge for the country. All right. And I've got some more questions for the next round.
So thank you and I yield back.
Ken Calvert
Thank you. I'm going to spend a little more time on the critical minerals part of this conversation. I remember when virtually all the critical minerals that you referred to were mined and processed and refined here in the United States. And after, you know, in the early nineties, we started pushing it offshore. It's a dirty business.
Mining's a tough business. You know, the environmental movement, a lot of that was just pushed it offshore. And now China controls over ninety percent of all critical minerals as I understand. Is that correct?
Mike Condan-Anzi
Of rare earths. There're different portions of it, but in almost every case, China is also the leading partner from a production standpoint, the leading provider from a production standpoint.
Ken Calvert
And one of the minerals that are of critical importance is magnets. Magnets are in everything. And we are now taking an equity position. I, you know, as a conservative Republican, I never thought I would see the day that the United States government would take a equity position in companies. But we're in a hurry.
And a lot of these companies, I would assume, didn't have the capability or the to go to the financial markets and borrow the capital or to have a pricing mechanism that can determine whether or not that's going to be a profitable business to be in. And I understand that. And so we'll just take the magnet industry as one that we'll look at. So we created that market mechanism in effect. And some equity and the ability to use the Office of Strategic Capital, for instance, to obtain capital to get those industries going.
Now we've done that with magnets in a couple of instances. What are we doing with some of these other materials that like gallium you mentioned, I think bauxite, a bunch of them. What are we doing to attract those industries back into the United States?
Mike Condan-Anzi
Mr. Chairman, it's a terrific point and one that you summarized well. We made a lot of decisions about a rosy set of outcomes that were just-in-time supply chain driven that have resulted in critical dependence on our number one strategic competitor for a huge number of critical minerals and a whole bunch of other industry partners across the world as well. So we've spent an incredible amount of time in the department to go ahead and understand where we think our number one dependencies are. We've identified twenty-plus minerals that are at the top of our priority list. And we're systematically mapping out our dependence on those minerals while also mapping local and regional and international supply chains.
We're then making decisions, hard decisions about where to invest the money that we have, both from the Industrial Base Analysis and Sustainment fund, the Defense Production Act, and in partnership with the Office of Strategic Capital and our interagency partners at the Export-Import Bank and Development Finance Corporation. We are harmonizing those and Department of Energy as well.
We're harmonizing those investments to make sure that we can maximize the impact of that over time. And we're working structurally wherever we can. Sometimes we're able to work left to right from production at the mine level through to production and refining. Other times we have to go ahead and work in an opportunistic way. A plant comes up.
You've seen that with some of the investments we've made around Ormet Alcoa in Louisiana, which is the last aluminum provider in the country. We decided that was a critical national security capability that needed to be maintained. So there's nothing but hard tradeoffs there. People have robust debates about whether we should have invested here or there. I'm we're wide open to all of them given the demands, but we need to start converting and closing some of these gaps.
And that has been the focus of our team is to work incredibly tactically with an analytic mindset. And I am blessed with a super talented minerals team. We work with the National Defense Stockpile team at the Defense Logistics Agency as well. Collectively, in partnership with our interagency colleagues, we've been able to go ahead and move lots of money out into critical minerals issues, and we're anticipating more of that over the next year.
Ken Calvert
Yeah, when you when we think of critical minerals or rare earths, we we think of these relatively de minimis products, but they have every very important in order to make things work. But how about things like uranium? We used to produce during World War II, obviously, we were in a hurry. We we knew where the uranium was and we went out and got it, but we didn't do a very good job of it at the time. We're still paying the price for it.
But we have a significant amount of uranium in the United States. And now we're the biggest suppliers of uranium are Russia and and Canada. And so we're somewhat dependent on one an ally we're having a little difficulty with right now, but I'm sure we'll get it resolved, and one an adversary. And so how do we solve this uranium because I I see a transformation going on, maybe it's just me, but I think there's a much more acceptance, especially with small modular nuclear reactors that have obviously a military potential, a military capability, but also in the in the economy throughout the United States. What are we doing about uranium?
Mike Condan-Anzi
Chairman Calvert, uranium is one of the few minerals that's not giving me a headache because we've punted that over the Department of Energy where they have the lead, and so we're working off of their plan. But your general position on access to minerals, I think, is a is a fair one and one that we understand is that a lot of times we don't have enough domestic capacity. One of the things that I am pleased to mention is that when we put out an RFP, a request for proposals from industry on almost any mineral, we find a robust number of domestic companies and suppliers. The biggest challenge they have is getting access to capital because every time American minerals companies start to scale, they're undercut by marketless practices of our number one strategic competitor. And so what we're looking to do is leverage the tools that have been put in place by the administration, tariffs, etcetera, in partnership with Project Vault and other agreements, there's the preferential trade zones, to go ahead and make sure that we're adequately providing the transparent pricing mechanisms, which you mentioned, that are the mechanism by which any company is going to be able to determine whether or not they're operating effectively.
And then capital can make decisions about investment. So part of our hope here is that our investments will catalyze additional commercial investment from the private sector, family offices, etcetera, to make those companies grow and scale to meet our needs for the future.
Ken Calvert
Yeah, we almost we must have an a some kind of process in order to guarantee a price because the Chinese subsidize their their rare earth industry and then undercut their, you know, the competitors, let's say in the United States, where they make it economically impossible to produce a product at any profit at all.
So that's the situation we found ourselves in magnets. I suspect that's the case in just virtually all of these things that we have to rebuild that industry. So it's a challenge and I appreciate your taking it on. Mr. Case.
Ed Case
Thank you. Mr. Secretary, let me let me just try to get into the weeds on some of the appropriations stuff. So we have this huge problem and we've got various federal programs to try to contribute to the solution of the problem. First of all, is it fair to assume that that we're in agreement that the IBAS or IBAS rather, Industrial Base Analysis and Sustainment program, that's that's where we've got most of our eggs in this basket right now?
Mike Condan-Anzi
Yes, it's completely funded out of the Industrial Base Analysis and Sustainment program.
Ed Case
Correct. But and that's part of the question. So let me just ask you this part of the question. So are there any other programs that we should particularly be paying a lot of attention to in any of the other federal agencies? I mentioned in my opening statement Department of Labor and you talked about partnerships with the Department of Labor and they do do apprenticeships, they're just not totally focused on the defense industrial base.
Right. So IBAS is where the action is right now. Okay. So I'm just kind of looking at the appropriations that we've sent out there. We went 146, 147 million in FY25.
In FY26, we went 348 million, of which 328 was mandatory. And then your FY27 request is 2.75 billion, of which 2.58 mandatory. That's a huge ramp in a very short period of time, which I don't necessarily object to. The need is there. We obviously have to do it.
I think first of all, just just so that I can understand kind of get myself up to date, have you basically allocated now all of your FY26 mandatory? Because my figure is only up through May and it showed about a 75 million dollar or so balance.
With for the workforce program?
Ed Case
Congressman, yes, we're essentially completely executed, obligated on the workforce program, to my knowledge.
Mike Condan-Anzi
All right. So that's all that's all obligated or or designated, I should say. Yes. Okay. Is there any particular reason why you're putting so much in mandatory?
Is that your decision or is that up above your scale somewhere? Why are you I mean, if this if this is such a priority, then why aren't we putting this all in discretionary in the discretionary side?
Ed Case
Congressman, it's a fair question. We proposed a budget, there were decisions made above our level to go ahead and reallocate based on the best interests of the department and negotiations with OMB and others, and the numbers wound up where they are. I don't have a strong answer as to why the balance is that particular number, but that's what we were given.
Speaker 19
Okay. Well, it I mean, it begs the question. You're spending 350 million in FY26. You want to ramp that up almost 10 times in FY27, but you're totally backloaded on the mandatory side. And we haven't there's no guarantee that you're going to get mandatory funding.
So what's what's the contingency plan if you don't get the mandatory funding and assuming we actually do pass an FY27 bill on the discretionary side at 167 million, that's a that's a 50 percent cut in IBAS. What's what's the kind of contingency plan on that?
Mike Condan-Anzi
Congressman, I think this is a program that is a major priority for the department. Our goal then would our decision then would probably be to go ahead and deprioritize other aspects of the IBAS portfolio. So we work across eight sectors: workforce, chemical, strategic and critical materials, microelectronics, batteries.
We had discussions today about the growth of the capabilities here at the College of the Canyons. There's several large initiatives that we'd like to undertake to support major regional initiatives with partners that I think would be successful. These funds would allow us to go and tackle those in partnership with the Build Freedom program. So it would grow the brand, grow our expanse, and grow the connectivity we can do nationwide.
Ed Case
Okay. So just, okay. So basically what you're saying is you're going to keep the workforce program going. You have to keep it going. You have to keep the momentum whether you get the...
Mike Condan-Anzi
Build Freedom is a top three for me, Congressman. I would take additional risk in other parts of the portfolio to continue to fund Build Freedom.
Ed Case
Okay. And turning to Build Freedom for a second, I mean, going back to some of the questions I had in my opening statement, do you have an ultimate target that you're trying to get to in Build Freedom? What time frame? Do you have a kind of a stabilized annual spend that you're aiming at in Build Freedom? It's such a huge task to fill an immediate shortage of 400,000 and a... I forget what you said in your testimony...
2.5 million over time.
Ed Case
Exactly, over time. I mean, that seems to be something that would have to be continued for a long time at a substantial expense.
Mike Condan-Anzi
Yes. So, thank you for the question, Congressman. We've built a FYDP... we're in the process of building a Future Years Defense Program plan that I think is going to reflect a reasonable laydown of what we expect the program would need over the longer term as part of this workforce plan for the future. Obviously, the prospects to build a budget that reflected RECON spending offered a surge of funds that we could take advantage of, or potentially a surge of additional funding. The stable FYDP-based plan will reflect what we think is a more long-term baseline.
Although, to your point, there is a huge delta relative to the demand going forward. We think we could put a huge amount of capital to work on these programs with our partners locally and really start to go ahead and move the needle on this problem for the future. So we should come back and brief the committee on this plan at some future time. Happy to go ahead and do that.
Ed Case
Does that approach, the FYDP, mid-term I think you would probably say, right? Does that anticipate that actually that money moves around a little bit? In other words, you spend some money in your three areas, but they become kind of self-sustaining at some point because they get locked in as a habit, as industry takes over a little bit more, do the community colleges get to know how to do it better and then you kind of move on?
Mike Condan-Anzi
Yes, so that is our goal is essentially to go ahead and start projects, get them up and running, demonstrate the impact of those projects, and transition them to some partner. So for example, in Danville, Virginia, the ATDM program, which provides 16-week apprenticeship welding courses for essentially the maritime trades, but the defense industrial base broadly, and is a major feeder into HII. That program we've funded since the beginning to the tune of 28 million dollars a year, I think is what the request is next year. Our goal is with the Navy will go ahead and take over funding for that in 2028. And so we're going ahead... we've demonstrated the impact, the Navy likes the program, industry likes the program.
We're hopeful that they'll go ahead and pick that up and that'll be a smooth transition. So that is our goal in most places is to find local transition partners who want to carry on the good work that we started. But we bring a level of expertise regarding investment and how to do this and understanding of how to build curriculum and programs, and also hopefully people find it attractive, the Build Freedom framework and program, which provides them access to a national network of capabilities.
Ed Case
Okay. And then I'll defer for the next... you cool?
I I would love to go back to something that I talked about at the beginning, which is a little bit more localized, but I hope makes a point here. Hawaii, of course, we've got Pearl Harbor Naval Shipyard, we've got Honolulu Community College, we're doing workforce development. But I think one of the key ingredients there is the personal directed attention of PACOM to what's going on because they have very specific needs. And you know, they're into, as we as we know, certain kinds of manufacturing, certain kinds of specialization that that forward their plan, deployable, you know, abilities to deploy forward. And and it seems to me that that's a little bit of the secret sauce too, is that you have a military that's personally engaged and localized in a way, right?
So that the demand signal is not necessarily the department writ large. It is the PACOM. It is that's what's going on. And they're training that workforce for that purpose and you're structuring your your your your investments on the workforce to their needs. Is that something that is common elsewhere in the country?
Because it does seem to me to be something that is particularly relevant and particularly valuable and it kicks everybody into a certain frame of mind because the the the challenge and the opportunity is far more specialized to what the need is in that theater.
Mike Condan-Anzi
It's a it's a terrific point, Congressman. I think the discussion between Dr. Reed and Mr. Chewning highlighted the importance of the connective tissue between industry and academia. Similarly with us, we feel our workforce programs are best structured as direct directly tied to the local needs of the community. So we don't tend to have like massive curricula that looks the same across every program. It's definitely localized and tailored.
And you're correct, the interest from Admiral Paparo definitely accelerates production of people's work and time within the Pacific theater. And so we've invested in the FORGE, which is our expeditionary manufacturing capability to support the 25th ID in its requirements to support theater requirements there. So we're invested on Schofield Barracks and not only in the building and in the machine tools, we actually are paying for the team that goes in and actually helps train soldiers and marines and sailors to use the tools. So it's essentially a workforce program within the FORGE. And then we've also paid for Honolulu Community College to go ahead and we funded, I should say, Honolulu Community College with the machine tools, the curriculum, and the trainer, Jake, who we moved in from the mainland.
He's having a good time in Hawaii, I think. Training locals on these new capabilities. A program has not existed in Hawaii, to my understanding, since the 1970s. So we're really thrilled wherever we can do it and we're looking for those transition partners on island to take over responsibility for the long haul.
David Valadao
Yes, we love him and if you're watching, please stay in Hawaii. We we want to keep you going. Okay, I yield back.
Thanks. Mr. Valdez.
Speaker 20
Thank you. There are a lot of pressures on the supply chain right now, from shortages in skilled labor to natural disasters and other unexpected disruptions. Can you walk us through how you monitor the supply chain and identify potential vulnerabilities before they become bigger problems? And once you identify a supply chain issue, what tools do you have to respond quickly to help address it?
Mike Condan-Anzi
I think if you looked at CMMC report, they thought there was 110,000 companies that needed to be CMMC certified as sort of the baseline for for what we're doing. The it's a tremendous challenge given the number of companies. Thank you, Congressman. So luckily there's a robust marketplace of tools that we have access to. We have terrific agencies like the Defense Contract Management Agency, which literally visits 18,000 factories a year, manages 350,000 contracts.
So we have a tremendous number of of tools to our that we are able to take advantage of. The biggest opportunity we have is to synthesize that into a more coherent integrated view. So we're excited to partner with all of our colleagues across the services on better ways to take advantage of it.
I think we have actually a fair amount of insight into things. I'm not sure we have necessarily taken advantage of the insight to date and actually acted in advance of challenges. So, part of what our office has put in place is Project Failsafe, which is our initiative to go ahead and actually go ahead and start looking left of problems and having a robust playbook to deal with problems. So we're monitoring and managing the disruption down at GKN in Garden Grove, which disrupted Transparencies' production for commercial and military aircraft. We're running the response for that and demonstrating the playbook that we've put in place across a number of issues.
Alloy Surfaces company in Pennsylvania, which made pyrophoric flares, we're restarting that in partnership with the Army, the Navy, and the Air Force. So there is a series of things that we can do and part of I think IBP can do for the future is emphasize a culture of action on these things, which is to actually not just wait for more further fidelity, that's always better, but to take action on the problems you see at the supply chain today. And that's the focus that we're putting on is to move out.
Speaker 20
How early are you typically able to identify a supply chain problem and are you generally getting ahead of these vulnerabilities or are we still too often responding once they become once they begin affecting production?
Mike Condan-Anzi
It's it's a great question. The the challenge I think is that we are not nearly as far ahead of the curve as we need to be. We need a more coherent set of tools and heuristics to understand what is a problematic supplier, who's the biggest problem, where in the supply chain should it be. I think programs and companies know about a lot of problems and don't necessarily have the resources or the time to take action. We need to go ahead and do a better job of sharing information across the department to find and get resources such as IBAS resources to a company that needs.
We've actually bought a diesel generator for a company that was getting cut off from its electrical supply. We got a phone call randomly to do that. We got that diesel generator in the company, they were able to continue operating. That's a great example of something that's kind of ridiculous, but is absolutely vital to avoiding problems and we're ready to do that up and down the supply chain.
When you identify a vulnerability, what determines whether the department can act immediately versus needing additional funding or an authority from Congress?
This is something I think is at the core of what what we're asking for for the future is the Defense Production Act funds being zero-year funds provide a unique capability and tool for us to have a pot of money that's available to deal with these unexpected crises so we're not having to immediately turn around and harvest from other programs that come at the expense of other initiatives or to come back to the Congress to ask for money those things. So that's a tremendous tool from a resource standpoint. Many of these problems are scaled problems. They're not cheap and they're not going away overnight. They require investment, particularly for factories or capabilities that are from legacy toolsets.
So we're trying to take factories and capabilities that were designed in the 70s, 80s, and 90s and solve the problem and you don't want to wind that up the way it was in the 80s, you want to migrate that technology forward and make sure you're operating in a 2020-ish kind of timeframe. And so that's the opportunity for us to do that.
And I know you mentioned the 18,000 inspections, but how closely are you working with the industry to understand where the vulnerabilities exist further down the supply chain, particularly among smaller suppliers and subcontractors? I mean, is that included in those 18,000 or is there a bigger universe that we need to be worried about?
I think there's a broader universe. So the 18,000 is solid and I think that there's plenty of problems there for us to work on going forward. But as you get down to tier four and tier five in the supply chain, you start to run into companies that are oftentimes multi-industrials, they're selling capabilities that are COTS, they're commercial FAR Part 12 kind of like, you know, parts if we were to buy them directly. What we need to do is actually drive our primes and our product owners to take more responsibility.
for the weapons systems that we need. We think that could be done in a way that benefits everyone where the primes can maintain profitability. We want them to be profitable, but we also want our weapons on time and I think that's a fair trade.
David Valadao
How do you often, how do you balance addressing an immediate supply chain disruption with making longer-term investments that prevent the same vulnerability from occurring again?
Mike Condan-Anzi
To me I think that's the core of the, one of the challenges that we've had in the past is a failure to effectively take existing manufacturing lines and make them more producible from an engineering standpoint. So we talked behind at lunch regarding demand signal and oftentimes industry complains about demand signal and we recognize that. There's no reason to have a factory cited for a thousand units a year if the DOD is going to buy a hundred. Perfectly reasonable. The issue is that over the past ten, twenty, thirty, sometimes forty years, almost no effort has gone into increasing the manufacturability of that weapon on a year-to-year basis.
So there's no way to ramp that production. It only scales linearly. If I have one plant in order to make two hundred of those, I need a separate identical plant. Otherwise I have to engage in what is a very complicated, long-term, all the issues we talked about for certification and qualification. We need to incentivize certification and qualification on a week-to-week, year-to-year basis.
The companies should probably retain some additional profit margin for every point of margin they put into certification and qualification. We'd love to see some compromise on that front where we can incentivize them to spend more time and effort on their own to help improve the producibility of the products.
David Valadao
I think you brought up an excellent point and we talked about it at lunch is sometimes these, these companies are building based off of our activities in, in a conflict or a war somewhere and to expect us to be producing as if we were always at war is, is asking too much, but when we need them, we need them. So, thank you.
Ken Calvert
Thank you. You, you brought up, we brought up the Defense Production Act of 1950 and thank God we passed the continuing resolution this last week because it was going to expire and we, it's nearly lapsed a couple of times in the last couple of years. I think we're going to need it more rather than less in the future. And so, you, don't you think we ought to get back to this Production Act to know your funds where we're not, we don't have that sword hanging over our neck?
Mike Condan-Anzi
Yes, Chairman Calvert, it's incredibly important that we reauthorize the Defense Production Act even as it is today because we use that six, eight hundred thousand times a year for the DPAS authorities under DPA Title One. The supply chain would not function without DPA Title One authorities nearly as effectively and it's not super effective at the moment as you've noted, as it does today. That's incredibly important. We also have robust authorities in DPA Title Three, which are best executed through our office, and DPA Title Seven authorities for voluntary agreements, which we've just launched one, we're going to have one in place here shortly on kinetics, munitions, to allow us to work with industry in a more aggressive way. And the National Defense Executive Reserve as well.
These are incredible tools for industrial mobilization, for allowing us to connect with industry and to work harder. So I'm, I just please reauthorize it as it is. There's obviously alternatives there to make it better. We'd love to see stronger tools to compel industry to take action on problems that we want. People often sort of say they're going to DPA a factory or a problem and there's not that robust set of authorities.
Many of those lapsed after the Cold War. So we'd love to see some of those authorities brought forward and we've proposed in partnership with the White House and the interagency some of those changes to the Congress.
Ken Calvert
Good. We'll work with you to make sure that happens. You, you brought up real quickly the problem we had in Garden Grove, that fire we had. I, you know, at first I, I didn't really was aware of the company and what they did. Then I found out later that what they were, I don't know if they're a few or only company that made the base component that went into the canopies for the F-35.
Isn't that, is that correct?
Mike Condan-Anzi
Not the only one, but they do certainly play a critical role in that supply chain.
It's not the best, sir. Yes, sir.
Mike Condan-Anzi
We're working our way through it. GKN's been an incredible partner along with our colleagues in industry that purchase the transparencies. The state of California, the EPA have been incredible partners. It's truly been an exercise in collaboration at every level, and we're seeing remarkable progress on our return to production in every way for that company and for the supply chain producers that need those capabilities.
Ken Calvert
Okay. Solid rocket motors. Obviously, I've heard more about solid rocket motors in the last couple of years than I have in the 34 years I've been in Congress, and I've mostly been on the defense side of things. And obviously, you engaged yourselves into a very interesting investment with L3Harris to develop solid rocket motors. I've heard from a number of folks over that investment.
I understand why it was done, very similar to why you did things on the rare earth side of things and other industries that we're doing. Maybe can you explain why we're concerned about solid rocket motors and the supply and how we're going to move forward to get what we need here in the future?
Mike Condan-Anzi
Solid rocket motors are indicative of a long-standing challenge within the munitions supply chain that is too many sole-source components and providers. So we have a major bottleneck in the one dominant provider, which was originally Aerojet Rocketdyne, and then the additional provider, Northrop Grumman, which was ATK back in the day. We also have a smaller European provider, Nammo. Those are the three kind of dominant providers five years ago, and they dominated the space. We've seen a series of entrants into the market, and we now have probably 12 or 13 companies that want to make solid rocket motors for the Department of War across a number of weapons platforms, the 50-plus rocket motors that we track.
The opportunity is for us to go ahead and have a much more resilient rocket motor industrial base, but we've got to start now. That's why the certification and qualification improvements process is incredibly important because even if we streamline the process dramatically, if I start today on weapons platforms, it's still likely to be two, three years before second sources are in place. So for us, we're investing substantially in not just the primes, the current providers, the core L3Harris, Northrop Grumman. We're also working on providing additional investments for all the new providers that are there. We recognize that those companies are often private equity-backed or venture capital-funded, privately held in some cases, that their attention span in this problem is likely limited.
We need to make sure that they're up, running, qualified, and a reliable partner for the department with a reasonable amount of business for them going forward. So our team is engaged in building a capacity study on rocket motors that we're going to use to sort of balance across all the different motor demands to say, I need a couple of first primary providers, I need some secondary providers that are dedicated, and then I also need some flexible capacity using the most cutting-edge techniques to allow me to have flexibilities of any lines or disruption. So we're thrilled at the opportunity to work on that for the department.
Ken Calvert
All these industries in which we're taking equity positions, how long do you see the United States government doing that? Are you going to, are we going to just get these companies rolling, get their market share, and then try to exit our equity position as rapidly as possible? Where do you think we're going to go with these transactions?
Mike Condan-Anzi
Mr. Chairman, the department's position is that we're not there for the long haul. Our goal is to go ahead and, first of all, secure access to the capabilities and catalyze additional investment into the target areas. We want to make sure that we're giving strong signals to industry that we're investing in these places, in these sectors, and we want to make sure that we're positioning the companies to succeed over the long haul. So we think this is a better tool for doing that, the department's position using the authorities under IBAS, DPA, OSC, etc., as they've been determined. But the goal is to go ahead and exit those positions within a reasonable period of time.
There's no strict date target as of yet on any particular deal, but there are plans to go ahead and exit each of these within a reasonable period of time.
Ken Calvert
The one that was, I thought was most intriguing, I don't know if you were involved in it or not, was Intel. Why did we take an equity position in Intel Corporation?
Mike Condan-Anzi
I can't speak to the details of that or the MP materials deal, they both predated me, Mr. Chairman.
That's fair. Mr. Case.
Ed Case
We haven't really talked a whole bunch about retention and in all of this. We've talked about getting people into the pipeline early and piping them in, and I was intrigued by your comments on focus on veterans and their spouses. So I just wanted to kind of get into that. Are there different approaches for people that are coming in mid-career, making a shift, or for that matter, vets coming out of the military and tracking into the skilled trades? Is that an area of kind of specific focus?
Mike Condan-Anzi
Sure. The department's taken an active interest in the veterans pipeline. The Secretary's made, if you look at his barracks housing task force, enlisted folks, their quality of life is a major priority. That extends to their decision to transition out and their families. The Patriot Pipeline is a USW Personnel and Readiness initiative to go ahead and target specifically veterans and their families, their spouses, and identifying pathways into other careers, of which skilled trades is one, and we're partnered with them on Build Freedom.
So it's a tremendous opportunity for us to go ahead and do more with an existing workforce that has an affinity for national security. They care about the department, they care about the country. They're likely inclined in some ways to go to defense companies that share a similar mission and passion. More broadly, the retention issue is something that we think is critically important. I think Mr. Chuning talked about the hundreds and something million dollars that they've spent on quality of life initiatives at HII to improve the workforce's experience on the job.
We see those coupled with pay, coupled with other changes in recognition for the type of things we're doing. We're getting Build Freedom to change the attitude towards careers in this regard, will be tremendously supportive of our retention objectives for the long haul.
Ed Case
Do you fund people coming out of the military, do you fund those out of IBAS, those programs? Do you do any programs that are specific to taking folks exiting the military and you want to track them into the skilled trades and keep them in the DIB?
Mike Condan-Anzi
We do have several of those. Workshop for Warriors in San Diego is our largest one, I think. I'd have to check and validate. But that's a program that's dedicated to people coming out of the military and teaching them trades so that they go ahead and find careers on the outside. Most of our other programs have a certain number of veterans that come through them, ATDM, etc.
They leave the military, they want the certification, they go through a program, and then they transition into a civilian career. So there's more of a smattering. There's not that many programs. I'd have to come back and tell you, get you a number on which specific programs are completely focused on veteran transition.
Speaker 25
Okay. I think that's it, Mr. Chair. I think I've exhausted myself for now.
Mr. Ballow.
David Valadao
I'll be brief as well. To achieve drone dominance and other DOD weapon systems priorities, United States will need substantially, will need substantially more energetics production than it has today. Much of the capacity remains concentrated in a small number of legacy facilities. What can the DOW do to diversify and distribute energetics production across the country, bring more innovative manufacturers into the defense industrial base, and engage a broader skilled workforce before demand becomes acute?
Mike Condan-Anzi
This is a tremendously important issue, Congressman. We actually, we have a team that does energetics within industrial base policy, congressionally funded, it's actually a DAFFA called the Joint Energetics Transition Office, whose job is chartered to go ahead, it's co-, we're the head, we're partnered with R&E as the deputy, is to identify projects which can be done and funded to actually accelerate what has been a historically underinvested in portion of the enterprise, which is energetics. There's a series of initiatives underway to increase production across precursor chemicals, a lot of energetics materials. We're looking to go ahead and put additional money, that's part of what we would focus on next year is within the JETO program, there's a request for I believe a billion dollars of projects next year to go ahead and fund those. That's the kind of capability we'd like to bring to the scale of the problem we see.
If we don't get that funding, we'll likely do some series of smaller initiatives as part of our overall kinetics portfolio within IBAS, but to make sure that we're touching those problems. It's critically important, we agree.
David Valadao
All right. Well, I've got no more questions, so I appreciate the opportunity and I yield back.
Ken Calvert
Thank you. Since we're here in California, I'll ask, I'll be somewhat parochial and ask a couple of localized questions. At the, at the end of World War II, we had a brief discussion about this, most ships in the United States were built right here in California. In the Bay Area, Stockton, that was where they built a Liberty ship a day. In Mare Island, obviously prior to 1992, was I think perhaps the largest naval shipyard in the United States.
And for a number of reasons, we pulled that industrial base out of California. We still maintain a significant aerospace industry advantage in the country, especially in the El Segundo, Manhattan Beach area. And we had a gentleman here from Huntington Ingalls earlier, I probably should have asked him the question, but do you, you know, I know a lot of the money we're going to be putting is shipbuilding operations. Do you see a move to, because just because of our geography and where we're at, to put any industrial capability in spite of our difficulties of doing business in California, on the West Coast, not just California, maybe Washington State?
Mike Condan-Anzi
Chairman Calvert, I think I'd have to defer you to the Navy, OMB, and the White House with regards to specific plans. More broadly, California is a robust part of the maritime shipbuilding industrial base in supply components, capabilities. There are things that we can go ahead and I think Mr. Chuning would describe this as things that we can get on a truck that we can ship across the country are most likely the most valuable parts of that enterprise today. There are discussions that have occurred in the past and public regarding opportunities to go ahead and increase West Coast shipbuilding. We have major shipbuilders like NASSCO down in San Diego that are providing capabilities for the department at scale and continue to and are reliable partners.
We will likely continue to see those investments made here. There's interest in increasing and expanding the capability of the Puget Sound Naval, the public naval shipyard for the future. That's going to continue to be a priority for us to make sure those capabilities are there, as with Pearl Harbor shipyard as well in Hawaii. So that's a major topic and an opportunity for the department to explore for the future.
Ken Calvert
Okay. Thank you. And I want to thank you for your testimony. We appreciate your coming out to visit with us. Before I conclude, I want to thank you and I want to thank our witnesses.
And I also want to again thank Mr. Rowe for sending a video statement of his tireless advocacy for over 20 years for the industrial base and the skilled trades.
And once again, many thanks to the College of the Canyons for hosting this field hearing. I look forward to working with all of you to strengthen our industrial base and advance the workforce development for skilled trades. And, Mr. Secretary, I look forward to having you at potentially a hearing in Washington, D.C. to discuss some other issues that I think is extremely important that we potentially can't get into here, but I would love that opportunity.
Thank you, Mr. Chairman.
Ed Case
Oh, Mr. Secretary, thank you so much again for your for your time today and and for your efforts in the department to bring about reform. We all think we definitely understand that we need it. I think for today for me today was about highlighting the problem, first of all. I think that's still unfortunately a a problem and a challenge that that most people don't sufficiently appreciate and they don't appreciate the consequences of not solving it over the mid-term and the long-term, short-term, mid-term, long-term. So, you know, that's been a valuable part of this hearing.
I think the second part for me has been more about partnership between educational institutions like College of the Canyons and Dr. Reed's institution, certainly industry and government. I don't think we I don't think any one of those people can pull this off. It's got to be everybody. And I think third is just solid government programs, and the IBAS seems to be a very solid government program. But the challenge there, and we spoke about it a little bit, is to is to sustain it over time.
Because if we just kind of throw a bit of money at it for a couple of years and then go away, then it's going to fade and we're going to be where we are today. So a lot of work in front of us to actually solve this challenge, but I think we can if we if we sustain it over time, and we have to, because the consequence is a defense industrial base that erodes even more at the time that we need it the most. My ranking member, Ms. McCollum, actually did a hearing on this in October of 2021. And it'd be interesting to go back and read that that hearing and and see what they were talking about. And I've heard about it, I haven't actually read it, but many of the challenges were there.
The solutions were there, and we didn't, you know, we advanced a little bit in the next five years, but COVID happened also, which threw us way off stride. And so the lesson there is that I certainly hope we don't sit here doing another hearing in five years and find ourselves in roughly the same place. That's not going to be good for anybody. With that, again, for Ms. McCollum, thank you so much for coming.
Thank you.
Ken Calvert
Thank you, and I also want to thank Mr. Chewning and Dr. Reed for their testimony and answering our questions. Again, thank you, and this concludes today's hearing. So committee stands adjourned.