Secretary of the Navy Richard V. Spencer USNI Defense Forum Washington Washington, DC 04 December 2017 Thank you for the introduction Vice Admiral [Pete] Daly and I would like to extend my thanks to everybody here for allowing me to join you. It s a pleasure to be here today. In these uncertain times, opportunities to come together and initiate meaningful discussion within the national security community are more important than ever. And I would say that this group particularly has been an enduring and forceful advocate for a strong Navy and Marine Corps. I appreciate this chance to share with you how we are going to maintain that strong Navy and Marine Corps into the future. It is also the beginning of a good week in the Pentagon. This morning I swore in our new Under Secretary of the Navy, Thomas Modly and tomorrow, I will swear in our new Assistant Secretary of the Navy for Research, Development and Acquisition, James Hondo Geurts. We are very fortunate to have these extraordinarily accomplished professionals onboard. I know they will do great things for our Navy and Marine Corps. We must first acknowledge that we are a commercial nation. We are a maritime nation a beneficiary and user of the global maritime lanes of commerce. We have a responsibility to provide security and contribute to the collective safety and stability of the global market. Not only is this in our best interests but it is the right thing to do. An overarching theme to American naval policy has always been freedom of the seas to support open and robust arteries of trade. Threats to global stability put our notion of and the purpose for freedom of the seas at risk. The United States Navy Marine Corps team is forward deployed around the world with the preservation of global stability in mind. Their presence is a deterrent to potential adversaries and a reassurance to our allies. It s my job to make sure our Naval forces have fangs, the longer and sharper the better. 1
The Navy and Marine Corps team needs to be ready to win. That s easy enough to say but clearly not as easy to actually do, especially when and I must be blunt here we have readiness issues in both the Navy and the Marine Corps. Yet, despite the challenges we are facing, I am confident that we re going to successfully tackle every one of them. We are going to utilize the aid of some outstanding problem solvers and exceptional leadership to do this both from inside our organization and, just as importantly, outside. Our Seventh Fleet forces are under the microscope right now and rightfully so. The CNO s critical review is an example of that leadership and problem solving from within our organization. It has given us deeper insight into the systemic issues and has provided a way forward to address those shortfalls. My strategic readiness review has enlisted some of the outside aid I just mentioned. It s still forthcoming, but we are looking at everything and I do mean everything: from DOPMA, to Fleet Forces Structure, to Goldwater-Nichols. As you are well aware, there are also a multitude of obstacles on our path, both current and emerging. To give you an idea of what we re facing: Funding issues borne of the Budget Control Act and Continuing Resolutions have taken a toll on readiness and maintenance cycles and have also cost us time, a resource we can t buy back, when it comes to restoring readiness and growing the Fleet. The infrastructure needed to grow, support, refit and repair our Fleet is showing signs of strain. Technological leaps have put new, affordable capabilities in the hands of our adversaries. And some of these adversaries have begun demonstrating renewed aggression we haven t seen in some time. These points are simply the basis for the environment in which we operate. So in this challenging world, how can we maintain our advantage? I believe the key is to remain focused on our mission with three priorities in mind: People, Capabilities and Processes. People are our greatest asset we don t win without them and we need to keep the winners. We need to recruit and retain the best, empower subject matter experts and hold people accountable. 2
Our ships, planes, submarines, vehicles, weapons they are engineering marvels. But they re simply hunks of metal that can t do much without the human interface they need Sailors and Marines to bring them to life. Our Sailors and Marines our sons and daughters are the best in the world at what they do. They are all volunteers and they have given wholly of themselves to ensure that we, at home, can enjoy the freedoms we sometimes take for granted. They deserve the right gear and lethal platforms to deliver the fight tonight and I am dedicated to ensuring that our People, these warfighters, get that capability. I am also dedicated to ensuring that our service-members and their civilian teammates receive the best training because it is well trained People that will employ their gear and capabilities in the most effective manner. We must foster an environment where our Sailors and Marines are given professional challenges as well as a clear and challenging career path. We need to ensure that our People have the professional and educational opportunities they need to grow as leaders and critical thinkers. We must also ensure that the families and loved ones of our Sailors and Marines are taken care of. Those families are entrusting us with the lives of their husbands, wives, sons, daughters, brothers and sisters. We owe them a debt of gratitude and our full support. When we send our warfighters over the horizon they need to be sure that their loved ones are being taken care of at home so they can devote their focus toward the mission. And when our Sailors and Marines can focus 100% of their attention on the mission they will be able to effectively apply warfighting capabilities whenever they re needed. Which leads to my second priority: Getting the right capabilities into the hands of our Sailors and Marines. Our Sailors and Marines are the best and they deserve the best and they deserve to have it in a timely manner. To that end I have directed my acquisitions team to do their part in expediting our research, development and acquisitions processes. 3
Our technical advantages are real, but they are slipping. You can be sure that there are countries out there working hard to bridge that technical gap and it is my goal to never send our troops into a fair fight. I ve learned from the world of business that when you re facing competition, you need to have the resources and processes in place to innovate, compete and win and to stay ahead of the competition at all times. It s when you take your hand off the throttle that the competition starts to close. It s bad enough in the business world not to attain your goals, but the stakes are much higher when it comes to our national security. I can assure you that near-peer potential adversaries aren t just treading water they are full throttle and catching up quickly. Spending the money needed to develop the lethal capabilities that will challenge ours. We must respond on all fronts: internal research and development, rapid prototyping, accelerated learning, and partnering with industry to get the capabilities our people need. I m talking about a true partnership based upon the concept of shared risks producing shared rewards. A partnership in which we provide industry a clear line of sight to our needs and resources so they can invest in the necessary research and development to provide us solutions to our challenges. And do this while providing good value for the taxpayer. Part of that partnership requires that we be a better customer to industry and frankly, that is something where we have room to improve. We can start by focusing on that third priority, our processes. To meet the threats of today and tomorrow - we must reform those processes now. Sometimes that means joining with our fellow services to share expertise to meet a common goal. For example we have begun a partnership with the United States Coast Guard as they begin the acquisition process for a new polar icebreaker. We have formed an integrated program office between our two services which will help develop the next generation of these unique vessels. This will benefit the Navy, the Coast Guard, and the taxpayer, as we share mutual design frameworks and development costs. 4
We ve had success in working with Congress on lowering costs through process improvement but we have a long way to go. We appreciate the past Congressional authority for block and multi-year buys, and we will continue to use those to drive costs down. Tools like these help us balance economies of scale while ensuring the health of our defense industry industrial base a base that is vital to our capabilities. I also appreciate the bi-partisan congressional advocacy in defining the 355-ship Navy as law. We will work diligently to implement that decision rapidly and frugally with the resources that Congress may appropriate. As we press forward, I m committed to expanding the fleet on the sea, under the sea and in the air but we have to lay the foundation for that growth. We must ensure the health of the defense industry workforce and infrastructure. Large capital investments need to be made today to build the fleet of tomorrow and maintain the fleet we have today. I can t tell you exactly what the maritime fleet of 20 to 25 years from now will look like, but I can tell you that it won t exist unless we get serious about providing the funding needed to build those capabilities today. We can t buy that time back when we don t invest or build for the future urgency must be the battle cry. In addition to our efforts with Congress we re reaching out to our industry partners to spur innovation and efficiency. I know that wherever there s a challenge, someone else has almost certainly already addressed it directly or tangentially and that they have insights on what works. We re looking for best practices and I know industry is eager to help. I ve found that by reaching out and just asking talking about our issues produces ideas that come from the most unlikely of places. We ve already reached out to industry leaders to learn how they have improved safety as part of my strategic readiness review. I am confident we will gain from their valuable insight and improve our own safety culture. So, what is needed? We need the right Processes in place to recruit, train, equip and organize our People in a sustainable, responsible manner, giving them the Capability to win anytime, anywhere. The challenge of doing this may seem daunting to some, but I see opportunity. 5
There is opportunity to enhance our partnerships. There is opportunity to innovate. There is opportunity to lead. And there is opportunity to properly address what has been the most harmful impediment to reaching our goals. The Budget Control Act and Continuing Resolutions have been and will continue to be incredibly harmful unless addressed immediately. Continuing Resolutions have cost the Department of the Navy about $4 billion since 2011. $4 billion is enough to buy two Arleigh- Burke Class destroyers. It s enough to buy two squadrons of F-35s. It s enough to buy over 9,000 Joint Light Tactical Vehicles more than enough to satisfy the Marine Corps assessed need. It s enough to buy almost 3,000 Harpoon missiles. It s enough to buy more than 2,000 tactical Tomahawk cruise missiles. That is money that did not buy us any extra capacity or capability; instead that $4 billion of taxpayer funds was simply lost because of the inefficient way that Continuing Resolutions have forced us to conduct business. Each member of our all-volunteer force makes a promise to protect our Nation from harm and if called, to give their full measure to do so. It is time for our Nation, and Congress, to keep the same promise to them. As Secretary of Defense Jim Mattis once said, our nation can afford survival, and another continuing resolution is a broken promise and a risk to our survival. Thank you for the opportunity to share my thoughts. I look forward to seeing the solutions and innovations that this Forum is going to generate. Working across the aisle, across the government and industry, and with our international partners, is going to allow us to create the synergy and conditions where 1 + 1 can equal 3. I ask your help to find ways to meet the challenges of today and tomorrow. Thank you, I look forward to your questions. 6