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This article is adapted from RADM Fages presentation to the 1998 Annual Symposium in June.

Thank you, Admiral Smith, for that kind introduction. Before I begin with a programmatic tour, let me share some views from the waterfront, coming as I do from Commander, Submarine Group Two. Our ships and crews are performing magnificently. We have enjoyed great operational successes during both battlegroup and independent operations. We are adapting reasonably well to the austere funding climate. Screening rates for XO and CO are improving. Promotion rates are very solid. Our crews seem to accept the challenges at sea with enthusiasm and I sense a revitalization of sense of mission and purpose in the Force. But all is not roses. Funding of the shore establishment has been cut dramatically and that is often perceived as a reduction of entitlement in quality of life areas. The impact of the change in retirement annuity to 40 percent at the 20-year point is taking its toll. My greatest concern and focus as Group Commander revolved around the quality of the workplace issues. The import grind, with long hours and three/four-section duty for officer and enlisted alike is a real dissatisfier.

Several personnel trends exacerbate this problem in the near term. Junior officer accessions have not kept pace with fleet requirements. This will mean smaller wardrooms and longer JO tour lengths over the near term. Junior officer retention is several percentage points below the steady-state sustainment rate of about 38 percent that we shoot for to ensure an adequate inventory of department heads at the seven years of the commissioned service point. Accessions are becoming more challenging in our current vibrant economy. Not surprisingly, retention is equally challenging. Current retention rates will not provide sufficient future inventory at the 10 to 20-year point to man our billets at sea and ashore.

The Navy is not standing still in the face of these challenges. In the short term, the officer detailers are carefully managing junior 53officer detailing to mitigate wardroom shortages. Plans are underway to increase officer accession bonuses and enlistment bonuses, officer continuation pay and reenlistment bonuses, and Special Duty Assignment Pay for nuclear operators and supervisors. Nuclear recruiting is the Recruiting Command’s number one priority which will be addressed with more nuclear recruiters and a revised recruiter incentive system. Finally, careful attention is being paid to attrition, from a recruit’s enlistment to his arrival aboard his first submarine. We must reduce attrition rates.

These initiatives are important and will play a key role in maintaining a healthy personnel picture. But we must also carefully evaluate how we do business at sea and, especially, in port to reduce burdensome practices which reduce the quality of life/workplace. I know I am special for the Type Commanders as well when I te11 you that we are all very sensitive to this issue and committed to its solution. Let me now shift to a programmatic discussion.

At 65 SSNs today, we are entering the final gate of the steep downsizing slope-after inactivating nine more SSNs in 1999, we will gently glide to 50 by 2003 as required by the 1997 Quadrennial Defense Review (QDR). Four NSSNs are programmed in ’98,’99, ’01, and ’02, to be built in a teaming arrangement between Electric Boat and Newport News. The Navy’s POM-00 shipbuilding plan is currently under review by the Office of the Secretary of Defense, so I am not at liberty to discuss it in this forum. One point concerning SSN Force Structure should come across to you all, loud and clear; a build rate of two to three NSSNs per year in FY-07 and beyond is necessary to maintain a 50 SSN Force. Absent fundamental changes in the manner in which we fund the SCN accounts, you decide for yourself whether we will be able to sustain that build profile.

So what does all this mean? Will we drop below 50 SSNs in 2014 as the rate of 688 decommissioning overtakes the NSSN build rate? This is a financial decision which Congress and the American people must address as we enter the 21″ century. However, as stewards of our nation’s security, we need to educate the country on the need for submarines. It is our job to ensure this country realizes why submarines are so important. The Naval Submarine League, on a national and a local level, has an important role to play as we take this message to the American people.

In March of this year, the Chairman of the Joint Chiefs of Staff 54commenced an attack submarine study. A follow-up study directed by the QDR, its goal is to determine the number of SSNs required for peacetime forward presence, national tasking, and warfighting in the 2015-2025 time frame. In considering the future security environment, the study will carefully consider the importance of stealth in littoral regions and whether submarines will be required to assume new roles because of the vulnerability of other platforms. Among other things, the study will take into account previous Force level studies, the Defense Science Board’s study on the Submarine of the Future, and national requirements. Finally, affordability, in the context of the total DoD budget, will be a major consideration. The Joint Staff (JS) will lead the study, with participation by the Offices of the Under Secretary of Defense for Acquisition and Technology (A&T), Under Secretary of Defense for Policy, and the Under Secretary of Defense for Program Appraisal and Evaluation (P A&E). The Defense Intelligence Agency, and the Navy, including my staff at N87 will also assist in the study. The results of the study will be briefed to the Secretary of Defense in September of this year.

The fleets have also been studying the SSN question, and in particular, how we will match commitments and inventory in a 50 SSN Force. The punch line, of course, is that with a 50 SSN Force we are asset limited. Recently we have seen the beginning of the pressure on our deployable assets as we have been forced to reduce our presence in specific mission areas. For example, EUCOM’s presence has been reduced from four to about 3 SSNs in the theater. Independent Atlantic ASW deployments have been reduced by nine percent compared to 1996. Virtually all independent Pacific ASW deployments ended in 1991. Some national-level Intelligence, Surveillance, and Reconnaissance coverage has been gapped, with additional and more frequent gaps projected as the downsizing continues. With CNO’s mandated constraints on PERSTEMPO, OPTEMPO, and Tum Around Ration, by 2003, each theater commander, with the exception perhaps of CENT- COM, will experience the loss of approximately one to one and a half SSNs in deployed presence when compared to today’s level of effort. Additionally, since there will be fewer submarines deployed and fewer in the inter-deployment cycle, there will likely be more flow of forces between theaters to compensate for contingencies that require additional presence, demanding an unprecedented level of flexibility on the part of Fleet Commanders and Unified CINCs.

Let me describe another study that is on the horizon. Senate Armed Services Committee language in the FY99 Defense Authorization Bill directs the Secretary of Defense to review the conversion of Trident SSBNs for non-strategic use, pending ratification of the ST ART Il Treaty by Russia. As you may know, we have considered this concept for several years, and there are no insurmountable technical hurdles. Obviously, there are fiscal challenges that would have to be overcome if the DoD and the navy decided to go forward with this concept. Given these studies and the fiscal environment, what can we expect in the future?

Let me start by looking at the past. In FY89, the Navy’s Total Obligation Authority (fOA) was $112B. Submarine programs consumed 18 percent of that pie or approximately $208. At that time, we had more than 150 capital ships in the Submarine Force and nearly 70,000 military personnel. Today, the Navy’s TOA has been reduced to slightly more than $71B; our TOA has been reduced to just over $7.SB, 14 percent of the Navy’s TOA. And finally, the Navy’s projected FYOS TOA will likely decrease to $688 with our share accounting for approximately 13 percent of the total.

The QDR was to lay the groundwork for enhancing investment, DoD-wide, by stabilizing operations and support (O&S) accounts. In theory, this would allow an increase in investment in modernization and weapons procurement from a current level of $458 to $608 per year. Stabilizing the O&S accounts depleted virtually aJI of N87’s traditional large bill-paying assets, including infrastructure, personnel end strength, and Force structure.

With these assets depleted, in the face of the Balanced Budget agreement, there will be only one piece to turn to any future bills: modernization accounts. This is not the N87 only problem. This is a Department of Defense-wide challenge. Our challenge will be to modernize the Fleet in an era of geometric technological change, but in the face of stringent fiscal constraints. How do we balance operations and modernization while budget dollars are shrinking in real terms? None of the options are appetizing.

One common method is to extend research, development, and acquisition timelines -keeping programs alive by throwing seed money at them in the hope that we can free up funds in the future, as the technology matures and investment dollars are made available. I have minimal flexibility to use this method. Primarily, this approach delays getting combat capability to the Fleet. Secondly, 56we are too close to breaking many programs. Further cuts of the salami slice variety will make many programs unexecutable.

Another traditional solution for funding shortfalls is to reduce the acquisition profile for modernization. This may become necessary. Not every boat will get every new piece of equipment. Finally, vertical cuts may become the order of the day. We are considering a number of such deletions in POM-00.

We are taking a lead angle on this issue. We are refining our portfolio of submarine capabilities with a view to synchronizing program implementation. We are analyzing our investments, from Science and Technology, through Research and Development, to Acquisition, to ensure our ships will receive an end-to-end capability, in a cost-efficient manner, with a reasonable time market. We are also looking hard at our infrastructure costs, to rationalize our maintenance, personnel, training, and organizational plans with our anticipated 2003 Force structure.

In the face of these challenges, we have still been able to bring new combat capabilities to the fleet. The most visible example of this enhanced combat capability is the SeawoJf class.
Commissioned last July, USS SEAWOLF continues to perform superbly in trials and testing. Last month, she successfully completed Weapons System Accuracy Testing. Later this summer, she heads to the North Atlantic, before commencing Post Shakedown Availability in August. In August PCU CONNECTICUT will get underway for ALPHA trials. The final ship of the class, SSN 23 is over 40 percent complete. In April, Secretary Dalton announced that SSN 23 would be named USS JIMMY CARTER.

Since the Los Angeles and Trident class submarines will comprise the bulk of the Force well into the next century, we must find new technologies that can be back fit into these platforms, as well as forward tit into NSSN. Perhaps the most successful example of this strategy is the next submarine sonar system, AN/BQQ-10, also known as Acoustic Rapid COTS Insertion, or ARCI.

ARCI represents one of the Navy’s finest efforts in quickly and affordably getting new technology to sea. Designed to improve our submarine’s acoustic superiority, this system made it to sea just two years after design work began on time and within budget.ARCI development costs were one-tenth (1/10) the cost of BSY-2 and chipset cost was less than one thirtieth ( 1 /30) the price of BSY – 2. Leveraging commercial computer advances enabled us to 57increase signal and processing power in ARCĀ£ by an order of magnitude over the BSY-2 system. ARCI is a fully funded program. Ultimately, we will have a submarine sonar system common to the entire Fleet.

ARCI will reach the Fleet through a phased implementation plan, capitalizing on the build-test-build concept that brought black box upgrades to the Fleet in recent years. ARCI Phase One is complete and has been installed on two ships, USS AUGUSTA and USS LOUISVILLE. ARCI’s flexible design allows the incorporation of periodic improvements through Advanced Processor Builds, or APBs. APBs provide software and hardware grades to ensure processing and detection algorithm improvements quickly make it to the Fleet. The first APB went from the drawing board to the Fleet in only 18 months!

ARCI completed at-sea testing on USS AUGUSTA this May with outstanding results, including a multi-fold improvement in towed array broadband detection and tracking ranges and a significant improvement in exploiting unique submarine transients.

Let me now shift to a discussion of Weapons systems. Tactical Tomahawk (TACTOM) is on the horizon. TACTOM will provide us with so many performance upgrades that I think of it as essentially a new missile. The missile will have a two-way, satellite data link to enable in light re-targeting and battle damage assessment reporting. A ring laser gyro will reduce the spin-up time from 45 to 5 minutes, providing operational commanders with a more responsive strike weapon. Missile reliability is improved with an anti-jam GPS capability.

But as the old adage goes, you can’t get something for nothing”. Prior to Tactical Tomahawk, the Navy’s plan to improve Tomahawk capability had been through an incremental upgrade, with the Tomahawk Baseline Improvement Program (TBIP). Block IV upgrades were due to the Fleet in FY-01. Tactical Tomahawk will arrive about two years later than the Block IV was anticipated. T ACTOM will be capable of vertical launch only, and only from periscope depth. This limitation stems from an airframe redesign undertaken to lower cost.

For the last few years, the Navy has been investigating the marinization of the Army’s tactical ballistic missile. This came to hen known as NTACMS. This new missile would have been capable of launch from surface ships and submarine vertical launch tubes. These efforts were terminated following a Navy Analysis of 58Alternatives (AoA) that identified the Land Attack Standard Missile (LASM) as the most cost-effective, near-term, Navy alternative for improved, responsive strike capability. LASM will be deployed only on surface combatants. NT ACMS missile development efforts will be terminated by FY99. However, termination is being conducted in a manner that will allow renewed NT ACMS development as a LASM follow-on if appropriate. Now let me shift to a discussion of mine warfare.

Our Unmanned Undersea Vehicles programs continue to make excellent progress. In just four years from the initial concept development, the Near Term Mine Reco Maissance System Vehicle completed its first phase of at-sea testing in Dabob Bay, Washington last month. At-sea testing will occur on a Pacific Fleet SSN either later this year or in early 1999. Our Unmanned Undersea Vehicle program will mature and eventually produce six to twelve Long Term Mine Reconnaissance System (LMRS) vehicles. LMRS will provide significant capability enhancements over the NMRS. LMRS will be an untethered, autonomous vehicle with improved sensors and endurance. Still on schedule to achieve IOC in FY03, we have consistently protected this program from budget cuts.

The Submarine Force will retain its offensive mining capability with the Improved Submarine Launched Mobile Mine (ISLMM). Successfully tested last year on USS INDIANAPOLIS, ISLMM will bring significant combat capability to theater commanders. It will provide greater flexibility to minefield planners than did SLMM, due to its 150 percent range increase, dual warheads, greater accuracy, and the ability to perform a waypoint turn.

In closing, I have tried to outline the challenges we face in administering Submarine Force programs, and the successes we have had in designing, building, and fielding systems that have dramatically improved the stealth, combat capability, and affordability of our ships. I must tell you that POM-00 was a very difficult submission. Needless to say, we are doing everything possible to maximize the efficiency of our programs and to ensure that every dollar invested will deliver capability where and when we need it.

I look forward to working with the Naval Submarine League as we deal with these issues of great importance to our Navy and our country. Thank you for this opportunity to speak to you today.


A statement or Financial Position
As of March 31, 1998
Current Assets $426,200
Fixed Assets 209,445

Total Assets $635,645

Current Liabilities $118,149
Long Term Liabilities 96,292

Total Liabilities $214,441

Net Assets $421,204
Total Liabilities and
Net Assets $635,645

Statement or Activities
For the Year Ended March 31, 1998


Contributions & Dues $144, 166
Symposiums 224,641
Investment Gains 46,012
Interest & Dividends 34,007
Review Advertising 15,750
Other 1O 147

Total Revenues $474,723

Program Services:
Awards, Grants, Support $ 76,340
Symposiums 176,632
Review Publishing 63.647

Total Program Services $316,619

Supporting Services:
Office Operations 163 813

Total Expenditures $480,432
Decrease in Net Assets ($ 5,709)
Net Assets, April 1, 1997 $426,913
Net Assets, March 31, 1998 $421,204

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