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George -thank you for that kind introduction. ADM DeMars, ADM Chiles, Dr. Roca, fellow flag officers, and distinguished guests welcome and it is a pleasure being here. Admiral Emery, to you and your supporting cast, thank you for all that you did to make this a success. I have always particularly enjoyed this forum because it attracts the best thinkers and technologists in our business, and it always seems to spur substantive presentations and discussions. I also thoroughly enjoy coming to the Applied Physics Laboratory here at Johns Hopkins University. Long a contributor to the Silent Service, APL has a storied past, present, and certainly future in making submarines an increasingly dominant presence on the future battlefield. I am truly honored to be here to address this distinguished group.

Let me begin my discussion today with comments on the focus of this symposium-Submarine Capabilities for the 21 ll Century. First let’s take a fix on where the Navy is today. Simply put, the nation has the best Navy this world has ever seen. Its ability to surge, to project offense and defense is unmatched. We have superb ships and equipment. We have well-educated, trained, and motivated Sailors who value their careers in the Navy. The Submarine Force is a vital arm of the nation’s maritime forces and they demonstrate it every day. Operating in every theater across the broadest spectrum of missions and going places where others cannot go and doing things that others simply cannot do. They are ready to strike with lethality when necessary; or they can operate undetected and undeterred, developing maritime domain awareness in critical areas of potential future conflict. We can all justifiably be proud of our great skippers, their crews, and the supporting organizations for their remarkable performance! Submarines are on the point in the maritime domain.

However, there are many challenges both here and now and looming on the horizon. We are at war, after all, and the end of that conflict is indeterminate at present. We, as a nation, must ensure that our troops on the front lines have everything they need to win. Costs of war, deficit reduction, rising personnel costs are all exerting pressures on budgets at the very time we are striving to recapitalize following the post Cold War procurement holiday. If that weren’t enough, our leadership is engaged in the QDR where we will set the strategic course for the Department of Defense.

Add to that a BRAC and a substantial turnover in our leadership this summer and we have the formula for very interesting times. The Submarine Force is facing its own set of challenges with numbers of hulls declining while the Combatant Commanders demand for the unique capabilities that they bring continues to outstrip what can be delivered by the Fleet Commanders. The Force is aging and with that comes the challenges, some known; some, no doubt, are unforeseen as we work with more mature platforms.

My message to you, to all of us, today, is that with all these challenges and uncertainties, it is even more incumbent upon us to push the limits of what technology can offer in war-fighting capability, in efficiency, and effectiveness of operations, training, logistics, procurement, and maintenance. When technologies show promise, we must strike a balance between aggressively pushing them to the hands of the war-fighter while at the same time, doing so in a disciplined, rigorous manner such that we know what capability is real and what is PowerPoint; what costs really are versus what we want cost to be. I am optimistic because we have been down this road before, and there are examples of how to do it right! We must deliver products that can be counted on and we must continue to develop advanced technological solutions that drive our advantages -and, speaking for myself, we cannot relent in the standards of effectiveness for safe nuclear propulsion operation.

I look back at the history of my own organization and see examples of pushing the technological envelope, of taking well reasoned risks, and managing that risk to deliver real capabilities to the war-fighter. Fifty years ago, on January 17, 1955, USS NAUTILUS (SSN 571) put to sea and signaled the now famous report, “Underway on nuclear power.” NA UT IL US revolutionized undersea warfare by freeing the attack submarine from the air-sea interface, allowing essentially unlimited endurance, and the true stealth afforded by the submerged environment.

With the commissioning of USS ENTERPRISE in 1961, naval aviation experienced an equally dramatic leap forward in capability. No longer tied to slow at-sea supply lines, and with immense propulsion power immediately available, the aircraft carrier and -more importantly -the decisive air power of modem naval aviation, could be responsive to war fighters’ needs in unprecedented ways.

As aviation and undersea capabilities have advanced, so have the value of these imposing symbols of national power. Just a couple of weeks ago, on May 3rd, USS NIMITZ (CVN 68) celebrated 30 years since her commissioning.

These particular accomplishments accompany 5600 reactor years of safe operation and over 132 Million miles steamed on nuclear power-while our forces have executed missions critical to national security.

While it is momentarily satisfying to reflect on Naval Reactors rich history of providing safe and effective nuclear propulsion, we cannot rest on our laurels. If we are to be relevant, we must continue to look forward.

No crystal ball exists that can exactly determine the form, function, or capability of future adversaries our Submarine Force will be called to engage.

We talk a lot about fourth-generation warfare these days-the use of asymmetric means by non-state actors to further military and political goals. The ongoing IRAQI insurgency is a ready example of this asymmetric threat.

But asymmetry cuts both ways. We too have tremendous asymmetric advantages -readiness, advanced technology, dominance of the maritime domain and the genius of our people. These strategic asymmetric advantages directly translate to the more tactical asymmetric advantages-mobility, speed, sustainability, stealth and adaptability, and the value of these advantages is becoming more and more important.

For example, the Navy today is counted on to be ready to surge forces in unprecedented ways anywhere on the globe to rapidly amass decisive combat power. We are expected to cover great distances quickly, to be able to arrive on station fully ready, and to be ready to remain on station for as long as it takes to win decisively.

Effective sea basing will demand mobility, sustainability, and adaptability. As our numbers of ships decrease, the premium on flexibility, speed to the fight, and endurance goes up. As geopolitical uncertainties cast shadows of ambiguity on our ability to count on forward bases on foreign soil-endurance, adaptability, and sustainability become things we want more of.

Responsiveness is all about having the capabilities in place to take advantage of operating in our maneuver space-the maritime domain. Readiness is assured through smart investment in the right advanced technologies to provide the warfighter the asymmetric advantage he requires. Readiness must also make sense, from a perspective of return-on-investment, to ensure that scarce resources maximize operational punch-now and in the future.

I am confident that we are delivering what the Fleet needs in reliable, safe propulsion power for our capital ships. And we continue to improve the operability and affordability of our plants. Given my prior discussion, nuclear propulsion should clearly have a key strategic role in our future.

Using the strategic concepts that form the future capabilities vision as our template-here is what we at Naval Reactors are doing to ensure the Relevance, Responsiveness and Readiness of our nuclear forces in these fluid times.

Plant designs, each building on the lessons from the previous, have become simpler, more reliable, and maintainable. The original core of NAUTILUS lasted two years-our submarine cores now last the life of the ship.

CVN-21 will have nearly three times the electrical generating capacity of its predecessors-yet will require only 25% of the cabling to distribute that power throughout the ship. Further, we believe we can safely reduce the Reactor Department manning on CVN-21 by 50% when compared to the NIMITZ-class carriers.

This month, I witnessed the successful high power steaming of the turbine generators designed for CVN 21. When at sea, they will be the highest power steam turbine generators for any maritime application.

We are upgrading our reactor instrumentation and controls electronics to a generic system that uses essentially identical hardware for multiple plant designs. The differences in operating characteristics of the plants are accounted for in the software. This improves the maintainability and affordability of our nuclear fleet, and allows flexibility to respond to advances in technology.

We continue to develop and field reactor instrumentation and control that is the envy of the commercial nuclear industry. Our common building blocks for submarines and carriers are approaching commercial industry costs, and are being adopted for non-reactor applications due to their ability to mitigate obsolescence in a robust, rugged package.

VIRGINIA’s power plant has fewer valves, pumps, and circuit breakers, and improved control systems, that allow us to reduce watchstanding requirements. In the reactor plant-for the first time -we were able to advance the engineering of acoustic stealth while reducing hull size. In total, design improvements-to include a simplified propulsion plant and a reactor compartment designed for full modular construction and shock mitigation -yielding construction labor hour savings of 25% over SEA WOLF.

And we are still pushing the technology envelope to give the warfighter the tools he needs to keep our force ready, responsive and relevant. Recognizing the potential increased energy needs of our ships to power future advanced sensors, weapons, and unmanned vehicles-and to ensure we can sustain worldwide surge readiness over the lives of our ships-we are developing a core that provides 1/3 more energy in the same volume as a VIRGINIA core. We call it the Transformational Technology Core (TTC). With significantly more energy, we can increase core operating hours per year, and allow operation at a higher average reactor power. The Transformational Technology Core (TTC) will give us greater operational capability and mission flexibility.

Looking further into the future, we have multiple initiatives underway that converge about similar technological challenges. NASA has asked, and DOE & DOD have agreed, for Naval Reactors to develop the nuclear power plant for deep space exploration project PROMETHEUS. We are also investigating technologies leading toward a direct energy conversion reactor plant that eliminates the steam cycle, converting nuclear energy directly into electricity. In this effort, we are the world leaders in improving cycle efficiency from a meager 4% to in excess of 20% … approaching that required for a viable energy source. These projects involve the use of high temperature fuels and materials that simply have not been used anywhere in practical applications.

Affordability is an essential ingredient of good engineering. Through initiatives we have streamlined inspection processes, reduced unnecessary or redundant manufacturing steps, and reduced cycle-time. For example, we challenged our sole reactor core manufacturer to reduce the cost of the cores by 5% without sacrificing quality or safety. As a result, through innovative use of on-hand materials and streamlining processes, we have been able to reduce core manufacturing funds by approximately $82.2 million (which is 12.7%). This reduction is good, but there is still much work to be done.

It is also important for the system to know that we are watching and for us as an agent of the government to push back on vendor proposals that simply reflect the status quo. We at headquarters approve any cost type contract over $250K and any fixed price type contract over$ IM. This process allows headquarters visibility of the entire procurement process and enables us to stress appropriate cost cutting measures while ensuring all the building blocks fit into the bigger picture, a key to efficient execution.

Over half a century of successful nuclear propulsion operations is a testament to a well-designed process. However, throughout my Navy career, I have usually been most uncomfortable when things are going well, because I question what problem we’ve missed and what opportunity we’ve overlooked.

No organization can continue to succeed if it is satisfied with the status quo. Therefore, we must continually assess where we are, where we want to be, and what is preventing us from getting from one point to the other.

As I survey the state of the community, I have two areas of concern that I want to share with this forum.

Navy shipbuilding and the industrial base that supports it have received a fair amount of press in recent weeks. The current state of the industrial base, and its outlook for the future, are important issues that require more attention than they have received.

I have a particular interest in, and concern about, the nuclear sector of the industrial base. The truncation of the SEA WOLF program made it necessary for us to restructure the nuclear component industrial base, moving from a substantial number of competitive manufacturers to a largely sole-source environment. For example, in t 990 we had 18 nuclear component vendors and today we have 11. Similarly, in 1990 we had 5 valve vendors and now we only have one. We have excellent relations with today’s remaining vendors, who continue to be responsive and quality-oriented in their nuclear work. Many of these companies have been with the Program since the early days. A more patriotic and dedicated group is hard to find, and I am very proud of what they do.

There is, however, an inevitable cost that comes with a small, dedicated, predominantly sole-sourced industrial base. Fixed overhead is now spread over fewer units-making each unit more expensive-despite solid efficiency gains.

With a predominantly sole-source industrial base, we become vulnerable to vendor-specific challenges such as labor disputes, financial instability, production quality issues, and vendors deciding to exit the business.

The Government is responsible for communicating stable requirements-and we have not always done that as well as we could. As a result, our vendors have become more fragile, more sensitive to chum, and to some extent more skeptical of us.

For example, the starting date for a two-per-year VIRGINIA Class build rate has changed seven times since 1995. In the midst of these changes, some of our vendors had invested significant capital in order to be prepared to quickly support a Government decision to ramp up to two VIRGINA Class submarines per year.

Unfortunately, today’s production bears the burden for this future flexibility. The increased direct and indirect costs associated with the ability to ramp up in the future appear in the price of components, and therefore submarines, being delivered now. As the price of todays submarines goes up, so does the pressure to once again slide the build rate to the right-making this something of a self-defeating exercise.

These challenges are not unique to submarine work. Just as industry has been postured to increase the Virginia Class build rate, so too is it expected to maintain the capability to ramp up to a new construction aircraft carrier every four to five years. Instability in the submarine industry has an immediate effect on the aircraft carrier industry, and vice versa.

Market efficiencies have a significant impact in this discussion, as do sunk costs. We have clearly seen that reducing procurement rates on major Submarine and Carrier construction platforms to save money-or shifting start dates on new construction-does not correlate to a direct dollar for dollar savings. As an example, OSD’s Program Budget Decision 753 postponed the two-per-year VIRGINIA build rate from FY09 to FY12. The shipbuilder overhead previously borne by the submarines had to be shifted to the CVN 21 Class Program, increasing the CVN 21 program by $110 million. I have been using an example from the specialized nuclear component industrial base to illustrate what I consider to be a major issue for the larger shipbuilding industrial base.

Our shipbuilders must maintain a large and varied labor force from day-to-day, while at the same time hiring and training the next generation of tradesmen. Many of these tradesman are not inter-changeable; they often have critical skill sets that cannot be easily replaced if lost.

I am particularly concerned about the precarious state of our national resource of submarine and nuclear designers and engineers. For the first time since the end of the Second World War, we do not have a new submarine design underway. As we come off the peak from VIRGINIA and SSGN design, without new work, this pool of uniquely skilled talent will atrophy.

While some mitigation can be achieved by taking on non-submarine work both inside and outside the Navy, it is no replacement for the unique demands of nuclear submarine work. We have, in the past, experienced some atrophy in and subsequently ramped up our shipyard design and engineering workforce. For instance, we did it to design the SEA WOLF and OHIO classes. But, we started that ramp up from a critical mass and even then it came at a price to rebuild key talent. We are currently on a glide slope to go below that critical mass-and potentially to dismantle this national treasure of expertise.

My goal in touching on the industrial base is to highlight the importance of all parties-government and industry alike-to carry out their responsibilities effectively. The industrial base is most efficient, and the Government receives the most return on investment, through having a clear vision of what capabilities our Navy must have -by translating vision to requirements, requirements to programs . . . and by executing a stable program in an efficient, effective manner.

One solution to the design and engineering industrial base issues that you may hear involves a proposal to design a new submarine-a cheaper, lighter, better, smaller ship to replace VIRGINIA and allow us to build more of … whatever these things are supposed to be. While well intervention, the proposals I have seen are very long on the hope that technology will solve some very difficult challenges that tend to drive costs in submarine manufacturing, and real short on technically executable, and affordable solutions.

I’ll let the operators argue the efficacy of what this sub-lite might do … but speaking from the point of view of the program director-an acquisition guy … a technical guy-that discussion doesn’t hold much appeal to me.

I am sure I could be painted with the Luddite brush-but the idea of giving up R & D, design, and engineering investment that delivered a ship with the tremendous capability, and potential capability, of a VIRGINIA before amortizing our investment over a class of ships and before driving the efficiencies into the construction processĀ· that comes with repetition and a learning curve-just doesn’t make much sense. Additionally, I tend to fall back on my theory of wing walking when I am approached with a promising technology that will cure the ills of the existing program. I may be interested; I may even be a proponent. But I don’t believe in letting go of our real capability, particularly one like VIRGINIA that we are just getting into the fleet, betting that I will be able to reach out and grab some ever-moving, elusive technological promise that just may not be there when I need it most.

Instead, let’s focus on that valuable and proven design. Focus the talent of our designers and engineers on driving cost out of VIRGINIA where it makes sense, on adding capability and/or flexibility to that platform!

I would offer that if we are going to start looking at a new submarine design, it’s approaching the time where we need to start the discussion on the replacement for our SSBN, and possibly the newly emerging SSGN force. After all, there appears to be growing recognition that the value of these ships is on the rise in the context of a national deterrent force. With another 20 years of life coming with the mid life refueling of the OHIO Class, some may think this is a decision better left for tomorrow.

With a design industrial base at risk and a complex decision making process that will require time to resolve policy and technical issues beyond mere hull design, the time to start the deliberations is probably closer than we all think.

The second area of concern that I wish to address today has to do with a growing debate over the utility of conventional submarines in the US Navy.

There are those who are again questioning whether we can afford nuclear powered submarines when conventionally powered subs with Air Independent Propulsion seemingly have all the advantages at less than half the cost.

I welcome this debate. But it must be done with cold hard facts, not rhetoric. So let’s remember a few of the facts that rarely make the rhetorical headlines.

Current designs for conventional powered submarines fall victim to the engineering tradeoffs inherent in a non-nuclear design. For example, these vessels would have a submerged endurance of about 4 days at less than 5 knots. This endurance degrades rapidly to just hours for any appreciable speeds above 15 knots.

While AIP can extend the endurance as much as 14 days at less than 5 knots-and as long as a month if the vessel remains stationary and reduces electric loads to the bare minimum-these low power levels disallow concurrent use of robust sensors and weapons suites.

In addition to purely nuclear standards, there are additional engineering and performance standards to which U.S. submarines are subject.

Current SSK designs do not adequately address standards to accommodate the SUBSAFE program, shock testing, 3-Section watches and at-sea training.

Factoring in these performance standards, the cost of one of these conventionally powered submarines is significantly greater that the half-price estimate-rather, they approach a cost more on the order of $1.5 billion a piece.

In fact, the acquisition premium for constructing a submarine with VIRGINIA capabilities that is nuclear powered versus conventionally powered is about 25%.

If one accounts for the cost of fuel oil, which at today’s unburdened rate is about $130 million, the premium is only about 20%.

It is hard to imagine questioning the value of this premium to allow the capability to arrive on station with unlimited stealthy endurance.

The alternate to a nuclear powered vessel is one that arrives on station having to refuel, loiter at slow speeds at reduced electrical load, and work within the tactical confines of a submerged endurance of less than a week at 3 knots.

From a strategic perspective, there are additional costs associated with building a submarine without legs and on-station sustainability. This is the cost of forward basing-which is an entirely different subject. My take is that the 25% premium of a modern nuclear submarine is money well spent.

Given these performance issues there needs to be a very thoughtful assessment of an SSK’s capability for the types of missions that are virtually taken for granted with an SSN.

My concerns over the direction of the debate on a low-cost alternate to submarine acquisition transcend my duties as the Director of Naval Nuclear Propulsion. These are concerns that are shared by all of us who are warfighters and understand the tactical realities I have highlighted above.

We are-after all-a maritime nation with a global reach whose doctrine of folivard presence with a purpose requires vessels with the capabilities J have just articulated. To me, it doesn’t make much sense to build a future submarine force on a vector toward tactical parity with a potential peer competitor.

I understand that readiness cannot come at any cost. Our leadership has made that clear.

This is why Naval Reactors is embracing technologies that provide maximum return-on-investment, enable readiness and ensure responsiveness for current and future platforms -while maintaining our bedrock standards of safe and reliable nuclear propulsion

Aside from the obvious tactical, operational, and strategic advantages, I believe the business case for nuclear power for capital ships is convincing today. The historic operations and support costs for the USS NIMITZ (CVN 68) are only about I 0% more than those for USS JOHN F. KENNEDY (CV 67). However, nuclear propulsion provides unmatched warfighting capability, mobility, sustainability, and nearly unlimited endurance-the asymmetric advantages I mentioned earlier.

As you will recall in the days following 9/l l, it was USS ENTERPRISE-our first nuclear carrier-that arrived on-station literally hours following the terrorist strikes -to deliver the nation’s response against the Taliban of Afghanistan. She was accompanied by USS PROVIDENCE (SSN 719)-whose presence enabled this rapid response and the strikes to follow.

Speed, mobility and sustainability to provide readiness, responsiveness and relevance-these are the products that a nuclear enabled Navy provides the taxpayer.

Yes, there are challenges ahead. But given the talent, ingenuity, and dedication resident in the program-and in this audience-I am confident in our collective ability to deal with these challenges and to keep them transparent to the warfighter.

We are moving forward with advanced technology so you can depend on it being there-what ever that form may take-for future submarine platforms and associated capabilities. We will not relent in our mission to provide safe and effective nuclear propulsion for the warships of this Navy.

I challenge this audience to leverage these technologies, and embrace the importance of continuity of purpose in this endeavor.

Good men and women, thank you for your dedication to our Submarine Force, the innovations that allow us to succeed, and your assistance with our readiness to represent and protect America’s interests all over the world.

Your individual commitment to our group effort in defending this great Nation is noted and appreciated.

Thank you!

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