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23 OCTOBER 2013


ADM Mies, RADM Padgett, Tim Oliver, Corporate Benefactors, leaders of industry, fellow Flag Officers, family and friends of the Submarine Force, it is great to be here. I am coming up on my first anniversary as Director Naval Reactors and it has been an incredibly busy year, honestly the fastest in my career. It was also a year punctuated by some true milestones that we can all be proud about.

USS MINNESOTA, our tenth VA-class submarine, was christened last October and we commissioned her just six weeks ago, an astounding 11 months ahead of schedule. I sailed in her for sea trials this spring and what a ship. I wish everyone in America had the chance to tour one of these ships and meet the crew. They would be amazed at the technology in our ships and the spirit of our Sailors. In March, we laid the keel for PCU JOHN WARNER, and next week, we will christen PCU NORTH DAKOTA. The carrier fleet is also doing great work, and in August we completed sea trials on USS THEODORE ROOSEVELT and in November we’ll christen the PCU GERALD R. FORD. USS ENTERPRISE was inactivated last December after 51 years of service, and 25 deployments. Her legacy, in peacetime and wartime, makes me wonder how anyone can doubt the value of a nuclear powered aircraft carrier.

Another event I would like to mention is the shooting that occurred at the Washington Navy Yard on Sept 16th, a mere month ago. It seems like a year since that tragedy, where we lost some dear comrades right in our workplace. And while many are still hurting, it would be much worse were it not for the leadershipvof so many in NA VSEA, many in this room, who worked so hard to comfort the suffering and ease the pain of loss and insecurity. VADM Willy Hilarides and his leadership team of RDML Tom Kearney and Bill Deligne and many others, have done an absolutely terrific job taking care of their people. Please join me in a moment of silence.

NSL Symposium almost fell prey to the government shutdown, but here we are. And it’s very important to get together like this to stay synchronized. We have almost every Submarine Force leader here to speak- Force Commanders, Director of Undersea Warfare, PEO Submarines, FORCMs, CO’s. When you hear these leaders speak, I’m sure that you will get the same sense that I do we are so lucky to have this team in place to navigate us through these rapids. If you leave this event with a question unanswered it’s your own fault! I look forward to some great conversations.

I’d like to start by bringing you all into the conversation about some of the forces that shape our situation and how we are responding. In essence, what we are discussing with our own teams. First and foremost, we’re working overtime to figure out how best to design, build, and test the nation’s most complex and high priority capabilities in a brutally austere and unpredictable budget environment. Some risks and opportunities emerge. I’d like to talk about two related shaping factors: budget and demographics.

First, demographics. In virtually every aspect of the Program, labs, shipyards, Headquarters, everywhere except the fleet, we are bimodal. If you plot our population versus experience, we get two peaks and a valley in between. In generally everyplace in the Program we have one big team with 35 and more years of experience, and one big team with less than fifteen years of experience. In between these two teams, a more sparse population. The older team has tons of experience, and is getting ready to transition to a well-earned retirement, after all, they’ve done their time- won the Cold War and a few conflicts since then! They built the OHIO class SSBN and the LOS ANGELES and SEA WOLF attack class submarines, and the SSGN. They turned the undersea domain into our domain. That’s an amazing
generation and we need to tell that story better.

The young team is amazingly smart, talented, dedicated, and energetic. They have grit and perseverance. They are ready to learn. I’m not sure we’ve fully appreciated all the implications of this challenge. It affects everything we do today, and we need to get this right to secure our future. With respect to knowledge and experience transfer, how do we leverage the wisdom of the mentors to horse up this young posse of talent we have, before they depart the pattern? I’m very interested in meaningful ways to do that and I’d be happy to hear about yours. Fortunately, we’re as busy as we’ve been in decades, and there’s nothing like real work to get folks up to speed quickly. This conference is a great opportunity! I’ve brought a bunch of my junior engineers today to be here and be with you. Where are you team? Please stand up.

It doesn’t come as naturally as it did with a more uniform population, with fewer mid-grade supervisors that traditionally were around in more numbers, on shop floors, in the office, on the test range. One could pick things up a lot easier just by being around the water cooler. Now it has to be more deliberate, and we’re running out of time. Executing work is different. A lot more thought is required in every aspect of the nuclear work model: engineering and procedures, training, supervision, and oversight. The old models and assumptions don’t apply. As just one example, the last time we started a new submarine design was for VIRGINIA in the early 1990’s. What does that mean for the team working on OHIO Replacement?

Second, budget. In particular, two dimensions of budgetuncertainty and reductions.

It has been manifested in government shutdown, furloughs, sequestration, continuing resolution, etc. All have had a measurable impact. A tension emerges in all of our discussions. We have a very mission-oriented team. We all want to get the job done, but have come under personal stress- uncertainty. We are doing worthy work that supports top national security priorities.

The work is very complex and must be done to high standards. It takes a certain amount of proper resourcing to do this work.

Resources are under pressure we haven’t seen in decades and some argue that this is a uniquely challenging time for defense budgets. My concern involves the dynamic that emerges as we strive to manage this tension. At first order, this is all a big distraction. As I travel around and talk to the workforce in the fleet, shipyards, and labs, there is more and more talk about the money and less and less talk about the technical work. In particular, senior management is almost consumed by budget drills- one after the next. The team is uncertain about the future and is spending an increasing amount of time conducting budget drills. This both consumes precious management energy and is highly distracting from the technical work at all levels. We need to do all we can to minimize these distractions, to keep our teams focused on the technical work for which we are responsible. I’m putting a lot of responsibility on my middle management, and they have naturally risen to the challenge, but they need support as I discussed.

The second order effect involves the response of our can-do industry. We are a highly motivated team that is generally anxious to get things done. To achieve the mission, in light of actual or perceived declining resources, people at all levels begin to think creatively about how they can make ends meet. This can manifest itself in many ways, trimming time off the schedule, trimming level of effort, trimming technical rigor.

This can happen at all levels of our work, from senior managers to the most newly qualified engineer or operator. Much of this activity, essentially taking risk, occurs in disparate parts of our Program, and may be happening without the direct knowledge of supervisors that integrate across all those separate and distinct parts. My concern is that as many of us reduce margin in the interest of getting things done, we’ll lose sight of the cumulative effect of our activity.

Some specific areas where this can happen is in our testing community, an area that is under tremendous pressure. Cost and schedule pressures reduce the number and rigor of tests. More powerful computers allow more powerful modeling and simulation instead of actual testing. This can be a sound approach, as long as we validate the code with data from prototypic tests. Our sense of optimism and history of success can also work against us here, giving us a false sense of certainty.

We’ve been here before in the Submarine Force with the MK14 torpedo. In the 20 years before we started shooting the M K-14 torpedo in anger, we had tested exactly two armed warshots, and those were against an anchored ship. Every other warshot was deemed too precious to sacrifice to testing, and every other test was compromised a bit more. Short budgets and long optimism led to 3 of 4 warshots failing in combat. Not as the result of a single problem, but three separate problems that had gone undetected-run depth, proximity fuse, and contact detonator were all off. That failure resulted in a religious approach to torpedo testing that lasts today. If we’re realists, we know the faults are out there, and the race is on to find them- and the rigor of our testing will determine who wins the race: the developer, the user, or the enemy.

What’s the next MK-14 in our business?

There is also tremendous pressure on requirements. The questions go something like this: Does it need to go that fast? Dive that deep? Be that quiet? How many ships do we need? How many missile and torpedo tubes do we need? All extremely valid questions. All with an eye on reducing cost. But again, balance is needed. Again, we’ve been here before. How many people here have heard of the mighty BOLO bomber?

The BOLO was a Douglas aircraft, largely adapted from the DC-2. Designed in 1934, it competed against designs from Boeing and Martin- and won. Heavily in its favor was the lower price, almost half as much as the Boeing competitor. It started production in 1936 and hundreds were made and deployed to operational units by 1937 as the B-18 BOLO. At the time of the attack on Pearl Harbor, the BOLO was the most numerous bomber deployed outside of CONUS. Most of the US Army Air Corps squadrons had them But as war loomed more closely, the BOLO clearly started to come up short in a few areas. Specifically…. range …. speed …. payload.. .. defensive armor…. and. .. offensive armament. So rather than send US aircrews to their almost certain death in combat, the United States had to go back to the Boeing model that was originally too expensive, the model which achieved fame as the B-17 Flying Fortress, and was relieved by the B-24 Liberator. Flying Fortress, Liberator, BOLO … which one would you want to fly into combat? You’re right. But how did we get it so wrong? It’s too easy to say that they were just boneheads back then and that could never happen to us now. Again, success can work against us when it makes us unreasonably optimistic.

I’m not concerned about the questions I listed above as we can and must be able to defend our design. But I am concerned about the questions that we ‘re not discussing. What are the implications of extending OHIO class to 42 years? For example material concerns, how much risk with a platform that carries almost 200 people and nuclear weapons? There is no margin for further extensions. Industrial base concerns- missile tubes and other strategic systems. Nation has not had to discuss nature of nuclear deterrence in 40 years. Are we taking too much risk with just 12 replacement SSBNs that will carry almost 75% of the nation’s strategic warheads? The road to the first strategic patrol in 2031 is a brisk walk- we have to keep moving or we’ll fall even lower.

As we go forward, let’s be the ones to try to balance the discussion. We in this room need to ensure our leadership-in the government and private sectors- have visibility into the decisions that are trading away performance, understand the specific nature of the risk we incur, and communicate that risk to one another-most important to the person who owns and is accountable for that risk.

As always, we ‘ll begin with the technically correct answer, a realistic schedule, and a realistic cost estimate. If we make a change from that starting point, we should be clear-minded about the risk we are incurring, and be deliberate about the decision making. Anything else may result in drifting towards shoal water without our knowing it, ending up breaking our programs or worse, unwittingly executing something that turns out to be unacceptable- the modem B-18 BOLO. This is always very costly.

I’d ask you all to keep that in mind, and set the tone in your lines of business that yes, we need to be creative, but we also need to have clear visibility and communication on decisions that increase risk to our programs. It is leaders, with their hands on the risk rheostat, who must ensure we stay balanced.

Admiral Rickover spoke often of the Never-ending Challenge to advance our nation and he said “progress, like freedom, is desired by nearly all men, but not all understand that both come at a cost.”

What we do is hard- it is stressful. To do what is technically correct we must be judicious, but not cheap; efficient, but not sparse; challenging, but not unrealistic. The Navy, the Defense Department, and the Nation, look to us to uphold the standard- to be fixed stars to navigate by. The stakes are more than just financial- the lives of our Sailors and survival of our nation are in the balance.

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