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Good morning. I thoroughly enjoy the privilege of being the PEO for the world’s greatest Submarine Force and the honor of presenting to that Submarine Force’s strongest supporters- the corporate leaders here. Our Navy-Industry partnership is without peer in DoD and is critical in developing, fielding and sustaining our platforms, systems and weapons. Together, we deliver capability to the Fleet on time- or early- within budget and with ever improving quality and capability. Truly remarkable.

I would like to thank the Naval Submarine League for inviting me here. You’ve heard from the Fleet and from the Resource Sponsor- now it’s the program execution side. We are indeed in interesting times- In budget terms, our Navy is operating on a continuing resolution, without a Fiscal Year 2013 budget, unsure of the duration of the continuing resolution, and not knowing if a severe cut- a.k.a. sequestration- will be enacted over FY 13 ‘s last 7 months. Meanwhile, we’re preparing to brief Congress on the still undefined 2014 budget and working with the resource sponsors on Program Objective Memorandum (POM) 15. Definition of insanity ? …. Maybe. Secretary Stackley, my boss, has told us to be leaders, not victims. In my view, times like these separate the leaders from the victims. If we’re called on to reset our Navy and its programs, industrial backbone or technical infrastructure, that’s what this Navy/Industry team will do- who else would our nation tum to? These are challenging times. Our culture of continuous improvement and affordability will stand this test and best position us to deliver capability our nation is counting on us to deliver.

I’m taking a different tack today-starting with a discussion about Team Sub and our objectives this year. I think you’ll be interested in knowing what Team Sub leadership considers important. I’ II follow with an update on our progress and some last thoughts on affordability.

My portfolio as a refresh. $7.3B in FY13, $43B across the PBl3 FYDP. 17 ACAT programs, with two of them being #2 and #3 in DoD. We are entrusted with a considerable amount of taxpayer money and consequently have the responsibility to ensure we use every precious dollar to its maximum effect.

Where we’ve come since the October NSL Symposium. And when I say we I mean our corporate accomplishments.


  • Finished CALIFORNIA’s Post Shakedown Availability and moved into T11O/APB11 Step 4 Testing
  • Ellen Roughead christened MINNESOTA
  • NORTH DAKOTA Pressure Hull Completed on Valentine’s Day- a ship that will deliver on the shortest span ever-60 months. Amazing when you consider that 20% of that ship’s design was changed and is the lead ship of Block Ill.
  • MISSISSIPPI Completed the Class’ Special Operating Forces operational test and evaluation
  • We received EB/Hll’s proposal for Block IV- the largest shipbuilding contract ever at $158 to $208.

OHIO Replacement- awarded an innovative research and development contract that, for the first time, incentivizes our ship designers to reduce cost across the entire program-design, construction and sustainment.

Torpedoes- completed delivery of 243 Mk 54 Production Upgrade 2 (P2U).

Surface Ship Torpedo Defense-started in-water testing of the Countermeasure Anti-Torpedo and nearly completed installation of the first hybrid prototype system on BUSH.

Integrated Undersea Surveillance System- Brought TllO technology with ICP 4 .5 onto two SURTASS ships and NOPF Whitey Island

SWFTS (Submarine Warfare Federated Tactical Systems)- Completed 5 installations.

Towed Array- got real, at-sea experience on one of two promising technologies for the next generation Thin Line Towed Array.

Overall- a great 5 months. On the right- more to come, including the award at year’s end of our Block IV contract and deployment of SSTD.

Our accomplishments link directly to the guidance provided by the Navy’s senior leaders. Design for Undersea Warfare- Update One. I take my lead from V ADM Mike Connor, Our Submarine Force Commander, ensuring that my programs deliver the capability he needs- today and tomorrow. Consistent guidance codified in a simple, straight forward thought piece is a leading element in making the right investments and ensuring continuity of program- a critical attribute of Affordability.

Our efforts are aligned not only with the Design for Undersea Warfare, but also with Navy Core Capabilities, CNO Tenets, and NA VSEA Goals. With their combined guidance, Team Subs leadership developed a succinct Mission Statement- Deliver and Support Reliable and Affordable Undersea Warfare Capabilities. That’s simply what we do.

This mission stands on the foundation of values our Navy/Industry team lives

  • Safe, High-Quality ships, systems and weapons. We honor the 50th anniversary of the loss of THRESHER this April a seminal moment in our business.
  • Integrity- in every facet of our business- Acquisition, morale, you name it. Without it, we collectively are dead.
  • Capability- We NEVER want a fair fight.

That capability delivered Affordably- our cultural mindset; and

  • People- we are all in the business of developing the next generation of Undersea Warfare platform, system and weapons designers, builders, and sustainers.

There are several areas we’re emphasizing in 2013. The list is not comprehensive, but these are the major thrusts.

The objectives are broken out into six separate areas with the first being platforms. Our top two objectives involve SSBNs, with the first being, Develop an SSBN modernization plan and the second, Meeting our affordability and cost reduction targets on the OHIO Replacement. The SSBN modernization encompasses bringing their sonar and combat control systems into the SWFTS model- affordably.

We have three key VIRGfNlA milestones flagged and objective 4 is focused on in-service with supporting USS MIAMl’s and USS Montpelier’s unanticipated repairs.

Lastly, we are working to complete an Analysis of Alternatives for Undersea Clandestine Insertion of Special Operations Forces.

Once you have the platforms, you need weapons and sensors to make them into a warship. Toward that end, we are pushing to deliver the first Surface Ship Torpedo Defense system to USS GEORGE H. W. BUSH.

My SWFTS program offices are working with Captain Elm- strom in PMS 392 on developing a plan to incorporate advanced weapons and payloads.

We are also taking into account that we now have Maritime Surveillance Systems within the PEO so we’ re working across IUSS, submarines, and frankly surface ship sonar programs to improve commonality between our acoustic systems .

Similarly, PMS 435 is looking to modernize our electronic warfare architecture plans, focused on Block IV and V VIRGINIA Class hulls, the OHIO Replacement, as well as relevant capability that can be affordably injected into today’s Fleet.

Team Submarine has three in-service specific objectives that also include acquisition: correct VIRGINIA Class sup portability issues; correct material alignment issues between submarine classes; and deliver the last part of the Submarine Rescue Diving and Re compression System. The Transfer Under Pressure capability will allow rescued submariners to go from a pressurized submarine, to a pressurized rescue module, straight to a decompression chamber.

In the Technology section, we are also looking at three objectives starting with integrating SSN and SSGN security programs into Team Sub’s acquisition programs.

Next is working with our government, industry, academic, and international partners to further our acoustic superiority activities. Lastly, we want to field the Universal Launch and Recovery Module for an at-sea test with a large-diameter UUV. I think this is an important next step in getting large UUV s aboard submarines and if we can find the money I think we’ll be able to learn a lot from this testing.

On the people side, we’re looking at our metrics and seeing where we have holes, or the potential for gaps in key areas and how we ‘re going to assess our workforce and then transition it to a different plan called AcqDemo.

The key here, though, is that we are actively looking at our workforce and making sure that we are training our replacements. We are taking a close look at how we do business including how we’re implementing should cost rules, improve how we work with the Navy’s business tools. In fact, we are holding a slzoald cost off site for all PEO SUB program managers and Deputy Program Managers in March.

However, l think there is one that most of you care about. We are working with NA VSEA 02, our contracting group, to reduce our contract cycle times. I think everyone here who has a contract with Team Sub can say that at best it’s not easy to get contracting actions done. We want to fix that.

So, that is a look into what Team Submarine considers as its 2013 objectives and what we are doing internally to improve how we operate and conduct business. Now to the programs.

As usual, we will start with what is considered the gold standard for major acquisition programs, the VIRGINIA Class.

If you were at my talk on the 15th, you heard me say that the VIRGINIA Class turned 20 years old last year. This program has gone from being one of the programs cited as being late and over budget to being held up as how to do acquisition the right way.

After a start that saw three of the four boats of the class delivered late, we have delivered the last five early to their contract delivery date and the seven boats now being built tracking toward early completion.

VIRGINIAs are out in the Fleet, conducting full-length deployments, capitalizing on the investments made in the class’ capability. Truly phenomenal.

This has been an event-packed year in the VIRGINIA Pro- gram. We’re starting construction on the last two boats of the Block Ill contract, laying PCU JOHN WARNER’s keel on 16 March down at Huntington Ingalls in Newport News, delivering the last boat of the Block II contract, PCU MINNESOTA this spring and commissioning her in the fall. Floating off, and Katie Fowler christened, the first boat of the Block Ill contract PCU, NORTH DAKOTA- which, by the way, is tracking toward an early delivery despite having a redesigned bow. And we’re going to start MINNESOTA’s PSA and end USS MISSISSIPPI. And that’s not to mention that we have already re-delivered USS CALIFORNIA from her PSA and finished SOF IOT&E aboard MISSISSIPPI and completed a Dry Deck Shelter fit-up on USS HAWAII.

Think about it this way, I mentioned several VIRGINIA Class boats by name. That’s more than one-third of the boats that are commissioned, under construction, or under contract, and I had not mentioned that we’re going to sign a contract for the next nine or ten ships of the class before the end of the year.

Best of all, with the exception of the Block IV contract sign- ing, this is now what we consider an average year, and once we start getting closer to delivering the two FYI 1 boats, we’ll be even busier and that’s the way we like it- execution, throughput, and putting boats on the waterfront.

One of the primary reasons the VIRGINIA Class program is operating at such a high tempo is because of the great Navy/industry team.

We cannot lose sight of what we accomplished within the VIRGINIA Program. In 2005 the CNO challenged us to reduce costs by nearly 20%. At the time people didn’t think it could be done. We had a mature design, were already in serial production- albeit only one per year, and we did not have a great track record with only one ship delivered late and another tracking toward an even later delivery.

However, we, together, came up with a plan and we executed an impressive design for affordability effort with minimal chum. Both sides knew what was at stake, we each had meaningful interest in getting this done and we did so.

The VIRGINIA Class has done an impressive job reducing costs, but we can do more. Looking across the entire submarine construction enterprise, we could have a Multi-Year Procurement contract across both the VIRGINIA Class and OHIO Replacement so that the common components can be purchased in bulk to achieve economic order quantity savings. This is a key to reducing the cost for both classes.

Once again, we have met our mark and achieved our total ownership cost reduction goals of 3:15- reducing the number of major shipyard maintenance availability from four to three and then increasing the number of deployments from 14 to 15. We were able to complete all the engineering required to shift from 72-month operational intervals to 96 and got it done in time to include in the Block IV VIRGINIA Class Request for Proposals. These efforts will also support the OHIO Replacement program’s efforts.

However, we can’t keep the team together forever and the VIRGINIA Program has lost some key members of the Design for Affordability and RTOC Team. Thankfully, most of them ended up in the OHIO Replacement program where they can impact their wisdom and lessons learned in the next submarine acquisition program.

However, early delivery alone is not enough … Our glide slope in terms of our average score for our INSURV trials shows improvement. As you might imagine, the first couple of boats experienced some growing pain, but we improved with each boat to the point where we’re nearly at a .90-an outstanding trend.

We track the number of areas where we are graded and scored. On USS MISSISSIPPI we scored a perfect 16 for 16 green. As I said at the time of her delivery last year, which is quoted at the bottom of the slide, MISSISSIPPI was, quote, “the most complete, combat ready VIRGINIA Class submarine yet delivered.”

Delivering more complete and combat ready does not mean that the newly-delivered boats are ready to deploy. We still need to put the ships through their paces and through their Post Shake- down Avail abilities before they are fully released to the Fleet.

We’re on the right curve to get the boats into the Submarine Force’s hands sooner. As with all first of the class, we used the first five ships to conduct IOT&E and we had longer PSAs. Now, we’re through IOT&E and we’re cutting our PSAs down from more than a year to about six months or less.

We’re getting through the construction cycle more quickly, with improved first-time quality, and into the warfighters hands more rapidly. It all goes back to what I said earlier, execution, throughput, and putting boats on the waterfront. The standard to which all others are measured.

Now, from production to contracting- we are now in negotiations for the next block of VIRGINIAs. Our goal is to award the contract this fall so as to minimize any impact to production and continue to produce on time and on budget.

The Block IV contract is a little different than previous ones because we are asking for multiple options- one for nine ships which is the program of record and a couple for I 0 boats as there exists a possibility that Congress would authorize and fund the Navy to build 10 VIRGINIAs even in these fiscally turbulent times.

That we actually have a chance to add a boat to the contract demonstrates both the trust that the Navy and Congress have in this program- a trust based on actual performance- and the need for these flexible wartighters in the Fleet. I do not know if we’ll be able to get the 14-2 boat, but we are certainly working to make it happen.

For what comes after Block IV, the VIRGINIA Payload Module. Admiral Bruner did a great job talking about this effort so I won’t delve too much into it.

Our guidance for the VPM states that it:

  • Shall meet existing attack submarine requirements
  • Shall mitigate the loss of conventional undersea strike capacity
  • Should host future undersea payloads
  • Should provide Special Operation Forces (SOF) undersea mobility support.

When we first started working on the VPM, we thought it would add about $500 million to the cost of a VIRGINIA Class hull and require about $1.1 billion in design work. Now, after two full cost estimates, we think we can design the VPM for about $850 million and build them for an additional $320 million per hull on average. Clearly, we’re trending in the right direction, but we still have to work the costs down to the bare minimum needed so that we can afford VPM equipped VIRGINIAs and my next topic, the OHIO Replacement Program.

Right now, we are in the Technology Development Phase and almost done with the ship specifications and moving into the system descriptions and diagrams. The program is in the detailed design for the compartment that will be used aboard the four United Kingdom SUCCESSOR SSBNs and our 12 OHIO Replacement SSBNs.

We know from VIRGINIA that the more mature the design, the more on cost and on schedule you can remain during production and we want to be further along with OHIO Replacement when construction starts in FY21 than VIRGINIA was when she started in FY97.

As we move through the Technology Development Phase we are looking at ways to control costs. While this part of the program accounts for only about 6 percent of the OHIO Replacement’s total program costs, it can have lasting effects on the ship’s total cost. Investing now will allow us to save over the life of the program. So, for this 6 percent investment, we will design an SSBN with SSN-like stealth at SSBN speeds, produce ability and affordability, the restarting of the missile tube industrial base, the establishment of three major test facilities, and a class that provides 124 strategic deterrence patrols an SSBN operational cycle with SSN technology.

The research and development contract we signed last December is truly a unique agreement in that we are incentivizing General Dynamics Electric Boat, which is the prime on the contract, to lower costs across all three phases of the OHIO Replacement- design, construction, and Operational and Substantiate. Whereas the VIRGINIA Class conducted successful acquisition and life cycle cost reductions during production, the OHIO Replacement is baking this into the program from the very beginning. This will maximize our savings while also ensuring that the boat we design and deliver has the requisite capabilities to successfully operate into the 2080s.

The contract, and really the program as a whole, is embracing the OSD Better Buying Power initiatives by targeting affordability and reducing cost growth. This is a unique research and development contract in that it purchases both level of effort and specific deliverables in a cost-plus fixed fee incentivized contract. This is the first time that l can remember a research and design contract being incentivized to reduce total program costs starting with the non-recurring engineering work, to construction, and operating and support. By starting to look at how to make the OHIO Replacement as affordable as possible now, we have the ability to really reduce the program’s entire life-cycle cost.

The contract also dovetails perfectly with the OSD’s Better Buying Power 2.0 initiatives by “Substantially enabling and achieving an affordable program” with effective “cost control throughout the product life” by rewarding contractors for reducing non-recurring engineering, acquisition, and operational and substantiate costs early in the program. It further “incentivizes productivity and innovation: and “promote effective competition” by executing competitive prototyping efforts to the maximum extent.

Affordability has been one of the OHIO Replacement’s major talking points- how we are working to control costs. However, I think it is important to point out that we are still going to deliver a platform that will carry the majority of our nation’s nuclear weapons. We cannot deliver a boat that can’t meet its missions. This platform is too important to take short cuts, it will be the foundation of our national security, and therefore must have the right capabilities to ensure its survivability and capability. While cost is important, we will deliver the right platform, with the right capabilities, to the Fleet in 2031. Credible deterrent at the lowest possible cost. That is our mantra and I can tell you we live it every single day.

To bring our mantra to life, we are pursuing a conservative design that greatly leveraged from the VIRGINIA Class- from pumps to combat systems, but more on that later. Further, we are taking the entire TRIDENT D5 Strategic Weapons Systems and putting it on board the OHIO Replacement.

Going back to what I said earlier that affordability does not preclude capability, we are focused on providing a submarine that will carry our nation’s survivable nuclear deterrent capability for the better part of this century. To do that, we will need to design and build a submarine that can operate in what will be a much different environment than we see today. To that end, we are doing R&D work to ensure the platform’s survivability- that is the number one consumer of R&D at this point. For example, we’re working on electric drive to reduce the number of moving parts in our propulsion system, a new stem, and the life-of-hull core. We are also working to make these ships more maintainable as we’ll only have 12 boats from which to draw.

We are taking a conservative approach to the OHIO Replacement’s design. We are leveraging what we can, what does not negatively affect the boat’s performance, and smartly investing in those areas in which we need to improve- most notably survivability. That is how we are balancing cost and capability. There is still much work to be done, but I think we are on the right path toward hitting our cost goals and our operational requirement.

Now to our combat systems and weapons- the real reason we’re building submarines as my SWFTS program managers never cease to remind me.

Just a reminder, our Submarine Warfare Federated Tactical Systems, or SWFTS, include almost all of our submarines non- propulsion electronic systems- except for the radio.

As the name suggests, these systems are linked together to help provide our submariners with a clearer tactical picture than if they were stovepipes. We are on a biennial cycle where we deliver commercial off-the-shelf hardware every even year and open architecture software every odd year- this is our Tl/APB process. SWFTS, then, is the engine that drives the Submarine Force.

As you can see, that engine is running at a very steady rate. Between 2013 and 2015, we’ll begin 29 SSN and SSGN SWFTS installations. That’s nearly half of the boats we have. We like to upgrade our SSNs and SSGNs about once every four years. In doing so, we make sure that they have the best capabilities possible AND we remove obsolescence issues with the hardware.

SWFTS’ steady drumbeat also allows us to look into the future and determine what T l/APB build will go aboard our new- construction platforms.

We already know what Tis we’ll have on our block IV VIRGTNIAs and the first OHIO Replacement and they are not even under contract.

By knowing what will go aboard these boats, we arc removing one of the more costly and high-risk portions of a submarine’s design and construction and drastically reducing the cost and virtually eliminating the risk. We’re budgeting $338 million for the OHIO Replacement’s combat system NRE. That is 17 PERCENT of what the SEA WOLF Class’ BSY-2 cost and about HALF THE COST of the VIRGINIA Class’s NRE.

From a capability standpoint, the SWFTS paradigm provides the Fleet with ever-improving capabilities. The Fleet drives what we work on- they give us a prioritized list and we work to deliver on those. So, not only is this a responsive construct, but it is also an exceptionally cost-effective one.

At the October Annual Symposium, I spoke a little bit about the need to restart heavyweight torpedo production and the concept of a modular torpedo or undersea vehicle.

We are currently working a three-phased plan. The first two represent re-starting torpedo production. As of now, we’ve gotten to the point where we are going to host an industry day this May so that we can gauge industry’s capabilities and interest in pursuing this work.

On the right, that’s where we start thinking about what else we can do with a MK48-type body. In the first increment, we’re going to look at being able to reach out farther than we can now by adding a larger fuel tank and also examine how we can get from a copper wire to a fiber optic wire.

In the next increment, we’ II look at a more modular weapon, with even greater range, new sensors, but utilizing the same form factor and warhead. As you can see, we have been working with a number of our Navy R&D organizations and we’re looking to start getting some demonstrations in the water over the next couple of years. Since we have not built a full-up-round heavyweight torpedo since 1996, we have to take these efforts one-step at a time.

Clearly, the Navy and its industry partners are facing some challenging times. However, we both have jobs to do, so we must continue to work together to ensure that our warfighters have the tools they need to do their missions and the taxpayers get the most for their investment in national defense. Toward that end, focus on the keys to provide capability and affordability. I think all of us will agree to these tenets- stable requirements, defined goals, strong Navy/Industry team, INVESTING in affordability. Without real investments we cannot hope to achieve our cost goals. We proved what seed money can do with the VIRGINIA Class Design for Affordability. The lesson is learned and we are making sure it is not forgotten.

Lastly, we must remain persistent- we have to look past the difficulties that face us and determine to get to yes. There are surely tough times and hard decisions ahead of us. However, we cannot let that be an excuse for not supplying the warfighter with the ships, systems, and weapons they need to do their job. Therefore, we must embrace the culture of continuous improve- ment and always look for ways to deliver the right capability, at the right time, for the lowest possible cost. In the months to come, it will be easy to say no. We can’t take the easy way out. We have to get to yes as often as possible.

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