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Introduction by Admiral Kirk Donald, USN, Ret.

I thought that in the vein of an introduction, I wanted to share with you my experiences with Secretary Stackley and maybe give you some insight into just what he has meant to the Submarine Force and to the Navy during his tenure as the Assistant Secretary of the Navy for Research, Development and Acquisition. It really goes back to the beginning of his term when he first assumed the office. At that time, you’ll remember, there were a lot of things that were going on.

We were embryonic in the beginnings of the Ohio Replacement Program, getting to two per year for Virginia was a real challenge, trying to achieve that, VPM was just a twinkle in somebody’s eye, not to mention all the other things that were going on in the Navy outside of what the Submarine Force is all about. But when Secretary Stackley got into his office, as an astute observer, he saw that there was a significant amount of work that had to be done to get these programs ready for prime time, if you will. He did what a great acquisition executive would do, recognize the threat vector and then proceed to dig in, and that he did.

I would characterize it in this way, there are two pieces to Secretary Stackley. He can at one time be your harshest critic and greatest skeptic, and he demonstrated that in those early days. And there are folks in this room that remember that, remember it vividly, the Dave Johnsons, the Willy Hilarides, the Steve Johnsons, Terry Benedict, Kevin McCoy, Paul Sullivan and a host of N97s who sat through some very, very difficult challenging meetings where in the finest tradition of what the Submarine Force has done, the stakeholders marked their positions and then they proceeded to drag each other to the truth. And these were some tough meetings, heated, passionate. I think we had first names substituted with expletives, where parental lineages were questioned.

But what it really reflected was something that’s wonderful about the Submarine Force and the programs, it’s the respect for the dissenting view. It’s the respect, the acknowledgement of the dissenting view, the value placed on that, and then arriving at solutions. And Secretary Stackley’s approach to capabilities, requirements, affordability, all of that helped us arrive at the positions you have all heard from the acquisition executives that have been here today. But also, look at what has resulted from the support that we’ve received and how well the programs are doing as a result of having the facts straight, having commitments. Once the hands are stacked, the decisions are made, there’s no daylight.

And the other side of being your toughest critic and your greatest skeptic is when all that hard work, that passionate work is done, when it comes time to represent that to the Navy, to the administration, and to the Hill, you take someone with Secretary Stackley’s credibility from the get-go in those environments, and add to that a well-founded argument about why this is the right thing to do, it’s a thing of beauty. It’s a real thing of beauty to see how it has all worked out. We couldn’t have done it without him. We couldn’t have had the success we’ve enjoyed, and it doesn’t stop now.

As we’ve discussed, we’re at an inflection point. The going is going to get tougher. The old arguments that have been won will be new again. We’ll have to go and make sure that we’re in execution. And I am absolutely confident that that passion, that rigor, that dissenting view and respect for the dissenting view, will continue.

So with that I want to first thank you. Thank you for all that you’ve done, and offer you the podium to share some words of wisdom to us.

Secretary Sean Stackley:

Good afternoon. This will not be a pep rally session. We’ve got a lot of work to do. In fact, I’m concerned when I look about this audience here, I’m wondering who’s back in the shipyards getting the work done.

Kirk, I’ll be honest, I’m looking forward to getting my first name back. The expletive deletes are—they are what they are. I’m sitting here staring at Jeff Geiger. Jeff and I have worked together now for over a quarter century on some tough projects, some challenges that looked like they were insurmountable, some pretty dark days. Yet one by one, we took these huge problems and broke them down into much smaller solvable problems and finally got to the target that we were aiming for.

I’m saying that now because we’ve got some huge challenges ahead, really huge, but really they’re opportunities. On the one hand they are opportunities. On the other hand they are compelling needs, and I’ll talk about that a little bit.

First, seriously looking about the room, and I say this from the heart, the talent that is in this room right now covering every end of the spectrum, all things submarines, there is not a problem or a challenge out there that you all—government, industry, military, civilian—working together can’t solve, can’t overcome, can’t best. When I talk about where we’re going, and I’m probably going to repeat words that Joe Mulloy probably described earlier this morning, and the other speakers, it’s going to require your best. It’s going to require everybody’s best here and it’s also going to require that we are all pulling in the same direction.

I don’t think that part will be a challenge. I think this group has been pulling in the same direction throughout your profession-al careers. What I’m talking about is pulling a little bit harder moving forward.

I’m going to talk a little bit about the state of the Navy, exhaust you all on another view of the budget outlook, and then what I call knowing the right moment. Pythagoras: “Know the right moment.” We’ve got the right moment coming up, and I’m going to highlight that a bit.

First, operations. If you work in the Pentagon and you work the budget machine, everything that we look at, everything that we discuss, everything that we propose, ends up on a PowerPoint slide, probably a quad chart. At the bottom of that quad chart, it’s going to say, cricket. It’s going to have a little box next to it and it’s going to be red, yellow or green, and it’s China, Russia, Iran, Korea and terrorism, and everything that we do is being measured against that.

The challenge that we’ve got is the budget doesn’t flex as the threat flexes. So as we’ve gone through—going back over the various POMs up until this ’17 budget that’s been delivered to the Hill, the budget has been flat, at best. In constant year real dollar terms, it has been going down, but the threat has been going up. The threat has been going up, and it’s well known.

What we’re trying to do is balance a program, where a pro-gram is everything from people to hardware to operations to advanced capabilities, against a rising threat. If you look back about three years ago, sequestration is coming, the Budget Control Act is coming, the world is coming to an end. The service chiefs are going over their briefings and they’re looking at the budget outlook. One by one, they articulated that we’re at the floor. We’re at the floor in terms of risk. If the budget goes any lower, we won’t be able to meet our requirements in terms of the defense strategic guidance. That was about three years ago.

But the budget has gotten lower. It has gotten lower. What this budget dialogue with the Hill has turned into is a discussion of risk. The Hill is pretty tired of talking about risk. It has come to realize that risk is a very bendable measure in terms of capability, requirements, the threat. So the Hill is going about doing their own assessment.

I was describing to another group earlier this week—I went over a couple of days ago and talked to each of the staff directors. They used their recess to go out and visit the force. They went out, they wanted to talk to troops. They wanted to talk to sailors. They wanted to take a look at hardware. They wanted to visit the fleet in theater. They went down to the depots. And they came back with their own assessment because they knew what they would get when presented the president’s budget, they would get some dialogue about risk, acceptable, where the other alternative is obviously unacceptable, and they wanted to come up with their own assessment.

Their assessment, unsurprisingly, is pretty bleak. It’s bleak. It reflects a force that has been driven hard, tired iron, aircraft that is exhausted, depots that are overloaded. They see ships and aircraft that deployments are being stretched. They understand the rising threat and they also understand, as they look across all of this, that they are part of the problem.

What we’re doing is we’re asking more for less from the force inside this Budget Control Act environment. Even the BCA that a couple of years ago was being touted as a breakthrough because we’ve got stability, yeah we do have stability, we have stability at a lower budget. So let’s not cheer too loudly.

So now they’re taking a step back. They’re assessing, where are we today and where do we need to be? They understand the box that they put us in in terms of the BCA and they’re starting to get a better appreciation of the impacts of that budget on the force. They’re also wrestling with what we are talking about inside of our own five walls in the Pentagon, which is if you take the budget environment that we’re in and you take those cricket assessments, then a couple of things have emerged this past cycle.

One is a discussion about posture versus presence. This one gets a little bit emotional. From the CoComs perspective, if you ain’t got presence then you ain’t got posture. They’ve come over in closed discussions and also in hearings to try to refute the notion that you can maintain a degree of posture back in the states and that will satisfy their need in theater. And so they’re arguing pretty hard for presence. Of course, presence drives the build, and so there’s a thought process inside the building that you can reduce presence, increase posture, reduce your bills, and still maintain deterrence. That’s being pretty heavily debated right now.

The other aspect that has emerged in this budget is being called the third offset strategy. Deputy Secretary Work, he’s kind of brought this strategy forward and he’s put a lot of thought into it. In many ways, it makes great sense. It makes great sense. When you look at the threat and you look at the rate of rise of the threat’s capability, when you look at where we are today and what do we need to do to maintain the upper hand, particularly when you’re talking about laws of large numbers when you deal with a major combat operation, he’s looking for that third offset in the future that will give us that sustained superior capability.

To be honest, the Hill doesn’t understand what it is. They don’t understand what it is. They understand it’s investing in future advanced capabilities. They’re kind of looking for it in the budget, but they’re not becoming enamored by it. They’re not becoming enamored by it.

They consider mass to be very important. They do consider presence to be very important, and that starts to translate into things like force structure. And much of the rest of my time here is to talk a little bit about force structure.

That’s the Hill, that’s the budget, that’s all I want to talk about on those. If you have questions on that there’s a bunch of other issues that will be brought up on the Hill that I beg you all not to pay too much close attention to. One of them is acquisition reform. I think we’ve exhausted that topic.

There’s an alternative carrier study. Is Matt Mulherin here by any chance? No, okay. I was down at Newport News on Friday and he wanted to get my insights into where we’re going with the alternative carrier study.

This is precious to us. Carriers are the ultimate in terms of low density, high demand assets. The alternative carrier study was given birth by Senator McCain. He’s looking at the trends in terms of aircraft carrier cost. He’s looking at trends in terms of A2AD, and he’s looking for the Navy to come back with some alternatives.

So we’ve launched a study and will dutifully report that out this year, but there’s not a pony in there. We shouldn’t be looking for a pony in there. The 10thcarrier air wing is going to be one of the issues that Congress wrestles with.

And then the other one that you all are quite familiar with, the National Sea-based Deterrent Fund. The last thing I did before coming over here was hearing preps with the secretary. We spent a good bit of time walking through the script for answering the questions on the National Sea-based Deterrent Fund because the different committees have different positions.

If you’re talking to the appropriators, you have to have one answer for all four committees. And all four committees, when you give them that answer, they have to hear what they want to hear, but you have to get what you want to get. It’s a bit of a trick, but we’re working it.

The last thing about the Hill in this budget cycle is it’s an election year. And so with everything else swirling around: the threat, the top line, BCA, it’s an election year. And so we may tend to very practical concerns such as; will we get a budget, and when will we get a budget; you can bet that we will not get a budget by the first of October. So you have to start to factor in what impacts will that have in terms of execution? Although sadly, we’re becoming pretty practiced at operating under a continuing resolution.

Force structure, everybody here should be familiar with CNO’s force structure assessment, last updated in 2014, 308 ships. In fact, we will hit 308 ships in 2021. Come hell or high water, we’re going to get to 308. I can say that confidently because we have 65 under contract and construction right now. So if we don’t authorize and appropriate another ship between now and 2021, we’ll be at 308 in 2021.

The flip side of that is every ship that we request from this day forward is shaping the Navy beyond 2021. So what is the Navy going to look like in 2022? Well, that’s going to be our 2017 budget request. In the five years after 2021, that’s the FYDP that we just put on the Hill, and on and on.

So it’s 308, which if I was having lunch with Secretary Lehman, he would say you’ve got a half sized Navy. But 308, that being the requirement, gets there in 2021. The real issue we’re debating about right now is what the Navy will look like beyond that.

So we’ve submitted a 30 year report to Congress. Everybody should be familiar with that. When you tear open the 30 year report to Congress, we’ve got a lot of short falls that start to emerge after 2021. So we climb for a decade to get up to a 300 ship Navy. We get up there, we hold it for a brief period, and then we start to fall off.

Why is that? Well, that’s because of some of the challenges that we’ve got in the period of the Ohio Replacement, frankly. And again, you all should be intimately familiar with that. The reality is, if you’re going to recapitalize your strategic force about once every 30 to 40 years, that’s a huge capital investment. If you’re going to put that on the back of the shipbuilding program you’re going to break the shipbuilding program.

This is part of our impassioned plea with Congress, and frankly with OMB and with OSD. If you put the weight of Ohio Replacement on the back of our shipbuilding program, you’re going to break our shipbuilding program. We’ll be about a 240 to a 250 ship Navy, and that’s just straight mathematics.

So the Sea-based Deterrent Fund, frankly this is Congress listening to our plea and starting to build a framework, give us authorities, give us some tools to build out Ohio Replacement more efficiently. We fought—one of the last decisions in PB ’17 was getting OMB to agree to partially fund Ohio Replacement in 2021. They gave us $2.3 billion in the first year of incremental funding for the lead boat. Our foot is in the door, and our job now is to basically bust the door down the rest of the way.

Today’s force structure of 272 ships gets to 308. Again, we’ll get there in 2021. If you go ahead and take a break from shipbuilding for just a little while, and you look at the next lane over and take a look at aviation, we have challenges in aviation.

We have aviation readiness issues today. Again, we’re flying our aircraft 50 percent above their historical rate, and that’s a lot of wear and tear: aging aircraft, track logging depots, backlog in parts and maintenance. And so we have a lot of aircraft out of service reporting against our requirement.

What does that mean? It means more demand in terms of investment in the aviation accounts. At the same time, we’ve got the challenges in the shipbuilding account. Those two, we have to have a balanced force. We’ve got to bring both of those into POM ’18 and address both of those.

Advanced weapons, I’ll call it a gap. The reality is that we’ve got some tremendous weapons coming down the pipeline. They’re in development today. They’re going through testing today. But when we start to replace our weapons inventories, we’re replacing weapons with advanced weapons that cost about four to five times what the one that’s currently in inventory cost.

And this isn’t something that you can choose to do or choose not to do. This is something we’ve got to do because the threat is increasing. The systems that China is fielding; Russia has re-emerged, their capabilities; our legacy weapons; we’ve got to up their capability. It starts to become a cost equation that’s putting a lot more stress on that same budget.

And then the other threat that we need to be wary of is cyber. We’re kind of waking up—I saw Dave here. Cyber is starting to get really hard. Dave left the Department of the Navy and took his cyber tools with him, but it’s big. It’s pervasive. It’s ubiquitous. It affects everything that we do. There’s not a weapons system out there today that we don’t have to take a hard look at, is it cyber hard? Is it cyber secure? We’re really at the nascent stage in terms of dealing with cyber, another pressure in terms of investments, pressure in terms of capability, and it will remain a high priority item.

So now I’m going to get to subs. In the 308 ship Navy’s 272 we’re comfortably at 52 attack submarines, 14 boomers and four SSGNs. I say comfortably—if the CoComs were here they would describe that we meet about 40 to 45 percent of their demand in terms of submarine services. In fact, across the board we meet about 40 to 45 percent of the CoComs demands for ships. You start to think, 272 ships, we have 100 constantly deployed, out of the 272. The way we’ve been doing that is we’ve taken deployments that used to be six months and now they’re seven months on average. Some go up to eight months. So 40 to 45 percent success rate in terms of meeting combatant commander demands at 52 submarines.

When you break out that 30 year report, what trend are we on? Well, the good news is that we’ve been building Virginias at two per year since 2011. Two for four in ’12 became two for four in ’11. That’s good news. We have an unbroken two per year rate that goes from 2011 to 2021, and we’ll talk about ’21.

So what has happened to the size of the Submarine Force during that period of time? It has gone down. While we’re building two per year over a 10 year period, the size of the Submarine Force comes down. It’s a matter of replacing the LA class that were built at a higher rate.

If you project on beyond the 2021 time frame and you take a look at the build rate with Ohio Replacement and Virginia, when they’re side-by-side, one Ohio Replacement, one Virginia, we hit a trough of 41 submarines in 2029—41 submarines in 2029. So we’re at 52today, we’re hitting 40 to 45 percent of the combatant commanders’ demands, China is on the rise, Russia is back in the blue water, and we’re going down to 41 submarines. This is the ultimate alarm bell, the ultimate alarm bell.

And, while we talk about attack submarines, the reality is the GNs go away at the same time. They retire in 2026, 2027, 2028. Those four come out of inventory. Their mission, how are we going to make that mission up? Well, we’re going to make it up with Virginias. So that’s more tasking, more duty for Virginia-class submarines. It’s a bad equation. It is a bad equation.

This is the fallout, frankly, of a decade of extremely low build rates for submarines. It takes that long for it to work its way through the system. Now we’re not going to turn this around overnight, but what we’ve got to do is get focused on, what are the opportunities to turn this around?

The world of submarines is going to transition from a stable, inadequate, one submarine per year rate to two per year. 2016 is the first year in which we actually deliver two submarines per year, Illinois and Washington. So this is the first year we actually deliver two submarines per year.

We’re just now starting to learn, getting lessons learned on installing Virginia payload tubes. So we’re at a jog. We’re at a slow jog right now. But in the course of the next four to five years, we’re going to go to sustain two boats per year. We’re going to add Virginia Payload Modules. We’re going to complete the Ohio Replacement design and start building Ohio Replacements.

In 2021 we’ll have Ohio Replacement lead boat. We’ll have a significant backlog of Virginias coming through the system. And we’ll be breaking our teeth and cutting our teeth on Virginia Payload Modules and trying to insert those in-stride in the Virginia program without losing all of the efficiency that’s been gained throughout the program. And if we do all this perfectly, then we’ll be at 41 in ’29, 41 attack boats in ’29.

It won’t be good enough to do all this perfectly, we’ve got to do more. And doing more is holding onto two boats per year. It’s holding onto two boats per year. How are we going to do that?

First, we’re going to take advantage of everything that we’ve invested to date on all things submarines over the last 10 to 15 years, whether it’s the upgrade at the shipyards, whether it’s integrated data environments, whether it’s learning through a skilled workforce, whether it’s expansion at Quonset Point, whether it’s the ongoing expansion that’s going on at Newport News. We’re going to leverage every dollar that we’ve invested in submarines over the last 10 to 15 years. We’ve got to hold onto the skilled workforce, but equally or more important, we’ve got to grow a skilled workforce. We’ve got to add skilled mechanics at both, frankly, Newport News and Electric Boat, to address the increased build rate.

We’ve got to get more affordable, because it’s not going to be a simple matter of adding another $3 billion per year on top of the budget to sustain two Virginias per years. So we’ve got to take a look at all the procurement dollars that are going into submarines in the 2020s and understand, how do we buy down some of the costs associated with increasing Virginia build rates back up to two per year? So we can start negotiating now, Jeff, okay? Or we can wait until Matt is in the room and we can lock the door until we arrive at a common view.

But the reality is that we’re looking at over $10 billion per year for a decade going to submarines, submarine construction. To get that marginal extra boat, it can’t cost another $3-$3.5 billion for that marginal boat. That’s the challenge.

That’s the problem. That’s the opportunity for everybody here, pulling in the same direction. You’re going to be somewhere between asked and demanded to help solve that problem, because we can’t afford to settle for the 41 boat attack Submarine Force at a period of time when the threat will be overshadowing what it looks like today.

So, where do we go with that? Where’s Dave Johnson? Dave lives, eats, breathes, dies to pull together the program, the single program. The single program is all things submarines. That includes a steady state rate for Virginia at two per year, flowing right through 2021.

The key in ’21 is going to be to do that without batting an eye, because we can’t afford to put Ohio Replacement at risk. The assumption in the Ohio Replacement Program is lead boat in 2021 and she will deliver in 2029 and she will be on patrol in 2031. She has a patrol date right now that’s on a fleet schedule somewhere, and she’s going to fulfill that schedule.

That means that everything to the left of that date we have got to hit perfectly, perfectly. That means that if we set a target that says she will be 83 percent design complete when we start construction, that we will be at 83 percent design complete when she starts construction. That means every material item that has an in-yard need date will be showing up in-yard on that date or earlier, and on and on and on.

So now, how do we get there? Two thousand fifteen was a very busy year. Ohio Replacement design, keeping it on stride, we had to frankly work very closely with the Brits to keep common missile compartment on stride. We had an RFP that needed to go out the door for detailed design and construction of the lead boat. To do that we had to lock down the technical baseline. We had a fleet development of specifications. That all got done in 2015. A lot of heavy lifting by government and industry.

The thing we didn’t have, though, the thing we didn’t have is a clear view on how are we going to build the Ohio Replacement across the industrial base? And how are we going to do that side-by-side with Virginia? So we spent a lot of time last year working with EB and Newport News on something we refer to as the submarine unified build strategy.

It took a look at risks. It took a look at facilities, throughput, manpower. It took a look at investments. It looked at Virginia. It looked at Ohio Replacement. It looked at material procurement across the submarine programs.

We asked for industry’s input. We put together an independent team led by Paul Schneider, a lot of you all know Paul, and had them separately take a look at not just industry’s input but come up with a separate recommendation, and we formed a government position.

We then brought industry into the room and within a couple of weeks I think we had a deal. I think we had an agreement in terms of how we will build Virginias, how we will build the Ohio Replacement, how we will build Virginia Payload Modules, and how we do this managing risk and costs, industry’s concerns and the government’s needs. And then we took it to the Hill. We explained to the Hill what our plan is, got concurrence across the Hill, and now we’re moving out and executing accordingly.

What comes out of all that, frankly, is the opportunities. What comes out of all that with a clear discussion with industry is a clear view of capacity. And when you go into that level of detail you start to identify the added capacity, now you see the room to sustain two Virginias per year, with acceptable risk.

So I think by every measure, technical, production, financial and everything else. The challenges are pretty incredible. A lesser group of people would be intimidated by it, but you all, not you all. You thirst and you hunger for this opportunity. The reality is we need to get this work done. We’ve got to get it done in a tough fiscal environment and a million details need to be managed.

I’m going to close with some quotes and then turn the rest of the time over for discussion. Who would Stackley want to quote to this audience? I decided to go with Rickover. I told Dave Johnson a friend of mine brought a 1975 Saturday Evening Post magazine with an article from Rickover in it. I’m making a copy of it and giving it to the CNO. It still applies today. Everything he said then still applies today, except for references to Jimmy Carter.

But the hard work, to march through the budget, march through what it’s going to take to design and build each ship, what it all is going to boil down to is talent. It’s going to boil down to people, and Rickover had his eye on that. And so I’m going to go ahead and borrow some of his quotes.

“I have learned from many years of bitter experience that we cannot depend on industry to develop, maintain and have available a technical organization capable of handling the design of complex ships and their equipment unless the Navy itself has a strong technical organization to oversee the work in detail.” I’ll go to my grave with that belief. My best example of that is a gentleman by the name of Jack Evans.

A couple of years ago we needed to take a look at where Ohio Replacement was, where it was in terms of designs, milestones and all that sort of thing. It was at a critical stageand we needed the best. We needed the best on the government’s side to uphold the government’s responsibility in terms of pulling the program forward. The reality was the best had his papers in to retire. Jack was working for AT&L at the time. He was on his way out the door to retire.

I asked him if he would consider staying on to get Ohio Re-placement through her next milestone. He’s a great American. He put his papers aside and he went in and just did one final round of heavy lifting. Frankly, it wasn’t just the time that he was there, it was the baseline that he set for the program and the standard that he set for the program. That somebody like Jack, after 35 plus years in terms of working submarines, stuck around for that last go-around on Ohio Replacement to ensure that it was fair in the channel and headed in the right direction. That’s what Rickover was talking about.

And so then what do you do when Jack retires? Well, this is where I explain to Dave Goggins, everything that you did in Virginia that you thought was a great accomplishment, that was nothing but a warm-up. That was nothing but a warm-up because what that was for was to train you to step into the Ohio Replace-ment Program.

And by the way, this will not be a revolving door. You’re not goingto go in for a year and then move on. Dave, you’re there and just plan on dying with your boots on.

And that’s what it takes. That’s what it takes, that kind of talent. And I’ll be honest, I’m a little bit concerned because I don’t know how deep that bench is, I don’t. It’s probably not as deep as we want it to be, which brings me to the next Rickover quote.

“The most important job of the man in charge of a technical organization is to select and train the people working for him, not to issue orders and directives. But to do so, he himself must be technically competent. No one, no matter how high his position, can accomplish a technical aim by simply ordering it. Nature knows no rank.”

So, I turned to Dave Johnson, who was putting his papers in. I looked atthis huge thing called “All Things Submarine Coming Our Way.” I asked Dave, are you ready for another round? He’s a great American. I won’t say that after we leave here, okay?

But he is, he is. Personal sacrifice, other opportunities, put them aside. And he knows what’s before him. He’ll be in the job for three years, at least. In that three years’ time he’s going to ensure that we’ve got a clear path for two Virginias per year. That’s fine from a programmatic standpoint.

The other thing that he’s got to do, and the same conversation I had with Mike Jabaley, was build the bench. Build the team. I don’t know how deep, how wide. You guys have to go out there and find the team, on the government side, find the team that’s going to carry this on in the years ahead.

That brings me to the next Rickover quote. “There is no broad and easy highway to leadership, but only the long road of experience gained through hard and unremitting work.” For a lot of you all, that’s been your life. But for right now, I’m just focused on the government side.

When I read that quote, I think about folks like Karen Hender-son and George Drakeley and Mike Kessler and Steve Schultze. If they put their papers in, I’m going to bar that door. Those folks have talent that does take 30 years to get; 30 years of experience and there’s no shortcut. Thank God that they are where they are, because what they’re working on is so important to all of us.

Which brings me to the last Rickover quote. “Too many naval officers today believe that technical training is not essential and that they can rely on management techniques to make decisions. This has been an important factor in the loss of technical competence in ship design and construction. It is a fact that nearly all decisions in the Navy today deals with engineering problems. So to avoid being surprised by technical advances, we must know where the responsibility lies for the quality of our ships and the readiness of our Navy for war.”

Now I’m thinking about Willy Hilarides, who will retire in a couple of months, and SEA-05, a critical billet for all things submarines that needs to be replaced. Those are the next two key positions that will affect all of us, all of our lives, because they will be the individuals that will be responsible for the technical issues that we’re challenged with, helping resolve, helping to stay ahead of the problem so it does not slow us down to delivering Ohio Replacement in 2028.

That’s Rickover talking about government, talking about the military. I worry about that, but I also worry about industry. I worry about the industry side of the equation.

So again, I look about this room and I see tremendous talent, tremendous experience. I know that with this talent here we can solve all of these issues. But I don’t know how deepyour bench is. I don’t know how broad your talent base is.

But I know this, we can’t take anything for granted. We can’t take anything for granted. We put 12 men on the field if we have to, we’ve got to win this game. And I’ve got to lean on you all to ensure—you know, don’t operate inside your PRD. We’ve got to be thinking the long game here, 10, 15 years.

You’ve got to be checking your roster. You’d better be check-ing who is going to relieve your chief engineer and who’s going to be lined up behind that individual when he or she retires in the next five to 10 years. Check your roster. This is not a short game. This is a long game.

We play a 30 year game because that’s how long it takes to build a Navy, 30 years. I need you all to be checking your roster. And I guarantee you, when we sit down I’ll be asking you, who’s on your scorecard? Who’s in the game today and who’s on the bench, because we’re going to be relying on all of you.

So that’s a quick broad brush of the Navy, all things subma-rines. I go back to my opening quote from Pythagoras, know the right moment. Know the right moment. This is the right moment. And if we don’t make the most of this moment, if we don’t have two boats in ’21 in 2018, we probably aren’t going to have two boats in 2024 or ’26 or the years after. We’ve got to lock it in and we’ve got to leverage all this investment, all this talent, all this capability, because the nation needs more than 41 in ’29.

So with that, any questions, anything you all might want to talk about? We’ve got March Madness going on. We’ve got spring training going on. We’ve got hearings going on. I’ve got a gavel up here.

Question. : Secretary Stackley, I think you just became the longest serving assistant secretary of the Navy in the history of our Navy, which I think is a testament to what you just talked about as far as longevity.

SEC. STACKLEY: I think it reflects I can’t find another job.

Question. : I was actually going to say, how much longer will you be with us?

SEC. STACKLEY: I don’t know. I say this from the heart, I have the best job in the Pentagon. I’ve got the best job in the Pentagon. I mean, ships, aircraft, missiles, satellites, whatever it is, ground vehicles. I was crawling through an amphibious combat vehicle just yesterday, down the shipyard last Friday. I’ve got the best job at the Pentagon and I work with a great team.

So I get up every day and look forward to going to work. I go home at night wishing there were more hours in the day. I don’t know how long it will last, but I appreciate it every day.

That’s not the kind of question I get at a hearing, though.

Question. : Secretary Stackley, just a question about the realm of possibilities. Some of our people have talked about contract execution being one of the long poles in the tent of getting things happening. And I wondered, based on our experience in submarines when we were shorthanded we went to Congress and said this is a critical thing, we need to pay extra money, we need additional people. Any thoughts about contract specialists that we train at NAVSEA and then they go off to the rest of the govern-ment for opportunities and promotions? We might say, this group is critical.

SEC. STACKLEY: You know, we batted that around. Here’s the reality. This goes back to 2009. The workforce is too small, at the time it was Paul Sullivan, and we said let’s map out what sized workforce we need. We launched NRAC to take a look at this. We said, we need about 5,000 more folks in the acquisition workforce to get the job done.

I think contracts was probably number three on the list in terms of numbers. And so we did, we brought in the numbers in terms of contracts. But the attrition rate is high. It is high, for a couple of reasons.

One is, it is hard work. Two, a lot of folks think they want to be a contracts officer until they get to be a contracts officer and then they decide maybe that’s not what they really wanted. But three, just like you described, particularly at NAVSEA, the experience that they get at NAVSEA makes them extremely marketableanywhere else in the government as well as outside of the government. And so retaining the talent at NAVSEA has been a bit of a challenge.

We have not arrived at the right answer. Your comment about added compensation or something to that effect, a retention, I’ll take it onboard. I know we’ve talked about it.

I actually had three all day off-sites this past year with all the heads of contracting just to talk about the workforce and the work, because they’re out of balance right now. So we’re kind of on acampaign there. So I’ll take onboard the notion of, what more can we be doing to retain the workforce? That is our most inherently government responsible thing, okay, the contract. They’re our frontline soldiers.

With the headquarters cuts coming and people start to sit there and try to suggest that we’re going to cut contracts, it’s like, over my dead body. This is our life blood. So ask me again in a couple of months, okay?

I don’t want to stand in the way of the awards ceremony, but thanks for your time. Thanks for what you have done in the past. More importantly, thanks for what you are about to do.

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