Francis Rose Interview with Secretary of the Navy Richard V. Spencer

Francis Rose Interview with Secretary of the Navy Richard V. Spencer

Government Matters

May 20, 2018

FRANCIS ROSE: Lethality, resilience, and agility are the three themes of the National Defense Strategy by which Defense Secretary Jim Mattis and President Trump will judge the branches of the military. The secretary of the Navy says his forces are investing in modernizing current capabilities and developing new capabilities to meet the threats the U.S. faces around the world. Richard V. Spencer is the 76th secretary of the Navy. Mr. Secretary, thank you very much for joining me this morning.

SECRETARY RICHARD V. SPENCER: Thank you, Francis.

MR. ROSE: You told the House Armed Services recently that you were delivering a plan to them with urgency. Why the urgency behind that plan? And what are your most urgent needs right now?

SEC. SPENCER: Francis, the urgency stems from the top overarching elements that I’ve put forward at the Department of the Navy, which are people, process and capabilities. Everything we do – everything going forward must be done in urgency. One of the problems that the Pentagon has had in the past, as you well know, is the ability to study and admire a problem. We have to get down to business – whether that’s rapid prototyping, whether that’s changing processes in order to become more efficient, more effective, as quickly as possible. It reigns through the whole comments that we’re talking about and the steerage that I am giving the department. Urgency is the most important.

MR. ROSE: So the first of those is people. What is the urgent issue that you have with people? What’s the benefit that you have right now, the leverage that you have, and what are the solutions that you’re looking at people-wise?

SEC. SPENCER: People, as we know, are the most important asset we have. And in many ways, I think, in the history of the Pentagon people might have not been included as the most important ingredient. We have amazing weapons platforms that cost amazing dollars, but without them – without the people operating them they really don’t work that well, so to say. But we have to focus on what we’re doing to keep the best and brightest. That is the urgent mission we have right now. We spend large amounts of money training every sailor, every Marine to do every one of their jobs. And we have to provide for them the environment and the opportunity and the challenges to make this their career and stay in the service, producing for us.

MR. ROSE: Secretary Mattis talked recently about changing the way that your sailors are deployed. Is that one of the elements that you’re undertaking for that effort?

SEC. SPENCER: Most definitely. If you look at where we’re having our shortages in various areas – whether it’s pilots, whether it’s aviation mechanics, whether it’s general motor mechanics – one of the biggest issues is quality of life. And we’re addressing that right now. And that is the dep-to-dwell, as we call it, getting that under control. We’re going to have – obviously upsize the head count so we can ameliorate that issue, and also provide the challenges, the education, and the progress for one’s career.

MR. ROSE: Capabilities is the next one. And the capabilities that you have are as important, obviously, as the capabilities that you want in the future. Tell me how you’re examining that mix?

SEC. SPENCER: It truly comes down to modernization. There’s two ways to look at how we’re growing the Navy. One is by procurement itself and the other is by modernization. Modernization speaks to capabilities. We have platforms that we’ve had for some time – whether it’s the DDG, whether it’s the F-18. If we can upgrade, modernize, that increases the capability, that increases our lethality, our agility, and our ability to fight tonight.

MR. ROSE: We will talk later in our conversation about the goal of the 355-ship Navy, but regarding capabilities, you’re in the 280s right now. What are the capabilities that are the most urgent for you to obtain today?

SEC. SPENCER: Well, if we look at upgrading the DDGs, you heard that we just extended their life across the board to 45 years. We’re going to have to have many of those platforms have their radars upgraded modernized, the weapon system modernized. That’s critical upfront right now. If you look at the littoral combat ship, we have the mission modules now coming on for anti-surface warfare mine countermeasure. Urgent, got to get those packages out. That’s our – that’s increasing capability.

MR. ROSE: The third one is probably the least sexy of all these, but it’s the processes that are important behind the scenes, the back-office functions and others. Tell me what you saw when you came into the Navy Department, and how you and your colleagues at the top of the department are taking that process issue on?

SEC. SPENCER: Francis, it’s interesting. One of the comments I’ve made that I haven’t been in Washington for my career, but I have been hanging around the hoop for about ten years. During that period, I was on the Defense Business Board doing studies for the actual secretary at the time on various topics and got an insight into how the building worked and some of the taxonomy the building uses. In many ways, realizing that shaking the head up and down doesn’t mean yes. (Laughter.) But, what we found in there is process is one of our biggest levers that we have. If you’ve realized, number three pillar for Secretary Mattis’ comments are reform. And this is where we get into process reform, taking the additive steps, the redundant steps, the redundant systems out of the equation, so we can get to a more effective, efficient answer more quickly.

MR. ROSE: Your undersecretary, Thomas Modly, was on the program a couple of weeks back. And he talked about the changes to the CIO office at the Navy Department. He talked about the changes to the chief management office there. Is that symbolic of what you’re trying to do? Is that indicative of what else we may see reform-wise across the Navy? Or are those kinds of one-off issues to deal with things that he found were urgent challenges, process-wise?

SEC. SPENCER: Tom is just one of the best members of the team, because he’s been at this before inside the building, which is one of the reasons that he is on board the team in the Navy right now, doing what he’s doing. He exemplifies how we are getting after process.

When you look at a $194 billion organization with 800,000 people, and a hierarchical structure, we have to flatten out the organization. We have to increase people’s authorities and responsibilities and allow them to do what they do best. Tom is looking at that. He’s also looking at back-office systems. We’ve developed over time, as you well know, various different systems that don’t talk to each other. We’re streamlining that. That is where we’re going to get some of our best reform products.

MR. ROSE: About 30 seconds left in this part of our conversation. I imagine he has a priority list then. Are there items there that you can talk about? Or are they still in development, sir?

SEC. SPENCER: We’re still in development, but generally what we’re looking at is back-office efficiencies. We’re looking at structural efficiencies. Process in general, whether that goes through acquisition all the way through the way we operate ourselves, and how we actually structure our operational elements.

MR. ROSE: A massive 90-day look inward for the Navy has wrapped up. What are the tangible results? We’ll go straight to the source to find out when Government Matters continues, right after the break.

(Break.)(Music plays.)

MR. ROSE: In September of last year, Navy Secretary Richard Spencer ordered a fleetwide strategic readiness review after a series of deadly naval accidents. That review ran simultaneously with the U.S. fleet forces-led comprehensive review. Pick things up there with part two of my conversation with the 76th secretary of the Navy, Richard Spencer.

Mr. Secretary, what’s the status of completed, of current, and of future initiatives and reforms based on all of these investigations that you’ve conducted?

SEC. SPENCER: Francis, as you know, after we had the accidents in the Pacific, we set up actually two efforts. One was the Comprehensive Review, which was more tactical in nature on how we operated, which the CNO had launched. And then I launched the Strategic Readiness Review. And what I was looking at was root causes, how did we get to where we are? Everyone’s seen the report. The main theme there was the normalization of – a deviation to normalization. We are correcting that with about 22 recommendations that we have adopted on the Strategic Readiness Review side.

If you look at the oversight entity that’s controlling this, and monitoring this, which is the Readiness Oversight Committee, the vice CNO and my under, Tom Modly, are doing an amazing job in that regard. We have about 78 percent of all the 110 recommendations have been implemented. And I want to make clear what that means. That means we have started each one of those recommendations. They’re in various stages of completion. On the earlier side, some of the tactical issues we did – turning automatic identification systems on, which is the ability to have a ship light on somebody’s radar specifically while we’re transiting high-traffic areas. That would be one that we’ve checked the box and completed. Training certificates – we’ve checked the box there.

Areas where we have probably started – not probably – we have started and implemented but not done, common bridge configuration. We know where we want to get on that. We’ve put money in the POM to get there. Don’t have the money yet in sight, but we will get there. That’s underway. The longer-term ones, such as becoming a constant learning organization, a continual learning organization, we’re putting together what we think is a structure that we’ll put in place. That will be a two- to three-year cultural evolution for the Navy. So in many ways we are well underway, finishing many, and have some underway, and probably five or six to go.

MR. ROSE: The compliance with those recommendations is very important. I don’t mean to understate that. But we thought before the McCain and the Fitzgerald that the ships and the people on them were complying with what they were responsible for then. What visibility do you have to be confidence that what you’re putting in place will actually happen out on every ship across the fleet?

SEC. SPENCER: We have looked at the – at the command-and-control and command-and-feedback structure that we have in place. You’ll see that we’re in the process of amending that right now. And the most important thing is not only our ability to see into what’s going on in the fleets and the operating areas, but also the ability for the commanders to look up and realize a direct line of sight as to who they’re responsible to. That is now bright, clear, and operating.

MR. ROSE: I want to talk more about capabilities, as we did in the first part of our conversation. Bloomberg is reporting that you are asking for a fourth carrier to be wrapped into the three-carrier of the Ford-class carrier buy that you had planned. We’re learning about a bearing problem with the Ford that is causing it to come back to port. Is now the right time to be asking for a fourth ship, when the one that we have has had so many problems?

SEC. SPENCER: That’s a great question, Francis. And one thing I’d like to do is kind of clear the air as to what’s going on with Ford. We did take a big bite out of the apple, to be very frank with you. And I think it goes back to Secretary Rumsfeld who said: Let’s put all these technologies on there and just get it – get it underway, versus doing it on an incremental basis. I like the quote of my fellow secretary, Dr. Wilson of the Air Force. When she was testifying, said: Gee, can we have one or two whiz‑bang technologies per platform going forward, please?

The Ford is actually proving out quite well. The EMALS, which is the electronic catapult and the arresting gear on the original sail that we had – we were supposed to do 400 traps, we did 747. We are amending and editing the systems as needed. When it comes to propulsion, that was an escape in quality by the manufacturer. And we’re going to get after that. We’re funding it. And we’re also going to put a claim in, if in fact claim is due. The bottom line is, it’s a first series of a ship. If, in fact, we were to question the cost of a first series of every ship, we would own 100 first series of ships.

The combination of buying two at the same time, we believe we have some tremendous savings. We worked with our suppliers to really button down. And we think we have about 10 percent savings. We went back to them and said: How do we get to 20 percent? And they said, wow, that is a real leap for us. And I said, let me rephrase that.

What can we do for you to get to 20 percent? And it changed the dynamic of the conversation. As an example, they came back and said, wow, if we had a digital tool which helped us to go from paper to digitization in the planning of this ship, that would help us tremendous and we might be able to even add 2-3 percent more savings. You do a return on investment, that makes sense. Why wouldn’t we buy the tool to get to more savings? That’s the kind of discussions we’re having now.

MR. ROSE: And we have less than a minute left, Mr. Secretary. Your goal is 355 ships. Tell me about the inventory, the mix that will required to get you from the 280s to 355, not just the number?

SEC. SPENCER: You’ve seen our force structure assessment. We’re going to have to be continually amending that because, as an example, when we just extended the DDG fleet 45 years, that will make us a little heavy on the DDG side. We have the frigate coming online, which will give a good balance to that. And the most important, number-one priority, as you know, is our submarine efforts. And those – that will be an effort that we’re going to be focused on, because we have very little room to slip calendarization on that one.

MR. ROSE: Mr. Secretary, thank you very much for joining me this morning. I appreciate it.

SEC. SPENCER: Thank you very much, Francis.

(END)