By Emelie Rutherford
The Navy’s No. 2 officer said yesterday the service will end some weapon programs and focus on total ownership costs of systems as it strives to be more efficient with its funding.
Vice Chief of Naval Operations Adm. Jonathan Greenert said that as his service works to fulfill Defense Secretary Robert Gates’ mandate to be more efficient within a constrained budget, some programs will have to be canceled.
“Terminate inefficient or ineffective programs.” Greenert said while listing multiple Navy cost-saving initiatives and describing its ongoing “wholeness review.”
“It isn’t going to happen, we’re going to have to terminate it, sorry,” Greenert said during a speech in Washington. He did not name any programs during his comments to a Center for Strategic and International Studies audience that included defense-industry officials.
Other cost-saving measures the sea service is pursing include entering into more multi-year procurement and fixed-price contracts with industry, as well as buying out the final planned purchases of a system’s production line–so the Navy can close down the line and focus on the next needed capability in that area.
The Navy continues to work towards factoring the total ownership cost of systems, Greenert said.
Chief of Naval Operations Adm. Gary Roughead’s guidance for the coming year calls for such total-ownership-cost examinations–of procurement, lifecycle, personnel, maintenance, and sustainment costs–to be part of all requirements, procurement, and policy decisions (Defense Daily, Oct. 20).
For example, Greenert said, the service is making training for a ship a so-called “key system attribute” that is considered early in the requirements-generation process.
“We’ve focused too much…on just acquiring the thing–build it, get it out,” he said. Now the service will consider the training costs early on and making them part of milestone decisions and cost estimates, he said.
The Navy is making total-ownership-cost considerations as it plans the requirements for the future SSBN(X) Ohio-class ballistic-missile submarine replacement, Greenert said.
“We’ve been working that pretty deliberately on SSBN(X),” he said. “The most recent (activity)…we have actually put cost as…an objective threshold, just like we do the other parameters. And we want to move training to that, and have that conversation.”
Weighing total-ownership costs necessitates bringing “the fleet in sooner,” he said. For example, sailors can provide input on the operational costs of nuclear-powered ships.
The new emphasis on total-ownership costs has spurred a reorganization of sorts in the Navy that brings the acquisition and requirements closer together, he said. Part of that work is bringing officials from both worlds together at meetings. The service also has a program nicknamed the “hostage exchange” where requirements officers spend time in acquisition offices, he said.
The Navy, anecdotally, has seen “great payback” from this exchange, he said.