By Geoff Fein
Navy leadership is working to ensure the surface fleet continues to get the funds it needs to carry out its expanding range of missions and conduct operations, training and maintenance, the Secretary of the Navy said.
Additionally, the Navy needs to provide industry more certainty and stability in what the service intends to build and buy, so that defense companies can make sound business decisions and plan their own corporate strategic future, Ray Mabus told attendees last week at the annual Surface Navy Association symposium in Arlington, Va.
“In return, we expect industry to make the required investments in infrastructure and in training to build quality products and retain a quality workforce; and we expect industry to pass along the cost savings to the Navy and to the nation that are created by the stability of knowing our intentions,” he said. “As industry learns to build specific types of ships and systems, I expect costs to come down.”
Although the Navy’s 2010 budget, approved last month by Congress, gives the service the funds to do the job, Mabus noted the nation is facing challenging economic times.
“We have a responsibility to the taxpayer to ensure the defense budget they entrust to us is used wisely,” he said. “The president has charged the military to reduce waste and cut unsustainable programs from our books.”
Effective use of the taxpayer’s money begins with a commitment to maintain a strong industrial shipbuilding base, Mabus added. “This is a strategic priority and a vital national interest.”
Maintaining the shipbuilding industry promotes competition, controls cost, contributes almost $40 billion a year to the nation’s gross domestic product, keeps thousands of highly skilled, highly dedicated workers on the job, retains those skills of that workforce, and ensures the long-term security of the surface fleet, auxiliaries, and submarines, he said.
For the shipbuilding industrial base to be successful in lowering cost, that effort has to be coupled with changes in the Navy’s acquisitions process, Mabus told the audience.
“I think the LCS downselect plan is a good example of the cost control measures we have and are implementing in order to build the right size Navy of the future,” the secretary said. “It ensures competition, and I think it illustrates our seriousness in curbing shipbuilding costs from spiraling ever upward. Simply put, if costs continue to rise, we will not get the Navy we need. Continuing to do more with less, which as so many surface warfare people know and have repeatedly demonstrated they are capable of, will at some point become unsustainable. Quantity becomes quality at some point.”
Mabus told attendees he is confident the Navy is making the right decisions to lower cost and improve the service’s warfighting capability. “Rationalizing the way we research, procure, and field new equipment will help.”
He also noted several steps the Navy will need to take to cut costs including pursuing commonality of successful hulls to drive down the costs of subsequent ship classes; enforcing consistency within a block of ships or baselines–incorporating new technologies only with the introduction of new blocks of a system or new baselines of a class; examining the complexity of a system or platform as it is being procured; ensuring systems have open networks and open architecture; building flexibility into platforms to confront whatever challenges might be thrown at them over their service life; and using all the contracting tools available to incentivize cost control.
“We are moving to a model that will use fixed-price type contracts as the standard for all but high-risk new systems or classes,” Mabus said. “Cost is going to be and has to be fundamentally incorporated into every decision we make. I want to stress that is not at the expense of quality or research and development. But let me say it again, unless we control costs, we will not get the Navy we need and we will not have the capacity to meet all the missions we are assigned.”
Part of Mabus’ strategy to reduce the cost of procuring and operating ships is to consider energy as a key performance parameter. The secretary has made it a goal to significantly reduce the amount of fuel the Navy consumes.
Mabus has previously outlined his fuel economy goals, which include requiring half the Navy and Marine Corps’ total energy consumption to come from alternative sources by 2020; reducing petroleum usage in the Navy’s 50,000 strong commercial fleet of non-combat vehicles by half by 2015; and demonstrating a “Green Strike Group” in local operations by 2012 and deploying the “Great Green Fleet” strike group by 2016 composed completely of alternatively powered ships.
“We simply rely too much on fossil fuels and we are going to change that. And, in doing so, we will improve our warfighting capability, we will improve our long-term fiscal position, and we will improve the strategic position of this country,” Mabus said. “We are going to hold industry contractually accountable for meeting energy targets and system efficiency requirements. And we will use the overall energy efficiency and the energy footprint of a competing company as an additional factor when we make acquisitions.”
Under his energy proposal, Mabus told the audience the Navy this month will sign a memorandum of understanding with the Department of Agriculture to work together to encourage development of renewable energy.
“We will share technical data, program management, and financial expertise, coordinate a mutually reinforcing strategy, and collaborate on projects to develop renewable energy and biofuels,” he said. “It is a pretty exciting opportunity for the Navy and I know it’s going to yield long-term benefits to building a sustainable and cost-effective energy infrastructure.”
Mabus told reporters after his speech that the joint venture between the Navy and the Department of Agriculture is to coordinate research activities and make sure the Department of Agriculture is looking at what can be used by the Navy and to make sure things the Navy is looking at can be produced by American farmers.
“We are beginning to move into the second and third generation of biofuels,” Mabus said. “Both the Navy and Department of Agriculture are doing research into these areas and it just seemed to make sense to do more coordination between the two instead of going down separate paths.”