The Trump administration’s nominee to be secretary of the Navy promised increased accountability and transparency in Naval acquisition issues during a confirmation hearing on Tuesday.

Richard Spencer made an overall positive impression with the Senate Armed Services Committee during his confirmation hearing as he vowed to consult with them like a company board of directors, agreed that the Budget Control Act (BCA) is hurting the military, and promised increased accountability and transparency, particularly on acquisition issues.

Richard Spencer, President Trump's nominee as the 76th secretary of the Navy. Photo: Center for a New American Security.
Richard Spencer, President Trump’s nominee as the 76th secretary of the Navy. Photo: Center for a New American Security.

Spencer agreed with a common line before the committee that dealing with the BCA “is probably one of the most serious issues we are facing right now for national security. The Budget Control Act has wreaked havoc with our readiness, the impacts on the lives of our sailors and marines.”

Spencer noted in his prepared remarks that he thinks a flat, lean, and agile organizational construct is needed to ensure the Navy and Marine Corps team can best operate in the government’s interest.

“My business career has been well served by the credo that accountability starts at the top and then permeates through the organization. I have also learned that each member of an effective organization must be empowered to put forth changes that will enhance its operational efficiencies,” he said.

Spencer, named as the nominee on June 2, is a financial industry executive who served in the Marine Corps from the late 1970s until 1981 and served on the Defense Business Board from 2009 to 2015 where he finished as vice chairman. He was appointed to the Chief of Naval Operations’ Executive Panel on Feb. 24, 2016 and transitioned to his current role as an Executive Advisor on Dec. 9, 2016 (Defense Daily, June 5).

Spencer is the second nominee for the Navy secretary position after the first nominee, investment manager Philip Bilden, withdrew from consideration in February. Bilden said his withdrawal was due to privacy concerns and challenges in separating himself from his business interests (Defense Daily, Feb. 27).

Committee Chairman John McCain’a (R-Ariz.) asked Spencer about cost overruns and accountability after framing problems in the F-35 fighter and Ford-class carrier programs, noting no officials have been fired over them.

Spencer said in his career accountability is important and it starts at the top with him. He has learned lessons through behavioral management to make a transparent process which clearly rewards positive events and other tools to take care of projects that are not performing.

Spencer noted he will be coming before the committee to ask for resources but must also have his own decks clean to make sure it is put forth in a prudent way.

When asked by McCain if he knows of anybody in the Navy fired due to program cost overruns he responded “not yet.”

Spencer said changes need to start with the acquisition process itself and learned from his time on the Defense Department Business Board that up to 32 layers of people are needed to sign off on an acquisition process, and that did not include considering major defense platforms.

Sen. Angus King (I-Maine) asked how he can be helpfully disruptive given all those layers. Spencer said in his experience that means initiatives often die by layer two so the department has to adjust how to think and act. However, if enough latitude is given to make decisions and control the hierarchy, the process can be improved.

Spencer said the department needs to allow people with the right knowledge to act and be held accountable in acquisition results.

He highlighted industrial science says the most efficient way to produce ships when there are a low number of providers is to give a clear line of sight for resources. Spencer said he intends to work with the committee to help assure the providers that they are providing the best long term sustainable resources in the most cost effective and quick manner possible.

He also responded to questions from Reed that while a 355 ship Navy is a good goal, technologies like unmanned systems, on and under the water, may yield great capabilities and increase capabilities beyond sheer ship numbers. Spencer later responded to further questioning by Sen. Tim Kaine (D-Va.) on the larger fleet issue.

Spencer said they cannot know the exact mix of future ships right now due to evolving treats and technology but said “what we also want to get our head around is, can we have a capacity number but have a capability that’s even greater than that. So have the capability of a 355 that might be a 300-ship Navy.”

“The concept that I would like to work with you all on is where we go for our capabilities, because that’s where the punch is,” he added.

The nominee also committed to Sen. Joni Ernst (R-Iowa) that finding solutions to the physiological episodes problem in the T-45, F-18, and F-35 is a top priority. He noted his experience on the business board showed him the Pentagon is an “amazing problem solving regime” but one that is fairly siloed.

Spencer said he will work with fellow service secretaries to share best practices on this and other issues in the department,

Before questions began, former Secretary of the Navy and retired Sen. John Warner (R-Va.) introduced Spencer, underscoring how he has committed to learning all of the challenges in the appointment and has consulted with 10 previous Navy Secretaries, including himself.

“On his own initiative, he reached out and counseled with ten secretaries of Navy to ask of them what they thought of the challenges of today, how best he might be able to fulfill those challenges.”

Warner said he and the other former secretaries believe Spencer is a fine man and most worthy of being given the opportunity before the committee.