The United States Navy

Status Report

(Jul 00-Dec 01)

I. Manpower

• Improved Recruiting
• Met recruiting goals in FYs 1999, 2000, 2001
• July, August, and September 2001 were three of seven months in the past six years that CNRC exceeded 5,000 net new contracts. August, September, October, and November 2001 mark the first time since 1996 that CNRC achieved new contract goals for four consecutive months
• 640 more "A" school accession seats were filled in FY01 than in FY00, even though the FY01 accession goal was 1,480 less than FY00
• Met accession and nuclear field goals again in FY01. Entered FY02 in an improved position over FY01 relative to Delayed Entry Program (35% versus 31%.)
• "Accelerate Your Life" recruiting campaign (launched in March 01) out-performed the "Let The Journey Begin" campaign in leads generated by 24%. The U.S. Navy Recruiting website (www.navy.com) won a web site advertising award competition at the national level. Our new Hispanic website (www.ElNavy.com) was chosen as one of Yahoo's top ten new websites.
• Improved Enlisted Retention
• FY01 reenlistments exceeded FY00 by 20%
• Retaining 56.9% of eligible first term Sailors (+9.0% from 47.9% in FY00)
• Retaining 68.2% of Sailors with 6-10 years service (+6.0% from 62.2% in FY00)
• Retaining 84.6% of Sailors with 10-14 years service (+1.2% from 83.4% in FY00)
• 21,004 SRB reenlistments were approved at a cost of $230.1M in FY01
• Improved Officer Retention
• Officer loss rate for FY01 (8.8%) was the lowest since 1990
• Record numbers of submarine Junior Officers are going ashore, encouraged by improved compensation and bonuses
• Reduced Attrition
• 10% fewer first term attrites than last year; fleet leadership is the key
• FY01 RTC drug losses down 34% due to enhanced testing prior to recruits reporting to RTC
• USNA and OCS attrition reduced by nearly 50% from FY99 to FY01
• Enhanced Fleet Engagement
• Detailer Communications Program is reaching out, trying to contact 100% of Sailors entering 10-month window for orders (success rate = 92%)
• 35 Career Decision Fairs sponsored by the Center for Career Development were held in FY01, engaging over 20,000 Sailors and family members
• Strengthened Readiness
• Reduced enlisted at-sea manning shortfalls from 6,200 in FY00 to 5,000 in FY01
• Officer manning at sea averaged greater than 100% for FY01

• Recruiting
• Shortfalls continue in officer specialty areas (e.g. Medical and Chaplain Corps) and enlisted priority ratings (e.g. CTI and MS.) Future recruiting must offset losses and achieve the correct "mix" to meet community requirements. Improving officer diversity remains a high priority
• Officer Retention
• All URL communities are below retention goals except NFO
• Full engagement in the JO decision making process at all levels, coupled with tailored special and incentive pays, are critical to keeping our future leaders
• Significant base pay raises continue to improve retention
• I-TEMPO
• Potentially very costly (estimated $120 million per year)
• National security waiver invoked by SECDEF suspending costly high deployment per diem during Operation Enduring Freedom
• Total Force Requirements Determination
• Need to better define manpower requirements, especially ashore, to achieve optimum tradeoffs among active, reserve, civilian, contractor personnel and technology insertion
• AT/FP
• System engaged to increase number of Master at Arms personnel from 1,900 to 9,000 by 2007
• Management Headquarters Reductions
• Defense Planning Guidance mandates a 15% reduction in Management Headquarters Activities. Navy to begin reduction in FY 04

II. Current Readiness

• Amended FY02 Budget increases Navy's topline by $5.4B
• 50% of increase devoted to O&M
• 25% of increase devoted to R&D
• Commissioned 7 new ships, including USS Iwo Jima (LHD 7), and christened 7 more, including USS Ronald Reagan (CVN 76). Reserves took delivery of the first C-40A Clipper (replacement for C-9)
• Delivered 4 new construction Large Medium Speed Roll On/Roll Off (LMSR) ships in 2001, adding approximately 1,560,000 square feet in surge sealift capability. Additionally, USNS Stockham was added to the Maritime Pre-Positioning Force (MPF) as the second MPF Enhancement ship
• FY 2002 budget best readiness budget in years:

Comparison of FY 2001 Appropriation Achieved to
FY 2002 Amended Budget

Ship Depot Maintenance	$664M increase due to revised man-day rates, material costs, and notional ship availability increases based on revised PR-03 BAM requirement and schedule changes.
Aircraft Depot Maintenance	FY02 submit funded program to goal: 100% for deployed squadrons and 90% for non-deployed squadrons.
Ship Operations	FY02 program incorporates prior year usage of fuel and spare parts. Program estimate based on predicting usage by ship class.
Flying Hour Program	$782M increase addresses anticipated 8% AVDLR increase from FY01 for all Type/Model/Series aircraft. AVDLR usage increase due to aging aircraft is the primary driver for FY01 and FY02 increases.
Aviation Procurement Navy (APN)-6 Spares	Historically budgeted to 85% of requirement with expectation that 100% would be achieved during execution. Data indicates that expectations were not being met. In FY02, budget was increased to 94% to improve readiness with focus on aviation spares.
Base Operating Support (BOS)	FY02 budget reflects most recent pricing of utilities, BOS contracts, and leases. Addresses emerging, mandatory and unbudgeted issues which occurred in FY01 and carried into FY02.
Real Property Maintenance	FY02 goal is 2% Asset Protection Index. No additional funding required in FY02 to meet goal. Industry standard is 2% to 4% with industry average at 3.5%.
Program Related Engineering/ Program Related Logistics	FY02 budget reflects an increase of $106M. Designed to restrain/reverse FHP cost increases through logistics, engineering studies, and engineering changes. Provides means to mitigate aging aircraft repair and increasing AVDLR costs.
Total Readiness Increases	FY02 Amended Budget compared to FY01 reflects an increase of $3.4 billion for readiness.

• Expanded Baseline Assessment Memorandums (BAMs) to validate Fleet requirements in addition to FHP, Ship Operations, Aviation Depot, Ship Depot/IMA, Aviation Program Related Logistics/Program Related Engineering (PRL/PRE), Pearl Harbor I&D, and SRF Yokosuka . Expanded BAMs include:
• Aviation Support Equipment
• Non-Program Related Logistic/Non-Program Related Engineering
• Fleet Training - Ranges, Ordnance, Targets, Modeling & Simulation
• Ship/Subs I&D consolidation
• Port Engineers
• Availability Messing & Berthing
• Fleet Technical Support Centers
• Established the Navy Training Range/OPAREAS Organization consisting of key OPNAV and Fleet representatives to review Fleet requirements and represent a holistic view of training needs
• Improved AT/FP Program:
• FY02 increases AT/FP-related billets (MAA, EOD, Mobile Security Force, etc.) from 9,802 to 12,935. Working toward a goal of 16,800 by 2007
• Integrated NCIS support
• Improved TTP & equipment
• Over $1B dedicated to AT/FP in FY 02 budget

B. Challenges

• IDTC "bathtub"
• Still too deep. Low Density/High Demand (LD/HD) units especially affected

• Need to further refine requirements for FHP, Ship Depot Maintenance, Program Related Logistics/Engineering, and Integrated Installation Support
• Must strengthen the requirements definition process to be more inclusive and collaborative — starting with the Fleet

• Must better assess training options, including impact on readiness
• Working to formalize "larger unit" readiness requirements
• Must replace ordnance used during Operation Enduring Freedom to fully support the Defense Planning Guidance

• Must assess impact of:
• Total Ownership Costs
• Integrated Logistics Support
• Basing
• Safety
• Environmental concerns
• Manpower and training requirements/costs

III. Future Readiness

• Procured 7 ships and 83 aircraft in FY01. Procured 5 ships and 88 aircraft in FY02
• DD(X): Obtained OSD concurrence to proceed with the DD(X) program (formerly DD 21.) DD(X), along with CG(X) and the Littoral Combat Ship (LCS), will provide assured access and maritime dominance well into the 21st century
• Pressing ahead with advanced programs & technologies:
• Platforms: DD(X), CVN(X), JSF, FA-18 E/F, LPD-17, Virginia SSN, SSGN, T-AOE(X), MMA, MH-60R, MH-60S
• F/A-18E/F will IOC in Sep 02
• Equipment: TBMD, CEC, SHARP, ATFLIR, AESA, RMP, ARCI, MIDS, TacTom, ERGM, Electric Drive, ADS, AIM-9X, MIDS, and NFN
• Making substantial investments in RDTEN
• $10.5B devoted to Navy RDTEN in FY 02
• Third largest appropriation — only O&M ($26.9B) and MPN ($19.6B) are larger
• Progressing toward Network Centric Warfare:
• Developing Naval Fires Network (NFN) & Multifunctional Information Distribution System (MIDS)
• IT-21 in 182 of our ships
• Link 16 in the fleet
• NMCI integrating Navy and Marine Corps
• Accelerating the Area Air Defense Commander (AADC) capability via Rapid Deployable Prototype.
• Cooperative Engagement Capability (CEC) successfully completed OPEVAL in May 2001.
• Approved SSN homeport shift to improve operational efficiencies.
• Three refueled SSNs will be homeported in Guam, with the first ship arriving in 2002 and the last in the Fall of 2003.

B. Challenges

• Procurement rate is too low:
• Ships: Need 8-10 per year to sustain current force structure; will build 5 in FY02
• Aircraft: Need 180-210 per year to sustain current force structure; will buy 88 in FY 02
• FY02 Procurement is about $10B below required $34B/year requirement
• PGM procurement must be accelerated to meet DPG requirements/real world usage rates
• Balancing Transformation and Readiness
• Procurement, innovation, experimentation, and transformation compete with current readiness for funding
• Business of Naval Warfighting. Need to:
• Downsize support overhead
• Install more efficient business practices
• Speed procurement timelines while lowering cost.
• Reconciling rapid prototyping with existing acquisition regulatory environment

IV. Quality of Service

• Compensation
• Expanded Career Sea Pay (CSP) to E1-E3s and officers with less than three years of sea duty; authorizing CSP to all personnel the moment they cross the brow
• Expanded CSP Premium eligibility as a separate payment to top five enlisted pay grades with over five years of sea duty
• Provided base pay raises of 3.7% in FY01 and 5.0% for FY02, with targeted pay raises for mid-grade officers and enlisted, plus special pay/bonus enhancements
• Reduced average BAH out-of-pocket expenses for Sailors living ashore from 18% in FY00 to 15% for FY01. Further reduction to 11.3% in FY02. Goal is zero out of pocket expense by 2005
• Authorized all shipboard E-4s with greater than four years of service an opportunity to move ashore
• Quality of Life
• $1.7B in 2001 and $955M in FY02 dedicated to improving Navy family housing
• FY03 budget projects funding for 1,147 new and replacement housing units, almost double FY02. Improvements planned for nearly 2,300 other units
• Privatizing 38% of the 50 state inventory (~19K units)
• Leased 600 homes for recruiters not located near base housing
• Programmed construction of over 4,800 barracks spaces
• Directed the creation of community managers to better lead and retain the Navy's civilian workforce
• Implemented a Navy Thrift Savings Plan in Oct 01 to allow accumulation of tax-deferred investments
• Commissaries provided cost savings to military members of approximately 27% compared to public markets
• Quality of Work
• Commissioned Navy College Program, including partnerships with colleges, to provide rating-related associate and bachelor degrees via distance learning
• Refocused Seaman to Admiral 21, consolidating 8 of 14 enlisted commissioning paths and improving support for Sailors selected for commissioning
• Launched Task Force EXCEL (Excellence through our Commitment to Education and Learning), to achieve a revolution in Navy training
• Initiated stores loading services in all Fleet concentration areas, allowing contractors to load provisions after delivery to pier
• Fielded Material Processing Centers (MPCs) at all FISCs to expedite material-processing support for afloat units

B. Challenges

• Accelerate Shore Infrastructure recapitalization from current rate of 87 years to OSD goal of 67 years
• Fund 100% sustainment to maintain shore infrastructure and correct all C3/C4 infrastructure discrepancies by 2010
• Accelerate the elimination of inadequate Bachelor Housing for all ranks through integrated use of MILCON, PPV and private sector initiatives

V. Alignment

• OPNAV
• Established Deputy CNO for Warfare Requirements and Programs (N7)
• Focused OPNAV N4 on Fleet Readiness and Logistics
• Re-instituted CNO's Executive Board (CEBs) to resolve Navy-wide issues
• Fleet
• Created Commander, US Fleet Forces Command (CFFC), to integrate policies and requirements for manning, equipping, and training all fleet units during the IDTC
• Created Fleet TYCOMs to lead their communities from the waterfront
• Strengthened ties between CFFC, NWC, NWDC, and N7 to enhance experimentation and transformation
• Reorganized CBs to a single division with 6/10 deployments
• In March 02, will stand up Commander, Navy Network Warfare Command as a single POC for Network, Space, and Information Operations
• Realigned Fleet Support Community into Human Resources and Information Professional specialties

B. Challenges

• Pursue CFFC-led initiatives to enhance warfighting effectiveness
• Cultivate creative tension within OPNAV, emphasizing capabilities-based programming
• Invest in web tools to further streamline administrative processes
• Build stronger relations with our Marine partners and the entire Joint team:
• DoN/USN/USMC vision statement