IV. Gaining Efficiencies and Flexibility
for the Total Force

From 1988 to 1998, the Department of the Navy’s Total Obligation Authority (TOA) decreased by 40% in constant 1998 dollars. Coincident with this decrease was a marked increase in forward-presence and contingency operations. In fact, owing to the unique capabilities naval forces bring to a turbulent post-Cold War world, the peacetime Navy- Marine Corps team has never been busier.

Today, our deployed naval forces maintain a high level of readiness in part by shifting resources from non-deployed forces. Therefore previous declines in funding, coupled with increases in operational tempo, resulted in disproportionate impacts on personnel retention, maintenance backlogs, recapitalization, and modernization . The resulting effect is most apparent and acute in non-deployed readiness, which affects those forces that are not on deployment or are scheduled to depart in the near term.

The Readiness Challenge

This chart shows the readiness “bath tub” effect (readiness versus time) and illustrates the difficulty non-deployed forces experience as they pass through the Inter-Deployment Training Cycle (IDTC). While this chart depicts only carrier air wing readiness, similar trends are seen among non-deployed ships and submarines. These are precisely the forces that would have to surge in the event of a major theater war. The deeper the “bathtub” becomes, the greater the risk to our ability to respond with combat-ready follow-on forces. Clearly, the slope that IDTC units must climb to attain the necessary levels of readiness by deployment is getting steeper. This accelerated activity greatly affects quality of life and fleet morale. To make up for resource shortfalls, our Sailors work harder and longer to compensate. Not only does this prevent them from spending the needed and well-deserved time with their families, it also stresses them both mentally and physically at a time where they should be focused on preparing for deployment.

Similarly, the Marine Corps’ high operational tempo comes at the expense of not investing in modernization, infrastructure, and quality of life accounts. For example, sustaining today’s readiness requires sacrificing more training time for extensive maintenance hours, in essence mortgaging tomorrow’s Marine Corps to sustain current readiness. The Marine Corps’ unfunded Backlog of Maintenance And Repair (BMAR) leveled off at $700 million. While we have finally peaked, we are not achieving the goal of reducing the backlog by FY 10. This situation runs counter to our goal of reducing the backlog to $100 million by FY10. Reversing this trend requires approximately $500 million per year, approximately $125 million per year above current funding levels. Additionally, Marine Corps aviation assets saw a 49% rise in average cost per flight hour during the last three fiscal years. The Marine Corps must keep its “eyes on the prize” of 21st Century warfighting capability and resist the demand to invest limited resources into the maintenance of equipment and weapons systems beyond their designed service life. This will require investing in advanced technology and reducing total cost of ownership of new equipment.

For these reasons, the FY 2000 budget requests increased funding for Navy and Marine Corps readiness and modernization. Over the next six years, the request would provide nearly $4 billion to purchase spare parts, increase equipment and property maintenance, address manning and training concerns, and increase procurement of new Marine Corps equipment. Funding of this request would be an initial step toward reversing the downward trend in readiness and easing the strain on our forces.

Improving Our Business Processes

One area in which substantial savings may be achieved is in making the Department’s support infrastructure — its business side — more efficient. A major challenge for the Department of the Navy is determining how to transform the way it conducts business in order to achieve the efficiencies and effectiveness of the commercial sector.

In late 1997, the Secretary of Defense announced a sweeping program called the Defense Reform Initiative (DRI) to reform the business side of the Department of Defense. Secretary Cohen noted that, “to carry out our defense strategy into the 21st Century with military forces able to meet the challenges of the new era, there is no alternative to achieving fundamental reform in how the Defense Department conducts business.” Following the Secretary’s leadership, the Department of the Navy initiated its Revolution in Business Affairs (RBA) process in early 1998.

U.S. industry gained a competitive advantage over its overseas competitors in the 1980s and 1990s by being faster to market, quicker to change, less constrained by needless regulation, and more innovative in applying technology. In the same manner, the Department’s business vision is to efficiently and effectively design, acquire, and support the world’s premier operational naval forces. Our vision must ensure Department of the Navy business practices mirror the best examples in public and commercial enterprises. By taking advantage of the RBA, the Navy and Marine Corps team will become a more combat-effective and cost-efficient force postured for the 21st Century.

Although the Navy and Marine Corps are the world’s finest naval forces, business processes supporting our forces are not as efficient and effective as the best public and private practices. As noted by Secretary Cohen in his Defense Reform Initiative Report, “DoD has labored under support systems and business practices that are at least a generation out of step with modern corporate America. DoD support systems and practices that were once state-of-the-art are now antiquated compared with the systems and practices in the corporate world, while other systems were developed in their own defense-unique culture and have never corresponded with the best practices of the private sector.”

This is unacceptable, particularly since the demands on our operational forces have increased while our resources have declined. Our people have already taken extraordinary measures to save resources by reducing force structure and infrastructure, including more than 350 initiatives to improve our existing business systems and support to our forces. We are also working closely with the Defense Management Council (DMC), established to serve as the Secretary of Defense’s Board of Directors to oversee the Defense Reform Initiative process. Official tasking is accomplished in Defense Reform Initiative Directives (DRIDs). There are over 45 DRIDs that include initiatives for competitive sourcing, utility privatization and paperless contracting and acquisition.

These initiatives are a key part of the Department of the Navy’s business reform process. For example, DRID 20 is a review of inherently governmental functions, providing an initial step towards increased outsourcing/privatization. DRID 46 directs paperless contracting DoD-wide by January 1, 2000. As per DRID 49, the Services will carry out the privatization of utility systems by January 1, 2003.

In conjunction with DRIDs, the Department of the Navy is charting a new course and making new rules. We are developing a Department of the Navy Strategic Business Plan (SBP) as a first step in organizing and managing how the Department meets its business obligations to the operational naval forces. This document will provide a strategic plan to transform naval business processes and infrastructure to better support the naval forces of the 21st century.

The SBP will outline the Department of the Navy’s overall business strategy and provide a common focus to guide transformational change in naval business affairs. It will also describe a plan for accomplishing Title 10 business responsibilities and serve as a focus and guide to our efforts toward our key strategic goals. Our overarching goal is to foster the continued conceptual, technological, and operational superiority of our naval forces.

Innovative business practices can be implemented at all levels in the Department. We will evaluate our business processes, keeping those that serve us well, and adapting the best practices of commercial or public enterprises to meet our other needs. As our efforts mature and systemic innovations are identified, initiatives will be prioritized and integrated to enhance our use of time and other resources. We want our business systems as agile, fast, and net-centric as our warfighting is now. We must do this to enable recapitalization and modernization of our forces. While there is much to do, progress has already been made. In the fall of 1998, we commenced business reform initiatives in areas of recruiting, retention, training and assignment of personnel; commercial business practices; and housing. Working groups comprising representatives from the Fleets, Navy and Marine Corps Headquarters, and field commands began the change process. The reform initiatives these groups have grappled with are very much in support of the Revolution in Business Affairs articulated in the Department of Defense Reform Initiative. These initiatives will produce change that, although iterative, will fundamentally revolutionize our business processes over the long-term.

Key to achieving business process re-engineering is the Information Technology for the 21st Century (IT-21) initiative. Many of the challenges the Navy and Marine Corps face today are driven by revolutionary changes in technology. In order to meet these challenges and to lead change, the Department of the Navy must invest in both the IT-21 infrastructure and in building connectivity. Only then will the Navy and Marine Corps be able to fully leverage technology to achieve the needed revolution in business processes. Information Technology is the critical enabler for the Department to reap the benefits of process improvement. Building a world-class corporate intranet is the next step in the Navy’s commitment to IT-21. The corporate intranet will do for the Navy business manager ashore what IT-21 is doing for the warfighter afloat. The goal is to connect all commands/units in a common information environment by building the critical infrastructure, organizing data, and achieving process and cultural change. This will enable the sharing of information, eliminate redundancy, achieve near- seamless connectivity between afloat and ashore units, improve quality and pride in the workplace, and ultimately, enable the Department to become a world-class business.

Research and Development

Science and technology are the fuel for naval warfare innovation. This year’s technology demonstrations will identify tomorrow’s options. Today’s R&D programs — focused on affordability and warfighting superiority — are the basis for the technology successes of the future.

Basic Research Programs: The Navy’s basic research programs are the basis for the technology successes of the future. Basic research is much like seed capital. For example, research initiated at the Naval Research Laboratory in the 1960s led to the Global Positioning System, which proved its worth in Desert Storm and is arguably the most important navigation tool since the advent of the sextant and chronometer. Current basic research initiatives include:

• Molecular trapping research at ultra-cold temperatures that could pave the way to a molecule laser for ultra high-precision spectroscopy and chemical sensors. The molecule laser may also allow precision probing of surfaces for better circuit patterns on silicon wafers (chips) and for studying metallic alloys for improved materials to increase weapon system accuracy and reliability. In addition, trapping cold molecules may improve atomic clocks, enhancing the accuracy of the Global Positioning System.

• Autonomous Oceanographic Sampling Network (AOSN) is a sensor network of inexpensive, autonomous underwater vehicles to survey the marine environment and relay real-time data to warfighters. The AOSN oceanographic and bottom-mapping capability has major implications for improved anti-submarine warfare and in-stride mine countermeasures. AOSN also offers mobile underwater communications and versatile sensor payloads.

• Hearing Loss Rescue is a new medical procedure pioneered by Navy doctors that can prevent and restore hearing loss caused by sudden, loud, high-impact noises, or hearing loss suffered over time in noise-hazardous environments. This procedure will reduce lost work time related to hearing degradation and save millions in medical care costs each year.

The Marine Corps is the executive agent for the DoD Non-Lethal Weapons (NLW) program and is participating in seven joint non-lethal weapons efforts to augment the capabilities already fielded. These programs are divided into four categories: (1) personnel protectors (e.g., face and riot shields); (2) personnel “effectors” (e.g. sting grenades, pepper sprays, and incapacitating rounds); (3) mission enhancers (combat optics spotlights and caltrops designed to facilitate target identification and crowd control); and (4) training devices (e.g. training suits, batons, and inert pepper sprays). These basic research programs, delivered throughout the FYDP, demonstrate a clear Service commitment to this program that offers important new capabilities across the spectrum of conflict, particularly in urban environments.

Applied Research and Technology Demonstrations: These demonstrations are of more mature technology that may be fielded within a few years. For example, three systems being installed in the Virginia class attack submarine were developed through applied research: the Light Weight Wide Aperture Array, the High Frequency Chin Array, and an advanced propulsor. Other examples of FY 98 successes include:

• The Joint Countermine demonstration addresses alternatives for combating both mine threats and obstacle barrier systems while operating in the littorals — from shallow water through the surf zone. Efforts continue to improve mine detection, classification, data dissemination, breaching, marking, and clearing capabilities.

• The DNA vaccine demonstration successfully completed the first Federal Drug Administration-approved human trials for malaria and produced the first successful eradication of Stage 1 malaria infection.

• The Reconnaissance, Surveillance, and Targeting Vehicle advanced technology demonstration program is a joint effort between the Marine Corps and the Defense Advanced Research Projects Agency (DARPA) to evaluate light combat land vehicles. It includes design, fabrication, and demonstration of two prototype tactical vehicles capable of being transported inside the MV-22 Osprey tilt-rotor aircraft. The design also incorporates hybrid electric propulsion, integrated survivability, improved mobility, and modular design for mission tailoring.

Affordability is key to recapitalizing force structure. Affordability efforts imbedded in current science and technology programs include:

• Power Electronic Building Blocks (PEBBs). PEBBs may lead the second electronic revolution. This new approach to power-handling promises new efficiencies and phenomenal power densities at reduced costs and production time. A PEBB will replace complex power circuits with a single device containing a multifunction controller. This will reduce design and development costs for complex power circuits and simplify the development and design of large electric power systems. PEBBs incorporate sensor- driven and software-controlled solid state power controllers and high-frequency megawatt power devices. These could be the foundation for a future “all-electric Navy,” and could support multi-platform (submarine, surface ship, aircraft) applications for advanced propulsion systems, sensors, passive armor, and weapons.


• The Advanced Lightweight Influence Sweep System lays the groundwork for a rapid mine clearance capability in shallow water. The system uses new technologies for superconducting magnets and spark-gap acoustic arrays. This program is merging with the Shallow Water Influence Mine Sweep program to develop a highly effective acoustic and magnetic influence sweep capability.

• The Advanced Enclosed Mast/Sensor encloses major antennas and other sensitive equipment to protect them from the weather. This not only reduces maintenance costs but also improves radar performance by eliminating reflections and blockage associated with conventional metallic truss-mast structures. It also will help significantly reduce the ship’s radar cross section.

Shipbuilding Technology

Maritime Technology (MARITECH) is the technology-development element of the President’s five-part plan to revitalize the U.S. shipbuilding industry, and is aimed at improving the design and construction processes of U.S. shipyards to compete in world markets. MARITECH, funded at approximately $40 million per year, was established to run for five years (FY 93 through FY 98) and was initially managed by DARPA. The Navy will take over MARITECH in FY 99, and the renamed MARITECH Advanced Shipbuilding Enterprise (ASE) program will be managed by the Naval Sea Systems Command with representation from the Office of Naval Research and the Maritime Administration. The mission of MARITECH ASE is to manage and focus national shipbuilding research-and-development funding on technologies that establish U.S. international shipbuilding competitiveness — and further reduce the cost of warships and other vessels to the Navy.

Submarine Technology: The Virginia class SSN is designed to meet the demands of the 21st Century. State-of-the-art technologies designed into the Virginia class include enhanced acoustic and non-acoustic stealth, integrated combat systems, fiber-optic periscopes, vertical-launch Tomahawk missiles, and a simplified nuclear propulsion plant with a life-of-the-ship reactor core. The Virginia class design/build process incorporates the latest RBA concepts and includes participation by industry, the shipbuilder, and government. The submarine has built-in design and operational flexibility through the incorporation of modular construction techniques, open systems architecture, and commercial off-the-shelf components to facilitate insertion of rapidly evolving technologies. As new technologies are developed, for example, electric drive and advanced autonomous sensors, they will be incorporated into successive Virginia class SSNs to improve capability and reduce total ownership cost. Increased capabilities funded for the first four hulls include organic mine reconnaissance, stealthy weapons launch, and greater target detection capabilities in littoral environments.

Aircraft Carrier Technology: The transition to CVNX, the next-generation aircraft carrier class, will begin with CVN-77, which will have a new integrated combat system with multifunction sensor arrays and additional technologies. CVNX-1 and later carriers will have increasingly sophisticated technologies for improved capability and reduced life- cycle costs, particularly in the area of manpower. CVNX-1 will have a new nuclear propulsion plant, an advanced electrical power distribution system, and an electromagnetic aircraft launching system. This will provide immediate life cycle cost reductions and warfighting improvements, as well as enabling follow-on technologies for subsequent CVNX-class carriers. (Both CVN-77 and CVNX-1 will be based on the existing Nimitz hull form.) CVNX-2 is planned to have an improved hull, improved crew habitability, survivability enhancements, an electromagnetic aircraft recovery system, new functional arrangements, distributed systems, and enhanced automation to further reduce manning and life-cycle costs.

Surface Ship Technology: The Navy’s 21st Century Land Attack Destroyer, DD-21, is being designed from the keel up to provide support for forces ashore. “Leap-ahead” capabilities targeted for DD-21 include advanced major caliber guns, precision weapons, signature reduction, seamless Joint interoperability, enhanced survivability, and reduced manning. DD-21 will incorporate an open system architecture and modular design, such that newer subsystems can be incorporated as they mature. The Navy expects a significant fuel savings compared to the Arleigh Burke class through advanced engineering propulsion systems which may include integrated power systems, fully integrated electric propulsion systems, fuel-efficient propulsors, and new hull designs. Finally, the Navy has established a 95-person manning objective for DD-21, which is a 70% reduction from Burke destroyers. Where possible, the DD-21 program will leverage technologies from the Defense Advanced Research Projects Agency, the Smart Ship Program, and North Atlantic Treaty Organization (NATO) programs on reduced-crew-size concepts.

Network Technology

The Department of the Navy’s Science and Technology investment strategy is addressing the top technology concern of the warfighting commanders: battlespace connectivity. This critical issue addresses the need to standardize data sharing and usage, network management, common formats, information management, and transmission protocols. Specific technology challenges that need to be addressed are:


Year 2000 (Y2K): The Department places a high priority on addressing the Y2K problem. Efforts are ongoing to ensure Y2K-vulnerable systems are evaluated, tested, and necessary modifications implemented before January 1, 2000. As these remediation efforts are completed, the Navy and Marine Corps have undertaken a comprehensive series of operational evaluations to ensure that interrelated systems work together in an operational environment. As an added measure of assurance, contingency plans are being formulated. These efforts will ensure that combat readiness is maintained as the Department of the Navy transitions seamlessly into the next millennium.

Acquisition Excellence

Building on the Federal Acquisition Streamlining Act, the Clinger-Cohen Act, and elements of the RBA, we are aggressively seeking to field technologically superior warfighting systems. These keystone programs crucial to the effectiveness of tomorrow’s naval forces must be affordable in the numbers required. As an example, the Navy is pursuing a multi-year procurement approach to the F/A-18E/F, which will enable the purchase of 222 aircraft for the price of 200 during the next six years. The Marine Corps seeks efficiencies by pursuing the most economic buy rate for its MV-22 program. We seek comparable opportunities for savings in acquisition and life-cycle support in all Navy and Marine Corps procurements.

Acquisition Center of Excellence: The Department of the Navy opened its Acquisition Center of Excellence (ACE) in early 1998, demonstrating a firm commitment to address the fundamental changes needed to achieve the “faster, better, cheaper” objective. The ACE was the site for the first-ever acquisition war game, which was focused on 21st Century aircraft carrier acquisition strategies. The ACE will be the principal test bed and development site for simulation-based acquisition efforts that are expected to revolutionize design and procurement of major systems.

Marine Corps Materiel Command (MARCORMATCOM): The Marine Corps needed a single-process owner for materiel life cycle management of its ground equipment, information systems, and ground weapons systems. The Marine Corps Materiel Command stood up on 1 September 1998 at Marine Corps Logistics Base, Albany, Georgia, and will be fully operational by 30 September 1999. MARCORMATCOM will consist of a headquarters element and two major subordinate commands, Marine Corps Systems Command (MARCORSYSCOM) and Marine Corps Logistics Bases (MARCORLOGBASES). Some materiel life cycle management functions of the Deputy Chief of Staff for Installations and Logistics (DC/S) will be transferred to MARCORMATCOM. MARCORMATCOM’s top-level objectives are to reduce acquisition and logistics’ response time, improve readiness and reduce total ownership costs. The Commander of MATCOM will be the single life-cycle manager responsible for the focused logistics concept articulated in Joint Vision 2010 for Marine Corps ground equipment, information systems, and ground weapons systems.

Acquisition Reform Success Stories: The broad success of the Department’s aggressive approach is reflected in four examples highlighted here:

• The Standards Improvement program resulted in significantly fewer military standard specifications in acquisition contracts. It gives contractors greater flexibility and improves communication and cooperation between program managers and industry. Thus far, this has resulted in significantly reduced costs throughout individual programs. As an example, the Marine Corps’s Medium Tactical Vehicle Re-manufacture Program streamlined the test and evaluation process and applied the principles of specification reform to reduce military specifications from 24 to 7. The result was a program savings of more than $500K.

• The F/A-18E/F Super Hornet aircraft acquisition program is within budget and on schedule, and has met or exceeded all key performance parameters. Per plane costs are 12% below the congressional unit cost cap, and during operational test IIA, it received the best possible rating for operational effectiveness and suitability. By the beginning of this year, the F/A-18E/F logged over 2,700 flights and 4,000 flight hours in developmental testing. It begins Operational Evaluation (OPEVAL) in May 1999.

• The Advanced Amphibious Assault Vehicle (AAAV) program combined the best of industry and government management practices to create a single, highly effective management team, and applied innovative acquisition techniques including Integrated Process and Product Development (IPPD), Simulation-Based Acquisition (SBA), and Cost-As-An-Independent-Variable (CAIV). This implementation of IPPD teams is unique in that the program office, the prime contractor, and major subcontractors are co- located at the AAAV Technology Center. Acquisition reform and the use of state-of-the- art business practices has resulted in reducing acquisition cycle time, the elimination of unnecessary maintenance actions, and the participation of Marines in every design decision.

In addition, cost savings of approximately $225 million will be realized in production, operations, and support while maintaining core mission capability and improving system performance.

• The San Antonio class Amphibious Assault Ship (LPD-17) program was initiated under the traditional rules of shipbuilding design and development, with the Navy performing the ship’s preliminary and contract design. When the acquisition process was modified to focus on total life cycle cost reduction, the Navy elected to re-align the program and embrace the ideals of acquisition reform. The program is now operating in an Integrated Product and Process Development environment and the Program Office has co-located with the contractor.

• The Virginia class submarine was the first major defense acquisition program to apply Integrated Process and Product Development methods to complex warship system development. The program reduced unique parts from 98,000 to 12,000 and implemented many environmental-protection design considerations. The sharing of test assets alone will avoid more than $4.5 million in operational evaluation testing costs.

International Acquisition Programs: The Department uses programs such as Foreign Military Sales (FMS), leases, grants, cooperative development, technology transfer, and training and education to achieve program efficiencies, assist allies, and develop coalition partners. Early in the acquisition process, we work to identify cooperative research and development programs to help reduce each country’s production costs for major systems. International programs also facilitate standardization and interoperability. Examples include:

• The Joint Strike Fighter program will develop and field a family of next-generation strike aircraft with an emphasis on affordability and warfighting capabilities for the 21st-Century combat environment. The joint-service approach to development of this aircraft will pool resources and provide opportunities for savings. Allied participation in the concept-demonstration phase will provide additional economies of scale.

• The NATO Sea Sparrow program, now amounting to more than 180 ship installations, is the largest and longest-running NATO cooperative program to date. Ten countries now participate in a collaborative development program called the Evolved Sea Sparrow Missile (ESSM). Through allied cooperation, the United States saved $153 million in development costs for ESSM, which starts testing in 1999.

• The Rolling Airframe Missile (RAM) is another NATO program developed by the U.S. and Germany. RAM is a lightweight, low-cost, fire-and-forget missile system installed in more than 50 U.S. and German ships. An upgrade to the RAM missile completes operational testing and enters production in 1999.

• The Improved Submarine-Launched Mobile Mine (ISLMM) is an international mine warfare project between the U.S. and the Royal Australian Navies. Development of the ISLMM will provide the covert capability to establish distant offensive and defensive undersea minefields.

National Partnership for Re-inventing (NPR) Government

In January 1997, the President issued a challenge to the Executive gencies and Departments to implement the Government Performance and Results Act (GPRA). The vision of National Partnership for Reinventing Government is to create a government that works better and costs less based on the four principles of: 1) putting customers first; 2) cutting red tape; 3) empowering employees; and 4) getting back to the basics. In July 1997, the Vice President approved 12 three-year acquisition goals for the Department of Defense. These goals address the acquisition system, program management, financial management, logistics, and property management. The Department of the Navy has already achieved four of these goals by the end of FY 98:


In addition, the Department of the Navy achieved its 1998 annual targets in support of Year 2000 goals:


Significant progress also was made in implementing other Year 2000 goals, including training the acquisition-related workforce, increasing the procurement budget, reducing paper transactions, and implementing Activity-Based Costing (ABC) for weapons systems.

Streamlining Infrastructure

Base Realignment and Closure (BRAC): As a result of the four rounds of BRAC reviews, the Department of the Navy ultimately will close or realign 178 Navy and Marine Corps bases. These closures will bring the size of the Department’s shore infrastructure more in line with its operating force structure. The Department’s investment in BRAC will result in a $5.6 billion reduction in the Navy’s operating budget through the year 2001 and $2.6 billion per year thereafter. The Navy’s strategy has been to reach operational closure quickly, then complete cleanup and dispose of the property in support of local redevelopment efforts. In 1999, 11 additional closures will be added to the 162 closures or realignments already completed.

Of the 178 BRAC-related actions, 135 are closures, but only 91 require disposal of property. To date, 38 disposals have been completed, representing more than 40% of the closure sites. By the end of FY 99, 67% of the disposals will be completed. At the end of the base closure program, the Navy will have reduced its property inventory by approximately 163,000 acres. The Navy has executed 100 leases at closing bases prior to disposal of the property to assist local redevelopment efforts. Also, the Department of the Navy is pursuing several opportunities for early conveyance of base closure property which, by statute, permits BRAC property to be conveyed before the cleanup remedy is completed.

After $400 million in construction, MCAS Tustin and MCAS EL Toro will finish the relocation of units to the newly designated MCAS Miramar and other air stations by July of this year. The relocation of Marine Corps assets to Miramar from El Toro, although a single BRAC action, represent 10% of the construction budget for all BRAC rounds. Disposal of the air stations at Tustin and El Toro is dependent upon reuse decisions involving the local communities. These have been slower than anticipated, thus delaying the realization of savings as we continue to maintain this infrastructure in a caretaker status. Timely and equitable resolution of these types of reuse issues remain a high priority within the Department.

In spite of these accomplishments, reductions in the Navy’s infrastructure did not keep pace with reductions in force structure. While the number of ships and Sailors were reduced by 40% and 30% respectively since 1988, the Navy’s infrastructure decreased by only 17%. Additional BRAC rounds are critical to support the Secretary of Defense’s Quadrennial Defense Review strategy and to achieve the objectives of the Joint Staff’s Joint Vision 2010.

Real Property Maintenance: Ships, aircraft, and weapon systems are kept ready through planned maintenance and modernization programs. The Navy’s piers, runways, buildings, structures, and utilities are equally important assets that must be given a similar level of commitment, concern, and fiscal support. The Department’s focus on real property maintenance must be increased to ensure that facilities can support the fleet and the growth in the critical backlog of maintenance and repair can be reversed. The Navy’s critical backlog of maintenance and repair (BMAR) is currently $2.4 billion and expected to exceed $2.9 billion by FY 2003. Of particular concern are aging piers and runways, which require substantial attention in the near-term. In addition to its operational facilities, the Department of the Navy is also concerned with improving support facilities affecting the quality of life of Marines and Sailors. The Marine Corps is making a significant investment in repairs of barracks between now and 2004 in order to have all barracks in good physical condition. The Marine Corps is also taking aggressive stance in demolishing excess facilities to help reduce operating costs. These initiatives must be part of a long-term funding effort to recapitalize Navy’s infrastructure and meet the needs of tomorrow’s more sophisticated and complex ships, submarines, and aircraft.

Naval Infrastructure Cost Reduction Initiative: The Navy has developed an infrastructure reduction business plan that pursues innovative approaches to reduce infrastructure costs and will provide savings that can be allocated to critical modernization and recapitalization needs. These initiatives include implementing the Office of Management and Budget Circular A-76, business process re-engineering, and activity-based costing. Regionalization reduces Base Operating Support costs, streamlines administration, and eliminates redundant functions. Regionalization also intends to improve use of the work force, to develop more efficient organizations, to produce opportunities for regional public/private competitions, standardize processes, and facilitate interoperability and regional planning. As regional installation management organizations are created, Base Operating Support resources and responsibilities will transfer to a single major claimant, which will permit other claimants to concentrate on their primary missions.

The Marine Corps’ primary challenge for infrastructure reduction is the elimination of outdated, inefficient, and deteriorated structures. We are aggressively identifying and demolishing any facilities where installations cannot identify hard requirements. This allows the Marine Corps to concentrate scarce maintenance and repair dollars on maintaining higher value facilities. As excess plants are identified, they will be destroyed. The current 1999 plan is to eliminate 600,000 square feet of unused infrastructure which will amount to 0.5% of total Marine Corps inventory.

Civilian Human Resources Regionalization and Systems Modernization: The Department of the Navy is streamlining the civilian human resources (HR) function to meet the objectives of the National Partnership for Re-inventing (NPR) Government and Department of Defense mandates for regionalization and information systems modernization. Approximately 60% of the Department HR functions are being realigned to eight Human Resources Service Centers. Regionalization and systems modernization are expected to return $148 million for reallocation between FY 97-03. After FY 03, savings are projected to exceed $40 million dollars per year.

Smart Base: The Navy’s Smart Base Project Office solicits industry, academia, and government agencies for innovative, state-of-the-market technologies and business practices to boost shore installation efficiency. Two key enablers are the Smart Link and Smart Card. Smart Link established a state-of-the-market, wide-area network of major Navy installations. Planned to provide connectivity to 300 sites at completion, Smart Link in early 1999 provides voice, video, and data to more than 80 sites on the Navy’s Intranet, at significant savings. Starting at the Great Lakes Recruit Training Center, the Smart Card is a computer-chip card issued to each recruit to facilitate laborious administrative processes. Significant cost is already being saved, with a clear potential for additional savings as more applications are introduced. In FY 99, the Smart Base Project will partner with fleet commanders, major claimants, and regional commanders to test new cost-saving projects and begin implementation of the resulting initiatives.

Regionalization: The Navy’s restructuring efforts use state-of-the-market business practices and technologies for installation management. Navy installations within a region will no longer be operated as independent entities, but as an integrated organization using the best business practices. As functional management is consolidated and redundant overhead eliminated, additional opportunities for demolition, outlease, or alternative use of underutilized facilities will become apparent. The creation of Navy Regional Commanders allows the Navy to take advantage of these opportunities quickly.

The Environment

The Department continues its active program for environmental compliance and stewardship. Most importantly, the Navy is focused on achieving substantial progress in shipboard pollution control. The Department of the Navy and the Environmental Protection Agency (EPA) published the first set of regulations to establish uniform national discharge standards for warships and other vessels. This initiative is being developed in partnership with EPA, the Coast Guard, and the National Oceanic and Atmospheric Administration, in consultation with coastal states.

Plastic waste processors, designed to eliminate the disposal of plastic trash at sea, will be installed as required by the Act to Prevent Pollution from Ships. Procurement and installation of other required solid waste processing equipment for ships are also on track. Also, approximately 500 shipboard air-conditioning and refrigeration plants were converted from chlorofluorocarbon-12 (CFC-12) to non-CFC plants. The first CFC-114 air-conditioning plant conversion is underway in Normandy (CG-60).

Ashore, the Department’s active Pollution Prevention Program assists installations to meet environmental requirements. Pollution prevention technologies also improve occupational safety, increase productivity, and reduce operations and maintenance costs. Pollution prevention measures helped reduce toxic releases by 51% from the 1994 baseline.

The Department’s environmental team is effectively carrying out the President’s five- point program for base reutilization. The Department has confirmed that more than 70% of the property at closing bases is environmentally suitable for transfer, with community reuse plans fully considered in cleanup decisions.

The Department has aggressively searched our installations for potentially contaminated land sites and identified nearly 4500 sites. Since 1996, over 1100 sites had necessary actions taken bringing the total sites completed to 2175, or 48%. By the end of 2001, action will be complete at 64% of the sites at active bases and 90% of the sites at closed bases. Since 1996, the Department was able to reduce the cleanup program cost-to- complete estimate by more than $1 billion using new cleanup technologies, better site characterizations, and more realistic risk assessments.

Likewise, the Marine Corps takes its environmental responsibilities seriously. It has instituted the Pollution prevention Approach to Compliance Efforts (PACE) program, which requires installations to evaluate their environmental compliance on a continuing basis. In fact, during 1998, the Marine Corps paid more for environmental compliance than it did for formal schools training. For example, MCAS Beaufort instituted a demodexing/modexing process using vinyl film rather than paint for aircraft lettering and markings. This process reduced aircraft downtime by an average of one day, reduced hazardous waste generation by 90%, and saved $35,000 in labor and materials per year. Innovations such as these will continue to ensure that the Department is a leader in integrating environmental stewardship in business affairs.

The Department continues to pursue research and development on technologies to meet environmental requirements most efficiently. This research has recently focused on marine mammal protection, contaminated site cleanup, hull paints/coatings, and facilitating full integration of life-cycle environmental protection into the design, engineering, and acquisition of weapons systems. Indeed, environmental planning is now an essential ingredient of acquisition efforts. Environmental considerations are weighed when acquiring weapon systems and platforms and are carefully monitored throughout each program’s life cycle. We are finding substantial opportunities for good business decisions and cost savings by this practice.

Several specific goals of the National Performance Review have strong environmental components. The Department is pursuing specific goals for a 20% reduction in toxic emissions releases and electronic replacement of paper-intensive procedures. These serve both the environment and help to reduce the costs of doing business.

Return to the Contents Page