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Admiral Daly, thank you for that leadership and your beloved service in the Navy.
It’s been a wonderful time here in San Diego so far and I appreciate the welcome you’ve given me and my entire team.
Let me thank AFCEA and the U.S. Naval Institute for inviting me to address this audience today. It is an honor.
I am very familiar with the work you do and I assure you the Department of the Navy and the nation rely upon the experience and acumen that are present in this room.
As both a former Navy officer and a former small business owner, I know better than most the importance of these gatherings.
WEST 2023 is a unique opportunity to bring operators together with makers and designers—we all share a common goal of delivering warfighting advantage to the deployed fleet.
And I must say I love the theme of WEST 2023—“Readiness, Capability and Capacity: How Do the Sea Services Match Up Against the Future Threat?”
This is the question that myself and the CNO, ADM Mike Gilday, who I have had the tremendous honor of working alongside with.
That is the question that I ask myself every single day, and that keeps me going… Because there can only be one answer to that question.
We must meet the Challenge! We must be Ready, we must be capable, and we will need to grow our Navy with greater lethality to meet the threat.
Now, I know the budget is on many people’s minds, so I’ll say just a bit on that; and then what I’d really like to spend time on is the progress we’ve made over the past year and a half on a number of fronts that should be of interest to this audience. And finally, I will want to hear from you and answer your questions.
Strategic Guidance, Budget, and Initiatives
On the topic of the budget, I will tell you that I believe everyone in Congress understands we need a fleet ready to fight at any moment—a quick look at recent headlines is enough to convince even the most skeptical that we need to be prepared today to meet potential threats today or tomorrow.
The budget is set to be released March 9, and I look forward to discussing it in detail then.
But what I can do today is give you a brief overview of some of my top priorities looking ahead into FY24…
Under my first enduring priority, Strengthening Maritime Dominance:
Our top priority continues to be getting the nation’s new sea-based strategic deterrent, the Columbia class of ballistic missile submarines built on time and on schedule.
Expanding the industrial base (public/private) to increase our capacity to build and repair ships, as well as developing the industrial workforce needed to support a growing Navy. And we know that has been a challenge these past few years and hopefully as we come out of COVID that will get better.
Divestment of some outdated systems which are no longer viable in the high-end fight, including LSDs and some CGs.
And finally, increasing our focus on Cyber—from a readiness/posture standpoint and as a warfare designator.
My second priority continues to be to build a culture of warfighting excellence, where everyone treats each other with dignity and respect.
At the top of my list of budget priorities are:
Professional Military Education;
Force Resiliency and mental health, including suicide prevention;
Recruiting and talent management—both military and civilian. And let me say we have been really after this at improving the Quality of Life of our Sailors and Marines and
Diversity, Inclusion and Equity programs.
And my third enduring priority is enhancing our strategic partnerships. Key in this area are:
Our relationships with Small, medium, and Large businesses;
Industry accountability and;
Growing our partnership with allies worldwide but particularly in the Pacific.
I’ll discuss some of these in more detail shortly—but I wanted to state right up front what I know is of great interest to many of you.
The members of this audience know all too well the importance of getting the budget right—the security of our nation depends on it.
The budget is a reflection of our core values.
The three enduring priorities I just mentioned, and which I established early in my tenure, aim to empower the U.S. Navy-Marine Corps team to do its part in Secretary Austin’s vision of integrated deterrence.
As you know, we are being challenged both economically and military.
In the past two decades, the People’s Republic of China has more than quadrupled its export trade and used its growing wealth and economic power to rapidly expand and modernize its military and its navy.
Today they have approximately 340 ships, and are moving towards a fleet of 440 ships by 2030.
The PRC’s apparent disregard for the sovereignty of our air space has made headlines over the past few days and weeks; but its disregard for the rules-based international order over the past decade or more is particularly troubling in the maritime domain, from the Taiwan Straits to the high seas.
The PLA Navy is conducting active, aggressive maritime activities in the South China Sea that have the potential to undermine our system of international law, including the freedom of the sea, a foundational U.S. interest.
Our maritime challenges, however, are not confined to just the Indo-Pacific.
Moscow’s invasion of Ukraine is bringing certain principles of modern warfare to light—one of these is that we need to improve our ability to go from peacetime levels of industrial output to wartime levels. And I know so many of you are engaged in that endeavor so we can get after it faster.
And Russia’s aggressive behavior does not stop in Ukraine. It also seeks to dominate large swaths of the Black, Baltic, and Arctic Seas. It wants to intimidate any country that seeks to exercise its right to free passage.
The U.S. Navy-Marine Corps team is meeting these threats every day and in every domain. On the seas, under the seas, in the air, and in cyberspace. I could not be more prouder of our Navy and Marine Corps team.
To defend freedom of the sea, we must ensure our Sailors and Marines have the capability and forward presence to stand by our allies and our partners.
That is why I have directed our Navy and Marine Corps to prioritize our investment and readiness efforts, to make sure our ships and aircraft are always prepared to deploy and deter our adversaries.
Strengthening Maritime Dominance requires us to rapidly field the concepts and capabilities that create advantage relative to our pacing threat, with the sustainment necessary to generate integrated, all-domain naval power as reflected in the CNO’s Navigation Plan and the CMC’s Force Design 2030.
We are making those investments now, guided by the Navy Navigation Plan and Marine Corps Force Design 2030, to ensure we remain the most lethal, capable, and globally postured force on this planet for decades to come.
We are making these investments—and though it is still early, and though we face significant challenges, we are seeing some important wins.
Let me share just a few.
Last June, our shipbuilders laid the keel for the USS District of Columbia, the first of a new class of nuclear-powered ballistic missile submarines that will underwrite the nation’s nuclear deterrent out to the year 2080.
The second Columbia-class ship, USS Wisconsin, has begun pre-construction activities.
In July, we commissioned USS Fort Lauderdale, an amphibious warship that will help modernize our amphibious fleet and extend the reach of our Marines to fight from the sea wherever there is a need.
I am also confident that once we complete this year’s Battle Force Ship Assessment and Requirement, we will also see a continuing need to build more LPD-like ships well into the future.
What’s more, the most recent deployment of the USS Tripoli demonstrated the strategic and operational advantage that amphibious ships continue to have.
In early 2022, USS Tripoli set sail as an independent deployment in part to test our F-35B “Lightning Carrier / Assault Carrier” concept.
During Tripoli’s time in the Indo-Pacific, embarked Marines and Sailors trained with and supported the USS Abraham Lincoln and USS Ronald Reagan, among other traditional surface combatants.
We also began construction on Constellation, a new generation of frigates. With vertical launch strike and tomahawk missile capability to provide a lethal punch, these frigates are essentially smaller DDGs. I am very proud of this program and track it very closely to ensure it stays on time and budget.
I am especially proud of the progress we’ve made on the USS Gerald R. Ford, the first new carrier to be deployed in almost 50 years. And I can assure you all, we are taking the lessons learned from the Ford as we build the future USS John F. Kennedy, USS Enterprise, and USS Doris Miller.
Our carriers are not only vital to deterrence, they are also the cornerstone of our vital interoperability with our allies. These carriers allow both our warplanes and those of our allies to “deck hop,” something unthinkable even fifteen years ago.
This “deck hopping” presents a nightmare for any adversary to plan against.
Our carriers are, of course, an asset to our air dominance, but they are far from the only one.
Our most advanced fighter aircraft, the F-35 Lightning II, now brings fifth-generation stealth, and multi-role, multi-mission reach and power wherever we need to fight. They provide long-range lethality.
Yet we are still making the most of another, older, yet still incredibly lethal aircraft—the F/A-18E/F Super Hornet will be the numerically predominant aircraft in the carrier air wing into the 2030s.
Service life modification initiatives and capability upgrades enhance our inventory by maintaining the tactical relevance of the F/A-18 E/F and minimize the Navy’s strike fighter shortfall.
In order to increase service life modification throughput the Navy directs the efforts at three locations: St. Louis, San Antonio, and a recently established Public-Private Partnership with FRC Southwest, right here in San Diego.
We are working with industry to ensure trained mechanics are prepared to support induction schedules, and that they are bringing electrical and avionics experts onboard to support Block III transition efforts. To date the Navy/Boeing team has delivered 34 aircraft with 17 more in the pipeline.
Marine aviation continues to build capability and capacity in the image of the future force.
Recently, we stood up Marine Aerial Refueler Transport Squadron 153 in Kaneohe Bay, Hawaii, significantly increasing the reach and sustainment capabilities of Marines in the Pacific theater exactly where we need them.
The fifteen KC-130J aircraft that VMGR-153 will have by 2026 build on the organic mobility available to Marines during training, in response to crisis, or in conflict.
We are approaching one year since the CH-53K program became operational, and are well underway transitioning Marine Heavy Helicopter Squadron 461 into our first fully operational CH-53K squadron.
Despite their ongoing transition, HMH-461 is already making waves – conducting heavy lift assault support missions previously impossible with legacy aircraft.
In parallel, the operational test and evaluation squadron (VMX-1) continues to push the boundaries of heavy lift operations.
Just last month, they successfully lifted a U.S. Navy F-35C, demonstrating the platform’s utility in conducting next-generation Tactical Recovery of Aircraft and Personnel missions.
It’s impressive how the Marine Corps is testing new concepts across the spectrum of warfare and capabilities.
We are also making great progress on the unmanned aircraft front. Early in my tenure, we established a new, first-of-its-kind task force in the Middle East at our naval base in Bahrain, called Task Force 59.
Task Force 59 is rapidly integrating unmanned systems and artificial intelligence into maritime operations in the Fifth Fleet AOR, and we will soon expand that capability to other regions of the world.
Another area of improvement is public shipyard performance: our significant investment in the Shipyard Infrastructure Optimization Program, known as SIOP, is modernizing our four aging public shipyards by optimizing facilities and infrastructure as well as increasing dry dock capacity and capability.
I am so incredibly proud of the CNO and team for coming up with “Get Real, Get Better”.
We are also looking at establishing a parallel high-end technical track in nuclear welding, robotics, hull technology, software and electronics integration, and additive manufacturing for high-paying blue collar career paths.
As you can see, we’ve been busy—and we’re only going to get busier. But our accomplishments, our successes, are not ours alone.
We share them with a section of American society that is absolutely essential to our national security:
You, the industry representatives in this room, and all your coworkers hard at work right now, whether in the office, the production line, the shipyard, or right here in the Exhibit Hall…
As I stated, enhancing strategic partnerships is one of my three priorities as Secretary of the Navy.
And you, our industry leaders, make up a huge portion of those strategic partnerships.
Since I’ve taken office, I’ve met with many of you one-on-one, or in small groups— but if you’ve heard a rumor that I want to meet with every company that contracts with the Navy, let me address that scuttlebutt right now. It’s 100% true.
And I realize that with almost 780 exhibitors present at WEST 2023 alone, that means I’m going to be pretty busy. But I will find the time—because the Sailors and the Marines I work for depend on you to accomplish their mission.
As mentioned previously, until pretty recently, I was, myself, the CEO of a business that dealt mainly with the Department of Defense. So I know a bit about the challenges you face, for example, what it’s like to work with an organization that has just a bit of red tape from time to time.
And I have a particular interest in finding ways to make it easier for the Department to contract with small businesses.
That’s why I am very pleased to say that despite the delays the Continuing Resolution caused in getting off to a running start on 1 October, the Department of Navy is on track to not only achieve its assigned small business goals but exceed them.
And this, after we increased targets in FY23 for small business primes—after meeting most of our increased targets in FY22.
Just this week MSC delivered with $26.6M in funding actions on a full and open competition definitive contract to Patriot Contract Services for the operation and maintenance of eight government-owned large, medium-speed, roll-on, roll-off vessels.
Some of you may already have heard this earlier from Assistant Secretary of the Navy for RD&A Jay Stefany, but it bears repeating here: I have charged him and his office with three initiatives, which I believe are of interest to many in this room.
The first is the Taxpayer Advocacy Project. And it’s just what it sounds like—we want to ensure that the American people are getting what they paid for. This increased scrutiny applies to both sides—it’s about accountability and fidelity for everyone involved, so I think it’s really a win-win and something businesses should be looking forward to.
The second is contracting reform—this project involves us becoming better at contracting—faster, more effective, more efficient. I think we all agree that that would be a welcome development.
And the third is continued engagement with small businesses. I already mentioned that we’ve notched our targets up a few times already; we are also going to look very carefully at sub-contracting plans to ensure targets are being met and meaningful work is being provided.
In closing, I hope I’ve given you some food for thought today.
If you take away anything from my talk, I hope it is that despite many challenges, the Department of the Navy has made real headway and is we are well on our way to even more progress in the months and years to come.
The other take-away is that our partnership with industry has never been more important—our nation, and indeed, the world, depend on us working together so that our security, our way of life, our future, are assured.
We are on this critical mission together. We must support each other.
We must Get Real, Get Better together: that means getting to the bottom of whatever is slowing us down, whatever is keeping us from making the most of our resources, whatever is getting in the way of our Sailors and Marines doing their jobs—protecting us.
We must keep working hard to strengthen these partnerships.
We must communicate and connect on a personal level—because that is how trust and teamwork are fostered.
I look forward to doing exactly that when I walk the exhibit hall in a few moments.
But first, I am eager to answer your questions – at least the easy ones.
Carlos Del Toro
17 February 2023
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