Good morning, everyone!  Thank you very much, Chairman Reed, for that introduction.

Senator Whitehouse, industry leaders, distinguished guests, it is my great pleasure to speak to all of you today, and I’m delighted to return to this conference once again—my third time as Secretary of the Navy.

Let me say that again. This is the third time I have spoken here at SENEDIA as Secretary of the Navy.

Yes. THREE years. In a row.

By now, half of you are thinking: Ok, Secretary Del Toro, we can count to three, we get it, so what?

Well, you’d have to go back seven acting or appointed Secretaries of the Navy, back to Secretary Mabus, before you’d find someone who could say they’d been in office long enough to go to any conference three years in a row.

Can we just pause for a moment and think about what that kind of turnover at the very top of an organization responsible for the security not only of our nation but of much of the planet’s maritime commerce—an organization of nearly one million dedicated Sailors, Marines and Civilians—what that kind of instability does to an organization?

President Kennedy famously said: “When we got into office, the thing that surprised me most was to find that things were just as bad as we’d been saying they were.”

Well, I was astounded at the state of the Department of the Navy when I first came into office.  Astounded and dismayed—and all the more determined to turn the ship around.

And let me tell you, we are doing exactly that.  And today I’m going to tell you how.

But first, a few words about this conference.

When I was a commanding officer managing the complex industrial operations associated with completing construction of a nearly $1B warship, I relied on the expertise of industrial base leaders and supervisors of shipbuilding to make sure we got the job done correctly.

As CEO of my own company, I leveraged the expertise of business advisors from across the ecosystem to negotiate business deals with some of the largest companies in the world.

And today, as Secretary of the Navy, one of my top priorities is enhancing the Department of the Navy’s partnerships with you—our Defense Industrial Base.

That’s because our nation expects us to be ready with the necessary capabilities and capacity to prevail now and in the future.  We cannot do that without a tremendous and continuous push to innovate.

Ensuring the readiness and modernization our Sailors and Marines need to succeed in their mission is fundamental to all that we, in this room, do, whether we work for the private sector or the public.

What we do here together at this conference—the connections we make, the relationships we build—is truly critical to our nation’s success, today and tomorrow.

Working to ensure the security and prosperity of our nation is a team effort, and I truly believe that we are collectively up to the task.

That being said, we do face formidable challenges. Our competitors have invested huge amounts into building up their capabilities. We must keep pace.

So now, I want to tell you how we in the Department are working to do just that. I want to give you a few highlights of the progress we’ve made on a number of key modernization initiatives, as well as the way forward.

And as I give you the numbers, the facts, I hope you keep in mind just where we were in August of 2021.

I’ll start with shipbuilding.

In partnership with Congress and industry, we are more efficiently and affordably procuring ships by leveraging the advantages of block buys.

In this manner, we will provide our industry partners with predictable ship and submarine build schedules so that we can achieve on-time, on-budget deliveries. 

Just a few weeks ago we awarded nine additional DDG 51’s as part of the FY 2023-2027 multi-year procurement contract.

We have an additional 86 ships under contract and 54 in construction, including our highest modernization priority, the first COLUMBIA-class SSBN, the most survivable leg of our nation’s nuclear triad.

The submarine industrial base faces an increase in demand as the Navy ramps up production of the COLUMBIA Class while continuing to procure two VIRGINIA Class submarines per year.

Congress has partnered with us, adding investments in the submarine industrial base and for that we are grateful.

These authorities and investments have led to key benefits, including improved workforce hiring at our submarine shipbuilders and the establishment of dedicated training centers and pipelines.

This has resulted in over 3,500 people trained since 2020, and approximately 1,000 new workforce personnel in about 120 small/medium industry partners.

I’m committed to expanding our submarine industrial base, and the recent trilateral security pact between Australia, the United Kingdom, and the United States—better known as AUKUS—is a historic opportunity to do so with our some of our closest allies.

Here again, the Congress has shown great partnership and commitment by introducing several bills providing the authorities and relief needed to rapidly achieve the aggressive goal of delivering a sovereign conventionally armed nuclear-powered attack submarine to Australia.

And I think the Marines would agree that AUKUS is already putting partnership into action: just last month we held Talisman Sabre 2023. The 31st MEU participated in landings with Australia, the UK, and a dozen other partner nations.

And while we’re talking of Marines, a quick update on amphibious transports: USS Fort Lauderdale (LPD-28) brought new capabilities to the Navy and Marine Corps team this year.  The LPD-28 represents the next generation of amphibious warships.  Over the last several months, the crew of USS Fort Lauderdale and Marines from Camp Lejeune have planned for crises response missions and executed ship-to-shore training to ensure our naval forces remain ready to respond.

Closely related to shipbuilding, and equally important, is ship maintenance.  Here, as well, a few key initiatives are making a tangible difference.

Most notably, we are realizing significant reductions in days of maintenance delay across ship platforms, through targeted improvement efforts and the use of data analytics.

From FY19 through FY22, surface ships saw a 42% reduction in days of maintenance delay, submarines in public yard availabilities improved 29%.

All platforms saw a reduction in days of maintenance delay from FY21 to FY22 with days of maintenance delay fully eliminated for aircraft carriers in FY22. 

We are trending in the right direction, but we still need to do better. I remain committed to working with all of you to drive maintenance delays down to the only acceptable number: zero.  

The investments we are making in the Shipyard Infrastructure Optimization Program, or SIOP, will help us get there.

At Pearl Harbor Naval Shipyard, I saw first-hand how our investments are modernizing our naval shipyards for optimal performance. We awarded $2.8B for PHSYD Dry Dock 3 replacement just last March and we will break ground later this month.

And the SIOP program is moving ahead across all four of our public shipyards. We recently completed a new basin at Portsmouth Naval Shipyard and are subdividing that basin into two modern dry docks.

In the Pacific Northwest, the design for the new multi-purpose dry dock at Puget Naval Shipyard is well underway.

It is critical that we further increase and distribute our ship repair capacity in the Pacific and we are studying options to do so.

Beyond our own shipyards, we are investing in our industry partners, including $400 million targeted at shipbuilder infrastructure, supplier and workforce development, technology advancements, and strategic sourcing.

Another area in which we are making tremendous strides is in modernizing the supply chain.

Metallic printers first installed on USS Essex and USS Bataan last year afford the fleet onboard production and repair capabilities. I know from my own time at sea that waiting for parts has negative effects not only on operations but also on morale, so these tools are truly a game-changer.

But we also need additive metallic manufacturing in our industrial base if we are to deliver all the ships and submarines the fleet requires; projected manufacturing readiness levels and current and future supply chain issues demand it.

That is why we established the Navy’s Additive Manufacturing Center of Excellence in Danville, Virginia last October.

This center is building part-data to transition to industry for serial production and distributed production, lowering barriers for new entrants to the Navy’s industrial base.

Just as critical, Naval Sea Systems Command has developed additive manufacturing processes for over 500 certified parts used in ships and submarines.

Additionally, we increased funding for maritime, aviation, and weapons spares and have made these a top priority to ensure our fleet is self-sufficient and ready for sustained operations.

These efforts are part of our $2.3 billion investment to support the industrial base over the fiscal year.

Nowhere is innovation more needed than in the cybersphere and our pursuit of information superiority. Our networks continue to evolve to leverage new technologies that improve our warfighting and cyber domains.

The DON is accelerating adoption of Proliferated Low Earth Orbit or (P-LEO). This game-changing commercial technology, available now, creates operational advantage by providing persistent, secure, global access to resilient, high-speed, low-latency satellite communications for warfighting, support, and quality-of-life-and-work solutions.

We are using the lessons learned from migrating more than 500,000 users to cloud-based Flank Speed, to pilot the Last Mile and Nautilus by efforts through PEO DIGITAL to improve the user experience of our workforce.

In the afloat environment, the Consolidated Afloat Network Enterprise Services (CANES) program introduced the Cyber Threat Upgrade, providing modern adjunct computing capacity supporting the hosting of Project Overmatch capabilities on 20 platforms across three Carrier Strike Groups.

We have installed and tested infrastructure on multiple platforms enabling over-the-air software updates to underway afloat units. 

Speaking of these “over-the-air” updates… Spectrum is one of the key enablers for many of our IT/Cyber innovation efforts. We are beginning to think differently about Spectrum.

Specifically, I believe we need to pursue “Spectrum Agility" or the ability to design spectrum-agnostic systems where practical, with multi-communication paths for mission assurance.

Not all innovation is technical; we are also thinking differently about the way manage cybersecurity. We’re used to managing cyber through a compliance-based approach.

That means that somewhere a system owner fills out a checklist, that checklist is reviewed, and the application in question is given an Authority to Operate on our network. Then we rinse and repeat that process every several years. 

I’ve asked the CIO and the PCA to help move from this approach to a readiness-based approach, building cybersecurity into system design, and maintaining currency through continuous monitoring/red-teaming.

We’re calling this CYBER READY—and I am very encouraged and excited about where we are going with this project.

I am also committed to increased investment in developing and fielding autonomous, interoperable systems to better pace our rivals.

In the last two years we have made profound progress by employing our unmanned systems on ranges and long-range deployments in the Pacific as well as in actual contact with adversaries in 5th Fleet.

In April, I announced a second unmanned operations hub in 4th Fleet, replicating Task Force 59’s success in 5^th Fleet.

In January, Marines from II MEF supported the third iteration of Task Force 61 Naval Amphibious Task Force Europe.  This Task Force ensures continued integration of the Blue-Green team across U.S. Sixth Fleet.  Forces assigned to TF-61 support contingency planning, enhance Maritime Domain Awareness, and further test and refine concepts as a Stand-In Force for U.S. European Command.

This summer we ensured Navy UAVs, USVs, and UUVs participated in multinational exercise UNITAS 23 in Colombia.

A few weeks ago, we awarded a contract in just 28 days to support maritime domain awareness in SOUTHCOM using long-dwell unmanned surface vessels to aid in the fight against illegal fishing and drug trafficking.

We have also commenced deep-sea testing of Orca, the Extra Large Unmanned Undersea Vehicle Test Asset, a capability with potential to change how we operate and deliver lethality undersea.

In addition, for the first time, we’ve embedded Automatic Target Recognition into our MK-18 UUVs, the first use of artificial intelligence in UUVs “at the tactical edge,” enabling dynamic re-tasking in the mine countermeasures mission.

Modified CONSOL Adapter Kits are another key technology we have recently developed to leverage commercial product tankers to refuel our ships. This force-multiplying capability increases lethality and on-station endurance of the fleet, sending an unmistakable near-term deterrent message to our competitors.

I mentioned several areas of progress on the Green side of the house already, and it should come as no surprise that Marines are moving out decisively towards the vision laid out in Force Design 2030.

Two months ago, the Navy Marine Expeditionary Ship Interdiction System, or NMESIS, successfully conducted two Naval Strike Missile tests, demonstrating how the Medium Range Missile battery can conduct anti-surface warfare operations as a component of an integrated naval force.

NMESIS gives the Marine Corps its first capability to contribute to sea denial and sea control operations with ground-based anti-ship missile fires.

Even more recently, the Marine Corps stood up its first-ever mobile ground-launched Tomahawk cruise-missile battery. The battery is the first of three planned to complement surface and sub-surface launch capabilities.

The Marine Corps is indeed wholly committed to modernizing and innovating. That is one reason we’ve stood up the first-of-its-kind Marine Innovation Unit, a reserve unit based out of Newburgh, New York.

I had the honor of activating this unit in May of this year. In a few words, the Marine Innovation Unit is the latest embodiment of the Marine Corps’ legacy of innovation.

Its 200 or so members have tremendous expertise and connections to both private industry and the Defense Science & Technology community, including Marines with full-time civilian careers in software development, AI and machine learning, autonomous vehicles, venture capital and finance, management consulting, biotechnology, robotics, and other key industries.

The Department of the Navy is building on the success of the Marine Innovation Unit, by creating a Naval Innovation Center co-located with our Naval Postgraduate School.

The Naval Innovation Center will be the premier center for developing and promoting innovation across the DON workforce and in everything we do.

Our Navy and Marine Corps team is working hard every day on these initiatives, and so many more that I just don’t have the time to talk about today… and if you couldn’t tell, I am so incredibly proud of our Sailors, Marines, and Civilians’ incredible accomplishments over the past two years. 

It is truly humbling and inspiring to work alongside them on a daily basis.

Indeed, I wish every citizen of this country could see for themselves just how much our Sailors and Marines have accomplished—we have every reason to be both proud of and thankful to our great men and women in uniform.  And to give them every bit of support we can—it’s the least we can do in return for all they do for us.

And all this hard work, this progress on so many fronts—it doesn’t come a moment too soon. It is absolutely essential that we maintain primacy in technological advances to maintain our strategic advantage as a nation

I will do everything in my power to ensure that we stay at the forefront of building the warfighting capabilities and industries of the future.

Today, there is more than $53 trillion in private capital available  to be harvested for investment in future problems. I want to ensure that this investment is targeted toward our needs.

The great news is that there is a tremendous amount of innovation focused on solving our national security problems today.

The proof of that is right here in this room.  I am incredibly thankful for the energy, the drive, and the passion that so many of you put into making our nation stronger. And God willing, I will see you again next year, for my fourth year! And perhaps fifth through seventh years too.

God Bless our Sailors and Marines, and everyone who works in or for our great Department of the Navy!

And now, I’ll be happy to take your questions.