And international studies, this is about an hour and a half. All right. Well, were going to go ahead and get started. Good morning, everyone. Im a senior fellow here in the International Security program at csis. And im delighted to kick off this mornings Maritime Security dialogue with vice admiral moore. The Maritime Security dialogue represents a cohosted series between csis and the u. S. Naval institute or usni, and it seeks to highlight both current thinking and future challenges facing the navy, the marine corps, and the coast guard. Today represents our second dialogue for 2017, and we look forward to welcoming yall back for additional events throughout the year. We would also like to thank, in a special way, Lockheed Martin and Huntington Ingles industry for making this series possible. And before we get underway for big events like this, we also like to make just a brief announcement, safety announcement, we dont expect any difficulties, but should there be anything as a convener, we just want to make sure that you know weve got some exits right here in the back on both sides and stairs down the front and both myself and anthony bell in the back will be your responsible officers to kind of direct you in the right way, just in case anything should come up. Just look for one of us. And so for our formal introduction to get us started, im going to turn things over to vice admiral peter daly, retired, chief executive officer of the u. S. Naval institute and were happy to have him here and be partnered with usni. Thank you. Welcome. For those who dont know me, pete daly, ceo Naval Institute. The Naval Institute and csis are proud to bring you this maritime dialogue series. And as mentioned we give special recognition to our sponsors, Huntington Industries and Lockheed Martin. For making this event possible. Now ill introduce our speaker for today. 1981 graduate of the academy, also holds degrees from George Washington university and a Naval Nuclear engineering degree from m. I. T. After serving 13 years as a Nuclear Propulsion qualified Surface Warfare officer, he made a lateral transfer to the engineering duty officer community. There, he served in billlets mostly focused on refuelling complex overhauls of Aircraft Carriers. Major command included Major Program manager for inservice Aircraft Carriers and Program Executive officer for submarines, peo subs. Finally, last year, in june, vice admiral tom moore assumed command as the 44th commander of navc. I point out that theres over 75,000 uniformed and civilian employees of navc. Navc is entirely responsible for the contracting and supervision of all navy ship and sub ship building and responsible for the maintenance and the systems that go on those ships directly. So, we welcome admiral tom moore, who controls one quarter of the navys budget. Thanks, pete. I always am reminded of that by the cno. By the way, you have one quarter of the budget. Thats not necessarily a good thing. So, good morning, and thank you for the invite this morning. Before i get started, last night was a big night for the navy. A couple things. One, my band played live down at the water front, and then lets see what was the other thing that went on last night . Oh, yeah t other thing is we delivered the ford and to the navy. So, kind of a big night for us, actually, from my perspective of having worked on ford for most of the past ten years, just came back from a very successful acceptance trial and the board survey and the navy accepted delivery of the ford last night so you heard it here first. So, thanks for the opportunity to come talk this morning. The theme that was given was the maintenance challenge and thousand reset the fleet. And so what id like to do is talk about this and kind of the context of talking about where the cno is headed with the size of the fleet and then talk about what were doing to grow the size of the fleet on the new Construction Side, but then importantly, talk about, you know, how the maintenance side of the that equation fits in. Its not, you know, admiral daly and i were talking beforehand, its not either. You got to do both. And so sometimes we tend to forget about that. Having been a shipbuilder for most of the last 15 years but also spending time on fleet redirec readiness, im well aware that you have to maintain what you have and continue Going Forward. If you havent read the white paper, get a copy. Its a good read. I like to tell my mast chief its short, has some pictures in it so its great for commander master chiefs. Their lips do not get tired when they read it. And the cnos white paper talks about, i think, importantly, up front, the what the current security skrierenvironment is. And he makes three key points and these key points are applicable when youre talking about new construction or whether youre talking to maintenance sides of the house and the three key points are time matters. There has to be a sense of urgency in some of the things were getting after today. And that applies to across the board, to getting ships and submarines out of availabilities on time to figuring out how you can design these ships quicker and get them built quick e. The second thing is that the pace stay exponential, and if you can look at the world today, and the threats that were facing, the learning thats going on in our near competitors, say russia and china, and the pace theyre changing that capability is changing exponentially and we have to keep up with that pace. As the cno likes to say, its kind of like we went into halftime of a Football Game in 2000 up about 283 and kind of popped the champagne and said, games over, and dmft the referee came in and said, halftimes over, were ready to start the second half and we said, well get there when we get there and we kind of strolled out midway through the Third Quarter only to find that the score was now 2824. So that capability gap between us and our competitors has really closed and its something thats really a keen interest to us here on the navy side of the house in terms of whats the capability that we need Going Forward. So theres a lot of discussion going on today about what is it that what is the navy that we need, and not necessarily what is the navy we need, necessarily in the 2040s but whats the navy we need in the 2020s and we tend to talk a lot about whats the navy we need today, and were trying to take a little bit of a lead angle and figuring out what is it the navy we need, you know, probably in the mid 20s and go make some decisions based on kind of that navy that we need in the 2020s. Theres been a number of recent studies, some done by the navy, some done by independent groups, about what is it that navy need, what should it look like and they all have kind of varying mixes of ships and stuff. But at the end, they all came to the same conclusion, is that we need a bigger navy than we had today and theyre all around the 340 to 350 ships so clearly the size of the fleet does matter Going Forward. And the capability of that fleet a s also going to matter importantly as well. So how do we get there from so one of the things, when we talk about the size of the fleet and i know ill get questions about, hey, the 18 budget didnt add a bunch of new ships, what happened . Well were never going to be able to turn that around overnight. I think what youre going to see, and ill get into it a little bit more in later in my remarks, you know, the 18 budgets holds what we have on the new Construction Side but makes a significant raise on the readiness side of the house. Which i think is if you listen to the vice chiefs testimony back in february, his point was, hey, the first dollar we get ought to go to readiness and i think thats what youre seeing in the 18 budget. Now, a lot of we spent a lot of time talking about, what is the strategy, the future navy white paper, the design for maintaining maritime superiority all goes to what the navys strategy is Going Forward. And its easy to say, having been in washington, d. C. Since 1999, i tell my people, im on my 18th palm, which is kind of hard to imagine, and if i had a collar every time someone said, you know, we need to build the Strategy First and then the strategy will drive the budget. In the world we live in, that sounds great, but the reality of it is, you dont want a budget completely driving your strategy, but you cant ignore the fact that we live in a fiscally constrained environment. So, you know, what we would like to say about the navy budget is that it is a resourceinformed strategy. And i think thats the reality of where we are today. So were going to increase the build of the ships that we have today. We think the Industrial Base can probably build over the next seven years based on the capacity they have probably 29 more ships than we had in the knowledge 310ship plan. Weve got to get more capability for that dollar. We have to figure out where the need and the curve is with the industry to get them to go work on this stuff. And we have to figure out how to innovate and what are we going to work on the new Construction Side of the house. Were going to continue to build in ddgs. Were going to continue to build the amphibs that we have today. Theres an ongoing discussion on the lcs and the frigate. That is still kind of churning around inside the pentagon that we owe some answers to the congress here later this summer on that. Youll see some things going in that particular area. As we head out, further out, you heard me talk about this before, the future service combatant, what their placement with the cg is, thats going to be critically important as well. Kind of a new buzz word inside navsea, inside the pentagon is swap. S. W. A. P. Space weight and power. And if you heard me talk about, before, as we go build the future navy, while i cant tell you exactly what its going to look like, one of the things that really important for us as we build these platforms is to make sure the platforms have enough space, weight and power so you can modernize and adapt to future threats. We are kind of in an age of electric ships. You probably heard me say before. Ddg 1000 and ford class carriers are prime examples of kind of building in space, weight and power into the platform so that you can adapt and go forward. An interestingly, the ddg51 class, which is around today and serving well, as we have gone and theyre going to build flight 3a, were going to provide late bit more space and a little bit more powner that Going Forward. And those ships are kind of unique in their ability to stay around. It was interesting, you know, my First Department head was on ddg17, uss cunningham. We used to get rid of ships back then at the 25year point. And we probably got rid of them at the 25year point, we didnt do maintenance on them. Anybody that served on a ddg knows they were tough to maintain. The reality is, we didnt spend any money on the maintenance side. At the 25year point a lot of people think, hey, we ought to get rid of these things because theyre rust buckets. The reality of it is that we really got rid of a lot of those ships because from a combat systems standpoint they had become obsolete. And so, fast forward to today, with looking at open architecture, spy radar and vertical launch and now you have a platform that can stay around a lot longer. So now we have to kind of shift the thought process. Now we have a combat system thats not obsolete. Now back over to the maintenance side of the house, now, if you want to get more service life out of the hull, you have to do the maintenance on it. And, you know, admiral daly and i, when i first became a flag officer in 2008, he was fleet forces command, we reached this kind of epiphany where we had not spent any money doing maintenance on our Service Ships for about ten years and we woke up one morning and found out, oh, my goodness, were failing all these in serves and we cant get the ships to their expected service life. In hindsight, it doesnt take a Rocket Scientist to find out, if you dont make investments on the maintenance side of the house, you cant expect the ships to get to where they need to get to. Wed gone along happily for ten years, look, not doing maintenance and saving money to do other things, its working. The reality is, we were consuming the service life of the ships that was built into them and the redundancy, and eventually it caught up to us. If we spent the better part of the last probably eight to nine years digging ourselves out of that hole, particularly as it relates to the surface ships. Private sector of the Service Ships. So one of the key components, i think, of getting out to the size of the fleet that we need is going to be looking at, you know, taking the ddgs we have today and actually extending the service life of these ships. Most of them are in the 30 to 35year range. So were taking a pretty close look at what would it take to get them out another five or ten years . And the reality is that, for a steel hull, if you do the maintenance, you can get the service life out much longer. And with todays open architecture and vertical launch, i think theres great opportunity for us to make the investment. A relatively small investment. To keep ships around longer than we have today. And people will say to me, well, weve never really gone a surface ship past 30 to 40 years, and i will point out all the time, yeah, but we routinely take Aircraft Carriers to 50 years. The reason we do that is because we consistently do all the maintenance that you have to do on an Aircraft Carrier. To get it to 50 years. We know how to do this. And i think what youre going to see is, were going to take a very serious look of taking the service life of the existing fleet and extending it out five to ten years. If you do that, and youve seen probably some of the Structure Assessments that gets us to 355 ships around 2045, if you keep ships at their Current Service life and build new, we can probably accelerate that to get to 355 in 10 to 15 years with a relatively small investment over a 30year period. Were going to take a close look at that. One of the things that i have, you know, consistently pointed out as we go look at the new frigate design, look at the future service combat tapped is, we should not design a ship with a service life of a planned service life of 25 to 30 years. Doesnt make any sense. We ought to plan service lives of 40plus years for all of our ships and then build in the s. W. A. T. Context so you can adapt them Going Forward. And i think thats going to be part of our strategy Going Forward. So, the last part i think i wanted to talk about is, i wanted to talk about the maintenance side of the house, and kind of resetting the fleet. If you heard the vice chief back in february, he talked about the fact that if i have the first dollar i get, new dollar i get needs to go to readiness. And the good news is that the fy18 budget has an unprecedented amount of money for readiness. 9. 7 billion in the maintenance accounts, to do maintenance on our ships. And thats good. We need that. Although, as i tell the folks at navsea all the time, we have the resources we asked for, okay, now its over to us to deliver. Its important to understand, when you talk about maintenance, that its not just resources. Im careful, quick to point out that its just not about money. And not just about adding more people. That cant be the only part of the solution here. Clearly, the 9. 7 billion that we get is going to help us. We need to grow the size of the Naval Shipyards. 33,850 people today, going to grow that to 36,100. Thats where we need to be to consistently deliver the nuclearpowered ships and submarines on time. Today were not doing a good job of that. Only about a third of them deliver on time. Weve had a better year on the carrier side of the house. 12 of the 17 submarines are either in maintenance, overhauls, or inactive are behind. So we have to kind of turn that around. And so people will help. Certainly the capacity piece of that is important, but its not the only piece of it Going Forward. Navseas Number One Mission priority is the ontime delivery of ships and submarines. And the reason is the number one priority is because of the 235 ships i have today, about a third of them at any time are under navseas control, either in a maintenance available or in pierside availability. To the extent that we dont get them out on time, it causes a great stress on the force. You may remember, there was an article back in january, february, i cant remember the exact month, where a reporter said that the u. S. Navy for the first time did not have an Aircraft Carrier at sea, the First Time Since world war i, we didnt have an Aircraft Carrier at sea. Thats a startling statement when you think about it. Part of that is because we were down to ten carriers, but the other part is because the george h. W. Bush, in maintenance in norfolk, supposed to be eight months, took 13 months. So, it wasnt lost on me when i came into the job a year ago that navseas ability to get these ships out on time is critically important to resetting the fleet and getting the fleet to the size of the fleet we nee