I pledge allegiance to the flag of the United States of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. Thank you. I welcome all our attendees. We have several members. Several uniformed members which is always good to see. Several people from the foreign court, distinguished guests. I would like to acknowledge first hour sponsors. From Lockheed Martin we are by retired navy captain robbie harris. Textron systems is represented here. We have a stellar program. We have refreshments next door. Take advantage of that. Our speakers will allow for questions today. Attentiveybody to be to the idea that we use the microphones. That we useant those so people can hear your questions, and also for the people beaming in can hear your questions which is important. I thank you for that. I ask that you get to your question because we have a lot of folks here today. It is my honor to introduced our first speaker, our keynote speaker, mr. Richard spencer who is the 76th secretary of the navy. He is a proud veteran of the u. S. Marine corps. As the helicopter fight pilot. S a helicopter pilot he served as a managing director of a financial firm, and has helped positions on corporate boards to include the marine , the defense business board, and the chief of Naval Operations executive panel. Lets give a warm welcome. It is the first time he has spoken to enable audience. To the honorable richard spencer. [applause] it is a pleasure to be here. There are familiar faces in the as i look across. We were out at the Reagan National defense forum, and for those of you in the audience who might not have been there or see the live version on television, which if you are watching, i , becauseou find a life it was a beautiful saturday and you should not have been inside watching television. It was interesting. Timely topics. I want to thank you for asking , o come and address it is great to see all of you. It is Interesting Times we are living in. The chinese Fortune Cookie always says. I would like to address with this group who i know in looking here you have been enduring endorsers of National Security and forceful advocates for a strong maybe Marine Corps Team. I want to address my thoughts on how we are going to take this institution going forward. I will pause and give you an update. It has started out to be a good week in the pentagon, which does not mean that will keep on the same trajectory, the certainly is a nice day because i swore in the new under secretary of the navy. Therrow i get to swear in assistant secretary for rdna. Frame putting meat on a that is going to carry the Organization Forward and eight positive trajectory. One of the first things we do when we address the topic of National Security is acknowledge that we are a commercial nation. We are a maritime nation. Of thefit from the use sea lanes that are open for commerce, and we are protector of the sea lanes. We have a responsibility to provide security and crochet be up to the collective state and stability of a close quote of a global community. It is the right thing to do. It is in our best interest to do it also. To enablehing theme policy has always been freedom of sees. Freedom of seas. Threats to global stability put our notion and purpose of freedom of seas at risk. That, we cannot abide. The United States navys Forward Deployed for the preservation of stability. Their presence is a deterrence. And a reassurance of our allies. Whether it be the green suits of the navy on shore, whether it either gray ships in the harbor, presence provides stability. It is my job to make sure our forces have the fangs. The longer and sharper is the better. The Navy Marine Corps team needs to be able to fight tonight and win. That is easy enough to say, but it is a challenge to do. I must be blunt. We have readiness issues in the navy and marine corps. We are getting at them, but we have a ways to go. Despite the challenges, i am confident we are going to successfully tackle every issue and right this ship. We are going to utilize the aid of outstanding problem solvers we have within the organization, and we are going to task some problem solvers from outside the organization. Our fleet forces are under the microscope, and rightfully so. The comprehensive review is an example that leadership and the problemsolving within our organization will be done with locusts. In given us a deep deeper insight and provided a way forward to address the shortfalls that we see. Isstrategic readiness forthcoming, but we are looking at everything. We are looking at how the joint chiefs tasks our organization. Well aware, there are a multitude of obstacles in our path both current and emerging. Lets go over some to refresh your memory. On the issues born of that control act have taken a toll on readiness, maintenance cycles, and have cost us time and resources that we cannot lie back. By buy back. They showing shot are showing signs of strains and are woefully underfunded. Technological leaps have but capabilities in the hands of our adversaries. A number of these adversaries have begun demonstrating renewed aggressions that we have not seen in the some time. These points are simply the basis for the environment in which we operate. Howhe challenging world, can we maintain our advantage . The key is to remain focused on priorities inhree mind, people, capabilities, and process. People are our greatest asset. We do not win without them, and we need to keep the winners we have. We need to recruit, train, and power, the subject Matter Experts and hold people accountable. Our ships, planes, vehicles are chunks of metal. They cannot do much without human interface. They need sailors and marines to bring them to life. Our sailors and marines are sons and daughters are the best in the world at what they do. They are all volunteers and they have given themselves to ensure we can enjoy the freedoms we sometimes take for granted. They are hearing the reinforcing areage every day that they our warriors, and that is their job. And deserve the right gear lethal platforms to deliver the fight tonight. I am dedicated to ensure our people, these war fighters get the capabilities that they need. I am also dedicated to ensuring our Service Members and their teammates received the best training. Welltrained people will employ their gear and extract capabilities in the most efficient and effective manners. We must foster an environment were sailors and marines are paths to choice and challenge them, and give them a career path that will keep them in our organization. We need to ensure our people have the professional and Educational Opportunities they need to grow as leaders and critical thinkers. We must also ensure that families and loved ones of our dreams and sailors are taking care of. Those families are entrusting us with the lives of their husbands, wives, sons, daughters, brothers, and sisters. When we send them on the verizon, they need to be sure their loved ones are taken care of at home when our sailors and marines can focus their attention on the mission, they will be able to effectively apply work adding capabilities whenever and wherever they are needed. This leads to my second priority, giving the right capabilities in the hands of our sailors and marines. You all know our sailors and marines are the best in class, and they deserve the best in class. A deserted in a timely manner. Mythat end i have directed acquisition teams to do their part in expediting our research, development, and acquisition process. Our technological advantages are real, but they are diminishing. There are some countries and nonstate actors working hard to bridge these technological gaps, and that is why my goal is to never send our troops into a fair fight. I have learned from the world of business when you are facing competition, you need to have the resources and processes in place to compete and win. And to stay ahead of the competition at all times. It is when you take your hand off the throttle back competition begins to close. It is bad enough in business when you do not win, but the stakes here are much higher. I can assure you that adversaries are not just treading water, they are at full throttle and catching up quickly. Theyre spending the money needed to get the legal capabilities to challenge hours, and they have a path that is more expeditious than ours. But fear not, we will answer this challenge. Fronts,respond on all internal research and development, rapid prototyping, accelerated learning, and partnering with industry to get the capability our people need. A true partnership. We talked about this this weekend that reagan. It is based on the concept of shared risk. It will yield shared benefits. Cannot beovernment the only entity when it comes to acquisition that takes all the risks. We must come back to a true understanding of partnership with our Industrial Base so we can have a sustainable acquisition process. Not a transaction oriented downss that simply grinds the lowest common denominator. Partnership where we provide industry a clear line of sight to our needs, and we must provide them a clear line of sight to our resources so they can invest in the Necessary Development and provide solutions to our challenges. The challenges we have in the Navy Marine Corps are immense. There is no relief in sight that will have all the resources we need. We must leverage every single aspect we have. That is both internal and external partnerships. Bymust do this all the while making sure we do not squander the resources of our taxpayers. A component of the partnership requires that we be a responsible customer to industry, and frankly that is something we have room to improve on. Ouran start by focusing on third priority, process. To meet the threats of today and tomorrow, we must reform our processes now. We have been talking about this for decades. We are starting to move the needle. You will cease all this come to fruition in the near future. Sometimes that means joining with our aloe services to share expertise to meet a common goal. A partnership with the coast guard. We are combining best practices. The navy knows how to build ships. So does the coast art. We are teaming up to see so does the coast guard. The navy will benefit. The coast guard will benefit. The taxpayer will benefit. We have had success with congress to lower costs on improvement, but we have a long way to go. We appreciate congressional ,uthorities for multitier buys and we use those to fund our programs. Tools like these help us balance economies while assuring the help of the Industrial Base. A base that at the end of the day provides us our capabilities. I appreciate the bipartisan congressional advocacy in navy. Ng a 355 ship as not just the ships when we talk about growing a fleet, it is every asset across the board. Lord diligently to implement the position we will work diligently to implement position to grow the fleet of United States navy. As we press forward, i am committed to expanding the fleet in the sea, under the sea, and in the air. We have delayed a foundation for that growth. Lay ahave to to foundation for that growth. Fleet, the wayt that we should, so those that have these assets in future years have the capability to fight. I cannot tell you what the maritime fleet will look like in 25 years, that i can tell you it will not exist unless we get serious about providing funding needed to build those capabilities today. We cannot buy back time and if we do not invest for the future, we will be in a corner that will be tough to extract ourselves from. Urgency is the, battle cry. In addition to our efforts with congress we are working we are reaching out to our industry partners. Wherever there is a challenge, someone else has almost certainly addressed it. They have insights on what works. We are looking for the best practices. The practices of people who have gone through similar situations. I found out that by reaching out, talking about our issues produces amazing feedback from outside the building. Of the moste unlikely places that you can imagine. Thewill see that in forthcoming Strategic Review we will roll out in a week and a half. We have reached out to Industry Leaders to find out how they have improved safety. I am confident after seeing these people and what they have contributed that we will gain from their valuable insight and improve our own culture as we move out the road to work for sustainable readiness. What is needed . Inneed the right processes place to recruit, train, equip, and organize our people in a sustainable responsible manner. Giving them the capability to win any time anywhere. The challenge of doing this may seem daunting, but i see opportunity. Robert unity to enhance our part opportunity to enhance our partnerships. We had innovators. There is an opportunity to lead and address what has been the most impediment to reaching our ofl, the budget control act continuing resolutions we have seen. It will continue to be harmful unless we address this as soon as possible. Crs have cost the navy four dollars billion. 4 billion. Billion is enough to buy a squadron of f35s. 3000 harp and missiles. 2000 tactical tomahawk missiles. It is enough money to bias the additional cap capability that we need. Instead that money was lost of the of inefficiency continuing resolution. Each member of our all volunteer force make a promise to protect our nation from harm if called, and give their full measure to do so. It is time for our nation and congress to keep the same promise to them as secretary mattis has said. Another continuing resolution is a broken promise, and one more chip away at our ability to survive. In closing, i want to thank you for the opportunity to stand in front of you, and i am going to stop bloviating and take questions from the floor. That is where we find the most interesting things to talk about. So, open the microphones. [applause] thank you. Good morning mr. Secretary. Reagantion is, at the commanderrum, the said he aspired to be the Program Director and not the general. He said he had the responsibility to deliver products and processes to the war fighter. He also said when the lieutenants and captains want to be the kernels again, that is when we want to be the colonels again, that is when things will be right. How do you intend to fix the bureaucracy . To ensure that they grow up to be captains and not necessarily admirals . Richard it is a timely question. Not say it is an alarming rate, but the fact there are one of or two of these events shocked me completely. There are officers that are asking not to take command. Take anotherther path than command. When i was in the marine corps, the ultimate goal i had in front of me was to become a captain, and take command. We are doing something terribly wrong if in fact there is more than one person who wants to ck that box and say i will i would rather not take command. We are looking at dogma. We have to provide, and we will provide the environment for our enlisted and our officers to a challenging career, and provide educational environment to progress. Will it take moving cheese . Yes. Will we be able to do it in four years . We will set sail to try and do it. We have to do it. One example that someone asked some contextive me for this, and i said here is a fine example. When i flew the battle frog, you and fmot tune up frequency to an army frequency. We were such a center of excellence. We have now gone to joint. We had to prime the pump to joint. Everyone had to set up the joint command. Dna. Is now in our joint. E does can we say, we have the understanding of joint at an early dna stage, we dont need as many joint joint. . That may be an avenue we want to look at. Going back to the environment and tools to extract the best from our people is something we will have to do. It is a valid question and we are focused on it. Secretary, on the people issue, the navy is short 3000 enlisted men and women. In that context, the economy is improving, unemployment is down. We see, and i can go through type, but summaries and the last 25 years, there has been no reduction increased requirements. How are we going to man a fleet of more than 275 ships . Richard another timely question. You guys as mye red team. 2010, secretary in to his was brought office to get an assignment for what the defense business might be working on. He turned around, and all of a sudden since i was sitting with my mouth shut, i got the signed with modernizing military retirement, addressing the issue. Ary toasked his chief of staff get mr. Spencer a kevlar vest and send him on his way. One of the things we did do, we started the discussion, which is the defense board does so well. We started the discussion on military retirement. Now we have the blended retirement system. I have had a couple people say, ofsmarty, now your secretary the navy and you have to live with this. It allows people to walk out the door more easily. A walk out with assets. I turn around and say, good on us. We are going to have to work to make it more advantageous and more challenging and more desirable to be in the naval out these then be wooed door by competition. Will not win 100 of the time but we will make an effort to make those people want to stay. That is part one. Part two, the question you asked, with the economy bubbling along as it is, how are we going to find these people . Three weeks ago i got an update on how we are recruiting. The navy and marine corps, to separate pots are doing well. If we had the surge now, there might be some problems. The economy is strong. To grow 3000 we would easily be able to do that. If you to address i would like to stop and talk about the lcs. It is time for a conversation change on the lcs. It was an atrocious acquisition process according to everybody who wants to comment on it. You can take either side of the argument. I would like to find someone on the pro side. We are now getting feedback from the fleet, from the commanders who are using these platforms. It is good he back. That vessel there was structured for a more efficient crew. We have to do that going forward. Her legacy platforms, what can we do . We are somewhat limited but we will enhance the capabilities on board to possibly lighten the load in that regard. We have challenges. Point to the personal question, we have to be careful with her son elle. Th