I will a congress this recording efforts of the chief of Naval Operations, the secretary, and the senators and members of congress through leadership that is grounded in transparency and i count ability. Thank you, and i look forward to your questions. Transparency in and accountability. Thank you, and i look forward to your questions. Thank you mr. Spencer. I was just on a trip with several of my colleagues, senator warren, senator perdue, senator graham, senator whitehouse, and among other places that we spent the fourth of july as i have for many years ul and outside of kabul with men and women of the military with a number of events that we do for them with the fourth of july, a town hall meeting with a large number of men and women who are in uniform. , this happens asked aecade, and he very us to question. He asked, how many in the room were there for more than the first time in afghanistan . Majority raised their hands. He said, how many have been here more than twice . Majority raised their hands. He said, how many have been here three times . A significant number raised their hands. Me, it wasrds, to something that was a graphic demonstration of the incredible burden that our activeduty overary has been bearing the last 15 or 16 years. They are brave, proud, the best navy we have had in a long, long time, but they are not fully equipped, and they are not fully trained, and they are not given the authority and responsibility that they need in order to win this conflict. The fact is, in afghanistan, we are not winning. We are not winning. No less than our military commander in afghanistan will tell you that is a fact. That has to tel turn around. We cannot ask these men and women to keep going over there with a strategy that in order to n Afghan National army in order to defend itself, it has to have permission from somebody in the white house on the National Security council staff. I am exaggerating a bit, but the fact is if you ask any of these young men and women who have been there and there and there, they will tell you that they can win this fight, but they have to have the equipment and authority to do so. It is not that they are not well read. They are. It is not that they are not capable. They are. But it is a do not lose strategy, which is epitomized by the former president s speech at west point, where he said, we are going to surge and increase the number of troops there, and we will win, and by the way, we are leaving on a certain day. Baghdadi and you hear that, i think the conclusions you draw are obvious. We have troops stuck at the pier, two Nuclear Submarines have been sitting at the pier for a year because of a lack of spare parts. 60 of of our f16s our f16s are grounded. It has to do with the budget control act, one of the greatest enacted byrdice ever the congress of the United States. How serious do you think the problem is . What do you think we need to do . Senator, i believe it is one of the most serious issues we are facing right now for National Security. The budget control act has wreaked havoc with our readiness. The impact on the lives of marines. Rs and read i find comfort and excitement on the fact that everyone is leaning in on this issue. There is a lot of heavy lifting that has to be done. There is a lot of shes moving that has to be done. We have to address capabilities. We have to streamline the process, and i believe that is the one on the issue. My priorities, they are people, capabilities, and process to address these and provide, and apply the resources we have for the down payment on readiness and move forward into building out the fleet. Senator mccain on the third one, the process, probably the greatest source of frustration to members on this committee of this committee on both sides. A few years ago in 2013, i asked a former chief of Naval Operations who was responsible for the 2 billion cost overrun on the uss gerald ford. He said he did not know. I asked a former chief of staff about the f35 cost overruns. He did not think anybody had been fired. What are you going to do about this now . Two years in a row now, we have held people accountable. We have held Service Chiefs in the mix and help them responsible. We have taken a number of measures to hel hold people responsible. But how is it we reached a point where you could have a 2 billion cost overrun on an Aircraft Carrier . One ship. 2 billion cost overrun, and no one is responsible. Mr. Spencer senator, my career has been steeped in accountability. I can tell you right now that the accountability starts right here. The way that we address this is through Behavioral Management. You reward positive events. You have other tools at your disposal to take care of performing. R projects were not you make it transparent. I will be coming before you to ask for resources, but i also have to have my decks clean to make sure they are put forward in a fiduciary early prudenily prudent manner. Senator mccain the you know of anyone has been fired because of cost overrun . Mr. Spencer not yet, senator. Thank you very much, mr. Chairman. Thank you for your commitment to serve the navy. You reflected in your Opening Statement the critical nature of the triad and the back that the navy is the leading edge of that with the columbia comprised program. I assume you feel the same way . Mr. Spencer most definitely, senator. Ofin the spirit conversation, we want to measure that program stays on schedule and on budget or below budget. A remarkable job with the virginia class, keeping them ahead of schedule with each new vote. We want that same tradition. I know you want that same tradition with columbia. Mr. Spencer most definitely, senator. Senator reed thank you. As i mentioned before, not only do we need more ships, we need more operational concepts and new technologies. I wonder if you have given any thoughts on your discussions with the secretary or the cno about what areas you see that you could collaborate with the cno on. Mr. Spencer i have, senator, starting out with the acquisition process itself. I laid out in my , we did a study at the business board, 32 plus layers of people needed to sign off on an acquisition process. That did not involve major platforms. We have to allow the people who have the education and intelligence to make acquisitions and face off problems to provide solutions. They have to know and be responsible for the outcome and be accountable for it. That is one of the biggest steps we will make right off the bat. Senator reed are there any break to be you are the mold and a leap ahead approach . Mr. Spencer most definitely, senator. People have asked what you think of the 355 ship navy. It is a great goal to have. I cannot tell you what the construct would be sitting here today because unmanned below the water, on the water, and in the air is an area we are just beginning to chip away at. That will provide great yield for us. Senator reed thank you. There is another aspect of this whole technology, to operate more efficiently. One of the major constraints going back to the age of steam is fuel. Energy efficiency from an operational standpoint would seem to be a critical aspect. Are you going to continue the efforts . The navy have done some remarkable things in terms of alternate energy fuels, etc. Mr. Spencer i believe if confirmed, my responsibilities are to export any and all avenues that provide us longer legs, less of a tether to fuel sources. That goes across the board for technologies also. Senator reed we have all indicated i do not know what the right word is. A discomfort with the budget control act. It has reached the point now where our complaints are important, but do you think it would be helpful if the president made a major address to the country and a major proposal of how to resolve this . I do not recall very much his comments on the bca. Mr. Spencer i believe we all have to come together as a country to address this. It is devastating what it is doing to us. If we look back at when it was dreated, it created a bluff car to bring everyone together, and all of a sudden, the bluff was called and the bca was put in place. I look forward to doing whatever i can to educate the American Voters as to what is going on with the bca and how it is affecting us. Senator reed i concur. The bully pulpit is one major one. I think we need some directions, some guidance. Not just exploitation to do better, but to plan to actually get it done. Mr. Spencer agreed. Senator reed i think you. I look forward to working with you. I thank you. I look forward to working with you. Mr. Spencer thank you, senator. Whatever happened to the 1968 beige volkswagen . Mr. Spencer i wish i would keep it. It is probably worth more than the car i am driving now. One of the things i have been very proud of our uniforms is the fact that for the first time in my years i have spent here in the house and the senate, they are talking about the threat that is so real out there, and you and i talked, and by the way , thank you to the time that you gave. Everyone i have talked to has had a visit with you and know where you are coming from. The first time i have seen the uniforms come out and talk about this unprecedented threat we are facing right now and why it is a threat. We do not have the credibility of someone in uniform. That goes all the way up to the secretary level. I am sure you are going to be talking about that. You will not shy away from the reality, the level of threat , the news reports that north korea successfully tested an icbm capable of reaching the United States coupled with a Nuclear Program that poses an imminent threat to the United States. In one of our hearings, we had general stuart go as far as to say it is not a matter of if, it is a matter of when. I would hope that you would elaborate as much as some of the rest of them are because we are not going to get the attention. We are talking about sequestration. We are talking about the problems we are having. , 52 of the1964 entire budget was defending america. It has been steadily going down since that time. It will take a resurgence of people at the top letting them know that times are not the way they used to be. Right now, we have a mentally deficient individual running our country that is totally unpredictable. We have had hearing after hearing. That is one thing the top people in the military say that is totally unpredictable. A subcommittee we had in january, admiral moorran said the navy has a bette readiness t would take years to take down. Our highest irony is to have complete readiness. Anything you want to say about that that has not been set in response to the questions from my predecessors . Mr. Spencer senator, shying away from issues at hand is not something i do well. If i am confirmed, i truly believe the whole focus of my work would be the pointy end of thie spear. We will stand up and make sure that not only working with you all in this chamber by going out america and letting americans know what the real issue is. Senator inhofe i would like to ask you a question on shipyards and depots. The navys recent challenges have been documented. Of our f18s unavailable due to maintenance problems. How do we solve this . We are looking into the future and right now i problem that is they are today. Is there today. I want to mention the whole idea of maintaining an organic capability remember when i was first elected we talked thought50, and i surely we can do better than that, but we are still 5050. Quite frankly, i think it has worked pretty well. What do you think about the handling of the depots with organic ability . An spencer senator, it is interesting balancing act we have to address when it comes to industrial capability. I can separate aviation and ship building. I will address ship building first, where we have lesser numbers of providers. I do not say we glad hand people at all, but industrial science to the most efficient way produce is to have a clear line of resources. In this chamber, i believe we can address that. We have to work outside the chamber to work with some of our providers to ensure that they are providing us the best longterm sustainable relationship we can have to deliver equipment in the most costeffective, quick manner we can. Senator inhofe lastly, i just say that you do address the 355 ship issue. I am sure you have given some thought to what would be the appropriate personnel for a fleet of 355. Looking into the future, i assume you would be starting to address that now while we are addressing the great threat we currently face. Mr. Spencer yes, senator. If we take the full gamut of what is available to us to tackle the 355 ship goal, we should be thinking outside the box. We should be thinking possibly bringing things out of the ready reserve. We should be looking at ways to construct better, faster, cheaper. We will be looking at a frigate down the road. All of this capacity increase will require manning. There will be some numbers that have to be adjusted going forward. Senator inhofe sure. I look forward to working with you. Mr. Spencer thank you, senator. Thank you, mr. Chairman. Welcome to the committee, mr. Spencer. I think youll be pleased to know that an amendment was adopted during our recent mark up of the defense bill sponsored by myself and senator cotton affectionately known as the king cotton amendment that calls for unconditionalngressional repeal of the act. I think it would be helpful if you could in your capacity as secretary assuming you are confirmed to work with the administration to impress upon them the importance of this really Critical Role in readiness. I commend that to you as a suggestion. Used the term you term Disruptive Technology, and later on, you mentioned that there were 32 layers of the acquisition process. How in the world do you incorporate Disruptive Technology having to go through 32 layers of approval . Mr. Spencer it dies fairly early, probably on layer two, senator. You have to address the Behavioral Management of how we are going to think and act in our actions. If in fact you provide people the latitude to make decisions and the span of control expands and hierarchy contract, but again, you have to tie this to accountability and responsibility. Sen. King following up on the chairmans questions and his concern about this issue, i would urge you to get together with your colleagues and step back and really look at the acquisition process in a fresh way given the imperative of technological incorporation in a speedy way and think about, how do we get on a war footing when we are making destroyers one every two weeks and airplanes one every 15 minutes as we were during world war ii . How do we get a sense of urgency into this process . That, to me, i think you will be a great person to lead that given your experience. Mr. Spencer senator, my analogy i have been using in talks prior to this meeting is that we are looking at october of 1957 and sputnik has just flown over our head. The technological gap in our gaps are shrinking compared to our oneonone competitors, and we need to get a sense of urgency, get on the forward foot, and use all Resources Available to us. This is what makes this job exciting in my eyes. One of the lessons of that era, toesident kennedy have goals. Sen. King a different line of question. The you have any idea the retention rate in the navy . Loss rate is of these highly trained sailors and marines . Mr. Spencer i do not know the exact number, but i know it is of concern. Sen. King it seems to me that might be an area of rich usefulness to investigate because if we can retain someone rather than recruiting and training new people, that would dollars andxpayers retaining the expertise we need. I commend that you as an area of focus. Mr. Spencer another great area of excitement in my eyes, senator. As i stated in my Opening Statement, the Human Capital section of our budget is our most expensive and our most valuable. We have to work and extract the best practices from the private sector in areas how we can keep people to make the navy. Sen. King every pilot and mechanically can retain is what we do not have to spend 1 million to train. We talked a little bit about procurement and cost overruns. We have had hearings before this ford,g on the f35, the and other programs. One of the things that comes through is trying to build things before they are fully designed and before the design is mature and tested. We just approved a 15 ship multiyear for the ddg flight three, which we want, everybody wants. The question is, is that design fully mature . Not one has yet been built. I hope that is an area you will look at in your work. Representing the state that bills these ships, i want them built as soon as possible, but i also do not want to repeat some of the mistakes we have seen with the ford and f35. Mr. Spencer senator, on behalf of the navy, i would like to think your efforts and everyones efforts in this building for providing us an increased capacity. If you would allow me the time to get up to speed on the direct issue at hand, i look forward to coming back to you with a granular answer. Sen. King thank you. Thank you very much, mr. Chairman. Thank you mr. Chair. Thank you mr. Spencer for joining us today. I would like to start by just asking you some simple yes or no questions if i may. Do you commit to cutting waste was spending in making it a priority . Mr. Spencer yes. The you commit to working with me on military Sexual Assault and retaliation in the navy and marine corps . Mr. Spencer most definitely. We provide me advance notice should changes to the policies be considered . Mr. Spencer i will. The eucharist to have an unbinding approach to the process . Mr. Spencer i do. Thank you very much. I appreciate the fact that you took some time last month to sit the and visit with me about needs of the navy in the marine corps. One thing i was very encouraged about is the fact that you said, in order to move the needle, we are going to have to person fire a little bit. I d to perspire a little bit. I do not want to speak for other members, but i think on this committee we are ready to perspire a little bit and get things moving. If you could, if you are confirmed, how do you envision the departments relationship with congress, and what is your plan to enhance the relationship, and how do we Work Together to move that needle . Mr. Spencer senator, from the time i left the mari