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These changes can’t come soon enough. As our platforms continue to become more technologically advanced and missions become more complex, our need for talented, qualified recruits will grow. Further, the competition for that talent grows more intense every day. This budget keeps us on a good path. Our Sailor 2025 program is a dynamic set of initiatives, process improvements and management tools designed to increase career choice and flexibility, provide advanced, tailored learning, and expand support to our Navy families. In FY 2017, we begin to fully invest in the Sailor 2025 Ready Relevant Learning initiative, which will begin to create a new way of training our Sailors through mobile, modular learning, re-engineered content, and an improved IT infrastructure.

In this budget, we fund a wide range of initiatives to strengthen our Sailors individually and as a team. The Design highlights the importance of our core values of honor, courage and commitment, as demonstrated through four core attributes - integrity, accountability, initiative, and toughness. We are implementing a strategy, headed up by our 21st Century Sailor Office, to inculcate these attributes throughout the fleet and improve Sailor readiness and resilience. We continue to further develop a climate of dignity and respect throughout the Fleet. We also look to eliminate the toxic behaviors that destroy the fabric of the team - including sexual harassment and assault, hazing and alcohol abuse. We have increased funding over the FYDP to address sexual assault prevention and response, adding 24 new positions to the Naval Criminal Investigative Service -- on top of 127 additions in the previous two years -- to speed investigations while continuing our support for programs aimed at prevention, investigation, accountability, and support for survivors such as the Victim Legal Counsel Program.

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One of my observations since taking office is that we can do more to increase the synergy between our military and civilian workforces. Your Navy civilians are integral to all that we do. They work in our shipyards and aviation depots, provide scientific and technical expertise in our labs, and guard our bases and other facilities. To respond to increasing security concerns, we have invested this year in increased force protection measures, including in those civilians who keep our people and property safe. Some of the maintenance and readiness shortfalls we are still digging out from were made worse by civilian hiring and overtime freezes and a furlough in FY 2013. Worse, these actions strained the trust within our team. This budget adds a net of over 1,300 civilian positions in FY 2017 to support additional maintenance, enhance security, and operate our support ships, and continues the investments in our civilian shipmates that help to forge one seamless team. Even as we implement these key initiatives to address security and to recover readiness, we balance that growth with reductions over the FYDP of 3,200 FTE (1.8%), for a net reduction of 1,900.

Strengthen Naval Power at and From the Sea

That team, with our Marine Corps partners, is committed to our mission, which must be conducted in the environment I described above. The Design calls for us to strengthen naval power at and from the sea to address the growing scale, congestion, and challenge in the maritime domain. The Ohio Replacement Program (ORP) is paramount to that effort, and remains our top priority. In my opinion, it is foundational to our survival as a nation. This budget funds the ORP; construction is planned to start in FY 2021.

This start date is vitally important to prevent any impact to continuous at-sea deterrence at a time when it could be even more relevant than today.

9 To the maximum extent possible, we have also prioritized shipbuilding and the industrial base that supports it. Our current fleet of 272 ships is too small to meet the array of mission requirements our nation demands. In this budget, we remain on a path to achieve 308 ships by 2021. This year, we are funding two advanced guided missile destroyers with upgraded radars (DDG Flight IIIs with SPY-6), two Virginia-class attack submarines, two Littoral Combat Ships, and the procurement of an amphibious assault ship replacement (LHA(R)). The Ford carrier remains under its cost cap and will deliver in 2016; we are continuing to exercise strong oversight and discipline to ensure the cost of her sister ships Kennedy and Enterprise also remain under budget. And we have exceeded our shipyard investment goal - we’re at 8.1 percent, well beyond the 6 percent legislative requirement.

As the Design emphasizes, we are fully committed to further ingraining information warfare into our routine operations. This is essential to the Navy’s future. For example, we are increasing procurement of the Surface Electronic Warfare Improvement Program (SEWIP) Block II and III by 45 units. We are also investing in network modernization afloat and ashore through 10 installations of the Consolidated Afloat Networks and Enterprise Services (CANES) system in FY 2017.

To help remediate one of our most stressed areas, we have enhanced our investments in the naval aviation enterprise. We are investing in bringing fifth generation aircraft to the fleet, adding ten F-35Cs over the FYDP. We are also replacing F-18 airframes that are meeting the end of their projected service lives faster than projected, adding 16F/AE/Fs over the next two years. Further, we are adding upgrades to the Super Hornet to make it more capable in a high-end fight. And we are updating our strategy to more rapidly integrate unmanned aerial vehicles into our future air wing. Revisions to our unmanned carrier-launched airborne surveillance and strike (UCLASS) program will help us to meet current mission shortfalls in carrier-based surveillance and aerial refueling capacity, and better inform us about the feasibility of future additional capabilities we desire.

To meet an increasingly lethal threat, this budget bolsters our investments in advanced weapons across the FYDP. We are buying 100 additional tactical Tomahawks, 79 more 10 air-to-air AMRAAM missiles, additional sea-skimming targets, and accelerating our investments in SM-6 missile development in order to provide a full range of capability enhancements to the fleet. However, budget pressures also caused us to cut other weapons investments such as the Mk-48 torpedo and AIM-9X air-to-air missile. Many of our production lines are at minimum sustaining rates, and the low weapons inventory is a continuing concern.

Achieve High Velocity Learning at Every Level All of these investments will deliver important capabilities to better posture us for the current and future environment. But, as or more importantly, we must also adjust our behavior if we are to keep pace with the accelerating world around us.

This budget reflects some of that increase in pace. We are changing how we approach training and education to take advantage of new tools and to push learning out to where our Sailors spend the bulk of their time -- their units. The intent is not to burden those units more, but to empower their leaders and give Sailors the best tools to support what science is increasingly revealing about how people learn most effectively.

It also means that Navy leaders, up to and including me as the CNO, must exercise full ownership of how we develop and acquire new capabilities for the future. That ownership has four elements: authority, responsibility, accountability, and technical expertise. I am committed to exercising that ownership, and to creating or supporting new ways to exercise it faster.

We are doubling down on an approach that relies more heavily on experimentation and prototyping, connected at the hip with the Fleet, to help meet mission needs while simultaneously helping us to better define our requirements. We are pulling our more ambitious projects closer to the present so we can learn our way forward, faster and with better information. We are taking this approach with the Remote Minehunting System, Large Displacement Unmanned Undersea Vehicle (LDUUV), and UCLASS programs, and we will continue to seek additional programs to which it can be applied.

11 We are also reexamining our processes and organization to ensure they are best aligned to support a faster pace. This budget includes a small amount of funding for the Rapid Prototyping, Experimentation, and Demonstration initiative, a process we have already begun to implement that “swarms” technical experts to Fleet problems, rapidly generates operational prototypes, and gets them into the hands of Sailors and Marines so we can continue to refine and improve them. We also are standing up a capability along the lines of the Air Force’s Rapid Capabilities Office; we’ll call it the Maritime Accelerated Capabilities Office (MACO). This will concentrate requirements, technical, and acquisition expertise on high-priority projects to fast-track their development and fielding.

Finally, Congress has rightly pressed us to reexamine whether we are being as efficient as we can be. Our budget reflects some of the efforts that we are taking in that regard, but fundamentally, we are focused on making every dollar count. I am taking a personal role in that process, asking hard questions and pushing us to become more costeffective and agile as we apply a learning-based approach to all that we do.


This year’s budget request represents a portfolio of investments that employ our available resources to best effect. The gap between our responsibilities and our funding levels represents risk -- risk of Sailors’ lives lost, of a weakened deterrent, of a slower response to crisis or conflict, of greater financial cost, of uncertainty for our international partners -- all of which affect the security and prosperity of America. While it is impossible to quantify this risk precisely, I believe the balance reflected in this proposal improves our prospects going forward.

Such improvements are much needed. Concurrent with increasing global challenges, budget pressures have led the Navy to reduce our purchases of weapons and aircraft, slow needed modernization, and forego upgrades to all but the most critical infrastructure. At the same time, maintenance and training backlogs -- resulting from continued high operational tempo and exacerbated by sequestration in 2013 -- have delayed preparation for deployments, which in turn has forced us to extend units 12 already at sea. Since 2013, eight carrier strike groups, four amphibious readiness groups, and twelve destroyers have deployed for eight months or longer. The length of these deployments itself takes a toll on our people and the sustainability and service lives of our equipment. Further, these extensions are often difficult to anticipate. The associated uncertainty is even harder on Sailors, Marines, and their families and wreaks havoc on maintenance schedules, complicating our recovery still further.

We cannot continue to manage the risks we face absent broader change. As CNO, I will strive to keep the U.S. Navy on the road to remaining a force that produces leaders and teams who learn and adapt to achieve maximum possible performance. We will achieve and maintain high standards to be ready for decisive operations and if necessary, to prevail in combat. We will fight for every inch of advantage. In this way, we will provide sufficient, credible, options to leadership in order to guarantee America’s security and prosperity now and into the future. I very much look forward to working with you and your fellow Members of Congress as we proceed.


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