The ongoing transformation of the post-Cold War U.S. Navy into a forward-deployed force that is manned, trained, and equipped to project credible combat power around the world results from many factors. Key among them is the evolution of major support organizations, including the Naval Sea Systems Command (NAVSEA).

Secretary of Defense Donald H. Rumsfeld stressed--in the wake of the 11 September terrorist attacks in New York, Virginia, and Pennsylvania--that the military requirements of fighting the war against global terrorism add a "sense of impetus and urgency" to the process of transformation. New and more advanced platforms and weapon systems may be the most apparent manifestation of a transformed force, but many of the more fundamental changes that facilitate the transformation process are found in the support organizations and procedures that guide the acquisition-and-modernization process.

Ongoing Transformation

"When people ask me what the Navy is doing to transform itself ... my answer is that we have been transforming for 10 years," Paul A. Schneider, the principal deputy assistant secretary of the Navy for research, development, and acquisition, told Sea Power during an interview at his Pentagon office. "We are not the same Navy that we were 10 years ago from an organizational [standpoint]; I think we are really better positioned to support the fleet."

From 1994 to 1998 Schneider served as the executive director and senior civilian at NAVSEA, the largest single organization in the Navy's acquisition and fleet-maintenance community. Working in collaboration with its affiliated program executive officers and program managers, NAVSEA supports the design, development, production, and in-service maintenance and modernization of the Navy's more than 300 ships and their weapon systems. During the 1990s, NAVSEA was restructured from an organization numbering almost 130,000 people to one staffed by fewer than 50,000 today. The command manages a workload valued at more than $44 million contract dollars per employee.

Vice Adm. George P. Nanos Jr., NAVSEA commander since 1998, has continued a process of rebirth for the Navy's largest systems command that started in 1994 under the leadership of then-commander Vice Adm. George R. Sterner (known for his simple description of NAVSEA's mission as "We Are Ships").

Although NAVSEA can trace its functional origins to the first five naval shipyards of the 18th-century Navy, today's organization was born during the Cold War from the unification of many disparate shore organizations whose collective mission was to support the acquisition of a U.S. fleet opposing the Soviet Navy.

Nanos commented that the process of rebirth for the 21st-century version of NAVSEA must result in the right balance between long-term fleet support (at continuing high operational tempos) with the need to develop transformational capabilities that will enable the success of tomorrow's aircraft carrier battle groups, amphibious ready groups, and submarine forces.

"That is the sine qua non of our naval service: We are available to the national command authority wherever there is a problem, and we operate forward," Nanos told Sea Power during an interview at his Washington D.C. Navy Yard headquarters. The challenge posed by CNO (Chief of Naval Operations) Adm. Vern Clark "that we are all shouldering," Nanos said, "is ... having the right amount of naval forces forward deployed and having all the right systems and other capabilities that are required for them to be successful and to stay there."

Mountains to Climb

The process of transformation at NAVSEA, which will facilitate transformation for the rest of the Navy, is not yet finished. "We are probably two to three years or so from being able to sit back and say that we have finished the transformation of NAVSEA," Nanos said. "I think by that time we will have new mountains to climb and hills to cross."

The mountains NAVSEA must climb today still remain fairly high. As the Navy's pace of operations in the war against global terrorism is accelerating, it must continue its transformation simultaneously. With more than a third of the fleet forward-deployed and underway on any given day, NAVSEA and the other systems commands are going to be hard-pressed to keep up with their customers' requirements, said Rear Adm. Philip M. Balisle, director of the Navy staff's Surface Warfare Division.

During a surface-warfare career that includes several major at-sea commands, Balisle also served as vice commander at NAVSEA. He has seen the command's activity from both sides of his desk--as a service-provider at NAVSEA and as a customer in the fleet. Balisle said that NAVSEA must become "extraordinarily collaborative" working with the fleet to determine customer needs--requirements that the fleet customer may not yet fully understand. While the next few years may see force transformation settling into a more clearly defined process, Balisle said there might be no particular end-state. This will require the armed forces to redefine themselves and their requirements on a continuing basis.

This is not a new environment for the Navy, but it does impose special requirements on the systems commands. "We are in continuous transformation," Balisle said. "In that arena NAVSEA, to be responsive to the customer, is going to have to be very quick on its feet. Disciplined engineering organizations, by their very nature, tend to be a bit methodical. NAVSEA has to change its culture a bit so it can stay on a timeline on which the customer has to operate."

Cultural Change

Cultural change at the heart of NAVSEA's renaissance is leading to an improved ability to be more timely and responsive in the command's support of both the acquisition community ashore and the fleet at sea. The first step toward such change at the systems-command level entailed the steady adoption of world-class business practices, which in turn facilitates the kind of responsiveness to customer requirements needed if the acquisition community is to support the materiel transformation of the service properly.

One element of cultural change at NAVSEA has been the introduction, where appropriate, of private-sector process-control techniques. NAVSEA has developed its own "Enterprise Resource Program" (ERP) software, not unlike that used by commercial firms, to manage fleet maintenance. NAVSEA officials say that the command intends--at the organizational, intermediate, and depot levels--to introduce ERP software to provide a single set of "rules and tools" to Sailors wherever they are performing maintenance tasks. The goal is to ensure the result is the fleet-wide adoption and standardization of common processes and procedures, rather than fleet-unique or depot-unique ways of doing business.

The ERP also will migrate the configuration data for all Navy ships into a Navy-wide database. Maintaining accurate ship-configuration data--a record of the systems and support equipment installed on a ship throughout her service life--is considered the key to the Navy's ability to maintain its ships and systems, especially during six-month forward deployments around the world.

NAVSEA plans the first application of ERP business software by the end of May or June 2002 at the Ship Intermediate Maintenance Activity (SIMA) in Norfolk, Va. Ultimately, that ERP application will be standard aboard ship and at every SIMA and public shipyard across the Navy. "It is a massive undertaking," Nanos said. "When we are finished it will be the largest instance of this type of software anywhere in the world.

"It will really unify all fleet maintenance," he continued. "It will give us the metrics and the ability to understand what's working and what is not working at a level we have never had before."

The idea of introducing proven civilian ways of doing business into the systems command environment is not out of character for the Navy. Building the foundation for naval technological and organizational transformation, while at the same time providing high-quality support for deployed forces that is competitive with the private sector, means that NAVSEA--like its sister organizations, the Naval Air Systems Command (NAVAIR), the Space and Naval Warfare Systems Command (SPAWAR), and the Naval Supply Systems Command (NAVSUP)--is operating under the same pressures felt by major private corporations.

Many people do not yet realize how similar NAVSEA and the other systems commands are to their civilian counterparts, Schneider said. Much of NAVSEA's maintenance-and-modernization work is funded through the Navy's working capital fund--a fund established by the Department of Defense (DOD) for each of the military services to draw upon to pay for the supplies, materials, and labor used during refits, upgrades, and overhauls. Just as businesses are not supposed to lose money for their shareholders, NAVSEA must manage its labor rates, supply costs, and facilities' overhead expenses so that its charges to fleet customers remain competitive with private shipyards.

It also must balance its books--or risk losing fleet business and its funding support.

The incentive for NAVSEA and the other systems commands to provide cost-effective and quality service is that the Navy's fleet commanders--the key customer base for NAVSEA--have the option of going to an outside contractor or private shipyard for a given service if they are not satisfied with the Navy's in-house repair work.

"Some people think that they [the systems commands] just receive a lot of money and nobody knows what happens to it, and that could not be further from the truth," Schneider said. All Navy industrially funded activities are required to track and report their performance. The reports are based on such parameters as the cost and scheduled completion of overhauls, maintenance, or upgrades. Such metrics are regularly reviewed at each systems command and by the Navy staff in the Pentagon.

A Focus on Customers

Renaissance at NAVSEA also has meant overcoming the limitations that grew out of the organization's Cold War genesis. Nanos acknowledges that NAVSEA and its predecessor organizations made major contributions to the Cold War victory of the United States and its allies. However, he--and other senior officials at the command, in the fleet, and on the Navy's "OPNAV" staff (the office of the chief of naval operations) in the Pentagon--have been working to overcome some of the negative vestiges of a service organization that may have become too large and too geographically dispersed during the Cold War to meet 21st-century customer expectations.

In the past, NAVSEA's four public naval shipyards were a periodic source of dissatisfaction in the fleet. Some yards developed a reputation for completing overhauls and repairs behind schedule and/or over budget. Nanos acknowledges that there had been some problems at the shipyards in the past, but he maintains that years of steady effort have created a more efficient operation able to provide quality service of which the Navy can be proud.

"What I have told the CNO is that we have what is probably the highest level of performance that we have ever seen in our naval shipyards right now, and I feel good about it," Nanos said. "We have the strongest team in our naval shipyards that we have ever seen."

At a time when, because of the greatly reduced level of naval shipbuilding, commercial U.S. private shipyards face an enormously challenging business outlook, some observers have been asking why the Navy should continue to operate four shipyards of its own. While the next round of base realignments and closures will undoubtedly consider the various issues involved, the implicit national-security mandate to preserve an assured level of "mission-essential" government-owned ship repair-and-modernization capabilities is an important industrial-base consideration. Also, highly efficient public yards introduce desirable competition into the ship-repair business, resulting in greater cost savings for the Navy and, therefore, for U.S. taxpayers.

Nanos's goal for the shipyards, in particular, is summarized by a slogan NAVSEA has adopted: "Nuclear Quality at Commercial Prices." Sustaining a high level of performance at the Navy's four remaining yards--in Norfolk, Va.; Kittery, Maine; Puget Sound, Wash.; and Pearl Harbor, Hawaii--will require substantial effort. However, NAVSEA boasts that during the past decade its shipyards have had zero cost growth in overhead, below inflation. Such rigorous cost control is consistent with the strategy of changing the culture among NAVSEA field activities so they become more competitive with the private sector.

The Norfolk Naval Shipyard recently demonstrated world-class performance during the first six-month shipyard availability for the nuclear-powered aircraft carrier USS Harry S. Truman. The Navy's most modern carrier, commissioned in July 1998, completed her overhaul on 26 February--ahead of schedule and under budget. The shipyard reported savings of approximately $10 million in the $110 million originally budgeted for repairs and system upgrades during the overhaul.

"We had certain goals entering this availability," said Capt. David Logsdon, the ship's commanding officer, "and I am pleased to see that we met or exceeded all of them."

"I believe right now my naval shipyards, particularly my two largest [the Norfolk and Puget Sound Naval Shipyards], can go blow-for-blow and beat, on cost and quality, any other organization of the type in the country," Nanos said.

Voting With Their Feet

Even at those activities where the Navy maintains skill sets that are not mirrored in the private sector, Nanos noted, there is a continuing incentive to outperform--e.g., in cost and/or quality of work--civilian laboratories or industrial facilities. For the most part, the Navy fleet's commanders have "voted with their feet" and shown a loyalty to NAVSEA and its activities--a loyalty Nanos attributes to customer satisfaction.

That satisfaction seems to extend outside the Navy. Other DOD organizations have used NAVSEA's warfare centers to support their needs in fighting the present war against global terrorism. One example is the BLU-118 thermobaric weapon used by the U.S. Air Force against cave targets in Afghanistan. The explosives that power the BLU-118 warhead were developed at NAVSEA's Naval Surface Warfare Center Division in Indian Head, Md.

"It was NAVSEA Indian Head that put the punch in that weapon because they are probably the strongest propellant- and explosive-development house in the country," Nanos said.

Other NAVSEA-resident skill sets are found in such Navy-unique mission capabilities as the maintenance of naval nuclear-propulsion systems. Here, too, however, the cultural change is underway to improve the "competitive" edge and maintain an affordable service.

NAVSEA's nuclear propulsion support facilities are centers of skill sets for which there are few civilian counterparts. The General Dynamics Electric Boat Division in Groton, Conn., and the Northrop Grumman Ship Systems Sector, Newport News Shipbuilding, Va., are the only two U.S. private-sector shipyards capable of building and maintaining naval nuclear reactors. But the naval shipyards have long been the focal point for the overhaul work associated with the Navy's nuclear-powered submarine force.

One of the biggest challenges Nanos faced after taking over at NAVSEA was the looming workload in the overhaul of nuclear-powered submarines (SSNs). The Los Angeles class of SSNs is approaching the time when large numbers of reactors need to be refueled, he noted. In 1998, the Navy had just completed a series of eleven major submarine refueling overhauls or depot maintenance; an estimated 35 additional ship-availability periods are expected over the next seven years.

"The last time the Navy did that level of submarine refueling overhauls and depot-maintenance repair it was not a shining example--let's put it that way," Nanos said. "Today, we are at peak workload; we have roughly one fifth of the submarine force in an availability, and I am happy to say that our measurements show we are currently under budget and ahead of schedule on those availability periods."

With each succeeding submarine availability, NAVSEA hopes to drive down the time that a ship must remain out of service. Typically, refueling overhauls last between 24 months and 28 months; depot-maintenance periods are from 14-to-16 months duration, or longer. NAVSEA's goal is to reduce the length of submarine refueling overhauls to 20 months, and to drop depot-maintenance periods to 11 months.

Leveraging Investments

Other evidence of NAVSEA's rebirth as a customer-oriented and competitive 21st-century organization include its success in leveraging previous Navy investments in shore engineering-and-testing facilities to develop innovative concepts, such as the Distributed Engineering Plant (DEP), which links geographically dispersed shore-support facilities with ships to permit rigorous simulation and testing aimed at ensuring the interoperability of all deploying aircraft carrier battle groups.

NAVSEA, in collaboration with the other systems commands and the fleet commanders in chief, also performed yeoman service for the Navy by fostering the so-called "D-30" process, Balisle said. D-30, or "deployment minus 30 months," is the process by which NAVSEA manages the systems upgrades of a battle group's ships when they prepare for deployment.

As a ship is worked up for deployment and taken through various maintenance and training regimens, D-30 helps to ensure that the numerous "moving parts" involved "come together in a coherent way," Balisle said. The intent is to add discipline to the work-up process, ensuring that work is done in a timely manner and that cost growth is controlled.

For NAVSEA, Nanos added, the message from D-30 and other successes is clear: to be responsive to the fleet customer's needs, to adhere to best-business practices, and to maintain discipline in how the command tackles a systems upgrade or modernization program. To achieve these goals NAVSEA must ensure that configuration-control procedures are followed when new or upgraded systems are installed on ships, and also must provide continuing logistics support and training--key considerations during the history of the platform's life cycle, Nanos said.

These efforts, in turn, will enable the Navy to sustain its ongoing transformation into the more capable fighting force demanded by the uncharted national-security environment of the 21st century--sustaining the flexibility, innovation, and growing capabilities that have been the U.S. Navy's hallmark.

"This has been an exceptional journey during the past four years," Nanos summarized, "and one that will continue into the future. That is how we will keep America's Navy 'number one' in the world."