The National Military Strategy specifies three tasks for the armed forces:

Forward-deployed naval forces are engaged around the world on a daily basis to accomplish each of these tasks. The Navy-Marine Corps team answered the nation’s call in 1997, from continued support of international operations in the Arabian Gulf and Adriatic Sea, protecting American citizens during noncombatant evacuations in Albania, Sierra Leone, and the Democratic Republic of the Congo, to humanitarian assistance during disasters such as the recovery operations associated with the crash of Korean airliner KAL 801 in Guam. Carrier battle groups and amphibious ready groups with embarked Marine expeditionary units provide the National Command Authorities (NCA) with a rapid, flexible response capability across the spectrum of operations. In the future, the nation’s fundamental strategic values will flow from the ability to sail unfettered throughout the world, to shape and respond using naval forces, as required, without restriction—anytime, anywhere.

Peacetime engagement is a traditional role for the Navy and Marine Corps, and is a primary means of shaping the international environment. It projects American influence and power abroad in ways that promote regional economic and political stability, which in turn serves as a foundation for prosperity. Forward-deployed, combat ready naval forces remain continually engaged as an active and visible tool of U.S. foreign policy. The potent power projection capabilities of carrier battle groups and amphibious ready groups constitute a rapid and credible deterrent to potential aggressors.

These same naval forces reassure allies of the United States’ commitment to regional peace and stability. Routine exercises with allied forces build and enhance coalition interoperability. Additionally, port visits provide an opportunity to demonstrate goodwill toward local communities, further promoting democratic ideals. Consequently, significant resources are committed to achieving these vital requirements. Every day of the year, nearly one-third of the Navy and Marine Corps operational forces—more than 50,000 Sailors and Marines and 100 ships—are deployed around the world. Naval forces provide near-continuous presence in four major regions: the Mediterranean Sea, the Arabian Gulf/Indian Ocean, the Western Pacific, and the Caribbean. In Japan, regional stability is anchored with the forward-stationed Independence (CV 62) Carrier Battle Group, Belleau Wood (LHA 3) Amphibious Ready Group, and Third Marine Expeditionary Force (III MEF). Closer to home, the Navy’s Western Hemisphere Group is shaping the environment by strengthening the bonds to Caribbean and Latin American allies. Each of these strategically important forward locations provides a launching point for quick reaction by naval forces to crises virtually anywhere.

One of the most important products of shaping the international security environment is deterrence. The stark reality is that nuclear weapons are deployed as a threat to United States national interests. Efforts to discourage the proliferation and use of these, as well as other weapons of mass destruction, will continue unabated. In the interim, the United States must maintain a credible nuclear deterrent capability. The nation’s ballistic missile submarine (SSBN) fleet is a key component of the overall nuclear deterrent posture. The reliability and security of SSBN command and control systems and the accuracy and flexibility of their weapons combine to convince any adversary’s leadership that seeking a nuclear advantage, or even parity, would be futile. Stealth and mobility make this force the most survivable element of the strategic nuclear triad.

Deterrence is not limited to weapons of mass destruction. Combat-ready forces also provide the foundation for conventional deterrence. Forward-deployed naval forces deter potential aggressors by offering a clear indication that aggressive action will not be tolerated and cannot succeed. The demonstrated ability to fight and win and a firm resolve to respond rapidly to developing crises provide credibility and effectiveness to deterrence efforts. Should deterrence fail, these actions set the stage for future operations, if military force is required. The total capability of U.S. armed forces is a factor in conventional deterrence. Most important, however, are the visible, forward-deployed naval expeditionary forces. Naval forces act as a sovereign extension of the nation, maneuvering in international waters, unencumbered by political motives which may inhibit or prohibit use of other forces. These forces can be unobtrusive—from beyond the horizon or from undetected submerged positions—or can bring their combat power to bear within full view of an adversary. Naval expeditionary capabilities provide the NCA with a unique range of options. Using the sea as a maneuver space, Navy and Marine Corps air, land, and sea forces comprise the NCA’s rheostat for adjusting national response to world events.

Naval forces not only shape the battlespace, they demonstrate a capability to halt aggression long before a potential opponent can achieve its objectives. While enhancing deterrence, naval forces simultaneously shift the military balance by posing numerous options in response to aggression. An adversary is forced to consider multiple responses, injecting uncertainty into planning, disrupting his ability to execute a coherent campaign, and eroding confidence in the likelihood of success. Naval forces can provide security and employ unique operational and logistic capabilities to allow civil initiatives to work. The presence of naval forces in the early stages of a crisis visibly reminds the aggressor of the overwhelming capabilities that can be projected from the continental United States.

In the near future, the Navy’s emerging theater air and missile defense capabilities will be able to extend a protective shield to joint forces, friends, and allies, from the sea. The mobility of these systems, currently being developed around the existing Aegis surface fleet, is a critical force multiplier.

The ability to fight and win as a joint military team against any adversary is vital to the National Security Strategy. Throughout the joint campaign, naval forces will exploit robust command and control systems to concentrate combat power from dispersed, networked forces and project power far inland. Initial operations by swiftly responding naval forces will often halt aggression early in the conflict. In the rare case where the aggression is not immediately contained, initial operations by the Navy-Marine Corps team are critical to enabling a joint campaign. The Navy’s ability to dominate the littorals ensures sea and area control. Naval forces also can assert maritime superiority along sea lanes of communication and provide strategic sealift to transport joint and allied forces into theater. The ability to effectively counter enemy area-denial threats—with potent information warfare, power projection, and force-protection capabilities—increases the decisive impact throughout a joint campaign. When the joint campaign is over, naval forces can remain on scene for long periods to enforce sanctions and guarantee the continuation of regional stability.

Today, the Navy and Marine Corps enjoy maritime superiority around the world. In order to maintain operational primacy, the Department of the Navy must embrace change and make it an ally. Emerging technologies, concepts, and doctrine must be exploited in order to guarantee the military superiority vital to the nation’s global leadership. The Department must take advantage of the Revolutions in Military Affairs and Business Affairs to achieve its goals.

The emergence of a Revolution in Military Affairs (RMA), driven by technological advances in nearly every field, has been postulated for several years. An RMA typically occurs when new technologies combine with innovative application to achieve a quantum leap in capabilities. The Department of the Navy has a long history of combining technological change with innovative thinking. Carrier aviation, amphibious warfare, and ballistic missile submarines are vivid examples of such previous success. The Department of the Navy embarked on a similar innovative path for the 21st century with . . . From the Sea, and further refined its strategic thought with Forward . . . From the Sea. The revolution continued in the past two years with publication of the Navy’s Operating Forward . . . From the Sea, and the Marine Corps’ Operational Maneuver From the Sea. These operational concepts define how the Navy-Marine Corps team will execute their strategic concepts to maintain operational primacy into the 21st century.

No revolution in military affairs can stand alone. An RMA must include new technologies, efficient organizational structures, revised doctrine, and new programs in order to exploit revolutionary ideas. Modernization and recapitalization also are necessary to exploit fully an RMA to the fullest extent possible. These efforts require dedicated funds. A Revolution in Business Affairs can achieve cost efficiencies to support these goals. Aggressive reengineering of Navy and Marine Corps infrastructure and streamlining of support services are two methods available to accomplish this goal. Further, the Department must learn from the success of others and prepare to manage acquisition in a manner that maximizes the impact of every dollar spent. The transformation of naval forces must integrate the strengths of the Sailors, Marines, and civilians with emerging technologies. The Navy and Marine Corps will meet this challenge by incorporating technologies into advanced concepts and doctrine.

Both the Navy and the Marine Corps are moving swiftly to institutionalize the generation of innovative concepts and ideas. The Marine Corps Warfighting Laboratory and the Sea Dragon initiative created the necessary focus to experiment with new concepts and doctrine. Similarly, the Navy has conducted several at-sea Fleet Battle Experiments to examine future concepts and doctrine. The Navy will establish the Navy Warfare Concept Development Command in Newport, Rhode Island, in 1998, which will integrate talent from the Naval War College, Naval Doctrine Command, and the Strategic Studies Group. The combination will enable out-of-the-box thinking and will encourage the exploration of future naval warfare concepts.

People are the heart and soul of the Navy-Marine Corps team. Although end strength is approaching a steady-state level, further reductions will be required to implement the recommendations of the Quadrennial Defense Review (QDR). Consequently, the operational readiness of the Navy and Marine Corps depends, now more than ever, upon the ability to recruit and retain the very best men and women with the right mix of skills and experience.

Attracting the high caliber youth needed to maintain a credible future force is the focus of the Department of the Navy’s recruiting theme, which emphasizes core values of Honor, Courage, and Commitment. Although low national unemployment and an increase in college attendance created a challenging recruiting environment, 1997 proved to be a successful year for Navy and Marine Corps recruiting. Recruiting strategy focused on attracting highly qualified individuals for particular skills in the Fleet and Fleet Marine Forces. Through targeted marketing, Navy and Marine recruiters achieved 100 percent of their overall enlisted recruiting and officer accession goals in 1997. In addition, the academic quality of enlisted recruits remains high.

Maintaining a quality recruiting force has been key to these successes. The increased Special Duty Assignment Pay has given Navy and Marine Corps recruiting commands an additional incentive to retain high-caliber Sailors and Marines for recruiting duty. A number of new initiatives now are in place to improve the quality of life for recruiters and their families assigned away from major bases or stations.

Improvements were achieved in increasing minority accessions into both officer and enlisted ranks through the enhanced opportunities for minorities initiatives program. While solid progress was made for enlisted accessions, more work is needed in the area of officer accessions. In addition, the Department is exploring better ways to attain a meaningful distribution of minorities across technical and nontechnical ratings.

The Department’s ability to recruit a well-qualified and diverse civilian work force also has been enhanced through a series of coordinated recruitment programs, which have brought Navy and Marine Corps activities together with college and university students. To invest in future civilian recruitment, special residential and scholarship programs were established to acquaint outstanding high school and college students to the Department’s technical missions.

Sustaining a skilled, motivated, and ready force is the foundation for the future of the Navy-Marine Corps team. A variety of tools are utilized to retain the best and brightest Sailors and Marines. For example, the Navy and Marine Corps continue to offer a Selected Reenlistment Bonus to keep critical billets filled. Marine Corps first term re-enlistees are afforded an option to choose one of three duty stations to continue their military careers. Similarly, the Navy’s Homebasing Initiative gives families more stability by serving in a single fleet concentration area.

A stable and competitive officer corps is essential to lead the Navy and Marine Corps of the 21st century. Nuclear Officer Incentive Pay, Medical Officer Incentive Special Pay, and Aviation Continuation Pay are some of the tools that enable the Department of the Navy to retain capable, talented, and technically oriented leaders in the face of ever-increasing private sector competition. Using the authority approved in the FY 1998 National Defense Authorization Act, the Navy and Marine Corps are addressing pilot retention issues within selected warfare communities.

Adequate compensation fosters improved retention in mission critical skills, increases morale, and maintains high readiness. The newly authorized Basic Allowance for Housing will be phased in over a six-year transition period. This will provide an immense benefit for Sailors and Marines stationed in high cost, metropolitan coastal areas, and improve the lives of junior enlisted personnel.

The Naval and Marine Corps Reserve provided an unprecedented level of support during the past year. Increasingly used as a force multiplier to accomplish everyday missions, the Naval and Marine Corps Reserve is no longer just a force-in-waiting—to be called upon in the event of global war. To this end, Reserve contributory support to the active Fleet has more than doubled since 1991, to more than two million man-days of direct mission support in 1997.

The Naval Training Center in Great Lakes, Illinois, has initiated an innovative boot camp final exam, called Battle Stations, to ensure Sailors are ready to join the Fleet. New Sailors use teamwork, basic seamanship, and nautical knowledge gained during the boot camp curriculum to master seven training stations during a pre-graduation battle problem. Battle Stations uses fleet experiences to create a more challenging and relevant training regimen for the Navy’s newest Sailors.

To continue preparing junior Sailors for career success after basic recruit training, the Navy uses basic and advanced-skills schools in areas such as engineering and weapon systems. Employing electronic manuals, remote video classroom techniques, and on-board systems, the Navy is training more Sailors with greater productivity. Afloat training groups at fleet concentration areas are used to tailor training to meet the needs of individual commands. Tailored training eliminates duplication, saves time, and concentrates on correcting individual and unit weaknesses.

The Navy’s leadership continuum puts career-spanning rigor into leadership training, for both active and reserve personnel. The leadership continuum is the Navy’s vehicle for imparting leadership qualities into a program of recurring training from recruitment to retirement. Leadership training commences at accession training and is reinforced through eight courses for officer and enlisted personnel, which form the basis of the continuum.

Transformation is an ongoing and dynamic process of making Marines. It begins with first contact with the recruiter and continues throughout a Marine’s career. Nowhere is this process more definable than at recruit training. The purpose of Marine Corps recruit training is simple—to make Marines. It is a socialization process during which young men and women with differing perceptions of right and wrong, various understandings of permissible behavior, and undeveloped or unfocused thoughts of professional conduct are imbued with a common set of values and standards. This transformation from civilian to basic Marine is made possible by the common desire to become a Marine and the teaching or mentoring of a positive role model—the Drill Instructor.

The Crucible is a fifty-four hour training evolution that takes place in the eleventh week of recruit training. It is designed to be a crystallizing experience during which everything that the recruit has learned in the previous ten weeks is drawn together and brought sharply into focus. Sleep and food deprivation, physical and mental challenges, and constant operating tempo are all designed to build strength of character and a sense of self-sacrifice and teamwork. Constant reinforcement of the values of courage (both physical and mental), honor, and commitment are the hallmarks of the exercise.

The Marine Corps believes that an individual’s character is measured in four different, but related, categories of fitness—mental, physical, moral, and spiritual. To address the development of moral fitness, the Marine Corps has developed a Values Program that provides value-based training and education at every level from recruit training, through all Marine Corps schools and into every unit.

Unit cohesion is defined as the intense bonding of Marines, strengthened over time, in absolute trust, subordination of self, and an intuitive relationship in collective actions of the unit. To achieve this, the Marine Corps is beginning to form teams of Marines immediately after recruit training, to assign those teams to follow-on skill producing schools, and to subsequently assign them to operational units in the fleet. Changing from individual assignment to unit assignment is a major change, but one that will improve the combat efficiency on the battlefields of tomorrow.

The Department of the Navy Civilian Leadership Development Program identifies certain leadership competencies that commands and activities use to establish formal leadership programs. The program provides all employees with opportunities to acquire knowledge and skills that enhance their competitiveness for higher level positions. Civilian leadership development also supports the Defense Leadership and Management Program, which offers advanced leadership, executive-level skills, and professional military education.

The Department of the Navy offers every Sailor, Marine, and civilian employee equal opportunity to succeed and achieve their fullest potential regardless of ethnicity, gender, national origin, race, or religion. With strong emphasis on core values, the Department ensures that each individual is treated with dignity and respect. A recent amendment to Department regulations prohibits participation in any supremacist organization espousing discrimination based upon race, creed, color, sex, or national origin. Navy and Marine Corps focus groups report that the Department is successfully communicating core values and policies on sexual harassment and unprofessional relationships to the fleet and field.

Since 1994, women have been eligible for assignment onboard combat ships and aircraft. With the exception of submarine duty and special operations, women train and serve in every Navy community and career field. This is a direct reflection of efforts to ensure women receive assignments and opportunities which closely match those of their male counterparts. Moreover, the Women at Sea Program embarkation plan continues to expand career opportunities for women on combatants and in aviation. In FY 1998, an additional 13 ships and one carrier air wing will become gender-integrated, resulting in 98 gender-integrated ships and four gender-integrated air wings.

The Department of the Navy recognizes quality of life as a vital component in recruiting and retention. The Departmental focus is provision of an acceptable level of quality shelter, health care, and community support services to Sailors, Marines, and their families, regardless of duty station. Key elements of the quality of life program include an adequate compensation and benefits package, as well as a positive environment that provides personnel the requisite tools to reach their full potential. To this end, the Department of the Navy has established minimum quality of life standards, and is working towards consistent and professional delivery of all quality of life components.

Properly sheltering Sailors, Marines, and their families remains a core quality of life issue. New initiatives under way in family housing, bachelor quarters, and housing allowances reinforce the commitment. Erasing maintenance and repair backlogs and a deficit of suitable housing hinges on the careful use of the Military Housing Privatization Authorities, in concert with the traditional application of appropriated dollars. Changes to the housing allowance compensation system now provide allowances that more closely match actual housing costs.

Affordable, high-quality child care also is a critical quality of life requirement. Initiatives to expand availability include contracting for spaces in qualified off-base civilian centers, expanding family child care to incorporate off-base residences, enhancing resource and referral programs, school-age care partnerships, and regional contracts with local providers.

Rounding out quality of life services for Marines, Sailors, and families are community support programs, entailing individual and family support services. A full range of family support services, emphasizing basic skills for living, are available. The Marine Corps’ formal Key Volunteer Network Program and the Navy’s Ombudsman Program work at the grass roots level to assist spouses and families while the service member is deployed. In addition, the Marine Corps is implementing LINKS (lifestyle, insights, networking, knowledge, and skills) to assist new families adapt to life in the Marine Corps. These outreach efforts are an integral part of readiness and retention.

Single Sailors and Marines represent the largest category of personnel in the Department of the Navy. Typically, they live in modest accommodations. They need programs which enhance their physical and mental readiness, provide recreational opportunities, and offer meaningful and beneficial activities during off-duty hours. The single Sailor and Marine programs address these specific needs. Initiatives include safe and secure storage for personal belongings and vehicles during deployment, pier-side laundry facilities for those who live onboard ship or are deployed overseas, and quality fitness equipment.

Navy Medicine will continue to find innovative ways to provide medical and dental care as close to the worksite as possible. Pierside clinics, deployment of health care specialists with the operating forces, and new programs at recruit training activities that save valuable training time by delivering health care to trainees on-site are just the first step.

New technology enables the Navy to provide specialty medical consultation in remote areas and achieve cost and time savings by reducing the need to transport patients. It also greatly enhances the ability to provide quality health care for forward deployed operating forces and at remote medical treatment facilities. The successful telemedicine technology developed on the USS George Washington (CVN 73) is being applied to support operational medical services in other locations.

In conjunction with the Department of Defense and other Services, the Navy is working diligently to ensure TRICARE’s success. As TRICARE approaches full implementation in 1998, delivery of patient-focused, consistent health care to all beneficiaries, regardless of geographical location, remains the goal. Beneficiary education and customer-focused marketing are some of the important priorities. In addition, current legislative authority allowing the Department of Defense to proceed with the Medicare Subvention Demonstration project is encouraging. The Department of the Navy is also assessing options to improve access to medical care for Medicare-eligible beneficiaries.

Readiness remains a top priority and the fundamental gauge by which the Navy-Marine Corps team measures its ability to respond to current and future national tasking. Accordingly, readiness parameters are constantly monitored and assessed to determine the right fiscal balance among operations, modernization, and recapitalization accounts. The Department’s readiness monitoring system has proved reliable in identifying deficiencies quickly so that appropriate action can be taken. Early recognition and aggressive corrective action are required to reverse negative trends.

Readiness is not only limited to the ability to meet today’s commitment; readiness must be able to answer both near-term and long-term requirements as well. Providing the necessary tools our people need to operate both today and into the future is essential to maintaining operational primacy. The Department’s current equipment readiness remains satisfactory. In some major warfighting systems where it is cost-effective, equipment is being remanufactured or given a service-life extension to keep it operational. Other major weapon systems are substantially upgraded to provide a bridge to future systems. The F/A-18E/F Super Hornet and the remanufactured AV-8B Harrier will ensure Naval air superiority and potent strike options are maintained until the Joint Strike Fighter joins the fleet. Likewise, the retrofit of the AAV-P7 amphibious assault vehicle will keep it capable of conducting its mission until the Advanced Amphibious Assault Vehicle (AAAV) becomes operational.

The Department is also formulating innovative systems for the future that will improve long-term readiness. Even as the most modern ships in the world leave the shipyards, active research and development efforts and budget conscious procurement plans for their replacement are under way. For example, 13 more Arleigh Burke (DDG 51)-class destroyers will join the fleet in the next four years under a cost-effective multiyear procurement plan, yet we are developing an innovative DD-21 design for the next century. The Navy’s budget request includes funding for CVN-77, the last Nimitz-class carrier. Its design will make it an affordable transition carrier for a new concept, the CVX. The New Attack Submarine and the San Antonio (LPD 17)-class amphibious ship are innovative replacements for their aging predecessors and are necessary to maintain long-term readiness. The vast amount of work in research, development, and fielding of Navy theater missile defense systems is yet another example of long-term investments that are paying off today. In short, aggressive long-range planning ensures Marines and Sailors will continue to have the tools that they require, at an affordable price.

The Department is also examining innovative ideas to substantially reduce overhead costs. Smart Ship and Smart Base are initiatives to find ways to reduce personnel requirements onboard ships and bases. Similarly, innovative technologies are being evaluated to improve efficiency and reduce crew size in new ship designs such as CVX and DD-21. Striking the correct balance between current and future readiness is vital.

The explosion of new technologies has transformed the way militaries conduct warfare. Capabilities available today were not considered possible a mere decade ago. It is evident that the growth rate of these technologies will continue to accelerate. This phenomenon of rapid expansion in technology requires that the Navy and Marine Corps become experts in the innovative application of emerging technology to new and existing weapon systems. Innovation is critical in order to transform the aggregate impact of leading-edge technology into battlespace dominance. Together, the Marine Corps Warfighting Laboratory and the Navy At-Sea Battle Labs provide a venue to institutionalize innovation within the Department of the Navy.

The Marine Corps Warfighting Laboratory is the test bed to investigate new concepts and technologies within the Marine Corps. To carry out this process, a Five Year Experimentation Plan was developed. This plan, which consists of three phases, is the cornerstone document for concept-based experimentation and the introduction of science and technology into the operating forces. The first phase, called Hunter Warrior, was completed in March 1997 and examined the contribution which a Marine air-ground task force (MAGTF) could make if provided with selected conceptual and technological improvements. The remaining phases will examine MAGTF operations in the urban littoral environment.

The Chief of Naval Operations’ Fleet Battle Experiments take forward-looking programs and integrate them with innovative operational concepts. Using at-sea battle labs, these experiments will focus on future programs that align the Navy with Joint Vision 2010. In 1998, the Naval Warfare Development Command will be established in Newport, Rhode Island, to integrate talent from the Naval War College, Naval Doctrine Command, and the Strategic Studies Group. The combination will enable out-of-the-box thinking and will encourage the exploration of future naval warfare concepts.

In April 1997, the Chief of Naval Operations declared that the Navy was shifting from platform-centric to network-centric warfare. Network-centric warfare leverages information technology and integration to derive highly responsive and effective combat power from geographically dispersed but robustly netted forces. The entire force, including the supporting base structure, will be modernized with high speed multimedia information services which are fully interoperable with joint and allied systems. Network-centric warfare promises a shift from an attrition-style warfare to a much faster and more effective warfighting style characterized by speed of command.

Joint Vision 2010 highlighted the critical role information plays in the success of military operations. Increased processing power, networking capabilities, and software enhancements will have a dramatic and decisive impact on future warfighting. Under the Information Technology-21 (IT-21) concept, the Navy is building a communications and networking backbone which will support the rapid exchange of information between naval and joint platforms. New doctrine and organizations are also being developed to allow the Navy to take full advantage of these changes.

After technology and innovative concepts are identified, tested, and validated, the Department of the Navy’s acquisition process ensures technology insertion into important programs. For example, the use of composite materials reduced the weight of the F/A-18E/F Super Hornet and MV-22 Osprey by hundreds of pounds while improving crew ballistic protection. Open-system computer architecture and fiber-optic technology are critical command-and-control components of the New Attack Submarine and Land-Attack Destroyer (DD-21). The Marine Corps’ Advanced Amphibious Assault Vehicle will employ a fully retractable hydro-pneumatic suspension system which will produce land mobility equivalent to the M1A tank. The AAAV also will use a revolutionary water jet propulsion system which will allow the vehicle to exceed speeds of 20 knots while waterborne.

Technology insertion also rapidly transforms concepts to reality, especially through the use of commercial off-the-shelf (COTS) technology. For example, the application of COTS technology has been critical to the development of the Navy’s Cooperative Engagement Capability and theater ballistic missile defense systems. In another example, the four Services and the United States Special Operations Command have joined together in a joint venture focused on fielding low-cost, non-developmental, non-lethal weapons in the near term, while looking to the future of warfare and the ongoing revolution in military affairs.

The demanding environments and competitive nature of warfare necessitate that the Department be an advanced technology institution. Materials, engines, communication systems, weapons, training facilities—every technology that supports Sailors, Marines and the mission—must be cutting edge. Technology will be an important tool as the Department attempts to leverage the benefits of advanced science and technology in warfighting applications.

To ensure the required—and affordable—technology is in place when needed, the Department’s FY 1997 science and technology program continued to develop new technological capabilities. Basic research programs expand fundamental knowledge of maritime sciences and engineering, materials, and information sciences; applied research exploits and evaluates technology options for specific naval problems; advanced technology development programs demonstrate the operational capability of new technologies—as stand-alone systems and as enhancements to existing systems; and manufacturing technology programs work to ensure novel technologies can be affordably manufactured. Because technology opportunities are always richer than the resources available for pursuing them, funds were leveraged through partnerships with the other Services, government agencies, academia, and industry for many programs.

Navy and Marine Corps units train as they intend to fight. This philosophy provides both a unifying goal and a significant challenge for training and education institutions. Therefore, available resources must be focused on more effective and efficient methods of attaining and maintaining a high state of operational readiness to support warfighting operations. Just as modern weaponry has influenced warfighting, future investments in learning technology will dramatically shape the delivery of instruction in training and education institutions. The traditional approach of formal school-based and instructor-centered teaching will shift to an increasingly distributed, student-centered approach employing distance learning. This approach will enable Sailors and Marines from around the globe, both ashore and at sea, to have continual access to instructors and educators previously limited to resident students. In the near future, Sailors and Marines can expect to use the Internet and intranets, automated electronic classrooms, learning resource centers, interactive multimedia instruction, video teletraining, and embedded training to learn and master new skills.

The Department of the Navy’s Research, Development, and Acquisition Team is serving the nation by developing, acquiring, and supporting technologically superior and affordable systems for Navy, Marine Corps, joint, and allied forces. These critical goals are being achieved through strategic acquisition reforms and utilizing a range of tools, including those provided through the Federal Acquisition Streamlining Act and the Clinger-Cohen Act.

The Department of the Navy is confronting key management issues and developing tools such as Cost as an Independent Variable and Activity Based Costing to reduce total ownership costs. Acquisition specialists are inserting commercial dual-use technologies into fielded weapons systems to make operations and support costs more affordable. The Department is accelerating the move from military specifications and standards to performance-based specifications through Navy-developed software tools and the Single Plant Process initiative.

The Department of the Navy is committed to developing the fundamental infrastructure technologies that enable large distributed work teams to operate in synthetic environments to produce higher quality systems at reduced cost over shorter periods of time. The embodiment of this commitment is the Acquisition Center of Excellence (ACE). The ACE will serve as a test bed and development site for the Navy’s Simulation Based Acquisition effort, which is expected to revolutionize the design and procurement of major systems thereby providing dramatic reductions in total life cycle cost and acquisition time. The ACE facility became operational in late 1997.

The Department of the Navy’s acquisition work force provides the Fleet and Fleet Marine Forces with the tools required to fulfill its mission throughout the world. Most recently, the acquisition work force has experienced enormous manpower and budget reductions. Downsizing has been steady and controlled, accomplished largely through retirement incentives, Base Realignment and Closure actions, and organizational restructuring. At the same time, procurement has become more technologically complex and, with weapon systems modernization under way, the expectations of the Fleet even greater. To reach the planned drawdown levels by the end of FY 2003, it is imperative that the acquisition force structure be composed of the right people, with a balanced education, training, and skill mixture. To meet this challenge, the Department implemented a plan during the past year to triple the size of its Acquisition Intern Program, thus ensuring the availability of a cadre of highly-qualified individuals to fill senior acquisition positions in the 21st century.

Many acquisition reform successes reflect the Department’s bold approach and forward-looking strategy. For example, the F-14 Tomcat Aircraft Precision Strike Fighter Team demonstrated what teamwork and innovative thinking can accomplish in today’s climate of acquisition reform. Employing an industry partnership, the F-14 team developed a plan to use a targeting pod to give the F-14 a night precision-guided munitions capability. The first fully operational system was deployed 223 days after contract award, achieving initial operating capability two years ahead of the original schedule. By using commercial off-the-shelf technology, the team realized significant savings which are estimated in excess of $173 million.

In another example, the Joint Maritime Communications Systems provide a robust communications infrastructure that will meet tactical and support communications requirements. Through acquisition reform, system acquisition time was reduced from 4-7 years to less than 2 years. Using performance-based specifications and open systems architecture, one key subsystem achieved savings of 50 percent of acquisition costs and 30 percent of total life-cycle costs from previous terminals.

The Department of the Navy has been reaping the benefits from participating in international programs for decades through such key programs as the F/A-18, Joint Strike Fighter, and Evolved Sea Sparrow Missile. International sales reduce the price of equipment and ensure interoperability with NATO and other allied countries. The United States recently signed reciprocal procurement memoranda of understanding with several countries to foster a two-way street in defense trade. Cooperative development programs also enable the Department to share the research and development costs of critical acquisition programs. In addition to improving coalition warfighting capability, cooperative development programs serve to promote country-to-country cooperation on a broader scale.

Effective environmental planning to meet the requirements of environmental statutes, executive orders, and regulations is essential for facilities management, acquisition programs, and military operations. Department strategies for establishing partnerships with regulators, stabilizing funding, and reducing the cost of cleanup at active and closing bases are paying dividends. The cleanup program cost-to-complete estimate continues to show reductions.

In the area of environmental protection, the Department has made substantial progress with respect to shipboard pollution control. A solid-waste plan was developed for surface ships in order to comply with the Act to Prevent Pollution from Ships. A submarine addendum to this plan is in development. Meanwhile, the Department is partnering with the Environmental Protection Agency (EPA) and coastal states to create uniform national discharge standards for military vessels. These standards will not only advance the state-of-the-art for marine pollution control and ensure the protection of coastal waters, but will allow the Navy to transit all states’ waters unencumbered by varying discharge regulations. At shore installations, the Department continues to serve as the Department of Defense Executive Agent for Clean Air Act and Clean Water Act implementation. The Department works closely with EPA and state air pollution offices to ensure both compliance and protection of the military mission.

The Department of the Navy enters the next millennium with clear strategic visions and the capacity to fully support the nation’s national security interests. The challenge is to sustain this capacity while transforming into the strategic force of the future. To preserve our naval forces’ operational primacy with diminished resources, the Department must attain the correct balance of investments in people, readiness, technology, force structure, and modernization.

The Department of the Navy has charted a course to lead the nation into the 21st century. As we face an uncertain global environment, our naval forces, with the world’s finest Sailors and Marines, will continue to be key to implementing our National Security Strategy. In the future, our fundamental strategic values will flow from our ability to sail unfettered throughout the world, to shape and respond using naval forces as required, without restriction—anytime, anywhere.

/signed/ John H. Dalton Secretary of the Navy