will still be in service 30 to 50 years from now. Many of the airplanes that Navy and Marine Corps pilots will need a decade from now are already on the assembly line. Fundamental changes in the naval force structure cannot happen overnight. Careful and prudent long-range planning was the key to the military's ability to succeed in Desert Storm--just as it will be the key to America's ability to succeed in a Desert Storm 10 or 20 years from now.

New force structure planning must be complemented by changes in operational doctrine. For example, naval commanders in the Mediterranean are adjusting the composition of their task forces. Their new Maritime Action Groups are compensating for reduced overall force levels by capitalizing on the firepower of surface ships and submarines equipped with Tomahawk cruise missiles, and by exploiting the power projection capabilities of multi-purpose amphibious assault ships. These flexible and responsive forces have succeeded in stretching the increasingly limited availability of naval assets.

The Department of the Navy has established clear priorities in its budgeting strategy as it balances its obligation to meet future force structure requirements against its responsibility to be frugal with the Nation's resources. The principal focus of the Department's budget will be on the readiness of the nation's naval forces--that is, their ability at any moment to wage prompt and sustained military operations at sea or ashore wherever they may be required. Readiness encompasses everything needed to support the daily operations of our ships, battalions, and squadrons--including fuel, spare parts, maintenance, training, ordnance, and infrastructure. It also includes personnel issues such as pay, medical services, quality of life, family support, and the recruitment of top-quality men and women. To neglect readiness is to create a "hollow force" that is recognized by friends and adversaries alike as dangerously ineffective.

Although readiness is its first spending priority, the Department of the Navy must also support procurement for long-term replacement of weapons and platforms, as well as ongoing modernization initiatives for maintaining technological superiority. The Navy and Marine Corps will invest in modernization only when the additional cost will produce a significant and necessary enhancement of warfighting capability. They will also seek to achieve savings by matching sustainability goals--i.e. the inventories of on-hand warfighting supplies and ammunition--to the levels required for regional contingencies.

Most importantly, any decisions on future force reductions must carefully balance cost against risk. The Nation must achieve a consensus on what capabilities it wishes to retain, and it must understand that--all else being equal --the ability of naval forces to influence events, to defend overseas interests, and to respond to regional crises may deteriorate too quickly if forces are reduced below those levels prescribed in the Chairman of the Joint Chiefs of Staff's Base Force.

The post-Cold War naval strategy of expeditionary power projection has called for a fundamentally new look at the Navy and Marine Corps future force structures. The Department of the Navy has begun that look in its Naval Force Capabilities Planning Effort (NFCPE). The NFCPE--involving top naval leaders and the staffs of the Secretary, Chief of Naval Operations, and Commandant of the Marine Corps--is studying the expected role of naval forces in national policy over the next 20 years and will establish a comprehensive plan for fulfilling that role. The NFCPE is expected to be completed later this year.

• AIRCRAFT CARRIER TOTALS INCLUDE CVNs/CVS IN MAINTENANCE, BUT EXCLUDE THE TRAINING CARRIER (AVT). • ATTACK SUBMARINE TOTALS INCLUGE TWO SPECIAL OPERATIONS FORCES CONFIGURED SSNs.

• SURFACE COMBATANT TOTALS EXCLUDE EIGHT INNOVATIVE NAVAL RESERVE CONCEPT FFT-1052 CLASS SHIPS.

The Critical Elements

Personnel

Today's Navy and Marine Corps personnel are ambitious, committed to excellence, well-trained, and willing to sacrifice. They are among the finest young men and women in America, and they deserve rewarding career opportunities and adequate pay and benefits. No single factor is more important to the readiness of naval forces than the quality of life of Navy and Marine Corps people and their families. Quality medical, religious, and legal services; family and bachelor housing, morale/welfare/recreation services; family support; and child care are all crucial to the well-being--and hence the readiness--of United States Sailors and Marines.

As they get smaller, both the Navy and Marine Corps will match personnel reductions to reductions in the numbers of ships, aircraft squadrons, and battalions. Both services will strive to retain high-quality, experienced personnel; maintain advancement opportunities; improve the quality of training, and reduce overall manpower costs.

The Navy and Marine Corps have developed a carefully structured plan to bring down the numbers of active duty personnel with minimum disruption to their professional and personal lives. Begun over a year ago, the plan relies on reduced recruiting, normal attrition, higher retention standards, and incentives for early retirement in specified career fields. These reductions were underway during Operation Desert Storm, and reservists were relied on to augment areas of temporary shortfall. Consequently, the Navy and Marine Corps will endeavor to reduce military personnel without necessarily resorting to reductions in force. Only a small number of officers and senior enlisted personnel with over twenty years of

active service will be affected by involuntary retirements. The Department will be able to maintain this policy as long as reductions are held to current drawdown rates.

Even as the Navy and Marine Corps downsize, however, they must still retain proven professionals. Retention is now at an all-time high, with many of the best people choosing to pursue a military career. The Navy and Marine Corps will reduce overall numbers of personnel primarily through attrition, retention controls, and reduced accessions. Reenlistments will be more competitive. Personnel in ratings that are over-manned will have the opportunity to reenlist if they have the right qualifications and are willing to re-train into skills that are not adequately manned. Additionally, Sailors and Marines who transition to civilian life will receive financial planning, employment, transition, and relocation assistance.

Smaller, more technology-oriented forces of the future will require that both the Navy and Marine Corps continue investing in high-quality recruits. To meet recruiting goals, the naval services must maintain a solid corps of recruiters and provide resources for recruiting and advertising, including national advertising funds.

Training and education will be critical in the 1990s. Well-trained professionals provide a valuable payoff in a fiscally-constrained environment. As the nature and technology of military operations change, the professionalism of our Sailors and Marines remains the ultimate force multiplier.

Remaining inequities in pay and compensation need to be corrected. Military pay raises have consistently lagged behind the wage growth of the private sector. The Department of the Navy strongly endorses the 3.7 percent pay raise contained in the budget.

Reservists and retirees are an important part of the Department of the Navy's total force. Not only are they available for recall to active duty, they also frequently serve as volunteers in the support net for naval commands and communities. The Department will continue to ensure that its retirees receive the rights, benefits, and privileges to which their faithful service entitles them.

Civilians are strategically placed in our planning and supporting establishment so that more Sailors and Marines are available to serve in the operating forces. The performance of this supporting establishment during the past months has clearly demonstrated the skill and professionalism of the Department of the Navy's civilian force.

Research and Development (R&D)

A robust science and technology program is one of our key hedges against an uncertain future. The Department of the Navy's R&D focus will remain on high payoff areas such as technologies that enhance power projection, command and control systems, and night-fighting capabilities.

Basic research programs that support the Navy and Marine Corps include programs in ocean sciences, advanced materials, information sciences, and other related fields.

The Department of the Navy has increased R&D emphasis on mine countermeasures, shallow water anti-submarine warfare, ship self-defense, and human factors related to tactical decision-making under stress. Other exploratory development programs include advanced materials and the application of highperformance computers to Navy and Marine Corps problems.

The Department of the Navy is encouraging direct industry involvement in advanced technology demonstration opportunities. It is also encouraging industryNavy partnerships and is instituting cooperative exchange educational programs for naval engineers and their industry counterparts.

Acquisition

The Navy and Marine Corps will stress capabilities while balancing affordability, cost effectiveness, and efficiency in all new development programs. The Department of the Navy is streamlining its acquisition process to the greatest extent feasible.

A systems engineering approach, a commitment to total quality, and a more effective use of cost and performance analysis will reduce risk and ensure that investments are wisely made. Certain commercial technologies can be adapted to military use to bring state-of-the-art systems to our fighting forces rapidly and at a lower cost. This concept has been highly successful in the computer and communications fields. Further work is required to adjust acquisition regulations for better exploitation of this technology. The Department has also expanded Product Improvement Programs and has defined modifications to existing platforms which will generate the greatest improvement at the lowest cost.

To sharpen the acquisition work force, the Department of the Navy has taken an important step forward by appointing a Director of Acquisition Career Management who is responsible for attracting, selecting, developing, and retaining a highly qualified work force capable of performing current and future DON acquisition functions.

Finally, the Department is consolidating Research, Development, Test, and Evaluation (RDT&E) engineering and fleet support activities. This consolidation strengthens RDT&E management, provides substantial opportunities for cost savings, eliminates duplication of effort, and provides support for further consolidation efforts.

Industrial Base

Lower defense spending will significantly affect the size and structure of the industrial base as well as our department acquisition policies and practices. For the most part, the Department of the Navy will depend on individual companies to shift between defense and commercial production as required. In industries where the Navy and Marine Corps are the only or the predominant customer, essential production capabilities must be maintained for national security. The future composition of the defense industrial base will depend on actual spending levels, the financial strength of defense-related firms, the level of these firms' diversification, and their commitment to continue as defense suppliers. Clearly, the defense industrial base will shrink as companies respond to government budget actions.

Total Quality Leadership

The Department of the Navy's leaders are committed to the idea that an effective naval force for America's future depends not only on "downsizing" and "restructuring" but also on changing fundamentally the way it does business. The Department has aggressively adopted the principle--proven by other cutting-edge public and private organizations--that one of the best ways to improve its product is to improve its processes. The Navy and Marine Corps will perform their missions better, faster, and with minimum waste by removing from the system impediments to the flow of resources, materiel, decisions, and information.

The Department is going about this process improvement in a systematic, top-to-bottom way that it has called "Total Quality Leadership," or TQL. It has already begun to implement TQL in several shore commands with dramatic, positive results. As just one example, the Ships Parts Control Center in Mechanicsburg, Pennsylvania greatly enhanced its support to the fleet between 1988 and 1992 while achieving personnel, non-labor, and direct overtime cost reductions of 21, 85, and 82 percent respectively. Ultimately, the TQL methods of continuous process improvement will reach all Navy and Marine Corps operational and support units at every level of command.

Naval Forces for the 21st Century

Surface Warfare Programs

The Navy is planning a smaller yet highly capable surface force designed to carry out a full range of regional crisis response and warfighting missions. The increased use of naval forces for crisis response and regional contingencies means more emphasis on the ability of surface combatants to project power through the use of distributive firepower--that is, the ability to strike targets far inland with cruise missiles from a number of different Navy platforms.

The Navy is decommissioning several classes of ships, including the IOWA class battleships and the CHARLES F. ADAMS and COONTZ class guided-missile destroyers. Additionally, the KNOX class frigates are also being decommissioned, with the exception of eight of these ships which have been redesignated as training frigates.

The Navy is planning to purchase fewer new ships in the coming years than it did during most of the last decade, but those new ships will have systems and capabilities that will take the Fleet confidently into the next century.