The Officer in Charge of Risk

By Captain Vince Thomas

Proceedings: What is going to be your share of the supplemental budget request on Bosnia?

Admiral Hancock: My guys tell me that we will need only $100 million, because we have throttled back Operation Deny Flight and the Seabees have pretty well finished ripping apart camps and other facilities.

Proceedings: Out of the $2.2 billion that was sought, that's not much. Still, that was one of the points your predecessor, Vice Admiral Earner, made last year, that so little extra is needed by the Navy because many of those costs are built in.

Admiral Hancock: We do a lot of the "heavy lifting" because we are forward deployed all the time, as is the Marine Corps. When the President turns around to see what forces he can bring to bear, it almost always is naval forces. Look at the Nassau (LHA-4). She was in the Mediterranean doing Adriatic support when Albania blew up. She extracted 500 civilians from Albania, and then moved out of the Mediterranean for Zaire, in the event she was needed to do the same thing there. Now, there is a ship on a normal six-month deployment, doing its normal underway operations; the incremental costs associated with adding those two missions have been minuscule. That speaks well for the long-term viability of Navy and Marine forces.

Proceedings: But if you keep drawing down ships and aircraft, you're not going to have all those operational days and flight hours.

Admiral Hancock: That's what I worry about, that we are riding them hard and putting them away wet. We are not looking at the denominator, which is the number of ships in the Navy. On any given day, we have 50% of our ships under way, and probably 30% deployed-and that has the case been for the past several years. Before 1993, those numbers were 40% and 20%. Something has to give. Either commitments must be relaxed or we are going to have to figure out a cheaper-and I mean cheaper in terms of the human equation-solution.

Proceedings: For the last decade CNOs have been saying, "If we have to, we will cut back on commitments." Yet that has never happened.

Admiral Hancock: That is because the warfighting commanders-in-chief look at their areas of responsibility and say, "I cannot afford to lose that 911 force that is just around the corner."

Proceedings: How are you faring at crossdecking weapons and other gear? Are you still having to do a lot of that ?

Admiral Hancock: Crossdecking is higher than historically, but it has been flattening over the last several months. I believe most of it is attributable to our stronger, lock-step work-up and training program, from the first at-sea period, when the air wing comes on board the carrier, through a fleet exercise and a joint task force exercise with the amphibious ships. We have about a nine-month period when the air wing and the battle group composition are frozen, and we are training the people who will be deploying. Given that sort of gelling of the battle group, there is a nine-month opportunity to think of things you might need, that you might want to crossdeck. This longer period of time to get ready to deploy has given people more time to consider what they would like to bring on board just for the deployment.

Proceedings: That is not going to reflect a major shortfall in some of these items, is it?

Admiral Hancock: Not at all. In fact, I am working to reduce further the inventories afloat. If I can get better asset visibility across the Navy, and we can work harder on response time in the logistics delivery system, I won't have to carry so many insurance spares. Right now I have a wonderful deployed mission-capable and full-mission-capable rate on every aircraft carrier out there. It hovers between 81% and 88%, depending on how far the carrier is from its resupply hub.

Proceedings: That's pretty high.

Admiral Hancock: It is. We can accomplish every mission that a joint task force commander in the Persian Gulf or the Adriatic assigns to the Navy with readiness that high.

Proceedings: Last year Vice Admiral Earner said that he thought the Navy probably was a couple of years ahead of the Army and the Air Force in asset visibility on spare parts. Are you still there?

Admiral Hancock: Yes. Rear Admiral Donald Hickman [Director, Supply Programs and Policy Division, OPNAV] and Rear Admiral Ralph Mitchell [Chief of the Supply Corps] are working hard on total asset visibility because they realize the payoff. And all of our big inventories are stock-funded, so the stock-fund managers have total visibility.

We don't have good visibility into the Army or the Air Force stocks at this juncture, but we are working that. The Defense Logistics Agency is committed to opening up its inventories and data on the worldwide web, so people with proper authorization can tap in and see where things are. I committed right alongside Lieutenant General George Babbitt [Director, Defense Logistics Agency] to do the same thing with the Navy on the same timeline he's on. He and I were chuckling after our meeting because we were trying mightily to get the Air Force and the Army to sign up as well, to agree that was something we all ought to shoot for. But they didn't. When you are sitting in garrison with a spare part that a guy out on the pointy end of the spear needs, you lose every time. The spare goes to a guy who needs it.

Let me give an example of what we are doing if we have more than we need. Charlie Kaman is selling SH-2 helicopters around the world. He is working with our supply system to buy, or take custody of, all of our SH-2 parts inventory. Imagine the benefit he will get from having a ready inventory that we no longer need. We will get a credit for every part he sends to a customer around the world. And if we have any requirements from our Reserve folks, who still fly the helo, he will provide those parts back to us. He manages and updates the inventory and keeps track of what he is short of, just like we would-and he does it for nothing! All it would be to us is a big stack of ready-for-issue parts without any application in the Navy.

Proceedings: Tell us about Gold Disc. Do you have any more items like that that let you maintain things better?

Admiral Hancock: I wish I could get more people to agree that Gold Disc represents a tremendous breakthrough in having piece parts available to fix circuit cards. The first thing I did when I took over as N-4 was put an incentive program in place. It is called the CNO Gold Disc program. I sign a CNO letter of commendation to a sailor, and send him a check for $500, for completing a Gold Disc routine that has a broad application. I have sent three checks and am about to send another.

In essence what I am trying to do is to get all of the sailors who are maintainers to think about applications and go to work on that. It costs us about $6,500 apiece to develop a Gold Disc program with an industrial contractor. It costs about $2,500 if a sailor who works on that piece of equipment does it himself. That's quite a savings. We spend about $900 million a year putting piece parts and circuit cards into aviation-depot-level repairables at the squadron level and at the aviation intermediate maintenance depot. If I could take components and repair circuit cards instead of throwing them away, I could return those repairables to a full-up, ready-for-issue status with a few dollars for components rather than a thousand dollars for a circuit card.

The CNO wants very much to extract resources from the very, very expensive aviation maintenance business, so I am taking that as a task to try and encourage greater use of Gold Disc. I am convinced it is the way of the future.

Proceedings: I understand that some of the more sophisticated aviation spares cost as much as $10,000 apiece. If you can save some of those, you really would be realizing quite a savings.

Admiral Hancock: If you go to the macro side, we spent $4.5 billion on organizational, intermediate, and depot-level maintenance of airplanes last year.

Proceedings: Can you bring that down?

Admiral Hancock: I am going to bring it down. I am turning my attention to aviation because there is so much money there. We pulled about $1.2 billion out of ship maintenance, and we are going to go further by integrating our depots and our intermediate levels over the next couple of years.

Proceedings: Vice Admiral Earner commented, "CNO is holding my feet to the fire to prove that we are going to save money on regional maintenance." Are you saving money?

Admiral Hancock: CNO hasn't even put fire near my feet. I have told him that it is going to happen. I just sent a message to both of the Deputy CinCs [Rear Admiral John Sigler, Deputy and Chief of Staff, Commander-in-Chief Pacific Fleet; and Rear Admiral Hank Giffin, Deputy and Chief of Staff, Commander-in-Chief Atlantic Fleet] saying: "You and I are in sync on pushing regional maintenance, but there are some levels subordinate to us who haven't gotten the message yet, so they are dragging their feet. Let's make sure that there is not a perception that the system can outlast us."

Proceedings: Regional maintenance seems to make so much sense.

Admiral Hancock: Every application, from the Pacific northwest to San Diego, Norfolk, Jacksonville, everyplace we have done it, it has had a positive result. And the money isn't there anymore, so we have to have success. We'll get there. We just have to break down the institutional barriers that aviation has about doing things differently, and about nuclear engineers who worry about quality, technical competence, and oversight.

Proceedings: All except the three submarine tenders either have been or will be decommissioned. Is the repair capability on board ship proving to be enough for the people out in the fleet?

Admiral Hancock: The bigdeck amphibs and carriers have a pretty strong intermediate maintenance capacity internal to the ship. I saw that on board the Ranger (CV-61) when I was deployed. We routinely would bring on work from the small boys who didn't have the capacity. In fact, we reworked a crankshaft for an air compressor for a Russian destroyer that was in the Gulf with us, and they were amazed. Those kids just put sleeves on the places that had been worn down.

Proceedings: Are you training enough people well enough to have adequate numbers of knowledgeable people with all of the deployed forces to let them make the repairs?

Admiral Hancock: My ultimate goal is to take out of the picture every sailor in the maintenance business ashore who is in excess of what we will need in maintenance billets at sea. I want to have skilled civilian artisans do the intermediate and depot level work, with apprentices, journeymen, and masters who are sailors working right alongside them learning their trade. That way they will be better, more effective maintainers at sea.

Proceedings: How are you faring on casualty reports (CasReps)?

Admiral Hancock: It looks as though the time free of C-3 and C-4 CasReps is getting a little worse lately. I was worried about that, so I pulled the string, and what I learned is that there are a few bad actors-for example, the close-in weapon system, the gas turbine generators on the Spruance (DD-963)- and Arleigh Burke (DDG-5 1)-class destroyers, and the diesel generators on the Oliver Hazard Perry (FFG-7)-class frigates. As these systems age, reliability is getting worse, and they take longer to fix. I had the Kinkaid (DD-965) with me in the Persian Gulf when she had a short in one of her gas turbine generator's electric end. We shipped a rotor from Norfolk, tested it statically okay, put it in the machine, and it didn't work. So I think something is wrong with the electrical end of those generators that is an aging problem.

Naval Sea Systems is working the problem, and could well have a fix in hand soon. Once we do that I believe we will be back to pretty much the historical C-3, C-4 average. With regard to mission-capable rates for airplanes, we are a little bit below fleet-wide. But the deployed mission-capable rate is staying very, very healthy.

Proceedings: If you find yourself in a situation like what you faced three years ago, with Haiti and the Persian Gulf flaring up at the same time, how much would that strain you in being able to keep ships up and going?

Admiral Hancock: If you talk to the fleet commanders, they would be concerned about pushing six carriers out the door to support a Desert Storm-like event. Frankly, I believe we would be in better shape today, because we have better visibility of our parts, and, I believe, more reliable airplanes.

Proceedings: How did the experiment go with Charlie Kaman's helicopters operating from MSC ships? Are you trying another company with another aircraft in that same role?

Admiral Hancock: The K-MAX experiment in the Persian Gulf went wonderfully well. I received a message from Vice Admiral Tom Fargo [Commander, Fifth Fleet/U.S. Forces, Central Command] at the finish of the cruise of the Niagara Falls (T-AFS-3) in which he commented about how well it went. In turn, I sent a personal note to both Deputy CinCs saying, "If Tom Fargo likes it, I believe it is time to get on with commercial helos." We could save $200 million a year if we go in that direction.

The latest contract, with Evergreen, had them deploying 15 April with the Saturn (T-AFS-10). They will be back in September. As far as I am concerned, we have learned and studied and procrastinated as long as we need to. Now I want to enter into a long-term contract commencing in October 1997. It will be a competition, but we are going to go with commercial helos for all MSC-operated replenishment ships.

Proceedings: Is there some concern that you can't get the commercial helos qualified for night operations?

Admiral Hancock: No. Kaman believes they will have the night capability certified by the FAA this summer. If they do, then the only bar to fully satisfied customers is internal cargo and passengers, and, frankly, we have to be reasonable about cranking back on our requirements. Internal cargo on an H-46 is a "nice to have" as far as I am concerned. If it isn't hanging from a hook, it isn't very important.

Proceedings: Logistical accomplishments in large measure go unrecognized. Have you initiated any actions that would focus attention on noteworthy achievements by logisticians?

Admiral Hancock: I have asked and gotten permission from Stan Arthur [now retired Admiral Stanley Arthur, former Vice Chief of Naval Operations] to name an award for logistics excellence in his honor. Once a year we are going to single out a civilian, a military officer, and a team of logisticians who have done exceptional work. It is going to include a financial reward as well as public recognition, so there will be a real bite in being selected. I think recognition is a key to getting people to think more. seriously about doing things differently.

Proceedings: You have your fingers in so many pies, and you also stand to be the fall guy in so many areas if you don't produce.

Admiral Hancock: I have told my people that I am the officer in charge of "risk." If what you want to do will input risk to the system, come by and let me assume that risk for you. If it goes south, I'll take the blame, and we'll figure out together how to get whatever it is back on track.

Proceedings: Are you going to build any new logistics ships?

Admiral Hancock: Yes. Through "charter and build," we are going to recapitalize the entire logistics force without a single dollar of Ship Construction, Navy. We are going to go to the Hill this year to get enabling legislation so that we can enter into a long-term, 25-year charter with a ship operator. I have a ship called an ADCX, which basically is a dry-cargo ship-ammunition, parts, and groceries. I can build one for $500 million with Navy Shipbuilding and Conversion funds-and I need about two per year to recapitalize my CLF force-or I can go out on a charter and build and say, "Give me ten ships, and I need the first one to deliver in 2003. And I need the stream of ships to come on about two per year after that." Then I walk away.

Proceedings: You can do this starting in fiscal year 1999 and get them in four years?

Admiral Hancock: Yes. You can build the ship in about three, especially if you don't look over their shoulder to see how well they are doing. Just tell them what you want in terms of a top-level specification and then get out of the way.

Proceedings: How are your relations with the Marines with regard to money for logistics, etc.?

Admiral Hancock: They couldn't be better. The CNO and the Commandant are basically welded at the hip. One of the first things we did when I came to N-4 was to get Joe Stewart [Major General Joseph Stewart, Deputy Chief of Staff for Installations and Logistics] and his generals and senior executives together in an off-site, and we focused on issues on which the Navy and Marine Corps have absolute concurrence. We are working to make sure we are not at cross purposes.

Proceedings: Are you going to be able to get the other ships for the Maritime Prepositioning Force?

Admiral Hancock: The contract for the first one has been awarded. Acquisition of the next two will be worked through this year. The Commandant is happy with the first one, so I believe we're on track.

Proceedings: What have I missed?

Admiral Hancock: I think a question ought to be, "How much money are you going to give to Vice Admiral Don Pilling [DCNO for Resources, Warfare Requirements, and Assessments] by the end of the century?" I am going to give him $3 billion by 2000, not to recapitalize, but to pay operations and support bills. That's a big number. It comes from inventory reductions, from personnel reductions, both military and civilian. It comes by doing business smarter, by relying on the private sector to a greater degree, by getting rid of middle-management bureaucratic layers that add no value-all the things we should be doing all the time. We have gotten comfortable with sort of a Cold War philosophy, "Overpower it with mass." We forget that we can get lean and mean and still be just as combat effective.

There once was a Royal Navy admiral who said, "We don't have enough money, so we must think." I have adopted that as my mantra.



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