Home » Aviation » McCain to Navy Civilian Leadership Nominees: ‘We Want an Audit’

McCain to Navy Civilian Leadership Nominees: ‘We Want an Audit’

Sen. John McCain (R-Ariz.) and Sen. Jack Reed (D-R.I.)

If confirmed, provide an audit of acquisitions or risk cuts and delays in funding, Sen. John McCain (R-Ariz) warned a pair of nominees to be top civilian leaders in the Navy.

Thomas Modly, nominee to be the Under Secretary of the Navy, and James Geurts, nominee to be the Navy’s top weapons buyer, appeared Tuesday before the Senate Armed Services Committee, chaired by McCain.

Both provided their visions for being stewards of Navy acquisitions, which focused on providing Congress a clear spending analysis and pledges to avoid cost overruns. At times, Modly and Geurts explained their thoughts on issues posed by senators was so in concert they preferred to defer to their colleague’s response. At other moments, each seemed to complete the other’s thought.

Thomas Modly, nominee to be Under Secretary of the Navy.

“I think one of the problems we’ve had is an inability to lock into requirements early,” Modly said, answering a question about how to avoid cost overruns. There’s a tendency to spend too much time tweaking programs, which causes entire project costs to increase with additional planning, studies, and tests.

Geurts followed Modly’s comment, adding he’ll bring “a sense of urgency in the whole organization.”

While it was apparently heartening to many committee members hearing two of the people tapped to become Navy budget hawks speak about reigning in what often seems like runaway spending on such projects as the F-35 Lightning II Joint Strike Fighter and the Gerald R. Ford-class aircraft carrier (CVN-78), not every senator was willing to give Geurts and Modly a free pass on spending questions.

McCain said the Senate Armed Services Committee recently learned at another hearing how $50 million worth of money he said was totally wasted.

“Witnesses have come before and say we’ll do an audit,” McCain said to Modly. “An audit has not been done. I want you and Mr. Geurts to make this your highest priority.”

If the Navy doesn’t provide better fiscal accountability, McCain said his committee will block future system acquisitions and authorizations.

James F. Geurts, U.S. Special Operations Command acquisition executive and nominee to serve as assistant secretary of the Navy for research, development and acquisition. US Air Force photo.

“You cannot run an organization efficiently if you don’t know how much it costs,” McCain said. “Be warned, we want an audit.”

Geurts concurred an audit of Navy spending would occur, and when it came to spending on emerging technologies, he would be the person held responsible for any overruns. Geurts is currently the U.S. Special Operations Command top acquisition executive. If confirmed, he will in effect be doing the same job, but on a much larger scale for an entire department than what he’s done for the combatant command.

An audit will be done, Modly said. Given his background as a managing director with PricewaterhouseCoopers, a few senators sounded hopeful this business experience would bring some clarity to Navy spending.

“I am firmly committed to driving the Department of the Navy to embody two prominent characteristics: agility and accountability,” Modly said during his testimony. “I believe these are the two most powerful indicators in determining whether any organization, public or private, will be successful over the long run.”

Modly grew up outside Cleveland, and remains an avid Indians and Cavaliers fan, according to social media profiles. Through hard work he earned an admission to the U.S. Naval Academy – he graduated in 1983 – and remains committed to supporting the country that took in his parents.

Both his parents emigrated to the U.S. to escape living behind the Iron Curtain. His father escaped Hungary 69 years ago because, Modly said during his testimony Tuesday, he didn’t join the communist party and would be shut out of any chance of having a successful career.

During his testimony Tuesday, Modly recalled his first visit to Hungary in the earl 1980s. In the square near where his father grew up, Modly said he could see the Hungarian parliament building, which at the time had a big red star atop. Today, the star is gone, but in the square is a statue of Ronald Reagan.

Ronald Reagan Statue in Budapest, Hungary.

Ronald Reagan Statue in Budapest, Hungary.

“I served as an active duty officer in the Navy with President Reagan and the American people fully committed to rebuilding our military and most specifically a 600-ship navy, to push back the challenge of the Soviet Union and protect our interests around the globe,” Modly said.

After serving as a Navy helicopter pilot for seven years, Modly worked in academia, the private sector, and public sector. In the early 2000s, Modly worked at the Pentagon, leading the Department of Defense’s business transformation efforts.

Today, Modly is in charge of PricewaterhouseCoopers’ Global Government and Public Services sector. He’s worked for the firm for a decade. According to his work bio, Modly has direct account responsibility for PwC’s Navy, Marine Corps and Office of the Secretary of Defense accounts. He is also PwC’s Global Account Leader for NATO, where the firm is engaged in substantial transformational projects as part of the NATO Reform Agenda. He also has a son and son-in-law serving in the Air Force.

“You have to have some confidence between an organization spending money and an organization giving the money,” Modly said, referring to the relationship between Congress and the Navy.
“Right now, there’s not that confidence.”

  • Leatherstocking

    Ships and ship classes take decades from design through deployment. Requirements changes because of technology (ours and theirs), threats, and mission priorities are inevitable during the intervening years. Do you ignore the changes and just build to the original requirements, ending up with a platform that doesn’t meet the challenges of today/tomorrow or do you incorporate the changes to be more mission effective? This has always been the problem with major long-term programs. If you change the requirements, cost and schedule will be affected and no one (Navy, Congress, shipyards) is willing to admit it and the public is not informed on the why. I’ve engineered from the Government side and as a contractor for all three services plus DoD agencies. No one can see 10, 20 or 30 years out and changes affect technical, schedule and cost and are never free.

  • Western

    I disagree with McCain on every issue and every thought in his head, but on this one, I do agree. Actually the entire DOD could use an audit and I am surprised Mattis has not ordered one already.

    • Fred Gould

      Good luck getting one.

    • D. Jones

      I’d like to see McCain audited.

  • Chesapeakeguy

    The entire government needs to be ‘audited’, and that includes the Fed Reserve banking system. After that, a BRAC-like process should be implemented on the entire government, to determine what departments and agencies and programs are redundant, as well as those that long ago outlived their purpose, like those installed to address the Great Depression back n the 30s. Sunset clauses should be placed on ALL such government entities, to force Congress to HAVE to periodically review their status and determine if they are to be kept. I know none of that will ever happen, but the key word here is “should”.

  • Brent Leatherman

    Good luck with that. With the systems we had on my ships, we could barely tell if our budget was good or not.

  • good idea from the flyboy. He also should look into uniforms and how the services keep on reinventing the wheel.

  • Duane

    Audits work great in theory, but completely fall apart in execution because of … auditors. Auditors are famously charactized as the guys who come to the field after the battle is lost and bayonet all the wounded. Auditors are desk jockeys, by definintion. A DOD managed by audit is a completely dysfunctional military.

    Audits are a necessary evil. Accountability for spending funds is always necessary, but never ever ever let the auditors define what we need, or how effective our current manpower, platforms, and weapons are. They haven’t the foggiest clue on such matters.

  • Jon

    Crippling the USN by “cuts and delays in funding”, what a wonderful idea…not.

    Here’s a novel idea instead…why not hold civilian appointees and uniformed leaders accountable, and firing them if they can’t account for money? Pretty radical concept, I know…

  • Barry Wind

    I would say to McCain… from the citizens of the United States… “We want and audit of what the Congress/Senate has done with our tax money”! We know in part and we are not happy with what we know. Why are we giving money to kill babies? Why are you ignoring the Constitution and Bill of Rights? No, you are tearing down these documents and destroying them. We want it stopped!

  • Ed L

    I want an Audit too of the whole freaking government. Congress DOE education DOJ EPA. etc. The waste of money is not confined to the military. It’s the whole government. As far a ship design. You can build a hull and over years change that vessel. Example USS Belknap 1 of 9 decommissioned in 75 after 11 years then recommissioned in 1980 as the most powerful cruiser in the world. as a test platform for the Aegis class cruiser electronics and updated weapons systems. Then only 15 years later decommissioned and sunk as target. Waste of a good hull. Another example the Austin class LPD. They were going to be SLEP so they last 50 or 60 years re Engine with diesels etc stripping tons of old wiring reconfiguring the vehicle cargo areas to handle the larger newer truck, Humber, 155 cannons etc But they scrapped them too

  • tim

    McCain is right, when he wants us to try to better stewards of our tax dollars, but wrong to use the word “waste”. We got something for the money – maybe not the most efficient way to spend it – but if for nothing else, we kept people and industry employed. Paying for an audit to search for $50 mio could also be seen as wasted. As long as we cannot look into the future (but not the enemy too), there will always be changes to projects, likely causing cost overruns!