From: Haney, Cecil D ADM COMPACFLT, N00 Sent: Wednesday, June 12, 2013 0:36 Subject: Culture of Judiciousness

Fleet Leaders, As I travel the PACFLT AOR I get the sense that many Navy military & civilian personnel believe sequestration impacts & budget cutting initiatives are beginning to diminish & that things are stabilizing. There appears to be a sense that the worst is over, & we are back to "business as usual." As leaders, you & I know that nothing could be further from the truth. We must ensure our team understands & embraces CNO's "Culture of Judiciousness" as we discussed at NFOSES. A few examples: - With the exception of our shipyards, furloughs of our civilian employees will begin as outlined by SECDEF & SECNAV. Over an 11 week period, the Navy will endure a significant reduction in productivity while most of our dedicated civilian employees concurrently suffer a significant reduction in their pay. The impacts will be very real for them, & we need to understand & appreciate this, at both personal & professional levels. - Travel is authorized for mission-essential priorities only as approved by first level Flag or SES & consistent with the new reduced budget allocations. - Training funds will remain limited to next deployers. This will have lasting impact in the years to come. VADM Burke was recently quoted as saying: "Due to reduced training & maintenance, almost all of our nondeployed ships & aviation squadrons are soon going to be less than fully mission capable & not certified for major combat operations. That's about two-thirds of the fleet." We need to understand this "new" reality & be clear about its impact. - Bases have cut all but essential services. We need to stay in constant communication with our Sailors going forward so that we can understand the impacts to them & our Navy families, & to mitigate where we can. - Fleet weeks remain cancelled. There is no alternative.

- Authority to use appropriated funds to purchase command coins, plaques, & similar items is suspended until further notice (ORF gifts are permissible with appropriate review/approval). - As a final example, all of you will be tasked to comply with the VCNO's mandate to tighten up contract management. PACFLT Staff has already conducted a series of "Contract Courts" to revalidate contractor support services, add additional scrutiny to cost, take a deeper look at contracting policies & procedures, contracting officer representative training & qualifications, & the actual execution & evaluation of the contract to ensure we are getting what we paid for. I have tasked my

staff to ensure we have a consistent & aggressive program of review & oversight & I am also requesting your strongest advocacy. As far as the future is concerned, sequestration will continue. The CNO testified to congress in April that we anticipate a $23 billion shortfall in 2014. Now, more than ever, it is incumbent upon leadership to maintain a constant drumbeat to inculcate judiciousness into both our lexicon & our culture. We are in this for the long haul & I rely on you to demonstrate in your policies, responsibilities, oversight, & actions the judicious behavior we must influence across the Pacific Fleet. I think you get the picture. Cecil