Monday, May 1, 2000
Mr. Lawrence: Welcome to The Business of Government Hour, Conversations with Government Leaders. I'm Paul Lawrence, a partner of PricewaterhouseCoopers and the co-chair of the PricewaterhouseCoopers Endowment for The Business of Government. The Endowment was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. To find out more about the endowment visit us on the web at www.endowment.pwcglobal.com.
The Business of Government Hour focuses on outstanding government executives who are changing the way government does business. Our guest tonight is Admiral Jim Loy, commandant of the U.S. Coast Guard. Welcome, Admiral.
Admiral Loy: Thank you very much, good to be here.
Mr. Lawrence: Well, let's start this first segment by finding out more about the Coast Guard and its mission. We all know the Coast Guard rescues people when they are lost at sea, but could you tell us more about its activities?
Admiral Loy: I sure can. We try to keep the three Ms in mind when we talk about our service. It's a military service, one of the five armed forces of the United States by law. It's also multi-missioned in nature, which suggests that we have an awful lot of things that we do for the American public. And the third M is maritime. We do virtually everything we do on the water, near the water in a maritime service. So, as one of the Congressmen said last year, the Coast Guard is the United States' answer for anything wet and so we have attempted to focus on that over the years.
Mr. Lawrence: You began your career at the Coast Guard over 30 years ago after graduating from the academy. Can you tell us a little bit about your career and the various positions you've had?
Admiral Loy: Sure, I'm happy to do that. I probably owed you a little bit more information on your question about our service first, though. So, if I may, the idea of a Coast Guard as a rescue service will always be at the core of our service. As I often say, the last Coastie on the face of the earth will be in a small boat rescuing somebody at sea.
But truly there are many, many other things that we do for our nation. We are into the marine safety business, which has a lot to do with the inspection and certification and licensing of mariners on all of our commercial flag vessels for the United States. And we also guarantee the safety of our water ways and the environmental protection of our waterways by being very cognizant in who visits our waters with another flag flying at their stern.
That's important because the United States over the years has become far less of a flag state. In other words, we have far fewer ships flying the U.S. flag than was the case between the wars or even shortly after World War II.
We're also very much into the maritime law enforcement business. We are up to our ears in the law enforcement of things at sea and there are so many dimensions of that these days. From counter narcotics to illegal migrants and aliens, people who are literally trying to get from the have-not nations of the world to the have nation known as the United States… if you will, the constant search for the land of milk and honey. That's become an enormously impacting mission for us over the last five or six years.
And you all might remember, your listeners might remember back in 1994 when we had such a flood of migrants from both Haiti and Cuba in the fall and flood of that year. The Coast Guard actually saved about 65,000 lives just in the four or five months associated with those two mass migrations.
And, as you mentioned, our stock in trade is often search and rescue and being concerned with the growth, virtual explosion, in recreational boating over the last several years. That's very much on our minds. We also do all the aids to navigation and ice- breaking work for our country. And, as I mentioned at the very beginning, national defense is very much a part of our stock in trade as well. And as the fifth armed service we bring a certain set of skills to the table that complement those of the other four services.
And thanks again for your question about me personally. You are right, I'm a graduate of the United States Coast Guard Academy Class of 1964. I am basically a sailor. I've spent about 13 years of my commission time on Coast Guard ships over the years. I've had the great honor and great pleasure of commanding four of those, all the way from patrol boats in Vietnam to our major cutters. And the times when I wasn't at sea, I was pretty much in the personnel and training business.
I taught at the Coast Guard Academy for a number of years. I ran our Officer Candidate School program for a couple of years and was in a number of staff positions here at Coast Guard headquarters in the personnel and training business. Since I made flag officer, I've had the great joy of commanding the Eighth Coast Guard District down in New Orleans and running our personnel and training business for a couple of years at headquarters. I was also Commander of our Atlantic area, which was at that time headquartered in New York, now down in Portsmouth, Virginia. And just before I took this job in 1998, I was the Coast Guard's Chief of Staff for a couple of years befuddled with the budget process here in Washington.
Mr. Lawrence: One of our guests a couple of weeks ago made this observation. He said that the difference between the public and private sector is in the private sector people are trained to become managers but in the public sector, primarily the military, people are trained to become leaders. I'm wondering if you have any reflections on that.
Admiral Loy: Well, I think the distinction is one that is very different in an awful lot of our minds, that between management and leadership. Management in many people's correct impressions I think is all about making the numbers add up at the bottom of the columns, the mechanics associated with the counting and being a good manager in that sense. They place leadership more in an artful sense which has more impressions associated with vision and more impressions associated with being able to rally folks who perhaps aren't really totally focused on doing something to get that something done. And I think that's probably not a bad distinction. For me, leadership has always been about two things, one at the personal level and one at the organizational level. I think at the personal level, we must all continue to be developers of our own capabilities about leadership.
Eisenhower had a wonderful model that he used. It was a very simple one and I've used it many times over the years. He said leadership was the combination of three things, native ability, the knowledge of one's craft, and the opportunity to exercise it. Those three dimensions were what he thought were very important and he also went on to say that there is not much you can do about the first one. It's either in the genes or it's not there at all, so we don't have a lot to do about the native ability piece.
And, interestingly enough, we don't always have a lot to do with the opportunity piece. We have all known leaders that we thought were superior people that never got the chance to really be on the spot, so to speak, and be the Norman Schwartzkopf of the world or be the Douglas MacArthur of the world.
But the knowledge of one's craft and that's that interesting thing in the middle that I think is so important that I agree with Eisenhower so very much about. Therein lies your chance to perfect your own craft, whatever that may be, and you can really do that. You can spend a lot of time learning and reading and watching models and watching mentors do their thing. You can learn negative lessons and positive lessons and accrue over the years a capacity to have that knowledge of your craft such that, combined with your native ability, should your opportunity come by you will be in an optimal condition to be able to exercise it well.
Mr. Lawrence: Well, let me ask you about leading a large and diverse group. As I understand it, you currently command, if I've added up the numbers right, 35,000 active duty military, 5,700 civilians, and 7,000 reservists, so that's a pretty large group to begin with but also diverse. I'm wondering what the leadership challenges are in that organization.
Admiral Loy: Well, the great leadership challenges for our service has to do with focusing on results. I am of the mind that we almost have a revolution of sorts going on here in this Washington, D.C., of ours and as a nation. I truly believe that some of the contributions like the Government Performance and Results Act, the National Performance Review, and such things as that have offered us each a chance here in Washington to make the translation between activity-based management and leadership, which we often had been mired in the past, to results-based management and leadership, which is where I think we need to go to continue to be good stewards of the taxpayer’s dollar.
And in that end my greatest joy is to watch the team nature of the dimensions that you did cite just a moment ago as well as our 35,000 volunteers across the country known as the Coast Guard Auxiliary. And if you have ever had any inclination to wonder about leading volunteers there's a challenge in any leader's basket. That's like herding cats in large in large measure. But the beauty for us is that the team has come together and jelled very well.
Mr. Lawrence: It's time for a break. We'll be right back with more of The Business of Government Hour.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner of PricewaterhouseCoopers, and tonight's conversation is with Admiral Jim Loy, commandant of the U.S. Coast Guard.
Well, Admiral, when we went to the intermission we were describing the numbers in the Coast Guard. It’s my understanding those numbers haven't changed much in the past 30 years. And I wonder if you could comment on that and tell us how the organization can survive in such a situation.
Admiral Loy: Well, thank you for that opportunity. You're absolutely right. Our service is about the same size in terms of people as it was in the mid-1960s. And in the meantime we have had an enormous array of challenges rolled in our direction, some from the Congress, some from various administrations over that 30 years. And some from the American people themselves who very often have an opportunity to stipulate quite clearly what it is that they're interested in some organization doing.
I think the biggest challenge is the change index that we've watched over the course of that 30 years that offers us the chance to let those numbers that you just cited stay germane to the inventory of mandates and challenges that we have to deal with, enormous changes that have taken place in that 30 years in our business. We've watched the demise of a bipolar world in 1989. With the fall of the Berlin Wall, we have now watched a significant increase in transnational threats, threats that are no longer sponsored by nation states and therefore challenge us to a very different approach to how we deal with those threats.
And in these kinds of things -- I'm talking, for example, about counter narcotics or about the alien migration threats. Those are very real threats to the national security of the country. I mean, you show me something else where we're losing 15,000 lives and $110 billion year after year. That's what's happening in our counter drug effort and as a nation we need to rise to that challenge.
We've had dramatic increases in what we've been asked to do for the nation. Drug enforcement is one of them. But the Oil Pollution Act of 1990 in the immediate wake of the Exxon Valdez spill in Prince William Sound in Alaska has been an enormous challenge. It has challenged how we deal differently with not only how oil is transported but how we focus on the prevention end of things as opposed to the response end of things these days to keep oil off of our beaches.
The recreational boating safety explosion has produced a thought pattern that we now transmit to the next 20 or 30 years. So we have very much had to find ourselves to be better strategic planners than we've ever been in the past, and as you look forward into that 20- or 30-year cycle we can see this global economy of ours doubling or tripling.
And in all of that the United States remains an island nation. About 95 percent of what comes and goes to the United States comes and goes by ship, at least by volume, perhaps not by value. To project those kind of congestion elements into the future requires an enormous amount of effort to make sure that the ports, waterways and inter-modal connectors of our national transportation system are designed well. And that the infrastructure is going to be there that can accommodate that kind of growth and that at the other end of the day that same number of people you just mentioned is now being able to be spread across these newer challenges.
Mr. Lawrence: You said something at a speech to the National Press Club where you defined an equation where capability equals the product of modernization, readiness, and current operations. I think I understand it, but I wonder if you could explain it to me to make sure I do and what this means to the Coast Guard.
Admiral Loy: Well, the challenges there is that that’s really what all the service chiefs do. We're either in the business of generating capability so as to do whatever the nation needs done in the various assignments that we get. And the product of modernization, readiness, and current operations is simply this. Current operations is literally what we're doing today and likely will be doing tomorrow. Modernization has to do with grappling with the equipment that we currently have and making sure that, if we take a sounding five years from now or ten or fifteen years from now, we will still have attendant to our needs that equipment that is appropriate.
And Readiness has to do with everything from adequate recruiting and retention, compensation and incentives on our people side to keep a solid people base to what we do for a living. It also includes spare parts in the spare parts lockers and adequate maintenance provided to that equipment inventory so that the readiness of our force overall, equipment and people, is up to the requirements that the American people would have us deal with.
Mr. Lawrence: Well, speaking of equipment I know one of your concerns is the age of the fleet of ships and aircraft and you have recently developed Deep Water, which is the name of the Integrated Deep Water Systems Acquisition Project, to replace the $10 billion worth of aging assets. Can you tell us about this program?
Admiral Loy: Well, in the first instance the $10-billion figure is a little bit of a fantasy figure. That is an estimate of what it would take if we, on a one-for-one basis, replaced the current inventory of things that we have.
And the beauty of the Deep Water Project is we have had it reflected on by the Office of Federal Procurement Policy, by the Office of Management and Budget, by the GAO, by our own IG at the Department of Transportation and all of which are enormously supportive of the project now. It's design is to produce a system of systems and we have literally provided the best industrial minds of the nation, who have forged themselves into three competing consortia to take a blank sheet of paper and we have helped them understand what we believe the maritime environment will be in 2020 or 2025 and we have also defined for them the requirements we will have as an organization to deal for the nation in the things they would have us do in that environment.
And their challenge is to design a system of systems for us that would optimize two things, meeting the requirements and the good stewardship of the taxpayers dollar. Now, together with our own challenges in terms of, if you will, domestic law enforcement activities and what have you that we are responsible for 50 or more miles offshore we also have to stay conscious of our requirement to remain inter-operable, especially with the U.S. Navy and with combined forces from other nations as appropriate to meet our obligations in a variety of ops, op plans and op orders around the world.
So that is the enormous challenge that we've asked these three competing consortia to undertake and over the course of the next 18 months or so, until we get to around January-February of 2002, that competition will continue and then we'll make a very important decision for the Coast Guard's future, that being which of these proposals, which will then be all face up on the table, will best serve America's needs and the Coast Guard's needs into the next 30 or 40 years.
Mr. Lawrence: How long did it take to develop this program? You talked about the buy in of several organizations?
Admiral Loy: It's really been going on for about four years now and the Congress of the United States has invested or will have invested by the time 2001 goes by in the order of $110 million into the concept design and functional design stages of the three consortia's work. And so that investment is one that is quite critical to us and will meet the requirements of an interagency task force on our roles and mission in the future which perhaps we can talk about after the break.
Mr. Lawrence: Great. It is time for a break. We'll be right back with more of The Business of Government Hour.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with Admiral Jim Loy, commandant of the U.S. Coast Guard. Admiral lets loop back to Deep Water because it does sound like a very special program. Is there anything else you'd like to add?
Admiral Loy: Well, thanks, Paul. The program really will define in large measure the future of our organization offshore. We have currently coming off a number of assembly lines just absolutely terrific products for our coastal responsibilities. We have new patrol boats, we have motor lifeboats, we have new buoy tenders coming off the line that over the next two or three years will have been completed and we will be in great shape on the coastal inventory. But it is this offshore inventory and our requirements to meet these threats that have emerged as transnational threats that are enormously important to the nation and why we have focused on the Deep Water Project as being so important.
One of the interesting aspects, for example, is that back when John Lehman was Secretary of the Navy he was talking about a 600-ship navy. And the 40 or 50 hulls that the Coast Guard then was running were almost an afterthought in the cerebral context of a 600-ship navy. But in today's navy of 300 ships with 116 combatants and a build rate of six or seven instead of the 9 or 10 that Admiral Johnson thinks that he would need to be actually building the navy that he wants. Now all of a sudden the 40 or 50 hulls in the Coast Guard as a force in being available to the Navy in times of emergency takes on a totally different perspective and a totally different importance.
And so four years ago my predecessor called the then Chief of Naval Operations Mike Boorda and said we are looking to replace the Deep Water fleet of the Coast Guard in the next decade or so. It's enormously important that we know what kind of attributes the Navy would have us have and would have us build into that set of Deep Water assets. So the Navy did a wonderful job of articulating those requirements for us and we took those and built them right into the RFP that's on the street currently being designed by the three consortia. So we will have met the Navy's requirements for this 40 or 50 hulls worth of force in being, if you will, when we are finished with our project.
Most importantly, going back to the $10 billion that you mentioned when we began this topic, that price tag got the attention of the folks in the Office of Management and Budget, as you might imagine. And so the President asked that we conduct an interagency task force on the roles and missions of our service as we look to the future and they did about a ten-month review. The Deputy Secretary of Transportation, the Honorable Mort Downey chaired the review, and the results at the end of the day were very revealing. We had prior to this effort conducted our own strategic vision outlook effort and presented that in a document called Coast Guard 2020.
The great value of the interagency task force was that they came to essentially the same conclusions that we had just reached within about two years before that. And those conclusions were that the kinds of things we do for the nation do project into the next century, that we are the right organization to do them. A couple of very interesting conclusions around the technology and agility of how we should be building things that can be adaptable to change over time because that's been our history as an organization.
And then, lastly, they directly went to the Deep Water Project and said it is enormously important that we re-capitalize the Coast Guard's deep-water capability for this nation. And they used the phrase that it was a "near-term national priority" to do so and, secondly, that the project the Coast Guard had on the drawing boards was the right way to do that. So now we have these 16 signatures from all of our customers and stakeholders in the federal government having signed up for the importance of this project to the nation's future, not just to the Coast Guard but to the nation at large, if you will.
Mr. Lawrence: Let me shift a little bit, then, and talk now about managing the Coast Guard. We know that it's an organization committed to increased accountability. I think in one of our first segments you even talked about this. How did it come to be that the Coast Guard would be one of the forerunners in being more responsive and accountable for performance?
Admiral Loy: Well, first let me thank you for the thought process and the question because I think that's very true. You may or may not be aware of the wonderful report card that we got in the Washington Post here just a little while back as the result of an effort that the Government Executive magazine in conjunction with the Maxwell School up at Syracuse University had put together.
And they gave us an A in a variety of different fields of management endeavor and one of the two organizations that got an A for the effort that they had examined. First of all, the Coast Guard is a very operational service. So we can be accountable. You know, we can count up the drugs we seize, we can count up the number of lives we save, we can count up the dollar value of the property that we have saved in the midst of our hurricane relief operations.
We can add up the number of oil spills that the nation is experiencing on an annual basis and make certain that over time, if our management is doing the right thing, that that number is going down. And so we have realized in the last four or five years that as an organization we have to invest very carefully in strategic planning and we have done that.
We have largely held on to the core of how one does business in this town over the years as an adjustment from what Robert McNamara brought to the Washington, D.C., world from the Ford Motor Company back in the early '60s. That PPBS system, the Planning, Programming, and Budgeting System, at its core remains sound but we had, as had many other agencies I believe, over the years encumbered it will all kinds of Christmas tree ornaments that really bogged it down.
So part of our effort in the last three or four years has been to totally redesign our planning, programming, and budgeting system. And to go back to the essence of the core of what McNamara brought to town but to also think very carefully about these projective thoughts into the future of strategic planning.
So we now have a very long period, four years now, of increasingly sophisticated performance plans and strategic plans that we have built. We have been part of Secretary Slater's work at the Department of Transportation, which, as you know, was dubbed the best strategic plan in government. And we would like to think that the Coast Guard investment several years before that had an awful lot to do with laying some of the groundwork that helped the department win those awards.
Mr. Lawrence: Let's talk a little bit about the servicemen and women under your command. Retention of personnel has been a problem for everybody in government, especially the armed services, it seems. What are you doing to retain your work force, especially the very technically trained people?
Admiral Loy: On the military side, we are making every effort to stay abreast of the Department of Defense with respect to the incentives and the bonuses and the kinds of monetary challenges and monetary inducements that can be provided to keep our young people satisfied with the work environment. We have been working very hard on recruiting the last couple of years. But I for one, in the midst of our efforts to do a good job with recruiting, have always been more concerned about retention. Because, if we bring a new high school graduate or college graduate off the street into the service to replace someone with eight or ten or twelve years experience, you can imagine that over time the net loss of capability at the people level.
And in the period from 1994 until 1998, when the Coast Guard pony-ed up to the task of reducing the total size of the federal government, we stripped ourselves of some 4,000 people within an imputed savings of about $400 million per year forever. I would be remiss if I didn't note that we probably went a little too far.
In our zeal to be good stewards and to meet the requirements of streamlining we overshot the mark and ended up short of the bodies against the billet structure that we were actually allotted. So for the last two years we've been working very hard on restoring our workforce numbers, knowing in advance that we had to work very hard and holding on to those technical kinds of folks that have the experience that we need today.
Part of our challenge is a structural challenge associated with how the President's budget goes together and how the Congress appropriates money. For example, when the pay raise last year, largely well received, of course, by all people in military uniforms, when the President sent his budget to the Hill it was a 4.4 percent raise. Congress appropriated eventually a 4.8 percent raise.
So you can imagine we were between a rock and a hard place; watching this with great joy, seeing our people rewarded with a slightly larger pay raise but having to eat it, so to speak, in the appropriated dollar value that we had actually already received from the Congress. So we focus on incentivising our work force to want to stay in the Coast Guard to do the business of very gratifying work. When you're saving lives, protecting the environment, dealing with migrants, and those kinds of things, we want the nobility of what we do for a living to be the gratification that keeps our people in. But at the same time we want very much to incentivise them to stay as well.
Mr. Lawrence: We'll be right back with more of The Business of Government Hour.
Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with Admiral Jim Loy, commandant of the U.S. Coast Guard. Well, we just finished on our last segment talking about public service, and I'm just wondering… from your perspective do you think public service is still an attractive career?
Admiral Loy: You know, Paul, it's interesting to me that the structure of our economy and its strength and the robust nature bring that question to the table maybe more often than it should. Because in my mind the structural framework around which this wonderfully successive economy has been able to grow has been the result of noble public servants doing good things from within the framework of the federal government for years and years and years.
And I am one who continues to believe that there is great nobility in public service, whether it is in uniform or it is not in uniform. I would hope that the efforts undertaken by those who advocate the nobility of public service are heard and we don't as a nation culturally drift to the almighty dollar and it's foundation block, if you will, underneath the robust economy. But rather that the nobility of purpose of even the framers of our Constitution and Declaration of Independence, if you go back to the Federalist papers and such things, you read internal to them the great challenge associated with not allowing one branch of the government to begin to overwhelm the other, that that's not healthy.
But the challenge that they place in it is to have a good person in all of those branches to make certain that doesn’t happen. And I think if America at large comes to understand again the fundamental purpose of government in that light and understands therefore the value of stocking that government with good people of noble purpose we will all be able to watch this wonderful USA of ours press on into the future with the same strengths that it has shown through its first 200 years.
So, yes, I hope that is not a naive thought process any more but I for one endorse the nobility of public service in many, many aspects and, of course, I guess I'm personal testament to almost 40 years of public service myself in uniform.
Mr. Lawrence: Speaking of the future, let's talk about the future for the Coast Guard. What are some of the key issues the Coast Guard will be facing in the future?
Admiral Loy: Well, at my State of the Coast Guard address here just in the middle of March the challenge that I left with our service at large was twofold as I look into my next two years. The greatest challenge in front of us right now is to restore the readiness of our organization so as to be able to meet the expectations of the American public. I have made an awful lot of speeches in the last two years registering concern that the flood of challenges and mandates rolling in our direction, which we acknowledge are appropriate for our organization to deal with because, as that congressman said way back when, if it's wet it belongs to the Coast Guard if it doesn't have to be national defense focused on Navy. The reality there is that we should also recognize the requirement to properly resource the organization that you would have do all of those things.
So restoring the readiness of the Coast Guard both in terms of parts in the spare parts lockers and not having to defer maintenance, recognizing the age of this old deep-water fleet and getting it replaced, and all the personnel things that we have mentioned along the way in our conversation tonight, that is job one for me through the course of the time that I still have in this organization.
And job two is to acknowledge today's role in setting up the future of our service and I've referred to that as shaping the future of the Coast Guard so as to do what America would have us do 20, 30, 40 years down the road. Be cognizant of that in the future. Have a vision that defines the desired state of the organization well down the line so that you can literally build bridges between what you know to be the current state and what you know to be the desired state once you have figured that out.
That goes back to our investment in strategic planning. And it's an enormously important thing for us as an organization to be able to articulate that very clearly and build those bridges that will have your Coast Guard always be semper paratus, which is our byword, and we never want that to be questioned. So inside both of those categories, restoring readiness and shaping the future, there are probably a half dozen items that are of great consequence under each,. But those are the two fundamental future concerns that I have and that keep me awake at night every once in a while and certainly are on my desk every day.
Mr. Lawrence: Technology has been playing an increasingly important part in all aspects of the government. I'm just curious, as you look to the future, what role technology plays in the Coast Guard.
Admiral Loy: Absolutely. And as I can refer back to the one over-arching conclusion of our interagency task force which said as you build your Coast Guard of the future focus on technology. A couple of very key aspects: first of all, the information systems business will clearly be part of the future of all of our organizations, not only in Washington but in the private sector as well. We need to get that right. And so database design, database management, information systems management, the idea of stakeholder and customer sharing, collegial sharing of databases so as to be on the same wave length with each other, all of those things are enormously important and technology goes along with that.
Perhaps the most graphic positive associated with technology for our service is its potential to replace people where people are the most expensive thing that we have in the Coast Guard. We spend about 66 cents of every dollar on people one way or another, recruiting them, retaining them, giving them bonuses, paying them, quality of life issues, incentivising them, whatever.
And so where we can take a ship, for example, that might have historically had 50 people on board as its crew and replace it with a ship that through technological improvement now only requires 20 people on board to do the same things. Over time, the difference is "savings forever" because it is a recurring savings over time. It is always a challenge, of course, in these difficult and tight federal budget years to be convincing as it relates to the investments that you sometimes have to make up front to enjoy those recurring savings over time. That's always the great challenge.
Mr. Lawrence: I understand the Coast Guard has begun to outsource some of its functions. I wonder if you could tell us about that experience?
Admiral Loy: We're trying to make certain that first and foremost we focus on the core competencies that we have to have on board the organization. In other words, we have to have bosun mates and quartermasters that safely drive and navigate our vessels from point A to point B. But it may not be as necessary to have in a Coast Guard uniform the people that repaint the hull, the people that do some of the apprentice-level labor that we have invariably in our current and past traditional paradigms kept as part of a Coast Guard-uniformed whole. So we are looking very carefully at making certain that non-core functions are considered for contractual opportunities to get done or to be out-placed or out-sourced where appropriate to make us a more efficient organization.
If we can do with the dollar what heretofore we have been forced to do with the person we need to be considering those things as we look to the future. And, like I say, what we have to be able to articulate clearly are what are those core competencies that will always be in uniform as part of our Coast Guard not only today but on down the road.
Mr. Lawrence: Are there any lessons learned from this experience?
Admiral Loy: So far we've been able to take some experiments. For example, we took a ship on the West Coast and a different ship on the East Coast and licensed those commanding officers to experiment with a variety of different ideas where we were outsourcing labor, for example, and using contracted maintenance opportunities for them. So we watched the Navy experiments very carefully because usually we're able to translate those lessons into our service as well and between us I think we're going to learn some real good lessons down the road.
Mr. Lawrence: Well, I'm afraid we're out of time. I want to thank you very much, Admiral Loy. I enjoyed our conversation. This has been The Business of Government Hour, Conversations with Government Leaders. I'm Paul Lawrence, a partner of PricewaterhouseCoopers and the co-chair of the PricewaterhouseCoopers Endowment.
To learn more about the Endowment's programs and research visit us on the web at www.endowment.pwcglobal.com. See you next week.