WATCH: Speed, modularity, and the race to out-innovate China at sea

Monday, June 29, 2026

America’s naval edge isn’t just about hulls in the water.

Justin Fanelli, Chief Technology Officer of the Department of the Navy, joins Ben Wolfgang from The Washington Times to make the case that commercial-first acquisition and modular ship capabilities are closing the gap with China — and says the service is finally moving fast enough to prove it.

[WOLFGANG] I want to jump right into this with kind of a blunt, sort of overarching question to set the scene for everybody here. We’re going to hear a lot today about advantages China has in raw numbers of ships, in production capacity, and those physical things. But I’m curious, from your position as Chief Technology Officer of the Navy, are you worried that America could be losing its advantage on the tech side as well? And what are you all doing to make sure that doesn’t happen?

[FANELLI] Number one, ships, our technology, the shipbuilding process, the infusion there, is something that we are paying a lot more attention to than we had in the past. How this lays out for me — I want to talk to you about within the frame of the clocks, how I’m thinking about the world right now.

We have existing capabilities. Those are Horizon 1. If you think about any organization, they spend an outsized amount of time on the current production. What does the maintenance look like? How much time are we spending on this?

The next Navy, Horizon 2, what are we shooting through? What are the pilots that we have? What are we doing to disrupt ourselves in the way of technology?

And then Horizon 3, the Navy after next, as we call it. What are the things that are happening coming down the line?

One of the big differences that’s happening right now is a lot of that used to happen in the building, or down the street at DARPA. We’re opening the door, we have opened the door, to the private sector to say, help us reimagine. Help us figure out what is available for us to grab and run with.

So I think there was a while there where we were operating under the assumption that we controlled all of the clocks. And realistically, you control what is available to you and you inherit a lot of that. And so we have gotten a lot more proactive. The answer to your question in my mind is it was about time for us to start thinking about the way that we invested in tech differently.

You heard from the current CNO the idea of differentiated value, and quantifying these things is probably music to all of your ears, right? You’re going to spend on what you needed for the last war as opposed to the next one, unless you’re able to divest things.

The two hardest things in government, especially as it relates to technology — number one, prioritization, because everything is a number one priority in government. And then divesting. Can you get rid of — can you make trades between one technology area space and another technology area maritime domain awareness? People in the past have said you couldn’t possibly trade that. That’s not how budgets work.

And so based on what’s available in the private sector, we’re able to incorporate that into what we adopt faster.

[WOLFGANG] So let’s drill into that a little more. Because you’ve been a champion of course for the Innovation Adoption Kit, which is this framework for evaluating, implementing, and scaling innovative technologies across the Department of the Navy. So doing it quickly, but doing it only after you’ve evaluated it and know that it’s going to do what you want it to do. Can you detail how this is actually changing things inside the Department of the Navy? And blunt question again — have you run into any kind of institutional resistance with this Innovation Adoption Kit?

[FANELLI] Who’s ever seen the DOD 5000 acquisition Rube Goldberg?

Okay, if you haven’t spent 30 seconds being frustrated with us, it is a mess. And so it is a great feat to get anything fielded, whether it’s the right thing or not, historically. And so we said, we need this to be less friction, more impact. And so we just converted it to a funnel. And so the Innovation Adoption Kit is to say, hey, are we evaluating things in horizons? Are we evaluating based on the impact that they’re bringing?

And so was there resistance? There are a couple stories here. One — we said, hey, we’re going to start looking at these systems afloat and saying, is it worth its return on investment? About four years ago, we had a couple political appointees that said, we don’t like the use of the word “investment” in government. I said, I just have an adverse reaction to that, right? So I think we have changed that. We are now thinking about dollars and cents.

And what this does that I think is incredibly important for industry is it now invites folks to come in and say, here’s how you’re doing this right now, we have a better way. This opens the door to a hedge strategy that’s not just defined by government spec requirements or technologies. It’s saying, if you can quantitatively improve on the status quo, then we want that. And so it really reshapes the conversation.