[Senate Hearing 107-771]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-771

  DEPARTMENT OF DEFENSE POLICIES AND PROGRAMS TO TRANSFORM THE ARMED 
           FORCES TO MEET THE CHALLENGES OF THE 21ST CENTURY

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 9, 2002

                               __________

         Printed for the use of the Committee on Armed Services



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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

EDWARD M. KENNEDY, Massachusetts     JOHN WARNER, Virginia
ROBERT C. BYRD, West Virginia        STROM THURMOND, South Carolina
JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
MAX CLELAND, Georgia                 BOB SMITH, New Hampshire
MARY L. LANDRIEU, Louisiana          JAMES M. INHOFE, Oklahoma
JACK REED, Rhode Island              RICK SANTORUM, Pennsylvania
DANIEL K. AKAKA, Hawaii              PAT ROBERTS, Kansas
BILL NELSON, Florida                 WAYNE ALLARD, Colorado
E. BENJAMIN NELSON, Nebraska         TIM HUTCHINSON, Arkansas
JEAN CARNAHAN, Missouri              JEFF SESSIONS, Alabama
MARK DAYTON, Minnesota               SUSAN COLLINS, Maine
JEFF BINGAMAN, New Mexico            JIM BUNNING, Kentucky

                     David S. Lyles, Staff Director
               Judy A. Ansley, Republican Staff Director

                                  (ii)





                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

  Department of Defense Policies and Programs to Transform the Armed 
           Forces to Meet the Challenges of the 21st Century

                             april 9, 2002

                                                                   Page

Wolfowitz, Hon. Paul D., Deputy Secretary of Defense; Accompanied 
  by Gen. Peter Pace, USMC, Vice Chairman, Joint Chiefs of Staff; 
  Vice Adm. Arthur K. Cebrowski, USN (Retired), Director of Force 
  Transformation, Office of the Secretary of Defense; and Gen. 
  William F. Kernan, USA, Commander in Chief, United States Joint 
  Forces Command.................................................     5
Krepinevich, Andrew F., Ph.D., Executive Director, Center for 
  Strategic and Budgetary Assessments............................    77
Thompson, Dr. Loren B., Chief Operating Officer, The Lexington 
  Institute......................................................    95

                                 (iii)

 
  DEPARTMENT OF DEFENSE POLICIES AND PROGRAMS TO TRANSFORM THE ARMED 
           FORCES TO MEET THE CHALLENGES OF THE 21ST CENTURY

                              ----------                              


                         TUESDAY, APRIL 9, 2002

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:38 a.m. in room 
SH-216, Hart Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Lieberman, Reed, 
Akaka, Bill Nelson, E. Benjamin Nelson, Warner, Sessions, and 
Bunning.
    Committee staff member present: David S. Lyles, staff 
director.
    Majority staff members present: Daniel J. Cox, Jr., 
professional staff member; Kenneth M. Crosswait, professional 
staff member; Richard D. DeBobes, counsel; Gerald J. Leeling, 
counsel; Arun A. Seraphin, professional staff member; and 
Christina D. Still, professional staff member.
    Minority staff members present: Judith A. Ansley, 
Republican staff director; Charles W. Alsup, professional staff 
member; Edward H. Edens IV, professional staff member; William 
C. Greenwalt, professional staff member; Gary M. Hall, 
professional staff member; Carolyn M. Hanna, professional staff 
member; Ambrose R. Hock, professional staff member; George W. 
Lauffer, professional staff member; Patricia L. Lewis, 
professional staff member; Thomas L. MacKenzie, professional 
staff member; Scott W. Stucky, minority Counsel; and Richard F. 
Walsh, minority counsel.
    Staff assistants present: Dara R. Alpert, Leah C. Brewer, 
and Nicholas W. West.
    Committee members' assistants present: Frederick M. Downey, 
assistant to Senator Lieberman; Davelyn Noelani Kalipi and 
Richard Kessler, assistants to Senator Akaka; William K. Sutey, 
assistant to Senator Bill Nelson; Eric Pierce, assistant to 
Senator Ben Nelson; John A. Bonsell, assistant to Senator 
Inhofe; George M. Bernier III, assistant to Senator Santorum; 
Robert Alan McCurry, assistant to Senator Roberts; and David 
Young, assistant to Senator Bunning.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. The committee meets this morning to receive 
testimony on Department of Defense policies and programs to 
transform the Armed Forces to meet the challenges of the 21st 
century. Because Senator Warner must leave for a few minutes, I 
am going to turn this over to him right now for his opening 
statement or that part of it that he is able to give, and then 
I will finish my own opening statement. Senator Warner.

                STATEMENT OF SENATOR JOHN WARNER

    Senator Warner. Thank you, Mr. Chairman. I will just 
momentarily be detained, but I would like to welcome our 
witnesses. This is an enormously important hearing. You have 
laid the foundation in the Executive Branch. Now we must take 
into consideration that foundation in the Legislative Branch. I 
see from the opening statements provided by the witnesses that 
great progress has been made.
    I do hope that as this successful operation in Afghanistan 
reaches its anticipated conclusion at some point in time--the 
President said there will be no hurry until the job is 
finished--that we take to heart some of the extraordinary 
actions performed by the men and women of the Armed Forces, 
utilizing the modern weapons that we have today. This 
individual soldier, sailor, airman, and marine is exhibiting 
courage and professionalism without peer in the history of our 
country.
    I can only think of the World War II era, when this whole 
Nation stood behind the uniformed persons in the battle fronts 
of the world. That same solid support is here at home today, 
led by a President who shows really extraordinary qualities as 
the Commander in Chief.
    These soldiers and sailors, airmen and marines have made 
history. We have to learn from that history as we continue the 
war on terrorism with our allies, and direct our actions in the 
future to protect our freedom here at home.
    I will put the balance of my statement in the record. I 
thank the chair.
    [The prepared statement of Senator Warner follows:]
               Prepared Statement by Senator John Warner
    Senator Warner. Thank you, Mr. Chairman. I join you in welcoming 
all of our distinguished witnesses.
    This hearing focuses on the type of military our Nation will need 
to face the challenges ahead. The basic question before us is this--how 
should our military ``transform'' to meet future threats? I look 
forward to the testimony of each of our witnesses.
    I find it interesting that today we are discussing ``transforming'' 
our Armed Forces at the same time we are witnessing impressive 
demonstrations of military capabilities and competence by our Armed 
Forces as they prosecute the global war against terrorism. It is a war 
unlike any we have fought before. As Chairman Levin and I visited our 
servicemen and women in the region last November, I was struck by a 
recurring thought--we are writing a new chapter in military history 
with this operation and those that will follow.
    This war has truly been a joint operation--U.S. land, sea, and air 
forces operating together as one; and forces from the many coalition 
nations interacting seamlessly. Soldiers on horseback and afoot are 
directing 21st century weapons with extraordinary precision. Maritime 
forces are operating hundreds of miles inland in a land-locked country. 
Old bombers are delivering new weapons with devastating accuracy. New 
communications systems and information processing technologies are 
allowing U.S. and coalition forces to share information instantly and 
execute orders quickly. Agility, precision, lethality, and 
interoperability are the measures of success for our systems and 
organizations.
    The bottom line is that the professionalism exhibited by these 
individual soldiers, sailors, airmen, and marines has been remarkable. 
The American people recognize this extraordinary effort and have 
responded with an outpouring of support. Not since World War II have 
our troops received such strong support from the home front. I know how 
much these young servicemen and women appreciate this support and what 
a difference it makes as they prepare for current and future 
operations.
    Clearly, we are focused on this current war against terrorism. It 
is a war we must win; a war we will win. But, it is also important to 
note that the President's fiscal year 2003 budget request also 
recognizes the ongoing, traditional commitments and obligations of the 
United States. Let no nation or adversary think for a moment that we 
are not prepared to defend our interests and friends worldwide--beyond 
the war on terrorism.
    We have all been encouraged by early successes in Afghanistan, but 
recent events serve to remind us that we are involved in a long 
struggle that will take us to the far corners of the world. But it will 
end some day and we must all be prepared for the next war--not the last 
one.
    ``I hope there will be no more warfare. But, if and when such a 
tragedy as war visits us again, it is always going to happen under 
circumstances, at places and under conditions different from those you 
expect or plan for.''
    We have all wrestled with this predicament--how do you plan for the 
unknown? I think Secretary Rumsfeld has made a very important 
contribution with his extensive strategic review and Quadrennial 
Defense Review, wherein he concludes that we must move from a ``threat-
based force'' to a ``capabilities-based force'' that can deter and, if 
necessary, defeat the unexpected threats.
    That brings me back to the focus of this hearing--transformation. 
What does transformation mean? I believe that transformation means 
different things to different people. Most discussions of 
transformation quickly focus on weapons systems. but transformation 
includes insertion of new technology and new capabilities, but that's 
far from the whole story.
    Secretary Rumsfeld, and others, point out that Germany's 
``blitzkrieg'' concept terrorized adversaries and revolutionized 
warfare in 1939. Curiously, only about 15 percent of the entire German 
army was ``transformed'' with new equipment. Let me repeat that--only 
15 percent new equipment. However, new ideas and operational concepts 
were superimposed over their entire army. In that case, transformation 
was at least as much about organization and the application of new 
capabilities as it was about new equipment. Transformation today is 
about new technologies, but it is also about new thinking, new 
processes, and new ways to apply old capabilities.
    The events of September 11, have given new resonance--and a new 
urgency--to calls for change. The challenges are clear--history will 
judge our response. But, the time to act--the time to secure a lasting 
peace through current strength and wise investment in future 
capabilities--is now.

    Chairman Levin. Thank you so much, Senator Warner.
    More than 4 years ago, the congressionally-mandated 
independent National Defense Panel recognized the need for the 
transformation of our Armed Forces. Its December 1997 report 
entitled ``Transforming Defense: National Security in the 21st 
Century'' concluded as follows: ``The United States needs to 
launch a transformation strategy now that will enable it to 
meet a range of security challenges in 2010 to 2020. Yet we 
must do this without taking undue risk in the interim. This 
transformation promises to be complex. Yet we must make 
critical decisions and choices entailing significant 
investments of resources and energies.''
    The Panel's report also stated that: ``A successful 
transformation strategy must provide for frequent and large-
scale experimentation in potentially new ways of war, effecting 
meaningful and appropriate change in operational concepts, 
force structures, military systems, and budgets.''
    Starting in the late 1990s, the Services began the process 
of transforming their force structure to meet the challenges of 
the 21st century. For instance, the Army began to transition to 
a force that is strategically responsive and dominant at every 
point in the spectrum of operations. This involves the 
selective modernization and partial digitization of the current 
force as a first step and eventual development of a responsive, 
agile, deployable, and lethal Objective Force.
    The 2001 Quadrennial Defense Review submitted by Secretary 
Rumsfeld to Congress last September reemphasized the 
requirement to continue the transformation of our forces. In 
his testimony before this committee last October on the 
Quadrennial Defense Review, Deputy Secretary Wolfowitz 
testified that: ``Transformation is about more than technology; 
it is about innovative concepts of operating and configuring 
our forces, adjustments in how we train and base our people and 
material, and how we conduct business day to day. The goal of 
transformation is to maintain a substantial advantage over any 
potential adversaries in key areas such as information warfare, 
power projection, space, and intelligence.''
    The purpose of today's hearing is to review the manner in 
which the Department is pursuing the transformation of our 
Armed Forces, to assess the progress that has been made in 
terms of acquisition programs, experimentation activities, 
operational concepts, organizational changes, and cultural 
adjustments; to identify truly transformational items in the 
fiscal year 2003 budget request; and to determine if 
legislation is necessary to facilitate and promote 
transformation.
    Some of the issues that I hope our witnesses will address 
this morning include: how do we define transformation and 
identify its elements; how do we distinguish truly 
transformational programs, concepts, and activities from those 
that are not; what is the proper role of experimentation, 
including in helping to decide what not to acquire; how can we 
stimulate and incentivize creative and transformational 
thinking; how do we provide funding to take advantage of 
results from experimentation in the absence of programmed 
funding; how do we avoid becoming so dependent on sensor 
linkages that we create an Achilles heel that can be taken 
advantage of by an enemy who finds a way to block such 
linkages; and how do we share transformational innovations, 
concepts, and programs with allies, particularly NATO allies, 
so as to preserve interoperability and strengthen alliances.
    We have two panels this morning. Our first panel will 
consist of four witnesses from the Department of Defense and 
the lead is Deputy Secretary Paul Wolfowitz, who as I mentioned 
earlier represented the Department last year in presenting the 
Quadrennial Defense Review to Congress. We also have Retired 
Vice Admiral Arthur Cebrowski, who is the first Director of the 
Office of Force Transformation; General Peter Pace, Vice 
Chairman of the Joint Chiefs of Staff, who serves as the 
Chairman of the Joint Requirements Oversight Council and is a 
member of several of the Department's boards that are involved 
in the planning, programming, and budgeting system, all of 
which have important roles in transformation; and General 
William Kernan, the Commander in Chief of U.S. Joint Forces 
Command, who is in charge of joint experimentation and is the 
chief advocate for jointness and transformation.
    Our second panel consists of Dr. Andrew Krepinevich and Dr. 
Loren Thompson. Dr. Krepinevich is Executive Director of the 
Center for Strategic and Budgetary Assessments and was one of 
the seven members of the 1997 National Defense Panel to which I 
referred earlier. Dr. Thompson is the Chief Operating Officer 
of the Lexington Institute. Both Dr. Krepinevich and Dr. 
Thompson are frequent commentators on national security issues, 
including military transformation.
    Let me see if any of our other colleagues has an opening 
statement.
    Senator Bunning. I would like to put one into the record, 
please.
    Chairman Levin. Senator Bunning's statement will be made 
part of the record.
    [The prepared statement of Senator Bunning follows:]
               Prepared Statememt by Senator Jim Bunning
    I would like to join my colleagues in welcoming our distinguished 
panel members for today's hearing on transformation. Though I have 
concerns with many areas of transformation, some of which I hope to 
address today, I am very pleased with the administration's vision and 
energy in undertaking this tremendous and necessary task. I know there 
has been a lot of hard work and dedication by our men and women in 
uniform and our civilian workforce to move the transformation of our 
forces forward. This committee and our Nation are very proud of their 
efforts.
    Last week, I had the opportunity to visit with Secretary White at 
Fort Knox, Kentucky to see firsthand the Army's mounted maneuver battle 
lab. Fort Knox has been designated as the lead for the Army's 
transformation and the hub that will synchronize the efforts of all the 
combined arms centers of the Army such as Forts Benning, Sill, Rucker, 
Leavenworth, Lee, and Leonard Wood. Transformation is not something we 
are going to do several years from now. Transformation is already in 
progress.

    Chairman Levin. Let me now welcome Secretary Wolfowitz, 
Admiral Cebrowski, General Pace, and General Kernan. Each of 
you have had a role and continue that major role in the 
difficult task of transforming our forces for the challenges of 
the 21st century. Each of your statements will be printed in 
full in the record. I understand, Secretary Wolfowitz, that you 
do have an opening statement and we would be happy to receive 
that now on behalf of all of the panel members.

   STATEMENT OF HON. PAUL D. WOLFOWITZ, DEPUTY SECRETARY OF 
 DEFENSE; ACCOMPANIED BY GEN. PETER PACE, USMC, VICE CHAIRMAN, 
   JOINT CHIEFS OF STAFF; VICE ADM. ARTHUR K. CEBROWSKI, USN 
  (RETIRED), DIRECTOR OF FORCE TRANSFORMATION, OFFICE OF THE 
    SECRETARY OF DEFENSE; AND GEN. WILLIAM F. KERNAN, USA, 
     COMMANDER IN CHIEF, UNITED STATES JOINT FORCES COMMAND

    Secretary Wolfowitz. Thank you, Mr. Chairman. I appreciate 
very much the opportunity to meet with this committee to 
discuss this important subject. As you have noted already, I 
have with me three of the leaders of the Department's efforts 
at transformation. You have picked an extremely important topic 
and it is a pleasure to be here to discuss it.
    Indeed, looking back, this committee and Congress have 
played a major role in transformation efforts in the past, 
including landmark legislation such as the 1947 National 
Security Act, the 1973 All-Volunteer Force Act, and the 1986 
Goldwater-Nichols Act. Congress, moreover, has sponsored and 
supported numerous transformational technologies, including 
stealth, cruise missiles, and precision guided munitions.
    So as we undertake what may be the most significant 
transformation of our military forces in many decades, we hope 
to continue to work closely with Congress to achieve our common 
national security objectives.
    In the civil economy today, we are witnessing a 
transformation in the manner, speed, and effectiveness with 
which industrial and commercial tasks can be accomplished. 
These transformational efforts derive from the impact of 
advances in technology, in computing, communicating, and 
networking. Taken together, they constitute an information 
revolution whose effects extend far beyond technology into the 
organization and even the culture of the business and 
commercial worlds.
    This transformational potential affects our military as 
well. In the current campaign in Afghanistan, for example, 
young noncommissioned officers are routinely integrating 
multiple intelligence collection platforms by simultaneously 
coordinating what amounts to several chat rooms. We have seen 
them creatively improvise with new military applications not 
unlike the technology they have grown up with. Indeed, they 
display an agility with that technology that comes from being 
completely comfortable with this new way of doing things.
    In the same way, the agility that we need to continue 
meeting threats here and abroad depends on more than just 
technology, although that must be a fundamental part of our 
response. It is tied also to changing organizational designs 
and embracing new concepts. One of my key points today is that 
transformation is about changing the military culture into one 
that encourages, as Secretary Rumsfeld says, innovation and 
intelligent risk-taking.
    Twelve months ago some might have questioned the continued 
investment in improving our advantage, given the huge military 
lead the United States enjoyed. Some were asking, who will 
fight us now? September 11 brought home the fact that, while it 
is likely few would seek to meet us head-to-head, they can 
still attack us, they can still threaten us. When they did 
attack last September, using box cutters and jetliners, our 
response required much more than just box cutters and 
jetliners. Our response, as we seek to deny future terrorists 
avenues to similar attacks, has been and must be 
disproportionately asymmetrical, and it does not come cheaply 
or without great effort at innovation.
    My second key point is that, although we now face the 
enormous challenge of winning the global war on terrorism, we 
must also address the equally large challenge of preparing our 
forces for the future. We cannot wait for another Pearl Harbor 
or another September 11, either on the ground, in space, or in 
cyber space. Even as we fight the war of today, we must invest 
in tomorrow. It is a process of balancing the risks of today 
with those of tomorrow, one that should ultimately redefine how 
we go to war.
    Back in the 1920s and the 1930s, the French and British 
establishments looked on the transformational issues of their 
time with a victor's sense that the next war would be fought 
like the last. But by the spring of 1940, with the Germans' 
lightning strikes across the Meuse and through the Ardennes, it 
was clear then that blitzkrieg had redefined war and would 
reshape battles for years to come.
    But we do not have to look back 60 years or even 20 years 
to find dramatic examples of military transformations. In 
Afghanistan today, brave Special Forces on the ground have 
taken 19th century horse cavalry, combined it with 50-year-old 
B-52 bombers, and, using modern satellite communications, have 
produced a truly 21st century capability.
    When asked what he had in mind in introducing the horse 
cavalry back into modern war, Secretary Rumsfeld said, ``It is 
all part of the transformation plan,'' and indeed it is. 
Transformation can mean using old things in new ways, a natural 
result of creative innovation.
    Finally, our overall goal is to encourage a series of 
transformations that in combination can produce a revolutionary 
increase in our military capability and redefine how war is 
fought. The capabilities demonstrated in Afghanistan show how 
far we have come in the 10 years since the Persian Gulf War, 
but they are just a glimpse of how far we can still go.
    Let me briefly discuss how transformation was treated in 
the Quadrennial Defense Review. Long before September 11, the 
Department's senior leaders began an unprecedented degree of 
debate and discussion about where the military should go in the 
years ahead. The outline of those changes is reflected in the 
Quadrennial Defense Review and the fiscal year 2003 budget 
request. Among the new directions set in the QDR, the following 
four are perhaps the most important:
    First, we decided to move away from the Two Major Theater 
War Force Plan construct. By doing so, we gain more flexibility 
in planning for a wider array of contingencies and we gain more 
flexibility in investing for the future.
    Second, during the QDR the senior civilian and military 
leadership agreed on a new framework for assessing risk. We 
identified four categories of risk: force management risks, 
operational risks, future challenges risks, and institutional 
risks. The approach we adopted in light of this framework seeks 
to balance risks in all of these categories and avoid extreme 
solutions that would lower risks in some areas while raising 
other risks to unacceptable levels.
    Third, to confront a world of surprise and uncertainty, we 
are shifting our planning from the threat-based model that has 
guided our thinking in the past to a capabilities-based model 
for the future. We do not know who may threaten us or when or 
where, but we do have some sense of what sort of capabilities 
they might threaten us with and how. We also have a sense of 
which capabilities we have that could provide us important new 
advantages.
    Fourth, to support this capabilities-based approach to 
force planning, we worked to define goals to focus our 
transformation efforts. Historically, successful cases of 
transformation have occurred to meet compelling strategic and 
operational challenges. Therefore, we endeavored to determine 
what those challenges were in the 21st century and what goals 
we needed to have to address them.
    The U.S. military is pursuing not a single transformation, 
but a host of transformations, including precision 
surveillance, network communications, robotics, and information 
processing. The six specific transformation goals identified in 
the QDR are: first, to defend the U.S. homeland and other bases 
of operation and defeat nuclear, biological, and chemical 
weapons and their means of delivery; second, to deny enemies 
sanctuary, depriving them of the ability to run or hide any 
time, anywhere; third, to project and sustain forces in distant 
theaters in the face of access denial threats; fourth, to 
conduct effective operations in space; fifth, to conduct 
effective information operations; and sixth, to leverage our 
information technology to give our joint forces a common 
operational picture.
    In my written testimony, I elaborate on each of these six 
goals, but in the interest of time let me just move on to 
discuss how we have tried to reflect those goals in the budget 
that is now before your committee. Taken together, these six 
goals will guide the U.S. military transformation efforts and 
improvements in our joint forces. Over time they will help us 
to shift the balance of U.S. forces and capabilities.
    U.S. ground forces will be lighter, more lethal, more 
highly mobile. They will be capable of insertion far from 
traditional ports and air bases and they will be networked to 
leverage the synergy that can come from ground forces and long-
range precision fires from the air and sea.
    Naval and amphibious forces will be able to assure U.S. 
access even in area denial environments. Air and space forces 
will be able to locate and track mobile targets over vast areas 
and strike them rapidly at long ranges without warning. These 
future attributes are the promise of U.S. transformation 
efforts.
    As I will be saying in a few minutes, transformation is 
about much more than just investment, but investment is 
important. Over the next 5 years, we plan to invest more than 
$136 billion in transformational technologies and systems. Of 
this, $76 billion represents new investments to accelerate or 
start new transformations. We have applied a very strict 
definition to programs to be included in these totals as 
transformational. Many things that enable transformation or 
extend current capabilities are not included in the figures I 
will be citing. For example, the $1.7 billion in this year's 
budget for funding Joint Direct Attack Munitions, or JDAMs, and 
other precision-guided munitions, is not included. The total 
additional investment in systems that support transformation 
approaches $25 billion in the fiscal year 2003 budget and $144 
billion over the FYDP.
    Let me highlight some of the capabilities we are investing 
in to meet the transformational goals. First, the goal of 
protecting bases of operations. We are pursuing advanced 
biological defenses and accelerating the development of missile 
defense. Missile defense investment includes increased funding 
for the airborne laser program, a directed energy weapon to 
destroy ballistic missiles in their boost phase. The budget 
invests $8 billion in transformational capability to support 
defense of the U.S. homeland and forces abroad, a total of 
$45.8 billion over the 5-year defense plan, an increase of 47 
percent.
    I would note that that does not include some $10.5 billion 
in our budget that is invested in programs for counterterrorism 
and anti-terrorism, almost double from where we were 2 years 
ago. Most of that is force protection measures associated with 
the global war on terrorism.
    Second, to project power in denied areas, we are developing 
new shallow-draft fast transport ships to move forces into 
contested littoral areas more rapidly and less dependent on 
traditional ports. We are also developing unmanned underwater 
vehicles that can help to assure U.S. naval access. Overall, 
the fiscal year 2003 budget requests $7.4 billion for programs 
to support the goal of projecting power into denied areas and 
$53 billion over the FYDP, an increase of 21 percent.
    Third, to deny enemies sanctuary, we are developing a 
space-based radar system to provide persistent global ground 
surveillance and tracking capability. We are converting four 
SSBNs to carry more than 150 Tomahawk missiles each and up to 
66 SEALs. We are also accelerating a number of unmanned vehicle 
programs. The budget in fact includes $1 billion to increase 
the development and procurement of Global Hawk, Predator, and 
unmanned combat aerial vehicles.
    Finally, we are developing a range of new precision and 
miniature munitions for attacking deep underground facilities, 
mobile targets, and targets in dense urban areas. The fiscal 
year 2003 budget requests $3.2 billion for transformational 
programs to support the objective of denying sanctuary to 
adversaries and $16.9 billion over the FYDP.
    Fourth, to leverage information technology, perhaps one of 
the most important developments we are pursuing in this budget 
is our investment in laser communications and space, the 
technology that has the potential to provide fiber optics-
quality broadband secure communications any time and anywhere 
U.S. forces may operate. That is a transformational technology 
that can affect everything our forces do. The fiscal year 2003 
budget requests $2.5 billion for programs to support this 
objective and $18.6 billion over the FYDP.
    Fifth, to conduct effective space and information 
operations, we are increasing investments in both of those 
categories. The fiscal year 2003 budget requests $174 million 
for programs related to information operations, $773 million 
over the FYDP. We request an additional $200 million to 
strengthen space capabilities and $1.5 billion over the FYDP.
    We could not have made these investments without 
terminating a number of programs and finding other savings. 
Although this year's defense budget is the largest in a long 
time, virtually the entire increase was spoken for by needed 
increases to cover inflation, health care and pay raises, 
realistic costing of readiness and procurement, and funding the 
war. We have saved some $9.3 billion by terminating and 
restructuring a number of programs. Major terminations include 
the DD-21 Destroyer program, which has been replaced by a 
restructured DDX program, and we have cut 18 Army legacy 
systems. We also terminated the Navy Area Missile Defense 
program because of delays, poor performance, and cost growth. 
But we are still looking to develop sea-based defenses under a 
replacement program.
    But, as we have seen in Afghanistan, transformation is 
about more than just new technology. Although the Germans were 
the first to make tanks a decisive instrument of war, they are 
not the ones who invented tanks. They were not even the ones to 
first field tanks in combat. What they did do first was to use 
tanks to devastating effect through the combination of armor 
with air and radio communications, the willingness to risk 
employing a new and bold doctrine, allowing armor to emerge in 
an army traditionally dominated by infantry, and delegating 
responsibility to lower levels so that units could operate with 
the autonomy that armor and radio communications provided them. 
Their success went even beyond doctrine, beyond speed, beyond 
communications. It was a culture change from top to bottom.
    Another example of culture change in our own forces is the 
development of our ability to conduct night operations. Drawing 
from our experience in Vietnam, we worked to acquire technology 
such as night vision goggles that allowed us to virtually turn 
night into day. We now conduct extensive night training 
operations and we have turned what was once a vulnerability 
into an advantage. Today it is not hyperbole to say we own the 
night.
    The campaign in Afghanistan has planted the seeds of 
culture change in other areas that will prove to be as 
significant, I think. Historically, Special Operations Forces 
have operated separately from conventional forces, but this 
campaign has necessitated their close integration with 
conventional forces and especially air forces. One of the 
results is an order of magnitude change in how precise we are 
in finding and hitting targets from just a decade ago. That is 
not only changing the culture of Special Operations Forces, but 
it is changing how the rest of the force thinks about Special 
Operations and how it thinks about the integration between air 
and ground power.
    Another example from the present involves what it means to 
be a pilot today. That is undergoing a transformation as well. 
Not long ago, an Air Force F-15 pilot had to be persuaded to 
forego a rated pilot's job to fly--I guess that is still the 
word--an unmanned Predator aircraft from a location far from 
the field of battle. Of course, UAVs have made a significant 
impact in the current campaign and promise even greater 
operational impacts, which is why the Air Force leadership is 
working hard to encourage this pilot and others to think of 
piloting UAVs as a major mission and to become trailblazers in 
defining new concepts of operations.
    Some of the greatest military transformations of the last 
century were the product of American innovation: the 
development of amphibious warfare, of aircraft carriers, of 
stealth and nuclear-powered submarines, to name just a few. 
Great names like Billy Mitchell and Hyman Rickover are 
associated with some of these developments and it is no secret 
that the unconventional style of some of these innovators was 
sometimes difficult for their large organizations to adjust to.
    But even less iconoclastic officers have had difficulties 
when they clashed with perceived wisdom. In the period between 
the wars, one infantry officer began writing about the future 
of armored warfare, only to have his commander tell him that if 
he published anything contrary to ``solid infantry doctrine'' 
it would mean court-martial. The commander even tried to 
scuttle that officer's career. It took the personal 
intervention of Pershing's chief of staff to put that soldier's 
career on a new path. That officer so interested in the future 
of armored warfare was Dwight Eisenhower.
    One of our fundamental goals is to encourage all the 
potential Eisenhowers who are thinking about war of the future. 
Instead of stifling those who seek to look forward so we can 
lean forward when necessary, we must encourage and reward them. 
We need to accelerate the development of a culture that 
supports the sort of innovation, flexibility, and vision that 
can transform the face of battle.
    From my observations, the Armed Forces today are much more 
congenial toward innovation and innovators. Certainly the way 
in which General Tommy Franks has experimented in Afghanistan 
demonstrates an openness to change, an openness that is helping 
us win the war and transform the military.
    One of the best arenas for encouraging our forces to try 
hard, lean forward, and risk failure is through field 
exercises. Field exercises that incorporate experimentation at 
both the joint and the service levels provide an indispensable 
means for tackling emerging challenges. In the period between 
the wars, Marine Major Pete Ellis perceived that war in the 
Pacific was likely to come, and he proposed the landing concept 
that we now call amphibious warfare. Taking Ellis's idea from 
the drawing board to practice beaches resulted in success at 
Iwo Jima, Okinawa, and elsewhere in World War II.
    General Kernan will be able to address in more detail how 
Joint Forces Command is developing a joint experimentation plan 
that uses war games, synthetic environment experiments, and 
field experiments to develop and evaluate joint concepts.
    Likewise, training must go hand-in-hand with the fielding 
of new concepts and capabilities. We must train as we will 
fight, and today we will always fight in combinations of 
mission-oriented joint forces. We must, therefore, emphasize a 
culture that stresses joint sharing of information, concepts, 
and awareness to ensure that our troops can fight on day one of 
the battle with experience and confidence. A centerpiece of our 
training transformation effort will be a joint national 
training center.
    We have also seen the need in our transformation efforts to 
redesign some of our military organizations to harness the 
tremendous power of new technologies and exploit the synergy of 
joint forces. DOD is taking steps to realign its organizations 
to better integrate and deploy combat organizations that can 
respond rapidly to events that occur with little or no 
warning--the type of environment that characterizes our world 
today.
    To strengthen joint operations, the Department is 
developing options to establish standing joint task force 
headquarters with uniform standard operating procedures, 
tactics, techniques, and technical system requirements, thereby 
permitting the movement of expertise among commands. The 
Department is also examining options for establishing actual 
standing joint task forces. Standing joint task force 
organizations could provide the organizational means to achieve 
a network capability and serve as the vanguard for the future 
transformed military.
    Finally, we also need to ensure that the classroom 
education our senior military leaders receive includes military 
transformation, an education that nurtures innovative thinking 
and encourages risk-taking and willingness to confront failure 
in the pursuit of new ideas and capabilities.
    In conclusion, Mr. Chairman, even as we fight this war on 
terror, potential adversaries scrutinize our methods. They 
study our capabilities, they seek our weaknesses, they plan for 
how they might take advantage of what they perceive as our 
vulnerabilities. So as we take care of today, we must invest in 
tomorrow. We are emphasizing multiple transformations that, 
combined, will fundamentally change warfare in ways that could 
give us important advantages and help us secure the peace for 
coming generations.
    We realize that achieving this goal requires transforming 
our culture and the way we think. We must do this even as we 
fight this difficult war on terrorism. We cannot afford to 
wait.
    Thank you.
    [The prepared statements of Secretary Wolfowitz, General 
Pace, Admiral Cebrowski, and General Kernan follow:]
              Prepared Statement by Hon. Paul D. Wolfowitz
                   the imperative for transformation
    Mr. Chairman and members of the committee: You have provided our 
country great bipartisan support and strong leadership, and our 
relationship with the committee and its staff has been truly 
outstanding. I appreciate the opportunity to return today to talk about 
how the Department of Defense plans to meet the challenges of the 21st 
century through the transformation of our forces.
    This committee and Congress have played a major role in 
transformation efforts in the past, including the role in several 
institutional changes of transformational character, such as the 1947 
National Security Act, the 1973 All-Volunteer Force Act, and the 1986 
Goldwater-Nichols Act. Congress has sponsored and supported numerous 
transformational technologies, including stealth, cruise missiles and 
precision-guided munitions. As we undertake what may be the most 
significant transformation of our military forces in many decades, we 
hope to continue to work closely with Congress to achieve our common 
national security objectives.
    In the civilian economy today, we are witnessing a transformation 
in the manner, speed and effectiveness with which industrial and 
commercial tasks can be accomplished; these transformational efforts 
derive from the impact of advances in technology in computing, 
communicating and networking that, taken together, constitute an 
information revolution whose effects extend far beyond technology into 
the organization and even the culture of the business and commercial 
worlds.
    This enormous rate of change can be explained in significant 
measure by a law known as Moore's Law, after Gordon Moore, co-founder 
of Intel, who first advanced the proposition that the power of 
computers will double every 18 months or so. Put more dramatically, 
that means that the power of computers increases by a factor of a 
thousand in a little more than a decade. But, the effect of this, as we 
know from daily life, extends far beyond just technological changes. 
Indeed, transformations that result from increased capability are due, 
in even greater measure, to innovative minds that take this technology 
and use it to transform everything--from how we work to how we navigate 
on the highways and how we ship packages around the world.
    This transformational potential affects our military as well--in 
terms of both hardware and brainpower. In the current campaign, for 
example, young non-commissioned officers routinely integrate multiple 
intelligence collection platforms by simultaneously coordinating what 
amounts to several ``chat rooms.'' We have seen them creatively 
improvise with new military applications not unlike the technology they 
have grown up with. They display an agility that comes from being 
completely comfortable with this new way of doing things.
    In the same way, the agility that we need to continue meeting 
threats here and abroad depends on more than just technology, although 
that must be a fundamental part of our response. It is tied to changing 
our organizational designs and embracing new concepts. Transformation 
is about more than what we buy or how much we spend on technology. One 
of my key points today is that transformation is about changing the 
military culture into one that encourages, in Secretary Rumsfeld words, 
``innovation and intelligent risk taking.''
    Twelve months ago, some might have questioned the continued 
investment in improving our advantage, in real and intellectual 
capital. Given the huge military lead we enjoy, some were even asking: 
who will fight us now? But, September 11, brought home the fact that, 
while it is likely few would seek to meet us head to head, they can 
still attack us. They can still threaten us. When they did attack last 
September, using box cutters and jetliners, our response required much 
more than just box cutters and jetliners. Our response, as we seek to 
deny future terrorists avenues to similar attack, has been--and must 
be--disproportionately asymmetrical. It does not come cheaply or 
without great effort at innovation.
    My second key point is that, although we now face the enormous 
challenge of winning the global war on terrorism, we must also address 
the equally large challenge of preparing our forces for the future. We 
cannot wait for another Pearl Harbor or September 11, either on the 
ground, in space or in cyberspace. Our ability either to deter or 
defeat aggression will continue to demand unparalleled capabilities--
from technology to training and decision-making. That is why we must 
develop the transformational capabilities that will provide our crucial 
advantages a decade or more from now. Even as we take care of today, we 
must invest in tomorrow--an investment we simply cannot postpone. It is 
a process of balancing the risks of today with those of tomorrow, one 
that that should ultimately redefine how we go to war.
    In the 1920s and 1930s, the French and British military 
establishments looked on the transformational issues of the time with a 
victor's sense that the next war would be fought like the last. But by 
the spring of 1940, with the Germans' lightning strikes across the 
Meuse and through the Ardennes, it was clear then that blitzkrieg--a 
term coined by Western journalists to describe this unmistakably new 
phenomenon--had redefined war and would shape battles for years to 
come.
    We do not have to look back 60 years--or even 20 years--to find 
dramatic examples of military transformations. In Afghanistan today, 
brave Special Forces on the ground have taken 19th century horse 
cavalry, combined it with 50-year-old B-52 bombers, and using modern 
satellite communications, have produced truly 21st century capability. 
When asked what he had in mind in introducing the horse cavalry back 
into modern war, Secretary Rumsfeld said, ``it was all part of the 
transformation plan.'' It is. Transformation can mean using old things 
in new ways--a natural result of creative innovation.
    These two examples suggest my final key point: our overall goal is 
to encourage a series of transformations that, in combination, can 
produce a revolutionary increase in our military capability and 
redefine how war is fought.
    In the example from Afghanistan, we can see how dramatically our 
military has changed in just the 11 years since the Persian Gulf War. 
During that war, one of our biggest concerns was trying to destroy Scud 
missiles, the only Iraqi system whose capability we had underestimated. 
We flew hundreds of sorties and dropped thousands of pounds of bombs in 
the attempt to attack these elusive and fleeting targets that our 
pilots could not find from the air. Brave Special Operations Forces on 
the ground in western Iraq succeeded in finding Scuds, but did not have 
the capability to direct air strikes. In the end, as a result, we 
managed to take out only one Scud ``launcher,'' and that one was a 
decoy. The successful operations in Afghanistan demonstrate how much 
progress has been made in the last decade, but that is only a glimpse 
of where we can go in the decades to come.
    Long before September 11, the Department's senior leaders--civilian 
and military--began an unprecedented degree of debate and discussion 
about where America's military should go in the years ahead. Out of 
those intense debates, we agreed on the urgent need for real changes in 
our defense strategy. The outline of those changes is reflected in the 
Quadrennial Defense Review and the 2003 budget request.
    Our conclusions have not gone unnoticed. One foreign observer 
reported that the QDR contains ``the most profound implications'' of 
the four major defense reviews since the end of the Cold War. What is 
most interesting about this analysis is its source: a Chinese military 
journal. That Chinese observer thinks the QDR is important as a outline 
for where we go from here--and we think so, too.
    Among the new directions set in the QDR, the following four are 
among the most important:
    First, we decided to move away from the two Major Theater War (MTW) 
force planning construct, which in its day was a major shift from the 
Cold War paradigm that planned for a global war focused on the defense 
of Europe from a massive Soviet invasion. The two MTW concept called 
for maintaining forces capable of nearly simultaneously marching on and 
occupying the capitals of two regional adversaries and changing their 
regimes. Today's new approach emphasizes deterrence in four critical 
theaters, backed by the ability to swiftly defeat two aggressors in the 
same timeframe, while preserving the option for one major offensive to 
occupy an aggressor's capital and replace the regime. By removing the 
requirement to maintain a second occupation force, we gain more 
flexibility in planning for a wider array of contingencies, and we gain 
more flexibility in investing for the future.
    Second, during the QDR the senior civilian and military leaders 
agreed on a new framework for assessing risk. We agreed that we 
couldn't simply judge the program on how it addressed near-term 
warfighting risks. A new framework was required, one that would get 
other risk up on the table as well. We identified four categories of 
risk: force management risks dealing with how we sustain our people, 
equipment, and infrastructure; operational risks dealing with the 
ability of our forces to accomplish the missions called for in near-
term military plans; future challenges risks dealing with the 
investments and changes needed today to permit us to deal with military 
challenges of the more distant future; and institutional risks involved 
with inefficient processes and excessive support requirements that 
jeopardize our ability to use resources efficiently. The approach we 
adopted in light of this framework sought to balance risks in all of 
these categories, and avoid extreme solutions that would lower risks in 
some areas while raising other risks to unacceptable levels. While 
reasonable people may differ on specific decisions regarding our 
investments and budgetary decisions, it is important that we understand 
the need to balance among the different risks that we confront.
    Third, to confront a world of surprise and uncertainty, we are 
shifting our planning from the ``threat-based'' model that has guided 
our thinking in the past to a ``capabilities-based'' model for the 
future. We don't know who may threaten us or when or where. But, we do 
have some sense of what sort of capabilities they may threaten us with 
and how. We also have a sense of which capabilities can provide us 
important new advantages.
    Fourth, to support this capabilities-based approach to force 
planning, we worked to define goals to focus our transformation 
efforts. Historically, successful cases of transformation have occurred 
in the face of compelling strategic and operational challenges. 
Therefore, we endeavored to determine what those challenges in the 21st 
century and the goals to address them might be.
             many transformations to revolutionize warfare
    The U.S. military is pursuing not a single transformation, but a 
host of transformations including precision, surveillance, networked 
communications, robotics and information processing. When these 
transformations come together, the resulting synergy could produce a 
revolutionary level of improvement in the ability of U.S. joint forces 
to dominate the battlespace. The convergence of military 
transformations within our land, air, sea, space, and information 
forces could allow the development of new concepts of operations that 
will further exploit our ability to conduct military actions in a 
parallel rather than a sequential manner. We will be better able to 
overcome the enormous challenges posed by distance and geography. In 
short, transformations over the next several decades can give U.S. 
forces new asymmetric advantages while reducing many of our current 
vulnerabilities.
  six transformational goals--taking care of today while investing in 
                                tomorrow
    Setting specific transformation goals has helped to focus our 
transformation efforts, from investments to experimentation and concept 
development. The six goals identified in the QDR are:

         First, to defend the U.S. homeland and other bases of 
        operations, and defeat nuclear, biological and chemical weapons 
        and their means of delivery;
         Second, to deny enemies sanctuary--depriving them of 
        the ability to run or hide-anytime, anywhere.
         Third, to project and sustain forces in distant 
        theaters in the face of access denial threats;
         Fourth, to conduct effective operations in space;
         Fifth, to conduct effective information operations; 
        and
         Sixth, to leverage information technology to give our 
        joint forces a common operational picture.
Protecting Critical Bases of Operations and Defeating NBC Weapons
    Above all, U.S. forces must protect critical bases of operations 
and defeat weapons of mass destruction and their means of delivery. No 
base of operations is more important than the U.S. homeland. Defending 
the American homeland from external attack is the foremost 
responsibility of the U.S. Armed Forces. Vast oceans and good neighbors 
no longer insulate the United States from military attacks that emanate 
from abroad. The attacks of September 11 revealed the vulnerability of 
America's open society to terrorist attacks. Therefore, we must shore 
up our vulnerabilities to all forms of attacks.
Projecting and Sustaining Forces in Anti-Access Environments
    Future adversaries are seeking capabilities to render ineffective 
much of the current U.S. military's ability to project military power 
overseas. Today, U.S. power projection depends heavily on access to 
large overseas bases, airfields, and ports. Saturation attacks by 
ballistic or cruise missiles armed with nuclear, biological, or 
chemical warheads could deny or disrupt U.S. entrance into a theater of 
operations. Advanced air defense systems could deny access to hostile 
airspace to all but low-observable aircraft. Military and commercial 
space capabilities, over-the-horizon radars, and low-observable 
unmanned aerial vehicles could give potential adversaries the means to 
conduct wide-area surveillance and track and target American forces.
    New approaches for projecting power are needed to meet these 
threats. These approaches must place a premium on enhancing U.S. 
defenses against missiles and NBC weapons; conducting distributed 
operations; reducing the dependence of U.S. forces on major air and sea 
ports for insertion; increasing U.S. advantages in stealth, standoff, 
hypersonic and unmanned systems for power projection; and developing 
ground forces that are lighter, more lethal, more versatile, more 
survivable, more sustainable, and rapidly deployable.
Denying Enemies Sanctuary
    Adversaries will also seek to exploit territorial depth and the use 
of mobile systems, urban terrain, and concealment to their advantage. 
Mobile ballistic missile systems can be launched from extended range, 
exacerbating the anti-access and area-denial challenges. Space denial 
capabilities, such as ground-based lasers, can be located deep within 
an adversary's territory. Accordingly, a key objective of 
transformation is to develop the means to deny sanctuary to potential 
adversaries--anywhere and anytime.
    This will require the development and acquisition of robust 
capabilities to conduct persistent surveillance of vast geographic 
areas and long-range precision strike--persistent across time, space, 
and information domains and resistant to determined denial and 
deception efforts. The awesome combination of forces on the ground with 
long-range precision strike assets was amply demonstrated in 
Afghanistan. It offered a glimpse of the potential future that 
integration efforts can achieve if consciously exploited through U.S. 
transformation and experimentation efforts.
Leveraging Information Technology
    U.S. forces must leverage information technology and innovative 
network-centric concepts of operations to develop increasingly capable 
joint forces. Our ability to leverage the power of information and 
networks will be key to our success in the 21st century. New 
information and communications technologies hold promise for networking 
highly distributed joint and multinational forces and for ensuring that 
these forces have better situational awareness-about friendly forces 
and those of adversaries-than in the past. C\4\ISR systems draw combat 
power from the networking of a multitude of people using an array of 
platforms, weapons, sensors, and command and control entities, which 
are collectively self-organized through access to common views of the 
battlespace. Leveraging information technology and harnessing the power 
of networks poses three challenges: We must make information available 
on a network that people will be willing to depend on and trust. We 
must populate that network with new types of information needed to 
defeat future enemies and make existing information more readily 
available. We must deny enemies' information advantages against us. The 
ultimate goal is to empower U.S. forces through the network, as 
Assistant Secretary of Defense John Stenbit has put it, ``to move power 
to the edge.'' The edge doesn't just mean the guy in the foxhole--it 
refers to anyone who urgently needs information anywhere on the 
network.
Assuring Information Systems and Conducting Information Operations
    Information systems must be protected from attack and new 
capabilities for effective information operations must be developed. 
The increasing dependence of advanced societies and military forces on 
information networks creates new vulnerabilities. Potential adversaries 
could exploit these vulnerabilities through their own computer network 
attacks. Closely coordinating U.S. offensive and defensive capabilities 
and effective integration of both with intelligence activities will be 
critical to protecting the current U.S. information advantage.
Enhancing Space Capabilities
    The Department of Defense must enhance the capability and 
survivability of its space systems. Both friends and potential 
adversaries will become more dependent on space systems for 
communications, situational awareness, positioning, navigation, and 
timing. In addition to exploiting space for their own purposes, future 
adversaries will likely also seek to deny U.S. forces unimpeded access 
to and the ability to operate through and from space. A key objective 
for transformation, therefore, is not only to capitalize on the 
manifold advantages space offers the United States but also to close 
off U.S. space vulnerabilities that might otherwise provoke new forms 
of competition. U.S. forces must ensure space control and thereby 
guarantee U.S. freedom of action in space in time of conflict.
    Taken together, these six goals will guide the U.S. military's 
transformation efforts and improvements in our joint forces. Over time, 
they will help to shift the balance of U.S. forces and capabilities. 
U.S. ground forces will be lighter, more lethal, and highly mobile; 
they will be capable of insertion far from traditional ports and air 
bases; and they will be networked to leverage the synergy that can come 
from ground forces and long-range precision fires from the air and sea. 
Naval and amphibious forces will be able to assure U.S. access even in 
area-denial environments, operate close to enemy shores, and project 
power deep inland. Air and space forces will be able to locate and 
track mobile targets over vast areas and strike them rapidly at long-
ranges without warning. These future attributes are the promise of U.S. 
transformation efforts.
Providing Capabilities to Meet the Transformational Goals
    While new technologies represent only a portion of the Department's 
overall transformation program, transformational investments account 
for 17 percent (about $21 billion) of all procurement and research, 
development, test, and evaluation (RDT&E) in 2003, rising to 22 percent 
by 2007. Over the next 5 years, we plan to invest more than $136 
billion in transformational technologies and systems. Of this, $76 
billion represents new investments to accelerate or start new 
transformation programs.
    It is important to note that we have applied a very strict 
definition to programs we include in these totals as transformational 
(the system should offer the warfighter a distinctly new kind of 
capability). Many things that enable transformation, or extend current 
capabilities, are not included in these figures. For example, the $1.7 
billion in this budget for funding for the Joint Direct Attack 
Munitions (JDAMs) and other precision guided munitions. This category 
also includes buying more C-17s to modernize our lift capability, and 
buying stealthy F-22s, and is, in fact, critical to making 
transformation work. The total additional investment in systems to 
support transformation approaches $25 billion in the fiscal year 2003 
budget and $144 billion over the FYDP.
    Not included in either of these totals is the $10.5 billion that 
the budget invests in programs for combating terrorism, which is $5.1 
billion more than we were investing in that area just 2 years ago and 
approximately $3 billion more than we have budgeted on missile defense 
in 2003. That is due, in very great measure, to new priorities we must 
address in the wake of September 11--needs that range from immediate 
necessities of hiring guards and building jersey barriers to long-term 
necessities like training first responders and refining our 
intelligence response to the on-going threat of terrorism.
    There are many new transformation starts in this budget, many of 
which will not reach fruition within our programming horizon. Because 
they are new programs, there are limits to how much we can usefully 
invest in today. However, many R&D programs today, if successful, will 
place increased demands on procurement in the out-years. As 
transformation initiatives mature, we need to be prepared to make 
adjustments in the programs to take advantage of success. In doing so, 
however, we will constantly have to weigh the risks I referred to 
earlier between the need to be adequately prepared for future wars and 
the need to sustain the current force and to be adequately prepared for 
war tomorrow.
    Let me highlight some of the capabilities we are investing in to 
meet the transformation goals:
    Protecting Bases of Operations. To address the goal of protecting 
the homeland and other bases of operations, and defeating nuclear, 
biological, and chemical (NBC) weapons and their delivery means, we are 
pursuing advanced biological defenses and accelerating the development 
of missile defenses. Missile defense investment includes increased 
funding for the Airborne Laser program, a directed energy weapons to 
destroy ballistic missiles in their boost-phase. The budget invests $8 
billion in transformational capability to support defense of the U.S. 
homeland and forces abroad--$45.8 billion over the Future Years Defense 
Plan (2003-2007), an increase of 47 percent from the previous FYDP.
    Projecting Power in Denied Areas. To address the goal of projecting 
power into denied areas, we are developing new, shallow-draft fast 
transport ships to move forces into contested littoral areas more 
rapidly and less dependent on traditional ports. Similarly, we are 
developing the V-22 aircraft for inserting amphibious and special 
operations forces into denied areas. We are also developing unmanned 
underwater vehicles that can help to assure U.S. naval access in denied 
areas. Overall, the 2003 budget requests $7.4 billion for programs to 
support the goal of projecting power into denied areas, and $53 billion 
over the 5 year FYDP (2003-2007)--an increase of 21 percent.
    Denying Enemies Sanctuary. In the area of denying enemies 
sanctuary, we are developing a space-based radar system to provide a 
persistent, global ground surveillance and tracking capability. We are 
converting four SSBNs to carry more than 150 Tomahawk cruise missiles 
each and up to 66 SEALs.
    We are also accelerating a number of unmanned vehicle programs. 
Unmanned surveillance and attack aircraft like Global Hawk and Predator 
offered a glimpse of their potential in Afghanistan. The 2003 budget 
increases the number of unmanned aircraft being procured and 
accelerates the development of new unmanned combat aerial vehicles 
capable of striking targets in denied areas and sustaining persistent 
surveillance and strike capability over key targets. The budget 
includes $1 billion to increase the development and procurement of 
Global Hawk, Predator, and unmanned combat aerial vehicles.
    DOD is also taking steps to shift the balance of its weapons 
inventory to emphasize precision weapons--weapons that are precise in 
time, space, and in their effects. We are developing a range of new 
precision and miniature munitions for attacking deep underground 
facilities, mobile targets, and targets in dense urban areas and for 
defeating chemical and biological weapons. We are also developing new 
families of ground-launched munitions, such as the GPS-guided Excaliber 
artillery round that will further the precision revolution in our 
ground forces. The 2003 budget requests $3.2 billion for 
transformational programs to support the objective of denying sanctuary 
to adversaries, and $16.9 billion over the 5 year FYDP (2003-2007)--an 
increase of 157 percent.
    Leveraging Information Technology. We are also leveraging 
information technology to create a single, integrated air picture. We 
have increased investment in datalinks and communications, such as 
Link-16, needed to transmit targeting information rapidly from sensors 
to shooters. We are pursuing the development of laser communications in 
space that has the potential to provide fiber optics-quality broadband, 
secure communications anytime and anywhere U.S. forces may operate. 
This capability could have a revolutionary effect across many of our 
programs because bandwidth limitations are one of the key constraints 
on our ability to exploit unmanned systems, networked information 
systems, and new surveillance capabilities. Laser communications is a 
good example of the synergistic effects that capabilities in one area 
can have on others. The 2003 budget requests $2.5 billion for programs 
to support the objective of leveraging information technology, and 
$18.6 billion over the 5 year FYDP (2003-2007)--an increase of 125 
percent.
    Conducting Effective Space and Information Operations. Finally, we 
are increasing investments also in information and space operations. 
Many of these are highly classified programs. The 2003 budget requests 
$174 million for programs related to information operations--$773 
million over the 5-year FYDP (2003-2007)--an increase of 28 percent. 
The 2003 budget requests about $200 million to strengthen space 
capabilities--$1.5 billion over the 5-year FYDP (2003-2007)--an 
increase of 145 percent.
    We couldn't have made these investments without terminating a 
number of programs and finding other savings. Although this year's 
defense budget increase is the largest in a long time, virtually the 
entire increase was ``spoken for'' by needed increases to cover 
inflation ($6.7 billion), ``must-pay'' bills for health care and pay 
raises ($14.1 billion), unrealistic costing of readiness and 
procurement ($7.4 billion), and funding the war ($19.4 billion). We 
have saved some $9.3 billion by terminating a number of programs. Major 
terminations include the DD-21 Destroyer program, which has been 
replaced by a restructured DD (X) program that will develop a new 
family of surface combatants with revolutionary improvements in 
stealth, propulsion, and manning levels. We have cut 18 Army legacy 
systems. Although the Navy Area Missile Defense program was terminated 
because of delays, poor performance and cost growth, we are still 
looking to develop sea-based defenses under a replacement program.
    It is important to point out that in the area of missile defense, 
we are pursuing some parallel technologies to meet the same 
objectives--for example, the kinetic kill boost vehicle and a space-
based laser. At this point, we are not certain which of these programs 
will work best. But, we think that pursuing both will help us reach our 
goal faster--success in one will inform the other. As we continue, 
however, it is very likely that one of these programs will not survive. 
As with the Navy Area Missile Defense program, when it becomes clear we 
have reached a dead end, we must be willing to cut a program, take what 
we have gained, and redirect our energy and efforts in more potentially 
productive directions. This sort of intelligent risk taking, which can 
sometimes produce dead-ends, is a necessary part of transformation.
   transformation: beyond platforms and systems--changing the culture
    As we have seen in Afghanistan, transformation is more than a 
simple introduction of new technology. Although the Germans were the 
first to make tanks a decisive instrument of war, they did not invent 
the tank; nor were they the first to use the tank in combat, or in 
figuring out that tanks could prove decisive in warfare. What they did 
do first was use it to devastating effect through: the combination of 
armor with air and radio communications; the willingness to risk 
employing a new and bold doctrine; allowing armor to emerge in an army 
traditionally dominated by infantry; delegating responsibility to lower 
levels so that units could operate with the autonomy that armor and 
radio communications could give them. The success of blitzkrieg went 
beyond technology. It even went beyond doctrine, beyond speed, beyond 
communications. It was when all these elements came together that 
blitzkrieg was born. It was a culture change from top to bottom.
    We may draw other transformation lessons from changes in culture. 
The introduction of the all-volunteer force was certainly 
transformational. Throughout the Cold War, one measurement of the 
military balance was through end strength comparisons between Warsaw 
Pact and NATO forces. After Vietnam, the U.S. moved away from 
conscription. This bold move meant a smaller force, but a force that 
was better trained, better prepared, and more highly motivated. The end 
result is a peerless cadre of officers and NCOs who are dedicated to 
serving our Nation.
    Another transformational development is in our unparalleled ability 
to conduct night operations. Particularly given our experiences in 
Vietnam, we knew we had to fundamentally reduce our vulnerabilities in 
this area. So, we acquired technology such as night vision goggles, 
that allow us to virtually turn night into day. We conduct extensive 
night training operations. We have turned a vulnerability into an 
advantage. Today, it is not hyperbole to say we ``own the night.''
    The campaign in Afghanistan has planted the seeds of culture 
changes in other areas that will prove to be as significant, I think. 
Historically, Special Operations Forces have operated separately from 
conventional forces. But, this campaign necessitated their close 
integration with conventional forces, especially air forces. One of the 
results, of course, is the order of magnitude change in how precise we 
are in finding and hitting targets from just a decade ago. This is not 
only changing the culture of Special Operations Forces, but it is 
changing how the rest of the force thinks about Special Operations as 
well.
    What it means to be a pilot today is undergoing a transformation as 
well. Not long ago, an Air Force F-15 pilot had to be persuaded to 
forego a rated pilot's job to fly an unmanned Predator aircraft from a 
location far from the field of battle. It was a difficult choice for 
this woman who was trained in the traditional cockpit. But, she 
received assurance from the most senior leadership of the Air Force 
that her career would not suffer as a result. Of course, UAVs have made 
a significant impact in the current campaign and promise even greater 
operational impacts--which is why the Air Force leadership is working 
hard to encourage others to pilot UAVs and become trailblazers in 
defining new concepts of operations.
Accelerating cultural change and fostering innovation
    Some of the greatest military transformations in the 20th century 
were the product of American innovation--the development of amphibious 
warfare, aircraft carriers, stealth and nuclear-powered submarines, to 
name a few. Great names like Billy Mitchell and Hyman Rickover are 
associated with such developments, and it is no secret that the 
unconventional ways of some of these innovators were sometimes 
difficult for their large organizations to adjust to. But, less 
iconoclastic officers also had difficulties when they clashed with 
perceived wisdom.
    In the period between the wars, one infantry officer began writing 
about the future of armored warfare, only to have his commander tell 
him that if he published anything contrary to ``solid infantry 
doctrine,'' it would mean court-martial. The commander even tried to 
scuttle the officer's career. It took the intervention of Pershing's 
chief of staff to put the soldier's career on a new path. That officer, 
so interested in the future of armored warfare, was Dwight Eisenhower.
    One of our fundamental goals is to encourage all the potential 
Eisenhowers who are thinking about war of the future. Instead of 
stifling those who seek to look forward so we can lean forward when 
necessary, we must encourage and reward them. We intend to accelerate 
the development of a culture that supports the sort of innovation, 
flexibility and vision that can truly transform the face of battle.
    From my observations, the Armed Forces today are much more 
congenial toward innovation and innovators. Certainly the way in which 
the Commander of Central Command, General Tommy Franks, has 
experimented in Afghanistan demonstrates an openness to change--an 
openness that is helping us win the war and transform the military. 
But, it will always be a challenge for a large institution like the 
Department of Defense to encourage innovation while, at the same time, 
allowing the organization to continue getting its job done. We have to 
work constantly to encourage that creative tension.
    Another way we can support the acceleration of a more innovative 
culture is through the processes of experimentation and training. In an 
environment where real intellectual R&D takes place, intelligent risks 
don't produce failure. They produce insights and lessons. Taking risks 
is all part of a discovery process, captured by the Rumsfeld Rule that 
states: ``When you're skiing, if you're not falling you're not 
trying.''
Experimentation and Concept Development
    One of the best arenas for encouraging our forces to try hard, lean 
forward and risk failure is through field exercises. Over the last 
century, military field exercises and experiments that were oriented 
toward emerging challenges at the operational level of war have been 
important enablers of military innovation and transformation.
    Field exercises that incorporate experimentation--at both the joint 
and the service levels--provide an indispensable means for tackling 
emerging challenges. In the period between the wars, Marine Major Pete 
Ellis perceived that war in the Pacific was likely to come, and he 
proposed a landing concept that we now call amphibious warfare. The 
Marine Corps saw that the realization of this doctrine would require 
special training and special equipment. Over time, and through repeated 
exercises, the Marines perceived the need for three different types of 
landing craft: one for the first troop assault; a second for the second 
larger troop landing; and a third to put tanks ashore. Taking Ellis's 
idea from the drawing board to practice beaches resulted in success in 
the sands of Iwo Jima, Okinawa and others.
    The ability of modern communications to integrate widely disparate 
forces puts a much greater premium on joint operations than we have 
already recognized with Goldwater-Nichols and the many innovations that 
flowed from it. Along with experimentation, the development of joint 
operational concepts and operational architectures will drive material 
and non-material transformation solutions and establish standards for 
interoperability, in much the same way that amphibious warfare was 
perfected. New operational concepts-the end-to-end stream of activities 
that define how force elements, systems, organizations, and tactics 
combine to accomplish military tasks--are critical to the 
transformation process. They may even reveal how we can accomplish our 
aims with fewer people and resources.
    General Kernan can address in more detail how Joint Forces Command 
(JFCOM) is developing a joint experimentation plan that uses wargames, 
synthetic environment experiments, and field experiments to develop and 
evaluate joint concepts. This summer, JFCOM will conduct Millennium 
Challenge, an exercise that seeks to exploit our asymmetric advantages 
through joint operations.
Training
    Secretary Rumsfeld has said that, if you were to give a knight in 
King Arthur's court an M-16, and he uses the stock to knock his 
opponent's head, that is not transformational. Rather, transformation 
occurs when the knight gets behind a tree and starts shooting. But, 
just because he starts shooting, that doesn't make him a marksman--only 
training can do that.
    Likewise, training must go hand in hand with the fielding of new 
concepts and capabilities. We must train as we will fight. We must 
train as we will fight. Today, we will always fight with combinations 
of mission-oriented joint forces--selected from our services and those 
of our allies. We must therefore emphasize a culture that stresses 
joint sharing of information, concepts and awareness to ensure our 
troops can fight on day one of the battle with experience and 
confidence. At the conclusion of Desert Storm, when I visited the 2nd 
Armored Division inside Iraq with then-Defense Secretary Cheney, the 
Secretary asked a very tough Senior Master Sergeant whether the war had 
been difficult. The sergeant answered: ``not nearly as tough as the 
National Training Center.''
    Recognizing how important such training has been to our operations, 
a centerpiece of our training transformation effort will be the Joint 
National Training Center, which will include a live training component 
connecting multiple live training exercises and allowing ``best of'' 
practices to circulate among the services. It will also include a 
virtual capability that will link main service training centers. Over 
time, we want to increase the amount of joint field training that our 
forces receive as well. Ultimately, these practices will encourage all 
the services to fight jointly because they have trained jointly.
Organizational Redesign
    We have seen the need in our transformation efforts to redesign 
some of our military organizations to harness the tremendous power of 
new technologies and exploit the synergy of joint forces. In the early 
1900s, the head of the Royal Navy, Admiral Jackie Fisher, recognized a 
similar need. He understood that the British Navy was no longer arrayed 
for war as it was likely to unfold in the coming century. He initiated 
a dramatic reconceptualization of the Navy's organization, its missions 
and how it would carry out its tasks. His visionary strategy included 
both weapons and doctrines that would come on line over a period of 
time. His vision helped produce a revolutionary new battleship as well 
as an organizational structure more suited to the world as it was then.
    In the same way, DOD is taking steps to realign its organizations 
to better integrate and deploy combat organizations that can respond 
rapidly to events that occur with little or no warning--the type of 
environment that characterizes our world today. Joint forces must be 
scalable and organized into modular units that allow combatant 
commanders to combine the appropriate forces to deter or defeat a 
specific adversary. They must be organized to enhance the speed of 
deployment, speed of employment and the speed of sustainment. The 
forces must be highly networked with joint and multinational command 
and control, and they must be able to integrate into multinational 
operations.
    To strengthen joint operations, the Department is developing 
options to establish Standing Joint Task Force (SJTF) headquarters in 
each of the regional combatant commands. Each headquarters will be 
established under uniform, standard operating procedures, tactics, 
techniques, and technical system requirements, thereby permitting the 
movement of expertise among commands. Each SJTF headquarters will have 
the means to develop a common relevant operational picture of the 
battlespace for joint and multinational forces. It will also have 
mechanisms for a responsive integrated logistics system that provide 
warfighters easy access to necessary support without burdensome lift 
and infrastructure requirements. SJTF headquarters will also use 
adaptive mission planning tools that allow U.S. forces to operate 
within the adversary's decision cycle and respond to changing 
battlespace conditions.
    Related to the development of such headquarters, the Department is 
also examining options for establishing actual SJTFs. SJTF 
organizations could provide the organizational means to achieve a 
networked capability. They would employ new concepts to exploit U.S. 
asymmetric military advantages and joint force synergies at lower total 
personnel levels. A single Standing Joint Task Force could serve as the 
vanguard for the future transformed military. It could undertake 
experiments as new technologies become available as well as offer 
immediate operational benefits.
Professional Military Education
    We also need to ensure that the classroom education our senior 
military leaders receive includes military transformation. As these 
leaders go on to assume greater and greater responsibilities for 
military operations, personnel, acquisition and administration, it is 
vital that they appreciate the importance of transforming the military 
and that we instill in them a spirit that not only tolerates, but 
nurtures innovative thinking and encourages risk-taking and failure in 
the pursuit of new ideas and capabilities. We want to inculcate in them 
an entrepreneurial spirit and an understanding of how militaries have 
been transformed historically, as well as an awareness of how private 
companies have transformed themselves in the face of discontinuous 
change.
Conclusion
    Even as we fight this war on terror, potential adversaries 
scrutinize our methods, they study our capabilities, they seek our 
weaknesses. They plan for how they might take advantage of what they 
perceive as our vulnerabilities. So, as we take care of today, we are 
investing in tomorrow. We are emphasizing multiple transformations 
that, combined, will fundamentally change warfare, in ways that could 
give us important advantages that can help us secure the peace. We 
realize that achieving this goal requires transforming our culture and 
the way we think. We must do this even as we fight this difficult war 
on terrorism. We cannot afford to wait.
                                 ______
                                 
              Prepared Statement by Gen. Peter Pace, USMC
                              introduction
    Mr. Chairman, thank you for the opportunity to appear before the 
distinguished members of this committee. Today is an excellent time to 
discuss the transformation of America's Armed Forces as we prosecute 
the global war on terrorism and prepare ourselves to face future 
threats. We've been working the issue of military transformation and 
welcome the additional emphasis placed on this critical process by 
Congress. We must pursue this effort aggressively. I would like to 
comment on two areas: transformation paths and the transformation 
process.
    First, let me provide some context. In his remarks to the cadets at 
the Citadel this past December, President Bush made defense 
transformation central to winning the global war on terrorism. 
Subsequently, in January of this year, Secretary Rumsfeld outlined six 
key transformational goals in a speech at the National Defense 
University. The goals are: (1) Protect the U.S. homeland and our bases 
overseas; (2) project and sustain power in distant theaters; (3) deny 
enemies sanctuary; (4) protect U.S. information networks from attack; 
(5) use information technology to link up different kinds of U.S. 
forces so they can fight jointly; and (6) maintain unhindered access to 
space.
    Using this framework, General Myers stated that his goal is to 
foster changes that result in a dramatic improvement over time in the 
way a combatant commander wages war. We must continually pursue this 
transformational goal because our enemies will persist in attempts to 
neutralize or erode our superiority and exploit perceived weaknesses. 
Transformation is key to finding better ways to perform the fundamental 
mission of the Armed Forces: fighting and winning our Nation's wars.
    Pursuing a methodology to achieve these improvements includes the 
following key considerations: First, we must base the process for 
change on an overarching set of capabilities we believe our forces must 
possess to support our Nation's security requirements now and in the 
future. Second, we must develop joint operational concepts and 
architectures that drive decisions concerning materiel and non-materiel 
improvements to combat capabilities and to establish standards for 
interoperability. Third, since transformation involves more than 
fielding new systems, we must integrate requirements for new Doctrine, 
Organizations, Training, Materiel, Leadership and education, Personnel, 
and Facilities (DOTMLPF) into the transformation process. Fourth, we 
must find ways to modernize and integrate legacy systems when it makes 
sense. Finally, we must retain the ability to operate in coalitions. 
Fully exploiting these transformational objectives will require 
cultural change. This will be as much about ``mindset'' as it is about 
anything else.
                          transformation paths
    Transformation is a process, the objectives of which will be 
achieved on two paths: revolutionary breakthroughs and evolutionary 
modernization. Both are necessary; both must be underpinned by 
transformed mindsets.
    Revolutionary breakthroughs in the past have included new 
technologies, organizations and doctrine that have led to rapid, 
dramatic improvements in warfighting capabilities. Technologies and 
advances hold the potential to revolutionize certain aspects of 
warfare, profoundly shifting or making previous methods of warfare 
obsolete. Technologies, such as stealth and satellite surveillance, and 
organizational developments, such as Napoleon's use of independent 
corps formations, are examples of these breakthroughs. Significant 
transformational change has also been achieved through the cumulative 
evolutionary effect of modernization efforts. Both paths have the 
potential to dramatically improve the combatant commander's ability to 
wage war, particularly when the capabilities are applied across the 
joint force through new or innovative combinations. A case in point is 
the Global Positioning System (GPS). Originally conceived as an 
improved aid to navigation, GPS was not, in and of itself, 
transformational. But subsequent modernization efforts with GPS have 
enabled commanders to synchronize both communications and the movement 
of forces, as well as enable all-weather precision engagement. Although 
starting out as a modernization program, GPS has proven to be 
transformational, vastly improving the joint warfighting capabilities 
of all our combatant commanders.
    A significant transformational example is the mindset change 
fostered by the Goldwater-Nichols Act. Fifteen years after its 
enactment we have a joint force producing outcomes on the battlefield 
that would not have been possible had we stayed in our Service-centric 
approach to warfighting.
    Whether transformation comes in incremental steps or radical leaps, 
it must be balanced with the standing requirement to maintain readiness 
for today's conflicts and threats. If we only prepare for the future we 
will find ourselves at risk for today's threats; if we only prepare for 
today's threats we incur huge risks in the future. Thus changes through 
modernization can provide a hedge against near-term risk, while 
experimentation can produce the breakthrough developments we must 
pursue to be properly positioned against future threats.
                       the transformation process
    In the past, transformational efforts--such as the development of 
strategic bombing, carrier aviation, combined arms warfare and 
amphibious operations--have been service-specific. Today we seek to 
enhance our military capabilities across the joint battlespace. 
Therefore, transformation requires proactively combining, synchronizing 
and integrating various transformation efforts. We must ensure that the 
transformation process is characterized by unity of effort based on 
clearly defined goals. The Secretary of Defense defines these goals in 
his Defense Planning Guidance.
    The Joint Requirements Oversight Council (JROC) plays a critical 
role in this process. My predecessors put some teeth into the Joint 
Requirements Oversight Council and made it an engine for joint 
acquisition. The JROC now has front-end influence to ensure that major 
weapons systems are ``born joint.'' With my seat on the Defense 
Acquisition Board and my role in the budgeting process I can help 
ensure that all major systems are validated as ``joint'' before they 
are procured.
    We have already had some success with this newer process in program 
areas such as the Joint Direct Attack Munition and all-weather close 
air support. But the JROC must move beyond simply grading the services' 
homework. We must examine the Defense Planning Guidance, select 
specific goals that come properly within our purview, and be the 
driving force in attaining those specific goals.
    As I mentioned, experimentation is a key element in the 
transformation process. We've tasked United States Joint Forces Command 
(USJFCOM) to develop and evaluate joint operational concepts and 
architectures, conduct and evaluate experiments, recommend legacy 
system integration, provide feedback from the field, and recommend 
emerging operational concepts for evaluation. This summer, as a part of 
this ongoing effort, USJFCOM will conduct the largest joint field 
experiment to date, called Millennium Challenge 2002 (MC 02). The goals 
of MC 02 are two-fold: (1) to seek improvements in C\4\ISR by 
evaluating several joint warfighting concepts and related tactics, 
techniques and procedures; and (2) to seek improvements in our Armed 
Forces' ability to achieve rapid, decisive effects throughout the 
battlespace.
    Combatant commands play an important role in the transformation 
process as well. Although their primary focus is on near-term 
warfighting, they have the inherent authority and responsibility to 
submit doctrinal, organizational, training, or other change 
recommendations. Combatant commands also provide lessons learned from 
operations and exercises, such as what U.S. Central Command is doing in 
Afghanistan. These lessons are fed to USJFCOM for evaluation. Finally, 
combatant commands provide their warfighting requirements to the JROC. 
In these ways, current and near-term warfighting readiness issues 
inform the long-term transformation process.
    The services organize, train, and equip the force. Their efforts, 
as guided by the Defense Planning Guidance, will continue to be 
critical to the transformation process. They will develop and evaluate 
both service-specific and joint operational concepts and architectures; 
support joint concept development with service experimentation; support 
joint experimentation; provide feedback from the field; ensure future 
system development supports validated joint operational concepts and 
architectures; and also oversee integration of joint DOTMLPF 
recommendations. The Vice Chiefs of each service are members of the 
JROC and are ideally positioned to influence the transformation 
process.
                               conclusion
    Transformation is a process wherein we seek to make dramatic 
improvements in our warfighting capabilities. Breakthrough changes and 
modernization changes both contribute to the transformation process. To 
accomplish military transformation we must articulate goals, harvest 
ideas, modernize equipment, experiment, and change our mindset. The 
Nation's security demands that we pursue an aggressive and balanced 
approach to transformation. Thank you for the opportunity to appear 
before you and thank you for your consistently strong support of your 
soldiers, sailors, airmen, and marines.
                                 ______
                                 
    Prepared Statement by Vice Adm. Arthur K. Cebrowski, USN (Ret.)
    Chairman Levin, Senator Warner, members of the committee,
    I'm honored and grateful for the opportunity to appear before you. 
By virtue of the fact that you've called this hearing you recognize the 
significance of transformation in the Department's plans, and I look 
forward to a very robust dialogue on this matter of vital importance to 
the future of our Nation.
    There are many perspectives on transformation--many lenses through 
which we can view the issues before us. However, first and foremost, 
the President and the Secretary have elevated transformation to the 
level of strategy, and that is probably the most important lens through 
which we should look at transformation. Strategy is about how one 
selects a competitive space and determines the attributes within that 
space which will lead to advantage. Strategy answers the fundamental 
questions of how one controls the scope, pace and intensity of a 
competition. So we begin our work with strategy and the elements of the 
strategic environment that create opportunity and drive the compelling 
need for transformation.
    The current and future strategic environment has been described in 
terms of ``chaos,'' ``revolution,'' or simply ``change.'' Because 
social, cultural, economic and technological change is an indelible 
part of the world in which we live, transformation naturally flows from 
the profound changes happening around us. Impetus for our current 
transformation lies at the confluence of three broad trends. The first, 
and most important is the transition of our society from the Industrial 
Age to the Information Age. This is a transformation we are all living, 
so we should not expect our military to be immune from its effects. The 
second trend is the appearance of an expanded array of threats in a 
more uncertain context, and the third is the vast technological 
opportunities available to friend and foe alike. Individually, these 
trends provide a host of relevant issues to consider as we examine a 
potentially transformed U.S. military. Taken together they provide the 
starting points for discussion of the strategic, threat, and 
technological issues that drive the compelling need for transformation. 
The barriers to competitive entry are falling. Ours is the team against 
which everyone measures themselves, and to the extent we do not 
transform we provide would-be adversaries a fixed target. The success 
or failure of this transformation will determine the degree to which we 
and our allies are positioned to meet the security challenges of the 
21st century.
    While many within the DOD acknowledge the need for transformation, 
it clearly means different things to different people. For some, it is 
synonymous with modernization and focused on material acquisition. 
Others more appropriately see transformation going beyond modernization 
to embrace innovation and fundamental changes in our theory of war. 
Specifically, Network Centric Warfare (NCW) is such an innovation. Last 
year, in the conclusions of the report to Congress, the Department of 
Defense said that NCW should be the cornerstone of DOD's strategic plan 
for the transformation of forces. To date we have barely scratched the 
surface of what is possible. However, early experimentation by Joint 
Forces Command and the services has provided significant justification 
for continued investment in NCW as the foundation of future force 
capabilities. NCW will provide increasing return on investment by 
providing our most important resource--our people--the high quality 
shared awareness necessary to speed mission accomplishment. NCW 
capabilities will accelerate our ability to know, to decide and to act. 
The benefits of NCW are not dependent upon a particular geopolitical 
future or set of scenarios. NCW is at the heart of military 
adaptivity--the ability to respond to uncertainty in dynamic 
situations, day-to-day, at every level of warfare, and across the range 
of potential military operations. Both experimentation and practice 
show that a given level of warfighting effectiveness can be obtained 
with fewer resources when the transformation resident in network 
centric concepts and capabilities is embraced.
    How do we implement transformation? Transformation is not just 
about technology and ``things''. Rather, it is more about culture, 
behavior, and the creation and exploitation of promising concepts to 
provide new sources of military power. Creative concept development, 
combined with wide-ranging experimentation of various types is an 
essential element of the transformation process. A military bureaucracy 
does not squelch innovation by modernizing its forces; innovation is 
undermined when experimentation and prototyping of new ideas is 
prevented, and when newly developed and fielded systems are 
subordinated to outdated operational concepts. Effective concept 
development must yield new ways to accomplish critical operations, 
missions or tasks. Real experimentation must be at and beyond the 
margins of the doable. That may mean money spent on failures without 
remorse because there is often more knowledge gained in failure than in 
well-orchestrated demonstrations of success. Well-choreographed, well-
rehearsed experiments and exercises are excellent venues to demonstrate 
promising new capabilities, but true experimentation must seriously 
push the envelope of military operations--often involving attempts to 
implement completely new ways to accomplish new missions and tasks. The 
experimentation process must foster innovation involving real risk of 
failure if it is to produce new concepts of operations that will drive 
military transformation.
    To maintain competitive advantage in the information age, 
transformation must achieve a cultural change. Researchers note that 
culture is the last thing to change in an organization. Consequently, 
the work on cultural change must begin first. There are some tools for 
that. The schoolhouse is one starting place, but that tends to take a 
very long time. However, education is a long-term investment we will 
make. There are other examples that go much faster. Experimental 
articles provide military personnel the opportunity to work directly 
with new physical prototypes while developing new concepts. The key 
leverage in the use experimental articles is that they help people see 
the range of possibilities for performing operations in new ways that 
abstract discourses on innovative ideas cannot. This is crucial if the 
culture of change is to be widely adopted. When we introduce an 
operational prototype--when we put something in the hands of young 
operators--they have little trouble visualizing the potential of the 
system. They rapidly extrapolate from that experience to innovative 
ways to use a system or capability. That can be very powerful, and 
there are several examples of that happening right now. The lease of 
high-speed transport ships for experimentation with the Army, the Navy, 
the Marine Corps, the Coast Guard and the Special Operations Forces is 
one such example. Though these ships have been in the hands of 
operators for only a short period of time, creative minds are already 
projecting greater potential for these platforms. Another example is 
the Predator--exploration of its potential really began as an 
operational prototype. Recent experience in Afghanistan has 
demonstrated how far the idea has progressed since it was first used 
several years ago in the Balkans.
    What we are attempting is incredibly difficult. Historically we 
have recognized transformation only in retrospect. Some people don't 
understand how incredibly messy, contentious, and filled with 
uncertainty previous transformations have been. Military history is 
rife with examples of cultural and institutional impediments to 
transformational change. But what makes that history relevant is that 
many present-day impediments were also evident in previous efforts to 
transform military institutions, culture and capabilities. Many of 
these impediments have metastasized in the core processes that shaped 
the forces that won the Cold War. While they remain functional for 
their intended purposes, many believe that these processes are 
incapable of delivering the transformational change that the strategic 
environment now indicates. Much of our operating doctrine and our sense 
of military power springs from a vanishing, industrial age, and now 
inappropriate, threat-based approach. Until we rebalance and revalue 
for the information age, we remain at risk.
    In summary, the barriers to competitive entry are falling as a 
result of new technologies made possible in the age of information. The 
goal of transformation is not to establish a new end-state for U.S. 
military power. Rather, it is to create a continuous process that if 
vigorously pursued, can provide a solid foundation for sustaining the 
long-term competitive advantage of U.S. forces. The critics of 
transformation will cite various risks--operational, technical, 
organizational, and political. However, it is precisely for these 
reasons that a multifaceted transformation effort throughout the 
Department of Defense must be accelerated. The lessons of history 
regarding the maintenance of military primacy clearly demonstrate that 
should we rest on our laurels, time will not be on our side. We live in 
a competitive world, and to the extent we do not transform we area at 
risk strategically.
    The President and the Secretary of Defense are committed to 
transformation, and I am committed to helping them make transformation 
a reality for our forces. I look forward to a continuing discussion 
with you on this vital subject.
                                 ______
                                 
           Prepared Statement by Gen. William F. Kernan, USA
    Mr. Chairman, distinguished members of the committee, I am honored 
to testify on U.S. Joint Forces Command's role in the transformation of 
our Armed Forces.
    Let me open by assuring the committee that U.S. Joint Forces 
Command is steadfastly supporting the global war on terrorism (GWOT), 
actively securing the homeland and aggressively pursuing military 
transformation.
    U.S. Joint Forces Command is successfully executing a comprehensive 
set of missions, all of which are directly linked to readiness and 
transformation.
    With over 1.1 million soldiers, sailors, airmen, and marines--some 
80 percent of the Nation's general-purpose forces--U.S. Joint Forces 
Command is the primary force provider to our country's other Combatant 
Commanders worldwide. Headquartered in Norfolk, Virginia, our 
subordinate commands span the continental United States. In this role, 
Joint Forces Command provides trained and ready joint forces and many 
unique capabilities in support of operations at home and abroad.
    Joint Forces Command is currently responsible for land and maritime 
defense of the homeland and provides military support to civil 
authorities including consequence management support to lead Federal 
agencies in response to weapons of mass destruction attacks.
    Joint Forces Command is also responsible for joint training that 
includes support to all Combatant Command joint exercises and training 
our three star service headquarters to be joint task forces.
    Additionally, I am the Supreme Allied Commander Atlantic for the 
North Atlantic Treaty Organization (NATO), with a separate NATO staff, 
also in Norfolk. This command is our trans-Atlantic bridge, promotes 
interoperability within the alliance and is responsible for the NATO 
Airborne Warning and Control System (AWACS) currently supporting 
Operation Noble Eagle under Article V of the NATO treaty.
    Each of these roles is important, but my testimony today is focused 
on Joint Forces Command's essential role in transformation of our 
country's Armed Forces. Protecting our homeland, winning the War on 
Terrorism and preparing our Armed Forces for the future is inextricably 
linked to Joint Forces Command's mission areas. Indeed, each mission is 
essential to ensuring readiness today and transforming for the future.
                      the global war on terrorism
    Given this broad mission set, it is no surprise that the attacks of 
September 11, 2001 significantly impacted all aspects of Joint Forces 
Command. Simply put, those attacks placed our Nation and this command 
on a wartime footing. All elements of this command, Active, Reserve, 
National Guard, Civil Service, and contract employees are involved in 
this two-front war--at home and abroad. Indeed, there can be no more 
important mission than fighting terrorism overseas and simultaneously 
securing the homeland. Our Nation's offensive operations significantly 
enhance our homeland security.
    Since I last appeared before this committee, Joint Forces Command 
has made solid progress in improving the military aspects of securing 
our homeland. Notably, Joint Forces Command has activated a provisional 
Joint Force Headquarters for Homeland Security (JFHQ-HLS). Commanded by 
a two-star general, the JFHQ-HLS oversees the planning, organization 
and execution of our homeland defense and military assistance to civil 
authorities responsibilities. Leveraging the insights and concepts 
gained from our joint training and experimentation work, we are 
employing emerging concepts to organize, train and operate this new 
organization as a highly functional command and control headquarters to 
conduct homeland security. Formed ``out-of-pocket'' and ``out-of-
hide,'' this headquarters has operational control of Joint Task Force-
Civil Support (JTF-CS), our consequence management headquarters for 
chemical, biological, radiological, nuclear and high-yield explosive 
events (CBRNE), and Joint Task Force-Six (JTF-6), our task force 
responsible for providing counter-drug support to civilian authorities 
here in the United States.
    Working with our key partners, including the services, National 
Guard, U.S. Coast Guard, Federal agencies, and the law enforcement 
community, our military capabilities deepen the homeland security 
bench, so to speak, behind the civilian first responders and the 
National Guard as it is employed under state control. While we clearly 
remain in a supporting role we continue to maintain active duty ground 
force rapid reaction forces, remain prepared to provide naval assets in 
support of the Coast Guard operations, provide Active and Reserve 
component tactical aircraft and AWACS to NORAD and, in partnership with 
Pacific Command, will provide maritime forces, if needed, to defend our 
coasts. We have identified additional support forces, such as chemical 
and biological detection and defense units, that are required to 
maintain the appropriate consequence management capabilities and are 
providing soldiers from the National Guard to augment border security 
operations. This necessary and robust support posture is not without 
cost. Current homeland security and force protection requirements 
demand nearly 10 percent of Joint Forces Command's assigned forces. 
Balancing readiness, operational deployments, and responsiveness 
requires careful and innovative management. Finally, the force 
requirements described above do not include the numerous and 
substantial employment of National Guard forces by the Governors, in 
state status.
    Key to the homeland security mission is the integration of our 
efforts at the local, state and Federal levels. We have more work to do 
to achieve full intelligence and information fusion in order to produce 
accurate, actionable, predictive analysis. Once we are able to do this, 
the response community will be able to transition from today's more 
reactive posture to a more proactive stance and therefore a more secure 
homeland.
    Overseas, troops from all Joint Forces Command components are 
actively involved in support of operations in Afghanistan, comprising 
nearly 40 percent of the forces supporting U.S. Central Command in 
Southwest and Central Asia. This force commitment has doubled our 
normal overseas force rotation and does not include the substantial 
obligation of active and Reserve Forces to homeland security, force 
protection and infrastructure protection. Nevertheless, these trained 
and ready forces are a proud reflection of the great capabilities found 
across your military--dedicated, hard working and committed patriots. 
Additionally, other less known elements of Joint Forces Command, such 
as the Cruise Missile Support Activity, Joint Personnel Recovery 
Agency, the Joint Communication Support Element (JCSE), and the Joint 
Warfare Analysis Center (JWAC), are providing critical support to the 
global war on terrorism and Operation Enduring Freedom in particular.
    What we have witnessed in Noble Eagle and particularly in the 
execution of Operation Enduring Freedom has been truly extraordinary. 
Our forces have deployed halfway around the world, and under the superb 
direction of U.S. Central Command and U.S. Special Operations Command, 
conducted an exceptionally adept and precise campaign, defeated the 
Taliban and freed a nation, and dislocated the enemy al Qaeda base of 
operations and worldwide network. These deeds and ongoing operations 
reflect an agile mix of new capabilities and operational concepts with 
tried and true principles. All of our troops have performed superbly. 
This operation is replete with many lessons that, when balanced against 
the unique nature of the current fight, will inform future operations 
and shape transformation.
                     transforming our armed forces
Overview
    Building upon prior and ongoing joint and service concept 
development and experimentation and leveraging the warfighting 
innovations from ongoing operations, we are actively developing 
solutions that enhance the full range of joint warfighting capabilities 
needed to combat terrorism and sustain our dominance in the 21st 
century. This comprehensive effort includes aggressive experimentation, 
joint force training, and integration of joint warfighting requirements 
necessary to meet future challenges, all balanced by the need to 
sustain a trained and ready force for today's operations.
    Meeting requirements at home and abroad, including maintaining the 
capability to deter and if necessary decisively defeat other threats, 
remains a manageable challenge. However, sustaining such a capability 
requires adequate resources to maintain warfighting readiness, ensure 
sustainable levels of personnel and unit activity, and afford our 
troops and their families with an acceptable quality of life.
    These areas reflect the priorities of U.S. Joint Forces Command. 
Our forces are an integral part of the war against terrorism abroad. 
Here at home, our first priority is the defense and security of our 
homeland. As noted, transformation is critical to the success of both 
efforts. Our transformation efforts, a relatively new mission area for 
this command, are designed to achieve 21st century capabilities 
relevant to current and future threats. It is our intention to maintain 
and improve the Nation's battlefield dominance. Finally, none of this 
is possible without well-led, trained, equipped and motivated people.
    It must be clearly understood that these areas are all inextricably 
linked to transformation. The ongoing war is a catalyst for innovation 
and acceleration of emergent capabilities as well as providing lessons 
for the future. As well, transformation efforts feed the needs of 
ongoing operations, with a number of innovations rapidly reaching 
maturity. Moreover, the readiness of our current forces is not only key 
to near term victory but trained and ready forces provide the necessary 
foundation for successful transformation.
    The challenges of the 21st century require adaptive, flexible, 
rapidly deployable, and employable and dominant joint forces. Building 
on the readiness of our present force, the synergy of Joint Forces 
Command's varied roles is an essential transformation enabler.
    As the force provider, our service components' forces, intellectual 
input, and operational experience shape, enable, and assess 
transformation activities, particularly concepts and experimentation.
    Joint training provides the opportunity to assess the operational 
challenges facing the entire joint force, identify new ideas, examine 
promising concepts, and promote jointness--enhancing our principal 
asymmetric capability.
    Joint concept development and experimentation builds upon these 
challenges and insights to develop the operational capabilities of the 
future joint force. Here experimentation collaborates with joint 
training to complete the transformation of the force through the 
synthesis of personnel, doctrine, and technology in the crucible of a 
training event.
    Finally, joint integration reaps insights from training and 
experimentation and feeds them back into the force. At the same time, 
our engagement in joint requirements helps us identify needs and focus 
our efforts.
Leveraging Transformation
    As the President stated, this is a war ``unlike any other.'' It 
demands fresh approaches and new thinking. In that regard, the 
Secretary of Defense recently outlined six transformation goals: 
protect the U.S. homeland and our bases overseas; project and sustain 
power in distant theaters; deny enemies sanctuary; protect U.S. 
information networks from attack; use information technology to link up 
different kinds of U.S. forces so they can fight jointly; and maintain 
unhindered access to space. Furthermore, the Chairman of the Joint 
Chiefs identified key areas for improving joint warfighting 
capabilities, including interoperability and joint experimentation, as 
well as transformational capabilities such as establishing standing 
joint force headquarters for the combatant commanders.
    Additionally, we welcome the creation of the Office of Force 
Transformation and look forward to strengthening our solid partnership 
with Vice Admiral Art Cebrowski. His office provides the necessary 
bridge between strategy and policy and the future operational concepts 
and capabilities of our Armed Forces as well as assisting with 
streamlining the acquisition process to capitalize on rapidly 
developing 21st century capabilities.
    The Department leadership's intent and guidance establishes a clear 
transformation way ahead. Far more than new materiel, transformation is 
a comprehensive effort that touches on all aspects of the military. 
Transformation components include new ideas, concepts and new 
capabilities, developed and refined through aggressive experimentation, 
as well as evolutionary and at times revolutionary change that will 
sustain our military dominance in a rapidly changing world. These 
evolutionary and revolutionary components demand that we sustain the 
readiness and capability of our current forces or they will not be in a 
position to exploit those changes.
    The priority placed on transformation is unquestioned. Within a 
month of taking office, the President visited Joint Force Command and 
noted, ``Eleven years after the Cold War, we are in a time of 
transition and testing . . . We must seize this moment.'' Let there be 
no doubt that U.S. Joint Forces Command clearly understands the intent 
of our senior leadership, and we are seizing the moment.
    Joint Forces Command, in partnership with the services and 
Combatant Commanders, has a number of programs and experiments already 
underway to achieve the President's transformation vision. Moreover, we 
are actively working to leverage the innovation seen in the war in 
Afghanistan in order to accelerate the ongoing transformation of our 
Armed Forces. Furthermore, the continued support of Congress for Joint 
Experimentation and associated effort will ensure that U.S. Joint 
Forces Command has the necessary resources to fulfill its key role in 
this extensive, Department-wide effort.
    With our redesignation as U.S. Joint Forces Command on October 1, 
1999, we assumed the responsibility to lead--as a pathfinder--the 
transformation of the U.S. Armed Forces to achieve dominance across the 
width, depth, and breadth of any battlespace. That means that anywhere 
on the spectrum of conflict, we will fight and defeat any adversary. 
For just over 2 years, Joint Forces Command has focused on achieving 
that objective. Further, the events of the past months, both at home 
and abroad, have shown that we must accelerate those efforts. We need 
today's forces to get to the objective area quicker, dominate the 
situation, and win decisively. Comprised of highly trained, competent 
units and leaders, those forces need to operate with agility, 
versatility, precision, lethality, and survivability.
Concept Development
    Transformation is about thinking differently. Joint Forces Command 
started out with that as a guiding premise, developing new concepts 
based on new ways of thinking about warfare in order to frame the 
capabilities needed to ensure military dominance in the 21st century.
    One of the most promising concepts that will help build the future 
joint force is called Rapid Decisive Operations (RDO). RDO can be 
summarized as ``a rapid series of relentless strikes by a full-spectrum 
joint force operating in an inter-agency context to defeat a regional 
power'' and takes the fight to the enemy, anywhere and everywhere, on 
our terms, under conditions uniquely to our advantage. RDO proposes an 
alternative to our legacy sequential, linear and predictable operations 
by providing a construct for early, distributed, full-spectrum attacks 
against the enemy's ability to make war.
    RDO leverages the unique asymmetrical advantages and capabilities 
of our Nation. These advantages generally span the elements of both 
national and joint military power and include our ability to project 
power, do so precisely, exploit space and integrate information into 
knowledge. Individually powerful, when those elements of national and 
joint military power are integrated and synchronized-we are unmatched.
    Achieving this new level of integration and national power 
projection requires new operational approaches. The following 
supporting concepts inherent in the RDO concept allow us to better 
exploit these strengths:

         Standing Joint Force Headquarters (SJFHQ) exploits new 
        operational and organizational concepts and technology to 
        reduce the ad-hoc nature of current joint operations and 
        planning times. This concept will significantly enhance 
        integration, interoperability and operational execution.
         The Operational Net Assessment (ONA) comprises 
        approaches and tools to understand the enemy as a system. This 
        system synthesizes large, diverse databases, producing 
        actionable knowledge that enables better, faster decisions. 
        This will permit a precise focus of effort enabling more 
        effective employment and protection of our own forces and more 
        effective destruction of the enemy.
         Effects Based Operations (EBO) is a new way of 
        thinking about fighting the enemy. Effects Based Operations 
        seek to continually focus the full range of our military and 
        inter-agency asymmetric advantages against the enemy's system 
        break-points to destroy his coherence. Early inter-agency 
        involvement enhances our influence, deterrent, and coercive 
        effects over an adversary and our preparation and execution of 
        operations. Effects Based Operations are transforming the art 
        and science of war.
         The Common Relevant Operational Picture (CROP) is a 
        tailorable, cross-echelon, cross-organizational, knowledge-
        based collaborative environment that creates situational 
        awareness and agile unity of action. The CROP is about adapting 
        the science of command and control to the evolving art of 
        warfare-moving from operational design and execution away from 
        the deconfliction of our joint forces to their integration.

    Integrating these concepts within the RDO framework should allow us 
to decisively and rapidly defeat opponents ranging from a non-
traditional enemy such as al Qaeda to a competent regional power 
employing competitive strategies and capabilities. We have seen and see 
today the asymmetric approaches and capabilities we must contend with, 
including Terror, Anti-Access, Information Operations, WMD, TBM, and 
Cyber Attacks as well as legacy threats. Joint Experimentation has been 
working to defeat the enemy we are confronting today and prepare for 
tomorrow's enemies as well.
Leveraging Transformation for the War on Terrorism
    Combating terrorism, protecting the homeland, and transformation 
are intertwined. We are working today with Operation Enduring Freedom's 
joint warfighters to rapidly operationalize the innovative ideas 
emerging from our joint concept development and experimentation 
program. The war on terrorism cannot be won with legacy means alone. 
Development of advanced techniques, tools, and organizations for these 
challenges requires innovative thinking and aggressive experimentation 
to develop alternatives for the future joint force.
    As the Secretary of Defense recently observed, transformation is 
happening now. Clearly, the war in Afghanistan is a catalyst for 
energizing promising capabilities such as precision weapons, 
accelerating developmental capabilities such as Global Hawk, and 
stimulating new and innovative operational approaches at the tactical 
and operational levels of war.
    In that regard, U.S. Joint Forces Command has been working for over 
a year on proposals for transformation that can directly address the 
operational requirements we face today. Last May, in partnership with 
U.S. Central Command and U.S. Special Operations Command, Joint Forces 
Command conducted an advanced concept experiment, Unified Vision 2001 
(UV 01). Unified Vision 2001 envisioned strategic and operational 
conditions similar to those we face today. The intellectual foundation 
for dealing with these new conditions should put us in the position to 
operationalize more rapidly our best concepts.
    Converting these concepts into operational capabilities is now our 
challenge. Within this command, we are integrating many of our new 
ideas into our own organization and operations to execute the homeland 
security mission. Likewise, the fight against terrorism abroad will be 
enhanced by the doctrinal, organizational, training, and technical 
findings that come from our transformational efforts. Some of these 
enhancements will take time, but some are in the hands of the 
warfighter today or will be very soon. Let me provide several examples 
based on UV 01. In addition, I expect more to follow from Millennium 
Challenge 2002 (MC 02), this year's major experiment.

         Our Joint Warfighting Analysis Center (JWAC) is 
        already providing an important new capability to our Operation 
        Enduring Freedom warriors. The Research, Integration and 
        Technology Environment (RITE) capability makes use of JWAC 
        expertise and advanced tools to provide a near real time fused 
        intelligence product that is tailored to the user for kinetic 
        or non-kinetic action.
         We have developed the Joint Enroute Mission Planning 
        and Rehearsal System-Near Term (JEMPRS-NT) that will provide 
        the warfighter with on the move, collaborative planning, 
        command and control, and a first-generation common relevant 
        operational picture. Leveraging commercial and government off-
        the-shelf technology, JEMPRS-NT was successfully demonstrated 
        in airborne testing in January and March 2002. MC 02 will 
        validate this capability and we expect to get it in the hands 
        of the joint warfighters shortly after that. Our Combatant 
        Commanders want this capability now.
         Our experimental insights on interagency coordination 
        were a driving factor in forming interagency coordination 
        groups for each of the regional Combatant Commanders.
         Standing Joint Force Headquarters, described 
        previously, is the Chairman's number one transformation 
        priority. Our experimental insights confirmed the way ahead. 
        This capability will be a centerpiece of the MC 02 experiment, 
        and, in partnership with the other Combatant Commanders, will 
        be developed and refined in order to deliver operational 
        organizations to the regional commands in fiscal year 2005.
         Enhanced C\4\ISR for HLS Operations (ECHO) is a new 
        fast track initiative to identify solutions that provide 
        assured crisis action connectivity from the first responder at 
        the incident site to the highest Federal levels. This system 
        will enable coordination and collaboration at all levels as 
        well as information sharing and access across multiple 
        information and security domains. This is an accelerated 
        program designed to deliver a prototype system within four to 6 
        months using a spiral development process.

    The operational demands that frame these flexible capabilities and 
the velocity of technological change demand an equally agile process of 
acquisition. At a minimum, as experimentation and other programs such 
as the Advanced Concept Technology Demonstrations (ACTDs) uncover new 
opportunities and capabilities, funding must be available to bridge the 
gap between discovery and formal acquisition. With business and 
technology horizons constantly compressing, a mechanism must be 
established to ensure our own capabilities are synchronized with the 
velocity of technological and operational change.
Joint Experimentation
    These advances will greatly enhance operations in the near term. 
However, transformation is also a comprehensive, long-term effort that 
demands concerted effort. Many of the inter-war innovation models, 
including American aircraft carrier and amphibious warfare development, 
and the often-mentioned development of ``blitzkrieg'', were years in 
the making. In the latter case, historians note that the Germans' 
``lightning'' victories in 1939 and 1940 were a surprise only to their 
opponents, as this ``revolutionary'' warfare was the product of some 20 
years of effort. However, as successful as their initial efforts were, 
failure to follow through cost the Germans dearly on the Eastern Front. 
In that new environment, shortcomings in operational design (concepts) 
and failure to continue force wide transition to these new 
``blitzkrieg'' capabilities contributed to their defeat. Innovation and 
transformation follow through must be continuous, flexible and 
resourced.
    Likewise, prematurely capitalizing on new capabilities presents 
substantial risk as well. The Italian air force of the 1920s and early 
1930s was state of the art, but was irrelevant as World War II 
unfolded. Similar examples can be drawn from our own experience with 
coastal defense, dreadnought battleships, dirigibles and, more 
recently, the Pentomic Army. These lessons are in part why we have 
undertaken robust joint and service experimentation programs.
    The Joint experimentation program provides the framework for 
comprehensive examination of change. Notably, last year's UV 01 
experiment, previously mentioned, was very successful. Unified Vision 
2001 focused on the Joint Forces Headquarters organization and systems 
needed to execute RDO in a 2007 small-scale contingency. Over 40 
organizations and 350 personnel joined in this robust, wargame-style, 
model supported experiment. Unified Vision 2001 validated RDO as a 
sound operational concept and provides a solid foundation for MC 02, 
this year's major field experiment.
    Key insights from UV 01 centered on leveraging inter-agency 
capabilities and joint organizations and operations. Examining 
combatant command and inter-agency partnerships through joint force 
staff integration, we confirmed that early and continuous inter-agency 
involvement is essential to mission success and enhanced our influence, 
deterrent, and coercive effects over an adversary and our preparation 
and execution of operations. Our examination of experimental 
organizations indicates that a core standing joint force headquarters 
(SJFHQ) is a high-value means to reduce the ad-hoc nature of today's 
JTF operations and increase the timeliness, effectiveness and 
efficiency of future operations. This joint-interagency capability 
developed an Operational Net Assessment (ONA) that affords 
comprehensive knowledge of opponent systems (political, military, 
economic, etc.), enabling compressed decision cycles, strengthened 
deterrence, and development of comprehensive strategic to tactical 
actions using all elements of national power. Exploiting ONA, the 
Effects-Based Operations process leverages the full weight of national 
power to create integrated effects tailored to rapidly defeat a 
specific foe.
    Over the fall and winter, a number of follow-on experiments have 
built upon and matured these concepts as well as the insights and 
outcomes of last year's very productive UV 01 experiment. These 
experiments and ongoing preparation will establish a firm foundation 
for successful execution of Millennium Challenge 2002 this year.
    With strong support from the members of this committee, this year's 
joint experimentation funding will ensure effective execution of MC 02. 
With great support from the services and participating agencies, MC 02 
is suitably scoped to fulfill all experimentation objectives without 
taking away from the requirements of ongoing operations against 
terrorism.
    Millennium Challenge 2002 is a major milestone towards 
transformation. Examining a high-end, small-scale contingency with 
potential to escalate MC 02 is based on a real-world military threat. 
Millennium Challenge 2002 will permit us to experiment with the RDO 
concept with both real and simulated forces, using a broad array of 
land and ocean training areas, facilities, instrumentation, modeling 
and simulations. The experiment will span the western ranges--Nellis 
Air Force Base, Twenty-nine Palms, China Lake, Camp Pendleton, Point 
Magu, the National Training Center at Fort Irwin--and our own Joint 
Training Analysis and Simulation Center facilities in Suffolk, 
Virginia.
    Millennium Challenge 2002 will bring together around 13,000 
personnel from all the services and incorporates the services' future 
concepts and capabilities--the Navy's Forward From The Sea, the Marine 
Corps' Ship To Objective Maneuver, the Air Force's Aerospace 
Expeditionary Forces, the Army's Interim Brigade Combat Team, along 
with Special Operations Command and other interagency initiatives--all 
within a joint operational context. Allied involvement consists of NATO 
observers this time; robust allied participation will take place during 
our next major experiment called Olympic Challenge 2004. In the area of 
multinational and allied experimentation, I would also note that the 
co-location of NATO's Allied Command Atlantic with Joint Forces Command 
makes cooperation in transformation much more effective.
    We want to experiment to see how we can develop a common relevant 
operational picture that will allow us to fuse intelligence, do the 
collaborative planning, make decisions very quickly, and compress our 
decision-cycle to the point where we can prioritize and attack targets 
and seize objectives faster than the enemy can respond, achieving a 
rapid and decisive victory.
    Coming out of MC 02, we expect to have some significant 
recommendations, backed by quantifiable data to develop the 
architectures, systems, processes, tools, and capabilities necessary to 
empower a standing joint force headquarters to execute high tempo, 
effects-based operations that employ agile, decision-based forces. We 
are already seeing the benefits of this conceptually based new way of 
war in Operation Enduring Freedom and joint concept development and 
experimentation efforts will continue to improve our capabilities.
    Moreover, these endeavors set the conditions for unified 
transformation activities to take place across the services and the 
joint force. Our concept development and experimentation efforts over 
the past 2 years have established the common joint context, have 
facilitated collaborative concept development across the services, and 
have synchronized the joint and service experimentation programs.
    I look forward to discussing with you further the power of these 
concepts and emerging capabilities and invite you and your staffs to 
visit Joint Forces Command and our Component forces in late July and 
early August to observe this experiment.
Trained and Ready Joint Forces--the Foundation of Transformation
    Transformation is more than just experimentation, the 
interoperability of current and future systems or some new technology. 
Enhancing jointness--that is, the way our forces train to interact and 
fight the enemy--is a critical aspect of transformation. To that end, 
another benefit to the preparations and execution of MC 02 is the 
electronic linkage of many of the existing service ranges and training 
areas in the Western U.S. This effort, necessary to conduct a robust 
joint field experiment, will also provide us the opportunity to explore 
the benefits of establishing a Joint National Training Capability that 
provides the opportunity for the conduct of embedded, multi-echelon 
joint and service training that is live, virtual and constructive, 
using electronically linked ranges, simulators and simulations. 
Additionally, with the robust capabilities of the Joint Training, 
Analysis, and Simulation Center located in Suffolk, Virginia, the 
potential exists to make such a capability a reality, with smart 
investments that leverage existing capabilities and integrate them with 
means such as the Joint Simulation System (JSIMS).
Interoperability
    To facilitate Department of Defense transformational efforts, 
USJFCOM develops, experiments on, documents, and submits appropriate 
joint doctrinal, organizational, training, materiel, leadership, 
personnel, and facility (DOTMLPF) changes for implementation as 
directed by the Joint Requirements Oversight Council (JROC), to which I 
have a standing invitation. These submissions, the product of joint 
experimentation, training, and operational lessons, include joint 
operational concepts, command and control structures, and capabilities 
that become joint requirements once approved by the JROC. To further 
discipline this process and better direct our efforts along the vector 
established by Secretary Rumsfeld's transformation goals and the 
Chairman's intent, we recently published a CJCS-approved 5-year Joint 
Experimentation Campaign Plan. This Campaign Plan describes the 
strategy, timeline, planned activities, and program goals necessary to 
realize near term transformation opportunities and sustain the effort 
for the future. Given the dynamic nature of transformation, this is a 
living document and will be updated annually or as required.
    Joint Forces Command is addressing critical interoperability 
problems for the warfighter. To ensure new systems are born joint, the 
Command reviews all requirements documents under development to ensure 
sufficiency of interoperability key performance parameters, information 
exchange requirements, and operational architecture views. In addition 
to reviewing other organizations' requirements, Joint Forces Command 
also develops requirements that fill uniquely joint needs. The JROC has 
approved four Joint Forces Command Capstone Requirements Documents-
Global Information Grid, Information Dissemination Management, Combat 
Identification, and Theater Air Missile Defense.
    In our role as the chief advocate for jointness, Joint Forces 
Command identifies, collects, categorizes, and prioritizes warfighting 
interoperability requirements critical to the Combatant Commanders and 
then seeks solutions. Joint Forces Command also synchronizes JROC 
endorsed DOTMLPF solutions to interoperability and integration 
shortfalls in order to provide the joint warfighter with integrated 
remedies that enhance warfighting capabilities. In particular, Joint 
Forces Command is currently developing recommendations for 
infrastructure, information management and assurance, and joint data 
network enhancements for legacy joint task force command and control 
capabilities.
    To speed exploitation of technological and other opportunity 
solutions stemming from experimentation, Advanced Concept Technology 
Demonstrations (ACTD) and other programs, Joint Forces Command 
established a stabilization fund program element line that will 
facilitate the rapid insertion of solutions to identified 
interoperability shortfalls. This funding provides programmatic support 
to the lead service or agency between Program Objective Memorandum 
(POM) cycles.
    In addition to our review and implementation roles, Joint Forces 
Command established a training program for Combatant Commands, services 
and agency requirement developers to streamline the process and speed 
development of needed capabilities. This training greatly facilitates 
the identification and formulation of parameters that meet the 
interoperability requirements. These customers have embraced program 
and to date has involved over 50 organizations and 1,500 personnel.
Readiness
    While working towards transformation, we have a big job right now 
that will demand attention and resources. We have to get through today 
to get to tomorrow. Risk management is necessary, but it must be 
prudent. Part of prudence is striking the right balance between 
readiness, transformation, quality of life, and operations. This is 
both a management issue and a resource issue. Risk can be managed to a 
point, but resources must also be committed to secure our dominance for 
today and the future. Transformation, modernization and selected 
recapitalization cannot occur without adequate resources.
    Readiness provides the foundation for not only our current 
security, but the transformation for our Armed Forces. Many pundits 
have held up World War II and the innovation that preceded that 
conflict as a model for our own age. The innovation exhibited by many 
nations, including the United States, clearly provides lessons for 
transformation today.
    That era also provides paths to be avoided. In our own experience, 
the readiness of our forces was not on par with the capabilities 
developed from inter-war experimentation. Indeed, in the case of my own 
service, the Army learned many hard lessons in North Africa and the 
South Pacific because the pre-war Army was unable to match the demands 
of new capabilities and the realities of changing warfare. The 
realities of the 21st century counsel that we balance and co-evolve 
both the readiness of our forces and the transformational capabilities 
needed for the new century.
    Our present joint forces are highly capable, as recent operations 
demonstrate, but they are overdue for recapitalization. Near-term 
modernization of our forces to capitalize on the many technological 
advances made over the last decade is necessary. We need these updated 
legacy systems to continue to fight today and bridge our modernization 
gap as we move forward with transformation.
    While I have outlined a number of challenges and priorities for 
ensuring we sustain our edge worldwide, I must note the criticality of 
congressional support. Within the constraints of competing national 
priorities, even in this time of conflict, the support of the members 
of this committee is reassuring. The challenges and requirements I 
outlined above remain, but we have a plan to address them and, due in 
great part to your support, our forces remain the best in the world. 
For that we are all proud and thankful.
    Moreover, transformation is clearly occurring. Our efforts aim to 
accelerate these trends. Further, I think that these insights are 
compelling and have immediate application. As I mentioned earlier, 
these concepts guided the stand-up of our provisional JFHQ-HLS and the 
development of our Homeland Security Campaign Plan. Likewise, much of 
what we see in the war on terrorism is transformational-from tactical 
employment of armed unmanned aerial vehicles to integrated, effects 
based joint operations against an asymmetric enemy. Money can certainly 
influence the rate of transformation, but I regret to say that in many 
cases time is perhaps the more critical resource. Many aspects of 
transformation will remain evolutionary, even when the results are 
revolutionary.
    I look forward to working with you to give our troops what they 
need today and for the future and reiterate my invitation to visit 
Joint Forces Command and see transformation at work.
                               conclusion
    In all of this, we have to remember the basics. War remains close, 
personal, and brutal. There are no silver bullets to change that. There 
have been revolutions in how we fight such as gunpowder, nuclear 
weapons, and computers. In the end, however, it still comes down to our 
national will and the commitment, training, and tenacity of our troops. 
It is never safe, easy, or risk-free. The enemy sees to that. Today 
while I speak our troops are flying, sailing, and standing in harm's 
way, under enemy guns, at night, and far from America and their loved 
ones. Our national will, combined with their spirit and tenacious 
commitment, will define our success.
    In closing Mr. Chairman, the soldiers, sailors, airmen, and marines 
of U.S. Joint Forces Command are ready to defend our homeland and are 
deployed to fight terrorism abroad. Each day, we improve our 
capabilities, refine our plans and increase our homeland security 
capabilities while providing trained, ready, and-over time-
fundamentally transformed forces for combat operations against 
terrorism and any other threat to our Nation. We are all very proud of 
them and privileged to serve with them.

    Chairman Levin. Thank you, Secretary Wolfowitz.
    Let me start with Admiral Cebrowski. Secretary Wolfowitz 
has mentioned the need for transformation of new operational 
concepts, new organizational changes, and I am wondering 
whether you agree with that, which I think you probably do. But 
more importantly, would you point to any new operational 
concepts or organizational changes that have been formally 
adopted or should be formally adopted?
    Admiral Cebrowski. Mr. Chairman, I do agree wholeheartedly 
that transformation is really a broad spectrum of technology, 
organizations, culture, and processes. Key amongst this is of 
course operational concepts. Operational concepts flow from our 
understanding of the evolving situation in strategy, in 
technology, and with regard to threat. That indicates a certain 
way ahead for us.
    Yes, I can say that some key operational concepts are 
emerging. First and foremost amongst this process is the 
transformation from the industrial age into the information 
age. In the Department we call that network-centric warfare. A 
report to Congress was submitted by the Deputy Secretary last 
summer with regard to that subject, and that is absolutely key.
    If we do not succeed in transforming from the industrial 
age to the information age, then all of our other efforts in 
transformation will not likely bear fruit. This indicates 
certain features and some of those address the questions that 
you had raised in your opening remarks. For example, we see the 
moving to primacy of sensors and the appearance of something 
that we might call sensor wars. We have done very, very well 
with weapons, and weapons are indeed critically important and 
we have magnificent weapons reach. But in the dynamics of 
warfare, the enemy controls the sensor reach. So what is 
emerging in all of the services is the recognition that we have 
to have a robust, well-networked sensor capability which is 
capable of fighting in close, that is, that sensors emerge as 
elements of the maneuver force themselves.
    We are seeing the enormous payoff from that. We are seeing 
the recognition amongst all the services that these 
capabilities must be networked to develop high quality shared 
awareness. So you see the terminology of shared awareness and 
self-synchronization appearing in all of the service 
documentation and concepts. That of course is good news as 
well.
    You see an enhanced appreciation for speed. It shows up, 
for example, in collaborative planning. We can plan far faster 
now than we ever could before. But there is a wholesome 
dissatisfaction, and there always should be because it is never 
fast enough, and we need to keep working in that area.
    You also see it in terms of speed of deployment, which 
shows up amongst all of the services. The most tangible form is 
the appearance of the high-speed vessel to help us deploy 
forces more quickly, the recognition that speed indeed counts a 
good deal. Not just tactical speed, but speed of deployment, 
speed of employment, and speed of sustainment. These things all 
integrate with each other.
    We can see in the land forces, both Marine Corps and Army, 
the appearance of doctrine for fighting in the non-contiguous 
battlefield, that is moving away from front lines with a rather 
static and set piece form of combat to alternative concepts 
which would allow us to draw on the power of smaller units, 
higher mobility, and the great information advantage which our 
Nation provides the military forces.
    So there is a lot of good news here in the way things are 
going. This does not say that the work is done, however. Very, 
very far from that. A great deal more must happen.
    Chairman Levin. Thank you, Admiral.
    General Pace, your formal statement notes that your 
chairing of the Joint Requirements Oversight Council and your 
seat on the Defense Acquisition Board enable you to ensure that 
major weapons systems are ``born joint'' and validated as 
``joint'' before they are procured. Then you go on to say that 
the JROC has moved beyond simply grading the services' homework 
and must select specific goals from the defense planning and be 
the driving force in attaining those goals.
    I am wondering whether or not that will require a cultural 
change. You made reference to it in your opening statement when 
you said that this is all as much about mindset as it is about 
anything else. Do we need a cultural change? Do we need a 
change in mindset in order that the JROC be the driving force 
in attaining the goals that you referred to?
    General Pace. Mr. Chairman, thank you.
    I do believe that if we did nothing else other than change 
our mindset and apply those different thought processes to the 
assets we already own, that we would take a huge step in the 
direction of transformation. You can look at what General 
Franks is doing on the battlefield in Afghanistan right now. 
You can look back to the mindset change that Goldwater-Nichols 
instituted some 15 years ago.
    Chairman Levin. If I could interrupt just for a second, 
could you be specific in terms of the changes in mindset that 
you think are necessary, the future changes?
    General Pace. Yes, sir. With respect to the Joint 
Requirements Oversight Council, of which I am the chairman and 
each of the service vice chiefs is a member, our predecessors 
have given us a system that does a very good job of taking 
ideas that come from service laboratories and service 
experiments and determining whether or not the services have 
applied to those initiatives enough jointness so that when they 
bring that computer system to the joint battlefield it can plug 
and play along with others.
    Over the past several years, we as the JROC have gone from 
taking systems that were already in the process of being 
developed and trying to adjust their final outcome to moving 
the gate forward in the process to where now no major program 
of any service even gets one dollar applied to it before the 
JROC blesses it as joint. That is good, but that is the point 
where we are grading other people's homework.
    What I am saying, Mr. Chairman, is that we need to take the 
defense planning guidance, the capabilities that we want this 
Nation to have in the future, and as a Joint Requirements 
Oversight Council look at what we have right now, what are the 
gaps in those capabilities, and determine as a council whether 
we want a service to come up with the solution, or need to ask 
Joint Forces Command to experiment with some ideas so that 
instead of waiting for ideas to come in the door from those 
around us, we become part of the initiative process and we take 
on that.
    That is a mindset change of sitting back and waiting for or 
in fact being a part of the process. It goes to what Goldwater-
Nichols did for the joint environment. My first 19 years in the 
Marine Corps, I knew that I was supposed to be thinking about 
the Marine Corps and I was not worried much about the Army, 
Navy, and the Air Force. My last 15 years in the joint world, I 
have seen a huge difference that the Goldwater-Nichols Act has 
brought about.
    Look simply at Afghanistan. You cannot imagine the force in 
1986 doing what the force did just several months ago, 
thousands of miles--from September 20, when Tom Franks got his 
first order to go until October 7, thousands of miles away, a 
landlocked country, joint and combined operations. That is a 
mindset change, sir, and the willingness to look at things 
differently and to take what we have and to apply it in a 
different way.
    Chairman Levin. Thank you. Senator Warner?
    Senator Warner. Thank you, Mr. Chairman.
    Really a fascinating presentation. I have been privileged 
to sit here for many years hearing successive presidents and 
secretaries of defense propose to Congress their vision for the 
future. I guess what is crossing my mind at the moment is 
concern about what I have heard thus far. I am not sure that we 
are coming to grips with the integration between our projection 
of forces abroad to deter and defend, and are we losing any 
emphasis on what I think is my main concern here at home.
    I have not heard anyone discuss how we are going to secure 
our ports against the smuggling of weapons of mass destruction 
into the borders of our Nation, to the extent that any of this 
reflects the porosity of our borders. Then lastly, gentlemen, 
the Deputy Secretary, the Chairman, and I were just discussing 
that the crisis at hand in the world is the Middle East and the 
weapon of selection is one that, while there have been isolated 
chapters of its use in the history of warfare, we are now 
seeing it employed to where the human bomb has brought any 
discussions to try and solve the Israeli-Palestine crisis to a 
stalemate thus far. I hope it is soon broken--the ability of 
conscientious minds in both the world and everyone.
    It is the human bomb that has brought about what appears to 
be an impasse and a stalemate. To what degree did this thinking 
of emerging threats and the isolated terrorism poised against 
our Nation and other nations enter your plans? We listened to 
Admiral Cebrowski talk about the battlefield. Battlefields now 
are isolated individuals bringing about enormous devastation 
utilizing weapons of mass destruction.
    To what extent did that type of thinking go into the 
formulation of these various goals? Mr. Secretary, do you want 
to tackle it? Then General Pace.
    Secretary Wolfowitz. We are all involved in this in one way 
or another. But in fact, we specifically identified defense of 
the homeland and defense of our bases as the first priority. 
There is a lot going on in this area, including the quite 
transformational work to stand up a new Homeland Defense 
Command, which will be something both in mission and in the way 
it is organized, I think, very different from the commands we 
have had in the past.
    I do think in fact that this challenge of homeland defense 
and of dealing with the vulnerability of our bases involves a 
number of mindset changes. One of them is that we have to think 
not just joint, but inter-agency and inter-governmental. One of 
the biggest challenges in doing homeland defense is sorting out 
what is the right role of the military and what is the right 
role of civil authorities. Normally we have not had to think as 
deeply about that kind of issue.
    When we engage in the war on terrorism overseas, we are as 
frequently in a supporting role for the CIA or for the FBI or 
for other agencies of the U.S. Government as we are actually 
engaged in military operations.
    A second mindset change that is involved is understanding 
that the same ways in which our country can be vulnerable to 
attack, our bases can increasingly be vulnerable to attack. We 
have enjoyed the luxury for a long time of assuming that we 
operated out of a sanctuary, and that is not a luxury we can 
assume. That I think is a mindset change.
    But I would also say that one cannot separate defense and 
offense. What we are doing in Afghanistan, I think, has 
contributed in significant measure to preventing other 
terrorist attacks here at home, and at the same time that we 
take all reasonable measures to increase our security here--we 
are not going to win this war simply going on defense. We have 
to go after the terrorists, and I know you agree with that.
    Senator Warner. I share those views. I want to make certain 
that we have an integrated plan for defending ourselves here at 
home, which has been a very low priority up until recently. I 
am not faulting anyone. We always felt the two oceans and our 
projection gave us the security here at home so that we did not 
have to devote the assets and the time. But that has changed.
    Then we see on the battle fronts today the utilization of 
suicidal attacks as bringing about a transformation in warfare 
in the Middle East that I do not think any of us fully 
envisioned until this tragic chapter unfolded here in the last 
year or so. It has cost untold crises to a valued ally, Israel.
    General Pace, do you have some comments to assure the 
committee that you and your colleagues are looking at the 
homeland defense as an integral part of all of this?
    General Pace. Sir, we are, and I would echo two thoughts 
that you have. One is the need for an inter-agency approach to 
this, especially homeland defense. Each of the CINCs now has a 
joint inter-agency coordination group with his command element, 
which is developing in the inter-agency world what we have 
developed over the last 15 years in the joint world, meaning 
the trust, the understanding of the standing operating 
procedures of the groups, so that we are working together 
homogeneously across that spectrum.
    With regard to homeland security itself, the recommendation 
from the Joint Chiefs to the Secretary that we stand up the 
Homeland Security Command now----
    Senator Warner. I am fully aware of that. As I looked 
through and listened carefully, I did not hear anyone mention 
homeland defense. Now, maybe I missed it, but I listened 
carefully. I suspect it is in these documents and I will refer 
to it. But my time is up, Mr. Chairman, and I do not want to 
encroach on others.
    Chairman Levin. Thank you, Senator Warner.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman. I 
appreciate it.
    Welcome, gentlemen. I particularly want to welcome Arthur 
Cebrowski, who was in Newport at the Naval War College. Good to 
see you again, Admiral Cebrowski.
    Admiral Cebrowski. Thank you, sir.
    Senator Reed. Mr. Secretary, a lot has been said about the 
new thinking, spiral development and capabilities-based 
development. But I am tempted to think this might just be new 
buzzwords, not new thinking. With respect to spiral 
development, we have in the past developed systems and then 
fully anticipated those systems would be improved as they were 
in the field.
    Can you, for example, describe the difference between a 
block buy for an F-16, for example, and spiral development? Is 
there anything different there?
    Mr. Wolfowitz. I will ask General Pace to help me on this 
also, but I think it is more in the degree of formality in the 
process in moving forward. Obviously, as you point out 
correctly, with the F-16 we have done what is in effect a 
spiral development. But I think there was a tendency at each 
step along the way to figure out what was the maximum 
technology we wanted and then put that on, whereas I think the 
thought with spiral development is to recognize that getting 
something out in the field quickly with less than perfect 
capability may be much better than increasing your requirements 
and thereby slowing down and increasing the cost of first 
fielding systems.
    The F-16 has been around a long time and those changes have 
come gradually over time. I think the approach that Secretary 
Aldridge has in mind, for example, with the Joint Strike 
Fighter, would get systems out into the field more quickly, 
recognizing that as they are fielded, as we gain experience 
with them, we will have a much better idea what the 
requirements will be.
    You have a fair point, that it is not a completely unknown 
process in the past. But what we are trying to do is to 
recognize it more specifically and try to have people ask 
consciously why are you not doing it that way.
    Admiral Cebrowski. If I could, sir.
    Senator Reed. Sure.
    Admiral Cebrowski. In spiral development or adaptive 
acquisition, the difference is toward the front end. The useful 
metric is capability cycle time. Right now the capability cycle 
time of the Department of Defense is considerably larger, 
perhaps two to ten times larger, than that of the commercial 
world. So we should be making efforts to move that forward.
    What Under Secretary Aldridge talks about when he talks 
about spiral development is how we reduce that cycle time. So 
it is, rather than waiting until you have 100 percent of the 
requirement satisfied and you have suppressed all of the 
technical risk--that frequently results in your first article 
not appearing in the forces for 10 to 20 years--is to go ahead 
and start well short, if need be, of the requirement to put 
some things in the field, to start production.
    Then in the process what happens is, because you have 
articles in the field sooner, you are getting concept 
development sooner and any appropriate organizational changes 
and doctrine much sooner. So it is a way of pulling things 
forward rather than a way of dealing with things once they are 
already in the field.
    Senator Reed. One other way to look at this--and Secretary 
Wolfowitz alluded to it when he said that there seems to be 
less formality in the spiral development--but that might also 
be described as not having the same type of very specific, well 
defined requirements that one can measure progress against and 
one can measure cost against. Is that a danger with this spiral 
development approach?
    Admiral Cebrowski. Actually I would say, Senator, that it 
is laudable, because with the spiral approach we seek to have 
upstream influence on the national security environment. That 
is, upstream influence on the market, create a market by virtue 
of the fact that we are moving into it more quickly. It is more 
of a venture capital approach than it is an investment banker 
approach to acquiring systems. So the risk moves to different 
areas in this, and of course, because it is new, it will 
certainly have the appearance of being more messy.
    Senator Reed. Well, let me go to another aspect of this. I 
find this topic goes quite a bit beyond simply what systems we 
are going to buy and how we are going to buy them. When we 
emphasize the capabilities approach, which ties in, I think, to 
the spiral development, one of the dangers I see is that you do 
not consciously, or at least as we did in the past, integrate 
specific threats. There is a real danger, I think, out there of 
saying, listen, we have to build whatever we can build because 
some day we will need that capability, which makes it very hard 
then to come to decisions about budgets, about specific 
systems, about many other things. There is a limited amount of 
resources we can devote, even in this time of great danger to 
the country.
    Without, I think, this touchstone of what is the real 
threat, we could go about building all sorts of systems, some 
of which we would never use, some of which we may use, some of 
which are always good to have. Frankly, the appetite of the 
Department of Defense for systems and building things, because 
of the nature of the business that you are in, is rather 
substantial.
    How do we make those--and this is my final question because 
my time has run out. How do we anchor our decisions about what 
we are buying and building to the real world, which I would say 
comes to what the real threats we face now and project in the 
future?
    General Kernan. Senator, let me try to tackle that. You are 
absolutely right, the intellectual change has to drive the 
physical change and it has to be a relevant capability. We have 
moved toward a capabilities-based strategy in conjunction with 
the combatant commanders and the Office of the Secretary of 
Defense (OSD). We will do the strategy to task analysis, we 
will do the joint mission area analysis and determine precisely 
what is required in the region in the way of capability.
    We will, obviously, then have to prioritize where we have 
deficiencies and work through those. But this is a very 
thoughtful process, and it is blast off at the Joint 
Requirements Oversight Council. It is also done in partnership 
with the combatant commanders, who are the employers of these 
forces, as well as the services which provide this force. So it 
is a very thoughtful process.
    Senator Reed. Thank you very much. It is nice to know that 
you are all investment bankers now.
    Admiral Cebrowski. No, no. Venture capitalists.
    Senator Reed. They work together, I am told.
    Thank you.
    Chairman Levin. Given the recent condition of the stock 
market, I am not so sure that you are moving in the right 
direction. But nonetheless, Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Transformation is an important subject. I am glad we are 
having a hearing on it. There is this constant tension between 
those who committed many, many years to new programs and 
systems they believe deeply in and then the world we have 
changes and we have to say no to some of those. Maybe they were 
a good idea in 1980 when they came up, but maybe they are not a 
good idea today.
    I think one thing we can see from this war in Afghanistan 
is we are transforming. Militaries around the world have been 
traditionally criticized and many wars have been lost simply 
because they fought the last war, they made no changes 
whatsoever in tactics, equipment, or doctrine during that 
period of time. Our military, more than any military I believe 
has ever existed, is challenging itself, bringing forth new 
weapons systems, new technologies, and actually employing them 
in a way that works.
    The sergeant on the ground can call in the Air Force. That 
is a very significant thing and I think we should celebrate 
that. But that is not there yet. We have a $380 billion, $379 
billion defense budget. Can we innovate more? Can we use more 
of that money effectively to integrate new capabilities and 
systems to be even more effective than we are today? I believe 
we can, and I salute you for moving in that direction.
    I have saluted Secretary Rumsfeld from the day he came here 
as a person committed to transformation. I salute President 
Bush. He used the words ``agile, lethal, readily deployable'' 
at the Citadel, which reminds me of Coach Eddie Robinson 
talking about his defense department, the winningest coach in 
football history. He wanted a defense department that was 
agile, mobile, and hostile. That is pretty close to what we 
need.
    So I think that is the right direction. I salute you for 
moving in that direction. I believe Congress has to support you 
in that and I want to do that.
    This cycle time question, I believe Senator Reed asked 
about it. I just visited a Honda Motor Company plant in 
Alabama. There was a field there 2 years ago. Today they are 
rolling out brand new automobiles, in 2 years from ground to 
new automobiles. They pour the block, they build the entire 
automobile there.
    Secretary Wolfowitz, do we not need to make some historic 
leaps forward in our ability to bring on new systems, and would 
that not save us money if we could?
    Secretary Wolfowitz. Absolutely, yes, Senator. We need also 
to work very hard at transforming the way we do our basic 
business. We have to, particularly in this era when we are 
looking for more and more highly trained, educated people in 
our military, we have to be really rigorous about what 
functions are truly military functions and what functions we 
can afford to contract out to more appropriate civilian 
operations.
    As you said in your question, we have to figure out how to 
bring systems on line faster. Part of that is what Admiral 
Cebrowski addressed in the context of spiral development. When 
it takes us 10 or 20 years to bring on a major weapons system, 
that is not a way to transform. That is a way to impose a kind 
of unilateral disarmament on this country, and we have to get 
out of that.
    Senator Sessions. Thank you. I believe it is a critical 
thing. This Congress needs to confront it and figure out how we 
can help you be more capable in doing that. Many of the delays 
are because of procedures set in law. I know that to be a fact.
    Admiral Cebrowski, do you want to comment on that, what we 
can actually do to bring these systems on sooner?
    Admiral Cebrowski. I think the discussion about spiral 
development points to that. I think that this is tightly 
involved in our culture, which has developed over the last 50 
years, focused on cost-benefit analysis and optimization, risk 
reduction. What has happened is we have become so focused on 
one particular area of risk that we have lost sight of the fact 
that risk is going out of balance.
    While a 16- or 20-year program might do well in suppressing 
technical risk, it aggravates all of the other areas of risk, 
on which we had not been focused. So we need to refocus on some 
of those other aspects to do that.
    I do think it is possible to bring on board very, very 
quickly sharp changes in our capabilities. Broadening our 
capabilities base is very important. I think the example of the 
high-speed transport is illustrative here. This did not exist 
as a program in any of the services, certainly not in the Navy 
where I was involved with it. But it became clear that this was 
the broad thrust of technology and of the marketplace, and so 
we went out and we just leased one and we put it in the hands 
of the operators.
    Until we did that, the institutional Navy had no interest 
in this. But once they got their hands on it, it fired their 
imagination and they wanted to get on with it. People who 
objected to it after being on board for only 10 minutes wanted 
to take charge of it. It was a marvelous thing. Now we see that 
that experimental article is on its way to Central Command, 
where it will be used to support the U.S. Army.
    All this happens in less than 2 years. So this kind of 
change does not have to take 16 years. From the first time that 
we started negotiating the lease until potential combat 
operations for a new capability, entirely new capability, less 
than 2 years. So its existence is proof that it can be done.
    It shows up again and again in our history. For example, 
go-ahead for the Polaris missile program was in November of 
1956. Just 48 months later, U.S.S. George Washington, the first 
Polaris missile submarine, goes out on its first patrol--4 
years, something of the same degree of technical difficulty as 
going to the moon.
    We can do this. It is a matter of courage and commitment to 
do it, and it takes a team effort. The four of us here at the 
table cannot do it alone. We need a lot of help and 
encouragement from Congress in that, and we certainly 
appreciate it.
    Senator Sessions. You do need congressional support and it 
will not only bring the system on sooner, but save a lot of 
money, I believe, in the process of building it. These delays 
cannot do anything but run up costs.
    Thank you, Mr. Chairman, for what you are doing and I 
appreciate the services. I do believe the weapons like the JDAM 
are critical and we need to make sure that our systems, 
production systems, are bringing them on soon enough.
    Chairman Levin. Thank you, Senator Sessions.
    Senator Bill Nelson.
    Senator Bill Nelson. Thank you, Mr. Chairman.
    Mr. Secretary, I want to compliment you and your team on 
the ways you are transforming the military, particularly what 
has been represented in the very successful military operations 
in Afghanistan. I have just returned from a second trip there 
in 3 months and I find the troops continue to be pumped. They 
know their cause is just. You are giving them the tools that 
they need to be successful. They are absolutely intent on 
prevailing.
    There is one hiccup that I noted and that is the issue of 
hot pursuit in an operation such as Anaconda, where some of the 
enemy got away. It is like the old days of in the 1920s, Bonnie 
and Clyde robbing the bank and racing for the state line, where 
the local sheriff and the state police cannot cross the line. 
This was a concern that was expressed to us, and in our 
congressional delegation there at Bagram Airfield I raised this 
particular issue.
    From there we went on to meet with President Musharraf in 
Islamabad and I raised the issue with him, and he did not say 
no. Upon my return, I have been somewhat perplexed to see 
contradictory comments being made in the press by both 
Musharraf and some of our leadership. However, I full well 
recognize that this is a matter of the most extreme delicacy, 
given all of the political sensitivities in that part of the 
world.
    So if you cannot or do not want to address it directly, 
which I would certainly understand, I clearly want to give my 
encouragement to you to work it out with Pakistan. This is a 
part of the terrain that in some places are only goat trails 
going from one country to the other across those rugged 
mountains. But we have to be able to pursue them into that 
territory despite a political boundary.
    Secretary Wolfowitz. Senator, with your agreement I would 
prefer to actually get into the details with you in private. 
But I think I can say confidently that we have had excellent 
cooperation from President Musharraf and from the Pakistanis. 
They do a terrific job on their side of the border. There are, 
as you correctly noted, these potential seams, but I think it 
is satisfactory and, for the reasons you properly noted, 
probably the less we say about it here in a public session the 
better.
    You gave me an opportunity, though, if I might, to point 
out that what General Franks and his people did in responding 
so quickly is truly remarkable, for an organization that is 
sometimes accused of being ponderous and slow. People comment 
on how long we built up in the Persian Gulf. Just think about 
these dates: General Franks got his orders to plan for 
operations in Afghanistan on September 20. That is 9 days after 
the attack on the World Trade Center and the Pentagon. There 
was no plan on the shelf.
    Senator Reed, I am sure you would agree with me that if we 
had come up here saying we needed extra money because of a 
threat in Afghanistan, we would have thought we were silly and 
you probably would have also. It hit us brand new. The 
operations began barely 2 weeks later on October 7, and within 
12 days of the start, on October 19, we had Special Operations 
Forces on the ground in the north with General Dostum.
    I have to tell you, at the time it seemed like an eternity 
and I remember how impatient Secretary Rumsfeld was to get 
those guys in. When you actually look at the dates, it is 
amazing how fast we moved, and I think it is a tribute to the 
way in which our military has changed, has recognized what it 
can accomplish, and it is a tribute to Central Command and 
their planning capability.
    Senator Bill Nelson. It is a tribute to other agencies of 
the government as well.
    Secretary Wolfowitz. That is correct, yes, sir.
    Senator Bill Nelson. Could you give us a report on the 
commander in chief down in SOUTHCOM? What is your plan for 
getting a four-star general in there?
    Secretary Wolfowitz. We recognize it as an extremely 
important job. Secretary Rumsfeld has been spending literally 
hours over the last month or two in looking at all the senior 
commands that have to be filled and that is clearly one of the 
very important ones. I am sure we are going to have a very high 
quality person to recommend shortly.
    Senator Bill Nelson. Well, there is a fellow seated to your 
right that can tell you a lot about that command and about the 
need for someone that has all those silver stars like his on 
his shoulder.
    Secretary Wolfowitz. It may not surprise you to know that 
he has told me that several times already, Senator.
    Senator Bill Nelson. I thought he had.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Nelson.
    Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    Secretary Wolfowitz, given our current commitments, such as 
Kosovo, Bosnia, homeland defense, Afghanistan, possible future 
operations in other countries that need not be named, and our 
extensive use of Reserves even before the global terrorism 
began, at what point will the Department of Defense consider a 
comprehensive increase in force structure?
    Secretary Wolfowitz. Senator, each of the services has come 
forward to Secretary Rumsfeld with proposals for increasing end 
strength. The Secretary's reaction has been not to deny that 
there are new requirements--there obviously are a lot of new 
requirements--but to say that before we make that considerable 
investment and long-term commitment to increasing our force 
structure, let us make sure that, in addition to having new 
requirements, that there are not some old requirements that we 
could shed and that we have really looked and scrubbed 
thoroughly to make sure that we are not doing things that we 
should have stopped doing a long time ago.
    I think that process is underway right now and I think each 
of the services is taking a very hard look at where in fact 
they might reduce some of their personnel requirements, because 
it is very obvious that there are new ones that have to be 
added.
    Senator Bunning. You said reduce?
    Secretary Wolfowitz. In some areas. It is well known that, 
for example, the Secretary has been trying for a long time to 
reduce our level of forces committed to the Sinai. Obviously, 
people say this is a bad time to do that, but that would be an 
example.
    Senator Bunning. In other words, you are talking more about 
moving personnel?
    Secretary Wolfowitz. Well, also freeing up people from old 
jobs that do not need to be done anymore, so that we have the 
people available within our current force structure to meet 
those new requirements. It is only after we go through that 
very careful scrub that we would want to do the fairly 
expensive decision to add force structure.
    Senator Bunning. Well, I think your report and all the 
studying that you have done should have taken that into 
consideration a little more on top, rather than as an 
afterthought.
    I want to get back to what Senator Reed was talking about, 
because I think he hit the nail on the head. The budget that 
you have sent up here takes care of legacy defenses more than 
anything else. Not much change. You are paying a lot more 
dollars for a lot more weapons systems. You also are spending 
certain amounts of money for old weapons systems that do not 
seem to work very well.
    I bring the V-22 Osprey up as one that you have not been 
able to get on line. How long ago did you start that program? 
Not you, but the Department of Defense.
    Secretary Wolfowitz. It started about 10 or 15 years ago, 
Senator.
    Senator Bunning. Do you not think you ought to have it 
worked out by now?
    Secretary Wolfowitz. It is a revolutionary technology. It 
has encountered some serious difficulties.
    Senator Bunning. We are spending 1 point what billion in 
the current budget that you requested? Almost $1.5, not quite 
$1.5 billion?
    Secretary Wolfowitz. We also are undertaking a very intense 
review of whether it can in fact meet its technical goals.
    Senator Bunning. But we also ordered 11 more, did we not?
    Secretary Wolfowitz. That is basically to sustain a viable 
production base in case we do decide to go ahead with it.
    Senator Bunning. If you decide that, after all the studying 
and things, it is a waste, will you pull the plug or will you 
not?
    Secretary Wolfowitz. Certainly if it is a waste, if it is a 
system that cannot work, then we will, and then we will have to 
look at an alternative for accomplishing that mission. It would 
be an alternative that will be less transformational 
technologically, but more reliable, more dependable.
    Senator Bunning. I think, in looking at your proposed 
budget for the year 2003, that more emphasis should have gone 
into, rather than traditional legacy operations--I know we are 
fighting a war, so I know that takes precedence and we have to 
have the supplies and the technology and everything that our 
fighting people need in the field. But if we are going to 
upgrade the Department of Defense in an effective manner, we 
have to get very forward-thinking, in not 10-year periods, but 
1 or 2 or 3-year periods.
    If you are talking about getting something operational in 
15-plus years, that is unacceptable. I will not accept that and 
I do not think too many people on this committee will accept 
the fact that we have been trying to make operational a weapons 
system that we have been dealing with for over 15 years. We 
cannot afford to do that.
    So if we are going to look at a $370 billion-plus budget, I 
expect you and everybody in your Department to be a little more 
forward-thinking, and I mean not 10 years forward-thinking. 
Just looking at the request for the Navy, is that forward-
thinking, four ships? We do not even get the 10, which is what 
is supposed to be the minimum that we are building.
    Secretary Wolfowitz. As I mentioned in my testimony, we 
have about $21 billion invested in this year's budget in 
transformational programs. That is a very substantial amount. 
At the same time, this budget has to cover large increases for 
health care and retirement, large increases for pay raises, 
large increases to cover the costs of the war.
    Senator Bunning. We understand.
    Secretary Wolfowitz. I think there is a lot of new 
investment here.
    Senator Bunning. We voted for those things. We understand 
that cost.
    Secretary Wolfowitz. The Navy made some decisions about 
where its priorities were in light of the fact that our current 
fleet is relatively young, relatively new. There is a lot of 
money in the Navy budget, for example, for a brand new 
capability which will be converting Trident submarines into 
cruise missile carriers. I think the Navy has tried to strike a 
balance between near-term versus long-term shipbuilding needs 
and near-term versus long-term readiness needs.
    Every place in this budget you will find difficult 
decisions have to be made and difficult tradeoffs have to be 
made. I think the services and we and OSD have done a very good 
job of making those balances.
    I would point out that Vice President Cheney, when he was 
Secretary of Defense, tried to cancel the V-22 program. 
Congress in its wisdom made us go ahead with it. We now have 
some 10 years of investment in trying to get that capability to 
work, and I think it is prudent to continue at least until we 
are sure whether it works or not, and at that point we will 
have to make a very clear decision.
    Senator Bunning. Thank you.
    My time has expired, but I would like to just add that we 
want to spend the $370 billion on defense, but you are going to 
have to sell it. You are going to have to sell it to the rest 
of the Congress of the United States. This committee supports 
you, but it is a tough sell right now.
    Chairman Levin. Thank you, Senator Bunning.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I, too, want to add my welcome to the Secretary and his 
team this morning. My questions will dwell around definitions 
of budget, financial management, oversight, and measurement for 
readiness. I also was interested in the statement by the 
Secretary that transformation can mean using old things in new 
ways. My question to you has to do with your very strict 
definition of transformation.
    You also discuss other items in the fiscal year 2003 budget 
request that are considered by the Department to be 
transformational, but do not meet that strict definition, 
including funding for precision-guided missiles, C-17s, and F-
22s. Do you have a total figure at least for the fiscal year 
2003 budget request for the programs that contribute to the 
Department's process of transformation?
    Secretary Wolfowitz. As I said in the testimony, in the 
strictly transformational category it is about $21 billion in 
2003 and $136 billion over the whole FYDP. In the 
transformation-supporting category, it is roughly equal 
numbers.
    Senator Akaka. Mr. Secretary, you have discussed the 
Department's intent to invest more than $136 billion in 
transformational technologies and systems over the next 5 
years, with $76 billion representing new investments, to 
accelerate or start new transformation programs. The Readiness 
and Management Support Subcommittee has held a hearing on 
financial management, as well as a hearing on acquisition 
reform. I am concerned about the Department's inability to 
properly account for all of its funding and have held a hearing 
on that.
    With respect to the proposed investment in acceleration or 
beginning of transformation programs, what kind of oversight 
does the Department intend to implement regarding these 
developing technologies to ensure that the appropriate progress 
is being made in a manner consistent with the goals of the 
transformation process?
    Secretary Wolfowitz. By the way, Senator, on your previous 
question, on page 7 of the prepared testimony I have both of 
those figures. In the strict transformation category it is the 
$21 billion in fiscal year 2003 and the $136 billion over the 
course of the FYDP. In the transformation-supporting category, 
the next paragraph, it is $25 billion in fiscal year 2003 and 
$144 billion over the FYDP.
    On your question about financial management, we agree very 
strongly with you that that is a problem area that has to be 
addressed on an urgent basis. Under Secretary-Comptroller 
Zakheim is undertaking a whole effort to restructure the way we 
do our financial accounting systems. I think we made some 
significant progress in reducing this enormous and embarrassing 
backlog of accounts that we have had difficulty keeping track 
of, and we are looking at ways to introduce new technologies so 
that we are operating off of a single enterprise system and we 
can keep track of what we are doing in a way that is essential 
if we are going to transform.
    I know the efforts that you have made to encourage that 
work and we look forward to working with you on it.
    Senator Akaka. Thank you for mentioning that. This has been 
a problem that we have been trying to resolve and I am glad 
that we are making a move on this.
    General Pace, I have heard you as well as the Secretary 
mention the need for intergovernmental and inter-agency 
meetings of the mind. One of the keys to the United States' 
success in Operation Enduring Freedom has been the seamless 
joint effort between the United States and its coalition 
members. You have testified about joint operational concepts 
and architectures and the necessity of forces operating in 
coalitions.
    What are the clearly defined goals regarding joint 
operations in the process of transformation? How do you plan to 
measure the readiness of troops to engage in these joint 
operations?
    General Pace. Senator, first with regard to your comment 
about the mindset, I would say that the ability to experiment, 
the opportunity to experiment and fail, has been key to the 
progress we have made so far in the war in Afghanistan, and I 
would say that that will be a key in the future.
    I mentioned in other forums, I think, that one of the main 
strengths Secretary Rumsfeld brings with him is the fact that 
he has a background which makes him comfortable with 
experimental failure, knowing that as we try we will find those 
leap-ahead opportunities that only experimentation can foster. 
That is one of the things that General Kernan's folks do very 
well.
    With regard to the Joint Requirements Oversight Council, as 
our country looks out and as we are given our defense planning 
guidance from the Secretary for the types of capabilities that 
we want to be able to develop and apply worldwide, 
transformation can have a thread through all of that. What 
capability do you want to apply, in what time frame? You can 
then take current force and forward-base it or you can have 
forward access, allowing you to move your forces forward from 
the States, or you can have forward presence in the form of 
naval forces, or, as I mentioned, you can just straight deploy 
from the United States to the combat area depending upon the 
time lines involved.
    The transformation part goes to the things Admiral 
Cebrowski was talking about. You might want to build more 
airplanes or you might want to build a 50-, 60-, or 70-knot 
ship that allows you to close that time line.
    So as we look at the umbrella requirements and capability 
requirements of the things we want to be able to do on foreign 
battlefields and the umbrella operational concepts that tell us 
how we can apply to resources to provide those capabilities, we 
can then mix and match based on experimentation and experience 
whether we are going to move the assets we currently have more 
effectively or if we need to in fact seek a new solution, 
either in the way that we apply them or in the way that we 
build them.
    I am not sure that that answers your question completely, 
sir.
    General Kernan. Can I just add onto that, Senator? The 
analytical piece of experimentation is extremely important and 
we recognize that. We have to take away as much subjectivity in 
our analysis as possible. We are baselining ourselves 
continually and applying metrics, so when we go and do an 
experiment we use the instrumentation or some prescribed 
methods to ascertain whether or not this is truly value added.
    For instance, one of the things we are doing right now--
because there is a tremendous emphasis on command, control, 
communications, and computers and downlinking and all the 
collaborative tools necessary to conduct distributed 
operations--is continually measuring bandwidth and seeing how 
we can maximize the use of that bandwidth, and also recognize 
when we are in surge capacity and what the impact may be on 
other people's operations during that period of time.
    So this is a very deliberate process. We have an assessment 
and analysis branch put together, and as we move more toward 
the integration of the instrumentation in the western training 
areas I think we are going to get even more precise in our 
analytical skills.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Chairman Levin. Thank you very much, Senator Akaka.
    Just before I call on Senator Nelson, would you complete 
for the record, Secretary Wolfowitz, your answer to Senator 
Akaka relative to the investments that you are making in 
transformation this year, next year, both directly and in 
support of tranformation? You have numbers in your testimony, 
you have given numbers here. Would you supply for the record 
the list of the programs which make up those numbers both this 
year, next year, and for the next 5 years? Would you give us 
your definition as well for the record of what constitutes 
transformation? Thank you.
    [The information referred to follows:]
                 Investments Relative to Transformation
    Transformation is a process or plan aimed at reducing future 
security risks to America. Transformation will enable the Department of 
Defense (DOD) to counter 21st century threats more effectively. It is 
fundamentally about redefining war on U.S. terms by harnessing an 
ongoing revolution in military affairs. Working with U.S. allies and 
friends, transformation seeks to shape the changing nature of military 
competition and cooperation. It uses new combinations of operational 
concepts and capabilities, imaginative application of old and new 
technologies, and new forms of organization. It seeks to exploit 
America's advantages and protect our vulnerabilities. The goal is to 
strengthen our Nation's strategic position, which helps underpin peace 
and stability in the world.
    Transformation is likely to result in fundamental changes in 
military operations and, over time, a rebalancing of the U.S. portfolio 
of capabilities and forces. For example, the portfolio of capabilities 
will shift between manned and unmanned systems, short- and long-range 
systems, stealthy and non-stealthy systems, and unprotected and 
hardened systems.
    The President's fiscal year 2003 budget included $21 billion in 
transformation funding, as determined by DOD leaders. The budget was 
based on plans that project transformation funding to total $136.6 
billion for fiscal year 2003-2007.
    Enclosed is a list of the programs DOD leaders identified as likely 
to provide new kinds of military capabilities to the force and their 
funding projected for fiscal year 2003-fiscal year 2007. This list will 
change as DOD leaders learn more about the direction that 
transformation will take and the technologies that will be needed to 
support the transformation of the force. Some of this transformation 
funding spans two or more program elements or is subsumed within larger 
programs.
      
      
    
    
      
    Chairman Levin. Senator Ben Nelson.
    Senator Ben Nelson. Thank you, Mr. Chairman.
    I want to thank you all for being here today. In February 
when I visited the troops in Afghanistan, Uzbekistan, and 
Pakistan, I found the morale very high--people committed to the 
task, fully supported by the American people and by our friends 
worldwide. I believe that continues and they are doing a 
magnificent job.
    I also found it to be a field where transformation was 
underway as we tried new things, fighting a current war with 
current technology. But it was pretty clear from many anecdotal 
stories that old technology still works as well. So when we are 
in this balance, trying to balance between new technology, old 
technology, what works today, what might work tomorrow, we 
ought not forget what worked yesterday, but we ought not rely 
solely on that, otherwise we will be in a position where we can 
only fight the last war.
    I am struck by the challenge that you have and I do not 
envy you, but I want to assist in any way that I can in 
determining the technology, so that we are not looking at 10 to 
15 years to develop something we cannot know whether it will be 
successful. We should not, though, move away from trying to 
think forward. Certainly we must do that.
    But balancing the old and the new I think is going to be a 
continuing challenge for all of you and for those who work with 
you, whether you are looking at the kind of war that is being 
fought in Afghanistan today or whether you are taking a closer 
look, as we did in Colombia. General Pace, you were a gracious 
host and provided a lot of information. Maybe a lot of the new 
technology just is not appropriate for that kind of conflict.
    So I think it is important that we prioritize the 
challenges in technology. I hope that you are looking at it in 
terms of prioritization, that maybe we cannot wait 10 or 15 
years to decide if something does not look like it is going to 
be successful, because we are going to be putting a great deal 
of our asset structure, our resources, into that at a time when 
maybe it ought to remain on the drawing board.
    I just do not know how long we can go with a product, with 
a project, with technology, research and development, before 
you pull the plug. Your challenge is to keep Congress happy if 
Congress wants a certain project, but I hope that as you do 
this you will be in a position where you can come back and 
deliver bad news and that there is no penalty for delivering 
bad news when something did not work.
    Secretary Wolfowitz. You are absolutely right, Senator. I 
think it is what General Pace referred to earlier and Secretary 
Rumsfeld refers to all the time. You want to try things, 
recognizing that some of them will not work. In fact, in this 
year's budget, I think for the first time ever, Under Secretary 
Aldridge declared a program in breach of the Nunn-McCurdy rule, 
which has normally been waived every time a program has come up 
with those kind of cost overruns.
    In fact, he has cancelled both the Navy Area Wide System 
and the SBIRS Low System, though we hope to replace them with 
other things that look to be working better.
    We have said from the beginning, particularly in the area 
of missile defense, where we are trying a lot of different 
things, that some of them are not going to work. While you have 
to reinforce success, you have to also be prepared to kill 
failure.
    Senator Ben Nelson. It is the old adage about not pouring 
sand down a rat hole. You have to figure out whether it is a 
rat hole or not. But the price to experiment and to try should 
never be so high that you cannot admit failure along the way 
or, if not failure, that the cost-benefit ratio is not 
justified, because unlimited resources will permit you to 
succeed, but it will also permit you to never have to admit 
failure.
    Secretary Wolfowitz. That would be a mistake.
    Senator Ben Nelson. Thank you.
    General Pace, do you have any thoughts on making our 
transformation work for us, but not to the point of getting us 
so far ahead with technology that we cannot go back and do the 
traditional things that we still need to do? I do not know 
whether we want to keep our stable of horses, on the one hand; 
on the other hand, there may be occasion when that kind of 
ancient technology fits into the equation.
    General Pace. Sir, I agree. I think we have the opportunity 
to dedicate a portion of our resources to the transformation 
process, to the experimentation process. We have been 
fortunate, thanks to many years of sustained bilateral support 
in Congress, to have a military that is second to none, that 
has no peer on the horizon. That is why we are being attacked 
asymmetrically and that is why we will continue to be attacked 
asymmetrically.
    But in that time line where we have no peer competitor we 
can afford to take part of our resources and apply them to 
experimentation, to the trials and failures of looking beyond 
our current capabilities to what we might be able to do in the 
future. Again, this is filling out the specifics of the 
overarching operational concepts.
    But clearly, some of the things we have in our kit bag 
right now are exceptionally versatile. The B-52 that the 
Secretary mentioned before, it is 50 years old, give or take a 
few years, and still now providing close air support because of 
the transformational weapon that it is carrying to the 
battlefield.
    So I agree with you, sir.
    Senator Ben Nelson. Thank you. I think you all agree that 
successful transformation does require prioritization and a 
determination that some things that looked pretty good 10 years 
ago do not really fit into where we are today or where we are 
going to go tomorrow.
    Secretary Wolfowitz. Right. I agree also that one of the 
most difficult pieces of balancing we have to do in this budget 
is between the large investment that goes into sustaining the 
current force and the actually smaller fraction that goes into 
preparing that force of the future, and you have to keep the 
balance.
    One of the statistics I have heard about the German 
transformation of the 20s and 30s is that only 10 or 15 percent 
of the German army was in fact armored at the time that they 
developed blitzkrieg. I do not know if arbitrary percentages 
are a mistake, but certainly the goal is not to transform the 
entire force. That would probably lead to a general collapse.
    Senator Ben Nelson. Thank you.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Nelson.
    Secretary Wolfowitz, the members of our second panel have 
reached different conclusions relative to the Army's Crusader 
artillery system. One of our witnesses points out its utility 
in a contingency such as a land war in Asia. The other witness 
will point out the drawbacks to Crusader, including weight, 
transportability on the C-130, and a shorter range than some of 
the other Army strike systems. Secretary of the Army White is 
reported to have described the Crusader as transformational.
    I am wondering if you could give us a very quick assessment 
of the Crusader.
    Secretary Wolfowitz. I think one thing to say about 
Crusader is that the Crusader of today is not the Crusader that 
people were talking about some 2 years ago. The Army responded 
to the appropriate criticism that it was much too heavy to move 
anywhere by redesigning the vehicle and reducing it so that the 
weight of the total system is down by about a third.
    I think how you rank Crusader depends in part on whether 
you compare it to current artillery, in which case there are 
some technologies that are dramatic improvements over what we 
have with the Paladin, or alternatively if you look at where we 
might be able to go in the future with artillery systems that 
in some ways substitute for artillery systems that are still 
very much on the drawing boards, very much in the form of 
briefing slides rather than actual capabilities, that might 
allow us to really rethink the whole way in which we look at 
artillery.
    Clearly, one of the things that we want to do is invest as 
much as possible in bringing forward those kinds of 
capabilities, the capabilities that are in the Future Combat 
System. A separate but important development is to accelerate 
the development of very accurate artillery munitions, 
particularly the Excalibur round. We saw with----
    Chairman Levin. Given our time constraints, can you just 
give us your summary as to where you are?
    Secretary Wolfowitz. I think my summary is that Crusader is 
a little bit in-between, and it is a system that brings us some 
dramatic new capabilities, but if we can bring forward some of 
the transformational capabilities more rapidly we might see 
ways to put that Crusader technology into a different system.
    Chairman Levin. Thank you.
    I would like to ask you a question about the so-called $10 
billion contingency in the fiscal year 2003 budget. Does the 
Department support leaving that as a contingency to finance 
increased operational costs to continue the global war against 
terrorism, and that it not be diverted to other uses? Or have 
you changed that position?
    Secretary Wolfowitz. No, that is our position very 
strongly. It is there as a contingency operating fund to allow 
us to continue operations into fiscal year 2003 without having 
to come immediately for a new supplemental on October 1st. We 
do not know what those operations will be or what level it will 
be at, but, as I think we have briefed in the past, that number 
gets us about halfway into the year on the assumption that 
operations are at their current level. It is impossible to 
predict what level it will actually be at, obviously.
    Chairman Levin. Thank you.
    General Kernan, your formal statement today makes a 
reference to the fact that our present joint forces are highly 
capable, as recent operations demonstrated, but that they are 
overdue for a recapitalization. When you were testifying before 
the House Armed Services Committee on March 14, you also added 
that ``they are overstretched.'' That created something of a 
news article.
    When you were asked about that, you said, ``we are busier 
than we have ever been and we are stretched.'' Apparently, 
according to The New York Times, the Secretary was upset when 
he read about this testimony. I am wondering whether or not you 
stand by that testimony, that you believe our troops are 
stretched, because we need your own honest, unvarnished views 
on this. So are they stretched and was it in any way suggested 
to you that you modify your testimony as it appears in today's 
printed version?
    General Kernan. No, sir, nobody asked me to modify my 
statement at all. I welcome this opportunity also to clarify 
because, as you can appreciate, things are oftentimes taken out 
of context. The dialogue between myself and the Congressman had 
to do with manageable risk, and I believe what I said was that, 
yes, we are stretched, but this is manageable.
    The come-back statement was: `` I understand that the 
troops are getting pretty worn out.'' My comment was: `` Yes, 
they are tired, but the commanders are doing a good job in 
rotating the forces through the theater of operation.''
    So really, I guess the bottom line up front is, sure, this 
is a challenge. Yes, we can manage it. But we are at war and we 
are going to do what is necessary. We will ensure that we 
maintain readiness and have the deployable packages our 
combatant commanders need when and if they are required.
    Chairman Levin. Thank you.
    Senator Warner.
    Senator Warner. Thank you very much.
    Mr. Secretary, I offer an observation and a little bit of 
advice. These programs successively come before Congress with 
the best of intentions and then they are lost as the years go 
on. You talk about the intransigence in the military 
historically. It has been in Congress. We need look no further 
than the base closure struggle that the Chairman and I and our 
two counterparts in the House had in getting across the concept 
to allow basic efficiency of management and savings. Anyway, it 
is the law now.
    I would hope that Admiral Cebrowski, as long as he is 
willing to serve in this position, is given the authority to 
keep working with Congress, because when these items come up 
they are buried in massive documents. Somehow there ought to be 
a red tag put on transformation so that when we make the 
deliberations--do we take this program or that program or cut 
this one or cut that one--we are conscious of what is an 
integral part of your transformation. There is a certain 
synergy between all the parts not unlike a chain, where due to 
the weakest link the whole thing fails to serve the ultimate 
goals that you have. If we let one or two pieces of it lapse 
and the others go forward, then I think it would be less 
effective.
    So to get this through over the years to come, you have to 
put emphasis on it and flag it when it comes up to Congress .
    I also have a concern, and we certainly saw this in Kosovo 
and have seen it in our Afghan operations, that we are so far 
ahead of our allies. Can anyone say that other nations are 
looking in a comparable way to their transformation? General 
Kernan, do you see a lot of it? You are the CINC right out 
there with our allies. What do you see? Do you see them working 
on transformation in any measure comparable to what we are 
trying to do?
    General Kernan. Comparable to what we are doing, no, 
Senator. Transformation, yes. The Secretary General of NATO, 
Lord Robertson, has been emphasizing continually the need to 
invest more in defense budgets so that the alliance would 
modernize, and he established 58 defense capabilities 
initiatives that he wanted us to focus on.
    In my role as Supreme Allied Commander Atlantic, we have 
the lead for concept development and experimentation for the 
alliance and bringing forward with General Ralston 
recommendations for the military committee.
    Senator Warner. I want to move on to a couple other points. 
I simply say that coalition warfare is the key to the future. 
Not only does it bring our allies in to share the burdens, but 
also here at home I think the perception of the American people 
is we cannot go it alone always, time after time. So I would 
hope that our allies study these initiatives by the Secretary 
of Defense and yourselves and that they begin to generate 
within their own structures a comparable transition program.
    Andy Marshall is a very celebrated and loyal public servant 
I think he dates back to my ancient days in the Department. I 
am not sure. I seem to have a recollection he was there. 
Hopefully, some of his concepts have survived all of the layers 
of review and so forth. Anyone wish to comment on that? Mr. 
Secretary?
    Secretary Wolfowitz. I think he dates back to 1973, 
Senator.
    Senator Warner. I was there, yes.
    Secretary Wolfowitz. I think he has had a very significant 
influence on the Department in general and I think played a 
major role in, going back a few years, getting people to 
appreciate that the transformations that are possible in this 
era really could have a revolutionary quality to them. That 
phrase ``revolution in military affairs'' was in many ways 
misunderstood, but--
    Senator Warner. Very well, I will accept your reply.
    Secretary Wolfowitz. I can tell you also that Secretary 
Rumsfeld talks to him regularly and values his guidance very 
much.
    Senator Warner. Thank you.
    General Kernan, how will the new unified command here in 
the continental United States--CINCNORTH, I believe that is the 
designation--how will that impact on your responsibilities? 
Will there be a transfer of some of your responsibilities to 
that command? Is it coming along smoothly? I am hopeful that 
that command can soon be designated, up and operative.
    I continue to be worried about homeland defense I say this 
to you and each of the witnesses with deep respect. Our 
American public expects every action necessary to help that 
situation and strengthen it quickly.
    General Kernan. Yes, Senator, the plans are coming along 
very well. Both Joint Forces Command and NORAD collectively 
have worked together to form an implementation plan. When 
directed, we will put together the transition team to allow 
that CINC-dom to start standing up. In the interim, we will 
maintain the responsibility to do the land and maritime 
security of the homeland and NORAD the aerospace piece. It will 
be a seamless transition to NORTHCOM when they are ready to 
accept the mission.
    Senator Warner. Let me close out. How quickly, Mr. 
Secretary, do you anticipate the President and-or Secretary 
Rumsfeld or yourself will be announcing the details of that, so 
we can move forward?
    Secretary Wolfowitz. I would hope fairly soon, Senator.
    Senator Warner. Has the location been decided yet?
    Secretary Wolfowitz. That is also being studied.
    Senator Warner. Thank you.
    Lastly, Mr. Chairman, the famous phrase ``skip a 
generation'' was often used by Secretary Rumsfeld and others 
when we began this process a long time ago. As I look through 
your documentation, I think probably the DD-21 program is an 
example of how we made a tough decision in moving on to another 
generation. Are there other examples in here? Perhaps, given 
that my time is up, you can just enumerate one or two and put 
in for the record the others that could qualify for this 
concept of skipping a generation.
    Secretary Wolfowitz. To be honest, Senator, that is a 
harder concept to apply in practice than it is to 
conceptualize. You are absolutely right, the DD-21 is an 
example of that. It is the one that comes most to my mind. I 
will see if for the record we can provide you with others.
    [The information referred to follows:]

    While ``skipping a generation'' describes transformation activity 
in many ways, simply put, it is representative of significant change. 
It suggests a technological inflection point at which we forego 
incremental improvements to existing systems and capabilities in favor 
of those investments that potentially redefine the context of our 
competivitve advantage. Most recently, Global Positioning System (GPS) 
capabilities are representative of such a redefinition. Historically, 
there are many other examples--the change from wind driven to steam 
powered ships, naval aviation, the tank, the helicopter, submarine-
launched ballistic missiles, and night vision devices are just a few. 
As a consequence of the change that it brings, ``skipping a 
generation'' most importantly suggests an alteration in how we think, 
from the policy level through the tactical. While accepting 
modernization, it suggests that future forces are not necessarily a 
linear extension of current capabilities that potentially ``skip a 
generation'' include high-speed wavepiercing catamarans for both 
strategic and intra-theater lift, underwater unmanned vehicles for mine 
clearing operations, unmanned aerial vehicles for long-range precision 
strike, and space-based sensors for persistent surveillance of the 
battlespace.

    Senator Warner. Well, we skipped back on the cavalry one 
and I am all in favor of that. I think that is----
    Chairman Levin. That is called skipping back a generation.
    Senator Warner. Well, that is what I said. It is my phrase. 
Do not steal it.
    Secretary Wolfowitz. That is an interesting notion. We will 
explore it.
    Chairman Levin. Senator Warner said: That is called 
skipping back a generation.
    Senator Warner. That is right.
    Secretary Wolfowitz. It worked.
    Senator Warner. It worked.
    Thank you.
    Chairman Levin. Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman.
    Thanks to the witnesses. I apologize for being so late. It 
is one of those mornings that I had other commitments that kept 
me from being here. But I am very interested in this subject. I 
thank you for all you are doing to move us forward.
    As I said to General Kernan a while ago, I feel as if 
people in the Pentagon are really getting with the 
transformation idea, but it is hard to bring it all together 
and do everything else that all of you are being asked to do. 
Senator Santorum and I saw this recently in our Airland 
Subcommittee as we focused in on the Army and the difficulty 
with the amount of money that they are being given, which has 
been increased significantly in this year's proposed budget to 
both maintain the legacy force, get to the interim force, 
provide for an interim force, and then get to the objective 
force.
    It requires a lot of very tough decision-making all around 
to make sure the transformation that I think we all want occurs 
both as rapidly as possible and as jointly as possible.
    Just a few questions. General Pace, I recall a few years 
ago that Secretary Cohen and General Shelton talked about the 
importance of having the JROC get involved in making decisions 
about programs up front before the services made their 
decisions as a way of making sure that transformation was being 
expressed in the program decisions that were being made and 
that there was a unity of purpose and that we were not 
overlapping and wasting resources. I wonder if you could give 
us a sense of the work of the JROC in that regard.
    General Pace. Senator, I think my predecessors in the JROC 
have in fact gotten the process to the point where now before a 
major weapons system or a major concept is funded, it gets the 
JROC stamp of approval on its forehead. But as I said in my 
written statement, we are because of that currently in the 
``grading somebody else's homework mode'' as opposed to being 
proactive in our own right.
    What we need to do in the JROC is take the defense planning 
guidance that the Secretary puts out, seize on those two or 
three or four major concepts, and drive the train for bringing 
those concepts to fruition, taking a look at what capability we 
want to deliver on the foreign battlefield, in what time line, 
what are we capable of doing today, and where there is a gap, 
filling that gap, either through asking a service to experiment 
at the service level or Joint Forces Command to experiment at 
the Joint Forces Command or, if there is a technology fix 
already in place, getting a service to in fact take that on.
    So we are not doing the part we should be doing as well as 
we should as far as being proactive, sir.
    Senator Lieberman. That is my concern. Do you have the 
intention to get the JROC in exactly the posture you have 
described up front?
    General Pace. I do, sir. Quite candidly, I took this job on 
1 October. We have been a little bit busy.
    Senator Lieberman. Sure.
    General Pace. I have since been through JROC 101 and JROC 
102 in the last 6 months, and I am dangerous now. But in the 
last month and a half we have gone through all 84 of the 
products and processes that the JROC is currently concerned 
with, and we have looked at each one to determine if we should 
still be doing that. We have taken about one-third of those off 
our plate because they are important, but not JROC business, 
and we have cleared up space on our plate for the things that I 
talked about, when the defense planning guidance comes out, 
that we can take and drive, sir.
    Senator Lieberman. Admiral Cebrowski, I want to give you a 
chance to speak a little bit. I have benefited a lot from your 
writing and thinking on all these issues. I know Secretary 
Rumsfeld is fond of saying, and I agree with him, that 
transformation is not just about new weapons, it is about new 
ways of thinking and new ways of fighting.
    I was heartened by your appointment. I wonder if you could 
just talk for a little bit as to what you see as your priority 
as the Secretary has defined it for you in your position.
    Admiral Cebrowski. Thank you very much, Senator. What sits 
at the top of my list is to assist the Department in moving 
toward the information age. Moving from the industrial age to 
the information age is the way to leverage the great power that 
we have resident in America. Also it is in recognition of the 
fact that the entire world is moving into the information age. 
To the extent that we do not do it or do it poorly, we will be 
at a decided disadvantage.
    The next area of my thrust is to broaden the capabilities 
base. To the extent that we focus very well on a few 
capabilities and think in terms of depth or how much is enough, 
we in fact aggravate our risk. Risk in this age is better 
mitigated by addressing issues of breadth. So we need to 
broaden the capabilities base, the technology base, as well as 
our industrial base.
    Senator Lieberman. Let me ask you this question about the 
first two. Have you been given resources to carry out those two 
very important missions, or are you an advocate within the 
building?
    Admiral Cebrowski. I am indeed an advocate, but I am also 
meant to be a catalyst. I asked for enough money to run my 
office and to catalyze experimentation and the development of 
experimental articles or operational prototypes, because of my 
conviction that change is most likely to be assisted if you can 
put some real experimental articles in a person's hand, and 
that is how you address the cultural issue.
    I did not ask for a very large amount of money. As a matter 
of fact, I turned it away because I would rather see myself 
more as a venture capitalist, if you will. I do not want to 
spend my time administering a budget. Yet I have been assured 
that as ideas come forward the Comptroller will be responsive.
    Senator Lieberman. Very good.
    My time is up. Thank you all. Thanks, Mr. Chairman.
    Chairman Levin. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I have just one question for General Kernan. I know that 
your plate is full with the war that that we are waging now, as 
well as transformation. I am particularly interested in 
transformation, what is happening there. I know that in your 
statement you have mentioned the need for integration and its 
efforts between the local, State, and Federal Government 
people, and you talked about the fusion of full intelligence 
and information and the need for that.
    In the process of transformation, how will the proposed 
changes in the UCP, Unified Command Plan, impact the Joint 
Forces Command in the process of transformation? For example, 
do the proposed changes fortify the Joint Forces Command in the 
execution of its mission to defend the homeland and provide 
military support to civil authorities? That is my question, 
with the civilian authorities and the civilians; how will the 
proposed changes bring about this process of working with the 
civilian authorities?
    General Kernan. I do not envision any change in that at 
all. What I do see is Joint Forces Command divesting its 
responsibilities of land and maritime security to this new 
command that will be called Northern Command. As far as I know, 
there will be no changes to laws, no changes to the statutes 
that will be affected whatsoever. Joint Forces Command will 
still have the responsibility to provide trained and ready 
forces for the homeland security and that would be, obviously, 
under the command of Northern Command, who would have that 
overarching responsibility for homeland defense.
    Senator Akaka. Thank you very much, Mr. Chairman. I just 
wanted to pick up for Senator Warner's question on the UCP. 
Thank you.
    Chairman Levin. Thank you very much, Senator Akaka.
    Let me ask just one question because I think that probably 
may make sense in terms of logic, but not reality. I just have 
one question, Secretary Wolfowitz, for you. Section 1010 of our 
National Defense Authorization Act for Fiscal Year 2002 
provided that $1.3 billion was authorized either for ballistic 
missile R&D or for Department of Defense activities for 
combatting terrorism and that these funds could be allocated 
only by the President for either purpose.
    Do you know if that allocation has been made?
    Secretary Wolfowitz. I do not believe it has yet, Senator.
    Chairman Levin. Would you find out if it has, because when 
there is such an allocation, then of course the Secretary of 
Defense would be required under that same section to submit to 
our committee a report describing the allocation and the 
Secretary's plan for the use by the Department of Defense of 
funds that are made available pursuant to such allocation. So 
if you could keep that in mind, to let us know whether that 
allocation has been made or not.
    Secretary Wolfowitz. Yes, thank you.
    [The information referred to follows:]

    Congress chose not to appropriate funds in a manner that would have 
required the allocation contemplated by section 1010 of the National 
Defense Authorization Act for Fiscal Year 2002. Therefore, the 
authorization has not been allocated.

    Chairman Levin. That is the only question I have. Senator 
Warner is all set.
    Senator Lieberman.
    Senator Lieberman. Mr. Chairman, I think we should let this 
panel have its liberty and go on to the next. I thank you. The 
questions could go on all day. It is a great group which is 
doing a wonderful job. I thank them and look forward to the 
next occasion.
    Chairman Levin. We thank you all for coming forward. We 
thank you for your testimony. There will be some additional 
questions for the record, along with a written statement from 
Senator Thurmond. We will now move on to the second panel.
    [The prepared statement of Senator Thurmond follows:]
              Prepared Statement by Senator Strom Thurmond
    Mr. Chairman, as we complete the hearing cycle on the President's 
defense budget request for fiscal year 2003, it is appropriate that we 
close this morning with a hearing on the policies and programs to 
transform the Armed Forces. This transformation is the Department of 
Defense's most important under taking of this young century. Its impact 
on the Department will be equal to that of the 1948 restructuring of 
the War Department into the Department of Defense and the Goldwater-
Nichols Act of the 1980s in regard to joint operations.
    Although the transformation of our ``Cold War'' Armed Forces is 
long overdue, it will not be done overnight. Rather, because of its 
long term implications, it must be a deliberate process that fully 
considers the ramifications on not only the Armed Services, but also on 
the technologic base and industrial base. More important, the budget 
must support it.
    Mr. Chairman, last year's Quadrennial Review recommendations and 
those of the various strategic reviews form a sound basis for the 
transformation. These recommendations also created expectations that 
the fiscal year 2003 budget would be a budget dedicated to the 
transformation. Although the President's budget request provides 
substantial seed money to initiate transformation, it is not the 
radical budget many of us expected. I urge the committee to be more 
proactive in funding the key transformation initiatives both in terms 
of technology and weapons systems.
    I want to welcome Secretary Wolfowitz, General Pace, and the other 
distinguished panel members. I believe Chairman Levin has brought 
together an outstanding group of experts on the issue of transformation 
and I look forward to their testimony.
    Thank you, Mr. Chairman.

    Secretary Wolfowitz. Thank you for your interest in the 
subject.
    [Pause.]
    Chairman Levin. The committee will come back to order. We 
welcome our second panel: Dr. Krepinevich and Dr. Thompson. I 
have given brief introductions of both of you. Dr. Krepinevich, 
why don't you begin.

STATEMENT OF ANDREW F. KREPINEVICH, PH.D., EXECUTIVE DIRECTOR, 
         CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS

    Dr. Krepinevich. Thank you, Mr. Chairman. I have prepared, 
obviously, a written statement for the record and will 
summarize my remarks.
    Chairman Levin. Thank you for that and it will be made part 
of the record.
    Dr. Krepinevich. I would like to begin by complimenting the 
committee for focusing on this important issue, which at its 
core concerns how well we are preparing our military to meet 
the very different challenges that are now emerging or will 
likely emerge to our security over the next decade or so. I 
would also like to applaud Secretary Rumsfeld's team, which has 
provided us with a compelling answer to the question, why 
should the world's best military transform itself?
    As the administration has noted, our would-be adversaries 
have an enormous incentive and, with rapidly diffusing 
military-related technology, increasingly have the ability to 
present us with very different kinds of threats than those we 
encountered in recent years, whether it is the Gulf War or 
operations as recent as Operation Allied Force. These emerging 
challenges are set forth in the administration's QDR as 
``critical operational goals for our military,'' which center 
primarily around our ability to project power in the face of 
anti-access and area denial threats and on our ability to 
defend the American homeland.
    In the interest of time, I will focus my summary on the 
power projection issues, as the forces associated with them 
dominate the administration's defense program. Anti-access is 
simply the growing threat we face to our ability to access 
forward bases for military operations, whether they are ports 
or major airfields or air bases. We have seen this in recent 
years in Operations Desert Fox and Allied Force, where 
longstanding allies refused to allow us to conduct certain 
operations out of their bases, thus significantly limiting our 
military capability.
    We have seen it in such places as Albania and Central Asia, 
where we have been given access to bases, but where the bases 
are so austere that our military forces have not been able to 
really exploit them to realize their full capabilities.
    But perhaps of greatest concern, with the proliferation of 
ballistic and cruise missiles, is the fact that over time--and 
it is occurring in places like Korea already--increasingly 
these major ports, these major air bases, where we deploy our 
forces to and sustain them from are going to be put in the 
crosshairs of enemy missile forces. So if there is an Omaha 
Beach or an Anzio of the 21st century, it will likely occur not 
at beachheads, but at major ports and air bases.
    As Secretary Wolfowitz recently testified, ``U.S. forces 
depend on vulnerable foreign bases to operate, creating 
incentives for adversaries to develop access denial 
capabilities to keep us out of their neighborhoods.'' We must 
therefore reduce our dependence on predictable and vulnerable 
base structure by exploiting a number of technologies that 
include longer-range aircraft, unmanned aerial vehicles, 
stealthy platforms, as well as reducing the amount of 
logistical support needed by our ground forces.
    The QDR adds to this in saying that these joint forces must 
not only be capable of conducting distributed and dispersed 
operations, the network-centric warfare that Admiral Cebrowski 
talked about, but also able to force entry in anti-access or 
area denial environments. They must have the ability to arrive 
quickly at non-traditional points of debarkation.
    Linked to this anti-access threat is the so-called area 
denial threat. Basically what that speaks to is the fact that 
the mission of our maritime forces will increasingly be 
centered on the littoral, on seizing control of the green 
waters near the shore, in terms of being able to support the 
projection of forces ashore and their sustainment. As the anti-
access threat matures, we are going to need maritime forces to 
provide early fire support and, quite frankly, fire support 
over the period of the campaign, but also to quickly open up 
the littoral for the sustainment through resupply of forces 
based on land.
    Admiral Johnson, once the Chief of Naval Operations, and 
perhaps the first to see this threat, said: ``Over the past 10 
years it has become evident that proliferating weapon and 
information technologies will enable our foes to attack the 
ports and airfields needed for the forward deployment of our 
land-based forces. I anticipate that the next century will see 
those foes striving to target concentrations of troops and 
material ashore and attack our forces at sea and in the air.''
    This is more than a sea denial threat or a Navy problem. It 
is an area denial threat, whose defeat or negation will become 
the single most crucial element in projecting and sustaining 
U.S. power where it is needed.
    Again, as our maritime forces move closer to the littoral, 
essentially they come more and more within range of an enemy's 
military capabilities, whether it is diesel submarines 
operating in the littoral, coastal combatants that can move 
with high speed and have stealth, anti-ship mines, or anti-ship 
cruise missiles. At the same time they are moving in, they also 
get less and less warning time because that protective bubble 
that we can put around the battle group begins to collapse as 
some of the picket ships reach shore.
    Now, given these challenges, which the administration I 
think has quite correctly identified, as well as others, while 
the administration has provided a compelling reason to 
transform the military to address these critical challenges, it 
has done less well in terms of establishing a process to effect 
that transformation.
    In fact, it is somewhat remarkable that, despite setting 
forth six new critical operational challenges, of which I have 
mentioned only two, the fiscal year 2003 defense program and 
budget envisions essentially the same force structure and 
modernization strategy as provided for in the Clinton 
administration's defense program. A key reason for this, it 
seems to me, is the lack of a plausible point of departure 
concept of how the military plans to meet these operational 
goals.
    I am not talking about a vision here like rapid, decisive 
operations or network-centric warfare. I am talking about the 
warfighter sitting down and saying: The commander in chief has 
given us a new challenge to deal with; what is our best initial 
guess about how we are going to deal with that challenge, how 
we are going to defeat it?
    For example, how do we plan to project power rapidly and 
decisively if we have no access to forward operating bases? How 
do we plan to quickly establish sea control of the littoral 
against an area denial force? The missing link it seems to me 
between identifying these threats and the defense program that 
you are asked to pass judgment on is how do we plan to use 
these tools, these new systems, these force structures, and so 
on, to achieve these ends, defeating an anti-access, area 
denial threat?
    The missing link is the how, how are we going to do this. 
This is essential not just for you, it is essential for the 
officer corps. It is essential for the military so they 
understand, at least as a point of departure, how they are 
expected to accomplish this mission.
    One of the problems institutionally, by the way, that you 
run into when you begin to face this issue of a new concept of 
operations is you begin to create winners and losers. Certain 
capabilities, systems, and elements of the force structure 
begin to look better and better. Certain systems, capabilities, 
and elements of the force structure begin to look less and less 
attractive.
    Not only do we need these kinds of point of departure 
concepts in operation, we need to refine them in war games and 
in simulations. But ultimately we need a way of determining 
whether these warfighting concepts can work in practice. That 
is where service exercises and joint field exercises come into 
plan. That is our high fidelity, good feedback laboratory for 
determining whether we are on track with respect to 
transformation.
    Despite the QDR's declaration that such experiments and 
such exercises are ``critical'' to validating the new war 
concepts, the fact of the matter is that a joint national 
training center, which was envisioned by the National Defense 
Panel on which I served, is not established. There is no 
provision made for a joint opposing force, despite the fact 
that our services swear up and down about the value of such a 
force, whether it is at Red Flag or at Top Gun or at the 
National Training Center (NTC). There is no significant 
increase in JFCOM's budget for exercises and experiments, and 
in fact the tempo of these experiments and exercises remains 
unchanged from that established under the previous 
administration.
    I would note parenthetically that the Israelis, who seem to 
be a little bit stretched at the present, given the 
circumstances in the Middle East, are greatly expanding upon 
their urban warfare training center. It is something that the 
National Defense Panel recommended. It is something that we 
ought to seriously consider.
    Again, once you begin to conduct these kinds of exercises, 
especially in a joint environment where the services are forced 
to compete with one another, once again you create the 
opportunity for winners and losers, and that is a often times 
difficult bureaucratic step to take.
    I would argue that we need to do this before locking into 
large-scale production runs of new weapons systems. In a sense, 
if we fail to do that we are putting the procurement cost 
before the strategy horse. We are filling up the CINC's tool 
box without really having an understanding of how we are going 
to do the job before us, dealing with these six critical 
operational challenges.
    To put it in a perspective that people in DC can 
understand, it is akin to drafting players for a football team 
without having scouted them and without knowing what kind of 
offense or defensive schemes are going to be employed by the 
coach.
    Having said this, there are several systems now in the 
defense program that seem such a poor fit and the alternatives 
so promising that the Department of Defense should, to quote 
President Bush, ``seize the opportunity to skip a generation in 
weapons systems.'' These systems include a version of the Joint 
Strike Fighter, an element of the restructured DDX program, and 
the Crusader artillery system, again following the lead of 
Deputy Secretary of Defense Wolfowitz and his outline in 
previous testimony of the kinds of capabilities we ought to be 
looking for.
    I would argue that areas where we ought to consider 
increased investment are accelerated development and fielding 
of a range of UCAVs, Unmanned Combat Aerial Vehicles, not just 
the current Air Force version, but an extended range version 
that gets you around the problem of access to forward bases. 
The systems that the Joint Strike Fighter, for example, is 
anticipated to replace dropped only about 5 percent of the 
ordnance in Afghanistan in this recent conflict. Over 70 
percent was dropped by long-range bombers and another 25 
percent by the maritime forces.
    So not only an extended range version for the Air Force, a 
maritime version, which this administration with the Navy has 
initiated; and to take the Army's tactical UAV program and make 
it a tactical UCAV program as well.
    In terms of network-centric operations, these are really 
the antidote to the anti-access area denial threat. That threat 
basically focuses on key nodes that cannot move, ports and air 
bases, or on large systems leading in early in the conflict.
    The littoral combat ship that the Navy is now exploring--
and I think the CNO has a terrific idea here--that is a great 
opportunity to experiment with network-centric warfare. Just as 
destroyers used to screen the battle fleet, these ships can 
screen the carrier battle groups and open up the littoral.
    Secretary Wolfowitz mentioned UUVs which can be used to 
help counter the mine threat. The Army's Objective Force, which 
is really a network-centric operation, which right now is 
underfunded at the expense of some other programs, I think is 
another example of where network-centric operations can be 
promoted.
    In addition to what I mentioned in terms of range and 
stealth, which Secretary Wolfowitz said was important, not only 
should the administration proceed with converting the four 
SSBNs that are coming out of service to SSGNs, but it should 
also strongly consider reopening the B-2 production line, the 
only immediate way we have of gaining long-range stealth in 
terms of air strikes.
    Support for Comanche, an extended range ATACMS. Army forces 
can disperse the most. They also have great potential these 
days to strike at extended ranges. Then perhaps one of the 
orphans of this defense program will be a new means for 
deployment and sustainment, which keep being emphasized by the 
services in their war game, but which really are not 
aggressively funded in this defense program, whether it is an 
advanced technology transport, the high-speed vessels that 
Admiral Cebrowski talked about--that is a good idea, and it 
should be accelerated.
    The Army recently put on the very back burner its future 
transport rotor craft, which is key to its essential ability to 
fight on a non-linear battlefield. General Jones recently 
mentioned the possibility of resurrecting the mobile offshore 
base, an idea of Admiral Owens, who is renowned for his 
commitment to innovation and transformation.
    In summary, I think we can say, to its credit, that this 
administration has performed a great service in providing us 
with a compelling set of reasons as to why we should transform 
our military. Unfortunately, in terms of the process and in 
terms of a program, I do not think we are quite there yet.
    If the administration's diagnosis of these emerging threats 
is correct and we fail to begin to transform our force, we risk 
investing hundreds of billions of dollars in preparing our 
military to fight yesterday's threats as opposed to tomorrow's. 
Should that risk be realized, additional payments could be 
exacted not only in terms of our national treasures, but also 
in interests jeopardized and lives lost.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Krepinevich follows:]
            Prepared Statement by Dr. Andrew F. Krepinevich
    Mr. Chairman and members of the committee, it is a great honor to 
appear before you today to discuss the issue of military 
transformation.
    Today we face a challenge that is arguably unprecedented in the 
Nation's history: transforming our Armed Forces into a very different 
kind of military, while at the same time sustaining its ability to play 
a very active role in supporting U.S. near-term efforts to defeat 
terrorism and preserve global stability.
                        what is transformation?
    Transformation can be thought of as innovation on a grand scale. 
Transformation is undertaken by a military that believes major changes 
are occurring in the character of conflict. Periods of military 
transformation are typically associated with a revolution in military 
affairs, or an RMA, in which a combination of technology, warfighting 
concepts and organizational change combine to bring about a dramatic 
leap in military effectiveness.
    Militaries are motivated to transform most often because they 
conclude either that very different operational challenges are arising 
that will greatly reduce the effectiveness of existing forces, or 
because they see an opportunity to develop new forms of operations 
themselves that will yield great advantage in future military 
competitions.
    As important as it is to understand what transformation is, it is 
just as important to understand what transformation is not.

         Transformation is not a ``monopoly'' of the United 
        States military. The rise of anti-access/area-denial threats 
        and nontraditional forms of attack on our homeland, as well as 
        the prospect of counter-space operations and electronic strike, 
        are examples of emerging challenges to our military that did 
        not exist until relatively recently. In short, in the face of 
        U.S. military superiority, our existing and prospective 
        adversaries are adapting to present us with different kinds of 
        threats.
         Transformation is not solely based on introducing new 
        technologies into the force. It also requires changes in the 
        way the force is employed through major changes in doctrine and 
        force structure.
         Transformation is not about enhancing our efficiency 
        in existing warfighting operational concepts; rather, it is 
        about developing new warfighting concepts.
         Transformation does not mean supplanting the entire 
        force with new systems and force structures. Today our 
        challenge is to identify what mix of existing and emerging 
        systems and capabilities is required to deal with the new 
        threat environment envisioned in our defense strategy, while 
        also exploiting our sources of greatest potential advantage.
                why transform the world's best military?
    The Bush administration, in its Quadrennial Defense Review (QDR), 
has articulated a persuasive case on the need to transform the U.S. 
military. The heart of its argument is that the challenges and 
opportunities that confront the U.S. military are quite different from 
those they encountered during the Cold War and Operation Desert Storm, 
or even during the 1990s, and that greater change is clearly on the 
horizon. Consequently, merely improving upon today's capabilities will 
not suffice to meet tomorrow's challenges. Moreover, the administration 
argues that U.S. military also has the opportunity to make dramatic 
qualitative improvements in its capabilities, regardless of the 
threat's character. Finally, since the character of the threat is 
changing, improvements in U.S. military capabilities must be linked to 
addressing these changes.
    The argument that the U.S. military needs to move beyond Cold War/
Operation Desert Storm era forms of conflict--and the two-major theater 
war posture they spawned--to address new challenges to America's 
security (and to exploit opportunities to improve its capabilities) is 
outlined in the QDRs ``critical operational goals,'' which can be 
summarized as:

         Protecting critical bases of operation, at home and 
        abroad, and defeating CBRNE (chemical, biological, 
        radiological, nuclear, and high-explosive) weapons and their 
        delivery systems;
         Prevailing in information warfare, both in offensive 
        and defensive operations;
         Projecting and sustaining U.S. forces in an anti-
        access/area-denial environment (A2/AD), and defeating A2/AD 
        threats;
         Denying enemies sanctuary from U.S. attack;
         Preserving the U.S. ability to operate effectively in 
        space; and
         Leveraging information technologies and innovative 
        operational concepts to develop an interoperable, joint C\4\ISR 
        architecture.

    What follows is a summary of what are, arguably, the two most 
formidable emerging challenges to confront our military--homeland 
defense and anti-access/area-denial.
                            homeland defense
    An enduring source of competitive advantage for the United States 
has been its geographic insularity. This has often enabled the United 
States to devote the vast majority of its defense resources to 
maintaining forces overseas in forward deployed positions, or to 
organizing CONUS-based forces for expeditionary operations. However, in 
recent years the global transportation network has made long-distance 
travel increasingly routine. This, combined with the rapidly growing 
access of small groups and even individuals to ever greater destructive 
power, has eroded the value of America's geographic remoteness and 
placed the U.S. homeland at much greater risk of significant attack, 
either from hostile nonstate actors, or from states employing 
nontraditional means of attack.
    To be sure, the United States was, for much of the Cold War, under 
the threat of a catastrophic attack from the nuclear forces of the 
Soviet Union. However, a combination of faith in the U.S. nuclear 
deterrent and realization that effective defense against large-scale 
nuclear attack was not feasible led to a relatively modest effort on 
active (e.g., ballistic missile defense) and passive (e.g., civil 
defense) defenses. America now finds itself at risk of attack from a 
range of enemies, both state and nonstate, as well as from an array of 
new threats, to include the covert introduction of weapons of mass 
destruction (WMD) and attacks on the national information 
infrastructure. Moreover, the events of September 11 indicate that at 
least some of these enemies cannot be deterred through traditional 
means. The result is that now America must divert substantial resources 
to the defense of the homeland. While in some respects this mission is 
as old as the American Revolution itself, it is certainly new in both 
its form and intensity. A national strategy for defending the homeland 
has yet to be devised. Thus it is difficult to ascertain the role the 
U.S. military will be asked to play, or to assess the Department of 
Defense budget and program priorities with respect to Homeland Defense.
                      anti-access and area denial
    Despite all the uncertainties the U.S. military must confront in 
preparing for the future, two things seem certain. First, given the 
United States current military dominance, the incentive is high for 
would-be adversaries to present the American military with very 
different challenges. Second, the diffusion of military technologies 
and the rapid progression of military-related technologies will 
increasingly offer such adversaries the means to achieve this goal.
    This possibility is particularly true with respect to the 
traditional form of U.S. power-projection operations. The United 
States' ability to maintain stability in key regions around the globe 
rests on its capacity to project power, rapidly and decisively, where 
it is needed. However, the U.S. military's traditional method of 
deploying and sustaining air and ground forces at or through major 
ports and airfields is almost certain to be put at risk as a 
consequence of major shifts in the geopolitical and military-technical 
environment.
    Unlike during the Cold War, it cannot be assumed that allies will 
provide base access whenever it is needed. Instead ad hoc coalitions, 
or ``coalitions of the willing,'' must be cobbled together depending on 
the situation. For example, during Operation Desert Fox in 1998, both 
Saudi Arabia and Turkey refused to allow U.S. air strikes on Iraq to 
originate from bases on their soil. Similarly, in 1999, Greece, 
America's long-term North Atlantic Treaty Organization (NATO) ally, 
refused to permit U.S. forces to operate from its bases during 
Operation Allied Force. Most recently, the United States has found 
unfettered forward base access difficult to come by in the war against 
al Qaeda terrorist forces and the Taliban regime in Afghanistan. States 
in the region have, for the most part, either denied the U.S. military 
access to bases, or placed severe restrictions on their use, especially 
in the case of strike operations.
    Nor can the U.S. military be confident that adequate basing 
facilities will be available in any event. During the Cold War, the 
United States developed modern base facilities to optimize the 
military's ability to execute the strategy of containment of the Soviet 
Union. Correspondingly, the U.S. military developed forces that became 
dependent on these well-developed facilities in Western Europe and 
Northeast Asia. But the Cold War is over, and the U.S. military has 
confronted the harsh reality that basing facilities in many other parts 
of the world--in places such as Somalia, Rwanda, Albania and 
Afghanistan--are austere in the extreme compared to their Cold War era 
counterparts. Indeed, the Army's current transformation efforts seem 
driven, to a significant degree, by its recent inability to deploy 
forces rapidly to the Albania-Kosovo border during the Balkan conflict. 
Making matters worse, potential flash points, such as the Asian 
Subcontinent, Spratly Islands and Taiwan Straits, lie in regions that 
seem geographically bereft of even modest local basing facilities to 
accommodate the U.S. military's short-range fighter aircraft and 
medium/heavy ground forces.
    Even more disconcerting is the growing proliferation of national 
and commercial satellite services and missile technology. Increased 
access to these satellite services will allow even regional rogue 
states both to pre-target key fixed facilities and to monitor U.S. 
deployments into forward bases. Unless one makes heroic assumptions 
regarding advances in missile defense effectiveness, these facilities 
can be held at risk through the employment of large numbers of 
ballistic and cruise missiles. Senior U.S. military leaders have 
already voiced strong concern over the ability to deal with such a 
contingency. General Ronald Fogleman, when Air Force chief of staff, 
observed that:

        Saturation ballistic missile attacks against littoral forces, 
        ports, airfields, storage facilities, and staging areas could 
        make it extremely costly to project U.S. forces into a disputed 
        theater, much less carry out operations to defeat a well-armed 
        aggressor. Simply the threat of such enemy missile attacks 
        might deter U.S. and coalition partners from responding to 
        aggression in the first instance.\1\
---------------------------------------------------------------------------
    \1\ Bill Gertz, ``The Air Force and Missile Defense,'' Air Force 
Magazine, February 1996, p. 72.

    Admiral Jay Johnson, when chief of naval operations, expressed very 
---------------------------------------------------------------------------
similar concerns when he declared:

        Over the past 10 years, it has become evident that 
        proliferating weapon and information technologies will enable 
        our foes to attack the ports and airfields needed for the 
        forward deployment of our land-based forces.

        I anticipate that the next century will see those foes striving 
        to target concentrations of troops and materiel ashore and 
        attack our forces at sea and in the air. This is more than a 
        sea-denial threat or a Navy problem. It is an area-denial 
        threat whose defeat or negation will become the single most 
        crucial element in projecting and sustaining U.S. military 
        power where it is needed.\2\
---------------------------------------------------------------------------
    \2\ Admiral Jay Johnson, ``Anytime, Anywhere: A Navy for the 21st 
Century,'' Proceedings, November 1997, p. 49.

    Perhaps most revealing, however, are the comments of a retired 
Indian brigadier general, who observed that future access to forward 
---------------------------------------------------------------------------
bases:

        is by far the trickiest part of the American operational 
        problem. This is the proverbial ``Achilles heel.'' India needs 
        to study the vulnerabilities and create covert bodies to 
        develop plans and execute operations to degrade these 
        facilities in the run up to and after commencement of 
        hostilities. Scope exists for low cost options to significantly 
        reduce the combat potential of forces operating from these 
        facilities.\3\
---------------------------------------------------------------------------
    \3\ Brigadier V. K. Nair, War in the Gulf: Lessons for the Third 
World (New Delhi, India: Lancer International, 1992), p. 230.

    As Admiral Johnson observed, U.S. maritime forces will also 
confront new challenges to their ability to project power. The Navy 
will increasingly find itself operating in the littoral, for two 
reasons. First, there are no navies that can challenge the U.S. fleet 
on the high seas. Second, with forward bases coming under increased 
risk of destruction from ballistic and cruise missile attack, the fleet 
will have to move closer to shore to support efforts to defeat anti-
access forces and project power against other enemy forces ashore.
    As this happens, the fleet will increasingly encounter so-called 
area-denial forces in the form of sophisticated anti-ship mines, 
coastal submarine flotillas, onshore high-speed anti-ship cruise 
missiles and other enemy capabilities that may place the U.S. carrier-
centric fleet at significantly greater risk. In short, as the fleet 
moves from Cold War era blue-water sea control to focus increasingly on 
green-water littoral sea control, it will come within range of more and 
more of the enemy's military capabilities. Making matters worse, the 
screening elements that protect the carrier, the Navy's core strike 
element, will begin to collapse back on the carrier as they encounter 
the coastline.\4\ Thus, not only will maritime forces come within range 
of more enemy systems, their warning time of attack will be reduced as 
well. The diffusion of weapon systems, such as high-speed antiship 
cruise missiles, will reduce warning time even further.\5\
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    \4\ The anti-air warfare (AAW) and anti-submarine warfare (ASW) 
ships that protect the carrier obviously cannot operate on land. As the 
carrier maneuvers closer to shore in order to strike targets inland, 
the protective ``bubble'' provided by these ships will begin to 
collapse as they encounter the shoreline. It is important to note that 
these escorts typically operate at great distances from the carrier 
when in a warfighting environment. For the sake of example, if a 
carrier were positioned in Washington, DC, anti-air escorts (such as 
Aegis cruisers and destroyers) would be positioned as far away as 
Harrisonburg, Pennsylvania; Trenton, New Jersey; and Norfolk, Virginia. 
This example is taken from Admiral James D. Watkins, The Maritime 
Strategy (Annapolis, MD: U.S. Naval Institute Press, January 1986), p. 
13.
    \5\ For a discussion of the area-denial threat, see VADM Arthur K. 
Cebrowski and Captain Wayne P. Hughes (U.S.N, Ret.), ``Rebalancing the 
Fleet,'' Proceedings, November 1999; and Captain Wayne P. Hughes 
(U.S.N, Ret.), Fleet Tactics and Coastal Combat (Annapolis, MD: Naval 
Institute Press, 2000), pp. 145-68.
---------------------------------------------------------------------------
    These concerns have not been lost on the Department of Defense 
leadership. As Secretary of Defense Rumsfeld noted, ``[P]otential 
adversaries . . . see that our ability to project force into the 
distant corners of the world where they live depends, in some cases, on 
vulnerable foreign bases.'' \6\ Deputy Secretary of Defense Paul 
Wolfowitz, in expanding on Secretary Rumsfeld's observation, stated 
that:
---------------------------------------------------------------------------
    \6\ Speech, Secretary of Defense Donald Rumsfeld, The National 
Defense University, Washington, DC, January 31, 2002.

        U.S. forces depend on vulnerable foreign bases to operate--
        creating incentives for adversaries to develop `access denial' 
        capabilities to keep us out of their neighborhoods. We must, 
        therefore, reduce our dependence on predictable and vulnerable 
        base structure, by exploiting a number of technologies that 
        include longer-range aircraft, unmanned aerial vehicles, and 
        stealthy platforms, as well as reducing the amount of 
        logistical support needed by our ground forces.\7\
---------------------------------------------------------------------------
    \7\ Testimony, Paul D. Wolfowitz, House Budget Committee, 
Washington, DC, February 12, 2002.

    Their concerns are reflected in the QDR's critical operational 
challenges, and also in the document's elaboration on the kinds of 
---------------------------------------------------------------------------
capabilities required to defeat the challenge:

        These joint forces . . . must be lighter, more lethal and 
        maneuverable, survivable, and more readily deployed and 
        employed in and integrated fashion. They must be not only 
        capable of conducting distributed and dispersed operations, but 
        also able to force entry in anti-access or area-denial 
        environments.\8\
---------------------------------------------------------------------------
    \8\ Department of Defense, Report of the Quadrennial Defense Review 
(Washington, DC: DOD, September 2001), p. 32.

        U.S. forces . . . must have the ability to arrive quickly at 
        non-traditional points of debarkation to mass fire against an 
        alerted enemy and to mask their own movements to deceive the 
        enemy and by pass its defenses.\9\
---------------------------------------------------------------------------
    \9\ Ibid., p. 43.

    Thus would-be adversaries have strong incentives to adopt this 
indirect approach to defeating, or deterring, U.S. power-projection 
operations. The effort, as noted above, seems well under way. According 
to a recent Defense Science Board (DSB) study, a regional power's 
development of this kind of anti-access capability by 2010 is quite 
plausible, even given relatively severe resource constraints.\10\ A 
former commander in chief of U.S. forces in Korea declared that the 
problem of forward base access is not a problem for the U.S. military 
of 2010, but one has existed in embryonic form in Korea for much of the 
1990s, and which will only worsen over time.
---------------------------------------------------------------------------
    \10\ DSB, Final Report of the Defense Science Board Task Force on 
Globalization and Security (Washington, DC: Office of the Under 
Secretary of Defense for Acquisition and Technology, December 1999), p. 
vi.
---------------------------------------------------------------------------
    Defeating the A2/AD threat promises to be a very challenging 
proposition. States developing A2/AD forces are doing so in such as way 
as to make them more difficult to target. To this end they are 
emphasizing, or are likely to emphasize:

         Mobility and dispersion (e.g., mobile launchers for 
        ballistic and cruise missiles);
         Stealth (e.g., diesel submarines; low-observable 
        cruise missiles; mines);
         Hardening of fixed targets (e.g., WMD production and 
        storage facilities; command centers; leadership facilities);
         Deception (e.g., coastal combatants masquerading as 
        commercial vessels; terrorists posing as noncombatants);
         ``Hostages'' (e.g., positioning military forces in 
        noncombatant neighborhoods);
         Geography (e.g., deploying forces far inland to stress 
        U.S. forces' range and targeting capabilities); and
         Sanctuaries (e.g., neutral party space assets; the 
        threat of WMD attacks to create a national sanctuary; 
        positioning military forces in very close proximity to cultural 
        landmarks, hospitals, and related structures to create a local 
        sanctuary effect).

    To the extent they must operate outside of the enemy's A2/AD 
envelope, U.S. forces will find their reconnaissance, surveillance, 
target acquisition (RSTA) timelines stretched, making destruction of 
enemy critical mobile A2/AD targets an even more difficult proposition. 
Indeed, a critical sub-competition of the A2/AD challenge involves 
enemy efforts to stretch U.S. RSTA and engagement timelines versus U.S. 
military attempts to compress its engagement cycle timelines. In 
response, it appears we will have to place substantially greater 
emphasis on long-range/long-dwell reconnaissance and strike 
capabilities.
    Of course, such timelines can be compressed, and the opportunities 
for defeating the A2/AD threat enhanced, by U.S. forces operating 
underneath the enemy's A2/AD umbrella. This will likely require forces 
that can insert themselves in a distributed manner, and which can both 
operate and sustain themselves in highly distributed, highly networked 
manner. It also favors forces that further minimize their risk of 
detection through various forms of stealth--to include signature 
reduction; and cover, concealment and deception--as well as mobility.
    In short, enemy asymmetric strategies--such as threatening 
nontraditional attacks on the American homeland and anti-access/area-
denial--are designed to offset the U.S. military's dominance in 
traditional forms of warfare. They also represent cost-imposing 
strategies in that the U.S. military in general will likely incur 
substantially greater costs to offset these asymmetric strategies than 
America's enemies will incur to generate them.
                   needed: a transformation strategy
    Transformation is not synonymous with a revolution in military 
affairs. Rather, transformation is a process that a defense 
establishment undertakes if it believes a military revolution is under 
way, or is potentially under way. The Department of Defense therefore 
needs a strategy for transformation. It is not a warfighting strategy 
(although it would include a vision of what the transformed conflict 
environment would be like). Rather, it is a strategy for large-scale 
innovation, to include such major elements as changes in the personnel 
management system, in the selection of senior leaders, in procurement 
strategy, and in training--especially field exercises conducted at the 
operational level of warfare.
A Vision of Future Warfare
    While the Department of Defense rationale for transformation is 
persuasive, its process for effecting transformation is more difficult 
to discern and, hence, to evaluate. A transformation process is needed 
to validate vision, to identify the best means for addressing critical 
challenges, and to determine if opportunities can be realized (and how 
soon, and to what degree). The process should enable feedback on 
transformation initiatives (e.g., new operational concepts, doctrine, 
systems, networks, force structures). This will enable senior Defense 
leaders to gauge whether the transformation path being pursued is, in 
fact, the correct path, or to make the appropriate adjustments if it is 
not. Such a process can help inform choices about investments in future 
capabilities--R&D, procurement, personnel and force structure--so as to 
reduce uncertainty in a resource-constrained environment.
    Regrettably, the current joint vision statement does not present 
such a compelling vision. The Joint Chiefs of Staff's (JCS) vision, set 
forth in Joint Vision 2010, and sustained in Joint Vision 2020, speaks 
in general terms of the need to achieve positional advantage over an 
adversary (``dominant maneuver''), engage the enemy effectively 
(``precision engagement''), support such activities efficiently and 
effectively (``focused logistics'') while protecting friendly forces 
(``full-dimensional protection'').\11\ While these are desirable 
qualities for the U.S. military to pursue, they offer little in the way 
of guidance as to how its missions (i.e., the character of key military 
competitions) might change over time (e.g., projecting power against an 
A2/AD; defending against asymmetric attacks on the U.S. homeland). 
Indeed, stripped of their adjectives, the characteristics of effective 
``maneuver,'' ``engagement,'' ``logistics'' and ``protection'' would be 
those desired by any military organization, in any era.
---------------------------------------------------------------------------
    \11\ JCS, Joint Vision 2020 (Washington, DC: DOD, 2001), pp. 4-5, 
13, 20-27. To be sure, Joint Vision 2020 notes the risks from changes 
in the conflict environment brought about by adversaries pursuing 
asymmetric strategies. The Joint Chiefs go on to say that such 
strategies are ``perhaps the most serious danger the United States 
faces,'' that asymmetric advantages may be pursued on any level of 
warfare--strategic, operational or tactical--and that ``adversaries may 
pursue a combination of asymmetries. . .'' The reader is further 
instructed that ``asymmetric threats are dynamic and subject to change, 
and the U.S. Armed Forces must maintain the capabilities necessary to 
deter, defend against, and defeat any adversary who chooses such an 
approach.'' Yet despite these general statements of concern there is 
little in the way of detailed discussion as to what form (e.g., anti-
access, area denial) asymmetric threats might take.
---------------------------------------------------------------------------
                      joint concepts of operation
    The next step along the transformation path is to identify ``point-
of-departure'' concepts of operation that set forth, in significant 
detail, how the services see themselves achieving critical operational 
goals, to include their role as part of a Joint team. As Secretary 
Rumsfeld rightly noted, ``Exploiting the revolution in military affairs 
requires not only technological innovation but also development of 
operational concepts. . .''
    Why are such concepts of operation so important? Point-of-departure 
concepts of operation describe the military's hypothesis regarding how 
it intends to meet critical operational goals or exploit potential 
opportunities.
    Although each critical operational goal requires a concept of 
operations, there are two in particular that merit attention, as the 
others are subsumed in them. The first is how we intend to defend our 
homeland from attack from ballistic and cruise missiles, the covert 
introduction of WMD, electronic attack on the information 
infrastructure, and terrorist attack.
    The second concerns how the U.S. military is going to project power 
against the (A2/AD) threat, and how power-projection operations will 
deny an enemy sanctuary. These critical goals are interrelated, and are 
also related to the other critical goals pertaining to information 
operations, space control, and creating C\4\ISR architectures.
    At present, there is no point-of-departure joint operational 
warfighting concept for meeting these goals, either collectively (i.e., 
a grand integrated operational concept) or individually (e.g., an 
operational concept for defeating the A2/AD challenge). To be sure, the 
individual services have developed operational concepts (e.g., Global 
Strike Task Force; Assured Access) that purport to address how they 
would meet a single critical challenge (principally A2/AD). However, 
they are rudimentary at best.
    Absent plausible concepts of operation oriented on the critical 
operational challenges, it is natural (indeed, perhaps inevitable) that 
the services will gravitate toward existing doctrine and view 
transformation essentially improving current methods of conducting 
operations.
    Thus until the U.S. military devises a plausible joint operational 
concept (or, more precisely, concepts) for dealing with the critical 
emerging challenges, it seems very likely that transformation will be 
retarded. Moreover, absent such warfighting concepts and a process for 
validating them, it will likely prove difficult, if not impossible, to 
obtain a reasonably accurate measure of how the transformation process 
is unfolding.\12\
---------------------------------------------------------------------------
    \12\ Note that concepts like ``rapid decisive operations'' (RDO) 
and ``effects-based operations'' (EBO) do not, by themselves, inform us 
in any significant detail as to how the six critical goals are to be 
addressed. They might be more accurately described as visions, rather 
than operational concepts.
---------------------------------------------------------------------------
    In short, to determine whether or not a new (or prospective) 
capability is ``transformational,'' (and whether a ``legacy'' 
capability should be preserved, and at what level), you have to have 
some sense of how you are going to address the critical operational 
goals laid down in the QDR. Since such concepts have either not been 
formulated, or are severely flawed, it is difficult to assess the 
relative merit of DOD budget or investment priorities.
Leader Tenure
    By its nature, dramatic change in large military organizations 
almost inevitably involves a long-term process that spans a decade or 
more. However, the U.S. military's institutional practices typically 
find senior leaders rotated out of their assignments every 3 or 4 
years. This rotation cycle may work well for leaders whose 
responsibilities are near-term oriented (for example, the regional CINC 
who is responsible for the immediate warfighting mission in his area of 
operation). However, it is much less desirable in situations where a 
senior leader is tasked with the mission of effecting transformation.
    Recent history shows that military organizations that have 
successfully transformed have almost always had a few key senior 
leaders--who both understood the new vision of the future conflict 
environment, and how to bring about change in large, complex military 
organizations--serve an extended tour of duty. This tour often runs 
double or even triple the length of a typical flag (i.e., general or 
admiral) officer tour in today's U.S. military. During the German 
army's transformation to blitzkrieg, for example, the head of its 
shadow general staff, General Hans von Seeckt, served 7 years in that 
position. The American Navy's exploitation of naval aviation was 
shepherded by Vice Admiral William Moffett, who remained head of the 
Navy's Bureau of Aeronautics for 12 consecutive years. The absence of 
extended tours of service for transformation-minded senior U.S. 
military leaders serving in key positions should give pause to those 
who are concerned about the U.S. military's prospects for 
transformation.
A New Modernization Strategy
    Military revolutions complicate modernization strategies in that 
they typically find the effectiveness of certain military systems in 
rapid decline. The displacement of the battleship by the aircraft 
carrier is but one example. However, it is far from clear in advance 
which military systems, operational concepts, or new force structures 
will work, and which will not. Put another way, not only does a 
transformation strategy need to be initiated well in advance of the 
actual fielding of the transformed force, it also must take into 
account military-technical uncertainty. How might our modernization 
strategy account for this?
    For a start, the services will have to tap into rapidly advancing 
technologies to develop new military systems that can be applied within 
the framework of new operational concepts executed by new kinds of 
military organizations. It is this combination of technology, emerging 
military systems, new operational concepts and force restructuring that 
often produces the discontinuous leap in military effectiveness 
characteristic of military revolutions.
    Given the above discussion, one would expect to see the DOD accord 
greater emphasis on R&D efforts in support of ``wildcatting''--
experimenting with a limited (but operationally significant) number of 
a wide variety of military systems, as well as operational concepts, 
and force structures. The goal here is to identify those that are 
capable of solving emerging strategic and operational problems, or 
exploiting opportunities, while eliminating those that are not.
    This reveals a second element of a successful modernization 
strategy for transformation: to avoid being ``locked in.'' Lock-in 
occurs when limited resources are spent to purchase a system in large 
numbers. The result both narrows the range of options (as fewer types 
of systems are procured) for dealing with emerging challenges, and 
risks locking the force into the current state of technological 
advancement. Resources that could have supported exploring a wider 
range of systems and sustaining continued advances in technology are, 
instead, locked into the existing force.
    As noted above, the end result may be a happy one--if the U.S. 
military ``guesses right'' (i.e., if the fielded force serendipitously 
turns out to be the ``right'' force to meet the post-transformation 
challenges), and if the rate of technological advance slows. If not, 
the Department of Defense risks having committed itself to a single-
point solution in a very uncertain world. It will have either bought 
the wrong systems, or the ``right'' systems prematurely--before the 
rapidly advancing technologies that enable them have matured.
    The U.S. Navy understood this well in the 1920s and 1930s, during 
the transformation from a battle fleet centered around battleships to 
one focused on fast carrier task forces. Early on it was unclear 
whether naval aviation would be optimized by spreading it throughout 
the fleet (e.g., having a few aircraft on every surface combatant), or 
concentrated on aircraft carriers. Moreover, it was also unclear what 
kind of carrier would be optimal. Consequently, the Navy created 
options for itself by wildcatting. It invested in four different 
classes of carriers, but only produced six carriers in all. It also 
experimented with aircraft on carriers and on surface ships, and even 
tried working with air ships.
    Not only has wildcatting been an effective element of a 
modernization transformation strategy within the services, but 
increasingly among them as well. Thus the Army, Navy and Air Force each 
had ballistic missile programs in the 1950s. The Air Force program led, 
ultimately, to the Minuteman ICBM, a key element of the U.S. nuclear 
strike mission force. The Army program was instrumental in the birth of 
the space program (its Jupiter rocket was used in the Redstone 
program), and the Navy program led to the Polaris submarine and the 
nuclear ballistic missile submarine force, a cornerstone of U.S. 
nuclear deterrence.
    The end result of each of these wildcatting efforts was the 
creation of strategic ``options'' on a range of military capabilities. 
These options could be used both to dissuade prospective adversaries 
from resuming a high level of military competition and, in the event 
dissuasion or deterrence failed, exercising those options to prevail in 
the conflict itself. It is important to note that creating such options 
need not involve a defense budget ``train wreck.'' Recall that the U.S. 
military developed the foundation for strategic aerial bombardment, the 
carrier navy, modern amphibious warfare, and mechanized air-land 
operations during the relatively lean budget years of the 1920s and 
1930s. What it does imply, however, is visionary leaders, and a 
different set of strategic--and budget--priorities.
    Unfortunately, the Department of Defense modernization strategy 
today remains much the same as it was during the Cold War era, with its 
emphasis on large-scale, serial production of relatively few types of 
military systems and capabilities. To the extent possible, we should 
avoid premature large-scale production of new systems, be they legacy 
or transformational, until they have clearly proven themselves helpful 
in meeting critical operational goals. With respect to systems that are 
characterized as transformational, it is important to avoid the 
pitfalls of ``false starts'' and ``dead ends.''
    False Starts. In periods of transformation, military organizations 
run the risk avoid buying large quantities of a promising system too 
early, and the U.S. military is no exception. The risk of committing to 
a ``false start'' is demonstrated in the U.S. Navy's affection for its 
first carrier designed from the keel up, the Ranger, which was 
commissioned in 1934. Although some Navy leaders had pressed for 
construction of 5 Ranger-class carriers, wargame analysis and fleet 
problems soon indicated that, at roughly 14,000 tons, the Ranger was 
far too small to meet many of the demands of future fleet operations. 
As it turned out, the Essex-class carriers that formed the backbone of 
the Navy's fast carrier task forces in World War II each displaced 
nearly twice as much tonnage as the Ranger.
    Dead Ends. Military systems or capabilities that appear promising, 
or even revolutionary, sometimes fail to live up to expectations. In 
this case, the challenge of those leading the transformation effort is 
not to avoid buying them too early; rather, it is to avoid buying them 
at all. The experience of the U.S. Navy during the development of naval 
aviation in the interwar period again provides an example of how 
rigorous experimentation and field exercises can help avoid dead ends. 
In 1930 the Navy's Bureau of Aeronautics proposed the construction of 
eight 10,000-ton flying-deck (or flight-deck) cruisers. The ships--half 
cruiser and half flight deck--were subjected to war game analysis at 
the Naval War College and some experiments employing surrogates in the 
fleet. Both painted a distinctly unfavorable picture of the hybrid 
ship, and it quickly sank beneath the Navy's programmatic waves.
The Key Role of Field Exercises and Experimentation
    Field exercises are especially beneficial during periods of high 
uncertainty and rapid change, such as confronts us today. Military 
field exercises that incorporate experimentation can play an important 
role in reducing the uncertainty about the future conflict environment 
and those capabilities, force elements and operational concepts that 
will dominate that environment. In so doing, field exercises better 
inform modernization strategies for transformation, such as the one 
described above, thereby enhancing their ability to employ limited 
resources more effectively. The QDR (quite correctly) declares, ``Field 
exercises that incorporate experimentation--at both the joint and the 
service levels--provide an indispensable means for solving emerging 
challenges.'' Moreover, it states, ``Exercises and experiments are a 
critical phase in developing new types of forces and operational 
concepts that can respond to emerging operational challenges and 
dominate opponents who effectively exploit aspects of the changing 
security environment.''
    The ultimate expression of such efforts will likely be the conduct 
of service and joint exercises at the operational level of warfare. 
This is because joint operations (i.e., operations involving two or 
more of the military services) will almost certainly dominate future 
military operations, and because the operational level of war is the 
level at which military campaigns are conducted.\13\ Such exercises 
offer the best opportunity to obtain high-fidelity feedback on the 
likely value of new force designs, capabilities and operational 
concepts.
---------------------------------------------------------------------------
    \13\ The Joint Chiefs of Staff have gone so far as to declare ``The 
joint force, because of its flexibility and responsiveness, will remain 
the key to operational success in the future. . . To build the most 
effective force for 2020, we must be fully joint: Intellectually, 
operationally, organizationally, doctrinally, and technically.'' JCS, 
Joint Vision 2020 (Washington, DC: DOD, 2001), p. 2.
---------------------------------------------------------------------------
    During the latter stages of the Cold War, the services invested in 
a number of high-fidelity training facilities that greatly enhanced the 
value of their field training. For example, the Army's National 
Training Center (NTC) at Fort Irwin, California, prepared brigade-size 
units for combined arms mechanized warfare against a Soviet-style 
adversary. Similarly, the Air Force and Navy put their pilots through 
Red Flag and Top Gun air combat training, respectively.
    In terms of a process for enabling transformation, the Department 
has provided a great deal of verbal support for joint and service field 
exercises and experimentation. As Secretary of Defense Rumsfeld stated, 
``All the high-tech weapons in the world won't transform our Armed 
Forces, unless we also transform the way we think, train, exercise and 
fight.''
    The QDR also notes ``the services invested in a number of high-
fidelity training facilities that greatly enhance the value of their 
field training. Yet comparable facilities do not exist to support joint 
high-fidelity field exercises and experiments.'' Moreover, ``joint and 
service field exercises oriented on military transformation have 
suffered from chronic resource shortages.''
    However, despite these numerous statements attesting to the value 
and importance of field exercises and experimentation to the 
transformation process, and pledges to pursue (indeed, expand upon) 
these activities aggressively, the fiscal year 2003 defense program and 
budget submitted to Congress provide for no significant change from the 
Clinton administration's policies, programs and funding levels. 
Specifically:

         A Joint National Training Center is not established; 
        nor is a joint opposing force;
         Joint Forces Command has not had its exercise budget 
        increased significantly over the FYDP; and
         The pace of joint exercises/experiments remains as 
        established by the previous administration.
Required Military Capabilities
    To meet this critical operational goals, we will need to transform 
our military into a fighting force that, relative to today's force--and 
to the force that is currently envisioned in the QDR modernization 
program--places substantially greater emphasis on the following 
characteristics:

         Mobility
         Stealth (in all its forms, to include undersea forces)
         Electronic protection
         Highly dispersed, electronically networked combat 
        forces and supporting elements (e.g., logistics)
         Highly distributed insertion through nontraditional 
        air and sea points of debarkation
         Extended-range systems and strikes
         Precision, electronic, and nonlethal forms of strike
         Unmanned/automated systems
         Compressed operational cycle rates
Transformation and DOD's Investment Portfolio: Skipping a Generation
    During his candidacy for president, President Bush attracted a 
great deal of attention when he declared that the United States should:

        modernize some existing weapon systems and equipment necessary 
        for current tasks. But our relative peace allows us to do this 
        selectively. The real goal is to move beyond marginal 
        improvements--to replace existing programs with new 
        technologies and strategies: to skip a generation of technology 
        . . . I intend to force new thinking and hard choices.\14\
---------------------------------------------------------------------------
    \14\ George W. Bush, Speech on Defense Policy, The Citadel, 
Charleston, SC, September 23, 1999.

    The president's call to skip a generation of weapon systems in 
order to both better prepare for newly emerging challenges to the 
national security, and to exploit the potential of rapidly advancing 
military-related technologies is consistent with a modernization 
strategy during a period of military transformation.
    Given this framework, what systems stand out as prime candidates 
for ``skipping a generation? '' What ``leap-ahead'' systems or 
capabilities are sufficiently attractive as to warrant such a move? 
Finally, how might the administration hedge against the possibility 
that in pursuing a leap-ahead capability, it may discover that the 
alternative system or capability, however promising it may appear 
today, cannot be realized in anticipated the time frame, or perhaps not 
at all ? The following discussion presents three candidates for 
``skipping'' a generation, and responds to the questions raised above.
The Joint Strike Fighter (JSF) (conventional take-off and land (CTOL), 
        or Air Force, version) \15\
---------------------------------------------------------------------------
    \15\ With the awarding of the JSF contract, the aircraft has been 
designated the F-35.
---------------------------------------------------------------------------
    The administration has decided to move ahead with the JSF program 
established under the Clinton administration. The current plan is to 
procure a total of 2,852 of these tactical fighters for the Air Force, 
Navy and Marine Corps, of which 1,763 would be Air Force CTOL fighters. 
To be sure, the JSF represents a significant improvement over each 
service's existing tactical aircraft. However, the buy of the JSF CTOL 
version assumes the U.S. military will continue to enjoy unimpeded 
access to forward air bases for the indefinite future. Yet, as both 
senior defense civil and military leaders have stated, such access is 
already problematic, and will likely worsen over time. Indeed, 
developing new capabilities to defeat the anti-access/area-denial 
threat is considered a critical operational goal.
    Leap-Ahead System: Extended-range Unmanned Combat Aerial Vehicles, 
or UCAVs. The role of unmanned systems has increased in recent U.S. 
contingency operations in the Balkans and Afghanistan. Unmanned systems 
are also engaged in supporting U.S. air patrols in Iraq (i.e., 
Operations Northern and Southern Watch). In Afghanistan the CIA 
employed armed Predator Unmanned Aerial Vehicles (UAVs) with Hellfire 
missiles. In effect, this made the Predator, which had been designed to 
perform a reconnaissance mission, a UCAV.\16\ The Air Force has in 
development a UCAV whose principal mission will be the suppression of 
enemy air defenses (``SEAD''). The Navy has initiated a UCAV program of 
its own.
---------------------------------------------------------------------------
    \16\ Building on the CIA's success, in the just-submitted fiscal 
year 2003 budget, the Air Force proposes to procure 22 Predators 
configured to carry Hellfire missiles.
---------------------------------------------------------------------------
    The opportunity exists to move much more aggressively in developing 
a range of UCAVs. Since UCAVs are remotely piloted, they can utilize 
the weight and space that would normally support the pilot for other 
purposes, such as to increase range or payload. They might also be 
designed to permit their launch and recovery from relatively austere 
landing strips. A combination of extended-range (and perhaps stealthy) 
Air Force UCAVs, sea-based Navy UCAVs, and distributed, land-based 
``tactical'' UCAVs (for the Army and Marine Corps) would provide future 
commanders with a range of options for addressing the A2/AD challenge. 
Because they do not require pilots--or flight hours for pilot training 
and extensive ground maintenance--UCAVs also promise to reduce 
substantially manpower requirements, and operations and maintenance 
costs. Finally, UCAVs are also projected to cost between one-third and 
one-half the price of comparable manned combat aircraft.
    Major Unknown Planning Factors: How many manned aircraft missions 
can be accomplished effectively by UCAVs, and how soon? While UCAVs 
have great promise, it is far from clear how many missions they can 
assume from the manned combat air arm, or how quickly they can be made 
to do so. It seems clear that UCAVs can almost certainly function as 
``reusable Tomahawks''; i.e., they can fly to a fixed target, drop a 
precision-guided munition (PGM), and return to base. As the Air Force 
program indicates, UCAVs also show promise in performing the 
suppression of enemy air defenses (SEAD) mission. Another promising 
mission for UCAVs is the one they performed in Afghanistan: exploiting 
their relatively long loiter time to play an important role in the 
destruction of critical mobile targets (e.g., mobile missile launchers, 
terrorists).
    Hedge: The JSF is viewed primarily as an efficient deliverer of 
precision munitions. But the U.S. military has many options for 
delivering ordnance on targets over significant distances. The 
Department of Defense can avoid locking in to a large JSF buy while 
also hedging against a slower-than-anticipated development of UCAVs 
with the following capabilities:

         Reopening the B-2 production line to enable the Air 
        Force to redress the imbalance between its short- and long-
        range manned strike platforms;
         Increasing substantially the number of PGMs carried in 
        the long-range bomber fleet through accelerating programs 
        focused on small, smart munitions;
         Accelerating Army deep-strike capabilities (e.g., 
        Comanche, ATACMS Block IIA, in addition to a tactical UCAV) to 
        provide more survivable forward operating forces; and
         Continuing ``bridge'' production of F-16 Block 60s 
        (Air Force) to address near-term tactical air fleet aging 
        issues (e.g., increased maintenance requirements).

    Current Status: The new defense program essentially ratifies the 
Clinton administration's position to proceed with developing the JSF 
and purchasing 1,763 of the CTOL version for the Air Force.
The DD-21 Land-Attack Destroyer
    The DD-21 Land-Attack Destroyer, with its large number of vertical 
launch systems (VLS), represented the navy's effort to enhance its 
capabilities to support the battle ashore. With the Soviet navy gone 
(and the ``blue-water'' threat with it), the Navy has rightly shifted 
its emphasis from open-ocean blue waters to littoral ``green'' waters. 
As it does, the Navy will encounter a very different threat 
environment. As noted above, the Department of Defense considers this 
area-denial threat, in combination with the anti-access threat, a 
critical operational challenge.
    In this environment, the DD-21s, whose size seemed likely to 
approach that of the first modern battleship (HMS Dreadnought), might 
have been so few in number (32 were planned) and so costly to replace 
that we would have been increasingly reluctant to deploy them into the 
littoral until friendly sea control had been established.\17\ This made 
the DD-21 a poor fit for a defense strategy that calls on the military 
to ``deter forward'' and, in the event deterrence fails, be ``capable 
of swiftly defeating attacks . . . from a forward deterrent posture.'' 
\18\
---------------------------------------------------------------------------
    \17\ HMS Dreadnought displaced 17,900 tons. The DD-21 was projected 
to displace roughly 12-14,000 tons.
    \18\ QDR, pp. 20-21.
---------------------------------------------------------------------------
    Skip a Generation Objective: The streetfighter concept employing 
network centric warfare. The concept asserts that advanced information 
technologies are an asymmetric U.S. advantage that can enable highly 
integrated, yet highly distributed, maritime operations. An effort 
should be made to explore the potential of squadrons of much smaller, 
faster, stealthier and less expensive surface combatants. These 
combatants could be more effective in supporting the campaign to seize 
control of the littoral and strike targets ashore. Owing to their 
substantially greater numbers and lower cost relative to the DD-21, 
such combatants could be employed both earlier and more aggressively in 
the littoral at far lower risk.\19\
---------------------------------------------------------------------------
    \19\ For an overview of the network centric warfare and 
streetfighter concepts, see Wayne Hughes, Fleet Tactics and Coastal 
Combat (Annapolis, MD: Naval Institute Press, 2000), pp. 145-67; and 
Vice Admiral Arthur K. Cebrowski and Captain Wayne P. Hughes, Jr., 
U.S.N (Ret.). ``Rebalancing the Fleet,'' U.S. Naval Institute 
Proceedings (November 1999). For a thoughtful opposing view of the 
littoral area-denial challenge, see Arthur H. Barber III and Delwyn L. 
Gilmore, ``Maritime Access: Do Defenders Hold All The Cards?,'' Defense 
Horizons, October 2001.
---------------------------------------------------------------------------
    Major Unknown Planning Factors: Is it possible for information 
technologies to create a ``distributed'' capital ship, and, if so, how 
soon? The idea of violating the principal of mass to gain the advantage 
of reduced vulnerability, while at the same time avoiding the penalty 
of reduced military effectiveness brought on by dispersion, is 
undeniably attractive. However, although the concept has been 
percolating for a number of years, and has shown promise in some 
wargames, the Department of Defense has yet to produce small combatant 
prototypes that could be used to determine the potential of such a 
force. Introducing a squadron of such ships into the Navy's Fleet 
Battle Experiment (FBE) program could substantially increase DOD's 
understanding of the Streetfighter Concept and its viability for future 
maritime operations.
    Hedge: As with the JSF, the DD-21 was viewed principally a strike 
platform. As noted, the U.S. military has many different ways to 
conduct strike operations. Two readily available near-term maritime 
force hedges are:

         Converting the four SSBNs coming out of the nuclear 
        deterrent force to SSGNs; and
         Increasing the quantity of PGMs to support existing 
        surface combatant VLS tubes.

    The Bush administration's defense program exploits both options. 
Other strike hedges that should be pursued include those mentioned with 
respect to the JSF (i.e., Army deep-strike assets; increasing the PGMs 
aboard the bomber force; reopening the B-2 line, etc.).
    Current Status: In November 2001 the Navy restructured the DD-21 
program. In lieu of proceeding with the single DD-21 class of 
destroyers, the Navy has decided to develop a ``family of advanced 
technology surface combatants,'' comprising a land-attack destroyer 
(DD-X), a guided-missile cruiser (CG-X), and a Littoral Combat Ship 
(LCS). It is far from clear, however, that this restructuring 
represents an effort to skip a generation in weapons development. 
Indeed, under the Surface Combatant-21 (SC-21) program, undertaken in 
1995, the Navy planned to build both a land-attack destroyer and a 
cruiser variant. One potentially significant difference is the plan to 
build a Littoral Combat Ship (LCS), whose description generally 
conforms to the streetfighter concept. At present, however, it remains 
unclear how vigorously the Navy intends to pursue the LCS program, or 
the role it envisions such combatants playing in addressing the anti-
access/area-denial challenge.
The Crusader Artillery System
    The Crusader artillery system represents a major advance in 
capabilities over the Army's current Paladin artillery system. As with 
the Joint Strike Fighter and Land-Attack Destroyer, however, the issue 
is not whether Crusader represents a major improvement over similar 
systems currently in the U.S. military's inventory. Rather, it is 
whether opportunities exist to field a significantly different kind of 
capability that is more relevant for the new critical operational 
challenges the Bush administration sees confronting the U.S. military.
    Today's Army finds itself challenged to become more of a rapidly 
deployable expeditionary force. Over the last decade the Army has had 
to deploy forces rapidly to areas where the service had little in the 
way of forward-deployed forces, such as in Africa, the Balkans and the 
Persian Gulf. This has posed problems for the Army, as its heavy units 
require enormous amounts of airlift to deploy quickly, in addition to 
well-developed bases at their point of debarkation. Unfortunately, 
strategic airlift is very costly and thus, hard to come by. It also is 
in great demand by the Air Force. Moreover, less-developed regions of 
the world typically have modest transportation infrastructures, to 
include air base facilities.
    This has led the Army to undertake an ambitious effort to transform 
its force structure to enable it to deploy substantial combat power 
quickly to a threatened region by air. A major effort is underway to 
reduce the weight of Army formations (thus reducing the demand on 
strategic lift) while retaining as much of their combat punch as 
possible. Hence the Army's Future Combat System (FCS) initiative, 
which, in part, hopes to displace systems like the 70-ton Abrams tank 
with a 20-ton FCS.\20\
---------------------------------------------------------------------------
    \20\ The Abrams weighs roughly 70 tons with its depleted uranium 
armor, and approximately 63 tons without it.
---------------------------------------------------------------------------
    Beyond losing weight while retaining muscle, the Army must develop 
the capability to project substantial land power rapidly, and sustain 
it indefinitely, in the absence of access to forward bases and large, 
fixed logistics centers, as called for in the QDR. This implies an 
ability to effect a distributed insertion of Army forces into a 
threatened area, as well as an ability to conduct highly distributed, 
or dispersed operations, employing C\4\ISR systems to scout the 
physical gaps between Army formations and extended-range fires to cover 
them.
    Furthermore, the Army also needs to exploit its advantages in 
accessing joint C\4\ISR capabilities to conduct precision strikes at 
extended ranges. In so doing it can minimize the vulnerability of 
lighter forces by exploiting opportunities to outrange enemy ground 
force strike systems (e.g., artillery, attack helicopters).
    While few will contest that Crusader is a superior system to the 
Paladin it is designed to replace, it is also true that:

         Plans call for the Crusader to reach the field around 
        the same time the Army plans to field its new Future Combat 
        Systems--a variant of which is intended to replace the 
        Crusader. This begs the question of why the Army would not 
        pursue the FCS system more vigorously, especially given the 
        likely spin-off benefits for other FCS configurations.
         The two Crusader vehicles are set to weigh about 80 
        tons, while the Paladin weighs 32 tons, and the FCS is planned 
        to weigh no more than 20 tons. Given the great lengths to which 
        the Army is going to enhance its forces' ability to deploy 
        rapidly, it seems odd indeed that it would pursue an artillery 
        system that weighed 150 percent more than the system it is 
        replacing, while at the same time designing a replacement for 
        the Abrams tank whose specifications call for a 70 percent 
        reduction in weight.
         The greatest gain in Army artillery effectiveness will 
        likely come from the Excalibur precision artillery round, now 
        in development. But this munition can be fired from a Paladin 
        system, as well.
         While it is true that the Crusader outranges the 
        Paladin, the fact remains that other Army strike systems--to 
        include the Army's multiple-launch rocket system (MLRS), 
        HIMARS, Apache and Comanche helicopters, and prospectively Army 
        UCAVs--outrange the Crusader. If greater emphasis on longer-
        range fires is needed, the Army has ready-made options for 
        pursuing them other than Crusader.
         Even at its reduced weight (the system was originally 
        designed at 110 tons), the Crusader will not fit on a C-130, 
        violating a key Army design metric for both the Interim and 
        Objective Forces.
         At a price tag of $11 billion (with $2 billion already 
        having been invested), Crusader represents an enormous 
        opportunity cost for an Army that cannot fully fund key 
        elements of its Objective Force, to include support for 
        developing strategic and intra-theater lift options, C\4\ISR 
        capabilities, training facilities, and the Future Combat 
        System.

    Skip a Generation Objective: Army Deep-Strike Brigades (DSBs). The 
Army's challenge is less how to expand its traditional forms of fire 
support and more on how to deploy such firepower rapidly in an anti-
access environment, and on how to exploit its unique potential among 
all the world's armies to see and strike at extended ranges. This is 
the direction the Army is headed in with respect to its vision for the 
Objective Force. Consistent with that vision, an Army Deep-Strike 
Brigade would emphasize long-range reconnaissance and strike assets. 
Such capabilities could include tactical UAVs and scout helicopters 
that can self-deploy and operate off of austere basing facilities; 
remote unattended ground sensors; long-range reconnaissance patrols; 
and support from sister service C\4\ISR systems such as satellites and 
UAVs. As its name indicates, the DSB would also have the means to 
strike at long ranges with such systems as tactical UCAVs, attack 
helicopters and rocket artillery (e.g. HIMARS lightweight missile 
launcher employing ATACMS munitions).\21\ Over the longer term, Future 
Combat System vehicles could both screen the DSB from the close fight 
and provide air defense. Among the programs that could be accelerated 
with the cancellation of Crusader would be Army UAV and UCAV programs, 
the Comanche helicopter, and development of extended-range versions of 
ATACMS.
---------------------------------------------------------------------------
    \21\ ATACMS stands for Army Tactical Missile System, while HIMARS 
stands for High Mobility Artillery Rocket System.
---------------------------------------------------------------------------
    Major Unknown Planning Factors: As noted above, it is not clear how 
quickly UAVs and UCAVs will mature. Nor is it clear to what extent they 
will be able to displace manned systems in performing the broad range 
of reconnaissance and strike missions. The Army's potential to see deep 
and to fight effectively at great range on a nonlinear battlefield has 
yet to be demonstrated in field exercises against an opposing force 
possessing the kinds of capabilities that might be encountered over the 
next decade in conflict against prospective adversaries.
    Hedge: The Army can hedge against these uncertainties by upgrading 
or replacing its Paladin self-propelled howitzers with systems produced 
by our allies, such as the German PzH 2000. More importantly, perhaps, 
the Army can accelerate the procurement of the Excalibur smart 
artillery round.\22\ As the experience of the last decade has shown, in 
terms of generating combat capability and military effectiveness, 
platforms are generally declining in importance relative to precision-
guided munitions and to their ability to tap into the information 
provided by C\4\ISR networks.
---------------------------------------------------------------------------
    \22\ The Excalibur, or XM982, is a family of precision-guided 155mm 
artillery munitions. Like other precision-guided munitions, the 
Excalibur is far more accurate than traditional (or ``dumb'') artillery 
munitions. Just as PGMs have greatly enhanced the strike capability of 
aircraft, so too do artillery PGMs offer the promise of greatly 
enhancing the effectiveness of existing artillery systems. See the U.S. 
Army 2001 Weapon Systems Handbook at http://www.defensedaily.com.
---------------------------------------------------------------------------
    Current Status: The administration's defense program retains the 
Crusader buy as outlined by the Clinton administration.
Skipping ``Skipping A Generation''?
    To sum up, the Department of Defense should heed President's 
guidance and seize the opportunity to skip a generation in military 
capability. Such an approach offers the following advantages:

         Options can be created for dealing with an uncertain 
        future--and the risk of putting too many eggs in the short-
        range tactical aviation, large surface combatant, or heavy 
        field artillery baskets--can be avoided;
         If successful, skip-a-generation capabilities outlined 
        above promise to be far more effective in meeting the QDR's 
        critical operational challenge of maintaining the U.S. ability 
        to project decisive military power to areas of vital interest 
        in the face of the growing A2/AD threat;
         Would-be adversaries' knowledge that the United States 
        is already moving to develop access to advanced military 
        capabilities may serve as a powerful deterrent to their 
        willingness to enter into a military competition with America--
        in short, skipping a generation can be a key element in the 
        administration's dissuasion strategy; and, finally
         Relatively low-cost hedges can be put in place that 
        guard against the uncertainty that the ``leap-ahead'' 
        capabilities may not materialize as soon as forecast, or be as 
        effective as anticipated.
                          the price of failure
    The United States military must transform itself, and it must begin 
now. As Secretary Rumsfeld has said, ``Transformation is not a goal for 
tomorrow, but an endeavor that must be embraced in earnest today. The 
challenges the Nation faces to not loom in the distant future, but are 
here now.''
    To its credit, the Bush administration has both clearly defined 
what transformation is, and provided a persuasive case as to why the 
world's best military needs to transform. Unfortunately, it has not yet 
developed either a transformation strategy or a process to ensure that 
transformation will come about. This is most clearly demonstrated in 
the absence of plausible service and joint warfighting concepts for 
addressing the new emerging critical operational goals, and finds its 
ultimate expression in the administration's program and budget 
priorities, which for the most part sustain the course set by the 
Clinton administration.
    If we remain on this course--if the Department of Defense fails to 
seize the opportunity to transform our military--we run a very real 
risk of investing a substantial sum of our national treasure in 
preparing our military to meet the challenges of today, and yesterday, 
rather than those of tomorrow. Should that occur, payment could be 
exacted not only in lost treasure, but also in interests jeopardized 
and in lives lost.
    Thank you, Mr. Chairman, for the opportunity to present my thoughts 
on this important issue before your committee.

    Chairman Levin. Thank you so much for your very succinct 
and direct testimony.
    Dr. Thompson.

 STATEMENT OF DR. LOREN B. THOMPSON, CHIEF OPERATING OFFICER, 
                    THE LEXINGTON INSTITUTE

    Dr. Thompson. Thank you. Mr. Chairman and members of the 
committee, thank you very much for inviting me to offer my 
assessment of military transformation.
    ``Transformation'' is a tricky term. The current popularity 
of the word within the Pentagon suggests that it means 
different things to different people. For some it is a way of 
rescuing threatened ideas and institutions. For others it is a 
way of sweeping those ideas and institutions away. For many, it 
is a ritual incantation, the latest buzzword used to bless 
business as usual.
    However, there is one point at which all of the various 
meanings seem to converge, and that is the potential impact of 
new technology on the way in which we wage war. The term first 
emerged from the uncertainty following the collapse of 
communism, when the threat that had driven America's defensive 
preparations for the last two generations was suddenly swept 
away by itself. With little clarity as to future dangers, 
policymakers turned to recent advances in technology for clues 
as to how the military could maintain its edge.
    Not surprisingly, they got swept up in the enthusiasm for 
new information technologies that were then captivating popular 
culture and the financial markets. Thus it became fashionable 
to say that the military was pursuing a capabilities-based 
posture rather than a threat-based one, because we did not know 
what threats we would be facing, but we thought we knew which 
technologies would be decisive.
    Experts such as Dr. Krepinevich correctly insisted that the 
technology would only be decisive if it were wedded to 
appropriate operational concepts and organizational changes. 
Nonetheless, there is little doubt that the concept of 
transformation the military is pursuing today is driven first 
and foremost by enthusiasm for emerging information 
technologies. All of the gains that military planners foresee 
in global awareness and precision and agility and survivability 
trace their origins in one way or another to these new 
technologies.
    Now, I have no basic quarrel with the claims being made for 
military transformation. But because you have already heard 
what is so promising about transformation, I would like to 
focus in the remainder of my remarks on some of the concerns I 
have about its implementation. I have distilled those concerns 
to five points.
    Point 1: The most important military lesson of September 11 
is that we have little idea of what is coming next. During the 
Cold War we convinced ourselves that the threat was stable and 
predictable, but a review of recent history reveals that at 
least there was one major strategic surprise every decade. From 
Pearl Harbor in the 1940s to the North Korean invasion of the 
South in the 1950s to the Tet offensive in the 1960s to the 
fall of the Shah in the 1970s, then the collapse of communism 
in the late 1980s, we have a remarkable record for getting the 
future wrong.
    Like the atrocities of September 11, all of these surprises 
looked predictable once we adjusted our way of thinking. The 
problem is that that happened after the fact. So any concept of 
transformation that proposes sweeping programmatic changes 
based on presumed understandings of future challenges is doomed 
to failure. There are simply too many possible threats and the 
very act of preparing for some of them reduces the likelihood 
that those are the ones that we will face.
    I give the Bush administration high marks for acknowledging 
this uncertainty in its transformation plans. That is the 
reason why weapons that looked like candidates for 
cancellation, such as Crusader, survived the administration's 
strategic review, because once policymakers understood its 
capabilities they could not dismiss its utility in a range of 
plausible contingencies.
    Just last week an Air Force general was explaining to me 
how the presence of a system like Crusader in Afghanistan would 
have enabled his service to deploy its bombers more 
effectively. I guarantee you that a year ago that general was 
not anticipating a land war in Asia any time in the near 
future.
    Point 2: The lessons of the past are seldom obvious. 
Proponents of particular approaches to transformation 
frequently refer to history in making their case, but the 
inference that they draw for our own preparations cannot be 
proven. For example, a favorite case study is the German 
success in adapting new technologies such as radio, air power, 
and tanks to overrun France in a few weeks during 1940. But 
Germany was facing a long-time enemy, an enemy whose terrain, 
whose strategy, whose formations were well understood. That is 
not the situation that we are facing today.
    Moreover, the French strategy of static fortifications was 
a response to the failure of its offensive strategy in the 
previous war. In other words, the French were trying to learn 
from their own history. Unfortunately, they learned the wrong 
lessons. We have to be careful that in implementing 
transformation we do not do the same.
    Point 3: Our future adversaries will not always be fools. 
Every enemy we have faced since the end of the Cold War has 
been less capable than the one that came before. Iraq was less 
capable than Russia, Serbia was less capable than Iraq, the 
Taliban was less capable than Serbia. The incompetence of our 
adversaries has given us an exaggerated idea of how much 
progress we have made in transforming our forces.
    Now, U.S. forces exhibited impressive synergy in Operation 
Enduring Freedom, but that should not be hard to achieve 
against a primitive nation with no intact air defenses and deep 
ethnic divisions. If we try to fight a unified and capable 
adversary using 40 year old bombers, unprotected aerial 
vehicles, and free-roaming Special Forces, we will probably 
have our head handed to us.
    Even if we believe that future adversaries will be marginal 
in their military capabilities, we ought to be asking ourselves 
how Operation Enduring Freedom would have fared in a country 
that was covered with jungles or with cities in which our enemy 
could have mingled with noncombatants. It is essential that our 
transformation efforts include realistic training and realistic 
experimentation that exposes new warfighting concepts to the 
rigors of combat with truly resourceful enemies, not the crew 
that we have been facing lately.
    Point 4: Because our adversaries will not be fools, we need 
to understand the weaknesses of our new technology. At the 
rollout of the Navy's new Hawkeye 2000 early warning aircraft 
last fall, Rear Admiral Philip Balisle made a startling 
admission. He said that once the fleet transitions to network-
centric concepts of operation, loss of access to the network 
could actually make it more vulnerable than it is today.
    That is not the only instance in which new technology 
potentially brings new problems. The satellite-guided munitions 
that provide our pinpoint accuracy rely on weak signals from 
thousands of miles away that in some circumstances can be 
jammed with only 20 watts of power. The networks that 
facilitate next generation naval warfare will have no hardening 
against electromagnetic pulse because the Navy has written that 
requirement out of its architectures, which makes asymmetric 
attacks using nuclear weapons a very potent threat to fleet 
effectiveness. The on-board logic of unmanned combat aerial 
vehicles will not begin to approach the computational capacity 
of human brains, making those vehicles highly vulnerable to 
attacks by manned aircraft.
    So before we get rid of all the laser-guided bombs because 
they cannot see through clouds or begin dumbing down our 
platforms because they are networked, we need to understand how 
clever adversaries might exploit weaknesses in new technology. 
Here again, the need for realistic training and experimentation 
is obvious.
    My final point is that realizing the potential of military 
transformation requires a greater commitment to procurement. 
The level of procurement that the administration proposes for 
2003 is only two-thirds of what the Joint Chiefs estimated is 
needed every year to sustain existing forces. Since 1990 the 
average age of Air Force planes has increased from 13 to 22 
years. There is not a single year since 1993 that the Navy has 
bought the number of warships it must buy every year to support 
a 300-ship fleet. The Army is buying less than 20 percent of 
the helicopters it needs to maintain its military edge.
    I have for the record two tables reflecting how decrepit 
our air fleets have become. It is too soon to criticize the 
Bush administration for underinvesting in new technology 
because it inherited a raft of readiness and personnel problems 
that had to be addressed immediately. But if it does not stick 
to its plan to raise procurement spending in the future years, 
the resulting erosion in military capabilities will undercut 
any claim of transformation.
    Thank you.
    [The information referred to follows:]
      
    
    
      
    Chairman Levin. Dr. Thompson, thank you. Both of you have 
really given us a lot to think about and a lot to chew on. I 
want to thank you both for the very thoughtful, very thorough 
presentations. They are extremely helpful to this committee. We 
will make sure that each of our members actually gets a copy of 
it as delivered, as well as the prepared testimony. I thought 
it was extraordinarily useful testimony for this committee and 
we are grateful for it.
    Senator Warner. Mr. Chairman, could I associate myself with 
your remarks. I followed the testimony very carefully and I 
share your views. I intend to follow up on one or two of these 
issues and ask the Secretary of Defense what his comments are 
on them.
    Chairman Levin. Let me start with you, Dr. Thompson. You 
have given us very thoughtful limits on some of the hopes for 
transformation and some of the realities that we ought to think 
about and worry about. What changes would you make in the 
current transformation direction to address some of the 
challenges that you have outlined for us? In other words, how 
would you change our current course to take into account those 
challenges, those problems?
    Dr. Thompson. Andy and I had the opportunity to help the 
Department in shaping the process to some degree, the Defense 
Planning Guidance (DPG) and the other factors supposed to drive 
transformation. I guess I am a little troubled by this notion 
that transformation is a journey and not a destination. If you 
do not know where you are going, it is a little hard to sort 
out when you are headed in the right direction.
    I think that one of the ways in which this process could be 
made more rigorous and more goal-oriented is if the services 
were given some quantitative goals. I mean, if I look at the 
list of major goals that they have, protecting critical bases 
of operations, denying enemy sanctuary, projecting power in 
denied areas, the only numbers I see associated with those 
goals are the increases in the budget. I would like to see some 
performance goals, some quantitative metrics that tell the 
services what they are expected to be able to achieve.
    If I take the Crusader as an example, which frankly I do 
not know that much about, but the Army claims the Crusader is a 
300 percent increase in capability over Paladin in one of the 
key performance parameters. I would like to see the office of 
the Secretary of Defense (OSD) establish some clear performance 
goals that are denominated numerically, rather than in words, 
that the services have to try to achieve, rather than simply 
saying, you are headed in the right direction.
    Chairman Levin. Is there anything that you would do 
legislatively to try to address some of the problems that you 
have outlined for us this morning?
    Dr. Thompson. Probably not at this point. The reason why is 
because, although----
    Chairman Levin. Excuse me for interrupting. When I say 
legislatively, I am including dollars as well as concepts and 
programs and requirements and reports.
    Dr. Thompson. Andy may have better suggestions on that than 
I do. I personally think that if there are dollars that need to 
be added they are in the procurement account, because that is 
where I think we are falling short. But as far as 
transformation is concerned, one point I would like to make as 
to why I do not think it is necessary at this point to second-
guess the administration on where it is putting the money on 
transformation is that, notwithstanding a lot of the political 
rhetoric, there is a remarkable degree of continuity between 
what the new administration is doing and what its predecessors 
did in terms of fostering and pursuing transformation.
    The concept of future threats is similar. The processes 
that they are adopting, the goals they would like to undertake, 
it is all very similar. I would like to see them have a little 
more time at the Pentagon to see where they are going before 
they start being second-guessed.
    Chairman Levin. Dr. Krepinevich, let me pick up right 
there, because your testimony also suggested that the 
administration's programs and budget priorities sustain the 
course of the last administration, which is what Dr. Thompson 
just stated. What changes in course, if any, would you 
recommend at this time specifically in our transformation 
program? Prioritize those for us, because there were a lot of 
them. You gave us a lot of suggestions.
    Dr. Krepinevich. All right. I think first of all there has 
to be some sense that you do not get in Joint Vision 2010 and 
the service vision documents, of how we plan to conduct 
operations in the future. The officer corps needs that, the 
people who are establishing defense priorities in the Pentagon 
need that, you need that. There is no joint warfighting concept 
right now. We have a vision that talks about precision 
engagement and other pillars, but no sense of how we are going 
to operate.
    I think it is essential in terms of getting validation and 
fidelity to establish a joint national training center, and 
maybe the linking of the western training ranges, as Secretary 
Wolfowitz said, is on the path of that. But I think we need at 
the joint level an analogue to what we have at the service 
level, which is a training center. We need a joint opposing 
force.
    We need regular exercises. Loren knows my fondness for 
history. Our Navy conducted a major fleet exercise every year 
between 1921 and 1941 and what they learned won World War II. 
Our Marine Corps was doing the same thing along that time 
frame.
    We need an opposing force. Right now what we do in the way 
of exercises at the joint level--and I have been told this by 
people at JFCOM--is essentially we do demonstrations. We do not 
do experiments. How do we expect to find out whether we are 
failing or not failing when in fact we do not go up against 
anybody?
    So as a way of beginning to get people to think about how 
we are going to fight, how we are going to deal, let us create 
that joint opposing force that has the ability to present that 
anti-access threat, that area denial threat. If you have a 
joint urban warfare training center--as Loren said, what if in 
Afghanistan we had had to go into urban areas? Certainly the 
Army has confronted this problem in its war games. That is a 
different kettle of fish. How would we perform?
    In terms of our own homeland defense, an urban warfare 
training center would also, I think, give us an enormous 
opportunity to bring together not just the military forces, but 
other elements--local, State, Federal elements--to work 
together to deal with how would we confront a non-traditional 
threat to an American city and deal with the consequences if we 
failed to deter or defeat that threat before it was able to 
exercise an attack.
    So I think in that area that is the area of greatest 
opportunity and greatest need, Mr. Chairman.
    Chairman Levin. Let me just finish my own role here, 
because I am going to have to leave and turn this over to 
Senator Warner. I would like to follow Senator Warner's 
suggestion here and ask staff to do two things relative to your 
testimony: to extract the specific suggestions that you have 
made both in your prepared testimony and here; and to ask the 
Department of Defense for their reaction to those suggestions.
    I think Senator Warner is really on target here. In a way, 
it would have been better to have this testimony as the first 
panel. It would have been interesting.
    Senator Warner. We should have kept them seated.
    Chairman Levin. We would have had perhaps an opportunity 
then for our first panel to react to it. But we cannot do it 
both ways and this is the way we chose.
    But I think what we will do is follow that suggestion of 
Senator Warner and ask our staff to extract from your testimony 
the specific suggestions, and there are many of them, and ask 
the first panel to react to those suggestions as well as to 
send along the entire testimony.
    With that, I thank Senator Warner and turn it over to him. 
Thank you both.
    Senator Warner [presiding]. Thank you, Mr. Chairman. We 
will do that jointly.
    I think we fail here in Congress to avail ourselves of the 
enormous amount of work going on in, as I call it, the quasi-
public-private sector. You are neither one. You are out there 
as individuals and organizations trying to do a conscientious 
job guiding America, that is Congress and the Executive Branch, 
in new directions. You are doing the introspective thinking and 
analytical reflection on history and using history as a rear 
view mirror to guide us today as we go into the future.
    I want to pick up, Dr. Krepinevich, on your statement about 
homeland security. This is my major concern, major major. There 
is not a day that goes by that I do not reflect on where I was 
and what I was able to do just as one person on September 11. I 
just fear that comparable--maybe not comparable, but other 
incidents could strike this Nation, and are we taking the right 
steps here at home to prevent such incidents.
    I would like to see more of a balance between expenditures 
and the efforts to protect us here at home, our cities, in 
particular our ports and our military installations and forego 
maybe some of the most extraordinary high tech, far-reaching 
concepts of the military programs that we have to be employed 
elsewhere.
    Dr. Krepinevich. Senator, I would say right now, 
unfortunately, there are many more questions than there are 
answers. I think the administration is bringing together what 
it needs to do to develop a comprehensive strategy for how we 
plan to go about defending homeland. Hopefully, a lot of those 
questions will be asked.
    For example, as you point out, there are a number of ways 
to threaten our homeland. There are the traditional ways we 
have worried about, ballistic and cruise missile defense. 
Deputy Secretary of Defense Wolfowitz will tell you that those 
are two different problems and in fact focusing on ballistic 
missile defense only gets you part of the way in that area.
    There is the concern about non-traditional forms of attack 
by weapons of mass destruction, the growing proliferation of 
access to chemical or biological agents, radiological agents. 
Other novel forms of attack such as we saw on September 11.
    I think we need to get some answers. The administration, as 
I understand it, is supposed to produce its strategy some time 
in early summer.
    As you point out, what is the weight? How much weight do we 
put on actively or passively trying to erect defenses here 
versus going out and conducting preemptive strikes? I think for 
myself the most remarkable statement in the President's State 
of the Union was not about the axis of evil, but the statement 
that time is not on our side. If you think time is not on our 
side once these people begin to move to attack you, then you 
have to be able to go out and hit them before they get to this 
country.
    What is the weight of emphasis between the various threats 
to this country? What is the role of the military? Does the 
military, for example, even have a major role in defending the 
national information infrastructure when so much of the 
commercial sector is reluctant to share that information with 
government?
    Then there are issues with respect to the force structure, 
because there is going to be a homeland defense tax on this 
defense budget. As a number of people have said here, we have 
really not had to invest very much in defending our homeland. 
How much is that going to take away from our ability to project 
power overseas?
    I think we are going to find that because of this we need 
our allies more at the very time that they are investing less 
and less in defense.
    Senator Warner. I agree with that statement wholeheartedly. 
Coalition warfare is essential, not only from the standpoint of 
bringing them to an accountability for incidents overseas which 
affect them as much as they do the United States, but also to 
get the support here at home.
    Dr. Thompson. Senator, I drive home every night from 
Arlington to Alexandria and it is a rare night when I am 
driving by the city and looking across the river----
    Senator Warner. Looking at what?
    Dr. Thompson. When I am driving down that road in the 
evening, and I look across the river and I see the city. It is 
a rare time that I do not imagine this city gone. It is very 
believable to me that a generation from now it will not be here 
or it will be substantially different than it is now. I think 
we are in great danger and I do not think we have our act 
together on homeland defense at all.
    If you just look at the arrangements that we have today, 
ATF and Customs are in the Treasury Department, INS and FBI are 
in the Justice Department, Coast Guard and FAA are in the 
Department of Transportation. We are really not postured for 
the threat. Now, culturally it would be very difficult for us 
to adapt. It will take more attacks before we get the point 
that we are in great danger.
    But even on an organizational and administrative level, I 
think we have barely begun to scratch the surface of what we 
need to do. I think you are entirely right.
    However, I would offer one word of caution. I am not 
certain that the Department of Defense has a big role to play 
in homeland defense. I think we need a division of labor here. 
We already have dozens of organizations that are involved in 
homeland defense. We only have one organization that is 
mandated to do forward defense against the sources of the 
danger to our homeland. I would not want to see our Active-Duty 
Force diverted from that critical mission when there are so 
many other people in the Federal Government who are supposed to 
be responsible for securing our homeland.
    Senator Warner. But there is an extent to which our Nation 
can foot the bill of these conflicts. From Bosnia to Kosovo to 
Afghanistan, it was our airlift, it was the smart weaponry. I 
do not mean to demean in any way the courage of the men and 
women in uniform of other nations, but their central 
governments simply have not kept pace with the necessary 
investments to modernize them. We are paying the bill.
    Now all of a sudden here at home we experience on September 
11 a catastrophe that none of us could have envisioned, in the 
magnitude of the devastation of loss.
    Dr. Thompson. I think the nicest thing we can say about the 
situation in which we find ourselves today that before we were 
paying the bill for their defense, now we are paying the bill 
for ours.
    Senator Warner. Well, I hope that is true.
    Yes?
    Dr. Krepinevich. Senator, I was about to say that I was 
fortunate to accompany Senator McCain and Senator Lieberman on 
the delegation to Europe for the Wehrkunde Conference. If you 
had been there your concerns would have been magnified, because 
after Operation Allied Force in 1999 there seemed to be this 
resolve among a lot of our European allies that, by golly, we 
are going to get serious now. This time around, it was an air 
of resignation: We made the try and we realized that we are not 
going to be able to do anything near what we had hoped to be 
able to do even to try and keep pace with the Americans.
    So again, at least I think for the short term there is much 
to be concerned about in terms of the direction of our allied 
involvement.
    The other point I will make is, since Andy Marshall's name 
was mentioned, he has a phrase that he calls ``cost-imposing 
strategies,'' things that your enemies can do at relatively low 
cost to impose enormous costs on you. I think if you look at 
this administration's list of these critical operational 
challenges, what you see is a series of cost-imposing 
strategies.
    How much did it cost al Qaeda to conduct the attacks it 
conducted on September 11, how much did it cost whoever it was 
to develop that form of anthrax, versus how much have we spent 
just since then to try and recover from that? How much will it 
cost an enemy who fabricates hundreds of ballistic and cruise 
missiles to threaten our forward ports and air bases versus how 
much will it cost us if we proceed to stick with some of these 
programs that are at high risk in that kind of environment to 
create a different kind of capability?
    We have to deal with this cost-imposing strategy problem. 
Otherwise, as you say, we are just not going--well, we just do 
not have the resources to pursue a rich man's strategy in every 
possible area where we are threatened.
    Dr. Thompson. The answer to that challenge is not not to 
defend our homeland. We have to do that. The real answer, 
though, is to go and to find them and to kill them, and that is 
what the military is there for. We have been complaining as 
long as I can remember about the inadequacies of our allies, 
but if they were not willing to step up to the Soviet threat 
they are sure not going to step up to this one.
    I am told that the leftists in France today cannot even win 
an election without the Moslem vote. If that is the case, we 
are going to have to do this pretty much all for ourselves.
    Senator Warner. Well, gentlemen, we will close out on that 
note. I did want to ask you a question on shipbuilding, though, 
Dr. Thompson, which is a matter that I have had a keen interest 
in for many years. So many people say we are not building 
enough ships. It is always the numbers. When I was privileged 
to be in the Department of the Navy, we were at 800 to 900 
ships. Today we are bordering a little above 300 or a little 
below 300 and teetering around in that area.
    Of course we recognize that a ship today, certainly a 
modern ship, has capabilities far above what we had in 
yesteryear. Is there a better formulation than just the number 
of ships that is needed to have a convincing and effective 
maritime force projection credibility?
    Dr. Thompson. Well, if not the number, then the modernity 
of the ships, the currency of the technology that is on them. I 
was rather distressed by something my friend Gordon England 
said in his testimony introducing the 2003 budget proposal. He 
said that the current distribution of the ship population was 
nearly ideal because it was 16 years old and that is the middle 
of the average service age. I could not believe he said that.
    There are things other than corrosion or fatigue life of 
metal that are better ways of judging how old you want your 
ships to be. Imagine how many generations of technology in 
computers and fiber have come and gone in the last 16 years. 
Yet we are getting ready to keep our cruisers at sea for 40 
years. The Navy is not only looking at extending the Los 
Angeles class to 33 years, but maybe to 40 years in terms of 
refueling, far beyond their intended design life.
    If we are not going to be concerned with whether it is 600 
or 300 ships, we ought to at least be concerned with the 
currency of the ships we are buying.
    Senator, if I could say one other thing about that. Some 
internal Navy charts were shared with me a couple of months ago 
at a briefing by an admiral and what they showed is if you make 
a series of ahistorical, optimistic assessments of how long the 
fleet is going to last--in other words, things that are 
radically inconsistent with past experience--we can keep 
ourselves at 300 ships with the existing shipbuilding program. 
But if you use the past as a guide as to where we are really 
headed, we are down to less than 60 major surface combatants 
within a decade, because the ships simply retire at a faster 
rate than we are able to keep up.
    I think what is going on with shipbuilding is a scandal. I 
mean, fortunately it is a bipartisan scandal, but it is a 
scandal. If we do not get our act together soon, we are not 
going to be able to cover the world with the latest technology 
even by the standards of the British or the Germans.
    Senator Warner. Well, you do not see a lot of active 
shipbuilding in those nations as far as I am concerned.
    Dr. Thompson. Well, that is certainly true. But of course 
our missions----
    Senator Warner. The Royal Navy is now----
    Dr. Thompson. You are right, but our missions and our 
responsibilities are so much greater.
    Senator Warner. Beg your pardon?
    Dr. Thompson. Our responsibilities are so much greater than 
theirs are. I mean, where would we have been if we had not had 
carriers in the Indian Ocean early on?
    Senator Warner. I doubt if we could have operated the 
Afghan campaign as we did.
    Dr. Krepinevich. Senator, if I could just add a couple of 
things to what Dr. Thompson said. I think you made an excellent 
point about the ships we have today being far more capable than 
those that were in the fleet even 15 or 20 years ago, and all 
the reasons why.
    One of the things that is characteristic of a period of 
military revolution or transformation is the metrics by which 
you gauge performance change. For example, if we had judged 
aircraft carriers according to battleship standards, we would 
still have battleships, because it was not the volume of fire, 
it was the range that made all the difference.
    If you are looking, for example, at strike today, the Navy 
has done a terrific job in proliferating its strike 
capabilities. It is astounding to think that submarines can now 
strike targets in Afghanistan, incredible.
    So in a sense you could say, well, that should bring the 
number perhaps in the fleet down, because the ships are more 
capable. On the other hand, you have Admiral Cebrowski saying 
network-centric warfare, we have to get into the littoral 
quickly, we need a class of combatants that can do that. Maybe 
it is Admiral Clark's littoral combat ship class, which would 
drive the numbers back up again.
    A lot of it has to be linked to what the threat is, what 
the competition is, and how you are going to beat that 
competition. One of the metrics being used by the Navy staff 
right now is they are looking at this issue of helipad space 
because of what is called the naval NORAD, the ability to 
intercept ships on the high seas that we think might be 
carrying damaging cargo to the United States.
    With respect to foreign shipbuilding, it is niche, but it 
is very impressive in some respects. The Navy right now is 
experimenting with a joint venture, this high-speed vessel that 
was built in Australia and is showing a great deal of promise. 
The Marines are using another version out in the Pacific. The 
Swedes, whom Andy Marshall has been in contact with, are 
building a class of coastal combatants called the VSBE, which 
are highly stealthy ships.
    Now, these may not be the kind of ships that we want as 
combatants, but they may be the kind of ships that our Navy 
confronts in 10 or 15 years in large numbers. So important to 
keep an eye on what the other guy is doing as well.
    Senator Warner. I think our record should reflect a little 
bit about your organizations, how they were brought to being, 
where the sources of income are to support then. I think that 
it is necessary that we have that in the record, because you 
have well-known distinguished organizations which you are 
representing today. So if each of you would put a half a page 
in the record, we would appreciate it.
    [The information referred to follows:]

    Dr. Krepinevich. The Center for Strategic and Budgetary Assessments 
is an independent, policy research institute established to promote 
innovative thinking about defense planning and investment strategies 
for the 21st century. CSBA's analytic-based research makes clear the 
inextricable link between defense strategies and budgets in fostering a 
more effective and efficient defense, and the need to transform the 
U.S. military in light of an emerging military revolution.
    CSBA provides timely, objective and credible information to 
policymakers, opinion leaders, the media, analysts and others in the 
United States and abroad. CSBA's outreach includes an aggressive 
research and publishing program, seminar activities for senior policy 
officials and other decisionmakers, briefings for congressional staff, 
the media and industry executives, and lectures before academic, civic, 
and other professional groups nationwide.
    CSBA funding comes from a wide range of sources, ensuring 
impartiality and independence. The majority of funding comes from a 
diverse group of charitable foundations to support CSBA's academic and 
education programs. Further financial support comes from directed 
government contracts, primarily focusing on preparing studies and 
sponsoring targeted meetings. CSBA on occasion will provide 
academically rigorous and independent programs for defense industry.
                                 ______
                                 
    Dr. Thompson. The Lexington Institute is a non-profit, non-partisan 
public policy research organization headquartered in Arlington, 
Virginia. It was established in 1998. Its Chief Executive Officer is 
Merrick Carey, a former congressional aide to Rep. Jack Kemp (R-NY) and 
Rep. Jim Courter (R-NJ). Its Chief Operating Officer is Dr. Loren 
Thompson, former deputy director of Georgetown University's Security 
Studies Program. The institute has a staff of 12 people and an annual 
budget of about $2 million. Lexington's revenues are drawn from four 
sources: foundations, corporations, private individuals and the Federal 
Government.
    The Institute sustains a diverse research and education effort 
focusing on five major areas: national security, education policy, tax 
reform, international business, and regulatory policy. Its largest 
program is national security, which is concerned mainly with issues of 
strategy, resources, and technology bearing upon the capacity of the 
United States to defend its homeland, allies, and vital interests. In 
general, the institute seeks to further a public policy agenda based on 
limited government, scientific merit and the furtherance of freedom.

    Chairman Warner. The hearing is concluded.

    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin
                         science and technology
    1. Senator Levin. Secretary Wolfowitz, the Department's science and 
technology (S&T) programs are one of the engines of military 
transformation. The Defense Science Board and the Secretary of Defense 
have embraced a goal of 3 percent of the Department's total budget 
being invested in S&T programs. The current budget request only 
requests 2.6 percent of the budget for S&T, and reduces this percentage 
each year out until 2007, when it falls to 2.3 percent. How is this 
reduction in the commitment to S&T consistent with the goals and 
visions of accelerating the transformation of the military?
    Secretary Wolfowitz. It remains our goal to gradually increase 
funding for science and technology (S&T) programs to a level of 3 
percent of the Department's total budget. However, we also need to 
ensure that the funding levels of the various components in the 
Department's total budget are balanced based on our assessment of the 
most urgent requirements at any given time. The fiscal year 2003 
request for S&T is $9.9 billion; which includes $9.7 billion of base 
S&T programs and $213 million in Defense Emergency Response Funds for 
combating terrorism technology. This is a 12.5 percent increase over 
the fiscal year 2002 S&T request of $.8 billion. However, because of 
the significant increase in the Department's total funding in fiscal 
year 2003 and the need to add dollars to fully fund acquisition 
programs and health care etc. the percentage of the budget request 
devoted to S&T is less than 3 percent. The fiscal year 2003 budget 
request begins transformation by including funds for classified space 
S&T programs, along with a substantial increase in funding for 
combating terrorism technology.

                              arsenal ship
    2. Senator Levin. Admiral Cebrowski, in his campaign speech at The 
Citadel on September 23, 1999, candidate George W. Bush stated that 
``On the seas, we need to pursue promising ideas like the arsenal 
ship--a stealthy ship packed with long-range missiles to destroy 
targets from great distances.'' What has happened with the arsenal ship 
idea?
    Admiral Cebrowski. The arsenal ship idea was exactly that--an idea. 
The concept evolved from a fairly narrowly defined answer into a range 
of very important questions about what a family of future surface 
combatants might look like. The idea of a family of ships is an 
alternative that offers the potential to broaden our capabilities base 
and technology base. The Navy should be very much larger than it is if 
you consider only numbers of ships. However, the economics suggest that 
the Navy must explore transformational ways to embrace the future. 
Changes underway in warfare also allows us to examine the implications 
of shifts in key relationships such as the cost of speed and increased 
payload fractions from smaller displacement hulls.

                         krepinevich proposals
    3. Senator Levin. (Also on behalf of Senator John Warner) Secretary 
Wolfowitz, on pages 14 to 21 of his prepared statement, Dr. Krepinevich 
discussed transformation in the context of ``skipping'' a generation of 
technology. He proposed three candidates for ``skipping'' a generation; 
the ``leap-ahead'' systems or capabilities that would warrant such a 
move; and how the Department might hedge against any of the proposed 
``leap-ahead'' systems not working out. Could you provide the 
Department's views on each of Dr. Krepinevich's proposed candidates?
    Secretary Wolfowitz. The Department's position on the three 
candidates for ``skipping'' a generation (DD(X), JSF, and Crusader) is 
provided in attachments 1, 2, and 3.
Attachment 1
    The DD(X) destroyer is being designed specifically to establish and 
maintain maritime dominance in the operationally complex littoral 
battlespace--a capability that Dr. Krepinevich suggests will be 
fundamental to meeting 21st century warfighting requirements. The DD(X) 
technologies will create new capabilities while optimizing crew size 
and yielding significant combat advantage. DD(X) is part of a family of 
surface combatants that includes a future cruiser (CG(X)) and littoral 
combat ship (LOS), and will offer a balanced set of warfighting 
capabilities to meet the national security requirements in the 21st 
century. The DD(X), CG(X), and LCS will operate as a networked, 
distributed force achieving the network centric warfare construct Dr. 
Krepinevich identifies in his ``skip a generation objective.''
    To ensure DD(X)'s ability to perform littoral missions, the ship 
will incorporate advances in stealth and survivability. The first: 
surface combatant with multi-spectral signature reduction, DD(X) will 
possess significantly reduced radar cross-section, infrared, magnetic 
and acoustic signatures compared to the DDG 51 class and make the ship 
much less susceptible to mine and cruise missile attack: in the 
littoral environment. In addition, the hull is being designed to reduce 
the effects of weapons detonation, and the automatic containment and 
damage suppression systems will improve the recoverability of the ship 
from a casualty event.
    Dr. Krepinevich states that converted SSGNs and/or increasing the 
inventory of precision guided munitions would provide an effective 
``hedge'' for DD(X). While either of those assets would provide 
additional Vertical Launch System (VLS) cells, only DD(X) will fully 
meet the Marine Corps' requirements for naval surface fire support. 
DD(X) will have the capacity to carry the variety and volume of 
offensive, precise, all-weather firepower that will enable our Marine 
Corps and light mobile Army forces to complete their littoral missions.
    Lastly, DD(X) is completely aligned with the, ``Required Military 
Capabilities'' needed to transform our military, which Dr. Krepinevich 
emphasizes on page 14, as detailed below:

         Mobility: DD(X) will have the range, speed and 
        sustainability to be forward deployed for extended periods and 
        operate with carrier battlegroups and expeditionary strike 
        forces. In addition, DD(X) will employ in-stride mine 
        avoidance, which will enable the ship to operate in the 
        littorals.
         Stealth: The advanced technology employed by DD(X) 
        will reduce the ship's signature to that of a fishing boat with 
        quieting nearing that of a submarine. These attributes will 
        better enable DD(X) to survive in the littorals.
         Electronic Protection: DD(X)'s reduced signatures will 
        enable electronic protection and deception technologies to be 
        markedly more effective.
         Extended-Range Systems and Strikes: The DD(X) advanced 
        gun system range of 100nm provides extended-range as compared 
        to 13nm achieved today. Most importantly, DD(X) features 
        responsive and all-weather strike capability with ``on-
        station'' sustainment facilitated by underway replenishment 
        capability.
         Precision, Electronic and Non-lethal Forms of Strike: 
        The DD(X) strike weapons include both gun launched and vertical 
        launched ordnance whose guidance systems enable very precise 
        targeting for long-range interdiction.
         Unmanned/Automated Systems: DD(X) makes extensive use 
        of advanced automation to reduce workload and improve 
        survivability. DD(X) is expected to significantly reduce the 
        crew size, possibly to one-third the crew of a DDG 51 resulting 
        in significant life cycle cost savings. Automated damage 
        control and command and control data fusion are just a few 
        examples of functions that will be automated on DD(X). In 
        addition, DD(X) will be capable of launching, recovering and 
        servicing unmanned air, surface, and underwater vehicles.
         Compressed Operational Cycle Rates: In support of 
        improved readiness, DD(X) is being designed to meet an 
        operational requirement for a 3-year deployment. This will be 
        achieved in part through the application of systems and 
        materials requiring limited maintenance. In addition, the 
        automation of resupply and the ability for underway 
        replenishment on DD(X) are expected to facilitate increased 
        ``on-station'' availability compared to existing fleet assets.
Attachment 2
    From a broad perspective, the Department must reconcile the 
competing demands of modernization and current operations. We must 
modernize smartly and maintain readiness to address threats to our 
country's national interests, today and in the future. In the aftermath 
of the September 11, 2001 attacks on our homeland, Operation Enduring 
Freedom, and the current tension in the Middle East, this balance has 
become particularly difficult. We must consider fiscal realities. We 
face a major challenge in modernizing our aging aircraft fleet because 
many current aircraft were built at high rates during the 1980s, when 
spending levels were at their Cold War peak, and because most of the 
aircraft planned for the future feature more costly, improved 
capabilities to meet projected threats. With the constraints of threats 
and fiscal realities in mind, the Department recently conducted 
detailed analyses to ensure that we recommended the best force mix 
possible. These analyses, which included B-2s, F-16s, and UCAVs, as 
well as other alternatives, formed the analytic basis for an affordable 
and balanced force structure modernization plan.
    From a more specific perspective, the Department has thoughtfully 
considered the options presented by Dr. Krepinevich and found them less 
attractive in both the near and long term. First, additional B-2s would 
provide more technology from the 1980s, at a very high cost. Our 
analysis suggests that unless the budget were dramatically increased, 
our money would better be spent on the current modernization plan. 
While B-2s do offer stealth, with impressive range and payloads, we 
have enough of these aircraft to do the job that they were designed to 
accomplish. In addition, the Department has funded a program designed 
to increase the ``smart munitions'' carriage capability of our existing 
B-2 fleet as suggested. Dr. Krepinevich's paper also indicates that ``. 
. . the JSF CTOL version assumes the U.S. military will continue to 
enjoy unimpeded access to forward air bases for the indefinite 
future.'' In fact, the JSF combat range was designed to be 
substantially longer than legacy fighters and clearly supports even the 
most stressing proposed threat scenarios. Air refueling tankers extend 
that range even farther.
    Similarly, F-16 Block 60 aircraft were not included in our 
modernization plan because, in part, our vision is to transform into an 
all-stealth fighter fleet in the years to come. Purchase of new F-16s, 
even with advanced avionics, extends the life of the less-capable, 
less-survivable legacy aircraft well into the future at the expense of 
a faster transformation.
    UCAVs do offer incredible potential, and the Department has 
embraced the concept with the funding necessary to develop it as 
quickly as possible. Dr. Krepinevich indicated that ``[t]he opportunity 
exists to move much more aggressively in developing a range of UCAVs.'' 
In fact, this program is already on an aggressive schedule and 
technical glide path. Examples of technical difficulties include the 
ability to automatically identify and target in the ``fog of war,'' 
overcoming bandwidth and line-of-sight communications issues, and re-
targeting flexibility. The UCAV offers the potential to transform the 
Air Force and Navy further, but it remains experimental. The Department 
will attempt to develop the UCAVs capabilities, but it would be unwise 
to wager our country's ability to dominate in the air until we better 
understand what is feasible, in terms of schedule, cost, and 
capability.
    The services and the Department continue to reevaluate force 
structure requirements. Our in-depth review and analysis suggest that 
the Department's proposed plan is more effective and affordable than 
the alternatives that Dr. Krepinevich has offered.
Attachment 3
    When the Secretary of Defense announced the decision on May 8, 
2002, to recommend to Congress that the funds for Crusader be 
redirected, the Army will be foregoing their next-generation, 155mm, 
self-propelled howitzer. The Army has, literally, skipped a generation 
of self-propelled howitzers and is focusing on the Objective Force 
indirect fire variant of the Future Combat System.
    On May 13, the USD(AT&L) issued direction to the Secretary of the 
Army to take all necessary and prudent actions to implement this 
decision, and to only obligate additional funds for Crusader after 
consulting with him. The Army is working toward an orderly termination 
of the program as directed by the Secretary of Defense. The contract 
will soon be terminated and a settlement will be negotiated with the 
contractor concurrently, a budget amendment for fiscal year 2003 has 
been submitted to reflect the Secretary's decision. The Department is 
studying alternative investments in the indirect fire missile area to 
accomplish the transformation desired by the Secretary.
                                 ______
                                 
               Questions Submitted by Senator Bill Nelson
                    transformation of military space
    4. Senator Bill Nelson. Admiral Cebrowski, recent issues of 
Aviation Week and Space Technology magazines feature excellent articles 
on ``MILSPACE'' highlighting the important role space systems played in 
Afghanistan enabling the collection, processing, and dissemination of 
time-critical information to help combat forces find and destroy 
terrorists. We have also recently heard Under Secretary of Defense Pete 
Aldridge testify that getting space-borne capabilities to our 
warfighters provides them with the best communication coverage. 
Currently, the National Security Space Architect is conducting a study 
to provide us and the military space community with an integrated 
roadmap of deliverable transformational communication capability. In 
light of the significant advantages gained from the employment of space 
technology, how will these pertinent findings be incorporated into the 
transformation process?
    Admiral Cebrowski. One of the things we've learned well from the 
conflict in Afghanistan, is that while the intelligence collection 
capabilities have been excellent, we need to add persistence to the 
equation. That is to say, satellites in low-Earth orbit circumnavigate 
the globe about every 97 minutes, but operationally you'd like to have 
longer dwell time over likely targets. You'd like to be able to have a 
focused view of hot spots on the face of the Earth that is not 
intermittent, but more continuous, in order to achieve universal 
situational awareness. Universal has a temporal component; you'd like 
to know all the time what's going on around the globe. One way to 
achieve that is with more satellites in stationary orbit--a very 
expensive solution, or--a more transformational way--develop new 
technology which allows us to have excellent collection capabilities 
through a triad approach of space-based systems and sub-orbital 
platforms.

    5. Senator Bill Nelson. Admiral Cebrowski, how will you ensure that 
these results will be shared across the military services and DOD 
agencies?
    Admiral Cebrowski. To ensure we share results across Services and 
DOD agencies, and to make sharing of results smoother and transparent 
for national and military customers, many of the recommendations of the 
Space Commission have been implemented.
    With respect to better integration of space, a new office has been 
created, the Directorate of National Security Space Integration. This 
office is tasked to exploit the best practices of the military space 
and the NRO communities to make the world's best space forces even 
better.

                       support for space programs
    6. Senator Bill Nelson. Secretary Wolfowitz and Admiral Cebrowski, 
the Department of Defense budget request indicates a range of support 
for increased or improved capabilities in space to support military 
operations-particularly in intelligence, geo-location, and 
communications. This is clearly a ``payload-centric'' view of military 
space. Yet there is significant risk to assured access to space given 
available technology and the cost of space lift. What is the role of 
space lift in military transformation?
    Secretary Wolfowitz. The Department is addressing the assured 
access to space risk through the Evolved Expendable Launch Vehicle 
(EELV) program coupled with developing a joint technology development/
demonstration effort with NASA for reusable launch vehicles. The EELV 
with the two launch service providers provides the Department and the 
Nation assured access to space. In addition, the EELV program is 
reducing the costs associated with space launch by 25-30 percent over 
current U.S. capabilities. Space lift provides the means with which to 
achieve the Department's transformational goals and objectives while 
maintaining assured access to space for critical national security 
payloads that support current and future military operations.
    Admiral Cebrowski. The United States must have assured and 
affordable access to space in order to expand or even sustain space 
operations. Assured access to space is crucial to military 
transformation for many reasons: to enable future innovative ways to 
support combat forces; to counter threats from unfriendly space-capable 
nations; and to create the conditions for a commercial market that may 
ultimately support and drive rapidly evolving space technologies. This 
means being able to place useful payloads in all relevant Earth orbits 
with high probability of launch success and operation-on-orbit within 
hours--instead of months or years. It also means the ability to operate 
flexibly in and through space to accomplish both manned and unmanned 
missions in support of U.S. national and military objectives.
    Any alternative architecture of space lift and sub-orbital and on-
orbit vehicle capabilities, that truly enables military transformation, 
must allow the Nation to: Perform new missions in space; provide a 
responsive and resilient space lift/operations capability that is 
increasingly acknowledged as militarily essential; permit an escape 
from the current vicious cycle of cost-weight-size-complexity-risk-
delay that frustrates the current development process for space 
systems; offer the potential for future commercial exploitation that 
not only would result in vast new commercial opportunities, but would 
also drive development of even better space system capabilities.

    7. Senator Bill Nelson. Secretary Wolfowitz and Admiral Cebrowski, 
what role will greater DOD-NASA cooperation and costs sharing play in 
achieving this transformation?
    Secretary Wolfowitz. The Department is currently cooperating with 
NASA in a number of critical space technology areas to include 
environmental sensing, hypersonics, rocket propulsion, etc. These 
continued cooperative efforts, which include cost sharing, will enable 
the transformational technological advances to be achieved in a more 
timely manner. This is done through the use of the two organizations' 
strengths in a manner that maximizes the technological advancement 
achieved while minimizing the cost and time associated with developing 
new capabilities.
    Admiral Cebrowski. DOD and NASA are forging an important 
partnership in the development of a new reusable launch vehicle 
program, the Space Launch Initiative (SLI). No national vehicle can or 
should be developed without factoring in military needs, mission models 
and rapid launch capabilities for national security. The rapid access 
to space typified by military launch needs could have a direct bearing 
on future follow-on vehicles that could have commercial cargo-carrying 
capabilities.
    An integrated technology plan between the Air Force and NASA will 
help spur the development of a second generation reusable launcher. As 
DOD's executive agent for space, the Air Force will take a lead role 
for partnering with NASA in the SLI program. A fully reusable vehicle 
would have a significant role in both military space applications as 
well as civil human space flight missions. This makes a partnership and 
cost-sharing arrangement between DOD and NASA a good fit.

                       field exercises/resourcing
    8. Senator Bill Nelson. Dr. Krepinevich, in your organization's 
report titled: ``Lighting the Path Ahead: Field Exercises and 
Transformation'', you highlight the critical role that field exercises 
and experiments contribute towards evaluating military innovations 
during the transformation process. Of specific interest is your 
assessment in that report of the shortage of facilities to support 
comparable joint field exercises that enable experimentation in support 
of transformation. Could you please highlight your concerns and the 
impacts that you have identified as a result of your study and provide 
some recommendations?
    Dr. Krepinevich. During the latter stages of the Cold War, the U.S. 
military invested in a number of high-fidelity training facilities that 
greatly enhanced the value of its field training. For example, the 
Army's NTC prepared brigade-size units for combined arms mechanized 
warfare against a Soviet-style adversary. Similarly, the Air Force and 
Navy put their pilots through Red Flag and Top Gun training, 
respectively.
    Comparable facilities do not yet exist to support high-fidelity 
field exercises focused on the anti-access/area-denial threat discussed 
in this report. A Joint National Training Center (JNTC) is needed to 
enable both service and joint transformation field exercises. In 1997, 
the National Defense Panel (NDP) recommended that this facility be 
established as part of its transformation strategy. The recently 
completed Quadrennial Defense Review (QDR) promises to ``explore the 
need'' for such a center.
    A principal barrier to creating a JNTC involves acquiring a sizable 
expanse of land along the U.S. littoral. Current efforts to train at 
the operational level find Joint Forces Command (JFCOM) and the 
services attempting to link together various individual training 
centers (e.g., the western training ranges in Millennium Challenge 
2002) along with computer simulations. Even if such a tract of land 
could be made available, the U.S. military would likely experience 
restrictions on its ability to radiate along the radio frequency 
spectrum, due to the potential for disrupting commercial electronic 
activity.
    Several potential concerns arise from the absence of training 
facilities capable of supporting field exercises focused on preparing 
U.S. forces for emerging challenges at the operational level of 
warfare. One is that it promotes emphasis on training at the tactical 
level of warfare. To be sure, such training is both necessary and 
desirable. But that training should be strongly informed by the 
warfighting concepts that are developed based on what is learned while 
training at the operational level of warfare. Absent significant 
training at the operational level-especially in a period of 
transformation--there exists the danger that tactical-level training 
will suffer.
    A second concern rests with the U.S. military's ability to 
determine the feasibility of operational concepts in which information 
architectures play a major role. If the military is precluded from 
exercising its command, control, communications, computers, 
intelligence, surveillance, and reconnaissance (C\4\ISR) architectures 
at the operational level of warfare, it may prove difficult to 
determine, with any great degree of confidence, the progress being made 
(or not made) in realizing such critical concepts as NCW or in 
campaigns against threats that involve C\4\ISR efforts spread over 
large areas (e.g., extended-range strikes against critical mobile 
targets). Nevertheless, there is some cause for optimism. The Commander 
in Chief (CINC) of JFCOM's efforts to link the western training ranges 
together to support field exercises and experimentation may represent 
the first step toward creating a JNTC.
    As for urban operations, current training centers, such as the 
Joint Readiness Training Center at Fort Polk, Louisiana, offer 
facilities more characteristic of the terrain found in small towns. 
They possess neither the size encountered when operating in an urban 
environment, nor many of its unique terrain features (e.g., high-rise 
buildings, sewer and subway systems, etc.). A Joint Urban Warfare 
Training Center (JUWTC) should be created along the lines called for by 
the NDP. Such a center could also be employed to conduct high-fidelity 
exercises to prepare a wide range of government and non-government 
organizations to deal effectively with terrorist attacks on U.S. urban 
centers, especially those involving the covert use of chemical, 
biological or radiological weapons.
    It will also be desirable to conduct transformation field exercises 
that address the growing challenge of maintaining space control or 
defending against an attack at the strategic level on the U.S. national 
information infrastructure. Yet it is far from clear how this might be 
accomplished. There seems to be no comparable training infrastructure 
for these missions that might provide the kind of high-fidelity 
training for anti-access/area-denial and urban operations that could be 
available at a JNTC or JUWTC, respectively. Enabling these kinds of 
field exercises represents another major challenge for the U.S. 
military's transformation effort.

    9. Senator Bill Nelson. Dr. Krepinevich, how important in your view 
is joint simulation?
    Dr. Krepinevich. Early in the transformation process, joint war 
gaming and simulations can be excellent means for identifying new 
systems and force elements and developing new operational concepts as 
well as weeding out those that have serious flaws. For example, the war 
games conducted at the Naval War College in the early 1920s proved 
extremely useful in developing promising operational concepts for the 
use of naval air power, as well as the associated measures of 
effectiveness. Given the perennial environment of limited time and 
resources under which military organizations must operate, well-
designed and executed joint war games and simulations can provide an 
invaluable service to those charged with developing a program of field 
exercises as part of a larger transformation strategy.

                  space transformation/field exercises
    10. Senator Bill Nelson. Admiral Cebrowski, for non-space systems, 
the military regularly trains the way it expects to fight. That same 
adage has to apply to space. How do you intend to incorporate military 
space systems into the transformational training exercises and the 
joint operational battlefield exercises?
    Admiral Cebrowski. As a result of the recommendations of the Space 
Commission and the Secretary of Defense's memorandum directing the 
Chairman, Joint Chiefs of Staff to promulgate guidance directing 
CINCJFCOM to establish a Space Applications Experimentation Cell at 
JFCOM, CINCJFCOM has created a Space Applications Experimentation Cell 
with the goal of overseeing the innovative experimentation of space 
programs with joint applications. Further, both JFCOM and U.S. Space 
Command routinely include space systems in the conduct of training 
exercises and joint operational battlefield exercises.
    To support joint battlefield training exercises and 
transformational training exercises, the Department must explore a 
variety of methodologies that employ modeling and simulation tools 
based on measures of merit and effectiveness that will help quantify 
the effects of space-based capabilities. The military currently uses a 
variety of tools to simulate space environments in support of 
exercises, experiments and wargames. These tools must be modernized to 
take into account the missions and tasks that space systems can 
perform. Robust modeling and simulation tools can help military 
commanders learn how to cope with the loss or temporary interruption of 
key space capabilities, such as the Global Positioning System (GPS), 
satellite communications, remote sensing or missile warning 
information.
                                 ______
                                 
             Questions Submitted by Senator Strom Thurmond
                  rapid transformation of armed forces
    11. Senator Thurmond. Secretary Wolfowitz, last fall, in your 
opening statement for the hearing on Quadrennial Defense Review, you 
indicated that: `` To meet the challenges over the horizon, we must 
transform our Armed Forces more rapidly, more creatively, and even more 
radically than we had previously planned.'' The current thinking 
appears to be that the transformation is a long-term process. Do you 
still believe that transformation must be done quickly? If not, what 
has changed since last fall?
    Secretary Wolfowitz. In addition to the thinking articulated in DPG 
2003 and the QDR last fall, it was clear that the tragic events of 
September 11th would provide additional momentum for the transformation 
of our military forces. Those imperatives for transformation suggested 
by the strategic environment remain in force today, and compel our 
sense of urgency. However, we recognize today as we did last fall that 
transformation will not occur overnight. Transformation is a continuum 
and not a discrete event or envisioned end state. As indicated by the 
actions of our forces in Afghanistan, we have clearly made progress 
toward transformation. However, the effort to prepare our forces for 
the future remains a long-term endeavor. The capabilities demonstrated 
in Afghanistan are just a glimpse of how far we still can go. 
Transformation of the U.S. military is not just a single 
transformation, but a host of transformations that, measured in the 
aggregate, will radically alter the size, shape, and capabilities of 
our forces over an extended period of time.

                        scope of transformation
    12. Senator Thurmond. Secretary Wolfowitz, although the focus of 
transformation is on the military capabilities, we must also consider 
the transformation of the technology base and industrial base to 
support the transformation. What is the Department doing to address the 
transformation of the technology base and industrial base?
    Secretary Wolfowitz. Our defense transformation clearly requires a 
strong and innovative technology base; and a healthy, competitive, and 
efficient industrial base.
    We must continue our commitment to science and technology (S&T) 
programs which generate leading edge technologies. We are aligning our 
S&T investments with the desired capabilities stated in the Secretary's 
Quadrennial Defense Review. Our objective will be to stimulate more 
innovative thinking on ``war winning'' technologies and concepts, and 
transitioning these to the warfighter. Funding issues notwithstanding, 
the challenge in maintaining the technology base is the balance between 
a program that takes the long-view with broad investments and a program 
that remains responsive to immediate needs such as combating terrorism 
technologies.
    As we improve the network-centric warfighting capabilities needed 
for the 21st century, DOD needs to attract a broader industrial base--
particularly those grounded in information technology and 
telecommunications and networking--to our business. We also must 
continue to evaluate key industry sectors and subsectors to identify 
capabilities needed to meet current and future defense requirements. We 
will continue to work with industry to explore and promote improvements 
to policy and procedures. We will continue to implement business 
practices that result in more effective and efficient government/
industry collaboration.

                        eliminating duplications
    13. Senator Thurmond. Admiral Cebrowski, our military forces are 
based on historical precedences. Today, if a nation were building an 
army from scratch, there probably would not be four distinct military 
services each supported by distinct medical, logistical, and 
intelligence groups. Admiral Owens, our former Vice Chairman of the 
Joint Chiefs of Staff, suggests that combining the medical, logistical, 
and intelligence groups should be the first step in transforming our 
military service. What are your views regarding the consolidation of 
the support services?
    Admiral Cebrowski. I believe there are significant organizational 
implications to be examined as the Department implements transformation 
initiatives. As the Department transitions to information age 
operations it is no longer clear what constitutes support functions 
versus combat functions. Those lines are increasingly blurring to such 
an extent that traditional support roles of intelligence and logistics 
can no longer be divorced from pure combat operations. All of these 
elements are increasingly interrelated. This change is being driven by 
the robust networking of the force and the resultant high level of 
shared awareness that will increasingly characterize information-age 
operations. This is an area amenable to additional research and 
examination to understand the implications that Network Centric Warfare 
offers to traditional tenets of warfare. From this research effort will 
likely follow new organizational constructs we cannot now envision.

                            cultural change
    14. Senator Thurmond. Admiral Cebrowski, as you indicate in your 
statement, the most difficult challenge to transformation is to change 
the culture in an organization. Historically, we have used education as 
the focal point to implement change, but as you indicate it takes a 
long time. What changes, if any, are you advocating to the military 
education system to begin the change in the mindset of our future 
military leaders?
    Admiral Cebrowski. A number of changes are planned to transform the 
Department's military education and training system. First, the CJCS, 
the Commanders of Combat Commands, and services will develop an initial 
set of joint core competencies linked to service core competencies. 
Second, the Joint Staff, National Defense University, USJFCOM, 
services, and senior service colleges will develop a core curriculum 
for Joint Military Leader Development and begin distribution of those 
courses on line. Third, the CJCS, USD (P&R), and the services will 
establish service requirements to track joint education, training, and 
operational experiences of military personnel. Fourth, USD (P&R), USD 
(AT&L), ASD (C\3\I), the CJCS, USJFCOM, and DOD components will develop 
a common operational architecture that provides interoperability of 
live, virtual, and constructive training systems across the Department, 
leading to the creation of a joint national training capability 
environment that meets service, interoperability, and Commander of 
Combat Commands training needs. This will include accelerated 
development of common standards, implementation guidelines, and digital 
libraries for Advanced Distributed Learning (ADL) and Job Performance 
Technologies, as well as methods to adapt distributed training to 
multi-language and multi-cultural environments. Fifth, USD (Policy), 
the CJCS, USJFCOM, and USD (P&R) will develop a common set of 
interagency, interagency, intergovernmental, and multinational 
``Joint'' Mission Essential Tasks. Military education and training are 
an integral part of the DOD transformation initiative. In order to 
respond efficiently and effectively to the emerging dynamic, 
capabilities-based environment, education and training form the 
foundation for the long-range transformation process by changing the 
culture of DOD.

                         institutional mindset
    15. Senator Thurmond. General Pace, a frequent criticism of the 
Department of Defense is that each of the military departments focuses 
on its service and not on jointness. If the Department truly wants to 
transform the manner in which it operates, it must overcome this 
institutional mindset. In your view, have the services abandoned their 
parochial view on the modernization and transformation of the 
Department of Defense? What are examples of this change?
    General Pace. The institutional mindset of the services is not 
necessarily something that is entirely bad or that must be abandoned in 
order to facilitate transformation. Each service has the responsibility 
to develop and maintain distinct capabilities in support of our 
National Security and National Military Strategies. These distinct 
capabilities help to ensure that the United States remains dominant 
across the full spectrum of military operations anywhere on the globe.
    Elimination of these service unique core competencies should not be 
the goal, rather their integration into a fully interoperable joint 
force. To do this, we need to develop a new mindset with respect to the 
way we operate. In the past, we compartmentalized the battle area into 
sea, air and land sections and then proceeded to fight as though each 
section belonged exclusively to a specific service. We now need to 
think in terms of a joint battle space. This joint battle space will be 
populated by systems from each service that are designed to operate 
seamlessly--based on shared joint operational concepts.
    The work we have been doing with the Joint Requirements Oversight 
Council (JROC) over the last 2 years is one example of how we are 
balancing the services' need to create and maintain unique capabilities 
with the Department's need to advance joint warfighting. For years, the 
JROC validated individual service requirements without the benefit of 
an overarching concept it could use to help fit the pieces together. As 
a result, systems were designed, built, and modernized to optimize 
individual service needs. The ability of these systems to operate 
efficiently in a joint environment was not always the up front 
priority. Consequently, we've had to back into system interoperability 
and ``jointness.''
    We are transforming the military by changing the mindset that the 
best solution is the one that always optimizes individual service 
requirements. We are changing the mindset by advancing joint 
capabilities and assessing all systems against a set of ``joint'' 
standards for interoperability at the front end of the requirements 
generation process. The JROC is working to advance DOD transformation 
by shifting its focus from merely validating individual systems to 
developing joint operational concepts and architectures that establish 
objective standards for assessing system interoperability. These 
standards will facilitate realization of joint capabilities over 
service-centric solutions.

                            role of the jroc
    16. Senator Thurmond. General Pace, as the Vice Chairman of the 
Joint Chiefs of Staff, you also chair the Joint Requirements Oversight 
Council (JROC). In my view, the JROC plays a critical role in 
determining the pace of transformation in terms of enhancing our 
military capabilities. What general area of the technology 
transformation do you consider the most critical to improving our long-
term warfighting capability and how can the JROC influence this effort?
    General Pace. In his annual Posture Statement to Congress, General 
Myers stated that: The area offering the greatest promise for 
significant transformation in the near term is information sharing. The 
U.S. military is an ``information intensive'' force. Much of the 
military superiority we currently enjoy rests in our ability to achieve 
and maintain a decisive advantage in accessing, gathering, exploiting, 
and acting on information. Our ability to arrive at and implement 
better decisions, faster than an opponent can react, rests on the 
accumulation, processing, and understanding of vast quantities of 
operational and tactical information.
    We have taken the first steps toward fully integrating our 
capabilities to find and strike targets of all types, using networks of 
sensors and shooters to achieve desired effects. Our goal is to allow 
dispersed forces to collaborate on operations and give our warfighters 
the ability to achieve effects rapidly and decisively--with a speed and 
accuracy that will overwhelm an adversary's ability to respond. This 
goal is achievable if we creatively use existing and planned 
information technologies.
    The JROC is working to achieve this goal by supporting the 
Chairman's priorities to address shortfalls in joint command, control, 
communications, computers, intelligence, surveillance, and 
reconnaissance (C\4\ISR). Although we have made significant recent 
improvements, current deficiencies in joint C\4\ISR result in gaps and 
seams between the combatant commands and between the services, which 
must be eliminated. Integrated C\4\ISR will give our Joint Task Force 
Commanders the necessary tools to fully integrate their combat power.
    One of the concepts we are exploring to help work this issue is the 
idea of a Standing Joint Force Headquarters (SJFH). This operational 
level headquarters unit will serve as a tool to help push greater 
interoperability. It will have a robust C\4\I architecture that all 
future weapons platforms or communications systems, and any upgrades to 
existing systems would have to plug into. The JROC is currently working 
to establish these architectures, which it will use to drive the 
development of joint interoperable systems as well as integration of 
current (legacy) systems. An example of one materiel solution the JROC 
is currently working to support the SJFH concept is the Deployable 
Joint Command and Control (DJC2) program. DJC2 is an acquisition plan 
to field a command and control headquarters in support of the joint 
commander's need for a scalable, modular, rapidly deployable (air/sea) 
command post with reach-back capability, and protection from chemical 
and biological agents. These types of solutions are designed to advance 
the joint capabilities of our forces by enhancing our ability to gather 
and process information required to support better, more timely 
decisions.

                             legacy forces
    17. Senator Thurmond. General Kernan, you state that we need to 
update legacy systems to continue to fight today and to bridge our 
modernization gap as we move forward with transformation. Since funding 
is already a constraining factor in the transformation effort, what 
legacy systems would you update to provide us the most critical 
capabilities while we transform to the next generation of weapons 
systems or technology?
    General Kernan. The interoperability and integration of prioritized 
legacy fielded capabilities is critical to joint, coalition, and allied 
operations and we work closely with all ClNCs/Services/Agencies (C/S/A) 
to ensure critical warfighting deficiencies are identified and 
prioritized for JROC endorsement and resolution. Currently, 
identification and comprehensive solutions to resolve critical JTF C2 
Legacy interoperability shortfalls is a priority. Specifically, system 
improvements which would enhance situational awareness, intelligence 
processing and distribution, combat identification, shared common 
operational picture, Information Management/Information Assurance and 
Joint Data Network are examples of specific areas of required legacy 
improvements. Furthermore, to support transformation these improvements 
must be accomplished within the command and control concept and 
framework of the Standing Joint Force Headquarters command and control 
concept and infrastructure to ensure near term improvements align with 
future warfighting initiatives.

                             maneuver areas
    18. Senator Thurmond. General Kernan, your proposed joint training 
exercise, Millennium Challenge 2002, which is a major milestone toward 
transformation, calls for using a broad array of land and ocean 
training areas. What constraints in terms of population and 
environmental encroachment are you facing in planning this exercise?
    General Kernan. Encroachment constraints limiting our Joint 
exercise are those that impact our host military installations on a 
daily basis. For example, various encroachment factors on the 17 miles 
of beach front at Camp Pendleton restrict the number of simultaneous 
landings to only three Landing Craft Air Cushion (LCAC) transports, 
which is half the number required. As a result, we must land the 
remaining force administratively and later combine them at a nearby 
boat basin. This limits our scope of operations and minimizes the 
realism necessary for effective tactical training.
    Another major constraint impacts the southern corridor at Fort 
Irwin. This area is designated as critical habitat for the Desert 
Tortoise and cannot be used for maneuver training. Maneuver training is 
restricted to the central corridor, which is not large enough to 
provide realistic training and reduces the amount of training that can 
be conducted at Fort Irwin. Fort Irwin will also be constrained by air 
quality restrictions and by the reduced number of radio frequencies. 
Air quality restrictions prohibit training with graphite smoke and the 
particulate matter standards restrict the amount of smoke that we can 
generate via other methods. These restrictions have a direct impact on 
training realism. The loss of radio frequencies, due to the proximity 
of Los Angeles and other larger cities in Mexico, also impacts the 
ability of the forces to freely communicate with one another.
    Restrictions on the use of the Navy's important Anti-Submarine 
Warfare (ASW) sensor prevented us from being able to demonstrate the 
contribution of this system toward improving ASW proficiency in 
littoral waters, a key to providing Joint Force access to denied areas 
and for assisting in Navy transformation efforts.
                                 ______
                                 
               Questions Submitted by Senator John McCain
                     cornerstone of transformation
    19. Senator McCain. Secretary Wolfowitz, I realize that 
transformation means different things to different people and is not 
only measured in modernization of weapon systems. Given President 
Bush's promise to transform our military, what in your opinion, is the 
cornerstone of transformation in the President's 2003 defense budget? 
What specific program stands out in your mind as one that best 
exemplifies transformation?
    Secretary Wolfowitz. Transformation and modernization are not 
either or choices. We must do both. One cannot neglect either 
modernization or transformation. The lion's share of Department budgets 
will still be spent on operations and modernization in coming years and 
not transformation. The fraction to be spent on transformation will be 
very small in comparison but equally significant. That said we have to 
rebalance the investments being made in critical areas. Investments in 
information must increase. Our networking capability must go up, our 
sensor capabilities must increase. Additional funding could be used to 
accelerate unmanned aerial vehicle and unmanned combat air vehicle 
programs as well as unmanned undersea sensor efforts. The Department is 
in the midst of a massive transformation into the information age so 
there must be a wholesale rebalancing of investments. What will become 
highly prized are those capabilities that improve positioning, sensing 
and networking. Systems or capabilities that are big, slow and 
ponderous will hold less and less value for the future military.

                        research and development
    20. Senator McCain. Admiral Cebrowski, would you agree that 
military transformation requires some level of experimentation in both 
strategic thinking and weapons development?
    Admiral Cebrowski. Experimentation is essential for defense 
transformation. The emerging security environment presents many 
uncertainties and strategic issues. Each issue involves alternative 
concepts for addressing that issue and each concept calls for 
particular capabilities. A variety of combinations of operational 
arrangements and weapons also may be used to provide the requisite 
capabilities. Only through experimentation will we learn and gain 
enough experience to understand what approaches comprise the best way 
to allow U.S. Armed Forces to extend and broaden their competitive 
advantage and rapidly adapt to the uncertainties inherent in 
information age warfare.
    Experimentation should be widespread, planned and executed in a 
decentralized manner, guided by principles of competition and 
cooperation in the information age. One aspect of force transformation 
is to embed a culture of experimentation throughout the defense 
establishment. Every organization should adopt a culture of examining 
and reexamining its practices and experimenting with new approaches to 
extend its capabilities at every opportunity. Operators, technologists, 
and systems integrators should work in teams, rapidly prototyping 
technology and co-evolving organizational and procedural change to 
achieve desired capabilities. Spiral transformation that significantly 
improves operational capabilities is possible in months, rather than 
decades, by transforming current acquisition approaches and the 
development of joint mission capabilities.

    21. Senator McCain. Admiral Cebrowski, do you feel that the level 
of research and development (R&D) funding in the 2003 defense budget is 
adequate to propel our military into the 21st century?
    Admiral Cebrowski. The fiscal year 2003 defense budget request of 
$369 billion, balances the immediate threats to our national security 
with the long-term process of military transformation. The fiscal year 
2003 defense budget request contains a significant increase of $12 
billion in R&D funding over fiscal year 2001. It includes a substantial 
investment of $9.9 billion for S&T programs. If approved, the requested 
R&D funding will provide the needed funds intended to begin yielding 
the desired transformational effects necessary to propel our military 
into the 21st century. Examples of such transformational effects are 
major leaps in military capabilities that are likely to occur in the 
discovery and development of new technologies funded in S&T programs.

    22. Senator McCain. Admiral Cebrowski, with respect to the Navy's 
amphibious warfare capability, it seems to me that the proposed LHD-9 
is not a very transformational program especially considering that it 
is the exact same hull of the current LHA class that is based on a 
1950s design. It seems to me that if the LHA(R) class ship is built to 
have a lifespan of 50 years with no further R&D invested, then LHD-9 
will be a 100-year-old design when it is decommissioned in the 2050 
timeframe. The Navy would not develop an aircraft carrier (CVN), 
destroyer (DD), or submarine (SSN) without a robust R&D effort, so 
where is the R&D funding for a major amphibious ship like LHA(R)? Is 
the amphibious Navy being relegated to non-transformational status?
    Admiral Cebrowski. The major transformational impact in 
expeditionary warfare will be a function of the modular capabilities, 
which will change the nature of the battle space for the expeditionary 
forces. Transformational capabilities in sensing and networking 
relevant operational information will allow agile effects based 
operations leveraging joint mission capabilities originating both 
within and outside the littoral region. Manned and unmanned sensors and 
countermeasures will produce an asymmetric information advantage for 
U.S. and coalition forces. It can be anticipated that the systems and 
maneuver elements that deploy from the amphibious ship will be changed 
repeatedly during the planned 40-year service life of the LHA(R). 
Exciting developments in hull forms, power and propulsion systems are 
being explored which appear to have unique applicability to littoral 
operations. The most beneficial application of all of these 
transformational concept/technologies will be as a complement to the 
LHA class of amphibious ships, which can be thought of as one of the 
containers expeditionary warfare comes in. An equally valid alternative 
view is that high speed vessel technology could be further exploited as 
a means to broaden the capabilities base and as a means of delivering 
ground force combat power. After this approach, as older ships left the 
inventory, a different capability could be substituted or added 
yielding a broader mix of capabilities. This is a fruitful area for 
further study.

                            joint operations
    23. Senator McCain. General Kernan, our military's performance in 
Afghanistan during Operation Enduring Freedom has been remarkable. The 
ability of our Army, Navy, Air Force, and Marine Corps to work 
seamlessly together has been key to that performance. Obviously, joint 
operations are going to be critical to success in the future. Can you 
give me some specific examples of programs in the President's budget 
that are directly related to help our Armed Forces work together?
    General Kernan. Operation Enduring Freedom demonstrated many joint 
military capabilities and successful cases of transformational efforts 
that typify our Armed Forces working together. Specific examples of 
programs in the fiscal year 2003 President's Budget include:
    1. The Joint Direct Attack Munitions (JDAM) has been used 
extensively in Afghanistan. This joint munition is deliverable by 
multiple models of Navy and Air Force aircraft. The Joint Direct Attack 
Munitions does not replace any existing weapon system; rather, we take 
a low cost weapon and couple it with a high tech kit to make a weapon 
with high accuracy, all-weather, autonomous, conventional bombing 
capability
    2. Unmanned Aerial Vehicles (UAV) made a significant operational 
impact and promise even greater advantages in the future. As you are 
aware we have had stellar success with UAVs in finding hostiles in 
Afghanistan and creating increased situational awareness for commanders 
and troops in the field without placing additional personnel at risk in 
the air or on the ground.
    3. Deployable Joint Command and Control--a program for new land- 
and sea-based joint command and control centers that can be easily 
relocated as tactical situations require--is under development by the 
Navy. Deployable Joint Command and Control is aligned with Joint Forces 
Command's development of the Standing Joint Force Headquarters, the 
Chairman of the Joint Chief's priority transformation initiative. Taken 
together, these two initiatives exploit new operational and 
organizational concepts and technology to reduce the ad-hoc nature of 
current joint operations and planning times. These capabilities will 
significantly enhance integration, interoperability and operational 
execution.
    4. Joint Multi-TADIL School (JMTS) located at Ft. McPherson, GA 
provided critical joint tactical data link (TADIL) training to the 
Joint Interface Control Officers (JICO). JICC-D personnel redesigned 
the existing Operations Southern Watch data link architecture and added 
the new architecture for Operation Enduring Freedom.
    5. Joint Communications Support Element (JCSE) based at MacDill AFB 
provided rapidly deployable, robust operational communications suites 
to the CINCs, and the joint task force commanders. The JCSE team 
configured and modified their high-speed multiplexers in order to feed 
Intelligence Surveillance and Reconnaissance (ISR) data to the major 
HQs in theater.
    6. Joint Warfighting Analysis Center located in Dahlgren, VA has 
been a vital asset in current Enduring Freedom operations. Joint 
Warfighting Analysis Center capabilities are intrinsically linked to 
the way we plan and fight across all spectrums of conflict with nodal 
analysis of effects-based precision targeting options for our combatant 
commanders.
                                 ______
                                 
                Questions Submitted by Senator Bob Smith
                         training and education
    24. Senator Smith. Secretary Wolfowitz, as I understand it, the 
transformation process is a multi-pronged approach to change the way we 
fight. You need to change the organizational structure, change the way 
it thinks about national defense and warfighting and change the 
institutional or cultural mindset. To date, we have seen changes in DOD 
organizations--changing BMDO to MDA; changes in DOD guidance 
documents--the Defense Review, Defense Planning Guidance, and the 
Nuclear Posture Review; and changes in some technologies and weapons. 
These all seem to be steering the DOD complex in the direction of 
``transformation.''
    It seems to me that people need more and more time to get 
operationally proficient in a more complex world, a more complex 
operational arena, and a more lethal world. Once you have done this, I 
believe you will have made significant progress in changing the mindset 
of the institution. What is being done to change the training and 
education and subsequent employment and rotation of the people within 
the DOD to keep up with the increasingly rapid pace of combat 
operations?
    Secretary Wolfowitz. Training and education transformation will 
enable the overarching DOD transformation. The Department's vision for 
training transformation is significantly different from those used to 
conduct training today. The approach outlined in the Strategic Plan for 
Transforming DOD Training (March 1, 2002) emphasizes the mission 
requirements of the combatant commanders focused in terms of the 
training needed to support the Combatant Commanders requirements, 
missions, and capabilities, while preserving the ability of services to 
train on their core competencies. The focus of training transformation 
is to better enable joint operations in the future. Joint has a broader 
context than the traditional military definition of the term. Joint 
training includes training, education, and job-performance.
    Strategic goals for training transformation include: comprehensive 
and systematic joint training focused on the operational requirements 
of the Combatant Commanders and linked to readiness assessment; robust, 
networked, live, virtual, and constructive training and mission 
rehearsal environment that enables DOD to build unparalleled military 
capabilities; and acquisition and other supporting processes that 
identify interfaces and integrates between training systems and 
acquisition, logistics, personnel, military education, and command and 
control processes.
    As the Department increases emphasis on the training requirements 
of combatant commanders, the services' training commands, in meeting 
their Title 10 obligations, must find ways to maintain a balance 
between training for near-term operations and those in the future. In 
addition to supporting service core competencies, transformed training 
must be coherent and applicable across the full spectrum of joint, 
interagency, intergovernmental, and multinational operations.

                           review structures
    25. Senator Smith. Secretary Wolfowitz, it seems to me a critical 
component of a transformation of the Department's weapons programs is a 
rethinking of the review structures and processes that are used to 
forge and define the programs. Recently the Department has announced a 
new development paradigm, spiral or evolutionary acquisition, and a 
revised review structure for the missile defense program, a move that I 
fully support, and a new structure that I believe better characterizes 
the proper method of development. Yet, the new paradigm and structures 
have come under considerable criticism, both from within the Department 
itself and from some in Congress. It seems there are those who are 
comfortable with the onerous review structures of years past that do 
not want to see real change. What is being done to ensure the 
``transformation message'' is driven down into the Department through 
the bureaucracy to the program manager in the field ?
    Secretary Wolfowitz. DOD is committed to transforming our 
capabilities to suit the unique demands of the 21st century threat and 
we recognize we must also transform our processes and policies to 
support these changes. Of course, if our policies are not communicated 
to the work force, they will be of little value. Evolutionary 
acquisition, the key to speeding the acquisition of transformational 
capabilities to our warfighter, is a good example of how this policy 
was communicated to the community. First, we defined evolutionary 
acquisition in our acquisition policy document as the preferred 
approach. Second, the Department's leadership is committed to 
supporting evolutionary acquisition and that is apparent in various 
speeches, conferences, and fora to the workforce. Third, we also 
communicate via electronic and paper publications. Finally, we use 
training to reinforce our message. The use of evolutionary acquisition 
policies have been thoroughly integrated into every aspect of the 
Defense Acquisition University curriculum and we are developing 
distance learning training to ensure the information is available on 
the desktop of every member of our community.

    26. Senator Smith. Secretary Wolfowitz, is the entire development/
review structure being redefined to allow all Department programs to 
utilize the approach being used on missile defense?
    Secretary Wolfowitz. No. The special nature of missile defense 
calls for a non-standard approach to acquisition. The Secretary of 
Defense has approved a streamlined executive oversight and reporting 
process in order to substantially reduce decision times for missile 
defense.

    27. Senator Smith. Admiral Cebrowski, as I'm sure you will agree, 
the trick here is not only to accomplish a ``one-time-good-deal'' 
transformation of the Department but to establish a paradigm of 
continuous review and change for the better. Part S&T and technology 
efforts within the Department with an eye toward taking the promising 
ideas and concepts and maturing them using the evolutionary development 
process to quickly get them into the hands of the warfighter.
    I have heard countless times from my constituents that such a 
review process either doesn't exist or is badly broken with respect to 
the Small Business Innovative Research (SBIR) efforts. Innovative 
concepts that are awarded SBIR contracts are taken only so far along 
the development path, and at some point the service or component that 
would ultimately utilize the concept should take over the final stages 
of development and fielding into the operational forces. Apparently, 
there is no structured review process to ensure the operational arms of 
the services have insight into the SBIR efforts, provide resources in 
the Future Years Defense Plan, and revise concepts of operation to 
integrate the efforts into doctrine. Are you aware of this deficiency? 
If so, what is being done to ensure the Department gets the most `` 
bang for its S&T buck'' and uses promising innovative concepts?
    Admiral Cebrowski. The Office of Force Transformation is working on 
a new process to enable the co-evolution of concepts and technologies 
and consequently catalyze relevant innovation. Technology search 
throughout the national and defense laboratories, academia and the 
commercial sector will be coordinated with conceptual thought for the 
transformed DOD. Where concepts and technologies are a potential match, 
we will embark on a process of development of transformation articles, 
``prototype-like capabilities'' to be iteratively investigated in 
operational or limited objective experimentation. This will enable us 
to explore the ramifications of the new concept/technology and provide 
a metric for assessing fitness for the future Through this initiative 
we will provide a customer for an S&T community whose most advanced 
products have often been forced to queue-up behind ongoing acquisition 
programs until our technological head-start is gone. We can also 
pressurize the pipes in the operational experimentation process, which 
needs surrogate future capabilities to enable evaluation of new 
concepts. With these tools we can build our own future.
    The Office of Force Transformation is exploring strengthening 
relationships with angel investors and venture capitalists to help 
bridge the SBIR-FYDP funding gap and to get warfighters early access to 
technologies being developed in start-ups. Essential to closing this 
funding gap will be getting new technologies into the hands of 
operators through the transformation articles. The key leverage 
imparted is that they will help people see the range of possibilities 
for performing operations in truly new ways that abstract discourses on 
innovative ideas cannot.
    There are currently several programs also trying to bridge the 
SBIR-FYDP gap. The Air Force's Warfighter Rapid Acquisition Process and 
the Army's Rapid Acquisition Process bridge the gap to allow for a 
smoother development process for the most promising of technologies. 
The Navy SBIR program concludes with a forum bringing together the 
small businesses and public and private investors and customers. Also, 
the fiscal year 2002 Defense Appropriations Bill directed the creation 
of a non-profit Army venture capital corporation.

                             space systems
    28. Senator Smith. Secretary Wolfowitz, it is clear that the 
Department is becoming more and more dependent on space systems in the 
prosecution of its wars. Indeed, the U.S. economy is also increasingly 
dependent on space systems. I applaud the Department for adopting many 
of the recommendations of the Space Commission, which includes dual-
hatting the Under Secretary of the Air Force, Peter Teets, as both the 
Under Secretary and the Director of the National Reconnaissance Office, 
and also making him the Milestone Decision Authority for Space. I have 
met Mr. Teets and believe he is the right person for the job at an 
incredibly important time. Given the vast increase of space system 
requirements, as well as the cost and complexities of space systems, 
all now under the Air Force, why does the Department still allocate 
funding to the services in a roughly equivalent percentage?
    Secretary Wolfowitz. Fiscal guidance provided to the DOD Components 
is provided in such a way as to meet the direction provided in the 
Defense Planning Guidance. Final decisions on the final allocation of 
resources to the DOD Components is made by the Secretary of Defense 
following Defense Resource Board deliberations. Necessary changes to 
the DOD Component budgets to meet the DPG are provided as a result of 
DRB deliberations.

    29. Senator Smith. Secretary Wolfowitz, I have data from 1995 
forward that shows the three services get roughly 25-30 percent of the 
DOD budget. Shouldn't the Air Force be provided higher funding amounts 
to take into consideration its shouldering much of the burden of space 
programs?
    Secretary Wolfowitz. I am confident that the Air Force is getting 
sufficient funding to handle its responsibilities for space programs. 
Thousands of factors determine the funding shares of each service in 
any given year. Changes in the Air Force's space program funding--this 
year or in future years--would not necessarily produce a corresponding 
change in its budget share.
                                 ______
                                 
              Questions Submitted by Senator Rick Santorum
                           encouraging change
    30. Senator Santorum. Secretary Wolfowitz, Admiral Cebrowski, and 
Dr. Krepinevich, it has been argued that for military transformation to 
take place, there needs to be an organizational climate that encourages 
vigorous debate regarding the ways in which war may change and the 
impact of those changes on the military organization in question. That 
is, you need a climate that encourages change, wants the organization's 
future to be different from its past, and that welcomes change. 
Historically, this has been rare in the both the military and the 
business world. How best can we stimulate or prod the services into 
updating their core competencies?
    Secretary Wolfowitz. Under the oversight of the Senior Executive 
Council (SEC) and the Business Initiative Council (BIC), we have 
directed the services and Department agencies to review their core and 
non-core competencies. To aid in this analysis we are using a decision 
tree methodology that helps us determine our core competencies and 
explore the possibility of outsourcing non-core competencies and 
explore the possibility of outsourcing non-core competencies. We have 
emphasized several important themes throughout this analysis:
    (1) Transfer military personnel performing business functions to 
warfighter jobs.
    (2) When outsourcing decisions are made, consider A-76 and 
alternatives to A-76.
    We are working with the Office of Management and Budget to identify 
Pioneer Projects as prototype processes for A-76 alternatives.
    Admiral Cebrowski. Researchers have written that because 
institutional culture is usually the last thing to change, it is the 
first effort that must be undertaken in any organizational 
transformation. That effort begins and ends with leadership. Effective 
transformation leadership encourages innovation and intelligent risk 
taking. Leadership must own the vision for transformation. 
Additionally, we must incentivize those activities of discovery--
operational concept development, experimentation, and operational 
prototyping, to name a few--that will allow us to create the future 
from the unknown.
    Dr. Krepinevich. There are a number of ways to promote a climate 
that encourages and welcomes change. Permit me to elaborate on two.
    A Critical Mass of Senior Leaders: Military transformation requires 
a critical mass of support from senior military and civilian leaders 
who are, themselves, advocates of change. I have yet to find a single 
case of military transformation that was effected without this kind of 
critical mass. Moreover, by its nature, dramatic change in large 
military organizations almost inevitably involve, a long-term process 
that spans a decade or more. However, the U.S. military's institutional 
practices typically find senior leaders rotated out of their 
assignments every 3 or 4 years. While this rotation cycle may work well 
for leaders whose responsibilities are near term oriented (for example, 
the regional CINC who is responsible for the immediate warfighting 
mission in his area of operation), the transformation mission is one 
that can be accomplished only over a relatively long period of time.
    It is not surprising, then, that military organizations that have 
successfully transformed have almost always had a few key senior 
leaders serve an extended tour of duty, often double or even triple the 
length of a typical flag (i.e., general or admiral) officer tour in 
today's U.S. military. During the German army's transformation to 
blitzkrieg, for example, the head of its shadow general staff, General 
Hans von Seeckt, served 7 years in that position. The American Navy's 
exploitation of naval aviation was shepherded by Vice Admiral William 
Moffett, who remained head of the Navy's Bureau of Aeronautics for 12 
consecutive years. On the other hand, the tour of duty for the CINC 
JFCOM remains the same as those for CINCs who are primarily responsible 
for meeting immediate warfighting requirements. The absence of extended 
tours of service for transformation-minded senior U.S. military leaders 
serving in key positions (e.g., CINC JFCOM) should give pause to those 
who are concerned about joint transformation field exercises in 
particular and the prospects for transformation in general.
    Joint Field Exercises: One reason why military transformations 
typically require a decade or so to bring about is that they must 
overcome the resistance of large organizations to major change.
    This is especially true with respect to the U.S. military, which 
must contend with the additional burden of its remarkable success, and 
which today is undisputedly the world's premier fighting force. Thus, 
aside from convincing the U.S. military that transformation is 
necessary, its members, especially the officer corps, must also be 
convinced that transformation is possible, and that the military is 
proceeding down the right transformation path. Properly structured 
field exercises, involving actual forces in an environment that is as 
close to actual operations as possible, are arguably unsurpassed in 
their ability to generate support, and even enthusiasm, for 
transformation within the officer corps. History shows that such 
maneuvers are important in convincing the officer corps-in a way that 
no war game or simulation ever could have-that they were onto something 
special, that a dramatically new and more effective way of conducting 
military operations was indeed possible. In short, past exercises have 
helped to sustain momentum for transformation and to institutionalize 
it within the military services.

                            experimentation
    31. Senator Santorum. Secretary Wolfowitz, Admiral Cebrowski, and 
Dr. Krepinevich, what role does experimentation play in this process? 
That is, to what extent do the services need to experiment, discover, 
learn, test, and demonstrate new concepts, technologies, and 
applications?
    Secretary Wolfowitz and Admiral Cebrowski. Experimentation is 
essential. Results provide critical feedback to refine and ascertain 
feasibility of concepts, processes, organizations, and technology. This 
process provides for a frequent and continuous cycle of events where 
spiral learning can occur and be rapidly incorporated into joint force 
capabilities and operations. Concept-based experimentation in wargames 
and field exercises yields new ways to accomplish critical operations, 
missions and tasks. Transformation occurs most rapidly and effectively 
when military personnel and system developers work side-by-side on 
emerging concepts and operational challenges. A process of rapid spiral 
transformation employs experimentation to reach beyond current 
capabilities and learn what actions must be taken to reach the next 
step in achieving desired joint mission capabilities.
    Dr. Krepinevich. Field exercises, and the experiments they make 
possible, play a critical role in enabling military innovation and 
transformation, which can be defined as innovation on a grand scale or 
on a scale sufficient to bring about a change in warfare regimes (i.e., 
a military revolution). Properly undertaken, field exercises are a 
source of great competitive advantage. Their benefits include:

         Reducing uncertainty concerning how best to meet 
        emerging threats;
         Determining the proper mix of emerging and legacy 
        systems in the future force;
         Enabling militaries to develop and evaluate a wide 
        range of military capabilities and forms of operation, which 
        can be fully and rapidly developed if and when a threat 
        emerges;
         Crenerating successes that inspire enthusiasm for, and 
        sustain the momentum of, military transformation and 
        innovation;
         Complicating the planning of would-be enemies;
         Identifying intra-regime shifts--major shifts in the 
        military competition that, while they do not require large-
        scale transformation, do require the military to effect 
        significant innovation;
         Helping to avoid premature, large-scale production of 
        emerging systems that may appear promising but that actually 
        offer little in terms of military capability; and
         Identifying and solving the practical problems 
        inherent in developing new operations, force structures and 
        systems that cannot be determined through wargames and 
        simulations.

                           spiral development
    32. Senator Santorum. Secretary Wolfowitz, the Bush administration 
touts the concept of ``spiral development'' as a way to accelerate 
capabilities and get technologies and platforms in the hands of the 
warfighters faster. The idea, in concept, is to field a platform or 
device, allow the users to become proficient in the use of the system, 
and then add capabilities as they mature. How does this concept differ 
from traditional ``block modification'' processes where technological 
advances are added to an existing platform as part of technology 
``refresher'' or insertion?
    Secretary Wolfowitz. While evolutionary acquisition/spiral 
development is similar to the traditional ``block modification'' 
process you described in your question, it differs in several ways and 
provides significant advantages. In the past, ``block modifications'' 
were applied to fully capable systems which met all stated 
requirements. With spiral development, each spiral will incrementally 
provide greater capability approaching the satisfaction of all stated 
requirements. Evolutionary acquisition and spiral development are 
focused on providing the warfighter with an initial capability which 
may be less than the full requirement as a trade-off for earlier 
delivery. This offers greater reduction in our cycle time, not only 
speeding the delivery of advanced capability to our warfighters, but 
also allows fielding demonstrated technologies for both hardware and 
software in more manageable pieces.

                             interim force
    33. Senator Santorum. Dr. Krepinevich, under the leadership of Army 
Chief of Staff General Eric Shinseki, the Army has initiated a bold 
transformation strategy to better align the service to counter 21st 
century threats. A central element of this initiative is to make the 
service lighter and more easily deployed to a particular conflict. The 
Army has elected to undertake a phased approach to this transformation 
initiative by pursuing an ``interim force'' and by investing in 
technologies to support an ``objective force.'' In your opinion, does 
it make sense to invest in this interim force, thereby diverting 
critical resources away from the fielding of the objective force?
    Dr. Krepinevich. The Army plans to field the first of six (or 
perhaps seven) medium-weight brigades--or Interim Brigade Combat Teams 
(IBCTs)--in January 2003, with the first brigade ready for combat by 
May 2003.
    Several issues come to mind in considering the IBCTs' function as a 
bridge to the Army's Objective Force. One is that, the first four 
brigades to be reformed into the IBCT configuration are light 
formations. In short, if it succeeds in executing its conversions to 
IBCTs as planned, by the end of this decade the Army will be a heavier 
force than it is today.
    In depicting these new formations the Army states that ``The IBCTs 
two core qualities are high mobility . . . and its ability to achieve 
decisive action through dismounted Infantry assault.'' While the first 
quality would seem to conform to the Army's concept for the Objective 
Force, the second seems quite at odds with the Army Training and 
Doctrine Command's (TRADOCs) concept of a force that exploits its 
ability to ``see first, understand first, act first, and finish 
decisively.'' Why would an IBCT close with the enemy through infantry 
assault, save as a last resort? There are also concerns over the IBCTs' 
lack of organic air-defense support. If these formations are to deploy 
early in an anti-access/area-denial environment, it would seem 
essential that they be provided with air and missile defense assets.
    TRADOCs operational concept for the Objective Force states that 
``Objective Forces must have the organic capability to conduct vertical 
envelopment and tactical air assault . . .'' This capability seems 
consistent with the concept's emphasis on a non-linear battlefield and 
highly mobile forces capable of executing rapid maneuver to achieve 
positional advantage. The Army today relies on the AH-64 Apache attack 
helicopter, UH-60 Blackhawk helicopter, OH-58D Kiowa Warrior Scout 
helicopter, and CH-47 Chinook heavy-lift helicopter. The RAH-66 
Comanche helicopter is supposed to be fielded in 2008. However, there 
are no organic air assault assets in the IBCTs, although one of their 
principal purposes is to serve as a bridge to the Objective Force. 
Given the IBCT deployment timelines and relative paucity of high-speed 
air and sea-lift assets, if these formations do not have organic 
aviation assets, it is difficult to see how they will be provided with 
such assets early in a campaign.
    Finally, in periods of transformation, military organizations run 
the risk of buying large quantities of a promising system too early, 
and the Army is no exception. The risk of committing to a ``false 
start'' is demonstrated in the U.S. Navy's affection for its first 
carrier designed from the keel up, the Ranger, which was commissioned 
in 1934. Although some Navy leaders had pressed for construction of 
five Ranger-class carriers, wargame analysis and fleet problems soon 
indicated that, at roughly 14,000 tons, the Ranger was far too small to 
meet many of the demands of future fleet operations. As it turned out, 
the Essex-class carriers that formed the backbone of the Navy's fast 
carrier task forces in World War II each displaced nearly twice as much 
tonnage as the Ranger. The Army is running the risk that, should the 
Future Combat System (FCS) develop as hoped for, its Stryker IAVs--over 
2,000 systems--could represent a very expensive ``false start.''

                             short run risk
    34. Senator Santorum. Dr. Krepinevich, obtaining the resources to 
finance the Army's transformation has been difficult for the service. 
This resource shortfall has forced the Army to terminate a wide variety 
of weapons systems and recapitalization efforts. How much risk do you 
believe the Army can incur in the short run to achieve its 
transformational goals?
    Dr. Krepinevich. Senior defense decision-makers always confront the 
challenge of developing a strategy to minimize the overall--near-term 
and long-term--risks to our security. Those resources devoted to 
minimizing the immediate risk to our security risk cannot fund 
initiatives that promise to reduce the dangers we are likely to 
confront over the longer term, and vice versa. Since no one can predict 
the future, in the end, his or her judgment as to the appropriate 
balance between near and long-term risk is ultimately subjective.
    Given the description of the current and emerging threat 
environment set down in the Department of Defense QDR, it is my 
judgment that the Army can accept some additional near-term risk over 
and above what is currently called for in the defense program. Put 
another way, some near term risk can be accepted to ensure the service 
can transform to achieve the six critical operational goals set forth 
in the QDR, thereby substantially reducing long-term risk.

    35. Senator Santorum. Dr. Krepinevich, are you aware of similar 
efforts by the Navy/Marine Corps or Air Force to pursue a phased 
approach to transformation?
    Dr. Krepinevich. Transformation is, by its nature, a ``phased'' 
process in that it typically occurs over a number of years, often a 
decade or more. I am not, however, aware of efforts by the Navy/Marine 
Corps or the Air Force that would be comparable to the Army's plans to 
field an Interim Force.

                  investment in science and technology
    36. Senator Santorum. Secretary Wolfowitz, recognizing that the 
Army's objective force will be significantly different that the current 
force, are you convinced the Army is making the investments in S&T 
programs that will allow our warfighters to realize ``leap-ahead'' 
capabilities? That is, what type of investment are we making into 
enabling technologies such as engine and propulsion technologies--to 
include hybrid, batteries, power cells, etc.?
    Secretary Wolfowitz. I am convinced that the Army is committed to 
pursuing many critical enabling technologies that will provide our 
future warfighters with awesome capabilities. In particular, the Army 
has been investing and will continue to invest in electric and hybrid 
electric vehicle technology and the requisite component technology 
development. The goal of the Future Combat Systems (FCS) program is to 
provide a system of systems that is deployable, lethal, survivable and 
sustainable within this decade. Electric and hybrid electric vehicles 
will play a significant role in future military systems. In fiscal year 
2002 the Army will spend more than $18 million on development of the 
FCS engine, lithium ion high energy batteries, high power silicon and 
silicon carbide switches, electronic controllers/motors, and fuel 
cells/reformers. In fiscal year 2003 the planned investment will be 
more than $40 million in this area.

                              uav sensors
    37. Senator Santorum. Secretary Wolfowitz and Admiral Cebrowski, 
Senate Report 106-292, to accompany S. 2549, the National Defense 
Authorization Act for Fiscal Year 2001, set a goal that within 10 years 
one-third of U.S. military operational deep strike aircraft will be 
unmanned and within 15 years one-third of all U.S. military ground 
combat vehicles will also be unmanned. Recently, Air Force Secretary 
Jim Roche and Air Force Chief of Staff General John Jumper stated that 
they want more companies to compete in the UAV sensor market to achieve 
significant price reductions. They asserted that sensor costs are 
soaring due to growing demand and a shortage of competition. Sensors, 
according to Secretary Roche, are starting to dominate the cost of the 
vehicle. What steps can the Department of Defense take to encourage the 
development of new UAV sensors?
    Secretary Wolfowitz. UAVs have proven their military worth in 
recent operations, especially in their capability to loiter for 
extended periods over the battlefield. A major focus now is to improve 
the reconnaissance performance of these systems to enhance operational 
requirements and extend capabilities. This improves UAV system 
flexibility, but also increases cost for these upgraded sensor systems. 
Many sensor systems require state-of-the-art components in critical 
areas, and often these components have no corresponding equivalent in 
the commercial market. Cost control is a significant challenge for our 
highest performing sensor systems, such as those used on the U-2 and 
Global Hawk, due to limited competition and procurement quantities. 
Historically, sensor quantities have been insufficient to maintain a 
robust, competitive market for these systems and components. As an 
example, the Air Force is procuring only six new multi-spectral EO/IR 
U-2 sensors (SYERS 2). The multi-spectral focal plane array in this 
system has no commercial equivalent, and including spares, the total 
focal plane buy is only nine units. As part of our UAV Roadmap update 
activity, we are reviewing the current sensor technology development 
efforts for our UAV and UAV support activities, looking for areas where 
these critical components might be used by multiple sensor systems, 
both manned and unmanned. The Predator UAV sensor ball upgrade used 
this strategy, sharing development and production with a Navy 
helicopter upgrade. The Department will continue to encourage the 
incorporation of commercial technologies and standards, allowing 
increased competition, and reduced time to fielding. Encouraging 
competition will also open other potential operational capabilities for 
UAVs, and further extend their use to the warfighter.
    Admiral Cebrowski. An important difference in the concept of 
operations which will pertain to emergent unmanned systems will be the 
emphasis on more proximate sensors and effectors integrated into the 
scheme of maneuver of the operational forces. The distributed 
capability envisioned will break the paradigm of Low Density High 
Demand (LDHD) ISR/EW assets and supplement them with an array of the 
``the small, the cheap, and the many.'' Distributed elements employed 
as part of an expeditionary grid will incorporate inexpensive modular 
sensors/effectors which will exploit the asymmetric advantage of their 
unmanned nature to penetrate and position themselves close to potential 
adversaries in areas and times of operational interest. The sensor and 
effector packages will be simplified and exhibit great reductions in 
size and required power. The effects possible from their advantaged 
locations will be dramatically different from what can be achieved from 
stand-off ranges.
    In addition, using the Small Business Innovation Research (SBIR) 
program, DOD is working to develop affordable, advanced sensor 
technology that can be applied to both commercial and military space 
and manned/unmanned airborne systems. These technologies, which range 
from devices to complete systems, must also have other commercial 
applications, such as imaging, surveying, telecommunications and 
medical. Research and development for providing intelligence, 
surveillance and reconnaissance sensing capabilities for UAVs that 
sustain a ``continued presence'' are also a priority. Sensors need not 
be considered as large system. A multiplicity of smaller netted sensors 
leveraging the power of the collective and expeditionary in nature 
warrant further research.
    Complementary air and space sensors with differences in field-of-
regard, range, textural fidelity and latency are needed to give a 
complete and timely picture of the battle space, enable a timely 
precision response and enhance the warfighter's survivability. Areas to 
be focused on include:

         Space-based and manned/unmanned airborne radars with 
        advanced antenna designs and low-cost digital receivers
         Active and passive electro-optical systems with multi-
        spectral and hyper-spectral sensors and multi-function laser 
        radars
         Navigation aids with inertial navigation components 
        and satellite-based global positioning
         Automatic target recognition and sensor data fusion

                     office of force transformation
    38. Senator Santorum. Secretary Wolfowitz and Admiral Cebrowski, 
does the Office of Force Transformation have the ability to apply funds 
to a particular transformational process/technology/application it 
deems worthy of financial support?
    Secretary Wolfowitz and Admiral Cebrowski. Yes. The OFT will use 
funds to seek prospects for differences in kind and for new operational 
concepts that could generate leaps in relative military effectiveness. 
By way of example, OFT will use funds to assess transformational 
implications in the conflict in Afghanistan. Specifically, some funds 
will be used for research, information gathering, and analysis to flesh 
out the transformational implications of the extensive and effective 
use of ground observation and target designation. The operational mode 
demonstrated in Afghanistan highlights the possibility of extraordinary 
precision and timeliness of air responses. Further analysis may provide 
evidence that we are approaching a ``tipping'' point where the 
effective use of ground observation and target designation posit 
significant differences in kind and point to a much-expanded form of 
the operational concept demonstrated in Afghanistan. A specific example 
of how the office has provided funds is to transformational initiative 
is with PACOM. Resources were provided to catalyze a Combatant Commands 
experimentation effort. This is in keeping with our efforts to create a 
broader, more robust, experimentation base. A decentralized approach 
vice centralized.

                    private research and development
    39. Senator Santorum. Admiral Cebrowski, while the Federal 
Government has the most funding to contribute to the development of new 
military capabilities, clearly the private sector can contribute 
resources (manpower and funding) to help speed this process along. What 
efforts can the Department of Defense initiate to encourage more 
independent R&D by private industry?
    Admiral Cebrowski. Research and development efforts leading to 
discoveries in government and private laboratories are likely to be a 
leading source of future technological development. The Department is 
exploring two initiatives to encourage more independent R&D by private 
industry. The first one deals with the issue of intellectual property. 
Many private companies do not believe that adequate safeguards to 
protect intellectual property exist as part of doing business with the 
Federal Government. Private industry needs to be assured that their 
technological discoveries and intellectual property will be adequately 
protected. Hence, the Department must work on creative ways to protect 
intellectual property and creating a greater incentive for industry to 
not only do business with the Federal Government, but also increase the 
likelihood of their investing their own resources in conjunction with 
government sponsored and funded research programs. Therefore, the 
Department is working on ways and means to enhance the protection of 
intellectual property via government contracting and education of the 
acquisition workforce.
    Second, the Department is addressing the challenges and barriers 
associated with inserting leading-edge technologies into defense 
systems later in the acquisition cycle. As structured today, cost, 
schedule, and performance, as established goals at contract award, are 
put at risk if the program office is asked to integrate new 
developments not previously planned for--after the design baseline is 
established. If we can devise structural and program incentives to more 
easily permit technological insertion, even during the production 
phases, it would potentially offer some advantages. Not only would it 
result in earlier fielding of more advances systems and capabilities, 
but it would possibly create an earlier market demand for new 
developments coming out of private industry R&D laboratories.

    40. Senator Santorum. Secretary Wolfowitz, recently, Admiral Vernon 
Clark, Chief of Naval Operations, stated that the Navy needed a more 
effective partnership with industry. Admiral Clark stated that, ``I am 
concerned about the industrial base and I am concerned about investment 
strategies that look like sine-cosine curves. I just don't know how 
anybody can make that work.'' Do you share Admiral Clark's concerns? 
Are his concerns just limited to the Navy or are the other services and 
the Office of the Secretary of Defense just as vulnerable to this 
situation?
    Mr. Wolfowitz. The Department does share Admiral Clark's concern 
over fluctuations in all Defense budget categories. DOD and all the 
services have long recognized that budget variations from year to year 
cause extensive disruptions in the planning, execution, and cost of our 
programs, both in the Department and services, and particularly at our 
contractors. Annual budget fluctuations are one of the most significant 
causes of the cost growth at our contractors, who are ultimately the 
ones who have to implement the costly processes associated with 
layoffs, rehiring, and retraining employees to accommodate such 
variations. With this comes inefficiencies in development and 
manufacturing processes, difficulties sustaining or developing sources 
for components or services, component price changes, and both short- 
and long-term variations in overhead costs. Often hidden, but very 
significant impacts of budget fluctuations are the adverse affects on 
our contractors' ability to retain key employees, and to attract key 
suppliers at the sub-tier level, many of whom seek a higher level of 
stability than that offered by defense budgets.
    History is clear that the most affordable way to maintain a healthy 
industrial base to develop and produce our systems at the lowest 
possible total program cost is to maintain a stable pace. The 
Department and the services work extensively to assess, reduce and 
control the effects of such fluctuations, both in our budget 
preparations and, to the extent we can, in subsequent appropriations.

                             basic research
    41. Senator Santorum. Secretary Wolfowitz, with the exception of 
the fiscal years 2001 and 2002 funding spike, funding for Department of 
Defense basic research has been consistently underfunded. Congress 
shares some of this blame as it has taken funds from these crucial 
accounts and used them to pay for the near-term modernization or 
procurement needs of today's military.
    I am concerned with the level of basic research funding in the 
United States. Without increased investment in Department of Defense 
basic research, the number of graduate student opportunities to pursue 
Department of Defense research cannot increase. A decline in the pool 
of scientists, engineers, mathematicians, and skilled technicians will 
prevent the Department of Defense from achieving success in the pursuit 
of ``leap-ahead'' technologies. Could you address the importance of DOD 
basic research (and S&T programs) in realizing ``leap-ahead'' advances 
in military capabilities? In addition, please address how funding 
levels for DOD basic research impact not only military capabilities, 
but also the pool of skilled scientists and engineers who will drive 
innovation and change.
    Secretary Wolfowitz. DOD-sponsored basic research is a wellspring 
of new knowledge and understanding that underpins the development of 
future military capabilities. Prior basic research enabled the 
generation of today's revolutionary military capabilities, including 
the Global Positioning System, stealth, night vision, and precision 
strike. We expect equally important new capabilities to emerge over the 
long term from today's investments in basic research in areas such as 
those relevant to nanotechnology, smart materials and structures, 
information technology, human-centered systems, compact power, and 
biomimetics. Our support for basic research today will help to give 
future leaders the technological edge they need to deter potential 
adversaries and, if necessary, conduct military operations, much as we 
reap benefits from prior defense research in the current Operation 
Enduring Freedom.
    Basic research has an additional long-term benefit to the DOD 
because universities are the predominant performers of basic research 
in this country and university research is inextricably linked with the 
training of scientists and engineers in fields important to national 
defense. DOD-supported basic research thereby helps to ensure the 
future availability of talent needed for defense research and 
development.

    42. Senator Santorum. Secretary Wolfowitz, do you believe that the 
levels of S&T funding requested by the administration for fiscal year 
2003 are adequate to propel transformation throughout the services?
    Secretary Wolfowitz. Yes, I believe our fiscal year 2003 request 
for S&T funding is adequate to support our transformation initiative. 
We increased the DOD S&T funding request from the previously planned 
$7.8 billion for DOD S&T to $8.8 billion in the amended fiscal year 
2002 President's budget request. Our fiscal year 2003 S&T budget 
request is for $9.7 billion: plus an additional $213 million in Defense 
Emergency Response Funds for combating terrorism technology. This 
addition of $213 million increases the total fiscal year 2003 budget 
request for DOD S&T to $9.9 billion. However, because of the 
significant increase in the Department's total funding in fiscal year 
2003 and the need to add dollars to fully fund acquisition programs and 
health care etc. the percentage of the budget request devoted to S&T is 
less than 3 percent.

    [Whereupon, at 12:31 p.m., the committee adjourned.]

                                 
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