[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


                                     

                         [H.A.S.C. No. 110-63]
 
   STRUCTURE, PROCESS AND TOOLS FOR IMPROVING DEPARTMENT OF DEFENSE 
                               MANAGEMENT

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                             JUNE 26, 2007

                                     
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                   HOUSE COMMITTEE ON ARMED SERVICES
                       One Hundred Tenth Congress

                    IKE SKELTON, Missouri, Chairman
JOHN SPRATT, South Carolina          DUNCAN HUNTER, California
SOLOMON P. ORTIZ, Texas              JIM SAXTON, New Jersey
GENE TAYLOR, Mississippi             JOHN M. McHUGH, New York
NEIL ABERCROMBIE, Hawaii             TERRY EVERETT, Alabama
MARTY MEEHAN, Massachusetts          ROSCOE G. BARTLETT, Maryland
SILVESTRE REYES, Texas               HOWARD P. ``BUCK'' McKEON, 
VIC SNYDER, Arkansas                     California
ADAM SMITH, Washington               MAC THORNBERRY, Texas
LORETTA SANCHEZ, California          WALTER B. JONES, North Carolina
MIKE McINTYRE, North Carolina        ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California        KEN CALVERT, California
ROBERT A. BRADY, Pennsylvania        JO ANN DAVIS, Virginia
ROBERT ANDREWS, New Jersey           W. TODD AKIN, Missouri
SUSAN A. DAVIS, California           J. RANDY FORBES, Virginia
JAMES R. LANGEVIN, Rhode Island      JEFF MILLER, Florida
RICK LARSEN, Washington              JOE WILSON, South Carolina
JIM COOPER, Tennessee                FRANK A. LoBIONDO, New Jersey
JIM MARSHALL, Georgia                TOM COLE, Oklahoma
MADELEINE Z. BORDALLO, Guam          ROB BISHOP, Utah
MARK UDALL, Colorado                 MICHAEL TURNER, Ohio
DAN BOREN, Oklahoma                  JOHN KLINE, Minnesota
BRAD ELLSWORTH, Indiana              CANDICE S. MILLER, Michigan
NANCY BOYDA, Kansas                  PHIL GINGREY, Georgia
PATRICK MURPHY, Pennsylvania         MIKE ROGERS, Alabama
HANK JOHNSON, Georgia                TRENT FRANKS, Arizona
CAROL SHEA-PORTER, New Hampshire     THELMA DRAKE, Virginia
JOE COURTNEY, Connecticut            CATHY McMORRIS RODGERS, Washington
DAVID LOEBSACK, Iowa                 MICHAEL CONAWAY, Texas
KIRSTEN GILLIBRAND, New York         GEOFF DAVIS, Kentucky
JOE SESTAK, Pennsylvania
GABRIELLE GIFFORDS, Arizona
ELIJAH E. CUMMINGS, Maryland
KENDRICK B. MEEK, Florida
KATHY CASTOR, Florida
                    Erin C. Conaton, Staff Director
                Andrew Hunter, Professional Staff Member
               Jenness Simler, Professional Staff Member
                   Margee Meckstroth, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2007

                                                                   Page

Hearing:

Tuesday, June 26, 2007, Structure, Process and Tools for 
  Improving Department of Defense Management.....................     1

Appendix:

Tuesday, June 26, 2007...........................................    39
                              ----------                              

                         TUESDAY, JUNE 26, 2007
   STRUCTURE, PROCESS AND TOOLS FOR IMPROVING DEPARTMENT OF DEFENSE 
                               MANAGEMENT
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Hunter, Hon. Duncan, a Representative from California, Ranking 
  Member, Committee on Armed Services............................     2
Skelton, Hon. Ike, a Representative from Missouri, Chairman, 
  Committee on Armed Services....................................     1

                               WITNESSES

Brinkley, Paul, The Deputy Under Secretary of Defense for 
  Business Transformation........................................     5
England, Hon. Gordon R., Deputy Secretary of Defense.............     5
Patterson, David, The Principal Deputy Under Secretary of Defense     4

                                APPENDIX

Prepared Statements:

    England, Hon. Gordon.........................................    43

Documents Submitted for the Record:

    General and Flag Officer Provisions in Law Under Title 10, 
      United States Code, submitted by Secretary England.........    51

Questions and Answers Submitted for the Record:

    Mr. Cooper...................................................    88
    Mr. Hunter...................................................    87
    Mr. Kline....................................................    88
    Mr. Skelton..................................................    87
   STRUCTURE, PROCESS AND TOOLS FOR IMPROVING DEPARTMENT OF DEFENSE 
                               MANAGEMENT

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                            Washington, DC, Tuesday, June 26, 2007.
    The committee met, pursuant to call, at 10:07 a.m., in room 
2118, Rayburn House Office Building, Hon. Ike Skelton (chairman 
of the committee) presiding.

 OPENING STATEMENT OF HON. IKE SKELTON, A REPRESENTATIVE FROM 
        MISSOURI, CHAIRMAN, COMMITTEE ON ARMED SERVICES

    The Chairman. Ladies and gentlemen, today's hearing is 
focused on improving the management of the Department of 
Defense (DOD).
    And we have with us today the Deputy Secretary of Defense, 
Gordon England, a seasoned executive, one of the most capable 
managers serving in government. We appreciate him being with 
us. Also David Patterson, the Principal Deputy Under Secretary 
of Defense; Paul Brinkley, the Deputy Under Secretary of 
Defense for Business Transformation.
    These gentlemen will outline the management challenges 
confronting the Department and tell us how they are addressing 
them.
    The Department of Defense has acknowledged that it has 
significant management challenges, including managing people 
and business systems at over 3,000 locations worldwide, 
managing $1.4 trillion in assets and $2 trillion in 
liabilities, managing annual operating costs in excess of $700 
billion.
    For example, in 2006, the Department had information 
sufficient to obtain either a clean or qualified audit opinion 
on only 21 percent of its assets and 77 percent of its 
liabilities. This results partly from the fact that the 
Department still has over 770 legacy business systems in 
service, few of which are capable of sharing information with 
each other.
    The Department has some high-profile programs to correct 
these management problems. However, these programs themselves 
have experienced some challenges.
    In 2005, the Government Accountability Office (GAO) 
designated the Department's approach to business transformation 
as high risk. GAO has previously designated the Department's 
business systems modernization and financial management 
modernization as high risk in 1995.
    These programs are extremely complex undertakings involving 
literally thousands of moving parts. Their success depends on 
careful management. And yet GAO has also identified significant 
management weaknesses which have impeded the Department.
    Congress has worked to spur change in the Department's 
business processes. The Fiscal Year 2005 Defense Authorization 
Act mandated the creation of the Defense Business Systems 
Management Committee to oversee the business functions.
    The Fiscal Year 2006 Defense Authorization Act required the 
Secretary of Defense to conduct a study of whether to establish 
a chief management officer for that Department. The study was 
performed by the Institute for Defense Analysis, which is 
called the IDA, and was delivered to Congress in December of 
last year.
    The House and Senate passed defense authorization bills 
that take different approaches to implementing the IDA report's 
recommendations.
    The House bill would provide significant flexibility to the 
Secretary of Defense in structuring his management team. 
However, it would hold the Department accountable for meeting 
essential management goals. These goals would include 
modernizing and integrating the Department's business systems 
to better support the warfighter, preparing the Department's 
books to pass an independent financial audit.
    The Senate bill is more prescriptive in assigning specific 
management roles to certain individuals at the Department.
    Hopefully, we will leave here today better prepared to 
finalize our legislative work with the Senate on this topic 
when the time comes for conference.
    And, Mr. Secretary, we look forward to hearing from you, as 
well as your colleagues, Mr. Patterson, Mr. Brinkley.
    And now I call my friend, my colleague, my friend from 
California, Mr. Hunter.

    STATEMENT OF HON. DUNCAN HUNTER, A REPRESENTATIVE FROM 
    CALIFORNIA, RANKING MEMBER, COMMITTEE ON ARMED SERVICES

    Mr. Hunter. Thank you, Mr. Chairman.
    And to our guests, thanks for being with us today.
    And thanks to the chairman for holding this hearing. I note 
the importance of today's topic.
    The structure, processes, and tools for improving DOD 
management is sometimes overlooked. National security experts, 
members of the media, and government officials often focus on 
other important, more pressing issues, such as the ongoing 
operations in Iraq, Afghanistan, and elsewhere.
    And yet these current topics are indeed critical. And in 
fact they oftentimes relate to our capability in the 
warfighting theaters. And they obviously deserve our attention.
    American success in military endeavors over time depends in 
large part on the long-term health of the DOD. So in holding 
this hearing, we are exploring the business-related plans, as 
articulated by senior Defense officials for that organization's 
transformation investments and future health.
    Recently, a Department of Defense official noted that the 
Department's budget for Fiscal Year 2007, including the 
supplemental, is more than $700 billion.
    The Department holds $1.4 trillion in assets and $2 
trillion in liabilities. And both of these figures are more 
than the assets and liabilities of Wal-Mart, IBM, and Exxon 
combined.
    It has over 3 million employees, operates more than 4,000 
information technology systems, and has over 3,000 locations 
worldwide. When people refer to corporate DOD, there can be 
little doubt that this Department is, in so many ways, like a 
corporation, with the American people as its shareholders.
    As a result of its size and scope of responsibilities, the 
DOD faces unique management challenges. Congress has recognized 
this fact, has often pushed the Department to improve its 
management, and has even imposed management-related 
requirements on the Department.
    For example, the Fiscal Year 2005 National Defense 
Authorization Act mandated the creation of a Defense Business 
Systems Management Committee to coordinate DOD business 
initiatives, update the business enterprise architecture, and 
help with integration of transformation efforts.
    More recently, in the Fiscal Year 2006 National Defense 
Authorization Act, Congress required a study on whether the 
Department should have a Deputy Secretary of Defense for 
management. The Institute for Defense Analysis released its 
study last December, and the GAO has also made recommendations 
on this topic. In fact, both the House-passed and Senate Armed 
Services Committee versions of the Fiscal Year 2008 Defense 
Authorization Bill contain language that reflected some 
recommendations from IDA and GAO.
    The House version, for example, directed the Secretary of 
Defense (SECDEF) to designate a senior DOD official with 
management duties, establish essential management goals, and 
adopt a management structure that defines roles, processes, and 
accountability to achieve those goals.
    This language provides the management flexibility that is 
necessary for such a large corporation while forcing Defense 
officials to develop and clearly articulate to Congress the key 
management goals that will help the long-term health of the 
department.
    Secretary England, Mr. Patterson, and Mr. Brinkley, again, 
thanks for coming today to talk about this important topic. And 
I look forward to hearing how the current and planned corporate 
Department of Defense can provide our warfighters with the best 
training, equipment, and other support needed to accomplish the 
missions required of them.
    And I would also like to hear and understand your thoughts 
on the IDA and GAO recommendations, as well as your positions 
on the House and Senate language. Clearly, Congress would like 
to help the Department in this area, so let us know how we can 
do that.
    And, Mr. Chairman, thanks for holding this hearing.
    I might just conclude on this note. There are stories in 
the media this morning about the Iraqi army, statements made by 
American trainers that the Iraqi army is not yet equipped to 
the degree that it should be to be able to undertake a handoff 
of military responsibilities in important parts of Iraq, to 
take this handoff of the security burden from American forces 
to Iraqi forces.
    And it is interesting, the equipment that is discussed is 
not technical stuff. It is trucks, it is some armor, some 
carriage capability, ammunition, rifles, basic communications 
gear.
    And I would like your comments, too--and, gentlemen, you 
all have provided great service to our country, and we 
appreciate that--like your thoughts about how we can effect 
quickly a handoff or a supply of basic military equipment that 
will allow the Iraqi forces to at least have the equipment that 
they need to take a basic handoff in the warfighting areas, the 
contentious zones in Iraq. That seems to me to be a pretty 
basic thing.
    And looking at the fact that we have--for example, the 
Marines have had for a long time a very large contingent of 
Marine Armor Kit (MAK)-kitted Humvees, and they now have 
replaced those with 114s. And, at least in one location, they 
had 1,800 MAK-kitted Humvees parked, the fact that they had a 
lot of five-ton trucks that were superseded by the new 
acquisition of seven-ton vehicles.
    The idea that we can't effect a handoff of basic military 
equipment to the Iraqi military and that that might be the long 
pole in the tent of transferring the security burden I think is 
troublesome. So if you could speak to that, that would be 
great.
    So once again, Secretary England, thank you for your many 
years of great service to our country and your support for this 
committee and all the good things you have done for our 
country.
    And, Mr. Brinkley and Mr. Patterson as well, welcome. I 
look forward to your comments.
    The Chairman. Thank the gentleman.
    Secretary England, as I understand it, you have opening 
remarks. And as I also understand, the other two gentlemen, Mr. 
Patterson and Mr. Brinkley, are here to support or answer 
questions. Is that correct?
    Mr. England. That is correct.
    The Chairman. Mr. Patterson and Mr. Brinkley, would you in 
25 words or less tell us about yourself before we call on 
Secretary England?
    Mr. Patterson.

   STATEMENT OF DAVID PATTERSON, THE PRINCIPAL DEPUTY UNDER 
                      SECRETARY OF DEFENSE

    Mr. Patterson. Thank you.
    The Chairman. And what you do.
    Mr. Patterson. I am the Principal Deputy Under Secretary of 
Defense for the Comptroller Shop. And the Office of the Under 
Secretary of Defense for Comptroller has the responsibility to 
organize and establish and present the Department's budget to 
the Congress, as well as maintain--I am sorry?
    Is it better now?
    The Chairman. Good. Thank you.
    Mr. Patterson. Well, we are the part that doesn't get 
necessarily the first of the technology, so you will have to 
excuse me for not being familiar with a button. [Laughter.]
    But as I was saying, we are responsible for providing the 
Congress with the budget and all the justification material 
that goes with it as it is provided to us by the components.
    Additionally, and more importantly in the long run, I would 
say that we are responsible for the processes and the systems 
that present a healthy financial management circumstance for 
the taxpayer of this country.
    The Chairman. Thank you so much.
    Mr. Brinkley.

   STATEMENT OF PAUL BRINKLEY, THE DEPUTY UNDER SECRETARY OF 
              DEFENSE FOR BUSINESS TRANSFORMATION

    Mr. Brinkley. Yes, thank you. I serve as the Deputy Under 
Secretary of Defense for Business Transformation.
    This office was created under the leadership of Mr. England 
in 2005 to address many of the shortcomings that you mentioned 
in your opening testimony, sir, regarding our ability to 
integrate and modernize the business processes and systems of 
the Department of Defense.
    We have also established--since the Office of Business 
Transformation was created within OSD, we have established the 
Business Transformation Agency, a focused group of career 
professionals augmented by industry expertise that is overseen 
by my office.
    And we also direct a task force working in Iraq to address 
business issues and shortcomings that affect our forces in 
theater and, as a supplemental element of that, working to 
bring industrial leverage to help the economic revitalization 
of Iraq in support of the mission.
    So thank you for the opportunity to speak here today.
    The Chairman. Thank you.
    And now, Secretary England, we appreciate your being with 
us, and we look forward to hearing your comments, please.

   STATEMENT OF HON. GORDON R. ENGLAND, DEPUTY SECRETARY OF 
                            DEFENSE

    Secretary England. So, Mr. Chairman, thank you. Mr. Hunter 
and members of the committee, thanks for the opportunity to be 
here today.
    I actually don't have this long opening statement. I 
thought I would, frankly, just make a couple of comments and 
then address your questions. I did provide a written statement 
which tried to provide my views on this subject. And hopefully 
that was of some help to the committee in advance.
    I also thank you for your willingness to help. Obviously, 
improving the efficiency and the effectiveness of the 
department is something we are all interested in. And myself 
and Paul and Dave and all the people in DOD work at that every 
single day. And we also appreciate the willingness of the 
Congress to help.
    Regarding the two bills, I guess the one question is which 
of the two bills do we prefer. I mean, we obviously prefer the 
House bill over the Senate bill because the House bill provides 
a lot more flexibility for the Department.
    That said, I don't believe, frankly, either bill is 
actually needed in the Department. The Department already has a 
lot of structure. If anything, we have too much structure, and 
we have a lot of rules and regulations that we go by.
    One of my initiatives when I came to this job, because I 
felt that we just had such a burden of rules, regulations, et 
cetera, that we started to reduce our own internal directives. 
So we have been working very hard to reduce our own directives 
and trying to shrink the bureaucracy as much as possible.
    As you commented, both Mr. Chairman and Mr. Hunter, this is 
an extraordinarily complex enterprise. We have 44 major 
operating commands. And if you look at just the Army itself, by 
the way, the Army has 7 combat training areas, 11 depots, 14 
institutes, 19 laboratories and 93 medical centers in addition 
to all of their 12 major commands, 11 direct reporting 
commands.
    So this is a huge enterprise. It is in 146 countries around 
the world. And we have 600,000 facilities, literally, around 
the country and around the world.
    Now it may be counterintuitive, but with that kind of 
enterprise, at least my judgment, my experience is, that you 
want to decentralize this operation as much as you can with the 
appropriate measures and metrics, that you know the health of 
the organization.
    So I am of a mind, when it comes to management, that less 
is better. That is, have the authority and responsibility, but 
move it down as far in the organization as you can, hold people 
accountable, and we provide the top level direction and the 
oversight.
    So there is a philosophy here in terms of how the 
Department should be managed.
    Another comment I will make is that everyone is always 
looking to ``change the organization.'' The organization is not 
nearly as important as the leadership and the people who 
populate that organization, so, frankly, my emphasis is getting 
the right people. The right people can withstand any 
organization, but not vice versa.
    So this is really about people in both our military and our 
civilian, which is most important to us. We do need to be 
effective. At the end of the day, what we do in the Department 
of Defense affects the welfare of our nation, and so 
effectiveness is important. And that is, by the way, the way 
you achieve efficiency.
    But we work at this every day. I believe there are 
fundamental questions about what the structure should be. But I 
will tell you, I am very hesitant to make significant changes 
without a really good pilot and understand the outcomes because 
my own experience is: It is very easy to destroy value and 
extraordinarily hard to create value. So I will tell you, I am 
very careful as we proceed.
    The other comment I will make is that the structure is not 
nearly as important as how you tie the structure together. So 
what I call horizontal integrating elements, and why we have 
DBSMC and the business transformation agency and why we have 
things like what I call the DAWG, the Deputies Advisory Working 
Group.
    We have put structure in place so that we get horizontal 
interconnects and so we get better awareness and understanding 
throughout the organization. And in my judgment, those 
approaches are far more valuable than anything we do with 
structure itself as to how we go integrate across the large 
structure that we already have. Look, that is the approach we 
have been on.
    I do want to, though, end at my last comment. This is about 
great people. And we are absolutely blessed as a nation. We 
have these wonderful, magnificent people who wear the uniform 
of our country and then we have these great Americans, 
civilians. And, if it wasn't for their work, we couldn't have 
our people at their frontline doing the job they do. So we are 
blessed to have great people. And that is really where we place 
our emphasis, providing an environment for every one of those 
people to excel every day for their nation.
    So, look, we would be happy, Mr. Chairman, Mr. Hunter and 
members, obviously, to discuss any aspect of this that you 
would like to talk about today, but I am anxious, so you know, 
I am not anxious to bring about change.
    I would much rather have a high degree of flexibility in 
the Department for both the Secretary and the Deputy to have an 
adaptable organization rather than one that is structured at 
any given point in time. So an adaptable, flexible 
organization, in my judgment, is hugely valuable for the 
country.
    And that would be all I have to say today, sir.
    [The prepared statement of Secretary England can be found 
in the Appendix on page 43.]
    The Chairman. Thank you so much.
    In my opening comments, I made reference to the fact that 
it is difficult to obtain audits in a good number of the 
sectors of your Department, so there is a gnawing question, Mr. 
Secretary: Why are so many elements of the Department, 
including the various services, that are unable to obtain clear 
audits for the record?
    Secretary England. Well, we are making progress, and I 
asked Mr. Patterson to do this more directly. But last year, I 
believe we had five or six of our components with clean audits, 
and we have a full-time team working on the audits. As you 
commented, I mean, we have enormous assets and liabilities, and 
so getting a clean audit has been difficult.
    But we have been working at it. I will let David talk in a 
little more detail about the clean audit process.
    By the way, we conduct, in the Department, like, 36,000 
audits a year. So we do a lot of auditing. But of course, a 
clean audit, that is at the macro level of both assets and 
liability.
    So, David?
    Mr. Patterson. Mr. Chairman, I think that that is really an 
important question because it is a question that a lot of folks 
ask.
    And I think that one of the things it is good to understand 
is that, for the past 60 years, we have used an audit approach 
that is based on the appropriations. And so we have accounted 
for all of the money that has been provided to the Department 
of Defense by appropriations, and then how it has been spent in 
that way.
    Starting in 2001, on the other hand, we have chosen to take 
on a much more conventional approach that you would find in the 
general accounting--accepted accounting principles, in that we 
are looking at the money that is being spent at the lowest 
level, and then working upward.
    I would point out that we have, in fact, had clean audits 
on 7 of our entities. And as you so rightly pointed out, 15 
percent of our assets, about $215 billion, approximately, 49 
percent of our liabilities, which amounts to $267 billion--but 
the important point of that is the progress that we have made 
in the last 5 years is in evidence by the fact that those seven 
entities represent an accumulated value in liabilities and 
assets that exceeds the amount of the liabilities and assets of 
the next government agency, which is Health and Human Services 
(HHS), which has gotten a clean opinion.
    So we are really plotting new territory here. We have got a 
good plan, we believe, in the financial improvement audit and 
audit readiness plan. It has been talked about by the GAO in 
positive terms. And we believe that we are on the road to a 
clean audit. And I think that is important because it is the 
way that people judge our financial management.
    The Chairman. Thank you.
    Mr. Hunter.
    Mr. Hunter. Thank you.
    Mr. Chairman, let me go quickly to this issue that I think 
is important to our country right now. It is a little bit off-
subject but a little bit on-subject too. And that is simply 
being able to move quickly to supply the warfighter.
    And again, I go back to the statements of the moment that 
are percolating out in the media, to the effect that America's 
military leadership in Iraq is saying, in so many words, that 
the Iraqi army doesn't have, at this point, the basics; that is 
trucks, transport, enough ammunition, small arms, et cetera. 
Which seems to be pretty simple stuff, pretty basic stuff.
    And against the backdrop of the transition that has been 
made by American forces in theater, and for example, the fact 
that the Marines, again, had parked at one time over the last 
several months some 1,800 MAK-kitted, that is armor-kitted 
Humvees, at one location, and that they had made a switch or a 
transition from five-ton to seven-ton trucks, which should, in 
theory, free up tons of five-ton trucks.
    The idea that we can't satisfy the requirements of this 
freshly minted Iraqi military with some of the handoffs from 
the American forces is troubling.
    And so, I guess my question would be, Mr. Secretary, do we 
have a system for doing some real basic things? Number one, 
ascertaining what we have over there? What is available? Are 
there some trucks that are parked in Kuwait or in Iraq that 
could be transferred over?
    Number two, what is the present bureaucratic circuit for 
getting that done? Does that have to be ID'ed by the 
acquisition bureaucracy back here in the States and then 
implemented, a transfer has to be made pursuant to a foreign 
arms sale?
    Can a leader, for example, a divisional leader or General 
Odierno or General Petraeus say, ``Hey, we have got this stuff 
parked over there. You guys in our Iraqi counterparts over here 
need them. Go get it?'' Or is it a fairly complex circuit that 
has to be followed to be able to make that handoff of 
equipment?
    Because that appears to me to be something that is crucial 
right now to warfighting success in those two theaters. And I 
would say one indicia of an effective system is one that can 
move quickly to do what you have to do in the warfighting 
theaters.
    So what do you think? Is this something that can be handled 
easily or is it pretty complex and pretty burdensome?
    Secretary England. Mr. Hunter, I would like to help you 
here, but, frankly, I just don't know the answer to those 
questions. That is really handled in Central Command (CENTCOM), 
it is handled in-theater.
    I do know that Congress provided funding for both training 
and equipping. I mean, that has been in the supplemental here 
the last couple supplementals. But, frankly, I just don't know 
the status. I don't believe it is a complex process.
    You are right, we have been upgrading vehicles now for 
literally four or five years and replacing vehicles, so you 
would tend to think there are vehicles available. But, frankly, 
I just don't know that, sir. So it would be just supposition, 
and I just can't provide detail for you.
    Mr. Hunter. Could you maybe take that for the record, Mr. 
Secretary, and----
    Secretary England. Definitely will. And we will try to get 
an answer to you today yet, Mr. Hunter, so we will have someone 
work that for you quickly. And, again, my apologies. I just 
don't know that system in-theater.
    [The information referred to can be found in the Appendix 
beginning on page 87.]
    Mr. Hunter. Appreciate that.
    And the last thing is, you know, we put together this law 
that enables SECDEF to sign his name one time and waive every 
acquisition reg on the book to get something to the warfighting 
theater if we are taking causalities, which we certainly are in 
Iraq and Afghanistan.
    That has only been used, I believe, twice. I think we used 
it for the little jammer a couple of years ago. We got 10,000 
jammers from Research and Development (R&D) into the field in 
70 days using that. And I think it was used one other time on 
the so-called crew-type jammer. But it hasn't been used since 
then.
    Are you up to speed on it?
    I guess my question, Gordon, would be this, because we rely 
on you so heavily and you have done such a great job for DOD. 
Are you satisfied that we are getting equipment into the field 
as quickly as we need to move it? And do you think we need to 
use that what I would call the rapid-equipping waiver? Do you 
think we are using it enough?
    Secretary England. Mr. Hunter, we know it is available. We 
use it whenever we need it.
    I mean, frankly, most of our lead time is not in the 
acquisition; it is literally in the build and the fielding and 
the equipping and the designing. So our new MRAP equipment, by 
the way--I mean, we are doing that as quick as industry can 
possibly build those new vehicles for us.
    So I would tell you there is a great sense of urgency. 
Every time there is a need identified in the field or any time 
we can perceive a need in advance, I mean, we crash those 
programs as quickly as we can.
    My view is that does work effectively. I mean, there is a 
great deal of heightened awareness by everybody. As you know, 
my close partner is Admiral Giambastiani, and so we work very 
closely together, the civilian and military leadership, being 
responsive and using everything at our fingertips to do that.
    I, frankly, don't see delays in the system. I don't see 
bureaucratic delays. I do see the inevitable delays of just 
adapting and building and designing, you know, the next 
generation of equipment to field for our men and women in 
combat.
    So there is, obviously, that inherent delay of just being 
able to build and supply, but I don't see that as being a 
system-type error.
    Mr. Hunter. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Dr. Snyder.
    Dr. Snyder. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here this morning.
    And, Secretary England, we appreciated your work through 
many years now for your government, and thank you. The team of 
Gates and England are a powerful one for the country, and we 
appreciate you all's service in managing the Department.
    I was struck when the gavel went down there was not so many 
members here this morning, but three of them were three of our 
freshman members: Dave Loebsack, Brad Ellsworth and Nancy 
Boyda. And it, kind of, struck me that this is one of those 
topics that is pretty frustrating for members. We can get 
bogged down pretty quickly in the complexity of it.
    And, you know, your last paragraph in your written 
statement, what you said, you know, to recognize the 
Department's leadership and people are far more important than 
any organizational construct.
    The problem we have is like what Mr. Hunter just pointed 
out. We hear about the problems, and then we want to know, 
``Well, where is something wrong?'' And then we are going to 
say, ``Where is something wrong that we can correct by 
statute?'' And then that starts muddling up the system because 
statute should really be the last hammer that comes down in 
trying to correct a problem.
    But I wanted to ask several specific questions. The first 
one you are probably going to say is not part of this hearing 
today, but it is part of this whole issue of management.
    Why isn't there a unified command in Iraq? And whose 
decision is that to have a unified command in Iraq?
    Secretary England. Mr. Snyder, again, I am going to tell 
you, I don't deal with Iraq. I mean, that is just not my area. 
That is not the deputy's arena. So I just can't tell you about 
the management structure in Iraq and what is the most effective 
military organization. I mean, frankly, I just don't deal with 
the military organization in Iraq. And so, unfortunately, I 
just can't comment on that. I am not knowledgeable enough to do 
so.
    Dr. Snyder. The reason I ask that is, I am taking your last 
paragraph here: ``The department's leadership and people are 
far more important than any organizational construct.''
    The problem is, if we don't have a unified command in Iraq 
and so multiple messages come down, from the State Department, 
from the military leadership, that may or may not be working in 
synergy together, I would think that makes it confusing for the 
people down the line in terms of the kinds of issues that Mr. 
Hunter just brought up.
    Or there was an article, recent press reports out in the 
last few days about Marines for the last couple years wanting 
these dazzlers, some kind of laser device, a non-lethal way of 
stopping cars that are speeding toward checkpoints, and have 
been frustrated in the delay getting those.
    Secretary England. So here is my only comment, I guess as a 
general comment, Mr. Snyder.
    I mean, in any organizational construct there are always 
advantages and disadvantages, so we always talk about the 
disadvantages. But whatever the alternative is will also have 
disadvantages of another sort.
    So, I mean, generally people of good faith, you know, 
evaluate these pluses and minuses of different alternatives and 
decide that they will accept some downside, right, for certain 
benefits, and that being the best combination at that given 
point in time.
    So I am not sure of that in this particular case, but I 
would tell you, yes, there are probably disadvantages to it, 
but there will also be other advantages that people consider 
more important than the disadvantages.
    Dr. Snyder. I wanted to ask specifically with regard to the 
big acquisitions that occur in the military.
    Dr. Hamre's group came out, I guess, I think it was in 
their ``Beyond Goldwater-Nichols'' report of May 2006, they 
thought that the reason that we have had some problems in big 
acquisitions is that the service chiefs are left out of the 
line of authority in the acquisition projects until far late in 
the game. And by the time they have some authority to say, 
``That is not exactly what we wanted,'' it has taken on a life 
of its own.
    Do any of you have any comment about that issue with regard 
to the service chiefs having more involvement in large 
acquisition projects?
    Secretary England. Putting on my previous hat as Secretary 
of the Navy when I dealt directly with the service chief, the 
Chief of Naval Operations (CNO) and the commandant of the 
Marine Corps, that was not an issue, because they were involved 
early on.
    There were some discussions as to--when I first came on, 
there was some discussion, were they allowed to be? That is, 
because of the separation, particularly in the test community 
and the evaluators and the designers, et cetera. But it turned 
out that was not an issue.
    And my view today is, is that there are forums. So, for 
example, in the Deputies Advisory Working Group we have the 
vice of every department--so the four-star of every department 
sits in every one of those meetings. And in those meetings we 
discuss literally every acquisition program that we have.
    In the past, we didn't have those kind of venues in place, 
but now we do have a venue where every service gets to look at 
every single program across the entire department. So they are 
all participants in the decision-making and the understanding, 
the evaluation, and the way forward.
    So I would say, particularly for the last two years, there 
has been a very specific venue for them to participate in 
acquisition-type decisions.
    And in that meeting is also the head of acquisition, 
technology and logistics (AT&L), along with other departmental 
senior people. So all the senior people come in, everybody has 
a say. We decide what sort of studies and analysis to do, and 
my view is it works very well.
    Dr. Snyder. You may want to have some conversations with 
present and past service chiefs, because I don't think there is 
unanimous agreement on what you just stated. I think there is a 
need for some difference in process.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Bartlett.
    Mr. Bartlett. Thank you very much, Mr. Chairman.
    And, gentlemen, thank you very much for your service.
    Secretary England, I read with considerable interest your 
prepared testimony. You say in one of the paragraphs, 
``Allowing a future Secretary of Defense to adjust the 
organization to fit his senior leadership team is infinitely 
preferable to forcing the team to fit the organization,'' which 
appears to be what we are about.
    You go on to say, ``To accommodate personnel rotation, the 
DOD organization needs to be flexible and adaptable. Presenting 
specific legislative attributes would run counter to this 
objective.''
    When I read that, I thought of what has been happening for 
a number of years now in our educational system in this 
country. We have ever more meticulously detailed curricula that 
the teachers are forced to follow.
    I think I know why we are doing that in the educational 
arena. I think we are doing that because we want to make sure 
that the teachers that really are mediocre will somehow be 
forced into a regimen of behavior so that they will be 
productive.
    My sense is that if we paid our teachers twice as much and 
got rid of most of the bureaucracy on top of them that we 
wouldn't need all of those meticulously detailed curricula.
    I am trying to understand how we got where we are in the 
regulations with DOD. I know that you are burdened with our 
regulations, that we see that you are not working effectively. 
And our solution to that is to pile on more regulations.
    How did we get here, and what do we have to do to reverse 
this?
    Secretary England. If I could give you one data point, Mr. 
Bartlett. The other day we had a discussion dealing with flag 
officers; that is, stars, generals and admirals. And it was 
brought out that there are 219, I think, legislative passages 
or regulations dealing with flag officers, which is, you know, 
sort of astonishing to me when I heard that number, that there 
are 219 different types of legislative directions dealing with 
flag officers alone.
    So it builds up over time. Whenever there is an issue, we 
add something to it. I think that is, sort of, what Mr. Snyder 
said: It tends to be in addition to, and after a while you just 
have a much larger bureaucracy that has to deal with all this.
    Again, my view would be for very large, complex 
organizations, which DOD is--the simplest structure is the most 
effective structure. So what you like to do is simplify the 
organization, put authority and responsibility at the lowest 
level you can, and find ways to interconnect--that is, have 
horizontal interconnects.
    We tend to try to solve the problem by adding to the top. I 
tend to think that instead of adding to the top you tend to 
have interconnects between the large number of organizations 
that make up DOD.
    That is obviously an organizational philosophy. I mean, 
people have different views of this, but at least that is my 
view. It is the way I address it.
    It is interesting, by the way, when I wrote my comments, I 
didn't know this, but I since found out that this is what David 
Packard said in his final report: ``Excellence in defense 
management will not and cannot emerge by legislation or 
directive. Excellence requires the opposite. Responsibility and 
authority placed firmly in the hands of those at the working 
level who have the knowledge and enthusiasm for the task at 
hand.''
    So at least I find myself in good company with David 
Packard in terms of my approach, although I didn't know he said 
that until after I had written my comments.
    Mr. Bartlett. Mr. Secretary, it might be productive if you 
could prepare for us a list, prioritize it, from the worst, the 
most difficult to deal with regulations.
    And, Mr. Chairman, if we, then, every time we passed a new 
regulation, we had to do away with two of those old regulations 
from the secretary's list, maybe we would be making some 
progress.
    Do you think?
    Secretary England. You know, back in 1991 there was what is 
called a Section 800 panel, and at that time they were dealing 
with streamlined defense acquisition. And they identified at 
that time over 600 relevant statutes and recommended 300 of 
them for appeal or amendment. And some were addressed in later 
acts by the Congress. I think they took some action. I am not 
sure how much.
    But at that time, in that one area alone, there were 600 
regulations that they felt--not in total, just that they felt 
like could be either eliminated or repealed or amended.
    Look, we would be happy to help this, Mr. Bartlett, but I 
will tell you, it is a huge amount of work just to go back and 
do all this. I mean, there have been whole boards and 
committees that have worked this. I am not hopeful that we are 
going to go streamline all of this.
    I would, however, like to retain whatever flexibility we 
can for the next Secretary and the next President as opposed to 
constraining them further by legislation.
    Mr. Bartlett. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Mrs. Davis.
    Ms. Davis of California. Thank you, Mr. Chairman.
    Good to see you, Mr. Secretary. I know you have worn so 
many different hats that sometimes it probably is confusing to 
relate back to which hat you are wearing, I am sure. 
[Laughter.]
    But I really appreciate the service to our country, and 
thank you all for being here.
    I wanted to just go back to the GAO report for a second, 
because they had pointed out that among the issues that they 
addressed was the ``lack of sustained top-level leadership, 
cultural resistance to change and inadequate incentives to 
change.''
    And I wonder if you could, number one, say whether you 
think that was a fair characterization. And, two, what do you 
see is actually moving toward some changes in that area, toward 
eliminating some of those concerns?
    Secretary England. Could you read the words again for me? 
Because there are a lot of comments on GAO. Let me make sure I 
have the right ones, please.
    Ms. Davis of California. Just the ``lack of sustained top-
level leadership, cultural resistance to change and inadequate 
incentives to change.''
    Is that a fair characterization? And, if so, do you think 
there are some changes that you are seeing? And how do you 
evaluate that? How do you even see that if those are issues?
    And if they are not issues, then, that is fair, go ahead, 
and let us know what you think.
    Secretary England. I don't think it is a fair 
characterization today, obviously. However, I think in fairness 
to GAO, they look over a long period of time.
    And so, again, it is a function of leadership and what the 
leadership is trying to accomplish. And they look ahead in 
terms of, what are the qualifications for the people who are in 
these leadership positions, particularly the Deputy Secretary 
position?
    It is important, in my judgment, to have someone that has 
experience in large organizations to run an organization of the 
size and complexity of DOD. So you do want somebody with a 
background both in carefully bringing about change, because of 
my comment about making sure you create value and not destroy 
value. So it is important to have somebody with the right sort 
of attributes.
    And we have suggested--and by the way, and I have endorsed 
this in my comments to the Congress--to have a criteria for the 
Deputy Secretary. I mean, the Deputy Secretary, in my judgment, 
should fulfill the function of the chief management officer, 
should be the COO of the organization, rather than the CMO. He 
should be the COO, or she should be the COO, of the 
organization, and therefore----
    Ms. Davis of California. Is that where you would be 
ultimate responsibility for management of the department?
    Secretary England. Well, the ultimate responsibility is 
with the Secretary. I mean, by law, the Secretary has Title X 
responsibility for the management. And he is also the key 
adviser to the President. So it is the Secretary. And the 
Secretary, though, I would say, typically passes on the COO 
function to the Deputy Secretary.
    So the secretary is the CEO. That is, policy, broad 
direction, priorities, international, et cetera. And the 
deputy, then, is responsible for the resource allocation, the 
overall general management, the planning for the Department. So 
the deputy would do the classic COO functions.
    Now, unlike, however, in the case of, say, the comptroller 
for David Patterson, for the comptroller itself, there is a set 
of requirements for a comptroller. That is, a comptroller, you 
obviously want to have a financial background. The acquisition 
executive, there are criteria in law, in terms of having 
acquisition background.
    For the deputy, there is no such criteria. And so we have 
proposed putting in the DOD system a set of responsibilities 
that a deputy would need to perform as part of his function, 
and to do that in the directive system, recognize that the 
Congress always has final approval because of the confirmation 
process.
    But right now, there is no role like that called out in 
DOD. So calling out, so having that role prescribed, and then 
making sure you selected people that would fit that role, would 
indeed be helpful, in my judgment, going forward for the 
Department of Defense.
    Ms. Davis of California. How would you want to see the 
Congress really providing then the oversight and, at the same 
time, the flexibility for that position? What role vis-a-vis if 
you were sitting in that seat and we were sitting here trying 
to ascertain the extent to which--
    Secretary England. So here is the dilemma, Ms. Davis. The 
dilemma is, on one hand I can, myself, being in the role, can 
easily say, ``Gee, this is the role that the deputy should 
fulfill.'' On the other hand, what if the next Secretary has 
very extensive management experience and actually decides to 
take on more of that role him or herself and have the deputy in 
another, you know, lesser function.
    So this is the question about providing the flexibility, in 
my judgment, for both the President and the Secretary in terms 
of: How do you build the whole management team?
    I would tend to come down, frankly, to leave it to the next 
President, the next Secretary to decide how they want to 
structure it, and the Congress sort of understanding that they 
need to know what that structure will be so when they confirm 
people, they make sure they have the right mix of talents to do 
the job.
    But I, frankly, have concluded I would not tie the hands of 
the next Secretary or the next President in terms of the mix of 
people that they have or the kind of talents that they bring 
together, because at the end of the day it is about a 
management team.
    It is not about this one office. I mean, this one office is 
one office of a thousand people who do a great job at 
leadership positions every day. So I just wouldn't make this 
the center of this. I mean, it is the management team and not a 
person, and I believe that will be the case going forward.
    The Chairman. Thank the gentlelady.
    Mr. Thornberry.
    Mr. Thornberry. Thank you, Mr. Chairman.
    Mr. Secretary, we appreciate, I think, the situation that 
you are in, which is rather a pragmatic one. You have to make 
this place work day to day and get the most productivity you 
can out of it.
    And yet I think that this kind of broader question of 
management of the Department is an important one at a variety 
of levels, including the trust and confidence the American 
people have in how their money is being used.
    All our constituents have heard stories about soldiers 
having to buy their own body armor, about decisions to buy 
weapons that don't fit the current conflict or in past 
conflicts.
    Regardless of the merits of some of those things, there is 
the management issues about whether government works very well 
and makes common-sense decisions is challenging, not just in 
your Department, but maybe because of the importance of the 
Defense Department, as much as anywhere.
    And, as you know, there are think-tanks all around town 
that are going to take the next 18 months and develop a vision 
or their idea, an ideal scenario of how things could be better 
for the next administration. I have written down, just 
listening to you so far: simplest structure possible, the 
greatest flexibility possible.
    If you were guiding some of these think-tanks in setting 
forth what is desirable, understanding it is a long way between 
here and there and how you achieve it, but just thinking about 
the tools and authorities you would like to have the next 
Deputy Secretary of defense have, other than those two general 
principles of simplest and flexibility, are there other things 
that you would advise them to consider and think about as they 
are trying to paint a picture for going ahead?
    Secretary England. I would like to answer maybe a little 
bit different question.
    First of all, the deputy has the full authority of the 
Secretary of Defense. So by law, the deputy carries the full 
authority of the Secretary. So frankly, my view is the deputy 
has all the authority and responsibility you could possibly put 
on a deputy today.
    If you asked me what is the single largest detriment in 
DOD, I would tell you I believe it is the budgeting, the entire 
money process. Because it is about a two-year process. You 
know, when we start working our budgeting, we work all year to 
put our budget together. We turn it in to the Congress. 
Congress spends a year reviewing and modifying, et cetera, you 
know, doing what they do to the budget.
    At the end of that year, we then get authorization to spend 
money. So we then start spending money literally that we were 
talking about two years before. So it is literally a two-year 
budgeting cycle, which is a very long time in the kind of 
environment we live in today, frankly.
    If you will pardon me, I will use the example I use. I 
mean, one time it was our steel mill against their steel mill, 
and their steel mill went bankrupt and we prevailed as a 
Nation. And so we still have a little bit of the steel mill 
organizational mentality, with long investment cycles and long, 
deliberative times. And, I mean, it is built into the system, 
these long cycles.
    In the meantime, the threat is no longer a steel mill. The 
threat is very agile, adaptable, quick. And we still pretty 
much have the structure, the national structure, with the 
Congress, that we have had during the entire Cold War.
    And so, while we can adapt for certain things and turn 
around, nonetheless, we still pretty much have the structure we 
have had in the past, in terms of our total national way of 
dealing with this.
    And you know, we need to think, I believe, in broader terms 
than just the Department of Defense. We really need to think 
about how the Nation is more agile and quicker and adaptable 
for the kind of threat we now face, as oppose to the threat 
that we have faced for 40 years.
    Mr. Thornberry. Thank you.
    The Chairman. Ms. Boyda is recognized for five minutes.
    Mrs. Boyda. Thank you, Mr. Chairman.
    And thank you, Secretary England, for being here today and 
your service in the Navy.
    Secretary England. My pleasure. Thank you.
    Mrs. Boyda. I am one of the freshmen. So I am just trying 
to get some bearings on some things and trying to actually 
learn things about culture. And I had two questions that are, 
again, trying to get into the mind of the military, the Army, 
all of the different branches of the armed services. And one of 
them comes back to, again, contractors.
    Obviously, there is so much conversation about contractors. 
But when we are trying to get our arms around everything, 
again, how does the military, specifically the Army, view 
contractors, in light of management decisions? And how, when we 
take on contractors, how does that play into your management 
decisions and style? What works, and what doesn't work?
    Secretary England. We contract for whatever we need to 
contract for to get the mission accomplished. And it is 
literally that simple.
    So, where we have capability in the government, we utilize 
that capability. If we don't have that capability, we contract 
out. And that is everything from different services to building 
ships and airplanes and designing goods and equipment and 
cafeterias.
    And so, whatever it takes, frankly, to do the mission--and 
we utilize the resources of the Nation to do that. And 
sometimes it is military; sometimes it is civilian government. 
And sometimes it is contract in the U.S.; sometimes it is 
contract in-country.
    Mrs. Boyda. I appreciate that.
    Part of the perception of the American people is that part 
of what is out of control is this sense of, how do we hold them 
accountable? How do we know what is going on?
    And again, I have to deal with the perception--and I 
certainly say that I support contracting. We need to pull in 
all the resources of the American people, as you just said. But 
the sense is that contracting has reached a point where we have 
lost the ability to manage that function.
    Tell me, how I should respond? Or do you feel like that is 
accurate? Should we start pulling back on contracting?
    Secretary England. I would say that it is a valid concern, 
and I am not sure I know the answer.
    I do know this: It was enough of a concern that I brought 
together all the legal and contracting people just to make sure 
that we had the right legal framework to manage contractors 
around the world in terms of understanding their liabilities 
and our actions if they did not live up to our expectations.
    Mrs. Boyda. When they don't live up to our expectations, 
because----
    Secretary England. When they don't. But recognize that at 
least contractors in a combat zone have a very difficult 
environment, right?
    Mrs. Boyda. Exactly.
    Secretary England. So we ask them to do quite extraordinary 
things. And they do quite extraordinary things for us.
    We also have contractors, by the way, from other countries 
who repair equipment. In theater we have people in the country 
who do things for us--Iraqi business, et cetera. So there is a 
wide range of ``contractors.''
    Anyway, the conclusion of all that is yes, we do have the 
right legal basis and structure that we can contract 
effectively with the correct remedies, et cetera.
    Mrs. Boyda. My concern is twofold. One is I have so much 
military in my district that I do hear back some sense of 
just--maybe ``resentment'' is too strong of a word--but what 
our soldiers are doing right there every day at base pay, and 
they are so committed to this country and the concept of where 
we are going with contractors.
    What I would just offer as something that I guess you must 
be painfully aware of: As we see more contractors, this body 
will probably put more of those regulations on top of things to 
make sure that those monies are being used well. And again, it 
will be one of those things that continues to complicate as 
things go on.
    So this body is struggling to figure out what we need to do 
to let the American people know that those monies and those 
projects are being--so we are headed for one of those very 
difficult intersections.
    Secretary England. We need to do this very, very 
thoughtfully, because for all those great men and women who 
wear the uniform in your district to do their mission, they do 
need contractors' support and assistance to do that mission.
    And our military will always be of some reasonably limited 
size, and we will always want to contract out certain 
functions, particularly peak functions that you don't want to 
have on a long-term basis if you only need them for a short 
period of time, et cetera.
    So there are valid issues and concerns. It is something we 
need to work through together.
    But I would say before we overburden the system with a lot 
of regulation, we really need to understand what the mission is 
and how we accomplish that, because ultimately, that is what 
America needs to have accomplished.
    Mrs. Boyda. We are out of time, and I will yield back. I 
agree with what you are saying. Thank you.
    The Chairman. The chair recognizes Congressman Kline.
    Mr. Kline. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here.
    Mr. Secretary, always a pleasure to see you.
    Secretary England. Mr. Kline.
    Mr. Kline. And I want to add my thanks for all of your 
service. And however many hats, you have worn them all very 
well.
    A couple of comments. You talked, as Mr. Thornberry said, 
about fewer and simpler regulations and more flexibility. And I 
think it is clear that we need that.
    But I want to go back to what Mr. Hunter was talking about, 
about the rapid acquisition authority that the Secretary has 
and how few times it has been used. He said twice. It was zero 
for a very long time, and frankly, I thought it was just one 
having to do with IED defense. So two is a terrific increase 
over what I thought.
    But I am shocked----
    Secretary England. Can I ask a question?
    Mr. Kline. Sure.
    Secretary England. Do you know how many--David, do you 
know? I don't have somebody with me to--do you know how many?
    Mr. Patterson. We used the authority that established the 
joint rapid acquisition cell, I would guess, about one or two 
times a month. And what we find is--and when I say that, you 
gave us authority for about $100 million. What that has 
prompted us to do is to find other base budget or supplemental 
ways of funding that. But we use that authority on a regular 
basis to do a wide a variety of things and many classified 
things.
    Mr. Kline. Okay. Could I ask for the record, please, to get 
that?
    Mr. Patterson. Absolutely.
    [The information referred to can be found in the Appendix 
beginning on page 88.]
    Mr. Kline. Because we obviously are dealing with 
misinformation here.
    Secretary England. Mr. Kline, what I do for the IED task 
force is I have literally passed my authority on to that 
organization, and they can directly spend, I believe, $25 
million without any, ``Mother, may I?''
    So part of my hesitancy in this is understanding how often 
they use it, because I give them total authority. They can 
spend up to $25 million without coming back to me, and then 
they do whatever they have to do quickly to be responsive to 
our men and women.
    So they may use it a lot of times I am just not aware of, 
because I give them that authority so they can respond quickly.
    Mr. Kline. Fair enough, Mr. Secretary, but we obviously 
don't understand that. Mr. Hunter said two. I thought it was 
one. You are saying many, many times.
    We would like to know that, because we believed here in 
this committee that was a very important thing that we did, to 
allow the waiving of those Federal acquisition regulations: Buy 
it if you need it; buy it wherever in the world it is made; and 
get it to the troops to save lives.
    And I don't want to start to argue you with you, Mr. 
Secretary, but you essentially said that the acquisition system 
was sort of working like it is supposed to. At least, I thought 
that is what you said. And I don't see that.
    It seems to me that the acquisitions system--the whole 
system, what we have imposed from Congress, what DOD has done, 
how it is organized--has not functioned very well. It is the 
steel-mill, with all apologies to our steel producers, approach 
to acquiring things for our military.
    And we are dealing, as you said, in a different age with a 
different enemy, and we need much more speed and agility than 
we are getting from the big defense acquisition systems.
    So if you really think it is working well--and I applaud 
improvements in the JROC which I think you have made--but it 
seems to me that it is awfully slow. So did I misunderstand 
you?
    Secretary England. I would say yes and no. Is that a safe 
answer? [Laughter.]
    Mr. Kline. It is not a satisfactory answer, but go ahead.
    Secretary England. If I could explain just a bit. I believe 
when we need to respond quickly, we are doing that. When 
somebody needs a piece of equipment, we quickly do that, and we 
use whatever authorities, and we are very quick and adaptable.
    When it comes to very large integrated systems, huge 
complex, huge command and control system, large integrated 
space systems--and I will tell you our systems are getting more 
complex by orders of magnitude--we have concluded that, 
frankly, the way we were doing that was not effective, because 
we were dealing with individual programs and then integrating 
those programs into these large systems.
    So we now have what we call joint capability portfolios. We 
have four large integrated portfolios that we are doing as an 
experiment, but we are really doing it for real. And we will 
pass this on to the next team where we now manage the programs 
that need to operate together as one large joint portfolio.
    And it is interesting when you talk to our people in the 
command and our combatant commanders, this has made a 
remarkable difference in understanding how this all comes 
together, the milestones to be met, et cetera.
    So I believe that, look, there is always going to be room 
to do this better. There are now some new approaches that I am 
at least hopeful----
    Mr. Kline. Well, I will look at those with interest. And I 
also am hopeful.
    I see my time is up. Mr. Chairman, I yield back.
    The Chairman. Thank you.
    The chair recognizes Ms. Bordallo for five minutes.
    Ms. Bordallo. Thank you very much, Mr. Chairman, and thank 
you for calling the hearing this morning.
    And I wish to welcome our witnesses, especially Secretary 
England, whom I have known for several years.
    Secretary England. Ms. Bordallo, how are you today?
    Ms. Bordallo. Very good.
    Mr. Secretary, this question is for you. DOD controls a 
significant amount of Federal Government contracting dollars, 
and it controls the vast majority of the Federal marketplace in 
my district, Guam.
    America's small businesses, I feel, deserve fair treatment. 
So I am concerned about this, because Guam will be home to a 
significant amount of military construction and other work 
during the near future. Our small businesses, which comprise 
the majority of the businesses, want to be partners in the 
department's plan to build up Guam.
    Do integrating small businesses into DOD contracting 
efforts pose challenges to the business transformation effort? 
And more specifically, will integrating Guam's small businesses 
into building up the bases on Guam pose certain challenges?
    Secretary England. Ms. Bordallo, I don't know if it poses 
unique challenges. We do have a commitment to small businesses. 
In fact, I will comment, I believe when I was running the Fort 
Worth company then of General Dynamics and Lockheed, about 80 
percent of our contracts were with small business--not in 
dollar value, but number of contracts, as I recall.
    So small businesses are hugely important to our Nation and 
to DOD, and we do have objectives of small business offices, 
and we do that for various types of small businesses. So we 
will continue to emphasize the small business of Guam and every 
place our view is. It is good for America to develop small 
businesses.
    Now on the one side it is, I will tell you, sort of the 
catch-22. We make the small businesses very successful, and 
they grow out of being a small business, so now they have a 
contract and they don't count anymore in terms of a small 
business. So when you are very successful, you find yourself 
that the scorecard goes against you if you are very successful.
    But I would say, look, that is the bottom line: small 
business, making them successful and grow. And that is part of 
our commitment, and that is the way we operate. And we will do 
that on Guam as we do every place else.
    Ms. Bordallo. Very good. I like that answer.
    Mr. Secretary, my second question is, over the past several 
years, we have heard from many components of the United States 
armed forces, particularly the National Guard and reserves, 
about staggering equipment shortages. Questions have been 
raised as to how the equipment is accounted for at home and 
abroad.
    As DOD reforms its business practices, to what extent has 
DOD incorporated equipment asset tracking into its business 
transformation program?
    Let me just give you a quick example. The Army will track 
equipment literally to each nut and bolt. On the other hand, 
the Air Force tracks equipment by platform. The difference in 
accounting methods would make it very difficult to create a 
uniform process for asset management.
    How would you tackle that?
    Secretary England. So, David, do you want to--I don't know 
if I--you know, this is interesting. I am sitting here, and as 
you were talking about this, I can remember this conversation, 
frankly, about asset tracking and at what level and having 
common standards across DOD, but I can't recall our conclusion.
    Do you recall, Paul, the conclusion?
    Mr. Brinkley. I think we can take a crack at it, anyway.
    Secretary England. Okay.
    Mr. Brinkley. There are two key elements in your point 
about the differences between the uniform services and how they 
have historically developed their own mechanisms for both 
accounting and just asset visibility.
    That nomenclature they use--you can go to a 7-11 and there 
is a standard bar code on things. Well, within the Department 
of Defense often, because of the history which goes back so 
many years, we lack those standards.
    And putting those standards in place is a key element of 
the integration Mr. England was defining earlier. In other 
words, how do we standardize our nomenclature for how we 
identify an asset so that a Humvee that the Marines are using 
is identified the same way as a Humvee that the Army is using? 
That helps support the joint warfighting effort.
    But we have also defined a standard financial information 
structure in partnership with the comptroller's office so that, 
as those asset standards are defined, the way we roll up an 
account for them and depreciate them and track them from an 
accounting perspective also becomes standardized.
    And these are key elements of both the enterprise 
transition plan for the DOD's business transformation effort, 
as well as the financial improvement and auto readiness plan 
that Mr. Patterson mentioned earlier.
    Ms. Bordallo. Good. Thank you very much.
    Secretary England. Thanks, Paul.
    The Chairman. Mr. Jones.
    Mr. Jones. Mr. Chairman, thank you very much.
    Mr. Secretary, it is good to see you again.
    Secretary England. Mr. Jones, how are you, sir?
    Mr. Jones. I am fine, sir.
    I was a little disappointed that your answer to Mr. Snyder, 
that you said you were the former Secretary of the Navy. You 
should have said Secretary of the Navy and Marine Corps.
    Secretary England. Or Secretary of the Marine Corps and 
Navy. [Laughter.]
    Mr. Jones. Hopefully we will change that this year with the 
help of the Senate.
    Mr. Secretary, I have great respect for you, and you know 
that.
    For the moment, can you tell me, in your opinion: Is the 
Department of Defense more efficient today or less efficient 
than it was in 2001, from a financial standpoint?
    Secretary England. I don't know 2001. I can tell you that 
it is more efficient in my judgment in the last two years, when 
I personally had a hand in tracking and putting systems 
together.
    So I am not sure I can go back to 2001. I can tell you I 
believe that the Department has made great progress in terms of 
what I call, again, the horizontal integration, the 
effectiveness and efficiency. I can tell you the Department of 
Navy is more effective and more efficient than it was in 2001. 
They still are today. And, again, so I can speak with that 
firsthand.
    The agencies, I would say, are vastly better than they were 
in 2001. So our defense agencies, we did start back in 2001 
with integrated approaches in terms of those very, very large 
and complex enterprises. And they, I would tell you, they are 
just vastly better today than they were in 2001.
    So I am not sure about the total enterprise. I think the 
total enterprise, I would tell you is much better than it was 
just a couple years ago. And I can at least speak for agencies 
and Navy and Marine Corps. And the other services I just don't 
have insight back to 2001.
    Mr. Jones. Mr. Patterson or Mr. Brinkley, would you be able 
to go back to 2001 and answer that question, whether it is less 
or more or the same, as far as efficiency, the spending of the 
taxpayers' dollar?
    Mr. Patterson. I think that I would feel very comfortable 
saying that we now have a very clear strategy, a very clear way 
ahead with the systems that the Secretary and the Deputy 
Secretary have been the sponsors of.
    And this, perhaps, speaks to Congresswoman Bordallo's 
point, that we now have 15 percent of our assets that we can 
track. We have a standard financial information system that we 
did not have before. And we track 49 percent of our 
liabilities, $967 billion worth.
    And we have now the beginning of an enterprise transition 
plan, the Business Transformation Agency. And, of course, Paul 
can speak to that in much greater detail.
    But we now have the beginnings of tools which we did not 
have before. And I can speak with some knowledge, having been 
in the Pentagon from 1983 to 1990, and these kinds of things 
would have never occurred to us, quite frankly, because we did 
in fact have a system of accounting that was driven by the 
appropriators and appropriations.
    Now we have a clear way ahead with the, as I said, the 
financial improvement and audit readiness plan, the enterprise 
transition plan and all of the systems now that we are 
beginning to bring online and evaluate and vet for their 
effectiveness and efficiency.
    And I am very hopeful that we will start to see clean 
audits.
    We have the Army Corps of Engineers which has just gone 
through an audit. And I think that, for the first time of an 
agency of that magnitude, the outcome will be very positive.
    We are beginning the audit procedures, the pre-audit 
procedures for the Marine Corps, and have started to put into 
position a relatively new approach to that, with an audit 
readiness intermittent step, so that when we assert that the 
Marine Corps is ready to undergo an audit, we will have a 
significant amount of confidence that that will be done well.
    So I am much more comfortable now, seeing the progress that 
has been made over the last six years, than I might otherwise 
have been, sir.
    Mr. Jones. I appreciate that response. And I guess the only 
other question--well, my time is up. I yield back.
    The Chairman. Mr. Cooper.
    Mr. Cooper. Thank you, Mr. Chairman.
    Mr. Secretary, for many of us on the committee, the issues 
are like swimming in molasses: It is slow and sometimes painful 
work.
    But in response to Mr. Bartlett's very helpful suggestion, 
I thought perhaps we could start with your statement that you 
have discovered 219 different regulations that apply to flag 
officers. If you wouldn't mind supplying that to the committee, 
perhaps we could start with that list and whittle it down, 
perhaps get rid of some of the unnecessary rules.
    Secretary England. Well, Mr. Cooper, we will do it. And I 
am not familiar with the 219, but our personnel people actually 
brought that to my attention just the other day. But we will 
articulate those for you. I appreciate your help. Thank you.
    [The information referred to can be found in the Appendix 
beginning on page 88.]
    Mr. Cooper. Whatever information is already supplied and 
available. We do not want to create more work for you. But it 
would be helpful to have clear communication so that we can 
learn.
    Secretary England. Good.
    Mr. Cooper. I wanted to focus on Mr. Brinkley for a moment. 
He seems like an interesting addition to the management at the 
Pentagon, having come from the outside with apparently no prior 
defense contractor experience. I would be interested generally 
in your observations of what it was like to come in from the 
outside.
    And also I want to learn from you about your position as 
leader of the Task Force for Business and Stability Operations 
in Iraq.
    Both issues are important for me. I only have five minutes. 
So if you wouldn't mind elaborating on both, I would be glad to 
hear from you.
    Mr. Brinkley. Certainly. Thank you. I will be brief on the 
first part so I can focus on the second.
    The observations I would have on the transition from 
Silicon Valley to DOD have to do with just the whole set of 
measures that are applied. You have a profit and loss. We have 
talked here today about financial audits, why can't the 
Department of Defense get a financial audit. And Mr. Patterson 
articulated that until 2001, that was never part of the focus 
of the Department of Defense. It wasn't designed to do that. It 
was designed to project force and support a national security 
objective. It was not designed to create profit for 
shareholders.
    So the whole set of motives that one lives with and really 
become ingrained in the way you think when you are working in a 
private-sector corporation are now part of what are ingrained 
in you when you are working in a Federal agency.
    And so being able to shift and understand and translate the 
principles and the best practices that come from industry that 
everyone wants to see--everybody goes to Amazon and wants to 
point and click and have access to information; why can't I do 
that in the DOD?
    Well, there is a host of reasons why that is complicated in 
the DOD. They have to do with history, the fact that we were 
adopter of technologies always. The DOD is the first to adopt 
new technologies to support our men and women in uniform. That 
creates fragmentation. As standards emerge over time, those 
initially adopted technologies, some of them become 
standardized, some of them don't.
    So these are all things that are unique about government 
that make it very difficult for the Department and any 
government agency to quickly monitor behaviors that we take for 
granted in our day-to-day lives in the private-sector world.
    Regarding the work in Iraq--and I will tie to this--one of 
the things great companies do is they understand what their 
customers' needs are. And the customer for the business mission 
of the Department--Mr. England has driven this home 
repeatedly--the customer for the business mission of the 
Department are the guys in uniform in the desert today. It is 
the warfighter.
    Great companies understand, from the very top to the very 
bottom, how their work, regardless of how arcane it might seem, 
matters to the customer.
    And for us, the task force effort, taking our business 
transformation leaders, the people with industrial expertise, 
putting them in Iraq to support the mission in a way that 
leverages our business expertise to help restore economic 
vitality in Iraq, while also working through a lot of our 
business process issues, which can affect contracting, 
maintenance, financial management--all of those things go to 
war with our warfighters. And some of them work really well, 
and some of them don't.
    So how we address those things quickly in theater creates 
urgency back in the back office, so people who typically don't 
see how their work affects the guys in uniform suddenly can see 
that financial accounting matters to the guys in uniform.
    And then one thing I will say about the Department. There 
is a huge amount of passion at all levels of the organization. 
If you can get people to see how their work matters to the 
people in uniform, the amount of energy you can harness is 
tremendous. That is why people work in the DOD. It is a 
patriotic impulse, it is a desire to serve.
    And so those are things, I think, that have made our task 
force effort extremely rewarding and have helped invigorate our 
business transformation effort as we have engaged with our 
forces in theater.
    Mr. Cooper. What did you think when you read in the paper 
last week that Iraq is now judged the second-most unstable 
country in the world, and you are the leader of a task force on 
stability?
    Mr. Brinkley. I think it is a testimony to the struggle we 
have in our government today to bringing the economic leverage 
of the American force to lever, along with the political and 
the military leverage that we are designed to bring forward.
    The fact that we are not able to leverage the $12 trillion 
American economy to effectively engage a $40 billion economy 
and uplift the livelihoods of people in Iraq I think is a 
challenge that, again, the unique situation in Iraq has 
illustrated and that we are working to try to address in our 
efforts to forge economic growth.
    Mr. Cooper. Thank you, Mr. Chairman.
    The Chairman. Thank the gentleman.
    Mr. Wilson.
    Mr. Wilson. Thank you, Mr. Chairman.
    And thank all of you for being here.
    It is particularly very meaningful to me to have Gordon 
England here. He is a folk hero in the 2nd District of South 
Carolina with his service, Mr. Chairman, twice as Secretary of 
the Navy.
    And I was yesterday visiting again at Parris Island, the 
Marine air station, also the naval hospital in Beaufort, and 
your successor, Secretary Winter, has done a fine job of coming 
by to visit. But you helped create the tradition. So thank you 
for your service.
    Secretary England. Thank you, Mr. Wilson.
    Mr. Wilson. And I am really pleased to hear from all of you 
as to the success of improved business practices at the 
Department of Defense. I was very happy to hear Congresswoman 
Bordallo's interest in small businesses. I have a keen interest 
in that, and she has done a wonderful job of promoting the 
small business of Guam, and truly that is reflected across the 
United States.
    And this has been touched on by Mr. Patterson, and that is 
the ordered opinions of so many elements of the Department of 
Defense, including the military services and their inability to 
have a clean financial audit opinion.
    Could you please explain that a little bit further?
    Mr. Brinkley. Yes, it is, in my opinion, not necessarily 
that they can't have a clean audit opinion. At the very lowest 
level on bases, the base commander knows every single item that 
he or she has.
    The problem that we have has been, over the course of, as I 
said, the last 60 years, we have not emphasized that kind of an 
audit approach. Our audit approach has been, historically, one 
in which we deal with the appropriations that were given and 
then we account for those appropriations in the various 
categories: MILPERS, operations and maintenance, and 
investment.
    We have changed, and we are now focused on those standards 
as outlined in the generally-accepted accounting procedures, 
which are far more conventional in the way people think about 
an audit.
    Our motivation to do this began in 1990 with the Chief 
Financial Office Act, and later fortified by the Sarbanes-
Oxley. But it is the right thing to do, and we are now focused 
on that.
    Mr. Wilson. And being focused on it, do you have a 
timetable when you believe this could be achieved?
    Mr. Brinkley. Yes, sir, we have a rough timetable, and I 
would say that we would be able to produce a fairly consistent, 
clean audit in the next eight to ten years. I know your first 
reaction is, ``Eight to ten years, my gosh.''
    Mr. Wilson. Well, you have been working on it 60, so I----
    Mr. Brinkley. Well, we have been working on it differently 
for 60. But we now have the tools available to us to provide 
some assurance that we will be there.
    Secretary England. So if I can add to it, Mr. Wilson, I 
think what is different now is we have put together a full-time 
team to do this. They have schedules, they have measures. I 
mean, we have metrics. We review it regularly to see what the 
progress is. And I believe that our interim metric is, like, 
2010 we will have 70-some percent of both assets and 
liabilities clean audit.
    So we do have interim milestones and as Dave said, we 
already have seven components with clean audits. We have the 
Marine Corps in work right now. We have the Corps of Engineers 
in work.
    So we now have a program, we have a plan, we have dedicated 
people, we have money and we actually measure this progress. So 
it will get there now because there is a process to do that.
    Mr. Wilson. Well, again, I am impressed by the reputation 
of all three of you to achieve that.
    A final question, going back to Iraq. I was there earlier 
this month. I have been there seven times. And your work with 
the private sector is so important.
    What do you see the status of where we are, where it is 
going?
    Mr. Patterson. Sir, our effort is specifically focused on 
the revitalization and the restoration of employment, to drive 
the unemployment rate, which is chronically high in Iraq, 
significantly down as a stabilizing effect in support of 
General Petraeus's strategy.
    Our status is we have restarted six factory operations in 
Iraq. We put a few thousand people back to work to date. We 
anticipate restarting dozens of factories this year and putting 
thousands more Iraqis back to work in sustained positions 
within industrial operations geographically distributed around 
the country.
    Mr. Wilson. Thank you again for your service.
    The Chairman. Thank you, Mr. Wilson.
    The gentleman from Hawaii, Mr. Abercrombie?
    Mr. Abercrombie. Mr. England, good morning. Aloha.
    Secretary England. Aloha.
    Mr. Abercrombie. Mr. Secretary, I have been through--let me 
start again. I want to make sure I had you correct. Did you say 
to Mr. Snyder that there is a complete disconnect between 
yourself, organizationally speaking, the gentlemen at that 
table, and operations in Iraq?
    Secretary England. No, I didn't. I said the operation in 
Iraq is really under CENTCOM. There is a military operation. As 
the deputy, I actually don't deal with the military operation.
    Mr. Abercrombie. That is astounding to me. And I think part 
of the difficulty here is embodied in that.
    If you are not doing that, does that account for the fact 
that the mine resistant ambush protected (MRAP) vehicles were 
unable to get any attention in the DOD for apparently up to two 
years, the requests for forces in the field that were not met 
because of the inability of the Pentagon to respond to the 
direct requests of forces in the field?
    Secretary England. No, that is not correct, Mr. 
Abercrombie.
    Look, when a request comes from the field, it obviously 
comes in and is responded by OSD. If there is an issue, 
obviously it comes to my attention. So when there is a request 
for equipment, it comes to the chairman's office, CENTCOM 
chairman's office. It gets addressed. Programs are funded, 
developed to whatever extent necessary.
    We have had different models----
    Mr. Abercrombie. Excuse me, I only have the five minutes.
    But it wasn't in this instance. And I want you to know, I 
have read through all of your material dated as of June 25th, 
``Defense Business Transformation.'' I have it here. You are no 
doubt familiar with it.
    It includes organizational entities, the congressional 
requirements fact sheet, so I think some of the answers are 
already here for us--the fact sheet on governments and 
transition tools, and, most important to me, the fact sheet on 
components overview.
    It says here that the transformation efforts of the six 
most significant business operations listed here are to do the 
following: identify the transportation visions and goals. For 
the Army it includes processes to equip the force and for the 
Navy to increase the readiness, effectiveness and availability 
of warfighting forces by employing business practices to create 
more effective operations reduced cost.
    One of the items here is optimize investments for mission 
accomplishments. If all this is under way, how is it possible 
that the MRAP requirement was ignored?
    Secretary England. It wasn't ignored.
    Mr. Abercrombie. There is no money for it in the budget. 
One of the reasons we have a reallocation argument taking place 
right now in today's budget, and push-back coming from defense 
contractors to what this committee's decision-making was, is 
that there was no money in the administration's budget to 
address the request being made by the Marine Corps and the Army 
just for the MRAP vehicles alone required for this year.
    Secretary England. I believe there are over 3,000 vehicles 
on order right now, and----
    Mr. Abercrombie. Yes, but the request is for 6,000 to 8,000 
or even higher now. And the Secretary of Defense says it is his 
highest priority, but I don't see your business transition 
groups, including your organizational entities, being able to 
respond in a timely way.
    Secretary England. We have had, first of all, tests of 
those vehicles. We have had, I believe, six different 
contractors in tests at Aberdeen. They have been undergoing 
various types of explosives and evaluation. There has been----
    Mr. Abercrombie. I am familiar with that.
    Secretary England. Okay. And we have been up talking to the 
Congress about what we do in the upcoming budget to extend that 
production line in terms of funding. So we had initial small 
funding. It grew until we could get into a high production 
rate.
    Mr. Abercrombie. Do you understand, Mr. Secretary, that 
there is a disconnect between what you are doing here 
organizationally and in terms of governance and transition 
tools, that there is a disconnect between that and the 
practical realities of equipping and training and getting the 
readiness of the warfighting force? We are working at odds with 
what you want to accomplish.
    Secretary England. I understand.
    Mr. Abercrombie. I am trying to help you here. What I am 
saying is you can't have this disconnect.
    Secretary England. No, I understand. I don't believe there 
is a disconnect. I mean, when people come in from the field--
and, Mr. Abercrombie, again, I put my other hat on. Back in 
2001 we were working quick reaction to the field for the 
Marines and the Navy. We have been working this whole aspect of 
IEDs literally around the clock since the first troops were 
deployed.
    Mr. Abercrombie. How can we account for the fact that we 
are having to reallocate funds out of the proposal of the 
Administration--reallocate funds in our defense budget working 
with the appropriators in order to fund the MRAP vehicles 
alone?
    I will set aside all the questions about the expeditionary 
fighting vehicle increases and all that kind of thing.
    Secretary England. Well, we had money in the base budget 
last year. We had money in the supplemental last year.
    Mr. Abercrombie. But not enough.
    Secretary England. Well, okay, but as more requests have 
come in, we have increased the funding, so we have been 
responsive to the field.
    Mr. Abercrombie. I won't argue that point.
    Do we have a moment, or am I through?
    The Chairman. Go ahead.
    Mr. Abercrombie. One moment. I don't notice anything in 
what I have read, all of the testimony and virtually every word 
in this, there is nothing in here in terms of your 
organizational entities about capital budgeting. And I would 
sure like to see something in there about trying to address the 
question of how we are actually going to finance these things.
    Secretary England. We have had a number of conversations in 
the building on this, and we are still trying to wrestle to see 
if there is a way forward on the capital budget.
    Mr. Abercrombie. Do you suppose you could put a sentence in 
one of these things sometime saying that we are wrestling----
    Secretary England. We will do it.
    Mr. Abercrombie [continuing]. With capital budget?
    And thank you.
    The Chairman. Thank the gentleman.
    Let me follow through on two examples, Mr. Secretary.
    A brigade commander sends a request in from the field 
through Central Command: We need more jammers for a specific 
reason, which might require some research and development. The 
same brigade commander requests something that is already on 
the line, conventional Humvees.
    Trace those two requests, one that might require some 
research and development, though urgent, and the other 
something that is readily available. Trace that request from 
that brigade commander all the way through how it works through 
your office and how it gets back to that brigade commander.
    Secretary England. I would say it doesn't go through my 
office. I am happy to say it is not that bureaucratic. If they 
need vehicles, Army will directly respond. If they need 
Humvees, Army will pull those Humvees from wherever they have 
them, either in stock or somewhere in the states or another 
command, and they will provide those directly. So they will 
respond directly.
    [The information referred to can be found in the Appendix 
beginning on page 87.]
    The Chairman. So that goes to the Central Command, 
obviously.
    Secretary England. Pardon me?
    The Chairman. That will go to the Central Command, someone 
in the Central Command, and then----
    Secretary England. Well, it gets shipped directly overseas, 
so Central Command will validate, and then it gets shipped to 
theater.
    The Chairman. No, no, no. Where does that initial request 
go from that brigade commander? To his division commander, I 
suppose.
    Secretary England. Yes, I am not sure where it goes. It 
eventually goes to Central Command to get validated.
    The Chairman. All right, it is validated. Then where?
    Secretary England. It comes in to the Pentagon, and it 
would----
    The Chairman. Where in the Pentagon?
    Secretary England. It would come in to the Joint Chiefs, I 
believe. It would come into Joint Chiefs and then directly to 
the Army, and the Army would respond by providing whatever 
vehicles they had available to respond.
    The Chairman. Why would it go to the Joint Chiefs? That is 
not part of their statutory duty.
    Secretary England. Again, I believe that is where it would 
go. I would have to verify that for you, but I would expect it 
would go through the operations part of Joint Chiefs again just 
to make sure it then goes to the right place in the Pentagon, 
the right organization to respond, because it would go into the 
military chain to ship whatever equipment they have. I would 
expect that is the way that would operate.
    The Chairman. Let's go to something that needs some 
research and development. It is urgent--for instance, a jammer. 
The brigade commander is saying we need a jammer that does such 
and such.
    Secretary England. So again, once it is a valid, it would 
go directly to--we have a very special office dealing with 
IEDs, and it would go to that office. And they look at the 
whole broad spectrum of jammers and equipment and whole 
classified areas.
    The Chairman. Now is this General Montgomery Meigs' office?
    Secretary England. Yes, it would. Yes, sir.
    The Chairman. Okay. Keep going.
    Secretary England. And then he would see what is available 
or modify.
    And again, he has funding and he has authority to do what 
is necessary to respond to that request, so he would 
immediately just start working that. He can do that with 
industry or with the services or----
    The Chairman. Okay. He gets to develop. Then what?
    Secretary England. It gets produced and sent to theater, so 
it goes----
    The Chairman. By way of----
    Secretary England. It goes through tests, and they have to 
validate it.
    The Chairman. Assume all that is done.
    Secretary England. He does all that.
    The Chairman. Assume all that is done and the brigade 
commander says, ``Hey, where are my jammers?'' Who takes it 
from General Montgomery Meigs' office? It is perfected.
    Secretary England. I believe they go to CENTCOM. They make 
the decisions in terms of allocation, because they decide where 
it is most needed in theater and what numbers and those sorts 
of decisions.
    And that would be the same thing with vehicles. Maybe there 
are conflicting needs. So they make that decision. The same 
with MRAPs. They make those decisions in terms of where they 
are most needed at that point in time.
    The Chairman. But all of that takes, unfortunately, time. 
Am I correct? Even in the case of needing some additional 
Humvees.
    Secretary England. Well, I believe that is all done really 
pretty quickly. I don't think that is a long timeline to do 
that. My general feel of all this is that it is very 
responsive, Mr. Chairman.
    If they need something that is available, they get that as 
quickly as the need is known, and then it gets delivered to 
them. So certainly, there is some time lag. In the shipping and 
all that, it is a long wait. But even then, equipment is flown 
in.
    For example, we are flying MRAPs in today, a combination of 
both air and sea, to get the most number in the shortest period 
of time. So we fly in whatever we have to in quick reaction. 
Obviously, things that could be longer, we ship.
    The Chairman. Thank you very much.
    Mr. Hayes.
    Mr. Hayes. Thank you, Mr. Chairman.
    And distinguished panel, Secretary England, thank you for 
coming today.
    Secretary England. Mr. Hayes.
    Mr. Hayes. I wanted to pick up on Mr. Wilson's comments as 
to the extremely great nature of your service. I couldn't do 
much better than he did, so along those lines, I want to thank 
you as well, and all members of the panel.
    And, Mr. Brinkley, I want to thank you for a particularly 
thoughtful and helpful description of the blending between 
military and government and best business practices. That was 
very, very helpful.
    And picking up on your comments, I want to come back to 
Secretary England and frame my question about the Berry 
Amendment in that context. Mr. Secretary, you are very familiar 
with this process.
    And again, thank you to Mr. Brinkley.
    DOD has the primary objective of protecting force, making 
sure that our folks have everything they need. And that is 
absolutely perfect.
    At the same time, those of us on this side of the desk have 
obligations and responsibilities to our constituents, many of 
whom are the defense industrial manufacturing base. Using these 
objectives and blending our voices obviously gives us the best 
possible product under tough circumstances.
    And I want to compliment you and all of you for the 
incredible improvement that I have seen in my nine years here 
in the acquisition process. We work very closely on a number of 
different issues. General Dale and General Cross and many 
others have really been fantastic. So don't ever lose sight of 
those accomplishments and what those men and women do for the 
folks in uniform.
    I refer back in time a little bit to a meeting that I wish 
I had known about and attended between the specialty metal 
folks and the aerospace folks. And you, unfortunately, were the 
victim of being in the middle. I wish I could have been there 
to referee.
    Secretary England. I wish I hadn't been there. [Laughter.]
    Mr. Hayes. I wish I had been there, because I would have 
either set them both down or whatever. The point is they were 
talking about each other and not about solving the problems 
that impact our men and women in uniform.
    With that context, it is absolutely imperative, and I think 
eminently possible, to blend our desires on both sides of that 
spectrum and make the Berry Amendment work for our men and 
women in uniform.
    And I am pledging again publicly to you, had I been at that 
meeting, I would have said, ``Hold on here, ladies and 
gentlemen. We are going to make this work, because that is the 
only reason the Berry Amendment exists.''
    And more specifically, Mr. Krieg recently issued a blanket 
waiver for fasteners. Maybe you needed them; maybe you didn't. 
But if he had said something to me and us here on the 
committee, we could have possibly avoided getting poked in the 
eye with a sharp stick.
    Looking forward, I want to make sure to the extent we can 
that the benefits of Berry accrue to you and the department and 
all of our men and women in uniform.
    And at the same time, any problems that occur because of 
the changes in theater, changes in the way we have to do 
business, that we, as Ms. Bordallo and others have said, have 
piled regulation upon regulation to clarify--which we have 
really modified; new word for you--but that is my intention. 
That is our desire.
    And if you would just comment back to me on what, from your 
perspective, and Mr. Brinkley and also Mr. Patterson, how we 
can better work with you so that all our objectives to the men 
and women in uniform are met.
    Sorry for the long dissertation, but thank you for being 
here.
    Secretary England. No, it is okay. This is a difficult 
issue.
    My view of this is as long as people are reasonable and 
practical, it all works very well. We support the Berry 
Amendment. We think it is good for America. It is good for the 
military. It is not good when taken to extreme.
    And so people tend to take ``limit case'' and try to make 
this work out in situations where it just does not apply. This 
just takes practical, reasonable people of good faith to work 
this out. And once in a while, people are working it out in 
areas where there is just no practical solution to this.
    So I am not sure I know everything about the blanket waiver 
on fasteners, but this is part of the issue in the past dealing 
with extraordinarily small parts and keeping track and knowing 
where the sources of the metal came from and all of those 
things that became extraordinarily burdensome to do, as opposed 
to the very large applications for titanium.
    So as long as everybody is reasonable and practical, it 
works terrific. But when you get down to the minutiae and the 
whole expense of dealing with minutiae, then, of course, that 
is something that we obviously can't support. So you will find 
us in great support of the Berry Amendment, but not in the 
extreme case.
    And we will work with you, Mr. Hayes, and I appreciate your 
instructive help and comments.
    Mr. Hayes. Thank you very much, Mr. Chairman.
    Minutiae don't matter, and we are standing ready to help 
you anytime.
    Secretary England. Thank you. Thank you.
    The Chairman. Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman.
    And, Mr. Secretary, thank you for being here.
    Secretary England. Mr. Taylor.
    Mr. Taylor. Mr. Secretary, I read your remarks and listened 
to your remarks. And I guess as one Member of Congress, I wish 
we could legislate a sense of urgency in your department. We 
saw it first with SAPI plates. I distinctly remember----
    Secretary England. Pardon me. With what?
    Mr. Taylor. SAPI plates, small arms protective inserts. I 
distinctly remember the Secretary early on saying not everyone 
needs them, just the frontline troops. So as guardsmen and 
reservists died needlessly, it eventually got fixed.
    Then we saw with up-armored Humvees, ``Not every vehicle 
needs to be up-armored.'' So as people died needlessly, it 
eventually got fixed.
    Jammers, I remember being told that when we went over in 
December of 2003 that our vehicles would have jammers, and I 
said, ``Well, great. What about the troops?'' ``Oh, not every 
vehicle needs them.'' So people died needlessly.
    Now we see with MRAPs. It took a retired Army colonel in 
January of 2005 to come see me and say, ``You know what? The 
South Africans have been using this for 20 years. Why aren't we 
using it?''
    And so if there is some frustration from Mr. Abercrombie, 
myself and others, it is that we apparently can't legislate a 
sense of urgency within the bureaucracy over there to do the 
things that will translate in saving people's lives.
    Let's go back to the MRAP.
    Secretary England. Mr. Taylor, now, look, I have to 
disagree with you.
    Mr. Taylor. The request issue was $400 million for MRAPs. 
This committee put in $4 billion, and then miraculously, that 
very day when we passed it on the House floor, former Secretary 
Pete Geren, former colleague, a friend, comes back and says, 
``Oh, did we say $400 million? We meant $18 billion.''
    Well, heck, why didn't he say that in January? And why 
didn't he work with us?
    And that is exactly how that timeline went down. And so 
that is the fourth example of people dying needlessly.
    Secretary England. I disagree, Mr. Taylor. I believe that 
is an inappropriate comment, and I do not agree with that. 
People have not died needlessly, and we have not left our 
people without equipment.
    Mr. Taylor. Well, why did it take so long to get the up-
armored Humvees? Why did it take so long to get the jammers on 
every vehicle? Why did it----
    Secretary England. Pardon me. We have had six versions, I 
believe, of up-armored Humvees, so we have continuously 
adapted. When you said every Humvee doesn't have armor, every 
Humvee outside the wire does----
    Mr. Taylor. Now.
    Secretary England [continuing]. And did.
    Mr. Taylor. We have been there since 2003.
    Secretary England. And did.
    Listen, as the threat has evolved, we have evolved with the 
threat. We have been upgrading Humvees. We went out and 
developed, I guess, a wide variety of jammers, depending on 
what the threat is.
    And the threat changes. It is an adaptable enemy. They are 
also very, very smart. And we continue to adapt. This is not 
just a static operation. It is a continual upgrade modification 
change. It is warfare. It is not just a constant out there. So 
we work very, very hard to be responsive to our troops in the 
field.
    Mr. Taylor. Again, at the beginning of this session and 
after questions were asked in 2005--what are we doing about 
MRAPs, what are we doing about we just described them as a V-
shaped hull vehicle--and it came back, ``Well, not every 
vehicle needs that. We just need a few.''
    So why does it take until the day that this committee 
passed the $4 billion on the House floor for the Secretary of 
the Army to come back and say, ``You know what? I need $18 
billion. I don't need $400 million.''
    You are telling me no one could see that coming? No one 
could recognize that the bottom of the Humvee was acting to 
shape the charge? That is why the gunner is being thrown around 
like a jack in the box? That is why the kids inside are losing 
their lives?
    Secretary England. Mr. Taylor, I think we need to take this 
into a more classified area. I don't want to say it in a----
    Mr. Taylor. I think that the enemy has figured that out, 
Mr. England.
    Secretary England. I think that is too simplistic a 
description and I think not appropriate for this discussion. I 
would be happy to talk to you about MRAPs. I would be happy to 
talk to you about the threats.
    I will tell you this. There is a continuing evolution in 
terms of equipment--there will continue to be--the numbers and 
types of those vehicles still being discussed in terms of what 
the threat is and how the threat is evolving. And that is a 
subject I would be happy to have a whole separate afternoon or 
hour with you.
    But I would not arrive at the conclusions you have arrived 
at, not based on the data and the information I know. And I 
believe it requires much more discussion than just sitting here 
in five minutes in an open committee hearing.
    Mr. Taylor. Mr. Secretary, I am going to tell you--and I 
know that you don't enjoy this any more than I do--but I have 
been to funerals and looked at moms and dads in the eye. And I 
usually don't have the guts to ask the mom or dad, so I ask an 
uncle or an aunt. And the answer in many instances is they were 
not in an armored Humvee. The answer in many instances is that 
they did not have a jammer, once the word got back to me.
    If it was good enough for the politicians when they ride 
around Iraq in 2003, then it should have been good enough for 
the troops in 2003. And if we knew about the need for up-armor 
by December of 2003--because I remember my colleague Mr. 
Simmons and I, who had just come back from trips about the same 
time, saying, ``How come my unit had to go weld some stuff on? 
How long did it take to fix that?''--the answer was, sir--and I 
will provide testimony to you--that not every vehicle needs it.
    Same mistake with the jammers. Same mistake with the up-
armor. And you are making the same mistake now on MRAPs. You 
are dragging your feet, and people are needlessly dying.
    Secretary England. That absolutely is categorically not the 
case. That is not a correct statement, Mr. Taylor.
    Mr. Taylor. What was the Administration's request for MRAPs 
this year in your Defense request? Do you want me to answer? 
$400 million. How many are you going to buy with $400 million?
    Secretary England. And we had money also in the 
supplemental last year for MRAPs, and we had money in the 
upgrade to the supplemental on MRAPs, and then we also asked 
for additional money for MRAPs, and we are----
    Mr. Taylor. And you wait till this summer to come back and 
say, ``No, we really need $18 billion.''
    Secretary England. And the question is the effectiveness, 
and that is something we should discuss off-line. Again, I 
believe this is not the appropriate discussion to have sitting 
here in this hearing, but I will be happy to meet with you and 
go through this in great detail.
    Mr. Taylor. I will meet with you at your convenience.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I have Mr. Akin and Mr. Johnson, and then the ranking 
member and I may have additional questions.
    Mr. Akin.
    Mr. Akin. Thank you, Mr. Chairman.
    I am on the Oversight Committee, and we just finished up 
the study on the Iraqi security forces. And a bunch of us were 
sitting around--Republicans, Democrats--kind of talking about 
that report, as we are finishing up on that.
    And one of the things that kind of came forward was--I 
don't know that it is even really included in the report--but 
there was a time when Bremer basically said we don't want any 
of these Baathists, the former military people that were 
military under Saddam, we don't want to adopt them as the new 
military people in Iraq, so we are going to basically say the 
former Baathists and these people are out of here.
    And when Bremer made that decision, the effect in the Army 
was all of a sudden, ``Hey, we weren't really planning this, 
but now we have got to come up with hundreds of thousands of 
Iraqi security forces that we have got to find and train and 
build into an organization'' in that the previous organization 
was pretty much let go by someone who was not military.
    The question is: Do we have a problem of jointness at the 
very top in the case of Bremer being someone who is non-
military versus military people and getting their signals 
straight as to how are we going to put together security forces 
for this new country, now that we have won the war?
    Is there sort of a jointness thing between--I don't know if 
you think of Bremer as State or not; I think he was kind of 
operating independently--but is that a difficulty from an 
organizational point of view?
    And if you think my premises are wrong and the question, 
fire away. I know you are not shy anyway, so----
    Secretary England. I am not shy, but frankly, I am just not 
familiar with the whole organization back at that time. That 
was just not in my area, and I am just not familiar how those 
decisions were made and who made those decisions. So I just 
can't help you there, sir. You are on a topic that is outside 
my knowledge.
    Mr. Akin. Do either one of the other gentlemen want to 
comment on that kind of scenario and the question about the 
Iraqi military, or is that sort of outside of where you----
    Secretary England. I don't think anybody here at this table 
was dealing with that issue back at the time of coalition 
provisional authority (CPA).
    Mr. Akin. Okay.
    Then the other question I had was, Mr. Brinkley, my 
understanding is you have been involved with trying to get some 
of the factories and different free enterprise and things going 
in Iraq.
    Do you run into the same problem that we are finding 
everywhere, that the big problem seems to be finding, in maybe 
Nixon's term, ``leadership-class people'' or people that are 
educated, literate, that have some level of integrity that you 
can put in charge of things? Is that a continuing problem that 
you are finding?
    Mr. Brinkley. I will divide the three: educated, literate 
and----
    Mr. Akin. Integrity.
    Mr. Brinkley [continuing]. Integrity. I will divide the 
three.
    The lesson that we have learned is that everything from a 
business perspective in Iraq is local. There are no 
generalizations one can apply to anything we found in factories 
in Iraq.
    We have assessed in detail over 60 manufacturing 
operations: forensic detailed assessments of the capacity, 
their leadership teams, their workforces, their customers, 
their suppliers. And in those cases, generally speaking, to 
apply a generalization, the issues of having a workforce in 
place, a talented management team, are not a problem in terms 
of our ability to get those localized factories restarted.
    The third category you mentioned is integrity, and that is 
something that has to be tested. I cannot comment on whether a 
particular factory manager is or is not corruptible or 
possesses integrity, but we have put processes in place so 
that, as we restart factory operations, every transaction that 
is executed is monitored in detail in partnership with the 
Iraqi government to ensure that there is nothing that takes 
place that would first and foremost put our forces at risk, but 
also contribute to a longstanding culture that was present 
there under the Baathist regime that encouraged corruption.
    And so that would be my response.
    Mr. Akin. So you are saying you have no trouble finding 
leadership people to run the factories particularly.
    Mr. Brinkley. I wouldn't say ``no trouble.'' There are 
cases, especially in areas of Baghdad, the Diyala province, 
parts of Al-Anbar where unrest is greatest, where we have seen 
a brain drain and people have fled areas of violence.
    But in the south and the north and even parts of Al-Anbar 
that have seen stabilization, surprisingly, one finds factories 
and workforces that are waiting to go back to work. And so 
those represent opportunities for us to go in and provide a 
sense of normalcy to a population that hasn't experienced a lot 
of normalcy in recent times. And we are going to take advantage 
of that.
    Mr. Akin. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    Mr. Chairman, I must apologize because I came in late to 
this hearing, though I did read the information before I came. 
But it all benefits to be here and listen to the full testimony 
and the dialogue between congressmen and the witnesses.
    And I do appreciate the witnesses being here.
    I wish to associate myself with the comments and questions 
that I have heard from Mr. Taylor, Mr. Abercrombie, and 
Chairman Skelton.
    I will say, though, that I do recognize that the problems 
at the Department of Defense in terms of the inefficiency of 
the processes there began long before you gentlemen arrived. 
And you all are part of the apparatus to help streamline the 
business systems and the financial systems, and it is a very 
extremely complicated task.
    I am not even in the position as a six-month member to ask 
an intelligent question about this issue, so I will decline to 
ask any questions, but I do appreciate the fact that Congress 
is exercising oversight.
    And since we are talking about the lives of human beings 
who are in theater, it makes it all the more important that we 
do the streamlining with all deliberate speed so that some of 
the issues that have been highlighted by Mr. Taylor, Mr. 
Abercrombie, and Chairman Skelton are not allowed to continue.
    And so I will end my comments with that, even though being 
a lawyer, it pains me to not have a question to be able to ask. 
Thank you.
    The Chairman. I thank the gentleman.
    I have one question. Before I ask you this, does Mr. Hunter 
have an additional question?
    Mr. Hunter. No, Mr. Chairman.
    I think I would like to pursue, Gordon, when we get a 
chance here, this handoff of the equipment, the transfer of 
equipment from our forces to Iraqi forces that I talked about 
early in the opening statement. So I know you are going to get 
back with us on that.
    I think that is kind of the order of the day, and that is 
percolating right now as a main--it is a long pole in the tent 
on this hand-over. So I have been briefing myself up after we 
talked initially.
    It is largely a State Department function because of 
foreign military sales, but I think we need to have a little 
prayer meeting with State, with you and with our warfighters 
and figure out how we are going to get this thing done quickly.
    Secretary England. Can I interrupt just a second and ask my 
staff a question here?
    Okay. We have passed that on after your comments, so people 
are working that right now, Mr. Hunter, and I just want to make 
sure we actually had somebody working it when you brought that 
up earlier. And so we will respond to you just as quickly as we 
can on that subject.
    Mr. Hunter. Okay. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Let's look at each of the separate services, if we may. My 
question is: Who fulfills the chief management officer duties 
of each of the services? Or, subject to your answer, should 
Congress designate someone, such as an Under Secretary of each 
service?
    Secretary England. Mr. Chairman, I would strongly recommend 
not designating a chief management officer in the service. That 
is the job of the Secretary of the service departments.
    For the service secretaries, that is their responsibility, 
and then they may choose to delegate that either to an Under 
Secretary or their Assistant Secretaries. Their Assistant 
Secretaries, frankly, are typically the experts, like their 
Financial Assistant Secretary for finance, for installation, 
for acquisition. And I would not put that in the Under 
Secretary.
    I believe you would dramatically weaken the Service 
Secretary if you said it had to be in the Under Secretary. I 
would leave that, frankly, to the discretion of each service 
Secretary to decide how to do that, based again on his team of 
both Under Secretary and Assistant Secretary.
    The Chairman. And let the buck stop with him or with her, 
whoever the case may be me.
    Secretary England. And I will tell you, I definitely want 
to be able to talk to the Service Secretary, not the under, for 
issues in the Department. So I would leave that at the service 
Secretary, Mr. Chairman.
    The Chairman. I appreciate it.
    Well, gentlemen, thank you for coming. We have met your 
deadline, you will notice. You have not turned to pumpkins. So 
we do thank you very, very much.
    Secretary England. And, Mr. Chairman, there is some 
feedback we said we would provide people with questions today. 
We will do that promptly. And again, thanks for the opportunity 
to comment. Thank you.
    The Chairman. Appreciate it. Thank you.
    [Whereupon, at 12:08 p.m., the subcommittee was adjourned.]
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                            A P P E N D I X

                             June 26, 2007

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             QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

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                   QUESTIONS SUBMITTED BY MR. SKELTON

    The Chairman. A brigade commander sends a request in from the field 
through Central Command: We need more jammers for a specific reason, 
which might require some research and development. The same brigade 
commander requests something that is already on the line, conventional 
Humvees.
    Trace those two requests, one that might require some research and 
development, though urgent, and the other something that is readily 
available. Trace that request from that brigade commander all the way 
through how it works through your office and how it gets back to that 
brigade commander.

    Trace request for readily available equipment:

    Secretary England. The brigade unit requirement for equipment or 
supplies is ordered by placing a requisition through the supply 
(supplies) and property book (Major pieces of equipment such as HMMWVs) 
automated systems. The unit's table of organization and equipment 
determines which equipment is authorized and the designated force 
activity (type of unit priority rating) and the urgency of need 
designation determine the speed by which the requisition is filled by 
the supply system (brigade supply system for stocked items) or 
wholesale system (for items non-stocked by the brigade or in short 
supply).
    Stockage levels and criteria for supplies are determined by the 
number of demands placed within a given number of days or by the 
economic order quantity type calculation. There are supply support 
activities within the brigade designed to receive, store, and issue 
supplies for the brigade and ordered by units and battalions within the 
brigade.

    Urgent trace request requiring research and development:

    Combatant commanders submit Joint Urgent Operational Needs (JUONs) 
to the Joint Staff (J-8), Deputy Director for Resources and Acquisition 
(DDRA). The DDRA validates all JUONs and forwards them to the Office of 
the Secretary of Defense, Joint Rapid Acquisition Cell (JRAC), which in 
turn, identifies potential solutions suitable for JUON resolution.
    The Fiscal Year 2003 National Defense Authorization Act (Section 
806, Rapid Acquisition and Deployment Procedures) directed that a 
process be established to streamline communications between the 
Chairman of the Joint Chiefs of Staff, acquisition community, and 
research and development community to include:

        a)   A process for the commanders of the combatant commands and 
        the Joint Chiefs of Staff to communicate their needs to the 
        acquisition and research and development community and

        b)   A process for the acquisition and research and development 
        community to propose items that meet the needs communicated by 
        the combatant commands and Joint Chiefs of Staff

    The Joint Rapid Acquisition Cell (JRAC) provides an effective means 
of quickly responding to the needs of the combatant commander while 
coordinating efforts between the acquisition and research and 
development communities.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. HUNTER

    Mr. Hunter. Number one, ascertaining what we have over there? What 
is available? Are there some trucks that are parked in Kuwait or in 
Iraq that could be transferred over?
    Number two, what is the present bureaucratic circuit for getting 
that done? Does that have to be ID'ed by the acquisition bureaucracy 
back here in the States and then implemented, a transfer has to be made 
pursuant to a foreign arms sale?
    Can a leader, for example, a divisional leader or General Odierno 
or General Petraeus say, ``Hey, we have got this stuff parked over 
there. You guys in our Iraqi counterparts over here need them. Go get 
it?'' Or is it a fairly complex circuit that has to be followed to be 
able to make that handoff of equipment?
    Because that appears to me to be something that is crucial right 
now to warfighting success in those two theaters. And I would say one 
indicia of an effective system is one that can move quickly to do what 
you have to do in the warfighting theaters.
    So what do you think? Is this something that can be handled easily 
or is it pretty complex and pretty burdensome?
    Secretary England. [See below.]

    USCENTCOM property accountability and visibility procedures:

    Property accountability and visibility in USCENTCOM is managed 
using the Standard Army Management Information Systems (STAMIS). Some 
examples of STAMIS systems are: Standard Army Retail Supply System 
(SARSS), the Standard Army Maintenance System (SAMS), Property Book 
Unit Supply Enhanced (PBUSE), the Logistics Support Agency (LOGSA), 
Logistics Information Warehouse (LIW), and Integrated Logistics Analyst 
Program (ILAP). These Web-based and interanet-linked systems provide 
worldwide Total Asset Visibility (TAV) and real-time data that enables 
logisticians to expedite processing and coordination of support to the 
warfighter. Currently, there is not a single system of record for 
managing and providing accountability and asset visibility across all 
branches of the United States Armed Services.

    How is excess military property transferred to the Iraq Security 
Forces?

    Excess property in Iraq is identified based on the operational 
needs of the warfighting units. Property identified by unit commanders 
as excess to their mission requirements is reported electronically 
through the chain of command via the Standard Army Management 
Information System (STAMIS) to the Multi-National Corps-Iraq (MNC-I) C4 
logistics directorate. The MNC-IC4 satisfies unfilled equipment 
requirements across the MNC-I area of responsibility, then validates 
the remaining items as excess. The excess items are reported to the 
Army Central Command (ARCENT) for redistribution throughout the 
theater. The remaining items are validated as excess and then given 
disposition instructions by ARCENT. If the equipment is not needed for 
American forces, the property is categorized as Foreign Excess Personal 
Property (FEPP).
    FEPP is defined as a US owned excess personal property located 
outside of the United States, American Samoa, Guam, Puerto Rico, Trust 
Territory of the Pacific Island, and the Virgin Islands. Selected FEPP 
is made available for transfer to the Iraqi Security Forces (ISF) based 
on property characteristics, service disposition instructions, 
redistribution/open purchase requirements, demilitarization (DEMIL) 
requirements, host-nation acceptance, and statutory authority. The 
authority to tranfer FEPP to the ISF has been delegated by the Deputy 
Under Secretary of Defense (Logistics & Material Readiness) to the 
Commander, MNF-I, and to the Deputy Chief of Staff for Resources and 
Sustainment. Current transfer authority allows for a maximum transfer 
of up to $5 million (acquisition value) of total FEPP per Forward 
Operating Base (FOB), up to a maximum of 79 FOBs.
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. COOPER

    Mr. Cooper. Mr. Secretary, for many of us on the committee, the 
issues are like swimming in molasses: it is slow and sometimes painful 
work. But in response to Mr. Bartlett's very helpful suggestion, I 
thought perhaps we could start with your statement that you have 
discovered 219 different regulations that apply to flag officers. If 
you wouldn't mind supplying that to the committee, perhaps we could 
start with that list and whittle it down, perhaps get rid of some of 
the unnecessary rules.
    Secretary England. [The information referred to was not available 
at the time of printing.]
                                 ______
                                 
                    QUESTIONS SUBMITTED BY MR. KLINE

    Mr. Kline. A couple of comments. You talked, as Mr. Thornberry 
said, about fewer and simpler regulations and more flexibility. And I 
think it is clear that we need that.
    But I want to go back to what Mr. Hunter was talking about, about 
the rapid acquisition authority that the Secretary has and how few 
times it has been used. He said twice. It was zero for a very long 
time, and frankly, I thought it was just one having to do with IED 
defense. So two is a terrific increase over what I thought.
    But I am shocked----
    Secretary England. The Department employs a broad toolkit to 
rapidly acquire items necessary to meet urgent warfighter needs. Each 
Service has rapid acquisition authorities that are used frequently to 
meet the majority of urgent warfighter needs. Additionally, the 
Department has established two organizations to meet urgent needs that 
are of an inherently joint nature: the Joint Improvised Explosive 
Device Defeat Organization (JIEDDO) and the Joint Rapid Acquisition 
Cell (JRAC).
    When the Department is notified by a Combatant Commander of an 
urgent need, it seeks to use the best and fastest possible method to 
respond. Most often, these needs are met directly by the individual 
Military Services. When an urgent need is identified as a joint 
requirement, the JRAC or JIEDDO provide support by validating the 
requirement and facilitating the transfer of funding to a Service 
Procurement Activity to meet the need.
    Congress provided the Department additional Rapid Acquisition 
Authority (RAA) in Section 806(c) of the FY 2003 NDAA (P.L. 107-314), 
as amended by Section 811 of the FY 2005 NDAA (P.L. 108-375). This 
authority compliments the existing rapid acquisition authorities of the 
Department of facilitating additional waiver authorities when required.
    At any point throughout the rapid acquisition process, whether 
through a Service or through the JRAC or JIEDDO, the Department may 
initiate the use of the RAA if it is necessary to meet the fastest-
possible fulfillment of an urgent warfighter need. However, when RAA is 
not required to meet an urgent need, the Department will reserve the 
use of the authority for swift acquisition needs that cannot be 
resolved within existing processes.
    Between September 2004 and May 2007, the JRAC expedited 25 projects 
worth $343.1 million. $322.6 million has come from Congress through the 
Iraq Freedom Fund and $20.5 million has come from directed Service 
funding. RAA has been used twice--once in April 2005 for Scorpion 
Jammers and once in June 2006 for Quick Reaction Dismounted Systems. 
For all other JRAC projects--and for the other Service and JIEDDO 
projects--rapid acquisition and fielding were possible without invoking 
specific RAA.
    Current acquisition authorities allow the Department to procure 
equipment and services essential to meet urgent warfighter needs 
rapidly, including waiving certain competition and testing 
requirements, when necessary. In cases where a statute or regulation 
impedes established rapid acquisition methods, the Secretary of Defense 
may use RAA to expedite the rapid acquisition process. He may, however, 
only do so for acquisitions of urgent equipment needs that have 
resulted in combat fatalities.
    RAA serves as a failsafe in the event that rapid acquisition 
initiatives run into any problems the law was intended to overcome. 
They complement existing rapid impediments to rapid fielding. The 
Department appreciates the support of Congress in providing a broad 
range of tools to facilitate the rapid acquisition of vital warfighter 
needs.

                                  
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