[Senate Hearing 112-590, Part 5]
[From the U.S. Government Publishing Office]



                                                 S. Hrg. 112-590, Pt. 5

 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 3254

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
   MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER 
                                PURPOSES

                               ----------                              

                                 PART 5

                   EMERGING THREATS AND CAPABILITIES

                               ----------                              

                 MARCH 20, 27; APRIL 17; JUNE 12, 2012


         Printed for the use of the Committee on Armed Services


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
2013 AND THE FUTURE YEARS DEFENSE PROGRAM--Part 5  EMERGING THREATS AND 
                              CAPABILITIES




                                                  S. Hrg. 112-590 Pt. 5

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

                                S. 3254

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2013 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND 
   FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE 
   MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER 
                                PURPOSES

                               __________

                                 PART 5

                   EMERGING THREATS AND CAPABILITIES

                               __________

                 MARCH 20, 27; APRIL 17; JUNE 12, 2012

                               __________

         Printed for the use of the Committee on Armed Services


        Available via the World Wide Web: http://www.fdsys.gov/



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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
DANIEL K. AKAKA, Hawaii              JEFF SESSIONS, Alabama
E. BENJAMIN NELSON, Nebraska         SAXBY CHAMBLISS, Georgia
JIM WEBB, Virginia                   ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri           SCOTT P. BROWN, Massachusetts
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
KAY R. HAGAN, North Carolina         KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska                  SUSAN M. COLLINS, Maine
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
JEANNE SHAHEEN, New Hampshire        JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York      DAVID VITTER, Louisiana
RICHARD BLUMENTHAL, Connecticut

                   Richard D. DeBobes, Staff Director

                 Ann E. Sauer, Minority Staff Director

                                 ______

            Subcommittee on Readiness and Management Support

                 KAY R. HAGAN, North Carolina, Chairman

JACK REED, Rhode Island              ROB PORTMAN, Ohio
MARK UDALL, Colorado                 SAXBY CHAMBLISS, Georgia
JOE MANCHIN III, West Virginia       SCOTT P. BROWN, Massachusetts
JEANNE SHAHEEN, New Hampshire        LINDSEY GRAHAM, South Carolina
KIRSTEN E. GILLIBRAND, New York      JOHN CORNYN, Texas

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
                 Cybersecurity Research and Development
                             march 20, 2012

                                                                   Page

Lemnios, Hon. Zachary J., Assistant Secretary of Defense for 
  Research and Engineering, Department of Defense................     4
Gabriel, Kaigham J., PhD, Acting Director, Defense Advanced 
  Research Projects Agency, Department of Defense................    10
Wertheimer, Michael A. PhD, Director, Research and Development, 
  National Security Agency.......................................    13
Peery, James S. PhD, Director, Information Systems Analysis 
  Center, Sandia National Laboratories...........................    14

The Department of Defense's Role in the Implementation of the National 
   Strategy for Counterterrorism and the National Strategy to Combat 
                     Transnational Organized Crime
                             march 27, 2012

Sheehan, Hon. Michael H., Assistant Secretary of Defense for 
  Special Operations/Low-Intensity Conflict......................    50
Reid, Garry, Deputy Assistant Secretary of Defense for Special 
  Operations and Combating Terrorism.............................    55
Wechsler, William F., Deputy Assistant Secretary of Defense for 
  Counternarcotics and Global Threats............................    56

 Health and Status of the Department of Defense Science and Technology 
                      Laboratories and Enterprise
                             april 17, 2012

Lemnios, Hon. Zachary J., Assistant Secretary of Defense for 
  Research and Engineering.......................................    91
Freeman, Dr. Marilyn M., Deputy Assistant Secretary of the Army 
  for Research and Technology....................................    99
Lacey, Mary E., Deputy Assistant Secretary of the Navy for 
  Research, Development, Test, and Evaluation....................   112
Walker, Dr. Steven H., Deputy Assistant Secretary of the Air 
  Force for Science, Technology, and Engineering.................   120

                                 (iii)
 Proliferation Prevention Programs at the Department of Energy and at 
                       the Department of Defense
                             june 12, 2012

Creedon, Hon. Madelyn R., Assistant Secretary of Defense for 
  Global Strategic Affairs, Department of Defense................   164
Harrington, Anne, Deputy Administrator for Defense Nuclear 
  Nonproliferation, National Nuclear Security Administration, 
  Department of Energy...........................................   171
Myers, Kenneth A., III, Director, Defense Threat Reduction 
  Agency, Department of Defense; and Director, U.S. Strategic 
  Command Center for Combating Weapons of Mass Destruction.......   173


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        TUESDAY, MARCH 20, 2012

                           U.S. Senate,    
                   Subcommittee on Emerging
                          Threats and Capabilities,
                               Committee on Armed Services,
                                                    Washington, DC.

                 CYBERSECURITY RESEARCH AND DEVELOPMENT

    The subcommittee met, pursuant to notice, at 3:04 p.m. in 
room SR-232A, Russell Senate Office Building, Senator Kay R. 
Hagan (chairman of the subcommittee) presiding.
    Committee members present: Senators Hagan and Portman.
    Majority staff members present: Richard W. Fieldhouse, 
professional staff member; Thomas K. McConnell, professional 
staff member; and Robie I. Samanta Roy, professional staff 
member.
    Minority staff members present: John W. Heath, Jr., 
minority investigative counsel; Daniel A. Lerner, professional 
staff member; and Michael J. Sistak, research assistant.
    Staff assistants present: Kathleen A. Kulenkampff, Hannah 
I. Lloyd, and Bradley S. Watson.
    Committee members' assistant present: Brent Bombach, 
assistant to Senator Portman.

      OPENING STATEMENT OF SENATOR KAY R. HAGAN, CHAIRMAN

    Senator Hagan. We're going to go ahead and open this 
hearing up. I know that Senator Portman is definitely coming, 
but is tied up, so I think we'll go ahead and start because I 
think you also know that we have some votes occurring this 
afternoon, and what I'd like to do is go ahead and get started.
    This afternoon, the Emerging Threats and Capabilities 
Subcommittee meets to review testimony on cybersecurity 
research and development (R&D), in review of the Defense 
Authorization Request for Fiscal Year 2013 and the Future Years 
Defense Program (FYDP). The topic of cybersecurity has been the 
subject of growing concern and has figured prominently, not 
only in the newest strategic defense guidance released in 
January of this year, but also in previous national security 
and defense planning documents.
    The 2010 national security strategy states that: 
``Cybersecurity threats represent one of the most serious 
national security, public safety, and economic challenges we 
face as a Nation.'' The recent strategic defense guidance lists 
as one of the primary missions of the U.S. Armed Forces the 
need to operate effectively in cybersecurity and space, which 
will require investments by the Department of Defense (DOD) in 
advanced capabilities to defend its networks, operational 
capability, and resilience in cybersecurity.
    The challenge DOD faces is to find resources to address 
this growing threat in an era where there are increasing 
budgetary pressures on investments in the future. To its 
credit, cyber is one of the few areas in which DOD actually 
increased its investments in the fiscal year 2013 budget 
request.
    The objective of this hearing is to gain a better 
understanding of DOD's cybersecurity R&D activities and how 
these activities support DOD's cybersecurity objectives. We 
would like to better understand the research challenges facing 
the cybersecurity R&D community, the diversity of approaches to 
solving these challenges and gaps if they exist. We would like 
to understand the interactions between DOD with other Federal 
agencies, such as the Department of Energy's (DOE) national 
laboratories, industry, and academia.
    We welcome the subcommittee ranking member, Senator 
Portman.
    The focus today will be on gaining a better understanding 
of mechanisms to rapidly develop, test, and field innovative 
approaches to address the expanding threat spectrum and whether 
appropriate coordination is present across all the various 
cyber research communities. In addition, we would like to 
address the status of DOD's cyber testing infrastructure as 
well as the health and status of its cyber workforce and DOD's 
ability to attract and retain the best and the brightest in the 
field.
    This hearing is planned to have both open and closed 
sessions. We're pleased to have four expert witnesses to help 
us understand these complex issues. Mr. Zachary J. Lemnios is 
the Assistant Secretary of Defense for Research and 
Engineering, and in this position he is DOD's Chief Technology 
Officer and oversees and coordinates DOD's broad cyber research 
portfolio across the Services and DARPA. In addition, Mr. 
Lemnios oversees DOD's efforts in science, technology, 
engineering, and mathematics (STEM) education efforts, of which 
cyber is an important element. The subcommittee looks forward 
to hearing about DOD's overarching strategies, plans, and 
programs in cybersecurity R&D.
    Dr. Kaigham J. Gabriel is the Acting Director of the 
Defense Advanced Research Projects Agency (DARPA). Created in 
the wake of the surprise launch of the world's first satellite 
by the Soviets in 1957, DARPA was created to prevent 
technological surprise to our Nation. DARPA is investing 
heavily in cyber-related research, with roughly $500 million 
requested over the FYDP, and has developed some innovative 
approaches to addressing emerging cybersecurity threats.
    I should point out that our original hearing notice listed 
Dr. Regina E. Dugan as the witness for DARPA. However, she is 
leaving DARPA for the private sector, and I would like to 
acknowledge Dr. Dugan's contributions to DARPA and sincerely 
thank her for her service to our country.
    Dr. Michael A. Wertheimer is the Director of Research and 
Development at the National Security Agency (NSA). The Director 
of NSA is also the Commander of the U.S. Cyber Command 
(CYBERCOM), so NSA is an indispensable partner in cybersecurity 
efforts. The subcommittee looks forward to hearing about the 
research activities at NSA and how they support DOD's 
cybersecurity objectives.
    Dr. James S. Peery is the Director of the Information 
Systems Analysis Center at Sandia National Laboratories, a DOE 
national laboratory at Albuquerque, NM, and a source of 
expertise on cybersecurity. We look forward to hearing how 
Sandia's activities are benefiting DOD.
    I really want to thank all of our witnesses for your 
service in the cause of our national security, and we look 
forward to your testimony. In order for us to have adequate 
time to discuss a broad range of topics, I do ask that our 
witnesses keep their opening remarks to no more than 5 minutes 
each. But we will include your full written statements in the 
hearing record.
    For the information of the members and our witnesses, I do 
want to indicate how we plan to proceed in light of the series 
of roll call votes scheduled at 4 o'clock today. We'll conduct 
the open portion of the hearing until we have to vote, and then 
we'll reconvene in room SVC-217 of the Capitol Visitor Center 
for the closed portion of the hearing after we finish voting. I 
think there's a series of three votes.
    Before we hear from our first panel, I'd like to turn to my 
colleague and ranking member, Senator Portman, for his opening 
remarks. Senator Portman.

                STATEMENT OF SENATOR ROB PORTMAN

    Senator Portman. Thank you, Madam Chairman. I appreciate 
your holding the hearing and look forward to the testimony from 
these well-informed and sophisticated witnesses, who can help 
us in a very important task.
    But before I do that, I must mention that this Friday the 
Bobcats of Ohio University are playing the Tar Heels, and I 
would like in public hearing----[Laughter.]
    Senator Hagan. Then we play NC State. [Laughter.]
    Senator Portman. We'll see, injuries aside. But anyway, 
since we beat number four seed Michigan, UNC shouldn't be a 
problem for the Bobcats. So we'll make a bet later, maybe 
chocolate Buckeyes and North Carolina barbecue sauce.
    This is a great opportunity for us to hear from you. Again, 
I look forward to doing it. This is the topic of the day. When 
you look at our budgets, you can see it. In a very tough budget 
environment, we see significant increases at DOD for cyber 
defenses, a $200 million increase from last year; Department of 
Homeland Security (DHS), $310 million increase from 2012. So, 
coupling these figures with the billions of dollars likely to 
be invested by the public or by the private side, private 
sector, universities and others, it's evident that we have a 
serious concern here and it's now being acknowledged, and that 
we view ourselves as being vulnerable to cyber attacks.
    These increases in spending do come at a time when we are 
looking at decreases in I guess what you would call our 
physical defenses. One of the purposes of this hearing I 
believe is to be sure that we are balancing those two. We can't 
ignore the threats posed to the technological infrastructure by 
terrorist groups and other adversaries, like rogue hackers, but 
we also can't win the battle in cyber alone. We have to have 
both, and as we're downsizing our military are we becoming too 
reliant on cyber defense, is one question I would like to have 
us discuss today.
    I think the answer, of course, is that our cyber 
capabilities should be complementing our kinetic forces and 
resources and making sure that we're working together.
    With the kind of increase in funding we're talking about 
here, of course, there's also the potential for some wasteful 
spending and duplication. So knowing better what the private 
sector is doing, universities are doing, is important too, and 
you have some great information there, I'm sure.
    I've heard from some of you about your concern about the 
workforce and particularly with more and more young people not 
getting into subjects like computer science, which are critical 
to cyber capabilities. We have to talk about how we can be sure 
that we have a workforce that's capable of defending America in 
these new ways. The STEM disciplines are something we all talk 
about. How do we actually make that a reality and what are your 
recommendations there?
    Then, as Chairman Hagan has pointed out, we have to be sure 
we're properly coordinating across the Federal Government, 
because again we have these new resources. Like all science and 
technology (S&T) programs we invest in, we have to be sure 
we're eliminating duplication and having a synergistic 
relationship between various agencies and departments. Again, 
you'll be very helpful to us understanding how we do that.
    This is just one more challenge we have as a country, isn't 
it? We have to be sure that we're spending our limited tax 
dollars in a difficult budget environment in the most prudent 
way possible.
    So this is a great witness panel--defense, intelligence, 
energy agencies--and we look forward to a frank assessment in 
both sessions today and a good sense of where you think our 
defenses are today and where we're going tomorrow.
    So thank you, Madam Chair. I look forward to the testimony.
    Senator Hagan. Thank you, Senator Portman.
    Secretary Lemnios, if you would like to begin.

 STATEMENT OF HON. ZACHARY J. LEMNIOS, ASSISTANT SECRETARY OF 
  DEFENSE FOR RESEARCH AND ENGINEERING, DEPARTMENT OF DEFENSE

    Mr. Lemnios. Yes. Good afternoon, Chairwoman Hagan, Ranking 
Member Portman. I have a short statement that I'd like to read 
and just leave my written testimony for the record.
    Last year, DOD issued its strategic guidance and strategy 
for operating in cyberspace that defined cyberspace as an 
operational domain. It was a landmark point, and it defined the 
critical element of cyber operations as a concept to enable 
business operations, military operations, and the command and 
control backbone for DOD--critically important.
    In fiscal year 2013, the President's budget request for DOD 
includes a $3.4 billion investment in cyber activities, of 
which $486 million is dedicated to S&T investments. This 
investment is significant and critically necessary to give DOD 
a complex set of cybersecurity responsibilities and challenges. 
The responsibilities extend beyond our enterprise systems to 
15,000 networks, the 7 million computing devices across 
hundreds of installations in dozens of countries around the 
globe which are used for business operations.
    That capability has to extend to include the mission-
critical command and control networks, our cyber physical 
systems, and our cyber radio frequency systems, and our 
communications systems that make up DOD's tactical systems. The 
emergence of networked tactical systems and cyber physical 
systems have created new opportunities for increased 
cybersecurity attack and disruption.
    When I think of cyber operations, I think of computer 
network defense of our enterprise IT systems and I think of 
computer network defense, attack, and exploitation of our 
tactical systems. In regard to mobile radio, a desktop terminal 
and an unmanned surveillance aircraft are all clients on our 
networks that need to be protected.
    This is an operational domain built upon measures and 
countermeasures, where tactical depth, operational innovation, 
and technology transition are the key ingredients for 
leadership.
    In mid-2009, we assembled the technology leaders from 
across government, industry, and academia to provide their 
insight into the fundamental challenges faced by DOD and the 
tactical approaches that are emerging in academia, precisely to 
the point, Senator, that you made regarding academia. We 
followed through on that insight and focused our cyber 
investments in four key areas. We focused on mission assurance, 
resilient architectures, agile operations, and foundations of 
trust.
    Over this past year I've added an additional area, a cyber 
measurement campaign. All of these are described in my written 
testimony.
    We realize the importance of ensuring that taxpayers' 
dollars are invested wisely and efficiently. We have the 
appropriate forms in place to ensure cybersecurity research is 
well-coordinated among DOD's organizations, among other Federal 
activities, and across all of government. Investments are also 
scrutinized by DOD's senior leadership through the recently 
established Cyber Investment Management Board.
    The key to success of all of our cybersecurity efforts is 
the talent, the workforce that we have in our laboratories, in 
academia, in industry, in our small business community, and the 
workforce of tomorrow. There are a number of programs underway 
to advance the cyber R&D workforce, and they are described 
again in our written testimonies.
    Madam Chairman, thank you for the opportunity to present 
these brief remarks and I look forward to questions from the 
subcommittee.
    [The prepared statement of Mr. Lemnios follows:]

             Prepared Statement by Hon. Zachary J. Lemnios

    Chairwoman Hagan, Ranking Member Portman, members of the 
subcommittee, thank you for the opportunity to submit this written 
testimony on the U.S. Department of Defense's (DOD) cybersecurity 
research and development activities.
    I am honored to be joined today by Dr. Michael Wertheimer, the 
Director of Research at the National Security Agency (NSA), Dr. Ken 
Gabriel, Deputy Director of the Defense Advanced Research Projects 
Agency (DARPA), and Dr. James Peery, Director of the Information 
Systems and Analysis Center at the Sandia National Laboratories.
    The Department has a comprehensive strategy for cyber operations, 
as conveyed in the recently published DOD Strategy for Operating in 
Cyberspace.\1\ This Strategy recognizes that cyberspace is an 
operational domain and a critical element to enable its military, 
intelligence, and business operations, including the movement of 
personnel and material and the command and control of the full spectrum 
of military operations. The fiscal year 2013 President's budget request 
includes a $3.4 billion investment in cyber activities of which $486 
million is for Science and Technology (S&T) activities across 
Department organizations, to include the Department's organizations 
testifying here today. This level of investment is significant. The 
President and the Secretary of Defense recognize the critical 
importance of ensuring the Department has the required capabilities 
across the full spectrum of operations--capabilities that protect the 
Department's enterprise and tactical systems against cyber attack; 
capabilities that ensure these systems will continue to operate 
effectively despite cyber attacks; and capabilities that ensure our 
Joint Forces dominate in any cyber warfare campaign waged against us.
---------------------------------------------------------------------------
    \1\ Department of Defense web site: Department of Defense Strategy 
for Operating in Cyberspace, July 2011.
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                    DEPARTMENT'S ENTERPRISE SYSTEMS

    While the cybersecurity challenges to the Department's enterprise 
information technology reflect those of the private sector in scale and 
scope, its operational challenges are significantly more complex. The 
Department operates over 15,000 networks and 7 million computing 
devices across hundreds of installations in dozens of countries around 
the globe. The Department's enterprise information technology systems 
rely upon commercial network service providers and include secure 
enclaves that protect business data and secure operational data. 
Breaches of these networks have an impact on national security. The 
cybersecurity threat to the enterprise is evolving on shorter timelines 
and with much more aggressive threats.\2\ By September 2011, over 70 
million cumulative malware threats were identified; augmented by a new 
class of tailored social engineering threats that target mobile 
platforms.
---------------------------------------------------------------------------
    \2\ McAfee web site: McAfee Threats Report: Third Quarter 2011.
---------------------------------------------------------------------------
    As a first step, the Department began implementation of the Host 
Based Security System (HBSS) in 2007.\3\ The HBSS solution is attached 
to each host (server, desktop, and laptop) in the Department and is 
managed by local administrators and configured to address known exploit 
traffic using an Intrusion Prevention System and host firewall.
---------------------------------------------------------------------------
    \3\ DISA Host Based Security System web site.
---------------------------------------------------------------------------
    In early 2011, the Department began an engagement with the 
industrial base, through the Enduring Security Framework to build a 
common threat understanding and best practices for the enterprise.\4\ 
Among the first efforts, this work has developed approaches for 
improving the security and integrity of computer system Basic Input 
Output System (BIOS) controls. These concepts have been certified by 
the National Institute of Science and Technology (NIST) and will be 
available to the Department through the private sector.\5\
---------------------------------------------------------------------------
    \4\ Parrish, Karen, American Foreign Press Services: Lynn Urges 
Partnership Against Cyber Threat, Feb. 15, 2011.
    \5\ NIST Tech Beat: Protecting Computers at Start-Up: New NIST 
Guidelines, Dec. 20, 2011.
---------------------------------------------------------------------------
                 TACTICAL SYSTEM VULNERABILITY SYSTEMS

    The Department's cybersecurity concerns extend beyond enterprise 
Information Technology, command and control, and network operations. 
Tactical system complexity and network dependency create new 
opportunities for cybersecurity attack and disruption of our 
warfighting platforms. Tactical systems include manned and unmanned 
platforms, munitions, control systems, where cyber network attack or 
exploitation could compromise mission effectiveness. ``Perimeter'' 
security techniques engendered by information systems security 
engineering and other cyber defenses lack sufficient defense for 
tactical systems should a perimeter defense be compromised. This is 
increasingly problematic as tactical systems grow in complexity and 
adversaries have more opportunities for exploit through supply chain or 
inherent tactical system software, hardware and firmware 
vulnerabilities. A ``system'' security approach is required for total 
mission assurance.
    The Department has revitalized its Program Protection policy and 
practice to apply system security principles to the design, development 
and fielding of tactical systems. Today's systems are built using a 
combination of COTS and DOD-unique hardware and software. In the past, 
the DOD was primarily focused on protecting the release of advanced 
technology contained in systems, but these systems must also be 
protected from insertion of malicious content through supply chain 
attack, and the defense of the system against unauthorized access, 
control, or alteration during operations. The Department is now 
applying a comprehensive program protection planning approach as 
systems mature through the acquisition lifecycle; performing 
vulnerability assessments, embedding system security engineering and 
supply chain risk management practices and reducing cyber 
vulnerabilities.6,7
---------------------------------------------------------------------------
    \6\ Department of Defense Instruction 5200.39: Critical Program 
Information (CPI) Protection Within the Department of Defense, Dec. 28, 
2010.
    \7\ Defense Acquisition Guidebook: Acquisition Protection Strategy 
for Program Managers: Program Protection Plan.
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         ENTERPRISE AND TACTICAL SYSTEMS CYBERSECURITY RESEARCH

    The challenge for the Department's research and engineering 
enterprise is to develop cybersecurity concepts that will enable the 
Department's enterprise and tactical systems to operate effectively in 
today's environment, and to lay the foundation for future capabilities 
against an increasing complex, capable, and ubiquitous cyber 
operational threat. Given the many cybersecurity attacks against the 
Department's networks we have seen over the past few years, we must be 
prepared to respond rapidly. However, we must also take the long view 
and seek fundamentally new concepts and capabilities for cybersecurity. 
There are no silver bullets that will completely eliminate the cyber 
threat. The Department's cybersecurity research investments are 
designed to build a strong technical foundation across the public-
private enterprise, supported by robust engineering, modeling, 
simulation and measurement campaigns.
    Four areas are under development to support the ``DOD Strategy for 
Operating in Cyberspace'' \1\ and have been shaped by a joint DOD and 
IARPA study. This study reported the independent views of technology 
leaders from across government, industry and academia who were asked to 
consider the fundamental challenges faced by Department and the 
technical approaches that are emerging in academia. The Department's 
research investments are designed to build technical foundations in the 
following areas:

         Mission Assurance: This focus will enable commanders 
        to successfully execute their missions whether in joint or 
        coalition environments, in the cyber domain and while under 
        cyber attack. This capability requires that our DOD commanders 
        be able to assess and control the cyber situation in the 
        context of the overall mission. Research in this area is in the 
        development of tools and techniques that enable efficient 
        modeling of blue, grey, and red behavior (cyber and kinetic) to 
        determine the correct course of action in the cyber domain.
         Resilient Infrastructure: Resiliency is the ability to 
        absorb and fight through cyber-attacks to complete the mission. 
        In the event of an attack, while network performance may 
        degrade, it will not fall below a given critical mission 
        derived level. Achieving this performance characteristic 
        involves developing capabilities that lead to recovery and 
        reconstitution of critical functions in milliseconds. The 
        research in this area is focused in two areas: integrated 
        architectures optimized to speed recovery to a known secure 
        state, and novel protocols and algorithms at the component 
        nodes within the architecture to distribute resiliency 
        mechanisms.
         Agile Operations: Agility refers to the ability of 
        systems to dynamically reshape their cyber posture as 
        conditions and goals change, both to escape harm and to thwart 
        the adversary. It requires that networks are able to rapidly 
        change attributes and operating conditions including attack 
        surfaces in near real time. The research in this area is 
        focused on enabling high speed responses with respect to 
        healing, network optimization, and protective cyber mechanisms.
         Foundations of Trust: Trust is confidence that our 
        systems--the devices, networks, and cyber-dependent functions - 
        perform as expected, and have not been comprised. DOD systems 
        use components that provide mixed trust levels; some components 
        are provided by domestic and foreign commercial sources, and 
        some components are special highly assured secure components. 
        The research objective for this area is to develop capabilities 
        that result in trustworthy systems even though the components 
        individually have varying degrees of trustworthiness. The 
        technical approach is to create models that characterize the 
        trust of the systems by observation and analysis of system 
        characteristics and behavior.

    The research in these thrust areas supports a range of applications 
including wired networks, mobile networks, cloud computing, tactical 
information technology, system security engineering, and trusted 
components for military systems.

                      CYBER TESTING INFRASTRUCTURE

    The Department's cyber testing infrastructure is comprised of 
approximately 60 facilities and ranges that support a wide array of 
activities including research, experimentation, developmental test, 
operational test, and training. Eleven of these ranges support cyber 
research and development, the balance are used for training and 
operational test and evaluation.
    The Department has embarked on a strategy to extend 
interoperability, threat models, traffic generation, and user behavior 
models for these ranges to support rapid development and test of new 
cybersecurity capabilities. The Department has testing infrastructure 
improvement programs in four key areas:

         cyber range automation technology that will enable 
        larger scale, faster turnaround, lower costs, and better 
        utilization of scarce test resources and expertise;
         high fidelity, validated emulations of cyberspace as 
        well as realistic mission scenarios, environment, adversary 
        models, and attack vectors;
         standardized data collection tool suites; and
         cyber measurement framework.

    We are exploring two options for how best to integrate cyber range 
capabilities with the Department's existing test and evaluation 
infrastructure, which currently supports traditional kinetic missions. 
The first is to aggregate many of the Department's cyber test resources 
in a single large cyber-kinetic range, with elements of traditional 
test ranges onsite. The second option is establish a number of smaller 
test ranges that can both work independently or be networked together 
and/or to kinetic test ranges, to support national-level tests and 
exercises. We plan to evaluate this trade space through a series of 
tests and pilot exercises during this fiscal year.

       COORDINATION AND TRANSITION OF CYBER RESEARCH INVESTMENTS

    Research and development efforts are well-coordinated among the 
Department's organization and other Federal and international 
organizations. Since taking office, I have personally met with 
operational and research leaders at NSA, Combatant Commands, Services, 
and Agencies to coordinate strategic research thrusts and investments, 
to assess results, and to identify gaps. Recently, the Department 
established the Cyber Investment Management Board (CIMB), comprised of 
the Department's policy, acquisition, and technology leaders, to 
provide strategic oversight of the Department's cyber investments 
supporting the enterprise information technology systems and system 
platforms.
    DOD cyber program research is coordinated among Department 
organizations through the DOD Cyber S&T Working Group. The membership 
of the Cyber Working Group includes representatives from across DOD's 
operational organizations, STRATCOM, CYBERCOM, NSA, DISA, the Joint 
Staff, and S&T organizations--the Service Labs and DOD Federally Funded 
Research and Development Centers. The Working Group's primary task is 
to develop a roadmap of research programs to include programmatic 
technical goals, milestones, and investment levels for the four 
cybersecurity research thrust areas.
    Interagency coordination takes place through multiple Federal 
working groups, including the Computer Security and Information 
Assurance Interagency Working Group--sponsored by the Network and 
Information Technology Research and Development subcommittee. Further 
coordination with our allies and partners occurs through the North 
Atlantic Treaty Organization Research and Technology Organization and 
the Technical Cooperation Program.
    Across the Department, our researchers are engaged with industry, 
academia, and other government laboratories to drive innovation in 
cybersecurity research and to rapidly transition concepts to 
operational use. Transition occurs through several channels. Some 
projects will be adopted for use in commercial technology and involve 
vendor modifications or the launch of new products. We have seen 
results in incubating new cybersecurity technologies for commercially 
available products through our Small Business Innovation Research 
program. Other projects involve technologies that require the 
development of custom components and are transitioned through the 
defense industrial base.
    While early research is performed under the management of the 
Service scientific organizations, much of the applied S&T research and 
development is carried out through Service laboratories. These 
organizations maintain connections with acquisition program executive 
offices, and engineering centers. Through these connections, the 
Service laboratories share results from emerging concepts and outline 
joint pilot efforts. These technologies will be available to mitigate 
vulnerabilities identified in program protection analysis and planning 
activities performed by program staffs.

      CYBER RESEARCH AND DEVELOPMENT (R&D) WORKFORCE AND SKILL SET

    I remain concerned that in emerging and very dynamic technical 
fields, such as cybersecurity, and system security engineering, the 
Department needs to build a strong workforce and needs access to the 
highest caliber technical talent in academia and industry. Formal 
educational programs address basic cyber threats and fundamental 
mechanisms of security, but not high end cyber threats, foundations of 
trust, adversarial reasoning, or game changing approaches. The 
Department's prospects for satisfying its cyber human capital needs 
remain challenging due to the following:

         Projected shortages of cyber R&D talent driven by the 
        dearth of clearable candidates electing studies in these areas; 
        this is one area we cannot outsource.
         Limited specialization in cyber academic programs; and
         Significant competition by the private sector.

    We are taking an active role in transitioning lessons learned from 
Cyber R&D to academia to improve cyber education. DOD involvement in 
the development of formal cyber education will provide interested and 
formally trained cyber graduates with visibility into research 
opportunities and career opportunities for public service.
    We have several programs underway to advance our cyber R&D 
workforce through Service labs, agencies, OSD, and national 
initiatives. I would like to highlight several of these:

         The Comprehensive National Cybersecurity Initiative 
        \8\ has used competitions to attract high school and college 
        students in cybersecurity. These include CyberPatriot National 
        High School Cyber Defense Competition \9\, U.S. Cyber Challenge 
        \10\, Department of Defense Cyber Crime Center (DC3) Digital 
        Forensics Challenge \11\, and National Collegiate Cyber Defense 
        Competition.\12\
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    \8\ The White House--National Security Council web site: The 
Comprehensive National Cybersecurity Initiative.
    \9\ CyberPatriot--National High School Cyber Defense Competition 
web site.
    \10\ National Board of Information Security Examiners web site: 
U.S. Cyber Challenge.
    \11\ Department of Defense web site: DC3 Cyber Crime Challenges.
    \12\ National Collegiate Cyber Defense Competition web site.
---------------------------------------------------------------------------
         The Centers of Academic Excellence in Information 
        Assurance Education \13\ recognizes schools with programs that 
        integrate research activities into the curriculum. The schools 
        serve as a source for DOD-academic researcher exchanges; of the 
        146 centers, 42 are focused on cybersecurity research.
---------------------------------------------------------------------------
    \13\ National Security Agency, Central Security Service web site: 
National Centers of Academic Excellence in Information Assurance 
Education.
---------------------------------------------------------------------------
         The DOD Information Assurance Scholarship Program is a 
        recruitment, retention and academic capacity-building 
        program.\14\ Since the inception of the program in 2001, DOD 
        has sponsored over 470 scholars to complete a degree in a 
        cyber- or information assurance-related field of study.
---------------------------------------------------------------------------
    \14\ Department of Defense web site: DOD Information Assurance 
Scholarship Program.
---------------------------------------------------------------------------
         Air Force Office of Scientific Research (AFOSR) 
        Multidisciplinary University Research Initiatives (MURI): MURIs 
        fund consortiums of universities for complex research problems. 
        AFOSR has six MURI research teams addressing four cybersecurity 
        topics. In total over 140 graduate students, 19 post docs and 
        10 undergraduate students are being trained in the field at 29 
        universities.
         Service Lab R&D Involvement with Academia: Over the 
        past 10 years, the Information Directorate (AFRL/RI) educated 
        top ROTC cadets and civilian college students on the science of 
        information assurance and trained them in cyber warfare. These 
        programs have graduated over 300 cyber warriors.
         The Naval Postgraduate School (NPS) Cyber Academic 
        Group \15\ includes course work on cyber operations and 
        planning. Semi-annual Cyber Wargame courses are open to all NPS 
        students. A Cyber Battle Lab with classified and unclassified 
        segments supports interdisciplinary education and research 
        spanning student theses and large projects involving government 
        agencies, DOD, industry, and academia.
---------------------------------------------------------------------------
    \15\ Naval Postgraduate School web site: Cyber Academic Group
---------------------------------------------------------------------------
         National Security Agency's Cyber Defense Exercise 
        (CDE) was conceived to evaluate the effectiveness of the IA 
        education instilled at the service academies. DOD provides Red 
        Team participants to this exercise annually to evaluate the 
        performance of the cadets in securing a network. The overall 
        CDE goal is to generate interest among students nation-wide to 
        engage in challenging cybersecurity problems. A team of 38 
        cadets won the 2011 CDE for the Army.

                                SUMMARY

    Soon after coming into office, President Obama identified 
cybersecurity as one of the most serious economic and national security 
challenges facing our Nation. DOD faces particular challenges to its 
enterprise information technology systems and to its tactical systems. 
The emergence of networked tactical systems and cyber-physical systems 
has created new opportunities for increased cybersecurity attack and 
disruption.
    In response to these threats, we are building a strong technical 
foundation across the research and engineering enterprise. DOD will 
develop concepts to enable enterprise and tactical systems to operate 
effectively in today's environment, and to lay the foundation for 
future capabilities against an increasing complex, capable, and 
ubiquitous cyber operational threat.

    Senator Hagan. Thank you, Secretary Lemnios.
    Dr. Gabriel, if you'll go next. Thank you.

STATEMENT OF KAIGHAM J. GABRIEL, PhD, ACTING DIRECTOR, DEFENSE 
    ADVANCED RESEARCH PROJECTS AGENCY, DEPARTMENT OF DEFENSE

    Dr. Gabriel. DARPA's role in the creation of the Internet 
means we were party to the immense opportunities the Internet 
created and we share in the intense responsibility of 
protecting it. While national policymakers will ultimately 
determine how cyber capabilities will be employed, DARPA's 
responsibility is to explore the outer boundaries of such 
capabilities so that the United States is best prepared for 
future challenges.
    Chairwoman Hagan, Ranking Member Portman, members of the 
subcommittee: My name is Ken Gabriel. I am the Acting Director 
of DARPA. DARPA's bottom-line message today is that DOD is 
capability-limited in cyber, both defensively and offensively. 
We need to change that.
    It goes without question that a complete picture of the 
cyber threat should inform policies and laws related to DOD's 
cybersecurity efforts. Such decisions depend on a complete 
understanding of the threats and opportunities, an 
understanding that can be supported by our discussions today, 
but one that will remain incomplete. The complete picture 
requires a discussion at the special access level.
    In this unclassified discussion, much of what we can share 
you already know. Attackers can penetrate our networks. Users 
are the weakest link in cybersecurity. The defense supply chain 
is at risk. Physical systems are at risk, and the United States 
continues to spend billions on cybersecurity with limited 
increase in protection.
    Our approach to cybersecurity is dominated by a strategy 
that layers security onto a uniform architecture. This approach 
is taken for good reason, to protect against known threats and 
to create tactical breathing room. But it is not convergent 
with a growing and evolving threat. That's the defensive 
picture.
    With respect to cyber offense, modern warfare will demand, 
as you said Senator Portman, the effective use of both cyber 
and kinetic means. The tasks required for military purposes are 
sufficiently different that we cannot simply scale 
intelligence-based cyber capabilities and adequately serve the 
needs of DOD.
    Features that are vital for intelligence-based 
capabilities, such as nonattribution and persistence, are 
typically not as critical for DOD operational cyber 
capabilities. For example, a cyber exploit that always causes 
the target system to crash is not much of an intelligence 
exploit. But it may be exactly the effect that a DOD mission 
calls for.
    DARPA activities are part of the larger effort within the 
whole-of-government at NSA, the newly formed CYBERCOM, the 
Services, and as appropriate, DHS. DARPA's engagement in 
defensive and offensive cyber is not new. DARPA's expanded 
efforts build on an existing foundation and continuing 
contributions to cyber. DARPA-developed technologies are widely 
prevalent in military, intelligence, and commercial use today, 
but there is still much to do.
    From our vantage point, the greatest vulnerability in cyber 
offense for DOD is the lack of capabilities with 
proportionality, speed, and diversity of effects.
    Thank you.
    [The prepared statement of Dr. Gabriel follows:]

                   Prepared by Dr. Kaigham J. Gabriel

    The Defense Advanced Research Projects Agency's (DARPA) role in the 
creation of the Internet means we were party to the immense 
opportunities the Internet created and share in the intense 
responsibility of protecting it. While national policymakers, not 
DARPA, will determine how cyber capabilities will be employed to 
protect and defend national security interests, the agency has a 
responsibility to explore the outer boundaries of such capabilities so 
the United States is best prepared for future challenges.
    The following comments are unclassified. To understand the complete 
picture of the DOD cyber challenges and DARPA's contributions, 
classified discussions at the special access level are essential. 
DARPA's bottom line: DOD is capability limited, both defensively and 
offensively. We need to fix that.
    Chairwoman Hagan, Ranking Member Portman, and members of the 
subcommittee, my name is Regina E. Dugan. I am the Director of the 
Defense Advanced Research Projects Agency. I appreciate the opportunity 
to discuss DOD's cybersecurity research and development activities at 
DARPA.
    DARPA has a multidecade history in cyber. Agency activities across 
the full spectrum of conflict have significantly changed the Nation's 
toolbox of capabilities.
    In today's unclassified discussion, we can focus on the challenges 
of cyber defense, informed by our analytic framework. These challenges 
include:

         Attackers can penetrate our networks: In just 3 days 
        and at a cost of only $18,000, the Host-Based Security System 
        was penetrated.
         User authentication is a weak link: 53,000 passwords 
        were provided to teams at Defcon; within 48 hours, 38,000 were 
        cracked.
         The Defense supply chain is at risk: More than two-
        thirds of electronics in U.S. advanced fighter aircraft are 
        fabricated in off-shore foundries.
         Physical systems are at risk: A smartphone hundreds of 
        miles away took control of a car's drive system through an 
        exploit in a wireless interface.
         The United States continues to spend on cybersecurity 
        with limited increase in security: The Federal Government 
        expended billions of dollars in 2010, but the number of 
        malicious cyber intrusions has increased.

    After months of original data collection and analysis, DARPA's 
conclusion is that the U.S. approach to cybersecurity is dominated by a 
strategy that layers security onto a uniform architecture. This 
approach is taken to create tactical breathing space, but it is not 
convergent with an evolving threat.
    DARPA's recent testimony before Congress highlighted how cyber 
threats jeopardize National Security to the point of keeping the Agency 
leadership awake at night. Malicious cyberattacks are not merely an 
existential threat to DOD bits and bytes; they are a real threat to 
physical systems--including military systems--and to U.S. warfighters. 
The Unites States will not prevail against these threats simply by 
scaling our current approaches.
    That's the defensive picture. With respect to cyber offense; 
DARPA's belief is that the Department must have the capability to 
conduct offensive operations in cyberspace to defend our Nation, 
allies, and interests. To be relevant, DOD needs cyber tools to provide 
the President with a full range of options to use in securing our 
national interests. These tools must address different timescales and 
new targets, and will require the integrated work of cyber and 
electronic warfare at unprecedented levels.
    Modern operations will demand the effective use of cyber, kinetic, 
and combined cyber and kinetic means. The shelf-life of cyber tools and 
capabilities is short--sometimes measured in days. To a greater degree 
than in other areas of Defense, cybersecurity solutions require that 
DOD develops the ability to build quickly, at scale, and over a broad 
range of capabilities. This is true for both offensive and defensive 
capabilities. To be sure, the list of needed capabilities is long.
    Specifically, the tasks required for military purposes are 
sufficiently different so that we cannot simply scale intelligence 
cyber capabilities and adequately serve the needs of DOD. Rather, cyber 
options are needed that can be executed at the speed, scale, and pace 
of our military kinetic options with comparable predicted outcomes.
    A great deal of time is spent on determining the cyber governance 
structure, rather than resolving the inevitable question that follows: 
``What now?'' The lack of capability is the overwhelming issue. Further 
oversight strategies must be updated and be at pace with the threat.
    DARPA activities are part of a larger whole within national 
security at the National Security Agency, the newly formed U.S. 
CYBERCOM, the Services, the private sector, universities, nonprofits 
and, as appropriate, the Department of Homeland Security.
    Clearly, the challenges of cyberspace require the concerted efforts 
of many. We all must be protectors of and operate within cyberspace.
    The Agency is ready to meet a continuing responsibility in advisory 
roles during the formation of policy and legal frameworks, because new 
policies and laws--domestic and international--must be executable, 
enforceable, and sustainable.
    To be of use, such policies and laws will demand evaluation and 
adjustment on timescales that correspond to the dynamic nature and 
compressed evolutionary timescales of advances in cyberspace. That 
means moving faster than accustomed.
    The complete picture of the cyber threat should inform such 
policies and laws. Truly understanding the threat, however, cannot come 
from unclassified discussions.
    DARPA's engagement in cyber is not new. The Agency's expanded 
effort builds on an existing foundation and continuing contributions to 
cyber. DARPA-developed technologies are widely prevalent in military, 
intelligence, and commercial use today. But there is still much to do.
    Thank you.

    Senator Hagan. Thank you.
    Dr. Wertheimer.

STATEMENT OF MICHAEL A. WERTHEIMER, PhD, DIRECTOR, RESEARCH AND 
             DEVELOPMENT, NATIONAL SECURITY AGENCY

    Dr. Wertheimer. Madam Chairman, Ranking Member Portman: 
Thank you very much for inviting NSA Research today. NSA 
Research is unique in the Intelligence Community. Of all 16 
components in the Office of the Director of National 
Intelligence, we are the only component with in-house research, 
a national government workforce that's dedicated to providing 
research. We do very little program management. We're 
supporting both the information assurance and the signals 
intelligence (SIGINT) mission of NSA.
    We do that with a very, very highly skilled technical 
workforce, better than a third of which have PhDs, another 
third masters, and just under a quarter have bachelor's 
degrees.
    Our legacy is mostly in cryptography and in the design and 
breaking of encryption. Over the past 10 years, in the living 
laboratory that really is the SIGINT system, we have seen our 
mission grow in defensive cyber and offensive cyber. NSA 
Research is responsible for virtually all the major tool sets 
that we deploy both offensively and defensively. We're very 
proud of that legacy.
    But I would be remiss in not sharing with you things that 
concern me most at night when I go to sleep. First, the 
production of computer scientists in our Nation is on the 
decline. I can share facts and figures with you. We are not 
recruiting and retaining them. There are things we can and must 
do to retain them that we are not.
    I am concerned also that the investments from Congress and 
from the people in research is almost all period of performance 
of 1 year or less that I see. It's to build tools, it's to be a 
rapid deployment of capability. I rarely get the opportunity to 
think 3 years down the line even in research. The money that 
comes to us has very directed purpose. I will tell you in 
closed session many of the wonderful things we're doing with 
that money, but I feel that the Nation is a little frightened 
to think much beyond 1 or 2 years on this problem, and that 
keeps me up at night as well.
    Most of the examples I'd like to share with you in closed 
session, so I'll conclude my remarks at that point.
    [The prepared statement of Dr. Wertheimer follows:]

              Prepared Statement by Dr. Michael Wertheimer

                              INTRODUCTION

    Madam Chairman Hagan, Ranking Member Portman, distinguished members 
of the committee, thank you for the opportunity to discuss my Agency's 
collaborative efforts on cyber research and development. First, I want 
to take this opportunity to thank you for the support this committee--
and Congress--has given us.

               OVERVIEW OF CYBER RESEARCH AND DEVELOPMENT

    Throughout the past 6 decades, NSA Research has delivered deep and 
important science that has enabled many Intelligence Community 
breakthroughs. Our legacy extends from cryptology to high performance 
computing. We were early pioneers in fields ranging from computer 
science to digital communications. Today we find ourselves developing 
new science in such diverse fields as data storage, microelectronics, 
and cloud computing. We have extremely deep expertise in Science, 
Technology, Engineering, and Mathematics--the so-called STEM--
disciplines especially as they relate to our core missions: Signals 
Intelligence and Information Assurance. With this diversity of skills 
and depth of experience, we find ourselves at the center of a number of 
government-wide cyber activities. We are a core member of the 
Department of Defense Cyber Network Operations Science and Technology 
Steering Council and its Priority Steering Committee. NSA Research is a 
co-chair of the Office of Science and Technology Policy Special Cyber 
Operations Research and Engineering (SCORE) Interagency Working Group 
and we are an active member on the Intelligence Community's Cyber 
Security and Information Assurance interagency working group. We 
participated in the assistant Secretary of Defense (R&E) Cyber workshop 
series crafting the DOD-wide cyber vision, thrusts and roadmaps. The 
SCORE committee coordinates cyber research across all Federal 
departments and ensures that the Comprehensive National Cybersecurity 
Initiative unclassified research efforts are integrated into an overall 
cyber research and development plan.
    NSA Research also has a leadership role in the nongovernment cyber 
R&D community. For example, we are members on the Joint Advisory 
Committees of MIT Lincoln Labs and CMU Systems Engineering Institute 
and sit on the cyber advisory board for the University of Maryland. We 
also participate on evaluation boards for Department of Energy National 
Laboratory cyber-related internal research proposals.
    NSA commitment to growing the quality and quantity of U.S. science, 
technology, engineering, and mathematics students is a model for 
government. We work with universities in many ways, ranging from our 
Center of Academic Excellence program, which identifies and supports 
excellence in information assurance and cyber network operations, to 
direct program support and curriculum discussions. We sponsor and 
support events such as the ``Capture the Cyber Flag'' inter-university 
competitions, involve student interns in our research, and maintain a 
strong grants program. Nevertheless, the United States is neither 
graduating nor recruiting to government sufficient numbers of computer 
scientists to meet the demand. Indeed, in 2010 there were only 726 
Computer Science PhDs awarded to U.S. citizens. Of them, only 64 
elected to join government.\1\ This is an area where we need to 
redouble our efforts to attract the Nation's best and brightest to 
government service.
---------------------------------------------------------------------------
    \1\ Computing Research Association, Taulbee Survey Report 2009-
2010.
---------------------------------------------------------------------------
    As my colleagues here today can and will attest, cybersecurity 
demands tremendous diversity of thinking and broad collaboration. We 
understand, together, the need to not only deliver immediate 
capabilities, but to invest in long-term disruptive innovation. NSA is 
a leader in this regard and will continue to outpace much of industry 
and academia for years to come. Our talented and dedicated workforce is 
our strength, your support crucial, and the common purpose shared by 
colleagues here,today the path to success.
    We have tremendous offensive and defensive capabilities in 
cyberspace. Maintaining that advantage, growing it, and ultimately 
providing mastery over cybersecurity is our contract with the Nation. I 
look forward to sharing with you specifics of our strategy in closed 
session.
    I welcome your questions. Thank you.

    Senator Hagan. Thank you.
    Dr. Peery.

STATEMENT OF JAMES S. PEERY, PhD, DIRECTOR, INFORMATION SYSTEMS 
         ANALYSIS CENTER, SANDIA NATIONAL LABORATORIES

    Dr. Peery. Chairman Hagan and Ranking Member Portman: Thank 
you for giving me the opportunity to testify today. I'm James 
Peery, Director of Information Systems Analysis Center at 
Sandia National Laboratories. As you may know, Sandia is a 
multi-program national security laboratory owned by the U.S. 
Government and operated by Sandia Corporation for the National 
Nuclear Security Administration (NNSA).
    Sandia is one of three NNSA laboratories with 
responsibility for stockpile stewardship and annual assessment 
of the Nation's nuclear weapons. But within the U.S. nuclear 
weapons complex, Sandia is uniquely responsible for assuring 
that U.S. nuclear weapons cannot be used without the 
President's intent. It's because of this responsibility that 
Sandia has had an extensive cyber R&D program for over 50 
years, with a rich history of providing vulnerability and 
adversarial threat assessments for U.S. nuclear command and 
control systems.
    Although nuclear weapons remain Sandia's core mission, 
because of these capabilities, it has been able to support 
other agency missions in national security, including 
nonproliferation, counterproliferation, counterterrorism, 
Defense, Energy, and Homeland Security. In all of these areas, 
I think you recognize that cyber is a key element.
    My written statement focuses on the questions you raised, 
including the challenges and technical developments in 
cybersecurity, along with how the DOE laboratories contribute 
to the DOD mission in cybersecurity.
    There are three points I'd like to emphasize. First, today 
the DOE laboratories are a resource to DOD in raising the bar 
to our adversaries in cybersecurity. I am very confident that a 
large part of DOD is aware of where the cyber talent lies or 
resides within the DOE laboratories and has effectively used 
DOE procedures to acquire that talent.
    The second point is--and I think you're aware of this--
there is no silver bullet to solve the existing cyber problem. 
That's true for DOD, DOE, and the private sector. It's 
virtually impossible to make an absolutely secure information 
technology system. However, with sustained and coordinated 
investments and deployment of government-owned S&T, we can 
dramatically change the cost equation to our adversaries.
    Third, compliance-based security is not effective. We need 
a set of metrics to objectively measure system security. New 
technologies and policies should be evaluated and adopted based 
on how they objectively improve system security and how much 
they cost. This is not a static process. The adversary will 
adapt.
    Specific to the committee's requested questions, on the 
area of encryption versus network security, I would just like 
to point out that they shouldn't be viewed as competing 
alternatives. Better network security and careful use of high-
quality encryption significantly raises the adversary's costs, 
but unfortunately today the driver in IT systems is cost 
reduction. Diversity is another way to increase the cost, but 
today again cost reduction is the predominant driver in IT.
    The question of transition from signature-based detection 
of attacks to behavioral-based detection. I just point out--we 
can talk more in closed session about this, but new classes of 
anomaly detection methods have been developed and are based on 
aggregating events across time and multiple sources to identify 
network and host-based behavior that might be malicious. These 
approaches and behavioral-based methods have been successful in 
finding previously undiscovered malware. One drawback of this 
technology, though, is that it has a very high false positive 
rate.
    I think I'll conclude my comments now on the issue of 
workforce within Sandia, which I can speak on and is near and 
dear to my heart. I believe, as was said earlier, confronting 
today's cyber challenges requires a highly skilled and 
motivated research community. It's well-documented that the 
demand for cyber expertise greatly exceeds the supply.
    At Sandia, through several enticement programs we've been 
able to attract and hire some of the top U.S. students, both at 
the undergraduate and graduate level. But I would like to draw 
your attention that retention is a growing concern. Although 
the importance of the national security mission and job 
stability remain highly attractive features to our employees, 
new hires today receive benefits similar to those found in U.S. 
industry, so we should start expecting that in this area that 
we might see retention rates approaching that of U.S. industry, 
which is approximately 5 years.
    The reason this is a concern is that historically the 
laboratories have been asked to solve some of the impossible 
problems, and that requires a cadre of senior experienced staff 
members. Just like in nuclear weapons, the government level of 
resources in cyber--to get the skills to the level the 
government needs usually takes between 3 to 5 years. If the 
retention rate is around 5 years, then we have a growing 
problem of trying to keep those people around to solve the 
impossible problems.
    Presently, many of Sandia's cyber staff are being solicited 
by private companies offering greater than 50 percent increases 
in salary and better benefits. We've been very fortunate that 
historically we've only been losing on the order of about less 
than 1 percent annually in the area of cyber, but this year we 
expect to reach approximately 10 percent loss in our staff to 
outside employment.
    Just in summary, I'd say that the DOE labs complex has a 
deep reservoir of technical talent and S&T capabilities that 
have helped address some of the government's most challenging 
national security problems, including the cyber area, and I 
look forward to the closed session to be able to tell you about 
some of those accomplishments.
    Thank you.
    [The prepared statement of Dr. Peery follows:]

                 Prepared Statement by Dr. James Peery

                              INTRODUCTION

    Chairman Hagan, Ranking Member Portman, and distinguished members 
of the Senate Armed Services Committee, thank you for the opportunity 
to testify. I am James Peery, Director of the Information Systems and 
Analysis Center at Sandia National Laboratories. Sandia is a multi-
program national security laboratory owned by the United States 
Government and operated by Sandia Corporation for the National Nuclear 
Security Administration (NNSA).
    Sandia is one of the three NNSA laboratories with responsibility 
for stockpile stewardship and annual assessment of the Nation`s nuclear 
weapons. Within the U.S. nuclear weapons complex, Sandia is uniquely 
responsible for the systems engineering and integration of nuclear 
weapons in the stockpile and for the design, development, and 
qualification of all non-nuclear components of nuclear weapons. While 
nuclear weapons remain Sandia`s core mission, the science, technology, 
and engineering capabilities required to support this mission position 
us to support other aspects of national security as well. Indeed, there 
is natural, increasingly significant synergy between our core mission 
and our broader national security work. This broader role involves 
research and development (R&D) in nonproliferation, counter 
proliferation, counterterrorism, energy security, defense, and homeland 
security. With the United States growing dependence on information 
technology, cyber security has become a key foundation in all of these 
areas.
    Sandia's extensive cyber R&D program is rooted in its rich history 
of providing adversarial threat assessments for the U.S. nuclear 
command and control systems. This program draws heavily upon our core 
science and technology (S&T) capabilities. These S&T investments afford 
the Nation the ability to leverage world-leading capabilities in 
advanced analytics, trusted microelectronics, and modeling and 
simulation. Sandia's differentiating value comes from its unique 
systems approach integrating scientific understanding, technology 
development, and complex requirements-driven engineering to develop 
solutions.
    Sandia has developed a comprehensive understanding of mission needs 
and constraints through its longstanding relationship with key 
government agencies. Working in partnership with government, other 
national laboratories, academia, and industry, Sandia has been a key 
to:

         Providing technical leadership in threat-informed 
        information assurance technology development and assessment
         Serving as an operational model for information 
        security--with a goal of defining effective operational 
        security guidelines and practice for Sandia, other government 
        agencies, and high-value private-sector networks
         Expanding the cadre of highly-skilled cyber 
        professionals through its hands-on research internship program
         Functioning as a hub that works at the intersection of 
        academia, national laboratories, industry, and government to 
        drive cyber innovation and advance the overall national and 
        global cyber health

    My statement today will focus on a number of the challenges and 
technical developments in cyber security along with how the Department 
of Energy (DOE) laboratories contribute to the Department of Defense 
(DOD) mission in cyber security. I have been employed within the DOE 
labs for 22 years collectively, 17 of those years at Sandia National 
Laboratories, where I have done research in high performance computing 
and high energy density physics. Within management, I have led teams in 
cyber security, computational physics, high performance computing, 
nuclear weapons R&D and hydrodynamic testing. For the past 2 years, it 
has been my privilege to lead the organization at Sandia that 
represents the largest collection of cyber experts within the DOE 
laboratories. My testimony represents the vast knowledge that they have 
imparted to me.

                     MAJOR POINTS OF THIS TESTIMONY

    It is the belief of a Sandia team of cyber security experts that:

    1.  The DOE laboratories are a resource to DOD in ``raising the 
bar'' to the adversaries in cyber security. We believe that a large 
part of the DOD is aware of where the cyber talent resides within the 
DOE laboratories and has effectively used DOE procedures to acquire 
that talent.
    2.  A silver bullet for solving the ``cyber problem'' for DOD, DOE, 
dot-gov or the private sector does not exist. It is impossible to make 
an absolutely secure information technology (IT) system. Sustained and 
coordinated investment in and deployment of government-owned science 
and technology could dramatically change the cost equation for our 
adversaries.
    3.  Compliance-based security and attempting to secure the 
perimeter are not effective. We need a set of metrics to objectively 
measure system security. New technologies and policies should be 
evaluated and adopted based on how they objectively improve system 
security and how much they cost. This is not a static process as 
adversaries also adapt.

    Based on the committee's request, the following topics are 
addressed:

    1.  Mechanisms to rapidly develop, test, and field innovative 
approaches to address the expanding threat spectrum
    2.  Research on network security versus data encryption
    3.  Research on the transition from signature-based detection of 
attacks to behavioral detection
    4.  Test and evaluation infrastructures at various classification 
levels (e.g. digital sandboxes)
    5.  Other research priorities
    6.  Workforce issues
    7.  Coordination across the community

    More can be said about these topics in a closed session.
    1. Mechanisms to rapidly develop, test, and field innovative 
approaches to address the expanding threat spectrum: This issue is 
particularly relevant in the cyber domain, given the rate of change of 
both technology and threats. Historically, national security technology 
has evolved on the time scales of years. In the cyber realm, new 
exploits can render defenses that seemed effective obsolete in a matter 
of seconds. Given the speed with which cyber capabilities can be 
created and the relatively low cost for entry, the potential for 
possibly far-reaching technological surprise is very high.
    Technology innovation has two key components: creation and 
adoption. One can support technology creation by providing consistent 
funding to create and maintain effective facilities and to attract 
properly trained researchers who are immersed in the problems of the 
day. Positive and open competition can be a powerful incentive to 
operate efficiently. I spent more than a decade of my career in the 
NNSA Advanced Simulation and Computing (ASC) program. Its goals were 
clear and technically compelling, we had challenging milestones, and 
funding was relatively stable. Because of those government investments, 
today we certify the U.S. nuclear weapon stockpile without the need for 
underground testing. Overall, the ASC program should be considered both 
an enormous technical success and a government success for a critical 
national security problem.
    Creating a new technology and getting it adopted are two different 
tasks. There are significant barriers that prevent technology adoption 
including expediency, cultural inertia, and investments in legacy 
technologies. The business case for investing in new security 
technologies is often not clear, reinforcing the need for better 
metrics, risk assessment, and cost analysis.
    Technology adoption can be accelerated by ensuring that researchers 
are partnered with users who understand operational needs and with 
vendors who can rapidly commercialize promising technology. Integrating 
and funding operational pilots as part of R&D programs can also improve 
the likelihood and pace of adoption. Results obtained from lab 
experiments are typically not enough to convince operators to deploy 
new technology. They need to see results in real world environments.
    2. Research on network security versus data encryption: Encryption 
and network securities are complementary topics and should not be 
viewed as competing alternatives. Data encryption raises the bar for an 
adversary, but it is wrong to believe that encrypting all network 
traffic and all data at rest is sufficient to provide adequate security 
if you cannot also keep an enemy out of your networks. Again, there is 
no silver bullet. Our goal should be to raise the cost of successful 
attacks. Better network security and careful use of high quality 
encryption both raise adversary costs.
    Cryptography is a based on well-understood mathematics. Time-tested 
algorithms and protocols exist. We can estimate how much work is 
required to break a given encryption scheme. Techniques exist for 
analyzing the security of cryptographic protocols. However, 
cryptography is quite subtle and it is easy to make mistakes especially 
in implementation. The early implementers of wireless communication 
protocols, who were all skilled engineers made numerous cryptographic 
errors. As technology evolves, effort is required to adapt the large 
body of cryptographic knowledge to the new technology. The adaptation 
is often straightforward and more of an engineering exercise than a 
basic research task.
    Other aspects of network security are much less mature. For 
example, network filtering is often driven more by existing network 
protocols and recent exploitations than a coherent protection 
philosophy. Most networks use Transmission Control Protocol/Internet 
Protocol (TCP/IP) and thus base protection on filtering of TCP/IP 
packets, so filtering is limited to attributes visible in TCP/IP. Since 
TCP/IP has no notion of user identity, even a simple policy like ``only 
administrators can configure the domain controller'' requires multiple 
security mechanisms. A network filtering policy may ensure that only 
certain ports are open and that only certain types of packets can be 
sent to those ports. A host-based policy then ensures that only 
administrators have access to powerful configuration features. 
Verifying that this collection of policies properly enforces the 
desired abstract policy is difficult.
    3. Research on the transition from signature-based detection of 
attacks to behavioral detection: Computer attacks have historically 
been detected using either signature-or anomaly-based methods. Anomaly-
based techniques look for statistically significant deviations from 
normal activity. Because of the challenges in characterizing an 
accurate baseline of normal activity, anomaly-based detection systems 
to date have had limited utility. Signature-based methods, in contrast, 
compare network and file data against a database of known attack 
signatures to detect attempted intrusions and malware. Signature-based 
methods are incapable of detecting new attacks. Polymorphic malware 
that can change its structure while retaining the same functionality is 
mostly immune to signature-based techniques.
    More recently, a new class of anomaly detection methods have been 
developed that are based on aggregating events across time and multiple 
sources to identify network--or host-based behaviors that might be 
malicious. These behavior-based methods are not as brittle as 
signature-based techniques because they can detect new, as well as 
known, variations within a general class of attacks. Behavioral methods 
have been successful in finding previously undiscovered malware. 
However, most behavior-based detection tools are not real-time 
detectors. They require the development of robust classifiers that 
describe patterns of anomalous events representing potential misuse, 
ranging from low-level events such as the opening of a network 
connection to excessive Facebook use or watching World Cup soccer. 
Using these classifiers, behavior-based techniques typically find 
anomalies after the fact in batch-processed data. Anomalies are then 
ranked so that a human analyst can focus on the most significant 
problems. However, when an anomaly is determined to be part of a larger 
infection, these behavioral techniques produce important and unique 
signatures, which can then be used to stop infections in real time. 
More can be said about the current state of the art techniques in a 
closed session.
    Current behavioral-based detection systems, however, are prone to 
high false positive rates. They require the supervision of skilled 
analysts to monitor and investigate alerts and to develop and adjust 
classifiers. The demand for skilled analysts far exceeds supply. 
Furthermore, difficult tasks can sometimes overwhelm even the best 
analysts. Depending on the time scale and complexity of the pattern of 
behavior associated with a particular type of malicious activity, 
behavioral techniques can also fail to detect an attack before an 
adversary has caused damage. Behavioral detection offers promise and 
will improve, but does not represent a panacea today.
    An often overlooked component of cyber security is that anyone can 
obtain virtually any security product on the market. The fact that our 
adversaries can use their knowledge of common security tools to predict 
the barriers they might face during an attack suggests two requirements 
for network--and host-based intrusion detection systems: (1) signature-
based products should provide an open interface by which we can develop 
and deploy proprietary signatures and scripts; (2) behavior-based tools 
that allow us to detect new attacks must be introduced to complement 
our signature-based methods. As behavioral-based detection systems 
improve, we anticipate a crossover where behavioral-based tools will 
become predominant and will be supplemented by signature-based methods.
    4. Test and evaluation infrastructures at various classification 
levels (e.g. digital sandboxes): Experimentation plays a central role 
in science and engineering as a rigorous means of testing hypotheses 
and potential solutions. The cyber research and operational communities 
recognize the necessity of more realistic test and evaluation 
infrastructures, or test beds, to advance computer security research 
and conduct cyber planning, training, and exercises. Significant 
foundational work has been done through private-sector and government 
funded efforts, including the development of hardware and operating 
system emulation and virtualization tools, network traffic generators 
and test bed management systems, and actual cyber test beds of varying 
size, realism, and classification levels. Examples include DOD 
Information Operations (IO) Range, and the National Cyber Range.
    However, cyberspace is a highly complex, manmade environment of 
vast scale and heterogeneity and presents unique and daunting 
experimental challenges that we have not yet been able to adequately 
represent in test facilities. Our current capabilities fall short in 
fidelity and in scaling up to regional and Internet-sized networks. 
Additionally, while our adversaries use the Internet as their cyber 
test bed, it is not responsible for the United States to do the same 
because of possible, unintended side effects.
    Sandia, in partnership with a number of government agencies and 
national laboratories, conducts significant research in cyber and 
cyber/physical test and evaluation technologies, including contributing 
roles in the IO Range, National Cyber Range, and DOE National 
Supervisory Control and Data Acquisition (SCADA) Test Bed. These 
activities build upon our longstanding investments and capabilities in 
high-performance computing and in modeling and simulation of physical 
and cyber systems. We and others have developed techniques and tools to 
conduct so-called live-virtual-constructive experiments that integrate 
real people and computer systems with simulated computer systems and 
modeled human behavior to evaluate consequences and mitigation 
strategies for realistic cyber scenarios like a cyber-attack on 
critical infrastructure.
    Significant challenges remain, however, to realize the high-
fidelity experiments required to support scientifically rigorous 
testing and evaluation of cyber solutions and scenarios. Cyber testing 
and evaluation can be broken down into four distinct experimental 
phases: design, configuration, execution, and result analysis. Research 
and development gaps remain in all four phases.
    Cyber experiment design presents specific challenges stemming, in 
part, from the limited scientific foundation in cyber. In other 
disciplines, well-developed approaches like wind tunnel testing and 
scientific laws like those governing fluid dynamics can be brought to 
bear to design an effective experiment. By contrast, we struggle today 
to design good cyber experiments that are controlled and repeatable. 
The complexity from integrated circuits to Internet scale networks and 
the adversarial nature of cyberspace, make it difficult to design a 
complete, valid and meaningful experiment to study cyber phenomena of 
interest, such as the propagation of a botnet, or evaluate a prototype 
security technology. Additional work is needed to develop and 
promulgate a scientifically rigorous approach to designing cyber 
experiments and exercises.
    There has been considerable progress in the last few years with 
tools and technologies for configuring and executing cyber experiments, 
but major gaps remain in these areas too. Although several test bed 
configuration tools now exist to specify and automatically configure 
elements like computer systems, and network topology, required for 
small experiments, large and complex experiments require time-consuming 
hand configuration and tuning of test bed elements. Configuration and 
execution of high fidelity, regional and Internet-scale experiments 
still pose many research challenges. In some cases it is unclear what 
scale and fidelity are even needed to answer important questions.
    Running realistically scaled experiments poses challenges of its 
own. Sandia recently demonstrated what we believe to be state-of-the-
art scale by booting 4.5 million virtual computer nodes. These nodes 
were light-weight virtual machines, meaning they exhibit some, but not 
all, of the complex behavior of a typical desktop computer. However, at 
this scale one is getting close to representing the Internet resources 
of a small country. Current test beds also have overly simplistic human 
behavior modeling elements, and thus fail to adequately represent user 
frailties, like susceptibility to spear phishing--an e-mail spoofing 
fraud attempt that targets a specific organization, seeking 
unauthorized access to confidential data or the perverse creativity of 
adversaries.
    The challenge of gathering and analyzing test results is also only 
partially solved. Fine-grained instrumentation is lacking from most 
existing test beds, as are tools for efficiently distilling and 
extracting pertinent results from the vast volumes of data that can be 
generated by large tests and exercises. Lastly, future test beds will 
need to be integrated in a much larger percentage of wireless 
components.
    Advancing the state of the art in cyber test and evaluation will 
require major research and infrastructure investments. The government 
has already made large investments in this area through several 
standalone programs such as National Cyber Range. However, we see a 
need for a new strategy that coordinates future investments across the 
government in a way that maximizes technological advancements and 
ensures test bed access for academia, government, private-sector, and 
military users, while respecting agency--and program-specific test bed 
capability and classification requirements.
    5. Other research priorities: We must devote additional attention 
to developing and implementing strategies for assuring the safety of 
the Nation's most critical national security systems. These systems are 
particularly challenging to defend because of the full-spectrum attacks 
that a nation state or other highly capable threat actor is likely to 
employ.
    The information technology supply chain is a particularly insidious 
risk to high-consequence national security systems, because of our 
widespread reliance on commercial-off-the-shelf (COTS) hardware and 
software technology that is increasingly produced in whole or in part 
by untrusted, non-U.S. organizations. Unfortunately, the growing 
complexity of these systems also makes it economically infeasible to 
verify them thoroughly.
    Insufficient attention has been given to technical approaches for 
mitigating supply chain risks. Counterfeiting and subversion of 
critical components in high-consequence DOD systems could have a 
devastating effect on our ability to project military power with 
confidence around the world. Better methodologies and technologies are 
needed for assessing and managing supply chain risks.
    IT system trust must ultimately be rooted in hardware. Additional 
research is needed to enable scalable, cost-effective hardware 
integrity evaluation to verify that no malicious features have been 
added and that security features have not been weakened. We must be 
able to positively identify and track components throughout their 
complete lifecycle. We need to discover how to compose higher assurance 
systems from largely untrusted COTS components and a small set of 
simple trusted components.
    To tip the balance in favor of defenders, we must create and deploy 
technologies and policies that decrease benefits and impose costs on 
attackers. Attackers are able to leverage the complexity of modern 
hardware and software systems to find and exploit a seemingly endless 
stream of vulnerabilities. These attacks scale globally to provide 
disproportionate benefit to attackers as a result of the relatively 
homogenous computing base that exists in most enterprise environments 
throughout the world. Although various secure design approaches, such 
as formal verification, offer promise, they do not currently scale to 
the size and complexity of COTS systems. In the near-term it is 
unlikely that COTS systems will be drastically simplified to facilitate 
formal methods-based, high-assurance development. Alternatively, 
approaches that introduce manageable and cost-effective diversity 
within hosts and across an enterprise could dramatically reduce the 
utility of many attacks and sharply raise development costs for 
attackers, forcing adversaries to have to discover and exploit multiple 
vulnerabilities simultaneously to mount a successful attack.
    6. Workforce issues: Confronting the challenges I have outlined 
today requires a highly skilled and motivated research community. It is 
well documented that the demand for cyber expertise greatly exceeds the 
supply.1,2 Over the past 3 years, Sandia has been able to 
attract and hire top United States citizen undergraduate talent by 
paying for their master's degree at the school of their choice and 
supporting them with 75 percent of their salary while they attend 
school full time. Upon returning to Sandia, they owe us 2 years without 
penalty. This has been a very successful recruiting program but 
retention results won't be available for a few more years. Doctoral and 
experienced cyber hires are more difficult, even with market-based 
salary offers, because of intense competition for their knowledge and 
skills. However, we have been successful in attracting a few high-
quality PhD researchers through a new competitive early-career research 
program that provides selected PhD hires with 2 years of internal 
funding for independent research.
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    \1\ http://www.cioinsight.com/c/a/Trends/Damn-the-Economy-IT-
Employment-Rises-to-New-Heights/
    \2\ Langevin Assesses State of Cyber Workforce, http://
langevin.house.gov/news/press-releases/2011/10/langevin-assesses-state-
of-cyber-workforce.shtml
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    Retention is a growing concern. Although the importance of the 
national security mission and job stability remain highly attractive 
features to our employees, new hires today receive benefits similar to 
those found in U.S. industry. Over time, therefore, we may see the 
retention rate for computer science professional's approach that of 
industry, which retains such staff for approximately 5 years. This 
could become a significant issue because it takes 3 to 5 years of 
mentoring for a recent graduate to become highly skilled in supporting 
cyber research for the U.S. Government.
    Historically, the laboratories are asked to solve the 
``impossible'' problems. Congress should consider the implications of 
not having the best and brightest U.S. cleared and experienced staff 
available to tackle the Nation's most challenging security needs. 
Presently, many of Sandia's cyber staff are being solicited by private 
companies offering more than 50 percent increases in salary and better 
benefits. Historically, we have lost less than a percent of our cyber 
workforce to outside employment; however, we are currently on a path to 
lose 10 percent this fiscal year.
    Outside of the labs' recruitment and retention challenges, there 
are additional areas that deserve attention. Academic programs for 
computer security specializations need improvement. Curricula vary from 
one university to another and few programs produce graduates who have 
both the required deep knowledge of computer hardware and systems 
combined with practical security understanding and skills. The 
Scholarship For Service (SFS) program has helped produce more qualified 
graduates, but in my opinion could be enhanced to attract the Nation's 
best students who are in turn intentionally cultivated for government 
service through improved curricula and hands-on training programs. 
Government labs and agencies participate today by providing SFS 
students with internships and hiring SFS graduates, but we could also 
partner with SFS-funded universities to help develop appropriate 
curricula, training toolkits, and exercises.
    Beyond SFS, the labs can serve a broader role as a training ground 
for the Nation's next generation of security researchers and 
operational defenders. For the past 10 years Sandia has run an 
innovative hands-on computer security internship program for 
undergraduate and graduate students called the Center for Cyber 
Defenders (CCD). Drawing summer projects from our customer-funded 
security R&D programs provides students with an opportunity to work on 
real security problems and experience the satisfaction of contributing 
directly to national security. For the first time this year, thanks to 
Department of Homeland Security (DHS) S&T support, we will be piloting 
a secure systems research challenge for CCD students that we hope can 
be extended to include other labs. In general, we believe student 
competitions are an important and still underutilized mechanism to 
attract, engage, and accelerate the development of cyber professionals.
    Professional education and training is another challenge. Knowledge 
in cyber disciplines constantly evolves, often in obscure corners of 
the Internet. Continuous learning and skills refreshing are required to 
maintain a world-class R&D and operational cyber workforce. We and 
others have done some preliminary work on competency-based training and 
other professional development activities such as rotational 
assignments between research and mission-focused roles, but this area 
requires additional attention, especially in light of the magnitude of 
the government's cyber workforce needs and the retention issues 
mentioned previously.
    7. Current coordination across the community: From a laboratory R&D 
perspective, coordination is good. For example, DOD T&E reaches out to 
the labs that have specific skills and the labs coordinate well with 
each other in assessing and improving DOD IT systems. Coordination is 
similarly close with other government agencies including people working 
together at each other's sites and through quarterly reviews.
    From an operational perspective, coordination within the Federal 
Government is improving. U.S.-CERT has created capable collaboration 
facilities within their secure web site. In our opinion there is still 
too much focus on security compliance. Compliance-based security is not 
effective. When coupled with excessive oversight, a compliance focus 
results in brittle and unresponsive security systems. Today, victims 
are often punished for the actions of adversaries.

                        SUMMARY AND CONCLUSIONS

    To tip the balance in favor of defenders, approaches and 
technologies must be developed and deployed that decrease benefits and 
impose costs (or risk) to attackers. Attackers are able to leverage the 
complexity of modern hardware and software systems at the component 
level to find and exploit a seemingly endless stream of 
vulnerabilities. These attacks scale globally to provide 
disproportionate benefit to attackers as a result of the relatively 
homogenous computing base that exists in most enterprise environments 
throughout the world. However, the cost equation to the adversary can 
be changed. Cyber defensive technology has been shown to accelerate 
when long-term stable funding is in place, technical collaboration 
among research organizations involves ``prisoner exchanges,'' test 
facilities are prepositioned and analysis/operators are an integral 
part of the team. As one example, behavioral-based detection systems 
are having significant success and as they improve, eventually we 
anticipate a crossover where behavioral-based tools will become 
predominant and supplemented by signature-based methods.
    Two areas within the scope of this committee's questions need to be 
addressed: (1) the test environments available to the research 
community; and (2) the retention of the government's cyber research 
community, which includes the national laboratories. To continue the 
acceleration of government-developed and-owned cyber defense 
technologies, testing and emulation environments of various 
combinations of scale, fidelity, and heterogeneous representations of 
regional and Internet-sized networks are needed to address multiple 
national security missions. With their deep reservoir of technical 
talent and science and technology capabilities, the DOE national 
laboratory complex has helped address some of the government's most 
challenging national security problems, including cyber. However, 
unlike the Cold War where the government used work environment, 
benefits and mission to attract and retain top scientists to government 
agencies and national labs, only a small fraction of those retention 
tools exist for the cyber war and the implications should be of great 
concern.

    Senator Hagan. Thank you. Thank you all for your opening 
testimony. Now we will go to the questions. I will ask that we 
will have 6 minutes each, and then if nobody else comes in you 
can certainly go longer.
    DOD is facing challenges seeking new graduates with 
advanced degrees, and I think each one of you mentioned that in 
your opening testimony, specifically in scientific and 
technical fields to help develop complex military systems. The 
field of cybersecurity is a key example where there is a rising 
demand, as you just mentioned specifically in the private 
sector. Yet, I think we all know it appears that the supply 
side is not keeping pace.
    Secretary Lemnios, as the key person in DOD responsible for 
our STEM education and outreach activities, how are you 
ensuring that DOD is able to recruit and retain the best and 
brightest in cybersecurity research? How are you monitoring the 
quality of DOD's cybersecurity research workforce? Then the 
final part of this question is, how much is a highly 
experienced, trained cybersecurity researcher paid within DOD?
    Mr. Lemnios. Senator Hagan, I think through testimony and 
through our written material, I think we've all recognized that 
the workforce, the talent, is central to this entire 
discussion. As such, we have been shaping our STEM programs to 
include cyber as one of the disciplines that we're focused on. 
Our Science, Mathematics, and Research for Transformation 
(SMART) program, our scholarship program which provides a year 
of scholarship for each year of service in one of our 
laboratories, is one example of many. In my written testimony, 
I gave several of these.
    This summer we will have roughly 600 students from that 
program entering DOD's laboratory infrastructure, and of those 
a significant number of them are in the cyber or related 
technology areas. I view that as one of a number of ways to 
attract young talent to pursue their work and to understand 
where their work will actually make a difference for DOD.
    The challenge beyond that, though, is to track those 
students long-term in competition with industry, in competition 
with other pay grades and other environments. I think you do 
that by, first of all, engaging those students in first-rate 
work--and you've heard from Dr. Wertheimer about the NSA piece 
of it. The same could be said with regard to the environment at 
Sandia.
    I think you also engage those students in an environment 
where they can actually learn, where they are contributing and 
they have a mentor side-by-side that helps them increase their 
skillcraft and increase their game, and certainly putting 
students and those groups on a project that has national 
significance, and we're doing that through the SMART program 
and other programs.
    Senator Hagan. How about salaries?
    Mr. Lemnios. I'm sorry?
    Senator Hagan. How about actual salaries?
    Mr. Lemnios. I don't have the salary numbers. I'd defer to 
others that might have that, and we can certainly take that 
question for the record.
    [The information referred to follows:]

    As I stated during the hearing, I would defer to the other 
witnesses to discuss salary numbers.

    Senator Hagan. DARPA has taken some interesting approaches 
to hiring personnel from nontraditional areas, such as the 
hacking community, where these individuals might not have a 
doctorate in a traditional academic field. I don't know if they 
have a master's or a college degree. But what lessons has DARPA 
learned by tapping into this talent pool that may have 
applicability across the broader DOD spectrum? Then, what does 
DARPA have as far as the necessary mechanisms to rapidly hire 
talented cybersecurity researchers? Then how much are they 
paid?
    Dr. Gabriel. Three questions.
    Senator Hagan. The hacking community.
    Dr. Gabriel. The white hat hacker community, I think, has 
been instrumental in us beginning to understand the nature, the 
challenges and opportunities in cybersecurity, both defensively 
and offensively. In particular, I point to the Cyber Fast Track 
program, which, I think, we described to you briefly.
    It was with the insight that we gained from recruiting from 
that community program managers that we understood that the 
connectivity to that community was very poor, not only for 
DARPA but the Federal Government overall. The timeframe of 
contracts, the other things that typically go into reaching out 
to the research community from our perspective, was not well-
matched to the pace of business that they did.
    Through the Cyber Fast Track program, which we launched 
last August, we have had 135 proposals, submissions, over that 
8-month period, 87 percent of them from innovative, 
nontraditional performers who have never done work for the 
government before. That was through a contracting mechanism 
that matched the speed and the period of performance.
    Just to give you an example, 36 contractors were awarded. 
The average period of performance is 5 months. So if we don't 
have contracting procedures that are much shorter than that 
period of time, it makes no sense to take 9 months contracting 
if they're only going to do 5 months of work. So the average 
time from submission to award has been 8 days, and we view that 
as a very vital part of getting the freshness, the innovation, 
and the perspective coming from that community.
    Our program managers, you asked what are the mechanisms we 
have to hire them. Ma'am, we have a culture where we 
essentially refresh essentially every 3 to 5 years. Program 
managers come to DARPA 3 to 5 years. They come to do their work 
and they leave, and that's true from program managers to office 
directors to the deputy director to the director, as you 
pointed out earlier.
    That is the pace at which we believe you need to bring in 
the talent, to bring in the perspective and the sense of 
urgency.
    We are paid just like any other civil service scales and 
other hiring authorities in DOD.
    Senator Hagan. Since I said we would limit it to 6 minutes, 
I'll hold the next two questions for the other two until it 
comes back to me. Senator Portman.
    Senator Portman. Thank you.
    Thanks for that response. I'd like to back up a little bit 
and talk about the budget. As I indicated in my opening and you 
have identified, there are areas where we're increasing 
spending. DOD's budget is one. Homeland Security is another. 
Despite this, Secretary Carter has said recently, Mr. 
Secretary, that we're not spending as much as we need to. He's 
also said we'd spend a lot more if we could figure out where to 
spend it.
    So I have two questions for you, and others feel free to 
chime in. One is, in terms of the budget levels, and as a 
former Office of Management and Budget Director, I know your 
answer is always going to be we could spend more. But honestly, 
are we spending enough? Then the second question, you can think 
about it, would really be to Dr. Gabriel's intriguing 
testimony, which is, we're spending more and yet there are more 
attacks; is that because there are just such an increase in 
attacks that the more spending and the more we throw against 
it, although we're having some impact, it's still resulting in 
a net increase in attacks? Or is it because we're not spending 
the money wisely?
    So if you could start with the first question, Secretary 
Lemnios, and then if others could chime in with regard to both 
of those questions.
    Mr. Lemnios. Senator, the question of DOD's funding level 
is something that we took head-on early last year. I was 
interested in actually two questions. First is what should 
DOD's funding level be for S&T, 6-1 through 6-3, but also what 
should the content of that spend be?
    It goes to your point: Are we funding-limited or idea-
limited in some of these issues? We tried to parse that. We did 
it the following way. I spent between August 15 and essentially 
the end of October last year going through every project in 
DOD. I went through 270 program elements. I visited each of our 
laboratories. I visited DARPA, the Services. I got a look at 
the project spend in dollars and content, what were the ideas 
that were being funded.
    We rolled that up to compare it against the strategic 
guidance that was being developed at the time to try to 
understand where were the gaps in ideas, where were those areas 
that if we had a little bit more money they were ideas that 
were ready to be harvested vice if we have more money we'll 
just kind of peanut butter it to the right. I wasn't interested 
in the peanut butter cut. I was looking at strategic 
investments.
    As a result, the President's budget request that's on the 
Hill now includes in it increases in targeted areas where we 
identified ideas and we identified concepts that would be ready 
for funding, that would be responsive to the strategic guidance 
of DOD.
    Within that, one example, we looked at a new concept at the 
convergence of cyber and electronic warfare. We can talk about 
it in detail in closed session, but it was an area that it was 
clear to us was going to come about and we had good ideas that 
we could harvest in that particular area and get well ahead of 
a threat.
    We also plussed up work in manufacturing and some other 
areas, and we identified those concepts. We took funding out of 
some topics that we identified were either mature enough or 
weren't leading to a program of record that would be of 
critical importance for DOD. So we actually made those trades, 
and the trades were not in budget ceiling; the trades were 
informed by what are the ideas that we thought we could 
address. As you can imagine, that was a spirited discussion. 
But at the end of the day we put in the budget request those 
ideas that we thought would make that trade for us.
    As far as network attacks, the question is at what point do 
we make investments in cyber network defense to the point we 
can curb network attacks? The way we're looking at that--and I 
think Dr. Gabriel has done some groundbreaking work in that 
area--is to identify where do we start changing the calculus 
for the work factor that an attacker presents as a function of 
how much work we have to put in to defending that attack. So 
we're trying to measure that, that calculus, and put concepts 
in place that in fact are non-convergent. They don't track with 
the work level of an attacker, but they actually fundamentally 
change the game. We have some concepts again we can talk about 
in closed session that address that.
    But the fundamental issue is identifying those areas that 
were funding-limited and those areas that were idea-limited, 
and I think we balanced that in the budget submittal that's on 
the Hill.
    Senator Portman. You covered most of those ideas? You feel 
these requests are adequate to cover most of them?
    Mr. Lemnios. I think there were some others that we'd like 
to go back and take a look at, and we'll be reviewing those 
over time. But I think we put in place a balanced portfolio 
that covers some real long shots and some things that we can, 
in fact, make clarity on over the next year or so.
    Senator Portman. Dr. Gabriel, could you follow up on that, 
again in reference to your comment that we are, as I wrote 
here, capability limited on defense and offense, and that you 
see more funding and yet more attacks?
    Dr. Gabriel. Thank you, sir. I would specifically like to 
address the comment you made. I don't believe it's that we're 
doing wrong things. It's just the nature of playing defense in 
cyber that it's hard, and the analogy that we've used in the 
buying tactical breathing room, it's much like treading water. 
If you find yourself in the middle of the ocean, treading water 
is a good thing. You need to tread water to stay above, keep 
your head above water. But if that's the only strategy you have 
for getting out of the predicament, you will eventually get 
tired and become overwhelmed.
    That's what we mean by taking advantage of the tactical 
breathing room, some of the work that we're doing today to 
protect us, the patching and the consistency of defensive 
measures. But if that's all we do, it is not convergent with 
the evolving and growing threat.
    So we have articulated and begun to make and shifted 
investments over the last 2 years to make sure we're looking, 
not only at things that buy us tactical breathing room, but to 
actually look at aggressive programs that seek to become 
convergent with the threat, to change the game, so it's not the 
way it is difficult to play defense, and make it difficult, to 
change those asymmetries, to change the cost calculus for what 
it means to have an attack on a cyber system.
    Likewise, I would say we'd be happy to get into some of the 
specifics of how we believe we can do that, given some of the 
investments we're making.
    Senator Portman. My time has expired, but I would just say 
that----
    Senator Hagan. You can take some more time.
    Senator Portman. Okay, I'll just take a couple minutes if 
that's okay and turn it to you.
    Dr. Wertheimer mentioned earlier the fact that he's 
concerned that some of the spending is too short term. I don't 
mean to paraphrase you, but are you referring in part to the 
tactical breathing room approach? In other words, are you 
concerned that we're not looking long enough term? Or is it 
more that we are focused more on just retaining our current 
position rather than, as Dr. Gabriel indicated, looking at how 
to deal with some of these asymmetrical threats and being more 
creative?
    What's your take on it?
    Dr. Wertheimer. Senator, at the risk of pushing March 
Madness too far, we have to deploy a division 1 team because 
the adversaries are division 1 in most cases that DOD sees. 
Google any of the headlines you've read, their first 
inclination was to attribute this to a nation-state adversary, 
one which in some sense they felt or implied that they couldn't 
be held accountable for defending against that.
    It is my belief that we are rushing to this threat numbers, 
lots of attacks, and we're trying to deploy tools and 
techniques to slow that, and in my view, we're not keeping 
enough of a strategic eye on that nation-state threat, that 
division 1 that's going to come at us and adapt to most of the 
kinds of tools and techniques that you're going to need to stop 
your routine--and routine doesn't mean it isn't important and 
it isn't scary--botnets and other large efforts.
    Senator Portman. Is it your sense that the numbers that are 
being requested would be adequate for us to think more 
strategically, so in other words, it's not so much a question 
of budgets as it is a function of approach?
    Dr. Wertheimer. I agree exactly with that statement.
    Senator Portman. With regard to NSA, you also talked about 
what I mentioned in my opening about the production of computer 
scientists being on the decline. You said you had some 
information about that. We don't need it all today, but if you 
could provide that to the committee that would be very helpful, 
because, as we have discussed in previous hearings, there are 
various approaches and some involve more direct government 
action. Secretary Lemnios talked about some interesting ways in 
which you're encouraging more young people to get into the STEM 
disciplines and providing them an opportunity along the way.
    There was discussion about whether it's advanced degrees 
that are needed or whether it may be something more 
fundamental, just to attract people into the field and then 
maybe help them to subsidize their advanced degrees.
    Just what are your thoughts as to how to deal with what you 
identified as a major problem, which is a talent shortage?
    Dr. Wertheimer. I agree that the seeding of more talent 
must occur. We have charts and I will share them with the 
committee gladly. Today, if you look at the number of PhDs in 
2010, that was 1,500 PhDs. 720 were U.S. citizens or U.S. 
persons. 64 in total came to work for any form of government.
    We are not competitive salary-wise. We tend to hire PhD 
computer scientists at grade 12, step 7, which is about 
$90,000. The middle 50 percent of offers run $75,000 to 
$124,000 in the private sector. They come in at a 12, step 7, 
and they hit a pay freeze. The average increase in salary for a 
computer scientist in industry is 4 percent a year. We hit them 
with a pay freeze.
    They come in as a 12, step 7, and they hit the pay caps 
that we have imposed upon us by DOD and particularly the Under 
Secretary of Defense for Intelligence issued a memo on the 
conversion to Defense Civilian Intelligence Personnel System 
(DCIPS), the pay banding that never happened, and it limits us 
to how many 13s, 14s, and 15s we may have as an agency.
    The average time in grade if it was just fair-shared is 12 
years to your first promotion, 12 years to your second 
promotion. You can't walk in and tell them you're going to wait 
6 years if you're good, 12 years if you're average.
    Just to give you another number--as a mathematician, I 
can't control myself--if you look at attrition across NSA, 44 
percent of the people who attrite are resigning as opposed to 
retiring. In computer science it's 70 percent.
    Senator Portman. So you've identified--and I'll turn it 
back to the chair after I ask this last question. You've 
identified an obvious problem. Looking at Dr. Peery's testimony 
here, to bring him into it, he's talked about the DOE labs and 
all the cyber talent that's there. You talked about the 
retention issue. You said 5 years on average is not enough time 
to be able to plan and to be able to develop the kind of, I 
assume, both offensive and defensive capabilities that are 
needed.
    What are some of your solutions? What would you do to try 
to both attract and retain? One would obviously be salary from 
what you said. If there are only 64 going into government, that 
may, in part, be because that range of $75,000 to $100,000 
versus $60,000 is a disincentive coming out of school with a 
bunch of loans.
    So I assume you would agree with that. You talked about pay 
bands and you talked about--and we've done this in other 
agencies and departments and do it to a certain extent in your 
agencies, I know we do at DOD. But what are some other ideas 
that you would have for this subcommittee as to how to attract 
and retain?
    Dr. Wertheimer. The first thing I would like to recommend 
is across the government in particular a STEM waiver for pay 
limitation. That is, I'd like to be able to promote to 13, 14, 
15 based on merit if they're in a STEM field, especially if 
they're in an advanced STEM field. I think that would be a 
simple and exciting solution, to know that the government makes 
an exception for STEM and that there isn't a career ceiling.
    We are expanding--we put out a 3-year postdoc program at 
NSA precisely to attract new folks. Three years. We had 140 
applications before we even advertised. This is something, they 
only are allowing me to get three. I'm only allowed to have 
three because it's a prototype, something we haven't done 
before.
    I would like a great deal more of a sense of Congress and 
others that we can experiment in the STEM fields in 
nontraditional ways. Give us some more latitude to bring them 
in for 3 years at a time, again promotions, pay. They love the 
work. The data we showed them, the challenges they have, they 
absolutely adored it. Every one of them says to me on an exit 
interview: It's less about the money; it's the sense that I 
cannot advance in my organization; I simply cannot advance.
    Senator Portman. I'll turn it back to the chair, but maybe 
we could continue this conversation at least in a submission to 
the committee that would be helpful. It does sound like it's a 
matter of pay, but also because it is exciting work and some 
people are willing to take lower pay to do it and for their 
sense of service and certainly the national security area, but 
they also want the ability to be recognized and promoted 
through merit.
    Thank you, Madam Chair.
    Senator Hagan. Thank you.
    I think when we're talking about this, too, and we're 
talking about national security, we're talking about the new 
threat of cybersecurity as the next terrorist activity, that it 
really concerns me that we're limited in pay scales, promotion 
scales, because when I look at what the alternative is, the 
private sector that is also desperately trying to attract the 
same talent, I think it is an issue of national security that 
we do need to address.
    Dr. Wertheimer, you answered some of the questions that I 
was going to raise for you. But when you specifically mentioned 
the point about personnel policies that are not conducive to 
hiring and retaining the best and brightest cybersecurity 
researchers, I was wondering if you could elaborate, or 
Secretary Lemnios, on what we need to do to change that? Mr. 
Secretary?
    Mr. Lemnios. Sure. Let me try to recenter some things and 
add a little bit of sunshine to something that is a very 
difficult problem, and that is how do we attract talent for new 
areas. While NSA has a remarkably talented research laboratory 
second to none--and Mike and I have spent a lot of time there 
and I love spending a day there or longer--the bet that we're 
making in DOD is that it has to be a balance between what we 
have in terms of internal resources, those concepts that we see 
from industry, from academia, and from our government 
laboratories. So when I look to drive early stage innovation, 
some of that will come through our laboratories, some of that 
will come through captive laboratories, but we're really trying 
to make a bet with how we can increase the pace of innovation 
and drive technical concepts through the small business 
community, through the rapid innovation fund, through other 
channels, through contract R&D agreements that couple our 
laboratories with early stage developers. The DARPA experiment 
of nontraditionals is absolutely superb.
    Much of that we can do with our existing authorities. As 
one example, we spoke last week about the Rapid Innovation 
Fund. We received 3,500 proposals from the small business 
community in that area in a fairly short-notice set of broad 
agency announcements. Some of those, in fact, were targeted to 
address cybersecurity concerns, wireless security concerns.
    We're going through that source selection now. But it seems 
to me that that's an environment that taps a community that 
wasn't engaged in this discussion earlier, and it's one that, I 
think, we'll see lots of good ideas from with enormous 
leverage.
    So when I think about our investments in STEM, absolutely 
we need to strengthen DOD's position in our laboratories and in 
the core workforce of the government. But I'm also looking at 
how do we strengthen the skillcraft and the game of industry 
and of academia as we move into these new fields. I think we've 
started along that path.
    Senator Hagan. But, Mr. Secretary, how can we change the 
policies as far as the freeze on pay and the freeze on 
advancement? I think if you've been told--is it 12 years, 6 
years, 12 years? I think we'll be losing those people to be 
contract employees.
    Mr. Lemnios. I don't have a comment on that. I just don't 
have a suggestion at this point.
    Senator Hagan. Dr. Peery, if you could just comment on 
hiring and retaining? You mentioned it in your opening 
statement, but how much is a highly experienced, trained person 
at Sandia paid?
    Dr. Peery. I probably don't have exactly the numbers that 
you need, but we could get that to you. What I will say is that 
we're able from an initial offering to compete with U.S. 
industry for starting salaries, and I can give you those 
numbers.
    [The information referred to follows:]

    As of 4/6, the average research and development family Principal 
Member of the Technical Staff (PMTS) titled Research and Development 
Scientist & Engineer, Computer Systems. PMTS is $125,892.
    The job description of individuals that fit under the PMTS umbrella 
is as follows: applies integrated technical judgment--which requires 
using the scientific method to recognize and formulate problems, to 
collect data through observation and experimentation, and to formulate 
and test hypotheses--to anticipate, innovate, and deliver solutions to 
Sandia National Laboratories missions. Roots the work in the 
fundamentals of science and engineering while applying a deep 
understanding of engineering and scientific principles. Creates and 
applies scientific theories and laws and engineering methods used 
within scientific and engineering disciplines to develop or demonstrate 
new designs, concepts, materials, machines, products, processes, or 
systems. Uses physical and computational simulation, analysis, and 
evaluation as inherent activities of development. Plans, conducts, and 
manages Sandia's scientific programs from fundamental research through 
development and demonstration.

    Dr. Peery. Where we run into problems is, because we are 
under a government-owned, contractor-operated model, the 
government has a say in what kind of raises we can provide to 
the workforce, and because of that we've seen significant 
salary compression in this area over the last 5, maybe 10 
years. Because of that, that's what's starting to drive people 
out.
    We're not quite in the same restrictions with regard to 
promotions that Mike spoke about, but we do have somewhat of a 
promotion policy. I'd hate to see us accelerate that just for 
the sake of retaining people. It's really supposed to be 
performance-based. But we don't have any artificial limits on 
that.
    Like I said, we are able to attract people to the 
laboratory because of the very challenging work that we can 
offer them in cyber, the fact that we have certain resources 
that we can train them up and get them some really special 
skills. Then if we can work on that work environment, I think 
we could have a better retention policy. We're not within DOD. 
We're within DOE. I think you probably heard of the latest 
National Academies study on the work environment within the 
NNSA laboratories, led by Dr. Shenk. That's pretty much a good 
description of exactly what our workforce is seeing today.
    Senator Hagan. It appears to me that DOE is paying 
considerably more than DOD in hiring.
    Dr. Peery. I think our initial salaries are considerably 
more. Our initial salary for a computer scientist PhD is 
$115,000. For a master's it's $95,000. Some of the enticements 
we have been able to offer is we can give very top 
undergraduate U.S. citizens, out of an undergraduate program 
and after a year of service, send them to a school of their 
choice to get their master's degree. In that program we provide 
them 75 percent of their salary while they work on their 
master's degree and then they owe us 2 years of service back.
    Senator Hagan. So not only is DOD competing with the 
private sector; they're also competing with our own DOE 
laboratories. So I see a conflict here, obviously.
    Dr. Gabriel?
    Dr. Gabriel. I'd like to just make an observation, perhaps 
from a different perspective. The shelf life of cyber 
capabilities is short. I think we've all heard that, and we 
understand that. We might even posit that the shelf life of 
cyber skills is relatively short. So this might create 
opportunities for us where there would be a core subset of 
folks that we would want to retain, but in fact, perhaps that 
we should just plan on building a model where there will be a 
significant refresh of folks coming from the cyber community.
    This is a community where the traditional metrics of a 
master's degree or a PhD may not be as important. Half of our 
so-called cyber punks, the group of about a half a dozen or 
eight program managers at DARPA, don't have Ph.Ds. Their 
skills, their capabilities, their insights, are coming from 
their practice in the community. Frankly, it will have a shelf 
life. They'll go through the 3 to 5 years and then they'll move 
on and others will come in with a newer, different perspective.
    I think that's an interesting thing about cyber. That's the 
perspective, that it has such a fast refresh and a short shelf 
life that we may have opportunities for a different model of 
how we retain that capability.
    Senator Hagan. That's a valid point, but I also think the 
mentoring aspect in some of these other areas certainly plays a 
role. You do need some time for that.
    Let me move to another area, and that is the cyber ranges. 
These are physical and virtual networks that can be used across 
the spectrum for R&D to the test and evaluation of new 
technologies, to providing the real-world environment for 
training. I understand that DOD does not perhaps have a 
complete inventory of all of the cyber ranges dispersed through 
military commands and Services.
    I'd like to ask all of you, what cyber ranges does your 
agency use? Are they adequate and could they be improved? 
Secretary Lemnios?
    Mr. Lemnios. Senator, the concepts that are being developed 
in cyber are emerging, as are the testing and the way we 
evaluate those concepts. DOD currently operates 60 ranges 
total. We know where they are. We know what they're connected 
to.
    But some of these ranges, in fact, are operational. Some of 
them are training. Some of them are actually system testbeds 
for particular systems, they're targeted for a particular 
system. We have, for example, a test environment for the Joint 
Strike Fighter that's targeted exactly to support that one 
system in all of its complexity. We have similar testbeds for 
those as well. Sometimes those are called ranges as well.
    Senator Hagan. Is that included in the 60?
    Mr. Lemnios. It is.
    There are roughly 11 or so ranges that are configurable in 
some fashion to do network assessments. There are some ranges 
that integrate classic network and radio frequency 
capabilities. So it's a broad scope.
    Last week, I had the opportunity to visit the DARPA cyber 
range with two of the DARPA program managers--one of the DARPA 
program managers and an office director. I had an opportunity 
to spend a day down in Orlando looking at what's called the 
National Cyber Range. What was interesting for me there was 
really two points. The first is that that was the first 
demonstration of how we could build a range that is separate 
from the network, that could be isolated and cleansed once a 
malicious attack is embedded in that environment.
    It also had a very unique approach that allowed us to 
compose testing in a very natural way. We could build a test 
environment in software and actually run tests in parallel.
    As I looked at that, the question was, well, how do we 
translate the results of that. I think what that's telling us 
is a way that we might think about operating some of our other 
ranges, and we're certainly taking that lesson now.
    So we're operating these as a way to validate new concepts, 
and I think that work will certainly continue to be critically 
important.
    Senator Hagan. Dr. Gabriel?
    Dr. Gabriel. So let me start by answering your question 
about our performers in general use a variety of different test 
ranges. But since Zack mentioned the National Cyber Range, I 
think it's important to point out that the focus of the cyber 
range was to develop the architecture and the tools that could 
be demonstrated and used elsewhere, and we've just begun to do 
that.
    This last year of DARPA's involvement in the cyber range is 
to take it through its operational test phase and sort of 
shakeout. But already we have had the two key elements 
demonstrated, which are multiple classification levels, so 
everything from unclassified to Top Secret, as well as rapid 
and cost-effective reconfiguration and cleanup.
    We have had two operational tests, I think, since December. 
We had one in December and one in January. Both of them have 
shown the ability to take a system, configure it, do the test, 
and then tear it down for the next one and completely clean it 
from the previous one. We've taken that cleanup time from what 
would normally take months to days, so increasing the pace at 
which testing can be done as well as the range of 
classifications that that testing can be handled at.
    Senator Hagan. While we're on that subject, I understand we 
spent about $140 million in preparing this range.
    Dr. Gabriel. Over about 3 years, that's correct.
    Senator Hagan. I wasn't quite sure how many years.
    Dr. Gabriel. Yes.
    Senator Hagan. That it is intended to transition in some 
manner to CYBERCOM. Can you give me the status of that 
transition plan, and have you received confirmation from 
General Alexander about taking over that for CYBERCOM?
    Dr. Gabriel. We've been working with CYBERCOM, and in 
particular, Robert E. Schmidle, Jr., Deputy Commander for U.S. 
Cyber Command. In fact, one of the two tests, operational tests 
that we're talking about, was done by CYBERCOM. They were using 
the test range. So we are continuing the discussions and we 
believe that that will be our transition path.
    Senator Hagan. Once again while we're on this, Dr. 
Wertheimer, what are your thoughts on whether CYBERCOM will 
become the day-to-day owner and operator of this range? Are the 
resources adequate to continue maturing the range capabilities?
    Dr. Wertheimer. I'm afraid, Senator, I have no knowledge.
    Senator Hagan. Okay.
    Mr. Lemnios. Senator, if I could just add one thing. I 
think when we talk about continuing that range as an entity, I 
view the real value of that range as the architecture that was 
demonstrated and the software that's now been developed, for 
which the government has intellectual property and can be--so 
it's really the control and the design and simulation layer 
that's been demonstrated on that range, that we can now apply 
to other ranges.
    Whether or not we use that cluster of processors and 
memory, that's interesting, but the real nugget there is the 
control architecture that's been demonstrated, how we can apply 
that to DOD's ranges for reconfigurability, for multi-level 
testing. We're going through that assessment now.
    One path would be to, in fact, use the range that exists in 
Orlando as one of DOD's ranges. Another path would be to say, 
well, let's declare success on that, it was a DARPA project, it 
demonstrated the intellectual property (IP); let's take that IP 
and then apply it to other ranges that DOD operates globally. 
We're looking at the trades between those two and I can see 
value in each of those paths.
    Senator Hagan. Evidently our first vote has started. Do you 
want to take 5 more minutes?
    Senator Portman. Yes. Let me just, if I could, follow up on 
a couple of things that have been said. Great questions and I 
appreciate the answers, and go back and ask a fundamental 
question here in the open session about what are we able to do.
    I thought it was interesting, Dr. Peery, in your comments 
you twice said that you believe that we can dramatically change 
the equation for our adversaries. What you meant by that was 
the cost equation. In other words, we can do things to make it 
more costly for them to hack into our systems or to attack 
through cyber, maybe cyber and electronic warfare.
    But you didn't say that we can stop them. In open session 
here--maybe we can get into this more in closed session--what 
do you think of that as a general matter? Is this a question of 
making it more costly, and if that's the case do some of our 
adversaries have resources to be able to circumvent whatever 
defenses that we are putting in place if they have adequate 
resources?
    Dr. Peery. Let me just make a global statement that we are 
in an environment of measures and countermeasures. It's no 
different than electronic warfare. It's no different in some 
cases than kinetic warfare. We will build capabilities, we are 
building capabilities, that put the adversary at risk. In some 
cases they're designed to put the adversary in a position where 
they are more vulnerable, and protect our equities in large 
areas.
    But you also have an adversary, certainly nation-state 
adversaries, that are doing the same thing. Then you have 
another community that's doing the same thing for other 
reasons. This is not an environment for which we can say there 
are zero defenses and zero consequences. There's always going 
to be a probability to detect, false alarm rate curve that we 
have to think through. We always have to think through what's 
the consequence of our action, what's the likely response, and 
how do we define what that redline actually looks like. We can 
talk more about that in closed session.
    But it will be--it certainly is an environment where for 
every concept that's deployed, a countermeasure is deployed by 
an adversary. You see this in your private lives. We see this 
in our private lives with nothing more than the firewalls, now 
the embedded network systems that we all have on our private 
systems. Those have matured over time.
    For each of those maturations that have occurred, 
additional levels of attack and sophistication have come into 
play. Now it's no longer just your desktop system; it's now 
your mobile system. Now the attacks aren't just spam attacks. 
They are tailored to your actions. Dr. Wertheiemer and I have 
talked a lot about this. It's very much an environment where we 
have to continually up the game and get ahead of the threat.
    The last thing I'd point to is we started in computer 
network defense years ago with a perimeter defense strategy, a 
firewall strategy. We then moved to an environment where we 
have on the commercial side embedded agents that look at 
network traffic. Eventually, we're moving to a point where no 
longer will we be looking for particular attacks, but we will 
be designing systems on the commercial side that actually morph 
autonomically, actually change their features and change their 
operating roles, to respond to threats before those threats 
present themselves.
    The private sector is working in that domain. Every one of 
these is a plateau, but that doesn't actually end because you 
have an adversary that's working to counter each of those.
    Senator Portman. Speaking for Dr. Peery, who I'm going to 
ask to speak for himself in a moment here, when he says we can 
dramatically change the cost equation for our adversaries, I 
perhaps misunderstood that to have it mean a cost in terms of a 
budget and a commitment of resources to it. What you're 
referring to, at least from what I infer from what Secretary 
Lemnios is saying, is that the cost is sometimes the 
countermeasure. In other words, that if someone or some nation-
state chooses to engage in this, there is a resource cost, but 
there's also a potential cost to their security. Is that what 
you were referring to?
    Senator Hagan. Let me interrupt. I think we have about 4 
minutes and then we'll need to adjourn and go to the closed 
session after the vote.
    Senator Portman. If you'd rather talk to this in closed 
session or you feel you need to, I understand.
    Dr. Peery. I think I can answer this fairly quickly. First, 
it's not an ``or.'' It's both. It's both the countermeasures 
and it's actually their cost of doing business. I think we have 
the wrong mental model here. I don't think we would think that 
we could keep spies out of our country. I think we have this 
model for cyber that says we're going to develop a system where 
we're not attacked.
    I think we have to go to a model where we assume the 
adversary is in our networks, it's on our machines, and we have 
to operate anyway. We have to protect the data anyway. That's 
where I think the research needs to be headed, is assuming 
they're in our systems, because if they're not doing it by 
coming through an Internet gateway then they're going to do it 
through supply chain. There's where the costs increase 
significantly.
    Senator Portman. Thank you. A sobering end.
    Thank you, Madam Chair.
    Senator Hagan. For sure.
    After the vote, we will resume in closed session in Room 
SVC-217 in the Capitol Visitor Center. Thank you, and this 
hearing is adjourned.
    [Questions for the record with answers supplied follow:]

              Questions Submitted by Senator Kay R. Hagan

            CYBERSECURITY SCIENCE AND TECHNOLOGY INVESTMENTS

    1. Senator Hagan. Mr. Lemnios, the fiscal year 2013 President's 
budget request includes a $3.4 billion investment in cyber activities. 
It is not clear how much is devoted to science and technology (S&T). In 
your written statement, you stated that $486 million is for S&T. 
However, according to the Department of Defense (DOD) Chief Information 
Officer (CIO), S&T investments are only $246 million. What is the 
actual S&T investment in fiscal year 2013?
    Mr. Lemnios. The difference in the fiscal year 2013 cyber S&T 
investment reported by the DOD CIO, who cited $246 million investment, 
and my written testimony is a result of definition. The total cyber S&T 
investment in fiscal year 2013 is $486 million. This figure includes 
National Security Agency (NSA) applied research, which is binned in 
Budget Activity (BA) 7. The $486 million figure, cited in my testimony, 
included additional NSA efforts that are actually S&T.
    The cybersecurity S&T investments reported by the DOD CIO only 
included two Defense Advanced Research Project Agency (DARPA) S&T 
programs.
    The Office of the Under Secretary of Defense (Comptroller) (OUSD 
(Comptroller)) is currently working with the DOD CIO to better define 
what investments should be included in DOD's figures for cybersecurity.

    2. Senator Hagan. Mr. Lemnios, does this investment account for all 
the Services' S&T, DARPA investments, and activities directly under the 
Assistant Secretary of Defense for Research and Engineering (ASD(R&E))?
    Mr. Lemnios. Yes, this investment accounts for all the Services' 
S&T, DARPA investments, and activities directly under the ASD(R&E), as 
well as NSA's cyber research.

    3. Senator Hagan. Mr. Lemnios, could you please provide a list of 
all the cyber S&T-related programs that comprise the $486 million 
investment figure for fiscal year 2013.
    Mr. Lemnios. The actual fiscal year 2013 cybersecurity S&T 
investment is $486 million; however, as detailed in question 1, this is 
open to definition. This $469 million includes numerous individual 
efforts. At the broad level, the investment includes the following 
organizations and programs. Note that the Program Elements (PEs) may 
also fund other research areas.

         OASD(R&E) ($38.9 million): cyber applied research, 
        cyber advanced technology development (PEs 0602668D8Z and 
        0603668D8Z).
         DARPA ($274.9 million): cyber sciences, cyber 
        technology, information assurance and survivability, 
        information integration systems, and secure information and 
        network systems (PEs 0601101E, 0602303E, and 0603760E).
         U.S. Army ($32.0 million): cyber research in MURIs, 
        network technology security, and wireless information insurance 
        (PEs 0601102A, 0601103A, 0601104A, 0602270A, 0602783A, and 
        0603008A).
         U.S. Navy ($23.2 million): cyber research in MURIs, 
        information assurance, and computer network defense (PEs 
        0601103N, 0601152N, 0601153N, 0602235N, and 0603235N).
         U.S. Air Force ($59.1 million): Cyber research in 
        MURIs, assurance and trust worthiness in complex systems, and 
        global battlespace awareness (PEs 0601102F, 0601103F, 0602202F, 
        0602204F, 0602788F, 0603456F, and 0603788F).
         NSA ($40.9 million): cyber research in areas such as 
        ubiquitous secure collaboration, high assurance software and 
        hardware, and trusted computing (PE 0303140G).
         The remaining $17 million is embedded in assorted NSA 
        PEs.

                   JOINT INFORMATION OPERATIONS RANGE

    4. Senator Hagan. Mr. Lemnios, the Joint Information Operations 
Range (JIOR) has been successful in creating a worldwide, distributed 
network that can link multiple nodes and environments in highly 
classified events. It would seem that the JIOR will be a critical 
capability for the increasing demand of research, development, test and 
evaluation, and training events. Yet, with the disestablishment of the 
U.S. Joint Forces Command, the JIOR has been transferred to the Joint 
Staff and has experienced budget cuts, as opposed to the increases one 
would expect for such a critical capability. What is DOD's plan to 
ensure the JIOR is adequately resourced to fully meet the needs of 
capability developers, testers, and the training community?
    Mr. Lemnios. I have been assured that the Joint Staff fully 
recognizes the current and future criticality of the JIOR. In 
accordance with guidance from the Secretary of Defense, the Joint Staff 
established a governance structure for the JIOR involving all DOD 
entities to facilitate a closer alignment of requirements to resources 
and normalize the event planning process. This governance structure 
will ensure greater synchronization among all DOD capabilities and 
ongoing development efforts, such as the National Cyber Range and U.S. 
Strategic Command's Cyber Training Initiative. In addition, the Test 
Resource Management Center (TRMC) is currently conducting a 
comprehensive review of DOD test and evaluation infrastructure needs. 
Part of this study will examine cyber test infrastructure, to include 
the JIOR, and make recommendations for their future funding and 
management. In late summer, these recommendations will go to the Under 
Secretary of Defense for Acquisition, Technology, and Logistics 
(USD(AT&L)), one of the co-chairs of a four-star level Cyber Investment 
Management Board (CIMB). The CIMB's purpose is to improve alignment of 
investments for the fiscal year 2014 President's budget request to meet 
needs across the cyber enterprise, including developers, testers, and 
the training community.

    5. Senator Hagan. Mr. Lemnios, in addition to basic range 
connectivity, what is DOD doing to improve the operational and threat 
environments that may be accessed via the JIOR?
    Mr. Lemnios. In coordination with JIOR stakeholders, the Joint 
Staff is developing an information operations/cyber capabilities 
repository and seeking out new technologies to provide persistent 
environments when needed, streamline planning efforts, emulate network 
traffic, and rapidly reset or sanitize environments. DOD is actively 
seeking to harvest new capabilities that will enhance JIOR technology, 
capacity, and compatibility. Additionally, in partnership with the 
Joint Mission Environment Test Capability (JMETC) program, DOD is 
planning to enhance capacity and efficiency through new technology, and 
to invest in improved instrumentation, visualization, traffic 
generation, and threat capabilities.

    6. Senator Hagan. Mr. Lemnios, are these efforts fully resourced so 
that most range customers will have ready access to standard 
environments without significant delays and costs to develop and 
accredit their own tailored environments?
    Mr. Lemnios. Yes, the JIOR is resourced sufficiently, balanced with 
other DOD priorities, to allow the highest priority range customers to 
have ready access. However, the current budget climate does force 
prioritization, and DOD is addressing resource challenges now for the 
anticipated technology and future capacity requirements of this 
critical capability. The Joint Staff is currently postured to ensure 
proper establishment, prioritization, and alignment of requirements and 
development efforts to support range customers. In addition, the CIMB, 
which was created in response to section 933 of Ike Skelton National 
Defense Authorization Act for Fiscal Year 2011, and co-chaired by 
USD(AT&L), is addressing cyber investment across DOD.

        DARPA COLLABORATION WITH OTHER FEDERAL ``ARPA'' AGENCIES

    7. Senator Hagan. Dr. Gabriel, the DARPA mission is to ``prevent 
strategic surprise from negatively impacting U.S. national security and 
create strategic surprise for U.S. adversaries by maintaining the 
technological superiority of the U.S. military.'' The Homeland Security 
Advanced Research Projects Agency's (HSARPA) mission is to focus on 
``Homeland security research and development (R&D) that could lead to 
significant technology breakthroughs and greatly enhance departmental 
operations.'' The Intelligence Advanced Research Projects Activity 
(IARPA) ``invests in high-risk/high-payoff research programs that have 
the potential to provide the Nation with an overwhelming intelligence 
advantage over future adversaries.'' It appears that these R&D agencies 
share similar objectives of focusing on technologies to address 
persistent and future threats. What collaborative and coordinated 
efforts are underway or planned between DARPA and its counterparts, 
HSARPA and IARPA, to address threats emanating from cyber space?
    Dr. Gabriel. DARPA has had a robust collaborative and coordinated 
effort with both HSARPA and IARPA. There are numerous interactions of a 
more informal nature with both agencies. In addition, the following 
program-level interactions have occurred:

         DARPA and HSARPA are collaborating to integrate and 
        transition technologies developed under DARPA's Scalable 
        Network Monitoring (SNM) program. DARPA has also provided SNM 
        data to HSARPA's PREDICT database where it is available to 
        HSARPA and IARPA researchers.
         DARPA and HSARPA are developing a Memorandum of 
        Agreement to transition technology created under DARPA's 
        Military Networking Protocol Program (MNP) to the Department of 
        Homeland Security (DHS).
         IARPA has provided a reviewer for the source selection 
        panel for DARPA's new High-Assurance Cyber Military Systems 
        (HACMS) program.
         DARPA closely coordinates with IARPA on all natural 
        language understanding R&D efforts. In addition, DARPA and 
        IARPA are sharing language data: IARPA is providing Babel 
        speech data to DARPA and DARPA is providing BOLT data to IARPA.
         DARPA and IARPA are exploring possible collaborative 
        activities in the area of ``big data'' involving DARPA's new 
        XDATA program.

                         EMERGING TECHNOLOGIES

    8. Senator Hagan. Mr. Lemnios and Dr. Gabriel, at a recent hearing 
before the Subcommittee on Emerging Threats and Capabilities of the 
House Armed Services Committee, Dr. Gabriel stated that commercial 
electronics, such as smart phones and tablets, have created 
``vulnerabilities for the United States by enabling sensors, computing, 
imaging, and communications capabilities that as recently as 15 years 
ago, were the exclusive domain of military systems.'' With the U.S. 
military becoming increasingly dependent on these same or similar 
technologies, how does the U.S. military regain/maintain cyber 
superiority in the future?
    Mr. Lemnios and Dr. Gabriel. DOD is striving to reduce the time 
needed to build military and enterprise systems by taking advantage of 
fast-moving commercial hardware, software, and services, thereby 
harnessing global investments in information technology to its benefit. 
This reliance, however, does create dependencies and potential 
vulnerabilities owing both to the quality of the technologies and to 
adversaries' ability to access the same products and services. First 
and foremost, DOD has instituted the requirement for all major 
acquisition programs to have a program protection plan, specifically to 
address potential vulnerabilities and mitigation. In addition, the DOD 
cyber S&T strategy addresses these potential vulnerabilities in several 
ways: by creating foundational models for attaining trust in system 
design and operation with elements of mixed trust (i.e., trusted 
systems built from untrusted components); by creating techniques for 
making systems resilient to cyber incursions or failures by 
incorporating features such as architectural diversity and 
unpredictability; and by creating the ability to maneuver or adapt 
cyber systems dynamically as conditions arise. Finally, DOD recognizes 
that certain elements of critical systems technology should never be 
open to adversary view. To help maintain cyber superiority, commercial 
off-the-shelf technologies must be supplemented with certain key 
government-only and carefully-protected technological components.

    9. Senator Hagan. Mr. Lemnios and Dr. Gabriel, is DOD investing 
adequately in the test capabilities and range environments that will be 
needed to remain current with these advancing technologies?
    Mr. Lemnios and Dr. Gabriel. The adequacy of investment needed for 
cyber test ranges is hard to answer. This is a new and uncertain 
technology area that we are still working to understand completely. 
However, DOD, through the JMETC program, is planning to enhance 
capacity and to invest in improved instrumentation, visualization, 
traffic generation, and threat capabilities as required. The TRMC is 
currently conducting a comprehensive review of DOD test and evaluation 
infrastructure. Part of this study will examine cyber test 
infrastructure and make recommendations for their future capabilities 
and funding in response to the growing total DOD investment. We believe 
understanding the needs in this area will continue to be a priority.

    10. Senator Hagan. Mr. Lemnios and Dr. Gabriel, how are lessons 
learned from cyber events during major exercises and real-world 
operations being addressed by DOD?
    Mr. Lemnios and Dr. Gabriel. My (Mr. Lemnios) staff (primarily in 
my Rapid Fielding Directorate) has a S&T liaison at each combatant 
command (COCOM). Additionally, we have S&T ties with the military 
departments, the NNSA, and all other defense agencies.
    COCOMs identify capability gaps based on lessons learned during 
exercises and real-world operations. They prioritize these gaps and 
submit them as an Integrated Priority List (IPL). The S&T liaisons at 
the COCOMs have the responsibility for identifying limitations, 
identified in the IPLs that result from lessons learned (capability 
gaps), to our staff so we can rapidly address their needs. In addition, 
these COCOM S&T advisors forward key lessons learned from exercises to 
us. This works well. For instance, after U.S. Pacific Command's (PACOM) 
Exercise Terminal Fury 2010, we identified, with the help of our PACOM 
S&T liaison, several serious potential limitations in the PACOM 
network. Details are classified, but as a result, we initiated the 
Computer Active Network Defense in Depth (CANDID) Joint Capability 
Technology Demonstration (JCTD). CANDID creates a sub-net that enables 
current C2 systems using dedicated hardware to create a Virtual Secure 
Enclaves (VSEs) that will allow them to operate in a cyber-challenged 
environment. CANDID also provides a cyber monitoring and alerting 
system. This will be demonstrated during PACOM's Exercise Valiant 
Shield 12.
    In September 2011, we began an initiative titled Cloudbreak to 
address COCOM C2 gaps by providing composable, net-centric capabilities 
based on common architectures across networks. CLOUDBREAK provides the 
venue to demonstrate mature capabilities that address IPL gaps and have 
sustainable transition paths. Our first campaign is underway at PACOM 
and will demonstrate cyber capabilities needed by their CYBER PAC, C2 
capabilities needed by their Joint Operations Center (JOC), and 
intelligence, surveillance, and reconnaissance (ISR) capabilities 
needed by their Joint Intelligence Operations Center (JIOC). We began 
fielding these capabilities in February 2012. They are operational now 
and will be used in the upcoming PACOM Exercises Terminal Fury and 
Valiant Shield.
    We are only providing these two examples to show how we are 
identifying, then addressing, limitations from exercises and real world 
operations. We do similar things with the other COCOMs.

                             CYBER TESTING

    11. Senator Hagan. Mr. Lemnios, today's weapons systems are more 
complex and more interdependent than any of their predecessors. Cyber 
capabilities are inherent in virtually every system deployed by the 
U.S. military. Interoperability both enhances a weapon system's 
effectiveness while creating new potential vulnerabilities. As these 
weapons systems are tested and fielded, how does DOD ensure that its 
weapons systems remain both interoperable and secure?
    Mr. Lemnios. Through the Deputy Assistant Secretary of Defense for 
Developmental Test and Evaluation (DASD(DT&E)) and Director, TRMC, DOD 
is developing new cyberspace test and evaluation capabilities to 
support interoperability and cyber testing for weapon systems in 
development. As this effort matures, so will DOD improve its ability to 
ensure that weapons systems remain both interoperable and secure. The 
DASD(DT&E) conducted an initial pilot program in December 2011 to 
examine methodologies and infrastructure for testing mission threads 
within a realistic cyber environment. To facilitate these efforts, DOD, 
in partnership with the JMETC program, is planning to enhance capacity 
and to invest in improved instrumentation, visualization, traffic 
generation, and threat capabilities.

    12. Senator Hagan. Mr. Lemnios, what new test or experimentation 
methodologies or capabilities are needed to ensure that the cyber 
components of these systems meet warfighters' needs in the evolving 
operational and threat environments?
    Mr. Lemnios. Ensuring that cyber components meet warfighters' needs 
requires that the experimentation environments resemble the real 
operating environments in which cyber technologies are meant to work. 
The challenge includes the integration of cyber and military platforms 
and weapons systems. Reusable scenario packages must be developed to 
create realistic environments, including cyber and simulated 
operational aspects, and new measurement and recording capabilities 
need to be developed to allow collection of data during experiments to 
refine them for future use.
    In fiscal year 2011, we initiated a pilot project called the Cyber 
Measurement Campaign to develop experimentation methodologies to 
measure effectiveness of new cyber security S&T. For instance, 
experiments in operational agility will focus on quantitatively 
measuring the ability to respond to attacks in a timely manner, and to 
rapidly adapt to thwart the attack. Experiments such as these will 
provide the empirical data for objectively evaluating new research 
ideas early in the technology development lifecycle and will allow us 
to validate and refine our research roadmaps. Improved testing 
methodologies developed in these experiments can also be subsequently 
used by the testing community.
    In addition, permanent distributed cyber ranges are needed, with 
sufficient flexibility to enable running many different variations of 
each test and rapid replanning and reconfiguration of experiments. 
Prototype cyber range technology, in conjunction with existing range 
facilities, must be matured to meet these needs. The investments needed 
to develop these capabilities are being examined by the newly created 
DOD CIMB. The goal is to establish a persistent, distributed community 
for ongoing experimentation in applying scientific methods to 
cybersecurity.

              BEHAVIOR-BASED VS. SIGNATURE-BASED DEFENSES

    13. Senator Hagan. Mr. Lemnios, in his testimony, Dr. Peery 
stressed that defensive systems that rely on knowing in advance what 
the signature of an attack looks like, so that a monitoring device or 
software on the defended network can recognize that attack as it is 
happening and block it, are just not robust. Such systems cannot 
prevent new forms of attack that are becoming easy and inexpensive to 
construct. He points out that a different generic approach based on 
analyzing the behavior of new software entering a defended computer, 
and the subsequent behavior of that computer, is much more promising 
and will eclipse signature-based defenses over time. The major, 
enterprise-wide defensive system deployed in DOD is a signatures-based 
system--the Host-Based Security System (HBSS). In addition, the system 
provided by NSA, known as Einstein, to defend DOD, the rest of the 
Federal Government, and potentially critical infrastructure, is also 
signature-based. Last year this committee passed a provision requiring 
DOD to develop a comprehensive strategy to adopt behavior-based 
approaches for cybersecurity at every level of its network--endpoints, 
enclaves, and gateways--to enable rapid discovery of previously unknown 
threats. In addition, the committee has funded pilot programs to 
demonstrate advanced commercial technologies for defense that use 
techniques other than signatures of known threats. Your statement makes 
no mention of the importance of behavior-based detection technology for 
cyber defense, or of the pilot programs that Congress has funded. Non-
signature-based defenses do not appear in any list of technology 
thrusts. Why not?
    Mr. Lemnios. While my statement did not specifically cite the 
importance of behavior-based technology, that does not indicate the 
development of this capability is not important. DOD's approach to 
network defense is consistent with Dr. Peery's observations regarding 
signature-based capabilities. We believe that the signature-based 
defenses provided by HBSS and network sensors are a necessary baseline 
that should be augmented, and in the future potentially replaced by, 
non-signature-based tools, capabilities, and techniques. The overall 
approach is best understood in the context of a layered cyber defense 
approach, which incorporates signature-based capabilities, non-
signature-based capabilities, proper configuration and management of 
endpoints, and robust attack detection and diagnosis. The signature-
based capabilities are well known and ubiquitously deployed, forming 
the foundation of the defenses and harnessing the well-funded 
commercial investments in threat identification and signature 
development.
    Non-signature-based capabilities are currently deployed on a more 
limited basis, partially because of the relative immaturity of the 
products involved and issues with respect to enterprise DOD fielding. A 
key example is the Host Intrusion Prevention System (HIPS) module 
within HBSS which incorporates heuristic and behavior-based techniques 
and flexible policy definitions to detect and remediate malicious 
activity. In addition, HBSS includes protections against generic buffer 
overflows based on generalized packet anomalies rather than specific 
signatures to detect adversary attempts to execute malicious code. At 
the network level, a variety of policy-based traffic blocks are 
implemented at various levels across DOD based on anomalous behaviors 
and non-signature-based information developed through the attack 
detection and diagnosis process.
    Proper configuration and management of endpoints is implemented 
with the goal of removing technical vulnerability as much as possible. 
Examples are DOD's efforts to configure every computer as securely as 
possible and DOD's efforts to deploy and use strong cyber identity 
credentials from the DOD Public Key Infrastructure. Since a given 
vulnerability may play a role in a variety of different types of cyber 
attack, these vulnerability removal efforts are more robust against 
classes of attack than are signature-based protections. The attack may 
be blocked without knowing much about the attack characteristic other 
than that the attack depended on the now non-existent vulnerability.
    An additional goal relative to protection of endpoints is to shield 
remaining vulnerabilities against attack. Examples are: the several 
layers of perimeter defense (often firewalls) between the internet and 
a given DOD computer; and some of the functions of DOD's HBSS. Some of 
the current perimeter defenses use both signature and non-signature-
based protections, examples of which are protocol and application 
filtering firewalls. These at least partially depend on recognizing the 
behaviors of particular protocols or applications contained in the 
protocols, and on recognizing the signatures of particular attacks 
embedded in the protocols the defenses allow to pass.
    Robust attack detection and diagnosis acknowledges that defenses 
will be defeated, and calls for the collection, processing, and 
continuous analysis of network sensor data and traffic. This approach 
is strengthened by the analytical integration of data from multiple 
sources and multiple collection approaches, including signature-based, 
non-signature-based, and end-point baseline configuration and 
activities.
    DOD is engaged in pilot efforts to investigate the advantages and 
applicability of behavior-based technologies at distinct layers in the 
network defense. The Defense Information Systems Agency is conducting 
pilots of network-based and end-user-based non-signature technologies. 
At the host level, lab testing has determined several potentially 
useful solutions that apply to key security concerns, including safe 
browsing, anomaly-based detection and mitigation, and various 
whitelisting strategies. At the network level, a pilot is being pursued 
that seeks to sandbox questionable traffic to identify malicious 
attacks at the DOD boundary.
    The pilots were chosen to complement DOD's existing protection and 
detection systems so that if a particular pilot is successful, 
transition to production can be done in a way that is compatible with 
existing technology, or that takes advantage of some of the features of 
the existing technologies. A key goal is to be able to deploy non-
signature-based technologies without reengineering the other components 
of DOD's layered defenses.

                  SECURE SOFTWARE AND SOFTWARE TESTING

    14. Senator Hagan. Mr. Lemnios, your statement stressed the 
challenges we face in achieving security for our information systems 
and our tactical weapons systems due to inadvertent or potentially 
purposefully inserted vulnerabilities in the so-called ``supply chain'' 
of hardware components and software that come from diverse industry 
sources, many of which are overseas. You rightly emphasize the need for 
technology solutions to this problem. What is DOD doing to discipline 
and incentivize the defense industrial base to write secure software 
code in the first place, so that there are far fewer vulnerabilities 
for adversaries to exploit?
    Mr. Lemnios. In an effort to discipline and incentivize the defense 
industrial base to ensure that custom developed DOD software solutions 
are secure, DOD has established comprehensive program protection 
planning policy and guidance for all acquisition programs. Program 
Protection Plans (PPP) are now required at all major milestones; these 
plans communicate data and requirements for all security aspects of the 
program, including software security. These processes require DOD's 
acquisition programs to use software assurance best practices, 
including tools, methodologies, and standards, to test for, detect, and 
mitigate vulnerabilities and weaknesses during software development.
    Additionally, DOD is engaged with key commercial software vendors 
to actively contribute to community-wide standards and practices to 
identify common vulnerabilities and weaknesses and improve the secure 
development of commercial off-the-shelf (COTS) software products. DOD 
actively encourages the sharing of common vulnerabilities, weaknesses, 
and attack patterns information within the software industry to develop 
more secure code in DOD custom software development and the secure 
adaptation of COTS software for DOD use.

    15. Senator Hagan. Mr. Lemnios, what is DOD doing to exploit and 
further develop commercial tools that can automatically analyze both 
source code and so-called machine code to detect vulnerabilities and 
weaknesses? These tools can help developers to correct mistakes as code 
is being written, and they can help the testing community determine the 
quality and security of software being developed for DOD.
    Mr. Lemnios. DOD has taken steps to address the need to identify 
vulnerabilities and weaknesses during software development, and 
encourage use of, and further development of commercial software 
assurance (SwA) tools. First, DOD has established comprehensive program 
protection planning policy and guidance for all acquisition programs. 
PPP are now required at all major milestones; these plans communicate 
data and requirements for all security aspects of the program, 
including software security. These processes require DOD's acquisition 
programs to use SwA tools, methodologies, and standards, to test for, 
detect, and mitigate vulnerabilities and weaknesses during software 
development. Second, DOD is working with academia, industry, the 
Services, and defense agencies on the development of improved SwA tools 
and techniques such as formal verification, secure-coding, run-time 
analysis, and code visualization.
    DOD actively engages with the broader SwA community through the DOD 
SwA Community of Practice (CoP), which consists of organizations across 
DOD, industry, FFRDCs, and other government agencies. This CoP serves 
as a forum to share knowledge and feedback regarding SwA tools and 
their use.

                ENTERPRISE-SCALE CYBERSECURITY SOLUTIONS

    16. Senator Hagan. Mr. Lemnios, starting about 5 years ago, DOD 
undertook a large-scale, DOD-wide fielding of HBSS. DOD has 
approximately 7 million desktop computers spread across all the 
Services, defense agencies, and COCOMs--on each of which HBSS had to be 
installed, managed, and supported. This was an expensive and difficult 
process--and it still is not complete. Our sense is that this 
experience instilled reluctance in DOD to attempt any further 
enterprise-wide security solutions that require touching these millions 
of endpoints. The problem is that HBSS is a first-generation security 
solution that relies chiefly on programming signatures of known cyber 
attack tools and methods--an approach that is insufficient for the 
future. Commercial industry is rapidly developing new tools that use 
different approaches to either discovering threats that have not been 
seen before or preventing such threats from being able to take control 
of a targeted computer. This committee has funded pilot programs to 
demonstrate this technology. In your view, what can be done to overcome 
the challenges to fielding endpoint or host-based enterprise 
cybersecurity solutions when the enterprise is so vast, diverse, and 
complex as DOD?
    Mr. Lemnios. The premise of your question is that DOD's 
infrastructure is too vast, diverse, and complex to rely on host-based 
enterprise cybersecurity solutions. You asked ``what can be done to 
overcome . . . these challenges.'' Implicit in your question is that we 
should investigate new methodologies. We agree that the current DOD 
enterprise is very complex and that malware signature-based security is 
not enough. However, HBSS is just one layer of a security architecture 
that starts at the DOD gateways and extends to the cryptographic tokens 
for user identity. We believe maturing technologies to improve both 
host-based architectures and new network methodologies offers the most 
prudent course for the protection of DOD.
    HBSS is an integrated system that is more than a signature-based 
detection solution. It is also a sensor that can collect many kinds of 
information about the state of the host--information that can be used 
in future non-signature methods of detection--and an extensible 
infrastructure for fielding new plug-in capabilities. In addition to 
host level intrusion detection and prevention, HBSS also provides 
detailed asset tracking, security policy management and control, host 
level baseline and program identification, security compliance 
reporting, and control of devices connected to the host.
    There is no question that fielding an endpoint security 
architecture on 7 million desktops throughout DOD was an arduous 
process. However, the work done to put HBSS in place has provided an 
installation infrastructure for future deployments. The initial work on 
the infrastructure, as well as continuing initiatives, will make future 
deployments a much less arduous and expensive process. New HBSS plug-in 
modules are deployed much more rapidly and efficiently now that the 
server structure is in place.
    New types of information can be tapped by configuring the HBSS 
sensing capabilities and reporting to security services at the host or 
off-host. New tools and detection methods coming from industry, such as 
the recent cyber pilots, can be acquired and distributed to DOD's 
desktops as plug-ins to the platform that HBSS provides, so that 
advanced S&T can be incorporated as it emerges. In addition to host 
level protection, new capabilities for defending DOD's systems and 
networks are also being implemented at the enclave network, backbone 
network, and boundary controller access points, intercepting attack 
actions before they reach the hosts themselves.

                   HIRING THE MOST QUALIFIED EXPERTS

    17. Senator Hagan. Dr. Gabriel, understanding that DARPA relies on 
a mix of hiring authorities to bring the best talent to DOD, what help 
do you need from this committee to ensure you can continue recruiting 
the best talent for our Nation?
    Dr. Gabriel. DARPA uses a dynamic mix of hiring authorities: Highly 
Qualified Experts, 1101s, and Intergovernmental Personnel Act. In order 
for DARPA to continue to rapidly and efficiently hire the Nation's most 
qualified technical experts from industry, academia, and the private 
sector; DARPA is asking for an increase in our 1101 authorization by 
20, from the current number of 40 to 60.
                                 ______
                                 
               Questions Submitted by Senator Rob Portman

                           BUDGET CONTROL ACT

    18. Senator Portman. Mr. Lemnios, as you know, the Budget Control 
Act requires DOD in January 2013 to reduce all major accounts over 10 
years by a total of $492 billion through sequestration. This will 
result in an immediate $55 billion reduction to the fiscal year 2013 
defense program. The Secretary of Defense has been quoted on numerous 
occasions that the impact of these cuts would be ``devastating'' and 
``catastrophic,'' leading to a hollow force and inflicting serious 
damage to our national defense. Yet, the Military Services must begin 
this month with some type of guidance on developing a Service budget 
for fiscal year 2014. Can you specifically describe what impact you 
anticipate in regard to cyber defense programs if sequestration occurs?
    Mr. Lemnios. The fiscal year 2013 budget includes significant 
funding for cybersecurity efforts across the government and includes 
both defense and non-defense, and classified and unclassified 
activities. At this stage, it would be premature to speculate on the 
specific impacts sequestration would likely have on cybersecurity 
activities. However, cuts under sequestration could hurt efforts to 
fight cyber threats, including four key efforts:

         Improving the security of our classified Federal 
        networks and addressing WikiLeaks;
         Continuing the Comprehensive National Cybersecurity 
        Initiative (CNCI);
         Sustaining the National Strategy for Trusted 
        Identities in Cyberspace; and
         Initiating continuous monitoring of unclassified 
        networks at all Federal agencies.

    19. Senator Portman. Mr. Lemnios, what programmatic cuts would have 
the most significant impact on DOD's ability to defend against cyber 
intrusions?
    Mr. Lemnios. The fiscal year 2013 budget includes significant 
funding for cybersecurity efforts across the government and includes 
both defense and non-defense, and classified and unclassified 
activities. At this stage, it would be premature to speculate on the 
specific impacts sequestration would likely have on cybersecurity 
activities. However, cuts under sequestration could hurt efforts to 
fight cyber threats, including four key efforts:

         Improving the security of our classified Federal 
        networks and addressing WikiLeaks;
         Continuing the CNCI;
         Sustaining the National Strategy for Trusted 
        Identities in Cyberspace; and
         Initiating continuous monitoring of unclassified 
        networks at all Federal agencies.

    20. Senator Portman. Mr. Lemnios, how will you assess the risk of 
each cut?
    Mr. Lemnios. DOD is not currently preparing for sequestration, and 
the Office of Management and Budget (OMB) has not directed agencies, 
including DOD, to initiate plans for sequestration. It is premature to 
assess the risk of each cut.

    21. Senator Portman. Mr. Lemnios, was any planning commenced to 
date to ameliorate the impact of sequestration reductions to 
cybersecurity programs?
    Mr. Lemnios. DOD is not currently preparing for sequestration, and 
OMB has not directed agencies, including DOD, to initiate plans for 
sequestration.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                          INFORMATION-SHARING

    22. Senator Chambliss. Mr. Lemnios, both government and commercial 
networks worldwide have experienced repeated assault by hackers over 
the past several years. In your testimony, you touched on the need for 
increased information-sharing between agencies and sectors in order to 
effectively protect our national security. Several pieces of 
legislation have been introduced in the House and Senate to address 
this fundamental point; however, while we all agree on the need for 
information-sharing, there is disagreement on the most effective 
approach. Keeping in mind private sector concerns and the potentially 
negative impact of increased regulation, what do you recommend as the 
best approach to facilitate greater information-sharing?
    Mr. Lemnios. I am not sure I want to assess any approach as best, 
but one approach to facilitate greater information-sharing of cyber 
threat intelligence is to reduce the barriers to sharing, and promote a 
federated communities approach to sharing. In support of this approach, 
the Secretary of Defense recently endorsed the Cybersecurity Act of 
2012 introduced into the Senate by Senators Lieberman, Collins, 
Feinstein, and Rockefeller. Reducing barriers will be accomplished in 
part by making sharing voluntary, not mandatory; by incentivizing 
sharing and considering safe harbor provisions; and by sharing more 
broadly the threat information provided in government brokered 
exchanges (e.g., Defense Industrial Base Collaborative Information 
Sharing Environment) by relaxing restrictions on secondary sharing in 
ways consistent with the voluntary nature of the sharing. The nature of 
information shared should also be considered. Threat indicators can be 
shared more broadly and readily if sensitive information about 
compromises and vulnerabilities is not required, while still providing 
value to a larger sharing community.
    One size will not fit all. Instead, the approach should support a 
federation of sharing communities each with possibly different sharing 
models (e.g., hub and spoke, post to all, hybrid) and each with its own 
``circle of trust'' among its members. To encourage wider, voluntary 
sharing of actual incident data, the approach should also support 
models that allow the use of sensitive information in cyber defenses 
without exposing the information too broadly. This could be done for 
instance by supporting models in which security service providers use 
such sensitive information to protect customers, but without sharing 
the sensitive information with those customers. To manage costs, scale, 
and enable automated cross-sharing among federated communities, we 
should develop and adopt common standards (e.g., National Institute of 
Standards and Technology's (NIST) Security Content Automation Protocol) 
and trust models; structured cyber threat information sharing 
repositories, and frameworks for creating, managing, and evolving 
federated information sharing communities.

    23. Senator Chambliss. Mr. Lemnios, in your testimony you highlight 
``foundations of trust'' as one of the areas of development to support 
the ``DOD Strategy for Operating in Cyberspace.'' This trust is 
confidence that our systems will perform as expected and have not been 
compromised. The military supply chain is extremely vulnerable to cyber 
attacks as we have seen from media reports. Given supply-chain 
challenges and the fact that many components are provided by foreign 
commercial sources, is it possible that some components of our cyber 
defenses may contain components from less than fully trusted sources? 
If so, how do you recommend we address this issue and maximize the 
trust we place in our cyber defenses?
    Mr. Lemnios. Yes, it is possible that left unaddressed, some 
components of our cyber defenses could contain components from less 
than fully trusted sources. The globalization of the Information and 
Communications Technology (ICT) market has provided DOD with 
significant cost and performance benefits but also presents challenges 
to our national security systems. DOD is, however, taking a proactive 
risk management approach to address this issue through its Trusted 
Defense Systems Strategy, first reported to Congress in the Report on 
Trusted Defense Systems in January 2010.
    The strategy is based around four core elements that:

    (1)  prioritize scarce resources based on mission criticality of 
the system in question,
    (2)  make comprehensive program protection planning a requirement 
for all acquisition programs,
    (3)  improve DOD's capability to detect and respond to 
vulnerabilities, and
    (4)  collaborate with industry to develop commercial standards for 
supply chain risk management and secure commercial products.

    DOD is deploying this strategy in partnership with the Military 
Services and acquisition program offices, strengthening and leveraging 
systems security engineering, supply chain risk management, hardware 
and software assurance, counterintelligence, test and evaluation, and 
information assurance capabilities in a risk-based approach to 
mitigating cyber and supply chain vulnerabilities.
                                 ______
                                 
             Questions Submitted by Senator Scott P. Brown

                            CYBER WORKFORCE

    24. Senator Brown. Mr. Lemnios, in light of DOD's need to address 
the Nation's evolving cyber threat, how does DOD plan to build a strong 
cyber workforce and access the highest caliber technical talent in 
academia and industry?
    Mr. Lemnios. DOD efforts to build a strong cybersecurity workforce 
are led by the DOD CIO. Among many ongoing efforts, most noteworthy is 
DOD's key role in the National Initiative for Cybersecurity Education 
(NICE). Working closely with appropriate DOD activities and with other 
NICE agencies such as NIST, the CIO has identified the knowledge, 
skills, and abilities required to perform key cybersecurity skill sets. 
This framework of skill sets forms the foundation for developing in-
house cybersecurity expertise.
    DOD is sharing the NICE skill set framework with industry and 
academia. Leading educators and certification institutes have begun to 
incorporate the NICE framework into their training and education 
programs, and into standards and requirements documents.
    The NICE component on Cybersecurity Workforce Training and 
Professional Development is in the process of assessing the size and 
quality of the cyber workforce, identifying workforce gaps, and will 
develop requirements, a training catalog, and professional development 
roadmaps for cybersecurity professionals. DOD is a leader in these 
efforts and is actively incorporating the NICE guidance into cyberspace 
workforce efforts.

    25. Senator Brown. Mr. Lemnios, are you aware of the high 
technology throughout New England and its potential to quickly identify 
solutions that meet DOD's cyber requirements?
    Mr. Lemnios. Yes, as a long-time resident of Massachusetts, and 
former Chief Technology Officer of MIT/Lincoln Lab in Lexington, MA, I 
am very familiar with high technology throughout New England, and 
especially in the Boston high technology corridor. For example, the 
nationally-recognized Massachusetts' Advanced Cyber Security Center 
(ACSC) is a cross-sector research facility established in September 
2011 and hosted by MITRE Corporation. Members of ACSC's Strategic 
Advisory Board have leadership experience with DHS and DOD, and bring 
an insider's understanding of DOD cyber requirements. Additionally, the 
University of Rhode Island hosts the Digital Forensics and Cyber 
Security Center, which is a multi-disciplinary university center that 
provides courses and degree programs, research, services, and 
consulting in Digital Forensics, Information Assurance, and Cyber 
Security. These are only a small sample of the types of organizations 
located in New England that are capable of contributing to the solution 
of DOD's cyber requirements.

    [Whereupon, at 4:12 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        TUESDAY, MARCH 27, 2012

                           U.S. Senate,    
                   Subcommittee on Emerging
                          Threats and Capabilities,
                               Committee on Armed Services,
                                                    Washington, DC.

THE DEPARTMENT OF DEFENSE'S ROLE IN THE IMPLEMENTATION OF THE NATIONAL 
   STRATEGY FOR COUNTERTERRORISM AND THE NATIONAL STRATEGY TO COMBAT 
                     TRANSNATIONAL ORGANIZED CRIME

    The subcommittee met, pursuant to notice, at 2:40 p.m. in 
room SR-232A, Russell Senate Office Building, Senator Kay Hagan 
(chairman of the subcommittee) presiding.
    Committee members present: Senators Hagan, Portman, and 
Inhofe.
    Majority staff members present: Richard W. Fieldhouse, 
professional staff member; Creighton Greene, professional staff 
member; Jessica L. Kingston, research assistant; Michael J. 
Kuiken, professional staff member; William G.P. Monahan, 
counsel; and Michael J. Noblet, professional staff member.
    Minority staff member present: Adam J. Barker, professional 
staff member.
    Staff assistant present: Kathleen A. Kulenkampff.
    Committee members' assistants present: Anthony Lazarski, 
assistant to Senator Inhofe; and Brent Bombach, assistant to 
Senator Portman.

        OPENING STATEMENT OF SENATOR KAY HAGAN, CHAIRMAN

    Senator Hagan. We will bring to order the Emerging Threats 
and Capabilities Subcommittee hearing today. I want to welcome 
all of our witnesses and Senator Portman.
    Today in preparation for the subcommittee's upcoming work 
on the National Defense Authorization Act (NDAA) for Fiscal 
Year 2013, we will hear testimony from our witnesses on the 
Department of Defense's (DOD) role in the implementation of the 
National Strategy for Counterterrorism (CT) and the National 
Strategy to Combat Transnational Organized Crime (TOC), as well 
as the new Defense Strategic Guidance and Priorities.
    I want to welcome the Assistant Secretary of Defense for 
Special Operations/Low-Intensity Conflict (SO/LIC), Michael A. 
Sheehan, to the subcommittee for his first hearing since being 
confirmed by the full Senate in December. Welcome back to the 
subcommittee, Deputy Assistant Secretary of Defense for Special 
Operations and Combating Terrorism, Garry Reid; and Deputy 
Assistant Secretary of Defense for Counternarcotics and Global 
Threats, William F. Wechsler. Thank you for being here.
    Last June, President Obama released the new National 
Strategy for Counterterrorism. This strategy was released 
shortly after an inflection point for our Nation's CT operators 
with the successful mission against Osama bin Laden, preceding 
it by a month. While our Nation's CT efforts appropriately 
remain an interagency endeavor under the new strategy, DOD has 
and will continue to play a key role in building security 
partnerships that enable our foreign partners, as well as 
directly applying various CT tools and capabilities wherever 
appropriate.
    In addition to the National Strategy for Counterterrorism, 
in July of last year, the President released our Nation's first 
National Strategy to Combat TOCs. Rightly, in my view, the 
strategy recognizes that TOC is a significant threat to 
national and international security. While combatting TOC is 
certainly not a core function of DOD, the Department does play 
a key role in supporting operations of both U.S. and foreign 
law enforcement agencies, and it does so by providing funding 
and unique enabling capabilities, conducting operations to 
detect and monitor illicit trafficking that may be destined for 
the United States, and, again, the building of relationships 
and the capacity of foreign militaries and law enforcement 
forces to carry out similar operations themselves.
    More recently, the new Defense Strategic Guidance and 
Priorities further emphasized the importance of capacity 
building and other theater security cooperation activities in 
support of the geographic combatant commanders, as well as the 
important role our Special Operation Forces (SOF) will play in 
the implementation of our Nation's engagement overseas. We hope 
our witnesses will address their ongoing efforts to support the 
implementation of these new strategies and any legislative 
authorities or funding they may need to carry out adequately 
their assigned responsibilities under these strategies.
    A number of authorities expire this year, including DOD's 
ability to support CT partners in Yemen and national 
contributing to international CT operations in Somalia. Another 
authority to provide a broad range of support to the Colombian 
security services is also set to expire at year's end. The 
subcommittee looks forward to discussing DOD's requirements in 
these regions and elsewhere.
    In the interest of ensuring that there's adequate time for 
questions, I'll insert the remainder of my opening statement 
into the record.
    [The prepared statement of Senator Hagan follows:]

               Prepared Statement by Senator Kay R. Hagan

    Today, in preparation for the subcommittee's upcoming work on the 
National Defense Authorization Act for Fiscal Year 2013, we will hear 
testimony from our witnesses on the Department of Defense's (DOD) role 
in the implementation of the National Strategy for Counterterrorism and 
the National Strategy to Combat Transnational Organized Crime, as well 
as the new Defense Strategic Guidance and Priorities. I want to welcome 
Assistant Secretary of Defense for Special Operations/Low-Intensity 
Conflict, Michael A. Sheehan, to the subcommittee for his first hearing 
since being confirmed by the full Senate in December, and welcome back 
to the subcommittee Deputy Assistant Secretary of Defense for Special 
Operations and Combating Terrorism, Garry Reid; and Deputy Assistant 
Secretary of Defense for Counternarcotics and Global Threats, William 
F. Wechsler.
    Last June, President Obama released the new National Strategy on 
Counterterrorism. This strategy was released shortly after an 
inflection point for our Nation's counterterrorism (CT) operators with 
the successful mission against Osama bin Laden preceding it by a month. 
While our Nation's counterterrorism efforts appropriately remain an 
interagency endeavor under the new strategy, DOD has and will continue 
to play a key role in building security partnerships that enable our 
foreign partners, as well as directly applying various CT tools and 
capabilities wherever appropriate. At all times, these efforts must be 
conducted in a manner that adheres to our core American values.
    In addition to the National Counterterrorism Strategy, in July of 
last year, the President released our Nation's first National Strategy 
to Combat Transnational Organized Crime. Rightly, in my view, the 
strategy recognizes that transnational organized crime (TOC) is a 
significant threat to national and international security. While 
combatting transnational organized crime is certainly not a core 
function of DOD, the Department plays a key role in supporting 
operations by both U.S. and foreign law enforcement agencies. It does 
so by providing funding and unique enabling capabilities, conducting 
operations to detect and monitor illicit trafficking that may be 
destined for the United States, and--again--the building of 
relationships and the capacity of foreign militaries and law 
enforcement forces to carry out similar operations themselves.
    More recently, the new Defense Strategic Guidance and Priorities 
further emphasized the importance of capacity-building and other 
theater security cooperation activities in support of the Geographic 
Combatant Commanders, as well as the important role our Special 
Operations Forces (SOF) will play in the implementation of our Nation's 
engagement overseas.
    We hope our witnesses will address their ongoing efforts to support 
the implementation of these new strategies and any legislative 
authorities or funding they may need to carry out adequately their 
assigned responsibilities under these strategies. A number of 
authorities expire this year, including the Department's ability to 
support certain CT partners in Yemen and national contributing to 
international CT operations in Somalia. Another authority to provide a 
broad range of support to the Colombian security services is also set 
to expire at year's end. The subcommittee looks forward to discussing 
the Department's requirements in these regions and elsewhere.

                      COUNTERTERRORISM AUTHORITIES

    Appropriately, the President's National Strategy for 
Counterterrorism maintains our focus on pressuring al Qaeda's core, 
while emphasizing the need to build foreign partnerships and capacity 
in priority countries around the world. Assistant Secretary of Defense 
Sheehan and Deputy Assistant Secretary of Defense (DASD) Reid, in 
addition to continued direct action operations against al Qaeda, all 
three strategies emphasize the importance of DOD expanding its 
military-to-military and security cooperation activities, particularly 
as they relate to counterterrorism.
    Over the past decade, Congress has provided DOD with a number of 
counterterrorism ``train and equip'' authorities that enable U.S. 
forces to train with and enhance the capabilities of foreign nations to 
conduct counterterrorism operations on their own. These activities have 
paid dividends--most notably in Somalia where the Ugandan military, 
acting as part of an African Union peacekeeping force, has made 
substantial gains in recent months against al Shabab--an al Qaeda 
affiliate. Our engagements with the Ugandans, as well as the Kenyans 
and Ethiopians, have contributed to the ability of these forces to 
achieve such success. As the Department continues to invest in these 
activities, and as additional SOF become available from U.S. Central 
Command, I look forward to seeing similar efforts in other regions of 
particular concern.
    I hope our witnesses will discuss the Department's views on the 
various CT authorities at their disposal, as well as discuss any 
legislative gaps that may currently exist. As Assistant Secretary 
Sheehan and I discussed last week, it is important to continue our CT 
activities--both direct and indirect, but we must also invest in 
building broader relationships with those foreign security forces with 
whom we are engaging. We look forward to hearing of these broader 
efforts as well.

                      COUNTERNARCOTICS AUTHORITIES

    DASD Wechsler, most--if not all--of DOD's authorities to support 
the President's National Strategy to Combat Transnational Organized 
Crime are in your portfolio. The Department's unique counternarcotics 
authorities permit DOD to engage with, and build the capacity of, 
foreign law enforcement services and militaries, as well as enable the 
force projection capabilities of our Nation's Federal law enforcement 
agencies to outposts in Afghanistan, Central America, and West Africa. 
These authorities will likely serve as key enablers for DOD to assist 
in our government's efforts against transnational criminal 
organizations. Further, your office is well-resourced with 
approximately $1.5 billion in the President's current budget request.
    As the National Strategy to Combat TOC states, ``[t]here is no 
single structure under which transnational organized criminals operate; 
they vary from hierarchies to clans, networks, and cells, and may 
evolve to other structures. The crimes they commit also vary.'' One 
highly common crime, however, is the trafficking of illegal narcotics 
and the associated money and weapons that enhance the capabilities of 
these criminal enterprises. Despite some targeted success in the aerial 
and maritime domain, illegal narcotics continue to flow into the United 
States and the swathes of instability in countries around the world.
    The Commanders of U.S. Northern and Southern Command recently told 
the full committee that TOC poses a threat to national and 
international security, and that militaries are more often being called 
upon for internal security responsibilities. Law enforcement agencies 
that are under-resourced, poorly trained and equipped, and prone to 
corruption, complicate DOD's efforts to engage with its counterparts in 
many countries and further--risk exposing militaries to the same 
corrupting influences that have undermined their law enforcement 
counterparts and the potential for human rights abuses as a result of 
the unfamiliar operating environment. DASD Wechsler, the subcommittee 
looks forward to learning of your efforts to support the combatant 
commanders in their security cooperation activities, particularly as it 
relates to your engagement and capacity building activities with 
foreign law enforcement agencies.
    With these circumstances in mind, there are two priority areas 
within the strategy I hope our witnesses will discuss: (1) DOD's 
efforts to build international capacity, cooperation, and partnerships; 
(2) DOD's ability to enhance intelligence transnational threats. These 
two areas within the strategy fit the Department's roles and missions 
most clearly, and understanding your plans, policies, and programs in 
these areas is important to us.
    Both Assistant Secretary Sheehan and Deputy Assistant Secretary 
Wechsler bring strong backgrounds in the area of law enforcement and 
transnational threats. The subcommittee looks forward to our witnesses' 
testimony in this area, as well as their analysis of the trajectory of 
our efforts.

                   ROLE OF SPECIAL OPERATIONS FORCES

    When the new Defense Strategic Guidance was released, Secretary 
Panetta stated that ``whenever possible, we will develop innovative, 
low cost and small-footprint approaches to achieve our security 
objectives.'' I believe this statement defines our SOF. The unique 
language and cultural skills they have acquired put them at the 
forefront of implementing the strategies we are discussing today.
    This year, SOF will be engaged in more than 100 countries around 
the world and it is clear that the global security environment will 
drive a significant demand for their unique capabilities for the 
foreseeable future. Many of these personnel will deploy from North 
Carolina, home of the U.S. Army and Marine Corps Special Operations 
Commands.
    As effective as counterterrorism operations have been in degrading 
the leadership ranks and capability of al Qaeda and its affiliate 
organizations to strike our interests, DOD must continue to improve its 
ability to work with other agencies and partner nations to address the 
factors that allow violent extremism to take hold. As Admiral McRaven, 
Commander of U.S. Special Operations Command (SOCOM), told the 
committee earlier this month, ``the direct approach alone is not the 
solution to the challenges our Nation faces today as it ultimately only 
buys time and space for the indirect approach and broader governmental 
elements to take effect.''
    Our SOF rely heavily on the aforementioned authorities to carry out 
engagement and capacity building activities with partner nation 
security forces. However, some have criticized these authorities for 
not being flexible enough to proactively respond to the security 
challenges. As a result, it has been argued that our ability to carry 
out the ``indirect approach'' outlined by Admiral McRaven lags 
significantly behind our ``direct'' capabilities. News reports indicate 
that SOCOM is seeking new authorities that would better support 
deployed SOF as they work with our partner nations to address the 
common threats we face.
    The committee looks forward to hearing from our panel what 
authorities they believe will be necessary to more effectively carry 
out the ``indirect approach'' as described by Admiral McRaven now and 
in the future.

    Senator Hagan. I will now turn to Senator Portman for any 
opening remarks.
    Senator Portman.

                STATEMENT OF SENATOR ROB PORTMAN

    Senator Portman. Thank you, Madam Chairman, I welcome our 
distinguished witnesses here today, whose testimony today will 
help us to come up with a better NDAA for Fiscal Year 2013 
because we're going to be relying on your testimony for dealing 
with CT and Transnational Criminal Organizations (TCO).
    Over the past several months, we've received testimony from 
a lot of folks, including regional combatant commanders, senior 
DOD officials, and others with regard to the President's budget 
request and its implications for the programs and activities 
within their respective areas of responsibility (AOR). I think 
with this testimony we've already heard has made clear is that 
threats facing our Nation remain significant. They're changing, 
but both in scale and complexity are still very real. This is 
particularly true with regard to the threats that you are going 
to be tasked with addressing every day in your jobs and that 
you will talk about today. So, we appreciate your being here.
    I think it is fair to say al Qaeda remains the top 
terrorist threat in the United States, and while its senior 
leadership has certainly suffered some losses because of the 
sustained CT operations over the years, I am sure you will tell 
us today that its regional affiliates, such as those in Yemen, 
Somalia, and Northwest Africa are growing in capability, and we 
are seeing a resurgence of its franchise in Iraq unfortunately. 
But we look forward to hearing from that.
    Closer to home, as Chairman Hagan has just pointed out, the 
TOC issues continue to be a major problem for us. Those 
organized crime entities continue to erode our security and 
really our governance, and it is throughout our hemisphere, 
including our neighbor to the south, Mexico. So, these criminal 
groups now command multibillion dollar global networks, and in 
many cases, I understand they are trained and certainly better 
equipped than the security forces that are trying to stop them. 
So, we look forward to hearing from you about that as well.
    In addition to the myriad of security threats facing our 
Nation that I have just mentioned, we find ourselves in the 
middle of a very difficult budget situation. You are being 
asked to find savings under the Budget Control Act (BCA) of 
about $487 billion over the next 10 years. That was step one, 
but looming on the horizon, of course, is the potential for 
huge additional reductions of nearly $490 billion, so roughly 
the same amount under sequestration. That is current law. We 
have to assume it is going to occur, despite the fact that many 
of us believe that it would be devastating to the military. The 
Secretary of Defense has said that. He has also said it would 
be catastrophic to our military. He has also said it would 
hollow out our military. Those are pretty strong words. So, I 
look forward to the assessment of our witnesses today and what 
impact that second stage sequestration would have on your work 
and on the important missions that you are being asked to 
execute.
    Additionally, these fiscal realities are important to talk 
about in the context of which programs you think are the 
highest priorities and which processes can be made more 
effective, more cost-effective, in particular, to meet our 
national security objectives. So, it is what would the impact 
be, but also should we have additional reductions as is current 
law? What would you do to prioritize?
    So, these are all important topics, and, again, we look 
forward to having you provide us this information to help us 
fill in some of the blanks and be able to talk about what I 
think is fair to say is one, if not the most important, 
national security concern that we face as a country.
    Thank you, Madam Chair.
    Senator Hagan. Thank you, Senator Portman.
    Secretary Sheehan, if you want to give your opening 
remarks, please.

 STATEMENT OF HON. MICHAEL H. SHEEHAN, ASSISTANT SECRETARY OF 
     DEFENSE FOR SPECIAL OPERATIONS/LOW-INTENSITY CONFLICT

    Mr. Sheehan. Thank you. Good afternoon, Chairman Hagan, 
Senator Portman, and members of the subcommittee. Thank you for 
the invitation to testify this afternoon. As you mentioned, it 
is my first opportunity as Assistant Secretary of Defense for 
SO/LIC to appear before this committee.
    Let me thank you for your support, your meaningful and 
consistent support, to SO/LIC and to U.S. Special Operations 
Command (SOCOM) over the years past.
    Recently, as you mentioned, the President has provided 
clear direction to DOD, including SO/LIC and SOCOM in the form 
of the National Strategy for Counterterrorism and the Strategy 
to Combat TOC, both of which frame the DOD role in defending 
our citizens and interests from these threats. As ASD SO/LIC, I 
am committed to leading and integrating DOD efforts to fully 
implement these two complementary and mutually reinforcing 
strategies.
    Because terrorism, drug trafficking, and other forms of TOC 
are increasingly intertwined, SO/LIC is uniquely positioned to 
provide policy guidance and program oversight to DOD's CT and 
counter TOC activities.
    I am pleased to have sitting beside me two of my deputies. 
On my right is Garry Reid; on my left is William Wechsler. Both 
of them bring unique perspective and considerable experience to 
these issues. They look forward to contributing to the 
discussion during the question and answer period.
    Our perspective within SO/LIC is that by integrating CT, 
counternarcotics, and combatting TOC capabilities, resources, 
and authorities, the impact of our actions are more strategic, 
more effective, and make better use of available resources.
    Let me first provide you some of my perspectives on the 
National Strategy to Combat TOC. As we look ahead to the next 
decade, the landscape is changing to some extent. We have ended 
our combat role in Iraq. In Afghanistan, we are transitioning 
increasingly the responsibility for security to the Afghanistan 
Government and their security forces. What will not change, 
however, is our focus on aggressively deterring, disrupting, 
dismantling, and defeating al Qaeda and its associated forces 
and adherents around the world, while maintaining vigilance 
against other terrorist organizations that have threatened--
that threaten or have potential to threaten the United States 
and our allies. But our focus will remain on al Qaeda, as you 
mentioned, Senator Portman.
    Our national and theater Special Operations Forces (SOF) 
employ a combination of direct and indirect action to implement 
the strategy. While SOF's direct action capabilities are likely 
to garner the most attention--these are strikes against 
terrorist attacks--just as important, and perhaps more so in 
the future, are the SOF's effort to build the capability and 
capacity of our partners to shape the global information and 
ideas environment, as well as to train and equip the capacity 
of other countries. In this regard, section 1208 and other 
priorities--other authorities are very important to our 
success. Those include CT, counternarcotics authorities of 
sections 1004, 1033, 1021, and 1022 of the NDAA. These efforts 
often remain largely unnoticed, but have long-term strategic 
effects in CT as well.
    In implementing the CT strategy, we will continue to focus 
on al Qaeda's activity originating from western Pakistan and 
the Federally Administered Tribal Areas (FATA). We have made 
great progress on this front, but al Qaeda is a highly adaptive 
organization. We must continue to work with Pakistan and 
address the threats emanating from this region.
    Another important front against al Qaeda is on the Arabian 
Peninsula (AQAP) which poses a direct threat to our interests 
and interests of our partners. We have made numerous important 
gains over the last year against AQAP, but the group's 
capabilities and intent to conduct a terrorist attack in the 
United States continue to represent a serious threat. DOD 
continues to collaborate extensively with the Yemeni forces on 
operational matters, and together we are closely monitoring 
AQAP and regularly improving our understanding of its external 
plots.
    The last area of the CT that I would like to highlight for 
you today pertains to the global information environment. As I 
alluded to previously, we know that al Qaeda cannot be defeated 
by kinetic action alone. In order to counter the residents of 
al Qaeda's ideology, our approach must include a balance of 
capabilities implemented in close coordination with 
interagency, our allies, and local communities.
    Recognizing the growing relationship among terrorists, 
insurgents, drug traffickers, and other criminals, last year 
the President issued his Strategy to Combat TOC. This forward-
looking strategy seeks to address emerging, rapidly-evolving 
types of threats to our national security: networks of 
adversaries that operate at the nexus of organized crime in the 
politically-inspired violence, the convergence of crime, 
terrorism, and insurgency, in my view, a burgeoning 
geopolitical trend with great implications to our national 
security. The Strategy to Combat TOC recognizes that our 
traditional focus on countering drug trafficking organizations 
must be expanded to a wider perspective that acknowledges that 
narcotics trafficking is just one component of the broader 
challenge of TOC.
    Important initial steps in implementing this strategy have 
been recognized in a growing array of security challenges, 
global criminal networks pose, increasing the understanding of 
the implications of the nexus among criminals, terrorists, and 
insurgents developing policies and tools to degrade these 
threats.
    DOD plays a largely supporting role to U.S. interagency 
efforts to combat TOC. In addition to DOD's support to State, 
local, and Federal law enforcement agencies, DOD is helping 
partner-countries build capacity to address narcotics 
trafficking and related TOC within their borders. Critical to 
these efforts are DOD's counternarcotics authorities and 
budget, which have proven to be effective and flexible tools 
for confronting drug trafficking, including where drug 
trafficking is linked to other forms of organized crime.
    Nowhere is the link between TOC, insurgency, and terrorism 
more apparent than in Afghanistan, where the Taliban continues 
to receive a large percent of its revenue through the heroin 
trade. Because of the convergence of these threats, our law 
enforcement partners, such as the Drug Enforcement 
Administration (DEA), are employing their expertise and 
authorities in support of DOD objectives on the battlefield.
    In addition to depriving the enemy of vital narcotics-
related revenue, insurgents found to be involved in drug 
trafficking may be prosecuted under Afghan law and 
incarcerated, taking them off the battlefield and enhancing 
government institutions at the same time.
    We know that in order to confront increasing network 
threats, we need to be increasingly networked as a government. 
Active threat networks will exploit the limitations the U.S. 
Government often faces because of separate agency authorities, 
budgets, and institutional cultures. The strategy to combat TOC 
is a call to action to leverage all the elements of national 
power to protect citizens and U.S. national security interests, 
and to enable our foreign partners to do the same.
    In conclusion, both of these strategies seek to proactively 
deter and confront emerging threats for national security 
whether they are terrorists or criminals or increasingly 
individuals at the nexus of what our too often conceptual 
stovepipes. To be effective on both fronts, we must continue to 
build cooperation across DOD and the U.S. Government, while at 
the same time developing the capacities of like-minded foreign 
partners. As the Assistant Secretary of Defense for SO/LIC, I 
am committed to working with this committee to continue to 
build our CT and combatting TOC capabilities so that we are 
more effective in the decade ahead.
    Thank you again. I look forward to the opportunity for a 
frank dialogue and Q&A period.
    [The prepared statement of Mr. Sheehan follows:]

             Prepared Statement by Hon. Michael A. Sheehan

    Good afternoon, Chairman Hagan, Senator Portman, and members of the 
committee. Thank you for the invitation to testify before you this 
afternoon. As this is my first opportunity as Assistant Secretary of 
Defense for Special Operations/Low-Intensity Conflict (SO/LIC) to 
appear before the subcommittee, let me express my gratitude for the 
consistent and meaningful support you provide to SO/LIC and U.S. 
Special Operations Command (SOCOM). I have worked in and around the 
Special Operations Forces (SOF) community for the last 32 years, and I 
have a deep appreciation of the progress that has been made in the past 
decades--in no small part due to the support of Congress and this 
committee. I believe a critical turning point came when Congress 
created SO/LIC and SOCOM through the Goldwater-Nichols legislation and 
the Nunn-Cohen Amendment over a quarter century ago.
    These pivotal pieces of legislation are the foundation of the 
important work that SOF has done since September 11, from toppling the 
Taliban regime to capturing Saddam Hussein to killing Osama bin Laden. 
With these recent successes, some have made the argument that SOF has 
now arrived into the ``mainstream'' within the Department. While I 
agree that progress has been made in institutionalizing Goldwater-
Nichols, this effort remains a work in progress, especially as we look 
to the coming decade of sustained global demand for SOF and constrained 
defense budgets.
    In recent months, the President has provided clear direction to the 
Department of Defense (DOD)--including SO/LIC and SOCOM--in the form of 
the National Strategy for Counterterrorism (CT) and the Strategy to 
Combat Transnational Organized Crime (TOC), both of which frame DOD's 
role in defending our citizens and interests from these threats. As 
Assistant Secretary of Defense for SO/LIC, I am committed to leading 
and integrating DOD's efforts to fully implement these two 
complimentary and mutually reinforcing strategies.
    To this end, the partnership between SO/LIC and SOCOM will be 
essential. SO/LIC will continue to support the evolution of SOCOM as we 
take on both the challenges of these strategies and the recently 
released defense strategy ``Sustaining U.S. Global Leadership: 
Priorities for the 21st Century''. Together, we will work to make 
efficient use of our resources and authorities to address these cross-
cutting security threats. We will also be looking at developing and 
testing new approaches to meeting these evolving threats.
    Because terrorism, drug trafficking, and other forms of 
transnational organized crime are increasingly intertwined, SO/LIC is 
uniquely positioned to provide policy guidance and program oversight to 
DOD's CT and counter-TOC activities. I am pleased to have sitting 
beside me two of my deputies--Deputy Assistant Secretaries of Defense 
Garry Reid and William Wechsler--who each bring a unique perspective to 
these issues. They look forward to contributing to the discussion 
during the question and answer portion of the testimony. Both of their 
offices bring extraordinary expertise to the Department's efforts to 
implement the CT and Combating TOC strategies. By integrating our CT, 
counternarcotics, and combating transnational organized crime 
capabilities, resources, and authorities, the impact of our actions are 
more strategic, more effective, and make better use of available 
resources.
    Let me first provide you with my perspective on the National 
Strategy for Counterterrorism. As this committee is well aware, we have 
made progress in the past decade since the tragedy of September 11 in 
confronting al Qaeda, its associated forces, and its adherents. I see 
three primary reasons for our success in preventing another terrorist 
attack on U.S. soil. First, we have taken down the al Qaeda sanctuary 
in Afghanistan. Second, we have maintained constant pressure on the al 
Qaeda network around the globe, including in Pakistan's Federally 
Administered Tribal Areas, crushing the ability of al Qaeda to conduct 
strategic attacks. Lastly, we have built broad international 
cooperation by developing strong counterterrorism partnerships with 
countries around the globe.
    Now, as we look to the decade ahead, the landscape is changing to 
some extent. We have ended our combat role in Iraq, and in Afghanistan 
we are transitioning increasing responsibility to the Afghan Government 
and security forces. What will not change is our focus on aggressively 
deterring, disrupting, dismantling, and defeating al Qaeda and its 
associated forces and adherents around the world, while maintaining 
vigilance against other terrorist organizations that threaten or have 
the potential to threaten the United States and our allies. These 
efforts will be guided by the principles set forth in the National 
Strategy for Counterterrorism adhering to U.S. core values, building 
security partnerships, applying CT tools and capabilities 
appropriately, and building a culture of resilience.
    Our national and theater SOF employ a combination of direct and 
indirect action to implement the strategy. While SOF's direct action 
capabilities are likely to garner the most attention, just as 
important--perhaps more so--are the SOF efforts to build the capacity 
and capabilities of our partners and to shape the global information 
and ideas environment. In addition to ``Global Train and Equip'' 
capacity building efforts often referred to as ``section 1206,'' other 
SO/LIC-managed authorities are also critical to our efforts. These 
include the counternarcotics authorities of sections 1004, 1033, 1021, 
and 1022 of the National Defense Authorization Act, which in addition 
to traditional counter-drug support, also allow the Department to 
enhance the capabilities of the security forces of our foreign partners 
where there is a link between drug trafficking and terrorism. These 
efforts often remain largely unnoticed, but have long-term, strategic 
effects in CT.
    In implementing the Counterterrorism Strategy, we will continue to 
focus on al Qaeda's activities originating from Western Pakistan and 
the FATA. As I noted earlier, we have made progress on this front, but 
al Qaeda is a highly adaptive organization, and we must continue to 
work with Pakistan to address threats emanating from this region.
    Another important front against al Qaeda is in the Arabian 
Peninsula (AQAP). Our challenge in this region is twofold. First, AQAP 
poses a direct threat to our interests and the interests of our 
partners. We've made a number of important gains over the past last 
year against AQAP, but the group's capabilities and intent to conduct a 
terrorist attack in the United States continue to represent a serious 
threat. DOD continues to collaborate extensively with Yemeni forces on 
operational matters, and together we are closely monitoring AQAP and 
regularly improving our understanding of its external attack plots. 
Efforts to counter AQAP's narrative have also helped delegitimize the 
group and discourage its efforts to recruit new operatives. Second, a 
large quantity of financial support from individuals and charities flow 
from the region to al Qaeda and its associated forces and adherents 
around the world. Addressing both of these threats requires partnership 
with Saudi Arabia, the United Arab Emirates, Bahrain, Yemen, Kuwait, 
and others, to ensure that they have both the capabilities and the will 
to effectively confront these challenges.
    The last area of the Counterterrorism Strategy that I would like to 
highlight for you today pertains to the global information environment. 
As I alluded to previously, we know that al Qaeda cannot be defeated 
with kinetic action alone. In order to counter the resonance of al 
Qaeda's ideology, our approach must include a balance of capabilities, 
implemented in close coordination with the interagency, our allies, and 
local communities.
    Recognizing the growing relationship among terrorists, insurgents, 
drug traffickers, and other criminals, last year the President issued 
his Strategy to Combat TOC. This forward-looking strategy seeks to 
address an emerging, rapidly evolving type of threat to our national 
security: networks of adversaries that operate at the nexus of 
organized crime and politically-inspired violence. The convergence of 
crime, terrorism, and insurgency is, in my view, a burgeoning geo-
political trend with grave implications. As the Director of National 
Intelligence, James Clapper, recently observed, ``Terrorists and 
insurgents will increasingly turn to crime and criminal networks for 
funding and logistics, in part because of U.S. and western success in 
attacking other sources of their funding. Criminal connections and 
activities of both Hizballah and AQIM illustrate this trend.''
    The Strategy to Combat TOC recognizes that our traditional focus on 
countering ``drug trafficking organizations'' must be expanded to a 
wider perspective that acknowledges that narcotics trafficking is just 
one component of the broader challenge of TOC. Important initial steps 
in implementing this strategy have been recognizing the growing array 
of security challenges global criminal networks pose, increasing the 
understanding of the implications of the nexus among criminals, 
terrorists, and insurgents, and developing effective policy tools to 
degrade these threats, to include the ability to track and target the 
funds that allow these threats to carry out their activities.
    The Department plays a largely supporting role to U.S. interagency 
efforts to combat TOC. In addition to DOD support to U.S. State, local, 
and Federal law enforcement agencies, DOD is helping partner countries 
build capacity to address narcotics trafficking and related TOC within 
their borders. Critical to these efforts are the Department's 
counternarcotics authorities and budget, which have proven to be 
effective and flexible tools for confronting drug trafficking, 
including where drug trafficking is linked to other forms of organized 
crime.
    Nowhere is the link between TOC, insurgency, and terrorism more 
apparent than in Afghanistan, where the Taliban continues to receive a 
large percentage of its revenue through the heroin trade. Because of 
the convergence of these threats, our law enforcement partners such as 
the Drug Enforcement Administration are employing their expertise and 
authorities in support of DOD objectives on the battlefield. Today we 
are seeing unprecedented integration of military and law enforcement 
operations. In addition to depriving the enemy of vital narcotics-
related revenue, insurgents found to be involved in drug trafficking 
may be prosecuted under Afghan law and incarcerated for over 10 years, 
taking them off the battlefield and enhancing Afghan Government 
institutions at the same time.
    Because the threat networks we face are not limited to a single 
illicit activity, we must continue to draw upon all elements of our 
national power to confront them. The best example of what can be 
achieved through a comprehensive approach of law enforcement, military, 
and diplomatic support has been in Colombia, where I served as an 
active duty Special Forces officer. Once on the verge of becoming a 
narco-state in the 1990s, Colombia today has made substantial progress 
in improving its security and continues to make progress against the 
Revolutionary Armed Forces of Colombia (FARC) and other criminal 
groups. Colombia is now an exporter of security in the region, 
supporting other nations' efforts to confront transnational organized 
crime. This success is due in great part to ``Plan Colombia,'' 
Colombia's comprehensive plan for combating drug trafficking and its 
detrimental effects on Colombian society. The principal credit of the 
success of Plan Colombia belongs to the Colombian people themselves who 
stood up to the criminality of terrorist organizations corrupted by the 
illicit drug trade.
    Another important factor in Colombia's success was a fundamental 
shift in our understanding that the FARC was not simply a political 
insurgency, but rather a criminal enterprise. Over time, that 
fundamental change in perspective became the bedrock for facilitating a 
cohesive, integrated, multi-agency approach to supporting Bogota's 
efforts to degrade and defeat the FARC. By conceptualizing the threat 
differently, we were able to create new lines of engagement and attack, 
which led to strategic success against a group that posed an 
existential threat to the Colombian state. Underpinning that success 
was the support of Congress for a sustained strategy that could evolve 
and integrate authorities from many agencies into one strategic effort. 
There may be opportunities to take a similar approach against other 
adversaries of significant national security concern that are both 
terrorist and criminal in nature. As we identify these opportunities, 
we will be working with you and our colleagues across the interagency.
    From the Colombia experience, we know that in order to confront 
increasingly networked threats, we need to be increasingly networked as 
a government. Active threat networks will exploit the limitations the 
U.S. Government often faces because of separate agency authorities, 
budgets, and institutional cultures. The National Strategy to Combat 
TOC is a call to action to leverage all the elements of national power 
to protect citizens and U.S. national security interests and to enable 
our foreign partners to do the same.
    In conclusion, both of these strategies seek to proactively deter 
and confront emerging threats to our national security, whether they 
are terrorists or criminals or, increasingly, individuals operating at 
the nexus of what are too often conceptual stovepipes. To be effective 
on both fronts, we must continue to build cooperation across DOD and 
the U.S. Government, while at the same time developing the capacities 
of like-minded foreign partners. As Assistant Secretary of Defense SO/
LIC, I am committed to working with this committee to continue to build 
our CT and combating TOC capabilities so that we are even more 
effective in the decade ahead. Thank you again for this opportunity, 
and I look forward to a frank dialogue during the question and answer 
session.

    Senator Hagan. Thank you, Secretary Sheehan. I understand 
that, Mr. Reid and Mr. Wechsler, you all have some short 
opening statements.
    Mr. Reid. Actually I do not. I can.
    Senator Hagan. Feel free to take a few minutes for an 
opening statement.

STATEMENT OF GARRY REID, DEPUTY ASSISTANT SECRETARY OF DEFENSE 
         FOR SPECIAL OPERATIONS AND COMBATING TERRORISM

    Mr. Reid. Thank you very much, Madam Chair, and Senator 
Portman, for the opportunity to come back and talk to you again 
today. It has been just about a year since I came over with the 
other colleagues in the gap between Assistant Secretaries. So, 
it is good to be back here again. We work closely with your 
staff regularly and appreciate the support and interaction.
    We feel, as has been highlighted, that as much has been 
done in many years of war at great cost, that significant 
progress is being made in the CT and special operations area. 
As you highlighted, Madam Chair, with the release of a new 
strategy and the process going forward, we are currently 
looking at how we bridge from past, present, into future, how 
that affects our SOFs and our CT authorities, resources, and 
everything you highlighted.
    So, I look forward to the opportunity to focus in on your 
specific questions in these areas and those portions of the 
portfolio that I support for the Assistant Secretary.
    Thank you.
    Senator Hagan. Mr. Wechsler.

STATEMENT OF WILLIAM F. WECHSLER, DEPUTY ASSISTANT SECRETARY OF 
        DEFENSE FOR COUNTERNARCOTICS AND GLOBAL THREATS

    Mr. Wechsler. Thank you also for having me back, and I want 
to compliment you on the topic of this hearing that combines 
these issues, as Assistant Secretary Sheehan said, which too 
often are viewed separately.
    If I might just in a very brief opening statement point out 
four different trends that we see that are included in both 
strategies. First, terrorist groups are adopting criminal 
techniques to fundraise, for logistics, for movements. This we 
see accelerating. This is something that Director of National 
Intelligence Clapper talked about in his threat briefing to the 
committee.
    Second, criminal organizations are adopting terrorist 
techniques. The criminal organizations in Mexico did not invent 
the idea of beheading people and putting the videos up on You 
Tube. They saw others do that, but then they adapted it for 
their own needs, and that is a different dynamic that we are 
seeing.
    The third dynamic is terrorist organizations and criminal 
organization that heretofore have been separate are working 
together in ways that we had not seen previously. Nothing 
illustrates this more than the attempted assassination of the 
Kingdom of Saudi Arabia's Ambassador here in the United States 
by the Qods Force trying to use the Mexican Zetas cartel.
    Then the fourth trend that I might suggest is a little 
different than the first three, which is states, as we used to 
think of states, as we still think of states as being sponsors 
of terror, there are also states that are sponsors of crime, 
that use criminal activity as a tool of the state, as a revenue 
producer of the state. That is a dynamic that we are watching 
very closely and trying to work against.
    So, with that, I am very happy to take your questions.
    Senator Hagan. Thank you. Thanks to all of you for being 
here. Right now, what I think we ought to do, Senator Portman, 
is take turns and not limit ourselves to a specific number of 
minutes. Then obviously if other Senators come in, we can 
adjust that.
    We also have a vote at 3:30 p.m. that has been announced, 
so I think we are clear to continue here until 3:40 p.m.
    We obviously are talking about the President's new 
strategies that are articulating the threat and then the tools 
to combat the threats from terrorism and TCOs. But there is 
little in the strategies that lays out the roles and missions 
of DOD.
    So, Secretary Sheehan, can you discuss the roles and the 
missions of DOD in implementing these two strategies and speak 
to the situations where you think DOD will be a supported 
organization versus where it will be supporting another 
organization?
    Mr. Sheehan. Thank you, Madam Chair. Actually, as you are 
well aware, in all our national security challenges moving 
forward, they are becoming increasingly interagency. DOD works 
very closely with the Department of State (DOS), the Central 
Intelligence Agency, and other organizations in an integrated 
manner. But obviously in a CT aspect, DOD has a major lead role 
in that.
    I like to think about it, and I know that SOCOM does, in 
two general areas: direct action and indirect action, or the 
strike operations and the advise and assist. We play--and 
obviously in the special operations community, what I am 
primarily responsible for has a major role in both of those 
areas of operation.
    The kinetic action has primarily focused in Afghanistan and 
Pakistan, and increasingly in the Horn of Africa, as well as 
once in a while in Yemen, in those three areas. So, the primary 
interest for me for al Qaeda has always been Pakistan, has been 
for 15 years actually. Even when al Qaeda was in Afghanistan 
prior to September 11, they moved through Pakistan. So, that 
remains the number one area, the launch point for strategy 
attack from al Qaeda.
    But increasingly, I have been concerned about Yemen. By the 
way, that is not new either as I was the Ambassador for 
Counterterrorism when the USS Cole was hit in 2000, and that 
came from Yemen as well. So, Yemen has always been a breeding 
ground for al Qaeda going back to the 1990s. But increasingly, 
it is shifting west into Africa, into Somalia, and across 
Africa. So, we need a combination strategy--in DOD, both the 
kinetic action to take out leaders when we see them, and then 
we need another strategy to advise and assist countries so that 
they can do the work. So, those are two of the major 
components.
    At the center of both of those is the fusion of 
intelligence operations and combat operations, and which since 
I have come back into government, I have seen this 
extraordinary improvement in those capabilities within the 
special operations community to get intelligence from all 
sources, fuse those together with analysis, and then translate 
that into action on the battlefield, which is really the 
capacity of our special operation community to do that has been 
so greatly developed.
    I think that is really the heart of the strategy, Madam 
Chair, is those components of direct action of hitting the 
terrorists with kinetic strikes, training/advising others to do 
work in their country, and then the combination of the 
intelligence and the operation. That is really the heart of the 
operational aspects of attacking al Qaeda. Now, obviously there 
are other parts of it in terms of information operations, 
fighting the growth of terrorist organization, and the 
recruitment of terrorist organizations. All those are 
important. But at the heart of it are those other parts of it.
    In terms of organized crime, DOD plays a supporting role 
there to our law enforcement partners primarily, but we can 
bring tremendous capacity to the table, integrating with those 
organizations to bring pressure against organized crime, 
narcotics traffickers, both at the tactical level in 
Afghanistan, and at the strategic level where these 
organizations are operating.
    I am going to leave it at that and allow my deputies to 
fill in.
    Senator Hagan. When you were talking just then, how does 
DOD's role in combating the TOC actually work in concert with 
the DOS and for roles and missions? Mr. Reid or Mr. Wechsler 
feel free to join in.
    Mr. Sheehan. Madam Chair, I was the Ambassador to 
Counterterrorism at DOS, and for me it was all about leveraging 
the national will of our partners and the diplomatic action to 
do that. So, what we would do in the defense and the 
Intelligence Community is try to find out--to outline the 
trends, to find where these funds were flowing from to be as 
specific as we can. Then the job of DOS was to help to bring 
the political pressure to bear on countries that take 
appropriate action. A lot of these funds are flowing through 
banks and other areas, and the action taken by host countries, 
quite frankly, has not either been effective or willing enough 
to put the pressure on those.
    So, it is a combination of law enforcement, which helps 
identify, bring the law enforcement tools, DOD brings its 
different capacities to bear, and the DOS is about the 
diplomatic pressure. All together hopefully you will have a 
strategy that dries up some of these flows of funding.
    Senator Hagan. This will be my last question, and then we 
will go to Senator Portman. But let me ask about specifically 
Yemen and East Africa. In last year's defense authorization 
bill, it included the two authorities permitting DOD to expand 
its capacity building activities in East Africa and Yemen. It 
permitted DOD to spend up to $150 million to provide equipment, 
training, supplies, minor military construction, and we are 
talking about the countries Ethiopia, Djibouti, Kenya, and any 
nation that would contribute to the African Union mission in 
Somalia, as well as Yemen's Ministry of Interior (MOI) 
counterterrorism unit (CTU).
    If you could explain to me whether DOD intends to use these 
authorities, and particularly the minor military construction 
authority and the authority to support militaries deploying to 
Somalia. If you could expand on that issue.
    Mr. Sheehan. Yes, Madam Chair. We do intend to use those 
authorities in those areas. Obviously, in Yemen we had a little 
difficulty in delays in that because of the political strife 
that was there. But we do want to move forward in both of those 
areas with those authorities. Let me turn to Garry Reid who may 
give you some of the details on that.
    Mr. Reid. We appreciate very much the authority granted 
here. I would offer just an example on the construction. As you 
may recall, before the political crisis in Yemen, we had 
reached a point where they were looking to expand the 
capability of their CTU. Again, this is a MOI CTU for which 
Congress provided us the authority to work with in this current 
year legislation. We were not able to do that last year.
    But the CTU expansion is a good example because here is an 
organization that is probably the most capable in terms of CT, 
but it is really designed to operate in Sana'a. They had put 
forth a proposal prior to the political crisis to expand CTU 
out into some of these provincial areas, which we thought was a 
good idea. Part of getting that done requires us to create a 
little space for them to get out there and set up in a way that 
we want to be there advising them. Again, this would all be 
subject to a process, but they need to have a place to go that 
we can work with also.
    So, whether it would be something as simple as setting up a 
pistol range where you go to get a bulldozer and some plywood. 
Under most authorities, those would not be permitted for 
training. You may build something a little more elaborate than 
that, an operations center made out of plywood, something like 
that is where that minor construction becomes very important. 
It gives us a place to operate from. It gives us a place to go 
with them, and it sets the seeds for them to build further 
under their own system, kind of paints the picture for them, so 
to speak.
    I think that is the best example of that.
    Senator Hagan. The actual extension of the fact that this 
expires soon.
    Mr. Reid. Working on it right now in terms of both of the 
Yemen MOI and the East Africa, working with U.S. Central 
Command (CENTCOM) and U.S. Africa Command on their side to pull 
these proposals together and get them coordinated in both 
departments. Again, this is Secretary of Defense, Secretary of 
State, sort of dual key. Work that up and then go through the 
notification process to Congress, and we are optimistic and 
confident we are going to make full use of these authorities.
    Senator Hagan. Thank you.
    Senator Portman.
    Senator Portman. Thank you, Madam Chair.
    I want to talk about Iran. Secretary Sheehan, thank you for 
joining us. It is good to have you here. These guys did a great 
job without you last year, but they were all waiting for you.
    Last year, the Treasury Department designated a number of 
high-ranking members of al Qaeda who operated a facilitation 
network from inside Iran, and this is the press release 
announcing the designation. This is from David Cohen, who was 
the Under Secretary of Treasury. ``Iran is the leading state 
sponsor of terrorism in the world today. By exposing Iran's 
secret deal with al Qaeda, allowing it to funnel funds and 
operatives throughout its territory, we are illuminating yet 
another aspect of Iran's unmatched support for terrorism.''
    So, it is frightening that combination of al Qaeda and 
Iran. A Shia country to have a Sunni terrorist group might not 
seem logical, but it is obviously in existence.
    So, my question, with Iran's long history of terrorist 
organizations, like Hezbollah and Hamas, to be able to project 
their influence around the region, what do you think about this 
al Qaeda relationship, especially when you combine it with the 
allegations of Iranian ties to planned or actual terrorist 
attacks against our allies? Earlier, the apparent planned 
attack here in DC was mentioned, but we certainly have seen 
this in India, Thailand, and elsewhere.
    What is your understanding of this relationship? Do you see 
it as expanding in scope? Is it important to al Qaeda's 
leadership? Do you see this as part of a growing trend of Iran 
using non-traditional alliances with terrorist organizations to 
further their anti-Western goals?
    Mr. Sheehan. Thank you, Senator. It is a very important 
question, and one that is very interesting.
    As you mentioned, it would seem illogical for a Shia state, 
like the Iranians, to harbor a Sunni terrorist organization, 
organizations that have fought each other in the past. It is 
one that perhaps I would not have predicted prior to September 
11, but it, as a fact, has happened. The depth of the Iranian 
cynicism and use of terrorism as an instrument is expanding, 
and this is a classic example.
    When they originally took the al Qaeda folks after 
September 11, I was watching it closely to see how they would 
manage them. It seems to have evolved over time. Increasingly 
there seems to be more of an alliance than just the holding of 
them. People--and also the movement of al Qaeda operatives 
through Iran is also very, very troubling.
    They seem to be using them as instruments. I am not sure I 
would call it an alliance--but certainly using them by 
harboring and then being to release them and move them around 
is something very troubling to our interests.
    The Iranians are looking at a range of instruments as they 
feel the pressure from the international community on their 
nuclear program. They are looking at a range of options that 
they might be able to use. You have seen some of their 
activities over the last few months using terrorism to try and 
intimidate the Israelis and others. I think they are probably 
looking at other options to include these operatives to find 
ways that they can continue to intimidate the international 
community so they can have space to achieve their objectives.
    It is something that we need to be very, very watchful of 
and try to build international coalitions to bring pressures 
against Iran so that they limit their options to use terrorism 
to advance their interests.
    Senator Portman. What should we be doing that we are not 
doing with regard to al Qaeda and Iran?
    Mr. Sheehan. One of the more challenging things is trying 
to get better intelligence on it. It is a difficult operating 
environment, and we will continue to work with the Intelligence 
Community on that to get a clear picture on what they are 
doing, and then try to intercept these people as they move. 
That is something we have been very good at over the last years 
is trying to track terrorists as they move around the globe and 
then intercept them. So, I think intelligence is going to be 
the key thing to bring to bear against these individuals.
    The second, as I mentioned, I think Iran is susceptible to 
international pressure. When we can bring all our European 
allies and others together and we can ratchet up pressure on 
them, whether it be sanctions or otherwise, I think that can 
also be very effective. The extent that we can paint a clear 
picture to our friends and allies about that enables us to 
bring more pressure against them. That can work. They are 
susceptible to that.
    I think it is a matter of intelligence and then political 
pressure. It is just increasing it and ratcheting it up.
    Senator Portman. Actually, this would be troubling to the 
Europeans. Is it troubling to the Russians, and is it troubling 
to the Chinese, to have al Qaeda being harbored in Iran?
    Mr. Sheehan. Senator Portman, that is a good question. The 
Russians and Chinese, I have been talking to both of those 
countries about al Qaeda since the late 1990s. They certainly 
have concerns about al Qaeda, but not at the same level we do. 
The Russians obviously had their own issues with Chechnyan 
terrorists and other Islamic terrorists, but not as directly 
with al Qaeda. So, they are not as focused on it. The same 
thing with the Chinese. They have certain concerns about 
Islamic extremism within their borders, but again, not the 
level of focus that we have on al Qaeda. It is not to say that 
they are going to support it all, but they often--you have to 
drag them a little bit along further in order to get the 
pressure to bear.
    Obviously, both of those countries have their own economic 
relationship with Iran and with the Chinese with oil and with 
the Russians with defense articles. You know that equation as 
well as I do. It is one that we just have to continue to work 
through and try to bring them on board as well, because 
ultimately at the end of the day on an issue like al Qaeda, 
they are going to support us, but not just as aggressively as 
perhaps our European allies.
    Senator Portman. Mr. Reid, the last time you were here, you 
talked some about your experience. I have a question for you 
with regard to the impact on our special forces, in particular, 
after 10 years of sustained combat operations in Iraq and 
Afghanistan. Some people have talked about the fact that there 
has been a degradation in the force, and that some of the core 
competencies, particularly in language and cultural expertise, 
have been lost by having such a focus on Iraq and Afghanistan.
    What specialties, skill sets, do you believe have been 
impacted the most? Are you concerned about it? What is being 
done to rebuild these skill sets?
    Mr. Reid. Thank you for that question, Senator. It is 
something that we are paying close attention to, as well as 
SOCOM, which has taken some steps in these areas, and we have 
worked together on that.
    With regards to language and culture, we established within 
DOD a steering committee for language and culture expertise. We 
used the proficiency standards coming out of Afghanistan for 
basic counterinsurgency, language, level of understanding, 
level of proficiencies from basic solider up through squad 
leader, platoon leader, company commander, as well as the 
cultural training piece. We took that and worked through the 
Office of the Secretary of Defense and the Joint Staff to have 
the Secretary establish Service-wide, DOD-wide standards.
    SOCOM took that piece and has created language programs 
within each of the component commands. Marine Corps Special 
Forces Operations Command, U.S. Army Special Operations 
Command, Naval Special Warfare Command all have their own 
language programs. All of this is an effort to get ahead of 
this problem that we talked about a year ago. As you probably 
are aware, Senator, because of the tempo of activity in the 
CENTCOM AOR, we still have around 80 percent of all deployed 
SOF in CENTCOM. That has led us to over the years using our 7th 
Special Forces Group, which oriented on South America, 3rd 
Group oriented on Africa, 10th Group in Europe, and 1st Group 
in the Pacific. All of them have been supporting operations in 
Iraq and Afghanistan.
    About 2 years ago we tried to reset that as much as 
possible. You still are going to have some of that because of 
the demand in the theater, but we are into a better rhythm now 
of getting those regional forces exposure and interaction 
through things like the Joint Special Operations Command (JSOC) 
program and others. So, in between deployments, they are 
getting some of that exposure back in their region.
    We have done some realignment using the National Guard, 
19th and 20th groups, to get them to cover some of these things 
as well. So, we feel like we are at a point where we are 
building it back up.
    At the same time, although the demands are still quite 
heavy in Afghanistan, we are also realizing the growth of the 
2006 Quadrennial Defense Review (QDR) of adding the additional 
battalions worth of teams to each of the groups. That has 
created an additional depth within the groups, again, to help 
start alleviating the back-to-back deployments to Afghanistan 
phenomenon that was creating this gap in expertise in the other 
regions.
    With respect to the skills, again, largely through things 
like the JSOC program, we get all the operators exposed to 
different skill sets that they may not be using in Afghanistan. 
But I would also say that the situation in Afghanistan is such 
that we are working, for instance, with the Afghanistan local 
police. That for us, is really an unconventional warfare 
technique set that we are using to work with local forces and 
create these local security organizations. It is something you 
would see more in a unconventional warfare setting. Obviously 
in Afghanistan, it is in a foreign internal defense setting. 
But we are using those skills. We are using the CT skills. We 
are using the direct action skills. We are using the foreign 
internal defense skills.
    So, by and large, the majority of those are being hit in 
some measure by most of the operators.
    Senator Portman. That is good. I have a question for Mr. 
Wechsler on Mexico after we have a chance for another round. 
But just one quick question. It is really the most important 
question I think that I have today having just heard what Mr. 
Reid said about the reset and about special operations, in 
particular, and the need for broadening some of these skill 
sets after this focus. This all requires funding, and it all 
requires resources that are being constrained by the first step 
of the BCA.
    Then, as I mentioned in my opening statement, we now have 
the second $490 billion sequestration. If you could just 
briefly describe to the committee, and I know that the chair is 
interested in this as well, what impact do you anticipate the 
$490 billion, the sequestration, to have on your programs, the 
ones under your purview we have just been talking about, and 
the ones you indicate the more resources are in certain areas, 
and what impact does the uncertainty of waiting until sometime 
later this year--maybe it is late fall, maybe it is the end of 
the year--with regard to the programs and activities that you 
oversee?
    I am going to come back to Mr. Wechsler later if I have 
time on Mexico. I would like to talk to you about this.
    Mr. Sheehan. Senator, it is difficult to answer because the 
Secretary of Defense has already been very clear about how 
devastating it would be. Within DOD, we have not yet decided 
how we would respond to that sequestration. But regardless to 
say, with that large of amount of money, it would certainly 
spill into the special operations community, and I think it 
would have a major impact on our ability to conduct the type of 
operations around the world that we are doing now.
    In both areas that I mentioned before, both in the direct 
action, the kinetic strikes against al Qaeda could be 
effective, although I think those would be protected pretty 
much. But our ability then to build the coalitions and the 
types of partnerships that we need around the world, that had 
to be an impact for sure.
    Senator Portman. As they are developing the fiscal year 
2014 budget, are they already coming to you and talking about 
what sequestration would mean for you, and are you giving them 
some analysis?
    Mr. Sheehan. Not yet, Senator. We have not been asked to do 
that yet within DOD. But we are aware it is out there. We are 
aware it is the law. So, that planning will come if we are not 
able to get it resolved.
    Senator Hagan. Thank you.
    Senator Inhofe, as a member of the Senate Armed Services 
Committee, we welcome you to this subcommittee hearing, and you 
are up.
    Senator Inhofe. Thank you. I wanted to come by this 
subcommittee because I know we have a lot of interest here. Of 
course, Mr. Reid is as familiar as anyone with the Lords 
Resistance Army (LRA) and what is going on.
    Unfortunately, there is a misunderstanding when we first 
put the language in, and a lot of people thought it was 
something where we were taking on another Libya or that kind of 
situation. I think it is very important for all of us on the 
committee, as well as you folks, to make sure people 
understand. It was specifically structured so that there would 
not be combat activity, and it is the type of thing we have 
talked about. I have been involved with this for 15 years.
    I guess the first question I would ask is, is it reasonable 
for people to classify this in that it only started in Northern 
Uganda. That is where it was when I first ran into it. Then, of 
course, more recently meeting with the new country of South 
Sudan, and then all the way down to the Central African 
Republic, and even touching on Rwanda and Eastern Congo. It has 
spread to the point where it could be considered to be a 
terrorist organization by the United States. I would say if you 
would agree that it would fall into that category.
    Mr. Reid. With the LRA, Senator?
    Senator Inhofe. Yes, the LRA.
    Mr. Reid. As I am sure you know, Senator, for those that do 
not, Joseph Kony himself has been present on terrorist 
exclusion list for some time in our Government, and we use that 
in part as a basis for some of our resourcing for the counter 
LRA mission.
    The organization itself certainly operates with the tactic 
of terrorism from, I guess, a bit of an academic perspective, 
whether what they seek to accomplish with that could be 
debated. But we certainly in the context of approaching them as 
an adversary and our advice and assistance to the Ugandan 
People's Defense Forces (UPDF) and others is exactly the 
approach that we have applied to terrorist organizations, and 
that is they have to make a comprehensive effort not only to go 
after senior leaders, they have to understand the supporting 
networks that allow them to operate, and they have to focus on 
the local populations to prevent, when they do clearing 
operations that group from coming back in there.
    So, from all those points of view and my business in the CT 
world, they certainly be treated in that fashion as a defeat 
and countering strategy.
    Senator Inhofe. Yes. I have often looked at what we are 
trying to do with the LRA as kind of a 1206/1208 train-and-
equip type of thing, that we are assisting them, which I would 
say, from your view, how do you see the train-and-equip 
program?
    Mr. Reid. We are absolutely doing an advise/assist program, 
and we are providing training and equipment. DOD is not the 
only one providing training. There are international 
organizations as well that are providing equipment to the UPDF 
and others. But our role clearly in this construct is limited 
to advise and assist. Our troops are not authorized or 
empowered to make decisions that would put them in conflict 
with the LRA. In fact, the sort of rules of the road are 
advise/assist. If you have where you are asked to or you have 
an opportunity to participate in that activity, that there is 
an expectation of contact with a force at all, then you have to 
stop, and at that point there would have to be a policy 
discussion back in Washington about whether that was an 
appropriate step or not.
    We are not up against that right now. The advise and assist 
operation, since October, has progressed in a manner that was 
envisioned. We have some folks up forward, Senator, and we are 
increasing the effectiveness of these forces in their mobile 
search operations and integrating their command and control, 
improving their communications between the different nations 
that are involved. Those are all the objectives we set out to 
do, and we think we are relatively on track.
    Senator Inhofe. Yes, and I appreciate that. Really what I 
was getting at, though, is just from your perspective, the 
three of you, the train-and-equip program, the merits of that 
program. Would you have any comments to make on that?
    Mr. Sheehan. Senator, I thank you for the question. I think 
they are fundamental for our ability to do our job around the 
world. Increasingly as our missions shift away from Iraq and 
Afghanistan, these authorities are absolutely essential for us 
to conduct this classic special operations foreign internal 
defense mission, as Garry was laying out to you. So, we look 
forward to working with the committee to extend those 
authorities and continue to use them effectively.
    Senator Inhofe. The Global Security Contingency Fund, which 
is kind of our thing, would you have any comments to make on 
that?
    Mr. Sheehan. Yes, Senator. Again, we are very supportive of 
this fund. We are working very closely with DOS now to move 
forward our proposals. We see these, again, as fundamental to 
our being able to do these jobs in this new environment.
    Senator Inhofe. Okay. Mr. Reid, it has been probably about 
5 or 6 weeks. Is there anything that we need to meet on since 
that time? Any updates? Not here, obviously.
    Mr. Reid. Not here.
    Senator Inhofe. Okay.
    Mr. Reid. But, again, I would just summarize that from all 
the expectations that were built in the front end of this, I 
would characterize this as being as on track as we could have 
imagined based on the milestones and objectives we laid out.
    Senator Inhofe. Good.
    Thank you, Madam Chair.
    Senator Hagan. Thank you. What I propose that we do is 
continue going until 3:40 p.m., and then we will reconvene 
after the vote. There is a vote, Senator Inhofe, at 3:30 p.m.
    Senator Inhofe. At 3:30 p.m., yes.
    Senator Hagan. Yes.
    Secretary Wechsler, at our meeting last week, you discussed 
the success of the training efforts of the Afghan 
counternarcotics police. Can you spend a moment updating the 
committee on this program with the thought in mind of what role 
DEA has played in this program, and how has DOD supported the 
DEA's efforts? What are the lessons that we are learning or 
have learned from the Afghanistan training program that can be 
applied to other efforts around the globe?
    Mr. Wechsler. Sure. The efforts that we have done to 
integrate military and law enforcement operations in 
Afghanistan have really taken us beyond anything that we have 
previously experienced in DOD. There are a lot of lessons that 
can be taken out of the success.
    The most critical one is when we are dealing with an 
adversary that has revenue sources from criminal activity, from 
drug trafficking, in this case, in order to fund itself to meet 
us on the battlefield, the authorities and skill basis that we 
need to defeat that adversary extend beyond those that are 
contained inside DOD.
    We need to rely on our law enforcement partners on the 
authorities and the skills that they can bring to the table. In 
this case, the DEA's efforts have truly been critical to our 
integrated efforts to take down the nexus of narcotics, 
insurgency, and terrorism, especially in the south of 
Afghanistan.
    We have helped in terms of funding, in terms of logistics, 
in terms of planning, and in terms of enabling the DEA to do 
its work. What they have done, and what has been very 
effective, is building Afghan capability, as you mentioned. 
They have a variety of specialized vetted units that are very 
highly trained, that have been built over time that now number 
in the hundreds in order to do investigations, in order to do 
interdiction operations, in order to do air lift, in order to 
do legal judicial wiretaps, that are really critical.
    In fact, in many cases, these vetted units are now so 
effective that they are operating independently on their own 
without DEA support, much less DOD support. I see the reports 
of what they are doing on a weekly basis, and it is definitely 
helpful to us in our war effort and our continued efforts that 
are going to go forward in the foreseeable future to continue 
focusing on the nexus between crime and terrorism in that part 
of the world.
    Senator Hagan. Do you have any idea how much money actually 
comes into Afghanistan having to do with the narcotics trade? 
Do we keep a focus on that year in and year out?
    Mr. Wechsler. The answer is that there are many estimates 
of total amounts of money. I am not exactly sure that any of 
those estimates have a very narrow error range around them. But 
it is to say that one thing we do know for sure is that 90 plus 
percent of the world's heroin, the entire world's heroin, comes 
out of Afghanistan. The parts of Afghanistan that it comes out 
of are exactly those parts where the Taliban has influence, and 
in some cases, serious local control.
    That is not an accident. The Taliban and the narcotics 
trade are intricately related, and the efforts that we are 
making to go after--you cannot go after one without going after 
the other. That is why we built these efforts. Our estimate is 
that a majority of the funds, especially local funds that are 
what the Taliban uses, are derived from different parts of the 
drug trade.
    Senator Hagan. So, do you think over the years that we are 
having success in reducing that 90 percent that is coming out 
of Afghanistan?
    Mr. Wechsler. What our experience in Colombia has shown is 
that that is the most lagging of indicators. It is only after 
you have success taking down the networks, after you have 
success building security, that then you start to see total 
amounts of drug production go down. It is not a leading 
indicator; it is a lagging indicator.
    Senator Hagan. Thank you. After the unintentional and 
regrettable burning of the Korans in Afghanistan recently, 
there have been a number of incidents in which our U.S. 
servicemembers have been killed by individuals wearing the 
Afghan uniforms. As a matter of fact, I believe it was just 
yesterday I was heading to the Capitol, and there was a 
servicemember who was wounded. When I was chatting with him, he 
actually said that he had been shot by an Afghan military 
counterpart.
    Our SOF have to work closely with our Afghan counterparts 
obviously on a variety of operations, often far from the 
protection afforded at a larger military installation. The 
troubling reports I think even as of this morning indicate that 
an alleged member of the Afghan Local Police (ALP) opened fire 
on coalition troops yesterday, killing one.
    Can you tell me if those reports are accurate? Then do you 
have any force protection concerns for our special operation 
units as they continue to carry out these very important 
operations? Then how would these instances be addressed?
    Mr. Sheehan. Madam Chair, these reports are generally 
correct, the ones you refer to, and I think there was recent 
killing of some of our coalition partners also from Afghan 
security forces (ASF). This is an extremely troubling trend 
that seems to be growing.
    It is an issue for our SOF as well, although normally those 
forces operating with smaller units out in outposts, they get 
to know them very, very well, and perhaps it would have been 
less of a chance. But nevertheless, it is a major concern.
    The size of the ASF is so large, in many ways it represents 
Afghan society in a way. There is this frustration among some 
elements of that society that is reflected within their 
military. They have been agitated by different types of clerics 
and other extremist leaders, and they are hearing that 
language, and it is motivating them to take steps and take up 
arms against our soldiers and our coalition soldiers. So, this 
is a major concern across the force to include SOFs.
    There are numerous programs right now being administered to 
try to determine where these types of people may pop up. But 
this is very difficult because of the emotions involved, and 
because of the susceptibility of some of these members of the 
ASF to fall susceptible to the radical narrative that is being 
spread around that country.
    So, this is a major concern. Even at the strategic level it 
has an impact, these types of killings. But hopefully we will 
be able to minimize that, work our way through that, and 
continue to build partnerships with our ASF that generally is 
moving in the right direction, and is really the focus of our 
strategy moving forward. This will be a major part of it.
    During a vetting process where we feel that there is 
somebody that could possibly have an adverse reaction to the 
U.S. troops, how is that handled as far as conversations and 
communications with the Afghan National Security Forces (ANSF) 
or the police? Then what action is then taken?
    Mr. Sheehan. Obviously, Madam Chair, in the vetting of 
people coming into a unit, it is easier to throw them out, and 
that is being done increasingly, programs to try to vet new 
units. But for people that were in the force, it is much more 
difficult to do. So, I am not sure right now whether we have 
identified--been able to do that yet. I will turn to Garry. I 
am not sure that we have really been able to kick people out 
for identifying extremism.
    But when there are people identified as extremists, we work 
with the Afghans to move them out. But it is difficult.
    Senator Hagan. Mr. Reid.
    Mr. Reid. Are you specifically asking about the ALP? I 
thought you were. As you may know, that process, the nomination 
and vetting process, is driven by the tribal elders, the 
village leadership down at the lowest level possible. We think 
that is the strength of the program. All of that ends up being 
vetted and approved by the district governor as well.
    So, the very closeness that on one hand creates maybe the 
greatest vulnerability for us, it also gives us the best 
awareness of who we are dealing with.
    Senator Hagan. How about the ASF?
    Mr. Reid. Within the ASF more broadly, again, that process 
is done through the the North Atlantic Treaty Organization 
training mission in Afghanistan. I am not personally familiar 
with how that vetting and validation works.
    Senator Hagan. Are you familiar whether we have lost any 
SOF in the smaller units further away from the major 
installations?
    Mr. Reid. Yes, ma'am. With regards to the post-Koran green-
on-blue, knock on wood, we have been fortunate that no Afghan 
that we are working directly with has turned his weapon on a 
special operator. Again, we are lucky in that sense. But I 
think it is a function of the familiarity the Secretary spoke 
of.
    With respect to the incident last night in Paktika, from 
what I have seen on that, it was not that case. It was a case 
of a checkpoint. What I know about it, it seems more what I 
would call a fog of war issue. It was not a I am turning my 
weapon on you because I know you are an American SOF person and 
I am mad at you. That was not the case. Some confusion, some 
checkpoint, not quite clear. But from what I have seen so far, 
I would not put it in that green-on-blue category just yet.
    Senator Hagan. It is a tragedy whether it is a SOF or 
anybody within our military when this occurs obviously. The 
vetting process, I think, needs to be delved into a little bit 
more, especially for people who are still currently--or have 
been in the Afghan force.
    Let me ask one more question. Al Qaeda in the Lands of the 
Islamic Maghreb (AQIM) has expanded its role and influence in 
the region as a result of large ransom payments, and then an 
influx of weapons from the conflict in Libya. What ongoing 
efforts does DOD have to counter AQIM? What authorities is DOD 
leveraging to conduct these operations?
    Mr. Sheehan. Senator Hagan, this is, as I said, after 
Afghanistan and Pakistan, and in the Horn of Africa, and Yemen, 
this is right--coming up as the number three priority and 
rising for DOD and, particularly, for our office for the spread 
of AQIM in North Africa. It is very, very troubling. Again, not 
really new. It goes back into the late 1990s, but now it is 
increasing the acceleration of al Qaeda's influence there is 
very, very troubling.
    This is a very troubled part of the world, and in each 
country there are different challenges for us to operate there. 
We are working country by country to look for opportunities to 
establish the relationships there and start to build our 
coalitions to fight AQIM in North Africa.
    Again, this is an important question because we will need 
different authorities. We will need different types of programs 
in order for us to engage with the range of countries from 
Libya down through Mali, which is obviously in the middle of a 
chaos right now, to Mauritania, all the way--and, quite 
frankly, all the way over to Nigeria. So, we are talking about 
spanning across the whole continent.
    We are looking in my office particularly looking at Africa 
very closely, as is General Ham is, to look across these 
countries to figure out how we are going to address this in a 
coherent way as AQIM grows and strengthens in a very troubling 
way.
    Senator Hagan. When you say ``different authorities,'' can 
you give me an example of what you are describing, or what you 
are thinking?
    Mr. Sheehan. Yes, Senator. Most of the authorities that we 
have right now are narrowly construed to CT, and those work. I 
think, for some countries, we may need a little bit more 
flexibility to go in there. I know Admiral McRaven, the SOCOM 
Commander is thinking of some broader authorities and multi-
year funding so we can establish the relationships in some of 
these countries, and start to develop the defense relationships 
to then build upon their capacity to take on these threats.
    As you mentioned, some of these threats are pure 
terrorism--extortion groups, criminal groups, different types 
of threats. So, if we have a broader range of authorities, we 
can respond with more agility to each country with a different 
set of programs. So, I think that is the direction we are 
thinking.
    Senator Hagan. Thank you. It is now 3:40 p.m., and the vote 
has not started yet, so, Senator Portman.
    Senator Portman. Thanks, Madam Chair. I cannot come back 
after the vote.
    Senator Hagan. Okay.
    Senator Portman. So, I am going to ask my questions now.
    Senator Hagan. Okay.
    Senator Portman. First of all, when you say ``additional 
authorities,'' I assume you are not seeking statutory 
authorities? Are you talking about understandings with these 
countries that would be agreements on a bilateral basis, or are 
you looking for legislative authority?
    Mr. Sheehan. Senator, we are looking for some legislative 
authority that we will be bringing up later and discussing with 
you, I believe, in the weeks or months ahead that might be able 
to give us some broader authorities, legislative authorities, 
and multiyear funding for some of the types of activities we 
would like to do in terms of building coalitions to take on 
these complex threats.
    Senator Portman. Okay. We look forward to that, and I hope 
you will be able even now to give us some sense of what you are 
looking for, because there may not be many vehicles moving this 
year unfortunately. So, to the extent you can get us that even 
in anticipation of those specifics and before the NDAA gets put 
together, that would be helpful.
    With regard to Mexico, I mentioned, Mr. Wechsler, I wanted 
to ask you some questions about that. Obviously what President 
Calderon has done going after the cartels has come at enormous 
costs. I think over 50,000 Mexicans have now lost their lives 
since 2006, 13,000 last year alone. Of course, this impacts not 
only Mexico, but us, including American citizens.
    What is your assessment of what is going on right now in 
Mexico, the current security situation, and what threat do you 
believe these violent criminal organizations pose to the United 
States, particularly along the southern border? Are we making 
progress?
    Mr. Wechsler. Sure. President Calderon deserves a great 
deal of credit and respect for his hard first order decision to 
take the battle to these criminals. This is a change of 
longstanding Mexican history. It is a right decision that he 
made. One of the challenges is that when you make that 
decision, things tend to look bad before they get worse. In 
fact, in some cases they have to look worse because they get 
better.
    There has been a lot of progress that has been made inside 
Mexico, a lot of progress of dismantling certain organizations 
and splintering them. But with that progress has come increased 
violence in a number of places. This is a continuing challenge 
for the Mexicans, and one that they will continue to face in 
the years ahead.
    This is of critical importance, of course, to the United 
States because this is our neighbor. This is our friend. This 
is our partner. This is our third largest trading partner, as 
you are well aware. It is also important for the United States 
because unlike, say, the Colombians back in the 1980s when they 
were dominating the drug trade into Florida, the Mexican TCOs 
have a much greater presence at the wholesale and retail level 
inside the United States.
    One of the challenges that I think we face is sometimes we 
look so much at the border that we do not pay enough attention 
to some of the things that are happening inside the United 
States. This is where DOD works, but I cannot help but notice 
that just at the end of last year, the DEA did one operation in 
Chicago against a sell of the Mexican Zetas, and they captured 
$13 million in bulk cash. That is an incredible amount of bulk 
cash sitting there. These are the kinds of operations that our 
colleagues in law enforcement are doing every day and are a big 
part of how we solve this issue.
    Senator Portman. I appreciate the answer. I do think when 
you have these kinds of seizures, you are talking about the 
cashier and a 15-ton seizure of methamphetamines outside 
Guadalajara earlier this year, which it certainly sounds like a 
lot, and it is. It is equivalent to nearly half of meth 
seizures worldwide as recently as 2009.
    So, the question is, are we making progress with those kind 
of numbers? That was worth $4 billion, one seizure. I just 
wonder what it tells us about the progress we are making. 
Again, I think President Calderon has been courageous, and I 
think he is doing the rights things. How can we assist him in 
different ways to be able to make more progress? That would be 
my question, not that I am looking for an answer today. But if 
you would like to submit one for the record, that would be 
appreciated, unless you have something you would like to 
mention.
    Mr. Wechsler. Yes, sure. I cannot talk about any individual 
investigation or operation. I do want to point out that one of 
the things that we try to do is make sure that DOD is 
supporting law enforcement in the appropriate ways as we can.
    Joint Interagency Task Force West in Honolulu has built up 
significant expertise over the years in tracking containers and 
identifying suspect containers. Over the last year, we have 
focused a lot of that work on specifically methamphetamine 
related container shipments across the Pacific towards the 
Western Hemisphere. Some of the statistics that you are seeing 
are evidence of good interagency work that is being done.
    Senator Portman. Central America also tragic when you see 
what is happening there. The U.S. Southern Command commander 
recently said Central America has become the key transshipment 
zone. Ninety percent of cocaine destined for the United States, 
transits the sub region. I am told that San Pedro Sula, where I 
have been, in Honduras, is now known as the most dangerous city 
in the world, alarming increase in violence.
    So, I would ask you, Mr. Wechsler, but also Secretary 
Sheehan, what do you think the current situation is in Central 
America? What should we be doing we are not doing to help our 
allies in the region increase their capacity to confront this 
incredible spike in violence? What are the major gaps, and what 
should we be doing? You were a special operator in Colombia. 
You have seen a successful play in Colombia. Why are we not 
seeing the same success in Mexico and in Central America?
    Mr. Sheehan. Senator, I think it is a classic case where in 
Mexico where there has been progress, it has pushed things 
south, or the Mexicans have put pressure on the cartels. They 
look for other opportunities to move their products, their 
precursors, and other activity. Central America has been 
traditionally weak states. I served there as special forces 
captain in El Salvador in the 1980s, very violent place as 
well. I was also in Honduras for many tours as a member of the 
7th Special Forces Group.
    The Central American Governments have never been very 
strong. Their economies are very fragile, so there are 
opportunities. The narcotics traffickers have found great 
opportunities to operate there, and they moved in there very 
quickly, and we have to respond. Basically we need to respond 
with all the instruments that we have, both in Mexico and in 
Colombia, and in other parts we must try to push back against 
the expansion of the narcotics industry through Central 
America, because these weakened states are very, very 
vulnerable. So, it is something that DOD is turning to, and we 
look forward to moving all those fronts in Central America to 
help strengthen those states.
    Senator Portman [presiding]. The chair is wisely going to 
vote, and I am going to be joining her in a second. I guess 
just one final question getting back to, again, the opening 
statement and the original conversation about resources. This 
is a general question, but it goes to the physical constraints 
we are going to be feeling here for quite some time regardless 
of what happens with sequestration.
    Do you suspect that in the 2014 budget, in the 2013 budget, 
that your work, particularly SOCOM, will continue to have a 
priority? Are you concerned about, again, what these budget 
pressures are going to do your capability? Can you just put 
that in some context for us?
    Mr. Sheehan. Yes, Senator Portman. It is good news and bad 
news for us in the special operations community.
    The good news for the SOF community is that the President 
has made it very clear in his strategy that special operations, 
as well as cyber and other issues, such as the Pacific, are 
going to have priority of resources as we have done a strategic 
review and a shift in our national security policy and our 
defense strategy. So, I think special operations will, in many 
ways, fare better than some other parts of DOD, but there is no 
question in my mind that we will also, if there is 
sequestration or dramatic cuts, share part of the burden. I 
think we will share some major impacts in our programs.
    Senator Portman. In terms of the strategy going forward, 
though, again, assuming we will continue to be under these 
budget pressures, which unfortunately I think looks true when 
you look at the President's budget, it is another $11 trillion 
to our debt over the next 10 years, which your former Joint 
Chiefs Chair said was the biggest national security challenge 
we face is our deficit and debt. Are there ways to take our 
existing budget and, again, given the fact that we are looking 
at a projection of spending less than we had planned to 
already, and if sequestration goes into effect we will be 
spending even less than we had planned to, is there a way to 
use SOF more to be able to do some of the same critical 
missions, but at a lower cost?
    Mr. Sheehan. Yes, Senator, and I think that is part of the 
President's strategy, recognizing SOF provides the National 
Command Authority (NCA) at a relatively inexpensive way to 
project our national interests. So, I think that that is going 
to be central to our strategy to try to protect our interests 
in a cost-effective way with SOF, and also building coalitions 
with our partners to achieve mutual goals. So, I think that is 
part of a way to reduce our costs and still protect our 
interests.
    Senator Portman. With regard to the conversation earlier 
about al Qaeda, we did not talk much about Iraq. General 
Mattis, Commander of CENTCOM, has stated before this committee 
that he sees strong indications that al Qaeda is making a 
comeback in Iraq. I would ask you if you agree with General 
Mattis' observation that al Qaeda is making a comeback in Iraq. 
If so, to what do you attribute this resurgence? Do you believe 
that the Iraqi security forces are capable of conducting 
effective CT operations?
    Mr. Sheehan. Senator, there is no question General Mattis 
is right. The numbers bear out his observation that al Qaeda 
has increased its attacks in Iraq.
    I think that it remains to be seen how this evolves. Al 
Qaeda has its own problems in Iraq as well, operating there in 
areas that--in different areas and different relationships with 
the Sunni groups there, although you see some spillover of some 
of the Sunni insurgent groups backing al Qaeda, which is also a 
troubling trend. So, I think it remains to be seen whether the 
Iraqis are going to have the full capacity to deal with it.
    Obviously since we left there, there is no question that 
the capacity of their SOFs is not the same as when we are 
standing side-by-side with them. There is just no doubt about 
that. But that is a decision they made. They are going to take 
this on by themselves. We will try to help in every way we can 
as a country that is trying to assist them gain some stability 
there.
    But clearly al Qaeda has grown there. It is a troubling 
trend. Quite frankly, for me and for our office, we are looking 
for the ability of al Qaeda to project from there and export 
which will also be troubling to our national interests. So, we 
are looking at it not only in terms of it destabilizing Iraq, 
but also providing a platform for the projection of a strategic 
al Qaeda from that area. So, it's a major concern as well.
    Senator Portman. To the extent that al Qaeda uses Iraq as a 
platform as they have in other countries, including Yemen, as 
you indicated, certainly Afghanistan, which is why we went in 
the first place, would it be your view that SOF should be in 
Iraq to help deal with that threat?
    Mr. Sheehan. Senator, that is a very difficult political 
question. But obviously for me personally, wherever al Qaeda 
exists and where there is sanctuary for al Qaeda and they're 
operating, and we can develop a partnership with that host 
country in order to take on al Qaeda, that is something I would 
like to pursue.
    Obviously, we have a political equation with the Iraqis 
regarding our defense relationship. Right now, hopefully we 
will see it evolve over the years ahead, and we will have 
opportunities to work with them where we have a mutual interest 
like this.
    Senator Portman. Gentleman, again, thank you for your 
testimony today. Again, it is being used in a very direct way 
to help us put together the right authorization bill, but also 
just great information as we try to figure out how to work 
through these budget challenges and be sure that our unique 
capabilities in the areas that are under your purview have the 
resources they need, and that they are used effectively.
    This hearing will now be in recess until the chair comes 
back, and I am going to sprint to a vote. Thank you. 
[Recessed.]
    Senator Hagan. If we could reconvene, that would be great. 
Thank you.
    I had just a few more questions, and I thought as long as 
we are still here, we will go ahead and seek out your answers 
to these questions.
    Secretary Sheehan and Secretary Reid, given the emphasis on 
the SOF capabilities in DOD strategic guidance and budget, and 
the reduction in the size of the general purpose forces, do you 
believe that there is a risk in commanders becoming too reliant 
on our excellent SOF? Then, also, how do you believe the focus 
of the strategic guidance on the Middle East and Asia Pacific 
will impact deployments of our SOFs? So, the first one being 
the reliance on SOF.
    Mr. Sheehan. Thank you, Senator. In some ways, because our 
SOFs have been so effective, there will be demands for them, 
and that is a good thing. But I think that we are going to be 
able in the future to manage that expectation. I think Admiral 
McRaven is working on that now to make sure that we do not 
exhaust the force, and I think we have those plans in place to 
manage that.
    But certainly there will be lots of demands for the 
excellence that these men and women provide to our national 
defense, but I think we can manage it.
    Senator Hagan. The amount of time it takes to train a 
member of the SOF I understand is a rate of 3 to 5 percent per 
year without sacrificing quality. So, do you feel comfortable 
that we can keep those numbers according to what the demand is 
for these troops?
    Mr. Sheehan. Yes, Senator. I think we are going to project 
a growth up to about 70,000 to 71,000 over the next few years 
at that rate.
    Senator Hagan. Where are we now?
    Mr. Sheehan. 66,000, I believe, somewhere around there, 
67,000. So, a couple more thousand over the next few years, we 
should be able to do that without a great strain. From there I 
think we are going to hold it and then try to sustain that 
force, and protect the deployment schedule of that force.
    Senator Hagan. Mr. Reid?
    Mr. Reid. I would just add to that last point that the 
operator growth, which is really the 3 to 5 percent pace within 
this current growth plan--the operator growth is in place. The 
last layer the Secretary just referred to is in combat support 
enablers that were put in place in the last QDR, and then most 
recently in the 2013 program review.
    With respect to the over-reliance on SOF that you asked 
about, the Secretary also sits atop DOD's Irregular Warfare 
Policy Group and the Security Force Assistance Group. Both of 
those were designed, and the reason they were put in our office 
is to apply the experience and expertise that SOF brings into 
both those areas, and help the Services with their 
capabilities, and oversee it for the Secretary.
    Regarding whether SOF becomes overused, in security force 
assistance, for example, the policy that is overseen sets out a 
framework. So, small missions, sensitive environment where most 
people think that is typically a SOF mission, that is a 
threshold. Small mission, maybe not overly politically 
sensitive, where a general purpose force could apply, that 
would go to them. Then a larger context mission that maybe you 
would need to have both. Again, that all works through that 
process.
    Services are involved in this, and particularly the ground 
forces in regionally aligning elements in both Army and Marine 
Corps special purpose Marine Corps Air-Ground Task Force and 
advise and assist brigade construct that is being used in 
Afghanistan. Again, overseeing how they adapt that going 
forward for these future requirements is our hedge against what 
you asked about how you just give it to SOF, give it to SOF. We 
are promoting the development of those capabilities for the 
right mission sets all in one package.
    Senator Hagan. Then, how about the focus on the strategic 
guidance on the Middle East and the Asia Pacific? How will that 
impact other deployments?
    Mr. Sheehan. Senator, I think the President has made it 
clear that he does want to shift to the Pacific, and to align 
our national defense strategy with our interests there. That, I 
think, will require us to look at the resources that are going 
to be deployed there, and it will--we are going to have to 
shift, as we mentioned that 80 percent of our forces have been 
in CENTCOM over the last 10 years. That is going to change in 
the future. But I do think we do have the force structure in 
SOF to do that and do it properly when we grow to 71,000.
    But I do want to mention, though, there will always be a 
strain on certain low-density military occupational specialties 
and certain types of officers that will get the call, those 
with special skills and languages, or intelligence fusion, 
logistics people, certain types of skill sets that have to be 
managed because they get the call often.
    Also what happens, we have to watch our readiness as those 
people will be plucked out of units to be tailored to conduct 
certain missions in country in order to meet that exact need. 
That also disrupts the force.
    So, this is a management problem for Admiral McRaven, and 
he is very attuned to it and trying to develop the processes to 
protect that while we have the flexibility to put together 
different packages for countries. But there will be that 
challenge of a certain percentage of the force it seems that 
will be getting the call often. That has always been the case 
in SOF and will continue to be, but it is something that we 
will work our way through.
    Senator Hagan. What is the typical length of deployment for 
our SOF in these situations?
    Mr. Sheehan. It varies, but generally 6 months, but 
sometimes less, 4 months. Sometimes it goes to a year depending 
on what they are doing, but generally around 6 months.
    Senator Hagan. Then what is the dwell time?
    Mr. Sheehan. Excuse me, ma'am?
    Senator Hagan. What is their dwell time?
    Mr. Sheehan. Normally, you want about a 20, 30 percent is 
what we are looking for. I think that is the number, 20 to 30 
percent.
    Senator Hagan. So, if they are on for 1 year, you are 
saying they will not be deployed for a period of time?
    Mr. Sheehan. Right. Say they are on for 6 months. They 
should get 18 months off.
    Senator Hagan. Let me ask about the rewards program. DOS 
offers rewards for the arrest and conviction of certain 
individuals that are wanted for terrorism, narcotic 
trafficking, certain past war crimes. I understand that 
legislation is being developed to expand the DOS rewards 
program to include TOC, and to broaden the scope of rewards for 
persons wanted for war crimes, crimes against humanity, and 
genocide. I understand such an expansion might assist DOD's 
efforts against the LRA.
    What is DOD's position on the proposed expansion of the 
law, and how could it help your efforts?
    Mr. Sheehan. Senator Hagan, I am not exactly familiar with 
all the details of it, but I will say this, that we--from my 
experience, these rewards programs have been very successful in 
the past, and we look forward to seeing more of those programs 
brought to the table.
    Senator Hagan. But this would specifically be just in the 
DOS?
    Mr. Sheehan. Right. But still, we are looking at the same 
target sets.
    Senator Hagan. Right.
    Mr. Sheehan. So I think it is very, very complementary.
    Senator Hagan. Okay. We talked a little bit in some of our 
earlier questions, and you referenced Admiral McRaven's request 
to perhaps seek more authorities. We have seen a lot of news 
reports that have suggested that he is seeking broad, new 
global authorities for the SOF.
    He actually said in a hearing on March 6, that he will 
never deploy forces to a geographic combatant command without 
that geographic combatant commander's approval. We never go 
into another country without getting clearance from the chief 
of mission, and the chief of mission always has a vote on 
whether or not U.S. forces arrive in the nation that he or she 
is sitting in.
    So, what is your understanding of the assessment 
authorities being sought by Admiral McRaven? Would such 
authorities require a change to the Unified Command Plan (UCP) 
or new legislation?
    Mr. Sheehan. Yes, Senator. These proposals are being worked 
in DOD. Right now as we are speaking, our staffs are still 
working on these proposals.
    I think what Admiral McRaven is doing is really part of the 
long evolution of the special operations community since it was 
really created by Congress in its legislation in the mid-1980s 
of Goldwater-Nichols and Nunn-Cohen. It was landmark 
legislation that created the special operations community, 
created our office, the geographic command as well. And those 
authorities served us well in providing the NCA these types of 
capabilities when they needed them, which might not have 
happened had not Congress acted in the 1980s.
    I think right now we are at an inflection point of our 
strategy in thinking about where the special operations 
community is going to be over the next 10 years. The National 
Defense Strategy, as articulated by the President and the 
Secretary of Defense, calls upon the SOFs in playing a major 
role across the globe in achieving our defense objectives.
    In order to do that, in order to meet those new demands by 
the strategy, Admiral McRaven is trying to come up with 
different proposals to give him the ability to react to those 
demands that are going to come down. They come across a range 
of things that may include a UCP language change. It may 
include a different relationship with the subunified theater 
special operations commands that are in each of the geographic 
commands. It may include different legislative authorities. The 
different types of authorities to move forces around are all 
being discussed to give Admiral McRaven the ability to provide 
options to the NCA to meet our national security objectives in 
a more coherent and efficient way. It is something that I 
broadly support, and the details are being worked out.
    I think it is an opportunity for us to reshape how the 
special operation community functions within DOD and within the 
interagency community to respond to these emerging threats and 
the strategy that we are trying to design to meet those 
threats.
    So, over the weeks ahead, we will be working through those 
proposals. I think at the end we are going to see a new 
strength and ability of SOCOM and our office to provide these 
options for the NCA both within a geographic command and across 
geographic commands when transnational threats require 
synchronizing across commands.
    So, I think this is really the heart of what we are talking 
about and working through DOD, and assuring people, as 
mentioned by Admiral McRaven in his remarks, assuring 
geographic commands and DOD that their equities will also be 
integrated into this in a whole-of-government approach, a 
whole-of-DOD approach to resolve these issues.
    Senator Hagan. If a geographic combatant commander 
requested SOF, can you describe for me what might be the length 
of time before he would find out whether he receives those SOF, 
how long it could be?
    Mr. Sheehan. Yes, Senator, and sometimes it can be 
instantaneous, the relationships that we have among the 
geographic commands in SOCOM, particularly in JSOC and some of 
those operations are instantaneous. We can move forces. For 
some of the other ones that perhaps require a little bit more 
development, it might take weeks or even months to put together 
the right team to prepare them for deployment and send them. 
So, I would say anywhere between almost instantaneously moving 
forces to several months.
    Senator Hagan. But I understood that in some instances, 
because of the chain of command, this could take up to many, 
many, many months.
    Mr. Sheehan. Yes, Senator, in some cases. I think those 
cases, they are the ones where there is either--I think those 
are normally ones where there is more of a political diplomatic 
issue at stake, or moving into a country where the issues are 
complicated, and whether--how we want to employ force in a 
certain situation, or what is the relationship--our defense 
relationship with that country. Those are normally the things 
that hang it up.
    Normally in terms of our forces, if we really need them, we 
can shift them pretty quickly. So, the longer ones are normally 
a political military dimension.
    Senator Hagan. Okay. I wanted to shift a little bit to the 
Village Stability Operations (VSO). Witnesses before the 
committee have consistently highlighted the importance of the 
village stability and the ALP programs to our strategy in 
Afghanistan. How do you view the future of these programs given 
President Karzai's recent comments that all international 
forces should leave the villages and return to the large bases? 
He made this statement after the soldier who carried out the 
tragic shooting of the Afghan civilians on March 11.
    Mr. Sheehan. Senator, Madam Chair, it is interesting. I 
listened very carefully to President Karzai's remarks about 
this. Quite frankly, he is right in the long-term. In the long-
term, we want the Afghans to be out front. We want to move back 
in the barracks. We want to come back home. So, there is no 
question about that.
    Unfortunately, right now we are not ready for that, and so 
we are going to have a dialogue with the Afghan Government 
about the pace in which we turn over the security to the local 
forces. But right now, I think it is very, very important that 
ALP program and the VSO program are, I think, crucial to our 
strategy in stabilizing some of the rural areas in Afghanistan. 
It is crucial that our forces be out there operating in the 
field to try to get the momentum further advanced before we do 
turn it over to the Afghans. So, I think it is a matter of 
timing, and right now I think that we need more time in order 
to get those programs established.
    There has been great progress. Again, it varies from place 
to place. Some areas, these programs really take off. It 
depends on a lot of factors: the local leadership, how 
committed they are to it, the levels of corruption, et cetera. 
But there has been great progress in many areas, and we plan to 
keep growing this program out to 30,000 ALP, and that is going 
to take some time. So, I hope the Afghan--we will be able to 
work--continue to work with President Karzai and the Afghan 
Government to continue these programs as, I think, it is a 
cornerstone of our strategy of exiting and actually achieving 
what President Karzai wants for us to step back. But we need 
some more time.
    Senator Hagan. You quoted the number 30,000 for the ALP. 
Where are we now?
    Mr. Sheehan. We were at 10,000 last time I checked, but I 
think we have moved a little bit further than that, somewhere 
of 10,000 and moving maybe to 12,000 or something, around 
there, 12,000. We have a ways to go, but it is a very, very 
important program, Senator.
    Senator Hagan. Some human rights groups and others have 
accused the ALP units of serious abuses against the populations 
that they are obviously being tasked to protect, including 
killings, rapes, beatings, and extortions. The program has also 
been criticized by some for encouraging the proliferation of 
armed groups within Afghanistan. What is your response to these 
criticisms of the ALP?
    Mr. Sheehan. Senator, I think some of those have been 
exaggerated. I think that--and obviously when there are abuses, 
these are some things that we take very, very seriously to 
investigate and respond to any abuses of human rights by any 
ANSF, whether it be the regular army, the police, or the ALP. 
So, I think some of these have been exaggerated for political 
purposes. Where there are problems, we need to address them 
very rapidly and effectively.
    I'm sorry, I forgot the second part of your question.
    Senator Hagan. What is your response to the criticisms? 
There has been criticism too, or accusations that it has 
increased the proliferation of armed groups within Afghanistan.
    Mr. Sheehan. Right. I'm sorry, that is right. Again, I 
think that is an unfair characterization because the ALP is 
within the MOI. Yes, there is a degree of independence at the 
local level, which we think is part of why it has been 
effective, because as Garry has mentioned, how it links to the 
local leadership. It is a local response to a local problem. 
You get the commitment at the village level to the security. In 
a way, it is a grass roots approach to counterinsurgency, which 
historically has been effective.
    But there have been those critics that worry about it 
becoming its own separate army. That has been a criticism of 
these types of units historically and to include in 
Afghanistan. It is an issue that we have to be mindful of, and 
we have to be mindful to make sure that as we--all of the 
organizations within both the Ministry of Defense and the MOI 
within Afghanistan are working together and staying together as 
unified, and not to split up into different types of political 
or other interests, which could unravel things in the future.
    So, it is an issue that we have to be wary of, but right 
now I think that it is part of the same team, and that those 
criticisms are a bit exaggerated. But I am very mindful that 
that has to be watched.
    Senator Hagan. While we are talking about the VSO program, 
can you give me an update on how the women within our military 
are being utilized as part of this VSO program? I read a lot 
about it a while back, but I have not been updated on it 
recently.
    Mr. Sheehan. Yes, Senator. Actually, I do not have anything 
new either, but just to say that these are critical functions. 
They are very interesting and a new area for me to see as 
coming back into government to see the role of women involved 
out in the field, and they are doing a great job, and extremely 
important for our ability to interact across the entire--the 
society there with the women in the villages and very 
important. I don't know if, Garry, you can articulate it a 
little bit deeper.
    Mr. Reid. The most obvious value is their ability to 
interact with Afghan women and overcome the cultural barriers 
that exist to where an Afghan woman, it would be inappropriate 
for her to approach a Western male, military person anywhere 
outside the village.
    So, what we have learned over time, and the Services have 
done the same thing. SOF does not own this idea. Matter of 
fact, we may have gotten into it after the Marine Corps and 
Army had done it as well, is these cultural support teams to 
engage with the women in the objective areas. It pays great 
dividends. There has been information that they were able to 
pass that they wanted to pass to somebody and did not have 
anyone to pass it to. But it also softens the hard edges of 
engaging with the military at all by having a woman to talk to, 
so to speak.
    Senator Hagan. But are all the VSO programs, are they 
utilizing women?
    Mr. Reid. They have access to them, but we do not have them 
in every location.
    Senator Hagan. Okay. Secretary Wechsler, I know that we 
have spent time talking about the counter threat finance. Can 
you take a moment to update the committee on the effort with 
regards to counter threat finance?
    Mr. Wechsler. Sure.
    Senator Hagan. Then, do you also have the legislative 
authorities to conduct the operations? Then if you could cite 
some examples.
    Mr. Wechsler. Sure. There are basically two categories. One 
is--and both of them are becoming increasingly important to 
DOD. One is inside war zones and one is outside war zones. 
Inside war zones, our experience in Iraq where we set up the 
Iraq threat finance cell, and our experience in Afghanistan 
where we set up the Afghan threat finance cell, has proved to--
we have gotten great dividends from that, to bring together the 
right kinds of organizations, the right kinds of people from 
across the interagency to understand the financial 
infrastructure, the financial order of battle of our adversary, 
and to use that information to disrupt them both on a tactical 
level, integrated into our operations, and then on a more 
strategic level, to even influence where we put forces at what 
time during the year, to go after our adversaries' financial 
revenue streams.
    Outside the war zone, we find that it is equally important 
for DOD to support other agencies in bringing the unique 
tools--analytical tools and also defense intelligence tools to 
the table to break down the walls between law enforcement on 
one hand and intelligence on the other hand, to make sure that 
all the information that the U.S. Government possesses can be 
used to enhance an analysis of our adversaries' financial 
networks that support them.
    There are a great deal of examples that I could use to use 
good progress in this regard. Quite many of them, especially 
outside of the war zone, as I said, involve the use of other 
agencies' authorities. One that I will point out to you right 
now was very good work done by the DEA and also the Treasury 
Department to go after Lebanese Canadian Bank last year to 
build on a DEA case or set of cases, which identified drug 
trafficking from Latin America through West Africa into Europe, 
the money for which was mixed in with used car sales from the 
United States that were brought to West Africa. The money then 
was used to buy goods, knock-off goods in China, to give money 
back to the people in South America who are producing the 
cocaine. A global network of money laundering, all managed and 
controlled by someone associated with the Hezbollah, and a lot 
of the money that was there went for Hezbollah.
    DOD does not have the tool set, and should not have the 
tool set, to go after it. We are not going to be bombing 
anybody in this part of the world. But the Treasury Department 
did, and used their authorities to do what is called a 311 
designation against this bank. It was an immediate run on that 
bank. It was a short sale to Societe Generale. It ended up 
being an indictment in U.S. courts and a separate civil action 
for hundreds of millions of dollars in U.S. courts.
    This is an example of how the entire interagency can get 
together to, first and foremost, use the techniques that we 
developed under counter threat finance to understand how the 
money is actually being moved by these kinds of adversaries, 
and, second, use the right authorities that are being applied 
from different agencies to go after these in the right place at 
the right time. It is that kind of effort that we are building 
now and we see as a big part of our future.
    DOD's role in these kinds of efforts are driven directly by 
the authorities that you have provided for the counternarcotics 
account, absolutely essential in doing so, the 1004 
authorities, the 1022, 1021. We could not survive without them.
    I do have to say, going to what Secretary Sheehan was 
saying, that many of these authorities over time were built up 
on singular lines of action, on narcotics, or on insurgency, or 
on terrorism, and that is not how the world works. That is not 
how our adversaries work. As you see in this example, it was 
narcotics. It was used car sales. It was knock-off goods. It 
was money laundering. It was all of these things together all 
to support a terrorism organization. That is the way the world 
is. That is the way our adversaries are. So, we work through 
the authorities that we have with the level of flexibility that 
they have, and the limitations that they have, in order to work 
across lines through the interagency.
    Senator Hagan. That is an excellent example, and I know 
that the funding of terrorism and the TOC is certainly in many, 
many different areas. But there is also a specific fundraising 
season for terrorism. What are our specific goals to combat--
how are we combatting their fundraising, and really trying to 
get to the point where the people who are funding that are no 
longer able to do so, or no longer have the willingness to do 
so?
    Mr. Wechsler. Sure. I like to think of three different 
types of funding, and I think it is important. First, is the 
old style of state funding. The second is what you are talking 
about, are people who are willingly giving funds that they 
think--that they know or they think might support a terrorist 
organization because they are ideologically or religiously 
driven. The third type of funding is when their people do not 
even know that they are involved in it, but the terrorist 
organization has developed both illicit and sometimes licit 
business and criminal organizations to fund themselves so they 
do not even need people to be willingly funding them. So, we 
need to have operations that go after all three types of 
funding.
    On the second part that you talked about, the DOS is really 
in the lead of trying to combat violent extremism and work with 
our friends and partners around the world to ensure that they 
have the programs domestically to both publicly discourage, to 
bring religious edicts against, and have the law enforcement 
intelligence operations to disrupt the fundraisings that do 
have an annual cycle in some part of the world.
    Senator Hagan. How do you think that is working?
    Mr. Wechsler. I think in some places it is working quite 
well. I think that, for instance, against al Qaeda proper, we 
have had quite significant success on the financial networks at 
large over the years. There are other places where, as my 
example shows, they have adapted to some of the efforts that we 
have done to come up with new, very complicated, and, in many 
cases, very sinister techniques to diversify their financial 
streams. We have to go after those.
    Senator Hagan. Never ending. Over the past decade, given 
the increasing threat to security and the numerous challenges 
facing law enforcement institutions, many militaries in Latin 
America have been called upon to play a larger role in their 
domestic security matters. What impact, if any, does this shift 
in the responsibilities of partner militaries have on the 
policies associated with our security engagement strategy, and 
any risk or opportunities this might present?
    Mr. Sheehan. Yes, Senator. I think most of the time, 
militaries are reluctant to get involved in the domestic 
issues, whether it is counternarcotics or even insurgency in 
some ways. They are somewhat reluctant. They would much prefer 
to be defending the homeland, which is what they are often 
trained to do. But nevertheless, their national command 
authorities ask them to do things that sometimes they do not 
want to do. So, they are increasingly and have been 
increasingly involved in internal issues and law enforcement 
issues.
    We in DOD need to look across, when we look at a country, 
we look at the different institutions that are working the 
problem, and we will need to work with both of them, both the 
military and the Ministries of Interior.
    One of the concerns for the Ministries of Defense is 
obvious, and they see what happens, is that the interior 
forces, the police forces, become corrupted when they deal with 
narcotics trafficking organizations or criminal organizations. 
So, when we work with their Ministries of Defense, we also have 
to be very mindful, and it is something that we do not always 
do, and it is not something that we always think of in the 
first order, about how corruption can impact Ministries of 
Defense when they start to deal with these types of 
organizations, the amount of money involved.
    So, I think when we look for our solution set with the 
Ministries of Interior and Defense, this is one of the most 
fundamental issues.
    Senator Hagan. Mr. Reid and Mr. Wechsler, do you have 
anything to add to that?
    Mr. Reid. I would just add that where it would appropriate 
in engaging with these countries on these issues, that some of 
it can go back to these authorities questions that we keep 
bringing up about having the flexibility, under the appropriate 
circumstances, to where we can demonstrate agility and take 
advantage of opportunity. It may be an opportunity that would 
help steer that country back in the direction that in our 
interest we needed them to go, or for an opportunity to have 
some engagement. So, that would just be my only addition to 
that.
    Mr. Wechsler. The only thing I would add is that we in the 
United States need to avoid the impulse to project our systems 
on other countries. Sometimes there are other countries that 
might use the military in a different way than we would use the 
military, and that is not inherently improper in their system.
    The other thing that I would suggest is that sometimes we 
make the mistake of not recognizing how challenging a situation 
is to a foreign military, therefore, internal defense needs. 
That is why they are using the military. In some of these 
instances, if the same things were happening in the United 
States, we would be using the National Guard; they would be far 
beyond what local and State law enforcement could deal with. 
That is--those are the situations that foreign countries find 
themselves in when they employ the military in these 
circumstances, and I think we need to understand the reasons 
they do so.
    Senator Hagan. Secretary Sheehan, in some of our questions, 
you highlighted the need for further intelligence coming in 
from Iran. Do you see other countries around the globe where 
you also feel that we need further intelligence than we are 
getting right now?
    Mr. Sheehan. Senator, I think you can never have enough 
intelligence. I have never dealt with a problem or issue where 
you had complete visibility of all the problems that you face.
    So, I think that in terms of CT, that we follow the threat, 
and wherever the threat is, we want deeper levels of 
intelligence. So, right now, our priorities are right where the 
enemy is on the Pakistan-Afghanistan border area, in Yemen, and 
increasingly in Africa. I think we are going to have an 
intelligence challenge there to make sure that we try to stay 
ahead of the terrorists and identify these cells as they 
develop, these networks as they develop, so that we can crush 
them before they have the ability to strike us.
    So, I would follow the threat line, Senator, and just keep 
working it. We never have enough intelligence.
    Senator Hagan. Once again, in his posture statement, 
Admiral McRaven highlighted the potential of high definition 
video equipment for intelligence, surveillance, and 
reconnaissance (ISR) missions. Can any of you describe to me 
your assessment of this high definition ISR capability?
    Mr. Sheehan. Yes, Senator. In my view, from what I have 
seen in a couple of different operations over the last few 
months, that the high definition capability is a game changer 
for decisionmakers because the degree of clarity that it 
provides to the decisionmaker about certain situations provides 
a higher degree of confidence in making a decision regarding 
the use of force, and trying to minimize collateral damage. It 
is something we always strive to do, not only for humanitarian 
purposes--we do not want innocents killed or hurt--but also for 
political purposes. It can strain our flexibility when there is 
excessive collateral damage, so that the high definition 
provides that capability. It is something that we are working 
in DOD right now, and I think we are going to get the right 
answers there because everyone understands that it truly is a 
game changer.
    We are going to keep moving forward on to--and, again, 
thank you to the technology and the developments of the private 
sector, extraordinary in providing a greatly enhanced 
capability for our forces.
    Senator Hagan. What are you doing as DOD to field these 
additional capabilities in this area?
    Mr. Sheehan. Senator, we are working with the private 
sector to get these built and brought online, and getting the 
funding online, and bring them into the force. I think we have 
a good plan to do so, and I think we are going to get there. It 
is just a matter of getting the funding lined up, getting 
industry to keep cranking these things out, and deploying them 
into the field. It is really extraordinary technology and we 
are going to get there.
    Senator Hagan. Are you concerned about a lot of this 
technology being made not in the United States?
    Mr. Sheehan. Senator, I think that obviously we would love 
to have it home grown, but we will take the best that we can in 
order to achieve our objectives, in order to get the bad guys. 
We will buy foreign, but obviously we would prefer United 
States. But I think most of it is American, I understand, so I 
think I am almost sure almost all of it is. I am not aware of 
that much of it being done overseas, but I think most of it is 
American made.
    Senator Hagan. Mr. Reid, any comments on the capability?
    Mr. Reid. No, nothing in addition.
    Senator Hagan. Okay. Just a few more questions, and I know 
we are running out of time. What do you believe are the most 
important lessons learned from this collaborative interagency 
effort for CT operations in Afghanistan and Iraq and elsewhere? 
Then, how do we best institutionalize these lessons learned for 
future CT operations? Sort of a wrap-up.
    Mr. Sheehan. From Iraq or Afghanistan?
    Senator Hagan. Both.
    Mr. Sheehan. From both.
    Senator Hagan. Yes.
    Mr. Sheehan. I think when we went into Iraq and 
Afghanistan, in some ways unfortunately we were learning on the 
run, and we were picking up, dusting up, old counterinsurgency 
strategies and trying to employ them in both Iraq and 
Afghanistan. I think we have learned a lot over the years about 
the complexity of counterinsurgency operations, how it needs to 
be coordinated, an interagency effort, how the political 
supremacy of counterinsurgency is always fundamental, that the 
military strategy follows behind that, that those types of 
issues are fundamental to our lessons learned.
    But I also believe from the SOF that we--I am not so sure 
there are as many lessons learned have honed sets of skills 
that are extraordinarily well-developed over the past 10 years, 
both in the direct and the indirect areas, both in terms of our 
kinetic operations against terrorists, which is really an 
incredible fusion of intelligence and then precision strike, 
that we have developed a tremendous capability there. It 
continues to evolve.
    On the other side of the coin is the advise and assist 
mission, and there, again, a traditional SOF mission, perhaps 
one that was focused in certain geographic commands prior to 
September 11. Now it is one that is embraced by all of our 
special forces groups, including the SEALs as well, to 
understand the importance of not only having highly skilled 
warriors, but the ability to then work with the host country, 
transfer those skills to them so that they provide security for 
their country.
    So, I think for the special operations community, it is a 
matter of retaining those skill sets that have been developed 
so tremendously over the last few years. Then applying those 
appropriately and differently to each theater as we look around 
the world for opportunities to protect our interests with those 
types of skill sets.
    Senator Hagan. Let me ask the final question having to do 
with Pakistan. You have mentioned Pakistan quite a bit today. 
In the June 2011 National Strategy for CT, it stated that our 
goal of defeating al Qaeda in Pakistan can only be achieved 
through a sustained partnership with Pakistan. What is the 
current status of DOD's efforts to partner with Pakistan to 
defeat the threat from al Qaeda on Pakistan's territory?
    Mr. Sheehan. Senator Hagan, it is perhaps the most 
complicated relationship we have in the world right now, the 
U.S.-Pakistan relationship. Obviously, you have probably seen 
in the press reports of the new parliamentary decisions that 
are made that are going to further complicate our ability to 
work with the Pakistani Government.
    But I would say this, that we have no choice but to work 
together, and I think we will. It is very troubling and can be 
so frustrating in dealing with the Pakistan Government on so 
many levels. But at the end of the day, we are going to find 
confluence of interest, and we are going to work together the 
best we can and get these issues resolved. Quite frankly, also 
at the end of the day, the President is going to do what he has 
to do, and unilaterally. He will always protect that 
prerogative to protect the security of the American people and 
our interests.
    Hopefully we will be able to work together and find some 
common interests. I think sometimes it is actually a mixed 
story. Sometimes it looks worse than it is, and actually we are 
making progress, and then sometimes I read other things that 
show it is even worse than I thought it was. So, it is so 
troubling and complex, but nevertheless, they are there. They 
are sitting on top of our adversary, and we are just going to 
have to work through this issue indefinitely. We are going to 
have ups and downs, and a lot of downs unfortunately in the 
months ahead.
    I have been working with the Pakistan Government. I 
remember sitting with them prior to September 11, after 
September 11. They have a different view of what is happening 
in Afghanistan. They have a different view of their interests. 
They have an addiction to playing around with militia groups to 
achieve certain interests, particularly vis-a-vis India, that 
gets them in all kinds of trouble. We have had these 
conversations with them forever about that. I do not see that 
changing. I do not see any set of talking points that is going 
to be delivered by some new diplomat that is going to change 
their mind. It is the way they view the world. We have to 
understand the way they view the world and try to work through 
it.
    It is not going to be easy, but I think at the end of the 
day, we have been successful in the FATA in degrading al Qaeda 
over the last 10 years, despite all these problems. I think 
that we are going to continue to work through it and hopefully, 
again, have another 10 years of success in degrading al Qaeda's 
strategic capability in the FATA and elsewhere.
    So, I remain somewhat optimistic, even with all the extent 
of these problems, that we are going to continue to pound al 
Qaeda so that they cannot attack us. If we stay focused on that 
and not get discouraged with all the other political drama, we 
can keep a level of optimism moving forward. Sometimes I think 
that is important because we can beat ourselves to death about 
all the different problems we have, but at the end of the day, 
we have been successful, and hopefully we will be able to 
continue that.
    Senator Hagan. Thank you. Due to the lateness of the hour, 
we will adjourn this hearing. I do appreciate the testimony and 
the time that all of you spent preparing for this and obviously 
being here today. So, thank you very much. We are adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Mark Udall

                 NATIONAL STRATEGY FOR COUNTERTERRORISM

    1. Senator Udall. Secretary Sheehan, the 2006 National Strategy for 
Combatting Terrorism had a section devoted to growing counterterrorism-
related Intellectual and Human Capital as a key to institutionalizing 
long-term success, including focusing on continuing education in 
appropriate area studies, religious philosophies, and languages. The 
2011 National Strategy for Counterterrorism makes no such mention of 
growing and developing experts in terrorism. Why does the latest 
National Strategy for Counterterrorism not mention the need for 
growing, or at least maintaining, high-caliber talent in the 
counterterrorism field?
    Mr. Sheehan. The 2011 National Strategy for Counterterrorism 
reflects an evolution in our understanding of the terrorist threat, in 
the capabilities of our government, in the capacity of our partners, 
and in the tools and technologies at our disposal. Over the past 
decade, the Department of Defense (DOD) has strengthened its 
intellectual and human capital--which has included expanding human 
intelligence and linguistic skills--and these investments will 
continue. DOD also partners with institutions and countries around the 
world to bring about al Qaeda's demise. We have made enormous progress 
in building and strengthening an international architecture to confront 
the al Qaeda threat, and have also increased our efforts to build the 
capacity of partners so they can take the fight to al Qaeda and its 
affiliates in their own countries.
    As a former Special Forces officer, I know firsthand how critical 
training and education in foreign and area studies, religious 
philosophies, and languages are in building these partnerships. As 
such, I share with the Commander of U.S. Special Operations Command 
(SOCOM) an appreciation of the critical role that education and 
training play in ensuring an effective global Special Operations Forces 
effort. To build this trust with our foreign partners, however, we must 
commit to preparing forces for and assigning them to specific regions, 
and to managing those servicemembers' careers appropriately. Some 
efforts underway to move toward this goal include reorganizing SOCOM 
headquarters to create a Force Management Directorate, selecting high-
aptitude foreign language students for extended training, and making it 
easier for noncommissioned officers to earn associates and bachelor 
degrees. Additionally, SOCOM's Regional Centers Program sends 
approximately 80 personnel annually to attend counterterrorism, 
combating terrorism, and executive-level seminars at DOD Regional 
Centers. Finally, the Combating Terrorism Fellowship Program, which I 
oversee, builds partners in the struggle against violent extremism by 
providing counterterrorism education and training for mid- to senior-
level international military officers, ministry of defense civilians, 
and security officials. Collectively, these kinds of training and 
education efforts enable DOD to engage foreign partners more 
effectively and build the relationships that we need to combat 
terrorism around the world.

    2. Senator Udall. Secretary Sheehan, do you feel further 
investments in research, education, and training in this field do not 
warrant national-level attention?
    Mr. Sheehan. Investing in research, education, and training to 
combat terrorism is critical to sustaining effective and relentless 
pressure on al Qaeda and its affiliates while adhering to our core 
principles. As the Secretary of Defense has emphasized, language 
skills, regional expertise, and cultural capabilities are enduring 
warfighting competencies and are critical to mission readiness. Within 
DOD, it is the mission of the Defense Language and National Security 
Education Office to coordinate efforts across the Services and defense 
agencies in order to build the language and cultural skills of our 
deploying total force. Over the last several years, DOD has made 
significant investments in foreign language, regional, and cultural 
awareness training, including through incentive pay, language training 
detachments, and cultural and area studies research programs. These 
investments within DOD and across the U.S. Government continue to 
receive my support.

    [Whereupon, at 4:41 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        TUESDAY, APRIL 17, 2012

                           U.S. Senate,    
                   Subcommittee on Emerging
                          Threats and Capabilities,
                               Committee on Armed Services,
                                                    Washington, DC.

 HEALTH AND STATUS OF THE DEPARTMENT OF DEFENSE SCIENCE AND TECHNOLOGY 
                      LABORATORIES AND ENTERPRISE

    The subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SR-222, Russell Senate Office Building, Senator Kay R. 
Hagan (chairman of the subcommittee) presiding.
    Committee members present: Senators Hagan, Shaheen, 
Gillibrand, and Portman.
    Committee staff member present: Leah C. Brewer, nominations 
and hearings clerk.
    Majority staff members present: Richard W. Fieldhouse, 
professional staff member; Peter K. Levine, general counsel; 
and Robie I. Samanta Roy, professional staff member.
    Minority staff members present: John W. Heath, minority 
investigative counsel; and Michael J. Sistak, research 
assistant.
    Staff assistants present: Kathleen A. Kulenkampff and 
Bradley S. Watson.
    Committee members' assistants present: Patrick Day, 
assistant to Senator Shaheen; Elana Broitman, assistant to 
Senator Gillibrand; and Brent Bombach, assistant to Senator 
Portman.

      OPENING STATEMENT OF SENATOR KAY R. HAGAN, CHAIRMAN

    Senator Hagan. We will go ahead and call this hearing to 
order.
    I know that Senator Portman is on his way, but I thought we 
would go ahead and get started.
    I appreciate all of our witnesses being here, and Secretary 
Lemnios, I believe this is your third time in a very short 
period of time. So thank you very much for coming back.
    This afternoon, as part of our review of the Defense 
Authorization Request for Fiscal Year 2013, the Emerging 
Threats and Capabilities Subcommittee meets to receive 
testimony on the health and status of Department of Defense 
(DOD) laboratories and the science and technology (S&T) 
enterprise. This hearing will delve deeper into some of the 
important topics that we touched upon last year in our hearing 
on the health and status of the national defense industrial 
base and related S&T elements. As a key element of DOD's 
roughly $12 billion per year S&T portfolio, its laboratories 
contribute to a broad range of S&T activities ranging from 
conducting Nobel Prize winning basic research to rapidly 
developing and fielding capabilities for the warfighter. The 
lab enterprise includes 62 organizations.
    Welcome, Senator Portman, we just got started.
    This lab enterprise includes 62 organizations spread across 
22 States, with a total workforce of about 60,000 employees, 
more than half of whom are degreed scientists and engineers. In 
certain critical national security-related areas, these 
organizations and, more importantly, the highly-skilled 
scientists, engineers, and technicians in them I believe are 
truly our national assets.
    The challenge facing DOD is to budget the resources needed 
to attract and retain a highly-skilled technical workforce, 
conduct relevant and effective research and development (R&D) 
to give our military the technology edge it needs while relying 
on tools and an infrastructure that are aging. DOD must do all 
of this in an era of increasing budgetary pressures on 
investments in our future.
    In order to gain a better understanding of the health and 
status of the DOD laboratory and S&T enterprise, there are 
several areas to explore. We would like to better understand 
the personnel and infrastructure challenges facing the lab 
enterprise, the relevance and effectiveness of its R&D 
portfolio, and its ability to transition technologies to the 
warfighter and transfer knowledge to industry. We are also 
aware that many technologies developed in the DOD labs have 
application to Homeland security and the protection of our 
cyber infrastructure, as well as dual use for the commercial 
sector.
    Furthermore, we are interested in how the DOD lab 
enterprise interacts with other Federal agencies such as the 
Department of Energy's (DOE) national labs, with industry and 
academia, including federally funded R&D centers and 
university-affiliated research centers.
    In order to explore these areas, we have to focus today on 
the mechanisms the labs have at their disposal to accomplish 
the following key tasks: recruit and retain the best and 
brightest scientists, engineers, and technicians; modernize 
aging infrastructure; rapidly develop, test, and help field 
innovative approaches to address threats in a complex, dynamic 
world; and coordinate and collaborate not only across the DOD 
lab enterprise, but also with other Federal agencies, industry, 
and academia to ensure that ultimately the DOD has the greatest 
possible access to sources of innovation.
    We also would like to know whether improvements to these 
mechanisms I just related are necessary.
    We are pleased to have four expert witnesses to help 
understand these complex areas.
    Mr. Zach Lemnios, as I said earlier, the Assistant 
Secretary of Defense for Research and Engineering. In this 
position he oversees and coordinates DOD's broad S&T portfolio 
across the Services and the Defense Advanced Research Projects 
Agency (DARPA). In addition, Mr. Lemnios oversees DOD's 
laboratory enterprise and serves as an advocate on behalf of 
the laboratories to his department's counterparts on personnel 
and infrastructure issues. The subcommittee looks forward to 
hearing about the DOD's overarching management strategy for the 
labs.
    Mr. Lemnios, as I said earlier, it is great to see you 
again, and thank you for being here and doing what you do.
    Dr. Marilyn Freeman is the Deputy Assistant Secretary of 
the Army for Research and Technology. In this position, she 
sets the goals and objectives of the Army's S&T activities 
across the 22 Army laboratories and centers. These laboratories 
conduct research on topics ranging from better food for 
soldiers to the next generation of ground vehicles. Dr. Freeman 
is credited for focusing the Army's S&T activities to be more 
soldier-centric through a set of well-defined technology-
enabled capabilities.
    Ms. Mary Lacey is the Deputy Assistant Secretary of the 
Navy for Research, Development, Test, and Evaluation (RDT&E). 
In this capacity, she is the lead for the Navy's science and 
engineering capability, capacity, and infrastructure at its 15 
laboratories and warfare system centers. The Navy labs conduct 
research from the latest autonomous undersea vehicles to 
futuristic electromagnetically driven rail guns for ships.
    Dr. Steve Walker is the Deputy Assistant Secretary of the 
Air Force for Science, Technology, and Engineering where he is 
responsible for preparing policy, guidance, and advocacy for 
the Air Force's S&T program that in part is executed by various 
directorates of the Air Force research laboratory (AFRL). The 
AFRL performs cutting-edge research from the next generation of 
directed energy weapons to the next generation of highly 
autonomous drones.
    I want to thank all of our witnesses for your service in 
the cause of our national security, and we look forward to your 
testimony. In order for us to have adequate time to discuss a 
broad range of topics, please keep your opening remarks to no 
more than 5 minutes, and we will certainly include your full 
written statements in the record.
    Before we hear from our panel, I want to turn to my 
colleague and ranking member, Senator Portman, for any opening 
remarks you might have.

                STATEMENT OF SENATOR ROB PORTMAN

    Senator Portman. Thank you, Madam Chair.
    Thanks to the witnesses for being here. I look forward to 
hearing from each of you. We have a distinguished panel with a 
lot of background and experience, and we are looking for a 
candid conversation about the health and the status of the 
laboratory enterprise at DOD. I think it is particularly 
important we talk about this today as we are looking at 
downsizing our military, particularly the strategic realignment 
that the administration is pursuing, and as priorities are 
adjusted, we want to be sure that we understand as a 
subcommittee exactly what the impact will be on the labs.
    The chair has talked a little about the breadth of our labs 
and she has talked about the importance of the labs. The 
threats we face as a nation, unfortunately, are not diminishing 
based on our fiscal problems. So the global environment remains 
very challenging, and yet obviously, as we have seen with the 
sequester and before that, the changes to the budget proposals 
that were being made by the administration, notwithstanding the 
additional sequester, we are under a lot of fiscal constraints 
at a time when we have plenty of challenges globally.
    We think the labs are a critical element to our ability to 
prepare for those threats, respond to those threats, and we 
certainly cannot afford any disruptions that could cause the 
lack of capabilities in these institutions that give our men 
and women in uniform a qualitative edge.
    During the Cold War, we knew without a doubt that America 
was at the top of the heap. We were the most technologically 
advanced nation in the world and we had the best research. 
Today that picture is a little less clear. The National Defense 
University released a report in February of this year on the 
topic of S&T on a global scale, and the report stated that--and 
I quote them--``the share of U.S. S&T productivity will decline 
from about 26 percent in 2005 to about 18 percent by 2050.''
    So while we continuously invest precious resources to 
develop leap-ahead technologies, it is not as simple as it used 
to be. We are not facing, of course, the single threat of the 
Soviet empire. We are facing a more complicated, competitive 
environment. We cannot out-spend and out-innovate all of these 
countries. The global scales are tipped. We are now competing 
with countries like China and other emerging economies.
    In the President's budget request, I noticed, for fiscal 
year 2013, DOD asked for $11.9 billion to dedicate to basic, 
applied, and advance research, much of which, of course, is 
done inside your labs. This is a slight reduction from fiscal 
year 2012, but only a very slight one. It still shows a 
commitment and shows our seriousness of purpose I believe. 
Because these S&T funding lines have been left largely 
untouched, you will have a responsibility, even more so than 
your colleagues who have had their budgets slashed, I think, to 
ensure that every one of your dollars is spent wisely. I know 
you take that seriously.
    I look forward to hearing about your plans to ensure that 
efforts across the entire Federal Government are coordinated--
the chair just talked about that particularly with the DOE labs 
and others within the Federal Government--that we eliminate 
unnecessary duplications, that technologies are developed that 
we can use by industry as appropriate, and that we use best 
practices across the broad range of R&D that is being done.
    I would also like to hear a little bit from each of you 
regarding this Defense Rapid Innovation Program (RIP). Each of 
you have previously talked about this. I think you have, it is 
fair to say, talked about its necessity, and yet I notice that 
it is not in your budgets. To date, I think $700 million has 
been dedicated to the program but it has never been in a budget 
request. So why? What do you think about it? Is it working? Is 
it a benefit to the warfighter or not?
    I have more questions that I will be raising later, and 
again, I really appreciate your all being here to provide your 
expertise to us as a subcommittee. I look forward to again to 
your frank assessment of our Nation's laboratory enterprise and 
S&T efforts and how we can improve them.
    Thank you, Madam Chair.
    Senator Hagan. Thank you, Senator Portman.
    I am pleased that Senator Shaheen and Senator Gillibrand 
have joined us.
    Secretary Lemnios, if you will start with your opening 
comments and, once again, if we can leave them to 5 minutes and 
the rest will be on the record.

 STATEMENT OF HON. ZACHARY J. LEMNIOS, ASSISTANT SECRETARY OF 
              DEFENSE FOR RESEARCH AND ENGINEERING

    Mr. Lemnios. Absolutely.
    Good afternoon, Chairwoman Hagan, Ranking Member Portman, 
and committee members.
    I will ask that my testimony be entered into the record. I 
have a very short statement and welcome the opportunity to 
testify before you on DOD's laboratories.
    The President's budget request for S&T funding of $11.9 
billion for fiscal year 2013 is structured around a solid 
foundation supported by the laboratories of DOD. These 
laboratories are comprised of dozens of facilities employing 
tens of thousands of public employees, military personnel, and 
contractors.
    Throughout the years, DOD's laboratories have repeatedly 
proven themselves to be a vital component to the overall 
success of DOD's S&T enterprise. The labs are uniquely suited 
to couple basic research concepts to early-use military 
applications and, most importantly, they connect to our 
warfighters and understand the challenges they face today and 
may face in tomorrow's conflicts.
    Our laboratories serve three primary roles for DOD.
    First is the development, rapid fielding, and deployment of 
systems to support our warfighters, our warfighters urgent 
operational needs, such as the many innovative systems that 
have been developed to counter improvised explosive devices 
(IED).
    Second is the development of advanced concepts such as the 
high-speed strike weapon that will lead to future capabilities 
for our Nation.
    Third is the transition of advanced technologies to the 
industrial base such as the adaptive versatile engine 
technology that will later be used in our acquisition programs.
    As we testified just a few weeks ago, key to the success of 
this enterprise is the talent base that it supports, and we 
have structured our Science, Technology, Engineering, and Math 
(STEM) investments and we have leveraged section 219 and other 
authorities that you provided us to train, attract, retain the 
needed scientists and researchers in these technical fields.
    While our laboratories are positioned for success today, I 
believe it is important to challenge our existing practices and 
consider new business models to position our laboratories for 
success in the future in this environment of enormous global 
competition.
    In coordination with my colleagues here today, DOD has 
launched an assessment of our laboratory enterprise to move in 
that direction. Our study will examine and compare existing 
models of R&D and transition against emerging models that other 
organizations are using to rapidly develop and transition 
technologies into new products and operational capabilities 
across the private sector. A key element of this assessment 
will be to examine the balance between the service-specific 
responsibilities and the joint effectiveness of this 
enterprise. The insights that we gain from this study will 
support the development of new models to ensure that DOD's 
laboratories remain competitive and relevant today and into the 
future. These results will be reflected in the annual strategic 
workforce plan directed by Congress.
    Madam Chairwoman, thank you for the opportunity to present 
these brief remarks, and I look forward to questions from the 
subcommittee.
    [The prepared statement of Mr. Lemnios follows:]

             Prepared Statement by Hon. Zachary J. Lemnios

    Madam Chairwoman, Ranking Member Portman, members of the 
subcommittee, I am pleased to be here today on behalf of the dedicated 
men and women of the Department of Defense (DOD) who discover, develop, 
engineer, and field the critical technologies that form the foundation 
for a secure future. I would like to thank the Members of Congress for 
your continued support of the Department's science and technology (S&T) 
program and our broader research and engineering (R&E) enterprise.\1\ 
Your steadfast support has allowed the Department to field 
technologically-based military capabilities that provide the edge upon 
which our soldiers, sailors, airmen, marines, and civilians rely.
---------------------------------------------------------------------------
    \1\ S&T is defined as the sum of basic research (6.1), applied 
research (6.2), and advanced technology development (6.3). Research and 
Engineering is S&T plus Advanced Component Development and Prototyping 
(6.4). Both S&T and R&E are activities that occur before initiation of 
formal acquisition programs.
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    I am honored to be joined today by Dr. Marilyn Freeman from the 
Army, Ms. Mary Lacey from the Navy, and Dr. Steven Walker from the Air 
Force. Their leadership has proven instrumental in ensuring our S&T 
investments provide compelling technology options and unmatched 
operational capabilities for the Department.
    We testify today regarding the important role of the Department 
Laboratories and in support of the fiscal year 2013 President's budget 
request for DOD S&T a request that has been thoughtfully prepared 
within the context of a challenging national fiscal environment. I can 
assure this committee that we are all mindful of the budget pressures 
facing our Nation. We have made a collective commitment to ensure that 
the taxpayers' dollars provided to the Department's S&T enterprise are 
invested wisely with a laser-like focus on needed capabilities for our 
National security.
    As I discuss the status of the Department's Laboratories and paths 
to an integrated laboratory enterprise, I'd like to do so in the 
context of the Department's new strategic guidance, the fiscal year 
2013 President's Budget Request (PBR) and the Department's S&T 
priorities.

                         NEW STRATEGIC GUIDANCE

    On January 5, 2012, the President released new strategic guidance 
for the Department.\2\ The strategy builds upon developing partnerships 
and global alliances and rebalances our global posture and presence to 
emphasize Asia-Pacific and the Middle East. It sets a new path for the 
Joint Force of the future \3\--a force that will be smaller, leaner, 
agile, and flexible, and rely upon advanced technical capabilities for 
mission success. The guidance outlines 10 primary missions for a 21st 
century defense, which the Joint Force must be prepared to execute. The 
Department's S&T budget request was structured in scope and content to 
support these missions.
---------------------------------------------------------------------------
    \2\ Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense, January 2012 http://www.defense.gov/news/Defense--Strategic--
Guidance.pdf
    \3\ Sustaining U.S. Global Leadership: Priorities for 21st Century 
Defense, January 2012 - cover letter from Secretary of Defense Leon 
Panetta, http://www.defense.gov/news/Defense--Strategic--Guidance.pdf
---------------------------------------------------------------------------
           FISCAL YEAR 2013 PRESIDENT'S BUDGET REQUEST (PBR)

    The fiscal year 2013 Department-wide S&T budget request of $11.9 
billion ($62 billion from fiscal year 2013-fiscal year 2017) maintains 
a strong S&T posture. The fiscal year 2013 PBR is above the fiscal year 
2011 enacted budget of $11.7 billion, and down modestly from the fiscal 
year 2012 enacted budget of $12.2 billion. The fiscal year 2013 S&T 
budget request:

         Maintains Basic Research at $2.1 billion--an 
        investment that largely supports university based research;
         Funds the Defense Advanced Research Projects Agency at 
        $2.8 billion to develop strategic concepts for the Department;
         Funds Counter Weapons of Mass Destruction S&T at $1.0 
        billion; and
         Maintains S&T funding in each of the military 
        departments at approximately $2.0 billion.

    In preparing the fiscal year 2013 S&T budget for the PBR request, I 
led a comprehensive review of the Department's R&E program elements and 
projects. This review, coupled with the Department's Strategic 
Guidance, has shaped the scope and content of the S&T budget request.
    The fiscal year 2013 PBR S&T investment rebalances and aligns 
content to support the Department's strategic guidance. For example, 
$700 million was added across the Future Years Defense Program (FYDP) 
to enhance the Joint Force's ability to operate across all domains. 
This funding is targeted to initiate an Air Force hypersonic cruise 
missile capability demonstration, accelerate the development of 
advanced electronic warfare (EW) concepts, accelerate technology 
development for the Long Range Anti-Ship Missile program, and launch 
technology development efforts in anti-jam precision guided munitions. 
Additional adjustments were made to increase funding in the 
Department's S&T priority areas of Cyber S&T, EW, Autonomy (Robotics), 
and Advanced Manufacturing by realigning funding in lower priority 
areas. The Department also increased investments in a next generation, 
high-efficiency turbine engine, the Adaptive Versatile Engine 
Technology (ADVENT), for an engineering and manufacturing decision in 
fiscal year 2014.
    The table below summarizes the fiscal year 2013 budget request.
      
    
    
      
    Today's testimony by the Department's S&T leadership provides 
additional detail on key strategic initiatives in the fiscal year 2013 
budget request. The testimony will also describe initiatives underway 
to accelerate the transition of concepts into technologies that will be 
part of future acquisition programs.

           THE DEPARTMENT'S SCIENCE AND TECHNOLOGY PRIORITIES

    In fiscal year 2010, we gathered over 200 scientists, engineers, 
operators, and subject matter experts from across the Department and 
launched a comprehensive analysis of operational architectures, 
critical capabilities, and enabling technologies to support the 
Department's current and future missions. We took a broad look at 
cross-cutting areas that would have the greatest impact to the 
Department, even as the Department's New Strategic Guidance was being 
outlined.
    That review resulted in the April 2011 announcement by Secretary 
Gates that the Department will consider seven S&T areas as key priority 
areas. These priority areas are supported in the fiscal year 2013 
budget request and provide the technical foundation for important 
future capabilities:

         Cyber S&T--The focus of cyber S&T is on the 
        development of technologies that enable system resiliency, 
        agility, and mission effectiveness across the spectrum of joint 
        operations. The research also addresses foundations of trust 
        and development of new frameworks to more thoroughly assess 
        cyber-security techniques.
         Electronic Warfare/Electronic Protection (EW/EP)--
        Pervasive advances in commercial and consumer electronics, 
        challenge conventional U.S. electronic warfare capabilities. 
        Investments in this area focus on new concepts and technology 
        to protect systems and extend capabilities across the 
        electromagnetic spectrum.
         Data-to-Decisions--The Department relies upon the 
        ability to analyze enormous data sets very quickly. Data-to-
        Decisions investments focus on investments in automated 
        analysis techniques, text analytics, and user interface 
        techniques to reduce the cycle-time and manpower requirements 
        required for analysis of large data sets.
         Engineered Resilient Systems--The technically advanced 
        systems our Joint Forces will need in the future must be 
        adaptable to operate in dynamic, and sometimes unpredictable, 
        environments. Research in Engineered Resilient Systems focuses 
        on agile and cost-effective design, development, testing, 
        manufacturing, and fielding of trusted, assured, easily-
        modified systems.
         Counter Weapons of Mass Destruction (WMD)--The 
        Department is focused on crosscutting research in countering 
        weapons of mass destruction, specifically directed at finding 
        and tracking unsecured fissile material. Research focuses on 
        the development of novel detectors and processing algorithms 
        for increased detection capabilities.
         Autonomy--The Department's investments in this area 
        are focused on developing systems that can operate in complex 
        real-world environments. Such systems will augment or 
        substitute for human operators, particularly in hazardous 
        environments, and to conduct missions that are impractical or 
        impossible for humans.
         Human Systems--This goal of Human Systems is to 
        advance the Department's technology capabilities for 
        development of system interfaces and for training of personnel 
        to increase productivity and effectiveness. Training research 
        focuses on realistic, adaptive, and interactive scenarios, and 
        persistent, affordable integrated training. Personnel training 
        research concentrates on human-machine teaming; intelligent, 
        adaptive human aiding; and intuitive interaction.

    The seven DOD S&T priorities represent an integrated effort by the 
Department to focus technical staff and budgetary resources on a set of 
primary topics important to the Joint Forces. Roadmaps are being 
developed for each S&T priority to focus near-term project investment 
portfolios and experimentation campaigns.

                   DEPARTMENT OF DEFENSE LABORATORIES

    The Department's Laboratories engage in activities ranging from 
basic research through defense system acquisition support to direct 
operational support of deployed warfighters. These Laboratories are 
comprised of dozens of facilities across 22 States, and employs tens of 
thousands of scientists and engineers, both civilian and military, 
public employees and contractors.\4\ Included are facilities known as 
research centers, systems centers, laboratories, engineering centers, 
institutes, and development centers. Each of the Military Services 
configures and characterizes its laboratories in unique ways to most 
effectively accommodate service-specific missions and organizational 
structures. The common thread through all of these facilities is 
responsibility for conducting first rate research and development 
(R&D), both in-house and through external contracts that directly 
benefit the warfighter.
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    \4\ For the purposes of this testimony, the definition of a 
Laboratory is derived from Department of Defense Instruction 3201.4 In-
House Laboratory Independent Research (ILIR) and Independent 
Exploratory Development Programs, (8 Oct 1993): Paragraph 3.2 
Definition--R&D Laboratory--a facility or group of facilities owned, 
leased, or otherwise used by DOD, a substantial purpose of which is the 
performance of research, development, or engineering by employees of 
DOD. The term ``laboratory'' is used here and throughout to apply as 
well to Warfare Centers, Research, Development and Engineering Centers, 
and other such entities.
---------------------------------------------------------------------------
    The Department Laboratories execute a substantial fraction of the 
Department's S&T accounts, particularly in budget activities 6.2 and 
6.3. In addition, they conduct substantial amounts of reimbursable R&D 
for DOD and Intelligence Community customer organizations. Altogether, 
the Department Laboratories execute approximately $30 billion annually.
      
    
    
      
    Most critical to the success of the Laboratories and their ability 
to support the Department's mission is the workforce. This workforce is 
highly educated; nine percent of the Department's scientists and 
engineers possess Ph.Ds and 26 percent hold Master's Degrees.\5\ This 
workforce maintains competence in areas of technology specific to 
military needs and includes electronics engineers, mechanical 
engineers, computer scientists and engineers, aerospace engineers, 
electrical engineers as well as chemists, physicists and 
mathematicians. These degreed scientists and engineers conduct DOD-
relevant research leading to key technology demonstrations and publish 
thousands of reports and peer-reviewed technical papers. In many cases, 
this community defines a technical field with seminal work and leads 
the industrial base in their respective areas. This enterprise is a 
unique environment for advanced technology development and concept 
incubation.
---------------------------------------------------------------------------
    \5\ Department of Defense Laboratory Civilian Science and 
Engineering Workforce--2011, ASD(R&E)/RD Laboratory Office, May 2011
---------------------------------------------------------------------------
    The Department's Laboratory infrastructure has an estimated total 
property replacement value of $38 billion and a total building 
footprint in excess of 140 million ft.\2\ The facilities include unique 
resources for design, development and testing used by both the 
Department and industry.

         The Navy's principal laboratory, the Naval Research 
        Laboratory (NRL), was founded in 1923 on the recommendation of 
        Thomas Edison and is the primary performer of the Navy's basic 
        research program. NRL possesses the only organic government 
        capability to design and build space satellites. Areas of 
        emphasis include ocean and atmospheric science, autonomous 
        systems, and materials science.
         The Army's primary provider of basic research is the 
        Army Research Laboratory (ARL) with primary sites at Adelphi 
        and Aberdeen, MD. ARL areas of expertise include life sciences, 
        network science, robotics, physical science, weapons technology 
        and warfighter protection.
         The Air Force Research Laboratory (AFRL) consists of 
        ten individual directorates located across the United States 
        with headquarters located at Wright-Patterson Air Force Base, 
        OH. The AFRL is the Air Force's primary provider for basic 
        research through advanced development for Space Vehicles, 
        Information Systems, Air Vehicles, Propulsion, Directed Energy, 
        Materials and Manufacturing, Sensors, Human Performance and 
        Munitions. The Air Force Office of Scientific Research is a 
        directorate that serves as the basic science program manager 
        for all Air Force basic science programs.

    The Department Laboratories comprise a balance of these corporate 
research laboratories, which maintain basic science as an area of 
emphasis, and engineering centers, such as the Navy Warfare Centers and 
the Army's Research and Engineering Development Centers that maintain 
the Department's in-house development and engineering expertise. The 
Services align approximately one-third of their basic science budgets 
to in-house programs. A recent review of the Department Laboratories' 
basic research programs, conducted by the Defense Science Board 
(DSB),\6\ concluded that the in-house basic research programs were 
technically strong and healthy.
---------------------------------------------------------------------------
    \6\ Report of the Defense Science Board Task Force on Basic 
Research (January 2012)
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                         TECHNOLOGY TRANSITION

    The role of the Laboratories in supporting the mission of the 
Department is critical. The Department's Laboratories rapidly develop 
and transition defense technology to the field through knowledge of 
warfighter operational needs and knowledge of developments in industry 
and academia. They provide unbiased technology expertise to the 
Department in support of policy development and systems acquisition. 
The ``products'' the Laboratories deliver can be separated into three 
categories:

         Rapid prototyping, systems development and deployment 
        to support urgent operational needs. The Department's 
        Laboratories have provided critical engineering support to 
        transition early concepts to operational use in theatre. The 
        following are a few examples of many recent transitions that 
        have had a significant impact.
          The Army Corps of Engineers Engineering Research & 
        Development Center has fielded multiple capabilities including 
        Radiant Falcon, Groundhog and Hard Impact, which provide 
        deterrence, defense and defeat of Improvised Explosive Devices.
          The Naval Research Laboratory, in response to a request from 
        deployed EA-6B squadrons supporting Operation Enduring Freedom 
        (OEF), developed and delivered improvements to Jumpstart III 
        and Stoplight III systems that provide a counter to an emerging 
        threat in OEF.
          The Air Force Research Laboratory has developed and is 
        performing operational evaluations in Afghanistan of the Sand 
        Dragon system. This 200 pound runway-independent, long-
        endurance Remotely Piloted Vehicle provides an economy of force 
        capability for route surveillance and Improvised Explosive 
        device detection.
          The Air Force Research Laboratory also developed the Anubis 
        Unmanned Aircraft Vehicle. This is a lethal weapon delivery 
        system controlled at the company or platoon level. It provides 
        an immediate, precise response to enemy fire and is 
        successfully employed in support of OEF
          The ARL's Unmanned Ground Systems were integrated into the 
        PGSS surveillance systems in support of OEF. In addition, 
        weapon surveillance systems, developed by ARL, have been 
        fielded together with Persistent Ground Surveillance System 
        (PGSS) to determine location of enemy weapon fires. There are 
        currently 59 PGSS fielded in Afghanistan.
         Advanced concepts that support the Department's 
        current or future acquisition programs. For example, the Air 
        Force Research Laboratory is continuing to mature critical 
        components that will make High Speed Strike Weapon technology 
        capabilities a reality. The program has had key demonstration 
        successes and is progressing prudently to support future 
        programs of record. Key technologies to be developed include 
        air-breathing hypersonic engines; advanced materials and 
        structures; guidance, navigation and control for GPS degraded 
        and denied environments; advanced sensors and seekers; and 
        selectable effects warheads.
         In another example, the Office of Naval Research supported, 
        the Electromagnetic Aircraft Launch System was developed and 
        demonstrated jointly by the Naval Air Warfare Center Aircraft 
        Division, Lakehurst, NJ, and General Atomics. This technology 
        was in turn transitioned to General Atomics as the lead 
        contractor for installation of this new aircraft launch system 
        in the Gerald R. Ford Aircraft carrier (CVN-78).
         Transition of advanced technologies to the industrial 
        base for use on current or future acquisition programs. For 
        example, the Air Force's ADVENT program is developing multi-
        design-point engine technologies that will provide optimized 
        fuel efficiency of up to 25 percent and performance 
        capabilities over a wide range of flight regimes. This 
        investment will help maintain a competitive industrial base in 
        turbine engine technology, an area critical to our future 
        military capability.

    In response to specific requirements and operating models, each of 
the Services has established a unique approach to technology 
transition. The headquarters of AFRL is co-located with Air Force 
Material Command, the organization responsible for their acquisition 
programs. This proximity ensures that personnel are able to work 
closely together. Laboratory personnel serve as subject matter experts 
to program managers and program executive officers (PEO) and provide 
support for technology development, requirements generation, and system 
deployment.
    The Army has taken a similar approach by colocating PEOs and 
acquisition program managers at each of the Research and Development 
Centers to tightly couple advanced technology development programs with 
the acquisition process. The Navy's Future Naval Capability program 
integrates senior leadership, PEOs, industry and their laboratories in 
the rigorous identification of technology requirements, program 
development and technology transition into programs of record.
    Integration of the Defense Laboratory Enterprise is performed by 
Defense Laboratory Office within the Office of the Assistant Secretary 
of Defense for R&E. This office works closely with each of the Services 
in the development and deployment of policies governing the enterprise. 
It is an entry point for the Department of Energy (DOE) National 
Laboratories, Federally Funded Research & Development Centers (FFRDC) 
and University Affiliate Research Centers (UARC).
    The Department has a broad and growing engagement with industry and 
academia to promote stronger transition paths. The basic research 
activities of the corporate laboratories facilitate relationships with 
academia and the much broader global research community. Relationships 
formed through basic science programs ensure our technology base is 
well-versed in the latest technology developments and provide a conduit 
for new ideas and innovations to flow into our Laboratories and 
advanced development programs. This coupling results in a robust path 
to mature basic research concepts to deployed weapon systems.
    The Department's mechanisms for industry engagement include 
Cooperative Research and Development Agreements (CRADAs), which allow 
industry and universities to leverage the resources of the Laboratories 
to develop jointly owned intellectual property. In fiscal year 2009, 
the Department engaged in approximately 2,900 CRADAs. In this same 
year, the Department's Laboratory staff filed 831 invention 
disclosures, 690 patent applications, were issued 404 patents and 57 
new inventions licensed. CRADAs, and licensing of intellectual property 
open transition path to bring ideas into the Department, and an 
opportunity to transition concepts developed in Department Laboratories 
to commercial use.
    In addition to engagement with industry and academia, the 
Department is assessing the capabilities and resources of other Federal 
organizations to identify areas for increased collaboration. DOE's 16 
National Laboratories represent a $29 billion investment in energy and 
weapons S&T and development. The Department is identifying DOE 
capabilities, which can be leveraged for future DOD mission support. 
This relationship is formalized in the DOD, DOE, Department of Homeland 
Security (DHS) and Director of National Intelligence Governance 
Charter, which is expected to promote an increase in the level of 
partnership and joint activities between our respective organizations. 
The DOD/DOE Joint Munitions Program, which has resulted in the 
development of next generation weapons concepts, is a framework for 
future interagency engagement.

                 STRENGTHENING THE LABORATORY WORKFORCE

    The laboratory talent base represents a unique repository of core 
capabilities upon which the Department relies. The market for 
recruiting technical talent in the United States is challenging. DOD 
competes not only with industry and academia, but also with other 
government departments and agencies. Still, the DOD remains competitive 
in its ability to hire talented students and technical professionals 
into the Defense Laboratory workforce largely because the DOD 
environment provides opportunities that are not available anywhere else 
in the world, e.g., working side-by-side with world renown 
professionals; working in world-class facilities; or being part of a 
team that invents solutions to the challenges facing our national 
security. For areas where other agencies have a deeper technical base, 
we look to leverage that expertise, as illustrated by the Department's 
forging of a stronger relationship with the DOE. We have also partnered 
with the Intelligence Community and the DHS to extend our talent base 
and support Department objectives.
    The Department continues to use the three key initiatives, 
supported by Congress, to attract and retain a highly-skilled 
workforce.

         S&T Reinvention Laboratory statutory authorities 
        (STRL, also known as ``Demonstration Lab'') provide Laboratory 
        Directors with flexibility and tools for direct hiring of 
        highly qualified graduates, training of technical personnel and 
        pay for performance to retain the best and brightest 
        performers. Under STRL, Laboratory Directors can send 
        scientists and engineers to graduate schools for advanced 
        degrees and specialized training courses and thereby retain a 
        leading edge skill set.
         Section 219 authorities: The National Defense 
        Authorization Act for Fiscal Year 2009 authorized laboratory 
        directors to use up to 3 percent of available funds for the 
        purpose of technology development, supporting the transition of 
        technology developed by the lab, workforce development and 
        minor construction for enhancement of laboratory capabilities. 
        This discretionary investment program is expected to reach $150 
        million this fiscal year, with each of the Services executing a 
        vigorous investment program in workforce training, developing 
        high risk high pay-off technologies, transitioning technology 
        to programs of record and addressing minor construction needs.
         The Office of the Assistant Secretary of the Navy (Research, 
        Development and Acquisition) established the Naval Innovative 
        Science and Engineering (NISE) program to implement Section 
        219. The fiscal year 2011 NISE program had a $48.9 million 
        funding level from Research, Development, Test, and Evaluation 
        (RDT&E) Navy programs (BA1 through BA7) and was executed by 15 
        Department of Navy Laboratories as a mechanism to revitalize 
        their Laboratories and rebuild their world class capabilities.

    The NRL's continuation of the Jerome and Isabella Karle 
Distinguished Scholar Fellowship (the ``Karles Fellowship'') is another 
example of a Navy Section 219 effort. This program provides hiring of 
highly accomplished scientists and engineers at any degree level within 
1 year of receiving their degree and will provide funds to pay their 
salaries for 2 years.
    The AFRL fiscal year 2011 section 219 program had a total of 
$58.077 million for its budget. Of this budget, $36.658 million 
supported 36 basic and applied research programs. This research 
included examinations of ionospheric impacts on the Global Positioning 
System (GPS), cyber vulnerability identification and mitigation, and 
expendable thermal energy storage materials for high power directed 
energy weapon systems.
    The AFRL used the $7 million of the authority to transition 10 
technologies into operational use. These programs included improvements 
to air drop operations, autonomous vehicle prototyping, and development 
of expeditionary airfield technology. Workforce development activities 
accounted for 26 programs that cost $5.375 million. Activities include 
scholarships and grants for graduate, undergraduate, and high school 
students, teachers, and professors in the science, technology, 
engineering, and mathematics research realms. Six recapitalization and 
revitalization projects were supported by $9.044 million. Facilities 
that received funding included an advanced high power microwave 
research facility, the Maui Space Surveillance Complex, and Fuze 
Industrial Research Facility, and the Combustion Instability 
Laboratory.
    The ARL directors executed the implementation plan for section 219 
with seven Laboratories participating in fiscal year 2011 and have 
additional laboratories anticipated to participate in fiscal year 2012. 
The Army Laboratories invested $53.5 million funds from a total of $2.4 
billion in fiscal year 2011 funding as described by section 219. These 
activities included $20.8 million for infrastructure improvements, 
$17.5 million for innovative in-house Basic and Applied Research, $13.2 
million for Workforce Retention and Development, and $1.7 million for 
Transition of Technology Development.
    The Science, Mathematics, and Research for Transformation (SMART) 
Scholarship for Service Program has shown great potential in attracting 
tomorrow's talent to the Department Laboratories. SMART is an 
opportunity to increase the number of civilian scientists and engineers 
in Department Laboratories by supporting undergraduate and graduate 
students who are pursuing degrees in STEM disciplines and then offering 
laboratory positions upon degree completion.
    Since its inception in 2005, the SMART program has engaged over 270 
institutions of higher learning and research organizations and has 
transitioned more than 430 young scientists and engineers into the 
Department. Overall, the SMART program benefits the Department and 
SMART scholars alike. SMART scholars receive a scholarship and a long- 
and full-term training, internships, and access to mentors from their 
respective fields. Our benefit is that the DOD's S&T mission is 
positively impacted by some of the best and brightest scholars, 
initially during their schooling and afterwards, when they begin a 
career in the Department.

           MOVING TOWARDS AN INTEGRATED LABORATORY ENTERPRISE

    In the 1950s, the Department led the R&D agenda for the Nation in 
areas ranging from aerodynamics and computation to advanced materials 
and microelectronics. Each of the Department's Laboratories was formed 
to support Service-specific needs and, through multiple realignments, 
each has evolved into a footprint of its own. Still today, these 
Laboratories have proven successful in providing technology solutions 
rapidly to the field, as well as in transitioning technology to 
industry.
    To ensure that the Department's laboratories remain relevant in the 
future environment where technology is increasingly globalized and new 
opportunities as well as threats emerge at an accelerated pace, the 
Department is launching an assessment of the current Department 
laboratory enterprise. The purpose of this assessment is to provide 
recommendations from acknowledged business management experts regarding 
the best options for operation of this enterprise. The assessment will 
consider the current models for in-house RDT&E against emerging models 
for innovation in academia, the industrial base, to include the small 
business community used to rapidly develop transition emerging 
technologies into new products or operational capabilities. The 
Department intends to specifically consider the long-term vision for 
the Enterprise, its role within the larger defense community, including 
FFRDCs and UARCs, the technical quality of the Laboratories and their 
workforce and operational models that promote technology transition. A 
key element of the assessment is to examine the balance between the 
laboratory responsibilities under U.S.C. Title 10 and the overarching 
integrated needs of the Department.

                               CONCLUSION

    The Defense laboratory enterprise is critical to our continued 
ability to support the mission of the DOD and our national security. 
The Department Laboratories are uniquely suited to couple basic 
research concepts to early-use military applications and represent 
critical technical capability to address operational challenges. The 
Department is committed to shaping an Integrated Laboratory Enterprise 
to continue to provide this resource and meet the challenges of an 
increasingly globalized environment. Key to this integration is a 
talent base of scientists and engineers with the credentials, 
experience and resources to provide the Department with capabilities 
and new models to quickly transition those solutions to industry and 
the warfighter. I appreciate your continued support of our S&T efforts 
and I look forward to answering your questions.

    Senator Hagan. Thank you, Secretary Lemnios.
    Dr. Freeman?

STATEMENT OF DR. MARILYN M. FREEMAN, DEPUTY ASSISTANT SECRETARY 
            OF THE ARMY FOR RESEARCH AND TECHNOLOGY

    Dr. Freeman. Thank you, Chairwoman Hagan and Ranking Member 
Portman and distinguished members of the subcommittee. I really 
do appreciate this opportunity to discuss the status and health 
of the Army's S&T enterprise and the significant role of S&T in 
supporting the warfighter.
    I have submitted a written statement and ask that it be put 
into the record.
    I want to thank the members of the subcommittee for your 
important role in supporting our soldiers who are at war and 
for your advocacy of the Army's S&T investments that will 
sustain technological preeminence to our future soldiers. Your 
continued support is vital to our success.
    My vision for Army S&T is to invent, innovate, and 
demonstrate technology-enabled capabilities that empower, 
unburden, and protect our soldiers. I hear often from the 
soldiers themselves that technology saved their lives and was 
critical to their remarkable accomplishments. For this reason I 
believe it is necessary for the Army to maintain a strong Army 
laboratory system.
    Our current S&T enterprises comprise over 22 labs and 
centers spanning 5 commands and located throughout the United 
States. These labs and centers are home to 19,000 dedicated 
Federal civilians who are the core of the enterprise. By 
employing a world-class cadre of scientists and engineers, 
technicians, analysts, and administrative support and providing 
them with the facilities and infrastructures necessary to 
accomplish their mission, we can ensure that the Army has the 
ability to address the specific challenges faced by our 
soldiers.
    Now, it is my job as Deputy Assistant Secretary of the Army 
for Research and Technology to plan for the long-term health of 
Army S&T, and I believe that there are three critical areas to 
our long-term success. The first is people. The second is 
infrastructure and facilities, and the third is programs.
    While I believe that we are generally well-positioned to 
weather the current budget climate, I do have major concerns 
with the long-term health of our S&T enterprise. I will briefly 
highlight some of these concerns.
    People are the Army's most valuable resource. Without the 
skills and the dedication of the scientists, engineers, 
technicians, and support staff comprising our workforce, the 
Army R&D enterprise would be in serious trouble. We are 
grateful to Congress for making permanent the direct hire 
authority for people with advanced degrees. This, along with 
the Laboratory Personnel Demonstration Project, allows us to 
attract great new talent. Science, Mathematics, and Research 
for Transformation (SMART) scholarship for service program also 
provides opportunities for us to improve the flow of new 
highly-skilled technical labor into our DOD facilities and 
agencies to enhance the technical skills of the workforce 
already in place.
    But as mentioned before, in the difficult budgetary times 
ahead, we will have to find ways to ensure that we can retain 
these new recruits, avoiding the tendency to employ last-in/
first-out mentalities should we need to reduce manpower. We 
also need to find ways to bring in more veterans and others who 
may not have advanced degrees but have essential experience and 
skills needed for our workforce.
    While I fully understand the reality of our budget 
situation, we must guard against using S&T as a billpayer. I am 
concerned that S&T will take a disproportionate share of 
personnel cuts should we have to reduce manpower. Such a loss 
of talent could have devastating consequences for the Army.
    Now, world-class scientists and engineers require better 
than adequate infrastructure and facilities to accomplish their 
mission. Within our S&T enterprise, we have roughly 2,000 
facilities. Of these, 1,143 are within the continental United 
States. We do have a lot outside the continental United States. 
To give an indication of the extremes, we currently have one 
building that was constructed in 1828 to several buildings 
currently under construction. Approximately 72 percent of the 
facilities are over 25 years old and 48 percent are greater 
than 50 years old. It is also important to note that not only 
do our facilities support our Army researchers, but many of our 
facilities also are highly leveraged by industry.
    While we have made some improvements to our infrastructure 
and lots of improvements in facilities through the Base 
Realignment and Closure (BRAC) process, congressional adds, and 
the minor military construction (MILCON) authorities provided 
by Congress, we do not have a good long-term solution to the 
problem of aging facilities. We have recently completed an 
inventory in the Army of our S&T facilities and are currently 
developing a plan to have facility experts inspect nearly 1,000 
of our buildings. This will allow us to develop a comprehensive 
priority list and hopefully help get construction resources to 
where they are most needed. It is my intent--and I have talked 
with her about it--to work with the Assistant Secretary of the 
Army, Installations, Energy, and Environment, to find ways to 
address this and other infrastructure and facilities issues.
    With respect to programs, I believe that the 2013 budget 
request submitted to Congress provides correct levels of 
investment for our enterprise.
    So in conclusion, these are exciting and challenging times 
for Army's S&T program. We are changing the S&T business model 
to be an enduring, sustainable, successful enterprise and 
aligning our strategic planning to the budget process to 
achieve efficient, top-down S&T leadership investment focus. I 
look forward to working with Congress to ensure that we can 
maintain a world-class S&T workforce supported by world-class 
infrastructure.
    I would like to thank you for the opportunity to testify 
before the subcommittee and for your support to our Army's S&T 
investments. I am proud to represent the efforts of over 19,000 
dedicated Army civilians and employees to providing soldiers 
with world-class technology-enabled capabilities. I am pleased 
to take your questions.
    [The prepared statement of Dr. Freeman follows:]

               Prepared Statement by Dr. Marilyn Freeman

    Madam Chairwoman and members of the subcommittee, thank you for the 
opportunity to discuss the Army's laboratory system, and some of the 
concerns I have with sustaining the health of our enterprise.
    The Army's Science and Technology (S&T) community has had, and will 
continue to have, a significant role in supporting the warfighter. We 
have consistently delivered technology-enabled solutions needed for 
recent conflicts and we are committed to developing technologies that 
will enhance the Army's capabilities, which will be needed to prevent, 
shape and win future conflicts in an uncertain, complex world. We are 
grateful to the members of this committee for your sustained support of 
our soldiers, your support of our laboratories and centers (and the 
technically excellent work force resident within them), and your 
continued commitment to ensure that funding is always available to 
provide our current and future soldiers with the technology that 
enables them to defend America's interests and those of our allies 
around the world.
    The overarching vision for Army S&T is to invent, innovate and 
demonstrate technology enabled capabilities that empower, unburden and 
protect our soldiers. Based on the past decade of war we know that 
technology makes possible dramatic success both in direct combat and in 
all other missions that our soldiers must conduct in the various 
theaters of operation.
    I hear often from the soldiers themselves that technology saved 
their lives and was critical to their remarkable accomplishments. This 
feedback motivates our scientists and engineers, who use the funding 
provided by Congress, to research, mature, and develop advanced 
technologies--from armor to combat casualty care, from air vehicles to 
ground vehicles, from food to uniforms, from small arms to missiles, 
and from communications to training. They apply their accumulated 
knowledge and expertise, experimental data, and innovative products to 
solve problems, enhance performance, provide new desired capabilities, 
and forecast what capabilities are within the realm of the possible for 
our Army. Army S&T is committed to providing technologies to keep our 
decisive edge against adaptive enemies.
    It is necessary for the Army to maintain a strong Army laboratory 
system. Our current S&T enterprise comprises 22 labs and centers 
spanning 5 commands, and located throughout the United States.\1\ These 
labs and centers are home to roughly 19,000 \2\ dedicated Federal 
civilians who are the core of the enterprise. By employing a world 
class cadre of scientists, engineers, technicians, analysts, and 
administrative support and providing them with the facilities and 
infrastructure necessary to accomplish their mission, we can ensure 
that the Army has the ability to address the specific challenges faced 
by soldiers.
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    \1\ The Army S&T Enterprise consists of the following laboratories 
and Research, Development, and Engineering Centers (RDEC) within five 
major commands: Army G-1 (Army Research Institute for the Behavioral 
and Social Sciences); Engineer Research and Development Center (Coastal 
and Hydraulics Lab, Cold Regions Research and Engineering Lab, 
Construction Engineering Research Lab, Environmental Lab, Geotechnical 
and Structures Lab, Information Technology Lab, and Topographic 
Engineering Center); Medical Research and Material Command (Aeromedical 
Research Laboratory, Institute for Surgical Research, Medical Research 
Institute of Chemical Defense, Medical Research Institute for 
Infectious Diseases, Research Institute of Environmental Medicine, 
Walter Reed Army Institute of Research); Research, Development, and 
Engineering Command (Army Research Laboratory, Armaments RDEC, Aviation 
and Missile RDEC, Communications and Electronics RDEC, Edgewood 
Chemical and Biological Center, Tank and Automotive RDEC, and Natick 
Soldier RDEC); and Space and Missile Defense Command (Space and Missile 
Defense Technology Center)
    \2\ The personnel data represented here and the remainder of the 
document are a tabulation of input received from the laboratories 
representing fiscal year 2010.
---------------------------------------------------------------------------
    It is my job as Deputy Assistant Secretary of the Army for Research 
and Technology (DASA(R&T)) to plan for the long-term health of Army 
S&T. I believe that there are three areas critical to our long term 
success: (1) People; (2) Infrastructure and Facilities; and (3) 
Programs. While I believe we are generally well-positioned to weather 
the current budget climate, I do have major concerns with the long term 
health of our S&T enterprise.

                                 PEOPLE

    People are the Army's most valuable resource. I am proud to 
represent our S&T workforce comprising government civilian scientists, 
technicians, engineers, wage grade workers, and support personnel, as 
well as soldiers and contract personnel who offer a wide array of 
specialties and abilities that allow Army S&T labs and centers to cover 
the full spectrum of research, engineering and operational support for 
the Nation, especially the soldier.
    Developing and maintaining the world-class cadre of scientists, 
engineers, and technologists requires a four-phased approach:

    (1)  using the hiring, evaluation and retention authorities 
associated with the laboratory personnel demonstration program to 
recruit and retain a highly qualified, success oriented, and dedicated 
workforce,
    (2)  growing existing workforce capabilities through exchange 
programs and other authorities that provide for workforce development 
to help us maintain a vibrant, agile, well-educated cadre of Scientist 
and Engineers,
    (3)  investing in research initiatives at the college and graduate 
school level to provide focus and generate expertise for the next 
generation of Army researchers, and
    (4)  investing in educational outreach initiatives to build a 
diverse, Science, Technology, Engineering and Math (STEM) capable 
talent source for the future workforce.

    Today in the Army's S&T workforce there are approximately 12,000 
scientists and engineers (S&Es). Approximately 45 percent hold Masters 
Degrees or Ph.Ds, 15 percent are women, 17 percent are African 
American, and 14 percent Asian. Figure 1 shows the Army's demographics 
for years of S&E service:
      
    
    
      
    We have been able to stem the bow wave associated with the 
potential loss of senior S&Es by hiring initiatives over the last 
decade; however, given the current climate, we anticipate having to 
reduce or refrain from hiring.
    As noted in a 2008 National Defense University Study:

          ``The growing tendency to view the in-house S&E workforce as 
        just another set of performers suggests the absence of an 
        understanding of why DOD (or the government) maintains in-house 
        competence in science and engineering. In the absence of such 
        an understanding, the competitive model provides a means to 
        determine what the in-house workforce will do and at what level 
        it will be funded. While the competitive model is very 
        effective at making such determinations, it is not well suited 
        as a tool for running the government. It hopelessly blurs the 
        distinction between what is public and what is private, it puts 
        the government in the awkward position of being in direct 
        competition with its citizens, and it compromises the 
        objectivity that the public should expect and demand of its 
        government.'' \3\
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    \3\ Timothy Coffey, ``Building the S&E Workforce for 2040: 
Challenges Facing the Department of Defense.'' Center for Technology 
and National Security Policy, National Defense University, July 2008, 
page 18.

    I am concerned that in this period of severely constrained budgets 
that will carry with it potential for manpower reductions, our S&T 
workforce may be expected to carry a disproportionate share of the 
reductions. A disproportionate loss of science and engineering talent 
could have devastating consequences for the Army. Our laboratory 
workforce is funded from many accounts--S&T (6.1-6.3 direct funding), 
acquisition (6.4 and 6.5 reimbursable funding), and funding from other 
government agencies (customers such as the Defense Advanced Research 
Projects Agency (DARPA), the Defense Threat Reduction Agency, and the 
Defense Health Program). In order to ensure that the science and 
engineering workers are able to meet the needs of the soldiers, we must 
ensure that any reductions in manpower are assessed against the 
workload and funding available.
    We are grateful to Congress for making permanent to the 
laboratories the Direct Hire Authority for people with advanced 
degrees. This, along with the Laboratory Personnel Demonstration 
Project, allows us to attract great new talent.
    The Science, Mathematics and Research for Transformation (SMART) 
Scholarship for Service Program also provides opportunities to improve 
the flow of new, highly-skilled technical labor into DOD facilities and 
agencies to enhance the technical skills of the workforce already in 
place. SMART offers scholarships to undergraduate, masters, and 
doctoral students who have demonstrated ability and special aptitude 
for excelling in STEM disciplines. Students are provided opportunities 
to continue their research in civil service roles following graduation. 
The Army has been participating in SMART since 2008. In 2011 the Army 
brought on 287 SMART awardees (259 in the category of new hires and 28 
workforce retention candidates).
    Some other personnel issues include losing top talent to industry, 
and either regional market shortages of certain types of employees or 
salary competition with regional industry.
    But, in the difficult times ahead, we will have to find ways to 
ensure that we can retain these new recruits, avoiding the tendency to 
employ ``last in/first out' mentalities should we need to reduce 
manpower
    Despite the many challenges, we have an amazing group of young 
scientists and engineers to serve as role models for the next 
generation. In 2011, Dr. Tad Brunye, from the Natick Soldier Research, 
Development and Engineering Center Cognitive Science researcher and Dr. 
Reuben Kraft, from the Army Research Laboratory were named by President 
Obama as Outstanding Early Career Scientists. The Presidential Early 
Career Awards for Scientists and Engineers are the highest honor 
bestowed by the U.S. Government on science and engineering 
professionals in the early stages of their independent research 
careers, and we are lucky to have researchers like Dr. Brunye and Dr. 
Kraft to mentor the next generation.
    Army S&T contributes to the future success in STEM education with a 
cohesive, coordinated, set of K-12 programs under the Army Educational 
Outreach Program (AEOP). In the 2010-2011 AEOP received over 15,592 
student online applications, engaged nearly 27,000 students as well as 
984 teachers, involved 141 universities, and utilized the talent and 
time of many of our Army scientists and engineers.

                     INFRASTRUCTURE AND FACILITIES

    World class scientists and engineers require better than adequate 
infrastructure and facilities to accomplish their mission. Within our 
S&T enterprise we have 2,196 facilities. Of these, 1,143 are within the 
continental United States. To give an indication of the extremes, we 
currently have one building constructed in 1828 to several buildings 
currently under construction. Approximately 72 percent of the 
facilities are over 25 years old and 48 percent are greater than 50 
years old. Figure 2 shows a histogram of the number of buildings and 
the decade in which construction was completed.
    It is also important to note that not only do our facilities 
support Army researchers, but many of our facilities are highly 
leveraged by industry. All industrial or government developed 
technologies submitted for Network Integration Rehearsal/Network 
Integration Evaluation are required to come into our Command, Control, 
Communications, Computers, Intelligence, Surveillance and 
Reconnaissance System Integration Laboratory at Aberdeen Proving 
Grounds, (APG) for instance.
      
    
    
      
    Our infrastructure (the buildings and associated mechanical systems 
such as heating, air ventilation, and cooling (HVAC), et cetera) and 
facilities (the specialized laboratories and equipment housed within) 
are in critical need of modernization. Infrastructure and facility 
costs fall essentially into three categories: Sustainment, Restoration 
and Modernization (SRM); Operations; and Mission Specific Requirements. 
SRM and Operations are planned, programmed and executed by the 
Installation Management Command (IMCOM). Costs for SRM and Operations 
are assessed at the installation level, but, not broken out by tenant 
or, in our case, lab or center. Therefore, the actual costs associated 
with operating, maintaining and improving our laboratory infrastructure 
and facilities is not identified explicitly nor reflected in the 
funding distribution models.. The Common Level of Support (CLS) 
provided under IMCOM regulations falls short of providing the services 
and upkeep needed in a high-tech laboratory enterprise. At every 
laboratory or center we use a significant amount of our RDT&E dollars 
to supplement CLS.
    We have calculated that our largest command, RDECOM should be 
receiving significantly more benefit from SRM than it is, based on the 
Office of the Secretary of Defense Facility Budget Model. For example, 
at APG the model indicates that we should have received approximately 
$24.5 million per year but in fiscal years 2010-2012, we received only 
$5.2 million.
    As the IMCOM budget is subject to constraints and the cost of 
installation management is subject to outdated models apportioning 
funds to SRM needs, we anticipate that the laboratories and centers 
will have to continue investing a significant amount of RDT&E dollars 
to maintain and operate our infrastructure and facilities at the levels 
required to conduct our mission.
    This problem is often magnified by Defense Base Realignment and 
Closure (BRAC) Commission process. For example when Fort Monmouth was 
closed and the majority of the workforce transferred to APG, funding 
for CLS at APG remained the same.
    In the past 10 years, five construction projects in the S&T 
enterprise have been funded through the MILCON process. If we discount 
the MRMC Defense-wide MILCON projects, the amount of Army MILCON 
invested in the S&T is $61 million.
    Building VB1 at the Space and Missile Defense Command Technical 
Center was constructed using a mix of programmed MILCON funding and 
Congressional Add funding. The Medical Research and Materiel Command 
(MRMC) received funding for three major projects through the Defense-
wide MILCON account, and one in Defense-wide Unspecified Minor Military 
Construction. All other infrastructure and facilities improvements 
across our complex have been achieved through the use Congressional 
Adds or mission RDT&E funds through the minor military construction and 
``Section 219'' authorities. In the last decade, there was $1,211 
million in MILCON, $1,011 million in the BRAC process, and $235.5 
million in Congressional Adds.
    In addition, infrastructure improvements such as revitalization and 
recapitalization projects utilizing Section 219 funds accounted for 
$20.88 million in the past fiscal year. Eleven projects were completed 
including laboratory renovations and instrumentation upgrades that 
directly supported core competency areas within the respective 
laboratories. Critical infrastructure needs included the upgrade and 
modernization of administrative spaces, upgrade and acquisition of 
internal technical infrastructure, ventilation of weapons system spaces 
to reduce down time, HEPA filters and sand filtration systems, HVAC 
upgrades in energetic laboratory, and unexploded ordnance clearance of 
a 1950s vintage range.
    Protecting the facilities and equipment we currently have is now 
our highest priority. If you visit some of our labs and centers, you 
can see examples of specialized, expensive equipment being protected 
from leaking roofs and HVAC systems by sheets of plastic. We are 
working with air handlers past their useful life, switch gear past 
their useful life and made by companies no longer in business, and 
aging piping systems for plumbing, roofs and HVAC systems. Many 
buildings are simply deteriorating as 48 percent of the inventory is 
greater than 50 years old. Some 11 percent are 75 years and older. I am 
including with my testimony some pictures of deteriorating conditions, 
which I would ask be submitted for the record.
    Making improvements to our infrastructure and facilities like this 
at the margins is not a long-term solution. In order to develop a 
comprehensive plan to modernize both our infrastructure and facilities, 
I am currently undertaking an in-depth assessment of what we have now. 
My office has recently completed an inventory of all Army laboratory 
facilities and in consultation with facilities experts and the U.S. 
Army Corps of Engineers we are developing a Statement of Work for a 
team to inspect the roughly 1,000 Army S&T facilities. While I 
appreciate the specific authorities provided by Congress in recent 
years, the fact of the matter is they will not come close to addressing 
a problem of this magnitude.
    I intend to work with the Assistant Secretary of the Army 
(Installations, Energy, and Environment) to find ways to address all 
the issues cited in this section.

                                PROGRAMS

    One of my first priorities, when I became DASA(R&T) a year and a 
half ago, was to change the perception that Army S&T was irrelevant--
and this remains one of my top goals. I embarked on a path to: (1) 
provide a discipline and structure to the way we plan and execute our 
S&T programs; (2) develop effective partnerships with key stakeholders, 
leaders and Users across traditional organizational stovepipes; and (3) 
better synchronize our programs with the priorities of the Secretary of 
the Army, the Army Force Generation plan, and the fiscal processes of 
the Department of Defense (DOD). This path is leading to a significant 
change of the S&T culture and it is still a work in progress.
    Over the past year we have developed several management initiatives 
to emplace a structure and set of tools, which will enable us to be 
successful in delivering capabilities to the warfighter, and to develop 
a balanced portfolio based on prioritized needs and desired advanced 
capabilities. The first initiative was to restructure the way we think 
of and articulate the S&T program. We established a set of S&T 
Portfolios. The portfolio construct allows us to focus more on the 
desired capabilities for the domains in which the Army operates than on 
the color of money in various commodity stovepipes. The main S&T 
portfolios are: Soldier; Ground; Air; and Command, Control, 
Communications and Intelligence (C3I). We also have a Basic Research 
portfolio. These align closely to the Army's capability portfolios. Our 
intent is to be able to show how our S&T programs and products support 
the Army's Capability Portfolio Review process. We are also integrating 
our efforts with DOD's seven S&T priorities.
    The second initiative was to increase active engagement of the Army 
Leadership (Headquarters Department of the Army, the Training and 
Doctrine Command (TRADOC), the Acquisition community and the major 
commands) in activities that establish real priorities for Army S&T.
    The third initiative was to focus on better, more comprehensive 
program planning. By doing more concepting, detailed schedule planning, 
and realistic program cost estimates before embarking on a path of 
research and development, we can better articulate the objectives of 
our programs, show the value of them, and track transitions to help us 
measure success.
    Today I am proud to report to you that there has been a great deal 
of forward progress. We have built a much stronger partnership with 
Army Leadership, the Acquisition Executives and TRADOC. In the past 
year, we established a strategic program planning process with 
participation of both our key partners and S&T leaders across all the 
laboratories and centers. Collaboratively we developed and validated 
the first (ever) set of S&T priorities to focus our near term research 
and development efforts. We started by generating a list of seven 
problems that soldiers and Small Combat Units are grappling with today 
and for which they will continue to need better solutions over the next 
several years. Then we collaboratively developed a set of challenges 
associated with those problems--24 in all--to be used by the S&T 
community to plan programs that will address them or solve them by the 
end of fiscal year 2017.
    The problems and associated challenges constitute a fundamentally 
new approach to planning and managing our S&T investment. In this first 
year we concentrated on the top 10 challenges, selected by Senior Army 
Leadership. The laboratories and centers teamed up to develop the first 
Technology Enabled Capability Demonstration (TECD) programs. Typically 
a TECD will mature and bring together several new technologies, couple 
them with existing systems/technologies, and demonstrate integrated 
technology-based solutions that either measurably enhance performance 
and effectiveness of an existing capability or enable a new and 
necessary capability. Nine TECD programs were formulated and approved 
in this first round. Most of the nine new TECD programs will begin in 
fiscal year 2013 and funding for them is reflected in our fiscal year 
2013 budget request. The community has already begun collaboratively 
planning the set of 15 remaining programs that will be brought forward 
to Army leadership for validation within this fiscal year. We will be 
addressing any shifts in the budget required to accomplish this second 
set of TECDs in the fiscal year 2014 budget cycle.
    My goal is to have approximately 50 percent of the Army's Budget 
Activity (BA) 3 funding dedicated to TECDs. We will be scrutinizing 
these programs constantly; requiring their Technology Program Managers 
(TPMs) to focus on cost, schedule, and transition of deliverables; and 
we will be generating new problems/challenges as necessary to respond 
to the changing needs of our soldiers.
    TECDs are focused on near term Army priorities. They are a good 
first step. But, in order to maintain a balanced portfolio, we must 
also have clearer priorities for the mid and far term investments. 
Therefore, this year we are also working to define and develop a set of 
programs to meet the mid-term needs of the Acquisition community. 
Having these needs identified and then prioritized by leadership will 
enable us to better focus the remainder of our BA 3 dollars and a 
portion of our BA 2 dollars on near- to mid-term solutions to critical 
emerging needs. Simultaneously, we are identifying technologies that 
have high potential to ``Bridge Gaps'' or achieve ``Leap Ahead'' 
capabilities. If we lead the way in developing a set of critical 
technologies in our BA 2 and BA 3 programs at the same time when 
acquisition programs may be slowing down due to budget constraints, we 
believe that we will be better positioned for the future. We are 
thinking of calling these programs Science and Technology Enabling 
Programs (STEPs). Finally, we are going to establish a set of 
priorities for Basic Research. It is my goal to use the collaborative 
processes (similar to those used to create the TECDs) to get clear 
priorities, problems and challenges against which better programs can 
be formulated and executed to achieve the most advanced capabilities 
possible, as soon as possible, with the resources you make available to 
us.
    As we shift to a priority based, programmatically managed, more 
collaborative S&T culture within the Army, our scientists and engineers 
have not stopped working the existing efforts across the entire 
spectrum of the funding lines and the technology areas. Even as they 
are taking on the new challenges I have given them, they continue to 
deliver on projects that research, mature and demonstrate needed 
technology devices, components and subsystems--many of which will feed 
future STEPs or TECDs. Many of our major efforts will be described 
later in this testimony.

                  THE FISCAL YEAR 2013 BUDGET REQUEST

    I believe the fiscal year 2013 budget request submitted to Congress 
provides the correct levels of investment for our enterprise. Our S&T 
program request for BA 1-3 for fiscal year 2013 is $2.2 billion--a 3.2 
percent decrease from our fiscal year 2012 request. BA 3 programs 
decrease by $86 million, while BA1 and BA2 programs increase by $7 
million and $6 million, respectively.
    In fiscal year 2013, the Army is placing increased emphasis (and 
investment) on ground and aviation vehicle survivability, research in 
focal plane arrays, and alternative fuels for ground vehicles. We will 
accept some greater risk (reducing funding) in lethality, unmanned/
autonomous ground vehicles, and military engineering. As we adjust to 
an era of decreasing or flat budgets, Army S&T must be capable of doing 
more with less and correctly managing the risk associated with 
shrinking budgets by identifying and focusing on the highest priorities 
for the future. I believe that the S&T management strategy, described 
previously, allows us to do just that.
    In fiscal year 2013, we requested $386.1 million for our soldier 
portfolio, $626.9 million for our Ground Portfolio, $141.3 million for 
our Air Portfolio and $323.0 million for our C3I Portfolio. We also 
requested $444.1 million for Basic Research.
    In the request, there is $14.0 million for the BA4 Technology 
Maturation Initiatives line, which was established in fiscal year 2012 
to better enable the Army to meet the goal of ensuring competition 
while maturing S&T efforts to Technology Readiness Level (TRL) 6 or 
higher prior to Milestone B in support of the Weapons System 
Acquisition Reform Act of 2009. Funding in this line is expected to 
help us cross the ``valley of death'' for some high potential 
technologies or subsystems.
    To make the decisions concerning which efforts should be funded 
with this precious resource, we established an S&T BA4 Executive 
Steering Group (ESG) and a rigorous, but streamlined, process for 
evaluating, prioritizing and selecting proposed projects. The project 
selection criteria include: potential to reduce programmatic costs/
risks, potential for quick transitions, and synchronization with 
acquisition plans and programs. Last fall, the ESG selected the first 
five projects for funding in fiscal year 2012. These projects will be 
continually monitored to ensure that they stay on track to provide the 
deliverables to the proper PMs/PEOs within the next couple of years. Of 
course, it is too early to make any conclusions regarding the success 
of this new approach, but the ultimate test of success will be whether 
or not we achieve planned transitions and reduce costs through early 
competitive prototyping. I am confident that we have a strong process 
in place now, which provides the Army with an improved mechanism for 
establishing a closer alignment between S&T and acquisition programs; 
however, in the fiscal year 2013 budget request, we did decide to 
maintain a modest investment in this line until we have some data on 
the effectiveness of the projects against the objectives.
    Another new source of funding for S&T is the Rapid Innovation Fund 
(RIF), established by Congress in fiscal year 2011. We are using, and 
intend to continue using, this additional funding to attract small and 
nontraditional businesses, so that we can identify and incorporate what 
they produce to help our TECD TPMs solve the 24 challenges. We recently 
released a Broad Agency Announcement (BAA) asking for white papers in 
support of the top 10 Army priority challenges. The response was 
enormous--nearly 1,000 white papers were received. My staff, along with 
subject matter experts from the Army labs and the acquisition 
community, reviewed each of these proposals and selected over 90. We 
are asking these selectees to submit full proposals; against which we 
will use the fiscal year 2011 and fiscal year 2012 RIF funding to award 
contracts. These contractual efforts will be managed as part of the 
appropriate TECD by the TPMs. The plan is to issue another BAA in 
fiscal year 2012 seeking technologies that can contribute to solving 
the remaining 15 priority challenges. I believe that this new 
initiative (the RIF) is providing value to the Army and opening up more 
collaborative opportunities for small and nontraditional businesses. In 
addition to providing a link to the TECDs for small businesses, the 
huge number of white papers received has given us further insight into 
innovative technologies of which we may have not been otherwise aware--
and it is our intent to fund more of the highest quality proposals with 
core funds. While we are still in the initial phase of this program, I 
have confidence it will be ultimately successful in reaching companies 
with innovative ideas and getting them on a path for Army's acceptance 
of their products into subsystems and systems.
    The Army Small Business Innovation Research (SBIR) program is 
another way for us to tap the ideas of nontraditional defense 
businesses. The SBIR program is designed to provide small, high-tech 
businesses the opportunity to propose innovative research and 
development solutions in response to critical Army needs. In fiscal 
year 2011, the Army SBIR office generated 139 topics based on input 
from laboratories, TRADOC and the PEOs. In response to these topics, 
small businesses submitted over 3000 proposals, which were evaluated by 
the Army SBIR office and which resulted in more than 600 Phase I and 
Phase II awards valued at approximately $200 million.
    Although the SIBR program is strong, there is a real need to 
streamline the topics generation process and reduce the overhead and 
labor associated with generating, selecting and contracting SIBR 
efforts. I believe we can lean the process, increase the program 
success rates and, most importantly, improve the transition of products 
that are developed under Army SIBR contracts. Therefore, I have 
directed that, beginning this year, SBIR topics/projects align with 
TECDs, S&T Challenges and highest priority Program Executive Office 
(PEO) needs. By tying more of these efforts directly to S&T priorities 
and managing each project as part of a TECD program, the fiscal year 
2013 SIBR projects may have greater transition rate and increased 
relevance.
    Beginning in fiscal year 2012, the High Performance Computing 
Modernization Program (HPCMP) and office transitioned from the Office 
of the Secretary of Defense (OSD) to my office for management. HPCMP 
is, and will remain, focused on supporting the needs of the triservices 
and other agencies. HPCMP comprises three elements--it: (1) operates 
six DOD Shared Resource Centers; (2) operates and maintains the Defense 
Research and Engineering Network; and (3) develops Software 
Applications. DOD scientists and engineers use HPCMP resources in 
support of many disciplines, including physics, chemistry, materials, 
acoustics, and aerodynamics. While there have been some bumps in the 
road in the transition process, the Army remains fully committed to 
managing and executing this critical capability. In fiscal year 2013 we 
have requested $180.6 million in RDT&E and $57.7 million in procurement 
to conduct this program, managed by the U.S. Army Corps of Engineers.
    Across all of our portfolios, we maintain our focus on power and 
energy. As we develop technology enabled capabilities, we must work to 
reduce the burden in both weight and logistics that comes from 
increased energy consumption by the plethora of electronic equipment we 
need in our operations. Since fiscal year 2002, S&T power and energy 
research has concentrated on maturation and demonstration of 
components, materials, and devices to reduce size, weight, and power, 
as well as, extend the useful life of components. We are now shifting 
our focus to concentrate on subsystems and systems. Our objectives are 
to improve efficiency and reduce consumption while increasing 
functionality and developing smart energy-saving designs. Power and 
energy issues must be resolved to achieve the objectives of most of the 
24 challenges. Our existing programs are integrated with, and 
complementary to, the operational energy strategy of the Assistant 
Secretary of the Army for Installations, Energy, and the Environment. 
In the fiscal year 2013 budget request we have, interspersed among our 
portfolios, $160.9 million for power and energy projects.

                        S&T PORTFOLIO HIGHLIGHTS

Soldier Portfolio
    In keeping with the vision of soldier as the Decisive Weapon, the 
soldier S&T portfolio researches underpinning human science and matures 
and demonstrates technologies for Soldier and Squad Lethality, 
Survivability, Mobility, Leader Development, Training, Combat Casualty 
Care and Clinical and Rehabilitation Medicine capabilities. The efforts 
in this portfolio are designed to maximize the effectiveness of Squad 
performance as a collective formation. These efforts result in state of 
the art equipment, shelters, clothing, food, training tools, logistic 
support, combat trauma therapies, and other medical technologies. Major 
initiatives include Protection, Dismounted Soldier Power and an 
overarching focus on the human and material science advancements 
necessary to Lighten the Soldier's Load. In the coming years, improving 
mission performance in a complex and dynamic environment will rely on 
improving the integration of cognitive and physical performance with 
technology solutions.
    In keeping with our holistic approach to Army challenges, this 
effort looks to address the entire chain of service from pre-deployment 
to return to civilian life including training, health promotion, 
rehabilitative medicine and treatment for Post-Traumatic Stress 
Disorder (PTSD)/Traumatic Brain Injury (TBI). Efforts seek to reduce 
load-related injuries and chronic conditions, address the cognitive and 
physical burden through better decision and mission planning tools, and 
optimize individual protective equipment to fully consider 
survivability in relation to mobility, lethality, and the human 
dimension. This effort is truly collaborative, involving researchers 
from the Natick Soldier Research, Development and Engineering Center, 
the Army Research Lab, the MRMC, the Army Research Institute, the 
Armaments Research, Development and Engineering Center, the other 
Services and DARPA, as well as our academic, industry, and 
international partners.
    PTSD and TBI continue to be a source of serious concern. The U.S. 
Army MRMC has ongoing efforts to address these devastating conditions. 
Basic research efforts include: furthering our understanding of cell 
death signals and neuroprotection mechanisms, as well as, identifying 
critical thresholds for secondary injury comprising TBI. We are also 
focused on investigating selective brain cooling and non-embryonic stem 
cells derived from human amniotic fluid as non-traditional therapies 
for TBI, and identifying ``combination'' therapeutics that 
substantially mitigate or reduce TBI-induced brain damage and seizures 
for advanced development and clinical trials. We have had some recent 
successes in this area, including completion of an FDA effectiveness 
study on a candidate neuroprotective drug for treatment of TBI and 
completion of a pivotal trial for a bench-top assay for use in 
hospitals using candidate biomarkers for the detection of TBI.

Ground Portfolio
    The Ground portfolio includes technologies for medium and large 
caliber weapons, munitions, missiles, directed energy weapons, vehicle 
ballistic and blast protection, vehicle power and mobility, unmanned 
ground systems and countermine and counter-Improvised Explosive Devices 
(IED) detection and neutralization and deployable small base 
protection.
    In the past, we have designed vehicles with little consideration 
for accommodating soldiers who have to operate in them. Now we are 
beginning to explore ways to design vehicles around soldiers. 
Increasing protection levels of the platforms means impacting interior 
volumes reducing mobility, maneuverability, and freedom of movement for 
occupants, and leads to heavier platforms. The Occupant Centric 
Survivability (OCS) Program provides the mechanism to develop, design, 
demonstrate, and document an occupant centered Army ground vehicle 
design philosophy that improves vehicle survivability, as well as force 
protection, by mitigating warfighter injury due to underbody IED and 
mine blast, vehicle rollover, and vehicle crash events. This design 
philosophy considers the warfighter first, integrates occupant 
protection technologies, and builds the vehicle to surround and support 
the warfighter and the Warfighter's mission. To this end, we are 
developing an OCS concept design demonstrator, as well as, platform-
specific demonstrators with unique occupant protection technologies 
tailored to the platform design constraints. We are also publishing 
standards for occupant centric design guidelines, test procedures, and 
safety specifications.
    In fiscal year 2013, we are also continuing the effort started last 
year in Underbody Blast (UBB) Protection. Some recent successes include 
performing vulnerability identification and resolution on most Program 
Manager (PM) programs such as JLTV, mine-resistant ambush protected 
vehicle, Stryker, HET, and FMTV, and advising PM customers on the 
feasibility and performance of potential blast protection technologies 
while balancing cost, payload, mobility and mission requirements. We 
have developed tools and methods which have led to system level 
evaluations through modeling and simulation resulting in improved Live 
Fire Test and Evaluation, faster delivery of technologies to theater/
customers and necessary characterizations of threats, systems and 
environment. Our efforts continue to look at a full range of 
technologies to address this issue, from modeling and simulation and 
physiological studies to seats, restraints and energy-absorbing 
materials.
    We are also continuing our investments and efforts in Deployable 
Force Protection (DFP). Our military units operating remotely at small 
bases are more vulnerable to enemy attacks because they have less 
organic equipment, fewer personnel, shorter kinetic reach, less 
hardened areas, significant bandwidth limitations and are difficult to 
reinforce, resupply and support with repairs. We are developing force 
protection technologies that have a low logistics footprint, are easily 
operated with limited manpower and training, and are quick to set up 
and take down. This will allow for enhanced protection capabilities, 
while leaving soldiers with more time to perform their mission.
    In conjunction with the U.S. Special Operations Command Central and 
the Combating Terrorism Technical Support Office, we recently assessed 
several systems and recommended an integrated force protection kit to 
support Village Stability Operations. The kit is being provided to the 
7th Special Forces Group for operational assessment in theater and was 
created in a collaborative effort to accelerate delivery. The kit 
provides protection and allows operators to focus less on establishing 
personal security and more on the mission. We have also developed a 
low-logistics armoring system to expediently establish protection for 
critical assets, such as the Tactical Operations Center (TOC), mortar 
pit, and weapon/sensor systems. Unlike any other, this system also 
provides expedient overhead cover that protects against direct-hit 
rocket, artillery, and mortar threats. Members of the DFP team worked 
with troops and Centers of Excellence on design and employment options. 
The 2nd Battalion, 1st Brigade, 82nd Airborne Division will deploy with 
a number of modular protective mortar pit and overhead cover systems to 
be used in an operational assessment in theater. Use of these systems 
will result in savings of countless hours that are typically associated 
with establishing mortar pits and protection and will increase the 
associated level of protection for soldiers.

Air Portfolio
    The Army is the lead service for rotorcraft, owning and operating 
over 80 percent of DOD's vertical lift aircraft. As such, the 
preponderance of rotorcraft technology research and development takes 
place within the Army. The Air portfolio is focused on seven broad 
areas of research: platform technology; operations and support; 
survivability; rotors and flight controls; engines & drives; weapons 
and sensors; and unmanned systems. Our vision for Army aviation S&T is 
to provide the best possible aviation technology enabled capabilities 
to deliver soldiers, weapons, supplies and equipment where they are 
needed, when they are needed.
    In order to provide Soldier support over future Areas of Operation 
(AO) that may be 16 times larger than current AOs, the Army needs a 
faster, more efficient rotorcraft, with significantly improved 
survivability against current and future threats. Operating in 
conditions of 6,000 feet and 95 degrees (high/hot), this aircraft will 
need to transport and supply troops while providing close air support 
and intelligence, surveillance and reconnaissance capabilities.
    A major effort currently underway within S&T is technology 
development for DOD's next potential ``clean sheet'' design 
rotorcraft--the Joint Multi-Role (JMR) aircraft. In fiscal year 2011, 
the Army, Navy and NASA agreed to use a common toolset and database and 
are collaboratively sharing design responsibility for the JMR-Medium, 
an aircraft intended to replace our Blackhawk/Seahawk and Apache fleet. 
Three different configurations of JMR aircraft have been designed by 
the Government--a conventional helicopter, a large-wing slowed rotor 
compound, and a tilt rotor. There are seven design excursions being 
investigated that fully explore the size and environmental 
characteristics of interest, including shipboard operations. Additional 
near-term plans include conducting a small scale wind tunnel test of an 
unpowered tilt rotor to validate forces and moments, confirm 
Computational Fluid Dynamics (CFD) estimates, and update design 
parameters. Additional CFD/Computational Structural Dynamics assessment 
and results integration will be done as part of expanding the design 
methodology and toolset. We plan to use the BA4 line to allow a second 
demonstrator to be developed for JMR.
    Additionally, the DOD HPCMP CREATE Air Vehicle Project is 
coordinated with this activity and endeavors to increase the fidelity 
of the design process with the future goal of being able to conduct a 
complete detailed design environment.
    While many of our rotorcraft research efforts are focused on the 
development of technology for transition to new platforms in 2025 and 
beyond, we are also maintaining an investment to keep the current fleet 
effective. One recent transition success has been the Advanced 
Affordable Turbine Engine (AATE), a 3,000 shaft horsepower engine with 
25 percent improved fuel efficiency, and 35 percent reduced lifecycle 
costs. In fiscal year 2012, AATE transitioned to PM--Utility for 
Engineering and Manufacturing Development under the Improved Turbine 
Engine Program, which will re-engine our Blackhawk and Apache fleet.

C3I Portfolio
    The key to successful operations in an increasingly complex battle 
space is the capability for seamless and timely communications across 
all echelons of the system, from headquarters to the soldier. A major 
effort in the C3 portfolio is combining enhanced mission command 
capabilities for the soldier and small unit with improved mobile 
networks.
    We are providing solutions to improve command and control, 
situational awareness, and dynamic communications, while maintaining 
appropriate military security not found in commercial devices. In order 
to exploit the full range of capabilities that smart devices offer the 
soldier, we need an improved network in an on-the-move (OTM) 
environment; handheld devices with tools and functionality to provide 
soldiers with the necessary decision and communications capabilities in 
an intuitive interface; and appropriate security protocols for the 
battlefield.
    Our mobile network research efforts are increasing network 
efficiency and reliability, increasing OTM connectivity and bandwidth 
utilization, and allowing for reliable message delivery in difficult 
communications environments. These efforts are leveraging investments 
by commercial industry and DARPA.
    Our mission command efforts are aimed at providing soldiers and 
small units with the kinds of data-driven decision tools once available 
only to higher echelons. As our defense strategy moves to a smaller, 
more agile force, it is critical that small units and individual 
soldiers have access to accurate and relevant situation awareness 
information including geospatial and meteorological data, combat ID and 
battlespace awareness, as well as full spectrum decision support tools. 
Just as critically, we have to design these tools taking into account 
human cognitive abilities and limitations.
    Finally, the most useful tools for the soldier are worthless if 
they are not properly secured. These security issues include approved 
encryption for secret and below, identity management, security policy 
management, exploitable applications and securing the infrastructure. 
Our efforts in this area include authentication of approved 
applications and prevention of installation of rogue applications, 
providing secret voice and data connections across disparate 
technologies including handheld devices, and developing a mutual 
authentication mechanism between users, handheld devices, and the 
network core.
    Beyond the specific security efforts for mobile battlefield 
communications, the C3 portfolio also directs our broader cyber 
security S&T efforts, which I know the subcommittee has a particular 
interest in. Our work in a resilient cyber security framework will 
provide a more secure foundation in which participants, including cyber 
devices and software, are able to work together in near-real time to 
anticipate and prevent cyber attacks, limit the spread of attacks 
across participating devices, minimize the consequences of attacks, and 
recover systems and networks to trusted states. Within this framework, 
security capabilities are built into cyber devices and software in a 
way that allows preventive and defensive courses of action to be 
coordinated within and among communities of defense in depth 
architectures. The power to detect and mitigate threats is distributed 
among participants and near-real time coordination is enabled by 
combining the innate and interoperable capabilities of individual 
devices with trusted information exchanges and shared, configurable 
policies.
    In the area of software assurance, analyzing software code for 
security vulnerabilities and malware is a manually intensive effort 
requiring a high degree of skill and experience. Our development 
efforts focus on automating the software code analysis for C++ programs 
and JAVA source code; developing a compliance checker to ensure that 
the software has been developed in accordance with required standards; 
reducing false positives; and testing binary objects and images for 
logic bombs and unexecuted regions. We also have research efforts in 
hardware assurance, including trustworthy computing foundations, 
physical tamper and chip level protection schemes.

Basic Research
    Underpinning all of our efforts is a strong basic research program. 
Beginning this year, we are developing a process similar to the TECDs 
to define a set of priorities for Basic Research and identify challenge 
statements against which programs can be proposed and approved. The key 
emphasis for the Army is to provide the necessary basic research 
(through the skills of our workforce and our investments) to achieve 
and provide for technically enabled capabilities that meet the specific 
needs of the soldier and the Army mission. In Army Basic Research, we 
are looking to lead the S&T enterprise. We look for guidance from many 
sources--requirements and desired capabilities from TRADOC and our 
soldiers; commissioned studies from the National Academies and RAND; 
workshops and collaborations with our sister services; and we are in 
the midst of rethinking how we approach, describe, and provide strategy 
for the overall program.
    We know that for most of the 20th century, physics was the 
fundamental driver for nearly all leaps in technology. And while 
physics will always play a large role in that, over the last 20 years 
we have seen big changes in and big advances from biology and bio-
inspired technology. As we move forward we need to watch very closely 
and invest selectively to determine what technology is going to come 
from that and how are we going to develop that to assist the soldier. 
With that in mind, we are beginning to think of and align our basic 
research efforts in three areas: Long-Term Exploration; Long-Term 
Disruptive Technology investments; and Long-Term Enabling Research.
    Long-Term Exploration efforts look to discover or invent new 
technologies and capabilities relevant to the Army mission--we explore 
with a purpose. Our Long-Term Disruptive Technology investments are 
researching technologies which will change the rules of the playing 
field for our warfighter. Long-Term Enabling research looks for 
innovative ways to move the inventions and discoveries into components 
and subcomponents and technologies that our labs and research partners 
can exploit. By this we enable future S&T applied research, advanced 
tech development, and capabilities. Taken together, this basic research 
provides the solid foundation for Army S&T.
    These are exciting and challenging times for the Army's S&T 
program. We are changing the Army S&T business model to be an enduring, 
sustainable, successful enterprise, and aligning our strategic planning 
to the budget process to achieve efficient, top-down S&T leadership 
investment focus. We are identifying critical Army problems that we can 
solve in the near and mid-term, using the best talent and skills 
wherever they exist. Finally, we are enhancing the visibility of Army 
S&T priorities to provide partnering opportunities to jointly solve 
problems and enhance our warfighter capabilities. As you can imagine, 
this is a tremendous undertaking, and would not be possible with the 
support we have received from Congress. I hope that we can continue to 
count on support as we move forward, and I would like to again thank 
the members of the subcommittee again for all you do for our soldiers. 
I would be happy to take any questions you have.

    Senator Hagan. Thank you, Dr. Freeman.
    Ms. Lacey?

 STATEMENT OF MARY E. LACEY, DEPUTY ASSISTANT SECRETARY OF THE 
      NAVY FOR RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

    Ms. Lacey. Madam Chair, Senator Portman, members of the 
subcommittee, it is an honor to appear here before you today to 
report on the overall health of the Department of the Navy 
laboratories and warfare centers.
    The Navy relies heavily on the people, facilities, and 
capabilities in our labs and centers to sustain the current 
Navy, to acquire the next Navy, and to develop the Navy after 
next.
    I want to thank the subcommittee not only for your 
interest, but for your strong support of the many initiatives, 
investments, and flexibilities enabling those scientists and 
engineers to provide new warfighting capabilities and to 
sustain the technology leadership our sailors and marines 
enjoy.
    The Navy's principal laboratory, the Naval Research 
Laboratory (NRL), was created by Congress in 1923. Over half 
the work NRL performs is fundamental S&T, nearly all in 
partnership or collaboration with academia and researchers in 
other government laboratories and activities.
    The warfare centers, while being involved in basic science, 
play most strongly in technology and engineering often in 
partnership with industry and program offices. They too have 
long histories, some dating back to the 1800s, and were 
generally created to respond to a specific threat or 
technological challenge of the day.
    The Navy labs and warfare centers maintain a diverse 
workforce of over 44,000 employees, over half of whom are 
scientists and engineers. Among the scientists and engineers, 
1,700 hold doctorates in science, engineering, or mathematics.
    The Assistant Secretary of the Navy for Research, 
Development, and Acquisition has identified five strategic 
priorities for the Navy. Each of these works in harmony with 
the other to meet the current acquisition needs and future 
technology requirements of our sailors and marines. The five 
priorities are: get the requirement right, make every dollar 
count, raise the bar on performance, support the industrial 
base, and rebuild the acquisition workforce. It is here where 
the laboratories and warfare centers play most strongly as they 
make up over half of the Navy's technical acquisition 
workforce.
    I would like to address the various flexibilities and 
hiring compensation and personnel movement you have given us 
from the China Lake demo back in the 1980s to the expansion of 
these authorities and eligible activities over the last few 
decades.
    Section 852, the Defense Acquisition Workforce Fund, has 
contributed greatly to our expansion of our workforce. Our plan 
is to hire an additional 1,600 scientists and engineers under 
this authority, nearly half of which will be either permanently 
placed or rotated through our labs and warfare centers to 
accelerate their professional development.
    The direct hiring authority, section 1108, provides for the 
appointment of qualified candidates possessing an advanced 
degree in science or engineering. Since 2009, we have hired 
more than 6,800 scientists and engineers in our laboratories 
and warfare centers and over 700 were brought in with this 
direct hiring authority. So thank you.
    Although the Navy has historically made deliberate and 
measured investments to ensure stability within our organic 
workforce, section 219 has been a big help. During this period 
of refreshing our workforce, it has proven beneficial to the 
health of the enterprise. Projections indicate the Navy labs 
and warfare centers will invest almost $90 million in fiscal 
year 2012, and furthermore, this program has sparked great 
enthusiasm on behalf of our scientists and engineers.
    The authority for unspecified minor construction, up to $4 
million, continues to hold significant potential for the 
revitalization of our laboratory and warfare facilities. As the 
program gains strength, we anticipate it will become a very 
valuable resource. In the likelihood MILCON funds decrease 
within our labs and warfare centers, this authority becomes 
even more important to revitalizing the technical 
infrastructure.
    The scientific and technical workforce is the engine that 
drives our ability to maintain the technological superiority. 
Technical capabilities once lost may take decades to 
reestablish. Scientists and engineers require the hands-on 
experience. In fact, if you do not do it, you do not know it. 
Hands-on experience is essential to provide informed 
decisionmaking when setting requirements or overseeing 
contractor performance. Consequently, the Assistant Secretary 
of the Navy for Research, Development, and Acquisition has 
directed program executive officers and program managers to 
look first at the in-house laboratories and warfare centers for 
pre-milestone B technical work.
    So in summary, the Navy labs and warfare centers are 
critical components of today's Navy, the next Navy, and the 
Navy after next. The authorities that you have given us enable 
us to strengthen their intellectual and infrastructure capacity 
and capabilities. By increasing the hands-on work performed by 
scientists and engineers, the Navy has energized the workforce.
    Having grown up professionally and technically in this 
community, it has been a delight to return in a leadership 
position where I can influence their continued success. I 
greatly appreciate your continued support to our laboratories 
and warfare centers and assure you I will do my best to ensure 
they are postured to meet today's and tomorrow's challenges.
    I would be happy to take any questions you might have.
    [The prepared statement of Ms. Lacey follows:]

                Prepared Statement by Ms. Mary E. Lacey

                              INTRODUCTION

    Madam Chairwoman, Senator Portman, members of the subcommittee, it 
is an honor to appear before you today to report on the overall health 
of the Department of Navy (DoN) laboratories and centers. The 
Department relies heavily on the people, facilities and capabilities in 
our Labs and Centers to sustain the Current Navy, to acquire the Next-
Navy, and to develop the Navy-After-Next. I would like to thank the 
Committee not only for your interest but for your strong support of 
many of the initiatives, investments, and flexibilities that enable 
those scientists and engineers to provide new warfighting capabilities 
and to sustain the technology leadership our sailors and marines enjoy.
    As was mentioned earlier, the Navy's principal Laboratory, the 
Naval Research Laboratory (NRL) was created by Congress in 1923. Over 
half of the work NRL performs is fundamental science and technology, 
nearly all in partnership or in collaboration with academia and 
researchers in other government laboratories and activities. The 
warfare and systems Centers, while being involved in basic science, 
play most strongly in technology and engineering, often in partnership 
with industry, and government program offices. They too have long 
histories, some dating back to the 1800s, and were generally created to 
respond to a specific threat or technological challenge of the day.
    Today, DoN has 15 activities that compose the In-house research and 
development (R&D) capacity. It is comprised of the NRL and 14 Warfare 
and Systems Centers aligned to 3 Systems Commands: Naval Sea Systems 
Command, Naval Air Systems Command, and Space and Naval Warfare Systems 
Command.
    The NRL, under the leadership of the Office of Naval Research 
(ONR), operates as the Navy's full-spectrum corporate laboratory, 
conducting a broadly based multidisciplinary program of scientific 
research and advanced technological development directed toward 
maritime applications of new and improved materials, techniques, 
equipment, systems and ocean, atmospheric, and space sciences and 
related technologies.
    The Naval Air Warfare Center Divisions (Air and Weapons) are the 
Department of Navy's principal research, development, test, evaluation, 
engineering, and fleet support centers for air platforms, autonomous 
air vehicles, aircraft engines, free-fall and glide weapons, 
survivability systems, mission and planning support systems, electronic 
combat systems, and the acquisition and support of fleet training 
systems.
    The Naval Surface Warfare Center operates Navy's research, 
development, test and evaluation, engineering, and fleet support 
activities for ship systems, surface ship combat and weapons systems, 
littoral warfare systems, force warfare systems and other offensive and 
defensive systems associated with surface warfare and related areas of 
joint, homeland and national defense systems.
    The Naval Undersea Warfare Center operates the Navy's research, 
development, test and evaluation, engineering, and fleet support 
activities for submarines, autonomous underwater systems, and offensive 
and defensive weapons systems associated with undersea warfare and 
related areas of homeland security and national defense.
    The Space and Naval Warfare Systems Centers are the Navy's 
research, development, test, and evaluation, engineering, and fleet 
support activities for Command, Control, Communications, Computers, 
Intelligence, Surveillance and Reconnaissance (C4ISR), Information 
Operations (IO), Enterprise Information Services (EIS) and Space 
capabilities.
    The Naval Laboratories and Warfare Centers maintain a diverse 
workforce of 44,000 employees with 23,000 scientists and engineers. 
Among the scientists and engineers, 1,716 hold doctorates in science, 
engineering, or mathematics. These are encouraging numbers but there 
remain challenges.
    Since the end of World War II, the United States has enjoyed a 
global leadership role in economic power and technology development/
exploitation. These conditions are now changing as other countries 
emerge on the world stage. We recognize that without strong Naval Labs 
and Warfare Center leadership in technology, future forces may not 
enjoy maritime dominance in all warfare areas as we have in the past. 
Over the last few years we have embarked on a number of efforts 
specifically aimed at ensuring we maintain that edge for the 
warfighter.
    The Assistant Secretary of the Navy for Research, Development, and 
Acquisition (ASN(RD&A)) has identified five strategic priorities for 
the Department of Navy. Each of these works in harmony with the others 
to meet current acquisition needs and future technology requirements of 
our sailors and marines. Within each of these priorities our 
Laboratories and Warfare Centers remain pivotal players in 
understanding the technological and programmatic ramifications. The 
five priorities are:

         Get the requirements right;
         Make every dollar count;
         Raise the Bar on Performance;
         Support the Industrial Base; and
         Rebuild the Acquisition Workforce.

    While each of these priorities is relevant to the labs and centers, 
it is in the last that the labs and centers play quite prominently as 
they make up over half the department's acquisition workforce. Over the 
last few years we have reversed over a decade of downsizing this part 
of our workforce: our professional corps had been stretched too thin 
and we had outsourced core competencies.

                              SECTION 852

    Section 852 of the National Defense Authorization Act (NDAA) for 
Fiscal Year 2008 provides a mechanism to achieve the Secretary of 
Defense's goal of strategically sizing and rebalancing the Acquisition 
Workforce and ensure the Departments workforce has the capacity, in 
both personnel and skills, to perform its mission, provide appropriate 
oversight of contractor performance, and ensure the Department receives 
the best value for the expenditure of public resources. The Naval Labs 
and Warfare Centers make up more than half of the Department of the 
Navy's Acquisition Workforce. The Department of the Navy plan is to 
systematically and strategically hire 1,590 new professionals through 
fiscal year 2015 in areas deemed essential to meet long-term needs.
    Today, the Navy is executing to the plan. Many of these 
professionals are either permanently placed or rotated through our 
laboratory enterprise to increase their understanding of our programs 
and accelerate their professional development.
    Section 852 has been invaluable to the Warfare and Systems Centers 
to fill key technical positions. It has enabled Warfare and Systems 
Centers to avoid losing highly coveted scientists and engineers.
    The demand for scientists and engineers is as strong as it has ever 
been; if not stronger. While our colleges and universities see the 
numbers of American students pursuing technical degrees holding steady, 
or increasing, the number of graduates that are US citizens and 
eligible for employment in our workforce is not growing and our need 
for them remains great.

                        DIRECT HIRING AUTHORITY

    Section 1108 of the NDAA for Fiscal Year 2009 provides that the 
Secretary of Defense may appoint qualified candidates possessing an 
advanced degree to scientific and engineering positions within any 
Laboratory.
    Since fiscal year 2009, the Naval Laboratories and Warfare Centers 
have hired more than 6,800 scientists and engineers in their effort to 
reinvigorate the technical workforce. Of these hires, 729 were brought 
on using the Direct Hiring authority. This authority allows us to 
compete for the best minds graduating from our colleges and 
universities today, and while we've enjoyed relatively good recruiting 
results in the last few years largely due to the economy, the situation 
is again becoming more competitive.
    I would be remiss if I didn't thank you for your strong support of 
the various other personnel flexibilities you have given us over the 
years, from the ``China Lake'' demo back in the 80's, to expansion of 
those authorities and eligible activities over the last few decades. 
The flexibilities in hiring, compensation, and personnel movement have 
greatly benefitted our workforce and activities. Every organization in 
the Naval Laboratory Enterprise has a version of a personnel system 
other than the General Schedule that is tailored to their needs. We are 
continuously evaluating the effectiveness of these systems and porting 
best practices from one system to another.

                              SECTION 219

    The DoN has historically made deliberate and measured investments 
to ensure stability within the organic workforce. During this period of 
refreshing our workforce, section 219 of the NDAA for Fiscal Year 2009 
has proven very beneficial to the health of the Navy Labs, Warfare and 
Systems Centers. ASN(RD&A) continues to promote and execute section 219 
to:

         Maintain the scientific and technical vitality of in-
        house laboratories and centers;
         Increase the rate of recruitment and retention of 
        laboratory and center personnel in critical skill areas of 
        science and engineering;
         Foster creativity and stimulate exploration of cutting 
        edge science and technology;
         Serve as a proving ground for new concepts in R&D
         Support high-value, potentially high-risk R&D
         Provide for maturation and transition of technologies 
        beneficial to the Navy, Marine Corps, and the military forces 
        of the other Services; and
         Enhance the laboratories' ability to address future 
        military and DoN and Department of Defense (DOD) missions.

    Current projections indicate the Naval Laboratories and Warfare 
Centers will invest approximately $90 million in section 219 projects. 
Furthermore, this program has sparked a great deal of enthusiasm within 
the laboratory community. Each of the Labs and Centers has seen an 
increase in `new ideas' from their scientists and engineers. A 
secondary benefit has been increased communication between the 
Laboratories and Warfare Centers and their customers regarding future 
technical challenges. For example, the Marine Corps Systems Command 
provided Labs and Warfare Centers with a written list of their 
priorities for technology focus areas.

                         10 U.S.C. SECTION 2805

    The authority for unspecified minor construction up to $4 million, 
under 10 U.S.C. Sec. 2805, continues to hold significant potential for 
the revitalization of Naval laboratories and warfare centers. We have 
not utilized the $4 million under this authority to date. As our 
program begins to gain strength, we anticipate it becoming a valuable 
resource.
    Over the last decade, the Military Construction (MILCON) 
investments at NRL and the Warfare Centers have averaged approximately 
three percent of the total DoN MILCON budget (based on 2010 Naval 
Laboratory/Center Coordinating Group (NLCCG) Report). Approximately 
one-third of these were funded through congressional-adds and another 
third via BRAC. BRAC MILCONs are complete and congressional-adds will 
no longer be considered. In the likelihood that MILCON funds will 
decrease within the Laboratories and Warfare Centers, the minor 
construction authority granted under section 2805 becomes even more 
important to the revitalization of our technical infrastructure. We 
recommend considering the elimination of a sunset clause and making 
this a permanent authorization.
    As was noted in the 2010 Naval Research Advisory Committee report 
on the Status and Future of the Naval R&D Establishment, the scientific 
and technical workforce is the engine that drives our ability to 
maintain technological superiority. Technical capabilities once lost, 
may take decades to re-establish. We will maintain a constant state of 
``re-invention.'' Our Labs and Warfare Centers are maintaining pace 
with the rapid rate of change within science and technology to fully 
understand the technical/cost trade-space for next generation systems 
and platforms. Scientists and engineers require hands-on experience; 
``If you don't do it, you don't know it.'' Hands-on experience is 
essential to provide informed decisionmaking when setting requirements 
and overseeing contractor performance. The Department needs to always 
have the ability to: understand military problems in technical terms, 
know who has the potential to solve those problems, and verify a 
correct solution technically when it is offered.
    Today's most pressing challenge in Acquisition is delivering the 
capability needed by our sailors and marines--more affordably. To do so 
requires a significant technical understanding of the complex systems 
the Department is acquiring. DoN Scientists and Engineers are 
instrumental to providing that understanding. ONR, Laboratories, 
Systems Commands, Warfare and Systems Centers are the principal sources 
of in-house technical knowledge.
    During this time of strategic and budget refocus, the Department is 
focused to maximize its return on the investment of in-house technical 
capability and facilities. Consequently, ASN(RD&A) has directed Program 
Executive Officers (PEOs) and their Program Managers to look, first, to 
in-house Naval Laboratories, Warfare and Systems Centers for Pre-
Milestone B technical work that would improve the Department's 
technical product, and cost knowledge. It is especially important that 
DoN Scientists and Engineers perform or participate significantly in 
these functions in the early stages of R&D. Examples include: 
engineering work in support of Analyses of Alternatives, in-house 
prototyping, experimentation, scale-model testing, and reducing program 
risk via subsystem development and testing. These tasks serve to 
emphasize hands-on work rather than administrative or oversight 
functions.
    As the Deputy Assistant Secretary of the Navy for Research, 
Development, Test, and Evaluation I have oversight responsibility to 
the ASN(RD&A) for all RDT&E accounts, systems engineering and overall 
stewardship responsibilities for the Naval Laboratories and Warfare 
Centers. Since assuming my responsibilities in June of 2011, I have re-
chartered the Navy Laboratory and Centers Coordinating Group (NLCCG). 
The NLCCG was first stood up with the establishment of the Warfare 
Centers in 1992 and is comprised of the civilian and military 
leadership of NRL and Warfare and Systems Centers. They are responsible 
to:

         Provide stewardship of the mission, technical 
        capabilities, workforce and facilities of the Naval Laboratory 
        and Warfare/Systems Centers;
         Advocate for the sustainment and enhancement of 
        technical capabilities and competencies of NLCCG activities;
         Develop and implement a Naval Science and Engineering 
        Strategic Plan;
         Increase operational effectiveness and efficiency of 
        the Naval Laboratory and Warfare/Systems Centers and promote 
        long-term fiscal health of NLCCG activities; and
         Promote communication, cooperation and collaboration 
        among all organizations.

    I have tasked this group to create an overarching strategy, to 
define needed core technical capabilities, and to determine how to 
optimally integrate all these capabilities to meet the affordability 
challenges of today's platform and systems acquisition while planning 
integrating and delivering transformational technologies for the Navy-
After-Next.
    Our near term focus is to:

         Align processes for the work we accept from customers;
         Establish common processes for measuring the technical 
        health of our workforce;
         Establish Department of Navy wide definitions for core 
        capabilities and competencies; and
         Ensure consistency and transparency in program costing 
        practices to ensure we make every dollar count within the Navy 
        Working Capital Fund model.

    All these actions make the Navy Laboratories and Centers better 
partners and suppliers of technical expertise and products in the DOD 
Lab Enterprise. We will continue efforts to collaborate across the 
Services and the Laboratory community to champion the needed workforce, 
facilities, and long-term strategic investments.
    The military dominance of the United States and U.S Naval Forces in 
particular, is closely coupled to technical superiority of our military 
equipment and systems. This superiority is evident in such diverse 
areas as naval nuclear propulsion, radar, electronic warfare, missile 
systems, and has a force multiplier effect throughout our systems and 
platforms.
    Although the U.S. Government and U.S. companies continue to invest 
in R&D, the increasing strength of developing countries and their R&D 
investments means that R&D is increasingly a global enterprise. The 
Department of Navy technology position will be shaped by the 
increasingly global nature of Science and Technology (S&T). Even if the 
Department of Navy R&D budgets were to remain a constant fraction of 
U.S. GDP, they would be a declining fraction of global Science and 
Technology investment. Therefore, those R&D investments must achieve a 
greater effectiveness per dollar to maintain U.S. Naval technological 
superiority. Important attributes include:

         Operationally motivated S&T investments: S&T 
        investments should be connected to the long term strategies and 
        operational requirements shaping future naval capabilities. A 
        core competency of the Naval Labs and Warfare Centers must be 
        maintaining a clear understanding of how new or emerging 
        technical impacts might impact naval capabilities. The goal 
        should be to ensure technical innovation is coupled to equally 
        innovative concept development.
         Self-refreshing: As previously stated, the scientific 
        and technical workforce is the engine driving our Naval 
        Laboratories and Warfare Centers. The dynamic nature of science 
        and technology means the Naval Laboratories and Warfare Centers 
        must be in a constant state of re-invention.
         Robust against disruptive innovation: The extremely 
        dynamic nature of the global technology landscape--new markets 
        can emerge and flourish in mere years--means the Naval Labs and 
        Warfare Centers must have sufficient understanding of 
        technology changes to protect the value of major acquisition 
        programs.
         Agile adoption and differentiation of global 
        innovation: When promising innovations in the global market are 
        identified, the task of the Naval Labs and Warfare Centers is 
        to influence the external community development directions to 
        satisfy Naval needs and develop key elements that ensure an 
        advantage to Naval capabilities. We rely heavily on the ONR 
        international presence in places like London and Singapore to 
        be our portals to the international technical community. ONR 
        Global and their foreign-based science officers, provide 
        outstanding value. But more is necessary. Globalization is a 
        contact sport. The Naval Laboratories and Warfare Centers will 
        not be effective without our continued commitment to accessing 
        the global span of S&T. With the rate of growth of technology, 
        and especially outside of DOD and the United States, the Naval 
        Labs and Warfare Centers must increase the aperture of the 
        technical community.

    Recent performance trends indicate the Laboratories and Warfare 
Centers are executing more S&T work in-house, more than sixty percent 
over the last two years. The S&T funding that goes out-of-house is used 
to reach out to universities, industry parties, and other Laboratories. 
Data over the last decade showed slightly less than 50 percent had been 
executed in-house. This slight adjustment is consistent with the 
Department of Navy's objective to strengthen in-house technical 
capabilities.
    The RDT&E investment portfolio is balanced within a variety of 
programs and initiatives, using in-house resources and out-of-house to 
bring the best ideas and opportunities forward. These include ONR's 
Future Naval Capabilities, Advanced Technology Demonstrations (ATDS), 
Joint Capability Technology Demonstrations (JCTDs), Small Business 
Innovative Research, Cooperative Research and Development Agreements, 
and now the Rapid Innovation Program.
    To date, only a handful of contracts have been negotiated under the 
Rapid Innovation Program. We are complying with guidance to use the 
funds to primarily stimulate and accelerate the transition solutions 
from small business providers into the hands of our warfighters. The 
Labs stand ready to advise and help Service and small business program 
managers and technical staff alike on the most effective insertion 
methods and test products if needed. We are optimistic this program 
will result in effective capability for the warfighter and introduce 
players to the DOD acquisition family, but it is too early to declare 
success.
    The Naval Laboratories and Warfare Centers have the unique position 
and capabilities enabling them to: (a) fully understand the technical 
complexity of an emerging challenge, (b) quickly reach out all 
stakeholders and centers of excellence (other labs/centers, industry, 
academia, and other services) with no conflict of interest, (c) develop 
ideas against the backdrop of the acquisition process, and (d) deliver 
cost effective solutions. The hands-on work these scientists and 
engineers perform helps them fully comprehend the technical intricacies 
of evolving challenges.
    The future technological challenges facing the Department of Navy 
are dynamic and constantly in flux. However, there are four areas, 
unique to the maritime environment, where the Navy must develop or 
maintain the technical competencies for leadership in the future.

         Integrated C4ISR. Whether systems are airborne, on the 
        ocean surface, undersea or in expeditionary air/ground 
        operations the use of wireless dynamic networks of manned and 
        unmanned platforms offers significant operational advantage. 
        Combined with timely intelligence, it can assist the 
        operational commanders in achieving 'information dominance'. A 
        major technical challenge exists for these heterogeneous 
        systems in maritime command and control in that communications 
        connectivity cannot be guaranteed and as a result, unmanned 
        nodes must be able to operate with intermittent connectivity. 
        Our Naval Labs and Centers are participants in defining the 
        technical issues and in developing the necessary capabilities 
        to solve the problems, build the systems, and maintain them 
        into the future.
         Massive Data Transport. We are seeing the emergence of 
        new sensors systems, such as Multi-mission Maritime Aircraft 
        (P-8) and Broad Area Maritime Surveillance (BAMS) platform 
        capable of generating petabytes (that's 10 to the 15th power) 
        of data that will well exceed new military satellite 
        communications throughput capabilities. This is further 
        exacerbated by the challenges of the maritime environment where 
        the available bandwidth can often be degraded. The Naval Labs 
        and Warfare Centers will play a major role in defining the 
        issues and finding solutions. The Naval Labs and Warfare 
        Centers are planning to grow their technical competency to 
        support and lead this transformation using both commercial and 
        Navy-specific technologies.
         Electronic Warfare. The Navy has a compelling 
        expertise, dating back to our early radar experiments right on 
        the Potomac, in Electronic Warfare. The challenge is to ensure 
        the integration and interoperability of legacy and new systems 
        across multiple platforms, integrating new capabilities into 
        planned C4ISR systems and future platforms. The Naval 
        Laboratory Enterprise already collaborates informally at the 
        working level in this area, we are planning to review this 
        approach to ensure it is sufficient to provide the projected 
        capacity and interaction in this important area.
         Counter Anti-Access and Area Denial (A2/AD) and High 
        End Asymmetric Threat (HE/AT). Given the global proliferation 
        of A2/AD systems and capabilities and growing HE/AT that 
        attempt to challenge the ability of U.S. maritime forces to 
        operate freely, the Warfare Centers have and will continue to 
        grow the technical competencies and provide technical 
        leadership to in: Cyber warfare, Air- and surface-launched 
        weapons vs. next generation ships and aircraft, Sea-based 
        unmanned vehicles with munitions and ISR sensors, Concealment 
        and Deception, Ballistic Missile Defense, Communications in 
        non-satellite environment, Anti-Submarine Warfare, Sea Base 
        systems and technologies, Indications & Warning, Precision 
        Targeting, and Mine warfare and mine countermeasures.

    Within the Naval Warfare Centers and Systems Centers, scientists 
and engineers are addressing the total life-cycle of technical issues 
for the Current Navy, the Next Navy, and the Navy-After-Next. Our 
scientists and engineers who have supported the immediate needs of our 
marines and sailors in Iraq and Afghanistan have accumulated invaluable 
knowledge of the real-life challenges and anticipated threats we may 
face in the future. It is critical that the DoN not miss the 
opportunity to re-invest this knowledge back into our future technical 
capabilities.

                                SUMMARY

    The Naval Laboratories and Warfare Centers are critical components 
of Today's Navy, the Next-Navy, and the Navy-After-Next. Authorities 
such as Section 852, Direct Hiring Authority, Section 219, and Section 
2805 enable the Laboratories to strengthen their intellectual and 
infrastructure capacity and capabilities. There is no shortage of 
technical challenges. By increasing the hands-on work performed by 
scientists and engineers, the Navy has energized and excited the 
workforce. Having grown up professionally and technically in the Navy 
Laboratory and Center community, it has been a delight to return to the 
community in a leadership position where I can influence their 
continued success. I greatly appreciate your continued support to our 
Naval Laboratories and Warfare Centers, and I assure you I will do my 
best to ensure they are postured to meet today's and tomorrow's 
challenges.

    Senator Hagan. Thank you, Ms. Lacey.
    Dr. Walker? Thank you.

 STATEMENT OF DR. STEVEN H. WALKER, DEPUTY ASSISTANT SECRETARY 
   OF THE AIR FORCE FOR SCIENCE, TECHNOLOGY, AND ENGINEERING

    Dr. Walker. Thank you. Madam Chairwoman, Senator Portman, 
members of the subcommittee, and staff, I am pleased to have 
the opportunity to provide testimony on the S&T program and on 
the status and the health of the AFRL, our Service's premiere 
research organization.
    To protect our Nation amidst a myriad of current and future 
security challenges, the Air Force must be an agile, flexible, 
ready, and technologically advanced part of the joint team. 
Supported by the fiscal year 2013 President's budget request of 
approximately $2.2 billion for S&T, our program plays a vital 
role by creating the compelling air, space, and cyberspace 
capabilities for precise and reliable global vigilance, reach, 
and power.
    As our single full-spectrum research organization, AFRL 
executes the Air Force's investment portfolio in basic 
research, applied research, and advanced technology 
development. AFRL is unique among the Services, as all the Air 
Force efforts to discover, develop, and integrate affordable 
aerospace warfighting capabilities are housed in this one 
laboratory. Our single unified lab structure has brought Air 
Force S&T to a new level of efficiency collaboration and 
innovation.
    Basic research is the foundation of the Air Force S&T 
program and the cornerstone of our future force. Through the 
scientists and engineers at the Air Force Office of Scientific 
Research (AFOSR), we actively engage the worldwide technical 
community, and the Air Force has been able to leverage 
significant investments made by other defense and Federal 
agencies as well as non-defense and international laboratories 
by doing this.
    These long-term efforts have led to promising opportunities 
such as cold atoms which may enable development of an inertial 
navigation system on a chip that is jam-proof and highly 
accurate.
    Through its Rapid Reaction and Innovation Process, the 
laboratory also supports the current fight. Since December 
2010, Blue Devil Block 1, persistent intelligence, 
surveillance, and reconnaissance capability, has been 
instrumental in identifying a number of high-value individuals 
and IED emplacements in the U.S. Central Command area of 
responsibility.
    AFRL actively collaborates at all levels with other Service 
labs and DARPA. This engagement ranges from scientists and 
engineers sharing the very latest scientific and technological 
breakthroughs at conferences and symposiums to more formal 
efforts including disciplined joint planning, which accelerates 
technology maturation and ensures that taxpayer resources are 
best utilized.
    The Air Force's relationship with DARPA has been critical 
over the years. Approximately one-third of the DARPA program is 
actually executed through AFRL due to our laboratory leadership 
and key technical areas, our unique facilities and strong 
ability to form world-class teams spanning industry, academia, 
and other Government laboratories.
    To meet the S&T demands of the current and future 
warfighter, we must develop and maintain mission-ready 
facilities and infrastructure. AFRL is a world-class lab with 
more than 40 sites worldwide which includes AFOSR offices in 
Europe, Asia, South America; 539 primary facilities on 10 
installations; and 11 million square feet of technical space. 
While the recently completed efforts from the BRAC 2005 
provided the lab with several new state-of-the-art facilities, 
such as the Sensors Range Complex, we recognize that we must 
continue to be vigilant and upgrade our S&T infrastructure in a 
timely manner so that major research programs are not put at 
risk due to aging facilities.
    Ensuring the Air Force continues to have world-winning 
technology requires the proactive management of our current 
STEM workforce and a deliberate effort to grow the lab 
scientists and engineers of the future. The Air Force 
Laboratory Personnel Demonstration Project adopted in 1997 has 
done much to ensure AFRL's ability to attract and retain 
personnel. This flexible system has helped to achieve the best 
workforce for the mission, adjust the workforce for change, and 
improve overall quality. We have also set outreach goals to 
aggressively pursue strategic partnerships and activities with 
our schools, universities, sister Services, professional 
associations, and other Federal agencies in an effort to grow 
and develop future STEM talent.
    Today's Air Force stands as the most powerful air, space, 
and cyberspace force in the world because of technological 
advances being transformed into revolutionary new capabilities. 
AFRL has and continues to provide innovation and critical 
support for the Air Force by balancing near-, mid-, and far-
term research, leveraging efforts across academia, industry, 
and the other services; and maintaining an efficient and 
effective lab infrastructure; and finally, retaining and 
developing a world-class cadre of scientists and engineers.
    Madam Chairwoman, Senator Portman, and the subcommittee, 
thank you again for the opportunity to testify today and thank 
you for your continued support of the Air Force S&T program and 
the AFRL.
    [The prepared statement of Dr. Walker follows:]

               Prepared Statement by Dr. Steven H. Walker

                              INTRODUCTION

    Ms. Chairwoman, members of the subcommittee and staff, I am pleased 
to have the opportunity to provide testimony on the Air Force Science 
and Technology (S&T) Program and on the status and health of the Air 
Force Research Laboratory (AFRL), our Service's premiere research 
organization.
    To protect our Nation amidst a myriad of current and future 
security challenges, the Air Force must be an agile, flexible, ready, 
and technologically-advanced part of the Joint team. The Air Force S&T 
Program plays a vital role by creating compelling air, space and 
cyberspace capabilities for precise and reliable global vigilance, 
reach and power.
    Directed by Air Force senior leadership, our S&T Program is based 
on several enduring tenets. First, we must prepare for an uncertain 
future and investigate game-changing technologies to affordably 
transition the art-of-the-possible into military capabilities. To 
support the Air Force Service Core Functions, we must create technology 
options across a wide spectrum ranging from institutionalizing 
irregular warfare capabilities to providing new capabilities to operate 
effectively in cyberspace and across all domains. We must demonstrate 
advanced technologies that address affordability by promoting 
efficiencies; enhancing the effectiveness, readiness, and availability 
of today's systems; and addressing life cycle costs of future systems. 
In keeping with our Service heritage, we must continue to foster an 
appreciation for the value of technology as a force-multiplier 
throughout the Air Force. We must maintain the requisite expertise to 
support the acquisition and operational communities and modernize and 
improve the sustainability of unique research facilities and 
infrastructure. Finally, we must leverage and remain vigilant over 
global S&T developments and emerging capabilities to avoid 
technological surprise and exploit art-of-the-possible technologies for 
our military advantage.
    To accomplish this in a constrained fiscal environment, it is 
critical that we make the wisest investment decisions possible with the 
precious taxpayer resources afforded us. We've used this opportunity as 
a catalyst to holistically examine our S&T portfolio by considering 
several fundamental questions guided by our tenets. Where should the 
Air Force lead the Department of Defense (DOD) from a technology 
development perspective? Where should we be an integrator of 
technologies developed by others, and where should we follow the pace 
of technology being led by our sister Services, other agencies, 
academia, or Industry?
    Recognizing that wise investments are rooted in sound strategies, 
we embarked more than a year ago on the deliberate and collaborative 
development of an S&T Strategy. This strategy, which codified our 
enduring tenets and current overarching priorities, led to the creation 
of an S&T Plan, published in June 2011. This capstone document 
describes how AFRL implements the Air Force S&T Strategy.
    In light of the defense strategic guidance released in February, we 
ensured our current strategies and plans were appropriately aligned 
with new and enduring emphasis areas. Our S&T Program supports the Air 
Force capabilities fundamental to the major priorities of the guidance, 
such as deterring and defeating aggression, projecting power in anti-
access and area denial (A2/AD) environments, operating in the space and 
cyberspace domains, and maintaining a safe, secure and effective 
strategic deterrent. Our Air Force S&T Strategy, along with the defense 
strategic guidance, provided valuable vectors and helped the Air Force 
make some very challenging investment decisions.

       AIR FORCE S&T FISCAL YEAR 2013 PRESIDENT'S BUDGET REQUEST

    The Air Force fiscal year 2013 President's budget request for S&T 
is approximately $2.2 billion, which includes nearly $200 million in 
support of devolved programs consisting of High Energy Laser efforts 
and the University Research Initiative. These investments support a 
robust and balanced foundation of basic research, applied research, and 
advanced technology development that will provide demonstrated 
transition options to support future warfighting capabilities. This 
year's budget request represents a decrease of $64 million or a 2.8 
percent reduction from the fiscal year 2012 President's budget request. 
This reflects a more modest reduction than that taken across the total 
Air Force budget and indicates the strong support for S&T from our 
leadership in this challenging fiscal environment.
    Our Nation depends on the Air Force to counter a broad spectrum of 
threats that could limit our ability to project global reach, global 
power, and global vigilance. In turn, the Air Force relies on its S&T 
program to provide the technical edge to affordably meet these threats 
across the spectrum of many years. Within the S&T portfolio, 
significant adjustments were made to focus investments in the most 
promising technologies to develop future warfighting capability. The 
most dramatic adjustment is an increase of $55 million in our 
propulsion portfolio in support of new DOD emphasis on A2/AD and energy 
savings. We were able to maintain stable investments in basic research, 
directed energy, munitions, and human effectiveness technology areas. 
Based on our strategy, we reduced our investments in airborne active 
denial, strategic relay mirrors, and high speed laser communications 
development in the directed energy portfolio and laser threat warning 
and small remotely piloted aircraft sensing technologies in the sensors 
technology portfolio. Finally, we are divesting our investment in 
deployed airbase technology development and thermal sciences 
technologies. In these and other technology investment areas, we 
shifted investment priorities in order to best deliver on our strategic 
priorities.

            AIR FORCE RESEARCH LABORATORY BALANCED PORTFOLIO

    As our single full-spectrum research organization, AFRL executes 
the Air Force's investment portfolio in basic research, applied 
research and advanced technology development. AFRL is unique among the 
Services as this one laboratory houses all Air Force efforts to 
discover, develop and integrate affordable aerospace warfighting 
technologies. Two decades ago, the Air Force laboratory system spread 
research across 14 different locations nationwide. In 1990, these 
locations were merged into four ``superlabs.'' Finally, in 1997, the 
current single, unified AFRL structure was completed, bringing Air 
Force S&T to a new level of efficiency, collaboration and innovation.
    AFRL works collaboratively with key S&T stakeholders to maintain a 
balanced portfolio responsive to current warfighter needs while 
simultaneously creating the technical foundation for the future force. 
The Laboratory is able to provide this critical support to the Air 
Force by balancing near-, mid- and far-term research, coordinating with 
and leveraging efforts across academia, industry and the other 
Services; maintaining an efficient and effective laboratory 
infrastructure; and retaining and developing a world-class cadre of 
scientists and engineers.
    Basic research (science and knowledge) is the foundation of the Air 
Force S&T Program and the cornerstone of the future force. Based on 
visions of the future established by Air Force leadership, Air Force 
scientists and engineers identify, nurture and harvest the best basic 
research to transform leading-edge scientific discoveries into new 
technologies with substantial military potential. These technologies 
transform the art-of-the-possible into near-state-of-the-art and offer 
new and better ways for the acquisition community to address far-term 
warfighter needs. While it can be more of a challenge to quantify long-
term basic research, with the scientists and engineers at the Air Force 
Office of Scientific Research within AFRL actively engaged in worldwide 
technical communities, the Air Force has leveraged significant 
investments made by other defense and Federal agencies, as well as non-
defense and international laboratories, in its on-going efforts to 
advance basic science. These long-term efforts have led to promising 
opportunities such as cold atoms, which may enable development of an 
inertial navigation system on a chip that is jam-proof and highly 
accurate; self-healing structures, which may lead to more durable and 
longer-lasting aircraft structures; and bio-energy, which may lead to 
renewable bio-hydrogen techniques to propel vehicles. Two projects were 
even identified by Time Magazine last year as ``best inventions'' for 
2011. First, in conjunction with the University of Texas at Dallas, 
researchers developed a multi-walled carbon nanotube sheet that when 
rapidly heated effectively ``cloaks'' objects beneath it. And, second, 
in conjunction with the Massachusetts Institute of Technology, 
scientists developed a new method to split and store hydrogen and 
oxygen using solar energy without any external connections.
    Our core technical competencies also allow us to transition applied 
research activity directly to the user. One example is in the space 
technical area. The Space Weather Models developed by AFRL are used 
throughout industry today for spacecraft design and the GEOSPACE Model 
of the Space Environment is now commercially sold as part of the 
Satellite Tool Kit. Another example is in our Low Observables (LO) 
Maintainability area. From this area, the Air Force transitioned 
multiple improvements in LO maintainability that allow us to restore 
the LO characteristics of the platform and do so more rapidly. For 
example, the transitioned Hot Melt Gap Filler project provides the 
capability to do on-the-spot repairs in the field while maintaining the 
electromagnetic performance of the F-35.
    AFRL helps the Air Force maintain a winning edge by continuously 
transitioning critical products that strengthen Air Force Core 
Functions by managing high-risk with high-return science and knowledge, 
maturing affordable technologies that address specific warfighter 
needs, and demonstrating high-value S&T capabilities at reduced 
acquisition risk. Flagship Capability Concepts (FCCs), Air Force-level 
integrated technology demonstration efforts, are matured by AFRL with 
the intent to transition to the acquisition community for eventual 
deployment to an end user. Key factors in commissioning an FCC include 
having a well-defined scope and specific objectives desired by a Major 
Command (MAJCOM). These FCCs are sponsored by the using command and are 
vetted through the S&T Governance Structure and Air Force Requirements 
Oversight Council to ensure they align with Air Force strategic 
priorities.
    The High Velocity Penetrating Weapon FCC was established to 
demonstrate critical technologies to reduce the technical risk for a 
new generation of penetrating weapons to defeat difficult, hard 
targets. The ultimate goal is to demonstrate 5,000-pound-class weapon 
penetration capability in a 2,000-pound-class weapon.
    We commissioned a new FCC for Precision Airdrop in response to a 
request from the Commander of Air Mobility Command for technologies to 
improve airdrop accuracy and effectiveness while minimizing risk to our 
aircrews. AFRL, the Aeronautical Systems Center, and Air Mobility 
Command members established a working group to explore all aspects of 
the airdrop missions--from re-supplying our warfighters in the field to 
providing humanitarian aid to people in need across the globe.
    The Selective Cyber Operations Technology Integration FCC is 
executing smoothly toward providing cyber technologies capable of 
affecting multiple nodes for the purposes of achieving a military 
objective. The standardized delivery platform being developed is 
scheduled to be complete in fiscal year 2013 and will serve as a 
baseline for current and future integrated cyber tools.
    Developing technologies to equip our forces of tomorrow is the 
primary objective of any S&T portfolio. Yet, our dedicated scientists 
and engineers are equally motivated to contribute to the current fight 
by getting their technologies into the hands of our warfighters today. 
AFRL supports the current fight through its Rapid Reaction and 
Innovation Process. By capitalizing on AFRL's expertise and tightly 
integrating it with operator knowledge, this process harnesses leading-
edge knowledge, commercial off-the-shelf parts and mature technology 
efforts to rapidly deliver innovative solutions to the warfighter's 
most urgent needs. Its successful rapid-response development efforts 
have included a small, lightweight infrared emitter for friendly 
aircraft to identify joint terminal attack controllers on the ground, a 
wind-measuring dropsonde that unmanned air vehicles can pre-deploy to 
enable single-pass airdrop for Air Mobility Command aircraft and a 
maritime unmanned aerial system with wide-area search radar for low-
cost, long-range coalition maritime surveillance for U.S. Pacific 
Command.
    Air Force S&T has played a significant role in developing and 
delivering combat capability to our warfighters engaged in the U.S. 
Central Command (CENTCOM) area of responsibility through the deployment 
of Blue Devil. Blue Devil Block 1 is a persistent intelligence, 
surveillance, and reconnaissance (ISR) capability demonstrating the 
first-ever integration of wide area field-of-view and narrow field-of-
view high definition day and night sensors cued by advanced signals 
intelligence sensors. Imagery is transmitted in near-real-time to a 
Blue Devil ground station or to individual soldiers on the ground. Blue 
Devil Block 1 satisfies a number of CENTCOM Joint Urgent Operational 
Needs. Warfighter feedback on the situational awareness provided by 
Blue Devil Block 1 has been overwhelmingly positive. Since December 
2010, Blue Devil ISR has been instrumental in identifying a number of 
high value individuals and improvised explosive device emplacements. In 
fiscal year 2013, Blue Devil Block 1 will continue to support CENTCOM 
with four sorties per day.
    In the realm of technology transition and transfer, we are managing 
a number of initiatives that are yielding positive results. For 
example, the Air Force is engaging with small business to execute the 
Rapid Innovation Fund (RIF). The Air Force received 730 white papers in 
response to the RIF broad agency announcement, 88 percent of which were 
submitted by small businesses.
    The Air Force asked submitters to focus on key technology areas in 
their white papers. These included support to current contingency 
operations, particularly in the areas of precision air delivery, low-
metal or non-metallic detection devices, persistent wide-area airborne 
surveillance and exploitation capability, combat search and rescue, and 
man-portable fire suppressant. We also asked for ideas in cyber 
operations and mission assurance, improved system sustainment, and 
power generation and energy for platforms.
    In addition to the technical approach and cost, a primary 
consideration in our evaluation of white papers was transition 
potential. We also considered the degree to which the technical 
approach was relevant to our need, whether it enhances or accelerates 
the development of an Air Force capability, and if it reduces 
development costs of acquisition programs or sustainment costs of 
fielded systems. We anticipate making approximately 55 contract awards 
this fiscal year meeting the RIF intent to rapidly insert innovative 
technology into programs of record to meet critical national security 
needs.

                FOCUS ON COORDINATION AND COLLABORATION

    The AFRL actively collaborates at all levels with other Service 
laboratories and the Defense Advanced Research Projects Agency (DARPA). 
This collaboration starts at the most basic level. We engage each other 
to stay current with the evolving ``state-of-the-art'' and to work to 
eliminate duplication of effort. AFRL researchers coordinate at the 
scientist and engineer level to share their scientific discoveries and 
the very latest scientific and technological breakthroughs through 
informal opportunities such as technical conferences and symposiums 
which take place throughout the world.
    More formally, we are also increasing disciplined joint planning, 
which accelerates technology maturation and ensures taxpayer resources 
are best utilized. For example, the DOD service laboratories coordinate 
their S&T efforts through technology forums, such as the fixed wing 
vehicle program effort. Led by AFRL, the forum provides sharing of 
capability-focused technology investment roadmaps, as well as 
independent research and development industry plans among its members 
(including Boeing, Lockheed-Martin, Northrop Grumman and NASA). Similar 
forums also led by AFRL have addressed engines, hypersonics and the 
more electric aircraft initiative.
    Tactical technical coordination also occurs at the laboratory level 
which typically includes memorandums of agreement or understanding 
between specific Service laboratories or larger Communities of Interest 
(COIs). For example, in December 2011, AFRL established new initial 
collaboration areas with the Army's Research, Development and 
Engineering Command to coordinate command, control, communication, 
computers, intelligence, surveillance and reconnaissance (C4ISR), 
autonomy/robotics, and power/energy at the laboratory level. Other AFRL 
agreements with Army Materiel Command have included sensor-seeker 
exploitation technology and common cooperative leveraging of technology 
efforts.
    In addition to sharing technologies, the Service laboratories also 
share unique facilities. For instance, the Navy recently conducted 
validation testing on its new intercontinental ballistic missile (ICBM) 
motor on AFRL test stands at Edwards Air Force Base, CA. The Army also 
used AFRL's vertical wind tunnel to test the V-22 Osprey and several 
other helicopter configurations.
    The Air Force's relationship with DARPA is critical as about one-
third of the DARPA program is executed with AFRL contracts because of 
our laboratory leadership in key technology areas, unique facilities 
and strong ability to form world-class teams spanning industry, 
academia and other government laboratories. This close relationship 
between AFRL and DARPA promotes significant data sharing between 
organizations and has naturally led to integrated planning of key 
efforts.
    The Air Force's coordination with DARPA is formalized through 
sponsored direct work, partnerships and memorandums of understanding. 
There are several examples of AFRL and DARPA collaborations including 
the testing of new hypersonic glide vehicles, the Vulcan constant 
volume combustion (CVC) power generation turbine engine, the Autonomous 
Real-time Ground Ubiquitous Surveillance (ARGUS) imaging system--chosen 
for the Air Force's Gorgon Stare's electro-optical imager--and the 
Cognitive assistant that Learns and Organizes (CALO), a DARPA program 
technically managed by AFRL and incorporated into popular applications 
for iPhones.

                       LABORATORY INFRASTRUCTURE

    To meet the S&T demands of the current and future warfighter, we 
must translate Air Force S&T priorities into mission-ready facilities 
and infrastructure. The laboratory infrastructure is a cornerstone for 
enabling the required research and development necessary to maintain 
our technological superiority. AFRL is a world-class laboratory with 
more than 40 sites worldwide which includes AFOSR offices in Europe, 
Asia and South America, 539 primary facilities on 10 installations and 
11.2 million square feet of technical space.
    The 2005 Base Realignment and Closure (BRAC) effort successfully 
completed in September 2011 and provided several new, state-of-the-art 
facilities within AFRL. The Air Force strategy for BRAC 2005 was to 
consolidate and right-size operational and support units and, in the 
process, reduce excess infrastructure and capacity. The Laboratory's 
BRAC realignments successfully realized the Secretary of the Air 
Force's priorities for BRAC 2005, including the goals of realigning Air 
Force infrastructure with the future defense strategy, maximizing 
operational capability by eliminating excess physical capacity, and 
capitalizing on opportunities for joint activity.
    Encompassing nearly 80 percent of Air Force Materiel Command's BRAC 
program, the $665 million AFRL program required a movement of 1,380 
manpower authorizations, construction of more than 1.2 million square 
feet of new laboratory space, and delivery of over 340 truckloads of 
equipment to the gaining installations. The BRAC-directed 
consolidations created new S&T centers of excellence in human 
performance, sensors and space. For example, the 711 Human Performance 
Wing's Armstrong Complex was completed at Wright-Patterson AFB, OH, and 
included the addition of classrooms for the U.S. Air Force School of 
Aerospace Medicine, new laboratories, a centrifuge and altitude chamber 
and a Warfighter Readiness Center. This move consolidated 
geographically separated assets from the Brooks City Base, TX, and Mesa 
Research Site, AZ, enabling AFRL to build up technical synergy for 
human performance and exploit a center-of-mass of scientific, technical 
and acquisition expertise. In addition, the colocation of AFRL's combat 
casualty care research with similar activities at Brooke Army Medical 
Center on Fort Sam Houston, TX, promotes the rapid application of 
research findings to health care delivery, with synergistic 
opportunities to bring clinical insight into bench research.
    At Wright-Patterson AFB, ISR assets were consolidated from Rome, 
NY, and Hanscom AFB, MA, to create the new Sensors Range Complex. This 
new outdoor range mission includes research and development of space 
and airborne radar sensor concepts, as well as cost-effective detection 
and tracking of small, maneuvering airborne and ground-based targets. 
It will push the envelope for next-generation radio-frequency sensors. 
Through this consolidation, the Air Force will increase the efficiency 
in its operations with a multi-functional center of excellence in the 
rapidly changing technology area of C4ISR.
    While the last round of BRAC provided us an opportunity to 
consolidate and improve many laboratory facilities, the Air Force still 
has prioritized needs for military construction projects in other areas 
of AFRL. We recognize that we must continue to be vigilant and upgrade 
our S&T infrastructure in a timely manner so that major research and 
programs are not put at risk due to aging facilities. Maintaining high-
quality laboratory facilities is critical to remaining on the cutting 
edge of S&T and supporting the innovation necessary for the future.

                         WORLD-CLASS WORKFORCE

    Ensuring the Air Force continues to have war-winning technology 
requires the proactive management of our current Science, Technology, 
Engineering, and Mathematics (STEM) workforce and a deliberate effort 
to grow the laboratory scientists and engineers of the future. Having 
the most state-of-the-art laboratory facilities is futile without the 
right people to conduct the research inside the walls. We must attract, 
access and retain our Nation's best and brightest, and equip them 
through education, training and experience. The success of the Air 
Force S&T Program depends on an agile, capable workforce that leads 
cutting-edge research, explores emerging technology areas, and promotes 
innovation across government, industry, and academia.
    Published in 2010, the Air Force Technology Horizons report 
presented our vision of the key areas of S&T the Air Force must focus 
on over the next 2 decades to maintain a winning edge against a variety 
of threats. As a follow-on effort, we published the Bright Horizons 
STEM workforce strategic roadmap last year. This roadmap addresses the 
``people'' dimension of delivering and operating required technology by 
having the right STEM qualified people in the right place, at the right 
time, and with the right skills.
    Retaining our current world-class, highly-skilled workforce is an 
important part of the roadmap. The Air Force Laboratory Personnel 
Demonstration Project (Lab Demo), adopted in 1997, has done much to 
ensure AFRL's ability to attract and retain personnel. This flexible 
system has helped to achieve the best workforce for the mission, adjust 
the workforce for change and improve overall quality. Initially, the 
project covered approximately 2,500 scientists and engineers. By 
expanding the coverage to non-bargaining unit employees in Business 
Management and Professional, Technician, and Mission Support 
occupations, the project now encompasses approximately 3,300 AFRL 
employees.
    Several key flexibilities within the Lab Demo system have played a 
role in our ability to successfully retain personnel. For example, 
simplified, delegated position classification, broadbanding and a 
Contribution-based Compensation System (CCS) provide Laboratory 
leadership greater management capability of their workforce by 
transferring decisionmaking authority from a generally inflexible 
personnel hierarchy to front line supervisors who have firsthand 
knowledge of what is needed to accomplish the mission. Positions can be 
classified into one of four broadband levels, instead of one of 15 
grades, and the classification process takes only hours at the local 
level instead of weeks or months at the personnel center level. The 
broadband levels enhance pay progression and allow for a dual-track 
system where employees can advance through the levels based on 
contribution and technical merit. Finally, the CCS provides AFRL 
leadership the ability to manage employee expectations, focus employee 
efforts toward mission accomplishment and compensate employees 
appropriately based on contribution to the Laboratory. According to a 
recent survey conducted at the Laboratory, 94 percent of AFRL 
supervisors are positive toward the demonstration project initiatives 
and 70 percent of employees are satisfied with their pay and believe 
that top contributors are appropriately rewarded.
    Recruiting our STEM workforce in today's world presents both 
challenges and opportunities. Domestic competition for this valuable 
resource is intensifying, while competition from the international S&T 
community is simultaneously increasing. The rapid pace of global 
innovation has caused Air Force missions to evolve more quickly than 
before. For example, the rapid increase in cyber capabilities and 
vulnerabilities is driving the Air Force-wide mission evolution which 
necessitates changes in personnel requirements, including STEM.
    The flexibility inherent in the Lab Demo system has allowed us to 
better address some of the recruitment challenges as well. The 
legislated authority to direct hire candidates with advanced degrees 
has been extremely helpful. This authority has enabled the Laboratory 
to hire qualified scientists and engineers who possess a master's 
degree or a doctorate in our most needed fields in less than half the 
time of traditional hiring methods. Applicants can apply directly to 
AFRL and be brought on board in approximately 25 days as compared to 
the standard 80 to 160 days outside of the direct hire authority. In 
addition, the delegated paysetting authority within the broadbanded Lab 
Demo system allows leadership to offer competitive salaries to 
perspective candidates based on experience, academic qualifications and 
local labor market conditions rather than abide by the typically more 
rigid personnel rules. While the direct hire authority for those with 
advanced degrees has worked well to attract highly-qualified 
candidates, the Laboratory could make excellent use of a similar 
expedited authority to hire entry and journeyman-level experienced 
candidates who do not yet possess an advanced degree or recent bachelor 
degree graduates with skills in new or emerging fields and to more 
successfully recruit high quality minority candidates who are 
aggressively pursued by private industry.
    In addition to retaining and recruiting a workforce for today, the 
Air Force has also placed special emphasis on efforts to grow the 
laboratory workforce of the future. We recognize that pre-college 
(kindergarten through 12th grade) science and mathematics education has 
an important relationship to the future supply of U.S. scientific and 
technical personnel. We also recognize that global competition for STEM 
talent will undoubtedly intensify in the coming years. As such, we've 
set an outreach goal to aggressively pursue strategic partnerships and 
activities with our schools, universities, sister Services, 
professional associations, and other Federal agencies in an effort to 
grow and develop future STEM talent. For example, the Air Force 
sponsors the Junior Science and Humanities Symposium, a tri-Service 
collaboration where students (grades 9-12) compete for scholarships and 
recognition by presenting the results of their original research 
efforts to a panel of judges and an audience of their peers.
    The Air Force has also worked to appropriately target our outreach 
efforts in order to cultivate the skills we need to meet future 
requirements. For example, informed by the vision from Technology 
Horizons, the Air Force has identified over 100 key technology areas 
essential for current and future support to the warfighter. Air Force 
scholarships given through DOD Science, Mathematics and Research for 
Transformation (SMART) program are aligned to support these technology 
areas. The Air Force supports 4 MAJCOMs and over 40 individual 
facilities within those commands and selects approximately 100 students 
a year to meet requirements. SMART scholarship students maximize their 
time during 12-week internships during the summer and are doing truly 
amazing things for the sponsoring facilities. The SMART scholars 
continue to work with their respective facilities once they return to 
their colleges and universities.
    To coordinate our efforts, we've also established an Air Force-
level STEM office to act as a single focal point and better organize 
and synchronize outreach activities. The Air Force conducts over 150 
STEM engagements each year, ranging from scientists and engineers 
volunteering to judge science fairs to the National Defense Science and 
Engineering Graduate Program providing scholarships to STEM students. 
These engagements encourage and leverage local, state, and Federal STEM 
activities, affecting hundreds of thousands of students and teachers 
across the Nation. Our new outreach office allows us to improve 
coordination with other Service and agency STEM programs and gives us a 
better understanding of the effectiveness and impact of our STEM 
investments.

                         IMPACT OF SECTION 219

    The Air Force is critically dependent on technological advances to 
respond to emerging threats and to maintain a competitive advantage. 
However, since neither science nor threats are static, there is often a 
mismatch between defense planning, budget cycles and rapidly evolving 
threats and opportunities. The authority provided by section 219 of the 
Duncan Hunter National Defense Authorization Act gives AFRL a degree of 
flexibility to rapidly exploit scientific breakthroughs or respond to 
emerging threats. This flexibility increases the rate of innovation and 
accelerates the development and fielding of needed military 
capabilities to address current and future problems.
    In recent years, Section 219 funding has supported S&T in the areas 
of autonomous systems in contested environments, human performance 
augmentation, resilient cyber command and control networks, space 
situational awareness, assured operations in space, nanotechnology, 
directed energy protection, robust communications, cyber threats, laser 
technologies, and energy. For example, it has allowed AFRL to respond 
to rapidly evolving S&T projects such as investigating an insect vision 
system for sense-and-avoid applications and all-solid-state lithium 
batteries. It has also funded transition of technologies that have been 
delivered in theater for operational evaluation, such as the Sand 
Dragon and Speckles projects.
    Section 219 authority has funded 52 workforce development 
activities that cover a very wide range of opportunities related to the 
identification, hiring and recruiting of a quality science, 
engineering, and technology workforce. For example, AFRL supports 
several outreach and development initiatives such as the Wright Scholar 
Research Assistant Program, which enables the Laboratory to hire 
approximately 40 top-quality high school STEM students to assist with 
in-house summer research. We've also used Section 219 funding for our 
Air Force STEM Outreach Coordination Office referenced earlier.
    This authority is also being used by AFRL to fund upgrades to 
internal facilities, such as a hard-target fuse system research 
laboratory; an infrared/optical detector characterization and terahertz 
electronics laboratory for ISR and space situational awareness; and a 
combustion instability laboratory for liquid rocket engines. Overall, 
the section 219 authority has generated a positive impact at AFRL for 
exploiting S&T for the warfighter.

                               CONCLUSION

    The Air Force depends on its S&T Program to discover, develop, and 
demonstrate high-payoff technologies needed to address the ever-
changing strategic and operational environment and to sustain air, 
space and cyberspace capabilities now and into the future. Today's Air 
Force stands as the most powerful air, space and cyber force in the 
world because of past technological advances that have been transformed 
into revolutionary new capabilities. AFRL has and continues to 
innovatively provide this critical support to the Air Force by 
balancing near-, mid- and far-term research, coordinating with and 
leveraging efforts across academia, industry and the other Services; 
maintaining an efficient and effective laboratory infrastructure; and 
retaining and developing a world-class cadre of scientists and 
engineers.
    Ms. Chairwoman, thank you again for the opportunity to testify 
today and thank you for your continuing support of the Air Force S&T 
Program and the AFRL.

    Senator Hagan. Thank you all very much for your opening 
comments, your remarks, and certainly the depth and breadth of 
the research that is taking place in the DOD labs.
    What I would like to do is inform the Senators we will do a 
7-minute round of questions.
    Secretary Lemnios, prior to your confirmation hearing in 
2009 in your advance policy questions, you were asked if you 
support significantly increased delegation of operating 
authority to the lab directors. In your response you said, ``I 
believe in aligning responsibility at the lowest possible level 
needed to execute. Consequently, I support in principle 
delegating increased operating authority to the lab directors. 
If confirmed, I will direct the Deputy Under Secretary for 
Laboratories and Basic Services to review personnel management, 
infrastructure recapitalization, and other lab issues and 
provide recommendations to address identified problems. I will 
then work towards developing the necessary authorities for lab 
directors based upon these recommendations.''
    Can you describe briefly what you have done over the last 3 
years in developing these authorities and recommendations for 
the lab directors?
    Mr. Lemnios. Senator, we are absolutely doing that. Much of 
that work is centered around the implementation of the 219 
authorities to make sure that we understand each of the 
Services that implemented those authorities differently for 
different purposes, still aligned with the legislation.
    There are two things that we took on immediately after I 
came into the office. The first was standing up our executive 
committee which aligns the Services both in the laboratory 
sense but also the broader S&T areas. The second, more recently 
we have stood up a DOD STEM executive board to help us 
understand across the Department where the skill set is 
lacking, and that certainly ties to the workforce model that is 
being developed by DOD.
    So we have really centered on--we have looked at where the 
workforce is limiting and where we need to add to that, and 
then I work with the laboratory directors to implement those 
directly. I think it has to be pushed to the lowest level, but 
it has to be coordinated, and that is the key.
    Senator Hagan. How about recommendations to address 
identified problems?
    Mr. Lemnios. I hear problems every day. The issue is not 
identifying the problems. The issue is resourcing solutions to 
the problems and finding solutions that we can, in fact, adopt 
broadly.
    I think as you read our testimony, as you read the 
testimony of the Services, the challenge that we have across 
the Department in our laboratories is supporting the Service-
specific needs of each laboratory but then leveraging the 
broader context of how we can leverage this enterprise for 
joint use. We are in the middle of that transition now. If you 
look at the S&T priorities that we outlined last year we spoke 
about in the cyber hearing just a few weeks ago, all of those 
are cross-cuts. They are all cross-cutting technologies that 
are not owned by one laboratory or another, but we really have 
to integrate those efforts. So I guess I would say on my desk 
the inbox is full and the outbox is being sourced by what we 
can afford to do and what makes sense to do across DOD.
    Senator Hagan. Secretary Lemnios, let me give you a 
statement. In 2009, the National Academies were asked to review 
the basic research laboratory facilities of National 
Aeronautics and Space Administration (NASA). In one of their 
findings, they stated--and this is a quote--``based on the 
experience and expertise of its members, the committee believes 
that the equipment and facilities at NASA's basic research 
laboratories are inferior to those at comparable DOE 
laboratories, top-tier U.S. universities, and corporate 
research laboratories and are about the same as those at basic 
research laboratories of DOD.''
    Are you disturbed by the inference from this National 
Academies' report that the equipment and facilities of DOD's 
basic research labs are inferior to those of comparable DOE 
labs and then the top-tier universities and corporate research 
labs?
    Mr. Lemnios. I am concerned about that. I have spoken with 
the lab directors about that issue. But the devil is in the 
details. So as we look at each of these technology areas, 
whether it is electronic warfare or cyber or autonomy--the Navy 
just recently opened up a world-class robotics laboratory not 
too far from here. I can point to places where DOD, in fact, 
has a leadership role, but that leadership role has to include 
not only the facilities but the personnel and the projects. Dr. 
Freeman mentioned that in her opening comments, and I 
absolutely agree that that is the way we have to structure it.
    Senator Hagan. Talking about the differences and the MILCON 
request, when Services prioritize their MILCON request, in many 
cases it seems that laboratory infrastructure sometimes does 
not get the top attention. It is obviously competing against 
runways, piers, hospitals, gyms, barracks, and roads and other 
elements of the base infrastructure. Historically it appears to 
some of us that laboratories are at or near the bottom of these 
MILCON requests, and consequently, aside from the benefits from 
some of the last BRAC moves, the aging DOD laboratory 
infrastructure needs attention. I was astounded when Dr. 
Freeman stated that one of the buildings was from 1828.
    But for Dr. Freeman, Ms. Lacey, and Dr. Walker, what is 
your Service doing to address the infrastructure and MILCON 
needs of your laboratories? Dr. Freeman, if you want to start.
    Dr. Freeman. So, ma'am, what we are doing is as I 
mentioned, we are trying to, first of all, do a survey and 
trying to look at what the real state of our facilities are. So 
the first thing was to identify how many facilities we really 
have. The second is to go out and actually look at the 
infrastructure and categorize and understand what the condition 
is of those different buildings. Then what we are going to do 
is we are going to look at those and identify, first of all, 
what the major worst things that we have to take care of are 
that are keeping us from doing our mission-essential tasks, and 
then we are going to go down that next level of what we need to 
improve and what do we need to improve.
    Up to this point, those kinds of improvements are made at 
the individual laboratory level, and they never actually bubble 
up to the corporate level, even to my level, of what needs to 
be done. So the first thing we are doing is shedding light on 
it. After we shed light on it and understand those things, then 
we can go work with the commands and help figure out what we 
can do to improve our competition for capabilities in the 
MILCON field.
    That is why it really is important that Assistant Secretary 
Hammack and I work together on this, that we can actually 
figure out what we can do to get commands to put the 
laboratories on a different scale than where we are.
    Senator Hagan. I guess I am surprised you do not have that 
list already.
    Dr. Freeman. Right. We do not.
    Senator Hagan. When will you get it? When will the survey 
be done?
    Dr. Freeman. The survey of just identifying all the 
facilities and the infrastructure that we own, because it is in 
so many different places, so many different installations.
    The second thing is by the end of October, I should be able 
to have the result of the rest of that, which is have these 
engineers go out and look at these facilities and categorize 
what needs to be done for them. So by October is when I am 
looking.
    Senator Hagan. Ms. Lacey, if you can go ahead and then Dr. 
Walker. Thank you.
    Ms. Lacey. Ma'am, I am not too proud to say the Army is 
ahead of the Navy in this domain. We have not gone out and 
tried to analyze the capacity and capability that we have in 
our facilities and infrastructure. While every technical 
director at every location of every center knows that inside 
and out, at the institutional level, we have not looked across 
the warfare centers and the NRL. They, however, are looked at 
inside their system command to which they are assigned. So the 
aviation community looks very closely at the capability and 
capacity that they have in their facilities for aviation. The 
surface warriors look at that for what they have in the surface 
warrior community, submarine, et cetera. But I have not done 
the integration across the enterprise to take a look at that.
    Senator Hagan. Are you planning to?
    Ms. Lacey. I am.
    Senator Hagan. When will that be done?
    Ms. Lacey. Ma'am, I am sure that is at least a year off 
before we will have the results.
    Senator Hagan. Dr. Walker?
    Dr. Walker. Yes. In my opening statement, I mentioned one 
of the benefits of having one lab with multiple tech 
directorates in different locations as efficiencies. So one of 
the things we have been able to do by the one lab concept is 
look across the lab and see what are our needs. So we have a 
list of 10 things that we want to do.
    As you mentioned, oftentimes those are not judged just on--
the Major Command does not look just at research value. They 
look at safety and runways and other things. I would say over 
the last 10 years, the MILCON that has been approved by the Air 
Force is roughly in the $40 million range. One of the reasons 
for that is we had this BRAC in 2005 that provided about $450 
million to upgrade AFRL facilities in different locations.
    So I feel like right now AFRL is in pretty good shape in 
terms of facilities and infrastructure. We can always do more. 
The thing on our top 10 list right now is putting a fence 
around the Rome information directorate which does not have a 
fence around it, and that is where we do cyber work.
    Senator Hagan. That is very important.
    Dr. Walker. That is on our top 10.
    Senator Hagan. You mentioned 539 in your opening comments.
    Dr. Walker. 539 facilities at 10 different installations. 
Those are buildings at 10 different installations.
    Senator Hagan. Thank you.
    Secretary Lemnios, it appears to me that, my time is up and 
I will come back. But first, I guess I am surprised that we do 
not know the depth and breadth of the laboratories that are 
under your purview. Do you want to comment?
    Mr. Lemnios. Let me just briefly comment. Asking a very 
simple question, not getting a simple answer is a frustration 
for everybody. We should have that and we simply do not. The 
reason for that is that the operating models are different. A 
warfare center looks a little bit different than a basic 
research laboratory, looks a little bit different than an 
engineering center. So some of this is driven by what is the 
function of those facilities and how do we structure that, 
which goes precisely to the challenge that Congress gave us in 
terms of building a workforce model and a strategic plan for 
our workforce so we really understand where the core 
competencies are. I can take a building number and I can map it 
to a ZIP code and I can map it to a functional element, but at 
the end of the day, I have to also make sure that I have the 
right workforce in that environment. So some of this is driven 
by buildings and a lot of it, I think, is driven by personnel.
    It is a daunting challenge.
    Senator Hagan. It seems like we need an integrated approach 
to what is it that we need, how is it helping the warfighter, 
and what our long-term R&D goals are and looking at it at an 
integrated level.
    Mr. Lemnios. Ma'am, you are exactly right.
    Senator Hagan. Senator Portman?
    Senator Portman. Thank you very much, Madam Chair.
    I was just remembering being out at AFRL at Wright-
Patterson and seeing some of the Wright brothers wind tunnel 
projects there. So it is not 1828 buildings, but some of the 
facilities there are also in need of some modernization. But 
you have done a terrific job and I appreciate your support of 
the lab.
    I would like to ask a general question first, if I could, 
and it really, I guess, is directed to you, Secretary Lemnios, 
which is about sequestration. We are talking about $492 billion 
in sequestration that is on the books. It is slated to happen 
January 1st next year. That is about $55 billion in fiscal year 
2013. What I would like to hear from you is how would that 
impact the labs, one? Two, what contingency plans do you have 
in place to deal with it?
    Mr. Lemnios. Senator Portman, it would be absolutely 
devastating. We have no plans right now for that. But I will 
tell you, as the Secretary has testified, that that would be a 
devastating effect on DOD and certainly on the Nation.
    Senator Portman. You say you have no plans to deal with it. 
Do you have any contingency plans to try to deal with, as you 
call it, devastating impact of the sequestration reductions?
    Mr. Lemnios. The effect is so severe that until we get to a 
point where we understand what the parameters are, we could be 
looking at pluses and minuses of very large numbers, and we 
simply have not gone through that exercise yet. We are hoping 
that that will be resolved on the Hill, that in fact we will 
see a solution that does not get us to that edge of the cliff.
    Senator Portman. Do you think that it would endanger our 
national security and specifically put our warfighters in 
danger not to have the level of funding you think is necessary 
at our labs?
    Mr. Lemnios. I think the Secretary has testified that the 
effect would be serious and the impact, following that thread 
back to the laboratories--I have not done that assessment, but 
the Secretary's testimony has been that this would be a serious 
impact.
    Senator Portman. He has used the word ``devastating.'' He 
has also said it would hollow out the force. We will work with 
you to try to avoid this. But I do think that you ought to make 
your initial assessment at least and let it be known to this 
subcommittee and others within DOD so that we can be more 
effective in making our arguments as to why sequestration would 
be so damaging to our labs and our research and to the 
warfighters ultimately.
    I have to ask about the Defense RIP. You heard me talk 
about it a minute ago. $700 million received so far. Never been 
in the Department's core budget. Why have you not ever asked 
for funding for it? Do you think it is not important? Do you 
think it is something that is not on a priority list?
    Mr. Lemnios. Senator, this came to the table at a time when 
we were collapsing the budget through the Budget Control Act. 
We had submitted the President's budget request for 2012 at a 
time when this came up. At the same time, we were trying to 
balance the issues that we had on the table. This was passed in 
fiscal year 2011. There was $500 million that was appropriated. 
We had four broad agency announcements that were put out. We 
are, in fact, evaluating those now. We are going through source 
selection, and we are about to award efforts on those.
    The good news is the legislation is well-structured with 
clarity of effect; that is, once a contract is let, within 2 
years we will know whether we have a capability that supports 
either our warfighter or supports an acquisition program where 
we can measure the effectiveness. As we go through the first 
round of RIP funding, we want to see what those effects are. 
Did we, in fact, get the impact that was postulated when the 
legislation was written? We hope we will, and we will know once 
those contracts end.
    I think the question as to why it was not in the base 
budget, it was simply a time when we were looking at what our 
base efforts were going to be, let alone trying to add $500 
million into the budget. In fact, we took the leadership from 
the Hill on that.
    Senator Portman. Does the Defense RIP benefit the labs?
    Mr. Lemnios. The RIP certainly uses technologies that come 
out of the labs. To date, we have received 3,600 white papers. 
Not all will end up in contract awards. Many of those use 
technologies that came out of our labs, were submitted through 
contract R&D agreements or other efforts. So in many cases, the 
ideas are seeded across the defense industrial base.
    Senator Portman. You talked about the importance of human 
capital--all of you did--the importance of your people and 
having a trained workforce and the need for us to continue to 
focus on some of these core disciplines. I think you would all 
agree that without the scientists and engineers being world-
class, we cannot have a world-class program and that there is 
an important relationship between the DOD graduate school 
programs and the officers that end up in your labs. Certainly I 
have seen that with the Air Force Institute of Technology 
(AFIT) and AFRL. As a whole, DOD's laboratory budgets have 
fared pretty well as I said earlier.
    In some cases, these Service graduate programs have served 
to pay the bill, I think, for some other parts of DOD's budget 
including the labs. As an example, in the Air Force, Dr. 
Walker, AFIT, which is your graduate school--and it is not just 
for the Air Force. It is used Service-wide, very important for 
developing those scientists and engineers. But AFIT will lose 
in your fiscal year 2013 budget 25 percent of its manpower. Is 
that right?
    Dr. Walker. Sir, I would have to check on that for you. It 
is not part of my portfolio. It is not part of the S&T 
portfolio.
    Senator Portman. I will assert it then and maybe instead 
ask you what you think about that. Given these planned 
reductions, are you concerned about the impact it is going to 
have on your laboratories' futures, the scientist and engineer 
talent pool that you rely on?
    Dr. Walker. That would be a concern. I think AFIT does a 
great job at educating military, Air Force, and other folks 
especially at the master's degree level, and it is really a 
center of some of our cyber training that we give our folks. 
But that is actually a different budget.
    Senator Portman. It is a different budget, but it impacts 
your lab and it impacts all of your labs, I would assert 
although the Navy has its own graduate program, as I understand 
it. So I would hope that you all would speak up about that and 
work with us to try to ensure that we are not making decisions 
that short-term seem to be necessary for budget savings but 
longer-term are going to create the very problems you talked 
about in all of your testimonies which is having the kind of 
human capital to have a cutting-edge research program for our 
warfighters. So we appreciate your giving us whatever input you 
can on the impact of that proposed reduction of 25 percent in 
AFIT on your labs, particularly the AFRL.
    The final question that I have really relates to this 
infrastructure question. If you can give us more detail as to 
what capabilities specifically we are in danger of losing 
because of outdated facilities, that is very helpful to us. In 
this budget climate, we need to know specifically which of your 
facilities, if not updated, will result in a capability being 
lost. Are we losing any quality researchers because of it? You 
have made general points about the need to attract the best and 
the brightest. Is there an aging facility within your ambit 
that is causing you to either not be able to attract or retain 
the best people?
    Then, of course, how much, as the chair talked earlier, 
does this relate to our competitive position vis-a-vis other 
countries, particularly China, but other countries that are 
moving ahead with updated, modern laboratory facilities? Ms. 
Lacey, I think you might have some comments on that right now. 
We are happy to hear from you now, but also anything specific 
you can give us would be very helpful.
    Ms. Lacey. Sir, I would prefer to take that for the record.
    [The information referred to follows:]

    The Department of the Navy recognizes the need to continue 
investment in the technical infrastructure to maintain technological 
advantage for the future. Within the year, the Department will begin a 
review of the laboratory facilities to assess their condition, 
capability, and capacity with regard to their ability to perform their 
mission and retain/attract scientists and engineers. Until the review 
no specific examples of capabilities in jeopardy can be cited.

    Ms. Lacey. We have a wide variety of technologies that we 
work on in our laboratories, and as Mr. Lemnios pointed out, 
you have to take a look at the context for each and every one 
of them. But we do have some areas where we are concerned.
    Senator Portman. Thank you.
    Thank you, Madam Chair.
    Senator Hagan. Senator Shaheen?
    Senator Shaheen. Thank you, Madam Chair, and Senator 
Portman. Thank you both for holding this hearing this 
afternoon.
    Thank you all for your testimony. Please share our 
appreciation for the work of the dedicated scientists and 
engineers who work at all of our Nation's laboratories. As you 
all may know, I represent New Hampshire where the Cold Regions 
Lab is located in Hanover, NH. Dr. Freeman, I was there last 
year when they celebrated their 50th anniversary. So I can 
appreciate the facilities challenges that you are raising. I 
think they have had some rehab done there, but clearly that is 
an issue that a lot of our facilities have.
    Secretary Lemnios, I want to follow up on the issues that 
Senator Portman was raising about workforce because all of you, 
as he said and as you said so eloquently in your testimonies, 
talked about the importance of a workforce educated in the STEM 
subjects who can be the scientists and engineers that we need 
to do the research in our laboratories. Right now over 57 
percent of Federal employees in DOD S&T labs are over the age 
of 45. So clearly making sure that we can recruit the next 
generation at a time when we are not turning out the number of 
scientists and engineers and STEM graduates that we need in 
this country is challenging. So I wonder, Secretary Lemnios, if 
you could talk a little bit about the strategies that you are 
using to recruit those folks.
    I would really also like to very much hear from Ms. Lacey--
you talked about the number of engineers and scientists that 
you have hired since 2009, Secretary Lemnios would you please 
add to that, some of the things that you are doing to recruit 
those folks.
    Mr. Lemnios. Senator, let me start by providing some 
insight on a couple of things. It is not all doom. There is 
some great points of light here that we ought to recognize.
    This summer we have over 400 students, Students Making 
Academically Rewarding Trips (SMART) students from our STEM 
program, entering the Department's laboratories. These are 
first-rate undergraduates that are providing a year of service 
in our laboratories for each year of scholarship that we 
provide them. It is a remarkably effective program, and it is a 
program that couples us with rising stars in their freshman and 
sophomore years, and in many cases we have hired those students 
as laboratory employees. That is a great thing.
    In fact, in my career path, I will tell you--it is not in 
the testimony, but I will tell you that my graduate work was 
partially sponsored by the Office of Naval Research (ONR). In 
fact, a good friend of mine, Max Yoder, was one of my peers, 
one of my mentors, and provided me tremendous insight very 
early in my career and helped me along the way.
    Senator Shaheen. Can I just ask how you recruit those 
students?
    Mr. Lemnios. It is an open call. We have a website, a STEM 
website, where we announce this. The submissions have just been 
completed for the fall 2012 semester. It is very similar to a 
college application. It is a terrific program for students. We 
offer undergraduate students $25,000 a year plus tuition, plus 
$1,000 for books and health insurance and a guaranteed position 
in one of DOD's laboratories. So beyond the money, which sounds 
great, it is the ability to work side-by-side with a researcher 
on a DOD challenge that few people would see. So I look at that 
as really an important subject.
    The other part of this, of course, is the connections that 
the laboratories have built with academia. Our DOD request for 
basic research--that is, the most fundamental research in our 
portfolio--is about $2 billion a year. Much of that is executed 
through our DOD's laboratories and most of that is actually 
executed in academia side-by-side with a researcher in our 
laboratories.
    Just very quickly. Last fall I had an opportunity to visit 
many of the Department's laboratories, and I spoke with the lab 
bench researchers, people that I like to hang out with. We have 
several hundred post doctoral researchers in our laboratories. 
By all measure, that is a great indicator. The laboratories 
today are receiving patents from the U.S. Patent and Trademark 
Office at just shy of 600-a-year, almost 2-a-day. This is on 
par with best-in-class world companies around the world.
    So while I challenge our laboratory infrastructure 
internally and get these guys, let us think, how do we drive 
faster, how do we make transitions happen more quickly, the 
numbers that I am seeing give me a sense--there is a remarkable 
sense of horsepower here. I would challenge that we are in 
second place. We are not in second place.
    Senator Shaheen. That is good to hear.
    Ms. Lacey, are you all doing anything that is different?
    Ms. Lacey. Ma'am, we are doing much of the same. We are 
taking great advantage of the OSD SMART program, the 
scholarships. About a third of those are actually doing summer 
internships at our Navy laboratories and warfare centers.
    But at the end of the day, recruiting is a contact sport, 
and we need to have our supervisors develop relationships with 
those universities, whether it is in conducting that research 
or collaborating on that research or making sure that the 
professors are aware of the needs of the laboratory because the 
students listen to them more so than they listen to the 
recruiters or listen to us. So we found those relationships 
particularly important.
    To that end, for example, we have established a system 
engineering graduate curriculum at Tuskegee. We have formed 
consortiums with the University of Michigan and other 
universities in naval engineering, which is, of course, 
particularly important to us. With the section 219 program, we 
have actually sponsored graduate fellowships at our NRL that 
are called the Karle Fellows, named after our Nobel Prize 
winner, Dr. Jerome Karle, and his wife who was also there.
    So there is a wide variety of activities that are going on. 
Most of our warfare centers and laboratories also have unique 
relationships with the universities that they tend to recruit 
from located close by because students, once they graduate, 
tend to not move real far.
    Senator Shaheen. Let me just point out the University of 
New Hampshire has a very good engineering school.
    Ms. Lacey. Yes, ma'am. We hire in our Newport laboratory 
from the University of New Hampshire.
    Senator Shaheen. Thank you.
    Now, can you talk about how--I do not know who would like 
to address this, but talk about how these labs interact with 
private industry and how they aid technology transfer? Also, 
specifically, can you talk about whether or not you make use of 
the Small Business Infrastructure Research (SBIR) program in 
helping you with some of the work that you are doing? Dr. 
Freeman?
    Dr. Freeman. If I may, let me start with that.
    The first thing that we do is that the money that is in the 
core budget, in our S&T core budget, pays for people in the 
laboratories, as well as facilities, but also a large portion, 
particularly of the 6.3 dollars, goes out to industry to 
actually build the prototypes, someone to help us get the 
hardware and really do the research to make it real. In other 
places we have small business, as well as large companies, 
involved in that.
    We use the SBIR program and we use the RIF as well to try 
to focus and then line up even more this connection with these 
technology-enabled capability demonstrations that we have been 
doing in the Army. We are trying to get the Rapid Innovation 
Fund (RIF) proposals tied up with those efforts that are going 
on internal to the laboratory, many of which will actually go 
out and have proposals in order to build the hardware that is 
going to be demonstrated in large industries but also bringing 
these smaller companies and these nontraditional folks in 
through the RIF and the SBIR process in to be able to compete 
and/or participate in those programs and those demonstrations. 
So a lot of our efforts are done through industry.
    A couple of the things that I wanted to focus on with 
transition. We have a number of programs and efforts that do 
transition and have transitioned recently. Most of those 
transitions are where industry has taken something--we have 
either written a specification, we have written a tech data 
package, or they have been performers on the S&T program, and 
then when those things went into acquisition, those are the 
people who actually then either compete for the things that we 
specified or indeed then are the performers on those 
acquisition contracts.
    So a large number of things. We have affordable seeker 
programs that are being competed where industry is trying to 
build some seekers for S&T so that they can be affordable, and 
that can only be done in industry, working on those things.
    Similarly we had software code being worked. Then we worked 
that and we transitioned that to industry so that they can 
compete and/or use that in their communications program. So we 
have a number of mechanisms both using the core dollars and 
then transitioning either directly or through industry to get 
those things out into acquisition programs and eventually out 
to the warfighter.
    Senator Shaheen. Thank you. My time has expired, but Madam 
Chair, I have to go preside. Can I ask one more question before 
I leave?
    Senator Hagan. Certainly.
    Senator Shaheen. This is for Ms. Lacey. I know that both 
the Army and the Air Force are working on this, but I know a 
little bit more about what the Navy is doing. I know that 
Secretary Mabus had set a very ambitious goal for moving to 
energy efficiency and renewable and alternative technologies 
for your energy use. I wonder if you could speak to the role 
that the labs are playing and how you are moving on energy 
issues in a way to make us more energy independent.
    Ms. Lacey. Ma'am, we have been involved in certain energy 
issues for a long, long time, and the fuel requirements for 
ship and aircraft has always been a big deal to us. Back in the 
1990s and early 2000s, we were working on technologies in our 
ship hull design, for example, to reduce drag which has the 
side effect of increasing fuel efficiency, the stern flap, if 
you have ever heard that.
    Senator Shaheen. I have. I was on the USS Kearsarge and I 
saw that demonstrated very clearly, hull coatings that reduce 
the adhesion of barnacles go a long way to reducing that 
friction and things like that.
    Ms. Lacey. So we have been in that world for a long, long 
time. Now, of course, the game is kicked up a few notches here, 
and we are in that part of the business where there is a 
military-unique requirement that we need to understand, but at 
the end of the day, many of these technologies are going to be 
scaled up by our industry partners to make them viable to meet 
the Navy needs.
    Senator Shaheen. Thank you.
    Anything that the Army or Air Force is doing in this area 
that you think is worth noting?
    Dr. Freeman. Yes, absolutely, ma'am. We have across all of 
our portfolios, whether it be the soldier portfolio or the 
ground portfolio or the air portfolio or the C3I portfolio--we 
maintain a focus on power and energy. In fact, in our 2013 
budget request, we have $161 million associated with efforts to 
look at improving power and energy, looking at the efficiency 
efforts, looking at not only components but power management, 
looking at how to get alternative fuels into engines for those 
things, alternative battery technologies. So we actually have 
been doing this also for quite a long time and are moving very 
much into getting it into the Army lexicon as well, along with 
Ms. Hammack, the Assistant Secretary for Installations, Energy, 
and Environment. We are working those things particularly on 
operational energy. Our focus is looking at operational energy. 
So S&T is really, really into this in the Army.
    Senator Shaheen. I am hoping we can get it into the lexicon 
of all of our Federal agencies.
    Dr. Walker. In the Air Force, ma'am, we are heavily 
invested in turbine engine technologies to reduce fuel 
consumption 25 percent over state-of-the-art engines today. So 
we have a new program starting up to look at technology options 
for future engine programs.
    Senator Shaheen. Thank you all very much.
    Thank you, Madam Chair.
    Senator Hagan. Thank you, Senator Shaheen.
    I wanted to go back to the RIP. Secretary Lemnios, you had 
an opportunity to speak and then, Dr. Freeman, you mentioned it 
a little bit in your answer a few minutes ago.
    But, we established this program 2 years ago to help fund 
the rapid transition of innovative technologies largely from 
the small business community to the warfighter. I also serve on 
the Small Business Committee, and last year data was presented 
that showed that while the small business community receives 
only 4 percent of Federal R&D dollars, the small businesses 
actually produce 38 percent of the patents granted.
    So, Dr. Freeman, Ms. Lacey, and Dr. Walker, what are your 
views on the RIP, and do you find the program useful to meet 
time-sensitive DOD needs in a responsive manner?
    Dr. Freeman. Let me start and I will try to be as brief as 
possible. I believe this new initiative really has been a boon 
to the Army, and the value that it has had for us is opening up 
more collaborative opportunities with both small business and 
nontraditional suppliers to the Government. These processes by 
which we have put out these BAAs--and we had an Army BAA that 
went out--we got over 1,000 responses, and then we were able to 
sort through those. We did put them up against our priorities 
in S&T, those technology-enabled capability demonstrations. We 
have selected those. They were totally competitive. It was a 
very, very tough competition. We had not just the laboratories 
involved, but we had the program managers involved who would be 
receiving these technologies, et cetera. It was a very, very 
rigid process by which we worked through and rated these 
things. Then we picked over 10 percent to actually fund with 
the fiscal year 2011 available funds. So that is a pretty good 
return on investment for everybody doing it.
    Having said that, we also then scrubbed that list again and 
said, hey, there are some really neat things that did not 
exactly fit in with these tech Ds. We may want to pursue these 
out of our core budget as well. So part of that was we got 
information that we would have gotten no other way about 
innovative small business and nontraditional folks, and we got 
it in and we have coupled it with our program managers in S&T 
really trying to give them opportunities then to use these and 
have the companies demonstrate their technologies so everybody 
can see them.
    Senator Hagan. Ms. Lacey?
    Ms. Lacey. I will just add to that. We see some of the same 
benefits. We also see that many of these companies have 
proposed teaming up with our laboratories and warfare centers 
to then actually test, try out, and analyze the products that 
they make because they do not come to the table with a full 
understanding from the warfighting point of view. So that is a 
good thing that I see happening.
    The other thing is we too saw that ``aha'' from some of our 
program managers where they looked at something and said it did 
not quite fit the ground rules but they liked it and they have 
started collaborations with the companies.
    So we are cautiously optimistic that we are going to see 
results. We have only let two contracts so far, but we are in 
negotiations with almost 5 dozen as we speak.
    Dr. Walker. I will just pile onto the comments already 
there. I am cautiously optimistic. I think we are seeing the 
value in that our product centers are much more engaged with 
looking at small business because of the RIF program and seeing 
how what they offer can feed into their programs of record. So 
that has been a good thing. We specifically looked at small 
businesses that had technologies that were at about a tech 
readiness level of 7. So they were ready. With a little bit 
more money, they could be transitioned into our programs of 
record. So we are not only working with the product centers 
with RIF but also having meetings with the larger companies 
saying if these smaller companies are successful, how are you 
going to team with them and bring this into the programs.
    Senator Hagan. That sounds positive to me.
    Let me move to the Laboratory Quality Improvement Program 
(LQIP). The DOD LQIP, established in 1993, seeks to improve the 
efficiency of the labs by streamlining their business practices 
and granting the heads of the labs increased authority to 
operate their organizations in a business-like fashion.
    One of the outcomes of the LQIP was the creation of a panel 
to provide recommendations on DOD lab personnel issues.
    Secretary Lemnios, currently the panel for personnel falls 
under your oversight, and what has this panel recently 
accomplished?
    Mr. Lemnios. Senator, I have looked at the LQIP, the 
organization, and what has happened. I asked a very simple 
question. When is the last three times you met and what did you 
actually produce? There was a long pause.
    As I have looked at it, you challenged us, Congress 
challenged us, through 10 U.S.C. 1115 to build a functional 
capability set of managers around a workforce model that the 
Department can use much more broadly. We are looking at how we 
take what was being done under LQIP or what should have been 
done under LQIP and apply it to a workforce model for the 
Department at large; that is, understand where we have 
strength, where we have gaps in our workforce broadly to 
include our engineering functional areas and our S&T functional 
areas. The S&T functional manager is actually a new element of 
this enterprise. So working with the Services, we are looking 
at how we fit this strategic model and really capture not only 
what exists now but what needs to exist in our laboratories 
going forward.
    Senator Hagan. We have heard that DOD is considering moving 
this panel out from under your oversight to the Under Secretary 
of Defense for Personnel and Readiness. Would it be beneficial 
to the labs to do that?
    Mr. Lemnios. I am not sure. I am not sure how we are going 
to go on that candidly. I think there are arguments that I have 
heard--well, there are arguments that I have heard both ways on 
this. Again, I want to go back and look at how this work ties 
to the broader charge that the U.S. Code has given us to lay 
out a workforce, a functional management activity for DOD.
    Senator Hagan. Our other witnesses, what are your views on 
the effectiveness of the LQIP, and do you feel that it should 
stay under the Secretary or potentially shift to the Under 
Secretary of Defense for Personnel and Readiness? Should there 
be other panels, for instance, laboratory infrastructure?
    Ms. Lacey. Ma'am, if I could. First of all, I believe that 
the LQIP has done tremendous work over the years, and ``over 
the years'' is the important thing here. They took a lot of the 
lessons that we learned with the China Lake demo in the 1980s 
and translated that into some of the flexibilities that 
Congress granted us around the S&T reinvention laboratories. We 
have had a fair amount of authorities, and we have not really 
needed much. The panel, as Mr. Lemnios said, slowed down.
    Now, that said, I do think that an infrastructure panel, 
which was originally envisioned under the legislation, should 
be activated, number one.
    Number two, you asked about where does it belong. In AT&L 
or underneath P&R? I feel strongly it belongs under AT&L, but 
there needs to be a partnership with P&R. Over the years, that 
has been stronger and weaker.
    Dr. Freeman. Let me add on to that. So this is very much 
the same thought process. I believe that the intent of having a 
group of people from across the Services who understand what 
the laboratory systems are, how they operate, and what they 
need is really, really an important body to have. Whether we 
actually had the right people after everything got restructured 
over the years on the panels, that could be part of why they 
did not, in the last couple of years, operate as much as they 
should have. So I believe we really do need to review, 
restructure, and reconstitute some kind of a group like the 
LQIP to be able to provide advice and recommendation to both 
the senior service leads and to ASDR&E.
    I do believe that if you put it in and move it to the 
personnel side only, you are actually probably not doing a 
great service in that because I believe it is much broader than 
just personnel issues. I believe that the effectiveness and the 
efficiency of such a group deals with much more than policy and 
personnel. Therefore, the Army has not been supportive at all 
of moving it over to P&R.
    Senator Hagan. Dr. Walker?
    Dr. Walker. The Air Force agrees with the Army and the 
Navy. [Laughter.]
    Senator Hagan. Thank you.
    I think Senator Shaheen was asking about personnel, and 
obviously our personnel I think are our national assets. We 
want to be sure that we have the engineers and scientists 
coming up through the educational areas throughout our country 
to be sure that we can fill these very, very important STEM 
jobs that will be so necessary not only now but in the future.
    I know the Army has a program called Military Accessions 
Vital to the National Interest which grants rapid U.S. 
citizenship to non-U.S. citizens that enlist with medical or 
cultural and linguistics expertise. What are your views on 
expanding this program to gain access to non-U.S. citizens that 
graduate with advanced technical degrees from our U.S. 
universities and then could become DOD civilians?
    Dr. Freeman. Since the Army has the program, I will start 
and then let everybody else talk.
    I believe that the concept of making offers to people who 
have the kind of education we need, who want to be in this 
country--I believe that that is a really good and positive 
thing if they want to be part of what we do. So I am supportive 
of the program that you mentioned that the Army has started.
    I have raised issues and questions about that as we have 
been talking about expanding that or where we are going to go 
with that. I think we really need to study it a good bit more 
because I think there are second and third order effects that 
we really need to think about.
    The real solution here I believe wholeheartedly is to 
really get more U.S. citizens into our schools through STEM 
education and into getting the degrees and the advanced degrees 
in the fields that we need them whether they be the traditional 
STEM type things or some of the other talents that we are going 
to need in the future which includes some of the softer 
sciences. Particularly in the Army, we really need some of the 
softer science type capabilities like sociology and so on and 
so forth that are not traditionally considered STEM in many 
places.
    So I am supportive but I am saying and I am telling my 
leaders that I think we need to look at it a little bit more 
before we extend it without a lot more study. The real solution 
is getting folks in our universities in our organizations and 
young people engaged in getting the advanced degrees, getting 
the degrees in STEM.
    Senator Hagan. Mr. Secretary, any comments?
    Mr. Lemnios. Ma'am, I would agree. I think the challenge 
here is that we are competing globally for talent. We are 
competing with the private sector for the same talent. In my 
role as DOD's chief technology officer, I am absolutely 
concerned and committed to make sure we have a talent base 
within our laboratories, but I also need to make sure we have a 
talent base within our industrial base because at the end of 
the day, the Department is acquiring systems and those systems 
are built by a workforce, some of which might be within our 
laboratories, much of which is in the defense industrial base. 
There is going to be a stream of ideas that we see offshore 
that we want to pounce on and elevate and make happen, and we 
do that. The pace of this train is moving faster every day and 
the complexity of it is growing every single day.
    So as I step back and look at the subject of the 
Department's laboratories, yes, we really do need to make sure 
that we have our A game on with regard to workforce. There is a 
huge challenge with regard to the infrastructure and making 
sure we have the bricks and the mortar and glass and everything 
in the right place and the laboratories in the right place. At 
the end of the day, it is about driving innovation and 
transitioning those concepts with the warfighter. Some of that 
occurs eloquently and every day in the laboratories that you 
visited, ones that we are a part of, and much of that occurs 
within the defense industrial base. All of that is fed by 
talent that we see in all sectors.
    So when we talk about workforce, I think broader than just 
how many additional billets do we need at this lab or that lab. 
I am thinking about how does this enterprise actually operate 
and how do we build a defense industrial base model that 
replicates the efficiency, the cost, and the genius that we see 
in the private sector.
    Senator Hagan. Thank you.
    Ms. Lacey?
    Ms. Lacey. The Navy has looked at the authority that the 
Army has and frankly we are still studying it. As Dr. Freeman 
pointed out, the second and third order effects of such an 
authority we are concerned about, and we would like to have a 
better understanding of what they might be and how they might 
impact us.
    Dr. Walker. We are looking at something called Citizenship 
for Service, which would be like a pilot program that we could 
run in the labs, similar to the Army's. We have not instituted 
that yet.
    I agree with Dr. Freeman's comment about getting more U.S. 
citizens in the pipeline. One idea we had is the LQIP. This 
committee has supported expedited hiring authority for those 
folks with master's degrees.
    One thing that could help us get more U.S. students in the 
pipeline is expedited hiring authority for just undergraduates, 
speeding that hiring authority up for very qualified S&Es so 
that we can hire them in 25 days not over a period of 120 days 
which sometimes is what it takes. So if there is some authority 
like that for the laboratories, that might help us get more 
U.S. citizen students into the pipeline.
    Senator Hagan. We can certainly work on that. I know I have 
spoken quite often with Secretary Lemnios on this issue.
    I certainly echo everybody's concern that we have to have 
more science, technology, engineering, and math students coming 
up through middle school, high school, obviously our 
universities and graduate schools. It is imperative I think for 
the safety and security of our country.
    I think Senator Portman is coming back sometime in the next 
few minutes but I will keep on asking a couple of questions.
    The DOD has, more or less, preserved its top line funding 
for S&T, and in part this is due to increases in basic research 
at the expense of more applied research and technology 
development. While increased basic research obviously is 
important, there are concerns over decreases in more applied 
research funding than for activities that can help transition 
technologies across what has classically been labeled the 
``valley of death,'' the gap between the labs and the military 
users.
    If you could respond to the question. Do you feel that 
balance between basic research, applied research, and advanced 
technology development is right? Dr. Walker, why do we not 
start with you?
    Dr. Walker. I do feel like we have been skewed a bit too 
much towards basic research in the last few years. One of the 
things we are trying to do in AFRL is transition technologies 
that our warfighters care about. In order to do that, you have 
to have a balanced 6.1, 6.2, 6.3 program and have enough money 
in the 6.3 budget to do integrated demonstrations and 
experiments of a variety of technologies to show the warfighter 
that there is a capability here that they should be interested 
in.
    So I think our 6.1 budget has grown quite a bit over the 
last few years, and it is now the largest piece of the budget 
that AFRL has. So I would be in favor of balancing that a bit 
more across the 6.1, 6.2, 6.3 spectrum.
    Senator Hagan. Ms. Lacey?
    Ms. Lacey. I am of a similar mind, that I would like to see 
more of an investment in our BA-3 and BA-4 accounts that can 
help us transition across the valley of death, as you have 
heard it referred to. To that end, Rear Admiral Klunder and I--
the Chief of Naval Research--have joined together to take a 
good, hard look at how do we navigate that 6.3-6.4 continuum to 
ensure that we are getting those investments through that 
portal.
    Senator Hagan. When you say ``navigate,'' if you can 
explain that to me, being in the Navy.
    Ms. Lacey. So inside the Navy, the Chief of Naval Research 
has oversight of the 6.1 through the 6.3 accounts, but the 
programs, the PEOs, and program managers generally are the 6.4 
and above. So to navigate that portal, we have to get the 
people together and make sure that our processes involve both 
sides of that portal. So that is the divide we are trying to 
navigate and ensure that we have things tied together. We have 
quite a bit of investment in the 6.1, 6.2, 6.3 world that if 
program managers knew about it, they would want it. The reason 
they do not know about it sometimes is because they do not have 
time to listen. So we have to do a better job to make sure that 
we provide them the information they need and the motivation to 
take advantage of those S&T developments.
    Senator Hagan. Certainly.
    Mr. Secretary?
    Mr. Lemnios. Senator, as we spoke maybe a month ago, I 
briefed you and your staff on a comprehensive review that we 
did late last year. Again in my role, I have the responsibility 
of providing the Under Secretary and the Secretary with some 
assurance that DOD's portfolio is well-structured both in the 
basic research side but also in applied side. We have to cover 
both avenues with sufficient resources and ideas.
    I was looking for two things when we did that assessment 
last fall. Is the budget in the right location? That is, are we 
investing the right dollars? But more importantly, I was really 
trying to understand what are the ideas that we are investing 
in, what are those concepts, what are the technical ideas, what 
is the core of the concepts that we are investing in. Through a 
series of dialogues with the Services late last year, in fact, 
we made some adjustments. We added funding in hypersonics. We 
added funding in advanced imagers. We put some funding in for 
some special programs with the Navy. We took ideas out that we 
thought were either duplicative or were far past the maturity 
that were being done elsewhere in Government.
    At the end of the day, we presented a President's budget 
just short of $12 billion that is, in fact, shaped by our bets 
in the future and our needs for today. We can sit down and go 
through it, but that is how we looked at it. In fact, it has to 
be a balance. We have to have those space shots and ideas that 
are going to be those for the Nation that we see 5 and 10 years 
are going to be the coin of the realm that we will need not 
within the Department but within our defense industrial base.
    Senator Hagan. Thank you.
    Dr. Freeman. I feel pretty strongly about this, and I would 
agree with my comrades here with respect to I do think we have 
a little imbalance at this point. One of my things when I came 
in the job about a year and a half ago, almost 2 years ago now, 
one of my goals was to try to figure out what the right balance 
is across the entire portfolio. The first thing with basic 
research is just like we did in the 6.3 portion where we have 
focused our 6.3 portion now on some very specific problems and 
challenges, not all of it, but a portion of our 6.3 that are 
focused on improving the warfighters' capabilities at the small 
unit and the soldier level, I need to do that in the rest of 
the portfolio.
    I really appreciate the comment that you made at the 
beginning, that we really have done a lot of work in trying to 
refocus our efforts on capabilities for soldiers. So thank you 
for that.
    But now that we have done that for our portion of 6.3 that 
we have problems and challenges that we are focusing our 
programs on, now I am taking that to the rest of the 6.3 and 
the 6.2 portion to figure out what are the problems and the 
challenges we should focus on in the time frame of 2020 to 2028 
which is kind of where that investment would start paying off.
    I also have an effort going on to try to figure out for 6.1 
what are the sets of problems and challenges that we should be 
focusing our research efforts to help soldiers in the 2030 and 
beyond time frame, which is where that research starts to pay 
off.
    So we actually have some workshops started that are going 
to happen early in May. The basic research one is happening the 
1st and 2nd of May to try to get a community of people together 
to try to project into that time period what is it that we need 
to do. Once we know what we need to do, then we can go back and 
say here is the right amount of money to put into it.
    Now, that does not say we are not going to have innovation 
and invention and disruptive technologies. What it does say is 
that I believe, as I think my colleagues believe, that in the 
Services, our main job in the 6.1, 6.2, and 6.3 is to focus it 
on what our Services really need. Then as Mr. Lemnios said, 
then we can focus on what we need to do together to complement 
one another.
    So I really am in the process of trying to figure out what 
is the right amount of 6.1 to solve our problems and where do, 
if any, we need to shift to be able to do what we need to do 
for the Army in those time periods when those funds would pay 
off.
    Senator Hagan. Thank you.
    Senator Portman?
    Senator Portman. Thank you very much. I am sorry I had to 
step out for a moment, but I understand you all covered a lot 
but not everything. So I look forward to just asking a couple 
more questions. Thank you again for all your help today.
    Globalization of S&T. This is a challenging area because, 
after all, we are in world of defense policy and we have to be 
sure that the classified nature of much of what you do is 
maintained. But we also know that while I would agree with 
Secretary Lemnios that the United States is still in the lead, 
the rest of the world is catching up and there is a lot of 
research being done globally that we could benefit from.
    I was on the plane the other day late last week going back 
to Dayton because I was unable to get a flight into Cincinnati 
flying into Dayton, Delta Airlines. I was on with some of the 
AFRL scientists. One had come here on a visa and has a green 
card now, but there are a lot of folks who you all have 
benefitted from who have been trained at least in their 
undergraduate training in other countries and then come here 
often to get a graduate degree and then stay and help us.
    It also is true that each of you, Dr. Freeman, Ms. Lacey, 
Dr. Walker, have global outreach. You have offices in Europe, 
Asia, and South America, as I understand it. So the 
globalization is already happening both in terms of folks 
coming here and you all reaching out. I just wonder how that is 
working. Are you able to leverage some of this international 
research that we wish was being done here on our shores but is 
not to be able to help our warfighters? Is that appropriate to 
do more of that? How do you balance this need for having 
confidentiality and classified research with the need for us to 
take advantage of the most cutting-edge research globally?
    Then finally, is it economically or even under statute 
feasible for us to open satellite research laboratories in 
areas of the world where there is a high degree of scientific 
research going on? I think of parts of India, for instance. Is 
it possible to have our researchers working side by side with 
foreign researchers in some of these areas that have defense 
implications?
    So if the three of you--and Dr. Lemnios jump in too, but 
give me your thoughts on that.
    Dr. Freeman. All right. I will start.
    We do in the Army. We have what we call international 
technology centers or located in several places around the 
world. Each one of those is operated through and primarily 
through Research, Development and Engineering Command, and we 
have a senior, GS-15, or a colonel who is in charge of that 
area. Then we send researchers over in certain fields and 
certain areas that we have identified in those regions to spend 
a year or 2 participating and looking for opportunities both 
from industries in those regions but also from universities and 
from local military research laboratories. So that is one way 
we have done that. Usually what happens then is that they 
identify a technology or they identify a product and because of 
their knowledge, they call back to a laboratory or a center and 
to a colleague in the laboratory or center who is an expert in 
that area or field, and then they work together to get those 
people to talk to one another and/or to get those products 
evaluated and looked at.
    Another opportunity that we have, in addition to that, is I 
think everybody here--we participate in what we call 
roundtables with other countries. Recently I just got back from 
Israel, and I have a meeting coming up with five countries--
Canada, Australia, New Zealand, the United States, and the 
United Kingdom--where we get together and talk about 
technologies and talk about what we are doing not only in the 
laboratories but what the opportunities are in those countries 
to see technologies and we share those technologies as well and 
bring them into our research programs and/or into solutions in 
our acquisition side. So we have those fora and we have those 
opportunities to do that.
    One of the things I just did with these tech Ds, these 
challenges, these problems and challenges--I offered to every 
one of the countries that we were working with in Germany and 
lots of others. I said here are the things we are working on. 
Here are our priorities. What do you have? What do you know 
about that is in your region or your area that you can come 
back and tell us about that we can look at that might help us 
to solve these problems?
    The last piece that I would recommend is that we have 
scientists and engineers who attend international conferences 
all the time, and they make these determinations of figuring 
out what is out there and they bring it back to their own 
laboratory. That is useful because in many cases--actually I do 
not have it on hand, but we have many examples of where we have 
taken some of these foreign either company products and/or 
technologies and we have incorporated them either in our own 
research projects or gotten them into some systems.
    Now, of course, there is a lot of challenge with that 
because you have ITAR regulations that you have to be careful 
of. You have classification issues. We have ``Buy American'' 
issues, and so it is complex. But we do a lot already and 
continue to do a lot to understand what is out there in the 
global economy and make use of it the best we can.
    Senator Portman. I want to hear, if I could, from the other 
two Service S&T folks. But let me just also add another 
question, I guess, that any recommendations you have ranging 
from immigration policy where I assume you have some thoughts 
to ways in which we should change any either statutory or 
regulatory constraints on what Dr. Freeman just talked about, 
which is this more free flow. The four countries you mentioned 
happen to be four of our strongest allies in the world and ones 
with which we have an unusually strong military relationship 
and an information sharing relationship. I do not know as much 
about New Zealand, but it certainly is true with Australia and 
Canada and the UK. So thoughts on that. Ms. Lacey?
    Ms. Lacey. The Navy has many of the same kinds of 
activities underway that Dr. Freeman talked to. We do them 
through our overhaul and repair, we call it, global 
organization, and I would be happy to provide you additional 
information, all the details on the activities that we have 
underway.
    One thing, though, that we have had discussions with the 
ONR about is that activity tends to focus very much on the S&T 
side of the house and miss the opportunities that perhaps are 
there on the industrial side of the house. So I want to see a 
greater connection between the S&T view of the world and the 
industrial sector view of the world and our warfare centers. So 
we have started those discussions.
    Senator Portman. Dr. Walker?
    Dr. Walker. We have a spectrum of activities at AFRL from 
basic research to even classified work going on with 
international partners. We have the offices you mentioned, 
European Office of Aerospace Research and Development in London 
and then Asian Office of Aerospace Research and Development in 
Tokyo. We have offices now in the South America region as well.
    In the late 1990s/early 2000s, I was at AFOSR working a 
project with the Russians on the plasma physics and hypersonics 
activities. It was 6.1, it was basic research. So we were able 
to have that communication and dialogue. They were the best in 
the business in terms of plasma physics.
    As I mentioned, we have this other spectrum of activity, 
even classified work, with partners like Australia and others 
that we carry on all the time.
    AFRL is building a relationship with Singapore which is in 
a vital part of the world. I was just there with Joe Sciabica, 
the executive director, looking at even increasing our activity 
there at a fundamental science and applied science level.
    In terms of regulations, we mentioned, when you were out, 
an idea for our pilot project in terms of Citizenship for 
Service. The lab is interested in looking at how can we take 
foreign nationals that are in our universities that are really 
outstanding who want to work for us and bring them into the lab 
for a couple years and get them on a fast track to a green card 
status and make them one of our employees. So we are interested 
in a pilot project on that. I will have to get back to you on 
what regulation changes we would need to do that.
    Senator Hagan. Mr. Secretary, anything?
    Mr. Lemnios. I would just simply add two comments. Actually 
right after this meeting, I am headed to San Diego to meet with 
my counterpart from Australia. Part of that discussion is our 
joint S&T areas that we have structured with the Australians.
    The foreign S&T engagements that we have are really quite 
broad. They are across the full scope of the 6.1 funding, and 
they even, in some cases, move into the acquisition programs. A 
very important part of DOD's portfolio.
    But one thing that has changed over the past several 
years--and you have seen this in the private sector and we are 
starting to address it within the Department--research is no 
longer sequential. It is no longer that you go from basic 
research through the next stage 2, stage 3, stage 4. All of 
this stuff is occurring simultaneously. You will see a 
researcher at AFRL or at the Army Research Laboratory that is 
absolutely at the leading edge on some physical concept that 
nobody else has seen that is thinking about the application of 
that concept and is coupling with a partner elsewhere in the 
laboratory to quickly transition it. So the sequential model 
for basic research has changed.
    The other thing that has changed, to your point, the teams 
that actually come together to do research are--it is seldom 
that a single investigator is developing the lead concept. It 
really does take a team of people, and in most cases--and the 
laboratories are great examples of this--that team has to 
include a user. It has to include somebody that understands the 
application of that concept in the user space. That is what is 
really unique about the laboratories.
    Senator Portman. Thank you all. My time has expired, but I 
appreciate you being here.
    Let me just piggyback on what you were saying about working 
with industry then if I could for a second because the chair 
has given me a little bit more time.
    Joe Sciabica came to an aerospace conference we had week 
before last at a GE facility outside of Cincinnati. We brought 
in people from all over the State. It was a great example of 
where some of the work you are doing can be commercialized in a 
way that helps to create jobs, economic growth in our States, 
but also helps you to be able to perform your mission because 
you are taking, as Ms. Lacey said, information from the 
industry as well as them benefitting from some of your basic 
research. So I did not want to miss that opportunity, since you 
mentioned Joe, to say he is doing a very good job I think 
reaching out and working with some of the original equipment 
manufacturers and some of the suppliers who are unable to do 
the basic research but can provide some of the more 
application, I guess, research you would call it that is 
helpful to you all.
    The final question that I have has to do with your 
priorities. Last year Secretary Gates listed seven of them: 
cyber, electronic warfare, data decisions, engineered resilient 
systems, counter weapons of mass destruction, autonomy, and 
human systems. I am not sure what autonomy means. So if you 
could explain that to me, that would be helpful.
    But with regard to these seven, as Secretary Lemnios has 
indicated, things are moving rapidly at the speed of something, 
light, sound, maybe quicker. Are these still your priorities? 
If not, which ones can you tell the subcommittee are missing 
from this list of seven or are some of these now a lower 
priority than they would have been even early last year?
    Mr. Lemnios. Senator, we developed those almost 2 years ago 
now, and they actually all apply to the space that the 
Department has moved into on the strategic plan that was issued 
January of this year. In fact, the President's budget request 
for 2013 reflects that. As we went back and looked at the 
projects that we had planned last fall and as we were building 
our budget for the President's budget request for 2013, we in 
fact referenced the strength that we had in each of those 
areas. Some of those we had to strengthen and that is what is 
really on the Hill right now for deliberation.
    As far as autonomy, think robotics. Think robotics without 
people. Think about a PackBot that can operate without a joy 
stick. Think about a car that could operate because you are in 
the driver's seat and maybe a disabled person can think about 
driving and the car drives. So we are on that path. In the 
commercial sector, you see Google making a big investment in 
that area. In fact, the State of Nevada has now authorized 
autonomous vehicles to operate on their roads. Interesting 
commentary. But we are headed in that direction. You see it 
with cars that can self-park in a very, very simple way. But I 
think in the not too distant future you will see vehicles and 
other systems that interoperate with humans in very natural 
ways, almost conversationally. Think Siri on steroids. Think of 
a system that understands you and understands what your needs 
are a day from now, 2 days from now, say, for travel or 
something and then presents that information to you without you 
having to ask for it.
    Senator Portman. Thank you. Do you think there is any 
danger of replacing elected representatives? [Laughter.]
    Mr. Lemnios. No. The complexity is too great. It is just 
not going to happen.
    Senator Portman. It is complex.
    Thank you all very much.
    Dr. Freeman. Could I just add one thing to the last 
comment? So what Mr. Lemnios was talking about were the seven 
are the cross-cutting for all of DOD, and as he mentioned 
before, those are the priorities that we have agreed that 
affect each and every one of us. Every one of us also then has 
our own Service priorities of the things that we have to do 
with the rest of the budget that we have to meet our own 
priorities, and we are in the process in the Army of better 
establishing, better advertising, and better articulating to 
everybody what those priorities are for Army S&T and getting 
leadership to agree to those for that Service-specific part of 
the portfolio as well.
    Senator Hagan. I have two quick questions and then we will 
adjourn.
    One of the greatest challenges facing DOD today is the 
increased cost of its weapons systems. The DOD S&T enterprise 
historically has done a laudable job of increasing the 
performance of these weapons systems but with little 
consideration for cost. In today's budget constrained 
environment, affordability is now a key driver for weapons 
systems. As an example, commercial electronics continue to 
increase in performance and yet decrease in cost. The same can 
hardly be said for any DOD major defense acquisition program.
    What are you specifically doing in your S&T enterprise to 
address the development of technologies and design 
methodologies and manufacturing technologies to improve 
affordability? Mr. Secretary?
    Mr. Lemnios. Sure. Senator, there are several areas that 
directly address that. The first is the work that the 
Department has done on risk assessments, technical risk 
assessments, to really understand well before milestone A and 
actually before milestone B, and in some cases even before 
milestone A, what the technical readiness level is of the given 
technology in the architecture it is going to be used in.
    Senator Hagan. How long has that been in effect?
    Mr. Lemnios. This was part of the Weapons Systems 
Acquisition Reform Act of 2009 that you passed unanimously and 
the President signed May 2009. We are implementing that with 
great effect. In fact, two elements of that that have been 
absolutely central are the technology assessments and the 
systems engineering work that is being done well ahead of a 
commitment to go and acquire a system. The impact of those your 
committee has heard about and certainly others have in terms of 
identifying problems very early where we can make an 
engineering change well before we are into production.
    The other piece of this that I think is going to be 
critical--and each of the Services is addressing it--is an 
increased focus on modeling and simulation. That is building 
greater fidelity tools that allow us to model a very costly 
experiment in a new domain--pick hypersonics. Actually pick 
your ADVENT system, the high performance engine. Much of that 
work was simulated well before we cut the first metal. Now we 
are at a point where not only is the first metal matching 
simulation, but we are able to then move into what will be an 
acquisition phase with much higher confidence that the 
technology is in fact ready. So getting that early stage risk 
assessment done, strong modeling and software is absolutely 
critical.
    Senator Hagan. I had one last question. Here it is. Thank 
you.
    One of the criticisms of DOD is the slow pace of its 
acquisition process and the role of the DOD laboratories in 
order to rapidly take technologies to the field. I think we 
spoke a little bit about--one prime example was the need for 
the creation of the Joint Improvised Explosive Device Defeat 
Organization to handle the IED threats. What are you doing to 
increase the speed and the agility of the laboratories to help 
deploy the systems to the warfighter, and how are you ensuring 
that the labs can quickly respond to rapidly emerging threats 
or the urgent needs of our combatant commanders? Mr. Secretary?
    Mr. Lemnios. Senator, I will give you the counter example 
that everybody knows well and that is the mine-resistant ambush 
protected vehicle story that went from a request from theater 
in September 2009 to the first vehicles being delivered in 
theater less than 3 months later. That has now been the vehicle 
of choice. It has saved thousands, that has saved hundreds of 
lives clearly in theater.
    The reason that that worked is because we had core 
competency at the Tank Automotive Research, Development, and 
Engineering Center laboratory in Warren, MI, and we had 
ballistic effects understood at Aberdeen. We had a set of 
contractors that understood it. We also had a Secretary of 
Defense, as the current Secretary of Defense is, very much 
behind it. Secretary Gates was very much behind this. In fact, 
we were able to move that very rapidly in the span of months 
from a concept to a capability delivered to theater.
    In fact, the persistent ground surveillance system is 
another example. It came out of our joint capability technology 
demonstration program, coupled with the Service laboratories to 
make sure we had the technology right. In fact, the sensors 
were commercial sensors but the integration was done in our 
Service lab, quickly deployed to theater.
    The efforts that we have put in place to deliver 
capabilities to the fight previously in Iraq, currently in 
Afghanistan, have taught us the value of production integration 
facilities in DOD's laboratories. That probably would not have 
been done by the private sector alone. The private sector 
simply did not have the context, the operational context and, 
in some cases, in fact with Aberdeen, did not have the 
ballistic models to understand what the threat looked like. So 
the fact that we were able to couple those two domains so 
effectively, in fact, provided immediate support to the 
warfighters. That is the path we are on.
    Senator Hagan. We certainly had an urgent reason to do so.
    Mr. Lemnios. We had a very urgent reason to do so.
    Senator Hagan. On behalf of the subcommittee, I thank you 
each and every one of you for your testimony today and, in 
particular, your service to our country. I think we all will be 
looking forward to seeing the results of the survey, once it is 
completed, on the labs and the aging infrastructure and moving 
forward. So thank you.
    The hearing is adjourned.
    [Questions for the record with answers supplied follow:]

              Questions Submitted by Senator Kay R. Hagan

                  STUDY OF DEPARTMENT OF DEFENSE LABS

    1. Senator Hagan. Mr. Lemnios, the fiscal year 2013 President's 
budget requests $4.8 million for lab resource management. We understand 
that you are conducting a study of the Department of Defense (DOD) 
labs. When will that study be completed?
    Mr. Lemnios. The study will be completed by December 2012, not 
using fiscal year 2013 funds.

    2. Senator Hagan. Mr. Lemnios, in addition to this study, what else 
are you planning to do with these funds?
    Mr. Lemnios. As detailed in the February 2012 Research and 
Development (R&D) Descriptive Summary for Program Element 0605798D8Z, 
the $4.8 million funding will be used to develop and collect more 
effective metrics describing the condition, benefit, and payoff of the 
DOD laboratories. The $4.8 million funds includes funds for about four 
support contractors, development of an implementation plan for the 
ongoing laboratory assessment study, and so forth. While we have been 
effective in measuring things such as building age, we have not been as 
effective in developing the metrics. The $4.8 million will help us 
address where laboratories are and are not effective as they could be. 
The results will enable the Office of the Secretary of Defense (OSD) 
and laboratory management staffs to identify shortfalls and missed 
opportunities, and thereby harvest greater benefits from R&D 
investments.

                        DIRECT HIRING AUTHORITY

    3. Senator Hagan. Dr. Walker, during the hearing you mentioned the 
need to more rapidly hire scientists and engineers (S&E) with only 
undergraduate degrees. Would you please amplify on your statement and 
explain why direct hiring authority, which is currently used for 
scientists and engineers with advanced graduate degrees, would be 
needed?
    Dr. Walker. The balance of skill levels in the Air Force Research 
Lab (AFRL) S&E workforce requires that approximately 10 percent of new 
hires consist of entry level candidates. In addition, to maintain a 
diverse workforce AFRL has also found that it is most successful in 
recruiting high quality minority and female candidates when they are at 
the entry level.
    Prior to its rescinding in December 2010, the Defense Career Intern 
Program (DCIP) hiring authority allowed AFRL to target, successfully 
recruit, and quickly on-board well-qualified, highly sought after, 
recent and prospective S&E graduates from the country's colleges and 
universities.
    In response to loss of DCIP authority, DOD laboratories developed 
the Distinguished Scholastic Achievement Appointment authority which 
requires graduates have a 3.5 grade point average (GPA) overall or in 
major field of study. However, other than the restriction on GPA, this 
authority is no different from any delegated examining unit (DEU) 
announcement, which requires a 5-day announcement on USAJOBs and does 
not limit the pool of candidates to those recently graduated with 
Bachelor of Science degrees. This means that any candidates with 
experience who obtained a 3.5 GPA can apply and will rank higher than 
recent graduates due to that experience. This reduces the ability of 
hiring officials to select targeted high quality candidates, to include 
minority and female candidates, from universities that complement 
laboratory skills requirements. Furthermore, due to the time necessary 
to process actions (90 days, similar to other DEU actions), managers 
have found that desired candidates typically accept positions with 
private industry organizations that can hire them much faster.
    A hiring authority that mirrors the flexibility of DCIP would allow 
AFRL to add a sufficient level of entry level S&E to balance its 
workforce and help increase minority and female S&E representation.

                   AFFORDABILITY OF NEW TECHNOLOGIES

    4. Senator Hagan. Dr. Freeman, Ms. Lacey, and Dr. Walker, one of 
the greatest challenges facing DOD today is the increased costs of its 
weapons systems. DOD science and technology (S&T) enterprise 
historically has done a laudable job of increasing the performance of 
these weapons systems, but with little consideration for cost. In 
today's budget-constrained environment, affordability is now a key 
driver for weapons systems. In the commercial sector, electronics 
continue to increase in performance and decrease in cost. The same can 
hardly be said for any DOD major defense acquisition program. What are 
you specifically doing in your S&T enterprise to address the 
development of technologies, design methodologies, and manufacturing 
technologies to improve affordability?
    Dr. Freeman. The Army does consider costs in technology 
development, and affordability is one of the key metrics considered in 
our S&T efforts. To do this, we identify key technology cost drivers, 
improve manufacturing technology, and leverage commercial industry 
technologies.
    To give one example, the Army is developing active electronically-
steered radar arrays to reduce the cost of missile seekers. Cost 
reductions of these arrays are achieved by leveraging commercial 
technology matured by the telecommunications industry. The beam of a 
phased array radar seeker is steered through electronic phase shift, 
eliminating the need for large mechanical gimbals. The major technology 
hurdles are transmitting adequate power from the miniature devices and 
achieving the required thermal management within the packaging. The 
Army is collaborating with industry to overcome these challenges. Costs 
for the phased array antennas currently used for air and missile 
defense missile seekers are projected to be reduced by 50 percent. An 
additional benefit of the reduced cost seeker technology is increased 
reliability, eliminating the potential impact of obsolescence in 
unitary radio frequency transmitter sources. On a smaller scale, image 
stabilization algorithms have been developed to enable low cost seekers 
to be employed. These algorithms enable the operator or targeting 
algorithms to see a steady picture while the munition is flying, 
enabling lower cost visual and infrared cameras to be used that are 
fixed and non-gimbaled, to reduce the complexity (moving parts).
    Ms. Lacey. As budgets tighten, the demand for affordability of new 
technologies has shifted the focus of S&T investments to ensure they 
are defined and linked to requirements and platforms with an increased 
emphasis on total ownership cost. The Navy is addressing affordability 
through a three-phased approach:

    (1)  Issuance of policy and guidance
        - Naval Open Architecture Contract Guidebook for Program 
        Managers to reduce the overall risk to the Department; and
        - Navy S&T Strategic Plan that focuses on affordability by 
        pressing for transformational scientific breakthroughs in 
        critical areas, improved methodologies for design, improved 
        manufacturing processes; technology insertion opportunities to 
        reduce life-cycle costs through reduced manning and extended 
        operational viability.

    (2)  Increasing the Department's technical capabilities
        - Directed Department Program Managers to use in-house 
        technical workforce to understand and optimize pre-Milestone B 
        technical work to strengthen our understanding of technical/
        cost tradespace;
        - Increasing the Department's focus on basic through applied 
        research strengths to better understand and document the long-
        term implications of intellectual property and data rights and 
        publish and patent as appropriate to protect the intellectual 
        property rights for/of the S&T community.

    (3)  Continued pursuit of technology breakthroughs
        - The Commercial-Off-The-Shelf (COTS) world has a high volume 
        over which to amortize development costs. Where appropriate, 
        DOD and Navy already use and are increasing COTS products; and
        - The Navy has been actively engaged in shipbuilding 
        affordability.

           The Single Ship Tank Coatings Project delivered a 
        rapid cure single coat system for tank preservation that 
        provides a 20-year service life. This product is now in use and 
        is available for purchase from the qualified products list.
           The High Performance Topside Coatings project is 
        developing exterior ship freeboard and topside coatings that 
        are reducing cost by improving durability while decreasing 
        solar absorbance.

        - The F-35 JSF's Automated Fiber Placement Bismaleimide 
        Manufacturing Technology project has improved the process and 
        lay down rate for fiber placement on the wing skins and nacelle 
        structures by 47 percent and 62 percent respectively for a cost 
        avoidance of more than $100 million over the life of program.

    Dr. Walker. Integral to Air Force S&T are programs focused on 
improving affordability in the development of new technologies for 
weapon systems spanning their entire life cycle from cradle to grave.
    The Air Force Manufacturing Technology (ManTech) program, as part 
of our S&T portfolio, is a key enabler for affordability in Air Force 
systems. ManTech efforts span the entire acquisition lifecycle to 
shorten cycle times and improve producibility, availability, cost, and 
quality for hardware-intensive weapon systems. High return investments 
are formulated in partnership with program offices and associated 
industry members in the acquisition, sustainment, and S&T communities. 
For example, the Advanced Manufacturing Propulsion Initiative (AMPI) 
works with the engine Original Equipment Manufacturers (OEM) and supply 
base across seven different technology areas (e.g., ceramic matrix 
composites, advanced casting) and is projecting a $2.9 billion 
lifecycle cost avoidance for F-35 alone. Manufacturing improvements for 
Active Electronically Scanned Array radar systems are delivering over 
$380 million in cost avoidance to the F-35 and F-22. A new 
manufacturing process for aircraft panel seals has a projected cost 
avoidance for the F-35 and F-22 of $881 million. The Engine Rotor Life 
Extension project is enabling longer service life for high cost turbine 
engine components of legacy systems and is projecting a life cycle cost 
avoidance of $1.1 billion. The ManTech space solar cell project has 
enabled ultra high efficiency arrays for numerous space systems 
resulting in trade space of having reduced mass, volume, and cost per 
watt. Finally, a Manufacturing Critical Small Business Innovation 
Research project leveraged by ManTech cuts the time to drill the Joint 
Strike Fighter inlet ducts from 50 hours per shipset to 12 hours, 
saving over $25 million.
    The ManTech program is also identifying potential future 
investments for agile, affordable low volume, high mix production 
involving earlier consideration of manufacturing in the acquisition 
cycle, tools, and models to increase performance of the integrated 
supply base, application of advanced digital tools and models to 
facilitate efficiencies across design/production/operations, and 
development of advanced factory floor assembly/machine/infrastructure 
technologies.
    Additional efforts throughout the AFRL are also focused on 
enhancing affordability of Air Force systems and acquisitions. For 
example, we have research to understand the root cause of material 
failure under the conditions in which they are used since improvements 
in affordability are directly related to increasing the mean time 
between failures of the part or component of the weapon system and are 
rooted in its material system. We are also building design tools that 
improve the ability of engineers to successfully design components and 
systems thereby reducing development risks and cost. The Upper Stage 
Engine Technology (USET) program is one such example: it is a physics-
based modeling and simulation tool for liquid rocket engine 
development, replacing expensive and time-consuming empirical test-
driven development and providing great fidelity earlier in the design 
process. USET has had 57 industry applications to date and supports the 
Air Force's new upper stage rocket acquisition.

                 MEASURING PERFORMANCE OF LABORATORIES

    5. Senator Hagan. Mr. Lemnios, Dr. Freeman, Ms. Lacey, and Dr. 
Walker, there are many ways to measure the performance of a laboratory 
enterprise, whether it is numbers of peer-reviewed research papers, 
patents, or technologies transitioned to acquisition programs. How do 
you measure the performance of DOD laboratories?
    Mr. Lemnios. Measuring laboratory performance presents a difficult 
challenge. As outlined in this question, numbers of papers and patents 
are important metrics because they provide an indication of innovation 
in the labs. Other metrics that I consider crucial in measuring 
laboratory performance include the scale and impact of transitions to 
industry, effectiveness of solutions provided in response to Joint 
Urgent Operational Needs Statements (JUONS), and ability to develop 
technology prototypes that offer significant new capabilities to the 
DOD. Lastly, the ability of the Department's laboratories to compete 
for top talent is significantly driven by the quality and impact of 
work in our laboratories.
    By all measures we are seeing solid levels of performance across 
the Department's laboratory enterprise.
    Dr. Freeman. Measuring the performance of a laboratory enterprise 
is a challenging endeavor, particularly when the enterprise spans the 
spectrum from basic research to applied technology development. The 
Army looks at all of the measures mentioned above; in addition, the 
Army also looks at metrics such as citations, patents awarded, 
conference presentations and keynote addresses, and cooperative R&D 
agreements.
    Ms. Lacey. Navy laboratories conduct broad-based, multidisciplinary 
scientific research and advanced technological development directed 
toward maritime applications of new and improved materials, techniques, 
equipment, systems, and platforms. To be successful, Navy laboratories 
must conduct the right research, it must be world-class research, and 
it must have high payoff for the Department. This research is measured 
using criteria appropriate to assessing the quality of the science/
engineering that are frequently used by academia and other world-class 
scientific research laboratories such as:

        - Number and quality of papers in scientific journals, patent 
        applications submitted and patents received, citations to those 
        papers and patents, licenses granted, royalties received, and 
        CRADAs negotiated.
        - External recognition of the scientific staff by election to 
        membership in the National Academies, and by selection to be 
        Fellows of the various scientific societies.
        - The fraction of the scientific staff holding a PhD or other 
        advanced degree, the number and quality of newly hired staff 
        members, and the experience of the staff.
        - Recognition of the staff with prestigious scientific and 
        engineering awards, and selection to be members of high level 
        Navy, DOD and National/International panels, boards, and 
        committees, and as committee chairs of conferences and as 
        officers of scientific societies.

    Measures used to assess the value and impact of research activities 
include:

        - Transition to/adoption of acquisition and non-acquisition 
        programs in the Department satisfying requirements of the 
        Fleet/Force.
        - Rapid response to emergent/urgent needs of the Fleet/Force to 
        meet/correct operational deficiencies.
        - Number of times and total funds received from other agencies, 
        services, laboratories, and companies for the products, 
        services, and technical expertise of the Laboratory or Center.

    Dr. Walker. While some quantitative measures, such as those 
mentioned in your question, can be useful when considering the 
performance of the AFRL, we have primarily focused on assessing 
performance through qualitative means due to the nature of the Air 
Force S&T program. The true test of performance of the lab is whether 
or not the basic research, applied research, and advanced technology 
development is focused on meeting the current and future needs of 
warfighters.
    To ensure the lab efforts are postured for successful transitions 
to warfighting capability, the Air Force deliberately aligns S&T 
planning, technology transition planning, and development planning. The 
linkages between these planning activities are critical to initiating 
acquisition programs with more mature technologies and credible cost 
estimates, and we are institutionalizing these linkages in Air Force 
policy.
    Operational users document their capability development priorities 
as part of the larger Air Force strategic planning system. Capability 
Collaboration Teams, with participation from the lab, product centers, 
and operational users, then derive S&T needs from those capability 
development priorities and work together to develop S&T solutions that 
will provide technology options with reduced risk for future 
acquisition.
    Successes such as the High Velocity Penetrating Weapon (HVPW) and 
Precision Air Drop (PAD) Flagship Capability Concepts (FCC) have proven 
the process and provided us a means to assess the performance of AFRL. 
HVPW was initiated as the S&T planning processes were being developed 
and has served as a pilot for these processes. The HVPW FCC was 
grounded in development planning activities that helped define the key 
technology drivers for various hard target defeat concepts. These key 
technologies are informing the upcoming analysis of alternatives for 
the Hard Target Munition family of systems. The PAD FCC was the first 
effort created in direct response to a documented capability 
development need. The lab, product center, and operational user put 
together a set of technology development efforts to address the entire 
problem set. The first of these solutions is scheduled to be 
demonstrated in fiscal year 2013.

         DEFENSE SCIENCE BOARD'S STUDY ON DOD'S BASIC RESEARCH

    6. Senator Hagan. Mr. Lemnios, Dr. Freeman, Ms. Lacey, and Dr. 
Walker, in the recent Defense Science Board (DSB) study on DOD's basic 
research, it was stated that they found ``an alarming level of 
bureaucratic business practices hindering the conduct of basic 
research.'' Would you explain your understanding of what these business 
practices are and how can they be made more efficient?
    Mr. Lemnios. My understanding is that the DSB is referring to 
bureaucratic requirements that divert researchers' time from the actual 
performance of their research and thereby reduce their productivity. 
The DSB gave examples on pages 33-34 of their report. For instance, the 
DSB cited a survey of university faculty conducted by the Federal 
Demonstration Partnership (FDP), a collaborative effort of universities 
and Federal research funding organizations to streamline research 
administration. The FDP survey found that (only) 42 percent of the time 
available to research faculty for their federally supported research 
was being spent on research-related administrative tasks.
    It would be nice to say that reducing the bureaucratic burden would 
be simple, but this is not the case. The source of bureaucracy comes 
from numerous Federal and State statutes, some internal DOD processes, 
and other internal university processes. I have asked my Director, 
Basic Sciences, and the Defense Basic Research Advisory Group to 
develop a plan to address the DSB recommendations, and specific to this 
question, reduce the bureaucracy where possible. This will start with a 
DBRAG analysis of the FDP data for DOD awards and identifying 
individual requirements that are the cause of the burdens on 
researchers. This will let us focus on the burdens that matter most. 
Reduction of bureaucratic burdens is something we do try to achieve. 
For instance, in the past couple of years, we addressed the 
bureaucratic burdens for publication of fundamental research by issuing 
a memorandum clarifying policy on fundamental research, consistent with 
National Security Decision Directive 189. I suspect we will find other 
areas that will let us cut bureaucracy.
    Dr. Freeman. The DSB report referenced several business practices 
they deemed questionable, to include: attending training that may be 
inappropriate in a basic research environment or detract from time 
spent on research; checking research tools and equipment in and out on 
a daily basis; and performing repairs to lab equipment rather than 
employing expert technicians. Also referenced in the DSB study, the FDP 
conducted a survey among university researchers and found a similar set 
of concerns. While we are always open to improve our methods of 
conducting the business of doing research and will work with our 
laboratory directors to identify burdensome practices, we must also be 
mindful of the training and procedures that are required to maintain a 
high level of quality within our workforce and be conscious of the 
costs associated with supporting our laboratory enterprise.
    Ms. Lacey. While raising the administrative burden issue, the DSB 
report did not identify specific examples nor did they recommend any 
specific processes to eliminate. To a large extent the report supported 
how business is done now and makes some recommendations that could, in 
fact, create more administrative work for program managers/officers. 
The sources of bureaucratic burden include legislation, administration 
requirements imposed from outside DOD, requirements imposed from within 
DOD, requirements imposed by the Services, and requirements imposed by 
the basic research performing organizations themselves.
    The Navy recognizes the S&T community may be called upon to answer 
datacalls and provide technical reviews. To the extent the Navy has 
control; we strive to mitigate these actions using existing data and 
information. It is always our goal to maintain efficient operations 
with the effective use of all resources.
    Dr. Walker. Over the last few years, the Air Force has been 
proactively identifying and addressing bureaucratic processes that 
reduce the effectiveness of basic and applied research in the 
laboratory.
    For example, some tool control procedures, originally designed for 
flight line activity but also applied to the AFRL, do not make sense in 
the research laboratory environment. The administrative burden 
associated with tool control procedures such as checking tools in and 
out of tool cribs, completing forms for broken tools, and getting tools 
etched, takes time away from critical research activities. We estimate 
that up to 30 minutes each day per researcher is spent executing tool 
control procedures which is time lost from research. The Air Force 
recognized this additional burden on research activities and has now 
granted waivers to lessen tool control responsibilities for the 
laboratory environment.
    Precision Measurement Equipment Laboratory procedures, also 
originally designed for flight line activity but applied to AFRL, also 
often do not make sense in a research laboratory environment where 
instruments are regularly calibrated by the research scientist 
performing the experimentation. The administrative burden and lost 
research time associated with instrument calibration at contract 
facilities takes time away from critical research activities and often 
is unnecessary. The Air Force recognized this additional burden on 
research activities and has now granted waivers to instrument 
calibration responsibilities in research laboratories.
    The Air Force is committed to continuing to identify and reduce 
bureaucratic processes which impact our research capabilities.

                          DECKER-WAGNER REPORT

    7. Senator Hagan. Dr. Freeman, it is our understanding that the 
Army has an ongoing study in the wake of the Decker-Wagner report 
looking at, among many other things, how Army S&T should be managed and 
how the laboratories can best be organized for the future needs of the 
Army. What is the status of this study?
    Dr. Freeman. The Decker-Wagner Army Acquisition Review recommended 
the disestablishment of the Research, Development and Engineering 
Command (RDECOM) because in the study group's view, RDECOM ``has not 
added enough value to be continued.'' The Army did not concur with this 
assessment. RDECOM provides a valuable service by integrating R&D 
efforts across different Research, Development and Engineering Centers. 
Currently, the Army is studying how to optimize materiel development 
and sustainment efforts, to include research, across the Army 
acquisition and materiel communities. This study is considering how 
best to leverage the R&D headquarters to efficiently apply S&T across 
the community to solve critical Army problems. This effort, which is 
primarily focused on improving processes, is ongoing.
                                 ______
                                 
             Questions Submitted by Senator Robert Portman

                             SEQUESTRATION

    8. Senator Portman. Dr. Freeman, Ms. Lacey, and Dr. Walker, during 
the hearing, Secretary Lemnios stated that the effects of sequestration 
would be devastating to the laboratory enterprise. Do you agree with 
that assessment?
    Dr. Freeman. I agree that cuts of the magnitude mandated by 
sequestration would have severe consequences for the Army's S&T 
programs.
    Ms. Lacey. The Department of Navy has not begun planning for or 
assessing potential impacts of sequestration with the hopes that 
Congress will work out a larger deficit-reduction plan. Impacts to Navy 
laboratories and warfare centers directly result in impacts to specific 
programs; however, specific program impacts are unknown until more 
detailed planning has occurred.
    Dr. Walker. Yes. A significant cut to DOD and the Air Force S&T 
budgets resulting from sequestration could negatively affect laboratory 
enterprise.

    9. Senator Portman. Dr. Freeman, Ms. Lacey, and Dr. Walker, does a 
devastating impact mean that you would be forced to shut down needed 
facilities?
    Dr. Freeman. At this time, we have not done a detailed study on 
what consequences sequestration would have for our facilities 
specifically.
    Ms. Lacey. The Navy has not begun planning for or assessing 
potential impacts of sequestration with the hopes that Congress will 
work out a larger deficit-reduction plan. Until specific programmatic 
impacts are known, the Navy is uncertain if it would be result in the 
shutdown of facilities.
    Dr. Walker. Until specific parameters of sequestration are defined, 
we are unable to provide specific programmatic, personnel, and 
infrastructure impacts.

                            HIGHER EDUCATION

    10. Senator Portman. Dr. Walker, there seems to be an important 
relationship between DOD graduate school programs and the educated 
officers it provides to your labs, both in concurrent research and in 
the future. As a whole, the DOD's laboratory budgets faired relatively 
well in the fiscal year 2013 President's budget request, while in some 
cases these service graduate programs served as near-term billpayers. 
How do Air Force Science, Technology, Engineering, and Mathematics 
(STEM) programs incorporate the Air Force Institute of Technology 
(AFIT) into their strategies for building a skilled Air Force S&T 
workforce?
    Dr. Walker. The Air Force recognizes that advanced STEM degrees for 
officers are critical not just to laboratory research efforts, but also 
to a myriad of Air Force missions, ranging from cyberspace to 
reconnaissance and beyond. We are working closely with the Office of 
the Deputy Chief of Staff for Personnel, Manpower, and Services (AF/A1) 
to ensure we can leverage limited resources as best as possible.
    We work very closely with AFIT to incorporate student research 
activities with the needs of the AFRL and the greater STEM community. 
We also hand select each officer to follow their AFIT education with a 
job that best utilizes their new degrees. Our goal is to have officers 
attend AFIT early in their careers so the STEM advanced degree can be 
used on multiple tours of duty. In addition, the Air Force policy is 
that any student sent for an advanced degree for the purpose of 
teaching at the Air Force Academy or AFIT first serve an intervening 
STEM operational tour before going to the classroom environment.
    The Air Force Office of Scientific Research (AFOSR) funds basic 
research conducted by AFIT faculty members, postdoctoral research 
associates, and doctoral candidates (approximately $1.4 million in 
fiscal year 2012). In addition, AFOSR sponsors a seminar series at AFIT 
to bring distinguished scientists and engineers to Dayton, OH, to give 
presentations on cutting edge research. The relationship between AFOSR 
and AFIT helps to educate and train the future STEM workforce for the 
Air Force.
    AFIT is also used to hone important skills, such as software 
engineering, through the Software Professional Development Program. 
AFIT's School of Systems and Logistics is the sole provider of more 
than 80 professional continuing education courses in acquisition 
management, logistics management, contracting, systems management, 
software engineering, and financial management delivered to warfighters 
around the globe via customer-focused delivery methods including 
resident and online courses.
    The Civil Engineering School has provided civil engineer 
professionals with education from building initial skills to learning 
technical and management disciplines to developing the advanced skills 
necessary to serve as Civil Engineering squadron commanders. Since 
1990, the Environmental Department faculty has provided DOD 
environmental professionals the education needed to meet the critical 
demands of ensuring environmentally compliant installations.
    AFIT's Graduate School of Engineering and Management serves the Air 
Force as its graduate institution of choice for engineering, applied 
sciences, and selected areas of management. The Graduate School offers 
a variety of programs leading to the award of master's and doctoral 
degrees, as well as graduate certificate programs. Graduates from AFIT 
enable the Air Force to maintain our technological warfighting 
advantage by developing, acquiring, sustaining, and operating 
sophisticated capabilities.
    AFIT also maintains a strong applied research component through its 
research centers. The Center for Cyberspace Research, established in 
March 2002, conducts defense-focused research at the masters and 
doctoral levels. On June 19, 2008, the Secretary and Chief of Staff of 
the Air Force designated the Air Force Institute of Technology and the 
Center for Cyberspace Research as the Air Force's Cyberspace Technical 
Center of Excellence. AFIT is also home to several other research 
centers including those focused on Systems Engineering, Advanced 
Navigation Technology, Directed Energy, Operational Analysis, and 
Technical Intelligence Studies and Research.

    11. Senator Portman. Dr. Walker, what do you assess to be the 
impact of proposed cuts at AFIT on current and future partnered 
research between AFIT and AFRL and what impact do you assess on the 
future Air Force S&T workforce and management?
    Dr. Walker. The AFIT-AFRL partnered research program is a valuable 
part of Air Force S&T research and our workforce pipeline. AFIT 
recently completed a top-down prioritization of all of its academic and 
research programs which resulted in many efficiencies. In light of this 
reprioritization and resulting efficiencies, we believe reductions will 
have little impact on meeting the current and future partnered research 
between AFIT and AFRL and the future Air Force S&T workforce and 
management.

    12. Senator Portman. Dr. Walker, are you involved in Air Force 
decisions regarding the budgeting for graduate school programs?
    Dr. Walker. Indirectly, yes. We work closely with the Air Force 
Education Requirements Board (AFERB) within the Office of the Deputy 
Chief of Staff for Personnel, Manpower and Services (AF/A1) to justify 
and prioritize our graduate school programs. This process ensures Air 
Force S&T equities are considered as AF/A1 defines and articulates 
their budget requirements.

    13. Senator Portman. Dr. Walker, how do you coordinate with Air 
Education and Training Command (AETC) to communicate S&T priorities 
that impact AFIT?
    Dr. Walker. We communicate our priorities for advanced degrees 
through the AFERB process within the Office of the Deputy Chief of 
Staff for Personnel, Manpower and Services (AF/A1). This process works 
hand-in-hand with both AETC and AFIT. The AFERB process allows us to 
prioritize from requirements across the Air Force those degrees for 
education through AFIT. We continue to work to find the best ways to 
capitalize on the S&T advanced degrees we need the most in this budget 
and personnel-constrained environment.

                      BASE REALIGNMENT AND CLOSURE

    14. Senator Portman. Mr. Lemnios, Dr. Freeman, Ms. Lacey, and Dr. 
Walker, for the National Defense Authorization Act for Fiscal Year 
2013, DOD is requesting congressional authority to begin a new round of 
Base Realignment and Closure (BRAC). A new round of BRAC would no doubt 
affect the laboratory enterprise to some degree. Have the laboratories 
been planning for possible base closures and/or laboratory 
consolidation?
    Mr. Lemnios. BRAC enables the Department to reconfigure its 
infrastructure to match the demands of leaner, more flexible forces and 
to accommodate our changing strategic emphasis. It is an important tool 
for the Department to use to make the tough fiscal choices necessitated 
by current budget challenges. If Congress does authorize the requested 
BRAC rounds, the Department will undertake the BRAC rounds in 
accordance with the statutory directive to consider all installations 
equally and make decisions based on a 20-year force structure plan and 
statutory selection criteria which give primary consideration to 
military value. In this context, the Department will examine all its 
missions and functions, including the laboratory enterprise.
    Dr. Freeman. The Army laboratories and research, development, and 
engineering centers have just concluded consolidation of a large number 
of facilities at the Aberdeen Proving Ground, MD, associated with the 
last round of BRAC. At this time, the Army is not planning for any 
additional consolidation.
    Ms. Lacey. The Navy has not begun planning for a BRAC.
    Dr. Walker. The Air Force has found efficiency by successfully 
consolidating AFRL into a single, unified laboratory structure over the 
last 2 decades. We currently do not have any more plans for laboratory 
consolidation. If another round of BRAC occurs, rest assured, every 
laboratory facility will receive fair and equal consideration using 
each of the criteria established by the Secretary of Defense.

    15. Senator Portman. Mr. Lemnios, Dr. Freeman, Ms. Lacey, Dr. 
Walker, what impact, if any, did previous consolidation efforts have on 
laboratory performance?
    Mr. Lemnios. My impressions gained from visiting the labs impacted 
by the consolidations of BRAC 2005 are favorable. For example, the 
Army's consolidation of labs at Aberdeen, MD, and the Air Force 
consolidation of labs at Wright-Patterson Air Force Base have resulted 
in significant facility and equipment modernization. At these sites I 
have seen true state-of-the-art laboratories constructed and equipped, 
which has resulted in these Services' ability to attract high quality 
graduates in a variety of science and engineering disciplines.
    Dr. Freeman. Previous consolidation efforts have had a short-term 
negative impact on laboratory performance. Much of the negative impact 
stems from the loss of personnel and concomitant loss of experience, 
the decrease in morale, and the loss of productivity and time 
associated with shuttering existing facilities and building new 
facilities. The construction of new facilities associated with recent 
BRAC moves may increase laboratory performance over the longer-term, 
although it is too early to make that determination.
    Ms. Lacey. The overall impact of previous consolidation efforts has 
been positive to neutral for Navy laboratories. While the impact to 
individuals where activities lost mission responsibilities can be 
traumatic, over time, these consolidations have enabled the Department 
to improve the effective use of intellectual capital and resources.
    Dr. Walker. AFRL is unique among the Services as this one 
laboratory houses all Air Force efforts to discover, develop, and 
integrate affordable aerospace warfighting technologies. Two decades 
ago, the Air Force laboratory system spread research across 14 
different individual laboratory organizations nationwide. In 1990, 
these locations were merged into four superlabs. Finally, in 1997, the 
current single, unified AFRL structure was completed, bringing Air 
Force S&T to a new level of efficiency, collaboration, and innovation.
    The 2005 BRAC provided further efficiency by consolidating human 
performance research and sensor technology research at Wright-Patterson 
AFB, OH, space vehicle technology research at Kirtland AFB, NM, and 
information technology research at Rome Research Site, NY. The 
Laboratory's BRAC realignments successfully realized the Secretary of 
the Air Force's priorities for BRAC 2005, including the goals of 
realigning Air Force infrastructure with the future defense strategy, 
maximizing operational capability by eliminating excess physical 
capacity, and capitalizing on opportunities for joint activity.

                           LABORATORY REVIEW

    16. Senator Portman. Secretary Lemnios, in 2009, former Chief 
Scientist of Army Materiel Command, Dr. Richard Chait, published a 
report on DOD laboratories. In it, he said that since 1962 there have 
been at least 100 studies and related reviews of government 
laboratories, and that each had emphasized consolidation and increased 
efficiency. How will the current assessment of the laboratory 
enterprise that you have launched be different from the other studies 
that have been reported?
    Mr. Lemnios. I expect that some of the results from the current 
study may echo findings and recommendations from previous studies. 
However, I have directed that the current study focus on DOD labs as an 
integrated enterprise oriented towards the Department's strategic 
directions articulated in January of this year. As a result, I 
anticipate that some findings and recommendations will differ from 
previous studies as we align this enterprise with the Department 
strategy.

    17. Senator Portman. Secretary Lemnios, what goal would you like to 
achieve with this new assessment?
    Mr. Lemnios. This assessment will provide recommendations for how 
DOD should operate its Laboratory Enterprise to support the needs of 
the Department. In particular, the assessment is focused on approaches 
for the Department's Laboratory Enterprise to deliver prototype 
concepts to the warfighter and products to the Department's acquisition 
programs, either directly or through the industrial base. This 
assessment seeks to answer the question: ``How should the Department 
operate a DOD Laboratory Enterprise to support the current and evolving 
needs of the Department?''

    18. Senator Portman. Secretary Lemnios, are you emphasizing 
consolidation and increased efficiency like previous studies?
    Mr. Lemnios. No. This assessment will provide recommendations for 
how DOD should operate its Laboratory Enterprise to support the needs 
of the Department. In particular, the assessment is focused on 
approaches for the Department's Laboratory Enterprise to deliver 
prototype concepts to the warfighter and products to the Department's 
acquisition programs, either directly or through the industrial base. 
This assessment seeks to answer the question ``How should the 
Department operate a DOD Laboratory Enterprise to support the current 
and evolving needs of the Department?''
    The assessment will provide recommendations for laboratory 
enterprise models that promote technology transition and provide 
incentives to ensure effectiveness and efficiency of the Department's 
Laboratory Enterprise for the next decade and beyond.

                             BASIC RESEARCH

    19. Senator Portman. Dr. Freeman, a 2012 report on DOD's basic 
research by the DSB stated that about 25 percent of DOD's basic 
research budget goes to the laboratories. Do you believe this is an 
appropriate investment in basic research within the Army's portfolio?
    Dr. Freeman. The Army executes approximately 30 percent of our 
basic research investment within our laboratories. At this time, this 
is an appropriate level; however, we strongly believe in seeking the 
strongest performers to conduct basic research in areas relevant to the 
Army mission and the soldier--whether that is in our laboratories, or 
our academic and industry partners. The Army needs a high-quality, 
inquisitive, agile in-house and extramural basic research program with 
a long-term time horizon, in part because geopolitical futures and the 
needs of the future Army are uncertain. We also seek to leverage our 
investment, where appropriate, to maximize the return on our basic 
research investment portfolio.

    20. Senator Portman. Dr. Freeman, does the basic research being 
performed have direct application to the warfighter?
    Dr. Freeman. While by the commonly accepted definition basic 
research has no specific application, we focus our Army basic research 
investments in areas that will provide superior technical capabilities 
for our warfighters. For example, we focus our basic research 
investment in materials science to provide fundamental knowledge that 
will provide our soldier greater protection, at lighter weight--both 
for personal protection as well as for vehicles and facilities. We rely 
on our program managers within our research facilities to conduct an 
aggressive basic science research program on behalf of the Army so that 
cutting-edge scientific discoveries and the general store of scientific 
knowledge will be optimally used to develop and improve the technical 
capabilities for our warfighters.

    [Whereupon, at 4:30 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2013 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                         TUESDAY, JUNE 12, 2012

                           U.S. Senate,    
                   Subcommittee on Emerging
                          Threats and Capabilities,
                               Committee on Armed Services,
                                                    Washington, DC.

 PROLIFERATION PREVENTION PROGRAMS AT THE DEPARTMENT OF ENERGY AND AT 
                       THE DEPARTMENT OF DEFENSE

    The subcommittee met, pursuant to notice, at 2:31 p.m. in 
room SR-232A, Russell Senate Office Building, Senator Kay R. 
Hagan (chairman of the subcommittee) presiding.
    Committee members present: Senators Hagan and Portman.
    Majority staff members present: Jonathan S. Epstein, 
counsel; Richard W. Fieldhouse, professional staff member; and 
Robie I. Samanta Roy, professional staff member.
    Minority staff members present: Adam J. Barker, 
professional staff member; Daniel A. Lerner, professional staff 
member; and Elizabeth C. Lopez, research assistant.
    Staff assistants present: Jennifer R. Knowles and Kathleen 
A. Kulenkampff.
    Committee members' assistants present: Christopher Cannon, 
assistant to Senator Hagan; and Brent Bombach, assistant to 
Senator Portman.

      OPENING STATEMENT OF SENATOR KAY R. HAGAN, CHAIRMAN

    Senator Hagan. I would like to go ahead and call this 
hearing to order. The purpose of today's hearing is to review 
the President's fiscal year 2013 request for proliferation 
prevention programs at the Department of Defense (DOD) and 
Department of Energy (DOE). The hearing was originally planned 
for April 24, but we had to postpone it because of a number of 
the Senate votes that were taking place that afternoon.
    Today we plan to have a hard stop at this hearing at 3:45 
p.m. so that we can adjourn to the Office of Senate Security in 
room SVC-217 of the Capitol Visitor Center for a closed session 
with today's witnesses.
    We're joined today by three expert witnesses to help us 
understand these programs that are underway in both 
departments. Hon. Madelyn R. Creedon is the Assistant Secretary 
of Defense for Global Strategic Affairs and she is responsible, 
among many other subjects, for the policy aspects of these 
programs at DOD. This is your third time this year before the 
Senate Armed Services Committee and, as you can tell, we miss 
you very much. So we're glad to have you back today.
    Mr. Kenneth A. Myers III is the Director of the Defense 
Threat Reduction Agency (DTRA) at DOD, which is focused on 
reducing the threats from weapons of mass destruction (WMD). 
The agency is responsible for the Cooperative Threat Reduction 
(CTR) program. He's also the Director of the U.S. Strategic 
Command Center for Combating WMD, located at the agency.
    Ms. Anne Harrington is the Deputy Administrator for Defense 
Nuclear Nonproliferation at the National Nuclear Security 
Administration (NNSA) of DOE.
    We thank all of you for the service that you are giving to 
our country and we thank you for being here today with us.
    For fiscal year 2013, DOD and DOE propose to spend on the 
order of $3 billion to help stem the flow of WMD. Most of the 
programs, such as the CTR program, are well-established in 
Russia and the former Soviet states and have made noteworthy 
accomplishments in securing bomb-grade nuclear weapons 
materials, as well as chemical weapons and biological 
materials.
    I understand we are now transitioning many of these 
programs to countries in the Southeast Asia region and Africa. 
As these programs transition geographically to address other 
emerging proliferation concerns, we will be looking for a 
threat assessment in each case to justify the transition and a 
set of measurable goals or metrics to measure programmatic 
success. The authorization bill that was just passed by this 
committee would require a set of concise program metrics to be 
included in the annual report for the program.
    Within the DOE's NNSA, I have concerns about the mixed 
oxide (MOX) fuel program. The purpose of the 13-year-old 
program is to turn 34 metric tons of excess weapons-grade 
plutonium into reactor fuel for peaceful purposes, a laudable 
nonproliferation goal. As originally envisioned, the program 
was to be operational in 2014 at a total cost of $3.6 billion. 
This cost included three facilities: a facility to prepare 
plutonium feedstock for the reactor fuel, a fuel fabrication 
building, and a waste handling facility.
    In 2008, the total program cost rose to $4.7 billion and in 
2010 the operational date shifted back 3 years to 2017. Since 
1999, we have spent over $6 billion on this effort. I 
understand that last year the plan to build the plutonium 
feedstock facility was dropped due to cost growth. Instead, 
there is a proposal to use existing facilities at Los Alamos 
and the Savannah River Site.
    So we now have a situation where we are building a $4 
billion fuel fabrication building with no dedicated feedstock 
facility to provide it plutonium, and apparently no commercial 
reactor vendor has signed a contract to use the plutonium fuel 
even at below market rates.
    The bill passed by this committee would increase oversight 
on this project by requiring an assessment on what facilities 
will be used for supplying feedstock and the cost in doing so 
over the entire lifespan of the program.
    I also understand the program will have a new baseline 
established this summer, so there is continuing uncertainty 
about cost and schedule. Please make sure you inform Congress 
of the results of this baseline adjustment, and I look forward 
to hearing from NNSA today on actions that they are taking to 
rein in the cost of this project.
    I did want everyone to note that, due to some scheduling 
conflicts, we need to depart from the closed portion of today's 
hearing around 4:30 p.m., so what I'd like to do is wrap up 
this open session at 3:45 p.m. if that's sufficient time for 
our questions and then move to the Office of Senate Security 
for the closed session, which will begin as planned right 
around 4 p.m.
    To save time, if this is concurrent with Senator Portman, I 
would like to ask the witnesses if they could submit their 
testimony and oral statements directly for the record so that 
Senator Portman and I could go directly into questions.
    I do thank you for your testimony, and before we begin 
asking questions of our witnesses, I want to turn to my 
colleague and ranking member, Senator Portman, for any comments 
that he might wish to give.
    Senator Portman.

                STATEMENT OF SENATOR ROB PORTMAN

    Senator Portman. Thank you, Madam Chair, and I'll be brief. 
I want to join you in welcoming these witnesses and thank them 
for their work and for the dedicated men and women in their 
respective agencies who work every day to protect our Nation.
    We find ourselves in a global security environment today 
starkly different than ones we've faced in the past and so this 
is a great hearing to talk about some of the challenges that we 
face. During the Cold War, we knew who the enemy was and we 
actually had a pretty good understanding what their 
capabilities were. Today, that's not the case. We have rogue 
nations, non-state actors who seek to acquire WMD that if 
employed successfully would have catastrophic consequences for 
our Nation and for those of our allies.
    We have made some progress in mitigating such risks--we'll 
hear about that today--through ongoing efforts to secure or 
destroy some of the world's most dangerous weapons and 
technologies, and yet extremist actors remain intent on 
obtaining and potentially using these materials to conduct 
attacks.
    The witnesses today represent the primary entities within 
DOD and DOE responsible for preventing the proliferation or use 
of WMD. In addition to dealing with a challenging and 
increasingly complex security environment the witnesses also 
have to contend with the growing budgetary crisis that will 
require difficult decisions in the months and years ahead. We 
look forward to talking about the budget and about what's 
happened over the last few years and what's likely to happen 
going forward.
    It's imperative we spend every dollar in our counter-WMD 
efforts in the most cost-effective way possible and be sure 
that we're not wasting any on duplication or underperforming 
programs. We'll again have a chance to talk about a Government 
Accountability Office (GAO) study and some other questions, I 
think, with regard to making sure that we are being as cost-
effective as possible.
    Coordination across the interagency and among our 
international partners is increasingly essential in this regard 
to avoid overlap and fragmentation of our efforts. We have to 
be mindful of the potential impact of sequestration, which will 
force an additional across-the-board reduction of nearly half a 
trillion dollars to the defense budget if it's allowed to 
stand. I want to hear more about that today and what is being 
planned. As much as we'd like to avoid it, what would have to 
happen should we go to sequestration?
    So I look forward to an assessment from our witnesses on 
sequestration with regard to the programs that specifically you 
oversee and your ability to execute the missions you've been 
assigned.
    Again, Madam Chair, I thank the witnesses for joining us 
today and look forward to their testimony and questions.
    Senator Hagan. Thank you, Senator Portman.

 STATEMENT OF HON. MADELYN R. CREEDON, ASSISTANT SECRETARY OF 
  DEFENSE FOR GLOBAL STRATEGIC AFFAIRS, DEPARTMENT OF DEFENSE

    [The prepared statement of Ms. Creedon follows:]

             Prepared Statement by Hon. Madelyn R. Creedon

                              INTRODUCTION

    Madam Chairman, Ranking Member Portman, and members of the 
subcommittee, I am pleased to testify today about the recent progress 
the Department of Defense (DOD) has made in carrying out the full range 
of the Department of Defense's efforts to counter weapons of mass 
destruction (CWMD).
    The Department has a solid record of achievement in supporting 
whole-of-government efforts to prevent the proliferation and use of 
nuclear, biological, and chemical weapons and related materials, 
protect the United States and its allies and partners from weapons of 
mass destruction (WMD) threats, and respond to WMD threats should 
prevention fail. DOD accomplishes these objectives by supporting the 
global, multilateral WMD nonproliferation regime, robust partner 
engagement and capacity-building efforts, as well as further developing 
U.S. capabilities to counter WMD. I am pleased to be here, today, with 
two colleagues whose efforts are vital to countering the threat of WMD: 
Mr. Kenneth A. Myers III, the Director of the Defense Threat Reduction 
Agency (DTRA); and Ms. Anne M. Harrington, the Deputy Administrator of 
the National Nuclear Security Administration (NNSA). Together, we are 
working to make the world safer from WMD threats.
    In my role as the assistant Secretary of Defense for Global 
Strategic Affairs in the Office of the Under Secretary of Defense for 
Policy, I oversee Defense efforts to counter WMD, as well as setting 
Nuclear and Missile Defense Policy, Space Policy and Cyber Policy. My 
team develops strategies and policy guidance to counter WMD, sets 
Departmental priorities, and participates in interagency groups and 
international relationships, all on behalf of the Secretary of Defense. 
DTRA, as ably led by Mr. Myers, implements our CWMD guidance by 
managing and executing the CTR Program and other efforts to counter 
WMD. Mr. Andrew C. Weber, the assistant Secretary of Defense for 
Nuclear, Chemical and Biological Defense Programs, provides acquisition 
guidance and oversight for DTRA's work. Together, we work with the 
Joint Staff, the Combatant Commands, and the Services to execute DOD's 
CWMD responsibilities.
    DOD's efforts are well coordinated with Ms. Harrington and her team 
at NNSA, as well as with our colleagues at the Department of State and 
other U.S. Government departments and agencies. It is through the close 
collaboration, teamwork, and dedication of the men and women at each of 
our agencies that we are effective and able to succeed in our mission 
to ensure the security of the United States and its citizens.

                     THE GLOBAL THREAT ENVIRONMENT

    There is no greater threat to the American people than weapons of 
mass destruction, particularly the danger posed by the proliferation of 
nuclear weapons to additional states and their pursuit by violent 
extremists. We know that both state and non-state actors continue to 
seek WMD and related materials and expertise. This fact, combined with 
advances in nuclear, chemical, and life sciences, as well as increases 
in access to scientific information and expertise, pose new and growing 
challenges to preventing potential adversaries from acquiring WMD.
    The global security environment continues to change, and has become 
more unpredictable as the global order has become more unstable since 
the end of the Cold War. Instability anywhere in the world could 
present us with new challenges, and underline the need to enhance U.S. 
capabilities and international partnerships to counter the WMD threat. 
The instability or collapse of a WMD-armed state, such as Syria, is 
among the most troubling security concerns in the world today. Such an 
occurrence could lead to rapid proliferation of WMD material, weapons, 
and technology, and could quickly become a global crisis posing a 
direct physical threat to the United States and all other nations. 
Threats like this are at top priorities for the Department of Defense, 
Whether they emanate from Syria or elsewhere, I can assure you that DOD 
is committed to efforts to prevent the proliferation or use of WMD, 
protect the United States and our allies from WMD threats, and respond 
to WMD threats should our prevention efforts fail.

                           STRATEGIC GUIDANCE

    DOD's efforts to counter WMD are guided by the national-level, 
White House-issued strategy guidance, including the National Security 
Strategy of the United States and the National Strategy for Countering 
Biological Threats. The guidance contained therein informs the 
Department's strategy documents, including the Quadrennial Defense 
Review, the Nuclear Posture Review Report, Secretary Panetta's January 
2012 strategic guidance, ``Sustaining U.S. Global Leadership: 
Priorities for the 21st Century,'' and the National Military Strategy 
of the United States of America.
    The National Security Strategy outlines a comprehensive 
nonproliferation and security agenda, including reducing the size of 
the U.S. nuclear arsenal and the role of nuclear weapons, promoting 
regional stability, and ensuring the effectiveness of our deterrent and 
defensive capabilities.
    The National Strategy for Countering Biological Threats guides our 
efforts to prevent and respond to the proliferation and use of 
biological weapons by states or non-state actors through increasing 
worldwide capability to detect outbreaks of disease, whether 
intentional or natural, through the application of targeted and proven 
tools for biological risk management.
    The Quadrennial Defense Review (QDR) establishes ``Preventing 
Proliferation and Countering WMD'' and ``Defending the United States 
and Supporting Civil Authorities at Home'' among the Department's six 
key mission areas.
    The Nuclear Posture Review better aligns our nuclear policies and 
posture to our most urgent priorities--preventing nuclear terrorism and 
proliferation while ensuring the maintenance of a safe, secure, and 
effective nuclear deterrent for as long as nuclear weapons exist.
    Sustaining U.S. Global Leadership: Priorities for the 21st Century 
provides us with the latest strategic vision from the Secretary of 
Defense on how to prioritize our efforts in a resource-constrained 
environment, while still carrying out our essential mission to defend 
the Nation. The guidance firmly ensconces countering WMD as one of the 
ten primary missions of the U.S. Armed Forces.
    Finally, the 2011 National Military Strategy of the United States 
of America aligns the activities of the Armed Services and Combatant 
Commands to the National Security Strategy, the QDR, and other top-
level guidance.
    Together, these documents emphasize the need to have the 
capabilities to both prevent WMD proliferation to state and non-state 
actors, and respond to proliferation or use, should those efforts fail. 
We also will continue to build the capacity and capabilities of our 
partners to participate jointly in these efforts and reinforce the 
effectiveness of the global, multilateral WMD nonproliferation regime.

                            THE DOD RESPONSE

    As I stated previously, DOD works to prevent the proliferation of 
WMD and build our and partner nations' capacity and capability to 
prevent and respond to WMD threats. These efforts include the necessary 
research, doctrine development, training and education to ensure that 
these capabilities remain effective components of the response by DOD 
and our partners. DOD protects the homeland and our allies and ensures 
that our troops, along with those of our coalition partners, can fight 
and win in an environment contaminated by WMD hazards.

    1.  Reinforcing the Global WMD Nonproliferation Regime

    The United States has worked with our allies and partners to 
support and enhance a global nonproliferation regime to share the costs 
and increase the effectiveness of our collective efforts to reduce our 
vulnerability to WMD. Each part of the global regime reinforces the 
others. For instance, the Biological Toxin and Weapons Convention 
(BTWC), the Chemical Weapons Convention (CWC), and the Nuclear Non-
Proliferation Treaty (NPT) help set global norms against biological and 
chemical weapons proliferation and nuclear proliferation. Agreements, 
such as the International Atomic Energy Agency's Additional Protocol 
(IAEA AP) and the as-yet unratified Comprehensive Test Ban Treaty 
(CTBT), and a potential Fissile Material Cutoff Treaty (FMCT), raise 
and reinforce the barriers to WMD proliferation. Other international 
bodies, such as the United Nations Security Council, seek to establish 
norms for proliferation prevention and build roadblocks for potential 
proliferators. Regional agreements, such as nuclear weapon free zones, 
and regional security organizations, such as NATO, and other efforts, 
such as the Washington and Seoul Nuclear Security Summits, and the 
Global Partnership Against the Spread of Weapons and Materials of Mass 
Destruction provide forums to focus efforts and attention on 
reinforcing the norms and behaviors associated with the global WMD 
nonproliferation regime.
    We see real benefit in strengthening the global regime, both to set 
the example of good global citizenship, and to build support for global 
action when countries cheat. Unilateral approbation can be a powerful 
tool in seeking compliance, but our efforts are stronger when the rest 
of the world agrees and acts with us against cheaters and 
proliferators. Of course, some countries, such as Syria, Iran, and 
North Korea, refuse to play by the rules and continue to challenge 
international norms of good behavior. The United States will continue 
to uphold the highest standards of nonproliferation and hold cheaters 
and proliferators to account.
    The norms against biological weapons, stated in the BTWC, are among 
the strongest. The parties at the December 2011 BTWC Review Conference 
agreed to an ambitious Intersessional process to strengthen 
implementation. The BTWC bans the development, production, acquisition, 
stockpiling, retention, or transfer of biological weapons. The number 
of countries that have not signed or ratified the Convention, however, 
is too long. In addition, some countries do not fully participate in 
the BTWC confidence building measures. DOD's efforts include supporting 
expert discussions and providing information on DOD facilities and 
activities as part of the confidence building measures. DOD also has 
taken steps to increase the transparency of our biological defense 
activities. We hosted the Chairman of the BTWC at the U.S. Army Medical 
Research Institute of Infectious Diseases (USAMRIID) at Fort Detrick, 
MD, in 2011, and we have invited select BTWC Ambassadors to visit 
USAMRIID later this year. The United States encourages other BTWC 
parties to do the same and provide transparency to their bio-defense 
efforts.
    The parties at the NPT Review Conference in 2010 achieved consensus 
on an Action Plan that reinforces the Treaty's role as the cornerstone 
of the global nuclear nonproliferation regime and commits to specific 
action to improve its effectiveness during the intersessional process. 
The Action Plan calls for strengthening the three pillars of the 
Treaty--improving safeguards to ensure nuclear nonproliferation, 
working towards nuclear disarmament, and sharing the benefits of the 
peaceful uses of nuclear energy. The United States has demonstrated 
leadership in pursuing nuclear reductions--most notably by bringing 
into force the New START treaty with Russia--and DOD actively 
participates with our colleagues at State and the NNSA in supporting 
proposals and activities to fulfill the commitments contained in the 
action Plan. In addition, DOD implements certain U.S. Government 
commitments under the IAEA Additional Protocol--an important facet of 
U.S. compliance with its nonproliferation obligations--including 
providing information on non-sensitive DOD facilities and activities, 
and supporting managed access visits.
    The administration is committed to seeking ratification of the CTBT 
and its entry-into-force. The CTBT bans the testing of nuclear weapons, 
thus creating another barrier to non-weapon states that may seek to 
acquire nuclear weapons. The CTBT also hinders existing nuclear powers 
from developing new, potentially destabilizing types of warheads. The 
United States demonstrates our commitment to entry-into-force by 
maintaining a nuclear weapons testing moratorium and supporting the 
development of onsite inspection procedures and the International 
Monitoring System. The ability of both the international community and 
the United States to detect nuclear tests has improved greatly since 
1999 when the Senate first considered the Treaty. The Department of 
Energy's Stockpile Stewardship Program continues to ensure the safety, 
security, and effectiveness of our nuclear deterrent without nuclear 
tests. CTBT remains fully in America's national security interest. The 
United States continues to seek a FMCT, and is working in Geneva at the 
U.N. Conference on Disarmament towards a negotiation to ban production 
of fissile material for use in nuclear weapons. DOD provides experts to 
form interagency positions on the FMCT, supports discussions, and 
participates in discussions among technical experts.
    President Obama in 2009 announced a goal of securing all vulnerable 
nuclear materials worldwide. The President hosted the first Nuclear 
Security Summit in Washington in April 2010 to focus world leaders on 
nuclear security and to secure concrete commitments for action. At the 
second Nuclear Security Summit, held in Seoul in March 2012, 
participants reported the progress they have made in meeting their 2010 
commitments--an analysis by the independent Arms Control Association 
indicates that 90 percent of these commitments were completed. In one 
such success, President Obama stood with President Medvedev of Russia 
and President Nazarbayev of Kazakhstan to announce the imminent 
completion of a trilateral project, managed for the United States by 
DOD's Nunn-Lugar Cooperative Threat Reduction Program (CTR), to secure 
hundreds of kilograms of vulnerable nuclear material at the former 
Semipalatinsk Test Site in Kazakhstan. The project represents the most 
visible, but far from the only, DOD contribution to the President's 4-
year effort to lock down vulnerable nuclear material globally.
    The Department supports various nuclear security conventions aimed 
at preventing global nuclear terrorism and proliferation, such as the 
International Convention for the Suppression of Acts of Nuclear 
Terrorism (ICSANT), which addresses terrorism involving nuclear weapons 
and other radioactive materials; the Amendment to the Convention on 
Physical Protection of Nuclear Material (CPPNM), which addresses the 
physical protection of nuclear material used for peaceful purposes; and 
the Two Protocols to the Convention for the Suppression of Unlawful 
Acts Against the Safety of Maritime Navigation and the Convention for 
the Suppression of Unlawful Acts Against the Safety of Fixed Platforms 
Located on the Continental Shelf, which address the potential use of 
maritime vessels or platforms for terrorism or WMD transport. In 2008, 
the Senate unanimously provided its advice and consent to ratification 
of all four treaties. The Department of Defense encourages the passage 
of implementing legislation currently before Congress that will allow 
the United States to ratify these agreements to bolster our efforts to 
protect the American people against proliferation threats.
    In May 2011, the President submitted the protocols to the Treaties 
of Pelindaba and Rarotonga to the Senate for its advice and consent to 
ratification. DOD supports U.S. accession to the Protocols to both of 
these Nuclear Weapon Free Zones (NWFZs)--in Africa and the South 
Pacific, respectively--because both are consistent with the U.S. 
Nuclear Posture Review and enhance U.S. security by furthering our 
global nonproliferation and arms control objectives. Neither Protocol 
requires any changes to U.S. law, policy, or practice, nor would they 
require any changes to our defense plans or posture. We hope the Senate 
will take up the Protocols for both Treaties for consideration and 
provide its advice and consent for ratification. Looking further 
forward, we have reached an agreement in principle that resolves our 
concerns regarding the Protocol to the Southeast Asia NWFZ Treaty by 
completing a revised Protocol. We will continue our efforts to clarify 
remaining questions over the Protocol to the Central Asian NWFZ Treaty.
    Finally, we engage with regional partners to leverage further our 
countering WMD capabilities. One such partner is NATO. The NATO 
Strategic Concept, adopted in Lisbon in 2010, provides the roadmap for 
further developing NATO's capacity to defend against the threat of 
chemical, biological, radiological, and nuclear weapons. The United 
States ensured that the Concept included direction to improve the 
capacity of allies to counter proliferation of WMD and their means of 
delivery.

    2.  Working with Partners

    DOD also responds to global WMD threats by working with allied and 
partner nations. This includes robust partner engagement efforts to 
leverage existing capabilities and build partner capacity through the 
Nunn-Lugar Cooperative Threat Reduction (CTR) Program, the 
International Counterproliferation Program (ICP), and the Proliferation 
Security Initiative (PSI).
    In terms of our threat reduction and capacity-building efforts, I 
would like to refer specifically to the Nunn-Lugar CTR Program--a 
highly-effective effort to work bilaterally with partner governments 
around the world to reduce and eliminate existing or past WMD programs 
on their territory. The Nunn-Lugar CTR Program is the primary DOD 
mechanism that supports the President's goal of improving the security 
of all nuclear material world-wide. For 2 decades, the Nunn-Lugar CTR 
Program has reduced the threat emanating from the legacy WMD programs 
of the Soviet Union. In recent years, the program has adapted to go 
beyond the former Soviet states and take on new and emerging WMD 
threats in other regions. CTR's many achievements are extraordinary; 
however, I will focus my remarks on our most recent achievements and 
our future goals and plans.
    For fiscal year 2013, the Department of Defense has requested 
$519.1 million for the CTR Program; this includes $99.8 million for the 
Global Nuclear Security (GNS) Program; $32.4 million for the 
Proliferation Prevention Program (PPP), and $276.4 million for the 
Cooperative Biological Engagement Program (CBEP). Congressional support 
for this request will enable the Department to continue its important 
contributions to reducing nuclear and biological threats.
    During 2011, the CTR program continued to expand globally to build 
new partnerships to support our nonproliferation efforts, managing its 
largest 1-year budget in its history, and making more new political 
commitments than ever. We increased CTR's reach with new partnerships 
in Africa, the Middle East, South Asia, focused on improving 
responsiveness and stewardship of the program. We have adapted CTR to 
meet emerging threats with agility--identifying enduring partnerships 
with countries focused on providing sustained effort, adjusting our 
efforts where attention is not as focused, and enhancing our engagement 
across DOD and the interagency.
    In Russia, CTR's Global Nuclear Security (GNS) program remains 
focused on improving the site and transportation security of nuclear 
weapons and related materials. Naturally, this includes close 
cooperation with the Department of Energy, building on our joint 
experience improving local capacities to sustain and improve security 
systems. Since 2010, the GNS program has helped Russia consolidate its 
nuclear warhead storage, maintain and improve nuclear weapon storage 
security and accountability, transport highly-enriched spent nuclear 
fuel from decommissioned submarines for disposal, increase nuclear 
security training capacity, and assess new security technologies and 
methods.
    The Nuclear Security Centers of Excellence is another important 
effort that builds a sustainable partnership to support nuclear 
nonproliferation. DOD, through the CTR program and in partnership with 
DOE, is providing technical expertise and a modest level of resources 
to support the Center of Excellence for Nuclear Security in China. We 
also are discussing a partnership with India in the nuclear security 
component of its Global Center for Nuclear Energy Partnership and 
providing some initial facilitation support to Kazakhstan's nuclear 
security center of excellence. These Centers will allow us to exchange 
nuclear security best practices, demonstrate security equipment, 
contribute to national and regional training programs, and collaborate 
on the research and development of nuclear security technologies.
    Our strategy requires a layered defense against proliferation 
threats. The WMD Proliferation Prevention Program (PPP) is CTR's means 
to enhance our partners' ability to detect and interdict WMD on-the-
move through the provision of detection, surveillance, and interdiction 
capabilities. CTR's increased engagements in Southeast Asia, the 
Caucasus, Ukraine, and Moldova are critical to assist in developing the 
capability to detect and interdict WMD and related materials in 
transit.
    Although not an element of CTR, the ICP is a DOD activity that 
complements the capital-intensive investments of the CTR/PPP program 
through its modest, yet effective ``train-and-equip'' efforts. ICP is 
unique in that its legislative authority explicitly directs a 
partnership with the FBI and U.S. Customs and Border Protection to 
deter WMD proliferation in priority countries and regions. ICP and PPP 
are coordinated closely with complementary programs managed by our 
interagency partners, to include the State Department's Export Control 
and Related Border Security (EXBS) Program.
    DOD also participates in the G8 Global Partnership Against the 
Spread of Weapons and Materials of Mass Destruction as an important 
mechanism to coordinate and deconflict international threat reduction 
and nonproliferation assistance. This year the United States is serving 
as chair and seeking to strengthen Partnership efforts and focus on 
creating tangible deliverables to increase global bio-security. The 
United States is working to strengthen global efforts to counter 
biological threats by working with vitally-important international 
organizations, such as the World Health Organization (WHO), the 
Organization of Animal Health, and the Food and Agriculture 
Organization, each of which are dedicated to reducing risks and 
detecting outbreaks early. As an example of our cooperation, the United 
States has entered into a memorandum of understanding with WHO to 
improve global health security.
    While the Global Partnership has made it easier to share work on 
threat reduction projects with like-minded international partners, 
thanks to CTR's legislative authority to receive funds from outside 
contributors, we now have greater flexibility also to share costs. Let 
me give you one example. Pursuant to the National Defense Authorization 
Act for Fiscal Year 2010, I am currently seeking the determination of 
the Secretary of Defense, with the concurrence of the Secretary of 
State, to enter into memorandums of understanding (MOU) with the United 
Kingdom, Canada and the Netherlands in pursuit of cooperative threat 
reduction goals of the Global Partnership Against the Spread of Weapons 
and Materials of Mass Destruction. The specific CTR projects and scope 
of work to be funded will be mutually decided by DOD and outside 
contributors on a case-by-case basis once the MOUs are in place. We 
anticipate that the priorities for such contributions will include 
cooperative biological engagement work in the former Soviet Union, 
Iraq, Africa, and Southeast Asia.
    The most dynamic area of CTR activity continues to be biodefense 
engagement through the CBEP. The CBEP counters the threat posed by 
especially dangerous pathogens, related materials and expertise, and 
other emerging infectious disease risks in accordance with the National 
Security Strategy for Countering Biological Threats. This includes 
strengthening global health security, obtaining timely insight on 
emerging outbreaks, reducing the potential for exploitation of life 
sciences material and technology, and reinforcing norms of safe and 
responsible conduct. CBEP focuses its work in four program areas: (1) 
Secure and consolidate collections of especially dangerous pathogens; 
(2) Enhance partner country's capability to prevent the sale, theft, 
diversion, or accidental release of biological weapons-related 
materials; (3) Enhance partner country's capability to detect, 
diagnose, and report epidemics, bio-terror attacks, and potential 
pandemics; and (4) Ensure that the capabilities are sustainable within 
each partner country.
    Defending against infectious disease outbreaks, whether an attack 
or natural, is a global concern that requires a multinational effort 
and response. All governments share mutual goals of protecting their 
populations from infectious disease and, in doing so, they protect the 
global community in the process. This is why DOD, through the Nunn-
Lugar CTR Program, is building partner capacity in critical regions 
around the world that elevates the concern over bio-security risks and 
bio-surveillance for potential weaponized outbreaks alongside the 
broader global commitments to public health. In addition, CTR's legacy 
work eliminating the threat posed by the former Soviet bio-weapons 
enterprise, and DOD's own work developing the means for our soldiers to 
conduct operations in bio-contaminated environments, provides the DOD 
enterprise with unique skills and interests in reducing bio threats.
    Recently, the CBEP program has shifted from an FSU focus to areas 
of emerging bio-threats, such Southeast Asia, the Middle East, and 
Africa. With global connectivity bringing people from all parts of the 
world to U.S. shores every day, we cannot afford to ignore the threat 
that the combination of endemic or unsecure pathogens and terrorists 
seeking bio-weapons material or expertise poses. As CBEP has expanded 
beyond the former Soviet Union, it has adapted its approach to meet the 
unique regional needs and concerns to reduce overall footprint 
requirements and find lower-cost, more sustainable solutions for 
storage and research on these pathogens. As an example of CBEP's 
emphasis on emerging threats, a number of high-impact projects are 
underway in Kenya, including improvement of perimeter fences and 
security procedures, analysis of pathogen repository needs for over 100 
unsecured freezers at one facility, and cooperative biological research 
on some of the most challenging endemic diseases in the country. We 
will continue to assess the program's approaches and adapt to partner 
capacity and collaborative opportunities with other Global Partnership 
countries.
    DOD has led efforts with our interagency colleagues to make the 
Proliferation Security Initiative (PSI) a durable and effective effort 
to prevent the proliferation of WMD. Since its founding in 2003, 98 
countries have endorsed the PSI Statement of Interdiction Principles, 
and many of these partners work with the United States through military 
exercises, workshops, and training to improve interdiction and 
coordination capabilities. Building on these activities, the United 
States has proposed the Critical Capabilities and Practices effort for 
PSI. This effort seeks to take advantage of the significant work PSI 
partners have done to identify interdiction-related tools and ensure 
all PSI-endorsing nations have access to those tools. Examples of these 
tools include WMD and ballistic missile-related identification manuals, 
legal analyses and model legislation for seizing illicit goods, 
interdiction related training, and guidelines for sharing information 
related to cargoes. Related efforts over the next year include major 
multilateral PSI exercises such as Leading Edge co-hosted by the United 
Arab Emirates, which will send a significant deterrent message to 
proliferators.
    The benefit of these efforts to work collaboratively with partner 
and allied nations was demonstrated in the overwhelming U.S. response 
to the March 2011 Japanese tsunami and its aftermath through Operation 
Tomodachi. While this was not a response to a WMD attack, Operation 
Tomodachi highlighted DOD's unique ability to bring vast expertise and 
resources to aid allies in the event of a radiological accident or 
incident. DOD's extensive military infrastructure in the Pacific, our 
close working relationship with Japanese military and civilian 
partners, and vast experience in nuclear and radiological consequence 
management allowed us to quickly and effectively provide assistance 
where it was most needed, including radiation monitoring of the 
Fukushima Power Plant, support for humanitarian relief efforts, assist 
in search and rescue, and help in containment and decontamination. We 
were able to augment domestic Japanese response capabilities in key 
areas where we have greater capacity and expertise and assist a close 
ally in their critical time of need. This response also served as a 
good opportunity to work with our interagency partners and identify 
where there was a need for improved coordination.

    3.  Building U.S. Capabilities

    Finally, DOD responds to global WMD threats by looking internally 
to improve DOD capabilities and capacities to counter WMD. Over the 
last several years, DOD has invested significant time and resources to 
develop and enhance capabilities for detection, interdiction, 
elimination, and consequence management operations.
    We have gained important experience and learned valuable lessons 
from our efforts to field specialized consequence management response 
forces for chemical, biological, radiological and nuclear (CBRN) 
events. Complementing the evolution of earlier force structures, DOD 
and the National Guard are building the CBRN Response Enterprise (CRE), 
which will achieve full operational capability by October 2012. The CRE 
is a Federal and state military construct designed to decrease response 
times, save more lives, and standardize training, evaluations and 
exercises. The Homeland Response Force (HRF) is the centerpiece of 
National Guard portion of the CRE and provides a regional response 
capability to each of the 10 FEMA regions. The 556-person HRFs are 
prepared to deploy 12 hours or sooner after notification to support 
civil authorities with emergency medical, decontamination, and search 
and rescue assets.
    As a Department, we take very seriously our responsibility to 
protect the force and ensure it is able to operate fully within WMD 
environments, as well as defend the homeland from WMD attacks. To 
accomplish these objectives, we are building an integrated, layered 
defense, which includes working with the Department of Homeland 
Security to enhance the protective posture of the homeland; 
coordinating with the Intelligence Community to better identify likely 
proliferation pathways and illicit procurement networks; and, looking 
across the U.S. Government to invest in new capabilities to detect and 
characterize chemical, biological, or nuclear WMD threats.
    For instance, to counter the nuclear threat, DOD is looking both 
internally at how we should organize and invest to ensure an effective 
response as well as supporting NSS-led efforts to develop a whole-of-
government response plan. Faced with an unpredictable security 
environment, we are working towards a whole-of-government, synchronized 
response to detect, interdict, and contain loose nuclear weapons and 
related materials. This would include activities such as securing 
material at the source, intercepting material on the move, and 
increasing defenses to protect against an attack on the homeland. Our 
work at DOD has focused on how U.S. military units would coordinate 
with other U.S. agencies and with allies and partners in the face of 
such a ``loose nuke'' threat scenario. These efforts are critical to 
both preventing terrorists from obtaining or acquiring nuclear weapons 
or significant nuclear material, and ensuring we are prepared and 
postured to effectively respond should the worst case materialize.
    We also must enhance our ability to respond quickly to an attack 
should these efforts fail. In this regard, the President's budget 
request includes new resources to improve capabilities for technical 
nuclear forensics technologies and the fielding of new capabilities, 
including funding for air sample collection, in order to support the 
rapid source attribution of a terrorist attack. For fiscal year 2013, 
we have requested $6.5 million to accelerate integration, testing, 
evaluation, and certification of new particulate air sample collection 
systems, and we are conducting a comprehensive review of the overall 
nuclear sample collection requirements to inform future-year efforts. 
This study is due to be completed later this month.
    DOD plans and operations must reflect the dizzying pace of change, 
the limits on U.S. action, the challenges to intelligence in rapidly-
changing situations, and enduring technical hurdles related to WMD 
detection. These challenges, among others, have led DOD to establish a 
Standing Joint Force Headquarters for Elimination (SJFHQ-E) to serve as 
a permanent, joint advocate for refining tactics, techniques, and 
procedures to enhance our ability to locate, characterize, and secure 
WMD threats, to dissuade their use, and to remove or neutralize them if 
necessary, especially in non-permissive environments. SJFHQ-E also 
ensures that these capabilities are integrated into doctrine, training, 
and exercises across DOD. On February 3, 2012, the Commander of U.S. 
Strategic Command activated the SJFHQ-E. The headquarters, which will 
reach full operational capabilities in fiscal year 2013, will integrate 
DOD counter WMD assets, including nuclear disablement teams, CBRN 
Response Teams, radiation assessment teams, deployable laboratories, 
and tactical intelligence. It will greatly increase DOD's capability to 
locate, characterize, secure, and disable or destroy hostile WMD 
programs in a non-permissive or semi-permissive environment. It also 
will provide a focal point for working with allies and partners to 
build their awareness and capacity for WMD elimination operations 
worldwide.
    Emerging biological threats are no less dangerous than chemical or 
nuclear threats. An important priority of the National Strategy for 
Countering Biological Threats is increasing capability to conduct 
effective and timely disease surveillance worldwide. CTR, as I 
described earlier, is addressing this threat through CBEP, which 
collaborates with DOD's overseas medical research laboratories to 
leverage their technical expertise and regional relationships. CBEP 
provides expert technical training to CTR partners and conducts 
cooperative biological research to discover novel pathogens or 
characterize pathogens that are not generally found in the United 
States. Within the military medical community, these DOD overseas 
medical research labs are well-known for their intrepid work protecting 
U.S. military members from disease.
    DOD also is seeking to address new and novel threats resulting from 
the revolution in biotechnology and the chemical industry. While this 
revolution can provide tremendous benefits in medical science and 
economic growth, it also can undermine our confidence in existing chem-
bio defenses. With growing access to expertise, equipment, advanced 
technology, and the precursors needed to produce new chemical or 
biological compounds, we continue to devote more resources to research, 
doctrine development, training and education to develop improved 
countermeasures, personal protection gear, and new decontamination 
techniques to mitigate the effects of novel chemical and biological 
agents.

                               CONCLUSION

    The threat posed by WMD continues to evolve, and so do our efforts 
to combat it. These efforts span a range of unilateral and multilateral 
counter-proliferation and non-proliferation responses. The efforts I 
have outlined today keep DOD ahead of WMD threats. We continue to 
coordinate our efforts within the interagency and with our 
international partners to prevent and protect against these most 
dangerous threats. But none of the efforts I have described to you 
today would be possible without the continuing support of Congress. The 
authorities, budget, and personnel that you provide allows DOD to 
participate in the most important mission I can imagine--to protect the 
American people from a WMD attack. I thank you for your support for our 
fiscal year 2013 budget and look forward to continuing to partner 
closely with Congress to counter these threats.

STATEMENT OF ANNE HARRINGTON, DEPUTY ADMINISTRATOR FOR DEFENSE 
      NUCLEAR NONPROLIFERATION, NATIONAL NUCLEAR SECURITY 
              ADMINISTRATION, DEPARTMENT OF ENERGY

    [The prepared statement of Ms. Harrington follows:]

                 Prepared Statement by Anne Harrington

    Madam Chairman, Ranking Member Portman, and members of the 
subcommittee, thank you for opportunity to testify before you today on 
the President's fiscal year 2013 budget request for the National 
Nuclear Security Administration's (NNSA) Defense Nuclear 
Nonproliferation Programs. I will also share with you a brief summary 
of the successful achievements from the Nuclear Security Summit which 
concluded in Seoul, South Korea in March 2012.
    One of our most important missions at NNSA has been to support the 
administration's commitment to secure the most vulnerable nuclear 
material across the globe in 4 years. Our accomplishments in securing 
plutonium and highly-enriched uranium (HEU) around the world have made 
it significantly more difficult to acquire and traffic the materials 
required to make an improvised nuclear device, and I am proud to say 
that we are on track to meet our goals to remove or dispose of 4,353 
kilograms of HEU and plutonium in foreign countries, and equip 
approximately 229 buildings containing weapons-usable material with 
state-of-the-art security upgrades.
    The Defense Nuclear Nonproliferation budget request, and the 
National Defense Authorization Act for Fiscal Year 2013, as passed by 
the full Senate Armed Services Committee, provides the $2.46 billion 
needed to continue these and other critical nonproliferation and 
nuclear security efforts. Our continued focus on innovative and 
ambitious nonproliferation and nuclear security efforts is vital. The 
threat is not gone, and the consequences of nuclear terrorism and state 
proliferation would be devastating. Detonation of a nuclear device 
anywhere in the world would lead to significant loss of life, and 
overwhelming economic, political, and psychological consequences. We 
must remain committed to reducing the risk of nuclear terrorism and 
state-based proliferation.
    But there is no silver bullet solution, which is why we will 
continue to implement a multi-layered strategy to strengthen the 
security of nuclear material around the world by removing or 
eliminating it when we can; consolidating and securing it, if 
elimination is not an option; reducing the civilian use of HEU--
particularly for research and medical isotope production--where low-
enriched uranium options exist or can be developed; and maintaining our 
commitment to detecting and deterring nuclear smuggling. Many of you 
are familiar with the significant contributions that NNSA's Second Line 
of Defense program has made to the worldwide effort to combat nuclear 
trafficking. In light of the constrained budget environment that we 
find ourselves in, NNSA has initiated a strategic review of the program 
to evaluate what combinations of capabilities and programs make the 
most effective contribution to national security.
    We will continue to research and develop tools and technologies to 
detect the proliferation of nuclear materials as well as nuclear 
detonations. We will provide technical support and leadership to our 
interagency colleagues during the negotiation and implementation of 
arms control treaties, as we did with New START. We will expand on our 
ongoing efforts to strengthen the capabilities of our foreign partners 
to implement international nonproliferation and nuclear security norms, 
and support the critically important work of the International Atomic 
Energy Agency. We will continue to play a supporting role in the 
negotiation of Peaceful Nuclear Cooperation Agreements (so-called 123 
Agreements), which are so crucial for achieving our nuclear 
nonproliferation and trade objectives.
    The President's fiscal year 2013 budget request also keeps focus on 
our commitment to eliminate U.S. excess weapons materials and supports 
the Mixed Oxide Fuel Fabrication Facility and Waste Solidification 
Building at the Savannah River Site in South Carolina. The $569.5 
million committed to the MOX program and related activities this year 
will lead to the permanent elimination of enough plutonium for at least 
8,500 nuclear weapons, which will be matched by similar commitments by 
the Russian Federation. We have eliminated the line item for a Pit 
Disassembly and Conversion Facility from the MOX program, opting 
instead for a preferred alternative approach to producing feedstock 
that is much less costly by utilizing existing facilities at the 
Savannah River Site and Los Alamos National Laboratory.
    The President's proposed budget for fiscal year 2013 provides the 
funding necessary to carry out all of these activities; however, given 
the current fiscal constraints on all government agencies, we have 
stepped up our efforts to identify areas where our interagency partners 
and other nations can help share the costs associated with this 
important work. I am pleased to report that since Congress granted NNSA 
programs the ability to accept international contributions in fiscal 
year 2005, we have received nearly $80 million from Canada, the United 
Kingdom, Finland, South Korea, New Zealand, Norway, the Czech Republic, 
and the Netherlands. In addition, our nuclear and radiological security 
and Second Line of Defense activities with Russia have moved to a cost 
sharing basis with Russia assuming a growing share of the installation 
and sustainability costs of these projects. The full value of cost 
sharing with our international partners can be difficult to estimate 
precisely, but the financial, technical, and diplomatic resources that 
they bring to these efforts have enabled and accelerated important 
nuclear security efforts and saved the U.S. Government millions of 
dollars over the last several years.
    Nowhere is the positive impact of the international collaboration 
more demonstrated than in the Nuclear Security Summit process. The 
Nuclear Security Summit in Seoul issued a Communique, supported by 53 
Heads of State and Government, as well as representatives of the 
International Atomic Energy Agency (IAEA) and Interpol, all of which 
unanimously agreed that nuclear terrorism continues to be one of the 
most challenging threats to international security. Countries not only 
reported on their very substantial accomplishments since the Washington 
Nuclear Security Summit in 2010, they pledged additional actions to 
strengthen the IAEA; securing, accounting for, and consolidating 
nuclear materials; securing radioactive sources; enhancing the security 
of materials in transport; combating illicit trafficking; improving 
nuclear forensics capabilities; fostering a nuclear security culture 
through education and training; protecting sensitive information and 
enhancing cyber security measures; and engaging in international 
cooperation to achieve all of these goals. NNSA has been and will 
continue to be at the forefront of supporting efforts in all of these 
areas.
    Every country attending the Summit announced its accomplishments in 
a number of critical areas. Each statement in its own right was 
significant, but taken together they constitute a tremendous leap 
forward in the global effort to prevent nuclear terrorism. These 
achievements would not have been accomplished in such a short amount of 
time without the high-level attention that President Obama and his 
counterparts have focused on this issue. Some of the most impressive 
accomplishments announced at the Summit included: the United States, 
Mexico, and Canada working together to remove all HEU from Mexico; the 
United States, Russia, and Ukraine announcing the removal of the final 
HEU from Ukraine; and the removal of all plutonium from Sweden to the 
United States. As a result of these shipments, 22 countries have now 
been cleaned out of all HEU and Plutonium. It took 13 years to remove 
all special nuclear material from 13 countries prior to the President's 
April 2009 Prague speech announcing the 4-Year Effort. With the 
momentum of the Nuclear Security Summit process, 9 additional countries 
have been cleaned out of HEU and Plutonium, bringing the total to 22 
countries.
    A key to our efforts to reduce the threat of nuclear terrorism is 
minimizing the civilian use of HEU. Our agreement with Belgium, France, 
and the Netherlands to eliminate the use of HEU in medical isotopes 
production while concurrently assuring the reliable supply of these 
isotopes to patients in need, makes a meaningful contribution to this 
effort. The President also announced a previously secret program with 
Russia and Kazakhstan to remediate vulnerable nuclear material from the 
former Semipalatinsk Test Site. In addition, there were several key 
illicit trafficking deliverables, including the creation of counter 
nuclear smuggling teams in countries such as Jordan and a counter 
nuclear smuggling center of excellence in Lithuania. Finally, nearly 20 
countries also ratified key nuclear security and nuclear terrorism 
treaties: the Convention on the Physical Protection of Nuclear 
Materials and the International Convention on the Suppression of Acts 
of Nuclear Terrorism. There is much more to add, but this hopefully 
gives you a flavor of the positive and constructive framework that the 
Nuclear Security Summit process provides.
    In conclusion, I want to thank you for the opportunity to testify 
today on the NNSA's contributions to nuclear security. Working in 
concert with other U.S. Government programs and partners around the 
world, we are making concrete contributions to reducing the risk of 
nuclear terrorism and building a more secure future. Thank you for the 
tremendous support that our programs have enjoyed over the years from 
this committee and Congress. I welcome any questions you may have.

  STATEMENT OF KENNETH A. MYERS III, DIRECTOR, DEFENSE THREAT 
  REDUCTION AGENCY, DEPARTMENT OF DEFENSE; AND DIRECTOR, U.S. 
    STRATEGIC COMMAND CENTER FOR COMBATING WEAPONS OF MASS 
                          DESTRUCTION

    [The prepared statement of Mr. Myers follows:]

               Prepared Statement by Kenneth A. Myers III

                              INTRODUCTION

    Madame Chairwoman, Ranking Member Portman, and members of the 
subcommittee, it is an honor to be here today to address the programs 
and activities performed by the Defense Threat Reduction Agency (DTRA) 
and the U.S. Strategic Command Center for Combating Weapons of Mass 
Destruction (SCC-WMD). I serve as the Director of both DTRA and the 
SCC-WMD.
    The threat posed by Chemical, Biological, Radiological, and Nuclear 
(CBRN) weapons is one of the greatest security challenges facing our 
Nation and has the potential to undermine peace and stability around 
the globe. The May 2010 National Security Strategy of the United States 
of America cites reversing the spread of nuclear and biological weapons 
and the securing of nuclear materials as one of the Nation's six 
essential tasks to provide enduring security for the American people.
    The December 2002 National Strategy for Combating Weapons of Mass 
Destruction (NSPD-17), and the 13 February 2006 National Military 
Strategy to Combat Weapons of Mass Destruction further recognize the 
importance of cooperation with allies and other partners to prevent, 
deter, defend against, and respond to WMD threats. Most recently, the 
January 2012 Department of Defense (DOD) strategic guidance, entitled 
``Sustaining U.S. Global Leadership: Priorities for the 21st Century,'' 
included countering WMD (CWMD) as one of the ten primary missions of 
the U.S. Armed Forces. Furthermore, the ``Defense Budget Priorities and 
Choices'' document issued that same month stated that ``We [OSD] 
protected investment in this area (CWMD) and expanded its scope in the 
area of biological weapons.''
    The mission of DTRA and the SCC-WMD is to safeguard the United 
States and its allies from global WMD threats by integrating, 
synchronizing and providing expertise, technologies, and capabilities 
for reducing and eliminating WMD threats at their sources 
(Nonproliferation); deterring, interdicting, or defeating them 
(Counterproliferation); and and mitigating the consequences of their 
use (Consequence Management). Together we provide synergy and momentum 
for more effective and efficient implementation of national and 
department CWMD strategy and policy. We provide Counter WMD (CWMD) 
expertise and capabilities to a growing range of partners across DOD, 
the U.S. Government, and the international community. DTRA also 
combines science and technology with operational needs and 
requirements, providing capabilities tailored to the DOD operating 
environment. Additionally, DTRA provides support for the continued 
safety, security, and effectiveness of our nuclear deterrent, the 
importance of which was reaffirmed in the Defense Budget Priorities and 
Choices document.
    However, we could not do our job without the strong support of 
Congress and I thank you and your colleagues for fully approving the 
DTRA fiscal year 2012 budget request. I can assure you that we will be 
responsible stewards of the resources you have provided and the trust 
you have placed in us.

          DOD AND THE NATION'S EXPERT ON WMD THREAT REDUCTION

    DTRA and the SCC-WMD provide the core of the DOD and national 
expertise on the full scope of the CWMD mission. While many DOD and 
other U.S. Government organizations contribute to WMD threat reduction 
against a background of a broader mission scope, we focus full time on 
just CWMD. We are a policy and strategy implementation and execution 
team. We do not perform all functions in the CWMD mission, nor do we 
control all the resources or provide all of the capabilities.
    However, DTRA is the primary repository for the Nation's knowledge 
on the effects of Chemical, Biological, Radiological, Nuclear, and 
High-Yield Explosive (CBRNE), and in seamless partnership with the SCC-
WMD and in collaboration with others across the U.S. Government, 
performs unique CWMD responsibilities.
    Our activities and program span the full spectrum of the national 
CWMD strategy--from Nonproliferation through Counterproliferation to 
Consequence Management--and all eight of the military CWMD mission 
areas: Security Cooperation and Partner Activities, Threat Reduction 
Cooperation, Interdiction, Elimination, Offensive Operations, Active 
Defense, Passive Defense, and Consequence Management.
    Our responsibilities also require that we perform CWMD research and 
development for, and provide CWMD operational support to, the combatant 
commands (COCOMs). DTRA Research, Development, Test and Evaluation 
(RDT&E) programs combine Science and Technology (S&T) with operational, 
needs, requirements, and operating concepts, delivering capabilities 
that better enable the warfighters to counter WMD threats. In so doing, 
we also help shape concepts of operation, and the tactics, techniques, 
and procedures that forces in the field employ.
    This requires us to have a firm understanding of the environments 
in which DOD would perform its CWMD responsibilities. Many on our staff 
have military backgrounds and we also depend heavily on the 37 percent 
of our workforce provided by the Armed Forces. Our uniformed personnel 
keep us current on operational needs and procedures, and their 
assignments to DTRA and the SCC-WMD also provide a critical way for the 
Services to maintain their own CWMD expertise.
    Because our S&T and operational support responsibilities are 
intertwined, DTRA has a unique workforce with a wide range of 
professional disciplines that collaborate on CWMD challenges. DTRA 
microbiologists, computer scientists, health physicists, structural 
dynamics experts, and Special Operations Forces personnel work together 
on a daily basis to solve WMD-related challenges. Our nuclear experts 
are supporting efforts from global nuclear weapons lockdown, protection 
of our nuclear deterrent, and the hardening of U.S. Nuclear Command, 
Control, and Communications against nuclear weapons effects, to nuclear 
weapons employment plans. Our biologists are consolidating and 
improving the security of dangerous pathogen collections across the 
planet, working cooperatively with international partners to counter 
emerging infectious diseases, and developing new means for protecting 
our military personnel against biological terrorism and naturally 
occurring diseases. Our chemical weapons experts are assisting with the 
elimination of chemical weapons in the United States and Russia; 
developing means for improved force protection; and are working on 
policies, actions, and procedures that will ensure decontaminated air 
transport airframes are in fact safe for continued use. DTRA structural 
dynamics experts are working on solutions to hold underground WMD 
facilities at risk while also developing new means for mitigating blast 
effects resulting from vehicle-borne improvised explosive devices.
    Our workforce performs CWMD planning and exercise support, and 
provides CWMD expertise to the combatant commands and other U.S. 
Government customers. However, our CWMD S&T development is conducted 
differently. We do not have our own laboratory. Instead, we select from 
the full range of national expertise, wherever that may be. Our 
performers include the DOD and Department of Energy/National Nuclear 
Security Administration (DOE/NNSA) labs, contractors, federally Funded 
Research and Development Centers, University-Associated Research 
Centers, and academia. Our technical and operational experts provide 
direction and oversight for these performers and we select S&T 
performers on the basis of ``best of breed.''
    The contributions of the DTRA/SCC team are made daily at national, 
theater, and battlefield levels. For example, during the negotiations 
on the New Strategic Arms Reduction Treaty (New START), DTRA 
interpreters and onsite verification experts comprised 15 of the 56-
members of the U.S. negotiating team in Geneva. In addition, DTRA has 
conducted vulnerability assessments of the White House, the Capitol, 
and national-level command and control infrastructure. The Combatant 
Commanders rely upon us for CWMD planning and exercise support, 
training, and augmentation of their internal subject matter expertise 
to assist their CWMD efforts from theater security cooperation through 
warfighting and WMD elimination. We provide ``boots on the ground'' in 
hostile and uncertain environments to conduct vulnerability 
assessments, assist current military operations, and provide CWMD 
training. We are simultaneously and continuously addressing strategic, 
operational, and tactical level CWMD challenges. Our customer base 
continues to grow, as do the expectations of those we serve and 
support.

                             RELATIONSHIPS

    DTRA's roots reach to the early days of the Cold War when its 
predecessor organizations provided planning, technical, and operational 
nuclear weapons expertise to the Military Services, U.S. Strategic 
Command (STRATCOM), and that command's predecessors. Over the decades, 
our understanding of weapons effects has expanded from nuclear/
radiological to the full range of WMD effects, adding chemical, 
biological, and high-yield explosives to our portfolio of WMD effects 
expertise.
    The agency performs its mission in response to direction provided 
by the Office of the Secretary of Defense (OSD). As the Director of 
DTRA, I report through Mr. Andrew Weber, the Assistant Secretary of 
Defense for Nuclear, Chemical, and Biological Defense Programs, to the 
Under Secretary of Defense for Acquisition, Technology, and Logistics. 
Because DTRA performs S&T, we also work in close partnership with the 
Assistant Secretary of Defense for Research and Engineering. Since the 
DTRA/SCC-WMD team implements DOD and national security policy, and 
often with international partners, we are partnered with the Assistant 
Secretary of Defense for Global Strategic Affairs in the Office of the 
Under Secretary for Policy at OSD, and also work in collaboration with 
the Department of State.
    DTRA is also the DOD Combat Support Agency charged with providing 
CWMD expertise and support to the Joint Chiefs of Staff, the Military 
Services, and the combatant commanders. While we serve all combatant 
commanders, we work most closely with the six Geographic Combatant 
Commanders (GCCs), STRATCOM, and the U.S. Special Operations Command.
    Given the catastrophic nature of the WMD threat, timely and 
accurate intelligence is fundamental to preventing and attributing WMD 
attacks. A close relationship between WMD experts and the Intelligence 
Community is essential.
    Because the CWMD mission requires whole-of-government solutions, 
DTRA works closely with NNSA, the Department of Homeland Security 
(DHS), and Department of Health and Human Services (HHS), in particular 
leveraging our collective S&T investments and ensuring collaboration 
between our programs and activities. While DTRA, NNSA, DHS, and HHS 
share an interest in WMD-related science, the DOD application of that 
science is quite different from that of DHS as DOD forces must deploy 
and operate in unstable or hostile military environments at great 
distances from supporting infrastructure and logistical support. The 
military forces that we support face space, volume, and weight 
limitations, and must be easily deployable, supportable, reliable, 
rugged and survivable, yet simple to use.

                     DTRA AND STRATCOM PARTNERSHIP

    Since the early days of the Cold War, DTRA's predecessor 
organizations have had an extremely close and strong partnership with 
STRATCOM's predecessors on the nuclear mission. Seven years ago, that 
partnership was expanded to include the CWMD mission. In late 2005, the 
Secretary of Defense assigned the Commander, STRATCOM (CDRSTRATCOM) 
responsibility for integrating and synchronizing DOD CWMD efforts in 
support of U.S. Government objectives. The CDRSTRATCOM, turned to DTRA 
for its CWMD expertise and established the SCC-WMD alongside the agency 
at Fort Belvoir, VA, to leverage the agency's expertise and provide a 
seamless bond between the two organizations. On 31 January 2006, the 
Secretary of Defense assigned the DTRA Director to serve in the 
additional capacity as the Director, SCC-WMD, under the authority, 
direction, and control of the CDRSTRATCOM.
    The SCC-WMD supports STRATCOM's assigned CWMD Unified Command Plan 
(UCP) responsibilities:

         Synchronizing planning for DOD CWMD efforts;
         Advocating for CWMD capabilities;
         Providing military representation to U.S. national 
        agencies, U.S. commercial entities, and international agencies 
        related to CWMD, as directed;
         Integrating Theater Security Cooperation activities, 
        deployments, and capabilities that support campaigns to combat 
        WMD, as directed by CDRSTRATCOM;
         Developing and maintaining a global CWMD concept of 
        operations;
         Coordinating global CWMD operations support;
         Planning against designated CWMD threats; and
         Executing CWMD operations, as directed.

    The CDRSTRATCOM has delegated Coordinating Authority to the SCC-WMD 
Director for synchronized planning of DOD-wide CWMD efforts in support 
of STRATCOM UCP missions. The major functions performed by the SCC-WMD 
are planning synchronization across geographic boundaries; 
identification and assessment of CWMD capability requirements; and 
promoting a unified approach across the U.S. Government.
    On 3 February 2012, at the STRATCOM-sponsored biannual CWMD Global 
Synchronization Conference, a new CWMD mission component, the Standing 
Joint Force Headquarters for Elimination (SJFHQ-E) was activated to 
provide a needed enabling capability to eliminate WMD in hostile and 
uncertain environments. Appreciation for the need for such an 
organization was an outgrowth of our experiences in Iraq beginning in 
2003, and the requirement was established in the 2006 and 2010 DOD 
Quadrennial Defense Reviews. This new headquarters will be a full-time, 
fully trained, scalable, deployable, joint command and control element 
able to quickly integrate into an operational headquarters such as a 
GCC or Joint Task Force (JTF) headquarters. As the core of a JTF-E HQ, 
the SJFHQ-E, appropriately augmented, will enable command and control 
of the fielded WMD elimination forces attached to the JTF. Initial 
operational capability is planned for January 2013 with full 
operational capability to be achieved by the end of that year. The 
SJFHQ-E will be co-located with DTRA and the SCC-WMD at Fort Belvoir, 
VA. The SCC-WMD Deputy Director, Air Force Major General Eric Crabtree, 
will be dual hatted as the Commander of the SJFHQ-E. Major General 
Crabtree will report to General Kehler in his role as SFJHQ-E 
Commander, and he will continue report to me in his role as the SCC-WMD 
Deputy Director.
    Together, DTRA, the SCC-WMD, and the SJFHQ-E will provide a more 
capable DOD CWMD team that is better integrated within overall U.S. 
Government CWMD community. They will leverage and maximize skills, 
expertise, capabilities, and resources across all, and think and act as 
an integrated CWMD team.

                            NONPROLIFERATION

    DTRA and SCC-WMD perform several major nonproliferation programs 
and activities.
Nunn-Lugar Cooperative Threat Reduction Program
    The Nunn-Lugar Cooperative Threat Reduction Program's overarching 
mission is to partner with willing countries to reduce the threat from 
WMD and related materials, technologies, and expertise. The program 
focuses on eliminating, securing, or consolidating WMD, related 
materials, and associated delivery systems and infrastructure, at their 
source in partner countries. It also builds partnership capacity to 
prevent the proliferation of WMD materials across borders.
    Since its enactment into law in the National Defense Authorization 
Act for Fiscal Year 1993, the Nunn-Lugar program has proven highly 
effective. It enabled the elimination of nuclear weapons from Belarus, 
Kazakhstan, and Ukraine, ensuring that Russia would be the only 
nuclear-armed successor state to the Soviet Union. As of 29 February 
2012, the assistance provided through this program has deactivated 
7,619 nuclear warheads; destroyed 793 Intercontinental Ballistic 
Missiles (ICBM), 191 ICBM mobile launchers, 906 air-launched cruise 
missiles, and 33 nuclear-powered submarine-launched ballistic missile 
(SLBM) submarines (SSBNs); eliminated 498 ICBM silos, 155 bombers, 492 
SLBM launchers, and 680 SLBMs; sealed 194 nuclear test tunnels and 
holes; destroyed 2,803.5 metric tons of declared Chemical Weapon 
agents; safely and securely transported 562 nuclear weapons train 
shipments; upgraded 24 nuclear weapons storage sites; and built and 
equipped 38 Biological Threat Reduction Zonal Diagnostic Laboratories.
    Although Nunn-Lugar activities in Russia continue, the program is 
evolving in accordance with the National Defense Authorization Act for 
Fiscal Year 2008 to address emerging security challenges and urgent 
threats in regions of the world beyond the Former Soviet Union (FSU). 
Today, the Nunn-Lugar CTR Program supports a layered defense approach 
to countering WMD threats, builds strategic relationships with key 
international partners that enhance threat reduction on a global scale; 
and support the resilience of the global nonproliferation framework by 
building partnership capacities to enforce the tenants of that 
framework. The program is expanding its activities beyond the FSU, and 
promoting cooperative biological engagement, security, and early 
warning in East Africa and South Asia, and is currently authorized to 
operate in Russia, Ukraine, Armenia, Azerbaijan, Georgia, Uzbekistan, 
Afghanistan, China, India, Pakistan, Iraq, Djibouti, Kenya, Tanzania, 
Uganda, Burundi, and Rwanda.
    Strategic Offensive Arms Elimination
    Projects in Russia include ICBM (SS-25, SS-18, and SS-19) and SS-N-
18 SLBM elimination; SS-18 and SS-19 silo and launch control center 
elimination; and dismantlement of nuclear reactor core and missile 
launcher sections of Delta III-class and Typhoon-class SSBNs. 
Additionally, this project assists Ukraine with the storage and 
elimination of rocket motors from dismantled SS-24 ICBMs.
    Chemical Weapons Destruction
    Russia, as a state party to the Chemical Weapons Convention (CWC), 
is obligated to eliminate its stockpile of over 40,000 metric tons of 
chemical weapons (CW). The United States, Russia, and other 
international partners funded construction of the Shchuch'ye Chemical 
Weapons Destruction Facility (CWDF). Russia began CW destruction 
operations at this facility in March 2009. DOD continues to provide 
technical support to this effort through the Nunn-Lugar Program. As of 
31 December 2011, 2,601.8 metric tons of CW agents have been destroyed. 
Russia also is constructing with its funds a similar CWDF at Kizner, 
with a completion date in late 2012. The DOD has agreed to provide the 
Kizner CWDF with technical support similar to that provided at 
Shchuch'ye.
    Global Nuclear Security
    This project provides assistance for the improved security of 
Russian nuclear weapons and at-risk material rail shipments and 
storage. It also helps establish Centers of Excellence with partner 
countries to enhance training capability, consistent with international 
best practices, for nuclear security, material control, and inventory 
management. This effort is closely coordinated with other related U.S. 
Government activities and international governmental and non-
governmental organizations. Through an unprecedented partnership with 
Russia and Kazakhstan hundreds of kilograms of weapons-usable nuclear 
material was secured at the former Soviet Semipalatinsk Test Site in 
Kazakhstan.
    Cooperative Biological Engagement
    This project implements the National Security Staff directed policy 
priorities for countering biological threats. Cooperative Biological 
Engagement (CBE) is the largest effort within the Nunn-Lugar CTR 
program and involves a growing number of international partner states 
across Europe, Asia, and Africa. It responds to the threat of state and 
non-state actors acquiring biological materials and expertise that 
could be used to develop or deploy a biological weapon. The program 
destroys or secures Especially Dangerous Pathogens (EDPs) at their 
source, builds partner capacity to sustain a safe, secure, disease 
surveillance system to detect, diagnose, and report EDP breakouts, and 
to work collaboratively with partner country scientists in engagements 
that support the ethical application of biotechnology to a better 
understanding of endemic EDPs and their control and prevention. The CBE 
leverages the expertise, capabilities, and international access of 
other U.S. Government departments and agencies, international partners, 
and the private sector, and provides tailored approaches that 
recognize, build upon, and enhance regional and partner countries' 
indigenous capacities. For relatively small investments, this program 
delivers a high return by improving biological safety and security; 
improving disease surveillance, detection, diagnosis, reporting, and 
response capabilities; and increasing cooperative biological research 
and engagement.
    Proliferation Prevention
    This project enhances the capability of non-Russian FSU states and 
other partner countries to deter, detect, report, and interdict illicit 
trafficking of WMD and related materials across international borders. 
It is coordinated with the DOD International Counterproliferation 
Program and other U.S. Government border security programs, and 
furthers interagency collaborations that contribute to a holistic 
approach to export control, border security, and law enforcement-
related capacity building efforts.
    Threat Reduction Engagement
    This project funds relationship building engagements intended to 
advance the Nunn-Lugar CTR mission. Specific activities include non-
proliferation and counterproliferation symposia or workshops; bilateral 
or regional CTR-related symposia; high-level exchanges or planning 
activities; and tabletop exercises. Although historically focused on 
engagement with foreign military organizations, engagement is 
increasing with foreign civilian organizations and entities, primarily 
for supporting CBE and improving border security.

Arms Control
    DTRA performs several critical arms control mission 
responsibilities related to on-site inspections and monitoring. Onsite 
inspection is not the sole mechanism for verification, but one part of 
a system of complementary reinforcing measures that include National 
Technical Means (NTM) of verification; periodically exchanged data on 
weapon systems and facilities; regular notifications updating this 
data; on-site inspections; and a compliance and implementation body.
    Onsite inspection was a key component of the verification 
frameworks of the Intermediate-Range Nuclear Forces Treaty (INF), and 
the Strategic Arms Reduction Treaty (START), and now, remains a key 
component of the New START Treaty. Such inspections provide eyes-on 
evaluation of the facilities and systems to confirm that what has been 
reported in data exchanges are actually what exists at individual 
sites; access and perspective not achievable through data exchange and 
NTM alone; and a deterrent to misreporting data or cheating by 
including a short-notice inspection regime that each side knows 
provides the other to spot-check declarations and discover 
discrepancies between what has been reported and facts on the ground. 
Although DTRA inspectors provide the eyes on site, DTRA does not make 
verification or compliance judgments. Our inspectors observe, document, 
and report the factual findings of inspection activities to the U.S. 
Government interagency policy community, who uses that information to 
determine treaty compliance.
    Additionally, DTRA is responsible for coordinating and conducting 
the escort of foreign inspection teams for inspections or continuous 
monitoring activities in the United States and at U.S. facilities 
overseas.
    Because DTRA has extensive experience with onsite inspections and 
monitoring under the INF Treaty and the START treaty, U.S. policymakers 
and treaty negotiators concerned with the development, implementation, 
or evaluation of compliance with arms control treaty provisions 
consistently call on the agency's technical and operational experience. 
The DTRA team supporting the U.S. delegation at the New START 
negotiations in Geneva provided years of arms control implementation 
expertise and negotiating experience, linguistic ability, and 
administrative support to the delegation as a whole and to the chief 
negotiator, Ms. Rose Gottemoeller, the acting Under Secretary of State 
for Arms Control and International Security, and the assistant 
Secretary of State for Arms Control, Verification, and Compliance. DTRA 
personnel fulfilled key roles in the negotiating working groups on 
Inspection Activities, Conversion and Elimination, and Treaty Articles 
and Definitions, and played a critical part in the development of those 
portions of the new treaty. DTRA military linguists augmented the 
language support staff at the U.S. Mission, providing much-needed help 
in translating the large number of negotiating documents, and were 
frequently called on to interpret for high profile or technically 
oriented meetings due to their exceptional language abilities and 
precise knowledge of arms control terms. In addition, DTRA personnel 
continue to support the Bilateral Consultative Commission in Geneva as 
discussions are undertaken to fine tune the implementation process.
    The agency spent a full year prior to New START entry into force 
preparing itself, as well as U.S. facilities subject to inspection, for 
treaty implementation. This effort involved comprehensive internal 
training sessions which utilized experienced personnel from both the 
INF and START Treaties to adapt over 20 years of onsite inspection 
experience into the DTRA implementation plan for New START. DTRA 
conducted mock inspections or staff assistance visits at each major 
U.S. facility subject to inspection to ensure a smooth implementation 
process once New START entered into force.
    During the New START Treaty's first year in force, DTRA conducted 
the full annual quota of 18 inspection missions in the Russian 
Federation and provided escort functions for 18 Russian inspections 
conducted in the United States. DTRA inspectors also participated in 
one exhibition of a Russian ICBM and two exhibitions of U.S. heavy 
bombers.
    In all, DTRA performed 276 arms control treaty and agreement 
related missions in fiscal year 2011; is planning to conduct 320 such 
missions in fiscal year 2012; and anticipates performing 340 in fiscal 
year 2013.
    The agency also acquires and fields technology capabilities 
required to implement, comply with, and allow full exercise of U.S. 
rights and prerogatives under existing arms control treaties and 
agreements, and in support of the administration's arms control goals. 
Despite the technology available, to date the equipment used for onsite 
inspections remains low-tech. Current equipment includes tape measures, 
#2 pencils, small notepads, and reference photos to determine the type 
of item being inspected. Limited use of radiation detection equipment 
during the New START treaty inspections is allowed only to prove that 
an object is non-nuclear. The counting of deployed warheads is limited 
to counting covered objects declared to be warheads and placed on a 
deployed missile or bomber. There are no photographic confirmation, 
measurement, or radiation detection equipment provisions for the 
nuclear weapons. Future onsite inspection equipment must be 
manportable, robust, and easy to use. Such equipment must be well 
understood by all parties, but will likely need to be as minimally 
invasive as possible. This could require joint development or 
certification and/or use by a neutral international body. Reliable and 
trusted procedures still will be needed to allow parties to 
authenticate and functionally check the equipment prior to use.

International Counterproliferation Program
    The DOD is the lead agency for, and partnered with the Federal 
Bureau of Investigation and DHS, on the International 
Counterproliferation (ICP) Program, a program that is the primary tool 
for the COCOMs to apply in their theater security cooperation strategy 
to combat trafficking of WMD and related materials. The program 
provides specialized training designed for foreign officials involved 
with border security, customs, and law enforcement. Some training 
courses include critical equipment packages to enhance the capacity of 
partner countries to deter, detect, investigate, and respond to the 
attempted proliferation of WMD. Training is sustained with periodic 
local and regional WMD Integrated Exercises which enable students to 
use program skills and equipment within a realistic training 
environment. ICP program partners span the Baltic States, the Caucuses, 
Eastern Europe, the Balkans, and Central Asia. In September 2011, the 
Secretary of Defense approved ICP program engagement with new partners 
in South Asia, Southeast Asia, and Africa (excluding Egypt). 
Additionally, the ICP is incorporating cost-saving efficiency measures 
such as shifting from bilateral to regional engagement, combining 
events into single missions, and reducing the cost of equipment 
provided by the program.

Proliferation Security Initiative
    DTRA and the SCC-WMD support GCC and U.S. Government participation 
in international cooperative activities under the Proliferation 
Security Initiative (PSI), an international effort by 98 countries to 
stop trafficking of WMD, their delivery systems, and related materials 
to and from states and non-state actors of proliferation concern. These 
activities have been centered upon cooperative maritime interdiction of 
illicit WMD trafficking. The SCC-WMD operates the PSI Support Cell with 
DTRA assistance to increase COCOM staff and partner nations' 
understanding of and support for the PSI by providing subject matter 
expertise during exercise and activity planning and execution.

Small Arms and Light Weapons
    DTRA supports nonproliferation efforts to assess, reduce, and 
secure stockpiles of Small Arms and Light Weapons (SALW) worldwide by 
supporting the DOS Office of Weapons Removal and Abatement. This 
program helps foreign governments ensure that Manportable Air Defense 
Systems, small arms and light weapons, conventional ammunition, and 
other ordnance are properly secured, and managed, and that excess 
stockpiles are destroyed. DTRA SALW teams perform assessments, provide 
technical advice, and share U.S. best practices through training and 
seminars.

Regional Security Engagement Program
    Through the Regional Security Engagement (RSE) Program, DTRA 
creates regional networks with shared understanding and approaches to 
countering WMD threats that implement common counterproliferation goals 
by leveraging existing resources. This program supports the development 
of a shared regional threat picture; the development and use of common 
methods for risk analysis and targeting; the development of a common 
indicator and warning methodology; the identification of regional gaps/
overlaps of CWMD capabilities; and the reinforcement of existing 
information-sharing mechanisms. Additionally, the program integrates 
partner states into the global counterproliferation community while 
supporting COCOM CWMD theater campaign plans. Pilot events were held in 
December 2010 and April 2011. Four events are planned for 2012 and 
eventually six suited to COCOM needs on an annual basis

Planning and Plans Coordination
    The DTRA/SCC-WMD contribution to nonproliferation includes a wide 
range of plans and planning development support, coordination, and 
synchronization across DOD and with other U.S. Government 
organizations. For example, planning synchronization across geographic 
boundaries is achieved through STRATCOM's biannual Global 
Synchronization Conferences and regional CWMD campaign plans, among 
other means.

            COUNTERPROLIFERATION AND CONSEQUENCE MANAGEMENT

    Nonproliferation is only part of the larger DTRA/SCC-WMD effort and 
we also perform counterproliferation and consequence management 
activities. Our counterproliferation programs deter and defeat WMD use 
and we are providing capabilities for some of the most challenging CWMD 
mission needs including:

         Capabilities to detect, track, and interdict WMD in 
        hostile and uncertain environments at great distances from our 
        homeland;
         Sensors, novel energetic materials and weapon design 
        technologies, and operational concepts to hold at risk WMD and 
        WMD-related facilities, including those deeply underground; and 
        the
         Protection of people, systems, and infrastructure from 
        WMD effects.

    Over the past year, we have made significant achievements in the 
areas of counterproliferation and consequence management:

         Assisted activation of the STRATCOM SJFHQ-E to support 
        the elimination of WMD in hostile and uncertain environments.
         Responded to 1,695 requests in fiscal year 2011 for 
        Reach Back support from a wide-range of DOD and other U.S. 
        Government customers with the top five customers being U.S. 
        Pacific Command (PACOM), U.S. Africa Command, STRATCOM, the 
        National Guard, and the Navy.
         Conducted 17 surety inspections of nuclear capable 
        units in fiscal year 2011; a similar number are planned for the 
        current fiscal year; and 18 are planned for fiscal year 2013.
         Provided continuous high-level nuclear policy support 
        analysis for a wide range of senior-level DOD and other U.S. 
        Government organizations and oversight committees in sustaining 
        and modernizing the nuclear deterrent force and countering the 
        nuclear threat.
         Conducted 30 nuclear weapons accident and incident 
        exercises and seminars in fiscal year 2011; planning to conduct 
        a similar number in fiscal year 2012; and anticipate performing 
        29 in fiscal year 2013.
         Conducted 39 consequence management exercises and 
        seminars in fiscal year 2011; planning to conduct 40 in fiscal 
        year 2012; and anticipate performing 40 in fiscal year 2013.
         Initiated the Consequence Management Assessment 
        Program (CMAP) in fiscal year 2012 to assist the COCOMs in 
        building consequence management capacity in select partner 
        states by increasing the tactical training and operational 
        capabilities of partner nations to effectively respond to WMD 
        incidents, supporting COCOM requirements to aid partner nations 
        to effectively respond to WMD, and building partnership 
        capacity to prevent WMD proliferation. Under this program, DTRA 
        and U.S. Central Command are conducting planning and training 
        events in Bahrain, Jordan, and the United Arab Emirates 
        throughout this fiscal year. Additionally, DTRA is working with 
        PACOM to expand CMAP activities into its area of responsibility 
        beginning in fiscal year 2013. Nine CMAP events will take place 
        in fiscal year 2012 and 24 are anticipated in fiscal year 2013.
         Conducted 88 vulnerability, survivability, and Red 
        Team assessments and training events in fiscal year 2011. This 
        number will grow to 101 in fiscal year 2012 and 106 in fiscal 
        year 2013.
         Supported Operations Odyssey Dawn/Unified Protector 
        and Tomadachi concurrently in fiscal year 2011 and will 
        maintain a focus on potential WMD events in the Middle East and 
        Asia.
         Continued to support Air Force testing of the Massive 
        Ordnance Penetrator in support of fielding in fiscal year 2012.
         Demonstrated optimized dual and multiple delivery of 
        hardened target defeat capabilities.
         Continued to support Bio-Response Testing and 
        Evaluation with DOD, Environmental Protection Agency, DHS, CDC, 
        and FBI partners.

                        NUCLEAR SUPPORT MISSION

    DTRA also performs essential support functions for sustaining and 
safe, secure, and effective U.S. nuclear deterrent. These include 
providing targeting support to STRATCOM; management of the nuclear 
stockpile accounting and tracking system; independent Nuclear Safety 
and Security Inspections for the Secretary of Defense and Chairman, 
Joint Chiefs of Staff; development of technologies and operational 
concepts for protecting our nuclear weapons and conducting tests of 
nuclear security policies; nuclear weapons familiarization training; 
and maintenance and logistical assistance.

             FISCAL YEAR 2013 DTRA BUDGET REQUEST OVERVIEW

    The DTRA budget request for fiscal year 2013 is $1.474 billion as 
follows: $443.382 million in Operations and Maintenance (O&M), Defense-
wide funding; $13.146 million in Procurement, Defense-wide funding; 
$498.194 million in Research, Development, Test, and Evaluation 
(RDT&E), Defense-wide funding; and $519.111 million for the Nunn-Lugar 
CTR program. I also urge your support for the $511.6 million requested 
for the DOD Chemical and Biological Defense Science and Technology 
(CBDP S&T) Program, which DTRA executes. Details and highlights for 
these requests follow.

Operations and Maintenance Funding
    Nearly 60 percent of DTRA O&M funding directly supports warfighters 
and national missions as it pays for planning, training, exercises, 
conferences, and other means for collaboration across DOD and the U.S. 
Government, and with international partners. Consistent with OSD 
direction, we have taken steps to reduce O&M funding for Temporary Duty 
(TDY); however, the nature of the CWMD mission necessitates a 
relatively high level of TDY funding for efficient and effective 
support to the Combatant Commanders including augmentation of their 
limited on-site expertise, the conduct of arms control treaty 
inspection and escort missions, the building of partnership capability 
with our allies and friends around the globe, the operation of the 
Defense Nuclear Weapons School that provides CWMD and nuclear mission 
training, and the performance of safety and security inspections and 
assessments of our nuclear deterrent. O&M funding is the fuel that 
enables us to reach out to our components and personnel, the 
warfighters, and international partners across the globe. Reductions to 
our O&M request would necessitate cutbacks in essential support that we 
uniquely provide.
    The requested O&M funding would be applied as follows:

         Nonproliferation Activities ($71.718 million) for arms 
        control activities including the conduct of U.S. Government 
        inspections of foreign facilities, territories, or events; 
        coordination and conduct of the escort of inspection teams for 
        inspections or continuous monitoring activities in the United 
        States and at U.S. facilities overseas; and the acquisition and 
        fielding of technology capabilities required to implement, 
        comply with, and allow full exercise of U.S. rights and 
        prerogatives under existing and projected arms control treaties 
        and agreements. Treaties, agreements, and other 
        nonproliferation programs to be supported by this funding 
        include: New START, CFE, CWC, OS, ICP, CFE Adapted, Plutonium 
        PPRA, SALW, International Atomic Energy Agency (IAEA) 
        Additional Protocol, DTIRP, and the RSE Program.
         WMD Combat Support and Operations ($174.332 million) 
        for a wide range of combat and warfighter support to the Joint 
        Chiefs of Staff, the COCOMS, and military forces as they engage 
        the WMD threat and challenges posed to the United States, its 
        forces and allies. DTRA supports the essential WMD response 
        capabilities, functions, activities, and tasks necessary to 
        sustain all elements of operating forces within their area of 
        responsibility at all levels of war. DTRA supports OSD 
        oversight of DOD nuclear matters by performing stockpile 
        tracking; conducting nuclear surety inspections; and providing 
        advice and support for maintenance, safety, Joint Nuclear 
        Weapon Publications, logistics, policy, planning, training, and 
        exercises. The agency provides the Combatant Commanders with 
        deployable Technical Support Groups that support and assist 
        COCOM designated search forces. This budget also funds DTRA's 
        24 hour/7 day Technical Reach Back and Operations Center 
        capability. Technical Reach Back is provided by a core group of 
        specialized CBRNE trained subject matter experts that provide 
        decision-response and support capability for deliberate, 
        crisis, and immediate planning and operations to first 
        responders, National Guard WMD Civil Support Teams, COCOMs, 
        OSD, the Joint Staff, the Intelligence Community, command 
        elements, and Federal, state, and local government 
        organizations. Most of these requests require modeling a 
        variety of operational and exercise scenarios related to WMD. 
        Additionally, DTRA serves as the Program Manager for the 
        Foreign Consequence Management (FCM) Exercise program that 
        creates a series of exercises that prepare Geographic Combatant 
        Commanders (GCCs) to respond to foreign WMD attacks or the 
        accidental release of radiological or toxic materials. This 
        request also funds the supporting CMAP. The Balanced 
        Survivability Assessment Program conducts mission vulnerability 
        and continuity assessments of critical and vital U.S. and 
        allied national/theater mission systems, networks, 
        architectures, infrastructure, and assets; our Red Team 
        provides a unique assessment capability simulating an 
        independent, multidisciplinary adversary and performs all 
        assessments from an adversarial perspective emulating threats 
        ranging from well-funded terrorist organizations to foreign 
        intelligence services; and the Joint Staff Integrated 
        Vulnerability Assessments advise the Services, COCOMs, and DOD 
        agencies on facility vulnerability to terrorist operations and 
        the means of reducing mass casualties and damage to mission-
        essential materials. The Defense Threat Reduction University 
        (DTRU), located on Kirtland Air Force Base, NM, is composed of 
        the Defense Nuclear Weapons School (DNWS), the Defense Threat 
        Reduction Information Analysis Center (DTRIAC), and the 
        Publications and Strategic Studies Branch. DNWS is the only DOD 
        school for courses that familiarize the U.S. nuclear community 
        with the national nuclear weapons stockpile and the nuclear 
        weapons program and also provides training on nuclear and 
        radiological incident command and control, incident response, 
        and WMD effects modeling for DOD, Federal, State, and local 
        agencies. The DTRIAC is the key DOD source of information and 
        analysis on nuclear weapons effects. Its information collection 
        has over three million records; over two million still photos; 
        and over ten million feet of video. If not preserved, these 
        important items will be lost forever due to treaty-based 
        restrictions on nuclear testing. The Publications and Strategic 
        Studies Branch is DTRA's focal point for review and updates to 
        Joint Doctrine, publication of Lessons Learned, and 
        implementation of the Joint Training Systems through the annual 
        publication of the Joint Training Plan.
         U.S. Strategic Command Center for Combating WMD 
        ($12.389 million) for DTRA direct support to the SCC-WMD 
        including development of tools; providing strategic and 
        contingency planning, policy, and analytical support; 
        developing interagency relationships; and working closely with 
        STRATCOM partners to establish the means for assessing and 
        exercising capabilities to combat WMD. DTRA's efforts focus on 
        enhancing global WMD situational awareness and providing for 
        the development and maintenance of a worldwide common operating 
        picture. The agency also provides access and connectivity to 
        CWMD expertise critical for strategic and contingency planning, 
        facilitates the integration of DTRA-unique capabilities, and 
        provides situational awareness for integrating and 
        synchronizing efforts across DOD to support national CWMD 
        objectives. What appears to be a considerable reduction in this 
        year's request from the $25.253 million authorized and 
        appropriated by Congress for fiscal year 2012 actually is a 
        realignment of $9.970 million for Technical Reach Back and 
        Operations Center mission execution to the Combat Support and 
        Operations sub-activity group, and the realignment of $3.363 
        million for Agency Strategic Planning activities to the Core 
        Mission Sustainment sub-activity group. These realignments do 
        not change the level of support DTRA historically has provided 
        to the SCC-WMD.
         Core Mission Sustainment ($184.943 million) for a wide 
        range of enabling capabilities which provide the necessary 
        resources to support all DTRA mission essential functions. The 
        requested amount provides for the management of a total mission 
        portfolio that exceeds $3 billion. Activities specifically 
        funded by this account include information management; resource 
        management; security and asset protection; acquisition and 
        logistics management; strategic planning; strategic workforce 
        planning; hiring and retention incentives; leadership and 
        professional development; and providing the safety, security, 
        and efficiency necessary for mission success. In recent years, 
        DTRA has increased investment in its Information Technology 
        systems to provide secure and dependable connectivity for 
        global mission execution.

Nunn-Lugar Cooperative Threat Reduction
    The request of $519.111 million for this important program would be 
used as follows:

         Strategic Offensive Arms Elimination ($68.271 million) 
        for elimination of Strategic Offensive Arms in Russia and the 
        storage and elimination in Ukraine of rocket motors from 
        dismantled SS-24 ICBMs. Specifically in Russia, the funding 
        would eliminate 4 SS-18, 11 SS-19, and 24 SS-25 ICBMs; 
        eliminate 15 SS-18 silo launchers and launch control centers; 
        dismantle and eliminate 11 SS-19 silo launchers and launch 
        control centers; eliminate 27 SS-25 road-mobile launchers; 
        eliminate 4 SS-N-18 SLBMs; dismantle nuclear reactor cores and 
        launcher sections of one DELTA III-class SSBN and eliminate 16 
        SLBM launchers; and continue dismantlement of nuclear reactor 
        cores and launcher sections of one Typhoon-class SSBN and 
        eliminate 20 SLBM launchers.
         Chemical Weapons Destruction ($14.630 million) for 
        technical support to the Russian chemical weapons destruction 
        operations at the Shchuch'ye CWDF and, as recently decided by 
        OSD, the Kizner CWDF.
         Global Nuclear Security ($99.789 million) for 
        improving Russian capacity to sustain 18 nuclear weapons 
        storage sites, and the sustainment of 5 rail transfer points 
        and 2 regional security training centers; transportation of 
        approximately 48 trainloads of deactivated nuclear warheads 
        (1,000 to 1,500) from deployed locations to enhanced security 
        storage sites or dismantlement and from storage to 
        dismantlement facilities; continued support for Nuclear 
        Security Centers of Excellence; and assistance with future 
        shipments of Spent Nuclear Fuel that meet the IAEA criteria.
         Cooperative Biological Engagement ($276.399 million) 
        to initiate biological engagement in Burundi, Rwanda, and other 
        African regional partners and begin a regional engagement in SE 
        Asia; continue cooperative research efforts in Cooperative 
        Biological Engagement (CBE)-engaged countries; continue to 
        implement the Electronic Integrated Disease Surveillance System 
        in CBE-engaged countries; continue construction and equipment 
        installation of Secured Pathogen Repositories in Kazakhstan and 
        in other partner states; continue Cooperative Biological 
        Research projects in Afghanistan, Africa, Armenia, Azerbaijan, 
        Georgia, Kazakhstan, Pakistan, Ukraine, and other CBE-engaged 
        countries as valuable projects are approved; continue to 
        provide training in laboratory diagnostics techniques, 
        epidemiology, clinical sample collection, outbreak 
        surveillance, laboratory and health system management, and 
        biosafety, biosecurity, and bioethics in CBE-engaged countries; 
        continue the sustainment of 42 diagnostic labs in Azerbaijan, 
        Georgia, Kazakhstan, Ukraine, and Uzbekistan; continue 
        construction for a National Public Health Laboratory in 
        Afghanistan; continue construction of a Veterinary Central 
        Diagnostic Facility in Ukraine; complete construction and 
        equipment installation for Secured Pathogen Repositories in 
        Azerbaijan and Ukraine (Azerbaijan is funding the cost of its 
        construction); complete the Biological Medical Research Center 
        in Pakistan; complete 11 diagnostic labs in Kenya, Uganda, 
        Ukraine, and other countries to fill gaps in analytical bio 
        surveillance capacity; complete biorisk assessments in select 
        areas of Asia and Africa; and continue to provide for bio-
        related conference support.
         Proliferation Prevention ($32.402 million) to enhance 
        the capability of non-Russian FSU states and other partner 
        countries to deter, detect, report, and interdict illicit WMD 
        trafficking across international borders. In Armenia, these 
        funds would continue to increase WMD command and control, 
        communications, surveillance, detection, and interdiction 
        capabilities along the Georgia border; continue project 
        assessments and support efforts to upgrade international and 
        state ports of entry and inland clearing stations. In Moldova, 
        these funds would continue to increase WMD command and control, 
        communications, surveillance, detection, and interdiction 
        capabilities along the Ukraine border; continue project 
        assessments and support efforts to upgrade international and 
        state ports of entry and inland clearing stations. In Southeast 
        Asia, these funds would continue to increase WMD command and 
        control, communications, surveillance, detection, and 
        interdiction capabilities, and sustainment in initial 
        countries, and begin implementation in additional countries 
        along the Strait of Malacca and in other regional waters and on 
        land borders.
         Threat Reduction Engagement ($2.375 million) to 
        conduct engagements with the FSU states and in new geographic 
        areas to support program expansions.
         Other Assessments/Administrative Support ($25.245 
        million) to ensure that DOD-provided equipment, services, and 
        related training are fully accounted for and used effectively 
        and efficiently for their intended purposes; provide for Nunn-
        Lugar CTR program travel, translator/interpreter support, and 
        other agency support to include support to program personnel 
        assigned to U.S. Embassy offices in partner states.

    Reductions to the fiscal year 2013 request would result in missed 
opportunities to build international partnerships and partner 
capabilities, protect extremely dangerous pathogen collections from 
potential terrorist threats, and eliminate WMD and WMD-related 
materials that could fall into the hands of terrorists or states 
potentially hostile to the United States.

Research, Development, Test, and Evaluation
    On 26 January 2012, in his press briefing on the DOD fiscal year 
2013 budget request, Secretary Panetta stated: ``And lastly, with 
regards to key investments in technology and new capabilities, we have 
to retain a decisive technological edge. We have to retain the kind of 
leverage the lessons of recent conflicts have given us. And we need to 
stay ahead of the most lethal and disruptive threats that we're going 
to face in the future.'' Consistent with this decision, DTRA RDT&E 
programs respond to the most pressing CWMD challenges including stand-
off detection, tracking, and interdiction of WMD; modeling and 
simulation to support weapons effects and hazard predictions; 
classified support to Special Operations Forces; defeat of WMD agents 
and underground facilities; and protection of people, systems, and 
infrastructure against WMD effects.
    DTRA RDT&E is unique in being focused solely on CBRNE; tied closely 
with the agency's Combat Support responsibilities; has a top-notch in-
house field test capability; relies upon competitive bids, the national 
labs, industry, and academia rather than an in-house laboratory 
infrastructure, allowing for a ``best of breed'' approach to performer 
selection; and is nimble and responsive to urgent needs.
    The agency has a comprehensive, balanced CBRNE S&T portfolio that 
supports DOD goals and is well connected with DOD customers, as well as 
interagency and international partners. Our RDT&E approach balances the 
need for near-term pay-off with the need for long-term knowledge and 
expertise. The requested RDT&E funding includes $45.071 million in 
Basic Research to provide for the discovery and development of 
fundamental knowledge and understanding by researchers primarily in 
academia and world-class research institutes in government and 
industry. This program leverages DOD's $2 billion annual investment in 
basic research by ensuring a motivation within the scientific community 
to conduct research benefiting WMD-related defense missions and by 
improving DTRA knowledge of other research efforts of potential 
benefit.
    The DTRA fiscal year 2013 request also includes $172.352 million 
for WMD Defeat Technologies Applied Research, $275.022 million for 
Proliferation Prevention and Defeat Advanced Research, and $5.749 for 
WMD Defeat Capabilities System Development and Demonstration.
    Multiple projects span these program elements:

         The Fundamental Research Project is the ``transition 
        enabler'' that bridges the gap between basic research and 
        technology development. Examples of work being done under this 
        project include developing nuclear materials detection 
        capabilities with the potential for pre-detonation nuclear 
        weapon detection systems, and a new carbon-based transistor 
        with the potential for becoming the basis for next generation 
        radiation-hardened electronics and for space sensors.
         The Detection Technology Project includes nuclear and 
        radiological detection; post-nuclear detonation forensics; and 
        treaty verification related S&T development. Protective and 
        targeting planning tools, and WMD Intelligence, Surveillance, 
        and Reconnaissance S&T development is conducted under the WMD 
        Battle Management Project.
         The Advanced Energetics and Counter WMD Weapons 
        Project develops novel energetic materials and weapon design 
        technology for rapid, directed, and enhanced (non-nuclear) 
        energy release providing new capability to defeat difficult WMD 
        and hardened and deeply buried targets. It also covers the 
        systematic identification and maturation of advanced 
        technologies for combating WMD with specialized hardened target 
        defeat expertise; developing innovative kinetic and non-kinetic 
        weapon capabilities for the physical or functional defeat of 
        WMD structures; and minimization of collateral effects from 
        incidental release of WMD agents.
         The Systems Engineering and Innovation Project 
        develops improved high performance computing methods and tools 
        for 24/7, near-real time CBRNE decision support; develops and 
        integrates individual-based social networks and realistic 
        behavioral models with infrastructure such as power and 
        transportation grids; and demonstrates capabilities to model 
        selected secondary and tertiary effects and course of action 
        impacts for CWMD scenarios.
         The Nuclear and Radiological Effects Project provides 
        nuclear weapons effects subject matter expertise, model/code 
        development, and analysis. Under this project, DTRA is 
        reversing the decline in nuclear weapons effects and system 
        hardening that occurred in the decades following the end of the 
        Cold War, but with focus on 21st century threats. For example, 
        we are supporting the standup of a Nuclear Weapons Effects 
        Network across DOD, NNSA, and the United Kingdom, and are 
        delivering three-dimensional models of nuclear fallout to the 
        U.S. Army Nuclear and Chemical Agency, STRATCOM, and DHS for 
        better predictions of fallout from ground or low altitude 
        detonations and improved prediction of nuclear weapon urban 
        environment effects. This project also is integrating 
        conventional, unconventional, and nuclear software planning 
        tools within a net-centric framework that provides simplified 
        near real-time access for customer use of DTRA expert support 
        and CBRNE tools in classified and unclassified environments, 
        and meets user requirements at the state/local, national, and 
        international levels.
         The Target Assessment Project supports targeting and 
        Intelligence Community technology analytical needs. Efforts 
        underway include providing geotechnical, structural and 
        functional analysis in a time-dependent, 3-dimensional model to 
        defeat WMD targets in underground facilities; creating a 
        software tool that integrates buildings, bunkers and tunnels 
        into a common operating picture for functional vulnerability 
        and defeat analysis of WMD targets; and developing modeling and 
        simulation capability for a network of WMD target systems 
        analysis. In collaboration with the Defense Intelligence Agency 
        (DIA) and DOE National Labs, it also provides technology for 
        the DTRA/DIA Counter WMD Analysis Cell, integrating engineering 
        insights and operational expertise for exploitation of 
        vulnerabilities to counter WMD targets and developing 
        capability to perform strategic level technical analysis of 
        adversary WMD programs.
         The Nuclear Survivability Project develops radiation-
        hardened microelectronics and nanotechnology to keep pace with 
        commercial technology advances; applies trusted U.S. commercial 
        design and foundry capabilities to achieve capability for =45 
        nanometer radiation hardened microelectronics; develops and 
        demonstrates technology to support hardening of 
        microelectronics and photonics to meet DOD's missile and space 
        requirements; provides for High Altitude Electromagnetic Pulse 
        (EMP) protection, operational vulnerability assessments, 
        technical assistance to Service Acquisition Special Projects 
        Officers, defense agencies, and COCOMs; and provides expert 
        advice on System EMP Certification for STRATCOM and DOD CBRN 
        Survivability Implementation. In addition, this project 
        supports nuclear surety programs through field-able nuclear and 
        non-nuclear physical security equipment for the Services and 
        interagency partners; provides for Force-on-Force tests and 
        evaluation of DOD, Service, and COCOM nuclear weapons security 
        policies and capabilities; evaluates nuclear security policy 
        for waterfront restricted areas; and conducts engineering 
        studies and out-of-cycle tests focused on specific portions of 
        the nuclear environments.
         The Test Infrastructure Project provides a unique 
        national test bed for simulated WMD facility characterization, 
        weapon/target interaction, and WMD facility defeat testing; 
        provides test articles, construction, tunnel operation, data 
        acquisition systems, test optics, and data analysis for the Air 
        Force's Massive Ordnance Penetrator; and provides the test 
        environment for the Treaty Verification Technologies Program 
        and Source Physics Experiments to support Comprehensive Test 
        Ban initiatives.

    Reductions to the DTRA RDT&E request would delay or terminate 
solutions to priorities received from the Combatant Commanders and miss 
opportunities to take advantage of emerging technologies and 
operational concepts to counter WMD threats.

Chemical and Biological Defense Program S&T
    The Department's CBDP S&T programs support DOD-wide efforts to 
research, develop, and acquire capabilities for a layered, integrated 
defense against CBRN agents; better understand potential threats; 
secure and reduce dangerous materials whenever possible; and prevent 
potential attacks. Although funding for the CBDP is not part of the 
DTRA budget request, the agency executes the S&T portion of this 
program, for which the Department has requested approximately $511.6 
million in fiscal year 2013. The agency also manages funding execution 
in support of CBDP advanced development and procurement.
    DTRA is addressing key chemical and biological defense mission 
areas in multiple ways including: emphasizing innovation and discovery 
in Basic Research and the Physical Sciences; bio surveillance; 
biological diagnostics; and medical countermeasures such as 
advancements in regulatory S&T of agile, flexible manufacturing and 
rapid enhanced product development and new avenues of treatment against 
CB threats. DTRA and the CBDP leverage each other's expertise, unique 
capabilities, resources, and investments--as well as those of the other 
DOD, U.S. Government, and international partners--in a wide range of 
areas including Basic Research, modeling and simulation, Technical 
Reach Back support, Consequence Management Assessment Team Support, 
Cooperative Threat Reduction and Nunn-Lugar Global Cooperation Support.

Procurement Funding
    The DTRA Procurement, Defense-wide request provides for essential 
vehicle replacement and procures new investment items, including 
mission-critical information technology, required for the agency's 
global mission execution. The fiscal year 2012 request is for $13.146 
million.

                  IMPACT OF DEFENSE-WIDE EFFICIENCIES

    DTRA has achieved efficiencies in its mission execution, yielding 
$52.73 million from all of our appropriation accounts as part of DOD-
wide adjustments. This includes savings of $19.78 million in O&M, $1.88 
million in the Nunn-Lugar CTR program, $32.59 million in RDT&E, and 
$2.24 million in Procurement. We terminated the Innovative Technologies 
program, the Systems Engineering program, and the University Strategic 
Partnership Program. Additionally, reductions were made to our travel 
budget; contract costs related to security support; core operational 
support; contracts related to the CWC; contract costs related to S&T 
ICP; DTRIAC; Basic Research; Advanced Energetics; wargaming; 
environmental restoration; WMD National Test Bed; Test and Technology 
Support; strategic research and dialogues; countering WMD terrorism; 
and nuclear surety. We continue to seek innovative ways to reduce 
operating costs and find more efficient and effective ways of executing 
our mission.

                               CONCLUSION

    Mr. Chairman and other members, WMD pose a global threat that is 
growing in scope and evolving in its potential applications. DTRA and 
the SCC-WMD provide much of the expertise and the daily focus that is 
applied to countering this threat by the Department and, indeed, by the 
U.S. Government. We also build and harness CWMD partnership capability 
with our friends and allies around the globe.
    The challenge facing us is great. The DTRA fiscal year 2013 budget 
request is critical and central to DOD, U.S. Government, and 
international efforts to counter WMD. The relatively small national 
investment in the DTRA/SCC-WMD/SJFHQ-E team provides a tremendous 
return to national and global security. I urge your support for the 
DTRA fiscal year 2013 budget request and would be pleased to discuss it 
in greater detail with the subcommittee at your convenience.
    I hope that DTRA and the SCC-WMD will continue to earn your 
support. I would be pleased to respond to your questions.

    Senator Hagan. We will go ahead and proceed with the 
questions. Secretary Creedon, I'd like to ask you about the 
transitioning of the CTR programs in Russia. The CTR program is 
transitioning from Russia and the former Soviet states to 
Southeast Asia and the African continent. The emphasis has been 
shifting from the nuclear programs in Russia and the former 
Soviet states to engagement in these new regions on handling 
and storing the dangerous biological pathogens.
    What's the long-term vision for the CTR program in Russia 
and the former Soviet states? Then I have a series of questions 
regarding the nuclear security investments in Russia and the 
former Soviet states and how they will be maintained over the 
long-term as we make this transition.
    Ms. Creedon. Thank you, Senator. We are gradually shifting 
to more of a biological threat reduction program and that then 
allows us to place less emphasis on the nuclear programs. With 
all the work that's gone on in Russia over the better part of 
the last 20 years, a tremendous amount has been accomplished. I 
think you are all familiar with the scorecard, which does 
indicate the literally thousands of items that have been 
destroyed as part of the CTR program.
    Senator Hagan. I was very impressed when I looked over the 
report.
    Ms. Creedon. I should give a plug actually to Senator 
Lugar. That whole scorecard was actually one of his ideas to 
demonstrate the success of the program.
    But in any event, we do continue to do a wide variety of 
work with Russia, and in time that will phase down a bit. We 
also value that relationship with Russia and in that context 
are seeking an extension of the umbrella agreement that allows 
for the work in Russia. It expires next year and we are seeking 
an extension of that so that we can continue to do some work, 
although at a lower level in Russia, particularly in some of 
the areas of sustainment, chemical weapons, and some small 
amount of additional destruction work.
    We also continue to work in the states of the former Soviet 
Union, although primarily in Kazakhstan we have some very large 
biological security programs ongoing, and we have some similar 
programs in Ukraine. Those are probably the largest programs.
    Then we are beginning to shift the focus in the biological 
program to Africa and the Middle East. So in time we will 
transition over to those areas of the world as well.
    Senator Hagan. How will the nuclear and security 
investments in Russia and the Soviet states be maintained 
during this period of transition?
    Ms. Creedon. One of the key aspects of all this is, in 
fact, the umbrella agreement, and that's why we're working to 
continue the umbrella agreement, which expires in June of next 
year.
    Senator Hagan. What is involved in order to extend it?
    Ms. Creedon. Both sides, both the United States and Russia, 
have to agree to continue it, basically to just extend it for 
some period of time, because it's that umbrella agreement that 
allows us to do the work in Russia. So if the umbrella 
agreement isn't extended, although we think that it will be--so 
far our very preliminary discussions are positive. But if we 
don't have that agreement, then pretty much the work stops.
    Senator Hagan. How much of a percentage is Russia paying on 
that agreement?
    Ms. Creedon. I can't give you those--maybe Ken can give you 
some more specific numbers. Over time, obviously, the United 
States has paid for everything. But it has changed over time. 
Probably one of the biggest examples of where Russia has kicked 
in a substantial amount is in the various security upgrades 
that frankly both departments participated in as a result of 
the Bratislava agreement some years ago. My recollection was 
that was a very hefty percentage of Russian participation in 
that overall program. DOE and DOD did the exterior and Russia 
did all the interior work.
    The other big program that is definitely transitioning to 
Russia is there's been a train-the-trainers program, and that 
program built a training facility not too far outside of 
Moscow, and Russia is now running that facility. It was 
recently upgraded. They are bringing their people there. 
They're training their people. Then their people go out, and 
that's important for sustainment of the security work that 
we've done over time.
    Senator Hagan. Do you have concerns about Russia and the 
other Soviet states actually maintaining the equipment over the 
long-term?
    Ms. Creedon. That is, in fact, one of the things that we 
are continuing to discuss. All the parts and pieces of DOD were 
over there just last week, and that's one of the topics of 
discussion on the table, is the long-term sustainment of the 
programs, and I think that's the same for DOE.
    Senator Hagan. I forgot to say, we should probably take 
maybe 15 minutes, unless more members show up and then we'll 
cut that back a little bit.
    Ms. Harrington, for fiscal year 2013 the administration is 
proposing to reduce the Second Line of Defense (SLD) program 
from $262 million to $92 million. This program has received 
wide support for installing nuclear detection systems at ports 
and borders around the world to detect illicit transfers of 
nuclear material. The fiscal year 2013 budget states that much 
of the work of installing these detectors has now been 
completed, resulting in the $115 million reduction.
    Is it accurate to say that in fiscal year 2013 and onwards 
you will not be installing future detection systems and 
concentrating on maintaining what we have?
    Ms. Harrington. Thank you, Senator, for your question. On 
the SLD program, we recognize that that program has had a large 
degree of success. As Secretary Creedon just mentioned, one of 
our biggest successes has been in Russia, where we co-funded, 
equal shares U.S. and Russia, the installation of 383 land, 
sea, and air border crossings.
    The maintenance and sustainment of those systems will in 
the next year or so transition 100 percent to Russia. From 
everything that we see, they are vigorously maintaining their 
system and in some senses it will be on a par or even better 
than what we have in the United States.
    Senator Hagan. That transition is to be completed, what 
date did you say?
    Ms. Harrington. In about the next year.
    Senator Hagan. Okay.
    Ms. Harrington. So this is an area where we've seen them 
really step up. The installations use Russian equipment that we 
have brought to the United States and certified as meeting 
international standards, and we have seen evidence that the 
equipment is indeed working.
    We also provide the training for that, and as we look into 
the future again, as with DOD, we really will be focusing on 
keeping up the discussion with them, continuing to exchange 
best practices, making sure that the systems are up and 
working.
    There are other installations in the area surrounding 
Russia that we also are either completing this year or will 
complete next year. We will have about 40 new installations 
next year.
    What we are doing in our strategic pause or program review 
is evaluating what we should be doing beyond the former Soviet 
Union. There we've had some extremely interesting recent 
discussions at the Seoul nuclear security summit. Many 
countries in areas, new areas to us, for example Southeast 
Asia, the Middle East, becoming increasingly concerned about 
having this capability because many nations, despite the 
Fukushima events, still do plan to expand nuclear energy. So 
that means larger commerce in nuclear materials, more need to 
be able to track and ensure the proper management and control 
of those materials.
    So there is a global interest. But what we are doing right 
now is working closely with our interagency colleagues, with 
the Department of Homeland Security, which has a lot of 
experience in this area, along with law enforcement, which 
plays a critical role, to really see what the best balance of 
technical capabilities and programming will be for some of 
these new sites.
    So we have not finished that process yet. We will be happy 
to come brief you when we do.
    Senator Hagan. My next question is, could you be specific 
on these new sites or new areas? You said Southeast Asia. Any 
more specifics on that?
    Ms. Harrington. Since we're still in the process of review 
and we are, of course, evaluating some of the threat assessment 
with the Intelligence Community--we should within the next 
month or two be able to come back and give you a more 
substantial briefing.
    Senator Hagan. Okay. The 5-year budget profile for this 
program is reduced further in fiscal year 2014 to $47 million, 
and then it increases to $64 million in fiscal year 2017. If 
additional detectors have to be installed, will this 5-year 
budget profile support these additional detectors?
    Ms. Harrington. As we move forward into the more specific 
2014 build and the years beyond, we will take into account the 
results of the program evaluation. We will also seek to engage 
our international partners. We have the ability to accept 
foreign funds, for which we thank this committee a great deal 
for supporting that capability. We now have, following the 
nuclear security summit and under the U.S. leadership of the G8 
global partnership, a renewed commitment by countries to 
address border security issues, in particular.
    So we are hoping that we can really leverage U.S. 
taxpayers' investments with dollars from other countries. We 
also will look across our whole suite of programs if we need to 
rebalance internally to provide more funding for this program.
    Senator Hagan. Thank you.
    Director Myers, in your testimony you list two jobs that 
you hold: first, as the Director of DTRA; and then second, as 
Director of the U.S. Strategic Command Center for Combating 
WMD, which integrates for DOD capabilities to defeat WMD.
    I understand this year that the U.S. Strategic Command 
(STRATCOM) has created a new component called the Standing 
Joint Forces Headquarters for Elimination, which is supposed to 
provide a capability to eliminate WMD in hostile or uncertain 
environments.
    It seems to me that you are wearing three hats now instead 
of two. Can you explain in layman's terms these roles and how 
they differ?
    Mr. Myers. Certainly. Thank you. As the DTRA Director, we 
are a combat support agency and a defense agency. To break 
those down in layman's terms, as a combat support agency we 
need to be available 24 hours a day, 7 days a week, to support 
the combatant commanders, support the Military Services, to be 
able to respond to any WMD threat or challenge that they might 
face, whether it be in combat or whether it be as part of a 
domestic issue, whether it be a civil support team through the 
National Guard or what have you.
    As a defense agency, one of our prime responsibilities is 
to perform and to manage a research and development (R&D) 
portfolio, to develop the tools and capabilities that the 
warfighter will need to address and to operate in a WMD 
environment, whether that be nuclear detection, whether that be 
chemical, biological protection gear, actually uniforms or 
detectors, as well as the capability to interdict and defeat 
WMD.
    Most recently, we have transitioned the massive ordnance 
penetrator (MOP) to the Air Force, which is a deep earth 
penetrator conventional weapons system.
    So in layman's terms, that's the DTRA side of the house. On 
the STRATCOM Center (SCC) for Combating WMD, I report to 
General Robert Kehler, Commander, STRATCOM. STRATCOM has 
responsibilities under the unified command plan for 
synchronizing the U.S. response to WMD and in advocating on 
behalf of counter-WMD funding and the support needed across 
DOD.
    So in a lot of ways the SCC responsibilities and the DTRA 
responsibilities dovetail nicely together.
    The Standing Joint Force Headquarters, as you pointed out, 
was stood up on February 3 by General Kehler at an event near 
Fort Belvoir. I am not the commander of the headquarters. The 
commander of the headquarters is Major General Eric Crabtree, 
USAF. He is also the Deputy Director of the SCC, so there is 
that connection between the two STRATCOM components, SCC as 
well as the Standing Joint Force Headquarters.
    We spent quite a bit of time thus far this afternoon 
talking about our nonproliferation efforts, the Nunn-Lugar 
program, the SLD. All of those programs are based upon a 
cooperative relationship with a country, based upon a 
nonviolent environment, where those programs can be carried 
out.
    The Standing Joint Force Headquarters is designed to be 
able to provide the same type of capability in a nonpermissive 
environment or one in which we are not permitted a cooperative 
opportunity to reduce WMD. So in a lot of ways DTRA, the SCC, 
and the Standing Joint Force Headquarters all have different 
roles in the counter-WMD mission area.
    General Kehler has determined he wants the Standing Joint 
Force Headquarters to be co-located with DTRA and the SCC at 
Fort Belvoir so we can get the most from leveraging the three 
organizations, get the most in terms of effectiveness and 
efficiency across the board, to ensure that we don't have to 
have three separate organizations with all the different types 
of support mechanisms, to permit the headquarters to lean on or 
rely on maybe specific expertise that DTRA or the SCC might 
have and that they don't need to maintain that independently on 
their own.
    So while there are three separate mission areas, having us 
all colocated, working together on the same mission with the 
same goal in mind, we seek to get the best bang for the buck 
for the taxpayers, as well as for the committee.
    Senator Hagan. Thank you. Thank you, Director Myers.
    Senator Portman. Thank you, Madam Chair.
    I appreciate those responses. I want to back up a little 
bit and talk about some questions that relate to our oversight 
responsibilities, specifically measures of performance, 
metrics, and looking at our budget this year as requested and 
going forward. The fiscal year 2013 budget request, Ms. 
Harrington, on the DOE side for NNSA and specifically for your 
defense nuclear nonproliferation program is $2.46 billion, 
which is an increase of about $160 million from fiscal year 
2012. I actually look at it here on the chart from fiscal year 
2009, until this request in fiscal year 2013, there was 
actually a 60 percent increase in your funding of just over 
$900 million, almost $1 billion.
    With that kind of substantial growth, of course, it's the 
responsibility of this committee to ensure that the appropriate 
metrics are in place to evaluate the effectiveness of our 
efforts. You've talked about some of those efforts in response 
to the chair's questions.
    GAO released a study in December 2011, concluding that some 
of the defense nuclear nonproliferation programs failed to 
satisfy key program performance measures that GAO has long 
considered essential to measuring and validating program 
effectiveness. This is really nothing new. In December 2010 
they had a report that found that the President's 4-year global 
nuclear material security initiative ``lacks the specific 
details'' on implementation, overall cost estimates, timeframe, 
and scope of planned work remain unclear.
    So I would ask you, Ms. Harrington, if you could respond to 
that. Do you believe that GAO's assessment is accurate, and 
again in the context of a substantial increase in the budget? 
If not, why not? If you believe you are taking steps to address 
what GAO has outlined, we'd like to hear about those as well.
    Ms. Harrington. Thank you, Senator. My view has always 
been, no matter what agency I've worked for, that it's always 
valuable to have somebody from the outside take a look at your 
work, how you manage it, and whether you can improve it. GAO is 
one of the key elements in that process for us in the 
government. We, of course, have our own inspector general, who 
is not inactive, I can assure you, in terms of internal 
oversight.
    On the specific Global Threat Reduction Initiative (GTRI) 
study, the GTRI program has existed for a number of years, but 
was given a very specific boost or impetus in April 2009 when 
the President made a speech in Prague and announced that the 
United States was going to undertake a very focused leadership 
role for 4 years to try to lock down dangerous materials 
worldwide.
    We launched into that effort working very specifically with 
Russia and the International Atomic Energy Agency because among 
the three of us we are the key players in terms of that 
mission. Now, there are many other key players--all of the 
countries that are the targets of the program where the 
material resides. So the criticism in December 2010 that there 
was not a very detailed time line plan for every single action 
that would need to take place really doesn't take into account 
the diplomacy, and sometimes we have to work with our 
colleagues at the Department of State (DOS) to even get our 
foot in the door in a country, negotiation of agreements, the 
management of transportation contracts, the technical work--
sometimes we would not have full information before going in a 
country, what condition the materials were in, the length of 
time it takes material to be extracted from a research reactor, 
for example, cooled, and then safely removed.
    All of those technical issues have variables that go along 
with them. The diplomatic issues have variables that go along 
with them. So it makes very specific day-by-day planning a real 
challenge. Governments fall, new governments are elected. 
Policies change. Contracts have to be renegotiated. All of 
those things are just a fact of life of working in the 
international environment.
    It makes life complicated and it requires a certain amount 
of flexibility on our side and I would say on the side of those 
who provide oversight.
    So I would take some issue with the conclusions of GAO, but 
not any difference at all in terms of agreeing with them that 
there has to be an orderly and responsible management of these 
efforts. We are, after all, using taxpayers' dollars. But there 
is that flexible requirement within the overall context.
    Thank you.
    Senator Portman. I guess what we would like to know from 
you today, and maybe you can follow up in writing, is what then 
are the metrics that you think are appropriate? Obviously, you 
believe that the GAO program performance measures are not 
appropriate to validate your effectiveness, and yet you 
indicate that you do believe that, given the tax dollars going 
into these programs and the substantial increase in funding 
over a 3-year period, about a 60 percent increase overall, that 
there ought to be metrics that you're held accountable to.
    So do you feel you have those metrics in place and that you 
think that this is something that is more appropriate to your 
task, as you've talked about needing more flexibility than what 
GAO has outlined in terms of their metrics?
    Ms. Harrington. I think the bottom line metric, 
particularly for GTRI, is are we removing the material? I think 
that goes without saying. We can document that some 4,600 
kilograms of material, both plutonium and highly-enriched 
uranium, have been physically removed from the countries that 
we had on our original target list.
    We have a schedule. In fact, some of the details of the 
next removals are being discussed in an international meeting 
today.
    So the planning process is a very precise and well thought 
through process. It's just the timing of that process does need 
to be flexible enough to reflect the realities of international 
diplomacy. I think if you look at where we said we would be and 
where we are right now in terms of the targets and the number 
of kilograms of material removed and the number of buildings 
secured, that we are quite on track at this point.
    Senator Portman. So you have metrics, and the number of 
kilograms is meeting and maybe exceeding your expectations, 
because you have metrics in place and you're measuring it? I'm 
trying to help you here.
    Ms. Harrington. Yes, yes. Yes, indeed, indeed. We always 
have had.
    Senator Portman. Okay. I guess again what we would like is 
if you could follow up with this hearing, with your more 
specific response. I'm talking about now the GAO 2011 report as 
well. To the extent you believe you have established metrics 
that are appropriate for this program as it's grown, we'd like 
to get a response more formally from you to the GAO report.
    [The information referred to follows:]

    The Global Threat Reduction Initiative's (GTRI) removal program is 
measured and evaluated based on the number of kilograms of highly-
enriched uranium or plutonium that the program removes or eliminates 
each year. This metric is appropriate for the program as it measures 
the amount of material that is removed from civilian sites and 
permanently eliminated so it cannot be used by terrorists to make 
nuclear weapons. GTRI's metric for removals under the 4-year plan is 
4,353 kilograms removed or downblended by the end of December 2013. To 
date, we have removed and/or downblended 3,333 kilograms. Shipments 
remaining include:


  Uzbekistan....................  INP...............  Spent HEU.........  2012..............  Russian
  Poland........................  Maria.............  Spent HEU.........  2012..............  Russian
  Poland........................  Maria.............  Fresh HEU.........  2012..............  Russian
  Uzbekistan....................  INP...............  Spent HEU.........  2012..............  Russian
  Czech Republic................  Rez...............  Spent HEU.........  2013..............  Russian
  Vietnam.......................  Dalat.............  Spent HEU.........  2013..............  Russian
  Belarus.......................  Pamir.............  Fresh HEU.........  2013..............  Russian
  Uzbekistan....................  Photon............  Spent HEU.........  2013..............  Russian
  Hungary.......................  BRR...............  Spent HEU.........  2013..............  Russian
  South Africa..................  SAFAR I...........  Spent HEU.........  2013..............  South African
  South Africa..................  SAFAR I...........  Fresh HEU.........  2013..............  South African



                                                                                              
                                                                                              
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    
    
      
    Senator Portman. Ms. Creedon, on your side, section 1304 of 
the National Defense Authorization Act (NDAA) for Fiscal Year 
2010 required the National Academies to assess the 
effectiveness of tools used to evaluate the CTR programs in 
response to the National Academy of Sciences' findings, which 
included a recommendation for CTR programs to better refine its 
stated objectives. I understand you're undergoing a top-to-
bottom review of the CTR program.
    What's the status of that review and what lessons learned 
through this exercise do you believe can be shared or even 
replicated at NNSA to ensure greater accountability and 
effectiveness?
    Ms. Creedon. The section that you refer to, section 1304, 
required a sequential series of events, and the first event was 
the submittal by DOD of a report that laid out how these 
metrics were going to be developed in the future.
    We came to this with a background of probably what, for 
lack of a better description, were easy metrics, because we 
knew how many intercontinental ballistic missiles we'd 
destroyed, how many launchers we'd destroyed, how many 
submarines we'd cut up. That was a fairly easy way to approach 
this. As we were going to transition into more of the 
biological side, that's when a lot of the discussion of metrics 
came up.
    So in that report that we submitted initially, and I 
believe it was September 2010, in response to the requirement 
in the NDAA, we laid out how we have developed metrics for all 
of the more traditional programs, the nuclear element 
destruction, the chemical weapons destruction--again, counting 
things; you know how many tons of something you've destroyed--
and looking at the biological weapons really is where the 
challenge is.
    So in that report we laid out a series of things that we're 
going to look at as metrics in the expansion of the biological 
threat reduction program. That report was recently reviewed by 
the National Academy. We're now in the next step of finalizing 
the metrics, and that report is in its final stages. In fact, I 
think there were some staff briefings to some of the committee 
staff here a couple of weeks ago.
    When you look on the biological side, each country will 
have an agreement, based on what the requirements are of the 
country and what the needs are of the country. When we look at 
some of the countries that are more advanced in this work, such 
as Kazakhstan, you look at things like how many collections of 
dangerous pathogens do they have, how are they secured, should 
they be consolidated, should you combine the sort of veterinary 
pathogens and human health pathogens, or does it make more 
sense to keep them apart?
    The focus of CTR historically has been on trying to 
consolidate to the greatest extent possible consistent with the 
requirements of the country, to reduce the number of these 
sites. So we've done a lot of work on consolidation.
    We look at the security of these sites, and again we've 
done a lot of work, particularly in Kazakhstan and in some 
other places, Ukraine, on making sure that these sites are 
secure. You look at the safety, what's the biological safety 
level of these facilities? Do these facilities meet 
international health regulations and standards?
    We also look at the overall disease surveillance 
capabilities of the country, because that's why we, DOD, are in 
this to begin with, because it's a national security 
requirement to make sure that our troops in the area, our 
families in the area, were protected. We wanted to make sure 
particularly in these countries that had naturally occurring 
incidents of diseases that could be weaponized, that we knew 
whether or not an outbreak was manmade or whether it was 
natural. So we wanted to make sure that these countries also 
had surveillance capabilities and that they had forensics 
capabilities.
    So as we expand the biological program, these are the 
things that we're going to look at with respect to each 
country, each agreement, as we go forward on the biological 
program.
    Senator Portman. What's the timing of that report?
    Ms. Creedon. It's almost done. I think it's probably within 
the next couple of weeks, I think the final version.
    Senator Portman. Would you be planning to brief the 
subcommittee?
    Ms. Creedon. We have had some preliminary briefs to the 
staff a couple of weeks ago, and when it's done, we'll be happy 
to come back and brief the subcommittee.
    Senator Portman. Yes, we would appreciate getting that in 
that briefing and looking carefully again at making sure we're 
avoiding duplication and doing this in the most cost-effective 
way possible. It sounds like you've laid out a lot of metrics 
that you feel comfortable with.
    The next question I have relates to what I talked about in 
the opening, which is sequestration, how are we going to deal 
with this. In addition to the $487 billion in proposed cuts to 
the defense budget already in place, which I know you've had to 
deal with, although again your budgets for the most part have 
been increased, we now have this additional $500 billion across 
the board.
    I believe we should act as a Congress to avoid that. I know 
the chair shares my concern about that. So we're not here to 
tell you that we think it's the right thing to do. But I think 
it is appropriate for us to plan for the possibility that 
Congress does not figure out a way to find offsets or otherwise 
deal with sequestration.
    Can you provide us today--and I guess I would direct this 
really to all three of you; maybe Mr. Myers because he's been 
off the hook so far--how would these additional cuts affect 
your respective agencies? I look at a lot of your programs, 
some of them involve international commitments. In other words, 
they're obligations to other countries. I just wonder if you 
can talk a little about that.
    What would these cuts mean? Would we be violating 
international obligations? How would you deal with it should 
sequestration not be avoided and should as of January 1, 2013, 
we have these across-the-board cuts in place? Mr. Myers?
    Mr. Myers. Thank you, Senator. To start off with, the 
impact of sequestration would be devastating. The U.S. strategy 
for dealing with WMD in my opinion is based upon developing and 
constructing lines of defense--at the source when possible in a 
cooperative way, at the borders in terms of interdiction--open 
spaces, if you will, in terms of detecting whether something is 
moving by sea or over land or in the air; and when necessary, 
have the ability to identify, detect, and eliminate weapons and 
materials of mass destruction, if necessary; and obviously, if 
one is unsuccessful, consequence management in the event of a 
WMD incident.
    I believe sequestration would cause a major erosion in 
these lines of defense. It's very difficult for me to tell you 
exactly what the budgetary impact would be on each and every 
single one of them, but I think across-the-board our efforts 
would erode. I think we would have a lot of problems in terms 
of manning and being able to implement arms control treaty 
obligations and the R&D portfolio that we have today.
    We have no planning going on for sequestration, but we are 
hopeful that it can be avoided, because I believe that the 
impact will be severely detrimental, if not devastating.
    Senator Portman. What concerns me about your answer is it 
sounds like you have not been directed to come up with a plan 
and, although I agree with you it'll be devastating, just 
looking at it on a general level, because it's across-the-
board, I think it would be really helpful to understand better 
what the consequences would actually be and whether, as you 
indicate, it might result in the United States not meeting some 
of our international obligations, because a lot of those lines 
of defense you talk about are involving partnerships, including 
the source, the border, even the transit.
    Ms. Harrington, Secretary Creedon, would you like to 
respond to the question about sequestration?
    Ms. Creedon. Sir, only to just add from the policy office 
perspective. We obviously were very much in support of the 
Secretary's development of the strategic guidance for DOD that 
was put out in January and, as the Secretary has indicated, 
that strategic guidance would not be executable under 
sequestration. But the Secretary has not directed us to plan 
for sequestration at the moment.
    Senator Portman. How about DOE?
    Ms. Harrington. That's similarly the case in DOE. We have 
not been instructed by the Secretary.
    Senator Portman. Thank you all.
    Senator Hagan. Thank you, Senator Portman.
    Director Myers, as part of the counterproliferation program 
legacy DTRA had the principal role in developing the fuse 
systems for the MOP that you mentioned in your answer a minute 
ago, a bomb that's designed to attack hardened and buried 
targets. What's the status of the follow-on efforts in these 
weapons and, in particular, being able to defeat or neutralize 
biological or chemical weapons facilities?
    Mr. Myers. The MOP has been successfully transferred to the 
U.S. Air Force. They're carrying out testing of their own at 
this time. DTRA is in full support of them in this, but I'm not 
aware of the exact way that the Air Force would characterize 
the status of the MOP at this time.
    I know we believe that when we transferred it over to the 
Air Force it was in good condition, and I think that they're 
continuing ways to improve it and improve performance.
    Senator Hagan. When did that transfer take place again?
    Mr. Myers. It was 9 to 12 months ago.
    Senator Hagan. Thank you.
    Deputy Administrator Harrington, the MOX fuel program has 
been under way since 1999 and, according to GAO, we've spent 
over $6 billion to date on the program, $5 billion in 
construction and another $1 billion in research. I understand 
its importance from a nonproliferation perspective, but I 
question in hindsight if there was a more cost-effective means 
for the taxpayers to dispose of the excess weapons-grade 
plutonium.
    I want to have a series of questions about this. What's the 
status of obtaining a reactor operator who will use the MOX 
fuel and has the Nuclear Regulatory Commission (NRC) granted a 
license for this new form of fuel?
    Ms. Harrington. Thank you for your question. The MOX 
program--and I think you appropriately characterized it--a lot 
of times people get distracted by one facility or the other. It 
is a capability to dispose of U.S. excess weapons plutonium, 
and there are several components to that capability. In terms 
of the operator, of course we need to have a customer. We have 
been working closely with the nuclear industry for a number of 
years on this, and currently specifically we are working with 
the Tennessee Valley Authority (TVA). We have very regular 
interactions with them and they are studying the technical and 
regulatory requirements associated with irradiating MOX fuel in 
five of their reactors.
    The current schedule with TVA is to execute the fuel supply 
agreement for MOX fuel in 2013, after the NNSA completes a 
supplemental environmental impact statement, in which TVA is a 
cooperating agency, so we're working extremely closely together 
on this.
    In addition, we have ongoing conversations with a variety 
of fuel fabricators regarding the option of having them market 
MOX fuel to their utility customers. In some cases, the fuel 
fabricators are coming to us with interest, not us reaching out 
to them. So it has been interesting to see that as the project 
progresses, the interest in the commercial sector also has been 
increasing.
    We also are developing other strategies to engage 
commercial customers. I think we are confident that when the 
fuel fabrication plant comes on line there will be customers 
ready to use the fuel.
    In terms of the NRC, we also are working very closely with 
them on the licensing aspects of the MOX. The whole process 
takes about 30 months and a variety of technical papers need to 
be submitted by Areva in order for that review to take place. 
Areva plans to submit these licensing topical reports in the 
2013 to 2014 timeframe to allow enough time for NRC review and 
then that should mesh with the target production date.
    So right now we see these two tracks going on in parallel, 
but timing to meet the targeted production dates.
    Senator Hagan. I understand that last year NNSA cancelled 
the facility that will supply the plutonium feedstock to the 
fuel assembly building, and I commented on this in my opening 
remarks. But in our fiscal year 2013 authorization bill this 
committee asked NNSA to supply a long-term plan for the life of 
the program on facilities and costs you will incur to obtain 
the plutonium feedstock.
    Do you see any issue with meeting our December 31, 2012, 
deadline?
    Ms. Harrington. Senator, I do not. I am very confident that 
we can provide a plan that is credible and that will indeed 
provide the stable and necessary feedstock for the facility. I 
have been very intimately involved in this particular element 
of the project. I have been out and gone through the facility 
at Los Alamos. We've had detailed discussions with our 
colleagues in Defense Programs, because we, in fact, would be 
sharing capabilities within a facility at Los Alamos. Not only 
does that not cause a problem, it helps both of us preserve a 
plutonium capability for the United States that we need for 
both programs, that without our interaction on the MOX project 
would be very difficult to preserve.
    In addition, we are building up a feedstock in South 
Carolina of MOX, of the actual oxide, plutonium oxide, that is 
ready to go into the plant now. We have more than four tons and 
by the time the plant actually goes into cold startup or warm 
startup, we'll probably have about 10 of the 34 tons already 
there on site ready to use.
    Senator Hagan. When will that be?
    Ms. Harrington. Right now we're looking at 2016. But if we 
are at that point, and I think we can be, even before 2016, I 
see no reason why we can't be fully confident that the 
feedstock issue is behind us.
    Senator Hagan. Did you say you'll be getting it from South 
Carolina?
    Ms. Harrington. We already have the 4 tons there, and we 
are working with our colleagues in the Environmental Management 
side of DOE on how to clean up some of the additional material 
there, which has the double benefit of reducing the amount that 
we need to put into waste, long-term waste, and upping the 
amount that we have available for the MOX plant. So it's a win-
win situation for us.
    Senator Hagan. I understand that the main fuel fabrication 
building, which is under construction, will have its cost and 
schedule baseline revised this summer. Is that correct? If it 
is revised, will you be obtaining an independent cost estimate 
(ICE)?
    Ms. Harrington. We are in the process right now of 
evaluating the cost and schedule impacts associated with a 
number of the cost pressures and challenges that I think we've 
spoken to this subcommittee about before. We are, as part of 
this evaluation of a possible baseline change, we will 
definitely obtain an ICE.
    Senator Hagan. Do you have any idea now as to the impact of 
that change of the baseline?
    Ms. Harrington. There are several elements that are being 
considered in a comprehensive review, which also includes the 
possibility of putting a furnace inside the MOX plant that will 
turn the plutonium metal into oxide as part of the feedstock 
program. So there are a lot of moving parts in this analysis 
right now.
    Senator Hagan. Is that being done anywhere else in the 
world?
    Ms. Harrington. Yes. It, in fact, was a solution that was 
proposed to us by Areva, which controls the technology for the 
plant. It's something that we've reviewed with them in great 
technical detail, and the analysis is that, yes, this is 
something that's compatible with the approach at the reference 
plant.
    Senator Hagan. Is it being done currently?
    Ms. Harrington. In this precise configuration, no.
    Senator Hagan. Thank you.
    Director Myers, DTRA and NNSA both have active programs to 
develop radiation detection systems. How do you and NNSA 
coordinate these programs and budgets, and are there any 
differences in how the detectors are used?
    Mr. Myers. Thank you, Senator. DTRA and NNSA coordinate 
very closely on not only nuclear detection, but all programs 
and projects that we have in the nonproliferation and 
counterproliferation arena, as well as the arms control arena. 
The three of us and other colleagues meet at least on a 
quarterly basis, if not more often, just to compare and 
contrast what the goals are, where we're headed, the pathway 
we're taking, the needs and requirements each of us have within 
our own portfolios, and what we're trying to accomplish.
    Specifically in the area of nuclear detection, the 
scientific expertise that Ms. Harrington has at NNSA and the 
scientific expertise in nuclear detection at DTRA get together 
even more often than we do within the bridge meetings. They 
have a slightly odd sense of humor. They consider themselves 
the ``trolls'' because they're under the bridge. They are 
constantly working together.
    I would point out, Ms. Creedon said earlier today about 
NNSA, DOD policy, DTRA, and other elements working together 
last week in Moscow. We had an executive review of the Nunn-
Lugar program in Moscow. It is to the point in the relationship 
between the organizations, it would almost be unthinkable for 
DTRA and OSD policy to go to that executive review without our 
colleagues from NNSA joining us to ensure that we don't have 
any overlaps, that we don't have any gaps, that there is no 
duplication in our efforts, not only on domestic programs like 
you laid out in nuclear detection, but also our international 
efforts, to ensure that we are a united front and that we have 
one policy that is covering the entire waterfront with regard 
in this case to the Russians.
    Senator Hagan. Thank you.
    Ms. Harrington, a major element of your portfolio is 
converting reactors here and abroad from highly-enriched 
uranium to the low-enriched uranium, and as a part of that 
effort to develop a domestic supply of medical isotopes using 
low-enriched uranium, called molybdenum-99.
    Can you please explain the vendors you're working with in 
the United States to develop a domestic supply of these medical 
isotopes, and when do you expect it to be commercially 
available here in the United States?
    Ms. Harrington. Thank you for raising a very important part 
of our mission, Senator. The reason that we are so interested 
in this area is that traditionally moly-99 has been produced in 
many places around the world using highly-enriched uranium and, 
we are firmly committed to reducing and to the extent 
eliminating the use of highly-enriched uranium in civilian use.
    So when we reached out to the U.S. commercial community and 
asked for expressions of interest by U.S. companies in working 
with us to develop a domestic capability, we were very pleased 
when Babcock and Wilcox, GE-Hitachi, Northstar Medical 
Radioisotopes, and Morgridge Institute for Research responded 
positively and submitted proposals which we have been working 
on collaboratively with them since then.
    The whole idea is to accelerate the production of a viable 
technology for moly-99 use in the United States in 2016. That 
is our target date.
    Senator Hagan. I understand that Russia still supplies this 
isotope using the highly-enriched uranium. What are you doing 
to help them make this medical isotope from the low-enriched 
uranium? Is our medical isotope industry supportive of your 
efforts? I appreciate the comments on the companies.
    Ms. Harrington. In terms of Russia, we have reached a 
point, I think, of breakthrough with them in terms of their 
commitment to begin converting their research reactors to low-
enriched uranium. We engaged in a series of studies on six of 
their reactors. Four of those studies are now complete. Two 
will be in the coming months.
    The initial conclusions are that one reactor can be 
converted immediately. A second probably can be converted over 
the next 18 to 24 months. The Russians have informed us that 
they intend to proceed, are looking to us to work with them 
technically to accomplish this. That will lead ultimately to 
their commitment, which they have made, to convert their 
isotope production also to low-enriched uranium.
    So after a number of years of trying to move forward on 
this, we are extremely excited that finally we are seeing some 
concrete progress.
    Senator Hagan. Did we use to make this medical isotope in 
the United States?
    Ms. Harrington. I don't believe we did, but we may have in 
the past. I would have to get back to you on that specifically.
    [The information referred to follows:]

    Yes, Mo-99 was produced in the United States prior to 1989. Chapter 
3 of the 2009 National Academy of Sciences study ``Medical Isotope 
Production without Highly-Enriched Uranium'' discusses the history of 
Mo-99 production in the United States. Following is the excerpt from 
Chapter 3, and the entire report can be found at the following URL: 
http://www.nap.edu/openbook.php?record--id=12569&page=R1

          ``PAST PRODUCTION OF Mo-99 IN THE UNITED STATES--Although 
        there is currently no commercial production of Mo-99 in the 
        United States, this was not always the case. Prior to 1989, 
        Cintichem, Inc. produced Mo-99 for the U.S. market using a 5 
        MWt (megawatt thermal) research reactor located in Tuxedo, NY. 
        This reactor was shut down when tritium contamination of 
        surface waters adjacent to the reactor site was confirmed. A 
        decision to decommission the reactor was subsequently made 
        after a risk-benefit study carried out by Cintichem's parent 
        company, Hoffman-LaRoche, determined that its continued 
        operation was not justified. Cintichem offered to arrange a 
        long-term supply agreement with the other North American 
        supplier, the Canadian company Nordion (later MDS Nordion), to 
        supply Mo-99 to U.S. technetium generator manufacturers 
        (Amersham [now GE Healthcare], Mallinckrodt, and DuPont).''

    Senator Hagan. Thank you.
    Assistant Secretary Creedon, the interagency coordination 
of the CTR programs, especially the biological engagement 
programs, has been an area that Congress and GAO continue to 
monitor. Explain, please, how you vet these programs across the 
interagency community, especially with the Centers for Disease 
Control (CDC) and the Department of Agriculture?
    Ms. Creedon. There's an interagency process that is led by 
the White House staff where a lot of these topics come for 
discussion, and in the normal process of working out, as I 
mentioned earlier, with respect to the various countries where 
we engage with the agreements, we bring in these other 
countries. So for instance, one of the long-term goals of these 
programs is to make sure that the various facilities that we 
establish are sustainable and that they become part of the 
World Health Organization, they comply with those standards. 
CDC will become a key part of that.
    I mentioned some of the work that we've done in some of the 
countries of the former Soviet Union. One of those is also 
Georgia, which I hadn't mentioned earlier. Georgia also has a 
laboratory that's a very nice laboratory--it meets all current 
standards--that the CTR program has built, and we're now 
transitioning to operation by the Georgians. Their equivalent 
of the CDC is going to work with them, as is our CDC is also 
going to have a presence there.
    So this lab is actually turning into, and will turn into 
over time, a regional center with both Georgian health effects 
people and the international and the CDC. So in all of these 
efforts, we're trying to bring our CDC in, because that's 
really the key, is the involvement of the CDC to the long-term 
sustainment and the ability of these countries to sustain these 
labs in the long-term so that CTR isn't the source of the 
sustainment funding forever.
    Senator Hagan. How about the Department of Agriculture?
    Ms. Creedon. The same is true on the veterinary side. So 
that's the human health side, so on the veterinary side we work 
pretty closely with our U.S. Department of Agriculture to make 
sure that we're coordinated with them on the security and 
cooperation and to the extent that we can we work with their 
labs as well. Their laboratory structure is obviously different 
from the CDC, but we coordinate with both of them.
    Mr. Myers. Senator, if I might add a quick comment, 
Secretary Creedon very accurately described the interagency 
process here in Washington. The element that I would like to 
add to that is that the DTRA work, the Nunn-Lugar program 
efforts and the DTRA personnel that are working in these 
countries are part of an embassy team, and they are working 
side-by-side with colleagues from the CDC or the Department of 
Agriculture or Department of Health and Human Services. They're 
bringing together consolidated strategies.
    Obviously, DOD, we have a skill set that we bring to the 
table in terms of the security and the safety and a lot of the 
disease surveillance. But our colleagues from these other 
departments and agencies in many cases have been on the 
continent or in this area longer than we have. We're trying to 
learn those lessons that they've learned over 30 or 40 years 
from them, so we don't have to learn them ourselves. Being a 
part of that team, doing it together in full coordination, 
allows us to skip ahead an awful lot down the path in terms of 
understanding and in terms of building those kind of relations 
and ensuring that when we approach a foreign government entity, 
whether it be a department of health or a Department of 
Agriculture, we do it on a consolidated front across, so it's 
one U.S. Government position.
    This is developing extremely well. Just in the last 12 to 
18 months, one sees real huge strides, especially in sub-
Saharan Africa. I think it's something we'll continue to see 
improve.
    Senator Hagan. Senator Portman.
    Senator Portman. Thank you, Madam Chair.
    I have a couple questions that maybe we can go into further 
during closed session. But one is about Syria. I was over in 
the region last week and heard a lot about it publicly and a 
lot of discussions about their chemical and biological weapons 
stockpile. I'm looking here at a Reuters story which was from 
last month, but talks very openly about the concern. This 
Reuters story says what we have heard, which is that many 
countries, including the United States, believe that this may 
be the world's largest remaining stockpile of undeclared 
chemical weapons, and obviously with the unrest and instability 
in that country and that part of the world, it's a major 
concern.
    The first question is, what is your assessment of the size 
and the composition of the chemical and biological weapons 
stockpile in Syria? Second, of course, should the Assad regime 
fall, are you confident that a plan is in place to help secure 
these deadly materials? I'll leave it open to all three.
    Ms. Creedon. Syria does have a substantial stockpile of 
chemical weapons at the moment, at a variety of locations 
across the country. We believe these weapons are secure at the 
moment, and it would be an understatement to say we worry about 
them a lot and we think about them a lot. Like DOD does in all 
circumstances, we think about options that might be developed 
to deal with them.
    Senator Portman. Mr. Myers, anything to add?
    Mr. Myers. Senator, I'd prefer to address the issue in the 
closed session if that's all right with you.
    Senator Portman. That's fine with me. I just wanted to give 
you a chance in the public session to respond to the question, 
and I think you have.
    Since you were talking about low-enriched uranium and 
medical isotopes, I'd like to talk about the more general issue 
of national security requirements for enriched uranium. I have 
a document here from NNSA regarding that. In fiscal year 2013 
your budget request includes $150 million for domestic uranium 
enrichment R&D. Due to certain treaty obligations, we need U.S. 
origin and unobligated uranium to support certain national 
security missions, such as producing tritium for our nuclear 
weapons stockpile. It's my understanding that this R&D effort 
is the only planned technology capability that can fulfill 
those requirements.
    In addition, this effort will allow NNSA to better 
understand uranium enrichment technologies to support 
nonproliferation by discouraging the unnecessary spread of 
enrichment technology, by having a source, an alternate source 
that the United States can provide at a reasonable cost and a 
reliable way.
    I think it also increases confidence in the international 
commercial enrichment market and improves the ability to detect 
proliferant programs. Then finally, it produces the necessary 
tritium.
    Ms. Harrington, maybe you're the right person to answer 
this question; can you explain what the administration means 
when it says U.S. origin, unobligated uranium and why the 
United States has this requirement?
    Ms. Harrington. I wish I had my team of lawyers here, but I 
think I can answer your question. We engage other countries in 
nuclear commerce and nuclear cooperation under the general 
article of the nonproliferation Treaty on Peaceful Uses. Under 
the Nuclear Nonproliferation Treaty, it is very specific that 
when you do engage in that kind of cooperation, it is 
exclusively for peaceful uses. So under the Atomic Energy Act 
we have the ability, under the negotiating leadership of DOS, 
to negotiate and conclude what we call 123 agreements.
    Those agreements allow us to engage in nuclear commerce and 
for countries to come to the United States and establish 
facilities for uranium enrichment, fuel fabrication, et cetera. 
So it's all part of both our commitment under the Nuclear 
Nonproliferation Treaty as well as our commitments under 
bilateral peaceful uses agreements.
    When we look at our needs for national security, production 
of tritium for our weapons or the production of the highly-
enriched uranium that's needed for our naval nuclear propulsion 
systems, that material cannot come from facilities that were 
established in the United States either using foreign 
technology, which is covered under the peaceful uses 
requirement, or a foreign-owned facility.
    So that means that we have to have what we call an 
unencumbered U.S. origin source of material. That is absolutely 
critical from our perspective to sustain the long-term 
viability of our nuclear stockpile, as well as our nuclear 
Navy.
    That is why this particular issue is so important and why 
we have this particular piece of funding in our budget for next 
year.
    Senator Portman. By the way, Deputy Secretary Dan Poneman 
has been terrific in my view at pointing out this requirement, 
and also emphasizing the need to have a source as the 
administration gets even more aggressive in nonproliferation 
efforts. I heard recently the President say that in his second 
term, should he be reelected, he intends this to be one of his 
top priorities, and we'll need to have the ability to tell 
countries that would like to pursue this technology that they 
don't need to have an enrichment capability because we can 
provide it, but we need to have a secure means of doing so.
    Would you agree with that?
    Ms. Harrington. I do agree with that. We invest a lot of 
our diplomatic capital trying to persuade countries that they 
do not need to establish enrichment or reprocessing 
capabilities, in part because it doesn't make economic sense 
unless you have a very large suite of reactors. It's also part 
of the global concept that is beginning to gain real traction 
on comprehensive fuel services, that if a country offers to 
build a reactor it can offer at the same time to provide the 
fuel and take it back, so the customer doesn't have to deal 
with some of the messier parts of the nuclear fuel cycle.
    It makes it more difficult for us to persuade countries to 
go down that path if we can't offer some of those services 
ourselves. At this point we really don't.
    If we are successful in this R&D project, we could serve 
nonproliferation and national security in two senses: one, to 
be able to meet our own domestic needs for defense; but also to 
then, if we have a competitive commercial technology, to be 
able to, as you very correctly pointed out, be able to compete 
on the global stage and reduce the need for countries to 
develop the capabilities themselves.
    Senator Portman. That's well put. As you said, we don't 
have that capability now because both for the requirement you 
talked about, which is the U.S. origin unobligated uranium, and 
also to be able to encourage more countries not to go down the 
road of enrichment, we need to have a U.S. source that's 
reliable and one that has technology that can be competitive.
    The Paducah gaseous diffusion plant is the only current 
operable enrichment plant that meets the domestic requirements 
currently, isn't that accurate?
    Ms. Harrington. That is true.
    Senator Portman. They've just been given another year to 
operate. But with that very dated technology, the gaseous 
diffusion technology, as opposed to the centrifuge technology, 
which is very energy inefficient, among other things, that 
certainly is not our long-term solution. So I agree with you 
that the R&D effort is important.
    I guess what I would ask you is, can you tell me if there 
are any other planned new enrichment capabilities deployable in 
the near future that can meet the requirements that you spoke 
about previously, other than the R&D?
    Ms. Harrington. Not that I'm aware of, no.
    Senator Portman. I would appreciate it if you could outline 
DOE's strategy for meeting the national security mission 
obligations following the end of the R&D effort, which will be 
in fiscal year 2013, and elaborate more on why you believe this 
effort is so important going forward? In other words, after the 
R&D what comes next?
    Ms. Harrington. At the end of the R&D program what we hope 
we will have in hand is a sufficient proof of principle and 
pilot operation that would allow the commercialization of the 
technology. That is not necessarily something that is DOE's 
responsibility. That would be something that we would look to 
the private sector to be very involved in.
    But we do think it's worth another year of investment in a 
technology that we believe is promising and could have 
commercial potential to see if we can prove that principle.
    Senator Portman. I appreciate your testimony today and I 
would just make the obvious point that over 3\1/2\ years into 
the loan guarantee program, it seems to me we need to move 
forward on a longer-term solution, as you have indicated how 
important that is to our national security, as well as our 
nonproliferation efforts. I would hope that you and your 
colleagues would continue to promote this effort, including 
encouraging my former Office of Management and Budget (OMB) to 
understand the significant issues you've raised today, because 
those are difficult to take into account under their current 
methodology when they come up with a credit subsidy, and I 
think that's been one of the issues with regard to the loan 
guarantee not going forward to provide the necessary, as you 
said, source of U.S. origin unobligated uranium.
    So I would thank you, Ms. Harrington, for your efforts 
already and hope that you would continue to work with us on 
that effort.
    Thank you, Madam Chair.
    Ms. Harrington. Thank you, and we would be happy to work 
with you and draw on your OMB experience any time.
    Senator Portman. I hope you'll have better luck than I've 
had. [Laughter.]
    Senator Hagan. Thank you, Senator Portman.
    To our witnesses today, thank you so much for your 
testimony. I would like to adjourn this meeting and then let us 
reconvene almost immediately, at least by 4 p.m., for the 
closed session.
    Thank you all again. This hearing is adjourned.
    [Questions for the record with answers supplied follow:]

              Questions Submitted by Senator Kay R. Hagan

            METRICS FOR COOPERATIVE THREAT REDUCTION PROGRAM

    1. Senator Hagan. Secretary Creedon, Congress has worked with your 
office over the past 3 years on developing program metrics to ensure 
the Cooperative Threat Reduction (CTR) program has clear goals and end-
states to ensure each program in a particular country has a transition 
path out once the program has met those goals. Do you support the 
objectives of developing such program metrics?
    Ms. Creedon. Yes. I agree with the need to establish durable 
metrics that can account for dynamic changes in the operating 
environment and new technologies (particularly for the capacity-
building program elements), and to support the sustainment and 
transition of the program to the partner country.

    2. Senator Hagan. Secretary Creedon, in this year's authorization 
bill, this committee directed the Department of Defense (DOD) to 
include metrics in the CTR annual report and to identify the transition 
path for a program once it is completed. Do you support these 
objectives?
    Ms. Creedon. Yes. Metrics are an important element to enable any 
program to track and report progress, including charting a path to 
sustain and/or transfer a program once completed.

               STRATEGIC REVIEW OF SECOND LINE OF DEFENSE

    3. Senator Hagan. Deputy Administrator Harrington, your testimony 
states that for fiscal year 2013 the ``National Nuclear Security 
Administration (NNSA) has initiated a strategic review of the second 
line of defense (SLD) program to evaluate what combinations and 
programs make the most effective contributions to national security.'' 
Can you please describe this review and who is participating in it?
    Ms. Harrington. The review is well underway and is being supported 
by subject matter experts in the Federal Government, at the national 
laboratories and in private industry. The SLD Program is utilizing all-
source information to reassess trafficking incidents and adversaries, 
the models it uses to prioritize countries and ports, green and blue-
border trafficking vulnerabilities, the detection and deterrence role 
of the equipment provided, and how SLD equipment and training fit into 
the Global Nuclear Detection Architecture. The NNSA has engaged other 
U.S. Government agencies for their opinions on the program and any 
improvements they would suggest. In addition, the role of fixed and 
mobile systems is being discussed at interagency meetings chaired by 
the National Security Staff (NSS), and ideas provided by the NSS and 
attending agencies are also being integrated into the recommendations. 
The review should be completed in time to impact the fiscal year 2014 
budget--probably in August or September 2012.

    4. Senator Hagan. Deputy Administrator Harrington, when completed, 
can you share the review with this committee so we can understand its 
implications on future budget submissions?
    Ms. Harrington. NNSA is willing to brief the subcommittee at the 
time that the strategic review is completed, or before, if you wish.

                        BIO-SURVEILLANCE NETWORK

    5. Senator Hagan. Secretary Creedon, there has been concern about 
the ability of the CTR's bio-surveillance network, which is carried out 
as part of the cooperative biological engagement program, to monitor 
the development of dangerous pathogens by countries that do not fully 
participate with the network or by non-state actors and groups who 
might be able to circumvent such a network. Can you please explain what 
this bio-surveillance network is and how it works with other U.S. and 
international agencies?
    Ms. Creedon. DOD participates in bio-surveillance as part of a 
larger U.S. Government biodefense effort. DOD's strategic approach, 
however, does not promote undertaking Cooperative Biological Engagement 
Program (CBEP) work on a global scale, and DOD does not intend to build 
a global biological surveillance network through the CBEP. DOD has 
taken a deliberate, sequenced, and measured approach to expanding our 
biological engagement while maintaining sustainability, focusing on 
building cooperative partners' national capacities for accurate and 
timely bio-surveillance, and encouraging broader regional cooperation 
and transparency. We continue to ensure that our investments are 
complementary on regional and global levels to increase information 
sharing where possible. However, DOD invests in high-priority areas, 
and we measure the success of these investments against their threat 
reduction performance at the local and regional levels. All of these 
individual efforts are developed with a view towards supporting broader 
international efforts to improve information sharing among all relevant 
countries and regions.
    DOD and the CTR program, through the CBEP, partner with health and 
security experts and other elements of the U.S. Government and 
international community to ensure that health security risks are 
mitigated. The program works in a variety of ways to reduce the risk of 
biological weapons development and use, and it also works with partner 
countries to strengthen capabilities to detect, diagnose, investigate, 
and report infectious disease outbreaks anywhere in the world. In 
addition, the CTR program supports broader U.S. Government efforts to 
encourage rapid response to contain and eliminate the cause of such 
outbreaks.

    6. Senator Hagan. Secretary Creedon, do you think this network has 
vulnerabilities associated with these concerns, and if so, what are you 
doing to correct them?
    Ms. Creedon. DOD does not intend to build a global biological 
surveillance network through the CBEP. DOD participates in bio-
surveillance as part of a larger U.S. Government biodefense effort with 
a focus on sustainability, building cooperative partners' national 
capacities, and encouraging broader regional cooperation and 
transparency. This CBEP effort must take into account select agents and 
other specific biological-related threats while other agencies are 
focused on protecting the public from infectious disease outbreaks. 
Although the security mission and the public health mission are not 
identical, the U.S. Government's national security entities--including 
the Departments of State and Defense--work in concert with the 
Departments of Health and Human Services, Agriculture, Commerce, 
Energy, and Homeland Security, the Federal Bureau of Investigation, the 
U.S. Agency for International Development, and a wide range of 
international and nongovernmental partners to address problems that are 
of shared concern. DOD has regular dialogue with its interagency 
partners and international organizations to ensure that we are building 
safe, secure capacity that is capable of mitigating and warning of 
critical biological events that could affect U.S. national security, 
and that we are doing so in ways that are harmonized and coordinated 
with broader bilateral and multilateral relationships with CTR program 
partners.

    7. Senator Hagan. Secretary Creedon, will the CTR program maintain 
this network over the long-term or will other health monitoring 
agencies sustain it?
    Ms. Creedon. DOD does not intend to build a global biological 
surveillance network through the CBEP. DOD participates in bio-
surveillance as part of a larger U.S. Government biodefense effort with 
a focus on sustainability, building cooperative partners' national 
capacities, and encouraging broader regional cooperation and 
transparency. Through this effort, the CBEP contributes substantial 
time and energy into establishing a unified voice within the U.S. 
Government that focuses on improving bio-surveillance. DOD has found 
ample opportunity for a shared commitment to strengthen cooperation to 
ensure that we effectively manage global and regional health risks 
through collaboration.

           TECHNICAL SKILLS AND SOPHISTICATION IN NEW REGIONS

    8. Senator Hagan. Director Myers, the CTR program in Russia and the 
former Soviet states concentrated on protecting nuclear assets and 
biological research laboratories all relying on a high degree of 
technological sophistication. As the CTR program transitions to 
Southeast Asia and Africa, are you able to use the same skill mix of 
people, training, and equipment, or do you have to retool for these new 
regions, and will you need the same level of technical sophistication?
    Mr. Myers. In order to effectively team with new partners in 
Southeast Asia and Africa, we need to first understand the unique needs 
and capabilities of each partner state. A key lesson we have learned is 
the need for varying levels of equipment and training within each 
partner at the various laboratories at the national and local levels. 
In some cases, the same equipment used in our programs in the former 
Soviet Union generally works at the national level labs with our new 
partners. Our goal at this level is to enable these partners to sustain 
this sophisticated equipment over the long-term. We expect that we may 
encounter situations where less complex and costly technology should be 
used to increase capability in bio-surveillance. Moving beyond national 
labs into regional or rural labs presents new, but manageable changes. 
Since we do not expect these facilities to have access to the same 
utility infrastructure and educational opportunities as the urban 
locations, we have to change or, as you put it, retool our approach. 
With our interagency partners we have identified more sustainable 
approaches to develop the human and technical capacity to safely detect 
and report dangerous diseases. In some cases, even simpler technology 
cannot be sustained. So, we work with the host nation to develop 
alternative ways to detect and report outbreaks. We are finding ways to 
provide the right level of technology that works best for each 
individual partner state. In addition to taking a closer look at 
technology, we examined the expertise of our people as we transition to 
new locations. We have added more biological and regional expertise to 
our Nunn-Lugar work force to address these evolving threats in new 
regions around the world.

                       CTR AGREEMENT WITH RUSSIA

    9. Senator Hagan. Secretary Creedon, the current CTR agreement for 
activities with Russia is set to expire in June 2013. Are there any 
issues or concerns at the present time that Congress should be aware of 
related to its renewal?
    Ms. Creedon. In Russia, the CTR program has a very successful 
legacy of developing the institutions, industries, and culture needed 
to secure and eliminate WMD and related technologies. Now that Russia 
has become a relatively wealthy nation, the CTR program is shifting its 
focus to cooperative activities designed to increase Russia's capacity 
to continue developing, sustaining, and upgrading those improvements 
with organic resources.
    Under this concept, the cost and scale of the CTR program's 
proposed activities in Russia will be much lower than in years past. 
But DOD believes that our continued engagement with Russia will be very 
valuable in securing and eliminating WMD and related technology, and 
that to continue this will require extending or renewing the CTR 
agreement with Russia. To this end, the United States is proposing to 
the Government of Russia that the U.S.-Russia CTR agreement be 
extended, which would also cover existing program work.

                           PROGRAM TRANSITION

    10. Senator Hagan. Deputy Administrator Harrington, for fiscal year 
2013, the Global Initiatives for Proliferation Prevention (GIPP) has 
been phased out and replaced by the Global Security through Science 
Partnership (GSSP) program. Can you please explain why the prior 
program was phased out and how this new program differs and why it is 
important?
    Ms. Harrington. In 2010, NNSA completed an all-source assessment of 
the expertise proliferation threat, including an extensive intelligence 
component. The assessment concluded that there is a significant WMD 
expertise proliferation threat that is no longer limited to expertise 
acquired by direct involvement in weapons programs, and that the threat 
is exacerbated by the increasing global availability of weapons-usable 
information and knowledge. The report concluded that a global scientist 
engagement program could help mitigate the evolving threat of WMD 
expertise proliferation and that the GIPP program should be reoriented 
to address this threat. Taking into account the recommendations of the 
reassessment, NNSA is planning to restructure its approach to scientist 
engagement in 2013 through a renamed activity, the GSSP program. 
Working through GSSP, NNSA will address the expanding threat of WMD 
expertise proliferation by: (1) refocusing and retargeting efforts 
geographically; (2) emphasizing engagements that build sustainable 
partnerships rather than providing assistance; and (3) using a whole-
of-government approach that leverages complementary NNSA and U.S. 
Government resources.
    The GSSP program will focus on creating opportunities for 
international partners to share information on scientific best 
practices, including the protection of WMD applicable knowledge and 
information. Targeted training and capacity-building efforts will be 
designed to strengthen scientists' abilities to recognize and stop WMD 
expertise proliferation. The promotion of targeted research and 
development initiatives also will be emphasized to mitigate the WMD 
expertise proliferation threat by fostering transparency and advancing 
nonproliferation objectives through scientist-to-scientist cooperation. 
NNSA's innovative approach to advancing nonproliferation goals through 
global scientist engagement is timely and tailored to an age where 
access to WMD-related technical know-how can spread effortlessly 
through the internet. The program is finalizing a country 
prioritization tool, and will present selected countries for 
engagement, along with discrete metrics designed to measure engagement 
progress, in July.

                        GREATEST THREAT CONCERN

    11. Senator Hagan. Director Myers, what is your greatest concern in 
terms of threats as the CTR program moves from Russia and the former 
Soviet states to South East Asia and Africa?
    Mr. Myers. The Nunn-Lugar CTR program has been a tremendous success 
in the former Soviet Union. By reducing from four to only one nuclear-
successor state, dismantling large portions of the former Soviet 
nuclear, biological, and chemical complex, and enabling Russia to 
better protect its remaining nuclear weapons against insider and 
terrorist threats, we have significantly reduced opportunities for 
potential proliferators. On the other hand, terrorists and potential 
state proliferators may take advantage of modern information age to 
weaponize dangerous, naturally occurring pathogens found in Africa and 
Southern Asia. This threat concerns me greatly. The expansion of the 
Nunn-Lugar program from the former Soviet Union to these parts of the 
world is intended to address this evolving threat. We are working with 
partner states in helping them to protect and account for the dangerous 
pathogens maintained at national and regional levels as part of their 
public health system. DOD works closely with our interagency partners 
in Southeast Asia and Africa, where terrorist groups are known to be 
active, in order to help the host nation with the security and safety 
of their biological laboratories. At relatively small cost, we are 
making these laboratories less attractive potential targets for 
terrorists who we know want to acquire such pathogens.
    We are also better integrating these new partners into regional and 
global health surveillance systems. We are also helping countries to 
prevent proliferation and the capability to interdict smugglers by 
training and equipping key partner agencies such as their coast guard, 
border guards, and customs. Preventing terrorists from acquiring 
biological weapons and helping the international community improve its 
bio-surveillance capabilities are critical investments for our national 
security.

                     UNENCUMBERED ENRICHED URANIUM

    12. Senator Hagan. Deputy Administrator Harrington, if fully 
licensed by the Nuclear Regulatory Commission, would General Electric's 
separation of isotopes by laser excitation process be considered a 
viable source of unencumbered uranium for defense purposes?
    Ms. Harrington. No. Enriched uranium produced by General Electric's 
separation of isotopes by laser excitation process is not available for 
defense purposes. The terms of the Agreement for Cooperation between 
the United States of America and Australia Concerning Technology for 
the Separation of Isotopes of Uranium by Laser Excitation provide that 
any material produced by this isotopic separation process shall not be 
used for any military purpose.

    [Whereupon, at 3:45 p.m., the subcommittee adjourned.]

                                 
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