[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 114-2]
A CASE FOR REFORM: IMPROVING
DOD'S ABILITY TO RESPOND TO THE PACE OF TECHNOLOGICAL CHANGE
__________
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JANUARY 28, 2015
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COMMITTEE ON ARMED SERVICES
One Hundred Fourteenth Congress
WILLIAM M. ``MAC'' THORNBERRY, Texas, Chairman
WALTER B. JONES, North Carolina ADAM SMITH, Washington
J. RANDY FORBES, Virginia LORETTA SANCHEZ, California
JEFF MILLER, Florida ROBERT A. BRADY, Pennsylvania
JOE WILSON, South Carolina SUSAN A. DAVIS, California
FRANK A. LoBIONDO, New Jersey JAMES R. LANGEVIN, Rhode Island
ROB BISHOP, Utah RICK LARSEN, Washington
MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee
JOHN KLINE, Minnesota MADELEINE Z. BORDALLO, Guam
MIKE ROGERS, Alabama JOE COURTNEY, Connecticut
TRENT FRANKS, Arizona NIKI TSONGAS, Massachusetts
BILL SHUSTER, Pennsylvania JOHN GARAMENDI, California
K. MICHAEL CONAWAY, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
DOUG LAMBORN, Colorado Georgia
ROBERT J. WITTMAN, Virginia JACKIE SPEIER, California
DUNCAN HUNTER, California JOAQUIN CASTRO, Texas
JOHN FLEMING, Louisiana TAMMY DUCKWORTH, Illinois
MIKE COFFMAN, Colorado SCOTT H. PETERS, California
CHRISTOPHER P. GIBSON, New York MARC A. VEASEY, Texas
VICKY HARTZLER, Missouri TULSI GABBARD, Hawaii
JOSEPH J. HECK, Nevada TIMOTHY J. WALZ, Minnesota
AUSTIN SCOTT, Georgia BETO O'ROURKE, Texas
STEVEN M. PALAZZO, Mississippi DONALD NORCROSS, New Jersey
MO BROOKS, Alabama RUBEN GALLEGO, Arizona
RICHARD B. NUGENT, Florida MARK TAKAI, Hawaii
PAUL COOK, California GWEN GRAHAM, Florida
JIM BRIDENSTINE, Oklahoma BRAD ASHFORD, Nebraska
BRAD R. WENSTRUP, Ohio SETH MOULTON, Massachusetts
JACKIE WALORSKI, Indiana PETE AGUILAR, California
BRADLEY BYRNE, Alabama
SAM GRAVES, Missouri
RYAN K. ZINKE, Montana
ELISE M. STEFANIK, New York
MARTHA McSALLY, Arizona
STEPHEN KNIGHT, California
THOMAS MacARTHUR, New Jersey
Robert L. Simmons II, Staff Director
John Wason, Professional Staff Member
Doug Bush, Professional Staff Member
Aaron Falk, Clerk
C O N T E N T S
----------
Page
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Smith, Hon. Adam, a Representative from Washington, Ranking
Member, Committee on Armed Services............................ 4
Thornberry, Hon. William M. ``Mac,'' a Representative from Texas,
Chairman, Committee on Armed Services.......................... 3
WITNESSES
Kendall, Hon. Frank, Under Secretary of Defense for Acquisition,
Technology and Logistics, U.S. Department of Defense........... 4
Ramsay, Lt Gen Mark F., USAF, Director, Force Structure,
Resources and Assessment, J8, Joint Staff...................... 6
APPENDIX
Prepared Statements:
Kendall, Hon. Frank.......................................... 45
Ramsay, Lt Gen Mark F........................................ 59
Thornberry, Hon. William M. ``Mac''.......................... 43
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
Mr. Peters................................................... 69
Questions Submitted by Members Post Hearing:
Mr. Cook..................................................... 78
Mr. Gibson................................................... 77
Mr. Rogers................................................... 74
Mr. Shuster.................................................. 75
Mr. Turner................................................... 73
A CASE FOR REFORM: IMPROVING DOD'S ABILITY TO RESPOND TO THE PACE OF
TECHNOLOGICAL CHANGE
----------
House of Representatives,
Committee on Armed Services,
Washington, DC, Wednesday, January 28, 2015.
The committee met, pursuant to call, at 9:33 a.m., in Room
2118, Rayburn House Office Building, Hon. William M. ``Mac''
Thornberry (chairman of the committee) presiding.
The Chairman. The committee will come to order. Let me
welcome all the members, witnesses and guests to the first
formal hearing of this committee in the 114th Congress.
Before we turn to our witnesses and the topic of the day,
Mr. Smith and I want to take a brief moment to welcome and to
introduce the new members of the committee. The brevity of our
introductions is no indication of the talent that the new
members bring. It is simply a function of our time limitations.
We are going to have votes here in a little bit, but I do want
to take a moment to welcome our new folks.
On the Republican side, there are six new members, starting
with Sam Graves, who represents the Missouri's Sixth District
and is joining us after completing his term as the chairman of
the House Small Business Committee. He has worked with us on
those issues before and will be a huge asset as we continue to
work through a lot of the issues that we are going to be
talking about today.
Next is Ryan Zinke, who represents Montana's At-Large
District, a 23-year-old veteran of the Navy and former Navy
SEAL [Sea, Air, Land] commander with combat tours in Iraq. So
he brings lots of experience, but I am told his most important
role is that of a proud Navy dad, which we all understand.
Elise Stefanik is representing New York's 21st District and
Fort Drum, home of the 10th Mountain Division. The youngest
woman ever elected to the House, she also knows her way around
Washington, having served in the Bush White House and at the
Foreign Policy Institute.
Martha McSally represents the Second District of Arizona,
home of Fort Huachuca and Davis Monthan Air Force Base. She is
a retired Air Force colonel, a combat aviator, and the first
woman to command an A-10 squadron, and flew multiple missions
in Iraq.
Steve Knight represents California's 25th Congressional
District. Born in Edwards Air Force Base, he has served in the
Army, also as a Los Angeles police officer and as a State
senator. He has a wealth of knowledge on the rich aviation
tradition of that district, which we will take advantage of.
And finally, Tom MacArthur represents southern New Jersey's
Third District, home of Joint Base McGuire-Dix. A former mayor
of Randolph, New Jersey, Tom has over 30 years of business
experience in the insurance industry. And we certainly look
forward to putting those skills to work here at the Armed
Services Committee.
So let me welcome the six new members on our side and yield
to the distinguished ranking member, Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman.
We have actually nine new members on our side of the aisle.
I want to welcome them. We have two who are veterans of the
Congress joining the committee and then seven new members.
Tim Walz is our first member from Minnesota. He is
currently serving his fourth term representing Minnesota's
First Congressional District. He enlisted in the Army National
Guard at the age of 17 and retired 24 years later as a command
sergeant major and has done a ton of work on veterans issues,
served on that committee previously. And we have worked closely
together.
Beto O'Rourke is from Texas. He was elected to represent
the people of the 16th District of Texas in November of 2012.
Prior to his congressional service, Beto O'Rourke served two
terms on the El Paso City Council and represents Fort Bliss in
El Paso.
Donald Norcross from New Jersey was sworn in to the 113th
Congress to represent New Jersey's First Congressional
District. He previously served in both the New Jersey General
Assembly and State Senate, where he developed a reputation as
an effective bipartisan reformer. Those are, you know, two
words--``bipartisan'' and ``reformer''--that will fit well on
this committee.
So, welcome.
I think some of our other Members are not here, but I will
go ahead and introduce them in absentia anyway.
Ruben Gallego of Arizona is the son of Hispanic immigrants,
a veteran and a community leader. He was the first in his
family to attend college and later joined the Marine Corps,
serving in Iraq with the well-known combat unit Lima 3/25.
Mark Takai of Hawaii was elected to Hawaii's First
Congressional District, which was vacated when Colleen Hanabusa
decided to run for the United States Senate. He serves in the
Hawaii Army National Guard as a lieutenant colonel and took
part in Operation Iraqi Freedom in 2009.
Gwen Graham represents Florida's Second Congressional
District. She is the daughter of Bob Graham, former United
States Senator and Governor. She worked for her local school
district and is also proud to represent Tyndall Air Force Base
in the Second Congressional District.
Brad Ashford of Nebraska represents Nebraska's Second
District, and from 1987 to 1995, he was a judge in the Nebraska
Court of Industrial Relations and then served in the State
Senate until he was elected to Congress.
Seth Moulton of Massachusetts represents Massachusetts'
Sixth Congressional District; graduated from Harvard in 2001
with a bachelor of science in physics. He joined the United
States Marine Corps; served four tours in the Iraq War; and
between those tours, earned his master's degrees in business
and public administration in a dual program at Harvard
University.
And last is Pete Aguilar, who represents California's 31st
District. And from 2010 to 2015, he served as the mayor of the
city of Redlands. Prior to that, he was the youngest member
ever to serve in the Redland City Council's 140-year history.
So we have a lot of new members. Welcome to the committee.
I look forward to working with all of you.
And, with that, I yield back.
OPENING STATEMENT OF HON. WILLIAM M. ``MAC'' THORNBERRY, A
REPRESENTATIVE FROM TEXAS, CHAIRMAN, COMMITTEE ON ARMED
SERVICES
The Chairman. I thank the gentleman.
And I want to just say again how much I appreciate the
talent, the experience and the dedication that all the new
members on both sides of the aisle bring to this committee. We
are going to be--I can already tell, you are going to enhance
our deliberations and decisions, and I am really glad to have
you all here.
It is also true there were many more members who wanted to
be on this committee than we had room for, but we definitely
got the cream of the crop.
Let's turn now to the subject of our hearing today. The
subject is technological superiority, how the U.S. is doing and
how we can ensure that we have the technological edge we need
for the years to come.
And I would ask unanimous consent that my full opening
statement be made part of the record.
Without objection, so ordered.
I would just say the Constitution puts on the Congress the
responsibility to provide and maintain, to raise and support
military forces that can defend the country. And as we try to
do that in this day and time, we have a number of challenges,
one of which is that we face more different kind of challenges
than maybe we ever have before. Another is that technology is
moving incredibly quickly. And a third is that some potential
adversaries or competitors are putting a lot of time, effort,
and money into creating vulnerabilities for us.
And then another challenge can be our own system. And so
that is part of the reason I think it is important for us to
look, as we have been this week, at what is happening in the
world and then look at what we can do to improve things, and
that is part of the reason defense reform is going to be a
significant part of our agenda.
So I really appreciate the witnesses we have today: Under
Secretary of Defense Frank Kendall, who is leading the
Department's efforts in a number of respects in this topic; and
also General Ramsay, who is the Joint Staff Director for Force
Structure, Resources and Assessment.
It just seems to me the key question before us is: What
should we in Congress do to ensure that America has the
technological superiority we require so that we meet the
Nation's needs and the demands of our time?
I would yield to Mr. Smith.
[The prepared statement of Mr. Thornberry can be found in
the Appendix on page 43.]
STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM WASHINGTON,
RANKING MEMBER, COMMITTEE ON ARMED SERVICES
Mr. Smith. Thank you, Mr. Chairman.
I appreciate you holding this very important committee.
I welcome Mr. Kendall and General Ramsay. And this is an
incredibly important topic. Acquisition reform has always been
a challenge at the Department of Defense [DOD]. We are always
seeking ways to improve it, but I think it is particularly
important in the environment that we find ourselves in, which
combines two unfortunate elements. One, an expanding and very
confusing threat environment: We cannot say that things are
getting less threatening or we have fewer national security
challenges in the world. It is going in the opposite direction,
and at the same time, they are incredibly complex.
And that is combined, of course, with a shrinking budget
and the challenges of sequestration and the challenges of the
reductions in the budget, and also, I might add, the challenges
the government shutdown, the CR's [continuing resolutions].
Basically from one month to the next, you have frequently, over
the course of the last 4 years, not known how much money you
were going to have to spend, or where. So, in that type of
environment, the better we spend that money, the better off we
are going to be.
So I know this is something that has been a huge priority
for Mr. Kendall since he joined the Department of Defense,
figuring out ways to buy equipment more quickly, more
efficiently, make sure we get more out of it, because we have a
history over the last decade that is not pretty when it comes
to a lot of money being spent in ways that did not turn out
well, wasted money on a variety of different programs.
I want to particularly thank Mr. Thornberry for his
leadership on this issue. It is something he has worked on for
a long time on the committee. I think he understands it better
than anybody and is perfectly positioned to lead the effort to
try to reform our acquisition process.
And with that, I look forward to the witnesses' testimony,
the questions and answers from the panel.
I yield back.
The Chairman. I thank the gentleman.
Again, Mr. Kendall, thank you for being here. The floor is
yours.
STATEMENT OF HON. FRANK KENDALL, UNDER SECRETARY OF DEFENSE FOR
ACQUISITION, TECHNOLOGY AND LOGISTICS, U.S. DEPARTMENT OF
DEFENSE
Secretary Kendall. Thank you, Mr. Chairman.
Chairman Thornberry, Ranking Member Smith, members of the
committee, I would like to begin by thanking the committee for
its willingness to work with the Defense Department on ways to
improve the productivity and effectiveness of defense
acquisition.
I request that my written statement and the accompanying
materials, which provide details on our acquisition improvement
efforts, be admitted to the record.
The Chairman. Without objection, so ordered.
Secretary Kendall. The acquisition improvement initiatives
that the Department undertook beginning in 2010, when Dr.
Carter was Under Secretary for Acquisition, Technology and
Logistics and I was his principal deputy, initiatives that we
called Better Buying Power, have evolved as we have learned
from our experience and gathered data on the effectiveness of
our policies.
We are currently close to issuing guidance implementing
what we call Better Buying Power 3.0, released last year in
draft; 3.0 builds upon core aspects of earlier versions that
emphasize strong performance incentives, competition, and
professionalism in our acquisition workforce, and close and
continuous interaction with acquisition and requirements
community, which is represented here today by General Ramsay,
the J8 from the Joint Staff.
Better Buying Power also emphasizes elimination of
unproductive bureaucracy. The rules our program managers must
follow are still too complicated and burdensome. I know the
committee leadership shares this view, and I am happy to say
that the administration will soon formally submit several
legislative proposals designed to address this problem to both
the House and the Senate Armed Services Committees. I am
providing those proposals informally to the committee today.
The Department looks forward to working with the committee on
these proposals.
Better Buying Power 3.0 continues the core aspects of
earlier versions, which shifts our focus towards technical
excellence and innovation. It is a response to the
technological superiority concerns that the chairman mentioned.
We have provided the members with a 1-page summary, which you
should have in front of you.
As I have testified to before this committee previously, I
am very concerned about the increasing risk of loss of U.S.
military technological superiority. I was also recently asked
to provide an input to the Senate Homeland Security and
Government Affairs Committee on areas in which the Congress
could help the Department improve acquisition outcomes. I would
like to summarize my submission for this committee.
Number one, and number one by a very wide margin, end the
threat of sequestration. As the leadership mentioned, this is a
huge problem for the Department. The uncertainty associated
with our ability to plan without knowing what our future
budgets would be with any confidence and the inadequate
resources that sequestration levels would provide are enormous
problems for the Department.
Number two, continue to support the Defense Acquisition
Workforce Development Fund. This fund is a valuable tool for
improving the professionalism of the acquisition workforce.
Number three, work with the Department to simplify the
rules we already have. Mr. Chairman, Ranking Member, and I have
discussed previously, we can eliminate a great deal of
unproductive overhead and confusion by simplifying the rules
governing acquisition today. The recommendations we are
providing to the committee go a long way in that direction, and
hopefully, we will be able to implement those.
Number four, avoid highly restrictive rules that limit
Department freedom of action. The Department implements an
almost infinitely varied set of business arrangements with
industry, and we need the flexibility to tailor our contracts
consistent with all the various types of situations that we
face, which cover a very wide set of different options.
Number five, reduce the counterproductive incentive to
obligate funds on a fixed schedule. In any negotiation, time is
a factor that works to one side's advantage. Rigid time-based
obligation requirements automatically work against the
Department in our negotiations.
Number six, allow the Department to hold a management
reserve to apply to programs that realize risks. Under current
practice, programs that are performing well often have to be
the sources of funds to repair poorly performing programs.
Number seven--and I would use this as the other bookmark,
if you will, to the set of inputs--help the Department improve
the professionalism of the government workforce. I believe this
area has the greatest potential over the long term of improving
acquisition outcomes. I have worked on and led some well-led
and some not-so-well-led programs in industry and in
government. Leadership and professional skills honed over
decades do matter, perhaps more than any other factor that we
can influence.
Again, I would like to thank the committee for its
cooperation and support. Our warfighters and taxpayers deserve
the best performance we can possibly achieve from the
acquisition system. I know you are all equally committed to
that goal. Thank you.
[The prepared statement of Secretary Kendall can be found
in the Appendix on page 45.]
The Chairman. Thank you.
General Ramsay, do you have an oral statement you would
like to give or----
General Ramsay. I do, Mr. Chairman. And if I could also
request that my written statement be submitted for the record.
The Chairman. Without objection.
STATEMENT OF LT GEN MARK F. RAMSAY, USAF, DIRECTOR, FORCE
STRUCTURE, RESOURCES AND ASSESSMENT, J8, JOINT STAFF
General Ramsay. Chairman Thornberry, Ranking Member Smith,
and distinguished members of the committee, I appreciate the
opportunity to testify before you today. As the Director for
Force Structure, Resources and Assessments, I provided insights
in my written statement into the Joint Staff's role in
requirements generation and capabilities development process,
specifically highlighting the close interaction and linkages
between requirements and other Department process to include
the defense acquisition system that Mr. Kendall oversees.
The Joint Requirements Oversight Council, the JROC, is
charged to identify, assess, and prioritize military capability
needs. And the Joint Capabilities Integration and Development
System, or JCIDS, is the process that enables the JROC to meet
our statutory responsibilities.
I want to thank the work of this committee as well as the
Senate Armed Services Committee for providing reforms in recent
years that added emphasis on our analysis of risk, cost, and
schedule very early in program development; established a
deliberate, urgent, and emergent requirements lanes to better
respond to our warfighter operational user needs; and to enable
us to consolidate guidance documents, streamline our
procedures, and mandate shorter document length and staffing
timelines.
These reforms also shaped the JROC into a lean
decisionmaking body chaired by the Vice Chairman of the Joint
Chiefs of Staff, with the service Vice Chiefs and Assistant
Commandant of the Marine Corps serving as statutory members.
The combatant commanders also participate based on interest in
each program.
Statutory advisors include Mr. Kendall as well as the Under
Secretaries of Defense for Policy and the Comptroller, the
Director of Operational Test and Evaluation, and the Director
of Cost Assessment and Program Evaluation.
In the execution of the JROC's duties, we work very closely
with all stakeholders to manage an agile and responsive
requirements process that is intertwined with other key
decision processes across the Department of Defense.
Our ultimate goal in the JCIDS process is to ensure that we
remain agile and responsive and innovative so the Department
can develop and deliver operationally and cost-effective
capabilities to the joint force to help achieve our Nation's
strategic and military objectives.
Thank you, and I look forward to your questions.
[The prepared statement of General Ramsay can be found in
the Appendix on page 59.]
The Chairman. Thank you.
And let me just say, I very much appreciate the working
relationship that we have had over the past year or so, Mr.
Kendall, with you and your team.
But also, Mr. Smith, this is--he has been integral to
everything we have tried to work on. This has been completely
bipartisan, as well as working with the Pentagon, as well as
working with the Senate. And I think all of us recognize that
it is going to take all of us collaborating, working together
to improve this system because it very much is like changing an
airplane engine while the engine is in flight. We still have to
defend the country while we look to make improvements.
And I particularly appreciate, Mr. Kendall, you sending up
legislative proposals ahead of the budget. I think that is
something that is unusual. I think it shows the seriousness
with which at least you and the folks at the Pentagon take this
issue. So, thank you. That helps us get a head start.
The one question I want to pose to you is this: As you
know, we have had some classified and unclassified sessions for
members this week about, where are we? Technological
superiority: Are we ahead? How much? Are we losing it? Just
kind of the state of technology, especially versus near-peer-
type competitors.
We obviously can't talk specifics in an open session, but I
am just wondering how you would characterize where we are and
what concerns you for the American people. Kind of in layman's
language, where do you think we are as far as the country's
technological superiority and what concerns you?
Mr. Kendall. Thank you, Mr. Chairman.
We are at risk, and the situation is getting worse. I came
back to the Pentagon in 2010, after being away for about 15
years. And the intelligence estimates when I left in 1994 were
that China was really not much of a problem for us, but in 10
or 15 years, they possibly could be, based on their economic
rate of growth at that time.
I came back, and the intelligence estimates were correct.
And I became, I think it is fair to say, alarmed as soon as I
started seeing technical intelligence reports on China's
modernization programs. And I can say the same of Russian's
modernization programs as well.
We came out of the Cold War with a very dominant military.
We demonstrated that military conclusively in the First Gulf
War, and we have used it very effectively against any
conventional force in the period since. Since 2001, we have
been involved in counterinsurgency and counterterrorism
campaigns, which are very different kinds of threat.
No one observed more carefully the dominance that we
demonstrated in 1991 than the Chinese. And we demonstrated what
Bob Work calls the ``second offset strategy,'' which is the
capability of precision munitions, in particular, but also
stealth, networked forces, and wide-area surveillance, and
technologies, which in an integrated fashion, gave a very
dominant capability to our forces.
People have had a long time; that was long time ago. People
have had quite a bit of time to think about and to do things
about how to defeat that force. And what I am seeing in foreign
modernizations, again, particularly China's, is a suite of
capabilities that are intended clearly, to me at least, to
defeat the American way of doing power projection, American way
of warfare, when we fight in an expeditionary manner far from
the United States. Our systems depend upon what I would call a
few high-value assets, and I would start with space-based
assets, satellites, which in relatively small numbers provide
important functions for intelligence, targeting, and
communications; and I would include aircraft carriers, which
are the basis for our naval power projection, which we have a
small number; and airfields, which are the basis by which the
Air Force is able to project power, using mostly fighter
aircraft.
Those targets that those represent to an adversary are
finite. They are there in limited numbers. And the precision
munitions revolution that we demonstrated has been emulated by
others. So if I were to worry about one aspect of the threat, I
would start by talking about missiles, both ballistic and
cruise missiles. They have attacked those high-value assets.
I was an Army air defender years ago. And our best air
defense systems could get maybe a 70 percent probability of
kill; if you were good, maybe a 90 percent probability of kill
against one incoming airplane or missile. It doesn't take much
to do the math to figure out that if you send a large number of
missiles against a single asset that you are going to get some
through. And once those missiles become highly accurate and can
kill the thing that you are trying to attack if they penetrate,
then you have a problem. That is the change that has occurred.
And we pioneered that change, but it has now been emulated by
others.
And, without saying too much about this, the Chinese, in
particular--and, again, to a lesser extent, the Russians--are
going beyond what we have done. They are making advances beyond
what we currently have fielded, and it is designed to threaten
largely those various high-value assets.
Now, the Department is recognizing this. Dr. Carter, who is
here and will be next week, I think, and I have talked about
this briefly. He understands it. Bob Work understands it.
Secretary Hagel understands it. So we have been doing some
things to try to address this problem, but we also have global
commitments, we also have readiness concerns, and we also have
the threat of sequestration in front of us. So this is a
serious problem for the country. And I gave testimony here last
year where I talked about the U.S. being challenged in an
unprecedented way. It is not just missiles. It is other things,
such as electronic warfare capabilities; it is antisatellite
capabilities, a spectrum of things to defeat our space systems.
It is a number of things which I think are being developed very
consciously to defeat the American way of projecting power, and
we need to respond to that.
The Chairman. Well, thank you. I just think it is important
to emphasize the need to improve our acquisition process is not
just about saving money; it is about this problem of change
that is going faster and faster that we are having trouble
keeping up with.
Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman.
Just one straightforward question on acquisition reform. A
lot of it is what goes on within the Pentagon, the culture of
the decisions that are made, you know, all kinds and
restructure, but from a legislative standpoint, as we here get
ready to try to put together an acquisition reform package,
what authority don't you have that you would like to have? What
changes in the law can we give you that would give you the
flexibility to do some of the things that you and Mr.
Thornberry just talked about?
Secretary Kendall. Thank you, Ranking Member. Congressman,
I generally have the authorities that I need.
I don't think our problem is authorities. I think our
problem has more to do with implementation of the things that
we have. And that is why I emphasize professionalism in our
workforce so much. We need to give our people the tools and the
training, the experience they need to do their jobs well. And
then we need to get out of their way a lot of things that make
it harder for them to do their jobs.
I spoke to Navy Admiral Dave Lewis a couple of years ago,
he is a PEO, program executive officer, with the Navy. And he
told me that he was most effective as program manager when he
was running the DDG-51 Destroyer Program when he had a
multiyear contract, because he could focus entirely on managing
that contract and managing the performance of industry to do a
better job of delivering product to the Navy. And what was
different, of course, in the multiyear contract environment
that he was in was he didn't have to come in for repeated staff
reviews all the time that took up all of his time and
distracted him from actually doing his job.
I took that to heart, and I think we really need to work
hard to relieve some of the burdens that we are imposing on our
program managers and our acquisition workforce. They are well-
intentioned. And a lot of the recommendations that we have
prepared and brought over to the committee go along those
lines. They relieve some of the burdens that are on our people.
Developing the professionalism of the workforce is a task
that takes time. And I want to compliment our workforce. We
have, I think, an exceptionally capable and professional
workforce, but it can be improved. We have a workforce where
the demographics are a bit troubling. We have a lot of people
close to retirement and a lot of young people who just came in,
and kind of a bathtub in the middle. We have to manage our way
through that. So we need tools to build up that workforce and
make it more capable over time. And we would like the help of
the committee on that in particular.
Mr. Smith. Yeah, one of the complaints that we hear all the
time from industry in terms of, you know, specifically going
over budget on projects is the amount of overseers, regulators
that they have to deal with on a day-in-and-day-out basis, that
that drives a lot of their cost. I have talked to a lot of
people about this in the think tank world, and they say, you
know, true or not, live with it, because it is not changing.
But it seems to me like if it is something that is that big a
problem, we ought to focus on it. And their argument is they
spend more time trying to justify every decision they are
making than actually doing their work.
Do you see this as a problem? Are there too many
bureaucrats, you know, overseeing the making of our military
equipment in a duplicative fashion that is not actually
helping?
Secretary Kendall. The short answer is, no, but I think we
can improve in that regard. We have been working for the last
few years with our Department's auditors, who don't report
directly to me but have worked with me very closely on this.
There is a very large backlog of audits that needs to be done.
That basically is a problem for us.
There is a problem with using statistical audits as opposed
to complete audits and finding ways to be more effective on how
we focus the resources that we have. The Defense Contract
Management organization--that does report to me--supervises our
contractors. And I think we have to strike a balance there. I
don't think we are vastly off on that. I don't think that is a
core problem for us. We recover quite a bit of money through
our auditing process each year, much more than the auditing
costs us. We do find quality problems, and you will read
reports about those occasionally in the press. And so we do
have to have some level of that.
I don't think our balance is all that far off, but I do
think we can improve.
Mr. Smith. Okay.
Thank you, Mr. Chairman. I yield back.
The Chairman. Thank you.
Mr. Wilson.
Mr. Wilson. Thank you, Mr. Chairman.
And thank both of you for being here today.
General Ramsay, the acquisition workforce is actively
managed, including providing a number of incentives and career
path opportunities. How does that compare with the requirements
workforce? Do you have any recommendations for improving the
career management of the requirements workforce?
General Ramsay. Thank you, Congressman Wilson.
Thanks to the work of this committee about--about, I think
it was 2007--there was statutory requirement, just as the
acquisition workforce, for a requirements workforce that was
more professional. So we now have a five-level certification
program required for all the folks who touch requirements,
whether they are military or civilian, to go through Defense
Acquisition University. One of those programs is for senior
leader requirements. I went through that program 2\1/2\ years
ago when I took that job. So we think we have got a very robust
program that goes back now. We implemented this starting in the
beginning of fiscal year 2008, so the workforce we have in
place is much--they are a professional workforce. They
obviously rotate out probably more than the acquisition
managers do because many of these folks are wearing uniform
like I am. But the folks that come into this process have
various certification process. So the short answer is I think
we are right where we need to be, and we are getting better
with time.
Mr. Wilson. That is encouraging.
And, Mr. Kendall, thank you for raising concerns about
threats to our country. And, we are not just talking about
money; we are talking about being technologically ahead to
protect the American people, and thank you for raising that.
Additionally, we do see that the Small Business Innovative
Research program as an important tool of the Department to tap
into vital innovative technologies from small businesses. What
actions can the Department take to improve the utilization of
the program, especially the use of Phase III's integrated into
a larger acquisition program of record?
Secretary Kendall. Good question, Congressman. We are
looking at that program. It has been a very successful program.
We get fairly good transition rates, but there are some issues
with it. The amount of time it takes to get an award, and
getting from one phase to the other, and then getting into
where you are actually producing things has been a problem
historically.
We are looking at--if you look at the sheet of paper you
have in front of you, under ``Better Buying Power 3.0,'' we are
looking at all of the different categories of research and
development spending that we have, and I have teams working
those right now, including things like Small Business
Innovative Research and Rapid Innovation Fund, for example, and
our other areas of contract at R&D [research and development]
as well as independent R&D that industry does. We need to try
to get as much as we can out of each of those individual pots
of money, if you will. So we are looking at that hard now, and
we will be coming back with some recommendations in the next
few months on that.
Mr. Wilson. Well, good program, and however we can improve
it, we appreciate that.
In meeting with service acquisition executives earlier this
week, they recommended spending more time at front end of a
program, such as thorough market research, modeling, and
simulation for trade space analysis, developmental planning,
and technology maturation. They described a process where more
time would be spent early in the process but which would save
time overall.
Do you support that recommendation? What recommendations do
you have to make the process to do a better job?
Secretary Kendall. I do agree with that. I think it is very
important we take the time upfront to make sure we have got it
right, particularly in a time of scarce resources, as we cannot
afford new starts that are false starts. When we start a
program, we should be reasonably confident that we are going to
take it through to completion and field the capability. And
doing the system engineering upfront, doing the requirements
tradeoffs upfront, making sure the programs are affordable,
these are all very, very important. Making sure the business
strategies and risk mitigation plans are appropriate is
incredibly important. So I agree with that comment. That is one
of the things we are trying to do.
Mr. Wilson. And you have already referenced this, but it is
so important, on page 3 of your testimony, quote, ``Russia and
others, such as Iran, are also fielding precision missiles and
other capabilities that threaten our power projection
capabilities,'' end of quote.
And I think, again, if you could restate your concerns, the
American people need to know this.
Secretary Kendall. The concern is that we are dependent
upon a very small number of what I call high-value assets to
implement conventional military power, generally far from the
shores of the United States. And as you get closer to someone
else's homeland, their ability--they have certain advantages at
that point. They have, obviously, land-basing for their
systems. They can have mobile systems that are hard for us to
target. We have a small number of assets which are carrying the
bulk of our power projection capability forward. They are
either Air Force bases that are already in the region, or they
are carriers and carrier strike groups that are coming forward.
And if you can target those and attack them with precision
missiles, then you have a significant advantage. That is the
situation we are increasingly facing.
Mr. Wilson. Thank you very much.
The Chairman. Thank you.
Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman.
And thank you to the witnesses.
Last Saturday, one of the drumbeat of snowstorms up in New
England, all of my events were cancelled, and I finally got a
chance to sit down and watch the PBS special on Hyman Rickover,
which, again, I would encourage all members to review because
it really is squarely in the sweet spot of what we are talking
about here today. And he, obviously, was an innovator and a
maverick. That is almost an understatement. He, obviously--the
movie--the documentary is more about almost his struggles with
the bureaucracy than it was with the technology of building
nuclear-powered aircraft carriers and submarines.
And two of your initiatives are focused on innovation: One
is the DARPA [Defense Advanced Research Projects Agency]
initiative, and then is the acquisition reform. And I was
trying to visualize reading that how Hyman Rickover, who I
think has still provided us with undersea dominance based on
what he did 60 years ago, you know, would function today and
how you see that as sort of trying to nurture that kind of
amazing creativity that will help us with this technological
gap that we are facing.
Secretary Kendall. Rickover established a lasting culture
and tradition in the Navy, a nuclear power Navy, which I think
everyone should admire. It is a terrific organization. He was
also very much a person who is--a very strong engineering
background, very strong leadership model. I think we could
emulate a lot of that, and we should be. When I talk about
developing professionals, he is the sort of person that I have
in mind.
Everybody can't be a maverick, obviously, but you do have
to--I find myself constantly trying to beat back the
bureaucracy, which has a tendency--if you have looked at any of
the literature on bureaucracies and how they grow, there are
certain rules where all bureaucracies sort of self-perpetuate
and increase their size over time. And it is just a constant
struggle to push back on that and to try to make sure that
people focus on substance as opposed to form in the things that
we do. It is one of the reasons we are asking for some of the
legislative reforms that we are asking for, to try to get rid
of some of those bureaucratic tools and replace them with
things that are more substantive. So I generally agree with
your point about that. It is consistent with my point about
professionalism and the importance of leadership.
Mr. Courtney. So can you talk about the DARPA piece of your
proposal in terms of where that creates that space?
Secretary Kendall. Yeah. I think you are referring to what
we call the Aerospace Innovation Initiative. Yeah, this will be
in our budget, and I have been authorized to talk about this a
little bit even though the budget is not out yet.
The Aerospace Innovation Initiative is consistent with one
of the Better Buying Power 3.0 initiatives on prototyping and
experimentation. And what it will be is a program that will be
initially led by DARPA, but it will involve the Navy and the
Air Force as well. And the intent is to develop prototypes for
the next generation of air dominance platforms, X-Plane
programs, if you will. To be competitive, the Navy and the Air
Force will each have a variant that is focused on their mission
requirements. There will be a technology period leading up to
the development of the prototypes, and it will be consistent
with what we talked about earlier. We will do the upfront work
to make sure you are doing the right thing but then reduce the
lead time to having the next-generation capabilities. So this
is the--this will lead to the systems that will ultimately come
after the F-35, essentially.
Part of the program is an airframe oriented program with
those X-Plane prototypes. Part of what we put under the
Aerospace Innovation Initiative is a jet engine development
program for the next generation, also competitive prototypes
for the next-generation propulsion.
Now those are going to be two core parts of getting to the
next generation of air dominance. There are other elements of
the Department's program that are laid out that get to other
aspects, but that is what the Aerospace Innovation Initiative
is.
Thank you for asking about it. I think it is an important
initiative. It falls under a broader Defense Innovation
Initiative that Secretary Hagel announced last fall, which
covers our business processes, operational concepts, the way we
train people, and a number of other things, but it is
consistent with that approach.
Mr. Courtney. Thank you. Again, one sort of fun fact in
that documentary was that it took 5 years from the moment we
had an atomic-powered light bulb to the launching of the
Nautilus as a nuclear-powered submarine, which is just--you
know, it is hard to even imagine. The Navy was telling him it
was going to take 50 to 60 years to develop a nuclear-powered
submarine, and he did it in really less than 5 years. It is----
Secretary Kendall. If I can respond to that. I have been
asked by--not too long ago--by a reporter if I thought the
Department was taking too much risk. I think we are not taking
enough risk. And one of the things that Rickover did in that
program was he did it in a managed, you know, professional way.
But we can't expect our programs to execute perfectly. If
we are going to be the number one country in the world
militarily, we have to do things no one has ever done before,
and that inherently involves risk. We can't--if we take the
time to reduce every risk to zero, we will never get there. We
have got to be willing to accept risk in our programs and then
deal with the fact that, because of that, some of our
development programs are going to have overruns and schedule
slips. It is a part of the process. It is part of the
development process. So expecting perfection is really the
wrong way for us to be thinking about development.
The Chairman. I appreciate that exchange. Risk and
leadership, two keys to this whole thing. That was very, very
interesting.
Mr. Nugent.
Mr. Nugent. Thank you, Mr. Chairman.
And I want to thank our two panelists today. It is always
great to hear from you. I think you usually do it in a way that
we can understand, which is a good thing.
This is really a two-part question, and it is for both Mr.
Kendall and General Ramsay. What are the lessons learned from
the Department's rapid acquisition program and what extent can
those lessons be applied to accelerate other DOD acquisitions?
And the second part of that question is, from a
warfighter's perspective, are they connected well enough to
allow to get the needs that they have to get actually an
acquisition? And then when it gets to acquisition, a lot of
times, you know, we are trying to get to a hundred percent
perfect, I think you touched on it, when 80 percent or 90
percent at least to get it out to the warfighter's hands would
be appropriate. And as one of the things that we have seen with
DOD acquisition is they do a really good job when you start
building incrementally onto a program, and when you try to get
to 100 percent, that just stalls programs, I think.
And so it is really a two-part question. I would love to
hear your answer.
Secretary Kendall. I think, like a lot of other things, the
secret is to have the right balance. The rapid acquisition
programs, I think, have been very successful. I look at MRAP's
[mine-resistant ambush protected vehicles], for example, as a
classic example there. And what we have done there is focus on
the essentials of what we are trying to provide to the
warfighter and go for that and get that done as quickly as
possible. So we have accepted risk in those programs. And we
haven't done perfect programs, but we have done programs that
worked and saved lives and were very effective on the
battlefield.
I chair a group now called the Warfighter Senior
Integration Group, which is in very close touch with our people
doing operations, our response to what we call urgent
operational needs. And we use rapid acquisition approaches to
address those needs. So where they are applicable, they work
very well.
I am going to--just to be--on the other hand, okay, there
are programs where that isn't the right way to go about it.
Mr. Nugent. Sure.
Secretary Kendall. And I can think of some programs where
we have done rapid acquisition type demonstrators, prototypes,
and then try to take them to production and field them, without
having done the things we need to do to make sure those are
reliable and will really work in the environment over a period
of time. So that is a little different than when you are trying
to fight a warfighter and do something right now in one
specific environment. So, again, the secret is balance, but the
programs you cite I think have been very effective.
And one of the things we are trying to do is preserve that
capability. As our operations in Iraq and Afghanistan have
drawn down, we have tried to find ways to institutionalize that
rapid acquisition approach.
I published just recently our DOD 5000.02 instruction,
which is our guidebook for all defense acquisition, basically.
It is kind of the Bible for defense acquisition. And we
included a rapid acquisition model in there, and a couple of
approaches where urgency is really what drives you, and there
you cut corners, you take risks, you do things you wouldn't do
otherwise, you cut away the nonessential requirements, focus on
the essential ones to try to get the capability out as quickly
as possible. So I appreciate your comment. That has been an
effective program. And when it is appropriate, we want to
continue to do it.
General Ramsay. Congressman, I will just piggyback on Mr.
Kendall's comments by saying from my 2\1/2\ years' experience,
the authority and the guidance that this committee gave us back
in NDAA [National Defense Authorization Act] 2011 has been
absolutely wonderful to support the warfighter.
I would offer kind of two vignettes to answer both of your
questions. We are really good at adapting programs we have, and
we are really good about delivering those things that truly are
deliverable in a very short amount of time. So MRAP, Mr.
Kendall used that example.
Let me give you an example of both of those. Obviously, one
of the biggest areas that we have been addressing for the past
decade is the area of permissive ISR [intelligence,
surveillance, and reconnaissance], so the MQ-1, MQ-9 platform,
the Reaper being the MQ-9. One of the things we figured out was
they are not an inexpensive aircraft. They are a phenomenal
capability. And everybody wants them; the warfighters want
them.
So sometimes the solution is not more of the same;
sometimes it is modify what you have. So one of the things we
have done through the rapid acquisition process is adding
extended-range kits to the MQ-9s we have. We continue to buy
more of those. So eventually the fleet will be MQ-9, more
capable platform, made even more capable through the joint--
this rapid acquisition process.
The second thing I will offer is when you take something
that is developable in a short amount of time for the
warfighter, we can do that very fast. So a great example just
in the last few months has been with the Ebola crisis in West
Africa, one of the things we were asked to do by the government
was to come up with a way to transport our own people to
isolate them the way you see a commercial company out of
Atlanta. They do that now. We went from, ``I need something,''
to funding it, finishing the requirements, developing it, and
fielding it in about 3 months. And that is the transportable
isolation system.
So where it is doable and manageable in a very short amount
of time, we can deliver that very fast through the process.
And, as Mr. Kendall says, we can cut through a lot of red tape.
Mr. Nugent. Well, I thank both of you for your answers.
And I yield back.
The Chairman. Mr. Peters.
Mr. Peters. Thank you, Mr. Chairman, and thank you for
having this hearing. It comes at an important time.
As you have outlined, these threats are expanding. They are
new, and they are essentially technological. And yet one of the
biggest problems we have here in procurement is harnessing the
powers of our own technology to get that into the--to get the
innovation that is happening here in the United States into the
military. And so this is not just an issue of management or
budget, but it is an issue of security. And it is my
observation that we really just can't have this friction among
these moving parts anymore.
I would offer some comments I have heard from industry, on
which we rely to build and many cases develop these products,
that they don't have a good relationship in terms of
interaction and that they weren't involved necessarily in the
Better Buying Power programs development as much as they would
want. I just encourage you to be talking to those folks about
what it is that we are missing--we are missing, you are
missing--and how that program can be improved.
Obviously, there are issues of culture at any bureaucracy.
In the DOD, I think you have identified some of those. And with
respect to Congress, I do agree with the recommendation that we
repeal sequester, and if there is a vote on that, you would
have my support and my vote.
I wanted to ask a specific question in the context of IT
[information technology], where there is a major transformation
with the ever-growing cloud, mobile, social computing
requirements and the acquisition of network equipment that has
to fundamentally change if we are going to keep pace. And you--
in August 2014, to your credit, your office released a set of
competition guidelines; called out restrictive specifications
as an impediment to competition; acquisition workforce
complacency; lack of accountability; and the use of sole-source
justifications; and cautionary language about vendor lock;
offered general techniques and approaches to support
competition; and a discussion on the benefits of employing an
open systems architecture, all to your credit.
I wanted to ask you two questions. One is, how would you
characterize your implementation of those guidelines to date,
specifically with respect to IT acquisition. And then what are
some specific timelines and actions for implementing these good
recommendations that you would like to propose to promote
competition?
Secretary Kendall. There are two different forms of IT, I
think, that we have to talk about. One is IT infrastructure,
which is basically all of the hardware and software that
provides the networks that our applications run on. The other
is the business systems that run on those networks, the
applications, if you will.
Working closely with the CIO [chief information officer] on
the infrastructure, which is largely his responsibility, and we
have some good modernization programs, I think, in effect
there, which would be much more efficient.
On the business systems side, we are trying to get a more
flexible model. For a long time, the Department was applying a
model which was somewhat rigid in terms of how we wanted to see
programs structured. And we are trying to learn from commercial
industry more about how to do that.
Now, I can tell you from my own commercial experience that
implementing new business systems is very, very difficult, even
in the commercial side of the house. Trying to do business
systems at a major defense contractor I found to be a very,
very challenging task, and there are a lot of histories of
people having problems with that. The Department has its own
sordid history, I think, in business systems. And I think we
have improved there. I think we have a long way to go.
One of the things that I am trying to do is build up our
body of professionalism in that area. It is a very specialized
acquisition field. It is not the same as a weapons system. The
transition from an old business system to a new business system
is much more difficult than the transition from an old piece of
hardware to a new piece of hardware.
The way you manage industry in that, the way you set up
incentives, the way you ensure you have open systems, so that
you have flexibility and aren't in a vendor lock situation,
they are all important in how we structure that.
So I think we are making progress. It is hard to put out
specific goals, because we tend to work on a program-by-program
basis. I am trying to establish a center of excellence for
business systems, which I think will be helpful to the
Department, essentially an internal consulting organization of
people who have had experience implementing business systems.
And one of the hardest things is transitioning them into a
field and replacing the things that are already there, getting
the workforce trained and so on.
Mr. Peters. When we----
Secretary Kendall. Another thing is----
Mr. Peters. When----
Secretary Kendall [continuing]. Our requirements.
Mr. Peters. I was just going to say about timelines--I am
running out of time here myself--so I want to see if you can
give me some sense of how quickly you saw some progress in this
transition.
Secretary Kendall. We are doing--well, one that I think we
have really turned the corner on and are doing much better on,
although I don't want to jinx it, is electronic healthcare
records, which we have moved to a more commercial model on. We
are in source selection for that now. I have got a top
management team working that. I think we are going to do a
pretty good job with this one, make it a good model for how to
do this.
Others, I think we have learned from our mistakes. Some of
our ERP, our enterprise resource programs, I think, are coming
along and doing better. We had a financial management system in
the Army which struggled a little bit to be put in the field
last year that is doing all right now.
So I think what I would have to do is look at the specific
things we are doing and where you would see evidence through
those of progress.
Mr. Peters. My time has expired, but maybe if you can get
back to me specifically----
Secretary Kendall. Sure.
Mr. Peters [continuing]. On IT acquisition in writing, that
would be helpful.
Secretary Kendall. Happy to do that.
[The information referred to can be found in the Appendix
on page 69.]
The Chairman. As you all know, they have just called
votes--excuse me, two votes. My intention is to go, say,
another 10 minutes or so and then recess to go vote.
And then I am going to come back and continue the hearing,
with the indulgence of our witnesses. You all can have a cup of
coffee or something, if you don't mind, and then we will be
back after that.
Mr. Bridenstine.
Mr. Bridenstine. Thank you, Mr. Chairman.
And, Mr. Kendall, thank you for being here.
And General Ramsay, thank you.
My question was for you, Mr. Kendall. You mentioned three
high-value assets specifically. You talked about Air Force
bases. You talked about aircraft carriers. And you talked about
space. And that these high-value assets represent a relatively
limited number of targets that enable the enemies of our
country ultimately to have an advantage when we are on the
other side of the world, and certainly that is a concern of
mine as well.
What I would like to talk to you specifically about is
space. When you think about architectures in space, we
currently have in space from the commercial sector literally
hundreds of satellites for communications. And if we were to
leverage those satellites, we would in essence very quickly
disaggregate the targeting solutions for our enemies and at the
same time create more resiliency and redundancy in space.
Additionally, when you look at current acquisitions of,
say, WGS [Wideband Global SATCOM] satellites and the
capabilities of these satellites, we are talking about the
ability to transmit 7 gigabits per second compared to what the
private sector is putting into space right now, which is, you
know, 140 gigabits per second, and that is this year. Next year
we are going to be multiple hundreds of gigabits per second
that the private sector is developing and launching, and at the
same time, we are going to continue launching into the future,
owned and operated by the military, satellites that only can
produce 7 gigabits per second.
My question for you is when you look at disaggregation and
resiliency, when you look at the capabilities of the private
sector and you compare that to maybe even, you know, as DARPA
was involved in generating or producing the Internet, it wasn't
until the private sector ultimately got a hold of it and
started taking advantage of it for commercial purposes that we
actually leveraged it inside the military to where we could
actually have an advantage. And if you look at satellite
communication architecture, the systems exist in space now, and
it seems to me that we are not taking advantage of it, and if
we don't, our enemies possibly could.
This, I think, represents a challenge that we have to face
as it relates to the acquisition of access to a global
communication architecture that already exists in space.
My question for you is as we go forward, will we get
proposals from the Department of Defense to take advantage and
leverage these assets that already exist and, of course, the
rapid advancements in technology that are happening right now?
Secretary Kendall. You make some very good points, and I
think the short answer is yes. Because of concerns about the
survivability of our space assets, we are looking at a wide
range of alternatives to the way we currently do business. We
have a system called EHF [Extremely High Frequency], it sounds
like you are familiar with these, which is a very secure
communication satellite. And we have to have satellite systems
that provide communications that are secure against jamming,
secure against cyber attack, and provide encrypted
communications for us, and some of those do things like support
the strategic deterrent. We also need to have fairly high
bandwidth in order to support current operations in certain
places, and we have leveraged commercial satellites to some
degree, but we are relooking now at our architectures because
of the survivability problem that I talked about and you
mentioned to see if disaggregated architectures of one type or
another.
And I think one of the things we do have to look at is
whether we can effectively disaggregate by reliance on
commercial systems. And we have to be sure that they are going
to be available to us in wartime, that we will have the
capacity that we need. So there are some questions that we have
to answer there. And we have to look at their resiliency to
various threats, not just to direct attack. But the short
answer to your question is yes.
And General Ramsay may want to comment on this, because it
is largely a requirements question.
General Ramsay. I will just piggyback on one word that Mr.
Kendall mentioned, and it is a great issue to discuss further,
and it is disaggregation. This has been a big topic in my 2\1/
2\ years in this job has been how do we--how do we look at
space as a domain, and disaggregation could be doing things
that we currently do in space by not doing it in space anymore.
So we are looking at the whole soup to nuts. And as Mr.
Kendall touched on, the big issue is there are certain things
we have to do that are very protected, very secure that may not
have the bandwidth commercial satellites do, but we really are
very much wedded to the commercial backbone, and I just see
that increasing over time, but it is finding that right balance
in the future.
Mr. Bridenstine. I have about 20 seconds left. Just
something to think about. Currently when I talk to folks in the
Pentagon, they talk about buying megahertz, they are talking
about buying spectrum. And with spot beams and all the
technologies that are advancing today, we need to start talking
about--for the taxpayer as well as for the warfighter, we need
to start talking about, how do we purchase capacity, high
throughput capacity, and putting it in terms of dollars per
gigabits per second, if that makes sense.
The Chairman. I thank the gentleman.
Mr. Walz.
Mr. Walz. Thank you, Chairman.
And thank you for holding this hearing.
Mr. Kendall and General Ramsay, thank you for your
testimony both today and this week, very enlightening.
I would just like to--two questions: One, are we making
some improvements now, and I want to give the case study from
an end user perspective on the Crusader project as that came
forward, and it felt like to me that there was very little
input from the end user side of things. The Crusader was 1995;
the Howitzer piece that was approved, you got the prototype in
1998. We went down, and we were starting to manufacture, and it
was cut off in 2002 by the Secretary.
Can that type of thing still happen today? I mean, does
that happen in terms of the acquisition, because from a--both
in preparation from the fielding of that and the training from
the end user, artilleryman, that was out there with that
expectation and all the changes that went into play when that
was cancelled that far down the line--does that still happen?
Secretary Kendall. It hasn't happened recently. I am very
familiar with the Crusader history. It is one of a number of
programs that was started, and we spent quite a bit of money on
it and then cancelled it. Part of the legacy of the Crusader
was that it was a Cold War-oriented system at the time it was
started, and the idea was to have a very efficient artillery
piece that could be used in Europe more than anywhere else
against the Soviets at the time. As the Cold War ended, the
Army stuck with the program for a while. There were some
technical issues. There were some cost issues. It was really a
stretch. It was really a high-risk system, if you will. And it
got into problems in development. Then it got into problems in
affordability. And the Army came to a point, after operations
in Kosovo, where the importance of deploying rapidly to a
contingency really became a dominant consideration in their
requirements. And I think that had a lot to do----
Mr. Walz. So the inability to move it----
Secretary Kendall [continuing]. With the Crusader being
cancelled as well. So I think if--things change. And sometimes
the threat changes so much--or the situations, as you set the
pace, change so much--that you really do need to revisit prior
decisions, and in some cases, it is appropriate to stop a
program like that.
Mr. Walz. I think----
Secretary Kendall [continuing]. But I think we need to be
very careful----
Mr. Walz. It takes courage, though, to do that, right?
Secretary Kendall. It does take courage to do that.
Mr. Walz. So they would--because I think it would--history
shows out, it was probably the right thing.
And my question is, and just quickly as you see this, at
what point does the end user come into that? And I say that
because I think you are absolutely right. That was a transition
from Cold War to a new one. We have a wealth of knowledge
amongst warfighters that have been on the ground. Are we using
that--in terms of--is that fielding into the decisionmaking?
Secretary Kendall. I think it is, but I think you have to
be careful, because there is a tendency to think of the current
fight or the most recent fight as the one you are always going
to have to worry about, and I think at the current time it is
probably the opposite of that in some ways. The
counterinsurgencies we have been fighting are probably not the
model we should be most concerned about going forward. It is
very hard for people to anticipate the next war. We are almost
always wrong about that.
Mr. Walz. Yeah.
Secretary Kendall. And it is important for a country like
the United States to have general purpose forces that can do a
lot of different things. And I mentioned earlier that right
now, particularly with resources as tight as they are, that we
really need to be very careful about our new starts and not
start programs that aren't going to be the right program for us
for some time to come.
Mr. Walz. Very good.
I yield back.
Thank you both.
The Chairman. Thank you.
Ms. Walorski, there is, I think, 350 people who haven't
voted yet. So if you would like to go ahead, I think we have
got time.
Mrs. Walorski. I think we have time.
Thank you, Mr. Chairman.
Thank you, gentleman, for being here.
My question is twofold. One is--I co-chair the working
group here on electronic warfare. And knowing the comments that
you made on Wednesday and the comments [Admiral] Greenert has
made before on the next large domain of our vulnerabilities, so
my one question is: What can Congress do to help DOD streamline
and bring attention and effectively address that electronic
warfare problem?
My second question quickly is: What about the issue of
trust as we look at acquisition? You know, I represent the
State of Indiana. I have a variety of different types of assets
there.
And the question I always get relative to this issue of
acquisition reform is nobody trusts the Pentagon and the lack
of trust--no relationships, lack of trust, nobody believes
anything on the side of the private industry or newer people
trying to get in.
Could you just address those two issues?
Secretary Kendall. It is probably easier to address
electronic warfare.
We do have some shortfalls in electronic warfare. And the
Defense Science Board did a study on this area recently and
made a number of recommendations. And some of those we were
able to take into account as we prepared our budget. Others we
need to do additional study on. So that is an area that is
getting a lot of attention right now.
When I talked about what Russia and China are doing in
particular, electronic warfare is a fundamental concern and it
is an area that, because of the types of threats we have been
dealing with, we have not focused on nearly as much as we
probably should have.
As to trust, the military is still one of the most trusted
institutions in the country. I am a little surprised to hear
you say that. Industry--and I have to tell my government
counterparts this often because I have worked in industry quite
a bit--is we need to appreciate that industry doesn't
necessarily trust us in how we do business and we need to be
very transparent and clear in why we are doing things and how
we are doing them.
And I don't want to go into any examples, but I think we
have to remind ourselves that trust can't be assumed. It has to
be earned. And you do that by your behaviors, by being as
transparent as you can about what you are doing and why you are
doing it.
Unfortunately, all of our source selection processes, which
is where this often comes up as an issue, have to be protected
because of the proprietary information involved and so on. So
people get limited visibility into why someone was selected
over someone else.
I tell the story often that I don't think there has ever
been a proposal manager who came back after he lost and told
his boss that he lost because he wrote a bad proposal. They
always come back and they say, ``I lost because they like this
other guy'' or because of some--you know, something that is
not, you know, self-deprecatory.
Mrs. Walorski. Well, let me ask you this----
Secretary Kendall. So I think you have to be careful about
that, too.
Mrs. Walorski. Yeah. I understand.
But do you at least agree that there has to be--if we are
really going to talk about how are we going to do this with
this budget environment, with the vulnerabilities environment,
like that, I mean, do you at least agree that that issue with
relationships and trust--something has to happen there, I
think, in order for--or I wouldn't be hearing it--and I am one
of the younger members of the team here--so that at least has
to be addressed and there has to be some kind of effort put
forward where there is some kind of an atmosphere of trust?
Secretary Kendall. Yeah. I agree.
And we worked on our relationship with industry very hard.
I was going to respond to the earlier question on that.
We have reached out to industry. We take inputs from
industry associations and from individual firms. I am very
accessible to industry. My staff is very accessible. My
manufacturing and industrial base lead is very open to
industry.
And we have solicited inputs from industry for all of the
different versions of Better Buying Power. And we have taken
them into account, and they have affected what we have done.
We have listened to industry on issues like lowest price
technically acceptable--there are concerns with that--
commercial end items. So we are trying to respond to industry's
concerns.
At the end of the day, as somebody mentioned, there has to
be an effective partnership with industry. We sit down. We try
to negotiate the best business deals we can and protect the
taxpayers' interest, but we also have to live in an environment
where industry is motivated to come do work for us, where there
is a reason for them to want to come work for the Department
besides just patriotism.
And we need to be able to attract non-traditional firms to
work with us, firms that, you know, there are--for which there
are some barriers to entry, if you will, into the marketplace
for defense. So it gets a lot of attention, and we have to,
again, strike the right balance.
Mrs. Walorski. I appreciate it.
And, Mr. Chairman, I yield back. Thank you.
The Chairman. Thank you.
It just seems to me that, in addition to transparency,
simplicity of the process with accountability for decisions go
hand in hand with that and can help build added trust, and I
know that is part of our mutual goal here.
I think we are going to take a break. And, again, we have
two votes. Again, appreciate very much you all's indulgence
while we go do that. And we will recess for the time being to
reconvene after votes.
[Recess.]
The Chairman. The committee will come to order.
Again, thank you all for your patience as we finish those
votes.
Ms. McSally, would you like to take time?
Ms. McSally. Absolutely.
The Chairman. The gentlelady is recognized for 5 minutes.
Ms. McSally. Great. Thank you, Mr. Kendall.
And thanks, General Ramsay. It is good to see you again.
We were just reminiscing about, when I first met General
Ramsay, I was a captain and he was a major.
So it is great to see you continuing to serve in such a
high capacity, and it is wonderful to be working with you.
So I have got two questions. One is related to the
development of follow-on aircraft. You know, as you may know, I
flew the A-10 Warthog and there has been a lot of discussion
about the future of the A-10.
But under the assumption that the A-10 sticks around for a
little while longer and if we could agree--maybe you won't
agree with me--that the Joint Strike Fighter does not provide
capabilities and we decided we wanted to develop an A-X at some
point, like today. We decided we are going to develop an A-X
today, it needs to be a light attack aircraft to be able to do
the things to protect our men and women in harm's way, what are
we talking about timeline-wise?
I mean, just to--I want to just be able to frame the
discussion, and I know it is hard because you don't know what
the requirements are. But are we talking like 15 years, you
know, to develop something where we haven't even identified it?
And what could we do to speed that process up?
And then the second question is related to--you mentioned
the constraints of sequestration. But, also, when we are
spending money based on the end of the fiscal year, use it or
lose it, even though we have had deep cuts--and I have seen
them, and I have seen them in the military--that is also a very
inefficient way to do business. And even last year--I know
friends still in uniform, and I know friends who are
contractors now--they were still on a spending spree of sorts
in the last week in September, you know, with the money.
So what can we do to address that? Because, I mean, we are
under very difficult financial, you know, resource limitations
right now, but we are still on a spending spree at the end of
the fiscal year. So what can we do to help fix that culture and
that dynamic?
Secretary Kendall. I am going to let General Ramsay address
the next light attack aircraft that we are going to buy, which
I don't think we have one of those in the budget at the moment.
But the issue of use it or lose it is a real issue, and I--
and it was what I was getting at earlier about not putting our
people in a position where time is working against them and
they have to spend money or they feel pressure to spend money.
We have looked at that. And it tends to happen on the O&M
[operations and maintenance] side of the house where money
expires every year, and it also tends to happen where people
are buying things like office products and so on where people
will stock up at the end of the year.
And I don't know--I don't have good data on the magnitude
of that abuse--or I consider it abuse if we are buying things
we don't need just to spend money.
Ms. McSally. Yeah. Those are full-service contractor
things----
Secretary Kendall. And I tell the story about, when I was a
lieutenant in the Army, we would fire ammo off at the end of
the year so that we would get the same amount of ammo next
year.
I have had fighter pilots talk to me about going out and
burning holes in the sky just to use up gas because they
wouldn't get, you know, the O&M money for training next year,
even though it wasn't a useful use of the resource. And I think
that is a problem.
And the Defense Business Board talked about how the Defense
Department tends to be a culture of spending as opposed to a
culture of cost control. That is one of the fundamental things
we have been trying to get after in the whole set of Better
Buying Power initiatives.
We try to force our managers to address cost control as a
fundamental mission and to track their costs, understand their
costs, and try to beat them down and to free up resources for
things we really need. So if we do have end-of-year money and
we can repurpose it, it needs to go to things we really need
and not just be spent because it is there to be spent.
And I will let you address the next-generation.
General Ramsay. Congresswoman McSally, boy, that sounds
good when you go back to a press conference we talked about in
1993. But it is great to see you again. And congratulations.
Obviously, the A-10 subject has been discussed a lot with
Congress, but also in the building. And I am not going to
repeat all the things that my Air Force has said, but I will
just say----
Ms. McSally. Yeah. I just don't even want to get into that.
General Ramsay. Yeah.
Ms. McSally. It is just more if we are going----
General Ramsay. If we are going to do it.
Ms. McSally [continuing]. To develop something else, what
does it look like?
General Ramsay. Let me kind of tie it into the Aerospace
Innovation issue that Mr. Kendall hit on earlier.
We are looking at this--you know, one of the things that
JCIDS does is--we are not looking at specific mission areas. We
are looking at domains and how to--how are we going to fight
the future fight. So part of the A-10 issue, besides the fact
that it is an aging aircraft, is what is right for the high-end
fight of the future.
So as you well know, we are looking at this from a
multitude of angles: the permissive environment, the huge
dearth of weapon systems that this committee has supported us
buying over the last 10 years that allow us to do some pretty
remarkable things, and maintaining the technological edge to do
that.
The short answer to your questions is, if we started
today--and I will really defer to Mr. Kendall on a timeline--we
are probably talking about 15 years for a full developmental
program. There are some low-end things out there that other
nations are buying we could do much faster, but we don't think
that is the right thing for us for the high-end fight of the
future.
Ms. McSally. Yeah. Thanks. That is really what I was
getting at. I didn't want to get into the politics of it all.
But start to finish, if we decided--and thanks so much
for--15 years is a good--that is what I figured it would be,
but I wanted to make sure that that was my understanding.
So part of the dialogue we have for the future
capabilities----
Secretary Kendall. If we built a low-end light attack, we
could do that very quickly. There are off-the-shelf
possibilities----
Ms. McSally. Okay.
Secretary Kendall [continuing]. For that. I mean, Textron
has done a system on their own money which could possibly
fulfill that need. We have done a propeller-driven light attack
we have given to the Afghanistans. And there are planes around
the world we could look at modifying and using.
If that were the only purpose for the aircraft, we could do
it pretty quickly, I think. The problem is, if we want
something that is going to give us air dominance for, you know,
another generation----
Ms. McSally. Right.
Secretary Kendall [continuing]. That is a very, very
different program. That is a 10-year program.
Ms. McSally. Right. Thanks.
And my time is expired. Thank you.
The Chairman. Thank you.
Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
And I share the concerns about the loss of the A-10,
especially as far out from the basing of the F-35s. That is, I
think, my primary concern. I understand it is an aging system.
I would sure feel better about standing the A-10 down if we
were closer to the basing of the F-35.
And as we talk about acquisition reform, one of the things
that we haven't talked about yet is life-cycle costs and
sustainment, and that ends up being about two-thirds of the
cost of the system. And it kind of gets overlooked, if you
will, in the press and other areas.
But, I represent Robins Air Force Base, one of the three
depots, and I would just like you, if you would, to speak to
additional reforms in the acquisition process from the
standpoint of sustainment planning, total life-cycle cost, and
how our organic capabilities play into those areas as well as
the ability to ramp up, if you will, when we need to.
Secretary Kendall. I think we have probably got about the
right balance of depot and contractor support, and it is
something that I think has been stable for many, many years
now. We are trying to improve the efficiency of both the depots
and of contractor support.
One of the Better Buying Power sets of initiatives that you
have in front of you is an area of contracting services,
including maintenance. And we are also trying to invoke
performance-based logistics as a way to incentivize industry or
depots, for that matter, to do a better job.
It is a little harder in the government structure than it
is with industry to do that sort of thing. But both have their
role, and one of the important roles of the depots is their
surge capability in case it is needed.
And increasingly, as we have an aging force, the depots are
needed for overhaul and upgrades of our system. So I think,
again, we have got the balance about right.
We are focused on sustainment. As you mentioned, it is
something on the order of--50 to 70 percent of our life-cycle
costs of our program are in the sustainment phase as opposed to
the R&D [research and development] or the production phases,
and we really have to go after that much more carefully than we
have.
The development phase overruns tend to get all the public
attention, but that is not where the money is. We really need
to look where the money is and try to drive costs out there.
Mr. Scott. General.
General Ramsay. Congressman, if I could just add very
quickly, one of the things that this--that Congress has
directed us to do, based on our request, is very, very, very
early in the requirements process, as we begin to have a
conversation about a gap with our acquisition professionals and
look for resources, we do an analysis of alternatives that
really gets at the life-cycle cost.
So we are trying to find out the knee in the curve and what
the life-cycle cost is going to be from the moment we start
bending metal until something goes to the boneyard, if you
will, and look at that, you know, from head to toe.
Mr. Scott. Do you foresee Air Force depots competing for
business from other branches in the future? Do you foresee us,
if you will, allowing that work to transfer from Army to Air
Force or move----
Secretary Kendall. I would like to have the flexibility to
do that sort of thing. And I am speaking totally off the cuff
right now. But I would like to have, frankly, more public-
private competition than we are allowed to have right now.
Competition is terrific. It drives out costs more
effectively than anything else. And I think having competition
among the services, even for service organizations, to do work
like that would probably be healthy for us. I am not sure that
everybody would be happy about that, but I think it would be
healthy in terms of driving our costs.
Mr. Scott. Thank you.
I yield the remainder of my time, Mr. Chairman.
The Chairman. Thank the gentleman.
Ms. Stefanik.
Ms. Stefanik. Thank you so much, Mr. Chairman.
Thank you, Mr. Kendall and General Ramsay, for your
testimony today.
My question relates to clarifying the chain of command in
the acquisition decisionmaking process.
What steps are you currently taking to clarify both
authorities and improve the accountability of the
decisionmakers within and throughout the chain of command?
Secretary Kendall. The chain of command for acquisitions is
pretty straightforward. For major programs, it runs from me,
through the service acquisition executive, to the program
executive officer, to the program manager. And I try to
emphasize that it is one of the principles that we have pushed
in all the Better Buying partnerships.
We try to set up our--this is relatively new, but we try to
set up our program managers' tenure so that they come into a
program before you start a phase and then their responsibility,
once they have gotten approval to do the--their plan for that
phase, is to execute that plan. So success is about successful
execution of a plan that you submitted as opposed to getting
something approved.
I try to hold our program managers and program executive
officers accountable by recording their names on all of my
decision documents as the people who brought the plan forward
for approval that I am approving so that there is a permanent
record of that.
We occasionally have to remove someone who is not
performing effectively, and we have done that. We don't usually
do it with a lot of fanfare. These are often people who have
had fairly successful careers working in the military. And we
are not trying to embarrass them, but we are trying to replace
them with somebody who is going to be more effective in that
particular role.
So I think we do do some things. I think what we have to
work against, to some extent, is all of the stakeholders in our
acquisitions programs who have a voice and often are senior in
rank to the people involved in the actual management of the
programs, and that can sometimes be a problem for us.
Ms. Stefanik. Thank you.
I yield back.
The Chairman. Mr. Langevin.
Mr. Langevin. Thank you, Mr. Chairman.
And thank you to our witnesses for your testimony here
today.
Mr. Chairman, you and I have had a long history of working
together on these important issues. I really appreciate this
hearing and your continued attention to such an important
national security matter.
General Ramsay, if I could start with you, I would like to
learn a little more about the interplay that drives the JCIDS
process.
And as you and your staff work through future battlespace
scenarios and determine what is needed, how do you determine
what technologies will be mature enough for inclusion in those
discussions?
And could you elaborate as to how you draw in the subject
matter experts to staff the Functional Capabilities Board.
And how do you ensure that they are able to have full
visibility across the research and development enterprise with
an appropriate appreciation for technological maturity levels?
And, similarly, how do your discussions feed into the
concept of operations discussions that are in many ways just as
critical?
I know I am throwing a lot at you there, but if you could
help me by answering those questions.
General Ramsay. Well, thank you, Congressman.
And I got to spend a year in Rhode Island and loved every
minute of it in Naval War College. So I will open my comments
sort of as a naval term, as an Air Force officer----
Mr. Langevin. Please come back and visit us again soon.
General Ramsay. I will. And I know you are digging out from
a big snowstorm from the last 2 days.
It is an all-hands-on-deck, I guess is the best way I can
talk about the process in a couple of the areas that you
mention.
The JCIDS process that we have statutorily and then, by our
own volition, evolved to over the last 6 years, I mentioned
earlier that we now have certified requirements professionals
that work within it. If you want to be in the requirements
business in the Department, you have to be certified by Defense
Acquisition University just like our great Acquisition
Professional Corps.
The second piece of this is it is a completely transparent,
collaborative, intertwined process. So when you look at the
three big pillars of how we do the Department's business--
resourcing, requirements, and acquisition--those bubbles all
interact and everybody plays in the pool.
So I am a key figure, for example, in all three areas. So
is the Vice Chairman. So is Mr. Kendall, who runs the Defense
Acquisition Board. And the Vice Chairman runs the Joint
Requirements Oversight Council; he is the chair of that.
As I said early on, we work with the acquisition community,
with the intel community. Intel has the most play in developing
the concept of operations, what is the future fight going to
look like.
Then we work with the warfighters, especially the combatant
commanders, about how they would like us to look at addressing
that. That leads us into the technological piece that you
mention.
And that is where acquisition professionals come in. That
is where DARPA comes in. That is where things that Mr. Kendall
is working to reach out to industry to find out, simply stated,
what--what is the state of technological maturity across the
board in the world today to bring that into defense. Some
things we know about and some things we don't.
So if I could use one word to kind of capture all this, it
is ``intertwined.'' We are all linked at the hip from the very
beginning of ``I have a problem'' to ``I need a solution,'' and
we work this together as teams across resources, requirements,
and acquisition.
Mr. Langevin. So let me ask you this: How do concerns about
industrial base and niche capabilities where we are relying
heavily on industry R&D dollars, such as directed energy, fit
into your decisionmaking?
And, also, you briefly mentioned electronic warfare in your
testimony, Mr. Kendall. How do we compare in that capability
with our adversaries? And what would you need to be done to
improve upon it?
Secretary Kendall. I think the simple answer on electronic
warfare is we have neglected that area for some time because we
haven't been able to respond to some of the things the threats
are doing.
I think we are behind right now. We are playing catch-up to
some degree on that. We have some programs underway, next-
generation jammer, for example, in the Navy. I would like to
see those things accelerated where we can.
Again, we just had a good Defense Science Board study on
this. It gives a lot of recommendations. Some of those have
influenced our budget. Others are under further study and will
probably influence next year's budget.
So I think that is an area where I think we need to focus a
lot more attention going forward than we have in the past.
Mr. Langevin. Do you want to add anything, General?
General Ramsay. Yes, sir.
Just very quickly, one of the things that we--and you
mentioned this, and that is the reason I want to touch upon it.
One of the things that we are very cognizant of as we work
through our concept of operations is just what is out there for
us to be able to do. And the industrial base is certainly
something we watch.
But, really, Mr. Kendall and his team are the experts. And,
obviously, as the budget has come down the last 5 years, we are
very mindful of those industries out there that we cannot lose.
And I would like kind of Mr. Kendall to piggyback on that,
if he would.
Secretary Kendall. We cut R&D spending from a peak of over
$80 billion to about $65 billion, $63 billion. That is a pretty
dramatic drawdown.
And I think of that, frankly, as letting the engineers that
are part of our force structure go--a lot of them go. And when
those people leave defense industry, they are probably not
coming back. And we consciously look at this every year as we
go through the budget process.
We have--the Deputy Secretary chairs a meeting where he
looks at the health of industry consciously to make sure we are
not doing anything there that is going to do irreparable harm.
And we have, I think, over the last few years in each case
made some adjustments in our budget because of industrial base
concerns.
That said, at the end of the day, the resources are what
they are. And if you are going to cut your amount of funding in
R&D by a large amount of money, then you are going to cut a
large amount of your capacity to do that kind of work, and you
have to rebuild that.
I mentioned the Aerospace Innovation Initiative earlier.
One of the reasons I am doing that--one of the reasons the
Department is doing that is to preserve the design teams that
can give us the next generation of capability in that area.
Because once those design teams go away, we have lost them and
it is very hard to get them back.
In very specialized areas, like you mentioned electronic
warfare, that is a very special skill set and you can't develop
somebody who is an expert at that overnight. It takes time. And
you get that expertise by working on programs, by developing
new cutting-edge things.
Mr. Langevin. And I know my time is expired.
But I share that concern. And I have heard directly from
industry that, given the significant drawdown in R&D, that they
are struggling to survive in many fields and they are making
business decisions right now that--they are--basically,
anyways, may be forced to close their doors if the R&D funding
isn't there to continue to keep the pipeline alive.
So, thank you, Mr. Chairman. I yield back.
I have some other questions for the record that I would
like to submit. It would be helpful if you could provide some
answers. Thank you.
The Chairman. No, I appreciate the gentleman raising that
issue.
I think some of the most difficult challenges we face are
to what extent we continue to fund, say, a supply line just to
keep the industrial base engaged, even if we don't necessarily
need at that moment what they produce.
And you mentioned the R&D, losing the engineers. I think it
is--together, those are some of the most difficult challenges
we have before us.
I want to get back, actually, to part of what Mr. Langevin
was asking about at the beginning and then other members have
asked about as well, General, on the requirements system. I
mean, you have described, you know, the way it is supposed to
work and all the interactions and so forth.
And, yet, as was pointed out earlier, one of the
suggestions we have heard from some of our conversations with
acquisition people is we need to take the time up front to
really investigate the technology, understand what we are
dealing with.
That helps procurements go quicker. One hears always that
part of what happens with programs that don't perform well is
requirements creep, that, you know, it changes over time and so
forth.
So my question is: Especially from the military standpoint,
how do we have the discipline in the system to invest the extra
time up front, to not have the requirements creep when, you
know, there is the demands to get it there now?
You know, I know there is the JROC. Lots of committees, you
know, discuss this. But, really, when it boils down to how does
this--where is the discipline in the system to do what has been
suggested?
General Ramsay. Chairman, those are both great questions,
both great issues.
The process that we have laid in place, again, thanks to
your help in the last 4 years, I think really has put us on the
path to getting at the discipline up front. More and more of
our programs are really broken up, torn apart, and built back
up long before we ever--as I said earlier, getting into the
business of bending metal.
In terms of requirement creep, I would offer there are sort
of two ways--there is two different paths in that. One of them
is there is requirements creep that is caused sometimes by the
assessment of what the future war fights are going to be
because it takes a while to get these weapon systems through
the development process and into production and the world
changes and we have critical intelligence breaches.
So, in some cases, we have to evolve the requirement
because we don't want to field a weapons system to fill a
capability gap where the gap--the weapon system is not going to
serve the needs of the future.
But there is another side of that which, I would offer, we
have had a lot of success at, again, thanks to your committee,
which is we are asking program managers and sponsors, namely,
the services and the combatant commands, that, when possible,
if they find out that a weapon system needs to have its
performance parameters reduced because we are way beyond the
knee in the curve in the cost, in other words, we can deliver
something that is a little bit less capable, but at much less
cost, that still meets the warfighters' needs, we are getting
really good at that.
So, Admiral Winnefeld and Mr. Kendall sent a memo out about
2 years ago which encouraged, for the first time, sponsors and
programs managers to bring requirements back to the process.
So we have descoped a lot of programs to get at that to
find that knee in the curve in terms of life-cycle cost.
Delivering things that actually the warfighters need today, we
can get them there quicker and we can do it a lot cheaper. So
we are kind of watching both sides of that.
The intelligence piece I mentioned a minute ago is
something rather new, and it gets back to the pace of
technological change of some of our adversaries, that we have
to take a step back and go, ``We need to rethink this and
probably--we can call it requirements creep, but it is really
about meeting the needs of the future.'' So we are looking at
both sides of the coin, if you will.
The Chairman. No. And I appreciate you raised that because
that is a very fair point. If there are leaks, for example,
that disclose key technologies, then we have got to deal with
that situation. We can't stick our heads in the sand.
But I will just say, you know, part of what I think this
committee needs to do is to help provide some of that
discipline, too. When the budget requests come before us, we
need to ask those questions. And maybe we can reinforce some of
the efforts that you are talking about over the last 3 or 4
years.
Mr. Kendall, another issue that people talk about quite a
bit is--and you mentioned it earlier--prototyping and
experimentation.
And one way it has been described is you get into a Catch-
22. If you don't have requirements for something, then there is
really no place to go with it, even if you have got a great
idea. And, yet, if you can't at least move a great idea some
distance down the process, you can't ever do anything with it.
It just kind of languishes there.
Some people have even suggested maybe we need to look at a
prototype experimentation fund--expanded fund that you would
have and let the services compete for dollars or for ideas that
they could flesh out.
I guess, kind of in a general way, are there things that we
could do together to help ideas or to learn from them to have
an increased level of prototyping and experimentation?
Secretary Kendall. We do do a degree of that now, and we
are relatively free on the science and technology part of our
activities to do that without formal requirements, which is a
good way to do it.
We have a program that isn't all that large now in the
budget. It used to be larger. It is called Joint Capability
Technology Demonstration programs, which has done a number of
reasonably small programs and historically did larger ones, and
we are kind of moving slowly back towards more significant
demonstrations there.
The Aerospace Innovation Initiative that I talked about is
a fairly large-scale demonstration program. It is a prototyping
program without a firm requirement. It is going to explore the
possible, basically, and it will allow us to have people who
set requirements make much better informed decisions as we go
down the road and understand what the art of the possible
really is.
So we do have some things. We also have foreign comparative
tests, which allow us to look at foreign systems and see how
they might fit into our things on somewhat of an experimental
basis.
Be willing to have a dialogue with you about whether there
is an adequate number of resources in that area or not. It is a
hard area when budgets are tight to peel out resources from
other things that are being shortchanged already to do things
which aren't definitely going to lead to a fielded product, but
it is an important thing for us to do at least to some degree.
The Chairman. Okay.
Secretary Kendall. If I could, Mr. Chairman, I wanted to
mention something because I think it is important to call at
least to your attention.
I have left with the committee a report that was done by
Institute for Defense Analyses, and it has to do with the
subject of tight budgets and not tight budgets. It is one of
the most, I think, profound pieces of work, important pieces of
work, trying to analyze cause and effect and correlations in
our acquisition system over decades.
And what--this analysis, which was done by the former head
of the CAIG--Cost Analysis Independent Group--and what is now
CAPE [Cost Assessment and Program Evaluation], looked at major
programs and the cost growth in those major programs over
several decades and correlated that with two things. One was
acquisition policy, and the other was whether budgets are tight
or loose.
There was no correlation to the acquisition policy changes.
Nothing we did seemed to make any difference in the performance
of programs. Tight budgets and loose budgets had a major
impact, and the numbers are pretty shocking.
In periods in which budgets are relatively loose and people
can manage with some degree of cushion, if you will, in their
planning, our overruns and production costs are on the order of
10 percent. When budgets are tight, they are on the order of 30
percent. It makes a huge difference.
And I thought this was one of the more profound things I
have seen. I wanted to call it to your attention. We are in a
tight budget era now. And what this is telling me is that
behaviors change in a way which leads to major cost overruns
when we are in tight budgets.
And we can talk about what those might be. One of them is
trying to hang on to things we really can't afford with the
budgets that we have and cram more into the budget than it will
really support and pretend for whatever reason that costs are
going to be lower than they are actually going to be. And,
frankly, I have seen some evidence of that sort of thing.
Industry is hungrier in times like this and it will talk
itself into bidding more aggressively in order to win the
business because it is all the business there is to compete
for.
So there are a number of things that may come together to
cause this impact, but I wanted to point it out to the chairman
because, as we have looked for ways to improve defense
acquisition, this is not one of the things we have focused on.
We looked at a lot of other things, but this has an impact
that is far beyond any of the other things we have done. And I
think it is important to note that.
The Chairman. Well, I appreciate you mentioning that.
I have not had a chance to read the study yet, although I
did see a summary of it and, like you, I started thinking about
``Okay. What are the reasons for that? What are the
behaviors?''
And maybe one of them is just what we were talking about.
There is--with tight budgets, there--it is harder to put the
resources in up front to get the requirements and the
prototyping done. So, in effect, it takes more money and more
time because you don't put that initial investment into it.
Secretary Kendall. Another impact is that we tend to
stretch out programs. We stretch out the development program.
And Crusader was mentioned. Comanche is another example of this
where programs, because of resource constraints, were stretched
out in development for years and years and years.
And I am not quite sure exactly how that impacts unit cost.
Part of it is the technologies are changing. So we have to
redesign for them and you end up with more costly technologies.
Another part is whether you can hold your design team
together throughout or you end up making changes because of
that, as people change on the design teams.
I think there are a number of things here we have to look
at more deeply, but I think it is a very important result,
nevertheless.
The Chairman. Okay. Good point. And we will join you in
looking and trying to understand that result.
I guess the last question I have is--I want to get back to
the legislative proposals that you submitted.
I am sure you have run into a lot of the same reactions
that I have when talking about improving the acquisition
system. It is a little bit of eye-rolling and ``Oh, I have
heard that story before.'' And there is some skepticism,
concern, that you all are just going to do something that looks
like you are doing something, but it doesn't really matter.
So my bottom-line question to you is--the legislative
proposals that you have offered us, we are going to have to
take time to look at them carefully. But if they were enacted,
would it matter? Would it significantly help the current
situation?
Secretary Kendall. The answer is yes. And the reason that
the answer is yes is that it would give our managers back their
most precious--it would give our managers back their most
precious asset, which is time.
If we can remove bureaucratic burdens on our program
managers so they can focus on the things that really matter,
they will get better performance scores.
And I think, in general--I use the term ``acquisition
improvement'' as opposed to ``acquisition reform'' because, to
me, ``reform'' implies that there is some big thing we could do
which is going to make a huge difference. I don't think that is
the case.
I think what we have to do is attack our problems on many
fronts and make incremental progress on many fronts, learn from
our experience and then adopt new things as we understand the
impact of the things we have done.
And that is why we have emphasized a continuous process
improvement approach in the Better Buying Power initiatives
over the last several years. And I think that is the right
approach.
I think we will make incremental progress on a lot of
fronts. In the aggregate, I think it is going to make a big
difference. But you have to be willing to attack the details on
a lot of different aspects of acquisition.
At the end of the day, a great deal of it is about not
putting rules in place that constrain people, but getting
people in a position where they can make better decisions and
do the right thing and then have the institutional support to
execute the right thing and do it successfully.
The Chairman. Okay. Well, I completely agree.
There are no magic bullets here. It does require continuous
effort. And so I will try to use the term ``acquisition
improvement'' as well and follow your lead.
Mr. Langevin.
Mr. Langevin. Thank you, Mr. Chairman. I appreciate the
extra time.
So I just have a couple of subject areas I wanted to touch
on. And in some ways you have touched on them already, but
maybe to focus them a little more.
With a technology like directed energy or a family of
systems like unmanned undersea vehicles, there are so many
variables that affect the demand signal for its development and
deployment, things like amount and level of R&D funding, the
CONOPS [concept of operations], platform availability, specific
characteristics of the weapon systems and adversary systems,
familiarity of the service with the capabilities in question,
and the creation of a demand signal, affordability of various
options, and so on.
So could you walk us through a little further how those
feedback loops work. And how does your staff make the decision
to turn one dial versus another? And how does intelligence--and
I know you have touched on that already, but how does
intelligence about potential adversaries feed into that?
Secretary Kendall. It is a great question. And I think at
the heart of it is our ability to do something different when
it is the right thing to do, or not.
What we are good at, I think, in the Department is buying
the next generation of the thing that we already have, the
next-generation fighter plane, the next-generation armored
vehicle, the next-generation surface combatant, whatever. What
we are not so good at is recognizing when we have to
fundamentally change direction.
Now, if you look at the offset strategies that Secretary
Work talks about, one is use of tactical nuclear weapons in the
1950s, which was made available because of the fact that
nuclear weapons had been developed.
We were in a situation where we were looking at very large-
scale forces on the Soviet side and we needed something to
counter that, and it was sort of an obvious thing that we could
do.
The precision weapons offset strategy that started in 1970s
and we really demonstrated in the 1990s was such an obvious
improvement in efficiency on the battlefield that it was sort
of an easy one to do.
Directed energy is one that we have talked about forever,
but we have never been able to get the technology quite to
where it is kind of over that hurdle of being operationally
useful enough.
The Navy is doing a demonstration project right now with a
laser on a ship, which is getting up closer to an operational
capability, but is not really where you would quite like to be.
So those are technologies that moved forward very
incrementally over time, but haven't quite gotten to where we
are ready.
I think, in the case of directed energy, if the performance
was there, the--the utility of that is so obvious, if you can
really do it effectively, that it is easy to embrace that.
Another one that is similar is railguns--electromagnetic
launch railguns--which we have been working on for decades,
also. And if you could get that technology, which has advanced
quite a bit. One of the problems that I mentioned earlier was
defensive air bases, for example, or defensive ships, high-
value assets.
If you can get to a one-shot-one-kill capability there
through either of those two means, that is a huge improvement
in capability. I think it is one that is fairly obvious to see.
Others--the use of unmanned systems and undersea
environment you talked about--I think we have to think more
carefully about what the ops concept is and how we would use
them and think about the operation end to end. So it is not as
obvious what you would do or how we would use that technology
if you got there.
And we have an effort going on now at the Department called
the ``Long Range Research and Development Planning Program,''
which is being led by our chief system engineer. It mirrors a
study that was done in the 1970s with a similar name that led
to the investments that gave us the precision munitions and the
other things that we use in the so-called second offset
strategy.
And one of the things that that team that is working now is
trying to do is identify the things we should be investing in
that would make a big difference on the battlefield of the
future and perhaps identify a third offset strategy that we
could work our way towards.
It isn't quite--to me, at least, it isn't quite as clear a
path as some of the earlier two--the earlier two that I
mentioned were.
And I would also point out that all offset strategies are
not successful. The Germans did some kind of an offset strategy
with submarines in World War II, which came close, but it
didn't actually prevail at the time.
Any real innovation in military operational capability
tends to be some form of an offset strategy, and getting it
right, once you embrace that, is important.
Now, it is easier to do things where you can integrate the
new capability into the way you already do business. So in the
case of railguns or electromagnetic launch or directed energy,
I already do air defense systems. So it is a different kind of
an air defense system, if you will.
Other capabilities, such as some of the disaggregated we
talked about earlier, require you to completely stop what you
are doing and do something different. Those are the hard
decisions for the Department to make. I think they are hard for
any military institution to make. And identifying them and
having the courage to go forward I think is something that we
are going to be challenged by.
General Ramsay. I completely agree with Mr. Kendall's
comments.
I would just offer--I think one term that Mr. Kendall
didn't use that we talk about a lot is we are looking at the--
if you look at our budgets in the last 3 or 4 years, as they
have gone down, frankly, we are struggling with this balance of
the fight tonight and what is good enough for now versus
investing in the future.
And part of investing in the future is: Where are the game-
changers? And that is this third technological offset strategy.
That really has dominated our conversations across the
Department, but especially in the resourcing and requirements
and acquisition world, looking for those game-changers. That is
part of what LRRDP [Long Range Research and Development Plan]
does in the whole Innovation Initiative, and that is a, again,
an all-hands-on-deck process right now.
Mr. Langevin. Well, you know, I just hope that, when the
game-changing technology does come on the scene and it is
mature enough, that we don't have this, you know, institutional
resistance to then being able to adopt it, wanting to hold on
to legacy systems.
Directed energy is a particular concern of mine, that, you
know, when it is there, are we going to be able to adopt it
quick enough. You know, Mr. Secretary, you are a bit, maybe,
more optimistic than I would be when you talk about the utility
of it is so obvious.
But I also get concerned about the institutional resistance
to adopting new technologies quickly when we are so used to,
you know, the missiles or, you know, things like Phalanx that,
you know, would be used as the kind of kinetic defenses that
lasers could be much more effective at once we employ them. But
I understand that the technology does have a little ways to go
still.
But the last thing I had is: Do you believe that the
current procurement process is so long that the technology
becomes obsolete by the time it reaches the warfighter?
And how do we avoid these issues in areas such as cyber
where procurement timelines are so mismatched with budget
timelines?
Secretary Kendall. We understand that--well, first of all,
when we do a very complicated weapon system, it is going to
take some time. It is going to take some time to do the design
and then to do all the testing of all the features associated
with that system.
And during that time some technologies are going to move
forward and the threats are going to move forward. So you have
to build into your design, through what we call modular designs
or through open systems architectures, the ability to do
upgrades to that initial system as you go along and sometimes
to make changes in progress if the threat dictates that.
If you look at--I am going to use the F-35 as an example.
We have gone through a series of technology insertions on the
F-35 already in terms of processing capability. There are
probably more of those in the future.
We have asked for--and we had some difficulty with the
Congress on this, but I think we have worked our way past
that--funds to start the follow-on development for the
electronic protection systems, for example, that we are going
to need in the future after the initial fielding of the full
capability.
So you have to design in the flexibility and the process
and then secure the funding in a phased way to improve your
products over time and to take account for the fact that
technologies and threats are both going to be changing as you
are going through the product life cycle.
Mr. Langevin. Very good.
Well, thank you both for your testimony and your patience.
And, Mr. Chairman, thank you for the extra time. And I
yield back.
The Chairman. No. I appreciate the gentleman's questions
and the issues he raises.
Thank you both for being here.
Mr. Kendall, as we work our way through the proposals that
you have made, as we discuss with you ideas that we have and
from others, I hope we can keep this as a continuous process,
as you describe, so another package maybe next year and another
one the year after that and another one the year after that,
because it is going to take that continued persistence to get
at the many complex issues that you raise. That is certainly
going to be a priority of this committee.
And I appreciate the time and effort and the cooperation
that you and your folks have put into it so far. So I look
forward to that.
Secretary Kendall. Thank you, sir. Same here.
The Chairman. Yes. Again, thank you all for being here.
And, with that, the hearing stands adjourned.
[Whereupon, at 11:44 a.m., the committee was adjourned.]
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A P P E N D I X
January 28, 2015
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
January 28, 2015
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[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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WITNESS RESPONSES TO QUESTIONS ASKED DURING
THE HEARING
January 28, 2015
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RESPONSE TO QUESTION SUBMITTED BY MR. PETERS
Secretary Kendall. The August 2014 Competition Guidelines and my
associated memorandum provided a list of actions the Department is
taking to promote competition consistent with the Better Buying Power
(BBP) 2.0 Initiatives. The Guidelines were intended to complement and
work in concert with the overarching principles identified in BBP 2.0,
and to provoke thought about strategies useful for creating and
maintaining a competitive environment throughout the life cycle of
products and services, including IT acquisitions. The guidance and
requirements are being incorporated in the Defense Federal Acquisition
Regulation Supplement Procedures, Guidance, and Information in FY 2015.
Additional guidance specific to IT acquisitions is in the
Department's DoD Open Systems Architecture (OSA) Contract Guidebook for
Program Managers. The Guidebook contains recommendations for writing a
strong, OSA-based statement of work, guidance on special contract
requirements, recommended contract line items, and guidance on
obtaining intellectual property and data rights to support and enhance
competition throughout the full life cycle.
Last fall, as the chair of the Business-Senior Integration Group
(B-SIG), I began focusing senior leader attention on competition
measures to increase visibility and accountability. The B-SIG is
addressing the Department's competitions results, tools, trends and
guidance to increase competition. On a quarterly basis, the Acquisition
Executives present their competition results and respective efforts to
improve competition achievements. [See page 18.]
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QUESTIONS SUBMITTED BY MEMBERS POST HEARING
January 28, 2015
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QUESTIONS SUBMITTED BY MR. TURNER
Mr. Turner. In the 2013 Performance of the Defense Acquisition
System Report, you noted that ``the time required to acquire next-
generation capabilities is often longer than the strategic threat and
technology cycles these capabilities are meant to address.''
Additionally, you further concluded that ``while most cost growth
measures are improving, median cost growth across the MDAP portfolio is
not zero and will likely lead to near-term affordability challenges
given flat or declining fiscal resources.'' Given the historic and
continuing inability to deliver capabilities that are ahead of the
threat, what can Congress and Industry do to help resolve this dilemma
in view of declining resources?
Secretary Kendall. Besides addressing the declining resources
directly by eliminating sequestration, there are a number of additional
things that can be done.
Support for legislative reforms that reduce the statutory overhead
and bureaucracy faced by Department of Defense (DOD) program managers
and their teams is an area in which assistance from Congress and
Industry is needed. This will allow program managers to be more agile,
enabling them to spend their limited time more effectively addressing
evolving threats, controlling cost, mitigating risk, and meeting
schedule while expending less time on bureaucratic requirements that do
not add value and that create unnecessary paperwork.
Legislative assistance to efficiently deal with the inevitable
technical challenges that most programs encounter in managing lengthy
development efforts and keep agile in dealing with evolving threats
would be extremely helpful.
The Department needs industry to focus its Independent Research and
Development on timely and cost-effective new capabilities in response
to external threats and is working to improve Industry's access and
understanding of intelligence on evolving threats. In turn, Industry
needs to bring forward open systems that allow insertion of innovative
solutions to address threat evolution. It is also necessary for
companies that support DOD to help the Department better understand and
tap the rapid innovation and technology development in the commercial
sector.
Finally, Industry information and bids must be realistic and offer
timely, pragmatic solutions. What is often termed ``low-balling a
proposal,'' failing to recognize and manage risks, or offering overly
complicated weapon systems increases the likelihood for problems down
the road and detracts from national security. It is crucial that the
Department, Congress, and Industry work together to recognize and
manage risks, be willing to cancel or fix failing efforts despite sunk
costs or equities, and be more flexible in response to changing
technologies and threats.
Mr. Turner. Should broader and more profound use of industry
innovations through rapid fielding and deployment be part of the
solution?
Secretary Kendall. I recently revised Department of Defense (DOD)
Instruction 5000.02 to include an enclosure on rapid acquisition, which
states ``DOD's highest priority is to provide Warfighters involved in
conflict or preparing for imminent contingency operations with the
capabilities urgently needed to overcome unforeseen threats, achieve
mission success, and reduce risk of casualties, as described in DOD
Directive 5000.71 (Reference (cc)). The objective is to deliver
capability quickly, within days or months.''
Rapid acquisition allows new and innovative capabilities, often
derived from reapplication of technologies originally developed for
non-military purposes, to be quickly placed in the hands of the
warfighter for assessment and adoption. These rapid acquisition
programs offer opportunity to generate insight and understanding that
can help drive innovation into more deliberate programs of record.
Mr. Turner. Does the Department have the budget and legal authority
flexibility it needs to further exploit industry innovations through
rapid fielding and deployment of leading edge technologies?
Secretary Kendall. I believe the Department has sufficient legal
authority and flexibility to execute rapid acquisition programs when
operating under a normal and timely budget process. Our efforts over
the last few years have been impacted by Continuing Resolution
Authorities. This may impact and burden our efforts to execute rapid
acquisition efforts in a timely manner.
Mr. Turner. Does the Department view rapid fielding and deployment
of industry innovations as either a method of spurring industry
investment, by better assuring a competitive return, or solely as a
method of getting technologies to the war-fighter, or both?
Secretary Kendall. The Department recognizes that rapid fielding
and deployment of industry innovations offers multiple benefits. I
recently revised Department of Defense (DOD) Instruction 5000.02 to
include an enclosure on rapid acquisition, which states ``DOD's highest
priority is to provide Warfighters involved in conflict or preparing
for imminent contingency operations with the capabilities urgently
needed to overcome unforeseen threats, achieve mission success, and
reduce risk of casualties, as described in DOD Directive 5000.71
(Reference (cc)). The objective is to deliver capability quickly,
within days or months.''
The Department also recognizes that our rapid fielding programs
provide a mechanism to provide timely feedback to industry on our
utilization of their solutions to urgent military needs, which can
facilitate aligning industry efforts with Warfighter needs.
In Better Buying Power 3.0, I have a focused initiative on
incentivizing innovation in industry and government.
______
QUESTIONS SUBMITTED BY MR. ROGERS
Mr. Rogers. Mr Kendall, last year the Department provided Congress
with a Satellite Communications Strategy Report. An important point was
made in this report. The report stated that:
``Currently, funding for commercial SATCOM is decentralized and
allocated to the Combatant Commands, Services, and DOD Agencies, with
task orders based on individual component needs, and with limited
regard for sharing opportunities between components. This decentralized
approach impedes centralized, multi-year acquisition and hinders the
DOD's ability to manage MILSATCOM and commercial SATCOM as a holistic
capability to best support the warfighter.''
What are your thoughts regarding centrally procuring SATCOM, to
include multi-year acquisition of communications satellite
communications? Considering we spend billions of dollars on satellite
communications (both military and commercial), what other improvements
do you think need to be made regarding better acquisition of this
important capability?
Secretary Kendall. The Department of Defense already centrally
funds and procures MILSATCOM. The Defense Information Systems Agency
centrally procures most (about 70% and increasing) commercial satellite
communications (COMSATCOM) services. In my opinion, central funding has
merit to satisfy predictable, enterprise-level COMSATCOM requirements.
For example, in the FY 2012 President's Budget, DOD proposed a
centrally-funded, multi-year capital lease of a commercial satellite to
satisfy requirements in the United States Central Command area of
responsibility. DOD estimated that under operational conditions at the
time, this investment would have been recouped within 2-3 years by
avoiding the cost of annual COMSATCOM task orders. Congress redirected
funds to procure Wideband Global SATCOM #10 so the estimated return on
this proposed COMSATCOM investment was never verified. In a series of
small-scale ``pathfinder'' initiatives, we have begun to explore other
improvements to better acquire and manage COMSATCOM. Acquisition
pathfinders will examine multi-year service contracts, on-orbit and
pre-launch purchases of COMSATCOM, and purchases of global portable
bandwidth. Operational management pathfinders will examine utilization
monitoring and enterprise-level sharing of COMSATCOM resources to
increase effectiveness and efficiency. DOD will report its pathfinder
plan to Congress in response to Section 1605 of the FY 2015 National
Defense Authorization Act--Pilot Program for Acquisition of Commercial
Satellite Communication Services. As evidence warrants, pathfinder
concepts can be scaled to enterprise-wide solutions.
Mr. Rogers. Related to acquisition of military satellites, I'd like
to better understand your perspective on how to lower costs yet
continue to increase capabilities of our space programs. I'm thinking
about programs such as missile warning and protected communications
satellites. Historically, has it been more cost-effective to
incrementally upgrade existing capabilities or start new space
programs?
Secretary Kendall. Our past data and analyses demonstrate that it
has historically been more cost effective to increase the capabilities
of our space assets by incrementally upgrading our existing space
programs. However, recent trends in space procurement may impact cost
effectiveness and alter our strategy to meet requirements. For example,
the rise of space commercialization and the emergence of standard
satellite buses for dual commercial and military use have afforded the
Department more flexibility in our space acquisition approaches.
Additionally, as identified by last year's Space Strategic Portfolio
Review, the mounting threat to our space capabilities may require
dramatic change to the configuration of our satellites and overall
architecture, potentially driving significant transformation rather
than evolutionary improvement.
For every program, we need to carefully review alternate
acquisition approaches to find the most cost effective path for the
particular needs of the Warfighter. Therefore, we are currently
conducting Analyses of Alternatives (AoAs) for the missile warning and
protected communications satellite programs to determine the best path
forward for these two mission areas. The Space Based Infrared System
and Advanced Extremely High Frequency satellite program have recently
awarded new contracts for two satellites each to replenish existing on-
orbit capabilities. Emerging threats coupled with an increasingly
austere budget environment compel the Department to perform these AoAs
and supporting analyses to inform the next set of acquisition
decisions.
Mr. Rogers. I'm concerned about space governance in the Department.
Particularly when I see programs such as the Navy Mobile User Objective
System (MUOS), with the first satellite launched about 3 years ago and
the 3rd satellite recently launched, and only 10% of the capability of
these three satellites able to be used because of delays in ground and
user terminals. The Navy leads the space and ground components, while
the Army leads the user terminals. There are many other examples of
space programs that are not properly synchronized across the various
segments. Is this lack of synchronization an acquisition problem, a
leadership problem, a money problem? How do we fix this?
Secretary Kendall. Better planning and acquisition oversight is
needed to improve program synchronization issues in conjunction with
improved metrics and more specific definitions.
Based on a recently completed study briefed to the Defense Space
Council in December 2014, the Department is implementing a standard
assessment of integration/synchronization across the space portfolio
more closely integrated with the budget formulation and deliberation
process. As I indicated in my January 26, 2015, letter to the
congressional defense committees, the Department will be submitting an
initial exemplar report covering a single representative program (Space
Based Infrared System) in June 2015, and a comprehensive initial annual
report with submission of the FY 2017 President's Budget. While this
initial report is overdue to Congress, the definitional and procedural
framework needed to accomplish such an assessment in a consistent,
repeatable manner was needed. Additionally, this approach can be
applied for future programs being approved at Milestone B in order to
fulfill the statutory requirements contained in the FY 2013 NDAA.
______
QUESTIONS SUBMITTED BY MR. SHUSTER
Mr. Shuster. What must be done by both the services and Congress to
facilitate greater use of open architecture, modularity, and defense-
owned technologies/software/programming to reduce overall acquisition
costs and timelines?
Secretary Kendall. Department of Defense (DOD) acquisition policy
holds program managers responsible for applying modular, open systems
architectures in product designs where it is feasible and cost
effective. I expect program managers to make maximum use of appropriate
modular, open systems approaches to enable competition, facilitate
reuse, and ease technology insertion. These approaches are documented
and approved in our program acquisition strategies.
DOD uses a broad array of approaches to managing and reusing the
technology and software rights that we own, including use of
enterprise-wide licenses, code repositories, and open source software,
where appropriate. Under Better Buying Power 3.0, our initiatives on
removing barriers to commercial technology utilization and emphasizing
technology insertion and refresh in program planning are targeted at
improving our ability to manage technologies and better leverage the
rights we own and license.
At this time, I do not believe the department requires any
additional congressional action in this area.
Mr. Shuster. What are the biggest threats to continued American
dominance in the area of military technology?
Secretary Kendall. We are concerned that other advanced states, in
particular Russia and China, are pursuing modernization programs that
are focused on defeating specific systems that provide the United
States with the capabilities that enable us to project power globally.
The scope and rate of global development in ``anti-access/area-denial''
systems puts our technological superiority at risk.
Details of particular threats to U.S. Military capabilities have
been provided in recent classified briefings to Members. My staff and I
are prepared to provide additional details on these areas if requested.
One area of particular concern is the proliferation of advanced
land attack and anti-ship cruise and ballistic missiles, with
associated developments in technologies that improve accuracy and
attempt to counter missile defenses, as these extend the ability and
effectiveness of threat surface forces, surface ships, bombers, and
submarines to hold U.S. forces, installations, and the capabilities of
our allies and partners at risk at extended ranges. Another area
concerns the proliferation of advanced missile and air defenses and the
emergence of foreign 5th generation fighters with low observability,
advanced weapons, and advanced sensors that offer challenges to future
U.S. air dominance and strike capabilities. In addition, emerging
capabilities in electronic warfare threaten sustained U.S. dominance of
the electromagnetic spectrum, with implications across multiple
warfighting domains. Areas where the United States has long held
significant advantage, such as in the space and the undersea
environments, are increasingly challenged by the number and
sophistication of military systems being employed by other states.
Mr. Shuster. Are there any specific military areas where the United
States is falling critically behind in the area of technological
development? How can we better streamline the research and development
process to foster innovation?
Secretary Kendall. The United States remains the predominant
military power in the world. We are concerned that other advanced
states, in particular Russia and China, are pursuing modernization
programs that are focused on defeating specific technological
capabilities that provide the United States with critical capabilities
that enable us to project power globally. The scope and rate of global
development in ``anti-access/area-denial'' (A2/AD) technologies puts
our technological superiority at risk in the near future if we fail to
respond to the altered strategic landscape.
Details of particular threats to U.S. military capabilities have
been provided in recent classified briefings to Members. My staff and I
are prepared to provide additional details on these areas if requested.
The Department's Better Buying Power 3.0 initiatives are intended
to focus our acquisition and development communities on the need to
focus on harnessing American innovation to insure continued technical
dominance in the national security arena. These include initiatives
focused on reassessing our internal and external research and
development (R&D) efforts to maximize the return on every dollar
invested, efforts to coordinate industry and government R&D more
effectively, efforts to ensure that our development programs are
informed by intelligence on emerging threats, efforts to ensure that
programs plan for continuous technology refresh to insure that our
capabilities keep up with globalized technologies, and efforts
emphasizing the importance of appropriately aligning incentives for
government and industry to ensure that we achieve innovative, cost-
effective solutions in our acquisition programs.
Mr. Shuster. How serious is requirements creep? Are requirements
for new weapons programs adequately understood and current? Does our
current system of assessing future requirements for new programs
sufficiently assess the future needs of the warfighter and accurately
project future technological changes?
Secretary Kendall. Changing requirements are sometimes unavoidable
and an ongoing challenge. Technology vectors, operational concepts, and
resulting requirements for new weapon systems are reasonably well
understood and current when we baseline programs, but the future always
involves uncertainty. Technologies evolve. New technologies emerge.
Threats change. Opportunities arise. Unknowable problems are discovered
in development. This area is a focus of Better Buying Power 3.0, as we
do believe our system needs to improve its ability to recognize and
integrate changes to reflect the changing environment appropriately.
Mr. Shuster. When and how do you best make the call that a program
has reached the end of its lifespan and incremental upgrades are no
longer worth the cost vs. the benefits gained?
Secretary Kendall. The acquisition community works with the
Services to determine the best way to acquire a system that satisfies
requirements that have been validated by the Joint Requirements
Oversight Council. This includes whether an upgrade to an existing
system or a new design is the best approach and is affordable in
meeting the capability needs. Analyses of Alternatives consider these
trades in the early stages of programs; the Department also considers
this important trade before any new increment of capability for a
system is initiated. At some point, the cost-benefit of upgrading a
system may no longer be affordable relative to starting a new program.
At that point, the Department will no longer invest in upgrades for the
existing system and will consider a new program instead. The existing
platforms will remain in service for the remainder of the planned
service life or until the new system is deployed.
Mr. Shuster. Should we defer development of entirely new weapons
systems until all of the technology exists to create it? Is it better
to aim for more distant technology in a large package program with the
hope that it will spur development? Or does it make more sense to
design new programs around technology that is already proven?
Secretary Kendall. Developing weapon systems requires careful
judgment of technological, operational, and financial risks. Systems
designers must balance the likelihood that a technology will mature as
predicted, integrate as planned, and deliver capabilities as promised
as they identify and refine solutions to Warfighter needs. Staying
ahead of the threat often requires taking informed risks to make timely
delivery of the necessary difference-making performance. In these
cases, active risk management and identification of technology risk
mitigation alternatives should form the basis of a program's
development plan. Weapon system programs should plan for technology
insertion and refresh, not only to reduce risk, but also to keep pace
with threat and obsolescence. This can be accomplished through well-
crafted acquisition and contract strategies and through system designs
and architectures that enable technology insertion or upgrade.
Mr. Shuster. Given the rapid pace of technological advancement,
what is the best approach to keeping our weapons systems current?
Should the focus be on developing and fielding entirely new systems or
incremental upgrades of the units we already have?
Secretary Kendall. Weapon system programs should plan for
technology insertion and refresh, not only to keep pace with
technological advancement, but ultimately to keep up with the latest
threats. This can be accomplished through acquisition and contract
strategies that plan for incremental capability delivery or system
upgrades, as well as system designs, open architectures, and owning
appropriate data rights that affordably and effectively enable
modification and upgrade. Determining the appropriate acquisition and
system design strategy involves careful assessment of opportunities,
costs, and risks; and requires continuous dialogue between acquisition,
requirements, and intelligence communities. The strategic decision on
when to pursue a new system vs. upgrading existing systems must be
informed by careful analysis of the cost and performance tradeoffs, the
projected threats, and our operational and strategic approach to
countering them. The impact on system life-cycle supportability is also
a key consideration.
______
QUESTIONS SUBMITTED BY MR. GIBSON
Mr. Gibson. In response to battlefield commanders' demands to field
cutting edge radios that provide not only voice but data, imagery, and
video, the Army--under your guidance--has moved to the concept of a
radio market place with multiple vendors annually vying for delivery
orders. Can you elaborate on why this model works for communications
technology and how this strategy may be applied to other areas in DOD?
Secretary Kendall. The model has significant potential because
radio technology has shifted toward being software defined. The
Department of Defense (DOD) has encouraged industry to adopt this
modern approach through DOD's advance of the Software Communications
Architecture (SCA) and open standard interfaces. The Department has
also created a DOD Information Repository to provide vendors with
software designed waveforms as government furnished equipment (GFE).
These GFE waveforms can then be hosted on SCA compliant radios, thereby
reducing the development time and cost and improving interoperability.
The result is a current market place of more than 63 types of tactical
radios that allow the flexibility to insert new features and
capabilities as they become available. In order to capitalize on this
new technological approach, a more agile and flexible testing
environment must exist, allowing industry to rapidly bring their tested
and proven capabilities to the user.
Why more frequent delivery order competes?
The shift in communications technology has allowed the Department
to change its tactical radio acquisition strategy toward a non-
developmental item (NDI) approach. The old acquisition strategy of
developing new communications requirements and building a program of
record to develop, test, field, and then maintain that single device
over its life cycle does not align with the state of technology and
rapid acquisition. Software Defined Radios (SDR) are designed to be
modular, reprogrammable, and upgradeable. By adopting an NDI approach
and spreading out delivery orders, the Army can add new industry
developed capabilities (i.e. applications) to an existing radio, as
well as capitalize on industry developed technology improvements such
as faster processors, lower power consumption, longer battery life, and
reduced weight.
Could this strategy be applied to other areas in DOD?
This is something that is being assessed. It works for tactical
radios because industry has moved toward SDRs and embraced the SCA as
an open systems architecture approach that facilitates the reuse of GFE
furnished waveforms. For any DOD system that relies on software as its
fundamental offering, NDI (software) approaches could mitigate lengthy
and costly development.
In summary, in adopting a NDI approach with GFE waveforms for
radios and communications systems provides insight as to how other
software heavy DOD systems could leverage NDI software approaches to
speed delivery, accelerate modernization, and reduce overall costs.
______
QUESTIONS SUBMITTED BY MR. COOK
Mr. Cook. Do you believe it's necessary that UAVs remain covered by
the Missile Technology Control Regime if their primary use is for
tactical military and intelligence surveillance missions?
Secretary Kendall. The MTCR plays an important role in restricting
the proliferation of missiles and delivery systems for Weapons of Mass
Destruction (WMD), including equipment and technology. The MTCR
decreases the risk of WMD delivery systems falling into the hands of
terrorist groups and individuals and rogue states. Unmanned Aircraft
Systems (UAS) that are capable of delivering a payload of 500 kg or
more to a range of at least 300 km fall under MTCR Category I.
Consistent with our MTCR commitments, these MTCR Category I UAS are
subject to a strong presumption of denial, but have been approved for
export on rare occasions that are well justified in terms of the
nonproliferation and export control factors specified in the MTCR
Guidelines.
However, many UAS are not capable of delivering a payload of at
least 500 kg to a range of at least 300 km, do not fall under MTCR
Category I, and thus do not have a strong presumption of denial.
Indeed, the United States has exported such UAS to a number of
partners. U.S. export policy for military UAS balance the need to
maintain the long-standing U.S. commitments under the MTCR while also
providing a framework to ensure trusted partner nations have access to
U.S. unmanned systems, thus relieving some of the burden on U.S. forces
and enabling interoperability with our partners in coalition
operations.
Mr. Cook. How will this export restriction impact U.S. companies
manufacturing UAVs from competing on the global market?
Secretary Kendall. The United States has the most advanced Unmanned
Aerial System (UAS) industry in the world, and I believe the recent
changes in U.S. military UAS export policy will benefit the U.S.
industrial base by advancing U.S. industry participation in the UAS
world market. The new UAS export policy recognizes that an increasing
number of nations are developing, acquiring, and employing UAS. Under
the new policy, U.S. export authorities will examine potential UAS
sales under the U.S. Conventional Arms Transfer Policy on a case-by-
case basis and require receiving nations to agree to the following as a
condition of sale: 1) sales and transfers of Missile Technology Control
Regime (MTCR) Category I, armed, and other advanced UAS must take place
through the government-to-government Foreign Military Sales program; 2)
end-use assurances; 3) end-use monitoring; and 4) agreement to
principles for proper use. The United States is committed to working
with other countries to shape international standards for the sale,
transfer, and use of military UAS. Fortunately, other current and
likely exporters of MTCR Category I UAS systems are also members of, or
have aligned their export policies with, the MTCR.
Mr. Cook. Do you believe it would benefit interoperability with our
allies if our nation had a level playing field in order to sell UAVs to
our international partners and allies?
Secretary Kendall. Not only do the international sales of U.S.
Unmanned Aerial Systems (UAS) benefit the United States through
relieving the burden on U.S.-owned assets during coalition operations,
but sales of U.S. UASs increase the opportunities for interoperability
with our allies as well. The NATO Alliance Ground Surveillance (AGS) is
a good example of how the sale of Global Hawks under a cooperative
program will enable interoperability through the potential sharing of
Intelligence, Surveillance, and Reconnaissance (ISR) data in future
NATO operations. NATO AGS is the backbone of NATO's Joint ISR
initiative that will integrate information and data from NATO AGS and
other national manned and unmanned ISR assets at the Main Operating
Base in Sigonella, Italy.
Mr. Cook. Does DOD plan to update the export controls on UAVs to
control their export in a manner that improves interoperability with
our allies and levels playing field on the competitive global market?
Secretary Kendall. Not only do the international sales of U.S.
Unmanned Aerial Systems (UAS) benefit the United States through
relieving the burden on U.S.-owned assets during coalition operations,
but sales of U.S. UASs increase the opportunities for interoperability
with our allies as well. The NATO Alliance Ground Surveillance (AGS) is
a good example of how the sale of Global Hawks under a cooperative
program will enable interoperability through the potential sharing of
Intelligence, Surveillance, and Reconnaissance (ISR) data in future
NATO operations. NATO AGS is the backbone of NATO's Joint ISR
initiative that will integrate information and data from NATO AGS and
other national manned and unmanned ISR assets at the Main Operating
Base in Sigonella, Italy.