[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.