[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




                                     

                         [H.A.S.C. No. 115-43]
_______________________________________________________________

 
                  INITIAL FINDINGS OF THE SECTION 809

                      PANEL: SETTING THE PATH FOR

                       STREAMLINING AND IMPROVING

                          DEFENSE ACQUISITION

                               __________

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                              MAY 17, 2017
                              
                              
                              
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                      COMMITTEE ON ARMED SERVICES
                     One Hundred Fifteenth Congress

             WILLIAM M. ``MAC'' THORNBERRY, Texas, Chairman

WALTER B. JONES, North Carolina      ADAM SMITH, Washington
JOE WILSON, South Carolina           ROBERT A. BRADY, Pennsylvania
FRANK A. LoBIONDO, New Jersey        SUSAN A. DAVIS, California
ROB BISHOP, Utah                     JAMES R. LANGEVIN, Rhode Island
MICHAEL R. TURNER, Ohio              RICK LARSEN, Washington
MIKE ROGERS, Alabama                 JIM COOPER, Tennessee
TRENT FRANKS, Arizona                MADELEINE Z. BORDALLO, Guam
BILL SHUSTER, Pennsylvania           JOE COURTNEY, Connecticut
K. MICHAEL CONAWAY, Texas            NIKI TSONGAS, Massachusetts
DOUG LAMBORN, Colorado               JOHN GARAMENDI, California
ROBERT J. WITTMAN, Virginia          JACKIE SPEIER, California
DUNCAN HUNTER, California            MARC A. VEASEY, Texas
MIKE COFFMAN, Colorado               TULSI GABBARD, Hawaii
VICKY HARTZLER, Missouri             BETO O'ROURKE, Texas
AUSTIN SCOTT, Georgia                DONALD NORCROSS, New Jersey
MO BROOKS, Alabama                   RUBEN GALLEGO, Arizona
PAUL COOK, California                SETH MOULTON, Massachusetts
JIM BRIDENSTINE, Oklahoma            COLLEEN HANABUSA, Hawaii
BRAD R. WENSTRUP, Ohio               CAROL SHEA-PORTER, New Hampshire
BRADLEY BYRNE, Alabama               JACKY ROSEN, Nevada
SAM GRAVES, Missouri                 A. DONALD McEACHIN, Virginia
ELISE M. STEFANIK, New York          SALUD O. CARBAJAL, California
MARTHA McSALLY, Arizona              ANTHONY G. BROWN, Maryland
STEPHEN KNIGHT, California           STEPHANIE N. MURPHY, Florida
STEVE RUSSELL, Oklahoma              RO KHANNA, California
SCOTT DesJARLAIS, Tennessee          TOM O'HALLERAN, Arizona
RALPH LEE ABRAHAM, Louisiana         THOMAS R. SUOZZI, New York
TRENT KELLY, Mississippi             (Vacancy)
MIKE GALLAGHER, Wisconsin
MATT GAETZ, Florida
DON BACON, Nebraska
JIM BANKS, Indiana
LIZ CHENEY, Wyoming

                  Robert L. Simmons II, Staff Director
            Alexis Lasselle Ross, Professional Staff Member
                Douglas Bush, Professional Staff Member
                         Britton Burkett, Clerk
                         
                         
                            C O N T E N T S

                              ----------                              
                                                                   Page

              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Thornberry, Hon. William M. ``Mac,'' a Representative from Texas, 
  Chairman, Committee on Armed Services..........................     1

                               WITNESSES

Lee, Deidre, Chair, Section 809 Panel, Former Administrator for 
  the Office of Federal Procurement Policy, Former Director, 
  Defense Procurement and Acquisition Policy; William LaPlante, 
  Commissioner, Section 809 Panel, Former Assistant Secretary of 
  the Air Force for Acquisition; Charlie E. Williams, Jr., 
  Commissioner, Section 809 Panel, Former Director of Defense 
  Contract Management Agency; Joseph W. Dyer, Commissioner, 
  Section 809 Panel, Former Chief Operating Officer and Chief 
  Strategy Officer, iRobot Corporation, Former Commander, Naval 
  Air Systems Command............................................     2

                                APPENDIX

Prepared Statements:

    Smith, Hon. Adam, a Representative from Washington, Ranking 
      Member, Committee on Armed Services........................    41

Documents Submitted for the Record:

    Advisory Panel on Streamlining and Codifying Acquisition 
      Regulations, Section 809 Panel Interim Report, May 2017....    45

Witness Responses to Questions Asked During the Hearing:

    [There were no Questions submitted during the hearing.]

Questions Submitted by Members Post Hearing:

    [There were no Questions submitted post hearing.]
    INITIAL FINDINGS OF THE SECTION 809 PANEL: SETTING THE PATH FOR 
             STREAMLINING AND IMPROVING DEFENSE ACQUISITION

                              ----------                              

                          House of Representatives,
                               Committee on Armed Services,
                           Washington, DC, Wednesday, May 17, 2017.
    The committee met, pursuant to call, at 10:02 a.m., in room 
2118, Rayburn House Office Building, Hon. William M. ``Mac'' 
Thornberry (chairman of the committee) presiding.

  OPENING STATEMENT OF HON. WILLIAM M. ``MAC'' THORNBERRY, A 
    REPRESENTATIVE FROM TEXAS, CHAIRMAN, COMMITTEE ON ARMED 
                            SERVICES

    The Chairman. Committee will come to order.
    The purpose of today's hearing is to receive the initial 
findings from the Section 809 Panel. Now, as members may 
remember, in the fiscal year 2016 NDAA [National Defense 
Authorization Act] we created an advisory panel under, 
appropriately, section 809 to review acquisition regulations 
and make recommendations for streamlining and improving defense 
acquisition process, and also to advise us on improving our 
defense technological advantage.
    We are pleased to welcome four of the commissioners here 
today to report on the interim findings of that panel. I 
understand that the panel has--was, due to no fault of its own, 
delayed in getting started, partly because of the Department. 
But all members have before them an interim report dated May 
2017 that, in my opinion at least, does a very good job of 
explaining the problems and where we are.
    I think my favorite sentence is where the report says, 
``The way the Department of Defense buys what it needs to equip 
its warfighters is from another era.'' None of us can afford to 
have that situation continue because the era we are in is 
dangerous enough, and it is not stopping to wait on us.
    We are pleased to have, as I say, four of the commissioners 
with us today.
    Before turning to them, I will yield to the distinguished 
acting ranking member, Mr. Carbajal, for any comments he would 
like to make.
    Mr. Carbajal. Thank you, Mr. Chair.
    I don't have any comments, but I would like, without 
objection, to submit Ranking Member Adam Smith's testimony into 
the record. And I have a few questions for later on.
    [The prepared statement of Mr. Smith can be found in the 
Appendix on page 41.]
    The Chairman. Without objection, so ordered.
    Let me welcome our witnesses today. We have Ms. Deidre Lee, 
who is the chair of the Section 809 Panel; Mr. William 
LaPlante; Mr. Charlie Williams, Jr.; Mr. Joseph Dyer. Each of 
them have impressive backgrounds that are helpful, I think, for 
this purpose. Members have more complete bios in front of them.
    We, again, appreciate the work you all have done so far and 
the work that you will do in the months to come.
    Ms. Lee, we will yield to you for any comments you would 
like to make.
    And, ma'am, if you would--and put that microphone right in 
front of your face.
    That works better. Thank you.

  STATEMENTS OF DEIDRE LEE, CHAIR, SECTION 809 PANEL, FORMER 
  ADMINISTRATOR FOR THE OFFICE OF FEDERAL PROCUREMENT POLICY, 
 FORMER DIRECTOR, DEFENSE PROCUREMENT AND ACQUISITION POLICY; 
   WILLIAM LAPLANTE, COMMISSIONER, SECTION 809 PANEL, FORMER 
 ASSISTANT SECRETARY OF THE AIR FORCE FOR ACQUISITION; CHARLIE 
   E. WILLIAMS, JR., COMMISSIONER, SECTION 809 PANEL, FORMER 
DIRECTOR OF DEFENSE CONTRACT MANAGEMENT AGENCY; JOSEPH W. DYER, 
COMMISSIONER, SECTION 809 PANEL, FORMER CHIEF OPERATING OFFICER 
    AND CHIEF STRATEGY OFFICER, IROBOT CORPORATION, FORMER 
              COMMANDER, NAVAL AIR SYSTEMS COMMAND

    Ms. Lee. Thank you, sir.
    Chairman Thornberry, Ranking Member Carbajal, thank you, on 
behalf of the 18 commissioners, for the opportunity to present 
the 809 Panel's interim report. I will give an opening 
statement, and then we have the other commissioners who will 
hear--will answer your questions, and we will all try to answer 
your questions and respond to you.
    Since the panel's first meeting we have heard from the men 
and women who work as professionals in the defense acquisition 
system; those who support the Department in industry, including 
those who have yet to do business with the Department; those 
who study the system in think tanks and academia; and those who 
provide leadership and oversight in Congress. We sincerely 
thank all of those who have offered their thoughts to us and 
welcome others to reach out and contribute.
    Through these conversations themes have emerged, and these 
themes are the foundation for the panel's work going forward. 
We know that mission must come first. We have to value time. 
The system needs to be simplified. And another--probably more 
discussion later--we need to decriminalize the commerce.
    We have learned that there are barriers to entry doing 
business with the government. Some are small, while too many 
others are large, complex, and time-consuming.
    We have learned that there are out-of-date regulations that 
have served their purpose and today only serve as drag on the 
system.
    We have learned that protests, or the fear of protests, 
makes a slow, cautious contract process. We have learned that 
there is a lot of flexibility in the system and we need to be 
systemically confident enough to use it.
    We have learned that we fail to adequately distinguish 
between those systems that are multi-decade platforms and those 
that have a short technology life.
    And we note that the pace of innovation in America is the 
hare, while we wish and act as if it is the tortoise. There are 
too many unique policies, exceptions, thresholds, and reviews 
for acquisition to be timely at a fair price to the taxpayer.
    These complexities prevent our trusted, qualified personnel 
from making decisions at the appropriate level and create 
barriers for our access to new technologies when industry 
cannot even fathom how to engage.
    The 809 Panel is working toward a system that puts trust in 
our professionals to do the right thing at the right time, and 
empowers them to make appropriate risks and to be able to make 
an honest mistake. Oversight is important, but not to the 
degree that it punishes many for the acts of a few and creates 
more burdensome costs and expends more precious time than can 
ever be recovered.
    Some businesses--especially small businesses--hesitate to 
engage in commerce with the government because they fear minor, 
unintentional mistakes may result in criminal charges, hefty 
fines, and damaged reputations. For many, including some of 
the--on the cutting edge of technology, the benefits of doing 
business with the government are insufficient to offset the 
potential downsides.
    Companies should not have to invest time and money just 
figuring out how to do business with the government. Wouldn't 
it be better if instead they could focus all of their resources 
on innovation, trying new technologies, establishing new 
thinking, and encouraging transformative ideas?
    We are at a critical inflection point. The geostrategic 
challenges the U.S. are facing is--are not lessening. In order 
to continue to ensure our technological dominance on the 
battlefield, we need an organization that is capable of looking 
past how it has always been done and how it can be done--to how 
it can be done.
    We must be agile enough to respond to rapidly evolving 
threats and fast enough to develop and deliver new capabilities 
within the arc of emerging threat. Let's design for the 22nd 
century in the beginning of the 21st.
    Reforming DOD [Department of Defense] acquisition is a most 
admired problem, and we are not the first to consider it. 
Dozens of reform efforts precede this panel, and in order to 
move past tweaking around the edges of the system as it exists 
today, we have charged ourselves with being bold yet 
actionable, and you will see those reports in our subsequent 
report.
    Our interim report illustrates the demand for change. It 
provides just a small example of a level of detail that will 
accompany our recommendations.
    In the supplemental, the case studies illustrated may seem 
minor, but as we all know, hundreds of minor combined with 
major changes make a difference. No recommendation is too small 
nor too large. Let me say that again: No recommendation is too 
small and no recommendation is too bold.
    We look forward to continuing to engage the community and 
welcome thoughts and recommendations on areas of improvement. 
We are hearing a lot from industry, from people in the 
community, and we appreciate their input and are considering 
all those recommendations.
    As laid out in the written report, we are committed to 
recommending a system that will adapt at the speed of changing 
world, leverage the dynamic defense marketplace, allocate 
resources effectively, simplify acquisition, and enable the 
workforce. Our tagline is, ``Bold, simple, and effective.''
    And we are today releasing our interim report, and as you 
know, it is on our website and our team has put it on a QR code 
and are--so this is how we are releasing the report and it is 
available for everyone. So we present our interim report to you 
today and we anticipate your questions.
    Thank you.
    [The Section 809 Panel Interim Report can be found in the 
Appendix on page 45.]
    The Chairman. Thank you. I will just say, everything you 
just said is consistent with and, I think, supportive of the 
emphasis that this committee has put on acquisition reform over 
the last 2 years: the imperative for us to act. And we made 
some significant changes, as you know, but I don't think any of 
us believe that we have done enough or fixed the problem. And 
that is part of the reason this panel was created, and we look 
forward to your further--to your recommendations and to your 
final report.
    I might just mention that tomorrow I will introduce a--some 
further proposed changes, and I do that about a month before we 
mark up our bill so that everybody can comment. And I certainly 
invite the panel as a whole or individual members of the panel 
to make comments, suggestions, especially if you think we are 
headed in the wrong direction for the bill that I will 
introduce tomorrow in anticipation of further reform.
    Let me just start out with a question for each of you, 
because each of you has in the past served in the government 
or--in either civilian, military capacity. And just for a 
little perspective, is it worse now than it has been in the 
past?
    Ms. Lee. Yes, sir.
    The Chairman. And we can't go on too long here, but just 
for each of you, can you describe how much worse? Can you give 
me a couple sentences on why you think it is worse?
    I mean, what is--you said this is an inflection point. Why 
is this an inflection point? What is the imperative of acting 
now?
    Dr. LaPlante. So I would start by just saying, as the 
committee knows, that our technological superiority has been 
eroding. We have been all, unfortunately, watching this for the 
past decade, whether it is in cyber, weapon systems, air 
dominance, space, EW [electronic warfare]. It has just been 
consciously eroding right in front of us.
    While we are doing as much as we can the traditional way--
the industrial way, Mr. Chairman--doing things like studying 
for analysis of alternatives for 3 years before we decide what 
to do on something, our peer adversaries don't seem to be doing 
that. They are not studying things. They are fielding things.
    And what seems to be happening to us is our ability to 
deliver things quickly to the warfighter, other than through 
workarounds, like the MRAPs [Mine-Resistant Ambush Protected 
vehicles] or other ways we have done it, is worse than it has 
ever been.
    Mr. Williams. Yes, Mr. Chairman. I would note that in order 
to achieve this necessary advancement in technology it is going 
to require a significant amount of collaboration across 
industry and DOD.
    And unfortunately, I would suggest to you that today the 
trust factor across the table isn't what it used to be. And I 
think as a result of that we create a tremendous amount of 
risk-adverse attitudes; we create a tremendous amount of 
oversight. And that burdens the system down such that you don't 
have the collaboration across the table necessary to ensure 
that we get to the right collaborative solution.
    Mr. Dyer. Mr. Chairman, thanks for the question. And we 
commend the progress that the panel has made and your 
leadership, sir. But much more does need to be done.
    As Mr. LaPlante--Dr. LaPlante indicated, it is the erosion 
of dominance that worries some of us the most. And a return to 
dominance needs to come from high-tech, innovative, 
nontraditional companies that have become reluctant to do 
business with us either because of the complexity or because of 
greener fields being found elsewhere.
    The Chairman. Well, that is the other question I want to 
ask before yielding to other members. I hear anecdotal 
evidence--I hear directly from people who--companies, 
especially small but some big companies, who say, ``We all made 
a business decision that it is not worth doing business with 
the Department of Defense anymore.''
    Based on what you all can tell so far, is that a real 
problem that we have to confront?
    Mr. Williams. I will speak to that, Mr. Chairman.
    I happen to be a part of a sub-team that is looking 
specifically at the area of barriers to entry. And we have 
talked to a lot of companies that are interested in doing 
business with the Department but choose not to, companies that 
do business with the government but yet are challenged by the 
processes.
    And so the answer is yes, this is a huge and significant 
challenge. The challenge gets into very simple things like how 
long it takes the government to make a decision simply about 
whether or not it wants to proceed with a requirement, the fact 
that the government goes out and announces its intent and 
companies put together proposal teams and things of that 
nature, and it takes then the government a long time to get 
back to them. And companies can't carry that.
    If that is a problem for a large industry, imagine what it 
causes for the smaller companies who are often out there on the 
leading edge of technology advancements.
    Dr. LaPlante. I would add, just as a small example, when I 
was the Air Force assistant secretary we pulled the data and 
found out it took us 18 months to go from initial RFP [request 
for proposal] to award of a sole source contract--18 months.
    Now, if you remove the foreign military sales it still is 
about a year.
    So if you are a small company and that is even from when 
the final RFP drops to when you are potentially going to get 
the money for a sole source in a year, you know, you can just 
imagine how hard that is. And I know one of my other colleagues 
has direct experience.
    Mr. Dyer. Mr. Chairman, I will tell you a story from 
personal experience, if I may. I retired in 2003 as the 
commander of the Naval Air Systems Command down in southern 
Maryland. I was the Navy's senior acquisition uniformed person 
at that time.
    I went to work in Boston building robots with the iRobot 
Corporation, first as the president of their defense unit and 
later as the corporate COO [chief operating officer] and then 
chief strategy officer.
    iRobot was a company that spun out of MIT [Massachusetts 
Institute of Technology]. It is exactly the kind of company 
that I feel we need most: experts in autonomy, artificial 
intelligence, man-machine interface.
    But in my trips to Wall Street representing the interest of 
the company, one of my analyst friends took me to lunch one day 
and said, ``Joe, you have to get iRobot out of the defense 
business. It is killing your stock price.''
    And I countered by saying, ``What about the importance of 
DARPA [Defense Advanced Research Projects Agency] and the 
investment in leading-edge technology? What about the stability 
that sometimes comes from the defense industry? Or what about 
this, or what about that? What about patriotism?''
    And his response was, appreciating that the requirements 
for corporate officers is to attend to the interest of their 
investors, he says, ``Joe, what is it about capitalism you 
don't understand?''
    His point, sir, was that profits are limited by weighted 
guidelines. It is something of maximum of around 13 percent. 
The call on data rights and intellectual property, the crown 
jewels of the company--these things send you away.
    There are just greener fields that companies like iRobot 
feel better represent the interest of the investors. And last 
year, sir, iRobot divested their defense business.
    The Chairman. Thank you.
    Mr. Carbajal.
    Mr. Carbajal. Thank you, Mr. Chair.
    And thank you, to the commissioners that are here today to 
share with us a little bit about their interim report.
    My question is, every administration and virtually every 
Secretary of Defense since World War II has embarked on an 
acquisition reform effort, yet we still face significant 
challenges. What will this panel recommend that will be 
different to ensure a lasting impact that you have already 
started identifying? Because if not, this is going to be yet 
another exercise and 10 years from now we are going to be at 
the same place again.
    So I think despite looking at the whole system, it is 
really identifying those particular recommendations that are 
going to help take a different approach.
    Ms. Lee. Excellent point, and I think that is what we are 
trying to say in our interim report is there is an imperative, 
as has been discussed here. We have to be more agile, more 
responsive. We cannot continue in the mode that we are 
progressing.
    So the environment is right. You in the Congress are 
interested. Your staff has been incredibly helpful and 
supportive. I think that is helping us from setting that up.
    And then the other thing that our supplemental is, what we 
plan to give to you that is different than so many of the other 
excellent reports in front of us, are that level of detail. And 
that is why we did the supplement, to show you that we are 
going to actually give you marked-up language of the 
recommendation. Obviously the recommendation is still yours to 
decide on, but we are trying to give you data-driven, 
actionable recommendations so you can look at those.
    We also have some very bold recommendations that will come 
out later that will impact some particular constituencies and 
there will be some hard decisions to make significant changes 
for us to move on and modernize this acquisition system.
    Bill.
    Dr. LaPlante. I would add a different--maybe a slightly 
different perspective, because the question you ask is the 
question all of us ask when we get asked to put our precious 
time into another acquisition reform study. I have a different 
view, which is--I have changed my mind over the years.
    I will give you an example. I think reform--what reform is 
needed at one time is different depending on the age. I will 
back up to 2009 when the Weapons Acquisition Reform Act was put 
in place, WSARA, as some people call it.
    That had some very good reforms in it. It required an 
independent cost estimate at the beginning of programs, for 
example. It codified how to do analysis of alternatives.
    And actually, if you--one argument, if you look at the cost 
performance of the major weapon systems over the past 6, 7 
years, I think a lot of us have seen and the data shows that 
the cost growth is actually lower than it has ever been. It did 
help some things.
    While all that was going on, the world is changing very 
rapidly. And I think the problem today as I see it--and it is 
driven by this technology threat and the change in the 
technology--is the commercial world practices have moved 
totally beyond the industrial model that we said that the DOD 
uses.
    So I will just give one example: software development. In 
DOD we spec out a software problem, a software system--a ground 
control station for satellites, for example. We get the 
requirements honed perfectly, then we translate them into a 
system spec, we issue an RFP, and then we give the award, and 
then we hold the contractor accountable to cost performance 
schedule. It is typically scheduled for 5 years and it will 
take 7 and it will go over budget. We all know that.
    The commercial world developing software has left that 
waterfall model 20 years ago. The idea that Google develops 
software and then deploys it is wrong. They develop software 
every day. Facebook drops hundreds of releases every day.
    The idea that you would even spec out in detail the 
requirements of something 5 years from now is laughed at by 
fast-moving commercial software developers. They say, ``No, you 
never get it right. You gotta be able to go fast, go in short 
sprints, and if you make a mistake you get back on track.''
    So if you look at the way our system is set up, it is set 
up for the old model. And so that is an example of why we need 
reform now is because the world has changed and we have to 
adjust to that.
    Mr. Dyer. Congressman, one of the things the panel is 
doing, I think to gain some new insight, one of our eight teams 
are looking not just at problem programs but taking a far-too-
unique look at programs that succeed and asking why, and seeing 
if there are common themes of experience, training, approach, 
culture that can be applied across the DNA of other programs, 
and we can take a reverse look of saying, ``This is what you 
should do,'' as opposed to perhaps a history where DOD has said 
primarily, ``This is what you cannot do.''
    Mr. Carbajal. Thank you. My last question is the interim 
report recommends DOD spend its resources more efficiently and 
effectively in all types of acquisitions, including the 
procurement of low-dollar goods. Does the Department overpay 
for commercial off-the-shelf, also known as COTS, items?
    Mr. Williams. Yes, Congressman. I would say that the panel 
has not looked at and taken on the job of looking at the 
pricing of commercial items, so we aren't prepared to offer an 
opinion on whether or not commercial items are overpriced.
    What I think we are suggesting here is that often when we 
look at these reform efforts we are simply focused on large-
dollar procurements. We are focused on big programs.
    The problem in the system often relates to all these non-
complex efforts in procurement and services. When you look at 
the equation, you know, 80 percent of the dollars are spent on 
20 percent of the actions, but there are 80 percent of these 
actions that are really critical to the Department being 
successful, and we have to pay attention to those just as well.
    In the report we talk a lot about clearing the underbrush. 
There is a whole lot of stuff in the underbrush that affects 
how we get work done, and so I think we are simply saying that 
in the area of commercial, in the area of services across the 
spectrum of everything that the Department acquires, we have to 
pay attention because each piece makes up the big picture.
    Dr. LaPlante. We always have to remind people that 
services--Department buys services from everything from cutting 
the lawn to launching our most precious national security 
payloads into space. Department spends probably more on 
services still than on major weapons acquisition program.
    Mr. Carbajal. Thank you very much. Mr. Chairman, I yield 
back.
    The Chairman. It definitely spends more. Something like 53 
percent of everything that is on contract is services, not 
weapons and equipment.
    Mr. Cook.
    Mr. Cook. Thank you very much, Mr. Chairman.
    I want to thank the chairman for doing this. And this is 
going to be very, very tough to get done and I appreciate the 
panel working on this.
    And it is a lot of frustration for me and a lot of other 
people, and I am a historian by trade, I guess, military by 
trade. And you go back and you--the system we have right now, I 
swear to God we would have lost World War II.
    We do not have the luxury of waiting that long to bring new 
weapons systems online. I was out at Fort Irwin the past week, 
which is in my district. Perhaps one of the greatest training 
areas of all.
    And one of the days was live fire, but the first day was 
cybersecurity. I met with these young soldiers and they are 
talking about some of the things that they were doing off the 
shelf and they are making changes.
    Now, remember, I am an infantry guy. I am just a dumb 
marine, and I really am, and they are talking about space-age 
stuff, and they are doing it right then and there.
    And I am saying, ``God, why can't you be in charge of the 
whole system?'' And I understand that is not feasible, and 
contracts and everything else.
    And I asked them about it and they said, ``Time,'' and they 
said the same thing that you said. We don't have the luxury.
    You know, the changes are made. You know, when I was in 
Vietnam they were making changes. That was 50 years ago and it 
seems like it was taking forever. Even then some of the systems 
coming online were flawed, not correct, and took forever to get 
there.
    And here we are now. We don't have that luxury. I am going 
to be leaving here. I am going to have a brief on the T-14 and 
the T-90, the improvements to some of these systems today. It 
just gets so depressed.
    So I think this is a great first step. We have gotta change 
this and we have gotta change it now, whether we go back in 
history, whether we look at how the Israelis change. Why do 
they change so quickly? Because they won't survive as a country 
if they don't.
    So the stakes are enormous, and if we don't get it right 
then, you know, my original reason for coming to Congress--and 
that was, you know, the military and veterans--I have failed. I 
have failed miserably.
    Now, you guys and gal, you have a tremendous amount of 
expertise and I appreciate what you are doing. And I am going 
to be the junkyard dog just saying we gotta cut through the red 
tape, and we have gotta get it done, and we gotta get it done 
now. And we have no excuses anymore.
    So I have vented, and I appreciate the chairman. I will 
drink some more coffee and go back to my office, and I yield 
back.
    The Chairman. Venting appreciated.
    Mr. Garamendi.
    Mr. Garamendi. I want to thank you for the panel discussion 
and for, obviously, a very, very important issue.
    It seems to me that there are at least--that in analyzing 
this acquisition you need to put into various categories the 
kind of acquisitions we are talking about. We just discussed a 
moment ago services and then major acquisition of airplanes, or 
whatever.
    With regard to the latter, I recall a hearing we had in the 
naval subcommittee last--2 weeks ago in which the littoral 
combat ship came up. And the fundamental argument made by the 
Navy and by the defense industry was, ``Well, we gotta continue 
to produce another 20 of these ships that serve really no good 
purpose and, by the way, will probably be sunk at the very 
first shot that will be fired and don't have much utility, but 
we need to do it because we need to keep the defense base 
working.''
    Now, that is a policy question that we need to address 
here. So you got those kinds of issues.
    When you get down to other issues, there are the public 
policy questions. I could probably mention the issue of 
greenhouse gas emissions and the consumption of fuel oil, or 
fuel--the Defense Department being the single largest consumer 
of petroleum products in the world. So should there be a policy 
question put on the Defense Department dealing with 
conservation, or moving away from fuel to green energy 
technologies?
    How do those kind of policy issues come into play in the 
issue of defense acquisition strategy? Should we simply abandon 
these policy issues, which do, seem to me, provide some brake 
on the rapidity of a contract going forward or the continuation 
of a previous program?
    What is your recommendation? You make recommendations here 
about policies that get in the way. Should some of those 
policies remain in the way?
    Ms. Lee. I think that will obviously be an end decision for 
this body. We were going to--what our plan is to look at all of 
these and, as we all know, individually each one has a 
constituency, has a value, and probably a very good purpose. 
Cumulatively they are clogging the system.
    So I think it is going to be a very difficult question to 
say, you know, what are the priorities? Our report says mission 
first. We will offer up some recommendations to you all to a 
very challenging decision is what is that balance?
    Mr. Williams. I would offer, Congressman, that the critical 
question here is the question of mission and the purpose of the 
system. And I believe if we start there, we start with mission 
first, that the system that the Department has to use for 
acquisition is focused on ensuring it can accomplish its 
mission, and we evaluate these various policy questions along 
that continuum, and I think it will allow us to have a way to 
think these things through.
    I don't think anyone has reached any conclusion as to what 
is good, what is bad, what is problematic, but to Ms. Lee's 
point, the accumulation of these things together put extreme 
pressure on the system and cause many, many hurdles for the 
acquisition community to have to go through to get to that 
mission result.
    Dr. LaPlante. I will give an example of maybe one or two 
policies that make perfect sense from a certain aspect of 
public policy but actually can maybe have a collateral impact 
you may not understand. One is competition, the CICA 
[Competition in Contracting Act] thing, which is that--the 
assumption being that whenever you can, you do competition. 
Makes perfect sense and all that.
    To the extent that, getting at what my colleague said in 
her opening, the fact that we are worried about protests so 
much during either the RFP release or the award, bend over 
backwards, do competition when there is an obvious quick 
solution ready to go by just going sole source because it 
hits--gets the mission, there is a very big reluctance to do it 
because of, understandably, because of the pressure to do 
competition.
    So again, you have to say, is it--what is better for the 
mission?
    We do have waivers in the system that allow seniors to 
waive and say, ``I am going to do sole source for national 
security.'' My experience in recent years is they are very 
reluctant to use them because of the scrutiny it gets.
    So that is an example where you can see both sides of the 
argument, and it is the cumulative effect of all of these 
policy issues.
    Another one is small business. Small business is a very 
important thing for the country. We all get that. But that is 
something that plays a big role in our deliberations as we put 
acquisition strategies together because we know we are going to 
be looked at for our small business numbers.
    And so those are two examples of good, well-understood 
policy things, but their impact on acquisition.
    Mr. Garamendi. Thank you. Yield back.
    The Chairman. Mr. Knight.
    Mr. Knight. Thank you, Mr. Chair. And I will echo Colonel 
Cook: I appreciate the chairman for doing this. This is long 
overdue.
    So I am going to--I am not going to vent because I can't do 
what Colonel Cook did, but I am going to bring up a few things.
    So I firmly believe that the country is risk aversive, and 
I think that that has stifled us in many of the things that we 
have tried to do. The F-22, F-23 program went through a 50-
month culmination to get to a first flight program. I mean, it 
was a perfect example of how you get to stifling America's 
growth.
    And now we have the F-22 and we have gone through a great 
program, even though Congress cut that short way before I was 
here. It is a perfect example of what we shouldn't do.
    The Century Series fighter system was built in the 1950s--
all of them in about 9 years. We put out the F-100 to the F-106 
in about 9 years.
    How we could do that and then we move to the fifth 
generation and it took 50 months to the first flight just 
boggles me.
    But my questions are a little bit anecdotal because we all 
get to talk to Vietnam vets and we all get to talk to our vets 
and our warriors who are in the field.
    I talked to some the other day who used an unmanned system 
that was on the ground and they were doing it for IEDs 
[improvised explosive devices]. And I looked at the controller 
they were using. They were using an Xbox controller. And I 
said, ``Why are you using that?''
    And they said, ``It works better. It just works better.''
    And I said, ``Well, it is not as durable.''
    And he said, ``No, it is definitely not as durable, but you 
know what? I went over and I bought this thing for $29, and if 
it breaks I buy another one for $29.''
    So those kinds of things, you know, how much we act with 
the people in the field who are actually doing the chore I 
think is most important.
    I think Dr. LaPlante brought up a big part, and that is 
maybe SBIR [Small Business Innovation Research] and STTR [Small 
Business Technology Transfer]. If we are going to get the 
cutting edge it might not be from the big companies. It will 
probably be from the smaller companies. And if we don't kind of 
push forward those types of programs, like STTR and SBIR, then 
we might not ever see them.
    So, get to my questions here. Contracts across the board--
and I have talked to many different companies that work either 
in the--in Navy contracts or Air Force contracts or so on and 
so forth, and they say that the contracts are not the same--the 
basic contract, not the full-blown, but kind of the basic DD214 
base sheet.
    Is that something that we can make across the board so that 
when these contracts come up--and maybe not a contract like, 
you know, a new bomber or a new fighter or something, but these 
contracts that are coming out with the Navy, that it looks like 
the Air Force one or it looks like the Army contract so that 
they know how to fill this out? They might not know how to fill 
out sections 2 through 4 million, but they know how to fill out 
the face sheet.
    Ms. Lee. We have certainly heard from a good number of 
people that the complexity is daunting, especially for small 
businesses. So this kind of links to the policy question and 
the underbrush question as we are looking--in fact, in our 
report at the end there is a kind of a list of questions that 
we are asking ourselves and pursuing, but one of those is how 
do we simplify this so people aren't spending all their time 
figuring out how to do business with them?
    And as Mr. Williams said, the barriers to entry team found 
from--I will let him speak on it, but some of the people said, 
``We just cannot afford, from a time standpoint, to invest the 
time that it requires to figure out how to do business with you 
guys when someone else will pick us up just like that and we 
can actually, you know, market our product or service.''
    And so we recognize that somehow that ability to enter 
quickly and to simplify our process has got to be primary. And 
one of the questions we are asking--talk about buttons that 
might be hot here--is: Is competition in the 21st century 
aligned with the Competition in Contracting Act?
    In 1984, competition was way different, and yet now how our 
environment works, every day you can look online and see prices 
change and products change and updates and technology 
available. Not in our system you can't.
    Mr. Williams. Mr. Congressman, I would just offer that 
certainly consistency has its place, clearly across those 
smaller-dollar types of acquisitions. I think what we have to 
think through is balancing between perfect consistency and the 
flexibility that you want a contracting officer to have to go 
out and strike the deal that is available to them on that 
particular day to be able to achieve mission results.
    So clearly there are two sides to that question, and I 
think as we think this through we have to look at what you 
achieve and how much you can achieve through that consistency. 
Because having come from the Defense Contract Management 
Agency, where we administer contracts across the industry, it 
is extremely important and valuable to us to not go from one 
contract issued by the Navy and another contract issued by the 
Air Force and they look completely different at the same 
contractor.
    So that is important, but we also don't want to lose the 
opportunity to have the flexibility necessary based on the deal 
that is needed.
    Mr. Knight. And I appreciate it. My time has run out. Thank 
you, Mr. Chair. I yield back.
    The Chairman. Mr. Veasey.
    Mr. Veasey. Thank you, Mr. Chairman.
    I was hoping that you would be able to elaborate a little 
more on the defense industrial base company mergers you 
mentioned in your report on page 10 and how those are going to 
affect DOD acquisitions in the future.
    Dr. LaPlante. I mean, I can say a few words.
    You have seen all the charts that have--probably over the 
years that show the number of companies in the defense base and 
how they have collapsed. We are sort of at a point now, for 
example, where we are--we really have one major fighter line in 
the country, with another one we are keeping alive every year 
as a country. I mean, we sort of have one guy that builds 
fighters for us, largely. We are trying to keep another one in.
    I mean, that is pretty--that is something to watch, right? 
How did we end up in that situation?
    Another one is vertical lift. All these places you look and 
you see we are one merger or acquisition away from sort of 
having all our eggs--you know, that company does all our ships, 
that company does all our fighters, that one does all our 
tankers. And so at the big--even at the big prime it is a big 
concern that we have.
    And I know it has been in the past couple of years there 
has been discussion about, you know, the way that M&A [mergers 
and acquisitions] is analyzed by the executive branch, they 
look very much more at a tactical issue: Does it directly 
cause, you know, something today, as opposed to look two steps 
ahead and say, ``Well, maybe this acquisition today doesn't 
cause a problem, but the next one combined with this one, you 
have one--only one contractor to build this.''
    So it is something we are very concerned about but we, I 
think, note in the report that this is--we think this is going 
to continue. The pressure is going to continue.
    Mr. Williams. I would only add that I think this gets back 
to the recognition that the entire defense industrial complex 
is completely different than it was, and so when we started off 
discussing the fact that we are dealing with a Cold War-era 
acquisition system, that system today doesn't reflect the fact 
or deal with the fact that we have 70 percent of major programs 
work often is in the subcontract and the supply chain, not at 
the prime. Our system still thinks of it as at the prime level, 
and tearing those barriers down and understanding that is very 
important in being able to be agile in the system.
    Ms. Lee. And in our report we have dubbed that the 
``dynamic defense marketplace'' to try to explain how these 
sands are all shifting and the work is done at different levels 
by--in a very different format.
    Mr. Dyer. Congressman, it is not just the companies that 
are merging and leaving the business; it is the lack of input 
of new companies coming in willing to aggressively do business 
with us. It ties back to this question of contracts, of 
policies, of fairness.
    In my last company we did not have a defense business unit. 
And I had the opportunity to build one from a green field. We 
were required to do major programs of record to have CMMI 
[Capability Maturity Model Integration] level three, the 
software management process, to have earned value management, 
to have AS 9100, to have all these process requirements, which 
I will tell you every one of them in and of themselves made us 
a better company. But as our chairman, Ms. Lee, says, the 
integral of all those together was stifling for a 
nontraditional company.
    I kept track of a company that at that point in time was 
doing less than $100 million a year, and the cost of laying in 
all those processes to do program of record business was 
between $35 million and $40 million. You just can't afford it.
    Mr. Veasey. Well, thank you very much.
    And also your report recommends that the Department align 
its resources more carefully in this constrained budget 
environment that we are living in and we have all heard a lot 
about. And you include in your recommendation critical 
consideration of the Department's use of contracted services, 
and I was hoping that you could elaborate a little bit more on 
the potential inefficiencies in the Department's spending for 
contracted services.
    Mr. Williams. Yes, I think this goes back to the point we 
were making earlier. First of all, recognizing the fact that, 
you know, dollars spent on services has gone beyond what we 
spend on products, and all too often we forget to think through 
the services process.
    From a budgetary perspective, what we have to think through 
is also aligning the budget with the services and the 
contracted services that it requires. So as you go through a 
contract cycle and budgets change and ebb and flow, that 
doesn't line up well with the services that are needed if 
contractors are not sure that they are going to have the 
resources or the budget to continue that contract and they have 
to start thinking about how they lay people off.
    And as you turn around then and switch back and say, ``I 
still need that work,'' the contractors may have let those 
people go; they may not be available at the time. And so we 
have to ensure that the budgetary processes that we use in 
support of services support the labor needs that the 
contractors have to ensure that they have the right workforce 
in place.
    It is those kinds of inefficiencies that challenge the 
service contracting community.
    Mr. Veasey. Thank you. Thank you, Mr. Chairman. Yield back.
    The Chairman. Mr. Gaetz.
    Mr. Gaetz. Thank you, Mr. Chairman.
    I am looking at page 24 and 25 of your report where we 
speak to the mission and its interaction with some of the other 
social objectives that are occasionally injected into the 
acquisitions process, and I am hoping that members of the panel 
can elaborate on the extent to which this drains away from the 
focus on the necessary innovations and actions that the 
warfighter needs to be prepared when they are downrange.
    Dr. LaPlante. Well, I would start by saying--just telling a 
personal anecdote. Right before I became the assistant 
secretary I spent a day with the acquisition university folks 
and they were briefing the 5000 and how acquisition works. And 
I would say, ``Well, what about all the stuff we had to do 
during the wars to go around the system to deliver counter-IED 
capability, you know, where we had to basically throw that 
system out and go around it?''
    They said, ``Yes, that is because this is a peacetime 
system.''
    So I think you are hitting the point, and this is the point 
that the panel is hitting by the mission focus. If you actually 
ask yourself to do the mission and we are essentially at war, 
what are the things that are nice-to-haves and what are the 
things that are essential, and are our priorities straight, 
including on these good-to-do social things?
    And so I think one of the reasons that we are looking at 
this CICA the chairman brought up is because we are looking at 
that foundational precept that competition is, by nature, good.
    Mr. Gaetz. Is it the position of anyone on the panel that 
having our providers and contract partners comply with one-
dollar coins instead of paper currency enhances the mission for 
the warfighter?
    Ms. Lee. Sir, we selected these couple of very simple, 
small examples to demonstrate the underbrush. This is a 
sampling of what is in there, and so what happens, talking 
about time and labor and complexity, is every single 
acquisition has to look at these kind of things and say, ``Yes, 
that has gotta be in there.''
    And then the contractor has to respond: Okay, have I done 
that? Do I have a program for accepting dollar coins? Do I have 
a program? What kind of review is done? What kind of reporting 
do I have to do?
    We specifically selected these very small examples and 
then, also using our supplemental, are showing you exactly how 
we think it would have to be marked up to either eliminate the 
requirement for the Department of Defense or to make a decision 
to eliminate it government-wide. And we submit to you there are 
dozens if not hundreds like this, and we are going to submit 
that package to you and there is going to be some policy 
decisions in that.
    Dr. LaPlante. Suffice to say, we did not select that 
example because we thought it was a great example of public 
policy.
    Mr. Gaetz. Yes. Mr. Chairman, I--given the day, I think in 
my district I have the privilege to represent some of the most 
warfighters in the country in a congressional district, and I 
can't say I have ever interacted with any that say that their 
readiness is enhanced or their safety is enhanced as a 
consequence of a contractor utilizing one-dollar coins.
    In technology and in innovation we see in this country so 
many additives and attributes that have come from small and 
medium-sized companies sufficiently nimble to be able to 
innovate and meet needs in the corporate space and in any other 
spaces. When we have to have such draconian compliance with 
these sort of bizarre social objectives that have been woven 
into our acquisition process, do we crowd out some of the 
innovation opportunities that would be created by those who 
maybe don't have a compliance department to write a texting-
while-driving policy, or recycled-paper policy, or any of these 
other ridiculous examples that you have cited?
    Mr. Williams. We absolutely do, Congressman. As we talk to 
particularly the smaller companies on the leading edge of 
technology, those are the challenges that they present. They 
don't have the capability to put together the oversight 
structures and compliance structures that are necessary to meet 
some of those requirements and it keeps them out of the 
business.
    Dr. LaPlante. I will just add to--Admiral Dyer referred to 
this in his example with iRobot. The government is also really 
clumsy about IP, intellectual property, and small business. We 
don't really--and small startups. They should be scared of us.
    Mr. Gaetz. Thank you, Chairman. I yield back.
    The Chairman. Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman.
    When we talk about mission first in the acquisition 
process, you know, I understand sort of, you know, how do we 
ensure that we are acquiring the goods and services in the most 
cost-effective and efficient and timely manner so that our 
service men and women are ready to fight tonight, tomorrow, and 
in the next decade, and the focus is on, you know, really 
efficient and effective acquisition to meet the needs of the 
warfighter.
    I think that, you know, I mean, I would certainly argue 
that that is an important mission. I commend you for your focus 
in taking on this responsibility.
    We have other missions that are larger and yet related. The 
gentleman from California, in his question, talked about energy 
conservation. That certainly is essential for our national 
security.
    I think that small business inclusion, particularly given 
that small businesses often--offer up and develop some of the 
most innovative technological solutions for our warfighters, so 
ensuring that that secondary public policy that you mentioned 
on page 24 is promoted. It may be secondary, but I hope it is 
not a distant second because these are important public 
policies that go directly to our national security and 
supporting our warfighters.
    So my question is--and you comment on that as--on that, but 
also, just in terms of small business inclusion, there are a 
number of areas where small businesses have challenges. You 
mentioned a few.
    One was knowledge of the contracting process, but there is 
also the lack of monitoring in agencies, including the DOD, of 
subcontracting plans. There is often a lack of access by small 
businesses to contracting officials. There is contract bundling 
that often is an obstacle to small businesses, and a number of 
others.
    Could you comment on what specifically you are looking at 
and what you may be anticipating, in terms of recommendations 
to increase small business inclusion in the DOD acquisition 
process?
    Ms. Lee. Yes, sir. We certainly have heard from a good 
number of small businesses, and have invited them and will 
continue to do so, and in fact, are going to meet with the SBA 
[Small Business Administration] on some issues.
    But what we have heard is time and simplicity, that we are 
torturous in our process, and for these small companies they 
just cannot hang on that long and spend time and effort and 
money and dollars and lose other opportunities. So one of the 
things that certainly is going to benefit small businesses is 
more respect for time.
    The other thing is the simplicity. Not that they are not 
sophisticated, because they absolutely are, but having to hire 
a whole staff just to execute things that really don't deliver 
the mission is not efficient for them and is very difficult for 
them, and actually their competitors, larger business, can do 
that. So it probably puts them at a disadvantage.
    So we think those are at least two things that are going to 
significantly help small businesses. We are looking at SBIR, 
STTR.
    We are also looking at possibly some opportunities where 
small businesses with--would have some technology opportunities 
unique to the Department, and I know that the others may want 
to comment on that.
    Mr. Williams. Yes, Congressman. I think what is really 
critical here is to think about how we can better utilize small 
businesses to achieve that mission, connecting them to the 
mission in terms of technology needs and advancements in the 
Department's warfighting capabilities. So that is one of the 
things that we have really focused on, not just awarding 
dollars for dollars' sake, but ensuring that we connect small 
businesses to the mission.
    We are paying attention, as Ms. Lee said, to the SBIR 
program, STTR program. We are very focused on ensuring that 
small businesses have access, that they know how to get in, 
that they know who to communicate, that they understand and can 
get to understanding those requirements that are coming down 
the line.
    They tell us that they just struggle connecting the dot 
between what they offer and the Department of Defense, and so 
we are looking at that very closely.
    Mr. Brown. Just a quick follow-up, I apologize. But how 
about on contract bundling? Have you seen anything there? Is 
there any comments you have on whether we need to further 
unbundle contracts?
    Mr. Williams. I haven't specifically seen any comments on 
that, and we haven't looked at it yet but that doesn't mean 
that we won't.
    Dr. LaPlante. And I just want to add on to my colleague 
here. The report actually points out that, Congressman, a point 
you made about the connection that small business and 
technology is not a nice-to-have policy, but it actually, done 
right, is essential for our technological superiority. We can't 
be technically superior unless we tap into those folks.
    So that is an example of something which the--where the 
policy itself can be very much aligned with what we are trying 
to do.
    Mr. Dyer. Congressman, just a comment on SBIRs. Many 
companies in Boston and Rockville, around the country, have 
gotten their start on SBIRs. I look at it as the government's 
venture fund.
    And one of the interesting pieces of that: We are willing 
to accept failure in the SBIR arena. Companies can stretch far, 
reach for a brass ring; if they don't make it they still profit 
and they still get up and try again. That is a facet we don't 
really have in a lot of the rest of our acquisition business.
    Mr. Brown. Thank you, Mr. Chairman.
    The Chairman. Mr. Hunter.
    Mr. Hunter. Thanks, Mr. Chairman. Thank you, panel, for 
being here. I guess two questions.
    One, talk to us a little bit about putting somebody in 
charge of anything. It seems what we have done in Congress is 
said, ``Because people screw up''--which people do, including 
us and everybody--``we are going to take the personal 
responsibility element out of acquisition and create so many 
steps and milestones that no one has to take responsibility for 
anything,'' as opposed to saying, ``This guy with his Ph.D. is 
great on space robots; we are going to put him in charge of 
putting us ahead of our peer competitors in space robots,'' or 
any other example on those high-end weapon systems.
    Talk about putting just somebody in charge, because that 
is--in the past 50 years that is one way that we have done a 
lot of our great stuff is by putting one person in charge and 
saying, ``You just do it. And you can fail and try again and 
fail and try again, but we are going to put it on you to get it 
right.''
    Dr. LaPlante. One of the things that I think is really 
clear that comes up all the time is we say we have a program 
manager, PEO [program executive officer], SAE [service 
acquisition executive] chain of command, but certainly there 
are so many people and forces that can influence things that 
are not in that chain of command that don't have any 
accountability.
    As my old colleague in--when I was in the Pentagon, Heidi 
Shyu--my former colleague--used to say as the acquisition 
executive for the Army, in industry the program manager is the 
bus driver to get from A to B and everybody on the bus is to 
help get them from A to B, whether human resources, 
engineering, contracting. When the bus goes in the ditch 
everybody gets out and puts the bus back on the road because it 
is everybody who is in it.
    In the DOD those people all in the back of the bus have 
their own steering wheel, their own brake, they don't have an 
accelerator, and when the bus goes in the ditch the SWAT team 
comes and shoots out the windows and kneecaps the bus driver. 
Why? Because there is money to take it.
    So this idea of putting people in charge and holding them 
accountable--and more importantly, people who are not 
accountable should not be interfering--is very, very important 
to what we--what has to be done.
    Mr. Hunter. What specific recommendations--are you going to 
have specific recommendations? And how many layers can you cut 
out of the process in DOD if you put somebody in charge of 
let's say big systems, big programs?
    Ms. Lee. We are certainly looking at that as far as what is 
causing this, and we have seen in some cases that it appears to 
be functional authorities that perhaps are not appropriately 
placed and how--and that is where I think one of our teams, 
what does go right, is going to see some of the things of how 
that interaction is successful.
    Mr. Dyer. Congressman Hunter, your comment about someone in 
charge I think links back to the question earlier of, is it 
harder now or easier? It is harder. And the erosion of 
authority, power, by the program manager is perhaps a most 
important part of the equation.
    Mr. Hunter. Okay. The second question I have here with the 
last 2 minutes: A lot of these issues arise in the military.
    For instance, the Army pistol, which you guys talk about, 
that--you know, what a joke: 10 years just to put out your 
requirements for a handgun is just stupid. The Distributed 
Common Ground System--billions and billions of dollars when 
they could have used commercial sources to do a lot of that.
    Those are both Army programs. I am not going to pick on the 
Army, but those are--those--the Army acquisition program, and I 
am sure the other services, too, is what I would like to term a 
``self-licking ice cream cone.'' They exist to write things for 
themselves so they can do more things for themselves to do more 
things for themselves, ad nauseam.
    That happens in DOD too, but that--the Army pistol issue 
was not a DOD acquisition issue, it was an Army issue. The 
Distributed Common Ground System was not a DOD issue, it was an 
Army issue.
    Are you guys going to make recommendations on the services? 
And are you going to be service-centric, meaning are you going 
to say, ``Here are problems with the Air Force, here are 
problems with the Army, Navy''? Marine Corps just buys other 
people's stuff so that is different for the most part. But are 
you going to make those recommendations, too?
    Ms. Lee. Our focus is certainly on acquisition, so as they 
impact that, but we are not at this point doing a restructuring 
look at the Department. I think, in fact, that this committee 
has submitted some direction to the Department to make some 
changes themselves.
    So what we are looking at is where that would touch and 
impact acquisition in our charter.
    Mr. Hunter. Okay. All right. Thank you all very much. Mr. 
Chairman, I yield back.
    The Chairman. Ms. Hanabusa.
    Ms. Hanabusa. Thank you, Mr. Chairman. And, Mr. Chairman, I 
do thank you for this hearing. It is unfortunate that I don't 
believe people really recognize the significance of our 
acquisition process.
    I have always felt that the problem with how we operate, 
especially in recent years, is that we actually set the policy 
through acquisition, and that it is very unfortunate because 
our acquisition is so delayed. That is why in your report, 
beginning on page 2 when you recount that in the last 50 years 
there have been more than 100 reports, studies on how DOD 
acquires goods and services, and then you do say--and you quote 
a 1986 Packard Report that talks about a commonsense approach. 
But, you know, these things have been around for a very long 
time and we haven't moved forward.
    We mentioned SBIR. It was this body, by the way--and I was 
privileged to sit on a panel which looked at, quote, the--
really the difficulties in doing business with the defense 
industry, and it was from the small business perspective. And 
one of the issues that was raised there was SBIR was not 
authorized, and it was through the NDAA that it got 
reauthorized and I think it is up pretty soon.
    We look at what Mr. Dyer talked about, which I have always 
been a fan of DARPA, but it all comes back to one area. As you 
look at this and you look forward, how are you going to 
interface the FAR [Federal Acquisition Regulation], which is 
really the governing document for everyone, and what we need, I 
believe, in terms of the flexibility of addressing the policy 
that we are going to set for the defense industry through 
acquisition?
    How are you going to do that unless you are potentially 
looking at an exemption from many of the provisions of the FAR 
and developing a whole acquisition process that is relevant to 
the defense industry in order to give it the flexibility that 
we talk about?
    Ms. Lee.
    Ms. Lee. We have certainly looked at that. In fact, our 
listing of teams in the report, we have a team that is called 
``Reg to Statute Baseline,'' so we have a team of people that 
are actually going through, and it is a torturous meeting--
anyone is welcome to attend--where they go through the FAR 
section by section and trace it back to the origin. We have 
found some very interesting things, some things that are in the 
1947 vintage, et cetera, that remain in the regulation. And for 
each section they are making recommendations on what can be 
eliminated, streamlined.
    And in some cases those policies--to your point exactly--
they are riding on how we spend money in the acquisition 
system. But probably if they are that important a policy can be 
accomplished another way, not necessarily in this system.
    So we are working through that, and that will be part of 
our report is this plethora of activities that are, in fact, 
influencing the way people do business.
    Ms. Hanabusa. But if you don't wipe it out almost--I am not 
advocating for it; I am just saying that if you don't wipe it 
out, so people doing business with the defense industry can go 
to one set of guidelines that has the preemptive power over 
others, you are going to have--I think what Mr. LaPlante was 
talking about--this whole problem with small business--or was 
it Mr. Williams--small business trying to figure this out. And 
they have such a difficulty doing that.
    It is not only the acquisition. It is the compliance part 
of it later. That is also very difficult.
    So my problem in listening to how we are going to change 
the acquisition process is the whole gamut. And what I want to 
hear--and you have only got another year to do this--is how 
radical a change does this body need to expect? Because if we--
if you give us something in a year that is extremely radical, 
we are not going to be able to make the change.
    I love the concept of being able to do this in a DARPA type 
of format. I think that would be absolutely the greatest things 
we can do.
    But the only way we get there is if you actually propose 
that we may have to eliminate or preempt the whole acquisition 
process that is defense-related from the rest of FAR.
    Ms. Lee. That has certainly been discussed. We have 
actually had some people recommend starting from fresh 
baseline. What that does bring is some complexities because, as 
you know, the FAR applies government-wide so that would be--now 
you are a company that wants to do business with DOD but now 
there are new rules for both.
    So we have certainly looked at that and we have had some 
recommendations. We have some possibilities on how to give you 
some information in a more--more regular intervals, and I do 
think there will be some very difficult decisions to make.
    Ms. Hanabusa. Thank you, Mr. Chair. My time is up. I yield 
back.
    The Chairman. Thank you.
    Mr. Gallagher.
    Mr. Gallagher. Thank you, Mr. Chairman. Can I dig into that 
a little more, or related topic? Excuse me.
    I want to thank you all for your work and joining us here 
today. I was especially impressed by the urgency of your 
conclusion. You wrote, ``The time for superficial conversation 
and insubstantial changes to regulations and statutes has 
passed. The Section 809 Panel has no interest in putting 
patches on a broken system. We intend to take a big bite into 
real change rather than just nibble around the edges. To do 
otherwise is to put our military's mission and our Nation's 
safety and security at risk.''
    I couldn't agree more, and I applaud you for saying it in 
such clear language. And I look forward to working with my 
colleagues on the committee and under the chairman's leadership 
to advance big and bold reforms.
    In recent years we have seen both the Defense Business 
Board and a lot of think tank experts call for zero-basing the 
defense acquisition system. This procedure would essentially 
hold that all acquisition regulations are guilty until proven 
innocent that their benefits outweigh their costs.
    And I know you are still in the interim stages of your 
investigation, but can you talk a little bit more about that 
and how seriously you are looking at zero-basing? And in your 
professional estimation, would a--such a wholesale change be 
practically possible?
    Ms. Lee. I think anything is possible. It is do we have the 
will and commitment? And one of the things that happens as we 
dig through, you know, the Federal--there is this belief by 
some that say, ``Oh, you know, the Department did that to 
themselves.''
    And what we are finding is there is a spectrum here. That 
is why we are chasing back every regulation. And it is very 
detailed, as where is the source? Where is the origin?
    And as you see in our supplemental, on those little, tiny 
examples, even those little examples we had to go all the way 
back to a statute or an executive order to say, ``In order to 
change it in the regulation this source document must also be 
changed.'' And so we are providing that information so that it 
actually can be acted upon.
    Some of our prior reports would say, ``Go make this 
happen,'' but without the due diligence to make it happen it is 
very difficult.
    So yes, we have talked about baselining. It is not only the 
Federal Acquisition Regulation; for the Department of Defense 
it is also the 5000 regulation, which, as you know again, is 
governing to our particularly major weapon systems 
acquisitions, but that is one of our findings.
    We seem to like to use that huge, one-size-fits-all on 
everything and that is part of the problem. No decision is made 
yet, but we have discussed that perhaps we have segmented buys, 
these--you know, where these long-term platforms do require a 
great deal of diligence, a great deal of commitment, but some 
of this other technology we should be doing like this. And when 
you apply this same process to that, neither one benefits 
appropriately.
    Dr. LaPlante. I would just add to the--our chair's comment, 
to her credit, the chair--and--is that the way the panel is 
working is it is working simultaneously with the big concept 
ideas, the be bold part. But we know being bold and vague 
doesn't help too much. So while we are being bold at the 
concept level and reevaluating fundamental assumptions going 
back decades, we also have this team that our chairwoman said 
is actually going to prepare to go back and do line-by-line 
through the regulations to make the changes or recommendations 
and go back to the sources.
    So we give to you-all--do that work for you. So it is the 
simultaneously--you have to really do both.
    Mr. Dyer. Mr. Congressman, I will preface this by saying we 
don't know the answer yet, but one of the areas of research is 
do successful programs succeed because they are walks, because 
they are experts in the FAR and how to get through the wickets? 
Or are they just more courageous in their culture in using the 
freedoms that are allowed within an existing system? Which 
works best?
    And I think that will inform the question of zero-basing 
versus more freedom or more see room.
    Mr. Gallagher. Okay. Well, by the time I ask my next 
question and you answer I will have exceeded my time, so in 
deference to the chairman I won't do that.
    I would just say that--maybe because I am new and not yet 
jaded, but I think you have a lot of allies here when it comes 
to embracing bold reform, and so I encourage you to continue 
down that path and hopefully we can muster up the will power 
you referenced to be a partner in that.
    And so, Mr. Chairman, I yield.
    The Chairman. Ms. Shea-Porter.
    Ms. Shea-Porter. Thank you. And thank you, Mr. Chairman, 
for having this hearing. It is incredibly important.
    First I wanted to make a comment.
    Mr. Dyer, I was very disturbed but I heard before from a 
CEO [chief executive officer] the kind of statement that you 
made when they said, ``What is it about capitalism that you 
don't understand?'' And I was thinking, well, we wouldn't have 
capitalism if we didn't have this great democracy.
    And I am wondering where--as I asked my friend who is a 
CEO, and I was talking to him about parts and outsourcing, et 
cetera, and the concerns, and he said, ``Well, I have to answer 
to stockholders.''
    And I said to him, ``Well, do you have an office of 
patriotism?''
    And so you touched on that. So how deep a problem is this? 
Have we, like, lost our sense that while the profit is very 
important--obviously, people need to have profit--have we lost 
our sense of also responsibility and the patriotism? I mean, 
you are standing here as patriots and saying, you know, we need 
to clean this up, and I agree with you. But I have had 6 years 
on this committee and this is a fairly familiar conversation 
that we are having right now.
    So I just wanted to put that out there and see if anybody 
wanted to comment on that. Do we need to have a discussion, a 
revisit, a review of, you know, who we are and why we are doing 
this?
    Mr. Dyer. Well, it is an important question, but it is an 
issue of erosion of dominance and timing. I think American 
companies--high-tech companies--if they believe we are in a 
genuine extremis, if in a World War II kind of a situation, as 
Congressman Russell mentioned, I am absolutely confident they 
will lay aside everything else and come to the support of the 
Nation in a very patriotic sense.
    The problem, though, is the time constant of being prepared 
today for an erosion of dominance and the time we will have to 
harness that patriotism. Companies that are on their way to 
being publicly traded companies benefit by operating as a 
public company before they go there. We would benefit by 
operating as a warfighting acquisition community before we have 
to do it.
    Mr. Williams. Congresswoman----
    Ms. Lee. Go ahead----
    Well, I would also like to just mention one of the things 
in our report that is a sensitive subject is the balance of 
oversight. You notice that I use a term that makes everybody 
uncomfortable, which is the--we need to decriminalize commerce.
    We many times go into agreements expecting that there is 
something nefarious about a company who actually wants to be 
treated fairly, is concerned about their reputation, wants to 
make a fair product and profit, but yet if they make one little 
mistake or they don't sign up--I mean, some recent decisions 
where every certification is subject to treble damages, 
companies sit back and say, ``Wait. I don't know if I can do 
this because of the reputational risk and the very onerous 
application of remedy for something that might be--that 
certainly is unintentional and may be monitored.''
    So I think that is a contributor and certainly I think----
    Ms. Shea-Porter. That is a fair comment. And maybe we need 
to have this discussion and bring in these companies and sit 
and talk about all of this and what the needs are in a 
different setting.
    And I have one last question: We--our procurement technical 
assistance program. I am excited about these young new 
companies with their emerging technology, et cetera, but I know 
it is difficult. Are we utilizing this? Are they utilizing this 
enough? Are they aware of it? Are we making sure they are aware 
of it?
    Mr. Williams. Congresswoman, we are looking exactly at that 
question. In fact, as we think about our small business issues 
and things of that matter--that nature, we want to understand 
just exactly what you are asking. So we have got a group of 
folks who are going to go out and spend some time with PTACs 
[Procurement Technical Assistance Centers] and understanding 
how much involved and what they are doing to connect small 
businesses to the Department.
    Ms. Shea-Porter. Right. So because safety and our security 
is a responsibility for all of us, and so thank you very much 
for the work that you are doing. And I yield back.
    The Chairman. Mr. Bridenstine.
    Mr. Bridenstine. Thank you, Mr. Chairman. And thank you, to 
our panel, for the great work you are doing on behalf of our 
country.
    I wanted to share with you one of my concerns in the 
acquisition process. It starts when requirements are generated, 
and then we look through all the different ways to fill those 
requirements, and in many cases there is a commercial service 
that could be purchased but it only meets 95 percent of the 
requirements, and so since it doesn't meet 100 percent of the 
requirements we end up immediately moving to a program where 
the government is purchasing, owning, and operating an entire 
system to meet really what is only 5 percent that commercial 
off-the-shelf can't provide as a service. And, of course, that 
adds costs, complexity, time, effort, and challenges.
    And I see this especially in space-based communications. 
There is a lot of opportunity for us to lease capacity from 
commercial operators to change the way we do acquisitions of 
space-based communications.
    But you also see it--and I know, Dr. LaPlante, you and I 
have talked in the past about avionics modernization in 
aircraft, and I am not going to bring up the C-130 at all 
today.
    But I will tell you, you know, we see it when we need to do 
a modernization of a cockpit and there are commercial off-the-
shelf capabilities and then there is this MILSPEC and we have 
to meet a very specific military specification that, you know, 
has all these requirements for heat and vibration and all these 
hardened kind of capabilities. And then you look at the 
aircraft that this avionics modernization is going to go into 
and it is a trainer, a T-1, for example, which is not going to 
be flying into combat at all.
    But we see these kind of programs where there is a 95 
percent solution. And sometimes we add requirements that aren't 
necessary, and other times if we just included commercial off-
the-shelf in the process ahead of time they could save us a ton 
of money and a ton of time and they could do things--I know one 
of the things I advocate for is for the protected tactical 
waveform, but that is one example of a lot of different 
opportunities, if we can involve commercial off-the-shelf ahead 
of time we can ultimately save time and money.
    And I would like to hear your feedback on these things.
    Dr. LaPlante. I will start by saying I think you are 
hitting a key point. There is a type of analysis--it is going 
to sound very bureaucratic, but called cost capability 
analysis. It is really monetizing requirements, basically 
saying--to your point about, ``This is going to cost you to get 
95 percent; to get to 100 percent is going to double the cost. 
Okay, do you really want to do that?''
    That analysis, what I just--monetizing requirements 
generally does not happen. If it does happen it is not done 
robustly because we tend to have these serial processes where 
the requirements get finished, they get stamped, they get 
released, and then the acquisition people roll up their sleeves 
and start working.
    No. They should have gone back and forth on this 
monetization.
    The other piece, I think, which you would appreciate: It 
should be transparent. It should be public as best as possible, 
including the industry, how much these requirements are 
costing. Because then people will say, ``Really? You are really 
going to double the cost of that just for that last 5 
percent?'' And I think that piece is not done.
    And there are pilots being done around. We did one in the 
Air Force when I was there on EPAWSS [Eagle Passive Active 
Warning Survivability System] for F-15. I recommend you look at 
it. We had one lieutenant or captain in the Air Force probably 
saved--he saved us a ton of money by just going back to ACC 
[Air Combat Command] and saying, ``Look how much more this is 
costing for this requirement.'' And they said, ``Oh, okay. 
Never mind.''
    So this is really important.
    Mr. Bridenstine. And in many cases what you find in these 
programs where you are trying to finish that last 5 percent, we 
come to the end of the useful life of one satellite program and 
now in order to maintain that extra 5 percent, whether it is 
protection or some other kind of capability that is necessary 
for the military but not necessarily for--necessary for 
commercial, we enter into an entirely new military, you know, 
government-purchased, government-owned, government-operated 
system when it is not necessary if we would just include 
commercial in what we were trying to accomplish to begin with.
    Some of the folks that I have talked to have described it 
as the ``tyranny of the program of record,'' where you finish 
one program of record and you go on to the next program of 
record without looking at what are all the options available to 
us. And I know that is what the analysis of alternatives kind 
of process is all about, but I don't think that always that is 
as utilized as it ought to be, as you articulated just now.
    So with that, Mr. Chairman, I thank you for the time. I 
yield back.
    The Chairman. Thank you. Mr. Courtney.
    Mr. Courtney. Thank you, Mr. Chairman. And thank you, to 
all the witnesses, for being here and for the report, which, 
again, really is a serious analysis of the challenge that we 
face.
    I represent southeastern Connecticut, which a few years ago 
we celebrated the 60th anniversary of the launch of the 
Nautilus, and the story of Hyman Rickover, Admiral Rickover, in 
terms of how he basically went around the Navy and the Pentagon 
to bring to fruition. It was a 5-year gap in time from the 
first lightbulb that was powered by nuclear power to the launch 
of the Nautilus.
    Inside the Navy they were telling him it would take 75 
years before they would ever see a nuclear-powered vessel and, 
again, he actually went to Congress to find ways to get around 
the, you know, the Pentagon sort of bureaucracy.
    And, you know, looking at the path forward at the end of 
your report in terms of just, you know, ideas that you are 
looking at in terms of thinking bold and moving forward, how 
can Congress sort of help with that?
    I mean, other than, you know, obviously, I am sure the 
chairman who is so passionate about this is going to do what he 
can to authorize, but, you know, obviously that story, which is 
probably going to never be repeated again--maybe not--but, you 
know, Congress really was a very big sort of player in terms of 
an advance that I think has really stood the test of time. I 
mean, our Navy still, I think, you know, surpasses in terms of 
capability because of that incredible genius and determination, 
you know, that took place 60-some-plus years ago.
    So I don't know if you have any sort of comments about, you 
know, ways this branch of government can sort of, you know, 
kind of help sort of goose the process.
    Mr. Williams. Yes, Congressman. I think your question 
speaks to as we put together a set of bold recommendations, how 
do we make sure that they are fully implemented to achieve the 
success that we collectively believe is important? And I think 
there is a series of things that have to go on.
    Obviously within the Department there has to be a 
phenomenal change in management activity established and we 
have to inculcate this kind of thinking philosophically into 
our training programs.
    I think the Congress has to provide the sort of stick-to-
itiveness from sort of an independent perspective, you know, of 
even thought, you know, there needs to be a continual, ongoing, 
independent authority that looks at, are we actually 
implementing the way that the Congress believes these kinds of 
recommendations should be implemented? Because typically what 
seems to happen is as we go through administrations and changes 
of cycles people lose priorities and they refocus and we start 
to get away from things that we collectively believed were 
important before we even put them in place or--and can 
understand whether or not they make a difference.
    So I think there are some efforts that can put--be put 
together to help us get down the road and make these things 
effective.
    Mr. Dyer. Congressman, there are similar stories today of 
tremendous success at great speed, but they are from Amazon and 
from Facebook and from Google. America knows how to do this. We 
just need to make it attractive to do it for the common good.
    Dr. LaPlante. And I would have to say, I just credit this 
committee and the chairman of this committee for your steady 
attention on this. It is making a big, big difference. It is. 
It is a hard slog, you know, it is a hard slog.
    The other thing I really commend doing--and I think this 
committee has done this over the years--stick to root cause. 
Treat the underlying disease, not the symptoms. That is one 
thing we are always asking ourselves.
    But again, I think to Admiral Dyer's point, you guys all 
know you go out to the Valley and you sit down with Facebook, 
Google, and the companies, and you look at what they are doing 
and you say, ``We can still do this stuff. It is just we gotta 
be doing it in the government.''
    The Chairman. Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. I would like to thank 
the witnesses for joining us today.
    Dr. LaPlante, I want to begin with you. I recently had a 
meeting with the CEO of one of the most successful defense 
contractors in the world and I asked him what goes into a 
successful contract. And he outlined three items: requirement 
stability, financial stability, and execution.
    And I wanted to get your perspective. Obviously through the 
acquisition process in the Air Force you have seen a lot 
through the years. Give me your perspective: What do we do to 
address the first item he points out, which is requirement 
stability? How do we push out requirement creep?
    And you have spoken a little bit about that but I want to 
get a little more specific in your ideas about how that can 
happen.
    Dr. LaPlante. Yes. Actually, I think my experience in the 
last 3 years when I was in the Pentagon, for the big weapon 
systems programs I didn't see requirements creep. You know, the 
cliche is that the four-star comes running in and pounds on 
your desk and says, ``Oh, never mind. I don't want the fighter 
to do this; I want it to do that.'' That doesn't happen.
    In fact, if you look at the bomber, what is now called the 
B-21, those requirements--they were classified requirements, 
mostly--were signed out by Robert Gates, Secretary of Defense, 
in 2011 and they remained completely unchanged to this day. And 
that was really important for this industry because what 
industry will tell you is, finalize your requirements, get it 
to us early, don't change them, and give us stability in 
funding and we will execute to it.
    The only addition I would make, which is something that I 
am still struggling with and I know the panel is struggling 
with, is the commercial companies that are moving fast don't 
pretend that they are going to know all the requirements when 
they start something fast.
    Mr. Wittman. Right.
    Dr. LaPlante. So I think there are some activities with 
technology that you have to have a much more give-and-take on 
requirements as you build it, sort of the discussion we were 
just having with Congressman Bridenstine.
    But I think for the big weapons platforms it is exactly 
right. What industry hates is they hate the fact that you are 
modifying the requirements a month before you drop the RFP. 
They say, ``Wait a second. I can't invest.''
    So that is really hard. And it takes discipline not to 
change requirements.
    In fact, in the tanker--the tanker is a fixed-price 
contract--my job and the job of the Air Force was never change 
the requirement. Not once. And so far they have managed to do 
that. So it is very important.
    Mr. Wittman. Is there more we can do up front with certain 
elements in the industry in the RDT&E [research, development, 
test, and evaluation] to say, ``Give us your thoughts and ideas 
about what we can accomplish''?
    And obviously within the Pentagon there needs to be a 
baseline about what the needs are, but as Mr. Bridenstine spoke 
about too, it is a matter of, you know, what can you do quickly 
and what can you do most cost-effectively not just in the 
acquisition process but also the life cycle?
    And if you can take an off-the-shelf technology, many 
times, you know, value, life-cycle cost, all are much, much 
better in that realm than something that is driven to 100 
percent requirement.
    Dr. LaPlante. Right. I believe very strongly that you have 
to do the kind of work that we were discussing with Congressman 
Bridenstine very early before you get the big acquisition. You 
go back and forth and say, ``What can be done commercially? 
What can be done? Can we go back and forth?''
    That has to be transparent, as I said, with industry.
    The interesting thing is in the Pentagon you are 
discouraged from doing that because you are interacting with 
industry while you are forming the requirements. And people 
used to ask me, ``Well, isn't industry going to steer your--the 
requirements to their solution?'' You know, I said, ``Well, of 
course they are going to but let's at least be transparent 
about it. Let them be an advocate for their solution.''
    But that has all gotta be done at the very beginning. And 
then once you are done then you don't change the requirements.
    Mr. Wittman. I agree.
    Mr. Williams, let me ask a little bit different track 
question. Give me your perspective on the use of incremental 
funding, especially for larger programs where we expend dollars 
over a number of years and being able to leverage the most out 
of the dollars that we allocate in any one year. Give me your 
perspective on that.
    Mr. Williams. It is absolutely critical. I mean, that gives 
us the funding flexibility that we need as we look across the 
years. I mean, this question of how we think about requirements 
and the changes that need to occur across the technology space 
as it goes forward requires that we are able to fund contracts 
based on the need as it exists and as it changes.
    We all too often get stuck in a requirements set, 
particularly in the high-tech community where things are 
changing rapidly, and the nature of the funding, the 
incremental approach would be critical to allowing us to do 
that in a more flexible way.
    Mr. Wittman. Very good. Admiral Dyer, any thoughts about 
requirements creep or incremental funding?
    Mr. Dyer. I am often asked, after having spent a long 
career in defense acquisition and then in my corporate world, 
``What are the differences?''
    You have, I think, touched one of the primary differences 
that I observe, and that is the ability to--for commercial 
industry to sit down with suppliers, to have a discussion about 
what technology can bring to the need that the company has. And 
that is an intense dialogue that arrives at an understanding of 
requirements and contract much earlier and much faster than we 
do it in government.
    Why is it hard for us in government? I always suck wind 
through my teeth when I say this, but we are so worried about 
the appearance of fairness that sometimes we act not in the 
best interest of the Nation.
    Mr. Wittman. Very good. Thank you, Mr. Chairman. I yield 
back.
    The Chairman. Mr. Wilson,
    Mr. Wilson. Thank you, Mr. Chairman. And, Chair Lee and 
fellow commissioners, thank you very much for your thoughtful 
report--interim report. We appreciate your dedication and hard 
work.
    And, Madam Chair, led by Chairman Mac Thornberry the House 
Armed Services Committee has been concerned about the 
cumbersome and time-consuming acquisition process that has 
hindered the Department's ability to get innovative technology 
to the warfighter quickly enough to make a difference. In your 
view, is the Department competitive in getting the best 
technology to the warfighter in the theater, and do you have 
any recommendations to expedite?
    Ms. Lee. That certainly is a thrust of our report.
    My concern, as we have heard from many of the members here, 
is we do have a very powerful military. We don't want to in any 
way, shape, or form belittle what has been accomplished. But 
what we are saying is the environment has changed so 
substantially that that era and that approach needs to be 
modernized to address the emerging and changing threat and the 
changing dynamic marketplace.
    I think time is critical, and we have got to figure out a 
way to do these things much more quickly.
    Mr. Wilson. And I wish you well because in my National 
Guard service we work with communications, the SINCGAR [Single 
Channel Ground and Airborne Radio] system. And it certainly 
occurred to me, as--even as a JAG [Judge Advocate General] 
officer, that we could do better, and with more advanced 
technology. And so I look forward to your recommendations 
particularly on communications.
    And, Secretary LaPlante, the report indicated the growing 
and changing global defense marketplace where companies are no 
longer dependent on the Department of Defense for contracts and 
parts for major systems are sometimes built all over the world. 
Specifically, the report references the F-35 is produced in 
part by eight foreign nations.
    Is your view that all components should be manufactured in 
the United States, or is multinational manufacturing helpful 
while securing our technological advantage? And keeping in 
mind, too, that the F-35 multinational manufacturer creates an 
international market.
    Dr. LaPlante. Yes, that is a--it is a great question.
    I think it was just the other day that the first F-35 was 
built in Italy was just rolled out, if I remember right, and it 
is going to be produced, I believe, also in Japan. So yes, 
there is--the international aspect of the F-35 program is a 
huge strength of the program, frankly.
    It is a huge strength for multiple reasons. One is we want 
our allies and partners to be buying the airplane because it is 
the best airplane in the world for that kind of plane, and we 
are going to fight with them. We certainly don't want them to 
go to other people.
    I was going to the airshows; I know some of you go to these 
airshows. Was at the last one I went to as assistant secretary 
was Dubai. The Chinese push of their military equipment there 
was very strong. They had their replica of the F-35, the J-31; 
they had their version of the MQ-9.
    You know, they were--so it is very clear we don't want 
other countries to buy their stuff; we want it to buy the F-35. 
So it is a strength of the F-35.
    The question that you are getting at, which is the risk 
equation, which is the supply chain risk, and do we have an 
understanding of the supply chain and its global origins. I 
think where technology is going, without getting too technical 
here, the idea of having a root of trust in, for example, our 
hardware, regardless of where it is developed, is something 
that we as technologists have to give everybody because we are 
at a point even in cellular communications just in this country 
where the root of trust of the cellular communications may be 
produced in China.
    So it is a much bigger issue than just with the military, 
and I think the technical solution to it is understand the 
supply chain, understand how the root of trust is ensured, 
meaning how do we understand the sanctity of what has been done 
or not to that supply chain. That is not easy, but I think the 
answer of pulling everything back in and not having F-35s 
produced globally is not the right answer.
    Mr. Wilson. And I appreciate particularly the concern of 
security of maintaining, that indeed what is produced is not 
copied by some other country that might come to mind.
    And for Commissioners Williams and Dyer, your interim 
report indicates that DOD asked if it could dictate terms to 
the industry, driving many companies not to be a part of the 
defense market. Can you elaborate on what DOD can do to change 
this pattern?
    Mr. Williams. Yes. I think we have to look particularly at 
the oversight structure that is involved in managing and 
supporting contracts. The whole issue of compliance centered 
around audit requirements, and pricing, and things of that 
nature is robust opportunity because when you think about the 
timeframe that it takes and the amount of resources that 
industry has to bring to bear to meet those compliance 
requirements, it often keeps them from wanting to do business 
or giving them the ability to do business with the Department.
    That is one of the things we hear consistently as we talk 
to companies out there who want to do business but have chosen 
not to.
    Mr. Wilson. Thank you very much.
    Mr. Dyer. Congressman Wilson, I should mention especially 
for you, sir, that the panel is well-led, and as you may or may 
not know, our chairperson, Ms. Lee, is from South Carolina. So 
I just wanted to point that out.
    Mr. Wilson. That should have been brought up first. I can't 
believe it. I always count on the chairman to bring up 
important issues. Thank you very much.
    [Laughter.]
    Mr. Dyer. Sir, in answer to your question, we have to 
facilitate a conversation between high-tech nontraditional 
industry and DOD. You and I recently have discussed the role 
that consortia may be able to provide in terms of bringing in 
refreshed R&D [research and development], to expand the base, 
and to find those kinds of successes that we see at Amazon, 
Google, et cetera, and bring them back into DOD.
    The Chairman. Ms. Stefanik.
    Ms. Stefanik. Thank you, Mr. Chairman. Thank you, to our 
witnesses, for being here today.
    In today's economy the pace of technological advancements 
is growing exponentially, and in the interim report it--you 
write, quote--``The acquisition process must be agile enough to 
respond to rapidly evolving threats and fast enough to develop 
and deliver new capabilities within the arc of emerging 
threats.'' And my particular interest is in the area of the 
cyber domain.
    Could you discuss the reform measures you have identified 
that better achieve this agile system to respond to emerging 
threats specifically in the cyber domain?
    Dr. LaPlante. I don't know if the commission has weighed in 
yet on cyber. I will give you some of my own views that are 
not--the commission hasn't done it, but the others can chime 
in.
    Let's talk about the--what makes it hard for somebody who 
is trying to do damage to you with cyber. What makes it hard 
for them?
    Couple things. One, if you are changing all the time--if I 
am putting out, you know, hundreds of versions of Google every 
2 days, or Facebook, whatever, for whatever reason I am doing 
it, that has gotta be hard on an attacker, number one.
    The other is heterogeneity, meaning things are different. 
We tend to, for economies of scale, make things the same.
    I think those two design principles--speed, which is 
already happening anyway in the commercial world, constant 
development, constant change, constant pushing--literally 
software pushed out overnight, and then look at the design and 
heterogeneity. I think those key aspects of design will keep us 
ahead in cyber because the benefits we get from the Facebooks 
and the Googles and our mobile apps is great for society. It 
brings with it risks, but we have to manage it into our system.
    And so I think that is a key point for cyber.
    Ms. Lee. And I think what we also see in our report, there 
is a mismatch between that ability to constantly change when we 
want to well-meaning, you know, have this process where it is 
full and open, everybody can propose. That takes time and 
really impacts the ability to be flexible and make those 
changes.
    So we are asking ourselves not specifically from cyber--
although we have looked at from a technology standpoint--is 
there a better way to have a competitive underpinning but a 
much more flexible response?
    Dr. LaPlante. That is part of another activity. I have been 
looking at this, and just to add to that, I think it is Google 
says that they change half their software every month. Now, 
what ``change'' means--maybe small change, big change. Cars are 
pushing software out overnight, okay?
    So the idea that we could move into a system, could you 
imagine pushing out continuously software globally to the F-35 
mission systems? People shudder at that.
    On the other hand, for lots of reasons, including security, 
that may be where we need to go. That certainly is where the 
commercial world is going.
    Ms. Stefanik. Just to follow up, Dr. LaPlante, you talked 
about--and Ms. Lee--you spoke about how you are not 
specifically looking at cyber or haven't yet as part of--it 
wasn't included in this interim report. I think that is really 
important.
    In my capacity as chairwoman of the Emerging Threats 
Subcommittee, Cyber Command falls under our jurisdiction, and 
acquisition reforms, we need to look critically on what our 
proposals are and how they would impact cyber because, as I 
said, the pace of development is much more rapid and we need to 
ensure that we are investing in our cyber readiness, in our 
cyber defenses.
    So a year from now I am hopeful that you can have a 
specific response related to cyber.
    Any comments? I would like to get your feedback on that.
    Ms. Lee. We will certainly put it on our list here and see 
how to best go about that.
    Ms. Stefanik. Okay. Thank you, Ms. Lee.
    Ms. Lee. Look forward to working with you on it.
    Dr. LaPlante. I would also commend--there is some great 
work that is being done by the Defense Science Board on cyber, 
and they are--and I would also get this committee to look at 
that, including the resiliency of our weapon systems on all 
these issues. Whether this panel gets to it, I leave it to our 
chair.
    But we appreciate the concern. Obviously cyber is at the 
top of all of our minds.
    Ms. Stefanik. Okay. Thank you. I yield back.
    The Chairman. Mr. Russell.
    Mr. Russell. Thank you, Mr. Chairman. And thank you for 
this great report, but it is really on us collectively to do 
something about it.
    I guess, you know, as I look at the threats, powerful 
nations with economies that have a totalitarian type of system, 
they can streamline acquisition very quickly. The only way we 
will be able to leverage and stay ahead is through our 
innovation.
    And yet, we have seen 300--by your own report--300 primes 
now reduced to 5 mega-primes. We see an archaic system where 
small businesses that really aren't small anymore, leveraging 
our rules where they are a $2 billion to $3 billion company, 
and they are still taking small business incentives. I haven't 
figured out how they do that.
    And as I look at the funding of concepts with no real 
delivery. You have small companies out there that are doing 
incredible innovation but, you know, a mega-prime will step in 
and, ``Well, for $200 million we will come up with a concept 
and a plan and we will get back to you,'' and often those 
dollars will get siphoned off.
    Mid-sized companies, the few that remain, are investing 
their own venture capital and they are putting their investment 
and innovation in, and then when they come to the table with 
fantastic ways to leverage the future, we have the simplified 
acquisition program, which is no longer simplified, and then 
our FARs. You know, my own thinking is we need to throw out all 
of the FARs, just throw them all out, and then make the case 
for which ones need to go back in instead of the other way 
around, and I think we might be better served.
    But with regard to incentives, I was caught in your report 
where you say, ``Without changing this mentality of incentives 
we will never have reform occur.'' And I agree with that.
    And on that note, the Defense Innovation Unit Experimental, 
that is something that we have seen some amazing things happen 
from. You know, I think of these innovative smaller companies 
that gave us the Predator, the OCAS [Obstacle Collision 
Avoidance] system, I mean, things that are totally changing in 
how we fight and deal with future threats.
    Would you all speak to the DIUx program? Because there has, 
you know, been kind of the--it has been vogue to try to want to 
crush that, and I would like your opinion on that.
    Dr. LaPlante. I will just say a few words about it. I don't 
know if the panel is--or the commission is looking specifically 
at DIUx. What the commission is looking at, which will 
hopefully answer your question, is things that DUIx is trying. 
And so anybody who is trying the following, we commend them 
because it is experimentation.
    What they are doing is they are trying things like other 
transactional authority. Remember earlier we were talking about 
how hard it is to do contracting?
    Mr. Russell. Right.
    Dr. LaPlante. Well, the DUIxes, both out in California and 
in Boston, and maybe the other one, too, is trying to get 
people on contract sometimes within weeks and using the 
authorities that they have. And just by doing that alone they 
are providing a huge value and learning the lessons for it.
    So I would commend any activity--and I think the committee 
would--any activity that the Department has that is trying 
these experiments of using existing authorities to do things 
differently or faster.
    And I could turn it over to my colleagues for other 
comments.
    Mr. Williams. Congressman, we have spoken to DIUx a little 
bit, and they are doing some tremendous things and they are 
taking advantage of authorities that exist to allow them to 
move fast. OTs [Other Transactions] are one example.
    The question that I think is important for all of us is why 
aren't we able to do that in other parts of the Department? You 
know, why do you have to have these sort of specialized groups 
to do that?
    And I think that is the root question here because 
obviously one organization is limited in its capabilities and 
what it can do, and we need to think that through. I think 
DIUx, working with the services, you know, obtain funding to go 
acquire things that the services need, but you have to ask 
yourself, why do the services need to turn it over to DIUx? Why 
aren't they able to do that themselves?
    Mr. Russell. Yes. I couldn't agree more. And I think, you 
know, when we have a national emergency we see things like the 
Rapid Fielding Initiative, DIUx, these different programs that 
meet the emergency, where industry, as you have all commented 
on, in leveraging their off-the-shelf technologies, it is like, 
``Well, okay, how could we harden that?'' Or better yet, how 
could we adapt our systems, you know?
    And the warriors out there in the field, they figure out 
how to do that stuff all the time. And I guess, you know, I am 
heartened to hear you say that and I would hope, Mr. Chairman, 
that as we look into the future on contracting reform we don't 
kill the nascent systems that really help us get to that.
    And then I am very interested, Ms. Lee, in some of these 
FAR eliminations, and I hope you will let us reach out to your 
office because we will have an axe in hand and drop amendments. 
So I hope to be contacting you.
    Thank you, Mr. Chairman.
    Ms. Lee. We look forward to that. Thank you.
    The Chairman. Ms. Lee, we really hadn't talked about 
timing. I mentioned at the beginning that through no fault of 
the commission you all kind of got off to a slow start. What 
are you looking at now?
    Ms. Lee. Mr. Chairman, thank you for acknowledging that. We 
did get a slow start and we very much appreciate the 2017 NDAA 
where you clarified that we are an independent panel and that, 
in fact, the panel had the authority to use 5 U.S.C. [United 
States Code] 3161, which we needed in order to hire our staff 
and also to accept industry volunteers, or volunteers. So that 
has been very fruitful.
    However, we--even though we were sworn in in August of 2016 
we couldn't hire any of our small staff until December of 2016, 
and so we got internet in March and had quite a celebration 
over that. So that is a very long way of saying we would like 
to have 2 full years to do our work, and so with a start in 
about the, you know, January timeframe, we would like very much 
to go to January of 2019 to give our report. I think that 
aligns with your calendar.
    We are discussing some possibility of some interim 
supplemental reports, and then the other thing would be however 
long you would want us to be available after that to take your 
actions and to do additional work.
    The Chairman. Well, we certainly want to work with you on 
it. Obviously we want to take advantage of this gathering of 
expertise that you have assembled on the commission. At the 
same time, I think we feel the same sense of urgency that you 
all have so eloquently expressed here today.
    So you want to get it right but you also want to push out 
boldly, and so we want to work with you on timing. My personal 
opinion is that maybe some interim reports help because that 
gives us some meat to work with while you continue to work on 
the other items.
    Ms. Lee. Thank you, Mr. Chairman. We would also really 
like--I would like to acknowledge the Army has been very 
helpful, forthcoming with detailees and help.
    We are working with the other services and we are also 
working a little on the budget challenge. So those are the 
challenges that remain before us.
    The Chairman. Well, I would just say in general that I am 
incredibly encouraged by the last 2 hours. I have heard the 
same things that you all have referenced, that, ``Oh, just 
another study on acquisition. Everybody has tried. You are 
beating your head against the wall.''
    Number one, I don't think any of us can accept what we have 
today because we know we can't defend the country that way. But 
secondly, I am really impressed each of you bring particular 
expertise based on your experience in various places in the 
system, and you feel that urgency and can bring your expertise 
to bear with an urgency to get it fixed.
    So, you know, I know we will never have a perfect system, 
but on the other hand, I am very encouraged. And you could tell 
from the questions on both sides of the aisle, there are 
members of this committee that are just as determined as you 
all are to work to make this better. And I think together, with 
your work product, our continued efforts, we definitely can.
    And so I want to thank you for what you have done so far, 
being here for the--today, the interim report, and especially 
for the work that you are going to do in the future.
    Hearing stands adjourned.
    [Whereupon, at 11:50 a.m., the committee was adjourned.]



      
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