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

                             [H.A.S.C. No. 115-102]

                     PROMOTING DOD'S CULTURE OF INNOVATION
                                   __________

                          COMMITTEE ON ARMED SERVICES
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION
                                   __________

                                  HEARING HELD
                                 APRIL 17, 2018

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   ___________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    30-683                     WASHINGTON : 2019

                          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
    BILL SHUSTER, Pennsylvania           MADELEINE Z. BORDALLO, Guam
    K. MICHAEL CONAWAY, Texas            JOE COURTNEY, Connecticut
    DOUG LAMBORN, Colorado               NIKI TSONGAS, Massachusetts
    ROBERT J. WITTMAN, Virginia          JOHN GARAMENDI, California
    DUNCAN HUNTER, California            JACKIE SPEIER, California
    MIKE COFFMAN, Colorado               MARC A. VEASEY, Texas
    VICKY HARTZLER, Missouri             TULSI GABBARD, Hawaii
    AUSTIN SCOTT, Georgia                BETO O'ROURKE, Texas
    MO BROOKS, Alabama                   DONALD NORCROSS, New Jersey
    PAUL COOK, California                RUBEN GALLEGO, Arizona
    JIM BRIDENSTINE, Oklahoma            SETH MOULTON, Massachusetts
    BRAD R. WENSTRUP, Ohio               COLLEEN HANABUSA, Hawaii
    BRADLEY BYRNE, Alabama               CAROL SHEA-PORTER, New Hampshire
    SAM GRAVES, Missouri                 JACKY ROSEN, Nevada
    ELISE M. STEFANIK, New York          A. DONALD McEACHIN, Virginia
    MARTHA McSALLY, Arizona              SALUD O. CARBAJAL, California
    STEPHEN KNIGHT, California           ANTHONY G. BROWN, Maryland
    STEVE RUSSELL, Oklahoma              STEPHANIE N. MURPHY, Florida
    SCOTT DesJARLAIS, Tennessee          RO KHANNA, California
    RALPH LEE ABRAHAM, Louisiana         TOM O'HALLERAN, Arizona
    TRENT KELLY, Mississippi             THOMAS R. SUOZZI, New York
    MIKE GALLAGHER, Wisconsin            JIMMY PANETTA, California
    MATT GAETZ, Florida
    DON BACON, Nebraska
    JIM BANKS, Indiana
    LIZ CHENEY, Wyoming
    JODY B. HICE, Georgia

                          Jen Stewart, Staff Director
                   Eric Mellinger, Professional Staff Member
                          William S. Johnson, Counsel
                              Justin Lynch, Clerk

                                C O N T E N T S

                                  ----------
                                                                       Page

                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Davis, Hon. Susan, a Representative from California, Committee on
      Armed Services.................................................     2
    Thornberry, Hon. William M. ``Mac,'' a Representative from Texas,
      Chairman, Committee on Armed Services..........................     1

                                   WITNESSES

    Griffin, Hon. Michael D., Under Secretary of Defense for Research
      and Engineering, Department of Defense.........................     3
    Schmidt, Dr. Eric, Chairman, Defense Innovation Board, Department
      of Defense.....................................................     4

                                    APPENDIX

    Prepared Statements:

        Griffin, Hon. Michael D......................................    45
        Schmidt, Dr. Eric............................................    53
        Smith, Hon. Adam, a Representative from Washington, Ranking
          Member, Committee on Armed Services........................    44
        Thornberry, Hon. William M. ``Mac''..........................    43

    Documents Submitted for the Record:

        [There were no Documents submitted.]

    Witness Responses to Questions Asked During the Hearing:

        [There were no Questions submitted during the hearing.]

    Questions Submitted by Members Post Hearing:

        Mr. Banks....................................................    69
        Mr. Brown....................................................    68
        Mrs. Davis...................................................    67
        Mr. Gallagher................................................    67

                     PROMOTING DOD'S CULTURE OF INNOVATION

                                  ----------

                              House of Representatives,
                                   Committee on Armed Services,
                               Washington, DC, Tuesday, April 17, 2018.
        The committee met, pursuant to call, at 10:01 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. The committee will come to order.
        For the last three National Defense Authorization Acts,
    reform, especially acquisition reform, has been a major
    priority. The purpose is to get more value for the taxpayers
    out of the money spent, but, even more importantly, to make the
    Department more agile in dealing with the variety of security
    challenges we face.
        As Secretary Mattis has testified, our technological
    position has eroded in recent years, compared with our leading
    adversaries. We confront threats that do not conform to our
    traditional notions of warfare. And the historical evidence
    indicates that we may well be a victim of our own success. As
    one writer put it, when looking at the interwar years, the
    losers were forced by events to reexamine everything. Military
    losers are intellectual radicals. The winners, complacent in
    victory, feel the need for self-examination far less.
        The answer is the Department of Defense must work to be
    more innovative in technology, in policies, and in thought. One
    of the many books offering advice to businesses sums it up with
    a chapter title that is ``Innovate or Die.'' That has been the
    goal of the reforms of recent years and of the reform proposals
    for the fiscal year 2019 NDAA [National Defense Authorization
    Act] that I am releasing today.
        We are privileged to have two witnesses who are superbly
    qualified to help guide our efforts as well as those of the
    Department in the quest to develop a culture of innovation. One
    of the reforms we enacted 2 years ago was to create an Under
    Secretary of Defense for Research and Engineering, to be the
    primary driver of innovation in the Department. Dr. Michael
    Griffin was confirmed in that position about 2 months ago and,
    among other things, is the former administrator of NASA
    [National Aeronautics and Space Administration].
        Dr. Eric Schmidt is the chairman of the Defense Innovation
    Board, and formerly chairman and chief executive officer of
    Google and its parent Alphabet, where he remains a technical
    adviser. He is here, however, only in his capacity with the
    Defense Innovation Board.
        We are very grateful to have both of you here. I might
    alert members that immediately after this open hearing, we will
    reconvene in classified session to go in greater detail about
    some of these issues.
        Let me at this point yield to the gentlelady from
    California, who is the acting ranking member.
        [The prepared statement of Mr. Thornberry can be found in
    the Appendix on page 43.]

         STATEMENT OF HON. SUSAN DAVIS, A REPRESENTATIVE FROM
                CALIFORNIA, COMMITTEE ON ARMED SERVICES

        Mrs. Davis. Thank you, Mr. Chairman. And I want to ask
    unanimous consent to put the ranking chair statement into the
    record.
        The Chairman. Without objection.
        [The prepared statement of Mr. Smith can be found in the
    Appendix on page 44.]
        Mrs. Davis. Thank you. I certainly appreciate the
    chairman's calling today's hearing on the need for more
    innovation and technology development in the Department of
    Defense. And we are honored to have both of you here today to
    serve as witnesses on this critically important topic. We have
    been talking about it for a long time, but actually addressing
    it in a way that is going to continue to make a difference is
    part of, really, what we want to see happen.
        Maintaining a culture of innovation does matter. Innovation
    ensures our service members have the technological edge they
    need. Innovation has the power to win tomorrow's wars before
    they are fought. We must continue to promote a culture of
    openness, looking for new ways to do things, being willing to
    accept prudent risk in trying something different, and
    constantly looking ahead rather than behind.
        But we also know that the Department of Defense cannot go
    it alone. They must work with the private sector and academia.
    No less important are investments in STEM [science, technology,
    engineering, and math] education, programs that develop junior
    talent into future tech leaders and policies that promote an
    environment in which global collaboration, discovery,
    innovation, public institutions, and industry can thrive.
        I had an opportunity to read Dr. Schmidt's statement, and I
    want to thank you, because it provides a kind of reality test
    for us and how do we continue to do many of the advances that
    we have been working on, and you note those in your statement
    very clearly, but also, build an architecture that is going to
    bring us into the future, and certainly respond to the needs of
    the men and women who go to war on behalf of our country.
        I look forward to hearing your testimony today. Thank you.
        And I, excuse me, and I yield back.
        The Chairman. Without objection, both of your written
    statements will be made a part of the record.
        I do want to comment, Dr. Griffin, that nobody has read
    yours, because we just got it. And I think it is important--I
    realize that when you are an administration official, it has
    got to be cleared by all of these different levels, but
    whatever the administration, it is important for those involved
    in getting us written statements to get them timely, or else
    there is just really no use in doing it.
        And, again, nobody has read your statement, because I think
    it just came at some point this morning. I am not fussing at
    you, but I am fussing at all those layers that are responsible.
    It is kind of a good summary of our acquisition problems. If
    you got all these layers of people that have to approve
    something, it takes a long time to get something, and maybe
    that is an appropriate analogy for the innovation topic today.
        But, without objection, your full written statements will
    be made part of the record. We are grateful to both of you for
    being here.
        And Dr. Griffin, the floor is yours.

       STATEMENT OF HON. MICHAEL D. GRIFFIN, UNDER SECRETARY OF
      DEFENSE FOR RESEARCH AND ENGINEERING, DEPARTMENT OF DEFENSE

        Secretary Griffin. Thank you, Mr. Chairman.
        First of all, my apologies. The statement is late, and the
    error is mine, and no other excuse is permissible.
        So, moving forward, Chairman Thornberry, Ranking Member
    Smith, Acting Ranking Member Davis, and members of the
    committee, I do appreciate your entering my written statement
    in the record and I want to thank you for the opportunity to
    discuss ways that we, as the Department of Defense, can foster
    a culture of innovation throughout the Research and Engineering
    Enterprise.
        The reality is that we live in a time of global access to
    technology and global access to scientific talent. It is no
    longer preeminently concentrated here in America. The air,
    land, sea, space, and cyber domains have all experienced
    dramatic capability advances, and have done so throughout the
    world. These advances, coupled with our adversaries' commitment
    to a demonstrated pace of prototyping and experimentation and
    fielding that, at present, far outstrips our own pace, present
    a formidable challenge to U.S. forces operating around the
    globe.
        It is this erosion of U.S. technological superiority that
    led to the establishment of the position which I now hold as
    Under Secretary for Research and Engineering. Our mission is to
    ensure that we maintain our technological edge, and I am
    honored to be here today to talk with you about that.
        I believe that I come to this position reasonably well-
    versed in the threats that face the United States today, and I
    am indeed concerned. We are in a constant competition. In a
    world that has now equal access to technology, innovation will
    remain important always, but speed becomes the differentiating
    factor. Greater speed in translating technology into fielded
    capability is where we can achieve and maintain our
    technological edge. We must seek innovation not only in our
    technology, but in our processes. I look forward to instilling
    within the Department a culture that embraces a more agile
    approach to development.
        Now, with that said, I would be remiss if I did not
    highlight the DOD R&E [Department of Defense Research and
    Engineering] Enterprise, which consists of our labs, our
    engineering and warfare centers, and our partners in the FFRDCs
    [federally funded research and development centers], UARCs
    [university affiliated research centers], academia, and
    industry, both small and large business, who have given us the
    military capabilities that we enjoy today, and that will give
    us the ones we will need in the future.
        The Department is addressing critical technology and
    capability gaps through a combination of adaptation of existing
    systems and the development and introduction of innovative new
    technologies through our labs and centers and DARPA [Defense
    Advanced Research Projects Agency] and other entities.
        The Department continues to push the envelope with research
    into new technologies, such as autonomous and unmanned systems,
    artificial intelligence, machine learning, biotechnology, space
    technology, microelectronics, and cyber, both offense and
    defense.
        These technology areas are not just important to the
    Department, they are the focus of global industry. And we are
    focused not just upon technological innovation, but also upon
    pursuing new practices and organizational structures to support
    this culture of innovation. Earlier this year, Deputy Secretary
    of Defense Shanahan said, and I quote: ``Everyone wants
    innovation, but innovation is messy. If the Department is
    really going to succeed at innovation, we are going to have to
    get comfortable with people making mistakes.''
        From my own background of producing experimental hardware
    when I had possibly more enjoyable jobs, I can certainly say
    that no progress is possible without the willingness to take
    chances and make mistakes with today's hardware in order that
    tomorrow's systems will be better.
        We are, today, making investments across the full spectrum
    of innovation. These areas include early stage research and
    development, repurposing commercial and nontraditional
    technologies for national security purposes, the advancement of
    manufacturing technologies, red teaming to identify our own
    vulnerabilities, new technology demonstrations, and
    experimentation and prototyping. Our adversaries are presenting
    us today with a renewed challenge of a sophisticated, evolving
    threat. We are, in turn, preparing to meet that challenge and
    to restore the technical overmatch of the United States Armed
    Forces that we have traditionally held.
        I thank you again for the opportunity to testify on this
    critical issue, and I look forward to your questions. Thank
    you, sir.
        [The prepared statement of Secretary Griffin can be found
    in the Appendix on page 45.]
        The Chairman. Thank you, although I cannot imagine a job
    that would be more enjoyable than the one you have now to help
    the Department of Defense be more innovative.
        Dr. Schmidt, thank you for being here.

      STATEMENT OF DR. ERIC SCHMIDT, CHAIRMAN, DEFENSE INNOVATION
                      BOARD, DEPARTMENT OF DEFENSE

        Dr. Schmidt. Thank you, Mr. Chairman. I completely agree
    with----
        The Chairman. I might get you to--yeah, hit the button,
    please.
        Dr. Schmidt. Sorry.
        Thank you, Mr. Chairman. And I completely agree with what
    Dr. Griffin just said. I think it is crucial for our Nation. I
    have worked with a group of volunteers over the last couple of
    years to take a look at innovation in the overall military, and
    my summary conclusion is that we have fantastic people who are
    trapped in a very bad system. And I am concerned that you all
    are not going to get what you think you are going to get,
    because of the deficiencies of the system, and I want to take
    you through that.
        I might start with a couple of simple examples. We visited
    a mine sweeper. And a mine sweeper is, obviously, important.
    And there is a young sailor who is beaming. I go up to him and
    say, ``what are you beaming about?'' He said, ``we just
    upgraded our computer.'' They upgraded from Windows 95 to
    Windows XP, which was delivered in 2001. His job, by the way,
    was to watch for mines 8 hours a day on the screen of his
    Windows XP computer. No one I knew, and no one I could find all
    up the chain of command could fix this obvious violation of
    Department policy around adopting Windows 10.
        We have visited more than 100 sites, and one of the sites
    we visited we had 20 officers of various kinds, all very
    committed to innovation, and we had a presentation on
    innovation occurring at the base. A programmer gets up and
    shows us rapid development methodology, quotes from my book,
    talks about how it is all done right. Sounds great. We discover
    that there are only two people on the base that are doing this.
    Of course, there are 20 officers in charge of these two people.
    But I guess the even worse news is one of them is being
    reassigned to a different base and will not be able to do any
    more programming, and they cannot figure out a way to swap the
    billets so this person can stay in their base.
        We are at a secret briefing with the National Security
    Agency on an opponent in the crypto-world by a very, very
    talented young crypto-expert who says that he is being
    transferred to a different base and will not be able to work on
    crypto anymore. This is the state of the talent of our young
    people and, frankly, why many of them are leaving for the
    private sector. They want to serve.
        One of our new-generation airplanes had a potential
    software problem. We were asked to look at that. We went to
    visit. We discovered that it has a first-generation CPU
    [central processing unit], which was the processor that is in
    the airplane, that had been deployed and was out of date when
    it was deployed; but they are excited about a new version of
    this same CPU coming out in approximately 2024, which will be
    out of date when it is delivered. When questioned hard by our
    team, the rules were so constraining, the engineers did not
    have a choice. This is madness, in my view. I can give you
    example after example of this in the details.
        So my conclusion, or our conclusion, is that innovation
    definitely exists, but there is no real mechanism and no
    incentive for the way the current structure is sort of adopted.
    And, in fact, if I can make a strong statement, the DOD
    [Department of Defense] violates pretty much every rule in
    modern product development. The spec is developed and is
    finalized before production starts. The way you really do it is
    you start iteratively and you learn from your mistakes and so
    forth. That is called agile development. It is essentially
    impossible to do, because of the way the rules are set.
        There are no permanent software people. Software, when done
    right, is essentially continuous. And the way the software is
    done is the same way as hardware is procured. You write a spec
    and then you wait for the software to show up, you make sure it
    meets all the specs and then the contractor goes away and you
    are done, which precisely delivers what you do not want now.
        If you were in 2001, and you had been asked to write a spec
    for the equivalent of a smartphone in 2018, none of the
    technologies that are in the smartphone that you have today
    were effectively available in one form or another at the time.
    And yet, that is how we do almost all of our procurement, if
    you go back to the way the cycles work. It is crazy.
        Much better to do it more iteratively. If you cannot do it
    every week, do it every month; if you cannot do it every month,
    do it every year. But once a decade means that the new hardware
    will mean that the new software all has to be rewritten, and,
    again, that is what drives the craziness.
        Once certified, a weapon system cannot be changed. We were
    in a control center which had a secret classification, and they
    were using a protocol that I recognized as a computer
    scientist. And I said, ``well, would it not be obvious to use
    this protocol, have a computer and have a military programmer
    take that protocol and then expose an answer that was useful
    for the air fighter?'' And the answer came back, ``that is
    illegal.'' And I said, ``we are inside of a secret facility.
    You have a programmer who is a military programmer, and they
    are not allowed to connect a computer into your network?'' And
    they said, ``absolutely, because the whole thing was certified
    as unchanging.'' Again, a complete lack of understanding of how
    iteration and improvement would occur.
        The model that the military uses where they outsource
    everything to large contractors has served us maybe well for
    these large weapons programs, but does not work at all for the
    kinds of stuff I am talking about. You need a completely
    different model. The networking computer resources are sort of
    out of the dark ages, like out of the 1970s. People wait for
    hours to log in, and then networks are slow. It is a complete
    violation of the concept of abundant computing resources, which
    allow people to build flexible systems.
        The computer scientists, which we cannot find very many of,
    are not a separate track. Imagine if the way you did doctors
    and nurses in the military was you would have them become a
    doctor or a nurse for 6 months and then transfer them back out.
    It is a separate profession. It is obvious to me that computer
    science and, in particular, programming should be a separate
    discipline with its appropriate training and hierarchy and so
    forth.
        There are many examples of systems where there are two
    systems that should have been interconnected, but vendor A
    built it this way and vendor B built it this way. And so we
    have soldiers, literally enlisted professionals that we, in our
    country, have, you know, asked to join the military, sitting
    there and it is called swivel typing. They look at it and then
    they read the number and then they type it over here. And then
    they read the number here and they type it over here, right.
        Now, this is the easiest of all computer programming
    problems. And, again, a small programming team can do that in a
    weekend, and yet the system is not able to do that for the
    military. Enormous efficiencies out of such simple things.
        Since every decision is protested, there is a risk strategy
    where not much risk is taken, because whenever the military
    actually makes a decision, they know that they will spend
    another year or two in some kind of contest. And it just goes
    on and on.
        And I think this group feels strongly that this is not
    okay, but let us say you thought this was like, okay, things
    are fine, the country is doing well, it is important to note
    how at least one potential future adversary, China, is
    investing extremely heavily and rapidly in artificial
    intelligence, and has announced publicly that the goal by 2030
    is to actually be the leading force in the world. So, again,
    there are competitive countries and competitive challenges that
    we need to address.
        Now, we can talk about what to do. We have a long list. Our
    team produced a list of approximately 14 recommendations, which
    the leadership in the DOD has generally indicated they strongly
    agree with. And these are recommendations that are consistent
    with the things that I have talked to you about. Things like
    the COCOMs, the combatant commanders, should have 100 engineers
    to go fix things, that software should be a separate process,
    that there should be a program around psychological safety
    where the people are encouraged to take risks without losing
    their jobs. In fact, maybe people could be promoted because
    they took risks as opposed to promoted because they did not
    take risks, which is part of the culture. Trying to organize
    around big data, collecting data. If you are going to work in
    artificial intelligence, to do anything, you need the data to
    train against. Construction and setting up of an AI [artificial
    intelligence] center.
        My personal view is that the R&E [Research and Engineering]
    and AT&L [Acquisition, Technology and Logistics] split that you
    all did a couple of years ago was very sharp, which brought Dr.
    Griffin in and his team, which is excellent. And I can also
    tell you that Secretary Mattis and Deputy Secretary Shanahan
    understand this very well and they are very, very committed to
    addressing these issues.
        So I think we have strong leadership on the military side.
    I know that you all are very concerned about this. So I think
    these are problems that can be addressed.
        Thank you very much.
        [The prepared statement of Dr. Schmidt can be found in the
    Appendix on page 53.]
        The Chairman. Just very briefly, Dr. Griffin, do you
    largely agree with Dr. Schmidt's diagnosis?
        Secretary Griffin. It would be very difficult for me to
    agree more strongly with him. The way that we, broadly
    speaking, decide what we want to buy in the Department of
    Defense before committing to buying it has been, I think,
    broken for some years, which is, as Dr. Schmidt just said, why
    you created the position that you did.
        I made a couple of notes here. Eric's comments about
    iterative development of software, I could not agree more. I
    used to be a software developer. Software is never done. But I
    would offer the following: Hardware development is done that
    same way. You build a little, try a little, test a little, find
    where it breaks, fix it, move on. When you have it working
    about like you like it, then it is time to write the
    requirements.
        In the Department, we have a fixed process where we write
    requirements and then develop capabilities. The way real
    engineers do it is you prototype hardware, develop
    capabilities, and then, based on those capabilities, now you
    write the requirements for the production system that you
    really want.
        So iteration in the hardware world is as important as it is
    in the software world. Let me stop there. We are in very high
    degree of alignment.
        The Chairman. Okay. Did you have something you wanted to
    add, Dr. Schmidt?
        Dr. Schmidt. I just wanted to add to Dr. Griffin's comment.
    So this requirements-driven process makes sense if you sort of
    hear it. It says, ``Hey, let us write down what we want. The
    Government will procure that. We will know what the budget is,
    and we will get what we want.''
        The problem is that it produces outcomes that are not
    learning outcomes. There is no new feedback system. And the
    cycles in development in the general procurement have been
    increasing up to, say, 10, 12, 15 years, which ultimately
    causes us to miss the mark in the first place.
        Secretary Griffin. But by the time you have the hardware,
    you no longer want it, because it is out of date.
        The Chairman. Let me just ask you each to address one other
    issue. It has been suggested to me that to have a, not only a
    culture, but an ecosystem that fosters innovation, an essential
    element is small to midsize businesses that are willing to
    disrupt things. And the suggestion that has been made to me is
    we make it too hard for these small, disruptive businesses to
    ever get into the DOD system. There is this program called SBIR
    [Small Business Innovation Research], whatever that stands for,
    which spends a lot of money, gets things started, but very
    little of it ever gets picked up in a program of record that
    goes on.
        So I would appreciate each of you commenting on whether, in
    the Department of Defense, we need to have these small
    disruptive businesses and how well we are doing at getting them
    and bringing them into the system.
        Secretary Griffin. I certainly agree that most of the
    disruption that occurs in our technology ecosystem comes from
    small and medium-size businesses of--you know, we see the ones
    that succeed, we do not see the many that fail. And then,
    ultimately, they may very well get bought if they are
    successful by larger contractors.
        I am not one to say that we do not need our large
    contractor industrial base. That is how we produce things at
    scale, but they are not largely the innovators that you seek.
    So I agree with your point there, sir.
        Part of the difficulty--and I further agree that we are in
    the Department, and in the government writ large, we are not
    user-friendly for small and medium-size firms, which quite
    often lack accounting systems that are compatible with DCAA,
    sorry, Defense Contracting Audit Agency and Defense Contracting
    Management Agency. It requires a lot of corporate overhead--and
    this time last year, I was running such a company. It requires
    a lot of corporate overhead to deal with what we do in
    government.
        Well, why do we do those things in government? We do them
    so that we in the executive branch can demonstrate that we can
    account for every penny. We go to so much trouble making sure
    that no misspending of money is possible that we actually
    create a larger mistake; we freeze out the innovators who maybe
    their accounting systems are not up to snuff, but their
    innovations are, and we leave those behind in an effort to make
    sure our systems are perfect.
        If we could find a way to do more dealing on a commercial
    transaction basis, where, as a commercial entity, you know,
    your accounting system is your problem. I am buying a quantity
    of things from you and my interest is to make sure that you
    deliver those things on time. If we had more focus on outcomes
    and less focus on process, I think we in the Department could
    do better.
        Dr. Schmidt. The Department of Defense has created two
    interesting groups. One is called DIUx [Defense Innovation Unit
    Experimental], and another one is called SCO, or Special
    Capabilities Office, both of which are central to solving this
    problem because they focus on the small disruptive businesses
    and try to use their tech to augment the larger systems.
        There are groups. An example would be SOFWERX, S-O-F-W-E-R-
    X, and AFWERX, A-F-W-E-R-X, which are attempts to do that for
    the special operations forces as well as the Air Force. And the
    other services are now looking at this to address the question
    that you asked precisely.
        So we are very clear, most innovation is going to come from
    these small innovative companies, by definition, because that
    is how they differentiate themselves. All of them complain that
    the cost of compliance to the rules of procurement is
    overwhelmingly difficult. They do not have the money, they do
    not have the people and so forth, whereas the larger companies
    do.
        The Chairman. Have you had a chance, Dr. Schmidt, in your
    reviews to look at this SBIR program and how successful it is
    in getting small businesses into DOD mainstream?
        Dr. Schmidt. I am aware of it. We have not done a deep dive
    on SBIR. Everything that the DOD can do to encourage more
    choices in terms of innovation is a good thing, whether it is
    individual contracting.
        It is possible, for example, to hire small teams of
    software people who you cannot hire through the normal military
    process through special consulting arrangements. All of that
    should be tried.
        And I want to emphasize what Dr. Griffin said about this
    need to track every dollar. I will give you an example. I am
    sitting with a very senior four-star general and I said, in a
    very nice, polite way, ``you are a very powerful guy, why can
    you not get a team of 50 people in your huge budget to do the
    things you are complaining to me about?'' And he said, ``I did
    and they were taken away from me.'' And I said, ``you have got
    to be kidding.''
        So there is something in the system that is a scavenging
    function that is taking these small groups that are interesting
    and innovative and under the direct control of our most senior
    military leaders, and taking them away from them. That is not
    smart.
        The Chairman. Okay. A lot to go through, but Mrs. Davis.
        Mrs. Davis. Thank you, Mr. Chairman.
        And I think it is discouraging when we hear also that, in
    fact, you were able to find two generals, I believe, who really
    got it, and yet we are not able to make that happen, I think,
    in other ways.
        So could you talk a little bit about, and, Dr. Schmidt,
    with your experience in the private sector obviously, there are
    a lot of ways in which we often have exchanges, bring people
    into the military, bring military into the private sector. Are
    we using every advantage that we have to do that? Have you seen
    ways in which we can do a far better job building that human
    capital so there is a real understanding of the role that one
    another plays? Because I think sometimes, you know, folks in
    the military may think, well, you know, they do not have to
    worry about the problems we have to worry about. And the same
    is true. How can we do that better?
        And I also would wonder how can we do that better when it
    comes to developing that human capital at a much--prior to
    people getting into the service, for that matter, that we can
    try to bring some of that thinking to bear?
        Dr. Schmidt. For this part of the military, I like to think
    of it as a very, very large corporation, with all the problems
    of a very large corporation, how do you hire people, how do you
    promote people and so forth.
        The Department of Defense has something called the Defense
    Digital Service, which is a good example, where patriotic men
    and women will take a year or two off of their current jobs.
    They get permission to do so, obviously. And they come in and
    they fix problems. The problem with the Defense Digital
    Service, which is very, very successful, is it is very small,
    20, 30, 40 people. We need 100, 200, 300. And given the way the
    government, in general, does software in particular, these
    kinds of programs are effective and I would encourage their
    expansion.
        Corporations are not going to willy-nilly hand over their
    top talent, but there is enough motion in the system where,
    again, patriotic people are willing to take a leave from work.
    And you can imagine programs with the private sector where they
    will even keep their salary as a patriotic act in order to do
    this as long as it is time limited.
        You emphasize in your opening comment the importance of
    STEM education. It is clear to me that the most important thing
    we can do to address the kinds of things I am talking about is
    more emphasis on STEM education of all kinds, at the community
    college level, college level, et cetera.
        Mrs. Davis. Mr. Griffin, I think these are all things that
    we think are good to do, and some of them, of course, are being
    done. We need to scale that more. But do you see--and I know
    you are in this position somewhat new under this rubric. Does
    it actually transfer when people have had those experiences?
        Are there things, just the requirements-based processes in
    the military, does that get in the way of people taking those
    good ideas and being able to deal with it, or will more people
    who understand this, in the end, be the difference between how
    we move forward in the future?
        Secretary Griffin. Well, there are a lot of----
        Mrs. Davis. What would you do?
        Secretary Griffin. A lot of questions going on.
        Mrs. Davis. Microphone.
        Secretary Griffin. There are a lot of important questions
    contained in that one question you asked. That is really quite
    broad.
        First of all, the individuals who come in for these
    experiences and then go on to other avenues of life, they do
    retain those. We get valuable transfer both ways. As Eric said
    earlier, we have got fantastic people in the government and
    laboratory networks, in my experience, as good as those who can
    be found in commercial industry. It is, as he said, the system
    in which they reside.
        Eric gave an example of a four-star who wanted to do
    something and the resources were taken away. Just a couple of
    weeks ago, I was having a conversation with another four-star,
    and we were commiserating on the swarming drone threat. And he
    said to me in almost a rhetorical conversation, ``Why can I not
    just have some money and buy some drones of my own and put my
    guys on the problem of figuring out how to develop a
    counterattack and let them try stuff out, break some drones,
    and find out an approach that works?''
        And I said--I will not offer his name. I said, ``General, I
    could not agree with you more, but, in fact, I am an Under
    Secretary and you are a four-star and neither one of us has the
    power to route money to you to allow your people to do what you
    just said.'' It is the system in which we are trapped.
        Now, in private industry--I once ran a GPS [Global
    Positioning System] company. If it had not been successful, I
    probably would not be here today. If I had to go through the
    kinds of permission loops to upgrade my receiver circuitry that
    we have to go through in the Department to catalyze and
    advance, I would not be here today. I would have been long out
    of business.
        It is the system in which our innovators are trapped. It is
    not the quality of the innovators or the innovations.
        Mrs. Davis. Thank you.
        Thank you, Mr. Chairman.
        The Chairman. Mr. Rogers.
        Mr. Rogers. Thank you, Mr. Chairman.
        Thank you all for being here. Dr. Griffin, as you know, I
    have a very high opinion of you for a long time, and I am very
    proud that you are in this position. I know it is going to be a
    credit to our country.
        This NDAA that we just completed gave you some pretty broad
    and sweeping powers, and I know you have only been in it for 2
    months now, but can you tell me how it is working?
        Secretary Griffin. Well, sir, in fact, I have been in it 2
    months today, 8 weeks today. And thank you for your kind
    comments.
        Actually, I have to say the broad and sweeping powers that
    the NDAA 2017 allocated to us are more broad and sweeping
    powers to offer advice. USD(R&E) [Under Secretary of Defense
    for Research and Engineering] does not really have much in the
    way of specific directive authority to control what is or is
    not done. So it is more the power to persuade. I hope I am an
    effective persuader.
        Mr. Rogers. I hope you are effective too.
        Conventional prompt strike hypersonic development needs to
    be accelerated. Can you tell me what your thoughts--and
    coordinated better. Can you tell me what your thoughts are
    about that?
        Secretary Griffin. You have hit my number one hot button,
    sir, as I think I may have mentioned that in my confirmation
    testimony a couple months back.
        I will say that, in my opinion today, the most significant
    advance by our adversaries has been the Chinese development of
    what is now today a pretty mature system for conventional
    prompt strike at multi-thousand kilometer ranges.
        We will, with today's defensive systems, not see these
    things coming, and they have an all-azimuth capability. They
    can come from any direction. We will not see them coming beyond
    several hundred kilometers of range; and once inside that range
    bucket, we have very little time left to respond.
        It is a tactical system that has strategic import for our
    Nation because it, if employed, could have the effect of
    limiting our ability to project power in the maritime domain.
    And as you well know, sir, you are the subcommittee chairman
    for Strategic Forces, I think you know how important our
    ability to sustain carrier battle groups and other maritime
    domain assets is to projection of U.S. strategic will
    throughout the world. And this capability is under threat
    today. We must respond with our own offensive capability, and
    we must, with all deliberate speed, develop defensive
    capability.
        Mr. Rogers. Excellent. And I know you will.
        Finally, directed energy is something I feel very strongly
    about us maturing as quickly as possible. You know, it has been
    5 years away forever. But, as you know, this technology is
    pretty mature, but it needs some more focus and attention.
        And one of the things that I am concerned about right now
    is that it is being developed in three different areas, three
    different programs, instead of being focused generally in
    Missile Defense Agency. Can you tell me what your thoughts are
    about why that development has been spread across three
    different programs?
        Secretary Griffin. I am not sufficiently knowledgeable of
    the history to know how we got where we are. And in business
    school, they teach us that some costs are irrelevant anyway.
        So my mission is to go forward and unify our directed
    energy development across the Department. That is what I want
    to do, because right behind the hypersonic threat, I am
    concerned that we are not leveraging our technical advantage in
    directed energy weapons. Within a few years, I want this Nation
    to have a, I will say, 100-kilowatt-class laser that can be
    deployed on a Stryker. I want us to have a several-hundred-
    kilowatt directed energy capability that I can put on an Air
    Force tanker so that it can defend itself. By the latter part
    of the next decade, I want to have a megawatt-class device that
    can go in space and protect us against enemy strategic
    missiles.
        These things are within our grasp if we focus our efforts.
    They absolutely are within our grasp.
        Mr. Rogers. Well, I want what you just described, so get
    after it.
        Secretary Griffin. Please help me get it, sir.
        Mr. Rogers. I am with you. Thank you very much.
        I yield back, Mr. Chairman.
        The Chairman. Mr. Langevin.
        Mr. Langevin. Thank you, Mr. Chairman, and good morning to
    our witnesses. I want to thank you for being here with the
    testimony. I think this is an important discussion that we are
    having.
        I have the privilege of serving as the ranking member of
    the Emerging Threats and Capabilities Subcommittee, so we have
    primary jurisdiction over all of the Department's cutting R&D
    [research and development] programs, including those at DARPA
    and ONR [Office of Naval Research]. And so the more we can do
    to cut out the red tape and accelerate these programs, I think
    the better off our Nation will be.
        Dr. Schmidt, let me start with you. Of the recommendations
    made to increase innovation in the Department, which is the
    most imperative, and has the recommendation been adopted--I am
    sorry, been adopted and actually seeing it come to fruition?
        Dr. Schmidt. Thank you very much. Many of the
    recommendations are in the internal reviews of the DOD. And the
    military has generally said they are going to implement as many
    of them as they can. The one that seems to have gotten the
    greatest traction right now is the proposal around an AI
    center. And we are specifically proposing that the nature of AI
    is a long-term technology that will be useful for defensive and
    perhaps offensive purposes as well. And so the creation of that
    is under review right now and I suspect will occur.
        We are also recommending, for example, that that be done in
    conjunction with a university of some kind or a couple of
    universities. So trying to make sure it is world class.
        Mr. Langevin. How do you feel innovation can be scaled?
        Dr. Schmidt. Well, this is what I have done my whole
    career. And you can systematize innovation by doing essentially
    reviews, quick decision cycles, and that. Remember that the
    biggest mistake is not starting something that does not work,
    it is continuing something that does not work. And so you want
    to fast fail. And, again, Dr. Griffin has emphasized this in
    his notes as well.
        So I would suggest that the government spend a fair amount
    of time doing reviews that are pretty rough. It is very
    difficult in the DOD to cancel anything, and yet the budgets
    are always fully allocated. So if you want to have room for
    innovation, you are going to have to stop doing a few things.
    And I am not talking about the big systems. I am talking about
    lots of other things that they are also doing.
        Mr. Langevin. Thank you. It is a good segue into my next
    question.
        Dr. Griffin, so any future conflict will undoubtedly
    include advanced technologies, like directed energy or
    hypersonics or railgun, and we recently had a conversation
    about these topics in my office and I thank you for the
    courtesy call. You came by.
        So it is not just because of us pursuing these
    capabilities, as you and I spoke about, our adversaries are
    clearly investing heavily in these areas as well.
        So do we need to be more aggressive in our pursuit of these
    capabilities? And how do you believe we can better promote a
    culture more accepting of failure in this pursuit within the
    Department of Defense?
        Secretary Griffin. Thank you, sir. The first thing that
    pops into my mind when you say how can we institute a culture
    that is more accepting of failure, from the heart, what I think
    we need to understand is that it is not failure to learn that
    something we tried did not work on the way to our major goal.
        If our goal--Chairman Rogers was asking me about directed
    energy weapons and I know you are interested in those as well.
    If my goal a decade from now is to give the United States
    dominance in missile defense in the world by means of having a
    megawatt-class laser, that is my goal. Failure is failure to
    reach that goal. It is not a failure to try out different
    approaches to reaching that goal and have them break along the
    way as long as I do not lose sight of my strategic goal that I
    am going to have a megawatt-class laser in 10 years.
        And breaking hardware along the way to that goal is not a
    failure. In fact, breaking hardware along the way to that end
    goal is often--and I am tempted to say always, but I am sure
    there are exceptions--breaking hardware along the way is often
    the quickest way to get to where you want to be.
        And so there is a cultural mindset here that in the course
    of trying to prevent small failures along the way to the grand
    goal, we miss the grand goal.
        Mr. Langevin. Thank you.
        Secretary Griffin. Thank you, sir.
        Mr. Langevin. As I mentioned, we in Congress, of course,
    have to work with--we want to be supportive of these innovative
    efforts. And as long as we are taking these journeys together
    and we have an open line of communication, when failure occurs,
    again, this is something that we can take these leaps together
    and understand where we want to get to and be supportive of
    your efforts.
        Thank you, and I yield back.
        The Chairman. Mr. Wittman.
        Mr. Wittman. Thank you, Mr. Chairman.
        Dr. Griffin and Dr. Schmidt, thanks so much for joining us
    today. Dr. Griffin, you have spoken repeatedly about the role
    hypersonics will play in this era of great power competition
    between the United States, Russia, and China. And you also
    stated specifically that they are your highest priority.
        You went on to state, in your words, ``I am sorry for
    everybody out there who champions some other high priority,
    some technical thing; it is not that I disagree with those. But
    there has to be a first, and hypersonics is my first.''
        Other than funding, how do you transitionally get that
    redirection towards hypersonics, get us to the point where we
    are not only catching up, but surpassing our adversaries? So I
    wanted to get your perspective on that.
        Secretary Griffin. Thank you, sir. Let me add that I have a
    good-sized list of priorities that come to us out of the
    National Defense Strategy [NDS] that was released in January. I
    am not often a fan of government assessments, but this one was
    really well done. And that gives me my--it gives me my marching
    orders, if you will. And, of course, the NDS did call out
    hypersonics and, as you correctly point out, I have emphasized
    that.
        To be honest with you, this Nation's earlier research work
    in hypersonic systems development was basically what our
    adversaries have used to field their own systems. It is time
    for us to renew our emphasis on and funding of these areas in a
    coordinated way across the Department to develop systems which
    can be based on land for conventional prompt strike, can be
    based at sea, and later on, can be based on aircraft.
        We know how to do these things. This is a country that
    produced an atom bomb under the stress of wartime in 3 years
    from the day we decided to do it. This is a country that can do
    anything we need to do that physics allows. We just need to get
    on with it.
        Mr. Wittman. Very good. Thank you.
        Dr. Schmidt, let me pick your brain. In your role, you look
    at a lot of different opportunities. One of the opportunities
    that I think has evaded us to this point is how do we take
    needs within the Department of Defense and combine that with
    the innovation and creation that exists within the outside
    community and look at the conduit of venture capitalists who
    look to invest in those emerging technologies who normally have
    not been connected with DOD? How do we make that connection?
    How do we get those companies that have been innovated on the
    commercial side to say, ``Hey, there is an application of what
    we do and the attraction of capital to that to accelerate the
    development of those technologies?'' Give me your perspective
    about what we can do to better make that happen?
        Dr. Schmidt. So, unlike Silicon Valley companies, the DOD
    is extremely top-down. And so the NDS that Dr. Griffin
    mentioned is crucial here. It has roughly 10 big buckets, and
    the military is now trying to organize its activities into
    these buckets. And that is a crucial signal to the venture
    capital industry to say, work in this area.
        Then the next thing to tie in is the notion that there is a
    new approach to a problem, a faster this, a smarter that, and
    so forth, often software. And that is, I think, where the
    current lack of link is, that the people who are running those
    parts of the DOD are not technologists, they are generalists,
    and they do not have someone to say, ``Hey, you know, there is
    a new way to solve this problem and all you have to do is take
    a look at over here.''
        I have championed having various internal bake-offs and so
    forth. Dr. Griffin is central to this role and understands this
    role very well, as one of the people to bring this into the
    DOD. He will not be successful without the rest of the DOD
    being in alignment with these 10 broad areas and calling him
    and working with him, looking for these things.
        Mr. Wittman. Got you. Very good.
        Dr. Griffin and Dr. Schmidt, one final question. In this
    era of great power competition, we are not going to be where we
    were in the past, and that is to out-resource our opponents,
    whether it was what we did in World War II, or we did during
    the Cold War. Where we will prevail today is we must be able to
    do more per our unit of currency than our adversaries do per
    their unit of currency.
        Give me your perspective on how do we start down the path
    to be able to do that? And, Dr. Griffin, you spoke a little bit
    about this, about us being the creators and innovators, but how
    do we accelerate that to truly, in this era of great power
    competition, prevail?
        Secretary Griffin. Well, sir, as I tried to say earlier, we
    are not out of innovators, we are not out of innovations, we
    are out of time. And it is about pace. We must match the pace
    that our adversaries are demonstrating today.
        So a few weeks ago, I was fortunate to have some private
    time with the chairman, and he asked me, essentially, the
    question that you asked. And I often pop off with the wrong
    remark, but in this case, I said, ``Sir, we can either retain
    our national preeminence, or we can maintain our processes, but
    you cannot have both.'' Okay? We have got to thin out our
    process structure like weeds in your favorite garden, and
    nothing else actually matters. If we do not thin that out,
    nothing else is going to matter.
        Mr. Wittman. Thank you, Mr. Chairman. I yield back.
        The Chairman. Mr. Larsen.
        Mr. Larsen. Thank you, Mr. Chairman.
        I want to explore that last question over here that Mr.
    Wittman asked a little bit more, because when we developed the
    atomic bomb, we sort of controlled that process. When we
    developed the space program, except for the Soviets--that is,
    the government controlled it. Developed the space program, the
    government controlled it. To catch up or to lead on AI, on
    quantum computing and machine learning, we don't control that.
    It has largely already been driven by the private sector.
        And so the fundamental question I have, is there a
    moneyball question here? That is, are we going to only be
    hitting singles and doubles, like the DDS [Defense Digital
    Service] or the SCO or DIUx, or do we get into an issue where
    or get to a place where we are hitting home runs? We are
    actually able to do a government investment into quantum
    computing, into AI, that is big enough to set the foundation?
    Otherwise, we are relying on the private sector to do that, and
    the private sector may not want that big investment from the
    government to help them leapfrog the foundational technologies.
        Secretary Griffin. Well, sir, the private sector will, and
    with the grace of God in this country, do what will do well for
    them. And they should, because that is----
        Mr. Larsen. I agree.
        Secretary Griffin. And that is the strength of our
    industrial base. So the question is, how we in the Department
    can take on some of the advances that they are making and put
    our money in on the tasks that we want done for us using these
    new technologies.
        So Dr. Schmidt, a few minutes ago, mentioned that one of
    the advantages of having, say, roughly 10 buckets of priority
    development, is that when venture capitalists can see the
    Department putting its money there, well, they will go and do
    likewise.
        So I think emphasizing AI, through an AI center and other
    things, we in the Department are not trying to build up AI to
    solve commercial problems. We are trying to build up AI to
    solve defense problems. And I believe that industry specialists
    in that area will be attracted to our challenges.
        Mr. Larsen. So what is the return on investment of that,
    Dr. Schmidt, in the private sector, for the private sector?
        Dr. Schmidt. Well, for the private sector----
        Mr. Larsen. You need your microphone on, please.
        Dr. Schmidt. I apologize. For the private sector, the
    investments that are being made in machine learning and AI and
    big data are fundamental to the future of those industries. So
    I can assure you that, broadly speaking----
        Mr. Larsen. The ROI [return on investment] for them is very
    clear. I am talking about the ROI for them to have the DOD
    either to invest in it, or for the DOD to be able to utilize
    that technology, which may or may not be proprietary.
        Dr. Schmidt. Well, historically, the DOD investment kick-
    started many of the industries which I have been part of. You
    go back to the original work that DARPA did. And DARPA today
    is, for example, funding key investments in the areas that you
    are describing. So we benefit from fundamental research that
    the military funds.
        If it is a question of a military program, then it has to
    be looked at on a cost-benefit basis by that company. And,
    again, to the degree that the government can make it easier for
    that company to work with the government, that is a net
    benefit. But my answer to all of this is more, right?
        So an AI center, which we are proposing as part of my
    group, that is run by the DOD, benefits the private sector as
    well, because it puts more money into working on hard problems.
        Mr. Larsen. So my concern is less about any one military
    program. There are 1 million of them, and there will be 1
    million more. It is about the foundational technology
    investment, where, as a government, we do not control that like
    we did when we developed the atomic bomb or developed the space
    program. We were the first entry, the first in the market, if
    you will, but we are not the first in the market on AI, on
    quantum computing, the machine learning, and go down all this
    list that we are competing with with China and Russia.
        So I am trying to get past, or get through, talking about,
    you know, the DDS or the SCO, where we are borrowing people and
    we are borrowing technologies across services to utilize
    something new, and talking more about the foundational
    technologies that we have to invest in to be where you want to
    be, Dr. Griffin, in 5 years on directed energy and 10 years on
    directed energy and so on. Where do we want to be in 10 years
    on quantum computing in use by the DOD? Well, we do not seem to
    control that as much, because of a great innovative system that
    we have.
        And that is just a fundamental challenge I think that I
    would like to hear an answer to, a better answer to. My time is
    up. I apologize. Thanks.
        The Chairman. But if you want to make a comment.
        Dr. Schmidt. Well, again, I think that the relationship
    between the tech industry and research funding that has come
    over history from the government has been profound. I, as a
    graduate student, was on a DARPA grant and on a National
    Science Foundation grant.
        So the more basic research that you all, in aggregate, can
    fund across the sciences and so forth, it really does benefit
    the military mission. It really does benefit the defense of our
    Nation. It may be indirect, but the fact of the matter is that
    every conversation, pretty much every conversation we have had
    so far this morning started off with some form of government or
    National Science Foundation funding for the basic research that
    created it.
        The Chairman. Mr. Scott.
        Mr. Scott. Thank you, Mr. Chairman.
        Dr. Griffin, I, again, respectfully want to bring up what
    the chairman brought up earlier. We received the testimony at
    9:20 this morning. That makes it difficult for us to do our
    job. And this seems to be becoming more commonplace from the
    DOD, that we do not get the testimony in a timely manner.
        You gave the example of the drones and the swarm of drones
    and being an Under Secretary, and that a four-star general that
    you were with, that neither one of you had the authority to do
    what both of you thought needed to be done with regard to the
    procurement and potentially war games with drones.
        My question gets back to, is that real or perceived that
    you do not have the authority? Show me the language that
    prohibits you from doing what you and the four-star want to do;
    and I think that you would find the committee willing to, in a
    bipartisan manner, remove that language from the law.
        Secretary Griffin. Sir, first of all, I again apologize for
    being late with the testimony and will endeavor to see that
    that does not happen again. The fault is mine, and I will
    remedy it.
        With regard to there is no language in the law specifically
    prohibiting me from doing what you suggested in the example I
    cited. There is no language that specifically gives either
    myself or this particular four-star the permission to do it.
    And absent the documented permission to do it, it is presumed
    that you cannot do it. And this is a cultural issue within the
    executive branch of the government writ large----
        Mr. Scott. Absolutely.
        Secretary Griffin [continuing]. Not just the DOD, sir.
        Mr. Scott. I agree, it is cultural. And if we as a
    government are going to take the position that our DOD and the
    people that run the DOD, both on the civilian side and the
    uniformed personnel side, have to have the express written
    permission of Congress to do anything, then we need to be
    learning other languages, because at some point somebody is
    going to conquer us.
        And my question then gets to, how do you break that
    culture? Because Congress does not prohibit you from doing what
    you and the general agree need to be done. It is a culture. It
    is a decision that is made inside the DOD to not do things that
    need to be done.
        Secretary Griffin. Well, yes, sir, but let me expand my
    answer just slightly more.
        Unless I can find something in authorized and appropriated
    language and funding which fits the category of this
    particular--say, response to swarming drones, unless I can find
    money which is appropriated for that purpose and authorized for
    that purpose, I do not have a documentable, if you will, chain
    of permission going to the very top of the government that
    allows me to do these things.
        And so, absent that clear succession path for the use of
    money, by definition, I am using it inappropriately. And----
        Mr. Scott. I am almost out of time. If I could, though, I
    mean, the pistol example with the Army. The Army took 10 years
    to buy a new pistol. And, now, fortunately, they had a pistol
    that worked while they were taking the 10 years to do it. But
    when you ask the Army, ``why did it take 10 years?'' they
    cannot answer the question.
        It is a bureaucracy that is built upon a bureaucracy, and
    there is a lot of blame that goes around. We all know what the
    problems are. We need to know how to eliminate those problems
    and remove those problems.
        Dr. Schmidt, one of my concerns, as we work on these
    issues, is--and I know you are very tuned into the private
    sector and compensation in the private sector--whether or not
    it will be uniformed personnel or civilian personnel that are
    actually the best solution for us in the programming aspect of
    things.
        But even in the civilian personnel, a GS-7's starting pay
    is $35,000 a year. That is for somebody with a college degree.
    How do we compete with those pay scales? And what are your
    thoughts on uniformed versus civilian personnel in the
    programming fields?
        Dr. Schmidt. We are fortunate that a number of people are
    willing to work for very low wages out of patriotic duty to
    solve these problems. And they will do so until they feel that
    their ideas and innovative ideas are ignored by their bosses,
    and then they leave--and I have encountered many such people--
    to go to much higher-paying opportunities in the private
    sector.
        If we want do this long term, we have to have softer
    budgets that can be sent through softer contractors, where the
    contractors are being paid market wages. And that is legally
    achievable; it is just not done as practice. And you all have
    already given permission for this to happen.
        Mr. Scott. Thank you, gentlemen.
        The Chairman. Mr. Carbajal.
        Mr. Carbajal. Thank you, Mr. Chair.
        Dr. Griffin and Dr. Schmidt, I have the honor of
    representing a number of universities in my district, including
    UC Santa Barbara and Cal Poly, San Luis Obispo. Both of these
    institutions participate in a number of research opportunities
    offered by the Department of Defense. The experience has not
    only been rewarding for DOD, as they enhance their
    technological edge, but also for the students, as these
    partnerships allow students to pursue advanced research and
    directly impact the security of our Nation.
        I believe it is critical for DOD and Congress to expand
    these DOD-academia partnerships as part of DOD's efforts to
    foster and promote a culture of innovation.
        Secretary Griffin and Dr. Schmidt, how important are these
    DOD-academia partnerships in enhancing innovation? Are there
    are any new initiatives within DOD to expand and create more
    partnerships such as DOD educational partnership agreements and
    university affiliated research centers?
        Secretary Griffin. To the last part of your question, sir,
    I do not at this point know if we have any new partnerships
    planned or what those plans might be. I will be happy to look
    into that.
        With regard to history, however, I, myself, spent 11 years
    in DOD and NASA FFRDCs and UARCs. I am the strongest possible
    believer in the value of these laboratories and centers and
    such, where the U.S. Government partners with a university to
    bring a technology development focus on a particular area.
        So, for example, with NASA and JPL [Jet Propulsion
    Laboratory]--and, of course, the DOD has a lot of interest in
    JPL as well--we hire Caltech to run JPL for the benefit of the
    government and the taxpayers. It has been an extraordinarily
    productive thing to do. I could repeat that same story with
    regard to the Johns Hopkins Applied Physics Laboratory or Los
    Alamos or many others.
        This is what got us where we are. And one of my goals is to
    make sure that those partnerships are strengthened and
    reaffirmed into the future.
        Dr. Schmidt. One of the best ways to address some of the
    shortfalls in innovation is to work more with America's leading
    universities, which are top of class globally. And the more we
    can do that, the better.
        I should highlight that UC Santa Barbara is a center of
    extraordinary progress on quantum computing, and some of the
    major breakthroughs in quantum computing appear to be coming
    through the research done there in the physics department.
        Mr. Carbajal. Thank you both.
        Mr. Chair, I yield back.
        The Chairman. Ms. Stefanik.
        Ms. Stefanik. Thank you, Mr. Chairman.
        In a full committee hearing last week, General Alexander,
    who, as you know, is the former commander of U.S. Cyber
    Command, stated, quote, ``The leader in artificial intelligence
    and quantum will be the next world superpower.''
        I am deeply concerned that we must be able to keep pace
    with near-peer adversaries like China when it comes to their
    investment in AI. As you stated, Dr. Schmidt, in your opening
    statement, China has publicly stated their goal to be the
    global leader when it comes to AI by 2030. That is not very far
    away.
        What specific steps do we need to take within the DOD, in
    addition to research and development, to ensure that we are
    able to keep pace and surpass near-peer adversaries?
        And, Mr. Griffin, if you can specifically talk about what
    we are currently doing within DOD regarding AI.
        Dr. Schmidt. As we discussed earlier for Dr. Griffin,
    hypersonics was his first of a number of firsts. For me, the AI
    questions are first among a number of firsts.
        And, in order to do AI, you need to have data for training.
    And the DOD, broadly speaking, has a great deal of data which
    is not stored anywhere or stored in places which, you know, the
    programmers are no longer alive kind of thing. And getting all
    that data in a place that is usable and discoverable and useful
    for the mission at hand is crucial.
        We have already highlighted the importance of having some
    form of AI center, again, from my perspective, preferable if it
    is done in conjunction with some universities, to take the work
    at the state of the art.
        The third is that the majority of the contractors that are
    used by the DOD are not AI-capable at this moment, although
    they are all working on it. So, again, I would encourage the
    specification, and the current process, which is essentially a
    requirements document, needs to actually state what problem
    they want to solve.
        A typical example would be, you are worried about a
    swarming drone problem with autonomy, right? That is a good
    example of an AI problem. Where is the research? Where are the
    tools? Where are the drones? Where are the counter-drones? All
    of those kinds of questions need to be asked, but they need to
    be asked in the context that causes the data to be stored and
    the algorithms to be invented and funded.
        Secretary Griffin. The Defense Innovation Board has
    recommended and Dr. Schmidt has emphasized the need for an AI
    center. I believe, in his hearing recently, the Secretary
    affirmed that the DOD will establish an AI center.
        So that, I believe, comes under my area, and we are
    looking, right now as we speak, about things like how do we
    structure it, who should lead it, where it should be, how we
    should structure our other departmental research to focus in
    through that. So these are ongoing questions that we are
    addressing this week.
        Currently, I was briefed recently and told--I cannot verify
    the number, but I was told that we have 592 separate AI-related
    projects across the Department. We need to bring some focus to
    all of that, and I think that is what you are getting at,
    ma'am.
        Ms. Stefanik. To follow up, Dr. Schmidt, some of the
    technology companies we have talked with, and particularly
    those that are contributing in the areas of AI, have expressed
    a reluctance to work with DOD.
        And I know you are not here today in your capacity with
    Google, but you are familiar with some of the news articles
    related to the workforce's questioning and concerns regarding
    DOD's Project Maven.
        How do we overcome this skepticism? Because I think this
    private-sector workforce is critically important, to be able to
    leverage their innovations, when it comes to what DOD is doing
    in AI specifically.
        Dr. Schmidt. So, because of my role in both organizations,
    I have been deliberately kept out of the particulars here, so I
    honestly cannot answer the Maven questions at all. I honestly
    do not know.
        My sense of the industry--the answer to your question at
    the industry level--is that the industry is going to come to
    some set of agreement on AI, what are called, principles--what
    is appropriate use, what is not. And my guess is that there
    will be some kind of consensus among key industry players on
    that.
        And then that process, which will take a little while, will
    probably then inform how Dr. Griffin and his teams, you know,
    leverage, work with, work against, what have you. I think it is
    a matter of speculation, but my guess is that is the path.
        Ms. Stefanik. Thank you.
        My time is about to expire.
        The Chairman. Mr. Panetta.
        Mr. Panetta. Thank you, Mr. Chairman.
        Gentlemen, thank you for being here and, obviously, your
    preparation as well as your testimony.
        Playing off Representative Carbajal's question, he talked
    about outside universities. What about internal universities,
    defense-related universities, Naval Postgraduate School for
    example? Are they contributing to this innovation so, instead
    of having a top-down, we are basically from the bottom up, from
    people within the Department of Defense?
        Dr. Schmidt. So one of the goals for the Naval Postgraduate
    School by the Navy is, because of its location and storied
    history of training top leaders in the Navy, to have it serve
    as an innovation hub and, in particular, have business contacts
    with the venture community and so forth. That is an objective
    that they have, and we certainly support that.
        In general, the educational systems within the military, as
    a broad statement, could be improved by working with and
    sharing abilities with the traditional public-sector
    universities, et cetera. In other words, a university that is
    sort of private and isolated does not serve the military well.
    A university or a training program or an open innovation
    program that is linked to the educational systems of America
    serves both sides.
        Secretary Griffin. I mean, I would agree. I am very
    familiar with the Postgraduate School and somewhat familiar
    with Air Force Institute of Technology, for example. And, while
    they are quite good at very specific things, the more that they
    can be linked with their academic cousins outside the
    Department, the more that they become--I do not mean this in
    any disparaging way--the more that they become just another
    university that happens to have ownership in the DOD, the
    better we are going to do.
        Because I think there is just no argument that, taken in
    total, the American system of higher education is the world's
    best. And, yes, it has faults and it has problems and problems
    that we need to solve, but, taken globally, it is the best. And
    we ought to try to promulgate that as much as we can. We ought
    to try to use it as much as we can, support it as much as we
    can, and let it run free, because it has done well for us.
        Dr. Schmidt. May I add something?
        Mr. Panetta. Please.
        Dr. Schmidt. The challenge that we face in the government
    and the military is a much deeper training and education
    problem than it initially appears. Because many of the
    doctrinal approaches, right, are being torn asunder, right,
    they are literally being turned on top of each other, by
    changes in adversarial posture or technology. So an agile,
    innovative leadership team is a very different training program
    than the kind of leadership we are training today.
        And so think about it--just simple things like there is
    something called the Acquisition University, where people learn
    how to do acquisition. Well, that all has to change based on
    what Mike has outlined here. There are thousands of people who
    go through these systems.
        So it is a much deeper tautological question than it might
    initially appear. Your question is exactly right.
        Mr. Panetta. Thank you, gentlemen.
        I yield back, Mr. Chairman.
        The Chairman. Mr. Bacon.
        Mr. Bacon. Thank you, Mr. Chairman.
        And thank you, Dr. Griffin and Dr. Schmidt, for being here
    and providing your testimony.
        You have given some good updates on hypersonics, artificial
    intelligence, quantum computing. There are some other areas
    that also I think in the next 20, or 30, or 40 years we will
    see weapons technology migrate to. One of them is
    miniaturization of weapons.
        Can you give us an update on how we are doing in that area?
    Are we seeing progress? For example, I think eventually we will
    see remote-piloted aircraft that will be very small that could
    be used for ISR [intelligence, surveillance, and
    reconnaissance] or for kinetic operations. But do you have any
    updates in the miniaturization efforts?
        Secretary Griffin. Well, I do not know that I have any
    specific updates, sir. There are a number of areas where, as
    you indicate, there is a driver to miniaturize. And when you
    have that technological driver, you will generally get results.
        Today, for example--I started in missile defense when the
    best and first interceptor we could build weighed a ton. And I
    do not say that as an exaggeration. It literally weighed 1 ton.
    The missile defenses that we have at Fort Greely and Vandenberg
    today, ground-based defenses, the interceptors weigh a couple
    hundred kilograms.
        Can we make them smaller and lighter? Yes. And we will,
    because our next advance will be the Multi-Object Kill Vehicle,
    where one bus can support several smaller interceptors. As you
    point out, unmanned aerial vehicles are following this path.
    Not everything needs to be Global Hawk, as wonderful as Global
    Hawk is.
        When we are challenged to advance our technology because of
    adversarial postures, we will do that. What this hearing is as
    much about as anything else today is reforming our processes--
    --
        Mr. Bacon. Right.
        Secretary Griffin [continuing]. To allow those innovations
    to come forward in a timely way. I think both Dr. Schmidt and
    I--that has been our central theme.
        Mr. Bacon. Dr. Schmidt, anything else to add?
        Dr. Schmidt. No. I agree with Dr. Griffin.
        Mr. Bacon. Uh-huh.
        Another area that I read about is robotic-type warfare or
    the use of robots more. And I have heard that Russia has put a
    lot more emphasis on that than we are. Do you have any other
    feedback on that area?
        Secretary Griffin. Sir, I am unable to address that
    question. I do not know the Russian posture in robotics, and I
    am really only cursorily familiar with our own.
        Mr. Bacon. Okay. Thank you.
        Secretary Griffin. I am sorry.
        Mr. Bacon. One last question. On the F-35 front, we have
    had a lot of experience with that, obviously. Again, some good
    progress now, but also we have had some tough times. What have
    we learned out of the F-35 that you can apply?
        Secretary Griffin. Well, F-35 comes under my counterpart,
    Ms. Lord, for acquisition and sustainment. I would broadly
    observe--so I will be very careful in my remarks, and they will
    be very top-level, because it is not my program.
        But I would observe that a program which has been in work
    for over two decades and now performing well, but in work for
    over two decades, is, frankly, late to need. It almost
    automatically cannot be said to keep pace with the threat.
        I think that it is well known, at least on the inside, that
    the software architecture is not one that would have been
    developed, say, by our leading IT [information technology]
    providers. It is not the kind of software architecture that a
    Google or an Apple or a Microsoft or a Cisco would have
    provided.
        So there are a number of systemic issues there that I hope
    will be lessons learned for the next spin. And I think it would
    be better for me to stop there.
        Mr. Bacon. Hopefully we just keep learning with each
    program like this. That is what we do.
        Dr. Schmidt, anything else to add?
        Dr. Schmidt. I think that Dr. Griffin's comments reflect
    the fact that you think of the F-35 and these other programs as
    hardware programs, but they really are software programs with
    hardware attached.
        And so, if you thought about it as a software project and
    had designed the software in such a way, the kind that I am
    describing, and as done in the industry, you would have a very
    different outcome today. And that is at the root of the design,
    procurement, and operational methodology for these large
    systems.
        So think of it as, let us get the software right in the
    future, and then we will figure out what airplane to build
    around that or what airborne device to build around it. That is
    a much better approach going forward.
        Mr. Bacon. Okay. Thank you, gentlemen.
        And, Mr. Chairman, I yield back.
        The Chairman. Mr. Carbajal--I am sorry. Mr. Gallego. I have
    to go to the next one on the list.
        Mr. Gallego. All of these Marines are the same, are they
    not? Thank you, Mr. Chair.
        You know, we are actually very proud in Arizona to have a
    Cyber Warfare Range. And it is an incubator to train the future
    cyber warriors. And it is, you know, a great place. It is a
    nonprofit. By design, it is a nonprofit, not government-run.
    And that is something that I think has made it be fairly
    flexible in both creating its curriculum and also in terms of
    outputs.
        But, you know, if it was a government program, it is my
    opinion and, I think, the opinion of many people that it would
    be a little slow in terms of its being able to change and adapt
    to environments, change the curriculum, be able to retain and
    attract students. And, you know, in this environment, we need
    the cyber warriors to come out as fast as possible, as strong
    as possible, as smart as possible, and as trained as possible.
        What can we do to encourage that type of environment,
    especially, kind of, from top down in this stuffy world that we
    deal with when it comes to, you know, DOD policy versus what we
    need, you know, what I would say is a very aggressive cyber
    warrior and cyber warfare policy?
        And we will start with you, Dr. Schmidt.
        Dr. Schmidt. So the great thing about cyber warriors is
    that, relative to the other things we are talking about in the
    military, they are very inexpensive. The salaries are
    relatively low. You do not need that many. They are brilliant
    people.
        And I am beside myself over why we do not have a surplus of
    such people. We have such a shortage. They are the cheapest and
    highest, most effective part of our defensive systems. And I
    think it is because we do not have a name for them. As Mike
    said, he does not have a line item for doing what you just
    described.
        So you could imagine that, as a part of a future NDAA, you
    could say, we would like to have a thousand of this kind of
    person, under the command of the Secretary, doing useful
    things. Right?
        And I think that the only way you will get that is by doing
    some form of numeric quota around the people. In the same sense
    that we argue over the number of airplanes and ships and so
    forth, why do we not simply say, we need this many people, and
    then the system will produce the top people into that.
        Mr. Gallego. And, Dr. Schmidt--before we get to you, Mr.
    Griffin--I am sorry to put you on the spot, but just out of
    curiosity, since you brought it up, if you had to even pinpoint
    a number, just a guess out of the blue--or, do not guess, but
    your best educated guess at least--what is the amount of cyber
    warriors we would need in this country?
        Dr. Schmidt. Well, the general answer in my industry----
        Mr. Gallego. Not enough.
        Mr. Schmidt [continuing]. Is a thousand.
        Mr. Gallego. A thousand. Okay. Wow.
        Dr. Schmidt. And in the military it is probably a small
    number of multiples of that.
        Mr. Gallego. Wow. That is amazing. Okay.
        Mr. Griffin.
        Secretary Griffin. Well, I would just offer a couple of
    comments in addition to those that Eric provided.
        Cyber defense is, of course, critically important to the
    Department, but I am going to go out on a limb and say that it
    is even more important to those who guard our economic systems
    of banking and financial industry and all of that. And so the
    Department is looking toward bringing in--we have a new CIO
    [Chief Information Officer] who will be coming in from the
    financial industry. I think we need to do everything we can to
    tap into people who are, if you will, playing for their own
    money in this arena. And we are doing that.
        Eric mentioned, you know, my comment that, well, unless I
    have an appropriated and authorized line item, I cannot spend
    money on something. If you want to emphasize cybersecurity,
    both offensive and defensive--and it is one of my priorities--
    since we all agree that we do not really know very much about
    what we are doing in this area, when you give us the
    authorization to hire these thousand people, you cannot be too
    specific about what I have to do with them, because I do not
    know right now. You have to have a little bit of trust in us to
    use the money----
        Mr. Gallego. Right.
        Secretary Griffin [continuing]. As the need evolves.
    Because we hope to learn more about cyber defense and offense
    to produce an adequate cyber warfare capability, but I cannot
    sit here and tell you right now that I or anyone else we have
    knows exactly what that should look like.
        Mr. Gallego. So the cultural change, then, both has to be
    on the DOD side as well as, what you are basically asking, on
    the political side, in terms of how we appropriate money and
    legislate money then. At least give the flexibility to be able
    to do that and basically allow people to fail, like they
    normally do in the private sector.
        Dr. Schmidt. Let me help Mike out.
        Mr. Gallego. And do that in 10 seconds. Go.
        Dr. Schmidt. He described precisely the problem. He wants
    to do something; he cannot find a budget item which allow him
    to find the money to legally spend it. And the problem is we
    have the Armed Services Committee, we have the appropriators,
    and then we have the internal budgeting processes within the
    DOD, all of whom organize to make sure that there is no wasted
    individual.
        Well, we cannot precisely define what these people are
    going to do, but we know we need them. And they are not
    expensive compared to the other things that we should be
    focusing on.
        So there are certainly things that you all should be
    focused on that are the big-ticket items, but I would strongly
    encourage you to have a small number of buckets which somebody
    like yourself is taking a look at, where you say, hey, let them
    try it, let them experiment. And whether it is hiring people or
    money that goes to universities, these are honorable people
    that are trying to do the right thing.
        Mr. Gallego. Thank you, Mr. Chair. I yield back.
        The Chairman. Just so I can clarify, because--so, are you
    talking about X number of people in your organization, Dr.
    Griffin, who you could use as a task force to go do this, that,
    or the other thing? Because we have this whole Cyber Command
    that does a whole variety of things, and we have been pouring
    money and people into that.
        Secretary Griffin. Generally speaking, sir, when I talk
    about deploying people to a problem, I am not talking about
    necessarily DOD civilians or military officers. There may very
    well be some of those or even many of those.
        But I am really talking about the necessity to engage our
    laboratories, to engage our universities, to the flexibility to
    stand up a cell in the Department if we feel that we need to,
    or the flexibility to put work where we think it can best be
    done.
        But, no, I am not talking about going out and hiring
    thousands of civil servants. That is not my primary goal.
        The Chairman. And I am just sitting here trying to think,
    okay, how do we write something that gives this sort of
    flexibility as a trial? Because it will be a challenge for the
    appropriators to agree to the broad flexibility. I am trying to
    narrow it down, say, a pilot or something.
        Dr. Schmidt. So, again, with sympathy to the problem you
    are trying to solve, I can imagine you saying, here is a pot of
    money, which is not a large amount relative to the amount that
    you normally deal with, and that you reserve the right to
    review how it has been spent every 6 months or so and that you
    are open to how it be spent. Right? In other words, we are
    going to trust the other side, but we are going to inspect. You
    go back to ``trust, but verify.'' I think that is a completely
    appropriate view that you should take.
        The problem is that you do that, and then, for the next 6
    months, many other people are saying yes and no, rather than
    letting people come up with some new ideas, experiment, come up
    with some new ideas. And then, at the end of day, the next 6
    months, you would say, we got some good things and we made some
    mistakes. And, again, Mike or his equivalent will come back and
    say, we want to be honest with you, this worked, this did not,
    and we are going to emphasize the things that worked, and we
    are going to stop the things that did not.
        That is how innovation works in my industry.
        The Chairman. Well, it is absolutely a fair point to say we
    are part of the problem by complaining when things do not work.
    And I think that is one of the lessons, at least, that I have
    learned in recent years.
        I apologize for interrupting.
        Ms. Cheney.
        Ms. Cheney. Thank you, Mr. Chairman.
        Thank you to our witnesses.
        Dr. Griffin, could you talk specifically, if hypersonics is
    our number one priority here, what are the main obstacles you
    see to a much more efficient, effective development of that
    technology? What are we doing about those obstacles?
        And address, as you are doing that, whether or not our
    obligations--or, an interpretation of our obligations under the
    INF [Intermediate-Range Nuclear Forces] Treaty are having an
    impact on the research we are doing on hypersonics.
        Secretary Griffin. Let me take the last part of your
    question first, if I might, ma'am.
        The INF Treaty, I think, does not hinder our ability to do
    research. It would color--the logical question is, why would
    you do research on systems which are capable of violating the
    INF Treaty? And my answer to that would have to be that our
    adversaries are already in violation, so I am not quite sure
    why we are observing the rules of a game that our adversaries
    have abdicated. I----
        Ms. Cheney. But would you say that we are observing the
    rules of the game with respect to----
        Secretary Griffin. So far, yes, ma'am, we have been. And I
    think that is a question for the Congress to deal with.
        Now, with regard to systems that we can develop and how we
    can speed things up, we are on a test cycle where every few
    years we do an advanced hypersonic weapons experiment. We just
    did one with the Navy's Flight Experiment 1. FE-1 it is called.
    It was a brilliant success. I cannot praise them enough for how
    well they have done.
        So, as the new Under Secretary for R&E, the question I am
    asking the Navy is, how soon can I have FE-2? And why are we
    talking about, you know, 18 months or 2 years or 2\1/2\ years?
    Why is it not August? That kind of pace of development as we
    work our way through the system problems to produce a
    realizable, operational system--we need to emphasize
    development pace.
        These guys are doing great work. I do not have any
    suggestions to them to improve their work. I want it tomorrow.
    And I want to know from them, what is your impediment to
    delivering the next test next August, so I can help you get
    that impediment out of the way.
        Ms. Cheney. And do you have a sense already of what some of
    those impediments are?
        Secretary Griffin. No, ma'am, other than what we have
    talked about here: our general culture of process, risk-
    avoidance, fear of failure. How many times do I have to analyze
    the system to be as sure as I can be that, when I do a test, it
    will not break, as opposed to a cultural mindset that says my
    greatest enemy is time, my greatest enemy is not breaking a
    piece of hardware.
        I must add, ma'am, that I am often--every time I talk about
    regaining the kind of pace and speed that we used to be known
    for, people think I am talking about cutting out system
    engineering or testing or things like that. No, I am not. What
    I want to cut out is layers of bureaucratic decision making,
    where way too many people think that their opinion matters in
    the decision process.
        I do not want to cut out engineering tests. I want to cut
    out the number of people who think they have a right to an
    opinion. Because that is how we are going to shorten the
    process. And if that sounds cruel, I am sorry, but that is what
    needs to go.
        Ms. Cheney. And do you have a sense, Dr. Griffin, that you
    have a willing audience in terms of the leadership of the
    Department? How will the process work from here in terms of
    making this kind of change that is a difficult one because it
    is a cultural change but, as you said, our greatest enemy is
    time?
        Secretary Griffin. I believe strongly that I have the
    unequivocal support of both the Deputy Secretary, whose
    experience in industry I much admire, and the Secretary, whose
    thought leadership in these areas is unparalleled. I cannot
    recall a better team.
        Ms. Cheney. And then, Dr. Schmidt, when you find a problem
    like, you know, the scavenger function you talked about, what
    is the system that is in place for you to be able to say, look,
    here is a problem, here is how we need to fix the overall
    process to address that?
        Dr. Schmidt. So, by law, my group is called a FACA [Federal
    Advisory Committee Act] committee, so we are not allowed, by
    law, to implement anything. We are required to hold public
    hearings so we discuss it in public, and then we obviously want
    to speak to you. We have very good working relationships with
    the senior leadership in the DOD, who are listening to us. But
    we cannot cross the implementation line.
        Ms. Cheney. All right. Thank you. My time has expired.
        The Chairman. Mrs. Davis.
        Mrs. Davis. Thank you, Mr. Chairman.
        Can I just clarify, Dr. Griffin, for a second--because I
    think you mentioned that people want to be heard. And they do.
    They believe their opinion is important. But there is also fear
    of accountability there, fear of, if I do not do this right, if
    I do not cross the t's, dot the i's--I mean, how can you smooth
    that process, which is, you know, we have to check all these
    boxes in order for me to be able to move this along? Is that
    something that can be done, can be changed?
        Secretary Griffin. Well, ma'am----
        Mrs. Davis. How is it done?
        Secretary Griffin [continuing]. It can be done. We are,
    first of all, a sovereign nation, and the Department operates
    within that. We Americans make our own rules.
        Mrs. Davis. Right.
        Secretary Griffin. So it is my best professional judgment
    that I can give you that, as regards engineering development,
    we have too many boxes to check.
        Mrs. Davis. Yeah.
        Secretary Griffin. If we do not reduce the box checking,
    then we are never going to change the time.
        Now, most of my career has been in government service one
    way or another, through laboratories and such, but I have about
    a decade, rounding off, in industry. And I can only tell you
    that there is a fundamentally different mindset. When you are
    in commercial industry, you are responsible for outcome. You
    are not responsible for process. Companies that become too
    bound up in process fail, and others win.
        If we cannot in government--not just the Department of
    Defense--if we cannot in government become more focused on
    producing the outcomes we seek----
        Mrs. Davis. Solving the problem.
        Secretary Griffin. Right, solving the actual problem, as
    opposed to proving that you went through the required process
    on your way to the failure, if we cannot change that mindset,
    then whichever member said earlier we had better learn to speak
    another language, I guess I am with him.
        Mrs. Davis. Yeah.
        Dr. Schmidt.
        Dr. Schmidt. I have never seen it work any other way, that
    you get a group of people in a room with a whiteboard, or a
    blackboard in the old days, and you have a big food fight, and
    you balance all the various interests to achieve a clear
    outcome. That is how development is done. That is how it is
    done, slowly and quickly and with a sense of pressure and with
    creativity.
        The military does not operate that way. That kind of
    behavior is in some cases illegal and is certainly frowned upon
    culturally. Indeed, what happens is there is a requirements
    process, and then there is a bidding process, and then there is
    a winner and a loser and a challenge, and then people are
    checking boxes and so forth. This is guaranteed to slow
    everything down. It is predictable that it would slow it down.
        All you would have to do would be to allow the meeting that
    I am describing to occur. That is how innovation works.
        When I talk to the military, they talk about what they view
    as a golden era, which, roughly speaking, think of it as the
    skunkworks period, where you would have--they describe a world,
    perhaps apocryphal, where in the 1970s you would have this
    plant and these people, and you would try this airplane and you
    would try that airplane, and this one crashed and this one
    worked, and they kept iterating very quickly.
        That should be the mantra. And if that is not happening,
    there better be a good reason why we cannot develop in that
    model. And it seems to have been lost today.
        Mrs. Davis. Uh-huh. So we have to try and fix it, Mr.
    Chairman.
        The Chairman. You are right.
        Mrs. Murphy.
        Mrs. Murphy. Thank you, Mr. Chairman.
        Thank you, gentlemen, for your testimony today.
        I represent a district in Central Florida that is home to
    what is called Team Orlando. It is a public-private partnership
    from modeling, simulation, and training [MS&T] that is co-
    located with the University of Central Florida, which is the
    second-largest university in the country and a major R&D
    institution.
        Additionally, a key part of that ecosystem are a lot of
    these small businesses that are drivers of innovation in the
    MS&T and cyber industry. What I hear from them all the time is
    how hard it is to survive the long contracting lead time, not
    to mention CRs [continuing resolutions] and the impacts of
    those.
        Recently, the Army just stood up a consortium called the
    Training and Readiness Accelerator, where we affectionately
    call it TReX, and it basically uses a flexible, alternative
    contract instrument called OTAs, or other transactional
    authorities, to field innovative research and prototypes. And
    they are trying to focus those fielding prototypes in areas
    where we need the most innovation--cyber training, artificial
    intelligence, medical modeling and simulation, those types of
    things.
        Can you talk a little bit about how you think the
    Department of Defense should utilize OTAs and other
    unconventional acquisition methods to jump-start innovation?
    And, then, how can we ensure that these contract instruments
    are used to their greatest effect and managed properly?
        Dr. Schmidt. So these OTAs have been around for a long
    time, and, indeed, the Congress has recently increased the
    number of OTAs. And yet the system that you are giving the OTAs
    is not using them very much compared to the opportunity before
    them.
        So our team has recommended that, in fact, the military
    measure the use of OTAs and encourage the use in a measurement
    sense. If you set an objective, like if we are doing them a
    thousand times it needs to be doubled, I think that would make
    some progress to achieve the objective you laid out, which we
    agree with.
        Mrs. Murphy. Uh-huh.
        Secretary Griffin. Well, I certainly agree with all that.
    As to how they can be managed properly, I know of no better
    approach than to hire people that you trust to carry out a
    given development, put them in charge, and hold them
    accountable for the result. The whole purpose of an OTA is to
    reduce the box checking that Ranking Member Davis commented on
    earlier.
        Mrs. Murphy. Uh-huh.
        Secretary Griffin. So, again, measuring--the Congress gave
    us, the Department, enhanced permission to use OTAs. I think
    you should require us to use them and measure us on that.
        Let me, however, add a parenthetical comment. The whole
    purpose of an OTA is to get around the system. Maybe we should
    just fix the system. I will leave you with that.
        Mrs. Murphy. Do you think there is a personnel element to
    why the OTAs are not being used to the full potential?
        Dr. Schmidt. So, again, I would go back to this
    psychological problem, that the psychology of risk is set--the
    bid is set to ``wrong.'' People should be promoted because they
    took risks. People should be promoted because they took risks,
    some of which failed, but enough of them won that the cause of
    whatever they care about was advanced greatly, right? And that
    is not in the language, in the military, in the HR [human
    resources] policies today.
        Mrs. Murphy. Uh-huh.
        On another contracting personnel issue, you know, earlier
    this year, my colleagues and I were briefed on the F-35's
    continued sustainment problems, which are accumulating at such
    a rapid pace that the Air Force may be forced to reduce their
    plan by a third if sustainment costs do not fall significantly.
        One of key issues that was highlighted in the F-35
    sustainment report was a severe quality difference between
    industry contracting experts and those in the DOD that led to a
    contract that the Department still does not quite understand.
        How can the Department of Defense develop the contracting
    experts necessary to negotiate better with the industry? And
    how important is this expertise in the future of U.S. defense
    innovation?
        Secretary Griffin. Well, Ms. Murphy, as I mentioned
    earlier, I do not have F-35 under me and have really very
    little knowledge of the program, so I----
        Mrs. Murphy. But I think this disparity is not just unique
    to the F-35. Could you speak about it more broadly, the
    disparity between the quality of contracting experts on the
    other side of the negotiating table from our DOD contracting?
        Secretary Griffin. I can only say that industry has a lot
    more money that they are allowed to spend on hiring lawyers and
    contracting officers than does the DOD. And it will always be a
    challenge for us to get people willing to work for civil
    service wages to go up against their corporate counterparts.
        Eric mentioned earlier--and it is true--there are many,
    many, many very patriotic individuals who will take a salary
    cut to a small--that is, in effect, a small percentage of what
    they could earn in industry and come to work on behalf of the
    taxpayer to help retain the greatness that we have in this
    country. But not everyone will, and it is a difficult
    challenge. I cannot say more than that. It is a very difficult
    challenge.
        Mrs. Murphy. Great. Thank you.
        And my time has expired. Thank you.
        The Chairman. Dr. Wenstrup.
        Dr. Wenstrup. Thank you, Mr. Chairman.
        Thank you, gentlemen.
        We talked a lot today about increasing speed, as far as
    innovation. And one of things that you had said, if I heard you
    correctly, is one of the problems and challenges that we face
    is that so much technology is available to everybody; it is not
    really just ours.
        And, to me, that is part of the problem that we face,
    whether it is intellectual property that is stolen, whether it
    is intellectual property that happens to be shared, whether it
    is property that comes from the commercial side rather than out
    of, say, the Department of Defense or wherever.
        So those are some of the challenges we face. So increasing
    speed, I guess that helps, but it does not help a whole lot if
    it is immediately available to everybody else, including your
    adversaries.
        So, in this process, what recommendations do you have of
    how we protect ourselves with what we do come up with? And
    where do you see the pitfalls today?
        Secretary Griffin. Well, I guess I can go first.
        There are certain technologies that are and should be
    highly classified and certain programs that we do that are and
    should be highly classified that we should try to wall off from
    others, and we should make sure that we are successful at that.
        But I will offer--you are asking for a conclusion of the
    witness, and I will offer my opinion that the way to get ahead
    and stay ahead is to work harder and run faster. Even if we
    have a technological edge in a particular area--you can name
    the area--even if we have an edge, once an adversary knows that
    a certain thing is possible to do, even if they do not have
    exactly the same intellectual property that we used to do it,
    they will figure out a way. If they are intent on dominating
    us, our only recourse--our only recourse--is to work harder and
    run faster and stay ahead.
        And that is best enhanced by a free and open interchange of
    market technologies, the unhindered flow of capital and people
    to businesses that are successful and DOD enterprises that are
    successful, and, as Eric mentioned earlier, stopping those
    things that are not working. If we cannot be more agile than
    our adversaries, then in the long run they will win. I cannot
    say it another way.
        Dr. Wenstrup. No, I get that completely. I guess my
    question is, are we doing enough to slow down their speed, our
    adversary's speed, I guess? You know, you called it walling
    off. Is it really walled off, or is everything just getting
    out?
        Secretary Griffin. You cannot wall things off, sir, not
    permanently.
        Now, there are some things--there are a few more
    progressive news magazines than The Economist which championed,
    as I well remember, China's admission to the World Trade
    Organization a couple of decades ago. They now, just a few
    months ago, had an extensive article on Chinese practices of
    holding corporate IP [intellectual property] hostage if a
    corporation wants to manufacture in China. This is an unfair
    practice. Until and unless the United States and our allies are
    willing to push back on such practices, we will be handing IP
    over to an adversary.
        So there are some things we can do, but, broadly speaking,
    if we are not prepared to work harder, run faster----
        Dr. Wenstrup. Right. Right.
        Secretary Griffin [continuing]. And compete at the
    technological edge, then we will not win.
        Dr. Wenstrup. And I understand what you are saying, that
    they are going to catch up at some point anyway. But the point
    is to stay ahead. And so I think you were, in a way, making a
    recommendation there that we do not allow this to happen so
    readily and so quickly and so easily, for, say, China to
    inherit our information and technology.
        Secretary Griffin. Yes, sir, that is correct. I certainly
    think we should be not doing deals in which giving up our IP is
    contingent to the deal. That does seem remarkably shortsighted.
        Dr. Wenstrup. Thank you.
        I yield back.
        The Chairman. Mr. O'Halleran.
        Mr. O'Halleran. Thank you, Mr. Chairman.
        And thank you----
        The Chairman. Is your microphone on?
        Mr. O'Halleran. There we go.
        I would like to echo the ranking member's comments about
    the importance of developing tomorrow's technology and defense
    leaders through investments in STEM education and other
    programs that promote innovation.
        During your testimony today, you made some observations
    that I found extremely interesting. One of the issues we have
    talked about today is workforce and that it not only addresses
    the current issues but the future issues as we move forward;
    and the needs, additionally, for the DOD in areas like AI,
    which, you know, I was using consultants on AI in the late
    1980s, so I do not understand why we have not moved ahead
    faster on this area; cyber, where we have had people in here
    this year to address us, and they have indicated that by 2025
    we need another million people, both private and government, in
    that area; and other things that we have not even thought of
    right now.
        And you have mentioned about the universities. And our
    universities are great universities, but they are only going to
    be as good for us as the people that we send to them. And I
    believe that we cannot afford, as a country, to leave people
    behind that have the knowledge potential but lose it because of
    inability to get the type of education they need.
        And then we have talked here in committee, time and time
    again, about the all-of-government approach. And we do not seem
    to have the all-of-America approach to issues.
        So we have critical barriers in developing a high-tech
    workforce. Nearly 20 million Americans and one-quarter of rural
    communities do not have access to broadband. Lack of broadband
    access affects the ability of meaningfully expanding STEM
    initiatives in those areas and impacts businesses across the
    industrial base in rural areas. I believe without addressing
    this key infrastructure priority, our shared goal of sharing
    defense-related innovation among nontraditional and small
    businesses will not achieve its full potential.
        I also believe that if we do not clearly identify that
    our--whether it is preschool and to high school, that this
    transition is not--right now, it is not working for America,
    and we need to find a way to get that to work.
        I would like to ask the witnesses how the digital divide
    and lack of broadband impacts the culture of innovation at the
    Department of Defense and believes that it is necessary for
    today and tomorrow's national security.
        Thank you.
        Dr. Schmidt. No, thank you.
        The issue of broadband is crucial to economic growth in our
    country, to educational growth, to societal growth. There are
    groups still left behind.
        There is tremendous work in using licensed and unlicensed
    radio waves to achieve the last-mile problem in rural areas. So
    I have good news, that I think that in the next some number of
    years we will overcome even those challenges. It started in
    1996 with NetDay, when we wired up the schools; 20 years later,
    I think we are getting very close to it.
        I agree with your comment. Part of the reason that
    broadband is so important is that, on the educational side,
    which is what really affects the military, there are new tools
    and techniques being developed using AI for direct and personal
    learning which are available over broadband networks that are
    interactive and interesting and game-ified and so forth.
        So there is a possibility of reaching the most isolated and
    most disadvantaged person, you know, citizen who can really
    benefit from this in a way that can materially affect their
    careers, their quality of life, their education, and their
    suitability for military service.
        Mr. O'Halleran. Mr. Griffin.
        Secretary Griffin. Well, if there is anyone more in love
    with education than I, you would have to struggle to find him.
    So I agree with everything that has been said.
        You know, we need to do a better job of preparing our high
    school students to go to college. I have spent time as a
    college professor, and I would agree with the observation that
    our high school students are not coming to college as well-
    prepared as they once were and that we should fix it. And one
    of the ways to fix that does involve broadband access for
    everybody. That is the modern world.
        Mr. O'Halleran. Thank you.
        And I yield.
        Secretary Griffin. And I do not know what the Department
    can do specifically, but I support your goals.
        The Chairman. Mr. Khanna.
        Mr. Khanna. Thank you, Mr. Chairman.
        Thank you, Dr. Griffin, Dr. Schmidt, for being here, for
    your service to our country. It is heartening to see a
    physicist, a technologist, answering the Nation's call to
    public service.
        Dr. Schmidt, in your book ``The New Digital Age,'' you and
    Jared Cohen anticipated a lot of the issues that we face today.
    You talked about data permanence and the problem with data
    permanence. You talked about the need for internet privacy.
        I agreed with your statement, Dr. Schmidt, about the
    technology competence in the Department of Defense, and I think
    Dr. Griffin cited the same thing. But I wonder, candidly, what
    both of you thought and whether you shared the dismay and,
    frankly, embarrassment that most Americans had, as they watched
    the Senate hearings and some of the Senators questioning Mark
    Zuckerberg, about the technology gap in the United States
    Congress and whether there are things we could do to help
    improve that.
        Secretary Griffin. I did not see the hearing and was not
    aware of it, and so I cannot offer you a useful comment, sir. I
    am sorry.
        Dr. Schmidt. I, too, did not watch the hearing. I am sorry.
        Mr. Khanna. Are there things, you think, that--do you think
    the United States Congress could improve our knowledge about
    technology?
        I mean, just to give you a sample, one of the Senators
    asked Mark Zuckerberg how does he make money on Facebook when
    he does not charge for the services. Another Senator did not
    know what cookies were. I mean, I can go through it.
        And I am not saying this in a disparaging way. I am just
    wondering, do you think--you have talked about the education.
    Do you think the United States Congress, to be able to deal
    with matters of defense and artificial intelligence, could use
    a better education?
        Dr. Schmidt. Well, I can say that the areas that we are
    describing now are pretty technical, and I would not expect an
    average citizen in good standing to understand them a priori. I
    do think that more briefings, for the benefit of the Congress,
    of the impact--I will pick my favorite area, artificial
    intelligence--would be helpful so that the leaders of our
    Nation can understand the good, the bad, the restrictions, what
    they are good for, what they are bad for, and their
    implications.
        My industry, as you know very well because you represent
    us, is gaga over AI and the application of it in our
    businesses. And it is important that our leaders understand the
    implications of all of that.
        Secretary Griffin. I mean, broadly speaking, I think most
    of us are aware that having educational and cultural and all
    kinds of diversity in decision-making groups aids the decision
    making. The more disparate points of view you can bring to a
    task before you have to actually make a decision, generally the
    better you will do. And so, if more working scientists and
    engineers and medical doctors and such ran for Congress, I
    think that would broadly be a good thing.
        But, you know, when--and I have had many years now of
    working with the Congress, and I do not generally find that the
    issues confronting us are caused by a failure of the Congress
    to understand what we are saying. The issues seem to be more
    systemic, as Dr. Schmidt was pointing out earlier. I could not
    choose better words, and so I will just try to quote him as
    best I can. We have great innovators in the Department that are
    trapped within a system that really does not work.
        As Winston Churchill famously said about democracy, it is
    the worst of all systems except for all the others we have
    tried. Some of these things seem to be just endemic to the
    nature of representational democracy, and we struggle on to do
    the best we can.
        Mr. Khanna. If I could ask one final question, and then I
    will give you both the last word.
        Dr. Schmidt, in your book, you did talk about privacy and
    regulation of privacy. And that is probably, as we are dealing
    with artificial intelligence and all the positives, probably
    more important than ever.
        Congresswomen Anna Eshoo, Zoe Lofgren, and I have been
    thinking about what an internet bill of rights would look like,
    something maybe not as expansive as the GDRP [General Data
    Protection Regulation] but within the American context.
        I wonder if you and Dr. Griffin have thoughts about how to
    get technology leaders part of that conversation and behind an
    idea that would assure the American public that the Congress
    can protect their privacy around some internet bill of rights
    in a bipartisan way.
        Dr. Schmidt. So there have been a number of attempts at
    doing this. And I think many people are sympathetic to the idea
    that you are proposing. The devil is in the details, as you
    know from being a legislator. And so I would encourage the
    three of you to work hard--you all know our industry very well,
    and you try to represent the Nation as strongly as you can--to
    try to find that balance.
        In our book, which was some years ago, we said you need to
    fight for your privacy or you will lose it. And I remember
    writing that sentence because it is so easy for the public
    information about you--or the private information about you to
    become available to the public without your knowledge. And I
    think there must be a way to enshrine that principle with the
    right balance between interests.
        Mr. Khanna. Thank you.
        The Chairman. Dr. Schmidt, let me ask one other question
    that occurs to me. We have talked about much of the innovation
    in the country occurs in the private sector. Especially for
    small businesses, it is hard to do business with DOD.
        But since you have a foot in both camps, what is the
    willingness of, say, the IT industry to do business with the
    Department of Defense? Is there a reluctance?
        Dr. Schmidt. Well, there is a general interest in doing
    business with the DOD. There is a general fear that the
    overhead costs will kill the startup.
        And it would be very helpful if we had a number of
    companies that had started with an idea, had help from the DOD
    to get through the process, and had ultimately become hugely
    successful in the new paradigm. And if we had a couple
    companies like that that we could point to in our narrative, I
    think that would encourage more of that.
        You know, the venture industry is a hits business, and so
    we need a couple of hits of companies that are good businesses
    that have also served the DOD in the things that it cares
    about. DIUx is an attempt at that. There are other initiatives
    within the DOD to do that. But we need a couple big wins.
        May I add, I wanted to say something to all of you, that it
    is important not to feel helpless when you are in our situation
    but, rather, be clear and assertive that this is a system, as
    Mike said, that operates under the laws of our Nation; we can
    change it.
        So we have highlighted a couple of examples of things which
    do not make any sense when you are in the middle of a system--
    right? If I could paraphrase you, it just does not make any
    sense.
        Secretary Griffin. Exactly.
        Dr. Schmidt. Why do all of us not collectively engage in a
    discussion as to how we could eliminate some of those
    nonsensical behaviors, right, and at least have that debate?
        It feels like that debate is not occurring, to me. As a
    private citizen, it feels like everybody is sort of repeating
    the old criticisms--well, this contractor screwed up, or this
    procedure was a problem--rather than saying, this system was
    not architected. How would we architect a system to address at
    least the stupid stuff?
        I assume you are okay with that.
        Secretary Griffin. Again, I could not agree more. Eric and
    I have a remarkably consistent alignment.
        I simply know that, when developing new things that have
    not been done before, it is hard to get it right, it is easy to
    make mistakes along the way, and when you are doing it, you are
    guided by a single-minded focus on the end goal. But when I am
    doing that, I cannot tell you up front what the requirements
    ought to be, exactly how it is going to come out in the long
    run, what contractors I need, what people I need, what system
    practices I am going to use. It depends.
        And so, if in the advanced development stage--which I will
    say includes things up through operational prototype so that
    real operators can have some experience with the thing before
    deciding to go into production--if up through the operational
    prototyping phase you can give the Department as much
    flexibility as possible to not know exactly how we are going to
    get to the goals we all share, give us the flexibility to not
    know how we are going to get there, and hold us accountable for
    outcomes instead of processes, that is the best thing that you
    can do.
        Thank you, sir.
        The Chairman. That is helpful.
        The only thing I would quibble with you a bit about is, I
    do not think it is business as usual at this point. My sense is
    we have a combination of leadership at the Department that is
    committed to reforms. We have more bipartisan interest in
    Congress committed to reforms. And I have this sense of
    urgency, that you all have described in another sense, that
    this is a chance to improve our processes. Now, none of us will
    be satisfied, it will not go far enough, but we have an
    opportunity here that, with you-all's guidance and a little
    willpower, we can make significant improvements.
        And so that is one of the reasons that I wanted to have
    this hearing in public today. I appreciate very much both of
    you being here. And in about 5 minutes or so, we will continue
    our discussion in classified session upstairs.
        The hearing stands adjourned.
        [Whereupon, at 12:05 p.m., the committee proceeded in
    closed session.]

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                                A P P E N D I X

                                 April 17, 2018

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                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                 April 17, 2018

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                       QUESTIONS SUBMITTED BY MRS. DAVIS

        Mrs. Davis. In your view, would Congress be better able to engage
    with important defense issues if it had access to comprehensive and
    forward-looking technology assessments?
        Secretary Griffin. Yes, I believe that, in order to make informed
    decisions in this arena, the R&E enterprise should maintain open and
    thorough communications with Congress regarding the path forward for
    not only emerging technologies, but also emerging threats that drive
    our technical priorities. It is easier to understand the gravity of
    these challenges with comprehensive technology assessments that are
    both qualitative and quantitative in nature. In addition, technology
    assessments that are specific to existing and emerging priority areas
    such as hypersonics and directed energy can help scope the support
    needed from Congress, and ensure a common understanding of the most
    critical defense issues.
        Mrs. Davis. On which defense issues would it be helpful for Members
    of Congress to have comprehensive and forward-looking technology
    assessments?
        Secretary Griffin. Missile defense, space, nuclear modernization,
    hypersonics, directed energy, artificial intelligence, cybersecurity,
    quantum science, microelectronics, and fully networked command,
    control, and communications are all areas of needed technological
    advancement. These areas also require an understanding of the
    international competitive landscape at present and in the future to
    maintain a military edge. The Department and Congress would benefit
    greatly from an understanding of the future direction of technologies
    supporting these different areas as well as the Department's plans to
    mitigate any challenges to technological superiority in these areas.
        Mrs. Davis. How would you expect the OTA would be able to inform
    Congress' conversations on defense technologies?
        Secretary Griffin. I believe the DOD should continue to pursue
    collaboration with commercial entities using streamlined mechanisms
    such as Other Transaction Authority (OTA) to assess, evaluate and
    capitalize on the potential of new technologies and capabilities in
    order to provide a cost-effective warfighting advantage. We must
    continue to utilize non-traditional mechanisms to accelerate
    development and, ultimately, to deliver technologies more quickly and
    efficiently to the warfighter in the field. The OTA is a powerful tool,
    and I believe, when used properly, it is an important model for
    Congress to consider in the emerging conversation of current and future
    acquisition reform.
                                     ______

                      QUESTIONS SUBMITTED BY MR. GALLAGHER
        Mr. Gallagher. When it comes to funding defense-relevant
    innovation, the private sector plays a key role--but market incentives
    aren't always aligned with defense interests. When it comes to defense
    innovation, U.S. venture capital often tends to focus on software, not
    hardware, given shorter return horizons and lower capital barriers.
    What, if any, concerns do you have about ``hard,'' non-software
    technologies being underfunded?
        Given the past success of organizations like In-Q-Tel, could a U.S.
    government-supported investment vehicle, focused on the non-software
    technologies in greatest demand to military leaders with the highest
    potential impact from investment, be of use to better capture
    innovation and leverage it in support of DOD objectives?
        Secretary Griffin. In-Q-Tel has been a valuable asset for the
    communities it serves, particularly with regards to leveraging American
    venture capital efforts in ways that provide critical innovation to the
    warfighter while allowing those private businesses to maintain their
    non-DOD business and products. I would support exploring options for
    DOD to partner with venture capital firms and investors to leverage
    hardware and software alike in a way that is beneficial to all parties.
    One challenge facing the Department and the Nation is that hardware
    vice software technology development underpins some of the desired
    defense capabilities. The longer time horizons (8-12 years) associated
    with hardware development provide challenges to some innovation funding
    mechanisms in use today such as venture capital funding. For example,
    the percentage of venture capital funding invested in software rose
    from 55% in 2006 to 92% in 2017. Anecdotally, this trend may be
    changing but the data is not yet compiled to verify this. I am
    exploring multiple approaches to address appropriate hardware
    technology development in partnership with private industry. The
    Microelectronics Initiative for National Security and Economic
    Competiveness is one example of an effort that is investing in creating
    state of the art hardware technology for the next generation of DOD
    capability. DARPA is providing its Program Managers with mentoring and
    support to help them navigate the venture capital world and increase
    the likelihood of transitioning ideas into commercially viable product.
    I am committed to pursuing opportunities to fully leverage partnerships
    with venture capital and industry that apply the nation's best
    expertise, creativity and innovation to advance our technology and
    improve our edge in warfare.
        Mr. Gallagher. When it comes to funding defense-relevant
    innovation, the private sector plays a key role--but market incentives
    aren't always aligned with defense interests. When it comes to defense
    innovation, U.S. venture capital often tends to focus on software, not
    hardware, given shorter return horizons and lower capital barriers.
    What, if any, concerns do you have about ``hard,'' non-software
    technologies being underfunded?
        Given the past success of organizations like In-Q-Tel, could a U.S.
    government-supported investment vehicle, focused on the non-software
    technologies in greatest demand to military leaders with the highest
    potential impact from investment, be of use to better capture
    innovation and leverage it in support of DOD objectives?
        Dr. Schmidt. I am concerned that key non-software technologies
    important to the Department of Defense are being underfunded. With the
    U.S. venture capital community focused primarily on software, due to
    the market incentives you reference, China is aiming to replace the
    U.S. as the global leader in these technologies, such as
    supercomputing, batteries and microelectronics, drone swarms, and more.
    This is concerning not only because it is important for the U.S. to
    maintain its technological edge over all adversaries, but also because
    if these technologies come to be dominated by China, their supply chain
    that leads to U.S. usage could become compromised, putting the U.S. in
    a permanently-precarious position. I believe an investment vehicle
    focused on non-software technologies could be one of numerous ways to
    address the funding gap in this area.
                                     ______

                        QUESTIONS SUBMITTED BY MR. BROWN
        Mr. Brown. Considering the framework of the ``three P's'' for
    innovation culture--Proximity, how to properly position common areas
    and shared resources to encourage collaborative problem solving;
    Privacy, how to create spaces that facilitate private conversations and
    help people control interactions; and Permissions, how to encourage
    informal interactions with staff from different backgrounds and with
    different perspectives.
        Secretary Griffin, how is the Department releasing the innovation
    potential of its people?
        Secretary Griffin. The Department strives to foster an innovation
    culture by protecting stable science and technology funding, pursuing
    technical talent with a drive for innovation, encouraging creativity
    and appropriate risk taking, and recognizing and rewarding results
    achieved through innovation. We must prepare for an uncertain future
    with rapidly evolving and adaptive threats with innovative and
    disruptive technologies and the continued pursuit of opportunities for
    change. The Department has located several offices in proximity to
    major innovation hubs around the country to enable collaborative
    research and shared resources for efficiency. These offices include the
    Army Research Laboratory open campus offices in Adelphi, Maryland,
    Southern California, Austin, Texas, and Boston, Massachusetts as well
    as the Defense Innovation Unit Experimental (DIUx) in Silicon Valley.
    Additionally, we protect our most innovative concepts and facilitate
    collaborative work in controlled areas through our joint program
    offices and tri-service projects in high-visibility technologies. By
    leveraging the communities of interest and conducting outreach
    activities to industry and academia, the Department's top technical
    talent is empowered to interact with staff that have a range of
    backgrounds, expertise, and perspectives. Ultimately, the Department
    must be able to drive its military innovation cycle faster than any
    adversary to sustain technological superiority. Our competitors are
    closing the gap because of our processes, not our talent. The
    Department's research and engineering enterprise is committed to
    working with our partners across the DOD to ensure our workforce will
    leverage the full range of authorities granted from Congress to enable
    innovative business practices. In addition, the research and
    engineering enterprise will focus on engaging non-traditional partners
    in shaping our processes, technical focus/roadmaps, and understanding
    our comparative advantage.
                                     ______

                        QUESTIONS SUBMITTED BY MR. BANKS
        Mr. Banks. NSWC Crane has been successful at fostering the
    development of a robust and rapidly expanding innovation ecosystem.
    This nationally recognized model of regional collaboration has
    propelled NSWC Crane along with its partners to the forefront of
    technology development through its utilization of resources from
    industry, academia, and the public sector. This partnership has
    embarked on solving some of nation's toughest problems such as (but not
    limited to) trusted/assured microelectronics, hypersonic and artificial
    intelligence/machine learning.
        The Navy serves as the DOD's Executive Agent (EA) for Printed
    Circuit Board (PrCB) and Interconnect Technology which has the
    responsibility to ensure the DOD has trusted access to those
    technologies. From circuit cards to the microelectronics that populate
    them. Our DOD must have ``trusted assemblies'' to complete their
    mission.
        Dr. Griffin, Do you support an active oversight role in partnership
    with OSD within the Trusted and Assured Microelectronics Efforts/
    Microelectronics Innovation for National Security and Economic
    Competitiveness (MINSEC) to fulfill the congressional mandate for DOD's
    EA to ensure the DOD has trusted access to those technologies?
        Secretary Griffin. One of my top priorities as Undersecretary of
    Research and Engineering is Microelectronics, which includes ensuring
    access to Trusted and Assured Microelectronics. As you recognize, NSWC
    Crane is an integral partner in this collaborative effort and provides
    important leadership and capabilities to achieve this priority. NSWC
    Crane specifically has a number of lead roles in Trusted and Assured
    Microelectronics, the Joint Federated Assurance Centers (JFAC), and
    Strategic Radiation Hardened Materials and Printed Circuit Boards
    (PrCB). We see them as a critical partner in the Microelectronics
    Innovation for National Security and Economic Competitiveness (MINSEC).
        Mr. Banks. NSWC Crane was major contributor to OSD and Strategic
    Systems Program's (SSP) recent successful FE1 Conventional Prompt
    Strike Flight Test. NSWC Crane exercised their innovation eco system to
    reach out to their university and industry partners to provide rapid
    solutions. As the program transition from OSD to the Navy, NSWC Crane
    role will grow and the innovation ecosystem will continue to be
    leveraged. Dr. Griffin, as the Undersecretary for Defense Research and
    Engineering, how can you work with the labs to ensure they have
    resources, authorities and facilities to execute their mission?
        Secretary Griffin. Strong and stable resources, along with existing
    authorities, greatly enhance the laboratories' abilities to operate
    more efficiently and effectively. Therefore, I will continue to
    advocate for and support proper resourcing for our laboratories and
    work to remove institutional barriers that hinder their use of flexible
    authorities. A severely aging infrastructure presents a significant
    challenge to our ability to maintain our technological edge over our
    adversaries. Laboratories must compete against other military
    construction projects for limited resources and have not fared well in
    this process. In the past, labs have had to rely on Congressionally-
    granted authorities, such as Section 219, to largely sustain themselves
    and make much-needed upgrades through minor military construction
    funding. It is also vital the Lab Directors have the necessary hiring
    flexibilities, as well as good lab facilities, to entice a strong
    workforce. Our scientists and engineers play a prominent role in
    developing technologies that benefit the Nation as a whole and their
    subject matter expertise is essential for the Department to meet the
    needs of the Warfighter.
        Mr. Banks. Dr. Schmidt, how can the EA work closely with the DIB to
    accelerate solutions to the warfighter?
        Dr. Schmidt. In my capacity as Chair of the DIB, I've learned of
    NSWC Crane's important contributions and their unique role as both a
    research and development facility. The DIB has publicly stated AI's
    central importance to the Department of Defense, and accordingly, AI is
    a key area where DIB and Crane can work closely together on developing
    solutions, including in cybersecurity, logistics, training,
    communications, and many other critical domains. The DIB stands ready
    to partner with Crane in these ways.

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