[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
WASTEFUL SPENDING AND INEFFICIENCIES:
EXAMINING DOD PLATFORM PERFORMANCE
AND COSTS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
THE BORDER, AND FOREIGN AFFAIRS
of the
COMMITTEE ON OVERSIGHT
AND ACCOUNTABILITY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
JULY 24, 2024
__________
Serial No. 118-125
__________
Printed for the use of the Committee on Oversight and Accountability
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov
oversight.house.gov or
docs.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
56-567 WASHINGTON : 2024
COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Jamie Raskin, Maryland, Ranking
Mike Turner, Ohio Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Michael Cloud, Texas Gerald E. Connolly, Virginia
Gary Palmer, Alabama Raja Krishnamoorthi, Illinois
Clay Higgins, Louisiana Ro Khanna, California
Pete Sessions, Texas Kweisi Mfume, Maryland
Andy Biggs, Arizona Alexandria Ocasio-Cortez, New York
Nancy Mace, South Carolina Katie Porter, California
Jake LaTurner, Kansas Cori Bush, Missouri
Pat Fallon, Texas Shontel Brown, Ohio
Byron Donalds, Florida Melanie Stansbury, New Mexico
Scott Perry, Pennsylvania Robert Garcia, California
William Timmons, South Carolina Maxwell Frost, Florida
Tim Burchett, Tennessee Summer Lee, Pennsylvania
Marjorie Taylor Greene, Georgia Greg Casar, Texas
Lisa McClain, Michigan Jasmine Crockett, Texas
Lauren Boebert, Colorado Dan Goldman, New York
Russell Fry, South Carolina Jared Moskowitz, Florida
Anna Paulina Luna, Florida Rashida Tlaib, Michigan
Nick Langworthy, New York Ayanna Pressley, Massachesetts
Eric Burlison, Missouri
Mike Waltz, Florida
------
Mark Marin, Staff Director
Jessica Donlon, Deputy Staff Director and General Counsel
Kaity Wolfe, Senior Professional Staff Member
Grayson Westmoreland, Senior Professional Staff Member
Ellie McGowan, Staff Assistant and Administrative Clerk
Contact Number: 202-225-5074
Julie Tagen, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee on National Security, the Border, and Foreign Affairs
Glenn Grothman, Wisconsin, Chairman
Paul Gosar, Arizona Robert Garcia, California, Ranking
Virginia Foxx, North Carolina Minority Member
Clay Higgins, Louisiana Stephen F. Lynch, Massachusetts
Pete Sessions, Texas Dan Goldman, New York
Andy Biggs, Arizona Jared Moskowitz, Florida
Nancy Mace, South Carolina Katie Porter, California
Jake LaTurner, Kansas Cori Bush, Missouri
Pat Fallon, Texas Maxwell Frost, Florida
Scott Perry, Pennsylvania Vacancy
Vacancy Vacancy
C O N T E N T S
----------
Page
Hearing held on July 24, 2024.................................... 1
Witnesses
----------
Mr. Moshe Schwartz, Senior Fellow of Acquisition Policy, National
Defense Industrial Association
Oral Statement................................................... 5
Ms. MacKenzie Eaglen, Senior Fellow, American Enterprise
Institute
Oral Statement................................................... 6
Mr. Bryan Clark, Senior Fellow, Hudson Institute
Oral Statement................................................... 8
Written opening statements and statements for the witnesses are
available on the U.S. House of Representatives Document
Repository at: docs.house.gov.
Index of Documents
----------
* Questions for the Record: to Mr. Clark; submitted by Rep.
Gosar.
* Questions for the Record: to Ms. Eaglen; submitted by Rep.
Gosar.
* Questions for the Record: to Ms. Eaglen; submitted by Rep.
Sessions.
* Questions for the Record: to Mr. Schwartz; submitted by Rep.
Gosar.
* Documents are available at: docs.house.gov.
WASTEFUL SPENDING AND INEFFICIENCIES:
EXAMINING DOD PLATFORM PERFORMANCE
AND COSTS
----------
Wednesday, July 24, 2024
U.S. House of Representatives
Committee on Oversight and Accountability
Subcommittee on National Security, the Border, and Foreign Affairs
Washington, D.C.
The Subcommittee met, pursuant to notice, at 9:45 a.m., in
room 2154, Rayburn House Office Building, Hon. Glenn Grothman
[Chairman of the Subcommittee] presiding.
Present: Representatives Grothman, Gosar, Foxx, Sessions,
Biggs, Perry, Garcia, and Lynch.
Mr. Grothman. This hearing of the Subcommittee on National
Security, the Border, and Foreign Affairs will come to order.
Welcome, everyone. Without objection, the Chair may declare a
recess at any time. I will point out that we are scheduled to
be on the floor at 10:30, so we probably have a bifurcated
hearing here today. Everybody will get a break halfway through.
I recognize myself for the purpose of making an opening
statement. I ask unanimous consent that Representative Mike
Waltz of Florida be waived on to the Subcommittee for today's
hearing for the purpose of asking questions. We value his
expertise, so we want him here. Without objection, so ordered.
Good morning. I want to thank everyone for being here today
and I appreciate the witnesses who have taken the time to join
us for this important discussion. The purpose of today's
hearing is to address the ongoing issues of wasteful spending
within the Department of Defense and sometimes misguided
spending. Specifically, we are focused on the performance and
costs of several platforms. The Department of Defense platform
is a term of art used to describe specific vehicles,
facilities, or equipment used to accomplish a particular
mission.
As stewards of taxpayer dollars, it is our duty to ensure
that every cent spent by DoD contributes to the safety and
security of our Nation in the most efficient manner. Let us
start by acknowledging the stark reality we face. There are so
many DoD programs that are plagued by cost overruns, design
delays, and performance issues. Sadly, this Subcommittee has
had no shortage of programs to examine when it comes to
oversight of DoD, and it drives me up a wall, because really,
is the Department of Defense not the most important agency?
Just last month the Subcommittee had a hearing regarding
the V-22 Osprey program, which despite its unique capabilities,
has been mired by mechanical issues and a troubling safety
record. Last year, we examined various ship building issues,
such as Littoral combat ship. This platform has seen costs soar
from an estimated $200 million per unit to $600 million. Even
worse, these ships have suffered from structural defects and
engine failures resulting in several being decommissioned after
only a few years of service.
Today, we will also discuss other platforms that are often
overly praised so much so that we ignore the real issues they
face. For example, the Gerald R. Ford class--the Gerald R. Ford
class aircraft carrier platform has experienced considerable
waste. Initially projected at $13.3 billion, the costs have
ballooned to $120 billion for the program, with mechanical
problems delaying full deployment of--by 15 years.
These carriers are supposed to be the backbone of our naval
capabilities, yet they are failing to meet the basic--failing
to meet basic operational expectations. Additionally, we must
also ensure that DoD is addressing the rapidly evolving threats
of the future while also being cost-effective. The American
taxpayer cannot afford to spend millions of dollars on single-
shot missiles when more cost-effective solutions would exist to
counter $100 drones. We must--they act like money is free, or
there are not better things we can do with it.
We must also address the larger systemic issues of the DoD
that allow such waste and inefficiencies to persist. The
Department has consistently failed comprehensive audits
revealing significant problems in accounting and data
management. The lack of financial accountability leads to waste
and abuse of taxpayer funds. To address these issues, we must
implement stronger oversight and enforcement mechanisms with
DoD.
Both contractors and DoD officials must be held accountable
for cost overruns, delays, and performance issues. We must
ensure that program managers have the proper authority and
resources needed to effectively manage these programs and make
necessary changes as problems arise.
I hope our witnesses today can shine a light on issues
within the defense procurement process and help us understand
what needs to be done to ensure our military is equipped with
reliable cost-effective systems. The American people and our
service men deserve to know that their hard-earned tax dollars
are being spent wisely and that our servicemembers have the
best tools available to protect our Nation.
This hearing is not just about pointing out problems, but
finding solutions. We owe it to our servicemembers, our
taxpayers, and our country to get it right. Thank you again for
our witnesses for being here today, and I look forward to a
productive discussion.
I recognize Ranking Member Garcia for his opening
statement.
Mr. Garcia. Thank you, Mr. Chairman, and thank you to our
witnesses for being here today. We appreciate your time. I am
also glad to be here on a really important subject, but one
that has been bipartisan as far as this Subcommittee goes. We
have had really productive hearings on Navy ship-building
challenges, the failure of DoD to pass an audit, which I think
everyone is concerned about, and on the V-22 osprey.
We know the Defense Department requested nearly $850
billion for their Fiscal Year 2025 budget. Obviously, this is
an enormous amount of American taxpayer resources, and so
whenever there is an opportunity to look for inefficiency in
waste, we should always strive to do so.
The Department of Defense, as we know, still cannot pass an
audit, so it goes without saying that these problems are bigger
than any single administration, or any President or any
political party. The Department of Defense weapon systems
acquisition process was first added to the GAO's office list of
government operations at high risk for waste, fraud, and abuse
in 1990. We continue to struggle with systems that come in late
and way over budget. We know that sole source suppliers can
create many monopolies and exploit their market power to
overcharge the military, and this is true not just in DoD, but
in other departments and in states and cities across the
country.
Now, bipartisan Oversight Committee investigations found
that defense contractors have gouged taxpayers and the DoD by
buying companies with sole source contracts for spare parts,
and then, of course, raising those prices dramatically. DoD and
the IG found that we have wasted billions of dollars over the
last 20 years from overcharging just on spare parts alone. We
all think that is, of course, unacceptable. We know it is not
just contractors. We spent billions of dollars on the little
combat ship, for example, the LCS that we all are aware of
following the launch of the program in 2005. That vessel, just
as an example, cost over $500 million per ship, more than
double the initial cost. The vessels constantly broke down and
DoD relied on contractors for so much of the maintenance that
our Navy personnel could not fix their own ships.
And to add insult to injury, the Navy has admitted that
that ship itself, and I quote, ``does not provide the lethality
or survivability needed in a high-end fight,'' end quote. So,
essentially, we know what that means. The ship basically is
unable to really achieve its mission, it would be easy to
destroy in a real war.
Now, these are many of the programs we now have struggled
for years. Just a few weeks ago, unfortunately, there was an
amendment that was brought to the defense spending bill from
Ranking Member Smith and Congressman Norcross that would have
reduced the number of F-35 aircraft, for example, until
programs and failures in the program were actually addressed.
The F-35 program is projected to cost $2 trillion over its life
cycle, but has been dysfunctional for years.
In July 2023, the DoD stopped accepting F-35 aircraft
deliveries until the enterprise could successfully deliver
tests and field the next version of the operational flight
program. Now we know that we only began receiving deliveries
again just last Friday, a full year after inaction.
Now, it is clear that we need more accountability not just
from this program but so many other programs across DoD. Every
cent that we waste could be invested in priorities like
healthcare, education, or the fight against climate change or
reinvesting in programs that are actually working.
Now, I also want to be fair. We know that developing
systems sometimes are very difficult. Technology oftentimes has
to be changed, so we are all aware of those challenges. As we
face real tradeoffs, it is easy to say that we should reduce
bureaucracy and try to make it easy for new companies to do
business with DoD to increase competition. I think we can also
all agree that it is important to have safeguards in oversight
to make sure that contractors deliver material that will not
put our servicemembers in actual any danger.
Our defense needs and budgetary decisions can be
unpredictable, but in many ways, we keep making some of the
same mistakes. And so, I join the Chairman. I share the
concerns and look forward to productive conversation today with
the witnesses that I want to thank again about how we can
invest our taxpayer dollars more effectively. Thank you.
Mr. Grothman. Thank you. I am pleased to introduce our
witnesses today. Mr. Moshe Schwartz is serving as an expert in
defense acquisition and industrial-based policy. He spent 15
years providing analysis and legislative support to Congress on
acquisition policy and industrial-based issues including as a
specialist at the congressional Research Service and a senior
analyst at GAO.
Second, Ms. MacKenzie Eaglen is a senior fellow at the
American Enterprise Institute where she works on defense
strategy, defense budgets, and military readiness. She is also
one of the 12-member U.S. Army War College Board of Visitors
which offers advice about academic program objectives and
effectiveness, and serves on the U.S. Army Science Board, an
advisory body that provides guidance on such scientific and
other matters to the army senior leadership.
Next, we have Mr. Bryan Clark, senior fellow and Director
for the Center of Defense Concepts and Technology at the Hudson
Institute. He is an expert in naval operations, electronic
warfare, autonomous systems, military competitions, and war
gaming. He is a former Navy officer who had served as a special
assistant to the Chief of Naval Operations.
And finally, Mr. Dylan Hedtler-Gaudette is the Director of
Government Affairs at the Project on Governmental Oversight. He
has experience in a wide range of issues to include Pentagon
accountability and Federal spending issues.
Thank you for participating in today's hearing. Pursuant to
Committee rule 9(g), the witnesses will please stand and raise
your right hands. Do you solemnly swear or affirm that the
testimony you are about to give is the truth, the whole truth
and nothing but the truth, so help you God? Let the record show
that the witnesses answered in the affirmative. We got all four
today. Thank you. You may take a seat.
We appreciate you being here today and look forward to your
testimony. Let me remind the witnesses we have already read
your statements. They will appear in full in the hearing
record. For time purposes, see if you can limit your oral
statement to 5 minutes. As a reminder, please press the button
on the microphone in front of you so that when it is on we can
all hear you. When you begin to speak, the light in front of
you will turn green. After 4 minutes, the light will turn
yellow. When the red light comes on, your 5 minutes have
expired, and we ask you to wrap up as quickly as possible.
Now, we are going to lead off with Mr. Schwartz for his
opening statement.
STATEMENT OF MOSHE SCHWARTZ
SENIOR FELLOW OF ACQUISITION POLICY
NATIONAL DEFENSE INDUSTRIAL ASSOCIATION
Mr. Schwartz. Thank you. Chairman Grothman, Ranking Member
Garcia, members of the Subcommittee, thank you for inviting me
to testify today. The views I express are my own and not
necessarily those of NDIA.
Our defense acquisition system takes too long to deliver
capability, costs more than it should, and often does not
access or fails to adopt the most cutting-edge capabilities
industry has to offer. In addition, our defense industrial base
is shrinking. This is a problem.
In this testimony, I would like to make five points: First,
workforce is the key to successful acquisition. Better
acquisition cannot be achieved through multiple audits, more
regulation, or legislative fiat. Rather, giving the few capable
people the authority to do their job, putting them in positions
to succeed, holding them accountable and minimizing red tape,
that is the recipe for better acquisition. But that is not what
we do. Instead, we measure people on compliance and process.
In 2021, GAO reported that agencies, including DoD, relied,
and I quote, primarily on process-oriented metrics when
managing their procurement organizations. In other words,
compliance and process were more important than performance. If
we empower the workforce and focus on outcomes, we can then
hold people accountable. As one program executive officer said
to me when expressing frustration over multiple layers of
approval processes, I was hired to make decisions. If you do
not like my decisions, fire me, but let me do my job.
That brings me to the second point. We need to streamline
the acquisition rules and regulations. There are just too many
and they are too complicated. Done right, streamlining will
increase accountability by clarifying lines of authority,
shortening timelines, and improving outcomes without
undermining oversight. This is not about getting rid of
regulations wholesale.
The approach industry takes is this. Fewer regulations more
consistently applied by an empowered workforce. More
consistently applied and enforcing regulations is key to this
approach. We should encourage using commercial buying
processes. We should review thresholds to ensure that the cost
and delay of imposing requirements on relatively lower dollar
acquisitions do not outweigh potential savings. We should take
a holistic approach to measuring procurement. And we should
streamline the approval processes.
For example, the Office of the National Cyber Director
recently reported that current regulations on cybersecurity
outcomes are increasing costs through administrative burdens.
Many companies reported that complying with the regulations
threw resources away from actual cybersecurity efforts. A
similar situation exists in supply chains where a variety of
statutes are inconsistent and overly complicated resulting in
increased costs, delayed delivery, and confusion as to who, in
fact, is making decisions.
This brings me to the third point. DoD needs to modernize
its IT systems and improve its use of data. Data analytics can
improve all aspects of procurement. But DoD's IT and business
systems are hampering its ability to leverage data. First, DoD
is using too many outdated systems. A recent DoD inspector
general report found that DoD plans to spend more than $725
million in the next 4 years on systems that the controller's
office itself said can and should be retired. And that is only
financial systems.
Second, DoD faces cultural and bureaucratic challenges in
adopting modern IT systems as exhibited in a stalled effort to
replace the defense travel system with modern improving
commercial IT solution. DoD is working to improve its data
architecture. Earlier this year, DLA awarded a contract to
adopt commercial supply chain and business network capabilities
to help identify contractors and drive efficiency. Such efforts
can dramatically improve acquisition.
This brings me to my fourth point. Sometimes our focus on
driving down procurement costs and adding excessive regulation
has a negative long-term effect. 70 percent of the life-cycle
cost of weapon systems is operation and maintenance, yet we are
not investing sufficiently in these areas. This is
significantly hurting readiness and increasing costs. It is
cheaper to maintain systems that we already have than to buy
more systems to make up for readiness gaps caused by
maintenance failures.
And finally, my last point, we can be smarter in helping
small businesses. DoD consistently meets its small business
goals, but the number of small businesses working with DoD is
declining. The targets and set asides are often an end, in and
of themselves, rather than a catalyst for expanding small
business participation or identifying critical capabilities.
DoD and Congress can take other approaches to expand small
business participation. One example, small businesses generally
do not have the resources to build or maintain secure
compartment information facilities, or SCIFs, creating a
barrier to entry. Allowing access to underutilized SCIF spaces
or establishing new SCIFs in excess GSA facilities could help
small and other businesses increase competition and provide new
capabilities to the Department.
Thank you for the opportunity to share these thoughts and I
look forward to questions.
Mr. Grothman. OK. We will move on to Ms. Eaglen for her
opening statement.
STATEMENT OF MACKENZIE EAGLEN
SENIOR FELLOW
AMERICAN ENTERPRISE INSTITUTE
Ms. Eaglen. Thank you, Chairman Grothman and Ranking Member
Garcia. It is not only a pleasure to be before you today, but
this Subcommittee was the source of my first job on Capitol
Hill, not--well, we will not talk about how long ago, but it
was as a Pentagon fellow under the stewardship of Christopher
Shays of Connecticut. It was a terrific experience, and I thank
you for the opportunity to be here today.
Despite a fundamental shift in roles where the Pentagon is
no longer the inventor driving government research and
development, it must now innovate largely with existing product
on the commercial market. The Pentagon has continued using a
system ill designed for the digital and information age. This
has led to many of the concerns that you have and that you have
both raised in your opening remarks.
It is also a process that has workarounds on the edges, but
is still in use for major systems at a time the military faces
peer competitors who do not have these same handcuffs of
purchasing and an acquisition system that is of the Soviet
style of management and increasingly falling behind our one
pacing threat competitor in China.
What used to take the government 5 years to buy now takes
25 years from senior leader idea to product execution at full
rate production. From characterizations of effort ranging from,
quote, ``unbelievably slow'' to, quote, ``too late.'' The
Pentagon cannot seem to break out of neutral and stop playing
catch-up, even as military balance is shifting away from
America, particularly in the Indo-Pacific.
While Congress has been generous granting middle tier and
other transactional authorities to help the Pentagon go faster
and these efforts are yielding fruit, the incentives in the
larger traditional Pentagon acquisition system and approach are
skewed or flawed. There are many stakeholders in this
traditional system, however, which is why it does not wither on
the vine. The risk aversion, the emphasis on compliance and
value and low cost over speed and relevance are all built in,
and they create a barrier wall of compliance designed to keep
others out, particularly startups and small businesses.
The nonprofit Silicon Valley Defense Group recently found
that of the top 100 national security startups of 2024, they
collectively earned just $6 billion in awards from the Defense
Department and the majority of this went to a single company,
Spacex. But stealth, GPS, precision-guided munitions, and
MWraps were all taken outside the traditional system for
purchasing with different budgeting, different requirements
process, and different processes in general to succeed in going
faster at the speed of relevance.
Even if Congress and the Pentagon used all available
authorities to a maximum extent, more flexible funds are needed
from appropriators and--which allows for speed and a new
premium by contracting officers to go faster. It would also
help if we had a shorter and less bureaucratic requirements
generation process, a risk-taking culture in the defense
workforce where failure is not punished, and program managers
are willing to work with different and new companies.
The entire Department of Defense needs to be at an
operation warp speed tempo where urgency and humility are the
watch words, and the Armed Forces reward speed and fielded
capability over compliance or perfection. One officer has
stated entire swaths of the Defense Department are going
through the motions, a preference for process over time and
urgency. Under a warp speed-like posture, the Pentagon should
cut development and production times to enable immediate
implementation of available technology into the systems the
military possesses today, while gathering data from that
implementation to strengthen the new technology still in
design.
Accepting a unilateral drawdown of train manpower capacity
and posture throughout the next decade would hurt the Armed
Forces and our ability to maintain a balance of power across
three theaters of the world. The Pentagon has, for 3 decades,
delayed modernization critical to the sustainment of credible
U.S. conventional combat power. Backs against the wall now, we
must not cede American military supremacy to a dusty death, but
rather, revise the pace of productivity by accepting that the
Armed Forces cannot survive on buying time to gain capability
but rather buy capability to gain time. Thank you.
Mr. Grothman. Thank you. Bryan Clark. By the way, that was
great testimony.
STATEMENT OF BRYAN CLARK
SENIOR FELLOW
HUDSON INSTITUTE
Mr. Clark. Chairman Grothman and Ranking Member Garcia, and
members of the Committee, thank you very much for allowing us
to participate in today's hearing, and to testify about the
impact of overspending on defense capabilities and the
implications for our long-term readiness. I am going to focus
my remarks on one area in particular, that is the original sin
of a lot of the programs you identified, so Littoral combat
ship, F-35, Ford class carrier. All the problems that they
have, in many ways, derive from the overly ambitious
requirements that were established for them at their origin.
This continues today in new programs like the Armies, of
Reconnaissance Aircraft program, and some additional programs
that are being pursued by the Department like the Navy's next
generation destroyer, next generation submarine. These overly
ambitious requirements set up a situation where the schedule
that is available to program managers and the amount of money
available to them is just insufficient to be able to deliver
the program on time with the performance characteristics that
are demanded by the requirements process.
In many ways, that is because our requirements process
evolved out of a cold war model where the U.S. military was
superior and simply had to build its next generation of
capabilities to stay ahead of competitors. Today, we have a lot
of peer competitors out there and arguably technically
empowered countries and organizations such as the Houthis are
stressing U.S. forces because they are taking advantage of
commercially available systems that are now empowered with
commercial technology from communications to sensing to drones.
So, the fact that the technological playing field has been
leveled means that the U.S. can no longer have the luxury of
this long-term development process where we build overly
ambitious requirements and then eventually develop the
capability to meet those decades in the future. We have to go
faster, as MacKenzie highlighted. We also have to do so in a
way that is affordable, and we cannot continue to just spend
more money on a capability that does not deliver.
The biggest impact we see also is operations and support
costs, because these overly ambitious requirements will tend to
demand higher expenditures for maintenance, higher expenditures
for operations, and for crewing. Those things are now
constraining the force design of all the U.S. military
services. We no longer can build a bigger military not because
we cannot afford it, but we cannot crew it and we cannot afford
to maintain it down the road. The overly ambitious requirements
we started with are generally the driver of those things.
So, we need to think about maybe a new approach. Instead of
establishing requirements in isolation based on analysis of
what projected future needs of desires of the leadership might
be, we instead need to look at what is needed in the near term
to address today's problems or the problems of the next few
years and identify how we can evolve today's capabilities to
address those needs.
In program management, we often talk about the iron
triangle of defense where a program manager is balancing cost
of a program, the schedule of a program, and the performance of
a program against one another.
With requirements established in advance and fixed by the
requirements process, program managers are really only left to
be able to adjust schedule because the cost available to the
program is set by DoD budgets. That means programs are delayed,
increasing the cost down the road, and increasing the
expenditure down decades into the future.
A new iron triangle would instead allow program managers to
vary the performance of a system based on operational concepts
developed with operators, and also, to adjust the cost of the
program based on the amount of money available in the budget.
So, giving the ability of program managers to adjust all three
variables in the iron triangle would allow them to be able to
deliver capability faster and more relevant capability for
today, rather than relevant capability for the future.
This new approach is embodied in some of the DoD's reforms,
such as the middle tier of acquisition and some of the more
developmental experiments that are going on in different parts
of the Department. The problem is these experimental efforts to
change the approach to acquisition are a side project and they
are not part of the main body of acquisition. We need to take
these side projects, like middle tier of acquisition, like
rapid capabilities offices, and make those the main line of
acquisition, and instead of focusing on performance at all
costs, instead of look--look instead at achieving relevant
capability with a relevant capacity by varying the operational
concepts and tactics that operators use. That is how commercial
businesses pursue new capability development and that is how
the DoD should be doing it as well.
Thank you for your time and I am looking forward to your
questions.
Mr. Grothman. Thank you very much.
Dylan Hedtler-Gaudette.
STATEMENT OF DYLAN HEDTLER-GAUDETTE
DIRECTOR OF GOVERNMENT AFFAIRS
PROJECT ON GOVERNMENT OVERSIGHT
Mr. Hedtler-Gaudette. Thank you, Chairman Grothman, Ranking
Member Garcia, and members of the Subcommittee. My name is
Dylan Hedtler-Gaudette and I am the Director of Government
Affairs at the Project on Government Oversight, or POGO. I
appreciate the opportunity to be here and speak with you today
about the perennial issue of wasteful spending and inefficiency
at the Department of Defense.
One brief bit of history here as I begin my statement. Back
in 1981, when my organization was founded, we went by a
different name. We were the Project on Military Procurement. We
were also the ones who exposed the now infamous examples of
scandalous spending at the Pentagon, including $436 hammers,
$600 toilet sets, and $7,600 coffee makers. Needless to say, we
go way back on this issue.
But even more importantly than representing POGO here
today, one thing I want to be sure to do is bring the
perspective of the American taxpayer to this table. You will
hear a lot today about how acquisition and procurement rules at
the Department of Defense are creating pain points that is
making it more difficult for the military to obtain what it
needs in a timely manner.
You will also likely hear that the exclusive reason for
these problems is bureaucratic bloat and process creep at the
Department itself. To an extent, there is validity to these
arguments. The Pentagon is large, it is Byzantine, it is
labyrinthian, there are many different fiefdoms and many
different organs at the Pentagon, sometimes working at cross
purposes, which has a tendency to create stovepipes and red
tape.
With that said, it is also important to remember that there
are two other stakeholders who bear a significant amount of
responsibility for creating the problem and thus bear some
responsibility for solving it: Congress and the defense
industry itself. Congress had the power of the purse, which
means that it gets to make decisions about how much is spent
and where that money goes in terms of the defense budget.
Congress also has, obviously, the power to pass laws and
pass policy related to defense. Most importantly, though,
Congress has the power and the obligation to conduct real-time
rigorous oversight to monitor and to analyze the implementation
and execution of those funding and policy decisions. As a quick
side note, this hearing is exactly an example of that kind of
oversight.
On the other side of the coin, you have the defense
industry. An extraordinarily large, extraordinarily powerful,
extraordinarily influential special interest group who has made
it its mission to whittle away and water down oversight
accountability and transparency mechanisms in acquisition and
procurement processes and policies. What this has led to is the
military and the American taxpayer being ripped off to the tune
of billions of dollars over the years.
One brief bit of context here. Last year we spent over
$6 trillion in total on the Federal budget. We only took in
about $4.5 trillion in Federal revenues. That is a deficit of
about $1.5 trillion. We are rapidly approaching an annual
Pentagon budget of $1 trillion. All of this is set against the
backdrop of over $35 trillion in national debt. To say that
this fiscal and budgetary situation is unsustainable would be
an understatement.
Let us also take a quick trip down memory lane. As recently
as Fiscal Year 2000, we were spending a little bit south of
$300 billion on the defense budget. In this current Fiscal Year
cycle, we are going to be spending a little bit south of $900
billion. We are talking roughly a 300 percent increase. I do
not think that we can say with any degree of confidence that we
are 300 percent safer today than we were 25 years ago. I do not
think that we can say with any degree of confidence that our
military servicemembers and their families are 300 percent
better equipped, or 300 percent better cared for than they were
25 years ago.
You will likely hear that the solution to all of these
problems is so-called acquisition reform. Please remember that
it was acquisition reform in the 1990's and continuing through
today that has systematically weakened and undermined pre-
existing oversight accountability and transparency rules such
as those found in the Truth in Negotiations Act, TINA.
We also have an entire area of acquisition and procurement
for commercial items and commercial products that has become a
rich and fertile soil for contractor malfeasance, price
gouging, and general shady business. All of this has happened
under the auspices of acquisition reform.
We think it is time for Congress to step in, and more
assertively, play its role as the maker of policy and
appropriator of funds while taking seriously its oversight
responsibilities, particularly when it comes to major
acquisitions, programs, and platforms.
One thing Congress can do to help is also make much-needed
reform to the Pentagon budgeting process. The unfunded priority
list, for example, does not make any sense and leads to ever-
increasing Pentagon budgets and more bloat and more waste.
It is also high time to require the DoD to pass a financial
audit and to create meaningful penalties if they do not. After
all, bad budget process leads to bad budget outcomes.
My takeaway here is clear for you. We can achieve a strong
and effective military with more agile and more innovative
acquisition and procurement without sacrificing the country's
financial and budgetary future and without ripping off the
American taxpayer. We will only achieve this, however, if the
Department and Congress work hand in hand. We could call it a
grand bargain of sorts to streamline processes, cut red tape,
while also restoring, maintaining, and reinvigorating oversight
accountability and transparency.
Thank you for inviting me to testify today and I look
forward to answering your questions.
Mr. Grothman. Thank you.
OK. I will lead things off for Ms. Eaglen. What is the most
critical modernization needs facing the U.S. military, and how
far behind are we?
Ms. Eaglen. I would argue that U.S. conventional deterrent
is at a nadir at the same time we are trying to modernize our
nuclear deterrent. And so, this is what I call the terrible
20's. So, you have a modernization crunch across our
conventional and strategic forces where the bills are all
coming due roughly this decade, because most of what was bought
in the 80's, it is aging out at about the same time.
So, if I had to prioritize, I would say the Pentagon is
prioritizing the nuclear deterrent, and some things in the
conventional forces portfolio are being sacrificed for that,
and I would argue that that is not wise if our peer competitors
and pacing threat, for example, in China see that we are weak
in one area. Of course, that is the area they will seek to
exploit and make more vulnerable what is already.
I would prioritize within the conventional forces portfolio
a couple of different capabilities. First, of course, is under
sea. Ranging from manned and unmanned capability, but
particularly attack submarines as a top priority. I would focus
on the need for competition within--maintaining competition for
future fighter development, such as the NGAD program. To do
that, Congress would need to agree to continue F-15 procurement
after this year when it is slated to end.
Having one fighter production house in the United States is
not healthy for the kind of competition you and Ranking Member
Garcia outlined in your opening statements, but the Pentagon
has to pay for that up front. It does not come without a cost,
and historically, Congress has shown they do not want to do
that.
Last is the size of the U.S. Army. The Active-Duty force--I
do not believe Congress would have ever actually voted on the
Army shrinking by nearly 100,000 Active-Duty soldiers in the
last 5 years, which is essentially what has happened because of
the recruiting challenges facing the U.S. Army. This standing
force is considered one of our bulwarks against aggression
around the world, and we need a large and capable army.
Mr. Grothman. That was so good, we will go with you again.
The GAO study from May of last year found that since May 2018,
one F-35 prime contractor lost over 1 million spare parts
totaling $85 million, of which less than 2 percent had been
reviewed by the F-35 joint program office. What do you believe
can be done to increase accountability in this program? To what
degree is it just an attitude problem or an arrogance problem
in the Department of Defense?
Ms. Eaglen. There is a culture problem at the Defense
Department, but I would start, though, even sort of to the left
of that and strongly encourage Congress to never again approve
a program that starts with a J, joint. That--they become super-
sized, oversized, and totally unmanageable programs. It is
basically three totally separate fighter jets under one
umbrella, and it has led to many of the predictable and
knowable problems that we have with this program today.
So, avoiding joint programs at all costs is one way to get
at better oversight, more targeted accountability for these
contractors. Something of the size and scope and magnitude of
this program, it was, again, knowable. Holding contractors
accountable as well comes from more direct and active
management from the program managers and offices themselves.
The Pentagon does need more resources, and I want to echo
one of the points on data analytics. The Department's business
systems are woefully--we are talking the days of the floppy
disk over there and fax machines still required for a lot of
companies to even still submit contracts to the award--excuse
me, contract bids to the Department.
So, updating business systems would certainly help with
tracking some of this, and the audit, of course, where you
identify ahead of time improper payments, and to the Ranking
Member's opening statement, the types of problems that you
outlined, sir.
Mr. Grothman. OK. Same GAO report found the Department of
Defense has over 19,000 spare parts in the global spares pool
that have been waiting between a few months--in the global
spares pool that have been waiting between a few months to 5
years for disposition, instruction from the F-35 joint program
office. Can you explain how the F-35 joint program office would
event get to the point of having 19,000 spares laying around?
That is for you.
Ms. Eaglen. Oh, Mr. Clark. I am sorry, Mr. Clark.
Mr. Clark. Yes. So, I think part of the--clearly, data
analytics and IT systems that are managing these are a problem.
The bigger problem is the role of the prime contractor and
managing spare parts inventories. Right now, the contractor
blockade is having to both use parts to be able to field new
airplanes and field parts to be able to support existing
airplanes that are out in the fleet. And because of that
divergence of responsibilities, I think that is part of where
you get this confusion about where parts are, because some are
going to the factory, some are going to the field.
Mr. Grothman. Thank you. I think I am over my time. I
expect to return later. We will go with the Ranking Member, Mr.
Garcia.
Mr. Garcia. Thank you.
Mr. Hedtler-Gaudette, I know you have written and talked
about extensively the conflicts of interest that can happen
when Members of Congress hold and trade defense contractor
stocks. I think this is a very important point, and actually
personally I have co-sponsored numerous bills before Congress
that look at banning individual stocks within the performance
of Congress. I strongly believe in that. But can you talk a
little bit more about how these conflicts of interest can
weaken our oversight into some of the Department's more
troubled programs.
Mr. Hedtler-Gaudette. Sure. Thank you. And I agree that
Members of Congress as well as other officials in the
government, including officials at the Department of Defense,
holding direct financial stakes in defense companies is
problematic at best. I mean, at the very least, it creates the
appearance of potential corruption and the appearance of
impropriety, even if there is no actual or real corruption or
impropriety. It just looks really bad and feeds into an already
pretty large and metastasizing feeling of lack of trust on the
part of the public, and we do not want to make that any worse
than it already is.
But to be more precise in answering your question, I think
it is just a truism that if your financial bottom line is
tethered or tied to the performance of an individual company
or, you know, an industry more broadly, there is a natural
human inclination toward wanting to do what you can to increase
your own financial standing.
If you happen to be in a position of extraordinary power,
there are 535 people in the U.S. Congress who have that
extraordinary power and they have access to information and
insight that we, as the rest of the public do not have. You can
see why there is a huge conflict of interest there.
Again, I just want to stress even if we do not have a
smoking-gun causal link between one Member of Congress as a
vote and their financial portfolio or one Member of Congress's
announcement of an investigation or oversight activity and
their financial portfolio, you know, we can see how it looks
really bad and it creates bad optics, and so anything we can do
to mitigate conflicts of interest, real or perceived, is going
to be a good thing overall. It is not just Congress as I
mentioned. There are folks at the Department of Defense who are
invested in the defense industry despite having real power to
make real decisions that would impact the defense industry,
impact individual companies, and also impact their own
financial portfolios.
Mr. Garcia. Thank you. I also want to just return briefly
to the contractor price gouging issue. We know there are two
problems here. First, as we rely on the single-source suppliers
and also that we also have a system where larger companies can
come in and buy in small suppliers and of course raise prices
while bidding regulations and safeguards. We know that this is
a core problem, and we all want to make it easier to do
business with DoD, especially for small businesses.
Now, I know, oftentimes, we talk about cutting the red
tape, but sometimes red tape is actually oversight. I know this
to be true just through my work as mayor of my former city. We
had a fairly good-sized city, $2 billion budget, over 6,000
employees. Oftentimes, when folks would cut the red tape, we
would come back with, well, we would like to as well, but we
also want to make sure that we are not wastefully spending
resources within our city departments.
Again, can you talk, Mr. Hedtler-Gaudette, about how we can
make sure that our regulations on contractors are most
effective?
Mr. Hedtler-Gaudette. Sure. There is an old expression that
I believe it goes an ounce of prevention is worth a pound of
cure, and I think we need to operationalize that principle here
when it comes to contracting. The more we can do to, up front,
provide Department of Defense officials, specifically
contracting and procurement offices, with the really pertinent
and relevant information they need, specifically around cost
and price, you know, the more upfront upstream mechanisms we
can have to make sure that contracts are fair and reasonable,
the prices and terms therein are fair and reasonable, and that
the American taxpayer is receiving a good deal. The more we can
do on the front end, the better, because it is very hard to fix
these problems in a post-hoc sort of retroactive way. So, that
is why those up-front mechanisms are so important, and they are
just basic due diligence.
So, I referenced in my opening statement the Truth in
Negotiations Act, or TINA. Now, TINA, would not say it is the
only mechanism, but it is one of the primary mechanisms we have
for ensuring that cost and price information is provided what
it should be provided at the outset of contract negotiations.
But because of the sort of changing thresholds, changing
thresholds and standards that apply in TINA when someone has to
provide that cost and price information, you know, we have seen
the law get watered down, and it has not been as effective as
it could be over the years.
One thing we would certainly advocate and propose as a
restoration of reporting thresholds under TINA and perhaps even
a strengthening and tightening of those up front, that way we
are ensuring integrity at the front end of the process as
opposed to trying to recoup money at the back end of the
process if we run into malfeasance or price gouging.
Mr. Garcia. Thank you. I just want to just conclude just
by--I appreciate that. I just want to conclude by saying that
we also have a lot of work to do on national security,
particularly intelligence estimates right now in the war in
Ukraine, Russia is producing almost three times more munitions
than the U.S. and Europe, and we know they can do it at a lower
cost, so this conversation is a serious conversation about
national security, security of the Ukrainian allies, and I hope
we can continue looking at this very serious issue. Thank you,
Mr. Chairman.
Mr. Grothman. Thank you very much.
Ms. Foxx.
Ms. Foxx. Thank you, Mr. Chairman, and thanks to our
witnesses. I appreciate, Chairman Grothman, your holding this
hearing. I have worked to address inefficiencies in defense
acquisitions and sustainment, and I understand how pervasive
waste is within the Department of Defense, and how big this
problem is, so thank you for your attention to this issue.
Mr. Schwartz, in your testimony, you emphasized the need to
decrease barriers for small businesses to participate in the
defense market. I agree with that position and I am very
concerned that the Department has grown so reliant on a
shrinking number of commercial firms which stifles competition
and leads to increased costs. What would you say is the biggest
reason for the decrease in small businesses contracting with
the DoD?
Mr. Schwartz. Thank you for that question. In the polls
that I have seen and the surveys that I have seen, the
industrial base generally is saying it is the rules and
regulations. In my testimony, I said fewer regulations, but I
agree with my colleague from POGO, more consistently enforced.
It is not about just getting rid of regulations, but we have a
problem, the defense industrial base, from Fiscal Year 2010 to
Fiscal Year 2020, the small businesses decreased by 43 percent.
That is not my data. That is the government's data.
It is not just small businesses. Other businesses, every
other business fell annually by 7.3 percent. That is an even
higher percentage. Now, you can say that was only until 2020.
It has happened every year since then. Last year, entire
government contracting dropped by 2 percent, companies working
with the government. So, it is the regulations, it is the
bureaucracy. And it is not regulations just for regulations
sake.
When I was at the 809 panel, we found regulations that
required vending machines to accept dollar coins. We found
regulations that required printers to print on two sides. We
found contract clauses that required seat belts to be put in
the contract, to wear seat belts while driving on base even
though every state had that law already. It is that volume of
work and that churn of regulation that small businesses cannot
keep up with and know what the rules are.
It is the cybersecurity regulations, and I am not saying we
do not need cybersecurity regulations, but when ONCD, the
Office of National Cyber, says that our regulations are causing
companies to shift money to compliance from actual cyber
defense, that is a problem, and I think that is a lot of the
driving force.
Ms. Foxx. We have too many bureaucrats in the Department
writing picayune rules. So, what steps can we take
legislatively to increase small businesses' participation in
defense contracting?
Mr. Schwartz. I may make a couple of suggestions, and there
are a number of them, and I would love to have this
conversation at length, but one is what I mentioned in
testimony, SCIFs, security compartmentalized facilities. Small
businesses do not necessarily have the resources to create
their own SCIFs, so outside of the Washington area, to the
extent that there could be like a WeWorks model for SCIFs, that
could be very helpful to allow companies to view, bid on, and
then actually execute work that might be classified is one.
Another one is I think the point you were making; I hope I
understood that, is simplify the regulations so small
businesses can simply understand what is required of us and not
have to spend a lot of money on lawyers or other people to
explain to them what is required, what is not, and not have to
change their IT systems all the time. Things like that.
Ms. Foxx. Well, I appreciate the fact that you are giving
us some of the barriers that face small businesses in competing
for sustainment contracts. I would like to follow up with you
on getting more information on what those barriers are and
making sure that we look at that in terms of anything we can do
legislatively.
I have a constituent that maintains that DoD should
leverage FAA certificates and commercial best practices to
increase the number and types of businesses that can compete
for contracts and lower sustainment costs for certain aircraft.
That makes a lot of sense. And I think we need to look at more
ideas like that to increase small business participation and
achieve the best outcomes for our servicemembers and the
taxpayers.
We need more people competing for these contracts and doing
the work, and my experience as a former small business owner is
that often, the small business owner will be better at doing
this than the larger company, although I think the prejudice
among DoD is to go to the larger companies, and we need to look
at that and make sure that the way contracts are written, the
way people are assessing companies is fair to all concerned.
Thank you, Mr. Chairman. I yield back.
Mr. Grothman. Thank you much. As far as the future, we are
going to go to Mr. Lynch, we are going to go to Mr. Perry, and
then we are going to go across the street for a field trip.
Mr. Lynch. Thank you, Mr. Chairman.
I want to thank the witnesses for your willingness to help
the Committee with this work. Just a little background, I come
out of the construction industry, so contract administration is
something that I am familiar with. That is my educational
background. My degree is in--bachelor's degree is in
construction management. I am a former president of the iron
workers union in Boston, so administering those contracts is--
was a daily task for me.
I have to say, though, the Department of Defense, their
contracting process is so complex, so labyrinthine, and so
opaque, and that is not just overseas and in construction, but
also within our national labs. The process by which a certain
contractor gets--you know, wins a bid is absolutely smoke and
mirrors in our country. There is no competition. We have a
regular rotation of people coming out of the military going to
work for the national labs or these big contracting outfits,
and then, because of relationships and friendships, that takes
over. Those relationships take over. We never have truly open
competitive bidding within the Department of Defense.
So, I came on this Committee back on September 11, 2001,
the day of the attacks. I was elected in Massachusetts in a
special election. And I ended up doing over 50 trips to Iraq
and Afghanistan just because we were--we were hemorrhaging
money, and there was no accountability.
So, when I came back here after having seen what was going
on over there, Mr. Hedtler-Gaudette, I offered a bill called
the Commission on Wartime Contracting, and that is not an
original idea. Truman actually came up with it during the
Second World War. He saw the amount of money that the country
was spending on defense projects and the amount of waste fraud
and abuse that was going on. So, my bill basically mirrors what
he was doing and also what we were doing in this Committee with
respect to the special inspector general on Iraq and
Afghanistan reconstruction.
So, I am very, very proud that POGO endorsed my
legislation. We need to have someone monitoring this onsite,
you know, at the National Labs who is what I would describe as
a taxpayer representative. Someone who actually is there to
watch out for the best interest of a taxpayer, because as my
colleagues have pointed out, we are just puking money here to
the Pentagon, and there is no accountability and no serious
effort at unwinding this labyrinthine process where, you know,
our taxpayers are being robbed of, you know, precious resources
at the same time that the goal and the mission of our
Department of Defense is not being met. We are falling further
behind.
So, Mr. Chairman, I have filed that bill again. It
addresses some of the issues that you have validly raised not
just in this hearing, but previously, and I am just hoping that
at some point, we might get together here on this Committee and
actually, put out some legislation that actually addresses what
is going on here.
We just had a major, major IT failure because of
CrowdStrike, and, you know, it is sort of a single-source
repository for cybersecurity, and yet--and this was global
because of its connection to the Microsoft system, but--so the
Europeans are experiencing the same discomfort we are. We have
had massive failures that have affected not only the day-to-day
activity of the American people with failures of, you know,
thousands and thousands of flights canceled, but also, we have
got some serious concerns about the readiness of our national
security.
So, I want to thank the witnesses. You have all been very
good with providing different perspectives to us. But I would
like to insist that we actually take up some legislation and
try to get some stuff passed rather than have these periodic
hearings that are very well-intentioned and informative, but we
got--the time for action has long since passed, and I just
think we've got to come together on this.
Thank you, Mr. Chairman. I yield back.
Mr. Grothman. Very good. Now we are going to go to Mr.
Perry, and when he is done, we will break up for a second and
we will reconvene 15 minutes after the final vote is closed.
Mr. Perry.
Mr. Perry. Thank you, Mr. Chairman.
Ladies and gentlemen, thanks for being here. I am not sure
who to address these questions to, but I am going to just pick
on one particular program that seems egregious to me, and that
is the F-35. I have got this GAO report here. And if you are
familiar with things like operational readiness rates or
mission capable or fully mission capable, then you are going to
know what I am talking about and I think we can probably get
through this.
I am looking at three variants, the 35 Alpha, Bravo, and
Charlie, and I am looking at mission-capable rates by variant,
so you know the different services, branches use different
variants. The high-water mark for the 35 Alpha, this is mission
capable, so that 70 percent in 2020. Looks like 2023 we are
about 50--a little over 50 percent. 67 percent high water mark
for the Bravo, and at about 60 percent in 2023 for the Charlie
model. We have gone from 56 mission-capable percent to about 62
percent in 2023.
Then we get to fully mission capable, fully mission
capable. I am going to use some kind of just anecdotes to
explain to my colleagues what that might mean, but for the
Alpha model, we are down right now in 23 to 36 percent. We are
at a midpoint now for the Bravo variant at 14.9 percent, so 15
percent, and we're up on the Charlie model from about 7 percent
in 2019 to a whopping 19.2 percent. What that means fully
mission capable, we used to go to the range. You had one
aircraft that would fire rockets. You had another aircraft
where the mini gun would work. And so, you had to qualify in
rockets and you had to qualify in mini guns, so you would fly
that one to shoot this weapon system, fly this one to shoot
that weapon system. Maybe your transponder works in this one,
but it does not work in that one. There is something that does
not work that means the aircraft is not fully mission cable,
and we are looking at all these variants the best of which
right now is at 36 percent.
Now, this aircraft has been around, the program has been
around for about 20 years. First flight took place in 2006. We
are talking about a $2 trillion cost to own and maintain these
aircraft, which is way above budget. And it appears to me the
answer from the commands and the contractor is to just fly
less, and then they can meet their requirement. We are going to
fly less and, you know, God bless these contractors that make
these awesome weapon systems. It is awesome they work, but it
is not awesome when they do not. When you are e facing the
enemy and you need to go to missiles, but you have only got
guns, that is not helpful at that moment.
The focus needs to be on the warfighter, right? And what
they need. And as a guy who spent a lot of time in the seat,
there is one thing and one thing alone that makes proficient
aviators, especially under duress, and that is, time in the
seat. And so, reducing time in the seat so that the aircraft
can meet cost projections that can--I do not know how to say
this, but imperils, the very people that the aircraft was built
for, like it imperils the mission. It defies what the hell we
are doing here.
And so, my question for you in the macro sense is, is it--
look, no one wants to say this. This is like saying Voldemort,
right? But is this aircraft like--are we beyond the point of
just throwing bad money after more bad money or good money, and
at what point do we say we have made a mistake here, it is time
to move on? Like our aviators, these pilots, they are going to
be nonproficient because the aircraft are not capable of doing
the job, or they are going to be nonproficient because they are
not flying them, because we have got to meet cost estimates.
What the hell is the answer here?
Mr. Clark. So, Congressman, you are absolutely right. Those
mission-capable rates are about half of what they should be.
And if you look at other aircraft, older aircraft, they are
comparably employed. They would have much high mission capable
rates. It is a much more complex airplane than I think anybody
expected it to be, and the requirements they established for it
set it up to fail in this way, because it is just so complex,
it is so sophisticated, it has got so many potential failure
modes that it creates a situation where when it gets out to the
field, it is expensive to operate and maintain. And then beyond
that, it has a lot more opportunities not to work. So, we have
set it up for failure in this way.
The F-35 was supposed to be the bulk of the fleet. It was
supposed to be the thousands of the F-16 and for the--basically
your daily driver. It is no longer that way. We now have to
treat it like a special aircraft that we employ for certain
situations where we need stealth or censor fusion or the
capabilities it offers, and rather than to buy other aircraft
to be the things that fly around the flagpole and do the
general operations, the air superiority that we need, F-15EX,
the Navy was buying more F-18s for a while, we may find
ourselves buying more F-16s, that is what happens is we end up
at this high low force or expensive less expensive force in the
aviation community just to fill out the air wings. But that is
a situation that we set up by asking for this airplane to do
too much in too short of time with technology that was not
ready to measure up to the missions.
Mr. Perry. I know I am way over time here, and we have got
to go vote, but you have kind of described the problem maybe
better than I have, or whatever. But what is the answer? Like,
what is the--do we keep investing in this thing, or do we just
say, Look, we can only afford one Ferrari in the garage for the
days we want to go fast, but on the other days when we have got
to go to the grocery store and pack up the station wagon, we
have got to buy these--what is the answer?
Mr. Clark. We will have to probably buy fewer of them going
forward and buy other aircraft and begin to fill out the air
wings and get those cheaper flight hours.
Moshe?
Mr. Schwartz. If I can just add, I just want to mention one
thing that my colleague said, which is it is set up for
failure. I think too often the Department of Defense we are
setting them up for failure, and it is a lot of people. So, in
this case F-35 was the requirements. Too often the requirements
are setting up for failure.
For the CVN 78 with the Gerald Ford class, the cost was
setting it up for failure. The cost estimate of the Navy was
below 50 percent. You are going to have cost estimate not
because someone is doing something wrong, but because your
estimate is unrealistic. And I think to take a step back from
this program, one thing to consider and one answer is let us
re-examine how we are costing, how we are budgeting, how we are
looking at requirements so we start right, because once you
start wrong, you have already baked in problems.
Ms. Eaglen. Just quickly, we should avoid programs that are
too big to fail at all costs. This was overly ambitious. It
should have been three separate programs for the three separate
aircraft.
Mr. Perry. I yield.
Mr. Grothman. Thank you. Pursuant to the previous order,
the Chair declares the Committee in recess subject to the call
of the Chair. It is my intent to begin again 15 minutes after
the vote is called across the street.
[Recess.]
Mr. Grothman. The Committee will come to order.
I think we have Mr. Sessions up next, but he is not here
quite yet. So, what we will do--and Mr. Garcia is fine with us
starting. We checked. So, we will start with Mr. Gosar, and if
we do not have anyone back on a timely basis, I will go again.
Mr. Gosar. Thank you, Mr. Chairman.
In my district alone, I represent Luke Air Force Base,
Marine Corps Air Station, Yuma, and the Yuma proving grounds.
When Yuma hosted the war games in March and in October,
residents hear the jets overhead, and their comment is always,
``That is the sound of freedom.''
Especially after the recent assassination attempt on
President Trump, national security is on the forefront of our
minds. As elected officials, it is our job to ensure the
responsible use of taxpayer dollars to create a robust national
security posture. Warfare has changed. So, defense spending
must change too. Look at Israel and look at Ukraine.
Land warfare has become almost obsolete, and it has shifted
to an airplane missile and space defenses. We must prevent
waste, fraud, and abuse, and restore confidence in the
military.
Ms. Eaglen--did I say it right?
Ms. Eaglen. Yes.
Mr. Gosar. OK. This past February, a helicopter crash
tragically claimed the lives of five marines. One 23-year-old,
Alec Langen, was from my district in Chandler, Arizona.
The CH-53E Super Stallion helicopter has been involved in
fatal accidents since 1984. My question to you, if the DoD has
now eliminated these critical issues after 4 years later, is
this about oversight or is this about retirement for this
aircraft?
Ms. Eaglen. Congressman Gosar, do you mean retirement
early, meaning it is time to retire the aircraft?
Mr. Gosar. Yes.
Ms. Eaglen. Yes, it is time. And that is why the CH-53K is
under construction. And the service needs more of them now to
replace these older frames. All across the services hulls, air
frames, and chassis of vehicles reach their limits. And you can
patch them up, and you can make them somewhat new and extend
service lives, but there comes a point at which there is no
more Band-Aids on top of Band-Aids.
Mr. Gosar. Right. I hear you.
The military assessed and tested directed energy weapons
since the sixties, but recent investments have skyrocketed. In
Fiscal Year 2024 alone, directed energy weapons received over
$1.1 billion in appropriations.
Can you describe to me what a directed energy weapon is? Is
this like an EMP? Mr. Clark, I will ask you that.
Mr. Clark. Yes. Sure, Congressman.
So directed energy can either be high-power microwave, so a
form of electromagnetic energy, or a laser. So those are the
two forms of directed energy that the DoD is pursuing right
now. And they are both useful for shooting down drones,
airplanes maybe, potentially cruise missiles, and they have
been used to blind satellites as well, particularly lasers.
So those are the two different ways that you can do it
using directed energy.
Mr. Gosar. OK. A GAO report published May 25, 2023, claims
these weapons can be used to deny human entrance to a specific
area. Is that true?
Mr. Clark. That is true. The active denial system that was
pursued in the early to the mid-2010's was designed to
essentially heat up human skin, just like a microwave oven
might, to force people to leave an area. That system was never
fully fielded, so it was more of a research test object.
Mr. Gosar. Could it be used on a fence?
Mr. Clark. It could be used on a fence, yes.
Mr. Gosar. OK. What other purposes do these DEs have?
Mr. Clark. So directed energy is mostly being pursued now
to deal with the drone threat, so high-power microwave in
particular is really effective at taking down drones by
disrupting their electronics, and it confuses the computer and
forces it to reboot, or it causes the drone to land in
response. So, those high-power microwave weapons can be an
inexpensive way to deal with drone swarms.
Mr. Gosar. OK. So, as a Member of Congress, you see this
balloon, how do we now and how do we get oversight of that kind
of program?
Mr. Clark. Yes. The key is to look at the ones that are
going to have the most potential utility in the nearest term
against the threat. So high-power microwave systems seem like
they offer the best opportunity to do that. They are mature.
They can be used against a wide variety of threats, and a lot
of tests and demonstrations have shown them to be workable. So,
I think that is probably where we need to focus the attention
is on high-power microwave rather than laser.
Mr. Gosar. Mr. Clark, in October 2020, a DoD press release
revealed the BioIndustrial Manufacturing and Design Ecosystem,
or BioMADE, received $87 million in Federal dollars to produce
cell-cultured meat and protein products to reduce carbon
emissions on military basis. Now, I am a meat-and-potatoes guy.
Based on your experience with the strategy and force
planning from the Navy and DoD, does the lab-grown meat
contribute to the U.S. national security posture?
Mr. Clark. Probably not. It definitely should be something
that is pursued by commercial or private industry.
Mr. Gosar. Thank you. I appreciate that.
I have run out of time and yield back to Mr. Chairman.
Mr. Grothman. Thanks.
I request unanimous consent to have an additional 5 minutes
for myself to ask more questions.
This question is for Ms. Eaglen. With the cost of the
remaining four carriers expected to only increase and the
timeline for the delivery being pushed back to the 2030's, do
you believe these ships are worth the significant investment
with the rapid evolvement, the rapid evolution of drones and
hypersonic missiles on the battlefield?
And I believe they have been involved in some war games
that you might be familiar with. Do you guys think the
investment in aircraft carriers is worth it? And I guess the
last question, could it result in a huge humanitarian disaster
to rely too heavily on them?
Ms. Eaglen. Well, I will start. I am sure my colleagues
want to weigh in. But, in a war versus a peer competitor, Mr.
Chairman, almost everything on the surface of the Earth will be
a vulnerable target. So, aircraft carriers are not unique among
them, although, of course, they are pretty large. But that is--
if we get to the war, it means the U.S. military has failed in
its core duty to keep the peace and uphold deterrence.
So, winning the war is half the job. Keeping the peace and
maintaining deterrence is the first part of that.
And I would say, you know, managing the balance of power
across the Middle East and Eurasia, great power competition, it
requires presence and flexibility, and these are unmatched in
the carrier. These are floating American cities of sovereign
territory jam packed with combat power on the top of it that
combatant commanders cannot get enough of for deterrence and
competition.
We are an 11-carrier Navy in a 15-carrier world. So, if you
want these crisis response tools, I would argue there is a
great case for the carrier. However, what you put in and on it,
that is what I think fundamentally needs to be revisited by
Congress with many more capable unmanned systems in particular.
Mr. Grothman. OK. Either of you other guys have a comment
on the aircraft carrier? Like I said, I have heard about some
war games in which the carriers were sunk.
Mr. Clark. Right.
Mr. Grothman. You know, it was a different world, the
Battle of Midway, but some people felt that the Battle of
Midway aircraft carriers were a little bit obsolete in 1942.
Mr. Clark. Right, yes, sir. So, it depends how you use
them. So, in war games, which we have conducted plenty of, war
games are--or rather air carriers are vulnerable in that
initial strike. So, the question is, do you use them as the
opening set of salvos if you are going against the Chinese to
help defend Taiwan? Probably not. You would probably use
stealth bombers and submarines to do most of those initial
strikes.
Carriers, though, have great utility in crisis response. We
are seeing how they can be employed in the Middle East today
where we do not have a lot of airfields, and we are able to use
aircraft carriers to project air power to attack Houthi missile
sites, to defend Israel from attack from Iran, to do air
defense for Israel.
So, there is a lot of versatility in the aircraft carrier,
but it is mostly in the crisis response role and in the
stabilization role that happens after the first few salvos of a
great power war, like, between China and the United States. And
that is what the war games have revealed is you do not want to
use the carriers as your first set of platforms that you put
out there in the fight. You use something that is more
survivable initially, and then you bring in the carriers later.
Mr. Grothman. Do you other guys have any comments on it?
Mr. Clark. One other thing I will add is we have done--we
are doing a force design study for the Navy right now, and we
found that carriers, maybe the number could be reduced to help
manage the cost associated with particularly the operations and
sustainment costs for them down the road. But there is some
number that you need, between 8 and 11--8 and 10 really, to be
able to maintain the kind of presence for the crisis response
that we are seeing, for example, in the Middle East today.
And the cost of the Ford carrier, if you look at the
predecessor, the Nimitz carrier, it is only a couple billion
dollars more than you might expect the Nimitz class to cost if
you were just to buy the Nimitz class today. So, with
inflation, you know, the cost of the Ford is probably not too
out of bounds.
Mr. Grothman. OK. Do you think the evolution--could you
address the idea that with the evolution and improvement of
drones and hypersonic missiles, does that have an effect on
your equation?
Mr. Clark. Absolutely. But we should think about drones
being employed from the carrier as well. The aircraft carriers
are just a floating airport, and what is on the carrier is the
most important element of it. So, instead of maybe having an
air wing that is composed entirely of F-35s, we should have an
air wing that is much more composed of uncrewed systems----
Mr. Grothman. With drones on there?
Mr. Clark. Drones on there.
Mr. Grothman. Bingo.
How many people are on an aircraft carrier if one were to
go down?
Ms. Eaglen. Five-thousand.
Mr. Grothman. Pardon?
Ms. Eaglen. Five-thousand.
Mr. Grothman. That is what I thought. It is a lot of
people.
OK. I will give you another question as I wait for my
buddies here to show up.
I ran into a couple of people back home, not in the
Department of Defense field, but in other fields, feeling--one
in the construction area, one in the food area. They felt some
of this diversity stuff, whatever they call it, was increasing
the cost to the government just shockingly.
And I wondered, are requirements, rather than just build
the best aircraft carrier as quickly as you can and cheaply as
you can, including these other requirements of who you have got
to hire, who you have got to subcontract with, do you know,
even anecdotally, is that adding to the cost here?
Mr. Clark. Well, I will just say, from what I have seen in
my own experience, there are set asides clearly for
disadvantaged groups in the contracting process, particularly
for smaller contracts. It is unclear to what degree that
increases costs to the government. But if you are constraining
the amount of competition you are able to get for a contract,
there is that possibility that you are going to end up paying
more in the end for it.
Mr. Grothman. Yes. And not only more but maybe you are
leaving some high-quality people on the table that you maybe
would not normally do in your own life, right? People I would
think in their own life when you buy stuff, you do not--you
just buy the best product that you can for the most reasonable
price. You do not ask the Ford dealer, ``By the way, you know,
what is the background of the engineers on this thing, or
whatever.''
I am now going to take a delay because all of these people
expressed interest and are thrilled to be on the Committee, as
am I. Maybe I just have to call myself 10 times in a row,
because I love to do it, but my colleagues might get mad. So,
we will say the Committee will suspend momentarily, and we will
wait for a couple of other people to come back out here because
we were all, you know, taking votes across the street, and
people run into their buddies and then wander over here.
[Recess.]
Mr. Grothman. OK. Apparently, Mr. Biggs is in the processor
near the process of asking questions in another hearing. Paul
Gosar is always in good, so we are going to give--I will make a
unanimous consent request that Paul Gosar have an additional 5
minutes.
Without objection, so ordered.
Go ahead, Mr. Gosar.
Mr. Gosar. Thank you very much, Mr. Chairman.
A GAO report published on Monday revealed this
administration authorized almost $24 billion in equipment and
services to Ukraine under the President drawdown authority.
Now, this is not new. Both sides do it. But what happens is our
Nation digs itself deeper and deeper into this $35 trillion
debt.
I encourage this whole Committee to consider my
legislation, H.R. 4615, the National Emergency Expenditure
Reporting Transparency Act, requiring the full disclosure of
Federal funds used to implement national emergencies as
declared by a President. Article I powers give those to
Congress, except in a national emergency. So, we want to make
sure that we have all of those blessings that it be able to be
held accountable for our spending habits.
Since the beginning of this Congress, I have led a
bicameral and a bipartisan effort demanding the national
emergency expenditure reports as currently required by law be
conducted. There is either a lack of reporting or nonreporting
related to more than 40 ongoing national emergencies.
And that is kind of what I want to talk to you, Mr. Clark,
about. Do you see a need to have a declaration of a national
emergency with Libya?
Mr. Clark. In terms of our making a declaration to allow us
to support the Libyan Government?
Mr. Gosar. Well, that is not an emergency, is it?
Mr. Clark. Right, unclear. Is it an emergency for the
United States? Probably not.
Mr. Gosar. Yes. And I think a lot of this is overdone, you
know, from both sides in that we have a national emergency with
the Congo. We have a national emergency with Syria, Libya,
Sudan, you name it. And it does not need to be there.
The problem we have is each administration takes advantage
of it. They are able to move money around, so we have really
two ledgers. We have this one we always talk about, but then
there is a hidden one that is not talked about, and it is
significant.
In fact, the Cato Institute did a report on this after they
heard me whining and crying and screaming. They found that,
since Bill Clinton, up until now, we have spent over $11
trillion, $11 trillion in these national emergencies. There is
no accountability. There is no nothing.
Well, we have got to change that. If we are going to
redirect this, I am happy to share that with an administration,
a President, but they have got to come back to us with the
checks and balances. So, I just wanted to let you know that.
One thing else I wanted to ask you is that, since World War
I, the DoD has conducted psychological operations, what are
known as military information support operations.
Mr. Clark, does the DoD still fund these psychological
operations?
Mr. Clark. So, DoD funds military information support
operations, MISO, and under some new names now, but those are
designed, you know, not to necessarily affect civilian
populations. Those are designed as part of military operations
to influence the thinking of your adversary.
Mr. Gosar. Right.
Mr. Clark. Yes.
Mr. Gosar. OK. And, last but not least, do you agree with
me that war has changed, particularly this last kind of seeing,
you know, these tanks that were once really prized are now
victims of their own success, you know, with the simple drone?
Can you try and address that?
Mr. Clark. Yes. What we are seeing is a major shift in the
character of war toward new technologies, like drones and
commercially available sensors and commercial communication
systems being the way that you make kill chains as opposed to
tanks and missiles and government-owned satellites. So, we are
seeing this transition to empower countries and organizations
that are able to use these commercially available technologies
to string together effective kill chains. And we see the
Houthis doing it as well in the Red Sea.
We should be taking advantage of those technologies as
well. I think the problem the U.S. has is we often think of
just how to defend ourselves against these threats, but instead
we should be looking at ways we can exploit them and take
advantage of them to affect our enemies.
Mr. Gosar. In your opinion, each one of your opinions--I
will start with you, Mr. Schwartz--how effective do you think
we are in that transition? Could we be better, or is there
something else we need to be doing to make it better?
Mr. Schwartz. In which transition?
Mr. Gosar. Transition to the new type of warfare.
Mr. Schwartz. Oh, I think there is a lot we can be doing
better. So, 2 years ago USD (R&E), Research and Engineering,
put out 14 critical technologies. Twelve of those
technologies--possibly 13, depending on how you interpret it--
but 12 of those technologies are either completely or partly
led by commercial industry, right. These technologies are being
led by industry.
So, my colleague was talking about how the Houthis are
leveraging commercial technologies. It used to be that DoD
would go to industry and say, ``Do this.'' Now they are going
to industry and saying, how do you do that? And that is a
fundamental change that is understood but not necessarily
completely, deeply internalized in the Department.
So, I think it is critical for the transformation of
warfare because warfare is moving so quickly. It is not just
that warfare has changed. The plane of warfare has changed: 15
years ago, we were not talking about space. Fifteen years ago,
we were not talking about cyber. So, it is not just the
evolution of warfare, which always happens, albeit much faster
now, but the planes are changing and can change in the future.
So, we need industry to partner with them and get those
technologies. It does not mean everything should be commercial.
A lot should. It does not mean everything can be commercial,
but we need that.
Mr. Gosar. Ms. Eaglen.
Ms. Eaglen. It is a great question, Congressman Gosar. And
I would say the state--how is the transition going to what I
would argue is sort of human machine integration, robotics,
unmanned, autonomous, semiautonomous systems operating
alongside U.S. military forces, I would say poorly. It is not
nearly--the Defense Department is not keeping up with the
technological change and refresh that is available in the
commercial and the private markets.
Part of this is a culture challenge at the Department, and
we talked earlier about, you know, the carrier air wings. There
are products available right now today that are fully
autonomous and unmanned that should be sitting and parked on a
carrier deck at this moment. But really across the services,
you know, we should have the loyal wingman concept, right. So,
you have a manned fighter or a bomber. Next to it you have an
unmanned tanking drone. Next to that you have an unmanned
payload carrying or weapons carrying drone, and the three go
together, so like a 1 to 3--1 to 2--oh, excuse me, 2 to 1
ratio.
The Department--other countries, friends and allies--we are
seeing it, of course, in Ukraine, but friends and allies,
Australia is growing faster, and many other countries are
showing that these models work. The Defense Department, I worry
that not only are they going too slow, it is going to take a
crisis to wake them up to how it is going.
Mr. Gosar. Mr. Clark.
Mr. Clark. Yes , I agree that we are not going fast enough.
We have done a lot of work looking at new concepts the
Department could be pursuing, and a lot of this comes down to
the Department needs to think differently about how it is going
to fight and begin to equip itself in that new way and learn
some of the lessons of Ukraine, learn some of the lessons that
we are seeing in the Middle East today and begin to look at
ways to bring technologies like high-power microwave, uncrewed
systems or drones into the force, and then you write them in a
way that takes advantage of them without necessarily throwing
out the existing military we have today. There is a way to make
it work together, but the key will be----
Mr. Gosar. The emphasis.
Mr. Clark [continuing]. Doing it affordably.
Mr. Gosar. And the balance of that.
Mr. Clark. Right.
Mr. Gosar. Mr. Hedtler-Gaudette, do you have an opinion?
Mr. Hedtler-Gaudette. Yes , thank you.
I just want to pause here for a moment. I understand this
might make me kind of the skunk at the garden party here, but I
think it is also important to remember that when we try to move
too fast, we often break things. And I know that that was
actually a buzz phrase in the tech world for a while, ``move
fast and break things,'' but I think it is important to be
careful about how we undertake this acquisition.
I agree with you that it is a necessary transition, but
when we are asking the Pentagon, an agency that cannot even
account for where its assets are, to undertake a complex
transition and do it completely, I think we are really asking
for a disaster in the making. And, again, I am just going to be
the broken record here. The disaster in the making I am talking
about is all going to be paid for by the American taxpayer.
So, I just wanted to exercise caution and prudence as we
think about how we are going to make these transitions and how
we are going to prepare for the 2lst century. You know, I think
it goes without saying I agree with my colleagues that we are
still operating mostly in the 20th century. I do not know if
you have tried to use the Pentagon website recently, but it
looks like it came straight from 1998. So, I think there is
definitely a lot that needs to be done there.
Mr. Gosar. So, real quick follow-up----
Mr. Grothman. This is the last question.
Mr. Gosar. Yes. So how do we equip ourselves to be the
oversight? Help me, help us how to figure out how to oversee
this process.
Do you have any ideas, Mr. Hedtler-Gaudette? I mean, you
know, we were watching movies like ``The Terminator.'' It is
here. It is actually almost here. So, tell me how you could--
how we could set ourselves up to be that arbiter or to be that
checks and balance.
Mr. Hedtler-Gaudette. The one thing to do is to have
hearings like this. And I want to, again, commend Chairman
Grothman for holding this hearing and you, Congressman Gosar,
for being a very active participant in this hearing. We need to
have more of them, and they need to be more rigorous, and they
need to be more regular.
We also need to follow up oversight activities and
investigations with actual action. So, it is one thing to tell
DoD or to tell a misbehaving contractor that they are not doing
the right thing, but unless there is actual penalties or
consequences on the other side of those words, I do not think
it is going to change behavior very much.
So, in addition to the, you know, examining and overseeing
and investigating these issues, we need to also actually push
forward some reforms to make these, you know, bad outcomes a
little bit less bad in the short term and then try to really
change the trajectory of where the Pentagon is going moving
forward.
You know, I mentioned earlier some reforms around how sort
of contract and acquisitions are determined and negotiated at
the front end. I think that is a big part of why we are , you
know, seeing the things we are seeing because I do not think
anyone is happy. I do not think the people who push for
acquisition reform are happy because we are not getting
innovation and we are not getting agile and quick and efficient
acquisition. But we are also--you know, people like me are not
happy either because we are continuing to see a lot of waste
and a lot of things like price gouging and overcharging.
But we are in the worst of all worlds at the moment, and I
think Congress does have that role to play. And I think using
the power of the purse more frequently is also really
important. Obviously, hitting people where it hurts in the
wallet is usually the most effective way to catalyze change.
Mr. Gosar. Yes.
Mr. Clark.
Mr. Clark. I would say the most important thing would be
for Congress to get involved in making sure the requirements
are set so that you get relevant capability, not the absolute
best capability, and that you can generate relevant capacity
with that level of capability, because we have to do this
within a cost constraint. And, if the DoD aims for the best
that it can get, it is going to necessarily get less, and it is
probably going to take longer and cost more.
So, you've got to push for relevant capability and relevant
capacity, not just the best.
Mr. Grothman. Thank you much.
We are going to wrap things up now. I guess I will make a
little statement.
I appreciate you all being here today. The reason we had
the hearing is I think we have seen from the past that the
Department of Defense, which is overwhelmingly dominating our
discretionary budget, never looks good in these sort of
hearings. And I think it is a cliche saying the military is
fighting the last war. I think that is true big time of our
military right now.
I think as far as getting done with what they are getting
done on a cheaper basis would open up money for the other
things that they should be dealing with that they are not
dealing with now because they claim they do not have the money.
So, we may wind up having other hearings examining the
Department of Defense in the future. Maybe--I do not know if
they pay attention to it, but maybe the Armed Services
Committee will learn a little bit from what we are doing here.
Now I will say that with that, without objection, all
members have 5 legislative days within which to submit
materials and additional written questions for the witnesses
which will be forwarded to the witnesses.
If there is no further business, without objection, the
Subcommittee stands adjourned.
[Whereupon, at 12:01 p.m., the Subcommittee was adjourned.]