the senate armed services committee heard from air force secretary heather wilson. army secretary mark esper and other representatives. at the hearing is one hour 45 minutes

. >> senate armed services committee meets today to receive testimony on the department of defense acquisition reform efforts and we welcome our witnesses, ellen lord undersecretary for acquisition, technology, and logistics. mark esper, secretary the army. heather wilson, secretary the air force and james geurts assistant secretary of the navy for acquisition, technology, and logistics-- acquisition reform is one of the most important and frustrating topics committee addresses. four years we have been warned that america is losing its technological advantage. i hope you have seen the work on the topic.

that's why the department of defense needs acquisition reform not just for efficiency or to save money, simply put we will not be able to address threats facing this nation with the system of organized irresponsibility that the defense acquisition enterprise has become. i went to witnesses to pay attention. we are still dealing with a trillion dollar after 35 program that continues to operate in dysfunction. the air force still subsidizes you allay for space launch with the cost-plus fixed fee contract. of the army is nearly $6.5 billion and that worked-- the navy's lcs program is delayed. the costs are now $6 billion and rising in many of the key capabilities remain on the

proven. that's why this committee enacted the most sweeping acquisition reforms in a generation in the last two national defense authorization act and yet despite that legislation and in the face of our eroding military vantage the department has been unable or unwilling to change. while the previous administration offered rhetoric about reform, this committee was disappointed we saw no meaningful action. i remain deeply concerned about the state of acquisition system and i'm encouraged by the early science from your team. it appears you are beginning to make progress. let me remind you of our expectations. first, the office of the secretary of defense needs to let the services manage their programs. congress has returned significant authority to the services, but we will watch

closely to make sure you can use that authority wisely while we have empowered the services, that doesn't mean you can do whatever you like. the services much let osd search strategy and policy into oversight. that means being transparent providing data to and following the guidance set by osd. this committee takes its own oversight role seriously and we will rely and you to keep us informed so we can do our job. third, the system must move faster. time is of the essence. a work of groups like the strategic capabilities office and the rapid capabilities office should become standard practice, not workarounds to the

regular system and we need these innovations for major defense acquisition programs, not just science and technology efforts. forthcoming you need to be willing to take more risk and be willing to fail when you try new things. we recognize congress can make that difficult's. keep us informed of your plan so we can work together so we are not surprised when things don't go exactly as planned. we would rather have a small failure that teaches us something early in the acquisition process then deal with a multibillion-dollar program that becomes quote too big to fail. this, invest in acquisition workforce and empower them to succeed are too often we hear acquisition personnel are unfamiliar with more nervous about new authorities and finally inform your organizations and business practices to simplify and move

faster. major changes we have instituted through legislation are intended to give you the opportunity to make them more detailed changes in your organizations. this is an opportunity to update your organizational structures and internal processes accordingly. along those lines if you fail i would much rather you try to fail then knew nothing and if you keep in contact with us and tell us what you are trying to do we will be patient for about five minutes. finally, inform your organizations and businesses practice to simple by move faster.

major changes we've instituted through legislation are intended to give the opportunity to make more detailed changes in your organizations. this is an opportunity to fail. this is an opportunity to update your organizational structures and in art-- processes accordingly. you have reforms and you want to try them, come and see us and we will be glad to cooperate with you. don't be afraid to fail because because the only way we will succeed is to take the risk of failure. congress is provided you with all of the tools you require. we expect you as part of a new administration to use these tools unlike your predecessors. as you do so, you will have a willing partner in this committee. do not hesitate to pick up the

phone or come over and see any members of this committee we have given our subcommittee chairs a great deal of latitude and great deal of authority as we go through the decision-making process. do not hesitate to call any of them with the exception of senator reed and franken. finally, i believe and i will be glad-- we will be glad to hear your requirements and how we can help you do your business better anymore efficient fashion. we expect you as part of the new administration, as i said, you will have a willing partner in this committee. look, we had a briefing from the

rand study that i think my friend jack a reid would agree is one of the more disturbing reasons we have had in the years i've been a member of this committee. gap is closing. there's no doubt about it we will be expecting a lot of you, but we will not succeed unless we have a partnership here. thank you. >> thank you mr. chairman and thank you for holding the theory -- hearing. i want to think the witnesses also for appearing today and we look forward to your testimony. we have a shared goal to ensure our military forces are equipped with the best technology and that those systems are the most effective and efficient ways possible to protect the nation

and the many women in our armed forces. we also have a shared told the pentagon should be able to access the most innovative people in technology available from the best small company defense industry and also we open to them to ensure we are buying things at reasonable prices and within reasonable budgets. this will give us a chance to learn how the department is working to make those shared goals a reality. the services it should play a role in the research in acquisition program provided advanced system and capability to our combatant commanders. congress has straight and the role in planning requirement of the review process that strongly shapes whether our acquisition programs is succeed or fail. these responsibilities are in addition to the role services have always played in development of their budget ensuring programs are appropriate prioritize and funded especially in difficult budgetary environment and finally the services play a

critical part to personnel who work in acquisition requirement and budget fields peered too often we forget about those individuals and necessity to prolong their careers. building on the successes of the weapon system acquisition reform acts and making use particularly of the new reforms in the recent authorization act, we see some improvement in acquisition process now come today and are well positioned to make more improvements, but we should do better and that's why you are here today. are look forward to seeing how the services plan to use their authority in the book to their responsibilities and also welcome a discussion of further changes that can be made to strengthen their role as appropriate in the hopes of continued to improve outcomes.

thinks again to the witnesses and the chairman and i look forward to the testimony. thank you. >> i would like to same how much i appreciate the partnership that i have with senator reed despite his educational lackey-- lacking, but we are partners in the fact that the defense bill was pastor this committee without a single dissenting about his ample testimony to the bipartisanship that characterizes our conduct of this committee and i'm very proud to have senator reed as a partner. we will begin with the honorable alan lord undersecretary for acquisition, technology, and logistics. >> chairman,-- >> could mention one thing? we may have depending on what

happens here there is going to be an event at 11:45 a.m. on the floor of the senate's and we may have to recess until that events is completed. go ahead, please. thank you. >> thank you for the opportunity to testify today on defense acquisition and reform efforts. i'm pleased to be joined by secretary mark esper, secretary wilson and assistant secretary james geurts. after spending 33 years the industry i have come to my position during a. back in time which provides a great opportunity to make a positive change. purse, the national defense authorization act for fiscal year 2016 and 17 have a provided the direction and a tools for the department to advance the capabilities required to restore our overmatch, speed the rate at

which we feel these advance capabilities and improve the overall affordability of our fighting forces weapon systems. secondly secretary mattis has placed a priority on implementing these provisions alongside other department wide reforms and practices required to improve the readiness of our military. using an industrious analogy, i believe the osc should function as a corporate office, very lean enabling the services as businesses to execute programs they are responsible for. a p&l should push the majority of the departments work back to the services and focusing on prototyping and experimentation when developing architectures in standards interpreting law and policy and procedures and

simplifying acquisition processes to quickly and cost-effectively provide material and services to the war fighter. stating it plainly, a p&l needs to be the strategic body with focus across the board driving affordability and accountability , reducing timelines and equipping the services to execute their program. given the fact that dod average award daily, 1800 contracts and 36000 delivery and task orders every process improvement we make has the potential to produce significant results. having reviewed the lead time following validation of a wartime requirement until the award of the resulting major weapon system contract have concluded we have the ability to

reduce this time by as much as 50% incentivizing contractors to submit responsive proposals and 60 days or less in implementing department wide streamlining tools. furthermore, congress gave us the ability to conduct 10 pilot programs, permitting the reduction of cost and pricing data for foreign military sales. key to our success would be done the same flexibility for our us peak kermit. if we had the statutory authority on this it would allow us to use our judgment to reduce the cost and pricing data we would require when we have cost transparency with the companies with which we do business. in my testimony i stated we have initiated six pilot programs

that push the limits of our contracting agility. this is in order to demonstrate our ability responsible-- responsibly and reduce lead time -- >> tell us a couple of those programs. >> c-130 date-- jay and the japanese global hawk. one us in one foreign military sales. our goal is to get these pilot procurement done within 210 days from the issuance of the request for proposal. >> 210 days? >> 210 days is the interim: we would like eventually to get to 180 days. we have a process to work down and we will work with you and your team to demonstrate how we do it and we will come back to you as we need additional authority if needed, but we believe it's interpreting the authorities we have now and making sure you agree with them and having us move forward. we are also pre-positioning

production contracts to include options for yet to be developed requirements. in other words, in the initial contracts with the language so we can almost fill in the blank for sales. again, pre-thinking this is going to reduce the timeline and allow us to be very responsive to international customers. >> so, you don't need 800 page rflp? >> absolutely correct. on the joint strike fighter program we are determined to reduce the cost of production and sustainment. we have initiated an extensive deep dive led jointly by my office, apo. the purpose of this cost review is understand in detail at lucky martin, northrop grumman, rolls-royce and be ae as well as

their primary subcontractors and there are 100 in total. what it costs, white cost what it costs and more importantly what we can do to improve cost performance at the prime-- as a prime contractor and up and down the supply chain. this will be a completely transparent process of the companies involved. the knowledge gained will inform our product contract negotiations and all of our sustainment efforts on a go forward basis and will promote more effective and timely contract negotiations. just yesterday the fy 2017 defense acquisition workforce award ceremony was held. deputy secretary shanahan and i recognize the outstanding accomplishments of 27 top dod

acquisition professionals out of a workforce of 165,000. a few of their accomplishments include implementing a cutting edge approach to cyber security testing for aircraft weapon systems. accelerating the testing for defensive systems on a c-130 j aircraft by two years, getting 3000 tactical combat units to medics and special forces operators, improving cyber security for medical facilities and reducing biological agency contamination time by 50% to accelerate the return of equipment. out of the 17 individual awards across requirements and acquisition critical functions the united states special operation command received for. our challenge is to take these pilots, these silos of excellence and scale them to the

big army, the big navy, the big air force. we are also. >> how many f-18s are operationally ready to fly? >> not enough. i will defer to my colleague mr. gertz on that one. >> okay. the numbers i recall of 60% are not flying. >> operational availability across our care assets is an issue and as i talk to each secretary it's very clear there's a lot we can do at the beginning of these programs to design in the sustainment portion and we are focusing on that and we will come back and tell you how we are working on it. >> let us know who is responsible. >> absolutely. i would look forward to a small discussion in your office and we can talk about the actions we are already taking in terms of accountability with individuals.

>> we are also working to make use the new rapid flexibility to bring in world-class talent in areas like robotics, lasers, artificial intelligence as well as new contracting specialists and test engineers. in 2016 hour labs hired nearly 2000 new scientists and engineers using the hiring authority congress provided. reforming and improving the defense acquisition system to create an agile enterprise is a continuing process requiring close partnerships across the department and with congress. you have my total commitments to the success of the partnership. i'm-- i'm looking for to working closely with the committee and the professional staffers to further implement the initiatives we have already begun. thank you for your support in

the significant effort and i look forward to answering your questions. >> thank you. secretary mark esper. >> chairman mccain, ranking member read and distinguished members of the committee, good morning. when i appeared before the committee in mid-november i stated modernization was a top priority of mine in ensuring the future readiness of a force and high-end fight would be difficult without fundamental reforms of the current acquisition system and him a few weeks as army secretary on the more convinced that this is true and more aware of the urgency for us to modernize. i'm encouraged by the progress the army has made consistent with congressional direction to begin overhauling the current system and to be sure a long road lies ahead and the challenges are great, but army leadership with the support and advice of congress is committed to bold reform that promises to provide america's soldiers with the weapons and tools they need to fight a winner nation's wars

as part of the joint force. this committee is well aware of the growing challenges our military faces around the world rising your competitors threatens and sometimes challenge of america interest with capabilities that match and in a few cases exceed our own. in short our failure to modernize as quickly as possible will most likely increase risk to the force making reform of our industrial age acquisition system a strategic imperative. together with leaders from the regular army, army national guard and army reserve i'm approaching this endeavor through the priorities outlined recently. first, taking care of our people. next, readiness to ensure the army's ability to deploy, fight and win across the entire spectrum especially the high-end. third, modernization, greater capability and capacity and longer-term to ensure clear over match in future and finally reform, improve the way we do

business to free up resources, time money and manpower to make the total army more lethal, capable and efficient. a given these priorities the army is undertaking five acquisition reform efforts are designed to promote unity of effort, unity of command, efficiency, cost effectiveness and leader accountability. first, a three-star level task force is mapping out a new command, army futures command that will consolidate the modernization enterprise under one roof. second, of the army is executing eight directives to improve our capability of the material process by refining how we generate requirements. simplifying our contracting and sustainment processes and evaluating our progress and metrics to enable our ability to these directives leverage authorities contained in the fy 16 in fy 17.

third, the army has stood up a cross functional teams to in a lower leadership to identify and manage investments across the army six modernization priorities. these teams are charged with using technical expert instrumentation and demonstrations to inform prototype development and reduce the requirement process. the army's fourth effort is to ensure technological solutions are determined before we begin a program of record including a threat faced a strategy aligned 80% of the armies of science and technology funding request against are six modernization priorities. this, we are directly engaging army senior leadership as decision leaders as directed in the fy 16 to a reinvigorated army requirement oversight council process. these efforts are the benefits the army has derived from the recent and daa.

for example streamline requirements and processes are captured at a rewritten army regulation. there is more we can and must do to be effective we must have predictable, stable and adequate funding to restore valley-- bouncer reduce risk to believe we are countable to congress and the american people. this is why we continue to work with your new staff on the task before us. i believe you will see their progress in the coming months with much more unity of effort, unity of command, efficiency and accountability as we move forward. the ultimate test we will faces on the future battlefield where we will succeed or fail based on our efforts to reform and modernize today. i cannot help but be reminded today's the anniversary of december 7, when we were caught off guard in pearl harbor and in a few short times-- years we re-energize the country

industry, the american people to fight and win the work and i think we need to take that same sense of urgency to the challenges we face today as we did in the 1940s, so with that we understand the stakes and begun to make progress and we will not fail. thank you. >> thank you mr. secretary. secretary james geurts. >> mr. chairman, ranking member read and members of the committee. thank you for the opportunity to appear before you today that apartment of the navy has embraced the recent acquisition reforms on multiple fronts and we are actively pursuing initiatives to capitalize on the new midtier acquisition authorities provided in fiscal year 2016 and 2017 nda a and we continue to leverage tools to drive out procurement costs and assist the workforce and made meaningful progress and will continue to be affixed-- a fifth

-- efficient managers in our resources. our workforce in particular has made progress advancing are professional and technical challenge space to your support and further meaningful reform must be assisted by predictable funding, timely budgets, avoiding further cr to increase funding levels would reduce market uncertainty and improve our ability to maintain schedule across the department and navy acquisition programs. for funding translates into more capability to learn efficiently producing cycle time and costs in the goals we share here together. we appreciate the support of the committee providing guidance on acquisition policy and reform. thank you for your opportunity to speak today and i look forward to your questions. >> secretary wilson, welcome. >> i would like to put my false statement in the record and summarize a few points. >> without objection.

>> i want to thank the committee for the authorities to give into the services to accelerate procurement and streamlined capabilities to the war fighter quickly. the air force manages 470 acquisition programs and it's about $1,508,000,000,000 if you add up what we were authorized to spend over a five-year period with few things in the legislation that you've given us that i want to update you on where we are. the first has to do with delegation of authority back to the services which was clear guidance in 2016 national defense authorization act. before that acts came into being , 19 of a 49 of the largest air force programs were managed and authority kept at the office of the secretary of defense level so only 39% of the programs we had decision of authority on. >> you see at as an improvement? >> well, today i have 76% of those in last week the

undersecretary delegated eight more programs to the air force to manage and one of those was a gps follow-up so last thursday secretary lord give us authority to move out on that program and in the last week we have moved forward proving a strategy to put out the request for proposal and in that one action we saved three months on the timeline to acquire that system so we are taking advantage of those authorities and also doing the same in the service by pushing authority down to program managers to the colonels who can run these programs. we haven't been changing things above them in the past. they know what they are doing. let's support them and get after their programs. the second thing to change in the authorization act was prototyping and extermination. we've taken advantage of those new authorities in a couple ways with the most publicly discussed is that attack aircraft. you mentioned the 100 page

request for proposal part 9-kilometer pistol. looked like a pretty big stack to me. this is the letter of invitation and four page set of requirements on the attack aircraft. it was sent out on the eighth of march and in less than five months with four aircraft to test that the air force base in last night i just got the test report, so in less than 11 months with five pages we tested for aircraft for potential light attack aircraft for the united states and now i. >> what conclusion have you reached? >> senator i was busy preparing for this hearing and did not read the report last night. [laughter] not just allied air craft we are exploring. intended to get an increased interest of about 10% with a 25%

increase in fuel efficiency and we have got to contractors working on that. is not a program of record. it's an experiment we are trying to ensure the technology, refine requirements, reduce the timeline to get better engines that are more fuel efficient to the war fighter faster so those prototyping and rapid fielding authorities are going to pay us big dividends in the short-term and long-term. the third thing that you are authorities gave us was something called the other transaction authority and we are taking advantage of that in a number of different program areas. really targets the nontraditional dod contractors, the small companies that won't do business with the department of defense under normal circumstances because we are too hard to work with. space admissions system let a hundred million dollar contract, umbrella contract of innovative countries-- companies to give us space, ground, communication

capabilities for our space forces and that consortium is managing things for us under other transaction authority contract. took as three months to put the contract together. rome labs is another one using other transaction authority arrangement that you authorized to put together consortium of companies helping us on cyber intelligence, surveillance and reconnaissance. the fourth area i want to highlights has to do with people in the emphasis of this committee on both expedited hiring and the professionalization of our workforce. in 2016 we used expedited hiring in the air force to hire 810 people and in fiscal year 17 we almost double that up to 1600. direct hiring we even see more effort by the air force to take advantage of the authorities

you've given us and in fiscal year 16 we only hired two people under those direct hiring authorities. fiscal year 17, 266. thank you also for the defense acquisition workforce development fund. we are using those funds to enable and empower and educate train exceptional acquisition officials to be able to take advantage of the authorities you have given them to do things differently, faster and with more capability. there's more work to be done, but we are beginning to make progress. there are areas where we are not very good at buying stuff, software is one example. it's an area of continued focus an extra emphasis by the air force. .-dot all of this will work and that's why we called them experiments. if we had productive failures in belfast and learn from it and continue on in different vectors of technology have a chance of better beating the adversary in 2030 and that's what this is all about.

thank you, mr. chairman. >> thank you madam secretary and i think the witnesses. i would like to point out that it was about three years ago that we were having a hearing with service chiefs and we were looking at the fact that the uss gerald r ford had a tube be cost to overrun and i asked the secretary of the navy-- no, chief of naval operations sue was responsible for a 2 billion-dollar cost overrun. do you know what the answer was? he didn't know. he didn't know, i mean, there is such a thing as accountability and all of the things that was covered by witnesses here that there is no penalty for failure. can you tell me one or two

individuals that because of the failure, for example 6 billion-dollar teacher combat systems that never worked, can you tell me eight individual or individuals that paid a penalty for that failure? yes? >> senator, i would be more than happy to have a meeting in your office and talk about actions we have taken over the past several months to get at that very issue >> what can you tell us-- can you reveal to us, can you illuminate us as to-- >> we has a team are working very closely together to look at functions and individuals in osd and the services, the duties they are required to perform in determining whether or not we have the right people in the

right slots and i don't want to talk about individuals here in a broader forum, but appreciate the opportunity to do that behind doors with a smaller group. >> well, i think you, but when i go to a town hall meeting and tell my constituents that we lose a $6 billion and there's not been anyone fired or replace or new way of doing things they are not really very happy, so we will be glad to hear what you have done what you plan on doing , but there's no reason why you shouldn't tell the american people. that's why we have the hearings in the armed services committee. okay? so, the next time you come before this committee-- and you will-- i want to know what

you've done besides the say we don't know who's responsible. okay? >> 's or, excuse me. i want to be on record, we hold people responsible and we will talk about that. >> all right, you hold people responsible. that's our system of government. who is it that's been fired? any answer? no space accented her, i'm not aware of anyone fired to your point. we completely agree. >> all right. senator reed? >> thank you, mr. chairman. following along these lines of accountability one of the practical difficulties is that these programs sometimes stretch over decades and they are people

who change oh, retire, who are promoted etc. so any thoughts about how we can have this accountability stretch over many many years and is a subset of those questions what kind of metrics can we use to make sure on track and the individuals will be closely associated with accountability? >> first, there is an active discussion going on about when we rotate program managers out. it has not always been aligned with critical milestones in the program and that is somewhat problematical in terms of discontinuity so we are looking at holding onto program managers through key milestones earth key events and i think that is one helpful issue. secondly in the departments i know we all talk about eye on a

monthly basis rollout the 87 major defense programs, so another words we had 87 a one programs that are accountable for about 96% of our $1.9 trillion program of record. we rack and a stack those programs in terms of their performance, not only to the contract itself, but to the needs of the downrange because for instance you can look at precision guided the missions program that was green and if you look at the letter the contract and we know we have shortages downrange. we take that market intelligence and factor it in. we look at the metrics, where are we in terms of cost, where are we in terms of delivery,

where are we in terms of quality we review that and we rolled that all the way up to secretary mattis. then i spend my time from osd and a p&l point of view on those critical joint programs, so right now an enormous amount of my time is focused on a 35. of those are some of the ways we are holding people accountable. we have what we call-- it's very transparent. you all are invited to come and see with the metrics up on the wall. we have in terms of accountability we have the peo and program managers names and they come in report out to us and we flow that information up so again i'm taking that lends that i had in industry and every month rolling the numbers up and seeing where we are. scene where we are and delivery time and quality and going back and making sure we have action plans against those. >> thank you. secretary mark esper,?

>> i completely agree with what she said with regard to aligning the program managers 10 years with the critical milestones and there are other things we should look on the personal side as well and i want to address briefly what you said about the process being so long. under developing army future command with the guard to the cross functional team what we envision is with the unity of effort and command adopting the process, process as enabled by the nda a prototype test learned, fail, prototype, test, learn, fail. this currently runs about five years, 60 months down to 12 so if you reduce the time frame you have one person would be in charge of the effort. that gives you one example how to reduce the timeline. >> secretary james geurts, i apologize.

my time is limited. >> i agree. tenure is key and we have a review process where we, myself look at these programs at milestone into annual reviews so that the key point where we see where the program is and then it says the manager or peo to see if they deliver and if not hold them accountable at that point. another key issue and secretary of wilson mentioned pushers possibility down so it's hard to hold someone accountable when they don't have the authority to make the decisions, so pushing that authority down is a key elements and probably most importantly is workforce training and certification because if we have not the effort to train them, certify them and make sure they are capable that it's hard to hold them up countable and that's our fault if we have not given them the skills to be successful. >> there working a hundred hour workweek. whose responsibilities that?

>> onboard the ship ship? >> on board the ships. >> that would be the cnl side through the operational command of. >> when i asked of the question i said well, we will do a study on this. study it as to whether our sailors and marines should be working hundred hour work weeks? we need a study to figure that out? >> sir, i'm not familiar with the details of that plan. if i could take a question and get back with you with the exact strategy to answer that question >> thank you. i'm sorry. >> quite all right. >> i think my colleagues covered it. >> thank you very much and thank you for your service. >> thank you, mr. chairman. let me begin, secretary wilson, you mentioned the light attack

aircraft and where we are moving on that. i went to compare that with the b21 raider program which is under development. as you have mentioned in prepared statements, there's moving in both of the programs. recently declassified audit with inspector general praised the b21 program plan for being cost goals and requirements. i think if this content-- trend continues of a model acquisition program congress and the tax payers might wonder if we could duplicate all or part of the process that has worked well in this program for subsequent programs. i know that chairman has expressed reservations as to the approach that had been proposed and i think he's been very interested in the developments and the movement forward in terms of getting this done on time and contract.

do you see similarities between that and the light attack aircraft possibility and can we use the process that we have so far been successful in developing the b21 plan? is that something that can migrate to other plans as well? >> senator, we are using different authorities there. we use other transaction authority and simple authority for the experimentation authority for light attack. b21 is more traditional and the thing that's different is it's being done by something we call the rapid capability office which as a board of directors of senior people including myself, a p&l, acquisition authority and things move quickly. we are actually extending that down and using the charter for the rapid capability office to extend that construct to our other procurement. we will give this a try.

it's a chart a poor kind of rapid capability process where senior leaders will allow a program manager to identify a program they want to move quickly on, set parameters and instead of having to walk around the pentagon to get 20 signatures they come to a board meeting, make a presentation and get a hard wire scrub and then do it so we are modeling that's in the air force. >> thank you. >> secretary lord, there was a discussion i had with my staff in terms of the timeframe that it takes to get new information new plans put together. they used as an example when we were talking about it, cell phone. straightforward, off-the-shelf. i can buy it make a decision on it and put it to use a week at the most from the time i get to the time i use it. acquisition time for a new piece of software and hardware, nation today through the pentagon could

take as much as two and a half years to acquire. this is basically out-of-date after a year to make a year and a half. my question to you when you are all said and done using a piece of hardware and software combination available today in the general public for perhaps purchase within a one week or two week period of time, what is your goal for getting the acquisition process down from a two and a half year time period for pentagon acquisition and issue? >> our goal is to look at where we have had successes. i have asked will to be here with me today because we think they have demonstrated the right kind of behaviors. we are looking at rapid capability office and as we organize a p&l into a and s and r any, we are basically trying to scale of the behaviors, the

processes or lack thereof that we have seen in these different groups and it's-- >> i'm going to run out of time. was the goal in terms-- is there a goal for cutting back acquisition dollars to 12 months of four major programs. >> two and half years to 12 months? >> correct. that's the first step i would like to be on record as saying. .. does the membership include war fighter representation from the military services combatant commands to include cyber command, or if not, why not? >> we have pulled in all of the services and are talking to them. them. we put out an rfi and gotten 52

responses. we right now are working on how we're going to go about that contract. we don't know how we're structure it yet but absolutely. because what we're looking at is mission focus, not backroom business systems. it's all about getting that computing capability up to the edge. we want our war fighting systems to be able to do machine learning, to have artificial intelligence. until we have all of our data in just a few places it's going to be hard to do that. frankly everything i do is about lithology of the war fighter. >> thank you. thank you, mr. chairman. >> thank you, mr. chairman. thank you all for being here today. the defense federal acquisition regulation supplement, as in all of you know, requires that all dod contractors including small businesses comply with a complex visit cybersecurity requirements by december 31 of this year.

i certainly think it's important for us to address the cyber concerns and have been banging the drum on that, particularly with respect to kaspersky software. i am concerned as a member of the small business committee in the senate, as someone who comes from a small business state, that our small business server important to technological innovation. i have heard from many of them that they're very concerned that the cat comply by this deadline that unlike some of the bigger businesses that work with the department of defense, they don't have the support to comply with these complex regulations by this deadline. can you tell me how concern any of you are about this, and whether the ways in which we can do more to help small businesses comply? >> on the very, very interested in this topic. and, in fact, we're concerned about being compliant and worrying about risks.

we heard back over a year ago that there was great concerned about the difficulties implementing these requirements so we went and modified them. and in order to most effectively and efficiently get out to the whole community especially the small business community, we used a forum that i set off quarterly i meet with all the different components with three industry associations, aia, ntia and psc. they all that small business components, professional services council. in our early october meeting we talked about this very issue because it was brought up and we said that clearly the only requirement for this year is to let what you plan is. that can be very simple plan and we can help you with that plan. we can give a template for that plan, and then just report your compliance to it. so we're trying to reach out a very hard through the industry

associations to get this worked out. there is maybe old information out there, and any small company that has any an issue can comes and we will happen with that. >> that showed helpful. are the guidelines we can share with the business community in our states be? absolute. i will get that to your office. >> secretary geurts, the virginia class of mine is one of the more successful acquisition programs. it's delivered on schedule and on budget. can you talk about what happened in the program early on that has allowed it to be so successful and whether there are lessons we can transfer as we look at the columbia class subs to ensure that they also can deliver on-time and on budget? >> yes, senator. third day on the job subs not around that program as it originated in person speaking you should know the answer to this, come on. >> yes-men. i would see looking back on it though, designed for portability

and then holding a stable design work worksheet trades having the right government and industry team working together through all of it, so as secretary spencer likes to say shared risk, should benefit. so very good working relationship between the government and industry team. and then as a look at columbia we're taking that philosophy and taking it to the next level. quite frankly using any of the common equipment we can across all the submarine fleet so we don't have to reinvent equipment and we can get greater economic order, and then really focusing really on the design for affordability. secretary lord and i had to review yesterday i think it was, a very impressed with the thought process, their disciplined process of really looking at cost in the design phase, not trying to make it more affordable after it's designed. i think there's a great principles that we will look to continue across the other part of the department of the navy. >> i i appreciate that and i hoe you will take the lessons that

are learned and make sure that the incorporated. to go back to small businesses as i said, and an overview view on the list, that a lot of the technological innovation that we are now adopting in our military come from small businesses. the sbir program, have really been successful. for sbir, for every dollar spent to the air force, 12 was returned. in the navy, for every dollar, 19 was returned. so these are programs that really work. can you elaborate on what more we can do to encourage the use of small business in these programs? >> i was just speaking with russia a couple of days ago -- rosh hashanah. how we can take the success they've had diux because they have left over 60 contract using the other transaction authorities to work with small

businesses might not have worked with the department of defense otherwise. i asked him that exact same question and he told me that there are some constraints in some of the sbir money, that doesn't allow it to do so. i have the specifics you but i would love to come back to you and answer the question what else can this committee do to help move along toward incorporating commercial technology and so forth. i think this is one of the two cases i've seen so far were another authority or taking away some kind of legislation right now might help us but i would love to come back and give you specific examples. >> that would be -- >> tell us what you need. >> i will. >> and also if the small business committee also needs to do anything, please, , we can me on that as well. >> it's very great time with. i appreciate it. >> i would add to your point, small business tends to be an engine of innovation come something left to preserve. the army works hard to meet and

exceed its annual goals for business and we do. the key thing is we talked about the complexity, something we're working hard to deregulate. i would say security clearances are a big challenge for businesses. we have over a year-long process. the other complexity, the other thing i would just mention, this is preaching to the choir, 30 what crs and the uneven funding, if you're small mom-and-pop shop, i'm referring to my experience, it's heartening to survive. we risk losing those folks who may overtime decide to get out of the defense business and go elsewhere. that's a big threat to our supply chains. >> thank you. [inaudible] >> -- relationship with -- >> from the army perspective its equivalent. i think it's something we need to develop, take a long talk about i.t. systems. i think sandra rounds pointed out, it's a very particular challenge given the fact the

technology changes so quickly and now the innovations happen most if not entirely in the commercial sector. i think it's relationship we have to continue to build with silicon valley and then brought it with the commercial sector and make dod acquisition more friendly to the commercial sector. [inaudible] >> i agree with that. dia has some great work, migrating to the cloud. to answer your question from my perspective, i'm leveraging the defense innovation board pretty significantly, and that's how i am tying into silicon valley. i've worked on the subject of software where i think the most opportunity lies for the department both from a contracting point of view as well as developing commercial

techniques. so i speak rotini with the defense innovation board about how to do things differently. particularly eric schmidt i speak a bit with. i was on the phone with the monday afternoon asking them specifically what can i do differently to solve some specific issues. that's helpful. what also are using our diux arm out there to set up roundtables for me to meet with a bright of software companies. that's what i'm focused right now. >> how long has this diux been in business? >> for two or three years perhaps. i can get by jenna specifics on that. i'm not smart enough to know that right now. >> that's not a lot of progress. >> i want to build on it. >> senator ernst. >> thank you, mr. chairman. thanks to all of you for joining us today. we had a great forum this last weekend, the reagan national defense forum, and secretary lord, i'm glad you were there.

secretary esper and i sat together on a wonderful, wonderful panel. i think everybody was engaged at one point or another to those discussions. and it was very helpful to see so many people that agreed on some of the challenges that we have, including the crs as was just mentioned, sequester, our budgeting issues here in congress. and secretary lord, from this past weekend you would mention the need to redirect to our investment to meet the demands of a shifting world. and i agree with that as well. and we do need to invest in innovation to keep our competitive edge over near peer adversaries like china and russia, and that's a topic that secretary esper and i was engaged in on our panel. can you talk about some of the emerging capabilities the department of defense should be investing in to ensure that were keeping the technological edge?

and how do we balance those investments are then with the need that we have to improve our readiness? >> what we're trying to do is strike that balance, talking operational availability of aircraft earlier. we need the readiness. what we are doing is trying to take a very federated system of laps that we have right now between the services, at the rdc, osd and so forth. and align them in terms of modernization. what i mean by that? instead of working on maybe hundreds of projects, were trying to identify specific technology domains that we agree across the department are critical to really reach the overmatch capability we want to have. specifically what does that mean? harden microelectronics, absolutely.

hyper sonics, then the whole cyber area and everybody defines cyber a little bit differently but i'm talking about offensive and defensive cyber. those are three areas where we are committed and were looking at aligning our investments to make sure we make step function change in our capability. >> i appreciate that. [inaudible] >> what we're doing right now is working on elements of that and would love to come back and talk to you about that in more depth. as you know we just did a cyber command and we have a whole series of efforts. >> yes. [inaudible] >> strategy for the last nine years. >> understood. >> as the chairman and send it iressa been very passionate about making sure we are nesting

capabilities together and understanding who was responsible and in what domain. so very, very important. and secretary lord, as well, i purchased recent reports that this distribute, grant system, the software that aggregates intelligence data for our special operators is problematic. it's ineffective is what i've heard from some of those operators. i also understand a number of commercial solutions that may be better and immediately available. in some cases they are already in use. at what point does the department then decide to simply cut its losses and move away from a program that the field is ineffective? >> i don't want to comment to specifically about that because when i set textron we did have one of those contracts, but i will doctor over to an air force program to answer the same type of question. we feel strongly when the environmental conditions and our

adversaries have changed rapidly and we no longer believe that programs that were pursuing can achieve locality that we wish, that will talk about potentially trimming programs and, in fact, general homes and i would just are talking last week about j stars recap. that's a perfect example of where given the contested environment in which we're fighting we're thinking that perhaps there might be better ways to get centers to work closer to the adversary. that's an example of what we came up and said we are strongly considering and want you to understand this is our thought process but want you to be partners with us, these are all the reasons it was secret things i can't get into too many details. that's an example of where we're looking at the current state of events. our current capability, current

program and what we now know about other ways to achieve the and objectives we're trying to initially address. >> so multiple factors involved in the decision-making process, dollars capabilities overmatch. >> absolutely. and it's one that's not taken lightly and all of the different equities within the buildings are considered before we come and take the time of congress is a this is a serious concern of ours. >> thank you very much. [inaudible] >> several years. [inaudible] >> for the recap. [inaudible] thank you, mr. chair. [inaudible] >> i don't have two today but i certainly could get that. yes, we do know. [inaudible] >> on the recap i don't believe it's in the billions but i shouldn't speak without the date

in front of me. we will get back to you. [inaudible] >> thank you, mr. chairman. and thank you to our witnesses for being here today on this important topic. i previously asked what if you think you would make research a priority in your work. you have all said yes. i'm going to start with a really simple question. are you still committed to prioritizing basic and applied research? and will this commitment be reflected in the fy '19 budget? i'm willing to take really short answers like yes. secretary lord? >> yes. >> secretary esper? >> yes. >> yes. >> yes. >> good good. i have another question. endeavor to emphasize the importance of r&d and in recognition of the span of responsibilities, that it was so big that last year this committee directed the position ms. lord now holds be split into two separate positions.

one the focus on research and engineering, and the other that focused on acquisition and attainment. i know you are all working hard to try to implement that. i think having a senior leader focused on future technology is incredibly important. i support that, but one of the real problems in our system is that we struggle to confer promising new technologies in the lab into the field. that gap from the last to the field is some tell known as the valley of death. i am worried that splitting oversight of r&d from acquisition is going to make this problem even worse. let me start with you, ms. lord. after the split how will the department ensure that our research and development program stays closely linked with the departments acquisition requirements? and promising technologies are actually nurtured and incorporated into our record?

>> this is something working on now. in fact, i've had conversations that i am meeting with staffers next week to go over what our preliminary plans look like to have them be thought partners with us. but quite simply what we're trying to do is put at risk, push the risk into the research and engineering side with a lot of prototyping and experimentation so that there are many, many iterations in order to understand the capabilities of new systems and the cost of new systems before pushing them over to the speedy so you're saying get a further along while it is still in the research bucket? >> that's one piece of it. a second piece of it is we are working on streamlined acquisition process where you basically have a flowchart and use a simple list methodology possible to get things on contract so that we are not held up in this loop of you want to

do something but you can't get on contract. these of the transaction authorities are particularly germane because they have helped us. thirdly, we're going to have some common resources between r&d and anf. so it's not as if we have people that are either 100% rn e or 100% and after we will have a lot of those but we're going to have some shared resources that span that gap that allow one group to understand what the other group is doing, this can't be personality dependent. needs to be sustainable as we all move on. so we're going to actually be prototyping and experiencing over two years to make sure we get that right. the construct i have right now, and i will be coming back to recall you on this, is we're going to do a two-year eight quarter transition, and we have a model for what we're going to

do and we're going to tell everyone what that is and we will begin moving towards that model. but we're not being about it. we are experimenting and seeing what works. we are also making sure we got a lot of brains around the table to talk about all the what if. >> i really depreciated. i appreciate the the thought of putting into this. we don't want to lose that space. secretary esper, would you like to add to that? >> yesterday asked a very good question. i would say briefly the army has begun a process where realigning its investment torture six priority areas. for 19-23 we have realigned over $1.13 billion toward s&p. along our priorities. the way we're doing that is as the cross functional teams are stood up and responsible for the specific capability areas, with s and p no line to that capability areas we are actually issued a directive that would require standardized written agreements about what is expected to be delivered from

the s&p community to and after the actual cft leader to begin the acquisition process. >> i'm out of time so i'll ask the other two of you to enter this in question for the record so we can get in writing but i just want to say, we've got to get better at this. anything that has a name the valley of death is not good in terms of acquisition of new cutting edge technology. we can do all the terrific research in the world, but if we can translate that into something that helps our war fighters then we failed at our central mission. >> except for the clemson football stadium. that's known as the valley of death. >> not to me. all right. thank you. thank you. [inaudible] >> what does that have to do with anything? [laughing] >> thank you, mr. chair.

let me bring us back to this topic here. first of all thank you very and so encouraged to get the conversation today. i heard the word crisis mentioned twice. i third a sense of urgency mentioned several times. as an ex-business ex-business s crisis i'm terribly encouraged by what you all are doing. i've met you and had a private conversation. with secretary wilson yester was so gracious talking about major air force base in major piece of technology. want to talk about something a little different. secretary esper, you mentioned first in your opening comment in 1941, and we built up not in years but in months literally weird things come off the production lines literally in months because we broke through everything, because we considered it a crisis. but in 1949 just three years after we demilitarize after world war ii went right back in the same position. that what was a little different, but today with finer cells, under constantine, i

don't have time describing crisis but after 30 years of disinvestment and only one major recap and after 16 years of active combat, i believe we have a crisis. the global situation is more dangerous than it's ever been. we have debt crisis. we have a near rival that's not going to be a full rival that's actual spending more money than we are in real terms. general mattis says there are three phases to solve this problem, and just each spoken about in different ways. there's a three-year term of readiness. we got to get readiness recovered. there is a 15-25 year plan for new technology and recap, and the full bloom of youth innovation and technology with regard to providing for national security. at the same time china is coming online. it's not going to take 15 years before a lot of their new technology is hitting. they've leapfrogged major areas of restrictions. they are bringing product online

much cheaper than we do, much quicker than we do and with far less restriction and government intervention. i would like for you, i think secretary lord, if you will start. i'm concerned with how do we find low cost solutions for the battlefield arcs i'd like the combatant commander represent of army navy and air force is common on well because i'm very concern that we got her eyes out here and we look at where the money is needed and yet these high cost solutions, define f-35s in this battle space, not saying where did that but those types of exams, j starr, you mentioned jay stars admitted to go. great long-term capability. we have a dying platform right now. technology, the panel spaces are changing. that interim, that's a perfect example of where i don't personally see the air force or anybody else really moving toward that interim solution in

a a way that gives me comfort with a low-cost current technology platform that's better than what we have, or cost-effective than what we have but doesn't get in the way take money away from long-term development. would you address that? >> two-part answer to the question. one, i would really like to come back in a different setting, in a classified setting -- >> that's fair. >> talking about some of the programs going on. but secondly, what you're talking about is exactly what diux, school, the rapid capabilities office are doing. we should come back and tell you about some of those successes. what we have to figure out how to do is scale that. right now we haven't scaled it. because probably the best meeting i go to in the pentagon is something called the war fighters seen integration group will reset down every two weeks and we have afghanistan every two weeks, then other two weeks iraq. we talk to the war fighter about

what is going on today and what they need in terms of rapid capabilities. this is what has spun out, an enormous amount of uas equipment and that has been fast. so we can do this but we do it on a small scale, and that's with his reorg is all about in my mind, is getting away from the 5000 process, other than the very complex and what might need some of that. but just use the little bit of process we need to get stuff out the door. >> i would love to from all of you but i would love to have respond to that, all of you respond to the question after this. >> yes, sir. it's a great question. i which is connected couple of dollars. the key is changing culture. [inaudible] >> thank you. >> the key is changing culture. at the end as end of they wento change the culture that's what came out of the acquisition

reform report. that's the most crucial element. the way the army is getting at this is standing at the army command to do just that. take an approach that says let's make the perfect the enemy the better. much prototype, demonstrate, learn. let's go with the 80% the 80% , get something field. the view is if we can stand up the organization the command quickly, get the unity of effort, the unity of command, get some early wins under our belt we can search engine the culture so that we are ready, position posture to begin looking simultaneously of those made in part from threats that you described. >> and how long have we been fooling around with future combat systems? >> well, , thank goodness it's n our rearview mirror now, mr. chairman. >> senator, in the navy, we're taking an approach, and that whole acquisition process which

i cochaired, they're so board i cochair with the commandant, that's really looking at that sweet spot of something that we know that after that we can either accelerate up quickly to give us a break, or there's a problem that we need solution for. we can't wait for the visits as usual. we're seeing about a three-year acceleration for the projects we're getting through those programs on the carriers, one of them, some of the high-speed vessels we are doing. that's a way to give again we should have a menu of options. some needs to be rapid. exactly what we have today, bias, sold commercially, get them in the field tonight. so need to be build a carrier very deliberate, one chicken right because it's going to be around for 40 years. then there's there's the sweet spot and, quite frankly, your committees, authorities and into a foreign '70s rapid prototyping prototyping abbreviated acquisition really gets at that sweet spot. that's what we've been missing.

you've given us the authorities there would not have to go implement those. i think all of us are in the emerging stages of that and in the next two or three years that's going to get at that shoulder thing that we can't wait for 15 years at something that's going to happen in five years from now. >> for the air force we have looked five-15 years and right, the technical risk in the shoulder season is something that all of us are worried about on all of our programs but particularly those that are new ways of doing business. i know you and i have scheduled classified session to go through some of those that are high priority for you. >> thank you all. mr. chairman, thank you for your courtesy, and to the ranking member, thank you. i would think would be very important if we could have december conversation followed meeting in a classified environment at your discretion. thank you. >> i think it's something we ought to pursue. we ought to pursue it. senator donnelly. >> thank you, mr. chairman.

secretary wilson, i wanted to thank you and your staff for unique level of prompting clicky medication. since your confirmation. we been able to work together on some important issues to improve the readiness of our forces and allies of our airmen and their families. one of the challenges will be the readiness of the eight tensely. air force intends to maintain the current fleet for the foreseeable future, i'm concerned about the shortfall for new wings. one of 100 aircraft still still need new wings. in the air force will be forced to grant some of these next years because the current wings have reached the end of the service life. i i understand the many, many challenges the air force is up against right now but this this as a very real impact. what do you see as the air force options on this issue taking to come budgetary challenges, redness requirements and our timelines? >> thank you for the question. the defense authorization bill that the senate passed and the

house passed, and the house appropriations mark add money into the air force budget to retool and open a line for wings. it wasn't in our budget or i know the senate appropriations committee is working on that now. if that comes through we will execute that and get that line started back up so that we can, i think the amount would be the first, it would be the tooling and the first four or five sets of wings for the 18th if you are right we are always managing how to remove to new platforms -- 18. at the same time we try to maintain capability and confirmations with existing antacid platforms. i happen to be kind of a fan myself. >> thank you. secretary lord, appreciate the hard work you put in to get acquisition systems running more efficiently. it's important to get it right as you well know it we discussed

hypersonic systems in the past. i would like to revisit that today. conventional strikers his defense most advanced hypersonic development effort. testifying to this committee earlier this year commander heighten advocate for fielding its capability but in the 2020s. i believe the navy has a vital role to play in feeling cps. do you see that as a priority for the department? and if so, why? >> yes, yes, i see it as a prio. in fact, there are two key programs going on right now. one at darfur and one within lst. removing along so of more than happy to come and have effectively to break it on this. >> if you could provide us an update where you are this effort. >> cannot add one thing. on a hypersonic start to demonstrate for the air force and the navy as well are working

with darpa and is a prototyping experiment effort that is, where using the authorities that you all gave us for experimentation and testing. so we didn't wait for extensive requirements, kinds of things. we we're moving for an experimet for hypersonic and it was through the authorities you gave us. >> secretary geurts, i want to ask you through our defense labs play in the acquisition process. i spent a lot of time, i've instruct how integrated are not on innovating new capabilities to meet navy requirements for testing and evaluating and verifying systems developed for the navy by private industry throughout the acquisition process. i'd love to get your view of defense labs as as a vital plar in the acquisition system. >> yes, senator. in coming to the navy i really impressed with their warfare centers and the labs and how well they are tied. having an organic capability as spatial as we got this rise of

commercial technology and commercial products, that organic capability to take them, testing quickly, perhaps integrates and give away than would be done commercially is a critical piece for us. maybe it is all software for our gunships. that's all written organically. that gave us great flexibility in the special operations command to change requirement on the battlefield. i think it's an absolutely critical piece i think it's a key in this getting to the valley of death because they can help mature, and immature commercial product from a small business, work within and get it so it's in a close to deal of a position for us to put in field. >> thank you. thank you, mr. chairman. >> thank you, mr. chairman. mr. chairman, you know any time with the committee document acquisition or to bring out my favorite prop and remind everybody of the actual pages.

almost 700 pages, ten years to define a handgun. next generation hentgen. i just found out with the update, produces wind down selected, we've got a manufacturer. ten years from now all the army units actually have this gun. 20 years after was conceived by the air force. first off, i think all of you for your service. [laughing] but we know there's no logical basis for something like this come for something straightforward as a handgun. a 20 a process from concept to full deployment within the army. i don't even know what it means for though dod but within the army. senator mccain in his opening comments with the exception of centigrade, he would like free to talk to all of us, i think that's what he said. in all seriousness, as somebody

who has worked in poterba, as somebody who is was working strategic sourcing and acquisition, if i were going into an organization to be retained to fix their acquisition process i would probably be firing quite a few people. now, we operate differently here because jeff constrains how to place on you by congress so we probably need to shine a mayor on us and take some of the constraints but shine a light on that. come to people like me and others who are passionate about this issue so that the chair as empowered the subcommittees to look at this. get us on a fast-track for providing you with relief. and get on a fast-track for removing some of the constraints you placed on yourself. i would just like you respond to that in the remaining time. >> if i may since the hentgen was on the system can let me give you some good news. the handgun was actually fielded last week at my old unit, the 101st airborne. that fielding has begun and it wouldn't senselessly yesterday

your calling senator tom, qualified on the weapon and he was very pleased, the truths of been very happy with what we fielded. it's important to what you're saying is after the years of going to the extent of process, the chief of staff of the army general milley took to heart what congress said, use the legislation that was contained in the ndaa. we had stood up about 20 months ago or so that reinvigorate army requirements oversight council. so he took that case you talking about, refined the process and 18 months later we got to the point where we were delivering weapons. we have managed to turn and bad news story i think into a good news story. i think that that the process leveraging with authorities we have from congress is the basis which he army is heading with regard to futures commit and all the changes we plan a making to prove the acquisition process and make sure we don't see that again. >> from the navy perspective because of been very helpful. we been doing some piloting of

reducing critical performance parameters that give us authority to try when we only had to critical performers parameters. that's simplified the solicitation and then we could work with industry again getting to a much shorter requirement, give us a much broader look. that savior some us going through the normal traditional piece. the authorities you give us again help us try and dry that change because ultimately we got to get the workforce trained and get the culture shifted from what has been to what needs to be. >> secretary kerry wilson and lord respond, we got to keep in mind about the cumulative cost of this we have to take a look at when you have to participate in a virtual for ten years, how much cost of an old we pay for? also want to make sure i'm getting commitment from yalta come up with specific actions that we need to take to

accelerate the process. secretary wilson and then we will finish with secretary lord. >> i think you out of the room when it didn't opening statement i need to get a red ribbon, but this is a letter of invitation and there's a four-page document for the light attack experiment. and it fits nicely in a very slim recent case. >> you get a blue ribbon for that one. >> i will put the blue ribbon on this and provide you a copy. but the final report, we tested for aircraft and the final report arrived last night with me. so it's less than 11 months from an letter of invitation to the final report on testing and we will make a step from there. i actually do have, what else can coasted be helpful, you often ask that. and i do have some suggestions for you but maybe i will just provide those in answers to questions. >> thank you. >> we come up with methodologies to step through a flowchart to

arrive at the simplest and quickest compliant contracting methodology for different procurements. and i think part of the issue with this gun you are referring to is we applied a one-size-fits-all bring it on mentality. and we are trying to learn from our rapid capabilities offices, from diux, from a-10, taking the authorities congress has provided and applied them appropriately to speed things up. up. therefore have to be more cost-effective. thereby allowing smaller companies they couldn't afford to go through this multi-your process to participate. so what we're trying to do is scale all of those activities but we've got to educate our acquisition workforce to be able to do that, and that is a huge issue pics on taking a fundamental relook at how the defense acquisition university operates and we are looking at more one, today sessions where

we teach people skill sets that they use the next day. but we've got to give people the tools and then went to train them. and i'm very optimistic that we can do that. [inaudible] >> because i think we have lots of smart people that are looking for leadership. >> you didn't have smart people before? >> i don't think the focus was on cost-effective? quick solutions, and i don't think people have the intestinal fortitude to come up here and say what needed to be changed. and i think we have an environment now we have a huge number of people that are all aligned on the same objective and we are all very comfortable having a conversation saying this is working, this perhaps has an unintended consequence, and i see a lot of momentum between the building and between the hill to work together to achieve our shared goals.

>> well, i certainly hope you are correct. >> tragic if i can add just one quick thing to the question. he asked about things congress could do. i would sit in the case of the handgun, absolutely to that a team of process we have prototype, tessa, demonstrated, use soldiers, selected the handgun and we had a protest. i think to the degree congress can act on getting rid of fruitless protests would be very helpful. all it does is at time, cost and, of course, delays giving the soldier what he or she needs to be successful. >> senator king. >> perhaps the handgun example can remind me of my fathers advice that even the worst person can serve as a bad example. so maybe we can learn from that. mr. geurts, a couple of limit observation. somebody has a sense of humor to send you here on your third day. it will only get better from here, i can assure you.

mr. chairman, this is a very important hearing and i want to thank you for calling it. and secondly to the entire panel, this is one of the better i would say best earrings i sat on this, i'd i seen on the subt in five years. you are clearly focused on this problem. secretary wilson what you told us about the light attack aircraft and the process is incredibly encouraging, and i hope that you be able to continue along those lines. secretary lord, freud said anatomy is destiny. napoleon said war is history. my modest contribution to that is, structure is policy. and i would like it if you could supply to this committee your organizational chart of the acquisition process. and i'm interested in seeing how many committees that are, how

many approvals, what the levels are. because i do think, i'm not being facetious, i do think the structure largely determines the outcome if you have a complex and cumbersome structure you are going a cumbersome outcome. somebody said the ideal committee is made up of three people, two of whom are absent. and so if you could -- >> i agree with you. structure is policy. and so what we're doing is putting together flowcharts that allow contracting officers to pick the simplest route to get to placing a contract and delivering materials or services. that means you need to understand what you are buying and how the detail of process. and that's what we have our contracting people doing right now, using real-life examples of how we've done this. so that's what i bring you what the flowchart is. >> i really appreciate that, and

do it understand, i think i heard later testimonies, perhaps yours, you are making an effort to keep people in these positions, at least through milestones. one of the problems we have identified is acquisitions people, go and it creates a herky-jerky process. >> we are trying to be much more thoughtful about critical program junctures and aligning people being reassigned with that. now, moving forward, that takes a lot of coordination. i think we are committed to do that. i will say that we all spent a lot of time in one another's offices, and i know i meet with the service acquisition executives on a weekly basis. >> i hope, this is sort of technical government organization but i but i hope n really focus on this issue of how long people stay in a particular office. because if they keep turning over, that's been identified in prior hearings as a significant problem.

>> we are committed. >> the other piece is off-the-shelf technology. mr. geurts, i commend to you that p8 which is the new naval antisubmarine aircraft which i was delighted, i went out to see them building them. it is an off-the-shelf boeing 737 with electronics inside. somebody should be congratulated for not having to invent a new airplane. by the way, at the factory boeing produces one, 737 a day which is an amazing technological feat, in my mind. but the p8 this incident is an example of how we can do this without redesigning everything from the ground up. are you familiar with the program? >> yes, senator. i'm getting more familiar, as i'm in the new job but my background as a special ops guy is leverage whatever is there and put it to use as quickly as possible. i think back to this idea that

we build have to build new, , tt will take some time, right with what we have tonight. a lot of what we can do in the interim is leverage what we have in new and creative ways, leverage what's in the commercial market in new and creative ways, leverage what each of us are doing in this services so the navy is leveraging the air force is work to create a new capability quickly so we don't have to reinvent a whole new cruise missile. this focus on every dollar counts, every day counts, we are in a wharton and we need to think that way and everything were doing whether that's organizational design, acquisition requirements, operational tests, all of that is going to play together and i think as you are saying we all committed to doing that for the nation. >> i have seen the debate and it's been reassuring. two quick points, and you don't need respond for reducing lead time is so much as important as price. we can't maintain our qualitative edge if it just takes too long to get the weapon

into the field. and finally, to reiterate what heaven is said, we want to be partners. and the extent you can tell us what could be changed in terms of regulation come in terms of congressional requirements, please do so. everyone at this desk is committed to helping you to succeed because when you succeed, our country succeeds. >> thank you very much for all the work you're doing. >> i have to respond to the rhetorical question i raised about the importance of maine. it is important because some of those impressive surge in her history, edward muskie, olympia snowe, susan collins, and angus king. and for the record, please know that. thank you. senator mccaskill. >> thank either i'd like to take a moment personally just to thank my fellow, my military fellow, lieutenant sean foster is is lasting. he's been incredibly helpful to my office. i'm very appreciative of the

military are providing us fellas. fellas. sean was thickly terrific. he is leaving to go to the army legislative liaison office so all of us will get to know them better. i wanted to briefly recognize his great work in my office over the last two years. i'm going to miss shot a lot. how many of you have read the november 2017 dod ig top ten management challenges that were issued in november? everybody read it? no? who has read it? >> i glanced over it. i must admit it was in my read ahead package. >> i read it yesterday. >> secretary wilson? >> no. >> i'm going to ask this question. almost everything any of you come up younger ask if you have read ig reports. nothing is more irritating to me and when the really hard work of gao and the ig's identify problems and really make your job easier engines of where you should focus. nobody consumes the product.

it's really important i think that all of you consume this product because they identified ten challenges for management and that's what your jobs are. is management. i'm going to focus on a couple of those today but i certainly would advise all of you to take this report seriously. sustainment problems. the market leveraging for spare parts. they identified in this report that the helicopters used by the services and socom that they have purchased 2.9 million. >> parts for the age 60. dod has. using 2000 separate contracts. awarded the 590 different contractors. over a 12 month period. for almost $400 million.

and often these parts were purchased for different prices, same part. this is the kind of stuff that just makes you want to tear your hair out, , someone who is a former auditor. what roadblocks can you identify, secretary lord, that would keep you from fixing something ridiculous like that? i mean, 2000s separate contracts the 590 different contractors for spare parts for the same helicopter. >> since august i've been doing a lot of data guides to understand the bodywork in the acquisition workforce, and this is the type of thing i can -- i keep coming across. what i find is a couple of trends voted to sustain the. one early on in programs people are not thinking about designing for sustainability. they're not thinking about setting up the right contract

vehicles. it's often rather reactionary for different parts. so as we develop the systems we need a holistic contracting strategy, because contracting is a strategy. >> when something comes online you should begin the process of identifying a handful of contractors because you want the consistency, if somebody falls off your others, and to get the best deal and leverage the best deal for the helicopter. i can't tell you how many times i have on this committee and pointed out inefficiencies between the services for things they are all using. >> that's where a key and now comes into play. we talk about delegating programs, , that's absolutely wt we want to do. where can be very helpful and anf moving forward is taking that horizontal look across the services for similar programs that leverage the same bill of materials and do the types of my

talking about. >> i i don't have much time lef. i'm going for the record i'm going to ask you about reporting contractor has performance, another real irritating thing for me that we have bad contractor to keep business with them with no consequence whatsoever. we never remove them from the list but the last thing i i wod want to touch on is supply chain management risk or in this report i was concerned about the identified risk of an adversary infiltrate the supply chain. and sabotaging come maliciously introducing unwanted function or otherwise compromise the design or integrity. they specific point of the missile defense agency as relates to ground-based midcourse defense system. that's policy of great concern. i out of time, but what i would like for each one of you to do is to speak to me, especially secretary lord, what are you doing to secure the supply chain in terms of the integrity being

compromised? i don't need to explain to any of you what a consequence of that could be in today's world. >> i be happy to do that. fact i just had an early morning meeting with general ashley about every topic in my office this morning. >> i will ask about all of these can management areas that i would recommend the next time you come from check and see if an ig report or gao report has been issued in the last 30 days. i guarantee you i would ask about it. i'm following up, you wouldn't believe this, senator mccain, but when i was with secretary wilson at the air force base in missouri, which was terrific that she visited, she told me that she was trying to hire trainers for the joint strike fighter and she sent over, they sent over somebody to get a prefer hiring at opm. it's at opm told them. they didn't have enough experience flying the joint strike fighter. so obviously the job requirements are imposed upon you i opm sometimes ridiculous

beyond the pale. clearly nobody at opm noah had known the joint strike fighter yet. has that been resolved? i am working to resolve it on my end. >> thank you for your help. we can continue to use them. >> did you get it approved finally? >> that particular what has been approved but my average time piracy thing is not 180 days. >> totally ridiculous. thank you, mr. chairman. [inaudible] >> senator, we have a task force look at of the requirements to hire people. how we can streamline those both regulatory and legislative fixes so that we can get good people on board. >> i want to apologize to senator blumenthal, because obviously there's an event on the floor of the senate which i know he is very interested in,

and so speedy if i may, mr. chairman, i will say that my questions for the record and i hope we would get prompt responses focusing on among other issues on the qe ripley's a program. thank you, mr. chairman. >> well, i think the witnesses and this has been very helpful and again, i hope the message is from this committee to you is that we want to work with you. we also have our responsibilities and we will try to carry those out as well. so i think this hearing has been very helpful, including the recent one we just had and i think the witnesses for the willingness to help, and this crowded hearing will adjourn. [inaudible conversations]

[inaudible conversations] >> [inaudible conversations] [inaudible conversations] >> tonight on c-span at eight eastern, this weeks supreme court oral argument in the case of masterpiece cakeshop versus colorado civil rights commission on whether they can refuse to make a wedding cake

for a same-sex couple based on religious beliefs. then at 9:30 p.m. an interview with counsel to the president kellyanne conway. >> i met you to read about myself. i want you to think about myself. i'm here for something so much bigger than me and that is a lesson that a lot of folks don't understand. i said publicly privately that the only two people who work year who elected to anything. at the names are on lj trump and michael are pinched or if your not the list you want to get with the program or get up. >> watch tonight on c-span, c-span.org and with the free c-span radio app. >> and live to richmond, virginia, where the fourth circuit court of appeals hears oral argument in the case of international refugee assistance project versus trumpet at issue is the legality of the third version of the president's travel ban. this is expected to last about 90 minutes. this is live coverage on

c-span2. this will be on the only. we expected to get underway in just a moment. >> we're about to get started. this is just a friendly reminder that all the council cocounsel consider counsel desk. ..