i'm also very encouraged with a lot of what frank kendall had to say here ten days ago. and i guarantee we will be more than happy to sit down and go through with him line-by-line, federal regulations to thin them out and to simplify them. of course, along the way, we can't just focus on big d.o.d., we've also got to work with the services up and down the chain of command. you're not going to do this without full participation of the industry partners that dr. hambry talked about. but i think we're at a point where everybody agrees this, is the time we have to act. we started october 29 with a hearing look back at the last 25 years of acquisition reform efforts. three excellent witnesses that came the insights. we're going to continue across government and outside of government. and, again, so far, there's been nothing but eagerness to help. i expect we're going to have working groups across organizations in the coming months and obviously we're going to have hearings directly on this topic. but in addition to that, this topic is going to shape all of the rest of the hea

as frank kendall mentioned here a few days ago, defense acquisition has been a significant issue for us since the revolutionary war but at the very same time dr. hamre has written about this, one of the key factors in our success in world leadership has been that industry is an indispensable partner with the armed forces in defending the country and as he wrote, we have harnessed the energy and creative power of the profit motive to national security. so it is a fundamental strength and yet at the same time it's a persistent problem and most all of the studies that have looked at the problem over the last 50 years have said roughly the same thing. and as i mentioned there has been a number of legislative attempts with unsatisfactory results. so the less on i learned from that, we have to go deeper. we have to not just treat the symptoms but deal with the root causes of the problem that have made it so difficult for us to solve these problems over the last 50 years. we ought to remember, we're talking about a lot of money here. last year the department the defense let contracts for $3

increase the overhead because you get that money back so i was interested in frank kendall's comments 10 days ago when he talked about a study looking at plus cost contracts and there didn't seem to be the kind of difference that one would expect. i think that all of those are avenues that we need to understand better but that too. there hamre's point our history as we have used the profit motive to help make sure that we have the best partnership and the best equipment, the most agile responsive system to did the changing world of garment and it is that -- you know i have no doubt that the contractors will adjust to whatever system we set up, however many contractors are left. what we need to have is a system that encourages them to get the best value and if that means they make a bigger profit than somebody wants them to make that's the way it works. >> in the days passed companies were all a little bit different if you will than the rest of the publicly traded firms. increasingly though the financial market looks set defense the same. you don't get onus points for patriotism or ser

so you know, i was interested in frank kendall's comments 10 days ago we talked about his study looking at firm fixed price contract and cost-plus contract and there didn't seem to be the kind of difference that one would expect. i think all of that are avenues that we need to understand better, but back to dr. hamre's point, our history is that we have used the profit motive to help make sure that we have the best partnership, the best equipment, the most agile responsive system to the changing world environment. and it is that profit -- i've no doubt the contractors will adjust to whatever system we set up, however many contractors are left. what we need to have is the system that encourages them to get the best value. and if that means they make a bigger profit, then somebody wants them to make, that's the way it works spent 30 wall street cited this this as well. the financial community, in the days passed, defense companies were often a little bit different, if you will, then the rest of public they traded firms. increasingly though, the financial market looks at a defense coverage