>> let me answer quickly and ask mr. hale to elaborate. what we have asked, every defense agency and every part of the office of the secretary of defense to do is to read their activities. what are you doing, how should you be doing it, and how many people does it take to do that? we have been able to shed contractors and reduce the number of people working in these areas. we are consolidating some activities. we are eliminating other activities. it really has to do on the civilian side of the department with how do we make the defense agencies more efficient and find savings? that is the basic umbrella. >> this goes to your premise of the earlier arguments which i understand is making ways to find more efficiency in our logistical operations so we can be more effective in our actual defense activities. is that a fair summary? >> yes, sir. the defense agencies have a lot of people and a lot of money. they have grown a lot of the last decade. frankly, we thought it was time to take a fresh look at all of this. i think it has been a long tim

there were -- as mr. hale went through the budget, there were a number of questions for clarification is say, -- clarification's sake, but nothing really beyond that. i have two hearings this week -- one in front of the house armed services committee on wednesday, one in front of the senate armed services carcanet -- committee on thursday. i have every confidence that i will have the opportunities to express myself in great detail about egypt at those two hearings. >> you are talking about the alternative engines. you so that you're one explore all available resources. what exactly are you talking about? is this the line in the sand? >> i will let the statement stand as i put it. there are some of -- there are options available. my hope is, quite frankly, that there will be a debate about this on the floor of the house this week, and that members will address this directly and vote on it. and my hope is that, particularly the new members who are interested in fiscal responsibility will see this as an opportuni

and i think if you go back to testimony four years ago, the person who had the job before mr. hale had begun the planning and execution of getting us to a position where we could comply with the cfo bob. >> mr. secretary pickard, i don't know if we had an opportunity to put it on the screen, but hopefully we will end on the monitors. but if not, there's a chart right over here. it might be rdc, but you can see the screen over here. and i am wondering if you recognize the website at all. and the reason i say, just to refresh your memory, there's a copy of it here. this is your website and this is life. this is not something on the screen that we made a copy of. this is what she was seen at the testimony are talking about in 2007. or if we attended in 2008, 2009, 2010 or if anybody were to go to it today. this website is defined to provide all the information you need to understand the budget and financial management crisis of department of defense. mr. secretary, what it clearly states on their if we'd had the testimony then is that the department of defense would have been in 100%

with that, i'll take a few questions on the budget, and then turn things over to mr. hale and general spencer. tony, this is your bread and butter. we'll go the first. >> and my penny, sometimes. -- panini, sometimes. >> on procurement, the budget last year projected $120 billion in procurement. this year's request is $113 billion, the same request as 2011. there is no growth there. worm dollars migrated to operations and maintenance and health accounts? >> know, you cannot just take the top lines and compare them like that. for example, there have been some procurement programs that have been cut, like the efv, like the slamraam. there are a variety of puts and takes, but there are a number of new investment programs, modernization and procurement programs that are in this budget that went above the original program of record. for example, a new bomber for the air force. five new ships, five additional new ships for the navy. modernization of the ground vehicles for the army. there are a variety of new starts. in some of them, there may not be big procurement dollars, but

mr. chairman. good afternoon, secretary hale, andretary admiral mullin. if this is your last testament before the armed services committee, we are deeply grateful for your service. you win your families have sacrificed a lot to serve in the way you have. i know you are doing everything you can to accomplish the mission and protect our young people. i thank you for that. i come from a private sector background and i have learned that communication is extraordinarily difficult and absolutely essential for organization to succeed. i don't speak for the committee but just for myself, it seems to me that communication between the dod and hask is lacking. i regret that i have to read it that way. it is acute in the second district of virginia with the disk establishment of defcom. i have yet to receive the supporting documents that would help me representing the second district to properly understand and respond to the disestablish meant of jefcom. that is disappointing and i trust we will move forward on the house side and the pentagon side to improve sharply

mr. secretary, admiral mullen and hale. we face challenges ahead that require your skill and tenacity. ment, and then i'll ask approval of a number of nominations and the committee budget. before i do that, though, i just want to say, mr. secretary, i join and concur with senator mccain in his comments about you and your ten year here as secretary of defense. it's been extraordinary number of years. you have brought great capability, objectivity, thoughtfulness to the job, and great strength in independence and courage, and i very much commend you for it. i look forward to many more times when you will be before this committee, and i'm sure that you do too. [laughter] i don't want this to sound like it's kind of like anywhere near the end of your tenure here. i discussed the matter of the budget with senator mckaine, and i -- senator mccain, and now i ask to approve authorizing of our committee march 1 of this year through february 28, 2013. >> second motion. >> the funding resolution is consistent with the joint majority leader and republican leader february 3rd agreement on committee

hale. we very much share your concerns that the marketplace's response to our second request for proposal was not as complete as we have asked. all the issues you delineated in your comments, mr. chair, that we came back to the bettors and asked again was just that, our second request for that information. so the initial rfp cover that information and requested it from the bidders. we did not receive complete bids. rather than coming to you and saying, no complete bids, we are done with that round of rfp, we decided to sit down with each respondent and have a one-on-one with them where we could demonstrate our strong interest in having a perfected bid submitted to us. we were also cognizant of the fact that with the holidays, we might not have all bidders respond if we did not extend the period. so we extended it from december 6 to december 10. we had it staged so that we would be able to bring you the results of the process in a more wholesome way today, but could not because of that need to extend. on the issue of the puc's motivation and interest in evaluating, self-providing the cca services, we have been about the wedding that at the staff level. we do have some informat