U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

i 

98–885 2016

[H.A.S.C. No. 114–76] 

ACQUISITION REFORM: 

EXPERIMENTATION AND AGILITY 

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JANUARY 7, 2016 
(II) 

COMMITTEE ON ARMED SERVICES 

ONE HUNDRED FOURTEENTH CONGRESS

WILLIAM M. ‘‘MAC’’ THORNBERRY, Texas, Chairman 

WALTER B. JONES, North Carolina 

J. RANDY FORBES, Virginia 

JEFF MILLER, Florida 

JOE WILSON, South Carolina 

FRANK A. LOBIONDO, New Jersey 

ROB BISHOP, Utah 

MICHAEL R. TURNER, Ohio 

JOHN KLINE, Minnesota 

MIKE ROGERS, Alabama 

TRENT FRANKS, Arizona 

BILL SHUSTER, Pennsylvania 

K. MICHAEL CONAWAY, Texas 

DOUG LAMBORN, Colorado 

ROBERT J. WITTMAN, Virginia 

DUNCAN HUNTER, California 

JOHN FLEMING, Louisiana 

MIKE COFFMAN, Colorado 

CHRISTOPHER P. GIBSON, New York 

VICKY HARTZLER, Missouri 

JOSEPH J. HECK, Nevada 

AUSTIN SCOTT, Georgia 

MO BROOKS, Alabama 

RICHARD B. NUGENT, Florida 

PAUL COOK, California 

JIM BRIDENSTINE, Oklahoma 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

BRADLEY BYRNE, Alabama 

SAM GRAVES, Missouri 

RYAN K. ZINKE, Montana 

ELISE M. STEFANIK, New York 

MARTHA MCSALLY, Arizona 

STEPHEN KNIGHT, California 

THOMAS MACARTHUR, New Jersey 

STEVE RUSSELL, Oklahoma 

ADAM SMITH, Washington 

LORETTA SANCHEZ, California 

ROBERT A. BRADY, Pennsylvania 

SUSAN A. DAVIS, California 

JAMES R. LANGEVIN, Rhode Island 

RICK LARSEN, Washington 

JIM COOPER, Tennessee 

MADELEINE Z. BORDALLO, Guam 

JOE COURTNEY, Connecticut 

NIKI TSONGAS, Massachusetts 

JOHN GARAMENDI, California 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

JACKIE SPEIER, California 

JOAQUIN CASTRO, Texas 

TAMMY DUCKWORTH, Illinois 

SCOTT H. PETERS, California 

MARC A. VEASEY, Texas 

TULSI GABBARD, Hawaii 

TIMOTHY J. WALZ, Minnesota 

BETO O’ROURKE, Texas 

DONALD NORCROSS, New Jersey 

RUBEN GALLEGO, Arizona 

MARK TAKAI, Hawaii 

GWEN GRAHAM, Florida 

BRAD ASHFORD, Nebraska 

SETH MOULTON, Massachusetts 

PETE AGUILAR, California 

ROBERT L. SIMMONS II, Staff Director 

ROBERT DAIGLE, Professional Staff Member 

WILLIAM S. JOHNSON, Counsel 

ABIGAIL GAGE, Clerk 
(III) 

C O N T E N T S 

Page 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Smith, Hon. Adam, a Representative from Washington, Ranking Member, 

Committee on Armed Services ............................................................................ 2 

Thornberry, Hon. William M. ‘‘Mac,’’ a Representative from Texas, Chairman, 

Committee on Armed Services ............................................................................ 1 

WITNESSES 

Lombardi, Richard W., Acting Assistant Secretary of the Air Force (Acquisition), U.S. Air Force ............................................................................................. 7 

Stackley, Hon. Sean J., Assistant Secretary of the Navy (Research, Development, and Acquisition), U.S. Navy ..................................................................... 4 

Williamson, LTG Michael E., USA, Principal Military Deputy to the Assistant 

Secretary of the Army for Acquisition, Logistics, and Technology, U.S. 

Army ...................................................................................................................... 3 

APPENDIX 

PREPARED STATEMENTS: 

Lombardi, Richard W. ...................................................................................... 67 

Smith, Hon. Adam ............................................................................................ 48 

Stackley, Hon. Sean J. ..................................................................................... 58 

Thornberry, Hon. William M. ‘‘Mac’’ ............................................................... 47 

Williamson, LTG Michael E. ........................................................................... 49 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Dr. Fleming ....................................................................................................... 85 

Mr. Turner ........................................................................................................ 85 

Mr. Wilson ......................................................................................................... 85 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. Coffman ...................................................................................................... 97 

Mr. Shuster ....................................................................................................... 92 

Mr. Thornberry ................................................................................................. 89 

(1) 

ACQUISITION REFORM: EXPERIMENTATION 

AND AGILITY 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ARMED SERVICES, 

Washington, DC, Thursday, January 7, 2016. 

The committee met, pursuant to call, at 10:02 a.m., in room 

2118, Rayburn House Office Building, Hon. William M. ‘‘Mac’’ 

Thornberry (chairman of the committee) presiding. 

OPENING STATEMENT OF HON. WILLIAM M. ‘‘MAC’’ THORNBERRY, A REPRESENTATIVE FROM TEXAS, CHAIRMAN, COMMITTEE ON ARMED SERVICES 

The CHAIRMAN. The committee will come to order. 

The committee begins 2016 continuing to focus our attention on 

defense reform to help ensure that the U.S. military is agile 

enough to meet the extraordinary demands of a complex, dangerous, rapidly changing world. Last year’s NDAA [National Defense Authorization Act] included important first steps in our longterm effort to reform the way the Pentagon buys goods and services. In 2016, we will build on those efforts. 

Technology and threats are both evolving very rapidly. Our own 

acquisition system too often undermines our ability to get the warfighter what he or she needs to meet and counter those threats. 

Generating and validating requirements, budgeting for funds, and 

contracting can each take two or more years, even before major acquisition programs are initiated. After major acquisition programs 

begin, it takes 8 to 9 years on average before systems are developed and deployed to warfighters. We cannot have an agile system 

if it takes us years to figure out what we want, how to fund it, who 

to hire even before development begins. 

Today’s hearing is intended to examine a number of questions 

and topics but especially focusing on whether experimentation and 

prototyping new capabilities offers a means of improving agility, 

and what successes the military has had with experimentation as 

well as what obstacles the Pentagon has encountered. 

And it seems to me that as one examines periods of the past 

where there was significant innovation in military, experimentation was a key element, in some ways maybe even the heart of 

that innovation. And it is, I think, a very critical component of 

where the United States needs to go. 

Mr. Smith. 

[The prepared statement of Mr. Thornberry can be found in the 

Appendix on page 47.] 
2 

STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM 

WASHINGTON, RANKING MEMBER, COMMITTEE ON ARMED 

SERVICES 

Mr. SMITH. Thank you, Mr. Chairman. I thank you for both having this hearing and for your leadership on acquisition reform. As 

you mentioned, in last year’s bill a number of changes were made 

in the area of acquisition, and I think you correctly state the need. 

We have, well, more equipment that we need to buy than we 

have money to buy it. The next decade is going to be a major challenge for the Pentagon no matter what with major systems that 

need to be replaced or upgraded and a budget that is less than we 

had hoped it would be and may even be less still. So if we can buy 

that more efficiently, more quickly, at a lower cost, that is better. 

But the challenges, you know, are in some cases, I think, difficult 

to overcome. And we can all sort of give the basic acquisition reform speech, which is, you know, we need to buy it more quickly; 

it needs to be upgradeable; we need to make decisions more quickly. 

But let’s look at the reasons why we don’t. You know, certainly 

part of it is the bureaucracy, and we can look at working on that. 

But part of it also is just the rapidly changing nature of technology. 

If you decide, okay, boom, right now, we are going to get this in 

2 years, and in the middle of that process, there is some significant 

upgrade in a critical technology to the piece of equipment you are 

building, are you better to simply build what you did, accept good 

enough, or to try to incorporate in those new technologies that 

make it and improve it? 

That is not an easy decision to make. It is the nature of the 

world we live in, and I don’t think any acquisition reform process 

is necessarily going to change that. What I am most interested in 

is how we can more empower the individuals at the Pentagon to 

make those decisions with fewer layers of bureaucracy because one 

thing that does slow down the process is the number of people that 

have to approve a program. And it becomes sort of a, you know, 

vicious cycle. The programs take so long that you have more and 

different people in charge or a part of them, and everyone has got 

a slightly different way of looking at it when they become in 

charge, so it changes more and more as you go forward. 

So what I would hope to do is to be able to empower individuals, 

program managers, to make quicker decisions to move forward. But 

if we are going to do that—is the last thing I will say—we also 

have to allow them to make mistakes. 

And I think that is one of the biggest reasons that we have the 

acquisition nightmare that we have, is if a program is purchased 

and it doesn’t work out and it becomes too costly, everybody is outraged. And there are all kinds of expose ́s. And what do we do? We 

say, well, we have got to have more oversight. You know, we have 

got to make sure we don’t make these mistakes again. And what 

more oversight means is more people, more time, and a slower 

process. So we really have to make the choice and say that—you 

know, Silicon Valley loves to say that one of their great things is 

they tolerate failure because they know that is part of the experimentation process. 
3 

We need to learn how to do that a little bit at the Pentagon, empower people, make decisions, understanding they will make mistakes, but putting six layers of bureaucracy over the top of them 

isn’t going to eliminate the mistakes and is only going to make the 

process more costly and more lengthy as well. 

So it is a difficult challenge, one that I am aware we will not be 

able to legislate a magic fix for, but we want to figure out what we 

can do to help. So I look forward to your comments today that will 

help guide us in that process. 

[The prepared statement of Mr. Smith can be found in the Appendix on page 48.] 

The CHAIRMAN. We are fortunate to be joined today by General 

Michael E. Williamson, the Principal Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics, and Technology; the Honorable Sean Stackley, Assistant Secretary of the 

Navy for Research, Development, and Acquisition; and Mr. Richard 

W. Lombardi, acting Assistant Secretary of the Air Force for Acquisition. 

Again, thank you all for being here. Without objection, your full 

written statements will be made part of the record, and each of you 

will be recognized to summarize your comments. 

General, please proceed. 

STATEMENT OF LTG MICHAEL E. WILLIAMSON, USA, PRINCIPAL MILITARY DEPUTY TO THE ASSISTANT SECRETARY 

OF THE ARMY FOR ACQUISITION, LOGISTICS, AND TECHNOLOGY, U.S. ARMY 

General WILLIAMSON. Chairman Thornberry, Ranking Member 

Smith, and distinguished members of the Armed Services Committee, in the interest of time, I will just make a few comments. 

But I would like to start by first thanking you for your continuing 

engagement with the Army on acquisition reform. This is really 

about, how do we get capability to our soldiers quickly, really, the 

right equipment at the right time. 

I also want to thank you for the legislation that supports attracting, training, and retaining quality acquisition professionals. At the 

end of the day, program success is tied to having qualified people 

managing and running those programs. 

I respectfully request that my written statement be made a part 

of the record. In it, I discuss a couple of key areas: First, modular 

open systems architecture; the Army’s ongoing evaluation and experimentation programs and initiatives; and, really, our efforts to 

build a technologically superior force. That can only be accomplished by having an acquisition system that is responsive and 

agile. 

I think Mr. Smith’s comment is really important: technologies 

will continue to change. So one of the things that I have been following this week is the Consumer Electronics Show out in Las 

Vegas, and what concerns me about that is the tremendous amount 

of technology that our potential adversaries now have access to. 

And so having an agile acquisition system, one that allows us to 

not just meet the current set of capabilities but also find technologies that give us a competitive advantage, overmatch capability 

becomes critical. 
4 

Mr. Chairman, distinguished members of the committee, let me 

take this opportunity to thank you again for your steadfast and 

strong support to the outstanding men and women of the United 

States Army, our Army civilians, and our families. This concludes 

my opening remarks, and I look forward to your questions. 

[The prepared statement of General Williamson can be found in 

the Appendix on page 49.] 

The CHAIRMAN. Mr. Stackley. 

STATEMENT OF HON. SEAN J. STACKLEY, ASSISTANT SECRETARY OF THE NAVY (RESEARCH, DEVELOPMENT, AND ACQUISITION), U.S. NAVY 

Secretary STACKLEY. Chairman Thornberry, Ranking Member 

Smith, distinguished members of the Armed Services Committee, 

thank you for the opportunity to appear before you today to discuss 

Department of the Navy, Marine Corps acquisition, and our efforts 

to improve agility and experimentation. 

Your Navy and Marine Corps have a rich history of pushing the 

boundaries of science and technology to ensure our sailors and marines are equipped with the capabilities that they require to perform the full range of military operations that they are required. 

Our ability to maintain our maritime dominance has become increasingly difficult, however, as the complexity, risk, cost, and time 

to develop our weapons system has steadily increased with each 

new generation of technology. In fact, our technological advantage 

is eroding. It is being chipped away at, as other militaries leverage 

access to the rapid global advancements in commercial and military science, technology, and manufacturing. 

The Department of Defense [DOD] has been on a campaign commonly referred to as Better Buying Power, which is focused on and 

making critical inroads to address these trends. As well, we appreciate the work of your committee to understand the issues and to 

enact the measures that will support us in meeting our collective 

objectives to improve upon the cost and time required to develop 

and deliver these leading-edge warfighting capabilities. 

At the bottom line, maintaining our technological superiority requires greater innovation and agility to more than offset our adversaries’ growing capabilities. Really, prototyping and experimentation are an essential element of our strategy. These efforts jumpstart the development process and inform critical decisions on operational utility, technical feasibility, producibility, cost, and risk in 

order to expedite the ultimate fielding of advanced warfighting capability. 

Now, what do innovation and agility look like today? In response 

to the proliferation of ballistic missile threat and turning to the 

proven capability of the Aegis weapon system, the President announced 6 years ago that we would install Aegis at a remote location in Romania to provide missile defense for our allies in the region. 

In the ensuing years, involving sites at Huntsville, Alabama, and 

at the Aegis land base test site in Morristown, New Jersey, the 

Naval Warfare Center in Dahlgren, Virginia, and Wallops Island, 

Virginia, and the Pacific Missile Range facility in Hawaii, the Navy 

and the Missile Defense Agency completed the design, develop-
5 

ment, and test of the most complex to date Aegis BMD [ballistic 

missile defense] baseline to perform the mission and separately designed the facility, and built, assembled, integrated, and tested the 

total system at Morristown; then disassembled, shipped, reassembled, integrated, and the tested that facility on the ground in an 

austere location in Romania; all leading to turnover of the Aegis 

Ashore site to sailors of the 6th Fleet about a week ago. 

In the interim, the Navy had provided ballistic missile defense 

by forward deploying four BMD-capable Aegis destroyers to the 

Mediterranean. Subsequent to their arrival, a new cruise missile 

threat emerged. In response, the Naval Research Lab, working 

with Naval Warfare Center at Crane, Indiana, went to work breaking down the characteristics of the threat and, within a deployment 

cycle, assembled, shipped overseas, and installed onboard the destroyers a transportable electronic warfare system that would effectively counter it. 

In parallel, the Naval Sea Systems Command went to work designing and installing on the destroyers an adjunct system known 

as C–RAM that combines the radar, the Navy’s close-in weapon 

system with the rolling airframe missile to provide defense indepth against the threat. And all the while, the newest Aegis baseline and the Navy Surface Electronic Warfare Improvement Program are being updated with these capabilities to provide the permanent capability. 

Meanwhile, in the 5th Fleet, a torpedo threat emerged that triggered a demand for a torpedo defense for our carriers deployed in 

that region. And what was called the ‘‘Push to the Bush,’’ the 

Naval Undersea Warfare Center in New London, Connecticut, 

working with Penn State Applied Research Lab developed and integrated a series of underwater sensors, an alert system, and an 

antitorpedo torpedo that was installed on the USS George H.W. 

Bush prior to her deployment to provide the first-ever surface ship 

torpedo defense system. And we are now further improving upon 

that capability as we transition to a program of record. 

Separately, in response to a combatant commander’s demand, 

within a 12-month timeline, the Navy converted the retiring USS 

Ponce to perform the mission of an afloat forward staging base for 

the 5th Fleet. And Ponce proved to be the perfect opportunity to 

put to sea the first ever laser weapon system. The Navy is leveraging this experiment to further our development of directed-energy 

weapons. 

And, meanwhile, on the other side of the globe, in the 7th Fleet, 

demonstration by China of a long-range antiship cruise missile, a 

long-range antiship ballistic missile, spurred rapid development of 

capabilities to counter these threats. And within about a year’s 

timeframe, Naval Air Warfare Center at China Lake demonstrated 

the ability to employ the Tomahawk missile against maritime targets through a synthetic guidance, and we are exploring further 

systems with new seekers for that weapon. 

Similarly, we are developing the antiship version of the airlaunched missile known as JASSM–ER [Joint Air-to-Surface Standoff Missile–Extended Range] and will explore further steps to develop a surface-launched version of this missile. And while the details regarding the defense against antiship ballistic missiles are 
6 

classified, we are employing the same basic skills of integrating 

mature technologies into proven systems to rapidly provide the capability necessary to defeat the threat. 

Now, there are several key elements that are common to these 

examples of rapid prototyping and experimentation. First and foremost is a highly skilled and experienced acquisition workforce. And 

we are fortunate to have warfare centers, system centers, and laboratories equipped with world-class scientists and engineers 

uniquely qualified to develop technical solutions to complex warfighting problems, and they are positioned to leverage FFRDCs 

[Federally Funded Research and Development Centers], academia, 

small businesses, and the greater defense industry to execute our 

rapid prototype efforts. 

The Department, with strong support from Congress, is taking 

measures to strengthen this workforce, and we look to further 

those efforts with you this year. 

The second key enablers, the integration of these technical experts with our fleet forces, the collective wisdom of our operational 

forces combined with our technical community’s understanding of 

complex science, technology, and engineering challenges facing 

naval warfare, provide an incredible opportunity to change the calculus of future naval warfare. 

The third key enabler is designing our major weapons systems 

for rapid insertion of technology through the use of modular open 

systems standards. The success of the Navy submarine force’s 

Acoustic Rapid COTS [Commercial Off-the-Shelf] Insertion program, which provided a common open system designed for submarine combat systems and enabled the near-continuous upgrade 

to the systems paced by available technology and a response to the 

threat, has spurred a sea change in naval systems design. 

Navy and Marine Corps systems have since instituted modular 

open system design standards in the development of virtually all 

of our future platforms and major weapons systems. 

The fourth key enabler is a work in process, and that is agility 

on the business side of the equation, primarily budgeting and contracting to match the agility we expect and demand on the technical and operational side. The cycle time of the budget process 

alone is arguably greater than the cycle time of the technologies we 

need to leverage and, in certain cases, the cycle time of the threat 

we need to defeat. 

If we are to improve upon the speed at which we deliver capability to the fleet, we must improve upon the time required to go 

from the identification of a threat or a critical technology and 

touching the hardware and software required to defeat the threat. 

I am confident we have the ability to collapse this timeline while 

yet maintaining the necessary judicious oversight required by Congress on the use of taxpayer dollars. We have demonstrated the 

ability to accelerate capability and response to urgent needs, and 

we are bringing a similar sense of urgency to major program acquisition to deliver capability at much-needed speed of technology. 

The Navy looks forward to working closely with your committee 

again this year as we continue to tackle these challenges, and I 

look forward to your questions. 
7 

[The prepared statement of Secretary Stackley can be found in 

the Appendix on page 58.] 

The CHAIRMAN. Thank you. 

Mr. Lombardi. 

STATEMENT OF RICHARD W. LOMBARDI, ACTING ASSISTANT 

SECRETARY OF THE AIR FORCE (ACQUISITION), U.S. AIR 

FORCE 

Mr. LOMBARDI. Chairman Thornberry, Ranking Member Smith, 

members of the committee and staff, thank you for today’s opportunity to discuss acquisition reform and particularly experimentation and agility. It is my pleasure to do so. 

First, let me say that Dr. Bill LaPlante set our acquisition community on a brilliant course during his tenure, and I—— 

The CHAIRMAN. Mr. Lombardi, would you get that mike right in 

front of your mouth, please. Thank you. 

Mr. LOMBARDI. Okay. Sorry about that. 

First, let me say that Dr. Bill LaPlante set our acquisition community on a brilliant course during his tenure, and I look forward 

to build on that foundation. Through his focused efforts over the 

last few years, the data has shown that we have improved our acquisition performance. Our costs are trending down. We are meeting key performance parameters on our major programs greater 

than 90 percent. And we have garnered over $6 billion in cost savings, using these savings to secure greater capabilities and additional weapons in the hands of our warfighters. 

In this endeavor, we are supported by the leadership of Frank 

Kendall, the Under Secretary of Defense for Acquisition, Technology, and Logistics. Our Air Force efforts are aligned to his Better Buying Power 3.0 initiatives, as well Secretary James’ Bending 

the Cost Curve efforts, all which are designed to strengthen our 

ability to innovate, achieve technical excellence, and field dominant 

military capabilities. 

In today’s complex environment, rapid change is truly the norm. 

We believe incorporating strategic agility into the Air Force’s acquisition enterprise will be the way to capitalize on this dynamic environment. In order to make most of these potential opportunities, 

we are focusing the Air Force’s efforts in three key areas: First, 

strategic planning, prototyping, and experimentation; second, science and technology; and, finally, modular and open systems architecture. 

Over the past 2 years, the Air Force has made great strides to 

improve the strategic planning process as evidenced by the release 

of the visionary 30-year strategy. We are also reinvigorating the 

use of prototype and experimentation with the purpose of providing 

warfighters with the opportunity to explore novel operational concepts, incentivize innovation in industry and government, and reduce risk and lead times to develop and field advanced weapon systems. 

Our Air Force S&T [Science and Technology] Program plays an 

integral role in technology development, often fielding temporary 

operational prototypes to meet urgent warfighter needs. However, 

they are not the final solution but a stepping-stone to further de-
8 

velop a long-term solution that addresses aspects of producibility, 

reliability, and sustainability. 

The Air Force also has more programs than ever implementing 

modular and open systems architecture approaches. Best practices 

to achieve this are, of course, the use of modular and open architecture designs, but also to include the use of standard interfaces and 

the use of block upgrade approaches to fielding. These methods 

should help shorten developmental timelines. 

Such systems are designed to later upgrade, which can allow us 

to better manage our risk and schedule. We identified the advanced 

pilot trainer and the Joint STARS [Surveillance Target Attack 

Radar System] recap programs as strategic agility pilots that will 

utilize these approaches, much like the Long Range Strike Bomber 

is already doing. 

To address the business-related challenges, we are prototyping a 

new acquisition approach called Open System Acquisition. It will 

enable aggressive competition toward rapid prototyping and utilize 

other transaction authority to create a consortium specifically focused on reaching nontraditional defense companies. 

We tested this new process last year as a pilot initiative for the 

Air Force Distributed Common Ground System. Nineteen companies participated. We ultimately awarded it to two teams, both including nontraditional defense contractors who offer their products 

at approximately 80 percent of the original government cost estimate. Our efforts are now focused on formalizing this process and 

applying it to a broader sample of programs. 

I firmly believe that the Air Force acquisition enterprise has and 

is building an even stronger engineering and program management 

culture that values the strategic agility as a core capability. We 

look to capitalize on the complex and dynamic environment of 

today and tomorrow to ensure our airmen have what they need to 

meet any challenge or any threat anywhere in the world. 

In conclusion, I would like to take this opportunity to thank you 

for the authorities outlined in section 804 and 815 of the National 

Defense Authorization Act of 2016 as they support the direction 

that the Air Force and the Department are heading. And I thank 

you as well for your service to the United States and for your continued support to the military and civilian men and women who 

serve our great Nation. 

Thank you, and looking forward to your questions. 

[The prepared statement of Mr. Lombardi can be found in the 

Appendix on page 67.] 

The CHAIRMAN. Thank you. 

I think Mr. Smith—I tend to agree with Mr. Smith. Two key 

things are that we need to thin out the bureaucracy so decisions 

can be made faster; and, secondly, we have got to allow people to 

make mistakes. One way to help with that is to be able to experiment in prototypes so that you see if something is going to work 

before you buy a bunch of them. That is the purpose, I think, of 

what we are talking here. 

So let me ask each of you if you could just outline very briefly 

the three top things that could be done to improve your service’s 

ability to experiment and take advantage of prototypes. 

General. 
9 

General WILLIAMSON. Yes, sir. 

So I want to start with this discussion about flexibility, and I 

would like to finish with an observation on risk. So this notion of 

flexibility applies in a couple of areas within the program, starting 

with early research. One of the challenges that we have is in the 

making sure that you lock down the requirements for whatever 

system. And so when you look at prototyping—and I don’t intend 

to make this a primer—but it is really important to understand 

what type of prototyping we are talking about. 

So if I were [to] describe three, it would really be there is concept; there is developmental; and then there is operational prototyping. So in some cases, we have an idea for a program or for a 

capability that is needed, and these capabilities come in two areas. 

So, one, you want to address kind of a known threat, how can I 

quickly react to a known threat; and the second is, there is a technology opportunity for us to integrate into one of our systems. 

And so as we look at those three types of prototyping, it is, how 

can we do that early enough in the process? How do we have the 

leverage and the flexibility to bring those into programs? And I 

want to highlight something that Mr. Smith said, and that is the 

risk piece. 

The challenge that we have had in the past, sir, is that you want 

to have a direct tie to an investment that is made on the science 

and technology, on the prototyping and the experimentation, and 

you want to have a direct trace to a program of record, and you 

want to make sure that that technology is mature enough so that 

there is less risk in implementation. 

But the reality is, is that in many cases, as I look at whether 

it is a subsystem or whether it is an end item, in some cases, it 

may be difficult to integrate; it may not be mature enough; and you 

may have to walk away from it. 

And so the notion of risk, sir, becomes very important, because 

what I am finding—and I have watched this in our business for a 

while—is that unless that technology is mature enough to plug in, 

we are not willing to make the investment. And if it is not at the 

point where you have a great confidence, it is often hard to defend 

the funding associated, not only internally within the service but 

also at the Department and also to the American taxpayer—— 

The CHAIRMAN. Okay. So if I could summarize that, an improvement you think could be made is the ability to prototype early in 

technology development, even when it may not be connected to a 

program of record, or to experiment with technologies. 

And then a different kind of experimentation in prototype is with 

more mature technology as you are approaching a larger acquisition. So there are kind of two kinds, and you need more ability to 

do the early, more experimental stuff without necessarily having it 

attached to a program of record. 

General WILLIAMSON. Yes, sir, that is absolutely correct. 

And just as an example, so for soldiers, for a dismounted soldier, 

the load that a soldier carries is really important. And so as we 

have more and more electronics on a soldier, one of the investments that we have to make is in batteries, in just purely power. 

And so the investment that we make in efficient battery systems 

I may not be able to trace to every specific program that will use 
10 

it, but there will be a number of programs that will leverage the 

efficiencies that are discovered. I need the capability to be able to 

experiment in those areas and then, as I get more definition, be 

able to apply it directly to a program. 

The CHAIRMAN. Okay. That makes sense to me. 

Mr. Stackley. 

Secretary STACKLEY. Yes, sir. Let me first state what I tried to 

touch on in my opening remarks. We are at prototyping and experimentation in a big way today. What we are doing though is fairly— 

I will call it—episodic. It is being driven by a compelling threat 

that gets top leadership’s attention, and we make mountains move 

to address the threat. What we need to do is take that model and 

incorporate it into a way we do business every day. And so that is 

the journey that we are on today. 

Much of what we need we are already working on. It is the skill 

set that I described, and I cannot overstate how critical section 219 

funding has been to this effort. Section 219 funding is lifeblood to 

our warfare centers, our science and technical community, and so 

everything that you all have done to support that is paying off 

huge dividends, and it is underpinning our efforts in terms of 

prototyping and experimentation. 

You touched on requirements and definition. The requirements 

and definition process is long and laborious, so if we are going to 

make serious inroads, we have to go ahead and march forward 

with prototyping and experimentation on the front end of the requirements definition process and not wait for requirements to be 

defined and then initiate an experiment. 

The prototyping and experimentation help to inform and help to 

better define the requirements. We want the ability to take the risk 

in that phase before we have invested large dollars and committed 

ourselves to a particular system solution. We want to go ahead and 

take those risks, experiment with what is possible, better define 

the requirements, narrow the solution set, get a better understanding of what the cost will ultimately be before we launch into 

the program of record. 

Prioritization is important. What we are doing today is we are 

taking our technical community, and merging it with our fleets, 

and sitting down with—inside of the fleet, they have warfare development centers—and sitting down with the warfare development 

centers and asking them, what are your top issues? We can’t 

launch a thousand projects today. What we want to do is ensure 

that, at least on the front end, our efforts are focused on the top 

priorities. So we are getting those priorities from the fleet to address the—before requirements definition process—the experimentation that will help us all out and then move into execution. 

So let me talk about the things that we need to help out. One 

is money, and I am not coming here asking for money, but what 

I am describing is that the budget process, if we have an emerging 

issue today, we have missed the train for PB [President’s budget] 

2017. In fact, we have already submitted the POM [program objective memorandum] issue sheets for PB 2018. So an emerging issue 

today may or may not make the 2018 budget request. 

So we are sitting here in early 2016 without dollars that are 

available to address an emerging issue or a critical technology that 
11 

creates an opportunity unless we have something like the entire 

Department aligned to reprogram and to do the acts that go outside of the normal budget cycle. 

So what we are grappling with is, how do we make dollars available to either address emerging threats or to respond to available 

technologies that will give us the capabilities that we need? 

The second issue is simply intel [intelligence]. The better we are 

aligned with our intel community, the less technical and operational surprise there is and better informs us in terms of our efforts earlier on. So, quite often, we are responding to the threat. 

The earlier start we get on that through access and alignment between our technical community, the intel community, and the operators, the better start that we will get. 

And the third item I would mention is access to commercial technology. And you see and hear of initiatives that are going on today, 

DIUx [Defense Innovation Unit-Experimental] that the Secretary of 

Defense has announced. 

But the bottom line is, there is much more technology available 

to help us solve our issues than we have direct access to today, and 

this in part is due to a reluctance in certain sectors of technology 

to plug into the large government, the large Department of Defense, because of fear of the bureaucracy that you referred to and 

what that might mean in terms of things like data rights, things 

like layers of oversight, what is referred to as the burden associated with doing business with the government. We are going at 

that. We are trying to pierce that. But that is not going to be a 

quick turnaround. 

The CHAIRMAN. Okay. Thank you. 

Mr. Lombardi. 

Mr. LOMBARDI. Yes, sir. Let me piggyback on both General 

Williamson’s and Secretary Stackley’s comments. 

From the Air Force perspective, what we are looking at is it is 

all about a team support and it is all about a team support getting 

together earlier. There was the discussion about the requirements. 

And what we need to do is make sure—and as we are doing in our 

developmental planning type of activities, is bringing the operator 

and the requirements generator and the technologist and the acquisition community together early on so that we can take a look at 

where the S&T investments are right now, where the gaps actually 

are, where are the needs that the customer actually has, and start 

early on looking across the whole spectrum because it may not necessarily be a material solution. There may be that technology there 

that could rapidly go out into the field, but we need to understand 

how that technology would be operated. And then we need to take 

a look and make sure that we are developing the requirements set 

properly. 

If you don’t do the early prototyping and experimentation early 

on, what tends to happen is we tend to recreate the requirements 

set that was from the previous system that this is replacing. And 

that is the wrong answer. What we need to be doing is really looking forward to, what is this new technology going to enable us to 

do, and how can we employ it in a better fashion? 

And so that is a key area where we have to be able to get the 

teams together early on. And we are working that within the Air 
12 

Force in our enterprise collaboration teams and by virtue of bringing people together on very specific areas at first, and then we will 

take a look across the board. 

But we are looking at, for example, our Air Superiority 2030 activities, which will allow us then to look at what might be the technology that is required later on and then how do we develop the 

CONOPS [concept of operations] associated with executing that, 

and then that rolls into the actual developing of the requirements 

that we can go and build to. 

Piggybacking on Secretary Stackley’s comments on funding, the 

funding needs to be much more flexible. As was stated, we are already building our 2018 budget before the 2017 is even hitting the 

street here. 

And in there, if we are really going to be able to look at that, 

our budget documentation, because this is in the R-docs [requirements documentation], we tend to have to write to very specific 

areas. And as a result of that, we don’t know 2 years out what specific areas that we are really going to want to attack. And as a result of that, then we end up having to come back in for reprogrammings or getting approval for new starts. And so if there is more 

flexibility in the language in the documentation that will allow us 

to start activities with less specific details, that would be very helpful for us. And then, again, as bringing in the use of nontraditional 

players, we have had some very—some good experiences with that. 

I mentioned in my opening statement the Air Force DCGS [Distributed Common Ground System]. You know, what we have done 

is been able to do—by virtue of having open systems of architecture—be able to bring in nontraditional players that we typically 

don’t see in our trade space. And so that is an important area for 

us to reach out to that community, and our DCGS office is actually 

reaching out to DIUx to understand where there are people who 

could actually—companies who could actually support them in developing new capabilities, agile capabilities to bring new capability 

to the DCGS. 

Thank you. 

The CHAIRMAN. Thank you. 

I just mentioned on the flexible funding, I think, for me, I am 

interested in working with you all to figure out ways to do it, especially going back to early prototyping. We have to make sure there 

is the oversight mechanisms for the use of those funds because that 

is obviously our responsibility. But surely to goodness, we can find 

a way to meet your need and also our responsibilities at the same 

time. 

Mr. Smith. 

Mr. SMITH. Thank you. 

I want to talk just a little bit about the program of record, which 

has come up a little bit here. And I view, based on a lot of historical examples, the program of record as being essentially evil. I realize there is a necessity for it. 

But I just want to do a little thought experiment and see if there 

is some way that we can reduce that, and I will use just one example: the expeditionary fighting vehicle [EFV]. We all know that the 

original idea didn’t work out. I won’t get into that. That has a lot 

to do, I think, with what the chairman says about prototyping and 
13 

understanding what you can and can’t do before you spend $8 billion. 

But once that was done, the Marine Corps still had to get a new 

amphibious assault vehicle, and there already exists—I think it is 

four different companies that make four different types of amphibious assault vehicles. And the Marine Corps was able to go out and 

look at them and say: Yeah, I think these will meet our needs. 

Now, the world that I would like to live in is a world where they 

go: That is the one we want, or we want these two; give us 10,000 

of that and 10,000 of that. Now, the world we actually live in is 

even though these things already existed, even though the Marine 

Corps looked at them to make the decision, they had to go back 

and write an RFP [request for proposal] out to these four companies. And they are down-selecting and moving through it. And I am 

sure somewhere along the way, someone is going to say: That is 

great, yeah, but can you make it lighter, or can you make it heavier, or could you put a gun here? 

And by the time we are done with it, this thing is going to wind 

up costing a heck of a lot more than if the Marine Corps could have 

simply said, like I said: Give us 10,000 of those. That is great. Let’s 

go. 

So what is wrong with my scenario that I just described? Why 

can’t we do that? And getting out of that scenario, is there any way 

we can reduce the number of purchases that are made by the Pentagon that require a program of record and simply allow for more 

buying, if you will? This isn’t really commercial-off-the-shelf because we are talking about a piece of defense equipment. You can’t 

go out and buy your own amphibious assault vehicle. 

But it is, nonetheless, you know, commercial-off-the-shelf, or if 

there is an existing piece of technology and you want to buy it, is 

there a way to reduce our reliance on having a program of record 

and all of the costs that come with that? Is there something we 

could do legislatively to help make that possible? 

Secretary STACKLEY. Sir, let me take that question. I have a lot 

of history on this particular program. You correctly summarized 

the expeditionary fighting vehicle in terms of that vehicle prototype 

was in the late 1980s, and the program was canceled in 2009. It 

was difficult. There is a difficult history that went behind that. 

The shift to what is referred to as the amphibious combat vehicle, which is the competition that is currently ongoing—and, in 

fact, we have an award that was done a few weeks ago—— 

Mr. SMITH. Yeah. 

Secretary STACKLEY [continuing]. There were, in fact, four competitors, and we have gone to a down-select. 

Now, let me offer—you made a reference to cost. It would be 

cheaper to just go off the shelf than to go ahead and solicit proposals. I would refute that. Now, what we are doing is we are 

leveraging competition to drive cost down for the vehicle that the 

Marine Corps requires. And, in fact, the cost that we have received 

in the proposals are extremely affordable relative to—much more 

so than what was the EFV and relative to estimated cost based on 

the four contractors outside of competition. 
14 

Mr. SMITH. We don’t have it yet, so I wouldn’t celebrate that itcosts-less thing until we actually have the piece of equipment, is 

the one thing I would say, but—— 

Secretary STACKLEY. Yes, sir. Now up a couple things to go with 

that. One, the structure of the contract, okay, our confidence, it is 

effectively getting us into a fixed-price arena because we are 

leveraging extremely mature technologies, as you described. 

Mr. SMITH. Right. 

Secretary STACKLEY. We are leveraging mature technologies not 

just to have high-cost confidence but inside of the contract to give 

us what effectively is going to perform like a fixed-price type contract. 

Second piece is, we are going after this capability in an incremental fashion, which reduces risks, and we are going after it in 

two separate increments. The first increment will give us capability 

that we will be able to put to work early on, but ultimately we 

want Increment 2. 

What we have been able to do through the competition in identifying what Increment 2 capabilities will be is we have been able 

to drive the competitive field to offer vehicles that come as close as 

possible to an Increment 2. And, in fact, the potential is there that 

this initial vehicle that we award will be able to take us from Increment 1 to Increment 2 without any further follow-on development effort. 

So the entire approach here was to leverage mature technologies, 

take the industrial base that is out there today producing combat 

vehicles, lay in the requirements that are unique to the Marine 

Corps, do it in such a fashion that it is incremental but make it 

clear where we ultimately need to go and to let competition drive 

cost down and drive the competitive field to deliver those capabilities as early as possible. 

We think we are exactly where we should be. And the only thing 

we regret is that the first go-around, going back to EFV, didn’t take 

a similar type of approach. 

Mr. SMITH. That is a good explanation. I remain skeptical, and 

we will talk in 3 or 4 years when we see how all of what you just 

described plays out. But I still think, you know, shifting toward— 

and obviously this is a rather significant piece of equipment that 

I referenced. There are smaller things, and one of the things I 

would like to emphasize is buying more commercial-off-the-shelf. If 

there is a product out there that will do the job, let’s just buy it 

and do the job because you can have competition in that environment too. I mean, even in this case, if there are four vehicles out 

there, there is competition right up front. I don’t see why you have 

to have an RFP and a program of record to get those companies 

to compete. But I take your broader points, and we will see how 

it plays out. 

Secretary STACKLEY. Sure. 

Mr. SMITH. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Mr. Forbes. 

Mr. FORBES. Thank you, Mr. Chairman. 
15 

And we need to first acknowledge the effort that you and the 

ranking member have put in this whole area of acquisition reform. 

Thank you for that. 

Gentlemen, thank you for being here. All three of you are incredibly qualified, talented individuals, and we just appreciate your 

service to the country and being here. 

Let me tell you one of my most frustrating points when we are 

talking about acquisition reform, especially when you look at 

emerging technologies, capabilities, and threats. People come in 

here, and they give us the scenario. They say: In a best world, we 

have a year at the Pentagon to prepare a budget. Then it takes a 

year over here in Congress. And then we start trying to utilize that 

funding, and some of the stuff we are looking at has a shelf life 

of 3 years. 

But when I watch speeches outside of this committee room and 

try to listen to the changes they want, here is what I normally 

hear: A restating of the problem; secondly, I hear people say something needs to be done; then they say we are studying it; then they 

say we need a stable budget; then they will give some examples. 

But, oftentimes, we don’t get the specificity we need. 

Mr. Stackley, you have had incredibly good work. You have been 

there 7-plus years, I guess, now. Based on your personal opinion 

and from the study you have had and what you have done, does 

the Navy need to establish something similar to the Air Force’s 

Rapid Capabilities Office? 

Secretary STACKLEY. Let me describe it this way, sir: The Navy 

is going about that. And the way I would describe it, the Air 

Force’s Rapid Capabilities Office [RCO] emerged about a little bit 

more than a decade ago and specifically focused on ISR [intelligence, surveillance, and reconnaissance] missions and special aircraft. And so it has a unique focus. 

We are looking much more broadly than that, although there will 

be something that will closely mirror the Air Force RCO going forward for unique missions, particularly in the black world. 

But much more broadly, we do have a very strong technical base 

that we need to better leverage, and we need to marry it up more 

tightly with the fleet and the Marine Corps to short-circuit that 

longer process that goes through the requirements definition, the 

budgeting process, to ultimately get into a program of record. 

Mr. FORBES. So it would be your opinion that we need something 

that may not look exactly like the Air Force’s Rapid Capabilities 

Office, but we need something similar to that in the Navy? 

Secretary STACKLEY. Yes, sir. And we actually do that today. 

However, we do it almost in an ad hoc fashion. And so what we 

are doing, and that is my organization alongside CNO [Chief of 

Naval Operations] and the Commandant, what we are doing is we 

are aligning our teams, and it is going to be one team, to bring the 

best technology and technical experts that we have to bear against 

the highest priority requirements that are being defined by the 

fleet today. 

And then let’s launch now into experimentation and prototyping 

on how to deal with either that threat or that critical technology 

while in parallel the machinery starts up for requirements definition and budgeting so that by the time we get into that cycle, we 
16 

have a firm understanding of the technical, and we have a much 

greater understanding of the cost, and we have started to shape 

and point our industrial base towards the solution. So we will both 

make progress in the interim and then reduce the amount of time 

it takes on the back end to ultimately field the longer term solution. 

Mr. FORBES. So it would be fair for the committee to expect that 

we would perhaps be seeing something in a more formalized structure like that Rapid Capabilities Office in the coming months? 

Secretary STACKLEY. Yes, sir. I think you can expect that Secretary, CNO, and Commandant will do a more formal rollout of 

this construct. 

Mr. FORBES. You also mentioned in your prepared testimony that 

one key enabler of innovation is funding expressly for rapid prototyping, experimentation, and demonstration. Will we be seeing any 

of that in the 2017 budget, and if so, where shall we be looking for 

that? 

Secretary STACKLEY. It would be preemptive of me to be discussing what is in the 2017 budget. However, most of these efforts 

are in an account called 6.4. It is in the R&D [research and development] account 6.4. Right now, our 6.1 through 6.3 funding, which 

is sponsored by the Office of Naval Research, is a very mature 

budget process, and I think you all are very well familiar with it. 

When you get beyond 6.3 and get into 6.4 and beyond, now you 

are into programs of record, what we want to do is carve out the 

ability to increase our prototyping experimentation inside of that 

6.4 account, and we will discuss it in greater detail when the budget comes across. 

Mr. FORBES. Thank you, all. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Mrs. Davis. 

Mrs. DAVIS. Thank you, Mr. Chairman. 

And, really, just following up with everything that has been said 

previously, can you pinpoint to some extent—and I want to applaud you because you have the answer basically. I mean, you 

know what needs to be done. What is really getting in the way of 

doing that? 

How much responsibility does Congress bear? What can we obviously do better? And you have cited the 6.4 accounts. I don’t know 

whether in terms of other research and development, you know, be 

it DARPA [Defense Advanced Research Projects Agency], people 

are aware of what is done there. What else—where else can you 

drive this? 

Secretary STACKLEY. Yes, ma’am. If doing that is associated with 

the discussion we just had on funding, the issue is budget exhibits 

require that we define exactly how we are going to use the taxpayer dollars so that you all can authorize and appropriate and 

conduct the oversight. 

The nature of the beast, whether it is emerging threats or available critical technologies have become available, is that it is hard 

today as we put together our POM 2018 issue sheets. We cannot 

predict what that threat will be in 2018 so that when we are in 

execution we have dollars available to go directly to the threat. 
17 

And so we are looking for, as General Williamson described, a degree of flexibility. And we are not talking large dollars, frankly, because we are talking prime-the-pump levels of funding that let us 

get the technical machinery moving aside the fleet to address these 

early experimentation efforts as soon as we see a technology or a 

threat that we want to address. Not large dollars, but defining it 

so that you all have confidence in terms of being able to authorize 

and appropriate to those dollars has been a challenge in the past. 

Mrs. DAVIS. General, did you want to speak to that? 

General WILLIAMSON. Ma’am, I just want to talk a little bit about 

the flexibility, and I am going to use an example, of which hopefully it is not overly simplistic, but I just want to give you this example. 

So this is not kinetic. So this is not about buying a new gun. But 

as I am progressing with a combat vehicle or even a tactical truck, 

and if I discover through some of the applied research or industry 

comes up with a better transmission, I am on the path where I am 

building a system. But a year into that, someone says: There is a 

great capability out there, a new transmission that will reduce fuel 

requirements by 50 percent. Because of the way we earmark—that 

is the wrong word for you. I apologize. 

Mrs. DAVIS. Don’t want to use that word here. 

General WILLIAMSON. I apologize. But the way we identify how 

funding is going to be used, it will be a year before I can flex within my budget for that program to start doing integration work with 

that new engine. 

Mrs. DAVIS. Yeah. 

General WILLIAMSON. And so if I have some leverage, if I have 

some flexibility, say, great technology, because of things like modular systems architecture, I can start doing the work to plug that 

in now. I don’t have to wait. 

Mrs. DAVIS. I would hope that everybody sees that as very 

commonsensical, to be able to shift when you see a need and be 

flexible. And I think what would be helpful—and I think you are 

already working with that, Mr. Secretary—is how then you define 

that perhaps in a budget process so that you have that ability to 

do that. 

And I guess what I am looking for is, where are still the obstacles to doing that? You know, we have been in the situation now 

for quite a number of years, and I think, just as Mr. Forbes mentioned, we kind of keep hearing the same thing. You know, we have 

got a problem. We need to fix it. We need to redefine it. We need 

flexibility. And how can we unstick this a little bit more so that 

you have what you need or without even waiting until the next 

NDAA? 

Secretary STACKLEY. Yes, ma’am. Well, let me commit to you 

that when the budget comes over, we are going to be coming over 

with the budget and sitting down with the authorization and the 

appropriation committees to lay out an approach and a process that 

will give you all the confidence and the insight and the oversight 

in terms of how we would execute funding to increase the degree 

of experimentation and prototyping that we are describing here 

today. 
18 

Mrs. DAVIS. And you don’t feel you can do that with existing legislative authority? 

Secretary STACKLEY. Well, actually, I think we can. What we 

need to do is convince the Congress that it has the degree of oversight and insight that it needs to do its job. 

Mrs. DAVIS. Okay. Thank you, sir. 

The CHAIRMAN. Chairman Davis—Chairman Miller, sorry. I was 

thinking about Mrs. Davis’ comments. Chairman Miller. 

Mr. MILLER. Thank you very much. 

I am wondering why you feel like the need for flexibility—and I 

understand for rapid acquisitions. In fact, Mr. Lombardi, you 

talked about flexible funding, and then, Mr. Stackley and General 

Williamson, you both have referred to it. There probably was a reason at some point that Congress kind of stovepiped the money in 

the way it comes to you. Any idea what that reason was? 

Secretary STACKLEY. Sir, I can just give you one example, and 

this goes back probably 20 to 25 years ago. We had a thing called 

the M account. And the M account was a management account to— 

it had a degree of flexibility in it as a management reserve effectively for the Department. 

And Congress determined that it effectively did not appreciate 

the way the Department was managing the M account. And separately, as pressing needs emerged, the choices were between having 

dollars parked into an M account or having those dollars go toward 

specific budget line items. And so the M account eventually went 

away. That was a large account in terms of providing management 

reserve. 

Since then, there has been a reluctance to put any dollars into 

the budget that don’t meet very well-defined, disciplined definitions 

of how the dollars will be used. And I think we can get past that. 

I think we can get past that. And I am looking forward to when 

the budget comes over, sitting down and talking with the committees and your staffs to work through this. 

Mr. LOMBARDI. I would like to just add on this. And I think, dating back to about 20 years ago, I think there was a concern with 

respect to coming out of accounts like this where we were actually 

starting program of records. 

And so I think, as Secretary Stackley says, I think it is very easy 

for us to come back together with a plan that would allow for all 

of us to have the flexibility that we need and the proper oversight 

for both the appropriation and the authorization committees to 

make sure that we are executing the funds in a logical and a very 

meaningful manner. 

But I think that a lot of what has been happening in the past 

was based upon a fear of us actually launching off on program of 

record based upon doing a certain type of prototyping early on. 

General WILLIAMSON. Sir, just to comment, I completely support 

the comments made by the other services. I do want to go back to 

something that was said earlier though, and that has to go to the 

culture in terms of risk tolerance and the culture of risk. 

So we all sit around and talk about the various successes that 

come out of Silicon Valley, but what we don’t often do is talk about 

the number of failures that occur. And so one of the things that has 

to happen is we have to not only come with the plan that has been 
19 

described and the appropriate due diligence to support that plan, 

but we also have to be willing to, if we want to push the envelope, 

if we want to have a capability that is not the current state of the 

art that our adversaries have or have access to, but if we are willing to push the envelope, there has to be some acknowledgment 

that there is risk associated with some of these experiments. 

And that culture, not just here, sir, but within our own service, 

within the Department, it has to be something that we are able to 

kind of quantify that risk but also appreciate that if you are going 

to push the envelope, there will be times where it doesn’t come to 

fruition. 

Mr. MILLER. I think most of us recognize that there is a need to 

take the risk, and I think we are willing to do that. I think the 

issue is between risk and waste, and that is where the biggest 

problem, I think—but is it that difficult to go through the reprogramming process here in Congress, or is it difficult at DOD to 

go through the reprogramming? 

Secretary STACKLEY. I would say it is difficult, both sides. It is 

difficult inside the Department of Defense because it starts with 

you identify a need, then you have to identify an offset. We don’t 

send over reprogramming requests on the Aegis typically, and so 

it is a fairly long cycle within a cycle and it is a tough process. 

And then when it comes over here, it gets the appropriate scrutiny. So it is an element of time, sir. And relative to the annual 

budgeting process, which, as we have described is about 2 years 

from the identification of a need when you actually get funding, it 

is probably half of that. But it is also funding that you cannot rely 

upon in terms of building a plan around to go ahead and get started executing. And so it is a degree of uncertainty that comes with 

the process. 

The CHAIRMAN. Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

And thank you to the witnesses for the hearing today. 

In the last defense authorization bill, we actually moved forward 

on a series of reforms. And, again, I salute the chairman and ranking member for their hard work in terms of some of these 

streamlinings of the acquisition process. 

Another thing to build in was to revisit the National Sea-Based 

Deterrence Fund to expand the range of acquisition tools available 

to the Navy as they prepare to move to the next critical stage of 

recapitalization of our ballistic submarine fleet, which, again, has 

been consistently identified as one of the top priorities of our national defense. It is also one of the highest cost programs that we 

are facing. 

In the 2016 NDAA, we expanded the fund to include authorization of incremental funding authority, economic order quantity contract authority, and advance construction authority. And, as Mr. 

Forbes knows, last month, the Seapower Subcommittee held a 

hearing on acquisition efficiency in Navy shipbuilding, and CBO 

[Congressional Budget Office] and CRS [Congressional Research 

Service] testified. Among their findings, both experts testified that 

using the fund with these new authorities would generate up to a 

10 percent reduction in program costs. So we are talking about 

$100 billion program; 10 percent is real money. That is almost the 
20 

equivalent of getting 12 boats for the price of 11, according to their 

math. 

So, Mr. Stackley, I just wanted to ask you if you have considered 

the benefits outlined by CBO and CRS in the use of the fund as 

it exists today with the new authorities that were enacted in the 

NDAA 2016 bill. 

Secretary STACKLEY. Absolutely, sir. First, the Department of the 

Navy greatly appreciates the way this committee has worked with 

us in terms of identifying the challenges associated with the Ohio 

Replacement Program [ORP] and helping to put tools in the toolbox 

to address those challenges. As we have discussed in the recent 

past, the Navy is working closely with industry, both Electric Boat 

and Newport News, in structuring an approach to attack the affordability side of the equation. 

The authorities that you have put in place, they will be extremely helpful. What we need to do is come back with a comprehensive approach, a more comprehensive approach, that explains to Congress how we are going to use these authorities, what 

the benefit we all receive from that, and how this is going to ultimately drive down the costs to recapitalize that critical asset. This 

will be an important part of our dialogue in the 2017 budget cycle. 

Mr. COURTNEY. So in terms of the ORP acquisition strategy and 

budget outlook, the authorities that we enacted last year—or in the 

2016 bill—they are something that your office is definitely looking 

at in terms of that plan that you are talking about working with 

us on? 

Secretary STACKLEY. Absolutely. The nature of the beast is we 

are still in the design and development phase, and the authorities 

that we are talking about really apply to the procurement phase, 

and so we have lead time in terms of structuring. So, for example, 

when we talk about EOQ [economic order quantity], we are all in 

in terms of EOQ. It is going to be a 12-boat procurement. There 

are certain things, like missile tubes, that we are going to stand 

up an industrial base that is going to make 12 boats worth of missile tubes, and then it is going to stand down. So if we stretch that 

out over a 15-year period, the only thing we know for sure is that 

will be the most costly way to procure missile tubes. So we want 

to look at how do we leverage EOQ type of authorities and then 

batch build the missile tubes in such a fashion that we will be buying them potentially ahead of need, but we will be buying them in 

the most affordable manner and with the least impact on the industrial base. 

Mr. COURTNEY. Good. So, again, because that was one of the 

components that we wrote into the law last year, that is encouraging to hear that the Pentagon is embracing this. And the only 

observation I would make is that the fund has been sort of 

critiqued in some quarters as sort of a gadget that doesn’t by itself 

generate savings, that the authorities are really where the money 

is. But what I would just note is that what we were able to do in 

this committee was to sort of package those authorities under the 

umbrella of the fund, which I think really made the legislative 

process, which has also got its own sort of cumbersome challenges, 

move smoother. So I think unpacking them and trying to do it sort 

of in a one-by-one process in terms of these authorities is going to 
21 

potentially undermine our ability to keep this moving forward, 

again, in the most intelligent, cost-effective manner possible. So, 

again, thank you for your comments this morning, and we look forward in the next coming months to making sure that we give you 

those tools in the tool box, to make sure that this program, which 

is going to be a huge fiscal challenge, gets done in the most efficient and cost-effective way possible. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Mr. Wilson. 

Mr. WILSON. I want to thank Chairman Mac Thornberry for his 

promotion of acquisition reform, experimentation and agility. I believe he is really making a difference and with your help. 

In particular, Secretary Stackley, what lessons can you draw 

from the experience of building a prototype laser weapon system on 

the ship Ponce that might illustrate the value of prototyping as 

well as the limitations? 

Secretary STACKLEY. Yes, sir. Thanks for the question. The laser 

weapon system on board the Ponce, size-wise it is what we would 

refer to as a 30-kilowatt [kW] system, so it is probably at the lower 

limit of lethality. But what we are able to do by experimenting 

with IT is to understand, how does the laser perform in a maritime 

environment, which has always been a risk with this type of technology? We are learning, what do we need to do to scale up from 

30 kilowatts up to notionally 150 kW, which is a more lethal size 

weapon system? What does that mean in terms of shipboard, space, 

weight, power, and cooling requirements? What is the performance 

of the system against moving targets, both fast-moving surface targets, as well as aerial targets? And then what is the ship system 

and, most importantly, the operator perspective in terms of utilizing this and coupling it with other self-defense capabilities on a 

ship? 

Our next step is today we are taking the lessons learned from 

the Ponce, and we are evaluating and exploring a 150-kilowatt system to go onboard a DDG–51 class [guided missile destroyer] for 

experimentation and prototyping to determine, is that the right 

size, shape for a system that will provide the degree of lethality 

that we are looking for out of this directed-energy system? 

Mr. WILSON. And speaking of systems, the success of a nuclear 

Navy, with submarines, with aircraft carriers, other ships, with the 

reactors that are located, what research is being done to promote 

small modular reactors [SMRs] that can be used at military facilities around the world to make them independent of electrical grids? 

Secretary STACKLEY. Sir, I know there are studies that have been 

done on this. I would have to get back to you with a more thorough 

response to give you the results of those studies. 

[The information referred to can be found in the Appendix on 

page 85.] 

Mr. WILSON. The success, again, of the Navy for decades should 

be replicated with SMRs, and I wish you well. 

For each of you, General, thank you. 

Mr. Lombardi, thank you for being here. 

What challenges or limitations do you see from the acquisition 

community in pulling good technologies developed by science and 
22 

technology, S&T, investments into the acquisitions programs of 

record? 

General WILLIAMSON. Sir, I would say that is consistent with 

some of the discussion that we have had today in that how do I, 

one, have more awareness of those programs? So the work that is 

being done out in Silicon Valley in terms of exposing some innovative companies to our requirements I think is a great start. The 

problem for us is, because I am not completely sure, how do I create head room within programs so that I can bring those in as I 

discover them and plan for them? I think that is the biggest challenge for us right now, is identification and then the ability to have 

enough agility to fund them as we discover them into a program. 

Mr. WILSON. I am glad you mentioned Silicon Valley. I am very 

grateful for the efforts of Secretary Carter working with Silicon 

Valley to address the challenges of cyber warfare and conflict. 

Secretary. 

Mr. LOMBARDI. Yes, sir. I think, as we have talked before, is the 

importance of being able to bring together the technologists and the 

operator early on to really kind of understand where the real investments need to be in S&T to take care of near-term needs, but 

also look at where the long-term gaps are and where we need to 

be investing our S&T dollars. So I think by virtue of us being able 

to start more collaboratively bringing in the operator and the S&T 

with the acquisition community, we can start being able to bridge 

that gap. 

But there is still, as we tend to call it, the ‘‘valley of death’’ going 

from S&T to a program of record. And by virtue of bringing the 

teams earlier together—because, as I said earlier, development and 

planning to us is a team sport, and you have got to be able to work 

together to determine whether the emerging technology can actually take care of the given need; are there CONOPS that can be 

done, or do we actually need to do increased investment? And that 

in turn helps them on the development of their requirements for 

us to be able to turn that technology and bring it forward into the 

program of record. 

Mr. WILSON. Thank you. 

The CHAIRMAN. Ms. Tsongas. 

Ms. TSONGAS. Thank you, Mr. Chairman, and thank you to all 

of our witnesses today. And in particular, I would like to welcome 

you, Mr. Lombardi. As we know, I came to know you in your work 

at Hanscom Air Force Base, and it is great to see you here in this 

new capacity. I appreciated very much the work we were able to 

do then, and I know coming from the Massachusetts environment, 

you do recognize the opportunities presented by working with the 

academic communities as well as the private sector and the federally funded research facilities and the opportunities that that creates given the rapid-change environment we live in. 

I wanted to revisit some of your testimony and what you talked 

about the Air Force’s efforts to contract with companies that have 

not traditionally worked with the services. I know this was a pilot 

project that actually took place at Hanscom. I am just curious as 

to what your experience was with this type of outreach, and what 

are some of the best practices and lessons learned that came as a 

result? Given the universe of companies that are out there, I am 
23 

also curious as to how you identified and solicited those companies 

to become part of this effort. 

Mr. LOMBARDI. Yes, ma’am. As I mentioned—and you are correct 

that this was all done as part of the team up at Hanscom, the PEO 

[program executive officer] up there, Steve Wert, as you are well 

aware. The DCGS program, what really helped us in being able to 

reach out to nontraditional companies was actually the fact that we 

had gone in and opened up the architecture with respect to the 

DCGS system. And by virtue of doing that, that opens up the capabilities of really going out to the nontraditional players because 

oftentimes, the nontraditional players are the ones who are going 

to provide you near-term really relevant applications or smaller 

components or anything. And so in the case of the DCGS, what was 

really interesting on this was that we were able to take a process 

that was actually—our DCGS is actually a system that takes in the 

intelligence and disseminates it out. It is disseminated out to not 

only our U.S. forces, but also coalition forces, and so the security 

levels are different. So what was happening was is this was a manual thing that was done over a half hour to an hour to be able to 

essentially take out elements of the reports to make sure it met 

each of the different players, different partners, and so by virtue 

of doing this application, we were able to get that work done in a 

matter of 30 seconds. 

Ms. TSONGAS. But how did you identify the people you brought 

into this effort? How did you reach out to them? 

Mr. LOMBARDI. By virtue of going out and doing this as ‘‘other 

transaction authority,’’ we were able to reach out to and build a 

consortium, and of that, the consortiums were all playing together, 

and the consortium was built with traditional and nontraditional 

players. And by virtue of that, then they started teaming together, 

knowing where the real capability of each were, and it came together into—as I said, there were originally 19 different companies, 

but they then went into about 13 teams. And, ultimately, we have 

got us down to awarding of two. So it was really the use of the 

other transaction authority that allowed us to reach out to consortiums that were building upon themselves in this matter. 

Ms. TSONGAS. And this was an experiment, so you weren’t really 

wrestling with the companies’ concerns that Mr. Stackley referenced about nontraditional defense companies that don’t know 

how to wrestle with the data rights issues or are concerned about 

them or the oversight issues. It was really more an experiment 

that sort of put those things aside? 

Mr. LOMBARDI. It was an experiment from that standpoint, but 

I think there is an opportunity here and particularly as we look at 

more and more of our systems having this open architecture approach, where we will be able to reach out and get to people who 

are really more of the nontraditional players because, in that case, 

we are going to actually own the standards. We are going to own 

the interfaces. We are going to own how everything is integrated 

in together. So by virtue of doing that, we can reach out to a better 

population of players to be able to support us. 

Ms. TSONGAS. And you are taking this into account as you formalize this process and broaden it? 

Mr. LOMBARDI. Yes, ma’am. 
24 

Ms. TSONGAS. Thank you. 

I yield back. 

The CHAIRMAN. Mr. Turner. 

Mr. TURNER. Thank you, Mr. Chairman. 

Mr. Lombardi, now the focus of this hearing is on experimentation, agility, and ultimately delivering combat capability to our 

men and women in the field. With that in mind and for over six 

decades, the Air Force’s Big Safari program has been an extraordinarily successful, agile organization, and it has in the past been 

a go-to organization when capability was needed in a short amount 

of time. 

Yet it appears over the last few years that that sort of agility has 

come under some stress, and Big Safari is operating more like the 

mainstream organizations rather than trying to leverage and replicate that agility into those organizations. As one example, we understand that the contracting function has been moved out from 

under their organization, just as it has been across the rest of the 

Air Force. It would seem to many that aligning all elements of program execution under a single entity would make more sense. 

Looking back on what made this program successful, isn’t the 

Big Safari program a model for some of the acquisition reform that 

we clearly need and are looking for now, and is this an acquisition 

culture model that we need to fully protect and to foster? 

Mr. Lombardi. 

Mr. LOMBARDI. Yes, sir. Big Safari has and continues to provide 

great capability for our Air Force and our warfighters. And you are 

right; the model has been one that has been very agile to be able 

to provide capability out to the warfighters in a very rapid pace. 

It is a model that we should continue to foster. I will have to get 

back with you, sir, with respect to the taking of the contracting element out of the Big Safari area, if you don’t mind, because I would 

like to be able to study that a little bit further and understand 

what were the reasons associated with that. 

Mr. TURNER. I would appreciate that because, obviously, if you 

look at its success, we don’t want to diminish that success as we 

might look to it as a model. 

Mr. LOMBARDI. Yes, sir. Let me look to that, and I will get back 

to you. 

[The information referred to can be found in the Appendix on 

page 85.] 

Mr. TURNER. Thank you. 

The CHAIRMAN. Mr. O’Rourke. 

Mr. O’ROURKE. Thank you, Mr. Chairman, and I also want to 

join my colleagues in thanking you for your leadership on this 

issue. It is a very difficult one and one on which the Congress has 

worked for a long time, and I hope that with your leadership and 

that of the ranking member, we will continue to make some 

progress this year. There were a number of obstacles listed by both 

the chairman and the ranking member as to why acquisition reform has proven so difficult. 

One that was omitted, I believe, was the influence of the defense 

contractors themselves. We know that in 2014, which is the last 

year for which we have full data, they spent $70 million to influence the decisions that lawmakers make, and I think that is a fac-
25 

tor. I don’t know how large a factor. We can measure what they 

spent. I don’t know what its effect is on the ultimate decisions, but 

it is a factor, and I think that needs to be included in the calculus 

for reform. And I would link campaign finance reform to military 

acquisition reform. I think those two things are important, and I 

would welcome any comments on that. 

However, I would like to ask a question about a different area, 

and it gets back to another issue that has been raised in today’s 

hearing so far, and that is allowing the military the freedom to experiment and the freedom to fail in order to better guarantee innovation and success down the road long term. 

General Williamson, I would like you to talk a little about the 

Network Integration Evaluation, or NIE, and the Army Warfighting Assessment, or the AWA—one which looks at programs that 

are programs of record and the other that allows the Army to experiment with programs that are not programs of record—and how 

those two work together to satisfy the concern that many of us 

have raised and you have pointed to. I think I heard you say that 

we are looking for early, more experimental stuff, not necessarily 

connected to programs of record, not necessarily connected to identified gaps, but those kind of things that may appear in the future 

unbeknownst to us now. 

General WILLIAMSON. Sir, thank you for the question. This is one 

that I think as an Army we are very, very proud of in terms of the 

development of both the network integration exercises and the new 

warfighting assessments. So what we discovered in 2011 is that, as 

we were deploying capability in the theater, we found that even 

though we were finding the best of breed, whether it was a radio 

or a system, the integration was happening in the field in combat, 

and what we really needed was a venue to make sure that all of 

the pieces worked together. So the start of the NIE really was focused on integration. But at the same time we were doing that, sir, 

we really discovered that we did not have a good operational venue 

to look at new capabilities, get the warfighter to touch them early 

on and influence the requirements process and to make changes, 

refinements, in the requirements. 

So the network integration exercises quickly evolved from pure 

integration to also looking at, what is the effect of introducing this 

new technology? Because here is what I would offer to you, is that 

in some cases, it is not a new thing; it could be a new use for an 

existing technology. And how you do tactics, techniques, and procedures, how you organize your unit, all of those things have an effect on, am I increasing warfighting or the power of that unit? 

So as we discovered that, the NIEs really were technically focused, and we discovered that we needed to also spend more time 

reaching out and looking deeper, further out. What capability do 

we need 5 years, 10 years, 20 years from now, and the warfighting 

assessments that we are now implementing give us that capability. 

And, sir, to your point, this is really what is so important about 

what we are doing, is that that information comes back, and it influences not only current systems, but it also sets the conditions for 

the requirements documents that are more realistic in terms of 

what is really needed. I think this is something that did not exist. 

We did small pockets, but the center of gravity for us is a brigade. 
26 

And even though this is resource heavy, we dedicated an entire brigade to have these experiments and to do these integration exercises. We are very proud of what they have accomplished. 

Mr. O’ROURKE. Thank you. 

I yield back. 

The CHAIRMAN. Chairman Kline. 

Mr. KLINE. Thank you, Mr. Chairman. 

Thank you, gentlemen, for being here. I heard a couple of you, 

I think Secretary Stackley and Lombardi, saying that they were 

confident that we could reduce some acquisition time, and you were 

on the right track for making changes. And that is good, but I am 

probably pretty skeptical. I certainly hope we can reduce the time 

and be more flexible and be more agile. The history just doesn’t 

show that. Everybody in this room—and even Frank Kendall, who 

is not in this room—everybody kind of knows what you have to do 

to speed this up and understands it is going to be very difficult to 

get there because we can’t do every program with the Skunk 

Works. We just can’t do it. 

So we are looking for ways that we can speed up the process, 

streamline it. The ranking member talked about the levels of review and oversight within the Pentagon, and then we add on top 

of that. And, of course, we bear some culpability for sure here in 

Congress because if a system is being manufactured in our district 

or an office is in our district, it clearly is a key national security 

interest, and if it is in somebody else’s district, it is a bill payer. 

So we understand that we are part of the problem, and we need 

to work on that ourselves. I have been pleased to see that you all, 

the Pentagon, and industry has been smarter and smarter in making sure that some major component is built in everybody’s district, 

so that makes it a little bit easier because whatever that component is, is a key national security interest, and therefore, we are 

going to do our part to protect it. That is the way our job is because 

we are looking to protect jobs in our district. 

I want to go back for just a minute to the ever-name-changing 

Marine Corps expeditionary fighting vehicle. I remember very well 

because I put it there in POM 1990 in an earlier life. We could not 

afford that vehicle, which was called the Triple A back then, so it 

was always in the last year of the POM. When people, my successors came, it kept coming, and it kept going the last year of POM, 

and we couldn’t afford it. It took every nickel of procurement Marine Corps to buy that one item, and yet it stayed in the POM year 

after year after year, until finally reality caught up, finally. 

So part of this is, we need to live a little bit more, in my judgment, in the world of the possible, in a reality. If you can’t afford 

it, you know you can’t afford it, then why are you expending all of 

that energy? And I am raising my hand; I was guilty. I put it right 

in there because I was told how important this was. We need to 

do a better job—we collectively—we here and certainly those of you 

sitting at the table. When you are living, as we are now, in an uncertain budget time—I would argue we are always in an uncertain 

budget time—let’s don’t put our energy into doing something that 

we cannot afford and are not going to be able to afford. My argument to you is that is where that Triple A, which then became the 

expeditionary fighting vehicle and something else now, you couldn’t 
27 

buy it. If you took every procurement dollar, every procurement 

Marine Corps dollar—that is what it took—you couldn’t buy another thing. You couldn’t buy a single rifle, nothing. 

I think that is part of this process. We all know that the JROC 

[Joint Requirements Oversight Council], the whole requirements 

process is cumbersome, and I have heard you use today words like 

‘‘long cycles’’ and ‘‘long cycles within cycles.’’ It seems to me that 

is what we are trying to get at here. We are trying to find ways 

to make those cycles not so long cycles and make them not so cumbersome and get rid of some of the layers of bureaucracy that go 

here. 

I can never fix the fact that Mr. Turner is going to worry about 

some office or some production in his district. I guess I could worry 

about it, but I can’t change it. But these processes, these bureaucratic processes—processes—we need to be getting at, and I know 

we want to do everything we can to clean that up as much as we 

can. And we have just got to stop doing business the same old way. 

And I know you know that, and you are trying, and if there is 

something in statute that needs to be changed, that is what we 

want to hear from you because we want to help you. 

I yield back. 

The CHAIRMAN. Mr. Langevin. 

Mr. LANGEVIN. Thank you, Mr. Chairman. 

I want to thank our witnesses, Secretary Stackley and General 

Williamson and Mr. Lombardi. Thank you for your testimony and 

for the time and attention you are putting into this area. 

Obviously, we all consider acquisition reform critical if we are 

going to continue to maintain our technological edge going forward, 

as well as make better use of taxpayer dollars. We have often 

heard it repeated that the U.S. risks losing military technological 

superiority across a variety of domains if reforms are not made to 

improve the DOD’s acquisition process. So do you believe that the 

current acquisition process does take so long that the technology 

actually becomes obsolete by the time it reaches the warfighter? On 

balance, is that what is happening today given—— 

Secretary STACKLEY. Let me describe it this way, sir, is that the 

pace of technology is it is outpacing our current, recent history of 

acquiring capability. You pointed out the acquisition process. When 

I think about the acquisition process, I think about everything from 

the start of defining a requirement to the back end of fielding the 

capability and supporting it in service, as opposed to that thing in 

the middle that sometimes people refer to that is associated with 

contracting actions. 

It is a long and lengthy process, and much of the theme of this 

hearing, talking about how do we jump-start this, how do we accelerate it, much of the theme of this hearing is about taking risk upfront to try to accelerate that requirement’s definition, the understanding of the requirement, and the maturing of the technologies. 

Let’s take that risk upfront to try to collapse down some of that 

timeline. And then when we shift over to a more traditional development and production phase, then we are starting at a much more 

mature level, much better understanding of what we have to build 

and can, in fact, accelerate that at the same time. 
28 

Mr. LOMBARDI. Sir, I would also add to that and, again, I think 

one of the key attributes that will allow us to speed up in some 

areas will be, again, use of modular open systems architecture, 

which will allow us then to build in the opportunities that as 

emerging technology becomes available, that we will be able to integrate it more easily into the systems that we have already developed. 

Mr. LANGEVIN. I think it is obviously critically important in 

areas in particular where procurement timelines often don’t align 

with budget timelines, such as cyber, which moves pretty rapidly. 

Let me turn to, can you discuss the effectiveness of the DIUx initiative and In-Q-Tel initiatives improving access to industry and 

overcoming transition challenges? I know you have touched on 

those topics this morning, but I would like to get an update on how 

they are working at this point. 

General WILLIAMSON. So, sir, I would like to start. I should be 

dancing on the table in regards to the kind of access and exposure 

that we are starting to see from both DIUx, but also the engagement with In-Q-Tel. I just recently spent recently an afternoon 

with the folks at In-Q-Tel and just the introduction to the innovative companies that, quite frankly, I had no situational awareness 

on and their interest now in coming into the defense space I think 

is going to pay tremendous dividends. 

But I really discovered, though, from the DIUx side is this, I 

would call it a gap, quite frankly, between the companies out there 

who have not operated in the defense space, the normal defense 

space, and their understanding of the types of products, the wide 

range of products that we build. So we have this perception of social networking and software only, but I would tell you that their 

engineering talent is sufficient—it is significant, rather. So I think 

that we have just started to break ground, and part of this effort 

is to continue to expose them to the types of requirements we have. 

If there is a challenge, it is one that was stated earlier, and that 

is, so historically we have not been great customers. Their cycle 

times, their business processes work much faster, and as a result, 

it is difficult for them to understand the time it takes for us to get 

to yes and start building something. So it starts with exposure, and 

I think what we have to do on our side is make sure that we are 

tightening up some of the lengthy processes that we have. 

Mr. LANGEVIN. Thank you. 

The CHAIRMAN. Thank you. 

Mr. Rogers. 

Mr. ROGERS. Thank you, Mr. Chairman. 

Mr. Lombardi, I would like to talk to you about the Defense Meteorological Satellite number 20, which the Air Force affectionately 

refers to as DMSP [Defense Meteorological Satellite Program] 20. 

Back in 1997, the Air Force paid industry to build this DMSP 20. 

Then they promptly put it in a storage facility for so long that the 

Air Force ultimately had to pay industry to upgrade it because it 

was antiquated. All the while, you paid millions of dollars a year 

to keep this satellite in storage. In all, the Air Force spent well 

over a half a billion dollars of taxpayer money on this satellite, 

$518 million to be specific. Then, in 2014, the Air Force told Congress that it no longer wanted the satellite and wanted to scrap it. 
29 

Then they came back last year in 2015 and said: No, we have become too dependent on Russia and China for this meteorological information; we need to launch the satellite. 

Well, unfortunately, Congress had lost confidence in the Air 

Force’s ability to manage this program. Mr. Lombardi, we spent $500 million that could have been used 

to support national security. Instead it is going in the trash. I presume it is going to be made into razor blades. We could have saved 

the Air Force and the Congress a lot of aggravation if we had 18 

years ago put a half a billion dollars in a parking lot in a pile and 

just burned it. 

So my question is, why should we have any confidence that the 

Air Force can manage space programs when we look at this example, and what did we learn from this situation? 

Mr. LOMBARDI. Sir, I would tell you that the Air Force truly does 

understand the space business and understands how we need to 

operate in space. The DMSP 20 example that you put out is an unfortunate one in which you are absolutely correct, is that we have 

at a point where we are not able to be able to execute that satellite. 

But I would tell you that the Air Force has a tremendous understanding of the entire space business, and we are dedicated to be 

able to continue to provide that capability for our Nation. 

Mr. ROGERS. You haven’t convinced us, and this is a perfect example. 

In these times of austerity, when we are just struggling trying 

to keep the Pentagon funded—and this committee fights with the 

Congress constantly, trying to get adequate defense spending—this 

kind of example kills us. This is just an inexcusable waste. 

But now moving on. And this is to any of the witnesses. We have 

seen a number of cases where innovative acquisition approaches 

have led to quick, very effective procurement of desperately needed 

capabilities. One of the best examples is the public-private partnerships allowed to build military family housing with minimal upfront investment from the taxpayer. We have also seen energy savings performance contracts that have allowed us to build modern 

buildings and leverage long-term energy savings with minimal upfront taxpayer dollars. How can we extend these types of innovative arrangements? Are there new types of innovation you believe 

are needed, and most specifically, what statutory authority do you 

need to ensure these type of arrangements receive fair consideration? 

Secretary STACKLEY. Let me start. I think we referred to DIUx 

as an example of how we are trying to explore greater access to innovation, where we are trying to engage with a sector of our commercial technology, nontraditional for defense. We get a better understanding of what makes them successful, better understanding 

of what leading-edge technologies are in their hands that could provide great military utility, and perhaps more importantly is establish a longer-term relationship with this sector. 

Now in doing that, we have got to overcome some challenges inhouse. When we take commercial technologies and then try to convert them to a weapons system, we have different standards. That 

is really underlying much of the challenge that we deal with today 

when we talk about innovation. There are very few instances where 
30 

we can just take a commercial technology and carry it into war. 

But on the other hand, we have to take a hard look at the standards that we apply for our weapons systems to ensure that we are 

not placing excessive technical burden that would preclude—— 

Mr. ROGERS. You are missing my point. I am talking about taking creative approaches to financing program procurement. One of 

the things that I am hearing is that—CBO as well as the OMB [Office of Management and Budget]—is the problem in scoring, that 

we had to statutorily change the law so that the military housing 

could be built by private money and paid for over time. I guess I 

am looking for do you think we need statutory change to try to approach procurement with financing over a long period of time instead of paying for it in 1 year? Do you need some legislative authority to do that? My time is up. If you could respond in writing, 

I would appreciate that. 

Secretary STACKLEY. I would just very shortly say that I don’t 

think there is a broad brush, but I think what we need to do is 

have a discussion about the specifics of examples or initiatives that 

we want to attempt because there are very clear cases where scoring does stand as an impediment, and we would like to bring the 

case. 

Mr. ROGERS. Thank you very much. 

The CHAIRMAN. Ms. Sanchez. 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

And thank you, gentlemen, for being before us. In reading 

through your statements and listening to some of what you have 

said, I am gathering that you are asking for more leeway. You are 

asking for more money. You are asking for less—not oversight—but 

less restrictions or requirements on how you spend the money. I 

am probably one of the few members here that gets to take a look 

at a lot of our classified programs where we spend, for lack of being 

able to talk about it in open session, billions and billions of dollars, 

where you have an incredible amount of leeway, lots of money, of 

ability to make prototypes, where it is okay to fail on our programs 

because we are investing for the future. We are trying new technologies. We are making new technologies. So if we would do that 

with more of our budget, if we would have more ability to fail, have 

less restrictions on the money, I think that I would see that as the 

American public seeing a lot more big failures from both our Pentagon and our military-industrial complex, which I think would undermine the confidence that Americans have in what we are doing 

with respect to defense. 

And I have only to note, Mr. Chairman, the F–35 program, which 

was a very open program where we tried new things, like concurrently doing the development at the same time that we were producing the product, which led to $700 billion overrun and 7 years 

late, and we still have a lot of problems with it. 

So I am trying to understand why you want more leeway. I think 

we need to have actually more oversight. I think we have to have 

a real audit of the Defense Department. I believe we really need 

to tighten down in a tough budgetary environment and make real 

choices. Choices aren’t necessarily yours. They are what we do in 

the Congress. That is what we are supposed to do, but I would like 
31 

you to speak to why advocate for more relaxation of requirements 

and regulation on how we ask you to spend this money? 

Secretary STACKLEY. Let me start, ma’am. First, we are not asking for more money. 

Second, it is not that we are asking for more leeway and fewer 

restrictions. What we want to be able to do is increase the degree 

of prototyping and experimentation that we can do and to shorten 

the timeline for developing our major weapons systems. And we 

want to use this limited amount of prototyping and experimentation to determine if we are on the right track for a technology 

or a specific technical solution to our warfighters’ problem before 

we launch into major investment of dollars. 

So we are not proposing to invest large—first off, to raise the top 

line, invest large dollars, and put great dollars at risk. We are talking about a limited amount of funding to determine before we invest the large dollars, before we come to the Congress and ask you 

all to authorize and appropriate those dollars, to see if we are on 

the right track. 

And we are absolutely committed to doing this in broad daylight 

with the Congress so you have full insight and oversight to our efforts. 

Ms. SANCHEZ. So, therefore, you would agree that doing something like we did with the F–35, where we were concurrently developing it and at the same time producing it, is not the way to go, 

to stop going toward a major system until we do a little prototype 

of it? Is this what you are suggesting, sir? 

Secretary STACKLEY. I am absolutely not suggesting that we 

should be increasing the amount of concurrence that we do in 

terms of development and production at the same time. What we 

want to do is reduce the risk, mature the technologies before we 

get into that environment, make sure we are on the right track. 

We are, in fact, doing this today in limited cases. What we want 

to do is make this a greater part of our practice. The limited cases 

where we do it, we find success, and we simply want to make that 

a greater part of our practice. 

Ms. SANCHEZ. Well, I will have to think about that because when 

I look at the classified arena, we, as you know, have a lot of failures in going forward with some of those prototypes. So I don’t 

know that we would want to do that—— 

Secretary STACKLEY. Yes, ma’am. What I would be happy to do 

is come back and walk through some examples of the prototyping 

that we have done that has proven successful and how we move 

from that to the next step, what that means in terms of dollars, 

what that means in terms of the process that we use and why it 

makes good sense. And how can we the Department working with 

the Congress ensure that we are achieving our mutual objectives 

in terms of time, in terms of money, in terms of delivering capability, insight, and oversight. 

Ms. SANCHEZ. Chairman, I thank you, first of all, for the time. 

I think this is a very important issue for our committee to really 

take a look at if this is what we are become asked to do, and I 

think it would be very important also to get that briefing from a 

classified perspective to see the paths we have gone and have failed 

on because I think that is also a good indicator. 
32 

The CHAIRMAN. There is good, bad, and ugly examples in the 

classified arena, just as in the open arena. 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

The CHAIRMAN. Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Gentlemen, thank you so much for joining us, and thanks for 

your service to our Nation. I want to begin by laying out what I 

think the landscape is today in acquisition in the United States 

military. We look at our adversaries, and we look at how they can 

deliver systems, how they can deliver innovation and creation 

through new technology, and they start out with a blank sheet of 

paper, with no impediments. When we start out, we have a bureaucratic structure that starts out with a paper full of noes. No, you 

can’t do this. No, you can’t do that. You can do it this way, but you 

can’t do it that way. And when we end up in that environment, 

things become risk-averse. No failure is accepted. And that is a 

fault not only within DOD but also here on the congressional side, 

and we stifle the innovation and creation that we need in order to 

keep up with our adversaries because they don’t have those impediments. 

We operate in a structure today where the nirvana is to become 

a program of record. Instead of saying no, the nirvana needs to be 

to get technology to the warfighter as quickly as possible. So we are 

lacking innovation and creation and getting it there in a timely 

manner. The question then becomes, is how do we make that happen? We have all talked a lot about process here, and process is 

important, but let’s not forget the purveyors of process. That is people. How do we empower people to make decisions, to not be so 

risk-averse that they say, ‘‘Listen, it is better for me not to make 

a decision than it is to make a decision where there is a risk or 

where there is a mistake that is made’’ and we quickly correct that 

mistake? How do we empower people to make sure that they are 

on both ends accountable and we give them the authority to say 

either say, ‘‘No, this isn’t working, let’s take a different direction,’’ 

or, ‘‘Yes, this is working,’’ or we see something out there off the 

shelf that we can immediately put in the hands of the warfighter 

to make them more successful? I would love to get your perspective 

on, how do we go through that empowerment process to create accountability and authority in the hands of those people that are 

making things happen? 

Secretary STACKLEY. Let me start. I think we are on that journey. I think we have been on that journey for 40 years or longer. 

It is a constant challenge. I am a former program manager, and I 

understand what the limitations are. I understand what the pressures are. I understand what the authorities are in the hands of 

our program manager, and he is really at the nexus. Nobody above 

him understands the details as well as he does—he or she does— 

and nobody below him or her understands the broader picture associated with our requirements, budgeting, and procurement processes. So how do you empower them? First and foremost, make 

sure they are qualified. Make sure we have got the best people assigned to those positions. In fact, one of the things that we have 

done is we are double pumping some of our program managers. I 

am taking a program manager, the Virginia-class submarine pro-
33 

gram manager, who served for 4 good years in that job. He is rewarded by becoming the Ohio Replacement program manager because that is our number one priority, and, by God, that is not a 

training ground. I want somebody that has been proven successful. 

So he is in place there, and you know what he has overseeing him, 

he has got me and the CNO. And we sit down regularly with him 

to understand the path that he is on to ensure that he has, one, 

our full support and the weight of our positions behind him so that 

the organization is responsive to him and, two, to make sure that 

he is on the right path. 

So empowerment means first and foremost having qualified people in the positions, and we are working on that across the board. 

And, two, it is ensuring that the authorities, that accountability, 

that the line of accountability is clear and unambiguous, from the 

program manager [PM], PEO, the acquisition executive, service 

chief, and the DAE [defense acquisition executive], so that the 

weight of those offices and not the staff surrounding them, is supporting the PM as opposed to impeding the PM. 

General WILLIAMSON. Sir, I would just like to add a couple of 

comments to what the Secretary said. Again, you start with making sure that you have a person who has been developed. But there 

is also this notion—I keep coming back to this notion of risk in the 

culture. So I am one of those people that actually managed a program that some would consider to have been a failure, but what 

we did, what I did was applied the due diligence, followed the process where appropriate, and challenged, also where it was appropriate. The difference is that I am sitting here today. So at the end 

of the day, you can’t hatchet someone who has done the right thing, 

and as an organization, as an enterprise, we have to make sure 

that that is conveyed to our folks, that you have to be willing to 

take risk, but it has to be measured risk. I don’t want people rolling the dice. I want people to collect data, be able to support that 

data, and then execute to the best of their abilities, and so that culture has to become a part of what we do. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

I yield back. 

The CHAIRMAN. Thank you. 

Ms. Duckworth. 

Ms. DUCKWORTH. Thank you, Mr. Chairman. 

Gentlemen, thank you for being here. Headquartered in my district is Northrop Grumman’s electronics systems division, and 

every time I visit the facility to see what they are working on, I 

am always impressed by how well they have leveraged the open architecture concept in what they are doing from everything that 

they build from cockpit upgrades for Black Hawks, to an array of 

surveillance systems, targeting pods, electronic countermeasures. 

Everyone’s testimony today has laid out the importance and the 

value of employing open architecture systems and how it is currently being used. 

But beyond that, Mr. Lombardi, perhaps you could start because 

in your testimony you say that despite all the great work the Air 

Force has underway to enable modular open systems architecture 

within our systems, to capture the full value of an open architecture system, we must look at new approaches. Could you share 
34 

with us what these approaches are and how this committee could 

be helpful in enabling this approach? And then I would also like 

to hear from the other witnesses too on what needs to change within the acquisition system to better enable this open architecture 

approach? 

Mr. LOMBARDI. Thank you, ma’am. In my statement, what I was 

really referring to was with respect to more of our systems that are 

more application-centric systems that have an open architecture associated with that, and so really it was changing the dynamic of 

using other transaction authorities to be able to reach out and 

build a consortium where we could actually reach out and get people who traditionally don’t play in our business, and so that was 

really what I was referring to with respect to we need to look at— 

it is another approach. It won’t work for everything, and we know 

that, but there are certain conditions in which having OTA [other 

transaction authority] type of acquisitions will work because it will 

allow us to broaden out where we are able to look for the right kind 

of vendors to be able to provide us the right kind of capabilities. 

Ms. DUCKWORTH. Okay. 

General Williamson, perhaps you can address more directly what 

you think we can do to make open systems use a priority where 

appropriate in the design of weapons systems, and what are the 

impediments? 

General WILLIAMSON. Yes, ma’am. I am going to give you two 

words. The first one is communications. That is the communications with industry, and that is the communications internally 

within your service for all of your programs. You have to make 

sure you are communicating what those standards are. As important as that word is, the real one is discipline. So just declaring 

that you have standards is insufficient. So everyone today, so it is 

very interesting, everyone today talks about open systems architecture. I don’t think there is a requirement for anyone to tell us to 

use open architecture. You really have to do that. If you want to 

do things so that you have a growth potential, if you want to have 

competition in the future to bring in components very quickly, you 

have to start with an open architecture. Where I find difficulties 

is when we talk open systems architecture, but then we will find 

a component or a thing that we really like that is proprietary, and 

then we adjust for that. And so you have to have the discipline. 

And the example I would use is something like Google. So what 

is very interesting is when you look at all those apps that are out 

there, there are hundreds of thousands of applications that are 

built every single day, every year, but there is a standard. If you 

want to build an app and you want that app to work in that environment, you follow those standards, or you don’t get to play. We 

have to have that discipline within our own organizations, not just 

for the current systems but for future systems. And industry has 

to believe that we are going to stay with those standards. 

Ms. DUCKWORTH. Good point. 

Mr. Stackley, do you have anything to add? 

Secretary STACKLEY. Yes, ma’am. I described in my opening remarks the Acoustic Rapid COTS Insertion program that the Navy 

launched into. Because we could not afford to upgrade our submarine combat systems and the threat was outpacing us, we had 
35 

to break that model. So we took an incumbent that had a sole 

source on our combat systems, and we broke it up. Now, that was 

tough because the software is the key. It is not just a hardware 

issue; it is a software issue. It took time to break up the software, 

open it, and then make it accessible to third parties to be able to 

compete and bring the technologies that we needed to advance our 

capabilities to where they are today and need to be. That model became the model for all of our systems. And so today our standard 

is, in fact, we have an open systems architecture standard that we 

drive into all of our programs. We have been on this path for about 

a decade. The challenge is the legacy systems. And those we upgrade by—we convert to open standards through the upgrade path. 

When we upgrade our existing systems, we look to open up at least 

that portion of the system so that future upgrades and third-party 

access to bring capabilities is made possible. 

Ms. DUCKWORTH. Thank you. 

I yield back, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Dr. Fleming. 

Dr. FLEMING. Thank you, Mr. Chairman. 

Mr. Lombardi, I have a question for you, sir. I was interested to 

learn about the example you gave in your testimony regarding the 

communications and situational awareness systems developed by 

Air Force’s S&T Program at the request of 20th Air Force and 

Global Strike Command. Could you please describe that particular 

effort and what was learned from it? 

Mr. LOMBARDI. Yes, sir. Well, what that was, was again, as we 

were going out to—having the capability to monitor out into our 

missile fields, and so what this was able to do was provide a network between the UH–1 helicopters, the ground teams in the vehicles, and also at the sites themselves, to be able to communicate 

in a better fashion, in one in which a network that was a very capable network that we would be able to keep people informed of 

any incidents that were happening along any of the routes. And so 

it was something that our S&T folks put together in a very rapid 

instance and everything. And so as what we have learned from 

that is that, again, we can put out those self-generating types of 

networks on a regular basis and do it relatively easy. The issue 

long term we have to do is to make sure that as we do that, how 

do we develop out the sustainability and the support structures for 

those? And so that is the learning that we have to do is our S&T 

community does a great job in being able to provide rapid capability in certain instances, but then we have to figure out, how do 

we make this into a long-term, sustainable type of a system? And 

it causes all the ‘‘ilities’’ that you have to have with respect to 

that—the supply chain, all the sustainability and so forth. Those 

are the things we learn as we deploy those types of things. And 

then we test that, so it was something that we could use to continue to refine that capability, and so the lessons from that go back 

into the laboratory for them to then look at a next generation as 

we look to move forward into the future. 

Dr. FLEMING. So this situational awareness technology would be 

the ability to talk and to text—— 

Mr. LOMBARDI. Right. 
36 

Dr. FLEMING [continuing]. Ground to air—air to ground and 

throughout the battle sphere, and it would seem that a lot of that 

is off the shelf. It may have to be adapted. Would that be the case? 

Mr. LOMBARDI. A lot of it is, but a lot of it is, as a lot of the 

things that we do, there are a lot of things that are off the shelf. 

The issue is the integration associated with that, and that is where 

a lot of times the real magic occurs, is, how do we integrate these 

types of capabilities together to form a system? And so while there 

is a lot of things that we can do to take off the shelf, it is still a 

lot of the hard part is the actual integration to make them into a 

true system. 

Dr. FLEMING. Right. How long was the prototyping process, and 

is there anything in your view that would have helped speed up 

that process? 

Mr. LOMBARDI. Sir, if I could, I would like to take that for the 

record and get back with you on the exact timeline in which we did 

and if there is something we learned associated with that, if you 

don’t mind. 

[The information referred to can be found in the Appendix on 

page 85.] 

Dr. FLEMING. Okay. Thank you. 

I yield back, Mr. Chairman. 

The CHAIRMAN. Dr. Wenstrup. 

Dr. WENSTRUP. Thank you, Mr. Chairman. 

I appreciate you all being here today. I think it has been very 

informative. I want to ask the general a question about the defense 

acquisition workforce, and I give it high marks, and I am pleased 

to see that because it does make a lot of sense to me to go in that 

direction and to have a trained workforce. 

And one of the other comments I heard today was concern about 

our access to commercial technology because of the bureaucracy. Do 

you think it would be wise to work within that group, that trained 

workforce, for them to make recommendations to, as you called it, 

a tightening up of the process? I am familiar with the process. It 

is a good set of checks and balances, but very time-consuming and 

there may be steps that can be expedited or skipped. Would they 

be a good source to recommend changes there? 

General WILLIAMSON. Sir, that is a great observation. You know 

we always want to reach out to the workforce. There are two areas 

that I think they provide a lot of insight. As you know, part of what 

drives the process, part of what drives the system, are really two 

areas: Fairness, how am I making sure that this process is fair, 

meets regulations? And then how am I reducing risk throughout 

this process? So just like on production lines out in industry, you 

should go to the folks who are actually doing the work and take 

recommendations from them. 

Now, we do have some feedback mechanisms to do that, but I 

think to your point, that is something that we need to go back out. 

So I think the language that we received in this most recent NDAA 

gives us a lot of opportunities to improve the acquisition system. 

What we have to do is leverage that, go back out to the communities and see how we can improve within our own selves before 

we come back and ask for something else. 
37 

Dr. WENSTRUP. And I think what is attractive amongst that 

group is there is so much of a crossover of uniformed and civilian 

employees, and maybe some came from the private sector, right. 

And I am asking more than saying. But it seems to me that that 

would be a good mix of people in cooperation with the private sector folks. How can we change this system to make it still very effective, still reducing risk, but get the job done sooner? 

General WILLIAMSON. Yes, sir. So I think you are right. In terms 

of the best practices, so your point is a good one that I need to 

make sure I take away. And that it is not just from the government 

civilians that we have as well as the uniformed, but we also have 

defense contractors and other folks who have a set of best practices. We always take a look at how we incorporate those, but we 

also have to make sure that we are looking beyond our own borders 

to see whether there are improvements that we could make. 

Dr. WENSTRUP. Currently, do they have an opportunity to weigh 

in with us, the outside components? 

General WILLIAMSON. I get lots of feedback from my industry 

partners. 

Dr. WENSTRUP. I am sure you do in one way or the other, but 

I mean in a constructive way. 

General WILLIAMSON. I think I would offer that it is probably not 

as formal as I think you are leaning toward. There is always a tremendous amount of interaction between program managers and 

their industry counterparts and then across all of the functions 

within a program office. I think what I would look at is, how is that 

done structurally in a more formal manner? 

Dr. WENSTRUP. Okay. Well, I thank you very much. 

I do have another question for you, Mr. Stackley. I have become 

aware that our only source of domestic enriched uranium and tritium, which you know you need to acquire for our nuclear subs, the 

DOE [Department of Energy] is going to shut that down, and we 

will not have a domestic source. Does that concern you from an acquisition standpoint? 

Secretary STACKLEY. Sir, I am actually not aware of that. 

Dr. WENSTRUP. I will follow up with you. 

Secretary STACKLEY. Yes, sir. You might be referring to a company called USEC. 

Dr. WENSTRUP. Formerly called. 

Secretary STACKLEY. Formerly called USEC. If that is the case, 

that is a separate issue which I would be happy to discuss with you 

in detail offline. 

Dr. WENSTRUP. Okay. We will pick another time. Thank you, sir. 

And I yield back. 

The CHAIRMAN. Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Mr. Lombardi, from an acquisition perspective, the past efforts of 

the C–130 modernization program seem to have been problematic. 

For example, DOD’s fiscal year 2016 budget justification reflects an 

acquisition cost of approximately $4.6 million per plane for the installation of the air traffic management upgrade that has already 

been done for commercial and other government variants of the C– 

130 for under $800,000. 
38 

Can you explain why the government solution is over five times 

the cost, and could this be a good opportunity to look at experimentation with existing commercial solutions? 

Mr. LOMBARDI. Yes, sir, it is an area where we could look at experimentation with commercial solutions. And, in fact, I believe we 

are. And what I would like to do, if I could, is we would like to 

come back with you with our plan on how we are actually going 

to upgrade and provide that capability into the C–130s. 

We have been out on the Hill discussing with certain Members 

with respect to how we need to modernize and provide that capability, and we would like to be able to provide that information to 

you as well. 

Mr. COFFMAN. Thank you. I look forward to seeing that. 

And then for any of you, for all of you, the protection of intellectual property [IP] rights appears to be a significant issue in terms 

of successful adaptation or adoption of the open system architecture. How would you suggest a balance be reestablished between 

a DOD structuring of competition and industry’s business models, 

including IP rights to recover investment in commercial and privately funded technologies? 

Who wants to start with that? Mr. Stackley. 

Secretary STACKLEY. I will start with that, yes, sir. 

First, when you go to open systems, it is a business model and 

it is a technical model. And the business model brings into question 

the data rights associated. Our view is that if the government has 

paid for the development of software, the government should acquire the data rights with that software. 

If somebody is bringing in software to a system that they developed, then, frankly, that is a discussion with that element of industry in terms of whether or not we, the government, feel like we 

need the data rights to that software, and then how would we go 

about acquiring that with industry. 

So it is a business model. If we pay for the software development, 

we should be acquiring the data rights as we pay for that development. If we have failed to do so, for whatever reason, and downstream now we need to upgrade or add capability, then we are reopening a contractual discussion with that contractor in terms of 

data rights on the software. 

So we have to be very careful that we are not chasing away industry when it comes to data rights and intellectual property, so 

we have to do a better job of having that dialogue and communication. But if we have paid for it, in fact, we should be acquiring the 

data rights with it. 

Mr. COFFMAN. General. 

General WILLIAMSON. Sir, if I could just add, I just wanted to 

add to what the Secretary said. So what I have discovered is that 

in many cases this gets to the communications piece. I have discovered there is a lot of urban legend about what the government 

owns and when you deal with them. 

And so when I talked about this exposure and these communications that we are having with nontraditional defense contractors, 

we are finding that there is this myth that they are going to lose 

their IP. And case by case, you have to have that discussion. We 

have to do a better job of communicating. 
39 

And there are some cases where there have been specific algorithms, a specific technology that you are bringing that you should 

protect. And if we want it, we should pay for it. But you have to 

get rid of the myth first and understand the specifics of what we 

are talking about. 

Mr. COFFMAN. Mr. Lombardi. 

Mr. LOMBARDI. Yes, sir. I think what both of the panel members 

have said is absolutely correct, is that there is a lot of dialogue that 

has to occur to understand really where the myths are because we 

have seen that in the past where people will just say that we own 

the data rights. And as we peel back the onion on it, we find out 

whether we have or have not paid for those. 

And so it is really something that we need to continue to explore, 

but it is a real good communication to have with the program office 

and the contractor to be able to really get to the meat of where the 

real ownership of the data really is. 

Mr. COFFMAN. Okay. 

Secretary STACKLEY. I will add one thing, and that is, we have 

become much smarter about data rights, and we are having that 

dialogue much earlier in the procurement process so that we are 

not downstreaming while hung up. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

I yield back. 

The CHAIRMAN. I will just add, if it is all a myth, you all really 

do have work to do, and not just on software, because the perception in industry—and this comes from some of the announcements 

that Mr. Kendall has made—is that DOD is going to suck up all 

the intellectual property, and they are going to own it forever. And 

it is a real issue. And I appreciate the gentleman bringing it up. 

Mr. Bridenstine. 

Mr. BRIDENSTINE. Thank you, Mr. Chairman. 

Mr. Lombardi, according to your testimony, the Air Force views 

experiments as campaigns of activities rather than one-off events 

and focused on specific missions such as close air support and air 

superiority rather than specific programs of record. In most cases, 

if experiments are not directly tied to programs of record, my question is, how are they funded? 

And as an example, how are you funding the close air support 

experimentation campaign? 

Mr. LOMBARDI. Yes, sir. In my statement, what I was really referring to was our process on developmental planning. And so, as 

I have mentioned before, developmental planning is really kind of 

a team sport where you have the requirements, the user, the S&T 

community, and the acquisition community coming together before 

we even know that there is going to be a material solution. 

So, therefore, we are not even sure that there is going to be a 

need for a program of record. What we are really trying to do is 

understand, what is the user’s need, and what are the best ways 

to be able to approach that? It may be continuing to invest in some 

areas of S&T. It is starting to do some prototyping. It may be that 

it is just simply a CONOPS change on some technology that is already available. 

And so therefore—— 
40 

Mr. BRIDENSTINE. Can you help me understand, where does the 

funding come from? 

Mr. LOMBARDI. The funding is really in our 6.4 line then, and it 

is what—we have a line that talks about technology transfer. And 

so, therefore, it is not necessarily tied specifically to a program of 

record yet, but it is an area where we continue to do our working 

to determine whether we do need a material solution or not. 

Mr. BRIDENSTINE. Okay. That is good. 

I want to talk specifically about one particular experimentation 

that has been going on as it relates to space. And that is the Joint 

Interagency Combined Space Operations Center [JICSpOC], which, 

of course, was stood up with General Hyten and Doug Loverro. 

And, of course, you know, Deputy Secretary Work, it was his brain 

child. 

And I think what is happening there is critically important for 

our country. The idea that we can fuse all of these different sensors 

from the DOD to commercial industry to combined from our joint 

and coalition partners and other sources—the intelligence community, for example—getting all this information into one area and 

then experimenting to determine, you know, what are the threats 

that we face? How do we attribute those threats? How do we ultimately combat those threats? 

Could you share with this committee as far as the JICSpOC goes, 

how important are those experiments, and maybe not exactly what 

you have learned, but how important is it that we continue doing 

that? 

Mr. LOMBARDI. I think it is greatly important. Again, I think, as 

you characterized it, sir, is that both the DOD and the intel community recognize a need to have to work together to be able to 

share important information across the national security space enterprise. 

And so by virtue of bringing the right players together, we are 

actually doing this experimentation, as you mentioned, that began 

this past October and is, I believe, going to be completing in the 

May timeframe. And so at least that is the first phase of it. 

And from that, then General Hyten and also USSTRATCOM 

[U.S. Strategic Command] all will come together to kind of take a 

look and see, what have we learned from this? But the initial phase 

has really been to try and understand how the interrelationships 

would be and how they are moving forward. 

And so as we move forward with this, I know this is an area of 

interest for you, is as we get to a point where we have good information to be able to come forward, I think it would be very helpful 

to come see you and be able to provide you an insight on where 

we are at. 

Mr. BRIDENSTINE. Great. The transition from what we learn in 

these experiments—and we need to understand kind of what comes 

out of those experiments, learning from that and then transitioning 

to an operational capability, which, of course, in many cases is 

going to require funding that we are going to have to advocate for; 

I mean, that is critically important. 

I have got about 31 seconds left. I want to emphasize that I 

would like to see the JICSpOC in the President’s budget request. 
41 

I don’t know if you can help with that, but those kinds of activities 

in there would be good. 

Finally—I have got 18 seconds left—the DMSP 20, which we 

heard Chairman Rogers talk about, it is a big challenge. Would you 

be open to, for military weather purchases, purchasing data from 

commercial industry rather than purchasing $500 million satellites 

that ultimately sometimes end up being destroyed? 

Mr. LOMBARDI. I think, as we have looked at things in the past, 

we have used both civil and our international partners to be able 

to gather information with respect to weather information, so forth. 

And so we will continue to look at all aspects with respect to how 

we can provide capability to our Nation with respect to these areas. 

Mr. BRIDENSTINE. Thank you, Chairman. 

The CHAIRMAN. Thank you. 

I appreciate you all. I think we have touched on a number of important topics today. I look forward to seeing the President’s budget request, but as you can tell, the committee is not going to be content just seeing what comes over. We want to continue to work 

with each of you on a number of ideas and initiatives that we have 

to help push the whole system toward more agility. 

So, with that, we, again, appreciate you all being here, and the 

hearing stands adjourned. 

[Whereupon, at 12:15 p.m., the committee was adjourned.] 

A P P E N D I X 

JANUARY 7, 2016 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

JANUARY 7, 2016 

(47) 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

JANUARY 7, 2016 

(85) 

RESPONSE TO QUESTION SUBMITTED BY MR. WILSON 

Secretary STACKLEY. In the past, DOD has funded studies on the practicality of 

SMR technologies for military installations which found that safety, certification, 

and licensing of SMR technologies take considerable lead times before deployment. 

In response to FY14 NDAA guidance, OSD chartered a Defense Science Board study 

to examine the ‘‘feasibility of deployable, cost-effective, regulated, and secure SMRs 

with a modest outpost of electrical power.’’ The OSD study is expected to review 

SMR deployment challenges on security, siting requirements and timelines, regulation, long term solutions for spent fuel storage, and cost. Navy Secretariat, OPNAV, 

and Navy Reactors subject matter experts have been actively participating in this 

effort. We look forward to seeing the results and recommendations coming out of 

this Defense Science Board study. 

There are a number of licensing and operational issues that will need to be resolved before small nuclear power plants could be available for use by DOD. Recognizing this, DOD is also following advancements in SMR technologies which DOE 

is pursuing and will continue to collaborate with DOE as this technology advances. 

As an example, DOE and the Nuclear Regulatory Commission (NRC) created a 

SMR Licensing Technical Support program to promote the accelerate deployment of 

SMRs through cooperative agreements with industry partners. The first agreement 

in this program was awarded to the mPower America team of Babcock & Wilcox 

in November 2012, and the second round of funding was awarded to NuScale Power 

in December 2013. NuScale expects to submit the application for design certification 

in the second half of 2016 and anticipates their project to be operational by 2023– 

2024. B&W scaled back funding for their program in April 2014 and plans to continue low-level R&D on mPower technology. DON stands ready to support the DOE 

and NRC as may be required. [See page 21.] 

RESPONSE TO QUESTION SUBMITTED BY MR. TURNER 

Mr. LOMBARDI. The contracting function of BIG SAFARI remains within the 645th 

Aeronautical Systems Group, Wright-Patterson AFB, Ohio (645 AESG, WPAFB), the 

organization that oversees the BIG SAFARI portfolio of programs. The 645 AESG 

Commander is appointed the System Program Manager for BIG SAFARI programs, 

and the contracting professionals for BIG SAFARI support the portfolio within the 

645 AESG at WPAFB. 

The leadership within the Air Force Life Cycle Management Center and 645 

AESG are not aware of, nor are pursuing, any movement of the BIG SAFARI contracting support out of the 645 AESG at WPAFB. The current contracting function 

is a key ingredient in enabling BIG SAFARI to meet a multitude of users demanding mission needs in an extremely timely manner. [See page 24.] 

RESPONSE TO QUESTION SUBMITTED BY DR. FLEMING 

Mr. LOMBARDI. The prototype delivered to 20th Air Force and Air Force Global 

Strike Command was developed through the Air Force Research Laboratory (AFRL) 

Rapid Innovation Process, within the Air Force S&T program. After receiving authority to prototype a specific design concept from the AFRL Commander, the prototype was delivered to 20th Air Force and Global Strike Command in six months. 

Prior to receiving authority to proceed, the AFRL Rapid Innovation Team worked 

closely with the user to analyze the needs, gaps and shortfalls in order to define 

solution options. 

In this case, the process was on target to meet the user needs. Because the user 

problem was framed correctly. Framing a problem correctly involves several areas, 

including needs decomposition, and identification of operational objectives, constraints, environment and standards. Prioritizing these efforts ensures an operationally suitable solution is identified that has a clear impact on operational effectiveness and efficiency. 
86 

User involvement in needs analysis, solution conceptualization, and prototype development enables delivery of a suitable prototype with all the right attributes to 

satisfy the user need. Furthermore, a rapid spiral development process that incorporates experimentation and prototyping allows the design to evolve quickly based 

on lessons learned during operations. 

The Air Force has a successful history of developing rapid innovations to respond 

to senior leader-identified urgent needs. We continue to diligently refine our processes based on lessons learned over nearly a decade of such projects, and continue 

to carefully optimize the processes to rapidly produce cost-effective and operationally 

suitable prototypes. [See page 36.] 
QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

JANUARY 7, 2016 

(89) 

QUESTIONS SUBMITTED BY MR. THORNBERRY 

Mr. THORNBERRY. During the hearing, witnesses expressed concern about the 

need for research and development funding, and additional flexibility in how funding can be used, to conduct experimentation and prototyping outside programs of 

record. 

a. What factors limit the use of 6.4 funding (Advanced Component Development 

and Prototyping)? b. If more flexibility were provided so that budget requests require less specificity about experimentation and prototyping efforts, what oversight 

mechanisms would you employ to ensure funds are used appropriately? c. To what 

extent is Other Transaction Authority used in your service for experimentation and 

prototyping efforts? Is it an effective approach for expanding these efforts? 

General WILLIAMSON. There is a long standing institutional barrier and culture 

of resistance to funding prototypes for concepts the Army needs to evaluate but may 

not buy. Prototyping for risk reduction and competition for formal programs has 

been more successful. The biggest barrier is that the Army does not have enough 

funds for the prototyping and experimentation that the Army needs to do early in 

the lifecycle. 

A good example for governance and oversight is the Executive Steering Group 

that maintains oversight of the Technology Maturation Initiative program. The 

Technology Maturation Initiative is a prototyping, budget activity 4 account the 

Army stood up under the authority of the DASA(R&T) to develop prototypes to reduce technical risk, inform concepts and reduce integration challenges to programs 

of record. The objective of the Technology Maturation Initiative program is to facilitate the transition of priority technologies at reduced cost and risk or evaluate the 

concept or use of new technologies. This is done by partnering S&T with acquisition 

program offices to further mature, prototype and validate emerging technologies 

prior to Milestone B. 

Army Science and Technology uses the Ground Vehicle System (GVS) Other 

Transaction Authority (OTA) to focus on vehicle and robotics technology research, 

development, test and evaluation projects. The GVS OTA mechanism facilitates collaboration and innovative technology development with industry, academia, and 

other Services and allows us to leverage Industry Research and Development Funding. The OTA mechanism allows a wider base of industry and academia partners 

to develop more rapid responses to DOD Warfigher requirements. Specifically, the 

Army is using this OTA for our Modular Active Protection Systems and Combat Vehicle Prototyping programs, among other efforts. Having OTA options and opportunities for prototyping opens additional possibilities to traditional contracting methods. 

Mr. THORNBERRY. Witnesses stated that a culture that is open to failure is necessary to foster experimentation and innovation, and ensure DOD retains its technological edge. What steps do you suggest Congress and the services take to move the 

culture toward one that is more willing to accept failure? 

General WILLIAMSON. As I alluded to during the hearing, if we want our potential 

enemies to achieve parity with regard to our technological military advantage, we 

should only pursue low risk technologies. To maintain our technological edge, we 

must be willing to accept more risk in pursuit of innovation and learn to tolerate 

occasional failure to that end. Today, when our brightest minds in government push 

the envelope and fail, it too often leads to the abrupt end of that technological pursuit. In the Services, it is increasingly difficult to defend the funding of a program 

perceived as marred by failure, particularly in an environment of limited resources 

and competing priorities. In Congress, failure is met with budget cuts or restrictive 

language in condemnation of a program perceived as flawed. The end result is an 

institutional culture that has become too risk adverse and has created perverse incentives that are driving our most innovative talent out of government and into the 

arms of industry. 

Both the Services and Congress must first recognize that they are part of the 

problem, and then work hand-in-hand to encourage a culture that is more tolerant 

of risk and willing to accept failure, so long as it can be justified. Accountability remains paramount. Risk must be carefully calculated, our choices should be well in-
90 

formed, and when we fail we must be able to demonstrate measurable progress toward greater goals. 

Mr. THORNBERRY. During the hearing, witnesses repeatedly expressed concern 

about the need for the S&T, acquisition, and war fighter communities to work together early and often. What are the barriers to achieving more effective collaboration? 

General WILLIAMSON. The different levels of risk tolerance across the S&T, acquisition and warfighting communities can hinder effective collaboration. I believe we 

have made significant progress on achieving better collaboration between the S&T, 

acquisition, and warfighter communities through our Long-range Investment Requirements Analysis (LIRA). The LIRA is being used within the Army to facilitate 

more informed program planning and budget decisions and strengthen the ties between the S&T community and their Program Executive Office (PEO) and Requirements community partners. We continue to work to refine this process, and tie in 

a broader set of stakeholders, such as the intelligence community, to ensure maximum collaboration across the Army. 

Mr. THORNBERRY. During the hearing, witnesses expressed concern about the 

need for research and development funding, and additional flexibility in how funding can be used, to conduct experimentation and prototyping outside programs of 

record. 

a. What factors limit the use of 6.4 funding (Advanced Component Development 

and Prototyping)? b. If more flexibility were provided so that budget requests require less specificity about experimentation and prototyping efforts, what oversight 

mechanisms would you employ to ensure funds are used appropriately? c. To what 

extent is Other Transaction Authority used in your service for experimentation and 

prototyping efforts? Is it an effective approach for expanding these efforts? 

Secretary STACKLEY. Factors for Budget Activity BA4 (6.4), Advanced Component 

Development and Prototyping funds, are provided and defined by the Department 

of Defense Financial Management Regulations to cover efforts necessary to evaluate 

integrated technologies, prototype systems in a high fidelity and realistic operating 

environment. The intent is to expedite technology transition from the laboratory to 

operational use. Emphasis includes component and subsystem maturity prior to integration in major and complex systems. In addition, some BA4 (6.4) funds are tied 

to programs of record, so the Department of the Navy (DON) is working to establish 

BA4 (6.4) funds that are not aligned to programs of record to further address Fleet 

needs and priorities. 

b. Internal to the DON, governance and oversight for rapid prototyping experimentation and demonstration (RPED) will be provided by the DON RDT&E Corporate Board. This Corporate Board is comprised of ASN (RD&A), the Vice Chief 

of Naval Operations, and the Assistant Commandant of the Marine Corps. The 

RPED process includes briefing the Corporate Board on actions being pursued as 

part of prototype selection. The Corporate Board will be notified of the need, the 

prototype, and RPED execution strategy, including financial execution. Upon identifying a prioritized Fleet need and selecting strategy and a prototyping plan, the 

DON will notify Congress and provide information on the identified need, the prototype being pursued, and a short summary of plan of actions and milestones. 

c. In the DON, the Other Transaction Authority (OTAs) awarded or active in 

FY2010–FY2014 totals $143.4 million. OTAs provide one of several contracting options for prototyping and experimentation, and will be considered when developing 

prototyping and experimentation strategies and plans. 

Mr. THORNBERRY. Witnesses stated that a culture that is open to failure is necessary to foster experimentation and innovation, and ensure DOD retains its technological edge. What steps do you suggest Congress and the services take to move the 

culture toward one that is more willing to accept failure? 

Secretary STACKLEY. Supporting rapid prototyping and experimentation is an important step in moving the culture in DOD. The Navy and Marine Corps leadership 

has embraced this idea and recognizes that even when prototyping efforts do not 

result in increased capability, technical insight is gained as part of the discover, develop, transition, and field cycle. It is important that Congress recognizes that every 

prototyping effort is an opportunity to ‘‘learn fast,’’ push the technological envelop, 

and inform requirements, budget, and acquisition decisions. This recognition will 

contribute to moving the culture. 

Mr. THORNBERRY. During the hearing, witnesses repeatedly expressed concern 

about the need for the S&T, acquisition, and war fighter communities to work together early and often. What are the barriers to achieving more effective collaboration? 

Secretary STACKLEY. There are no major barriers, but there are collaboration challenges typical of separate communities with different functional roles. A key element 
91 

of the DON’s rapid prototyping initiative is the active and continuous interaction 

between the Fleet operators, planners, and requirements developers and the scientists and engineers from across the Naval Research and Development Establishment (NR&DE). Continuous interaction between these key communities enhance 

and expedite crucial collaboration (technical and operational), minimizing barriers 

to the delivery of new capabilities to the Fleet. The Fleet will be a part of senior 

leadership prototyping decisions and continue their involvement throughout the experimentation and demonstration phase. 

An additional approach to further enhance collaboration is the use of multi-day 

Fleet engagement workshops involving key communities. These workshops are held 

prior to prototype development to explore emerging technologies, engineering innovations, and advanced warfighting concepts. 

The Chief of Naval Operations recently established Warfighting Development 

Centers to develop advanced tactics, training and procedures, conduct training and 

warfighting effectiveness assessments, set and enforce performance standards, and 

identify and mitigate warfighting gaps. Operators from these newly established 

Warfighting Development Centers are integrated into the prototype development 

and experimentation teams to further enhance collaboration and expedite delivery 

of new capabilities to the Fleet. 

Mr. THORNBERRY. During the hearing, witnesses expressed concern about the 

need for research and development funding, and additional flexibility in how funding can be used, to conduct experimentation and prototyping outside programs of 

record. 

a. What factors limit the use of 6.4 funding (Advanced Component Development 

and Prototyping)? b. If more flexibility were provided so that budget requests require less specificity about experimentation and prototyping efforts, what oversight 

mechanisms would you employ to ensure funds are used appropriately? c. To what 

extent is Other Transaction Authority used in your service for experimentation and 

prototyping efforts? Is it an effective approach for expanding these efforts? 

Mr. LOMBARDI. a. The primary limiting factors we see in the use of our 6.4 (Advanced Component Development and Prototyping) funding are institutional and cultural, both of which can be overcome through enhanced Service-wide and DOD-wide 

understanding. Historically, the expectation is that 6.4 funds will be used to address 

the technology development and maturation needs or performance requirements associated with a particular capability, according to a planned budget. Therefore, 

funds in this budget activity without clear or unambiguous traceability to a specific 

program plan and/or major shifts in the capabilities being focused on are sometimes 

subject to premature cuts or elimination. We’re working to shift to a more agile 

mindset where we are able to use knowledge gained from our experimentation and 

prototyping efforts to inform the use of our 6.4 funding closer to and during the year 

of execution. We’re working closely with our planning, programming, and budgeting 

process stakeholders to ensure the need for this type of flexibility is understood and 

can be communicated accordingly. 

b. Air Force senior leadership provides strategic direction for our experimentation 

and prototyping efforts and we believe this oversight provides the requisite discipline and accountability in this spending. We will maintain transparency by ensuring that our budget documentation for these efforts clearly describes the nature 

and type of experimentation and prototyping activities. At the same time, the documentation will still provide us the space to explore new ideas, concepts, and technologies, with the assumption that some may not work or be feasible. 

c. Currently, Other Transaction Authority is not highly utilized within the Air 

Force; however, we do think it could be an effective and powerful tool for our experimentation and prototyping efforts. We recently established an Other Transaction 

Consortium for use in acquiring open architecture systems for Air Force programs. 

We successfully demonstrated this with the Air Force’s Distributed Common Ground 

System (DCGS) program and are on track to fulfill other Air Force requirements 

in FY 16. We plan to grow the effort in future years and are investigating other 

areas where we can use Other Transaction Authority. 

Mr. THORNBERRY. Witnesses stated that a culture that is open to failure is necessary to foster experimentation and innovation, and ensure DOD retains its technological edge. What steps do you suggest Congress and the services take to move the 

culture toward one that is more willing to accept failure? 

Mr. LOMBARDI. We know we cannot accept failure in carrying out our core Air 

Force missions critical for the security of our Nation. However, we want to emphasize that this is different than overcoming the fear of attempting difficult things, 

some of which may fail or turn out differently than expected. As many others have 

noted, we live in an era marked by great complexity and rapid change. Ensuring 

mission success in the future means we cannot become complacent or be afraid of 
92 

exploring new ideas and concepts. We must rigorously challenge currently accepted 

ways of fighting and continually learn, innovate, apply, and adapt. The Air Force 

must become more of a learning institution and one of the steps we’re using to get 

us there is employment of experimentation. Experimentation enables the exploration of new concepts to understand the interplay of combinations of technologies, 

organizations, and employment, and doing so rapidly and cost effectively. We must 

not be afraid of trying out innovative ideas and failing; we must test such innovative ideas to their breaking point so we can understand weaknesses, vulnerabilities, 

and causes of failure. We believe instituting a culture of experimentation, with those 

experimentation activities supported by Congress, will help us to better learn, adapt 

and field the next generation of game-changing warfighting capabilities. 

Mr. THORNBERRY. During the hearing, witnesses repeatedly expressed concern 

about the need for the S&T, acquisition, and war fighter communities to work together early and often. What are the barriers to achieving more effective collaboration? 

Mr. LOMBARDI. The Secretary and Chief of Staff have initiated Enterprise Capability Collaboration Teams (ECCT) to facilitate development planning for our highest-priority mission areas. We are using this ECCT approach to break down collaboration barriers in the exploration of alternatives and formulation of recommended 

courses of action (COAs). These alternatives and COAs will inform decisions on new 

capability development and enterprise affordability spanning both materiel and nonmateriel solutions. ECCTs bring cross-functional users of core mission areas together with requirements, acquisition and S&T communities to collaboratively examine and comprehend operational needs and then formulate and explore new 

multi-domain concepts and capabilities that may address those needs. The members 

of ECCTs are highly motivated, innovative and empowered. They leverage knowledge and expertise residing in the Air Force acquisition enterprise, the DOD laboratory enterprise, Federally Funded Research and Development Centers, academia, 

and industry, as appropriate. 

QUESTIONS SUBMITTED BY MR. SHUSTER 

Mr. SHUSTER. One of the concerns I have heard from my district is that there is 

a lack of visibility for smaller contract suppliers, and that often the relevant people 

at the Pentagon are not necessarily aware of the benefits or drawbacks of some 

smaller components purchased as part of a larger contract. Indeed, the 2012 panel 

on Business Challenges in the Defense Industry that I helped lead found that DOD 

lacks the ability to track small business participation at the lower subcontract tiers. 

Do you think this is still the case? And how do you believe we can properly ensure 

that if a smaller company makes a good product, it is properly recognized when so 

much of the focus is on bigger ticket items? 

General WILLIAMSON. The FY14 National Defense Authorization Act provided a 

means for prime contractors to report small business participation at the second and 

third tiers, in addition to the first tier. This reporting requirement, once fully implemented, will provide greater visibility of small business participation at those levels. 

As part of the Better Buying Power initiative, Program Managers (PMs) are encouraged to collaborate with the Small Business Innovative Research (SBIR) and 

Small Business Technology Transfer (STTR) PMs to review new technology that can 

be incorporated into their SOR throughout its acquisition life cycle. The Army Office 

of Small Business Programs (OSBP) participates in the Army System Acquisition 

Review Council (ASARC) to advocate for maximum opportunities for small businesses throughout a system’s acquisition life cycle. During ASARC meetings, OSBP 

encourages PMs and Contracting Officers to consider including contract incentives 

for prime contractors if they exceed their small business subcontracting goals. 

Mr. SHUSTER. In 2012 I helped lead a panel on Business Challenges in the Defense Industry, and at the time one of the issues we discovered was that small and 

midsize businesses face particular challenges in contracting with the Department of 

Defense. At the time of the panel, DOD had been unable to meet its small business 

Federal procurement goals. Has this situation changed, to your knowledge, in the 

last three years, and what further steps do you intend to take to ensure participation of small and medium sized businesses in DOD contracting? 

General WILLIAMSON. The Army is committed to contracting with small business 

and has achieved its statutory goals for three consecutive years. In FY15, 31.6 percent of all Army contracting actions, valued at $17.5B were awarded to America’s 

small businesses. The Army exceeded its annual goal of 26.5% for small business 

awards by 5.1 percent. 
93 

The Army led the way for DOD in achieving its statutory assigned goals for FY15. 

For the third consecutive year the Army met all five statutory goals. Similarly, all 

assigned goals in the different small business categories were exceeded; for example: 

the small disadvantaged business goal achieved was 15.5% exceeding the 11% goal; 

service-disabled veteran-owned business goal achieved was 4.75% exceeding the 3% 

goal; the Historically Underutilized Business-Zone goal achieved was 3.32% exceeding 3%; and the women-owned small business goal achieved was 5.85% exceeding 

the 5% goal. 

The Army continues to focus on small business participation across the enterprise 

at the prime and subcontractor levels. Army small business is concentrating on outreach and increased internal advocacy for small business involvement in contracting. Focus areas include improving market research to better enable contracting personnel to find capable small businesses. The Army is also leveraging the 

Mentor Prote ́ge ́ program to foster more relationships between large and small busi- nesses. Mr. SHUSTER. One of the concerns I have heard from companies in my district and 

that was also brought to light in our panel on Business Challenges in the Defense 

Industry is that the ever-changing nature of the laws and regulations governing defense acquisitions can make it difficult for companies with limited resources to stay 

abreast of the changes that could impact their business strategies. This places larger companies with teams of contract attorneys at a competitive advantage. How do 

you think we can bring greater streamlining and transparency this maze of rules 

and regulations? 

General WILLIAMSON. The implementation of Better Buying Power (BBP) focuses 

on many of these issues. The Army acquisition community is focused on streamlining the processes, removing barriers and investing in our acquisition workforce. 

The Army is working to address the complexities of acquisition to include, reexamining statutory and regulatory requirements, the reduction of which will improve responsiveness and agility. 

The Army continues to leverage use of commercial items and streamlined practices to eliminate costs unique to DOD/Army in order to capitalize on existing commercial capabilities. Commercial acquisition by its nature, is streamlined and more 

closely resembles rules in the commercial marketplace. Army is also increasing use 

of its Other Transaction Authority in the areas of R&D and prototyping to attract 

businesses that would not otherwise do business with the Government. OTAs are 

not a ‘‘one size fits all’’ and provide relief from Federal Acquisition Regulation based 

rules making them more flexible and attractive methods to bring new sources of 

technical innovation to the Department quickly and economically. 

Since the implementation of BBP, there has been a steady increase in the number 

of small businesses doing business with the Army, indicating an increase in streamlined arrangement. In FY15, the Army awarded 31.6 percent valued at $17.5B to 

small businesses whereas in FY11 small business represented only 22 percent of eligible dollars. 

Mr. SHUSTER. An issue raised by companies doing business with DOD in my district is that there is no incentive for large companies and contractors holding multiple year contracts to seek out the newest, most advanced and less expensive products, even when it would save taxpayers millions of dollars. Is there someone keeping an eye on such advancements when developing projects and upgrades, as well 

as allocating tax payer monies to them? If so, how do they approach this problem? 

Would a move to more open system architecture provide greater flexibility in this 

area? 

General WILLIAMSON. A key tenant of Better Buying Power (BBP) initiatives is 

to use appropriate incentives. The Army has and continues to implement BBP initiatives and apply appropriate incentives. One example is to align profitability with 

contractor performance and reward successful contractors by using special incentive 

fee structures. The Army also makes effective use of value engineering (VE) change 

proposals to reduce costs, increase quality, and improve mission capability. Whether 

voluntary or required by Federal Acquisition Regulations, the VE program assists 

with saving costs as well as benefiting technology insertion. 

The Army maximizes use of commercial products and services to keep pace with 

technology. In addition, the Army uses Other Transaction Authority (OTA), a flexible arrangement not subject to Federal Acquisition Rules, over traditional contracts 

to seek new technologies and innovation from industry. Use of these agreements are 

attractive to nontraditional contractors as well as traditional contractors as the Federal and Defense Acquisition rules do not apply. OTAs foster collaboration on the 

best approach for developing and leveraging commercial technology and R&D. 

The Army follows the DOD open systems architecture (OSA) laid out in the Defense Acquisition System Regulations (5000 series) and structures its contract lan-
94 

guage to target areas that foster open architecture (e.g., continuous competition, 

seeking data deliverables and rights in technical data). OSA is both a business and 

technical strategy for developing a new system or modernizing an existing one. 

Mr. SHUSTER. One of the concerns I have heard from my district is that there is 

a lack of visibility for smaller contract suppliers, and that often the relevant people 

at the Pentagon are not necessarily aware of the benefits or drawbacks of some 

smaller components purchased as part of a larger contract. Indeed, the 2012 panel 

on Business Challenges in the Defense Industry that I helped lead found that DOD 

lacks the ability to track small business participation at the lower subcontract tiers. 

Do you think this is still the case? And how do you believe we can properly ensure 

that if a smaller company makes a good product, it is properly recognized when so 

much of the focus is on bigger ticket items? 

Secretary STACKLEY. DOD and DON are aware of the challenge of collecting information on small business subcontracting achievements. As a starting point, the departments and agencies can determine the subcontracting dollars reported on Individual Subcontracting Report (ISR) submitted in Electronic Subcontracting Reporting System (eSRS) which is administered by GSA. However, ISR data fails to fully 

reflect DON’s small business subcontracting achievement in terms of dollars because 

it does not capture orders under Basic Ordering Agreements, Blanket Purchase 

Agreements, SeaPort-e, or data related to Commercial Subcontracting Plans or the 

Comprehensive Subcontracting Plan Test Program. In addition, eSRS does not capture subcontracting by small business firms nor does it capture subcontracting efforts less than $700,000.00, the threshold for requiring a subcontracting plan. As 

a result, Command specific subcontracting goals cannot be established with any accuracy and, therefore, cannot be used to establish performance metrics. There is another challenge regarding identifying which small businesses which are performing 

subcontracts, especially, where the prime large businesses has a subcontracting plan 

which covers multiple prime contracts. In December 2014, the GAO conducted a 

study (GAO–15–116) on this subject and concluded that actions are being undertaken to facilitate linking small business subcontractors to prime contracts (e.g. Federal Acquisition Regulation (FAR) Clause 52.204–10 which requires prime contractors to report first-tier subcontracts to small businesses of $30,000 to the Federal 

Subaward Reporting System). 

In an effort to improve subcontracting monitoring and compliance oversight, the 

DON Office of Small Business Programs (OSBP) is developing baseline performance 

metrics for the DOD Comprehensive Subcontracting Plan utilizing data obtained 

from the Defense Contract Management Agency’s annually performed FAR and 

DFARS compliance reviews of contractors and the Contractor Performance Assessment Reporting System. It is anticipated these metrics will be in place by March 

31, 2016. Additionally a subcontracting metrics initiative, utilizing eSRS data, is 

being developed to provide contracting officers enhanced visibility to monitor and 

enforce Individual Subcontracting Plan goal achievement on contracts purporting 

the largest DON subcontracting efforts. It is anticipated this action will be completed by the end of Fiscal Year 2016. 

Mr. SHUSTER. In 2012 I helped lead a panel on Business Challenges in the Defense Industry, and at the time one of the issues we discovered was that small and 

midsize businesses face particular challenges in contracting with the Department of 

Defense. At the time of the panel, DOD had been unable to meet its small business 

federal procurement goals. Has this situation changed, to your knowledge, in the 

last three years, and what further steps do you intend to take to ensure participation of small and medium sized businesses in DOD contracting? 

Secretary STACKLEY. The Department of Defense has placed special attention on 

the use of small business consistent with Better Buying Power initiatives and to 

support the White House’s 23 percent small business goal. Because a significant percentage of the Department of Navy’s (DON) budget is dedicated to the procurement 

of ships, aircraft, missiles, and combat vehicles, clearly outside small business, DOD 

determined the Fiscal Year 2015 DON share of the 23 percent goal to be 16 percent 

which DON exceeded. DON’s small business performance for the last three fiscal 

years is as follows: 

Actual Goals 

FY13 15.11% 16.50% 

FY14 16.50% 17.20% 

FY15 18.57% 16.00% 

The DON has taken several actions to ensure small businesses receive maximum 

opportunities to provide quality products, services and solutions to meet the needs 

of our warfighters. As an example, I issued a memorandum in January 2015 assigning each Deputy Program Manager (DPM) as the Small Business Advocate respon-
95 

sible for identifying opportunities within their program for small business participation as well as serving as the technical point of contact for small businesses interested in pursuing these opportunities. This affects 13 Program Executive Offices and 

over 60 DPMs. Through collaboration, interviews, and engagement with industry a 

training curriculum is under development, designed to educate DPMs on their role 

as a Small Business Advocate. The intent is to expand the training to include all 

acquisition career fields. As the DON product lines move to sustainment, the goal 

is to track current vs. future procurement patterns to measure changed behavior. 

DON’s Office of Small Business Programs (OSBP) monitors the Department’s performance through contract award data analysis of the ten major buying commands 

and the 124 subordinate buying activities, which are responsible for the acquisition 

of over $80 billion in DON Procurements annually. OSBP monitors the five socioeconomic categories, small business assessable markets, service portfolios, small 

business set-aside rate, percentage of GSA small business awards and SeaPort-e 

performance. 

The DON is actively working the Acquisition Professional Workforce Development, a DOD initiative. This initiative redefines the professionalism of the entire 

small business workforce through competency analysis, education, training and establishing criteria to develop a professional and respected cadre of Small Business 

Professionals equipped to support the acquisition process to its fullest capability. A 

professional, educated small business workforce will help DON achieve its innovation initiatives and bring in non-traditional suppliers. 

Major components of the program are: (1) building leadership skills (leadership 

development program, functional experience, developmental assignments); (2) building technical skills (formal education, acquisition training, rotational assignments, 

functional experience); and (3) development continuum. 

Implementation initiatives include appropriate policy updates, workforce planning, standards, competency-based training, career development information and requests for requisite resources. While these professionals influence over 20 percent 

of DOD discretionary spending, the small business workforce had not been identified 

as a separate acquisition workforce functional area prior to this designation. The Director of the DON OSBP serves as the Small Business Functional Leader. The 

Small Business Functional Leader’s vision is to transform the small business workforce into a highly skilled, business-oriented force that provides innovative, efficient, 

and effective influence to the Department’s readiness and technological superiority. 

Mr. SHUSTER. One of the concerns I have heard from companies in my district and 

that was also brought to light in our panel on Business Challenges in the Defense 

Industry is that the ever-changing nature of the laws and regulations governing defense acquisitions can make it difficult for companies with limited resources to stay 

abreast of the changes that could impact their business strategies. This places larger companies with teams of contract attorneys at a competitive advantage. How do 

you think we can bring greater streamlining and transparency this maze of rules 

and regulations? 

Secretary STACKLEY. While the acquisition system is a maze of rules and regulations, fortunately not all of the rules and regulations result in a burden to contractors. Many involve internal operating procedures to DOD. To the extent new and 

evolving procurement rules affect contractors, the rules are set forth in the Federal 

Acquisition Regulation (FAR) and the Defense FAR (DFARS) Supplement in title 48 

of the Code of Federal Regulations (CFR) and are available online. The FAR and 

DFARS are living documents, continuously amended to capture the new or revised 

laws set forth in annual authorization acts or other statutes and delete laws which 

are no longer in effect. The FAR and DFARS are organized into 52 chapters and 

are comprehensive, to the point of containing required contract clauses. In most 

cases, FAR or DFARS revisions are published for comment in the Federal Register. 

When a new statute must be implemented in a relative short period of time, FAR 

or DFARS coverage is issued on a temporary basis while public comments are pending. 

Besides the FAR and DFARS for contracts, OMB is in the process of streamlining 

grants and cooperative agreement regulations for all federal agencies by consolidating them into part 2 of the CFR. DOD is now migrating its portions of its agency 

specific grants and agreements regulation from part 32 of the CFR to title 2. 

Mr. SHUSTER. An issue raised by companies doing business with DOD in my district is that there is no incentive for large companies and contractors holding multiple year contracts to seek out the newest, most advanced and less expensive products, even when it would save taxpayers millions of dollars. Is there someone keeping an eye on such advancements when developing projects and upgrades, as well 

as allocating tax payer monies to them? If so, how do they approach this problem? 
96 

Would a move to more open system architecture provide greater flexibility in this 

area? 

Secretary STACKLEY. Certain contracts specify products with well-defined requirements. These products have been qualified via demonstrated acceptable performance 

to fill critical warfighting needs. Other contracts are performance based, which may 

allow greater latitude. In either case, companies are motivated to provide products 

in a manner to maximize their profits. Program Managers keep an eye on advancements, continuing to monitor defense and commercial advancements in technology 

to better align acquisition plans. 

Yes, a move to more open system architecture would provide greater flexibility in 

this area. Open systems architecture (OSA) has been shown to have a definite impact on the integration of new capabilities. Program managers are moving towards 

these practices to ensure that innovations can be adopted in both new and existing 

programs thereby helping to improve capability and reduce cost. The standard in 

the Department of the Navy is that new systems in development will be open by 

design. 

Mr. SHUSTER. One of the concerns I have heard from my district is that there is 

a lack of visibility for smaller contract suppliers, and that often the relevant people 

at the Pentagon are not necessarily aware of the benefits or drawbacks of some 

smaller components purchased as part of a larger contract. Indeed, the 2012 panel 

on Business Challenges in the Defense Industry that I helped lead found that DOD 

lacks the ability to track small business participation at the lower subcontract tiers. 

Do you think this is still the case? And how do you believe we can properly ensure 

that if a smaller company makes a good product, it is properly recognized when so 

much of the focus is on bigger ticket items? 

Mr. LOMBARDI. Although current statutory provisions do not allow us insight into 

lower sub contract tier data, we have increased competition and small business participation in our acquisitions. However, it is recognized that additional opportunities 

exist to improve competition and leverage small business across the Air Force enterprise. 

Mr. SHUSTER. In 2012 I helped lead a panel on Business Challenges in the Defense Industry, and at the time one of the issues we discovered was that small and 

midsize businesses face particular challenges in contracting with the Department of 

Defense. At the time of the panel, DOD had been unable to meet its small business 

Federal procurement goals. Has this situation changed, to your knowledge, in the 

last three years? 

Mr. LOMBARDI. As of 2015, the Department of Defense (DOD) is not meeting small 

business subcontracting goal of 34.5%. In order to meet the department-wide small 

business goal, the DOD Office of the Small Business Programs sets challenging, but 

realistic, goals for the DOD Components. The Air Force has met Office of the Secretary of Defense (OSD)-set component goals for the past two years. In FY14, the 

Air Force exceeded the small business prime contracting goal for the first time ever, 

resulting in over $54B of contracts with small businesses and representing 23.47% 

of all DOD procurement funding for the fiscal year. Unofficial results for FY15 indicate the Air Force will exceed 24% of Small Business contracts for DOD procurement. Although the DOD does not assign component level small business subcontracting goals, the DOD goal is to achieve at least 34.5% subcontracting to small 

business from DOD prime contractors. The department also strives to meet the four 

aspirational socioeconomic goals, such as the 5% prime contracting with women 

owned small business (WOSB). 

Mr. SHUSTER. What steps need to be taken to ensure participation of small and 

medium-size business? 

Mr. LOMBARDI. To ensure participation, the Air Force Office of Small Business 

Programs (USAF OSBP) is expanding and improving the training provided to small 

business professionals, encouraging compliance with subcontracting plans and utilization of small business participation plans, and engaging in aggressive outreach to 

purchasing organizations to educate on small business capabilities. The USAF 

OSBP, in addition to continually improving internal processes and procedures in response to advances in technology, plans to improve upon and increase the number 

of Mentor-Prote ́ge ́ agreements and advocate for the use of SBIR/STTR programs. 

Mr. SHUSTER. One of the concerns I have heard from companies in my district and 

that was also brought to light in our panel on Business Challenges in the Defense 

Industry is that the ever-changing nature of the laws and regulations governing defense acquisitions can make it difficult for companies with limited resources to stay 

abreast of the changes that could impact their business strategies. This places larger companies with teams of contract attorneys at a competitive advantage. How do 

you think we can bring greater streamlining and transparency this maze of rules 

and regulations? 
97 

Mr. LOMBARDI. The Air Force Office of Transformational Innovation (OTI) is 

spearheading an initiative called AQ′-Cognitive Computing that will create a publicly-available information resource that utilizes advances in artificial intelligence to 

help navigate acquisition laws, policies, and regulations. This system will use an 

easy-to-understand natural language query system that will help acquisition professionals as well as the business community. Many of the barriers small businesses 

face when partnering with the federal government could be removed by providing 

this clear and intuitive system to understand the requirements of and flexibility 

within the DOD contracting statutes, regulations, practices, and policies. 

Mr. SHUSTER. An issue raised by companies doing business with DOD in my district is that there is no incentive for large companies and contractors holding multiple year contracts to seek out the newest, most advanced and less expensive products, even when it would save taxpayers millions of dollars. Is there someone keeping an eye on such advancements when developing projects and upgrades, as well 

as allocating tax payer monies to them? If so, how do they approach this problem? 

Would a move to more open system architecture provide greater flexibility in this 

area? 

Mr. LOMBARDI. In line with DOD’s Better Buying Power 3.0 initiative, the Air 

Force incentivizes procurement of innovative less expensive products and services 

at various levels within our acquisition community. We emphasize technology insertion and refresh in program, planning, use Modular Open Systems Architecture to 

stimulate innovation, and utilize enhanced competition techniques such as market 

intelligence, pursue procurement of necessary data rights, and the development of 

alternate sources. 

QUESTIONS SUBMITTED BY MR. COFFMAN 

Mr. COFFMAN. With regards to the C–130 AMP Increment 1, can you explain why 

a recent RFP to pursue the required air traffic control upgrade requested a separation of integration and installation efforts? Would this sort of procurement be a good 

opportunity for utilizing a combined commercial approach? Finally, could you please 

provide an explanation of the estimated costs of the AMP–1 program? 

Mr. LOMBARDI. The C–130H AMP Increment 1 strategy separates integration and 

installation. The separation followed several industry days and robust dialogue with 

industry. Based on industry response and market research indicating two or more 

capable small businesses, integration will be competitively awarded to a small business. Installations will be competitively awarded through the Air Force Sustainment 

Center’s Contract Field Team (CFT) contract, which offers lower costs. CFT contractors have proven track records for similar C–130 modifications and have demonstrated ability to meet schedule requirements. While a combined commercial approach was considered utilizing the existing lower cost Air Force Sustainment Center’s CFT contract offers the best value for the government. 

Finally, the Air Force investigated multiple options available to reduce costs for 

the C–130H AMP Increment 1 effort, including procurement of mature technologies, 

use of existing Commercial Off-The-Shelf (COTS) solutions, and installation efficiencies. The Program Office cost estimates have been updated, leveraging industry 

dialogue and COTS-based solutions. This selected strategy also permitted the Air 

Force to accelerate the fielding of these important upgrades to meet the January 

2020 mandate. Updated program funding and schedule is reflected in the Fiscal 

Year 2017 President’s Budget. 

Mr. COFFMAN. Mission success is of the upmost importance to the Department of 

Defense, and the Department has historically driven contracting practices to ensure 

quality and high performance of systems and platforms. Certification processes and 

military specification standards have been continually refined through lessons 

learned and reflect the marquee standards necessary to protect our national security 

interests. In some circumstances cost-saving procurement approaches featuring 

streamlined process and reduced bureaucracy introduce additional risk into the 

process. For example, last June, very shortly after a rocket was certified in an accelerated fashion by the Air Force, the rocket exploded on its very next launch attempt. This same rocket has now been re-engineered to include larger thrust, and 

a new propellant, yet the provider is challenging the need for a new Air Force certification of the rocket. How can DOD address the need for streamlined procurements and reduced bureaucracy without jeopardizing mission success and national 

security? 

Mr. LOMBARDI. The DOD has a well-defined developmental process grounded in 

statue and implemented by DOD Instruction 5000 which allows for the balancing 

of Public Safety, National Security, Mission Success, Cost and Schedule concerns. 
98 

The DOD developed systems proceed through developmental and operation test programs to ensure that these systems meet the needs of the nation with maximum 

streamlining, minimal required bureaucracy and prudent risk taking on the part of 

the program managers. 

Additionally, in Air Force Instruction 63–101 Acquisition and Sustainment Life 

Cycle Management, current Air Force policy allows acquisition program tailoring to 

accommodate the unique characteristics of a program while still meeting the statutory and regulatory needs for oversight and decision making and ensuring the program is able to provide the needed capability to the warfighter in the shortest practical time and balance risk. 

In regards to the specific space example referenced above, National Space Transportation Policy, approved November 21, 2013, states that U.S. commercial space 

transportation capabilities that demonstrate the ability to launch payloads reliably 

will be allowed to compete for United States Government missions on a level playing 

field, consistent with established interagency new entrant certification criteria. The 

Air Force certification process is defined in the United States Air Force Launch 

Services New Entrant Certification Guide (NECG) published in 2011. The NECG 

provides a risk-based approach with four certification options based on maturity of 

the launch system. Despite the SpaceX launch failure June 28, 2015, SpaceX remains certified to compete for and win the award of National Security Space (NSS) 

missions. A failed mission does not automatically drive a revisit to a certification 

decision or a revocation of a certification. A launch system remains certified unless 

a process or design change, or some other certification factor (such as manufacturing 

quality, for example), causes the certification authority (SMC/CC) to determine that 

the launch system or provider is no longer certified. 

Æ