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32–972 2007

[H.A.S.C. No. 109–106]

REVIEW OF MAJOR DEFENSE

ACQUISITION REFORM INITIATIVES

HEARING

BEFORE THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

HEARING HELD

APRIL 5, 2006
(II)

HOUSE COMMITTEE ON ARMED SERVICES

ONE HUNDRED NINTH CONGRESS

DUNCAN HUNTER, California, Chairman

CURT WELDON, Pennsylvania

JOEL HEFLEY, Colorado

JIM SAXTON, New Jersey

JOHN M. MCHUGH, New York

TERRY EVERETT, Alabama

ROSCOE G. BARTLETT, Maryland

HOWARD P. ‘‘BUCK’’ MCKEON, CALIFORNIA

MAC THORNBERRY, Texas

JOHN N. HOSTETTLER, Indiana

WALTER B. JONES, North Carolina

JIM RYUN, Kansas

JIM GIBBONS, Nevada

ROBIN HAYES, North Carolina

KEN CALVERT, California

ROB SIMMONS, Connecticut

JO ANN DAVIS, Virginia

W. TODD AKIN, Missouri

J. RANDY FORBES, Virginia

JEFF MILLER, Florida

JOE WILSON, South Carolina

FRANK A. LOBIONDO, New Jersey

JEB BRADLEY, New Hampshire

MICHAEL TURNER, Ohio

JOHN KLINE, Minnesota

CANDICE S. MILLER, Michigan

MIKE ROGERS, Alabama

TRENT FRANKS, Arizona

BILL SHUSTER, Pennsylvania

THELMA DRAKE, Virginia

JOE SCHWARZ, Michigan

CATHY MCMORRIS, Washington

MICHAEL CONAWAY, Texas

GEOFF DAVIS, Kentucky

IKE SKELTON, Missouri

JOHN SPRATT, South Carolina

SOLOMON P. ORTIZ, Texas

LANE EVANS, Illinois

GENE TAYLOR, Mississippi

NEIL ABERCROMBIE, Hawaii

MARTY MEEHAN, Massachusetts

SILVESTRE REYES, Texas

VIC SNYDER, Arkansas

ADAM SMITH, Washington

LORETTA SANCHEZ, California

MIKE MCINTYRE, North Carolina

ELLEN O. TAUSCHER, California

ROBERT A. BRADY, Pennsylvania

ROBERT ANDREWS, New Jersey

SUSAN A. DAVIS, California

JAMES R. LANGEVIN, Rhode Island

STEVE ISRAEL, New York

RICK LARSEN, Washington

JIM COOPER, Tennessee

JIM MARSHALL, Georgia

KENDRICK B. MEEK, Florida

MADELEINE Z. BORDALLO, Guam

TIM RYAN, Ohio

MARK UDALL, Colorado

G.K. BUTTERFIELD, North Carolina

CYNTHIA MCKINNEY, Georgia

DAN BOREN, Oklahoma

ROBERT L. SIMMONS, Staff Director

JEFF GREEN, Professional Staff Member

ANDREW HUNTER, Professional Staff Member

HEATHER MESSERA, Staff Assistant
(III)

C O N T E N T S

CHRONOLOGICAL LIST OF HEARINGS

2006

Page

HEARING:

Wednesday, April 5, 2006, Review of Major Defense Acquisition Reform Initiatives ....................................................................................................................... 1

APPENDIX:

Wednesday, April 5, 2006 ....................................................................................... 49

WEDNESDAY, APRIL 5, 2006

REVIEW OF MAJOR DEFENSE ACQUISITION REFORM INITIATIVES

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Hunter, Hon. Duncan, a Representative from California, Chairman, Committee on Armed Services ......................................................................................... 1

Skelton, Hon. Ike, a Representative from Missouri, Ranking Member, Committee on Armed Services .................................................................................... 3

WITNESSES

Giambastiani, Adm. Edmund P., Jr., Vice Chairman of the Joint Chiefs of

Staff, U.S. Navy ................................................................................................... 10

Krieg, Hon. Kenneth J., Under Secretary of Defense (Acquisition, Technology

& Logistics) ........................................................................................................... 7

Patterson, J. David, Principal Deputy Under Secretary of Defense (Comptroller) ......................................................................................................................... 12

Walker, Hon. David M., Comptroller General of the United States, United

States Government Accountability Office .......................................................... 4

APPENDIX

PREPARED STATEMENTS:

Giambastiani, Adm. Edmund P., Jr. ............................................................... 98

Hunter, Hon. Duncan ....................................................................................... 53

Krieg, Hon. Kenneth J. .................................................................................... 77

Patterson, J. David ........................................................................................... 104

Skelton, Hon. Ike .............................................................................................. 57

Walker, Hon. David M. .................................................................................... 59

DOCUMENTS SUBMITTED FOR THE RECORD:

[There were no Documents submitted.]

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:

Mr. Andrews ..................................................................................................... 114

Mr. Calvert ........................................................................................................ 113

Mrs. Drake ........................................................................................................ 114

Mr. Kline ........................................................................................................... 115

Mr. Marshall ..................................................................................................... 113
Page

IV

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD—CONTINUED

Mr. Miller .......................................................................................................... 114

Mr. Skelton ....................................................................................................... 113

Dr. Snyder ......................................................................................................... 113
(1)

REVIEW OF MAJOR DEFENSE ACQUISITION REFORM

INITIATIVES

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, DC, Wednesday, April 5, 2006.

The committee met, pursuant to call, at 10 a.m., in room 2118,

Rayburn House Office Building, Hon. Duncan Hunter (chairman of

the committee) presiding.

OPENING STATEMENT OF HON. DUNCAN HUNTER, A REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE

ON ARMED SERVICES

The CHAIRMAN. Good morning. The committee will come to order.

And this morning the committee will continue its oversight of the

defense acquisition system by receiving testimony from senior leaders of the Department of Defense and Government Accountability

Office.

Our witnesses today are the Honorable David Walker, Comptroller General of the United States; the Honorable Kenneth J. Krieg,

Under Secretary of Defense for Acquisition, Technology and Logistics; Admiral Edmund P. Giambastiani——

Admiral GIAMBASTIANI. Giambastiani.

The CHAIRMAN. Giambastiani—I am sorry, Admiral, excuse me—

Jr., Giambastiani, Jr., Vice Chairman, Joint Chiefs of Staff; and

Mr. J. David Patterson, Deputy Under Secretary of Defense, Comptroller.

So welcome to the committee, gentlemen.

In 1986, the President’s Blue Ribbon Commission on Defense,

more commonly known as the Packard Commission, recognized the

challenges facing the defense procurement system. The commission

found that ‘‘our weapons systems cost too much and take too long

to develop.’’ The report went on to note that defense programs ‘‘embody not only overstated requirements but also understated costs.’’

Finally, it noted that the process ‘‘does not adequately involve participants with a sophisticated knowledge of the cost and schedule

implications of technical improvements.’’

Now, 20 years later, four major studies were recently released

that conclude essentially the same things: Weapons systems still

cost too much and take too long to develop; requirements are still

overstated, and cost estimates are understated.

Last week, the committee met to hear from representatives of

three of these 2005 studies on acquisition reform, and today we

look forward to hearing how the Department of Defense is approaching this decades-old problem. One thing is certain: This issue
2

is extraordinarily complex and the numerous recommendations for

reform found in those studies provide no simple solutions.

To better understand the issues, the committee believes it is vital

to hear what the Department of Defense plans to do with these volumes of recommendations. Each of our witnesses today will speak

to these recommendations in their roles representing the three

main components of the acquisition process.

Admiral Giambastiani, in his role as chairman of the Joint Requirements Oversight Council, JROC, is responsible for coordinating, on behalf of all Combatant Commanders, the numerous capabilities sought by our warfighters through the requirements process.

Secretary Krieg then must ensure that the Department undertakes the appropriate acquisition strategy to ensure that costs of

system development are kept under control and that we are pursuing new systems that are technologically attainable and affordable.

And, finally, Mr. Patterson, here representing the OSD comptroller, has the responsibility of maneuvering through the long and

complex planning, programming, budgeting and execution process,

PPB&E.

Today’s hearing will be an in-depth look into the entire acquisition process from the Department’s key stakeholders and the Government Accountability Office (GAO). The committee is fortunate

to have assembled these four witnesses to get a comprehensive

view of the way ahead for defense acquisition reform.

So, gentlemen, we are pleased that you are here today. We look

forward to your testimony.

And let me just say as an aside a thought here, that we have

seen the Quadrennial Defense Review (QDR), we are putting together our own Committee Defense Review, and it appears to me

that probably more than ever in recent history the acquisition process now has a major, major role in the overall blueprint for America’s security future, because we have potential adversaries, like

China, which I think is moving into the superpower shoes left by

the Soviet Union, which has a robust and developing industrial

base and the ability, thereby, to acquire not only the domestic products that they are expanding on an annual basis but also to move

that capability, that robust, industrial manufacturing and technology capability into the defense sector.

And at some point, if we have to match production or we have

to match systems, we will be facing a potential adversary with an

enormously efficient production capability, and we will be facing

that with our own system, which turns out $3 billion-plus DD(X)s

and fighter aircraft well over $100 million and attack boats well

over $2 billion. And acquisition inefficiencies may, in the end, drive

American vulnerabilities more than any other dimension of America’s national security complex or structure.

So what you are doing and what you are commenting on today

is very, very critical to the security future of the United States,

maybe not in the current conflicts in the warfighting theaters, although moving technology quickly into the field to get warfighters

the tools that they need is obviously very, very important in the

war against terror, the ability to be agile and to be responsive to

warfighters.
3

But on the horizon, this ability to have an efficient acquisition

industrial base for defense capabilities is going to be increasingly

critical, and the look that I have taken, and I think most members

of the committee have taken, at the price tags on major systems,

giving everyone a pretty severe case of sticker shock, I think,

leaves us—we always remember that statement that was made by

one of the aerospace leaders at one time that at some point this

country is going to have to figure out which ship it is going to buy

that year and which airplane it is going to buy. And of course he

said that facetiously. But looking at the price tag on some of these

major systems we may see some truth in that.

So having laid that out, thank you so much, gentlemen, for being

with us this morning.

Let me turn to the ranking member, Mr. Skelton, for any remarks he would like to make. And then, Admiral Giambastiani, we

will turn to you for remarks.

[The prepared statement of Mr. Hunter can be found in the Appendix on page 53.]

STATEMENT OF HON. IKE SKELTON, A REPRESENTATIVE

FROM MISSOURI, RANKING MEMBER, COMMITTEE ON

ARMED SERVICES

Mr. SKELTON. Mr. Chairman, thank you. I think you are right,

we are very blessed with the panel today and hope we will be able

to carry from their testimony some wisdom as to where we go.

The Department of Defense and its affiliated organizations recently produced four reports on this subject, and, as you know, this

is our second hearing on acquisitions that we have had in two

weeks.

Last week, I stated that the acquisition system had gotten seriously off track, and I am not going to go into great details. I will

say that before we make any serious decisions, we are going to

have to have hearings and people such as you to help us assess

how to fix the problem. If we can’t leave this room today with a

clear idea how we are going to fix these problems, then we haven’t

performed our duty very well.

The committee staff has laid out for us a chart comparing the

recommendations of the four studies I mentioned. In three areas,

these studies reached total consensus. It seems that should give us

at least a place to start. All four of the studies recommend that

much more weight be given to requirements generated by the combat commanders in the acquisition process. This isn’t brain surgery. That should make sense.

They all recommend a comprehensive restructuring of the Joint

Capabilities Integration and Development System, which they indicate is broken. And all four studies recommend that something

needs to be done to increase the funding stability for acquisition

programs.

These studies each had a slightly different take on how to tackle

the problem, but it is clear that these problems need to be solved,

and the sooner the better.

I look forward to hearing the proposals of the witnesses. I am interested especially in hearing about your recommendations on legislation that we need to consider, particularly legislation we need
4

to consider during the markup of the Defense Authorization Act

that we will be marking up in the next few weeks. This is serious

business, and we appreciate your serious help today.

Thanks, Mr. Chairman.

[The prepared statement of Mr. Skelton can be found in the Appendix on page 57.]

The CHAIRMAN. I thank the gentleman.

Mr. Walker, we are going to start with you. I have been informed

that the panel would like to go left to right here. Entirely appropriate, so thanks for being with us. Thanks for the work you have

done in this area too. You have put a lot of focus on it. We appreciate that and appreciate the folks on your team.

The floor is yours, sir.

STATEMENT OF HON. DAVID M. WALKER, COMPTROLLER GENERAL OF THE UNITED STATES, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

Mr. WALKER. Chairman Hunter, Ranking Member Skelton, members of the committee, I am pleased to be here today, as well as

to be on this distinguished panel, to discuss how the Department

of Defense can get a better return on investment of taxpayer dollars and why we must ensure that they be held accountable for

doing so.

The Department of Defense (DOD) has a mandate to deliver

high-quality products to our warfighters when they need it and at

a price that the country can afford.

I plan to use three boards, Mr. Chairman and members of the

committee, which I will refer to a little bit later in my testimony,

to reinforce the importance of the subject we are dealing with

today.

Cost is critical, given current long-term budget forecasts, which

indicate that the Nation will not be able to sustain its currently

planned level of investment in weapons systems. As our work has

shown, DOD is simply not positioned to deliver high-quality products in a timely and cost-effective fashion.

Specifically, DOD has a longstanding track record of over-promising and un-delivering with virtual impunity. DOD’s continued inability or unwillingness to separate wants from needs, incur cost

increases of tens of millions of dollars and schedule delays of years

must be addressed. The all too frequent result is that large and expensive programs are continually rebaselined, cut back or even

scrapped after years of failing to achieve promised capability. This

business-as-usual approach is inappropriate and should not be tolerated.

The supply of dollars available for weapons acquisitions is likely

to decline in the next few decades as the Nation struggles to cope

with large and growing structural deficits that threaten our future

economy, standard of living and even potentially our national security.

The first poster board shows that discretionary spending has declined dramatically over the last 40 years. The next poster shows

very clearly that the supply of dollars available for the Defense Department, other areas of government and for weapons systems is

likely to come under increasing pressure and likely to decline in
5

the next few decades as the Nation struggles to address large and

growing structural deficits.

The CHAIRMAN. I would like for you to explain that chart a little

bit. It is hard to see the writing from here.

Mr. WALKER. Yes, sir, Mr. Chairman. It is. I think it may be in

my testimony. I believe it is, but let me try to explain it.

The bar represents spending as a percentage of the economy, and

it is divided up into Social Security, Medicare, Medicaid, all other

spending and net interest. The line represents revenues as a percentage of the economy, and so inflation is taken out.

I note here, by the way, that there is a color coding problem. The

blue should be interest, and the—the yellow and the blue ought to

be flipped here, so I apologize for that.

The CHAIRMAN. Which one is defense? Have you got defense on

the——

Mr. WALKER. Defense is part of the green, Mr. Chairman.

The CHAIRMAN. Okay.

Mr. WALKER. Defense is all other discretionary spending, which

you know is——

The CHAIRMAN. Roughly half of the green, right.

Mr. WALKER. Right, national security, homeland security, education, transportation. You well know what is in there.

Here is my point, Mr. Chairman: This is based upon two assumptions, which may or may not prove to be valid but which are plausible. If discretionary spending grows by the rate of the economy

and if all tax cuts are made permanent and if all other assumptions made by the Congressional Budget Office prove to be valid,

this is our future. Our future is that the most growing cost in the

Federal budget is interest in the massive Federal debt. Even if——

The CHAIRMAN. Okay.

Mr. WALKER. Yes.

The CHAIRMAN. And I hate to—I know we have got a lot of panelists here, but let’s go back to your first chart, if you can put that

up.

Mr. WALKER. Yes, sir.

The CHAIRMAN. On the first chart, I was a little bit surprised because you have 1965, 1985 and 2005 and you had a bump—the

blue is interest.

Mr. WALKER. Yes, sir.

The CHAIRMAN. Basically, 2005 is the same as 1965, 40 years

ago. That is not reflected in the second chart. Pop that second chart

back up, which shows it going up like a rocket.

Mr. WALKER. And let me tell you why, Mr. Chairman.

The CHAIRMAN. Okay.

Mr. WALKER. First, on the first chart that you properly pointed

out, we are paying about the same percentage of the budget for interest today that we were in 1965. The reason we paid so much

higher in 1985 is, as you recall, interest rates were much, much

lower at that point in time. Now, interest rates are relatively low.

At the same point in time, we are adding debt at record rates.

Therefore, because of adding debt at record rates because of large

and growing structural deficits, this is what is expected to happen

with interest in the future.
6

So the first chart was the past; this chart is the future. And, by

the way, this chart does not assume an uptick in interest rates if

one were to occur, a dramatic uptick in interest rates. Because, as

you know, we are getting the source of all of our financing for debt

from overseas now.

The CHAIRMAN. Okay. Please proceed. Thank you.

Mr. WALKER. Thank you, sir. I appreciate that.

At the same time, however, weapons programs are commanding

larger budgets, as DOD undertakes increasingly ambitious efforts.

My last board shows the DOD’s five most expensive programs—

Joint Strike Fighter, Future Combat System, Virginia class submarine, DDG–51 and the FA–22—have already overrun original estimated costs by 29 percent. That is to date, and the clock is still

ticking.

Unfortunately, such cost overruns are all too typical and historically they have wrecked havoc on any attempt to maintain stability

needed for effective program management. Taken together, the resulting unanticipated funding demands are running head on with

the nation’s unsustainable fiscal path. More money is not the answer; better outcomes are needed.

DOD knows how to get better outcomes for its acquisition dollars. The answers must lie, in part, in tackling the so-called ‘‘big

A’’ process; that is, reconciling the difference between unlimited

wants with true threat and risk-based needs, consistent with current and likely resource levels. DOD has repeatedly indicated, both

in its presentations to you and its response to GAO’s recommendation, that it will do better, and they are trying.

Believe me, Under Secretary Krieg and other members of the

panel are dedicated to change, but many times change is not forthcoming to any meaningful extent.

DOD has repeatedly commissioned more and more studies in lieu

of dramatic changes in actual line activities. Although we have

seen some positive changes in policy and we know that people are

committed to improvement, actual practice on the line, to a great

extent, is business as usual.

We must engage in a comprehensive and fundamental reexamination of existing and new proposed investments in our nation’s

weapons systems. We must better align the military’s wants with

our nation’s needs and its ability to fund them.

Once DOD’s leadership makes the hard tradeoffs, and I might

here, Mr. Chairman, the Congress has a critically important role

to play because the Congress sometimes is putting demands on the

Department, which complicates this task. Once DOD’s leadership

makes the hard tradeoffs, hopefully in consultation with and in cooperation with the Congress, the acquisition community must develop executable programs with realistic and definitive requirements being set upfront. Only then can all responsible parties be

truly held accountable.

I am testifying this afternoon on a report we recently issued that

shows just how far off our accountable paradigm has gotten. For

example, a recent GAO report noted that many current major

weapons systems programs continue to suffer the same cost overruns and schedule delays, and another recent GAO report notes

that DOD paid over $8 billion in incentive and award fees in situa-
7

tions where the program outcomes did not match DOD and contractor promises.

But change is essential, and the Congress should insist on it.

Mr. Chairman, you and members of the committee can help by

supporting DOD as it seeks to rationalize the many wants versus

the real needs and in a manner consistent with the nation’s fiscal

realities.

And I hate to say it, Mr. Chairman, but I actually think that the

‘‘big A’’ delta is worse after the last QDR than it was before. There

are very touch choices that need to be made.

I am more than happy to answer any questions you and the

other members may have, and I am looking forward to hearing

from my co-panelists.

[The prepared statement of Mr. Walker can be found in the Appendix on page 59.]

The CHAIRMAN. Thank you, Mr. Walker, for a very crisp statement there.

Secretary Krieg.

STATEMENT OF HON. KENNETH J. KRIEG, UNDER SECRETARY

OF DEFENSE (ACQUISITION, TECHNOLOGY AND LOGISTICS)

Secretary KRIEG. Chairman Hunter, Congressman Skelton, members of the committee, thank you for the opportunity to appear

with my colleagues before you today to discuss acquisition reform.

As you noted, in the last few months, several studies have been

released. The Department is evaluating the best path forward to

implement a number of the initiatives and recommendations from

these studies to benefit our number-one customer, the joint

warfighter.

Today, I will briefly describe in my opening statement what we

are doing to change the way the Department of Defense governs,

manages and——

The CHAIRMAN. Okay, Mr. Secretary. And while you are at it, all

written statements by our witnesses will be taken into the record.

So feel free to summarize as your written statement will be in the

record.

Secretary KRIEG. I am going to summarize it, but there are a

couple key points I want to get on the table so that you can understand the context.

We have been working on this for several months. Our goal is to

make a clearer and more transparent link from strategy to outcomes. The approach will delineate decision-making responsibilities

of governance, management and the execution levels of the Department of Defense. This will enable senior leadership to focus on

strategic choice and empower management to carry out their responsibilities in a manner that ensures transparency, accountability and sound performance management.

As part of this effort, we will work to improve the Department’s

analytic framework, build more transparent business information

systems across the Department, integrate decision processes to enable strategic choice and align roles and responsibilities in a way

that maximizes decision-making effectiveness across the enterprise.

We plan to enhance our strategic governance capabilities by

clarifying lines and responsibilities and accountability and estab-
8

lishing a closer, more effective relationship among the key business

processes in the Department. As you noted, this includes the requirements generation system, planning, programming and budgeting, an execution system and defense acquisition. The three of

them together represent the ‘‘big A.’’

The Department is planning, programming, budgeting and execution process is key to ensuring efficient and effective acquisition.

Budgeting for acquisition programs requires managers to continuously balance tradeoffs among cost, schedule and performance until

we can attain an acceptable level of risk and assure affordable capabilities.

Unstable funding makes this balancing process elusive and can

result in schedule slips, less optimum production rates and other

efficiencies that result in cost overruns.

We must also, though, be willing to wait until technologies are

mature enough and performance requirements and designs are stable. I also realize that there are factors outside that we cannot control, and we, as the acquisition organization, must remain flexible

in order to balance risk so that our nation’s overall needs are met.

Collectively, we are implementing several initiatives to achieve

these goals. I will briefly touch on some; the written lays them out

in great detail.

The first initiative breaks down the investment decision process

to three levels of capability decisions, each informing the next. The

first is strategic choice; second, portfolio choice; and then, third,

weapons systems choice.

At the corporate level or enterprise level, Department of Defense

level, strategic choice. Senior decision-makers must balance and

choose among priorities across portfolios. The focus is on operational effects and a determination of what types of capability portfolios and how much of those capabilities are needed?

The level within a capability area is portfolio choice. And in that,

we must balance the capabilities within a portfolio to provide the

most effective mix to deliver desired effects, and we will be glad to

talk to you at length. We will be experimenting with several joint

capability portfolio management approaches this year as part of the

implementation of QDR.

Finally, at the systems level, systems choice is the determination

of the best solution to provide the needed capability but by balancing performance requirements with cost, schedule and technical

risk.

That was the heart of the Packard Commission recommendation,

it is the heart of many of the recommendation in the other reports

that have been issued recently.

Building on the last point, the second initiative we have under

way is a pilot effort called concept decision. This is a decision point

where the DOD requirements community, acquisition community

and resource processes converge at the point of investment. Our

goal here is to bring together each of these process leaders to drive

early tradeoffs among cost, schedule and performance.

The third initiative is a time-defined acquisition, which focuses

on the need in time of that warfighter. This initiative envisions employing risk-based criteria to determine which of the three different

but related acquisition approaches should be selected to satisfy the
9

capability of the requirement. And those criteria—and we will be

glad to describe those later—include technical maturity, time needed to delivery and requirement certainty.

The best solution for the joint operator is not necessarily the sum

of the best solutions for each of the services and agencies. This set

of first three initiatives is designed to bring the multiple efforts of

the Department together, look at them from the perspective of the

joint operator and, as necessary, rearrange the portfolios and investment.

The fourth initiative we have under way is in our Defense Business System. DOD has recently taken steps to improve our business practices, processes and systems. We aim to create streamlined, end-to-end integration of our supply chain, greater financial

transparency and improved personnel knowledge, among others.

These efforts and the governance process developed to guide them

or describe in some detail in an enterprise transition plan, which

we sent the second edition to you all, I think, about two weeks ago.

The fifth initiative under way involves streamlining and improving the Defense Acquisition Board, or DAB, process. The DAB process should work to establish a common set of facts, bring the issues

into sharp relief so senior leaders can make decisions. To move

from where we are to where we should be, I have commissioned a

group of senior executives to use Lean Six Sigma techniques to examine the oversight process and documentation requirements for

the DAB process.

I have asked them for their recommendations that will reduce

cost in time, while improving the effectiveness of oversight by the

end of this month.

All these initiatives are within the Department’s current authority, I believe. If we determine that some of these initiatives require

legislative relief, I will gladly work with the committee to do that.

But we also, of course, be glad to keep you apprised of these initiatives as we go forward.

Several other points. We must consider the overall investment

portfolio for science and technology. To that end, the Congress has

been very helpful in the near term in providing funds for Combating Terrorism Task Force the quick reaction special projects. And

this committee, I know, has been very interested in those areas,

and thank you for your support.

In addition, the Department’s supply chain is now a strategic

weapon, or should be. The Department is pursuing a number of

strategic supply chain initiatives, including expanding the joint

supply chain distribution by establishing Transportation Command

(TRANSCOM) as the distribution process owner and by strengthening my position as the defense logistics executive. Together we are

making the joint supply chain more responsive. And, in fact, joint

supply chain is one of those joint capability portfolios that we will

work on this year in that experiment I described earlier.

Last, I just wanted to note for the opening that our workforce is

key to making this happen. Our acquisition technology and logistics

workforce analysis and the human capital strategic planning efforts

to grow it over time or to develop it over time are progressing. I

will be publishing the first DOD acquisition technology and logistics human capital strategic plan in January, and I know this com-
10

mittee is interested in that, and we will look forward to working

with you.

In closing, Mr. Chairman, there is much under way in improving

the effectiveness and efficiency of the Department of Defense. We

are committed, and I personally am very committed to this program of change.

Thank you for the opportunity to be here today, and we look forward to answering your questions.

[The prepared statement of Secretary Krieg can be found in the

Appendix on page 77.]

The CHAIRMAN. Thank you, Secretary Krieg.

Admiral Giambastiani, thank you, sir. Thanks for all the work

you have done over the years in this important area. Obviously, the

challenge at this point is huge.

Admiral GIAMBASTIANI. Yes, sir.

The CHAIRMAN. Thanks for being with us this morning.

STATEMENT OF ADM. EDMUND P. GIAMBASTIANI, JR., VICE

CHAIRMAN OF THE JOINT CHIEFS OF STAFF, U.S. NAVY

Admiral GIAMBASTIANI. Thank you, Chairman Hunter, Mr. Skelton and other members of the distinguished committee.

I am pleased to be here today to testify again this morning. In

particular, though, I would like to take just a moment on behalf

of our soldiers, sailors, airmen and Marines and their families to

thank each and every one of you for this strong bipartisan support

that you bring to our armed services.

I will truncate my discussion, I will cull it down, but there are

some important points, though, Chairman, that I think I have to

make here in the verbal part of this.

The CHAIRMAN. Absolutely.

Admiral GIAMBASTIANI. Improving our ability, if you will, in the

requirements and acquisition process to deliver capabilities for that

joint warfighter is a key element of the Department’s ongoing agenda. This transformation imperative informed the Quadrennial Defense Review’s direction on business process reforms that Under

Secretary Krieg talked about. These business process reform efforts

will be driven by a series of what we call QDR execution roadmaps

and overseen collaboratively by the senior leadership of the Department of Defense, co-chaired by Deputy Secretary England and myself in what we call the Deputies Advisory Working Group.

In my testimony today, I would like to focus on the role of the

requirements process and what it should play in acquiring these

truly joint capabilities and the efforts that we, on the JROC, and

also on the Defense Acquisition Board have undertaken to achieve

this goal. So I am going to try to talk about the JROC and the DAB

here for just a moment.

As a prelude to this, numerous reviews of the acquisition process

that you have talked about have pointed to key aspects of the requirements generation process. You referred to it, Mr. Chairman,

in your opening statement, as did Mr. Skelton. And this process

has driven up costs and delayed delivery. Among these cost drivers

are the establishment of what I would call unrealistic or

unachievable requirements and then the evolution or creep of requirements over time.
11

The first time, unrealistic requirements, reflects an aspiration

that science and technology, or S&T, will advance in time to deliver

a desired future capability. We do not have unlimited money, and

we don’t have unlimited time to deliver these.

It is often an aspect of programs with inherently long lead times,

such as some in shipbuilding and aviation stealth programs, for example.

The second problem, requirements creep, occurs when technology

advances faster than our acquisition process expects, often in those

areas in which the commercially driven research and development

outpaces that in the Department in areas such as communications

or information technology.

In both cases, they result from a laudable desire to deliver the

best possible state-of-the-art capability to the joint warfighter, but

they also result in inefficient and expensive programs, which often

deliver late, as you have heard, and sometimes deliver not at all.

This is the state-of-the-art versus the state-of-the-practical is what

I am talking about.

The CHAIRMAN. Yes. Our staff director, Mr. Simmons, used to be

Chief Executive Officer (CEO) of Ketema Aerospace, and he called

this, this is when you get all your engineers in a room and you

break their pencils.

Admiral GIAMBASTIANI. Yes, sir.

The CHAIRMAN. Right?

Admiral GIAMBASTIANI. Exactly. And you take their pads away.

[Laughter.]

In our efforts to improve this requirements process, we on the

JROC and also on the Defense Acquisition Board are working collaboratively and very closely—I would say that Under Secretary

Krieg and I would probably describe this as being locked at the

hip—to craft a process which achieves a series of objectives. I am

only going to read two. There are more in my written testimony.

To link requirements to approved concepts and incorporate the

capability needs of the Combatant Commanders. There is a series

of others that are in the full list in my statement for the record.

But, importantly, we want to provide appropriate review by senior leadership early in the requirements process and throughout

the acquisition process so that the rational and informed risk-balancing decisions can be made by the senior civilian and military

leaders in the Department. Needless to say, this is a tall order but

not unachievable.

I am pleased to report that in each of the JROC meetings and

12 Defense Acquisition Board meetings I have attended since becoming the vice chairman 7 months and 3 weeks ago, most of these

topics have and are being addressed. We are working and learning

together and taking an incremental and pragmatic approach to reforming these processes to give the best capabilities to the joint

warfighter.

I am encouraged by our progress to date. I will mention one or

two of these. We have now four joint operating concepts that I

talked to you about in acquisition, and we are relating them to the

requirements process. This will help all of us involved in the capability development services—defense agencies, Combatant Com-
12

manders and the joint staff—think more clearly and more jointly,

including our allies and coalition members.

These are just some of the initiatives—again, more described in

the statement for the record—that Under Secretary Krieg and I

have taken with the DAB and the JROC together. This teamwork

and collaboration, in my view, is important and cannot stop, because there is much work to be done. We need to make our system

more agile, more responsive, frankly much less bureaucratic and

fully informed by this joint concepts and experimentation and our

lessons learned.

This challenge I am committed to meeting. As I close, it is one

of the reasons why I came to Washington as the vice chairman of

the Joint Chiefs of Staff, having lived with a non-optimal system

as a warfare requirements director, as a service programmer and

then almost three years as a combatant commander.

I look forward to continuing our work with the acquisition community, the resource community and with the Congress to tackle

these challenges, and I look forward to the support and advice we

receive from your committee, sir. Thank you.

[The prepared statement of Admiral Giambastiani can be found

in the Appendix on page 98.]

The CHAIRMAN. Admiral, thank you very much.

Mr. Patterson, thank you for being with us this morning.

STATEMENT OF J. DAVID PATTERSON, PRINCIPAL DEPUTY

UNDER SECRETARY OF DEFENSE (COMPTROLLER)

Mr. PATTERSON. Thank you, Mr. Chairman and members of the

committee. I am very pleased to be here to discuss what is clearly

an important topic, not only for you but for the Department: acquisition reform.

Let me open my remarks speaking as a relatively recent addition

to the Comptroller’s Office by saying that the process to acquire

weapons systems and services, to meet current and future capability needs can and should be better, especially in this era of multiple combat operations abroad, terrorist threats at home and competition for budget.

To that end, the goal of the Office of the Under Secretary of Defense Comptroller is to provide the Department with a rational,

balanced budget, with sufficient internal control to achieve efficient, effective acquisition programs that meet cost objectives.

To my knowledge, before the completion of the most recent Defense Acquisition Performance Assessment, or DAPA, some 128

studies had been conducted over the course of the last several

years to address perceived and real problems with the defense acquisition system.

In the 1980’s, the focus was on fraud, waste and abuse. In the

1990’s, we reflected the desire to make the process faster, better,

cheaper. More recently, the goal has been to make the process more

flexible and responsive.

Indeed, for nearly 60 years, the Department has been engaged in

a continuous process of self-assessment to identify and improve the

way it acquires weapons systems. But many of the same problems,

particularly those related to cost and the timely delivery of needed

capabilities, have been themes in most of the studies.
13

In many of the reviews conducted, almost since the Department

was established in 1947 with the Hoover Commission, the focus

was on procurement practices but not necessarily budget issues.

And this is significant, because those practices that impact the

ability of the procurement process to deliver effective capabilities

on time and within cost requires the Department to create a stable

budget environment.

Past reviews were also limited in their assessment of the interrelationship between the workforce performance, industry responsibility and the oversight and control mechanisms intended to

make the system work efficiently and with financial discipline.

Last June, in response to the growing concern of Congress and

the Department, Deputy Secretary of Defense Gordon England authorized an assessment of every aspect of the acquisition process,

from requirements, organization and legal foundations, such as

Goldwater-Nichols, to decision methodology, oversight and checks

and balances, with the goal of integrating all acquisition reform activities into a single coordinated roadmap.

The project became the Defense Acquisition Performance Assessment. I served as the director for the DAPA project and have read

General Kadish’s testimony and believe he covered well the details

very well. However, it is important to note that, broader than previous studies, the DAPA panel’s approach addressed not only the

‘‘little A’’ acquisition process, which tells us how to buy things, but

the ‘‘big A’’ acquisition system that integrates the three interdependent processes of budget, acquisition and requirements.

Among the important findings of the panel that are relevant here

today is the idea that the program’s stability leads to predictability

in the program, as measured by cost, schedule and performance.

When program progress is predictable, in other words, when

milestones are being met, estimated costs are actual costs and performance to contract specifications and Key Performance Parameters are achieved. Senior leadership in the Department of Defense

and Congress will have their confidence in the acquisition process

strengthened or renewed.

Additionally, it is critical for acquisition program’s success that

clear lines of accountability are established and maintained. When

program managers have stable programs with predictable funding,

it is much easier to hold the program managers accountable for

program performance and cost discipline.

Achieving stable program budgets as a key element in building

and maintaining stable acquisition programs is a Department of

Defense objective for implementation. To achieve that goal, the Department has an initiative under way, as part of the Quadrennial

Defense Review recommended roadmap, on improved governance

and management to implement a DAPA report recommendation for

a stabilization account or capital funding of programs.

We have established a working group that is, first, preparing a

description of exactly what such a funding program would look like.

Now, there are several ideas of what stabilization funding process

would be; second, determining how rigorous internal controls would

be established and maintained; gaining the confidence of Congress

and the Department demands that strong spending controls be in

place; and, third, identifying which programs would be the best
14

candidates for successful implementation of a capital or stabilization account for major programs. Not all program profiles lend

themselves to a stabilization account.

And, last, we are looking for solutions to the challenges that will

no doubt be encountered by implementing stabilization accounts for

major defense programs.

The outcome of this working group will provide the body of the

report on this subject, required by the National Defense Authorization Act of fiscal 2006, due to Congress in July. But any worthwhile

solution to achieving budget stability and the resulting acquisition

program stability, will require a collaborative effort among the

major Department players and Congress.

I am pleased with the opportunity to discuss this important subject of acquisition reform and stand ready to answer any of your

questions.

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

Appendix on page 104.]

The CHAIRMAN. Mr. Patterson, thank you.

And to all of the panelists, thanks for your opening statements.

This is a big, big area, and we are going to have a lot of questions, but let me just offer one observation. First, you folks are

going through lots of scrubs on how you can make the system more

effective and more efficient.

It occurs to me that the systems that we are designing, even if

you achieve extremely efficient construction schedules and funding

schedules, if you look at the big ticket items that we have got out

there right now, the $14 billion aircraft carrier, $3.5 billion DD(X),

$2 billion submarine, that just starting with the blueprints for

those systems and the way they are designed and the features that

are designed in them, you are going to have perhaps a light drawdown on the cost of those systems if you have enormous reform in

what I would call the subacquisition process. But, nonetheless, you

are still going to have very substantial price tags.

Let me offer a question that I think goes to the threshold of this

problem, and that is, when we designed the system, when JROC

makes the final call on what the requirements are, do you have

production engineers, that is do you have people in the room, technical people, who when you describe the requirements and everybody weighs with what components and subcomponents they would

like to have in a particular system, do you have in the room production experts who can say, ‘‘If you do that, Admiral, you are

going to jack your costs up 10 percent or you are going to raise it

5 percent or you are going to raise 25 percent or that is going to

make it very difficult for the yards to mobilize and to do that or

that is going to require a new technology.’’ Do you have the producers in the room?

And the reason I say that is because in the domestic area a lot

of designs are put into place not simply because they are sought

after by consumers but to lend themselves to production efficiency.

For example, if you are building houses, you can build production

housing in this country in many places for $60 a foot. And they

meet all the codes, and make all the requirements, all the insulation, all the safety requirements, all the livability requirements

that are fairly standard throughout the nation. They will all pass
15

code, they will all get their permits, they will all be accepted by the

governing bodies.

You could build next door to that $65-per-square-foot production

housing $300-per-square-foot housing, which is not built with the

intersession or the participation of the production engineers, it is

done purely as a response to the requirements people, which in this

case is usually the person that wants to build a custom home and

wants nooks, crannies, elevations, room divisions and all the things

that go into what people like to have and like to see.

My sense is that you don’t have in these requirements councils

hardcore technical people who are production people, not philosophers, not people with dreams of what technology might be but production people who say, ‘‘If you are not going to let me weld this

thing in a straight line, your costs are going to go through the roof,

and here maybe is a suggestion on how you can weld it in a

straight line, here is a suggestion on a configuration that will save

you a lot of money.’’

Do you have those people in the room?

Admiral Giambastiani.

Admiral GIAMBASTIANI. First of all, I would tell you that we don’t

have commercial or industrial folks in the room when we go

through the actual approval of what I would call, what used to be

called a mission needs statement, which is now an initial capability

document, ICD. Okay, same approximate thing.

But what I would tell you is, when we actually make the determination, the answer is, no. When we develop up to the point that

the document comes forward is there participation by technologists,

engineers, et cetera, the answer is, yes, but in the room when we

make the decision for the initial capability.

Now, what I would say to you to extend this answer on is that

we have got a classic example of this where in late 2004, before I

became the vice chairman, we issued an initial capabilities document for a program, the B–52 standoff jammer. It said, ‘‘Here is

what we want in a limited scope program that covers a very small

segment of the standoff jamming frequencies.’’

We then approved that document out of the JROC and recently

here in the budget process for the submission, we canceled the program. And the reason is because folks in industry and within the

Air Force, good and well-meaning people, started tacking on all

kinds of other requirements and production designs, if you will,

and capabilities that we did not ask for in the ICD.

So the answer, I would tell you is, is the cost grew from $1 billion to probably close to $7 billion and we looked at it and said,

‘‘There is no way we are doing this,’’ and that is why we killed the

program.

The CHAIRMAN. But maybe it would have been good if you would

have had some real good judgment early from production people

and you asked the question in a different way, which is, ‘‘Can we

get this capability cheaply if we design it in the right way?’’

Admiral GIAMBASTIANI. Sir, we did that, and that is why we

picked the B–52 as a platform because it had electrical capacity

generators and they were available aircraft. The problem is, is that

when we started tacking on too much else, we knew that it wasn’t
16

going to be possible to do within, if you will, cost and time constraints.

And what is important about this is, we killed this before it ever

even reached what we call milestone A in the process. So we never

even got to approving key performance parameters, a capability development document or any of those things that are much farther

along in a program. And if you are going to do it, this is where to

do it, early on in the process.

So that is an example that I want to give you of how we are trying to bring these cost and time constraints in based on what we

know from not only production engineers but frankly from the

scope of the requirements.

But I take your comment on bringing them in earlier as a very

important one.

The CHAIRMAN. Okay. My astute staff member just gave me a

note that said, ‘‘Industry advisors will always say yes to new requirements.’’

Mr. Green, I knew that. Just want to put that on record, but I

think that is an excellent point, because when we—we just built a

house or we are in the process. I sat down with a designer and put

in all these great things that would be nice to have. I discovered

after we had the house designed that when we tried to shrink the

house a little bit these cuts that I made on the perimeter, notches,

ended up taking away space and costing me more money to construct. I realize now that if I would have had a production engineer, that is a guy who builds houses, who understands construction costs upfront when we put the requirement, we would have

saved a lot of money.

And so Mr. Green’s second note is, ‘‘Do you folks have that organic capability to sit in at the initial meetings where you might

ask the question this way: Do you think we could build an aircraft

carrier for less than $14 billion with the requirements that meets,

generally, the present requirements and maybe with a few innovations that will carry us into the future?’’

That is kind of what I am talking about, Admiral, because I

think once you set a basic platform into motion and you set down

a base design, I think you are in the position you just talked about

where you can veto or not veto subsystems on the basis that they

are too expensive. You can cancel things. But you can’t start a program ab initio and go in a direction that is going to give you lots

of explosive on target for the same cost or for a lower cost.

Admiral GIAMBASTIANI. Yes, sir. Let me respond with two answers, briefly.

Number one, with regard to the comment about contractors and

industry will tell you, that is what I was referring to in my opening

statement by the art of the possible versus of the art of the practical, and that is what you are referring to, I believe, here.

The CHAIRMAN. Right, but the production engineers don’t have to

be out of industry.

Admiral GIAMBASTIANI. Right.

The CHAIRMAN. They could be organic to you folks.

Admiral GIAMBASTIANI. Let me give you an example of how

Under Secretary Krieg and I have brought production engineers

into the process of looking at a program, and it is called the Joint
17

Tactical Radio System. This program has opportunities for some

substantial cost growth. And, frankly, within a week and a half of

my arrival here, we started working on this program by bringing,

if you will, people with experience in systems engineering and production engineering into the process.

Ken Krieg had named one to be the joint program manager, a

person I am very familiar with by the name of Dennis Bauman

who I have worked with for years inside the Naval Space and Warfare outfit.

And we have had, how many, Ken, three DABs on this, at least?

And what I am telling you is, is that we have gone through and

looked at every single cost driver and requirement based on production engineering to come out with what is the art of the practical, just the question you are asking, is it even practical to go do

this.

And we have gone through and looked at each one of the key performance parameters that were mandated before he and I ever

came into these jobs, and we have said, ‘‘Okay. Where are we going

to cut back? Where are we going to make appropriate risk-based

decisions so we can move this program forward to bring joint

warfighter capability that can be produced on time, on cost and on

schedule within a cap and not giving you another dollar more within the program?’’

The CHAIRMAN. Okay. Thank you.

Dr. Snyder.

Dr. SNYDER. Thank you, Mr. Chairman.

Mr. Chairman, I appreciate you holding this hearing and this series. I think this is so important and so complex, and it became

even more complex when I heard you use the phrase, ‘‘ab initio.’’

I knew I was really over my head then.

I appreciate you all being here and——

The CHAIRMAN. That is a small town in Texas.

Dr. SNYDER. I bet it is, yes.

Mr. Walker, in your written statement, I am going to read a couple of paragraphs that I think really illustrate, and this is quoting

you, Mr. Walker: ‘‘As I have testified previously, our nation is on

an imprudent and unsustainable fiscal path. Budget simulations by

GAO, the Congressional Budget Office and others show that over

a long term we face and large and growing structural deficit to primarily the known demographic trends, rising health care costs and

lower Federal revenues as a percentage of the economy. Continuing

on this path will gradually erode, if not suddenly damage, our economy, our standard of living and ultimately our national security.’’

And then just before that, you refer specifically to DOD and you

say, ‘‘In the past five years, DOD has doubled its planned investment in weapons systems, but this huge increase has not been accompanied by more stability, better outcomes or more buying power

for the acquisition dollar. Rather than showing appreciable improvements, programs are experiencing recurring problems with

cost overruns, missed deadlines and performance shortfalls.’’

I think those are two very powerful statements. One is in a narrow category of what you all are focusing on and trying to do your

best job of improving, and you all have pointed out that it has occurred over decades.
18

And then, Mr. Walker, you put it in the context of we are a nation that does not have unlimited resources, and our national security also depends on our economic strength and our fiscal strength.

So we have some real challenges.

Mr. Walker, in your written statements, you have some little

charts in here. You have one for DOD, I think you have one for,

let’s see, one for the Secretary of Defense, one for military services

and joint developers. You don’t have one for Congress in terms of

actions that we might do, and I am one that feels like the Congress

has just dropped the ball in terms of providing oversight in a whole

lot of different areas. But would you create for us a chart for Congress? What should we be doing?

Mr. Skelton had to leave and he specifically would like to know,

his question is, ‘‘What is the single most important thing this committee can do to help DOD get on a path to fix the problems with

acquisition?’’

So if you would respond to that, Mr. Walker, and then the rest

of you respond to what this committee could do.

Mr. WALKER. If I can, Mr. Snyder, let me do this: Let me tell you

the six things that I think need to be done, some of which involve

action by the executive branch and some of which will involve efforts by the Congress.

Number one, there must be a reconciliation of the so-called ‘‘big

A,’’ a reconciliation between unlimited wants versus true threat

and risk-based needs versus how much resources we are likely to

have to be able to fund those needs. That has never been done. It

requires tough choices, it requires tough love, and it requires decisions both within the Department and by the Congress.

Second, to se realistic and sustainable basic requirements that

you can stick with, which requirements are informed by what the

chairman mentioned, then input of production experts and other

technology and other experts that can tell you what is realistically

possible given what you are trying to accomplish and given the resources that you have.

Third, take steps to try to provide some funding stability in connection with programs that, A, have gone through the ‘‘big A’’ reconciliation and survived it and that meet the second requirement

that I mentioned.

Fourth, use commercial best practices, including making sure, as

Under Secretary Krieg mentioned, appropriate level of technology

maturity in the design, development and production phases before

you change into the next phase. Make that an absolute hard and

fast condition.

Fifth, move to more streamlined and simplified contracting approaches that better balance cost and risk and that are focused on

achieving desired outcomes: cost, timing and performance.

And, sixth, structure incentive and award fee arrangements so

that the government is paying for positive outcomes based upon

cost, schedule and performance.

Now, I would respectfully suggest, and I can think of others, this

is just over a few minutes, I respectfully suggest that, and we are

happy to work with this committee to try to come up with some

more specifics, but I think there are things the executive branch

should do here, and there are things that through the authoriza-
19

tion and appropriations process could be done in order to make

sure that these conditions are met.

Because in many cases, the policy manuals are beautiful but the

difference between the policy manuals and actual practice can be

wide. And a lot of it, quite frankly, is a cultural issue, and a lot

of it is because in the past when there had been unaccepted outcomes there hasn’t been any accountability. There have been no

consequences, either internally or frankly from the Congress.

Dr. SNYDER. Do the rest of you have any comments on that area?

Secretary KRIEG. Yes. I never pass up an opportunity. I think the

most important thing that we all can do is strategic choice. At the

end of the day, strategic choice is not about what we decide to do

as much as it is about what we decide not to do.

I sat at tables like this in my short tenure in this role and had

people say there are requirements defined by X, Y or Z. You, as the

Under Secretary, are choosing not to fulfill that requirement.

Therefore, all unfunded requirements ought to come to the Congress and the Congress ought to pick and choose among unfunded

requirements.

I am being provocative to say, if the bag is too full, putting more

in the bag is not the way to get out of the problem, and our national problem on many of these issues is we are not willing to determine the difference between what we absolutely need as a requirement and what the sum of people’s desires are as a requirement.

And as long as we reach for the ultimate capability, which is a

cultural norm within the Department and as long as people are not

willing to have someone’s desire of requirements to be left off the

table, this job will be very hard to meet those cost, schedule and

performance and your desires for that kind of performance.

The CHAIRMAN. I would just observe that sometimes those unfunded requirements are things like ammunition, body armor,

armor for Humvees, jammers.

Secretary KRIEG. I understand, sir, and I am said it is all our

problems to choose what the right choice is. And I understand your

role. I know that the role of the President is to propose the budget;

the role of the Congress is dispose. The Constitution is very clear

about that. I am not trying to get at that. I was trying to get at

the point of strategic choice.

Dr. SNYDER. Mr. Chairman, I also respectfully suggest those are

fundamental needs. You shouldn’t have to get involved in that. And

that ties back into the issue of we need to make tough choices and,

candidly, it is going to be tough for the Congress. There is no way

we are going to be able to fund all these programs.

And here is what my concern is, my concern is, if we don’t

change and we don’t change now, every dollar we spend on a want

is a dollar we are not going to have for a need down the road.

The CHAIRMAN. Any other comments on the gentleman’s question?

Admiral GIAMBASTIANI. I might just add one comment. I take the

discussion between the wants and the needs and the important

piece we try to do from the military side is provide military advice

on what the needs are. And that is what Goldwater-Nichols tried

to really solidify was our ability to provide military advice.
20

Now, the question remains how you translate that military advice through a sensible requirements process to work hand-in-glove

with acquisition and resourcing to bring in program stability and

the rest. I could talk, as you know, Chairman, and we have talked

at length over ten years on how to bring resource stability, requirements stability and acquisition stability to programs.

But what I would say to you is, that in the President’s budget

that we came forward here, we have given the Congress a series

of choices on programs to take out and we said the bulk of the QDR

would be instituted and brought forward in the Program Objective

Memorandum (POM) 2008, or in other words, President’s budget

2008 and the beyond, the Future Year Defense Program, and we

have some substantial hard choices.

But I would tell you, I think we have made some pretty hard

choices just in the submission in that short time of creation of the

QDR. And you will see more coming through this process, I can

guarantee you.

The CHAIRMAN. Thank the gentleman.

The gentleman from Minnesota, Mr. Kline.

Mr. KLINE. Thank you, Mr. Chairman.

Thank you, gentlemen, for being here and your testimony. I don’t

even know where to begin. I think the acquisition system is horribly, horribly broken, has been for many years.

Secretary Krieg, your predecessors going back have recognized

that this system is broken. And we have JROC would and DAB

would and done all sorts of bureaucratic things.

Just a comment, I think that, Mr. Walker, I think it was your

comment that we had some culture that we had to change, or was

it yours? I am sure that all of you recognize that.

And we just seem to be unable to do that on so many ways,

whether it is the requirement process, which seems, Admiral, to be

tremendously slow and cumbersome. It is not agile, responsive and

less bureaucratic; it is cumbersome, unresponsive and tremendously bureaucratic.

And I am not telling any of you any—you know all of those

things. It just is. So I have some despair that we keep trying to

fix it and trying to fix it and trying to fix it and we don’t fix it.

Still, I wish you good luck, and I would like to know what we can

do to help.

Let me go to another, sort of, related point, and maybe the chairman or somebody knows the answer to this; I don’t. We became

frustrated on this committee, and I think all of us in the Department of Defense and elsewhere became frustrated because we had

soldiers, Marines and others who were being wounded and killed

in action, and we wanted to provide a way to get agile, responsive,

immediate help to those soldiers.

And so under the leadership of this chairman, we put into a law

that the secretary of defense could, sort of, waive this bureaucratic

entanglement, Federal acquisition regulations and the like and go

buy it. If we needed it, go buy it.

If one of you knows, I would like to hear from you. If you don’t,

I would like it for the record. What have we bought under that provision? I know that we have had frustration here that armor getting on vehicles, Humvees and trucks, was slow coming even after
21

we had approved it. It seemed like other body armor and so forth

was slow coming. There has been great frustration expressed by

members to his committee that we haven’t perhaps purchased

enough jammers or other technology to help in the fight against

Improvised Explosive Devices (IEDs).

Even when we passed what I thought was extraordinary legislation granting extraordinary power to the secretary, we slipped, it

appears from here and I would like to hear otherwise, back into

this standard culture, the normal process. We haven’t verified the

requirement, we haven’t completed the developmental testing, we

haven’t gotten the operational testing. Something has slowed us

down.

So that is my speech. The question is, for the record or if one of

you knows, what have we purchased under that authority granted

to the secretary of defense? And am I completely wrong in my assessment that we have fallen back into bureaucracy?

Anybody?

Admiral GIAMBASTIANI. If I could, Mr. Kline, what I would like

to do is, first off, tell you that I think working very carefully with

the Joint Improvised Explosive Device Defeat Task Force, now

under the leadership of retired four-star general, Montgomery

Meigs, United States Army, who was brought on board on the 12th

of December specifically for his capabilities, we are using those

types of authorities inside that Joint IED Defeat Task Force.

We spend a lot of time with the chairman of this committee and

his staff director on this very issue, going back and forth on are

we doing it right, are we doing it fast enough, are we doing it in

the right areas. But I can tell you that General Meigs is using that

to bring on board countermeasures and other devices in a way as

rapidly as possible.

And, also, to cut through this bureaucracy, the stonewalls and

everything else that are out there, the deputy secretary has signed

a series of directives that allow us to fast track money out of my

good friend, the Comptroller’s Office, here to eliminate many of

those requirements that we have along the process to produce

these systems so that we can get them in the hands of our troops

as quickly as possible.

And I would tell you we are deploying things much faster now.

I could quote a series of statistics. I won’t go through them right

now, but that is probably one of the primary areas that we are

really exercising the authority that the Congress has given us.

Secretary KRIEG. I want to add to that. We built a small joint

rapid acquisition cell, a direct report to me and a direct report to

the comptroller, who are the ombudsmen for those IED defeat and

other urgent operational needs, for if someone is in the road, call

there and they will clear it out. And that is the role they play to

make sure that we have a rapid process to link need to solution.

Mr. KLINE. Okay. Thank you. My time has expired.

If I could just get from maybe it is from you, Mr. Secretary, a

list of those things that the Department has acquired specifically

under this authority granted in the statute.

Admiral GIAMBASTIANI. We would be glad to do that.

[The information referred to can be found in the Appendix beginning on page 115.]
22

Mr. KLINE. Thank you, and I yield back.

Admiral GIAMBASTIANI. Happy to do that, sir.

The CHAIRMAN. Thank the gentleman.

Under the initial thing, I would just tell the gentleman, partial

answer to his question, under the initial authority we gave the secretary that said he could waive every acquisition regulation in

America to get stuff quickly to the troops, we got one system out

that the Army gave us a 13-month fuse on and we got it out the

door in 70 days, 10,000 of them, to support the troops. Moved very

quickly with great agility and lots of folks in the system have said

that will never happen again. That one got through the door, we

are going to study the rest of them forever.

So I am waiting for—if we get the second one out the door, then

I will have some faith in that system.

Mr. KLINE. So that is a list of one.

The CHAIRMAN. It may be a list of one. That is under the secretary’s special authority. That is the only one that has ever been

used on that.

Secretary KRIEG. I would note, I think the system is reacting—

I would like to give you a broader list than just that authority, because I think the overall system is reacting faster, and we don’t

necessarily need that authority in order to make things happen.

Mr. KLINE. Mr. Secretary, with respect, that is the list I wanted.

If it is a list of one, then——

Secretary KRIEG. I will give you that list, but can I give you the

other list in the timeframes of——

Mr. KLINE. You can, but this is an extraordinary authority that

we have given the secretary to get past all of this culture and bureaucracy and red tape, and I would like to think that it had some

effect.

Secretary KRIEG. I will give you that list.

Mr. KLINE. All right.

The CHAIRMAN. I think we are going to get that list.

The gentleman from Washington, Mr. Larsen.

And, incidentally, he has just produced a ship, a so-called sea

fighter, that is 1,000 tons, goes 60 miles an hour. You put midrange missiles on it, you can load it up with 100 times the firepower of a battleship with a crew of 26 people. So the gentleman

just produced something in his district which is an extraordinary

manifestation of moving quick, but in this case it was the ONR, the

Office of Naval Research, that got that ship out the door.

The gentleman is recognized.

Mr. LARSEN. Thank you, Mr. Chairman. I didn’t personally

produce it, but——

The CHAIRMAN. Oh, sure you did.

Mr. LARSEN. Yeah, right. A lot of good folks in the district did

and they are very proud of the work they have done, and I am looking forward to meeting ONR this Friday to talk about that.

Do you need new legislative authority to fix this or did Goldwater-Nichols provide enough authority and we just haven’t done

it after 20 years?

Secretary Krieg.

Secretary KRIEG. Well, we have offered some small authorities

that we need. I would argue that you have given us broad authori-
23

ties to make hard choices and to drive the systems together. We

have the authority to do what we are doing. I believe that several

of the experiments we have under way to do portfolio management

may ultimately need some authorities, but I cannot today tell you

what those are. But we have got a number of experiments under

way.

This concept decision, the investment review decision, the general management decision, we have to understand what that is and

how to do that, and we would look forward to working with the

committee if we determine we need authority.

I do feel that you have given us tremendous authority that we

need to exercise.

Admiral GIAMBASTIANI. Here is the way I would answer it: In my

experience, we keep coming up with systems to try to do better

here. And, unfortunately, through some regulations inside the Department, some that are from within the committee and, frankly,

many that are what I would call self-imposed within the Department, we have a tendency to create a very complex and cumbersome system, there is no doubt in my mind.

I will give you an example. I am a combatant commander who

served for three years and am now up here as the vice chairman.

I complained bitterly about this process I now run called a joint capability integration and development system. And I can tell you as

a combatant commander I hated it because it took too long, was too

bureaucratic and was too darn painful, and didn’t have the staff to

push stuff through. Plus, if something costs $10 or $10 billion, it

seemed like we had to treat it the same way.

So up here we are trying to throw out most of this, break these

down into joint capability portfolios which requires an overall approach to governance, management and execution.

So what I would tell you is, the Deputy Secretary, Under Secretary Krieg and I, I guarantee you, we will be to you if we need

legislative relief on this one. I think a lot of it is self-imposed,

frankly, inside the Department.

Mr. LARSEN. Well, and if that is the case, we want to help you

self-impose that. I think that is, kind of, one of the purposes of

these hearings.

I think another frustration reflected—and I want to use this to

bounce off Mr. Walker—the President’s budget proposal for the defense is $439 billion or so, and I couldn’t tell you if that is too big

or too small. I can’t tell you that we could do the same with less

or that we could do the same better with more. And I think that

is the great frustration. We know what we buy, but we don’t know

really what we get.

And so, Mr. Walker, you released an assessment of major weapons programs and high-risk programs. Can you give us some common themes that were just driving up program costs in some of

these high-risk programs?

Mr. WALKER. First, we haven’t recognized the ‘‘big A’’—wants,

needs, affordability and sustainability.

Second, we haven’t nailed down specifications or requirements

upfront and stuck with them over a period of time.

Mr. LARSEN. Let me ask you about that. How do you stop—the

yellow light is on here—how do you stop requirements from getting
24

ahead of technology? And then how do you stop people just adding

on requirements?

The Navy is doing the new Multimission Maritime Aircraft

(MMA) and it is being built and it is near the 737 plant in Benton,

Washington. And I am just kind of tracking that a little bit, and

I keep telling them, ‘‘Don’t let anybody add anything to this thing

until it is flying and it is up in the air, and we are actually using

it. Otherwise, it will never get up in the air and it will never fly.’’

Mr. WALKER. Yes. I think one of the things we have to recognize

in reality is that technology advances very rapidly. If you just look

at information technology, we have a new generation every 18

months. Similar trends happen in other areas of technology. You

have to be able to design and freeze that design and then you can

play plug and play in the future if you want. The problem is, if you

are always trying to build state of the art, if you are always trying

to build a 100 percent solution rather than an 80 percent solution,

you will in ever get done.

And so we need to be able to figure out what do we really need,

what is realistically feasible within a realistic timeframe and given

our budget. We need to lock that down, and we need to recognize

that, look, we have got platforms, and I am sure the admiral and

others can tell you, we have got platforms that have been in existence for decades and we have modernized those platforms after

they were developed.

Look at the B–52. It is basically been rebuilt almost.

And so we have got an ability to deal with situations down the

road, and we need to be able to adjust accordingly.

I think they have plenty of authorizations, and I think, quite

frankly, one of the things you need to think about, this committee

needs to think about is, what type of conditions might you impose

and require them to meet before they can move to different stages.

Admiral GIAMBASTIANI. Let me give you one classic example of

this where we can do this on time, on cost, on schedule, and we

can do it exceptionally well. The President proposed in the QDR

that was submitted by Secretary Rumsfeld on the 30th of September, 2001, to convert four Trident submarines to Nuclear Powered

Guided Missile Submarines (SSGNs). It was put in the budget in

the President’s budget submission to the Congress in February of

2002. I had the pleasure of recommissioning the USS Ohio on the

6th of February, and the second of this class will be recommissioned in May, next month, followed within the next 15 to 16

months by the other two. That is pretty impressive.

And if you look at these selected acquisition reports on this, you

will find that that program was on cost, on schedule, delivery and

the rest of it. So it can be done. There are many other examples,

just like there are those that are huge cost overruns or time overruns or both.

Mr. LARSEN. Thank you.

The CHAIRMAN. I thank the gentleman.

The gentleman from Texas, Mr. Conaway.

Mr. CONAWAY. Thank you, Mr. Chairman.

Playing off of that answer, General Walker has got a list of six,

some big, some small, programs and the common theme is that
25

they are all over budget and didn’t work—not say they didn’t work

but they cost a whole lot more money than we thought.

Are there equivalent-sized programs, and maybe the submarine

is, where the system did work, we were able to make tougher

choices and lock in capabilities that could afford at the time we had

them so there are some lessons to be learned there, some ways that

we did it right in those as opposed to looking at the ones that we

have done wrong where there are some lessons to learn? Equivalent programs that are as big as the ones in the chart?

Admiral GIAMBASTIANI. I will let Under Secretary Krieg speak on

the acquisition side, but I think if you take a look, I have only read

the summary of the GAO report, which I believe was released yesterday, but I have only read the overall summary.

What I would tell you is, is that I noted that the SSGN, which is not a small program, it is about $4 billion, was not in this list

of 52 programs they looked at. But, in my view, it is a very successful one, as I have said.

Now, are there other examples of that?

Secretary KRIEG. We do have a number of them. We have programs that—C–17 works well. F–16 was a good—eventually, those

were good airplanes. Their early days were tough. I mean, those

were both failing airplanes early on, and we got together and made

decisions and building blocks in the case 16. And the 17, you had

to put a lot of discipline into the management structure in order

to do it.

So we often stumble early in programs. I note that several of

these are very early in the development, and we will see what they

are. Several of them are very much longer.

So, I mean, I think the programs that have good, hard choices

made early on and people make tradeoffs and provide stability, the

programs work fairly well.

Admiral GIAMBASTIANI. I can actually give you a few more here

that I think were pointed out by GAO that have been working programs and have mature technology and will probably turn our reasonably well: small diameter bomb, Aegis Ballistic Missile Defense

System, SM–3.

Mr. CONAWAY. The point of my question, Admiral, was what

worked correctly in those systems that doesn’t work here? We don’t

need to brag on the systems themselves. I just want to——

Secretary KRIEG. Making trades early.

Admiral GIAMBASTIANI. Making trades early. And has been pointed out, if you use stabilized technology, clearly, you reduce the risk

overall of a program. It is very important to do that. We have done

this now, Secretary Krieg and I, with regard to some satellite programs.

Frankly, we have had a lot of trouble with these when he came

in as Acquisitions, Technology and Logistics (AT&L) and I came in

as the vice chairman. And we had to sit down and look at what

the art of the practical was here, what could industry do. And those

are the types of lessons we learned from these types of programs

and how could we stabilize the technology. Those are some of them.

Secretary KRIEG. Mr. Conaway, real quickly, I think at least two

common denominators. Number one, they set realistic and sustainable requirements upfront. It wasn’t a dream, it was a need and
26

they stuck with it. Second, they use commercial beset practices in

design, development and production to make sure that they had

the appropriate maturity of technology before they moved to the

next stage. I would respectfully suggest those are probably two

common denominators. There may be others.

Admiral GIAMBASTIANI. The third common denominator, I would

tell you, is that in most of these programs there is some budget

stability. My experience says budget stability. The comptroller general mentioned that earlier, sir.

Mr. CONAWAY. What do you mean by budget stability?

Admiral GIAMBASTIANI. What I am talking about is where you

are not changing the resourcing on a program every single year.

For example, I need——

Mr. CONAWAY. Congress is doing that or you are doing that?

Admiral GIAMBASTIANI. Where we in the Department would do it

or potentially where you would do it or both of us would do it.

Frankly, you need to keep some stability. My experience is, if you

keep stability, you take risk out of the program.

Mr. CONAWAY. Yesterday, we sat through a meeting on future

combat systems and modularity subcommittee meeting. Obviously,

the growth and the overall cost of that program, all of these are

over what they originally budgeted. How does the Department control that? I mean, if you look at that one program, getting to a

point where you just flat out can’t afford it. It is a good program,

it is one we need to have, but it crowds out everything else.

One of the things I have been particularly impressed with is the

incredible number of moving parts in DOD procurement and acquisition. It is staggeringly complex. How do you make sure that we

don’t wind up and say, ‘‘Oh, my gosh, how did we get us into this

position?’’ Who is looking ten years down the road at the growth

in all these programs and telling us when we have got to quit in

order to be able to keep the ones that are just absolutely necessary?

Secretary KRIEG. On that latter point, we actually do the kind

of analysis that the comptroller general is worried about, about

what does the future look like and will your likely revenue meet

the needs of the future.

And I will tell you I did that with the director of Program Analysis and Evaluation, and I will tell you I can finish his sentences

on many of the problems he lays out in the macro case, which is

why as the capital acquisition head now, I am extremely concerned

about driving choices earlier in the system so that we have a sense

of what we can really do in order to deal with the likely revenue

picture we will have out in the middle of the next decade.

Mr. CONAWAY. The ‘‘If everybody owns a problem, nobody owns

it,’’ who owns that problem? Besides the President and Rumsfeld

and the chairman of the Joint Chiefs of Staff, who owns that issue

at the DOD?

Secretary KRIEG. Well, the strategic choice is ultimately owned

by the secretary and the deputy. I mean, these are the hard trades

that one needs to make. We have derivative work that we do underneath it, but that balancing among various portfolios, that part

of it is the senior most level. The fact that we have got to drive
27

requirements, cost and schedule together is, I think—I believe the

three of us think we own it.

Mr. CONAWAY. Okay.

Secretary KRIEG. We have to bring our three processes together.

Is there one bellybutton to do that? The answer is, no, not at the

moment. But we feel collectively the need to drive that. Ultimately,

the deputy and the secretary are driving that as well.

Admiral GIAMBASTIANI. I think you have got a hold of us accountable here between the resources, the requirements and the acquisition, and if we can’t bring this together to make recommendations

to the Secretary and the Deputy, then we are making a mistake.

That is the bottom line.

Mr. WALKER. The only thing I was going to say real quickly is,

I want to get on the table at some point in time, not to talk about

it at length, that no matter how capable the individuals are that

are sitting at this table, they are only going to be in their position

for a limited period of time.

And one of the things that has to happen, in my view, at the Defense Department, and I realize that not everybody agrees on this,

is that we need a chief management official who has a term appointment, statutory qualification requirements, a performance

contract and a pro who would be there at the right level, with the

right authorities and be there long enough to be able to deal with

these issues.

DOD has 14 of 25 high-risk areas, and it is not because they

don’t have good people trying to do the right thing; they do. But

you don’t have the right people there long enough. These are cultural transformation challenges, and even in the private sector

they take seven-plus years from the time that you start to the time

that you have got something that is sustainable beyond the individual involved. And I think it has got to start with that executive

branch, but the Congress has a critically important role to play.

But Congress, obviously, is a lot of people.

Mr. CONAWAY. Yes, we change seats a lot too.

I yield back, Mr. Chairman.

Thank you. Appreciate those comments.

The CHAIRMAN. I thank the gentleman.

The gentlelady from California, Ms. Davis.

Ms. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman.

And thank you all for being here.

Could we follow that line of questioning a little bit, because we

had some testimony earlier last week talking about capacity building and the importance of having managers that were well trained,

that we were holding accountable, that basically rang the bell when

things weren’t going the way that they should, when they were getting out of hand, when people weren’t communicating, all those

things.

And I wonder if you could give some assessment of that, the role

that you think that that plays.

I am concerned, and I know, Admiral, you mentioned that sometimes the Navy is not consulted necessarily, that your input isn’t

always asked for, welcome. I think there was some indication, perhaps, of that.
28

So I am just trying to get a better sense of how we fix this. I

really appreciate what you just said about having some continuity

and staying power. How does the Congress fix that then, specifically? You say it is not legislative, but we know that we need to

have people that are accountable, that are around long enough to

do that.

And the other thing I just wanted to follow up is, would you be

willing to even assess how much of this is ideologically driven? Is

it a very small percentage, a large percentage at times?

Mr. WALKER. Well, let me just talk about the people element,

which is what you are talking about. Any organization is only as

good as its people, and if you don’t have the right type of leadership that is there long enough, you are not going to be successful

over the long term.

My view is, is DOD has, at least since I have been in my job,

has always had very bright, capable, dedicated people. But one of

the things that ends up happening is, turnover. I showed a chart

on the Senate side to Armed Services to show how many different

players are program managers, under secretaries of AT&L, all the

different critical players just in the acquisition. It is no wonder we

have got a problem.

I mean, nobody is there long enough, you get this kind of action

whenever something goes wrong. And so my view is we need to

make sure that we have enough people, with the right skills and

knowledge, that stay in the critical positions long enough.

Now, obviously, that is easier to do when you are talking about

civil servants and when you are talking about military officials

than it is for political appointees.

I think one of the problems that we have is if you look at all the

high-risk challenges that DOD has, acquisition is only one. Contracting is another, human capital is another, information technology is another, financial management is another, I can keep

going on.

If we look at all those, we need to take a more strategic and integrated approach. Those deal with business transformation, not

military transformation, business transformation. We need somebody at level two, call it principal under secretary, call it deputy

secretary, call it whatever you want, reporting to the secretary who

is working directly with the under, who is working directly with

the service secretaries, who is also matrixing, obviously, with the

military in order to try to help facilitate some of these tough decisions, in order to try to help deal with the structural reforms that

are necessary across these different areas, who is going to be there

long enough to be able to try to get the job done. And I am happy

to provide more details.

But then you need to make sure you have got an acquisition

workforce with enough people, with the right skills and knowledge

and training, and that workforce is at risk. It is a lot smaller than

it used to be, with a lot more complex systems, involving a lot more

money and a very large percentage of those people will be retiring

within the next few years. And we are not well-positioned.

Ms. DAVIS OF CALIFORNIA. Can you share with me how long has

that kind of recommendation been out there for this reporting sec-
29

retary, level two? Is that something that has been talked about for

years or is it a relatively new revelation?

Mr. WALKER. It is relatively new. It is something that I have

been talking about probably about a year or two. When Deputy

Secretary England came in, it was an issue that was on the table

at that point in time, and Deputy Secretary England requested,

and I thought it was a reasonable request, for him to have a year

in the job to determine whether and to what extent he thought it

was humanly possible for one individual to be able to do all the

things that need to get done. It has been about a year, and so I

look forward to talking with Deputy Secretary England.

My view is he is an extremely capable individual. I don’t think

there is a human being on the planet that can be deputy secretary

and do all the things that have to be done, especially at a time of

war, and be the chief management official and deal with all this

business transformation effort, which is going to be a seven plus

year effort. And even if he could do it, he wouldn’t be there long

enough. By definition, he won’t be there long enough.

Secretary KRIEG. What is going on is the Congress of the United

States asked for a report studying a report of that in the last National Defense Authorization Act. We have commissioned that

study. In addition, the deputy said that he believed he was the

chief operating officer and he wanted a year to think about it, so

he has been doing it. We have been building the management infrastructure and decision-making infrastructure, part of what I described earlier, that has been under way, to try to do it, to try to

put it into place.

And so to the chief management officer, there is a decision process that Congress asked us to do and we are working on that.

To the people, I think the people, frankly, is an issue that the

Nation has had in front of it, civil service issues have had in front

of it for several years. I think there have been two Volcker commissions that have looked at this over the last 15 years. As I said, it

is my number-one initiative to try to get it framed and put in front

of us.

The workforce was several hundred thousand. It is now down to

135,000. I have got it now documented by what kinds of jobs they

do, where they are, what their age peers are. Eighty percent of

them are civil service and 60 percent of those are in the old retirement system. For those folks, there is a number of age and years,

and at some point they will leave.

And so I believe that is our—fundamentally, we talked a lot

about portfolio management. The intellectual property management of the workforce is, I believe, the most important thing that

I have got to get done in the next couple years is to frame that,

put action plans in place and get us on the road to keeping the intellectual property capability that we are going to need for these

complex systems in the future.

Admiral GIAMBASTIANI. Ms. Davis, if I could, I don’t want to

leave you with the impression that I wasn’t asked as a combatant

commander for input. My frustration was not that I wasn’t asked,

it was I am always asked but trying to get those requirements and

capabilities through the system was incredibly painful and cum-
30

bersome. And so what I am trying to do, and what my staff is trying to do on the joint staff, is to make this easier.

We just came back from a Joint Requirements Oversight Council

trip to all nine combatant commands for the first time ever. We

brought Under Secretary Krieg as AT&L along with us. We

brought the comptroller, David Patterson’s boss, Ms. Jonas. But

how do we cut this process back so that we can cut to the chase,

if you will, and find out what the real needs are and get them into

the system rather than taking months and thousands of hours?

That is really what my frustration was.

Ms. DAVIS OF CALIFORNIA. I appreciate your talking about it.

Thank you.

Admiral GIAMBASTIANI. Thank you.

The CHAIRMAN. I thank the gentlelady.

Gentleman from Michigan, Dr. Schwarz.

Dr. SCHWARZ. In general, what I need to know is how in today’s

world you really get to where the rubber meets the road when it

comes to requirements. Let me give you an example.

About ten months ago or so, a very widely discussed item in this

committee was getting the up-armored Humvees into theater, the

1114s and the fact that they weren’t moving as rapidly as possible,

and the armoring process in theater was really not satisfactory. It

was better than nothing.

I picked up the telephone and I called AM General, which is not

in my district but just south of my district in Southbend, Indiana,

and I have a good relationship with the UAW, the United Auto

Workers. And so I talked to the president of that local. I said, ‘‘Why

is production of the 1114s not higher? Why are we not getting more

into theater? Why aren’t you getting more of them off the line?’’

He said, ‘‘Congressman, I can put a second shift on tomorrow to

increase the production, I can do it tomorrow. I have the workers,

I have the skills there. It is not a matter of training anyone. They

are working a shift Monday, a shift Tuesday, a shift Thursday, a

shift Friday and that was it.

Now, I think that message got through and that is precisely what

happened, and production was ramped up. And I thank the Department of Defense and I thank the United Auto Workers for doing

that.

The object is how do we deal with today’s priorities, the immediate needs where capacity exists and, well, not ignore, know what

level of importance, what degree of importance conceptual needs,

quite frankly, the DD(X) and the F–22 come to mind in that category. How do you make the decision of what has to be done now

and what is out there in the future but really isn’t helping the men

and women in theater and how do you deal with that?

Admiral GIAMBASTIANI. What I would tell you is, I can’t speak to

the up-armoring of the Humvees, I wasn’t around at the time. But,

obviously, we went to the production and, frankly, I understand we

have gone from 500 to probably almost 12,000 of these now.

Dr. SCHWARZ. You fixed it.

Admiral GIAMBASTIANI. Right.

Dr. SCHWARZ. You fixed it.

Admiral GIAMBASTIANI. Yes, sir. Now, what I wanted to tell you

is, is our Combatant Commanders get to come in with what is
31

called a joint urgent operational needs statement. So if you take a

look at General Abizaid at Central Command, for example, or any

of the other Combatant Commanders, they can come in with what

we call JUONS, joint urgent operational needs statement.

In addition, each of the services has their own operational needs

statement urgent variety, and they will come in through a service

chain to produce those.

Now, I am currently going through a review of how we do this

so that we can put some discipline in the system and make sure

that we are being as responsive as possible as a vice chairman, but

I can’t give you a firm answer on exactly how it is coming out. But

I am essentially assessing and auditing this process to make sure

we are doing what you are asking about.

Dr. SCHWARZ. The key word is responsive, and thank you, Admiral, for using it. I was about to use it.

Admiral GIAMBASTIANI. Yes, sir.

Dr. SCHWARZ. Is there any way that the Congress can help assist

and be more responsive?

Admiral GIAMBASTIANI. What I would tell you is that there are

a couple of things. One, support for joint urgent operational needs,

like the IED Defeat Task Force. You have been incredibly supportive of this across the board. Please continue to do that. We will

come forward with others that generally are being put into these

war supplementals, and your support of those is incredibly important.

We have to come forward and make sure that you understand

where we need this help, but those are the mechanisms I would tell

you right now.

Dr. SCHWARZ. Thank you very much.

With one comment, I would yield back, Mr. Chairman, and that

is, we are on your side.

Admiral GIAMBASTIANI. Yes, sir.

Dr. SCHWARZ. This committee is on your side, and whatever we

need to do to make it more responsive, I am certain that the members of the committee, and I speak for myself only, but I think I

speak for most of the members of the committee, that we will do

what is necessary.

Admiral GIAMBASTIANI. Yes, sir. Thank you very much.

Secretary KRIEG. Could I try, just on your how do you balance

among priorities. The way I think about it in acquisition is we have

got to be able to work in three broad timeframes at a time. On the

one hand, we have to be able to deliver against urgent needs now.

We have to be able to deliver capability to Combatant Commanders

who have got needs in the intermediate term. And at the same

time, we have got to be developing, whether it is a hedge against

changes in the future or dissuasion against potential competitors in

the long term, we have got to be able to work in all three of those

time zones at the same time.

They are not maybe necessarily one process that does each of

those, but the balancing among the priorities is one of the hardest

things that we all do. But that is kind of how I look at it as we

are beginning to think about this time and acquisition working together.
32

Admiral GIAMBASTIANI. If I could add, Dr. Schwarz, just one

other comment on this because this is very important, and I am

sorry that I did not bring it up before. In this recent combatant

commander trip that we went on with the JROC, if you will, and

the senior civilian leadership, for the time ever what we tried to

do was bring together all of the Combatant Commanders’ requirements, whether they were urgent, mid-term or long-term, display

them across all of the combatant commands, make sure that we

had what they were requesting correctly—we had never done this

before—and then look at the gaps in the capabilities, if you will,

through each of our functional areas.

And this turned out to be a very, very good way to show this to

the combatant commands and their staffs to make sure that we

were capturing their urgent needs, their mid-term and their longerterm capability requirements.

Dr. SCHWARZ. Thank you, gentlemen.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank the gentleman.

The gentleman from Colorado, Mr. Udall.

Mr. UDALL. Thank you, Mr. Chairman.

Welcome, to the panel. Thank you all for your service.

Mr. Walker, I want to direct a question to you, if I might, and

wanted to preface it with an old story that you hear on the Hill

about a legislator that is asked where he stands on a piece of legislation. He responds, ‘‘Some of my friends are for it, some of my

friends are against it. I am for my friends.’’

In your situation, you have been for the taxpayers, and I want

to really thank you for that. I know not everybody waves at you

with all five fingers up here on the Hill, but I think——

Mr. WALKER. I have been pretty lucky. I haven’t had a ‘‘we are

number one,’’ yet.

Mr. UDALL. Well, thank you again for your service.

I think what we are trying to do is get at the problem that we

face, which is there is no limit to virtue and there is no limit to

defending this country, and we have to settle on some key priorities. On page two of your report, I thought there was a very powerful sentence there that, ‘‘Continuing on this path will gradually

erode, if not suddenly damage, our economy, our standard of living

and ultimately our national security.’’

I know you have been making that case all over the land.

In the spirit of function follows form, I wanted to focus on the

QDR for a minute and wondered if you would speak to your comments that the QDR doesn’t do a very good job of separating needs

from wants. How would you see the Department going about doing

this? And, finally, is the QDR still an effective tool, an effective

process, if you will?

Mr. WALKER. Well, let me speak intellectually as to theoretically

how I think the process ought to work, and then I will comment

briefly on the QDR.

In theory, you would develop a national security strategy, which

is the broadest. You would then develop a national military strategy. You would then make sure that your QDR is consistent with

the first two. And that is the logical order. We don’t necessarily do

it in that order, but that is the logical order.
33

I have read the QDR document, and there are some good things

in the QDR document. At the same point in time, I will tell you

that I do not believe, based on my preliminary reading, that tough

choices were made nearly to the extent that they need to be made

with regard to the ‘‘big A.’’ And I said before, I didn’t say any of

them were made, I just don’t think that the tough ones have been

made.

And, quite frankly, Congress is going to have to be part of that

process, because Congress many times asks the Department of Defense to do thing that it wants done but are not threat and riskbased and are far beyond the Department’s ability to deliver needed capabilities within an appropriate timeframe.

So this is not going to just be changed management within DOD.

This is changed management on Capitol Hill. I lead that document,

and I just wondered how much that document cost in terms of person hours and in terms of hard dollars.

And I was reminded of the commercial that we have probably all

seen on TV where you have these business people sitting around

the table trying to cut cost and somebody asks the question, ‘‘How

much did all this paperwork sitting on this table cost?’’ Millions.

Well, God knows what the QDR cost. I question the cost-benefit of

what came out. That doesn’t mean it wasn’t a decent exercise, but

we are not making tough choices, and my question is, why are we

not making tough choices?

Secretary KRIEG. A couple things. Both the Secretary and the

Deputy and as the Vice said earlier, our view is to step back. If you

think that the QDR will be an all-encompassing document that will

go all the way from strategy task and will completely reorder the

defense enterprise, in one document, in one year, which is sort of

how the statute lays out its challenge, respectfully, that is not

going to happen. It is too hard.

And so I think you need to look at it, and the vice noted this,

you have got to look at it as a continuum of decision-making and

strategic planning over time, and the role the document and the

debate behind plays is how it begins to shift the emphasis, it begins to lay out the vectors of change, which is good because that

starts to set where you want to go.

The hard choices of what you are going to do without versus

what you want more of is that process of strategic choice that I

talked about earlier. And I think that that is an ongoing process.

As the vice said, the secretary has made clear he believes that 2007

of the budget was just a small down payment in the choice that is

going to have to be made; 2008 is next. And it is a process of

change. Too hard to do it all in one fell swoop. I mean, it is a big

set of choices.

The document lays out some visions. The hard choices associated

with it will continue to flow.

Admiral GIAMBASTIANI. I would tell you, if I could, sir——

Mr. UDALL. Admiral, we have been waiting for years for a Navy

captain to sit in the chairman’s seat, so it is great to see Congressman Schwarz there, but——

Dr. SCHWARZ [presiding]. Unfortunately, I never made captain.

Let’s make that clear, or anything close to it.
34

Admiral GIAMBASTIANI. You look like you are the captain now,

sir.

Dr. SCHWARZ. Thank you, Admiral.

Admiral GIAMBASTIANI. If I could, Mr. Chairman?

Mr. UDALL. Please.

Admiral GIAMBASTIANI. Congressman Udall, what I would say to

you is to follow this on. The comptroller general mentioned you

would take the national security strategy and then come out with

a national defense strategy, really, and a national military strategy. That is exactly what we did.

And the exact same people that worked through this then

brought it to the next logical step, which was the Quadrennial Defense Review. This is a strategy document; it is not an execution

document.

Now, what should you expect from us in the Department, military and civilian? Ken has mentioned this already. I would tell you,

you should expect for us to bring forward the bulk of these tough

choices in this QDR as we build the President’s 2008 budget and

the Future Year Defense Plan from there.

We made the down payment in 2007, but we are working very

hard on this. I think the QDR will matter for one very, very important reason, and that is the same people who brought you this

QDR are now going to be working through the execution piece of

this as we build eight execution roadmaps and we bring forward

the President’s budget for 2008 and that Future Year Defense

Plan.

And there is great consistency in this team. You have heard a

lot of discussion about having the same players in place, and there

is significant consistency in the people who put it together, and

now we have for the first time put into place a Deputy’s Advisory

Working Group, which the deputy secretary and I co-chair, comprised of all of the senior military and civilian under secretaries,

vice chiefs of the services, et cetera, and these are the same people

that put this QDR together.

So I think there is goodness here. Frankly, you are going to have

to grade us as we build it. Are we going to fix everything in a

minute? No. This is a very long-term process. You can’t fix all of

the requirements that have been instituted in the program for the

last 10 or 20 years, but my view on this is, is you have to stay on

it every single day, and that is what we are doing.

Secretary KRIEG. Mr. Chairman, 20 seconds, can I just close out

on that?

The CHAIRMAN. Please.

Secretary KRIEG. Do not underestimate the degree of difficulty

that will be necessary in reconciling the ‘‘big A.’’ What has been

done for 2007 is an immaterial, immaterial down payment on what

needs to be done, just like what Congress did for the last Deficit

Reduction Act, it was very tough, highly immaterial as to what

needs to be done. The line barely moved on the long-range imbalance.

So we are talking about dramatic, fundamental changes and very

tough choices.

Mr. UDALL. Which, Mr. Chairman, the Congress has to also

make at some point.
35

Thank you for your indulgence.

Dr. SCHWARZ. Thank you, Mr. Udall.

The gentleman from Georgia, Mr. Marshall.

Mr. MARSHALL. Thank you. I apologize for not being here at the

beginning of the hearing. This is a subject that I am very, very interested in. I had an Ag Committee markup, and that is what delayed me, so I may be covering ground that has already been covered, and for that, I apologize.

I am also struck by your statement, which you have, Mr. Walker,

repeated time and time again that the large and growing structure

deficit that is facing us is going to have the effects that you describe, gradually eroding our economy, our standard of living and

ultimately our national security.

You are not suggesting—I know you are not suggesting, but I

would like you to go ahead and say it if you haven’t already—you

are not suggesting that by injecting more efficiencies and cost-effectiveness in the Defense Department’s procurement, management,

et cetera, processes, that somehow this structural deficit that we

face is going to be cured.

Mr. WALKER. No way.

Mr. MARSHALL. And, in fact, if I am not mistaken, the percentage

of the projected structural deficit that could be attributable to perceived inefficiencies, real inefficiencies, no question about it, inefficiencies in the process of acquisition within the Defense Department is miniscule.

Mr. WALKER. I think if we do the six things that I mentioned before, we can save billions of dollars a year.

Mr. MARSHALL. I absolutely——

Mr. WALKER. But it is immaterial to the long-range imbalance.

Mr. MARSHALL. And when you say it is immaterial to the longrange, what you are talking about really, and you could do the estimate, I am sure, but what you are talking about is it is a percent

or two percent of the long-range structural deficit that we face.

Mr. WALKER. Right. Immaterial generally means less than five

percent.

Mr. MARSHALL. Okay. So no matter how efficient the Defense Department becomes, no matter how many tough choices it makes, et

cetera, it is still going to be faced with—unless we deal with other

matters, the structural deficit that we have created—it is still

going to be faced with a huge problem and unable, in your opinion,

to adequately defend ourselves.

Mr. WALKER. There is no question that you have got do things

far beyond the Defense Department. You need to look at entitlement programs, you need to reengineer the base of entire discretionary spending, most of which is based on the 1940’s, 1950’s and

1960’s, conditions that existed in the United States and the world

in the 1940’s, 1950’s and 1960’s, and you need to look at tax policy,

including tax preferences.

Mr. MARSHALL. All right. So what goes out and what comes in?

And you can look at what is projected to go out and what is projected to come in and you see a huge deficit in the future, which

all the improvements we are talking about today won’t even come

close to touching.

Mr. WALKER. No, but we ought to make them.
36

Mr. MARSHALL. I agree with that, but everybody needs to understand that the structural deficits we face in the future threaten our

national security, simple as that.

Now, one of the things that we are intently interested in on this

committee is ‘‘Buy American.’’ We try to do what we can to maintain the infrastructure that we think ought to be maintained within the United States in order for us not to be dependent upon some

foreign government for critical supplies to our military, to our defense establishment.

And so from time to time, we will do things like look at shipbuilding capacity here within the United States and how do we

maintain that shipbuilding capacity? And if we opened up competition for the development of a particular vessel, a particular platform and, say, let it be built in Malaysia, we might get that same

platform for a fraction of the cost.

Let’s assume that we have concluded that as a matter of national

security we are going to maintain within our country a basic infrastructure, not whether we should but we are going to do that. How

do we go about doing that?

Mr. WALKER. Well, I think one of the things you have to do in

this area, which is going to have to be done in other areas like

health care and a few others, is you talked about one of the key

words, ‘‘basic,’’ and, ‘‘essential,’’ is the second word.

What is the basic and essential level of capacity that we need to

have for national security reasons? And that may be different than

what we have right now. It may be less than what we have right

now. May be more than what we have right now, but we need to

engage in that discussion and debate.

Mr. MARSHALL. Well, and I am hoping to get some guidance from

you on this subject, because as things are trending here in the

United States, it is becoming more and more expensive for us to

produce, maintain, supply, et cetera. And, in part, it is because our

capacity to do that as a country is being diminished, just eroded

away, as we outsource, move industrial production, et cetera, overseas.

So we have got this national security need for essential services,

essential platforms, those sorts of things, let’s define it. In the long

run, how do we have a cost-effective ability to maintain that capacity within the United States without making some major structural

changes in the way we are doing world trade, in that way we are

just, sort of, generally manufacturing things worldwide. That is the

question.

Mr. WALKER. I understand. I will be happy to provide some more

for the record. I do think that we have to recognize that we are in

a global economy and that if you focus on basic and essential and

making sure that we have that and recognize there are a lot of

things that we need and in some cases want that are not basic and

essential. And there is no reason that we shouldn’t be able to acquire those elsewhere, especially if they are trusted allies. But we

really haven’t had that discussion and debate.

Same thing like health care, for example, and I will get off it real

quickly. We have never had a national discussion and debate on

what are basic and essential health care services that every American needs, every American. We have never had it.
37

And what is the appropriate division and responsibilities between the government, employers and individuals?

[The information referred to can be found in the Appendix beginning on page 113.]

Mr. MARSHALL. I see my time has expired, Mr. Chairman.

Dr. SCHWARZ. The ranking member, Mr. Skelton.

Mr. SKELTON. Secretary Krieg, my understanding is that you

have a 23-point plan; am I correct?

Secretary KRIEG. We are tracking 23 items that came out of the

QDR that we are moving into either implementation and the signing responsibility. We are evaluating how to make a decision, looking at a number of the studies and trying to figure out whether I

disagree. But, yes, we have got 23 things we are tracking.

Mr. SKELTON. I was led to believe that you would be covering

those 23 points today. Was I wrong?

Secretary KRIEG. I covered a number of the points that——

Mr. SKELTON. I am sorry, I had to step out, but did you cover

the 23 points?

Secretary KRIEG. I didn’t cover all 23, but I covered what I

thought were the big five or six.

Mr. SKELTON. All right. Name them very quickly, the five or six.

Secretary KRIEG. The five or six items? Portfolio choice, building

concept decisions and the investment review between and among

acquisition requirements and resources; time defined, working time

as an acquisition element; supply chains, building a joint supply

chain capability—concept decisions was the choice one—manpower

issues, the whole acquisition workforce, for which there are a number of the 23. And then the business systems improvement, which

is another one of them.

Mr. SKELTON. When will you have the 23 prepared to present to

us?

Secretary KRIEG. Well, my written testimony lays out nine of

them.

Mr. SKELTON. No, let me ask the question again. When will you

have the 23 prepared to give to us?

Secretary KRIEG. Yes, sir. Of the 23, some of them we are still

deciding whether or not to do. We are working that all this year.

I will be glad to provide you where we are on all 23 of them and

make that available.

Mr. SKELTON. Well, your proposals for reform require legislation.

Secretary KRIEG. We have sent several small pieces over to you

already, particularly on rapid acquisition and a couple of other

ones. I think most of them that I know of today are inside our control. I think there are several of them that might—the manpower

piece we will need to work with you on.

The joint portfolios, we will at least need to describe—whether

we need legislation or not, I think we need your understanding of

what we are doing. So whether that requires legislation to do it,

I don’t know. We clearly need you to understand what we are

working there. But I don’t foresee a need, Congressman, right now

for specific pieces of legislation that I can see today.

One point, we talked about capital budgeting or stabilization accounts or something like that. Obviously, that will be one where we
38

will have to come together. We will bring you a report by statute

in June or July. We will bring that up here.

Mr. SKELTON. When will you have your 23 points formally submitted to us?

Secretary KRIEG. I will take it as a question for the record, and

I will get back to you.

Mr. SKELTON. Well, give us your best judgment today.

Secretary KRIEG. I mean, I can go back in the next couple of

weeks and show you where we are. I mean, that is not hard to

show you where we are.

Admiral GIAMBASTIANI. When do you think it will be finalized?

Secretary KRIEG. When it will be finalized? Today, sir, I don’t

know when I will get all 23 finalized. I can’t answer that. I can tell

you where we are tomorrow when I go back and look at my notes.

Mr. SKELTON. Would you do that?

Secretary KRIEG. Yes, I would be glad to.

[The information referred to can be found in the Appendix beginning on page 113.]

Mr. SKELTON. Thank you.

The CHAIRMAN. Are there further questions of members of the

committee?

Mr. Larsen.

Mr. LARSEN. Mr. Patterson, I am sorry I wasn’t here. I am sure

when I was gone you were just rattling away. Nobody wants to ask

you a question, but I have got one for you. I have got a couple for

you.

Because you are involved with the Defense Acquisition Performance Assessment (DAPA) study, one of the recommendations is to

elevate the role of the Director, Defense Research and Engineering

(DDR&E), and I wanted you to walk through why that is necessary, elevate to what level and what different role you might see

for DDR&E than currently exists.

Mr. PATTERSON. Actually, Congressman, that was a recommendation of the Center for Strategic and International Studies (CSIS).

Mr. LARSEN. Okay.

Mr. PATTERSON. That is not ours, and I will leave that to Pierre

Chao to get back to you to——

Mr. LARSEN. I am sorry, in our staff memo it has DAPA in the

synopsis of the four studies. It has elevate role DDR&E under

DAPA.

Can someone answer that question?

Mr. WALKER. Yes. I mean, the——

Mr. LARSEN. I am sorry. I gave you an opportunity and you

just——

Mr. PATTERSON. I know, but I hate to put words in Pierre’s

mouth.

Mr. LARSEN. Okay. I will follow up with Pierre. Thanks.

Mr. WALKER. I won’t try to put words in Pierre’s mouth either,

but I think the notion was that technology choice is one of the most

important things that the senior most level of the Department

does. And so remember that in the history of things, the precursor

to the under secretary for acquisition was the director of defense,

Research and Engineering.

Mr. LARSEN. Right. Yes. Like the number three.
39

Mr. WALKER. And so now the under secretary of defense for acquisition, technology and logistics is that position with the DDR&E

being one of my direct reports.

In their argument, they would put technology as the lead. John

Young, the new DDR&E, clearly has a very strong role, both in the

technology maturity determination but also, I think, in the what I

call strategic vectors for technology. What are the strategic vectors?

What are the capabilities we need in this next generation of competition, and what then are the implications for technology, and

how do we organize our technology effort in order to drive capability over time?

John has got that portfolio to work on.

The third big piece then is, and the comptroller general will

know this one in great detail, the gap between technology development and programs. The great divide has been of challenge in defense acquisition for a long time. That is clearly one of the areas

that he is particularly interested in. So I feel he is taking the role

of DDR&E and has the authority to take the role in the direction

that CSIS intended. I don’t know exactly what they meant in terms

of elevating its role, but I think those were at least some of the

things they were after. And John has got that responsibility.

Mr. LARSEN. There is a question that DAPA did talk about and

that was the acquisition stabilization accounts. And could you explain what you all meant by that and what you hope to achieve

with that?

Mr. PATTERSON. Yes, sir. What I would like to point out very

quickly first is that none of what the panel recommended are single-point solutions, and they all work together. But the stabilization account, as it was envisioned, is an account where a program

is funded at some point. Milestone A was the recommendation

through Initial Operation Capability (IOC). So the program manager knows how much money that entire program is going to cost.

Within that, however, it must be a time-definite program. It can’t

be open-ended. So you have a specific amount of money over a specific amount of time, and the trade space then becomes technology

within that.

And the program manager then understands what that person is

accountable for, and you can hold them accountable for maintaining cost, schedule and performance, because it is pretty clear.

Mr. LARSEN. To do that, I haven’t read the report that, but for

the stabilization accounts would we step outside the animal yearto-year annual process and say this account is going to have this

much in it over this amount of time; is that what——

Mr. PATTERSON. Correct. That was envisioned, exactly right.

Mr. LARSEN. Was management reserves discussed?

Mr. PATTERSON. They were and they were also recommended.

Mr. LARSEN. Just if I may, Mr. Chairman, just one last question

with regard to management reserves. I think, is it the Young

panel—yes, Tom Young’s panel, right—talked to us last year a little bit about—and Strategic Forces Subcommittee on satellite

issues and so on, space issues—about a management reserve.

My question on the incentives on that is, if you create a management reserve, it is technically the reserve but how do you stop
40

someone from spending it because it is there? How do you all address that?

Admiral GIAMBASTIANI. Well, the way we address that is, taking

it from the top down, is that you look at all the successful corporations. Every corporation has a capital budget. They also have a

management reserve in order to take care of those things that

come up that are unexpected. You take care of that by setting a

set of rules, and those rules apply to how you are going to spend

the management account. And if you don’t meet the rules, you don’t

get to use the account.

Mr. LARSEN. I understand that, and that sounds great from a

corporate perspective, a private corporate perspective. One of the

problems we have is in a lot of government those rules never actually migrate over into the public sector as well as they should.

Admiral GIAMBASTIANI. We don’t generally codify the rules. That

is the problem.

Mr. WALKER. Well, even if they are codified doesn’t necessarily

mean they are followed. I think what is important is I personally

believe that some type of reserve funding is appropriate to provide

funding stability provided that certain conditions are met that deal

with reform of the acquisition process.

And in addition, you would have to make sure that you had appropriate transparency over these funds, separate accounting for

these funds, periodic reporting, appropriate controls and if people

violate it, there need to be consequences.

Mr. LARSEN. And speaking to that, the thinking behind the panel

that you would have a—because, quite frankly, we are not so naive

as to believe that this will be smooth sailing through the appropriators.

But if we are required to come over and breathe twice a year on

how they are program is going, then there is, at least the oversight

that might not be there otherwise in any format. But if the program manager is required to come and say, ‘‘This is what we are

doing, this is how it is going,’’ and we make that person accountable with a responsibility and authority——

Dr. SCHWARZ. Mr. Marshall, I think you have one more question.

Is that true? Please go ahead.

Mr. MARSHALL. I would be very interested in seeing what you—

if you could share with me whatever you supplement the record

with with regard to this ‘‘Buy American’’ business that we were

talking about.

And back to the structural deficit problem that we face. It is not

going to get cured by all the things that we are talking about

today, but it is going to affect our national security because defense

spending is discretionary, basically.

Have you done anything that you could share with me, have you

all written something on this subject? I mean, reams of things on

the general subject, but specifically is it going to affect defense? No.

Secretary KRIEG. I will be happy to provide you something.

[The information referred to can be found in the Appendix beginning on page 113.]

Mr. MARSHALL. Have you also done—and this is almost a complete digression, I am getting back into the weeds—have you done

anything looking at the trend that seems to be growing here, and
41

that is preference for leasing as a financing technique in order to

get a platform now or get something?

Secretary KRIEG. Well, I don’t know that there is a preference

leasing. I would ask the under secretary or others to comment. I

will say this, the way you keep score matters.

Mr. MARSHALL. And how you handle that budget-wise.

Secretary KRIEG. That is correct. And, therefore, we have done

work in the past where there have been proposal to structure

transactions as leases in order to get the capabilities quicker because of the way the budget rules work. But in some cases, they

didn’t meet the substance-over-form test for meeting operating

leases. They were really capital leases, and they really should have

been treated that way.

There are clearly circumstances in which these versus purchase

makes sense. At the same point in time, I hope that we can ultimately get to where our rules, including our budget scoring rules

or such where we are making sound economic decisions based upon

what is in the best economic interest of the government and the

taxpayers rather than just what gets the best scoring rules. Because sometimes you can end up making uneconomic decisions by

entering into lease transactions that end up causing you to pay less

today but ultimately you are going to paying a lot more.

Mr. MARSHALL. And I agree that leasing is a good vehicle in the

right circumstances. One of the way that local governments—I was

a mayor—imposed fiscal discipline upon themselves is to pay for

things in cash. So you force yourself each budget year to make hard

choices.

One of the things you have talked about trying to create a regime

in which we make hard choices within the Defense Department,

choices that you don’t think we are making right now with much

aggressiveness. And what we wouldn’t want to see—and I guess I

need a financing vehicle that enables not to make those hard

choices. Is that essentially what you are getting at?

Secretary KRIEG. Right, and I agree with that. And the other

thing you have to keep in mind is, as you know, many states, for

example, and you were a mayor, have balanced budget requirements, constitutional requirements of 49 out of 50. But it all depends on how you define balanced budget. California defines it as

balancing cash flows; therefore, you borrow the difference. Well, on

that basis, we have a balanced budget, but it is not a balanced

budget.

Mr. MARSHALL. Thank you, Mr. Chairman.

Thank you.

Dr. SCHWARZ. Chairman Hunter.

The CHAIRMAN. Thank you, and I want to thank the gentleman

from Michigan for doing such a great job in chairing this hearing.

Let me go over a couple things real quickly.

Mr. Walker, you talked about touch choices, but, actually, if you

look at some of the things that has been done by DOD recently,

they have made some tough choices in terms of just absolutely canceling systems. The Army canceled its foremost ground system,

which was the Crusader artillery system. Then they canceled their

bright and shining new helicopter system, Comanche, I mean, two

major, major cancellations.
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And if you look at the array of aircraft in the Air Force, bombers

are anchored by a system, the last one of which was built in, I

think, June of 1962, B–52. We have got, count them, 21 B–2 bombers, a handful of B–1s, a large number of which were scheduled for

retirements, and we have got major retirements, which to some degree are troubling to me and I think other members of the committee in our deep strike portfolio today. We have got ancient tankers.

I mean, 20 years ago you could look at a list of 10 or so new aircraft being produced. Today, you have just a handful, and F–22 has

taken marked decreases in numbers, largely as a product of sticker

shock and budgetary constraints. Those decreases in numbers, in

turn, lead to higher per unit costs.

So I have a little different perspective than you do in that I think

perhaps our defense apparatus is not as robust as it needs to be

and that we are going to have to spend more money on defense.

We are now down to about 3.9 percent of gross domestic product

(GDP). Kennedy, President Kennedy was at 9 percent of GDP spent

on defense; President Reagan, 6 percent. We are down to about 3.9

and my question is whether in this dangerous new century that we

thought was going to be a fairly easy century we can get along on

that percentage of GDP.

Now, my second issue goes to the procurement personnel system,

the acquisition system. During the 1990’s, we made a study on this

thing, and we had 300,000 professional shoppers. Now, those are

not people who were engineers, they were not people designed the

systems. They were people who did paperwork on buying and selling systems.

When we calculated how much each of the 300,000 shoppers was

paid, on average, that is two United States Marine Corps as professional shoppers. And we brought in the services who had paltry

procurement budgets in the 1990’s. The Army, for example, spent

on the acquisition personnel, and, again, it is not the designers, not

the engineers, but people did paperwork. If they bought, and I recall what the ratio was, if they bought a $10 million helicopter,

they paid the guy who did the paperwork to buy it $3 million.

Now, if you translated that to 30 percent of the money that was

then being expended by the Army on procurement, if you translated that into new procurement by eliminating the overhead of the

acquisition Army, literally, you could have bought a heck of a lot

more. And if you compared that to private industry, I mean, if you

told General Motors or Wal-Mart or anybody else that the guys

that went down and bought their stuff, who did the paperwork to

buy their stuff, were going to get a third of the money, well, their

jaws would drop.

And so I think the problem hasn’t been that we have got too few

people in the acquisition system. So we set about asking you guys

to reduce it. Now, arguably, you reduced the wrong folks, but I was

reminded by industry that for every one of that Army of 300,000

professional shoppers that you maintained, there was a counterpart

Army of 300,000 interactors that industry maintained to interact

with and do the briefings and do the analyses and respond to the

reports and requests of the 300,000 shoppers in DOD.
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So in reality, the American taxpayer was carrying an army of

600,000 people shuffling papers for an extremely small procurement budget in the 1990’s.

Now, we have knocked that down fairly substantially, and I

think we have to take credit for a lot of the blame in that we have

a lot of oversight requirements that we have legislated that mean

you can’t operate as efficiently as a Wal-Mart or a General Motors

or a domestic company.

But I think the problem isn’t that we have got too many folks

or we have got too few folks in the acquisition system. If you look

at the amounts of the lead times that it took for us to develop systems in the 1990’s, that army of shoppers, the 300,000 in the government and the 300,000 in industry did not leave to shorter fuses

on these weapons systems. In fact, I think, arguably, they led to

longer lead times and they led to a lack of agility.

So just two issues there. Do you think that we can live on under

four percent of GDP being spent on defense in this new dangerous

century? And, second, do you really think we need to have more

people in the acquisition system?

Secretary KRIEG. Well, let me clarify my position, Mr. Chairman.

I think it is very important.

Number one, only elected officials can make the decision on what

percentage of GDP we should be spending on defense. However, I

would respectfully suggest that those decisions should be based on

a comprehensive threat and risk-based approach on all three dimensions, today, intermediate term, long term.

And whatever you decide that percentage is going to be, you need

to figure out how you are going to pay for it, because right now we

already have a large and growing structural deficit. And so if you

want to spend more than 3.9 percent of GDP, then how are you

going to pay for it?

Second, I agree with you that in some cases tough decisions were

made in the past and are still being made. I would respectfully suggest that the connection with crusader and Comanche they were

made way too late. We wasted billions of dollars. So the question

is, how can we make them earlier. We use strategic choices, how

can we make these decisions earlier?

Third, and also related to that, yes, some choices have been made

but I would respectfully suggest that Tactical Air (TACAIR) may

not have made those choices yet. The numbers are a default. You

plug the number, how many you can buy with the money.

And, third, on the workforce, I am not saying you need more people, necessarily. And it is clearly understandable, in part, why the

workforce is smaller, because we had acquisition reform, and that

took out a lot of paperwork, and taking out a lot of paperwork is

really good. Okay? Not just for the government but also for the private sector.

What I am saying is, is we need to figure out how many we need,

what kind of skills and knowledge they need to have. It could be

less than this, but what kind of skills and knowledge do they need?

And we need to be aware that a very high percentage of our current workforce is scheduled to retire within the next few years.

And that is both a challenge and potentially an opportunity too.

The CHAIRMAN. Okay. Thank you.
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And, Mr. Chairman, could I be allowed to have—I hate to have

to beg for more time, but could I be allowed to have another question here.

Dr. SCHWARZ. Mr. Chairman, I think you can have as many

questions as you want.

The CHAIRMAN. You are very kind.

The Challenge Program, we developed this idea of the Challenge

Program a couple of years ago that made a lot of the questions that

Admiral Giambastiani and Secretary Krieg talked about. And that

is that we need to get the most efficiency that we can out of the

system, and in this age of rapidly developing technology, we are

lured by—when we are developing a base system that has taken

a number of years to develop, we see something that gives us an

efficiency component that gets you from A to B quicker and we

want to now retrofit or put that in the system.

The one problem we have is having smart people that have got

this judgment, this capability of weighing the pros and cons of disrupting the system, putting something new in, what is it going to

do to the base program.

We put the challenge system in because we figured, having little

insight into this thing, that the guys that really know if you can

get there with a quicker with a system, if you have got a new technology that leapfrogs something, if you have new efficiencies available. The guys that really know that, generally, are the competitors. Our entire system is based on competition. If the people of the

52nd District want a better congressman, they can go out and elect

one, right? They get a challenger out there and he ends up beating

the incumbent.

So we put together this challenge system that said, basically, if

you have a company that comes along and says, ‘‘I can make a better hubcap for the F–22 and more combat effective and cheaper and

you can integrate it easily, I want to have the opportunity to challenge the incumbent on that. The idea that if it made sense, first,

you would have DOD could dismiss them if these were hair-brained

ideas and didn’t have some substance to them, you could dismiss

them out of hand, so you are under no obligation to give a review

to assist them.

But if it made sense, if it made a prima facie case, you would

have a Blue Ribbon panel that would take a look at this component

and if was something that looked like proven technology, maybe a

product that actually existed right now, that you could save money

and you could produce more combat effectiveness to take it, and

this Blue Ribbon panel approved it, you would then have an array

of options as DOD and you could say, Okay, incumbent you are out

of there. Or the next phase of this program is starting in March

and we are going to insert this new system in in March, or maybe

we won’t do anything because the integration of the system is too

cost prohibitive.

My point is that, especially in this area, in this time when you

have fewer and fewer contractors, the challenge system was designed to get the meritorious cost-effective guys with a good idea

upfront where they could challenge, and that would put pressure

on the incumbents to not grow their programs, not feel like they

captured their position and therefore could not be dislodged and
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therefore they could let cost growth occur and they could rationalize it to the services, and the services would be captive to it.

Now, we passed the Challenge Program. DOD minimized the

Challenge Program. They thought that Congress wanted to get a

little pork out of them and so they got these little small programs

where they toss a couple of crumbs of the table, which was not the

intent. We didn’t want a darn thing out of this for our constituents.

What we wanted was the ability of a company to come in, whether it is big or small and say, ‘‘I can do that more cost-effectively.

There is a new technology here. I can lower your price, DOD and

have this Blue Ribbon capacity at DOD level to evaluate the challenge.’’ And if it proved meritorious to dislodge the incumbent, put

in the new system and move ahead.

Now, Admiral, what do you think about that? Do you think something? Because we have got the law in place to do that, and you

folks have a Challenge Program. But it scared the heck out of the

bigger guys and industry, and they managed to minimize this thing

when it went into implementation.

What do you think?

Admiral GIAMBASTIANI. If I could, Chairman, I am going to ask,

if you don’t mind, ask Secretary Krieg, to take the bulk of this answer, because to be frank with you, I have not read all of the legislation on the Challenge Program, but I would like to go back to my

ten years of experience dealing with what you are driving at, which

is competition of ideas and a competition of capability and efficiency. I think you are driving in the right area.

Now, I am going to ask Secretary Krieg to talk about this, because in the eight months I haven’t focused on this specific problem.

The CHAIRMAN. Okay. Great.

Secretary.

Secretary KRIEG. I actually went and looked at what we did with

it and, respectfully, it actually is creating some interested opportunities. But leave that aside, I thought some about this notion of

creating competition in an outsider reviewer of it. I have only

thought something about it, but I am having a hard time conceptualizing how to implement it without—I am having a hard time

conceptualizing how to implement it.

I understand your point and your desire, but——

The CHAIRMAN. Well, we actually laid this thing out fairly pragmatically. You would have a Blue Ribbon panel, let’s say you have

got some smart guys, technically, and they have the availability of

the National Laboratories and all of your analytical tools that are

available for DOD: ranges, testing capability, et cetera.

So you have a weapons system, and either the weapon system

itself or a component of that system, again, I use even something

small, not de minimus but something small that you have a competitor, an entity in the aerospace industry that says, ‘‘You guys

are paying this contractor, prime contractor or sub, $50 million for

this program. We have new technology. If you will let us come and

explain it to you, we are going to show you how you can get it for

$10 million, even though you are two years into this program. And

we guarantee you we think we can plug this in with a minimum
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of disruption to the program and with easy integration, and we

want a chance to make our case.’’

You take a look at it preliminarily, and if you don’t like it, you

reject it out of hand. You say, ‘‘This is wild and crazy. We are not

going to allow it.’’

When we did the Challenge Program initially, I was told there

an Arizona aerospace firm that said, ‘‘We want to challenge on the

F–22.’’ And everybody went nuts and said, ‘‘Well, you can’t do that,

that is too big.’’

But my point is, you make the challenge, okay, for this particular

component and if it looks like you make a prime facie case, you

then review it, you then have your Blue Ribbon panel look at this

thing. If they say, ‘‘There is substance to this and we can cut costs

50 percent or we can have better warfighting capability or a combination thereof, better effectiveness and better cost-effectiveness,’’

you then have your array of options that you can utilize.

You can say, ‘‘We are not going to do anything because we are

too far down the line in this program.’’ You can say, ‘‘We are going

into a second phase in March, and so we are going to put you in

in March,’’ or you could say, ‘‘Incumbent, you are out of there because it makes sense for us to terminate your contract. This thing

is so good and so effective that we will pay termination costs, which

we have a right to do under most contracts, and we will pay termination costs. And besides that, we think the incumbent has gotten

kind of fat and lazy on us here.’’

And so if you have a—you know, this is what is going to make

board of directors sit around saying, ‘‘You know, guys, we let these

costs go up an extra ten percent, I have heard rumblings in the industry, we are going to get challenged. And if we get challenged,

we could lose this little gravy train here, and I would recommend

you engineers go back and sharpen your pencils because we haven’t

captured this program. DOD is not our hostage on this thing anymore, and we better darn well get these costs down or we are going

to be out of here.’’

Now, that is what makes people move all the time in the private

sector, but especially with these big primes now who have their

partners and in some cases their subsidiaries doing the components. There is not much incentive for these guys to give you folks

a sharper pencil.

Secretary KRIEG. How about this, I will offer you a deal. I will

get my staff to take a hard look at it if you will accept a willingness

to look at the recent numbers on the Acquisition Workforce and

move from 300,000 to the 135,000 we have today.

I will work on the one if I can bring the other one to you, how

does that sound?

The CHAIRMAN. We are glad we could bring that number down

a little bit. Yes, we will look at both of them. Let’s do it.

And thank you, Mr. Chairman. You have been very kind.

Dr. SCHWARZ. Gentleman from Mississippi have any questions?

Mr. TAYLOR. I want to thank all of you, gentlemen. And I apologize for my absence. Your time is very valuable, and I am sorry I

wasn’t here for every minute of it.

Mr. Walker, how long have you been on your job?
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Mr. WALKER. It will be 7.5 years on April 26. My wife is counting.

Mr. TAYLOR. Okay. And the reason I ask is, and it really is the

form of a question, but my observation would be that five years

ago, right now, our nation was running a small annual operating

surplus. Bush’s budget comes along and is voted on in May of 2001,

calls for substantial increases in spending, substantial decreases in

revenue, and I really don’t—and, again, I am asking this in the

form of a question because my memory is far from perfect, but I

don’t recall a single administration official, appointed or elected or

career, saying, ‘‘This isn’t going to work, that we are going to run

up big deficits.’’ We are now $3 trillion deeper in debt, and so I am asking this

in the form of a question: Did you see this coming?

Mr. WALKER. I testified in February of 2001 as to several things.

Number one, the current surpluses that we were experiencing at

the time were temporary. We knew that we would enter a period

of large and growing structural deficits due to known demographic

trends and rising health care costs.

I also testified that the ten-year projected surpluses were just

that, projected, that they may or may not ever really happen.

And I also testified as to an approach that Congress might consider taking based on modern portfolio theory as to how it might

make decisions with regard to spending increases and tax cuts and

debt reduction that might be more prudent and take a more balanced approach, given the fact that we knew that the surpluses

were temporary and that the ten-year numbers were projected and

may disappear.

Unfortunately, some of the choices that were made were directly

contrary to prudent risk, including Medicare Part B.

Mr. TAYLOR. For the record, can I get a copy of your statement

from then?

Mr. WALKER. Be happy to.

Mr. TAYLOR. Because I was really—I remember any number of

people coming before the committee who were asking for increases.

I remember at the time we were going through, we had just

grounded about 950 Dewey helicopters for maintenance problems.

And I remember the day of one of those votes asking the Army

aviation guys, ‘‘What is more important, fixing the helicopters or

tax breaks?’’ of course they weren’t real comfortable answering

that.

But if there was someone on the record saying, ‘‘This isn’t going

to work,’’ I would like to see that, because I didn’t hear much of

that. I was looking for people to be saying things like that.

Mr. WALKER. Well, I will provide it. The other thing is, let me

say, Mr. Taylor, express my condolences for the loss of your property. I have been on your property in southern Mississippi.

Mr. TAYLOR. Pick up the beer cans next time. Just teasing. I am

sure that wasn’t yours.

Mr. WALKER. The Transportation Security Administration (TSA)

wouldn’t let me take them on the plane, probably.

Mr. TAYLOR. Okay. Thank you. But I would welcome that, and

since your memory strikes me as being pretty sharp, if you can

think of anyone else who was sounding that alarm, because one of
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the people who I was disappointed in is I don’t feel like Chairman

Greenspan spoke up very well. I thought he was pretty wishywashy on that. He has come back later and said it didn’t work, but

I don’t recall him saying it before. But if you know anything contrary to that, I would like to see it as well.

Thank all you gentlemen for sticking around.

Dr. SCHWARZ. Gentlemen, thank you.

Comptroller General Walker, Secretary Krieg, Admiral

Giambastiani and Secretary Patterson, thank you very much for

being here.

We stand adjourned.

[Whereupon, at 12:40 p.m., the committee was adjourned.]
A P P E N D I X

APRIL 5, 2006

PREPARED STATEMENTS SUBMITTED FOR THE RECORD

APRIL 5, 2006

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QUESTIONS AND ANSWERS SUBMITTED FOR THE

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APRIL 5, 2006

(113)

QUESTIONS SUBMITTED BY MR. SKELTON

Mr. SKELTON. Secretary Krieg, my understanding is that you have a 23-point

plan. When will you have your 23 points formally submitted to us?

Secretary KRIEG. [The information was not available at the time of printing.]

QUESTIONS SUBMITTED BY MR. CALVERT

Mr. CALVERT. I am pleased with the success of the Army’s efforts to rapidly develop and field its Common Remotely Operated Weapons Station (CROWS). The

testimonials from Soldiers and their leadership on the lives saved by CROWS demonstrate exactly the type of program that urgent needs acquisition authority granted

by was designed to support.

However, I am concerned that significant funding is being spent on a foreign producer of Remote Weapon Stations in order to bring the foreign product up to the

specifications that are already being procured in CROWS. This appears to be

counter to the effort the Army undertook to develop a ‘‘Common’’ system. It also appears that this ‘‘non-competitive’’ product improvement of the Stryker RWS is an

inefficient use of scarce Army resources.

Please provide this committee an understanding of why the Army is providing significant government funding to a foreign company (through a contract with General

Dynamics Land Systems) to develop its stabilization and improve its sensor and display capabilities for the Stryker RWS when the Army already has developed and

fielded a U.S. built and privately developed ‘‘Common’’ system known as CROWS.

Secretary KRIEG and Mr. WALKER. [The information was not available at the time

of printing.]

QUESTIONS SUBMITTED BY MR. MARSHALL

Mr. MARSHALL. How do we have a cost-effective ability to maintain that capacity

within the United States without making some major structural changes in the way

we are doing world trade, in that way we are just, sort of, generally manufacturing

things worldwide. That is the question.

Mr. WALKER. [The information was not available at the time of printing.]

Mr. MARSHALL. I would be very interested in seeing what you—if you could share

with me whatever you supplement the record with with regard to this ‘‘Buy American’’ business that we were talking about.

And back to the structural deficit problem that we face. It is not going to get

cured by all the things that we are talking about today, but it is going to affect our

national security because defense spending is discretionary, basically.

Have you done anything that you could share with me, have you all written something on this subject? I mean, reams of things on the general subject, but specifically is it going to affect defense?

Secretary KRIEG. [The information was not available at the time of printing.]

QUESTIONS SUBMITTED BY DR. SNYDER

Dr. SNYDER. Mr. Walker, in your written statement, I am going to read a couple

of paragraphs that I think really illustrate, and this is quoting you, Mr. Walker:

‘‘As I have testified previously, our nation is on an imprudent and unsustainable

fiscal path. Budget simulations by GAO, the Congressional Budget Office and others

show that over a long term we face and large and growing structural deficit to primarily the known demographic trends, rising health care costs and lower Federal

revenues as a percentage of the economy. Continuing on this path will gradually

erode, if not suddenly damage, our economy, our standard of living and ultimately

our national security.’’

And then just before that, you refer specifically to DOD and you say, ‘‘In the past

five years, DOD has doubled its planned investment in weapons systems, but this
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huge increase has not been accompanied by more stability, better outcomes or more

buying power for the acquisition dollar. Rather than showing appreciable improvements, programs are experiencing recurring problems with cost overruns, missed

deadlines and performance shortfalls.’’

I think those are two very powerful statements. One is in a narrow category of

what you all are focusing on and trying to do your best job of improving, and you

all have pointed out that it has occurred over decades.

And then, Mr. Walker, you put it in the context of we are a nation that does not

have unlimited resources, and our national security also depends on our economic

strength and our fiscal strength. So we have some real challenges.

Mr. Walker, in your written statements, you have some little charts in here. You

have one for DOD, I think you have one for, let’s see, one for the Secretary of Defense, one for military services and joint developers. You don’t have one for Congress

in terms of actions that we might do, and I am one that feels like the Congress has

just dropped the ball in terms of providing oversight in a whole lot of different

areas. But would you create for us a chart for Congress? What should we be doing?

Mr. WALKER. [The information was not available at the time of printing.]

QUESTIONS SUBMITTED BY MR. ANDREWS

Mr. ANDREWS. Mr. Krieg, although today’s hearing focuses on major defense acquisition reforms, I would like to ask you about ongoing reforms to the Prime Vendor program. I commend the Department for taking a hard look at the abuses in

the Prime Vendor program. But I am concerned that you may not be drawing a

needed line between the few abusers and the vast majority of vendors who play by

the rules. Most importantly, I worry that your investigation is gravely slowing down

the delivery of crucial equipment to warfighters on the front lines.

Please answer the following questions: 1) How many Prime Vendors are there?;

2) How many require further investigation?; 3) What is the Department’s policy toward the rest of the Prime Vendors who have been cleared of any wrongdoing? 4)

What are you doing to expedite the ordering process for the Prime Vendors so that

the military receives their orders in a timely manner?; and 5) What is being done

to create a data base of approved Prime Vendor products and pricing within DLA

so that Prime Vendor Contractors can get quicker approvals on their purchase requests.

Secretary KRIEG. [The information was not available at the time of printing.]

QUESTIONS SUBMITTED BY MRS. DRAKE

Mrs. DRAKE. Under Secretary Krieg, over the last year, I have heard various witnesses and subject matter experts talk about the increased role of our combatant

commands with regards to acquisition policy. It seems to me that those closer to the

warfighter and those close to the front lines would be better situated to determine

military need in terms of capability. In the Defense Science Board’s recent summer

study on transformation, an increased role for Joint Forces Command (JFCOM) in

terms of concept development and experimentation was recommended. Building

upon this recommendation, I would like to inquire as to the Department’s views not

only on the feasibility of an increased acquisition role for the combatant commands

in general, but an increased acquisition role for JFCOM in specific.

Secretary KRIEG. [The information was not available at the time of printing.]

QUESTIONS SUBMITTED BY MR. MILLER

Mr. MILLER. Defense News recently reported that a new type of program review,

known as a concept decision review, ‘‘was borne during deliberations over the Quadrennial Defense Review.’’ It goes on to say that ‘‘OSD says it will help the department’s leadership to ‘make stronger corporate investment decisions by coordinating

the DOD requirements, acquisition and programming at the point of investment.’ ’’

My understanding is that the first review of this type looked at the CSAR–X program and on March 23 mandated no major changes to the services acquisition strategy. Additionally, the CSAR–X program is supposedly still on schedule for an August Defense Acquisition Board (DAB).

Is my above understanding correct and is it true that this program was developed

during the QDR planning process?
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What value added does the ‘‘concept decision review’’ bring to the acquisition and

requirements development process and how does its personnel makeup (Under Secretary Krieg, J–8, etc.) differ from a DAB?

Secretary KRIEG. [The information was not available at the time of printing.]

QUESTIONS SUBMITTED BY MR. KLINE

Mr. KLINE. If I could just get from maybe it is from you, Mr. Secretary, a list of

those things that the Department has acquired specifically under this authority

granted in the statute.

Secretary KRIEG. [The information was not available at the time of printing.]

Æ