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i 

51–765 2010

[H.A.S.C. No. 111–72] 

COORDINATING REQUIREMENTS, 

BUDGETS AND ACQUISITION: 

HOW DOES IT AFFECT COSTS AND 

ACQUISITION OUTCOMES? 

HEARING 

BEFORE THE

PANEL ON DEFENSE ACQUISITION REFORM 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

JUNE 3, 2009 
(II) 

PANEL ON DEFENSE ACQUISITION REFORM 

ROBERT ANDREWS, New Jersey, Chairman 

JIM COOPER, Tennessee 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

K. MICHAEL CONAWAY, Texas 

DUNCAN HUNTER, California 

MIKE COFFMAN, Colorado 

ANDREW HUNTER, Professional Staff Member 

JOHN WASON, Professional Staff Member 

ALICIA HALEY, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2009 

Page 

HEARING: 

Wednesday, June 3, 2009, Coordinating Requirements, Budgets and Acquisition: How Does It Affect Costs and Acquisition Outcomes? ............................. 1 

APPENDIX: 

Wednesday, June 3, 2009 ........................................................................................ 27 

WEDNESDAY, JUNE 3, 2009 

COORDINATING REQUIREMENTS, BUDGETS AND ACQUISITION: HOW 

DOES IT AFFECT COSTS AND ACQUISITION OUTCOMES? 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Andrews, Hon. Robert, a Representative from New Jersey, Chairman, Panel 

on Defense Acquisition Reform ........................................................................... 1 

WITNESSES 

England, Hon. Gordon, Former Deputy Secretary of Defense, Former Secretary of the Navy, and President, E6 Partners, LLC ...................................... 4 

Giambastiani, Adm. Edmund, USN (Retired), Former Vice Chairman of the 

Joint Chiefs of Staff, and Chairman of the Board, Alenia, North America .... 5 

Kadish, Lt. Gen. Ron, USAF (Retired), Former Director, Missile Defense 

Agency, Former Chairman, Defense Acquisition Performance Assessment, 

and Vice President, Booz Allen Hamilton .......................................................... 8 

APPENDIX 

PREPARED STATEMENTS: 

Andrews, Hon. Robert ...................................................................................... 31 

Coffman, Hon. Mike, a Representative from Colorado, Panel on Defense 

Acquisition Reform ....................................................................................... 33 

England, Hon. Gordon ...................................................................................... 36 

Giambastiani, Adm. Edmund .......................................................................... 46 

Kadish, Lt. Gen. Ron ........................................................................................ 56 

DOCUMENTS SUBMITTED FOR THE RECORD: 

The Defense Acquisition Performance Assessment Report, January 2006 .. 69 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Andrews ..................................................................................................... 227 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

[There were no Questions submitted post hearing.] 

(1) 

COORDINATING REQUIREMENTS, BUDGETS AND ACQUISITION: HOW DOES IT AFFECT COSTS AND ACQUISITION OUTCOMES? 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, DEFENSE ACQUISITION REFORM PANEL, Washington, DC, Wednesday, June 3, 2009. 

The panel met, pursuant to call, at 8:09 a.m., in room 2212, Rayburn House Office Building, Hon. Robert Andrews (chairman of the 

panel) presiding. 

OPENING STATEMENT OF HON. ROBERT ANDREWS, A REPRESENTATIVE FROM NEW JERSEY, CHAIRMAN, PANEL ON 

DEFENSE ACQUISITION REFORM 

Mr. ANDREWS. Ladies and gentlemen, with the permission of the 

minority staff and their gracious cooperation, we are going to 

begin. I wanted to welcome the witnesses and the members of the 

public and the media to this morning’s hearing, and I wanted to 

begin by thanking my colleagues on this panel for their diligent 

work and the efforts that led to the acquisition reform legislation 

signed by the President 12 days ago. 

This panel was empanelled a very brief period of time ago, and 

each of the members on both the Republican and Democratic side 

put in a significant amount of time in learning these issues and 

made a very valuable contribution to that effort which has now become law. I did want to express my appreciation to the staff as well 

as the colleagues on the panel for their hard work. Our work, as 

we see it, is only about 20 percent done in that statute. Maybe a 

little less than that. But obviously, we have a responsibility as the 

statute was implemented to understand whether it is working or 

not and to determine what that means. But by any definition, 

about 80 percent of the procurement done by the Department of 

Defense (DOD) is not touched by the statute the President signed 

12 days ago because it dealt with the major weapons system exclusively, as this panel knows well, and as many members of our 

panel know very well as well that about 60 percent of the procurement done by the Department of Defense is services, not goods. 

And of the 40 percent that is hardware, major weapon systems 

only make up a part of that, maybe about a half of that. So there 

is a lot of work left to be done. The panel began with a series of 

questions and the first question that we started with was what set 

of metrics should exist or can exist to properly measure the difference between what we are paying for goods and services procured by the DOD and what the value of those goods and services 

is. 
2 

The delta, if any, between what we are paying and what we are 

getting. And after a series of hearings on that, we are now ready 

to proceed to our next step which is to ask the next question, what 

hypotheses are out there as to why that difference exists? In other 

words, given the fact that the evidence is rather clear that there 

is a gap between what we pay and what we receive, what are the 

causes of that gap. Today is the first in a series of hearings that 

will be structured around the idea of a hypothesis as to what those 

causes are. This morning, the hypothesis would be this: The gap 

between what we pay and what we receive is, in some part, explainable by the absence of effective coordination among the requirements process, the procurement process and the budgeting 

process. That when one looks at those three significant initiatives 

that must be accomplished in the Department of Defense, there is 

either little or no coordination on too many occasions. 

Now there are exceptions to that rule. There have been many instances where there has been very effective coordination. I think 

the bulk of the evidence is that that is more a function of the talents and commitment of the individuals that are involved, not necessarily the administrative structure within which they are working. One of the corollary hypotheses to this is maybe it doesn’t matter much what the administrative structure is. It is entirely dependent upon the skills and personalities of the people involved 

and that there are very finite limits as to what we can do with manipulating an administrative structure. That may well be the case. 

But the general purpose of this morning’s hearing is to hear from 

three incredibly accomplished individuals with deep experience and 

broad knowledge in this area to address this hypothesis to the extent there is a lack of coordination among the requirement setting 

process, the procurement process and the budgeting process to 

what extent is this the cause we have identified as the gap between 

what we pay and what we get. After this morning’s hearing we will 

proceed with a lot of other hypotheses that people have suggested 

over the years and try to evaluate those and come to some understanding as to what combination of hypotheses make the most 

sense in meeting our ultimate objective, which is to come up with 

a series of legislative recommendations to try to make the system 

work better. Pleased to be joined by our friend from Colorado, Mr. 

Coffman, and I realize he just dashed in. But I would give him the 

opportunity to make an opening statement if he so desires. 

[The prepared statement of Mr. Andrews can be found in the Appendix on page 30.] 

Mr. COFFMAN. Thank you, Mr. Chairman. I will submit my statement for the record after the meeting. But I appreciate you all for 

coming here and look forward to your testimony. 

[The prepared statement of Mr. Coffman can be found in the Appendix on page 32.] 

Mr. ANDREWS. Thank you very much, Mr. Coffman. And without 

objection, opening statements from any other member of the panel 

will be included in the record should they choose to submit them. 

We appreciate the indulgence of the witnesses in waiting and arriving. I am going to give very brief biographical introductions, because each of you truly is a person who needs no introduction 

around here. We mean that as a compliment. 
3 

But very briefly, Mr. Gordon England is now President of E6 

Partners, LLC, a firm specializing in international business. As we 

well know, he has previously served as the 29th Deputy Secretary 

of Defense. He also served as the 72nd and 73rd Secretary of the 

Navy and the first Deputy Secretary of the Department of Homeland Security. He is a native of Baltimore, graduated from the University of Maryland in 1961, earned his masters in business administration from the M.J. Neeley School of Business at the Texas 

Christian University and has been a leader in civic and charitable 

organizations as well as his exemplary service to our country. Welcome, Secretary England. Nice to have you back with us. 

Secretary ENGLAND. Chairman, thank you. 

Mr. ANDREWS. The Admiral is next. The bio is here. Admiral Edmund Giambastiani. Is that correct, Admiral? 

Admiral GIAMBASTIANI. Yes, sir. 

Mr. ANDREWS. I am from New Jersey. So I get a lot of practice. 

It is a beautiful Italian name. He joined Alenia North America, 

Inc., in January of 2008 as Chairman of the Board of Directors. In 

addition, he serves as Director of SRA International, Inc., Monster 

Worldwide, Inc., The Atlantic Council of the United States, QinetiQ 

Group in the United Kingdom. A career nuclear submarine officer, 

the Admiral retired from active duty on October 1, 2007. In his last 

assignment, he served as the Nation’s 7th Vice Chairman of the 

Joint Chiefs of Staff and its second highest ranking military officer. 

He is a native of Canastota, New York. And he graduated from the 

U.S. Naval Academy in 1970 with leadership distinction. Welcome, 

Admiral. Thank you for your service. 

Admiral GIAMBASTIANI. Thank you, chairman. 

Mr. ANDREWS. And Lieutenant General Ronald Kadish is presently the Vice President and the partner in the aerospace marketing group for Booz Allen Hamilton, Inc. He joined that firm on 

February 15, 2005. He has distinguished himself there as panel 

Chairman of the Defense Acquisition Performance Assessment, examining the strengths and deficiencies of the current defense acquisition process. He has worked with us for a very long time on 

this committee as the Director of the Missile Defense Agency in the 

Office of the Secretary of Defense. As director, General Kadish was 

the acquisition executive for all ballistic missile defense systems 

and programs. He entered the Air Force in 1970 after graduating 

from the Reserve Officers’ Training Corps (ROTC) program at St. 

Joseph’s University in Philadelphia. We had another St. Joe’s witness earlier. I said the hawk will never die to those witnesses, 

right, General? 

It is great to have you with us, gentlemen. We will start with 

Secretary England. You know the rules well, that we ask people to 

summarize their oral testimony in about—their written testimony 

rather in about five minutes. Your written statements in their entirety will be made a part of the record. We try to maximize the 

amount of question time for the members so we can get the benefit 

of your excellent work. So, Mr. Secretary, you are on. 
4 

STATEMENT OF HON. GORDON ENGLAND, FORMER DEPUTY 

SECRETARY OF DEFENSE, FORMER SECRETARY OF THE 

NAVY, AND PRESIDENT, E6 PARTNERS, LLC 

Secretary ENGLAND. So, first, Mr. Chairman, thanks for the opportunity to come by again. First of all, I applaud you. You have 

to be pretty brave to enter this arena as you know. In my commercial days, I ran several Defense Science Board studies on acquisition reform and probably served on another dozen over my career. 

When I became the deputy, I had a group, in fact, General Kadish 

was one of the leaders of that group to look at the 123, I believe, 

prior formal studies on acquisition reform and that didn’t include 

all the work by think tanks and everybody else in the Government 

Accountability Office (GAO) and the Congress and so this is not 

new ground being plowed. But that would tend to indicate that this 

is an extraordinarily complex topic that you are about. And I would 

make just a couple of recommendations and observations in terms 

of how you might improve this process. Obviously requirements is 

key. I am sure Admiral Giambastiani will have something to say 

about that because he actually ran the organization in terms of requirements. 

I do believe there are some organizational changes that were put 

in the Department frankly when I was there that are hopefully 

beneficial to help tie together the requirements, the budgeting, the 

acquisition, in fact, the operational end of this business. We now 

have processes in place. I hope they are still in place, specifically 

called the DAWG, which is the Deputy’s Advisory Working Group, 

which is all the senior leadership, four-stars and civilian leadership 

met every week several times a week, and literally went over every 

single program, what the budget was, what was the performance, 

what was the need, what were the requirements so we integrated 

this across the department because programs are no longer operated as individual programs. 

They are now overarching capabilities. So then we also put processes together to look across all of the programs in terms of how 

did they all integrate, because frankly they all come together at 

some point in time. So they have to be synchronized. Everything 

has to be synchronized so that it all works together when it comes 

together in terms of being fielded because all of this is integrated 

some very high level and not individual programs. 

So I think some steps have been made to address that, but this 

is a complex issue and that is one process that was tried as a way 

to get better visibility and better ways of controlling. In my statement, I made a few recommendations. First of all, I will tell you, 

the system is very complex. Counterintuitively, that means you 

want to give managers more flexibility. The more complex the system, the more flexibility you need, managers need. The trend is always the other way. That is it gets more complex, we add layers 

of bureaucracy and regulation and control and that makes it almost 

impossible to run very complex programs. So the system today is 

way over-burdened. It is over-burdened by the Department, it is 

over-burdened by the Congress. As it becomes a more complex system, we need to simplify it, otherwise managers won’t be able to 

operate. 
5 

But the other comment I will make is I think multi-years, we 

have the wrong approach on multi-year contracts. Stability is what 

counts in these programs, predictability in programs. Today we 

have multi-years based on savings. But frankly, in my view, that 

is the wrong criteria. Multi-year programs almost always hit their 

targets year after year because there is a long-term commitment of 

money to the program, people know what the schedule is, they 

know what the requirements are, they can rely on future years, 

companies can invest. So we look at saving money. My own view 

is we should have more and more multi-years on the basis of providing stability of programs so cost doesn’t grow. I mean, one approach is to look at cost savings. The other approach is how do you 

put a structure in place so that costs do not grow in the future. So 

I would turn that process around. 

My last comment would be—you mentioned metrics. I think you 

need to decide what your objective is here. Not all things are, 

‘‘going to come out with a perfect answer,’’ just like our international relations. You have to set what the objective is. This is an 

extraordinarily complex process with many competing interests and 

cross-currents that go in every day and every year in industry, in 

government and the DOD and the military. So you have to decide 

what is the plateau you are trying to achieve in this. Because otherwise, I think if we are looking to end up with this sort of perfect 

system, perfect meaning manageable like—I almost said a car company, but that is probably a bad example—but manageable like a 

commercial product. You know, where we put out regular products 

on a repetitive basis. It is never going to achieve that level of performance because that is not the nature of what this business is 

about. 

So a few comments. My statement hopefully is clear in terms of 

some observations and recommendations. But I would like to engage in a discussion with the members. 

[The prepared statement of Secretary England can be found in 

the Appendix on page 35.] 

Mr. ANDREWS. Thank you, Mr. Secretary. And we have had a 

chance to read your testimony prior to this. We appreciate it very 

much. And I appreciate you giving us a chance to expand the question time, too. Admiral, welcome back. It is great to have you with 

us again. 

STATEMENT OF ADM. EDMUND GIAMBASTIANI, USN (RETIRED), FORMER VICE CHAIRMAN OF THE JOINT CHIEFS OF 

STAFF, AND CHAIRMAN OF THE BOARD, ALENIA, NORTH 

AMERICA 

Admiral GIAMBASTIANI. Thank you, Chairman. And thanks to 

you and all the members of the committee for inviting not only me, 

but obviously this group to participate this morning in this incredibly important hearing. I might just mention that the fact that you 

have focused on, if you will, requirements, budgets and acquisition 

is gratifying to me because recently, over the last year, I have been 

helping the Secretary of the Navy out in his advisory panel and my 

mantra frankly for a year has been requirements, budgets and acquisition. But I would tell you it has been integration of those as 

opposed to just coordination of them. Coordination is that level that 
6 

is very helpful, but if you can integrate these and bring them to 

a higher level, frankly, I found you are much more successful in the 

long run. It also feels like old times again to be here with these 

three individuals. Gordon didn’t mention in, but—and Ron may, 

but I will pre-empt here and just tell you the last time the three 

of us appeared together in a hearing on this very subject was September of 2005 before the Senate Armed Services Committee. 

We also had Ken Krieg at the time who was the new Under Secretary. We were all—Gordon and I were new in our roles as Ken 

Krieg was and Ron was working on that DAPA report, the Defense 

Acquisition Performance Assessment. So it is old times here this 

morning. 

Let me make a few points here and you may hear a little bit of 

repetition on the stability front on what Gordon talked about. But 

first of all, as I said, I am very pleased that you are covering this. 

A fundamental premise in my view to our success is based on well 

informed risk management, a very important thing, well-informed 

risk management. And I call the requirements, if you will, the 

budget and acquisition portions of this, the three legs of the stool. 

And I will refer to these three legs and the integration of them repeatedly. But I would emphasize with the three legs—there is 

three things that I have always found important across all of them 

and that is affordability, stability and simplicity. And let me just 

talk about requirements for a couple of moments, and again, I will 

summarize what I have got in my statement. 

I have participated in these requirements generations, frankly, 

since I was in my first commanding officer role in the early 1980s, 

and then onwards throughout successive commands, successive 

tours in the Pentagon and then in joint and allied positions. In my 

opinion, at least 50 percent of getting a program right is establishing realistic, sound, practical, simple requirements up front and 

then, of course, sticking with them. 

Affordability, stability and simplicity, those three factors are 

really important and executable set of requirements for any procurement in my view. Let me talk just for a moment on the affordability front. All too often, this word is forgotten in the course of 

talking about this, the affordability piece right up front. We need 

to give military officers who are tasked with defining requirements 

more and better insights into the cost drivers, the cost drivers in 

the requirements they are defining. 

Now, I just might mention this. I uniquely had a very good relationship here with this gentleman next to me. He was a wonderful 

man to work with, it is the Deputy Secretary. And I might mention 

three processes that I spent a lot of time working. And the first one 

he mentioned was the Deputy’s Advisory Working Group. What he 

didn’t tell you is that he, as the Deputy Secretary, went so far as 

to name me as the co-chair of the Deputy’s Advisory Working 

Group. This was very important, once again, to bring the military 

side of the equation and the civilian side to produce capabilities for 

our service personnel together. 

He did that early on and it was very important. So that helped 

me work in the concept, in the resource side as a co-chair of this 

group. Very important. The second thing, obviously, I was the 

chairman of the Joint Requirements Oversight Council (JROC) 
7 

which sets military requirements. But thirdly, and just as important, I served as the co-chair of the Defense Acquisition Board. So 

those three things allowed me as a senior military officer to work 

in all three legs of the stool, if you will, in a line way. Very important. 

In the recommendations I have made in panels to date—for example, in the Secretary of Defense (SECDEF) advisory panel with 

the Business Executives for National Security and the rest is to 

make sure that we, in fact, take senior military leaders and allow 

them to be participating in a line functional way in all three of 

these legs, so that I think it will help them make better decisions, 

at least in my perspective, as a military officer. Cost-driver-analysis, as I said, in these is very important. And I can elaborate on 

that, and clearly my statement does. But I borrowed most of the 

cost-driver-analysis techniques from reviews I learned early on in 

the acquisition process as a co-chairman of the Defense Acquisition 

Board, we were looking at the Joint Tactical Radio System, JTRS, 

we were looking at the National Polar-orbiting Operational Environmental Satellite System. And frankly, we then introduced and 

made it a requirement through a chairman instruction that all of 

the services had to bring in cost drivers. Very important. 

On the stability front, it should be no news to anyone sitting in 

this hearing, just as Gordon England has said, is that setting unrealistic requirements during program definition and subsequent requirements creeps are major causes of failing programs. And let me 

just reiterate one important point here. I believe that delivering 80 

to 90 percent of a solution on time with a life cycle maintenance 

plan allowing for further growth is far superior to trying to go after 

a 100 or 120 percent solution. Stabilizing requirements is tough. 

We all see how a program could be better if we could incorporate 

the latest technology or some additional capacity. Which leads me 

to my last point of simplicity. We have done best, in my view, as 

I said, by trying to be simple. I have given you a series of examples 

in the written testimony. F–16, the series of the F–16, the F/A–18 

Super Hornet E/F/G, Los Angeles-class, Arleigh Burke-class, Virginia-class submarine. These have all been successful programs 

and are successful programs because we kept simplicity, if you will, 

affordability, we kept that block approach as we provided these capabilities. Funding stability is incredibly important. 

Gordon mentioned greater use of multi-year buys. I cannot overemphasize how this takes risk out of the industrial side of the 

equation and takes risk out on the defense side. The ability to plan 

ahead, the ability to invest in Research and Development (R&D), 

the ability to invest in installation and the rest is incredibly important. All those programs I cited before in general had some type 

of multi-year or risk management that really made them incredibly 

effective. 

Lastly, budgets have no memories. It is something an old Pentagon saying I learned very early on. In order to add memory to 

the process of procurement, if you will, writ large across our government, multi-year buys are important risk reduction techniques 

to inject a memory into the budget. 

One last point I will just make, and it is very important. Again, 

I borrowed these from the acquisition side and they are the intro-
8 

duction of technology readiness levels and manufacturing readiness 

levels into the requirements generation piece where you take these 

and lift them, if you will, from the acquisition side. You bring them 

into the requirements generation so you are not trying to shoot for 

the moon, you are keeping it simple and reduce the risk on a program to make it, if you will, more doable and make it more successful. The healthy conversation to do all of this stuff between industry, the civilian and military sides and with Congress is incredibly 

important. 

Thank you again for allowing me to introduce my written testimony, chairman, and the members of the committee. Recommendations regarding this three-legged stool if I could leave you with one 

point, those three words, affordability, stability and simplicity. 

Thank you. 

Mr. ANDREWS. Thank you, Admiral very much. 

[The prepared statement of Admiral Giambastiani can be found 

in the Appendix on page 45.] 

Mr. ANDREWS. Again, we have had the chance to review your 

written testimony and look forward to questions. General Kadish, 

welcome back. It is good to have you with us. 

STATEMENT OF LT. GEN. RON KADISH, USAF (RETIRED), 

FORMER DIRECTOR, MISSILE DEFENSE AGENCY, FORMER 

CHAIRMAN, DEFENSE ACQUISITION PERFORMANCE ASSESSMENT, AND VICE PRESIDENT, BOOZ ALLEN HAMILTON 

General KADISH. It is great to be back, Mr. Chairman. I spent 

a lot of time in this system and, quite frankly, have been a victim 

of it at certain times. So I have a perspective and Secretary England allowed me to spend some time on that commission called 

DAPA, Defense Acquisition Performance Assessment Group, to 

think about this even more. And my statement has a lot of what 

the DAPA report came up with it is not so much interesting for 

this group for the specific recommendations as it is to describe the 

problem a little bit more in detail and how we saw the issues that 

both Secretary England and Admiral Giambastiani talked about. 

But there is just a couple of points I would like to re-emphasize 

and I would also recommend that if you would allow to have the 

DAPA report in your record. 

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

page 67.] 

Mr. ANDREWS. Without objection. 

General KADISH. The first issue is it has never really been clear 

to me when we looked at the system what the criteria for success 

is and when we were dissatisfied with it. We talked a little bit 

about the metrics and the value equation and that is certainly an 

important aspect. But as you look in the history where all these 

studies have been done, in fact, you can go probably to the Civil 

War and earlier on some of these very same issues, the fact of the 

matter might be that we need to adjust our expectations a little bit 

in a sense of the outcomes of this. 

All of the hardware, if not most of the hardware and the equipment we have put out of this system over many years have given 

us a technological edge. So we shouldn’t forget that. There are 

thousands of people working out there every day to make this hap-
9 

pen and doing a very good job. Now, we see some of the disasters, 

but I think that is more a function of the difficulty of the job. These 

systems that we are talking about and even the services, under 

very difficult circumstances in a lot of cases, are difficult tasks, especially in a wartime environment and in a peacetime environment 

when we faced the Cold War, we produced some of the most technologically sophisticated elements that the world has ever seen. 

And the newest examples, you could go right down the list from 

Unmanned Aerial Vehicles (UAVs) to some of the robotics that we 

are doing today and especially in medical fields. It is phenomenal 

what we have been able to accomplish. So we shouldn’t lose sight 

of that. But in the process of trying to improve this system over 

many years, we have made it almost unintelligibly complex to understand. And that complexity drives a lot of what—the problems 

we see today. And I would challenge anybody to, in one day’s study, 

try to understand how we actually do business in this area. And 

I think you might be experiencing that yourselves in the sense that 

even people who have spent careers like myself here, I still marvel 

at some of the things that we have in our rule book that we just 

don’t necessarily understand. 

So that complexity is an albatross around our expectations for 

success. And it gets translated into lengthy schedules, time that is 

out of control and that all translates into huge cost expectations 

that are not met. However, the system is, if you look at it, could 

be simply described. Requirements, budget and acquisition and 

they need to somehow work together and on the charts it looks 

pretty good. In addition to complexity, we—because of the way we 

operate independent in each one of those processes, we introduce 

instability and that is financial instability—I don’t think I have 

ever been if a program where my budget didn’t change every 12 to 

18 months. 

It is remarkable that the people we have out there doing this 

every day can make this work still under the systems that we impose on ourselves. And all for good reason. There are a lot of heroes 

out there really making this work and I would almost say in spite 

of the system. And we tend to, especially at our level with Admiral 

Giambastiani and Secretary England, work very hard at the top 

level and we could very easily see that these things are solvable 

in the sense of making requirements more simple. 

And I will just take one example. We came up with a system of 

key performance parameters not too many years ago and the idea 

was very simple. If we could leave three to four or maybe five key 

performance parameters and specify a system, we would be satisfied with that system. And if we didn’t, we would have it come back 

and reevaluate whether we wanted that system. Well, now, we 

have programs with 14, 15, 16 key performance parameters, and 

each one of those key performance parameters drives specifications 

in a tree like manner down to 2,500 to 3,000, to 10,000 specific 

specification requirements you have got to make. 

So the decisions that look very simple, coherent and practical at 

the top of the pyramid get implemented through this system and 

through a following of all the rules into very complex and difficult 

tasks. The last point I would make in summarizing my testimony 

is that there is a set of criteria—and some questions you should 
10 

challenge this hypothesis with any procurement improvement idea 

that might be postulated. 

And the first one would be: Will it reduce complexity? And going 

back to the Admiral’s idea of simplicity here. If it increases the 

complexity of the system and it adds to the rule book without 

something coming out, it ought to be challenged. And other layers 

of oversight and management don’t necessarily improve the process. Second, will it be more—will it add stability to the programs 

at all levels? The big ones we all understand, but the smaller ones 

out there that people are operating at the same—under the same 

rule book and having the same challenges. So the stability idea 

where you can get a decision and operate under it and only have 

a problem when you cannot perform because the technology is too 

challenging or you run into an obstacle and not the system coming 

back and saying you are not spending your money fast enough so 

we have to take half of it away for next year. 

Okay. And the third one, and I think the final point I will make 

is that we too often substitute costs for the real issue here and that 

issue is time. The time value of the things that we do is ignored 

in a lot of cases in decision making. Schedules seem to be more of 

an afterthought and a desire rather than a sense of urgency in the 

process. And time—and I am talking about time to make decisions, 

to do budgets, as well as to write specifications and do the drawings and those types of things that make these systems work and 

perform the services. The time value of this capability to the 

warfighter, especially in wartime is incredibly important. And it is 

similar to the time value of money concept, the dollar today is 

worth more than the dollar tomorrow. 

That is what I have been taught in the economics books. And the 

same way with the time value of these systems and services. Done 

today, they are cheaper, better than if we wait years. Some technology requires more time. But we ought to focus more on the time 

required to make the decisions and implement them and hold people accountable for that and we will reduce the costs. 

And finally, this idea that I don’t think process is going to fix 

this problem. When we add process and improvements, we tend to 

really add things and not take things away. And under that approach, I think we will just increase complexity. 

So I would be—I would advise a lot of caution in adding things 

without asking the question what are you going to take away to 

make these processes more integrated and less complex. And at the 

end of the day, it is the people doing the job, making more right 

decisions than wrong decisions that are going to produce the outcome here. And it really does—it might really come down to the 

fact that we can make the administrative systems as good as we 

can make them in human terms, but it is going to come down to 

people doing the job every day. And we have got to select them 

right and we have got to support them and make them perform 

and hold them accountable. Thank you, Mr. Chairman. 

[The prepared statement of General Kadish can be found in the 

Appendix on page 55.] 

Mr. ANDREWS. Thank you, General. I thank the panelists for excellent presentations. We will begin with the question time. I think 

it is fair to say that we have heard a consensus that lack of coordi-
11 

nation that we see in the requirements and procurement and budget process is a result of too many rules and too many attempts to 

fix the problem, which creates a sort of archeological dig where 

there is one solution piled on top of another, piled on top of another, piled on top of another that worsens the problem. And that 

these add—to use the General’s criteria—they add complexity, they 

reduce stability and they extend time, therefore adding to costs and 

adding to complexity. Which starts the whole downward spiral all 

over. 

I think I also hear a consensus that an expansion of multi-year 

budgeting and therefore multi-year contracting authority would be 

one way to address this problem. Because if you do a multi-year 

contract, sort of by definition, assuming you have got a cleaned up 

requirements process that goes more toward that 80 percent solution, if you go the multi-year contracting, almost by definition, the 

procurement and budgeting steps are integrated because of the way 

you think about a multi-year budget or contract. 

Let me play devil’s advocate for a moment. Isn’t this saying that 

systems that have produced dramatic cost overruns are now going 

to buy more of it because we are going to do three or four years’ 

worth of budgeting instead of one and buy three or four years’ 

worth of mistakes instead of one? Doesn’t that take away the oversight function of the legislative branch in a way that would be deleterious? 

Secretary ENGLAND. I guess, Mr. Chairman, I would say you are 

obviously not going to put everything into a multi-year. But right 

now we do very few programs and not just production. I would actually look at development programs because when you go to that 

multi-year, you basically freeze the requirements, you know, what 

the dollars are, not only this year, but in out-years, which you 

never know, because every program, other than a multi-year is 

funded yearly. So you actually never know your out-year funding. 

The contractor doesn’t know the out-year funding. Everybody gets 

a bite at this apple, in the services, in the building, in the Congress. Right? So you still have to be selective at this. 

Mr. ANDREWS. What would be the criteria for that selection? 

Which projects and systems would fall into the multi-year basket 

and which wouldn’t? 

Secretary ENGLAND. First, I say ones that are critical and national importance I would always look to put in that basket because I believe those—— 

Mr. ANDREWS. I don’t say this to be facetious, but have you ever 

heard somebody come in here and testify that something is not of 

critical national importance? I don’t mean to be whimsical—— 

Secretary ENGLAND. You are right. So obviously judgment applies—and I am not sure that there is a formula for that judgment. 

My only comment would be the formula in the past has been a program that is reasonably stable and that you can predict basically 

10 or 15 percent cost savings. And I would say that any program 

you can predict that if you actually want to because the baseline 

is always unknown some extent. So I am not sure it is a reasonable 

baseline anyway. And I would just suggest when you look at the 

multi-years, don’t look at it in terms of savings, look at it in terms 

of stability achieved so that you don’t get the cost—— 
12 

Mr. ANDREWS. Productivity. 

Secretary ENGLAND. Well, predictability. The budgets will be in 

the out-years. Contractors can invest in improvements because 

they know there is business in the out-years. I mean, there is incentives in this system to perform better as opposed to a year-byyear type process. 

Mr. ANDREWS. As a follow-on to that to either of the—any of the 

panelists, if the taxpayers are going to make a multi-year budget 

and contract commitment, should there then be more rigid standards from the contractors to have fewer overruns? In other words, 

if we are giving you three or four years of stability in a contract, 

should change orders and cost overruns in the contract be much, 

much more rare as a quid pro quo? 

Secretary ENGLAND. There are fixed price contracts. Multi-years 

are fixed price contracts. So we negotiate a fixed price contract, and 

therefore every change has to go through a formal change process 

and you immediately get control of changes and contractors with 

the overrun, that is on them. 

Mr. ANDREWS. I am aware of that, but of course, the fixed price 

very often turns out to be a fictional aspiration, rather than a legal 

reality. Shouldn’t it be much more difficult to get ahead of that 

fixed price contract? If we do a multi-year, shouldn’t there be a 

much, much heavier burden on the vendor to come in and say you 

have got to go beyond the target that was originally in the contract? 

General KADISH. Can I—— 

Mr. ANDREWS. Yes. 

General KADISH. I would like to make sure I understand exactly 

what we are talking about in terms of the multi-year because I 

think what Secretary England at least what I heard was that he 

is introducing the concept for stability and maybe for programs 

that we haven’t done multi-years before. And your question is how 

do you pick these and what value would you get out of them. And 

I guess the way—one of the things that we have a problem with 

in our system today is defining programs and when they are a program. Okay? And it leads to a lot of misunderstanding. Multi-years 

are most effective and have been designed over the years for cost 

savings for programs that are in deep production. They are actually 

putting hardware out, whether it is rifles, or F–22s. 

Mr. ANDREWS. Would you start sooner in the process than that? 

General KADISH. Those have been very effective if you go back 

and look at them and C–17 and—there is a big track. Let us postulate moving multi-years sooner in the development context. If we 

had major programs that had mature technologies but we are 

pushing a mature technology and not a new technology and I will 

give you an example. We have been building airplanes for 100 

years. I would say that is my maturing technology. Now, parts of 

those airplanes are really cutting edge, but overall, airplanes are 

maturing technology. So if we had to postulate that a development 

program—I hesitate to bring it up—but for an airlift tanker, could 

be a multi-year development program if the parameters for that 

were set properly. 

On the other hand, in something like missile defense where the 

technology is disruptive, new and challenging, it would be very 
13 

hard for me as a program manager to come to you and say give 

me a multi-year and I will deliver this—— 

Mr. ANDREWS. It has gotten a lot harder in the last couple of 

week, hasn’t it? 

General KADISH. On those situations, level the budgets where 

you have the insight and the oversight to see what is going on, 

where you don’t have to—one of the difficulties we have in our system today is that the system demands in all three of those areas 

that the day you charter the program, you have to put a cost estimate down on a piece of paper, even if you are going to deliver it 

20 years from now or 15 or 10—— 

Mr. ANDREWS. I appreciate that. Admiral, do you want to jump 

in? I am going to stop so Mr. Coff—one point I want to just interject—I would ask the staff to take a look at his data. I am sure 

the GAO or someone has this. I am curious as to the percentage 

of the cost overruns identified by the GAO which I know are controversial, Mr. Secretary. But if you start from that starting point, 

the percentage of those cost overruns that flowed from multi-year 

versus non-multi-year contracts. It would be interesting to see if 

there is any significant difference. Admiral? 

Admiral GIAMBASTIANI. If I could add just a couple of points to 

what Secretary England and General Kadish have brought up. 

Number one, dealing in multi-years for programs that have mature 

technologies, stable requirements and the rest are incredibly important. An example of these would be aircraft programs. For example, when I was a resource director for the Navy back in 2000, 

we went after multi-years to procure the Super Hornet. We wanted 

to stabilize production. We had, if you will, an aircraft that was 

fairly mature in its production and we could stabilize it and move 

on. We do these things with destroyers. We do them with submarines. Areas where we have again stable requirements, we are 

not making massive changes and we can see the benefits of the 

risk reduction methods that we have used to go into them. 

Requirements for programs that General Kadish talked about, 

for example, on missile defense where you are dealing in very highleverage, high-risk, high-payoff technologies but you just don’t 

know if they are going to be successful or not, it is incredibly difficult to go after a multi-year and I am the type of person that 

would not suggest to you to do that. But if the system is ruthless 

with, if you will, low-risk technologies and the rest and you are 

ruthless in not allowing requirements to change willy-nilly and you 

produce these things, you can do upgrades in the future life of that 

platform, for example, or vehicle or whatever you are building generally so that you can put upgrades in later and later. And we have 

got just a bevy of programs like this that have been incredibly successful that have been multi-year buys. However, a multi-year by 

itself is not going to be successful if you don’t have the other integrated components with it. 

Mr. ANDREWS. Did you agree that integration is easier in a 

multi-year context, though? 

Admiral GIAMBASTIANI. It probably is, again, if you have stability 

and simplicity in those three components that you bring into the 

program. 

Mr. ANDREWS. Mr. Coffman is recognized. 
14 

Mr. COFFMAN. Thank you, Mr. Chairman. Just a question about 

changes in requirements in terms of being a cost driver. Where— 

are those primarily because of the fact that in your view, that it 

is an immature technology that is being developed or is it from the 

military side of the House that maybe there is a changing environment tactically in terms of threat scenarios on a given weapon system? So there are changes in requirements there. Where do you 

think the changes primarily come from? 

Admiral GIAMBASTIANI. There are a variety of ways to look at requirements and let me give you an example of this. I am going to 

use a real life example. Again, I will just pick the Super Hornet. 

The Navy had just come out of a very, very bad experience with 

the A–12 aircraft being cancelled. It was very unsuccessful, it was 

a high-risk venture and there were a whole variety of things on all 

of the reasons on why a program fails. Many within the Naval 

aviation and Navy communities wanted to build a more cuttingedge aircraft. But what happened is the Navy got together and 

brought forward a fighter bomber, if you will, based on some pretty 

proven technologies without over-the-top requirements. In other 

words, we didn’t double or triple the range. 

We didn’t try to do things that were just so cutting edge that it 

would be very high-risk and difficult to do. So therefore you produced a good, solid aircraft, if you will, based on solid requirements. If you try to extend yourself in very high-risk ways and in 

different technologies, you are not going to be able to produce a 

program, an aircraft, a ship or whatever you are doing in an effective way because you are working in these high-technology, highrisk areas that you simply can’t predict. That is the reason why 

you want to go after, if you will, more mature technologies for 

these long-term programs. 

You do need to do programs that push the envelope, like missile 

defense and others, but they are very different from the types that 

we are talking about that could potentially give you multi-years or 

if you will, stability. 

General KADISH. I would like to add to that and take you down 

a level because I think my experience is where we get into trouble 

with requirements is not at the deliberative level that the Admiral 

is talking about. There are sometimes we push a range, payloads 

or something like that as a peak performance priority that really 

gets in trouble. There are very few of those and they are remarkably stable because people have taken a deliberative approach. 

Where I see we get in trouble is that when we start translating 

those top level ideas or requirements into actual specifications, our 

culture is and it is very much encouraged that the people who are 

managing the program, go to the people who will use this equipment or idea and say we could do it this way or we could do it that 

way, which would you prefer? Or more likely, they start looking at 

what we are doing and they say we would rather do it this way. 

That is where you get the proliferation of changes where something 

seemingly easy to do in the first week of the design turns into a 

disaster as you try to build it. And I can’t give you a lot of examples of this because it gets in the minutiae here to make it explainable. But the process is geared to work with the future user and 

that interaction at the lower levels tend to make the problem a lot 
15 

harder, although it is necessary at the same time. I am not saying 

we shouldn’t do that, but that is where we get into trouble. 

Admiral GIAMBASTIANI. Let me just add to this because I think 

it is very important, I had a section originally in my—but it got 

into the very technical minutiae level. But let me just quickly tell 

you. Requirements are key performance parameters that the JROC 

approves and controls day to day. As General Kadish said, typically 

if we do a program right, they don’t change much and generally we 

are in pretty good shape with them unless we proliferate the rest. 

The requirements he is talking about are the next level down and 

the level below them. They are called key system attributes and 

other things below this. What happens with these requirements is 

the JROC for example, assigns responsibility to the Air Force or 

some other agency or service to control those. And I said it in my 

testimony that requirements people have to be ruthless on controlling these. And the reason why you have to be ruthless on controlling them is because everybody comes up with up great ideas and 

this is where change orders come from. They don’t always come 

from that. Sometimes there is a technical reason why you really 

have to do it to make it work. But you try to avoid all of these 

other change orders based on I have got a really good idea and I 

want to insert this because I know it will work better or we have 

been building this for a while and I really think I have a better 

way to do it. This is—we found in studies and you can get these 

from the joint staff, that a vast majority of requirements level cost 

increases actually came from this level of requirements change and 

they were done, if you will, at a much lower level, day-to-day basis 

and there is data on this and I know the joint staff, J8, can provide 

it to you. 

Secretary ENGLAND. Another perspective, though, changing requirements is not all bad. We tend to view it as bad. It is actually—my view is we don’t change them enough in a lot of respects. 

Having been on the other side of this in the industry and built a 

lot of products, F–16s and M1 tanks and every other kind of system 

imaginable. At our level it is easy to talk, at your level to talk 

about requirements up here. When you get down to the contractor 

level there is volumes and pages and great, great detail about this 

and over time they actually do have to change because it is a reality of design and production. You want them to change. Fact of 

the matter is there is great reluctance to change any of this once 

the contract is let because there is pressure on the system not to 

make those changes. 

So this is a more complex than just deciding the range. In the 

reality, I would say the system is pretty rigid, particularly going 

forward and that rigidity actually costs us money as people struggle to meet requirements that are not really germane to the ultimate utility. So it is not obviously always the case, but that is still 

a dimension. It is not all bad to change, quote, requirements as a 

program proceeds, and I would say you have to have the flexibility 

to do that or else you will have cost growth. 

Admiral GIAMBASTIANI. And this is how you do block upgrades, 

this is how you do the types of things for all those programs I cited 

in the testimony. If you do them in a sensible manner, you are 
16 

going to get a really good product that over the life cycle produces 

what this Nation needs. 

Secretary ENGLAND. Mr. Andrews is about people by the way. I 

mean, look, you can have all these—at the end of the day, it is 

somebody that understands the technology, the business. These are 

people who exercise good judgment at various steps along the way 

and you cannot replace that good judgment with systems that 

you—— 

Mr. ANDREWS. I have no doubt about that. 

Secretary ENGLAND. I used to tell the Secretary, I would take ten 

John Youngs over all the changes of the acquisition system. An extraordinarily capable person is invaluable in this system and that 

is true throughout the acquisition process. 

Mr. ANDREWS. Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Mr. ANDREWS. Thank you. Mr. Cooper is recognized. 

Mr. COOPER. Thank you, Mr. Chairman. General Kadish, you 

mentioned that even with a lifetime of experience in dealing with 

acquisition, occasionally you run across rules that you didn’t know 

about, make no apparent sense. Would you be willing to go through 

these rule books with a red magic marker and try to—pages, volumes? 

Secretary ENGLAND. It was done. There was a congressional— 

there was a study group in the early 1990s that recommended hundreds of changes, and I think some were made, but I don’t think 

many were. 

General KADISH. To answer your question, I would love to do 

that if I had the time. But what is interesting about the rule books 

is that, to me, anyway, is that the more they change, the more they 

stay the same in a lot of areas. You have got—you have got the 

5000 series regulations in the Department of Defense that are the 

bibles for this type of stuff. And then you have got the Federal Acquisition Regulations. All right? And I will tell you if you start 

reading your contract and look at the clauses that are put on contracts and how they all operate, it is really difficult to understand 

why we do some of these things. To eliminate them, I would like 

that challenge. But—— 

Mr. COOPER. I am worried about the Tower of Babel effect when 

we create a system that is so complex that nobody can understand 

it. We were just joking prior to the hearing that how many people 

actually read the weapons acquisition bill that we just passed. Nobody. 

General KADISH. I tried to. 

Admiral GIAMBASTIANI. I tried to. 

Mr. COOPER. This is an impenetrable thicket that is almost—you 

challenged us, spend a day trying to figure out the system. Nobody 

has a clue. So why don’t we try simplification, get back to basics? 

If it is people driven and if Secretary England would love to have 

ten John Youngs—have we even gone through the task of identifying—I think of them as, like, that marvelous job foreman or the 

marvelous general contractor, somebody who really knows what is 

going on and knows how to get stuff done. If we identified folks 

with those skills that we want to reward and perpetuate and grow 

more of them like that. 
17 

And then I see, like, U.S. Special Operations Command 

(SOCOM) able to exempt it itself from lots of acquisition regulations, gets the job done pretty well—maybe not with super complex 

weapon systems, but shouldn’t this be tried at least on an experimental basis with some of the services, some of the projects and 

just say maybe we don’t need any of this stuff? 

General KADISH. Well, I think that idea is very interesting because that is basically what happened to the Missile Defense Agency, it got special authorities. Properly applied and chosen, a team 

of people—and I do emphasize a team, not just one individual— 

given the proper authorities would make better decisions more rapidly than under normal circumstances. This system is so big that 

it would be hard to do that carte blanche, okay, because you are 

going to hire 30,000 new people in the process and that might fix 

some things in terms of numbers but it could create huge problems 

with more people making—in the process making decisions to be 

unstable. But choosing the organizational entity, projects, programs 

along with this multi-year idea could have great benefit if you free 

them from some of the issues. 

Secretary ENGLAND. Mr. Cooper, if I can add, though, the Department has authorities. We can use commercial acquisition rules, 

et cetera, and buy things. But you have to be really brave to do 

that because you get criticized when you do that. That is, you don’t 

have the same amount of oversight, you don’t get the same amount 

of data, you don’t get the high degree of assurance. These are all 

trade-offs and risk, right? I mean, this system, this layer exists because it gives comfort, right, that no one is going to do anything 

wrong and there is a certain degree of comfort that has been laid 

on. When you move aside and do a commercial acquisition, you no 

longer have that same degree of comfort. So I will tell you people 

in the Department, my experience is, people will shy away from 

using those authorities because you open yourself to severe, severe 

criticism and in fact programs get stopped sometimes here in the 

Congress because they don’t have the quote sufficient levels of 

oversight reporting. So this is a complex environment we operate 

in with many stakeholders and many different objectives that people are trying to achieve. And they don’t always come together in 

some coherent way. 

Mr. COOPER. But, Mr. Secretary, aren’t our services all about 

bravery? Isn’t sacrifice on the battlefield about life and death? 

Then we have folks in the puzzle palace afraid of stepping across 

a bureaucratic line in order to get the job done because they might 

be criticized? 

Secretary ENGLAND. If you are a hero in combat. You get promoted. If you are a hero in this arena, then you get demoted or you 

don’t get—— 

Mr. COOPER. Let us change the promotion system, let us change 

the incentive structure so that you can be a hero. I talked about 

identifying like you did the ten John Youngs, who are these people, 

how can we reward them? Instead of them fearing criticism, how 

can they be honored? Why don’t we create a system like that? 

Secretary ENGLAND. Fair enough, but we all have to do it together. It is not just the Pentagon. 
18 

Mr. COOPER. That is why we are having hearings to explore 

these topics. Admiral. 

Admiral GIAMBASTIANI. Mr. Cooper, let me add something that I 

have observed here over a number of years. Because of the level 

of regulations you are all asking the right question, how can we 

make this simpler. And that is the reason why you have a guy like 

General Kadish that will say that is pretty attractive if I had the 

time to do it. I would just say to you that I have learned over the 

years since Goldwater-Nichols there is a lot of good stuff that came 

out of Goldwater-Nichols, for example. But one of the things that 

came out of this is that with all of the joint requirements and, by 

the way, which I believe in deeply, with regard to the joint requirements for operational excellence, one of the things that has occurred is that there is less likelihood of senior line officers, if you 

will, across all of the services who have vast operational experience 

existing in the acquisition community, in other words moving back 

and forth. 

And this long-term problem has created a level of misunderstanding, if you will, in technical expertise. We keep telling you 

people make the difference here, experienced people make the difference. But if you can’t have somebody that has got good operational credentials and take hostages and put them in the acquisition community and have them move back and forth, it is very difficult, for example, in some cases for them to truly understand 

some of these requirements level pieces that are so important. 

Many of those really effective programs I cited before were built 

under a system where people came up and spent a significant 

amount of time in a variety of these different communities and 

their experiences really paid great benefits to the system. The 

question is how do you recreate that, how do you get people who 

can go into the acquisition side, how do you take hostages, if you 

will, and exchange them between these different communities? 

That is one of the things that some of us have spent some time trying to figure out how to do this. 

Secretary ENGLAND. If I could focus this a little bit, Mr. Chairman. I don’t believe we are going to end up redoing the acquisition 

system. This has been going on a long time. It would seem to me 

the objective and what I would recommend are one of the few 

things you know you can pass and get through the Congress that 

would have a marked improvement. How can you improve—how do 

you know you are going to improve and actually not make it worse? 

It is a complex system. You always have that problem, right? So 

what are the few things you can do and so I would just try to address a few practical things. Give people reserve because now every 

cent is accounted for, and if something changes, you don’t have the 

money to accommodate whatever you need money for and that 

costs you ten dollars for every dollar you don’t have at the front 

end, it costs you ten dollars. Make it feasible for people to have reserve. Make the reprogramming easier. I mean, the thresholds are 

way too low for the level of expenditure and the complexity of it. 

That is part of the simplicity. 

I mean, there are some things you can do to make this system 

simpler, easier to operate within, without trying to redo this whole 

system. And I would focus on three or four things that you can get 
19 

concurrence from the Department and the Congress, and I keep 

doing this incrementally. The problem you are going to have is if 

you try to make too big a change, I keep telling people it is easy 

to destroy value and it is extraordinarily hard to build value. So 

we didn’t get here just randomly. A lot of this was put into place 

for a reason. If we start to dismantle it, we better understand the 

reasons and make sure we are dismantling the right part of this 

because some parts that you don’t want to dismantle. So I would 

do this on an incremental basis. 

Every year I would work this, and every year I would get people 

to address and I would keep making incremental changes, and I 

would set my objective that way. So again, recommendation is to 

get the specific—a few things everybody agrees on and move forward rather than look at this whole thing because as you can tell 

from his testimony, you can just stay enmeshed in this detail and 

never get to the one or two few things that you can really do to 

improve the system. 

Mr. ANDREWS. Very good. 

Secretary ENGLAND. That is right. 

Mr. ANDREWS. Thank you, Mr. Cooper. 

Mr. ANDREWS. Mr. Ellsworth. 

Mr. ELLSWORTH. Thank you, Mr. Chairman. Thank you for holding this very informative hearing. Thank you, gentlemen. I have 

become a little concerned. We know there is at least 120 prior studies that go back to the Civil War. I am glad we assembled the 

group that is finally going to figure this thing out and straighten 

it out. But that is our challenge. Most of my questions were answered. I would ask one thing maybe for the discussion of how 

much plays into, and I wouldn’t want anybody to take this wrong, 

that I don’t want to give our troops everything they need to do 

their job. How much of that plays into this? 

I can remember back in my days of law enforcement when we 

would duct tape a flashlight to the barrel of our shotgun. It would 

have been nice to have a built in flashlight in our shotguns, but 

we didn’t have that. How much of it is the cause of this when 

someone in the field, someone says wouldn’t it be nice to have the 

switch on this side on the thumb instead of the index finger or if 

this were in my left hand instead of my right, or if this seat were 

a little more cushioned or how much is it that we want to do everything we can for our troops on the acquisitions that come out and 

I think it goes back to those change orders and improvements. I 

don’t have a problem with that. But does that add to the problem 

of kind of we need to give everything we can, whatever is even suggested. Is that even—I think most of my questions were answered 

about adding to and improving, but there is a play in there. There 

is wants and needs and it is a good lesson between what we want 

and what we need and sometimes you don’t always get what you 

want, but we definitely want to give you what you need. I am not 

sure the question is in there. 

Secretary ENGLAND. It is in the eye of the beholder what the 

value is. That is sort of the challenge always. There is always 

many more things you can do in the Department of Defense than 

you will ever have money for. No matter how much the budget goes 

up, there will always be needs, unmet needs. Because if you are a 
20 

military person, obviously you want the very best equipment or latest equipment, you want the switch on the right side and frankly 

they should expect that. That said, there are still limitations. There 

are boundaries you have to work within. That is the trade-off that 

you keep making. And that is an imperfect world. That is judgments by people between the military, the civilians, the Congress 

who has an oversight role. 

I mean, everybody places judgments on this, frankly at the end 

of the day, it sort of works pretty well. You know, everybody has 

an input and it tends to balance out, right, between the military, 

the civilian leadership, the Administration, the Congress, I mean, 

all of this pushing and shoving—I mean, it looks bad frankly, but 

I am not sure it doesn’t come out with best results you can get 

given all these competing interests that come to bear on this so it 

is an ugly process but I am not sure it is ever going to be a pretty 

process because that is the nature of what we do and these are all 

judgments. This isn’t a black and white. This is almost in every 

single case judgment calls by well-meaning people and people disagree a lot of times. 

Mr. ELLSWORTH. And that vendor that has to move that switch 

from the right to the left or left to right, they have to retool machines that adds to the price. Is that—you make that determination—worth it versus armoring up a Humvee while the guys in the 

field are catching shrapnel, let us do that, let us do it quick, let 

us add panels, whatever we have to do. I can see the difference 

there. But I agree with that. I think it is an imperfect world. But 

that is kind of what we have to deal with. 

Secretary ENGLAND. That is the world we are in and that is the 

world we deal with. 

Admiral GIAMBASTIANI. Let me give you a perspective from somebody who has worn a uniform and been out and used this stuff for 

a hell of a lot of my life. We have very, very thoughtful and good 

people. And as Gordon said, you are always going to have people 

making recommendations for changes. It just is the way we train 

them. We tell them we want to do our best and they expect the 

best from what they get. So the question then is how can you incorporate and bring these things to bear in a timely and useful manner so that they can use them to do whatever—and accomplish the 

mission that they have at hand. There has been a lot of discussion, 

for example, about a peacetime procurement system and what you 

do in wartime and the rest of it. Well, it makes a difference. When 

you have the urgency of impact out there, you are going to modify 

what you do on a peacetime basis. What is important today in wartime may not be as important during peacetime unfortunately or 

vice versa. So you modify processes and you modify the way you 

deliver capability. 

There is a whole variety of these joint rapid acquisition programs. You do the things that make sense to deliver capabilities 

and modify capabilities. And it is always going to happen, but we 

train our people—the culture is you want better and you are going 

to work for better, and hopefully we can provide them with the 

tools that keep them safe and allow them to effectively make their 

mission. That is pretty general. But my comment is we always 

have to have during wartime a willingness to also fail and maybe 
21 

not get it right, because if we are in a zero defect environment trying to protect these people and allow them to accomplish their mission, then we have got problems. How do you balance those and get 

that capability out there? 

General KADISH. I would add there is an element of trust that 

we have. I have been on both sides. Operating and flying airplanes 

and buying and developing things. And that trust of the soldier, 

sailor, airman in the field, that they are going to get the best from 

our country is something that is unspoken but part of our culture. 

And I will just give you an example from my own life. 

I will never forget when I was in pilot training I had an old combat instructor that was teaching me that day and I had been very 

clever that morning and went out and bought a flashlight because—a small one that I thought was kind of neat because we 

were going to practice dark cockpit type stuff. And we were walking to the airplane and I discarded my big flashlight that was the 

traditional issued type of thing. And he said what are you doing? 

I said I got this new flashlight. He said you trust that at 30,000 

feet. It works great on the ground. I will take my Government 

Issued (GI). And that made an impression on me because if we are 

going to put people in harm’s way, yes, we have resource issues, 

we make those trade-offs every day. But that trust, we are going 

to give them the best we know how to give them has got to be 

there. 

Mr. ELLSWORTH. Thank you, Mr. Chairman. I yield back. 

Mr. ANDREWS. Thank you, do any of the members have any follow-up they would like to engage in at this time? Yes, Mr. Cooper. 

Mr. COOPER. Secretary England impressed me with his rousing 

defense of the status quo. And I don’t want to be a hopeless idealist, but I also don’t want to give up on making the system better 

either. And surely there is some compromise between the two and 

I realize there are plenty of obstacles, but surely with your long 

tenure both in the private industry and as Secretary, there are specific recommendations you can give us that are deeper than more— 

a politician would call it a slush fund—wiggle room, an extra $57 

billion, here, there, whatever the amount is to get the job done, 

smooth wrinkles. This is the most massive bureaucracy probably in 

human history, it is the least auditable of all government agencies, 

perhaps it has the toughest job. But we are, you know, the most 

important military force in the world. And it is so important for 

every troop and for every citizen that we get this really right. So 

to me, after your long experience, kind of waiting for more and 

deeper advice. 

Secretary ENGLAND. What I recommend, Mr. Cooper, I don’t recommend the status quo. Everything can always be improved. The 

Nation is at war. We are buying equipment. We are meeting 

warfighter’s needs. I only recommend that you do this incrementally because you don’t want to do something that is also going to 

make it harder or harmful. So if they are in complex system, I tend 

to go much more deliberate and so I would take—I would decide 

what are those things that you can identify and I would work with 

the Department on this, the current Administration. I say what are 

those things that we can make changes to that would immediately 

improve your operation and I believe there are some things you can 
22 

do that would be embraced by everyone that would actually have 

a meaningful effect on this. I mean, this is small things like reserves, small things like reprogramming are very, very large. The 

multi-year is very important. I think if you can—the National Security Personnel System (NSPS) provides a whole personnel system. It is important. It is hard to get people in the acquisition 

arena, particularly civilians. We make it very onerous. So if you 

can attack some of these issues that are identified issues within 

the Department, you will move the ball forward and you can do 

that quickly. I mean, you can do that, in effect, what they are doing 

in the coming budget as opposed to over a long budget. So I am 

just suggesting take a deliberate approach on this, accomplish what 

you can accomplish and don’t get mired down in this whole system 

because this whole system has been built up literally over at least 

50 years. 

Mr. COOPER. George Will had a famous column at one time in 

which he quoted Mr. Hilton of Hilton Hotels who, when asked, I 

think at a graduation speech, what his advice would be to future 

generations. He summed it up succinctly and he said please put the 

shower curtain inside the tub. 

Mr. ANDREWS. Is this the person that raised Paris Hilton? 

Mr. COOPER. Thank you, Mr. Chairman. 

Mr. ANDREWS. Bizarre note. I did have—I meant my comment, 

not yours. I did have one quick question if I could just ask the 

panel. The Center for Strategic and International Studies (CSIS) 

did a report and they made a recommendation which I am going 

to read from. I just briefly want to ask the three of you what you 

think of the recommendation. And frankly, you can supplement 

your answer in writing if you would like. CSIS recommends that 

we modify title 10 to require that all JROC memoranda signed by 

either the chairman or vice chair of the joint chiefs, the Joint Requirement Oversight Council Memorandums (JROCMs), be provided to the Deputy Secretary of Defense for his review. The Deputy Secretary could then issue any JROCMs he approves as binding guidance to DOD components. What do you think of that? Is 

that something we should do by statute or not? 

Secretary ENGLAND. My question to title 10, do you give title 10 

authority to the vice chairman? 

Mr. ANDREWS. No. Let me read it again. To the Deputy Secretary. In other words, the Vice Chair and the Chair would pass 

these draft memo up to the Deputy Secretary. He would then or 

she would then have the authority to give them binding or not to 

give them binding effect or modify. So what it would do would be 

to institutionalize a role for the Deputy Secretary that binds the 

services. 

Secretary ENGLAND. My first reaction would be—that is a responsibility of Acquisition, Technology and Logistics (AT&L), the Deputy would just literally go to the AT&L responsible person because 

they have all of the everyday work in the acquisition arena, they 

have the authority for acquisition. I mean, my view being the Deputy, I would, at that point, have gone to John Young or Ken Krieg 

and got their view on that because they are dealing with that every 

day. Not the Deputy. The Deputy does this, you know, sort of on 

an as needed as required basis, not—I wouldn’t put the Deputy in 
23 

that role frankly. I would put the AT&L. And I haven’t thought 

about what all the implications of that are. 

Mr. ANDREWS. I would like you to think about that if you could 

and then supplement your answer to the record if you have time. 

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

page 225.] 

Mr. ANDREWS. Admiral, what do you think? 

Admiral GIAMBASTIANI. I would tell you that I think the Deputy 

is the wrong person in that case. But I do think the Under Secretary for Acquisition, Technology and Logistics is the right person 

to be doing this. Now, recognizing you could make this a legislative 

piece clearly that would be a big deal because you were including 

a civilian in this military requirements discussion, but it is one 

way to help integrate, if you will, the system. 

Now, what I would suggest to you is that I didn’t make him the 

co-chair, but I invited AT&L to every session of the requirements, 

JROC pieces that I did for two years, and in fact, AT&L attended 

everything. Ken Krieg personally as the Under Secretary did not, 

but he always had a senior representative there, and in fact, they 

did a lot of preparation—— 

Mr. ANDREWS. The question is the difference between attendance 

and authority. 

Admiral GIAMBASTIANI. Correct. So what you have to think about 

is if you are going to make the vice chairman, for example, the cochair of the Defense Acquisition Board, then would it be reasonable 

to make the Under Secretary the co-chairman of the JROC? And 

I don’t think that is bad. If you go back to the Packard commission, 

one of the things they talked about was—I think it was called a 

Joint Requirements and Management Board (JRMB). It was a joint 

requirements material board or something that compromised mainly of military but also brought some civilian expertise on the acquisition side into it. I personally don’t think it is a bad idea at all. 

Mr. ANDREWS. General, what do you think? 

General KADISH. Mr. Chairman, I, in fact, talked about it to 

CSIS. I think if I am not mistaken and read it right, this is a reflection of the fact that the only time those three processes come 

together in the Department is at the Deputy Secretary. 

Mr. ANDREWS. I think that is right, yeah. 

General KADISH. And because budget decision is really resident 

there primarily because that is the one that usually is the outlier 

in these decisions. So making it statutory might be a good idea, but 

it could also be very problematic because fundamentally, the Deputy Secretary and I hesitate to speak for Secretary England here, 

because I never was one of those, but it is a huge job to do these 

types of things. But the processes are designed today to come together at that level. 

Mr. ANDREWS. Yeah. I mean, I asked the question as an agnostic. 

I read segments in the report and wondered what you thought. The 

attraction of the idea is as the General says it is the venue where 

these processes come together. And investing the person who sits 

at that venue with some enforcement authority has some attraction. On the other hand, it does speak to the caution that all three 

of you have given us from significant experience which adding new 

process may exacerbate the problem it may not solve it. So upon 
24 

further reflection, I would like you to think about whether you 

think vesting some person with that kind of authority coming off 

the JROC process makes sense. And if so, whom would that person 

be? 

Admiral GIAMBASTIANI. I can tell you, most military personnel 

probably would not like that. 

Mr. ANDREWS. Is that an argument for doing it or against it? 

Admiral GIAMBASTIANI. I am trying to tell you, you have to integrate this. But, with all due respect to my Deputy Secretary former 

shipmate here, I think the person who really is vested in where all 

three of these come through, despite what Ron has said to you, is 

the Secretary of Defense. Because you have service secretaries and 

service chiefs in there and that is where the ultimate authority for 

all three of these are supposed to come together, and when you 

move it to a different level, you change the overall dynamic here 

in a way sometimes that is not good. 

Mr. ANDREWS. You may actually deemphasize the importance of 

it? 

Admiral GIAMBASTIANI. Correct. So some that, though, is very 

important. 

Mr. ANDREWS. My question is whether a person should be vested 

with the authority. And your position is maybe it should be the 

SECDEF. 

Admiral GIAMBASTIANI. The SECDEF is not going to go to every 

JROC meeting because he sure doesn’t have time for that. But the 

point is, how do you get that done so he gets advice properly? 

Secretary ENGLAND. Chairman Andrews, your original comment 

about people and personalities. A lot of this is who makes these decisions at any given time, frankly, because it varies dramatically in 

terms of background and experience and capabilities. So when you 

say—— 

Mr. ANDREWS. The Constitution would probably prohibit us from 

mandating a certain person. 

Secretary ENGLAND. I would say what worked out well with what 

Admiral Giambastiani said is that John Young is the perfect person to do that. So, for all practical purposes, you sort of achieved 

that when they were together in the offices, because you want to 

get the requirements right. They were both quite capable, the same 

reason I brought Ed in on the DAWG. So personality goes a long 

way on this. 

Mr. ANDREWS. I hear you. One of the recurring things in our 

work, and we will wrap up with this, we think it is self-evident 

that the talent of the individuals in these positions and the nature 

of those individuals is central to any result. But what we can do 

in the law and procedure is create a series of incentives and disincentives that hopefully incent the more desirable behavior and 

disincent the less desirable behavior. And what we are trying to 

fumble through is to figure out in this instance. 

So I think in closing is if the hypothesis this morning is that the 

gap between value and cost paid is in part attributable to a lack 

of coordination among the requirement and procurement and budgeting process, I think the answer is, sure is, there is a significant 

problem. What we are trying to do is figure out a way to create the 

right set of incentives that would cause integration, the right set 
25 

of disincentives that would mitigate against disintegration, but do 

so hopefully by going to Mr. Cooper’s question, by taking things out 

of rule books rather than putting them in, and by creating fewer 

levels of oversight, more transparency, not more levels of oversight 

and less transparency. That is a tall order, but I think that summarizes what we are about. 

Each of you has made a very significant contribution in that effort this morning. We appreciate that. It is entirely consistent with 

your lifelong contributions to our country in this and other areas, 

for which we are very grateful, and we thank you very much for 

your participation. The hearing is adjourned. 

[Whereupon, at 9:33 a.m., the panel was adjourned.] 

A P P E N D I X 

JUNE 3, 2009 

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JUNE 3, 2009 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

JUNE 3, 2009 

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RESPONSE TO QUESTION SUBMITTED BY MR. ANDREWS 

Mr. ENGLAND. The current system provides a series of checks and balances, allowing appropriate military advice to be provided to the civilian leadership while allowing the civilian leadership to define strategy and allocate resources consistent with 

the President’s policy and budget priorities. There is a large staff which supports 

the JROC in the requirements review and approval process. The Office of the Deputy Secretary of Defense is not staffed for comprehensive review of the JROC requirements. Further, the Deputy Secretary already must address a broad spectrum 

of issues, and this additional workload would be very difficult to manage within the 

Office of the Deputy Secretary of Defense. As importantly, the current system established by the Congress through Goldwater Nichols legislation provides checks and 

balances in the systems while also allowing for independent military advice to be 

provided to the Nation’s civilian leadership. It may not be appropriate for the Deputy Secretary of Defense to approve or disapprove individual requirements sequentially. The Deputy Secretary of Defense already indirectly provides a role in this 

process by balancing the JROC requirements against the President’s policy and 

strategy objectives, making these decisions in the context of the President’s budget 

process. It is not clear that the process would be improved by requiring the Deputy 

Secretary to personally approve JROC memoranda. [See page 23.] 

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