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38–835 2008

[H.A.S.C. No. 110–63]

STRUCTURE, PROCESS AND TOOLS FOR

IMPROVING DEPARTMENT OF DEFENSE

MANAGEMENT

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

HEARING HELD

JUNE 26, 2007

(II)

HOUSE COMMITTEE ON ARMED SERVICES

ONE HUNDRED TENTH CONGRESS

IKE SKELTON, Missouri, Chairman

JOHN SPRATT, South Carolina

SOLOMON P. ORTIZ, Texas

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

RICK LARSEN, Washington

JIM COOPER, Tennessee

JIM MARSHALL, Georgia

MADELEINE Z. BORDALLO, Guam

MARK UDALL, Colorado

DAN BOREN, Oklahoma

BRAD ELLSWORTH, Indiana

NANCY BOYDA, Kansas

PATRICK MURPHY, Pennsylvania

HANK JOHNSON, Georgia

CAROL SHEA-PORTER, New Hampshire

JOE COURTNEY, Connecticut

DAVID LOEBSACK, Iowa

KIRSTEN GILLIBRAND, New York

JOE SESTAK, Pennsylvania

GABRIELLE GIFFORDS, Arizona

ELIJAH E. CUMMINGS, Maryland

KENDRICK B. MEEK, Florida

KATHY CASTOR, Florida

DUNCAN HUNTER, California

JIM SAXTON, New Jersey

JOHN M. MCHUGH, New York

TERRY EVERETT, Alabama

ROSCOE G. BARTLETT, Maryland

HOWARD P. ‘‘BUCK’’ MCKEON, California

MAC THORNBERRY, Texas

WALTER B. JONES, North Carolina

ROBIN HAYES, North Carolina

KEN CALVERT, California

JO ANN DAVIS, Virginia

W. TODD AKIN, Missouri

J. RANDY FORBES, Virginia

JEFF MILLER, Florida

JOE WILSON, South Carolina

FRANK A. LOBIONDO, New Jersey

TOM COLE, Oklahoma

ROB BISHOP, Utah

MICHAEL TURNER, Ohio

JOHN KLINE, Minnesota

CANDICE S. MILLER, Michigan

PHIL GINGREY, Georgia

MIKE ROGERS, Alabama

TRENT FRANKS, Arizona

THELMA DRAKE, Virginia

CATHY MCMORRIS RODGERS, Washington

MICHAEL CONAWAY, Texas

GEOFF DAVIS, Kentucky

ERIN C. CONATON, Staff Director

ANDREW HUNTER, Professional Staff Member

JENNESS SIMLER, Professional Staff Member

MARGEE MECKSTROTH, Staff Assistant

(III)

C O N T E N T S

CHRONOLOGICAL LIST OF HEARINGS

2007

Page

HEARING:

Tuesday, June 26, 2007, Structure, Process and Tools for Improving Department of Defense Management ............................................................................. 1

APPENDIX:

Tuesday, June 26, 2007 ........................................................................................... 39

TUESDAY, JUNE 26, 2007

STRUCTURE, PROCESS AND TOOLS FOR IMPROVING DEPARTMENT

OF DEFENSE MANAGEMENT

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Hunter, Hon. Duncan, a Representative from California, Ranking Member,

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

Skelton, Hon. Ike, a Representative from Missouri, Chairman, Committee

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

WITNESSES

Brinkley, Paul, The Deputy Under Secretary of Defense for Business Transformation ............................................................................................................... 5

England, Hon. Gordon R., Deputy Secretary of Defense ...................................... 5

Patterson, David, The Principal Deputy Under Secretary of Defense ................ 4

APPENDIX

PREPARED STATEMENTS:

England, Hon. Gordon ...................................................................................... 43

DOCUMENTS SUBMITTED FOR THE RECORD:

General and Flag Officer Provisions in Law Under Title 10, United States

Code, submitted by Secretary England ....................................................... 51

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:

Mr. Cooper ........................................................................................................ 88

Mr. Hunter ........................................................................................................ 87

Mr. Kline ........................................................................................................... 88

Mr. Skelton ....................................................................................................... 87

(1)

STRUCTURE, PROCESS AND TOOLS FOR IMPROVING

DEPARTMENT OF DEFENSE MANAGEMENT

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, Washington, DC, Tuesday, June 26, 2007.

The committee met, pursuant to call, at 10:07 a.m., in room

2118, Rayburn House Office Building, Hon. Ike Skelton (chairman

of the committee) presiding.

OPENING STATEMENT OF HON. IKE SKELTON, A REPRESENTATIVE FROM MISSOURI, CHAIRMAN, COMMITTEE ON ARMED

SERVICES

The CHAIRMAN. Ladies and gentlemen, today’s hearing is focused

on improving the management of the Department of Defense

(DOD).

And we have with us today the Deputy Secretary of Defense,

Gordon England, a seasoned executive, one of the most capable

managers serving in government. We appreciate him being with us.

Also David Patterson, the Principal Deputy Under Secretary of Defense; Paul Brinkley, the Deputy Under Secretary of Defense for

Business Transformation.

These gentlemen will outline the management challenges confronting the Department and tell us how they are addressing them.

The Department of Defense has acknowledged that it has significant management challenges, including managing people and business systems at over 3,000 locations worldwide, managing $1.4 trillion in assets and $2 trillion in liabilities, managing annual operating costs in excess of $700 billion.

For example, in 2006, the Department had information sufficient

to obtain either a clean or qualified audit opinion on only 21 percent of its assets and 77 percent of its liabilities. This results partly

from the fact that the Department still has over 770 legacy business systems in service, few of which are capable of sharing information with each other.

The Department has some high-profile programs to correct these

management problems. However, these programs themselves have

experienced some challenges.

In 2005, the Government Accountability Office (GAO) designated

the Department’s approach to business transformation as high risk.

GAO has previously designated the Department’s business systems

modernization and financial management modernization as high

risk in 1995.

These programs are extremely complex undertakings involving

literally thousands of moving parts. Their success depends on careVerDate 22-MAR-2001 08:36 Nov 21, 2008 Jkt 038835 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\110-63\177000.000 HNS1 PsN: HNS1
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ful management. And yet GAO has also identified significant management weaknesses which have impeded the Department.

Congress has worked to spur change in the Department’s business processes. The Fiscal Year 2005 Defense Authorization Act

mandated the creation of the Defense Business Systems Management Committee to oversee the business functions.

The Fiscal Year 2006 Defense Authorization Act required the

Secretary of Defense to conduct a study of whether to establish a

chief management officer for that Department. The study was performed by the Institute for Defense Analysis, which is called the

IDA, and was delivered to Congress in December of last year.

The House and Senate passed defense authorization bills that

take different approaches to implementing the IDA report’s recommendations.

The House bill would provide significant flexibility to the Secretary of Defense in structuring his management team. However,

it would hold the Department accountable for meeting essential

management goals. These goals would include modernizing and integrating the Department’s business systems to better support the

warfighter, preparing the Department’s books to pass an independent financial audit.

The Senate bill is more prescriptive in assigning specific management roles to certain individuals at the Department.

Hopefully, we will leave here today better prepared to finalize

our legislative work with the Senate on this topic when the time

comes for conference.

And, Mr. Secretary, we look forward to hearing from you, as well

as your colleagues, Mr. Patterson, Mr. Brinkley.

And now I call my friend, my colleague, my friend from California, Mr. Hunter.

STATEMENT OF HON. DUNCAN HUNTER, A REPRESENTATIVE

FROM CALIFORNIA, RANKING MEMBER, COMMITTEE ON

ARMED SERVICES

Mr. HUNTER. Thank you, Mr. Chairman.

And to our guests, thanks for being with us today.

And thanks to the chairman for holding this hearing. I note the

importance of today’s topic.

The structure, processes, and tools for improving DOD management is sometimes overlooked. National security experts, members

of the media, and government officials often focus on other important, more pressing issues, such as the ongoing operations in Iraq,

Afghanistan, and elsewhere.

And yet these current topics are indeed critical. And in fact they

oftentimes relate to our capability in the warfighting theaters. And

they obviously deserve our attention.

American success in military endeavors over time depends in

large part on the long-term health of the DOD. So in holding this

hearing, we are exploring the business-related plans, as articulated

by senior Defense officials for that organization’s transformation investments and future health.

Recently, a Department of Defense official noted that the Department’s budget for Fiscal Year 2007, including the supplemental, is

more than $700 billion.

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The Department holds $1.4 trillion in assets and $2 trillion in liabilities. And both of these figures are more than the assets and

liabilities of Wal-Mart, IBM, and Exxon combined.

It has over 3 million employees, operates more than 4,000 information technology systems, and has over 3,000 locations worldwide. When people refer to corporate DOD, there can be little doubt

that this Department is, in so many ways, like a corporation, with

the American people as its shareholders.

As a result of its size and scope of responsibilities, the DOD faces

unique management challenges. Congress has recognized this fact,

has often pushed the Department to improve its management, and

has even imposed management-related requirements on the Department.

For example, the Fiscal Year 2005 National Defense Authorization Act mandated the creation of a Defense Business Systems

Management Committee to coordinate DOD business initiatives,

update the business enterprise architecture, and help with integration of transformation efforts.

More recently, in the Fiscal Year 2006 National Defense Authorization Act, Congress required a study on whether the Department

should have a Deputy Secretary of Defense for management. The

Institute for Defense Analysis released its study last December,

and the GAO has also made recommendations on this topic. In fact,

both the House-passed and Senate Armed Services Committee versions of the Fiscal Year 2008 Defense Authorization Bill contain

language that reflected some recommendations from IDA and GAO.

The House version, for example, directed the Secretary of Defense (SECDEF) to designate a senior DOD official with management duties, establish essential management goals, and adopt a

management structure that defines roles, processes, and accountability to achieve those goals.

This language provides the management flexibility that is necessary for such a large corporation while forcing Defense officials

to develop and clearly articulate to Congress the key management

goals that will help the long-term health of the department.

Secretary England, Mr. Patterson, and Mr. Brinkley, again,

thanks for coming today to talk about this important topic. And I

look forward to hearing how the current and planned corporate Department of Defense can provide our warfighters with the best

training, equipment, and other support needed to accomplish the

missions required of them.

And I would also like to hear and understand your thoughts on

the IDA and GAO recommendations, as well as your positions on

the House and Senate language. Clearly, Congress would like to

help the Department in this area, so let us know how we can do

that.

And, Mr. Chairman, thanks for holding this hearing.

I might just conclude on this note. There are stories in the media

this morning about the Iraqi army, statements made by American

trainers that the Iraqi army is not yet equipped to the degree that

it should be to be able to undertake a handoff of military responsibilities in important parts of Iraq, to take this handoff of the security burden from American forces to Iraqi forces.

4

And it is interesting, the equipment that is discussed is not technical stuff. It is trucks, it is some armor, some carriage capability,

ammunition, rifles, basic communications gear.

And I would like your comments, too—and, gentlemen, you all

have provided great service to our country, and we appreciate

that—like your thoughts about how we can effect quickly a handoff

or a supply of basic military equipment that will allow the Iraqi

forces to at least have the equipment that they need to take a basic

handoff in the warfighting areas, the contentious zones in Iraq.

That seems to me to be a pretty basic thing.

And looking at the fact that we have—for example, the Marines

have had for a long time a very large contingent of Marine Armor

Kit (MAK)-kitted Humvees, and they now have replaced those with

114s. And, at least in one location, they had 1,800 MAK-kitted

Humvees parked, the fact that they had a lot of five-ton trucks that

were superseded by the new acquisition of seven-ton vehicles.

The idea that we can’t effect a handoff of basic military equipment to the Iraqi military and that that might be the long pole in

the tent of transferring the security burden I think is troublesome.

So if you could speak to that, that would be great.

So once again, Secretary England, thank you for your many

years of great service to our country and your support for this committee and all the good things you have done for our country.

And, Mr. Brinkley and Mr. Patterson as well, welcome. I look forward to your comments.

The CHAIRMAN. Thank the gentleman.

Secretary England, as I understand it, you have opening remarks. And as I also understand, the other two gentlemen, Mr.

Patterson and Mr. Brinkley, are here to support or answer questions. Is that correct?

Mr. ENGLAND. That is correct.

The CHAIRMAN. Mr. Patterson and Mr. Brinkley, would you in 25

words or less tell us about yourself before we call on Secretary

England?

Mr. Patterson.

STATEMENT OF DAVID PATTERSON, THE PRINCIPAL DEPUTY

UNDER SECRETARY OF DEFENSE

Mr. PATTERSON. Thank you.

The CHAIRMAN. And what you do.

Mr. PATTERSON. I am the Principal Deputy Under Secretary of

Defense for the Comptroller Shop. And the Office of the Under Secretary of Defense for Comptroller has the responsibility to organize

and establish and present the Department’s budget to the Congress, as well as maintain—I am sorry?

Is it better now?

The CHAIRMAN. Good. Thank you.

Mr. PATTERSON. Well, we are the part that doesn’t get necessarily the first of the technology, so you will have to excuse me

for not being familiar with a button. [Laughter.]

But as I was saying, we are responsible for providing the Congress with the budget and all the justification material that goes

with it as it is provided to us by the components.

5

Additionally, and more importantly in the long run, I would say

that we are responsible for the processes and the systems that

present a healthy financial management circumstance for the taxpayer of this country.

The CHAIRMAN. Thank you so much.

Mr. Brinkley.

STATEMENT OF PAUL BRINKLEY, THE DEPUTY UNDER

SECRETARY OF DEFENSE FOR BUSINESS TRANSFORMATION

Mr. BRINKLEY. Yes, thank you. I serve as the Deputy Under Secretary of Defense for Business Transformation.

This office was created under the leadership of Mr. England in

2005 to address many of the shortcomings that you mentioned in

your opening testimony, sir, regarding our ability to integrate and

modernize the business processes and systems of the Department

of Defense.

We have also established—since the Office of Business Transformation was created within OSD, we have established the Business Transformation Agency, a focused group of career professionals augmented by industry expertise that is overseen by my office.

And we also direct a task force working in Iraq to address business issues and shortcomings that affect our forces in theater and,

as a supplemental element of that, working to bring industrial leverage to help the economic revitalization of Iraq in support of the

mission.

So thank you for the opportunity to speak here today.

The CHAIRMAN. Thank you.

And now, Secretary England, we appreciate your being with us,

and we look forward to hearing your comments, please.

STATEMENT OF HON. GORDON R. ENGLAND, DEPUTY

SECRETARY OF DEFENSE

Secretary ENGLAND. So, Mr. Chairman, thank you. Mr. Hunter

and members of the committee, thanks for the opportunity to be

here today.

I actually don’t have this long opening statement. I thought I

would, frankly, just make a couple of comments and then address

your questions. I did provide a written statement which tried to

provide my views on this subject. And hopefully that was of some

help to the committee in advance.

I also thank you for your willingness to help. Obviously, improving the efficiency and the effectiveness of the department is something we are all interested in. And myself and Paul and Dave and

all the people in DOD work at that every single day. And we also

appreciate the willingness of the Congress to help.

Regarding the two bills, I guess the one question is which of the

two bills do we prefer. I mean, we obviously prefer the House bill

over the Senate bill because the House bill provides a lot more

flexibility for the Department.

That said, I don’t believe, frankly, either bill is actually needed

in the Department. The Department already has a lot of structure.

If anything, we have too much structure, and we have a lot of rules

and regulations that we go by.

6

One of my initiatives when I came to this job, because I felt that

we just had such a burden of rules, regulations, et cetera, that we

started to reduce our own internal directives. So we have been

working very hard to reduce our own directives and trying to

shrink the bureaucracy as much as possible.

As you commented, both Mr. Chairman and Mr. Hunter, this is

an extraordinarily complex enterprise. We have 44 major operating

commands. And if you look at just the Army itself, by the way, the

Army has 7 combat training areas, 11 depots, 14 institutes, 19 laboratories and 93 medical centers in addition to all of their 12 major

commands, 11 direct reporting commands.

So this is a huge enterprise. It is in 146 countries around the

world. And we have 600,000 facilities, literally, around the country

and around the world.

Now it may be counterintuitive, but with that kind of enterprise,

at least my judgment, my experience is, that you want to decentralize this operation as much as you can with the appropriate measures and metrics, that you know the health of the organization.

So I am of a mind, when it comes to management, that less is

better. That is, have the authority and responsibility, but move it

down as far in the organization as you can, hold people accountable, and we provide the top level direction and the oversight.

So there is a philosophy here in terms of how the Department

should be managed.

Another comment I will make is that everyone is always looking

to ‘‘change the organization.’’ The organization is not nearly as important as the leadership and the people who populate that organization, so, frankly, my emphasis is getting the right people. The

right people can withstand any organization, but not vice versa.

So this is really about people in both our military and our civilian, which is most important to us. We do need to be effective. At

the end of the day, what we do in the Department of Defense affects the welfare of our nation, and so effectiveness is important.

And that is, by the way, the way you achieve efficiency.

But we work at this every day. I believe there are fundamental

questions about what the structure should be. But I will tell you,

I am very hesitant to make significant changes without a really

good pilot and understand the outcomes because my own experience is: It is very easy to destroy value and extraordinarily hard

to create value. So I will tell you, I am very careful as we proceed.

The other comment I will make is that the structure is not nearly as important as how you tie the structure together. So what I

call horizontal integrating elements, and why we have DBSMC and

the business transformation agency and why we have things like

what I call the DAWG, the Deputies Advisory Working Group.

We have put structure in place so that we get horizontal interconnects and so we get better awareness and understanding

throughout the organization. And in my judgment, those approaches are far more valuable than anything we do with structure

itself as to how we go integrate across the large structure that we

already have. Look, that is the approach we have been on.

I do want to, though, end at my last comment. This is about

great people. And we are absolutely blessed as a nation. We have

these wonderful, magnificent people who wear the uniform of our

7

country and then we have these great Americans, civilians. And, if

it wasn’t for their work, we couldn’t have our people at their frontline doing the job they do. So we are blessed to have great people.

And that is really where we place our emphasis, providing an environment for every one of those people to excel every day for their

nation.

So, look, we would be happy, Mr. Chairman, Mr. Hunter and

members, obviously, to discuss any aspect of this that you would

like to talk about today, but I am anxious, so you know, I am not

anxious to bring about change.

I would much rather have a high degree of flexibility in the Department for both the Secretary and the Deputy to have an adaptable organization rather than one that is structured at any given

point in time. So an adaptable, flexible organization, in my judgment, is hugely valuable for the country.

And that would be all I have to say today, sir.

[The prepared statement of Secretary England can be found in

the Appendix on page 43.]

The CHAIRMAN. Thank you so much.

In my opening comments, I made reference to the fact that it is

difficult to obtain audits in a good number of the sectors of your

Department, so there is a gnawing question, Mr. Secretary: Why

are so many elements of the Department, including the various

services, that are unable to obtain clear audits for the record?

Secretary ENGLAND. Well, we are making progress, and I asked

Mr. Patterson to do this more directly. But last year, I believe we

had five or six of our components with clean audits, and we have

a full-time team working on the audits. As you commented, I mean,

we have enormous assets and liabilities, and so getting a clean

audit has been difficult.

But we have been working at it. I will let David talk in a little

more detail about the clean audit process.

By the way, we conduct, in the Department, like, 36,000 audits

a year. So we do a lot of auditing. But of course, a clean audit, that

is at the macro level of both assets and liability.

So, David?

Mr. PATTERSON. Mr. Chairman, I think that that is really an important question because it is a question that a lot of folks ask.

And I think that one of the things it is good to understand is

that, for the past 60 years, we have used an audit approach that

is based on the appropriations. And so we have accounted for all

of the money that has been provided to the Department of Defense

by appropriations, and then how it has been spent in that way.

Starting in 2001, on the other hand, we have chosen to take on

a much more conventional approach that you would find in the

general accounting—accepted accounting principles, in that we are

looking at the money that is being spent at the lowest level, and

then working upward.

I would point out that we have, in fact, had clean audits on 7

of our entities. And as you so rightly pointed out, 15 percent of our

assets, about $215 billion, approximately, 49 percent of our liabilities, which amounts to $267 billion—but the important point of

that is the progress that we have made in the last 5 years is in

evidence by the fact that those seven entities represent an accumuVerDate 22-MAR-2001 08:36 Nov 21, 2008 Jkt 038835 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCS\110-63\177000.000 HNS1 PsN: HNS1
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lated value in liabilities and assets that exceeds the amount of the

liabilities and assets of the next government agency, which is

Health and Human Services (HHS), which has gotten a clean opinion.

So we are really plotting new territory here. We have got a good

plan, we believe, in the financial improvement audit and audit

readiness plan. It has been talked about by the GAO in positive

terms. And we believe that we are on the road to a clean audit.

And I think that is important because it is the way that people

judge our financial management.

The CHAIRMAN. Thank you.

Mr. Hunter.

Mr. HUNTER. Thank you.

Mr. Chairman, let me go quickly to this issue that I think is important to our country right now. It is a little bit off-subject but a

little bit on-subject too. And that is simply being able to move

quickly to supply the warfighter.

And again, I go back to the statements of the moment that are

percolating out in the media, to the effect that America’s military

leadership in Iraq is saying, in so many words, that the Iraqi army

doesn’t have, at this point, the basics; that is trucks, transport,

enough ammunition, small arms, et cetera. Which seems to be pretty simple stuff, pretty basic stuff.

And against the backdrop of the transition that has been made

by American forces in theater, and for example, the fact that the

Marines, again, had parked at one time over the last several

months some 1,800 MAK-kitted, that is armor-kitted Humvees, at

one location, and that they had made a switch or a transition from

five-ton to seven-ton trucks, which should, in theory, free up tons

of five-ton trucks.

The idea that we can’t satisfy the requirements of this freshly

minted Iraqi military with some of the handoffs from the American

forces is troubling.

And so, I guess my question would be, Mr. Secretary, do we have

a system for doing some real basic things? Number one,

ascertaining what we have over there? What is available? Are there

some trucks that are parked in Kuwait or in Iraq that could be

transferred over?

Number two, what is the present bureaucratic circuit for getting

that done? Does that have to be ID’ed by the acquisition bureaucracy back here in the States and then implemented, a transfer has

to be made pursuant to a foreign arms sale?

Can a leader, for example, a divisional leader or General Odierno

or General Petraeus say, ‘‘Hey, we have got this stuff parked over

there. You guys in our Iraqi counterparts over here need them. Go

get it?’’ Or is it a fairly complex circuit that has to be followed to

be able to make that handoff of equipment?

Because that appears to me to be something that is crucial right

now to warfighting success in those two theaters. And I would say

one indicia of an effective system is one that can move quickly to

do what you have to do in the warfighting theaters.

So what do you think? Is this something that can be handled easily or is it pretty complex and pretty burdensome?

9

Secretary ENGLAND. Mr. Hunter, I would like to help you here,

but, frankly, I just don’t know the answer to those questions. That

is really handled in Central Command (CENTCOM), it is handled

in-theater.

I do know that Congress provided funding for both training and

equipping. I mean, that has been in the supplemental here the last

couple supplementals. But, frankly, I just don’t know the status. I

don’t believe it is a complex process.

You are right, we have been upgrading vehicles now for literally

four or five years and replacing vehicles, so you would tend to

think there are vehicles available. But, frankly, I just don’t know

that, sir. So it would be just supposition, and I just can’t provide

detail for you.

Mr. HUNTER. Could you maybe take that for the record, Mr. Secretary, and——

Secretary ENGLAND. Definitely will. And we will try to get an answer to you today yet, Mr. Hunter, so we will have someone work

that for you quickly. And, again, my apologies. I just don’t know

that system in-theater.

[The information referred to can be found in the Appendix beginning on page 87.]

Mr. HUNTER. Appreciate that.

And the last thing is, you know, we put together this law that

enables SECDEF to sign his name one time and waive every acquisition reg on the book to get something to the warfighting theater

if we are taking causalities, which we certainly are in Iraq and Afghanistan.

That has only been used, I believe, twice. I think we used it for

the little jammer a couple of years ago. We got 10,000 jammers

from Research and Development (R&D) into the field in 70 days

using that. And I think it was used one other time on the so-called

crew-type jammer. But it hasn’t been used since then.

Are you up to speed on it?

I guess my question, Gordon, would be this, because we rely on

you so heavily and you have done such a great job for DOD. Are

you satisfied that we are getting equipment into the field as quickly as we need to move it? And do you think we need to use that

what I would call the rapid-equipping waiver? Do you think we are

using it enough?

Secretary ENGLAND. Mr. Hunter, we know it is available. We use

it whenever we need it.

I mean, frankly, most of our lead time is not in the acquisition;

it is literally in the build and the fielding and the equipping and

the designing. So our new MRAP equipment, by the way—I mean,

we are doing that as quick as industry can possibly build those new

vehicles for us.

So I would tell you there is a great sense of urgency. Every time

there is a need identified in the field or any time we can perceive

a need in advance, I mean, we crash those programs as quickly as

we can.

My view is that does work effectively. I mean, there is a great

deal of heightened awareness by everybody. As you know, my close

partner is Admiral Giambastiani, and so we work very closely toVerDate 22-MAR-2001 08:36 Nov 21, 2008 Jkt 038835 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\110-63\177000.000 HNS1 PsN: HNS1
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gether, the civilian and military leadership, being responsive and

using everything at our fingertips to do that.

I, frankly, don’t see delays in the system. I don’t see bureaucratic

delays. I do see the inevitable delays of just adapting and building

and designing, you know, the next generation of equipment to field

for our men and women in combat.

So there is, obviously, that inherent delay of just being able to

build and supply, but I don’t see that as being a system-type error.

Mr. HUNTER. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

Dr. Snyder.

Dr. SNYDER. Thank you, Mr. Chairman.

Thank you, gentlemen, for being here this morning.

And, Secretary England, we appreciated your work through

many years now for your government, and thank you. The team of

Gates and England are a powerful one for the country, and we appreciate you all’s service in managing the Department.

I was struck when the gavel went down there was not so many

members here this morning, but three of them were three of our

freshman members: Dave Loebsack, Brad Ellsworth and Nancy

Boyda. And it, kind of, struck me that this is one of those topics

that is pretty frustrating for members. We can get bogged down

pretty quickly in the complexity of it.

And, you know, your last paragraph in your written statement,

what you said, you know, to recognize the Department’s leadership

and people are far more important than any organizational construct.

The problem we have is like what Mr. Hunter just pointed out.

We hear about the problems, and then we want to know, ‘‘Well,

where is something wrong?’’ And then we are going to say, ‘‘Where

is something wrong that we can correct by statute?’’ And then that

starts muddling up the system because statute should really be the

last hammer that comes down in trying to correct a problem.

But I wanted to ask several specific questions. The first one you

are probably going to say is not part of this hearing today, but it

is part of this whole issue of management.

Why isn’t there a unified command in Iraq? And whose decision

is that to have a unified command in Iraq?

Secretary ENGLAND. Mr. Snyder, again, I am going to tell you,

I don’t deal with Iraq. I mean, that is just not my area. That is

not the deputy’s arena. So I just can’t tell you about the management structure in Iraq and what is the most effective military organization. I mean, frankly, I just don’t deal with the military organization in Iraq. And so, unfortunately, I just can’t comment on that.

I am not knowledgeable enough to do so.

Dr. SNYDER. The reason I ask that is, I am taking your last paragraph here: ‘‘The department’s leadership and people are far more

important than any organizational construct.’’

The problem is, if we don’t have a unified command in Iraq and

so multiple messages come down, from the State Department, from

the military leadership, that may or may not be working in synergy

together, I would think that makes it confusing for the people down

the line in terms of the kinds of issues that Mr. Hunter just

brought up.

11

Or there was an article, recent press reports out in the last few

days about Marines for the last couple years wanting these dazzlers, some kind of laser device, a non-lethal way of stopping cars

that are speeding toward checkpoints, and have been frustrated in

the delay getting those.

Secretary ENGLAND. So here is my only comment, I guess as a

general comment, Mr. Snyder.

I mean, in any organizational construct there are always advantages and disadvantages, so we always talk about the disadvantages. But whatever the alternative is will also have disadvantages

of another sort.

So, I mean, generally people of good faith, you know, evaluate

these pluses and minuses of different alternatives and decide that

they will accept some downside, right, for certain benefits, and that

being the best combination at that given point in time.

So I am not sure of that in this particular case, but I would tell

you, yes, there are probably disadvantages to it, but there will also

be other advantages that people consider more important than the

disadvantages.

Dr. SNYDER. I wanted to ask specifically with regard to the big

acquisitions that occur in the military.

Dr. Hamre’s group came out, I guess, I think it was in their ‘‘Beyond Goldwater-Nichols’’ report of May 2006, they thought that the

reason that we have had some problems in big acquisitions is that

the service chiefs are left out of the line of authority in the acquisition projects until far late in the game. And by the time they have

some authority to say, ‘‘That is not exactly what we wanted,’’ it has

taken on a life of its own.

Do any of you have any comment about that issue with regard

to the service chiefs having more involvement in large acquisition

projects?

Secretary ENGLAND. Putting on my previous hat as Secretary of

the Navy when I dealt directly with the service chief, the Chief of

Naval Operations (CNO) and the commandant of the Marine Corps,

that was not an issue, because they were involved early on.

There were some discussions as to—when I first came on, there

was some discussion, were they allowed to be? That is, because of

the separation, particularly in the test community and the evaluators and the designers, et cetera. But it turned out that was not

an issue.

And my view today is, is that there are forums. So, for example,

in the Deputies Advisory Working Group we have the vice of every

department—so the four-star of every department sits in every one

of those meetings. And in those meetings we discuss literally every

acquisition program that we have.

In the past, we didn’t have those kind of venues in place, but

now we do have a venue where every service gets to look at every

single program across the entire department. So they are all participants in the decision-making and the understanding, the evaluation, and the way forward.

So I would say, particularly for the last two years, there has been

a very specific venue for them to participate in acquisition-type decisions.

12

And in that meeting is also the head of acquisition, technology

and logistics (AT&L), along with other departmental senior people.

So all the senior people come in, everybody has a say. We decide

what sort of studies and analysis to do, and my view is it works

very well.

Dr. SNYDER. You may want to have some conversations with

present and past service chiefs, because I don’t think there is unanimous agreement on what you just stated. I think there is a need

for some difference in process.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

Mr. Bartlett.

Mr. BARTLETT. Thank you very much, Mr. Chairman.

And, gentlemen, thank you very much for your service.

Secretary England, I read with considerable interest your prepared testimony. You say in one of the paragraphs, ‘‘Allowing a future Secretary of Defense to adjust the organization to fit his senior

leadership team is infinitely preferable to forcing the team to fit

the organization,’’ which appears to be what we are about.

You go on to say, ‘‘To accommodate personnel rotation, the DOD

organization needs to be flexible and adaptable. Presenting specific

legislative attributes would run counter to this objective.’’

When I read that, I thought of what has been happening for a

number of years now in our educational system in this country. We

have ever more meticulously detailed curricula that the teachers

are forced to follow.

I think I know why we are doing that in the educational arena.

I think we are doing that because we want to make sure that the

teachers that really are mediocre will somehow be forced into a

regimen of behavior so that they will be productive.

My sense is that if we paid our teachers twice as much and got

rid of most of the bureaucracy on top of them that we wouldn’t

need all of those meticulously detailed curricula.

I am trying to understand how we got where we are in the regulations with DOD. I know that you are burdened with our regulations, that we see that you are not working effectively. And our solution to that is to pile on more regulations.

How did we get here, and what do we have to do to reverse this?

Secretary ENGLAND. If I could give you one data point, Mr. Bartlett. The other day we had a discussion dealing with flag officers;

that is, stars, generals and admirals. And it was brought out that

there are 219, I think, legislative passages or regulations dealing

with flag officers, which is, you know, sort of astonishing to me

when I heard that number, that there are 219 different types of

legislative directions dealing with flag officers alone.

So it builds up over time. Whenever there is an issue, we add

something to it. I think that is, sort of, what Mr. Snyder said: It

tends to be in addition to, and after a while you just have a much

larger bureaucracy that has to deal with all this.

Again, my view would be for very large, complex organizations,

which DOD is—the simplest structure is the most effective structure. So what you like to do is simplify the organization, put authority and responsibility at the lowest level you can, and find

ways to interconnect—that is, have horizontal interconnects.

13

We tend to try to solve the problem by adding to the top. I tend

to think that instead of adding to the top you tend to have interconnects between the large number of organizations that make up

DOD.

That is obviously an organizational philosophy. I mean, people

have different views of this, but at least that is my view. It is the

way I address it.

It is interesting, by the way, when I wrote my comments, I didn’t

know this, but I since found out that this is what David Packard

said in his final report: ‘‘Excellence in defense management will not

and cannot emerge by legislation or directive. Excellence requires

the opposite. Responsibility and authority placed firmly in the

hands of those at the working level who have the knowledge and

enthusiasm for the task at hand.’’

So at least I find myself in good company with David Packard

in terms of my approach, although I didn’t know he said that until

after I had written my comments.

Mr. BARTLETT. Mr. Secretary, it might be productive if you could

prepare for us a list, prioritize it, from the worst, the most difficult

to deal with regulations.

And, Mr. Chairman, if we, then, every time we passed a new regulation, we had to do away with two of those old regulations from

the secretary’s list, maybe we would be making some progress.

Do you think?

Secretary ENGLAND. You know, back in 1991 there was what is

called a Section 800 panel, and at that time they were dealing with

streamlined defense acquisition. And they identified at that time

over 600 relevant statutes and recommended 300 of them for appeal or amendment. And some were addressed in later acts by the

Congress. I think they took some action. I am not sure how much.

But at that time, in that one area alone, there were 600 regulations that they felt—not in total, just that they felt like could be

either eliminated or repealed or amended.

Look, we would be happy to help this, Mr. Bartlett, but I will tell

you, it is a huge amount of work just to go back and do all this.

I mean, there have been whole boards and committees that have

worked this. I am not hopeful that we are going to go streamline

all of this.

I would, however, like to retain whatever flexibility we can for

the next Secretary and the next President as opposed to constraining them further by legislation.

Mr. BARTLETT. Thank you.

Thank you, Mr. Chairman.

The CHAIRMAN. Mrs. Davis.

Ms. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman.

Good to see you, Mr. Secretary. I know you have worn so many

different hats that sometimes it probably is confusing to relate

back to which hat you are wearing, I am sure. [Laughter.]

But I really appreciate the service to our country, and thank you

all for being here.

I wanted to just go back to the GAO report for a second, because

they had pointed out that among the issues that they addressed

was the ‘‘lack of sustained top-level leadership, cultural resistance

to change and inadequate incentives to change.’’

14

And I wonder if you could, number one, say whether you think

that was a fair characterization. And, two, what do you see is actually moving toward some changes in that area, toward eliminating

some of those concerns?

Secretary ENGLAND. Could you read the words again for me? Because there are a lot of comments on GAO. Let me make sure I

have the right ones, please.

Ms. DAVIS OF CALIFORNIA. Just the ‘‘lack of sustained top-level

leadership, cultural resistance to change and inadequate incentives

to change.’’

Is that a fair characterization? And, if so, do you think there are

some changes that you are seeing? And how do you evaluate that?

How do you even see that if those are issues?

And if they are not issues, then, that is fair, go ahead, and let

us know what you think.

Secretary ENGLAND. I don’t think it is a fair characterization

today, obviously. However, I think in fairness to GAO, they look

over a long period of time.

And so, again, it is a function of leadership and what the leadership is trying to accomplish. And they look ahead in terms of, what

are the qualifications for the people who are in these leadership positions, particularly the Deputy Secretary position?

It is important, in my judgment, to have someone that has experience in large organizations to run an organization of the size and

complexity of DOD. So you do want somebody with a background

both in carefully bringing about change, because of my comment

about making sure you create value and not destroy value. So it

is important to have somebody with the right sort of attributes.

And we have suggested—and by the way, and I have endorsed

this in my comments to the Congress—to have a criteria for the

Deputy Secretary. I mean, the Deputy Secretary, in my judgment,

should fulfill the function of the chief management officer, should

be the COO of the organization, rather than the CMO. He should

be the COO, or she should be the COO, of the organization, and

therefore——

Ms. DAVIS OF CALIFORNIA. Is that where you would be ultimate

responsibility for management of the department?

Secretary ENGLAND. Well, the ultimate responsibility is with the

Secretary. I mean, by law, the Secretary has Title X responsibility

for the management. And he is also the key adviser to the President. So it is the Secretary. And the Secretary, though, I would

say, typically passes on the COO function to the Deputy Secretary.

So the secretary is the CEO. That is, policy, broad direction, priorities, international, et cetera. And the deputy, then, is responsible for the resource allocation, the overall general management,

the planning for the Department. So the deputy would do the classic COO functions.

Now, unlike, however, in the case of, say, the comptroller for

David Patterson, for the comptroller itself, there is a set of requirements for a comptroller. That is, a comptroller, you obviously want

to have a financial background. The acquisition executive, there are

criteria in law, in terms of having acquisition background.

For the deputy, there is no such criteria. And so we have proposed putting in the DOD system a set of responsibilities that a

15

deputy would need to perform as part of his function, and to do

that in the directive system, recognize that the Congress always

has final approval because of the confirmation process.

But right now, there is no role like that called out in DOD. So

calling out, so having that role prescribed, and then making sure

you selected people that would fit that role, would indeed be helpful, in my judgment, going forward for the Department of Defense.

Ms. DAVIS OF CALIFORNIA. How would you want to see the Congress really providing then the oversight and, at the same time, the

flexibility for that position? What role vis-a-vis if you were sitting

in that seat and we were sitting here trying to ascertain the extent

to which—

Secretary ENGLAND. So here is the dilemma, Ms. Davis. The dilemma is, on one hand I can, myself, being in the role, can easily

say, ‘‘Gee, this is the role that the deputy should fulfill.’’ On the

other hand, what if the next Secretary has very extensive management experience and actually decides to take on more of that role

him or herself and have the deputy in another, you know, lesser

function.

So this is the question about providing the flexibility, in my judgment, for both the President and the Secretary in terms of: How

do you build the whole management team?

I would tend to come down, frankly, to leave it to the next President, the next Secretary to decide how they want to structure it,

and the Congress sort of understanding that they need to know

what that structure will be so when they confirm people, they

make sure they have the right mix of talents to do the job.

But I, frankly, have concluded I would not tie the hands of the

next Secretary or the next President in terms of the mix of people

that they have or the kind of talents that they bring together, because at the end of the day it is about a management team.

It is not about this one office. I mean, this one office is one office

of a thousand people who do a great job at leadership positions

every day. So I just wouldn’t make this the center of this. I mean,

it is the management team and not a person, and I believe that

will be the case going forward.

The CHAIRMAN. Thank the gentlelady.

Mr. Thornberry.

Mr. THORNBERRY. Thank you, Mr. Chairman.

Mr. Secretary, we appreciate, I think, the situation that you are

in, which is rather a pragmatic one. You have to make this place

work day to day and get the most productivity you can out of it.

And yet I think that this kind of broader question of management of the Department is an important one at a variety of levels,

including the trust and confidence the American people have in

how their money is being used.

All our constituents have heard stories about soldiers having to

buy their own body armor, about decisions to buy weapons that

don’t fit the current conflict or in past conflicts.

Regardless of the merits of some of those things, there is the

management issues about whether government works very well

and makes common-sense decisions is challenging, not just in your

Department, but maybe because of the importance of the Defense

Department, as much as anywhere.

16

And, as you know, there are think-tanks all around town that

are going to take the next 18 months and develop a vision or their

idea, an ideal scenario of how things could be better for the next

administration. I have written down, just listening to you so far:

simplest structure possible, the greatest flexibility possible.

If you were guiding some of these think-tanks in setting forth

what is desirable, understanding it is a long way between here and

there and how you achieve it, but just thinking about the tools and

authorities you would like to have the next Deputy Secretary of defense have, other than those two general principles of simplest and

flexibility, are there other things that you would advise them to

consider and think about as they are trying to paint a picture for

going ahead?

Secretary ENGLAND. I would like to answer maybe a little bit different question.

First of all, the deputy has the full authority of the Secretary of

Defense. So by law, the deputy carries the full authority of the Secretary. So frankly, my view is the deputy has all the authority and

responsibility you could possibly put on a deputy today.

If you asked me what is the single largest detriment in DOD, I

would tell you I believe it is the budgeting, the entire money process. Because it is about a two-year process. You know, when we

start working our budgeting, we work all year to put our budget

together. We turn it in to the Congress. Congress spends a year reviewing and modifying, et cetera, you know, doing what they do to

the budget.

At the end of that year, we then get authorization to spend

money. So we then start spending money literally that we were

talking about two years before. So it is literally a two-year budgeting cycle, which is a very long time in the kind of environment we

live in today, frankly.

If you will pardon me, I will use the example I use. I mean, one

time it was our steel mill against their steel mill, and their steel

mill went bankrupt and we prevailed as a Nation. And so we still

have a little bit of the steel mill organizational mentality, with long

investment cycles and long, deliberative times. And, I mean, it is

built into the system, these long cycles.

In the meantime, the threat is no longer a steel mill. The threat

is very agile, adaptable, quick. And we still pretty much have the

structure, the national structure, with the Congress, that we have

had during the entire Cold War.

And so, while we can adapt for certain things and turn around,

nonetheless, we still pretty much have the structure we have had

in the past, in terms of our total national way of dealing with this.

And you know, we need to think, I believe, in broader terms than

just the Department of Defense. We really need to think about how

the Nation is more agile and quicker and adaptable for the kind

of threat we now face, as oppose to the threat that we have faced

for 40 years.

Mr. THORNBERRY. Thank you.

The CHAIRMAN. Ms. Boyda is recognized for five minutes.

Mrs. BOYDA. Thank you, Mr. Chairman.

And thank you, Secretary England, for being here today and your

service in the Navy.

17

Secretary ENGLAND. My pleasure. Thank you.

Mrs. BOYDA. I am one of the freshmen. So I am just trying to

get some bearings on some things and trying to actually learn

things about culture. And I had two questions that are, again, trying to get into the mind of the military, the Army, all of the different branches of the armed services. And one of them comes back

to, again, contractors.

Obviously, there is so much conversation about contractors. But

when we are trying to get our arms around everything, again, how

does the military, specifically the Army, view contractors, in light

of management decisions? And how, when we take on contractors,

how does that play into your management decisions and style?

What works, and what doesn’t work?

Secretary ENGLAND. We contract for whatever we need to contract for to get the mission accomplished. And it is literally that

simple.

So, where we have capability in the government, we utilize that

capability. If we don’t have that capability, we contract out. And

that is everything from different services to building ships and airplanes and designing goods and equipment and cafeterias.

And so, whatever it takes, frankly, to do the mission—and we

utilize the resources of the Nation to do that. And sometimes it is

military; sometimes it is civilian government. And sometimes it is

contract in the U.S.; sometimes it is contract in-country.

Mrs. BOYDA. I appreciate that.

Part of the perception of the American people is that part of

what is out of control is this sense of, how do we hold them accountable? How do we know what is going on?

And again, I have to deal with the perception—and I certainly

say that I support contracting. We need to pull in all the resources

of the American people, as you just said. But the sense is that contracting has reached a point where we have lost the ability to manage that function.

Tell me, how I should respond? Or do you feel like that is accurate? Should we start pulling back on contracting?

Secretary ENGLAND. I would say that it is a valid concern, and

I am not sure I know the answer.

I do know this: It was enough of a concern that I brought together all the legal and contracting people just to make sure that

we had the right legal framework to manage contractors around

the world in terms of understanding their liabilities and our actions if they did not live up to our expectations.

Mrs. BOYDA. When they don’t live up to our expectations,

because——

Secretary ENGLAND. When they don’t. But recognize that at least

contractors in a combat zone have a very difficult environment,

right?

Mrs. BOYDA. Exactly.

Secretary ENGLAND. So we ask them to do quite extraordinary

things. And they do quite extraordinary things for us.

We also have contractors, by the way, from other countries who

repair equipment. In theater we have people in the country who do

things for us—Iraqi business, et cetera. So there is a wide range

of ‘‘contractors.’’

18

Anyway, the conclusion of all that is yes, we do have the right

legal basis and structure that we can contract effectively with the

correct remedies, et cetera.

Mrs. BOYDA. My concern is twofold. One is I have so much military in my district that I do hear back some sense of just—maybe

‘‘resentment’’ is too strong of a word—but what our soldiers are

doing right there every day at base pay, and they are so committed

to this country and the concept of where we are going with contractors.

What I would just offer as something that I guess you must be

painfully aware of: As we see more contractors, this body will probably put more of those regulations on top of things to make sure

that those monies are being used well. And again, it will be one

of those things that continues to complicate as things go on.

So this body is struggling to figure out what we need to do to

let the American people know that those monies and those projects

are being—so we are headed for one of those very difficult intersections.

Secretary ENGLAND. We need to do this very, very thoughtfully,

because for all those great men and women who wear the uniform

in your district to do their mission, they do need contractors’ support and assistance to do that mission.

And our military will always be of some reasonably limited size,

and we will always want to contract out certain functions, particularly peak functions that you don’t want to have on a long-term

basis if you only need them for a short period of time, et cetera.

So there are valid issues and concerns. It is something we need

to work through together.

But I would say before we overburden the system with a lot of

regulation, we really need to understand what the mission is and

how we accomplish that, because ultimately, that is what America

needs to have accomplished.

Mrs. BOYDA. We are out of time, and I will yield back. I agree

with what you are saying. Thank you.

The CHAIRMAN. The chair recognizes Congressman Kline.

Mr. KLINE. Thank you, Mr. Chairman.

Thank you, gentlemen, for being here.

Mr. Secretary, always a pleasure to see you.

Secretary ENGLAND. Mr. Kline.

Mr. KLINE. And I want to add my thanks for all of your service.

And however many hats, you have worn them all very well.

A couple of comments. You talked, as Mr. Thornberry said, about

fewer and simpler regulations and more flexibility. And I think it

is clear that we need that.

But I want to go back to what Mr. Hunter was talking about,

about the rapid acquisition authority that the Secretary has and

how few times it has been used. He said twice. It was zero for a

very long time, and frankly, I thought it was just one having to do

with IED defense. So two is a terrific increase over what I thought.

But I am shocked——

Secretary ENGLAND. Can I ask a question?

Mr. KLINE. Sure.

Secretary ENGLAND. Do you know how many—David, do you

know? I don’t have somebody with me to—do you know how many?

19

Mr. PATTERSON. We used the authority that established the joint

rapid acquisition cell, I would guess, about one or two times a

month. And what we find is—and when I say that, you gave us authority for about $100 million. What that has prompted us to do

is to find other base budget or supplemental ways of funding that.

But we use that authority on a regular basis to do a wide a variety

of things and many classified things.

Mr. KLINE. Okay. Could I ask for the record, please, to get that?

Mr. PATTERSON. Absolutely.

[The information referred to can be found in the Appendix beginning on page 88.]

Mr. KLINE. Because we obviously are dealing with misinformation here.

Secretary ENGLAND. Mr. Kline, what I do for the IED task force

is I have literally passed my authority on to that organization, and

they can directly spend, I believe, $25 million without any, ‘‘Mother, may I?’’

So part of my hesitancy in this is understanding how often they

use it, because I give them total authority. They can spend up to

$25 million without coming back to me, and then they do whatever

they have to do quickly to be responsive to our men and women.

So they may use it a lot of times I am just not aware of, because

I give them that authority so they can respond quickly.

Mr. KLINE. Fair enough, Mr. Secretary, but we obviously don’t

understand that. Mr. Hunter said two. I thought it was one. You

are saying many, many times.

We would like to know that, because we believed here in this

committee that was a very important thing that we did, to allow

the waiving of those Federal acquisition regulations: Buy it if you

need it; buy it wherever in the world it is made; and get it to the

troops to save lives.

And I don’t want to start to argue you with you, Mr. Secretary,

but you essentially said that the acquisition system was sort of

working like it is supposed to. At least, I thought that is what you

said. And I don’t see that.

It seems to me that the acquisitions system—the whole system,

what we have imposed from Congress, what DOD has done, how

it is organized—has not functioned very well. It is the steel-mill,

with all apologies to our steel producers, approach to acquiring

things for our military.

And we are dealing, as you said, in a different age with a different enemy, and we need much more speed and agility than we

are getting from the big defense acquisition systems.

So if you really think it is working well—and I applaud improvements in the JROC which I think you have made—but it seems to

me that it is awfully slow. So did I misunderstand you?

Secretary ENGLAND. I would say yes and no. Is that a safe answer? [Laughter.]

Mr. KLINE. It is not a satisfactory answer, but go ahead.

Secretary ENGLAND. If I could explain just a bit. I believe when

we need to respond quickly, we are doing that. When somebody

needs a piece of equipment, we quickly do that, and we use whatever authorities, and we are very quick and adaptable.

20

When it comes to very large integrated systems, huge complex,

huge command and control system, large integrated space systems—and I will tell you our systems are getting more complex by

orders of magnitude—we have concluded that, frankly, the way we

were doing that was not effective, because we were dealing with individual programs and then integrating those programs into these

large systems.

So we now have what we call joint capability portfolios. We have

four large integrated portfolios that we are doing as an experiment,

but we are really doing it for real. And we will pass this on to the

next team where we now manage the programs that need to operate together as one large joint portfolio.

And it is interesting when you talk to our people in the command

and our combatant commanders, this has made a remarkable difference in understanding how this all comes together, the milestones to be met, et cetera.

So I believe that, look, there is always going to be room to do this

better. There are now some new approaches that I am at least

hopeful——

Mr. KLINE. Well, I will look at those with interest. And I also am

hopeful.

I see my time is up. Mr. Chairman, I yield back.

The CHAIRMAN. Thank you.

The chair recognizes Ms. Bordallo for five minutes.

Ms. BORDALLO. Thank you very much, Mr. Chairman, and thank

you for calling the hearing this morning.

And I wish to welcome our witnesses, especially Secretary England, whom I have known for several years.

Secretary ENGLAND. Ms. Bordallo, how are you today?

Ms. BORDALLO. Very good.

Mr. Secretary, this question is for you. DOD controls a significant amount of Federal Government contracting dollars, and it controls the vast majority of the Federal marketplace in my district,

Guam.

America’s small businesses, I feel, deserve fair treatment. So I

am concerned about this, because Guam will be home to a significant amount of military construction and other work during the

near future. Our small businesses, which comprise the majority of

the businesses, want to be partners in the department’s plan to

build up Guam.

Do integrating small businesses into DOD contracting efforts

pose challenges to the business transformation effort? And more

specifically, will integrating Guam’s small businesses into building

up the bases on Guam pose certain challenges?

Secretary ENGLAND. Ms. Bordallo, I don’t know if it poses unique

challenges. We do have a commitment to small businesses. In fact,

I will comment, I believe when I was running the Fort Worth company then of General Dynamics and Lockheed, about 80 percent of

our contracts were with small business—not in dollar value, but

number of contracts, as I recall.

So small businesses are hugely important to our Nation and to

DOD, and we do have objectives of small business offices, and we

do that for various types of small businesses. So we will continue

21

to emphasize the small business of Guam and every place our view

is. It is good for America to develop small businesses.

Now on the one side it is, I will tell you, sort of the catch–22.

We make the small businesses very successful, and they grow out

of being a small business, so now they have a contract and they

don’t count anymore in terms of a small business. So when you are

very successful, you find yourself that the scorecard goes against

you if you are very successful.

But I would say, look, that is the bottom line: small business,

making them successful and grow. And that is part of our commitment, and that is the way we operate. And we will do that on

Guam as we do every place else.

Ms. BORDALLO. Very good. I like that answer.

Mr. Secretary, my second question is, over the past several years,

we have heard from many components of the United States armed

forces, particularly the National Guard and reserves, about staggering equipment shortages. Questions have been raised as to how

the equipment is accounted for at home and abroad.

As DOD reforms its business practices, to what extent has DOD

incorporated equipment asset tracking into its business transformation program?

Let me just give you a quick example. The Army will track

equipment literally to each nut and bolt. On the other hand, the

Air Force tracks equipment by platform. The difference in accounting methods would make it very difficult to create a uniform process for asset management.

How would you tackle that?

Secretary ENGLAND. So, David, do you want to—I don’t know if

I—you know, this is interesting. I am sitting here, and as you were

talking about this, I can remember this conversation, frankly,

about asset tracking and at what level and having common standards across DOD, but I can’t recall our conclusion.

Do you recall, Paul, the conclusion?

Mr. BRINKLEY. I think we can take a crack at it, anyway.

Secretary ENGLAND. Okay.

Mr. BRINKLEY. There are two key elements in your point about

the differences between the uniform services and how they have

historically developed their own mechanisms for both accounting

and just asset visibility.

That nomenclature they use—you can go to a 7–11 and there is

a standard bar code on things. Well, within the Department of Defense often, because of the history which goes back so many years,

we lack those standards.

And putting those standards in place is a key element of the integration Mr. England was defining earlier. In other words, how do

we standardize our nomenclature for how we identify an asset so

that a Humvee that the Marines are using is identified the same

way as a Humvee that the Army is using? That helps support the

joint warfighting effort.

But we have also defined a standard financial information structure in partnership with the comptroller’s office so that, as those

asset standards are defined, the way we roll up an account for

them and depreciate them and track them from an accounting perspective also becomes standardized.

22

And these are key elements of both the enterprise transition plan

for the DOD’s business transformation effort, as well as the financial improvement and auto readiness plan that Mr. Patterson mentioned earlier.

Ms. BORDALLO. Good. Thank you very much.

Secretary ENGLAND. Thanks, Paul.

The CHAIRMAN. Mr. Jones.

Mr. JONES. Mr. Chairman, thank you very much.

Mr. Secretary, it is good to see you again.

Secretary ENGLAND. Mr. Jones, how are you, sir?

Mr. JONES. I am fine, sir.

I was a little disappointed that your answer to Mr. Snyder, that

you said you were the former Secretary of the Navy. You should

have said Secretary of the Navy and Marine Corps.

Secretary ENGLAND. Or Secretary of the Marine Corps and Navy.

[Laughter.]

Mr. JONES. Hopefully we will change that this year with the help

of the Senate.

Mr. Secretary, I have great respect for you, and you know that.

For the moment, can you tell me, in your opinion: Is the Department of Defense more efficient today or less efficient than it was

in 2001, from a financial standpoint?

Secretary ENGLAND. I don’t know 2001. I can tell you that it is

more efficient in my judgment in the last two years, when I personally had a hand in tracking and putting systems together.

So I am not sure I can go back to 2001. I can tell you I believe

that the Department has made great progress in terms of what I

call, again, the horizontal integration, the effectiveness and efficiency. I can tell you the Department of Navy is more effective and

more efficient than it was in 2001. They still are today. And, again,

so I can speak with that firsthand.

The agencies, I would say, are vastly better than they were in

2001. So our defense agencies, we did start back in 2001 with integrated approaches in terms of those very, very large and complex

enterprises. And they, I would tell you, they are just vastly better

today than they were in 2001.

So I am not sure about the total enterprise. I think the total enterprise, I would tell you is much better than it was just a couple

years ago. And I can at least speak for agencies and Navy and Marine Corps. And the other services I just don’t have insight back

to 2001.

Mr. JONES. Mr. Patterson or Mr. Brinkley, would you be able to

go back to 2001 and answer that question, whether it is less or

more or the same, as far as efficiency, the spending of the taxpayers’ dollar?

Mr. PATTERSON. I think that I would feel very comfortable saying

that we now have a very clear strategy, a very clear way ahead

with the systems that the Secretary and the Deputy Secretary have

been the sponsors of.

And this, perhaps, speaks to Congresswoman Bordallo’s point,

that we now have 15 percent of our assets that we can track. We

have a standard financial information system that we did not have

before. And we track 49 percent of our liabilities, $967 billion

worth.

23

And we have now the beginning of an enterprise transition plan,

the Business Transformation Agency. And, of course, Paul can

speak to that in much greater detail.

But we now have the beginnings of tools which we did not have

before. And I can speak with some knowledge, having been in the

Pentagon from 1983 to 1990, and these kinds of things would have

never occurred to us, quite frankly, because we did in fact have a

system of accounting that was driven by the appropriators and appropriations.

Now we have a clear way ahead with the, as I said, the financial

improvement and audit readiness plan, the enterprise transition

plan and all of the systems now that we are beginning to bring online and evaluate and vet for their effectiveness and efficiency.

And I am very hopeful that we will start to see clean audits.

We have the Army Corps of Engineers which has just gone

through an audit. And I think that, for the first time of an agency

of that magnitude, the outcome will be very positive.

We are beginning the audit procedures, the pre-audit procedures

for the Marine Corps, and have started to put into position a relatively new approach to that, with an audit readiness intermittent

step, so that when we assert that the Marine Corps is ready to undergo an audit, we will have a significant amount of confidence

that that will be done well.

So I am much more comfortable now, seeing the progress that

has been made over the last six years, than I might otherwise have

been, sir.

Mr. JONES. I appreciate that response. And I guess the only

other question—well, my time is up. I yield back.

The CHAIRMAN. Mr. Cooper.

Mr. COOPER. Thank you, Mr. Chairman.

Mr. Secretary, for many of us on the committee, the issues are

like swimming in molasses: It is slow and sometimes painful work.

But in response to Mr. Bartlett’s very helpful suggestion, I

thought perhaps we could start with your statement that you have

discovered 219 different regulations that apply to flag officers. If

you wouldn’t mind supplying that to the committee, perhaps we

could start with that list and whittle it down, perhaps get rid of

some of the unnecessary rules.

Secretary ENGLAND. Well, Mr. Cooper, we will do it. And I am

not familiar with the 219, but our personnel people actually

brought that to my attention just the other day. But we will articulate those for you. I appreciate your help. Thank you.

[The information referred to can be found in the Appendix beginning on page 88.]

Mr. COOPER. Whatever information is already supplied and available. We do not want to create more work for you. But it would be

helpful to have clear communication so that we can learn.

Secretary ENGLAND. Good.

Mr. COOPER. I wanted to focus on Mr. Brinkley for a moment. He

seems like an interesting addition to the management at the Pentagon, having come from the outside with apparently no prior defense contractor experience. I would be interested generally in your

observations of what it was like to come in from the outside.

24

And also I want to learn from you about your position as leader

of the Task Force for Business and Stability Operations in Iraq.

Both issues are important for me. I only have five minutes. So

if you wouldn’t mind elaborating on both, I would be glad to hear

from you.

Mr. BRINKLEY. Certainly. Thank you. I will be brief on the first

part so I can focus on the second.

The observations I would have on the transition from Silicon Valley to DOD have to do with just the whole set of measures that are

applied. You have a profit and loss. We have talked here today

about financial audits, why can’t the Department of Defense get a

financial audit. And Mr. Patterson articulated that until 2001, that

was never part of the focus of the Department of Defense. It wasn’t

designed to do that. It was designed to project force and support

a national security objective. It was not designed to create profit

for shareholders.

So the whole set of motives that one lives with and really become

ingrained in the way you think when you are working in a privatesector corporation are now part of what are ingrained in you when

you are working in a Federal agency.

And so being able to shift and understand and translate the principles and the best practices that come from industry that everyone

wants to see—everybody goes to Amazon and wants to point and

click and have access to information; why can’t I do that in the

DOD?

Well, there is a host of reasons why that is complicated in the

DOD. They have to do with history, the fact that we were adopter

of technologies always. The DOD is the first to adopt new technologies to support our men and women in uniform. That creates

fragmentation. As standards emerge over time, those initially

adopted technologies, some of them become standardized, some of

them don’t.

So these are all things that are unique about government that

make it very difficult for the Department and any government

agency to quickly monitor behaviors that we take for granted in

our day-to-day lives in the private-sector world.

Regarding the work in Iraq—and I will tie to this—one of the

things great companies do is they understand what their customers’ needs are. And the customer for the business mission of the

Department—Mr. England has driven this home repeatedly—the

customer for the business mission of the Department are the guys

in uniform in the desert today. It is the warfighter.

Great companies understand, from the very top to the very bottom, how their work, regardless of how arcane it might seem, matters to the customer.

And for us, the task force effort, taking our business transformation leaders, the people with industrial expertise, putting

them in Iraq to support the mission in a way that leverages our

business expertise to help restore economic vitality in Iraq, while

also working through a lot of our business process issues, which

can affect contracting, maintenance, financial management—all of

those things go to war with our warfighters. And some of them

work really well, and some of them don’t.

25

So how we address those things quickly in theater creates urgency back in the back office, so people who typically don’t see how

their work affects the guys in uniform suddenly can see that financial accounting matters to the guys in uniform.

And then one thing I will say about the Department. There is a

huge amount of passion at all levels of the organization. If you can

get people to see how their work matters to the people in uniform,

the amount of energy you can harness is tremendous. That is why

people work in the DOD. It is a patriotic impulse, it is a desire to

serve.

And so those are things, I think, that have made our task force

effort extremely rewarding and have helped invigorate our business

transformation effort as we have engaged with our forces in theater.

Mr. COOPER. What did you think when you read in the paper last

week that Iraq is now judged the second-most unstable country in

the world, and you are the leader of a task force on stability?

Mr. BRINKLEY. I think it is a testimony to the struggle we have

in our government today to bringing the economic leverage of the

American force to lever, along with the political and the military

leverage that we are designed to bring forward.

The fact that we are not able to leverage the $12 trillion American economy to effectively engage a $40 billion economy and uplift

the livelihoods of people in Iraq I think is a challenge that, again,

the unique situation in Iraq has illustrated and that we are working to try to address in our efforts to forge economic growth.

Mr. COOPER. Thank you, Mr. Chairman.

The CHAIRMAN. Thank the gentleman.

Mr. Wilson.

Mr. WILSON. Thank you, Mr. Chairman.

And thank all of you for being here.

It is particularly very meaningful to me to have Gordon England

here. He is a folk hero in the 2nd District of South Carolina with

his service, Mr. Chairman, twice as Secretary of the Navy.

And I was yesterday visiting again at Parris Island, the Marine

air station, also the naval hospital in Beaufort, and your successor,

Secretary Winter, has done a fine job of coming by to visit. But you

helped create the tradition. So thank you for your service.

Secretary ENGLAND. Thank you, Mr. Wilson.

Mr. WILSON. And I am really pleased to hear from all of you as

to the success of improved business practices at the Department of

Defense. I was very happy to hear Congresswoman Bordallo’s interest in small businesses. I have a keen interest in that, and she has

done a wonderful job of promoting the small business of Guam, and

truly that is reflected across the United States.

And this has been touched on by Mr. Patterson, and that is the

ordered opinions of so many elements of the Department of Defense, including the military services and their inability to have a

clean financial audit opinion.

Could you please explain that a little bit further?

Mr. BRINKLEY. Yes, it is, in my opinion, not necessarily that they

can’t have a clean audit opinion. At the very lowest level on bases,

the base commander knows every single item that he or she has.

26

The problem that we have has been, over the course of, as I said,

the last 60 years, we have not emphasized that kind of an audit

approach. Our audit approach has been, historically, one in which

we deal with the appropriations that were given and then we account for those appropriations in the various categories: MILPERS,

operations and maintenance, and investment.

We have changed, and we are now focused on those standards as

outlined in the generally-accepted accounting procedures, which are

far more conventional in the way people think about an audit.

Our motivation to do this began in 1990 with the Chief Financial

Office Act, and later fortified by the Sarbanes-Oxley. But it is the

right thing to do, and we are now focused on that.

Mr. WILSON. And being focused on it, do you have a timetable

when you believe this could be achieved?

Mr. BRINKLEY. Yes, sir, we have a rough timetable, and I would

say that we would be able to produce a fairly consistent, clean

audit in the next eight to ten years. I know your first reaction is,

‘‘Eight to ten years, my gosh.’’

Mr. WILSON. Well, you have been working on it 60, so I——

Mr. BRINKLEY. Well, we have been working on it differently for

60. But we now have the tools available to us to provide some assurance that we will be there.

Secretary ENGLAND. So if I can add to it, Mr. Wilson, I think

what is different now is we have put together a full-time team to

do this. They have schedules, they have measures. I mean, we have

metrics. We review it regularly to see what the progress is. And I

believe that our interim metric is, like, 2010 we will have 70-some

percent of both assets and liabilities clean audit.

So we do have interim milestones and as Dave said, we already

have seven components with clean audits. We have the Marine

Corps in work right now. We have the Corps of Engineers in work.

So we now have a program, we have a plan, we have dedicated

people, we have money and we actually measure this progress. So

it will get there now because there is a process to do that.

Mr. WILSON. Well, again, I am impressed by the reputation of all

three of you to achieve that.

A final question, going back to Iraq. I was there earlier this

month. I have been there seven times. And your work with the private sector is so important.

What do you see the status of where we are, where it is going?

Mr. PATTERSON. Sir, our effort is specifically focused on the revitalization and the restoration of employment, to drive the unemployment rate, which is chronically high in Iraq, significantly down

as a stabilizing effect in support of General Petraeus’s strategy.

Our status is we have restarted six factory operations in Iraq.

We put a few thousand people back to work to date. We anticipate

restarting dozens of factories this year and putting thousands more

Iraqis back to work in sustained positions within industrial operations geographically distributed around the country.

Mr. WILSON. Thank you again for your service.

The CHAIRMAN. Thank you, Mr. Wilson.

The gentleman from Hawaii, Mr. Abercrombie?

Mr. ABERCROMBIE. Mr. England, good morning. Aloha.

Secretary ENGLAND. Aloha.

27

Mr. ABERCROMBIE. Mr. Secretary, I have been through—let me

start again. I want to make sure I had you correct. Did you say

to Mr. Snyder that there is a complete disconnect between yourself,

organizationally speaking, the gentlemen at that table, and operations in Iraq?

Secretary ENGLAND. No, I didn’t. I said the operation in Iraq is

really under CENTCOM. There is a military operation. As the deputy, I actually don’t deal with the military operation.

Mr. ABERCROMBIE. That is astounding to me. And I think part

of the difficulty here is embodied in that.

If you are not doing that, does that account for the fact that the

mine resistant ambush protected (MRAP) vehicles were unable to

get any attention in the DOD for apparently up to two years, the

requests for forces in the field that were not met because of the inability of the Pentagon to respond to the direct requests of forces

in the field?

Secretary ENGLAND. No, that is not correct, Mr. Abercrombie.

Look, when a request comes from the field, it obviously comes in

and is responded by OSD. If there is an issue, obviously it comes

to my attention. So when there is a request for equipment, it comes

to the chairman’s office, CENTCOM chairman’s office. It gets addressed. Programs are funded, developed to whatever extent necessary.

We have had different models——

Mr. ABERCROMBIE. Excuse me, I only have the five minutes.

But it wasn’t in this instance. And I want you to know, I have

read through all of your material dated as of June 25th, ‘‘Defense

Business Transformation.’’ I have it here. You are no doubt familiar with it.

It includes organizational entities, the congressional requirements fact sheet, so I think some of the answers are already here

for us—the fact sheet on governments and transition tools, and,

most important to me, the fact sheet on components overview.

It says here that the transformation efforts of the six most significant business operations listed here are to do the following:

identify the transportation visions and goals. For the Army it includes processes to equip the force and for the Navy to increase the

readiness, effectiveness and availability of warfighting forces by

employing business practices to create more effective operations reduced cost.

One of the items here is optimize investments for mission accomplishments. If all this is under way, how is it possible that the

MRAP requirement was ignored?

Secretary ENGLAND. It wasn’t ignored.

Mr. ABERCROMBIE. There is no money for it in the budget. One

of the reasons we have a reallocation argument taking place right

now in today’s budget, and push-back coming from defense contractors to what this committee’s decision-making was, is that there

was no money in the administration’s budget to address the request being made by the Marine Corps and the Army just for the

MRAP vehicles alone required for this year.

Secretary ENGLAND. I believe there are over 3,000 vehicles on

order right now, and——

28

Mr. ABERCROMBIE. Yes, but the request is for 6,000 to 8,000 or

even higher now. And the Secretary of Defense says it is his highest priority, but I don’t see your business transition groups, including your organizational entities, being able to respond in a timely

way.

Secretary ENGLAND. We have had, first of all, tests of those vehicles. We have had, I believe, six different contractors in tests at Aberdeen. They have been undergoing various types of explosives and

evaluation. There has been——

Mr. ABERCROMBIE. I am familiar with that.

Secretary ENGLAND. Okay. And we have been up talking to the

Congress about what we do in the upcoming budget to extend that

production line in terms of funding. So we had initial small funding. It grew until we could get into a high production rate.

Mr. ABERCROMBIE. Do you understand, Mr. Secretary, that there

is a disconnect between what you are doing here organizationally

and in terms of governance and transition tools, that there is a disconnect between that and the practical realities of equipping and

training and getting the readiness of the warfighting force? We are

working at odds with what you want to accomplish.

Secretary ENGLAND. I understand.

Mr. ABERCROMBIE. I am trying to help you here. What I am saying is you can’t have this disconnect.

Secretary ENGLAND. No, I understand. I don’t believe there is a

disconnect. I mean, when people come in from the field—and, Mr.

Abercrombie, again, I put my other hat on. Back in 2001 we were

working quick reaction to the field for the Marines and the Navy.

We have been working this whole aspect of IEDs literally around

the clock since the first troops were deployed.

Mr. ABERCROMBIE. How can we account for the fact that we are

having to reallocate funds out of the proposal of the Administration—reallocate funds in our defense budget working with the appropriators in order to fund the MRAP vehicles alone?

I will set aside all the questions about the expeditionary fighting

vehicle increases and all that kind of thing.

Secretary ENGLAND. Well, we had money in the base budget last

year. We had money in the supplemental last year.

Mr. ABERCROMBIE. But not enough.

Secretary ENGLAND. Well, okay, but as more requests have come

in, we have increased the funding, so we have been responsive to

the field.

Mr. ABERCROMBIE. I won’t argue that point.

Do we have a moment, or am I through?

The CHAIRMAN. Go ahead.

Mr. ABERCROMBIE. One moment. I don’t notice anything in what

I have read, all of the testimony and virtually every word in this,

there is nothing in here in terms of your organizational entities

about capital budgeting. And I would sure like to see something in

there about trying to address the question of how we are actually

going to finance these things.

Secretary ENGLAND. We have had a number of conversations in

the building on this, and we are still trying to wrestle to see if

there is a way forward on the capital budget.

29

Mr. ABERCROMBIE. Do you suppose you could put a sentence in

one of these things sometime saying that we are wrestling——

Secretary ENGLAND. We will do it.

Mr. ABERCROMBIE [continuing]. With capital budget?

And thank you.

The CHAIRMAN. Thank the gentleman.

Let me follow through on two examples, Mr. Secretary.

A brigade commander sends a request in from the field through

Central Command: We need more jammers for a specific reason,

which might require some research and development. The same

brigade commander requests something that is already on the line,

conventional Humvees.

Trace those two requests, one that might require some research

and development, though urgent, and the other something that is

readily available. Trace that request from that brigade commander

all the way through how it works through your office and how it

gets back to that brigade commander.

Secretary ENGLAND. I would say it doesn’t go through my office.

I am happy to say it is not that bureaucratic. If they need vehicles,

Army will directly respond. If they need Humvees, Army will pull

those Humvees from wherever they have them, either in stock or

somewhere in the states or another command, and they will provide those directly. So they will respond directly.

[The information referred to can be found in the Appendix beginning on page 87.]

The CHAIRMAN. So that goes to the Central Command, obviously.

Secretary ENGLAND. Pardon me?

The CHAIRMAN. That will go to the Central Command, someone

in the Central Command, and then——

Secretary ENGLAND. Well, it gets shipped directly overseas, so

Central Command will validate, and then it gets shipped to theater.

The CHAIRMAN. No, no, no. Where does that initial request go

from that brigade commander? To his division commander, I suppose.

Secretary ENGLAND. Yes, I am not sure where it goes. It eventually goes to Central Command to get validated.

The CHAIRMAN. All right, it is validated. Then where?

Secretary ENGLAND. It comes in to the Pentagon, and it

would——

The CHAIRMAN. Where in the Pentagon?

Secretary ENGLAND. It would come in to the Joint Chiefs, I believe. It would come into Joint Chiefs and then directly to the

Army, and the Army would respond by providing whatever vehicles

they had available to respond.

The CHAIRMAN. Why would it go to the Joint Chiefs? That is not

part of their statutory duty.

Secretary ENGLAND. Again, I believe that is where it would go.

I would have to verify that for you, but I would expect it would go

through the operations part of Joint Chiefs again just to make sure

it then goes to the right place in the Pentagon, the right organization to respond, because it would go into the military chain to ship

whatever equipment they have. I would expect that is the way that

would operate.

30

The CHAIRMAN. Let’s go to something that needs some research

and development. It is urgent—for instance, a jammer. The brigade

commander is saying we need a jammer that does such and such.

Secretary ENGLAND. So again, once it is a valid, it would go directly to—we have a very special office dealing with IEDs, and it

would go to that office. And they look at the whole broad spectrum

of jammers and equipment and whole classified areas.

The CHAIRMAN. Now is this General Montgomery Meigs’ office?

Secretary ENGLAND. Yes, it would. Yes, sir.

The CHAIRMAN. Okay. Keep going.

Secretary ENGLAND. And then he would see what is available or

modify.

And again, he has funding and he has authority to do what is

necessary to respond to that request, so he would immediately just

start working that. He can do that with industry or with the services or——

The CHAIRMAN. Okay. He gets to develop. Then what?

Secretary ENGLAND. It gets produced and sent to theater, so it

goes——

The CHAIRMAN. By way of——

Secretary ENGLAND. It goes through tests, and they have to validate it.

The CHAIRMAN. Assume all that is done.

Secretary ENGLAND. He does all that.

The CHAIRMAN. Assume all that is done and the brigade commander says, ‘‘Hey, where are my jammers?’’ Who takes it from

General Montgomery Meigs’ office? It is perfected.

Secretary ENGLAND. I believe they go to CENTCOM. They make

the decisions in terms of allocation, because they decide where it

is most needed in theater and what numbers and those sorts of decisions.

And that would be the same thing with vehicles. Maybe there are

conflicting needs. So they make that decision. The same with

MRAPs. They make those decisions in terms of where they are

most needed at that point in time.

The CHAIRMAN. But all of that takes, unfortunately, time. Am I

correct? Even in the case of needing some additional Humvees.

Secretary ENGLAND. Well, I believe that is all done really pretty

quickly. I don’t think that is a long timeline to do that. My general

feel of all this is that it is very responsive, Mr. Chairman.

If they need something that is available, they get that as quickly

as the need is known, and then it gets delivered to them. So certainly, there is some time lag. In the shipping and all that, it is

a long wait. But even then, equipment is flown in.

For example, we are flying MRAPs in today, a combination of

both air and sea, to get the most number in the shortest period of

time. So we fly in whatever we have to in quick reaction. Obviously, things that could be longer, we ship.

The CHAIRMAN. Thank you very much.

Mr. Hayes.

Mr. HAYES. Thank you, Mr. Chairman.

And distinguished panel, Secretary England, thank you for coming today.

Secretary ENGLAND. Mr. Hayes.

31

Mr. HAYES. I wanted to pick up on Mr. Wilson’s comments as to

the extremely great nature of your service. I couldn’t do much better than he did, so along those lines, I want to thank you as well,

and all members of the panel.

And, Mr. Brinkley, I want to thank you for a particularly

thoughtful and helpful description of the blending between military

and government and best business practices. That was very, very

helpful.

And picking up on your comments, I want to come back to Secretary England and frame my question about the Berry Amendment in that context. Mr. Secretary, you are very familiar with this

process.

And again, thank you to Mr. Brinkley.

DOD has the primary objective of protecting force, making sure

that our folks have everything they need. And that is absolutely

perfect.

At the same time, those of us on this side of the desk have obligations and responsibilities to our constituents, many of whom are

the defense industrial manufacturing base. Using these objectives

and blending our voices obviously gives us the best possible product

under tough circumstances.

And I want to compliment you and all of you for the incredible

improvement that I have seen in my nine years here in the acquisition process. We work very closely on a number of different issues.

General Dale and General Cross and many others have really been

fantastic. So don’t ever lose sight of those accomplishments and

what those men and women do for the folks in uniform.

I refer back in time a little bit to a meeting that I wish I had

known about and attended between the specialty metal folks and

the aerospace folks. And you, unfortunately, were the victim of

being in the middle. I wish I could have been there to referee.

Secretary ENGLAND. I wish I hadn’t been there. [Laughter.]

Mr. HAYES. I wish I had been there, because I would have either

set them both down or whatever. The point is they were talking

about each other and not about solving the problems that impact

our men and women in uniform.

With that context, it is absolutely imperative, and I think eminently possible, to blend our desires on both sides of that spectrum

and make the Berry Amendment work for our men and women in

uniform.

And I am pledging again publicly to you, had I been at that

meeting, I would have said, ‘‘Hold on here, ladies and gentlemen.

We are going to make this work, because that is the only reason

the Berry Amendment exists.’’

And more specifically, Mr. Krieg recently issued a blanket waiver

for fasteners. Maybe you needed them; maybe you didn’t. But if he

had said something to me and us here on the committee, we could

have possibly avoided getting poked in the eye with a sharp stick.

Looking forward, I want to make sure to the extent we can that

the benefits of Berry accrue to you and the department and all of

our men and women in uniform.

And at the same time, any problems that occur because of the

changes in theater, changes in the way we have to do business,

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tion upon regulation to clarify—which we have really modified; new

word for you—but that is my intention. That is our desire.

And if you would just comment back to me on what, from your

perspective, and Mr. Brinkley and also Mr. Patterson, how we can

better work with you so that all our objectives to the men and

women in uniform are met.

Sorry for the long dissertation, but thank you for being here.

Secretary ENGLAND. No, it is okay. This is a difficult issue.

My view of this is as long as people are reasonable and practical,

it all works very well. We support the Berry Amendment. We think

it is good for America. It is good for the military. It is not good

when taken to extreme.

And so people tend to take ‘‘limit case’’ and try to make this work

out in situations where it just does not apply. This just takes practical, reasonable people of good faith to work this out. And once in

a while, people are working it out in areas where there is just no

practical solution to this.

So I am not sure I know everything about the blanket waiver on

fasteners, but this is part of the issue in the past dealing with extraordinarily small parts and keeping track and knowing where the

sources of the metal came from and all of those things that became

extraordinarily burdensome to do, as opposed to the very large applications for titanium.

So as long as everybody is reasonable and practical, it works terrific. But when you get down to the minutiae and the whole expense of dealing with minutiae, then, of course, that is something

that we obviously can’t support. So you will find us in great support of the Berry Amendment, but not in the extreme case.

And we will work with you, Mr. Hayes, and I appreciate your instructive help and comments.

Mr. HAYES. Thank you very much, Mr. Chairman.

Minutiae don’t matter, and we are standing ready to help you

anytime.

Secretary ENGLAND. Thank you. Thank you.

The CHAIRMAN. Mr. Taylor.

Mr. TAYLOR. Thank you, Mr. Chairman.

And, Mr. Secretary, thank you for being here.

Secretary ENGLAND. Mr. Taylor.

Mr. TAYLOR. Mr. Secretary, I read your remarks and listened to

your remarks. And I guess as one Member of Congress, I wish we

could legislate a sense of urgency in your department. We saw it

first with SAPI plates. I distinctly remember——

Secretary ENGLAND. Pardon me. With what?

Mr. TAYLOR. SAPI plates, small arms protective inserts. I distinctly remember the Secretary early on saying not everyone needs

them, just the frontline troops. So as guardsmen and reservists

died needlessly, it eventually got fixed.

Then we saw with up-armored Humvees, ‘‘Not every vehicle

needs to be up-armored.’’ So as people died needlessly, it eventually

got fixed.

Jammers, I remember being told that when we went over in December of 2003 that our vehicles would have jammers, and I said,

‘‘Well, great. What about the troops?’’ ‘‘Oh, not every vehicle needs

them.’’ So people died needlessly.

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Now we see with MRAPs. It took a retired Army colonel in January of 2005 to come see me and say, ‘‘You know what? The South

Africans have been using this for 20 years. Why aren’t we using

it?’’

And so if there is some frustration from Mr. Abercrombie, myself

and others, it is that we apparently can’t legislate a sense of urgency within the bureaucracy over there to do the things that will

translate in saving people’s lives.

Let’s go back to the MRAP.

Secretary ENGLAND. Mr. Taylor, now, look, I have to disagree

with you.

Mr. TAYLOR. The request issue was $400 million for MRAPs. This

committee put in $4 billion, and then miraculously, that very day

when we passed it on the House floor, former Secretary Pete

Geren, former colleague, a friend, comes back and says, ‘‘Oh, did

we say $400 million? We meant $18 billion.’’

Well, heck, why didn’t he say that in January? And why didn’t

he work with us?

And that is exactly how that timeline went down. And so that

is the fourth example of people dying needlessly.

Secretary ENGLAND. I disagree, Mr. Taylor. I believe that is an

inappropriate comment, and I do not agree with that. People have

not died needlessly, and we have not left our people without equipment.

Mr. TAYLOR. Well, why did it take so long to get the up-armored

Humvees? Why did it take so long to get the jammers on every vehicle? Why did it——

Secretary ENGLAND. Pardon me. We have had six versions, I believe, of up-armored Humvees, so we have continuously adapted.

When you said every Humvee doesn’t have armor, every Humvee

outside the wire does——

Mr. TAYLOR. Now.

Secretary ENGLAND [continuing]. And did.

Mr. TAYLOR. We have been there since 2003.

Secretary ENGLAND. And did.

Listen, as the threat has evolved, we have evolved with the

threat. We have been upgrading Humvees. We went out and developed, I guess, a wide variety of jammers, depending on what the

threat is.

And the threat changes. It is an adaptable enemy. They are also

very, very smart. And we continue to adapt. This is not just a static operation. It is a continual upgrade modification change. It is

warfare. It is not just a constant out there. So we work very, very

hard to be responsive to our troops in the field.

Mr. TAYLOR. Again, at the beginning of this session and after

questions were asked in 2005—what are we doing about MRAPs,

what are we doing about we just described them as a V-shaped hull

vehicle—and it came back, ‘‘Well, not every vehicle needs that. We

just need a few.’’

So why does it take until the day that this committee passed the

$4 billion on the House floor for the Secretary of the Army to come

back and say, ‘‘You know what? I need $18 billion. I don’t need

$400 million.’’

34

You are telling me no one could see that coming? No one could

recognize that the bottom of the Humvee was acting to shape the

charge? That is why the gunner is being thrown around like a jack

in the box? That is why the kids inside are losing their lives?

Secretary ENGLAND. Mr. Taylor, I think we need to take this into

a more classified area. I don’t want to say it in a——

Mr. TAYLOR. I think that the enemy has figured that out, Mr.

England.

Secretary ENGLAND. I think that is too simplistic a description

and I think not appropriate for this discussion. I would be happy

to talk to you about MRAPs. I would be happy to talk to you about

the threats.

I will tell you this. There is a continuing evolution in terms of

equipment—there will continue to be—the numbers and types of

those vehicles still being discussed in terms of what the threat is

and how the threat is evolving. And that is a subject I would be

happy to have a whole separate afternoon or hour with you.

But I would not arrive at the conclusions you have arrived at,

not based on the data and the information I know. And I believe

it requires much more discussion than just sitting here in five minutes in an open committee hearing.

Mr. TAYLOR. Mr. Secretary, I am going to tell you—and I know

that you don’t enjoy this any more than I do—but I have been to

funerals and looked at moms and dads in the eye. And I usually

don’t have the guts to ask the mom or dad, so I ask an uncle or

an aunt. And the answer in many instances is they were not in an

armored Humvee. The answer in many instances is that they did

not have a jammer, once the word got back to me.

If it was good enough for the politicians when they ride around

Iraq in 2003, then it should have been good enough for the troops

in 2003. And if we knew about the need for up-armor by December

of 2003—because I remember my colleague Mr. Simmons and I,

who had just come back from trips about the same time, saying,

‘‘How come my unit had to go weld some stuff on? How long did

it take to fix that?’’—the answer was, sir—and I will provide testimony to you—that not every vehicle needs it.

Same mistake with the jammers. Same mistake with the uparmor. And you are making the same mistake now on MRAPs. You

are dragging your feet, and people are needlessly dying.

Secretary ENGLAND. That absolutely is categorically not the case.

That is not a correct statement, Mr. Taylor.

Mr. TAYLOR. What was the Administration’s request for MRAPs

this year in your Defense request? Do you want me to answer?

$400 million. How many are you going to buy with $400 million?

Secretary ENGLAND. And we had money also in the supplemental

last year for MRAPs, and we had money in the upgrade to the supplemental on MRAPs, and then we also asked for additional money

for MRAPs, and we are——

Mr. TAYLOR. And you wait till this summer to come back and

say, ‘‘No, we really need $18 billion.’’

Secretary ENGLAND. And the question is the effectiveness, and

that is something we should discuss off-line. Again, I believe this

is not the appropriate discussion to have sitting here in this hearVerDate 22-MAR-2001 08:36 Nov 21, 2008 Jkt 038835 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 C:\DOCS\110-63\177000.000 HNS1 PsN: HNS1
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ing, but I will be happy to meet with you and go through this in

great detail.

Mr. TAYLOR. I will meet with you at your convenience.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

I have Mr. Akin and Mr. Johnson, and then the ranking member

and I may have additional questions.

Mr. Akin.

Mr. AKIN. Thank you, Mr. Chairman.

I am on the Oversight Committee, and we just finished up the

study on the Iraqi security forces. And a bunch of us were sitting

around—Republicans, Democrats—kind of talking about that report, as we are finishing up on that.

And one of the things that kind of came forward was—I don’t

know that it is even really included in the report—but there was

a time when Bremer basically said we don’t want any of these

Baathists, the former military people that were military under

Saddam, we don’t want to adopt them as the new military people

in Iraq, so we are going to basically say the former Baathists and

these people are out of here.

And when Bremer made that decision, the effect in the Army

was all of a sudden, ‘‘Hey, we weren’t really planning this, but now

we have got to come up with hundreds of thousands of Iraqi security forces that we have got to find and train and build into an organization’’ in that the previous organization was pretty much let

go by someone who was not military.

The question is: Do we have a problem of jointness at the very

top in the case of Bremer being someone who is non-military versus

military people and getting their signals straight as to how are we

going to put together security forces for this new country, now that

we have won the war?

Is there sort of a jointness thing between—I don’t know if you

think of Bremer as State or not; I think he was kind of operating

independently—but is that a difficulty from an organizational point

of view?

And if you think my premises are wrong and the question, fire

away. I know you are not shy anyway, so——

Secretary ENGLAND. I am not shy, but frankly, I am just not familiar with the whole organization back at that time. That was just

not in my area, and I am just not familiar how those decisions

were made and who made those decisions. So I just can’t help you

there, sir. You are on a topic that is outside my knowledge.

Mr. AKIN. Do either one of the other gentlemen want to comment

on that kind of scenario and the question about the Iraqi military,

or is that sort of outside of where you——

Secretary ENGLAND. I don’t think anybody here at this table was

dealing with that issue back at the time of coalition provisional authority (CPA).

Mr. AKIN. Okay.

Then the other question I had was, Mr. Brinkley, my understanding is you have been involved with trying to get some of the

factories and different free enterprise and things going in Iraq.

Do you run into the same problem that we are finding everywhere, that the big problem seems to be finding, in maybe Nixon’s

36

term, ‘‘leadership-class people’’ or people that are educated, literate, that have some level of integrity that you can put in charge

of things? Is that a continuing problem that you are finding?

Mr. BRINKLEY. I will divide the three: educated, literate and——

Mr. AKIN. Integrity.

Mr. BRINKLEY [continuing]. Integrity. I will divide the three.

The lesson that we have learned is that everything from a business perspective in Iraq is local. There are no generalizations one

can apply to anything we found in factories in Iraq.

We have assessed in detail over 60 manufacturing operations: forensic detailed assessments of the capacity, their leadership teams,

their workforces, their customers, their suppliers. And in those

cases, generally speaking, to apply a generalization, the issues of

having a workforce in place, a talented management team, are not

a problem in terms of our ability to get those localized factories restarted.

The third category you mentioned is integrity, and that is something that has to be tested. I cannot comment on whether a particular factory manager is or is not corruptible or possesses integrity, but we have put processes in place so that, as we restart factory operations, every transaction that is executed is monitored in

detail in partnership with the Iraqi government to ensure that

there is nothing that takes place that would first and foremost put

our forces at risk, but also contribute to a longstanding culture that

was present there under the Baathist regime that encouraged corruption.

And so that would be my response.

Mr. AKIN. So you are saying you have no trouble finding leadership people to run the factories particularly.

Mr. BRINKLEY. I wouldn’t say ‘‘no trouble.’’ There are cases, especially in areas of Baghdad, the Diyala province, parts of Al-Anbar

where unrest is greatest, where we have seen a brain drain and

people have fled areas of violence.

But in the south and the north and even parts of Al-Anbar that

have seen stabilization, surprisingly, one finds factories and

workforces that are waiting to go back to work. And so those represent opportunities for us to go in and provide a sense of normalcy

to a population that hasn’t experienced a lot of normalcy in recent

times. And we are going to take advantage of that.

Mr. AKIN. Thank you.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

Mr. Johnson.

Mr. JOHNSON. Thank you, Mr. Chairman.

Mr. Chairman, I must apologize because I came in late to this

hearing, though I did read the information before I came. But it all

benefits to be here and listen to the full testimony and the dialogue

between congressmen and the witnesses.

And I do appreciate the witnesses being here.

I wish to associate myself with the comments and questions that

I have heard from Mr. Taylor, Mr. Abercrombie, and Chairman

Skelton.

I will say, though, that I do recognize that the problems at the

Department of Defense in terms of the inefficiency of the processes

37

there began long before you gentlemen arrived. And you all are

part of the apparatus to help streamline the business systems and

the financial systems, and it is a very extremely complicated task.

I am not even in the position as a six-month member to ask an

intelligent question about this issue, so I will decline to ask any

questions, but I do appreciate the fact that Congress is exercising

oversight.

And since we are talking about the lives of human beings who

are in theater, it makes it all the more important that we do the

streamlining with all deliberate speed so that some of the issues

that have been highlighted by Mr. Taylor, Mr. Abercrombie, and

Chairman Skelton are not allowed to continue.

And so I will end my comments with that, even though being a

lawyer, it pains me to not have a question to be able to ask. Thank

you.

The CHAIRMAN. I thank the gentleman.

I have one question. Before I ask you this, does Mr. Hunter have

an additional question?

Mr. HUNTER. No, Mr. Chairman.

I think I would like to pursue, Gordon, when we get a chance

here, this handoff of the equipment, the transfer of equipment from

our forces to Iraqi forces that I talked about early in the opening

statement. So I know you are going to get back with us on that.

I think that is kind of the order of the day, and that is percolating right now as a main—it is a long pole in the tent on this handover. So I have been briefing myself up after we talked initially.

It is largely a State Department function because of foreign military sales, but I think we need to have a little prayer meeting with

State, with you and with our warfighters and figure out how we

are going to get this thing done quickly.

Secretary ENGLAND. Can I interrupt just a second and ask my

staff a question here?

Okay. We have passed that on after your comments, so people

are working that right now, Mr. Hunter, and I just want to make

sure we actually had somebody working it when you brought that

up earlier. And so we will respond to you just as quickly as we can

on that subject.

Mr. HUNTER. Okay. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

Let’s look at each of the separate services, if we may. My question is: Who fulfills the chief management officer duties of each of

the services? Or, subject to your answer, should Congress designate

someone, such as an Under Secretary of each service?

Secretary ENGLAND. Mr. Chairman, I would strongly recommend

not designating a chief management officer in the service. That is

the job of the Secretary of the service departments.

For the service secretaries, that is their responsibility, and then

they may choose to delegate that either to an Under Secretary or

their Assistant Secretaries. Their Assistant Secretaries, frankly,

are typically the experts, like their Financial Assistant Secretary

for finance, for installation, for acquisition. And I would not put

that in the Under Secretary.

38

I believe you would dramatically weaken the Service Secretary if

you said it had to be in the Under Secretary. I would leave that,

frankly, to the discretion of each service Secretary to decide how

to do that, based again on his team of both Under Secretary and

Assistant Secretary.

The CHAIRMAN. And let the buck stop with him or with her, whoever the case may be me.

Secretary ENGLAND. And I will tell you, I definitely want to be

able to talk to the Service Secretary, not the under, for issues in

the Department. So I would leave that at the service Secretary, Mr.

Chairman.

The CHAIRMAN. I appreciate it.

Well, gentlemen, thank you for coming. We have met your deadline, you will notice. You have not turned to pumpkins. So we do

thank you very, very much.

Secretary ENGLAND. And, Mr. Chairman, there is some feedback

we said we would provide people with questions today. We will do

that promptly. And again, thanks for the opportunity to comment.

Thank you.

The CHAIRMAN. Appreciate it. Thank you.

[Whereupon, at 12:08 p.m., the subcommittee was adjourned.]

A P P E N D I X

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QUESTIONS AND ANSWERS SUBMITTED FOR THE

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QUESTIONS SUBMITTED BY MR. SKELTON

The CHAIRMAN. A brigade commander sends a request in from the field through

Central Command: We need more jammers for a specific reason, which might require some research and development. The same brigade commander requests something that is already on the line, conventional Humvees.

Trace those two requests, one that might require some research and development,

though urgent, and the other something that is readily available. Trace that request

from that brigade commander all the way through how it works through your office

and how it gets back to that brigade commander.

Trace request for readily available equipment:

Secretary ENGLAND. The brigade unit requirement for equipment or supplies is ordered by placing a requisition through the supply (supplies) and property book

(Major pieces of equipment such as HMMWVs) automated systems. The unit’s table

of organization and equipment determines which equipment is authorized and the

designated force activity (type of unit priority rating) and the urgency of need designation determine the speed by which the requisition is filled by the supply system

(brigade supply system for stocked items) or wholesale system (for items nonstocked by the brigade or in short supply).

Stockage levels and criteria for supplies are determined by the number of demands placed within a given number of days or by the economic order quantity type

calculation. There are supply support activities within the brigade designed to receive, store, and issue supplies for the brigade and ordered by units and battalions

within the brigade.

Urgent trace request requiring research and development:

Combatant commanders submit Joint Urgent Operational Needs (JUONs) to the

Joint Staff (J–8), Deputy Director for Resources and Acquisition (DDRA). The DDRA

validates all JUONs and forwards them to the Office of the Secretary of Defense,

Joint Rapid Acquisition Cell (JRAC), which in turn, identifies potential solutions

suitable for JUON resolution.

The Fiscal Year 2003 National Defense Authorization Act (Section 806, Rapid Acquisition and Deployment Procedures) directed that a process be established to

streamline communications between the Chairman of the Joint Chiefs of Staff, acquisition community, and research and development community to include:

a) A process for the commanders of the combatant commands and the

Joint Chiefs of Staff to communicate their needs to the acquisition and

research and development community and

b) A process for the acquisition and research and development community

to propose items that meet the needs communicated by the combatant

commands and Joint Chiefs of Staff

The Joint Rapid Acquisition Cell (JRAC) provides an effective means of quickly

responding to the needs of the combatant commander while coordinating efforts between the acquisition and research and development communities.

QUESTIONS SUBMITTED BY MR. HUNTER

Mr. HUNTER. Number one, ascertaining what we have over there? What is available? Are there some trucks that are parked in Kuwait or in Iraq that could be

transferred over?

Number two, what is the present bureaucratic circuit for getting that done? Does

that have to be ID’ed by the acquisition bureaucracy back here in the States and

then implemented, a transfer has to be made pursuant to a foreign arms sale?

Can a leader, for example, a divisional leader or General Odierno or General

Petraeus say, ‘‘Hey, we have got this stuff parked over there. You guys in our Iraqi

counterparts over here need them. Go get it?’’ Or is it a fairly complex circuit that

has to be followed to be able to make that handoff of equipment?

Because that appears to me to be something that is crucial right now to

warfighting success in those two theaters. And I would say one indicia of an effecVerDate 22-MAR-2001 08:36 Nov 21, 2008 Jkt 038835 PO 00000 Frm 00091 Fmt 6601 Sfmt 6621 C:\DOCS\110-63\177000.000 HNS1 PsN: HNS1
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tive system is one that can move quickly to do what you have to do in the

warfighting theaters.

So what do you think? Is this something that can be handled easily or is it pretty

complex and pretty burdensome?

Secretary ENGLAND. [See below.]

USCENTCOM property accountability and visibility procedures:

Property accountability and visibility in USCENTCOM is managed using the

Standard Army Management Information Systems (STAMIS). Some examples of

STAMIS systems are: Standard Army Retail Supply System (SARSS), the Standard

Army Maintenance System (SAMS), Property Book Unit Supply Enhanced (PBUSE),

the Logistics Support Agency (LOGSA), Logistics Information Warehouse (LIW), and

Integrated Logistics Analyst Program (ILAP). These Web-based and interanet-linked

systems provide worldwide Total Asset Visibility (TAV) and real-time data that enables logisticians to expedite processing and coordination of support to the

warfighter. Currently, there is not a single system of record for managing and providing accountability and asset visibility across all branches of the United States

Armed Services.

How is excess military property transferred to the Iraq Security Forces?

Excess property in Iraq is identified based on the operational needs of the

warfighting units. Property identified by unit commanders as excess to their mission

requirements is reported electronically through the chain of command via the

Standard Army Management Information System (STAMIS) to the Multi-National

Corps-Iraq (MNC–I) C4 logistics directorate. The MNC–IC4 satisfies unfilled equipment requirements across the MNC–I area of responsibility, then validates the remaining items as excess. The excess items are reported to the Army Central Command (ARCENT) for redistribution throughout the theater. The remaining items are

validated as excess and then given disposition instructions by ARCENT. If the

equipment is not needed for American forces, the property is categorized as Foreign

Excess Personal Property (FEPP).

FEPP is defined as a US owned excess personal property located outside of the

United States, American Samoa, Guam, Puerto Rico, Trust Territory of the Pacific

Island, and the Virgin Islands. Selected FEPP is made available for transfer to the

Iraqi Security Forces (ISF) based on property characteristics, service disposition instructions, redistribution/open purchase requirements, demilitarization (DEMIL) requirements, host-nation acceptance, and statutory authority. The authority to

tranfer FEPP to the ISF has been delegated by the Deputy Under Secretary of Defense (Logistics & Material Readiness) to the Commander, MNF–I, and to the Deputy Chief of Staff for Resources and Sustainment. Current transfer authority allows

for a maximum transfer of up to $5 million (acquisition value) of total FEPP per

Forward Operating Base (FOB), up to a maximum of 79 FOBs.

QUESTIONS SUBMITTED BY MR. COOPER

Mr. COOPER. Mr. Secretary, for many of us on the committee, the issues are like

swimming in molasses: it is slow and sometimes painful work. But in response to

Mr. Bartlett’s very helpful suggestion, I thought perhaps we could start with your

statement that you have discovered 219 different regulations that apply to flag officers. If you wouldn’t mind supplying that to the committee, perhaps we could start

with that list and whittle it down, perhaps get rid of some of the unnecessary rules.

Secretary ENGLAND. [The information referred to was not available at the time

of printing.]

QUESTIONS SUBMITTED BY MR. KLINE

Mr. KLINE. A couple of comments. You talked, as Mr. Thornberry said, about

fewer and simpler regulations and more flexibility. And I think it is clear that we

need that.

But I want to go back to what Mr. Hunter was talking about, about the rapid

acquisition authority that the Secretary has and how few times it has been used.

He said twice. It was zero for a very long time, and frankly, I thought it was just

one having to do with IED defense. So two is a terrific increase over what I thought.

But I am shocked——

Secretary ENGLAND. The Department employs a broad toolkit to rapidly acquire

items necessary to meet urgent warfighter needs. Each Service has rapid acquisition

authorities that are used frequently to meet the majority of urgent warfighter

needs. Additionally, the Department has established two organizations to meet urVerDate 22-MAR-2001 08:36 Nov 21, 2008 Jkt 038835 PO 00000 Frm 00092 Fmt 6601 Sfmt 6621 C:\DOCS\110-63\177000.000 HNS1 PsN: HNS1
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gent needs that are of an inherently joint nature: the Joint Improvised Explosive

Device Defeat Organization (JIEDDO) and the Joint Rapid Acquisition Cell (JRAC).

When the Department is notified by a Combatant Commander of an urgent need,

it seeks to use the best and fastest possible method to respond. Most often, these

needs are met directly by the individual Military Services. When an urgent need

is identified as a joint requirement, the JRAC or JIEDDO provide support by validating the requirement and facilitating the transfer of funding to a Service Procurement Activity to meet the need.

Congress provided the Department additional Rapid Acquisition Authority (RAA)

in Section 806(c) of the FY 2003 NDAA (P.L. 107-314), as amended by Section 811

of the FY 2005 NDAA (P.L. 108-375). This authority compliments the existing rapid

acquisition authorities of the Department of facilitating additional waiver authorities when required.

At any point throughout the rapid acquisition process, whether through a Service

or through the JRAC or JIEDDO, the Department may initiate the use of the RAA

if it is necessary to meet the fastest-possible fulfillment of an urgent warfighter

need. However, when RAA is not required to meet an urgent need, the Department

will reserve the use of the authority for swift acquisition needs that cannot be resolved within existing processes.

Between September 2004 and May 2007, the JRAC expedited 25 projects worth

$343.1 million. $322.6 million has come from Congress through the Iraq Freedom

Fund and $20.5 million has come from directed Service funding. RAA has been used

twice—once in April 2005 for Scorpion Jammers and once in June 2006 for Quick

Reaction Dismounted Systems. For all other JRAC projects—and for the other Service and JIEDDO projects—rapid acquisition and fielding were possible without invoking specific RAA.

Current acquisition authorities allow the Department to procure equipment and

services essential to meet urgent warfighter needs rapidly, including waiving certain

competition and testing requirements, when necessary. In cases where a statute or

regulation impedes established rapid acquisition methods, the Secretary of Defense

may use RAA to expedite the rapid acquisition process. He may, however, only do

so for acquisitions of urgent equipment needs that have resulted in combat fatalities.

RAA serves as a failsafe in the event that rapid acquisition initiatives run into

any problems the law was intended to overcome. They complement existing rapid

impediments to rapid fielding. The Department appreciates the support of Congress

in providing a broad range of tools to facilitate the rapid acquisition of vital

warfighter needs.

Æ