Owner of the company. I dont really know how many are left. The lastplace oil company said it price of gasoline is at the wholesale distribution point, which is known as the rack. I could go on for an hour about this. When the market goes down they move those prices down. It is too competitive at the wholesale level. You cant have too high a price because people will run away. If i am the owner of the station im going to keep my price up as long as i can. They are out of that business. The exxon station, the price of gasoline is set by the owner of the station, who has a congrats has a contractual agreement. Of times pere heat day of the market is volatile. Host you can check it out online. Always appreciate your expertise. Is going to be our show this morning on the washington journal. Take you live to the Brookings Institution where it held discussion is getting underway on Defense Technology topics include robotics and 3d printing. That is beginning now here on cspan. Weve got a wonderful event here today, talking about Defense Technology. Number ofd to have a members of our National Security industrialbased working group from a number of americas greatest companies thinking about Technology Innovation across defense and nondefense sect is. The panelists represent companies that have been part of our group in an important way for a number of years. Im going to see a brief word of introduction about the topics. Trying to look at a few specific areas of Defense Technology and innovation. A lot of you have heard about the one we are going to begin with, 3d printing. We are also going to talk about propulsion technologies, which are a longstanding interest of the u. S. Military and an oldfashioned area of technology. And yet one of rapid and ongoing innovation. And we are going to talk about software and the way Electronic Systems and other kind of systems that have a heavy electronic and i. T. Component has to be thought about day, has to be improved. All of this relates to big themes. To what extent is technology need to so fast that we emphasize pursuit of the revolution of military affairs, perhaps even more than we have been. To what extent do we need to make sure adversaries dont do it first . A lot of exciting and important things are happening. We dont need to get overly excited or disruptive about our allegations. This relates to the debate about sequestration or the defense budget. Someis going to happen to of the innovations we are trying to facilitate or promote if congress does return in a few weeks . It cant figure out a way to stave off this looming budgetary showdown and the possibility of thingser, which these dont look all that horrible to the average observer, because it typically involves a percent of the defense budget. Whether we get to those topics or not, we hope we will raise them in the discussion period. Ask the panelists about areas of general technology before we go to your questions. Sitting immediately next to me. S Brandon Hogan she is going to lead off our discussion on 3d printing. I will ask her to say little bit more to explain what this area of technology is. An area being touted as a remarkable important area of innovation that could change everything. We could produce technologies and manufactured technologies in ways different than ever before. To what extent that is partly hype . To what extent that is real . She will help us understand. As jim joyce, who will speak immediately after her. He has helped a great deal with department of defense. This is not future talk we are going to do. We are trying to think of what the dod can do in the short to medium term. Another outstanding defense company. He will talk about software and information technology. He will be the electronics guide. I will be looking to him to help explain how to define areas of innovation, what part of the Defense Sector he is most focused on. Jimmy to my far right. We will talk about engine and proposed technology. We will also {harbor have a chance to say a to talk about whatever he thinks is to be done. America still enjoys Defense Technology. That is the general framing. Thank you for your indulgence. I would like to begin with brennan. To help us understand what realistic prospects are in the short to mediate term for the department of defense. M i appreciate all the baseball analogies, im sure we can keep those going. I appreciate all the baseball analogies, im sure we can keep this going. There have been numerous organizations that have been using it. Have gone toou build sand castles at the beach echo a few of you. You can build a sand castle two ways, you can fill up the bucket with sand and put it down. You can put sand and water into a bucket and slowly drip it. Layer by layer. At the end you have two castles. Similar in structure but different makeups. That is what added manufacturing is. The old way of making a sand castle and new way. Dod and theirthe supposed and there supply chain. Just because a new technology can provide a service doesnt mean it necessarily should. We are trying to help the department of defense understand what are the implications of applying this technology. It is not just make sure you have the machines to print the material or actual part. It is not just making sure you have the material that is chemically able to produce the part and make it the strength and heat in to see you need. What are the standards you need to apply echo how are you going to test these parts . Do you test some of them . All of them . What are the implications of turning this on its head . You have the parts that are manufactured and then they go on to a piece of machinery. Started has already deploying the technology. Does that work . What are the skills you need in the workforce that is doing that in the field . Another key area is the security piece of it. The department of defense does not own all the data. What is the conversion process . Is it worth it . Is someone else in between and how does the all fit together . If you have all that data out there that can produce critical parts or pieces of machinery, how do you secure that so doesnt fall into the wrong hands . That is what we are doing and looking at and how we are tried to help the Department Think through the application of the technology, whether or not it is disruptive and effective. Michael let me ask you a quick question that will be a segue. Nto jim we are going to try to connect some of these Innovative Technology areas. Dodme ask how much of the legit to be listed lee wind up in the manufacturing realm by 2020 . Well know the procurement budget is about 100 billion per year. The Research Development budget is around 70 billion. Operations ande maintenance budget involved with spare parts and other things that do involve purchases of hardware. That may be another 30 billion. Is manufacturing so revolutionary we are going to see tens of billions of dollars of dod acquisition produced throughout the next few years . Is it more moderate and incremental . Brennan i will not venture to guess a number. I think the most effective way of applying technology would be in a modest incremental way. They supply all of the parts to the services. Hundreds of thousands of parts every day. Some of those are high in demand. You may need to replace the part every 10 or 15 years. Mayoriginal manufacturer not have the coin to create that part. There is the need for the potential use of added manufacturing. This is a project we are actually working on now. Evaluating which parts can be and still actually have the same functionality they originally had. Is the demand signal appropriate . And then do you have the data . Then do you have the type of to getl and 3d process the parts you need at the end . I think our recommendation is it is a modest incremental and more of a 15 year time frame. There are significant parts you can potentially print if you go through the process of evaluating the application of it. With with ongoing one article in question in my mind, how big of a deal is . Was going to happen in the next 10 to 20 years . Jim i would qualify my qualifications by saying a couple of things to bear in mind, the next hot toy of christmas is going to be added manufacturing. Of theocratization ability to manufacture inks, the breaking of the tyranny of scale of Capital Machinery and people will be the basis of the profound revolution. Cheap robotic Information Technologies could break this scale. What set hurled do we have to get over in added manufacturing before we can unlock this logistical revolution . It is really part certification. Can i replicate that process and results on another machine . Can i predict what the finite attributes and functional characters of that part of our . Code youcrack that unleash this technology. Held is because it is a cost saver. It transfers resources from the tail to the team. The Industrial Revolution essentially tethered units to an Industrial Base. Pretty significant supply chains, roads, etc. PreIndustrial Revolution, you look at the way it should operate in the napoleonic navy. At a sense they could stay at picking uptely, material and modifying the ship. When a new captain took over a ship the first thing they did was talk to the carpenter to try to get more speed out of it. Dot manufacturing starts to is it breaks the tether to a heavy Industrial Base. They have a certain envelope of capabilities to manufacture and repair things. It greatly increases that you are, because working with more and more material than you have fabricated imparts. The revolution comes when you results of the added manufacturing on a repetitive basis. It comes because of the logistical pressure. You are likely to see innovation going on in the wave used to be done. With added manufacturing, many of the units will do away with it. They have come up with a number. F innovations field hospitals, unique meant to treat unique wounds. Clamps and surgical guides to take care of those as well. You have this logistical component to it, you have this there isn component this notion of hacker. I have been around for a while. Can warmer being or putting pistol grips on them. Not only a much wider capability , butnufacturing options also social media and communication can be spread a lot more quickly. Michael you emphasized in a very vivid and helpful way the benefit for expeditionary units of added manufacturing. Are we going to see traditional manufacturers at home move in or is that whole set of changes going to be more gradual and benefit to the expeditionary units . Jim i think the changes going to be more gradual. Contrary to a lot of manufacturers calculus in their own economics. You are going to see the rise of individuals and companies that are beginning with obsolete and frankly going into the mainstream parts as we start to sort out what protected. Manufacturing becomes a commodity where folks can just get in. They dont need as much money. They can set up a capable machine shop and manufacture things with very large defense companies. I see that as a result of political pressures. Michael i know youre going to now bring to the discussion a little different area of technology. Brennan have been talking about how added manufacturing is a broader set of changes. Maybe you can help connect what you are going to talk about to what we have been discussing. I know you have the whole a data of Software World and subject matter to address. Please help us to understand that and how you see the opportunities Going Forward. The motivations for these Cognitive Software systems share a similar inspiration. The water cycle times. Capability. Ide we were able to work through acquisitions. Our adversaries are increasing to commercial technologies. They are moving away from exquisite Hardware Solutions and. Riving we are doing similar kinds of things. If you look at Radio Systems or Electronic Warfare systems, we are getting digital. We are also investing in modular architectures. That is only going to get us so far. Youre getting to the point where we are fueling capabilities that are going to run up against environments that are ill characterized at the time of design. The thought is the architect that draws from a cognitive kind of analogy here, they have the ability to send environment. If you were to take a radio 20 years ago and crack the list, you find and there is circuits, he were to look at the stateoftheart radios today most of the functionality they provide lives in the software. We have the ability to upgrade them overtime very quickly. When we put one of those out in the field and get exposed to some interference we didnt anticipate, the desire of cognitive learning is to figure out mitigation strategies in real time. Explore options within the trade to configure in different ways and be able to mitigate that interference, whether it is just environmental interference. And to learn over time which approaches actually work. This falls broadly under the and some ofautonomy the key areas for investment that the dod is pursuing. The radio example is one example that is real. The idea is we can come to the system that is inherently adaptable. Adaptation we see occurring in the software face. You can build systems that characterize the environment. You can think about taking that same design pattern and ask is the limiting factor in algorithm or configuration . If it is the limiting factor then we can look to things like anufacturing, the prototype alternative that we can then integrate into the system and allow the cognitive process and exploit a more tailored version of that. Michael this is a large fraction of dod systems. Im not trying to simplify by using the amount of dollars at stake is one of my metrics from the conversation. It sounds like you are talking about the wide array of systems that they manufacture. It is in the realm of discussion here. Content nt of there is no magic bullet in the sense that you inherit other how do youallenges, make sure the systems are adapting in the field and provide the kind of performance you want. There are some issues that need to be resolved in the performance, those kinds of things. We are in an environment where our adversaries are able to increase their cycle times or decrease very quickly. Michael one more question that occurs to me, the difficulty of writing good software. You are talking about a partial response or solution to that in it sounds like youre talking about an ability to modify and adapt and therefore not be locked into the system you started with. It can also be beneficial if you made mistakes in the original incarnation. If there were some other problems that we could fix more easily as we discover in the field. Very complex systems would have to be implemented. I dont see this as a technology that is going to make our software better. There is a challenge associated with how often we characterize the objectives or desired performance. That is locked down in a fairly rigid kind of way. I do see this as having the broader ability to a data environments we couldnt have anticipated. You folks know as much about engines as anybody. If i could turn that over to you. It builds on what we heard already. As an engine manufacturer we use things Like Software and work on how we improve software and make it more adaptive to we look at technics like Additive Manufacturing and how we can they jet engines faster. Day we alsof the see this adaptability roll up at a higher level. What we are looking at his 2012. The dod released a very new and different Defense Strategy that called for a smaller more agile and even as we are transitioning to the third offset strategy, we see very consistent scenes there as the department tries to get more and more out of the systems advice and seals. We are seeing the same thing and propulsion, and jet engines for aviation. That is important. If you follow along, i do jet engines because i love the thrill of the roar when the jet engine goes. It is a bedrock of our National Military strategy. It is part of how we do power projection around the world. Aviation has advanced tremendously over the years. Every really significant breakthrough we have had an aviation, especially in tactical military aviation, has been built upon and advancement and propulsion technology. Right now, we are on the cusp of another breakthrough with the introduction of adaptive engines. What do i mean by adaptive engines . Let me give you an analogy. It is a timely analogy. If you watched the tour de france, you watched cyclists from around the world trying to negotiate a 3300 kilometer course across france. Widely varied terrain, sometimes it is fast, sometimes it is hilly, sometimes it is plain old mounds. All of these guys have the same goal to get there first. To get there first, they have to be efficient. They have to sustain themselves and their bikes, 3300 kilometers. How do they do that . Ears on theire bicycles. They change the gears. They optimize the performance of to adapt to whatever the terrain offers on the course. That is how they make it work. They do it to a level that we cant, but that is a different discussion. We are trying to effectively do the same thing in jet engines. We are partnered with the air force on a Major Program called p, Adaptive Technology program. You have a string that goes through the center of the engine produces a little thrust. Its primary focus is to power the rest of the engine. Then you have bypassed. That is what produces thrust. When you design an engine, it is a single point design. You ask, what is the most stressing requirement i need to meet . You make sure it can be that. Everywhere else, you take a penalty, usually in efficiency. It means payload, fuelburning. What we are doing in this adaptive Engine Program is introducing a third stream of air that we can modulate. By modulating it, i can adapt or optimize my performance no matter what the flight conditions are