Transcripts For CSPAN2 Defense Acquisition Management 20171

Senate Armed Services Committee Meets today to receive testimony on the department of defense acquisition Reform Efforts and we welcome our witnesses, ellen lord undersecretary for acquisition, technology, and logistics. Mark esper, secretary the army. Heather wilson, secretary the air force and james geurts assistant secretary of the navy for acquisition, technology, and logistics acquisition reform is one of the most important and frustrating topics committee addresses. Four years we have been warned that america is losing its technological advantage. I hope you have seen the work on the topic. Thats why the department of defense needs acquisition reform not just for efficiency or to save money, simply put we will not be able to address threats facing this nation with the system of organized irresponsibility that the defense acquisition enterprise has become. I went to witnesses to pay attention. We are still dealing with a trillion dollar after 35 program that continues to operate in dysfunction. The air force still subsidizes you allay for space launch with the costplus fixed fee contract. Of the army is nearly 6. 5 billion and that worked the navys lcs program is delayed. The costs are now 6 billion and rising in many of the key capabilities remain on the proven. Thats why this committee enacted the most sweeping acquisition reforms in a generation in the last two National Defense authorization act and yet despite that legislation and in the face of our eroding military vantage the department has been unable or unwilling to change. While the Previous Administration offered rhetoric about reform, this committee was disappointed we saw no meaningful action. I remain deeply concerned about the state of acquisition system and im encouraged by the early science from your team. It appears you are beginning to make progress. Let me remind you of our expectations. First, the office of the secretary of defense needs to let the Services Manage their programs. Congress has returned significant authority to the services, but we will watch closely to make sure you can use that authority wisely while we have empowered the services, that doesnt mean you can do whatever you like. The Services Much let osd search strategy and policy into oversight. That means being transparent providing data to and following the guidance set by osd. This Committee Takes its own oversight role seriously and we will rely and you to keep us informed so we can do our job. Third, the system must move faster. Time is of the essence. A work of groups like the Strategic Capabilities Office and the rapid Capabilities Office should become standard practice, not workarounds to the regular system and we need these innovations for major defense Acquisition Programs, not just science and technology efforts. Forthcoming you need to be willing to take more risk and be willing to fail when you try new things. We recognize congress can make that difficults. Keep us informed of your plan so we can Work Together so we are not surprised when things dont go exactly as planned. We would rather have a small failure that teaches us something early in the acquisition process then deal with a multibilliondollar program that becomes quote too big to fail. This, invest in Acquisition Workforce and empower them to succeed are too often we hear acquisition personnel are unfamiliar with more nervous about new authorities and finally inform your organizations and Business Practices to simplify and move faster. Major changes we have instituted through legislation are intended to give you the opportunity to make them more detailed changes in your organizations. This is an opportunity to update your organizational structures and internal processes accordingly. Along those lines if you fail i would much rather you try to fail then knew nothing and if you keep in contact with us and tell us what you are trying to do we will be patient for about five minutes. Finally, inform your organizations and businesses practice to simple by move faster. Major changes weve instituted through legislation are intended to give the opportunity to make more detailed changes in your organizations. This is an opportunity to fail. This is an opportunity to update your organizational structures and in art processes accordingly. You have reforms and you want to try them, come and see us and we will be glad to cooperate with you. Dont be afraid to fail because because the only way we will succeed is to take the risk of failure. Congress is provided you with all of the tools you require. We expect you as part of a new administration to use these tools unlike your predecessors. As you do so, you will have a willing partner in this committee. Do not hesitate to pick up the phone or come over and see any members of this committee we have given our subcommittee chairs a great deal of latitude and great deal of authority as we go through the decisionmaking process. Do not hesitate to call any of them with the exception of senator reed and franken. Finally, i believe and i will be glad we will be glad to hear your requirements and how we can help you do your business better anymore efficient fashion. We expect you as part of the new administration, as i said, you will have a willing partner in this committee. Look, we had a briefing from the rand study that i think my friend jack a reid would agree is one of the more disturbing reasons we have had in the years ive been a member of this committee. Gap is closing. Theres no doubt about it we will be expecting a lot of you, but we will not succeed unless we have a partnership here. Thank you. Thank you mr. Chairman and thank you for holding the theory hearing. I want to think the witnesses also for appearing today and we look forward to your testimony. We have a shared goal to ensure our military forces are equipped with the best technology and that those systems are the most effective and efficient ways possible to protect the nation and the many women in our armed forces. We also have a shared told the pentagon should be able to access the most innovative people in Technology Available from the best Small Company Defense Industry and also we open to them to ensure we are buying things at reasonable prices and within reasonable budgets. This will give us a chance to learn how the department is working to make those shared goals a reality. The services it should play a role in the research in Acquisition Program provided advanced system and capability to our Combatant Commanders. Congress has straight and the role in planning requirement of the review process that strongly shapes whether our Acquisition Programs is succeed or fail. These responsibilities are in addition to the Role Services have always played in development of their budget ensuring programs are appropriate prioritize and funded especially in difficult budgetary environment and finally the Services Play a critical part to personnel who work in acquisition requirement and budget fields peered too often we forget about those individuals and necessity to prolong their careers. Building on the successes of the Weapon System acquisition reform acts and making use particularly of the new reforms in the recent authorization act, we see some improvement in acquisition process now come today and are well positioned to make more improvements, but we should do better and thats why you are here today. Are look forward to seeing how the Services Plan to use their authority in the book to their responsibilities and also welcome a discussion of further changes that can be made to strengthen their role as appropriate in the hopes of continued to improve outcomes. Thinks again to the witnesses and the chairman and i look forward to the testimony. Thank you. I would like to same how much i appreciate the partnership that i have with senator reed despite his educational lackey lacking, but we are partners in the fact that the defense bill was pastor this Committee Without a single dissenting about his ample testimony to the bipartisanship that characterizes our conduct of this committee and im very proud to have senator reed as a partner. We will begin with the honorable alan lord undersecretary for acquisition, technology, and logistics. Chairman, could mention one thing . We may have depending on what happens here there is going to be an event at 11 45 a. M. On the floor of the senates and we may have to recess until that events is completed. Go ahead, please. Thank you. Thank you for the opportunity to testify today on defense acquisition and Reform Efforts. Im pleased to be joined by secretary mark esper, secretary wilson and assistant secretary james geurts. After spending 33 years the industry i have come to my position during a. Back in time which provides a great opportunity to make a positive change. Purse, the National Defense authorization act for fiscal year 2016 and 17 have a provided the direction and a tools for the department to advance the capabilities required to restore our overmatch, speed the rate at which we feel these advance capabilities and improve the overall affordability of our fighting forces Weapon Systems. Secondly secretary mattis has placed a priority on implementing these provisions alongside other Department Wide reforms and practices required to improve the readiness of our military. Using an industrious analogy, i believe the osc should function as a corporate office, very lean enabling the services as businesses to execute programs they are responsible for. A p l should push the majority of the departments work back to the services and focusing on prototyping and experimentation when developing architectures in standards interpreting law and policy and procedures and simplifying acquisition processes to quickly and costeffectively provide material and services to the war fighter. Stating it plainly, a p l needs to be the strategic body with focus across the board driving affordability and accountability , reducing timelines and equipping the services to execute their program. Given the fact that dod average award daily, 1800 contracts and 36000 delivery and task orders every process improvement we make has the potential to produce significant results. Having reviewed the lead time following validation of a wartime requirement until the award of the resulting major Weapon System contract have concluded we have the ability to reduce this time by as much as 50 incentivizing contractors to submit responsive proposals and 60 days or less in implementing Department Wide streamlining tools. Furthermore, Congress Gave us the ability to conduct 10 pilot programs, permitting the reduction of cost and pricing data for Foreign Military sales. Key to our success would be done the same flexibility for our us peak kermit. If we had the Statutory Authority on this it would allow us to use our judgment to reduce the cost and pricing data we would require when we have cost transparency with the companies with which we do business. In my testimony i stated we have initiated six pilot programs that push the limits of our contracting agility. This is in order to demonstrate our ability responsible responsibly and reduce lead time tell us a couple of those programs. C130 date jay and the japanese global hawk. One us in one Foreign Military sales. Our goal is to get these pilot procurement done within 210 days from the issuance of the request for proposal. 210 days . 210 days is the interim we would like eventually to get to 180 days. We have a process to work down and we will work with you and your team to demonstrate how we do it and we will come back to you as we need Additional Authority if needed, but we believe its interpreting the authorities we have now and making sure you agree with them and having us move forward. We are also prepositioning production contracts to include options for yet to be developed requirements. In other words, in the initial contracts with the language so we can almost fill in the blank for sales. Again, prethinking this is going to reduce the timeline and allow us to be very responsive to international customers. So, you dont need 800 page rflp . Absolutely correct. On the joint Strike Fighter program we are determined to reduce the cost of production and sustainment. We have initiated an extensive deep dive led jointly by my office, apo. The purpose of this cost review is understand in detail at lucky martin, northrop grumman, rollsroyce and be ae as well as their primary subcontractors and there are 100 in total. What it costs, white cost what it costs and more importantly what we can do to improve cost performance at the prime as a prime contractor and up and down the supply chain. This will be a completely transparent process of the companies involved. The knowledge gained will inform our product contract negotiations and all of our sustainment efforts on a go forward basis and will promote more effective and timely contract negotiations. Just yesterday the fy 2017 defense Acquisition Workforce Award Ceremony was held. Deputy secretary shanahan and i recognize the outstanding accomplishments of 27 top dod acquisition professionals out of a workforce of 165,000. A few of their accomplishments include implementing a cutting edge approach to Cyber Security testing for aircraft Weapon Systems. Accelerating the testing for defensive systems on a c130 j aircraft by two years, getting 3000 Tactical Combat units to medics and special forces operators, improving Cyber Security for medical facilities and reducing biological agency contamination time by 50 to accelerate the return of equipment. Out of the 17 individual awards across requirements and acquisition critical functions the United States special Operation Command received for. Our challenge is to take these pilots, these silos of excellence and scale them to the big army, the big navy, the big air force. We are also. How many f18s are operationally ready to fly . Not enough. I will defer to my colleague mr. Gertz on that one. Okay. The numbers i recall of 60 are not flying. Operational availability across our care assets is an issue and as i talk to each secretary its very clear theres a lot we can do at the beginning of these programs to design in the sustainment portion and we are focusing on that and we will come back and tell you how we are working on it. Let us know who is responsible. Absolutely. I would look forward to a small discussion in your office and we can talk about the actions we are already taking in terms of accountability with individuals. We are also working to make use the new rapid flexibility to bring in worldclass talent in areas like robotics, lasers, Artificial Intelligence as well as new Contracting Specialists and test engineers. In 2016 hour labs hired nearly 2000 new scientists and engineers using the hiring Authority Congress provided. Reforming and improving the defense acquisition system to create an agile enterprise is a continuing process requiring close partnerships across the department and with congress. You have my total commitments to the success of the partnership. Im im looking for to working closely with the committee and the professional staffers to further implement the initiatives we have already begun. Thank you for your support in the significant effort and i look forward to answering your questions. Thank you. Secretary mark esper. Chairman mccain, Ranking Member read and distinguished members of the committee, good morning. When i appeared before the committee in midnovember i stated modernization was a top priority of mine in ensuring the future readiness of a force and highend fight would be difficult without fundamental reforms of the current acquisition system and him a few weeks as Army Secretary on the more convinced that this is true and more aware of the urgency for us to modernize. Im encouraged by the progress the army has made consistent with congressional direction to begin overhauling the Current System and to be sure a long road lies ahead and the challenges are great, but Army Leadership with the support and advice of congress is committed to bold reform that promises to provide americas soldiers with the weapons and tools they need to fight a winner nations wars as part of the joint force. This committee is well aware of the growing challenges our military faces around the world rising your competitors threatens and sometimes challenge of america interest with capabilities that match and in a few cases exceed our own. In short our failure to modernize as quickly as possible will most likely increase risk to the force making reform of our Industrial Age acquisition system a strategic imperative. Together with leaders from the regular army, Army National guard and army res