Good morning. This hearing of the subcommittee on readiness and management will come to order. Subcommittee meets today to receive testimony from undersecretary defense for acquisition and sustainment, ellen lord concerning supply chain integrity fourth apartment of defense in the United States. Since her initial confirmation as the under secretary of defense secretary lord has oversensitive give acquisition reform at the department of defense and i am sure we will talk about some of that today. As the u. S. National armament director she has traveled to see the u. S. Throughout the u. S. And the to see our allies and partners with regards to the development and Manufacturing Activities around the world and unfortunately has seen how reliant the u. S. Defense Industrial Base chain has become particularly as it relates to china. With the rise of china and Great Power Competition and the Global Pandemic the vulnerabilities and gaps in our supply chain particularly as it relates to the National Security has taken on a new urgency and i want to thank the Ranking Member for his interest in this topic as well and remember, we recognize how important the defense Industrial Base is torn nations security and economy and we are pleased to have this timely hearing. Secretary lord has been a prominent voice sent sounding the alarm on this important issue and i would like to personally thank her for being here today. In july 2017 the president issued an executive order on the u. S. Manufacturing and defense Industrial Base that focuses on resilient supply chains that are essential to the economic strength and National Security of our nation and also the importance of jobs as it relates to key components in manufacturing and the defense Industrial Base. The newly released National Security strategy and National Defense strategy of the Trump Administration which i often cite as an area of bipartisan support with the reorientation to Great Power Competition i believe most of the members of the Armed Services committee recognize that that was an important and much needed change to our broader National Security and strategic interest in that National Security strategy document from the department of defense notes quote, every year competitors such as china steel u. S. Intellectual property valued at hundreds of billions of dollars and members of this committee will certainly agree that so much technological change is happening in this digital age highly technical weapon systems as well as Consumer Electronics like laptops and cell phones increasingly have a role in the war fighting and are increasingly reliant on chinese supply chains. One area of supply chain integrity is particularly important to me and i think the rest of the country is our supply of Strategic Critical Minerals and metals that go into many of our modernday electronics and our modernday weapons. In this years Senate Passed an daa would like to highlight section 809, 810 which Work Together to ensure the defense Industrial Base have secured sources of strategic and Critical Minerals by the year 2030. I appreciate the bipartisan support for this goal and i also appreciate secretary lords work with me and others on the key issue. As a matter of fact, just last night the president issued an executive order entitled addressing the threat to the domestic supply chain for reliance on Critical Minerals from foreign adversaries and i would like to submit this for the record with my Opening Statement. Without objection. The key issue on this is that we know we are relying on china and in many cases we, the United States of america, actually had these radical minerals. For example, and the great state of alaska and we mine them and process them in ways with much, much higher Environmental Standards than the chinese. If that is the case in mining and processing to create good jobs why wouldnt we do it here as opposed to over there . I think people are starting to recognize that in madam secretary, i look forward to discussing this executive order in the broader topic of Strategic Critical Minerals in our hearing today. I would like to conclude by just commending the secretary with regard to addressing some of the significant defense Industrial Based challenges, particularly as our country in the world go through this pandemic and i want to thank senator kaine for his interest in this topic and i believe this is an area of bipartisan interest and we want to hear from you madam secretary on what you think the congress can be doing and what you should be continuing to do addressing this issue which is been highlighted even more with the rise of china, our reliance in the covid19 pandemic. Without further comment i would like to turn the hearing over to senator kaine for his opening comments. Thank you, mr. Chair. Im glad to be here together with my colleagues some virtually for this important hearing about readiness supply chain integrity. I welcome our distinguished witness and i want to think secretary lord for her constructive conversation earlier this week working together to prepare for this hearing but also to just generally discuss the many challenges that the dod faces today. We are all aware of the roles are defense Industrial Base plays in supporting National Security and strengthening contributing to the economic strength of the nation and many of the hearings of the readiness subcommittee at least in whole or part two of that topic. With help of our Industrial Based and its ability to support National Security needs is under many severe challenges under normal times and now the challenges are escalating so i hope today we can discuss those challenges, including the Global Economic downturn resulting from the covid19 pandemic and the way that pandemic itself affects the operations of our supply chain. The loss of trusted suppliers and manufacturers and Key Technology areas referenced by the chairman rare earth metal enrolls advanced materials, cybersecurity threats to our company is the result in the loss of valuable intellectual property and National Security secrets and finally, adversarial capital sometimes sponsored by foreign nations that find their way into our supply chain seeking to gain control of emerging and innovative hightech businesses. I also want secretary lord to know that we are all concerned about an article that the Washington Post ran recently which raised questions about how the department of defense, the abuse funds to provide for it under the cares act and i think that this is an issue directly related to the topic of todays supply chain integrity and i hope the secretary may address some of these important issues raised in that article so that we can all, not only on the committee but the iraqi public can have confidence that the department as being a careful steward of taxpayer dollars, including those provided in the cares act. We all want to help address the problems that we see will certainly discuss problems today and arent manufacturing and Industrial Base but hopefully this will be hearing that is more about solutions than it is about problems and we will assess the challenges but also are most interested in hearing what the dod is doing to address them and how we can be helpful. Mr. Chair, thank you for calling the hearing and i think our witness for their service and for being here today to testify. Thank you, senator kaine. Madam secretary i will have you issue your Opening Statements and please try to keep it to five minutes and we will submit for the record a longer written statements. I will apologize in advance and i have a hearing, very short hearing i need to be out with another committee and 9 30 so if you see me stepping out you will be in good hands with senator kaine and i will be back very, very quickly but the floor is yours and thanks again for being here. Thank you. Chairman sullivan, Ranking Member kaine and distinguished members of the readiness and management support of committee. Thank you for the opportunity to testify today on the defense Industrial Base. The office of the undersecretary for acquisition and sustainment has released the most substantial change to Acquisition Policy in the last several decades. Called the adaptive acquisition framework or aas. It improves the inquiring of war fighting capability and allows dod to better partner with industry. The aaf replaces the onesizefitsall approach used in the past and includes six practical acquisition pathways, each tailored to the unique characteristics of the capability being acquired and in fact, we do have a trifold that is a good pictorial description of this which we have made available for your reference. Last december we released our Small Business strategy reducing Small Business barriers to becoming part of the defense Industrial Base. And to educate Small Business on cybersecurity readiness. Again, we have provided for you what we call our welcome mat with a guide for business, how to work with dod with a number of hyperlinks. So, for reference in terms of Small Business 24point to percent or 75. 4 billion in 2019 went to Small Business in terms of dod spent. Further, subcontracting was 38. 6 in 2019 or 62. 3 billion, in other words, there is in the begin to slow down from major defense to Small Businesses. Additional efforts to strengthen our u. S. Industrial base, includes the cybersecurity maturities model certification or cmm see program and the inner realm role published two days ago implements the cmm see framework which establishes cybersecurity as fundamental to dod acquisitions and secures the dod supply chain. Dod also released its first policy on intellectual property to support effective approaches and customize strategies for acquiring a license ip and technical data rights. Dod can now better support the entire lifecycle of this program and upon congresses passing of the cares act we worked closely with executive and legislative branch stakeholders to balance the need of both the medical and defense Industrial Base affected by covid. We are thankful to congress for providing the authorities and resources that enable the inter agency to invest in u. S. Production of critical medical resources and protect key defense capabilities from consequences of covid. Dod has supported production of essential medical items and investments to pass the expansion for the medical industry. The following initial investments for the apartment in coordination with the department of health and Human Services or hhs and the federal Emergency Management agency or fema leveraged defense production act bpa title iii funds to mitigate adverse covid impacts. Dod continued to provide vital contracting support to expand Domestic Productions of medical resources leveraging hhs funding that congress had provided for a purpose. Of the nearly 658 million dod has invested in expanding medical resources and capacity 213 million comes from dca title iii funds, 427. 5 million comes from hhs cares act funding and 17. 6 million comes from the healthcare enhancement act. Dod has obligated 6. 57 billion for the federal covid19 effort and just over 62 of these obligations have gone to Small Businesses 4. 07 billion. Over 75 of the dod Small Business spending has been obligated in the medical category, including jugs of biologicals, surgical instruments, equipment and supplies, hospital and surgical clothing, related specialpurpose items, and other products for items. Congress appropriated 1 billion for the cares act funding for dod. To be executed under the dpa title iii program. Dod has invested 213 million for health and medical resources such as n95 masks, respirators and injection technology. 687 million of the cares act funding is dedicated to saving parts of the defense Industrial Base threatened by covid19, health or financial impact. We targeted regions severely affected to sustain vital domestic capabilities and spur local job creation. The expenditures have protected u. S. Workers and insured that are Industrial Based survives covid. The title iii cares act efforts to date mostly targets supply chains and aircraft, shipbuilding, soldier systems, microelectronics, space and rare earth elements. Investment projects and in projects or in products and services for these fragile sectors stimulates the sub tear and Small Businesses that support programs critical to National Security. Economic and National Security are tightly interrelated and our Industrial Base is the nexus of the two. In conclusion, i look forward to working with congress to ensure the resiliency and security of the defense Industrial Base. With congressional support we will focus on fragile areas such as microelectronics and rare earth elements. It will require a multipronged approach, utilizing investment, legislation and policy solutio solutions. A u. S. Rare Earth Minerals strategy should with the necessary congressional authorizations and appropriations consist of National Stockpiles of certain rare earth elements, reestablishing Rare Earth Mineral processing in the u. S. By implement the new incentives and removing disincentives, and r d around new forms of clean Rare Earth Mineral processing and substitute. We will need your help. At the same time, we will continue to support the department and the nation response to covid19 and i appreciate the opportunity to speak with you today and look forward to answering your questions. Thank you. We will begin a fiveminute round of questions and we will alternate between parties and have a number here for participating both virtually and in person. Secretary lord, Washington Post article that i referred to in my opening comments when it came out suggested that the dod was using cares funds and the suggested in the article was that the funds were either being used to improperly or in ways that werent core to the reason that congress appropriated monies to the dod. You have testified in your opening comments about how those dollars were used and why. Let me just ask a set of simple questions about that. Number one, and using those dollars has the dod carefully examined the purpose and restrictions of those dollars and attempted to use them completely and in accord with guidance in the cares act . Yes. Over the course of time before today, has the dod kept both houses of congress informed about how the cares act dollars were being used . Absolutely. In fact, i would like to enter into the record a timeline of bpa spending all of the numerous calls and briefings that we have done as well as hearings. Without objection but that will be entered into the record. If i could just try to summarize quickly your testimony, the idea is the cares act dollars have been used to deal both within the dod and within our supply chain with the Health Effects of coronavirus so we can continue to do the work needed but also to shore up economic damage that is being visited upon some of the key actors in the supply chain so that we wont see an erosion of the supply chain that would hurt our National Defense, is that basically your testimony . Yes, very well said. I noted the dod issued a statement after the Washington Post article that mentioned many of these things and i was surprised that that statement was not elite reflected in the Washington Post story. Had that material been provided to the Washington Post before the story was written . Yes, it had been in fact, the Washington Post had two different journalists who had been conversing backandforth with my Public Affairs individual and wh