Good morning everybody. Welcome. I am president here at csis, and the reason we are kind of rushing is because we only have an hour. We have a wonderful opportunity to listen to these three secretaries. I will be very short. We always start with a safety announcement. I am responsible for your safety today. They have some guys backstage with guns that will take care of that. If we hear anything, followed by instructions, we will take the exits right behind us, go down to the street Near National geographic, and i will take everyone to see the great new show on the evolution of jane goodall. We have never had anything happen, but i want you to be ready. You all know who these people are, so i do not need to introduce them, but you know the but you do need to know the absolutely Critical Role that they play. They are running giant organizations and they have to manage today, tomorrow, and 20 years in the future. It is constantly in their calculus about how they posture and shape these remarkable institutions not just so they can do the job today, but the job in 20 years. Each one of them is working on critical dimensions of that as we speak. So think about this unique role that they play. No people other than the secretary, no other person in the department has this kind of responsibility. We are fortunate to have them here today. We will lead an initial conversation and bring you into it later on through your questions, write them down on your cards, but enjoy the session. Welcome with your warm applause our three secretaries. [applause] thank you, john, and thanks to everyone who is joining us here, both in the audience and online today. I know we have a big online crowd. We have cards in your chairs and the way we are going to do this session, we will have a discussion on stage for two thirds of the time, give you plenty of time to pass up your cards. There will be people that come around. If you have a question, just hold it up. Someone will come by. Most importantly, who will have the best football season, College Football . Wow, no one. [laughter] we are improving already. Two years ago we had a National Defense strategy out. We hear lots of talks from the department and the community, and you have submitted the president s budget, the last budget of this president ial term. I would love to go down the line and hear a little bit from each of you about the pathway your service has taken. From that strategy coming out to today, and how you feel you have developed your service, helped lead your service to contribute to the joint war fight in line with the strategy. Why dont we start with you . Thank you, and to you and john, thanks for having us today. It is always a wonderful opportunity. You give us wonderful advice when we need your help, so i appreciate this opportunity. For us, we have the challenge of managing the current condition. We are 60 of combat requirements worldwide, people to ploy in 140 countries. The Current Conditions make it very difficult. That said, we conducted the most complex reconstruction of the army in over 45 years, created a modern organization, collapsed the stakeholders under one roof, so we have reduced the decisionmaking. We have moved 45 billion against our modernization priorities, so you will see a roughly 5050 mix between investment in new capabilities and legacy platforms. So we are putting our money where our mouth is. We have tried to organize against the problem. The challenge we have faced as the breathtaking demand we face worldwide. We have increased our Deployment Readiness Program as well as our defender series exercise. We take our counterspace unit and send them to the pacific, as well as european theaters. We have increased the rotation of deployments to areas of the world where we have a particular competition in play, if you will, against our competitors. We are trying to strengthen the balance between current demand and the National Defense strategy, and we think we are doing pretty well. Our budget is really targeted to modernize and strengthen our people. So we are going to modernize by divesting to invest, to connect every shooter to every sensor, every sensor to every shooter as well. And we are looking to strengthen the role of our people. Situational awareness is important to a pilot. We pay a lot of attention to right now, the new space force is a big part of what we will be carrying in our budget. It is not a massive part of the budget, but it is a massive park of what the budget is focused on enabling. For us, the underlying principle of everything we are trying to do is to increase the agility of our forces and our people. That is because of increasingly complex security environments. Things are getting far more complicated, far less predictable, and we need to invest in those capabilities and those skills and that Human Capital that can adjust to that. I bucket it into three broad categories, which i call gray matter and gray zones. We need to grow our fleet to 355 ships or more, so we have to determine how we are going to do that. Will it be the same mix that we have been talking about over the last several years, or a new mix that makes more sense . The gray matter piece deals with the people, developing the intellectual agility and our people. We put a lot of money and emphasis on our education, higher study, and are implementing a lot of broad reforms across educational institutions to link them back into the war fighting community so that we can have a learning organization that is constantly iterating the challenges, understanding our competitors and adversaries, and adjusting our structure in how we address that through intellectual development. And gray zones, when people think about gray zones, they think about little green men running around in ukraine. That is not what i am talking about. Im talking about the things that happened behindthescenes at the department of the navy. Our business systems, i. T. Systems. Things people take for granted. When they are taken for granted, they end up being suboptimized. Secretary mccarthy pointed to some of the challenges. You put forward the stern memo and also a new assessment to be done as you just reflected here. Can you talk a little bit, and i will come down the line and give secretary mccarthy a second shot on the same type of question, about the challenges and barrier s in front of you that your most looking at in this coming year to get to where you need to go. Sec. Mccarthy we are facing in our budget several competing pressures. One is a mandate to grow to a larger fleet. Readiness hole we are trying to dig ourselves out of, and the third piece is, we look at the budget projections going forward. It is relatively flat for us. We have to figure out a way we look and see what that future force looks like. We have just done a new future force structure assessment. It is a bit of a different mix than we have been talking about before. We will iterate that to determine what the right path is, but there are some north stars in that structure that say we have to start moving out in certain directions. That is going to challenge our topline considerations. What i told the department is, we need to look internally first, at ourselves, to see where we can find savings within the way we traditionally do things to help fund that before we can ask for anything more from the taxpayer. That is the process we are going through, that is what the stem to stern review is, and it is a staggeringly low number relative to our topline. Our topline is over 200 billion a year. If we can free up 5 , 6 of that, we can move down the path and get to a 355 ship plus navy in the next few years. But we have to do some soulsearching to get to that. What are the risks you finding the most confounding to confront right now, or the challenges right now . Sec. Barrett this will take a toll on all of us. [inaudible] [laughter] [inaudible] sec. Barrett motion activated lights. So we are working especially hard to look for ways of process reform, building faster, better processes. The acquisitions process has been too cumbersome, too slow. We need to find ways of doing that faster. We need to minimize risk, but at the same time we are looking to divest of old equipment, invest in more modern, more capable, more lethal equipment, and with all of that building our space capabilities. That is the transformation of how we have been doing it and moving into new capabilities in a domain that has previously not been perceived as a war fighting threat. The significant risks we will be taking risks that are measured, calculated risks, and building for a longerterm, strong future. Thes you endure arfare of the wher lights, your thoughts . Sec. Mccarthy the comments i had at the beginning, 60 of the requirements, readiness is our number one priority and will be there for as long as i have this job. We would not be able to have the 82nd deployed, literally coming out of new years eve parties and be boots on the ground in the middle east the next day. We are proud of that. To be able to deploy that quickly, locked and loaded in less than 24 hours is amazing. Because of the investment and the leadership, in particular in the execution and training plans. 60 of the Balance Sheet is fixed. We will have to stay that way, because you have to meet those National Objectives every day in forms of deterrence worldwide. When you have 40 or less of a budget to be able to modernize a force, the challenge is striking that balance between the new capabilities and divestiture, and that is tough. You will cut out systems that have existed for decades. With that, you will be able to flesh out the new capabilities over time. You have to deal with components, with congress and industry and others, so that will be a challenge for the army in the future. Am glad you brought up those other stakeholders, congress and other industries. How have those conversations been going in terms of looking ahead to the future and all the services are dealing with areas where there may be very good arguments for divestment where there is strong congressional interest otherwise . I open that up because it is true across the services. How are you approaching those how receptiveand have members been to it . Sec. Barrett sometimes it is a bit of a challenge, because what we need to invest in might not be visible, or tangible. Kathleen not on the production line already. Sec. Barrett it might not be associated with the constituency yet. Things like connectivity. Those things are invisible and harder to identify with. Similarly, space it is ubiquitous but invisible, therefore, a lot of people do not appreciate how engaged each of us are now with space. So the two key investments we will be making that may be a bit out of the past patterns will be space and technology linkages, and those are harder to sell because there are no tires to kick. That is a challenge that will be faced. Sec. Modly the Defense Industry likes predictability and stability, and we understand all that. But all of us are moving into an era where things are going to become less predicable. We have to work with industry to be able to adapt with us as we change. As mentioned, our four rce structure, we look forward to the types of ships we will need 1015 years from now. They do not exist right now, and it takes a long time to develop and research them and make sure they actually work, but we have to get after that right now. Although we may be shifting some capabilities around, there will be tremendous opportunities for industry to participate in that. We cannot do it without them. It is just establishing that dialogue. To some degree, we would all like to move faster. We put a lot of constraints on ourselves in terms of how we can actually do that. It is an absolute mandate for us that we have to figure out how to work with them, and work with them more quickly to iterate as we move forward. Sec. Mccarthy reinforcement, one of the points tom made, and predictability. Of ae in our third year transformation and we have been consistent with our priorities and we have put our money where our mouth is. That is the only way you can get an executive to make a bet, to put that investment in their own dollars, to change the tune on the production line and make it go for a new capability. Robust communication and conviction behind your budget proposals, because the underlying theme here is you have to have the will to Look Congress in the face and say, we when we make something in their district, we do not need it anymore. But it becomes a trust issue that you have to build with the committees first and then the rest of congress. It is that consistency over time. Sec. Modly there is a great example we are all working on together, and that is in the hypersonic space. It is pretty obvious we are investing in this capability. We are doing it together. We are using the technology, but moving it to Production Capacity is a big, big leap. We will have to send some very strong signal to industry that that is the direction we are headed, otherwise if i was in their shoes and controlling other peoples capital, i would want to have a better sense that that is the direction we are headed in. A lot of this technology is really new, so we have to make sure that it works before we jump too far. Secretary esper has hinted or kathleen secretary esper has hinted or implied that there is a desire from dod to be a higher top line at the end of this budget deal, the fy 21 budget is topline is constrained by, so presumably he means going into fy 22 and a second trump administration, or a new administration might want more top line. But the history is not supportive of that. Even in the Reagan Administration, there was a strong effort to constrain defense spending in the second term, and the debates going on right now on the democrat side seem to be indicating stable or less versus more. Let me assume for the moment that plan a is get more top line. My question is, is there a plan b, and are you allowing more allowing or ensuring that your teams are thinking through what those backup approaches might be . Sec. Modly im not moving out with any assumption of an increase in topline. I think that is too presumptuous, and that is one of the reasons why we are doing this review, to see how we can fund this internally. We have a pretty big mandate to grow the fleet by 30 to 40 from where it is today. At some point, those elements of math are not going to match up. We support secretary espers request for that. If one thing is consistent over the last 40 years, the navys percent of overall gdp has gone down consistently, as a percentage of gdp. As has the entire defense budget. The entire budget is being squeezed out by things that are not defenserelated. If you look at statistics, you can see that it is clearly not defense putting pressure on the topline of our overall budget. We need to learn how to work more with the means that we have, be more innovative. In the navy, is a great example, we have concentrated in our fleet a lot more costs on a fewer number of platforms. If you look at the fleet we built under the Reagan Administration to 600 ships, the average cost of that fleet was about 1 billion per ship. Our average cost today in real dollars is about 2 billion a ship. We have to reverse that trend, get lighter, more lightly manned ships as well. Sec. Mccarthy i echo toms sentiment as well, the fiscal environment is tough. The investiture of legacy capabilities, the only way you are going to get there is by increasing your buying power. There are a lot of things we are doing better. We have reduced the obligations by billions of dollars. We are making every dollar count within the Balance Sheet. Improving your buying power can help you mitigate the risk of not getting the fiscal increase that secretary esper laid out at johns hopkins. So a tough environment and again, the challenge the army is facing will be the modernization boundary that is coming with growth and strength. That will be two big verticals in our budget, and it will hit us no later than 2023. Sec. Barrett we do not anticipate a topline growth, although we certainly have ways we could use it. We face two thirds of the Nuclear Triad modernization, and that is coming. We have all of the expenses that would go with increased capability in space. At the same time, we are implementing reforms. The acquisition reform taking not just money but time out of the process to the extent possible, improving efficiencies, cutting time, our Acquisition Team at the century project taking already over 100 years out of acquisitions procedures and targeting 200 years of aggregate time in the acquisition process. Looking at reforms that will help improve efficiencies, but at the same time, the expenses of the technology that we buy, the air and Space Business is an especially Technology Dependent process and that is a growing part of the economy, of defense, and higher expense. Kathleen is there a hope there can be some joint approaches, joint solutions and so on . Are there efficiencies to be had there . Some folks i think would probably get a little jaundiced from past experiences with joint programs. Should we be hopeful . Sec. Barrett absolutely. These things cannot be done just individually, in the individual services. We must be cooperating, and we are. Building connections, connecting each shooter with each sensor, but also Artificial Intelligence. The Artificial Intelligence center. Working on hypersonics. We are all involved in that. The development of technology is very much a joint effort. If we did it individually, we would be finding duplication and inefficiency that we cannot afford. Kathleen on that point, as space voice force stands up your, what is the navys view of space force . Sec. Modly barbara said it well. We are completely dependent on each other. Particularly when you look out at the pacific theater, a lot of water, a lot of space, we have to have awareness on. Our ships cannot have their dependence or interdependence on the space domain. We are working very closely with the air force on that. Kathleen is the same true on the army side, in terms of space . Sec. Mccarthy absolutely. We are the largest consumers of space in the department. It really comes down to the operating concept of how you are going to fight in the future. For us to be able to mitigate a hypersonic threat, you will need a lower orbit satellite architecture, a much wider array, and the ability to queue targets very quickly to mitigate the threat. There is a technical aspect, and a war fighting one. It is changing from a prostyle offense to a spread. Creating multiple dilemmas for your opponent. This will be done out of the business line, but the tank is really going to have to drive the outcome of how we are going to change the way we do business in the future. Kathleen secretary esper has directed the joint war fighting concept, with all the chiefs signing on. What is the role for the Service Secretary in that discussion . If i can flesh that out a little, in building out the funding for the force over the future, part of this too is ensuring you have a healthy service, innovative culture, etc. Maybe that is a better way to put it. What is a piece as secretary you are thinking through to make sure you can bring forward, in your case in army, that is as innovative as possible to add to that war fighting concept . Sec. Mccarthy a lot of them are behaviors. We eat lunch together, have breakfast, meet all the time. If you look at the hypersonics effort, it is joint interest, not like a big joint program office. What we do is we share information and look at the test regime and share data, we meet together constantly. The mechanisms of how this is going to be used and employed, the domains are different. But there are ways to get economies of scale and the domain and the process, we can help each other. A lot of how weve established these efforts, they have not been the traditional approach. A lot of it has been the relationship driven nature of it. And from the perspective of a job, working together to finance these efforts, to explain the incredibly important nature of these Strategic Programs and getting the buy in from industry and the hill. Kathleen one of the big issues many of us are looking at is the valley of death, if you will, the movement from having these new approaches, whether it is an hypersonic systems or other areas, space, cyber, etc. , where we are prototyping, looking at fielding, but there are procurement challenges. Is this part of what you are describing as an acquisition challenge, or are you thinking of another set of challenges these days . Sec. Barrett this and others. We have counterpart examples. 46 is a process that started in the early 2000s and it is nearly 20 years later and we are looking for a fully functioning aircraft. The valkyrie was a project that started 2. 5 years ago, to go from initial designs to flight. We have bookend examples on how it has been done and how we will hope to see a lot more done. We have new ways, they are working and it is being effective, and we meet regularly with the secretary of defense, as well as the deputy secretary of defense. We are really sharing Lessons Learned and moving to implement those in our shared knowledge. Kathleen a reminder, if you have cards, please put them up to get picked up. The other piece coming through very strongly in all the data we see and things we have heard coming out of the department is the rising personnel costs, personnel directly and other pieces that are indirect, compensation issues and benefits. Given the fiscal challenge you are describing, this personnel is taking up more and more of the percentage of the dod budget. How do you approach that problem . Sec. Modly i think we always want to ensure that our Service Members and their families are extremely well taken care of, so the cost of doing that, not just for us in the department, is rising generally, in society. It is hard for us to buck that trend. It is what it is. What we have to think about, especially in the marine corps, is how do we reduce the number of people we have and distribute the force that we have . How to we get lethality out there without having 300 people on a ship to deliver it . Those are the types of things we are thinking about. It also requires an increase in the level of capability and skill of the people that we have on the force, and that is why we are investing so much in education. It will ask people to be a lot more adaptive in the job we are asking them to do. It is sort of a philosophy behind the whole Frigate Program we are doing right now. That is going to be a very lightly manned ship with a lot of capability on it. When you talk to some of the manufacturers that are building this ship and look at some of the ones that have been developed, you say, i have a great example of a ship i will not mention what manufacturer it was, but they showed me a state room with four bunks in it, its own bathroom and shower facility, and i was in the navy in the cold war. I said, wow, this is a nice state room for officers. They said no, this is where our enlisted people live. Why did you design the ship like this . They said, we designed the type of ship for the kind of who we want to recruit to our command. You will have highly skilled people with lots of opportunities to do things in other places, so we have to be able to attract those people. It is a big, big part of our challenge, but we definitely dont want to short shrift our sailors, marines, or families. Kathleen secretary mccarthy, personnel costs are impactful on the army. You have in the 2021 budget request slightly decreased what you have previously been seeing as your line for the act. It is still picking up. Can you talk through how you are thinking through the cost elements of that, and you have alluded already to trying to get this balance right across readiness structure and modernization. The army in the past typically gives up most of those during modernization. Where are you now . Sec. Mccarthy our fundamental approach, coupled with 3. 5 unemployment, made it a perfect storm. We made adjustments and marketing, adjustments to our approach, got back to the cities, engaging with civic leaders. We are back on track. What we see is the slowing is much of knowing you are going to be able to hit your target, modest growth yearoveryear so you continue to get into formation. Somee one to one dwell and is less than that. We have been deployed every single day since 2001, and it is not going to stop, in combat in particular. We have to keep growing the force until we can get it better, the ratio. Because it becomes a huge retention issue for us. As i stated earlier, a lot of collision course. By the 2023 timeframe. That is where their are going to be some hard choices in front of us. Do we have to stop . Do we have to find more buying power . Thats why our effort will continue. Kathleen i want you to reflect on technology. There is so much conversation on technology, and i am not one that thinks that technology is the center of the ecosystem. The people are. But lets talk about the technology side. What is the area where you see your service investing in that is the most interesting or insightful for our audience to hear, could generate some real Game Changers . Sec. Barrett it is people, talent, technology. That is exactly what we do. It is smart people designing new capabilities. When i think about it, i think about the gps system. In the history of mankind, has there been a technology that has been as influential, as changed as radically as many peoples lives as gps . That system, everybody uses it today, but that entire system, for the world, is operated by seven people sitting at consoles in colorado springs. A total working staff of 40 people. Seven on a shift staff that department. It is talented people operating the system geniuses put together and serving the american public, the global public, including our war fighters. We get extraordinary value out of thoughtful innovation and if the value is not just for the war fighters, but it is especially pivotal to our way of life. The talent is a different kind of talent. The innovators, the people putting ideas together and making good things happen, and the operators might be fewer than what would be expected for the output. We face the pilot shortages. The pilot shortages, i have watched for the past 40 years. In the time of the good economy, there is a pilot shortage. As the economy turns south, pilot shortages go away. We are increasingly using Autonomous Vehicles. There are technological revisions happening that change a lot of that. One of the things that is happening right now is that the space force has been an extraordinary magnet for young people to want to be a part of the military. Many young people have said, i did not want to be part of the military, but i want to be part of the space force. The applications, the online tapping to be part of the space force has been significant. We found that is not affecting just the space force candidates, but the air force as well. I would not be surprised if the navy and the army also are getting a resurgence of attention and attraction because the space force is bringing positive attention to the military. Kathleen on the technology piece of that, is the take away, it is sometimes the least expected . Gps is an example of an enabling technology that has fundamentally changed the way everything has done. Is that where you think we are underappreciating, if you will, in the outside community, where the next big opportunities are . Sec. Barrett i think we are. It went from the sputnik era, where every young person was motivated by it, to more recently it has been a shrug. Now, because of the space force, it has come into its own again. People have not understood how much they use it, but now they do. I think at first, the space force was a mockery. Now people are quite coming around to the point where we had 288 votes in favor, bipartisan, bicameral great support for , something that set up the space force. Space is invisible to most of us most of the time, but it is ubiquitous. Everybody is using it, we cant live without it, and only when we stop and think about it do we realize how important it is and how fragile it is. Therefore, space is an important place to be paying attention to defending. Kathleen secretary mccarthy, same question. What is a Technology Trend that is exciting for the army . Sec. Mccarthy longrange precision fire. It is our number one priority. We have 10 billion invested it is a place where our organizations are partnering very well. If you look at the investments made by competitors, the capabilities, the only way to reverse that is to put investments against that that can change the geometry of certain areas of the world, like the South China Sea or eastern europe. To have the means and capabilities to maneuver and helps envelop battle space in places where if you cannot get a ship or a plane in there, you can take them out and bring them back in. It is way for us to complement each others capabilities but also mitigate investments made by competitors. Sec. Modly i echo what ryan said. Every day, i am introduced to Something Else amazing the navy is working on from a technical standpoint in the war fighting realm, but i will focus on one that people probably think is digitalthe modernization in the back office. We are about 15 years behind where the private sector is on this. There are huge opportunities with respect to improving our networks and improving how we do business through the better use of technology. Our ability to understand where things are in our inventory system. Another mundane topic is the audit. We go through the audit. Everyone feels like it is infringement on their jobs, but i give you an example. The first year we did the audit, we found a hangar in florida with 150 million of airplane parts into it. We did not know we had the parts or the warehouse. We enter those parts into the system. Within a week, 20 million requisition on parts from that warehouse for aircraft that were down for parts, that we did not know we had. There is a huge opportunity for us to fix that, to improve readiness, the speed at which we can do things, educational content delivery, which is critical to the innovation and agility we want from our people, it can be really enabled by this. I am excited by that. Kathleen i will go to the audience questions, and the first links to the last question from each of your perspectives on the health and quality of the Industrial Base and if there are specific areas of challenge, what should they be doing differently to get there . I will start with you im sorry, you just picked up a glass of water. Sec. Modly i was trying to think of what to say. Thank you for coming at me. [laughter] sec. Modly i think we have an amazing Industrial Base in the United States. The challenge that we have is, particularly in the capitalintensive things we buy, we do not have enough competition, frankly. It is what it is. There is one company in the United States that can build an aircraft carrier. We need aircraft carriers, so we have to work with them. They have been good partners with us, but it creates challenges. The more competition you have, the more ideas you get, the more you can drive cost down. That is the concern i have, that the competitive field is not as broad as i think it would like i would like it to be. Anyone can look at a chart to see what is happening with defense consolidation, and there are not as many competitors providing new and innovative ideas. I think they are incredibly capable and responsive, all these technological things i talked about, the Amazing Things i see, i am seeing it at the Industrial Base. It is amazing. But we do not move fast enough for them, i dont think. I do not think we get the greatest signals about what we want to do in the future. And they will migrate to the places where they get the best return on capital. We have to work hard to maintain that balance and make sure we we have a healthy Industrial Base. From the navys perspective, i would say we will probably have a healthier Industrial Base 10 years from now because of that diversity of things that we will want to be acquiring. Kathleen supplychain security can you talk about that . I will ask the other two as well. Sec. Modly it is a big concern for us. It is the second and third tier suppliers that have a lot of vulnerabilities. The navy did a study on this about a year or so ago. We have implemented a lot of changes to address this. Big investments for Small Companies to create the types of security that we need. We also need to come up with a better way to protect information. Our adversaries are coming at us through that channel, and they are able to fish their way up that channel. They might find a piece of information that is not classified in and of itself or that important in and of itself, but when they piece it together with all the other stuff they find, it matters. It ruins our competitive advantage. Kathleen your thoughts on Industrial Base issues in supply chain . Sec. Barrett i agree with what tom has said. We have the same problems in the air force. I believe in the discipline that competition provides. In what we buy, we do not have adequate competition in order to have the discipline we would like to see. On the other hand, there are pockets of exciting new competition in space launch, for instance. We have gone from where that was the exclusive territory of a few providers, and now we have some new providers that are increasingly capable of being responsible for military lift. That is a good expansion in an area that was so expensive that it would have been perceived that it would have been difficult to have new competition there, but we have it. Sec. Mccarthy definitely the aspect of being able to do business more effectively with the department is always something that hinders the Industrial Base. People go find new customers. One thing that concerns me is semiconductors. We do not make those in america anymore and they are in everything. Where do you find the capabilities for components that you are going to put into these Weapons Systems in the future . How could the department of defense work with industry to help protect that market . How can you compete . That gets into the safety of your supply chain where are these components made and who is making them . We have been doing a remarkable job on attacking this issue, but it is something that has gone on for decades and it is only getting proliferated more around the world. Kathleen and the relationship between the dod the military, more generally, and tech. Can you talk about the efforts you have underway, the bridge built tech brings a lot to bear on the hardware and software side. Are you finding receptivity there . Are you reaching out in new ways . We have a firm in austin, texas. They do not wear suits, they work in a highrise, we are doing everything we can do to embrace the entrepreneurial spirit of the country and get rid of the flagpoles and tanks outside. Some of it is the business practices, embracing the authorities that in particular, the leadership gave us over the last three or four years it started with mccain and reed, and followed through with being able to get things on contract quickly, reducing the cash flow pinch that Small Business has when they tried to engage with the department of defense. Some of the culture is us getting our Contracting Officers to understand these authorities and being able to take the risk to do that. I think the air force and navy had success with this. We are getting some success with this, but it is a big cultural shift for us and we have jumped in head first. I would say, we appreciate the Congressional Authority and are using it heavily, and we are hoping we are proving the value of authorizing faster actions on the part of the government so that we can buy things sooner and implement faster. We have lunch on the time, but that is the first time i have heard about a hoodie uniform. That is an opportunity to collaborate on that one. [laughter] there is a bit of distress in hightech with the military, certain areas, and we are trying to overcome that. I think it translates to a larger issue that we have, where many people in the country, when i go out, do not know what the navy does. They are not as well connected to the military. I think that is on us. To get out more and have our people communicate more with the populations so they understand what it is that the services do. Kathleen the next question is on allies, one of the three themes at the National Defense strategy. The question is for all of the secretaries what have you done to realize that vision of leveraging were working with allies and partners . Well, having served as a diplomat for the United States in a couple of posts, i think this is one of our most important elements of the National Defense strategy. If it is the world against us, we lose. We have to have allies. I have been in turkey, spain, england and germany, and we have partners both in nato and bilateral partners that we really count on we count on them, they depend upon us. It brings strength to us and brings opportunity to save soldiers lives. If we do diplomacy well, we save lives. It is a combination. We talked a bit earlier about how Foreign Policy and defense policy are a bit of an artificial separation. The conversation we were having in the green room. Yeah. I really think these are intertwined, and we should be working very closely as a state department, defense department, to advance missions. Allies and partners are urgently important, and the air force has been using allies and partners tremendously, yet there is a lot more to do. Secretary mccarthy . It shows how important relationships are in afghanistan, we walked into a hangar before we were going to launch. We never go to war alone. Especially allies like great britain, who are always there for us. We have 180,000 people deployed worldwide. We have increased our defender exercise program so we can have thousands of troops deployed and train alongside our allies in Southeast Asia, south europe, south america this is an incredibly important skill set. We created specific sets that are trained to advise and assist missions. Two of them are deployed to afghanistan today, have been over the past few years. This is a critical aspect of our whole posture worldwide, and looking at basic concepts in Southeast Asia as well as in europe, so we can continue to dynamically grow the force and extend the duration of these deployments so they get more repetition and more time. I think it is not an accident that the allies and partners emphasis is number two in the National Defense strategy, behind readiness. To echo what barbara and ryan said, we cannot fight alone and we will not win. I think the navy, particularly the navy plays a very unique role in this, because we are out and about all the time with our ships. I emphasize this to our sailors and marines when i see them. In some cases, you are the First Americans someone is going to meet. You have a responsibility to create a strong impression. This is how we mitigate unpredictability, having partners and alliances that we can count on. That is done through relationship building. Not just at the secretary level, but the sailor and marine level, on the ground and their families. It is an Important Role for them, and i emphasize that every time i get around. I spent a long trip last year in the pacific and went to many islands in the pacific that many people have not even heard of, and i would say that our adversaries in the region, particularly the chinese, they are all over these places, trying to establish a presence there. Universally, the people i met there would rather have us be the ones there than the chinese. So we have to take that seriously, and there is a huge opportunity for us there if we capture it in terms of mitigating that unpredicted ability. Last question is what im going to characterize as and it gets to some of the themes that have come out in the discussion we have had here today, around the force being out and about, the force being deployed every day. It is true across all the services. The question for the Capabilities Development of the future and of today is, how do you develop a force mix that is able to deal with lower intensity requirements, that strained capacity, and can create those higherend war fighting or other capabilities for for peer competition . Secretary modly, how are you thinking about that lower end but consistent competition level of demand, and how you are going to attack it in terms of your force structure . It requires more presence. It requires presence to secure ceilings, to give assurances to our partners, to also provide opportunities to exercise with our partners. A lot of our partners that we have in these regions, it is difficult for them to go out and exercise with the Carrier Strike group. It is better for us to have smaller platforms that allow us to have constant interaction with them. A consistent maritime type of strategy. That is the change we are looking at in our core structure. Will we see more unmanned, more quick return commercial ship approaches . How will we see that manifested . Yes, yes. We are looking at all those things. Clearly Autonomous Systems or lightly manned systems are what we are looking at in the future. Not just on the technical side, but how you fight with that. It is a new way of thinking with us, so we will be deliberate about that. It is also part of a cycle of creating a learning organization for the navy that can constantly iterate that. We will put a core structure out in the next several days that will be the sort of northstar that we are heading towards, but we have to constantly iterate that. The world is changing. We have to pull our timelines in and think about what the next force will look like. Things like Autonomous Vehicles, that is not new for the United States air force. This is such standard technology, we are retiring early generation Autonomous Vehicles that have been used so much and so reliably that they now have reached their design capacity. This is really what the United States air force is all about, a mix of manned and unmanned. The employment and lasting employment of unmanned vehicles that then we can improve upon the capability, do new generations, better, more capable, less expensive versions of those things. This isnt anything new for the air force. It has long since been employed, and we are looking at the next generation, better valley validity, and the future generations doing improvements on what has been perceived as new technology. Is there an enduring role for fourthgeneration aircraft and things that are less capable than Maximum Capacity for the air force. Forhere is certainly a need low observable. Everything doesnt need to be. Mix of a role for a fleet types. Not everything is an aircraft carrier. Not everything needs to be one type of fleet. Both are important. Secretary mccarthy . Have some have to type of tiered strategy of how you will be able to scale over time. Its always a challenge. By division. You need to a one capability versus daytime. They are looking at concepts, how would you do this . A lot of it is financial. It will be some form of that. It is the sort of thing, they have about 18 months to figure it out. These prototypes are successful. Its a choice we will all have to face. I want to thank all of you for your public service. Helping to lead the services in a very trying, competitive environment. Thank you for taking the time to share your thoughts in a public venue. Please join me in a round of applause. [applause]