 Good morning everybody Thank you for joining us. This is a great way to start a week You know doesn't get any better than when you have the chairman of the Armed Services Committee saying he wants to kick off a week of Discussion and have it here. So I'm I'm pretty happy this morning. I want to say thanks to chairman Thornberry for doing this today, but also for Becoming such an important leader at this time We were just chatting when we were waiting for everybody to gather that Probably not been a time when the country and the Congress faces more complex issues security issues than now and honestly the country is fatigued about The military I mean we've had 12 years of wars and they're an awful lot of Americans that just want to forget it And they just don't want to think about it But the point of genuine national leadership is to bring issues of long-term significance To the public debate so that we don't ignore this and this is a very important time. We're having a huge Debate in the Congress right now about the budgets and how much money we should be spending on national defense Chairman Thornberry I know this is his view that the reason he's pushing so hard on the question of acquisition reform is Because if we're going to ask more money from the American public for defense They want to know that the money they out were already spending is being well spent and I think we just have to honestly say we've got a lot of reform that we need to bring to the Defense Department To validate our request for a stronger budget and we do need a stronger budget You know, I don't know how many of you feel comfortable every night when you look at the daily news But I don't and to think that we are drifting without a strategic plan for our long-term defense posture at a time like this Is genuinely scary now the chairman has spent the last two months Taking the committee down deep to understand the risks and the threats we face all over and I think it's a Tremendous foundation for the markup that's coming but also for the next two years today He's going to spend some time talking with us about acquisition reform. It is a crucial and central part of his overall strategy and agenda and I think we're very fortunate to have a man of his Character and his leadership perspective Leading the committee at this time. So would you please with your applause welcome chairman Mac Thornberry? Thank you, dr. Hamery and and I appreciate those kind words and I appreciate the chance to be back at CSIS and Also everything that you and this organization does to help inform and educate and guide many of us as We try to think our way through the national security challenges that we face you know how When you when you're on an airplane, they're about to close the boarding door and somebody says if you're not going to Dallas This is the time to get off I'm kind of thinking anybody that's here that thinking this is a Texan about to announce Something about the presidency. You're in the wrong place There's another speech that you may have a chance to get to if you run so It's okay. Just to slip out the back I was here in November 2013 to launch a Defense reform project that former chairman Buck McKinnon had asked me to work on so I thought it made sense to come back here to unveil the first installment of where we are When when I was here before I mentioned that nobody that I'd run into thought that everything at the Pentagon was going fine What I more frequently got was a reaction that our rolling reaction that oh, yeah, y'all are gonna try that again It's not gonna make much of a difference and it's absolutely true that change is hard, especially for a military Which brings me to a subject of vital importance, which is trousers Now when you talk about defense reform, you probably think about fighters not fabric But in 1912 just before World War one trousers were heavy on the mind of the French Ministry of Defense See the British had learned from the Boer war that having those bright red Coats on tended to make them more of a target. So they switched to khaki The French by comparison still wore blue coats and bright red Trousers the French Minister of War saw an advantage of being slightly less visible on the battlefield and sought to Institute the same reform that the British had had taken on But a general way to describe the debate would be to say that the French have always held a high regard for fashion So taking away trousers would be as a Parisian newspaper wrote contrary to French taste and military function And of course they put taste before function One former general even took to a parliamentary hearing Screaming that minister to ministers that they would never eliminate our red trousers Well later on after a bloody conflict the French Minister of War wrote that the blind And imbecile attachment to the most visible of all colors was to have cruel consequences So far we've been fortunate enough not to have had a general scream about the color of military pants in one of our committee hearings But I do think the French experience is instructive and as we all know Their reluctance to change in the next war was to have even more serious Consequences for their nation Militaries are traditional by nature. It's part of their strength It also means that change even necessary change can be slow and hard as Dr. Hamery just referenced. I think one of the reasons that military reform is necessary for us is That under any budget scenario Resources are tight and we have to make sure that we get more value out of the money we spend We have to show our colleagues on the hill and the taxpayers that we're carefully overseeing how their money is used But I believe an even more critical reason for reform is the need for agility As as dr. Hamery again just referenced We've had witnesses over the last two months in Congress Testified that we face a wider array of national security challenges now Then at any point certainly since World War two and maybe in the history of the country We know from the headlines that the threats to our safety and well-being are multiplying and we know from the polls that the public is Pretty uneasy about it Just think for a second if you will about what's happened in the last 16 months since I was here to start this reform project China is pushing out its territory even building islands on the South China Sea While our Justice Department has indicted PLA members over their cyber activities Now North Korea has been busy in cyber as well But they shoot off a few missiles from time to time just to keep everybody on edge US military was sent to Africa as the first response to the Ebola epidemic and the National Guard in Texas Was sent to our border to help cope with tens of thousands of unaccompanied miners that were flooding in from Central America Russia invaded and annexed Crimea and is pushed far into the Ukraine threatening the peace of Europe and post-war Stability while Putin won't stop talking about where he wants to put his nut put his nukes Terrorists blew up shot beheaded or enslaved innocent people from Copenhagen Brussels and Paris all the way down to Nigeria across Africa Into South Asia in malls museums grocery stores and even schools Now that's not to overlook the stunning success of ISIS in establishing a safe haven in Iraq and Syria drawing Thousands of foreign fighters humiliating the Iraqi army and spreading its poison throughout a wide region Nor the fall of the government of Yemen the source of the most serious threats to our homeland over the last few years as Iran spreads its influence throughout the Middle East and may be a threshold nuclear state with the blessing of the International community setting off a nuclear arms race in the Middle East of Course old problems haven't gone away from Afghanistan and Pakistan to Somalia to Israel and the Palestinians Where there was a seven-week summer offensive in Gaza? Meanwhile several airliners got shot down or disappeared with hundreds of people dying in short It's been a difficult Time over the last year or so and the truth is nobody can foresee what's gonna happen over the next 16 months But what we do know is the velocity of change is Accelerating and that the unexpected will spring out on us The question is how well do we or how well can we? respond So to help us be better prepared for a world of proliferating threats Including those we can't predict. I think we need to have reforms in at least three areas One is personnel to ensure that we can continue to attract and keep the top quality folks who serve our country and Our committee is looking at the recommendations of the Commission on military Retirement and compensation modernization and I suspect we're gonna try to do at least some of that this year Second area of reform is organization and overhead that classic tooth-to-tail ratio that we all hear about as The end strength of the services has declined the bureaucracy and the Pentagon and elsewhere has stayed As they say robust So we need to streamline their bureaucracy partly to save money But partly to streamline the process because every office has an understandable human need to be relevant and make their presence known And I think there's a good chance we can work with Secretary Carter to do some of that as well But the third area of reform which is what I'm really here to talk about is Improving the way we acquire goods and services The definitive edge that our military enjoys comes from two sources our people and our technology And if we lose our technological edge our troops will lose as well our military has got to be both strong and agile and People are gonna get tired of me talking about the importance of agility Which is as old as the Calvary? The army that can outmaneuver its foes wins and that's why every Mongol soldier traveled with three to four horses and it's why the Germans so valued their panger formations Today you see countries like Russia and China trying to outflank us using technology Whether it's deploying carrier killing missiles or building radar that can detect stealth The only defense is to adapt quicker than they do. I don't want to see America outflanked The hearings and briefings we've had this year point to an eroding American technological superiority several factors have contributed to that erosion including just the general pace of change our broken budget process and An acquisition process where we have a hard time getting modern technology Fielded in a timely way Last week when secretary Carter testified in front of our committee for the first time as as secretary I pulled off my shelf a book that he had edited and and partially written from 15 years before As you can imagine it can be a cruel thing to do to somebody to quote their own words To them, but in this case, I think he was right and I think he's still right because what he wrote about was that to maintain a Technological edge we have to align our procurement system with market forces And we have to be the fastest integrator of commercial technology into defense systems We have unfortunately moved further away from those goals rather than closer to them over the last 15 years one of the many lessons I've learned from dr. Hamry is that our unique government industry partnership in the United States has been One of the key factors in our success to becoming and staying a world leader It's a fundamental strength, but it's also been a persistent problem So since I was last here 16 months ago I've spent the time listening and it hadn't just been me Many of our committee members on both sides of the aisle Especially ranking member Adam Smith have listened and read and studied not only about how the current system works or doesn't work But about past reform efforts and how well they have succeeded or not We've listened to folks in the Pentagon such as under secretary Kendall and the service acquisition executives and the service chiefs We've listened to industry including trade associations companies and individuals We've listened to people who have spent years studying the acquisition process such as authors and academics and folks at the general accountability Office in the congressional research service. We've listened to former military and Pentagon officials and industry officials We've listened to people working in the system now managing programs trying their best to get technology Capability delivered on time and on budget and we've consulted with people completely removed from the defense acquisition system to Learn about best practices that could be incorporated into the system. I know this is shocking, but we've even listened to each other Because there are members of Congress and staff that have a trim that have a tremendous wealth of experience and expertise in these Areas and we've taken all of that input compiled a database with more than a thousand specific proposals Some of which as you can imagine are better than others more realistic than others But it's a database that we can continue to mine for for years to come Despite the fact that there are a lot of smart well-intentioned people in this field I don't think anybody's smart enough to under have all the answers or to understand all of the Consequences to any particular change. So on Wednesday of this week, I'm going to introduce in the house a Bill that will serve as a discussion draft for the first tranche of legislative proposals to improve our acquisition system and I invite comments and Suggestions folks are gonna have about a month to do that because our full committee markup of the next year's National Defense Authorization Act will be April 29th So there will be about a month to make comments now in offering this legislation I expect at least two reactions. One is it doesn't go far enough and You know what that's gonna be exactly right. It's not enough. It doesn't try to be enough, but it's a start and It's a start that tries to focus on the basics of the acquisition process our people The strategy and the decision-making chain to buy goods and services Another reaction is well, it does too much Well, I don't think that's right But that's why I want to put it out there because my first rule is like the doctors first do no harm I want to have it out there for several weeks and invite comments I really think this is the best application. I know of that overused metaphor of trying to Fix the airplane engine while the airplane is in flight This plane cannot go off-duty and land for several months while we fix the engine It has to keep flying while we make improvements because we have to defend the country every day But if we don't try to fix the engine, it's not gonna be able to defend the country So we have to be able to do both so in the proposal that I'm going to introduce I really break down the Changes into four categories people acquisition strategy Streamline the chain of command and then out the regulations and paperwork and let me just give you a brief summary of each of those Starts with people That's our most valuable resource in acquisition just like it is in defense generally We would remove some of the obstacles that make it more difficult for top military talent to serve in Acquisition and we make permanent the defense acquisition workforce development fund to help make sure that it can be used more effectively We would also require training on the commercial market Including commercial market research to help close that gap between industry and government To be the world's fastest Incorporator of commercial technology there has to be a lot of interaction between industry and government and So we require there to be mandatory ethics training on that acquisition related interaction So it's clear what you can and cannot do Secondly on acquisition strategy, we require every program start out with an acquisition strategy It has to be in writing and it has to be done up front and then updated as needed Now this strategy would end up consolidating at least six Different requirements into that upfront strategy and they it's got to include what is the most appropriate type of contract for this particular acquisition This is another area where one size clearly does not fit all it's got to consider whether multi-year is appropriate It's got to include risk mitigation strategies just like our combatant commanders have to include risk Mitigation strategies for their war plans. We have to have risk mitigation strategies for our acquisition plan and It's got to consider consider incentives So for example, one of the things we want to consider is shared savings on Service contracts what are not which are not currently allowed in The third area we want to simplify the chain of command for acquisition decisions So a number of requirements on milestone a and milestone b are going to move from a legal certification to just a decision and As a recovering lawyer, I can attest that the fewer lawyers that are involved in the process the smoother It's probably going to go One of the reasons I think we've gotten so bogged down in bureaucracy is that we've tried to paperwork our way all of the risk Not only can that never work it creates a situation It slows everything down and creates a situation where no one is responsible and no one is accountable for the success or a failure of a program So this in this draft will raise the dollar thresholds on a number of authorities such as simplified Acquisition to make it easier for service chiefs base commanders and others to just get things done and We make it clear that the role of the testing community is to test and advise Not to make decisions fourth we thin out regulations and get rid of paperwork in fact there are going to be dozens of Reporting requirements that are going to be eliminated Over and over again. I hear that program managers and industry are forced to manage the process Rather than manage the program G.O. Just came out with a report y'all may have seen that evaluates the usefulness of a bunch of these Certifications that apply to every single program some are useful some you won't be surprised to learn are not So for example several years ago Congress was concerned that several programs were not paying proper attention to corrosion resistance So what got interpreted by the bureaucracy was that every program had to have a corrosion prevention report Which had to be staffed and written before that program could proceed it even applied to computer Software not generally known as a high corrosion risk Now in truth is DOD is has recently taken some steps to correct this issue and its latest acquisition Regulatory guidance, but this is an example of how the system has gotten so bogged down Matter of fact the best summary of the current system that I heard over the last 16 months was by one of the leaders working in the system every day The current system is like a bus Where the driver is the program manager? And he or she is responsible for getting that bus or that program to a certain place on time and on budget Yet the bus is full of passengers and every passenger has their own steering wheel and their own break So that makes the driver's job pretty hard And when the bus ends up in the ditch as too often happens then all those passengers scatter away and climb on another bus Meanwhile the driver's left there trying to figure how to get out of the ditch and get back on the road Well, what we need to do is eliminate those other steering wheels and brakes So there is one decision maker and then we can hold that driver Accountable for getting the bus where it needs to be on time and on budget That's what I hope these proposals move us toward So finally, let me just mention Three other things. There's more to the proposal that then I've outlined here in addition to the changes in law we're going to Make public this week a separate document that is draft report language and That includes several studies and markers for future legislation So one for example one area where we need to do a lot more work is in service contracts But we're having trouble getting the information we need to to to look at that. So we're requiring the department provide us Additional money. I mean additional information in that area and that'll help guide our steps in the future Second point is part of improving the acquisition process involves changing the way Congress operates We're also pretty tied to tradition and often difficult to change But our military cannot be agile without Congress taking steps that allow and even curb and encourage that sort of agility Third I agree with those who argue that we have a unique opportunity now to make needed reforms Few Secretaries of Defense know the Pentagon better than have known the Pentagon better than Secretary Carter He along with Deputy Secretary work under Secretary Kendall the service secretaries and the Joint Chiefs are all committed to reform They understand that it's essential That commitment is strong on the Hill as well Chairman McCain and I agree that reform must be one of our top priorities And we have excellent partners in that effort with Senator Reid and Adam Smith Many others on our committees are involved as well on a bipartisan basis So several long-term observers have pointed out to me that never before have all the stars been so favorably aligned Where we have the necessity of reform Key people in positions and a commitment to make it happen. So the point is we can't waste this opportunity As long as I'm privileged to hold this job defense reform is going to be a priority Not for its own sake But for the sake of ensuring that our military is as prepared as possible for that wide array of threats We face today and for the unknown security challenges which confront us tomorrow We will never get all the way there But we have to move steadily closer to a Department of Defense that is efficient effective and accountable with military capability that is both strong and agile in The guns of August Barbara Tuckman writes that the impetus of existing plans is always stronger than the impulse to change We have to overcome that impetus and we have to set aside our skepticism We cannot allow blind attachments or inertia To cause our men and women to suffer Cruel consequences such as have beset the French and other militaries in history If we're smart and persistent we can stay on top For there is much in our country and around the world that depends on whether we're successful Thanks. Well chairman Thornberry. Thanks so much for coming back to CSIS It's it's a great privilege for us to be able to host you and to To listen to this preview of a soon-to-come rollout. It's very exciting. I Like a lot of what I heard. I think a lot of others did too For the benefit of the audience. I'll just introduce myself. I'm Andrew Hunter I'm director of the Defense Industrial Initiatives Group at here at CSIS and Have had the privilege of working in the past for the House Armed Services Committee on acquisition reform. So We shouldn't let you get away Well, I didn't go too far and obviously this is still an issue that we're tracking closely I Wanted to start out by asking you a few questions and then once you've had the opportunity to respond to that We'll open it up to the group here We have folks with microphones who will come around when that portion of the session comes up for those who have questions But let me start out by Start if you will at the end I'm curious as to What you see as you sort of your ideal or Successful outcome for this effort both in terms of this year's activity And then I think you've also indicated in the past that this is not maybe a one-year not a one-and-done exercise So if you could speak a little bit about what does success look like for this year? And then what might success look like over a five to ten-year type of a time span for this effort Well, you're absolutely right as I say this is not a one-year effort Nobody is that smart to fix acquisition in a single swoop and if you try you're probably gonna make more mistakes than you're gonna help So this is just a beginning and what we try are trying to do at the beginning is deal with some of the fundamentals that's why I talk about the essential nature of the acquisition workforce and and and some some Tools to help improve that the acquisition strategy and the chain of command and making decisions about acquisitions Which is I think just fundamental. That's where we start. So what I hope if all of this Is enacted and all of this Works out perfectly what I hope is that we have a more streamlined chain of command and more accountability That goes with that chain of command, but again that this is never a destination that you reach This is just trying to swing back the other way From that pendulum that has gone so far that software has to have a corrosion report staffed and written for it You mentioned senator McCain and his support for this and that also matches Obviously my understanding and his public reputation of a strong interest in acquisition but of course the Senate doesn't always follow the Will always of one person and not clear that it follows the rule rule of even the senators At most points in time But how do you see this playing out in the Senate? What do you what? How does the picture look to you on that side? Well, I think the key place to start is I think senator McCain is just as committed to this as we are in the house And so it's going to be a major part of his efforts We have talked about this from day one when each of us were chosen For for these positions and we are coordinating closely every step of the way now You're right that doesn't mean the Senate committee is going to have Exactly the same language as the House Committee Certainly both of us will go to the our respective floors various amendments come and go and and so we'll have to reconcile all that but I think there is a tremendous amount of common perspective here and That's that's part of the reason I'm persuaded that those people who say this is fairly rare Especially all those skeptics that say ah, yeah, I've heard all this stuff before It is fairly rare to have that commitment on the Senate the house and also in in the department And and you really do have it this time And I think it takes that in order to really make the change is not just at a superficial level But but in a deeper Cultural level, but I also think the people who work in the system are hungry for that I mean that's that certainly came across to me in in the meetings I had with program managers inside government industry people people Want to to do things they don't want to just fill out useless reports And so much of their time effort and money is spent on paperwork these days You mentioned and I like the way you framed it the importance of a jittle agility in the system and certainly a lot of folks have commented and we've been looking at it here on how Defense technology and commercial technology and the interplay between the two Is is undergoing significant change like you mentioned the pace of change And and just sort of the nature of where technology development is happening both In terms of commercial versus defense and in terms of globally It being much more global exercise So as you look down the road a little bit How do you see that changing the way that the acquisition system needs to operate? Both in terms of the laws that you're you're you're working on but then also you also mentioned the regulations. Yeah Well, I think it is it is just fundamental because we cannot Take 20 years to field a new airplane with technology moving at this speed and And so that's why Streamlining the system is absolutely essential and and the point about commercial technology being where much of the innovation happens also means we can't or In fewer instances can we start from scratch with the military? Developing the requirements and and doing all of the work. There has to be that much greater Cooperation and integration of commercial with with military and and so that's part of the as I mentioned That's part of the reasons we have the proposals that we did so But but I think your point gets to What I think it may be even what part of what you've got to change here is is the culture and the incentives And and and a lot of people who work in the system Have been criticized for in the past say for being too close to industry So now they have this standoffish sort of of attitude Too often the current system Rewards people who just take the lowest bidder no matter what and figure will work out the rest of the stuff stuff later So that's part of of why I think it's important for us to start with these fundamentals The acquisition strategy where you do the work up front in thinking through what do you need to have a successful acquisition here? and and then Streamline that chain of command so you can hold accountable the people who actually make the decisions without all those other people having their Own steering wheels and brakes I Think we're gonna have to do that Or else we really will be left behind In in not having that technological edge that Has has been key to our success at least since then to World War two And you mentioned industry and had a big focus there on the the criticality of that partnership between government and industry industry of course Filled with very patriotic individuals who work hard on these problems because of a sense of mission, but also They're responding to shareholders who have expectations As as is reasonable So how do you see that dynamic in terms of incentives for not just the folks in industry? But but their shareholders to make sure that their incentives are fully aligned with what we're trying to do Well that that goes back to the point I quoted from Ash Carter 15 years ago We have to align our procurement process with market incentives because if you're going crossways, it's not gonna work and Too often our incentives may not be crossways right now, but they're not going the same direction So what that requires I think is that streamline process so you can have more accountability But it also means more innovative sort of contract types like I mentioned shared savings on Service contracts where if you win the contract And you can do it a little cheaper You can keep part of the savings and the government keeps part of the savings Versus the way too much of the time it is now and that is spend all the money in your account because if you don't you're gonna get Less next time so it's the spend it or lose it sort of incentive. That's going the wrong direction and and So so part of the reason I am insistent this has to be a multi-year effort is that in order to really Understand the incentives now and to begin to change them because that's really what's going to change behavior it's going to take time and And a more streamlined accountable system is a key first step But there are many more steps to go in order to have that alignment going in the right direction In order to be the world's fastest integrator of commercial technology. It's just so complicated It's going to take time and and but this is a hopefully a positive step Well at this point I'd like to open it up to audience questions I had I had four on my watch So it's about time for someone else to get a chance and we'll start up here with if you could say your name and Where you're from and microphones headed your way So professor Steve schooner from the George Washington University first. Let me offer you some kudos It's wonderful to hear you talk about things like incentives And it's good to hear you acknowledge some of the cynicism and some of the difficulties for change But I just want to say before I get to my question that I think that when you talk about reducing the bureaucracy Any focus you have on reducing the cost drivers? Those would be permanent changes that would have direct effect on the bottom line So as you do the big things don't lose sight of the fact that every one of those you eliminate has a direct benefit to the government My question I think is pretty straightforward One of the last things Dave Berto did before he left CSIS in his big number of crunching report talked about the fact That since the economy tightened up the single biggest change in defense acquisition has been the reduction in money spent on Research and development and the most dramatic reduction has been in IRD or independent research and development You talk about maintaining technical superiority any thoughts on addressing that gap. Thanks. No, I share that concern completely As budgets are tight you have to pay the fuel bills and you got to send the paychecks out So what gets cut? It's the R&D and that's true from the government side and then with our broken budget process What does industry see they see? Dysfunction and so they tend to put less of their own money into it So as we evaluate the president's budget proposal and move toward our own defense authorization bill I think we will look at some key Technologies that are going to be important for our future and seeing if we could do a little better on them Because I do think that is is very important I hope where we can get is some more stability in our budget process so that industry says Yeah, I think there's a future there and we're going to put more of them but but I have to say one of the things that concerns me the most getting back to our Discussion is You know Lockheed and Northrop are always going to deal with the Department of Defense a lot of other firms that are doing that are Key innovators can take it or leave it if it's too much hassle to do business with the Department of Defense They can leave it and and and so part of the reason to improve the way We contract for goods and services is to make the Department of Defense a little friendlier to do business with so that we can take better advantage of commercial innovation and some of the other companies that You know are on the fence about whether they want to deal with it or not. Oh on the merit. Okay maritime part. Yeah Okay We'll put it on the radar screen as I say don't expect however for all problems to be solved in a single sweep See Dave said me back here Dave David said me formerly with the Defense Department Mr. Chairman over the years many have criticized the military industrial complex starting with President Eisenhower the iron triangle and there's been great efforts to try and insulate the government from the impact of industry leading to in the current administration and almost Complete absence of senior executives from various defense and defense related firms being able to serve in policy making positions While there's certainly some benefit others have said that this removal of expertise this barring of people Who have the kind of expertise in the area such as procurement that you mentioned from decision-making procedures also means a lot of people A lot of expertise is never able to be used by the government. What are your views on the ability of the potential of senior Executives from our military industrial firms being able to go back into government. Yeah, no, this is the reason I mentioned I think this is one of the areas where the pendulum has swung too far And and this is not because of some law that the Congress has passed This is is more regulatory And it's gotten worse certainly with this administration, but that's So so part of what I think we have to have is this close cooperation of Industry and government and that includes going to include inevitably people who move back and forth Because if you think about it if you don't let people move back and forth Then who do you end up with people who don't who haven't had experience and what you're dealing with but but So part of the reason I think it's essential to simplify that chain of command is so that you can there can be more Transparency and you can hold people accountable for the decisions they make and then as I mentioned We have a requirement for people who are part of the acquisition process to also have Ethics training that is Targeted to these sorts of situations now there are ethics classes that are you know at defense acquisition University all government employees have some But but my thought is Targeted for these sorts of interactions make it more transparent, but understand that that sort of Cooperation is just essential and it includes people who who will move to different jobs Here in the back that came up early Well, I think it gets back to the issue. We were just talking about how can the Department of Defense be the world's fastest integrator of commercial innovation and technology into defense systems and How can the Department of Defense be a Friendlier place for a commercial innovators innovators to interact with so I think all of that does fit together with the Reforms that we're talking about but but I do think part of the reason these reforms are so essential is that eroding Technological superiority that that I mentioned that is taking away one of the key strengths that we have had over time and If we sit here and twiddle our thumbs and fill out a bunch of paperwork And it goes it's it's going to be really hard to recover Hello congressman, my name is Jennifer Leo brahori and I'm with Northwestern University's Medill National Security Journalism Initiative in Washington My question pertains to the fourth priority that you mentioned with this proposed legislation About cutting down the paperwork While I understand that your goal as I interpreted it was to keep one program manager accountable instead of having very confusing amount of bus drivers But if you if I can indulge your metaphor for a moment my concern is that Say you have this bus and the driver who would be the program manager is more used to the administrative Roles and they have the equivalent of being a carpool captain Whereas the people with the excess steering wheels might have a commercial driver's license and would be better suited to run a metro bus So to bring it back into the current situation my question is if we put the program managers in charge How are we going to ensure that? By put by decreasing the people who are subject matter experts in the different aspects of the acquisition process How are we not setting the program managers up to fail? And how can we keep those accountability measures in check even if they don't require a rubber stamp so that we can be both efficient and effective Well, I think you start out with with the assumption that somebody's going to mess up and It's just going to happen. These are human beings complex decisions. Somebody is going to Not be motivated for the right reasons. Somebody's going to make a mistake Somebody may be corrupt You that is what happens when you get humans involved in decision-making the question is what how do you design your system? Do you design your system to eliminate as best you can any chance of that happening or? Do you design your system to be as transparent as possible to make sure to have the best chance of? Finding it if someone is incompetent or corrupt now. There's a difference here So a simplistic example to me is that you know Walmart could Eliminate shoplifting Basically down to zero if they frisk anybody coming in and out of their stores But obviously that's not in Walmart's best interest. Neither is it in our best interest to have Mile after mile of paperwork and reports and requirements and second-guessing Which have the overall effect on the system of preventing us from fielding? Modern technology in a timely way just to try to prevent somebody from messing up or somebody from having the wrong motivation or something So and and and here's the other we're partly responsible for this in Congress, too So something goes wrong We like to haul people up there in front of the TV lights and say you really messed up and shake our finger and then Pass a law to make sure that you know back to my analogy This is not really true, but that every program's got to have a corrosion report on it That wasn't with the law said but you get my point We overreact and and so we've got to be sure not to overreact I firmly believe that the simpler the system the better chance you have for accountability and the better chance you have to find Instances where it hasn't gone as well as you wanted and to fix them the more complicated your system It's kind of like Medicare Medicare is so complicated It is rife with fraud because there's so many ways to manipulate the system because nobody understands it all or like the tax code So the simpler you make it the more transparent you make it the less of that you're going to have but you can't paperwork or regulate your way out of human frailties you know, I just want to follow up on that briefly because Gio's selected acquisition report came out or their version of their selected acquisition systems Think about a month ago. It was in the press and I got a very interesting email from someone in the cost estimation community and one of GAO's findings was that a little over half of the major weapons systems had experienced cost growth in the preceding year and The note from the cost estimator said well, you know, if you're a cost estimator you do a 50-50 Estimate so half the time it should be you expect that it'll overrun and half the time it'll underrun So he was delighted. He said hey, this is almost, you know, it's about hitting the nail on the head But that's not quite how it played out in the press Morning chairman, thank you very much for your comments are very refreshing to hear a lot of the themes that you're talking about My name is Jason Tomah Felt at the Brookings Institution and I was wondering if you could talk Going back to the first how you laid out sort of the case for reform. You mentioned three areas military personnel overhead and acquisitions I mean the inertia against change is very powerful as you said and change agents like yourself and Secretary Carter have a shelf life as you know Maybe you don't but And the inertia is so powerful From the bureaucracy so I was pleased to see that people was the first area that you focused on an acquisition reform I'm wondering if you can provide a little bit more detail. You mentioned Removing barriers for top people to get into acquisition reform. I assuming you're talking about on the uniform side Are there any reforms on the civilian side as well? Thank you, sir. Yeah, primarily What I was referring to there was was on the uniform side so that we have a situation now where if you want to go in acquisition You got to stay in acquisition Rather than be able to be in acquisition a while move to the operational community and back So it limits the pool of people who want to get into acquisition Now this is there are arguments on both sides of this debate And that's part of the reason I want to put this out there for a month and get feedback from it If you think we're making it worse. You think it's better, you know, I understand there are arguments on both sides Making sure that people get joint duty credit for being in the acquisition system For example a variety of things like that to help increase the pool and and then also support the people who do come in to the acquisition system when you start start changing start changes on the civilian side you get into a Different set of laws and so forth and and we are looking at at how some of those Might might work so I do think people is is the key And and as I was just referencing the what do people get rewarded for what do people get punished for in the system? When it comes to their careers their upward progression Those are the things you really need to understand to understand whether Changes you think you're making are really going to take place because that's what affects people's day-to-day decision-making And so as I say, I'm not Pretending that I understand all of that, but I hope that beginning with opening the pool Using the defense the the workforce development fund on a permanent basis Developing these kinds of increased training for commercial and and ethics things gets us on a good start for Further improving the workforce, which has already been improved. I think from from what it was a few years ago Well, we may I mentioned it see that kind of overruns with the second area of reform which is Overhead which is civilian and military. It's not just civilian. So we may well be taking some steps in in that area but Today what I was just trying to focus on is is the way we Contract for goods and services, but but but your point is exactly right. These things are interrelated and and just as The military compensation stuff is related to this so if you want somebody who can Be competitive with Google you want somebody who understands what Google is offering and integrating that commercial technology Then you're gonna have to be competitive for that really top talent Which gets us back to the personnel commission recommendations are is the government competitive for that top talent and do their recommendations make it more or less likely that we'll be able to compete with Google for the software engineers in the past so The point that all of these things do intertwine is absolutely valid I think we have time for at least one more depending on the length. So Just here in the back we can Jay Harrison from West Virginia University Congressman, thank you for your efforts on behalf of this this very important activity Obviously, I think we all recognize that change needs to happen Your comments earlier regarding the barriers that exist when that the within the department Regarding the insertion of commercially derived technologies Clearly the secretary understands the value of commercial technology as does Deputy work as does Frank Kindle, but all those individuals are going to be out of the department in a couple of years What can the house do what can Congress do over the course of the next two years to? enforce an orientation towards leveraging outside innovations outside technologies Well, I think we can get it off to a good start And secondly we can help educate and and and lead the discussion. I think one of the major Roles that Congress can play in national security writ large is to help shape the national discussion Of what's good for the country, especially going into a presidential election year, especially in a time when according to the polls National security is either the number one or number two concern of most people. This is a real opportunity for us and and and it's an opportunity for us to to elevate the discussion and and to focus on where we are and And and and the trend so that's part of the reason is dr. Hamry mentioned we've spent the last two months in our committee focusing on the security environment on technological trends And and where things stand before we start looking at specific budget proposals and and and I think that has made a big difference in All including me all opening the eyes of all committee members And understanding where this trend is where we stand and and and where it's where it's headed You know nobody can guarantee anything So I don't know how future elections are going to go but As long as I'm privileged to have this job This is going to be a major focus for me because if you look back in history It has been Congress that has been key to major reforms at the department and Goldwater Nichols, of course is is the most famous example, but there are a number of times And the first speech I gave since I was chairman I talked about former chairman Vincent Requiring that some big holes be laid down that became some of the key aircraft carriers at the Battle of Midway We had Congress has been the ones that have made a key difference if we don't it's not going to happen I guarantee that so for all the skeptics who are out there saying oh, this is just you know going to be Come and go. It's not going to last. It's not going to really matter We're going to do our best to make it matter. Like last point is I'm one of my favorite things these days, and I'm sorry. I can't remember where it came from So I'll just borrow it is the pessimists are usually right But it's the optimists that change the world and when it comes to acquisition reform stuff I really think that applies. Yeah, if you want to be pet if you if your most important thing is to be right Then then be negative and skeptical about it but if you want to make a difference then think about what can happen and that's what we're trying to do both the House and the Senate with the leadership at the department right now Time for one more here in the Chairman Thornberry, thank you so much for your remarks this morning I'm Dak Hardwick the director of international affairs at the Aerospace Industries Association My question to you is about our international allies and partners as we all know the US military is not the only user of the defense acquisition system and I'm curious about how you see our International allies and partners in their role in the acquisition reform to make it easier for them to access the acquisition system for US military Industrial stuff going overseas. Thank you. Yeah I Will say over and over again. There's lots of issues that we don't fix With what I'm going to release this week one of the issues is the slowness of the bureaucracy to deal with foreign military sales When we have Customers that are ready to write a check And yet it's our bureaucracy that seems to think it knows better and Slows it down or puts conditions and makes it more difficult Increasingly it are it is those foreign military sales that help provide us the industrial base to keep technology Or keep capability here at home And so the harder we make it to sell stuff overseas the more we're hurting ourselves a whole another area that we don't Solve here is the whole intellectual property issue So and and there's a I say well we could I could recite a fair number of issues. We don't solve But I mentioned we've got a database of more than a thousand suggestions This is a start and we're going to use that database of suggestions when it comes to these problems In future years now some of my colleagues may offer amendments this year I can't tell you they won't they certainly can but as far as I'm concerned We're going to keep after it for a variety of these issues until we we try to Until we come closer to the kind of system that we all hope and and need Out of our Department of Defense remembering that the bottom line goal is how can you best defend the country? That's what this is. That's what this is all about Well, we we've come to the end of our hour Chairman Thornberry, thank you so much for being here this morning. It's a really great a really great start or continuation of the effort and Very much look forward to having a legislative language released on Wednesday. I think I heard you say And I imagine there'll be lots in the room who'll be interested in giving you some feedback on it But good luck in your efforts. Thank you