 We've developed a new weight loss incentive program here at CSIS We squeeze so many chairs up on the table that only thin people can accommodate be accommodated I like to say that before they've come in so you won't know that I've insulted a couple of them Oh, we have a saying here that a meeting is so popular that people are almost sitting next to each other, you know Kind of where we are today. This is a obviously quite an interesting interesting topic This case is just gonna start looking like a Dutch master's painting here You know with a bunch of grumpy old white guys on one side of the table, you know Because they know they know what they got to do over the next Yeah, they know what they've got to do over the next couple of months, and they're not happy, you know Morning everybody welcome I'm I'm pleased that you're all here You know ironically this is kind of the where the real process of government happens because it's You know governing is about trying to understand What the implications are of your ideas before you do them and We don't do enough of that frankly We don't do enough of actually trying to solicit and understand the implications, and I really do take Take my hat off and congratulate Secretary Carter and Brett Lambert here for seeing the the importance of getting systematically getting together with Industry in the private sector to understand, you know, what are the implications of the trajectory that we're on I mean, this is the this is the best of government. This is what what we do need to do I Have been and I apologize for not having been here for Secretary Carter's presentation when he announced this I've been tracking it fairly fairly closely and and the the level of suspicion and Skepticism is intense. That's all I can say. I mean, it's amazing. Oh, no, that's not that's not an applause line But you know people are really nervous about it and and I can understand why because you know, we are at the front end of what probably is a pivot point with defense budgets, you know, and we Anytime we're running deficits that you measure with Scientific notation, you know, you know where you got a problem and the pressure is on I I Live through 14 years of declining defense budgets myself. I mean my timing was perfect I got out just when they started going up and It's painful and of course everybody's nervous about what that means in this environment and so I Know from many conversations with Secretary Carter I'll how deeply committed he is for a fair and honest process But you know in the kind of world we're in you're always worried about it And so that's why this these sessions are so important. It's really crucial that we have this understanding with each other now I When I I say to all of you my friends and my friends in government It is really crucial that we make an efficiency agenda work I know everybody's skeptical about efficiency agendas, you know, I God knows I've been through a lot of them myself, but It's the only time the department gets to keep it's to keep the money. I Mean if we let it go forward it gets stripped away at OMB or it gets stripped away on the hill. We're gonna lose it So if we genuinely can find the pathway where we get Efficiencies inside that apart we get to keep that so obviously we want to do this we want to make that successful At the same time I've seen a lot of efficiency drills that turn into Scalp hunting exercises, you know where you got to go out and get enough scalps and bring them home and Then quite matter where you get them and You know, that's that dynamic that we've got to avoid where this isn't just a drill You know to capture enough scalps and bring them back to the tribal chief you know, so it's real and And there's enormous pressure when the boss in this case the secretary puts out a target on the wall and says a hundred billion dollars, you know, there's a tremendous incentive, you know for the for all the Members of the tribe to go out and get scalps Rather than to make this thing what it really is intended to be which is a genuine effort that efficiency And so it's a it's hugely important that we go through this process honestly with each other it doesn't remove any of the Skepticism people have but we're gonna earn each other's trust By how we interact with each other and the session today is for Brett to outline the process By which the government wants to hear you and is going to try to take to heart Evaluate and then act on what you're offering So we all need to listen carefully and let's listen carefully with a with a with a constructive heart because that's what it's gonna Take to make this thing a success It could fail lots of ways most most plausibly because people act on You know on their biases rather than A conviction of goodwill so let's let's start with the process of trying to say we've got to find a way for everybody For this to work so that it's good for the department and good for the essential partners to the department That's an industry so Brett are you gonna be the You're gonna kick off for real and I'll get out of the way. Thank you. Thank you all for coming. Thank you Good morning. I'm David Burto. Thank you. Dr. Hamery for for joining a series Really appreciate that and and I think the sentiment is is quite profound I have a couple of administrative remarks because I want to welcome you on behalf of CSIS This is a real honor for us to be able to host a discussion like this I actually think that we have all the talent in the room necessary to make this a success So our plan is to lock the doors and you'll leave when the directive is written. Does that sound like a good approach? It'll save us a lot of time in the in the long run I do have a couple of administrative announcements before before I turn the floor over to Mr. Lambert One is would you silence your noise makers so that they don't interfere with the process here? The second is I would like to note that For those who have called in one of the efficiencies that we've exercised here is it's one-way communication You should be able to hear us. That is when we have the microphones on and are speaking into it And but we will not be able to hear you if you do have questions that you want raised You can email them to me at D B E R T e a u at CSIS dot or g the folks in the room I don't expect you to be emailing to me We've actually put a blanket on the so transmissions won't occur The the agenda is that I will introduce mr. Lambert and he has some remarks and then we'll hear from each of the working groups To the extent that that's part of the program then we'll open the floor for questions and answers We're gonna try to have the questions focus on the representatives from industry because that is the reason we're holding this event So to my CSIS colleagues, you'll have to wait for another opportunity to raise your Questions and I'm pretty sure that that this process is gonna as we'll hear shortly We'll take a few more weeks before it brings to completion So they will ample ample opportunity for those kinds of questions to be raised and answered later on So I believe with that I will introduce the director of industrial policy and our Hosts for this morning's event or our master for this morning's event. Mr. Brett Lambert. Thank you I'll try to be brief so we can get to the real meat of the subject But I did want to say if just a few words and also want to extend my thanks to dr. Hammer in particular He's has the unique experiences I think everyone in this room knows of not just having lived on both sides of these types of efforts but But knowing what not just what needs to be done, but actually how to do that and we've been guided by him In this effort, and I really can't say enough about his His help in this same as true as CSIS in general. I think we all are here today We all know the role the important role CSIS has played over the years in bridging Industry and the government and we appreciate their continued support for that And also thanks for all of you for coming and also all the people I don't know how many hundreds or however or on the phone Across the country for this initiative. I also want to thank my colleagues I think now this is their third full-time job Yeah, I can assure you that most of them came from work to this morning's meeting And they will be going back there shortly I'm going to introduce them in a moment But I just wanted to take a moment to step back and talk about the initiative in a broader context on May 8th Secretary Gates spoke at the Eisenhower Library Being from Kansas. I was very happy about that But he spoke about the need for the department and industry to recognize and respond to the programmatic and fiscal challenges We'll face over the coming decade Deputy Secretary Lynn has subsequently described a variety of efforts needed to achieve the vision outlined by the Secretary and On June 28th in this very room under Secretary Carter Was joined by the senior leadership of AT&L as well as all of the acquisition Executives to lay out a specific the specific areas We in the department will focus our energy and attention on over the coming months as part of what is now being called the efficiency initiative as Demonstrated later that day by the fact that the Secretary of Defense himself joined Dr. Carter in a public rollout of the initiative We are building we in the building are serious and committed to this effort. I Want to just say a few words about the specific goals of the initiative Then I'd like to take a bit of time talking about the process the timing and then introduce the Representatives of the team leads and have them briefly very briefly describe the areas they're working on Then we look forward to taking any questions you may have First let me talk about the initiative in broad terms as there's been much speculation and is always the case in this town much skepticism The bottom line is we need to do more without more From an industrial base and policy perspective We recognize the need for serious and thoughtful industry input into our decision-making processes as we move forward I can't think of an undersecretary of AT&L more committed to being open and transparent as well as seeking sincere dialogue with our industry Partners than dr. Carter and now principal deputy secretary mr. Kendall Many of you have been in our offices over the last year And I hope that has demonstrated through our actions that we're serious about our desire to be open and transparent as possible with industry That doesn't mean we're always going to agree on issues. In fact, sometimes we won't it does mean we need to disagree agreeably Both sides need to listen and when one of us is doing something that is not in the best interest of the taxpayer in the warfighter We should be called upon it and we should take corrective action We in the department cannot succeed in this effort unless we fully engage our industrial partners We've tried this in the past and it has failed We plan to do more than just listen to the issues you raise and the suggestions you make If you have solid ideas backed by empirical data that are in the best interest of the taxpayer and the warfighter We will act on these suggestions Key to this effort will be your input cooperation and support We are committing a significant amount of senior level time and we're serious about getting this right and we hope that our industrial partners will Do the same We all must redouble our efforts to be better stewards of the taxpayers dollar Over the last decade the issues we are addressing have grown in size complexity and cost This initiative is just the beginning of a process to fix these problems moving forward and to ensure that the department and Industry do not fall again into the habits where double-digit growth and defense spending was our response to poor business practices Both inside and outside the building as we move forward We must reverse the cost growth in our programs and obtain the needed services more efficiently We will focus on future actions the department can undertake Which may be supported by anecdotal experiences of the industry partners in the past But these stories alone will not be sufficient to drive our changes While the effective result of the specific policy guidelines we intend to announce will in will hopefully prevent past anecdotes from reoccurring We're looking forward not attempting to correct perceived past mistakes We're all in this together, and we're all patriots We succeed or fail together in this effort If we don't get this unique opportunity right we in the Pentagon lose our warfighters lose the taxpayers lose an Industry along with their shareholders will lose The alternative to an efficiency effort is to cancel major weapon systems whose costs continue to rise halter scale-back new production to pay old bills and Sacrifice future innovation at the altar of near-term expediency This option is not good for industry. It's not good for the taxpayer It's not good for our war fighters, and it would have consequences for our national security for generations to come Again, the bottom line is we need to do more without more Now let me speak briefly about the overall structure in the process we plan to use in this effort what you see Here is our internal We've created as Dr. Carter mentioned on the 28th We've created five teams and the representatives of those five teams are here Today these are senior level people with with I think collective experience I think of the meeting that was held and again these meetings are happening on weekends They're happening pretty much 24-7 in the building now I think the collective experience somebody added it up with several hundred years of contracting experience inside the department that are on these These various teams some of you who ever clapped last time may think that's a bad thing, but I actually think it's a it's a good thing These five teams will be meeting to look both internally and to take ideas from industry And figure out which buckets they go in some may come in in more than one buckets More than one bucket in on a parallel path to that are two other groups the military departments themselves Have had a series of initiative efforts, and we want to make sure we're capturing the work They've already done and then this team the reason we're here today Will allow industry to have input we will be taking that input through the office of industrial policy If you visited the website, there's a simple form It is simple, but that is just the first step to make sure we're getting as Casting abroad as net as possible to get ideas, and then we will be reaching out Individually we already have received some very specific ideas that I think are productive And I'm hoping we'll work our way into into the directive that Dr. Carter will sign that I'll talk about in just a moment But let me be clear The input from industry has to come through the office of industrial policy for a whole number of reasons one of them is just Coordination that there are other legal reasons we cannot The folks that are here can't reach out directly to industry and industry cannot reach out directly to them So please from this point forward funnel your questions your concerns your comments through our office, and we will be operating We will facilitate how to get those ideas to the working groups themselves And we will give you feedback on when that is happening and how it is happening There is the two executive directors Jim Thompson and Katrina McFarland who I'll introduce in a moment are here They will oversee the staffing of the process and make sure that at the senior integration group which is comprised of the senior executives of Service acquisition executives, but also the senior staff of dr. Carter's team dr. Carter himself will be the chair of that team We are meeting Seems hourly on this on this initiative, but again, I think Not just to demonstrate but to show how important this is inside the building these meetings are also taking place on weekends And and we are we are really dedicated to trying to get this right because I think dr. Hammeray had a perfect point if we don't get it right somebody will will get it wrong for us So we are very motivated inside the building to get it right Just on timing. How did we get here and where we're going? We had our this first initial Meeting with industry again This is very much about us trying to communicate to industry what our timeline is and in the path We're on and to help you better understand the inputs. We're hoping to get there'll be a series of these meetings through August and in September and then This will this is a parallel path through the internal operations that are occurring Within the five working groups each one of them has a slightly different Schedule and timeline, but this is the outreach part to industry and I would encourage everyone to go to the website At OSD mill but also if you go to our industrial policy website, you'll see That there's a link there for the at least the initial form But you know that this is this is how we would like to initially receive input from industry ideas suggestions We realize that a lot of the information we may be getting will be a Competition sensitive and that's yet another reason we want to direct everything through our Office to ensure that we can control that as we move forward and with that I would like to To introduce Jim and Katrina Jim's the principal civilian deputy assistant secretary of the Navy and Katrina McFarland's director of acquisition for MDA and They when we first Started talking about this initiative some time ago with dr. Carter and and He made it quite clear that he wanted the best and brightest from all the teams He wanted SES is an above and he wanted he just wanted people who had experience and were and And everyone nodded their head in the senior executive leadership teams And then he said this is going to be their second full-time job for the next few months And then everyone said no that doesn't seem so fun. So But with that I'll introduce The two of them and if if they want to introduce or talk briefly about the the team or Jim This is a request to the people on the telephones. I would like you all to mute your phones Apparently the there's a lot of background noise. It's coming through to the other listeners So if everybody who's on the call commute your own phones and cut down the transmission that would be helpful to those Who are not in this room? Thanks Well, good morning everyone. Thank you. Let me just echo what Brett has said. Thank you for being here. We're very interested in Your ideas and your input it's it's crucial to us to be successful to do that Before I say a few other words, let me just say, you know, those of us who work in the Pentagon feel like we're on the edge And living on the ledge every day. So I I am literally So I'm just gonna move one foot on firm ground over here while I While I talk but just a couple of very quick Brief comments and then Katrina has some more things To follow up on I just want to echo really the motivation quotient behind this There's a lot of reasons to be motivated to do this and those of us who've had a front-row seat in each of our services Or even an OSD to see the number of programs that come through and the challenges that come along with those That alone is motivation enough for us to continue to do better at the kind of business we're in every day But in this particular instance secretary Carter has reminded Katrina and I that and the whole group that this really is an opportunity to shift okay from some overhead kinds of Equities and dollars into more product and that really is the motivation so instead of buying a hundred units for one price We'd like to squeeze out maybe a hundred and three units for the same price And that's that's the journey and the real intensity of the journey that we're on here with this group And I just want to really echo that and encourage you all to think that way as you're working through this And those of you on the side of the on the business side You live in that every day, you know really looking for ways to shift More dollars into your product line and perhaps less and the and the overhead structure of your companies and so forth And we need those ideas. We really do and we're going to be very open to those and again Katrina and I our role in this fundamentally is Really integration agents on the part you see up there on the chart. Okay. We need your ideas. We need the ideas from the rest of the Members here at our job is really integrate those so with that I'm going to ask Katrina to follow up and Go through some of the individual parts of what we're doing great. Just as a comment first of all, thank you all for coming This is the opportunity That we need to take advantage of when you're submitting your ideas I want to give you a reinforcement The activity that we're charged to do and I know you all read Brett's letter But I want to emphasize that we're retaining the budget. It's not a decrement So the work that we're doing is to find ways of getting as Brett said more for no more So we're incentivized to do this because we're not asked to take a hatchet or a bologna slice out of what we have for Toes in the agencies and services and our initiatives are to take a look at how we could do the business more efficiently and effectively to get Down to getting that public dollar Further along in developing a capability a lot of us have engaged and I want to reflect Becky And I want to tell you combined we have less than 50 years of experience We actually age and dog years up here That I wanted to talk a moment about the team that we were blessed to be part of It is from every agency service the department It's the top players when we had our first meeting the first thing that we realized very quickly was we weren't going to have to Throw out bait to get these people to start thinking and bringing in ideas already We were already having conversations about the outcome. No meeting has ever met a scheduled timeline So we've got initiative we got energy and we're blessed with people who really want to make a difference So we're going to obviously do our best with whatever comes from you all Please to dr. Henry's comments do not take this as another You know Pendulum swing We need to do this for the country and we need to do it now our economic situation speaks for itself When we're taking a look at what is the insurance policy for the Department of Defense, which is the defense Component we need to make sure that we can provide products out to the warfighter and we need to do it Fast and we need to do it smartly So your ideas will be endorsed by us because we've had our own frustrations in the process and we're looking to hear from you What we don't see about ourselves We can hold up a mirror to ourselves, but you can tell us what you really say So what you're getting for input from me and our team is and certainly from Brett is we are going to very carefully self-assess So when you're out there and you're combining your interests into these five groups I endorse anything you put in the table that helps us understand what we can do better Now each of these team leads have been asked to provide a few minutes on what their focus areas are You know, there's five major groups and the letter that and the memo that was put on the table for you to look at all Of this is in there. So you're just going to get sort of a Reinforcement dr. Carter said to us, you know, I tell people once and I tell them again And I tell them a third time. This is a process. It takes time We don't expect all of our initiatives on our issues to come to fruition overnight We believe some of this is going to be a long term. We've already talked about how in the long term We'll carry it forward on nudes men People who are owners of this throughout the agencies and the services for the long-term implementation So we're not just talking about a great big unveiling of an effort and then it'll start collecting dust a month later It will have a long-reaching and enduring Input implementation for it. So without I'm going to turn over I want to sort of allow the leads to introduce themselves and their backgrounds and tell you about what their issues are But I also want to tell you as of yesterday when we met we already had a portfolio of initiatives on the table that were already in the process of discussion So we have a lot to try to accomplish and we will be culling those down to the top initiatives. We won't dismiss initiatives, but we're definitely going to have a Need to focus on the top issues to get to a September to seventh unveiling and we will have long-term Processes in place to try to uncover and implement the balance Good morning, I'm Becky Davies. I've been designated as the lead for the targeting affordability team Very fortunate. I have representation of about six or six of us on my team from all the services to include OSD and As Katrina stated the the things that we're really focused on are the first initiatives that were outlined in Dr. Carter's letter There's certainly other things that will be add. In fact, our group has actually added one additional Item so I'll just kind of run through that just in general terms We just kicked off all of our working groups last week So we spent two full days this week to be able to be prepared for our SIG meeting That's taking place on Friday, but the targeting affordability group one of the first initiatives We want to look at is how can we from a from a government standpoint Maximize the use of our will cost and our should cost estimates There are a number of things that I think we can do internal to the Services and to the department to use those will and should cost estimates and certainly on the should cost and will cost side We're going to need industry support and input to do that to maximize it We also want to look internally to see how we can drive affordability into our requirements process the requirements generation process is It's an intricate process But there's I think initiatives that we can bring forward to make it better To make it more transparent and to bridge it with the acquisition community much better than we do today We also want to look at stabilizing production rates and ways that program managers do not Reduce Production numbers without certainly the MDA's authority to do that and we also want to be able to look in joint programs Where one program can't pull out which would affect production rates for and for another customer Eliminating reduction or redundancy in our portfolios I think we need to be much more aware both across service and within services on our portfolios And how can we maximize similar? Initiatives or similar requirements The last one that we have is leveraging real competition and this one's going to be a tricky one because it entails a lot of data management Issues TDPs how do we decide in the services what we want to take inherent government? Responsibility for over the long haul and be able to request and contract for the right kinds of data packages That allows us to go out on real competition We have added one to our To our list it'll kind of sit in the parking lot for now until we really get up and running But we want to we want to really see what we can do in terms of life cycle management There are a number of issues both industry and government Going on that will help us I think realize some efficiencies across the total life cycle and we can't forget about sustainment It is certainly the largest cost driver Out there so those are in a nutshell the things that we're working on again got a good team going and I think Everybody will echo the same thing and we look forward to sharing what we're doing With you in industry and being able to get your ideas And your feedback as we go forward. So thank you Good morning, I'm Bob Griffin Director of acquisition for the Naval Facilities Engineering Command is the day job My team consists of myself Ed Harrington at the Army Michael Gill with the Air Force Cindy Shaver with the Navy and Elliot Branch also with the Navy My team's topic is sharpening contract terms and our focus will be gaining efficiencies in a minimum of four major areas The first is choosing appropriate contract types. You know, we'd like to be predictable for you guys. We're not right now Sharing the benefits of improving cash flow if we can help you improve your cash flow, we'll see a benefit in that targeting non-value added costs You know things that we ask you to do that. Maybe we don't even read but yet it costs both of us money and Improving the audit process on both sides of the equation. I think there's a lot of room for improvement there our approach is going to be to assemble working-level teams to focus on each of these areas and Work them hard and then bring that back to us. We'll find that and then take it up to our senior groups So that's kind of our approach to doing it now where you can help us You know, I know with confidence that there are things that we force you to do that drive You to be inefficient and you know, we we blame you for being inefficient or expensive in some cases But you're doing exactly what our demand signal requires you to do So anything you can give us, you know, we are very interested in seeing that working on that with you. Thank you Good morning, I'm Sean Crane. I'm the director for the Department of the Navy's office of small business programs I think I'm also the only one that has three full-time jobs. So Member of the Navy reserve as well. So if anyone sees my wife's in regards The team that that I've been asked to lead is on rewarding productivity and growth and as as you'll see as You go through the documentation and you look at the comments that Secretary Carter put out It's not just about just finding efficiencies, but how do we reward good productivity and how can we find? methods and look at the policies that we have that can reward industry partners and Inside of government as well for doing the things that are right the four focus areas initially and just as Bob mentioned and As well as Becky, you know, we're gonna be looking to take on additional areas as we see that they're appropriate The first one is aligning profit and fees to circumstances. We want to make sure that Not only are we getting the best value for the taxpayer, but that we're also rewarding companies that take on risk and That there's there's a measured way of Evaluating that so we're going to be looking for tools on how to better articulate how we can reward those that take on more risk to be able to help provide those tools and platforms and weapons systems that all of our warfighters need another area The second area is involving small business in a dynamic way within defense contracting both at the prime and at the subcontracting level and So I have a number of partners and peers within the Department of Defense who are very interested in seeing what we can do to help encourage competition and opportunity as we try to help Everyone improve and build on that industrial base The third area is rewarding excellent suppliers You probably have seen in the last few months The Assistant Secretary of the Navy for RDNA is proposing a preferred suppliers Report to reward Great suppliers. We're going to be looking at this pilot that the Navy is doing and we're going to be looking to see How do you reward your suppliers? How do you as industry? Take note of those that help you succeed and achieve where you succeed because we think you've probably been doing it for a Good long time and there's things that we can learn from the last one is going to be One that's very important and I think would probably be the biggest challenge for my team is and that's protecting the technology base and Looking to the future and how do we take the technologies that we're developing today so that in the future? We're going to have an industrial base that can support those technologies. We're going to have an ability to economically build on technologies today that bridges to the future so look forward to Working on this team feel privileged to have been asked to be a team leader And we certainly are going to be looking to see what ideas industry has in these areas force In the service acquisition arena most of you know that our service acquisitions in recent years have grown considerably Taking about 53% of the spend for the department in the past year As a result of that it's a target area for great savings I'll use an anecdote out of the Old Testament just to give you an idea of what we're looking at David at one point time As a combat mission support Individual went to the front lines to take some food to his brothers. He was drafted into an opportunity to fight the giant and in our world today the giant is budget deficits and The issues that we face in our national security in the national security arena he very quickly was outfitted with the armor of King Saul and I don't know whether a girl was standing beside him who said you really look stupid in that or if He realized that he would be unwieldy in that So he traded in the armor for a sling The critical point that we Have to make in the days ahead is how we can prosecute our national security strategy with The minimum technology the minimum services and I will tell you and looking across The way that we've done services in the last few years We have a lot of services that don't need to be performed And we have a lot of services that need to be performed that aren't being performed And what we would like to do is we would like to move away from those things that we don't need to Accomplish those things that we do need to do this. We need some good ideas coming forward from each of you We have two primary initiatives under the team. The first initiative is to Establish a department-wide structure for senior level oversight of service acquisitions We have pockets of excellence across the department What we would like to do is see that spread across the department in a way that Where we can take full advantage of an appropriate oversight structure in the way that we build our contract strategies Write our requirements and develop develop the support services that we need going forward We have we have some very concrete evidence from one of the services that was able to carry this forward and Gather metrics where it worked extremely well Some of you may know that as a part of the 2008 NDAA there was an effort to force all of the services to have this type of oversight structure and We the department shied away from that and so now we are looking at a way that we can put together an oversight structure that will Benefit the department in a very specific way The second element which kind of flows from that is as you have an oversight structure in place You begin to look at the way you do your services and we want to make sure that we are developing Refining and developing a process to ensure selection of proper contract type and development of proper requirements documentation So that we can put services on contract that we really do need in a way that is efficient There's some questions that I think You guys can help us answer First where are we as an apartment driving unnecessary cost in our service acquisitions? What is it that we're doing that is making this an inefficient process? What could we do differently to reduce and eliminate those unnecessary cost? What are the non-value added tasks from your perspective in our service acquisitions? Things that we probably do not need to do And in your view has anyone in the department done a good job in shaking cost out of the service acquisitions? And if so who and how have they done that if you can identify areas where you think we have done it? Well, we can use those as benchmarks for spreading that across the department Again with all of the folks here at the table. We want to thank you for the inputs that you will provide over the next few weeks Random would you shut off your mic there and that'll make it easier for the other guys. Thank you We're gonna Before we open up for questions. I have two comments. We actually have the fifth Working group chair is with us by telephone. Unfortunately. We don't have the technology now to let him speak So I'm sorry Jamie If I knew what you were gonna say, I would say it for you, but We'll have to follow up with that later and I apologize for that. We didn't anticipate that that need here It's Jamie Durnan and he is the Measuring productivity growth working group. Is that right? You'll notice we have all five working group tents up here, but there are actually only four people sitting behind it It's not that they each get to do 1.25 additional full-time jobs Nick is unable to attend we got noticed yesterday We tried to accommodate to get here as quick as we could but Jamie was going to try to stand in for him He's one of the team members, right? All right. Thanks. Appreciate that I also before we turn the floor open for questions I would like to thank The associations that were once again instrumental in getting the word out for this and making sure that many of the right People who needed to be here could be here on such short notice and I see a number of Those associations in attendance today and of course each of you has multiple people you can blame for your being here or or reward accordingly But but we really appreciate the collaborative and cooperative effort particularly on the kind of notice that we've had here So I want to extend our thanks to that regard as well With that I'll ask you to think about your questions. Here's the procedure that we follow as you know You'll raise your hand. I'll Note you you'll wait for the microphone You'll stand up and speak into the mic so the folks on the phone can hear you identify who you are and and who you're with or With whom you are I'm quite sure how to do that grammatically Anyway, and then you can ask your question. So do we have any volunteers who have a question that like to ask? Let me start with the microphone over here in the Third row on the right-hand side Elena if you would Hi, Bill Greenwald with Lockheed Martin and couple questions, but it's mostly about the inputting exercise The in the what industry inputs what criteria are you gonna be used for evaluation? What what we put in and the second is it does seem like these are kind of specific Is there going to be then it but it also doesn't seem like there's anything just to look at an overall General critique of the various areas. I mean, is there opening for us to do that as well in the Yeah, I can take that up absolutely So, you know, this is a I joked with dr. Hammer earlier when I was asked to come into the building I was asked that they you know wanted me to think outside the box They just didn't tell me one I had five sides on my box and one of them was the general counsel's side so the way where we need to Do this to receive serious industry input is we we I look at it as a funnel process We're gonna be as open and as wide as we can be to get initial inputs on various segments Our office will then I'll review those and we will work with the team leads With Jim and Katrina in particular to figure out wet buckets some of them may go into more than you know some of these may go into more than one bucket and Then enter them into their internal evaluation process at that point in time It is likely we will be reaching back to the people who've made specific Suggestions if they fit in the buckets now if there are more general suggestions And in fact we received one yesterday, which I found incredibly interesting that is more general and broad about how the department writ Large not just in these buckets could be doing something more effectively than that those suggestions will take directly to the SIG to the to the group so the My goal in this process is to have it be a process to be able to quantify the number of entries We have and as Katrina I think rightly pointed out and this is we have we're gonna be looking for low-hanging fruit initially But this will not be the end of the effort so there may be some very good Suggestions that we get from industry that will take longer to implement or maybe are out of our control but things we Can work with legislative affairs and the Congress to implement over a period of time and those will be kept But they may not make their way into the September Directives Nothing is off the table. Absolutely. Nothing is off the table. I think except getting rid of one of the services. Okay, yeah True efficiency, right? I think though you heard all of the representatives up here this morning say that the The ideas are not just limited to what you can do better But what do D can do better as well, and I think that's a very powerful suggestion I think we had another question right next to Bill there and I'll ask the Bread if you would when you answer the question kind of repeated so the folks on the phone can make sure they got it as well Thanks a couple of questions first one is you're looking for some very specific input from industry as to provide you with our Court sterling with aerospace Industries Association You're looking at very specific input from industry. You've talked about some general ideas Things that you want to look at on the government side Will you be providing us specifics on things you can do internally to streamline the process to make it more efficient for us? And then allow us to provide you with sort of our thoughts on those ideas Whether or not we think they'd work or not and the second is it goes to the September memo in what? Secretary Carter put out earlier the second page seems to indicate. He's going to put out very clear directives to the Various offices which looks like they're going to be budget reductions targets to contracts and we're on a very accelerated path Is that really what's being looked at is a budget wedge which will be Factored into the upcoming budget and are we sure that we're going to meet those numbers those of us who worked in Congress over the years and Live through Secretary Hamry's discussion about declining budgets We saw wedges used quite a bit and it created more problems and more inefficiencies and increased costs Actually Let me take the first one and if you guys want to cut this is not a budget drill. I'm gonna be very clear about that We anticipate That the budget will remain actually increasing in real terms. This is about us turning fat into muscle And and so it is not a budget drill We are looking for ways to improve efficiencies We will not replicate 46% growth over the last decade and we're looking over ways to improve our efficiencies internally We are the reason we're reaching out to industry in the manner We are is because we are very aware of the unintended consequences that sometimes occur To the industrial base when the department takes unilateral action So we do want to share and be transparent and open in the dialogue We don't want to get into a situation where Whether it's the auto industry or any other industry you can think of where if you if you're forcing profitability down in our key Customer bases that's just passed down to the parts suppliers. That's not what this is about This is about how we do our job better and how we can help you do your job better Yeah, I would just pile on a little bit and say Roger your point about about wedges In fact as we've talked to dr. Carter and mr. Kindle the whole point here is to do everything we can Find the areas that That really whether it's practices policies procedures behaviors incentives, whatever that may be where can we take those ideas those Ways forward and maybe take more risk You know in in shifting money from some areas to make more into or put some of those monies into product So the whole idea here is to do everything we can to avoid the The wedge issue going forward those are always a threat, you know understand that but I think in a nutshell That's really the point of all this is to do everything we can to avoid that I'm delighted to report that the Phone email interaction is working very well I apologize again to the people in the room, but I do have to ask if you are on the phone Please put your phone on mute. There's a lot of interference. It's making it difficult for everybody else to hear So if you're listening in please put your phone on mute Next question here in the front on the left. It's only your left David this Allen Schvottkin professional services counsel There's the acquisition system sometime referred to it ecosystem. It has a lot of cross-cutting Implications Jim you mentioned that one of the roles of the executive director is to be the integration agent So there's some things that around the table and there seems to be things in the system that are Driving costs that are either not represented here in the room today or maybe outside of AT&L DCAA DC MA some of the requirements side Do those only get addressed at the integration level if they're they don't fall nicely into one of the buckets And how do we see the commercial we only focus on things in the AT&L five side of the box Actually what the references that you made ie DC MA etc They're included in our database in other words if I need to reach out to get information from DCAA or OMB or GAO or Anyone I have full authority from Dr. Carter and support to do that from those principles So they will be included if I look at contract terms that has implications for buying services If I include or exclude a contract type that in facts Productivity or services does that get addressed in the contract type discussion in the services discussion Or at the integration level or at the SIG or not at all I get your point I thought you were thinking we didn't have a full cadre of support from the various expertise the department has to offer Yes, we do that integration. In fact, we have weekly team meetings because we anticipate It's not a vertical drop. In fact much of what we're seeing is redundancies across in certain areas You heard two of the members already speak to that in the use of contract types. So yes, we will be doing that integration Let's do another one here on the right side of the room, but the left side of the speaker Hey, David. Thanks for having us here JB burns from BAE. It's a procedural question And if it's possible to go to the chart that shows the flow Could you describe? Interface for industry with each of those five committees and then who would be the representation on the IWG From industry on the left side We'll need to go back to our CEOs and tell them how they are expected to play and also the various Businesses so if you could just generalize that answer for us and tell us how that's going to work for industry other than just the inputs That you already spoke into Sure, well the current Plan is that for all industry inputs the office of industrial policy will be the the belly button if you will for the department in both receiving the inputs and then working with Jim and Katrina to figure out where Those suggestions or input should be placed either in one or more of the teams or If it is something that goes above everything whether it's a question of auditing or so forth whether it goes directly to the to the SIG for suggestions My anticipation would be over time And it's a short amount of time that these team leads will be reaching out to individuals Who make these suggestions to obtain more clarity and fidelity and that will take place on a one-on-one basis With the people who make the suggestions and the team leads, but that our office will be the the belly button for the for the inputs The that is this this is that's our group. I'm sorry. I can't see you there, but that is the industrial policy group and It's my team many of whom are back here. So yeah All right On the front here then we'll go to the middle Bill Courtney with CSE Two questions. Dr. Gansler has pointed out that competitive sourcing even when the government team wins Saves a significant amount of money. I think 30% over a wide range of cases is competitive sourcing Part of what you're looking at and then secondly, Dr. Carter pointed out that acquisition is 400 billion of the 700 billion total defense budget And if the goal is to save up to 3% per year across DOD Is the personnel side of DOD the 300 billion part? Are they going to go to war on overhead such as on health care costs? If not, it would seem that acquisition would have to save per year over 3% in order to meet the department wide goal Under leverage Real competition, I think the competitive sourcing would be addressed there. So yes, I mean we've touched on that again It's our first week, but that is obviously one of the subjects will tackle And and on things outside of the purview of AT&L And you know some of the and the service executives are represented in the senior working group And I think where we'll see any kind of recommendations on the issues whether it's personnel or O&M or health care We'll be coming not through this five group that will work with industry specifically, but we'll be coming through the Internal military department recommendations, which will also be addressed as part of the initiative. I Have one question that's come in from the phone that that I would like to ask and is it the one I wrote to you Not not we have Actually, I'll tell you who this is from at the end of the conversation The question is on on in incorporating affordability into requirements, and it says it's difficult for industry to speak Excuse me, my phone just faded away to speak directly to the question of affordability and requirements when you're in the middle of actually negotiating that with the Military departments How do you expect industry to provide you comments on affordability of requirements and Email is sent through hushpoint So I actually can't tell from whom it came which indicates the seriousness I suppose of the question of can you can you expect it? How do you expect industry to speak frankly on things where where they're worried about the dynamics of that conversation? Okay, that's not the one I sent you no Well, I think you know we've just spent a week Going through from a government side on each one of the initiatives So I think probably the best way to handle it is to submit those through Defense procurement and let us factor that in as we start working through each one of our issues I mean, I'm not in a position to address that today, and I don't really think this is the right forum to do that And I just say but that's why I tried to make the point of we learn by experience So we have we all have a lot of anecdotes about what we could have done better and what we should have done better But I think if you think about this initiative is moving forward We may not let's just be honest in that particular instance with this this process may not address that concern But how do we if it is a mistake the department is making and it's not in the best interest of the warfighter in taxpayer How do we make sure we don't make that mistake again in the future? And that's why the process we're closely monitoring in industrial policy the sensitivity of competition sensitive information and proprietary information and we will take that very seriously and if there are reasons to Blind that even among our internal team. We will do so Could I add a moment? I want to make sure under understanding is clear out there that we're not looking for specific Issues that you're being faced with on the day you want to make it generic because it has to be long-term. I can't Combat ID has a similar issue. You can't fix the gray matter. You can only provide the tools So what we were doing is trying to make sure that we have an understanding of those things that are long-term and deep that can Be provided across the agency and on the implementation on a one-for-one basis We have to address those on a one-for-one basis So just to make it clear All right, let's come down in front and then we'll work back John Babba with Deloitte Consulting and I had a question about the under targeting affordability the comment on eliminating redundancy within the war fighting portfolios is that the charter of this group to actually make or offer decisions on elimination opportunities within that portfolio or is it a Interest in industry's perspective on process and procedures for effective decision-making on that That's what we're tackling first is the the process and the procedures to make sure that we on the government side are doing Everything possible to identify any redundancies that may exist and preclude them from going forward in the future It's entirely possible. You may come to conclusions that others don't like and And obviously that's part of the process of the ongoing feedback that Brett talked about earlier So if I could just comment on that I mean that's true You know we may we may come up with a lot of processes and procedures that we want to do in-house or things That we think is prudent for the government to do I think it's important. You may not like it But what we want to do is make sure that we work together So we're on a on a level playing field and a common understanding of how we want to proceed forward And then that we've heard you we've listened to you and we factored those things into the decisions that we make And that's clearly one of the critical dynamics that Time constraint is such that it's got to be done fairly quickly And I think the the memorandum that Miss Lamerton out that in advance of this indicates the need for those kind of regular Updates and since there isn't much time becomes really critical Let's go to one question in the middle and then in the back here Hi professor Steve schooner from the George Washington University And let me just more of a comment than a question and I'll do this to represent this Skeptics and the cynics who may not want to speak in this forum But let me just offer a few things to think about as you embark on this I guess the first one I want to start with is your first message one thing that we've heard time and time again today As you're all working second jobs nights and weekends doesn't inspire confidence It reflects the exact same problem that probably is the primary cost driver is the DoD gutted its Acquisition workforce and didn't invest in succession planning for two decades No one believes Shai Assad when he says he's going to fix it and none of the subgiants sign suggests it's going to be done Well, thank you. I think I received three semester credits I'll have my transcript changed of that I You know, I know there's skepticism internally or skepticism externally I Think dr. Carter has it dead on as does the secretary himself. We didn't get into this issue overnight This is not a decade on this is a 20 year problem. That's been compiling and being from the Midwest compounded interest is a very important thing to me So this is not we're not going to unwind this in September We we realize there are structural problems and we just need to do the changes now to prevent other people from doing them for us That are the best interest of our industrial partners So that we do incentivize and reward whether it's profitability or competition And we also make the internal changes That we need to make inside the department that prepares us for the 2020s We're not there yet and it's going to take some time. So Skepticism is fine. I'm I'm okay with skepticism But I want you to know that we are committed inside the building and that dr. Carter's finger is very sharp when it's in your chest I'm gonna put a hiatus on the questions at the moment because the fifth Issue group has joined us here and let Jamie Dernan come up and talk a little bit about his his issue group measuring productivity growth Thanks, Dave, and I apologize. I was trying to deal with productivity growth with US Airlines I was putting my 11 year old on a plane at seven o'clock this morning and it decided to take off at 920 So so we had a good conversation. I will be very short. I was on the phone I was listening to the other teams we I'm representing Nick Tarelli as Was this guy's Nick is the team lead for measuring productivity growth We are working very hard the big problem is is that We probably as much or maybe more than every other team here will need industry Both the defense industry in the private sectors Assistance and figuring out what measuring productivity growth is all about. I mean it's all about benchmarking We're gonna be reaching out not only internally inside the Department of Defense but also outside through Brett's office with industry Trying to figure out how industry benchmarks productivity how you how you measure growth and See how that applies to the Department of Defense. There'll be a lot of conversations. This is a rolling We will have something Substantive within the time that we're required but this will continue on because it's very important and it reaches across all Four or five of the teams and the initiative in general. Thank you All right, I think we have a question a couple more questions time for and so one back here on the backside I'm Ron Perlman. I'm from Holland and Knight and a member of the manufacturing division of the National Defense Industrial Association the question is in Connection with the affordability and efficiency drives that are being undertaken How is the domestic industrial base and the effect of these initiatives on the? Domestic industrial base, especially the mid-tier suppliers being taken into account If I could in in the spreadsheet that you should have access to that was the data to collection drive Device that Brett posted it is almost well. I should say we plagiarized each other It's pretty much the common data entry set and in there you will see that as an entry for us It's a component of all of our initiatives, so it's not just small business. It's also What we call special materials or our limited materials. I know there's another name out there I'm sure that talks about rare earth material and so anything from material to small industries that are ones of a kind like Paxi and others Those are considered part of the equation that we have to consider I just say my office is almost completely focused on this second and third tier issue because it is a it's a driving force and we Don't want to have Actions that we take that have these unintended consequences. It makes no sense for us To an essence support three or four prime Contractors if all of them are relying on the same second and third-tier vendor That's about ready to go out of business because of capital constraints on their cash flow, so we're very focused on that Second and third tier. I mean where we we look at backlogs. We look at health of industry And that is certainly a focus of our office Independent of this particular effort. Hi Neil Albert with MCR and also Representing NDIA's program management systems committee, but my question has to do with the services acquisition piece that Randall talked about He had in there. It's kind of a question in terms of definition He mentioned the statement that said that he's going to look at what you don't need and what you do need in terms of services and With the insourcing scenario that's going on today as well How does that play in there because we're all kind of wondering what we do need and what we don't need and Definitionally wise I'm we're more than happy to support but trying to figure out what it is Over the last few years as we have grown our service acquisition arena We may have moved some activities outside the government that need to be inside And if you have insights that would help us to better define inherently governmental for instance, that would be a good path to go down We you know you have to look at it from a philosophical standpoint Using contract the contractor community to support the services arena provides us some flexibility one of the issues that we may have is The way that our funding is is set up may be providing Impetus for us to contract out more than we would if we had a little bit greater Funding flexibility for our service acquisitions. So that's an area that may be ripe for looking at What we want to do is do this smartly most of you sitting in this room know Not just anecdotally but by experience that a lot of the service acquisitions that we have that are Characterized as non personal services may in fact be personal services And we need to I think tackle that issue and get it right. So that's an area that is ripe as well One last question. This will be our final one and then will and hopefully this will actually have a question mark at the end of it And I have one comment one question Comment is inherently government No, I taught him everything he knows though I'm Mike love from CSC and The comment is OMB is addressing inherently governmental I would hate to have redundancy in a DOD also Investigating that I would strongly suggest you don't get into that. The question is As I see it there's a significant defect in this process and that is filtering industry participation If the if the problem is a question of legal Flexibility and general counsel at DOD saying there's no way we can do that I would offer I think there's a lot of people in this room would offer their services to help DOD Get more flexible about getting that information. This has got to be a dialogue if it's just throwing things back and forth across the fence You're not going to get there Okay, I didn't see the question mark, but I get I get the drift of where you were going That's right I don't it's not meant to be a filter and it's and I don't mean to say this just an OTC issue This is we're trying to be efficient and as efficient as possible So we need to make sure we are collecting and bucketing appropriately the recommendations and suggestions and Trying to be efficient and streamlined in the way. We're getting them to these team leads These people are you know these folks in their first and only job our meeting Regularly internally as well So we'll these these meetings are taking place several times a week and all of this input will be put to them And then I would expect that they'll be direct interaction between the group sometimes more than one group So I think this is more of a process issue As opposed to legal issue, of course, there's a legal component to it We want to make sure we're collecting all the information we need to collect And make sure we a treat it appropriately and get it to the right people And it's just functionally a lot easier to do that through a single belly button than to have people running around the building With ideas in hand Let me make a couple of final comments before we wrap it up You go back to what dr. Hamry said at the beginning you'll see that he used the word we In a way that is broader than CSIS or his own entity that he's standing up here representing I know many of you And I know that most of those of you who I know Spent a lot of time working in the government or with the government on important national security issues I know that while you all have responsibilities to the people who pay your paychecks Almost every one of you in fact every one of you that I know and so I suspect everybody in this room Has a higher calling that they're working for as well here And I think what you see in this effort is at least the potential to exercise that very broad definition of we and Bring it into play in a very short period of time In a dynamic that if we don't do it as well as we can is likely to produce a worse outcome Rather than a better one. This is the game. We have we need to play it as well as we can my encouragement to you is Keep that broad definition of the word we in mind as we go forward here I want to thank the guests who are up on the platform because I know you all are trying to do that I want to thank all of you for your participation all of you on the phone For having gone through the technical challenges of calling in and I know that over the next few weeks This is going to continue to get a lot of attention. So thanks for coming and best of luck as we go forward from here