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[H.A.S.C. No. 107–29]



FOR FISCAL YEAR 2003—H.R. 4546







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FEBRUARY 20, 21, 27, MARCH 6, 12, 20, 21, and April 11, 2002



CURT WELDON, Pennsylvania, Chairman
HOWARD P. ''BUCK'' McKEON, California
J.C. WATTS, Jr., Oklahoma
LINDSEY GRAHAM, South Carolina
JIM RYUN, Kansas
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ROB SIMMONS, Connecticut
JO ANN DAVIS, Virginia

GENE TAYLOR, Mississippi
JOHN SPRATT, South Carolina
LANE EVANS, Illinois
ADAM SMITH, Washington
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania

Doug Roach, Professional Staff Member
John Sullivan, Professional Staff Member
J.J. Gertler, Professional Staff Member
Steve Ansley, Professional Staff Member
Roger Smith, Professional Staff Member
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Bob Lautrup, Professional Staff Member
Jean Reed, Professional Staff Member
Bill Natter, Professional Staff Member
Jesse Tolleson, Research Assistant
Daniel Hilton, Staff Assistant

DUNCAN HUNTER, California, Chairman
W. TODD AKIN, Missouri
CURT WELDON, Pennsylvania
JIM SAXTON, New Jersey
WALTER B. JONES, North Carolina
BOB RILEY, Alabama
ROBIN HAYES, North Carolina
KEN CALVERT, California

MARTY MEEHAN, Massachusetts
JOHN SPRATT, South Carolina
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ADAM SMITH, Washington
JOHN B. LARSON, Connecticut

Stephen Ansley, Professional Staff Member
Jean D. Reed, Professional Staff Member
Robert Lautrup, Professional Staff Member
Harry Cartland, Professional Staff Member
Katherine Gordon, Staff Assistant



    Wednesday, March 6, 2002, Department of Defense Acquisition Programs
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    Wednesday, March 6, 2002




    Weldon, Hon. Curt, a Representative from Pennsylvania, Chairman, Military Procurement Subcommittee

    Aldridge, Hon. E.C. ''Pete'', Under Secetary of Defense Acquisition, Technology, and Logistics
    Bolton, Hon. Claude M., Jr., Assistant. Secretary of the Army (Acquisition, Logistics and Technology) U.S. Army
    Sambur, Hon. Marvin R., Asst. Secretary of the Air Force (Acquisition) U.S. Air Force
    Young, Hon. John J., Jr., Assistant Secretary of the Navy (Research, Development and Acquisition) U.S. Navy


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Aldridge, Hon. E.C. ''Pete''
Bolton, Hon. Claude M., Jr.
Sambur, Hon. Marvin R.
Weldon, Hon. Curt
Young, Hon. John J., Jr.

[There were no Documents submitted for the Record.]

[There were no Questions and Answers submitted for the Record.]


House of Representatives,
Committee on Armed Services,
Military Procurement And Research and Development Subcommittees,
Washington, DC, Wednesday, March 6, 2002.

    The Subcommittees met, pursuant to call, at 2:04 p.m., in room 2118, Rayburn House Office Building, Hon. Curt Weldon (Chairman of the Subcommittee on Military Procurement) presiding.

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    Mr. WELDON. [Presiding.] Subcommittees will come to order. The hearing will begin.

    This afternoon the Military Procurement and Research and Development Subcommittees continue our tradition of meeting in joint session to receive testimony today from Pete Aldridge, Undersecretary of Defense for Acquisition and Logistics on the fiscal year 2003 Department of Defense budget request for modernization programs.

    Accompanying Secretary Aldridge are Claude Bolton Jr., Assistant Secretary of the Army for Acquisition, Logistics and Technology; John Young Jr., Assistant Secretary of the Navy for Research and Development and Acquisition; and Dr. Marvin Sambur, Assistant Secretary of the Air Force for Acquisition.

    Mr. Secretary, good afternoon. We welcome you and the service acquisition executives. We appreciate the difficulty of your task. And we thank you for your service and your leadership.

    The Administration has requested a significant increase in defense investment for fiscal year 2003. We appreciate the fact that $10 billion of the $48 billion increase in the budget is for, unspecified programs. Yet the general reaction of the request can be captured in the old phrase, ''Where is the beef?''

    I have had and continue to have major concerns about our ability to properly complete the current mix of modernization programs with the dollars projected in fiscal years 2003 to 2007 defense program. Even with the increase of $48 billion in the top line, we seem to be failing to sustain projected levels of procurement in our existing programs.
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    And we have a number of pressing needs that are not even addressed in this budget, as is evident by the services' unfunded priorities list and underfunded programs, like a follow-on Air Force airborne tanker, Navy Joint Primary Aircraft Training System (JPATS), an EA–6 replacement, the Navy multimission maritime aircraft, the Air Force multimission command and control aircraft, an Intelligence, Surveillance, Reconnaissance (ISR) replacement platform, a follow-on Air Force bomber and funding a space launch industrial base, to name a few.

    And to further complicate the equation, military health care costs are doubling at the rate of every five to six years. That is not going to make our modernization challenge ahead any easier.

    Military procurement definitely took a holiday in the 1990s. Had the Congress not added over $60 billion to the Defense budget than the requested levels since the latter half of the 1990s, the current situation would be even worse. Even with the fiscal year 2002 and 2003 increases, we are still falling significantly short of the Congressional Budget Office (CBO) estimate of $90 billion per year to recapitalize the force structure.

    Each year brings major cost increases, endangered and failed programs and shortfalls in procurement from the previous year's projections. Subsequently, equipment continues to age, bringing increased maintenance costs.

    Secretary Wolfowitz was recently quoted as saying that this budget could not permit the Pentagon to meet its objective of cutting the average age of tactical aircraft or its goal for defense science and technology.
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    The list of priority programs experiencing cost growth, restructuring or cancellation continues to grow. Examples include, Navy area, SBIRS Low, SBIRS High, F–22, Comanche, DDX, and so on. Comparing the last future year's defense program provided to the Congress with the current plan indicates we now intend to buy 14 fewer F–22s and 15 fewer F–18s than originally planned in the next three years.

    In shipbuilding we continue to have to dig ourselves out of a $2.9 billion hole in prior years' shipbuilding cost overruns with at least $1.6 billion of that amount to be paid off through 2006.

    The Comanche helicopter program has now slipped for the sixth time, requiring another $1.5 billion to complete Engineering Manufacture and Development (EMD). We have not gone over the falls yet, but we can hear the roar of the white-water. Too much of our time and our effort seems to be about inputs and process, defining new buzz words and making marginal changes to the acquisition process.

    We hear about capabilities-based versus threat-based strategies and procurement. Whether our force structure should be threat-based or capabilities-based can quickly become a nonproductive chicken-and-egg discussion.

    Similarly, much of the current debate is about transformation, when transformation is simply about making long-overdue institutional cultural reform and employing technologies in innovative ways to meet evolving requirements, something the private sector does every day.
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    Then there is evolutionary acquisition and spiral development. How spiral development is substantively different from block upgrades, like in the F–16 program, is difficult for us to discern. The Pentagon sets the requirements. If some programs have sought to achieve the near 100 percent solution in the first unit of production without adequate consideration of cost or technology readiness, then that has been the result of shortcomings in the Joint Requirements Oversight Council (JROC) process and Office of the Secretary of Defense (OSD) management. Such failures require management changes, not name changes.

    Unfortunately, while we debate issues of terminology and process, too often the reality continues to be aging equipment, program delays, reduced scope of work completed and the fewer units of systems produced at ever increasing unit cost.

    We need fundamental rather than incremental change in the acquisition system, change that assigns responsibility and provides for accountability and program execution for both the department senior leadership and in the Congress. Call that change evolutionary acquisition and spiral development if you will, but we must ensure that spiral development does not turn into the acquisition equivalent of when you get to the fork in the road, take it.

    Acquisition programs must have requirements, valid cost estimates and realistic schedules. And the testing community and Congress need to be aware of what they are. If, Mr. Secretary, you need additional legislative authority to effect the fundamental change required, I hope that you will let us know. We want to work with you to do whatever it takes to make the acquisition system work more efficiently and effectively. Our ability to build and sustain the forces we need depends on it.
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    Before proceeding with testimony, I would like to recognize my colleague from California, chairman of the Military Research and Development Subcommittee, Mr. Hunter, for any comments that he might like to make.

    Mr. HUNTER. I want to thank my good colleague and cochair, Mr. Weldon, and thank him for his leadership.

    And I know we got a vote on here, so let me just say, Mr. Secretary and gentlemen, thank you for being with us. I think Curt has laid out very effectively the challenges that we face together. And I look forward to your testimony. And we will ask a few questions.

    Mr. WELDON. Thank you, Mr. Hunter.

    I would also like to recognize our good friend and ranking member of the Procurement Subcommittee, Mr. Taylor, for any remarks he would like to make.

    Mr. TAYLOR. Thank you, Mr. Chairman.

    And I also want to welcome the secretaries being here today for this.

    Because of the time restraints, I will go ahead and yield my time to the gentleman from Massachusetts, Mr. Meehan.

    Mr. WELDON. And finally we would ask our good friend and ranking member on the Research and Development (R&D) Subcommittee, Mr. Meehan, for any comments he would like to make.
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    Mr. MEEHAN. Thank you, Mr. Chairman.

    And again welcome to all the secretaries.

    Secretary Aldridge, I am pleased that you are appearing before us today. And I commend your leadership for pushing the department to reach higher, to reach farther and to look within to reevaluate its traditional manner of doing business.

    The present war against terrorism, indeed the success in Afghanistan resulting from a reenergized acquisition community is a prime example of what can be accomplished when we couple technical and programmatic innovation with political will.

    Secretary Aldridge, the budget that we have before us is replete with terms ''spiral development,'' ''accelerated acquisition,'' ''capability-based requirements,'' ''core competencies,'' all relatively ambition phrases that suggest streamlined procurement.

    Mr. Secretary, let me make no mistake. I am supportive of the desire to field things quickly. I understand the desire to accept both technological and budget risks to achieve programmatic acceleration, especially during this period of conflict. But I am unsure that we, that is, that all members of the entire acquisition community, have come to fully recognize and realize the consequences of marching down the spiral development path.

    I am concerned that we are about to embark on a course of action fraught with mistakes and missed opportunities and potential exploding cost. And I fear that each weapon system might eventually resemble an overburdened Christmas tree soon weighed down with layer upon layer of the latest technological ornaments.
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    Now, I will take a back seat to no one when it comes to wanting for our uniformed personnel the best technology our money can buy. But we have to be concerned that the taxpayer receives the best buy dollar for dollar. And over the past several years it seems that we have seen exploding acquisition in operational costs due to a lack of planning. And I am concerned that we are now using acquisition jargon to paint plain old bloat as transformation.

    President Bush talked about leap-ahead technologies at the expense of evolutionary ones. The fiscal year 2003 budget appears to have just tacked more revolutionary concepts, such as Unmanned Combat Aerial Vehicle (UCAV), into a force that will be predominantly engaged with buying evolutionary systems, like F–22.

    Similarly, the new investments at R&D necessary to really transform our military seem to be more intended to support growth in missile defense.

    I am also concerned about the phrase ''capabilities-based requirements.'' We have three advanced fighters fully funded at a time we are engaged in a very expensive war on terrorism against enemies with no advanced aircraft in their inventories.

    Finally, I am concerned with the many of the acquisition strategies being embraced in this budget that seem to be oversight light and are embracing structures that seem to be oversight-proof.

    Finally, Mr. Secretary, I think, although in the past Administration maybe the last two people that have been in your position have sort of laid back when it comes to some of the oversight interest, on Monday, for example—and I do not know how much time, Mr. Chairman, there is for the vote. Just cut me when it is—on Monday the Boston Globe did an article documenting an investigation by the General Accounting Office (GAO) into the possibility of fraudulent work conducted under the Ballistic Missile Defense Organization (BMDO) auspices a few years ago.
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    And I do not want to argue the facts of the investigation. I just wonder whether it is better for those types of issues to be investigated by your office rather than the GAO. Your office, Secretary Aldridge, is responsible for the integrity of weapons and procurement development. And I for one member would prefer to see these types of inquiries and investigations uncovered by your office if in fact they do exist.

    I know a few years ago the GAO conducted an investigation as to whether the 11 ongoing antiarmor programs in Department of Defense (DOD) were in sync with the diminished armor threat. And again, that is the type of thing that I think is better, Mr. Secretary, coming rather than from the GAO investigation, I think it is better with your office and in line with your office's responsibilities to ensure that threats and programs mesh more effectively.

    I, as one member of this committee, do not like to wait to see a newspaper to uncover—particularly a newspaper in my home state—to see these things associated with various programs. And I think the only way to ensure that that does not happen is for your office to assist and assert its authorities over military service procurement programs.

    It is one of the things that I would like to see more of, oversight in your office to see to it that the performance of military service acquisitions are in line and proper. I know that the relative power between the OSD and the services ebbs and flows.

    And I am hopeful that your administration will be the tide that will be coming in on these oversight issues. And I am looking forward to asking you some specific questions.
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    Mr. WELDON. I thank my colleague for that statement.

    I would like to now turn to the distinguished ranking member Mr. Skelton for any comments he would like to make. We appreciate you being here. We know how busy you are.

    Mr. Secretary, we apologize for the vote. It should be a quick vote, one vote. And so we will be returned. We will go into recess until such time as we return from the vote.

    Thank you.

    Mr. ALDRIDGE. We will be here. Thank you.


    Mr. WELDON. The subcommittee will reconvene. Subcommittees will reconvene.

    Mr. Secretary, again it is a pleasure to have you and the acquisition chiefs here with us. We look forward to your testimony. Feel free to realize that we will place your entire statement in the record. And you may make whatever comments you would like before we get to questions.
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    And we will be operating under the five-minute rule so that we do not keep you here forever. And we will go through one round. Then if there are more questions we will go back to a second round.

    So, Mr. Secretary, thanks for being here. And thanks for your service to the country.


    Mr. ALDRIDGE. Thank you, Mr. Chairman. It is a pleasure to be here this afternoon.

    Mr. Chairman, Congressman Hunter, Congressman Taylor, Congressman Meehan—I was going to say Congressman Skelton, but I see he is still voting—and members of the subcommittees, it really is an honor to have another opportunity to appear before you to discuss the President's 2003 budget request for the Department of Defense.

    In the interest of time I will keep my opening remarks brief. As you have indicated, I have provided a formal written statement for the record.

    Transformation is the central nonwar objective of the Department of Defense. The President reaffirmed his commitment to that objective in a speech from the Citadel last December. Among other things, he characterized our need to transform as ''the military and moral necessity of our time.'' And he described our task as the redefinition of war on our terms.
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    Transformation will be a formidable undertaking in its own right. But as Secretary Rumsfeld has repeatedly said, our military must do three different and difficult things simultaneously. Not only must we prepare for the future by transforming our defense establishment, but we must first and foremost fight and win a worldwide war on terrorism. And we must restore our forces by making investments in the procurement, people, readiness, infrastructure and modernization.

    We are juggling three balls at once. Dropping any one of them will not serve our national interest now or in the future. Balance is the key. And balance is the central characteristic of this budget.

    The activities of my office are important in these transformational efforts. The transformation of our nation's defenses simply cannot succeed without transformational acquisition, transformational technology and transformational logistics. The implied predicate is acquisition excellence.

    Early last year during my confirmation process before your Senate colleagues I reduced my agenda for acquisition excellence to five goals. These goals are outlined in detail in my written testimony, so I will not address them all here today.

    But I would like to mention one of these five goals because it holds special interest for the Congress. In fact it is my first goal. And its placement on the list is not accidental. That goal is to achieve credibility and effectiveness in the acquisition and logistic support process.
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    The department has records of cost overruns, long cycle times, schedule delays and other performance problems that we must address.

    I am pleased to report to you this afternoon that in the ten months since my confirmation Acquisition, Technology and Logistics (AT&L) has made significant progress with this goal. Let me highlight a few of the accomplishment that serve as benchmarks. And I refer you to my written testimony for additional detail.

    We have streamlined our acquisition process by modifying the composition of the defense acquisition board to include the service secretaries and the elimination of some coordination steps.

    We are reducing cycle times in weapons systems with the use of evolutionary acquisition, also known as spiral development.

    We are employing a strategic approach to acquiring services, one of the largest costs to the department.

    We are implementing a future logistics enterprise that will greatly improve logistic support to our military forces.

    We are holding programs accountable. For the first time since it became law two decades ago Nunn-McCurdy legislation has been enforced. And we are using more realistic cost estimates for major weapons systems. This policy change has resulted in an increase into our budget by $3.7 billion. This is painful for the military department. But the policy is so fundamental to bringing credibility to the acquisition process that I contend that the initial pain will be worth it. Each of you should be able to support a given weapons system with confidence that our system will ultimately cost what we tell you and your constituents it will cost.
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    Realization of acquisition excellence, like the goal of transformation that it underlies, will require that we embrace some change in the way we do business. The watch words are ''speed,'' ''agility,'' ''flexibility,'' and ''innovation.'' The relationship between your committees and my office will help realize these watch words as we wage war, transform and modernize.

    Mr. Chairman, that ends my formal or verbal presentation. I would like to propose that we hear from each of the service acquisition executives. And then we could respond to questions, if that is okay.

    Mr. WELDON. Thank you, Mr. Secretary. Thank you for your statement and for your brevity.

    [The prepared statement of Mr. Aldridge can be found in the Appendix on page ?.]

    We will turn to Secretary Bolton.


    Mr. BOLTON. Thank you, Mr. Chairman. And good afternoon, also to Chairman Hunter, Congressman Taylor, Congressman Meehan and Ranking Member Skelton. It is good being here and to provide you this afternoon some brief comments on the state of the Army in terms of acquisition, logistics and technology.
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    I do have a written statement and, with your concurrence, will put that into the record.

    The Army is making significant progress toward achieving our transformation goals to meet the challenges we are likely to face in the years ahead. We are developing technology to fill a full spectrum force that is more strategically responsive.

    In the near term we are selectively recapitalizing our legacy force and fielding the interim force to bridge the capability gap between our current forces and the objective force.

    In the acquisition, logistics and technology community we are working on all three paths of the Army's transformation simultaneously. The legacy force, the interim force and the objective force.

    The first path, the legacy force, focuses on our current inventory of equipment. Through our recapitalization program we are rebuilding and selectively upgrading 17 aging systems to enhance warfighting capabilities.

    The interim force, for which we are acquiring the family of interim armored vehicles, is our transition force to bridge, as I said earlier, near term capabilities gap between our heavy forces and our light forces.

    Finally and perhaps most significantly we are developing the concepts and technologies for the future combat systems, or FCS, our largest single investment in science and technology. We aim to provide new and advanced capabilities to the warfighter as fast as possible so that they can accomplish any mission anywhere in the world quickly and decisively.
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    Our future combat systems will use spiral development. We have some ongoing programs, such as the Army's Warfighting Information Network Tactical, called WIN-T, the objective tactical communications infrastructure. And that uses commercially available technology.

    The Comanche program was recently restructured and is also taking advantage of this approach.

    I also believe that we need to integrate testing earlier in the development of our new systems. In essence we need to make sure that testing is a part of the development process and not merely an addendum scoring the program at its conclusion.

    One other point that I would like to make is on the health of the defense industry and its industrial base. This is key to the Army's ability to continue to provide innovative technology and technologically excellent systems and equipment at favorable and competitive prices. The mergers in the defense industry that followed the end of the Cold War have left most of these firms stronger. But the consolidation has brought increased challenges to maintain price to technological competition.

    I fully support the department's initiative to maintain competitive and competition wherever possible. When that is not possible, one of our challenges will be structuring business arrangements with sole source suppliers to ensure better results through the use of contractual incentives.

    I also recognize that our government-owned production and maintenance facilities, our arsenals and depots are an important part of the total industrial base. In some cases these have unique capability that would not exist except for government ownership. When the private sector can perform the same functions, we must ensure substantially equal opportunity for both public and private to compete for the work.
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    This being said, I also fully understand the requirement to comply with all the statutes regarding these facilities.

    As we continue to meet the current needs of the nation and transform to meet the future needs, we ask for your continued support of the Army. Our motto, ''Persuasive in peace, invincible in war.''

    That concludes my opening remarks. Thank you very much.

    [The prepared statement of Mr. Bolton can found in the Appendix on page ?.]

    Mr. WELDON. Thank you, Mr. Bolton.

    Secretary Young?


    Mr. YOUNG. Chairman Weldon, Chairman Hunter, Congressman Taylor, Congressman Meehan, Congressman Skelton and distinguished members of the subcommittee, thank you very much for the opportunity to testify today on Marine Corps and Navy fiscal year 2003 acquisition programs. And I appreciate you making my written statement part of the record.
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    In 2001, the Navy and Marine Corps team represented U.S. interests and provided presence throughout the world. In September last year that presence became immediately available response capability. You all know well the essential role played in Operation Enduring Freedom by carriers, amphibious-ready groups, sea-based aviation and marine ground forces. The people and their equipment have performed magnificently delivering combat power from the sea against a land-locked nation.

    The fiscal year 2003 budget preserves this demonstrated capability placing first priority on sailors and marines and their training.

    Next, the budget addresses the readiness of the equipment of our Marine and Navy forces through investment in spare parts and repair activities for current systems, modernization of existing platforms and procurement of new weapons, aircraft and ships.

    Finally, the Navy has increased the RDT&E account to make investments in new systems and technologies for our naval forces of the future.

    Within the available dollars the fiscal year 2003 budget strikes a good balance among many competing demands. Your Navy and Marine Corps team are working hard to make sure that every acquisition dollar buys the maximum amount of capability.

    A number of key principles are guiding our efforts to improve and change how the Marine Corps and Navy buy technology and weapons. First, we must improve and leverage the equipment that we now have and will use for years to come. Improving sensors, installing data links and networking the command and control systems allows our current asset to fight more effectively.
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    Secretary England has testified before this committee about the quantum improvements in warfighting effectiveness that come by coupling evolutionary improvements in existing systems to new operational concepts and tactics.

    Second, we are working to properly fund and carefully manage the ongoing modernization programs. To enable the transition to new capabilities, we must first have, as already has been discussed, solid stable funding for our ongoing programs, as well as a more businesslike approach to acquisition.

    After years of underfunding, the department's fiscal year 2003 budget request represents a significant improvement in building that foundation. Many factors have contributed to the cost growth of current ships under contract. And they similarly apply across the spectrum of Navy and Marine Corps acquisition programs.

    The Navy has taken steps to fully fund the projected cost of ships requested in the fiscal year 2003 budget, seeking to avoid new prior year completion bills. Cost growth on ship construction contracts has reduced the confidence of the office of the secretary of defense and the Congress and our ability to manage these major capital programs and eroded our solid business foundation.

    The Navy is committed to restoring that confidence and building stable programs to avoid impacting other programs because of cost growths.

    Further, we are placing greater emphasis on understanding the potential for technology or requirements changes to grow the cost of our existing acquisition programs.
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    Spiral development and backfitting of technologies may be the best approaches to ensure that we avoid cost growth and make the proper trades between our competing investment priorities.

    Finally, the Navy and Marine Corps are looking to the future. A number of programs will deliver new capability, which will provide the tools necessary in an uncertain threat environment. DDX and the Joint Strike Fighter are key examples of programs that will provide survivable, flexible capability which can be used by the Marine Corps and Navy team to hold all assets of our future adversaries at risk.

    In the fiscal year 2002 budget the Congress played a critical role in providing the budget resources necessary to keep this stable foundation under our current programs. And the department is grateful for your support. The fiscal year 2003 budget builds on that foundation and these principles to prepare the Navy and Marine Corps for the future. Today the forces of the Navy and Marine Corps remain forward deployed and are protecting Americans' strategic interests near and far as an essential part of the joint force.

    We have the finest naval force in the world. While we face a number of challenges, such as recapitalizing an aging infrastructure, fighting both asymmetrical and symmetrical threats. We are clear of purpose and focused on that future.

    Thank you again for letting me testify. And I look forward to the questions you may have.

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    [The prepared statement of Mr. Young can be in the Appendix on page ?.]

    Mr. WELDON. Thank you, Secretary Young.

    Secretary Sambur.


    Mr. SAMBUR. Thank you. Thank you, Congressman Weldon, Chairman Hunter, Congressman Taylor, Congressman Meehan, Congressman Skelton and distinguished members of the subcommittees. Thank you for the opportunity to appear before you today to discuss the president's proposed fiscal year 2003 procurement, research and development program for the Air Force.

    I have provided a written statement for the record and, knowing that you all have plenty of questions for us, will keep these remarks brief.

    First, let me thank all the members of these committees for their longstanding steadfast support. With your help, America's Air Force is providing the critical asymmetrical advantage of unquestioned air and space dominance as we confront the challenges of the post-September world.

    The Air Force continues to embrace a balanced time-phased modernization program that addresses all of our core competencies. But the budget before you this year does mark an important departure.
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    Thankfully our extended post-Cold War period of curtailed modernization budget is over. The president's budget calls for a near 20 percent increase in Air Force procurement to $28.3 billion. That will allow us to more aggressively address the challenges of aging aircraft and space systems, overtaxed and outdated communications networks and decaying infrastructure.

    As important as the additional money is, it is only half of the equation. Equally critical is how we spend that money. And we are determined to change the way we do business. We must stop the trend that has led to longer and longer cycle times for moving new technologies from the lab to the battlefield. And we must forever break the trend of schedule slips and budget overruns.

    The Air Force, working with Secretary Rumsfeld and Secretary Aldridge, is reinventing its acquisition process. We will make collaborative spiral development not merely a buzz word but an effective means of delivering new capability to our warfighters in manageable increments that provide learn-and-use opportunities that enable the warfighters to get the state-of-the-art equipment they truly desire and deserve.

    We are requiring our warfighters and acquisition professionals to work together as never before to draft more realistic requirements and develop more reliable acquisition strategies. We are reviewing all of our processes under our control to eliminate steps that cost time and money but do little to improve results.

    We are, under the leadership of Air Force Undersecretary Peter Teets, giving unprecedented attention to space programs. We are overhauling our training with an emphasis on teaching our people to innovate. And we are taking steps now to ensure that our workforce, half of which will be eligible to retire by 2005, is renewed and maintains its critical edge.
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    Mr. Chairman, the unwavering commitment of our senior leadership, up to and including the president, combined with your steadfast support, will ensure that our airmen have the tools they need to do whatever mission confronts them. We owe them nothing less.

    With that I look forward to your questions.

    [The prepared statement of Mr. Sambur can be found in the Appendix on page ?.]

    Mr. WELDON. Thank you, Secretary.

    And we thank each of you for your statements and for your service to the country.

    And in response to some comments made by Secretary Bolton and concerns of you, Secretary Aldridge, we have scheduled a procurement hearing on the whole defense industrial-base issue on March the 19th. And we plan to look at length at the concerns that we have. And many of the things that you have been addressing will be the subject of a hearing before this committee on that date.

    I am going to put myself on the five-minute rule along with everyone else because I think it is only fair with all the members here that we give members all the chance to ask questions. So we will put the five-minute rule up for myself.

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    First question, Mr. Secretary, deals with we are going to have an amendment tonight, a vote on the Export Administration Act. There are feelings that are mixed on this committee about whether or not we should take DOD completely out of the process and give Commerce kind of the upper hand in this.

    All of us want to see business be able to expand and grow their business base. That is not the question. Many of us feel that there needs to be a role for DOD to play, especially on the most sensitive technology, while at the same time allowing an expedited process for the more routine technology.

    Perhaps you could give us your personal comments, as a business executive yourself and now in a key role, as to what you think is the best guidance and counsel for this committee.

    Secretary ALDRIDGE. Thank you, Mr. Chairman. I do have some comments.

    In my original confirmation hearing, I outlined five goals for myself and my office, and one of which is the health of the defense industrial base.

    Clearly one of the contributing factors to that health is the ability to sell our products effectively, efficiently throughout the world. And the process of export control is one of the barriers and hindrances to make that happen.

    It is certainly the view of the Department of Defense that we need to protect those items that are critical to our national security. But my personal view is the munitions list in which we require license application is far too long. And we are in the process now of addressing the munitions list to try to get that list down to those really essential functions and not require so many license applications.
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    Just a piece of statistics, in looking at the list it is our estimate that if we can get the list down to something reasonable we can avoid about 26,000 license applications to the Department of State.

    So the process is really a hindrance to our competitive environment around the world. And we need to do something to make that process work much more efficiently than it currently is. And I would support any actions you would take to give us more flexibility to do that.

    Mr. WELDON. But you still feel there should be some involvement in the secretary and that office; is that correct?

    Secretary ALDRIDGE. Yes, sir. I do not see how you can eliminate the Department of Defense from the process because we have to identify what those critical technologies are.

    Mr. WELDON. I thank the secretary.

    Mr. Secretary, we have a real dilemma in this committee on the A–76 process. When I took members across the country last August, every base that we went to we heard complaint about A–76. It was not that they did not want to do the right thing. In fact we had leaders of our bases achieving privatization efforts and achieving the ultimate goal. But the A–76 process itself was just making it extremely difficult and, in their minds, extremely inefficient.
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    And we have to address that issue this year because that became a very contentious issue that almost cost us our defense authorization bill.

    And realizing that that task force report is not going to be out until May, we are going to start marking up our bill in perhaps late March, early April, what kind of counsel can you give us today? And can you give us some guidance on how we can reform the A–76 process prior to the beginning of our markup process, which will help us avoid the kind of controversy that we had last fall?

    Secretary ALDRIDGE. Mr. Chairman, I appreciate the first two questions being noncontroversial. But I think there is a agreement among everyone who participate in A–76 that the process is broken. I am not sure I have any magic answers to how to fix it. But I do know that the time it takes to go through the process is far too long. In fact it is inhibiting some of the smaller businesses from participating because they cannot stay around for the two or three years that it takes to get something done.

    I am a member of the A–76 review panel, which the GAO director, David Walker, is chairing. We are in the process of trying to come up with some solutions and fixes to the problem. I am not sure that I can say that I have the magic answer. But it is very clear we have to do something to streamline the process to make it fair to both the public and private sector.

    And I think there is views among both sides that it is unfair, it is cumbersome and it is broken. It is clear it has to be fixed. But I do not have any answers exactly how to fix it at this point.
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    Mr. WELDON. We need your help over the next month to work with us to provide guidance to us so that we do not do things in the end just make the process even worse.

    My time is expired, so—and we will have additional rounds for all the members.

    But I will now go to the ranking member on the committee, Mr. Taylor.

    Mr. TAYLOR. Thank you, Mr. Chairman.

    I want to thank all the secretaries for being here. And I very much want to commend your service to our nation.

    Secretary Young, a couple weeks ago the Chief of Naval Operations (CNO) and the commandant of the Marine Corps appeared before this committee. And I reminded them that the fleet they have today was put together when they were young lieutenants and that the 318 ships they have inherited someone else put in the budget over the past 20 to 30 years.

    Looking at the five ships in this year's budget and knowing that the typical life of that ship is 30 years, I also gave them, I think probably unduly, a hard time in reminding them that the legacy they are leaving to some young lieutenant is a 150-ship Navy. That is the facts.

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    We have been playing—we are going to play catch-up next year for ten years now. And I would think this administration, which was elected by the American people saying that help is on the way, they have been pretty accurate in the case of the Air Force. They have been pretty accurate in the case of the Army. They certainly have not been accurate in the case of the United States Navy. Five ships is too few ships and too fewer than even the Clinton administration was putting in the budget in its worst year.

    Having said all that, my colleague from Pennsylvania is putting together a plan that would eliminate the $10 billion contingency fund that the president is asking for and instead have this committee do its constitutionally mandated responsibility of saying where that money should go.

    If it is the will of my colleague from Pennsylvania and the majority on this subcommittee to do and if a billion or $2 billion were made able for shipbuilding, in addition to the five ships that you have asked for, what would be your priorities?

    Secretary YOUNG. Well, Secretary England has testified that the, I think, the highest priority he would sign next would be an additional Guided Missile Destroyer, (DDG). And that is what we are certainly well-qualified to build in terms of the industrial base and our skills and our confidence in the cost.

    There is at least one factor in how the shipbuilding program was formulated, and that is having the confidence to proceed. Because many classes of ships, as you well know, sir, are entering into production, if you will. Virginia class we still do not have the first submarine. We are getting posture to accept the first one in 2004, at which point we will have the confidence to ramp up that production.
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    Same is true for the Amphibious Transport Dock, (LPD). Same is true for DDG—or for the T-AKE. I apologize.

    So the first choice, I think would be DDG. And we, as you know, have put a piece of advanced procurement money to go with the funds that the Congress has provided for an additional DDG.

    I think everyone continues to watch closely, but there have been discussions in the department about LPD. It replaces some 30-plus-year-old ships. I think the program is gradually getting to that point I talked about in my opening statement of having more confidence. The first ship is 19 percent complete. The production design is about 80 percent complete. The design drawings are 95 percent complete. So LPD would be pretty close behind, both because we need it, the age of the ships and because the confidence is growing we can deliver that program.

    Beyond that, too, we have an increasingly similar level of confidence I think in Virginia class. And I think the days are not far away where we could all confidently say it is time to increase Virginia class production to a couple a year.

    But in each case there is some risk in taking that step. And that is part of why you see the budget was built the way it is.

    I think that is what I would offer.

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    Mr. TAYLOR. Mr. Secretary, the other request that I would like to publicly make of you is that, as you know, a number of bad hands were dealt to the American taxpayer as a result of the events of September 11th, starting with the loss of life at the Twin Towers and the Pentagon and the airplanes.

    But in addition to that there was some repercussions in our nation's economy, one of which involved the two cruise ships that were being built with taxpayer-subsidized loans or taxpayer-backed loans.

    One option that has been proposed for them, since the company that was to have purchased them has declared bankruptcy and since the American taxpayer is already on the line for the repayment of those loans whether we like it or not, was to try to find a military utility for them, be it a floating hospital, floating barracks or command and control ship.

    If I recall last year's budget mandated that the Navy take a look at those options. I was curious if you have had the opportunity to look at any of those options, because we, as the taxpayers, we are already stuck to the tune of several hundred million. And as the old-timers used to say, ''You have lemons and you have lemonade.'' We have some lemons on our hands. And would think the only reasonable response for this nation is to find a use for them rather than—I think the worst alternative would be to scrap them for less than a penny a pound for the steel.

    Secretary YOUNG. Congressman, one, I have personally seen the ships. I was in the area in January. Seen that construction, as you well know, is well underway. I think we have tried to respond and are responding to the direction from Congress. Naval fleet systems command went to the shipyard, took a look at the construction and the design and the stage of the ships as in how difficult it would or would not be to make changes that would make them more suitable for Navy and Marine Corps purposes. That report is coming together.
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    And I would not want to prejudge the decisions. I can tell you also in the operational Navy there has been an open mind to thinking about how those ships could be used in any way for command and control or for berthing, as you said, or other purposes.

    The only initial report I can give you is what you have probably heard already. And that is there is some concern that ships were built to commercial standards and adapting them to certain military purposes looks like a very hard do.

    But if you will let us keep assessing all the data, we will bring you an answer. And I understand exactly what you said about the fact that it would be nice if there was a solution for everybody.

    Mr. TAYLOR. Could I request of you—and since those folks work for you and not for me—that I be given the opportunity to visit with them before the final product?

    Secretary YOUNG. Absolutely, sir.

    Mr. TAYLOR. Okay.

    Mr. Chairman, thank you very much.

    Mr. WELDON. Thank you, Mr. Taylor.

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    Chairman Hunter?

    Mr. HUNTER. Thank you, Mr. Chairman.

    And gentlemen, thank you for your service and for your statement. I thought they were excellent statements.

    Secretary Aldridge, let me go to a couple of things that we have done, a couple of initiatives that we have undertaken and just get a response from you.

    We have seen the same problem that you have seen, which is trying to get technology into the field quickly and also trying to take advantage of this great creative base that we have in this country in terms of people that can build a better mousetrap but sometimes are not major players, are not the big guys, are not necessarily people that know how to deal with this large bureaucracy that we call military acquisition.

    And we looked at a way to be able to get these people into the mix so when they have a better military capability to sell the country, we can get it quickly. One thing we came up with was the so-called Challenge Program. And the Challenge Program, very simply—and I have talked to you about it in my office last year before we trotted it out in the committee and on the floor and in the conference—was simply that an innovative company that had either a system or a subsystem, could challenge an incumbent that built that particular system or subsystem.

    And let's say, for example, they had a component on the F–22 that they thought was more capable than the incumbent system, and they would have a chance to go before a blue ribbon panel that you would put together that had lots of technical expertise available to it and make the case that they had this either new capability or a new economic efficiency, that is, they could build it for a lot less money or a combination thereof.
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    At the same time the incumbent contractor would have an opportunity to come before the same blue ribbon panel and explain why it was mission impossible for the new guy to get into this thing. And you would have the option, once our blue ribbon panel had convened and met—and incidentally, you could make sure that these folks made a prima facie case for their technology before they had a chance to come in and take the panel's time.

    But assuming that they would have done that and assuming that they did have a new warfighting capability, you would have the option of waiting until there was a break in acquisition, a natural break, a new competition of the contract or if you thought it was in the country's best interest. Since we have termination for government's convenience clauses, you could replace the incumbent system with a new system.

    And we thought this was a way to allow people and innovative companies to come in and increase our warfighting capability and have a chance, have a shot at becoming part of the process. We got, unbeknownst to you, apparently, we got some harsh letters of criticism from DOD. And I realize now to some degree the genesis of those harsh letters. And that I have a couple of the major companies talk to me since then and say, ''You are a not going to bring up that Challenge Program again this year, are you?''

    And the answer is yes, we are going to bring it up again. I hope you take a look at it. Because I think it is an important tool that you can use, especially in this day of massive consolidation, to not only keep the small innovative base alive.

    And one thing I am reminded of is that the smaller companies, that is those with less than 500 people, provide about 95 percent of the new inventions in this country. And so I hope you will take a look at it.
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    The second thing that is an important thing to us, of course, because it means saving dollars, dollars that could be used for modernization, is the number of people that we have in the acquisition workforce. And as you know, we have been working this thing for about seven years now. I have put in provisions in every defense bill on down the line that have required a 25,000-person reduction from the Army of shoppers. That is what we started with in 1994, which was 300,000 professional folks who just do the paperwork for acquisition. That is two United States Marine Corps. Professional shoppers. And we have tried to bring that number down.

    Typically the Senate comes in with no reduction. We usually split the difference. And I think now the shopper corps is down to about 190,000, if I am not mistaken.

    If you can let me know—you asked us to kind of hang fire on the shoppers last year and not cut any more of them. But you folks had a plan to bring the shopping corps down in a reasonable way. And I just wondered how things are going there.

    So thank you for taking on this great challenge that you have before us. I think Chairman Weldon expressed well the challenges that are before you. They are fairly immense. But let me just say that I add my voice to the fact that we have lots of old people using lots of old equipment right now. And it is showing. And we need to get the dollars into modernization or we are going to have absolutely an ancient force before us. And the CBO analyzed, as you know, that we are spending $30 billion too little on modernization each year.

    So let us know how we are going to get those extra dollars. That is important to us.
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    Secretary ALDRIDGE. Yes, Mr. Chairman, let me address a couple of these.

    One is that we have talked about the Challenge Program before. And I am willing to give it a shot. I think you must realize, though, that in doing so we have to have some flexibility in the budgeting process. When we do identify the good idea, we cannot afford to wait two or three years in the normal budgeting process to get it funded. So it has to be some funds available to us immediately that when we find the good idea—

    And I agree with you. A lot of the innovation comes from small businesses which do not have a chance to compete as often. And they do have good ideas. They can move swiftly. They are innovative. They are flexible.

    But we have to have the funding authority in order to fund the project. We cannot take it away from the budget of the program. Otherwise we run into difficulty.

    So we are looking for some type of flexibility and quick reaction special projects that also are identified during the year that are really good ideas that we are hampered from starting them and getting them transitioned to the forces because we do not have the budget process available to us. So we would look to get your support for a quick reaction type of budget that will allow these new ideas to be funded quickly.

    People in the acquisition workforce, we do have a strategic plan underway, as I mentioned to you before, looking at what is the acquisition workforce that we need for the future and what kind of skills do we need. I have looked into some of the allegations that we have too many people buying things and pushing paper. I think that has changed significantly in the last several years because we have been focused on making sure that the return on our investment for people is very challenging.
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    And on transformation and getting money into modernization, I absolutely agree that one of the interesting things, though, if you look into what is happening in Afghanistan, transformation also includes better ways to use the forces you have. And some of these old forces are pretty interesting. When you have a man on a horseback with a GPS receiver calling in B–52s for close air support, that is pretty interesting. That is called transformation in today's world. And yet it is a completely different utilization of old systems but in new and innovative and very effective ways.

    So transformation includes a lot of things other than just modernization. It is new ways to think and apply the forces we got with information technology.

    Mr. WELDON. Thank you, Mr. Chairman.

    Mr. Meehan?

    Mr. MEEHAN. Thank you, Mr. Chairman. And again I welcome and thank the secretaries for their service to our country.

    Mr. Secretary, I would guess that there are well in excess of 50,000 pieces of unexploded ordinance, primarily in the form of BLU–97s in Afghanistan as a result of our bombing campaign there. And they will be found in gardens and wells, on rooftops and fields, as in Kosovo. But probably to a greater extent there will be hundreds, perhaps thousands of casualties to the civilian population, primarily farmers and children who come across this ordinance.
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    Now, I do not argue the efficacy of cluster bombs. They are very, very effective weapons. What I want to know is why do we buy cluster bombs that have a submunition failure rate that is at least 10 percent and in some cases may range as high as 30 percent?

    And what are we doing to correct the situation? Why do we not conduct more realistic lot acceptance testing to ascertain true failure rates?

    Mr. ALDRIDGE. Well, Mr. Meehan, I do not have an answer to your question. I will go back and find out. I am not familiar with the statistics that you are quoting.

    Anybody on the panel here might be.

    I will check on that. I do not recall the statistics being quite that bad regarding the explosive rate on cluster bomb. But I will go find out.

    Mr. MEEHAN. That would be great.

    And in terms of, Mr. Secretary, following up, if the department has policies in place to improve the fuzzing, I would be interested in how long that you—my guess is going to be that there are people in the department who will say that, ''well, you know, these are—we are trying to improve the fuzzing on these things. And we anticipate the old fuzzed weapons, they are in inventory and they have to—''

    You know, I would like to know how long they are going to be in inventory and, you know, in what year they will be out of service. My guess is that it is a situation where there are weapons in inventory and that is part of the reason. But I have read some studies that can make me very concerned that—
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    Secretary ALDRIDGE. I will find out, sir.

    Mr. MEEHAN. —that may not be the best policy.

    Mr. Secretary, we have heard a lot about the use of spiral acquisition in the Missile Defense Agency. And since we really have so little experience with spiral acquisition, I am interested in why you chose the National Missile Defense Program, that is considered by some in this committee to be controversial and complex, why you chose that program for spiral acquisition's trial run.

    Also I would like to hear what other competing forms of acquisition types that you considered for national missile defense and why spiral acquisition rose to the top of your list in that process.

    Secretary ALDRIDGE. The ballistic missile defense is really focused on what we would call capabilities-based acquisition, of which spiral development is just one of the features.

    Capabilities-based means that while we may not be able to define exactly a requirement for missile defense—you know, use the example of being able to shoot down ten missiles, ten ballistic missiles, within five minutes with a kill probability of .95. That might be the kind of thing that would be described into an operational requirements document that would come from the joint chiefs.

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    As far as missile defense goes, they may come to the conclusion they can shoot down eight missiles in four minutes or six minutes with a kill probability of .9. That is the capability that they can provide.

    From a decision point of view, that may be adequate. If you took the normal requirements process, you would not deploy a capability until you got to meet the requirement, where it may be perfectly adequate. The president may decide that killing eight missiles within six minutes is perfectly okay. And so that is a capability that we believe would be appropriate and therefore we might deploy it.

    Then we would initiate a spiral development that said, okay, that is the first deployment. But suppose that I can get the kill probability up to .95 on block 2 of the interceptor. And I can get the rate of kill up to ten missiles in five minutes by improving the radar improvement over the next two or three years.

    And I can continue to improve the capabilities through improvements in technology as it is inserted into the system once it is deployed.

    That to me is spiral development. And that is what our intent is. We have put together a program for missile defense that is not just national missile defense. It is called missile defense, and we have renamed the agency just the other day to the Missile Defense Agency to reflect that it is in fact a broader approach to the program dealing with short-range missiles, medium-range missiles and long-range missiles and the intercept regime that includes terminal, midcourse loose phase.

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    So it is a matrix of capabilities from missile range to intercept domain that describes what the missile defense program actually is. And we have technologies in each of those areas and sometimes dual paths with each of those areas.

    So as we do reach a point where the president believes that now is the time to deploy against whatever we see as the necessity, we can provide a capability for the nation. And then we can continually improve that to the technology evolution that will exist normally in the missile defense program. That is how we have put the program together.

    Mr. MEEHAN. Mr. Chairman, if you could just bear with me for one second.

    Did you consider, Mr. Secretary, Section 845, ''Other Agreements Authority for Missile defense Acquisition,'' and if so, why did you reject it?

    Secretary ALDRIDGE. I am not familiar with that particular section. I am sorry.

    Mr. MEEHAN. If you could get back to me on that, that would be great.

    Secretary ALDRIDGE. I will.

    Mr. MEEHAN. Thanks, Mr. Chairman.

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    Mr. WELDON. I thank the gentleman.

    The gentlelady from Virginia, Mrs. Davis, is recognized for five minutes.

    Mrs. JO ANN DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

    Assistant Secretary Young, everybody probably knows I am going to the carrier, so you are it. I understand why we have to replace the Navy's aircraft as quick as possible, but I am concerned about the delays in the development of some of the R&D for our future carriers, specifically the CVN–77, Aircraft Carrier, Nuclear Propulsion and the CVNX.

    It is my understanding that a decision was made to push off the integration of the multifunctional radar system (MFR) from the Nuclear Propulsion Aircraft Carrier, CVN–77 to the CVNX. And it is my understanding this may result in some long-term cost savings, but the concern, in talking to the industrial base, is the effect that it might have on the final price for the CVNX and the cost for the first postservice availability on the CVN–77.

    Given the fact that the MFR was on schedule, it was on time, it was under contract, why did not we strip it out off of the DD–21 and fund it independently? Can you give me some insight as to why you came up with what you did?

    Mr. YOUNG. I think MFR, as you said, was proceeding roughly on schedule, although because of the current environment it was slowed relative to what we would have expected to do had the 2003 budget been passed and the increasing funds for DD–21, what is now DDX had been provided.
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    So there has been a little bit of slippage in the schedule for MFR. And that fact puts significant risk in integrating MFR into CVN–77. There were proposals—and you are probably well aware of them—to provide a variety of different radar sensors for CVN–77, most of which required additional funds.

    And as we talked earlier, prior year completion is one of the secretary's highest priorities to stop increasing that bill, to stop having to present that bill here to the Congress for consideration. And it squeezes other programs out of the budget.

    So a guiding factor in the decision was we are going to do our best to avoid growing the costs of CVN–77. It is an appropriated ship. We are not going to create prior-year completion bills. CBN–76BN–76 is delivering with a radar suite. We are going to replicate the bulk of that radar suite on CVN–77 with some of the funds that are available, design the CVN–77 island in a flexibility manner so that it can take both MFR and VSR, the volume search radar and the multifunction radar, which really need to go together in a pair to give the carrier the full set of capability.

    So the decision reduces the risk and avoids the potential for cost growth in the carrier. And it puts systems that will be like the systems on other carriers out there in the interim until we have MFR and VSR confidently developed. And then we can go install them on that flexibly designed island and start to improve and have that carrier look like CVNX–1, as you have highlighted, and grow the future of carrier-based radar sensors and combat systems. Because then you also have to have a unique combat system to go with the unique set of sensors.

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    Mrs. JO ANN DAVIS OF VIRGINIA. There is still a concern from the industrial base—maybe I may need to come and talk to you about it—that this delay is going to end up costing more for the CVNX down the road, especially flipping the CVNX another year too. But that is another story.

    I will come see you about that.

    This one is for—you have not been bothered, so I am going to bother you, Secretary Sambur.

    How is NASA working with you, or are they involved with you in your newly created Virtual Major Force Program for space?

    Mr. SAMBUR. Well, as you know, within the Air Force we have divided the space activities under Secretary Peter Teets. And he has been engaged in a dialogue with NASA.

    And one of today's articles in the paper talked about a joint R&D effort between NASA, and they are in discussions about what is the best way to pursue that so that we would have a, you know, collaborative R&D program that is to the benefit of the nation.

    I would suggest to you that I can get more details and have somebody from Secretary Teets' organization come and speak to you.

    Mrs. JO ANN DAVIS OF VIRGINIA. If you could, that would be great. I would appreciate it.
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    Mr. SAMBUR. I will take that as an action.

    Mrs. JO ANN DAVIS OF VIRGINIA. Thank you, Mr. Chairman. I will wait for the next round.

    Mr. WELDON. I thank the gentle lady.

    And I would now turn to the gentleman from Maine, Mr. Allen, for five minutes.

    Mr. ALLEN. Thank you, Mr. Chairman.

    And thank you all for being here today. I have two questions or a question and a comment or question and a comment and a question. I am not quite sure how to describe it.

    But let me begin for Secretary Aldridge and Secretary Young, if I could just ask whether you expect the contract award for the DDX program to occur as expected next month in April. And if you could briefly discuss the role of the destroyer DDX component as it relates to the next generation cruiser and a littoral combat ship concept, the large and the small. That is one piece.

    The other piece, Secretary Aldridge, I listened with interest to your description of spiral development and capabilities-based acquisition. And I can sort of—if I put myself in the framework that you were describing, it all makes a certain amount of sense.
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    But I said to myself, if I put on a different set of spectacles and look at that, I think to myself it sounds as if one interpretation—and I grant you you can have different spectacles—but one interpretation would be we are going to have a program here that we are going to spend billions of dollars on and then at some point we are going to deploy something, whatever may be, and then we are going to try to improve that program.

    And it seems to me the risk is that it gets detached from real world threats and from congressional oversight. Because it strikes me as a program that is going to wind up being evaluated in a very different way than other acquisition programs for the different services, the other weapons, the other platforms and the weapons acquisitions subjects that we deal with.

    And I wondered if you could sort of deal with that set of lenses. Because I can imagine missile defense just, you know, growing and growing like Topsy, getting totally detached from the real world threat.

    And what I mean by that is in the state of the union speech the president was talking, I think seriously, about preemptive strikes against countries that developed weapons of mass destruction.

    Well, if a country is on the verge of firing a missile at us, though as the Pentagon says, that is probably the least likely way a weapon of mass destruction will be delivered here, there is always that option as well as traditional concepts of deterrence.

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    Are we at risk with spiral development and so-called acquisitions-based technology of having a whole different acquisition system for missile defense as compared to other weapons systems in the budget?

    Thank you.

    Mr. ALDRIDGE. Well, let me address the global question. And then we will get to John for the DDX issue.

    Spiral development is not just applied to missile defense. It is applied to a much broader range of weapons systems. And I will tell you, spiral development is not new. We have heard it in various types of forms of blocks of weapons, blocks of systems. We are up to block 60 on the F–16 at this point. It has been called names such as preplanned product improvements in some cases. So this is not a wholly new concept.

    I think what is new is the leadership is here to implement what is a good idea. It has not been mandatory for implementation. We are now insisting that our weapons systems do go through spiral evolutionary development.

    And the reason for it is we have always in the past tried for the hundred percent solution. It has taken an enormous amount of time to get there. You can point to the F–22. When I was secretary of the Air Force, I was the source selection for the downselect, what then was called the advanced tactical fighter in 1986. We have not got it deployed yet.

    And it is not because it is not a great program. It is. It is taken us this enormous amount of time to get it.
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    We are trying not to do that for the Joint Strike Fighter. We are trying to get it in the field sooner. By going to spiral development, recognizing that the first aircraft is not going to be the hundred percent solution but it is going to be plenty good enough to meet the stretch that we need, it is probably the 80 percent solution. But it will be designed with an open architecture to permit the technologies as the technologies evolve to be inserted into the program.

    The advantage is we can get it in the field sooner, it is less risky because of the technologies that we do support for the first block will be technology we feel are mature enough that we can field it. The cost risks will be much less because we are not pushing the state of the art.

    And by getting in the field sooner we can get rid of the old stuff quicker, the stuff that is costing us a lot more money to maintain as they age.

    So it gives us an advantage that we can now beat all the criticisms we hear about acquisition: cycle times are too long, cost overruns, performance are not up to speed. Spiral development begins to address each one of those, with one more feature, I should say. And that is realistic costing.

    I am insisting that the programs, when they are delivered to us, are costed in a realistic manner so that we are not overly optimistic as to what the programs can do for us and that we are costing programs more to an independent cost estimate that is provided by the cost analysis improvement group.
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    The combination of spiral development and realistic costing I think brings program stability to this issue. And I think they are realistic. And there is by no means any indication that the Congress is going to get less oversight. We have provided the same amount of oversight for the spiral development as we do for any other program. It will go through the budget process. It will go through the defense acquisition process just like we do the current programs.

    Maybe I can turn it over to Secretary Young now for—

I21Mr. YOUNG. I have just got an update briefing on as we progress to the DDX award. And I have pretty high confidence we will make the award in April, which I think will be a good news story that we have worked with Secretary Aldridge's help, Secretary England's input and the CNOs input to change from what was a program that was some of the things Secretary Aldridge just talked about. DD–21D–21 was a single step to full capability. It did not have adequate prototyping. We have a significant load, if you will, of requirement on the program. Now DDX is reformulated. As a spiral development we will get the capability that is within our reach for the first flight, if you will, or block, and add capabilities.

    Also we recognized, as you pointed out, Congressman, that CGX is something that will be critical to the Navy in the future for the air defense mission. And we need to better balance the requirements allocation between CGX and what was DD–21 and had too many requirements and recognize that we are going to have DDX and CGX so that ship comes in at a more manageable size, a manageable set of requirements.

    And also in that mix we are going to have the littoral combat ship, a ship that hopefully has a smaller draft and operates as part of a networked force and gives us more capability in the littorals for different missions, a full spectrum mine countermeasures, interdiction, et cetera.
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    So I think the program that we put in place is on track. And hopefully we will report by the end of April that we have an award and we are ready to move forward aggressively.

    Mr. ALLEN. Thank you.

    Mr. WELDON. The gentleman from Texas, Mr. Turner, is recognized for five minutes.

    Mr. TURNER. Thank you, Mr. Chairman.

    Thanks to all of you for being here and sharing your knowledge and recommendations to us.

    Secretary Aldridge, I had a question about the (PAC–3) Program, obviously the only missile program that has been moved to production, the only successful missile program that we have come up with.

    And I am very pleased that we have moved it to production. And I know it is now in the Army's budget rather than the Missile Defense Agency.

    But I do have some concerns about our rate of production of those missiles. You know, it is one thing to talk about spiral development and trying to perfect a weapons system, but once it has been approved for production, it seems that with the capability that the Patriot Advanced Capability program, PAC–3 missile has, it is important in terms of the safety of our troops to be sure they are adequately deployed and deployed rapidly.
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    And I know in last year's budget, Congress approved funds for 72 missiles. And in this year's budget request you have a request for an additional 72. I know that you have plans for production of much more. In fact, as I recall, the Army's needs for that missile is stated to be 2200. And yet as I recall, your intent currently is to produce 1200.

    Am I accurate on those numbers?

    Mr. YOUNG. I believe you are, sir. I will ask Secretary Bolton. Maybe he could comment on the accuracy too.

    Secretary BOLTON. It is true that we are asking for 72 this year, 72 next year. The ramp goes up to double that in the out years. I do not know about the 1200. I am still looking at far more than that. And I can certainly go back and check on that. I look at 2200, which is the number that you quoted. So I am not sure where the 1200 comes from.

    Mr. TURNER. Well, it was my understanding that your current intent was to produce 1200 and that your needs actually have been expressed to be 2200. And I know there is a significant difference in the per-unit cost between those two commitments.

    Are you familiar with the difference in the per-unit cost between a 1200-missile request and a 2200?

    Secretary BOLTON. No, I am not. But I know the 2200 would be cheaper. And as I said, to my knowledge we are still looking at program like that. I will be more than happy to go out and get the additional information for you.
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    Mr. TURNER. Are there any current plans to move to multiyear procurements again with the interest of trying to hold down the cost per unit?

    secretary BOLTON. When you say move them—

    Mr. TURNER. To have a multiyear acquisition program.

    Secretary BOLTON. Well, we would like to keep it the way it is. We will look at the multiyear to see if that makes sense. The first thing I need to do is go back and check on the number that you have quoted, the 1200. If it is 1200 we would probably stay the way we are. If it is 2200, we would probably look at a multiyear.

    Mr. TURNER. Well, I hope you will take a look at it. Because the numbers that I have seen in the past on the per-unit cost, there is significant savings if we make a commitment now for a larger number. And not only would it be a significant savings, but it seems to me that the importance of that system to the Army and to the safety of the troops in the field would put us in a position where where we would have a conflict where those missiles would be helpful we perhaps would be held accountable for the slow rate of production that we are now in.

    So it seems like we have an obligation at least to ramp up the production to a level where we know that were the missile to be needed we would not be out there vulnerable to criticism because we have not fielded enough of those missiles to protect the troops.

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    Secretary BOLTON. Yes, sir.

    Mr. TURNER. Thank you.

    Thank you, Mr. Chairman.

    Mr. WELDON. I thank the gentleman.

    The gentleman from North Carolina, Mr. Hayes.

    Mr. HAYES. Thank you, Mr. Chairman.

    And thank you all for holding this hearing. I appreciate very much each and every one of you being here.

    Having just returned from Afghanistan, I mentioned this morning, but our forces are performing in an incredibly, incredibly moving kind of way.

    I just had passed to Secretary Bolton something that sort of gets to the heart of what we are talking about. We talk about missiles and fancy systems and all that. I was just handed today an article I had from the paper. Secretary Bolton, if you would just take a look at that. You may already be aware of it. This is where one of our young soldiers in his garage created a high-tech, low-cost night sight for our artillery. And this kind of innovation I think it is very much a part of our transformation of the process going forward.

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    And if you would take a look at let us know how that happened.

    Secretary BOLTON. Yes, sir, I will.

    Mr. HAYES. Again, there is so many things that we can and are doing to protect our troops and give them the assets that we need. I think the situation that is ongoing in Gardez it clearly points out what Mr. Turner was talking about and the concern that all of us and you have as well, and that is making sure that our soldiers, sailors, airmen and marines have every possible asset to prosecute the war against terrorism.

    Again, that is more of a comment than a question. But thank you all for what you do. Let us help you help them do what we are asking them to do.

    Thank you.

    Mr. WELDON. Thank the gentleman. Yield back the rest of your time? I thank the gentleman for his question.

    The gentleman from Texas, Mr. Thornberry, is recognized for five minutes.

    Mr. THORNBERRY. Thank you, Mr. Chairman.

    And gentlemen, I apologize for being late and coming. Like everybody else, we have several committees going on at the same time. Mine happens to be budget, where I have been.
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    Secretary Aldridge, this is my eighth year to hear administration requests on budget. I think in every year administration has come and talked about acquisition reform. Maybe somewhere there are some little pockets where things are better. But I have a hard time seeing them.

    It has been suggested to me that we will never shorten the acquisition time from the Pentagon unless we require that if the Pentagon is going to buy something, it has to be technology that is proven. In other words, what happens is we put out a request. We have 12 contractors that say, ''Yes, I can do it,'' and really none of them can.

    And what happens is they have to do the technology development as they go. And it stretches is it out over a period of years, increasing costs and meaning it never gets to the people it is supposed to get to.

    Do you agree with that assessment, that that is part of the problem and that if we just said we will have R&D programs and we will fund them, but if we are going to buy something, it is going to have to be something that is proven technology, that maybe that can help us get new equipment to the warfighters quicker?

    Secretary ALDRIDGE. Yes, sir. I think you have described my philosophy on spiral development. That is exactly what we are trying to do. There is a combination of things. It is not just trying to field the technology that you have available on the first deployment. But you also have to have the open architecture of the system to allow new technologies to come in with time.
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    There is another feature of that, though, which is very important. And that is I must be able to tell you I believe this is what this program is really going to cost rather than taking in some cases an optimistic estimate from the program manager. And we have done some of that.

    So you have to maintain program stability and funding as well as the technology that is in your hand. But the recognition is technologies evolve. You must apply it to make that weapons system improve over time because you have to.

    So I do agree. And that is kind of two of my key philosophies that I am trying to implement to really get acquisition reform.

    There is another piece I should mention. And that is the process by which acquisition—and by the way, I do not use the word ''reform'' anymore. Reform says I have done something bad and I must repent. And that is not what we are talking about. Or I have been to reform school, and that is also bad. I have used the term ''acquisition excellence.''

    We know what to do. We just have to find a process that we can do this job right. And I think the decision process is important. And the key to the process, the defense acquisition board process I think is much more streamlined now than it was before. And we are able to make decisions much more rapidly and get a decision behind it.

    So all those three things are very important.

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    Mr. HAYES. Well, I realize most of that is your bailiwick rather than ours. But obviously if you see ways that we can help you to implement that, I think it is very, very important for—

    Secretary ALDRIDGE. Program stability is very important. Every dollar we take out of a program this year we put back $4 to $5 in the future years. In fact properly pricing programs is a cost savings measure.

    Mr. HAYES. Well, and I have to say this budget request has a lot more realistic cost of things, not just the programs but health care and all sorts of things, which helps us do our better job.

    Let me ask you about one other area. I am concerned, as I believe you are, about our space programs. You have had to take a number of measures in recent months and in this budget that restructures and delays. And it is very distressing for those of us who believe that space is absolutely critical, not just for the war going on now but even more critical for the days to come.

    I do not know if there is kind of a broader perspective that you can share with us on why we are having so much difficulty with a number of programs that are so important. But what is going on with space and how can we get on track?

    Secretary ALDRIDGE. Let me address one part of that. And then maybe Mr. Sambur can address another part, since we have made a major change in the management structure of how the department is going to run space.
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    I am as depressed about this matter as you are. I have spent most of my life dealing with space issues, both running the National Reconnaissance Office (NRO) and as Secretary of the Air Force and other and through my professional career. One of the problems we are having is I am trying to be more honest about what space programs actually cost and what their actual schedules will be.

    In many cases these programs start under a very competitive environment in which, quite honestly, program managers believe they can deliver technology faster than it can be delivered. And the programs start off with more optimism than perhaps they should. And unfortunately we are experiencing some of those now, both in the SBIRS High program and SBIRS Low.

    In other areas we are doing fairly well. The Global Positioning System (GPS) is performing magnificently. The Evolved Expendable Launch Vehicle (EELV) program is coming on with first launch coming up shortly.

    So it is not all of space, it is only a few areas in space we are having difficulty with. And I think in both of those cases it is a start-up under very optimistic conditions, a lack of attention to the systems engineering process in space, and perhaps some breakdown in our management of the programs as they proceed.

    And hopefully with Mr. Teets now on board with the management responsibility—in fact we just signed off a milestone decision authority to Mr. Teets for space programs. And he will be the central focus that will make decisions for the future. And we will help him in every way we can.
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    Marve, do you have anything?

    Mr. SAMBUR. Yes.

    I was the head of the independent review team that tried to assess what happened with Space-based InfraRed System (SBIRS), Space-based InfraRed System, High Earth Orbit (SBIRS High). And we came up with a couple of what I would call 101 issues, Program Management 101, issues.

    The first was with respect to the requirement stage. Now, when the program started out, the requirements were not really well understood by the acquisition people. That at a top level there was a clear understanding, but when you broke down the requirements into the lower levels that had to actually be implemented, there was not a clear understanding.

    Now, we have used the word ''spiral acquisition'' today. I would like to add one additional word to that. And that is collaborative spiral acquisition. And the reason I put the word ''collaborative'' in is because too often when you look at the acquisition process, it is a series of serial hand-offs in which the requirement people take a look at what they need, hand it off to the acquisition community independently of the test community, independently of the users community. And that hand-off is a little bit like the stovepipes that cause lots of problems.

    So I would like to take a look at collaborative acquisition in a holistic way. If the acquisition process is really an enterprise involved with the users, the requirement people, the test people, all of the people need to be involved.
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    So when the requirement process was handed down in the SBIRS program, the acquisition people, the test people, were not really involved in developing those things to make sure that it was digestible. It was something like eating an elephant in one bite. It should have been broken down into smaller bites.

    And that is what we are trying to do right now, get a holistic, collaborative spiral view of the process. And that would have helped considerably in the SBIRS. It would have avoided this basic problem of the requirements being too big, not really well understood. It would have helped in terms of the systems engineering requirements.

    People had a misunderstanding that the system was basically all there. And when the procurement came out, systems engineering was given a very short shrift in the process, when in fact it should have been. And there were many, many stakeholders in the requirements. And that was not really well understood.

    And finally, there were management problems. Because it was a very big program at the beginning. And people did not understand it. They had optimistic expectations about software and reusability.

    So I think this collaborative spiral acquisition process in which we take a holistic view, gets everyone involved in the acquisition as a team and we take the elephant on a bite at a time in manageable units in which we have cost clearly as an independent variable at every stage so we can monitor it, monitor the costs as being independent.

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    And traditionally requirements are being looked at as the independent. I think you have to modulate the requirements with respect to the costs and make sure the cost stands alone. And I think that would help the problem considerably.

    Mr. WELDON. I thank my colleague for his questions.

    I yield myself five minutes.

    Secretary Bolton, you have a distinguished career and you have had a lot of experience in the past with aircraft development.

    How many developmental aircraft do we normally have in a new aircraft program?

    Secretary BOLTON. If you are referring to the testing part of it, it really depends on the system. But you can have—F–15 I believe had almost 19 aircraft, 15 to 19.

    Sixteen had I think a fewer number. If I look in what the Army is doing, Comanche aircraft, for example, the helicopter, we are looking at 11. The budget this year asks for nine. We have two prototypes.

    Mr. WELDON. See, that is my question. And maybe perhaps you can clarify that. You are getting to the heart of the issue.

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    My understanding is that most developmental aircraft have between 5 and 12 at a minimum. And as you know, we have had one for the Comanche for years. And the Congress plused up the second one or we would not have had that to operate, the extra money.

    And that is a concern that we have. And I understand that we have had six changes in the program. But you know, are you confident in our getting control of this program and getting it back on track? And I mean, with your experience in aircraft, you know, how much confidence do you have?

    Secretary BOLTON. Well, my confidence is a lot higher than it was maybe two months ago. Comanche was one of the first programs that I reviewed within the first week of taking this position. I was gratified to see that the contractors had stepped up to the challenge as well as the Army to step up to requesting and the president supporting nine additional aircraft for the test phase.

    What we have done is to restructure the program. You have heard that before. I have heard things like that before. As an example we have taken on the company side four management teams scattered around the country, reduced that to one management team, reduced the number of people from 85 to 30. Of those 30 about 10 percent have been replaced with people who come from programs that have been extremely successful.

    We meet on a monthly basis with the presidents from both those companies and the Army management to see where we are going. We are working a new baseline right now. We will go through a review, both in the Army and with Secretary Aldridge, as we go through the next milestone.
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    What I have emphasized to the team, and that is the way I look at it, government contractor team, is that we have a window of opportunity—and I believe it is just this year—to bring this thing home.

    In looking at a question like this last night I was looking at the answer. And I did not like the answer because it said two aircraft was essentially enough, given the resources for the program.

    The problem is is that we have—in the past it is getting down to resources to a point where we were not really doing anything nor putting anything out. So the program looks good if you are not doing anything. Well, obviously we want to do something, get this in the hands of the warfighter.

    In terms of how we are going to do that, one, better management focus on both my part and the contractors' part. I have their commitment. And I have talked to all levels of the company.

    Two, we have talked about this spiral development and evolutionary acquisition. Mr. Aldridge pointed out, and rightfully so, this has been around a very, very long time with different names.

    For Comanche we have said we are going to block this. This is what I want first. As you may recall when we started this program back in 1983 it was to be a Kiowa replacement, a scout. So our first block says, okay, that is what it is. As we go up in the blocks we eventually get to the full op, which is an attack version. And so we are blocking that. And we are going to make sure that takes place.
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    As to what has changed in terms of the spiral development, it is we are requiring the requirements people, the developers, the testers and those who will field it to think in terms of blocks and spirals and to think of in terms of, when we finally get to what we believe today is the ultimate, we do not stop there. There will be something ten years from now, fifteen years from now that will require us to continue thinking about how we upgrade that vehicle.

    Mr. WELDON. I thank you.

    I have one additional question. And that is we had a four and a half-hour hearing yesterday, Mr. Secretary, on the issue of technology transfer that we—a case where we are spending a significant amount of money on new technology for our warfighter. And all of us have supported that to give our soldiers and our sailors, marines and corpsmen the best possible systems to protect their lives.

    Yet for our domestic defenders, our fire, Emergency Medical System (EMS), law enforcement, paramedic people we have not been transitioning the technology quick enough that also could save their lives. We lose a hundred of those people each year. Most of them are volunteers.

    And you develop a thermal imager. It took ten years to transfer that over to be used by the civilian side. You are doing GPS technology. That has just as much application in a warehouse building in Boston where we lost six fire fighters because we could not locate them, as it does on the battlefield. We are doing technology involving monitoring heart and a pulse rate. That has equal application.
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    So I ask you if you will work with us and each of the acquisition chiefs to help us develop a process this year which is going to be a priority of our subcommittee to basically make this technology that the taxpayers are paying for not impeded in any way but make it available when it is ready for the military that it also, if it is applicable, can be made available for the civilian domestic defender.

    Secretary ALDRIDGE. Yes, sir. I would be delighted. It so happened I was involved with a independent group that helped the law enforcement officers. They have four centers, technology centers, around the country that has a conduit for transferring defense technologies to the law enforcement. I do not see why it cannot be used directly for the support of the firefighters as well.

    I was aware that Defense Advanced Research Projects Agency (DARPA) had some work going in robotics, small scale robotics. And they actually sent some up to New York to go into the Trade Center. Clearly this kind of technology is directly applicable and should be done. In fact I think Secretary Bolton may have something to say.

    Secretary BOLTON. We have several programs. I just took a look at it this morning from our BL Soldier, and those folks are working not only with the soldier but also with law enforcement agencies, FBI and others to transfer this technology and to use it. I would be more than happy to provide you information on that.

    Mr. WELDON. Fort Belvoir has been especially helpful because they are doing a lot of that work there. And they have been very aggressive.
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    But we have to have a more cohesive approach. I have visited the site that Secretary Aldridge was involved with out in California. And it is exactly what we need, so I appreciate that.

    Mr. Hunter?

    Mr. HUNTER. Thank you, Mr. Chairman.

    You know, recently we have had several hearings on getting technology into the field quickly, which obviously is a major concern of all of you gentlemen.

    Interesting aspect of the problem in that most of the stories that you hear about the success stories about getting good technology into the field quickly were situations where the system was not used but was rather finessed.

    For example, it was explained to us by Admiral Jay Cohen that Predator actually was failed by the system. They said it had an icing problem or something. So it was failed. And yet the warfighter in Bosnia needed something, so we got this old failed system over there. And he loved it. And he ordered more.

    And then they talked about other systems where we fielded systems quickly before the system wanted to discourage them. And another was the Joint Surveillance and Target Attack Radar System (JSTARS) where we had an operational requirement so we got it over there.

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    We have to come up with a way of procuring things where we do not have to fool ourselves or finesse ourselves, our own system, to get these new technologies up to the warfighter.

    Now, coupled with that are discussions that I have had recently with the most frustrated people in show business, and that is the small innovative companies. And of course we have talked about the Challenge Program and the possibilities there. But one frustration that they constantly come up with is that we do have ways of funding initial research. And certainly DARPA goes out, SBIR goes out with challenges and requirements, and our innovators across the country respond.

    And they get to the point where they can build a prototype perhaps, where they get incremental levels of funding as they achieve certain milestones. But then they get to what I call the forest. And the forest is the five-year procurement program which has lots of trees in it. And most of the trees are owned by the big boys.

    And when you try to wedge a few of these smaller programs in or bring them to production, then the guys that own the trees get very nervous. And it is very difficult to make your wedge into the trees. And so what you have to rely on are situations, the unique situation the Predator had, where a warfighter calls a system in before somebody else can kill it that gets in. It performs well. And then you have to give it the bronze star instead of dishonorably discharging it.

    And so my question is, is there a way that we could move into what you would call a short procurement? Something that does not threaten the trees but where you have a new innovative system and instead of saying we are going to have to build this big funding wedge which cannot possibly fit and so we do not do it, we are going to build a little bitty funding wedge where we get a few of these systems into the field.
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    I know Advanced Concepts Technology Demonstrator (ACTD) is something along this line. But maybe we could expand on that, where good new technology that needs to be fielded could be fielded in onesies and twosies, fielded into small increments so the warfighter has a chance to use it, take a look at it, perhaps even order more.

    What do you think?

    Secretary ALDRIDGE. I think you are right on the mark. As a matter of fact, the way we fund ACTD sometimes is discouraging for the services to take it over just based upon the funding profile. We tended to fund the ACTDs upfront with OSD dollars and then tail it off when it got ready to go into the services. They had to palm, put a budget in there, you know, a couple of years ahead in order to fund the thing. And they did not have the moneys. The trees are in the way.

    Mr. HUNTER. The trees are in the way.

    Secretary ALDRIDGE. So one of the things we are looking at with our ACTD program is to fund more at the end and less at the front, get the services involved with the technology, which they can do, and then fund more at the end to transition that to the service and allow them time to put money into their palm. And I think this process is encouraging more of the ACTDs.

    As a matter of fact, we are going from $149 million in ACTDs up to $200 million for ACTDs in the fiscal year 2003 budget. And even now we are finding we have more ACTDs now proposed than we can afford. And so we are allocating this to really high priority things that are supported by the CINCs. And I think we are getting them more encouraged to participate in these things.
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    And that is where it will start to start chopping down some of the trees. We will not get there completely, but we will start working on it.

    Again, funding profiles is very important and having the funding upfront rather than having to wait for the normal budgeting process.

    John Young would like to say something too and also Marve.

    Secretary YOUNG. I would like to thank you for those remarks, Chairman Hunter, because that is exactly what we were thinking about with this collaborative spiral approach. Because the issue here is really, as I talked earlier, about these stovepipes, that Predator was deemed to be a success except by the test communities. The test community came up and wrote these horrendous articles about how bad things were, because they had not been brought into this process of trying to get something out to the field quickly where you can use and learn from it and help develop the next spiral.

    And that is really the concept here, of having all the people associated with the acquisition together to help, you know, generate something that can be used quickly, learn quickly from it, and then elicit that to plan your next spiral and go forward. So that is exactly the idea behind this collaborative spiral development. And you have hit on the right words here, use, learn, get it out quickly, and have everybody in the boat together so they all recognize the end goal is to get something to the warfighters quickly that they can learn from and get something that will be satisfying and desirable at the end of the day.

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    Thank you for that.

    Secretary SAMBUR. If I could just add a couple words. I mentioned in my opening comments about our objective force, future combat systems. We are working with DARPA on that.

    And the reason we are working with DARPA through an 845, other transactions, we go to the nontraditional companies who are not in that force. And they have been working with us for the last two years. We are doing it so we can get the technology quickly and then finding ways to fund this, to bring it into the, ''normal acquisition system.'' And that is because we want to get the subjective force fielded as quickly as possible.

    Secretary ALDRIDGE. Mr. Chairman, just one other comment on getting things to field quickly. We have actually recently demonstrated two very rapid reaction capabilities, the new thermobaric weapon that we have now used in Afghanistan was really a 90-day wonder from the time of conception to the time of actually delivering the weapon ready to go. It was delivered to the field and was actually used the other day.

    We have also modified some conventionally air-launched cruise missiles for a new penetrating warhead. All those were done right after September the 11th. We formed a defense counterterrorism technology task force to pull together technologies that we could bring to bear to this war very quickly. And both of those were success stories.

    Mr. HUNTER. Mr. Chairman, if you would allow me just one statement on that.
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    You have made my point, Secretary Aldridge, when we have a war, when we have an emergency, we discover that the ten-year cycle can be shortened to 30 days.

    Secretary ALDRIDGE. Right.

    Mr. HUNTER. Our challenge is to shorten it to 30 days without having to have the war, without having to finesse the bureaucracy. And I think you are moving on it with this ACTD thing. But let's work this.

    Secretary ALDRIDGE. Okay. We will.

    Mr. WELDON. I thank the gentleman.

    I see that Mr. Wilson has returned, so I will go to Mr. Meehan and then Mr. Wilson. Since you were not here before the gavel went down, I will call on you after Mr. Meehan.

    Mr. MEEHAN. Thank you, Mr. Chairman.

    Secretary Aldridge, the Office of Net Assessment has attracted numerous critics and defenders over the years. In previous speeches you have said that one of your five goals in your current job is to revitalize AT&L. I would like to hear how that revitalization is going. And I was wondering if it included the Office of Net Assessment. I would like to hear your thoughts on how you envision the role of that office in the AT&L and the transformation debate.
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    Secretary ALDRIDGE. Office Of Net Assessment, which is run by Andy Marshall, reports directly to the secretary through the Policy Office. It does not deal—I have no authority over Net Assessment in my office at all.

    Regarding the transformation of AT&L, it is really encompassed within the five goals that I have set forth. Really one of them is the credibility of the acquisition process. And you ask anybody around about how they look upon the credibility of the process, and you will find that there is not much to it because of cost overruns and so forth. So that is really a key point of improving the process.

    We got to focus on people, what kind of skills are we going to need for the future. We have to focus on the health of the industrial base that provide the weapons systems we need. We need to rationalize the weapons systems with the strategy that has been encompassed through the QDR and through many of the studies that have been done. That includes the weapons and the infrastructure.

    And we have to get our science and technology program back up to sufficient funding. And we are focusing on a goal to get it up to about three percent of the total DOD budget. We did not make it this year, but we are trying to get a path to get those.

    So those are the five things that I am working on with metrics to measure how well we do. Can we get the cycle times down? Can we get the cost growth under control? I am being more realistic in telling you what I really believe the weapons systems are going to cost and funding to make those things happen.
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    It means we cannot put as many things into the budget as we used to because they are funding properly. But that is okay. We think we can be honest and tell you, when we tell you what a weapons system costs and the schedule is going to achieve and the performance, I think it is my very best estimate and those of the people at this table that that is what we believe we can deliver it at.

    Now, we get surprised. We understand that. But hopefully the number of surprises will be down significantly.

    Mr. MEEHAN. Thank you, Mr. Secretary. Appreciate it.

    Mr. WELDON. I thank the gentleman.

    The gentleman from South Carolina, Mr. Wilson. The gentleman's time is five minutes.

    Mr. WILSON. Thank you, Mr. Chairman.

    Actually I just would like to add with the other members of the panel today how much we appreciate what you are doing and particularly was interested in hearing about the streamlining and proceeding ahead.

    And then certainly with the activities in Afghanistan at this time, it is encouraging to see the proactive attitude that you have.
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    Mr. WELDON. I thank the gentleman and thank him for his attendance at the hearing as well.

    The gentlelady from Virginia, Ms. Davis.

    Mrs. JO ANN DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

    Secretary Aldridge, I think I heard you say something a while ago and I just want to clarify it. Did you say that for every dollar you take out of a system it costs you $4 or $5 later?

    Secretary ALDRIDGE. That is an estimate, gross estimate, of when we look at programs, when we slip a program and to save a dollar this year, it is something around $4 to $5 that will have to be spread over many years in the future because you are dragging out the program another year or so. That is roughly the number.

    Some programs may be $3 to $1. Others may be $5 to $1, but it depends on the program. But generally it is a multiple of that caliber.

    Mrs. JO ANN DAVIS OF VIRGINIA. So the comment made earlier about the cost of the CVNX because we are slipping in a year would be true, it would cost us a lot more because we are slipping in a year?

    Secretary ALDRIDGE. Slipping programs cost you money over the long term. And unfortunately, as you well know, out year dollars are not very valuable versus near year dollars. And so you have to make those tradeoffs all the time.
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    Mrs. JO ANN DAVIS OF VIRGINIA. Now to my question. That was just a clarification.

    But the question is over the last year that I have been here I have heard a lot about a study you were doing on shipbuilding. And I was wondering if we are going to be seeing that in the foreseeable future, if and when it is going to be made available to the public. Because I am sure I am not the only one on this committee that would like to see it.

    Secretary ALDRIDGE. Yes, I am going to have to check on that. We did a study for the QDR process of looking at various sizes of the Navy. We have worked with the Navy. We have worked with PA&E. And we have completed—I have given it to Secretary Rumsfeld. It has been used in the QDR process, and it has been used in the budget preparation process. But I will have to check on seeing where it is and when we can release it.

    Mrs. JO ANN DAVIS OF VIRGINIA. If you could see when it could be made public, especially this committee.

    Secretary ALDRIDGE. Okay. Thank you. I will.

    Mrs. JO ANN DAVIS OF VIRGINIA. Thank you, Mr. Secretary.

    Thank you, Mr. Chairman.

    Mr. WELDON. The gentleman from Texas, Mr. Thornberry?
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    I have no further questions. Mr. Chairman, do you have any further questions?

    Mr. HUNTER. No, Mr. Chairman.

    And I just want to thank our guests and thank you for holding this hearing. I think it has been very productive.

    Mr. WELDON. I want to thank all of you for coming in and for the excellent work you are doing. We look forward to working with you. And thank you for your service to the country.

    [Whereupon, at 4:08 p.m., the subcommittee was adjourned.]