You dont want to have such an emphasis that you miss the learnilear learning curve that you get out of a robust experimentation and prototype plan. Can i ask a question . Sure. It was done in three years. I just cant see that kind of result here in the u. S. , and yet there are times well need that kind of quick turn around. I think its a great example of urgent need. What can we put together that works . They went out and procured it and fielded it as fast as possible with our help. I think this gets to one of the things that i hope will be on your plate is the whole military requirement process. We spend so much time trying to get consensus and we over specify requirements we spent years on that up front that we are already behind the curve when we get to trying to aware the thing. Figuring out where do you need to have the military specks and where can you rely on commercial and integration and adaptation kind of i think thats a key distinction we need to work on. The israeli system is so different from ours in another respect. They are totally integrated and the ministry of defense so that when they go out and say yes, we need x the commercial folks are on it quickly. We just, we have this gap. Too many of our people in the acquisition system the commercial side is the enemy. We have to break down that barrier. Thank you all. I yield back. Thank you. I know people have varying opinions on how congress should go about tackling issues. I was wond wlaerg do you think congress can do or refrain from doing to improve the effectiveness of the acquisition process . I would go back to what i mentioned about darpa. It is such a success because it has so much flexibility but accountability. The director was there were five years. That individual is totally accountable for what comes out of their budget every year. They have a lot of flexibility in the budget. They are not bound by the Civil Service system for finding program managers. So its a very different model. Its more about leadership and trusting leadership and less about very rigid rules. I think honestly we are on a path where we are writing legislation so much, so much dictating how the department has to do things that we are holding them accountable, give them flexibility and use the other power which you guys which, which you dont use enough of which is to bring them up and talk to them. You have no idea how frightening it is when they say we are going to have a private meeting. It has we nor house impact. Right now most think they have to write big bill to have impact. You dont. There is so much more you can do by utilizing this power from this position. I would do less, create more accountability. Think about a model where youre trying ore crosssuto recruit. You know, john was my pred ses predecessor. Moving money from one account to another are too tight. The director doesnt have to we worry about that. When we are talking about a budget of approximately 600 billion and youre told must go to move 25 million from one account to another, thats ridiculous, certainly not how any Successful Company would work. It seems to me that i fully understand why Congress Wants to watch how money is moved, but theres a long way between 20 or 25 million and a 600 billion budget. It seems to me raising those ceilings would be one way to create the ability to be flexible and agile. Youll start to see real synergy. And the last thing i would say is there have been attempts over the year. When something doesnt work rather than removing it we just add another layer. I think clearing away some of the layered complexity of past reform and regulatory efforts that havent necessarily yielded the results, but people still feel accountable to go by. It can also add a lot of needed flexibility. And so with all of that that there is likely to be career while in that education and training and probably a reduction in the level of contractors that we rely onto support those civilian functions. And we also have to look very closely at what we want the million tear to do as opposed to what someone else can do. It. And it has to be a comprehensive review. We do not have a uniform way in which we put the full cost of having a uniform or civilian side by side to say which is the most Cost Effective way to do this job . You could do demand that they give you or that the department develop a real cost objective. It is military labor, contracted labor. I had in my mind you had a plan. Youre really talking about something broader than that when you start bringing in who does what. What do civilians do, what do military people do . Im trying to think how do we write this . Whats the charge here . I think and to ask him how does he need to reshape and reeducate, train, develop his work force to be as effective and efficient as possible. But i think you could then look at other components beyond osd and should because, you know, from a resources perspective the osd is dwarfed by the staffs of the defense agencies and so forth. If youre looking far way to get your arms around a piece of the puzzle and learn from that experience to go after other pieces its not a bad place to start. I would agree with thaw with but i would expand it. There are some people who say we sort of combine them. Im not sure thats the right way to go. Im pretty sure its not the right way to go. Still, there is an awful lot of over dchs lap. I think looking at them together as a yunlt might be a way to deal with that project. The other thing, i would nlt allow this to stand in the way of mandating reductions. The civilian work force is too big, and i havent seen any efficiency out of it. Theres no correlation between the growth of the work force and efficiency. In fact, its a negative correlation. There are some suggestions we should reorganize osd however he wanted to in sixtime. For you to have buy outs and so forth . I think that ultimately you want the review, first of all you want form to fit function. You want the focus to be what are the most what are the important functions that where i need, you know, potentially more investment, where am i willing to take some risks and do less and then you need to adapt and add on the Human Capital layer. One of the things that i when i had my little world of policy, which was by then a thousand people. It had grown a lot. One of the things we asked, if you had 10 more to invest where would you cut it . We did that at a very low level all the way through the organization. It gave you a pretty good sense of where we were short and we really needed to plus up. And people thought im doing this because i have to do it. I really dont think theres much value here. We sort of did it in a co complimentary way. I just think youre going to have to impose cuts and tell them figure out whats the most efficient way. If you think there are things to do that are low value, tell us what that is. When they have to do a downsizing they dont start with a review. They start with a top down goal. I think bill perry used to say, you know, reform does not i cant remember what he said now. You know, you have to make cuts first and commit yourself to those cuts before you figure out how you will get the best value out of it. I think i have been around it too much. Youll get very marginal suggestions if you do it on a bottom up basis. I agree with that. I think you have to have a target and then allow a combination of a functional review and Human Capital review in terms of figuring out how you will get there. The key is incentivizing the result. And thats where i would come out as well. If you dont give them some clear directive as to how much they should cut over what period of time they will try to wait you out. Thats number one. Number twor, they will try to if you give them any sort of vehicle for exemption they will exempt as many people as they could. So its got to be tightly written. Its got to be clearly directed and then you give the secretary and i would argue the secretary together with the chairman because i think it is important if youre foe cussing on osd that i really think need to be looked at together, have them both give them the flexibility within that overall number and have them come back and report to you and not a written report. But have them actually come and testify in front of you. I think a cost saving target, you know, it gives them maximum flexibility how to get there. They are so important. As you gave last year an authority thats about performance. Visa, you raise the level, which is great. Super viesz sores cant use that to incentivize individuals that need to depart to depart. I think those accompanying authorities are really important to turn you know, to give the flexibility required to reshape the organization in a productive manner. The only thing that worries me about authorities is they will say i have the authority. I dont want to use it. What will then happen is the dead wood always stays. They love hiring freezes. Who goes . They dont come in. The ones that come in last, they are the ones who go out. Thats not the way to get the department up to speed with all of our enemies out there. Okay. I have to go back to the beginning in this business. I understand your point that you dilute the effectiveness of one. You address this in your written testimony, but i need to hear it again. I think the most important thing we are trying to do is change it into an independent organization. You are not going to get that done unless you break it up. I think it means you take those mechanical functions of ak by sags, you put it under an assistant secretary. Twhas the assistant secretary does. They are responsible for all of the big choices that the department is going to make. You have to make that job big enough so that you will recruit somebody really big who will want that job because it really is meaningful. We took a big step you took a big step two years ago when you pushed a lot of acquisition back to the services, a very good thing to do. We need to get it back to the services, get a smaller organization at the top thats overseeing the process that services implement and then a powerful person who makes big choices for department. But the assistance secretary so its still one that orbit. You have one okay by sigs secretary. Youre taking them down a level and youre pushing them out to the services. Okay. Okay. Yall have anything more on that . Okay. You have questions . Thank you mr. Chairman. So one additional question that i had, last winter we learned of a report out of the dod that stated that 125 million can be saved over the course of five years by attending to ways within the department. This accounts for about 4 of dods outlays and within the types of savings through cost cutting practices. While im disappointed i think they have valuable lessons that can be learned from it. How do you believe we can best meet these objectives and how have you seen the department implement some of the more actionable efficiencieefficienc . Well, the report came out of the defense business board. It wasnt really buried at all. It was easily accessible on the web. It was publicly briefed. Nobody was told you couldnt talk about it. I dont know where that whole thing came from quite frankly. To substance of your concern it does seem to me that what that report is essentially saying is in the first part your best start is with civilian personnel. Thats one with their legislation in terms of levels of civilian personnel might be very much worthwhile. I believe if you take their numbers from two years ago and update from 5 to 8 billion. Not trivial, not a lot but not trivial. They have five other categories. Secretary of defense listed those very same categories on efficiency. And so a senior official who wants to take a transformation step is either either that i have to go there outside consultant or they decide they dont have the band withto take something on. One of the things that was included in the last authorization bill is what is call add delivery unit which is taking a page from the u. K. Who basically brought 30 or 40 people with deep experienced transforming organizations coupled with some real experienced folks from within the department and basically created an internal resource for the deputy and cmo to work with the line managers on transformation plans. You know, i think the average server runs about 20 10 of capacity. Because each of the services buying their own stuff. That means youre going in and ripping it out of a service. Thats painful. Its hard to do that. We spend money getting ritd of things chls we have 500 people at the disposal center. We are paying for them to get rid of stuff. But these are very hard things to do. It involves a lot of restrictions put Ton Department in recent year. Can we do it . Yeah. They have were painful. Is that does that avoid us needing to increase money for the department because of problems we have now . I think we have we have got real readiness issues in the department. We have a lot of airplanes that are really old that we need to replace. We need to be objective about it. I strongly think we should save the 115, 125 billion or whatever that is. The fact is if you get a good outside auditor they will start to tell you where some of this money that john hammery is or isnt. It gives you the vehicle to start moving moneys around, to be more efficient and to reaching that 125 billi 125 bil. Certainly i know when we are in the direction of able to audit the department. We are try to ing to get to thad it will help us to get where we want to be. So thank you all for your testimony. Ill yield back. Yeah. I want to emphasize on the defense business board issue not only did we not bury it, we sited it in our Committee Report two months later. And the increase in incentives to voluntarily leave the department that we had was one of the specific recommendations that they made. Now, the bigger Dollar Savings comes from the personnel reform that we have been talking about, which is part of the reason i have asked yall several questions about that. There was an effort that didnt go so well to do that a few years ago, but yet its a significant area that needs our attention. Yall have been very helpful. I have got lots of notes, but i also know where to find you to elicit more information and more questions. Thank you all for being here and for all you assist this committee with. The hearing stands adjourned. And we are live now on capitol hill where a hearing is about to convene on u. S. Policy in the asia pacific regionment we expect much of this hearing to focus on north korea. Arizona senator john mccain is the city chair. Expect a National Security adviser who focused on north korea and hear from a adviser to dick cheney and who served in the bush and obama administrations. It is expected to start in a couple of moments live here on cspan3