▶ 0:20:27Committee will come to order. Uh, the United States faces the most dangerous security environment since World War II. China is rapidly expanding its military power. It can field advanced systems in a matter of months. By contrast, it's in the United States, it takes more than a decade to deliver needed new capability to our war fighters. Uh, by that time, the threat has changed, the cost ballooned, and the solution is outdated. The reality is that our defense acquisition system is failing the American war fighter.
▶ 0:20:58That's not just my view. Nearly every combatant commander who's testified before this committee this year said the same. Moreover, defense companies of all sizes tell us they face a maze of red tape, bureaucratic delays, and a risk averse culture at the department that deters Uh this helps explain why the number of prime contractors in our country has dropped from 51 uh to now six.
▶ 0:21:26Meanwhile, excessive regulations and fears of losing privately funded IP are driving away commercial firms and startups and making VCs think twice about investing in defense tech. And for those uh who that do press ahead, too often the gamechanging technologies languish in the notorious valley of death, never reaching full-scale production. The culminative cumulative effect is a hollowedout, uncompetitive defense industrial base.
▶ 0:21:55This is a national security emergency. If we're serious about achieving President Trump's peace through strength agenda, it's not enough to spend more. We have to make every dollar count. The reconciliation package that President Trump recently passed into law was a critical first step in restoring the level of investment that our defense industry needs.
▶ 0:22:18But even if we raise defense spending to 5% of GDP, as I've urged, it won't make a difference unless we fix this broken acquisition system. That's why along with my good friend, the ranking member, uh, introduced the bipartisan speed act, which is now the cornerstone of the FY26 NDA passed by this committee last week. The speed act will cut through layers of red tape and deliver for the war fighter at a speed and scale.
▶ 0:22:46It accelerates the requirements process from from nearly three years to as few as 90 days. It empowers program executive officers and gives them greater budget flexibility. It prioritizes commercial solutions and fosters an environment where innovation can flourish by removing barriers to entry and bridging the valley of death. It modernizes outdated and overly burdensome regulations that slow delivery and inflate cost.
▶ 0:23:13It promotes a data as a service model that gives the department access to the technical data it needs to sustain its systems while preserving the intellectual capital of the American industry. It creates the defense industrial resilience consortium bringing industry to the table to address challenges from supply chain fragility to restoring surge capacity. And most importantly, it drives much needed cultural change.
▶ 0:23:40No more rewarding paper pushers or pro uh over problem solvers. The speed act fosters a culture of agility and responsible risk-taking where failing fast and learning quickly is seen as progress, not as a career killer. Let's be honest, past reforms have failed. Uh however, I believe this time is different. The White House, the Pentagon, Congress, and industry are all demanding change.
▶ 0:24:09I commend President Trump for calling on the department to urgently modernize defense acquisition and streamline overly burdensome regulations. Mr. Duffy, we want to hear from you on how the department is acting on that directive to deliver to the war fighter. And I look forward to test to um discussing how we can align our efforts to fix the defense acquisition system and ensure the United States the US armed forces are the world's most lethal fighting force or remain that that way.
▶ 0:24:37And with that, I yield to my friend the ranking member for any opening comment he may have.
▶ 0:24:40Uh, thank you, Mr. Chair. I'm going to thanks more than anything for your for your leadership on this issue. Um, acquisition reform is something we've been working on for a while. I think we've made a little bit of progress. Some of the past reforms have helped. They simply haven't gone far enough. Uh, Chairman Thornberry, I think, really showed some great leadership on this. Um, Secretary Ash Carter when he was there, began to move us in this direction. We've done some other transactional authority. We've learned some valuable lessons from programs that have, you know, struggled like the F-35.
▶ 0:25:10So that the B-21, other programs we moved in a different, better, more positive direction. Uh but on a scale of 1 to 10, we've got about a two in terms of how far we've gone. And the acquisition reform bill that you've led on uh gets us much closer to that 10 we need to get to. And it is crucial uh that we push it all the way through the process for all the reasons that you stated. Um, innovation is happening faster now than it ever has in the national security world.
▶ 0:25:37Uh, the Pentagon, Congress, our defense industrial base are not where they need to be to innovate as quickly as they need to. We need to realign the incentives as you said. Um, and we need to fundamentally change the culture. And I've said this probably a hundred times in this committee now, but the best summary of it I've ever read was in a foreign affairs article a couple years ago where they said the Pentagon was built to be the 1950s Ford Motor Company. It needs to be 2022 Apple.
▶ 0:26:05Um, it needs to be an innovative company and all the cultural pieces that get us there uh to make that happen are going to be necessary. And it's all sort of three pieces of this. The Pentagon needs to change, Congress needs to change, and the defense contractor base needs to change because there are incentives in place for all three of us to just keep the system where it's at. You know, process, if you work at the Pentagon, if you follow the process, you just sort of slowly stair step your way up.
▶ 0:26:33And if there's 15 people who have been in charge of a program, when it fails, it's very easy to go, it wasn't me, it was him. Um, those incentives are in place. Congress, you know, we, you know, get parochial. We protect our districts. We pound on, you know, bureaucrats when they make mistakes. Uh, meanwhile, we tie their hands so that they can't do it right. So, we have to change as well.
▶ 0:26:56The defense contractor base, you know, if they get these contracts that just lock them in to getting paid over and over and over again, whether or not they produce a product we need, that works for them, too. All of those incentives need to be changed, and the culture needs to change. We've talked about this a lot. I won't go on on length about that. Just want to close by saying the one big problem here is DoD and Congress is going to have to work together to get this done. You're not going to be able to do it on your own way.
▶ 0:27:23And this administration, this DoD has shut out Congress more than any other DoD administration I've ever dealt with. It's it's stunning. I have not personally had a one-on-one conversation with the Secretary of Defense. I I've sought out meetings with the under secretary for policy. I've basically been told to piss off. Okay, that's just not going to happen. Which is which is unbelievable to me. Um it is not just us.
▶ 0:27:50I mean, I understand that, you know, to a certain degree this administration wants Democrats to go away. That sort of partisanship isn't that unusual. But even the majority struggles to get basic information. We have still not been told about what weapons are being shipped to Ukraine by this administration and what their plans are. And again, we've been told not really our business, okay? Um, we cannot get meetings.
▶ 0:28:13We cannot have these consistent conversations and that's going to be a problem in getting to the acquisition reform that we need. So, I hope that improves. Now, you know, don't have to just do what we tell you or whatever, but the basic communication has to happen and it is not happening on an unprecedented level uh between Department of Defense and the House Armed Services Committee and the Senate Armed Services Committee. That needs to change.
▶ 0:28:43And with that, I yield back. Mr.
▶ 0:28:45I thank the ranking member and I agree with him. Uh this has been disappointing, but I'm optimistic uh that we're going to have a better path forward uh with uh Mr. Duffy. But let me introduce our witnesses. Uh Mr. Michael Duffy is the under secretary of defense for acquisition and sustainment. He's accompanied by one of our former staffers here on the Mr. Jesse Tollison Jr. uh who is acting assistant secretary of the army acquisition logistics and technology. Uh Mr. Jason L.
▶ 0:29:13Potter who is performing the duties of assistant secretary of the navy for research, development and acquisition. Mr. William Bailey who is performing the duties of assistant secretary air force for acquisition technology and logistics and major general Steven Pertie Jr. is acting assistant secretary for the air force space acquisition and integration. Thank you all for being here. Mr.
▶ 0:29:35Duffy, you're recognized uh for your opening Chairman Rogers, Ranking Member Smith, and distinguished members of the committee, thank you for the opportunity to appear before you today to discuss acquisition reform at the Department of Defense. I'm honored to be joined by the acting service acquisition executives from the Army, Navy, Air Force, and Space Force to discuss this unique opportunity to drive meaningful change within the department. The department is at a critical juncture.
▶ 0:30:04We must transform how we deliver integrated capabilities to our war fighters with speed, scale, and operational relevance. The purpose of defense acquisition is clear. To equip our war fighters with the ability to deter our adversaries and win future wars, the geopolitical landscape has shifted dramatically recently.
▶ 0:30:25We are no longer in an environment where flexible timelines and risk avoidance are What once took a decade must now be delivered in months or weeks to stay ahead of the threat. The urgency is reflected in the speed act central objective, shortening the requirements to delivery timeline and accelerating production at scale. I appreciate the committee's bipartisan leadership in driving bold reforms like the speed act.
▶ 0:30:52Inside the department, we view this committee's leadership as a welcome invitation for partnership and collaboration to get serious about delivering meaningful reform that will drive outcomes. In my role as the under secretary of defense for acquisition and sustainment, I strive to fulfill the solemn responsibility and unique opportunity to modernize how the department delivers capability faster, smarter, and in a collaborative partnership with American industry.
▶ 0:31:21My top priorities are clear. Deliver capability at speed and scale. Rebuild a more resilient defense industrial base. Reform outdated processes. And empower our acquisition workforce to operate with agility and confidence. Under the leadership of President Trump and Secretary Hegsth, we've launched the most aggressive acquisition reform initiative in decades. We are streamlining processes. We are cutting bureaucratic delays.
▶ 0:31:50And we are leveraging more commercial capabilities for defense solutions. We are focused on increasing the use of rapid and flexible acquisition and contracting authorities including commercial solutions openings, other transaction authorities, middle tier of acquisition and the software acquisition pathway. These will enable us to deliver priority solutions to the war fighters with greater speed and agility.
▶ 0:32:15It will enable us to build upon the exquisite capabilities provided by our traditional vendor base and to tap a broader array of companies including startups and non-traditional vendors to fuel competition and innovation across the acquisition and requirements enterprise. We're prioritizing le leveraging commercial solutions whenever feasible. Reform also means showing up differently as a customer.
▶ 0:32:41We are institutionalizing practices that improve communication, encourage early industry engagement, and accelerate the path from requirement to contract. I'm committed to clarifying, stabilizing, and focusing the demand signal we send to our partners in industry to help incentivize their investments to strengthen the production in alignment with the department's future plans.
▶ 0:33:04For capabilities like munitions, we're exploring the pursuit of multi-year contracts with the help and approval of Congress to give industry the certainty of a stable demand signal to invest in supply chains, facilities, and workforce, all the needed requirements for growth. We're also leveraging title three of the defense production act and the defense and the industrialbased analysis and sustainment program to strengthen sectors like micro electronics, energetics, and critical minerals.
▶ 0:33:34None of this is possible without the people who carry it out. Our 167,000 strong workforce is the connective tissue between strategy and execution. These professionals manage complex trade-offs, direct billions in taxpayer dollars, and ensure our war fighters are never outmatched. We're modernizing training, expanding authorities, and embedding a mindset focused on speed, innovation, and mission outcomes. This is what acquisition reform looks like in the 21st century.
▶ 0:34:04Faster decisions, smarter investments, and ensuring our war fighters receive the lethal capabilities they need on schedule. I look forward to working with this community to continue to drive results worthy of the trust you have placed in us. Thank you for the opportunity to testify and I look forward to your questions.
▶ 0:34:22Thank you, Miss Duffy. And I'll recognize myself uh first for questions. Uh why do you think that the industrial base keeps shrinking?
▶ 0:34:31That's a great question. One that we're wrestling with every day in the department because uh I strongly believe and I believe my colleagues believe competition is our friend and with contracting defense industrial base we we uh we are losing the benefit of competition. Um I think there's a couple challenges. Number one, we are dependent on exquisite systems.
▶ 0:34:51We have technological superiority and it's difficult and we are a single customer for a lot of those and so we have to be creative about how do we open up the opportunity for new entrance to bring the kind of exquisite capability uh that that our war fighter demands in order to maintain competition with the adversary. But I think there's also a lot of opportunity for us to think through how to streamline what it takes to do business with the federal government.
▶ 0:35:17the regulations that the speed act goes after, the complexity of the requirements process and the delay that it takes in order to articulate a need and get to a contract, I think tests the patience and the financial viability of trying to create a venture to do business with the federal government. We're committed to working through that internally.
▶ 0:35:37We're encouraged by the work that the committee has done to create legislation uh that will streamline those processes in particular the requirements process where I think we've got a real uh opportunity to reduce the timeline to identify a need bring it to the marketplace and encourage the innovation of industry to bring creative solutions to help solve that problem where maybe we don't have to be as dependent on the exquisite systems because innovation is bringing capability that that the Pentagon may not have birthed itself.
▶ 0:36:05I think that last statement really hits the nail on the head. U you talked about in your opening statement about leveraging commercial solutions. Um how are you going to balance this need that we have to be able to repair our own equipment with it and at the same time protect uh the privately funded intellectual capital that these companies put into these systems. Well, that innovation and the innovation of industry and the protection of that intellectual property is clearly a competitive advantage for us.
▶ 0:36:35Uh, and so finding the way to preserve that is critical. Uh I think the data as a service proposal from the speed act is a unique uh um u innovative approach to because there is a need for us to have access to the techn technical data that we need in order to uh uh maintain the ability to sustain these systems uh organically.
▶ 0:37:00God forbid we're in a place where the sustainment exceeds the industrial capacity because we are engaged in conflict. We must have an organic industrial base that understands how to leverage the technical data of these systems in order to repair them. And so, um, finding a balance between preserving the intellectual property and providing the department with the access we need to data is a challenge that we're undertaking now. We look forward to working with you and the committee to identify what is the sweet spot of balancing both those needs.
▶ 0:37:28Well, as you probably are aware, we put language in the NDA that passed out of here last week that addresses that. It still needs some love and attention. So we would urge your participation in that process. I think we have the attention of the private sector now, our industry partners. But as you know, this NDA is going to be an evolving product over the next 6 to 8 weeks. So we look forward to a lot of input from you and our industry partners on that topic.
▶ 0:37:55U as the department works to expand its uh critical munitions production. You know, one of the things we found in this Ukrainian endeavor, our effort to help Ukraine, is we've seen our stock piles reduce and re and and had to address this atrophy that we have in our munitions production uh infrastructure. How are you partnering with our allies uh or are you partnering with allies on co-production and ways to advance interoperability of these systems?
▶ 0:38:24Thank you for the question. And I uh I had the uh opportunity uh within the first week of following being confirmed to visit the Paris air show where I had a chance to meet with all of my uh counterparts uh the national armaments directors of our uh European allies, Australia, UK, others. uh and there's considerable interest in how do we explore co-production.
▶ 0:38:47Uh my sense is this is really a new area uh that uh we do have some co-production agreements but we don't have it quite as expansively as it could be. And so inside the department I'm partnered with the under secretary of defense for policy to think through what are those conditions under which it's advantageous for us and our allies to enter a co-production agreement. I think one thing we're confronting as we're looking through growth opportunities in the defense industrial base, there are limitations to everything.
▶ 0:39:14There's limitations to raw materials and subcomponents, workforce expertise, and so thinking through how do we create an agreement and an arrangement with our uh allies and partners such that the sum of the whole is is greater than the parts. Uh when it comes to expanding production is a key element of it. Uh and so I think there's considerable interest. There's uh complexity as I mentioned to the calculation.
▶ 0:39:39Do do the do the allies and partners have sufficient demand to justify the economic cost of establishing co-production within their industry? And so I think we are working through how do we help uh explore these opportunities in a way that's
▶ 0:39:57That goes to the second part of my question though and that's what I was really getting at. You know, the ranking member and I have traveled a lot through Europe and talked with our allies in in in NATO about the challenges. And part of it is interoperability. We need to all be using the same munition so that if one of us gets into a conflict, we can use what the others have to provide. Uh so that's part of what I'm hoping you'll push in the dialogue with these folks is that we can all produce it.
▶ 0:40:25But and if we will all start using these common systems, there's going to be customers because different countries are going to be buying at different times. Uh this is something that General Donahghue who is leading our European army uh forces is has really been a proponent of and and and he's got u two followers in the ranking member and then that's the that's the path forward. So I hope you'll be focused in on that. With that, I'll yield to the ranking member for his questions.
▶ 0:40:51Uh thank you, Mr. Chairman. Hey, the most important thing you said is we the acquisition reform, the speed act that we're doing gives us a real chance to make substantial changes. Um, we want to get that right. So, I think between now and when we get to that happy day and hopefully October, November, when we pass the defense bill, making sure that we're working closely together and getting that as close to right as possible is going to be crucial. Just one followup on the the foreign partner thing because I think it's crucial to get to the capacity that we need. uh we're going to need um foreign partners.
▶ 0:41:22So, two questions about that. How do you balance that versus some of the domestic content demands? You know, we want to obviously maintain our own industry. Uh but we're not going to get there on our own. So, we need the partners. And then second, with the tariffs that have been done in a variety of different places, the people putting the tariffs in place talking to you guys and saying, "Okay, how does this impact, you know, where we need to get uh certain key defense articles?" Is the tariff policy contemplating our defense needs
▶ 0:41:52in that way? So there's two things there.
▶ 0:41:55Yes sir. First uh question um I think the way I've thought about approaching this is how do we get as much as possible a holistic understanding of the demand across all of our allies and partners. So we've got clear understanding of what our uh need bases and then we've got an FMS system that we're looking to reform under direction of the White House to modernize how we track.
▶ 0:42:17So, but I'm more focused not sort of on how we use them, but how we build them and how we can say, you know, okay, we can't well, whe you're talking about ship building or munitions, maybe we've got a partner, maybe Norway can build it. Maybe Australia is beginning to build gimlers, for instance, the AUS deal, you know, but at the same time, we have a lot of domestic demand and, you know, sorry, we have a lot of demand for being able to make it in America.
▶ 0:42:44Um that's what I'm interested in is sort of on the development side.
▶ 0:42:48Sure. And and I think actually understanding the demand helps on the development side and the supply side to say that we okay we understand that holistic supply. Now let's look at what are the constraints that we face uh domestically to provide an industrial base that can produce at the capacity that we need and then how do we look at extending that in ways that are um uh you know value added.
▶ 0:43:14Uh now that's why I think there it's a complex equation but we can't get bogg bogged down by thinking it through as the Pentagon is often guilty of. Uh and so I think on the munition side we're exploring uh and I I hopefully this will be part of my theme throughout the the discussion today is the mission that we have is delivering capability. Acquisition reform is an enabler of us to do that more quickly.
▶ 0:43:40And so we are taking munitions as that pathfinder to say let's charge forward fast, ramp quickly and then think through how do we uh leverage these enablers whether it's acquisition reform and streamlining the regula regulatory burden we place on industry or exploring the co-production partnership because I think you'll at least in my experience we'll move more quickly if we're driven by this outcomebased approach to how we're thinking through both acquisition reform and co-production opportunity.
▶ 0:44:08So getting that holistic demand picture I think sort of puts out a marker for us to pursue. Um with respect to the tariff policy, we are certainly actively monitoring the impacts of that to uh to to defense production. I'll confess I don't have chapter and verse on uh what how that those regulatory
▶ 0:44:28there's a lot going on and it changes rapidly. So I can understand that.
▶ 0:44:31Yeah. But but certainly we're uh very I my team is very attuned to how we can uh mitigate any impact that might have on our ability to acquire quickly.
▶ 0:44:40Yeah, I think it's going to be crucial to build up our capacity collectively as an alliance. When you look at all of the needs we have, drones, missiles, ships, we're not going to be able to do it all on our own. Uh so we really want to emphasize those partnerships. Last question.
▶ 0:44:57So, one of the things that really struck me, the DIU and the efforts at R&D have been really kind of successful in the sense that if you're an innovative company and you've got a good idea, you've got a decent shot of getting a contract to do R&D um and develop a new idea in any of a thousand different places. Where we fall off is if that idea bears fruit and we decide we want it. the gap, the valley of death we talk about between R&D and procurement.
▶ 0:45:26Is solving that problem really as simple as just giving more flexible money to the Pentagon to make the quick decision and say instead of having to change the color of money from R&D to procurement, going through a two, three-year process, we'll just say, "Hey, if you like that, we're going to give you $10 billion. Go buy it." Um, or are there other things that we need to change so we can more quickly get to that point that when we develop a technology, when we develop a capability and we decide, gosh, I love that. I want a thousand of them.
▶ 0:45:56You can just go do it. How do we make that move more
▶ 0:46:00I'll start and ask for any input from my colleagues. I think that certainly the flexibility of funding is helpful. Uh I think u uh I'm not an entrepreneur, but I've talked to enough to know that your run rate and your ability to sustain um funding to keep a company alive uh on a two-year cycle is challenging. Um and so u ensuring that we have the flexibility to make money available to scale those technologies is critical, but I also think it goes back to a lot of the things that we're thinking through in acquisition reform.
▶ 0:46:30How are we placing burdens on companies? I think there's a lot of flexibility that maybe we haven't fully taken advantage of with other transaction authorities and uh trying to provide relief to some of the cost accounting standards to uh younger non-traditional companies. Um so that's another opportunity for exploration uh because certainly we don't want to miss an opportunity to take advantage of a promising technology because a regulation or a or a or a bureaucratic process got in the way.
▶ 0:47:02Uh, Ranking Member Smith, the Navy's had a good success with DIU partnering um on some unmanned systems, unmanned surface vessels, unmanned underwater vehicles, uh, where DIU was able to put out an RFI in January 2024, uh, November 2024, the performer demonstrated success and by May of 25, we were able to award a production OT of about $400 million for a significant number of small USVs.
▶ 0:47:28Similar on the UUV front, we had a commercial UUV that DIU was able to test and it made more sense to go with a a FAR-based contract into production which we've done. So I think DIU is a powerful tool and uh we'll work kind of through each use case of what makes sense.
▶ 0:47:44Yeah, that makes sense. Thank you very much. I yield back. Thank you, Mr.
▶ 0:47:48Chair recognized gentleman from South Carolina, Mr. Wilson.
▶ 0:47:51Thank you, Chairman Mike Rogers. And first and foremost, I would like to thank all of you for coming to testify today and your service to our nation. Uh your backgrounds are unprecedented to serve the American people successfully. We appreciate your push for a strong America by way of peace through strength by helping to get us. We need to face and deter our enemies. We're in a cold war we did not choose between dictators with rule of gun invading democracies with rule of law.
▶ 0:48:20War criminal Putin, the regime in Thran, the Chinese Communist Party, continue to modernize their capabilities and rapidly expand as they grow closer to one another. The largest military peacetime buildup in world history. The US must remain ahead of adversaries to ensure that we maintain peace through strength. And my questions really are uh in appreciation of Chairman Mike Rogers bipartisan initiatives. Secretary Duffy.
▶ 0:48:47From my 23 years service on the committee, sadly we've made more attempts at acquisition reform than I care to count. Addressing the issues with our acquisition process is vital to ensuring our war fighters are properly equipped to deter enemies. Technological advances are achieved today remarkably as never before in history. From your view, why is it so hard to fix the system which clearly needs to meet the needs of the war
▶ 0:49:18Well, thank you for your question, Congressman, and I agree. I've been around the Department of Defense for about 15 years, and uh it is uh uh it is frustrating that it continues to be a challenge for us to learn how to acquire Earth systems. In that time, as I've thought about how to approach this job, I do think the differentiator is execution and leadership. And so, uh, I'm privileged to serve serve under Deputy Secretary of Defense Fineberg, who I believe is really taking it right to the problem.
▶ 0:49:47We are having unprecedented levels of engagement with industry leadership. Uh, I was in Huntsville last week talking to the program managers and program executive officers. I think bringing the urgency and the desire for change to the folks that are really executing the mission and ensuring and providing them with the assurance that they have the top cover. So if they're going to take risk, it's under our direction and it's calculated risk, but it's the risk that's required to move fast.
▶ 0:50:15I think when we establish a precedent like that and then we recognize and reward folks who uh repeat that behavior, uh it's my hope and my uh projection that we'll be able to systematize some change.
▶ 0:50:28It's very encouraging. 15 years at the Pentagon and you're still optimistic. This is good. Uh and Secretary Duffy, I'm grateful to represent the second district of South Carolina. It's the home of Agy of Aken, a leading innovator in manufacturing of specialty glass fiber solutions serving the global country composits industry.
▶ 0:50:50What is what steps in your office are being taken to ensure that we continue to have the capability to produce unique critical manufacturing materials in the United States and thus preserve this essential starting point of America's national security supply chain.
▶ 0:51:07It's absolutely critical that we ensure that we've got a diverse uh industry. Uh one of the challenges that we've confronted as we're thinking through uh this uh acquisition reform is our dependency on single source suppliers. And so uh finding those unique businesses that whether they're dual use or uh uh single source, how do we reinforce the ability to provide uh uh provide capability from a diverse set of of actors?
▶ 0:51:36So we're always looking at where is there fragility in the defense industrial base and how can we apply the resources and authorities that Congress has applied to reinforce that uh
▶ 0:51:47Well and it's exciting that Agy also produces the interiors uh for the 787 Dreamliners that are made by Boeing and Charleston. So um we can have a fusion as the as China is achieving of military uh and civilian uh purposes and uh AGYB classic. Additionally uh as you've mentioned uh saving time to uh for current commercial offerings can you give some examples?
▶ 0:52:17Well, I just was uh having a great discussion with General Perie before the hearing about how uh space benefits so tremendously from dual use uh application where the commercial industry is uh stimulating investment that the department can benefit from. And so I think looking across all of our offering, all of our needs and identifying how are there ways for us to leverage commercial investment to extend um the uh uh the purchasing power of the Pentagon is is top of mind.
▶ 0:52:47Thank you very much. And again, we appreciate each one of you. And I yield
▶ 0:52:52Thank the gentleman chair. And I recognize gentleman from Connecticut, Mr. Courtney.
▶ 0:52:55Thank you, uh, Mr. Chairman. Again, I just want to follow up on Mr. Smith's opening comments about the need for um the department and congress to continue to collaborate at the highest level possible. I want to spend a minute on ship building which Mr. Potter is obviously got a lot of um really outstanding experience.
▶ 0:53:12Um in my opinion the industrial base is actually expanding uh right now the um industrial base funding which Congress started in 2018 initially as the SIB and now is the MIB the maritime industrial uh base uh we're now seeing in Alabama, South Carolina, Florida, Philadelphia, Pennsylvania.
▶ 0:53:32um strategic outsourcing and new shipyard growth in every one of those uh areas there for steel fabrication that um again is shifting manh hours uh for the Virginia and Colombia class program which is critically necessary. The MIB in my opinion has been a real success story because it's very agile. It's a direct reporting program um and um you know obviously fully accountable to to the department and to us uh that again have been funding it at a very high level. Uh I would note um Mr.
▶ 0:54:02Secretary that um last week when we did the NDAA there was a bipartisan uh amendment that restricted the use of funds to move the MIB uh from its present organizational location. There is obviously lots of chatter that um it may get moved to NAVI which uh again without any consultation with any of us who um and Mr. Potter knows this.
▶ 0:54:25Um we have been directly involved in the plusup of industrialbased investment going back seven years in terms of this this um possible move. Again, I have the highest respect for Admiral Downey. um he's just an outstanding leader at NABSI, but they have a full portfolio in terms of the work that they're already doing and basically stopping the MIB to shift it to a new organization um and and then basically uh have a a totally different sort of
▶ 0:54:55mechanism for again that kind of investment which I just described for the different shipyards. In my opinion, that's the opposite of the speed act. So again, I would ask you uh today just to commit to the fact that Congress obviously through the amendment which Mr.
▶ 0:55:10Whitman and I um supported last week um has definitely strong um investment and and intent in terms of uh how this area and hopefully that you will consult with us before any final decision is Thank you for bringing it to uh my attention and and certainly uh receive your input and and we'll work with uh Mr. Potter and the team to and and consult with you before anything is
▶ 0:55:39Right. Yeah. Mr. Potter, did you want to
▶ 0:55:42I agree, Congressman. Thank you, sir. So, um Mr. secretary in terms of the co-production discussion that was uh happening earlier which again I think is something that's very um I think the appetite amongst our appetite our allies is very high right now obviously because of Putin and and what's happening in the Indo Pacific um the AUS agreement which again Congress authorized uh two years ago in my opinion is the sort of perfect model for co-production
▶ 0:56:13um in the in the authorities that we enacted We knocked down all the uh defense export controls that has the ITAR inhibitions to co-production and acquisition um now are fully cleared for both the UK uh and Australia. This morning the Australian uh government announced the second down payment in in the AUS um commitment that they made of $800 million.
▶ 0:56:38That takes the the tally up to 1.6 billion that Australia is going to be investing in our industrial base. Again, there's a review going on, which is totally fair game, you know, with a new administration. But I have to tell you, you know, we wrote a letter, a bipartisan letter supporting AUS from this committee. The select committee on China a couple days ago did exactly the same thing, Republican and Democrat supporting uh AUS. We're we're not getting a lot of visibility in terms of this process.
▶ 0:57:08And and I would just, you know, reiterate while I've got you here. Um, you know, again, you want to talk about joint production of unmanned systems with, you know, Anderil in Australia. Um, you know, some of the again investment that they just announced into our country. We had to pass a law to allow them to send us money.
▶ 0:57:26Um, which shows the depth of their commitment um to that process that um again hopefully people are listening that we again there's high interest and intent to make it work. If there's improvements that the review is going to put forward, I think we would embrace them. But to sort of again stop it or it would be a huge mistake. And with that, and I yield back.
▶ 0:57:51Chair, not recognize gentleman from Virginia, Mr. Whitman.
▶ 0:57:54Thank you, Mr. Chairman. Like to thank our witnesses for joining us. Secretary Duffy. Uh congratulations. Uh I know you have a uh uh a challenging course ahead, but I know you're laser focused to get things done. Uh, as the chairman pointed out with passing the National Defense Authorization last week, one of the provisions that I was able to secure in there would extend the terms of program executive officers to six years from 3 years.
▶ 0:58:20And the language clarifies this isn't about impeding promotions or about uh impeding career trajectories, but this is about giving our PEOs more authority over the incorporation of new technologies, have them be more forward-looking, incentivize positive uh supporting accountability. Uh one of the great examples is that is naval reactors. Naval reactors is a six-year billet. It is about making sure that there is a no-fale scenario there in naval reactors.
▶ 0:58:50That should be the standard that we put in place for all of the program executive offices as well as program managers. I would argue a lot of times there's there's lack of willing to take risk. There's lack of willing to project things forward. In some instances, it's like if I can just get my three years done and get out of here, I'm going to be okay. And they don't want to uh take the risk necessary to really move us forward. So, I just wanted to to hear from you.
▶ 0:59:15Are you willing to work with us to make sure that as that transitions, as this requirement hopefully comes into place, that we can actually get this in place and that we can enable uh this now extension of term here to really provide the impetus for these program executive officers to do what I know they can all do and a lot of times what they want to do. This gives them the window to be able to get that done.
▶ 0:59:39Well, thank you for your leadership on that issue. But I will say that uh uh we can talk about acquisition reform and we should and we will but none of it's uh enabled if we don't have a workforce that's empowered to execute it.
▶ 0:59:52And so we are undertaking an initiative that was directed by the uh modernization of acquisition process executive order issued in April that asks us to examine the workforce holistically. What are the roles and how do we optimize that? So I think that's very aligned with your proposal. Um uh and you know I think you I I appreciate a couple of your comments there. Authority, incentives, accountability all need to be key ingredients to how we tackle this problem.
▶ 1:00:21So 100% have our commitment to work together to figure that out.
▶ 1:00:24That's great, Mr. Secretary. And thank you. You're right. Empowerment gives the ability for everyone to be part of that vision to move things forward. Uh also in the uh in the in the 26 FY26 National Defense Authorization Act um there's a provision that would scale up the successful model that's put forward by DARPA, the Defense Advanced Research Projects Agency that allow more companies uh that uh in the qualified Defense Department of Defense
▶ 1:00:54consortiums uh much like the one that uh is in your office, the defense industrial-based consortium uh to uh facilities clearance so to be able to get more people into the classified space so they can actually understand what are the needs and a lot of times these are smaller companies these are companies that you know don't have the ability to build their own skiff but they would like to participate in this and this I think will help us solve a lot of problems as far as getting
▶ 1:01:24a wider scope of businesses interested a wider scope of businesses that can participate a wider scope scope that'll actually be knowledgeable about you know what's what's DARPA looking for what's the DoD looking for what are the things that we can do and we talk about you know CS and all the things we can do to bring commercial technology well if the companies out there don't know what department of defense is looking for if we don't give them more of a windshield or more of a place to have access then we won't get those companies to play in that
▶ 1:01:55space so I'm committed to working with you to expand those opportunities want to get your perspective if there are additional things that we can do in in in uh in addition to the defense industrial-based consortium opportunities to provide uh that those uh those openings for folks to understand what are the needs of the
▶ 1:02:14Thank you for highlighting that. I'm encouraged my newest colleague under secretary of defense for intelligence and security Brad Hansel was confirmed last night. this is one of those issues that overlaps with him and so I'll look forward to working with him because I do recognize it as a constraint on new businesses and startups to get access to facilities and clearances and uh I think it's one of those barriers we want to remove if we can.
▶ 1:02:37That would be great. Thank you, Mr. Chairman. I will yield back the balance of my time.
▶ 1:02:42Thank the gentleman here and I recognize a gentleman from California, Mr.
▶ 1:02:48Uh thank you, Mr. chairman and thank you for your work on the speed act together with ranking member Smith. I want to follow up on what ranking member Smith said. If this is going to work, we have to have all the information that we need and request from the department. I would hope never to have Mr.
▶ 1:03:12Smith or any one of us repeat what he said earlier about the defense department and maybe one or two of you that are on the panel simply not responding to the request. I would recommend you never ever fail to respond to requests to this committee particularly from the ranking member and the chair. There's a heavy price to pay and you will eventually pay it. So I want to start with that.
▶ 1:03:40Uh the weapons acquisition program that the GAO has assessed is $2.4 trillion dollars over the years ahead. Seven major 79 106 programs, 79 major defense acquisition programs, 20 million uh 20 mil middle tier, seven future major weapons programs. It goes on and on and on.
▶ 1:04:04Clearly, the oversight of this committee not only demands information, but requires information. There's an ongoing dispute over who controls the go GAO. Let me be clear, the GAO is not your department. The GAO works for us. And if you want to have a fight, we'll fight about that.
▶ 1:04:31Internal to the uh Department of Defense are multiple review organizations, many of which are being gutted presumably in the uh area of faster better. Maybe yes, maybe no. But I would be recommending caution on the gutting and the elimination of many of those internal organizations, the IG, the controller general, acquisition, sustainment and so on and so forth.
▶ 1:05:02Uh do they really slow down or are they really necessary to make sure the program actually works and that the cost associated with it are appropriate. So I would uh urge caution as you move forward with what is a wholesale gutting of some of these organizations that are necessary to review the ongoing. We're all for speed. Uh in your uh testimony, Mr. Duffy, you spoke about the consolidation.
▶ 1:05:31Yes, it is clearly a problem and needs to be addressed. uh the lack of competition at that level is doesn't exist and that's where most of the money is. Uh Mr. Potter, you raised the issue of the DIU seems to work particularly uh we'll probably hear space major issue in space major opportunity for space.
▶ 1:06:00You just heard from uh my colleague about some of the inability of those who might find their way through the DIU process, some of the barriers that are there, secrecy, etc. Uh efforts to eliminate that or to work that out very very important.
▶ 1:06:17I'm hopeful that the DIU program can be expanded that there would be new uh new innovation whether it's from Silicon Valley or any other part of um that it could work its way through the DIU. So keep it going for all of you. Some of you have experience in this. Some of you need it. Let us know. We're from the government and we're here to help. Okay.
▶ 1:06:48So, let's work together on that. Uh, I have a whole series of questions, but I would really urge your attention to be very, very careful about eliminating those oversight programs, even the programs that are there to see if what you're buying actually works. So, please be careful about that. I'm going to yield back my my remaining time.
▶ 1:07:10just let you know don't stiff ar don't do not stiff arm us when we ask for information it not a good path for you to go down I yield back
▶ 1:07:23gentleman yields back chair and I recognize gentleman from Tennessee Dr.
▶ 1:07:27thank you chairman uh this is a little bit along the lines of the gentleman from California but uh Mr. Duffy, you noted that the current defense acquisition system is no longer serving key stakeholders effectively, often delaying the adoption of the critical technology to equipped our war fighters and make them a more lethal and agile force. What specific reforms would you recommend to streamline the acquisition process while maintaining accountability and oversight?
▶ 1:07:52Well, I think it is a key balance to make sure that we're accelerating but maintaining the rigor that uh uh Mr. Gari mentioned. Um and I think it's uh I I do think it's empowerment of the workforce ensuring that they can exercise judgment knowing they have top cover. We have uh a deep body of knowledge and expertise on how to develop these systems.
▶ 1:08:18Uh but when we have a compliance of culture that or excuse me a culture of compliance that um is so risk averse I think uh we tend to uh apply the brakes uh the the workforce tends to apply the brakes out of self-preservation.
▶ 1:08:36And so um that's where I think we're working hard to get uh that to to drive that level of urgency to as we promote these acquisition reform initiatives such as uh the the um uh some of the uh regulatory burdens we place on contractors.
▶ 1:08:58um where we can provide judgment to the contracting officer to find the right application of does a stronger um or or more regimented approach to applying this contract uh apply in this scenario. You have that jud you have that freedom to uh exercise that judgment. Um or you know do we not need to check every box on that compliance list that then slows down the process.
▶ 1:09:26So I think it's a matter of we've got great professionals in the acquisition workforce, but I'm not sure we have the incentives that enable them to uh move out and and and execute effectively. And and that's where I think we bring that leadership to ensure that they understand what are the full scope of authorities that Congress has granted. You have our top cover to go execute them and do it at speed.
▶ 1:09:46Okay. And uh each of you have highlighted how excessive oversight and regulatory requirements for government customers have slowed progress and increased c cost across the DoD. However, many of those requirements were introduced in response to findings of uh waste, fraud, and abuse within the department programs.
▶ 1:10:05How will the speed act and continued implea implementation of the president's executive orders help to streamline oversight while still maintaining efficiency, innovation, and cost effectiveness in defense procurement and production? And how can the committee further empower the department to improve our acquisition process while maintaining appropriate oversight? I've got two minutes, so anyone on the panel who would like to chime in can. And uh I'll just open it up to each of you in the time we have.
▶ 1:10:36Uh sir, I would just say it comes back to accountability and just empowerment of those uh of those program executive officers and and those contracting officials. And it comes back to training as well just to make sure that we have the most trained and well-versed workforce. And I think going forward with that, we should be in a still in a very good place to maintain fair and reasonable pricing.
▶ 1:11:05Sir, I agree with everything that's been said. I would just add I think it's incumbent on the people at this table, your defense acquisition executive and the service acquisition executives to set the standard and to sort of instill the culture and to drive the change. And that's what we're committed to do. Okay. Yeah, I I certainly echo those thoughts.
▶ 1:11:25I I think as we take a look at how how rules get laid in place, as we take it, you know, as we look at those at those failures and setbacks and that turns into risk avoidance in the future, uh for us to take a different look at that and engage with that risk, we should understand why the rule was placed there and if it's not getting us the right outcome for us for us to exercise some leadership and challenge that rule.
▶ 1:11:53And I and I would echo the secretary's remarks on a culture of compliance versus speed. That's a real key area that we've been focusing on in space in particular. And then the speed act hits on a couple key areas. Portfolio uh management uh funding flexibility and then I would even add delegation. Those are key areas where I think that we've got examples in the last several months where had we had those authorities in place, we might have been able to get uh activity done faster.
▶ 1:12:18Very efficient use of my last two minutes. Thank you all. I yield back.
▶ 1:12:23Gentlemen yields back. Chair and I recognize a gentleman from New Jersey, Mr. Norcross.
▶ 1:12:27Thank you, chairman, and thank the witnesses for coming here today. And uh as you can see how excited we are about the uh defense acquisition reform and the folks that you're seeing here, the ones particularly on the hardware committee on what we're dealing with day in day out.
▶ 1:12:42So we talk about building capacity and we've seen across our industrial base not just for defense but our country outsource so much of what we used to do and how do we bring that back couple years ago we passed the minds act which talks about domestic content and the idea of buying American is a great concept but there are details not just to buy it to buy a reason it's to build that capacity so when we need to use it it's going to be there and one of The most difficult
▶ 1:13:13things in building that capacity is building the workforce, the skilled workforce. You don't order that and get it in two weeks. That takes a generation. So the idea of domestic content incredibly important. Uh so when we talk about the awareness the department has of in major acquisition programs was 55% and there's all kinds of Swiss cheese how they can get around that. And what the mind's act did over seven years was to increase it to 75%.
▶ 1:13:43Not just for the sake of buying American which is a great concept but to build our capacity not just to say for a year but over the years uh part of that in the 24 NDAA was uh that we were to get a report due in December 24 that has passed. We have not received that. So Mr.
▶ 1:14:04Duffy, first and foremost, will you make sure that we get that report in a timely fashion because the idea of not knowing what contains our domestic content is a real issue that we've been dealing with.
▶ 1:14:20Yes, sir. I will we'll we'll get that to you. And that goes on year to year so we can understand what is coming down because coming through the pandemic we learned the hard way and certainly much of what we're doing here today focuses directly on building our capacity. I I just want to shift a little bit. It was mentioned the right to repair the intellectual property of company. So, we went more off the shelf.
▶ 1:14:45Great concept, but then we immediately get into something that was developed by a corporation for a profit motive and yet you want to have those intellectual rights to repair it. This is an extremely difficult issue to talk about, particularly when we're building, let's say, for a uh a vehicle that's built on a commercially available.
▶ 1:15:10The idea of just turning it over is something that is going to be a problem. The F-35 is the old way. We unfortunately don't own that and we are paying for it as we go down the road. But how do you balance the right to repair what we need in the field at the appropriate time versus a company's intellectual property? It can't be all cases all the way.
▶ 1:15:40We took a stab at this in the NDAA, but this is going to be an ongoing issue, particularly when you're asking off the shelf. How are you going to deal with I think it's a very important and excellent question.
▶ 1:15:55And I think uh we have to be creative about how do we is is there a surgical way to get access to the data that we need in order to enable us to repair the and sustain the systems without violating um the intellectual property protections that are the profit motive for corporations and are really the enabler of our enabler of our industrial capability.
▶ 1:16:20uh and so I don't sitting before you have the answer today but uh I assure you I understand the complexity of the issue and it's one that we have some of our best folks uh sustainment is an ongoing challenge and just thinking through how do we uh when you're competing for resources how do we ensure that we have that adequately addressed so that we have operational readiness is a high priority of mine and and um and this is a an important element of that so I assure you we are getting after this problem and trying to figure this So each
▶ 1:16:50one of the hardware committees is very much focused on that to make it work for both sides because that innovation is the very issue that we want to capture and move on. With that I yield back. Gentleman yields back. Chair and I recognize a gentleman from Texas, Mr. Fallon. Thank you, Mr. Chairman. Uh Mr. Jeffy, we all know that um you know DoD facilities like Red River, some of them are underutilized and we added language in the NDAA to explore how we can best use them moving forward.
▶ 1:17:20And so what I wanted to ask you was if you have any uh plans or what you'all are working on to repurpose the sites and another concern that I have is you've got a highly skilled labor force, you know, at Red River at that depot and others. And if we once those po folks if we happen to lay them off I mean they're gone and we're not going to get them back and it's very difficult to replace that kind of labor. I mean that's a huge resource for the military. So I wanted to hear your thoughts on that.
▶ 1:17:50Well thank you for your question. Generally speaking you know I I I come at the problem recognizing that we have constraints in our industrial base uh across the board whether it's workforce skill sets uh supply chain facilitization. Um and so um uh anytime we have excess capacity um you know I think we we don't take a hard look at how can we leverage that or repurpose it for purposes of uh whether it's sustainment or increased um uh expansion capability for our munitions industrial
▶ 1:18:20base. Um I I don't here today have for you an answer on the Red River. I don't know if my colleague from the army's got another perspective on it.
▶ 1:18:30Yeah, I can chime in here for a second sir. uh and thanks for the question and the comments about the workforce. We fully acknowledge that and we would be concerned about that. So what we're doing is in concert with General Mohan at the Army Material Command, we are lock step in this as far as trying to figure out ways and better courses of action to how to sustain those types of facilities and depos.
▶ 1:18:53So for Red River, it's looking at how can we streamline the the public private partnership aspect, but also how can we leverage private capital to go in there and just invest there. So things like Sky Foundry, looking at broadening the mission sets at at those depots to potentially produce things like UAS components, you know, for small UAS, creating a new industry there or just having that organic capability that we could always fall uh back on to surge. That would be huge for us.
▶ 1:19:24in that uh as we do that the intent would be then is that you get more uh venture capital to come in and start to invest around that area and then just potentially create a market space.
▶ 1:19:35Well, I think we know that uh I mean the demand for drones and unmanned vehicles whether they be in the air, ground, sea are are greatly enhanced. I think Ukraine taught us that and that was one of the thoughts that we had and not just me on this committee ironically other members came to me and talked about maybe switching over because JLTVs and Humvees aren't you know and re working on those isn't going to have u there's just that not that need but there is
▶ 1:19:59right sir you know conversely this incredible need and where are we going to produce those you know and and making them with just American parts and maybe not our greatest geopolitical adversaries parts right could could be and touching on I just wanted to ask as well um Secretary Duffy about AI and how you know your vision for it. Clearly we want to make sure it's streamlined and and uh seamless for military application and uh I think that's an invaluable thing to discuss for a minute.
▶ 1:20:29Absolutely. It's a key enabler and and our adversaries unfortunately are embracing it and so we have to move quickly to find out how we can apply it operationally. But I also think there's opportunity. Um, I mentioned earlier I've been in the Pentagon for 15 years and one of my biggest frustrations is the lack of modern B business process management. I mean you can look across the acquisition system and all the disciplines whether it's uh uh financial management testing requirements.
▶ 1:20:58There's all kinds of opportunities to bring how we do business into the 21st century, which I think is a key foundation to then finding ways to apply artificial intelligence internally to how the uh Pentagon uh operates, whether it's AI enabled design where we could do um uh better optimize the systems we're developing or uh optimizing how we're expending our resources.
▶ 1:21:20So what I think about in terms of how to uh accelerate and improve the way we do our work, I think there's tremendous opportunity for AI. And then um certainly with respect to enabling operations and finding ways to um apply it responsibly uh in the deployment of our systems and in our operations is an area where I have less visibility and expertise uh but I know we're actively pursuing opportunities to enable the war fighter who who can help us
▶ 1:21:50identify ways to apply it to improve how we uh win and fight wars.
▶ 1:21:55Yeah, I kind of didn't think of it that way. AI can help us use AI more efficiently for the DoD. So, thank you very much, Mr. Chairman. I yield back.
▶ 1:22:02Gentleman yields back. Chair now recognizes a gentleman from Massachusetts, Mr. Molton.
▶ 1:22:05Thank you very much, Mr. Chairman. Uh, thanks to a lot of effort and pressure, the F-35 program is marginally improving, just in time for drones and other unpiloted aircraft to basically take over warfare. I think it'll probably go down in history as a huge, massive waste of taxpayer dollars. Um, but what lessons have we learned from this, Under Secretary Duffy?
▶ 1:22:31I think we've learned a lot of lessons. Number one, I think uh there is an element of and I think you'll see some of that uh based on my conversations with my colleagues in the air force of F-47 where we maintain a government reference architecture which inherently in the design of the system gives us insights into how the system is architected allows us to maintain competition in the development of mission systems and um u and and hopefully competition throughout the life cycle of the program.
▶ 1:23:01So that's number one. I think number two is u u you know we need to go fast. We want to go fast uh but the risk of concurrency and pursuing technologies that are not fully mature yet trying to incorporate them into a weapon system uh can end up slowing us down.
▶ 1:23:18So I think it's having the expertise to apply the judgment to find how can we accelerate and how do we need to just slow down a little bit and make sure we're doing rigorous uh evaluation of how to uh deploy mature technologies into systems that doesn't delay us in the long run.
▶ 1:23:36Uh, another problem with the F-35 is that uh, they tried to get a part in every state and that's one of the reasons why it's taken a lot of effort from for Congress to apply pressure because there a lot of colleagues who don't want to uh, lose that business. How are we going to fix that with the
▶ 1:23:54Sir, I might defer to my uh, Air Force colleague on the acquisition strategy on the F47.
▶ 1:24:00No, I I appreciate that as well. the uh the idea of like like uh under secretary Duffy had just mentioned u the approach there regarding uh the government's understanding of of how the work will be done by by Boeing in this case what are the suppliers to those guys are they really the best in class are they really performing uh using an open architecture so that if one isn't performing what are the alternatives maintaining maintaining a base of potential suppliers
▶ 1:24:31uh so that we are not completely locked in.
▶ 1:24:33So let's talk about that base for a second. Um in the last 30 years DoD has dropped from 51 prime contractors to Do you believe that this is over an over consolidated market or are there more are there things that DoD should do to increase competition? Under Secretary
▶ 1:24:53I absolutely think competition is critical and ensuring that we're preserving competition when we're thinking about it's a challenge, right? You want to always pursue the I'm sorry, go ahead.
▶ 1:25:05Well, should should previous administrations have p pursued antitrust litigation or or what like how do we prevent this over consolidation? my focus is going forward and I think it's how do we think through when we're making acquisition decisions and I I do think F47 is an example of the new kind of thinking that we need where we're not surrendering the entire architecture of the system and the acquisition strategy to a single contractor where we can maintain diversity in a single platform and participate
▶ 1:25:36in the competition going
▶ 1:25:37and I agree with that but if there are only a handful of contractors then you're kind of back in the same position so how do we prevent this overconolidation in the industry.
▶ 1:25:45Well, I think that I think that that you will you will always have a need for very for these exquisite systems for uh traditional vendors who can uh bring together supply chain workforce all of that.
▶ 1:25:58uh but I I think that in this case uh where you have a more open approach to those subsystems you can be diversifying the industrial base actively as as a government where you're more participatory in who are the suppliers that are providing those subsystems and it's that stepping stone from a subsystem to a prime uh that uh it's a required I think for growth of the defense industrial
▶ 1:26:23Mr. Bailey did you want to add something? Yeah, sir. If I could pile on as well because because certainly along those lines, right, you have you have only it is very capital intensive to go through to have facilities to be able to construct all those things. Uh so we look at other opportunities in the industrial base at those at those subsystem levels certainly, but that's not to that's not to totally forget that there we can create more opportunities to bring new entrance in or scale smaller ones.
▶ 1:26:51And we see that in our collaborative combat aircraft program where we have the companies that are performing in there are not not from that traditional ilk right and they are they are looking at how to build how to build complete systems. Uh and then the question for them is now now we take a look at their ability to produce on those as well.
▶ 1:27:11Right. Thank you Mr. Chairman. uh ch the gentleman from Massachusetts brings up a topic that's going to take a lot of time for this committee in the future. That is a huge challenge that he just addressed and that we really don't have the solutions to, but we're going to have to figure it out if we're going to be able to meet the threats that we have. Uh but with that, I will recognize u Miss Kiggins from Virginia.
▶ 1:27:35Thank you. Thank you, Mr. Chair, and thank you to our our hearing pan hearing panelists today for being here. I appreciate the work that's being done to speed up that acquisition procurement process. We hear a lot of complaints about it. I represent Virginia's second district, so home to the Atlantic Fleet with the Navy. Got the East Coast Master Jet Base down there. Just wanted to talk a little bit about about future of naval aviation. I'm starting to sound like a broken record from this seat every single hearing talking about the money or lack of money that's been allocated to naval aviation specifically.
▶ 1:28:04I think our prior question was a great leadin because we are hearing a lot about F47 pro the the project and uh and I know that Department of Defense is now talking about taking money away from from our FAXX program putting it towards F-47s. I've got an aging fleet of F-18s and Naval Air Station Ocean and I have no commitment from the Navy about the home basing of F-35s even there. So, I know that Congress has been very clear and allocated and appropriated over $1 billion for this FAXX program.
▶ 1:28:33Have been told by Navy leadership time and time again about the future of naval aviation really rests on the FAXX program. So, I just wanted to know uh when this is going to be cleared up and when Congress will be reassured uh that this this proposed program will be executed. And I'd like to hear from Mr. Duffy and then Mr. Potter. Well, I I I think uh that's an ongoing discussion within the department as um u you know the the president made the decision to go with F47.
▶ 1:29:04There's a continuing discussion about FAXX and and the opportunity uh on the Navy Navy Air um and so I would defer to Miss Potter on more detail.
▶ 1:29:14Yeah, thank you sir. Uh, Congresswoman, as you know, the Chief of Naval Operations has a requirement for sixth generation aircraft for the future carrier airwing, and the department's committed to getting our war fighters the sixth gen aircraft they need as soon as possible. The stakeholders across the DoD are working to manage the risk across FAXX and other programs to make sure none are delayed, and we'll expect to have a way ahead in the near term.
▶ 1:29:38It's an ongoing discussion, as the under secretary said, within the department, and we look forward to continuing to work with this committee on it. Well, when we talk about taking that money from the Navy and and we can't use F-47s on aircraft carriers. So, I just don't I I need more of a commitment, more of decisive leadership coming from the Navy saying that we are going to prioritize that East Coast Master Jet base either in the form of F-35s, in the form of XAXX, FAXX.
▶ 1:30:02Congress could not be more clear in in our piece of the puzzle and our being a a balance of of one of our legis branch of our government and where we want that money allocated. So uh so it is a further discussion but when you talk about timeliness and I know this whole hearing is about the timeliness of acquisition procurement I'm out of time on my naval aviation side my hornets are over 30 years old out there and they've been a great fighting platform but when you look at what we're faced with our potential fight potential China fight I need FXX I need F-35s
▶ 1:30:32I need to get them in the hand of my carrier air wings on the east coast master jet base. Oh by the way we only have two west coast east coast. Please prioritize that. I want to a little bit talk about shipyards uh my remaining time just because I have a lot of those in Hampton Roads as well. Just wondering about if there's any any appetite for public private partnerships. We talk about the infrastructure needs, infrastructure upgrades at Navy shipyards under the shipyard infrastructure optimiz optimization plan, SCOP plan. Uh Mr.
▶ 1:30:59Duffy, is there is there any appetite for maybe a public private partnership because I feel like that might be the quickest way to get some of these infrastructure repair work done. very happy to explore the public private partnership model. Um ship building industrial base uh is is is a big challenge and I know that Congress has made a significant investment uh to ensure that we've got modern facilities.
▶ 1:31:23Um the deputy secretary of defense is working in partnership with the secretary of the navy on exploring all options to ensure that we're have a workforce and an infrastructure base that can support the needs of uh ship building and ship maintenance. Um and so happy to open to all ideas on that.
▶ 1:31:42Great. Thank you. And then also wanted to ask uh if there is any effort to co-develop things with our allied partners and specifically we had a meeting this week about directed energy systems uh in the form of iron dome. our Israeli partners have really worked and and almost perfected probably that system and we're talking about golden implementing Golden Dome here and just wondering if there's if there's any again appetite for co-development or licensing such systems especially so we can put them in things like Navy ships and we know we have a lot of use for directed energy platforms so we don't need
▶ 1:32:12to spend the time reinvent the wheel of got great allied partners who are working on these projects
▶ 1:32:16I think that makes a lot of sense my my colleague under secretary for research and engineering is really focused on how do we get cutting edge technology ology ready to scale and so I'd be happy to have a conversation with him about uh how are we pursuing co-development
▶ 1:32:30Thank you. Appreciate that. My time's up. I yield back. Thank you.
▶ 1:32:33Gentle yields back. Chair and I recognize gentleman from California, Mr. Carbajal. Thank you, Mr. Chairman. It's been over a year since Space Force and the department each published their commercial space strategies. To maintain space superiority, we need to lean into uh commercial space industry. Let's be clear, the space force and the entire department of defense for that matter is dependent on commercial spa space industry.
▶ 1:32:59General Purie and Secretary Duffy, can you tell me where the space force is at on the implementation of the commercial space strategy?
▶ 1:33:09Sir, thanks for the question. Um, the commercial space strategy has quite a few implementation steps uh uh throughout it. Uh many of those are on the operational side and uh the the space force can uh um take for QFR you know the details of what we're doing there. On the acquisition side we've got quite a few activities going on. Uh one of which is a complete survey across all our program managers and all our PEOs on the status of what they're doing to consider commercial space and actually make uh progress.
▶ 1:33:37We've been laying the steps for that for years with our activity with both DIU and uh um Spaceworks SBI phase one phase 2s and then getting into stratfi cooperative relationships with venture capital that's been very successful. We built a good pool of commercial new space companies. Those companies are now starting to bid on multiple different activities. You see them in space development agency. You see that in our new uh GPS RGXX program which is the Gap replacement.
▶ 1:34:03And so we're starting to see success with commercial uh company new new uh companies penetration uh into our acquisitions. In addition uh as we're explore uh uh data as a service and acquisitions as a service in certain different areas to be able to just wholesale buy uh activity as a service. So pretty good. We have a long way to go.
▶ 1:34:24It's a culture change that has to occur across the entire organization from the requirements to the acquirers to the ops acceptance testing and so there's a lot of cultural angles there but each one of those organizations has been tasked by the cso and the and the acting se myself to continue to move that ball forward. Thank you, Secretary
▶ 1:34:43And ANS were focused on how can we enable uh General Party and his execution on uh taking advantage of the dual use and commercial focus of of space. And so uh we'll continue a dialogue on uh where there are policy barriers and opportunities to leverage commercial uh to move forward in that important domain.
▶ 1:35:03Thank you. Does the Space Force have the authorities needed to fully take advantage of the commercial space industry? And if not, what else do we need to do?
▶ 1:35:14I think we do have the broadbased authorities particularly with speed act uh and the discussions of acquisition reform uh coming down. I'm excited about those. Uh one of my main focus areas and uh secretary mentioned it is this compliance culture versus a speed culture. We still have across the department and particularly in space force and in the functional areas compliance culture and it's based on the incentives of the individuals. It's not for any lack of uh of malice or whatnot.
▶ 1:35:40Many of the individuals are trying to do as best as they can follow the rule sets and regulations that they can while also delivering as much capability to the war fighter as they can. And therein lies the dichotomy. Many times we focus on as much capability as possible which ends up slowing our acquisition because we want that extra couple of percent. A culture of speed and a culture of commercial is about good enough. It's about requirements that are good enough that we can get after that commercial capability.
▶ 1:36:04So, we continue to move that forward and I would argue it's as much a culture, if not more culture discussion than an authority discussion.
▶ 1:36:11Secretary Duffy, anything to add?
▶ 1:36:14Well, I uh I think General pretty hit on it pretty well, especially when it comes to whether it's uh the speed act or uh the internal workings within the department to provide uh greater flexibility under requirements. I think that will give us the pathway to take better advantage of commercial technologies which may not have been inherently designed to meet military needs but are good enough for us to be able to leverage u much more quickly.
▶ 1:36:40Thank you. Um I'm going to ask you to think for a minute. Uh can you give an example of both a success and a failure of commercial space integration and any lessons we learned? Okay. Um, a couple of successes that I would poke at would be um um starting success, we haven't seen the fruition of that.
▶ 1:37:05When we stopped the GAP program and we moved into a commercialbased model, we took requirements off that allowed us to go from a classified activity to an unclassified activity and to get after commercial and hopefully even foreign military sales. That is a success to start that acquisition program. I would argue that the uh NSSL phase 3 uh activity that we stood up for launch, particularly lane one, is all about setting up a structure of success for uh commercial.
▶ 1:37:33Um and I struggle to come up with a failure right off top of my head. Sir,
▶ 1:37:37thank you. Um I'm out of time. I have a couple more questions that I will submit to you. Uh Mr. Chair, I yield back.
▶ 1:37:47I thank the gentleman chair recognized the gentleman from Indiana, Mr. Msmer.
▶ 1:37:51Thank you, Chairman, and thank you members or witnesses for being here today. Uh, General Perie, you've previously discussed OTAAS in front of this committee and how Space Force has increased the use of OTAAS by 470%. As the DoD works to implement Golden Dome initiative and modernized defense acquisition, what lessons learned can you share on using these innovative authorities in bringing space programs from RFI to award to development and eventually production?
▶ 1:38:20So sir, I um from uh initial discussions with uh General Goodline and the team for particularly on the SBI, the spacebased interceptor piece, we continue to uh use all these lessons learned and continue to grow forward. They plan to intend to be as fast as possible. Uh they've already hit commercial a couple of times uh in those areas. So constructs like OTAAS, which are exactly correct, 470% increase the last couple years on the Space Force side.
▶ 1:38:43constructs of MTAs which are the acquisition kind of broad strategies allow you to move fast um contract mechanisms like CSOS which have also increased by 300 over 300%. Those ser serve as baselines and then on the SBI piece they're looking at really additional novel ideas like prize uh prize activities cooperative uh work with industry where they're leveraging industry um uh development and then I think I'm going to go back to that requirements element.
▶ 1:39:10We're not trying to gold standard and define the requirements up front, but broadly speaking, what are we trying to get after? And let industry bid to those pieces. And then we have the maturity and flexibility to uh pick different elements that might have different levels of capability, but each provide their own uniqueness and bring those forward. And finally, the opportunity to have multiple winners in the endgame and not just a one and done, I think is critical. It allows you to have uh continue to build that industrial base and allows you extra resiliency.
▶ 1:39:38Okay. Excellent. Thank you. Um, I I applaud your statement in your testimony highlighting how how OTAAS can expand participation into in the defense ecosystem, accelerate innovation to meet our modern day our modern day demands. As stated by the uh modern modernizing defense acquisition executive order, the DoD should pre prefer commercial solutions and have general preference for OTAAS over other streamlined authorities.
▶ 1:40:02Are you considering the broadest possible pool of acquisition authorities for procuring advanced technology available to the space industry when looking towards development of the Golden Dome?
▶ 1:40:14Uh yes sir, we're we're looking at all the available tools particularly the tools that are uh will be coming from the hill in this uh new NDAA. Um I we the intention is to go as fast as as as possible and that means uh setting broad guidelines and standing out of the way and then using all the contractual tools possible to move fast. Again focusing on speed and not compliance and I know that team is definitely focused on that.
▶ 1:40:38Okay. Super. Um Mr. Duffy, under your office's purview is the uh industrial base fund, a fund set up with a mission to support the defense industrial base expansion to counter v vulnerable supply chain choke points. I believe the IBF's mission is essential and that the fund should be modernized to enable the DoD to prioritize the most urgent needs and ensure those efforts are fully and appropriately resourced.
▶ 1:41:04Can I get a commitment from you to work with myself and my office to ensure these modern as these modernization efforts move forward in the most concrete form possible?
▶ 1:41:13You have my commitment, sir. We are undertaking an aggressive effort to ensure that we apply the best due diligence and introduce accountability when we're dispersing these funds so that we're assured that uh the department gets the return on investment to expand the industrial base and really meet the needs of the department.
▶ 1:41:31Very good. Um, Mr. Duffy and Mr. Tollesen, um, I joined a list of, uh, fellow Congress members on July 17th, 2025 to Secretary Driscoll, expressing concerns over the potential award to a foreign entity of the on the contract to build the main propulsion system on the next generation battle tank.
▶ 1:41:53Um, how is this consistent with potentially a foreign country being awarded consistent with building up our def our domestic uh defense industrial base? Congressman, I'm not familiar with that particular uh issue.
▶ 1:42:10I will say though uh generally speaking I believe that we would always prefer domestic to the extent that we have it available but to the extent that it constrains our ability to move fast I think we always would need to look for where do we have industrial capacity so I'd defer to my army colleague in case he has additional comment there I would say uh sir uh thanks for the question we're very much aware of what of what the letter was asking for so this as you know was in Uh it's part
▶ 1:42:41of the M1E3 acquisition strategy as far as um essentially starting the development of the next generation Abrams tank. The way that strategy is set up is uh the prime contractor uh is sort of the lead systems integrator and they were in charge of picking their subs and and one of the subs that they chose to go with my understanding they went with a a Spanish transmission um that will be produced here in
▶ 1:43:11in the state of Michigan I be I believe but it is something that we are heavily engaged in now and we're going to work with the PM to better understand exactly what went into the decision space uh for that contractor to
▶ 1:43:24gentleman's times expired chair recognized gentle lady from New Hampshire Miss Goodlander
▶ 1:43:29thank you Mr. Chairman and thank you to our witnesses for being here today Mr. Duffy, I really appreciate your testimony about the importance of competition in the defense industrial base and I'm grateful to the chairman and the ranking member for their leadership on acquisition reform which is such a crucial part of promoting competition which is going to go to the heart of cutting down on waste fraud and abuse and it's going to strengthen our military readiness across the board.
▶ 1:43:57I wanted to ask you um just thank you for your written testimony on the major defense acquisition program reviews that are underway. I just it from your testimony I take it that these reviews are still ongoing. Is that the case?
▶ 1:44:11That is correct. Yes.
▶ 1:44:12And um I did notice that there is it's a 90-day review. So I'm just curious if you have a sense of from the April 9th executive order when you expect your review to be complete. So, we do have uh an initial uh review that we're working through that will support deliverable to the White House. I know we're a little late on that, but we're working towards that initial review, which was a combination of uh conversations with the programs and an analysis of the data that's available.
▶ 1:44:42Uh but I think we're we're viewing the MDAP review process as continuous, right? It's a constant uh opportunity for us to evaluate the performance of those programs and engage with those program leaders to ensure that we're providing the top cover and support they need to execute.
▶ 1:44:57I couldn't agree more. It should be an ongoing review. Um how many programs are you looking at overall? Is it 72?
▶ 1:45:04That's correct. 72 MDs.
▶ 1:45:05And can you tell us now of these programs that you've reviewed? Are there any programs that are on schedule? Uh I'm sorry I don't have the aggregate data. I'd be happy to provide that to you. I do believe we do have some success, excuse me, some successful programs that we're championing like the B21 is one that I believe we have uh Mr. Bailey may correct me, but I believe we view that as a model program that uh performs on cost and schedule.
▶ 1:45:35That's great. Well, be eager to hear what you're learning throughout this review and ways we can work together to raise up uh the gold standards and to identify and raise up the gold standards. You know, I wanted to ask there have been some questions about the right to repair. This is something I'm very passionate about. I'm grateful that this has been a truly bipartisan issue. Um when I think about it, it really goes to the core of readiness. It goes to the core of cutting down on waste, fraud, and abuse.
▶ 1:46:04Um I want to ask you as as we look at there are of course some technical issues to work out some big questions about how we balance um priorities and imperatives but as as we look towards implementation I'm curious if there are particular systems that come to mind for you that you would say we should be focused on and prioritizing as we work to maximize readiness and reduce the risks to our service members.
▶ 1:46:32I'm not sure that I've got a specific system, but I can talk you through kind of the thinking, right? I mean, the one um of course priority is uh the criticality of systems to the war fight, right? All our systems are important, but which ones are critical and how does that measure against the current operational readiness? Uh and then how does that measure against our dependency on ensuring that they're sustained?
▶ 1:46:55So I think that would be part of as we're working through those MDAP reviews, not just thinking about where are we in terms of uh developing and procuring those systems, but how are we thinking about what it would be required for us to maintain a whole of life cycle plan to address sustainment and and uh I mean twothirds the traditionally twothirds the cost of a weapon system is in the sustainment of it and so ensuring that we're thinking ahead when we're acquiring a system to manage
▶ 1:47:25the cost and the ability for us to sustain that system throughout its life cycle needs to be paramount.
▶ 1:47:32Well, I thank you for that and look forward to continuing the conversation. You know, my home district, New Hampshire, is home to a number of small businesses that are really crucial to our nation's submarine and ship building programs. Um, these companies are really at the core of supporting DoD and the Navy in meeting their 2 plus one Virginia class and Columbia submarine manufacturing goal.
▶ 1:47:54Um, in the past few months, I know the department has awarded a number of contracts to prime shipyards to cover large inflationary inflationary cost increases over the past 5 years. Small businesses in my district have said that they're facing the exact same challenges. So, I wanted to ask you, Mr. Duffy and Mr. Potter, too.
▶ 1:48:13Um, and I'll ask you this on the uh questions for the record too, but I'm curious to know more about the department's approach to assisting small businesses, second and third tier suppliers like the ones in my district who are also experiencing these
▶ 1:48:27And those answers have to be for the record. Uh, we are now going to go to the gentleman from Minnesota, Mr.
▶ 1:48:34Thank you, Chairman Rogers and Ranking Member Smith. And thank you to our witnesses for being with us today. Uh throughout your testimony and through your answers to my colleagues, we have heard about the approaches that the Department of Defense is taking to ensure that we are delivering integrated capabilities to excuse me to our war fighters at speed and scale. And I applaud your efforts and steps you are taking to streamline our DoD acquisitions process and integrating more small businesses into our uh defense industrial base.
▶ 1:49:03The importance of a strong acquisition process has been made abundantly clear. Uh Mr. Duffy. Uh, while the DoD's push for right to repair aims to improve sustainment, as you just talked about a little bit, uh, to cut costs and boost readiness, I'm concerned it creates significant business, legal, and technical challenges, particularly for small businesses and non-traditional suppliers. The debate is difficult because intellectual property law is complex and nuanced.
▶ 1:49:30And that's why it's so important that uh, we take a look at some of the proposals because some of the proposals out there are really all or nothing. and uh and that can be very problematic as you well know. So to address this uh I offered an amendment during the consideration uh of the 26 NDAA and it requires the DoD to assess what IP and technical data is needed, what it has and what it's missing.
▶ 1:49:55This is a more targeted approach and it ensures DoD only asks for what's necessary allowing industry to respond with solutions that provide necessary protections on privately funded IP. A strong and innovative industrial base is critical to national security. So, Mr. Duffy, will you commit to working with this committee to craft a balanced policy, one that meets your sustainment needs without underm undermining commercial
▶ 1:50:20You have my commitment.
▶ 1:50:22Perfect. I was hoping that'd be a quick answer. So, I appreciate that commitment and look forward to working with you and the rest of the committee on this issue. Uh, thank you again uh for all that you all do for us. Appreciate you being here today. And, Mr. Chairman, I'll give you some time back. I yel back.
▶ 1:50:37I like that. Chair recognized gentleman from California, Mr. Tran.
▶ 1:50:41Thank you, Mr. Chairman. Uh, thank you all for your testimony today. Acquisition reform remains a highly relevant topic today as DoD is faced with an increasingly contested environment across the Indopacific, Europe, and the Middle East. The defense acquisition system needs to be more nimble uh than ever before to rise to meet these global challenges. My first question pertains to the defense industrial base question.
▶ 1:51:06Under uh under secretary Duffy, what sectors within the defense industrial base do you currently assess as most fragile or high risk and what data underpins those
▶ 1:51:19Thank you for your question. And I will confess I don't have a holistic view of where the fragility exists in the defense industrial base, but I'm committed to finding uh uh working with my team to holistically understand that because I think that's critical to ensuring that we're uh uh allocating resources that Congress has appropriated that we ensure that we understand where those greatest constraints and fragility exists.
▶ 1:51:43I can tell you that we are actively pursuing within the munitions um sector uh solid rocket motors and looking at ways to expand the production capacity there. um mic certain micro electronic components u uh can be a constraint and we're also uh because this is a kind of a crosscut we see a lot of interesting innovative ideas come in in areas such as additive manufacturing and opportunities to uh improve how we're doing
▶ 1:52:13castings and those sorts of things uh uh particularly within munitions but really across the
▶ 1:52:19and Mr. Under Secretary, one of the greatest force multipliers the United States has is its extensive network of allies and partners across the globe. Uh what are the department's plans to better integrate allied co-production or supply chain collaboration into the department's industrial-based strategy?
▶ 1:52:37Well, I think the president has pushed a very strong message of self-reliance and part of that would be how do we assist our allies and partners with creating their own defense industrial base to supply their needs. Um so this is an area where uh I think we have a lot of thinking to do about how do we manage the complexity of uh technology exports um uh limited supply chains uh workforce expertise and partner with nations to share what we can
▶ 1:53:07without degrading our own operational readiness. And so within the department, I've got a partnership with under secretary of defense uh Colby uh who heads our policy office and um uh our international partnerships and we're dedicated to really thinking through how do we get after this problem in a way that really benefits the department and the holistic collective defense.
▶ 1:53:27Thank you for that. And uh like a few of my colleagues here, I'm also interested in the right to repair issues and its impacts on acquisition costs and flexibility. In an April 30th memo, Secretary Hegsth directed the Army to incorporate right to repair provisions in all its contracts. This is a massive undertaking that rises raises other questions about the ability of the Army acquisition workforce to negotiate these provisions in a timely fashion.
▶ 1:53:52Uh but my question to you, Under Secretary Duffy, is how do you plan on supporting and executing the secretary's intent in your acquisition process? Well, I think that direction uh as as we've spoken about today does uh maintain some flexibility on how do we pursue the data that is required to enable the sustainment of the system while still respecting the need to um protect the intellectual property that's privately funded uh and is really an engine of uh the innovation that we are dependent
▶ 1:54:22upon. So um I'm looking forward to working with my army colleagues to understand how do we navigate that complex issue.
▶ 1:54:30And if I may my final question, do you plan on uh excluding commercial items from right to repair? And if so, how do you see the impact uh this impacting forward deployed forces?
▶ 1:54:42I'll have to get back to you on that. I don't think we've thought that, at least I haven't thought that through sufficiently enough to understand. But um I'll just uh repeat the thought that I want to make sure that we're taking a balanced approach where we're respecting the uh intellectual property rights with the need for us to have access to
▶ 1:55:00Thank you, Under Secretary. Any gentleman, anything to add?
▶ 1:55:04Uh sir, so from the Army perspective, I would just say that we're still in the process right now of trying to develop what that strategy is going to be. I would tell you that we have already leaned forward and we're essentially surveying the force and the fleet to try to get feedback to understand exactly where a right to repair issue has uh come up and then it's a matter of looking at how do we then fix that with existing contracts and then moving forward what is the appropriate level of access that we're going to have to have with new
▶ 1:55:34uh systems. So more to follow on that.
▶ 1:55:36Thank thank you so much and I look forward to hearing back and uh Mr. Chairman I yield back. Yeah, I think dealing with it prospectively is a little easier than dealing with existing technologies, but it's your job. I'm sure you'll figure it out. We go to the gentleman from Guam, Mr. Molen. Thank you, Mr. Chairman. And as the representative for Guam, I know firsthand how delays in defense acquisitions hurts readiness on the front lines of the Indo-Pacific.
▶ 1:56:04and Guam is vital to our national security, but outdated process and supply chain gaps too often leave us waiting. Reforming the system isn't just about speed. It's about making sure capabilities reach forward deployed locations like Guam where and when they are needed. That means cutting red tape, expanding opportunities for local contractors, and treating our island as a logistical hub that it is.
▶ 1:56:34So, first question, under secretary, please. Now, Guam and other US territories often face unique barriers when competing uh for defense contracts, including distance from decision makers and lack of streamline acquisition pathways. How does the department ensure How is the department ensuring that territories like Guam are not left behind as we modernize the defense industry base?
▶ 1:57:03Congressman, thank you for your question and uh I'd be happy to work with you and your team to think that through that you know we are making uh and I've I'm the milestone decision authority for the defense of Guam system which is making a significant investment in the island and uh to the extent that it would make uh sense that seems like a great opportunity to create partnership there. So I'd be happy to work with you and your team to ensure that we're taking full advantage of that.
▶ 1:57:32Appreciate that and you got to come and visit as well. Okay, next question is uh goes for any one of the witnesses please. Now small business especially in geographically isolated regions face disproportionate administrative burdens in navigating DFARS and FAR regulations. How will the speed act and EO implementation reduce the compliance burden and expand access to local territorial vendors?
▶ 1:58:02Well, I can speak to that. We do have uh thanks to the executive orders uh from the White House a committed effort to uh examining and streamlining the foreign defires. And I expect that would apply uh to all businesses um in territories in in Konis. Um that'll be an aggressive effort and part of our overall acquisition reform strategy to find ways to ease the pathway for businesses to uh uh compete for contracts.
▶ 1:58:33Excellent. And last question for the doctor and Mr. Bailey. With Guam's forward posture in the Indoacific, even minor acquisitions delay can ripple into major readiness shortfalls. Now what specific reforms are being pursued to ensure rapid contracting, sustainment and delivery capabilities to the forward locations like Guam are available.
▶ 1:59:01Thank you for the focus on that kind of issue. If you take a look especially with the theme uh coming out of the speed speed act on the focus on the on the acquisition workforce our our contracting our contracting community has spent quite a bit of time on on their culture and the climate that they profess right so they are mission focused business leaders out there to get out to those locations to see what's going on and figure out how to bring their expertise to bear and all the tools that we talk about here OT's
▶ 1:59:32for for small business enablement uh looking at uh looking at flexible contracting strategies, open architectures, all to provide all to provide them the best solutions possible.
▶ 1:59:47All right. Uh thank you very much and under secretary, I appreciate you. Then we'll be making contact and be sure to get you over to Guam as a visit as well. Thank you.
▶ 1:59:55I look forward to it. Thank you.
▶ 1:59:57Thank you to the panel and thank you Mr. Chair. Gentleman yields back. As you can tell from today, uh, acquisition reform is our overwhelming focus this year. It's not only bipartisan, it's biccameal. And, uh, we want to work with the department. And I take you at your pledge yesterday on our telephone call and your comments today that going forward, we're going to have much better communication because we're on the same team. We're not adversaries. We're trying to to all get us to the same place.
▶ 2:00:25So, I'm optimistic and I thank you for your testimony, your participation today. and I'll yield to my friend the ranking member for any closing comments he may have.
▶ 2:00:32I agree with everything the chairman just said. So, uh, thank you for having the hearing. Yield back. We'rejourned.