▶ 0:11:44committee will come to order. I want to start by recognizing the tremendous dedication, professionalism, and sacrifice of our service members engaged in Operation Epic Fury and those stationed around the world. I support the president's decision to carry out this operation. and I believe it had to be done to protect Americans and our allies in the region. I recognize that some of my colleagues do not share that view and we will engage, I'm sure, in a healthy debate on that issue in the days and weeks to come.
▶ 0:12:14In the interim, uh we should all work together to ensure our service members have the resources and capabilities they need to successfully carry out their missions. Uh toward that end, today we are meeting to examine the state of our industrial base and how we can best position it to fully support our war fighters. Peace through strength starts in our factories, our depots, and our shipyards. Uh but we lost sight of of that after the Cold War.
▶ 0:12:43Over the last 30 years, our defense industrial base consolidated and atrophied. Skilled talent left the workforce, leaving hundreds of thousands of defense jobs unfilled. Excessive regulation pushed small businesses, startups, and private capital out of the defense business, and inconsistent demand signals discourage prime contractors from investing in production capacity.
▶ 0:13:10Uh, as a result, our stockpiles of critical defense articles have fallen to dangerously low levels, and the very allies this administration is demanding step up must wait years for American weapons need to shoulder greater responsibility. While America allowed critical manufacturing capabilities to erode, China did not. China's ship building capacity dwarfs ours. They are out producing us on ships, drones, and munitions.
▶ 0:13:40and they have in embedded themselves deep into our defense supply chains. The consequences are clear. There are growing doubts about our ability to sustain a protracted fight against China and that's unacceptable. Last year, working closely with Mr. Duffy and the department, this committee made real progress reforming a slow, riskaverse acquisition system that contributed to the hollowing out of our defense industrial base. But acquisition reform alone is not enough.
▶ 0:14:11That's why this committee is making revitalizing the defense industrial base its top priority for this year's NDAA. We must invest in domestic reindustrialization and skilled patriotic defense worker a skilled patriotic defense workforce from welders to machinists to engineers. We must provide certainty to the industrial base through expanded use of fully funded multi-year authorities.
▶ 0:14:38We must end our dependency on China for critical minerals and materials. We must incentivize increased production from new entrance non-traditionals and traditionals alike. And we must implement the president's executive orders on arms exports to leverage allied purchases to support the expansion of the US production capacity. Fortunately, both Congress and this administration understand the urgency of the moment.
▶ 0:15:05Deputy Secretary Fineberg's push to expand munitions capacity and rebuild America's arsenal of freedom is a critical step. Our committee has expanded multi-year authorities for critical munitions in the FY 26 NDAA to give industry the predictability it needs to scale production. And the president's call for 1.5 trillion defense budget is one I strongly support. makes clear we are working to back this effort with real resources. Uh but this is a team sport.
▶ 0:15:35Industry must do its part by making significant investments in production capacity. Success also depends on rebuilding fragile supply chains from critical minerals to solid rocket motors. Congress made a multi-billion dollar investment through the one big beautiful bill to address these choke points and we expect close coordination on how those funds are used.
▶ 0:15:59In that context, I welcome the department's willingness to explore new financing tools to strengthen supply chain resilience. It's clear the status quo was not working. However, Congress needs clear answers on when equity investments are the right approach. This committee has long warned about consolidation in the solid rocket motor industrial base and bottlenecks it created for critical munitions. That's why this we funded efforts to reintroduce competition into that sector.
▶ 0:16:29I hope to hear today's specific plans for how we how the resources provided by Congress will be used to develop second source providers for solid rocket motors. Modern military power rests on the industrial strength of this country. It is the difference between deterring a major war and losing a war. I look forward to Mr. Dubby's perspective on how Congress and the department can work together to revitalize the defense industrial base.
▶ 0:16:56Thanks again for our witnesses to our witness for being here and I yield to my friend the ranking member for any opening statement he may have.
▶ 0:17:03Uh thank you Mr. Chairman and thank you Mr. Duffy for uh being here and for your work on this problem. I think the simple answer to what we need to do is we need to innovate faster and get to scale. That's what we're we're trying to do. Um, I think we've made some progress on that. Um, both in terms of what the Pentagon is doing and what we did here in Congress. I really want to compliment and thank the chairman for his leadership on acquisition reform that we passed last year.
▶ 0:17:27I think it made significant positive changes that enable us to do both of those things, but clearly there's a lot more work to be done. We we don't have the capabilities that we would like and we're still not moving as fast as we would like. So, I'm very curious to hear uh Mr. Duffy's thoughts on where we're at. Um, one particular piece of this that the administration is pursuing uh to some degree is the idea of us taking an equity investment stake uh building up our own sovereign fund with a government gets involved in this. Very curious to see what your thoughts are on that.
▶ 0:17:57Um, obviously, you know, more money can help, but we also don't want to discourage fair competition that encourages people to get into this space. Um, if they think the government's going to come in and just put their their thumb on the scale, it could discourage some of the investment we've seen. And that's another big positive we've got in the last at least five or six years. We've seen individual investment in defense space that we had not seen before. A lot of small innovative startup companies in unmanned systems and secure communications in space.
▶ 0:18:26They're popping up and they're giving us some options and the ability to innovate more more quickly. So that's a positive. I want to keep building off of acquisition reform. I really think the workforce is crucial in terms of how we educate and train. Um, we need to really start shifting our broad education system to a more skills-based system. The 1950s,60s,7s when basically go get a four-year degree and then figure something out. That's not really the economy we have, not just in the defense area, but elsewhere.
▶ 0:18:57Um, we need to create situations where we can help people get the skills development training they need early in life, late in life, whenever they need it, because that workforce is going to be crucial to meeting our industrial base needs. The other big part of this is that the chairman alluded to is partners and allies. I mean things have changed and I think we need to recognize this. In 1948 the United States of America was responsible for 90% of global manufacturing. That gave us an enormous advantage.
▶ 0:19:27Now that happened because we had just won World War II and we'd fought it primarily on the road. The entire industrialized base of the rest of the world was blown away. That gave us a huge advantage. That's not coming back. All right. A lot of the rest of the world now has manufacturing capacity. Now, the good news is, at least for the moment, um they're partners and allies in many cases. So, how do we work with those partners and allies for them to help us meet our collective defense needs? We're going to really need to to lean on partners and allies and make sure we have them.
▶ 0:19:57Um, also resources do matter. This is something I've worried about in our government, state, federal level. We all have our little corner of the government. We're the Armed Services Committee. So, we pay attention to what's going into defense, but we have a lot of needs in this country, and we have a $ 38 trillion debt. I just talked about education. Workforce is important. You You spend all the money on a defense budget. You don't have the money to help support an education system. Um, we have needs in housing and healthcare.
▶ 0:20:23If people can't afford a place to live, they're going to struggle to go out there and build the stuff that we need built. So, we have to do this within a reasonable understanding of what our available resources are, something which we seem to not want to do. And lastly, and this is more on the strategy side. This will get more into tomorrow's hearing uh with the under secretary for policy. Um we can't fight everybody everywhere all at once.
▶ 0:20:50Yes, I have no end of problems with a whole bunch of different countries in what they're doing. But the notion that somehow the US is going to build a big enough military to take on every single one of our adversaries in a blunt force manner is just not going to fly. We don't have the resources to do that.
▶ 0:21:09And the destruction and devastation that would result is going to be harmful to all of us, certainly the United States, but others as well, which means that we're going to have to come up with a strategy that involves getting along with somebody. I mean, I I'll leave it up to to Mr. Colby, I suppose, to tell us who those somebodyies are. But, you know, looking at a country and saying, "We don't like what you're doing. Let's go to war." That is not a viable solution.
▶ 0:21:34And this committee, we can come up with, you know, we can do the best acquisition reform the world has ever seen. We can manufacture to the maximum of our capacity. That ain't going to get us there. We have got to figure out some way to have peace somewhere in the world if we're going to be able to meet our national security needs and not be in endless conflict. And I and I hope we will think about that as we try to figure out what the right policies are moving forward in the national security front. I yield back. Thank you.
▶ 0:22:04I thank the ranking member. I'd now like to introduce our witness. Mr. Michael Duffy is the under secretary of defense for acquisition and sustainment. Thank you for being here and you're Chairman Rogers, Ranking Member Smith, members of the committee, thank you for the opportunity to appear today, I want to begin by recognizing the sacrifice of the American heroes who gave their lives during Operation Epic Fury.
▶ 0:22:30Their unwavering courage and dedication to defending our nation and the cause of freedom will not be forgotten. Their sacrifice is the foundation upon which a safer future is built. Let us honor them today, not with just with our words, but by rededicating ourselves to the values they defended and strive to be worthy of their immense sacrifice with our devotion to building a joint force and industrial base that preserves American military strength.
▶ 0:22:58I'd also like to recognize all the service members supporting this critical operation and our national security at large. We as a nation owe them and their families immeasurable debt of gratitude. Thank you for inviting me here today to discuss the state of our nation's defense industrial base and for your leadership on driving this discussion.
▶ 0:23:18We've made great progress as the chairman and ranking member indicated in large part because of the work the committee had done to support the FY26 NDAA the acquisition reform initiatives and the multi-year procurement authorities we've been able to act on quickly. I appreciate your focus on this critical component of our national The global security environment is increasingly complex and volatile. A robust, resilient, and modern defense industrial base is not a luxury.
▶ 0:23:47It is a strategic imperative. The defense industrial base will determine whether we can deter our adversaries and if necessary fight and win the wars of this generation and the next. Our goal is to win without fighting. An industrial base worthy of our men and women in uniform will be a critical enabler of that.
▶ 0:24:06While China increasingly grows its total share of global manufacturing and has developed up to 200 times our ship building capacity, more than 400,000 manufacturing jobs in the defense industrial base sit open here at home. Reviving the revitalizing the defense industrial base is a generational challenge and a priority in our 2026 national defense strategy.
▶ 0:24:30At the secretary's direction, we have put the acquisition system on a wartime footing with an urgent mandate to accept greater acquisition risk in order to reduce operational risk. Delivering an 80% solution on time to the battlefield is more valuable than delivering a perfect solution too late. Our plan to revitalize the DIB is captured in the first pillar of the secretary's acquisition transformation strategy centered on three primary initiatives for industry.
▶ 0:25:00First, we are sending a clear demand signal to industry. For too long, industry has navigated the uncertainty of fluctuating commitments and budgets. Thanks to this committee support in the FY26 NDAA, we are using multi-year procurement authority to provide stable, clear demand signal to industry to give them the confidence and stability to invest their own funds, leading to lower costs for the taxpayer and a more resilient and productive defense industrial base.
▶ 0:25:29Recent agreements exemplify this. Since the beginning of the year, we've announced framework agreements with Loheed Martin to more than triple PAC 3 MSE production and quadruple THAAD production and with RTX to expand and accelerate production of Tomahawk, AM RAM, and the standard missile series. Expanding munitions production comes with a crucial needs to do the same across their vast and complex supply chains.
▶ 0:25:56To support this, we've made a landmark $1 billion investment in L3 Harris to expand domest domestic capacity of solid rocket motor Second, we are making strategic investments to modernize the DIB. Since last January, the department has invested $23 billion in critical minerals, an increase of 273% over the previous four years. For example, we leveraged the Defense Production Act to secure domestic sources for gallium, scandium, and germanmanium.
▶ 0:26:26Third, we are reducing and removing the barriers that restrict and discourage businesses, especially new entrance and small businesses from pursuing business with the Pentagon by streamlining the FAR and DFARS, leveraging flexible contracting mechanisms and empowering pro portf acquisition executives and program managers to drive requirements trades and hopefully with the help of Congress deploy funding to the greatest point of need.
▶ 0:26:53We are seeking to create opportunities for those whose core competencies are creating and producing technology not doing business with the federal government. A strong industrial base also needs to be a secure one. The department is v vigilantly working to protect the DIB from adversarial capital and influence by screening in investment through cphas to prevent undue foreign dependency.
▶ 0:27:18I want to close by thanking the committee for their support last year in the one big beautiful bill and the critical authorities you provided in the FY26 NDAA. Thanks to the one big beautiful bill, the Department of War can make generational investments to expand munitions production and modernize facilities. We've designated approximately $6 billion for DPA and IBBAS initiatives targeting our most acute choke points in the supply chain.
▶ 0:27:45and we've allocated $300 million to shore up the national defense stockpile with materials like cobalt and lithium. Additionally, the changes you made to the IBASS program in the NDAA has given us greater flexibility to target our investments and we're grateful for the extension of the Defense Production Act, which allows us to continue making vital national security advance investments. The challenges we face are significant, but so are the opportunities.
▶ 0:28:13The department is on a wartime footing, moving with urgency to transform our acquisition system and revitalize our defense industrial base. We must succeed. Our national security depends on it. Thank you for the opportunity to testify and for your continued partnership. I look forward to taking your questions today.
▶ 0:28:32Thank you, Mr. Deputy. I recognize myself first for questions. uh this nation prevailed in World War II and the Cold War principally because of the overwhelming might of our industrial capacity. Uh the president's called for 1.5 trillion uh dollar defense topline from your perspective and mainly and that's to get after the defense industrial base. From your perspective as the department's senior acquisition official, how critical is this increased funding in achieving that objective?
▶ 0:29:04Thank you for the question, Mr. Chairman. Uh funding is absolutely critical. Uh my job I view as the defense acquisition executive is to ensure that we're getting the best value out of every dollar that the congress appropriates. Um but uh that doesn't mean that more money is not more is not more is not critical to enabling us to grow the defense industrial base the way we need. It's absolutely essential.
▶ 0:29:30Uh and I think that uh we've taken the time since the uh president's uh announcement to think through what would additional resources look like uh to ensure not only that we're building the joint force we need but that we're using to help uh uh build a defense industrial base uh that can support future generations as
▶ 0:29:51Thank you. uh how does the department determine when determine when equity investment's necessary and tell me how you deal with the possible market implications uh or distortion that could be caused by that.
▶ 0:30:04Sure. So I think we we view equity investment as an important tool amongst a range of tools that we can apply to uh build resilience and uh reduce fragility within the defense industrial base. uh we have all the traditional tools that Congress has allocated with uh grants, loans, uh thanks to the office of strategic capital. Um equity is another tool that I think we've deployed very effectively.
▶ 0:30:31Uh and I think it delivers a few uh critical kind of additional capabilities. Number one, it creates a partnership with industry, an opportunity to not only for the government to provide capital to lead to the kind of growth that we such as in the L3 deal, but it also crowds in additional private capital.
▶ 0:30:51Part of that deal was for L3 to put their own billions of dollars against what we saw as an uh a uh very high demand for growth within the solid rocket motor industrial base. and uh by making that investment uh and attracting the additional capital from L3 uh we were able to create multiples of leverage of that in of the government's investment.
▶ 0:31:14Secondly, I think by uh incentivizing or or by creating a circumstance where the the industry partner puts their own skin in the game, uh it it it creates better incentives for them to optimize their production capacity, which I think has been severely lacking in the defense industrial base. We haven't seen the kind of investment that we need in terms of modernizing manufacturing, developing the workforce.
▶ 0:31:40We believe an equity investment in some cases in many cases in partnership with additional private capital um creates that incentive uh for um better attention to how those dollars are deployed to expand the uh our industry partners capability. And finally, I think it's a good value for the taxpayer because a grant is a sunk cost. that's been the traditional way that we have stimulated growth with equity.
▶ 0:32:09Uh there there will be an exit and that that funding will return to uh the taxpayer to the government. Uh and so um uh you know that is inherently I think a positive for the taxpayer and the government in terms of stimulating growth while while seeing a return on that on that investment. We want to make sure that um you not only have the resources you need, but also that red tape and regulation are not undermining the development of the DIB.
▶ 0:32:36Have you identified any uh specific regulations that are inhibiting industry's ability to surge production capacity?
▶ 0:32:45Sir, I'd like to get back to you on that question. I think we're uh thus far we have been working through issues that I don't think require additional uh support given the flexibilities you've provided. I think we've gotten we've worked through I think some with some very direct and frequent conversations with industry kind of a culture shift towards a more commercial model whether it's equity investment or I think what you saw in the uh RTX and and Lockheed deals thanks to being able to create a demand signal through the multi-year
▶ 0:33:15procurements we were able to incentivize industry to invest their own capital to expand their production capacity which I think is really the optimal scenario and
▶ 0:33:23well what I'm looking for is any regulatory red tape that's a problem you So we can we can try to get rid of it for you.
▶ 0:33:29Yes, sir.
▶ 0:33:30Last question. In the last NDA, we established a new assistant secretary of defense for international armaments cooperation. You heard the ranking member reference to the fact that we've got to get our partners in production as well. Um how do you plan to utilize this position toward that end?
▶ 0:33:46Tremendous opportunity here and I thank the Congress for supporting the creation of that assistant secretary. Coincides with a couple other initiatives within the uh administration. Uh we recently the secretary recently transferred the defense security cooperation agency and the defense technology security administration under uh my jurisdiction within the office of the under secretary for acquisition and sustainment.
▶ 0:34:07I think that creates a great opportunity because as we're looking to fulfill foreign military sales orders or to create a more integrated industrial base in international uh with international partnerships um the point of execution and the capacity of our production are key inputs to being able to find what's in the art of the possible for us to be able to understand what is the pipeline of foreign military sales and the forecast for potential and use that as in our conversations with industry to drive up productivity I think is very powerful.
▶ 0:34:37tool that we look forward to
▶ 0:34:38Thank you. I rec recognize ranking
▶ 0:34:40Thank you.
▶ 0:34:42Thank you uh very much. We've talked about a lot of different um well we've talked broadly about the needs in terms of we need to produce more. There's a lot of different things that we're working on a lot of different systems. What would you identify as the top two or three priorities where we really need to dramatically increase the production of X?
▶ 0:35:06Well, I think uh we we we definitely have needs to increase the production across the board. As you said, I can tell you my focus has been since I got in the job in the summer on that munitions industrial base, ensuring that we're uh and I think the the the deals have been a great step forward in that.
▶ 0:35:24How many munitions are we talking about? So the the deals that we that we rolled out in uh January uh would increase the production of Patriot, for example, from 650 a year to 2,000 a year, tripling the production capacity. And I think you see similar kind of multiples across um the targeted munitions that we're that we prioritized. Um but we're not stopping at examining those. We're looking to partner with industry across other areas.
▶ 0:35:54And I think you know F-35 parts would be another example where we need to ensure that we've got adequate both resource funding and industrial-based capacity to make sure that we can supply uh the needed uh parts for the F35.
▶ 0:36:07I asked the question for the reason we're going to have to make choices in this. Um that's something we strugg struggle to do, but we can't we can't do everything. And I think as we move forward looking at the budget, this committee, the Pentagon, we're going to have to have a more serious conversation about what we can do and what we can't do. And towards that end, we need to look at some of the the the larger systems that we're talking about. I I have concerns about Golden Dome. Um but at least most of what's going into that is stuff we're going to need one way or the other.
▶ 0:36:37I mean, how that works out, I don't know. Um, but on the ship building side, I I just want to register my profound concerns about the $30 billion dollar battleship that we're talking about. Um, we have got to make choices. And it's not that I wouldn't love to have a $30 billion battleship. I'm sure that would be cool. Uh, but how does that affect our ability to buy all of these other critical munitions that we're using day in and day out? I I want to see from Congress.
▶ 0:37:05It's Congress as much as it is the executive branch. us make some choices instead of just starting down a thousand different roads and when half of them don't pan out, we've wound up wasting a whole bunch of money. Those types of choices are really going to need to be made. Last area of questions is on the procurement side. We've, as I mentioned in my opening statement, we have a lot of companies making investments in new technologies. We're doing a lot of R&D.
▶ 0:37:31One consistent complaint that we hear from them is, "Okay, we do the R&D, we get a product that you want, then it takes forever for you to buy it." Um, and that really discourages investment. I know we made some changes last year with the acquisition reform to try to get after this problem. What would you say is the key to enabling us to make those purchasing decisions more quickly so that investors can see a return? As I say, they don't mind if the answer is no.
▶ 0:37:57But if the answer is yes and they still don't get the money, that's going to push them away from making the investment. Even if they win, they lose. They can't do that.
▶ 0:38:06I appreciate your focus on this topic. I think um every dollar spent by private industry to advance technology or to scale production that the Pentagon or the or the uh federal government does not have to spend is a dollar earned for us towards national security. And I think we need to approach this explosion of private sector investment uh with that in mind that we we um number one of course the the primary purpose here is to ensure that we're acquiring capability that serves the war fighter.
▶ 0:38:34U I think that we've got tremendously innovative companies that are uh building those things. And so I think the second thing is we also want to make sure we don't squander this moment where we have this explosion of private investment to ensure that it's being leveraged to the benefit of the war fighter. I would say that um in my uh exploration and discussion of where the challenges are, I think that the acquisition transformation work of empowering the portfolio acquisition executives is a step in the right direction because what we need in the system is flexibility.
▶ 0:39:05And I think the old system where you had rigid structures of programs that were trying to meet uh rigid requirements gave no flexibility within the system to say oh this is a great technology that we should figure out how to re uh configure our requirements or reallocate our resources so we don't have to wait for the entire two-year cycle to have the authority in the budgeting to do that.
▶ 0:39:27Let me just end on that note of agreement. um programs of record requirements. Those are the things we really got to slash and go after if we're going to be able to innovate more quickly. Thank you, Mr. Chairman.
▶ 0:39:37Thank you,
▶ 0:39:38gentlemen. South Carolina, Mr. Wilson is
▶ 0:39:41Thank you very much, Chairman Mike Rogers. And uh indeed, uh Mr. Secretary, uh, what you're doing is so important to peace through strength and so I want your front line and so we appreciate your efforts and of course where we are today our sympathy for Americans who have been killed by Iran and Iran has been at war against the American people for 47 years killing and wounding thousands of Americans.
▶ 0:40:06Every envoy Steve Witkov has uh exposed just this week that in negotiations last week that the Iranian uh negotiators boasted that they can produce 12 nuclear bombs. With that in mind, this is so uh as existential for America, Israel, and our allies. And President Trump is defeating this mass murderer who chant death to America uh by taking the actions particularly knowing how close they are and have been and are.
▶ 0:40:36With that in mind, War Colonel Putin has collaborated with Iran to develop UAV drones uh to murder Ukrainians. And now I was really pleased to see the United States has reverse engineered these drones to go after the Iranian re revolutionary guard which has been persecuting uh the people of uh Iran who want to be free. Uh with that in mind, I believe that Ukraine will be victorious and America will be victorious. And it's really personal to me.
▶ 0:41:05I'm grateful that I've had four sons uh serve and face the Iranian IEDs and drones. Um my oldest son Allan was field artillery in Iraq. my uh cab. Uh my second son's a doctor in Navy who uh served in Baghdad. My third son served in Egypt to back up our great ally Egypt star and my youngest son an engineer uh for a year in Afghanistan.
▶ 0:41:29And so our family takes it very personally uh that indeed uh uh what President Trump is doing is protecting American families by defeating the terrorists overseas who have every intent of death to America, death to Israel. With that in mind, uh it's so important that we uh revitalize the defense industrial base through recruiting of uh skilled workers.
▶ 0:41:53With that in mind, Secretary Bridge Colby has testified that before the Senate Arms Service Committee that we need to supercharge our defense industrial base. How do you foresee and what actions have you taken to create the necessary skill force to meet defense needs? Should we be looking at foreign skilled workers to fill the gap as we expand our domestic Well, Congressman, thank you for your family service to the country. had a chance to meet Allen a few years back in the Pentagon.
▶ 0:42:24Um, and so, uh, that was a great pleasure and thank you, uh, for your leadership on these issues. I think, uh, absolutely you put your finger on on on a key issue. The workforce is, uh, a major impediment. Um, we have challenges in terms of, uh, maintaining competitiveness within, uh, with commercial industry and service industry.
▶ 0:42:45When it comes to compensation, of course, we have uh a more hazardous and and challenging work environment for our defense industrial because we're we're building things. Uh but I think uh the department has taken steps with up to 50 individual sometimes regional sometimes national programs that are focused on how do we start for example back in kindergarten encouraging K through2 students to take seriously the trades and and science and and
▶ 0:43:15and engineering uh disciplines all the way through uh how can we do uh trades training in partnership with local universities and and vocation schools to ensure that we can directly supply the needs of industry within local communities where we have workforce shortages
▶ 0:43:33and and indeed um working with great allies like the Republic of Korea uh the skilled workforce they have there um to work together will be so positive. Additionally, you've pointed out in your written testimony that 90% of materials identified in shortfall have either zero or only one domestic supplier. I'm very grateful that in Aken, South Carolina, we have a specialty glass fiber manufacturer, Agy.
▶ 0:43:58Uh it's a great company employing people creating jobs and it's so important that we have that capability. What are you doing to address the issues that we have of one or zero suppliers?
▶ 0:44:12That's a great question and a big challenge for us. Uh first of all, I think that uh I'll go back to the uh what I think were great sort of out of the gate exemplars of what we can do to stabilize the industrial base and that is those munitions deals that we rolled out in January because what they do is not only create stability for the prime contractors, it creates stability for the supply chain.
▶ 0:44:34And I think part of the reason you have such fragility in the supply chain, single source supplies, uh single single source suppliers is because of the u fluctuation of demand uh the uncertainty of will this contract go beyond the the next year by creating these u long-term contracts. We've required the uh uh the prime contractors to flow down that certainty of demand to all tiers of the supply chain.
▶ 0:45:00And we believe that will uh take make great strides in terms of um uh both creating ventures, new ventures so we can get competition but also in in creating stability so that existing ventures uh can make the investments they need to uh to ensure that we've got supply for the foreseeable future.
▶ 0:45:20Thank you very much. I yield back.
▶ 0:45:22Gentleman from Connecticut, Mr. Courtney's recognized.
▶ 0:45:25Thank you uh Mr. Chairman and thank you um Mr. Duffy for your testimony here today. Again, I think your sort of um inventory of different programs that the department is employing right now like the defense production act, the Apex Accelerator, um industrialbased analysis and sustainment, IBBAS uh program um again in my district uh where the Graten Shipyard is uh I mean all of those um agencies have really done a lot in terms of um you know stimulating uh more
▶ 0:45:55supply chain growth and um you know obviously um you know trying to get the production cadence where we all want it to be. uh but your testimony on page five where you you know again just said that probably the most important tool is multi-year procurement because and you just sort of ended your last uh testimony about on the fact that you know procurement instability you know has been just consistently identified um you know within industry as the biggest sort of reason why uh there's hesitation
▶ 0:46:25uh for people to invest and and get into the game that's there. And that's particularly true in ship building because it is a long game and also because the postcold war experience in industry is still felt you know in terms of just hesitation u that's out there right now.
▶ 0:46:43So pending before the department um you know speaking of multi-year procurement is the block six contract uh for the Virginia class submarine program as well as um multi-year for uh Colombia.
▶ 0:46:57uh this committee authorized those contracts in and um it's very late um in terms of uh executing uh the the contract uh and it's something that uh people and again I interact with them a lot um watch like a hawk in terms of so again unlike battleships which you know last one was launched in 1944 there's no question about uh submarines uh in the 21st century that's
▶ 0:47:27there. There was complete bipartisan consensus by and large on that point. Uh and we've authorized it. There's been negotiated. Um you know, can you just enlighten us about when is this going to get done because frankly that would turbocharge um you know, really the next decade of of growth in that industrial base.
▶ 0:47:48Yes, sir. a question about the uh criticality of uh the um our submarines and uh their strategic value to the joint force. Uh I'm aware that uh we are very close uh and I'm also aware of the urgency to get that done. So we're working in partnership with the Navy to continue to drive that to conclusion. Uh I I I u will I'm sure you're already aware but we'll work to keep you aware to when we think that will conclude.
▶ 0:48:18But um I I know we're actively working towards that.
▶ 0:48:21Thank you. And you know again in terms of um you know other interested parties in this um you know the president in October said full speed ahead on AUS. Um Australia has come forward and invested $2 billion uh in the US Treasury to help with our industrial base. that block six cohort of submarines is precisely the the subs that really would be sort of in line in 2032, 2035 and 2038 uh perus that's there.
▶ 0:48:51So um as I said this this is really something that is a u the next decade at least and um and I know some of my friends on the other side um agree 100%. Mr. Uh, chairman, there's an article in the Wall Street Journal again about the this submarine contract, which again I would ask be added to the record
▶ 0:49:10without objection.
▶ 0:49:11Um, thank you. Um so um you know I was struck listening to your testimony about multi-year procurement because your predecessor uh William Lelant uh issued a 26-page roughly document that again procurement instability was identified by the department back then as probably the biggest hindrance in terms of um industrialbased uh expansion and uh again some of the DPA stuff started in the FY24 NDAA um
▶ 0:49:42and where we actually added Australia and the UK as domestic sources uh to help with the industrial base uh that's there. So I mean there's some continuity here in a good way that um you know it clearly you get it and um and obviously there's a lot of support on this committee to to see that happen but um again block six it's it's time it's more it's overtime in terms of getting that done with that I yield back. Gentleman yields back. Chair and I recognize gentleman from Virginia, Mr.
▶ 0:50:13Thank you, Mr. Chairman, Mr. Secretary. Thanks so much for joining us. I I want to go to um the second part of your title, sustainment. We talked a lot about acquisition. Sustainment, though, is really the backbone of what we need to do to generate fighting force I think you would agree that using uh multi-dead long uh efforts are what we need to do to overcome the current sustainment crisis. And that's where we are.
▶ 0:50:36When you look at the F-35, ASubo, operational availability below 50%, you look at Amphibs, ASubo, 38%. We can spend a whole lot of money on new systems, but if you don't take care of the systems we've got, guess what? We don't have the tools necessary to fight the fight, and that's what our war fighters need. Last year, in your report to Congress, I want to uh give your words back to you. You said the department faces significant and systemic readiness challenges across its major weapon systems portfolio.
▶ 0:51:06And you also said these challenges are impacting operational effectiveness and strategic deterrence. All things that in today's world are priorities. This problem is urgent. I think there are things that we have to do. There are long-term aspects of that, but also short-term aspects. I wanted to uh get your perspective. We did some things last year. We we move program support managers essentially to program manager status to be able to put a little more effectiveness into these programs.
▶ 0:51:35Give me your perspective really on on two things. How are you going to prioritize on and m budgeting this year as far as the president's budget things that come to us? And how are we going to be able to leverage modern technologies, things like artificial intelligence, digital twin technologies, uh um additive manufacturing, especially when it comes to systems that we have to maintain, but we struggle with right to repair, we struggle with intellectual property to be able to actually do the things that we need to do because we get wrapped up over,
▶ 0:52:06you know, what the limitations are and how those systems were acquired. If you can give us that perspective. Well, thank you for your attention on this important matter. I I agree with you. The criticality of sustainment is probably undervalued. Uh 70% of the cost of a average 70% of the cost of a weapon systems um uh total cost is in the sustainment of the weapon an operational weapon system.
▶ 0:52:30Um and so I do think we need to think about uh ensuring that we're budgeting to that and I think in the past that hasn't been the case. I do think you have good attention on that. Now, we have uh regular engagement on looking at the F-35 and ensuring that we've got adequate both funding and strategy, contract strategy, acquisition of parts strategy, uh defense industrialbased examination where there's vulnerabilities. Um and so I think this is again an area where it requires leadership attention.
▶ 0:53:00I think the system is incentivized to think about procurement as uh acquiring new technology as um you know keeping advantage and and uh the the sustainment can be neglected. We need to shift that
▶ 0:53:14How do you think broadening the use of modular open systems approach uh would help us in the process being more iterative and that is being able to update things and how do you see software as being the foundation of what happens with hardware of systems? You know, today in today's world, we see what's happening uh both in Iran and in Ukraine. Uh we live in a software-driven world. You build the hardware around the software. So, give us your your thoughts on MOSA and how that is used.
▶ 0:53:42And are there better ways for us to use iterative updates to make sure that when we're looking at sustainment, we do it rather than through uh keep changing the hardware is through continuous software
▶ 0:53:54Well, that's a great and powerful I think initiative. uh appreciate your leadership on it and uh you know the acquisition transformation strategy called it out explicitly modular open systems architecture and I think we actually have a a really great use case that precedes the acquisition transformation the great work General Dale White did down the F-47 to build MOSA as a primary strategy in the design of that weapon system which allows us to interchange mission systems throughout the life cycle of the program that's powerful in my mind because that
▶ 0:54:24creates the ability to compete below the platform level throughout the entire life cycle of the weapon. And that that competition, I think, is healthy in terms of making sure that we're not neglecting the industrial base. We're not neglecting advanced capability with those mission systems within the platform. Uh and so I think uh you know, we are really working to drive that example from F-47 into other uh systems.
▶ 0:54:49I was just out at Edwards Air Force Base a couple weeks ago and they were talking about the F-22 as being how are we thinking about MOSA even a legacy platform like that which I think is tremendous in terms of software um the more the capability of our systems is embedded in the software the more flexible we are to sustain over to sustain over life I think that 47 is another example of that a lot of the hardware in the system uh I think can endure while we're upgrading software and making a difference in the capability of the platform Thank you, Mr. Chairman.
▶ 0:55:19I yield back.
▶ 0:55:21Thank the gentleman chair and I recognizes Mr. Norcross.
▶ 0:55:24Thank you, chairman. And uh want to go back to one of the first statements you made. You mentioned 400,000 open jobs industrial base. That's a scary number given what we're facing and what we've done in last years, quite frankly in the last few NDAAS to take care of the acquisition There are a lot of things that connect many of our contractors who
▶ 0:55:54build our greatest platforms, whether it's the F-35, what will be the 47, our ships, have a common theme, which happens to be the longest lead item on the sheets, the human side of the the skilled people, whether engineering or those who build it. It's the longest lead item. And you touched base on a couple innovative programs. uh the mere program that starts at a younger age.
▶ 0:56:22In many ways, we're fighting for that next generation of worker who unfortunately have come through a pandemic and learned they can do a lot of that from home. Well, you can't build ships. You can't build planes. You can't build the next generation from home. Uh over the last few years, the Department of Defense spent $6.2 billion dollars working to attract that next generation into our armed services.
▶ 0:56:53That's great. There's many ways to serve your country. And the suggestion would be to incorporate one way to serve your country is go to work for the defense industrial base. We're fighting not only for that individual, but more importantly, you're fighting for their parents who is instilling in their next generation. Many of you got to go to college whether you want to or not.
▶ 0:57:20Now, it's starting to change a little bit, but we have to put the value the ones that go to work each and every day might put a pair of work boots on and gloves to build it. So, how do we attract on a national basis that we need you to help our country and you can do it more than or if you want to putting in a uniform one. How do you get to the nation as a whole?
▶ 0:57:49Well, thank you for your leadership on this issue. I think the very uh uh an initiative that I think there was a recognition in the leadership of the Pentagon on this problem last fall and uh you may have seen coverage in the last two months that the secretary himself has gone out to visit the industrial base and companies both traditional and to speak to the workforce and to thank them for the work they're doing to stand behind the war fighter and build the capability that he or she needs in order to make
▶ 0:58:19sure that we can prevail in any that's been very well received across the board. Uh but I think uh more uh we also need to make the investments and make the targeted investments that not just are doing the training because we do need to do the training but I think you're hitting on how do we change the cultural attitude towards these jobs to say that this is rewarding work.
▶ 0:58:42This is missionoriented and um and and we're doing a lot of thinking and and and developing of programs within the department that can partner with uh civilian institutions and and um uh to to to help create a uh greater appeal to that workforce because I think we need to work on training, we need to work on compensation, but we also need to work on an understanding and the importance of the mission
▶ 0:59:10just as we are trying to attract that next generation to join the services. We need a national program. You're already spending 6.2 billion. We have the ability. We need a program to win the hearts and minds of that next generation because quite frankly, it's not happening except in a few locations where we've targeted. We need to do it on a national basis. With that, I yield
▶ 0:59:36Gentleman yields back here. And I recognize gentleman from Tennessee, Mr. Dejar Lee. I thank the chairman, Mr. Duffy. Uh, first I want to express my support for the department's announcement uh that the Sentinel program will seek milestone B approval this year. This program is vital for the future of our deterrent and I appreciate the work your team is doing with General White to move the program forward. And I also uh appreciate the push you're making to increase the production of critical munitions.
▶ 1:00:05Uh can you talk to us about how your office is making sure that the focus on those critical munitions which are mostly tactical systems doesn't come at the expense of some of our strategic systems like the next generation interceptor sentinel and even space launch as we saw recently with Vulcan?
▶ 1:00:23That's a great question. You know one of the things that uh we also uh highlighted in the acquisition transformation strategy was what we call a direct to supplier strategy. So I think you're putting your finger on the fact that there's a common set of components in not just across the tactical systems but the strategic systems like solid rocket motors and then going a level down into what are the ingredients that build a solid rocket motor. How can we ensure that the nation has an ample supply to support growth across all of these systems?
▶ 1:00:54And so we're employing this direct to direct to supplier strategy so that we can uh engage for example the L3 deal is an example of how where we have a crosscutting supplier that um has uh uh supplying multiple systems that we're thinking not just about the prime level but about what is the adequacy of supply at the subtier level and where we need to as a department in partnership with industry engaging those suppliers
▶ 1:01:24directly.
▶ 1:01:26You kind of stole my second question there because I was going to say now that the department has made an investment to support the incumbent solid rocker rocket motor industrial uh industrial base, you know, what specific plans does your office have to support development and qualification of second sources for solid rocket motors for those same critical munitions. So, you kind of answered it, but maybe you can
▶ 1:01:48Sure. So I think the we understand the Congress's views and agree with the fact that there's a need for second sourcing. That's just uh a principle upon which we're building the entire defense industrial base revitalization effort is ensuring we've got competition.
▶ 1:02:03uh the the L3 deal was driven by the fact that we need supply now and oftentimes unfortunately between qualification certification building a workforce building a uh supply chain you know uh we we want and will continue to pursue second sources uh but we also want to make sure we get speed and volume and growth and the L3 deal gave us that while we continue to pursue second sources in solid rocket motor industry.
▶ 1:02:28Okay. Uh, finally, uh, we've been trying to have a conversation with your office about the next generation operational control system or OCX. Uh, so far we haven't had much luck. Uh, can you help me get that on the books?
▶ 1:02:43Yes, sir. I'd be glad to.
▶ 1:02:45Okay. Thank you. I yield back.
▶ 1:02:48General from California, Mr. Gar's recognized.
▶ 1:02:54Thank you, Mr. Chairman, and ranking member and my colleagues. Uh, Secretary Duffy, I appreciate you being here. You got a large portfolio and a lot of work to do. I'm curious, we're at war, so maybe the Department of War name is uh in the preparation for this war, was there an analysis done on the rate
▶ 1:03:24of use of munitions of all kinds? uh and if so, given the current conduct of the war, which is by the president's most recent, it's going to ramp up. So, how are we doing on munitions?
▶ 1:03:50First, all of them from defensive, air defense, as well as offense. And after you've told me how we're doing, did anybody think about this before we started the war?
▶ 1:04:08I have great confidence in the professional military judgment of General Kaine and he stated this morning very clearly that we have adequate munitions to support future operations now and in the future. My focus has been since I got in this job to think about how to accommodate for the lack of defense industrial base this administration inherited. And we have pursued that aggressively since June.
▶ 1:04:30And most of the questions that have been asked thus far deal with the ramp up of of the defense industrial base across its entirety uh and the sustainment of that through the next I decades. But my question goes to here now.
▶ 1:04:47Are you telling me that the munitions necessary to carry on the war as described by the president are and that the magazines are filled and the war was determined and set in pace with full understanding of the rate of use of the munitions.
▶ 1:05:15So tell me that tomorrow morning I'm not going to wake up to some news report that we don't have uh sufficient patriots or thads.
▶ 1:05:27Sir, General Kaine is uh running.
▶ 1:05:32It's his problem. Is that it?
▶ 1:05:33No, it's not his No, it's not his problem. It's his judgment. And he expressed that very clearly this morning. Then why did I be wake up this morning to report that we don't have sufficient Patriot missiles and uh THAAD to protect our assets in that region?
▶ 1:05:57I'm not sure what source you got that from, but uh again, I I I trust the judgment and statement and clear determination of General Kaine this morning. He's running he's running the operation. I think he has the clearest sense both of the planning and the execution of that mission.
▶ 1:06:15Well, it's the third time you answered my question the same way. So, I think I better move on to another question and get a different answer. you are making you the department's making significant equity investments in uh to ramp up their capability in manufacture. Not a new concept. has been around I think forever.
▶ 1:06:40Uh how are you monitoring the use of that investment and ultimately what will you will the department be doing with the equity that it has acquired as a result of those
▶ 1:06:59Excellent question. And I think first of all uh each of these deals comes with clear milestones on what we expect the industry partner to make of their own investment. That was part of the deal was as we make an investment they make a counter investment multiples of ours and then we have established milestones of when those investments will be made so that we can ensure that investment is stimulating the growth that is required in the in the reason we entered the investment in the first place.
▶ 1:07:26um during the course of of the investment um it is we we are we are looking this as an economic stake in the in the company. We are not pursuing control uh we are actively trying to bifurcate
▶ 1:07:39excuse me I'm just about out of time uh this entire area of investment and where the money goes how it's being used and ultimately what uh the department of defense will do with its equity investment is of interest to me. I would appreciate a specific um readout on how you're monitoring it and ultimately what you intended what the department intends to do with the equity investment. Um Mr. Chairman, I thank you very much for the time.
▶ 1:08:08Gentlemen, time's expired. Gentleman from Florida, Mr. Jimenez is recognized.
▶ 1:08:12Thank you, Mr. Chairman. And um and I heard uh I heard General general um um Kaine this morning and he was very um confident in the munitions that were there and he was also very confident and also stated that u um a lot of the defensive munitions were actually pre-staged to make sure that we protect our servicemen and women.
▶ 1:08:33So I'm also confident in um in his capability and his assessment and so uh I'm good with that and I don't care how many times you ask the same the questions it's just the answer. Okay. Um, have we ever done any any uh analysis of um the difference uh in cost u say for the same system for the Chinese and the and and us and I would assume that it costs us more
▶ 1:09:04to acquire the same system than it does the Chinese because of labor costs and all that. Am I am I off on that or am I So I haven't done the specific analysis but I can speak to the principles of why I think that your statement is correct. I mean one um they employ a command and control u government with civil mil military fusion where they compel their entire um uh economic enterprise to support on an as needed basis.
▶ 1:09:33And so uh those are those are tools we don't we don't want to apply. uh and and state subsidization I think is another uh tool that they apply.
▶ 1:09:44So So could I I hate to interrupt you but I only have a certain amount of time. So have you have you do you have a roundabout figure for like for every dollar that they spend is equivalent to how many dollars that we spend.
▶ 1:09:59Sir I do know that figure I think I believe I've seen that figure. I do not have that figure. uh but I think it's an important one to understand what is the purchasing power that they have versus we have for each
▶ 1:10:09so they spend $300 billion what's the equivalent that of American dollars is that is that trillion dollars America are they they spending basically the same we are
▶ 1:10:19I hesitate to wager a guess on it but I think that it's probably a multiple yeah
▶ 1:10:25good I'd like to have that figure so that we we know exactly because when they when they say they're spending $380 billion or whatever equivalent U and say, "Well, gee, we're spending a trillion dollars, but it could be that $380 billion that they're spending is equal to our trillion dollars." Okay. Um the only way that I think that we're going to bring this back, balance this out, is through automation.
▶ 1:10:49Uh so are we making investments in uh artificial intelligence and robotics so that we can manufacture at a much cheaper cost and a much more rapid pace? Are we doing that uh and are we leading that charge?
▶ 1:11:07I agree with you 100%. Not only uh to manage cost but uh as uh Congressman Norcross mentioned our deficiency in skill. As much as I'd like to make sure that we have the workforce by by enhancing our workforce, uh we may also need to think about how do we decrease the demand for the workforce if we can't fill it by pursuing automation and and uh without without u um you know inhibiting our our great uh workforce that uh makes sacrifice
▶ 1:11:38every day to build weapons for the war fighter. But yes, uh we're pursuing added manufacturing. We're pursuing automation and robotics. for pursuing the application of artificial intelligence. But I think the great news is we're seeing a lot of that invested independently of the department by private sector investors who are seeing these problems and bringing solutions to us which is the model we want to see across the defense industrial base. So leveraging that I think will ma allow us to maintain our advantage in that strategic competition.
▶ 1:12:06What what are you doing in in order to uh speed up the development and the deployment of weapon systems? I mean, some weapon systems take decades to to develop and then deploy. And in today's battle battlefield, I don't think that's sufficient. I mean, we're going to have to we're going to have to adapt a heck of a lot faster. And as we learn on the battlefield that this is this system works, that system doesn't work. By the way, what's your counter measure? How are we going to counter their countermeasure? What are you doing in order to speed up that process?
▶ 1:12:35Well, that's uh I would say the acquisition transformation strategy and and the leadership of the committee on driving the speed act into the NDAA covers a whole range of initiatives that we're pursuing, but I'll highlight a couple. number one in the near term. Under the deputy secretary's leadership, we've created a program called the Business Operatives for National Defense. We've been able to attract talent of retired executives across commercial industry who bring tremendously valuable transferable skills.
▶ 1:13:05uh for example you know automotive manufacturing leaders of automotive manufacturing global manufacturing operations coming into the department and our defense industrialbased partners to examine do are we up to scale up to speed on the latest most modern ways to manufacture so we can introduce automation and additive manufacturing um this is a near-term opportunity that I think we're really getting some gains on in the ship building industry and the munitions industry uh but there's a whole other range I think the I'll
▶ 1:13:36just touch on one more because I know we're short on time, but the ability to um I think convert to a commercial model both from a commercial first standpoint where we can pursue where the commercial industry is better uh incentivized to have efficient means of production and bring that into the defense industrial base and then also bringing that commercial model through the thanks to the committee the multi-year procurement and enabling and empowering the industry to make their own investment.
▶ 1:14:05put their skin in the game and really own the efficiency of production, I think will get us great
▶ 1:14:11Thank you, Mr. Chairman. I yield back. Gentleman from Pennsylvania, Mr. Duzio, is recognized.
▶ 1:14:16Thank you, Mr. Chairman. Uh, Under Secretary Duffy, do you have the dollar value of munitions we've expended so far in this war with Iran?
▶ 1:14:23I do not have that dollar value.
▶ 1:14:24When do you expect you'll have that? I understand each day it's rising, but what timeline do you expect to know
▶ 1:14:31Uh, I I don't know. I I I believe that the you know the the folks that are expanding the munitions have the best best calculus of that. I don't know when that is available.
▶ 1:14:43Presumably for folks watching at home there is coordination with your side on the acquisition for replenishment replacement. Um so is there communication across the department so that you know the needs for the branches here? the, you know, we've been working this problem set on munitions supply long before this conflict.
▶ 1:15:02And uh while it's certainly uh useful for uh folks within the within the department to know what that level is, my job is to maximize our production independent of our supply. And I think knowledge of our supply uh wouldn't make me go faster. We're going as fast as we possibly can. Are you part of analysis or discussions about the speed at which we can replenish what is being expended right now
▶ 1:15:27every day?
▶ 1:15:28I'm not going to ask about the burn rate given our open setting here. I think we need to understand in a more classified setting what that burn rate is. But is that analysis being done? Has it been
▶ 1:15:39Well, I I'll I'll So we are driven by maximizing production capacity of our defense industrial base independent of expenditure rate. We were we were focused on maximizing our production rate a week ago, 6 months ago.
▶ 1:15:54And so um that is the crux of our conversation to say how could we maximize the defense industrial base's ability to produce a full range of weapons and what are the tools we need to put in place to empower them to do I'll ask a very specific question and I understand your part of this is the acquisition but is there analysis being done at about the pace of our ability to replenish what's being expended. I don't want the details in this setting. I'm asking if that analysis is being done.
▶ 1:16:23Yeah. I you know I know what I focus on every day which is how do I get the accelerator to the floor on our defense industrial bas's ability to produce these and acquire them. And that's uh you know that's what's driving the conversation right now is how do we get the growth that we need out of the defense industrial base to ensure that we're prepared for the fight of the
▶ 1:16:46So I want to ask about the 3F15E variants as I understand we lost 90 $100 million price tag. Is that generally about right for each of those?
▶ 1:16:55I don't know offh hand but that sounds approximately correct.
▶ 1:16:58Not a trap. I'm just curious. Um assuming F-15EX is the variant that we would replace those. What kind of timeline production timeline do we have to produce new aircraft there?
▶ 1:17:12I think that we're producing at about a rate of 20 a year. I I'd have to come back to you to get that precisely, but that is approximately the rate at which we're purchasing those right now.
▶ 1:17:22So I want to build off Mr. Himenez's question. And by the way, that figure that he asked for, I'd also like to know that figure. here. I think it's important for us in the committee to understand it. How fast are the Chinese building their top strike fighter
▶ 1:17:36I I do not know the answer to that question. I'd be happy to get it for you. Uh it is an important factor
▶ 1:17:41and and look, I they're different platforms. We have different capabilities. I don't I'm not saying they're the same, but if they're cranking out 10 for every one we're cranking out, that matters. That's something we need to understand in this
▶ 1:17:51I agree.
▶ 1:17:52Okay. Thank you. Um last last piece of time I have uh you mentioned it on pushing the defense industrial base as fast as possible on munitions and that certainly predates this war and our concerns in this The IND industrial base has gone it's been too slow. It's heavily consolidated. I think there's bipartisan concern here.
▶ 1:18:16What more authorities or tools do you need from us to get our defense industrial base doing what they need to do for our military?
▶ 1:18:23Well, I appreciate the question. I think the way I'd answer it is we have uh since the secretary's uh speech in November and the passage of the NDAA um I've got a team of hundreds of folks within the department across the military departments and within my office who are uh aggressively pushing forward to implement as many of these initiatives as we can.
▶ 1:18:47My expectation is as we get to a place where we're um encountering obstacles that we have not yet encountered, we're sort of keeping notes on that so we can come back to the committee and say this additional authority would be helpful. I don't have that today, but we are keep
▶ 1:19:02understood. And look, I'll make the point that I think Mr. Jimenez's ratio gets to if we're spending five, six, seven, whatever the number of times as much, that's not delivering the kind of value to the American people that we need. And so that is a big part of this concern certainly where I sit. And with that, Mr. Chairman, I'll yield back.
▶ 1:19:20Gentleman yields back. Chair not recognized. Gentleman from Louisiana, Mr. Higgins.
▶ 1:19:26Thank you, Mr. Chairman. Under Secretary Duffy, thank you for being here today. the authorities that you enjoy um from the executive branch are are then and Congress has empowered you as such and we've authorized and funded a tremendous amount of reform
▶ 1:19:57uh regarding uh purchasing acquisition an actual fabrication of of our war fighting machines, the mechanisms of war that our war fighters require and that indeed world peace requires in because we have a responsibility to project force across the world in areas of the world that are threatened by wars and
▶ 1:20:27whereby we can quell existing threats. or extinguish active threat. So we have a hell of a responsibility as a nation and we believe as a Congress, as a Republican majority Congress, we believe we have empowered you and I don't think there's any new legal authority or legislative
▶ 1:20:58and and I I hope hope you have hope you have your foot on the gas regarding procurement contract and streamline and and actually getting the mechanisms of war manufactured under 10 US code 4811.
▶ 1:21:16The Secretary of Defense is required to develop a national security strategy for the national technology and industrial base based on prioritized assessment of risk and challenges to the defense supply chain.
▶ 1:21:32And under the defense production act of 1950 which was reauthorized in 2018 the president has the authority a number of authorities to influence domestic industry in the interest of national defense. So so there's a broad spectrum of authorities that you enjoy.
▶ 1:21:53Now, the maritime industrial base, which I'm going to focus on here and ask you a question about the maritime industrial good sir, does not fail because of lack of capability. These guys have been performing for 200 years, man. Some of their their c their companies go back three or four generations. They they fail or or risk failure because of instability.
▶ 1:22:19Most of that instability is a result of the kind of things we're asking you and your people to fix. So in South Louisiana, this is true, but across the country is true as well. Small and midsize shipyards, they can hire and train and invest, but they cannot survive repeated stop and start cycles caused by continuing resolutions out of this body, delayed awards, shifting procurement profiles, etc.
▶ 1:22:47Because when production breaks down, when it stops, those smaller maritime industries and shipyards, they lose their their skilled workers. The suppliers shut down and and ultimately costs go up. So, it breaks everything down.
▶ 1:23:04So, I'm going to ask you, beyond multi-year procurement for major munitions programs, what concrete reforms is the department implementing to prevent production gaps in smaller You know, I struggle to find another tool that is effect is as effective as the multi-year procurement because in our conversations with industry and I'll just munitions happens to be the use case that we got after immediately as soon as I was confirmed uh in
▶ 1:23:35uh from the top down, president, secretary, the deputy secretary um all committed to growing the industrial base for munitions. and we brought industry together and we said tell us the barriers to your stability, your resilience, your speed. Um, and we did get a lot of regulatory
▶ 1:23:54not to interrupt, but as it relates to ship building and you stated you don't see it's it's difficult to see another tool that's more effective than than contracts. I I concur. That's a significant factor.
▶ 1:24:09Would would you and your staff be receptive to my office uh communicating with you, good sir, regarding some other mechanisms that we believe based upon our conversations with the industry would effectively work and that you have the legal authority to implement. Would you receive that?
▶ 1:24:26Very welcome that. Yes,
▶ 1:24:27my man's in the room. So,
▶ 1:24:29excellent. Thank you.
▶ 1:24:29He going to find your man. Thank you, Mr. Chairman. I yield.
▶ 1:24:32Thank you.
▶ 1:24:32Gentleman yields back. Chairman, I recognize gentle lady from California, Miss Jacobs.
▶ 1:24:36Thank you, Mr. Chairman. Uh Mr. Duffy, this hearing is about revitalizing the defense industrial base, getting innovative American companies to build for the war fighter faster, right?
▶ 1:24:46That's correct.
▶ 1:24:47So, I I want to understand how blacklisting one of the most capable American AI companies advances that goal. Last July, Anthropic signed a $200 million contract with the Pentagon and became the first frontier AI company to deploy on classified military networks. And by all accounts, war fighters love it. Gregory Allen at CSIS said publicly that DoD users love Claude and that its usage restrictions have never been triggered on a single government mission. The contract included two restrictions.
▶ 1:25:15One, that Claude could not be used for mass domestic surveillance of Americans and two that Claude could not be used in fully autonomous weapons. The Trump administration reviewed those terms and in July 2025 accepted them. Then Secretary Hexath demanded that Enthropic drop those provisions entirely.
▶ 1:25:34Anthropic refused and on February 27th, the president ordered all agencies to stop using Anthropic and Secretary Hezek designated the company a supply chain risk, a tool Congress designed to protect against foreign adversaries who might sabotage or subvert defense systems. Mr.
▶ 1:25:50Duffy as the under secretary responsible for acquisition sustainment and the health of the defense supply chain 10 USC 3252 is an acquisition statute def is your responsibility and industrial-based policy is your portfolio were you consulted before this designation was
▶ 1:26:07I was
▶ 1:26:08okay and what was your recommendation
▶ 1:26:12well I think uh you know the beauty of the innovative economy that we have is we have comp competition and since this We've seen competitive AI companies come to the table that are not willing to make demands on the department's use of the service they provide, which is critical for our ability to have the flexibility to employ the services and technologies in defense of the nation and the war fighter.
▶ 1:26:36So, um, Mr. Duffy, I hear you except that almost every contract we have comes with these kinds of stipulations. So for instance, defense contacts contracts routinely contain privately imposed operational restrictions. Starlink restricts which countries can use its terminals. For instance, fighter jets come with certification limits. IP clauses let contractors prevent resell of their technology. Contractual limitations on military use of technology are not unusual. They are the norm in defense procurement.
▶ 1:27:06And if the department objected to anthropics terms, it had straightforward options. Cancel the contract, issue new def guidance. um write a clause requiring subcontractors to wave such terms within a set period. Did your office evaluate any of those less restrictive alternatives before the designation was announced?
▶ 1:27:24The nature of artificial intelligence introduces specific and very great vulnerabilities and the need for continued updates from the company introduces those vulnerabilities such that if we cannot have a trusted relationship with the vendor that's continually providing those services, they introduce unnecessary risk into our acquisition process. And the president and the secretary declared that very clearly.
▶ 1:27:48Mr. Duffy, the citing uh making a a company considered a supply chain risk was literally something Congress designated for things like Huawei and Kasperski, not American companies that you just might have a disagreement with. Um here's the part that concern should concern all of us.
▶ 1:28:08Hours after Anthropic was blacklisted, OpenAI announced it had secured a classified Pentagon deal with the same two red lines, no mass surveillance, and no autonomous weapons, OpenAI CEO admitted the deal looked opportunistic and sloppy and has since renegotiated it twice and even OpenAI publicly said anthropic should not be designated a supply chain risk.
▶ 1:28:28So, can you explain to this committee how the Pentagon blacklisted one American company for insisting on restrictions and then accepted from a competitor the exact same restrictions that same evening?
▶ 1:28:39OpenAI's opinion on the department's determination is interesting but not relevant. We've made a judgment based on our engagement with the company over time and their clear lack of willingness to provide the flexibility that we require in order to acquire into in order to employ these very sensitive capabilities in defense of our war fighter. We will not be held hostage to the whims of a of a company's policy when it comes to life and death of our war fighters.
▶ 1:29:04Mr. Duffy, I think every American probably agrees that we do not want the Department of Defense doing mass surveillance of Americans, nor would we want weapons that can that can go off by themselves without humans in control, which is why we've passed such stipulations in previous NDAs. And with respect, if two vendors offer functionally identical terms and one gets a contract while the other gets treated like Huawei, that's not a procurement decision. That's retaliation.
▶ 1:29:29And retaliation through acquisition authorities is the exact kind of abuse Congress should be concerned about and that we should work to prevent. I yield back, Mr. Chair.
▶ 1:29:37Gentle lady yields back. Chair now recognize gentleman from Indiana, Mr.
▶ 1:29:42Thank you, Mr. Chairman, and thank you, Secretary Under Secretary Duffy. I appreciate you being here today. And first, I'd like to thank you and your staff's engagement with me on the Prometheus Energetics project located outside of Ukraine in my district. The Prometheus project is increasing the production rate of solid rocket motors and this need has made has been made crystal clear by the military actions being undertaken in the Middle East.
▶ 1:30:05I look forward to continuing work with you and your staff on on supporting this project and guaranteeing the prime the timeline for Prome Prometheus to start production in 2027. On the topic of munitions, the defense industrial base, how could the department better utilize authorities already granted the department like the IBF gun to combat single point failure in supply chain defense defense supply chains?
▶ 1:30:32I'm sorry, Congressman, could I ask you out Pete your question?
▶ 1:30:34How could how could programs like the industrial def defense industrial base fund be used to combat single point failures of supply chain?
▶ 1:30:43Yeah, thank you for the question. I mean this is fundamental. Unfortunately, the nature of a lot of our u uh our our our goods and services procured are bespoke for the defense department, meaning we're the only customer. And that I think discourages the kind of investment and resilience that we see in our commercial industrial base.
▶ 1:31:03the um the generosity of the committee in providing for the industrial base assessment and sustainment fund provides the tools that we need in order to ensure that we're investing where there's fragility in the industrial base. However, that's not our preference.
▶ 1:31:17I think our preference which you'll see both uh from the leadership of the committee in introducing acquisition transformation initiatives in the in in the NDAA and then the secretar's uh roll out is to prefer commercial because with a broader customer base I think you get the resilience of investment you get the um uh the resilience of multiple suppliers and that uh can only benefit the defense industrial base and our ability to procure u uh the equipment that we need.
▶ 1:31:45Okay. I would I'd also recommend looking at the IBF's new authority to procure install equipment owned by the federal government and private industrial factories if such action supports the defense interest of the United States and when the Pentagon is the only customer sometimes that's a pretty good
▶ 1:32:02Yes sir.
▶ 1:32:03Um is the color of money restriction still slowing down industrial scaling and what uh what more flexible uh funding categories material would materially improve that speed?
▶ 1:32:14Yes sir. Thank you for that question. We have spent I think the the department's been an advocate for greater flexibility in uh the allocation of funding since the PPBE commission uh back in uh 2023.
▶ 1:32:29We continue to embrace that as a and um I think that especially with this new acquisition construct and the pro portfolio acquisition executives where we're trying to empower those acquisition executives to have the team under their command to drive towards schedule and capability um as the uh as the single priority having the flexibility to trade requirements which I think we have the authority to do and we've introduced with the capability trade councils within
▶ 1:32:59the system so that they can prioritize schedule, but then also the flexibility to move funding. I mean, the the reality of our our current environment is commercial technology emerges at a pace that's much faster than our budget cycles. And if we don't have the flexibility to reallocate funding so that we can take advantage of that technology and pivot, uh, I think is really inhibits our ability to make sure we're maintaining pace with our
▶ 1:33:24Okay. Thank you. Uh would software acquisition be improved by allowing software to be funded by colorless
▶ 1:33:32So I know that we do have some flexibility. I'm not sure we're fully leveraging uh when it comes to the software acquisition pathway. The flexibility of funding. Is that what you're referring to, sir? Yeah, I think um you know those are I think those are purely for software programs which are very much appreciated and probably do require a level of flexibility beyond what hardware programs provide.
▶ 1:33:53uh but I do think that can be a model potentially for within understandable and and agreed upon restrictions how could we create some flexibility um across all
▶ 1:34:04Okay. Uh what percentage of critical minerals energetics still originate from from our adversaries or nonallied
▶ 1:34:14Sir, I'm not sure I've got the specific uh figures. I'm sure I can get back to you with that. Uh but it is a concerning amount. uh we have made strides in the last uh year to make investments um in a number of areas.
▶ 1:34:28Our team has got uh done tremendous work to assess uh across u uh several critical minerals and across the what we call the value stream of those critical minerals from mining to processing to magnets to ensure that we're bringing the domestic capability to do each step of that um and and increase our own self-reliance on those. absolutely important raw materials. Okay, thank you. I yield back. Thank
▶ 1:34:55chair. Now recognize gentle lady from Maryland, Miss Elth.
▶ 1:34:58Thank you, Mr. Chair. Mr. Secretary, um we've talked about munitions production being a priority. I appreciate that and the systemic but also the very urgent needs uh to meet those operational demands we have at this moment. The challenges of course and the opportunities lie both when the in the private industry, but also in domestic government facilities that produce energetics and munitions that are critical to war fighting.
▶ 1:35:18I'm thinking of Naval Surface Warfare Center Indian Head uh down the street in Maryland and its energetic comprehensive modernization plan that includes some much needed Milcon dollars for a new contained burn pit uh a new contained burn facility and a new larger mixer. Uh those are kind of the perfect in my view investments that we should be making to make sure we have private and government facilities meeting the moment here.
▶ 1:35:43Um and of course Indian Head is unique for its ability to provide kind of full spectrum RTD&E um to this challenge. Can you please speak to the part the department's plan to provide continued robust and sustainable funding to support the concentration of energetic production capacity at facilities like Indian Head, but there are others across the country. Uh and then I have a quick followup to that.
▶ 1:36:06Congresswoman, thank you. I I can't speak to specific Indian head initiatives, but I would be happy to in a followup if if that's helpful, but I can speak to I think what we see as a tremendous asset for the department in the organic industrial base and uh uh you know, we recently had an investment uh that Hanoa announced uh at Pineluff in Arkansas.
▶ 1:36:27I think being able to the government facilities that we have, the workforce that we have, the institutional knowledge they bring on handling energetics and other u capabilities that u u you know are challenging to get growth in the industrial base is really an opportunity and and we see investment from private sector to enhance these facilities.
▶ 1:36:54uh private sector brings in their expertise that um you know I think the organic industrial base can benefit from and so we're aggressively pursuing these partnerships because I think it's a win-win for for many uh for all parties if we can um find the right partnerships
▶ 1:37:12and I think the key to this is going to be a sustainable plan. So when we see these es and flows of demand that we're also having a sustainable supply side to this. And part of that is I would be remiss if I didn't mention the hundreds of thousands of of of federal civil servants in Maryland, many civilian DoD folks who work at Indian Head who are experts in their field in this and we can't lose that talent.
▶ 1:37:33I agree.
▶ 1:37:33Um from this space. Thank you. Um so I look forward to working with you if I could follow up with your team on on those investments. I want to follow up moving to similar issue of skilled workforce. Mr. Norcross's questions around a resilient industrial base includes and and really relies on thoughtful and strategic planning for producing welders, pipe fitters, other skilled trades as we you know I think have great bipartisan agreement and the need to invest in ship building.
▶ 1:37:58Um, when can we as a this committee expect a workforce development roadmap identifying projected labor gaps in ship building and other critical sectors and how your office plans on on addressing that and and similarly what you need from this committee to meet that.
▶ 1:38:15Well, thank you for your leadership on this issue. I will consult my team and come back to you with uh uh our work current work on that and and what we see in the future as terms of um requests or plans going forward.
▶ 1:38:29I think it's important because we have the best relationships with with our community college with our technical schools. We want to be helpful in building out again this sustainable pipeline of talent um to meet this moment. I was going to quickly move to uh some foreign dependency and some of our reliance on our our allies. I had the opportunity to visit our with our NATO allies in Sweden and Finland with Congressman Bergman last month meeting with large and small industry. Um I I'm very interested in your thoughts around co-production.
▶ 1:38:58We do a lot of things well in the United States. There are some exquisite capabilities. Our allies do better than we do. Can you give me your your thoughts around what are the opportunities to expand co-production and kind of further cement those allyships that are important not just to national security but frankly our
▶ 1:39:17I think co-production is an important tool. Um I do think uh we make the best weapons and uh the president has been very forwardleaning in terms of um exporting those weapons. Um, I recently inherited the foreign military sales mission within my office, which I think is a great initiative by the secretary to bring our production capacity to support our needs and uh our partners and allies needs together.
▶ 1:39:47Uh, but we we will probably also and and you mentioned, you know, in some cases there's exquisite capability that our allies uh deliver that we don't. And so I think it'll be important to kind of create an integrated industrial base to think through where we can leverage those to support our own operational readiness and and create interoperability with our partners.
▶ 1:40:08I'm out of time. I'd love to follow up with you on this and hear your plan to this committee. Thank you, Mr. Chair.
▶ 1:40:13Gentle yields. Gentleman from Virginia, Mr. Magcguire is recognized.
▶ 1:40:17Uh thank you, Mr. Chairman. Thank you, Mr. Secretary. Um and your team and all of our military folks here for all you're doing to support our war fighters. Uh we wouldn't have a country without our brave men and women and right now as a country. We need to be united in supporting them in their efforts and what they need to get the job done. I'm familiar with the recent investments the department has made in Solid Rocket Motors.
▶ 1:40:38However, what are your plans to expand capacity and resilience through both funding and diversification and new entrance to the Well, we're thankful that we have several performers that have emerged that um are privately funded that are interested in getting into the solid rocket motor space and uh so we're uh partnering with them to pursue uh at current state many of them are not yet qualified or certified uh which you know with the uh volatility of that component
▶ 1:41:08of the weapon system we need to make sure that we've got all of the quality assurance u done to uh bring that component into the uh into the supply chain and uh we are pursuing um opportunities with uh multiple vendors to to make sure we can help them get across that finish line.
▶ 1:41:27Mr. Secretary, ultra high molecular weight poly ethylene is foundational to the production of hard and soft armor across the joint force. We understand it is not a munition or a critical mineral, but it is certainly a strategic material that is it offers protection to every service member in harm's way both domestically and internationally with only two domestic manufacturers. How is the department addressing the vulnerability of this single point of failure in the supply chains for ballistic protection?
▶ 1:41:56Sir, if I could, I'd like to consult my team and get back to you with the specifics on that. uh um you know, we do have a a robust team of an analysts who understand this at depth and I'm sure that I can come back to you with that
▶ 1:42:09Yes, sir. All right, Secretary Duffy, I was excited to see in your testimony that you highlighted the accelerated training and defense manufacturing ATDM in Danville, Virginia. That's in my district. You also mentioned the department's enthusiasm in the Civil Reserve Manufacturing Network, CRMN. As the department works to bring the CRMN online, has the department considered was in which the program could be complemented with regional training centers such as ATM to ensure the availability of a skilled and ready
▶ 1:42:40I'm sorry, sir. Can I ask you to repeat the last part of your question there?
▶ 1:42:43Sure. So, as the department works to bring the CRMN online, has the department considered and which program could be complemented with regional training centers such as ATDM to ensure the availability of skilled and ready
▶ 1:42:57Sir, if I could have liked to come back to you on that one as well.
▶ 1:43:00Sounds good.
▶ 1:43:00Thank you.
▶ 1:43:01All right. And follow up. Given the success of programs like ATDM, how does the department and specifically IBAS plan to transition them from annual pilot style ads into a stable accountable program with standard funding under the Department of the Navy? Well,
▶ 1:43:16I think that relies on our ability to create the partnership with the service in the industry to understand how to pass it off. That's certainly our goal, right? The IBASS program is uh intended to make investments that we can transition to the services uh especially around workforce development. Um and so um where we have specific plans on that, I'll also follow up with you.
▶ 1:43:39That sounds great. Um you know, I heard you talk about the uh working family tax cut, the one big beautiful bill, and how it helped you. And of course, we had a close to a $900 billion NDAA we just passed. We're working on 27 now. What are some things that we can do as a committee to help support your efforts?
▶ 1:43:56Well, I appreciate the the question and the and the leadership on um driving the industrial base. Um, as I mentioned, I I think we're really in the heart of sorting through and implementing the uh authorizations you've already provided, but while we're doing that, we're keeping tabs on where could we use additional help.
▶ 1:44:18And I think at some point in the near future we'd be able to bring that back to you to uh uh to talk through if we can get additional resources flexibility.
▶ 1:44:28There's a advanced um I guess you would call it additive additive manufacturing company in Los Angeles called Divergent. How is uh how are companies like that going to be game changers for what you're doing? I've had the pleasure of visiting divergent uh with the secretary of war recently and it is amazing what kind of technology they've been able to produce to uh create opportunities for additive manufacturing.
▶ 1:44:52I think one of the things that we're working very hard to um to over to um accomplish in order to enable companies like divergent is um changing the culture within the department to be opening to accepting these new technologies. Is additive manufacturing trusted within the engineering workforce, within the government? And how can we build that confidence?
▶ 1:45:13That a new emerging technology like this that offers tremendous benefit in terms of schedule gain and efficiency also fulfills the mission and the quality assurance that we need in order to provide secure capable weapons to our war fighter. And so we've got a team that's working that very hard right now.
▶ 1:45:30Thank you.
▶ 1:45:32Gentleman yields back. Chair, I recognize gentleman from California, Mr.
▶ 1:45:35Thank you, Mr. Chairman. Uh and thank you sir for uh appearing before us and for your service to the country. We appreciate you. My background is in aerospace. I ran Virgin Galactic and was chief of staff at NASA. So I have a bit of experience in terms of how do we uh move from a small company up to sort of a midsize company. I got a bunch of stuff to cover so I'll be relatively quickly. I'm proud to represent uh Palmdale's plant 42 skunk works. Um first let's hit B21. The requisite B21 question. I think we got a program there that's operating roughly on on budget and on schedule.
▶ 1:46:04I think it' be great to formalize uh higher production goals if if we can soon. Can you give us any update on how that's going?
▶ 1:46:12Well, first of all, I had a chance to visit your district a couple weeks ago, went to Edwards in Palmdale and very impressive operations they have there. Got a great report from the Edwards team on the performance of the aircraft uh which uh which is which is phenomenal. We are working to uh work through what the uh future potential production rates could be. Um I can assure you there's a lot of attention on that. Thank you, sir. Okay. Um, just one small point on that.
▶ 1:46:37Uh, one of the challenges at Plan 42 is we're getting so many people there that we have big traffic jams outside and it's a it's actually a big issue. It's a safety issue and so maybe we can get a little help from your department to just we want to make sure that the thousands of folks who are helping us to achieve this super important strategic goal uh get there safely and uh so maybe we could talk to your folks about that. Sort of a minor problem, but we got to make sure that the workforce is is safe and secure as they as they get around to things. Uh great to work with you on that.
▶ 1:47:05Um in terms of early stage companies, uh this is more common. I know you're working on it. Getting through the valley of death is absolutely crucial. You know, you can get your early STRs and SB SB SBIS.
▶ 1:47:16Um but then getting through that is is really important. So I hope you're working on that. Um because you know, you get to the other side, there might not be money for a few years and you might die in the middle. And so we we we're losing out potentially on innovation there in the middle. I'm just going to leave that. keep working on that. And then similarly for mid-tier companies, they don't necessarily want an equity investment.
▶ 1:47:38Maybe they're doing okay, their positive cash flow, but you know, a governmentbacked loan or something could enable them to expand production capacity quickly to enable, you know, us to reach our goals. So I would I would encourage you to think about those things. You know, sort of essentially stage specific help, you know, early mid, you know, what does each stage need? and be in constant communication with those folks as I'm sure you are because that's kind of what we need to be agile and and grow that grow those different pieces of things. Um do you have any quick comments on
▶ 1:48:08I think uh valley death is is is is um something we definitely need to overcome. I I think how do we introduce flexibility in the acquisition system? We're starting to see uptake on an interest in for example unmanned ships in the Navy and how do we I I think I my opinion is the barrier has been the rigidity of the structure of our programs where there's really not a champion if you don't have a requirements and a program and so um you know I think recently the Navy created the deputy assistant secretary of the Navy for unmanned ships that becomes a champion within
▶ 1:48:38the infrastructure that can help overcome some of the barriers. We need to create more of that.
▶ 1:48:42Yeah, I think that's a good idea actually. So I'd encourage you to do that. Last point I just want to make is look, I think you're you're a pretty pragmatic guy. I I think what's been happening with the anthropic open AI stuff is just a shame. Like we shouldn't have gotten to that point in in my opinion. We have a a supplier who is basically all over the military now and has been helpful, you know, and to get to a place where we have this fight out in the open, I think has been mismanaged. And I would first of all, like I don't even understand labeling them supply chain risk.
▶ 1:49:12But the the more important point I want to make is I think it discourages innovative companies from wanting to work with the Department of Defense. And so I think we all need to work together as we navigate through these new technologies that are going to be coming forward. Being you know flexible and appropriate as as you know they're going to have their views and having these discussions in an adult way rather than having them pop out into the public I think is just it doesn't help us bring innovative stuff to the to the table.
▶ 1:49:42So, I don't know if you have any comments on that, but it's just more sort of I'm trying to be I think this committee tries to be adult on this stuff and avoid the politics.
▶ 1:49:50That was an example where I I don't think the the the conversation or the end point was conducive to advancing innovation, international security.
▶ 1:50:00I agree with you that we need adult Uh in this case, it was the vendor that brought it into the public and I think that exacerbated the problem.
▶ 1:50:09Okay. Hopefully we can we can all do better going forward. Thanks for your time, Mr. Chairman. I yield back.
▶ 1:50:14Gentleman yields back. Chair not recognized. Gentleman from Georgia, Dr.
▶ 1:50:18Thank you, Mr. Chair, and welcome. Thanks for being with us today.
▶ 1:50:22Thank you.
▶ 1:50:22Uh we we have a lot of highlighted technologies right now in in play with drones and counter drone technologies. Uh the secretary Rubio just said that one of the big problems we had, we were being outproduced basically a hundred for every hundred drones that they were producing, we're producing about six to seven anti- drone missiles, which is obviously going to put us way behind and we're going to continue to face that. I mean, Russia's doing the same thing. China's doing the same thing. I'm sure North Korea would love to do the same thing. These are the adversaries we have to face down.
▶ 1:50:52One of the bottlenecks I've noticed in my district, which we produce a lot of this kind of technology, is FAA regulation, being able to test this stuff, uh, the military's application to the industry and and and actually producing in high volume these technologies. What are we doing to to deconlict that regulation, that barrier that keeps us competitive, that keeps us at pace to develop new technologies?
▶ 1:51:16So we do have a regular dialogue with FAA and we've stood up uh uh the drone dominance initiative which is led by um Owen West recently announced the director of the defense innovation unit uh in an attempt to invest the you know generous allocation of the congress of $2 billion in the one big beautiful bill to uh allow us to build out that domestic industrial base and so that we've got the suppliers the competitiveness and the suppliers within the industry. Uh but I do appreciate and agree with you.
▶ 1:51:45We need to ensure that we're representing um those perspectives in the regulatory discussion and so we're rega do so.
▶ 1:51:55Okay. What do you think about the joint inter agency task force 401's performance so far? How can we do
▶ 1:52:02Yeah, I think I was uh so I I came on just as they were formulating. I think it's an important initiative. It gives us a single point of contact within the department to represent the commonality of our counter UAS efforts.
▶ 1:52:15Uh being led by uh tremendous leader uh Brigier General Ross who um is looking for where can we make procurements that are common across all services while respecting where there's unique services service needs to uh acquire counter UAS within each additional service. Um, and so I think it's kind of an optimal hybrid model for our counter UAS acquisition.
▶ 1:52:39Okay, final question because I know we got about two and a half minutes left, but I'm going to focus on our ship building, which I think is one of the things are hamstring us right now. I'm a Marine. We don't have enough amphibs, but we're way behind in all ship building. I think our best contracts what, six months behind, 150% over budget. That's a significant problem. Just got back from Korea and the Far East. And if you look at all those ship holders, whether it be Japan, Korea, China, the Philippines, Cambodia, Thailand, they're kicking our butts. I mean, it's not even close. We should be leading the way, but we are so far behind in ship.
▶ 1:53:09The the chairman mentioned this in his opening remarks that this is one of the things that really concerns us. That is that is our our bread and butter, especially in the Paycom region, which is 70% of the world's trade, 70% of the world's population, 70% of the world's might. This is a significant problem, but we seem like we we keep on sticking to the antiquated system that keeps us way behind. We go to Korea, they deliver ahead of time on budget. We can't even that that's a joke to us. What are we doing to address that problem?
▶ 1:53:38Yeah, it is a big problem. I think uh I think number one uh at a tactical level the department is uh I mentioned earlier the business operators for national defense where we're bringing in production and industrial engineering experts who have proven records in other industries to come in bring a fresh set of eyes to the shipyards.
▶ 1:53:59the uh companies have been very uh open about uh receiving these experts and and allowing them to integrate it into their operations and we're seeing opportunities some significant opportunities for production gains. I think um you know we we we haven't made the investment I haven't studied the history of the uh Korean ship building industry. I know they're tremendous. I think they've made significant investment. Um I think we we don't have the competition that I think uh we generally benefit from in other industries.
▶ 1:54:29And so that's um and I'm not sure that that's a near-term opportunity for us to fix. But I think if we bring from the department's perspective tremendous leadership and bringing experts on production into the shipyards and helping us get to a place where we can two or 3x our production capacity, that's a start. Secondly, I think there's a lot of innovation coming. I met with the uh CEO of Seronic yesterday who's bringing these unmanned ships and they're making tremendous investments in growth of ship building capacity.
▶ 1:55:00And so I think we need to think about how are we encouraging new entrance into the space as well.
▶ 1:55:04I'm almost out of time, but just I hope you're also reflecting on how we build that talent pool domestically of skilled labor that we need to to get this job done. That I'm out of time. Appreciate you. I yield.
▶ 1:55:15Thank you, Congressman.
▶ 1:55:15Gentleman yields back. Chair and I recognize gentleman from Missouri, Mr.
▶ 1:55:20Thank you, Mr. chair and the ranking member to our witness. Thank you for being here today. My district and the greater St. Louis region is home to the production of some of the most advanced fighter aircraft in the world. Generations of skilled machinists, engineers, welders, and technicians in our community have built the aircraft and weapon systems that protect our service members and deter our adversaries. St. Louis is a sleeping giant in the defense industrial base.
▶ 1:55:50We have the infrastructure, we have the workforce, we have the supplier network, and we have the innovation ecosystem to scale pro production rapidly when the nation calls. What we need is predictability, investment, and a department that sends clear, stable demand signals so industry can hire, train, and build with confidence.
▶ 1:56:14At a time when China is expanding its industrial capacity at a pace we cannot ignore, the United States cannot afford boom and bust procurement cycles that hollow out our workforce and weaken our supply chains. Speed to scale is not just a slogan. It requires stable multi-year procurement, accelerated qualification of advanced manufacturing, and a workforce strategy that meets the moment.
▶ 1:56:44If we get this right, we streng we strengthen deterrence, lower long-term costs, reduce reliance on foreign supply chains, and create good paying jobs in communities like mine. St. Louis stands ready to do its part. The question before us is whether we will provide the policy certainty and acquisition discipline necessary to unleash that potential. Mr.
▶ 1:57:10McDuffy, given historic instability in Air Force procurement profiles, how is the department ensuring long-term forecast stability so places so suppliers in places like St. Louis can confidently invest in tooling, workforce, and Congressman, thank you for your question. I also had the privilege of visiting your district recently and the Boeing the Boeing facility. Congratulations on the relocation of the Boeing headquarters to St. Louis.
▶ 1:57:38I think that's tremendous uh initiative and I agree with everything you said about how do we build in long-term stability into the industrial base. Um munitions is the the first case that we took a look at. I think we're interested in exploring working with Congress to see if that can be extended to other platforms because of all the benefits that you outlined.
▶ 1:57:58Um investment that comes from the stability when industry knows that there's certainty of demand over a period of time that they can spend on their workforce on their production capacity on any means of production that requires uh enhancement or efficiency and they know they're going to get the return on investment. And I think that comes from the multi-year procurement that we p uh piloted with the help of the Congress
▶ 1:58:23And as and as a followup, what concrete steps are you taking to avoid the boom and bust cycles that hollowed out that hollow out skilled aerospace like labor
▶ 1:58:34Well, I think uh you know the announcement of the F-47 is a good step to ensure that we've got an sixthg gen fighter and we can maintain that workforce uh beyond our current inventory. Um, and I think ensuring that we've got the funding there, uh, is the other thing. And so, um, you know, obviously we're working the FY27 budget right now.
▶ 1:58:56Um, and I think the third thing is where we can pursue a multi-year procurements, whether it's F-15s with Boeing and, um, F-35s, U, F-47s. We know we're going to need these systems, and there's only one U vendor delivering them. And so how do we keep the pressure on to ensure that we get the delivery that we need but also provide the certainty so they can make the investments to deliver on time.
▶ 1:59:22Across the department there's been a cited shortage of skilled workers including welders and machinists. In aerospace heavy regions like my district workforce shortages directly constrain output. Here in Congress, I've made it a priority to expand workforce opportunities across educational programs and partnerships with schools and universities across the greater St. Louis region.
▶ 1:59:45Does DoD currently have the authority to partner with regional tech schools and workforce boards to expand pipeline programs? We are we do have current programs uh that uh pursue training within these key uh um disciplines where we don't have the workforce that we need.
▶ 2:00:06Uh if there are specific areas where you see a need for investment, I'm sure that my team would be happy to work with your team to identify any candidates where we could expand that capability.
▶ 2:00:16Thank you. I have I have more questions. I'll submit them to staff. Thank you. I yield my yield my time.
▶ 2:00:21Gentleman yields back. Chair now recognizes a gentleman from Guam, Mr.
▶ 2:00:25Thank you, Mr. Chairman. Under Secretary Duffy, thank you for you and your team and the hard work you're doing to protect our soldiers and our freedom. Thank you, sir. And I'm represent Guam, of course, and I want to bring your attention to the Indopaccom. Guam being the most western soil uh where we have our ammunition and our fuel. It's a great concern for me and and in a Taiwan conflict.
▶ 2:00:48Uh considering that a 2023 CSIS analysis estimates the United States will be depleted uh uh of guided ammunitions, the PGMS within one week of the start of And in our current operation in Iran, we know that interceptors are being consumed more quickly than we can put them together.
▶ 2:01:15And I I know your office does recognize this vulnerability and you're working really hard to improve our in our munitions industry base, but of course we have a shortfall and there's potential to leave our service members at greater risks. So question sir is how long can we sustain this operation in uh with Iran before needing to transfer munitions from Indo-Pacific region.
▶ 2:01:43So this is uh clearly a focus of ours is ensuring that we uh are really driving the industrial base to uh to to drive up the growth and the production capacity within the industrial base. I want to thank the uh your leadership and and Guam for being such a strategic uh asset for the department and and all the the work that's going on there.
▶ 2:02:06Um I think uh this will be a continual effort over time for us to continue to engage industry, identify the uh opportunities to increase the production rate to ensure that we've got um um munitions across the board for all challenges that we may face.
▶ 2:02:25Thank you. And give me your concern of our limited magazine depth and how it would undermines our deterrence in the I I mentioned earlier I believe that uh General Kaine stated that we have adequate munitions for any fight and any time at the president's choosing and and I agree that to be true.
▶ 2:02:46That doesn't mean that we shouldn't be investing our energy and our treasure and our uh expertise to expand the defense industrial base and munitions and across multiple portfolios. And so that's where my focus is on a day-to-day basis.
▶ 2:03:04So on that line sir, do you feel or see value in establishing munitions production in the Indo Indopaccom Pacific theater because of our logistics uh distance and the chain that we had to go through uh when when we finally had to look at our forces overall? So would would that be a option for you sir?
▶ 2:03:28My office is uh consistently considering and evaluating opportunities for not just co- production, co- sustainment, opportunities to partner with our allies in the region uh both in Europe and in uh the Asia-Pacific region uh to provide capability uh for means of production and sustainment. And so I think it's a constant uh consideration as we engage our allies in the region. Thank you, Under Secretary.
▶ 2:03:58I appreciate you. Thank you, Mr. Chairman. Yield
▶ 2:04:02Gentleman yields back. Chair now recognizes gentleman from California, Mr. Cisneros.
▶ 2:04:06Thank you, Mr. Chairman. Thank you for being here, Mr. Duffy. Um, Secretary Duffy, the President Trump just he didn't say adequate. He said the US has the ability to fight wars forever. Virtually we have an unlimited supply of weapons and munitions. Where did he get that from? Who told him that? Was it you who told him that? Was it Secretary Hexath who told him we have an unlimited supply of weapons?
▶ 2:04:32I haven't been a participant in conversation directly with the
▶ 2:04:36Do Do you believe we have an unlimited supply of weapons?
▶ 2:04:38I believe we have the weapons that we need and I'm working every day to ensure that we have
▶ 2:04:42we have an unlimited supply of weapons.
▶ 2:04:44I believe we have the weapons we need.
▶ 2:04:47So, we do not have the unlimited supply of weapons. I can tell you that. I'm pretty sure that's why we're having this hearing today. But so was the president just lying to us right now? Is he lying to the American people when he says we have an unlimited supply of weapons like my colleague just said, right? We're we're Patriot missile interceptors are it's taken us we make them in the teens per month. We're flying them off firing off hundreds at a time. We've used numerous ones are there.
▶ 2:05:15We're not replacing them at the pace that we are using them. I'm focused on ensuring that we're making up for the industrial base that we inherited from the last administration and creating multiples of production capacity so that we do have as many weapons as we need for any future conflict.
▶ 2:05:33Well, this administration is a year in the job already, right? So, they can't keep blaming the previous administration, previous administration. They got to get going here and get this rolling and rolling. So, um you know, with that, right, we need to kind of work on our industrial base.
▶ 2:05:46We need to pick up the pace and this is something that has been going on back to the previous administrations including the first Trump administration and I'll even give you the benefit of the doubt the administration before that right so it's an ongoing problems so how are you going to fix us right you're in the job now how are you going to get production up
▶ 2:06:06well I think uh you know we started last month with these deals that uh we negotiated with industry where uh thanks to this committee and the congress's willingness to grant us multi-year procurement government authority, we have been able to pursue long-term contracts with these vendors and what that provides them is the confidence to invest their own money.
▶ 2:06:27This is really, I think, unprecedented, at least with our traditional defense contractors, to be willing to put up the billions of dollars that's required in order to quadruple or quadruple production of these exquisite weapon systems. and we're looking to uh uh pursue other avenues and other platforms to apply that model.
▶ 2:06:46Well, I don't know how willing they're going to be to put up their own weapon systems if they're not going to be able to make the money back on it if we're not going to choose them. Um, second question, the 2026 National Defense Strategy explicitly calls for revitalizing the defense industry base through non-traditional vendors to reintegrate and mobilize our nation's unrivaled creativity and ingenuity.
▶ 2:07:08This past January though, Secretary of Defense initiated lineby-line review of small businesses and 8A contracts to eliminate waste and focus strictly on lethality. There's a paradox here that DoD wants a broader, more resilient industrial base, but is simultaneously cutting the vast contracts that allow small non-traditional companies to innovate and survive.
▶ 2:07:33So, how does the department plan to reignite the industrial base while simultaneously creating an environment of high risk and contract liability that drives small innovative firms away from the defense
▶ 2:07:46The secretary's review is focused on eliminating waste and fraud as you had suggested. Quite honestly, I think small businesses that are performing will benefit from this because this will enhance the program as a high confidence place where innovative companies can come to do business with the department and not be crowded out by people who are not delivering capability to the
▶ 2:08:06Well, I've talen to many businesses that who were delivering, who were performing, who had earned these contracts through what they've done. And I've also talked to numerous businesses that don't want to commit the financial the dollars into this because uh they're not sure that these the the investment's going to come or that these weapon systems will ever be done, right? We need to encourage innovation. We need to encourage the businesses to kind of come to us with new ideas and we need to be able to support that. So with that, Mr. Chairman, I yield back.
▶ 2:08:37Gentleman yields back. Chair now recognizes the gentleman from Virginia, Mr. Vindamman. Thank you, chairman. So, um given the casualties we've sustained dur during this war um from drone threats, uh the public reporting seems to at least indicate that the casualties that we sustained, the six uh KIA and the many more wounded were from a drone strike. Um is the department going to work on an effort similar to Jedo?
▶ 2:09:07Do you know what Jedo is?
▶ 2:09:09I'm familiar with Jedo. Yeah. So that was a that was an effort stood up to deal with the IAD threat that we faced in our wars in Iraq and Afghanistan and was kind of initially an ad hoc effort to deal with what was a not well understood threat. Obviously we should have known about the drone threat for years now given that we've seen this in the Ukrainian context.
▶ 2:09:32So it's it's uh disappointing that no precautions or insufficient precautions were taken How are we going to deal with this threat going forward? Last summer, the secretary stood up in partnership with the secretary of the army the joint inter agency task force 401 which is uh probably not quite as robust as Jedo uh but it's um it's got its own independent acquisition authority led by onear brigadier general and it's uh intended to procure develop the cutting
▶ 2:10:02edge counter UAS capabilities uh a single point of contact within the department while also allowing bespoke for example, Navy uh counter UAS capabilities to uh procure within Navy uh service lanes. But this is a similar to Jedo, a crosscutting single point of counter UAS uh technology acquisition.
▶ 2:10:24So it sounds like to me that the department has already anticipated this threat. Is that correct?
▶ 2:10:29Certainly it's a high focus area. Yes. So if if it has anticipated the threat, then uh I guess the the casualties already sustained were as a result of a lapse and I'm sure there's going to be a full investigation conducted by the um by the department and I look forward to seeing that uh given that again public reporting indicates that uh there were complaints from the leadership talking about insufficient um protection against uh drone threats.
▶ 2:10:58So you talked a little bit about this uh 401 task force 401. Can you talk a little bit more specifically about what exactly like how is it going to streamline it? Where can we help as members of Congress? This is obviously a a major threat. We've seen it again over years.
▶ 2:11:19This has to be I don't know if one star is enough horsepower but to elevate this now to something that is much more significant because I'm being told by senior leaders that the threat from the ballistic missiles is actually easier to deal with because we have sufficient interceptors and air defense capabilities but we are not prepared for drone systems counter
▶ 2:11:43I think it absolutely is a key priority. I think uh what GIA 401 is focused on is a full range of technologies that are emerging both privately funded and government funded technologies.
▶ 2:11:57Directed energy um the APKWS is a modified uh U Hydra 70 rocket that uh for low cost has been very effective at intercepting counter UAS or excuse me and intercepting UAS um uh threats.
▶ 2:12:15Um, so I think I'm sure my team would be happy to come give you a more wholesome uh briefing of of what we are working on, but I assure you that I believe the Congress made uh uh uh somewhere near a billion dollars. I I I don't know that specifically, but uh but the GIA 401 is moving quickly to expend those funds to make sure that we both develop the technology and get them into the field as quickly as can. So, I am interested in the briefing and I'll take you up on that offer.
▶ 2:12:43And I hope that some of these systems, even though that they're they're not proven and they're not in the in the ordinary procurement system, some of them are being deployed forward to prevent um the the strikes that we're seeing. Just quickly, um changing tack here also on UAS, but one of the things that we've seen effective in um the Ukraine battlefield is um fiber optic drones. So basically wireguided.
▶ 2:13:12Uh are there efforts is is anybody looking at that because these are obviously EW uh rich environments that we operate in both in the Middle East and the Ukrainians in in in Europe. Are we looking at those capabilities?
▶ 2:13:26Yes, we have a drone dominance initiative that was launched last summer is being led by Owen West, the new director of the defense innovation unit. uh he's uh been able to deploy two up to $2 billion worth of uh funding that the uh one big beautiful bill made available uh which is looking at building out the domestic industrial base for unmanned systems. Um I can't spec speak specifically to fiber optics.
▶ 2:13:53I'm sure we could look into that and get you a specific answer on that, but given the robustness of the effort, I wouldn't be surprised if he was looking at a full range of technological solutions. I would appreciate you looking into that and thank you for your time. I yield
▶ 2:14:06The gentleman yields back. We have a hard stop at 12:15, so the members in the room will be allowed to ask their questions. If any other members thinking about coming to the chamber, don't bother. We will now recognize uh Mr. Conway from New Jersey.
▶ 2:14:22Uh thank you, Mr. Chairman. Uh Mr. Duffy, I want to thank you for your testimony and the information you provided this committee today. Uh this being my first uh uh hearing as a new member of the Armed Services Committee, I I can announce that I'm a I'm a proud representative of New Jersey in the third district. Uh as I'm sure you're aware, New Jersey has a strong uh defense ecosystem that is vital to national security, innovation, research, and development.
▶ 2:14:49Um also uh in the areas of manufacturing and technological advancements uh my state is home to roughly 7,000 defense contractors who collectively receive over 7 billion in DoD contracts. Of this over 1 billion supports manufacturing research and development across more than 1,700 New Jersey companies.
▶ 2:15:09In just one facility in Morristown near my home, over 3,500 employees work to support critical integrated warfare systems and sensors, which includes radar and weapon systems that are utilized by the department to protect our service members.
▶ 2:15:24My district is also home to the joint base McGuire Dixs Lakeurst which employs more than 46,000 people and um and as you can tell ensuring the continued support and strengthening of the defense industrial base is of critical importance to the people of my district and across the state of New Jersey.
▶ 2:15:42Um I wanted to ask you about um uh the spy one radar and uh system that's developed and integrated um uh in the uh within the Aegis combat system for the Navy uh for now over 40 years. Uh, Spy One and ISIS has um been um indispensable systems in enabling the Navy to protect the fleet, our service members and our allies in recent combat engagements, including right now in the Middle East.
▶ 2:16:13What are you doing to sustain the spy and radar through the duration of these ships expected service
▶ 2:16:21Well, it's a critical capability that uh our sailors are dependent on. Um, and uh, as far as I'm aware, we will continue to rely upon it until there's a and and if and any subsequent uh, upgrades would would be made to that system. So, I don't have specifics on the program. I'd be happy to get back to your team, but I do know it's a critical capability for us.
▶ 2:16:43I I I appreciate that. We've heard uh during this hearing about the importance of demand signal and the briefings that I've attended uh, here to date. Uh certainly that has been something that um has been emphasized by those who work within the the uh defense establishment. Um they are critical to ensuring uh that we have enough suppliers and skilled workforce, retain a skilled workforce and and train a skilled workforce necessary to meet the the various production demands that we have.
▶ 2:17:13Um, and I imagine you've answered this in one way or another, but um, it's important that the demand signal, as I understand it, is accurate and, uh, signals our industry uh, partners uh, to produce what is needed for a national defense like those uh, that are currently working in my district.
▶ 2:17:34Um what more uh can you do to reassure uh those um uh production facilities uh that um uh one they're receiving the right signal and acting on that signal?
▶ 2:17:48Well, we're very dependent on the joint staff to help us define what that true demand signal is. What are the weapon systems that the war fighter needs in order to prevail to deter conflict and prevail? And so, um, when it comes to specific systems, working with the joint staff and, um, our partners in the military departments, uh, we're actively now looking at how can we create as much certainty of demand as we can where we have a,
▶ 2:18:18uh, an understanding that we're going to need a system, you know, into the foreseeable
▶ 2:18:23All right. Thank you, Mr. Chairman. I yield back.
▶ 2:18:28Chair recognizer, Mr. Brian of New York.
▶ 2:18:31Thank you, Mr. Train. I'm glad I snuck in there. Appreciate it. Thank you for the thank you for the good grace. Uh, and uh, thank you, Under Secretary, for being here and your team. Um, I want to start by commending you. um from from day one just really a ruthless focus on speeding things up, driving urgency, driving culture change in addition to all the processes that need to to go along with that for the partnership with the committee uh with the chair and the ranking member on speed act and and all that's um
▶ 2:19:02come and and uh it's just encouraging to me given especially things happening right now that everybody's working together in this space and it's a credit to to your leadership. Um, I'm hearing from that have had great initial success in OTAAS and ATFITS, other competitions. Um, and I'm also hearing from war fighters that have been participating in those competitions. We're happy things are going well.
▶ 2:19:25But then when we we try to move from that success in that uh competition or or sort of rapid prototype, we're still still feels like we're we're not fast enough um on getting to that scale point, finding the right owner to scale um and moving it. Um and and I know you're familiar with a lot of these as well, but I I just heard a story of some of the ground autonomy stuff happening, which is very exciting. um with a company that literally spun out of a university funded by DARPA um gone through all the competitions.
▶ 2:19:56Their their uh mission customer loves them uh and and but it's just they're running up to a point where you know the war fighters need it. Their investors are saying what's the next step? So um I know you understand that and are working on it. Just want to ask what more can we be doing? What can I do um to to speed that up?
▶ 2:20:16Thank you. Yeah, I think I think awareness I mean uh it's hard for us to be fully aware of all the great opportunities that are out there. I do want to make sure we're embracing all the private sector investment and making sure they're connected with the right folks.
▶ 2:20:30Um I mentioned something earlier that I I I think is is is a barrier that we need to work through which is the legacy structure of our acquisition um I think makes it challenging for these new entrance to find champions inside the system and you're only going to get across the valley of death and get into the pipeline if you've got a champion inside the system. So thinking through what kind of mechanisms could we use?
▶ 2:20:57I mean we've created the defense in innovation unit and SCO and of course DARPA and others are helping incubate that technology. But um uh and it's my hope that one of the outcomes of the portfolio acquisition executive with what we believe will be flexibilities will be provided to those leaders that they can potentially be champions of new and emerging technology that are contributing directly to the mission area where they have responsibility for acquiring capability.
▶ 2:21:26That's great. And we would love to work with whoever on your team makes sense if we're hearing those data points to make sure if you're not tracking them for whatever reason. Um, so we could follow up with with you on that. And I apprec appreciate again the that you guys clearly get and you personally get the the culture change component of this in addition to authorities and and everything else that we've been working on. Um, I also want to and I know this has been talked about, but I think it merits um another minute and 35 seconds that I have.
▶ 2:21:56Um, I want to read a a quote from the commander-in-chief from 48 hours ago. The United States munition stockpiles have at the medium and upper medium grade never been higher or better. As was stated to me today, we have a virtually unlimited supply of these weapons. Wars can be fought quote forever and very successfully using just these supplies which are better than other countries finest arms exclamation point.
▶ 2:22:23Um, were you involved in stating that to the president? because I'm not trying to play gotcha, but I that just defies everything we've heard in every hearing I've been in for every year I've been in the Congress. I'm just trying to understand where's the disconnect.
▶ 2:22:38So, my focus is on accelerating the industrial base to ensure that we maintain maximum supply of munition.
▶ 2:22:44So, you weren't involved in briefing the commander-in-chief on that issue. Do you agree with that characterization?
▶ 2:22:51I believe that we have an unlimited supply. So, I'd defer to the chairman reinforcing the president's views, which is that we do have what we need to
▶ 2:22:59But do we have an unlimited supply, under secretary, because I think, look,
▶ 2:23:03you said virtually unlimited. That's what you just said.
▶ 2:23:07Virtually unlimited. Okay, that's right. Do we have a virtually unlimited supply?
▶ 2:23:10I believe we have a ample supply of
▶ 2:23:14I I I don't. And we've heard that over and over. And the reason I'm asking this, if we don't honestly grapple with the problem and fully recognize it, if we're deceiving ourselves about the scope of the problem, we're never going to solve it, right? I know we all understand that. So that that's why I'm asking it in good faith and I yield back, Mr. Chair.
▶ 2:23:34Gentleman yields back. Gentle lady from New Hampshire, we finally made it to you. I'm glad you waited. You're recognized.
▶ 2:23:42Thank you, Mr. Chairman. Definitely worth the wait. Thank you so much, Mr. Duffy for being here today. I'm going to jump right into it. I I want to thank you for your commitment to really supporting the workforce. And when you were here in July, we talked a bit about child care.
▶ 2:23:59And I I really appreciate your commitment to helping us solve for one of the core challenges that I hear from service members, from our exceptional top tier workforce at the Portsmith Naval Shipyard, really across the board, that child care is standing in between the people who are serving us and readiness. Um, in the National Defense Authorization Act, we we were able to secure a bipartisan provision.
▶ 2:24:29It's a really simple one. Uh, just requires the department to come and to give us a briefing on your efforts, which I'm sure are underway to develop solutions in child care. You know, the Department of Defense is the largest employer sponsored child care in the world. Uh, but we're eager to hear from you and I just wanted to ask if you could commit. The the the briefing was supposed to happen by February 1st. So, we're eager to get this on the books and just want to ask for your commitment to get that scheduled as soon as possible.
▶ 2:25:00You have my commitment.
▶ 2:25:02Thank you. I appreciate it. I also want to thank you for your in your written testimony and your testimony today, your commitment to building the robust talent pipeline that we're going to need to bring about the next generation of skilled trades people um in this country.
▶ 2:25:21And I wanted to ask you what what are the biggest barriers that have been standing in between the department and the creation of apprenticeship programs and support for career and technical education since I know it's a patchwork of 50 states with differing rules. You had a great start it sounds like to the pilot program in Michigan, but can you say a little bit more about what the barriers are that you're facing?
▶ 2:25:46I think uh so I I I believe we have a I know we have a a robust pipeline of programs that are working to you know generate interest in the K through2 and STEM and and even vocational trades and partnering in regional areas to enhance the workforce by training where we have deficiencies in particular trades.
▶ 2:26:12Um, I think we can continue to grow that program, but I do think it's more systemic. I think it's how do we get the workforce motivated by the mission of this of the of the job of the vocation? Uh, and how do we overcome some of the challenges we have with compensation and difficulty of workforce? So, I'm not sure training programs are going to get us across those.
▶ 2:26:40Uh and so we're devoting a lot of thought internally to are there broader scale initiatives that we can undertake that champion the importance of the mission of this workforce and you know embedding those that thinking into the national culture. Uh uh not downplaying I'm actually I very much think those training programs are significant. I just want to think about you know maybe there's a bigger challenge we need to undertake.
▶ 2:27:08Well, I would love to work with you on that, especially as we are gearing up for the NDAA for the coming year. So, thank you for your commitment to work together on that.
▶ 2:27:18huge priority for me. In your written testimony, you you you talked about the importance of multi-year procurement contracts and you you you testified specifically about the ways in which you've used this tool to triple quadruple production of key missile defense interceptors. So, I'm assuming that's to to try to shore up what was a depleted and insufficient stockpile.
▶ 2:27:46I I was addressing the insufficiently invested defense industrial base. The production capacity is there. We have tremendous growth needs uh for um ensuring that we can uh secure not you know we're seeing increased expenditures in our European allies and we hope
▶ 2:28:06you know we want to triple and quadruple production because we want to shore up the what is a stockpile that hasn't exactly met the moment. My my concern Mr. Duffy is we started this war 5 days ago with an insufficient stockpile in these key missile defense interceptors. We are expending them at a rate that's not entirely clear to me as I sit here now.
▶ 2:28:30Uh, and it my concern is as I read your national defense strategy, how how is this how are we going to be able to actually meet this moment and be successful in a strategy of denial as you put it very well uh in the Western Pacific? So, this is a this is a question I'll submit to you on the record because I see I'm out of time, but this is my core concern.
▶ 2:28:52Thank you.
▶ 2:28:53Do you share it? I uh first of all when it comes to uh the adequacy of the stockpile you know chairman of the joint chiefs of staff Dan Kaine stated very clearly today that he planned and is executing a mission that has adequate stockpile.
▶ 2:29:11So, as I mentioned, my focus is way before this operation started, ensuring that we are making the investments required to expand the industrial base that we inherited that doesn't account for the future growth needs of our security and we are focused and I am focused every day on ensuring that we get the industrial base to produce more.
▶ 2:29:30Well, I thank you for that. Yield back, Mr. Chairman. Thank you.
▶ 2:29:33Gentlely yields back. Uh, thank you, Mr. Duffy, for being here. Uh, we have asked, this committee has asked for an accounting of all equity deals that you've made to date. Can you get that to us by the end of the week, please?
▶ 2:29:44Yes, sir.
▶ 2:29:45Thank you.
▶ 2:29:46Been a long day. You did a good job. Thank you very much. We're adjourned.
▶ 2:29:49Thank you.