▶ 0:16:35>> the hearing will come to order. This morning the committee welcomes three experts to testify on how the united states could equip and what allies and partners with more U.S.-made weaponry. This should be a very good here because we have Dr. william greenwald, Dr. lisa manning Mr. keith webster.
▶ 0:17:03Experts in the field with government expertise also. Thank you all three for joining us. On may 12, 1940, american playwright robert sherwood was quoted in the new york times but not for any commentary about theater. Mr. sherwood said this country is already an arsenal for the democratic allies.
▶ 0:17:30It is fitting that we are holding this hearing nearly 85 years to the day since these words were published. We face a threat that feels eerily similar to that and we are seeking to rebuild the arsenal of democracy in our own time. That brings us to the military sales system. Fms is the system by which we transfer arms to our foreign partners.
▶ 0:17:59It is the system that allows us to work with partners to strengthen deterrence and bolster ally burden sharing. It is responsible for coordinating fms including considering what to sell. In the senate, that job belongs primarily to our colleagues down the hall, the foreign relations committee and ranking member shaheen.
▶ 0:18:30The department of defense and this committee have significant responsibilities in informing and implementing those decisions and that is why we are here today. The pentagon plays a leading role in cooperation activities such as code development, code production, and the integration of american and allied basis.
▶ 0:18:54We hope to discuss how the pentagon could better run the fms and international congress cooperation processes to maintain deterrence. Dod needs a dramatic shift in mindset with partners as a core function of the U.S. military.
▶ 0:19:19Over the past three decades the pentagon's ability to implement fms and make mutually beneficial weapons deals with allies has deteriorated alongside our defense industrial base. A bureaucracy that has over specialized and slow. It is capable of producing exquisite systems, it could not do so at scale or with speed.
▶ 0:19:49In 2024 the united states $118 billion of weaponry, a significant increase over recent years and multiple times more than the next closest country, $118 billion is equivalent to 70% of the procurement budget for 2024. Even more weapons exports is nearly all of our allies and partners have allowed weapons production to deteriorate.
▶ 0:20:19They are scrambling to rearm amid a worsening security environment. We have the cusp of a manufacturing revival. We could be at the cusp of a manufacturing revival. Which could dramatically expand the types of weapons available for export. I would propose we focus on four different areas.
▶ 0:20:51A core mission of the military no one duty would ignore 100 billion dollars of additional weapons spending if it were called anything other than fms. Production is a weapon, he must reorganize itself to recognize that fact. They prepared to give us some advice.
▶ 0:21:23The weapons they regulate for requirements to the weapons. A 3d printed one-way attack drone is not an aircraft carrier. The regulations should recognize this. With risk management when considering technology release. Especially for close allies.
▶ 0:21:51Especially export ability into our weapons development. Build it into our development. Here's what I mean. We frequently ignore allied requirements when developing weapons. It should surprise no one that these capabilities are not approved for release that we plan to fight with and pretend.
▶ 0:22:19We need to partner with our industrial base to make the right investments to expand production. If we build it, they will come. Waiting years and years for weapons that we cannot produce fast enough. Over the past two decades the past administration has reviewed the system almost every year with the same results.
▶ 0:22:46The trump administration's recent executive order is directionally correct and holds the promise of generational reform. This committee, our colleagues in the house, our two departments to imagine the fundamentals of our fms system and integrate our industrial base with allies.
▶ 0:23:14I look forward to hearing from our experts in a lively round of questions. I turned to my friend senator reed.
▶ 0:23:22Sen. Reed: I want to welcome the witnesses, Dr. greenwalt, Mr. webster, Dr. saum-manning. You each bring unique perspectives to our military sales. We are fortunate to have such an esteemed panel before us.
▶ 0:23:48Sen. Reed: Foreign military sales or fms is largely the jurisdiction of the senate foreign relations committee as the chairman indicated. We are fortunate to have senator shaheen here and senator richards I know will be interested in cooperating. The department of defense plays a significant role although the jurisdiction may be in another committee.
▶ 0:24:13Sen. Reed: It is my hope the two committees could join together and develop an overall plan that will accelerate and make more efficient the fms process as well as establishing america's greatest advantage with the rivals of allies and partners from europe, asia, southern hemisphere, northern hemisphere. It is fundamental to our security and prosperity at home.
▶ 0:24:43Sen. Reed: Many of our friends and partners rely on the state of our military equipment that we provide to fms. This arrangement is mutually beneficial as our capabilities with those of our allies. Fms strengthens the connected tissue between our respective militaries. Fms provides partners with capabilities to advance our own defense and deterrence capabilities. It provides us with the ability to draw upon our allies.
▶ 0:25:13Sen. Reed: You could dial up or dial back support as the situation dictates. Many of the aspects of the fms prospect are not working as well as they could be. Which means ceding our advantage to adversaries rather than capitalizing on fms. I often hear from foreign leaders about the difficulties and delays they experience requiring weapons and hardware from the united date.
▶ 0:25:41Sen. Reed: Time and time again I've heard the foreign military sales process has become too slow. I hope they better understand the complex fms roles and responsibilities and how it could potentially make these more efficient.
▶ 0:26:05Sen. Reed: This committee and the defense department may not be able to fix the process but we should start with improving functions that fall within our jurisdiction. I would appreciate our witness's views on the workforce requirements to support fms and the potentially harmful impacts of recent efforts to dramatically reduce the workforce at the pentagon and critical supporting agencies like the state department. The active duties of fms and international armaments intersect.
▶ 0:26:35Sen. Reed: I would ask the witness to discuss how we could align roles with responsibilities and expertise to deliver better performance outcomes. I look forward to the hearing and insightful advice of the panelist. I hope we could work together to have better understanding so that they could adapt quickly to our rapidly changing world. Thank you again to our witnesses.
▶ 0:27:02Chair Wicker: I have a live microphone this morning. Thank you. Let's get right into five-minute summaries of testimonies and we will begin with Dr. greenwalt.
▶ 0:27:15Dr. Greenwalt: Chairman wicker, ranking member reed and distinguished members of the committee.
▶ 0:27:25Chair Wicker: Have you pushed your button?
▶ 0:27:26Dr. Greenwalt: I did. I'm sorry. I already lost 10 seconds. Thank you for the opportunity to testify this morning on both fms and international armaments cooperation in general. How they decide to work together with other countries on new defense solutions is a critical component of our national security. The way the U.S.
▶ 0:27:52Dr. Greenwalt: Arms cooperation system works at least for our closest allies is fundamentally broken. This strings from a failure not to be diligent but from a failure to keep up with the times. The world has changed. The arms cooperation created in the mid-1970's no longer make sense in this new world. These tools were designed around an era of U.S. technological dominance that no longer exists.
▶ 0:28:25Dr. Greenwalt: It is no longer the only driver of innovation. We continue to act like it still is. We make it really hard for allies to gain access to legacy technologies they would produce on their own or somewhere else. We make it even harder for them to bring superior knowledge and capabilities to the united states. Harder than that to jointly work on something new. National security threats are fundamentally different than those posed during the cold war.
▶ 0:28:55Dr. Greenwalt: The U.S. needs to leverage the resource and capabilities of a much larger, innovative commercially driven industrial base to support an interoperable ally force. The proper -- cooperation designed to keep 1970's technology out of the hands of the old soviet union to prevent that from happening. Breaking down effective arms cooperation is vital.
▶ 0:29:18Dr. Greenwalt: If we want to enhance our own capabilities as well as our allies we need to look at all of our arms technology transfer processes, not just fms. We need to adopt a time-based cooperative approach that positively differentiates between a group of allies and partners. Reform would not mean a wholesale illumination but deliver processes for the vast majority of the 220 three countries and international organizations.
▶ 0:29:49Dr. Greenwalt: Decisions on whether the transfer of weapons capabilities for those entities could be based on the less than urgent step-by-step approach. Shaped by a debate on our foreign policy goals on each of those countries. A critical segment of our closest allies who share our values and interests, there a series of fast lanes with the joint development of next-generation capabilities. They should be tightly integrated to our industrial base plan.
▶ 0:30:19Dr. Greenwalt: How would this work? Countries identified in law as a part of the industrial base and selectively expand to other close allies to face a streamlined process for a sense of urgency. This should be based on certainty, predictive miss, timeliness rather than a one-size-fits-all time-consuming years long approach. For these allies there should be an upfront agreement for the U.S. government on a preapproved list of specific types of systems these countries could buy.
▶ 0:30:48Dr. Greenwalt: A contracting vehicle that allies could buy should be established with pre-negotiated prices for these capabilities. The stockpile should be established to store U.S. weapons readily available for export. More importantly, the broad-based waiver from the international traffic in arms regulation is needed beyond the inadequate limited waiver that has been provided in canada.
▶ 0:31:13Dr. Greenwalt: This waiver would designate and incentivize american and allied scientists to quickly work together on new military capabilities. Finally, leadership dod needs to be aligned to enable these changes.
▶ 0:31:28Dr. Greenwalt: This could be done by creating a defense war production board or something like it shared by the deputy secretary of defense and staffed by two assistant secretaries, one for international production and supply chain similar to what we have now and another for international cooperation and production.
▶ 0:31:49Dr. Greenwalt: This would provide a formal senior decision-making oversight mechanism over the stovepipes that govern international arms cooperation with dod as well as providing defense industrial production. Thank you again for the opportunity to testify. I look forward to your question.
▶ 0:32:04Chair Wicker: Thank you, Dr. greenwalt, Mr. webster, you are next.
▶ 0:32:10Mr. Webster: Thank you, chairman wicker, ranking member reed, and the committee for the opportunity to testify today. I have the honor of serving as the president of aerospace counsel and the president of the federal acquisition council within the commerce chamber for international policy.
▶ 0:32:31Mr. Webster: Prior to joining the chamber I served 32 years at the department of defense in various roles associated with international political military policy related programs. One thing is clear. The time for bold action is now. The foreign military sales process is cumbersome. After three decades of attempt, no meaningful reforms have been made. Together we could change that.
▶ 0:32:57Mr. Webster: Beginning in 1998 we saw public criticism of the foreign military sales or fms program and demands for change. In the past 27 years there have been 15 dod tiger teams looking at issues of speeding up processes, meeting demand on time, reducing costs.
▶ 0:33:17Mr. Webster: Within six months of the first obama administration the national security council signed a letter to then secretary of defense robert gates directing the department to improve the fms process. Secretary gates explained that significant fms reform requires a tax force led by the national security council since issues of concern cut across the entire interagency.
▶ 0:33:45Mr. Webster: The nsc agreed with this conclusion, such a task force never materialized. Dod once again was on its own to determine what could change within its limited control. Why does the fms process take so long? The complex and contentious programs could take months to conclude. Once concluded the formal notification of congress is received and then complete.
▶ 0:34:13Mr. Webster: The dod could then proceed with finalizing the fms agreement, a bilateral agreement, not a contract. Once the agreement is signed both nations -- by both nations, funding has begun to flow, dod contracting officers legally allowed to negotiate a contract with the U.S. industry.
▶ 0:34:34Mr. Webster: It is worth thinking about that and fms contract is a dod contract developed and executed by the same dod personnel buying the same capability for U.S. forces. On average, a dod contract to implement a major fms program takes 18 months to award. The delays in part because over two decades a dod contracting community has been understaffed annually between 15%-30%.
▶ 0:35:04Mr. Webster: Most fms contracts are not a priority within dod. The U.S. industry is authorized to begin production. Within our defense industrial base becomes painfully clear. The pentagon continues to face supply chain and industrial base challenges, all compounded by continuing resolutions and an increasingly inefficient annual defense appropriations cycle. Now is the time for bold action.
▶ 0:35:33Mr. Webster: The dod must take steps it hasn't before including organizing international sales and cooperation offices, placing them under a newly formed secretary of defense reporting to the under secretary of defense for acquisitions and sustainment. Amending dod program officers and charters to include a training element for execution of international programs incorporating ai, automation to help speed up the dod contracting process.
▶ 0:36:04Mr. Webster: Re-examining what should be in fms only case or sale. Now is the time to transfer as much as we can into the direct commercial contracting processes led by government approval. Secretary of defense needs to form an international cooperation advisory board to solicit other ideas and recommendations.
▶ 0:36:26Mr. Webster: Congress has a role to play as well including increasing congressional notification thresholds and developing a list of allies and close partner nations and preapproved capability thus illuminating ambiguity and debate on select future sales.
▶ 0:36:43Mr. Webster: The business community and the administration must also work closely together to better understand the challenges of production to include supply chain stress, delays in appropriations, changing capability strategies, and top-down mandates. True fms transformation is a task for the interagency of the private sector, without a unified approach, true fms transformation will remain elusive. Thank you.
▶ 0:37:12Chair Wicker: Thank you very much, Dr. saum-manning, you are recognized.
▶ 0:37:23Dr. Saum-Manning: Thank you very much for the opportunity to testify on the foreign military sales responsibilities and authorities. The fms program is authorized by the arms export control act and is a vehicle through which the defense security operation agency operates the program at no cost to the U.S. taxpayer because it is funded by administrative charges paid to the foreign purchaser.
▶ 0:37:49Dr. Saum-Manning: Fms is a vital tool that has allied contributions to U.S. deterrence. Fms totaled $118 billion. This week, the white house announced a potential $142 billion sale to saudi arabia underscoring the program strategic and economic significance.
▶ 0:38:13Dr. Saum-Manning: A research found the complexity and the fms process could result in unacceptable delays which in turn risks undermining U.S. capability with our partners and provides openings for strategic competitors. We interviewed 100 fms stakeholders across government and industry representing 1300 years of collective experience. Frustrations were consistent from senior leaders lacking authority to direct the process to frontline personnel struggling to navigate it.
▶ 0:38:42Dr. Saum-Manning: I will highlight several challenges we identified. The department of state and dod will have a unified front on an process for prioritization of partners making it difficult for the fms enterprise to forecast the demand signal. There are also opportunities to engage in reform. There are a lot of reform efforts that have gone.
▶ 0:39:07Dr. Saum-Manning: The office of the under secretary of defense may be missing opportunities to advocate for the role of fms and achieving U.S. security objectives. Dsea is charged with overseeing fms management, oversight, enforcement authorities. The military departments implementing agency similarly lacks holding stakeholders accountable for delays or underperformance.
▶ 0:39:34Dr. Saum-Manning: The fms system relies on dod acquisition for procurement but is often a secondary player behind domestic defense acquisition. As one of our entries noted, foreign partners is well below anything else. If this were baseball, it is definitely the minor leagues. Acquisition offices are micro federated meaning dispersed among myriad stakeholder organizations with our own systems processes, and priorities.
▶ 0:40:04Dr. Saum-Manning: Most do not pertain to security assistance cases. This could make it difficult to identify, some offices also described being understaffed. Industrial base bottlenecks for progress and finally data is fragmented across micro federated systems blocking standardized performance or government sharing protocols. We are data rich and information poor.
▶ 0:40:33Dr. Saum-Manning: Several recommendations came out of our study, many of which aligned with the recent executive order and other reform efforts gone in the past. First amendment dod directive so ust policy could assert themselves in the fms process. For example advocating for fms among commands with the capabilities into planning and exercises. The joint staff might develop a factoring ally and partner contributions.
▶ 0:41:03Dr. Saum-Manning: Amend dod directive so ust policy and consultation with state is responsible for codifying the criteria to perform the annual dsea led partner process. At the operational level, strengthen the ability of the process and cold -- hold key stakeholders accountable. Provide regular reporting on the status of fms cases.
▶ 0:41:32Dr. Saum-Manning: The director should participate in the selecting of agency key leaders and provide input into the performance evaluations. Third, should establish a governmentwide data czar to lead data governments -- governance with data sharing standards, approve transparency across agency, industry, and international partners.
▶ 0:41:57Dr. Saum-Manning: Finally, the military should amend regulations to allow the implementing agencies more influence over internal fms activities including leadership selection and performance evaluations for relevant offices outside the chain of command. There is no silver bullet. The fms enterprise involves a diverse network of actors. The need for reform is urgent.
▶ 0:42:24Dr. Saum-Manning: Implementing recommendations that foster a more agile, transparent, and accountable process is essential for enabling our partners and reinforcing america's global leadership. Thank you for attention to this critical issue. We welcome your questions.
▶ 0:42:39Chair Wicker: When did rand release this report and how long did they work on it.
▶ 0:42:48Dr. Saum-Manning: We worked on this report for a year. We published it at the end of 2024.
▶ 0:42:59Chair Wicker: All three of you gave great testimony, very thought-provoking. I'm sure we will have a lot of good questions. How much of the problem, we will start with Dr. green vault, how much of the problem do you think is mindset in the various departments and how much is a need for statutory reform?
▶ 0:43:26Dr. Greenwalt: I think the mindset issue is a critical one. Nontraditional defense firms in the united states face many of the same issues about working with the department of defense as far as the understanding of breaking in and bringing the nation of technology to the mix.
▶ 0:43:51Dr. Greenwalt: I think there is a mindset that our allies are stuck with this for our technology and it is so wonderful that everyone will jump through hoops to get it. The reality is there's a lot of technological leveling going on out there. Right now there's a great opportunity for the U.S. to sell weapon systems. A lot of these countries haven't built up the manufacturing facilities to do so. If they don't change we will do that.
▶ 0:44:24Dr. Greenwalt: There is some issues on the legislative side. Mostly a lot of the problems are on the regulatory side. It's how the department is interpreting what congress has put into place.
▶ 0:44:38Chair Wicker: Regulations that are in place, not just practices?
▶ 0:44:45Dr. Greenwalt: Regulations in place like the international traffic in arms regulation.
▶ 0:44:51Chair Wicker: That needs to be retooled?
▶ 0:44:53Dr. Greenwalt: It needs to be looked at for our closest allies.
▶ 0:44:59Chair Wicker: On the record, time is fleeting, what statutory changes we need. You are next on the very same question.
▶ 0:45:11Mr. Webster: The issue of mindset, let's start where technology development begins. It begins with the U.S. war fighter fundamentally does not desire to have a proliferation of the latest and greatest technology around the world.
▶ 0:45:31Mr. Webster: When we look at technology security, it starts with the services who have tasked their community and their industries to develop capability for them.
▶ 0:45:45Chair Wicker: If you were running the state department and defee department, what would you do today? What would you start doing?
▶ 0:45:52Mr. Webster: I would convene the leadership both in uniform and political in a meeting to say let's start with our allies. It is absolutely necessary that we harmonize technology release and be risk takers and be creative in finding ways to support their needs. It's an issue of taking risks and willing to take risk.
▶ 0:46:21Chair Wicker: We typically pass one bill a year out of this committee. That will not come four months. You could do a great deal of taking from the first two. You could do a great deal without the congress, house, senate passing anything?
▶ 0:46:42Mr. Webster: That is correct. It is an issue of leadership.
▶ 0:46:46Chair Wicker: You speak for rand.
▶ 0:46:49Dr. Saum-Manning: I speak for rand, that is right. I think it is a cultural mindset. I don't know if you could regulate culture. As I mentioned, this community is considered a secondary player . We are focused on the U.S. war fighter in the allies of partners come in second.
▶ 0:47:12Dr. Saum-Manning: In my mind, the way you work on this is to incentivize leadership so those within the organizations and offices if that is a priority gives reasons to prioritize it. Looking for a performance evaluation, the way you could hold our leaders accountable.
▶ 0:47:36Chair Wicker: Quickly, you mentioned continued resolutions. Do cr's reduce the national debt?
▶ 0:47:48Dr. Saum-Manning: Our study did not look at that.
▶ 0:47:58Chair Wicker: You don't have an opinion as rand does about the helpfulness of year after year continuing resolutions?
▶ 0:48:10Mr. Webster: It is absolutely a disaster to have continuing resolutions. Even the ones that are pass this year, which is in norma's flexibility is helpful. Our pentagon needs that certainty. They are not a wartime footing.
▶ 0:48:37Dr. Greenwalt: I think if you give department greater flexibility for a larger pot of money, it may not be as disastrous. If you tie them to the rigid ppv budget accounts that create inflexibility it would.
▶ 0:48:56Sen. Shaheen: Thank you to all of our witnesses. I wholeheartedly agree with most of what each of you have said and certainly believe the lack of budget certainty and the continuing cr's are detrimental to our national security. I think we have another issue with respect to how fms works. That is the tariffs that have been imposed.
▶ 0:49:30Sen. Shaheen: For the aerospace industry. The department of defense, because of the steel tariffs. They have been in allied supplier. They have now lost and their time went from 20 weeks to 2.5 years. That would not provide what we need for the industry with that kind of problem. The ball bearings are in almost every major export with U.S.
▶ 0:50:02Sen. Shaheen: Platforms whether it is guiding multiple rocket launch systems, to all of our nato allies, golf partners, taiwan, singapore, others. On the foreign relations committee I sign off on our military sales.
▶ 0:50:26Sen. Shaheen: Recently I reviewed the proposal for air to air missile sales that will take seven years to deliver. Clearly we can't continue to operate in this way I think several of you pointed out that in order to be successful we don't just need a cross agency collaboration, we also need to get the private sector involved
▶ 0:50:58Sen. Shaheen: In this. Clearly, one of the big challenges is the defense industrial base and their inability to produce. We have not given them the budget uncertainty they need.
▶ 0:51:21Sen. Shaheen: One of the things that we raise in a previous hearing and the fact that dod is not tracking what the impact is with tariffs on increasing costs for production. Could anybody speak to what the challenges are in a way that would allow us to make better decisions?
▶ 0:51:49Dr. Greenwalt: That hit a lot of companies very hard. The third, fourth, fifth tears, a lot of that is commercial and how the impact sources supply and increased costs throughout the system. That is when we use foreign imports.
▶ 0:52:20Dr. Greenwalt: They should be under the federal regulations exempt from taxes. There is still that risk based on a memorandum of understanding between the countries. Congress could actually ensure and clarify that could be done to ensure those type of tariffs have impacted on anything we happen to be buying.
▶ 0:52:50Sen. Shaheen: Do either of you have views on that?
▶ 0:52:53Mr. Webster: First of all, I could sympathize a little bit with a department of defense. Once that settles out, data will be able to be collected. That is our challenge. Let me share a couple of data points we have confirmed if you will.
▶ 0:53:17Mr. Webster: Prices have gone up over two months in response of these duties, they have risen to roughly twice world prices. The request benchmark for that metal has doubled since november reflecting the fact that more than half of U.S. demand has imports to canada.
▶ 0:53:41Mr. Webster: Companies are not only reporting times, also expected higher input costs and increase sales prices and employment reductions. It is a firm fixed contract, as you know with the supply chain in the small mom and pop companies, they would suffer.
▶ 0:54:04Dr. Saum-Manning: I would say rand, all we do is study. This sounds like a really interesting study we could do to look at the cascading effects of tariffs. It so quickly happening. I want to venture sort of a response to that right now. It is something worth studying really quickly.
▶ 0:54:27Sen. Shaheen: That would be very helpful. Senator fischer.
▶ 0:54:34Sen. Fischer: Thank you. You said you study, I appreciate that and we earlier talked about the report that came out in 2024. It highlighted a number of insufficient authorities and inefficiencies within the departments process.
▶ 0:55:03Sen. Fischer: The organization providing recommendations. You know of they have followed up on any of the recommendations or the status of that?
▶ 0:55:14Dr. Saum-Manning: I don't know if they have followed up but I have seen them in the recent executive orders. That is why my assumption remains as challenges.
▶ 0:55:27Sen. Fischer: With regard to executive order, do you have any suggestions on which areas would be most right for improvement?
▶ 0:55:41Dr. Saum-Manning: I think looking at the manpower restraints, training, where it is being held up or where it needs to be doubled down, looking at partner prioritization is a another one. Figuring out where we prioritize the system and this one-size-fits-all process.
▶ 0:56:02Dr. Saum-Manning: How do you get the dod having a role in understanding what the criteria are and letting it lead the prioritization of framework and process.
▶ 0:56:19Sen. Fischer: The international -- there are methods in place for companies to obtain exemptions from this process which I believe is cumbersome to support our allies. It is not always clear whether certain programs are even eligible for those exemptions.
▶ 0:56:44Sen. Fischer: That means interested companies are forced to perform that extra due diligence and it might end up being fruitless exercise if the program turns out to be ineligible for an exemption. While many larger contractors have absorbed these small businesses have a harder time doing that.
▶ 0:57:09Sen. Fischer: How could the united states government work to make it clear whether new contracts would fall under ita exemptions?
▶ 0:57:21Dr. Greenwalt: That is one of the really difficulties. New companies trying to understand whether technology is classified. What happens is a lot of these companies go through incredible amounts of legal costs. Many of them come to the conclusion with some of our best technology in the united states that they want to do everything they can.
▶ 0:57:53Dr. Greenwalt: That impacts negatively on our innovation base and on these companies doing business with the government. I think there is a need to be clear, a need to provide better guidance. Frankly we start with some of our closest allies we have to try to create a freer trade, a freer zone.
▶ 0:58:21Dr. Greenwalt: Even that exemption is very, very limited. A broader exemption, clear guidance to industry on what can and cannot be exported would be helpful.
▶ 0:58:36Sen. Fischer: Do you have other suggestions on what we could do to make these more accessible to make these more accessible to the smaller businesses?
▶ 0:58:43Dr. Greenwalt: The key thing would be to have greater transparency in the system and a greater ability for these companies to get this question answered a lot faster. It takes potentially a year or more to go through such a process. It is just not worth it or them.
▶ 0:59:06Sen. Fischer: Do you have anything to add on either of those questions?
▶ 0:59:10Mr. Webster: Legally the costs are huge. I advise they have on staff that could advise them.
▶ 0:59:21Chair Wicker: Before I recognize senator reed, let me clear something up. Dr. saum-manning, I put words in your mouth. And looking at your testimony I see the conclusions expressed are the authors alone. You made that clear. I'm now making it clear. I noticed also Dr.
▶ 0:59:45Chair Wicker: Greenwalt expressed in this testimony are those of the author. Whom do you speak for?
▶ 0:59:57Mr. Webster: I speak for the chamber of commerce and myself.
▶ 1:00:02Chair Wicker: Glad to clear that up.
▶ 1:00:08Sen. Reed: Thank you very much and thank you for the testimony. You made it clear in your opening remarks already that the workforce of the project and dod is not adequate, now we are seeing incentives for early retirement across-the-board reductions to meet a number.
▶ 1:00:38Sen. Reed: Could you comment on what is happening with the workforce and will it be extremely detrimental going forward?
▶ 1:00:46Mr. Webster: It will be extremely detrimental. If you have a contract close to award get it awarded. That 30% gap will get worse. I'm advising eight senior executives in the state department and nassau, they are 50 years old and taking early outs.
▶ 1:01:12Mr. Webster: Anyone who is a senior executive, career official is looking most likely to get out. You will have the knowledge gap, mentor gap, you will have a recruitment challenge you will have a retention challenge. That is why we need to exploit automation and think differently about these processes and the people are just not going to be there.
▶ 1:01:45Sen. Reed: That is a very thoughtful answer sing to response. We do have to think about automation but it will take us several years even on the fast pace with some of these persons. Do you have any views on this workforce program?
▶ 1:02:04Dr. Saum-Manning: I know rand studies security operation with the workforce. I've been working on this for years. I myself was not involved in those studies. The security cooperation workforce, offices, the members thereof could struggle to get the right training.
▶ 1:02:25Dr. Saum-Manning: Those positions within the chains of command are not particularly valued in terms of on their promotions. This kind of a skill set is not necessarily valued as much as others. They struggled to get people in their to the high-end kind of personnel they would need to do such a complex job.
▶ 1:02:51Dr. Saum-Manning: Making sure this kind of role is valued I think could go a long way in recruiting the top-tier talent that is needed.
▶ 1:03:00Sen. Reed: Any comments or thoughts?
▶ 1:03:03Dr. Greenwalt: The department had a tool called the workforce development fund back about 10 years ago. Unfortunately congress change that authority and made it more difficult to use. That would've been a helpful tool to resurrect the way it was funded. As the workforce declines, a couple of options. You could do less. The other is you could stretch things out.
▶ 1:03:34Dr. Greenwalt: You could remove the requirements that you have. More than likely fms will put the line and those cap -- will stretch out.
▶ 1:03:52Sen. Reed: I believe you are aware of this. They made a recommendation to facilitate programs of record. Could you explain non-programs of record and whether or not we should go ahead and encourage the establishment of some kind of program?
▶ 1:04:16Dr. Greenwalt: A program of record is something you fund every year. A ship, tank, aircraft, something like that. These are things you are buying every year. A non-of record is a new small business or silicon valley term. Creates a capability that the department hasn't yet bought.
▶ 1:04:45Dr. Greenwalt: You could essentially take that and able to use. That will help the department of defense testing and it will help the industrial base. Necessarily get the same type of attention because those contracting officers are extremely busy doing other things and even further down the line.
▶ 1:05:09Sen. Reed: Thank you for your excellent testimony.
▶ 1:05:12Chair Wicker: I have a bill called the forged act based on restoring freedoms. Have you looked at that and does that attempts to answer some of the questions you just raised and the response to senator reed?
▶ 1:05:28Dr. Greenwalt: I have. There are some provisions in the bill that would try to address some of these ways of getting new types of technologies out into the field faster with not only the U.S. government but our allies.
▶ 1:05:52Sen. Rounds: Very interesting discussion today. Thinking out loud to begin with what the thought process was before listening to all three of you that I thought were challenges for military sales.
▶ 1:06:08Sen. Rounds: We have been using fms more as an opportunity to incentivize some of our near allies or individual countries out there that wanted our weapon systems to change policies that we did not like that were 20 doubt -- that were separate from what our policies were. It is not even so much that has been the primary reason we are having more military sales.
▶ 1:06:39Sen. Rounds: Internally our system is not set up and focused on value of fms to our own well-being. I just want to begin by asking you a question, do you have any data with regard to U.S. companies that are in the military industrial base portion of our economy, how much might they have lost in terms of opportunities for sales?
▶ 1:07:09Sen. Rounds: What kind of loss in terms of opportunities that we haven't been able to take advantage of.
▶ 1:07:13Mr. Webster: I do not have data specific to opportunities lost. For our prime contractors on average, 70% of the funding comes from this body here and 30% on average comes from international sales.
▶ 1:07:35Mr. Webster: The european union, nato, europe on average annually 60% of their military acquisitions are with companies. We expect if on shoring in europe is where they decided to go and they find the money to onshore some production, that 60% annual number will diminish a bit.
▶ 1:08:01Mr. Webster: That is assuming they actually secure the money, pour concrete, and start on shoring production. 60% of european acquisitions from our contractors.
▶ 1:08:19Sen. Rounds: I would also assume given the delays some of our contractors had was it was a supply chain issue as much as anything else. If you are prioritized supply chain versus one or two items, where do supply chain issue stand in terms of the delays we have and I begin with Dr. greenwalt?
▶ 1:08:44Dr. Greenwalt: Uncertainty of decision, that is up there, supply chain, companies will make decisions about supply chain and countries no what they will be able to buy.
▶ 1:09:03Mr. Webster: The supply chain criticality is huge. We have been operating -- operating for decades. It is going to take a lot of deliberate analysis and funding and attention to the second and third tier suppliers, some as small as 18 people that have been in business for 30 years doing one thing exquisitely and they are not prepared to pour
▶ 1:09:33Mr. Webster: Concrete to double production of that critical proponent unless we take attention to the matter and help them get there.
▶ 1:09:42Sen. Rounds: Would you care to share as well?
▶ 1:09:43Dr. Saum-Manning: My answer is a little bit of a punt. We tried to study that and we relied heavily on their data. They struggled to get this data beyond their own. It is difficult to get information on the supply chain for example. I go back to this, the idea of a data czar that is able to go in and access this information so they can understand where these points truly live.
▶ 1:10:13Sen. Rounds: Mr. webster, looking at fms, would mandating that fms demand be factored into the total munitions requirement, without improve the management of weapons production of dod?
▶ 1:10:32Mr. Webster: Challenge with international sales whether accomplished via foreign military sales or direct commercial sales, the challenge is trying to understand or predict when a nation will actually sign the contract or agreement. There's a lot of uncertainty there. Unlike appropriations program authorization here in the united states. It is helpful but it is unpredictable.
▶ 1:11:04Sen. Rounds: Thank you.
▶ 1:11:07Sen. Kaine: I really appreciate the testimony. This has been a very productive hearing. I was struck by what you said in your opening statement. One of our principal asymmetric systems in terms of our security is our allies. We put them through this long, arduous process.
▶ 1:11:34Sen. Kaine: There should be I don't know if you would call it an exemption, process, or something so we are not -- so we could have greater cooperation with our allies, is that a fair interpretation?
▶ 1:11:49Dr. Greenwalt: I would even call it an easy pass lane.
▶ 1:11:54Sen. King: As I travel and meet with security people in other countries. We are missing an innovation multiplier by not working with our allies, countries like japan, australia, europe, germany, all have really and scientists working on innovative areas and instead of having innovation be siloed, it has always occurred to me it would be much more of a multiplier if we could work more closely and
▶ 1:12:26Sen. King: Have better cooperation with the countries that are aligned with us. Is that a fair observation?
▶ 1:12:30Dr. Greenwalt: We are a country of 340 million. Our allies together, the eu, nato, we are close to the chinese population.
▶ 1:12:55Sen. King: We are squandering that asset by siloing innovation.
▶ 1:13:01Dr. Greenwalt: The number of engineers working together would be critical in the future. We are all working on these things separately.
▶ 1:13:12Sen. King: I have a visual aid in terms of the process. I will not burden the committee but this is the foreign military sales manual. 642 pages. To me, this summarizes in many ways the problem of the process itself, which has impeded our ability to work with our allies.
▶ 1:13:43Sen. King: It has been mentioned several times about a data czar or something like that. One of my principles of management is you need one throat to choke. There's nobody in this process that is responsible for the process. You have a state department, defense department, other agencies involved. We should talk about putting somebody in charge who could be held accountable. You suggested that in your testimony, is that something we should be thinking about?
▶ 1:14:14Dr. Saum-Manning: Yes. That is really what our report focuses on. Dsea has a responsibility to wrangle all of the cats and dogs . They lacked the authorities and enforcement ability, they lacked transparency to get to the crucial chokepoints of the system. Providing at least some sort of enforcement accountability authorities would help them be would help them do this job better.
▶ 1:14:45Sen. King: Winston churchill said you should never have responsibility without authority. That is what you are talking about. I had to step out a bit. The other thing that needs more attention is itar. As I have talked to people in other countries, scientists, itar is a barrier. We have exemptions with australia and canada. Mr.
▶ 1:15:11Sen. King: Webster, does -- is itar something we should be attending to?
▶ 1:15:21Mr. Webster: It comes back to all three of us recommending a list of countries with preapproved capability to include cooperative r&d that is preapproved.
▶ 1:15:36Sen. King: Scientists need to be able to share back and forth.
▶ 1:15:40Mr. Webster: They do. We have walls that govern the control of data, technology and capability. Those laws require a license of some sort. But to your point, we are moving forward. The aukus exemption paradigm is something that will prove a new way --
▶ 1:16:06Sen. King: An example on how to move forward.
▶ 1:16:07Mr. Webster: That's right. That can be expanded to include allies.
▶ 1:16:12Sen. King: You mentioned a continuing resolution with more money and flexibility might be ok. I would point out that that would be the end of congressional authority. That would be the ultimate application of congress authority to appropriate a huge amount of money to the pentagon and say spend it as you will. I had to make that point.
▶ 1:16:35Dr. Greenwalt: There is a rare report that showed the different types of authorities that are out there for different agencies. The department of defense does not have many of the same authorities and flexibilities that other agencies have. Yes, congress could still essentially have the power of the purse and look over these things but they are other authorities that could be given to d.o.d. That perhaps that of the have not.
▶ 1:17:01Sen. King: As long as it does not usurp congressional authority over the power of the purse. Thank you.
▶ 1:17:08Chair Wicker: Thank you. Senator budd.
▶ 1:17:11Sen. Budd: Thank you all for being here. Thank you for your testimony. Mr. webster, we talked a lot about staffing. Given these issues, are there ways we can utilize artificial intelligence, including automation to improve these processes and speed up implementation for military sales?
▶ 1:17:36Mr. Webster: Absolutely. We have to explore automation to include ai. If you cannot hire people or for them, you ought to be and that is where we need to look. What comes with that is a level of risk, an assumption of a level of risk that historically the system has been unwilling to assume.
▶ 1:17:57Mr. Webster: When you automate and develop those processes and improve those processes, it is a level of risk that the system is historically not used to.
▶ 1:18:10Sen. Budd: Can you be specific?
▶ 1:18:13Mr. Webster: When you automate a system, you are losing human judgment and human touch from developing an fms case, let's say. We authorize -- automate that. You have to be sure that other legal requirements are intact because a human will not be touching it.
▶ 1:18:33Sen. Budd: Thank you. Dr. saum-manning, last year I visited israel and the uae and last month I traveled to taiwan and the philippines. When we visited with them and other allies they implore us to speed up fms. They give us case examples, they used some cases more than a decade for programs for delivery.
▶ 1:19:04Sen. Budd: When china is at the ready. They admit there are quality problems, it is not what they want but they will forgo some of that if they can get it now rather than sometime in the future. What can this committee do? I know other committees are involved. What can this committee do whether through legislation or increased oversight to get our international friends what they need more quickly?
▶ 1:19:31Dr. Saum-Manning: I wish I had the answer to that. I really do. What congress can do is really look at what's out there already with recommendations of so many who have come before me and ask why those have not been implemented yet. What are the barriers, cultural or otherwise, why these recommendations have not taken hold already.
▶ 1:19:54Sen. Budd: Just the top ones, it seems like you have given plenty of recommendations whether it is rand, what are the top ones we should focus on?
▶ 1:20:06Dr. Saum-Manning: The top one in my mind is to give more teeth so they can direct the system, that they have access to the data so they can understand the chokepoints and facilitate those problems. That would be top of my list.
▶ 1:20:22Sen. Budd: I am seeing a theme here.
▶ 1:20:24Dr. Saum-Manning: Yes.
▶ 1:20:25Sen. Budd: Thank you. Mr. webster, we use the phrase industrial base a lot and how we can modernize the base. What aspects of the base do you think we need to fix or improve to speed up fms delivery? You talked earlier about increasing production lines and being willing to pour additional concrete. That is a major investment for these folks. They have a business to run, I get that.
▶ 1:20:56Sen. Budd: Keeping them in mind and their economics, what would you suggest?
▶ 1:21:03Mr. Webster: Part of the problem we have today in equipping allies quickly is we do not stockpile anymore. In 1985 when I started we had stockpile all over the world. It may not have been exactly what the nation needed but it was good enough and we could transfer at speed. We have gone through adjusted time scenario industry just like the commercial sector where we don't have parts stopped. -- stocked.
▶ 1:21:34Mr. Webster: We need to spend money and create stockpiles like we used to have during the cold war. That is issue number one, if I may. The issue of the industrial base, we cannot do everything at this given moment. We have to prioritize what capability is most important to our forces and allied forces and focus on those capability stresses to include their supply chains.
▶ 1:22:02Mr. Webster: We cannot do it all but we can focus on precision fires, air defense, whatever it is that we decide is for our national security and the security of our allies, industrial base, prime, third tier and find out what needs to change, what money needs to be invested, and who will invested to increase the capability.
▶ 1:22:26Sen. Budd: . Thank you. .
▶ 1:22:28Chair Wicker: Mr. webster says we need to resume stockpiling, do you agree?
▶ 1:22:34Dr. Greenwalt: I do. We have various authorities to do that. The staff on is one way to do that. This committee has considered other items in the past. There is a desire to make a guided munitions fun to do that. We have a just in time problem which is essentially we have put off the ability to have a stockpile. We desperately need a stockpile.
▶ 1:23:01Chair Wicker: Thank you. Senator hirono.
▶ 1:23:04Sen. Blumenthal: Thank you --
▶ 1:23:07Sen. Hirono: Thank you. I thank all of the witnesses. There have been many recommendations made over the years how to change the fms process, make it better, faster, etc. These things don't get implemented. Dr. saum-manning just said that one of the ways we can do this is to just give dsca the authority to do their jobs.
▶ 1:23:34Sen. Hirono: Do other two witnesses agreed that that would be one of the ways we can get going and the kind of changes to make to the fms process?
▶ 1:23:47Mr. Webster: When I started we had all the authority we needed and it took leadership. It has been a long time since 1992. Make sure they have the authorities, make sure they have political top covered interests. That is why we support this proposal to create an assistant secretary of defense to collapse international programs into.
▶ 1:24:10Mr. Webster: It needs to be a political appointee who can sit at the table among other assistant secretaries and argue the case and lead the community with authority and power that a political applying the can have -- political appointee can have.
▶ 1:24:26Sen. Hirono: You agree Dr. greenwalt?
▶ 1:24:31Dr. Greenwalt: I believe the leadership has to be elevated above other secretaries.
▶ 1:24:36Sen. Hirono: That seems to be something we can focus our minds on and create that situation. When you start talking about d.o.d. Contracting reform writ large, good luck on that. As senator king brought up, look at the hundreds of pages of requirements that we impose on every single contracting process that we have.
▶ 1:25:02Sen. Hirono: Maybe this is one where we actually do when we have these sales, we make money and maybe we can bring more attention. At a time also with elon musk taking a hatchet to so many departments where we are losing as Mr. webster said, bodies. Others of you have said we are losing knowledge, losing experience.
▶ 1:25:32Sen. Hirono: The kind of cuts being made across the board to so many departments, for example, the weather department. I was told there are more people being let go from that department and only 100 days than in the last 15 years. The loss of some 20 plus years of experience is going on throughout our agencies.
▶ 1:25:58Sen. Hirono: It does not help that the infamous -- that the fms process is undermanned. There is a knowledge gap where we will have a hard time recruiting and retaining the people that we need.
▶ 1:26:12Sen. Hirono: But I would say that if this committee wanted to focus on the kind of changes that enable this process to be much more focused on the suggestions you all made to enable the dsca, I think it would be a good one and I suggest this committee focus on enabling such a process to occur.
▶ 1:26:42Sen. Hirono: Dr. saum-manning, you said that iran could do a study on what the tariff situation could do. Without us doing a study, don't you think the ripple effect would be that it would cause even further delays in the fms process and cost more money? Couldn't you conclude that that is what would happen with all of this uncertainty around tariffs?
▶ 1:27:11Dr. Saum-Manning: I would have to be heavily footnoted to say that but in my own opinion, yes, that sounds like it would be the course.
▶ 1:27:24Sen. Hirono: I would agree. I don't know that we need another study to tell us that these terrorists are not -- that these tariffs are not a good idea. One more very brief question. For Dr. greenwalt and Mr. webster.
▶ 1:27:48Sen. Hirono: As a production capacity of the defense industrial base kept pace with the increased demand of foreign military sales or what can we do very briefly assuming this is a problem? What can we do?
▶ 1:28:02Mr. Webster: Fundamentally I would say in select areas the production capacity has not kept pace. This has been compounded by the situation in ukraine and the U.S. providing capability to ukraine as well as our allies. That stresses our industrial base to resupply us, resupply allies, keep supplying ukraine, help israel. It is very difficult. No, not at pace.
▶ 1:28:27Dr. Greenwalt: It is difficult for the industry to know whether a case israel, if we will actually implement some of these fms. Cases because of that, it is hard to make those investments unless there is a real demand signal in place.
▶ 1:28:45Chair Wicker: Thank you very much. Senator sheehy. Sen,
▶ 1:28:53Sen. Sheehy: Does itar work as currently structured?
▶ 1:29:01Dr. Greenwalt: Yes, itar works for the vast majority of countries that we need to do this with and work with. It works terribly with those countries that are close allies that we need to cooperate with.
▶ 1:29:16Dr. Greenwalt: It is one of those things where we have to differentiate between the u.k.'s, the australias, and perhaps over here on some of the countries we do not have alliances with.
▶ 1:29:32Sen. Sheehy: But the paradigm of itar in the timeline of american first century technology is ancient. Itar is a relic of an era when the U.S. government actually had the best technology in the world and we wanted to make sure other countries would not buy that, acquire it, steal it and get access to the same capability.
▶ 1:29:57Dr. Greenwalt: It still focuses on 1970's technology with the arms export control act being passed.
▶ 1:30:06Sen. Sheehy: With like india, what now -- right now we have in india-pakistan conflict. If india wants to buy a system that is as complex as an american system, will they get an equally capable system from somebody else?
▶ 1:30:23Dr. Greenwalt: I think they will try to do that. If you have seen what poland has done with south korea, then yes, there are alternatives for these systems. It is ironic that the most cutting edge technology whether it is ai, robotics, data analytics, they are not covered by itar. They are covered by the ear.
▶ 1:30:50Sen. Sheehy: Often times those specifications will restrict us from selling -- I used to sell cameras and I could buy a commercial camera at the apple store that would have more credibility than an itar restricted camera because it was on the list 30 years ago and the state department did not want to have the risk of de-listing that.
▶ 1:31:12Sen. Sheehy: We would have a years long delay and a company that has operations in africa and europe could sell that similarly capable system faster than we could. We need a fundamental re-imagination of itar for where we are today. I think we need to make sure that our allies can get equipment from us because they need it from somebody.
▶ 1:31:35Sen. Sheehy: Recently speaking to some mystery defense leaders in the middle east, they need the equipment and if they cannot get it from us, they will buy it from china, russia or europe hopefully, but probably not. What can dsca do specifically, they don't have the authority, but let's say we gave them the authority. How do we turn a round hole in a square peg and make that fit. They are serving two losses that rarely agree.
▶ 1:32:05Sen. Sheehy: How do we square that and make sure that dsca can make that decision and state department does not kill it bureaucratically?
▶ 1:32:14Dr. Saum-Manning: That is a really good question. There is a role for the under secretary of defense policy. I think policy has a role to play as the arbitrator to understand what the priorities are and to better translate them, negotiate between the two. I think they all three have different priorities for good reasons. There is a way to negotiate for all three of them. Policy has an important role to play in that.
▶ 1:32:43Sen. Sheehy: Should more authority be given to the in country military liaison that is working with the customer government?
▶ 1:32:52Dr. Saum-Manning: They have the authorities they need. I think sometimes there is confusion between title 22 and title x authorities. I think a little bit more endpoint or maybe more training from the state department so they can better articulate some of the authorities. Some of it comes down to training, not that they don't have the authority.
▶ 1:33:15Sen. Sheehy: We are in an era of great power competition and we will depend on allies to be able to hold the line in places where we cannot or will not. They need to have the tools to do this job. This is a problem we have to solve and it will start with this committee. Thank you for your testimony today.
▶ 1:33:34Chair Wicker: I think you are onto something senator sheehy. Senator kaine.
▶ 1:33:41Sen. Kaine: Thank you. This has been a good hearing. I agree with my colleagues. I want to ask about a topic that is slightly adjacent to foreign military sales. I am a little bit worried if we make all the reforms we need to in the foreign military sales process we will still have workforce and supply chain challenges that will not enable us to maintain the production pace that we want to.
▶ 1:34:10Sen. Kaine: I am grappling with this question of when military sales is one way to help allied nations or partner nations defend themselves and defend the values we share, but there are other ways to do that. One is inspiring or domestic production in those nations of their own military capacities, just using ukraine as an example. They have been using heavily 155 rounds. They did not have much capacity to produce at the beginning of the war. They have grown their capacity.
▶ 1:34:40Sen. Kaine: I heard that the ukraine defense industry was producing $5 billion worth of material in armaments and now they are $30 billion so they have gone up six fold and they could do more. Related to the fms questions would be, if U.S.
▶ 1:34:56Sen. Kaine: Defense firms want to invest in germany or poland or ukraine or they want to invest in australia to expand the production capacity of weapon systems in those nations or if U.S.
▶ 1:35:15Sen. Kaine: Financial firms that are not necessarily in the defense space but increasingly have shown a willingness to invest in port infrastructure or shipbuilding or other defense industries, if U.S. firms want to invest to accomplish increases in production in other countries, do we have the right legal framework to allow them to do that easily or are there similar obstacles in the way that we should be considering bringing down?
▶ 1:35:44Sen. Kaine: That is the issue I want to ask you about. .
▶ 1:35:49Dr. Greenwalt: Many of those obstacles exist. You should talk to the australians on coproduction. They have been trying to do this for years now. They have all sorts of itar restrictions. Yes, it is very difficult to move overseas. I think there is a tsunami of potential allied defense expenditures coming if they actually do increase their defense expenditures.
▶ 1:36:18Dr. Greenwalt: That is about $600 billion per year which is twice what we spend on production in r&d. I don't know what they will do with that or how they will spend it. They may not spend it wisely. That is a potential huge market and it would be better for us to have those sales than have them create their own capabilities to compete with us in the future.
▶ 1:36:40Sen. Kaine: Others who want to offer thoughts on my question?
▶ 1:36:43Mr. Webster: It is important to recognize that our industries are global industries and global supply chains so they know how to figure that out. F-35 is an excellent example. We had partner contributions. That was part of the deal of being a partner was to have industrial participation.
▶ 1:37:04Mr. Webster: Our industries where it is in their interest to seek technology they cannot get here for a good price, where they can produce -- reduce production cost and where the government will allow it, will go offshore. So the tools are there to accomplish what you envision. It is just a question of how is that incentivized.
▶ 1:37:26Sen. Kaine: Dr. saum-manning.
▶ 1:37:28Dr. Saum-Manning: I was not part of the study but we just did a study on third-party suppliers, one of my colleagues and her team looked at this and tried to think about how to do this responsibly, try to find suppliers that are within our strategic interests. That is some of the criteria that you think about when you want to invest, what are allies, when we cannot supply it, how they make their decisions elsewhere.
▶ 1:37:55Sen. Kaine: I will take a look at that. I want to say in the last 45 seconds on tariffs, I was just in germany and ukraine and I heard over and over again, we are cooperating with you. There is more we can do together. Tariffs are in the way. The german example was the most striking. A new government in germany with a mandate to improve the economy which has been in the doldrums since 2019. That is a mandate. The government is very pro-U.S., pro-transatlantic.
▶ 1:38:27Sen. Kaine: They are a pro-U.S. military. More U.S. troops in germany than any other nation outside of the U.S.. They said tariffs are getting in the way of the primary goal of this new government which is to improve the german economy. If that is the case, I know you expect this to be great defense partner but there is no such thing as a silo where half the relationship is really bad but on the other half, we will be completely cooperative. We need to sort out this tariff madness. Using tariffs against adversaries, great.
▶ 1:39:00Sen. Kaine: In particular instances on particular trade barriers, of course. Using tariffs willy-nilly against allies is very destructive in the national security space and the american economy. That was the message I heard from our alleys -- allies. I yield back.
▶ 1:39:17Chair Wicker: Thank you for that. Senator scott.
▶ 1:39:20Sen. Scott: Thank you. I recently went to denmark, finland and estonia. Similar to senator kaine you get asked questions about trump's position on tariffs and nato. Here's how I explained it. I think trump will try to make two things happen.
▶ 1:39:47Sen. Scott: If you are going to be an ally of the U.S., you will build your own military. We will not be your first line of defense. If you are not willing to defend your country, if you are not willing to serve, america will not be your first line. Number two, if you want to settle in our country, the best market in the world, whether it is tariffs or other barriers, those barriers are going down.
▶ 1:40:10Sen. Scott: We have watched for decades where this country has allowed other countries to build in our country and they have put up barriers, tariffs, all sorts of stuff where you cannot even sell which makes zero cents. I'm fine with everybody else is economy doing well but I'm primarily responsible for american workers. One thing we talked about when I spoke with military leaders and political leaders is that they are frustrated that they cannot get an answer on foreign military sales. They have two complaints.
▶ 1:40:41Sen. Scott: One, why does it take so long, why can you get an answer, what is the process, why is it a debacle? Number two, why cant your defense contractors make things on time? What they said is we are spending. For whatever reason whether it is putin invading ukraine, they are spending the money. But they cannot get approvals and they cannot get -- suppliers are not on time.
▶ 1:41:12Sen. Scott: Another thing they brought up is the fact that we have suppliers that we pay for them to develop technology and the manufacturer owns the technology so nobody else can do it, which makes no sense in the world. Can you talk about why cannot we have a checklist like we do with any business, here is what has to get done, here's the timeframe. Some of the stuff should be simple. We should be able to do it in days rather than years.
▶ 1:41:44Dr. Greenwalt: The last time I was in the pentagon which was 20 years ago, we worked together and the administration was trying to do that, trying to figure out how to create a list of what we can sell to our allies and pre-approve it. This was a process we have all talked about. Unfortunately that process went forward.
▶ 1:42:13Dr. Greenwalt: It was a great idea 20 years ago. The idea of getting away from this transactional to say this is the u.k., here is the list, let's be done with it. Unfortunately that type of thinking never really took hold and it was just back to transactional. Every time we get a request, it takes just as long to go through the process.
▶ 1:42:43Sen. Scott: So the system was developed --
▶ 1:42:48Mr. Webster: The system was developed long ago for a case-by-case review. Every individual request by every individual country is reviewed on a case-by-case basis whether it is a direct commercial sale license activity or a foreign military sales bilateral agreement. That is why we are seeing transformation needs to occur.
▶ 1:43:09Mr. Webster: There needs to be a positive list of countries, allies that are preapproved for specific capabilities to remove ambiguity and remove this case-by-case process of review. That is really what we need. What was mentioned was secretary gates established the outer sic to develop anticipatory policy.
▶ 1:43:32Mr. Webster: The first and only policy developed was for ua as systems and state department would not partner on anticipatory policy because under title 22 they had the authority to review each transfer on a case-by-case business and they did not want to tie their hands on their authorities and their business. . So it failed but we need to fix that.
▶ 1:43:59Sen. Scott: Has anybody put anything out? Is there any outside group that has put something out that said this is the way you should do it , that we should rally behind?
▶ 1:44:12Mr. Webster: I am not aware of anything published but we have all talked about it with previous administrations and we have talked about it with the new administration. We can help the administration develop that process. It will take approval by state and committees as well as this committee to agree to such a list to act upon.
▶ 1:44:32Sen. Scott: Thank you.
▶ 1:44:35Chair Wicker: Thank you. Senator warren.
▶ 1:44:40Sen. Warren: Thank you Mr. chairman. Being gleeful on the battlefield means being scrappy -- being lethal on the battlefield means being scrappy. We were told by experts that ukraine would only being a little -- only be able to hold out for a few weeks but the ukrainians have been incredibly innovative especially with the deployment of drones to keep russian forces at bay.
▶ 1:45:11Sen. Warren: The U.S. military may not be as agile. Soldiers are not allowed to repair many of their own weapons. D.o.d. Spends billions of dollars buying all sorts of equipment but contractors put restrictions on who can maintain systems and who can produce spare parts. Contractors earn billions but service members are not allowed to fix their own weapons when they break, even in the middle of life and death missions.
▶ 1:45:42Sen. Warren: That is the opposite of scrappy. Dr. saum-manning, you are an expert on building military capacity. How important is it for readiness for service members just to be able to repair their own weapons?
▶ 1:45:57Dr. Saum-Manning: They are on the front lines. When it comes to life and death decisions, I think you overlooked policy. That is what I would do on the battlefield. This is my personal opinion.
▶ 1:46:10Sen. Warren: I take it you think the right to repair is important to being able to do your job.
▶ 1:46:16Dr. Saum-Manning: I do think it is important. That said, you have to know how to do it. I want to make sure they actually know what they are doing.
▶ 1:46:24Sen. Warren: The problem is that too often when U.S. military goes to contractors, they are told when something is broken they will have to wait months for critical parts. In just one case that we have, the army discovered that instead of waiting months, they can actually just use a 3d printer to print the safety clip they needed in less than an hour and 41 100th of the cost being charged -- and for one 100th of
▶ 1:47:00Sen. Warren: The cost being charged by the contractor. The trump administration took a stand to make sure that the army can be just as scrappy. New contracts to include a right to repair their own equipment and also going back to review old contracts to add similar protections. I want to give a shout to the new secretary of the army dan driscoll for pushing this initiative. Dr.
▶ 1:47:25Sen. Warren: Saum-manning, would adopting this policy across military services enhance innovation and help reduce costs?
▶ 1:47:35Dr. Saum-Manning: As all rand researchers say, we need to study that. When we were doing our study, the army was in the midst of their transportation -- transformation. It is exciting that they are innovating. We are watching it. It is a great experiment to see if it happens and to see if we can apply these lessons elsewhere.
▶ 1:48:00Sen. Warren: I want to argue on right to repair that it can also be used to help strengthen american allied forces as well. When our closest allies buy U.S. weapons, it can help enhance their capabilities, help them work better with our troops. We really like all of that. It can take missions off our plate and support U.S. jobs.
▶ 1:48:26Sen. Warren: Our allies and partners have a lot of other companies that they can choose from and they are willing to drive a harder bargain than we are. For example, a canadian task force found that failing to acquire data rights hurt their ability to independently support their own equipment right to repair. And they recommended prioritizing sustainability and competition.
▶ 1:48:51Sen. Warren: The bottom line, lockheed martin's higher repair costs meant that lockheed martin was not competitive for the contract. Dr. saum-manning, is the best outcome for us not only that we can repair own equipment but also if our allies who are buying from U.S. contractors can repair their weapons in the field and have those weapons made in america?
▶ 1:49:19Dr. Saum-Manning: We have not studied that. If we are part of that process and we can help train, equip and sustain our partners to sustain the equipment we give them, that is a priority that can be made prior to getting on the battlefield.
▶ 1:49:38Sen. Warren: Secretary driscoll has taken a necessary step but we need all of the services and d.o.d. To prioritize lethality. That means commanders in the field should never have to beg a contractor to repair a plane that the air force owns or that soldiers could fix themselves.
▶ 1:50:02Sen. Warren: Our navy should never have to wonder if an ally will not show up because they are waiting months for a contractor to fix a fuel gauge. I look forward to working with my colleagues to make sure that we are not letting bad contracting practices limit our soldiers ability to win on the battlefield. Thank you.
▶ 1:50:23Chair Wicker: Thank you senator warren. Before we close, and really for the benefit of our stenographer who does a wonderful job, Dr. greenwalt and Mr. webster, you refer to the outer sic and I am told that stands for arms transfer technology review senior steering group.
▶ 1:50:55Chair Wicker: Is that correct?
▶ 1:50:56Mr. Webster: That is correct.
▶ 1:50:58Chair Wicker: That will save a little time there. As far as we know, that group does not exist anymore. It was an effort that was abandoned, is that right?
▶ 1:51:10Dr. Greenwalt: I believe the defense technology security agency website still has it. Whether it is still active, I do not know.
▶ 1:51:21Chair Wicker: We will look into that. Thank you very much. Unless there are further questions about this hearing is closed. Thank you very much.