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Electronic Commerce Conference
Remarks as Delivered by Delivery by Deputy Secretary of Defense Rudy de Leon, The Pentagon, Washington, D.C. , Tuesday, June 20, 2000

Thank you, Stan [Soloway, Deputy Under Secretary of Defense for Acquisition Reform], for your kind words and the excellent work you have done leading our reform efforts. Joe Cleveland [Chief Information Officer, Lockheed Martin], we look forward to your remarks. Jack Gansler [Under Secretary of Defense for Acquisition, Technology, and Logistics], leaders from business and government, distinguished guests, ladies and gentlemen.

Winston Churchill once offered this sage advice, "Never try to walk up a wall that’s leaning toward you. Never try to kiss a person that’s leaning away from you. And never speak to a group that knows more about a subject than you do." In addressing you, I realize I may be violating that last caution. However, I will take that risk in order express my belief in the importance of the work you have done over the past year; work that will have a significant impact on the reform and operation of this department and our military forces.

Today we operate in an environment far different from the one we faced just a few years ago. In 1989, as the Cold War ended and the global security landscape changed, Time Magazine chose Soviet President Mikhail Gorbachev as its Man of the Year, calling him the year’s most consequential person. A decade later, in 1999, the world was changing in a very different way, and Time’s editors selected e-commerce pioneer Jeff Bezos of Amazon.com, demonstrating not only the rise of the Internet, but the increasing influence of commerce and information on the state of the world.

And while the last few months have been turbulent for the commercial e-commerce world, as anyone in business or with a Thrift Savings Plan account, can tell you, whatever the temporary fluctuations in the market, we know that information technology has permanently changed how we operate. It is not only making us more efficient, it has made us change the way we think about business. And that is no less true when our business is government.

But in many ways, while the technology is new and the pace of change has accelerated, the work of this conference demonstrates an enduring truth about business and government: When we work together, seeking common solutions, and we allow industry the freedom to innovate, we can change history.

Indeed, to fully understand these changes of the present, we need only look to the examples of the past. I am sure many of you read of the recent opening of the D-Day Museum in New Orleans. Secretary [of Defense William] Cohen was on hand to take part in the ceremonies, honoring the brave men who stormed the beaches to secure our freedom.

But it might surprise you to hear that that the architect of victory at D-Day, General Eisenhower, once said that it was a businessman, who never set foot on Omaha beach, who "won the war for us." Andrew Higgins, a shipbuilder from New Orleans, invented and produced the landing craft that brought our soldiers ashore on D-Day, using innovation to create something that had never existed, filling a need established by our military leaders.

Or consider this. In 1939, at the dawn of the Second World War, the US produced only 800 military aircraft the entire year. But thanks to the inspiration of our leaders, the ingenuity of American business, and the industry of millions of workers, the United States was producing almost 100,000 planes per year by 1944. In both cases, industrial America supplied the resources for America’s victory.

Now, fast forward to the campaign over Kosovo. Unmanned aerial vehicles on patrol, searching out Serbian forces. Satellites peering through heavy clouds to pinpoint targets day and night. Fighter pilots adjusting their missions in transit, hitting targets selected only minutes before. Once again, industry on the homefront supplied the means of victory, but this time, high technology, computers, and information technology played the crucial role.

Indeed, in the modern era, the silicon chip and Internet router are having as profound an effect on warfighting as they are on business and society at large, operating by the same principle we saw in World War II: leaders establishing a goal, industry providing the genius, and our men and women in uniform using the tools we provide to gain victory.

In contrast, however, the Department of Defense, the organizations and agencies that support our military men and women, has not always kept pace. For too long we retained an industrial era outlook in an age of information. In the past few years, we have worked hard to catch up. We have responded to the Revolution in Military Affairs with a Revolution in Business Affairs, a Defense Reform Initiative that is fundamentally transforming the way we do business. Our world-class military deserves, and demands, a world-class support structure.

So we are going to continue consolidating and streamlining entire organizations. We are going to continue competing more functions with the private sector than ever before. While we have been unable to gain authority for additional rounds of base realignment and closure, we are going to continue eliminating excess infrastructure in areas under our control, such as destroying some 8,000 excess buildings. And we are going to continue adopting and adapting the best business practices of the private sector in everything we do.

Few know better than you how much we needed to change, how our every effort was weighed down by reams of paper: travel orders that took more time than the trip itself, warehouses dedicated to regulations and specifications which did nothing but inhibit productivity. It was a way of doing business that was an unnecessary drag on everything we did, frustrating our business partners, and wasting millions of taxpayer dollars that could be better spent on our warriors and their weapons.

So a year ago many of you met here with [former Deputy Secretary of Defense] Dr. [John] Hamre to hasten the day when we cease to be a Department based on and burdened by paper and start modeling ourselves on the very best of the private sector, whose lifeblood is the electron. You agreed to form a partnership to solve common problems, to create solutions not just subcommittees.

In twelve months of cooperative work, you studied four challenges faced by both government and industry: How do we provide incentives for our people to go paperless? How do we ensure the security of our electronic transactions? How do we improve the quality and interoperability of our software? And, finally, how can we best measure our performance? Today, we look forward to hearing the ideas put forward by the working group on each of these important subjects. They will no doubt serve as an important guidepost to the development of e-commerce in the public and private sector.

I would add, though, that while we were studying these issues, the Department of Defense has been moving forward vigorously in our use of information technology with an amazing electronic mall that now sells everything from socks to semiconductors, with some 52 million dollars in sales to date. We have dramatically reduced overhead costs and delivery times for countless DoD agencies, vendors, and customers. We have a government purchase card that is now being used for the vast majority of smaller purchases. We have Central Contractor Registration, allowing businesses to register with all 800 contracting offices at once. And, perhaps most impressive, we have a contracting system that is going to be virtually paper-free next year. No longer the province of futurists, these are today’s reality, and many of you’re here today deserve great credit for our success so far.

Of course, it has been said that, "the toughest thing about success is that you have to keep on being a success." So we look to you to dedicate yourselves anew to continue harnessing the power of the microchip so that our men and women in uniform can get what they need, when they need it, faster, better and cheaper than ever, and to continue ensuring that our information is safer and more secure than ever. Indeed, your mission is nothing less than to help us build a 21st Century Defense Department prepared for 21st Century missions.

Ladies and gentlemen, your efforts have already begun to fundamentally reorient the way the Department of Defense operates. Perhaps equally important, you have begun to reorient the way many within the Department think about how we operate. And therein lies one of the fundamental truths underlying this effort. No matter how carefully we sculpt our reforms, no matter how many directives we sign or declarations we issue, our success depends on the willingness of people, both within and outside the Department, to change; to change not merely their mission statements, but their mindsets.

With all this high technology wizardry, some have asked, "Is there still value in the human element?" Consider this. IBM recently announced a project to build a supercomputer that can simulate the genetic process known as protein folding. This machine will have one million microprocessors, occupy 8,000 cubic feet of space, and handle one thousand trillion operations per second. When completed, it will still require a full year to simulate protein folding, a task that takes the human body a mere one second to accomplish.

In the same way, all of our amazing technological prowess, all of our scientific progress, all of hi-tech power, are useless without the irreplaceable qualities of human ingenuity, ingenuity provided by the minds gathered here today, ingenuity that will guide our transformation in the years ahead. Thank you all very much.