The Department of Defense must meet the challenge of providing America's military with systems, goods, and services in a manner which is better, faster, and cheaper.

To achieve this objective, we must access commercial technology and adopt business practices characteristic of world class suppliers.

But with current budget restrictions, we must also reduce the total cost of acquiring and operating the systems we purchase.

It's critical, then, to maintain a competitive environment and an acquisition process that is attractive to potential industrial partners.

New defense reform initiatives are designed to reengineer and improve our acquisition process.

One such initiative, actually a set of initiatives, is Civil Military Integration, or CMI. The aim of CMI is to enhance our access to world class suppliers by applying best commercial business practices, while removing barriers at all stages of the acquisition process which prevent the Department from accessing commercial technology and products.

In addition, we must incentivize industry to merge their civil and military facilities and practices. Implementation of CMI initiatives will leverage access to leading edge technologies and practices.

The Single Process Initiative, or SPI, has helped us move toward the goals of Civil Military Integration. Through SPI, we can convert existing contracts at a facility to a contractor’s common process. To date, we've converted hundreds of contracts.

SPI has saved DoD nearly $500 million. At the same time, it has promoted industry consolidation, plant modernization, and subcontractor reform.

To eliminate the remaining barriers to Civil Military Integration, DoD is developing a package of reform proposals and initiatives.

This package is designed to improve our ability to reach technology and other providers who currently will not engage with DoD, particularly in the crucial research and development arena.

Removing barriers to commercial technology through CMI is only one initiative targeted at improving the acquisition process.

Another initiative, one that focuses on cost reduction, is designed to reduce the total ownership cost of weapons systems.

Cost As An Independent Variable, or CAIV, is a continuous, user-oriented, overarching acquisition strategy. With this strategy, we trade off performance requirements against affordable costs to maximize value to the warfighter.

But our costs are still too high.

While continuing to attack acquisition costs, we need to reduce logistic support cost , as well. As the Performance Scorecard for Logistics Cost Reduction shows, in 1997 our logistics costs were about $83 billion dollars.

To date, our costs have dropped to approximately $80 billion.

By 2005, we hope to reduce costs to about $66 billion. That’s a 20% reduction from our 1997 costs. We will achieve this reduction by streamlining our infrastructure, reengineering logistics processes, and increasing the reliability and maintainability of systems.

The Department is committed to reducing the cost of delivering support through smart and aggressive process reengineering. Through initiatives such these, we reduce costs and improve our readiness.