Mr. Chairman, Senator McCain, members of the committee:
Thank you for the opportunity to provide an overview of challenges facing the Department of Defense and some of my priorities for the coming year. In so doing, I am most mindful that the new administration has only been in place for a few days and new or changing policies will likely arise in the weeks and months ahead. Later this spring, I will present President Obama’s defense budget, and, at that time, will be better equipped to discuss the details of his vision for the Department.
On a personal note, I want to thank many of you for your very kind farewell remarks at my last hearing. I assure you you are no more surprised to see me back than I am. In the months ahead, I may need to re-read some of those kind comments to remind myself of the warm atmosphere up here as I was departing. Seriously, I am humbled by President Obama’s faith in me, and deeply honored to continue to lead the United States military. I thank the committee for your confidence in my leadership and your enduring, steadfast support of our military.
My submitted testimony covers a range of challenges facing the Department: North Korea, Iran, and Proliferation; Russia; China; Wounded Warrior Care; Ground Force Expansion and Stress on the Force; National Guard; Nuclear Stewardship; Defending Space and Cyberspace; and Wartime Procurement.
But for the next few minutes I would like to focus on Afghanistan, Iraq, and defense acquisition.
There is little doubt that our greatest military challenge right now is Afghanistan. As you know, the United States has focused more on Central Asia in recent months. President Obama has made it clear that the Afghanistan theater should be our top overseas military priority.
There are more than forty nations, hundreds of NGOs, universities, development banks, the United Nations, the European Union, NATO, and more, all involved in Afghanistan – all working to help a nation beset by crushing poverty, a thriving drug trade fueling corruption, a ruthless and resilient insurgency, and violent extremists of many stripes, not the least of which is Al Qaeda. Coordination of these international efforts has been difficult, to say the least.
Based on our past experience in Afghanistan – and applicable lessons from Iraq – there are assessments underway that should provide an integrated way forward to achieve our goals.
As in Iraq, there is no purely military solution in Afghanistan. But it is also clear that we have not had enough troops to provide a baseline level of security in some of the most dangerous areas – a vacuum that increasingly has been filled by the Taliban. And that is why the United States is considering an increase in our military presence, in conjunction with a dramatic increase in the size of the Afghan security forces – and also pressing forward on issues like improving civil-military coordination and focusing efforts on the district level.
While this will undoubtedly be a long and difficult fight, we can attain what I believe should be among our strategic objectives: above all, an Afghan people who do not provide a safe haven for Al Qaeda, who reject the rule of the Taliban, and support the legitimate government that they elected and in which they have a stake.
Of course, it is impossible to disaggregate Afghanistan and Pakistan, given the porous border between them. Pakistan is a friend and partner, and it is necessary for us to stay engaged – and help wherever we can. I can assure you that I continue to watch the situation in Pakistan closely.
As you know, the Status of Forces agreement between the United States and Iraq went into effect on January 1st. The agreement calls for U.S. combat troops to be out of the Iraqi cities by the end of June, and all troops out of Iraq by the end of 2011, at the latest. It balances the interests of both countries as we see the emergence of a sovereign Iraq in full control of its territory. Provincial elections in just a few days are another sign of progress.
The SOFA marks an important step forward in the orderly drawdown of the American presence. It is a watershed – a firm indication that American military involvement in Iraq is winding down. Even so, I would offer a few words of caution. Though the violence has remained low, there is still the potential for setbacks – and there may be hard days ahead for our troops.
As our military presence decreases over time, we should still expect to be involved in Iraq on some level for many years to come – assuming a sovereign Iraq continues to seek our partnership. The stability of Iraq remains crucial to the future of the Middle East, a region that multiple presidents of both political parties have considered vital to the national security of the United States.
As I focused on the wars these past two years, I ended up toward the end of last year punting a number of procurement decisions that I believed would be more appropriately handled by my successor and a new administration. As luck would have it, I am now the receiver of those punts – and in this game there are no fair catches.
Chief among institutional challenges facing the Department is acquisitions – broadly speaking, how we acquire goods and services and manage the taxpayers’ money. There are a host of issues that have led us to where we are, starting with long-standing systemic problems:
· Entrenched attitudes throughout the government are particularly pronounced in the area of acquisition: a risk-averse culture, a litigious process, parochial interests, excessive and changing requirements, budget churn and instability, and sometimes adversarial relationships within the Department of Defense and between Defense and other parts of the government.
· At the same time, acquisition priorities have changed from defense secretary to defense secretary, administration to administration, and congress to congress – making any sort of long-term procurement strategy on which we can accurately base costs next to impossible.
· Add to all of this the difficulty in bringing in qualified senior acquisition officials. Over the past eight years, for example, the Department of Defense has operated with an average percentage of vacancies in the key acquisition positions ranging from 13 percent in the Army to 43 percent in the Air Force.
Thus the situation we face today, where a small set of expensive weapons programs has had repeated – and unacceptable – problems with requirements, schedule, cost, and performance. The list spans the services.
Since the end of World War II, there have been nearly 130 studies on these problems – to little avail. While there is no silver bullet, I do believe we can make headway, and we have already begun addressing these issues:
· First, I believe that the FY 2010 budget must make hard choices. Any necessary changes should avoid across-the-board adjustments, which inefficiently extend all programs. We must have the courage to make hard choices.
· We have begun to purchase systems at more efficient rates for the production lines. I believe we can combine budget stability and order rates that take advantage of economies of scale to lower costs.
· We will pursue greater quantities of systems that represent the “75 percent” solution instead of smaller quantities of “99 percent,” exquisite systems.
· While the military’s operations have become very joint – and impressively so – budget and procurement decisions remain overwhelmingly service-centric. To address a given risk, we may have to invest more in the future-oriented program of one service and less in that of another – particularly when both programs were conceived with the same threat in mind.
· We must freeze requirements on programs at contract award and write contracts that incentivize proper behavior.
· I feel that many programs that cost more than anticipated are built on an inadequate initial foundation. I believe the Department should seek increased competition, use of prototypes – including competitive prototyping – and ensure technology maturity so that our programs are ready for the next phases of development.
· And finally, we must restore the Department’s acquisition team. I look forward to working with you and the rest of Congress to establish a necessary consensus on the need to have adequate personnel capacity in all elements of the acquisition process.
This is no small task, and will require much work in the months ahead, which brings me to a few final thoughts.
I have spent the better part of the last two years focused on the wars we are fighting today, and making sure that the Pentagon is doing everything possible to ensure that America’s fighting men and women are supported in battle and properly cared for when they come home.
Efforts to put the bureaucracy on a war footing have, in my view, revealed underlying flaws in the institutional priorities, cultural preferences, and reward structures of America’s defense establishment – a set of institutions largely arranged to plan for future wars, to prepare for a short war, but not to wage a protracted war. The challenge we face is how well we can institutionalize the irregular capabilities gained and means to support troops in the theater that have been, for the most part, developed ad hoc and funded outside the base budget.
This requires that we close the yawning gap between the way the defense establishment supports current operations and the way it prepares for future conventional threats. Our wartime needs must have a home and enthusiastic constituencies in the regular budgeting and procurement process. Our procurement and preparation for conventional scenarios must, in turn, be driven more by the actual capabilities of potential adversaries, and less by what is technologically feasible given unlimited time and resources.
As I mentioned, President Obama will present his budget later this spring. One thing we have known for many months is that the spigot of defense funding that opened on 9/11 is closing. With two major campaigns ongoing, the economic crisis and resulting budget pressures will force hard choices on this department.
But for all the difficulties we face, I believe this moment also presents an opportunity – one of those rare chances to match virtue to necessity. To critically and ruthlessly separate appetites from real requirements – those things that are desirable in a perfect world from those things that are truly needed in light of the threats America faces and the missions we are likely to undertake in the years ahead.
As I’ve said before, we will not be able to “do everything, buy everything.” And, while we have all spoken at length about these issues, I believe now is the time to take action. I promise you that as long as I remain in this post, I will focus on creating a unified defense strategy that determines our budget priorities. This, after all, is about more than just dollars: It goes to the heart of our national security.
I will need help from the other stakeholders – from industry, and from you, the members of Congress. It is one thing to speak broadly about the need for budget discipline and acquisition reform. It is quite another to make tough choices about specific weapons systems and defense priorities based solely on national interests. And then to stick to those decisions over time. The President and I need your help as all of us together do what is best for America as a whole in making those decisions.
I have no illusions that all of this will be solved while I am at the Pentagon. Indeed, even if I am somewhat successful on the institutional side, the benefits of these changes may not be visible for years. My hope, however, is to draw a line and from here forward make systemic progress – to put the Department on a glide path for future success.
I look forward to working with each of you to gain your insight and your recommendations along the way. Once more, I thank you for all you’ve done to support the Department of Defense and the men and women wearing our nation’s uniform.
I look forward to your questions.