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Prepared Statement on the Defense Transformation Act for the 21st Century
Remarks as Prepared for Delivery by Deputy Secretary of Defense Paul Wolfowitz, House Government Reform Committee, Tuesday, May 06, 2003

Chairman Davis and Members of the Committee: When President Bush took office almost two and half years ago, he placed a priority on changing how America’s military does business; he charged the Department of Defense to transform to meet the threats of 21st Century. When September 11th came, it only amplified the fact that, while the world had changed dramatically, certain laws and regulations governing the Department of Defense were vestiges of an earlier, much different, much less immediate era. The American people need and deserve a transformed Defense Department, one that is poised and prepared to defend our national security in this new era, possibly the most dangerous America has ever confronted. A critical part of this transformation is the Defense Transformation Act for the 21st Century. I appreciate the opportunity to discuss with this Committee, focused as it is on reform, the Defense Department’s perspective on this Act.

We have witnessed in Iraq another magnificent effort by our men and women in uniform and their coalition partners; they can claim a great achievement on behalf of freedom—for America and for Iraqis who were victims of a vicious regime. They have freed us from an enormous threat and given an entire people reason to believe that representative government is within their grasp. They performed their missions with incredible courage and skill, and we are enormously proud of them.

Along with those qualities, much of the success we witnessed came from certain transformational changes. Our unparalleled ability to conduct night operations has allowed us to virtually own the night, and the close integration of our forces has resulted in an order of magnitude change in how precise we are in finding and hitting targets from just a decade ago, to name just two dramatic examples.

And as we continue to wage the war against terrorism, it is imperative that we continually take stock of how we can further transform the Department of Defense—because when the world changed so dramatically on September 11th, it was vital that the Department of Defense change dramatically as well. As we have seen so vividly in recent days, lives depend, not just on technology, but on a culture that fosters leadership, flexibility, agility and adaptability.

Why This Legislation

To foster these qualities and bring DoD into the 21st Century, we need legislative help. One of the key areas in which we need your help is in transforming our system of personnel management so that we can gain more flexibility and agility in how we handle the more than 700,000 civilians who provide the Department such vital support—or to deal efficiently with those who don’t. The ability to do so is nothing less than a national security requirement because it goes straight to how well we will be able to defend our country in the years to come.

In truth, this is neither a new nor a partisan issue. No less than three administrations have tried to fix a system that is, by most accounts, seriously broken. In an age when terrorists move information at the speed of an e-mail, money at the speed of a wire transfer and people at the speed of a commercial jet liner, the Defense Department is still bogged down, to a great extent, in the micro-management and bureaucratic processes of the industrial age, when the world has surged ahead into the information age.

The Defense Information Systems Agency, for example, finds it difficult to recruit candidates so critical to this information age—the telecommunications, IT and professional engineering and science candidates who are also so attractive to industry—because of inflexible and time-consuming laws that govern recruiting. When industry can offer the best and brightest jobs on the spot at job fairs, we must compete for these same individuals using a hiring process that can take months. If this system is slow in bringing promising talent on board, it can be equally slow to unload people with proven problems. In one case at the Defense Logistics Agency, it took nine months to fire an employee with previous suspensions and corrective actions who had repeatedly been found sleeping on the job.

Our legislative proposal, the Defense Transformation Act for the 21st Century, would be a big step forward in addressing such obvious shortfalls in the current system. The bill before you will also give the Armed Forces the flexibility to more efficiently react to changing events with the ability to more rapidly move resources, shift people and bring new weapons systems on line.

We have proposed a process for moving a number of non-military functions that have been pressed on DOD over the years to other, more appropriate departments. We have proposed more flexible rules for the flow of money through the Department to give us the ability to respond to urgent needs as they emerge.

We have proposed elimination of onerous regulations that make it difficult or virtually impossible for many small businesses to do business with the Department of Defense. We have proposed expanded authority for competitive outsourcing so that we can get military personnel out of non-military tasks and back into the field.

And we have proposed measures that would protect our military training ranges so that our men and women will be able to continue to train as they fight while honoring our steadfast commitment to protecting the environment.

This bill involves an enormous amount of detail. As you work through it, you will inevitably find that almost every regulation had some plausible rationale behind it, but it is important to keep in mind what the sum total of all these industrial age bureaucratic processes does to our ability to develop an information age military. The cumulative effect of the old processes that we are seeking to change with this proposed legislation impacts not just small details, but our ability to defend our nation and to provide the brave men and women who perform that task with the absolutely best support they deserve. Allow me to name a few of these old processes.

First, the inability to put civilians in hundreds of thousands of jobs that do not need to be performed by men and women in uniform puts unnecessary strain on our most precious resource—our uniformed personnel. Today, we have some 320,000 uniformed personnel doing essentially non-military jobs, and yet we are calling up Reserves to help deal with the global war on terror.

Second, the overall inefficiency of our management system means that taxpayers are not getting the value they could get from their defense dollars. And, perhaps more important, the men and women whose lives depend on the support that the dollars deliver are also being short-changed. Despite 128 acquisition reform studies, we have a system in the Defense Department that, since 1975 has doubled the time it takes to produce a new weapons system in an era when technologies in the private sector are arriving in years and months—not in decades.

Third, the encroachment on our ability to train adequately in an era when training increasingly represents the most important qualitative edge that the US military enjoys, threatens a collision that will endanger the lives of our servicemen and women. That collision has not yet happened, fortunately, but it behooves us to take appropriate measures now to ensure that it does not.

Fourth, our limited flexibility to manage our civilian work force will make it increasingly difficult to compete with the private sector for the kinds of specialized skills that an information-age military needs for its support, but that will be in increasingly high demand throughout our economy.

And finally, and perhaps most important, our slowness in moving new ideas through that cumbersome process to the battlefield means that the equipment and processes that our remarkable men and women are making use of are still a generation or two behind where they ought to be. As we have seen in both Afghanistan and Iraq, we need every bit of qualitative superiority that we can achieve in order to save lives and to more rapidly and precisely defeat the people who threaten the security of the United States. Our objective is not merely to achieve victories, but to have the kind of decisive superiority that can help us to prevent wars in the first place, or if they must be fought, that can enable us to win as quickly as possible with as little loss of life as possible.

Mr. Chairman, the Department is already engaged in substantial transformation. We have reduced management and headquarters staffs by 11 percent. We have streamlined the acquisition process by eliminating hundreds of pages of unnecessary rules and self-imposed red tape. And we have implemented a new financial management structure.

But these internal changes are not enough. DOD needs legislative relief to achieve authentic transformation. And we need the Congress's help to transform how we manage people, how we buy weapons and how we manage our training range. We need Congress to enact the Defense Transformation Bill.

Why This Legislation—Now

We understand it would be ideal if there were more time for you to consider this bill. But, we also recognize the fact that if we were to delay and not get on this year’s Defense Authorization Bill, this legislation may not become law until late 2004 or even 2005. And given that our adversaries continue to look for vulnerabilities and opportunities, delay will only work against us. And we believe this bill offers a substantial step forward in improving the overall conditions of the Department’s civilian workforce.

The bill before you is the product of many months, indeed years, of work inside and outside the Department of Defense. Much of the content of the civilian personnel package is the result of personnel demonstration projects that Congress authorized the Department to undertake decades ago.

More than 30,000 DOD employees have participated in the demonstration projects that other Congressional committees helped to pioneer. Without the Congress' leadership and this committee's leadership, this bill would not be something we could be considering today.

Over the past year, this bill has gone through an extensive interagency process and comes to you with the full support of the administration. And the Congress has played a vital role in the development of this initiative.

Although, as has been pointed out, in its final form the bill did not reach the Congress until April 10, in the months leading up to its formal delivery, we had over 100 meetings with members and staff on the various provisions. That helped to shape, in substantial measure, those things that we thought should be presented to the Congress and those things that should not be. The input that we have received from the Congress has been invaluable in the development of the bill that is before you.

It is a fact that, in other U.S. government agencies, major portions of the national workforce have already been freed from archaic rules and regulations. We need similar relief. Mr. Chairman and members of the committee, the Department of Defense must transform for the 21st century not just the way we deter and defend, but also the way we conduct our daily business. And we need to get this done right now. The world changed drastically on September 11, but the laws and regulations governing the Department of Defense have simply not kept pace.

We realize that achieving the goal of reforming the Defense Department’s civil service system requires some bold moves to constitute real transformation. We are asking you now to help us take such a bold step. That we are fighting a difficult war on terrorism that promises to be of some duration only makes the need to do so to reform our personnel system even more pressing. We must fix this system now. We cannot afford to wait.