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DoD News Briefing-Deputy Secretary Wolfowitz and Service Secretaries

Presenter: Deputy Secretary of Defense Paul Wolfowitz
June 18, 2001 1:00 PM EDT

Monday, June 18, 2001 1:00 p.m. EDT

(Special briefing on the Department of Defense management and the service secretaries. Also participating: Secretary of the Army Thomas E. White, Secretary of the Navy Gordon R. England, and Secretary of the Air Force James G. Roche.)

Wolfowitz: Good afternoon. I think you all know why we're here. It's an opportunity to introduce to you our new service secretaries, who with me and Under Secretary of Defense Pete Aldridge will be forming the secretary's new Senior Executive Council.

We have a truly extraordinary trio who have taken over the leadership -- civilian leadership of our three services and to whom the secretary and I are extremely grateful for their patriotism and willingness to serve. Each of them has made substantial personal sacrifices to be coming here to work. Each of them brings to this department an extraordinary wealth of knowledge about the Defense Department, about defense industry, and about private business. And those skills, we believe, are going to be extremely important to us as we move forward in meeting two particularly big challenges of this period.

One challenge is the challenge to get more efficient, to find ways to make better use of the resources that the country gives us to manage the defense of the nation. There have been shelves full of studies recommending reforms and ways to be more efficient in acquisition and operations and in almost everything, and when asked the question, "Well, for all the studies, how much has actually been implemented?" I think the challenge is the implementation. And in the three gentlemen that I'll be introducing to you in a minute, I think we have men who know what the problems are, know what the solutions are, and have the demonstrated leadership ability to implement those changes.

The second huge challenge is how to take advantage of the opportunities that new technology offers us, potentially, to achieve truly transforming changes in our military capability, truly quantitative -- qualitative increases in the kinds of capabilities we get from our already outstanding forces. And that requires understanding not only the technology but also the forces, the doctrine, the industrial implications. And again, in each of these three men, we have people of extraordinary qualifications.

And they bring not only, I think, extraordinary individual qualifications but also, we think, the ability to work as a team. And it's that teamwork that Secretary Rumsfeld has asked us to pull together in forming the Senior Executive Council, so that we can get the benefit of each one of them giving ideas to the other, the benefit of moving together as much as possible in a joint way, and the benefit of getting the secretary's support and authority where we need it.

Without further ado, and without going through long bios, because I think most of you -- I'm sure all of you have read the bios; I think most of you have probably published their bios by now. Let me just ask -- in order of the age of their service, I'll ask Tom White, the 18th secretary of the Army, followed by Gordon England, the 72nd secretary of the Navy, and then Dr. James Roche, the 20th secretary of the Air Force. And they'll make some brief comments and then they'll be here to take your questions.

Secretary White.

White: Thank you. Well good afternoon. It is a distinct pleasure to be here and to be back in the Army after an 11-year absence in corporate America. I volunteered to come back because I think we're at a critical juncture in the Army. We have clearly laid out the vision of where the Army wishes to go, we have set a course of transformation, and in order for us to be successful in the execution of that transformation to make the vision become a reality, we have to transform not only the military side of the Department of the Army, but the business practices as well.

So I am very much excited about bringing best business practices that I have experience with in corporate America into the department -- privatization, outsourcing, just to name a few; in working with my colleagues, Gordon England and Paul Wolfowitz and Jim Roche, along with the secretary, in a streamlined management setup both in the Senior Executive Council and the Business Initiative Committee -- or Senior Executive Committee, Business Initiative Council -- to get on with this, because as the deputy secretary of Defense said, a lot of this stuff has been studied to death. It's very clear what needs to be done, and the challenge is for us to execute and get after it. So I look forward to that challenge and I look forward to your questions. Thank you.


England: Tom, thanks very much. It is nice to be here with my good friends who are now secretaries with me so we can indeed work together as a management team. I'm looking forward to that. I do want to just make a very brief statement to set the stage for at least my views as I start this tenure as secretary of the Navy.

First, I want to say that I recognize, as do my colleagues here, the other members of the Senior Executive Committee. DoD is different than a commercial business, so we cannot run this as we ran our own businesses.

We do have fiduciary responsibilities and we do have requirements that make DoD unique in terms of an enterprise. On the other hand, DoD is not so different as to be largely outside the U.S. economic mainstream. Rather than competitive market forces, the foundation of the military economic system is the continued confidence and trust of each elected president, senator, representative and, ultimately, the American people.

My initial concern is that this institution could, over time, lose that trust. As such, the goal, the whole goal for me, for the Senior Executive Committee is to put policies and processes in place that more fully integrate the DOD into the mainstream of the U.S. economic fabric. My personal summary objective as the secretary of the Navy, as a member of the SEC, are to ensure that we have the military vector in the right place and then to have measures and metrics in place so we can measure ourselves every day; know where are in terms of measuring our progress.

This is an ideal time to be changing course, and we have a rare opportunity to dramatically improve our institution. I am committed to working with my fellow service secretaries, with the deputy under secretary, with the secretary of Defense, all the leadership of the Department of Defense as we pursue these fundamental changes. I look forward to this challenge, and I look forward to your questions.

Thank you very much.

Roche: I am Jim Roche. Although a former Naval person, I am absolutely delighted to be the secretary of the Air Force, and I was attracted to work for Don Rumsfeld and for Paul Wolfowitz for a number of reasons. One, I had worked for Secretary Rumsfeld when I was a Navy commander stationed here in this building, when I worked with Andy Marshall. Two, the chance to work closely with old friends like Gordon England and Pete Aldridge, and to find that Tom White, although we hadn't met before, he and I are both graduates of the Operations Research Program of the Naval Postgraduate School, so we immediately had a lot in common.

And I think by having a lot in common, we can get to issues very quickly. We all bring differing but proven practices from business, and the way we've worked so far, by each of us being briefed on the other services has given us much more of an ecumenical view. It's jointness at the top, and the jointness pays off in many ways. Gordon has a richer history in Air Force systems than I do, and I have some knowledge of Naval systems that he's found to be of use.

In regard to being secretary of the Air Force, it's a wonderful time in this new millennium to be the secretary of this service.

My goals are very simple. One, to adapt and work with the folks in the Air Force to adapt a strategy for this new era. And I believe the Air Force will have a very key role in the future. The second is to make the careers of our enlisted persons and our officers as enriching and self-fulfilling as possible. The third, like any good businessperson, is to try and become more efficient. I believe all of the knowledge of how to get better resides in the people in the service. They know. We just have to provide a mechanism wherein they can come forward with good ideas and have an incentive to be more efficient by being able to reallocate those funds towards combat systems or towards personnel matters.

Then my last point is a longer-term one, which is I believe with the collapse of the defense industry to so few companies, I'm concerned about innovation that will be needed in the next 20 years, and therefore, how can we in the Air Force, who rely so much on technology, ensure there's an innovative base that we can capitalize over the long term.

So it's a thrill to come to work. I'm hoping Secretary Wolfowitz's hours and Secretary Rumsfeld's hours will get a little more under control. But we do have casual days, as one of my staff said -- Saturdays and Sundays. (Laughter.)

Q: Paul, I wonder if I could ask: This building has been trying to do this since it was thrown up almost overnight. How are things going to change now? Are these gentlemen going to be given a much more active part in running their services, as opposed to launching ships -- (laughter) -- and glad-handing troops? I mean, are you going to perhaps maybe step on some military toes and begin more actively running this place with the secretaries?

Wolfowitz: I'll let a couple of them try answering it. But clearly, these are -- these men didn't make the sacrifices they made to come here and do the kind of thing that you just described. Obviously, there is a lot of getting out and seeing troops and understanding what's out in the field, but they are hands-on managers and we expect them to be hands-on managers.

Anybody want to take a shot at that? Gordon?

England: Sure, I'll try.

Q: How is it going to change?

England: Let me make a comment. I guess when all three of us had this discussion with Secretary Rumsfeld, also with Deputy Secretary Wolfowitz, that we were all willing to come and take on this challenge as long as we weren't going to work on the margin. That is, we wanted the opportunity to make fundamental changes that benefit our men and women in uniform and ultimately the country. So I can assure you we are not here to deal with marginal issues.

We are here to fundamentally improve the business practices of the Department of Defense and our respective services, and we will work together to do that. And that is a very, very important difference.

We are, as they say, "joined at the hip." So we will work together to bring about change across our services and across the DoD.

Q: Could you just give us maybe one or two concrete examples of how you plan to actively manage?

White: Well, I might also say that -- I mean, Title 10 is quite clear who runs the service departments, and it's the secretaries. And the chiefs of each service have their role to play, both on the operational side and within the department. But we effectively are the CEOs of wholly owned subsidiaries of the Department of Defense, in a business context. So the authority to run the department is clearly there.

And it's my intent, picking out things that I think are truly important to the department, to be personally engaged in them just like you would in a business, and drive them through and get them done, like family housing privatization. We have deplorable housing in a lot of parts of our department. It affects retention. We are a married Army, as the other services are. I'd like to accelerate that program.

But utilities privatization is a second area. In my opinion, there's no reason in the universe why the Department of Army is in the utilities business -- gas, electric, water and wastewater. Authority to convey those utilities to private concerns has been given by the Congress to the department; the department hasn't used it.

So there are probably 20, 25 things that truly make a difference, that impact on readiness, impact on the quality of life of our people, and I expect to be personally involved in that, push that like I would as -- with a CEO hat in running a business and have a go at making it happen. But that takes hands-on directive-style leadership, and that's what I expect to bring to the table.

Roche: Air Force officers are bright officers, they're bright people, and they've done their homework on me and they recognize the model that we're going to use. I'm the chief executive officer, General Ryan is the chief operating officer. If something's not broken, I don't intend to fix it. I can work with the Air Force -- there's a number of great things that they've done. Already I think you'll find that we're working as a very good team in trying to do things that support the secretary and the president in the new strategy. We've done a number of things in the budgetary area that are still being debated inside the building, and I can't get into any of that.

We've looked at how we train officers, how we raise general officers, what it required, and we do it collectively, like any good management team would. And I find that the integrated product team approach works whether you're the CEO of a company or whether you're the service secretary. Get everybody's views, work it. But it's very clear who the final decision-maker is, and I've found that the Air Force has not only accepted this but has welcomed it.

Q: Many times, when these efforts start, people say that these good business practices will implement cost savings. But it's rare to be able to quantify this. Is it more of a morale issue that -- some of the changes that you intend to achieve, or do you actually believe that in the end of your tenures you'll be able to point to some kind of ability that really saves bucks here?

Roche: I'll let my colleagues speak for themselves. No one's ever accused me of being a potted plant, and my notion is that there will be measurable cost savings.

The difference is -- the difference from the past -- and we have the commitment of the secretary, and I think it's a courageous commitment -- is that if we can allow the brains within, say, the Air Force to come up with ideas of things we could do smarter, better, cheaper, instead of that money returning to the Treasury, there are a number of unmet needs, whether it's more combat arms or it's doing things more for our people, or it's more education and training, and the fact that we have permission to save and to move the monies to areas where we feel there are needs and that this will be supported by the secretary as the authorization and appropriations process proceeds is an enormous incentive to tap the best.

Now it's clear if we pull the rug out from under these people at some point, then the trust that we're trying to build with them and the trust among ourselves will come into question. But so far, we have the support of everybody on top of us to do this right, including the president. I mean, look, the president made a major change when he allowed the secretary to pick people like my good-looking colleagues and I. And I think we have an obligation to make this experiment run successfully as possible.

Q: So that's a new incentive, basically? And if it is, like where and what kind of regulation or statement is that?

White: Well, it -- what classically has happened around there is people have been encouraged to have some sort of initiative that saves money. Then, soon as they save the money or they think they're going to save the money, somebody rips the money off or puts in a negative wedge for that efficiency, which completely kills the incentive to do it.

So we have agreed, between ourselves and with Secretary Wolfowitz and Secretary Rumsfeld, we're not going to do it that way this time.

And to the extent we generate savings, as Jim suggested, we're going to roll those savings over into, hopefully, into the tooth-end of our service or into quality of life or other unfunded requirements that we think are important, and that's a primary motivator for everybody to participate in. I don't think we need to write it in a regulation or anything; I think that's too bureaucratic, I think, for the situation we're trying to create here. That's our deal that we have with the secretary, and that's what we intend to pursue and that's what we've told our people.

Wolfowitz: You're next, and then I'll come up front.

Q: With all deference to Title X and the authorities conferred thereby, you are going against more than the 50-year history of this department. I mean, from '58 on, where the assumption has been the services are just so deeply rooted, so entrenched that if you wanted to get beyond stapling together the vectors, some of the service wish lists, if you wanted an integrated product, you really had to go above that, create this -- I mean, the '58 legislation, the McNamara tenure, Goldwater-Nichols, that's been the trend for 50 years.

Now, you have -- I mean, it's a reportable fact that this is an extraordinary bunch of service secretaries, with all deference to some of the fine ones we've had before. Nevertheless, you know, the -- (laughter) -- no, I mean, we're talking about the bureaucratic incentives in a very large institution, and you and the secretary have decided that you are going to take a different tack, and I wonder if you could just talk about that, you know?

You've chosen to go in a consciously different direction, a radical change from the way this place has run for half a century, and I wonder if you can just talk about why, and why you think it'll work?

Wolfowitz: Well, I'll let some of these folks try, also, but I really do think at the heart of it is the notion that change in this institution is going to come about much more effectively if it is decentralized; that the attempt to do everything out of the secretary's office is commendable, but at its best, it's going to focus on a limited number of issues.

And that I think what you've heard in the answers of a couple of these service secretaries already is that the way to really get change in this organization is to motivate it at lower levels, and there's an awful lot of talent around, an awful lot of good thinking. The problems of this institution, and they are many, I don't think come from problems of individuals. They come from the decision-making structure in which people frequently find themselves trapped.

So I think the philosophy here is while bringing a great deal more energy and authority and genuine power in at the center by bringing on three service secretaries who not only are individually probably as good as we've ever seen in any of the services, but I think one would probably agree there has never been such equality in strength among the services, and that allows you to move ahead across a broad front, but empowering people who really make the decisions.

That would be the way I would say it, and I think if you look at the McNamara reforms, some of which were very creative and we're still living off of today, like PPBS, but nevertheless I think the failure of a lot of it was the attempt to do too much in a centralized way.

I remember -- well, I'll just leave it there and let -- (aside) -- Do you want to add to that, Jim?

Roche: I would only add that this is really a new era and, in fact, the jointness issue is not something that's just mouthed, it really is true. And given the size of the forces, compared to what they were 10, 15 years ago, and given the demands on the forces, and given the demands for situational awareness and a great deal of technology, a great deal of information technology, you can't do the stovepipe game the way you used to.

Goldwater-Nichols has certainly put a lot of incentives in place for the Officer Corps. It's also used up more of their time as they go through a career. So that's why I worry about officer education.

But if there's not jointness at our level, how in heaven's name can there be jointness below? We each have enough background that any major issue we can discuss. For instance, when it comes to an airplane, I don't think I take second spot to many people on airplanes, but I do to Gordon England, I really do. And I think among service secretaries in a discussion of certain aspects of naval warfare, Gordon has certainly been more than willing to hear my part of it. So we're knowledgeable about the other guy's stuff, which means we can discuss things together. And it's very hard to get stuck in a stovepipe when people can point out, "But you wouldn't do that in business because you'd lose money, if you did."

Wolfowitz: Okay, you're next, and then we'll go back and then go over here.

Q: Yes. Well, I have two questions, one for Secretary Wolfowitz and one for Secretary England.

Secretary Wolfowitz, I wanted to know if last week on Tuesday you were at the White House, or your assistant, Jaymie Durnan, to discuss the issue of Vieques? Do you want to answer that before I go to Secretary England?

Wolfowitz: On Wednesday, I believe was the day.

Q: And you were at the White House?

Wolfowitz: Yes, with Secretary England.

Q: Okay, you were not there prior, on Tuesday?

Wolfowitz: I think this will be the one shot at Vieques, so why don't you take it quickly?

Q: Okay. And then, Secretary England, with all the transformation and changes that you envision for the Navy, and your desire to find alternatives to the use of training in Vieques, have you already abandoned the idea of combined integrated training, what the Navy officers have said is so vital for military readiness in Vieques?

England: No, I have not. Let me make one comment about Vieques, and I'd like to just do this one time.

Vieques is not the issue. There is no issue with Vieques, and that is not the question that we're addressing nor the problem to be solved. The issue being addressed is training, adequate training for our men and women in uniform before they are deployed. So we will address that issue, but we will not address that issue exclusively looking at Vieques. But we will address this broad issue of how do we adequately train our men and women in uniform as they are deployed. So that's really the issue.

Q: But is combined military training still essential for military readiness?

England: Certainly.

Q: Mr. Secretary, as long as we're on this, let me just ask if you can clarify something that I'm a little confused about after our sessions on Friday.

You've spoken, and others have spoken about the administration's intent to leave Vieques by middle of 2003. Secretary Rumsfeld, in an interview broadcast, I think, Friday night, said something about a time frame two, three, four years, I believe was the words in his mouth. Is there a commitment by this department to leave Vieques by 2003, or is there merely an intent?

England: Let me say, as I said on Friday, we're actively planning to leave in 2003 and we are working diligently to have an alternative in place by that time. And I sincerely believe we will have an alternative in place by that time.

Now let me go back to our previous discussion of business practices, if I can.

Q: Well, can I just follow up on --

England: No. Pardon me. Let me go back to business practices.

Q: May I have a follow-up?

England: No, I'm sorry. Look, we will have another session on Vieques if we can. The purpose of today is not Vieques. So let me discuss the business practices a moment if I can.

The issue in business practices is for the management team to make better decisions than decisions have been made in the past. I say that because in order to make better decisions, we need better systems in place. So Secretary Wolfowitz mentioned the PPBS, the Program Planning Budget System. That system is at times criticized, but we do have a system to allocate funds. We do not have the corresponding what I'll call ABCS system -- that is an activity-based costing system -- so that we know exactly how the funds are being spent; and we do not have the measures and metrics in place that you would expect so that you can manage effectively a wide variety of issues.

The thought was put forth that this is a very, very large enterprise. It is. So you can't address every single issue every single day. But you can have in place a set of measures and metrics so you can every day monitor the health of the total enterprise.

So they're the kind of systems we need to put in place so we'll be in a better position to make better decisions as we go forward.

Staff: Maybe one more business-related question, I think.

Q: You're talking about yourselves as CEOs. Unfortunately, you have a 535-member board of directors who frequently are very jealous about how you use the money. This idea of saving -- converting the savings to your own use has been proposed before. Congress does not necessarily go along with that plan. You know, how are you going to deal with, you know, the folks across the river in executing this plan?

Roche: As I said earlier, I recognize that when I point out the secretary has agreed to support us through the authorization and appropriations process. We believe we can make a case to the members of the Senate and the members of the House, and that they have every right to expect that we run our business more efficiently; and that if we're going to ask them to authorize and appropriate the levels of monies that have been or will be in the future, that we have just as much of an obligation to come back and say what we are doing on our part.

It will be sometimes difficult to do, and we will have to use the normal authorization and appropriations process, because that's what our 535-member board of directors says. But we've all lived with boards of directors. Sometimes smaller ones are far more intrusive than larger ones.

Q: (Chuckles.)

Q: On the same subject, in the late '80s, early '90s, there was something called M accounts here, if you remember. It's when the defense budgets were really big, and there were surpluses left over, and that money got plowed into what became slush funds. And the money was used to cover up overspending on programs, to get new starts for programs. Just a couple of years ago, we saw the NRO has its own slush fund and spent gazillions of dollars building its headquarters without any congressional oversight.

What kind of controls are you going to be placing on yourselves to keep this from turning into a slush fund situation and make sure that you are --

Roche: I'll say, right off the bat, I understand the M accounts.

The issue is, if you have activity-based costing, you know exactly how much money you're talking about. Secondly, we're going to be extraordinarily transparent, and so when monies are saved in one area, those monies will then be asked to be applied to another area, and a very specific point will be made. This is the incentive that is healthy. It's a win-win for everyone. It's a win for the building. It's a win for our soldiers and sailors and airmen and Marines. It's also a win for the folks in the Congress who expect us to manage this place better.

Q: Can you just say in a little detail about how often you plan to meet, or do you all intend to stay on for two years, four years? What kind of commitment do you have?

Wolfowitz: I think we're all required by the Senate to sign up for four years.

Roche: Yes, yes. And we'll be here for the duration. And like good boards of directors, the vice-chairman of the board has scheduled us the same day, same afternoon of a certain week of every month.

Wolfowitz: And we'll be meeting even more in between.

Q: What week?

Roche: That's the formal one. We're meeting a lot more than that, let me tell you. (Chuckles.)

Q: What are the first two or three signs or indications that people should look for to see if this is really working, not working, half-working, in a practical sense?

Wolfowitz: Tom?

White: Well, I think if -- let's take -- one of my favorite examples is the privatization of housing in the Army. We ought to be able to accelerate that. It's a tremendous idea. It's met with great initial -- I mean -- and I would broaden that to say we have too often in the department in the past outsourced or considered the outsource of people, rather than business functions. And this has gotten us into this grossly inefficient process called A-76, which no reasonable business would ever conduct if it were looking to outsource things.

So the idea is you outsource a function, and that allows capital to be brought to bear, that business -- private initiatives and so forth, in addition to the labor associated with the function.

So we have private capital being applied in utilities outsourcing. We have private capital being applied in housing modernization, and you should be looking to the impact that we will have to accelerate those programs, because they significantly improve the infrastructure that we have critically underfunded, I think, over the past eight or 10 years, to the direct benefit of soldiers and their families, and this has already been approved by that 535-member board of directors. It's a matter of execution in the department. So those would be early indicators that we're getting on with it.

Q: Any other signs from the Navy or Air Force that we should look for?

England: I think a sign you should look for is this real jointness. It turns out the three secretaries are working together. We are looking at this in terms of total national defense, so you will be seeing more and more joint programs' support of each other's programs and not necessarily just holding on to our own program. So you will see, I believe, a real team operating here in the Department of Defense where the three secretaries will speak as one for the Department of Defense and for the nation.

So we will certainly represent our individual services, but in my view, you will see us speaking for programs across a total spectrum of what's best for the total -- the total department and for the country.

Q: Are you gentlemen going to start working immediately on base closings? That's one of the biggest areas where you can save money. Are you going to make concrete recommendations?

White: Well, I think the first thing that has to happen is we've go to get the strategy finished. We have to finish the QDR process and establish what the strategy is and the force structure necessary to support the strategy. And once we've locked that in, then the question is, "What is the most efficient business case to base and to support that force structure?" So it's a little premature to talk about specific closings or where that's all going to go until we get the front end piece laid in, and we're obviously working just about 24/7 to get that done.

Q: As each of you generates savings in your own department, is there a commitment that the savings remain in your department or might Army savings wind up going to the Air Force, or Navy savings wind up going to the Army?

Q: Have joint budgeting? (Laughter.)

Roche: Well, presumably, the allocation of those savings will be to subjects which all the services would agree. But again, the transparency will be there so people will know where we wish to migrate will be. To start with, it stays within the department.

Q: But everybody thinks it might then wind up in national missile defense.

Roche: You know, who knows? I wouldn't preclude it going anywhere. But no, it would be -- right now, the way we have done it in the Air Force is to say that the monies we save will be allocated by the Air Force Corporate Board. My bias is to have it allocated to combat arms whenever possible, but I can also understand there might be some needs in terms of some of our people-related programs that, in fact, have to get addressed first and aren't being addressed fast enough.

Q: What about individual incentives for individual service members who come up with ideas to make things more efficient? Have you come up with any sort of ideas on that?

England: Well, we would like this to become the culture of the whole department, all the services and all the people in this whole grand enterprise, that saving money is important and necessary. So, for example, we could consider this an officer promotions or senior civilian promotions. We do need warfighters, but we also need people who can run this enterprise efficiently and effectively, so that's equally important.

That was my comment about keeping the trust of each succeeding president and representative and senator and, ultimately, the American people. It is incumbent on us to run this efficiently. It's taxpayers' money, it's a lot of it. So it's reasonable that we can expect our military people to also run their part efficient along with the civilian side.

Q: How will you know how much savings you have? I mean, there's been GAO report after GAO report about Pentagon accounting practices and the $7 billion in still unmatched disbursements.

Roche: Look, we start really hampered by the fact there's not an activity-based costing system; there's not a set of accounts that are easily auditable, which we're all used to coming from. So it's very hard to know the costs of sub-activities as compared to the aggregate, and that's one of the issues that we are committed to work on. In fact, we're committed and have the secretary's authorization to press the activity-based costing, which is a simple accounting system that any company would have, would go into all new programs.

We're starting it in the Air Force, and I know it's going to happen in the other services as well. So the issue is trying to find out exactly what things cost.

The point as to what a cost-reduction goal should be is something that will evolve in the Business Initiatives Council. But we're not trying to do the impossible. We're going to go at this the way a good, well-run enterprise would be done, which is to try something, see if we can do more, convince people that it's efficacious to do it, and then get them to be part of a continuing process improvement program.

Wolfowitz: Okay, this has to be the last question. We'll go to anyone who thinks they have a question for all three to -- each of the three to answer.

Q: Do you have a target for savings in the aggregate, first of all? Secondly, if you do what a normal business would do, which is just stick with your core competency, there would be an awful lot of people in uniform who were doing things that are not war fighting. And what will those folks do?

England: Okay. Let me first talk about core competencies. First, you're right, Stan, we do need to identify our core competencies and we do need to stick with our core competencies, so first we need to identify those and structure the enterprise. Hopefully, we will free up resources for the front end of this enterprise, which is the spear, not the tail. So hopefully, we will free up resources for war fighting. That is our hope and expectations.

Regarding how much money can be saved, there's been a lot of studies that varied anywhere from probably $5 (billion) to $30 billion, ones that have been conducted in the past. That's a very wide range, but on the low end, it's still a lot of money. So if you look at the low end of a lot of studies that says you could save, say, $5 billion, that's a lot of money to put into the war-fighting end So there's some range. We're not sure what that is. Until we, frankly, have an accounting system in place, as Jim mentioned, we won't know that, but it is a significant amount of money and it would make a difference to all of our men and women in uniform to have that range of money, any amount in that range of money put into the war-fighting end of our business.

White: Well, let me just add, like any good business starting, or any bad business that you wanted to reform, you start out by determining what your core competencies were, you'd structure in how to do those in the most efficient way, and then you would line up all the non-core competencies, beginning with the ones that you spend the most money on, and you would go to the private sector and try to find a value proposition that would improve the service for less money.

And I think that same approach is appropriate to a department -- finance and accounting -- there's a whole gamut of them. And there is no secret to this. You could fill this room with the blue-ribbon panels over the past 20 years that have very clearly pointed those things out.

Our challenge is not to restudy all this. Our challenge is to execute and get it moving, and so that's what we intend to do.

Roche: Let me bring things back full circle, Stan, to point out that this -- we recognize this is not a business. We don't have a product, as in the open market. We recognize that the product, if there is anything, is in fact deterrence and, should deterrence break down, it's that American forces prevail. So we fully recognize that.

And as you know, the subject of core competency gets mushy if people don't do their homework, but there are really three criteria that constitute a core competency, right? It's something that your customer thinks is important; so in our case, we might suggest that its potential opponents think it's terribly important.

Secondly, it is something that pervades more than one particular product, so if it's really a competency, it cuts across things. Third, it has an extraordinarily high barrier to entry. So therefore, some of the technology, when put together with the high caliber of folks that we have, that's where the core competencies are and that's what the American people demand of us.

Wolfowitz: Thank you all. This will not be the last time you get a shot at these gentlemen individually and perhaps we'll do it again as a group. Thanks very much.

Q: Thank you.


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