1 00:00:00,240 --> 00:00:03,290 in August 2 2017 . The Honorable Ellen 2 00:00:03,290 --> 00:00:04,901 Lord currently serves as the 3 00:00:04,901 --> 00:00:06,568 undersecretary of defense for 4 00:00:06,568 --> 00:00:08,890 acquisition and sustainment . In that 5 00:00:08,890 --> 00:00:10,946 capacity , she is responsible to the 6 00:00:10,946 --> 00:00:12,834 secretary defense for all matters 7 00:00:12,834 --> 00:00:14,779 pertaining to acquisitions and the 8 00:00:14,779 --> 00:00:16,723 defense industrial base . Prior to 9 00:00:16,723 --> 00:00:18,779 disappointment , Miss Lord served as 10 00:00:18,779 --> 00:00:20,668 the president and chief executive 11 00:00:20,668 --> 00:00:22,340 officer of Texture on Systems 12 00:00:22,340 --> 00:00:25,270 Corporation , a subsidiary of Texture 13 00:00:25,270 --> 00:00:28,080 On Incorporated and that role . She led 14 00:00:28,080 --> 00:00:30,191 a multibillion dollar business with a 15 00:00:30,191 --> 00:00:32,358 broad range of products and services , 16 00:00:32,358 --> 00:00:34,636 supporting defense , homeland security , 17 00:00:34,636 --> 00:00:36,858 aerospace and infrastructure protection 18 00:00:36,858 --> 00:00:38,858 for customers around the world . In 19 00:00:38,858 --> 00:00:40,969 addition to her more than 30 years of 20 00:00:40,969 --> 00:00:43,024 experience in the defense industry , 21 00:00:43,024 --> 00:00:45,136 this lord previously served on boards 22 00:00:45,136 --> 00:00:46,913 and tax forces for a variety of 23 00:00:46,913 --> 00:00:49,080 organizations , including the National 24 00:00:49,080 --> 00:00:51,080 Defense Industrial Association , US 25 00:00:51,080 --> 00:00:53,302 India Business Council , Center for New 26 00:00:53,302 --> 00:00:55,580 American Security and the U . S . Navy . 27 00:00:56,340 --> 00:00:58,229 Thank you for joining us for this 28 00:00:58,229 --> 00:01:00,396 Reagan National Depends form . Virtual 29 00:01:00,396 --> 00:01:02,340 Fireside chat . Help you enjoy the 30 00:01:02,340 --> 00:01:02,120 conversation . 31 00:01:07,040 --> 00:01:08,984 Secretary Lord from the Department 32 00:01:08,984 --> 00:01:10,929 Defense . Welcome to the podcast . 33 00:01:10,929 --> 00:01:13,040 We're really excited to have you here 34 00:01:13,040 --> 00:01:15,800 on Reaganism . Great . Thank you so 35 00:01:15,800 --> 00:01:17,911 much . Roger . Great to be talking to 36 00:01:17,911 --> 00:01:19,856 you and always a fan of the Ronald 37 00:01:19,856 --> 00:01:22,022 Reagan Institute . Well , that's great 38 00:01:22,022 --> 00:01:24,022 to hear . And we do appreciate your 39 00:01:24,022 --> 00:01:23,890 participation in the Reagan National 40 00:01:23,890 --> 00:01:25,946 Defense Forum . And we're excited to 41 00:01:25,946 --> 00:01:28,710 have this one on one conversation just 42 00:01:28,710 --> 00:01:32,160 for our viewers and listeners . Ellen 43 00:01:32,160 --> 00:01:34,382 Lord's name , now known to be the under 44 00:01:34,382 --> 00:01:36,493 sector for acquisition sustainment in 45 00:01:36,493 --> 00:01:38,549 the department defense . How did you 46 00:01:38,549 --> 00:01:40,271 get to this role ? What's your 47 00:01:40,271 --> 00:01:42,493 background ? The world off the military 48 00:01:42,493 --> 00:01:44,549 and aerospace and defense industry ? 49 00:01:44,549 --> 00:01:46,570 All right , so I began life as a 50 00:01:46,570 --> 00:01:48,626 chemist , actually a little bit of a 51 00:01:48,626 --> 00:01:50,940 nerd in the lab and worked in the 52 00:01:50,940 --> 00:01:53,540 automotive industry for about 11 years . 53 00:01:53,540 --> 00:01:57,230 For a multi industry corporation that 54 00:01:57,230 --> 00:01:59,220 gave me the opportunity to move 55 00:01:59,220 --> 00:02:01,460 segments into aerospace and defense 56 00:02:01,640 --> 00:02:04,960 where I was for about 22 years . So I 57 00:02:04,960 --> 00:02:06,690 worked my way through general 58 00:02:06,690 --> 00:02:08,912 management and then to run a segment of 59 00:02:08,912 --> 00:02:10,746 the corporation and had a lot of 60 00:02:10,746 --> 00:02:14,120 interaction with D . C with D o . D . 61 00:02:14,590 --> 00:02:16,690 Back and forth , and one day was 62 00:02:16,690 --> 00:02:18,690 incredibly surprised to get a phone 63 00:02:18,690 --> 00:02:21,820 call asking me to be a political , and 64 00:02:21,820 --> 00:02:24,490 I had no idea what that meant . I said , 65 00:02:24,490 --> 00:02:26,823 Thank you very much . That's flattering , 66 00:02:26,823 --> 00:02:28,990 But no , thank you . I'd love to be on 67 00:02:28,990 --> 00:02:31,212 a board and reflected on that for about 68 00:02:31,212 --> 00:02:33,434 of weak and thought about what it meant 69 00:02:33,434 --> 00:02:35,490 and decided that it was time to give 70 00:02:35,490 --> 00:02:39,140 back . So I entered the world of D o 71 00:02:39,140 --> 00:02:42,540 D via a lovely hearing on the hill had 72 00:02:42,540 --> 00:02:45,940 no idea what that was all about . So 73 00:02:45,950 --> 00:02:48,330 here I am so very , very pleased to be 74 00:02:48,330 --> 00:02:51,250 here . And , of course , you were a CEO 75 00:02:51,250 --> 00:02:54,700 of ah important uh uh , defense 76 00:02:54,750 --> 00:02:57,870 company coming into the , you know , 77 00:02:57,880 --> 00:03:00,220 hearing in the Pentagon . How important 78 00:03:00,220 --> 00:03:02,970 is it is it to you on a daily basis ? 79 00:03:02,970 --> 00:03:05,120 Having that industry background to 80 00:03:05,120 --> 00:03:06,564 carry on your work is the 81 00:03:06,564 --> 00:03:08,287 undersecretary for acquisition 82 00:03:08,287 --> 00:03:10,287 sustainment . It's very important , 83 00:03:10,287 --> 00:03:12,509 from my point of view , because I think 84 00:03:12,509 --> 00:03:14,680 I bring a different perspective than 85 00:03:14,680 --> 00:03:17,110 those who have been in government their 86 00:03:17,110 --> 00:03:19,332 entire careers . They obviously bring a 87 00:03:19,332 --> 00:03:21,340 very , very , incredibly important 88 00:03:21,340 --> 00:03:24,450 perspective as well . But I 89 00:03:24,710 --> 00:03:27,450 have experience with what it's like 90 00:03:27,450 --> 00:03:29,172 trying to do business with the 91 00:03:29,172 --> 00:03:31,750 government and perhaps understand some 92 00:03:31,750 --> 00:03:33,640 of the challenges , particularly 93 00:03:33,650 --> 00:03:35,780 communications and understanding what 94 00:03:35,780 --> 00:03:38,800 is going on . So I really try to be the 95 00:03:38,800 --> 00:03:41,230 voice of industry inside the government 96 00:03:41,280 --> 00:03:44,320 and also try to explain how we do the 97 00:03:44,330 --> 00:03:47,280 things we do and why we do them well . 98 00:03:47,290 --> 00:03:49,820 Let's jump Teoh current events and and 99 00:03:49,820 --> 00:03:52,600 your role has really been pivotal for 100 00:03:52,600 --> 00:03:54,711 the Department of Fence in navigating 101 00:03:54,711 --> 00:03:56,878 the Cove in 19 Crisis kind of explains 102 00:03:56,878 --> 00:03:58,711 every why the undersecretary for 103 00:03:58,711 --> 00:04:00,767 acquisition Sustainment really finds 104 00:04:00,930 --> 00:04:03,030 herself in the in the kind of the 105 00:04:03,040 --> 00:04:05,210 ground zero for the department defense 106 00:04:05,400 --> 00:04:08,200 and its response to Cove in 19 . Well , 107 00:04:08,340 --> 00:04:10,118 frankly , I look at the defense 108 00:04:10,118 --> 00:04:12,300 industrial base as the nexus of 109 00:04:12,310 --> 00:04:15,460 economic security and national security , 110 00:04:15,470 --> 00:04:17,910 and the defense industrial base is one 111 00:04:17,910 --> 00:04:20,840 of my primary responsibilities . So I 112 00:04:20,840 --> 00:04:23,480 thought it was really incumbent on my 113 00:04:23,480 --> 00:04:27,090 team to get out and start communicating 114 00:04:27,090 --> 00:04:29,400 very , very quickly . And I'm 115 00:04:29,400 --> 00:04:31,567 incredibly fortunate . Toe have very , 116 00:04:31,567 --> 00:04:33,770 very talented individuals with a 117 00:04:33,770 --> 00:04:36,770 variety of backgrounds who rallied , 118 00:04:36,780 --> 00:04:38,980 and we decided that we would work 119 00:04:39,060 --> 00:04:43,010 through our industrial organizations 120 00:04:43,170 --> 00:04:45,510 that we typically used to sort of 121 00:04:45,520 --> 00:04:48,350 amplify and echo . What we have to say 122 00:04:48,420 --> 00:04:50,840 and we use them is convening forums to 123 00:04:50,840 --> 00:04:53,310 be able to start transmitting to 124 00:04:53,320 --> 00:04:56,040 industry what was going on and frankly , 125 00:04:56,040 --> 00:04:58,400 more importantly , toe listen , toe 126 00:04:58,400 --> 00:05:00,390 what was happening on their side 127 00:05:00,400 --> 00:05:04,080 because our job number one was to get 128 00:05:04,090 --> 00:05:06,710 everybody back toe work again to 129 00:05:06,710 --> 00:05:08,640 maintain readiness , but also for 130 00:05:08,640 --> 00:05:11,020 economic security for the country , its 131 00:05:11,020 --> 00:05:13,353 economic security and national security . 132 00:05:13,353 --> 00:05:15,464 When you're in , industrial bases are 133 00:05:15,464 --> 00:05:17,631 hand in hand . I mean , it's over what 134 00:05:17,631 --> 00:05:19,853 10,000 companies that you're keeping an 135 00:05:19,853 --> 00:05:21,964 eye on . Give us the latest numbers . 136 00:05:21,964 --> 00:05:24,187 Well , I'll tell you , what we do is we 137 00:05:24,187 --> 00:05:26,520 track two different groups of companies . 138 00:05:26,520 --> 00:05:28,353 One through the Defense Contract 139 00:05:28,353 --> 00:05:30,520 Management Agency , which tend to be a 140 00:05:30,520 --> 00:05:32,576 little bit larger companies a little 141 00:05:32,576 --> 00:05:34,742 bit over 10,000 there and then through 142 00:05:34,742 --> 00:05:37,370 the Defense Logistics Agency , on form 143 00:05:37,370 --> 00:05:41,170 or the vendors . We track about 11,000 . 144 00:05:41,260 --> 00:05:43,550 So I actually have a few numbers here 145 00:05:43,550 --> 00:05:46,610 because what we did was we convened 146 00:05:46,610 --> 00:05:48,570 three times a week meetings with 147 00:05:48,580 --> 00:05:51,490 industry associations . And then I 148 00:05:51,490 --> 00:05:53,880 started holding . And every morning Ty 149 00:05:53,880 --> 00:05:57,370 got meeting 7 a.m. with our extended 150 00:05:57,370 --> 00:06:00,620 team , and I got numbers every day . So 151 00:06:00,620 --> 00:06:03,450 from D . C . M . A . Um , we started 152 00:06:03,450 --> 00:06:05,870 tracked ing tracking closures as well 153 00:06:05,870 --> 00:06:08,160 as V l . A . So we've had 154 00:06:08,440 --> 00:06:12,360 279 closures off companies that D . 155 00:06:12,360 --> 00:06:16,270 C M A tracks on day 273 156 00:06:16,270 --> 00:06:18,270 of those have reopened , which I am 157 00:06:18,270 --> 00:06:20,820 very , very pleased about . And I'd 158 00:06:20,820 --> 00:06:22,987 like to think that we helped in that a 159 00:06:22,987 --> 00:06:25,153 bit from D L . A . They track a little 160 00:06:25,153 --> 00:06:27,650 over 11,000 . They had 161 00:06:27,660 --> 00:06:31,580 692 closures cumulatively , 162 00:06:31,590 --> 00:06:35,390 and 664 have re opened . Now 163 00:06:35,490 --> 00:06:38,980 What ? We knew Waas that the 164 00:06:38,980 --> 00:06:42,870 landscape was pretty complex initially 165 00:06:42,990 --> 00:06:45,630 because local and state governments 166 00:06:45,640 --> 00:06:47,880 were putting out shelter , in place 167 00:06:47,880 --> 00:06:50,100 orders and so forth . So one of the 168 00:06:50,100 --> 00:06:52,520 first things I did was to follow very 169 00:06:52,520 --> 00:06:54,670 quickly behind the Department of 170 00:06:54,670 --> 00:06:58,230 Homeland Security and put out a memo 171 00:06:58,230 --> 00:07:00,430 stating that the defense industrial 172 00:07:00,430 --> 00:07:03,580 base was critical infrastructure and 173 00:07:03,580 --> 00:07:05,636 that they were authorized toe work . 174 00:07:05,636 --> 00:07:08,700 And in fact , that particular document 175 00:07:08,710 --> 00:07:11,340 was actually used by employees as they 176 00:07:11,340 --> 00:07:13,340 were being pulled over by local law 177 00:07:13,340 --> 00:07:15,507 enforcement , telling them they had to 178 00:07:15,507 --> 00:07:17,729 go back home and shelter in place . But 179 00:07:17,729 --> 00:07:19,840 along with that , we had to make sure 180 00:07:19,840 --> 00:07:21,951 everyone was safe . So we were really 181 00:07:21,951 --> 00:07:24,150 channeling a lot of the CDC guidelines 182 00:07:24,150 --> 00:07:26,150 on social distancing and so forth . 183 00:07:26,520 --> 00:07:29,740 That's pretty impressive numbers , you 184 00:07:29,740 --> 00:07:31,851 know , we're looking at what some are 185 00:07:31,851 --> 00:07:34,129 characterizing is the second wave . Ah , 186 00:07:34,129 --> 00:07:36,129 certainly numbers of infections are 187 00:07:36,129 --> 00:07:39,210 going up Do you see that impacting 188 00:07:39,420 --> 00:07:42,030 these companies the over 20,000 . If 189 00:07:42,030 --> 00:07:44,197 you combined the D , C and May numbers 190 00:07:44,197 --> 00:07:46,490 and D L a numbers or do you feel are 191 00:07:46,490 --> 00:07:48,840 you getting word that enough processes 192 00:07:48,840 --> 00:07:52,030 in place , the you know , the PP the 193 00:07:52,030 --> 00:07:54,200 mask would have you that they continue 194 00:07:54,200 --> 00:07:56,930 operating in this environment . I think 195 00:07:56,940 --> 00:07:59,360 there will continue to be challenges . 196 00:07:59,370 --> 00:08:01,740 However , everyone is much , much 197 00:08:01,740 --> 00:08:05,090 better educated now and are proactively 198 00:08:05,450 --> 00:08:07,690 taking measures . I've been really , 199 00:08:07,690 --> 00:08:10,110 really impressed with the CEOs of small , 200 00:08:10,110 --> 00:08:12,600 mid large companies and what they are 201 00:08:12,600 --> 00:08:14,878 doing . We're trying to help them . So , 202 00:08:14,878 --> 00:08:17,760 for instance , on PPE for a while was a 203 00:08:17,760 --> 00:08:20,020 little bit difficult to obtain . It's 204 00:08:20,020 --> 00:08:22,850 gotten much easier , but again sort of 205 00:08:22,850 --> 00:08:25,390 have the easy button to hit . We have 206 00:08:25,400 --> 00:08:27,900 opened up what we call Fed Mall , which 207 00:08:27,900 --> 00:08:30,050 is an electronic marketplace at the 208 00:08:30,050 --> 00:08:33,150 Defense Logistics Agency to small 209 00:08:33,150 --> 00:08:35,250 companies as well as state and local 210 00:08:35,250 --> 00:08:37,790 governments so they can come in and buy 211 00:08:37,790 --> 00:08:40,670 PPE . In our electronic marketplace . 212 00:08:41,700 --> 00:08:45,200 We continue to reach out as needed . 213 00:08:45,200 --> 00:08:48,930 Early on , we had some governors where 214 00:08:48,930 --> 00:08:51,260 we were concerned that certain critical 215 00:08:51,260 --> 00:08:53,820 facilities in their states were closed . 216 00:08:53,930 --> 00:08:55,986 They were very helpful , so now they 217 00:08:55,986 --> 00:08:58,041 know how to reach out to us . Aziz . 218 00:08:58,041 --> 00:08:59,986 Well , we were even reaching out , 219 00:08:59,986 --> 00:09:03,680 frankly , to our embassy in Mexico to 220 00:09:03,690 --> 00:09:06,650 open up facilities there as well . So 221 00:09:07,440 --> 00:09:09,390 once you have all the safety 222 00:09:09,400 --> 00:09:11,456 requirements met and the things that 223 00:09:11,456 --> 00:09:13,456 make people confident comfortable , 224 00:09:13,456 --> 00:09:15,511 they can work . You know , the other 225 00:09:15,511 --> 00:09:17,344 piece of this , which I think is 226 00:09:17,344 --> 00:09:19,511 particularly difficult for the defense 227 00:09:19,511 --> 00:09:21,289 industrial base , is people are 228 00:09:21,289 --> 00:09:23,511 teleworking , right ? And if they don't 229 00:09:23,511 --> 00:09:25,622 have to be in the facility , uh , you 230 00:09:25,622 --> 00:09:27,678 know , we're all working from home , 231 00:09:27,678 --> 00:09:29,970 whether it's Microsoft teams or zoom or 232 00:09:29,970 --> 00:09:32,670 something else . How is the department 233 00:09:32,710 --> 00:09:34,488 and the defense industrial base 234 00:09:34,488 --> 00:09:36,488 responded to that . If you're doing 235 00:09:36,488 --> 00:09:38,599 classified work , obviously you can't 236 00:09:38,599 --> 00:09:40,710 do that from home . But for those who 237 00:09:40,710 --> 00:09:40,690 can carry out the work , I think in the 238 00:09:40,690 --> 00:09:43,270 department support all that . That the 239 00:09:43,270 --> 00:09:45,437 broadband of bands ? What do you say ? 240 00:09:45,437 --> 00:09:48,100 Yeah , so the the demand signal was 241 00:09:48,100 --> 00:09:50,450 pretty intense , obviously initially , 242 00:09:50,650 --> 00:09:53,250 and bandwidth was somewhat limited on a 243 00:09:53,250 --> 00:09:55,740 number of fronts . I will tell you here 244 00:09:55,750 --> 00:09:58,610 at D o d Dana D C . The c i . O . And 245 00:09:58,610 --> 00:10:01,390 his team really stepped upto outfit 246 00:10:01,390 --> 00:10:03,420 everyone . They had incredible 247 00:10:03,420 --> 00:10:05,642 processes with people driving up in the 248 00:10:05,642 --> 00:10:07,753 Pentagon parking lot and handing them 249 00:10:07,753 --> 00:10:09,920 all kinds of equipment , and then they 250 00:10:09,920 --> 00:10:12,980 expanded our capability . So 251 00:10:12,990 --> 00:10:16,590 from an unclassified point of view , 252 00:10:16,670 --> 00:10:19,300 things got going pretty quickly and 253 00:10:19,300 --> 00:10:21,690 everyone started becoming very 254 00:10:21,690 --> 00:10:24,180 proficient in how to tell a work . And 255 00:10:24,180 --> 00:10:26,930 how have you know 100 people on a zoom 256 00:10:26,930 --> 00:10:30,700 call or Microsoft teams and begin to 257 00:10:30,700 --> 00:10:33,110 really connect ? The classified part 258 00:10:33,120 --> 00:10:35,342 was a little trickier , but we actually 259 00:10:35,342 --> 00:10:37,564 have a lot of super capability out with 260 00:10:37,564 --> 00:10:39,740 senior people as well . And then we've 261 00:10:39,740 --> 00:10:41,930 been rotating people in two skiffs to 262 00:10:41,930 --> 00:10:44,350 keep things going . And I will tell you 263 00:10:44,360 --> 00:10:46,700 readiness has not dropped it all during 264 00:10:46,700 --> 00:10:49,410 this time . So really a shot out to 265 00:10:49,420 --> 00:10:53,050 everyone's huge efforts . I think on 266 00:10:53,050 --> 00:10:55,470 the industrial base side exactly the 267 00:10:55,470 --> 00:10:57,930 same thing everyone adjusted and 268 00:10:57,930 --> 00:11:00,410 learned . And I'll tell you , I have 269 00:11:00,410 --> 00:11:02,640 calls with CEOs . We've had Secretary 270 00:11:02,650 --> 00:11:05,070 Esper on three or four different calls 271 00:11:05,070 --> 00:11:07,014 now , and you know , people are in 272 00:11:07,014 --> 00:11:09,237 their dining rooms and living rooms and 273 00:11:09,237 --> 00:11:11,459 homes offices , and we all just kind of 274 00:11:11,459 --> 00:11:13,681 go with the flow . Yeah , you watch the 275 00:11:13,681 --> 00:11:15,681 NBC and you basically get inside to 276 00:11:15,681 --> 00:11:17,970 every CEO's ah living room or or home 277 00:11:17,970 --> 00:11:20,137 office . Probably not the same for the 278 00:11:20,137 --> 00:11:22,359 second offense or the undersecretary of 279 00:11:22,359 --> 00:11:24,581 acquisition . You know , just there's a 280 00:11:24,581 --> 00:11:26,581 couple more questions on the impact 281 00:11:26,581 --> 00:11:28,692 industrial base earlier in the crisis 282 00:11:28,692 --> 00:11:30,692 you discussed . Ah , three months . 283 00:11:30,692 --> 00:11:32,414 Slow down . Um , how would you 284 00:11:32,414 --> 00:11:34,470 characterize this so down today , in 285 00:11:34,470 --> 00:11:36,470 terms of the ability for the , uh , 286 00:11:36,470 --> 00:11:38,692 industrial based T produce , you know , 287 00:11:38,692 --> 00:11:40,914 the defense production is required . We 288 00:11:40,914 --> 00:11:44,480 have made amazing inroads and coming 289 00:11:44,480 --> 00:11:48,070 back up too close to the 290 00:11:48,070 --> 00:11:50,260 prior productivity levels , two 291 00:11:50,260 --> 00:11:53,470 segments particularly impacted that 292 00:11:53,470 --> 00:11:55,414 still are showing a bit more of an 293 00:11:55,414 --> 00:11:58,670 impact our shipbuilding on and aircraft 294 00:11:58,680 --> 00:12:02,520 production and on the aircraft 295 00:12:02,520 --> 00:12:05,770 side of things . Obviously , we have a 296 00:12:05,770 --> 00:12:08,760 lot of suppliers on prime contractors 297 00:12:08,770 --> 00:12:10,670 who are not pure play defense 298 00:12:10,670 --> 00:12:12,930 contractors . Pure play mean people who 299 00:12:12,930 --> 00:12:15,250 have commercial and other 300 00:12:16,890 --> 00:12:20,010 do exactly businesses . Exactly . So we 301 00:12:20,010 --> 00:12:22,350 have some aircraft suppliers who are 302 00:12:22,350 --> 00:12:25,110 defense Onley or pure play . Then we 303 00:12:25,110 --> 00:12:27,950 have other aircraft suppliers who are 304 00:12:27,950 --> 00:12:31,160 dual use , so they are both supporting 305 00:12:31,160 --> 00:12:34,270 the commercial industry as well as 306 00:12:34,270 --> 00:12:38,270 defense . Those dual use providers 307 00:12:38,340 --> 00:12:41,670 have been particularly hard hit , and 308 00:12:41,680 --> 00:12:44,200 sometimes that's helpful to us because 309 00:12:44,200 --> 00:12:46,270 they've been able to shift critical 310 00:12:46,270 --> 00:12:49,520 Resource is over to our programs . We 311 00:12:49,520 --> 00:12:52,030 do have to make sure that they're right 312 00:12:52,030 --> 00:12:54,660 sizing because obviously we can't 313 00:12:54,670 --> 00:12:56,920 absorb all the overhead costs that 314 00:12:56,920 --> 00:12:59,510 would go with a full up dual use 315 00:12:59,790 --> 00:13:03,590 operation . So a lot of work going on , 316 00:13:04,030 --> 00:13:07,340 tough decisions being made . But we're 317 00:13:07,340 --> 00:13:10,310 pushing through it . Um , you know , 318 00:13:10,310 --> 00:13:12,366 you mentioned dual use companies . A 319 00:13:12,366 --> 00:13:14,366 lot of companies that are pure play 320 00:13:14,366 --> 00:13:16,532 defense companies , you know , they're 321 00:13:16,532 --> 00:13:18,810 they're doing business internationally , 322 00:13:18,810 --> 00:13:18,620 and their supply chains are 323 00:13:18,620 --> 00:13:20,564 international as well . You know , 324 00:13:20,564 --> 00:13:22,676 we've seen this throughout the covert 325 00:13:22,676 --> 00:13:24,787 Christ's almost Kobe Dunmore to teach 326 00:13:24,787 --> 00:13:26,953 America about the vulnerability of our 327 00:13:26,953 --> 00:13:29,160 supply chain than any other matter . 328 00:13:30,250 --> 00:13:32,240 How do you see reliance on 329 00:13:32,240 --> 00:13:34,210 international supply chains in 330 00:13:34,210 --> 00:13:36,154 particular China impacting defense 331 00:13:36,154 --> 00:13:38,266 industrial base through this crisis ? 332 00:13:38,920 --> 00:13:41,010 This is , in a way , been the silver 333 00:13:41,010 --> 00:13:44,520 lining for us because issues that we 334 00:13:44,520 --> 00:13:48,330 identified about two years ago in our 335 00:13:48,340 --> 00:13:52,310 um , 13 806 report on the defense 336 00:13:52,310 --> 00:13:54,421 industrial base this is the executive 337 00:13:54,421 --> 00:13:58,220 order . Exactly . Executive order 13 338 00:13:58,220 --> 00:14:01,450 806 where we were tasked by the 339 00:14:01,450 --> 00:14:03,394 president . So look at the defense 340 00:14:03,394 --> 00:14:06,480 industrial base and we did that one of 341 00:14:06,490 --> 00:14:08,712 the most useful things that came out of 342 00:14:08,712 --> 00:14:11,250 that was we segmented the base . We all 343 00:14:11,250 --> 00:14:13,330 have the same lexicon than we could 344 00:14:13,330 --> 00:14:16,190 identify fragilities and we identified 345 00:14:16,200 --> 00:14:18,990 ah lot of single source 346 00:14:19,060 --> 00:14:22,800 offshore supply chain critical items . 347 00:14:22,940 --> 00:14:25,570 So we have used that as a platform over 348 00:14:25,570 --> 00:14:27,990 the last couple of years to try to make 349 00:14:27,990 --> 00:14:31,760 sure that we strengthen that industrial 350 00:14:31,760 --> 00:14:34,850 Base Cove in 19 brought all of that 351 00:14:34,860 --> 00:14:37,960 home , and it is allowed us in sort of 352 00:14:37,960 --> 00:14:40,610 a twisted way to accelerate those 353 00:14:40,620 --> 00:14:44,300 efforts . And not only four , the 354 00:14:44,300 --> 00:14:47,310 rare Earth , um elements or the 355 00:14:47,310 --> 00:14:49,490 microelectronics that we all know so 356 00:14:49,490 --> 00:14:53,250 well but also for the advanced 357 00:14:53,250 --> 00:14:55,472 pharmaceutical ingredients that go into 358 00:14:55,472 --> 00:14:57,639 our drugs that obviously are important 359 00:14:57,639 --> 00:14:59,639 for the nation and also very , very 360 00:14:59,639 --> 00:15:01,750 important for d o . D . So we've been 361 00:15:01,750 --> 00:15:05,490 able to really get that message 362 00:15:05,500 --> 00:15:08,320 out and frankly , get a little bit more 363 00:15:08,320 --> 00:15:10,000 support from Congress and the 364 00:15:10,000 --> 00:15:12,960 administration to strengthen our 365 00:15:12,960 --> 00:15:15,030 domestic industrial base . So you 366 00:15:15,030 --> 00:15:17,197 mentioned Mike Electron ICS . You also 367 00:15:17,197 --> 00:15:19,419 mentioned pharmaceutical . Yeah , I was 368 00:15:19,419 --> 00:15:21,586 one of the eye popping statistics that 369 00:15:21,586 --> 00:15:23,474 I think the whole country learned 370 00:15:23,474 --> 00:15:25,530 during coverted that I think when it 371 00:15:25,530 --> 00:15:27,641 comes to generic drugs , you know the 372 00:15:27,641 --> 00:15:29,752 ingredients over 80 plus percent come 373 00:15:29,752 --> 00:15:31,530 from China . How did How is the 374 00:15:31,530 --> 00:15:33,641 Pentagon getting ahead of the curve ? 375 00:15:33,641 --> 00:15:35,530 And is that particular data point 376 00:15:35,530 --> 00:15:37,252 generics and reliance on China 377 00:15:37,252 --> 00:15:39,363 something that impacts the force ? Or 378 00:15:39,363 --> 00:15:41,586 is that a bigger problem ? The civilian 379 00:15:41,586 --> 00:15:43,752 population ? It impacts both the force 380 00:15:43,752 --> 00:15:46,340 and the larger civilian population , 381 00:15:46,350 --> 00:15:48,730 and we , because of that , have been 382 00:15:48,740 --> 00:15:50,720 able to get a whole of government 383 00:15:50,730 --> 00:15:53,450 response . So from a d o d point of 384 00:15:53,450 --> 00:15:56,570 view , we're very fortunate toe have 385 00:15:56,570 --> 00:15:58,190 the Defense Production Act , 386 00:15:58,200 --> 00:16:00,170 particularly titled three , which 387 00:16:00,180 --> 00:16:03,450 allows us to take appropriated funds 388 00:16:03,540 --> 00:16:06,890 and make investments in the industrial 389 00:16:06,890 --> 00:16:10,270 base to increase both on capacity and 390 00:16:10,270 --> 00:16:13,200 throughput . But it's also allowed us 391 00:16:13,200 --> 00:16:15,367 to shine a light on the fact that it's 392 00:16:15,367 --> 00:16:17,800 not only having the infrastructure to 393 00:16:17,800 --> 00:16:20,050 produce all of these items , but having 394 00:16:20,050 --> 00:16:22,820 a regulatory environment that enables 395 00:16:22,820 --> 00:16:24,930 us to move through the safety and 396 00:16:24,930 --> 00:16:27,920 certification processes at a reasonable 397 00:16:27,920 --> 00:16:30,330 speed . That was part of why so many 398 00:16:30,330 --> 00:16:33,040 things moved offshore . We became 399 00:16:33,050 --> 00:16:36,390 onerous in terms of our regulations , 400 00:16:36,410 --> 00:16:39,380 and now we're coming back to , I think , 401 00:16:39,390 --> 00:16:41,830 really trying to adjudicate that and 402 00:16:41,830 --> 00:16:43,774 coming up with a reasonable set of 403 00:16:43,774 --> 00:16:45,886 standards . Great See , mentioned the 404 00:16:45,886 --> 00:16:47,997 Defense Production Act that got a lot 405 00:16:47,997 --> 00:16:50,030 of playing the press earlier in the 406 00:16:50,030 --> 00:16:52,580 crisis , when there was a shortage of 407 00:16:52,580 --> 00:16:55,630 masks and ventilators . Ah , the 408 00:16:55,630 --> 00:16:57,852 Defense Production Act seemed to be the 409 00:16:57,852 --> 00:16:59,963 vehicle the president of states would 410 00:16:59,963 --> 00:17:02,100 use to make sure that these companies 411 00:17:02,110 --> 00:17:04,332 are producing to helping produce in the 412 00:17:04,332 --> 00:17:06,610 case or not to require them to produce . 413 00:17:06,640 --> 00:17:09,370 Ah , and the like . How do you see the 414 00:17:09,370 --> 00:17:11,450 P A being used for the rest of this 415 00:17:11,450 --> 00:17:13,670 crisis ? And then in the future , a 416 00:17:13,670 --> 00:17:15,726 defense production act , a tool that 417 00:17:15,726 --> 00:17:18,560 now perhaps some thought was secondary . 418 00:17:18,560 --> 00:17:20,727 Now , with some kind of primary in the 419 00:17:20,727 --> 00:17:22,393 mind of an undersecretary for 420 00:17:22,393 --> 00:17:24,727 acquisition or department offense ? Are , 421 00:17:24,727 --> 00:17:26,671 you know , the president of states 422 00:17:26,671 --> 00:17:28,782 going forward ? It is one very , very 423 00:17:28,782 --> 00:17:30,727 important tool in our tool kit . I 424 00:17:30,727 --> 00:17:34,270 would say we have used it both for 425 00:17:34,280 --> 00:17:37,460 medical resource is whether that be and 426 00:17:37,460 --> 00:17:41,270 95 masks or whether it be 427 00:17:41,270 --> 00:17:44,790 swabs for testing . Ah , we have also 428 00:17:44,790 --> 00:17:47,240 used it for our own defence industrial 429 00:17:47,240 --> 00:17:49,430 base , so it's a very , very important 430 00:17:49,430 --> 00:17:52,300 tool , but it's only one . We worked 431 00:17:52,300 --> 00:17:55,220 for about five weeks with our legal 432 00:17:55,220 --> 00:17:58,730 staffs to find a way to reach 433 00:17:58,740 --> 00:18:02,010 into HHS Health and Human 434 00:18:02,010 --> 00:18:05,310 Services . $17 billion that they 435 00:18:05,320 --> 00:18:07,970 received through The Cares Act to be 436 00:18:07,970 --> 00:18:11,130 able to transfer money two d o . D . To 437 00:18:11,130 --> 00:18:13,950 enable us to do contracting on their 438 00:18:13,950 --> 00:18:17,860 behalf as well as to do investment in 439 00:18:17,860 --> 00:18:20,390 industrial capacity and throughput . So 440 00:18:20,390 --> 00:18:22,950 we have taken the $1,000,000,000 that 441 00:18:22,950 --> 00:18:26,360 we received for DP a Title three 442 00:18:26,360 --> 00:18:28,360 funding through The Cares Act , and 443 00:18:28,360 --> 00:18:30,310 we've used a portion of that for 444 00:18:30,310 --> 00:18:32,800 medical Resource is and then we've used 445 00:18:32,800 --> 00:18:35,820 another portion of that for our defense 446 00:18:35,820 --> 00:18:38,040 industrial base . So you mentioned 447 00:18:38,040 --> 00:18:39,930 before semiconductors is a key 448 00:18:39,930 --> 00:18:41,874 vulnerability that's been known in 449 00:18:41,874 --> 00:18:44,152 national defense circles for some time . 450 00:18:44,152 --> 00:18:46,820 It was a key area of focus the previous 451 00:18:46,820 --> 00:18:48,876 administration , this administration 452 00:18:48,876 --> 00:18:51,098 with enough security strategy . To what 453 00:18:51,098 --> 00:18:53,320 extent is the Defense Production Act of 454 00:18:53,320 --> 00:18:55,490 vehicle and authority ? You would use 455 00:18:55,950 --> 00:18:57,783 toe help in the case . Let's say 456 00:18:57,783 --> 00:18:59,839 Intel's looking at building a fab in 457 00:18:59,839 --> 00:19:01,894 Arizona . Also recently , we had the 458 00:19:01,894 --> 00:19:03,960 announcement with ah Taiwan 459 00:19:03,960 --> 00:19:06,320 Semiconductor Company . Also , TSMC 460 00:19:06,320 --> 00:19:09,230 coming to Arizona's well , Danny spiel 461 00:19:09,230 --> 00:19:11,397 variety of incentives for a company to 462 00:19:11,397 --> 00:19:13,730 do That's important . You think for now , 463 00:19:13,730 --> 00:19:15,786 security toe have a domestic kind of 464 00:19:15,786 --> 00:19:18,160 fabrication capacity for semiconductors . 465 00:19:18,360 --> 00:19:20,610 Michalek tronics , but is D . P . A . A 466 00:19:20,610 --> 00:19:22,890 part of that . Or is that authority uh , 467 00:19:22,900 --> 00:19:25,122 too small ? Not funded enough to really 468 00:19:25,130 --> 00:19:27,186 impact that kind of problem that you 469 00:19:27,186 --> 00:19:30,420 have with microelectronics . So dp a 470 00:19:30,430 --> 00:19:34,370 Maybe part of the solution . We have 471 00:19:34,370 --> 00:19:38,220 basically obligated about 2/3 472 00:19:38,230 --> 00:19:40,286 of the money , the $1,000,000,000 we 473 00:19:40,286 --> 00:19:42,397 got through The Cares Act and we have 474 00:19:42,397 --> 00:19:44,563 plans to get on contract . The balance 475 00:19:44,563 --> 00:19:46,980 of that . We are hopeful there will be 476 00:19:46,980 --> 00:19:50,150 a traunch for coming along and a follow 477 00:19:50,150 --> 00:19:53,340 on to the Cares Act we have at O and B 478 00:19:53,340 --> 00:19:57,060 right now Requests form or DP a title 479 00:19:57,060 --> 00:19:59,190 three money . But I think the 480 00:19:59,190 --> 00:20:02,510 microelectronics challenge is even 481 00:20:02,510 --> 00:20:05,870 larger than that . And in fact , about 482 00:20:05,870 --> 00:20:09,550 five months ago my team started a study 483 00:20:09,760 --> 00:20:12,050 to really characterize the 484 00:20:12,060 --> 00:20:14,660 microelectronics industrial base 485 00:20:14,740 --> 00:20:16,907 because it's a little bit difficult to 486 00:20:16,907 --> 00:20:19,250 understand from foundries to packaging , 487 00:20:19,480 --> 00:20:22,080 to logic to memory , who are the 488 00:20:22,080 --> 00:20:24,190 players who are domestic , who are 489 00:20:24,190 --> 00:20:28,100 offshore , and we have just finished a 490 00:20:28,100 --> 00:20:30,620 piece of work internally that we are 491 00:20:30,620 --> 00:20:33,120 now beginning to socialize in the 492 00:20:33,130 --> 00:20:35,352 interagency throughout the government , 493 00:20:35,430 --> 00:20:38,790 saying we have a challenge in that the 494 00:20:38,790 --> 00:20:41,450 majority of the intellectual property 495 00:20:41,520 --> 00:20:43,960 associated with microelectronics is 496 00:20:43,960 --> 00:20:46,080 generated in the U . S . But the 497 00:20:46,080 --> 00:20:48,150 majority of the fabrication and 498 00:20:48,150 --> 00:20:51,480 packaging is done offshore and that 499 00:20:51,530 --> 00:20:54,510 introduces risks to our supply chains 500 00:20:54,540 --> 00:20:56,590 and takes away from our economic 501 00:20:56,590 --> 00:20:59,730 security . So we are thinking about a 502 00:20:59,730 --> 00:21:01,800 whole number of private public 503 00:21:01,800 --> 00:21:04,780 partnerships to bring mawr of that back 504 00:21:04,780 --> 00:21:08,240 here . One of the creative ways that 505 00:21:08,240 --> 00:21:10,840 we're looking at using DP A Title three 506 00:21:11,130 --> 00:21:14,230 is following up on an executive order 507 00:21:14,240 --> 00:21:16,880 that was signed out just about a month 508 00:21:16,880 --> 00:21:19,840 ago . Ah , a little over a month ago 509 00:21:19,850 --> 00:21:23,050 now by the president . That basically 510 00:21:23,060 --> 00:21:25,110 gives the Development Finance 511 00:21:25,110 --> 00:21:28,970 Corporation authority to use DP 512 00:21:28,970 --> 00:21:32,710 a title three as collateral money 513 00:21:32,920 --> 00:21:36,270 to grant loans to re 514 00:21:36,270 --> 00:21:39,500 sure critical capability to the U . S . 515 00:21:39,690 --> 00:21:41,950 So we again are working through all the 516 00:21:41,950 --> 00:21:45,300 legalities of that . But I'm partnering 517 00:21:45,300 --> 00:21:47,540 very tightly with Adam Bowler over a 518 00:21:47,550 --> 00:21:51,090 DFC and we're looking at What are those 519 00:21:51,090 --> 00:21:53,560 critical capabilities that we should re 520 00:21:53,560 --> 00:21:56,100 sure both in The medical resource is 521 00:21:56,100 --> 00:21:59,340 side of things as well as the 522 00:21:59,350 --> 00:22:02,220 industrial base writ large . But where 523 00:22:02,220 --> 00:22:05,580 defense really has a critical need that 524 00:22:05,580 --> 00:22:08,160 then could help industry in general . 525 00:22:08,170 --> 00:22:10,260 And microelectronics is one of those 526 00:22:10,420 --> 00:22:12,720 that's fascinating and re shoring , you 527 00:22:12,720 --> 00:22:15,800 know , is it seems to be the priority . 528 00:22:15,800 --> 00:22:17,911 But let's go back to basics on that . 529 00:22:18,600 --> 00:22:20,489 You mentioned that in the case of 530 00:22:20,489 --> 00:22:22,711 microelectronic , expecting is true for 531 00:22:22,711 --> 00:22:24,600 other sectors . Well , the United 532 00:22:24,600 --> 00:22:26,211 States holds the I p for the 533 00:22:26,211 --> 00:22:26,130 manufacturing , for a variety of 534 00:22:26,130 --> 00:22:29,720 reasons resides offshore . Why is it 535 00:22:29,720 --> 00:22:32,840 that that is ah , danger If we can keep 536 00:22:32,840 --> 00:22:34,951 the I P . What's the vulnerability of 537 00:22:34,951 --> 00:22:37,062 being offshore ? Is that somehow that 538 00:22:37,062 --> 00:22:39,230 eventually the I p migrates or even 539 00:22:39,230 --> 00:22:40,960 feeling to my p you know the 540 00:22:40,960 --> 00:22:44,220 manufacturing is at risk for certain 541 00:22:44,220 --> 00:22:46,380 items not within the United States . 542 00:22:46,750 --> 00:22:50,300 They're multiple issues there . One is 543 00:22:50,300 --> 00:22:53,100 security of supply . We saw when Cove 544 00:22:53,100 --> 00:22:56,410 it hit all the flights stopped and we 545 00:22:56,420 --> 00:22:58,610 actually had what was called an air 546 00:22:58,610 --> 00:23:01,060 bridge that a group from the Pentagon 547 00:23:01,060 --> 00:23:04,090 went over to HHS and FEMA , and we're 548 00:23:04,090 --> 00:23:06,090 still supporting them in sort of an 549 00:23:06,090 --> 00:23:08,890 emergency short term way . And what do 550 00:23:08,890 --> 00:23:11,700 we dio ? We set up flights to bring 551 00:23:11,700 --> 00:23:14,920 back all kinds of medical equipment and 552 00:23:14,920 --> 00:23:18,640 PPE e that was produced offshore that 553 00:23:18,640 --> 00:23:20,740 we owned . But we couldn't get back 554 00:23:20,740 --> 00:23:22,851 here , and this is all of the medical 555 00:23:22,851 --> 00:23:24,962 distributors throughout the country . 556 00:23:24,962 --> 00:23:26,962 So one is not being able to get the 557 00:23:26,962 --> 00:23:29,650 supply . That's one risk . Another , 558 00:23:29,650 --> 00:23:33,020 more nefarious kind of issue we have is 559 00:23:33,030 --> 00:23:36,310 that we could have implants in those 560 00:23:36,310 --> 00:23:39,560 electron ICS . So all of a sudden , as 561 00:23:39,560 --> 00:23:42,360 we've seen in D . J Ai drones , for 562 00:23:42,360 --> 00:23:45,960 instance , we have US systems calling 563 00:23:45,960 --> 00:23:49,670 home to China . We also have the 564 00:23:49,680 --> 00:23:51,847 theft of intellectual property that is 565 00:23:51,847 --> 00:23:54,890 very well documented , where what we 566 00:23:54,890 --> 00:23:57,780 think we license for a specific use is 567 00:23:57,780 --> 00:24:00,390 all of a sudden repurposed into 568 00:24:00,530 --> 00:24:04,420 capability organic to China . Another 569 00:24:04,420 --> 00:24:07,590 risk is the fact that although we have 570 00:24:07,600 --> 00:24:09,780 the intellectual property surrounding 571 00:24:09,780 --> 00:24:12,800 design , quite often , just as 572 00:24:12,800 --> 00:24:15,710 important is the manufacturing know how 573 00:24:15,720 --> 00:24:19,030 and you accumulate that know how over 574 00:24:19,030 --> 00:24:21,590 time through all the cycles of 575 00:24:21,600 --> 00:24:23,990 practicing and producing . I mean , 576 00:24:24,180 --> 00:24:25,736 you're does he did a lot of 577 00:24:25,736 --> 00:24:27,680 international prior to come to the 578 00:24:27,680 --> 00:24:29,791 Pentagon . Imagine that something you 579 00:24:29,791 --> 00:24:29,590 always kept an eye on when you did 580 00:24:29,590 --> 00:24:32,160 international JV , right ? Absolutely , 581 00:24:32,170 --> 00:24:35,920 Absolutely . And finally we lose 582 00:24:35,930 --> 00:24:39,370 those good jobs that we really need 583 00:24:39,370 --> 00:24:42,550 here in the US So all kinds of risks 584 00:24:42,560 --> 00:24:45,820 associate ID with that , um , that 585 00:24:45,820 --> 00:24:47,931 we're concerned about . And frankly , 586 00:24:47,931 --> 00:24:50,970 it's not on Lee what is done 587 00:24:50,980 --> 00:24:54,680 offshore . We are growing mawr and more 588 00:24:54,680 --> 00:24:57,420 concerned about what I call adversarial 589 00:24:57,420 --> 00:25:00,480 capital coming in and taking 590 00:25:00,490 --> 00:25:04,180 advantage off these uncertain times 591 00:25:04,240 --> 00:25:06,440 when their liquidity issues with 592 00:25:06,440 --> 00:25:09,760 critical technological kinds of 593 00:25:10,160 --> 00:25:13,350 systems . So you have small companies , 594 00:25:13,360 --> 00:25:15,860 high tech companies that all of a 595 00:25:15,860 --> 00:25:17,980 sudden have a liquidity crisis . They 596 00:25:17,980 --> 00:25:19,924 cannot get a line of credit . They 597 00:25:19,924 --> 00:25:22,147 cannot get alone . So all of a sudden , 598 00:25:22,147 --> 00:25:24,600 adversarial capital comes in and 599 00:25:24,600 --> 00:25:27,690 acquires them , and then we lose our 600 00:25:27,690 --> 00:25:30,170 critical intellectual property . So we 601 00:25:30,170 --> 00:25:34,030 are very , very vigilant about that 602 00:25:34,080 --> 00:25:37,270 and trying to defend against that and 603 00:25:37,270 --> 00:25:40,400 in fact , proactively looking at 604 00:25:40,400 --> 00:25:42,940 sources of trusted capital for those 605 00:25:42,940 --> 00:25:45,107 very same company . I want to get back 606 00:25:45,107 --> 00:25:46,996 to the adversarial capital versus 607 00:25:46,996 --> 00:25:49,162 trusted capital a minute , but you did 608 00:25:49,162 --> 00:25:51,273 mention China a couple of times . And 609 00:25:51,273 --> 00:25:53,440 the response , Um , there's been a lot 610 00:25:53,440 --> 00:25:55,551 of talk about the couple ing Ah , the 611 00:25:55,551 --> 00:25:58,490 United States economically , from China 612 00:25:58,500 --> 00:26:00,990 on the content is competition . You've 613 00:26:00,990 --> 00:26:04,420 spoken about the defense industrial 614 00:26:04,420 --> 00:26:06,253 base , certainly for the defense 615 00:26:06,253 --> 00:26:08,087 industrial base and perhaps more 616 00:26:08,087 --> 00:26:10,142 broadly or now , security innovation 617 00:26:10,142 --> 00:26:12,420 based . That would be the primary area , 618 00:26:12,540 --> 00:26:14,596 I would think where decoupling would 619 00:26:14,596 --> 00:26:16,651 need to be the area of focus , those 620 00:26:16,680 --> 00:26:19,730 types of technologies and capabilities 621 00:26:19,880 --> 00:26:22,047 that are critical to not security . We 622 00:26:22,047 --> 00:26:24,940 can't be reliant on ah competitors in 623 00:26:24,940 --> 00:26:27,051 this case , in this case , China . Do 624 00:26:27,051 --> 00:26:29,107 you find that you're getting support 625 00:26:29,107 --> 00:26:31,162 not just from the defense industrial 626 00:26:31,162 --> 00:26:33,162 base , which would be unable , pure 627 00:26:33,162 --> 00:26:35,273 play , defense investments , business 628 00:26:35,273 --> 00:26:37,384 with China . But talk to us about the 629 00:26:37,384 --> 00:26:39,607 feedback you're getting now , since you 630 00:26:39,607 --> 00:26:41,773 really are the key interlocutor of the 631 00:26:41,773 --> 00:26:43,996 department defends with chief executive 632 00:26:43,996 --> 00:26:46,107 officer officers with CEOs from those 633 00:26:46,107 --> 00:26:48,273 companies that perhaps view themselves 634 00:26:48,273 --> 00:26:50,440 as commercial but still are critical . 635 00:26:50,440 --> 00:26:50,180 The department offense . What is their 636 00:26:50,370 --> 00:26:52,481 attitude and thinking with respect to 637 00:26:52,600 --> 00:26:54,711 China and the department fence coming 638 00:26:54,711 --> 00:26:57,080 in and saying , Hey , we need you to 639 00:26:57,270 --> 00:26:59,437 bring that back to the United States . 640 00:26:59,437 --> 00:27:01,437 We can't have you selling these key 641 00:27:01,437 --> 00:27:03,603 capabilities with China . You can't do 642 00:27:03,603 --> 00:27:05,826 this joint venture Talk to us about the 643 00:27:05,826 --> 00:27:07,548 commercial environment and the 644 00:27:07,548 --> 00:27:09,381 responsiveness to the department 645 00:27:09,381 --> 00:27:12,260 defense concerns . So prior to Cove , 646 00:27:12,260 --> 00:27:15,890 it most CEOs were very , very savvy 647 00:27:15,900 --> 00:27:19,060 about the challenges of doing business 648 00:27:19,060 --> 00:27:22,880 in China in terms of not being able to 649 00:27:22,880 --> 00:27:25,700 really hold on any trade secrets or 650 00:27:25,710 --> 00:27:28,010 intellectual property . And they , very 651 00:27:28,010 --> 00:27:31,000 much we're tryingto only have mawr 652 00:27:31,000 --> 00:27:33,480 commercial or less cutting edge 653 00:27:33,480 --> 00:27:37,100 technology in China . That being said 654 00:27:37,260 --> 00:27:40,370 there wasn't really a compelling reason 655 00:27:41,020 --> 00:27:44,510 to re sure some of that capability or 656 00:27:44,510 --> 00:27:48,250 to do investments domestically . One 657 00:27:48,250 --> 00:27:52,070 of the I think beneficial outcomes Off 658 00:27:52,080 --> 00:27:55,000 Cove it is that the general public now 659 00:27:55,010 --> 00:27:58,040 understands the threat that China poses , 660 00:27:58,050 --> 00:28:00,320 and I'm not suggesting that we become 661 00:28:00,320 --> 00:28:02,600 total isolationists . However , 662 00:28:02,610 --> 00:28:05,490 critical technology should not reside 663 00:28:05,500 --> 00:28:07,950 in China , and we cannot be 100% 664 00:28:08,430 --> 00:28:10,480 dependent on China for things like 665 00:28:10,490 --> 00:28:13,640 pharmaceuticals . So I have seen a 666 00:28:13,640 --> 00:28:16,940 number of CEOs reach out and have 667 00:28:16,940 --> 00:28:20,330 conversations with me about the fact 668 00:28:20,340 --> 00:28:23,200 that they're more willing now to talk 669 00:28:23,200 --> 00:28:25,700 about a consortium going together for 670 00:28:25,700 --> 00:28:27,900 trusted on microelectronics , for 671 00:28:27,900 --> 00:28:30,650 instance . They are also being very , 672 00:28:30,650 --> 00:28:32,610 very generous with their time , 673 00:28:32,680 --> 00:28:35,530 explaining to a variety of government 674 00:28:35,540 --> 00:28:37,930 officials how their business works , 675 00:28:37,940 --> 00:28:40,440 what they need , what they don't need . 676 00:28:40,450 --> 00:28:43,350 And I will say , right now we are in 677 00:28:43,350 --> 00:28:45,830 the midst of really some dynamic 678 00:28:45,830 --> 00:28:47,830 discussions that I think are very , 679 00:28:47,830 --> 00:28:51,550 very exciting because we are on the 680 00:28:51,550 --> 00:28:54,970 cusp of needing some kind of national 681 00:28:54,970 --> 00:28:58,360 policy to make sure we're supportive on 682 00:28:58,360 --> 00:29:00,730 the government side off bringing these 683 00:29:00,730 --> 00:29:02,970 critical capabilities back and again 684 00:29:03,180 --> 00:29:07,130 that ranges all the way from capital 685 00:29:07,130 --> 00:29:09,740 to make the investments to local and 686 00:29:09,740 --> 00:29:12,700 state and federal tax incentives to 687 00:29:12,700 --> 00:29:15,440 regulatory easing of burdens . So we 688 00:29:15,440 --> 00:29:18,630 really have to look at the entire scope 689 00:29:18,640 --> 00:29:22,370 off that kind of supply chain the whole 690 00:29:22,380 --> 00:29:25,030 thread and understand what makes sense 691 00:29:25,040 --> 00:29:28,270 and , frankly , as d o . D . We have a 692 00:29:28,270 --> 00:29:30,900 compelling urgent in the semi , you 693 00:29:30,900 --> 00:29:34,000 know , large need here , and we could 694 00:29:34,000 --> 00:29:36,111 be the leaders and I think have a lot 695 00:29:36,111 --> 00:29:38,222 of fast followers . You know , As you 696 00:29:38,222 --> 00:29:40,610 know , the Reagan . It's Teoh published 697 00:29:40,610 --> 00:29:43,710 AH , report by our Task force co 698 00:29:43,710 --> 00:29:45,766 chaired by former Senator Jim Talent 699 00:29:45,766 --> 00:29:47,932 and former deputy Secretary Bob Work , 700 00:29:47,932 --> 00:29:50,099 where they hit on this exact issue set 701 00:29:50,099 --> 00:29:52,260 where in these key knows government 702 00:29:52,260 --> 00:29:54,371 really needs to organize in a fashion 703 00:29:54,371 --> 00:29:56,093 that could bring in , ah , the 704 00:29:56,093 --> 00:29:58,260 commercial sector . Because so much of 705 00:29:58,260 --> 00:30:00,538 technology zone that you're describing , 706 00:30:00,538 --> 00:30:02,482 uh , really a resident outside the 707 00:30:02,482 --> 00:30:04,649 department defense and live in markets 708 00:30:04,649 --> 00:30:06,538 that are four far larger than the 709 00:30:06,538 --> 00:30:08,649 defense Industrial base wasn't always 710 00:30:08,649 --> 00:30:08,200 the case in the 20th century , but is 711 00:30:08,200 --> 00:30:10,820 that is the case today . Five G's is 712 00:30:10,820 --> 00:30:13,040 one of those seems to be critical to 713 00:30:13,040 --> 00:30:15,096 Nash . Security relies on the on the 714 00:30:15,096 --> 00:30:17,096 semiconductors and microelectronics 715 00:30:17,096 --> 00:30:19,470 that you've described , but It's kind 716 00:30:19,470 --> 00:30:21,637 of interesting as we think about China 717 00:30:21,637 --> 00:30:23,859 is . On the one hand , we want to bring 718 00:30:24,100 --> 00:30:26,830 the capability the I p in the 719 00:30:26,830 --> 00:30:29,052 manufacturing back United States . From 720 00:30:29,052 --> 00:30:31,108 the other hand , we want to sell our 721 00:30:31,108 --> 00:30:33,163 technology into those very markets . 722 00:30:33,350 --> 00:30:36,430 Right . We need U . S . Businesses need 723 00:30:36,430 --> 00:30:38,652 to sell into China . How do we weigh in 724 00:30:38,652 --> 00:30:40,819 balance that if we close off the China 725 00:30:40,819 --> 00:30:42,986 market and hard , let's say , the five 726 00:30:42,986 --> 00:30:46,760 g ah sector than out those companies ? 727 00:30:46,760 --> 00:30:48,704 US companies really have difficult 728 00:30:48,704 --> 00:30:50,927 meeting . Their bottom line succeeded . 729 00:30:50,927 --> 00:30:53,038 You've nailed the issue right there , 730 00:30:53,038 --> 00:30:55,350 and that's again part of an ongoing 731 00:30:55,350 --> 00:30:58,680 discussion amongst Treasury , Commerce , 732 00:30:58,680 --> 00:31:01,690 state and D . O . D . And so where the 733 00:31:01,690 --> 00:31:04,510 red lines , if you will in terms of 734 00:31:04,510 --> 00:31:07,940 what can be exported and imported . And 735 00:31:07,940 --> 00:31:10,520 we're sorting our way through that . As 736 00:31:10,520 --> 00:31:12,631 you well know , we've had legislation 737 00:31:12,631 --> 00:31:14,700 last couple years banning certain 738 00:31:14,700 --> 00:31:17,440 companies like Wal away zte and so 739 00:31:17,440 --> 00:31:20,790 forth from supplying first d o d . And 740 00:31:20,790 --> 00:31:23,270 then the government . We have to figure 741 00:31:23,270 --> 00:31:26,750 it out . I think eventually what 742 00:31:26,760 --> 00:31:29,690 we need and what we're trying to do 743 00:31:29,690 --> 00:31:32,650 within D . O . D . Is come up with a 744 00:31:32,650 --> 00:31:36,210 way that we can get microelectronics 745 00:31:36,250 --> 00:31:38,730 with zero trust . So in other words , 746 00:31:38,760 --> 00:31:42,140 we can understand whether or not the 747 00:31:42,140 --> 00:31:45,750 original design had the integrity is 748 00:31:45,750 --> 00:31:47,510 still there , whether they are 749 00:31:47,510 --> 00:31:50,190 counterfeit parts , whether they have 750 00:31:50,200 --> 00:31:52,830 been manipulated in any way . We still 751 00:31:52,830 --> 00:31:55,052 are a ways away from that , although we 752 00:31:55,052 --> 00:31:57,386 have some pretty exciting work going on . 753 00:31:57,386 --> 00:31:59,608 So until we get to that point , we need 754 00:31:59,608 --> 00:32:02,040 the trusted sources . But I think and 755 00:32:02,040 --> 00:32:04,040 we've got to figure out what we can 756 00:32:04,040 --> 00:32:06,096 sell , what we can important what we 757 00:32:06,096 --> 00:32:07,762 can't . And that's a whole of 758 00:32:07,762 --> 00:32:09,818 government effort . However , that's 759 00:32:09,818 --> 00:32:11,929 not a long term solution . We have to 760 00:32:11,929 --> 00:32:14,090 get to zero trust , just like getting 761 00:32:14,090 --> 00:32:16,201 into networks and so forth . And it's 762 00:32:16,201 --> 00:32:18,750 not gonna be a digital event from 0 to 763 00:32:18,750 --> 00:32:20,917 1 . We're gonna have to crawl , walk , 764 00:32:20,917 --> 00:32:23,600 run . And that's frankly where we can 765 00:32:23,600 --> 00:32:25,433 learn from commercial industry . 766 00:32:25,530 --> 00:32:28,430 Absolutely . They need to have , uh , 767 00:32:28,710 --> 00:32:30,821 you know , technology . They can rely 768 00:32:30,821 --> 00:32:32,932 on that . They can put into different 769 00:32:32,932 --> 00:32:35,099 markets the same time , not lose their 770 00:32:35,099 --> 00:32:36,988 I p not lose our adventures , the 771 00:32:36,988 --> 00:32:39,210 business . So it it is similar , On the 772 00:32:39,210 --> 00:32:41,154 other hand , through the tools the 773 00:32:41,154 --> 00:32:43,154 government uses to date are kind of 774 00:32:43,154 --> 00:32:45,043 20th century tools in the form of 775 00:32:45,043 --> 00:32:47,154 export controls and the like , really 776 00:32:47,154 --> 00:32:49,321 kind of difficult to apply to the 21st 777 00:32:49,321 --> 00:32:51,377 century technology . You know , it's 778 00:32:51,377 --> 00:32:53,543 putting an export control , you know , 779 00:32:53,543 --> 00:32:55,840 on ammunition . Doing this mission is 780 00:32:55,840 --> 00:32:57,784 one thing , but putting on a piece 781 00:32:57,784 --> 00:32:59,729 technology that billions of people 782 00:32:59,729 --> 00:33:01,896 around the world relying use every day 783 00:33:01,896 --> 00:33:01,460 is more difficult , Right , right , 784 00:33:01,460 --> 00:33:03,930 Right now . And that brings up a 785 00:33:03,930 --> 00:33:06,140 critical point here . I've made a lot 786 00:33:06,140 --> 00:33:08,251 of comments about industry and what's 787 00:33:08,251 --> 00:33:12,060 going on . We in the government cannot 788 00:33:12,070 --> 00:33:15,220 let a good crisis go unused here . And 789 00:33:15,220 --> 00:33:18,890 we need Teoh really build on how we've 790 00:33:18,890 --> 00:33:22,150 learned to do things quickly with less 791 00:33:22,150 --> 00:33:24,261 red tape , if you will , drawing this 792 00:33:24,261 --> 00:33:28,120 crisis and not back slide and also use 793 00:33:28,120 --> 00:33:30,610 this , I think , is a wake up call to 794 00:33:30,610 --> 00:33:32,832 do things a little bit differently . As 795 00:33:32,832 --> 00:33:35,150 you're suggesting , we are a bit caught 796 00:33:35,160 --> 00:33:38,760 up in the past . So that's sort of my 797 00:33:38,760 --> 00:33:41,180 personal challenge . How do you not 798 00:33:41,190 --> 00:33:45,180 lose the sort of energy to keep 799 00:33:45,190 --> 00:33:47,540 pushing at that Every hour , every day , 800 00:33:47,540 --> 00:33:50,390 every week , every month ? Yeah . No , 801 00:33:50,400 --> 00:33:52,511 that makes a lot of sense . I want to 802 00:33:52,511 --> 00:33:54,344 dive in a little bit , son . You 803 00:33:54,344 --> 00:33:56,511 referenced a couple of times already . 804 00:33:56,511 --> 00:33:58,567 Which is this trusted capital versus 805 00:33:58,567 --> 00:34:00,622 adversarial capital ? What ? I think 806 00:34:00,622 --> 00:34:02,622 you're getting a bill to ask you to 807 00:34:02,622 --> 00:34:04,678 take a minute to unpack . It is , as 808 00:34:04,678 --> 00:34:06,900 we've looked at competition in China in 809 00:34:06,900 --> 00:34:09,300 particular . Not only have they stolen 810 00:34:09,310 --> 00:34:11,790 intellectual property , exploited joint 811 00:34:11,790 --> 00:34:13,846 ventures and taking manufacturing in 812 00:34:13,846 --> 00:34:16,068 the night from United States to China , 813 00:34:16,200 --> 00:34:18,470 but they've also sought to take their 814 00:34:18,470 --> 00:34:21,180 capital , make investments at the 815 00:34:21,180 --> 00:34:24,420 venture stagy than to own and 816 00:34:24,750 --> 00:34:27,810 take Ah , us know how and then rye 817 00:34:27,810 --> 00:34:30,630 grated into , uh , China , which of 818 00:34:30,630 --> 00:34:32,686 course , is autocratic and few . You 819 00:34:32,686 --> 00:34:35,380 have this fusion between the sive mil . 820 00:34:36,410 --> 00:34:39,510 How does adversarial capital , uh , 821 00:34:39,600 --> 00:34:41,770 challenge us ? And what does trusted 822 00:34:41,770 --> 00:34:43,714 capital seek to do to address that 823 00:34:43,714 --> 00:34:47,670 challenge ? So right now , um , we 824 00:34:47,670 --> 00:34:49,820 use sippy is countering foreign 825 00:34:49,820 --> 00:34:52,570 investment in the US That authority to 826 00:34:52,570 --> 00:34:54,980 be able is the government to intervene 827 00:34:54,990 --> 00:34:57,630 in transactions and even unwind 828 00:34:57,630 --> 00:35:00,930 transactions where we believe critical 829 00:35:00,940 --> 00:35:03,580 technology critical manufacturing 830 00:35:03,580 --> 00:35:07,210 capability has been procured by 831 00:35:07,220 --> 00:35:10,770 adversaries of the US That's necessary . 832 00:35:11,190 --> 00:35:13,860 It's difficulty is time consuming , but 833 00:35:13,860 --> 00:35:16,430 it's not sufficient . So what we 834 00:35:16,430 --> 00:35:19,280 believe is we need to get on the other 835 00:35:19,280 --> 00:35:22,160 side of this not only play defense but 836 00:35:22,160 --> 00:35:25,010 play offense . So we'd like to think 837 00:35:25,010 --> 00:35:27,390 that capital markets are very , very 838 00:35:27,400 --> 00:35:30,060 efficient and that capital finds 839 00:35:30,590 --> 00:35:34,310 companies in need of investment . And 840 00:35:34,310 --> 00:35:36,310 then there's a virtuous cycle where 841 00:35:36,310 --> 00:35:38,421 everything goes along for the large , 842 00:35:38,510 --> 00:35:40,540 the largest part . That is true . 843 00:35:40,590 --> 00:35:42,440 However , we wouldn't have this 844 00:35:42,440 --> 00:35:45,300 adversarial capital coming in and 845 00:35:45,300 --> 00:35:47,690 investing in companies if that was a 846 00:35:47,690 --> 00:35:50,100 totally , totally efficient market . So 847 00:35:50,100 --> 00:35:51,933 what we have been doing , really 848 00:35:51,933 --> 00:35:55,040 prototyping for the last year is coming 849 00:35:55,040 --> 00:35:58,570 up with a rule set by which we can look 850 00:35:58,570 --> 00:36:00,348 at companies and understand the 851 00:36:00,348 --> 00:36:02,540 beneficial ownership . Who actually 852 00:36:02,630 --> 00:36:05,840 owns the company . Also look at capital 853 00:36:05,840 --> 00:36:07,784 providers , whether it's a venture 854 00:36:07,784 --> 00:36:09,840 capitalist or even a family fund . 855 00:36:10,050 --> 00:36:12,400 Understand the true source of their 856 00:36:12,400 --> 00:36:14,760 funds . Go through this rule set , 857 00:36:15,420 --> 00:36:18,260 basically proclaimed them clean on 858 00:36:18,260 --> 00:36:20,630 either side and then put them into an 859 00:36:20,630 --> 00:36:23,090 electronic marketplace . That's kind of 860 00:36:23,090 --> 00:36:25,090 like a dating service where one can 861 00:36:25,090 --> 00:36:27,201 look at the other and then we come in 862 00:36:27,201 --> 00:36:29,920 is D o d . Branding saying here 863 00:36:29,920 --> 00:36:33,280 segments of the market place that we 864 00:36:33,280 --> 00:36:35,560 believe are important for our future 865 00:36:35,570 --> 00:36:38,120 and hey , by the way , here's a company 866 00:36:38,120 --> 00:36:39,953 that's gotten a small business , 867 00:36:39,953 --> 00:36:42,176 innovative research loan , and here's a 868 00:36:42,176 --> 00:36:44,430 company that has this and that so that 869 00:36:44,430 --> 00:36:46,840 there is somewhat branded by D . O . D . 870 00:36:46,880 --> 00:36:49,000 We have had some live events and some 871 00:36:49,000 --> 00:36:51,420 virtual events , but we are on the cusp 872 00:36:51,430 --> 00:36:53,440 of actually putting this into an 873 00:36:53,440 --> 00:36:56,420 electronic marketplace because we know 874 00:36:56,520 --> 00:36:58,670 that there are sources of capital out 875 00:36:58,680 --> 00:37:02,400 there looking for investments that not 876 00:37:02,410 --> 00:37:04,780 only have a good return but contribute 877 00:37:04,780 --> 00:37:06,870 to our national security . I think 878 00:37:06,870 --> 00:37:08,990 there's a huge unmet need for that . 879 00:37:09,000 --> 00:37:11,110 It's not simple to do . That's why 880 00:37:11,110 --> 00:37:13,277 we've been talking about it for a year 881 00:37:13,277 --> 00:37:15,054 and very quietly working in the 882 00:37:15,054 --> 00:37:17,360 background . But I have great 883 00:37:17,370 --> 00:37:20,120 expectations that in a few months 884 00:37:20,210 --> 00:37:22,377 you're going to see this roll out in a 885 00:37:22,377 --> 00:37:24,450 very , very significant way . That's 886 00:37:24,450 --> 00:37:26,672 fascinating . I think it's I understand 887 00:37:26,672 --> 00:37:28,783 you can have a twin benefits . On the 888 00:37:28,783 --> 00:37:30,940 one hand , it would counter the 889 00:37:30,940 --> 00:37:32,662 adversarial capital , which is 890 00:37:32,662 --> 00:37:34,829 objective number one , perhaps why you 891 00:37:34,830 --> 00:37:36,886 focus on this year . But second , it 892 00:37:36,886 --> 00:37:38,886 would given opportunity for new and 893 00:37:38,886 --> 00:37:40,830 different types of capital venture 894 00:37:40,830 --> 00:37:42,663 capital , for example , to start 895 00:37:42,663 --> 00:37:44,663 looking at the defense sector . The 896 00:37:44,663 --> 00:37:46,719 needs the department offends were in 897 00:37:46,719 --> 00:37:48,941 the past . Perhaps they haven't focused 898 00:37:48,941 --> 00:37:51,274 on it because it was too much of a risk . 899 00:37:51,274 --> 00:37:50,890 Perhaps they didn't know if the 900 00:37:50,890 --> 00:37:52,946 department offense would really come 901 00:37:52,946 --> 00:37:55,112 through on funding the areas where you 902 00:37:55,112 --> 00:37:57,223 know some Starve said , Hey , there's 903 00:37:57,223 --> 00:37:59,112 there's a need for this apartment 904 00:37:59,112 --> 00:38:01,446 offense . If it gets the thumbs up from , 905 00:38:01,446 --> 00:38:03,668 uh , the department offense , there's a 906 00:38:03,668 --> 00:38:05,446 little more confidence that the 907 00:38:05,446 --> 00:38:07,223 investment would see a return . 908 00:38:07,223 --> 00:38:09,390 Absolutely . And hopefully these could 909 00:38:09,390 --> 00:38:11,612 be pathfinders so that you do something 910 00:38:11,612 --> 00:38:13,668 for Department of Defense . And then 911 00:38:13,668 --> 00:38:15,723 there's other applications with just 912 00:38:15,723 --> 00:38:17,890 general security and then perhaps just 913 00:38:17,890 --> 00:38:20,540 general commercial applications as well . 914 00:38:20,600 --> 00:38:22,767 So again , we're looking at a virtuous 915 00:38:22,767 --> 00:38:24,600 cycle here so that we can be the 916 00:38:24,600 --> 00:38:26,711 catalyst to get things started . So , 917 00:38:26,711 --> 00:38:28,940 virtuous cycle , you know where I stand 918 00:38:28,940 --> 00:38:30,996 means that Hey , we're not gonna ask 919 00:38:30,996 --> 00:38:33,107 you to invest in something , and then 920 00:38:33,107 --> 00:38:34,884 we're gonna classify it all and 921 00:38:34,884 --> 00:38:37,051 restrict you to ah , classified dia de 922 00:38:37,051 --> 00:38:39,218 market that I understand you correctly 923 00:38:39,218 --> 00:38:41,440 there correct ? Correct . And in fact , 924 00:38:41,440 --> 00:38:43,384 you know , that's something that , 925 00:38:43,384 --> 00:38:45,551 frankly , during my time here , I feel 926 00:38:45,551 --> 00:38:48,250 that in this sort of super classified 927 00:38:48,250 --> 00:38:50,590 the sap world , if you will special 928 00:38:50,590 --> 00:38:54,370 access programs that we have held those 929 00:38:54,380 --> 00:38:56,930 too tightly and there are only a few in 930 00:38:56,930 --> 00:38:59,400 the defense industrial base , typically , 931 00:38:59,400 --> 00:39:01,460 larger companies that really benefit 932 00:39:01,470 --> 00:39:04,090 from that . So we have a concerted 933 00:39:04,090 --> 00:39:06,090 effort , nothing to do with Cove it 934 00:39:06,090 --> 00:39:08,312 here , but trying to reach out a little 935 00:39:08,312 --> 00:39:10,646 bit more broadly because there are many , 936 00:39:10,646 --> 00:39:12,780 many mid to your companies out there 937 00:39:12,880 --> 00:39:16,640 that have the wherewithal to be a very 938 00:39:16,640 --> 00:39:19,600 significant supplier to d o D . But 939 00:39:19,600 --> 00:39:21,767 they just can't get an invitation into 940 00:39:21,767 --> 00:39:23,933 the club , so we're trying to get them 941 00:39:23,933 --> 00:39:26,860 in . So a few more areas of focus on 942 00:39:26,860 --> 00:39:28,916 and then we'll have to wrap up , let 943 00:39:28,916 --> 00:39:30,860 you get back to the demands of the 944 00:39:30,860 --> 00:39:34,510 Pentagon . But on this point , you know , 945 00:39:34,510 --> 00:39:38,260 there hasn't really been many new 946 00:39:38,260 --> 00:39:40,910 entrance into the defense industrial 947 00:39:40,910 --> 00:39:43,132 base . Certainly , you know , when that 948 00:39:43,132 --> 00:39:45,299 would have a market cap , let's say of 949 00:39:45,299 --> 00:39:47,521 a $1,000,000,000 more . You can look at 950 00:39:47,521 --> 00:39:49,854 Palin to your space X a couple examples . 951 00:39:49,854 --> 00:39:52,021 But there has been an increase of late 952 00:39:52,021 --> 00:39:54,660 of VC money behind companies that are 953 00:39:54,660 --> 00:39:57,360 seeking to support natural defense and 954 00:39:57,360 --> 00:39:59,471 now , security perhaps not limited to 955 00:39:59,471 --> 00:40:01,693 exclusively not necessarily pure play , 956 00:40:01,693 --> 00:40:03,800 although there some give me a little 957 00:40:03,800 --> 00:40:06,790 bit of your perspective as to the 958 00:40:06,790 --> 00:40:08,901 change in the time you've been office 959 00:40:08,901 --> 00:40:11,234 mawr Tech companies entering this space , 960 00:40:11,350 --> 00:40:13,550 companies that are trying to recruit 961 00:40:13,560 --> 00:40:15,840 out of , let's say , traditional 962 00:40:15,840 --> 00:40:18,920 Silicon Valley . Ah kind of areas . 963 00:40:19,330 --> 00:40:21,219 There's obviously we have defense 964 00:40:21,219 --> 00:40:23,330 innovation unit , which , of course , 965 00:40:23,830 --> 00:40:25,770 you oversee . Tell me about that 966 00:40:25,780 --> 00:40:28,650 evolution and extend that that has 967 00:40:28,830 --> 00:40:30,719 really been impacting the defense 968 00:40:30,719 --> 00:40:32,497 industrial based on some of the 969 00:40:32,497 --> 00:40:34,497 challenges you see going forward to 970 00:40:34,497 --> 00:40:36,663 increase their participation . I think 971 00:40:36,663 --> 00:40:38,719 that there are lots of tentacles out 972 00:40:38,719 --> 00:40:40,386 there reaching to what I call 973 00:40:40,386 --> 00:40:42,608 nontraditional Z each of the services , 974 00:40:42,660 --> 00:40:44,882 whether it be futures command , whether 975 00:40:44,882 --> 00:40:48,790 it be half works , um , or whether the 976 00:40:48,790 --> 00:40:51,820 SOCom Softworks , there are a lot of 977 00:40:51,820 --> 00:40:54,510 good efforts reaching out . We haven't 978 00:40:54,510 --> 00:40:58,080 done anything ale yet , and one of the 979 00:40:58,080 --> 00:41:00,024 things we're trying to do with our 980 00:41:00,024 --> 00:41:02,680 trusted capital is toe leverage . All 981 00:41:02,680 --> 00:41:05,300 of those very innovative groups also 982 00:41:05,300 --> 00:41:08,050 defense digital service is Brett 983 00:41:08,060 --> 00:41:10,460 Goldstein does a great job with them 984 00:41:10,460 --> 00:41:12,980 now and kind of leverage all of that 985 00:41:12,990 --> 00:41:15,590 for the greater good . We found , as I 986 00:41:15,590 --> 00:41:17,701 mentioned earlier , that just getting 987 00:41:17,701 --> 00:41:20,490 into D . O . D is a bit of a conundrum 988 00:41:20,490 --> 00:41:22,900 if you don't know how to . So we 989 00:41:22,900 --> 00:41:25,650 actually earlier this year came up with 990 00:41:25,650 --> 00:41:29,320 what we call a welcome mat to D o D . 991 00:41:29,330 --> 00:41:32,290 Which is basically a place mat with the 992 00:41:32,290 --> 00:41:34,457 whole bunch . It's Elektronik , but we 993 00:41:34,457 --> 00:41:36,290 have pronounce of it as well off 994 00:41:36,290 --> 00:41:39,630 hyperlinks for where you go in d o . D . 995 00:41:39,630 --> 00:41:42,100 To get certain information or get your 996 00:41:42,100 --> 00:41:44,720 company registered . All those kinds of 997 00:41:44,720 --> 00:41:46,331 things . I think the more we 998 00:41:46,331 --> 00:41:48,830 communicate that the better I go back 999 00:41:48,830 --> 00:41:51,000 again to the industrial associations 1000 00:41:51,120 --> 00:41:53,700 during this whole cove it crisis . One 1001 00:41:53,700 --> 00:41:56,400 of again , the silver linings is that 1002 00:41:56,830 --> 00:41:59,230 for three times week for a long time 1003 00:41:59,230 --> 00:42:01,230 now , a little bit less . We've had 1004 00:42:01,230 --> 00:42:03,740 tele cons . We've had webinars . So we 1005 00:42:03,740 --> 00:42:06,170 have reached out regularly to about 15 1006 00:42:06,170 --> 00:42:08,281 industrial associations and some that 1007 00:42:08,281 --> 00:42:10,448 we never dealt with before to push all 1008 00:42:10,448 --> 00:42:13,500 this information and pull them in as 1009 00:42:13,500 --> 00:42:16,660 well . So I hope we can keep that going . 1010 00:42:16,670 --> 00:42:18,890 I'm hoping as well that the trusted 1011 00:42:18,890 --> 00:42:22,430 capital will give away for some of 1012 00:42:22,430 --> 00:42:24,480 these companies to come in , but it 1013 00:42:24,480 --> 00:42:27,530 really all comes down to communications . 1014 00:42:27,530 --> 00:42:30,440 And I'm always hoping that industry 1015 00:42:30,440 --> 00:42:33,080 thinks of our industrial policy team 1016 00:42:33,090 --> 00:42:35,310 underneath a and ask as sort of the 1017 00:42:35,310 --> 00:42:38,020 help desk for D o . D . And that 1018 00:42:38,020 --> 00:42:40,930 they'll come in . So one last question 1019 00:42:40,930 --> 00:42:42,986 in this category will jump toe brief 1020 00:42:43,670 --> 00:42:45,837 comment on allies and end on budgets . 1021 00:42:46,090 --> 00:42:48,312 But you mentioned kind of need to do it 1022 00:42:48,312 --> 00:42:50,560 at scale . One metric for whether or 1023 00:42:50,560 --> 00:42:53,810 not you're truly , uh , realizing these 1024 00:42:53,810 --> 00:42:55,977 new technologies bring in new entrance 1025 00:42:55,977 --> 00:42:58,088 at scale would be programs of records 1026 00:42:58,088 --> 00:43:00,400 the extent programs of record bring in 1027 00:43:00,750 --> 00:43:02,861 ah and are awarded to those companies 1028 00:43:02,861 --> 00:43:05,083 like , let's just say that aren't quote 1029 00:43:05,083 --> 00:43:07,360 unquote the traditionals or they're 1030 00:43:07,370 --> 00:43:09,770 done differently , which is maybe one 1031 00:43:09,770 --> 00:43:11,830 the same where it's not a 5 to 7 or 1032 00:43:11,990 --> 00:43:14,157 plus your window . But actually you're 1033 00:43:14,157 --> 00:43:16,430 doing turning things out , Um , or at a 1034 00:43:16,430 --> 00:43:19,450 commercial pace , Um , do you see let's 1035 00:43:19,450 --> 00:43:21,450 focus on the program a record , for 1036 00:43:21,450 --> 00:43:23,617 example , a change in the way programs 1037 00:43:23,617 --> 00:43:26,180 of record are awarded organized in the 1038 00:43:26,180 --> 00:43:29,490 future in light of software being far 1039 00:43:29,490 --> 00:43:31,490 more of a focus and relevant . Then 1040 00:43:31,490 --> 00:43:33,546 let's just say it have in the past . 1041 00:43:33,546 --> 00:43:36,860 Absolutely . One of the largest 1042 00:43:36,870 --> 00:43:39,420 policy efforts we've had in a N s over 1043 00:43:39,420 --> 00:43:42,380 the last few years is totally rewriting 1044 00:43:42,380 --> 00:43:45,160 the 5000 Siri's all the policy around 1045 00:43:45,170 --> 00:43:48,390 acquisition , and what we've evolved to 1046 00:43:48,400 --> 00:43:51,350 is what I call an adaptive acquisition 1047 00:43:51,350 --> 00:43:53,390 framework . So there are multiple 1048 00:43:53,390 --> 00:43:57,260 pathways . One of the key new pathways 1049 00:43:57,260 --> 00:43:59,210 is a software pathway , because , 1050 00:43:59,210 --> 00:44:02,290 frankly , most of our significant 1051 00:44:02,290 --> 00:44:04,900 systems are hardware defined but 1052 00:44:04,900 --> 00:44:07,178 software enabled , and you can do many , 1053 00:44:07,178 --> 00:44:09,690 many turns on that software . So we 1054 00:44:09,690 --> 00:44:12,690 were very , very fortunate to work with 1055 00:44:12,690 --> 00:44:14,690 the Defense Innovation Board , Eric 1056 00:44:14,690 --> 00:44:17,380 Schmidt and the whole team to help us 1057 00:44:17,390 --> 00:44:20,140 on a software acquisition and practices 1058 00:44:20,140 --> 00:44:22,350 study that we published . We've just 1059 00:44:22,350 --> 00:44:24,683 finished the first years implementation , 1060 00:44:24,683 --> 00:44:26,906 in fact , on my desk right now , I have 1061 00:44:26,906 --> 00:44:29,070 that report to go to Congress that I 1062 00:44:29,070 --> 00:44:32,950 have to look at , and we are 1063 00:44:32,950 --> 00:44:34,950 working with the Hill on some pilot 1064 00:44:34,950 --> 00:44:37,061 projects where we have what we call a 1065 00:44:37,061 --> 00:44:39,172 software color of money . So it's not 1066 00:44:39,172 --> 00:44:42,090 with one year to year money because you 1067 00:44:42,090 --> 00:44:44,090 don't do software that way . And if 1068 00:44:44,090 --> 00:44:46,312 we're going to do agile and Dev ops , I 1069 00:44:46,312 --> 00:44:48,312 could talk about this all day . You 1070 00:44:48,312 --> 00:44:50,534 just need to do it differently . So I'm 1071 00:44:50,534 --> 00:44:52,757 excited . We have a different way to do 1072 00:44:52,757 --> 00:44:54,868 software . Secondly , the other thing 1073 00:44:54,868 --> 00:44:54,260 I'll point out in the adaptive 1074 00:44:54,260 --> 00:44:57,620 acquisition framework is we have taken 1075 00:44:57,620 --> 00:45:00,030 an authority that we were given about 1076 00:45:00,040 --> 00:45:02,151 three or four years ago called Middle 1077 00:45:02,151 --> 00:45:04,890 Tier Acquisition . So it's not a rapid , 1078 00:45:04,900 --> 00:45:08,320 urgent need . It's not a big 5000 1079 00:45:08,320 --> 00:45:10,598 project . It's somewhere in the middle . 1080 00:45:10,598 --> 00:45:12,764 You don't have to go through the joint 1081 00:45:12,764 --> 00:45:14,820 staff for the requirements process . 1082 00:45:14,820 --> 00:45:17,140 You could just get going and prototype 1083 00:45:17,150 --> 00:45:19,206 or produce something . Get it in the 1084 00:45:19,206 --> 00:45:21,261 field within six months . So you get 1085 00:45:21,261 --> 00:45:23,640 that experiential learning that is 1086 00:45:23,640 --> 00:45:25,490 changing how we're getting into 1087 00:45:25,490 --> 00:45:28,370 programs of record , because we're 1088 00:45:28,370 --> 00:45:31,080 coming in with much , much more mature 1089 00:45:31,190 --> 00:45:33,900 technology and we can transfer in at a 1090 00:45:33,900 --> 00:45:37,400 milestone B or C . So I'm excited . I 1091 00:45:37,400 --> 00:45:39,260 think there's much , much more 1092 00:45:39,260 --> 00:45:41,810 capability toe acquire differently . 1093 00:45:41,930 --> 00:45:44,290 Teoh get to programmes of record 1094 00:45:44,290 --> 00:45:46,401 eventually , but there's a lot we can 1095 00:45:46,401 --> 00:45:48,512 do without a program of record . Very 1096 00:45:48,512 --> 00:45:50,623 significant money software , color of 1097 00:45:50,623 --> 00:45:52,230 money . Very exciting . The 1098 00:45:52,230 --> 00:45:54,341 congressional staff will have a field 1099 00:45:54,341 --> 00:45:56,619 day with that with that color of money . 1100 00:45:56,619 --> 00:45:58,674 All right , let let's wrap up here , 1101 00:45:58,674 --> 00:46:00,786 understand ? Peer lord hitting on two 1102 00:46:00,786 --> 00:46:03,008 subjects and and then we'll let you get 1103 00:46:03,008 --> 00:46:05,119 back to your duties . The first is we 1104 00:46:05,119 --> 00:46:05,080 talked a lot about re shoring . Ah , 1105 00:46:05,080 --> 00:46:07,420 the need , uh , how we deal with kind 1106 00:46:07,420 --> 00:46:09,309 of critical of requirements . The 1107 00:46:09,309 --> 00:46:10,864 defense industrial base and 1108 00:46:10,864 --> 00:46:12,864 fundamentally has to be Conus , you 1109 00:46:12,864 --> 00:46:15,031 know , within with the United States , 1110 00:46:15,031 --> 00:46:17,142 but obviously between competitors and 1111 00:46:17,160 --> 00:46:19,438 ah , the United States are comparative , 1112 00:46:19,438 --> 00:46:21,660 enters our allies what's happening on 1113 00:46:21,660 --> 00:46:23,882 the front with allies six . And that we 1114 00:46:23,882 --> 00:46:26,480 can bring them in , Ah , as trusted 1115 00:46:26,480 --> 00:46:29,360 partners to deal with the innovation 1116 00:46:29,470 --> 00:46:32,450 and other items for the supply chain 1117 00:46:32,620 --> 00:46:35,390 that are critical to national defense . 1118 00:46:35,580 --> 00:46:37,524 That kind of those vulnerabilities 1119 00:46:37,524 --> 00:46:39,191 having exposed during Koven ? 1120 00:46:39,191 --> 00:46:42,040 Absolutely . We obviously have as our 1121 00:46:42,040 --> 00:46:44,570 second line of effort in our national 1122 00:46:44,570 --> 00:46:47,000 defense strategy , you know , 1123 00:46:47,010 --> 00:46:50,180 supporting and growing alliances and 1124 00:46:50,180 --> 00:46:52,090 partnerships . So the U . S is 1125 00:46:52,090 --> 00:46:54,090 differentiated from the rest of the 1126 00:46:54,090 --> 00:46:56,312 world . When we goto war , we do not go 1127 00:46:56,312 --> 00:46:58,534 alone , and our allies and partners are 1128 00:46:58,534 --> 00:47:00,410 critical . I actually have an 1129 00:47:00,420 --> 00:47:03,090 international cooperation group that 1130 00:47:03,090 --> 00:47:06,450 has responsibility for over 30 1131 00:47:06,450 --> 00:47:09,570 bilateral agreements . I spend a 1132 00:47:09,570 --> 00:47:12,340 significant amount of my time with our 1133 00:47:12,340 --> 00:47:15,260 key allies and partners . A very 1134 00:47:15,260 --> 00:47:18,560 significant portion of that is Canada , 1135 00:47:18,850 --> 00:47:22,410 the U . K . And Australia , part of our 1136 00:47:22,410 --> 00:47:24,710 national technological innovation , 1137 00:47:24,710 --> 00:47:26,740 based where they have special 1138 00:47:26,740 --> 00:47:29,360 consideration , if you will , for 1139 00:47:29,360 --> 00:47:32,020 sharing intellectual property , 1140 00:47:32,160 --> 00:47:36,090 forgetting perhaps a little bit mawr 1141 00:47:36,200 --> 00:47:38,920 sophisticated technology than others . 1142 00:47:38,980 --> 00:47:42,170 We have really amped up our 1143 00:47:42,170 --> 00:47:44,540 cooperative research agreements with 1144 00:47:44,540 --> 00:47:47,290 those countries in the last few years 1145 00:47:47,290 --> 00:47:49,360 and were jointly working on 1146 00:47:49,360 --> 00:47:51,304 developments that will be mutually 1147 00:47:51,304 --> 00:47:54,260 beneficial . So as we go through all of 1148 00:47:54,260 --> 00:47:57,470 these challenges with not wanting to be 1149 00:47:57,470 --> 00:48:01,300 solely dependent on offshore capability , 1150 00:48:01,330 --> 00:48:04,160 we have made very , very clear to our 1151 00:48:04,170 --> 00:48:06,440 allies and partners how very , very 1152 00:48:06,440 --> 00:48:10,020 important they are to us . And in fact , 1153 00:48:10,880 --> 00:48:12,991 every so often , when a pronouncement 1154 00:48:12,991 --> 00:48:15,102 comes out of the White House , I'm on 1155 00:48:15,102 --> 00:48:17,160 speed dial to some of my fellow 1156 00:48:17,160 --> 00:48:19,190 national armaments directors , and 1157 00:48:19,190 --> 00:48:21,190 they're calling me . And you know , 1158 00:48:21,190 --> 00:48:23,200 even when we get a little sideways 1159 00:48:23,200 --> 00:48:25,422 politically , the mill , the mill bonds 1160 00:48:25,422 --> 00:48:28,540 are very , very strong . In fact , it 1161 00:48:28,540 --> 00:48:31,330 was somewhat flattering that when we 1162 00:48:31,330 --> 00:48:34,890 put out the memo of the U . S defense 1163 00:48:34,890 --> 00:48:36,612 industrial base being critical 1164 00:48:36,612 --> 00:48:38,670 infrastructure , allowing us to get 1165 00:48:38,680 --> 00:48:42,270 back toe work , um , my u K 1166 00:48:42,270 --> 00:48:45,020 nad my Canadian add my Australian nad 1167 00:48:45,030 --> 00:48:47,690 all called me and said , Do you mind if 1168 00:48:47,690 --> 00:48:51,010 I just cut and paste names and 1169 00:48:51,300 --> 00:48:54,030 addresses and use that document were 1170 00:48:54,030 --> 00:48:56,050 like , Hey , please go ahead and 1171 00:48:56,050 --> 00:48:57,994 replicate it . So we have a pretty 1172 00:48:57,994 --> 00:49:00,640 tight bond . Do you think that you 1173 00:49:00,640 --> 00:49:02,640 mentioned those four countries , of 1174 00:49:02,640 --> 00:49:04,696 course , make a lot of sense in that 1175 00:49:04,696 --> 00:49:04,570 part of the the end tip . But you just 1176 00:49:04,570 --> 00:49:06,681 referenced . Um , do we think we need 1177 00:49:06,681 --> 00:49:08,640 to expand that MAWR ? Because 1178 00:49:08,640 --> 00:49:12,460 increasingly , allies and friends are 1179 00:49:12,470 --> 00:49:14,414 presented with a choice . Five G's 1180 00:49:14,414 --> 00:49:16,526 being the most acute example Where if 1181 00:49:16,526 --> 00:49:18,748 we don't share , if we don't bring them 1182 00:49:18,748 --> 00:49:20,859 into our side , don't give our allies 1183 00:49:20,859 --> 00:49:23,026 and friends a good option . They'll go 1184 00:49:23,026 --> 00:49:23,000 elsewhere , oftentimes , to competitors 1185 00:49:23,000 --> 00:49:25,390 like China , perhaps not for the most 1186 00:49:25,390 --> 00:49:27,501 sensitive technologies , but even for 1187 00:49:27,501 --> 00:49:29,557 technologies that are less sensitive 1188 00:49:29,557 --> 00:49:31,557 but still relevant , our allies and 1189 00:49:31,557 --> 00:49:33,779 partners and friends do . We need to do 1190 00:49:33,779 --> 00:49:36,710 more , uh , to expand that cooperation , 1191 00:49:36,720 --> 00:49:40,260 particularly on innovation . So they're 1192 00:49:40,260 --> 00:49:42,820 not presented with a hard choice ? Yes , 1193 00:49:42,830 --> 00:49:45,840 absolutely . And in fact , I think we 1194 00:49:45,840 --> 00:49:47,951 need to beef up what we're doing with 1195 00:49:47,951 --> 00:49:50,062 the current in tip . We're working on 1196 00:49:50,062 --> 00:49:52,229 that , but there many others out there 1197 00:49:52,229 --> 00:49:54,284 that we could work more closely with 1198 00:49:54,284 --> 00:49:58,150 one of the items that I'm dealing with 1199 00:49:58,150 --> 00:50:00,372 with a few of my colleagues here that I 1200 00:50:00,400 --> 00:50:02,970 am passionate about currently is the 1201 00:50:02,970 --> 00:50:05,810 fact that we have not really revisited 1202 00:50:05,820 --> 00:50:09,780 what technology we export . 1203 00:50:09,840 --> 00:50:12,300 I think , in a significant way recently , 1204 00:50:12,310 --> 00:50:15,860 and I am concerned that sometimes 1205 00:50:15,900 --> 00:50:18,780 we are losing international 1206 00:50:18,780 --> 00:50:22,590 competitions because we have , as we 1207 00:50:22,590 --> 00:50:25,220 have increased our capability . We have 1208 00:50:25,220 --> 00:50:27,620 not increased the capability that we 1209 00:50:27,630 --> 00:50:30,610 export in a commensurate fashion , and 1210 00:50:30,610 --> 00:50:33,780 we sometimes are having some of our 1211 00:50:33,780 --> 00:50:35,836 potential customers perfectly in the 1212 00:50:35,836 --> 00:50:38,090 Mideast turned to Russia or China . You 1213 00:50:38,090 --> 00:50:39,979 see the same thing in India , for 1214 00:50:39,979 --> 00:50:42,820 instance . So we're having a very 1215 00:50:42,820 --> 00:50:45,660 focused discussion on Let's rethink 1216 00:50:45,660 --> 00:50:47,980 this from a strategic point of view , 1217 00:50:47,990 --> 00:50:51,310 we might in fact be hurting ourselves 1218 00:50:51,320 --> 00:50:53,580 when we think we're helping ourselves . 1219 00:50:53,590 --> 00:50:56,190 And ah , lot of this technology . 1220 00:50:56,310 --> 00:50:59,490 Frankly , the magic sauce is in the 1221 00:50:59,490 --> 00:51:01,620 manufacturing of it . The technical 1222 00:51:01,620 --> 00:51:03,990 data package doesn't always give it to 1223 00:51:03,990 --> 00:51:07,720 you , so obviously we have to make sure 1224 00:51:07,720 --> 00:51:10,260 we're very careful , not toe have 1225 00:51:10,260 --> 00:51:12,410 things that could be disassembled and 1226 00:51:12,410 --> 00:51:15,760 understood and so forth . But in the 1227 00:51:15,760 --> 00:51:18,560 next six months , I very much hope to 1228 00:51:18,570 --> 00:51:20,670 open the envelope , particularly on 1229 00:51:20,670 --> 00:51:22,837 some of the weapons technology that we 1230 00:51:22,837 --> 00:51:24,837 can export . Well , I can't wait to 1231 00:51:24,837 --> 00:51:26,892 have you back in the Reagan National 1232 00:51:26,892 --> 00:51:28,614 Defense Form , so you can tell 1233 00:51:28,614 --> 00:51:30,503 everybody about that in about six 1234 00:51:30,503 --> 00:51:32,503 months time last question before we 1235 00:51:32,503 --> 00:51:34,670 close this podcast and viewing session 1236 00:51:34,670 --> 00:51:37,770 out . The defense budget , obviously is 1237 00:51:37,770 --> 00:51:39,881 critical to accomplishing your work . 1238 00:51:39,960 --> 00:51:42,127 Um , with Cove in all the spending the 1239 00:51:42,127 --> 00:51:44,340 fiscal crisis his country will have to 1240 00:51:44,340 --> 00:51:46,860 face , Are you concerned that there 1241 00:51:46,860 --> 00:51:50,130 will be an impact on defense budget ? A 1242 00:51:50,130 --> 00:51:52,850 couple of words , perhaps , on why it's 1243 00:51:52,850 --> 00:51:55,890 critical to maintain defense spending 1244 00:51:55,890 --> 00:51:57,990 to accomplish much of what we've 1245 00:51:57,990 --> 00:52:01,210 discussed here today . We are concerned 1246 00:52:01,220 --> 00:52:03,970 that budgets will be flat at best , and 1247 00:52:03,970 --> 00:52:05,970 flat budgets are actually declining 1248 00:52:05,970 --> 00:52:09,580 budgets , given inflation and so 1249 00:52:09,580 --> 00:52:13,090 forth . We believe that not only do 1250 00:52:13,090 --> 00:52:16,000 we have to maintain readiness , but we 1251 00:52:16,000 --> 00:52:18,330 know we have to modernize after years 1252 00:52:18,330 --> 00:52:20,760 and years off , not investing . Our 1253 00:52:20,760 --> 00:52:24,360 whole nuclear triad is in the midst of 1254 00:52:24,360 --> 00:52:26,900 being recapitalized . And we are with 1255 00:52:26,900 --> 00:52:29,100 zero margin right now in terms of 1256 00:52:29,100 --> 00:52:31,440 schedule to get that done to maintain 1257 00:52:31,440 --> 00:52:35,220 capability . So we must invest . And 1258 00:52:35,340 --> 00:52:38,880 this is why I am so concerned that we 1259 00:52:38,880 --> 00:52:42,310 get the next version of The Cares Act 1260 00:52:42,320 --> 00:52:45,880 and we get some money toe help take 1261 00:52:45,890 --> 00:52:48,670 care of some of the incremental cost 1262 00:52:48,890 --> 00:52:51,112 that were brought on by Cove . It there 1263 00:52:51,112 --> 00:52:53,530 are inefficiencies there , and we don't 1264 00:52:53,530 --> 00:52:56,150 want that foul wave to roll on and roll 1265 00:52:56,150 --> 00:52:59,430 on and on . Um , in terms of making us 1266 00:52:59,440 --> 00:53:02,540 inefficient for a long time , we also I 1267 00:53:02,540 --> 00:53:05,400 think a would be really doing a 1268 00:53:05,400 --> 00:53:07,830 disservice to the nation and to the 1269 00:53:07,830 --> 00:53:11,740 world if we do not make 1270 00:53:11,750 --> 00:53:15,220 programs hole . And if we had to take 1271 00:53:15,220 --> 00:53:17,320 out of Hyde , so to speak , all of 1272 00:53:17,320 --> 00:53:20,310 these inefficiencies that were realized 1273 00:53:20,310 --> 00:53:23,070 and were being very , very careful to 1274 00:53:23,070 --> 00:53:26,270 make sure we are Onley accepting at for 1275 00:53:26,270 --> 00:53:29,570 government compensation . Very riel 1276 00:53:29,580 --> 00:53:32,270 inefficiencies . But if we have to take 1277 00:53:32,280 --> 00:53:35,250 that cost out of programs and 1278 00:53:35,480 --> 00:53:38,210 manufacturer , fewer units provide 1279 00:53:38,210 --> 00:53:41,020 fewer services , not have the logistics 1280 00:53:41,020 --> 00:53:44,560 tail . That would be a very bad outcome 1281 00:53:45,140 --> 00:53:47,720 under Secretary Lord , just for a scale 1282 00:53:47,720 --> 00:53:50,280 standpoint , how much is required to 1283 00:53:50,280 --> 00:53:51,947 get healthy , you mentioned . 1284 00:53:51,947 --> 00:53:54,169 Transformed . He's looking at it . Give 1285 00:53:54,169 --> 00:53:56,058 us a sense . I mean , not precise 1286 00:53:56,058 --> 00:53:55,920 dollar valuable , but generally , how 1287 00:53:55,920 --> 00:53:58,580 much ? My I testified a few weeks ago , 1288 00:53:58,580 --> 00:54:01,900 saying it's in the low double digits of 1289 00:54:01,900 --> 00:54:04,790 billions of dollars . Okay , so low 1290 00:54:04,790 --> 00:54:07,950 double digits would be 10 or more . You 1291 00:54:08,020 --> 00:54:09,020 get 1292 00:54:10,620 --> 00:54:13,850 100 Secretary Lord , thank you so much 1293 00:54:13,850 --> 00:54:15,739 for joining us here at the Reagan 1294 00:54:15,739 --> 00:54:17,540 Institute . We appreciate your 1295 00:54:17,540 --> 00:54:19,707 participation . Look forward to having 1296 00:54:19,707 --> 00:54:21,929 you back at the Reagan National Defense 1297 00:54:21,929 --> 00:54:23,929 Form December 4 and five . Really ? 1298 00:54:23,929 --> 00:54:25,984 This was an excellent conversation . 1299 00:54:25,984 --> 00:54:28,151 Thank you . Thank you . Roger . Really 1300 00:54:28,151 --> 00:54:30,096 appreciate the opportunity to talk 1301 00:54:30,096 --> 00:54:32,151 about some of the work we're doing . 1302 00:54:32,151 --> 00:54:34,318 I'm incredibly proud of my team . They 1303 00:54:34,318 --> 00:54:34,130 have just really been pushing , 1304 00:54:34,130 --> 00:54:36,241 especially in the last three months . 1305 00:54:36,241 --> 00:54:38,390 So I look forward to seeing you in 1306 00:54:38,390 --> 00:54:40,140 December . Great . Thanks .