“Clearing the Path: Reforming Procurement to Accelerate Defense Innovation”

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                                 ______56                           CLEARING THE PATH:78                         REFORMING PROCUREMENT910                    TO ACCELERATE DEFENSE INNOVATION1112=======================================================================1314                                HEARING1516                               BEFORE THE1718                        SUBCOMMITTEE ON MILITARY19                          AND FOREIGN AFFAIRS2021                                 OF THE2223                         COMMITTEE ON OVERSIGHT24                         AND GOVERNMENT REFORM2526                      U.S.HOUSE OF REPRESENTATIVES2728                    ONE HUNDRED NINETEENTH CONGRESS2930                             FIRST SESSION3132                               __________3334                             JUNE 11, 20253536                               __________3738                           Serial No. 119-333940                               __________4142Printed for the use of the Committee on Oversight and Government Reform4344GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT4546                       Available on: govinfo.gov,47                         oversight.house.gov or48                             docs.house.gov4950                          ______5152             U.S. GOVERNMENT PUBLISHING OFFICE53 60-683 PDF         WASHINGTON : 20255455              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM5657                    JAMES COMER, Kentucky, Chairman5859Jim Jordan, Ohio                     Vacant, Ranking Minority Member60Mike Turner, Ohio                    Eleanor Holmes Norton, District of61Paul Gosar, Arizona                      Columbia62Virginia Foxx, North Carolina        Stephen F. Lynch, Massachusetts63Glenn Grothman, Wisconsin            Raja Krishnamoorthi, Illinois64Michael Cloud, Texas                 Ro Khanna, California65Gary Palmer, Alabama                 Kweisi Mfume, Maryland66Clay Higgins, Louisiana              Shontel Brown, Ohio67Pete Sessions, Texas                 Melanie Stansbury, New Mexico68Andy Biggs, Arizona                  Robert Garcia, California69Nancy Mace, South Carolina           Maxwell Frost, Florida70Pat Fallon, Texas                    Summer Lee, Pennsylvania71Byron Donalds, Florida               Greg Casar, Texas72Scott Perry, Pennsylvania            Jasmine Crockett, Texas73William Timmons, South Carolina      Emily Randall, Washington74Tim Burchett, Tennessee              Suhas Subramanyam, Virginia75Marjorie Taylor Greene, Georgia      Yassamin Ansari, Arizona76Lauren Boebert, Colorado             Wesley Bell, Missouri77Anna Paulina Luna, Florida           Lateefah Simon, California78Nick Langworthy, New York            Dave Min, California79Eric Burlison, Missouri              Ayanna Pressley, Massachusetts80Eli Crane, Arizona                   Rashida Tlaib, Michigan81Brian Jack, Georgia82John McGuire, Virginia83Brandon Gill, Texas8485                                 ------8687                       Mark Marin, Staff Director88                   James Rust, Deputy Staff Director89                     Mitch Benzine, General Counsel90               Kaity Wolfe, Deputy Director for Oversight91         Grayson Westmoreland, Senior Professional Staff Member92                      Ashlii Dyer, Senior Counsel93      Mallory Cogar, Deputy Director of Operations and Chief Clerk9495                      Contact Number: 202-225-50749697                  Jamie Smith, Minority Staff Director98                      Contact Number: 202-225-505199                                 ------100101              Subcommittee on Military and Foreign Affairs102103               William Timmons, South Carolina, Chairman104Michael Turner, Ohio                 Suhas Subramanyam, Virginia105Michael Cloud, Texas                     Ranking Member106Andy Biggs, Arizona                  Stephen Lynch, Massachusetts107Byron Donalds, Florida               Kweisi Mfume, Maryland108Anna Paulina Luna, Florida           Robert Garcia, California109Eli Crane, Arizona                   Greg Casar, Texas110John McGuire, Virginia               Vacancy111                         C  O  N  T  E  N  T  S112113                              ----------114115                                                                   Page116117Hearing held on June 11, 2025....................................     1118119                               Witnesses120121                              ----------122123Ms. Margaret Boatner, Vice President, National Security Policy,124  Aerospace Industries Association125Oral Statement...................................................     4126127Mr. Eric Snelgrove, Senior Fellow, National Defense Industrial128  Association129Oral Statement...................................................     6130131Ms. Shelby Oakley, Director, Contracting and National Security132  Acquisitions, Government Accountability Office133Oral Statement...................................................     8134135Mr. Moshe Schwartz (Minority Witness), Defense Fellow, Coalition136  for Government Procurement137Oral Statement...................................................    10138139Written opening statements and bios are available on the U.S.140  House of Representatives Document Repository at:141  docs.house.gov.142143                           Index of Documents144145                              ----------146147  * Report, GAO, ``DoD Financial Management, Accelerated148  Timelines Needed to Address Long-standing Issues, Fraud Risk;149  submitted by Rep. Crane.150151  * Report, Responsible Statecraft, ``Pentagon will likely fail152  audits through 2025''; submitted by Rep. Crane.153154  * Article, Quincy Institute for Responsible Statecraft, ``March155  of the Four-Stars, The Role of Retired Generals and Admirals'';156  submitted by Rep. Crane.157158The document listed above is available at: docs.house.gov.159160                          Additional Documents161162                              ----------163164  * Questions for the Record: to Ms. Boatner; submitted by Rep.165  Turner.166167  * Questions for the Record: to Ms. Oakley; submitted by Rep.168  Turner.169170  * Questions for the Record: to Ms. Oakley; submitted by Rep.171  Crane.172173  * Questions for the Record: to Mr. Snelgrove; submitted by Rep.174  Turner.175176These documents were submitted after the hearing, and may be177  available upon request.178179                           CLEARING THE PATH:180181                         REFORMING PROCUREMENT182183                    TO ACCELERATE DEFENSE INNOVATION184185                              ----------186187                    Wednesday, June 11, 2025188189                     U.S. House of Representatives190191              Committee on Oversight and Government Reform192193              Subcommittee on Military and Foreign Affairs194195                                           Washington, D.C.196197    The Subcommittee met, pursuant to notice, at 10:05 a.m., in198room HVC-210, U.S. Capitol Visitor Center, Hon. William Timmons199[Chairman of the Subcommittee] presiding.200    Present: Representatives Timmons, Comer, Turner, Biggs,201Crane, McGuire, Subramanyam, Lynch, Mfume, and Garcia.202    Mr. Timmons. This hearing of the Subcommittee on Military203and Foreign Affairs will come to order. I want to welcome204everyone.205    Without objection, the Chair may declare a recess at any206time.207    I recognize myself for the purpose of making an opening208statement.209    Good morning, and welcome to the Subcommittee on Military210and Foreign Affairs. I want to thank you to all our Members for211being here today to examine the future of our defense212procurement system. It is not lost on me the irony of starting213a hearing 5 minutes late when I am trying to get the DoD to do214things more efficiently.215    Today's hearing will focus on a critical challenge, the216outdated, cumbersome process by which the Department of Defense217acquires new technology, and how that process slows down the218pace of innovation.219    The stakes could not be higher.220    If we want to outpace strategic competitors, we must221modernize the way we identify, test, acquire, and scale222cutting-edge defense technologies.223    South Carolina plays a vital role in our national defense224industrial base. In my own district, Lockheed Martin builds the225F-16 Fighting Falcon in Greenville, a cornerstone of American226airpower. Across the state, defense companies manufacture227everything from aircraft to submarine components.228    But we must do more to ensure the next generation of229innovators are inspired. We should be just as excited to see230startups take root and thrive in our defense ecosystem.231    Unfortunately, for too many of those innovators, the path232to partnership with the Federal Government is blocked by a233procurement process that is opaque, rigid, and often punishing.234The risk of entering the defense market, both in time and cost,235deters even the most promising companies. And for those who236try, many never make it past what many in the industry have237called the ``valley of death,'' where transformative238technologies die on the vine between prototype and production,239often because of bureaucratic red tape.240    To be fair, there have been efforts to fix this, from241alternate contracting authorities to pilot programs. But most242reforms have been short-term, ad hoc, or have traded speed for243oversight.244    What we need are lasting, transparent, and commercially245available viable solutions that enable agility without246sacrificing accountability.247    Our witnesses today bring a wealth of experience, from248frontline military service to deep knowledge of defense249contracting. They understand both the promise of innovation and250the bureaucratic inertia that holds it back.251    As we will hear, innovation thrives in environments that252reward speed, flexibility, and calculated risk-taking, the very253qualities the current defense procurement system too often254discourages.255    A culture of risk aversion has led to seven consecutive256failed audits and spiraling cost overruns in even our most257critical programs.258    But this is not a hopeless story. Reform is possible.259Through modernization of our procurement system, we can remove260barriers to innovation and foster collaboration between261government and industry.262    I look forward to today's discussion and to exploring263actionable steps to move our procurement system into the264future, not only to keep pace, but to be leaders on the world265stage.266    Thank you again to each of our witnesses for participating267today, and I look forward to your testimony.268    I now recognize Ranking Member Subramanyam for the purpose269of making an opening statement.270    Mr. Subramanyam. Thank you, Mr. Chairman, and thank you for271holding this hearing. I am proud to represent Virginia,272especially northern Virginia. It is home to some of the most273innovative companies that do really important work with the274Department of Defense to support our national security, protect275our country, keep our men and women safe who are in uniform.276    You know, our district, in particular, builds the chips277that power many of the military vehicles and the circuit boards278they sit on, the military components crucial to allowing the279soldiers to communicate and fight and defend our Nation, and we280build state-of-the-art technology products that prepare us for281the future threats and the future of warfare. We are getting282prepared for it because of the work being done by our283contractors in Virginia.284    I am especially proud of all the small businesses, as well,285that work with the DoD to try to bring innovation, because a286lot of times innovation comes from small businesses who are287trying to do things differently than the bigger businesses and288the major players. But we need both. We need everything.289    And these technologies are so important to our national290security, and they actually have a lot of applications in the291civilian world, as well. And a lot of industries have developed292because of investments that DoD made. The internet is a good293example of that, for instance.294    I have spoken with many of these companies and actually295visited them. One of the things that I keep hearing is about296wanting to see if we can sort of fix the procurement process297and make it better. It is nowhere close to perfect right now.298You know, there are a lot of things that a lot of these299companies have to face when it comes to DoD procurement,300whether it is workforce challenges, budget uncertainty, and the301long and inflexible acquisition processes. These are especially302true for the smaller businesses that do not have the budget to303be able to anticipate what is going to happen in the future.304They are going month to month, and do not have the revenue305already in place, in many cases. So, we want them to continue306to work with the DoD and all of our agencies and be able to307innovate.308    We have Ms. Oakley here today, and the GAO report that was309released today talks about some of this, and about how it can310take over a decade to deliver essential capabilities to the311field.312    Any time I speak with folks in industry, they are also313concerned about the uncertainty that Congress creates, as well.314These continuing resolutions, for instance, are hurting315innovation. And the private sector and our contractors have to316make investment decisions based on what is going to yield the317best results, and this uncertainty makes it difficult. Many318hang onto cash reserves to cover for a shutdown or a CR so they319do not have to lay anyone off, but in many other cases they320have to lay off a lot of really good people, and then it is321hard to get them back.322    One of the things I want to talk about today is how we can323make things more certain for our contractors, so that they can324be responsive to the DoD and be able to deliver products on325time, efficiently, and under budget.326    Finally, I want to talk about the workforce at the DoD. One327of the things that will help with procurement is having328experienced, knowledgeable procurement officers. I am concerned329about some of the cuts that have been made at DoD, and cuts330made especially to technologists and technology experts, those331who are actually leaving or being forced out. So, if we really332want to have cutting-edge technologies at the DoD, we need to333have good technologists and good procurement officers who know334which technologies we should be acquiring.335    I will give you one example. The Office of the Director of336Operational Tests and Evaluation, or DOT&E, this office was337created by Congress in 1983 to be an independent advisor to the338DoD on weapons testing, and many contractors in my district339work with them on this. It provides critical checks on the340acquisition process and makes our weapon systems effective,341reliable, and safe.342    But last month, the Administration significantly cut the343staff there, including halting all of its work with344contractors, and this has led to a ripple effect of cuts to345other organizations that support this work. And we now risk346moving inadequately tested technology to the field which will347only add further delays and cost increases.348    I want to thank the Chairman and all of our witnesses for349being here today, and I was glad to see that our colleagues on350the Armed Services Committee, as well, want to make this a351bipartisan priority in the NDAA this year. So, I hope we can352learn from this hearing today and take some of these findings353to the Armed Services Committee and to others in Congress and354find some real solutions.355    Thank you again, and I yield back.356    Mr. Timmons. Thank you for that. I am pleased to welcome357our witnesses here today.358    We have Ms. Boatner, who is the Vice President of National359Security Policy at the Aerospace Industrial Association. She360has nearly 15 years of experience in shaping DoD acquisition361and procurement policy in the Pentagon.362    We have Mr. Snelgrove, a Senior Fellow with the National363Defense Industries Association. He has held senior positions in364the U.S. Air Force, the Department of Defense, and on Capitol365Hill, bringing a wide range of experience to today's366discussion.367    Ms. Oakley is Director in the Government Accountability368Office's Contracting and National Security Acquisitions team.369She oversees GAO's portfolio of work regarding DoD acquisition370policy and oversight.371    And finally, Mr. Schwartz is a Defense Fellow at the372Coalition for Government Procurement, and is no stranger to373testifying before the House Oversight and Government Reform374Committee. We welcome you back, Mr. Schwartz.375    Pursuant to Committee Rule 9(g), the witnesses will please376stand and raise their right hand.377    Do you solemnly swear or affirm that the testimony you are378about to give is the truth, the whole truth, and nothing but379the truth, so help you God?380    [Chorus of ayes.]381    Mr. Timmons. Thank you. Let the record reflect that the382witnesses have all answered in the affirmative.383    We appreciate you being here today and look forward to your384testimony. Let me remind the witnesses that we have read your385written statement and it will appear in full in the hearing386record. Please limit your oral statement to 5 minutes.387    As a reminder, please press the button on the microphone in388front of you so that it is on and the Members can hear you.389When you begin to speak, the light in front of you will turn390green. After 4 minutes, the light will turn yellow. When the391red light comes on, your 5 minutes have expired and we would392ask that you please wrap up.393    I now recognize Ms. Boatner for her opening statement.394395                     STATEMENT OF MARGARET BOATNER396397                VICE PRESIDENT, NATIONAL SECURITY POLICY398399                    AEROSPACE INDUSTRIES ASSOCIATION400401    Ms. Boatner. Chairman Timmons, Ranking Member Subramanyam,402Members of the Subcommittee, on behalf of the Aerospace403Industries Association thank you for the opportunity to testify404today on how we can reform acquisition and procurement405processes to accelerate defense innovation.406    AIA represents hundreds of companies across the aerospace407and defense sector. These companies and others operating across408the broader defense industrial base are important partners to409the Department of Defense in its mission to develop and deliver410innovative technologies to the warfighter.411    The operate effectively, the defense industry relies upon412several conditions, including clear and stable demand signals413from both Congress and the executive branch, sufficient Federal414investment, and an acquisition system that promotes speed,415flexibility, and innovation.416    Unfortunately, these conditions do not exist today. Flat417defense budgets, the annual reliance on short-term continuing418resolutions, and abrupt programmatic changes have created419instability and an uncertain business environment that makes it420difficult for the defense industrial base to develop innovative421new technologies, maintain production lines, or support a422skilled workforce. Couple that uncertainty with a defense423acquisition system born in the cold war and fundamentally424designed to eliminate risk, and the result is a rigid and425lengthy system which does not enable the flexibility or speed426required by today's evolving threat landscape.427    As evidence of this, the average amount of time for a major428acquisition program to deliver capability is now 11 years.429Given the rapid pace at which technologies and threats evolve430today, that is too long.431    These protracted timelines can be directly attributed to432the maze of burdensome statutes, regulations, and policies,433both the DoD and defense industrial base must comply with. For434example, the Federal Acquisition Regulation, which governs the435Federal procurement process, spans more than 2,000 pages. When436combined with the DoD's supplementary regulation, known as the437DFARS, it totals more than 5,000 pages. And this does not438include thousands of additional pages of requirements contained439within various defense policies, guides, and manuals.440    Taken together, these challenges have had a corrosive441effect on the health of the industrial base and our national442security. In some cases, these obstacles have driven companies443to stop participating in the defense ecosystem altogether. From4442011 to 2020, approximately 40 percent of small businesses445decided to leave the DoD market.446    For those companies who stayed, the defense marketplace has447only become more difficult to operate in. Demand signals448discourage long-term investments and novel technologies.449Extended and unpredictable contract award timelines make it450challenging to attract and retain skilled workforces. And the451multitude of laws and regulations significantly increase the452cost and complexity of doing business with the government.453    While the process and the regulations in place today were454undoubtedly well intended and put in place to mitigate specific455risks, the cumulative effect is an acquisition system that456stifles innovation, drives up cost, and struggles to deliver457critical capabilities to our warfighter.458    We recognize that as we sit here today, conditions are ripe459to tackle reforms that will fundamentally alter the statutory460and regulatory framework that the defense industrial base must461operate in. This is a unique opportunity, and we applaud462efforts ongoing across the legislative and executive branches463to tackle these longstanding challenges. We stand ready to464partner with you in these efforts, and we ask that you keep465several things in mind as you contemplate such reforms.466    First, we recommend an all-of-the-above approach to467reforming the acquisition system. This approach recognizes the468contributions of the whole industrial base, which is a complex469network of established primes, new entrants, mid-and sub-tier470suppliers, small businesses, and commercial providers of all471sizes are required to meet the warfighter's needs. These472efforts should include finding ways to empower new entrants in473the market, streamlining access for small and midsized474businesses, and addressing the obstacles faced by established475vendors in executing programs.476    Second, Congress and the DoD should focus on rightsizing477the regulatory regime. This will require a focused and478comprehensive review to harmonize and streamline the layers of479compliance requirements that have been added over many years,480while still ensuring proper oversight mechanisms remain in481place. Government and industry collaboration will be crucial in482identifying those most onerous compliance requirements. AIA483conducted a deliberate review of these regulations, and I would484be happy to discuss these areas in more detail, should you485like.486    Last, any efforts to reform the acquisition process and487reduce burdensome regulatory requirements will be done in vain488if Federal investment in national defense does not keep pace489with the threats we face. We encourage a return to on-time,490predictable, and sufficient defense funding. A consistent and491stable demand signal is an essential pillar in strengthening492the defense industrial base.493    Taken together, these changes will broaden the defense494industrial base, enable DoD to better access industry495innovation, and accelerate processes to more rapidly deliver to496the warfighter.497    We look forward to working with Congress and the DoD as498reforms are identified and implemented. On behalf of AIA, thank499you for the opportunity to testify, and I look forward to your500questions.501    Mr. Timmons. Thank you for that. I now recognize Mr.502Snelgrove for his opening statement.503504                      STATEMENT OF ERIC SNELGROVE505506                             SENIOR FELLOW507508                NATIONAL DEFENSE INDUSTRIAL ASSOCIATION509510    Mr. Snelgrove. Chairman Timmons, Ranking Member511Subramanyam, and Members of the Committee, good morning and512thank you for the opportunity to testify today on military513procurement and defense innovation, and specifically the514critical role that small businesses and defense technology515startups play in securing our Nation's future.516    As a military officer and veteran of the wars in Iraq and517Afghanistan, a former congressional staffer on the House Armed518Services Committee, and now a small business owner working in519national security, I have seen firsthand how innovation thrives520in America, but too often fails to reach the warfighter. The521challenge is not a lack of ideas or ambition. It is a system522that is encumbered by red tape and resists change.523    Bottom line, we are operating at two speeds--one fast,524adaptive, and entrepreneurial, and the other constrained by525outdated processes and paralyzing uncertainty.526    Despite growth in venture capital and new entrants into the527defense marketplace, small businesses still account for a528disproportionately small share of defense contracts. Promising529technologies remain locked in pilot programs or mired in530procurement cycles that outlast the companies themselves. For531early stage defense technology companies, the financial532realities are stark. The average time between venture funding533rounds is just 12 months, placing immense pressure on founders534to quickly demonstrate product-market fit, validate their535technology, and secure meaningful government contracts. Yet,536the DoD procurement cycle operates on a much longer timeline.537As a result, many promising startups either pivot away from538national security or fail outright, not because of539technological shortcomings but because the system is simply too540slow to keep pace with private sector tempo.541    Fortunately, America's national security base is resilient542and determined. We are at a pinnacle moment, one where years of543frustration have matured into a focused, bipartisan544conversation about reform. Legislative interventions like the545FORGED Act and the recently introduced SPEED Act reflect this546shift, offering pragmatic solutions to unlock acquisition speed547and empower portfolio-based decision-making.548    Building upon this progress, I offer four recommendations.549    No. 1, we must reform acquisition pathways and adopt a550commercial first system to capitalize off private sector R&D.551Defense innovation does not emerge from rigidly executing552outdated requirements. It thrives when companies take risks,553anticipating emerging threats, and build capabilities the554Pentagon did not yet know it needed. If we want to outpace our555adversaries, we must empower those who are building the future,556not just fulfilling the past. The recent executive order from557the White House on Modernizing Defense Acquisition and Spurring558Innovation is an important step toward adopting a commercial-559first acquisition framework.560    No. 2, we must invest in manufacturing and industrial561resilience, including workforce development, additive562manufacturing, and targeted use of Defense Production Act563authorities, which are set to lapse at the end of September.564Programs like the DoD Office of Strategic Capital loan program565are critical for bridging the funding gap that often prevents566innovative technologies from scaling beyond prototype into567full-rate production. The expansion of OSC's lending568authorities and the House-passed reconciliation bill is an569important step to making this program more accessible to570defense technology startups.571    No. 3, we must confront the national security talent crisis572with the seriousness it demands, recognizing that every573breakthrough defense technology begins with an American mind,574often shaped by a U.S. university and supported by federally575funded research and development. Now is not the time to cut576basic research funding. Doing so would undermine the very577foundation upon which the future technologies and future578companies are built. We cannot afford to sacrifice our long-579term national security for short-term budget optics.580    No. 4, we must cut through the red tape that is holding581back America's innovation base. This means harnessing the power582of AI to streamline bloated contracting processes and back583office functions. We must also modernize outdated export584controls that prevent U.S. companies from equipping our allies585with trusted technology, remove legacy barriers that delay586access to classified facilities through innovative policy587reforms, and ensure that government laboratories are focused on588supporting private sector innovation, not competing with it.589    This Committee plays a vital role in ensuring590accountability and progress. It is your oversight that ensures591innovation mandates are implemented and that we do not allow592bureaucracy to choke off opportunity.593    America's edge in innovation is not guaranteed. It must be594earned and renewed with deliberate policy, sustained funding,595and a defense ecosystem that values speed, risk-taking, and new596voices. If we want to field the most advanced capabilities597before our adversaries do, we must create a system that rewards598these behaviors.599    Thank you, and I look forward to your questions.600    Mr. Timmons. Thank you for that. I now recognize Ms. Oakley601for her opening statement.602603                  STATEMENT OF SHELBY OAKLEY, DIRECTOR604605             CONTRACTING AND NATIONAL SECURITY ACQUISITIONS606607                    GOVERNMENT ACCOUNTABILITY OFFICE608609    Ms. Oakley. Chairman Timmons, Ranking Member Subramanyam,610and Members of the Subcommittee, I appreciate the opportunity611to be here today to speak about DoD's path forward for612reforming acquisition and accelerating innovation.613    The Department of Defense is at a critical crossroads when614it comes to procurement and innovation. The pace of615technological change, from biotech and microelectronics to AI616and machine learning, is accelerating. Unfortunately, our617adversaries are moving faster than we are to turn these618advances into military advantage.619    To its credit, DoD recognizes that the current acquisition620system is not keeping up, as does the Congress. There have been621reforms, things like new pathways, new offices like the Defense622Innovation Unit, more flexible contracting options like OTAs,623and even recent executive orders calling for the overhaul of624acquisition and procurement at DoD. But despite these efforts,625the system remains too slow, too rigid, and too costly.626    This morning we released our 23d Annual Assessment of627Weapons Programs. DoD plans to spend at least $2.4 trillion on628its weapons portfolio, yet it now takes nearly 12 years, on629average, to delivery capability to the warfighter. That is a630year and a half longer than just last year.631    Why is this happening? A big part of the problem is that632DoD is still operating with an outdated, linear acquisition633model. This model locks in cost, schedule, and performance634requirements before the program even begins real design and635testing. As a result, programs take a long time and are often636delivering on outdated needs with outdated technology.637    In contrast, the world's most successful companies use638iterative development to build and improve complex products.639They refine high-level requirements based on real-time640feedback. They leverage modern digital tools to design, test,641and manufacture faster, and they deliver value early, and then642they keep evolving their products over time to keep adding643value.644    DoD's adaptive acquisition framework was meant to bring645more flexibility and speed to the process. But while it has646helped some programs get off the ground more quickly, we are647not seeing them finish any faster.648    Take the middle tier pathway. It is designed for programs649that can deliver capabilities within 2 to 5 years. Yet, many650programs are taking that long to just prototype, and then at651least 5 more years to provide any real capability. Bottom line,652programs are not using the framework to achieve the653efficiencies the Department intended for it to. As a result,654the warfighter is still left waiting more than a decade for655capability.656    We have found that many programs are not using iterative657development, and that is a missed opportunity. Getting the658benefits of iterative development requires planning for it from659the start, setting up programs to test, learn, and adjust early660and often, based on feedback. It also means adopting modern661digital tools and building an innovation pipeline that662continually feeds new technologies into development.663    But innovation cannot happen without strategy. DoD's664science and technology planning still lacks clarity. It does665not define the right mix of incremental versus disruptive666innovation or assess whether they are achieving the mix.667Leading companies do this as a matter of course. It is how they668ensure they are prepared for both the near term and the long669haul.670    Over the years, GAO has made clear, actionable671recommendations based upon our body of work examining the672practices of leading innovative companies. In line with these673practices, we have urged DoD to update its policies to support674iterative development, define and track innovation investments,675and create a more agile S&T management framework. But progress676has been limited.677    And we are not the only ones calling for big change. The678current Administration and previous administrations, several679commissions, Congresses, and countless think tanks all have put680forward ideas for overhauling the acquisition and budgeting681systems. There is near universal agreement that the status quo682is not working.683    But DoD cannot keep applying workaround to a broken system.684The threat environment is evolving too quickly for that. What685is needed is full-scale shift toward an acquisition model built686for speed, flexibility, and innovation. GAO's work, alongside687our many open recommendations, offers a roadmap for getting688there. We believe that adopting proven commercial practices can689provide the strategic foundation for DoD that it needs to meet690the moment.691    Chairman Timmons, Ranking Member Subramanyam, and Members692of the Subcommittee, this concludes my opening statement. I am693happy to take any questions you have.694    Mr. Timmons. Thank you for that. I now recognize Mr.695Schwartz for his opening statement.696697                      STATEMENT OF MOSHE SCHWARTZ698699                             DEFENSE FELLOW700701                  COALITION FOR GOVERNMENT PROCUREMENT702703    Mr. Schwartz. Thank you very much, Chairman, Ranking704Member, Members of the Subcommittee. Thank you for inviting me705to talk about the defense acquisition system and innovation706adoption.707    Our defense industrial base is shrinking, but it is not708just small businesses. It is all businesses. The battlefield is709evolving faster than our acquisition system can keep up with.710We are seeing this in real time, today, in the Pacific, and in711Ukraine.712    The U.S. does not have an innovation problem. The713Department of Defense has an acquisition and adoption problem.714Ms. Boatner is right--overregulation is choking our system. It715is the No. 1 cause, consistently in polls, on why companies716either leave the defense industrial base or choose not to work717with it in the first place.718    We need to streamline a lot of these regulations. Cost719accounting systems--those have not been updated in a decades,720commercial buying practices, the thresholds we use for721acquisition. These all need to be reviewed, and many of those,722if not all of the ones that I just mentioned, are within the723jurisdiction of this Committee.724    Mr. Snelgrove is right, we need small businesses. The Small725Business Act was championed by President Eisenhower, who knew,726better than most Americans, the importance to the Department of727Defense of getting the capabilities of small businesses into728DoD. And the theory--and he said this, and you can look at the729congressional Record, this is what they talked about for the730Small Business Act--we need the capabilities and technology and731adaptability of small businesses, and we need a fair, level732playing field for everybody. Because what we need at the end of733the day is for DoD to have the best capabilities, not what734company we buy it from but what they are delivering to the735warfighter.736    And it is not just small businesses. It is not just medium-737sized businesses. We need the entire industrial base. Because738at the same time that the defense industrial base is shrinking,739the entire economy and the number of companies in the United740States is increasing, and we need to tap into that.741    Ms. Oakley is right, we cannot have 500-plus-day742requirement processes, budget processes that take years, and743acquisition systems that take just as long. We need iterative744systems, and we need to constantly evolve. It is not once745something is deployed, it is deployed. We need to constantly746evolve.747    But we are just playing around the margins. All these748things are very important. But we are just playing around the749margins. We are not going to move the needle unless we do two750things: deal with the defense acquisition workforce and751modernize DoD's IT systems.752    Acquisition, at its heart, is not about regulations. You753cannot legislate good acquisition. It is a human endeavor. And754the outcomes that we see in acquisition depends on the755judgment, the decisions, and the thoughts of the people that756run that system. And we need the right people in the right757place.758    And let me emphasize, not just the right people in the759right place. I recall when I was in Afghanistan as an advisor760to CJ5 at the time for logistics, I was talking to his advisor761on acquisition. And we were talking about how much money is762being spent in Afghanistan on contracts. And I said, ``Well,763that is not what the Federal procurement data says.'' The764Federal procurement data system tracks all data in the Federal765Government. And he said, ``Well, I never heard of it.'' And I766was stunned he never heard of it. I said, ``You are the767acquisition advisor.'' He said, ``Yes, for about a week and a768half. When I landed in Afghanistan, I was a helo pilot, and now769they made me an acquisition advisor.'' That might be the right770person, but in the wrong place. It is like playing a football771game and having the best coaches and the best game plan, but772your quarterback lining up to be wide receiver. That is problem773No. 1.774    Problem No. 2 is very often our acquisition workforce does775not control the technical baseline. They do not know about the776systems. I remember talking to a program manager who was doing777a logistics IT system for the Army. And I said to him, ``Oh, is778this your first time being a program manager?'' He said, ``Yes,779it is my first time being a program manager.'' I said, ``Are780you a logistics guy?'' He said, ``No. I am an explosives guy.''781``So, but you know IT.'' He said, ``I will shortly,'' and782picked up the book, SAP for Dummies and showed it to me. I783mean, here was a great explosives guy, but that is the problem.784They did not control the technical baseline. And then what do785we do? We have him be a program manager for 3 to 4 years, and786then we rotate him somewhere else. So, everything that he787learned, he moves to another job that he cannot apply anymore.788    And then IT. All of this depends on IT. Auditability789depends on IT. Logistics depends on IT. Readiness depends on790IT. And I will give one vignette.791    There was an article this year about how the Army, when792they need spare parts, 90 percent of the spare parts they need793are parts that DLA has. So, they would send in their IT system794the request to DLA. And the Army IT system did not talk to the795DLA IT system, so the parts never got there. That is not a796regulation problem. That is not an access problem. That is a797fundamental IT problem. We have planes, ships, weapon systems,798just sitting there, not operable, because of our IT systems.799Until we address these issues, yes, overregulation, yes,800iterative, yes, small business. Those are all critical. But801until we address these other issues, we are not going to802substantially move the needle.803    Thank you.804    Mr. Timmons. Thank you. I now recognize myself for 5805minutes of questions.806    Let us start with the big picture. We hear the defense807industry call the procedures of going through the Department of808Defense acquisition process the ``valley of death.'' Mr.809Snelgrove, can you briefly define for the Subcommittee what the810``valley of death'' looks like in DoD acquisition, and, if you811can, quantify its scale in terms of dollars lost?812    Mr. Snelgrove. Thank you for the question, sir. Yes, the813``valley of death,'' specifically for small businesses and814defense technology startups, is once we provide these small815businesses with, in many cases, it is a Small Business816Innovation Research contract, so typically less than $1817million, to assess the feasibility of their technology for DoD818use cases. The DoD has the largest SBIR program in government,819and they have created essentially a front door for small820businesses to engage with the DoD.821    Unfortunately, we have not created the mechanisms for small822businesses to graduate from that program routinely and then823scale their technology across the Department of Defense. And as824a result of that, they are losing access to over $100 billion825in potential procurement in each and every annual826appropriations bill.827    Mr. Timmons. Thank you for that. Ms. Boatner, can you give828us an example of how long a non-major defense acquisition829program takes? More specifically, how much time does a830commercial-grade prototype spend on contract negotiations831versus research, development, and testing?832    Ms. Boatner. Absolutely. Right. So, we talked about major833development programs taking about 11 years. When we are talking834about a non-major system and you are focused on commercial,835that should be able to be done in a matter of months. I think836what you see, in reality, though, is that that can take upwards837of years. Congress and the Department has given streamlined838authorities to procure commercially, and what I would tell you839is that within the Department of Defense, I think in response840to a risk aversion, a creeping back of those requirements that841Congress intentionally tried to remove.842    So, while it should only take a shorter amount of time,843particularly when you are talking about a smaller system that844could be done in months, it is taking years.845    Mr. Timmons. Relatedly, have you seen instances where the846scope of the DoD's needs change over time, and that ends up847exceeding the procurement process? And if so, do you have an848example?849    Ms. Boatner. Absolutely. I mean, I think across warfighting850portfolios you see that. It is referred to as ``requirements851creep,'' and the requirements process, particularly for larger852weapon systems, can take anywhere from 1 to 3 years. So, in853that 1-to 3-year time period, of course requirements are going854to evolve. New technologies are emerging. New threats are855emerging. And so, requirements are changing.856    The problem, though, is that the requirements process is so857prescriptive that, to Ms. Oakley's point, the Department858struggles to respond to those changes with any agility.859    Mr. Timmons. I happen to be meeting with the South Carolina860Home Builders Association later today, and they always complain861that permitting is costing them up to 35 percent of the cost of862the new build. I mean, if you think about it, that is pretty863wild, I mean, between delays and just the regulation. It seems864that we are kind of getting to something similar cost-wise in865the procurement process. And it has gotten so bad that I guess866certain people are saying we are just going to turn it upside867down and go out and create something and hope it works out.868    I recently saw the 60 Minutes expose on Anduril, and the869founder there is just saying, ``I am going to build this and870then bring it to DoD and tell them why they want it.''871    Mr. Schwartz, has this happened before, or is this just872kind of a novel approach?873    Mr. Schwartz. It has happened before, and there are a lot874of companies that have these great capabilities. And it goes875back to, I think, a great point, is the technology is out876there. The innovation is out there. The problem is acquisition877and adoption of the Department of Defense.878    When you talk about programs that take 11, 12 years, or a879requirement process that takes more than a year, one of the big880challenges is by the time you finish, it is already obsolete.881    So, the more that companies can invest and develop the882technologies, the better. But I think what it really drives to,883to really get to the heart of your question, is yes, we should884be looking at the commercial markets and buy a lot more885commercial, and not just buy commercial. Let us use commercial886buying processes to buy it. Let us try to limit all those other887regulations that we put on--and we do this to ourselves in the888Department--that we put on DoD internally, that take so long,889and add all of these contract clauses that companies never deal890with.891    Mr. Timmons. Thank you for that. I feel like necessity is892the mother of invention, and I do not think the Ukrainians are893taking 11 years to develop their next drone that they are using894in real time. So, we need to get better at this.895    With that I yield back, and now I recognize the Ranking896Member, Mr. Subramanyam, for 5 minutes.897    Mr. Subramanyam. Thank you, Mr. Chairman. It is a very good898conversation. I guess, Ms. Oakley, your report came out today,899and I am very interested in some of the findings here,900especially this iterative development approach and trying to901reform how we procure things at DoD.902    I guess I am going to try to summarize kind of what has903been said, which is right now the DoD has a lot of money, but904it spends that money in a way that is not very agile. It905sometimes buys technologies or products, but the acquisition906process takes so long that by the time they receive that907product it may be obsolete because of how fast things are908changing.909    In other cases, as Mr. Snelgrove mentioned, small910businesses really do not want to work with the DoD, or have911trouble working with the DoD, because the process is so912cumbersome, and Ms. Boatner mentioned some of that, as well.913So, you are not getting the best and brightest in our country914working with the DoD, trying to help them innovate.915    There are some exceptions to this that I want to point out,916like the Defense Innovation Unit. But it is a workaround, as917Ms. Oakley mentioned. It is not necessarily the norm at the918DoD.919    And then Mr. Schwartz mentioned that a lot of these920procurement officers are not experienced in what they do, and921that a lot of times they are just sort of, sometimes literally922helicoptered in, thinking they are going to be doing something923else, and then they end up being the acquisition person. And924then they leave and do something else and then a new925acquisition person comes in too. And in the meantime, a lot of926the IT and tech people, we seem to be losing them.927    So, I think that is sort of the summary in my head of what928is going on here. I am new here. This is my first term. But929this certainly cannot be the first time we have had this930conversation. So, Ms. Oakley, I would just ask, why has not931anything changed? This cannot be the first time we have had932this conversation, right. Why has change been so slow at the933DoD?934    Ms. Oakley. I think that change has been slow for a number935of reasons. I think oftentimes the changes are focused on936things around the margins, trying to change a specific process937or a specific policy to get at a particular issue. But what our938work would advocate for is a wholesale, new approach to939acquisition that would address a number of the issues that we940are talking about here. Having an iterative development941approach opens you up to businesses that you would never be942able to work with before because they do not want to work in943DoD's long, linear acquisition processes, with all the944bureaucratic hurdles that they have to go over. But an945iterative development process opens them up to a new world.946    I think the other thing that is important to note is, is947that the prior long, linear acquisitions that we have had in948the past have maybe been OK for the threats that we have faced949over the past several decades. That is different now. We are in950a new world where technology is evolving very quickly, and the951threat is changing, and we are facing peer competitors. That is952all a new world, and that requires----953    Mr. Subramanyam. Are those new problems, though?954    Ms. Oakley. New problems, yes.955    Mr. Subramanyam. In the past 10 years, you would say?956    Ms. Oakley. Yes, I would say it is new problems and new957opportunities, right? The pace of technological change is958stunning right now, and being able to seize on those959opportunities is something that DoD needs to be able to take960very seriously.961    Mr. Subramanyam. How much money--this is for anyone--how962much money do you think we could save by fixing DoD963procurement? Like ballpark, you would say.964    Ms. Oakley. I think you could save hundreds of billions of965dollars. I mean, just our work on weapon systems alone, where966we point out cost and schedule overruns for these programs967every year in our annual weapons assessment would really point968to the fact that if we got more efficient and effective at969providing capabilities to our warfighter, we would save a970significant amount of money and avoid a lot of the waste in the971system that we have right now.972    Mr. Schwartz. And I would say three points about that973question. The first one is I would say we can at least save 10974percent, even when you are talking about actual dollars.975    But I want to make two other points. We would get things976faster. We get them into the field faster. That sometimes is977more important than some of the cost savings. And two is, we978would get better capabilities at the same time. There are979companies, I know companies that will not offer their front,980top technologies to the Department of Defense. They will sell981them the second-or third-generation technologies but not the982first.983    So, we are talking about three things. We are talking about984cost savings, and it could be significant, we are talking about985how fast we get these capabilities into the hands of the people986that need it, and it is just not warfighters. It is the987logistics systems, like we talk about, so the right things get988to the right places, so we can fix things.989    Mr. Subramanyam. So, to summarize, because I am running out990of time----991    Mr. Schwartz. Sorry.992    Mr. Subramanyam [continuing]. By doing DoD procurement993reform we would save hundreds of billions of dollars, at least.994I think it is actually more. We would get things faster, and we995would get better technology. I think this should be one of996Congress' top priorities when it comes to budgeting.997    I yield back.998    Mr. Timmons. Thank you for that. And I think the plan is to999have a second round of questions for anyone that is interested.1000    I now recognize the gentleman from Arizona, Mr. Biggs, for10015 minutes.1002    Mr. Biggs. Thank you, Mr. Chairman. I thank the witnesses1003for coming.1004    So, everybody but Mr. Schwartz--but I knew you were1005thinking this too--all of you mentioned Congress' failure to do1006a budget but to resort to CRs repeatedly, that that is a major1007problem. It is a major problem, and shame on Congress. In my1008entire time here, I have only voted for one CR, and I kind of1009have buyer's remorse even over that one.1010    The other thing is, DoD has consistently had crappy audits.1011They have never passed an audit, to be frank. And it is because1012you have a sclerotic, bureaucratic system, and they told us,1013``We are too big to be audited. We do not know where it is all1014going.'' That is a huge, huge problem.1015    So, we have been focusing on procurement today, but I will1016just tell you that the previous administration also implemented1017something called Project Labor Agreements on Federal contracts.1018And those agreements kill competition, they inflate prices,1019they block non-union contractors from fair opportunities.1020    So, the Trump Administration said we are not going to do1021that anymore. Federal claims court says, ``That is right. You1022do not have to do that.'' Then the district court judge in D.C.1023came in and said, ``Well, wait a second. We are going to1024reinstate that.'' The result is you sideline some of the best1025contractors, which we were already talking about in the1026procurement system, you sideline many contractors. Many1027entrepreneurs may be interested, but they do not want to get1028into it because it is so bad.1029    In my state, because of the PLAs, businesses are forced to1030abandon bids. They are forced to get into unionization. And1031this is a state where 97 percent of the workers are non-1032unionized. I mean, this is just absurd. So, we end up rigging1033the system.1034    Mr. Snelgrove, are you aware of PLAs?1035    Mr. Snelgrove. I am aware but I am not an expert.1036    Mr. Biggs. OK. Ms. Oakley, are you aware of PLAs?1037    Ms. Oakley. Same answer.1038    Mr. Biggs. Ms. Boatner?1039    Ms. Boatner. Same answer.1040    Mr. Biggs. OK. Mr. Schwartz, it is down to you, baby.1041    Mr. Schwartz. I feel obligated not to disagree with anyone1042on this panel.1043    [Laughter.]1044    Mr. Biggs. Very good. Well, here is the problem. Everything1045you guys have talked about is stuff that we have talked about1046before, but we do not ever make the change, because you have1047bureaucratic stasis. There is no real attempt to move it,1048because there is no incentive to move it. Until this body says1049we are going to make a change, then there will be no incentive1050for the agency, the Department, to make the change.1051    So, we can talk until we are blue in the face about all the1052great ideas you all have, but it is us. We have met the enemy;1053it is Congress. It is us. And until we make the change, it is1054not going to happen.1055    So, whether it is on the PLA side or just, you know, the1056project side, or whether it is the procurement process, these1057bureaucratic overlays--and by the way, it is not that they will1058not just not get better. It is that they will get worse,1059because there is no incentive to change. And what bureaucrats1060find incentive in doing is protecting a fiefdom, the system1061that is in place. They are comfortable with the status quo1062because that is what they know.1063    Now, what is the status quo in the military? It is to have1064an acquisitions officer that is there for 6 months to 2 years,1065and they move them on back to the bomb squad, or whatever it1066may be. And that is a perpetual problem that we have.1067    But what changes it, ultimately, is going to have to be1068tied directly to funding. You know what Congress' response to1069this is every time? It is, ``Yes, they have never passed an1070audit. Yes, we know there is massive amounts of waste, because1071studies have routinely said there is massive amounts of1072waste.'' But you know what we do? We say, ``We are going to1073give you more money. That is what we are going to do.'' We are1074not going to give you any kind of direction on how to fix this,1075because that would cause Congress to actually think, in a1076bipartisan way, restructure what is happening in DoD. But we1077are never going to do it. I am sorry to say this body is1078probably irredeemable.1079    And with that I yield back.1080    Mr. Timmons. Thank you for that. I know recognize the1081gentleman from Massachusetts, Mr. Lynch, for 5 minutes.1082    Mr. Lynch. Thank you. First of all, thank you to all the1083witnesses for your willingness to come forward and help the1084Committee with its work.1085    Mr. Schwartz, since January of this year, when the Trump1086Administration took over, we have had about 121,000 layoffs at1087DoD. Do we know how many of those employees came out of the1088Defense Acquisition Department?1089    Mr. Schwartz. I do not know. Estimates I have heard of1090ultimate goals was something like 10,000, but that is only what1091I have heard.1092    Mr. Lynch. Yes. The Deferred Resignation Program that was1093offered to DoD took out 21,000 of our employees who, to be1094eligible you had to be 50 years old and you had to have 201095years of service. If you had 25 years of service there was no1096age limit, obviously.1097    But that cohort, you know, first of all, 83 percent of1098these people have a bachelor's degree or greater. I am just1099trying to figure what the impact of the layoffs and the so-1100called Deferred Resignation Program had on the efficiency and1101the capabilities of the defense acquisition program, in1102general.1103    Mr. Schwartz. Sure. So, two comments. One is you mentioned110420 years and over 50, and I just realized how old I am because1105I fit into that.1106    Mr. Lynch. Yes, but that would be some of our most valuable1107and knowledgeable and capable employees, right?1108    Mr. Schwartz. There are a lot of people that are very1109capable, absolutely. And I cannot control what the size1110ultimately will be. But I do believe we absolutely can take1111steps now to ensure that we have the right workforce, and,1112importantly, not just numbers but the right skills and the1113right incentives for the people, in 2 years, 3 years, 4 years,1114because this is a long-term game.1115    Mr. Lynch. Yes. Going back to the gentleman's earlier1116question, do you have any idea how many PLAs are actually in1117place?1118    Mr. Schwartz. I am sorry.1119    Mr. Lynch. Anybody there? My experience, and I am a former1120union president for the ironworkers, and one of the complaints1121I have, just generally, with DoD, is contracts are just a black1122box. Nobody knows how these contracts are being awarded. It1123seems like there is a propensity to award contracts to firms1124that have connections with former admirals or generals, and so1125they have inside knowledge of the needs of DoD. They have got1126those relationships. And that is much more prevalent. That is1127involved in every single DoD contract, and there are very, very1128few product development programs or any contracts at DoD in1129acquisitions that have a PLA. They might do it to build a1130warehouse or something like that, but there are very few of1131those. I do not know of any that are in place right now, in the1132entire United States.1133    But those programs, a PLA would require that those1134individuals working on that program go through an1135apprenticeship program so that they are highly skilled. I think1136electricians it is a 5-year apprenticeship program, for1137plumbers, pipefitters, steamfitters, 5-year program. So, they1138make sure that these folks that are going on to DoD projects1139are actually highly skilled and able to perform the work at a1140level that meets the standards of the Defense Department.1141    What do you think would be the most impactful change that1142we could make in this whole acquisition process in order to1143generate some of the savings that are there potentially, that1144exist right now? I know we are talking huge numbers, but are1145there one or two things--I am not asking for a silver bullet,1146but the most important changes that we can make to actually1147glean those savings that we desperately need?1148    Mr. Schwartz. Yes. Invest in IT systems, and I will just1149give two examples. I think we talked about this last time. DoD1150does not have a world-class defense travel system. There is the1151Defense Travel System. You could actually go onto YouTube and1152you will hear rants by uniformed personnel about their travel1153system. You could actually see it. It is interesting.1154    So, DoD tried to put in a new system, because DTS had about1155a $1 billion of improper payments, where we do not know what1156happened. So, they had a system. They did a successful other1157transaction and successful prototype, and they could not1158implement it, a commercial system that is used ubiquitously1159around the world by Fortune 500 companies. They could not1160implement it. It was not a problem with the system. It was a1161problem with DoD.1162    That costs money. We can save money on travel. We can save1163money on logistics. We can save money on maintenance. We are1164buying more planes because we have readiness rates which are so1165low, we do not have enough to fight with. We could save a lot1166of money--it is like investing in college--if we did the IT1167systems right.1168    Mr. Lynch. Thank you, Mr. Chairman. I appreciate your1169indulgence. Thank you.1170    Mr. Timmons. Yes, sir. I could talk about DTS all day long.1171It is really terrible.1172    I now recognize the gentleman from Kentucky, Mr. Comer, for11735 minutes.1174    Chairman Comer. Thank you, Mr. Chairman. Ms. Boatner, the1175Defense Intelligence Agency recently released a report1176addressing the status of the missile threat in response to1177President Trump's goals of building a Golden Dome defense1178system. How vital will procurement modernization be to the1179success of that particular initiative?1180    Ms. Boatner. It will be critical. You know, what they are1181contemplating with the Golden Dome will certainly be a major1182defense acquisition program, meaning that it will be subject to1183the most stringent requirements that currently exist across the1184acquisition system. So, subject to schedule delays and cost1185overruns, as most of our major defense acquisition programs1186are.1187    Chairman Comer. So, you agree strengthening public-private1188partnerships will better advance this project and strengthen1189and make the President's goals more doable and efficient?1190    Ms. Boatner. Yes, absolutely.1191    Chairman Comer. How do you see the government and industry1192working together to obtain this goal? It seems like this would1193be a challenging project for public-private partnership, but I1194do not see any other way for this to happen.1195    Ms. Boatner. Yes. The technical aspects of this program1196will be incredibly challenging, and I think as much1197communication between all of the players in the defense1198industrial base and the technologies that exist to enable such1199a system will be critical as the Department kind of really1200identifies the requirement and gets into the weeds of what they1201are going to ask for from industry, and it should be informed1202by what is resident across established primes, new entrants,1203small businesses who can all play in this ecosystem on this1204program.1205    Chairman Comer. Thank you. Mr. Snelgrove, your experience1206spans active military duty, government service, and private1207industry. How have you seen public-private partnerships benefit1208the Department of Defense?1209    Mr. Snelgrove. Congressman, I have witnessed, firsthand,1210from my time in both Iraq and Afghanistan, where public-private1211partnerships using university-affiliated research centers,1212federally funded research and development centers have all1213contributed technological advancements to the warfighter. I1214think currently you have a lot of great technology coming out1215of the private sector that is being largely funded by private1216sector research and development. So, to your earlier question1217about how is Golden Dome going to be successful, I think it is1218leveraging a lot of the private investment that is going into1219space, commercial space specifically, that is going into small,1220unmanned aerial systems that will contribute to that whole1221picture.1222    Chairman Comer. Yes. The reason I ask these questions,1223obviously I support public-private partnerships, and there is1224no doubt in my mind that we have to partner in a big way with1225the private sector to keep up with the threats that we face1226from China and other countries that are investing heavily in1227their military budgets.1228    But many of my colleagues on the other side of the aisle1229often criticize private relationships with government1230contracts, maybe because they do not like who the owner of the1231company is or whatever. They may not use pronouns in their1232website, or for whatever reason.1233    So, I think it is important that we face the reality that1234we have to have public-private partnerships. And it would be1235nice if we could do that in a bipartisan manner. I think1236President Trump has expressed a desire to focus, with this1237Golden Dome project, to try to have and make it a bipartisan1238project. I hope it is, Mr. Chairman. That is my goal, so we1239will see if that happens.1240    But thank you all for being here. Mr. Chairman, thank you1241for holding this Subcommittee hearing. I yield back.1242    Mr. Timmons. Thank you. I now recognize the gentleman from1243Maryland, Mr. Mfume, for 5 minutes.1244    Mr. Mfume. Thank you very much, Mr. Chairman. I want to1245thank you and the Ranking Member for calling us together on1246this. Obviously, I want to thank those witnesses who are here1247in the room for your testimoneys and for some of your insights1248into what is going on.1249    If you hear some disdain coming out of Members of this1250Committee, it is because this fight and this discussion has1251gone on for a long, long time, and we are all getting weary as1252a result of it.1253    We all agree that there are massive amounts of waste. We1254all agree that regulations and processes are too burdensome to1255sort of get around and get over. We all believe that we have1256got to have a situation, at particularly DoD but elsewhere,1257also that creates innovation and give it a chance to succeed.1258And I think we all believe that this DoD acquisition process1259leaves a lot to be desired.1260    What is left unsaid, I think, not just where we are but how1261did we get here and why aren't we moving forward? And I would1262submit that the firing of the Inspector General is not the way1263we want to go in situations like this, and the absence on these1264matters by the Secretary of Defense is not the way we want to1265go. It is not to knock either of them. It just to say that, as1266someone said earlier, if you are sitting around waiting for the1267U.S. Congress to pretend to be the cavalry, you would be1268waiting all day long because there are too many intricacies1269that prevent this huge body from moving forward, unfortunately.1270And if you think you have got red tape at DoD and some of the1271other agencies, we invented it. We have it right here. And so,1272that is why it appears to the onlooker that we cannot seem to1273get anything done.1274    So, I would just submit for consideration another thought1275in all of this. The gentleman from Texas, Mr. Sessions, and I1276head up a committee where we have been dealing with this matter1277for several years now, and what we are finding are two things.1278Not only is there massive waste, but there is also massive1279fraud. And that is why, I think, in many instances, you do not1280see the movement that we would think would be coming1281internally.1282    $10.8 billion in documented fraud over the last several1283years--$10.8 billion. This is the Department of Defense. And1284before us, in the continuing resolution, an increase in 131285percent of the appropriations so that more fraud, in my1286opinion, can take place.1287    I have said repeatedly that there has got to be some1288direction from the top down on this. I mean, you are doing your1289job. We are trying to do our job. But time is ticking away and,1290you know, this fraud is absolutely massive. People are making1291all sorts of money, retiring on it, waving a flag like they are1292true-blue Americans, and at the same time their hands are in1293the cookie jar--$10.8 billion documented fraud.1294    So, when you do not have an Inspector General who can point1295that stuff out, you are in a situation where nobody knows that1296it is going on unless there is an investigative report that1297takes place. And I want to particularly thank the Government1298Accounting Office [sic]. I mean, I do not know what we would do1299if we did not have you providing the information and the1300suggestions that we need.1301    But we are in a bad, bad situation, when that kind of money1302can be ripped off, away from the American taxpayer, and we are1303not prosecuting anybody whatsoever. That is money that could be1304going toward food and nutrition programs. It could be money to1305offset these drastic cuts in Medicaid. It is money that could1306be shoring up a number of areas right now where we are short as1307a Nation. But when you do not see it, because it walks out the1308door, and it is $10.8 billion, God only knows what it is going1309to be in the next report. This is a massive, massive failing on1310the part of all of us.1311    So, I have appealed, and will do so again publicly, to1312Secretary Hegseth, at this moment, to please come before this1313or the entire Oversight Committee, and let us know what you are1314planning to do about this. We have issued that formal1315announcement. I am issuing it again today.1316    The Marine Corps is the only branch of the service that has1317gotten past these failed audits, and it is because the1318Commandant of the Marine Corps said, ``Look, this is how we are1319going to do it. Anybody that does not want to agree, you are1320getting off the ship now,'' and everybody else got in lockstep.1321It is not happening anywhere else. And I think it has got to1322come from the Secretary of Defense directly, to everybody under1323his line of command, so that the things you are proposing,1324which are good, commonsense things, actually get put into1325practice.1326    Mr. Chairman, I yield back.1327    Mr. Timmons. Thank you. I now recognize the gentleman from1328Arizona, Mr. Crane, for 5 minutes.1329    Mr. Crane. Thank you, Mr. Chairman, for holding this1330hearing today. Thank you for our panelists for coming to1331testify. I know this is a very important topic, reforming1332procurement to accelerate defense innovation. It is obviously1333important because we have a lot of threats around the world who1334are developing their weaponry very quickly, and the battlefield1335is ever-changing.1336    We also have a Defense Department that has a massive1337budget. We all know that. You know, we also have a Defense1338Department here that continues to fail audits.1339    But I want to start with you, Ms. Boatner. You previously1340served as the Deputy Assistant Secretary of the Army for1341Strategy and Acquisition Reform. Is that correct?1342    Ms. Boatner. Yes.1343    Mr. Crane. Acquisition reforms are important, but I am also1344concerned about the revolving door of senior military and1345procurement officers leaving the DoD and taking jobs at large1346defense contractors. With their influence they are able to1347leverage military relationships to negatively influence1348procurement.1349    One example of bad procurement practices is retired Rear1350Admiral James A. Murdoch and retired Captain Tony Parisi used1351their influence to fund the procurement of the Navy's infamous1352Littoral Combat Ship and the Defense Civilian Human Resource1353Management System software development program that was 6 years1354behind schedule and more than $280 million--that is 7801355percent--over budget until Secretary Pete Hegseth announced its1356termination.1357    The work of these former military officers on the LCS ship1358resulted in the procurement and continued deployment of flawed1359ships that cost the taxpayer billions of dollars and put1360crewmembers at risk. Undoubtedly, someone continued to champion1361the Defense Civilian Human Resource Management System, too.1362Otherwise, it would have ended a long time ago.1363    My question, how do we ensure that the hiring and work1364reforms for some of the acquisition officers, so U.S. taxpayers1365are not holding the bill for failed projects like the Littoral1366Combat Ship or the Defense Civilian Human Resource Management1367System software, ma'am?1368    Ms. Boatner. Absolutely. I think it is an important point.1369There are restrictions in place for folks leaving the1370Department and going elsewhere so that they cannot use, kind1371of, their information or relationships to push contracts in any1372given way. I think, to the best of my knowledge, myself and1373others comply with those restrictions. And specifically to1374contracts, if you have ever touched a specific contract or even1375that portfolio area, you are prevented from being involved in1376any of those discussions with that agency, for different1377periods of time moving forward.1378    Mr. Crane. What are those time periods, Ms. Boatner?1379    Ms. Boatner. Depending on the level of position that you1380held, they range from 2 years and can go higher. Different1381Presidents have set different specific year-long restrictions,1382cooling-off periods, based on their administrations.1383    Mr. Crane. Do you think those time periods should be1384increased?1385    Ms. Boatner. I think that is probably not a call that I1386should make but should leave it to Congress to determine, and1387the executive branch.1388    Mr. Crane. If that is the case, how did this example that I1389just read with the Littoral Combat Ship happen, in your1390estimation, ma'am?1391    Ms. Boatner. Again, I do not know the specific details of1392that. Potentially, perhaps, the right restrictions were not in1393place. But I am really not familiar with that particular1394situation.1395    Mr. Crane. Ms. Oakley, would you like to take a stab at1396that?1397    Ms. Oakley. I am also not familiar how that particular1398example happened. But the approaches that we are talking about1399today, to advocate for change within the Department, could play1400a role in limiting the ability for something like that to1401happen. So, in these new approaches you are not locking in1402these long-term contracts on these big, mammoth acquisition1403programs that then you are stuck with one vendor in perpetuity.1404These new approaches would enable shorter-term contracts that1405focus on an initial capability, and then be able to open up the1406aperture for competition through things like modular open1407systems, et cetera, that would enable other companies to get1408involved.1409    So, I am kind of tangentially answering your question, but1410what we are talking about today would help to prevent the1411situations like you are talking about.1412    Mr. Crane. Thank you. I would also like to submit for the1413record an article from the Quincy Institute for Responsible1414Statecraft. It is called, ``March of the Four-Stars: The Role1415of Retired Generals and Admirals in the Arms Industry.''1416    Mr. Timmons. Without objection, so ordered.1417    Mr. Crane. And I would like to read a quick section.1418    ``In another prominent case, General James Mattis went to1419bat for the blood testing firm, Theranos, while he was serving1420as Commander of the U.S. Central Command, then joined the1421company's board upon leaving government service. Mattis pressed1422the Army to buy and utilize Theranos equipment, as he1423acknowledge in an email to Theranos CEO Elizabeth Holmes1424uncovered by The Washington Post.''1425    It basically goes on to say that Theranos was later1426charged, two of their executives were charged. The Securities1427and Exchange Commission, described Theranos as an ``elaborate,1428years-long fraud'' in which Holmes ``exaggerated or made false1429statements about the company's technology, business, and1430financial performance.''1431    And on that, I yield back.1432    Mr. Timmons. Thank you. And I recognize the gentleman from1433California, Mr. Garcia, for 5 minutes.1434    Mr. Garcia. Thank you, Mr. Chairman. Thank you to all of1435our witnesses for being here, as well. And I also definitely1436want to agree with a lot that was said by both sides of the1437Committee today. I thank you again for your time.1438    I just want to start, of course, by saying that I think1439everyone here agrees that our military needs the absolute best1440equipment, the best materials. Those that serve our country1441also deserve, of course, the absolute best weapons, the best1442ships, the best planes, whatever we can provide, we all can1443agree. And we all have, of course, the responsibility to1444safeguard our national security.1445    At the same time, as has been said already, we know the1446Department of Defense still cannot pass an audit. I believe it1447is the only department in the government that consistently,1448every time there is an audit process, consistently essentially1449comes back and says, ``We are not able to do so,'' which I do1450not think anybody thinks is acceptable or a way to actually1451operate any type of organization.1452    Now, the F-35 fighter jet, for example, will cost us $21453trillion over its lifecycle, and we know that just that one jet1454alone is often delivered late, often cannot fly, and has had1455numerous, numerous issues over the years. And that is just one1456example of all the different types of aircraft, other types of1457equipment that we have seen, that have had massive delays,1458massive cost overruns, and where the technology often times is1459not working right.1460    We do know, of course, that taxpayer money is being wasted.1461I do not think can disagree with that statement, and I agree1462with the Ranking Member that if we really want to save money1463and actually be efficient in government we should be looking at1464trying to save this waste, particularly at the Department of1465Defense.1466    And I want to also note, I think it is interesting that we1467have had a lot of conversation in the broader Committee on1468Oversight, and I sit on the DOGE Subcommittee, about efficiency1469and about waste. Yet, we have yet to discuss the Department of1470Defense. And there is so much opportunity that I think both1471sides of the aisle have been interested in, in actually trying1472to cut some of this waste. And I think it has been a real1473missed opportunity on the behalf of this Administration and1474certainly on behalf of the DOGE Subcommittee.1475    So, I would encourage our colleagues that are working on1476DOGE, not just from the Committee but across the government, to1477focus on the enormous amount of opportunity and work there is1478to do in the Department of Defense.1479    Now I am concerned, like many, that one of the President's1480first moves was to fire the Inspector General over at DoD, who,1481of course, has official responsibilities for holding the1482Department accountable. And I continue to have very serious1483concern about Secretary Hegseth's ability to do the job. That1484is my personal opinion. But I think we do have opportunities to1485work on a bipartisan basis to improve our system.1486    We have seen the number of major defense contractors has1487shrunk, actually, from about 51 down to about 10. That is not a1488positive change. I think any time you actually lose competition1489it is harder for new people to enter the marketplace. It is1490harder for new ideas to enter and provide new models of1491functioning. It also, I believe, stifles innovation.1492    So, the idea that less and less and less contractors are1493now being used, particularly on major projects at the1494Department, I think should concern everyone on this Committee1495in a bipartisan way. This also, of course, just creates more1496opportunities for higher costs and failures.1497    We know there actually has been some progress when we look1498at space procurement. In 2019, the Department set up a Space1499Development Agency, which has been an important partner for the1500private sector. I will note that back in my hometown of Long1501Beach, we have one of the largest concentrations of space and1502aerospace development in the country. As mayor, we helped1503develop the Space Beach Program. It is a major part of our1504economy in Southern California.1505    My team, though, as heard directly from space companies1506that we may be losing some of our recent wins. There have been1507reports suggesting that some of the Space Development Agency's1508programs, called the Tranche 2 and Tranche 3 Transport Layers1509Program could be terminated or consolidated. These programs,1510within the space community, are incredibly important.1511Cancelling them, in their opinion, could threaten national1512security.1513    Mr. Schwartz, just briefly, could you just talk about the1514importance of the Space Development Agency to the growing space1515industrial base and how that maintains competitiveness and1516national security?1517    Mr. Schwartz. Absolutely, and I believe this1518Administration, and the last administration, have both focused1519on space. Space is a new frontier as it were, not just for the1520Department of Defense but, frankly, all of national security,1521independent of the agency.1522    After we went to the moon, and after a while we did cut1523back on some space investments, and that came back to haunt us,1524and cutting key development efforts in space will take a long1525time to recover.1526    As Ms. Boatner was saying--and this is particularly1527important not just for the Department of Defense but for1528industry--consistency and understanding what the rules of the1529game are, are important. And it is important to make those1530investments and keep those investments, because it is a lot1531cheaper to do things consistently than cut programs and have to1532recreate everything and get that entire team back and start1533from scratch.1534    Mr. Garcia. Thank you very much. I yield back.1535    Mr. Timmons. Thank you. I now recognize the gentleman from1536Virginia, Mr. McGuire, 5 minutes.1537    Mr. McGuire. Thank you, Mr. Chairman, and thank you for our1538witnesses for being here today.1539    The strength of our defense industrial base is critical to1540maintaining our national security and military readiness. But1541we face real challenges with our supply chain and a burdensome1542acquisition process. These challenges threaten our ability to1543equip the warfighter. We do need more competition, and we need1544something, a phrase from the movie Top Gun, we have a ``need1545for speed.'' We have atrophied in just about every way1546possible, and God forbid we need to go to war, we want to make1547sure our men and women have a chance that they can win the1548fight and come home alive.1549    One of the key challenges is with additive manufacturing.1550The DoD has a slow and complex qualification process, which1551makes it difficult to rapidly adapt innovative technologies.1552    Ms. Boatner, why is it so hard for the Department of1553Defense to qualify parts produced through additive1554manufacturing, and can you give an assessment of DoD's current1555attitude toward additive manufacturing?1556    Ms. Boatner. I think the Department's current attitude is1557actually one in which they want to embrace it and want to adapt1558it. You are right, though. They are getting mired in the1559process to certify and qualify parts, I think taking upwards of1560months to years to certify and qualify any one additively1561manufactured part. And the concern there is risk aversion,1562frankly. I think when we are not talking about flight safety or1563safety-critical parts, perhaps some additional risk can be1564taken on the certification and qualification process for select1565parts.1566    Again, it is all balancing, to your point, the need for1567speed, with the appropriate need to balance, and it is always1568trying to find what that balance is between speed and risk1569management. But there is absolutely opportunity to do that1570here.1571    Mr. McGuire. So, Ukraine has a goal of 4.5 million drones1572in 1 year, this year, and we have a goal of about 10,000. You1573can see where if our enemies have that ability to capacity and1574speed, it is going to be a problem.1575    Ms. Boatner, also, how often do your member companies lose1576promising suppliers due to time and complexity of a traditional1577DoD procurement?1578    Ms. Boatner. All the time. That is one of the No. 11579problems that they raise when they talk to us is, is suppliers,1580up and down the supply chain, will walk away, particularly1581commercial suppliers. So, when you are talking about drones,1582when we try to force government-unique requirements down the1583supply chain and we do not allow them to use some of the1584streamlined commercial processes that have been made available1585by Congress, they will walk away because they have other1586marketplaces.1587    Mr. McGuire. There was a Navy amphibious ship due to deploy1588in San Diego, I believe January 7, but they had a hinge that1589broke, that moved a big door. And so, the manufacturer said,1590``We might be able to give you that door in 18 months.'' So, in1591my district, we have an ATDM. They scanned it, and over1592Christmas and New Year's they produced a part. These guys can1593do 3D printing with titanium and steel, et cetera. And they1594installed the part on January 6, and the ship departed on time,1595January 7.1596    Ms. Boatner, how can we better integrate small and mid-1597sized innovators into the defense industrial base without1598burying them under regulatory compliance demands?1599    Ms. Boatner. That is the answer. I think you have to look1600at the regulatory regime that is in place today. Every1601regulation was put in place to protect against a bigger risk,1602but it now creates an even larger risk, which is that we are1603losing suppliers, we are losing small businesses, those that1604have a lot of innovation. And I think taking a whack at the1605regulatory regime will go a long way, because it is exactly our1606mid-sized companies and our small businesses that do not have1607the resources to comply with what the government requires in1608those regulations.1609    Mr. McGuire. Mr. Snelgrove, what are you hearing from1610industry leaders regarding what they see as their biggest1611roadblock in the procurement process?1612    Mr. Snelgrove. Congressman, I would highlight one major1613issue which we see from small businesses, universities, and1614even major defense contractors, and that is access to1615classified facilities and networks. Across the country there is1616a major lack of these facilities, specifically in the areas1617where we need them most.1618    For decades, constructing your own SCIF as a company has1619been a cost-prohibitive endeavor, costing multimillion dollars1620and multi-years, many of which, you know, small businesses and1621startups cannot afford to take on, which prevents them from1622actually competing for classified contracts.1623    Fortunately, Members of Congress have recognized this is an1624issue, and just over the last few years have passed legislation1625to start to scale this kind of shared classified facility1626model, almost like a WeWork for SCIFs, to allow access and1627expand access across the Nation for startups, large companies,1628and universities.1629    Mr. McGuire. Just real quick for Ms. Oakley, how do we1630strike the right balance between oversight and speed,1631especially when rapid innovation is the goal?1632    Ms. Oakley. Absolutely. I think that is a key challenge,1633and I actually think it is one that Congress plays a critical1634role in helping with. When you think about the need for1635oversight, it is significant based upon managing the risks to1636the government. So, when you are taking on an F-35, for1637example, or an LCS, as was mentioned before, that is a giant1638program and a huge commitment, and so the risk to the1639government is huge. So, rightly, as Ms. Boatner mentioned, a1640lot of these restrictions and requirements were put in place1641because of the magnitude of the risk.1642    But when you are taking a different approach and focusing1643on getting out capability quickly, in shorter timeframes, the1644magnitude of that risk is much less, and so it requires a new1645look at oversight, and the types of things that will be1646required in that environment are going to be different than in1647an environment that we have traditionally seen.1648    Mr. McGuire. Thank you. I yield back.1649    Mr. Timmons. Thank you, and again, if anyone wishes to ask1650a second round of questions we are going to start that now, and1651I recognize myself for 5 minutes.1652    I am still a captain in the Air Force. I am the Area1653Defense Counsel for the South Carolina National Guard. And1654continuing resolutions have really caused me an enormous amount1655of problems in my service in the military. I cannot fathom what1656it is like, the entire enterprise-wise.1657    How bad are continuing resolutions for the procurement1658process? Ms. Boatner?1659    Ms. Boatner. Sure. Continuing resolutions, they cap funding1660at the prior level, the prior year's level of spending. So,1661what that does is it forces programs to make tough decisions,1662reducing procurement quantities, for example, meaning your per-1663unit cost increases, so you are driving up costs. You also1664cannot award any new contracts or task orders for as long as1665the CR is in place. There are program managers that will1666actually plan to not award any contracts in the first or second1667quarter of a year and wait until the third and fourth quarter,1668knowing that there will be a continuing resolution, and that1669pushes program timelines to the right. And that really has a1670very negative impact on the supply chain, given the uncertainty1671of that environment, and particularly for small businesses who1672do not have the cash-flow to kind of hang on over that long1673time horizon that a CR----1674    Mr. Timmons. All these challenges that we are talking1675about, if you could fix one problem would it be no more CRs?1676    Ms. Boatner. Oh, absolutely. Budget stability, consistent1677demand signals, that would make a huge difference for the1678defense industrial base and really for the procurement system.1679    Mr. Timmons. I think that is something that we can work on.1680It should not be a hard task to fund the government.1681    I want to talk about technology. You know, if you look at1682health care and the challenges that we face with rural health,1683telehealth is something that has really solved a lot of1684problems. I mean, we have increased connectivity. Everybody has1685got a phone that has a camera on it. That is still kind of1686emerging, but it is mostly developed. And that has been a huge1687help in delivering health care to tens of millions of1688Americans.1689    You know, how do we use technology to address this1690challenge? What can we do to harness all these emerging1691technologies to streamline these processes? Mr. Schwartz, any1692thoughts?1693    Mr. Schwartz. How much time do you have? Sorry.1694    There is a lot, and I am just going to start a little bit.1695Digitized acquisition. We do not have IT systems to do1696acquisition. We do not have IT warehouses of all the IT that1697DoD owns to know what they own already, how much are they1698paying somewhere else, what rights do they need. We do not have1699a good centralized system that we can share on what commercial1700items, what determinations we have made in the past. These can1701be solved with IT.1702    Mr. Timmons. I hate to say it. I do not know the answer to1703this question. Mr. Schwartz, does every branch of the military1704have their own procurement system, or does it go through one1705clearinghouse?1706    Mr. Schwartz. So----1707    Mr. Timmons. Do the Marines have one? Does the Navy one?1708Does the Air Force?1709    Mr. Schwartz. There is a Defense Federal Acquisition1710Regulation System, and it ultimately rolls up to the Secretary1711of Defense. However, each department has their own Air Force1712Regulation System, Army Regulation System, Navy, for tweaks.1713    Mr. Timmons. It is why we have multiple variants of the F-171435.1715    Mr. Schwartz. It is one reason. Well, that is more a1716requirement decision. But yes, no one was making the call, and1717they also have different individuals in charge, so each1718department, and sometimes service, has a service acquisition1719executive who is different. So, there is a service acquisition1720executive for the Army, the Navy, the Air Force, Space Force.1721There is a head of procurement for SOCOM, for example. So,1722there is a lot of disparity.1723    Mr. Timmons. Mr. Snelgrove, I feel like authoritarian1724governments have a big advantage when it comes to this issue,1725because they do not have any of the restraints that Western1726democracies have. Are any Western democracies doing this1727better? Are any countries that share our system of government1728doing this better than we are?1729    Mr. Snelgrove. Chairman, no, they are not. The U.S. is1730still the leader in innovation across the globe, despite all of1731the headwinds that we have described.1732    Mr. Timmons. I think Israel would probably be pretty good1733at stuff like this. Are they ahead of us, or are they still1734following our lead?1735    Mr. Snelgrove. I think there are a lot of lessons that we1736have learned from Israel, specifically over the last, you know,173712 to 18 months. However, a lot of the technology that Israel1738is deploying is still invented here in the United States and1739shared through various DoD programs, counter-tunneling1740programs, Iron Dome programs. There is a whole host of1741examples.1742    Mr. Timmons. And I assume we all agree that China's command1743economy and ability to dictate everything in a real-time manner1744is a disadvantage for us, relatively speaking. Is that fair?1745OK. We need to get better at this.1746    Thank you. I yield back. I now recognize the Ranking1747Member, Mr. Subramanyam, for 5 minutes.1748    Mr. Subramanyam. Thank you, Mr. Chair. I wanted to ask Ms.1749Oakley about the iterative development approach a little bit1750more. Let me give you an example, to see if I am right. Some1751new cars now--I have an old car and a new car. My old car has1752an audio system in there that was built when the car was built.1753There is no way of updating it in any sort of way. It is what1754it is, and obviously, 12 years later, it is very outdated. If I1755want a new audio system I might as well buy a new car, at that1756point.1757    But the new car I have, or newish car I have, you can1758update the audio system and update the offerings the audio1759system has. Is that what you would say is an iterative1760development approach?1761    Ms. Oakley. That is one aspect of it. Obviously, allowing1762over-the-air updates for software is one capability that can be1763added to an existing capability, to get something out quickly.1764So, you field something with the knowledge that you are still1765working on the software to update a critical capability. So,1766that is one step of it.1767    But then a next step is being able to change out the1768engine, being able to change other key parts of that system in1769an easy way because you have structured the program to be able1770to be modified in the long run. So, you are going at an1771acquisition with the intention of we are going to put out this1772car, and these are the capabilities it is going to provide. In1773the interim, while we are working on the next iteration of it1774we are going to give it software updates while design, test,1775and evaluate the next iteration, and collect feedback from the1776first iteration to then change the design and put out a new1777vehicle, a new model going forward. And that is exactly the1778type of iterative approach that we think DoD should follow, to1779ensure that we are meeting warfighter needs.1780    Mr. Subramanyam. I will give you a more tangible example.1781We have a lot of assets in space now, and we have a Space1782Force, and we are very involved in defense in space. Some of1783those assets are very valuable satellites in low-Earth orbit. I1784have a company in my district that has the ability to basically1785maintain those satellites, and they have come up with new,1786innovative ways to do that. So, instead of having to buy and1787launch a new satellite, we can just keep the satellites we have1788up there running because they are perfectly fine otherwise.1789Sometimes they just simply run out of fuel, so we just need to1790refuel them.1791    The problem they have encountered is institutional barriers1792at DoD, to adopt these kinds of services. So, what could we do1793to help put in place these iterative development approaches1794that you have suggested?1795    Ms. Oakley. Yes, DoD needs to change its acquisition1796process, and this starts with budgeting and requirements. The1797way the current requirements are developed is that the unity is1798very specific, exquisite requirements are developed right from1799the very beginning, before you realize the art of the possible,1800in some cases. And also, doing that ignores the fact that you1801might be able to continue upgrading and modifying systems as1802you go forward.1803    So, what our work would look at is could DoD put in place a1804requirement system that starts with high-level needs, focuses1805on what those critical needs are, and then does the design,1806testing, and evaluation, using digital tools, to be able to1807understand where they are going to be able to get in a1808reasonable timeframe, and then structures the program to be1809able to leverage just what you are saying, the ability to1810upgrade and modernize systems as you are going forward. And1811that needs to be baked in from the very beginning.1812    Mr. Subramanyam. The other thing that I have seen from, I1813think, almost everyone's testimony here today, and even the1814comments of the other Members, is that we have to have good1815talent at the DoD. And I guess I would ask, really anyone, some1816of the people who have resigned, I think there have been1817thousands now at the DoD who were either probationary or fired,1818they were either probationary or they were people who were1819technologists and they left for greener pastures.1820    So, how do we attract better talent to the DoD when right1821now there is this issue with the Federal Government and cuts to1822the Federal Government? Anyone?1823    Mr. Schwartz. I will jump in. So, how to attract talent. I1824think there are a number of ways. There was a while where I was1825going to a lot of people and asking them, ``Why did you leave1826government, and would you go back into government, and how1827important is pay?'' And invariably, pay was not the issue. The1828issue that a lot of these people who are former government1829employees would say, it was two. One, ``I didn't feel like I1830could get anything done,'' and two was, ``I was being too1831micromanaged. I was not asked to do anything. I was told this1832is what you do, this is the policy you follow, and this is how1833you do it.'' It was those two things.1834    I said, ``Would you go back into government?'' I am like,1835give me an offer. But, ``Can I get anything done?'' And that1836was really what motivated a lot of people to leave, and I1837think, having been a former government worker myself, motivates1838a lot of people to want to work for government. And if we can1839fix those things, I think we will get the best and the1840brightest.1841    Mr. Subramanyam. I yield back. Thank you.1842    Mr. Timmons. Thank you. I now recognize the gentleman from1843Arizona, Mr. Crane, for 5 minutes.1844    Mr. Crane. Thank you, Mr. Chairman. I want to start this1845line of questioning off with just a little of my background. I1846was in the military myself, a former servicemember, and I still1847have a lot of friends in the military that are running around1848some of the worst parts of the world. I want them to have the1849best gear possible. I want our military to be strong. But I do1850struggle with the Defense Department and their complete lack of1851ability to pass an audit or be financially responsible in any1852way.1853    Ms. Oakley, you come from GAO. Is that correct?1854    Ms. Oakley. Yes, sir.1855    Mr. Crane. What does that stand for, ma'am?1856    Ms. Oakley. Government Accountability Office.1857    Mr. Crane. And you are tasked often with looking over data,1858verifying information, and then bringing your findings to1859Congress so that we can try and present some legislative1860solutions. Is that correct?1861    Ms. Oakley. Correct.1862    Mr. Crane. OK. Did your organization submit a report to1863Congress that said that the Pentagon will not be able to pass1864an audit until 2028?1865    Ms. Oakley. Yes.1866    Mr. Crane. Why is that? Why is it going to take--I mean,1867why is it going to take another 4 years for the DoD to pass an1868audit?1869    Ms. Oakley. I am not familiar with the intimate findings of1870that report, but I know that we have reported a number of times1871that DoD does not have the controls and processes in place to1872be able to pass the audit. And I am assuming that those1873findings are focused on what DoD's action plan is for passing1874that financial audit, given that DoD financial management is on1875our High Risk List. So, I would assume that those findings are1876based upon what we have seen in that action plan.1877    Mr. Crane. Do you know when the last time that DoD passed1878an audit was?1879    Why are you laughing, Mr. Schwartz?1880    Mr. Schwartz. They have not. As a department, they have1881not.1882    Mr. Crane. Since they were required to in 1990, they have1883never passed one. Is that correct?1884    Mr. Schwartz. Correct.1885    Mr. Crane. So, it is just interesting that we sit here and1886talk about this, because this is a bipartisan problem. This is1887not Republicans or Democrats. This is Republicans and1888Democrats.1889    Let me pose it this way. Why would the DoD pass an audit,1890or even try and pass an audit, if we continue to fund them at1891the same levels or increased levels, over and over again?1892    Ms. Oakley. I think that is a very good question. What is1893the incentive if there is no consequence of not passing an1894audit.1895    Mr. Crane. Absolutely. That is the only language that1896people and organizations up here in D.C. understand, which is1897why I opened with what I told you about my background and my1898concern, but yet several times I voted against the NDAA and1899other authorization and appropriations for the Department of1900Defense, because of my concern not only for our national debt1901and the deficits that we are running, but because of the1902Department of Defense's unwillingness to be fiscally1903responsible or accountable to the American people whatsoever.1904    As a matter of fact, a couple of months ago I went over to1905the Pentagon, and I was talking to Secretary Hegseth with other1906conservatives, and this was one of the things I brought up. I1907said, ``Hey, sir, I understand you guys have been tasked with a1908lot of important things. I am a supporter of yours. I am a1909supporter of a strong military. I have seen a lot of reporting1910from DOGE and some of the other agencies that they have taken a1911look at. When are we going to see some fraud, waste, and abuse1912reporting at the Department of Defense?''1913    He did tell me that those guys are right down the hallway,1914and if you would like to go talk to them you are more than1915welcome to, and you will be seeing something come out of there.1916    I just want it to be said that it is a concern, even for1917many Republicans, that, hey, the Department of Defense needs to1918get its fiscal house in order. And I am glad that one of my1919colleagues pointed out that the Marine Corps is actually doing1920this. I think it is great, and I am not surprised that it is1921the Marine Corps that is leading by example, but I hope to see1922the other branches and leadership at the Pentagon and the1923Department of Defense start to get its fiscal house in order.1924    And I am a bit concerned about your report, ma'am, that1925says it is going to take another 4 years for us to get a clean1926audit at the Department of Defense. And I was not exactly sure1927that your answer covered the reason for your organization1928stating that.1929    Ms. Oakley. I can take that for the record and get back to1930you.1931    Mr. Crane. Does anybody else have anything to add on that,1932why it is going to take another 4 years?1933    Mr. Schwartz. I will add one of the challenges is the IT1934systems, and then they were bought and put in place they were1935not done in a way that thought about audit to begin with.1936    Mr. Crane. OK. Thank you. I yield back, Mr. Chairman.1937    Mr. Timmons. Thank you. In closing, I want to thank our1938witnesses once again for their testimony today. I now yield to1939Ranking Member Subramanyam for his closing remarks.1940    Mr. Subramanyam. Thank you, Mr. Chairman, and thank you to1941the witnesses today. We had a great hearing. This is my first1942DoD procurement hearing, and I hope it is not the last. But it1943sounds like we have had some before. But I hope that this time1944we actually make some of the changes that are being recommended1945today. I read through all of your testimony, heard some of it,1946heard some of your answers. A lot of great ideas. A lot of1947smart people in the room today. So, let us actually do some of1948it.1949    One of my concerns is that we are hearing the right things1950from both sides of the aisle, but we are not getting action.1951So, I go back to the personnel example. We had a lot of great1952technologists that have either been pushed out or just left or1953even got fired, who could really help us with IT procurement.1954And we have a lot of procurement people who are leaving because1955they simply are fed up with being there or because they do not1956want to work in this environment.1957    So, we are going the wrong direction in personnel. I am not1958sure we are going the right direction in several other places.1959Someone mentioned in their testimony something about Federal1960labs. We are firing a lot of scientists in our government.1961Someone mentioned in their testimony about budget uncertainty.1962We just did another CR. I am already nervous for the next CR.1963And someone even mentioned in their testimony something about1964manufacturing and industrial resilience. Well, I actually1965talked to a company that manufactures products for the DoD, and1966they are concerned about tariffs and the fact that the 201967percent increase in making everything will be passed on to the1968DoD and passed on to the taxpayers.1969    So, we are going the wrong direction so far, early in this1970Administration. While the talk has been good, what is happening1971and what has actually been the action has not worked out, and1972been in line with that talk.1973    And I really appreciate some of the comments from both1974sides of the aisle. But the one ugly bill, Beautiful Bill,1975whatever you want to call it, that we just passed, increases1976defense spending and makes no mention of trying to audit the1977DoD or reform procurement or do anything of the sort to try to1978get things under control when it comes to how dollars are spent1979over there.1980    I am not seeing a lot of actual change. I am just seeing a1981lot of talk so far.1982    So, I do hope that this can be bipartisan and that we can1983actually work together on real changes. The best way to change1984something is to actually start doing it, so I hope we can do1985that.1986    I will end with a couple of stories from my district. One1987company that said that the DoD will often ask them to make a1988product. Sometimes that product has not even been invented.1989They actually have to create a product that does not exist on1990the market or anywhere else. And they have to put their own R&D1991dollars into this. So, going from CR to CR, getting mixed1992messages about what they should be producing and how they1993should produce it, is tiring and it is costly. So, they have1994decided to start opening a commercial business, and they goal1995is to get out of the defense business altogether.1996    And we have seen that over and over again. And as others1997have mentioned, less companies are working with the DoD because1998why would you? They are a terrible customer right now.1999    I have another story about a small business who is doing2000the same thing, only they do not have the cash reserves like2001the bigger companies. So, they do not have a choice but to get2002way from trying to sell to the DoD, even though they have great2003products, and others have mentioned that, as well.2004    Finally, I talked to someone who left the DoD. They did not2005take the deferred resignation but they were going to leave2006anyway. But they were fed up, as Mr. Schwartz mentioned, about2007the environment at the DoD, about all the rules they have to2008follow, about all the contracting officers they have to work2009with, about the mixed messages they get, and how they will have2010a mission-critical product they are working on with a2011contractor and then that project will go out the window 62012months later.2013    So, it is very difficult right now, and we have to see2014actual changes. I look forward to making those changes. But we2015need to actually act instead of just talk.2016    Thank you again, and I yield back.2017    Mr. Timmons. Thank you for that. I now recognize myself for2018closing remarks.2019    My friend from Arizona said that Congress was irredeemable.2020I do not believe that to be the case, and I do not believe that2021this hearing would reflect that. I think that we had good,2022productive conversations. I think that we are all interested in2023streamlining the procurement process and saving taxpayer2024dollars, and then delivering the best possible weapons to our2025warfighters. Peace through strength is not just a saying. It is2026what we have to do in order to continue to be prosperous and2027continue to have the impact that we have had on the world for2028250 years.2029    As we seek out waste, fraud, and abuse to try to streamline2030our costs governmentwide, the Pentagon can be no exception.2031And, if anything, it is probably the spot that we can find the2032most cost savings and deliver the best results.2033    I think one of the things that I have taken away from2034this--I mean, I kind of knew this, that CRs are just really bad2035for the government, in general, and they are really bad for the2036military. But they are also really bad for procurement. So, we2037have to do our job, and we have to fund the government, and we2038have to create predictability for the defense industrial base2039to continue to provide the best possible products to our2040military. And our national security depends on it.2041    And I am afraid that we are to the point where the2042procurement process, the development of new technologies is2043becoming an emerging national security threat. And as we see2044what countries that are faced with live-or-die scenarios are2045able to accomplish in a short period of time, it makes me even2046more concerned. But I do think that maybe we can learn from2047countries that we have given tens of billions of dollars to,2048and maybe take some of the lessons that they have learned from2049the wars that they are engaging in.2050    I really appreciate all of you being here today, and I2051appreciate my colleagues across the aisle for a productive2052hearing. And we will definitely be following up with additional2053questions and try to see what we can do legislatively to solve2054some of these challenges we face.2055    With that, and without objection, all Members have 52056legislative days within which to submit materials and2057additional written questions for the witnesses, which will be2058forwarded to the witnesses. If there is no further business,2059without objection, the Subcommittee stands adjourned. Thank you2060all.2061    [Whereupon, at 11:45 a.m., the Subcommittee was adjourned.]