1 00:00:00,240 --> 00:00:02,240 this hearing of the Subcommittee on 2 00:00:02,240 --> 00:00:04,460 Readiness in Management will come to 3 00:00:04,460 --> 00:00:07,590 order . Subcommittee meets today to 4 00:00:07,590 --> 00:00:10,280 receive testimony from Under Secretary 5 00:00:10,280 --> 00:00:13,160 Defense for Acquisition and sustainment . 6 00:00:13,170 --> 00:00:16,950 Ellen Lord , concerning supply chain 7 00:00:16,960 --> 00:00:19,940 integrity for the Department of Defense 8 00:00:19,950 --> 00:00:23,070 in the United States since her initial 9 00:00:23,070 --> 00:00:25,070 confirmation is the under secretary 10 00:00:25,070 --> 00:00:28,380 defense . Mhm Secretary Lord has 11 00:00:28,380 --> 00:00:30,660 overseen significant acquisition reform 12 00:00:30,660 --> 00:00:32,827 at the Department of Defense , and I'm 13 00:00:32,827 --> 00:00:34,771 sure we'll talk about some of that 14 00:00:34,771 --> 00:00:37,090 today as theme US National Armaments 15 00:00:37,090 --> 00:00:39,520 director . She's traveled to see the U 16 00:00:39,520 --> 00:00:41,850 S . Throughout the U . S . And to see 17 00:00:41,850 --> 00:00:44,300 our allies and partners with regard to 18 00:00:44,300 --> 00:00:46,280 the development and manufacturing 19 00:00:46,280 --> 00:00:49,490 activities around the world and 20 00:00:49,500 --> 00:00:53,220 unfortunately , has seen firsthand 21 00:00:53,230 --> 00:00:55,550 just how reliant the U . S . Defense 22 00:00:55,550 --> 00:00:58,720 industrial base chain has become , 23 00:00:58,730 --> 00:01:01,060 particularly as it relates to China . 24 00:01:01,640 --> 00:01:03,807 With the rise of China and great power 25 00:01:03,807 --> 00:01:06,180 competition and the global covert 19 26 00:01:06,180 --> 00:01:08,990 pandemic . The vulnerabilities and gaps 27 00:01:09,000 --> 00:01:11,167 in our supply chains , particularly as 28 00:01:11,167 --> 00:01:13,350 it relates to national security , have 29 00:01:13,350 --> 00:01:15,720 taken on a new urgency . I want to 30 00:01:15,720 --> 00:01:17,820 thank ranking member cane for his 31 00:01:17,820 --> 00:01:21,160 interest in this topic as well . Both 32 00:01:21,160 --> 00:01:23,049 of us recognize how important the 33 00:01:23,049 --> 00:01:24,938 defense industrial base is to our 34 00:01:24,938 --> 00:01:27,130 nation's security and our nation's 35 00:01:27,130 --> 00:01:29,670 economy , and we are pleased to have 36 00:01:29,670 --> 00:01:31,890 this timely hearing . Secretary Lord 37 00:01:31,890 --> 00:01:34,112 has been a prominent voice and sounding 38 00:01:34,112 --> 00:01:36,334 the alarm on this important issue , and 39 00:01:36,334 --> 00:01:38,390 I would like to personally thank her 40 00:01:38,390 --> 00:01:41,680 for being here today . In July of 2017 41 00:01:41,690 --> 00:01:43,940 the president issued an executive order 42 00:01:43,940 --> 00:01:46,162 on the U . S . Manufacturing in Defense 43 00:01:46,170 --> 00:01:49,680 Industrial base that focuses on 44 00:01:50,140 --> 00:01:52,470 resilient supply chains that are 45 00:01:52,470 --> 00:01:54,637 essential to the economic strength and 46 00:01:54,637 --> 00:01:57,130 national security of our nation , and 47 00:01:57,130 --> 00:01:59,710 also the importance of jobs as it 48 00:01:59,710 --> 00:02:02,140 relates to key components in 49 00:02:02,140 --> 00:02:03,890 manufacturing and the defense 50 00:02:03,890 --> 00:02:07,170 industrial base . The newly released 51 00:02:07,180 --> 00:02:09,402 National Security Strategy and National 52 00:02:09,402 --> 00:02:11,070 Defense Strategy of the Trump 53 00:02:11,070 --> 00:02:13,990 Administration , which I often cite as 54 00:02:13,990 --> 00:02:17,470 a area bipartisan support with the 55 00:02:17,540 --> 00:02:19,690 reorientation to great power 56 00:02:19,690 --> 00:02:21,690 competition . I believe most of the 57 00:02:21,690 --> 00:02:23,912 members of the Armed Services Committee 58 00:02:23,912 --> 00:02:26,023 recognized that that was an important 59 00:02:26,590 --> 00:02:29,370 and much needed change to our broader 60 00:02:29,940 --> 00:02:31,718 national security and strategic 61 00:02:31,718 --> 00:02:33,680 interests . That national security 62 00:02:33,680 --> 00:02:37,230 Strategy document from the 63 00:02:37,230 --> 00:02:39,452 Department of Defense notes quote Every 64 00:02:39,452 --> 00:02:42,290 year , competitors such as China Steel , 65 00:02:42,290 --> 00:02:45,070 US and intellectual property valued at 66 00:02:45,070 --> 00:02:48,270 hundreds of billions of dollars . 67 00:02:49,040 --> 00:02:50,840 Members of this committee will 68 00:02:50,840 --> 00:02:52,451 certainly agree that so much 69 00:02:52,451 --> 00:02:54,507 technological change has happened in 70 00:02:54,507 --> 00:02:56,570 this digital age . Highly technical 71 00:02:56,570 --> 00:02:58,570 weapons systems as well as consumer 72 00:02:58,570 --> 00:03:00,514 electron ICS like laptops and cell 73 00:03:00,514 --> 00:03:03,290 phones , increasingly have a role in 74 00:03:03,290 --> 00:03:06,750 war fighting and are increasingly 75 00:03:06,750 --> 00:03:10,240 reliant on Chinese supply chains . One 76 00:03:10,240 --> 00:03:12,407 area of supply chain integrity that is 77 00:03:12,407 --> 00:03:14,462 particularly important to me . And I 78 00:03:14,462 --> 00:03:16,518 think the rest of the country is our 79 00:03:16,518 --> 00:03:18,960 supply of strategic critical minerals 80 00:03:19,020 --> 00:03:21,530 and metals that go into many of our 81 00:03:21,530 --> 00:03:24,390 modern day electron ICS and our modern 82 00:03:24,390 --> 00:03:27,020 day weapons in this year's Senate 83 00:03:27,020 --> 00:03:29,660 passed N d A . I'd like to highlight 84 00:03:29,660 --> 00:03:31,850 sections eight or nine in a row 10 85 00:03:32,240 --> 00:03:34,129 which work together to ensure the 86 00:03:34,129 --> 00:03:37,140 defense industrial base have secure 87 00:03:37,150 --> 00:03:39,740 sources of strategic and critical 88 00:03:39,740 --> 00:03:43,500 minerals by the year 2030 . I 89 00:03:43,500 --> 00:03:46,200 appreciate the bipartisan support for 90 00:03:46,200 --> 00:03:48,170 this goal , and I also appreciate 91 00:03:48,180 --> 00:03:50,940 Secretary Lourdes worked with me and 92 00:03:50,950 --> 00:03:53,610 others on the key issue is a matter of 93 00:03:53,610 --> 00:03:55,870 fact . Just last night , the president 94 00:03:55,880 --> 00:03:58,060 issued an executive order entitled 95 00:03:58,070 --> 00:04:00,660 Addressing the threat to the domestic 96 00:04:00,660 --> 00:04:03,070 supply chain for reliance on critical 97 00:04:03,070 --> 00:04:06,030 minerals from foreign adversaries , and 98 00:04:06,030 --> 00:04:08,460 I'd like to submit this for the record 99 00:04:08,460 --> 00:04:10,970 with my opening statement without 100 00:04:10,970 --> 00:04:14,170 objection . The key issue on this is 101 00:04:14,170 --> 00:04:17,660 that we know we're relying on China . 102 00:04:18,340 --> 00:04:20,700 In many cases , we , the United States 103 00:04:20,700 --> 00:04:22,533 of America , actually have these 104 00:04:22,533 --> 00:04:24,640 critical minerals , for example , in 105 00:04:24,640 --> 00:04:27,190 the great state of Alaska , and we 106 00:04:27,190 --> 00:04:30,580 actually mind them and process them in 107 00:04:30,580 --> 00:04:32,920 ways with much , much higher 108 00:04:32,930 --> 00:04:34,810 environmental standards than the 109 00:04:34,810 --> 00:04:37,670 Chinese . So if that's the case 110 00:04:38,840 --> 00:04:41,007 in mining and processing , create good 111 00:04:41,007 --> 00:04:44,440 jobs , why wouldn't we do it here as 112 00:04:44,440 --> 00:04:46,662 deposed over there ? And I think people 113 00:04:46,662 --> 00:04:48,884 are starting to recognize that in Madam 114 00:04:48,884 --> 00:04:52,310 Secretary , I look forward to , um , 115 00:04:52,320 --> 00:04:54,610 discussing this executive order in the 116 00:04:54,610 --> 00:04:56,610 broader topic of strategic critical 117 00:04:56,610 --> 00:05:00,450 minerals in our hearing today . So I'd 118 00:05:00,450 --> 00:05:02,672 like to conclude by just commanding the 119 00:05:02,672 --> 00:05:06,620 secretary with regard to addressing 120 00:05:06,620 --> 00:05:09,050 some of the significant defense 121 00:05:09,050 --> 00:05:10,800 industrial based challenges , 122 00:05:10,990 --> 00:05:14,260 particularly as our country in the 123 00:05:14,260 --> 00:05:17,160 world go through this pandemic . And I 124 00:05:17,160 --> 00:05:20,100 want to thank Senator Kaine for his 125 00:05:20,110 --> 00:05:22,540 interest in this topic . I believe this 126 00:05:22,540 --> 00:05:25,580 is an area of bipartisan interest , and 127 00:05:25,580 --> 00:05:27,413 we want to hear from you , Madam 128 00:05:27,413 --> 00:05:29,302 Secretary , on what you think the 129 00:05:29,302 --> 00:05:31,770 Congress could be doing in what you 130 00:05:31,770 --> 00:05:33,560 should be continuing to doing 131 00:05:33,570 --> 00:05:36,200 addressing this issue , which has been 132 00:05:36,200 --> 00:05:38,620 highlighted even Mawr , with the rise 133 00:05:38,620 --> 00:05:41,950 of China , our reliance and the Cove in 134 00:05:41,950 --> 00:05:45,940 19 pandemic So , without further 135 00:05:45,940 --> 00:05:48,107 comment , I'd like to turn the hearing 136 00:05:48,107 --> 00:05:50,550 over to Senator Kaine for his opening 137 00:05:50,550 --> 00:05:53,440 comments . Well , thank you , Mr Chair . 138 00:05:53,450 --> 00:05:55,561 And I'm glad to be here together with 139 00:05:55,561 --> 00:05:57,783 my colleagues , some in person and some 140 00:05:57,783 --> 00:05:59,839 virtually for this important hearing 141 00:05:59,839 --> 00:06:02,780 about red supply chain integrity . I 142 00:06:02,780 --> 00:06:05,002 welcome our distinguished witness , and 143 00:06:05,002 --> 00:06:07,058 I wanna thank Secretary Lord for her 144 00:06:07,058 --> 00:06:09,224 constructive conversation earlier this 145 00:06:09,224 --> 00:06:11,280 week working together to prepare for 146 00:06:11,280 --> 00:06:13,058 this hearing , but also to just 147 00:06:13,058 --> 00:06:15,169 generally discuss the many challenges 148 00:06:15,240 --> 00:06:17,184 that the D . O . D . Faces today . 149 00:06:17,330 --> 00:06:19,500 We're all aware of the roles that our 150 00:06:19,500 --> 00:06:21,390 defense industrial base plays in 151 00:06:21,390 --> 00:06:23,550 supporting national security and in 152 00:06:23,550 --> 00:06:25,550 strengthening , contributing to the 153 00:06:25,550 --> 00:06:27,661 economic strength of the nation . And 154 00:06:27,661 --> 00:06:29,772 many of the hearings of the readiness 155 00:06:29,772 --> 00:06:31,939 subcommittee , at least in whole or in 156 00:06:31,939 --> 00:06:34,106 part , deal with that topic . The help 157 00:06:34,106 --> 00:06:36,161 of our health of our industrial base 158 00:06:36,161 --> 00:06:38,161 and its ability to support national 159 00:06:38,161 --> 00:06:40,161 security needs is under many severe 160 00:06:40,161 --> 00:06:42,217 challenges under normal times , Um , 161 00:06:42,217 --> 00:06:44,550 but now the challenge is air escalating . 162 00:06:44,550 --> 00:06:46,606 So I hope today we can discuss those 163 00:06:46,606 --> 00:06:48,494 challenges , including the global 164 00:06:48,494 --> 00:06:50,600 economic downturn resulting from the 165 00:06:50,600 --> 00:06:53,330 Koven 19 pandemic , the way that that 166 00:06:53,340 --> 00:06:55,890 pandemic itself affects the operations 167 00:06:55,900 --> 00:06:59,470 of the of our supply chain . 168 00:06:59,840 --> 00:07:01,860 The loss of trusted suppliers and 169 00:07:01,860 --> 00:07:04,870 manufacturers in key technology areas 170 00:07:04,870 --> 00:07:06,870 referenced by the chair , including 171 00:07:06,870 --> 00:07:09,148 microelectronics , rare earth minerals , 172 00:07:09,148 --> 00:07:11,530 advanced materials , cybersecurity , 173 00:07:11,530 --> 00:07:13,920 threats to our companies that result in 174 00:07:13,920 --> 00:07:15,930 the loss of valuable intellectual 175 00:07:15,930 --> 00:07:18,790 property on national security secrets 176 00:07:18,790 --> 00:07:21,300 and finally , adversarial capital , 177 00:07:21,480 --> 00:07:23,647 sometimes sponsored by foreign nations 178 00:07:23,647 --> 00:07:26,620 that find their way into our supply 179 00:07:26,620 --> 00:07:28,453 chain seeking to gain control of 180 00:07:28,453 --> 00:07:30,342 emerging and innovative high tech 181 00:07:30,342 --> 00:07:34,030 businesses . E also want 182 00:07:34,030 --> 00:07:36,252 Secretary Lord Thio know that we're all 183 00:07:36,252 --> 00:07:38,252 concerned about an article that The 184 00:07:38,252 --> 00:07:40,308 Washington Post ran recently , which 185 00:07:40,308 --> 00:07:42,030 raised questions about how the 186 00:07:42,030 --> 00:07:44,030 Department of Defense is used funds 187 00:07:44,030 --> 00:07:46,086 provided to it under The Cares Act . 188 00:07:46,086 --> 00:07:48,141 And I actually think that there's an 189 00:07:48,141 --> 00:07:50,197 issue that's directly related to the 190 00:07:50,197 --> 00:07:52,530 topic of today's supply chain integrity . 191 00:07:52,530 --> 00:07:52,520 And I hope that the secretary may 192 00:07:52,530 --> 00:07:54,586 address some of the important issues 193 00:07:54,586 --> 00:07:56,697 raised in that article so that we can 194 00:07:56,697 --> 00:07:58,808 all not only on the committee but the 195 00:07:58,808 --> 00:08:00,863 American public have confidence that 196 00:08:00,863 --> 00:08:02,752 the department is being a careful 197 00:08:02,752 --> 00:08:04,974 steward of taxpayer dollars , including 198 00:08:04,974 --> 00:08:07,030 those provided in The Cares Act . We 199 00:08:07,030 --> 00:08:09,141 all want to help address the problems 200 00:08:09,141 --> 00:08:09,120 that we see will certainly discuss 201 00:08:09,120 --> 00:08:11,030 problems today , uh , in our 202 00:08:11,030 --> 00:08:13,252 manufacturing and industrial base . But 203 00:08:13,252 --> 00:08:15,197 hopefully this is also a hearing . 204 00:08:15,197 --> 00:08:17,363 That's more about solutions than it is 205 00:08:17,363 --> 00:08:19,086 about problems will assess the 206 00:08:19,086 --> 00:08:20,808 challenges , but also are most 207 00:08:20,808 --> 00:08:23,086 interested in hearing what the d o . D . 208 00:08:23,086 --> 00:08:25,308 Is doing to address them and how we can 209 00:08:25,308 --> 00:08:25,150 be helpful . So , Mr Chair , thanks for 210 00:08:25,150 --> 00:08:27,770 calling the hearing . And I thank our 211 00:08:27,770 --> 00:08:29,992 witness for their service and for being 212 00:08:29,992 --> 00:08:32,048 here today to testify . Okay . Thank 213 00:08:32,048 --> 00:08:34,710 you . Senator Kane and Madam Secretary . 214 00:08:34,710 --> 00:08:38,010 I'm gonna have you , uh , issue your 215 00:08:38,020 --> 00:08:40,187 opening statement . Please try to keep 216 00:08:40,187 --> 00:08:42,464 it toe . Five minutes . We will submit , 217 00:08:42,464 --> 00:08:44,353 for the record , a longer written 218 00:08:44,353 --> 00:08:46,298 statement . I'm gonna apologize in 219 00:08:46,298 --> 00:08:48,298 advance . I have a hearing . A very 220 00:08:48,298 --> 00:08:50,353 short hearing . I need to be at with 221 00:08:50,353 --> 00:08:52,576 another committee at 9 . 30 . So if you 222 00:08:52,576 --> 00:08:54,798 see me stepping out , you'll be in good 223 00:08:54,798 --> 00:08:56,853 hands with Senator Kaine . I will be 224 00:08:56,853 --> 00:08:59,076 back very , very quickly , but floor is 225 00:08:59,076 --> 00:09:01,409 yours . And thanks again for being here . 226 00:09:01,409 --> 00:09:04,090 Thank you . Chairman Sullivan , Ranking 227 00:09:04,090 --> 00:09:06,390 member cane and distinguished members 228 00:09:06,390 --> 00:09:08,620 of the Readiness and Management Support 229 00:09:08,620 --> 00:09:10,620 subcommittee . Thank you for the 230 00:09:10,620 --> 00:09:13,300 opportunity to testify today on the 231 00:09:13,300 --> 00:09:16,350 defense industrial base . The office of 232 00:09:16,350 --> 00:09:18,810 the Undersecretary for Acquisition and 233 00:09:18,810 --> 00:09:21,310 Sustainment has released the most 234 00:09:21,310 --> 00:09:23,490 substantial change to acquisition 235 00:09:23,490 --> 00:09:26,620 policy in the last several decades . 236 00:09:26,630 --> 00:09:29,180 Called the Adaptive Acquisition 237 00:09:29,190 --> 00:09:32,830 Framework , or a F , it improves the 238 00:09:32,830 --> 00:09:35,250 acquiring of war fighting capability 239 00:09:35,260 --> 00:09:38,170 and allows d o d to better partner with 240 00:09:38,180 --> 00:09:41,590 industry . The A F replaces the one 241 00:09:41,590 --> 00:09:44,940 size fits all approach used in the past , 242 00:09:44,950 --> 00:09:47,250 and it includes six practical 243 00:09:47,260 --> 00:09:50,260 acquisition pathways , each tailored to 244 00:09:50,260 --> 00:09:52,380 the unique characteristics off the 245 00:09:52,380 --> 00:09:55,630 capability being acquired . And in fact , 246 00:09:55,640 --> 00:09:58,030 we do have a tri fold . That is a good 247 00:09:58,030 --> 00:10:00,220 pictorial description of this , which 248 00:10:00,220 --> 00:10:02,590 we've made available to you for your 249 00:10:02,590 --> 00:10:06,220 reference . Last December , we released 250 00:10:06,220 --> 00:10:09,030 our small business strategy , reducing 251 00:10:09,030 --> 00:10:11,570 small business barriers to becoming 252 00:10:11,570 --> 00:10:14,840 part of the defense industrial base and 253 00:10:14,840 --> 00:10:17,570 tow . Educate small business on cyber 254 00:10:17,570 --> 00:10:20,920 security readiness . Again , we have 255 00:10:20,920 --> 00:10:22,840 provided for you what we call our 256 00:10:22,840 --> 00:10:25,310 welcome that with a guide for business . 257 00:10:25,320 --> 00:10:27,376 How toe work with D . O . D . With a 258 00:10:27,376 --> 00:10:31,070 number of hyperlinks . So 259 00:10:31,080 --> 00:10:33,820 for reference in terms of small 260 00:10:33,820 --> 00:10:37,710 business , 24.2% 261 00:10:37,720 --> 00:10:40,900 or $75.4 billion in 262 00:10:40,900 --> 00:10:44,420 2000 and 19 went to small 263 00:10:44,420 --> 00:10:47,170 business in terms of d o d . Spend 264 00:10:48,040 --> 00:10:51,560 further subcontracting waas 265 00:10:51,570 --> 00:10:54,150 38.6% in 266 00:10:54,150 --> 00:10:58,100 2019 or $62.3 267 00:10:58,100 --> 00:11:00,360 billion . In other words , there is 268 00:11:00,360 --> 00:11:02,810 significant flow down from major 269 00:11:02,810 --> 00:11:05,770 defense primes to small businesses . 270 00:11:06,640 --> 00:11:09,440 Additional efforts to strengthen our US 271 00:11:09,440 --> 00:11:11,330 industrial base include the 272 00:11:11,330 --> 00:11:13,870 Cybersecurity Maturity Model 273 00:11:13,870 --> 00:11:17,700 Certification or C MMC program . The 274 00:11:17,710 --> 00:11:20,420 interim D farce role , published two 275 00:11:20,420 --> 00:11:23,300 days ago , implements the Sea MMC 276 00:11:23,300 --> 00:11:25,350 framework , which establishes 277 00:11:25,350 --> 00:11:28,660 cybersecurity as fundamental to D . O . 278 00:11:28,660 --> 00:11:31,730 D acquisition and secures the D . O D 279 00:11:31,730 --> 00:11:34,980 supply chain . D . O . D also released 280 00:11:34,980 --> 00:11:36,813 its first policy on intellectual 281 00:11:36,813 --> 00:11:38,590 property to support effective 282 00:11:38,590 --> 00:11:40,980 approaches and customized strategies 283 00:11:40,990 --> 00:11:43,490 for acquiring and licensing I P and 284 00:11:43,490 --> 00:11:46,250 technical data rights . D o D can now 285 00:11:46,250 --> 00:11:48,472 better support the entire life cycle of 286 00:11:48,472 --> 00:11:51,500 its programs Upon Congress is passing 287 00:11:51,510 --> 00:11:53,780 of the Cares Act . We work closely with 288 00:11:53,780 --> 00:11:55,613 executive and legislative branch 289 00:11:55,613 --> 00:11:58,470 stakeholders to balance the needs of 290 00:11:58,480 --> 00:12:00,970 both the medical and defense industrial 291 00:12:00,970 --> 00:12:03,460 base affected by Cove . It We are 292 00:12:03,460 --> 00:12:06,130 thankful to Congress for providing the 293 00:12:06,130 --> 00:12:08,290 authorities and resource is that 294 00:12:08,290 --> 00:12:10,900 enabled the interagency to invest in U . 295 00:12:10,900 --> 00:12:13,090 S . Production off critical medical 296 00:12:13,090 --> 00:12:15,840 resource is and protect key defense 297 00:12:15,840 --> 00:12:18,270 capabilities from the consequences of 298 00:12:18,270 --> 00:12:21,200 Cove It D . O . D . Has supported 299 00:12:21,200 --> 00:12:23,320 production of essential medical items 300 00:12:23,330 --> 00:12:25,820 and investments in capacity expansion 301 00:12:25,830 --> 00:12:28,140 for the medical industry following 302 00:12:28,140 --> 00:12:30,307 initial investment . The department in 303 00:12:30,307 --> 00:12:32,307 coordination with the Department of 304 00:12:32,307 --> 00:12:34,910 Health and Human Services , or HHS , 305 00:12:34,920 --> 00:12:37,090 and the Federal Emergency Management 306 00:12:37,100 --> 00:12:39,790 Agency or FEMA Leverage Defense 307 00:12:39,790 --> 00:12:43,000 Production Act Deepa Title three Funds 308 00:12:43,060 --> 00:12:46,170 to mitigate Adverse Cove It impacts to 309 00:12:46,170 --> 00:12:49,140 the dip d . O . D Continued to provide 310 00:12:49,140 --> 00:12:51,860 vital contracting support to expand 311 00:12:51,860 --> 00:12:54,082 domestic production of medical resource 312 00:12:54,082 --> 00:12:57,760 is leveraging HHS funding that Congress 313 00:12:57,760 --> 00:13:00,720 had provided for the purpose . Of the 314 00:13:00,720 --> 00:13:04,650 nearly $658 million D . O . D has 315 00:13:04,650 --> 00:13:07,240 invested in expanding Medical Resource 316 00:13:07,240 --> 00:13:11,130 is in capacity . $213 million comes 317 00:13:11,130 --> 00:13:13,200 from D . P . A title three funds , 318 00:13:13,210 --> 00:13:16,810 427.5 million comes from 319 00:13:16,820 --> 00:13:20,560 HHS Cares Act funding , and 17.6 320 00:13:20,560 --> 00:13:22,616 million comes from the Health Care A 321 00:13:22,616 --> 00:13:25,740 Nance Enhancement Act . D . O . D . Has 322 00:13:25,750 --> 00:13:29,520 obligated $6.57 323 00:13:29,520 --> 00:13:32,180 billion for the Federal Cove in 19 324 00:13:32,190 --> 00:13:35,530 effort , and just over 62% of these 325 00:13:35,540 --> 00:13:37,760 obligations have gone to small 326 00:13:37,760 --> 00:13:41,200 businesses . $4.7 327 00:13:41,200 --> 00:13:45,120 billion over 75% of the D . O . D . 328 00:13:45,120 --> 00:13:47,100 Small business spending has been 329 00:13:47,110 --> 00:13:49,360 obligated in the medical category , 330 00:13:49,740 --> 00:13:52,050 including drugs and biologicals , 331 00:13:52,060 --> 00:13:54,116 surgical instruments , equipment and 332 00:13:54,116 --> 00:13:56,230 supplies , hospital and surgical 333 00:13:56,230 --> 00:13:58,880 clothing related special purpose items 334 00:13:58,890 --> 00:14:01,640 and other products Service code Items . 335 00:14:01,650 --> 00:14:04,260 Congress appropriated $1 billion of 336 00:14:04,260 --> 00:14:06,750 Cares Act funding for D o D to be 337 00:14:06,760 --> 00:14:09,110 executed under the Deep A Title three 338 00:14:09,110 --> 00:14:11,680 program D . O . D . Has invested 339 00:14:11,690 --> 00:14:14,570 $213 million for health and medical 340 00:14:14,570 --> 00:14:17,620 resource is such as N 95 masks , 341 00:14:17,630 --> 00:14:20,780 respirators and injection technology . 342 00:14:20,790 --> 00:14:24,760 $687 million of Cares Act Funding is 343 00:14:24,760 --> 00:14:26,800 dedicated to saving parts of the 344 00:14:26,800 --> 00:14:28,744 defense industrial base threatened 345 00:14:28,744 --> 00:14:30,950 either by COVE in 19 health or 346 00:14:30,950 --> 00:14:34,030 financial impacts . We targeted regions 347 00:14:34,030 --> 00:14:36,100 severely affected to sustain vital 348 00:14:36,100 --> 00:14:38,440 domestic industrial base capabilities 349 00:14:38,450 --> 00:14:41,500 and spur local job creation . THEA 350 00:14:41,510 --> 00:14:43,830 expenditures have protected US workers 351 00:14:43,830 --> 00:14:45,886 and ensured that our industrial base 352 00:14:45,886 --> 00:14:48,910 survived . Cove it D P . A . Title 353 00:14:48,910 --> 00:14:51,800 Three Cares Act efforts to date mostly 354 00:14:51,800 --> 00:14:54,320 target supply chains in aircraft , 355 00:14:54,330 --> 00:14:56,840 shipbuilding , soldier systems , 356 00:14:56,850 --> 00:15:00,350 microelectronics space and rare earth 357 00:15:00,360 --> 00:15:03,470 elements . Investment projects in 358 00:15:03,470 --> 00:15:06,360 projects and products and services for 359 00:15:06,360 --> 00:15:09,130 these fragile dip sectors stimulate the 360 00:15:09,130 --> 00:15:11,850 sub tiers and small businesses that 361 00:15:11,850 --> 00:15:14,540 support programs critical to national 362 00:15:14,540 --> 00:15:17,950 security . Economic and national 363 00:15:17,950 --> 00:15:20,960 security are tightly interrelated , and 364 00:15:20,960 --> 00:15:23,570 our industrial base is the nexus of the 365 00:15:23,570 --> 00:15:26,380 two . In conclusion , I look forward to 366 00:15:26,380 --> 00:15:28,580 continuing to work with Congress to 367 00:15:28,580 --> 00:15:31,380 ensure the resiliency and security of 368 00:15:31,380 --> 00:15:33,580 the defense industrial base . With 369 00:15:33,580 --> 00:15:35,860 congressional support , we will focus 370 00:15:35,860 --> 00:15:38,080 on fragile dib areas such as 371 00:15:38,080 --> 00:15:40,340 microelectronics and rare earth 372 00:15:40,350 --> 00:15:43,230 elements . But it will require a multi 373 00:15:43,230 --> 00:15:46,350 pronged approach utilizing investments , 374 00:15:46,350 --> 00:15:49,870 legislation and policy solutions . A 375 00:15:49,870 --> 00:15:52,950 US rare Earth minerals strategy should 376 00:15:52,960 --> 00:15:54,793 with the necessary congressional 377 00:15:54,793 --> 00:15:57,090 authorizations and appropriations , 378 00:15:57,100 --> 00:15:59,900 consist of national stockpiles of 379 00:15:59,900 --> 00:16:01,710 certain rare earth elements 380 00:16:01,720 --> 00:16:03,880 reestablishing rare earth mineral 381 00:16:03,880 --> 00:16:05,880 processing in the U . S . By 382 00:16:05,890 --> 00:16:07,670 implementing new incentives and 383 00:16:07,670 --> 00:16:10,500 removing disincentives and R and D 384 00:16:10,500 --> 00:16:13,640 around new forms of clean , rare earth , 385 00:16:13,640 --> 00:16:16,790 mineral processing and substitutes , we 386 00:16:16,790 --> 00:16:19,560 will need your help . At the same time , 387 00:16:19,560 --> 00:16:21,338 we will continue to support the 388 00:16:21,338 --> 00:16:23,730 departments and the nation's response 389 00:16:23,730 --> 00:16:26,350 to Cove in 19 . I appreciate the 390 00:16:26,350 --> 00:16:28,790 opportunity to speak with you today and 391 00:16:28,790 --> 00:16:30,512 look forward to answering your 392 00:16:30,512 --> 00:16:33,320 questions . Thank you will begin a five 393 00:16:33,320 --> 00:16:35,042 minute round of questions will 394 00:16:35,042 --> 00:16:37,370 alternate between parties on have a 395 00:16:37,370 --> 00:16:39,330 number here , participating both 396 00:16:39,330 --> 00:16:41,520 virtually and in person . Secretary 397 00:16:41,520 --> 00:16:43,820 Lord . The Washington Post article that 398 00:16:43,820 --> 00:16:45,876 I referred to in my opening comments 399 00:16:45,876 --> 00:16:48,098 when it came out suggested that the D . 400 00:16:48,098 --> 00:16:50,209 O . D . Was using Cares funds and the 401 00:16:50,209 --> 00:16:52,431 suggestion in the article that was that 402 00:16:52,431 --> 00:16:54,264 the funds were either being used 403 00:16:54,264 --> 00:16:56,209 improperly or in ways that weren't 404 00:16:56,209 --> 00:16:58,431 really core to the reason that Congress 405 00:16:58,431 --> 00:17:00,960 appropriated monies to the d . O . D . 406 00:17:00,970 --> 00:17:03,380 Um , you have testified in your opening 407 00:17:03,380 --> 00:17:06,640 comments about how those dollars were 408 00:17:06,640 --> 00:17:09,540 used and why , Um , let me just ask a 409 00:17:09,540 --> 00:17:11,429 set of simple questions about the 410 00:17:11,429 --> 00:17:14,050 number one in using those dollars . Has 411 00:17:14,050 --> 00:17:16,440 the d . O . D carefully examined the 412 00:17:16,440 --> 00:17:18,440 purposes and restrictions and those 413 00:17:18,440 --> 00:17:20,329 dollars and attempted to use them 414 00:17:20,329 --> 00:17:22,440 completely in Accord with guidance in 415 00:17:22,440 --> 00:17:25,540 The Cares Act . Have you over the 416 00:17:25,540 --> 00:17:27,910 course of time before today has the d . 417 00:17:27,910 --> 00:17:30,860 O . D kept both houses of Congress 418 00:17:30,870 --> 00:17:33,260 informed about how the cares Act 419 00:17:33,260 --> 00:17:35,920 dollars were being used ? Absolutely . 420 00:17:35,920 --> 00:17:38,190 In fact , what I would like to do is 421 00:17:38,200 --> 00:17:40,410 enter into the record a timeline of 422 00:17:40,420 --> 00:17:43,900 Deepa spending all of the numerous 423 00:17:44,050 --> 00:17:46,920 calls and briefings that we have done , 424 00:17:46,930 --> 00:17:49,860 as well as hearings without objection 425 00:17:49,860 --> 00:17:52,027 that will be entered into the record . 426 00:17:52,027 --> 00:17:54,249 And if I could just try toe , summarize 427 00:17:54,249 --> 00:17:56,304 quickly your testimony . The idea is 428 00:17:56,304 --> 00:17:58,416 thes thes cares Act dollars have been 429 00:17:58,416 --> 00:18:00,750 used to deal both within the D O . D . 430 00:18:00,750 --> 00:18:04,320 And within our supply chain with the 431 00:18:04,320 --> 00:18:06,542 health effects of coronavirus , so that 432 00:18:06,542 --> 00:18:08,653 we can continue to do the work that's 433 00:18:08,653 --> 00:18:11,240 needed , but also to shore up economic 434 00:18:11,240 --> 00:18:14,160 damage that is being visited upon some 435 00:18:14,160 --> 00:18:16,460 of the key actors in the supply chain 436 00:18:16,540 --> 00:18:18,707 so that we won't see an erosion of the 437 00:18:18,707 --> 00:18:20,540 supply chain that would hurt our 438 00:18:20,540 --> 00:18:22,596 national defense . Is that basically 439 00:18:22,596 --> 00:18:24,818 your testimony ? Yes , very well , said 440 00:18:24,818 --> 00:18:26,984 I had noticed the D . O . D . Issued a 441 00:18:26,984 --> 00:18:29,151 statement the day after The Washington 442 00:18:29,151 --> 00:18:29,150 Post article that mentioned many of 443 00:18:29,150 --> 00:18:31,261 these things , and I was a little bit 444 00:18:31,261 --> 00:18:33,470 surprised that that statement was not 445 00:18:33,470 --> 00:18:35,692 really reflected in The Washington Post 446 00:18:35,692 --> 00:18:37,914 story . Had that material been provided 447 00:18:37,914 --> 00:18:40,137 to The Washington Post before the story 448 00:18:40,137 --> 00:18:42,303 was written , yes , it had . In fact , 449 00:18:42,303 --> 00:18:44,414 the Washington Post had two different 450 00:18:44,414 --> 00:18:46,526 journalists who had been converse ing 451 00:18:46,526 --> 00:18:49,610 back and forth with my public affairs 452 00:18:49,620 --> 00:18:52,570 individuals on . And what is 453 00:18:52,570 --> 00:18:54,792 particularly interesting is there was a 454 00:18:54,792 --> 00:18:57,200 very lengthy interview with Stacy 455 00:18:57,200 --> 00:18:59,750 Cummings , who's here with me today who 456 00:18:59,750 --> 00:19:02,700 has directed our Joint Acquisition Task 457 00:19:02,700 --> 00:19:05,980 Force . And none of that was included 458 00:19:05,990 --> 00:19:08,212 in the article , and that's why we very 459 00:19:08,212 --> 00:19:10,180 quickly the next day , put out the 460 00:19:10,180 --> 00:19:12,990 public statement reflecting all of the 461 00:19:12,990 --> 00:19:15,101 conversations we have had . Thank you 462 00:19:15,101 --> 00:19:17,380 for addressing this . We really owe it 463 00:19:17,380 --> 00:19:19,436 to the American public toe . Use the 464 00:19:19,436 --> 00:19:21,658 dollars correctly and to be transparent 465 00:19:21,658 --> 00:19:23,824 about how they're being used . And I'm 466 00:19:23,824 --> 00:19:26,047 glad that you were able to address this 467 00:19:26,047 --> 00:19:25,620 this morning . Other members may have 468 00:19:25,620 --> 00:19:28,230 additional questions . I want toe focus 469 00:19:28,230 --> 00:19:30,341 on a night , um that you and I talked 470 00:19:30,341 --> 00:19:32,508 about it that you also raised both you 471 00:19:32,508 --> 00:19:34,563 and the chairman racing your opening 472 00:19:34,563 --> 00:19:36,786 statements . Um , Cove . It has made us 473 00:19:36,786 --> 00:19:39,008 look at a lot of supply chain issues in 474 00:19:39,008 --> 00:19:41,008 different ways . Andi ask ourselves 475 00:19:41,008 --> 00:19:43,063 whether there are elements of supply 476 00:19:43,063 --> 00:19:45,286 chains that we need toe mawr bring back 477 00:19:45,286 --> 00:19:47,397 onshore to deal with moments like the 478 00:19:47,397 --> 00:19:49,940 one we're living in now . Often we 479 00:19:49,940 --> 00:19:53,210 attempt to deal or to accomplish that 480 00:19:53,210 --> 00:19:55,377 goal through buy . American provisions 481 00:19:55,377 --> 00:19:57,377 and those by American policies have 482 00:19:57,377 --> 00:19:59,410 been a fairly standard feature of 483 00:19:59,410 --> 00:20:01,077 discussions every year in the 484 00:20:01,077 --> 00:20:03,021 committee's . We knew the National 485 00:20:03,021 --> 00:20:05,021 Defense Authorizing Act . Would you 486 00:20:05,021 --> 00:20:07,720 support policies under which the D . O . 487 00:20:07,720 --> 00:20:10,240 D would work to procure more goods and 488 00:20:10,240 --> 00:20:12,407 services from American companies ? And 489 00:20:12,407 --> 00:20:14,407 if the answer that is yes , and I'm 490 00:20:14,407 --> 00:20:16,730 sure that it is . Describe the process 491 00:20:16,730 --> 00:20:18,674 that you use at the D . O . D . To 492 00:20:18,674 --> 00:20:22,460 determine , um , how and 493 00:20:22,460 --> 00:20:24,682 when we should bring more of our supply 494 00:20:24,682 --> 00:20:28,080 chain back on shore . So security and 495 00:20:28,080 --> 00:20:30,260 resiliency of our defense industrial 496 00:20:30,260 --> 00:20:33,440 base is one of my key missions . And in 497 00:20:33,440 --> 00:20:35,890 fact , as Senator Sullivan and 498 00:20:35,890 --> 00:20:39,780 mentioned in September 2018 we had 499 00:20:39,790 --> 00:20:43,200 published the response to the executive 500 00:20:43,210 --> 00:20:46,460 order looking at the defense industrial 501 00:20:46,460 --> 00:20:48,650 base , and that has remained the 502 00:20:48,650 --> 00:20:52,100 foundational document that we have used . 503 00:20:52,110 --> 00:20:55,970 So the process is we use a whole Siris 504 00:20:55,980 --> 00:20:59,510 of criteria called out in the 13 505 00:20:59,520 --> 00:21:02,780 806 report , and we convene what we 506 00:21:02,780 --> 00:21:06,510 call , um , the industrial base , 507 00:21:06,520 --> 00:21:10,420 um committee within D o d . That 508 00:21:10,430 --> 00:21:14,290 is comprised of both the 509 00:21:14,300 --> 00:21:18,290 ASD reps . I'm sorry R A . N s reps 510 00:21:18,300 --> 00:21:20,360 as well as our service acquisition 511 00:21:20,360 --> 00:21:22,840 executives as well as agency 512 00:21:22,840 --> 00:21:25,690 representatives . And we hear from the 513 00:21:25,690 --> 00:21:28,780 totality of this group where they have 514 00:21:28,780 --> 00:21:31,590 fragility in their supply chain . We 515 00:21:31,590 --> 00:21:34,370 rack and stack on a weekly basis . I'm 516 00:21:34,370 --> 00:21:36,570 drawing Cove it now it's bi weekly 517 00:21:36,580 --> 00:21:39,100 where those issues are . So we have a 518 00:21:39,100 --> 00:21:42,680 one to end list of both , um , 519 00:21:42,690 --> 00:21:45,190 specific companies basically 520 00:21:45,190 --> 00:21:47,900 categorized under industry segments , 521 00:21:47,910 --> 00:21:51,270 as well as regions that we believe need 522 00:21:51,280 --> 00:21:53,870 investment in order to keep those 523 00:21:53,870 --> 00:21:55,830 businesses going . And that's an 524 00:21:55,840 --> 00:21:58,290 iterative process . And that's how we 525 00:21:58,290 --> 00:22:01,560 have determined what we invested in in 526 00:22:01,560 --> 00:22:04,180 terms of d . P . A title . $3 for the 527 00:22:04,180 --> 00:22:06,402 defense industrial base and that guides 528 00:22:06,402 --> 00:22:08,180 us moving forward . Thank you , 529 00:22:08,180 --> 00:22:10,402 Secretary Lord , my time is expired . I 530 00:22:10,402 --> 00:22:12,402 may come back to this in the second 531 00:22:12,402 --> 00:22:14,569 round , but let me now call on Senator 532 00:22:14,569 --> 00:22:16,850 Ernst . Thank you very much , Mr Chair . 533 00:22:16,850 --> 00:22:19,830 And thank you very much . Secretary 534 00:22:19,830 --> 00:22:23,680 Lord , for joining us today . I have a 535 00:22:23,690 --> 00:22:26,440 company in my state of Iowa as well . 536 00:22:26,440 --> 00:22:29,330 Hman Dynamics . Uh , they are a key 537 00:22:29,330 --> 00:22:31,710 part of the defense industrial base , 538 00:22:31,710 --> 00:22:33,730 and they make components for rotary 539 00:22:33,730 --> 00:22:36,450 wing aircraft for the military , 540 00:22:36,450 --> 00:22:40,240 including the CH 53 others . This 541 00:22:40,240 --> 00:22:43,700 company was described but not named on 542 00:22:43,700 --> 00:22:45,870 page 47 of the report fulfilling 543 00:22:45,870 --> 00:22:49,060 President Trump's executive order on 544 00:22:49,070 --> 00:22:50,950 the defense industrial base as a 545 00:22:50,950 --> 00:22:54,560 fragile supplier . This was before co 546 00:22:54,560 --> 00:22:57,330 vid . And many many companies in the 547 00:22:57,330 --> 00:22:59,720 aerospace industry are very much 548 00:22:59,720 --> 00:23:02,380 hurting right now due to the diminished 549 00:23:02,380 --> 00:23:05,960 demand for civilian aircraft . So what 550 00:23:05,970 --> 00:23:09,020 is the D o d . Doing to make sure that 551 00:23:09,020 --> 00:23:11,680 critical parts of the aerospace supply 552 00:23:11,680 --> 00:23:14,430 base in Iowa or anywhere else , um , in 553 00:23:14,430 --> 00:23:17,190 America are able to continue through 554 00:23:17,190 --> 00:23:20,960 the crisis and are there for our 555 00:23:20,960 --> 00:23:24,340 military . So we're doing a number of 556 00:23:24,340 --> 00:23:27,220 things . First of all , our industrial 557 00:23:27,220 --> 00:23:29,970 policy team , I consider the help desk 558 00:23:29,970 --> 00:23:33,010 for industry , and , um , this welcome 559 00:23:33,010 --> 00:23:35,940 mat that we provided you a copy of has 560 00:23:35,940 --> 00:23:37,996 critical links for how to speak with 561 00:23:37,996 --> 00:23:40,880 them . Um , drawing co vid . We 562 00:23:40,880 --> 00:23:43,680 actually upped our interaction with 563 00:23:43,840 --> 00:23:46,062 industry , listening to what the issues 564 00:23:46,062 --> 00:23:48,360 were and pushing what we thought were 565 00:23:48,360 --> 00:23:50,900 solutions . We did this through three 566 00:23:50,900 --> 00:23:54,190 times a week , calls using our 567 00:23:54,200 --> 00:23:56,940 industrial association partners . To do 568 00:23:56,940 --> 00:23:59,930 that , we had pre Cove . It held 569 00:23:59,930 --> 00:24:02,340 quarterly meetings where I brought 15 570 00:24:02,340 --> 00:24:06,140 or so leaders from D o d to meet 571 00:24:06,150 --> 00:24:10,070 with 15 or so CEOs representing , 572 00:24:10,080 --> 00:24:12,024 um , just , you know , millions of 573 00:24:12,024 --> 00:24:14,136 companies . But we had three industry 574 00:24:14,136 --> 00:24:16,247 associations that we basically worked 575 00:24:16,247 --> 00:24:18,413 with drawing covert . We expanded that 576 00:24:18,413 --> 00:24:20,950 to 15 and that way we're we will be We 577 00:24:20,950 --> 00:24:23,380 were able to work with industry . We 578 00:24:23,390 --> 00:24:26,390 specifically have held small business 579 00:24:26,400 --> 00:24:29,510 webinars and calls a swell . Those 580 00:24:29,510 --> 00:24:32,150 continue , so it's really communication 581 00:24:32,150 --> 00:24:34,580 that it comes down Thio . Now if there 582 00:24:34,580 --> 00:24:37,790 are specific companies that have issues , 583 00:24:37,800 --> 00:24:40,140 I asked them to reach out to the 584 00:24:40,140 --> 00:24:42,520 services who are their customers , but 585 00:24:42,530 --> 00:24:46,160 also to industrial policy in A and S 586 00:24:46,340 --> 00:24:48,590 and drawing these industrial based 587 00:24:48,590 --> 00:24:50,810 council . I think I misspoke earlier 588 00:24:50,940 --> 00:24:53,360 thes industrial based council meetings . 589 00:24:53,370 --> 00:24:56,750 We discuss those very issues that is 590 00:24:56,750 --> 00:24:58,870 very helpful , Secretary , and I'm 591 00:24:58,880 --> 00:25:01,730 thankful that D . O . D is working with 592 00:25:01,730 --> 00:25:04,130 specific plans and passed forward there 593 00:25:04,140 --> 00:25:07,800 outside of the d . O . D . What as 594 00:25:07,810 --> 00:25:11,050 Congress do we need to do to ensure 595 00:25:11,240 --> 00:25:13,184 that the defense industrial base , 596 00:25:13,184 --> 00:25:15,710 especially as we look at the aerospace 597 00:25:15,720 --> 00:25:17,950 sector , can survive through the 598 00:25:17,950 --> 00:25:21,670 pandemic ? I think supporting ah , lot 599 00:25:21,680 --> 00:25:25,520 of the moves we have made within , uh 600 00:25:25,530 --> 00:25:29,190 within an S , for instance , we have 601 00:25:29,200 --> 00:25:31,060 increased the amount of progress 602 00:25:31,060 --> 00:25:34,720 payments from 80 to 90% for large 603 00:25:34,720 --> 00:25:37,260 companies and medium companies , 90 to 604 00:25:37,260 --> 00:25:40,910 95% for small companies . 605 00:25:40,920 --> 00:25:44,750 We have pre awarded some contracts . 606 00:25:44,760 --> 00:25:47,160 We have basically provided liquidity . 607 00:25:47,240 --> 00:25:50,060 In addition , what we need is an 608 00:25:50,060 --> 00:25:53,310 extension of Section 36 10 of the Cares 609 00:25:53,310 --> 00:25:55,170 Act in order to give us the 610 00:25:55,170 --> 00:25:57,480 authorization to be able to take care 611 00:25:57,480 --> 00:26:00,050 of one time costs . But Justus 612 00:26:00,050 --> 00:26:02,580 importantly , we need the appropriation 613 00:26:02,590 --> 00:26:06,390 to have the money to do that . So what 614 00:26:06,390 --> 00:26:09,360 the's are one time costs . When 615 00:26:09,370 --> 00:26:12,580 employees were out for Cove it well to 616 00:26:12,590 --> 00:26:15,360 relay out plant floors so that we were 617 00:26:15,360 --> 00:26:17,550 meeting CDC guidelines for social 618 00:26:17,550 --> 00:26:21,070 distancing and so forth . Unless we get 619 00:26:21,070 --> 00:26:23,070 an appropriation , what is going to 620 00:26:23,070 --> 00:26:25,480 happen is that will come out of program 621 00:26:25,480 --> 00:26:27,690 funding that will impact , not Onley 622 00:26:27,690 --> 00:26:30,580 readiness . But modernization ? No , 623 00:26:30,580 --> 00:26:32,930 that's an excellent answer , Secretary . 624 00:26:32,930 --> 00:26:35,680 And I think it is up to us as members 625 00:26:35,690 --> 00:26:38,440 of this subcommittee and committee to 626 00:26:38,440 --> 00:26:41,170 communicate that to other members in 627 00:26:41,170 --> 00:26:44,880 Congress , that there are specific , um , 628 00:26:44,880 --> 00:26:47,690 specific items and pieces of 629 00:26:47,690 --> 00:26:49,746 legislation that we need to continue 630 00:26:49,746 --> 00:26:52,180 from The Cares act moving forward . It 631 00:26:52,180 --> 00:26:56,080 is still not business as usual . So , 632 00:26:56,080 --> 00:26:58,302 you know , I would just encourage other 633 00:26:58,302 --> 00:27:00,358 members on the committee to continue 634 00:27:00,358 --> 00:27:02,524 toe that dialogue with others just how 635 00:27:02,530 --> 00:27:05,490 important this is . Um , what are D . O . 636 00:27:05,490 --> 00:27:07,950 D . Has received through The Cares Act 637 00:27:07,950 --> 00:27:10,117 and other provisions has been a very , 638 00:27:10,117 --> 00:27:13,070 very small sliver off what we have 639 00:27:13,080 --> 00:27:16,270 allocated for general support programs 640 00:27:16,270 --> 00:27:18,840 across the United States . It is very 641 00:27:18,840 --> 00:27:21,560 important that we not slide backwards 642 00:27:21,570 --> 00:27:23,737 in our support to the men and women in 643 00:27:23,737 --> 00:27:25,737 uniforms . So thank you very much , 644 00:27:25,737 --> 00:27:27,681 Secretary , for being here with us 645 00:27:27,681 --> 00:27:31,670 today , Senator Shaheen . Thank 646 00:27:31,670 --> 00:27:34,040 you , Mr Chairman and Secretary Lord , 647 00:27:34,040 --> 00:27:35,984 thank you very much for being here 648 00:27:35,984 --> 00:27:38,207 today for your testimony and for taking 649 00:27:38,207 --> 00:27:40,151 time to talk with me yesterday . I 650 00:27:40,151 --> 00:27:42,390 really appreciated that , Um , one of 651 00:27:42,390 --> 00:27:44,860 the issues that we talked about was the 652 00:27:44,860 --> 00:27:47,870 continued challenges with the K C 46 653 00:27:48,480 --> 00:27:52,390 the refueling tanker . I relate to 654 00:27:52,390 --> 00:27:55,890 you the fact that in New Hampshire are 655 00:27:55,890 --> 00:27:58,670 157th Air Refueling Wing was supposed 656 00:27:58,670 --> 00:28:01,630 to receive another Casey 46 aircraft on 657 00:28:01,630 --> 00:28:05,060 Friday . Um , we just learned that that 658 00:28:05,060 --> 00:28:07,282 delivery was canceled due to electrical 659 00:28:07,282 --> 00:28:10,160 problems with the aircraft . Now , I've 660 00:28:10,160 --> 00:28:14,110 spoken to the whole number of officials 661 00:28:14,110 --> 00:28:17,570 from Boeing from our military 662 00:28:17,570 --> 00:28:19,990 leadership as recently as last week 663 00:28:19,990 --> 00:28:22,280 with General Vanna Boast , Who's the 664 00:28:22,280 --> 00:28:25,540 head of Air Mobility Command , all of 665 00:28:25,540 --> 00:28:27,540 whom have assured me that we've had 666 00:28:27,540 --> 00:28:30,050 good conversations between d , o . D . 667 00:28:30,050 --> 00:28:33,030 And Boeing and that the problems are 668 00:28:33,030 --> 00:28:35,141 being worked out . We're not going to 669 00:28:35,141 --> 00:28:37,308 continue to see these challenges , and 670 00:28:37,308 --> 00:28:39,419 yet we've got another aircraft that's 671 00:28:39,419 --> 00:28:41,586 not being delivered because of another 672 00:28:41,586 --> 00:28:44,100 problem . So how do we fix this ? 673 00:28:44,110 --> 00:28:46,840 Because it is an ongoing challenge 674 00:28:46,840 --> 00:28:50,450 that's affecting our ability to our 675 00:28:50,450 --> 00:28:52,561 national security . Long term , if we 676 00:28:52,561 --> 00:28:54,790 don't get thes refueling tankers up and 677 00:28:54,790 --> 00:28:58,080 running . The Casey 46 has been an 678 00:28:58,080 --> 00:29:00,870 extremely problematical program . I 679 00:29:00,870 --> 00:29:03,870 speak with LeAnn , correct this CEO of 680 00:29:03,870 --> 00:29:06,230 the defense side of going on a regular 681 00:29:06,230 --> 00:29:10,070 basis about it . One issue is , frankly , 682 00:29:10,070 --> 00:29:13,510 the technical solution that was theory . 683 00:29:13,510 --> 00:29:15,960 Gin Aled design is now being redesigned , 684 00:29:16,040 --> 00:29:18,400 but also we have had a myriad of 685 00:29:18,400 --> 00:29:21,000 manufacturing issues with Fahd and 686 00:29:21,000 --> 00:29:24,000 other , um , issues . So we have both 687 00:29:24,010 --> 00:29:26,340 an engineering design and execution 688 00:29:26,340 --> 00:29:29,480 issue as well as a manufacturing 689 00:29:29,490 --> 00:29:32,190 problem . Can you excuse me for 690 00:29:32,190 --> 00:29:34,190 interrupting ? Can you just explain 691 00:29:34,190 --> 00:29:36,023 what God is ? Yeah , I'm sorry . 692 00:29:36,023 --> 00:29:38,390 Foreign object debris . So in other 693 00:29:38,390 --> 00:29:40,600 words , when you are manufacturing and 694 00:29:40,610 --> 00:29:43,360 aircraft , we want it to be very , very 695 00:29:43,360 --> 00:29:45,830 clean because we only want going in 696 00:29:45,830 --> 00:29:47,997 that aircraft . What should be in that 697 00:29:47,997 --> 00:29:50,570 aircraft , and you don't want any 698 00:29:50,570 --> 00:29:52,900 pieces and parts off other parts of the 699 00:29:52,900 --> 00:29:55,067 aircraft going in certain sections and 700 00:29:55,067 --> 00:29:57,840 so forth , so that could potentially 701 00:29:57,850 --> 00:30:00,380 lead to operational issues . And we 702 00:30:00,380 --> 00:30:02,602 have very , very stringent requirements 703 00:30:02,602 --> 00:30:05,820 for that . I fundamentally I think that 704 00:30:05,820 --> 00:30:08,920 the root cause of this is the contract 705 00:30:08,930 --> 00:30:12,550 type that was awarded for this . And 706 00:30:12,550 --> 00:30:16,310 this is why , with our new adaptive 707 00:30:16,320 --> 00:30:19,090 acquisition framework , we are giving 708 00:30:19,090 --> 00:30:21,650 many , many different ways to our 709 00:30:21,660 --> 00:30:23,970 acquisition professionals , and we are 710 00:30:23,970 --> 00:30:26,270 teaching them how to use this in a very 711 00:30:26,270 --> 00:30:28,670 different way . In the past , we 712 00:30:28,670 --> 00:30:30,880 typically sort of locked down 713 00:30:30,890 --> 00:30:33,000 acquisition professionals for two or 714 00:30:33,000 --> 00:30:35,790 three weeks and lectured to them on 715 00:30:35,800 --> 00:30:38,010 acquisition policy , where it is 716 00:30:38,010 --> 00:30:40,290 obviously a fascinating topic . It's 717 00:30:40,290 --> 00:30:43,300 not particularly useful to be lectured 718 00:30:43,310 --> 00:30:45,690 on it . So we have changed over the 719 00:30:45,690 --> 00:30:47,912 last three years how we're doing things 720 00:30:47,912 --> 00:30:50,134 that the Defense Acquisition University 721 00:30:50,134 --> 00:30:51,746 and we're bringing in actual 722 00:30:51,746 --> 00:30:54,300 practitioners and talking about riel 723 00:30:54,300 --> 00:30:56,940 time problems they have had with their 724 00:30:56,940 --> 00:30:59,530 programs and explaining how they're 725 00:30:59,530 --> 00:31:02,290 using the authorities that Congress has 726 00:31:02,290 --> 00:31:05,270 given us and that we have translated 727 00:31:05,270 --> 00:31:07,870 into policy and instructions to give 728 00:31:07,870 --> 00:31:10,110 them the flexibility to really tailor 729 00:31:10,110 --> 00:31:12,670 their programs toe what they need were 730 00:31:12,670 --> 00:31:16,030 also giving um , newer program managers 731 00:31:16,040 --> 00:31:18,680 the forums to be able to ask questions 732 00:31:18,680 --> 00:31:21,480 and learn from others . So we're doing 733 00:31:21,480 --> 00:31:24,810 podcasts . We actually have a license 734 00:31:24,840 --> 00:31:27,020 from Ted talks and we're doing Ted x , 735 00:31:27,020 --> 00:31:28,964 D . A . You were trying to beam or 736 00:31:28,964 --> 00:31:31,650 contemporary in how we're teaching our 737 00:31:31,650 --> 00:31:34,480 acquisition work force to move at what 738 00:31:34,480 --> 00:31:37,540 I call the speed of relevance and that 739 00:31:37,550 --> 00:31:39,494 that sounds really positive . It's 740 00:31:39,494 --> 00:31:41,661 really exciting to hear that . I guess 741 00:31:41,661 --> 00:31:43,883 the question still is , though , how do 742 00:31:43,883 --> 00:31:47,240 we get this contract back on track so 743 00:31:47,240 --> 00:31:49,462 that we are actually getting the planes 744 00:31:49,462 --> 00:31:52,970 that we need and can avoid these kinds 745 00:31:52,970 --> 00:31:55,830 of continuing issues that seem to crop 746 00:31:55,830 --> 00:31:58,330 up whenever any plane is delivered ? At 747 00:31:58,330 --> 00:32:01,200 this point , with Casey 46 it will take 748 00:32:01,210 --> 00:32:04,560 very careful senior d o d A . Attention 749 00:32:04,790 --> 00:32:08,590 Secretary Esper and I have both spoken 750 00:32:08,640 --> 00:32:12,380 to the CEO of Boeing , Um , as 751 00:32:12,380 --> 00:32:14,820 well as I said Leanne Caret . But Dave 752 00:32:14,820 --> 00:32:17,860 Calhoun as well , and we will do that 753 00:32:17,870 --> 00:32:20,092 on a frequent basis . I talked with the 754 00:32:20,092 --> 00:32:22,370 service acquisition executive Will 755 00:32:22,370 --> 00:32:25,060 Roper about it , but what I do is I 756 00:32:25,060 --> 00:32:28,340 have metrics that I follow very , very 757 00:32:28,340 --> 00:32:30,010 closely on our major defense 758 00:32:30,010 --> 00:32:32,610 acquisition programs . Um , I believe 759 00:32:32,610 --> 00:32:35,300 you have to manage by the data , and I 760 00:32:35,300 --> 00:32:38,660 follow on a monthly basis . What cost , 761 00:32:38,670 --> 00:32:41,630 um , timing as well as actual 762 00:32:41,630 --> 00:32:44,500 functionality of these p programs looks 763 00:32:44,500 --> 00:32:46,500 like . And if we're not hitting the 764 00:32:46,500 --> 00:32:49,450 mark , so to speak , we re engage . 765 00:32:50,040 --> 00:32:52,151 Thank you . Thank you , Mr Chairman . 766 00:32:52,151 --> 00:32:54,373 Thank you , Senator Shaheen and I share 767 00:32:54,373 --> 00:32:57,230 your concerns on the Casey 46 . It's a 768 00:32:57,240 --> 00:33:00,180 huge , problematic issue the Air Force 769 00:33:00,180 --> 00:33:02,880 has delayed and delayed with regard to 770 00:33:02,880 --> 00:33:05,870 its Oh , Conus decision on where to 771 00:33:05,870 --> 00:33:08,710 base the Casey 46 . I think , in this 772 00:33:08,710 --> 00:33:10,766 committee , by the way , thanks that 773 00:33:11,540 --> 00:33:14,460 that should be in Alaska . But that's a 774 00:33:14,460 --> 00:33:16,840 different topic . But the broader topic 775 00:33:16,840 --> 00:33:19,690 of Casey 46 delays , I think is a 776 00:33:19,690 --> 00:33:21,857 really important one . So I appreciate 777 00:33:21,857 --> 00:33:24,023 you raising that , Madam Secretary , I 778 00:33:24,023 --> 00:33:26,270 want toe dive into this issue of 779 00:33:26,640 --> 00:33:30,550 strategic critical minerals . Um , the 780 00:33:30,550 --> 00:33:33,550 U . S Geological Survey a , 781 00:33:34,040 --> 00:33:37,600 um , inter agency study recently . And 782 00:33:37,600 --> 00:33:39,822 then , just as I mentioned last night , 783 00:33:39,822 --> 00:33:41,680 the new executive order from the 784 00:33:41,680 --> 00:33:44,460 President on this topic highlights some 785 00:33:44,460 --> 00:33:46,627 of the major concerns that I think all 786 00:33:46,627 --> 00:33:48,404 of us have . And I'm just gonna 787 00:33:48,404 --> 00:33:50,627 highlight some of the language from the 788 00:33:50,627 --> 00:33:52,849 Executive order . 31 of the 35 critical 789 00:33:52,849 --> 00:33:54,960 minerals that we have for our defense 790 00:33:54,960 --> 00:33:57,182 industrial base . The United the United 791 00:33:57,182 --> 00:34:00,100 States imports more than half of its 792 00:34:00,100 --> 00:34:02,740 annual consumption in the United States , 793 00:34:02,740 --> 00:34:06,730 has no domestic production for 14 of 794 00:34:06,730 --> 00:34:09,850 these critical minerals . The 795 00:34:09,860 --> 00:34:12,500 dependence that we have on one country , 796 00:34:12,640 --> 00:34:15,550 the People's Republic of China for 797 00:34:15,550 --> 00:34:17,772 these critical minerals is particularly 798 00:34:17,772 --> 00:34:20,060 concerning the United States now 799 00:34:20,060 --> 00:34:23,260 imports 80% of its rare earth 800 00:34:23,830 --> 00:34:26,630 minerals from China , with portions of 801 00:34:26,630 --> 00:34:29,590 the remainder indirectly sourced from 802 00:34:29,590 --> 00:34:32,760 China through other countries in the 19 803 00:34:32,760 --> 00:34:34,816 eighties . The United States produce 804 00:34:34,816 --> 00:34:36,927 more of these elements than any other 805 00:34:36,927 --> 00:34:39,149 country in the world , and by the way , 806 00:34:39,149 --> 00:34:41,260 we still have them . We still haven't 807 00:34:41,260 --> 00:34:43,204 Mike State . Bo Can Mountain is an 808 00:34:43,204 --> 00:34:45,910 example , but China used aggressive 809 00:34:45,910 --> 00:34:48,470 economic practices to strategically 810 00:34:48,470 --> 00:34:50,637 flood the global market for rare earth 811 00:34:50,637 --> 00:34:53,610 elements and displace its competitors . 812 00:34:53,790 --> 00:34:56,460 Since gaining this advantage every time , 813 00:34:57,000 --> 00:34:58,889 another supplier , whether in the 814 00:34:58,889 --> 00:35:01,056 United States or somewhere else in the 815 00:35:01,056 --> 00:35:03,056 world , looks like they're gonna be 816 00:35:03,056 --> 00:35:05,222 able to start mining and producing the 817 00:35:05,222 --> 00:35:08,250 Chinese flood the market to destroy 818 00:35:08,250 --> 00:35:11,420 their competition . It's outrageous and 819 00:35:11,420 --> 00:35:14,850 is the president's e o Last night 820 00:35:14,860 --> 00:35:17,660 highlights . It's a real vulnerability 821 00:35:17,660 --> 00:35:20,040 that we have . You may see China 822 00:35:20,040 --> 00:35:23,430 doesn't even hide it in 2010 in a , 823 00:35:24,340 --> 00:35:27,200 uh , dispute with Japan . They just cut 824 00:35:27,200 --> 00:35:29,840 off any rare earth elements and have 825 00:35:29,840 --> 00:35:33,110 threatened to do it to us . So can you 826 00:35:33,120 --> 00:35:35,450 talk about this dependence on critical 827 00:35:35,450 --> 00:35:37,228 minerals and how it affects the 828 00:35:37,228 --> 00:35:39,800 integrity of our defense industrial 829 00:35:39,800 --> 00:35:42,650 base in what are we doing about it ? 830 00:35:42,660 --> 00:35:46,600 Either just us or hopefully with our 831 00:35:46,600 --> 00:35:49,700 allies to deter China from these type 832 00:35:49,700 --> 00:35:51,700 of actions ? Because , as I've been 833 00:35:51,700 --> 00:35:54,570 saying , it's not a matter of if , but 834 00:35:54,570 --> 00:35:58,360 when they're going to do this to us and 835 00:35:59,240 --> 00:36:01,184 is you know , many of our critical 836 00:36:01,184 --> 00:36:03,240 weapons systems , like the F 35 have 837 00:36:03,240 --> 00:36:05,351 enormous amounts of these minerals in 838 00:36:05,351 --> 00:36:07,130 them , and we are very , very 839 00:36:07,130 --> 00:36:09,690 vulnerable to our biggest strategic 840 00:36:09,690 --> 00:36:11,970 adversary in the world who has no 841 00:36:11,970 --> 00:36:15,120 qualms about playing hardball . This is 842 00:36:15,120 --> 00:36:17,470 clearly an area of risk , it was called 843 00:36:17,470 --> 00:36:21,300 out in the 13 806 report . We have a 844 00:36:21,300 --> 00:36:24,620 number of tools we can use at D o . D , 845 00:36:24,630 --> 00:36:26,630 including D P . A title three 846 00:36:26,630 --> 00:36:29,190 investments toe help re sure this 847 00:36:29,190 --> 00:36:31,930 capability to build both the capacity 848 00:36:31,930 --> 00:36:34,030 and throughput . We have made a few 849 00:36:34,030 --> 00:36:36,670 awards , for instance , on neodymium 850 00:36:36,680 --> 00:36:38,840 iron boron ride that's needed for 851 00:36:38,840 --> 00:36:41,560 magnets . We had one award there , and 852 00:36:41,560 --> 00:36:43,980 I have about six others here . There 853 00:36:43,980 --> 00:36:46,147 are a few more that will be coming out 854 00:36:46,147 --> 00:36:48,147 in the next couple of days , but we 855 00:36:48,147 --> 00:36:50,091 need to build the capacity and the 856 00:36:50,091 --> 00:36:52,470 capability to at least process , if not 857 00:36:52,470 --> 00:36:56,170 Mina's . Well , we have some other 858 00:36:56,170 --> 00:36:58,830 tools that reach out into the inter 859 00:36:58,830 --> 00:37:02,710 agency , looking at adversaries who 860 00:37:02,710 --> 00:37:05,470 are disrupting our supply chain and a 861 00:37:05,470 --> 00:37:08,140 variety of ways . So we work closely 862 00:37:08,140 --> 00:37:11,020 with commerce on on EPA standards and 863 00:37:11,020 --> 00:37:13,190 so forth . But I would say what we 864 00:37:13,190 --> 00:37:16,480 could do today is begin the 865 00:37:16,490 --> 00:37:20,150 mining and processing number one to we 866 00:37:20,150 --> 00:37:23,020 can think about stockpiling some more 867 00:37:23,020 --> 00:37:24,800 of these . I actually have 868 00:37:24,810 --> 00:37:28,410 responsibility for the D . O D 869 00:37:28,410 --> 00:37:30,700 stockpile . We work through the Defense 870 00:37:30,700 --> 00:37:33,130 Logistics Agency . On that , I think is 871 00:37:33,130 --> 00:37:37,130 you know , 50 c um 98 was 872 00:37:37,130 --> 00:37:39,870 amended in 79 building on that , this 873 00:37:39,870 --> 00:37:42,960 authority that was created in 1939 we 874 00:37:42,960 --> 00:37:45,127 annually put out a report on what's in 875 00:37:45,127 --> 00:37:47,238 the stockpile . We look fragilities . 876 00:37:47,238 --> 00:37:49,900 We have targeted rare earth . We also 877 00:37:49,910 --> 00:37:52,890 are looking at clean substitutes for 878 00:37:52,890 --> 00:37:55,710 some of these so reassuring 879 00:37:55,720 --> 00:37:58,830 stockpiling and looking at substitutes . 880 00:37:58,840 --> 00:38:01,700 But we need the authorities to move 881 00:38:01,700 --> 00:38:04,160 forward with the's in some cases , and 882 00:38:04,160 --> 00:38:06,271 we certainly need appropriations when 883 00:38:06,271 --> 00:38:08,840 Senator Ernst Head earlier asked me , 884 00:38:08,840 --> 00:38:10,840 What can Congress do to support the 885 00:38:10,840 --> 00:38:13,020 fragility of the dib ? One of the 886 00:38:13,020 --> 00:38:15,280 things that I didn't have a chance to 887 00:38:15,280 --> 00:38:18,170 get Thio was talking about ongoing 888 00:38:18,180 --> 00:38:21,450 authorities and off and appropriations 889 00:38:21,460 --> 00:38:24,440 for D . P . A Title three . We actually 890 00:38:24,440 --> 00:38:26,760 have worked through O . M B and have 891 00:38:26,760 --> 00:38:29,250 submitted to Congress and hoped to see 892 00:38:29,260 --> 00:38:32,280 another appropriation to D . O D under 893 00:38:32,280 --> 00:38:34,280 The Cares Act . And we actually had 894 00:38:34,280 --> 00:38:37,560 submitted $5 billion for another D . P . 895 00:38:37,560 --> 00:38:40,200 A Title three appropriation because our 896 00:38:40,200 --> 00:38:42,860 Industrial Business Council has a very 897 00:38:42,860 --> 00:38:45,260 long list of critical fragilities that 898 00:38:45,260 --> 00:38:47,316 we're trying to address where Earths 899 00:38:47,316 --> 00:38:50,120 are a key one . Great . Thank you . I 900 00:38:50,120 --> 00:38:52,287 think we're gonna begin a second round 901 00:38:52,287 --> 00:38:54,540 of questioning Senator Kaine . Thank 902 00:38:54,540 --> 00:38:56,762 you , Mr Chair , because I still have a 903 00:38:56,762 --> 00:38:58,929 lot of questions . Now I'm really into 904 00:38:58,929 --> 00:39:01,160 this topic . So let me raise one and 905 00:39:01,520 --> 00:39:03,409 Cove . It has been so bad , but I 906 00:39:03,409 --> 00:39:05,464 wonder if there's some opportunities 907 00:39:05,464 --> 00:39:07,520 that we should explore . Give you an 908 00:39:07,520 --> 00:39:09,920 example . Um , many layoffs are 909 00:39:09,920 --> 00:39:12,870 occurring globally in the aviation 910 00:39:12,870 --> 00:39:14,950 industry because travelers down and 911 00:39:14,950 --> 00:39:17,172 then that's leading both airlines , but 912 00:39:17,172 --> 00:39:19,530 also manufacturers to do layoffs . 913 00:39:20,020 --> 00:39:22,170 Rolls Royce has a big presence in 914 00:39:22,170 --> 00:39:24,337 Virginia , so we think of roles cars . 915 00:39:24,337 --> 00:39:26,337 But Rolls Royce is really an engine 916 00:39:26,337 --> 00:39:28,750 company and their high end marine and 917 00:39:28,760 --> 00:39:31,400 aviation engines . There's a facility 918 00:39:31,400 --> 00:39:33,289 in Virginia called Cross Point in 919 00:39:33,289 --> 00:39:35,456 Prince George County , which had about 920 00:39:35,456 --> 00:39:37,511 280 workers that just announced they 921 00:39:37,511 --> 00:39:39,511 were shutting down cross point very 922 00:39:39,511 --> 00:39:41,567 sophisticated manufacturing facility 923 00:39:41,567 --> 00:39:44,930 that makes components to high end Civil 924 00:39:44,930 --> 00:39:47,240 Aviation jet engines . They're closing 925 00:39:47,240 --> 00:39:49,750 down because the demand for purchase of 926 00:39:50,120 --> 00:39:52,570 these aircraft is on the civil side is 927 00:39:52,570 --> 00:39:54,681 going to be reduced in coming years . 928 00:39:55,120 --> 00:39:57,120 But it is a workforce that has some 929 00:39:57,120 --> 00:39:59,120 transferrable work skills . And I'm 930 00:39:59,120 --> 00:40:00,953 wondering , for example , on the 931 00:40:00,953 --> 00:40:03,240 aviation side of our acquisitions and d 932 00:40:03,240 --> 00:40:06,270 o d are we thinking about when we see 933 00:40:06,270 --> 00:40:09,250 Boeing contemplating layoffs or others 934 00:40:09,250 --> 00:40:11,530 contemplating life's on the civil side ? 935 00:40:11,910 --> 00:40:14,132 Are there things that we could do say , 936 00:40:14,132 --> 00:40:15,966 for example , with with existing 937 00:40:15,966 --> 00:40:18,160 aviation platform contracts toe 938 00:40:18,170 --> 00:40:20,820 dialogue with those suppliers about hey , 939 00:40:20,820 --> 00:40:22,931 could could we speed up production if 940 00:40:22,931 --> 00:40:24,820 we could transform , You know , a 941 00:40:24,820 --> 00:40:26,931 workforce that's doing civil aviation 942 00:40:26,931 --> 00:40:29,098 components over to the military side ? 943 00:40:29,098 --> 00:40:30,900 We may be able to advance our 944 00:40:30,900 --> 00:40:33,380 procurement of some military assets by 945 00:40:33,380 --> 00:40:35,620 taking advantage of and productively 946 00:40:35,620 --> 00:40:37,800 using this workforce that stranded 947 00:40:37,800 --> 00:40:39,967 right now . So I'm wondering if you're 948 00:40:39,967 --> 00:40:42,022 contemplating that . Absolutely . In 949 00:40:42,022 --> 00:40:44,133 fact , we've been working that , um , 950 00:40:44,133 --> 00:40:46,300 you mentioned Rolls Royce was with Tom 951 00:40:46,300 --> 00:40:49,050 Bell the other day working with him on 952 00:40:49,060 --> 00:40:51,670 F 35 issues . I will tell you both 953 00:40:51,670 --> 00:40:55,130 Pratt and Whitney and Rolls Royce , um , 954 00:40:55,140 --> 00:40:57,307 have looked to the defense side of the 955 00:40:57,307 --> 00:40:59,307 house , if you will , and they have 956 00:40:59,307 --> 00:41:01,520 been able to catch up on some issues 957 00:41:01,520 --> 00:41:03,687 and we're looking at pushing forward . 958 00:41:03,687 --> 00:41:05,853 I mentioned that we have done industry 959 00:41:05,853 --> 00:41:09,170 association calls pulling in many , 960 00:41:09,170 --> 00:41:11,392 many different industry representatives 961 00:41:11,392 --> 00:41:14,150 over the last few months with a much 962 00:41:14,150 --> 00:41:16,410 greater frequency than previously . We 963 00:41:16,410 --> 00:41:18,820 talk about these very issues how we can 964 00:41:18,820 --> 00:41:21,520 take the drastic slowdown on the 965 00:41:21,520 --> 00:41:24,190 commercial side and leverage that on 966 00:41:24,190 --> 00:41:26,350 the defense side , we have actually 967 00:41:26,350 --> 00:41:28,730 worked with each of the military 968 00:41:28,730 --> 00:41:31,990 services to have early awards of some 969 00:41:31,990 --> 00:41:34,440 contracts to again both help with 970 00:41:34,440 --> 00:41:36,880 liquidity at the company's as well as 971 00:41:36,880 --> 00:41:39,102 retaining the workforce , because , you 972 00:41:39,102 --> 00:41:41,110 know these skills are not generated 973 00:41:41,120 --> 00:41:44,670 overnight and quite often on the 974 00:41:44,670 --> 00:41:47,760 defense side , we need clearances , toe 975 00:41:47,760 --> 00:41:51,210 work on some of the products , 976 00:41:51,220 --> 00:41:54,920 and if we have a situation where these 977 00:41:54,920 --> 00:41:57,330 dual use type companies , if you will , 978 00:41:57,410 --> 00:41:59,450 that service both commercial and 979 00:41:59,450 --> 00:42:01,970 defense aviation . If they lose a 980 00:42:01,970 --> 00:42:04,192 significant portion of their commercial 981 00:42:04,192 --> 00:42:06,192 business , their overhead rates are 982 00:42:06,192 --> 00:42:08,490 gonna go up significantly as well . And 983 00:42:08,490 --> 00:42:11,030 the defense cost is going to go up . So 984 00:42:11,030 --> 00:42:13,460 we're trying to create a large bases we 985 00:42:13,460 --> 00:42:16,190 can and actively working with each of 986 00:42:16,190 --> 00:42:18,246 those companies . Thank you for that 987 00:42:18,246 --> 00:42:20,468 Secretary Lord . Just one comment , and 988 00:42:20,468 --> 00:42:22,690 then one final question . Comment about 989 00:42:22,690 --> 00:42:24,912 your point . With respect to Section 36 990 00:42:24,912 --> 00:42:28,120 10 I share your view on that point , 991 00:42:28,130 --> 00:42:30,352 and I think this is now a little bit of 992 00:42:30,352 --> 00:42:32,574 a cross government point . Um , there's 993 00:42:32,574 --> 00:42:34,470 all sorts of funding in our 994 00:42:34,470 --> 00:42:36,359 appropriations act . Could be for 995 00:42:36,359 --> 00:42:38,470 grants through the N . I . H or funds 996 00:42:38,470 --> 00:42:40,526 to universities . Or HUD gave out an 997 00:42:40,526 --> 00:42:42,637 award where the money was supposed to 998 00:42:42,637 --> 00:42:44,748 be spent by a certain time of Section 999 00:42:44,748 --> 00:42:46,859 36 . 10 contracts were supposed to be 1000 00:42:46,859 --> 00:42:48,859 done by a certain time with outside 1001 00:42:48,859 --> 00:42:51,026 Contractors Cove . It has dramatically 1002 00:42:51,026 --> 00:42:53,026 changed the timing , the ability of 1003 00:42:53,026 --> 00:42:55,192 folks to act in a timely fashion , and 1004 00:42:55,192 --> 00:42:56,970 it's my hope that Congress will 1005 00:42:56,970 --> 00:42:59,026 recognize that and continue to allow 1006 00:42:59,026 --> 00:43:01,410 flexibility and use of funds even past 1007 00:43:01,410 --> 00:43:03,188 the time that may have been the 1008 00:43:03,188 --> 00:43:05,299 allotted time or the agreed upon time 1009 00:43:05,299 --> 00:43:07,410 pre cova . Because Covad's change the 1010 00:43:07,410 --> 00:43:09,521 reality and I I see I'm getting these 1011 00:43:09,521 --> 00:43:11,521 requests from local governments and 1012 00:43:11,521 --> 00:43:13,521 research institutions . I think the 1013 00:43:13,521 --> 00:43:15,521 Section 36 10 issue is a is kind of 1014 00:43:15,521 --> 00:43:17,743 fits in that category . So I share your 1015 00:43:17,743 --> 00:43:19,854 view that we should try to be flecked 1016 00:43:19,854 --> 00:43:22,021 with that . Here's the last question I 1017 00:43:22,021 --> 00:43:24,243 wanted to ask you the last year's N D . 1018 00:43:24,243 --> 00:43:26,410 A . Required the Department of Compile 1019 00:43:26,410 --> 00:43:25,960 plans to mitigate and adapt the effects 1020 00:43:25,960 --> 00:43:28,720 of extreme weather on our basis . These 1021 00:43:28,720 --> 00:43:31,240 air called military installation 1022 00:43:31,240 --> 00:43:33,690 resilience plans . We've yet to receive 1023 00:43:33,690 --> 00:43:35,857 any plans for that apartment or any of 1024 00:43:35,857 --> 00:43:38,580 the services . Can you tell me what the 1025 00:43:38,800 --> 00:43:40,910 status of those required resilience 1026 00:43:40,910 --> 00:43:43,590 plans is ? And when can Congress expect 1027 00:43:43,590 --> 00:43:45,230 to see them ? I know that my 1028 00:43:45,230 --> 00:43:48,730 sustainment team works on those very 1029 00:43:48,740 --> 00:43:51,810 issues under the Installations group . 1030 00:43:51,820 --> 00:43:55,360 I do not know the exact date and status 1031 00:43:55,360 --> 00:43:57,416 of that , but I'll take that one for 1032 00:43:57,416 --> 00:43:59,693 the record and certainly get back Thio . 1033 00:43:59,693 --> 00:44:01,971 Thank you . Thank you so much . Thanks . 1034 00:44:01,971 --> 00:44:01,910 Mr . Chairman . Senator Shaheen 1035 00:44:05,890 --> 00:44:08,560 one of the things that Assistance 1036 00:44:08,570 --> 00:44:11,600 Secretary Gillis is about to receive . 1037 00:44:11,600 --> 00:44:14,020 It's a letter from secretary rounds and 1038 00:44:14,860 --> 00:44:18,690 me that raises concerns that we have 1039 00:44:18,690 --> 00:44:21,190 about the Defense Logistics Agency's , 1040 00:44:21,200 --> 00:44:23,420 um , significant reduction in their 1041 00:44:23,420 --> 00:44:25,531 obligation authority . It's something 1042 00:44:25,531 --> 00:44:27,587 that you and I discussed yesterday , 1043 00:44:27,587 --> 00:44:29,570 and I understand that the , um , 1044 00:44:29,580 --> 00:44:32,460 they're working Capital Fund has been 1045 00:44:32,460 --> 00:44:34,571 constricted dramatically , and that's 1046 00:44:34,571 --> 00:44:38,180 led toe that issue . But , um , I'm 1047 00:44:38,180 --> 00:44:40,980 particularly concerned about what this 1048 00:44:40,980 --> 00:44:44,850 means for the troops support 1049 00:44:44,850 --> 00:44:47,010 clothing and textile supply chain . 1050 00:44:47,020 --> 00:44:49,210 It's a particularly fragile aspect of 1051 00:44:49,220 --> 00:44:52,600 our defense industrial base , and , um , 1052 00:44:53,190 --> 00:44:55,760 further construction of Dellas 1053 00:44:55,760 --> 00:44:57,830 authority and the ability to award 1054 00:44:57,830 --> 00:44:59,774 those contracts is really having a 1055 00:44:59,774 --> 00:45:02,130 significant impact . So can you speak 1056 00:45:02,130 --> 00:45:04,297 to that ? Can you also talk about what 1057 00:45:04,297 --> 00:45:06,241 you're thinking in terms of how we 1058 00:45:06,241 --> 00:45:08,463 address those companies that are really 1059 00:45:08,463 --> 00:45:11,980 being affected so that we don't have a 1060 00:45:11,980 --> 00:45:15,080 significant loss of that aspect of our 1061 00:45:15,080 --> 00:45:17,540 industrial base ? Absolutely two 1062 00:45:17,540 --> 00:45:19,910 different points there won . The way 1063 00:45:19,910 --> 00:45:23,070 the Defense Logistics Agency works 1064 00:45:23,080 --> 00:45:26,250 is they are a working capital funds , 1065 00:45:26,250 --> 00:45:28,417 so they have a certain amount of money 1066 00:45:28,417 --> 00:45:30,639 that that they could go and spend , and 1067 00:45:30,639 --> 00:45:32,750 they obligated before they spend it . 1068 00:45:32,790 --> 00:45:35,880 If they do not liquidate the inventory 1069 00:45:35,880 --> 00:45:38,650 they have on hand . It holds on to 1070 00:45:38,650 --> 00:45:41,290 money and therefore you can't continue 1071 00:45:41,290 --> 00:45:43,850 the cycle . Drawing co vid . 1072 00:45:43,860 --> 00:45:47,840 The dispersement of a lot of 1073 00:45:47,840 --> 00:45:50,690 these goods did not happen as quickly 1074 00:45:50,690 --> 00:45:52,690 because there was a slowdown in the 1075 00:45:52,690 --> 00:45:55,360 entire system . And so we got a lot of 1076 00:45:55,360 --> 00:45:58,150 feedback about where's , you know where 1077 00:45:58,150 --> 00:46:01,340 the orders we've been working on that 1078 00:46:01,350 --> 00:46:03,072 with companies . If particular 1079 00:46:03,072 --> 00:46:06,310 companies have problems again , our d p . 1080 00:46:06,310 --> 00:46:09,660 A . Title three can help as well as 36 1081 00:46:09,660 --> 00:46:12,570 10 once for the one time costs they 1082 00:46:12,570 --> 00:46:15,980 have . We have , in fact , begun re 1083 00:46:15,980 --> 00:46:18,930 shoring quite a bit in terms of 1084 00:46:18,930 --> 00:46:21,360 clothing and so forth , and we are 1085 00:46:21,360 --> 00:46:25,020 working on that through our 1086 00:46:25,030 --> 00:46:28,550 industrial based council . But what we 1087 00:46:28,550 --> 00:46:31,150 think in terms of the demand signal , 1088 00:46:31,150 --> 00:46:33,039 if you will , for liquidating the 1089 00:46:33,039 --> 00:46:35,180 inventory , we are seeing it start to 1090 00:46:35,180 --> 00:46:37,510 pick up , and we think in the October 1091 00:46:37,510 --> 00:46:39,670 time frame we will begin to see some 1092 00:46:39,670 --> 00:46:42,330 more of those obligations . But frankly , 1093 00:46:42,340 --> 00:46:45,900 it's pure supply and demand . Um , 1094 00:46:45,910 --> 00:46:48,800 well , it's encouraging to hear that we 1095 00:46:48,800 --> 00:46:52,000 think October may see a resurgence . 1096 00:46:52,580 --> 00:46:55,450 Can I related issue to that ? And it 1097 00:46:55,450 --> 00:46:57,506 sort of goes back to the issues that 1098 00:46:57,506 --> 00:46:59,450 Senator Kaine was raising that The 1099 00:46:59,450 --> 00:47:01,672 Washington Post has raised , um , as we 1100 00:47:01,672 --> 00:47:04,780 look at the awards , there have been 1101 00:47:04,780 --> 00:47:08,660 some significant awards from the Della , 1102 00:47:08,780 --> 00:47:12,220 too contracts for medical 1103 00:47:12,220 --> 00:47:14,950 gowns to address PPE shortfalls . And 1104 00:47:14,950 --> 00:47:16,940 it's my understanding that some of 1105 00:47:16,940 --> 00:47:20,330 those contracts have been to companies 1106 00:47:20,330 --> 00:47:22,441 that have very little experience with 1107 00:47:22,441 --> 00:47:25,270 producing that kind of equipment , that 1108 00:47:25,270 --> 00:47:27,381 the standards have not always been up 1109 00:47:27,381 --> 00:47:29,381 to par , and it's created some real 1110 00:47:29,381 --> 00:47:31,690 challenges . And I understand that the 1111 00:47:31,690 --> 00:47:33,801 awards were made using lowest price , 1112 00:47:33,801 --> 00:47:35,770 technically acceptable contracting 1113 00:47:35,780 --> 00:47:38,510 procedures . Maybe you can confirm that 1114 00:47:38,510 --> 00:47:41,560 or not . And if that's the case , if it 1115 00:47:41,560 --> 00:47:43,990 is resulted in , um , 1116 00:47:44,880 --> 00:47:48,570 subpar products , should we think about 1117 00:47:48,570 --> 00:47:51,770 whether , as we're looking at , um , 1118 00:47:51,780 --> 00:47:54,870 companies that are doing new products 1119 00:47:54,870 --> 00:47:57,870 to address our domestic supply needs , 1120 00:47:58,060 --> 00:48:01,910 that maybe the lowest price technically 1121 00:48:01,910 --> 00:48:04,077 acceptable contract isn't the best way 1122 00:48:04,077 --> 00:48:05,910 to do that , that we ought to be 1123 00:48:05,910 --> 00:48:08,132 looking at best value contracting ? But 1124 00:48:08,132 --> 00:48:10,243 can you speak toe the challenges with 1125 00:48:10,243 --> 00:48:12,299 that in terms of the gowns ? When we 1126 00:48:12,299 --> 00:48:14,299 stood up the Joint Acquisition Task 1127 00:48:14,299 --> 00:48:17,210 Force , there was a number , um , of 1128 00:48:17,370 --> 00:48:20,640 orders and a Siris of 1129 00:48:20,640 --> 00:48:23,860 purchases that were put in place we 1130 00:48:23,860 --> 00:48:26,940 came on board and used our expertise 1131 00:48:26,950 --> 00:48:29,870 toe look at available supply and at the 1132 00:48:29,870 --> 00:48:32,190 demand signal , and particularly for 1133 00:48:32,190 --> 00:48:35,100 these gowns we worked with D . L . A 1134 00:48:35,170 --> 00:48:39,030 very recently toe have to industry days 1135 00:48:39,040 --> 00:48:41,190 and reached out to many , many , many 1136 00:48:41,190 --> 00:48:43,300 small businesses , often through 1137 00:48:43,300 --> 00:48:45,960 industry associations again to make 1138 00:48:45,960 --> 00:48:49,390 sure they got all of the information 1139 00:48:49,400 --> 00:48:53,030 and that we explain to them exactly 1140 00:48:53,030 --> 00:48:56,870 what the process is on . Ben , we went 1141 00:48:56,870 --> 00:48:59,180 through a very rigorous process and 1142 00:48:59,180 --> 00:49:01,580 just recently awarded some of those . 1143 00:49:01,590 --> 00:49:05,060 But what I will do is make sure that we 1144 00:49:05,060 --> 00:49:07,400 get back to your office specifically , 1145 00:49:07,400 --> 00:49:10,170 um , with the specific companies and 1146 00:49:10,170 --> 00:49:12,830 issues and the process we used . I know 1147 00:49:12,830 --> 00:49:15,890 this was raised to us early on , and we 1148 00:49:15,900 --> 00:49:18,122 spent an enormous amount of time at the 1149 00:49:18,122 --> 00:49:20,430 JAT of making sure we had free and open 1150 00:49:20,430 --> 00:49:23,120 competition and that very stringent 1151 00:49:23,120 --> 00:49:25,400 criteria were met and adhered to . 1152 00:49:25,970 --> 00:49:28,192 Thank you . I'd appreciate if you could 1153 00:49:28,192 --> 00:49:30,248 let us know what you find out . Mr . 1154 00:49:30,248 --> 00:49:32,414 Chairman , can I ask one more question 1155 00:49:32,414 --> 00:49:34,740 before , um , can you tell me what the 1156 00:49:34,740 --> 00:49:38,740 status is of our efforts with 1157 00:49:38,750 --> 00:49:40,694 Turkish suppliers and when they're 1158 00:49:40,694 --> 00:49:42,850 gonna be removed from the F 35 supply 1159 00:49:42,850 --> 00:49:46,800 chain . So , as you know , because 1160 00:49:46,800 --> 00:49:50,380 of the S 400 purchase , um , 1161 00:49:50,390 --> 00:49:54,380 we had multiple face to face 1162 00:49:54,380 --> 00:49:56,436 meetings with the Turks and a lot of 1163 00:49:56,436 --> 00:49:58,713 correspondence I was involved in these , 1164 00:49:58,713 --> 00:50:01,090 um , saying the S 400 F 35 were 1165 00:50:01,090 --> 00:50:04,430 mutually incompatible , and we 1166 00:50:04,430 --> 00:50:06,680 said that there was some boundary 1167 00:50:06,680 --> 00:50:09,590 conditions . If the Turks took delivery , 1168 00:50:09,600 --> 00:50:12,490 we would then remove the supply chain . 1169 00:50:12,500 --> 00:50:15,980 We estimated it would be about six or 1170 00:50:15,980 --> 00:50:18,410 $700 million in non recurring 1171 00:50:18,410 --> 00:50:20,577 engineering . To begin to do that , we 1172 00:50:20,577 --> 00:50:22,577 did actually begin the works . Um , 1173 00:50:22,577 --> 00:50:25,710 prior to announcing that we were were 1174 00:50:25,710 --> 00:50:29,700 withdrawing from Turkey when the S 1175 00:50:29,700 --> 00:50:33,270 400 actually was delivered to Turkey . 1176 00:50:33,270 --> 00:50:36,390 We then very overtly began the work . 1177 00:50:36,390 --> 00:50:38,501 Prior to that , we were quietly doing 1178 00:50:38,501 --> 00:50:41,920 some things . What we found was that 1179 00:50:41,930 --> 00:50:44,520 although we balanced out the majority 1180 00:50:44,530 --> 00:50:47,060 of contracts , there were a number of 1181 00:50:47,060 --> 00:50:49,980 them for the Center for Use lodge from 1182 00:50:49,980 --> 00:50:52,760 some of the F 135 engine parts in a 1183 00:50:52,760 --> 00:50:56,020 girly bladed rotors , for instance , um , 1184 00:50:56,030 --> 00:50:58,150 where these air very large , 1185 00:50:58,150 --> 00:51:00,270 complicated parts . And if we 1186 00:51:00,280 --> 00:51:03,380 terminated the contract by December 1187 00:51:03,380 --> 00:51:07,050 2020 we would incur almost a 1188 00:51:07,050 --> 00:51:09,380 billion dollars and affect the 1189 00:51:09,380 --> 00:51:12,590 production of the F 35 . So we made a 1190 00:51:12,590 --> 00:51:15,970 decision on a number of 1191 00:51:15,970 --> 00:51:18,680 parts that it was smarter in terms off 1192 00:51:18,760 --> 00:51:21,210 taxpayer dollars and warfighter 1193 00:51:21,210 --> 00:51:24,210 readiness toe . Let those contracts 1194 00:51:24,210 --> 00:51:27,310 play out in Turkey s O that we wouldn't 1195 00:51:27,310 --> 00:51:29,520 have these huge termination liability 1196 00:51:29,520 --> 00:51:32,160 costs . So we have a few of the 1197 00:51:32,160 --> 00:51:35,380 products that will go until 2022 . 1198 00:51:35,460 --> 00:51:38,450 But we have detailed information we can 1199 00:51:38,450 --> 00:51:41,160 get you on this . I know Senator 1200 00:51:41,160 --> 00:51:43,160 Lankford and I've talked about this 1201 00:51:43,160 --> 00:51:45,840 multiple times and Secretary Esper 1202 00:51:45,840 --> 00:51:49,180 actually , um , has had the same 1203 00:51:49,180 --> 00:51:51,730 conversations . I want to assure you 1204 00:51:51,730 --> 00:51:55,640 that we are balancing what the cost is 1205 00:51:55,650 --> 00:51:58,210 to remove the supply chain from Turkey 1206 00:51:58,220 --> 00:52:00,920 and what impact it would have on 1207 00:52:00,920 --> 00:52:03,310 warfighter readiness not only in the US , 1208 00:52:03,310 --> 00:52:06,260 but our international partners . And 1209 00:52:06,270 --> 00:52:09,420 we're well on our way , and the bulk of 1210 00:52:09,420 --> 00:52:11,642 the parts will be out by the end of the 1211 00:52:11,642 --> 00:52:13,587 year . So does that mean we're not 1212 00:52:13,587 --> 00:52:17,570 concerned about that ? Compromising the 1213 00:52:18,350 --> 00:52:21,710 technology of the F 35 being ableto 1214 00:52:21,720 --> 00:52:24,110 have that shared with Russia and other 1215 00:52:24,110 --> 00:52:27,410 adversaries ? We have worked very , 1216 00:52:27,410 --> 00:52:30,650 very closely with Turkey on any 1217 00:52:30,650 --> 00:52:34,600 sensitive information and at this point , 1218 00:52:34,610 --> 00:52:37,580 we are confident with where we are . 1219 00:52:39,550 --> 00:52:41,828 Can you explain that a little bit more ? 1220 00:52:41,828 --> 00:52:43,606 What does that mean when we say 1221 00:52:43,606 --> 00:52:45,550 confident , perhaps in a different 1222 00:52:45,550 --> 00:52:47,883 setting ? We could talk about that . Mr . 1223 00:52:47,883 --> 00:52:50,106 Chairman , I think that would be a good 1224 00:52:50,106 --> 00:52:52,272 topic for another hearing . Perhaps in 1225 00:52:52,272 --> 00:52:54,439 a classified setting . I agree . Thank 1226 00:52:54,439 --> 00:52:56,661 you . Thank you , Senator Shaheen . And 1227 00:52:56,661 --> 00:52:58,883 I hope the Pentagon kind of longer term 1228 00:52:58,883 --> 00:53:00,772 lessons learned on this is , uh , 1229 00:53:00,850 --> 00:53:03,072 making sure we don't have to go through 1230 00:53:03,072 --> 00:53:05,570 this again with allies and turkeys and 1231 00:53:05,570 --> 00:53:09,260 important ally . But we can't . We 1232 00:53:09,260 --> 00:53:11,640 can't be reliant on an ally that all of 1233 00:53:11,640 --> 00:53:14,480 a sudden starts Thio 1234 00:53:16,550 --> 00:53:20,450 be very focused on cooperation with one 1235 00:53:20,450 --> 00:53:22,617 of our biggest strategic adversaries . 1236 00:53:22,617 --> 00:53:24,506 So it's I think it's an important 1237 00:53:24,506 --> 00:53:26,672 lesson for the Pentagon , kind of writ 1238 00:53:26,672 --> 00:53:28,894 large going forward . I wanna turn back 1239 00:53:28,894 --> 00:53:30,839 to the issue of strategic critical 1240 00:53:30,839 --> 00:53:33,180 Minerals and Madam Secretary . You 1241 00:53:33,180 --> 00:53:35,680 talked about authorities and funding . 1242 00:53:36,450 --> 00:53:38,561 You know , the one issue that I think 1243 00:53:38,561 --> 00:53:40,672 is a good example , and I want to get 1244 00:53:40,672 --> 00:53:43,460 your opinion on it . In the early 19 1245 00:53:43,460 --> 00:53:46,460 seventies , after the first Arab oil 1246 00:53:46,460 --> 00:53:48,940 embargo , the United States , under US 1247 00:53:48,940 --> 00:53:51,960 leadership , with all our allies at the 1248 00:53:51,960 --> 00:53:54,071 O , E , C , D . And others set up the 1249 00:53:54,071 --> 00:53:57,850 International Energy Agency . And um ah , 1250 00:53:57,850 --> 00:54:00,170 key element of the IAEA is the 1251 00:54:00,170 --> 00:54:03,990 strategic stockpiling of petroleum that 1252 00:54:03,990 --> 00:54:06,046 we now do in the United States , but 1253 00:54:06,046 --> 00:54:08,910 all of our OECD allies du that in 1254 00:54:08,910 --> 00:54:10,910 coordination with the International 1255 00:54:10,910 --> 00:54:14,200 Energy Agency and , UM , obviously that 1256 00:54:14,200 --> 00:54:16,440 took an act of Congress to set up the 1257 00:54:16,440 --> 00:54:20,130 Strategic Petroleum Reserve . But I 1258 00:54:20,130 --> 00:54:22,297 think that most people would recognize 1259 00:54:22,297 --> 00:54:24,297 it's been a bipartisan success over 1260 00:54:24,297 --> 00:54:26,950 decades . How does that Strategic 1261 00:54:26,950 --> 00:54:29,270 Petroleum Reserve differ from the 1262 00:54:29,270 --> 00:54:32,350 national defense stockpile ? 1263 00:54:33,040 --> 00:54:34,818 And should the national defense 1264 00:54:34,818 --> 00:54:38,730 stockpile be expanded to take on a role 1265 00:54:38,730 --> 00:54:41,820 similar to the Strategic Petroleum 1266 00:54:41,820 --> 00:54:44,160 Reserve ? Would you need you mentioned 1267 00:54:44,170 --> 00:54:46,970 authorities or funding ? Is there a 1268 00:54:46,970 --> 00:54:49,081 pathway to make that happen ? And let 1269 00:54:49,081 --> 00:54:51,950 me just mention that would , of course , 1270 00:54:51,950 --> 00:54:54,460 provides security but also markets 1271 00:54:54,460 --> 00:54:56,950 certainty . I mentioned earlier that 1272 00:54:56,950 --> 00:55:00,500 whenever there's a mine or processing 1273 00:55:00,500 --> 00:55:02,667 facility not just in the United States 1274 00:55:02,667 --> 00:55:04,833 but around the world , that looks like 1275 00:55:04,833 --> 00:55:07,880 it's gonna make progress on the supply 1276 00:55:07,880 --> 00:55:09,936 of strategic critical minerals . The 1277 00:55:09,936 --> 00:55:11,880 Chinese have actually aggressively 1278 00:55:12,140 --> 00:55:16,000 worked to shut 1279 00:55:16,000 --> 00:55:18,010 that down by flooding international 1280 00:55:18,010 --> 00:55:20,720 markets , so this is an important issue 1281 00:55:20,720 --> 00:55:22,553 for national security . Economic 1282 00:55:22,553 --> 00:55:24,831 security ? What's your thought on that ? 1283 00:55:24,831 --> 00:55:27,660 And how could we implement something 1284 00:55:27,660 --> 00:55:29,827 like that ? Where are we already doing 1285 00:55:29,827 --> 00:55:31,938 it ? Do you have the authorities with 1286 00:55:31,938 --> 00:55:34,520 the National Defense Stockpot ? It is 1287 00:55:34,520 --> 00:55:37,100 clearly known that thes rare Earth 1288 00:55:37,100 --> 00:55:40,000 minerals are very important for many 1289 00:55:40,010 --> 00:55:42,530 applications . Often we in the 1290 00:55:42,530 --> 00:55:44,940 Department of Defense have the power to 1291 00:55:44,940 --> 00:55:48,740 convene and the ability to invest some 1292 00:55:48,740 --> 00:55:51,740 money to start on an effort that we 1293 00:55:51,740 --> 00:55:54,073 think is critical for national security . 1294 00:55:54,073 --> 00:55:56,073 I would assert that we're doing the 1295 00:55:56,073 --> 00:55:58,240 same thing from microelectronics right 1296 00:55:58,240 --> 00:56:00,550 now . So we are on a trajectory to 1297 00:56:00,560 --> 00:56:03,760 increase our national defense stockpile 1298 00:56:03,760 --> 00:56:06,670 relative to rare Earth minerals , the 1299 00:56:06,670 --> 00:56:08,910 silver lining of Cove . It has been 1300 00:56:08,920 --> 00:56:10,820 that I think most Americans now 1301 00:56:10,830 --> 00:56:13,340 understand the importance of having 1302 00:56:13,340 --> 00:56:16,820 domestic supplies . We could certainly , 1303 00:56:16,820 --> 00:56:19,340 especially under the auspices of the EO 1304 00:56:19,340 --> 00:56:21,880 that just came out yesterday , work 1305 00:56:21,880 --> 00:56:24,047 with the inter agency because there is 1306 00:56:24,047 --> 00:56:26,430 already a lot of work going on toe . 1307 00:56:26,430 --> 00:56:29,040 Look at expanding the national defense 1308 00:56:29,040 --> 00:56:32,000 stockpile to include Mawr rare earths , 1309 00:56:32,000 --> 00:56:34,070 and to look at that as a national 1310 00:56:34,070 --> 00:56:36,370 resource . But that would how do we 1311 00:56:36,370 --> 00:56:39,070 make that happen ? And do you do you ? 1312 00:56:39,070 --> 00:56:41,450 Can you do that ? Um , do you need 1313 00:56:41,460 --> 00:56:43,682 Congress's ? Would it be better to have 1314 00:56:43,682 --> 00:56:45,904 Congress do that ? Obviously , Congress 1315 00:56:45,904 --> 00:56:48,127 played a huge role in the setting up of 1316 00:56:48,127 --> 00:56:50,182 the Strategic Petroleum Reserve . We 1317 00:56:50,182 --> 00:56:53,740 really need to get on this . Spro with 1318 00:56:53,740 --> 00:56:56,890 the energy sector is a great kind of 1319 00:56:56,900 --> 00:56:59,630 analogy for strategic critical minerals . 1320 00:56:59,630 --> 00:57:02,300 What ? What do you need from us ? I 1321 00:57:02,300 --> 00:57:04,680 would like to look into that , to give 1322 00:57:04,680 --> 00:57:07,080 you specifics , to see what authorities 1323 00:57:07,080 --> 00:57:08,802 that obviously would take some 1324 00:57:08,802 --> 00:57:10,913 authorities and some appropriations . 1325 00:57:10,913 --> 00:57:13,220 Um , to do that . But I would like to 1326 00:57:13,220 --> 00:57:16,810 take that on and get back to you within 1327 00:57:16,810 --> 00:57:18,977 a month with I think we could give you 1328 00:57:18,977 --> 00:57:21,254 a fairly detailed plan on that . Great . 1329 00:57:21,254 --> 00:57:23,310 Thank you . Let me turn to the issue 1330 00:57:23,310 --> 00:57:25,532 and you raise it . And I appreciate you 1331 00:57:25,532 --> 00:57:27,754 raising it in your opening statement as 1332 00:57:27,754 --> 00:57:29,810 it relates to the defense industrial 1333 00:57:29,810 --> 00:57:32,390 base in small businesses . So my states 1334 00:57:32,390 --> 00:57:35,650 economy , we're always looking to 1335 00:57:35,650 --> 00:57:37,900 diversify our economy . We need to do 1336 00:57:37,900 --> 00:57:39,900 that . Maurin Alaska . We certainly 1337 00:57:39,900 --> 00:57:42,430 have natural resource is like oil and 1338 00:57:42,430 --> 00:57:45,340 gas and minerals , but diversifying our 1339 00:57:45,340 --> 00:57:47,396 economy has that been important . In 1340 00:57:47,396 --> 00:57:49,618 the last couple years , we've had a few 1341 00:57:49,618 --> 00:57:52,070 small businesses that have had 1342 00:57:52,070 --> 00:57:54,014 contracts . For example , with the 1343 00:57:54,014 --> 00:57:56,110 department of the Navy , I won't 1344 00:57:56,110 --> 00:57:58,690 mention the company , but one , a very 1345 00:57:58,690 --> 00:58:01,830 sophisticated machine in contract with 1346 00:58:01,830 --> 00:58:04,090 the Navy . But at one point , Navy 1347 00:58:04,090 --> 00:58:07,180 contracting officers told this company , 1348 00:58:07,180 --> 00:58:09,236 Hey , if you really want to keep the 1349 00:58:09,236 --> 00:58:11,013 relationship going and you have 1350 00:58:11,013 --> 00:58:13,236 opportunities , you might want to think 1351 00:58:13,236 --> 00:58:15,580 about moving your manufacturing base to 1352 00:58:15,580 --> 00:58:19,450 the lower 48 . So I heard about this , 1353 00:58:19,920 --> 00:58:22,142 made a phone call , the secretary , the 1354 00:58:22,142 --> 00:58:24,476 Navy , saying , You gotta be kidding me , 1355 00:58:24,476 --> 00:58:26,642 right ? You gotta be kidding me . What 1356 00:58:26,642 --> 00:58:28,864 the hell ? That's not how we're working 1357 00:58:28,864 --> 00:58:30,698 to diversify small businesses in 1358 00:58:30,698 --> 00:58:32,809 America , particularly in Alaska . So 1359 00:58:32,809 --> 00:58:35,170 what are we doing to encourage ? Not 1360 00:58:35,170 --> 00:58:37,226 just in , you know , the places that 1361 00:58:37,226 --> 00:58:39,900 have a lot of contractors ? Um , you 1362 00:58:39,900 --> 00:58:41,956 know , like in the lower 48 near the 1363 00:58:41,956 --> 00:58:44,178 big bases and the big contractors . But 1364 00:58:44,178 --> 00:58:47,960 in Mawr , frontier oriented states like 1365 00:58:47,960 --> 00:58:50,400 mine . What are we doing to help those 1366 00:58:50,400 --> 00:58:52,680 kind of businesses ? And my goodness , 1367 00:58:52,690 --> 00:58:54,746 I certainly hope you consent through 1368 00:58:54,746 --> 00:58:57,050 the chain of command of the Pentagon . 1369 00:58:57,420 --> 00:58:59,476 That kind of activity by contracting 1370 00:58:59,476 --> 00:59:02,970 officer is completely inappropriate . 1371 00:59:02,980 --> 00:59:04,870 What are we doing to help small 1372 00:59:04,870 --> 00:59:08,020 businesses in states like mine plug 1373 00:59:08,020 --> 00:59:09,860 into the industrial base and the 1374 00:59:09,860 --> 00:59:12,890 opportunities that affords , uh , the 1375 00:59:12,890 --> 00:59:15,112 work you're doing . So , first of all , 1376 00:59:15,112 --> 00:59:17,334 I agree That is totally inappropriate . 1377 00:59:17,334 --> 00:59:19,612 It's the first time I've heard of this , 1378 00:59:19,612 --> 00:59:22,060 but what we're doing is underneath of 1379 00:59:22,070 --> 00:59:24,190 industrial policy and acquisition and 1380 00:59:24,190 --> 00:59:27,030 sustainment . We have a small business 1381 00:59:27,040 --> 00:59:30,750 office . Amy Murray runs that she is 1382 00:59:30,750 --> 00:59:33,200 highly talented and highly motivated , 1383 00:59:33,420 --> 00:59:35,531 and she again is reaching out through 1384 00:59:35,531 --> 00:59:38,370 industry associations , um , toe work 1385 00:59:38,370 --> 00:59:40,760 with small businesses . Connect them 1386 00:59:40,760 --> 00:59:43,630 with the right groups inside of D o . D . 1387 00:59:43,640 --> 00:59:45,690 As well as the other government 1388 00:59:45,700 --> 00:59:47,830 agencies and organizations that can 1389 00:59:47,830 --> 00:59:50,610 support them . So , first of all , what 1390 00:59:50,610 --> 00:59:53,480 I would ask is again , um , for you to 1391 00:59:53,480 --> 00:59:55,840 pass along these welcome mats , if you 1392 00:59:55,840 --> 00:59:57,951 will , to your constituents , so they 1393 00:59:57,951 --> 01:00:00,170 know how to reach out for us . But we 1394 01:00:00,180 --> 01:00:02,860 are conducting Webinars on a very 1395 01:00:02,860 --> 01:00:05,770 frequent basis . We are talking with 1396 01:00:05,770 --> 01:00:08,750 the services , So if we hear about 1397 01:00:08,760 --> 01:00:11,530 capabilities , we can then match those 1398 01:00:11,530 --> 01:00:14,400 capabilities with others from a top 1399 01:00:14,400 --> 01:00:18,320 down point of view with money . We have 1400 01:00:18,330 --> 01:00:21,260 been authorized and appropriated from 1401 01:00:21,260 --> 01:00:24,160 Congress for D p . A title three or 1402 01:00:24,170 --> 01:00:27,560 anything else . We are putting enormous 1403 01:00:27,560 --> 01:00:30,270 pressure on the primes to be very 1404 01:00:30,270 --> 01:00:32,940 transparent with the flow down off 1405 01:00:32,940 --> 01:00:36,260 those funds to the sub tier companies 1406 01:00:36,270 --> 01:00:38,900 to make sure they benefit from that . 1407 01:00:38,910 --> 01:00:41,060 Great . And is it Is it one of your 1408 01:00:41,060 --> 01:00:43,116 goals to kind of spread the wealth ? 1409 01:00:43,116 --> 01:00:45,660 Obviously , you know , I'm not calling 1410 01:00:45,660 --> 01:00:47,882 out my ranking member , but places like 1411 01:00:47,882 --> 01:00:49,993 Virginia , given their big industrial 1412 01:00:49,993 --> 01:00:52,160 base here in the Navy and everything , 1413 01:00:52,160 --> 01:00:54,493 there's probably a lot of opportunities . 1414 01:00:54,493 --> 01:00:56,790 But thio to spread the wealth to parts 1415 01:00:56,790 --> 01:00:58,901 of America that , you know , my state 1416 01:00:58,901 --> 01:01:00,901 has more veterans per capita in the 1417 01:01:00,901 --> 01:01:02,957 state in the country . So we're very 1418 01:01:02,957 --> 01:01:05,123 patriotic . We love our military , but 1419 01:01:05,123 --> 01:01:07,234 toe have opportunities in places that 1420 01:01:07,234 --> 01:01:09,346 maybe don't come front of mine to the 1421 01:01:09,346 --> 01:01:11,512 Pentagon , like in Alaska , toe spread 1422 01:01:11,512 --> 01:01:13,679 the wealth here for opportunities . Is 1423 01:01:13,679 --> 01:01:15,790 that part of your goal ? Absolutely . 1424 01:01:15,790 --> 01:01:17,790 We support geographical diversity , 1425 01:01:17,790 --> 01:01:19,790 just like all diversity . So I will 1426 01:01:19,790 --> 01:01:21,957 commit to you . Um , by the end of the 1427 01:01:21,957 --> 01:01:23,957 year , one of our industrial policy 1428 01:01:23,957 --> 01:01:26,179 team will visit the state of Alaska and 1429 01:01:26,179 --> 01:01:28,012 meet with your small business is 1430 01:01:28,012 --> 01:01:30,123 perfect . Thank you . I think Senator 1431 01:01:30,123 --> 01:01:33,270 Duck Worth is on the line , so reaching 1432 01:01:33,270 --> 01:01:36,530 out ? Yes , I am . Yes , I am Mr True . 1433 01:01:37,210 --> 01:01:40,000 Good morning . Thank you for for having 1434 01:01:40,000 --> 01:01:41,940 this hearing under Secretary Lord 1435 01:01:41,950 --> 01:01:44,172 thinking through the challenges of pure 1436 01:01:44,172 --> 01:01:46,960 competition and conflict , I am very 1437 01:01:46,960 --> 01:01:49,127 concerned about our ability to sustain 1438 01:01:49,127 --> 01:01:51,016 our troops while they execute the 1439 01:01:51,016 --> 01:01:53,349 vision of warfighting laid out in the N . 1440 01:01:53,349 --> 01:01:55,516 D . S . In particular , I'm focused on 1441 01:01:55,516 --> 01:01:57,330 the Indo Pacific region , which 1442 01:01:57,330 --> 01:02:00,150 presents unique challenges . Our 1443 01:02:00,150 --> 01:02:02,261 services plan to operate in smaller , 1444 01:02:02,261 --> 01:02:04,317 more district distributed formations 1445 01:02:04,317 --> 01:02:06,206 across a large and geopolitically 1446 01:02:06,206 --> 01:02:08,510 complex region , perhaps with limited 1447 01:02:08,510 --> 01:02:10,750 communications . It's clear that endo 1448 01:02:10,750 --> 01:02:13,730 pay com de L A in the Pacific and the 1449 01:02:13,730 --> 01:02:15,897 military services will have to rethink 1450 01:02:15,897 --> 01:02:17,897 the way they sustain warfighters in 1451 01:02:17,897 --> 01:02:20,500 theater not only with critical food , 1452 01:02:20,500 --> 01:02:22,278 few parts and other maintenance 1453 01:02:22,278 --> 01:02:24,520 equipment . Um , uh , These all will 1454 01:02:24,520 --> 01:02:26,464 potentially have to travel greater 1455 01:02:26,464 --> 01:02:28,409 distances if they can't be sourced 1456 01:02:28,409 --> 01:02:30,631 locally . But higher headquarters might 1457 01:02:30,631 --> 01:02:32,687 not receive the sort of feedback and 1458 01:02:32,687 --> 01:02:34,464 visibility on supply levels and 1459 01:02:34,464 --> 01:02:36,242 efficiencies that our logistics 1460 01:02:36,242 --> 01:02:38,187 enterprise has grown accustomed to 1461 01:02:38,187 --> 01:02:40,353 operating in in the last several years 1462 01:02:40,353 --> 01:02:42,187 under Secretary Lord . From your 1463 01:02:42,187 --> 01:02:44,131 perspective , what are the biggest 1464 01:02:44,131 --> 01:02:46,298 challenges to ensuring that the supply 1465 01:02:46,298 --> 01:02:48,187 chain can respond to the needs of 1466 01:02:48,187 --> 01:02:50,353 distributed warfighters in the Pacific 1467 01:02:50,353 --> 01:02:53,210 region ? So senator , Um , this is a 1468 01:02:53,210 --> 01:02:55,940 key area of focus for the department . 1469 01:02:55,950 --> 01:02:59,050 In fact , every Monday , senior 1470 01:02:59,050 --> 01:03:01,940 leadership , military and civilian get 1471 01:03:01,940 --> 01:03:04,270 together for a national defense 1472 01:03:04,270 --> 01:03:07,420 strategy implementation meeting . One 1473 01:03:07,420 --> 01:03:10,120 of the topics we're focusing on here in 1474 01:03:10,120 --> 01:03:13,570 the near term are contested logistics 1475 01:03:13,570 --> 01:03:16,720 for that very reason with dynamic force 1476 01:03:16,720 --> 01:03:19,570 employment . Um , this becomes much 1477 01:03:19,570 --> 01:03:21,626 more of a challenge . So I would say 1478 01:03:21,626 --> 01:03:24,560 the number one issue is planning to 1479 01:03:24,570 --> 01:03:26,820 understand what we're gonna dio and 1480 01:03:26,820 --> 01:03:29,330 then to communications . And we're 1481 01:03:29,330 --> 01:03:31,650 looking at our distribution network at 1482 01:03:31,650 --> 01:03:34,570 our supply network to make sure that we 1483 01:03:34,570 --> 01:03:37,600 are there in the time of need . So we 1484 01:03:37,600 --> 01:03:39,890 obviously have warfighting plans . We 1485 01:03:39,890 --> 01:03:42,810 have very detailed logistical plans to 1486 01:03:42,810 --> 01:03:45,310 go along with that . And just as we're 1487 01:03:45,310 --> 01:03:47,980 sending aircraft carriers out with 1488 01:03:47,980 --> 01:03:50,890 little notice and perhaps surprising , 1489 01:03:50,890 --> 01:03:53,270 some were sending aircraft places , 1490 01:03:53,270 --> 01:03:55,760 surprising others . We have a lot of 1491 01:03:55,770 --> 01:03:57,810 work going on and logistics that we 1492 01:03:57,810 --> 01:04:00,250 don't talk about but to be there for 1493 01:04:00,250 --> 01:04:02,306 the very reason you state to support 1494 01:04:02,306 --> 01:04:04,583 the war fighter wherever they might be . 1495 01:04:04,690 --> 01:04:06,857 Are there any particular procedures or 1496 01:04:06,857 --> 01:04:09,023 programs that we should be considering 1497 01:04:09,023 --> 01:04:11,079 to address these challenges ? I will 1498 01:04:11,079 --> 01:04:14,430 tell you that's a very , very 1499 01:04:14,440 --> 01:04:17,980 important question and offer . I would 1500 01:04:17,990 --> 01:04:20,680 like to take that for the record and 1501 01:04:20,680 --> 01:04:22,847 come back to you in the next couple of 1502 01:04:22,847 --> 01:04:25,069 weeks because we are actually convening 1503 01:04:25,069 --> 01:04:28,050 some very , um , critical meetings on 1504 01:04:28,050 --> 01:04:30,250 this topic literally in the next week 1505 01:04:30,250 --> 01:04:32,750 or two . Wonderful . I would love to be 1506 01:04:32,750 --> 01:04:35,580 read in on the following onto those 1507 01:04:35,580 --> 01:04:38,840 meetings , please . Very good , thank 1508 01:04:38,840 --> 01:04:40,618 you . And I know the department 1509 01:04:40,618 --> 01:04:42,729 understands the risk , As you said of 1510 01:04:42,729 --> 01:04:44,840 our supply chain posed by competitive 1511 01:04:44,840 --> 01:04:47,062 nations and potential adversaries . I'm 1512 01:04:47,062 --> 01:04:49,284 pleased to hear that the department has 1513 01:04:49,284 --> 01:04:49,130 been taking more offensive steps to 1514 01:04:49,130 --> 01:04:51,160 shore up our supply chain from a 1515 01:04:51,160 --> 01:04:53,160 cringing domestic production of key 1516 01:04:53,160 --> 01:04:54,993 products and systems . As you've 1517 01:04:54,993 --> 01:04:56,604 already mentioned , reducing 1518 01:04:56,604 --> 01:04:58,716 international independence to working 1519 01:04:58,716 --> 01:05:00,771 with allies and friendly partners to 1520 01:05:00,771 --> 01:05:02,827 mitigate risk to that supply chain . 1521 01:05:02,827 --> 01:05:04,827 These and other efforts , I think , 1522 01:05:04,827 --> 01:05:07,160 really display good foresight . However , 1523 01:05:07,160 --> 01:05:09,160 I am concerned about our ability to 1524 01:05:09,160 --> 01:05:11,160 actually deliver sustainment to our 1525 01:05:11,160 --> 01:05:13,271 troops in appear conflict . While the 1526 01:05:13,271 --> 01:05:14,993 Indo Pacific region poses some 1527 01:05:14,993 --> 01:05:17,160 particular challenges , I believe that 1528 01:05:17,160 --> 01:05:17,110 our logistics enterprise needs to be 1529 01:05:17,110 --> 01:05:19,110 prepared to operate in a contested 1530 01:05:19,120 --> 01:05:21,560 environment on a global scale . Are we 1531 01:05:21,560 --> 01:05:23,671 prepared to deliver necessary weapons 1532 01:05:23,671 --> 01:05:25,893 and sustainment toe abroad footprint of 1533 01:05:25,893 --> 01:05:28,004 forward based troops around the world 1534 01:05:28,004 --> 01:05:30,116 within a contestant environment . And 1535 01:05:30,116 --> 01:05:32,004 how does our supply chain need to 1536 01:05:32,004 --> 01:05:34,227 evolve to meet these challenges ? We're 1537 01:05:34,227 --> 01:05:36,390 developing those plans right now and 1538 01:05:36,390 --> 01:05:38,610 perhaps in a different setting . In a 1539 01:05:38,610 --> 01:05:40,777 classified level , we could talk about 1540 01:05:40,777 --> 01:05:42,999 that a little bit more . Thank you , Mr 1541 01:05:42,999 --> 01:05:45,210 Chairman . I would love Thio have that 1542 01:05:45,210 --> 01:05:47,321 hearing in a classified environment , 1543 01:05:47,321 --> 01:05:49,321 if you would consider it . Yeah , I 1544 01:05:49,321 --> 01:05:51,266 think that's a growing consensus , 1545 01:05:51,266 --> 01:05:53,488 Senator Duck worth on this hearing that 1546 01:05:53,488 --> 01:05:55,960 we that we will do that . So thanks for 1547 01:05:55,970 --> 01:05:58,170 weighing in on that . I'm gonna have , 1548 01:05:58,170 --> 01:06:01,930 uh , 11 more just quick set of 1549 01:06:01,930 --> 01:06:03,763 questions . And I think one more 1550 01:06:03,763 --> 01:06:06,430 senators trying toe jump in and if we 1551 01:06:06,440 --> 01:06:08,551 get him on time , we'll do that . And 1552 01:06:08,551 --> 01:06:10,551 then otherwise , we'll wrap up this 1553 01:06:10,551 --> 01:06:13,530 hearing . Um , appreciate again , Madam 1554 01:06:13,530 --> 01:06:15,910 Secretary , your hard work on a lot of 1555 01:06:15,910 --> 01:06:17,910 these issues . I want to talk about 1556 01:06:17,910 --> 01:06:20,890 kind of the more directly related to 1557 01:06:20,890 --> 01:06:23,120 the issues of co vid and how we're 1558 01:06:23,120 --> 01:06:25,500 trying to get through this , um , 1559 01:06:26,160 --> 01:06:28,750 pandemic and the important role that 1560 01:06:29,470 --> 01:06:31,880 DNA and others are playing in this 1561 01:06:31,880 --> 01:06:34,290 regard . Let me ask two questions . One 1562 01:06:35,180 --> 01:06:37,347 one and I don't know if you've thought 1563 01:06:37,347 --> 01:06:39,513 about it , but , you know , one of the 1564 01:06:39,513 --> 01:06:41,513 things that I've heard back at home 1565 01:06:42,060 --> 01:06:45,400 with regard to testing is thes kind of 1566 01:06:46,080 --> 01:06:48,830 continued challenges with the re agent 1567 01:06:48,970 --> 01:06:52,310 supply . Has there been any , um , 1568 01:06:52,680 --> 01:06:56,490 focus on you or others taking 1569 01:06:56,490 --> 01:06:59,000 a more aggressive , uh , 1570 01:07:00,560 --> 01:07:04,110 approach with regard to , uh , the 1571 01:07:04,110 --> 01:07:07,210 industrial production of that critical 1572 01:07:07,310 --> 01:07:11,300 aspect of testing ? That's one question 1573 01:07:11,310 --> 01:07:14,860 in the second , um , with regard 1574 01:07:14,870 --> 01:07:18,110 to the possibility that hundreds of 1575 01:07:18,110 --> 01:07:20,350 millions of vaccines will be needed to 1576 01:07:20,350 --> 01:07:23,700 be distributed to the U . S population 1577 01:07:24,880 --> 01:07:27,100 in the coming months and next year , 1578 01:07:27,680 --> 01:07:30,720 uh , our government is going to need a 1579 01:07:30,720 --> 01:07:32,831 massive coordinated distribution plan 1580 01:07:32,831 --> 01:07:36,160 to get vaccines from assembly lines to 1581 01:07:36,160 --> 01:07:39,300 American citizens . What is d o d doing 1582 01:07:39,300 --> 01:07:42,090 to ensure that they can help distribute 1583 01:07:43,240 --> 01:07:45,407 vaccines and hopefully we'll see those 1584 01:07:45,407 --> 01:07:48,290 soon that are safe and ready that are 1585 01:07:48,290 --> 01:07:50,190 likely to be available . But 1586 01:07:50,200 --> 01:07:53,010 logistically , we have a big country . 1587 01:07:53,680 --> 01:07:56,390 Um , what are you doing on that ? 1588 01:07:56,400 --> 01:07:58,289 Because I think the Department of 1589 01:07:58,289 --> 01:08:00,660 Defense come play an important role in 1590 01:08:00,660 --> 01:08:03,210 that regard . So testing re agent 1591 01:08:03,210 --> 01:08:05,520 vaccine work are my two questions . 1592 01:08:05,530 --> 01:08:09,240 Testing re agents is an area that We're 1593 01:08:09,240 --> 01:08:13,190 working with HHS on industry expansion 1594 01:08:13,190 --> 01:08:16,830 and throughput . We are investing 1595 01:08:16,830 --> 01:08:19,990 cares act money , using 1596 01:08:21,370 --> 01:08:24,810 all the input from a team that we're 1597 01:08:24,810 --> 01:08:28,240 sitting with at HHS to prioritize . We 1598 01:08:28,240 --> 01:08:30,407 work with Asper , Doctor Cad . Look at 1599 01:08:30,407 --> 01:08:33,290 HHS , and then we go and place those 1600 01:08:33,300 --> 01:08:36,530 orders both for industry expansion as 1601 01:08:36,530 --> 01:08:39,090 well as assisted acquisition for the 1602 01:08:39,090 --> 01:08:42,790 production of those . And I can take a 1603 01:08:42,790 --> 01:08:44,846 question for the record here and get 1604 01:08:44,846 --> 01:08:47,230 back to you with some specifics around 1605 01:08:47,230 --> 01:08:50,100 that . So there is a lot of momentum 1606 01:08:50,110 --> 01:08:53,860 right now in that area and quite a few 1607 01:08:53,860 --> 01:08:56,400 awards that are being made on the 1608 01:08:56,400 --> 01:08:58,580 second question in terms of 1609 01:08:58,590 --> 01:09:01,960 distribution off vaccine . As you know , 1610 01:09:01,960 --> 01:09:04,550 General Purna , um , is working at 1611 01:09:04,550 --> 01:09:07,390 senior levels of operation warp speed 1612 01:09:07,400 --> 01:09:10,040 that is looking at that distribution . 1613 01:09:10,050 --> 01:09:13,260 We have many military 1614 01:09:13,270 --> 01:09:16,990 individuals detailed to that effort . 1615 01:09:17,070 --> 01:09:20,640 So operation warp speed is leveraging 1616 01:09:20,650 --> 01:09:23,700 our military know how an infrastructure , 1617 01:09:23,770 --> 01:09:26,170 the White House right now is deciding 1618 01:09:26,180 --> 01:09:29,560 exactly how that distribution plan will 1619 01:09:29,560 --> 01:09:31,730 work . But we stand ready to support 1620 01:09:31,730 --> 01:09:34,510 that . Thank you . I believe Senator 1621 01:09:34,510 --> 01:09:37,100 Jones is on the line . Senator Jones . 1622 01:09:39,070 --> 01:09:41,237 Thank you , Mr Chairman . I appreciate 1623 01:09:41,237 --> 01:09:43,292 the opportunity here . Thank you for 1624 01:09:43,292 --> 01:09:46,150 being here . Uh , Secretary Lord , uh , 1625 01:09:46,160 --> 01:09:48,280 the Chinese Communist Party strategy 1626 01:09:48,280 --> 01:09:50,710 that is known as the military Civil 1627 01:09:50,710 --> 01:09:53,530 fusion harnesses output of China's 1628 01:09:53,530 --> 01:09:55,810 civilian economy for the benefit of 1629 01:09:55,810 --> 01:09:59,480 defense . Do you have any concerns that 1630 01:09:59,490 --> 01:10:01,350 the Chinese are attempting to 1631 01:10:01,360 --> 01:10:03,527 infiltrate US companies throughout the 1632 01:10:03,527 --> 01:10:05,880 supply chain , both with employees and 1633 01:10:05,880 --> 01:10:07,602 investors ? And we've seen any 1634 01:10:07,602 --> 01:10:10,650 instances of that with our defense 1635 01:10:10,650 --> 01:10:13,960 related companies . I am absolutely 1636 01:10:13,960 --> 01:10:17,340 concerned about Chinese infiltration at 1637 01:10:17,350 --> 01:10:20,540 every sector of the U . S . Economy . 1638 01:10:20,550 --> 01:10:24,540 And in fact , um , we spend a lot of 1639 01:10:24,540 --> 01:10:28,370 our time dealing with cybersecurity in 1640 01:10:28,370 --> 01:10:31,010 large part due to China . That's why we 1641 01:10:31,010 --> 01:10:33,980 just rolled out R C M M C certification . 1642 01:10:34,060 --> 01:10:36,520 It's why we look at cyber hardening of 1643 01:10:36,520 --> 01:10:39,580 our weapons systems all the time . We 1644 01:10:39,580 --> 01:10:41,469 worked very , very close with the 1645 01:10:41,469 --> 01:10:43,524 defense industrial base to make sure 1646 01:10:43,524 --> 01:10:45,930 they understand the threats . We 1647 01:10:45,930 --> 01:10:49,230 partner with ESA and Cyber com 1648 01:10:49,240 --> 01:10:52,500 and with our industrial base to inform 1649 01:10:52,500 --> 01:10:55,740 them of threats . There's every day a 1650 01:10:55,740 --> 01:10:57,790 partnership there . So I would say 1651 01:10:57,790 --> 01:10:59,290 there's an extremely close 1652 01:10:59,290 --> 01:11:02,460 collaboration , and we're not on Lee 1653 01:11:02,460 --> 01:11:05,030 playing defense as we used to hear . 1654 01:11:05,040 --> 01:11:07,318 We're playing a bit of offense is well , 1655 01:11:07,318 --> 01:11:09,100 and this is only getting mawr 1656 01:11:09,110 --> 01:11:12,310 aggressive . We work closely d o d with 1657 01:11:12,310 --> 01:11:15,480 the interagency . With authorities like 1658 01:11:15,490 --> 01:11:18,550 EPA and others . We're making 1659 01:11:18,550 --> 01:11:21,880 sure that we neither have 1660 01:11:21,880 --> 01:11:24,980 technology compromise , nor we have 1661 01:11:24,990 --> 01:11:27,290 individuals or human . Um , that's 1662 01:11:27,300 --> 01:11:29,360 export trading critical national 1663 01:11:29,360 --> 01:11:32,040 security data . Great . Well , thank 1664 01:11:32,040 --> 01:11:34,151 you very much . Do you have any ? Any 1665 01:11:34,151 --> 01:11:36,151 specific ? I really appreciate that 1666 01:11:36,151 --> 01:11:38,318 Answer , by the way . And I appreciate 1667 01:11:38,318 --> 01:11:40,484 all that's being done atyour level and 1668 01:11:40,484 --> 01:11:42,540 across the executive branch . Do you 1669 01:11:42,540 --> 01:11:44,762 have any specific recommendations where 1670 01:11:44,762 --> 01:11:46,873 that Congress can assistant in any of 1671 01:11:46,873 --> 01:11:50,060 those efforts ? Let me get back to you 1672 01:11:50,060 --> 01:11:53,120 with specifics . Um , I believe there 1673 01:11:53,130 --> 01:11:56,170 may well be ah , lot of this . 1674 01:11:56,180 --> 01:11:59,750 Frankly , um , is not 1675 01:11:59,760 --> 01:12:02,710 continuing to engage with these Chinese 1676 01:12:02,710 --> 01:12:05,930 companies on sensitive issues , 1677 01:12:05,940 --> 01:12:09,400 but in turn , developing 1678 01:12:09,410 --> 01:12:12,760 industrial bases here That makes us not 1679 01:12:12,760 --> 01:12:15,710 reliant on that back and forth . 1680 01:12:15,720 --> 01:12:17,609 There's quite a bit of discussion 1681 01:12:17,609 --> 01:12:20,290 within the inter agency right now about 1682 01:12:20,290 --> 01:12:23,990 constraining Chinese involvement from 1683 01:12:24,050 --> 01:12:27,810 everything from investments to specific 1684 01:12:27,810 --> 01:12:30,290 commodities . But again , I think one 1685 01:12:30,290 --> 01:12:32,600 of the areas where we could have the 1686 01:12:32,600 --> 01:12:35,810 most impact on China broadly is 1687 01:12:35,810 --> 01:12:38,640 reassuring microelectronics . And right 1688 01:12:38,640 --> 01:12:41,980 now my team is working very closely 1689 01:12:41,990 --> 01:12:45,170 across D o D as well as the interagency 1690 01:12:45,180 --> 01:12:47,600 to come up with a very specific 1691 01:12:47,610 --> 01:12:50,640 recommendation for some public private 1692 01:12:50,650 --> 01:12:53,280 partnerships in order to develop the 1693 01:12:53,280 --> 01:12:56,410 capability here domestically , we a d o 1694 01:12:56,410 --> 01:12:59,320 d , or only about 1% of the over 1695 01:12:59,330 --> 01:13:02,460 overall microelectronics market . Um , 1696 01:13:02,470 --> 01:13:05,970 however , we have some critical 1697 01:13:05,980 --> 01:13:09,840 needs and we have the technical 1698 01:13:09,850 --> 01:13:13,060 acumen , if you will , a swell as 1699 01:13:13,070 --> 01:13:14,848 perhaps the authorities and the 1700 01:13:14,848 --> 01:13:17,310 appropriations to overcome that 1701 01:13:17,310 --> 01:13:20,640 activation energy to have some trusted 1702 01:13:20,640 --> 01:13:22,870 foundries here . And then we think we 1703 01:13:22,870 --> 01:13:25,190 can work with other critical market 1704 01:13:25,190 --> 01:13:28,040 segments such as industrial controls , 1705 01:13:28,050 --> 01:13:31,900 automotive , medical , Thio have 1706 01:13:31,910 --> 01:13:34,960 just industry sustain those facilities . 1707 01:13:34,970 --> 01:13:37,470 I think , you know , playing offense 1708 01:13:37,480 --> 01:13:40,560 versus playing defense is the way we 1709 01:13:40,560 --> 01:13:42,870 need to proceed here . Great . I 1710 01:13:42,870 --> 01:13:45,090 appreciate that . I agree , and we 1711 01:13:45,090 --> 01:13:47,410 stand ready to help you in that regard . 1712 01:13:47,420 --> 01:13:49,670 Let me ask you another question . You 1713 01:13:49,680 --> 01:13:51,902 said in a press conference on September 1714 01:13:51,902 --> 01:13:54,124 the night that it might take as long as 1715 01:13:54,124 --> 01:13:56,236 six months for the defense industrial 1716 01:13:56,236 --> 01:13:59,070 based companies to receive aid that was 1717 01:13:59,070 --> 01:14:01,470 authorized in The Cares Act . Can you 1718 01:14:01,470 --> 01:14:03,600 kind of explain why that is taking so 1719 01:14:03,600 --> 01:14:05,656 long to receive these and what we're 1720 01:14:05,656 --> 01:14:08,070 what d o . D is doing to maybe expedite 1721 01:14:08,070 --> 01:14:11,190 that process . We have a 1722 01:14:11,190 --> 01:14:13,830 process where we can go out with 1723 01:14:13,830 --> 01:14:17,450 requests for proposals , get all of the 1724 01:14:17,450 --> 01:14:21,000 one time costs in , and then adjudicate 1725 01:14:21,010 --> 01:14:24,040 what we can reimburse . The issue is 1726 01:14:24,040 --> 01:14:26,096 right now . Although we have all the 1727 01:14:26,096 --> 01:14:28,540 authorities , we have no appropriations 1728 01:14:28,540 --> 01:14:30,790 to do that . So if we move forward 1729 01:14:30,790 --> 01:14:34,290 right now , we would be taking dollars 1730 01:14:34,300 --> 01:14:37,690 directly out of programs which would 1731 01:14:37,700 --> 01:14:40,750 instantaneously affect readiness and 1732 01:14:40,750 --> 01:14:43,710 then shortly affect modernization . So 1733 01:14:43,710 --> 01:14:45,710 what we're very much hoping for and 1734 01:14:45,710 --> 01:14:48,360 what we've submitted documentation for 1735 01:14:48,370 --> 01:14:52,320 is an appropriation to take care of 1736 01:14:52,330 --> 01:14:55,520 one time issues between March 15 and 1737 01:14:55,520 --> 01:14:57,960 September three , end of September , 1738 01:14:57,960 --> 01:15:00,182 whatever the accounting period would be 1739 01:15:00,182 --> 01:15:02,516 for different companies . But right now , 1740 01:15:02,516 --> 01:15:05,100 we're going to break programs and 1741 01:15:05,110 --> 01:15:08,100 affect national security if we do those 1742 01:15:08,100 --> 01:15:11,350 reimbursements out of programs . Well , 1743 01:15:11,350 --> 01:15:13,406 thank you , Secretary Lord , I would 1744 01:15:13,406 --> 01:15:15,350 note , for the record that we just 1745 01:15:15,350 --> 01:15:17,072 passed a continuing resolution 1746 01:15:17,072 --> 01:15:19,239 yesterday , and I know that that has a 1747 01:15:19,239 --> 01:15:21,294 negative impact on the Department of 1748 01:15:21,294 --> 01:15:23,517 Defense and our military . So I'm gonna 1749 01:15:23,517 --> 01:15:25,517 take that as part of that answer as 1750 01:15:25,517 --> 01:15:27,683 well that we need . That should not be 1751 01:15:27,683 --> 01:15:30,017 kicking the can down the road . Finally , 1752 01:15:30,017 --> 01:15:32,183 Mr Chairman , Thank you . I would like 1753 01:15:32,183 --> 01:15:34,294 to , uh it associate myself with some 1754 01:15:34,294 --> 01:15:36,517 of Senator Shaheen's comments about the 1755 01:15:36,517 --> 01:15:38,294 concern about gowns and will be 1756 01:15:38,294 --> 01:15:40,420 submitting a c c f r on that point . 1757 01:15:40,420 --> 01:15:42,587 Thank you , Mr Chairman , for allowing 1758 01:15:42,587 --> 01:15:44,587 me to come in . Thank you , Senator 1759 01:15:44,587 --> 01:15:46,809 Jones . And I think we're gonna wrap up 1760 01:15:46,809 --> 01:15:48,976 here , uh , with just a few comments , 1761 01:15:48,976 --> 01:15:51,198 Senator Kaine , like , toe make a few . 1762 01:15:51,198 --> 01:15:53,142 And thank you . And these comments 1763 01:15:53,142 --> 01:15:55,142 really more for the committee . But 1764 01:15:55,142 --> 01:15:57,142 testimony of Secretary Lord made me 1765 01:15:57,142 --> 01:15:59,840 think of this one . The trifle that you 1766 01:15:59,840 --> 01:16:02,380 gave us about acquisition process . You 1767 01:16:02,380 --> 01:16:04,602 have these six tenants at the top , and 1768 01:16:04,602 --> 01:16:06,770 one is empowering program managers . 1769 01:16:06,780 --> 01:16:08,820 And as you were describing defense 1770 01:16:08,820 --> 01:16:11,030 acquisition , university training of 1771 01:16:11,030 --> 01:16:13,350 program managers , acquisition 1772 01:16:13,350 --> 01:16:15,461 professionals , you said , you know , 1773 01:16:15,461 --> 01:16:17,517 rather just lectured a for two weeks 1774 01:16:17,517 --> 01:16:19,517 about policy . We try to be problem 1775 01:16:19,517 --> 01:16:21,794 solvers . You know , one of the things , 1776 01:16:21,794 --> 01:16:23,961 Mr Chair , that I guess having been on 1777 01:16:23,961 --> 01:16:26,128 the committee for a while that I don't 1778 01:16:26,128 --> 01:16:28,239 yet feel like I have confidence in my 1779 01:16:28,239 --> 01:16:30,350 being up to speed on this is , um you 1780 01:16:30,350 --> 01:16:32,350 know , what lessons are we learning 1781 01:16:32,350 --> 01:16:34,072 from ? Acquisition failures or 1782 01:16:34,072 --> 01:16:37,120 successes ? So Casey , 46 from the very 1783 01:16:37,120 --> 01:16:39,490 beginning in the competition . There 1784 01:16:39,490 --> 01:16:41,657 was all kinds of challenges . Somebody 1785 01:16:41,657 --> 01:16:43,823 went to jail with one of the bidders . 1786 01:16:43,823 --> 01:16:45,934 I think way back when the competition 1787 01:16:45,934 --> 01:16:47,990 started , got canceled , got Rebid . 1788 01:16:47,990 --> 01:16:50,157 There was big fighting about it . What 1789 01:16:50,157 --> 01:16:52,268 lessons have been learned from that ? 1790 01:16:52,268 --> 01:16:54,268 And have those lessons been lessons 1791 01:16:54,268 --> 01:16:53,900 that the Air Force is learned ? If they 1792 01:16:53,900 --> 01:16:56,940 shared it more broadly across the d o D 1793 01:16:56,940 --> 01:16:59,350 family , what lessons have should we 1794 01:16:59,350 --> 01:17:02,930 take from that F 35 ? Very good idea . 1795 01:17:02,930 --> 01:17:05,097 Let's let's have a platform that could 1796 01:17:05,097 --> 01:17:07,152 be used by multiple services and and 1797 01:17:07,152 --> 01:17:08,597 why not allies to Because 1798 01:17:08,597 --> 01:17:11,080 interoperability is a good thing and 1799 01:17:11,080 --> 01:17:13,358 cost sharing is a good thing . And yet , 1800 01:17:13,530 --> 01:17:16,420 um , making that platform available in 1801 01:17:16,420 --> 01:17:18,309 seeking investment from all these 1802 01:17:18,309 --> 01:17:20,476 allies led to security vulnerabilities 1803 01:17:20,476 --> 01:17:22,790 in this quirky situation that's so 1804 01:17:22,800 --> 01:17:25,030 upsetting with Turkey right now is 1805 01:17:25,040 --> 01:17:27,040 going to cost us a lot of money and 1806 01:17:27,040 --> 01:17:29,670 impose security risk . Um , the Ford 1807 01:17:29,670 --> 01:17:32,010 class carrier . If you're going to do a 1808 01:17:32,010 --> 01:17:33,954 new class of carrier , do you make 1809 01:17:33,954 --> 01:17:36,177 everything ? Do it once . Do you do the 1810 01:17:36,177 --> 01:17:38,399 whole and the propulsion system and the 1811 01:17:38,399 --> 01:17:40,566 communication system and the elevators 1812 01:17:40,566 --> 01:17:42,288 and the arresting gear and the 1813 01:17:42,288 --> 01:17:44,454 catapults do it all . Do you do it all 1814 01:17:44,454 --> 01:17:46,732 knew , Or should you do some of it new ? 1815 01:17:46,732 --> 01:17:45,900 And then once you've got that down , 1816 01:17:45,900 --> 01:17:48,600 then you start to add in in subsequent 1817 01:17:48,600 --> 01:17:50,900 ships in the class . Some of the other 1818 01:17:50,910 --> 01:17:53,350 innovations . Then there's positives . 1819 01:17:53,360 --> 01:17:57,320 Virginia class subs The Coop kind of 1820 01:17:57,320 --> 01:17:59,209 a co op petition that's been done 1821 01:17:59,209 --> 01:18:01,376 between Newport News and Electric Boat 1822 01:18:01,376 --> 01:18:03,460 kind of leads toa a spirit of 1823 01:18:03,460 --> 01:18:06,200 competition between these two companies , 1824 01:18:06,200 --> 01:18:07,922 even though they're ultimately 1825 01:18:07,922 --> 01:18:10,144 participating in the same program . But 1826 01:18:10,144 --> 01:18:12,367 that has driven some efficiencies , but 1827 01:18:12,367 --> 01:18:14,256 I don't know , you know , have we 1828 01:18:14,256 --> 01:18:16,311 learned about the value of that with 1829 01:18:16,311 --> 01:18:18,200 just within the Navy ? Or is that 1830 01:18:18,200 --> 01:18:20,422 lesson something that the Air Force and 1831 01:18:20,422 --> 01:18:22,756 the Army understand , too ? So you know , 1832 01:18:22,756 --> 01:18:22,550 it might be productive sometime for 1833 01:18:22,550 --> 01:18:24,717 this committee to kind of have a , you 1834 01:18:24,717 --> 01:18:26,606 know , greatest hits and greatest 1835 01:18:26,606 --> 01:18:28,828 failures of recent acquisition programs 1836 01:18:28,828 --> 01:18:30,939 and trying to get the duty to come up 1837 01:18:30,939 --> 01:18:32,994 and tell us a what lessons have been 1838 01:18:32,994 --> 01:18:35,217 learned from either the good or the bad 1839 01:18:35,217 --> 01:18:37,161 and be or the lessons being shared 1840 01:18:37,161 --> 01:18:39,050 across you know , all the service 1841 01:18:39,050 --> 01:18:41,050 branches , and if so , show us some 1842 01:18:41,050 --> 01:18:42,883 examples of how you know , we've 1843 01:18:42,883 --> 01:18:45,106 achieved some forward motion because of 1844 01:18:45,106 --> 01:18:47,272 the lessons that have been learned . I 1845 01:18:47,272 --> 01:18:46,820 don't really have confidence that we're 1846 01:18:46,820 --> 01:18:48,653 necessarily learning lessons and 1847 01:18:48,653 --> 01:18:50,876 applying them . We maybe , and I'm just 1848 01:18:50,876 --> 01:18:52,876 not aware of it , but that might be 1849 01:18:52,876 --> 01:18:52,210 something good for the committee at 1850 01:18:52,210 --> 01:18:54,432 some point . Well , I really appreciate 1851 01:18:54,432 --> 01:18:56,321 that comment . I agree fully with 1852 01:18:56,321 --> 01:18:58,510 Senator Kaine in Madam Secretary . I 1853 01:18:58,510 --> 01:19:00,840 think you're in a really good position 1854 01:19:01,220 --> 01:19:03,442 toe . Help us do that work , given your 1855 01:19:03,442 --> 01:19:05,750 background and , you know , both in the 1856 01:19:05,750 --> 01:19:07,710 private sector and now in this 1857 01:19:07,710 --> 01:19:10,040 important position . So I think that's 1858 01:19:10,040 --> 01:19:11,873 something we should be taking on 1859 01:19:11,873 --> 01:19:14,350 because , look , our acquisition system 1860 01:19:14,350 --> 01:19:18,310 is one of the one of the I think 1861 01:19:18,310 --> 01:19:20,310 the biggest vulnerabilities that we 1862 01:19:20,310 --> 01:19:22,366 have . You know , there's a bit of a 1863 01:19:22,366 --> 01:19:24,588 joke that runs through this committee , 1864 01:19:24,588 --> 01:19:26,421 but we should No , somebody once 1865 01:19:26,421 --> 01:19:28,366 mentioned to me we should take our 1866 01:19:28,366 --> 01:19:30,532 acquisition regulations , stamp on top 1867 01:19:30,532 --> 01:19:32,760 secret , even though they're not , put 1868 01:19:32,760 --> 01:19:34,982 him in front of the Chinese Embassy and 1869 01:19:34,982 --> 01:19:36,871 hope that the Chinese take on our 1870 01:19:36,871 --> 01:19:39,870 acquisition program because and let 1871 01:19:39,870 --> 01:19:43,410 them learn the bad way . The bad things 1872 01:19:43,410 --> 01:19:45,243 that we do here because it's not 1873 01:19:45,243 --> 01:19:47,410 helping us and it's hurting us , and I 1874 01:19:47,410 --> 01:19:49,410 think that there's a lot of lessons 1875 01:19:49,410 --> 01:19:51,632 learned that we could do . But when you 1876 01:19:51,632 --> 01:19:54,460 look at an RFP for a next generation 1877 01:19:54,510 --> 01:19:58,190 handgun pistol for NATO and its 450 1878 01:19:58,190 --> 01:20:01,280 pages , you know something is wrong 1879 01:20:01,290 --> 01:20:04,850 with the acquisitions . It's just so I 1880 01:20:04,850 --> 01:20:06,961 think it would be great to be able to 1881 01:20:06,961 --> 01:20:08,850 do that . I think you would be an 1882 01:20:08,850 --> 01:20:12,220 outstanding , uh , point person for the 1883 01:20:12,220 --> 01:20:14,276 ability to do that . Lessons learned 1884 01:20:14,276 --> 01:20:16,164 good and bad . And then how do we 1885 01:20:16,164 --> 01:20:18,276 implement a lot of that would require 1886 01:20:18,276 --> 01:20:20,387 changes to the law and , in my view , 1887 01:20:20,387 --> 01:20:22,164 getting rid of entire levels of 1888 01:20:22,164 --> 01:20:24,276 bureaucracy at the Pentagon , which , 1889 01:20:25,010 --> 01:20:27,320 you know , causes a lot of these 1890 01:20:27,320 --> 01:20:29,376 problems . Well intentioned people , 1891 01:20:29,376 --> 01:20:31,431 though , who are in a system that is 1892 01:20:31,431 --> 01:20:34,300 not helping our nation act nimbly and 1893 01:20:34,300 --> 01:20:36,320 quickly as we have to address the 1894 01:20:36,320 --> 01:20:38,542 challenges of great power competition . 1895 01:20:38,542 --> 01:20:40,598 So I do wanna just thank you again . 1896 01:20:40,910 --> 01:20:43,620 You know , I think what the issues is 1897 01:20:43,620 --> 01:20:45,398 you're seeing here This is very 1898 01:20:45,398 --> 01:20:48,110 bipartisan . The whole issue of supply 1899 01:20:48,110 --> 01:20:51,720 chains , the rise of China co vid It is 1900 01:20:51,720 --> 01:20:55,360 outrageous that we're so reliant , um , 1901 01:20:55,480 --> 01:20:57,890 on the Chinese right now they're 1902 01:20:57,890 --> 01:21:01,870 calculated attempts to keep 1903 01:21:01,870 --> 01:21:05,780 supply chains dependent on them has 1904 01:21:05,780 --> 01:21:08,040 to stop , and I think you're in a 1905 01:21:08,050 --> 01:21:11,850 perfect position to do that . Um , I 1906 01:21:11,850 --> 01:21:15,240 think there's a strong bipartisan 1907 01:21:15,810 --> 01:21:18,910 support and resolve to help the 1908 01:21:18,910 --> 01:21:21,730 Department of Defense do that and to 1909 01:21:21,740 --> 01:21:23,684 create supply chains that not just 1910 01:21:23,684 --> 01:21:26,850 secure our national security but help 1911 01:21:26,860 --> 01:21:29,420 American workers . These are all great 1912 01:21:29,420 --> 01:21:33,060 jobs mining . The mining sector in my 1913 01:21:33,060 --> 01:21:36,710 state has average wage of $100,000 1914 01:21:36,800 --> 01:21:39,720 per worker . He's air great jobs , and 1915 01:21:39,720 --> 01:21:41,900 we do it better than anybody else with 1916 01:21:41,900 --> 01:21:43,956 high environmental standards clearly 1917 01:21:43,956 --> 01:21:46,860 than the Chinese trash the environment . 1918 01:21:46,870 --> 01:21:49,220 When they mind , we don't so we should 1919 01:21:49,220 --> 01:21:51,730 bring that home . And I think we have a 1920 01:21:51,730 --> 01:21:54,040 great opportunity here . So again , I 1921 01:21:54,040 --> 01:21:57,240 want to thank you and appreciate my 1922 01:21:57,250 --> 01:21:59,640 colleague's interests in this hearing . 1923 01:21:59,640 --> 01:22:02,420 I do think that in short order , we 1924 01:22:02,420 --> 01:22:04,476 should probably be redoing this at a 1925 01:22:04,476 --> 01:22:08,210 classified setting . But with that , I 1926 01:22:08,220 --> 01:22:10,840 want to mention any questions for the 1927 01:22:10,840 --> 01:22:12,951 record that will become in your way . 1928 01:22:12,951 --> 01:22:15,173 We respectfully request that you try to 1929 01:22:15,173 --> 01:22:17,451 get back to the committee with answers . 1930 01:22:17,451 --> 01:22:19,562 Within two weeks , the record will be 1931 01:22:19,562 --> 01:22:21,396 open for that amount of time for 1932 01:22:21,396 --> 01:22:23,507 additional questions in with that . I 1933 01:22:23,507 --> 01:22:25,618 want to thank the secretary again for 1934 01:22:25,618 --> 01:22:27,673 her testimony and her service to our 1935 01:22:27,673 --> 01:22:29,640 nation with this hearing is a German .