STATEMENT OF

 H. LEE BUCHANAN, Ph.D. 

NOMINEE FOR 

ASSISTANT SECRETARY OF THE NAVY 

(RESEARCH, DEVELOPMENT AND ACQUISITION) 

BEFORE THE 

SENATE ARMED SERVICES COMMITTEE 

SEPTEMBER 22, 1998 

Mr. Chairman and distinguished members of the Committee, I am honored to appear before you today as the President’s nominee to be Assistant Secretary of the Navy for Research, Development and Acquisition. This is a special privilege for me as it culminates a continuous association with the U.S. Navy that began when I was only seventeen years old. I view the job to which I have been nominated with both awe and relish. Awe because of its importance in maintaining the security of our nation and relish because of the unique challenges. If confirmed, I look forward to using all of the insights and experience that I have acquired during a professional lifetime to serve my Commander-in-Chief and the Secretary of the Navy in their efforts to maintain our nation’s Naval Forces given a highly volatile threat and today’s fiscal realities.  

Today, you may want to discuss many of the particular issues that will confront whomever you confirm as Assistant Secretary. But let me begin on a broader note. My perception of the mission of the Assistant Secretary of the Navy for Research, Development and Acquisition is to lead a process of procurement and acquisition that provides the naval components of our joint military team with the most technologically advanced tools and warfighting systems, appropriate to the threat, when they are needed, and at the best value to the taxpayer. I have chosen these words carefully because I take them very seriously. Please let me explain more completely what I mean. 

First, I recognize the Navy and the Marine Corps team as a unique and necessary component of a "joint military team". I am convinced that the success of the great majority of future military missions will depend on our ability to combine effectively the best features of each of the Services into a single coherent force. Having served for many years at the Defense Advanced Research Projects Agency, DARPA, I am acutely aware that each of the Services has its own, carefully preserved culture. This is a good thing, since I believe that diversity of capability and agility of execution will replace mass as our key military advantage. But this diversity can impede our ability to functionally operate when the pieces cannot be properly coordinated. Interoperability (of separate systems on the same platform, of separate platforms within the same Service, of separate Services involved in the same mission) is largely an issue of acquisition discipline. If confirmed, I can assure you that this will be a primary concern. 

I use the words "most technologically advanced" to reaffirm my belief that technology is a primary enabler of military success. But over the last decade, the circumstances that surround this simple declaration have drastically changed. The good news is America’s high technology industrial base has enjoyed unparalleled growth and success, rapidly implementing vigorous technological innovation into commercial products. However, this success has two portentous consequences for the military. First, much of the technology most critical to defense (information and biotechnology are two obvious examples) is being developed for commercial consumption. More worrisome is that these technologies, precisely because they are globally commercial, are within easy reach of our adversaries. As a result, our current technological advantage may well become tomorrow’s threat. 

We must find new ways to compensate for these problems. If confirmed, one of my highest priorities would be to gain Navy access to the explosion of new technology emerging out of the commercial sector by forging alliances with companies who have had little previous interest in defense procurements. Second, I would work very closely with the Under Secretary of the Navy and his important work in the Revolution in Business Affairs to stimulate new innovations in naval doctrine and to adapt and incorporate these new technologies to the benefit of national security. 

Acquisition "appropriate to the threat" also has precise meaning in my view. It refers to the fact that in many ways today’s threats do not resemble either those of the last decade or the next. This means our military concepts and the systems that enable them must continuously change and evolve. On the other hand, I do not share the view of those that presume that the end of the Cold War allows us to modernize for the future while ignoring our readiness in the present. What is required and, if confirmed, what I pledge, is to work very closely with both the Chief of Naval Operations and the Commandant of the Marine Corps and their respective requirements organizations to strike a proper balance between these two opposing objectives. 

Lastly, the phrases "when they are needed", and "at best value to the taxpayer" refer to the need for both responsiveness and affordability of our acquisition process. We must be able to obtain new and upgraded weapon systems in a time frame that is short compared to both the evolution of new technologies and the emergence of new threat. Because of the dramatic changes in warfare, we are perilously close to matching neither of these time scales. If confirmed, I will work closely with Under Secretary of Defense Gansler and the other Service Acquisition Executives to drastically speed up our acquisition system to be able to keep up with technological progress. 

Mr. Chairman and members of the Committee, in closing I would like to express my appreciation for the opportunity to serve our nation as an important part of this administration. The challenges ahead are great, but with the combined efforts of the Department of Navy, the Department of Defense, and Congress, our maritime forces will continue to be a powerful instrument in the protection and support of American interests around the world. 

1A. DEFENSE REFORMS: 

QUESTION: What do you consider to be the most important aspects of these defense reforms? 

ANSWER: The Department has made significant progress in implementing these reforms, and if confirmed, I will ensure that the Department of the Navy acquisition community’s commitment to them is maintained. Some of the significant reforms that have been implemented include a stronger, clearly defined role for the Chairman and Vice Chairman of the Joint Chiefs of Staff and for combatant commanders; strengthening the inputs of the CINCs in the planning and requirements process including giving them control over logistics; and improving the linkage among DoD’s defense strategy, force structure and resources. I believe that the simplified chain of command, streamlined regulatory and statutory regime, and the clearly improved lines of communications with the military users are among the most important aspects of these reforms.  

1B. DEFENSE REFORMS: 

The goals of the Congress in enacting these defense reforms, as reflected in section 3 of the Goldwater-Nichols Department of Defense Reorganization Act, can be summarized as strengthening civilian control; improving military advice; placing clear responsibility on the combatant commanders for the accomplishment of their missions; ensuring the authority of the combatant commanders is commensurate with their responsibility; increasing attention to the formulation of strategy and to contingency planning; providing for more efficient use of defense resources; and enhancing the effectiveness of military operations and improving the management and administration of the Department of Defense. 

QUESTION: Do you agree with these goals? 

ANSWER: I fully agree with the goals you have identified and, as previously noted, I believe that the simplified chain of command, streamlined regulatory and statutory regime and clearly improved lines of communication with military users are key to the success of defense reforms. 

1C. DEFENSE REFORMS: 

QUESTION: Do you anticipate that legislative proposals to amend Goldwater-Nichols may be appropriate? If so, what areas do you believe it might be appropriate to address in these proposals? 

ANSWER: If confirmed, I expect to play an active role in this administration’s efforts to continue defense reforms. The Department has made excellent progress on acquisition reform and much of this program is due to the support of Congress in passing historic reform legislation. I will continue to emphasize reform and work with Congress, if and when additional legislation is required. 

I believe the Department will continue to need the Congress’ help over the course of the next several years as we continue to work this area. Legislative proposals may be necessary, but I am not aware of any in particular at this time. Most importantly, the Department will need your help in resisting new restrictions.

2A. RELATIONSHIPS: 

QUESTION: In carrying out your duties, what would be your relationships with: 

ANSWER: If confirmed as the Assistant Secretary of the Navy for Research, Development and Acquisition (ASN(RDA)), I plan to establish and maintain close relationships with each of those identified below to execute the best possible acquisition program for the Department. 

The Secretary of the Navy/Under Secretary of the Navy: 

Under the Goldwater-Nichols Act, the Secretary of the Navy has explicit authority to assign such of his powers, functions, and duties as he considers appropriate to the Under Secretary of the Navy and to the Assistant Secretaries. The Secretary of the Navy has made the ASN(RDA) responsible to "establish policy and procedures and manage all research, development and acquisition ..." within the Department. The Secretary has also designated the ASN(RDA) to serve as the Navy's Service Acquisition Executive and Senior Procurement Executive, among other duties. The ASN(RDA) works closely with the Secretary and Under Secretary in furtherance of these assignments and duties. 

The Assistant Secretaries of the Navy:  

As the ASN(RDA) has responsibility for the Navy's acquisition system, the three other ASNs have responsibility for their respective areas: Manpower and Reserve Affairs, Installations and Environment, and Financial Management and Comptroller. The ASN(RDA) frequently works with the other ASNs on joint issues and on matters affecting their particular responsibilities. 

The Navy General Counsel: 

The Navy General Counsel is responsible for ensuring the Secretary, Under Secretary, and ASNs receive the legal advice and services they require in the performance of their duties. This legal advice and services are provided by the General Counsel and the attorneys within his office.  

The Acquisition Executives in the other Military Departments: 

As noted above, the ASN(RDA) is the Navy's Acquisition Executive. The Acquisition Executives in the other military departments have similar functions, duties, and responsibilities. As a result, the ASN(RDA) has frequent contact with the other Acquisition Executives to share information, ideas, and solutions to mutual problems including joint acquisition programs. 

The Defense Acquisition Regulatory Council:  

A member of the ASN(RDA) staff in the Deputy for Acquisition and Business Management Office serves as the Navy's policy member on the Defense Acquisition Regulatory Council, and is supported by an attorney from the Office of General Counsel.  

The Chief of Naval Operations and the Commandant of the Marine Corps are responsible for determining the requirements for Navy and Marine Corps acquisition programs. The ASN(RDA), the Chief of Naval Operations and the Commandant of the Marine Corps work closely together to ensure that these programs are procured in the most efficient and cost effective manner. 

Sailors, Marines, and their families: 

Ultimately, it is the Sailors and Marines who are the primary customers for our acquisition programs. Our highest priority is to ensure that today's warfighters, as well as our children and grandchildren who serve in the Navy and Marine Corps of the future, defending America, have what they need to prevail. 

2B. RELATIONSHIPS: 

QUESTION: As the Navy Acquisition Executive, what will your relationship be with Dr. Gansler's office on matters of acquisition policy? 

ANSWER: If confirmed as the Navy Acquisition Executive, I understand that I will be subject to Dr. Gansler's direction with respect to acquisition policy matters. As a practical matter, I would expect that my staff and I will continue to work closely with Dr. Gansler and his staff to develop acquisition policies that are in the best interests of all elements of the Department of Defense.

3A. ACQUISITION REFORM: 

QUESTION: How will you use this experience to promote these efforts in the Navy? 

ANSWER: I understand that the Navy already has other transaction authority (OTA) and has used it on a number of occasions; most recently for the DD 21 acquisition. I fully support the expansion of the OTA usage whenever appropriate, as well as the full use of new prototyping authorities, i.e., Section 845/804. In many cases, the Navy employees who have used OTAs have attended OTA training provided by DARPA, and I further undertstand that a member of the ASN(RDA) staff has been working with representatives of DARPA, Dr. Gansler's office, and other offices to refine OTA related policies. 

3B. ACQUISITION REFORM: 

Secretary Douglass initiated programs, such as the Acquisition Center of Excellence, in order to support efforts by the Navy to reform the acquisition culture. 

QUESTION: What are your plans to continue this effort and are there specific initiatives you intend to pursue in carrying out further acquisition reform? 

ANSWER: The purpose of the Acquisition Center of Excellence, as I understand it, is to serve as a focal point for the development and promulgation of new practices and technologies aimed at accelerating the reform of the acquisition process. I will be relying heavily on the Center for this purpose and always looking at results as a measure of its utility.

Acquisition Reform, by its very nature, is dynamic and is fueled by changes not only in the government but also in the commercial sector, and I believe that future initiatives will be necessary. If confirmed, I plan to work closely with the Navy‘s Acquisition Reform Office as well as the Department of Defense’s Acquisition Reform Office to examine every avenue possible to reduce the cost of goods and services procured for our naval forces. I pledge to work with Dr. Gansler, the other Services and the Committee on this important effort. 

4. DUAL-USE RESEARCH AND DEVELOPMENT IN THE NAVY 

QUESTION: What initiatives do you intend to pursue to ensure that the Navy’s core Science and Technology (S&T) program incorporates dual-use technologies to the maximum extent practicable? 

ANSWER: As you know, I have been an advocate of the dual-use approach to technology for a number of years. During that entire time, I have emphasized that the value of dual-use is entirely measured by the extent to which the military can leverage the activities of the commercial sector to (a) bring into military use technologies not developed by the military and (b) to take advantage of a larger commercial market to reduce the cost of certain technologies. I am very mindful that the commercial sector is not always ahead of the military in the technologies it develops, and not all technologies are even dual-use to begin with. The trick is to know the difference. That seems to me to be a primary mission and responsibility of the military’s (in this case the Navy’s) full S&T structure. 

QUESTION: Do you expect the Navy to achieve the goals established in the National Defense Authorization Act for Fiscal Year 1998 for dual-use investment in 6.2 research and development? 

ANSWER: The Chief of Naval Research has advised me he intends to do everything possible to meet the Fiscal Year 1998 Authorization Act’s stated objectives. However, the Fiscal Year 2000 and 2001 goals of 10% and 15% of the military departments’ applied research program will be very difficult to meet. If confirmed, I will be looking for ways to meet this goal.

5A. MANUFACTURING TECHNOLOGY (MANTECH) PROGRAM 

QUESTION: What is your plan to promote a higher coordination between the MANTECH program and the program offices it serves to ensure that the MANTECH programs pursued are of the highest priorities to the program offices? 

ANSWER: The challenge, as I see it, is not only the successful development of new manufacturing technology, but the incorporation of these technologies into the production of Navy platforms and systems. I understand that the Manufacturing Technology Executive Steering Committee, chaired by the Chief of Naval Research with the senior executives of the Systems Commands, and OPNAV/HQMC, was established to aid and facilitate this process. This Committee meets three to four times a year to review the MANTECH project portfolio and ensure that projects are the highest priority, have a strong tie to the acquisition community and ultimately approve them for execution. The Systems Commands have been engaged to take a leadership role for those Centers of Excellence pertaining to their acquisition needs. If confirmed, I plan to examine the progress made by the Committee and Systems Commands in executing the existing methodology and make appropriate changes if required.

5B. MANUFACTURING TECHNOLOGY (MANTECH) PROGRAM 

QUESTION: What are your plans to address this shortfall? 

ANSWER: It is my understanding that the Navy recently increased the MANTECH budget to $60M per year throughout the FYDP. This will put the MANTECH program almost exactly at the projected 0.25 percent goal. If confirmed, I will monitor the efforts of the MANTECH Executive Steering Committee in its work to focus and facilitate utilization of these technologies. Moreover, the MANTECH office is working closely with the Executive Steering Committee to ensure that the infrastructure costs are reduced to a minimum to ensure that the Navy’s manufacturing needs are funded. 

6. NAVY LABORATORIES 

QUESTION: What is your view of these trends?  

ANSWER: It is quite true that the Navy’s S&T organization is being reduced. The Navy in-house RDT&E infrastructure of laboratories and centers was greatly streamlined in 1992 when 36 separate activities were realigned to form four full-spectrum Warfare Centers and one Corporate Laboratory, the Naval Research Laboratory. Since 1991, staffing at these activities has been reduced by 34% (25,000 personnel) and more than one-third of the Navy's RDT&E sites have been closed. But please keep in mind, that the Centers and NRL are industrially funded; that is, they recover all costs and the size of their staff depends on the amount of work they are funded to perform by program managers or other customers. As a result, the in-house Navy "market" has a very strong voice in determining what can be reduced and what should be retained. This will require very close monitoring, but if confirmed, I intend to place very high importance in the voice of the customer.  

QUESTION: Do you believe that there is a reasonable prospect of bringing the Navy RDT&E organizations to a stable, steady-state level in the foreseeable future? 

ANSWER: The size of the Centers is controlled through decisions made by Naval Systems Command program managers (the lab/center customer), who are responsible for determining the best-value balance of in-house/out-of-house sourcing for their program(s). The size of the Navy's technical infrastructure should continue to be dictated by customer demand, and will reach steady state when the Department’s funding levels become stable. My impression, however, is that we are already reasonably close to steady state. 

7. TESTING:

There has been criticism of duplication in the area of test facilities, current and new construction. 

QUESTION: What will you do to reduce duplication, not only within the Navy but also among the Services, in current facilities and ensure that new construction of test facilities follow along the plans and requirements of the MRFTB? 

ANSWER: I understand the Navy is cooperating with OSD and the Services in participating in a number of ongoing studies and efforts looking at this topic Department of Defense-wide and I support this initiative.

- The ASN(RDA) actively participates, along with Service Vice Chiefs and others, of the Section 912 Senior Steering Group chartered/chaired by USD (A&T) to streamline the Research, Development, and T&E infrastructure, which includes the Science and Technology (S&T), Engineering, and Test & Evaluation (T&E) Center infrastructure.

- On the S&T side, the ASN(RDA), through the Chief of Naval Research, actively participates in the OSD Reliance Process which is chartered to eliminate unwarranted duplication of investments into current and new T&E facilities.

8. RDT&E MANAGEMENT REFORM:

QUESTION: What role do you intend to play in this process? What areas do you feel the Navy can provide positive examples of management initiatives to reduce costs and streamline operations? 

ANSWER: In general, I support the Congressional intent as stated in Sec 906 of FY 1999 Senate Defense Authorization Report. I do have some concerns about the value of another study of the DoD RDT&E infrastructure, absent BRAC-like authority to implement the recommendations of such a study. There have been numerous studies of these activities over the past 30 years, and the problems that confront them are well documented and well understood. Unfortunately, the kind of bold, decisive actions necessary to revitalize these activities DoD-wide have, for a variety of reasons, not been taken. 

Nevertheless, I believe the Navy has led the way in implementing management initiatives envisioned by Sec 906. For example, in 1992 36 Navy RDT&E activities were consolidated into four full-spectrum warfare centers and one corporate laboratory. Since that time, workload reductions and a variety of efficiency improvements have reduced staffing in these activities by 34% (25,000 personnel). Reductions of another 8% are expected by 2003. This realignment also placed related Navy test and evaluation (T&E) facilities and R&D activities into the same platform-related commands, thereby greatly improving the utilization of unique and expensive infrastructure. As a result, more than one-third of the Navy's RDT&E sites have been closed. The Navy lab/center community has also been a leader in the use of special demonstration authorities to test innovative concepts in civilian personnel management, having established DoD's first two pilot programs at San Diego and China Lake, California in 1979. Navy labs and centers are continuing to expand their personnel demonstration programs under the additional authorities granted by Congress in 1995. 

Section 912(c) of the FY 1998 DoD Authorization Act directed the SECDEF to conduct a review of DOD acquisition activities. In the Secretary's letter to Congress transmitting the report required by this section, he committed to a study focused on streamlining the DoD science and technology, engineering, and T&E infrastructure. As a member of the Senior Steering Group chartered to advise the Secretary on this effort, if confirmed, I intend to play an active role in ensuring that the DOD takes every possible action to reduce the cost of doing business, while nevertheless committing to maintain unique and irreplaceable R&D and T&E facilities.

9. R&D VS. PRODUCTION 

QUESTION: What is the proper balance between R&D and procurement and how will you strive to achieve this balance in the Navy? 

ANSWER: I view the process of technology invention, development and acquisition as a continuous one not easily separated into two distinct categories. In this view, it is very important to balance not only R&D versus acquisition, but also risk versus payoff. 

If confirmed, I will pursue a Science and Technology program that is aimed directly at the Navy’s needs, both short and long term, and will seek early application where the opportunity exists to apply technology cost-effectively to achieve a new or enhanced Navy capability. Critical to this will be a process for leveraging technologies that have been developed outside the Navy’s structure to the benefit of naval forces as well as an agility during the entire acquisition process for inserting new, breakthrough concepts.

10. MAJOR PROGRAM FUNDING STABILITY 

An issue in acquisition reform that has yet to be addressed is major program funding stability.  

QUESTION: What is your view of this problem? 

ANSWER: In terms of acquisition reform, the Department is focusing efforts on a number of areas including improving business practices and procedures, enhanced partnerships with industry, and contractual process improvements. Clearly, this is the start of an area which will reduce total ownership cost and free-up resources that will provide the Department with increased flexibility. 

We can continue the direction of the Quadrennial Defense Review, which realized that increasing acquisition stability is one of the keys to achieving our recapitalization and long term modernization goals. Without stable and consistent funding, program managers cannot fashion and execute efficient and cost effective programs that meet the requirements identified by the operational community. 

We need to continue our efforts, started in the QDR, to realistically plan and price both our acquisition and operating programs within the total amount of resources expected to be available to us. This is key to stemming the migration of funds to the operating accounts during execution, and thus providing stability to acquisition programs.

QUESTION: What initiatives do you intend to promote within the Navy and the Department of Defense to ensure greater stability in the funding of major Navy programs? 

ANSWER: If confirmed, I would implement strategies that include multi-year program acquisitions and low priority program terminations as methods of ensuring greater overall program stability. Multi-year procurements have proven to be very effective in promoting long term program stability for both the government and industry. In addition, I would work with the Chief of Naval Operations and the Commandant of the Marine Corps to identify lower priority programs to terminate to pay taxes and other bills, instead of decrementing many programs across the board.