Discussion with the Secretaries of the U.S. Military Departments

Kathleen H. Hicks: I’m Kathleen Hicks. I direct the International Security Program here at CSIS, and it’s my pleasure to welcome you to our second annual – that’s said with hope that there will be – there will be further – conversation with the service secretaries. And I should say the secretaries of the military departments is actually the appropriate way to say that. And we’re so pleased that they agreed to come back to this forum. It’s a unique forum, and I hope you all find it valuable for not just hearing what the priorities are for each individual department, but also some of the ways in which they’re working together for the nation.

Kathleen H. Hicks: So let me briefly introduce who we have here. We have Secretary of the Army Mark Spencer (sic; Esper) to my immediate –

Sec. Richard Spencer: No.

Sec. Richard Spencer: Close.

Sec. Mark Esper: Mark Esper.

Kathleen H. Hicks: Mark Esper. I’m so sorry – (laughter) – because I was thinking, it’s the Army, I know it’s the Army. (Laughter.)

Sec. Richard Spencer: Phew! Because I had all the wrong notes there. (Laughter.)

Kathleen H. Hicks: I will – I will confess I am off of a red eye.

Sec. Mark Esper: I thought I’m your brother. (Laughter.) He’s my little brother. (Laughter.)

Kathleen H. Hicks: So Mark Esper, 23^rd secretary of the Army. A graduate of the U.S. Military Academy, served about 10 years in the Army, including service during the Gulf War.

Kathleen H. Hicks: To his left is the secretary of the Navy, Richard Spencer. He is the 76^th secretary of the Navy and he served as a pilot in the Marine Corps previously. Also served on the Defense Business Board.

Kathleen H. Hicks: And all the way at the end we have Secretary Heather Wilson, who is the 24^th secretary of the Air Force, graduate of the Air Force Academy, and an Air Force officer herself. And she previously also served in Congress, where her committee assignments included the House Armed Services Committee.

Kathleen H. Hicks: Thank you all, secretaries, for coming, even if I can’t get Secretary Esper’s name right. I appreciate you coming today.

Kathleen H. Hicks: Let me start with just a broad question and maybe just go down the line. It’s two years into the administration, a year since the National Defense Strategy’s been released. There has been priorities set from the beginning from Secretary Mattis around readiness and then around essentially structure and capability of the force, and now with the NDS moving into this period of competition in particular focused on China and Russia. Where do you see the accomplishments to date that are most important for each of your departments? And what are your priorities going forward?

Sec. Mark Esper: Sure. Well, first of all, thanks again, Kathleen, for you and CSIS hosting this. I think it was very successful last year, and hopefully there will be a third one as well.

Sec. Mark Esper: Let’s go back and baseline as well. So about this time last year the National Defense Strategy came out, and it told us that we are in an era of great-power competition and that our strategic competitors are Russia and China, and that we should focus on high-intensity conflict. A few short months after that the Army Vision came out. And what the Army Vision laid out was what should the future look like for the Army in the year 2028 in terms of everything we do, from how we – how we man, organize, train, equip, and lead the Army. And really what that did was brought to fore and jumpstarted what I’ve been saying is a renaissance in the United States Army with regard to everything we do.

Sec. Mark Esper: So our priorities have remained the same, and will: readiness number one, modernization number two, and reform number three. And reform is the means by which we free up time, money, and manpower to do number one and number two better. I know you want to talk about readiness, but I will just give you a quick metric in terms of how much ground we have – we have reclaimed when it comes to the readiness of our forces.

Sec. Mark Esper: So at the end of 2016 we had 18 brigade combat teams, our most common metric, that were in the top tiers of readiness. Today we have 28. That is a 55 percent increase in a short period of time simply because of doing things like more money from Congress, which was extremely helpful; a focus on training, getting back to high-intensity conflict; and a number of other things we can discuss.

Sec. Mark Esper: On the modernization front, as you know, we stood up Army Futures Command. It’s the biggest reorganization of the Army in 45 years. Just prior to that we had cross-functional teams working on our top 31 programs and other efforts. And in order to make that real, in order to not just talk the talk but walk the walk, the chief and I led what’s now being called the night court where we looked at our entire equipping budget and went through from top to bottom, and put all those programs we need to fight and win in the future and funded those first, and frankly divested either through reductions, eliminations or delays a number of other programs.

Sec. Mark Esper: Now, some may say, why is that important? And I’m – and so there – why does the Army need the budget it put forward, that should come out in a few weeks? Why is that budget so critical to the Army? It’s as simple as this: If we do not modernize the force now, we risk losing a future conflict against Russia or China. It’s that simple. We cannot continue to live off vehicles and equipment that came into the Army when I came into the Army, in the 1980s. So it is that urgent that we get this done and that we implement that budget.

Sec. Mark Esper: And there’s more to that, of course, we could talk about. But our reform measures have helped us fund both of those. And there are a number of other things we’ve done. And I don’t want to occupy all the time here, but we’ve made a lot of great progress. I’m very happy with how far we’ve come, and it’s a very exciting time in the United States Army.

Kathleen H. Hicks: Great. Secretary Spencer.

Sec. Richard Spencer: I will build right off of what Mark said because there was no difference in baselining where we started the United States Navy. I will preface it by saying something that some of you have already heard, that when people ask me what was your biggest surprise when you took over as secretary of the Navy, having hung around the hoop here with the Defense Business Board and the CNO’s Executive Panel, I thought I knew or had a pretty good insight as to the readiness issues at hand; I was nowhere near close. We had flown the wings off the planes, we had sailed the bottoms off the ship, and we had stretched our troops and our Marines – our sailors and Marines to the Nth degree.

Sec. Richard Spencer: With the ’17 RAA, the ’18-’19 budget, ladies and gentlemen, the foundation for readiness has been set. And what we’re looking at right now in the United States Navy is everyone understands they have the resources. This is all being done now to the – to the mantra of urgency. We have money. We have plans. We cannot buy time. And that is the biggest stressing point that we have right now. We are reviewing – much like the Army, we’re reviewing every single platform that we have. When I – as far as how we’re going to go forward with modernization, what we’re looking at to acquire in what I call the force 2.0 – which are those weapons systems and concepts that we’re developing – that is ongoing as we speak.

Sec. Richard Spencer: We look at where we’re headed as far as the Navy in general – you’ve heard the CNO launched his Maritime Superiority 2.0 – all about agility. All about agility and urgency. And we look at conceptuality, which we’re reviewing all our concepts on how we fight. We have developed our briefing that we’re getting out to the tail, which is how the Navy fights and how the Navy fights with the Army and the Air Force.

Sec. Richard Spencer: We look at geography, how we’re now working geography to our advantage. We used to have BMD ships tied to a tether. They’re now freely wandering. And we’re using what we call surprise and the ability to launch and maneuver as we wish. Instead of just leaving Norfolk and going right over to the Middle East, now we are doing maneuvers along the way.

Sec. Richard Spencer: And the last is technology, how we’re applying technology for our benefit. It’s not just buying it off the shelf. It’s working with industry to develop solutions for our problems. And I won’t take any more time, but I will say one of the things that we’ve really done in the last 18 months is try to sit down with industry and say we are partners in solution providing. And their response to us is, OK, you have to be a responsible client. I get it. I have to be clear on what I need and what I can provide. And in that case, the biggest thing that we can provide right now is consistent funding to allow our partners in the private sector to spend the R&D dollars to provide us the solutions that we need.

Sec. Heather Wilson: I think probably the thing that’s changed most in the year since the publication of the National Defense Strategy is a greater awareness in both – really across this town, in the Congress and also among the American people, that the threat has changed, and that we need to prepare for the reemerged era of great-power competition.

Sec. Heather Wilson: Having a budget on time and an authorization bill on time has made a tremendous difference to the Air Force this year. One of the things that the Congress did and directed the Air Force to do was to say, all right, we’ve got the National Defense Strategy; what is the Air Force we need in order to implement the National Defense Strategy? And that report is due to Congress on the 1^st of March. This was a really, I think, important piece of work. It is a piece of work that indicates – and it’s no surprise to anyone here – that the Air Force is too small for what the – what the nation is asking us to do.

Sec. Heather Wilson: When Mark went to war in the Middle East, we had 401 operational squadrons supporting the joint fight. Today we have 312. And it is one of the – it is a – it is an old fleet and it is much smaller. So we have to cost-effectively modernize the force, and increase its capability, and change the way we fight in order to implement the National Defense Strategy.

Sec. Heather Wilson: We have been for two years restoring the readiness of the force to fight any fight anytime. And like Richard, I was very surprised by the decline in the readiness of the force over the last two decades, and that’s no knock on the airmen who are out there doing the job every day. They didn’t have the time, the white space, the equipment, in some spaces the people. For us, readiness is first and foremost about trained people. Two years ago we were 4,000 maintainers short in the United States Air Force. As of December, we are fully manned in maintenance for our active-duty units. So we have closed that gap. Now we have to season those people to make them exceptional airmen on the flightline. So restoring the readiness of the force is job one for us.

Sec. Heather Wilson: And then cost-effective modernization. We are trying to buy things faster and smarter. The Congress gave all three of us a lot more authorities in 2016 and ’17, and we are aggressively implementing those authorities to get things from the lab bench to the flightline faster. There are a lot of different examples of that, but when we’ve used these authorities we need enhanced competition and get more innovative companies involved in providing services and equipment to the military, it also saves money.

Sec. Heather Wilson: The Air Force had four major procurements in the last quarter of last year. We had the new trained. We had the new GPS satellite. We had the replacement helicopter. And we had a contract for launch services for our satellites, for rocket launches. Those four procurements were very competitive. And because of that competition we actually saved $17 billion, which we were then able to put towards other things that the military services need.

Sec. Heather Wilson: So we are using the authorities given to us to buy things fasters and smarter, and we’re building the Air Force we need for the high-end fight.

Kathleen H. Hicks: So some of you have mentioned threads of what I’m about to ask, but I’ll just – I’ll ask it more directly from Secretary Wilson maybe coming this way: What is the priority for you in your message to Congress? Preview for us a little bit in your posture statements, what do you most need Congress to help you with? Is it your authorities? Is it the consistency of the budget?

Sec. Heather Wilson: I think with respect to the Congress, first of all, I think we’ve benefitted over the last two years from explaining to the Congress what is the threat and the emerging threat. What is America going to be facing? And there is a consensus, I think, bipartisan, in the Congress on the need to provide for the nation’s defense. That topline growth has made a tremendous difference, and the certainty of timing has made a difference. We had a budget on time.

Sec. Heather Wilson: You know, I looked at our first quarter results in the Air Force. We actually executed about a quarter of our budget in the first quarter of the year. We were able to do new starts of programs and cut contracts. And our flying hours in the first quarter was slightly above 100 percent of plan. That is – that is tremendously important to continue to train the force, is to be able to use that first quarter and in some cases first two quarters of the year with having a budget.

Sec. Heather Wilson: So the budget and the topline is important. Getting it on time is important. And maintaining a strong national defense overall.

Sec. Richard Spencer: I can only beat the drum harder that Heather has started to beat. You heard me just a minute ago; consistent funding is the message that we have to have up on the Hill.

Sec. Richard Spencer: The only thing that I would add is that we do have to get after reformation. We’ve been after it, but the fact of the matter is with the audit we have a management tool now, and we’re building tools around it that allow us to really see in the true sense of portfolio management where we are putting our resources, what we expect to get a return on that investment, and how we are actually tracking that return on investment. So we actually have a credible tool to come back and say: Congress, thank you for the money; here’s the output metrics versus just the input metrics of how we’re getting after national security.

Kathleen H. Hicks: Secretary Esper?

Sec. Mark Esper: Predictable, adequate, sustained, and timely budgets. That’s my message to Congress.

Sec. Mark Esper: Predictability is critical not just for me, for the service, but it’s also important for our industry partners. In the Army what we’ve tried to lay out are our six modernization priorities. They – unchanged now for 18 months. And it’s that predictability that allows our industry partners to do their own investment in R&D and to meet us on the other side in terms of the next generation.

Sec. Mark Esper: Adequate goes without further explaining, and the same with sustained.

Sec. Mark Esper: The timeliness is also critical. Secretary Wilson mentioned that. Last year was the first year we had a timely budget, and it meant I could fill all my training seats. It meant that I can conduct all my training on time. That was critical to us making sure we can improve our BCT readiness.

Sec. Mark Esper: So all those things are critical. And again, obviously, for me, there will be big shifts in our budget – big shifts to help us fund training and certainly on the equipping side. And I’ll just – it’s worth repeating: if I’m not able to make that shift from the legacy to the future, we risk losing the first fight of the next war.

Kathleen H. Hicks: Specifically on authorities with regard to acquisition and more generally modernization working with industry, et cetera, do you all have the authorities you think you need?

Sec. Mark Esper: I think we – I think we have sufficient authority right now. We’ll probably be asked that question, and I’ll – you know, the same thing, I’ll pull my staff and see if we need more. I think we need to make sure we understand what those authorities are within the building so that we can – we have clear lines in terms of how we can proceed on exercising them.

Sec. Richard Spencer: I would agree with that. It’s one of those times where I think we can say we have everything we need that we think we need right now; let us digest and actually effect those authorities that you’ve given us, which some of them are terrific. They really are. It allows us to really speed up and be quick and agile on our acquisition and time to front line.

Sec. Richard Spencer: I also underscore what Mark said, which is now inside the building we have to met out how we’re going to use these authorities and who’s involved with these authorities.

Sec. Heather Wilson: I think the Congress recognized that speed matters. We’ve got a rapidly innovating adversary and we have to pick up the pace of innovation. That means that we have to set up an acquisition system that we govern and oversee, but where we have empowered program managers who spend more time managing their programs than they spend managing the Pentagon; where lines of accountability and authority are very clear; and they get the support that they need from headquarters to do the job we’re asking them to do. I think there is still remnants of the large bureaucracy within which we – within which we work who think that their job is to still check the checkers, and we are constantly trying to discourage them from doing that and shift their professional lives to things that add value.

Kathleen H. Hicks: On those lines, what are the tools or the levers you are finding most valuable for changing that culture to an innovation culture? And I’ll leave it pretty broad like that because it may vary where you find your pain point. Secretary Esper?

Sec. Mark Esper: You want me to go first?

Kathleen H. Hicks: Yeah.

Sec. Mark Esper: I think for us, you know, the – there is a risk aversion within a modernization enterprise that I found coming in, and it’s been well-reported probably for all of us.

Sec. Mark Esper: So I think for us the biggest change was, of course, to stand up Army Futures Command. If you can effect that organizational change, that is a key part. The next are process changes, and those are well underway. The third is picking the right leaders, and I think in General “Mike” Murray down in Austin, Texas, now we’ve picked the right person. He understands D.C. and innovation and working with industry well. And I think if you have those three things, then you can shift the culture.

Sec. Mark Esper: At the end of the day that’s the – the most important thing is to shift the culture so folks are focused on the outcome and not the process, so that they feel empowered to take a managed risk in terms of their programs and they’re not focused on checklists. That’s what we need to get to, and that’s – I think then through, you know, me beating that drum and the undersecretary and everybody else within that whole modernization enterprise doing that, that’s what will get us there. It takes time, but I think with those elements in place we’re moving in the right direction.

Kathleen H. Hicks: Any other thoughts?

Sec. Richard Spencer: Kath, I think it really is – stemming off of what Mark said, it is a leadership issue. We have the tools that we need. They’re on the table. And now it’s up to leadership to say pick up the tool and bang it around and use it.

Sec. Richard Spencer: If I look at the three priorities that I have, which haven’t changed since being on the – (inaudible, background noise) – are people, capabilities, and process. And the underscore there is the best person who can probably provide a solution to a problem is the person directly looking at the problem. I don’t have the best solution where I am. I can move big rocks of policy and dollars, but the actual tactical solution is at the problem level. We have really been pushing that down in the Navy and Marine Corps team. I look at how the Marine Corps and the Navy have stepped out on additive manufacturing. The Marine Corps’ title to it is “Print it Forward.” So we’re getting both an increase in expedition and we’re also getting an increase in effectiveness and efficiency in that regard. But that’s the culture that’s changing. It’s on the front line going up, versus coming down, to actually use the tools we have.

Sec. Richard Spencer: On the bigger acquisition issues, we’re using some great authorities that have been given to us to really expedite things. And you can see that what’s happening with the frigate. You can see that happening with the MQ-25, larger programs that we’re – we have the ability to expedite.

Sec. Heather Wilson: I would say a couple of things. In 2016 and ’17, the Congress gave us new authorities to prototype as an alternative to traditional acquisition. We’re using those very aggressively. Let me give you just one example.

Sec. Heather Wilson: Next-generation engines, so next-generation engines for aircraft. Instead of doing a five-year study and setting requirements, and getting a big stack of paper at the end of that and then going out with an RFP when you have no idea what you really can build, we instead with the two largest engine manufacturers, or two of the three largest engine manufacturers in America, led a prototyping contract and said: Build us an engine. The goal is to get a 25 percent increase in thrust – or, rather, a 10 percent increase in thrust and a 25 percent increase in fuel efficiency. See what you can do.

Sec. Heather Wilson: Very competitive. Very ambitious technically. The Air Force spends $5 billion a year on jet fuel. If we can get a 25 percent increase in fuel efficiency in the next generation engine, that changes our tanker requirements, it changes the cost of fuel, it changes all kinds of things about the way we fight. We’re using our prototyping authority to do that. We’ll see what’s possible. And then we’ll set the requirements for the next generation of engine. So prototyping experimentation is one.

Sec. Heather Wilson: The other thing I would say is the three services are working very well together on a variety of things. I mean, one example is hypersonics. A hypersonic weapon has a lot – and bombs have various parts – shells, rocket motors, explosive packages. The Army – we signed an MOU about a year ago on hypersonic weapons. The Army and the Navy had come up with a shell they were able to get to hypersonic speeds, five times the speed of sound, and maneuver it. Ours didn’t work. So but what we have is rocket engines that we think are better than the ones that they had developed. And so we got our engineers working together.

Sec. Heather Wilson: We have an Army – a Navy funded, Army tested shell of weapon with an Air Force rocket motor that’s going to go on it. We’re going to drop it off an aircraft. You guys are going to put it on a ship. And they’re going to launch it from the ground. And by working together, we stripped five years out of the likely fielding time for a – for a hypersonic weapon.

Sec. Mark Esper: It’s the purple bomb. (Laughter.)

Sec. Richard Spencer: Yeah, the grape.

Kathleen H. Hicks: Secretary Esper, you had mentioned, of course, Futures Command as a(n) organizational change. Secretary Wilson, you have the Space Force issue set. Talk a little bit, maybe starting with Secretary Wilson and then coming down the line, how you’re managing the tension, if you will, of organizational design change versus the push to kind of move – you know, act – form follows function, if you will. Sort of – there is this tension, I think, that most – many are talking about, about whether it’s best to sort of make the organizational design right, and then move out, if you will, to achieve the substantive goal, or whether it’s smarter to invest that energy in just moving out on the substantive goal. And I know both of your services have had to deal with this, and maybe Secretary Spencer has a similar example. How are you managing that, Secretary Wilson?

Sec. Heather Wilson: Let me take the example – I’ll talk about space – but one of the best examples is the Army has Futures Command. We established, just as I arrived, the Air Force Warfighting Integration Center. And our issues and problems were different, but the purposes of those institutions are really the same, which is to get after how are we going to fight the future fight, and how is that then reflected in the budgets that we put forward? So we started the Air Force – the Warfighting Integration Center. That looks across all of our stovepipes and designs – it looks at alternative futures. And then uses them to drive what we buy and what we put in our programs. In that case, it was really getting the buy-in from the organization to do that. It was more internal rather than externally pushed.

Sec. Heather Wilson: With respect to space, the – what we’re trying to deal with now is that space has become a war fighting domain. We are the best in the world at space, and our adversaries know it. And they’re seeking to develop the capability to deny us the use of space in crisis or war. We have to confront that reality. And the Air Force has developed both strategies and programs to be able to defend what we do on orbit and provide to the joint force. You know, whatever structure organizationally come out of this next session of Congress, our responsibility is to make sure that we can fight, and win, and continue to provide that service to the joint force.

Kathleen H. Hicks: Go ahead, Secretary Esper, and then Secretary Spencer.

Sec. Mark Esper: Sure. You know, we explored numerous courses of action over many, many months to come up with what ultimately became Army Futures Command. And so that process allows all the stakeholders to really voice their ideas, their concerns, their issues. And so it has its own socialization in and of itself. And as I said before, the end state that Futures Command will achieve this summer will not be the end state. I mean, it will continually change. If it doesn’t, then it’s missing something. But it’s – but it’s not just, again, the organization piece. There are the processes that we developed, the cross-functional teams that are built into it.

Sec. Mark Esper: You know, we’re moving more – we’re moving aggressively toward best-value contracts. For example, how we do contracting differently. Even small things, like changing the name. So we used to – we recently moved Research Development and Engineering Command into Army Futures Command as another phase. And it was renamed Combat Capabilities Command – Development Command. So think of it, the name difference alone sends the signal that you’re not about just doing research and development. You’re about developing combat capabilities.

Sec. Mark Esper: Last week I was in Pittsburgh because we stood up our AI taskforce there at Carnegie Mellon University – another milestone for Army Futures Command – which sends the signal internal to the Army and outside toward academia and industry – we had a number of industry partners there as well – is we’re trying to get out and be more accessible. So there are a number of things we tried to do as we stood up Army Futures Command to bring everybody along, make sure they understand what we’re doing. And internal communication is always a constant you have to keep pushing on to make sure everybody gets the word, they understand what you’re doing, the whys, and everything else.

Kathleen H. Hicks: Secretary Spencer, any thoughts on this?

Sec. Richard Spencer: For fear that some of you might be worried the Navy hasn’t stood anything up, what we did – we actually used existing crucibles that we had. If you look down at Quantico, at MCCDC, the Marine Corps Development Center, and then you look up at Newport at the War College, our two primary crucibles that we do for testing experimentation on both concept technology and deliverabilities, we’ve really amped up the game there. And that’s where we’re focusing. But one of the things that I want to say – which is, again, keying off what Heather just said earlier – I sat there in one of our breakfasts that we have every two weeks and said: Wow. You have Integrated Warfighter Center, new Futures Command. Let’s get Navy and Marine installed in both of these so we’re hearing about it real time and can adopt and adapt and bring it in, rather than traditional stovepiping, where we might read about it in the paper and call each other up and go, wow, can I get a slice of that?

Sec. Heather Wilson: In fact last – that was just two weeks ago we decided we got a three-party hostage exchange going on our warfighting and innovation center and Army Futures Command the Navy warfighting center, so that we’re working together and across the services.

Kathleen H. Hicks: Well, and let’s talk a little bit about that, which is – you know, if you look at – if you look at cyber, if you look at data links, the jointness of the challenge set at the head, you’ve just given a very concrete example. Are there others that come to mind where you all are trying to push beyond the boundaries of, you know, the cultural difficulties, and even just the system process difficulties of making sure that, you know, the Army’s vehicles fit on the Air Force’s planes, et cetera.

Sec. Mark Esper: You know, I like to view our cultural differences in the way we operate as assets rather than obstacles. And I think if you look at it that way it completely changes your perspective in terms of how you fight. Look, I think the success of the American military has been – at least since World War II – the fact that we fight as a joint force, combined force. And it makes us unique in many ways. The more that we can move closer and closer together, the better. Army’s working on our new doctrine called multidomain operations. It’s – we released version 1.5 in December. It’s another key line of effort for the Army to modernize in the future. It’s in our vision for 2028.

Sec. Mark Esper: But as I think I said this time last year, it envisions a new type of way that we operate and how we organize so that I can support, for example, the Air Force long-range suppressive fires to go after enemy air defense systems, at great, great differences. And the same thing with the Navy. If I can support the Navy in the South China Sea with long-range cannons that we’re actually developing now, it allows us to work cross-domain supporting one another in different ways. And of course, for us multidomain is not just the air domain and Navy, but it’s cyber, space, and then of course electromagnetic spectrum as well.

Sec. Richard Spencer: If you’re to take the F-35 as an example, one of the goals obviously is to have a platform in the air that can call on any platform to deliver any weapon. It’s an aggressive goal. But if you take that as a primary understanding, when the three of us are together we’re going, wow, we’ve been – the Joint Chiefs have been practicing jointness. Now the Title 10 people are actually enforcing jointness. To give you an example, one of the things that we are working on is getting back to this concept of who’s supporting and who is supported. And that goes across the board in everything that we look at, to make sure that we’re aligning ourselves. And the three of us are completely aligned on our overall goals, wearing our Title 10 hats. And now we’re aligning resources not only internally but externally to our organizations.

Sec. Heather Wilson: I have two examples. One of them is we signed a joint memo. And this is probably kind of boring in some ways, but it probably is one of the most important things we’ve done together. Which is, we signed a joint memo to each of our service acquisition executives on interoperability of communications. So there has to be – we call it an open mission systems architecture. So that everybody has standards for communications and everybody knows who’s – what the other standards are. So in other words, you can have a Verizon phone, and you can have an iPhone, but you can talk to each other because there is a standard for interoperability.

Sec. Heather Wilson: If we’re going to multidomain operations – which is also part of the Air Force approach to this – we need to be able to have any sensor connect to any shooter in very – at very rapid machine-to-machine speeds. So the ability to communicate and know what those standards are, and that all of our equipment will be done that way, in all three services. That’s a very big deal. I would say the other thing is kind of a very practical thing. We do have breakfast together every two weeks. And we’re working on about 20 things at any one time. No staff there. Terrifies the Pentagon. (Laughter.)

Sec. Heather Wilson: But what it’s also caused is – and I’ve noticed this – is because we have breakfast together, I think before we have breakfast together, like, our assistant secretaries for installations get together. Our general counsels get together. Our military assistants get together. Because I think what they say is: OK, we better sort this out, because if we give it to them we have no idea what they’ll do. (Laughter.) And so what it has really focused is a much greater alignment up and down the services, and sharing of information, and solving problems, and getting after it.

Sec. Mark Esper: Yeah, that puff of white smoke comes out of one of our offices and they know that the command is coming down. And what do you mean we have to work with Air Force on this, or the Navy? (Laughter.) So, sorry, guys. We play jointly.

Kathleen H. Hicks: Secretary Spencer, audit. You mentioned it in your opening comments. Can you each talk – starting with you and maybe going Secretary Wilson then Secretary Esper, about the way in which – some concrete examples of how you’re using the results of the audit to better get at some of these reform priorities.

Sec. Richard Spencer: Yeah. This is probably one of the best tools that we’ve been given. And a lot of people approach this going: OK, we’re finally going to be able to balance, you know, the financial numbers. That’s just the tip of the iceberg. What’s coming out of the audit is a management tool. I’ll give you one example, and I’ll back up for a second. This is the Navy’s first time through the audit wringer. We will probably not get an unqualified audit for maybe five to six to seven years. But that shouldn’t disappoint anyone. The learning curve that we are undergoing right now is stunning.

Sec. Richard Spencer: I’ll think of one right now. We have 700 distribution points in the United States Navy. If I’m not mistaken, Amazon does it with 25. I think we have room for improvement. (Laughter.) This is how we’re using the tool. So it’s not just where are your dollars and cents and where did you spend them? You can now see, when I referred earlier, where we’re making the investment and what the return on our investment is, this is where the audit comes in. We also have launched in hip to audit is our performance-to-plan tool. So now “managers,” quote/unquote, anywhere along the line of management have the ability to see what the goal is, what the resources they’re putting towards there, and what the output is. We’ve truly suffered – and I use the word suffered because we focused on being in input organization. We were judging how much we put in. we really now are switching the view to go input in balanced with output, and metrics to manage the output. And that is the audit.

Sec. Heather Wilson: To me, I’ve had audits as a state agency, and a university, and with small businesses, and on boards of public corporations. And they are a tool to identify issues that need to be addressed. So to me, an audit is a tool. And there are findings both – we divide them into buckets on their significance and so forth. We develop a corrective action plan for every finding. And then we execute the corrective action plan. So for me, it is a tool for improvement. In addition to this external audit, the Air Force has an internal audit function. I assume we all do. But we do audits all the time on issues, performance problems. And we’re constantly looking at ways in which we improve systems and processes. So to me, the audit is a tool. It is one more tool in our kit to continue to improve performance.

Sec. Mark Esper: You’re going to hear much of the same from me. It’s just a very important tool. It’s a matter of perspective. If you – if you see it as a threat, then it becomes difficult. You got to see it as an opportunity to see yourself better, to help you find things. And, you know, we found, much like Richard said, you know, we had too many data centers, for example. We had good accountability over our mobile devices. But if you view it as a tool – and the auditors are usually very good to work with you. If they’re trying to help you, it can be a great way to make sure your force is more effective, and certainly more efficient.

Sec. Mark Esper: And as Heather said, we – the Army has its own audit agency. And I – we give them a – I work with them closely in terms of this is what I want you to accomplish in the next year. Go audit these things and come back and give me feedback. It’s a great tool. Audits are great tools to help you perform better.

Kathleen H. Hicks: I’m going to ask one more question down the line and then we’re going to open it up to the audience. So please start thinking of your questions. I do want to make sure we hit on people, which I have not given you the opportunity to talk much about. You know, as service secretaries, you own the schoolhouses, if you will, or the training elements all under your watch. And here we have this significant shift in the environment, or an acknowledgement of an existing shift in the environment, both sort of these – this high-end competition but also to this shifting landscape of challenges below the level of warfare. What are the most pressing priorities for each of you with regard to how to move forward the – again, the educating and training elements of the force, and the retention elements?

Sec. Mark Esper: That’s a good question. You know, I think – again, for me, it will go back to the budget, the Army budget, because what we have done in there is we’ve reformed and shifted dollars. We wanted to make sure that we placed an emphasis not with regard – not with regard to just moving the Army of the future from an equipping standpoint, but from a training and personnel standpoint. So the reforms – the changes we made helped us fund things such as this: An extended infantry basic training, which now goes from 14 weeks to 22 weeks. It’s the toughest in the world, I like to say. And I was with that class – a class in November watching them train. And the results are dramatic. Between an extended basic training and now we have a drill sergeant to recruit ratio of, like, one to 12, you’re seeing young soldiers with much higher physical fitness scores, much more competent tactically and technically. And I think it’ll produce a whole much – a whole lot better product for the operational force. That’s one example.

Sec. Mark Esper: I’m using that funding to help make sure I have the equipment and everything I need to improve the health and fitness of the force. We adopted a brand-new Army combat fitness test, which for the first time really links physical fitness with the demands and rigors of the battlefield through a new six-element test. But to do that, I need to purchase equipment. I need to train people. We’re also putting that in our maneuver battalions. Our aspiration is to put physical therapists, occupational therapists, nutritionists and sports trainers to really start looking at our soldiers as professional athletes, if you will.

Sec. Mark Esper: And what that will mean is that in the future once these take place and really take hold is we’ll have a more deployable, a more capable force. And those are just two good examples. We can talk about, you know, talent management. My ambition is to overhaul the Army personnel system with a market-based talent management approach. And that is well underway. And that’ll be my priority for this year. But there are a number of things we’re doing to make sure we get at the people issue. At the end of the day, the Army is a people business. And people are most important – are our most valuable asset.

Sec. Richard Spencer: I’ll go back to my three priorities: People, capabilities, and process. People are our most valuable asset. And not surprisingly, they are our most expensive asset. So we have to manage them appropriately. We just finished a study that the under led called Education for Seapower. In my whole business career. I’ve always had mentors who said: Richard, go after the root cause. Don’t prune the tree, look for the limb that needs to be removed, or look to the limb to see why it’s growing the way it’s going. We really came back to education in the Navy enterprise as to be one of the biggest levers that we can control.

Sec. Richard Spencer: We are focusing our resources and our assets from professional education, from deck plates on, all the way up to flag officers. How we assign people after we educate them, why we educate them to do what they do. And then if we do that correctly, put them in an area where that education will benefit the service. Sounds like a brilliant flash of the obvious. We might be a little rusty at that, to be frank with you. So we’re getting after the education side of things.

Sec. Richard Spencer: If you look at what we’re doing out of the Naval Postgrad School, we were scratching our head, wondering if we really were efficient and effective in getting outside the wire. Because one of my drums that I beat to everybody up and down the ladder, uniformed and civilians: If you’re acquiring things, if you’re looking for problems, solutions to your problems, look outside the wire because I will almost guarantee you, some organization out there, whether large corporate, middle corporate, small company, has probably gone through the same problem you are, or have a solution, or something that looks like your solution. This goes to should cost before you find out what it does cost. Frame your argument, frame your data that you can glean from the outside.

Sec. Richard Spencer: One thing that we have learned – and I’m getting off a bit here, but I want to stress this – one thing that we have learned in this exercise is that corporate America and academic America will bend over backwards to help the services of this country. And it’s fascinating. I want to get back to training real quickly. We had the two events over in the Pacific which was our cathartic event. We set up the CR and the SRR, which were the reviews – my review and the CNO’s review. Hundred and ten accepted recommendations. We’re about 89 of them. But it wasn’t just surface warfare where this came in. Every community is looking at themselves and saying: OK, how can we do this better? And it’s – while the institutional framework is there, and support is there to how can you do it better, we’re letting it go down to the command level on how they believe they can do it, best they can. And if they find something that works terrifically, share immediately with the other organizations within your command.

Sec. Richard Spencer: There was a great article of Kessel Run where our PA community had developed their own software and enhanced it, outside of the PA existing institutional software, and developed it amongst their own community. This is the kind of thing that we’re trying to get after in both training and operational – development operations.

Sec. Heather Wilson: I think when it comes to people in the Air Force, the beating heart of the Air Force is the squadron. And the chief and I have been very focused on trying to restore the health and strength of the squadron, its squadron leadership teams, and give the – you know, after sequester, a lot of the support for the squadrons was stripped out. And our people were really over-extended. They were – they were overworked. They were over-deployed. So we’re trying to restore the support for the squadron and the life of the squadron, because that’s where the culture of the Air Force is set.

Sec. Heather Wilson: I think also with respect to people, there are some things that we’re doing with respect to assignments, for example. We are shifting this year all officers will be assigned through a talent marketplace, which is kind of a – it’s a software tool to be able to go in and look at where all the assignments are, bid on your top three, see how many other people are. It’s much more – and we do a matching algorithm. So it’s not just somebody down in San Antonio, Texas looked at a spreadsheet and, congratulations, you know, you’re going to Malmstrom and your wife is going to California. I mean, so we are trying to meet more needs of more airmen on their preferences and their career path.

Sec. Heather Wilson: And I think the final thing I would mention has to do with the resilience of the force. And we all three have this issue, but, you know, how do we provide support in the squadrons so that our force is more resilient long-term? And getting the – we have something called Task Force True North, which really comes out of the special operations community, and putting the physical therapists, the counselors, the chaplains in the units, so if somebody has an issue or a problem that they don’t have to go across the base and walk into somebody’s office and say: Hey, I need help. Because the person that they’re going to get help from is working with them every day and saying, you know, hey, Mark, what’s going on? You don’t seem like yourself today. Let’s talk about this. So trying to strengthen the resilience of our people long-term.

Kathleen H. Hicks: Great. OK. As promised, we’re going to open it up. I ask that when I call on you, you wait for the mic, stand up, tell us your name, one question please. And we’ll start here with Syd.

Q: Thank you, ma’am. Secretaries, thank you all very much for doing this, again. Sydney Freedberg from Breaking Defense.

Q. I’m hearing lots of great things about jointness, about common – or, at least for knowing what standards are for interoperability, about building some things that harmonize together. What I’m not hearing – I hear multidomain on this side of the stage and I hear multidomain on this side of the stage, but I don’t think I’ve ever heard a Navy person endorse that concept in those words. And it certainly seems like it resonates in a lot of the things the Navy is already doing on distributed lethality, electronic warfare. So is the Navy going to officially sign up to this as a joint concept? Is the Navy having reservations? Or is there all sorts of stuff happening behind the scenes that just isn’t labeled that we don’t know about?

Sec. Richard Spencer: It would be the latter. I mean, you talk about multidomain, I look at the air wing of an aircraft carrier. It can shoot a ship. It can shoot a plane. It can deliver power to – project power on land. I look at the P-8. It can launch a – it can launch a Hellfire – I beg your pardon, a Harpoon. It can launch a torpedo. And it can – it can also be your information gatherer, your surveiller. I look at the LCS with the multi-mission modules. I mean, we are in multidomain every single day. That we didn’t sign up and say it’s something new, I apologize. (Laughter.)

Kathleen H. Hicks: All right, let’s see. How about right here?

Q: Thank you. Lieutenant Colonel Mizell, Air Force fellow over at Georgetown. Ma’am, sir, thank you so much for your leadership.

Q. You talked about innovation. Secretary Spencer, you mentioned the MQ-25. Any chance you can give us a quick update on the MQ-25 in the coming year?

Q. And, Secretary Wilson, is the Air Force going to leverage this with its – with its thirst for RPA technology, automated wingmen, all that stuff? Is it going to leverage the Navy’s opportunity here with that new platform? And is it at least going to make its next-generation fighter compatible to be able to operate with the Navy there for your interoperability piece? Excuse me.

Sec. Mark Esper: Air Force fellow setup on you right there. (Laughter.) A plant.

Sec. Richard Spencer: Let me hit you –

Sec. Mark Esper: One question with 18 parts.

Kathleen H. Hicks: Yeah, that was.

Sec. Richard Spencer: Exactly, I know. (Laughter.)

Kathleen H. Hicks: That was actually two questions with 18 parts, but – (laughter).

Sec. Richard Spencer: Yes. (Laughter.)

Sec. Richard Spencer: The MQ-25, industry really leaned in on that, and I think we’re going to see some really exciting things hipping off of a trip that I know I took and I think Heather just took to look at the trainer and how they’re manufacturing out there. I think we’re going to get some benefits on the MQ-25 on materiel design and manufacture. We’re just going to try to push that as fast and as hard as we can. That’s kind of the bottom line for the MQ-25.

Sec. Heather Wilson: With respect to refueling generally, I just was – flew with the first KC-46 from Everett, Washington, down to McConnell Air Force Base in Kansas, felt very sorry for the copilot on his – it was his third sortie and he’s got the head of Air Mobility Command and the secretary of the Air Force in the cockpit with him. I just felt for the guy. (Laughter.) So we’re taking delivery of the KC-46.

Sec. Heather Wilson: Of course, we do strategic tanking, so it’s more of a global perspective of how do we – how do we drag somebody anywhere, anytime globally. The MQ is a little bit –

Sec. Richard Spencer: Organic.

Sec. Heather Wilson: – more of a regional or protect the carrier, fuel the fighters out a little further. So it’s a different mission.

Sec. Heather Wilson: I think the most important thing is that all of these missions work together. The Air Force continues its unmanned – its unmanned aerial vehicle enterprise, and we’ll continue to drive that forward. It’s the part of the enterprise that has grown significantly in spite of the fact that the Air Force itself has gotten smaller and smaller. The unmanned force has gotten larger and larger.

Kathleen H. Hicks: OK. All right, I’ve got one right back here. Yes.

Sec. Heather Wilson: Or remotely piloted, not unmanned.

Q: Thank you. Hi. Connie Lee from National Defense.

Q. Secretary Esper, you talked about shifting dollars away in order to fund all the priorities that you listed. So, with the upcoming budget request, what should we expect to look out for in terms of what programs or priorities may have had some of those dollars shifted away?

Sec. Mark Esper: Well, I can’t get into details, of course, until the budget comes out, but you will – we did shift dollars dramatically into the future, next-generation projects defined by our cross-functional teams. There are at least 31 programs there and there’s a whole other tier right beneath them that also represent our future technology investments. And what you will see is that we shifted money out of programs that the chief and I assessed that, while they had value, they, in some cases, were – we were producing too many of them, in some cases they were unnecessary upgrades that we could live without, in some cases they may have been duplicative with other systems.

Sec. Mark Esper: And so you’ve heard the numbers. Nearly 200 programs were nearly – were reduced or eliminated or delayed. And again, it’s not just – you know, a big chunk of that comes out of the equipping budget. But we were able to, later in the fall, also go after our training, our installation, our sustainment and manning budgets. Much of those changes will come out in the next budget cycle. But we’re already beginning now the round two for our equipping budget for FY ’21. So this is going to be a process that continues on and on.

Sec. Mark Esper: We’ve got to keep sharp pencils and constantly look to the future because dollars tight. Congress is watching. We need to be good stewards of the taxpayers’ generosity. And we need to plan for the future, so we cannot cling to the past, we cannot cling to legacy systems, we need to get to the future if we’re going to fight and win against the Russians and Chinese.

Kathleen H. Hicks: OK. Can we go back over here, way in the back here?

Kathleen H. Hicks: Just wait for the microphone, it’s coming.

Q: Hi. My name is Chloe. I’m a graduate student at American University.

Q. All three of you talked about developing military men or women while they’re in the service.

Q. And I think, Secretary Wilson, you touched on this a little bit.

Q. But how or what programs have you created to develop military service people as they’re leaving the military? As I’m sure you all know, suicide rates, homeless rates are very, very high among veterans. So is there anything that you’re doing before they leave the service to affect that or stop that?

Sec. Heather Wilson: I’m not – I’m actually not sure that suicide rates are higher among veterans than they are in the general population, so I’d encourage you to look at that.

Sec. Heather Wilson: I would – let me flip this question around a little bit and talk about some of the things we’re doing to inspire the next generation to choose to serve. One of the things that we found, you know, in the Air Force is that a smaller and smaller percentage of Americans have a propensity to choose to serve, and so we need to broaden that out. And particularly among pilots, we find that there is – while we have a very diverse force in the Air Force, 20 percent women, significant percentage of minorities, a small percentage of them choose to actually fly, either remotely piloted aircraft or piloted aircraft, and we wanted to change that because it makes a difference long term for the leadership of the Air Force.

Sec. Heather Wilson: So we partnered with Junior ROTC. We looked at our Junior ROTC units. And our Junior ROTC units are 53 percent minority. And these are high school kids who have said they’re interested in some way in aviation. And we – so last summer, we started a program with Junior ROTC and eight colleges and universities that teach flying. And we put out – they had to write an essay and get a letter of recommendation and turn in their grades and things. They had to be in Junior ROTC in good standing, high school kids. And we sponsored 170 of them for seven weeks on a college campus to learn to fly.

Sec. Heather Wilson: We found that minorities and women – if you ask a man, an Anglo man in the Air Force when did you decide you wanted to fly, they will – they say, you know, I was in fifth grade, it’s much younger than women and minorities. Women and minorities are more likely to say high school or college. So let’s go to them when they’re thinking about this and plant the seed. And of those 170 kids, 90 percent of them get their private pilot’s license. There’s no commitment to join the Air Force. We know we have a shortage of pilots in this country. We hope that we’ve planted the seed for the next generation to inspire them to choose to serve in the United States military.

Kathleen H. Hicks: Secretary Esper, you had something you wanted to add?

Sec. Mark Esper: Sure. Look, I agree with what Heather is saying. I would argue that there’s no better institution in the United States of America than the Army, Navy, Air Force or Marines in preparing young people for the future. We teach loyalty, we teach service, we teach honor, duty, management, leadership, we provide valuable skills.

Sec. Mark Esper: My concern is much like Heather said, it’s the propensity to serve is on a steep decline. And the ability to serve, being qualified, is as well.

Sec. Mark Esper: More troubling is, I tend to find, because the Army has launched a comprehensive overhaul of our recruiting apparatus – so more recruiters on the streets, overhauling our websites, social media campaign, everything. But we also launched a 22-city campaign where we go to 22 of America’s largest cities. And what we’re finding is, in many locales – and I think you’ve written about this as well – is we’re finding that the schools are not letting our recruiters in or counselors are not even presenting as an opportunity the chance to serve your country. It’s considered that the only path to success is college and that there are no other paths. And I just think we need to do a better job of crossing America in our school districts, our states, our cities, to present the American military as a great path to the future. Whether or not you serve 30 years, 20 years or three years, I just think no institution will do a better job preparing one’s young daughter or young son for anything they confront in life.

Sec. Richard Spencer: To answer your question, yes, we actually have programs to assist in the transitioning, as does the Air Force and the Army. But I want to make one thing perfectly clear: I’m putting the majority of my resources to retain people, because the amount of money that we spend to train warrants that.

Sec. Richard Spencer: That being said, those that either do not want to stay or that we do not want to have stay, we owe them the ability to transition out to the private sector. And we have enhanced those programs, I would say, dramatically over the last five to 10 years. If I look at what we have done as three service secretaries, we’ve worked with the Council of Governors to make sure that that licensing – the initial problem that we were trying to solve was families being transitioned around the country. But it also goes into active duty transitioning out into the workforce to be able to have a corpsman III be able to be an EMT in multiple states and have the licensing be accepted. And we’re working with the governors to get after that. So, yeah, we’re all in there making sure that those who do not want to stay or we don’t want to have stay have the resources available to them to make a transition.

Kathleen H. Hicks: OK. We have time probably for only one more question.

Kathleen H. Hicks: And let me see, I guess, Sandy, right here, you’ve been very patient, so we’ll go there.

Kathleen H. Hicks: Oh, no. I’m sorry, Tony, it was up – we can do – we’ll do back-to-back. That’s OK. We’ll go to Sandy and then we’ll go to Tony and then we’re done. So the last two back-to-back.

Q: Oh, thank you. For Secretary Esper and all of you – Sandy Apgar, CSIS.

Q. Have you – you’ve committed to put more funding into child care and other family services. Have you looked at the authorities that you have under the military privatization initiatives already to enlist both private capital and business in these, frankly, social and community services?

Kathleen H. Hicks: And just hold on the answer and we’ll go back here for the other one.

Q: Tony Capaccio with Bloomberg News.

Q. It’s tough to segue with that one. You’ve both mentioned – you’ve all mentioned a conflict with Russia, potential. Can you give examples, real-world examples where multidomain operations enabled by this new modular, open-system architecture would play out in the battlefields of Europe on the high seas within a conflict with Russia, assuming it doesn’t go thermal nuclear in a day?

Kathleen H. Hicks: OK, well – (chuckles) –

Sec. Heather Wilson: Let me start. Let me start out with that one.

Kathleen H. Hicks: These go very far. You know, public-private partnerships and thermal nuclear war.

Sec. Heather Wilson: Yeah, child care and multidomain operations.

Sec. Mark Esper: Child care and thermal nuclear weapons.

Sec. Heather Wilson: Let me – let me – let me start out at the multidomain.

Kathleen H. Hicks: Yes, please, go ahead.

Sec. Heather Wilson: So let me give you an example. The United States Air Force operates 80 satellites. Some of them provide communications, some of them – some of them do tactical – do missile warning. So an Air Force satellite detects and locates operations on the ground. That information can be sent directly to forces in the field so that a – that a Navy ship or an Army battalion can redirect fires and destroy things. So any sensor, any shooter, that’s where we – that’s where we want to get to.

Sec. Heather Wilson: So it is linking up in near-real-time space, air, manned, unmanned, ground and sea so that when we detect a problem everybody knows about it and everybody – and the fires are directed to be able to overwhelm an enemy before they even know what’s going on.

Sec. Heather Wilson: Now, child care, there you go, over to you.

Sec. Mark Esper: Can I – can I follow up on yours a little bit?

Kathleen H. Hicks: Go ahead. Go ahead.

Sec. Mark Esper: Tony, last year, the Multidomain Task Force that the Army has stood up out in the Pacific conducted an exercise. In that exercise, an Apache helicopter from the cockpit guided a drone to locate in the distance a Navy target ship. That drone, through the Apache, relayed targeting data back to a ground-based Army rocket system and I think a Navy ship as well to engage it. To me, that’s multidomain operations or at least a good example of it.

Sec. Richard Spencer: That was an intentional Navy ship target zone. (Laughter.)

Sec. Heather Wilson: It was Billy Mitchell who came in.

Sec. Richard Spencer: Exactly. Well, I’ll go to child care for a hundred. (Laughter.)

Sec. Richard Spencer: I think we talked earlier how we view the multidomain. I mean, if you look at the carrier air wings, as I just said, Tony, I mean, we’re fighting on air, in air, on sea and under the sea at all times. And I think Heather puts it perfectly, which is any sensor, any shooter.

Sec. Richard Spencer: In the F-35 cockpit, push a button or find, fix your target, launch. It might come out of a U.S. Army hurt locker, it might come out of a Marine Corps marine missile, you name it. I mean, that’s the whole concept.

Sec. Richard Spencer: I will segue real quickly because this is an item that three of us have been talking about when it comes to child care and the social services provided to our troops. They are our most valuable and they are our most expensive. One of the things that I struggled with 10 years ago on the Defense Business Board was, you know, we’re warfighters, why do we have all these ancillary services that we’re providing when in fact outside the wire there’s a much more effective, a much more efficient delivery system? I want to make sure that our uniformed folks and our civilian teammates understand the true cost. If they want something, fine, we will supply it to them. But if they don’t want something, please tell us so we can take those resources and apply them to where they want to be.

Sec. Richard Spencer: You go on any base and you – my wife just came back. When she first started traveling me, she said it’s amazing when I ask to see what the resources are available. In some cases, there are three or four providers of the same resource and they’re not talking to each other. If we can consolidate and coordinate and effectively use the resources to get what our troops and our civilian teammates need, that’s the goal.

Kathleen H. Hicks: Great. Secretary Esper, Secretary Spencer, Secretary Wilson, thank you very much for your time today and for all you’re doing for the nation. Please join me in a round of applause, please. (Applause.)

Sec. Richard Spencer: Thank you.

(END)