Lisa W. Hershman, Dana S. Deasy and Robert J. Sander testify at a hearing of the Senate Armed Services Committee as the committee considers their nominations to serve as Defense Department chief management officer and chief information officer and Navy general counsel, respectively, October 29, 2019.
Transcript
Do want to consider the nominations of Mrs. Lisa Hershman to be the Chief Management Officer of the Department of Defense, Mr. Dana Deasy to be DoD Chief Information Officer and Mr. Robert Sander to be General Counsel of the Navy. Thank you for being here today. Ms. Hershman, I know that you’ve been performing the duties of CMO for almost a year. And Mr. Deasy, you were the first appointed to this position of CIO in May of 2018. And so, we seem to have a lot of people who are already pretty much on the job here, although the law made it clear that the current incumbent, you in this case Mr. Deasy, could continue to service without confirmation, but the President though you needed to be confirmed anyway and I think we all agree and I know you do. So, we look forward to that. All that to say, Ms. Hershman and you and Mr. Deasy have extensive experience in the specific positions for which you’ve been nominated. Mr. Sander, you’ve been served as a Army’s Principal Deputy General Council since July of last year and I’m grateful that you are willing to bring your expertise as a lawyer and a councilor and advisor to bare as Chief Legal Officer of the Navy. We have our standard required questions to ask and answers and when I ask eight questions and if you’d be, all three of you would be audible in your answers so we can get you on record, we’d appreciate it. First of all, have you adhered to the applicable laws or regulations governing conflict of interest?
[Hershman, Deasy, Sanders] Yes.
Will you ensure that your staff complies with deadlines established for requesting communications including questions for the record in hearings?
[Hershman] Yes.
I just heard one.
Yes.
Yes.
Very good, very good.
Will you cooperate in providing witnesses and briefers in response to the congressional request?
[Hershman, Deasy, Sander] Yes.
Will those witnesses be protected from reprisal from their testimony and briefings?
[Hershman, Deasy, Sander] Yes.
Do you agree if confirmed, to appear and testify upon request before this committee?
[Hershman, Deasy, Sander] Yes.
Do you agree to provide documents, including copies of electronic forms of communications in a timely manner when requested by a duly constituted committee or to consult with the committee regarding the basis for any good faith delay or denial in providing such documents?
[Hershman, Deasy, Sander] Yes.
And have you assumed any duties or undertaken any actions which would appear to presume the outcome of the confirmation process?
[Hershman, Deasy, Sander] No.
We’ve always said that the war is the most dangerous situation that we’ve had in our lifetime. The National Defense Strategy makes clear, the strategic competition with China and Russia, not terrorism, is now the primary national security concern. China and Russia have passed us in key areas and are catching up in other areas. We can no longer take America’s military superiority for granted. You know, at one time we were all working on hypersonics and of course now, we see that Beijing just paraded dozens of massive hypersonic missiles and we haven’t even built one ourselves. So, we’ve got a lot of catching up to do. The committee has spent most of its time and effort in the past year, ensuring the DoD has the authorities and the resources it needs to implement the 2018 NDS. As senior leaders in the Department of Defense, in the Department of the Navy, each of you will play a key role in number one, building the more lethal force. Number two, strengthening our alliances and building new partners in a particular reforming the Department of Defense for a greater performance and affordability. You come for this committee at a critical time. We know we have a two-year budget agreement; it’s gonna have to pass the National Defense Authorization Act and the Defense Appropriation Bill to ensure timely funding for the Department of Defense. Now, as soon as we hear from Senator Reed for his opening statement, we get to you Senator Young for your introduction. Senator Reed.
Thank you very much, Mr. Chairman. Let me join you and welcome Ms. Hershman, Mr. Deasy, and Mr. Sanders to this morning’s hearing. Also like to welcome Ms. Herman’s husband, Brant, Mr. Deasy’s wife, Carla, as well as Mr. Sander’s family including his wife Ingrid and their son Javier Rotado. We are pleased that you all could join us this morning. Ms. Hershman, you are nominated to be the Chief Management Officer, a difficult assignment, considering the unique management challenges posed by the Department of Defense. Prior to joining the department, you worked on management reform initiatives in the private sector and for over a year now you have focused on instituting management reform in the Pentagon. I hope you will share your plans with the committee on how to reform the department’s management processes, including your vision for finding and retaining people with a modern management expertise and skills and feels like data science, to work on the huge management challenges in the Department of Defense. Mr. Deasy, you are nominated to be the Chief Information Officer, a position you have held for nearly a year and a half. Prior to serving the department, you served as a CIO for JP Morgan Chase where you managed the bank’s investment information technology and cyber security. The CIO function in the Department of Defense has often been criticized as weak and ineffective which has lead it being marginalized. I hope that due to your success and our tracking someone of Mr. Deasy’s stature and capability to serve as a CIO heralds a new trend for the department. Furthermore, I note that the Secretary of Defense has entrusted Mr. Deasy with many critical responsibilities, such as artificial intelligence, cloud computing, network modernization, data strategy and cyber security. I look forward to hearing how you will make sure that all military services are in sync as they develop and adopt new IT systems and capabilities. Mr. Sander, you have been nominated to be the Navy General Counsel. The Navy has not had a Senate confirmed General Counsel since January 2017. And during that time the Navy has had to deal with numerous high-profile legal issues. The Navy continues to struggle with the fallout of Fat Leonard scandal. In addition, the Navy has several high-profile cases involving the Navy Seal community, raising questions about the ethics and culture of this elite community of warriors. Finally, the McCain and Fitzgerald ship collisions have raised questions about Navy readiness for sustained operations and legal questions about the role and responsibilities of senior Navy officials. These issues will require continuous attention. Finally, the Secretary of the Navy has directed a comprehensive review of the Navy and Marine Corp military legal communities. Although, this review has not been directed to examine the office of the Navy General Counsel, it may assess the relationships and division of duties between the Navy and Marine Corp JAG offices and the Navy General Counsel. If confirmed, Mr. Sander will be called upon to provide his advice on these and other complex legal matters. His experience in the Army General Counsel’s office and as an Armory Reserve Judge Advocate, should equip him well to take on these challenges. Thank you, Mr. Chairman.
Thank you, Senator Reed. Senator Young, you’ve requested to introduce Ms. Hershman. You are recognized.
Well, thank you Chairman Inhofe and ranking member Reed and members of the Senate Armed Services Committee. It really is an honor to introduce my friend, Mrs. Lisa Hershman today. She’s joined by her husband, a fellow Hoosier, Brant. And he has been supportive of every step of the way. Having served as the acting Chief Management Officer at the Department of Defense, for almost the past year, Ms. Hershman likely needs no introduction to the members of this committee. But, for those members who have not yet had the privilege of knowing her, Mrs. Hershman is an exceptional leader who has served in critical business transformation roles both in and out of government. Following her time in school, where Mrs. Hershman earned a degree in engineering and industrial distribution, she began her career managing a portion of the Sea Wolf Submarine Program. From there, Mrs. Hershman went on to work for Avnet, where she oversaw the company’s work as a global distributor of electronic components and technology systems. In that capacity, Mrs. Hershman was recognized as the executive in charge of transformation and customer experience in 72 countries. Mrs. Hershman is also the co-author of the internationally acclaimed bestseller book, “Faster, Cheaper, Better”. This book has been featured in Business Week Forbes and Investors Business Daily. She’s also served on the Indiana Commission for Women and the Indiana Commission for Higher Education. Both important organizations in my state. With her extensive experience, Mrs. Hershman knows that meaningful lasting change does not occur by fiat, but instead by listening to and empowering others. That mindset will enable her to be effective as she works to improve processes within the department. This is precisely the background of someone who will take on the challenges and opportunities associated with this new position in the department. In the months ahead, I know Mrs. Hershman will work diligently to transform business practices and to find efficiencies while helping to create a more lethal and effective fighting force. I’m grateful that she has accepted the call to serve our country. She’ll be a true asset to DoD, to the presidents and to our nation. I look forward to supporting her nomination when it arrives on the senate floor. I thank you again for this opportunity to appear before this committee today, Mr. Chairman. Congratulations Lisa. Mr. Chairman.
Thank you, Senator Young. Thank you and you’re welcome to leave or stay, your choice.
Thank you, I’ll dismount. (laughing)
Good. We’ll now just turn to our opening statements. I’m going to start with you, Ms. Hershman and work across. You’re recognized.
Thank you, Chairman Inhofe, ranking member Reed, and members of the committee. It is an honor to be before you today as the President’s nominee to be the Chief Management Officer of the Department of Defense. I’d like to thank my husband Brant for being here with me today and to also celebrate the memory of my mother, who passed just two weeks ago, as well as my father who served our nation in the Navy during World War 2. He took great pride in fighting for his country and it is an honor that I offer my service to support our nation’s servicemen and women. As an engineer, senior executive and author, I have focused my career on business transformation and reform in the private sector, driving increased operational efficiencies in a variety of settings; from non-profit associations to government to household names of the Fortune 100. We know that in order to succeed, companies must be prepared to respond to changing business conditions and global competition, while meeting the needs of their customers. While the stakes are very different, responding to changing conditions with agility and an eye towards costs and our global competition is also a key priority of the Department of Defense. The charge of defending our nation’s interests while serving the needs of our war fighters, is a solemn responsibility. In business reform it is an essential component of our future success. The motto of the CMO is, “Efficiency For Lethality”. It reflects the imperative for our war fighters to be fully prepared to meet and prevail against any threat to our nation’s interests throughout the world. In support of that goal, the CMO is tasked to ensure that our resources are utilized as efficiently as possible and that our administrative processes and shared services support our ability to accomplish that mission. Our war fighters rely upon their leadership to prepare and equip them to defend our nation. Too often, they are forced to navigate clumsy and outdated processes and bureaucracy. If I am confirmed, my goal is to institute lasting transformation that becomes an integral part of the culture at the Department of Defense, making it easier for the men and women of our military to perform their mission, while ensuring the highest possible value to tax payers. However, management reform isn’t just about saving money. Making our military stronger and more effective will certainly involve a cost-cutting component and will result in cost-savings in numerous areas, but it also includes putting in place training and system changes, eliminating redundant systems, maximizing shared service delivery, streamlining business operations, up-skilling our workforce, sharing metrics, using data to inform decisions, and leveraging the strength of culture that sustain that transformation for a long time. While these goals of efficiency are similar to those in the private sector, the risks of change are much higher for the military and the size of the Department of Defense can make the pace of change painfully slow. Nonetheless, I’m encouraged by the progress we have made with nearly five billion in validated savings, as well as increased operational efficiencies and I am pleased to report that the pace of progress is accelerating. This is due in no small part to the strong message of support we have received from the White House Secretary Esper and Deputy Secretary Norquist. That being said, we also recognize that we have much more to accomplish and if confirmed, I look forward to working with this committee, the congress and the administration to achieve these goals. I appreciate your time this morning and look forward to answering your questions.
Thank you, Ms. Hershman. Mr. Deasy.
Mr. Chairman, ranking member, and distinguished members of the committee, thank you for the opportunity today to discuss the important work and position of the Department of Defense Chief Information Officer. As you know, I currently serve as the DoD CIO in non-senate confirmed capacity. I am honored that the president has nominated me for this position of the now senate confirmed, DoD CIO. And I’d like to thank Secretary Esper for his continued support. First and foremost, I would like to recognize and thank my wife Carla. I would not be here today without her support. I received the call to serve while on retirement, hiking in the mountains of North Carolina. As I thought about that decision on that day, it was Carla who reminded me that it had always been my aspiration to serve this great nation. She gets full credit for me being here today. Thank you for your love and amazing support. After almost a year and a half in this position, I can tell you all this was absolutely the right decision. Although this is my first position in government, during my 38 year career, I’ve had the opportunity to work for some of the most large, complex companies in the world, including building and launching the space shuttle at Rockwell, the automotive industry at General Motors, my international experience at Seamen’s, the oil and gas sector at BP, and most recently at JP Morgan Chase in financial services. All these positions have one key thing in common. Technology is at the heart of their success. My diverse industry experience has been an incredible asset in navigating the complex and dynamics of the Department of Defense. I have been in this role now since May 2018. During this time, the office of the DoD CIO has accomplished a number of significant achievements in support of the national defense strategy. My first priority was building a world-class team within DoD CIO. The new team is now in place and is at the heart of implementing the DoD digital modernization strategy. I am humbled that I’ve been given this opportunity to lead such a group. The digital modernization strategy advances the NDS. Vision of leveraging key technologies, specifically cloud, artificial intelligence, command control in communications, and cyber security. We developed the first cloud strategy to move the department towards enterprise war fighting cloud. As you may be aware, last week we awarded an enterprise cloud contract to Microsoft. We wrote out an AI strategy that outlines five pillars critical to accelerating DoD’s adoption and integration of AI. We stood up the Joint Artificial Intelligence Center as the focal point to accelerate and scale the fielding of AI across the department. We have developed a comprehensive cyber security program that addresses our great cyber risk, creates accountability to ensure that improvements are made. Additionally, we have several IT reform efforts underway with the goal of finding cost-savings that can be leveraged effectively, support the department’s mission. Regarding the second line of efforts in the NDS, we continue to strengthen relationships with international, interagency, and industry partners to promote technology collaboration. Finally, we detained the department’s highest score ever on the Federal IT Acquisition and Reform Act. Since the day I arrived, my objective has been to ensure our war fighters have the tools they need to fight and win in the great power competition. This drives everything I do. Should I be confirmed, my commitment to the president, the secretary, the congress, and to the soldiers, sailors, airmen and marines and civilians of the Department of Defense, will be to implement the digital modernization strategy. This will be critical to supporting the National Defense Strategy by modernizing our digital environment. Technology is foundational to how our war fighters will fight now and in the future. Thank you for your time and consideration and I look forward to your questions.
Thank you, Mr. Deasy. Mr. Sander.
Chairman Inhofe, ranking member Reed, and members of this Armed Service Committee, it’s an honor and a privilege to appear before you today as the president’s nominee for General Counsel of the Navy. Thank you for affording me the opportunity to testify before you today. I’d also like to thank Secretary Esper and Secretary Spencer for their confidence in my abilities to lead the Navy office of General Counsel. To my family, especially my wife Ingrid, who’s a grade school nurse. And our children, Javier, seated behind us who’s a senior this year and is JROTC Battalion Commander. Robert Jr., Heidi, and Johan thanks for you do. Like so many other families, especially those with military ties, I know it hasn’t always been easy, but I truly appreciate all your love and support. For the past 19 and a half years, I have been fortunate to serve in uniform as a member of the United States Army Reserve Judge Advocate General Corps. I served with some of the best soldiers, sailors, marines and airmen the world has ever seen. In addition to my JAG Corps experience, I’ve been fortunate to currently serve in the Army in a civilian capacity, as a senior official performing the duties of the Army General Counsel and a Principal Deputy General Counsel of the Army. Having Naval service has always been in my DNA. During World War 1, my german grandfather was a member of the German Navy. While serving in the war to end all wars, he was captures by the United States and became a prisoner of war. Several years later, he married my grandmother, became a United States citizen, enrolled in The United States Navy and eventually became a US Merchant Marine and a Master at Arms during World War 2, fighting Nazism and Fascism. Four of his sons including my father, who was a naval fireman on a submarine during World War 2, also became members of the greatest generation to whom all of us are deeply indebted. My family’s rich history of service to this great nation has had a profound impact on my life and my world view. I’m sincerely grateful and humbled at the chance to continue my service in this meaningful way. Secretary Spencer has established three priorities focusing on people, capabilities, and processes in order to ensure current and future mission success. If confirmed, I will assist Secretary Spencer and the Navy and Marine Corps leadership in taking care of our service members, their families, the civilian workforce and our retirees. After all, people are the Navy and Marine Corps greatest and most treasured resource. As we prepare for future conflicts, the Navy and Marine Corps must be capable of providing maritime dominance and power projection around the globe. If confirmed, I will assist the Navy and Marine Corps leadership with improving readiness, lethality, and modernization across the Navy and Marine Corps so that our nation maintains the advantage and access the conditions in this great power competition with Russia and China. The Navy must continually improve our processes to meet current and future challenges. In light of future budget constraints and uncertainty, we must maximize the use of every dollar. If confirmed, I will continue to assist the Navy and Marine Corps leadership with building upon the reform agenda that also had already begun. As a Department’s Chief Legal Officer, I will be responsible for leading a talented group of attorneys and professional support staff for both the Navy and the Marine Corps. If confirmed to be a Navy General Counsel, I along with my partners in the law firm called, Navy Law, Vice Admiral John Hannink, who’s the Navy Judge Advocate General and Major General Dan Lecce, who’s a Staff Judge Advocate to the Commandant of the Marine Corps will ensure that our legal team is proactive and engaged with our clients. Also to commit ensuring that our legal team zealously follows and enforces the United States constitution and all other laws. I further promise if confirmed, that our legal team will tirelessly support the total military force, their families, the civilian workforce and our retirees. And finally, I will hold myself, my colleagues, and my legal team to the highest of ethical standards. After all, the American people deserve nothing less. In closing, I’m honored and humbled to have been nominated by the president as the Navy General Counsel and grateful for your consideration of my nomination. And I look forward to your questions. Thank you very much.
Thank you, Mr. Sander. I appreciate the fact that all three of ya in your initial documents that you supplied to this committee, were very complimentary of this document here, this National Defense Strategy Commission. Something we’ve complimented for quite a period of time, as equal democrats and republicans putting it together. And it has the recommendations, we’ve been adhering to these recommendations ever since this report came out. Ms. Hershman, in the NDS it outlines three lines of efforts to generate decisive and sustained US military advantage. One of those three is often underappreciated and is, reforming the department for greater performance and affordability. What is the CMO’s role and contribution to the NDS?
Senator, under title 10, 132A in particular, it outlines the role of the CMO. And part of my many duties include driving the business operations of the department. That’s looking for efficiency, effectiveness, undoing duplication, finding reform, driving reform, also making good use of shared services, having direction, authority, and control over what’s called, the Fourth Estate, which is 28 defense agencies and field activities plus the joint staff, plus OSD. And so, part of my role in support of the Deputy Secretary, as well as the secretary, as a principal advisor to them, is to find areas where we can seek efficiencies, effectiveness and not hamper our lethality and readiness. And to that end, I support much of line of effort three, as well as line of effort one of the NDS.
Good, ’cause that’s not talked about as much as some of the other areas. Mr. Deasy, in the years I’ve been on committee, I don’t remember anyone having the rounded experience and background that you have had. And not just the obvious thing as the CIO JP Morgan Chase, but also with BP and General Motors, Tycco, Seaman’s. So, you’ve done it all and I just have to ask the question. You’ve been exposed now to this job, what is it about it you’re willing to continue on with all this background that you bring to the table?
You know, this started about three years ago when I had the chance while at JP Morgan, to host all the agency CIOs, the Department of Defense CIOS. And I remember that day Senator, when I went home and spoke to my wife, I said, you know, the missions that they described to me, the challenges they face, just are enormous. And I remember saying to her at the time, I said, I wish someday there was a chance that I could help in some capacity. So, when I got the call, they asked to come and serve, you know, as I pointed out in my opening remarks, Carla was very quick to point out this was your opportunity. I have to tell ya, since arriving, there’s not a day that goes by when I walk the hallways of the Pentagon and you see the young men and the women and you really do feel a sense of accountability on your shoulders that you have to deliver, you have to deal with the concerns and the challenges they face. And I feel very honored to have this. I’m very committed to doing this and I’d rather be no other place than here right now, Senator.
That’s the kind of answer you hope for. The people out there in the real world are wanting to payback a little bit. We appreciate it very much. Mr. Sander, I’d say the same thing with your background. The things that you’ve referred to, what the first test that you’ll take, but you didn’t outline what those steps would be. What would be the first thing you’re anxious to get involved in?
Inside of the first thing that I need to do is build relationships within the Navy. There will be relationship building between the Navy, Secretary of the Navy, the assistant secretaries and also the senior leadership in the Navy and Marine Corps. They have a lot of issues right now dealing with legal issues, as you outlined in your opening statement, as well as Senator Reed did. And I need to get a better look on how we can best address those for the future of the Department of Navy. Our sailors and the taxpayers deserve nothing less.
Well, I appreciate that very much and the fact that all three of you have recognized that we’ve slipped a little bit. When I talked about hypersonics and how we were ahead at one time and right now we’ve fallen behind. And you know, when you talk to the American people, they assume that we have the best of everything. The three of you know that we don’t right now, but we will with your service. Senator Reed.
Thank you very much Mr. Chairman. Mr. Deasy, as you indicated last Friday, the JEDI Cloud account was awarded. It has not been done without some controversy. Going back last, many months ago, it’s been reported that the president called then Secretary Mattis and suggested that their JEDI competition be looked at closely. July, he said he’d take a very strong look at it himself after saying he could hear complaining from different companies. The importance of this contract, as you very specifically and eloquently stated, is so critical to our national security that it has to be beyond any type of political engagement. It has to be done right down the middle. Can you describe the steps that you and others in the department took to ensure that the JEDI Cloud Computing Competition was not subject to political influence by the White House or anyone within the Pentagon?
Yes I can. So, when I arrived, Senator, there was two initial things that I did. One was to step back, look at the strategy. How was JEDI gonna fit into that strategy? How was the RFP being constructed? What was the nature of what we were asking for the offers to produce? The next thing we did was when we, after we submitted the RFP, we took the team of individuals, we went out and found approximately 50 government civilian servants that were experts in cloud computing and we compartmentalized them and we segregated them into teams. At no time did one team have access to what the other team was working on. And probably the most important thing we did, was the third step. And that was, we have kept the identity of every member of the source election team anonymous throughout this process. Finally, in my discussions that I have had with the Deputy Secretary of Defense and the Secretary of Defense, at no time throughout this process have I ever shared any proprietary source information with them nor have I ever divulged when we got to the conclusion who the awardee was.
Thank you. Just following up. Are you aware of that any officials in the White House to begin and tried to contact or did contact any of the source selection officials or team members?
To the best of knowledge, nobody has contacted from the White House, any members of the source selection team.
Thank you very much. Ms. Hershman, as we’ve all indicated, you have a very challenging job and one of the challenges is to maintain, not only maintain but enhance the civilian workforce of the Department of Defense. Can you give us any ideas that you have now, how we can attract and retain capable civilian management personnel?
I do have experiences myself in my role as either the DCMO or the acting CMO in that, I was given the new directorate to manage the Chief Data Officer. We had some challenges with hiring and attracting data scientists, because much of the private sector is also looking for the same type of people. So, couple of things that we did. Number one, we found that especially those in mid-career, are looking for something more challenging. And having the ability to speak at several conferences where these folks are attending, I said to them, if you’re looking for a large complicated project that really wants to stretch your abilities, come to the Department of Defense. We have them in spades. And it was actually quite intriguing for them. We’ve also looked internally and have some very very sharp, capable individuals that not only had the skillset from a data management standpoint. but also aligned with some of our reform initiatives. We have folks that have a background, not only in data science, but also in readiness. We even have a young man that’s working for us, who’s father worked in DECA and so understanding commissaries and exchanges. And finally, we turned to our defense business board and we held a panel of those in industry and said, how are you recruiting and how can we get in on this? And specific to data scientists, we learned that many are now going after mathematicians, those that have the skills, but we can give them training while they’re on site. So, we attract them from something new and something different from outside of what they’re currently working in the private sector. We’re seeking public-private partnerships. I’ve actually entertained internships. Those are some of the ways that we’re putting, some of methods we’re putting in place to attract talent.
Well, thank you very much. My time expired Ms. Hershman, but I’m sure an Army lawyer can be capable of discharging these duties, thank you.
Thank you, Senator Reed. Senator Rounds.
Thank you, Mr. Chairman. Ms. Hershman, I’m one of a bipartisan group of 23 senators and 42 members of the House. And I’ve asked the Secretary of Defense to test a solution to improve access to retail pharmacies in the TRICARE program for those beneficiaries who rely on brand-named maintenance medications. The bottom line is, that right now if you’re in a rural area, you have to either travel to MTF, a facility, a military facility, or you have to use the mail-order processes in place. What’s been left out is local retailers. Local retailers have the retail pharmacies and a lot of the rural areas, they would be the easiest and the ones with a professional on hand in order to help these beneficiaries of TRICARE. My question to you is, there has been a test pilot or a pilot program which has been developed. These retailers would like an opportunity to have that pilot project tested and to be able to provide those local services. Will you take a look at that test program, that pilot program, and would you work with us to be able to provide those services in those rural areas?
I would be more than delighted to work with you and look at that test pilot. Yes sir.
Thank you. We’ve had some real leadership in this particular area under both, under Secretary for Personnel and Readiness, from Robert Wilke to Stephanie Barnett, James Stuart, we’ve even seen the pharmaceutical retailers offer this pilot program that has addressed a lot of what pharma’s concerns were. So, if you would please, I think this is a step in the right direction and I think with a little bit more of a push from the top, we might be able to help a lot of families out there that have been limited to the professional expertise that they could get if they had the local retail pharmacy helping them. Thank you.
Thank you, Senator.
Thank you. Mr. Deasy, I most certainly appreciate this opportunity to have you share a little bit about what’s going on in the Department of Defense with regard to JEDI and a little bit about your concerns with regard to how we move into a cloud computing future. Can you talk a little bit, just so that perhaps we understand a little bit better? What we’re really talking about is a concept in which we have a single concept or a single approach, a single approach to being able to share information from one system to another. Can you talk a little bit about the challenges right now and the way that we have multiple systems out there that don’t talk to one another within the Department of Defense? Might want to turn your system on there.
Yes, Senator. One of the things I will point out, was when the digital modernization was put together, somebody once asked me, why is cloud the first of the four parts of the digital modernization? I’ve always said, cloud is the foundation of which everything else rides on top of. If we don’t get a right enterprise cloud in place, our ability to do advanced machine learning, artificial intelligence, next generation command and control communications and secure the department a different way, will be very challenging. To the question you raised about what is the environment today. Today, we have a multitude of clouds. We are not short, Senator, on the number of clouds and the types of clouds we have. All these clouds were built over the years in very disparate, siled manners. I had a chance about two month ago, to go to Afghanistan and to actually visit the troops and watch how operations occurred. And there was some aspects of that were very inspirational that day and there was some things that were really quite discouraging. When you saw an operator and how they have to do their job, where they had to go to one system to get the information they needed to do about what was the adversary they were looking at on the screen, the next system they had to go to to decide what actions to take and then finally, a third system they might approach to as to where our assets were on the ground. There was a lot of movement, a lot of disparate. And it was very very, it screamed out at me on that day, that we are doing absolutely the right thing by putting in a single cloud that integrates our unclassified data, our secret data, and our top secret data, that most importantly it’s getting that data from that cloud out to the tactical edge.
But when you say that now and this is the part that I think is really important, can you talk a little bit about the fact that that data remains secret at the secret level, top secret at the top secret level, and what you’ve really talked about here is the protocols necessary for that communication to occur. It’s important that I think the public understand we’re not giving people access to secret data, because we have everything on one so-called network. Talk about that a little bit please.
Yes, Senator. You are absolutely correct. One of the uniqueness’s of this environment that we’ve created, is what’s called, multi-domain data classes. The idea that we keep unclassified data segregated from classified data all the way up the top-secret data. But, it’s done in a way that allows the war fighter to access what they need from an unclassified all the way to a top secret in an integrated, interoperable manner.
Thank you. My time is expired. Thank you, Mr. Chairman.
Thank you, Senator Rounds. We have a quorum right now, so I ask the committee consider a list of 1780 pending military nominations. All of these nominations have been before the committee the required length of time, is there a motion to favorably report this list of 1780 pending military nominations to the senate?
So moved.
[Senators] Second.
All those in favor say I.
[Senators] I.
Motion carries. Senator King.
Thank you, Mr. Chair. Mr. Sander, I appreciated your testimony, both written and oral. Quote, “I further promise if confirmed “that our legal team will tirelessly “support the total military force, “their families, “the civilian workforce, “and our retirees.” Wanna ask you about an issue of deep importance to military families. There is a program called, The Exceptional Family Member Program. And this is a program for military families who have dependents with disabilities. There’s about 132,000 military families that are enrolled in that program, because they have a child with a disability. The GAO did a report of the program in 2012, finding huge gaps in the military support for these families. The GAO did a report in 2018 and found exactly the same thing. In fact, found that almost all of the recommendations made to the Department of Defense in 2012 had not been complied with. One of the requirements of the program is that any military family that is enrolled in this program have a sort of designed plan. Sort of like an IEP, individualized education plan, within public schools, to try to make sure that the family member with a disability is receiving the services that they need. The 2018 GAO report found that there were only 6000 such plans even though there were 132,000 family members enrolled in the program. Recent press has disclosed that one of the issues that creates challenge for families, is if the children are enrolled in local public school systems and they’re attempting to receive special education services. There is a real variation among the service branches in terms of the support given to family members. The Marines provide the family member support as they’re dealing with the local school systems to try to get the best program for their child. The Navy does not. I wanted ask you, would you take a look at the program, this EFMP program, should you be confirmed and try to make sure that what you’ve committed to in your testimony, that family members are supported, is actually happening in the Navy? Namely, that Navy families that are enrolled in the program receive the plan that they’re supposed to receive and that they also receive help in dealing with local school systems as they advocate for their children.
Yes, Senator. I’ll be glad to take a look at that. As I mentioned earlier, my wife is a school nurse. I also have two sisters that are DoDEA teachers as well.
So, taking care of our families and their children and their dependents, is a high priority for me. I think it also comes down to readiness. So, we need to make sure that our sailors, soldiers, marine and airmen know that their families are taken care of. So, when they’re acting on behalf of this nation, they’re not worried about what’s waiting at home and what might go wrong.
The only challenge here is not just with the Navy. Every branch has its own standard of whether, nobody’s meeting the standard fully. But, should you be confirmed, I’d like to follow up with you on this matter to see what the Navy is doing to support these families.
Absolutely, Senator.
Great, thank you. Ms. Hershman, I would like to ask you in your current role, but especially in your future role should you be confirmed, how do you use or plan to use the audit mandated by congress of the DoD, to not only find dollar efficiencies, but also find effectiveness improvements?
So, you probably saw the reaction on my face. I smiled when I heard the word audit.
Yes I did. You almost jumped out of your chair.
Probably a little rare for most people. My father was an accountant, so I think he’s very proud of me right now. I was early on, when I started at the Department of Defense, I made a point to get to know Mr. Norquist and his role as the comptroller, for a couple of reasons. One, I knew that having the comptroller as a partner to CMO, whether it be reform or managing data, etc. It was going to be important. The CMO early on, advocated for being a partner in sponsoring the audit. One of the key outputs of that audit is the data. We have developed, my data science team along with comptroller folks, have developed a tool called Advana, in which we are using a repository to gather that information and it has already given us information that is very vital to my role. I say to folks that I use the audit to inform reform, because from that data, I can tell what are systemic issues pervasive throughout the organization and what might be an anomaly. I want to focus on those systemic issues, in that in the five categories from the audit, 94 perfect of the findings came from three areas. I know that’s where I need to point and look for lasting change.
And I would like just to underline this, having insisted upon the audit and finally insisted that the long ago required audit actually be done by the DoD, this committee is very focused on the audit and we don’t wanna just use it for our oversight, if that’s all it does, it’s not effective. The real issue is, will you use it internally and not just use it to solve financial challenges. Sometimes people look at audits as kind of a financial correction mechanism, but to find patterns as you suggest, to figure out ways to not simply save money but I think your motto was you know, efficiency to improve lethality, not just to save money, but also to improve the effectiveness of the program. So, if you would, just consider this and you might say the same thing to Mr. Norquist. When you’re back before the committee, we’re likely to always ask you what are some success stories from the audit. What are things that you’ve learned in the audit, how have you saved money, how have you improved the effectiveness? Because then we’ll know that it wasn’t just our requirement, but that the DoD culture is also embracing the notion of continuous improvement that an audit can help you achieve. Thank you very much. Thanks, Mr. Chair.
Thank you, Mr. Chairman and thank you to each of you for being here this morning. Ms. Hershman, I want to continue basically where Senator King was moving, talking about these deliverables that are so necessary. And in the 2019 NDAA, you are tasked with reducing covered activities and contracting 25 percent. And the first benchmark was an initial plan, but that arrived from your office a couple of months late. And GAOs review of that document was not a favorable review and left a lot of questions that were out there and they really, their comment was that it was difficult to access the feasibility of future reforms based on what you delivered for them. The second report was due at the beginning of this month. And the reforms identified, came in at five percent across the baseline instead of the 25 percent that you have been mandated to meet. So, we’ve got two timelines and two sets of deliverables that have been missed in this process so far. And we’re looking at January, where there is another report that is due. So, I want you to lay out for the committee how you are approaching this report in January, what are the deliverables and the savings that you have identified, how are you going to reduce those covered activities, like services, contacting, and real estate management, so that you are going to hit that target, because this Fourth Estate reform is vital to effectiveness and efficiency and as you say, keeping that focus on lethality.
Senator, in that report the 25 percent target also included the statement that if it would be injurious or inefficient to meet that 25 percent target, please state why. And the timeline for meeting that target was within one fiscal year. And across all of the Fourth Estate, the average came out to be about five percent. However, within that and this came largely from ranking member Thornberry and his legislation, and I’ve had conversations with ranking member Thornberry on this. And some of the things we discussed was a focus on the Fourth Estate and particularly base lining within organizations like Washington Headquarters Services. Some of the things that we are doing within my own directorate with regard to say, civilian management, which is one of the covered areas, we actually have a target of 30 percent in the fiscal year.
And do you have a timeline for meeting that target?
Yes.
With said deliverables that are attainable?
We do.
Okay, because we all know that within DoD, there is a lot of waste. And there (clears throat) pardon me, is a tremendous amount of utilization (clears throat) pardon me, not utilization, but a tremendous amount of focus on processes that have outlived their usefulness.
You’re right.
That is incredibly frustrating to those of us that have military post that we have represented. And when I talk to men and women at Fort Campbell and they say, well this is what we’re doing but this is what we would like to do. In order to be more productive, to be more accurate, to be more efficient, to fight 21st century warfare, to move on and utilize technology and 5G, and there is a host of waste. So, as if you are confirmed, I think it is imperative that you begin to hit your deadlines. And we want to be here to make certain that you hit those deadlines. I’ve got just a couple of seconds left. And Mr. Deasy, thank you for the conversation. Enjoyed it tremendously and we want to make certain that you continue to use your private sector expertise in order to be certain that DoD is recruiting the talent that is going to be necessary to look at next generation warfare. And as we discussed, sometimes it is difficult to retain these individuals because the private sector is going to pay them a lot more than the federal government and I thank you and your family for your willingness to step away from that private sector career and to focus on the federal government. I thank each of you for that and for being here. I yield back, Mr. Chairman.
Thank you, Mr. Chairman and thank all of you for your service and your family’s support. Ms. Hershman, when I first came to the senate in November 2010, I could not believe that the Department of Defense is the only agency that we had that were never audited. And there was no sense of this whatsoever. It didn’t make any sense to me. So, in 2012 I worked with Audit the Pentagon Bill with Tom Coburn at that time, from Oklahoma and we created the office that you fill right now. So, I’m happy to see you here. In your written statement, you mentioned that the motto for this Chief Management Office, is efficiency for lethality, for lethalness. So, in the work that you’ve done thus far in the role, do you have an example of a fix in your office that has made this, has concretely improved the readiness and capability for our war fighters?
First of all, Senator, thank you for your contribution for this role. I appreciate it. And yes, it’s needed. When I look at the data that tells us how many systems we have and so forth, it’s a little bit staggering, so I thank you. Yes, in the past year we have worked on a variety of issues. One in particular that has a direct impact on readiness, is in our logistics and supply chain management. And we have had a variety of opportunities and actually as Senator was just talking about, one of the four covered areas, where they’re looking at furthering the efficiencies, we’re looking at demand management. We’re looking at how we buy goods and services to make them available, goods in particular, available for things like spares and spare parts for repairs—
Are you putting best practices basically in what’s done, what’s being done in the private sector too that you see the most effective or most efficient companies?
Yes, we have. In fact, we’ve benchmarked several and we’re looking at it not just within the defense logistics agency, but we’re taking an end to end perspective. Because, what we’re finding is, that the way we order our parts has an impact to the delivery, the service, and frankly, the carrying costs, as we keep them in inventory.
Thank you. Mr. Deasy, as being a ranking member on cybersecurity for the Armed Services, I’m very much concerned of how we hold our contractors responsible, because I’m finding out that back channels coming up through the subcontractors is where a lot of espionage has been going on. So, the financial penalties we’re trying to put and I think it’s important for us to put very very severe financial penalties on the prime contractors who are not basically, overseeing the security information. What’s your thoughts on that and are you moving in that direction whatsoever? Do you think we should implement that? What’s your feelings?
So, specifically I have not spent times on the financial impact part of this.
Do you know what we’re talking about though don’t you?
I do know what you’re talking about. What I can say and I do completely agree that we need to have changes. We need to make an intervention here. What we can’t lose in this conversation, if you look at all of the data breaches that we’ve had and I’ve gone back and I’ve studied these, at the heart of this, is not necessarily the tier one suppliers. But, as you pointed out, you get down the tier two, tier three, and tier three.
That’s where most of it’s happening.
That’s where the vulnerabilities are. And I think there’s a few things we have to do. One of the things we have to do, is we have to move away from this self-assessment approach that our suppliers do today. And I think we’re gonna have to move to an independent assessment approach where we can get an—
Are you all moving or do you have support to do that?
We are. There is support on that and a matter of fact, there will be activity coming out of Ellen Lord’s acquisition sustainment organization starting next year.
Which serves the tier one. If the tier one’s not held responsible at all and then they won’t, they’re not basically sharing information, ’cause they’re afraid that then the tier one will take it and run with it and not need a tier three, tier four. We’ve got serious problems there and someone’s got to be held accountable for this all the way down the food chain. And that’s where you’re gonna have to step in, but we’re talking about legislation that would hold the primes responsible for their subs all the way down the line and I think that only makes common sense for the security of our nation.
So, what I would like to do Senator, on this manner, is go back and have a discussion with ANS on this.
I would hope you would do maybe get back to us as quickly, I have one more question to ask you sir. In your statement you mentioned something that you are proud of, the DoD’s artificial intelligence, AI, strategy in standing up the Joint Artificial Intelligence Center and as you’re concerned as I am about the China’s ambition that they have been doing to be a goal of being the dominant country in artificial intelligence by 2030. Do think these steps are meaningful enough to get the United States to a place where we can prevent China from being the leading power in AI?
Senator, I do, but I believe we’re gonna have to continue to move with more urgency in this matter.
Is there enough concern at your level, people coming to you that you report to or report to you?
Yes, we have. This particular topic is a regular topic that has occurred with the secretary, the deputy secretary, the chiefs and all the secretaries of the service.
Everybody understands the advancement that China has already made and how rapidly they’re moving forward?
Yes, they do and they task me quite strongly to be able to show evidence that we are moving ahead aggressively with the fielding of AI.
Well maybe on a secured meeting, we can secure the skiff so we can get a little bit more info on what you are doing in order to combat this.
If confirmed Senator, I’d happy to come over and talk with you.
Thank you very much, Sir.
Thank you, Mr. Chairman and thank all of you for being here today. First, Mr. Deasy, I want to maybe just make an encouragement if you will. I know you’re probably all familiar with the fact that Grant Air Force Base recently was named a global ox base, of course it’s had global ox for sometime, but now a reconnaissance wing, the Grant Force Air Force Base wants a large tanker and a bomber base leased out, a good chunk of that base to the county, who then leased it out to the Grand Sky UAV Park or North Dakota Army National Guard or International Guard, I’m sorry, has an ISR mission. The result of that of course has been the spawning of incredible research and development and intelligent assets, including the University of North Dakota’s Aerospace School AI research and development, they’re accompanying in Fargo a number of companies. My company in Fargo recently met with some of the folks over at DoD and NASA, a company that does AI research and development called, Appareo. I say all that only as a reminder and encouragement perhaps to everyone listening, but particularly to you, that not all the great new ideas are in the Silicone Valley and I just would love to encourage you to keep all of that in mind. Not just North Dakota but throughout America, that there are a lot of start ups and innovators that oftentimes get left behind as a result of, whether it’s procurement, and we’ll talk about that next Ms. Hershman, or other policies or even just traditions in relationships and maybe give ya a minute or two to respond to that, that thought and that encouragement.
Senator, I completely agree. When we established the Joint Artificial Intelligence Center, one of the foundational principles was talent and where we should go out in industry and seek this. We’re developing expertise inside the Joint Artificial Intelligence Center right now, as not only working with large significant defense players that we have today. We’re working with the academic environment. We’re working with the research institutes and yes, we are also working everywhere from startups to the established companies in Silicone Valley. One thing for sure about the AI space, if you look at into solutions that we’ve started to roll out today, there’s not one or two companies it takes to come up with these solutions, but there’s a host of them. And some of these, we may have six or seven companies from well established to small startups that participate and are actually helping to develop a solution.
All right, thank you for that. I want to continue to encourage you in that. Ms. Hershman, I just want to visit a little bit, thank you by the way for our very good conversation, I was encouraged. And I’m not an auditor or an accountant at all, but it does make me happy to see you happy when you hear the word audit, because we have some issues that we need to deal with. But, when we met a few months ago, I talked to you about the, speaking of procurement, the procurement process at the Army Corps of Engineers particularly as it relates to the building of the wall in the southern border, and I’ve been concerned about it as a result of a constituent that’s in that process. But, I’ve learned a lot more and recently I’ve learned a whole lot more, because I’ve gotten a whole lot more information which is far too difficult to get, I might add. But, now that I have, one of the things that I’ve noticed, is that Corps uses this two-tier process where they first put out a very small number of RFPs to a very small group of builders, quite select. And that’s irrespective of price or efficiency or anything like that, just design build. Then in the second round they’ll invite like, one company to the table and then they’ll negotiate price. And it concerns me a lot that there’s such a small group and it’s a very selective process that gets down to just basically a sole source and I find it hard to imagine that we are getting the best bang for the buck in that type of a process. So, I Just want to encourage you as well and get your feedback on some possible reforms. And I know that’s just one example of one, I’m sure it’s applicable in several areas, but I just wanna encourage you.
Thank you Senator and I appreciated our conversation as we spoke, even the way we scope the outcomes of these contracts can be so narrow and predetermined that we may be overlooking innovative ways to attack a problem. As we mentioned, category management and contract management is one of our largest focus areas for reform. We have 40 thousand contracting officers and over 2000 contracting offices. It is right for reform from a process standpoint, from a vendor selection standpoint, from an end to end standpoint and looking at enterprise-wide buys are all part of our reform initiatives, particular to contracts. So, I appreciate your ongoing, continued, encouragement and support.
Thank you. I thank all of you for your willingness to step up and yield back. Thank you, Mr. Chairman.
Thank you, Mr. Chairman. I ask the following two questions of every nominee who comes before any of the committees on which I sit. So, these are the questions and I’ll start with you, Ms. Hershman and we’ll just go down the line. Since you became a legal adult, have you ever made unwanted requests for sexual favors or committed any verbal or physical harassment or assault of a sexual nature?
No.
No.
No.
Have you ever faced discipline or entered into a settlement related to this kind of conduct?
No.
No.
No.
Question for Mr. Deasy. You’ve been asked several questions about the JEDI contract. What’s the vulnerability of having top secret, classified and unclassified data in one system with one provider?
When we kicked off the JEDI program and were considering having an environment that was gonna hold unclassified all the way to top secret. One of the first things we did was, we went to the experts that actually deal with how our adversary thinks about accessing our environments. So, we had in-depth technical conversations with the CIA. as well as the NSA. This was one of the great things I had access to when I joined the Department of Defense. We’ve actually helped, asked them to help us arc detect in our RFP how we expected our suppliers to ensure that our very classifications of data were secured, segregated, and protected. And in doing that, when we actually now have moved past award, we’ll be using the services of the NSA to do what we call, penetration testing. This will be a series of ongoing testing where they will act like an adversary and they will attempt to try to access each of those classifications of data.
Thank you. So, you are assuring us that even if we just have one provider that you you’ve pretty much eliminated the vulnerability of just having one provider. I have a question for Mr. Sander. The Navy and Marine Corps have launched reviews into the state of their legal communities. And the review is focused on leadership and performance in the legal communities of both services to ensure that they are properly organized, staffed, trained, and equipped to perform their missions. This review comes as result of ongoing legal issues highlighted by the recent acquittal of CO Special Warfare Operator, Chief Edward Gallagher for war crime charges and meddling by a top Navy officer, a lawyer, into another case against a different CO. What will be your role if you are confirmed, in this review process?
Senator, I’m generally aware of the comprehensive review and it is focusing on the uniform side of the house for the Navy first and then Secretary Spencer added it to the Marine side of the house in the uniform. I don’t know what the specific role is for the Navy General Counsel as laid out by Secretary Spencer in those appointment documents, however if confirmed, I will hopefully be on board to guide Secretary Spencer and legal nuances of the whole review and would work alongside the Navy Judge Advocate General as well as SGA to the Commandant on how we can best effectuate change and improve conditions within our Navy legal family.
And as you testify that you are committed to pulling the highest ethical standards, will you protect Navy career lawyers so that they can provide nonpartisan legal advice?
Absolutely, Senator, as long as they’re doing their job, they should be protected fully.
This committee has focused on the discourage of sexual assault and retaliation in all of our services. Are you going to be involved in any aspects of attacking this continued discourage of sexual assault in the military and retaliation? With regard to the Navy, of course.
Senator, absolutely. I think every member of the defense department should be involved. If we don’t change culture, we’re not going to address the problem. And we have to make sure we protect those that protect the nation. As you know, victims of sexual assault carry with that, the consequences of those actions for years to come far after their military service has ended and we need to make sure that we address it, we attack the problem head on and we do our best—
So, I would be interested in following up with you as to exactly what you intend to do to address this continuing problem. Now, I have a question for you regarding transgender troops and President Trump implemented a transgender military policy that prevents individuals who are diagnosed with gender dysphoria from joining the military. I want to ask if transgendered individuals were permitted to serve, do you believe that there would be a negative impact on military readiness or the ability to complete missions?
Senator, transgendered individuals are currently serving in the military under the 2019, they call it the Mattis Policy. If you’re gender dysphoria-free for 36 months, you can, you would be accessed or accepted into the military and even if you don’t have those 36 months you can always request an exception of policy. So, transgendered individuals are currently serving. They will continue to serve.
So, basically, you’re saying there’s nothing inherent in their transgendered status that would make it difficult for them to complete their missions or to serve in the military, that’s what you’re saying?
No, Senator. It’s not the fact that they identify as a transgender, it’s a standard space policy.
Yes. Okay, so I bet there are a lot of us who believe that that particular policy serves no purpose except to discriminate against these people. Thank you very much, Mr. Chairman.
Thank you Mr. Chairman and I want to thank the nominees for their service to our country they’re already doing, but their desire to serve in these important positions and your families. It’s a team effort and I think we all know that and sometimes don’t recognize how important our families are in all this, so thank you to the families as well. I want to first just get a commitment. There’s a lot of things happening in my state, great state of Alaska. Whether it’s the new interest in the arctic in terms of national security, missile defense, fifth gen fighters being stationed there, I’d like all of you to not only have an invite, but a commitment to say yes to the invite to come up to Alaska and see what’s happening in Alaska. Can I get that commitment if confirmed, you’ll come on up to my state?
Yes, Senator.
Including maybe even in the winter?
I would like to return my experience so far has been wonderful.
Great, thank you.
So, Ms. Hershman, I want to follow on what Senator Cramer was talking a little bit about. You know, big states like ours and his that aren’t necessarily very populated, relative to other states, do have a lot of opportunities and good ideas for our defense establishment. I’ll just give you an example. There was a company in the Matsu Valley in Alaksa that creates an incredible product. It’s hard to describe, but it’s kinda like a Zamboni for aircraft carriers to make sure the carriers are Marine Corps amphibious assault ships are very very clean with regard to their deck, so it doesn’t hurt our fifth gen fighters. These guys are very innovative. They’re working hard. I went out to visit them recently. They did mention to me that a contracting officer somewhere in the bows of DoD, said hey, if you want to keep this relationship going you might want to think about relocating your manufacturing facilities to the lower 48 ’cause it’s easier for us. So, can I get your commitment to make sure whoever the heck is doing that kinda stuff needs to be weeded out, told we want diversification throughout the entire county and we have great companies, whether North Dakota or Alaska, that they should not be getting the message from contracting officers in DoD, that hey, if you wanna keep these contracts you might want to think about relocating. That’s unacceptable. Can I get your commitment in making sure that we’re not doing that at all?
Yes, Senator, you have my commitment.
Just please send that message throughout the enterprise that that’s probably illegal, but also just not smart.
I will do that. I will use it as an example.
Thank you. I’ve raised that with the Sec now already and he had a similar reaction that you did. You know, I wanna talk a little bit about again, Ms. Hershman, acquisition reform. I think you all know the history. You look at something like the SR71, I think it was designed and launched within 18 months, kinda with slide rules and that was a spy plane that lasted four decades and then we go to the F35, that took 20 years to field. Senator Tillis, if he were here, I’m sure would put his 400-page RFP for the NATO next generation pistol handgun, 450 pages of red tape. How can we get to the bottom of this issue of our acquisition program, which is I think broken. We’re trying to do reforms here. You mentioned that CMO is not resourced enough, but what more can we looking at and I really wanna encourage all of you, if you have ideas on major acquisition reform, you need to make sure we understand what those are and you know, hopefully can try to pass them. What are your thoughts on that?
Certainly Senator. This is from a private sector example taking a page from McDonalds, who was very good at managing and acquiring goods and services by category. So, we have a large DoD-wide category management reform initiative underway. We are looking at everything from what type, how many contacts we have for certain goods and services. I’ll give you an example. We had 22 contacts for two by fours. We actually buy a lot of two by fours in the DoD. Here’s the problem, we found that amongst those 22, several of the contracts were from the same vendor at different price points.
Yeah.
We nicked it down to two contracts. 18 million dollar savings, which seems small, but when you have 40 thousand contracting officers, those small items start to add up very quickly,
Well, we wanna, I have one more question, I don’t want to interrupt, but we want to work with you on major acquisition reform and I think the president’s put together a good team in terms of serious, but we need your big ideas to help move this, so it doesn’t take 20 more years to field an F35. Mr. Deasy, real quick, final question. Companies like Google, right, who decided that they don’t wanna participate with regard to Project Maven, a DoD project that dealt with AI and other issues. You know, we’ve had hearings on the commerce committee where you know, I’ve said that’s fine, this is America, you don’t have to deal with the Pentagon, but when companies like that which are very sophisticated, then go to start looking at doing work for China, communist China, then I think we all should have a concern about that. How should we as the congress, deal with these kinda companies, saying hey, we don’t wanna do work with the Pentagon, fine, on sophisticated issues, AI, but we’re gonna go over and do work with the communist Chinese party, which is certainly in my view our adversary. What should we be doing? How should congress be thinking about addressing this?
Yes. I think this question of Google is much broader than just Google. I mean, if you look at any large of the cloud providers, the AI providers, in any large company that the Department of Defense does business with today, they have activity that they are doing over in China. It’s been my view from the beginning just using the Google as an example, that we need to be much more thoughtful on how we write our contract language, how we put our intellectual property language in the contracts that ensure us that when any of these large companies are gonna have a relationship in China, that we have complete segregation, firewall off requirements, as far as the data, the proprietary systems and solutions they create for us. I think the help we can have from congress is ensuring that from an acquisition standpoint that we continue to have very smart acquisitions on how we create those firewalls.
Thank you. Thank you, Mr. Chairman.
Thank you, Mr. Chairman. Mr. Deasy, President Trump’s antipathy to Amazon is well-known, it’s been reported that even in the Summer of 2018, he instructed General Mattis to quote, screw Amazon out of the opportunity to bid on this contact and there are many other statements about Amazon and Jeff Bezos. Can you categorically assure us that there was no influence by the White House or the President, on the ultimate disposition of this contract? And I want you to think hard about that answer.
Sir, I can tell you that the way we organize the team, kept the anonymity of the team, the compartmentalization of the team, that I feel very confident that at no time were team members that actually took the source selection, were influenced with any external including the White House.
And those team members were the ones who actually made the final decision or did they make a recommendation to the secretary, for example?
No, Sir. They actually make the final decision and then they bring that decision to me. I have a chance to ask them questions about it and then all I do is take that final acquisition decision and inform the deputy and inform the secretary of the decision taken.
And the final decision by those panels was to award the contract to Microsoft?
Yes, it was.
Thank you. I want to talk to you about the defense network and cyber attacks. How often are you attacked? Are your systems pinged by any outside interests?
Sir, the pings total hundreds of millions a month. This is a constant adversarial approach that they will continuously look at any point of entry inside the Department of Defense and they will daily try new tactics and techniques through those points of entries to ping us.
I think for context, the public should know that that’s the common experience of any large enterprise. See, I’ve spoke to a utility recently, three million a day, was their number. So, the point is you’re being attacked regularly. Do you red team your networks to in order to ensure their security? Do you have people who’s job it is to try to penetrate the networks and to determine where the vulnerabilities are?
So Sir, what I have is, is a relationship that exists between the DoDIN, DISA, my office and US Cyber Command. And here’s how it works in the practice. So, it’s my responsibility to look at where the vulnerabilities exist and issue directives in tasking to the services to fix those vulnerabilities. I use the services of US Cyber Command under General Nakasone and his teams to go in and look at our networks, as you say, attack them from like an adversarial standpoint and to report back to me whether or not we’re making the necessary progress in fixing those penetration points.
Let me ask a question about the cloud and it was touched on earlier. People in Maine have approached me and say, why are we going to the cloud? You put everything in one place, doesn’t that increase vulnerably? You talked about the three different systems you saw in Afghanistan. One of the reasons our electric, our electri, no I’m sorry, our election system was not successfully attacked in 2018, is that it’s so diffused. It’s state, local, it’s somebody described it as a hairball. It’s very hard to penetrate. It seems to me if you have the cloud and everything’s there, and I think you testified the single cloud will have all of the from secret to compartmented. If it is penetrated, it’s bonanza for the adversary. Assure me that we’re not making a large-scale mistake here by concentrating all of our assets in one place, hoping that it’s entirely secure. But, if it isn’t, it’s disaster if it’s penetrated.
Yes, Sir. First, for a point of clarification, we are not putting all of our data onto a single cloud. Just for example, in the last two years alone, we have awarded 10 distinct cloud contracts. So, first of all, we are not moving to a single cloud.
But isn’t JEDI, isn’t that the purpose of JEDI?
No, Sir. That has never been the purpose of JEDI. JEDI was one of the multitude of clouds. We just issued a report to congress last Thursday, in which it states the fact that we are a multi-vendor, multi-cloud environment and we’ll continue to be. JEDI is a unique capability that allows us to move between classification levels and put information out to the tactical edge. But, it is not gonna be nor is it our only cloud today.
And your confident that, although JEDI will have this essential function, that it will be as secure as the multiple functions that we have now.
Yeah, I’d actually argue that today, the way that we’ve set up our cloud environment and the very siled disconnected way, has actually created more vulnerabilities. And by moving to this integrated enterprise approach, it will allow the likes of US Cyber Command and NSA to help assure that the cloud environment is actually more secure, Sir.
Thank you. Thank you, Mr. Chairman.
Thank you, Senator King. Senator Reed, do you have any further?
No, Mr. Chairman, just let me compliment the witnesses and thank you for your testimony.
And I agree with that and I appreciate very much the time you’ve taken the family who’s here with you. You’re addressing something that is not talked about very often and you are the right people for the job and we appreciate what you’re willing to do in further expanding your service to your country. Is there any other comment you’d like to make after going through this routine? Anything that you want to add that maybe wasn’t said to your satisfaction?
Senator, nothing from me, but thank you for your time and your support and consideration.
Okay.
Just like to say thank you for your support and consideration and thank you for elevating the authorities of the CIO office inside the Department of Defense.
That’s a good way of putting it. Thank you.
I will echo my colleagues. I appreciate your consideration, the thoughtful nature of the questions today. And I would also like to thank this committee and the staff members in particular, for all the hard work and support you’ve given the essentially, startup within the DoD, called the CMO. We appreciate your support.
That’s great. Thank you very much. We’re adjourned.