29 May 1999
Source: http://www.access.gpo.gov/su_docs/aces/fr-cont.html

See full report of this excerpt: http://jya.com/s1059-pigs.zip

And report of Defense authorization bill: http://jya.com/hr106-162.zip

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[Congressional Record: May 27, 1999 (Senate)]

        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2000

  The PRESIDING OFFICER. Under the previous order, the Senate will now
resume consideration of S. 1059, which the clerk will report.
  The legislative assistant read as follows:

       A bill (S. 1059) to authorize appropriations for fiscal
     year 2000 military activities of the Department of Defense,
     for military construction, and for defense activities of the
     Department of Energy, to prescribe personnel strengths for
     such fiscal year for the Armed Forces, and for other
     purposes.

[Excerpts]

  Mr. LIEBERMAN. Mr. President, I rise in support of the FY 2000
defense authorization bill. As the challenges facing us today
demonstrate, the effectiveness of our military, and its readiness to
act immediately to protect our national interests, must always be a
priority concern for Congress. The $288.8 billion proposed in this bill
is a 2 percent real increase over last year's budget and is the first
real increase in topline defense funding since FY 1985, the middle of
the Reagan administration. After fourteen years of declining, or flat
defense spending, we increased authorization for readiness programs by
$1.1 billion, we increased authorizations for procurement by $2.9
billion, and we increased authorizations for reasearch and development
by $1.5 billion. I firmly believe this bill makes an important
statement at a critical time, affirming our commitment to having the
best trained, best equipped, and most effective military in the world,
both today and tomorrow.

  Under the excellent leadership of our colleagues, Senator John
Warner, chairman of the Senate Armed Services Committee, and the
ranking Democrat, Senator Carl Levin, we stepped up to our
responsibility to provide what our soldiers, sailors, and airmen need
today, and we took some very important steps to move toward the
military that will protect our nation in the next century.

  The past 14 years of inadequate defense spending has taken a toll on
the readiness of our force today. We simply were not able to keep our
training and maintenance at the levels that our role as a superpower
demands. The struggle to do so, and the increasing need to use our
forces to meet the many challenges of the post cold war world has taken
its toll not just on equipment, but on our people in uniform. Simply
put, the morale of our forces is suffering. This past year, we not only
sought out and listened to our nation's top military leaders as they
outlined the problems facing our military, but in this bill we
addressed the most critical of those problems, including falling
recruitment and retention in critical skill areas; aging equipment that
costs more to keep operating at acceptable levels of reliability; a
need for more support services for a force with a high percentage of
married personnel.

  So I am pleased and proud that we reversed the 14 years of declining
defense dollars and added the money to readiness and procurement to fix
the most urgent near-term readiness problems. But many of these
problems are not simple to address, and simply adding money to budget
lines will not fix them any more than adding money to welfare programs
fixed the underlying welfare problem in America. Adding money was
necessary, but it won't be enough. How we spend the money we spend is
as important as how much money we spend. We will have to be sure that
we are alert to how well the provisions we have included here are
working to have a positive effect on those critical problems we must
solve.

  This will be more difficult than it has been in the past. We are now
in an era of fundamental change for our security and our military. The
collapse of the Soviet Union in 1991 and the unprecedented explosion in
technology are now redefining what it is we are asking our military to
do, the threats that it must overcome to do what we ask of it, and the
capabilities that our military will bring to bear to successfully
accomplish its mission. This body has been in the forefront of
demanding rigorous assessments about our needs and our potential. We
directed, in the Military Force Structure Review Act of 1996, the
Secretary of Defense to complete a comprehensive assessment of the
defense strategy, force structure, force modernization plans,
infrastructure, and other elements of the defense policies and programs
with a view toward determining and expressing the defense strategy of
the United States and establishing a revised program. This assessment,
completed by the Secretary of Defense in 1997, declared that our future
force will be different in character than our current force, and placed
great emphasis on the need to prepare now for an uncertain future by
exploiting the revolution in technology and transforming the force
toward that envisioned in Joint Vision 2010. The independent National
Defense Panel report published in December 1997 concluded ``the
Department of Defense should accord the highest priority to executing a
transformation strategy for the U.S. military, starting now.'' These
assessments, and others that have come to our attention, have
reinforced the wisdom of Congress in passing in 1986, over the
Pentagon's strenuous objections, the Goldwater-Nichols act and have
provided us here with a compelling argument that the future security
environment will be different and that environment requires new
capabilities. In last year's defense authorization bill we sent a
strong signal to the Pentagon that we must begin to build the
fundamentally different military by including a provision strongly
supporting Joint Experimentation to objectively examine our future
needs and how we can best fulfill them.

  This year, once again, Congress is stepping up to the responsibility
to ensure our future security. By establishing this year the Emerging
Threats and Capabilities Subcommittee, Senator Warner addressed the
growing consensus that transformation of our military to deal with the
uncertain future we face is one of our most important objectives and
that promoting innovation is among our greatest challenges. Under the
leadership of the subcommittee chairman, Senator Roberts and the
Ranking Member, Senator Bingaman, we focused on the critical threats
facing our nation and the emerging capabilities to deal with these
threats. I would like to highlight what I think are important
legislative provisions that this new subcommittee placed in this bill
that further both transformation and innovation. An ongoing initiative
of transformation supported by this bill is joint experimentation. The
committee recognized the program's progress in developing joint service
warfighting requirements, doctrinal improvements, and in promoting the
values and benefits of joint operations for future wars and contingency
operations. We need to continue to identify and assess interdependent
areas of joint warfare which will be key in transforming the conduct of
future U.S. military operations, and expanding projected joint
experimentation activities this year will be a strong base for future
efforts. To this end the committee approved provisions that built on
its previous support for Joint Experimentation by adding $10 million to
accelerate the establishment of the organization responsible for joint
experimentation, and to accelerate the conduct of the initial joint
experiments. The committee also modified the reporting requirements of
the commander responsible for joint experimentation to send a strong
signal that we expect him to make important and difficult
recommendations about future requirements for forces, organizations,
and doctrine and that we expect the Secretary of Defense fully inform
us about what action he takes as a result of these recommendations. The
bill also includes very important provisions to stimulate a greater
degree of

[[Page S6262]]

technical innovation faster within the military. It is my belief that
the explosive advances in technology provide the basis for not just a
``revolution in military affairs,'' but ultimately a complete paradigm
shift. The opportunities provided by technology give us the promise of
achieving an order of magnitude increase in military capability over
that which we have today. The U.S. military of 2020 and 2030 will be
based on the science we begin to develop in the year 2000. But to take
advantage of this promise and defend ourselves against its use against
us by future adversaries, we need to transform our R&D enterprise from
its antiquated cold war structure to a fast-moving, better-integrated
structure and a process that can seize the leading edge of techno-
warfare. The Defense Innovation provisions in this bill establish a new
vision for military R&D that is based more on how we want to fight in
the future, and begin to change the structure of the military R&D
enterprise to achieve that objective through better integration and
less inefficiency.

  To help establish a new vision, the provisions require the Secretary
of Defense to determine the most dangerous adversarial threats we will
likely face two to three decades from now and what technologies will be
needed on our part to prevail against those threats, and merge the
strategic and technological decision-making processes. To help lay the
groundwork for a new organizational structure for R&D, the Department
of Defense is to develop a plan which ensures the crossflow of
technologies into and across R&D labs, and close the gap between the
R&D pipeline and the acquisition pipeline, to ensure the customer is
involved in the entire R&D process. Our R&D structure needs to be
revamped now so that leading edge techno-warfare can emerge.

  Along the same lines as innovation, this bill has provisions that
ensure we continue to step up to our responsibility to oversee the
transformation of our military to the future force that will protect
our security in the 21st century. We need a permanent requirement that
the Secretary of Defense conduct a Quadrennial Defense Review at the
beginning of each new administration to determine and express the
defense strategy of our nation, and establish a revised defense plan
for the next 10 to 20 years. Complementing the QDR will be a National
Defense Panel that would conduct an assessment of the defense strategy,
force structure, force modernization plans, infrastructure, budget
plan, and other elements of the defense program and policies
established under the previous quadrennial defense review. Based on our
previous experiences with the QDR and NDP, and the debate they raised,
it is obvious that any one time assessment is not going to provide all
the answers we need. Periodic assessments as prescribed by this
legislation will continue to provide Congress with a compelling
forecast of the future security environment and the military challenges
we will face.

  The requirement for the provisions I have mentioned is paramount. The
need for renewed emphasis on innovation and transformation has never
been more apparent to me than after my time this year as the Ranking
Member on the AirLand Subcommittee. That committee, under the excellent
leadership of Senator Rick Santorum, examined many modernization issues
affecting the Army and the Air Force. Some of the findings were
disturbing, and reinforce the fact that despite the widespread and
growing consensus that transformation is essential to our military, our
budgets continue to look much as they have for a decade, focused on
today's force at the expense of tomorrow. I would like to discuss some
of the disturbing findings, and some of the important provisions we
included in the bill to begin to address these concerns.

  We found that some responsible voices are concerned that the United
States Army is facing a condition of deteriorating strategic relevance.
The Army force structure is essentially still a cold war force
structure built around very heavy weapons systems. The Army
modernization program is based on incremental improvements to this
force and is largely unfunded due to hard choices made in the past.
This has resulted in inefficient programs and extended program
timelines. Consequently we have a force that looks essentially the same
today as it did yesterday, and that doesn't have enough money to
maintain an increasingly expensive current force and invest in the Army
After Next which is the future. Kosovo is an example of the future the
Army will surely face; operations that are increasingly urbanized, with
growing deployment and access problems, and the need for lighter
weight, self-deployable systems becomes compelling. We reviewed the
Army's modernization plan to understand the relationship between the
current service modernization program and projected land force
challenges. The Army's modernization plans do not appear adequately
address these issues. So we have required the Army to take a renewed
look at its modernization plans generally, and its armor and aviation
modernization programs specifically, to address these challenges and to
provide us with modernization plans that are complete and that will be
fully funded in future budgets. We direct this analysis include the
operational capabilities that are necessary for the Army to prevail
against the future land force challenges, including asymetrical
threats, and the key capabilities and characteristics of of the future
Army systems needed to achieve these operational capabilities. We are
especially concerned about the ability of the Army to maintain the
current fleet of helicopters that is rapidly aging and we have included
a provision to require them to provide a complete and funded program
that would upgrade, modernize, or retire the entire range of aircraft
currently in the fleet, or provide an alternative that is sufficient
and affordable. Similarly, the Army's armor modernization plan seems to
be inadequate to modernize the current armor force while designing the
tank of the future, and leads me to believe that the Army must reassess
armor system plans and provide us with the most appropriate path to
accelerate the development of the future combat vehicle.

  The Air Force has fewer apparent modernization problems than the
Army, but I wonder if their modernization plan is on the right track.
Our hearings strongly suggest that the Department of Defense needs to
answer several questions about our tactical air requirements, not the
least of which is the characteristics, mix, and numbers of aircraft
best suited for future conflicts. Kosovo is an example of how important
the right mix of platforms and weapons really is to success on the
battlefields of the future. We are embarked on three new TAC air
programs which may report increasing costs coming dangerously close to
the cost caps we have established, and in the case of the F-22 we must
be alert to the danger that we will delay critical testing in order to
not exceed the caps. And in the out years, the combined costs of these
programs will consume a very large share of the overall procurement
budget. We must make sure that we are not sacrificing other leading-
edge capabilities, like unmanned aerial vehicles, information
technology, or space technology. The specific aircraft programs will
require close scrutiny as will the strategy for their use as we attempt
to decide on the right course in future authorization bills.

  We must overcome our cold war mentality and further examine and
direct our trek into the 21st century. The provisions in this bill
concerning innovation and transformation lay the foundation for the
required changes in our defense mind set that will become mandatory as
we face far different conflicts in the future--and, as we see on CNN
everyday, much of that future is already here.

  In closing, I express my appreciation to the committee for agreeing
to include in the bill a provision to extend and expand the highly
successful Troops to Teachers program, which I joined Senators McCain
and Robb in sponsoring.

  As my colleagues may know, this program was initially authorized by
Congress several years ago to help transition retiring and downsized
military personnel into jobs where they could continue their commitment
to public service and bring their valuable skills to bear for the
benefit of America's students.

  To date Troops to Teachers has placed more than 3,000 retired or

[[Page S6263]]

downsized service members in public schools in 48 different states,
providing participants with assistance in obtaining the proper
certification or licensing and matching them up with prospective
employers. In return, these new teachers bring to the classroom what
educators say our schools need most: mature and disciplined role
models, most of them male and many of them minorities, well-trained in
math and science and high tech fields, highly motivated, and highly
capable of working in challenging environments.

  The legislation we introduced earlier in the year, and which the
President has endorsed, aims to build on this success by encouraging
more military retirees to move into teaching. It would do so by
offering those departing troops new incentives to enter the teaching
profession, particularly for those who are willing to serve in areas
with large concentrations of at-risk children and severe shortages of
qualified teaching candidates.

  Even with the new incentives we are creating, which we hope will
recruit as many as 3,000 new teachers each year, we recognize that
Troops to Teachers will still only make a modest dent in solving the
national teacher shortage. The Department of Education estimates that
America's public schools will need to hire more than two million new
teachers over the next decade.

  But we are confident that, with an extremely modest investment, we
will make a substantial contribution to our common goals of not just
filling classroom slots, but doing so in way that raises teaching
standards and helping our children realize their potential. I can't
think of a better source of teaching candidates than the pool of smart,
disciplined and dedicated men and women who retire from the military
every year.

  What's more, with this bill, we may well galvanize support for a
recruitment method that, as Education Secretary Richard Riley has
suggested, could serve as a model for bringing many more bright,
talented people from different professions to serve in our public
schools. This really is an ingenious idea, helping us to harness a
unique national resource to meet a pressing national need, and I think
we would be well served as country to build on it.

  In putting together this bill, once again hard choices had to be
made. We closely examined and analyzed the critical defense issues, and
we ended up with are effective and affordable defense authorization
bill which meets the growing readiness and retention challenges facing
our armed forces, and augments our investment in the research,
development, and procurement of the weapon systems necessary to
maintain our military superiority well into the 21st Century. This bill
compensates our most valuable resource, our service men and women, plus
lays the groundwork for a sensible and executable programs for our
military. I urge all of my colleagues to support this legislation and
send an unequivocal message of support to our troops and their
families.

*****

  Mr. LIEBERMAN. Mr. President, I rise to discuss several provisions
within the FY2000 Defense Authorization Act. These provisions can be
found in Title II, Subtitle D, Sections 231-239 within the FY2000
Defense Authorization Act. The provisions are intended to stimulate
intense technical innovation within our military research and
development (R&D) enterprise and hence lay the foundation for
revolutionary changes in future warfare concepts. Before giving an
extended introduction to these defense innovation provisions, I would
like to thank Senator Roberts and Senator Bingaman and the staff who
have worked on this subtitle--particularly Pamela Farrell, Peter
Levine, John Jennings, Frederick Downey, Merrilea Mayo, and William
Bonvillian--for their hard and thoughtful work on this legislation. The
technical superiority of our military is something we have come to take
for granted, yet it is founded in an R&D system that has seen little
change since the cold war era. These defense innovation provisions
attempt to reposition our R&D system so that it can keep up with the
pace of technological change in the very different world we are in
today.

  It is my belief that the explosive advances in technology may provide
the basis for not just a ``revolution in military affairs,'' but a
complete paradigm shift. With advanced communication and information
systems, it may become possible to fight a war without concentrating
forces, making force organizations impossible to kill. With advances in
robotics and miniaturization, it may become possible to fight a ground
war with far fewer people. With advances in nuclear power, hydrolysis,
and hydrogen storage, it may be possible to create virtually unlimited
sources of on-site power. These opportunities are complemented by
numerous challenges, also brought forth by technology: urban warfare,
space warfare, electronic/information warfare, chemical, nuclear, and
biological warfare, and warfare relying on underground storage centers
and facilities. As the variety of opportunities and threats continues
to climb, and as increasing numbers of nations emerge into the high
tech arena, I believe the military arms race of the past will be
replaced by a military technology race. Instead of simply accumulating
ever greater numbers of conventional armaments against a well-
established foe, as we did in the Cold War era, we will have to
concentrate on producing fewer, but ever more rapidly evolving, and
ever more specialized weapons systems to counter specific asymmetric
threats.

  To meet these new challenges, we need to transform our R&D enterprise
from its antiquated Cold War structure to a fast-moving, well-
integrated R&D machine that can seize the leading edge of techno-
warfare. For this reason Senator Roberts, Senator Bingaman and I have
inserted provisions within Title II, Subtitle D of the FY2000 Defense
Authorization Act whose purpose is to stimulate a much greater and
faster degree of technical innovation within the military.

  The defense innovation provisions address three goals--establishing a
new vision for military R&D, changing the structure of the military R&D
enterprise, and correcting the driving forces for R&D in our current
system. For the first task, establishing a new vision, Section 231 of
the FY2000 Defense Authorization Act requires DoD to determine the most
dangerous adversarial threats we will likely face two to three decades
from now, and what technologies will be needed on our part to prevail
against those threats. Given that it takes 20-30 years to translate
basic science to fielded application, our R&D vision needs to be
founded on a set of required operational capabilities that is equally
distant in time, and far beyond the 5 year vision of our current
Program Objective Memorandums (POM's). We need not strive for perfect
clairvoyance in this exercise; however, we should be able to create an
open conceptual architecture which successfully frames the many
potential future opportunities and threats. Once the far future threats
and hence far future operational capabilities are outlined, Section 231
asks DOD to give Congress a roadmap of future systems hardware and
technologies our services will have to deploy within two to three
decades to assure US military dominance in that time frame. From the
first roadmap, we are requesting DOD derive a second roadmap--the R&D
path that DOD, in cooperation with the private sector, will have to
follow to obtain these new defense technologies and systems. To add
depth and perspective to the results, I encourage the Secretary of
Defense to utilize an independent review panel of outside experts in
these exercises, to complement the work done by in-house personnel. The
broader our vision, the more likely it is to be inclusive of whatever
surprises the actual future may bring.

  A second goal of the defense innovation provisions, Subtitle D, is to
lay the groundwork for a new organizational structure for R&D. Unless
we fix the innovation structure, we will be unable to deliver to DOD
the rapid technological advances it will need to secure and maintain
world dominance. To meet the challenges of the upcoming decades, the
Defense Science Board has recommended that at least one third of the
technologies pursued by DoD be ones that offer 5 to 10 fold
improvements in military capabilities. However, the current structure,
which was founded on Cold War realities, will require large
organizational change to enable it to pursue revolutionary, rather than
evolutionary, technology goals. The segregated and insulated components
of the military R&D system will need to be seamlessly interwoven, and
the system as a whole will need to be much more flexible in its
interactions with the outside world. We can learn from the success of
the commercial sector, which takes advantage of temporary alliances
between competitors and peers to develop technologies at a breathtaking
pace.

  The defense innovation provisions ask DoD to formulate a modern
blueprint for the structure, of not only its laboratories, but of the
extended set of policies, institutions, and organizations which
together make up its entire innovation system. As noted earlier, the
Defense Science Board has


[[Page S6258]]


called for the military R&D system to increase its focus on
revolutionary new technologies. The overarching goal of the new
structural plan requested by Section 233 is to deliver the conceptual
architecture for an innovation system that is capable of routinely
providing such revolutionary advances. Section 239 requests an analysis
by the Defense Science Board of overlaps and gaps within the current
system. Section 233 asks the Under Secretary of Defense for Acquisition
to develop the plan for the future innovation system, one which ensures
that joint technologies, technologies developed in other government
laboratories, and technologies developed in the private sector can
readily flow into and across the military R&D labs and the broader
innovation structure as a whole. Section 233 emphasizes the need to
develop better processes for identifying private sector technologies of
military value, and military technologies of commercial value. Once
identified, there also need to be efficient processes in place for
transfer of those technologies, so that the military may reap the
respective military and economic gains. Also in Section 233, the Under
Secretary is requested to deliver a solution to the major structural
gap which currently exists between the R&D pipeline and the acquisition
pipeline. Development of the best technologies in the world will not
help our future military posture if those technologies are never
adopted, or even seen, by the acquisition arms of our services.
Finally, to better merge the strategic and technological threads within
the military's decision making process, Section 233 in the FY2000
Defense Authorization Act requests a DoD plan for modifying the ongoing
education of its future military leadership (i.e., its uniformed
officers) so they may better understand the technological opportunities
and threats they face.

  The laboratories themselves could and should play a crucial role in
our future military. Ideally, the military laboratories are the place
where the minds of the brightest scientists meet the demands of the
most experienced warfighters. Out of this intense dialogue would then
come a clearer understanding of future warfare possibilities, as well
as the technological breakthroughs critical to changing the face of
warfare as we know it. For various reasons, however, that vision is in
danger of becoming lost. One specific problem is DoD's rigid personnel
system and the corresponding lack of performance-based compensation,
which is causing the labs to rapidly hemorrhage talent to the more
competitive and less bureaucratic private sector. To address these
issues, a defense innovation provision within the FY2000 Defense
Authorization Act--specifically, Section 237--repeals several of the
labs' restrictive personnel regulations. The intent of this Section is
to drastically reduce hiring times and eliminate artificial salary
constraints to the point where defense laboratories can hire new talent
in a time frame and at a salary level that is similar to that offered
by the private and university sectors. Currently, the two processes are
not even close to competitive: the military R&D labs take several
months to over a year to extend an offer, with the result that the
laboratories, over and over again, lose the hiring race to private
sector interests which can hire top-notch talent in one or two weeks.
As noted by the Defense Science Board report, the salaries which can be
offered by the laboratories are also about 50 percent lower (for higher
grade new hires), compared to the salaries those same new hires could
obtain in the private sector. It is significant that the hiring time
problem, as well as the high grade caps problem, were universally cited
by laboratory managers as the key obstacles in upgrading their
laboratory talent.

  In addition to improving the quality of the laboratories' effort by
attracting and retaining highly qualified personnel, the defense
innovation provisions ask the Secretary of Defense to improve the
quality of work itself by developing a system of modern business
performance metrics which can be implemented within and across all
military laboratories (Section 239(b)). Such metrics can help ensure
that the best work and the best talent are identified, so that they may
be rewarded, nurtured and used accordingly. As a word of caution, the
ultimate impact of science and technology innovation is very hard to
measure, especially in the early stages. Overly mechanical assessments
inevitably do much more harm than good. Nevertheless, advanced
technology companies have been making great strides in better assessing
(and assisting) their innovation efforts, and DOD is encouraged to work
with industry R&D leaders in implementing this section. Examples of
metrics which may be useful for DOD labs include measurement of lab
quality through formal annual peer reviews of its divisions,
measurement of technical relevance through required customer approval/
evaluation of R&D projects both before and after they are undertaken,
and measurement of organizational relevance through annual board
meetings of senior military with the heads of the R&D laboratories. The
first of these metrics can help capture and bring attention to
promising work in its earliest stages, while the last two can help
bridge the gap between later stage innovation and new products.

  The need for structural reform within the laboratories is a pressing
one. The above-mentioned reforms are intended to be jump started with a
pilot program, found in Section 236 of the Defense Authorization
Provisions. This pilot program may address any of the issues mentioned
above but is particularly focused on the problem of attracting and
retaining the best possible talent for the laboratories. To be more
competitive with working conditions in the commercial sector, this
pilot program may include such innovations as pay for performance,
starting bonuses (e.g., in the form of equipment start-up funds) for
attracting key scientists, ability to alter reduction in force (RIF)
retention rules to favor high performers, broadbanding of pay grades,
simplified employee classification, educational programs which allow
employees to receive advanced degrees while still employed,
modification of priority placement procedures, and creation of employee
participation and reward programs.

  To attract the best possible outside talent for collaborations with
the laboratories, Section 236 also encourages expansion of exchange
programs at both the personal and institutional level. Programs for
exchanges within DoD, with the private sector, and with academic
institutions are all encouraged. Examples of such programs include the
sponsorship of talented students through college or graduate school in
exchange for later work commitments to the laboratories, expansion of
the federated laboratory concept, increased exchanges between the
defense laboratories and the war colleges, training programs, and
extension of IPA authority to hire commercial sector employees. The
Defense Science Board has strongly recommended that the laboratories
emulate DARPA in its mix of temporary and permanent workers in order to
be able to quickly bring in relevant talent when needs shift. Section
236(a)(2) creates this option and can be used in conjunction with other
provisions in Subtitle D.

  A new structure and a new vision are all well and good, but if there
is no motivation for the new structure to proceed towards the new
vision, nothing is gained. Consequently, the third goal of the defense
innovation provisions is to correct current forces which tend to drive
DoD away from technical innovation. Three of these driving forces are
described below.

  The first ``counter-innovation'' driving force is the lack of a well-
defined customer within the military for far future military
technologies. Ideally, this customer would be at the Joint Chiefs
level, so that broadly sweeping strategies which capitalize on novel
technologies can be rapidly incorporated into our existing military
structure, doctrine, and systems. Unfortunately, there is little
connection at present between that level and the service laboratories.
Section 239(b) should be used to improve this situation. Furthermore,
as part of the legislation's mandated study on improving the structure
of our R&D system (Section 233), we also request the Under Secretary of
Defense to address the issue of a suitable internal customer for truly
long range R&D. For maximum impact and credibility, this customer--
whether it be a person, position, or organization--should be a bona


[[Page S6259]]


fide paying customer who has responsibility not just for the long range
technology itself, but for the unconventional military options such
technology provides.

  The lack of an internal customer for long range R&D is one driving
force pulling the military away from technical innovation. The second
is the vacuum-like force created by the absence of an intimate
connection between the R&D customers and producers within the later
stages of R&D. Specifically, there is an insufficient connection
between the program managers who sponsor product development and the
R&D workforce performing later stage R&D. In contrast, the industrial
experience has shown that if the customer, researchers, and designers
share in all product development decisions from the very initial stages
of concept design, the degree of innovation is much higher, the product
acceptance rate is much higher, and, ultimately, the pace of
technological change is dramatically accelerated. Section 233(b)(5)
directs the Under Secretary of Defense to identify how new technologies
can be rapidly transi-
tioned from late stage R&D to product development and prepare an
appropriate plan for doing so. One sub-issue within this larger problem
is this need to create a DoD customer--DoD researcher--DoD designer
interaction that is early enough and robust enough to ensure that
maturing innovations can be drawn into product lines on a time scale
similar to that experienced in the commercial sector. This sub-issue
should be addressed in the Under Secretary's plan under Section
233(b)(5).

  The third force which drives the military away from technological
innovation is the lack of a customer outside the military for
innovative military technologies. Were such a customer present, it
might partially make up for the lack of the other two drivers in terms
of motivating innovation. Currently, the most important external
customer for military R&D is the industrial half of the military-
industrial complex. However, the structure of our procurement
regulations give virtually identical profit margins to these companies
no matter how difficult the technical path or how many risks are
undertaken in the process of producing a military system. Therefore,
the continued production of legacy systems is guaranteed to be
profitable, while gambling with innovative new systems is not.
Essentially, our procurement regulations are a direct disincentive to
innovation, giving the defense industry a strong vested interest in
adhering to incremental change. The resulting lobbying by industry,
aimed squarely at preserving the ``state-of-yesterday's-art,'' then
significantly slows the rate at which the military can innovate.
Accordingly, one of the defense innovation provisions, specifically
Section 234, Subtitle D, Title II of the FY 2000 Defense Authorization
Act, calls for DoD to change its profit margins for acquisitions in
order to alter the innovation incentives for industry. Given
substantially higher profit levels for the development of innovative
systems, than for the continued production of legacy systems, industry
could become much more receptive to the idea of cultivating innovation
in fielded hardware. Substantive, consistent economic rewards are
critical to incentivizing companies to take the necessary and serious
technological risks required to produce the innovations DOD must have.

  In closing, I thank my colleagues Senators Roberts and Bingaman for
joining me in develoing a set of stimulating and thought-provoking
defense innovation provisions within Subtitle D, Title II of the FY2000
Defense Authorization bill. These provisions should launch us towards a
new vision, a new structure, and a new set of driving forces for
military R&D. In the past 48 years, DoD has funded the pre-award
research of 58 percent of this country's Nobel laureates in Chemistry,
and 43 percent of this country's Nobel laureates in Physics. This is a
phenomenal base on which to build. However, the Cold War structure and
rationale for our R&D enterprise needs to be shed so that leading edge
techno-warfare can emerge. The time to do this is now, because, in many
senses, the future is already here. The military systems of 2020 and
2030 will be founded on the science of the year 2000.


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