00:00We'll first have our questions come from Senator Moreno. We'll take my spot and I'll take his later on.
00:07All right, perfect. Well, thank you, Chairman, for doing this, for having this very important session.
00:12It's something that's long overdue. So I'll start with you, Dr. McGinn.
00:17You talked about CFIUS, near and dear to my heart.
00:20As you know, CFIUS plays a critical role in reviewing inbound foreign investments, as you described.
00:25President Trump recognized a glaring loophole in the law, which currently does not cover greenfield investments,
00:33but rather only allows CFIUS to review investments of acquisitions of existing U.S. companies.
00:39I introduced a bipartisan bill called the Protect Act with my colleagues, Alyssa Slotkin and Senator Tim Sheehy,
00:45which would close this loophole and ensure that all greenfield and brownfield transactions from foreign countries of concern are reviewable by CFIUS.
00:52Do you believe that this would be helpful to better protect our national security for potentially harmful or threatening investments by foreign countries?
01:01Thank you for the question, Senator Moreno.
01:03As you know, CFIUS is an incredibly powerful tool for our government to protect national security interests.
01:12And greenfield investments have been a long been kind of not part of CFIUS because CFIUS looks at individual business transactions.
01:20But it is totally the prerogative of the Senate to consider adding that as a potential thing that should be covered under CFIUS.
01:29And I look forward for the conversation that you're going to have in deliberations on that
01:33and in working with the agencies to see the practical kind of ramifications of that and how that would be doable.
01:41Yeah, we'd love to have you take a look at the bill if you haven't already done it, and we'd love to get that across the finish line.
01:48You know, it's a rare bipartisan bill, and hopefully we can get that done.
01:51It's common sense.
01:52I'd love it.
01:52Along those same lines, you know, I understand that the DPA fund, which is held by Treasury but managed by the Department of Defense,
01:59used to be managed at an Air Force research laboratory housed at a place called the Wright-Patterson Air Force Base in Dayton, Ohio.
02:06But over the last two years, the Pentagon moved the management of the DPA fund out of Ohio
02:12and centralized it in a new management structure called the Defense Priorities and Allocation System.
02:18However, I heard concern that this new system does not adequately follow established contracting best practices.
02:25Dr. McGinn, could you talk about DPA's system's shortcoming and contrast them to the phenomenal world-class perfection management system in Dayton, Ohio?
02:38Not biased at all on that question, to be clear.
02:41Thank you, Senator.
02:42Yeah, so the Air Force is currently the executive agent for the conduct of Defense Protection Act Title III projects,
02:49and so, and they've delegated further to Wright-Patterson Air Force Research Lab to do the contracting execution of Title III projects,
02:59and so that is, but that is still the case, that they're doing that.
03:04The DPA fund is managed by the Department of Defense.
03:08I was not aware that it's, that that is not managed by, as far as I know, by Wright-Patterson itself,
03:15but by the Office of Secretary of Defense, so, so there hasn't been a movement to, to, to, of that degree,
03:22but the, the work, I've worked with the, the personnel at Wright-Patterson when I was in government,
03:27and they are phenomenal, and they continue to do phenomenal work.
03:31Yeah, they move the functions out, which the reality is we should move, moving functions in to centralize.
03:36That makes sense to have all that together.
03:38It makes, as you know, a lot of efficiencies, and I don't want to keep picking on you for questions,
03:42but we'll, we'll keep it going here. I'm particularly concerned that the powers that,
03:47over the last, excuse me, the last administration, the DPA powers were bastardized in a sense
03:54and expanded beyond congressional intention by the Biden White House in areas like green energy,
04:00for example, which was clearly a political move, not a national security move.
04:05Why is it critically important for DPA to maintain its focus on national defense
04:09in a nonpartisan way, and what dangers could arise if it doesn't to, to, to fortify political positions
04:16rather than national security positions?
04:19Great question, Senator. Yeah, I would, I would say the, the, as we've seen very clearly in this,
04:25in this hearing, DPA is a, a bipartisan supported authority,
04:31and it works best when it really focuses on those bipartisan kind of interest areas.
04:37And the real priority areas for DPA have been traditionally defense or national, true national emergency efforts.
04:44Now, if, when DPA is used in other ways, such as what you're referring to,
04:50it sometimes can become politically kind of charged.
04:53And if the DPA becomes politically charged, that is always really bad.
04:57And we, some of the things that we live with today, for instance, the cap on the DPA fund of $750 million,
05:04that is a result of a previous reauthorization of the DPA where there was a,
05:10some projects were done that were not agreed with politically that then led to the,
05:15the reauthorization to put more structure, more strictures around DPA.
05:20So, the, the, the, it is imperative to keep DPA focused on clear, bipartisan focused efforts.
05:28And there, if, if priorities are in other areas, that can be,
05:32there are other means to do those kind of, those kind of legislative efforts.
05:36I yield with, Mr. Chairman, I think that's, and for the ranking member,
05:39I think that's really important as we discuss DPA, that it becomes completely apolitical.
05:45And it's about protecting our country and not getting into political priorities and using funds that way.
05:51So, thank you.
05:51Agreed.
05:52Ranking member Warren.
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