00:00Thank you very much Mr. Chairman. Thanks to a lot of effort and pressure, the F-35 program is marginally improving, just in time for drones and other unpiloted aircraft to basically take over warfare. I think it will probably go down in history as a huge, massive waste of taxpayer dollars. But what lessons have we learned from this? Undersecretary Delphi?
00:27I think we've learned a lot of lessons. Number one, I think there is an element of, and I think you'll see some of that based on my conversations with my colleagues in the Air Force, of F-47 where we maintain a government reference architecture which inherently in the design of the system gives us insights into how the system is architected, allows us to maintain competition in the development of mission systems and hopefully competition.
00:57throughout the life cycle of the program. So that's number one. I think number two is, you know, we need to go fast, we want to go fast, but the risk of concurrency and pursuing technologies that are not fully mature yet, trying to incorporate them into a weapon system, can end up slowing us down.
01:15So I think it's having the expertise to apply the judgment to find how can we accelerate and how do we need to just slow down a little bit and make sure we're doing rigorous evaluation of how to deploy mature technologies into systems that doesn't delay us in the long run.
01:33Another problem with the F-35 is that they tried to get a part in every state. And that's one of the reasons why it's taken a lot of effort for Congress to apply pressure because there are a lot of colleagues who don't want to lose that business. How are we going to fix that with the F-47?
01:49Sir, I might defer to my Air Force colleague on the acquisition strategy on the F-47.
01:56I appreciate that as well. The idea of, like Under Secretary Duffy had just mentioned, the approach there regarding the government's understanding of how the work will be done by Boeing.
02:11In this case, what are the suppliers to those guys? Are they really the best in class? Are they really performing? Using an open architecture so that if one isn't performing, what are the alternatives?
02:23Maintaining a base of potential suppliers so that we are not completely locked in.
02:30So let's talk about that base for a second. In the last 30 years, DOD has dropped from 51 prime contractors to five.
02:38Do you believe that this is an over-consolidated market? Are there things that DOD should do to increase competition under Secretary Duffy?
02:50I absolutely think competition is critical in ensuring that we're preserving competition when we're thinking about...
02:58It's a challenge, right? You want to always pursue the...
03:01I'm sorry, go ahead.
03:02Should previous administrations have pursued antitrust litigation or how do we prevent this over-consolidation?
03:09My focus is going forward and I think it's how do we think through when we're making acquisition decisions.
03:16And I do think F-47 is an example of the new kind of thinking that we need where we're not surrendering the entire architecture of the system
03:24and the acquisition strategy to a single contractor where we can maintain diversity in a single platform and participate in the competition going forward.
03:33And I agree with that. But if there are only a handful of contractors, then you're kind of back in the same position.
03:38So how do we prevent this over-consolidation in the industry?
03:41Well, I think that you will always have a need for these exquisite systems for traditional vendors who can bring together supply chain, workforce, all that.
03:54But I think that in this case, where you have a more open approach to those subsystems, you can be diversifying the industrial base actively as a government,
04:06where you're more participatory in who are the suppliers that are providing those subsystems.
04:11And it's that stepping stone from a subsystem to a prime that it's a required, I think, for growth of the defense industrial base.
04:19Mr. Bailey, did you want to add something?
04:21Yes, sir, if I could pile on as well.
04:23Because certainly along those lines, right, you have only – it is very capital intensive to go through to have facilities to be able to construct all those things.
04:33So we look at other opportunities in the industrial base at those subsystem levels, certainly.
04:40But that's not to totally forget that we can create more opportunities to bring new entrants in or scale smaller ones.
04:48And we see that in our collaborative combat aircraft program, where we have the companies that are performing in there are not from that traditional ilk.
04:57Right? And they are looking at how to build complete systems.
05:02And then the question for them is now we take a look at their ability to produce on those as well.
Be the first to comment