Hearing of the Readiness and Management Support Subcommittee of the Senate Armed Services Committee - Department of Defense Information Technology Acquisition Processes, Business Transformation, and Management Practices

Hearing

Senator SHAHEEN. Good afternoon. Sorry to keep you all waiting.

At this time, I would like to call the subcommittee hearing to order.

I want to begin by acknowledging my colleague from New Hampshire and ranking member, Senator Ayotte. It has been great to have a chance to work with her in this subcommittee, just as we do in New Hampshire. So we are always pleased to be here representing New Hampshire on the subcommittee.

During the hearing today, we are going to be receiving testimony regarding information technology acquisition, business transformation, and management practices. And this is the first hearing of the Readiness and Management Support Subcommittee, and I think we are beginning with an issue that is critical, as we look at the many other issues we will be addressing in the Department of Defense this year.

The challenge of procuring IT systems in a timely and cost-effective manner is not something that is unique to the Department of Defense. Unfortunately, the stories of billions of dollars that are lost without any useful product as the result of that spending have appeared throughout the Federal Government, and while we recognize that this issue is not unique to the Department of Defense, it is clearly the biggest department within the Federal Government, and we have seen these issues appear, unfortunately, over a period of years.

In fiscal year 2012, DOD IT acquisition investments totaled $32 billion, a sum which reflects the Department's growing need for sophisticated and reliable IT infrastructure. However, the $32 billion is expended across the Department under the supervision of multiple officials with what is often too little involvement of the operational users and those who must defend IT systems against cyber threats.

GAO will soon release a report on acquisition of major IT systems in the Department of Defense, and though the report is still in draft form, the results that we have seen are disturbing. Of the 15 programs GAO reviewed, 7 experienced growth in their cost estimates, ranging as high as 2,233 percent. Twelve programs experienced schedule slippage, ranging from a few months to 6 years, and only three programs met their system performance targets.

Among the programs assessed were some that could have an impact on DOD's ability to meet the statutory goal of achieving an auditable statement of budgetary resources by the end of fiscal year 2014 and an auditable financial statement by the end of fiscal year 2017 which, as I am sure you all know, is a major priority for this subcommittee and for the Senate Armed Services Committee as a whole.

We must find ways to lower costs and improve inefficiency, while also improving our resiliency to cyber attack. A major piece of that challenge will be reforming our cumbersome acquisition process. Our current systems which are better suited for weapons systems than IT often produce systems already outdated once deployed. A
new rapid approach with proper oversight which capitalizes on the knowledgeable IT workforce is necessary to correct these deficiencies.

As you all know, this is not the first time the Armed Services Committee has tackled this issue. Section 804 of the National Defense Authorization Act for 2010 directed the Secretary of Defense to streamline and improve effectiveness of our current processes.
The subcommittee remains interested in section 804 and we look forward to hearing from you all how the Department intends to move forward.

Another area of interest to the subcommittee is DOD's ongoing data center and server consolidation on cloud migration. This initiative called the Joint Information Environment, or JIE, is extremely ambitious and complex, and yet it seems to lack formal management structures and processes. So we look forward to hearing more about how the JIE is expected to unfold.

So with those opening remarks--and I have a longer statement that I will submit for the record--I would like to welcome our four witnesses this afternoon. Testifying we have Assistant Secretary of Defense for Acquisitions, Katrina McFarland. Welcome. Acting Deputy Chief Management Officer, Kevin Scheid. Am I pronouncing your name correctly?

Mr. SCHEID. Yes, you are.

Senator SHAHEEN. Good.

Chief Information Officer Teresa Takai. Again, correct pronunciation?

Ms. TAKAI. Yes.

Senator SHAHEEN. And in addition to these representatives from the Department of Defense, we welcome David Powner of the Government Accountability Office. Thank you for being here.

Now I would like to turn over to Ranking Member Senator Ayotte for her statement. Thank you.

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