Mr. Chairman and distinguished members of the subcommittee, it is a pleasure to have this opportunity to discuss with you the Research, Development, Test and Evaluation (RDT&E) infrastructure of the Department of Defense.

As the members of this subcommittee know very well, our nation has the best warfighting technology in the world. Our nation’s security depends on maintaining that winning edge to shape future events to our advantage, prepare for future conflicts and if deterrence fails, respond with total force dominance. Today’s research and development investment decisions and laboratory activities are shaping our legacy for the soldiers, sailors, marines and airmen of the Joint Vision 2010 force. The battalion commanders for that force are high school freshmen and sophomores today. The NCOs, the pride of our military, are in elementary school. Much of our technology legacy to them and their successors is being developed, demonstrated and experimented with today in the laboratories of the DoD, industry and academia.

  University basic research expands our understanding of basic phenomena and lays the theoretical foundation for future militarily relevant technologies. Generally industry develops and demonstrates technologies. This gives them enough confidence in these technologies and their maturity to propose them in response to our acquisition requests for proposals. Approximately 75% of the Department’s RDT&E budget is performed by industry and universities. Sponsoring the best mix of science and technology programs in industry and academia and protecting the tax payers’ interests have always required a corps of technically competent scientists and engineers in the DoD laboratory system.

 Furthermore, if the in-house research and engineering support to our program managers for new development programs and for in-fleet systems engineering support are to be of high quality, our personnel, equipment and facilities must be up to the task. The labs also provide the critical function of selecting those potential industry providers who are best able to perform the advanced development in a particular technology area.

  The Department needs to reduce the size of its infrastructure, including acquisition infrastructure, consistent with reductions which have occurred in force structure since the end of the Cold War. Given current and foreseeable budget levels for defense and the demands placed on today’s force while we transition to tomorrow’s force, we must improve the effectiveness and efficiency of our RDT&E infrastructure work force, facilities and equipment.

  Beginning with the Base Realignment and Closure (BRAC) action of 1988 and continuing through BRACs ‘91 and ’93, our labs and test centers downsized substantially. The Navy closed 13 RDT&E sites and closed 27 other RDT&E activities at host sites. They also consolidated RDT&E functions into full spectrum, full life-cycle Warfare Centers. The Army closed 3 lab sites and closed 9 lab activities at host sites. Two T&E sites were closed and the Army Material Command labs were consolidated into the Army Research Laboratory. The Air Force closed 2 RDT&E sites. Despite these actions, however, analyses as part of BRAC ‘95 indicated a remaining 35% excess capacity in our laboratories. Lab and test center personnel levels have declined from a peak of 136,000 in 1990, to 93,000 at the end of 1997, and will fall to 83,000 by 2001.

 Although BRAC ‘95 was specifically intended to address cross-Service sharing and execution of technology development, no cross-Service actions were achieved. Because each Service made their own recommendations, consensus was not achieved. There was no requirement for the creation of a comprehensive tri-Service RDT&E facilities plan. In addition, separate studies were conducted for labs and test centers. This created further difficulties due the Services’ different definitions for laboratories, research and development centers, and test and evaluation centers. Furthermore, because they use dissimilar accounting systems for these various organizations, even within a given Service, it was difficult to impossible to compare the costs across the Services.

 Consequently, Congress charged the Department to revisit lab and test center downsizing and cross-Servicing in Section 277 of the FY ‘96 Defense Authorization Act. Section 277 called for specific reviews of fixed- and rotary-wing aircraft, weapons, space systems and C⁴I, all areas of technology identified in BRAC ’95, as worthy of serious restructuring. The Department named the Section 277 study "Vision 21" and pursued it vigorously for well over a year. It built upon the information and lessons learned from BRAC ‘95.

  Section 277 called for development of a plan "to consolidate DoD laboratories and T&E centers into as few installations as is practical and possible, in the judgment of the Secretary, by October 2005". As such, Section 277 was interpreted by the Department as a BRAC-like requirement. Proposed legislation mirroring prior BRAC language, specific to labs and test centers, was drafted by the Department to provide the necessary authority. When the Secretary requested broad BRAC authority as part of the Quadrennial Defense Review, the lab and test center legislative initiative was no longer needed. When, a new BRAC was not approved, Vision 21was stalled.

  Most recently, Section 912 of the FY ‘98 Defense Authorization Act tasked the Secretary to provide a report to Congress, by April 1, 1998, containing a plan to streamline the acquisition organizations, workforce and infrastructure. That report is in the final stages of preparation. Because the labs and test centers are a prominent part of the acquisition infrastructure, both through the development of technology and provision of matrix support for Program Managers in the procurement process, they have been the subject of intense review in the Section 912 process. While I can’t speak for the final recommendations the report will make, I do want to provide you with a vision for our laboratories, which I believe will fall within the framework of the report. In this particular case, notwithstanding the need for a comprehensive RDT&E plan, my comments will refer specifically to laboratories and R&D centers. My colleague, Dr. Pat Sanders will address the unique concerns of the DoD Test and Evaluation community.

  As I tried to suggest in my earlier remarks, the defense labs can be justifiably proud of the role they have played in recognizing, sponsoring, developing and delivering the technology winning edge to our warfighters. But global political conditions, the global market place and the U.S. defense industry have changed dramatically in recent years and the labs need to change as well to stay in step.

 To remain relevant, competitive and cost effective, our RDT&E infrastructure must be transformed to meet the needs of the 21^st century force, consistent with the budget and economy realities of today and tomorrow. This challenge is exacerbated by several serious problems. Most important is attracting and keeping the best and brightest scientists and engineers, a daunting task under the current civil service system. Sponsoring and performing the best research and engineering requires the best engineers and scientists, yet we are increasingly finding it difficult to obtain them because we can not compete with industry for the younger engineers. For young engineers with masters degrees or PhDs, we are $10,000 to $20,000 below the industry salary average. With downsizing of our laboratories, there are fewer openings. Without an influx of new scientists and engineers we are at risk of not staying current with the cutting edge.

 Although BRAC approval is needed to achieve the greatest improvement and savings, there are initiatives we can take now, which do not require BRAC authority and will vastly improve the ability of our labs and centers to perform their mission cheaper, faster and better.  

1. Perform a cross-Service analysis of opportunities to consolidate some responsibilities for research, technology development, test and evaluation areas and functions into lead or executive Services. This will enable Services to mothball or eliminate some test equipment and buildings, reduce costs and improve efficiency. These funds can then be reinvested in their core areas of responsibility. 
2. Baseline the current cost to operate existing RDT&E infrastructure and develop cost estimates for the RDT&E infrastructure alternatives. Convert the RDT&E infrastructure to a working capital fund with flexible rate setting and establishing a cost based management tool to provide the requisite ability to compare inter- and intra-Service costs and trends.  
3. The labs and R&D centers should be more open to cooperative research with industry and universities at the Government lab and exploiting the federated lab concept, such as that created at the Army Research Laboratory. This will provide the DoD with more agile, responsive labs and centers that are more current. This is increasingly important as technology cycle times compress.  
4. Support functions should be contracted out as allowed by law.  
5. Increase the portion of the scientists and engineers who are hired under the Interagency Personnel Act and term appointments. This will help the DoD to hire the best and brightest, pay them a competitive salary, and provide staffing flexibility to deal with inherently fluid technology staffing needs. The organization will also be a better smart buyer.  
1. Work to improve our ability to hire, reward and retain capable Government scientists and engineers. 

With those processes, we will be able to streamline management and oversight functions and work toward the goals of Section 912; but I need to stress that we still will need the base closure authorities that we will propose for years 2001 and 2005 to save funds that will be required to support our military forces in the 21^st century.

 I would be pleased to answer any questions the Committee may have.