>> government leaders to discuss issues arising at the intersection of defense ministries and the industries that serve them. today's event features the honorable andrew hunter, assistant secretary. he is here to deliver prepared remarks and have a conversation about how the air force is working to field next generation technologies. i would like to think andrew and our audience for joining us. putting this in context, i would like to underscore who we are. the atlantic council works to develop sustainable, nonpartisan strategies to address the most important security challenges facing the united states and its allies and partners.

it honors the legacy of service and embodies the e those of nonpartisan commitment to the cause of security in cooperation with allies and partners and dedication to the mentorship of the next generation of leaders. in the center, the program i lead generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the united states, allies and partners. our work identifies defense strategies, capabilities and resources the united states needs to deter and if necessary prevail in future conflict. this event example phis one of the ways one of the ways we undergo this mission. the air force is undergoing a transformation, responding to a changing threat environment and new emerging technologies. this reoptimization effort is

described as a strategic pivot in the departments acquisition approach to ensure the rapid fielding of new capabilities. this approach is guided by the 2022 national defense strategy that emphasizes innovation, technological advances and recruitment of a highly skilled workforce to maintain u.s. strategic and operational advantages over competitors. the air force is moving forward ambitiously to field next generation platforms and collaborative combat aircraft while also working to more quickly adopt advanced software and digital services. the rapid procurement of leading-edge technology to support u.s. defense assets is something we spend a lot of time thinking about. it was the focus of our recently released commission on innovation adoption final report that determined while the u.s. is a world leader in innovation, it has an innovation adoption

program -- adoption problem. i am pleased to say our work will continue with our new commission on software this year. in that context we are excited to welcome to the atlantic council the assistant secretary of the air force, the honorable andrew hunter. in his role as assistant secretary, he oversees air force research, development and position activities for over 550 acquisition programs. he also serves as the principal advisor to the secretary of the air force and air force chief of staff for development and modernization efforts. he previously served in the obama administration as the director of the joint rapid acquisition cell where he

quickly built reconnaissance capabilities and innovative solutions to chemical weapons. mr. hunter is the director of the defense industrial initiative group. early in his career, he was an official member of a committee. following his opening remarks, he will join the director of our democracy project for a moderated conversation. before turning things over, i would like to remind everyone that this event is public and on the record. we encourage our online audience to submit your questions to our

moderator. be sure to identify yourself and your affiliation. we will collect those questions through the event. our in person audience may ask questions directly using the microphones in our studio. when we begin the q&a portion, please queue up in the aisle. we also encourage you to follow the conversation on x. without further ado, thank you for joining us, and assistant secretary hunter, thank you. [applause] >> thank you clementine and steve for moderating and organizing this event. it's an honor to be here. i had limited opportunity to be

around the general himself, he was a remarkable figure. it is great to be here. great to be here at the atlantic council. i want to talk about exactly the things clementine previewed. the air force initiatives currently underway. two related ones in particular are focused on operational imperatives we believe are necessary and driven directly from our national defense strategy and the missions it assigns to the department of the air force, including both the united states air force and space force. i have a colleague who manages our space force programs. the strategy, they are closely related, their activities and capabilities are closely related and we work in close concert on

the abilities we believe are implied and necessary to fulfill missions under the national defense strategy. our operational imperatives initiative has been out there for some time. it is closely related to our more recent initiative, re-optimizing for great power competition. our operational imperatives work has been focused on identifying discrete modernization programs and projects necessary for the air force to fulfill its mission and accelerate them and filled them in a rapid timeframe. re-optimizing for great power competition goes beyond looking at modernization, beyond just acquisition programs. it really looks at the entire department of the air force enterprise. all of our offices and structures to ask the question, is the structure we have today fit for purpose for the missions assigned to the department of the air force in the defense

strategy, or are they perhaps still in a structure or shape or burdened by the legacy of previous strategies? previous national security focuses for example, wars in the middle east and the global war on terror and don't align with today's mission and where we see it going in the future. that part about the future is important. there's a lot of urgency of today. that very much is driving action for the department of the air force. we also recognize the competition part of the initiative is incredibly important because the competition is not short-term, it is long-term. it will be a mostly peaceful competition over a long period of time. we can't be exclusively focused on near-term threats although we are focused on near-term

threats. we have to understand the longer-term shape of a strategic competition in which we are engaged and lame for that as well. no simple task. it's what we've undertaken with the secretary and the chiefs reoptimization initiative. to talk a little about the why, i will preview and leave you a little wanting i hope, because the details will be part of the initiatives for re-optimizing our things you will hear a lot more about at the air force association event that starts monday next week, so stay tuned for that. if you will not be in colorado, definitely tune in. you will hear a lot more about specific and discrete initiatives. want to talk a little bit about the why and some of the problems

we are trying to solve. i also want to talk a little bit about how we can get after those problems using examples of programs many of you are probably familiar with that have been some of our guiding benchmarks to say how do we make sure we are postured repeatedly as a matter of routine rather than an exception that made its way through the system even though the system is not designed to support it? in terms of the problems we are trying to solve, talking about the operational imperatives, they are driven by discrete missions the air force, i will focus mostly now on the air force, but keeping in mind we work closely with the space force, that the air force has to be able to accomplish. and specific technical capabilities required to do that.

the nature of those technical capabilities is in some ways different from what we've had to be able to do in the past. not entirely different, and if you go back some decades when we were in a long-term, long-running strategic competition with an adversary, in that case, the cold war and soviet union, we had to continuously generate new capabilities. it was a move/counter move situation in terms of it being a strategic competition could you could never rest, you could never relax. we had to have systems designed for that purpose. although it has its flaws and certainly had its critics, our acquisition system was largely designed in that environment, designed to engage in a strategic competition with a very competent, capable strategic competitor. not unlike the situation we find

ourselves in today. what is the nature of that? a lot of the things we have today, complex systems that have to work in close coordination with one another. we have fleets of tanker aircraft that work in close coordination with a bomber force that are supplied with weapons experts in the air force developing capabilities. all of these things have to work in an integrated fashion to be successful. we were april to leverage that investment over the last 20-plus years to do very i would say hi provision -- high precision highly impactful things like airstrikes around the world, but at a very modest scale.

usually something where you can leverage intelligence resources and other resources in a way that allow you to be very judicious and built up over a period of time and do what you want to do. then you have done it and you can rebuild and reset. in terms of strategic petition, doing the same thing but at a pace and scale completely unlike anything we have done before. that drives a huge necessity for integration between and among systems. integration at a higher degree than in the past. we've talked about this quite a bit in the last year because we stood up for the first time in the united states air force what we characterize as an integrating program. the job was to deliver the

program. there is a friend network among peo's to make sure they are working together and leveraging each other's capabilities but that is sort of something that happens on the side or as a result of individuals. it's not something we currently are postured necessarily to do systematically. in the cold war we did have system centers and commands that performed some of that integrating function. but most of that was an efficiency that was efficiencied away at the end of the cold war. we need to do more of that, even more than in that previous period. we created an integrating peo to accomplish this task. his mandate is for command,

control battle management. the integration of command and control across essentially the entire force for the department of the air force, but having to tie in of course to the entire joint force and ultimately with allies and partners as well. an incredible complex task, something that secretary kendall, who knows a thing or two about signing complex jobs to people, says it's the most complex job he's ever had to give. that's an example of what i'm trying to talk about that we are driving toward, the ability to do integration in the acquisition and acquisition will department -- because our system enables it. that is a huge part of what we need to accomplish, what we know we need to accomplish good the

second thing i want to highlight is the need to take science and technology and turn it into fielded capability at an accelerated pace. go faster, turn the wheel faster and that we see as well. the national defense strategy talks about a pacing threat, and i like to say the pace is really fast. it's the pace we have to meet we have to be able to take technology from the s&p phase, and i would assert because i believe it that there is a good s&p work happening. there's also incredible work in the commercial sector and abundant commercial investment we can leverage for department of the air force purposes. the challenge is finding a way we can take that work and integrate it and deliver it at a

much faster pace. rather than something that happens occasionally, something that happens routinely and with deliberate purpose. the example i would like to point to hear, our program to deliver collaborative combat aircraft. we have an initiative within air force research laboratory. i was looking at how to apply artificial intelligence to unaccrued systems to -- uncrewed systems to allow them to partner with crewed capability. that's led to an acquisition program that is to deliver an affordable capability that can partner with our aircraft to do a wide variety of missions for the united states air force to include strike.

and other traditional aircraft missions. we've been able to take something directly happening, transition it directly into a program of record, leveraging a lot of other foundational architectures about which i will say more in a minute and get on a path to deliver capability and field capability on a rapid timeframe. that's what we are looking to make a routine way of how we do business. and more to come on how we think we can accomplish that goal. the third piece is we understand , as it was true in the past and a very challenging security environment, long-running strategic competition, we need our nerves and allies more than ever. the things we do, the way we approach our problems, the partner and ally piece of it has

to be integrated as early as possible. ideally from the first moment on the front end. in terms of what is right look like it, we have been working assiduously with our closest partners and allies to integrate them as well. certainly the office initiative is a highlight. we are working with multiple countries to have them as early adopters and early partners and enablers in that approach and in the inter-rations of that. -- and iterations of that. that's another element that is really critical in our overall impulse for optimizing for great power competition. i want to talk a little bit about how we see we will likely do this. not the specific initiatives but more the nature of the kind of change we think we need.

i alluded earlier to the need to work with industry, so as has been pointed out many times by my mentors and predecessors, the capability we field, we understand industry is the critical partner delivering those capabilities. we alone are not going to be successful in fielding capability without substantial work and substantial investment from industry, including traditional defense industry, what i would call emerging defense industry, those who have committed themselves to the defense sector and are hotly engaged now and looking to grow both their capability and presence and our defense industry and space, and companies that are truly commercial that maybe aren't looking to grow their defense space but willing to do it if there is money to be made and have inherent capability we can leverage and need.

i think we understand that industry ultimately is critical source for the things i described, both the core capabilities traditionally provided and the extent of integration and expertise to do extensive integration required. we have to work in close partnership with industry to deliver these capabilities. partnership is kind of a loaded term in the acquisition space. it is popular to talk about industry as partners and other times it is not. we go through a cycle. let me be more specific. i'm trying to use partnership in a fairly specific way. what we want to partner on is a series of architectures, architectures that provide standards, interfaces and the ability to link things together. you can imagine the kinds of architectures and standards we have for wi-fi or bluetooth.

industry gets together, it's not a conspiracy, it is a standard-setting process, a way of aligning activities of different companies to the benefit of all and to me, most important to the benefit of the air force and department of defense, to ensure that capabilities can be integrated in a logical way and relatively seamless way where we don't have to reinvent the wheel 100 times over. it's not a static thing, you don't pay once and you are done. it is a living thing. standards and interfaces, we see the famous ones in the commercial world, constantly evolved and updated. that suits our purpose exactly. we know we have to be able to constantly of all our capabilities and update them. when i am talking about partnership in industry i'm talking about partnering on a core set of architectures.

department of the air force architectures, many of them could be department of defense architectures. they enable us to field that capability, field it quickly, and integrate it and of all rapidly over time. these core foundational architectures for the great enabler for that and we cannot do it without a close partnership with and distribute i will give you an example. i'm talking a little bit theoretically. we have a pretty concrete example, advanced mission systems, government reference architecture. it was developed to allow if you will plug and play for the systems on an aircraft. you could pull out a guidance system, a box providing navigation and guidance, plug in one from a different manufacturer and it just works. we don't have to spend years and millions integrating a new box, it just plugs in and works.

working closely with industry, with industry's active involvement, this could texter has been developed and it works and we are implementing it on multiple new build platforms. that is the pathfinder, thus the example of the kind of thing to do and the partnership we need to build with industry to do it. we will continue to work with industry through contracts and traditional mechanisms. you get into contract enforcement, all of that is still true. i don't need to use the word partner like we will hug it out every time. the existing systems still exist and our relationship with industry is still governed by them but there is a key element of partnership we know we need and need to share. we've been working with industry and i am pleased to say we've had a number of willing partners from industry and i would argue that partnership is going well.

another area we are pushing hard on industry is in addition to the systems them selves and how they work together, it's how we design them. what we call digital material management. the design of the weapons systems themselves, the software, the development of the software, how they are built, how they are produced. design to production and ultimately how they are sustained through logistics support. you have an integrated digital thread that touches all of those. it goes deep into areas in which industry has the vast majority of expertise. as i have increasingly learned, also necessary to integrate with our core business systems, initially quarter the business and not something the government necessarily does or wants to control. we have to work closely with industry to set standards and interfaces for digital material

management and that something we are in the process of doing and i think it's a major step forward. all of this comes together really, the partnership, the programs, the architectures, it ultimately comes back to money. you've got to have the funding to pay for these things. it's not necessarily cheap or easy to develop a sophisticated government reference architecture for a challenging thing like integrating complex defense systems, it's not cheaper to do an architecture for weapons. we have to be willing and dedicated to making investments in those areas. we've done that at the department of the air force. secretary kendall, the chief, they have made investments. if and when we ever get in fy 24

budget request, many of those investments -- or fy 24 budget, we've had the request for some time -- we will have the funding to execute those things. some things are already ongoing. we've been able to continue them under the continuing resolution. battle management is to some extent an example. the 24 budget will allow us to really accelerate our efforts and go will belong -- well beyond what was planned for 23. the air force plan critical investments to substantially accelerate our efforts and that's what that we four budget will allow us to do, substantially accelerate our efforts on all of these things. the most important message i can deliver today, which is also the same message the air force has been sitting for some time, is lee nothing can be more important to us than getting a

fiscal year 24 budget so we can hit the accelerator on all of these initiatives and move them from the idea phase into the implementation phase and do it as fast as possible. i thank you for your attention, i'm looking forward to the conversation with steve. [applause] >> thank you, andrew. join me, please good excellent. that was as good an inaugural address i could've hoped for. we have rebranded what we used to call the defense industrial policy series. i think this is a better brand and there was a great launch to the series, thank you. we have 40 minutes to do a couple of things. that was practically worth the

event unto itself, but why don't we go a little deeper on some topics and extend beyond the range of some of what you talked about over the course of these 40 minutes. in the last 10 or 12 minutes, i will be pleased to take questions from those of you who are here in 10 or 12 minutes. you can queue up at the microphone. i'm also interested in receiving questions from many of you watching online. clem made reference but i will repeat how to do that -- i made a note. askac.org. jake will curate these for me and i can enter those into the conversation. this is an open, on the record cover station, so even if you are asking questions, i ask you to identifies yourself and if it is germane to your question,

where you are from. as to the possibility, the dire possibility we end up in a full-year continuing resolution, do you have a number on the dollar value of a dent that would put in your 24 acquisition plans? >> i do. it would set us back. it would essentially be a 13% reduction in our budget. the entire department. but the impact would be focused on impairment. the good reason congress has passed the 24 national defense authorization act is the pay raise, it has to happen, it is law. 13% less, now pay is going up at your 13% less.

it magnifies the scope of that reduction. let me talk about the reduction, there are a couple of different elements. one is our 24 request was higher than our 23. now you are at a lower number. that's a reduction. then you get the issue of the congress, if bills are enacted, they are not all enacted, at a certain point in april, the 23 number is cut by 1%. so now you have another 1% reduction. >> that is real money in the air force budget, 1% is $3 million. >> it is not a small budget. certain accounts will inevitably be off the table. i imagine some benefits and

priorities i imagine would be protected. it is a double-digit percent increase and it would not be unlike sequestration which had a really devastating impact on the department. some of those impacts we have not yet recovered from. looking at sustainment of weapons systems, they have not yet fully recovered from the original sequestration a decade ago. if we do it again, the damage would be almost inconceivable to me. >> we will get to some brighter things to talk about for sure. you mentioned a couple of programs that because they already have started you would be able to continue, albeit at the 23 level of funding. are there a couple of programs you can't start without a full-year appropriation? >> there are. i said i wasn't going to talk about the space force but i'm really passionate about the need for those capabilities because what i see on the air force side is i can't succeed unless the

capabilities of the space force is planning to deliver -- there are satellites involved in targeting, in communications, navigation. almost every capability and working to deliver depends on a space capability that is related. those capabilities, we have them but they are vulnerable. a number of investments are planned and part of our 24 budget to significantly improve the resiliency of our space architectures. i think almost every single one of those is on hold until we get that 24 budget. >> -- they sell the need for the capabilities into accelerate the ability and we need to get after them. >> still working off of what you

introduced to us, the answer is still why. number one, pace and scale, and number two, turning advanced technology investments into programs, leveraging partners, and then your discussion about industry. drawing on the fermented experience you've had going back to the obama administration, is the acquisition management system, everything from practices to regulation and law, is that the toolbox you need to deliver against these four things we just mentioned? or do we also need -- is it a good enough toolbox? >> we are adding tools to our toolbox. i will talk a little bit about some of those. some are statutory. let me start just on the things

we can do with an existing statute and within the existing process. we have a lot of support from congress to do the right thing, a lot of support from senior leadership in the department. a lot of support to do the right thing and enable us to do the things we need to do. my broad answer is yes, we have what we need but we still need new tools because there are discrete problems we need better tools to solve and i think there are new approaches. when i talk about partnering with industry, the architecture itself is a tool. you can argue we've had those in the past, highly architected system that has stood up for a number of decades because of that. not without challenges. it has been a success.

it is necessary but not sufficient. we've got to be able to work with industry. i would point to our approach to collaborative combat aircraft. we have talked in recent weeks about the fact that we are working with five different vendors on the early stages of the collaborative aircraft. a classic program of the past, we would have already narrowed it down to two, even at this early stage, in part to save money, in part because of the complexity and only so many people can do the job. in part because it's hard to maintain competition. big requirements for the government to have expertise at the table evaluating and working with a wider range of industry partners. we are trying to take a next gen approach.

we've drawn some fire because we've named some programs gen, when are you coming up with a new name? aside from the fact that mgas is really great for tanker to airplane, next gen mean something about our approach to the program that we did not want to skinny down the space of suppliers to one or two and rely on them to get us everything we need. we want to open the aperture. mission systems providers deeply engaged readily with the air force from the get-go and continuously through the program. and not get to a point where it is one prime working with us and everything is that doo-wop a. -- that duopoly. you've got to have a nexgen model.

what's the use of architecture when there's only one company building into it? then it is just their architecture. our approach is enabled by this gen approach, a wide variety of vendors, traditional and nontraditional. and continuous competition through the program lifecycle. >> you alluded to the fact that in the past, a dominant reason why we haven't kept more competitors in the development of programs is money. is the reason we are able to do this, say on cca, because we have more money or is there something about the technology is, the marketplace or the processes we are using that allow us to do this and not simply pile more money early in the program? >> i would like to say we have more money but we don't. [laughter] >> which is why i asked. >> you have to prioritize

something like architecture. you have to persuade generals in the air force and the secretary and ultimately congressmen, senators, staffers, that investing in architecture is a good use of money. even when you're talking about tens and hundreds of millions of dollars. they say i can get an f-35 for that, what does architecture do for me? we can answer that question. i've tried to answer that question. it does require a commitment in the organization to really put resources against that. we have asked industry to pitch in their own money and help us develop the architecture. and several of them have been willing to do that.

we have some new folks coming in who say this architecture approach really matches my business model, so there is an advantage and i am willing to invest. to your answer, it does take money and we don't have new money so we have to make it a priority and we have done that. we've done that with our dominance families, and we are beginning support from capitol hill providing we can get a bill. >> let's stay with industry. i'm going to ask a broad question and you can answer anyway you want. from your seat, unlike your phrase what does right look like? what does right look like in our industry right now, and conversely, offer some that's called them challenges as opposed to what does wrong look like.

no one contractor, but the industry as a resource to solve and realize these ambitions you have. what are the strong muscles you see and which need further development in industry? >> let me circle back, it might be a little weird, digital material management, ultimately the foundation for delivering military capability in the future, i believe. you see it happening, the digital threat being adopted all over the place, tesla and spacex , and a number of companies have gone all in, traditional car manufacturers. we can see the benefits of it and other industrial endeavors. we certainly see the benefits of defense, i think it's even greater because of what is required for military systems, which i would argue is beyond what is required for commercial

systems. i think there is even more advantage for us. with additional material management, it is a huge investment on the part of industry because it's not just what they do for us, it's how they do their own in their company, inventory management, how the engineers work, the tools work, healthy accounting is done. every level, this is essentially part of one digital threat that has to work together. it is not one ring to rule them all. there are multiple tools. the best tools and there are more than one, in the commercial sector for doing digital design, this is enterprise systems, inventory control and management, there are a wide variety of commercial tools out there. it's never gonna be the case that every company is going to pick one. the different companies are not all going to pick the same one and the companies have to work

together as part of an integrated supply chain and they all have to work together. the vision has to encompass the ability to take the best state-of-the-art commercial tools and have them work together and in purpose built tools for defense purposes that work with the commercial tools and it is tools, plural. they have to come together. that's something we could never do on our own. we have to work with industry on that and industry has to be willing to invest for that to be troop you we've been on a journey with industry over the last maybe 10 years on how do we realize that? we are kind of growing it. i think of digital material management as the full realization that someone will replace me and maybe they will have a bigger vision. it's not just my vision, my military partner, this is a vision from air force material command and the secretary to do this together with industry. >> hearing that, on the needs

development challenge side of the ledger as opposed to great strong muscle. >> i think it looks like we have a suite of very powerful commercial tools we can and are adopting. we have industry investing, we have air force and other services -- we are also working with army and navy on this. we are working closely together on this. i'm going to say that's what right looks like. we have a lot more digital threat today than five years ago. >> i'm also hearing that if you and the defense industry, don't aim to and quickly get up to the standard of digital design, you will fall behind. you will not be able to answer what the air force needs from our companies. >> yeah.

did you want me to get to the critique part? >> i thought that was the critique part. [laughter] lay it on. >> what are the challenges? we've seen real gaps and deficiencies. supply chain disruption that came about as a result of covid. in and of itself is a problem but it also illustrated the fact there is a deeper problem, which is we don't have a robust enough industrial base, especially in certain very specific key capabilities, we are down to one , the worst case is zero. in many cases, one. >> in companies? >> the ability to generate a solid rocket motor of a specific type we need. the ability to generate specific kinds of sophisticated electronics that we need.

sometimes we are at zero, sometimes we are at one, not too often, sometimes at two, but not healthy. we can't search. it's weaknesses in the supply chain and the industrial base and a lack of ability to search. what covid did is it created a surge to which the system could not respond. >> compounded by the war in ukraine converting to test the system. >> parallel shocks to the system that show we have serious deficiencies in those areas. i do think the approach i'm describing is meant to help solve those problems, solve them overnight, but by having a wider pool of offenders, more continuous competition, i think we can substantially improve the health of the industrial base long-term. short-term we have to work these

problems one by one. >> this is bringing me to another thing i want to ask about, the defense strategy promulgated by ost about a month ago now. i think it's fair to say begged a lot of questions about how it was going to address in more practical form rather than rhetorical form the efficiencies you are repeating, and what you also see enunciated in the document. at least within the scheme of air force, what are we going to do? capitalize companies that don't exist, create incentives for prime contractors to motivate them? what does the air force do more practically than expressed in that strategy to fill these gaps or address these gaps? >> one of the biggest changes is

if we -- is we have a national defense strategy, which is worth reading. as you know, we have a government that is a little bit allergic to the idea of industrial policy. my own believe is you have an industrial policy whether you know it or not or whether you admit it or not. but you don't necessarily have a good industrial policy, and industrial policy that makes sense. you don't necessarily have a policy across multiple department of the government. or even multiple peo's. how do i do business with the department of defense? who buys things? theoretically i buy things but the reality is you need to see this peo, this peo.

there are hundreds of buying entities. in theory and i'm afraid far to often in practice, we might have hundreds of strategies across the department of defense i'm not saying we've arrived at nirvana and we have one strategy and everyone is following it but that is the desire. this will not all be identical but we want to go to a place where there is some consistency across the department and how we approach these things. i would argue we are doing that in some of what i've already described, working with the army and navy on management architecture, which we are doing. working particularly closely with the navy. for industry, they don't say i have to do a different way for the navy in a different way for the army and maybe completely differently for the marine corps. part of it is we are coalescing

into a more common approach. there's work to be done in an implementation plan, what are these discrete investments? some of them we already know because there's money in the budget we asked congress for, congress always comes through when you give them a discrete, obvious challenge. when we can give them a very discreet thing, they are often very supportive of it. we will have to do more work to identify the additional one by one set of started to emerge. many of them in electronics, castings and forgings, bad batteries. a lot of these are somewhat known, so still work to be done but i think we also have to remember the bigger picture piece, which to me comes across in flexible acquisition i think that gets to the next gen style

of approach. we need these nexgen tools. we can do them under our current statutes and policy that doesn't mean we know how to do them. we can write policy to make it so that everyone can do it that way as well. >> getting back perhaps to the first question, we don't need a lot of law and new regulation to realize this vision, we need to change some of our practices and propagate best cases. my hearing you right? >> with one exception, we are excited congress gave us what we are calling quickstart authority, this is something the secretary has been advocating for. he's said multiple times he's been advocating for it for decades. we included a request with our physical 24 bashar fiscal year 24 request. it's similar to the acquisition

authority. when you jell down, it's focused on requirements. i was all about meeting requirements, i firmly believe it is a wonderful and necessary thing, but will we didn't have something for the services to say i have something that is really important that i need to get after as soon as possible, not because people are dying in the near-term but because i have no time to lose. we said we'd like to get something that looks a lot like rapid authority that can be used at the service level. and congress was kind enough to provide us. we are working quite a bit to come up with what are the first really great ideas we can bring to the table for that authority? stay tuned for that. >> i get maybe seven more

minutes and then we will take questions from the audience and i have a lot to squeeze in. we will go a little bit lightning round unless you want to expand the first question. yesterday a bit of a blockbuster announcement about the army's decision to cancel its reconnaissance helicopter. one of the reasons was lessons learned from ukraine. while it is not a big air war by any means in ukraine, are there important things in air force is learning from ukraine that will turn up some aspect of those learnings that will turn up in changes to air force acquisition? >> i taken acquisition linens to it, i think there are tons of lessons from ukraine, many of them operational. to be fair, i think what i will be say with a broad brush is the

lessons learned are things we kind of already knew but they've been brought home. one thing we knew was dominance of the air is really important and really hard. you may not have it when you need it. that is just true, it's true going forward. it is increasingly challenging to obtain air dominance and it's not always achievable. the consequences of not having it are what we see happening in ukraine. the second thing, the importance of electronic warfare and the pace at which it moves. that's something we knew, but it has been demonstrated and it is a wake-up call. we had to do electronic warfare. this is a different scale and intensity and sophistication. and then the last thing is just the challenge of ramping and

surging production. right? we did sort of understand that. but it's really been brought home. >> ok. true lightning round here. i just want to knock down your big acquisition programs, any color commentary you might give us on them. let me start with, as it were torn from the headlines, b-21. seems like the aircraft is developing well. an earnings call recently, made known that they're going to have to absorb more costs than they had planned to. any other color commentary on b-21, but more specifically, do you worry about your prime contractors who have signed and they're not the only ones, boeing's a eating a lot of cost on the kc-46. to what degree does it concern him or herself with that? andrew: on b-21, right, program is executing from my perspective very well. we're very excited to be in flight test.

we are excited to be on in terms of cost -- on track in terms of cost and schedule in terms of baseline. this is what you're expected to deliver on track. executing very well. on the topic of what happens to industry when they have losses, i do care. absolutely, i do care. because as i mentioned at the front end, right, without industries' capabilities, we're never going to get to where we have to go. so we want our industry partners to be there for us in the long run and we do not want to undermine their long run viability by the way in which we approach programs. when i talked about kind of that nextgen approach, there's an element of that, right, i talk about continuous competition.

so what do you see the dynamics of the past? the dynamics of the past are, if you lose the competition, you've just lost 30 years of -- [indiscernible] -- and if you -- so you go all in to -- [talking simultaneously] then you find yourself in a situation where you've been very agrees -- you bid very aggressively and now maybe you're taking losses in early production on a program that you, you know, -- so it's a super high stakes environment. kind of the traditional way. one of the benefits of the nextgen approach is there's much lower stakes because you're not losing 30 years of business in any individual competition. you don't have to bid aggressively or nearly as aggressively. we hope people will still bid aggressively. but they don't have to bid super aggressively because they're worried they're going to lose multiple decades of business because that next competition is just around the corner in every case. steven: even in c. kr-frpt a., i don't -- c.c.a., you're not

ashoing fixed price contracting. andrew: we're not. that's been a tool from day one. it is the way commercial industry does it all the time everywhere. there's nothing wrong with fixed price contracts. right? but if we set up structures where we incentivize people to do things that they later regret, and then we regret, that's not good and we don't want to do that. steven: ok. andrew: we are going to enforce our contracts. [laughter] steven: speaking of kc-46, is there anything you can say that's not predecisional about the so-called bridge tanker, kc-135, nextgen, your nextgen tanker, actually, right? anything you'd like to say about that? andrew: there's so much goodness in the tanker world. [laughter] steven: we hardly have time, is that what you're saying? andrew: the quick version, so we are very focused on the nextgen air fueling system. it is important because the security environment, the threat

to the tanker force is real and growing and we recognize that we need a different approach as a result of that. so nextgen air filling is the destination. that's where we need to go. i always like to say, if you know where you're trying to go, it's a lot easier to figure out how to get there. that's where we're traying to go. there is -- we're trying to go. there is a gap between when we can reasonably expect a field and gas. and when we will complete the existing contract for kc-46. so that's where this idea of like a bridge comes in. so i can't announce to you today what our strategy or acquisition strategy is. for a bridge. but we're working hard on it. we know where we want to go. and what we're trying to do is have a path that gets us there. steven: maybe we will watch the space over the f.y. 2025 budget request. i don't want to infringe any more than i probably have on the opportunity for those of you who have come to ask questions. those of you in the audience who want to ask questions should

stand at that microphone. that's how i know that you'll -- excellent. in the meantime, while they are assembling, let me pull a good question here from online. retired admirable scott van buster wants to know, how is the air force addressing this growing drone threat and sophistication or for that matter even, is that an air force mission, counter unmanned aerial vehicles? what's up there? that's obviously big in the news these days. andrew: there's a lot of discussion about, you know, whose mission is it. i think the reality is it's everyone's mission. the nature and the scale of the threat is such that there's plenty of need for counter-u.a.s. across all of the season s*frs and multiple regimes and domains. but having said that, you know, we want to do things in an integrated way. so it may well make sense for someone to take on, you know, like an executive agent role or a lead service role on counter-u.a.s.

i think still work to be done to define the parameters of what that will look like. but u.s. air force is engaged, i think the army is deeply engaged and the navy brings a lot of game to it as well. the biggest thing that obviously stands out about counter-u.a.s. is not getting on the wrong side of a cost trade where you're spending a multimillion-dollar miss toll shoot down a -- missile to shoot down a much cheaper drone. you need systems so you can match weapon target pair to use air force terminology and so it's all in, right? everyone needs to come to the table. steven: ok. identify yourself, please. questioner: robbie with service capital management. so secretary hunter, you've eloquently laid out a few of the partnerships in the national security innovation base between government industry and even academia on the absentee front.

but over the last decade, there's really been the growing emergence of the private capital sector. and the air force has really been working with the venture world. where do you see the private equity world come in, especially when you're dealing with challenges like production and really scaleability where billions in the private equity world can come to bear and really foster and support the industrial base supply chain? thank you. steven: thank you. andrew: yeah, i think there's a number of companies that are entered. they explicitly targeted the defense space, that's the business they want to be in. it's not just ancillary to their other true business, it's core. and i think that's good. it's very positive. we welcome it. i would say one characteristic of these companies is they're very comfortable with fixed price contracting. in many cases they don't want to take on the infrastructure required to do cost-based contract accounting and therefore they like to --

there's one reason why we're not getting rid of fixed price contracts. they're very valuable tools. i would point in particular, i don't have any favorites, i never do, an industry, but i would point out that a big company is one of the vendors on the c.c.a. that's a program that's about producing aircraft. it's not a demo. it's not a maybe we're going to produce something. the secretary of the air force has given us distinct and direct inventory objectives and timelines to get there and so now obviously it's a competition and may or may not end up moving to production of a system. but it's not theoretical that a company could be engaged on a major production program. steven: what about, if i may, the broad shouldered private equity firms that are sreufpbting in -- investing in, taking companies private,

investing in ma taur companies. do they have a -- in mature companies. do they have a place in your -- are you interested in that capital getting in the sector as well? andrew: well, they're in it, right? a huge number of defense companies are private equity-owned. i think it can be a good thing. a deep-pocketed private equity entity can provide that base of stability that most of our defense companies need. to work with us long-term. so it can be a positive thing. it can turn negative if you get a private equity investor who is just looking to, you know, make a lot of cash real quick and then exit real quick. that's not the kind of private equity investment i would prefer. steven: right. ok. there is a question here that takes us back to ukraine. ukrainian f-16's. this is from colby with the insider. the u.s. is leading sustainment for ukrainian f-16's.

can you talk about those munitions sustainment requirements and the degree to which the air force is getting, you know, again, if we could get a supplemental on emergency supplemental that the air force is poised to respond to? andrew: yeah. sustainment's a huge priority for us. again, we're going to have a lot more to say about readiness and its importance and what we think we need to do to up our game next week. it's a huge priority. we have to invest in it, right? there's definitely a money challenge there. there's also a process challenge, right, how do we identify or how do we give our system explicit direction and guidance prioritization to say what really makes a difference? is 5% more aircraft availability of a-10's what makes the difference? in our future fight? i would argue it's not. steven: is the u.s. air force going to do the sustainment for the ukrainian f-16's? andrew: yes. that is a role that the united

states agreed to and our program manages f-16's, will be the enabler. and our departmentos. steven: perfect. questioner: thank you. defense leadership forum. speaking to acquisition. can you tell us with regard to all the air force bases, many of them reaching back to world war ii, on islands that are now being rejuvenated and refacilitated, can you say whether they're going to be working with the army corps of engineers or others with the construction in the milcon side of that? andrew: there's a lot of work to be done to have the infrastructure in place in the parts of the world we know we need to be prepared to operate. to support our concept of operations. the term that we use a lot is agile combat employment.

you're not tied to too many sets of hangars or runways that can be easily targeted by a potential adversary that you're out of the game because you just can't get off the ground. and so it's a more distributerred approach -- distributed approach. the agile part of it is really challenging. but it definitely creates a demand signal, not just for infrastructure investment, which it does, and as you've noted, right, there are some recently announced projects to revamp air fields that have been in the pacific in the past and have been out of use. but it also creates a demand signal for support equipment, for fuel infrastructure, for the tools that allow us to turn aircraft around and to provide them with fuel, provide them with weapons. there's a huge investment there. and that's an investment that whether we get a 2024 budget, we'll be able to make substantial progress on. steven: thank you. let's take the next question at that microphone right there, please.

questioner: craig sanders, thank you for the speech, from csis. steven: get closer to the microphone, please. questioner: a question about government reference architectures. can you elaborate what you've been doing to bring in allies and partners in cooperation there and are there steps -- you mentioned industry investment, are there steps allies can take to win on ramps and the like? andrew: yeah, i'd be happy to talk about it. it can sound like somewhere there's a set of like blue paper with lines and drawings on it. it's much more concrete than that. in fact, it's mostly software-based and so we can, we have and we will share the necessary tools and the necessary code with partners and allies for them to participate

actively in developing and implementing these, a sentencingtures in their own system -- these architectures in their own systems. they can architect their own system to match the structure. it's the nature of the global defense industry that a lot of it resides in the united states, inevitably the vast majority of them are going to require capability from u.s. firms as part of their architecture. but they can design their own needs. they can also design things that we can adopt and we can adopt it pretty seamlessly if it's designed to our architecture. that's the beauty of this. it's how it enables interoperability and a whole range of advanced collaborations between partners and allies. that's a critical piece of our strategy. steven: for those of you watching online, we have a little bit of a late start. i'm going to run over, a couple, three minutes, in order to take two more questions before we wrap. questioner: thank you very much.

i'm a member of the press with the asia today. my quick question, the last two weeks, china was in the news on capitol hill and among the industries here. my question is that, how can you convince congress that chinese activities in the u.s. defense priorities and where you go to -- [indiscernible] -- and finally, if any of the u.s. department or industries -- defense industries are using any made in china parts? steven: get the last piece first. andrew: it does happen from time to time. china's a manufacturing powerhouse in the world and therefore there's a lot of, especially as you get to the lower level parts and components that are produced in china. it can be challenging from time to time to keep all of that out of our supply chains. but by and large we're not looking for contend from china

-- content from china and we work actively to keep it out of our supply chains. our efforts are not perfect. it does happen from time to time. but our intent and where we find that, we take it out. on the question of is it hard or is -- what is it like working with congress and articulating the china challenge, it is not hard. i would say the vast majority of members of congress are at least as focused on the china challenge as the department of defense is. there's a lot of folks in the department of defense, some more focused than others. the secretary of the air force is notoriously focused on that challenge. it would be hard to surpass him for focus. but -- impossible, in fact. but nonetheless, i find that congress is very aware of the challenge and we're working well with them in clarifying that. having said that, you know, it has to be said, the resource levels that the nation is willing to allocate to national

defense need to reflect that understanding and if we're under the levels of funding from the financial responsibility act, i see a disconnect. steven: thank you. we'll take one last question, please. questioner: thank you very much, secretary. my name is samuel chen, i'm the vice president of the george washington union's alexander hamilton society chapter. i wanted to ask a very quick question about the e-7 program. i know the u.s. air force have -- does this have to do with the f-35's increased capabilities and increased from satellites. are we going to be considering more options for increased

aircraft with increased effectiveness? thank you very much. andrew: excellent question. i'll try to give an answer that matches the sophistication of the question. you're correct. we're moving away from the idea of one to one replacements. it's also true for e-7 and e-3. so, yes. we are trying hard to look at all of the capabilities across the joint force, what they bring to the table and then not go buy something just because we need the same number of the new thing that we had of the old thing. but what is the number we actually need given the capabilities of the joint force. so there is a difference in number between the e-7 and the e-3. the exact, you know, difference in total number is still to be determined. ultimately. the way acquisition programs work. we have committed and we are engaged in a rapid prototyping program for e-7 which is two aircraft and we've talked about

production quantities that we anticipate needing but as of now, we're in contract for that prototyping program. i do expect a production program as well. and the capabilities of the e-7 are such that you wouldn't need one for one even if you were comparing e--p and e -- e-7 and e-3. we think you can cover things more adequately at a different number. having said that, we're wary of the dynamics of small fleets which can be really challenging for sustainment and just inherently make operational challenges because you don't have very many. so there is a floor, if you will, of knowing you've got to build at least a certain number to have a real viability capability -- viable capability. so we're looking for that. and yes, your question you reference that f-35, their space capabilities are those things that have gain in the command and control space. and that is definitely part of

the mix. steven: thank you. that excellent question and thorough answer is a good place to end. i'm going to thank you and then i'm going to give you the last word. my ambition, longstanding now, for that matter, for this series is to improve the public conversation about issues that are arising at intersection of, as i like to say, ministries and industry. but also to give the public a sense of who these policymakers are as people, how they think, what their temperament is, what they are willing to talk about, the depth at which they're able to answer questions or sometimes the shallowness with which they have to resort to. and this event could not have met those standards more perfectly. we learned a lot. i think we improved the already good public conversation about air force acquisition and we learned more than even i who has known andrew for a while knew about the temperament and the

brain of the assistant secretary of the air force for acquisition technology and logistics. so thank you, andrew. a final word? andrew: i just want to talk a little bit about the people that we have in air force acquisition. because they talk process, you can talk all the technical stuff and you can tend to gloss over the people. we have amazing professionals in air force acquisition. they blow my mind on a daily basis. and it's a tremendous honor to work for them and to lead them. we are going to talk about areas where we need more technical expertise in our force and we're going to get it. we're going to develop it. we're going to flurriture it. and we're going to make that happen -- flurriture it and we're going to make -- nurture it and we're going to make that happen. that's not to suggest that the existing work force isn't kpefrplary because they really are. when i came to the job i was wondering if i was going to have a lot of work to do and i came in the door and found that eye-watering work was already under way and being done. it was being led by air force

professionals. having said that, we have it in pockets that are incredible. there are other parts of the system that probably aren't at the same stage of advancement. so we're also going to make sure we spread that goodness from our pathfinder organizations out to the rest of the enterprise. but i couldn't be more pleased with the quality of the folks that you have working for you in your air force doing acquisition. steven: that's worth saying and shouldn't ever be taken for granted. thank you very much. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2024]