Keynote Address by Deputy Secretary of Defense Kathleen H. Hicks: "Structuring Change to Last" (As Delivered)

View Online Deputy Secretary of Defense Speech Keynote Address by Deputy Secretary of Defense Kathleen H. Hicks: "Structuring Change to Last" (As Delivered) Aug. 7, 2024 Thanks very much and good morning to everyone. It's really good to be back here at NDIA. So last year, I stood at the podium at NDIA and described in detail how, from day one, and now for more than three-and-a-half years and counting, Secretary Austin and I have been taking action on the urgency to innovate: one of DoD's greatest imperatives. Today I'm here to build on that talk: to highlight what's changed in almost four years, what's accelerated over the last year, and how we've been structuring change to last. Now, nothing goes from zero-to-60 overnight. Change is a progression. So I'm grateful for the hard work of those who preceded us. Without prejudice of origin, we saw what was done, what needed doing, and what could be done. And we took the next logical steps. Once we had foundational building blocks in place, our rate of change accelerated — enabling the kinds of faster, go-big innovations that we've pursued since 2021. *** One example is how we've embraced flexible acquisition pathways and innovative contracting tools to work better with commercial and non-traditional defense companies.  Four years ago, Middle-Tier Acquisition was an infant. The Software Acquisition Pathway hadn't yet launched. The Commercial Solutions Opening, or CSO authority, was still a pilot. And Other Transaction Authority, OTAs, were almost exclusively used as a tool for R&D and prototyping. Despite a 2020 spike in use for Covid response, the ability to use OTAs for follow-on production was virtually untapped. Of the $27 billion obligated through DoD OTA awards from January 2017 until four years ago today, less than 1 percent was for production. One year ago, I said here that it wasn't enough to have these authorities; we had to use them to deliver for the warfighter. Today, over 200 programs have used Middle-Tier and Software Acquisition pathways, with $57 billion flowing through them since inception — nearly 40 percent just in fiscal '24. In some cases, they're shaving up to six years off delivery timelines. And since January 2021, we've obligated $44 billion with OTAs, 61 percent more than at this point in the last administration. Production's share of that total grew over 12-fold compared to four years ago. That's real change. Another example is how we're improving how we work with innovators across America, from tech firms to private capital providers, to be a better customer and collaborator. Four years ago, some were still reticent about working with DoD. Some founders weren't even thinking about us. Interested funders had no clear path to align with us. By one year ago, we had elevated DIU as a direct report to the Secretary of Defense and charged it with a central role in driving innovation across DoD. We'd also created the Office of Strategic Capital to catalyze investment in key technologies for national security. Today — in partnership with Congress — OSC is funded and has authority to provide loans or loan guarantees totaling nearly a billion dollars, across 31 critical technology areas. They'll start calling for applications soon. Meanwhile DIU has its own nearly-billion-dollar budget, growing staff, and very important work to deliver on, some of which I'm going to talk about later today. Of course, if I described everything we're doing, we'd be here all day. So this morning we've posted an Innovation Fact Sheet on defense.gov that covers these areas and others — such as: our unceasing work to debug DoD's innovation ecosystem; how we've built more bridges and express lanes over the valleys of death; our investments in data and AI; and, how we've driven those investments forward with real-world operational applications like Combined Joint All-Domain Command and Control. Another thing: four years ago, and even one year ago, none of you had heard of the Replicator initiative, which wouldn't be where it is today without all those other efforts. *** Like so many game-changing innovations, Replicator was born because the right ingredients came together: An operational demand. Technology ripe enough to scale in time to matter for the warfighter. An atmosphere where you can take a chance on something big. And leaders at all levels relentlessly focused on results. As I said here last year, if you only have some of those elements — if the need's not clear, if the tech is premature, if there's no risk-tolerance, if no one's willing to propel it forward — then things fizzle, aren't adopted, or never scale. But when all parts, all four of those parts combine, it's pure alchemy. Replicator was hardly the first time this happened. Nor was it the first time we had to "recast thinking about national protection." That's how President Franklin Roosevelt described the urgency to innovate back in May of 1940. The United States was not at war, yet, but other nations were. And he knew we had to be ready. He'd just seen the Nazis use motorized armies and airborne paratroopers to sweep through the Low Countries and swiftly rout the French army. But while FDR saw the character of warfare changing — hastened by accelerating technological and operational change — he also knew American industry wasn't changing, at least not enough. Despite how, as Roosevelt said, "one belligerent power…appears to have a weekly production capacity…far greater than that of all its opponents." So, to help catalyze change, FDR set a big, bold, public goal. Addressing a joint session of Congress — over 18 months before Pearl Harbor — President Roosevelt called for America to produce 50,000 airplanes a year. Now, the year before, we'd barely built over 2,000. The domestic response to FDR wasn't exactly warm. Critics complained that a public announcement came before they saw a clear plan. Others cited fiscal constraints, a lack of pilots, and industry shortages of skilled labor, factories, and machine tool plants. Abroad, the head of the Nazi Luftwaffe reportedly "burst out laughing" when he heard about FDR's goal, calling it "pure propaganda." After all, that year Japan and Germany together would outpace U.S. military aircraft production by two-and-a-half times. Later, German press sources told reporters that "everyone" knew Roosevelt was "bluffing." Skepticism like this is alive and well. Among our current strategic competitors, we've seen open-source reactions calling Replicator "wishful thinking," "impossible to achieve," and "a fantasy." Of course, if that's what they want to think about Replicator, I can't stop them. So instead, I'll simply tell you what we've been doing in the 11 months and 11 days since I announced the Replicator initiative at this conference: We aligned leaders across DoD around a common vision. We identified and validated key operational requirements from combatant commands. We selected initial capabilities to meet those demands, from a field of nominees across multiple domains, harnessing the very latest in technology. We developed acquisition strategies for each capability, to determine which systems to field. We analyzed the resources it would take to deliver on those capabilities, and where the gaps were. We submitted a spend plan and reprogramming requests to Congress to accelerate implementation. We've conducted scores of briefings to Congressional committees, members, and staff. With Congress's support, we secured needed funding for fiscal year 2024, about $500 million, and budgeted a similar amount for fiscal year 2025. We also announced some scalable all-domain attritable autonomy capabilities selected for accelerated fielding in the first tranche of Replicator — including Switchblade 600, a loitering munition that can be launched not just from land, but also from ships and aircraft. And we continue to incorporate lessons learned from Ukraine and elsewhere. We created a process to review and strengthen the cybersecurity of companies that support Replicator, before we publicize specific systems or vendor names. It's part of our commitment to ensuring private industry has access to the information, tools, and tradecraft needed to defend their networks — and the capabilities they build — from intrusion and attack. We launched multiple Commercial Solutions Openings, CSOs, to diversify the vendor base for things like uncrewed surface vessels and other ADA2 capabilities. Over 550 hardware and software companies have sent submissions to Replicator-related CSOs. Some don't even know they're about Replicator. We've also obligated both R&D and procurement dollars, totaling in the nine-figures already, to a range of traditional defense industry and non-traditional companies — including venture-backed start-ups, growth-stage companies, and larger DoD contractors. We've used both new and preexisting contract award vehicles. In some cases, we made competitive awards just three-to-four months after funds were appropriated — that's about 66 percent shorter than the typical DoD contracting time. We've also taken delivery of Replicator's first ADA2 systems, with more on the way. And now DIU and all three military departments are working together on a second tranche of ADA2 systems. We've been experimenting and proving out concepts of operation and employment, as part of our end-to-end capability development process, which is ongoing. That includes looking at how Replicator systems will collaborate not just with each other, but also with platforms we've had for a long time, to generate desired effects and accomplish the missions we assign them. It also includes building interoperability with broader command-and-control architectures, like the ones we've iteratively been developing and using for CJADC2. And it's one small piece of how DoD is developing operational design for employment of next-generation systems, including AI, uncrewed vehicles, and counter-uncrewed-vehicle systems. We're going beyond swapping out crewed systems with uncrewed systems — in fact, we're discovering new ways of warfare that extend America's edge as a result of these capabilities. And even that's not all, because we've also had the first units complete new equipment training with Replicator systems. And we've been operating Replicator's attritable autonomous systems in real time — in multiple regions around the world — and we're learning valuable lessons about ways to use ADA2 systems that we didn't even consider at first. For instance, the Navy is experimenting with and demonstrating their uncrewed surface vessels for missions like persistent maritime domain awareness, environmental monitoring, logistics resupply, and humanitarian assistance and disaster relief — like rescuing people who fell overboard at sea, or delivering food and supplies to otherwise inaccessible island communities in the wake of a typhoon — so you don't have to use or divert a crewed vessel to do those things. Although we have lots more work to do, we are on track to meet Replicator's original goal of "multiple thousands in multiple domains in 18-24 months" — that is, by the end of August 2025. In so doing, Replicator is demonstrating from the top and across the enterprise how to deliver all kinds of capabilities at speed and scale. And we're already looking beyond ADA2 systems to identify Replicator's second capability focus area. A question I often get asked is: how long would this take with normal DoD processes? While there's no perfect analogy for attritable autonomous systems, what we've done in under 12 months can take seven-to-ten years for similar-sized capabilities. And that should be truly mind-blowing. So how did we do it? The most telling explanation is, we took processes that usually happen in serial, one-after-another, and we're running them in parallel as much as possible. Now don't mistake this for concurrency — this isn't building fighter jets before the design is done. We know what acquisition malpractice looks like, and Replicator isn't it. Rather: Instead of waiting weeks, for instance, for a combatant command then the Joint Staff then a military department to each verify that a capability meets a validated requirement — passing a coordination memo from one office to the next — you get on a secure call together and confirm it in real-time, at the highest level if needed. Instead of starting from scratch, you leverage promising work already underway — from Army directed requirements to joint-concept-aligned capabilities going through our Rapid Defense Experimentation Reserve, or RDER initiative. And you scale what's most viable and impactful. For so long, and from a position of dominance, the defense sector has been acculturated to not put serious money down unless and until we had first fully analyzed doctrine, organization, training, materiel, leadership and education, personnel, facilities, and policy — and only after we get all those DOTMLPF-P ducks in a row would we start budgeting and engaging Congress and industry significantly. When all of that is done in serial — and then has to run the gauntlet of our multi-year program, budgeting, and appropriations processes — it can easily take five-to-ten years for most capabilities to field at scale. To go from start-to-fielding inside our two-year budget cycle is not normal. It's disruptive. But by leveraging Replicator and our other key initiatives, we are making it more normal, because delivery at speed is essential. In this generational struggle of strategic competition with the PRC, we cannot tolerate the same old mindsets. The Pentagon may be made of Indiana limestone, but our processes were not meant to be calcified for all eternity, nor stuck in concrete blocks. I started working at DoD more than 30 years ago, and I've heard plenty of salty language, but to this day, the most profane and damaging seven words I hear in the Pentagon are, "this is how we've always done it." That is simply unacceptable today. We are innovating at the speed of technology development by necessity. It's a pace that may make some uncomfortable, but it's required to keep up with technology, to deliver for the warfighter at scale, and to continue outpacing our competitors. We are blessed with so much talent in this country. Leaders need to show their people that new ways of doing things are possible, and that's what we're doing. While culture change takes more than a year to solidify and spread systematically, already we've seen Replicator change behavior throughout the defense community. In the services: you will see ADA2 systems embedded in regular order in the next budget. The Army has accelerated its move toward a formal program of record. The Navy is developing a standardized CSO process for uncrewed systems that can do all sorts of missions. And the Air Force is building its own program of record out of a CSO collaboration it did with DIU. In the private sector: we've seen manufacturing — manufacturers, excuse me — planning to double or triple production capacity. Some already have, recognizing our demand signals. They're making advance orders for long-lead items, even before contracts are finalized, to ensure they'll meet delivery timelines — because they know it's a leadership priority. With allies and partners: we've seen democracies the world over independently buying ADA2 systems like Switchblade. Other like-minded allies and partners have separately inquired about co-producing systems being accelerated by Replicator. And with private capital: we've seen venture-backed companies that build attritable autonomy tech raise early-stage funding rounds that look more like growth rounds. And increasing corporate venture efforts from traditional defense contractors reflect how they too see the imperative to innovate and collaborate with the new kids on the block. When we launched Replicator, a common refrain I heard was, "Can it work?" These days I'm more likely to hear, "Will it stick?" I'll just say this: when officials from both this administration and the prior administration are separately writing in Foreign Affairs about ideas to "complement" Replicator, as they did this spring — and when the bipartisan Commission on the National Defense Strategy "applauds" our work on Replicator, as they did last week — it's clear we've built something to last. At the end of the day, all of our efforts are conditioning DoD — and Congress, and increasingly the private sector — for the battlespace of the future, and the pace of change necessary to succeed. And it's all in support of joint force design, linked to joint concepts, optimized for agility in the changing character of warfare. And because DoD can innovate at this new speed and remain in the lead, it means we can continually set and shape the direction of future warfare, as we've done in past generations. If we can move at this speed and scale now — do this much in under a year — imagine how much faster we could move next year, and the year after, let alone what our speed will be if we're ever called to fight. *** Now, we couldn't do this without Congress. We're grateful for their bipartisan, bicameral support, across both authorizers and appropriators. That is no small feat. We do not take it for granted. But if this country is going to transform its defense at the speed and scale we need, Congressional trust will need to substantially expand. Take Replicator: we've done nearly 40 Hill briefings since last October, averaging about one a week. On an initiative that represents 0.059 percent of DoD's budget. That depth of engagement isn't scalable for Congress across the breadth of what we're trying to accomplish. We need, for instance, just as much help from Congress in ensuring joint experimentation can enable delivery of effective capabilities to the warfighter. From Replicator's success to combatant command priorities like the Joint Fires Network, we need efforts like RDER that bring rigor to our discernment of what is and isn't ready to scale. For instance, because of RDER's successful transitions to programs of record, the Marine Corps' Family of Integrated Targeting Cells for joint fires was accelerated by five years. So we will keep burning shoe leather to build trust with Congress, from Rayburn hallways to Dirksen elevators. We know oversight is critical to our democracy. At the same time, trust is a two-way street. We know Congress shares our commitment to defense innovation — and yet major barriers to defense innovation remain. Notable among them is still the consistent lack of on-time, full-year appropriations. Since 2010, we've lost nearly five years in total to stopgap funding measures, CRs, which are themselves half-measures. Their usual restrictions rob us of critical time to stay ahead in a rapidly-changing world. This concern is shared by defense leaders and experts in both parties. More than four years ago, then-Deputy Secretary of Defense David Norquist called CRs "inefficient," "wasteful," and "good for the enemy, not the men and women of the United States military." I couldn't say it any better. In Congress, the private sector, and even in the Pentagon, we need to come together and work together around our shared recognition that we are in a generational era of strategic competition with the PRC. *** I know we have the capacity to keep increasing the speed and scale by which we deliver to the warfighter. That's what gives me optimism in our system, even as I know we're hardly perfect. And we'll keep getting better. Because of the progress we've made — again, you can see more on the Innovation Fact Sheet that we've just posted — and because of how we've been structuring change to last, I have every confidence that what we've done will be propelled onward and upward. And it's worth remembering how President Roosevelt's big bet turned out. While ramping up production to 50,000 airplanes took over two years, America still delivered beyond his wildest dreams: producing 300,000 airplanes before the end of World War II.  Of course, FDR wasn't on the job when that last airplane came off the line. He never witnessed that fullest expression of what he'd envisioned over five years earlier. It should remind us that no one does these jobs forever. Our task is to improve what we're given: to run as far and as fast as we can, until it's time to pass the baton to our successors, so they can keep propelling the work onward and upward to new heights. For today we stand at the dawn of a new golden age of defense innovation and production, and we have only just begun. Thank you.

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