Douglas R. Bush: Brief statement, then I’ll take your questions. So as many of you know, the primary--one of my primary focus areas is acquisition and speed, so speed in a responsible manner and acquisition at speed, I believe, is working. In the last fiscal year, we’ve had some great successes. We issued prototypes of the Robotic Combat Vehicles to our first unit. We awarded the future Long-Range Assault Aircraft contract, we transitioned to milestone C with mobile protected fire power, which is now recognized as a model for how fast we can go and then this coming year is going to be even bigger. So, by the end of fiscal year ‘23, we’re on track to still have 24 new systems in the hands of Soldiers through fielding or testing including significantly the long-range hypersonic weapon. We will equip our first unit with the Armored Multi-Purpose Vehicle, we will equip our first units with the new Integrated Air and Missile Defense System, we’ll award the phase 3 and 4 contract for the Optionally Manned Fighting Vehicles to up to three vendors this spring, and we’re also making significant advancements in the Army’s Tactical Network. So, there are many reasons why this success is occurring, but the chief among them, of course, is our people. So, and when I say people, I mean uniform and civilian working across the Army. In Acquisition, we have 525 Army programs right now. There are 30,000 professionals in my workforce and they do great work, but they also work with many thousand more talented professionals at Army Futures Command and Army Materiel Command to actually make all this happen. It takes the whole Army team to do it and right now I think the team is working really well. These same people, of course, are working on the second issue I’ll mention, which is Ukraine. So, we’re working around the clock to fulfill Ukraine’s Priority Security assistance needs. We will continue to deliver weapons from U.S. stocks and procure defense items directly from industry. I hope today to have an opportunity to set the record straight on the defense industry’s ability to surge in response to urgent needs. I think they are surging and I am confident, actually in our ability to do this, both in the defense industry and both as an industry government team. Before we take questions, I would like to publicly thank, as I always do, members of Congress for their continued strong support regarding Ukraine, the funding they’ve provided, and the flexibility with that funding has been vital, and also the Office of the Secretary of Defense Team lead by Dr. La Plante has provided terrific support and couldn’t be doing what I’m doing without him. So, all that said, of course context is important, so you know, today’s announcement on M-1 tanks is just the next step on support for Ukraine. The Army will of course be directly involved in working that issue and then that’s on top of our other efforts that are already announced. So, Bradleys, Strykers, M109-A6s, other things that we’re providing in addition to what we’ve been providing before, as you guys know, HIMARS, GMLRs, artillery ammunition, and artillery. So, a lot going on and I’d like to take your questions.
Moderator: Tara Copp, let’s start with you.
Tara Copp: Okay. Thanks for doing this. Because of the day, I do need to ask about Ukraine.
DB: Sure.
TC: With the Abrams announcement, do you anticipate the USAI funding will be used to retrofit existing Abrams, procure a whole new tank? I guess, what’s the fastest solution?
DB: So, we are -- the Army’s developing options that will be presented to, you know, Senior Leaders on that. So, I think there are multiple courses of action and it’s not just the tanks. So, we have to be able to deliver the tanks, the support equipment, the training, the ammunition, the fuel. You know, the total package fielding like we do with other Abrams partners. So, it’s really a big -- a bigger picture. So, I can just tell you, you know, work rapidly of course, underway now to develop those courses of action, but the Army will be presenting those to OSD for decisions.
TC: And then as a follow-up----
DB: I don’t know yet is the answer.
TC: As a follow-up on the support infrastructure, you know, Abrams consume a lot of fuel. Would that include providing Army fuel trucks or advising on how best to do a fuel logistics support?
DB: Well, whenever we field a capability like Abrams to a partner country, we also provide all of that and training on that. So, the logistics tale and this is critical -- when the United States sells things to people, you know, we provide, like I said, the total package that makes it a real military capability and Abrams of course has a significant logistics aspect to it. I assume that that will be part of what’s provided.
TC: Providing the fuel trucks will be part of it?
DB: Potentially. If what’s already available is not adequate. That's all under consideration in terms of these options we’re building. But the tanks without the fuel system behind them, of course, not very effective.
Moderator: Thank you Tara. Brian Everstine on the phone with Aviation Week.
Brian Everstine: Yes, thank you so much for doing this. I was hoping you could talk about some of your work with industry to find kind of sticking points in production. We've heard specifically NASAMs and Stingers. Can you kind of give an update on how you’re working with industry to speed up production of those systems?
DB: Sure. So, there’s really often what you find is kind of two aspects to it. One is on the contracting side, that’s a procedural thing and with support from Congress and new authorities, we got in the NDAA, that will help clear away some of those procedural -- they’re not really hurdles, they’re just steps we go through and now the hurdles are a little lower. So, you know, the public interest will be protected but we’ll be able to do it faster and that’s, you know, doing the contracting side, the money flow. The industrial side is often based on identifying in the supply chain what the long-lead items are. So, an entire missile for example might not take 18 months to produce. It might be really just one component that takes 14 of those 18 months. So, identifying those and I've mentioned in the past, advanced procurement is a tool capable of getting at long-lead parts. That’s something we’re looking at and then also with the new authority from Congress regarding multi-year procurements, that’s another way to get at accelerated production because with the guaranteed funding stream, industry can do more on their side working with their suppliers to buy parts in advance.
BE: I have to ask, since you brought it up at the top, you mentioned the FLRAA work. Can you give an update on where things stand and your confidence in the schedule as the protest continues?
DB: Well, the protest -- the schedule already accounted for a potential protest, which we now have and it’s in GAO and, you know, the Army’s confident, but you know GAO will do its job and we’ll go from there.
Moderator: Thank you Brian. Tony Capaccio.
Tony Capaccio: I came in -- I was a little late on the tanks. Are these new tanks? Are they built from scratch or is it all going to be set from Army inventories?
DB: To be determined.
TC: Seriously?
DB: Don’t know yet. We're working on multiple options.
TC: Huh. You'd think -- okay. And the Army’s Contracting Command would execute the contract, is that [in audible]
DB: This will all be done by the Army.
TC: No, no, but the Army Contracting Command will do the --?
DB: Oh, sure. They're doing all the other. So, Army Contracting were already doing all the -- so, if it’s like a formal military sales case…
TC: Yeah.
DB: We do all that contracting already for all FMS cases. This would flow the same assuming it’s funded with USAI funding.
TC: Got it.
DB: It would flow through kind of the same way we’ve been providing other things through that channel.
TC: The multi-year procurement authority, will you be using existing IDIQs or OTAs or UCAs, or how will that play out?
DB: So, in some cases -- so, this is with regards to just the new, I’d call it a little easier multi-year authority we got. We’re working on numerous cases. Some will be new contracts because the timing works out where we can do a new contract that’s a multi-year. In other cases, we’re going to be modifying existing contracts or perhaps extending the terms of existing contracts to retain current pricing. But, I think each case is going to be a little different because, you know, if you look at the different systems we’re looking at from potentially munitions to kind of a Patriot to maybe HIMARS, they’re all at different places in their acquisition cycle, so the contracting aspect will be kind of tailored in each case to shift from a one -- you know, annual, to multi-year. It's gonna require some creativity.
TC: One follow-up. You don’t have to go up to the Hill to justify that there’s like a 10 percent savings over annual or you know end of the current rules?
DB: So, over our reading, I believe -- any multi-year contract that’s over 500 million, we still also need an appropriations language.
TC: Okay.
DB: So, normally there’s two launch keys. You have to have language from both to do it. That is still the case. So, the conversations will not just be on the authorizing side, it will be on appropriations side to make sure that we demonstrate -- that we’ve done our homework, the math makes sense, but the language did give us relief from some of the normal conditions.
TC: Okay. Thank you.
Moderator: Okay, thank you. Ashley Roque from Breaking Defense.
Ashley Roque: Hi. Sorry, I was having problems with mute. I just have I guess two follow-ups. One was, I understand a laundry list of options on the M1-Abrams, but are you able to say which variant you could potentially-- you’re looking at providing them? Like, the SEPv3 or something else?
DB: I can’t.
AR: Okay. And then the other one, on the multi-year, and I’m sorry, I don’t know if it’s my computer, but it was a little off in the distance. Have you issued any of these multi-year contracts yet and do you actually have to go back and change the Army Acquisition Objective before moving forward on some of these program lines?
DB: So, we haven’t done a new multi-year using the new authorities that are in the NDAA yet. So, those plans are being worked right now. The, you know, in some cases we might have to but often the AAOs are very high and we already don’t -- we just haven’t budgeted to them, so we may or may not have to. It depends on the program and the key thing will be making sure that the multi-year math makes sense and then we get buy-in from Congress to support.
AR: Okay, great. Just one follow-up, the CSIS report that just came out, and talking to industry too, there’s a lot of concern about these -- you know, there’s rockets or motors that don’t have second sources. Are you -- is the Army doing anything to address some of these secondary issues that go along? Whether it’s the supply chain, the second vendors, etcetera?
DB: On critical programs where we’re executing a production ramp, yes. So, for example, on programs with rocket motors, like Javelin or GMLRs, you know, all options are on the table and second sources are definitely a way to ensure production and ensure supply. That's a tool, it’s not the only tool. But and often it makes sense to do it but of course having two suppliers sometimes is less efficient than having just one, but it has other benefits such as redundancy and, you know, back-up in case something goes wrong at one of the production facilities. So, yeah, we’re looking at that option and already moving out actually in some cases.
Moderator: Thank you. Haley Britzky, CNN.
Haley Britzky: Thank you for doing this. I’m wondering if we -- if you can kind of put into context when we talk about like the spin up of industry in order to provide all of these things, I think the New York Times had something that said this was the biggest increase or demand that we’ve seen since the Korean War. What, in context of history, how big has this been?
DB: So, not being a serious historian of this, I want to be careful with making grand pronouncements, but I believe on the conventional ammunition side, so I’m just talking about kind of the artillery production side, I believe it’s -- the production ramp we’re undergoing, in terms of how fast we’re trying to do it, is probably the fastest since Korea, but I'd have to check, you know, there’s Army historians out there who might be shaking their head at me right now. But, I can tell you as long as anyone around here can remember, it’s the fastest ramp up. Because in previous conflicts we’ve had, for our conflicts, we’ve had the supplies we needed at the start of the conflict, so the ramp up urgency was a little different. In this case, we’re ramping up to supply an ally and replenish ourselves and supply others. So, it’s definitely from where the conventional ammo industrial base has been, it is definitely, you know, dramatic, is the appropriate word if you look at the scale in the pace we’re after.
HB: And then on this CSIS report, which is probably what Ashley was just asking about, saying that, you know, if the US were to go into a -- you know, start a war with China or enter into a war with China, there would not be enough in the US stockpile for that conflict. Can you kind of talk about that as far as where we stand on that, how long that will take to replenish? Those kinds of things.
DB: So, there’s a couple parts to that. First of all, determining how much is needed is not the Army’s job; that’s the Joint Staff and Combatant Commander’s and OSD Policy. They determine the requirements that we build to. So, you know, what I would call war reserve requirements for potential conflicts, they set those and we build to them. So, I think do we have enough is really a question for them, not me. My end of it is just making sure we have production capacity to meet that. So, I think there are good conversations going on and they’re always going on about what those war reserve levels should be depending on different assumptions about the conflict, a critical one often being how long you think it will last. But, that’s a judgment call that has to be made in terms of planning. What I have seen from this ramp-up is I do believe we are capable of ramping up quickly because we’re doing it right now and I believe that American industry can and would respond. So, I'm more optimistic I guess than that report’s conclusions. But, that doesn’t mean it’s easy. So, I think there are really important policy questions to think through regarding how big the war reserves need to be, how much planning we do for mobilization in advance, and how much resources we’re willing to put against this need, having for example large stocks of munitions versus other needs. There are many other needs in a China scenario for example, that cannot be overlooked, you know. Numbers of ships and planes, of course, and the Army units matter too. So, it’s always a trade-off between ammunition stocks, if you only look at war through one lens, it doesn’t give you the whole picture. But, it’s an important discussion.
Moderator: Matt Beinart, Defense Daily.
Matt Beinart: Great, thank you. I wanted to ask about last week, General McConville had some remarks where he said he would like to see the Army focus on replenishing of equipment sent to Ukraine with up-graded capabilities rather than, in his words “new old stuff” and he cited an example of giving M113s and replenishing those with, say AMPVs, you know, kind of in the near term. So, what is the feasibility of implementing this priority of new up-graded equipment over new old stuff and how is it maybe reshaping some modernization timelines with specific efforts? Thank you.
DB: Sure, so in general, what the Chief was describing is what Congress has allowed us to do with the funding from the start, which is great. Which is if we send an older piece of equipment sometimes it’s not even in production anymore, we are allowed to replace that with a newer one that is in production. So, in certain cases, so for example AMPV, the fact that we’re sending 113s and we’re replacing with AMPV has led to, if you look at the replenishment dollar flow, you know, a significant increase in available AMPV funding in FY’23. We're gonna put that to good use. I think it’ll help accelerate, I hope, some goals in terms of just getting that thing fielding -- getting that thing fielded more quickly. But, so yeah, what the Chief described is what we’re doing and it is, so far, Congress has been very supportive of that approach. There are a few other areas where that might take place. For example, if we send older night vision devices, we can buy newer ones. If we send older versions of artillery shells, we can buy current production new ones. So, there are quite a few examples of that and Congress has been very understanding so far on approving those.
MB: And then just as a quick follow-up, what we kinda saw, you know, beginning in the fall and then into late fall, a kind of regular flow seeing these announcements of the replenishment contracts. Do you expect a ramp-up of that in the near term to kind of start back-filling things that you can do more immediately? What's the kind of tempo we should expect on that?
DB: Sure, so overall we are -- we remain well ahead of standard DoD timelines on getting funding obligated in terms of replenishment funds and we track it that way. We track ourselves against kind of the normal templates and we’re well ahead. So, I think there are going to be several big awards coming in February and March that will just move us further down that path. You know, we receive replenishment funding in so-called tranches. There have been nine of them. You know that funding is already in Army accounts and we’re putting it on contract now. So, I think there will be -- there was -- we did a lot in the fall and then now that we got the additional funding flow coming from the Ukraine supplemental, I do anticipate a bunch of large awards in February and March.
Moderator: Jen Judson, Defense News.
Jen Judson: Hi, yes, thank you Mr. Bush for doing this. I wanted to follow up on the Abrams tank heading to Ukraine and I know you said obviously you’re looking at developing a variety of options or multiple courses, but how long are you, you know, what is sort of the benchmark goal to try to get these over to Ukraine? Do you have a timeline you’re working towards to get them there?
DB: I don’t yet. That will be determined by Senior Leaders and the Army will make whatever they want happen, happen. But, the exact details of the timelines, as you can imagine, this is dynamic. I don’t have those today.
JJ: Okay. And just to kind of ask a more broad question. We talked a little bit about multi-years as a mechanism here, but with Congress, the measures that they set to ease munitions procurement in the NDAA, can you talk a little bit more broadly how you’ve maybe begun to take a advantage of those authorities? If you could provide some examples of that?
DB: Sure, so, as I answered earlier, we haven’t yet awarded one under that new authority, but quite a few are in the works. So, mostly in the munitions area, which is a place the Army hasn’t traditionally used multi-year contracts. We've usually only used them for really aircraft. But it appears that Congress is more inclined to support multi-year contracts for munitions, which is fine, and we are, yeah, definitely looking in that area for some good multi-year opportunities.
JJ: Okay.
DB: So, to be determined and like I said for ones above threshold, above 500 million, we also need Appropriations Committee explicit approval. So that’ll be part of the conversation this year.
JJ: Okay, thanks. Just a very quick follow-up to Matt’s questions about AMPV and you were talking about AMPV there and I know there’s supposed to be a full-rate production decision expected soon. Can you let us know whether to expect that soon or if that’s delayed in any way?
DB: It is soon. But, you know, the exact day hasn’t been nailed down yet, but it’s coming soon. Tied into that, of course, is the contract negotiations, which are, you know, a major part of that decision.
JJ: Sure, thanks.
Moderator: Thank you, Jen. Marcus Weisgerber from Defense One.
Marcus Weisgerber: Thank you for doing this and for continuing to do these. I wanted to ask you, you know, we’re about a year into this conflict in Ukraine. How are you starting to think about maintenance and sustainment of the billions of dollars of weapons that have been transferred?
DB: Yes, so early in the conflict, kind of divided working this issue with Gen. Ed Daly and Army Materiel Command and the Army’s, of course, senior logistician. He has led the effort on providing sustainment and maintenance support for the equipment going to Ukraine and he and their whole command have moved mountains and are making, frankly, miracles happen. So, I’m encouraged by what we’ve done so far. As we send more additional advanced equipment, like Strykers, like Bradleys, like tanks, of course, that sustainment activity will have to, you know, increase in its complexity and plans to do that are already under way. So, I think the challenge is recognized, I think the Army knows how to do it, it’s just we’re gonna put the systems in place to make sure we can actually sustain what we provide.
MW: All right. Thank you.
Moderator: Jeremy Bogaisky of Forbes.
Jeremy Bogaisky: Hi, thanks. I wanted to ask about raising production of 155 millimeter artillery munitions. Last -- late last year, there were a couple of contracts given out to [inaudible] and General Dynamics to increase production of shell bodies, metal parts. I was wondering is it the shell bodies particularly that are a bottleneck in raising production of those munitions? Or is it also the explosives and the fuses? Is that particular shortage area that’s holding things up, or is it, you know, everything needs to be boosted in production?
DB: Well, it’s really all of the above. So, I mean, the parts that come together to form a fully usable artillery shell include the metal part, which is the shell itself. We have to have the explosive fill to go in it. We have to have the charges that shoot the shell, so that’s a different production line, and then you have to have a fuse. So, it’s really all of the above. I think, but the -- what will take us the longest to ramp up is the metal parts production. So, we started there. Those are what the initial ramp-up contracts have been focused on and there’s a lot to that. It is actually pretty complicated manufacturing because the standards we’re getting. Second, right behind that, you’re gonna start seeing contract awards, if you haven’t already, for what’s referred to us load, assemble, and pack. That is filling the shell with explosives and then doing all the packaging and work to make it something we can actually, you know, ship to somebody. Right now, that activity for 155 is almost exclusively at one place, the Iowa Army Ammunition Plant. We are looking to both expand there and stave up additional capability in the private sector to supplement them. So, it’s both. We need the metal parts production ramp. We need the load, assemble, pack capability and then the ancillary parts I mentioned -- fuses, explosive fill, charges -- we’re ramping up those already. Those are easier. They can ramp up more quickly. So, all of it has to come together, you know, to actually have a capability. But it’s all under way.
JB: Also, I was wondering the [inaudible] trying to work with artillery, 155 mm artillery shell producers in other countries to raise production?
DB: Yep. Yes. So, through USAI funding, we have also and/are working with foreign partners on using their production capacity. So, it’s not all the United States. So, we are doing a dramatic ramp-up in the, you know, we are also using a lot of allies. So, team effort. We are sourcing and looking worldwide and a lot of that’s now actually flowing through. So, and that’s gonna be critical because production ramp-ups do take time and I think we are looking at various sources including foreign production to make sure Ukraine has what it needs.
Moderator: Thank you Jeremy. Next, we’re gonna go to Dan Schere, Inside Defense.
Dan Schere: Thanks for doing this. Can you talk generally just about the ways that this production ramp-up is gonna impact how you put together the FY ‘24 budget, just in terms of weapons procurement?
DB: So, I can’t provide details on ‘24, ‘cause it’s not finished, but, you know, of course, the ‘24 budget was developed with Ukraine as context for that. So, you know, I think it’s a little bit of a bounce over. We're getting funding through Ukraine supplementals for a lot of these munitions lines, which means the FY ‘24 President’s budget number may not have to be as big as you might think because we’ve already got the funding in ‘23. But we’re looking at the whole picture. So, when you stretch it out over multiple years, what does it need to be? I think the near term, so really ‘24, a lot of that increased demand is already provided money-wise right now. I think the real issue will be the ‘25-’29 POM. So, that’s the budget we’ll start working on this year where the longer term look of how big these production lines need to stay to maintain capacity, that’s where that debate’s gonna take place. And it’s not just us, it’s you know, everyone with advanced munitions who are looking at this too.
DS: I also wanted to follow up on the 155 and then I had seen in the New York Times the other day that there’s supposed to be another domestic plant that’s gonna, I guess, happen soon. Do you have a timeline or details?
DB: So, several things under way. So, you know, on metal parts for example, the shell bodies themselves, they’re currently made in two places. They're near each other. One is Scranton Army Ammunition Plant and the other one is a private facility right down the --right down the highway. We're looking at standing up another one in the United States in Texas. We've already also -- that’s already on contract. We're also on contract for a support from Canada for them to stand up to retool a facility so they can make that too. So, that would give us potentially four locations where this is being done. On load, assemble, and pack, like I mentioned, Iowa’s right where that work is right now, we are looking at and very close to or already made contract awards to stand up additional capability in Arkansas and also potentially Iowa and potential also Kansas. So, we’re really looking at the whole industrial base. Those contract awards aren’t final yet, so we’ll see. But I think we’re gonna go from having kind of one set of, you know, one kind of production chain to having several all working at the same time. [Crosstalk] Sorry, and most of that expansion, by the way, is private sector. So, we’re doing capacity increases that are government plants but a lot of that capacity increase is going to be private sector as well.
DS: Thank you.
Moderator: Thank you. Eric Lipton, New York Times.
Eric Lipton: Yes, thanks so much for doing this. So, as the Assistant Secretary for Army Acquisition, what are kind of one or two specific lessons that you think you’ve learned from the war in Ukraine that you want to try to apply moving forward? You know, a couple of kind of narrow examples that come to mind to you?
DB: So, I would defer to my military colleagues on kind of the military lessons learned in terms of what capabilities--
EL: Yeah, I meant acquisition-wise, not actually military, but acquisition-wise. That's what I meant, sorry.
DB: Sure. So, one is a reminder that we can go fast when we have to. So, we took a lot of lessons from our COVID response and we’ve used them here. The key to that is, you know, sustained support from Congress who provides funding for everything and also sustained support in the Department for getting the kind of waivers we need and the kind of permissions and the Ukraine response has featured both. So, you need all the pieces aligned to make sure that we can do that, but we can. That said, it’s important to always learn. So, I think as we think through the long-term and if there’s a policy decision to retain more production capacity for munitions both conventional and precision, there’s gonna be a lot of work that needs to be done. OSD will need to lead it. I believe they will. In terms of looking across the whole industrial base and the different conflicts we might be faced with and how do we prepare to mobilize rather than just assuming industry can do it with a bunch of money, there’s a government side to that too and we have to work together. So, I think one of my lessons learned is we need to think through mobilization planning in a more formal way so that we’re ready to do it. Now, look, we’re doing it right now and the American industry is responding brilliantly I think. You know, we have the creativity, the knowledge in this country about how to make things and make things quickly. But, you know, there’s a planning aspect that the government needs to do that I think would be the other lesson right now. And that’s --we’re capturing those lessons. I think there’s gonna need to be some good work done across the department on that.
EL: And just related to that, kind of following up, is that one of the things that seems apparent is just that it’s not the contractors themselves, but it’s their supply chains and their subcontractors and it seems like that’s the biggest thing that they have been encountering in terms of barriers is that all of the subs and their focus on “just in time.” Is that something that could -- that you think is kind of a lesson learning is to think through more about the full supply chain to ramp up.
DB: Well, our industry partners, of course, they live and breathe the supply chain every day. So, they already know that. I think prior to the conflict, the Army and other services are already doing a lot of good work on seeing our supply chains better, you know, in more depth. Not just counting on industry to do that for us. And I think, you know, this conflict now and this ramp-up, you know, adds to that case that the government needs visibility of these supply chains as well so we know where the weak points are. All that said, I think what we’re finding is across a 25 trillion-dollar economy, we can find people to make things. We just have to have the money. People have to write the authorities and we just need the urgency to make that happen.
Moderator: Thank you. Lee Hudson, Politico.
Lee Hudson: Hi, thanks for doing this. Today in General Dynamics in an earnings call, the CEO said that for the past three to five months, they’ve been working on a plan with the Army to increase production of ammunition and projectiles. I was just wondering if you could give examples of that and like when you think that can be achieved?
DB: Yeah, so a part of General Dynamics -- General Dynamics OTS is who -- is the company that operates Scranton Army Ammunition Plant for us. It's a GOCO (government-owned, contractor-operated facility) and they also run the facility down the street. I hope I don’t mispronounce it. Somebody from Pennsylvania, please don’t hit me -- in Wilkes Barre. So, GD already runs those two facilities. So, I think that’s probably what they’re referring to, both ramp-ups at those facilities and then I mentioned the Garland -- it’s in Garland, Texas -- additional capacity expansion contract that’s been awarded there. So, I think that’s what they were referring to, Lee.
LH: Okay. Thank you.
Moderator: Flavia Camargos, Shephard Media.
Flavia Camargos: Yeah, thanks for taking my question. I want to follow up on the Abrams as well. I know you don’t have details to provide, but I was wondering from the logistics perspective, I think it would be much easier to send Abrams that are already in Europe, and I wondered if these platforms are now part of the inventory of European Command or if these tanks will be shipped straight from US to Ukraine?
DB: So, again, I can’t get into details about the different options we’re looking at. But, of course, the U.S. Army tanks in Europe are operated by the U.S. Army. So, those tanks are ours. I think -- and they’re vitally important to providing deterrence and assuring allies, that’s why they’re there. So, I think there are multiple options being looked at, but we’re not yet ready to go into any details.
FC: Okay. Just a quick follow-up on the arms stockpiles as well. In terms of timeline, I mean, when will the Army have its stockpiles 100 percent refilled? Is it possible to answer this?
DB: So, I mean, I can’t give you an exact date. I think -- and also by the way, the requirements we build to, the war reserves, those change year-to-year based on, you know, different planning assumptions. A lot of it depends on how long the conflict goes in Ukraine and how much we draw down from U.S. Army stocks. That'll determine to a large degree how long it takes us to build back. To mitigate that risk of that being too long, that’s why we’re expanding on such a high production rate ramp. So, that buys us, we hope, time to make sure we can replenish more quickly because replenishing is not just replenishing ourselves. My assumption is we will also be helping replenish our allies. So -- and also other services -- the Marine Corps for example has provided a lot of artillery and ammunition. They'll have needs as well. So, we’re kind of looking at the big picture and assuming that we’re gonna need that capacity for a sustained period of time. But, increasing the capacity will allow us to replenish faster. That's been how we made the argument to Congress and so far we’ve gotten great support for it.
FC: Okay, just a quick follow-up on the FY 2024. I'm wondering if the war in Ukraine has impacted the requirements of the current or future programs. For example, the OMFV, I mean, initially it didn’t have the requirement for counter UAS and I’m wondering if it would change if you guys revisit the requirements of some programs in the FY 2024?
DB: So, I would say that relooking requirements is not really tied to the budget cycles, and it happens all the time and it’s happening now. So, I would encourage you to talk to General Rainey of Army Futures Command and some of his folks on the requirements side about lessons learned from Ukraine and how they’re planning to incorporate into, those requirements into our new programs. But I can tell you that is ongoing, and I think you’d expect us to make adjustments based on what we’re seeing on the battlefield. But we have a way to do that and one good thing about the new authorities we’re using in some cases, for example, rapid prototyping. We have the ability to adjust requirements while we’re developing. Whereas before, we kind of had to set them in stone before. This is going to be an example of why that’s important because if we’re halfway through a program and we learn something really important from a foreign conflict, we have to have a way to incorporate that sooner rather than later.
Moderator: Thank you. Dan Parson, The War Zone. Dan are you on?
Dan Parson: Yes, hi. Excuse me. So, a year in, what is the Army learning about its own ability to project, you know, large scale combat operations on another continent now that we’re supplying the Ukrainians, you know, in their effort?
DB: Well, speaking broadly in terms of just America’s ability -- the American Army’s ability to project power, I think people are seeing that we’re the best in the world at this. I don’t think there’s another Army that could possibly even come close. Only we can do this. So, it’s kind of one of the U.S. Army’s superpowers, is its logistics capacity and I think this war is taking full advantage of all -- supporting this conflict is taking full advantage of what we know how to do. So, I was just recently in Germany. I was talking to some folks doing training for Ukraine Soldiers. Two weeks ago, they were doing something else on a gunnery range in Poland. They are now training Soldiers on Bradleys. I’m a little biased, but I think only the US Army can do that at scale in this day and age. And same on the logistics side. I mentioned General Daly’s team. You can imagine the challenges of supporting, not just supporting Ukraine equipment, but we have sent a lot more to Europe and it’s there right now, that also has to be supported. So, those two things together, I mentioned moving mountains and working miracles, it’s happening and it’s Army Materiel Command and working with a lot of folks across DoD. It's pretty cool to see.
DP: Right and so on the training front, can you expand a little bit? You know, these systems that are going over there, at this point, we’re talking about exquisite systems, Patriot, Abrams, they require a lot of training. Just the timelines for readying the Ukrainians to receive and operate these systems?
DB: Sure. So, what we’ve found we can do so far, just speaking and passing on what I’m hearing from others is we can often abbreviate and accelerate what we can do in terms of training for the Ukrainian Army Soldiers just based on their existing knowledge and capabilities. We've already been able to do that on several systems. So, you know, with enough motivation and dedicated 24/7 access to them, we can train people really quickly. The US Army knows how to do that and we’re doing that right now. And, in some cases, you know, what we would consider a full training program, maybe 60 percent of that might be the critical stuff that they really need to go into combat, and they are choosing to work with us on, you know, shortening some of those training timelines. The Ukrainians are full partners in those discussions.
Moderator: Thank you. Doug Cameron, Wall Street Journal.
Doug Cameron: Oh good. I’ve got a couple Mr. Bush. A few contractors have mentioned that they’ve presented a variety of scenarios to the Army with regard to what we can do with production rates and how much it would cost and how long it would take. Aside from HIMARS and Javelins, are there any other concrete examples where you said, “OK go get it? Go do it?”
DB: So, the biggest production ramp-ups quantitatively I believe would be, for the Army, HIMARS launchers, Javelin missiles, GMLRS rockets, 155 artillery. Those are the ones I would call kind of the big four right now in terms of us doing -- and Stinger missiles, to a lesser degree, but Stinger also because it started at such a low level. So those are kind of my big five.
DC: And, as follow-up, is this the, you know, you say industry has done brilliantly, but you know these are the same executives who swore blind they had their arms around the supply chain, they knew what was going on and that was apparently true until the rubber hit the road and what you hear now is, well the supply chain can’t do it, so it’s gonna take two more years to double Javelin production. So, how much confidence do you have in these scenarios the industry provided you in their ability to deliver on them given they kind of dropped the ball in the past?
DB: Well, those characterizations are yours, not mine.
DC: Well, you called them brilliantly, so I’m just asking what they’ve done brilliantly. I’ll put it that way. I’ll keep it simple.
DB: Sure. So, part of that -- there’s two parts of that answer. So, you’re speaking of the corporate executives. When I think brilliantly, I’m thinking of the workers. So, believe me, I’ve visited these places. The workers who actually do the work are the ones working extra shifts, you know, doing more with less, finding ways to go faster. So, I think of the workforce, I think is terrific and it’s been great to see. Now...
DC: What about the executives? What have they done?
DB: Well, I think, and actually I don’t have complaints. Of course, there’s always a natural tension between the government and industry that, of course, is trying to make money and that’s okay and the government and its needs. But I think by and large, once we get in the room with them, we work through these problems in a cooperative way. I think everybody’s running in the same direction. You know, businesspeople have to work in a, you know, competitive economic environment. I am sympathetic to the different demands they have on them in terms of running their companies and making a profit while also meeting the government’s demands. But I think by and large, if you zoom it up a level, I think actually industry has responded quite well. Sure, on occasion, of course, there are always gonna be rough spots and they exist now, but we’re working through them, and I think people are -- everybody’s got the right mindset now.
DC: Thanks very much.
DB: Doesn’t mean it’s all perfect.
Moderator: Corey Dickstein, Stripes. Corey, are you on?
Corey Dickstein: Sorry. I had mute issues also. I want to and you just did again, talk about how confident you are in the ramp-up capabilities within industry, but I do wonder, is there a turning point in your confidence at some point if this thing, if the war continues to drag on or where they need, you know, more and more and more, 155 shells for example. Is there a point where you could potentially lose confidence in our -- in the industry’s ability to keep up with demand?
DB: Well, okay, there’s zero chance I lose confidence in America. We can do this. We have all the knowledge we need, it’s just a question of making it happen. So, no, really not. I think time is the factor. So, you know, the production ramps are happening. Everybody wants them to happen more quickly, so do I. We are working every day to make sure, to try to do what we can to make it happen faster. But I think when you put enough money on contract, an industry works its magic, working with the government and the American workers do what American workers do. I am completely confident that we’re going to do this.
CD: Thank you. I appreciate that.
Moderator: Roxana Tiron, Bloomberg.
Roxana Tiron: Thank you so much. I actually don’t have any questions. Most of my questions have been answered already. Thank you so much though for doing this.
Moderator: Thank you Roxana. Meredith Roaten, National Defense.
Meredith Roaten: Hi, I just wanted to do a point -- quick clarification on one point. I know you said you’re considering a lot of options, but has the decision on which variant for the Abrams tank been made already?
DB: No.
MR: Okay. And...
DB: That’s part of the option considerations that senior leaders will have to consider.
MR: Well, in that, could you talk a little bit about how much maintenance and sustainment will play in that -- choosing that variant and how much variation there is in maintenance and sustainment between the options?
DB: There’s not a great deal of difference in terms of the logistics aspects of maintaining, you know, an Abrams tank battalion in this case, the 31 tanks, between the variants. Same engine, for example. A lot of the parts are the same. A lot of the differences are with the turret and the electronics. So, the lion’s share of logistics burden is more on the automotive side, which is consistent across the different types.
MR: So, maintenance and sustainment is, it won’t be that much different between...
DB: No.
Tara Copp: Just want to follow-up, since we’re -- when you described the whole, just how involved the Army is now with getting the 155 from -- the shell casings, ramping up all these different, you get a real sense of urgency and I’m just -- two questions. How concerned are you about the stockpiles and then secondly, has this conflict really changed your thinking, changed other’s thinking on what more reserve levels should be?
DB: So, the second part there, you know, like I said, I don’t decide those, but I think the system is learning from watching and the Army is closely observing usage rates in this type of conflict. But there is, and I think you’ve heard the Chief of Staff talk about it, it’s like the way the Ukrainians are fighting is different than how we normally fight. For example, we would use a lot more air power because we have it, a vast amount of it. So, when I look at our artillery stockpiles, for example, you know, if those are lower than they were at the start of the conflict, in my mind that is somewhat mitigated by all this capacity we would have in a conflict with regard to our Air Force and the Navy and everybody else. So, it’s different. So, I think good conversations are taking place at the right levels about balancing those risks. What was the first part of the question? Sorry.
TC: Just the sense of urgency with all of the effort, particularly behind the 155.
DB: Yeah, so it’s, as you can tell, it is urgent. So, I think -- but for the right reasons. Because I think we are trying to get ahead of the problem. So, rather than just being -- so, over the last -- over the last summer as this started to look like it was going to continue longer, and the demands would be higher. We started thinking then about what a production ramp would require and started working with Congress in particular. So, I think without that urgency, we risk being behind at the wrong time later and the other reason for my urgency is that wars are unpredictable exercises and it’s hard to know where things will go. I would rather have more capacity, which gives us options, both us and our allies, rather than being caught short. So, there is some risk in that in that it’s a production ramp-up that you can’t guarantee you will, you know, exactly what the demand’s going to be, but I think we’ve been able to make the sale with Congress that it’s better to be wrong on the high side than wrong on the short side.
TC: Thank you.
DB: Go ahead Tony.
Tony Capaccio: A quick follow up - from a delivery standpoint, is it easier -- is it faster to set an old, an M1A1 into an M1A2 or is it faster to produce a new tank from scratch I guess in layman’s terms.
DB: So, we don’t produce any tanks from scratch anymore. So, all tanks come... Yeah, we all use current tanks, so M1s and they’re all just modified into whatever the production is, so.
TC: That’s good to know. You’re not gonna build -- the layman people are gonna say, people are gonna say, “Really, you’re gonna build?” You’re not gonna build them from pieces of armor into a new tank. You're gonna -- any option’s gonna be modifying an old tank into the configuration.
DB: But that’s how we do all Abrams production. It's all that way.
TC: You know this, but...
DB: Right, but that doesn’t mean it’s easy or fast necessarily, right? So, but -- and that’s an artifact of just we have a large stock of older M1s that we use as seed vehicles. Were we to ever run out of those, sure we would build new. But, right now, no matter which option we go, we don’t have to build completely new.
TC: That’s helpful. Thank you.
Ashley Roque: How many total M1s do you have now, like of old and new and what the...
DB: Thousands.
AR: Thousands.
DB: We built a lot of tanks in the ‘80s.
AR: I didn’t realize that they were not built...we’re talking like -- Heritage had like 2000 total, I’ve seen up to 4400.
DB: You mean -- I'll work on which numbers, hopefully we can give you what we currently have today and then what’s in, like, not excess, but what’s in storage, right? So, those are two different numbers. Let me see what I can do. Hopefully, give you a raw at least.
Moderator: I think we’re gonna lose the room here in just a second. So, thank you all for joining us. Any additional questions, you can send to Jamal Beck and myself and this concludes today’s event. Thank you so much.
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