GEOFF MORRELL (press secretary, Department of Defense): Good morning. For those of you who have not yet met me, I am Geoff Morrell, the new Pentagon press secretary, and it is an honor and a real privilege to be addressing you for the first time from this podium.

And what's more, it is an added blessing for me and for you that I am joined today by four true experts on Mine Resistant Ambush Protected vehicles or, as we call them around here, MRAPs. With me are John Young, the director of Defense Research and Engineering; Lieutenant General John Castellaw, the deputy commandant for Programs and Resources; as well as the -- Lieutenant General Stephen Speakes, who is the Army's deputy chief of staff for Programs; and lastly, Brigadier General Michael Brogan, the commander of Marine Corps Systems Command. You will be hearing from all of them shortly.

As many of you know, MRAPs are this department's highest acquisition priority, and in order to ensure that we get as many of these lifesaving vehicles to our troops in combat as quickly as we can, Secretary Gates last night asked Congress for permission to reprogram nearly $1.2 billion in our 2007 budget so that we can produce thousands more MRAPs.

Recognizing that the need for these vehicles supersedes all other programs right now, each of the services has volunteered to contribute enough funds so that, with Congress's blessing, we can purchase 2,650 additional MRAPs, bringing our total order to 6,415. What's more, the majority of those vehicles will be delivered by year's end.

Producing that many vehicles that quickly is possible only because the department has dramatically compressed the normal contracting process, worked literally around the clock to test potential vehicles, and helped industry aggressively ramp up their production capacity. In fact, the companies are now able to manufacture many more vehicles than we had originally anticipated for this fiscal year, and so we believe it is imperative to take full advantage of that new-found capacity. Our troops battling improvised explosive devices deserve the very best protection available, and right now that is an armored vehicle with a raised chassis and a V- shaped undercarriage, features that make MRAPs better able to detect -- rather to deflect blasts from roadside and deeply buried bombs.

While this design offers greatly enhanced protection from IEDs, it is by no means fail-safe. The enemy has proven itself to be agile and an evolving threat, and our defenses must continuously evolve as well. Thankfully, they are. Our training, tactics and intelligence have all improved, as evidenced lately in Al Anbar province.

But MRAPs are an essential component to force protection, and rapidly producing thousands more is an enormous undertaking, requiring cooperation among the services, industry and, of course, Congress. During his visit to the Capitol last night, Secretary Gates conveyed to the chairmen and ranking members of the House and Senate Armed Services and Appropriations Committees, just as he has to this entire department, that time is of the essence. Every month troops go without MRAPs could indeed cost lives. The secretary came away from his meeting confident that Congress recognizes the urgency of this request, and he is hopeful they will quickly approve it.

I would now like to call upon John Young, who, as chairman of the department's MRAP task force, is in charge of this urgent effort to produce and manufacture and deploy as many of these MRAPs as possible. Mr. Young?

MR. YOUNG: Geoff, thank you very much for starting the discussion. And I want to amplify on several of the key points that Geoff made to you. Again, I'm John Young. I'm the director of Defense Research and Engineering for the Defense Department.

I was directed by Secretary Gates to form a task force for Mine Resistant Ambush Protected vehicles, known as MRAPs, on 30 May 2007. Secretary Gates' specific direction -- and I quote -- was to integrate planning, analysis and actions to accelerate over the next year the acquisition of as many MRAPs as is possible and prudent.

The MRAP task force has made great progress towards Secretary Gates' goal, and I will talk more about specific actions after I provide some background.

The task force has met five times and briefed Secretary Gates three times. The task force first looked at the availability of materials and parts to ensure accelerated production was possible. As an example, tire production capacity for MRAPs in June was estimated at a thousand tires per month. We are on an extremely fast course to building roughly 1,300 MRAPs per month in December, and the department will require 6,000 or more tires per month. Thus, a cursory look would have called into question our ability -- or the ability of the tire industry to support production of hundreds of MRAPs per month. The Army Tank and Automotive Command, The Defense Logistics Agency, The DOD Industrial Policy Office and the MRAP Joint Program Office analyzed the situation and held discussions with builders of these large, heavy load-class tires. As a result, the industry is increasing the production rate of tires, and we have worked within the government to buy those tires as fast as they can be produced.

The task force reviewed similar issues on steel, axles, engines and other components. Indeed, to ensure steel availability, the Defense Department plans to spend funds to buy armor and steel plates as part of the acceleration action I will discuss with you and the reprogramming Geoff mentioned.

In briefings with Secretary Gates, he made crystal clear that vehicles delivered sooner within this calendar year was most important to him, as these vehicles offered the potential to increase the safety of our deployed forces. Secretary Gates approved a DX rating for MRAP material in June 2007. The DX rating provides MRAP the highest priority access to components and materials if supplier capacity cannot meet the demand from all programs. The DX rating helps ensure that material availability issues will not impede MRAP production.

With key supply issues evaluated, the task force discussed with industry the potential to produce more MRAP vehicles sooner. MRAP is already the fastest-moving major program in the Defense Department. At this point, five contracts have been awarded in the last two months for competitively selected vehicles which passed MRAP testing. In virtually every case, the companies plan to dramatically increase their rates of MRAP production, which means qualifying suppliers, increasing supplier manufacturing capacity, hiring and training workers and adding manufacturing facilities. For the next six months, our industry partners will be constantly gaining production experience and increasing production rates of parts and materials and vehicles.

This is an extremely aggressive program, and the Defense Department is accepting risk here. We may encounter manufacturing issues as we accelerate. But Secretary Gates and the entire Defense Department leadership team agreed we should accept these risks in order to provide more capable vehicles to our troops as fast as possible.

Let me make an important point here. Significant numbers of MRAPs are being delivered today for two reasons. First, the MRAP Joint Program Office leaned forward and awarded limited production contracts, in some cases in advance of testing. Second, our industry partners assume success and purchase materials and establish limited production capability using their own corporate funds in many cases.

Roughly two weeks ago, I asked the senior leaders of each MRAP industry team to evaluate their respective ability to build even more vehicles during calendar year 2007, either using a design on contract or partnering with another industry team who had been awarded a contract. The senior leaders of these industry teams are now confident that they can deliver more MRAPs in 2007. The task force and the MRAP program office reviewed the industry acceleration plans and recommended an acceleration of MRAP production to Secretary Gates. Last Friday, Secretary Gates directed the Defense Department to act on this recommendation, and the key to that is this reprogramming.

Our key point to you today is we're submitting that urgent reprogramming action to the Congress to purchase additional MRAPS now, and here are the facts. The Congress has provided a total of $3.8 billion in fiscal year 2007 to purchase MRAPs. The $3.8 billion includes an add of $1.2 billion above the president's request that Congress provided to allow the department to move as absolutely fast as possible.

The Congress has clearly leaned forward to help us on this program. Through the end of June, the Defense Department used those funds to order 3,765 MRAPs. Approximately 2,400 of these MRAPs under contract as of the end of June are expected to deliver by 31 December of 2007. Yesterday, we asked the Congress to approve the reprogramming of an additional $1.2 billion into the program.

With all of the funds the Congress has provided and the reprogramming of an additional $1.2 billion into the MRAP program, the Defense Department, as Geoff said, can now purchase an additional 2,650 MRAPs, increasing our total on order to 6,415.

All of the 6,415 will deliver by March of 2008. Under this acceleration, DOD expects to receive an additional 1,500 MRAPs by 31 December, a 63 percent increase over that 2,400 I've told you about to a total of 3,900 MRAPs delivered from industry to the Defense Department by December, December 31st. The reprogramming is urgent because, as you all can see, the rates of production are ramping significantly. We believe 30 to 45 vehicles per day will slip into 2008 if we delay.

Under our MRAP acceleration plan, the rate of MRAP production will rise from June's production of 82 vehicles to 489 vehicles in October and roughly 1,300 per month in December that I mentioned to you earlier. So as you can see, it is important that we work with the Congress quickly to get these funds for the additional MRAPs and put these vehicles under contract. The use of available funds for the department and the reprogramming action will give the MRAP Joint Program Office $5.4 billion to immediately put on contract in 2007 for MRAPs. The level -- this level of funding makes MRAP the 3rd largest 2007 DOD acquisition program, only behind missile defense and Joint Strike Fighter.

Now, I'd like to add some very important background. Before the task force was created, there was already aggressive work on MRAP by a capable government team. Paul Mann and the supporting team in the MRAP Joint Program Office have done herculean work to get vendors under contract, to orchestrate testing, to negotiate production contracts and to main transparency for the Defense Department and the Congress.

MRAP, as I said, is already the fastest moving major program in the Defense Department, and the program is not being handled in a business-as-usual fashion. The MRAP Program Office and industry are moving extremely quickly to buy vehicles as fast as we can check only the key boxes: testing against improvised explosive devices or IEDs, road tests with soldiers and Marines, and establishment of production facilities and processes. We are not delaying manufacture of these vehicles for documentation, extended testing or test reports. This is not a business-as-usual process.

Key to this testing is the exceptional and dedicated work done by Colonel Rooney and the team at the Army's Aberdeen Proving Ground.

This team has worked almost constantly for the last six months to test and evaluate MRAP vehicles.

Finally, a number of government facilities are supporting the MRAP program, including the Space and Naval Warfare Systems Center in Charleston, which is installing the government-furnished equipment, such as jammers and radios.

This combination of a strong Joint Program Office, a dedicated test team, supporting government teams, and industry partners who took risks on their own, has resulted in the success of this program and the potential to provide more capable, safer vehicles to our deployed soldiers and Marines. Additionally, the leadership of the Army and Marine Corps have worked with tremendous collaboration. In one recent task force meeting, the respective service leaders agreed to purchase common items for their MRAPs, reducing the complication of having completely service-unique items installed on different MRAPs.

I have seen tremendous coordination, collaboration and cooperation, all in an effort to achieve the goal this team shares with Secretary Gates -- urgent delivery of the maximum number of MRAPs to put this capability in the hands of our forces.

Work will continue on improving the current MRAP vehicles and components to ensure we can provide the best possible equipment to our forces in harm's way. The current MRAP designs we are buying are not a panacea. The threat will adapt and adjust. And the Army and Marine Corps team will work to anticipate these steps and develop responses. The fact that increasing quantities of vehicles are being delivered today is a result of the tremendous work of the MRAP Joint Program Office and industry and support from Congress. The reprogramming is the critical next step for this program and for the department's urgent efforts to get MRAP vehicles into the field.

I will begin to take your questions. Geoff was kind enough to introduce my colleagues that work on the task force, so if I can, I'll ask them to join me at this stage, and then we'll take your questions.

As they join me, these officers, as you know, have led their respective service teams and worked closely with the Navy and Marine Corps acquisition team, led by Assistant Secretary Delores Etter, to drive progress on the MRAP program. They will be important participants with me in answering your questions.

MR. MORRELL: Tony.

Q This urgent requirement -- pushing out as quickly as possible -- the Pentagon IG [Inspector General], a couple of weeks ago, had a report that indicated -- that showed how force protection over the last couple of years, under the same urgent requirement situation, had delivery problems and manufacturing problems that weren't properly vetted before they received these contracts.

What steps, in light of the IG report, are you taking to ensure these bottlenecks occur?

MR. YOUNG: You want to let Colonel (sic) Brogan answer.

GEN. BROGAN: Tony, let me talk about the recommendations specifically that were in that IG report. The first of those recommendations, which the commandant of the Marine Corps agreed with --

MR. YOUNG: General Brogan. Sorry, I just demoted you. General Brogan.

GEN. BROGAN: I worked for him in a prior life, as well.

It had to do with to calculate damages with respect to those late deliveries. And there are a number of remedies available to us. We have, in fact, imposed some of those. We received some pre-vehicles. We've received some field service support representative work. We received some technical writers to help us with the manuals.

The next one had to do with competitive contracting. As you know, our strategy for the current large number of MRAPs includes two prongs to our acquisition strategy. The first was a sole-source contract back to FTI because they had a hot production line. We wanted to take advantage of that. But the bulk of the procurement has been this competitively awarded effort that resulted in the nine contracts that we issued on the 26th of January.

The third had to do with -- our first contracts used commercial contracting practices rather than Defense contracting practices, so Federal Acquisition Regulation Part 12 versus Part 15. At the time, we looked at these vehicles as commercial off-the-shelf. They were offered for sale to nongovernmental organizations, to companies that did mine clearing. And so we thought at the time that a commercial contract was a viable vehicle to use. Since we've begun to ask them to do other things with these vehicles, like make accommodations for radios and jammers, turrets, things that truly are military in nature, we've shifted to the military FAR Part 15, Federal Acquisition Regulation Part 15, contract.

And then the last one had to do with we should put a clause in all the contracts for liquidated damages. And that certainly is one of the remedies available to us, but that limits us, then, to monetary damages. We would prefer to have that broader range of options available to us that includes services or material. And so while we consider using a liquidated damage clause, we're probably going to continue to use the broader remedies.

Q Just one quick follow-up. Have you done a survey -- has DCMA [Defense Contract Management Agency] done surveys of all the companies to make sure that they can accommodate this accelerated schedule?

GEN. BROGAN: They have. As part of our effort when we awarded those first nine contracts in January and then began to determine who we could perhaps go at risk, as Secretary Young said, and give low- rate initial production contracts to, even before testing the Defense Contract Management Agency conducted a fairly comprehensive industrial capabilities assessment. Now, our Joint Program Office had done a limited one as part of source selection, and they took out work and built on it and expanded it to help us identify where those bottlenecks would be in components and in materials and things like that.

And we continue to build on that, has resulted in the entire efforts that the secretary mentioned.

So that's not to suggest that there won't be any bottlenecks in this. As each one of these vendors gears up has production line, there will probably be some challenges. But we're confident that we can help them overcome them.

Q Ma'am, why don't you go ahead, and I'll just go -- (off mike).

Q Senator Levin sent a letter of concern to Secretary Gates talking about the weight of the Frag Kit 6, I believe, to the chassis or body of the vehicle. Are you finding that you're going to have to redesign the vehicles in order to hold this heavier kit? How do you respond to Senator Levin's concerns?

MR. YOUNG: I'll start, and then I'll give each of my colleagues the chance they want.

These vehicles were -- that have been tested all specifically have significantly greater payload capacity, and i.e., we can add pounds of armor to them, thousands of pounds of armor. And we are looking at making those additions. It's part of the comment I made to you that the threat will adapt and adjust, and we have to do that. And the program office team is already looking at what adjustments we'll make to these vehicles as the threat moves on us. They were tested to a certain level of capability, but each of these vehicles have capacity to add.

Let me offer the colleagues a chance to talk.

GEN. BROGAN: In trucks, axles and tires have load ratings, and how much weight that can end up in the final product is determined by those load ratings.

As the secretary said, a number of the vehicles that we are procuring now have some significant growth capability, so that we have the ability to add additional armor to help deal with these other types of threats.

Some other ones will take some modification to their design. They may need to incorporate a different axle. But each of them has a plan going forward. That was one of our criteria for awarding them production contracts: that we had the ability either immediately to add growth to them or had a cogent path forward that would allow us to add that growth.

MR. YOUNG: Yes, sir?

Q You said these vehicles are not a panacea. Is it true that they will not stop an EFP, which is the most lethal type of roadside bomb?

MR. YOUNG: I want to say a couple things in that regard. One, we are experiencing a range of threats in theater, and I'd rather not talk about them, other than in this general way and to say that right now a small fraction of the threats are underbelly IEDs, improvised explosive devices, and an even smaller fraction are EFPs, or explosively formed projectiles.

These vehicles were tested to an initially agreed amongst theater and the Joint Staff threat level, and they provide very good capability against that threat in large part due to the v-hull and the armor they do have. We are going to continue to work to improve that.

But in terms of what they can and can't do against a threat, I really apologize and can't talk about that. We don't want to help the adversaries in any way because they will adapt and adjust to these vehicles.

Q So the Army's already saying that two soldiers some time ago riding in an MRAP, were killed by an EFP. You can't address that?

MR. YOUNG: I don't want to comment on theater incidents. It's just not -- we particularly want to talk to you about MRAPs, but we don't want to talk about the things that are working or not working for our adversaries or, frankly, for our own side.

Yes, sir.

Q Yeah, you presented a lot of numbers there. Can you tell me, by the end of this year, how many of these vehicles you project can be shipped to theater -- not delivered to the Department Defense, but shipped to theater and actually in use by the end of the year? And is there any concern that we're rushing into a program that's going to get us a huge number of extremely expensive vehicles that may or may not be of use to the next major threat? I mean, as I understand, these vehicles are a lot heavier, these vehicles have more limited use off road than the HUMVEE. Are we getting -- all this investment into a vehicle that we may take delivery of as this war's winding down. It may be of less use to the --

MR. YOUNG: That's a lot of questions.

Q Two primary questions.

MR. YOUNG: Let me answer, if I can.

I told you that 3,900 vehicles would be delivered from industry to the Defense Department by December 31st if we can move aggressively on the reprogramming with this action. It takes the government some time, and this is -- I can assure you Secretary Gates is laser focused on it to get the vehicles from the manufacturing facility to the Space and Naval Warfare Center in Charleston, where radios and jammers and other equipment are installed. We're working to reduce that time every day, and every time I meet with him, he asks me how long it's taking. And then we ship vehicles to theater.

So I'm not sure I can give you a good estimate, but it's not the full 3,900 that will be in theater by the end of the year, but it's certainly probably 3,500 or something. It gets to the installation time for the equipment and the transit time to theater.

Q (Off mike.)

MR. YOUNG: Let me turn back to -- let me try to answer your question.

So you asked me about transit time, and you asked about the size of the vehicle. Secretary Gates and the task force has challenged -- or asked both the Army and Marine Corps to think about how -- the fact that we need a certain number of MRAPs in the near term.

The Joint Staff's endorsed the requirement that says we want to buy as many as we can as fast as we can to add this protection level. And we will revisit this based on a number of issues: how successful we are in manufacturing, and you rightly raised the manufacturing issue, and General Brogan told you we're anxious about the challenges there. But we agreed, as I said, to accept risk there to get these vehicles or not miss an opportunity to get these vehicles in the hands of soldiers. We need to see how the theater uses these vehicles and then what comments they have and whether we make adjustments in terms of quantity or the type and other aspects of the vehicle.

So all these are decisions to be made. We have a Joint Staff requirement and endorsement to buy as many as we can. The secretary has asked the Army and Navy to think about the very issue you raised. And that is, what's the picture for the long term; do you foresee us in these types of operations or needing some set of these vehicles in your inventories, or is this a limited consideration for Iraq and Afghanistan? And the leadership in the Army and Marine Corps are working those issues.

Hopefully I've answered those questions. Any other comments?

Go ahead, sir.

Q (Off mike) -- are going to be shipped to Iraq or to Afghanistan? And I don't know if you can give us more details about what kind, what type of vehicles you're talking about.

MR. YOUNG: What type of vehicles you're talking about -- in terms of the MRAP specifically? Why don't I give General Brogan a chance. Do you want to list the types of vehicles we put on contract?

I can do it but I think he's --

GEN. BROGAN: That's all right.

We break the MRAPs down into three categories: Category 1, 2 and 3. Category 1 being the smallest of those -- it has -- it's used in a number of missions but it's the utility-type vehicle. The Category 2 vehicles -- slightly larger, carry a few more people, and they're used in an ambulance role, in reconnaissance roles, in patrolling, that sort of thing. And then the largest of the vehicles, the Category 3, is strictly a route clearance vehicle. It's used by explosive ordnance disposal teams as well as by route clearance teams and combat engineer formations. Each of the vehicle manufacturers that we put under contract produces Category 1 and Category 2 vehicles. The only producer of our Category 3 vehicles is FPI, and that's the Buffalo vehicle.

So does that get to what you're asking?

Q Yes, sir.

MR. MORRELL: I'm going to keep working my way down. Yes, sir.

Q You had mentioned with several different manufacturers, you were looking at some common parts. Can you talk a little bit about what sort of common parts you'll be using and talk a little bit about what the sustainment challenges are going to be with essentially different vehicles all out there at the same time, costs -- if you've looked at that issue, that kind of thing.

MR. YOUNG: I'll make a couple of introductory comments, and then I'll let General Brogan address some of the details.

The task force has started discussions on sustainment. There's a team of I believe Army and Marine Corps and other personnel going in to look at the facilities and whether our facilities in theater are adequate for maintenance. The contract awards include initial sustainment and spare parts from the companies as part of that program, and so -- and then we have a team looking and working the very issue you raise in terms of maximizing commonality. I talked to General Brogan last night about the spider chart that shows where the parts are common; I'll let him talk to you a little more about the fact that we're going to try to take advantage of that.

GEN. BROGAN: There are a number of common components among these manufacturers. They're all using the same tire. They use only two different kinds of axles. There are three engines involved; one's vertically integrated with IMG, and then there are Caterpillar and Cummins diesel engines, both of which have worldwide parts distribution networks, including outlets in theater. All of the vehicles use an Allison Transmission. So there a number of areas where we eliminate some of the bottlenecks and challenges that you allude to, but that's not to make nontrivial.

The folks down at the Red River Arsenal are working with us to help begin the cataloguing effort of the different repair parts, to assign them national stock numbers so that we can get them -- the ones that are not already -- in the federal supply system in there, and then we'll be able to adequately track those parts and move them back and forth between CONUS and theater, continental United States and theater.

We have a sustainment integrated product team. It's actually led by an Army civilian out of the Army's Tank Automotive and Armaments Command in Detroit, Michigan. They're working very closely among all the services and Special Operations Command on how we will take the initial contractor logistic support, which will be provided by the original equipment manufacturers, and then transfer that to an organic maintenance capability. We thought the fastest way to get this capability into theater was to buy up front contractor logistic support from the original equipment manufacturers. That way, it'd be a turnkey operation for the users in theater. The larger these vehicle buys become, the longer we stay in Iraq and need to maintain them, the more attractive shifting to organic maintenance becomes.

And so that's the path that we're on, and they have plans to get us to that point.

MR. YOUNG: Yes, sir? I'm just going to keep working my way around. Unless Dorrance and Bryan kick us out, we're going to try very hard to answer all your questions. We know we haven't talked to the press as much as about this, so I will get to everybody, I hope.

Q Sir, Senators Bond and Biden have expressed concerns to the secretary that as many as 700 soldiers have died, troops have died because these vehicles weren't sent to Iraq sooner. Can you respond to that? Should they have been sent sooner?

MR. YOUNG: I think I can -- do you want to take it?

Let me let the two officers talk, and then I may add to their comments.

GEN. CASTELLAW: I think that particularly with the Marine Corps, we're in a constant assessment of what the threat is, and as we assess that threat, then we look at what capabilities that we need to bring on.

If you look back, we came back into Iraq late '03, early '04. At that particular time the threat was mainly RPGs and small arms fire. As the ramp-up in IEDs occurred, then we put together what we think was a holistic reaction to it. For instance, we introduced Litening Pod Zone Harriers and Hornets, which allowed us to participate in non- traditional ISR. We developed add-on kits for the HUMVEES. We increased our capability in terms of other intelligence operations.

We continually looked at where the threat was coming from, and then, as we continued, we made a decision to go to all up-armored HUMVEES -- the M1114s. During this time also we started looking at MRAP-type vehicles for our rapid responders, the explosive ordnance people, et cetera.

And then, as we saw the ramp continue into '05 and in '06, we reviewed it and made a decision that MRAP was where we wanted to go. And we have made that decision and now in a process of rapidly fielding it.

But I've got to tell you, you know, operational requirements still trump the -- the up-armored HUMVEE will not go away. There will be operational reasons that we will want to use it in addition to the MRAP. So what this does is gives us a very important element in our operational tool bag that we'll be using along with a lot of others to ensure that our forces are protected the best they can, and also, as importantly, that they can do the job that we're asking them to do.

And we feel very comfortable that the process that we have in place allows us to keep pace with this threat.

Q Sir, if I can just follow up on that, I mean, with all due respect, you've laid out exactly how the decisions were made. But how do you respond to the criticism that that process was too methodical, it was too slow, it didn't react fast enough to what was on the ground? There are a lot of people who say: Look, it was a no-brainer that we should have been acquiring these vehicles a year ago, at least, maybe even soon than that. There were a lot of smart who advocated that. What do you say to people that said, you know, the process that you've described was -- simply took too long, was too slow, and didn't react fast enough to what the reality was on the ground?

GEN. CASTELLAW: I think if you look at the effective IED events, that they've been level, particularly constant. We have, in my view, been successful in being able to pace that.

Some discussion about General Hagee: I'll just say that General Hagee was in theater every two to three months, personally assessing the situation. The leadership in the Marine Corps that reviews what the operational situation is and what the threat is, is composed of individuals like Jim Mattis, extensive combat and operational experience; Jim Amos as well. And as we look at this, we make the decisions as we see the situation developing.

And on this particular case, we are -- we have made a decision. We're being very well supported by the secretary, and we're going to forge ahead with procuring the numbers of MRAPs that we're going to be needing.

GEN. BROGAN: I'd like to touch a little bit on the industrial base piece of that. As General Castellaw pointed out, a decision was made to go to up-armored HUMVEES, because that would deal with the side-blast IED events that were prevalent in 2005.

Additionally, that was a hot production line. It was producing approximately, in August of 2005, 550 up-armored vehicles per month -- up-armored HUMVEES.

If you fast-forward all the way to October of 2006, when we kicked off this MRAP program in earnest, we produced a grand total of 27 MRAPs in that month. Twenty-seven MRAPs a month wasn't going to get the job done for 1,169 vehicles that had been requested. That request was addressed with the up-armored HUMVEES.

As the threat migrated to underbody attacks, which now account for a disproportionate share of the casualties, the Marine Corps went all in to ship to up to the MRAP vehicle, and we've embarked on the effort that Secretary Young described for you in his opening remarks.

Q Excuse me. When was that shift to the underbody attacks that you just mentioned? Can you give us a timeline on that?

GEN. BROGAN: It was in the early part of 2006.

Q I have some more questions, but I'll wait till the wave gets back over to this side.

MR. YOUNG: Sorry. There's probably no perfect logic to this. Why don't we go --

Q Two questions. I'll keep them short. What is this doing to your airlift, and does it change your needs for strategic airlift to try and get these things to theater faster? And what you not buying because of the billions that you are diverting for the MRAP program?

MR. YOUNG: We've been assured by General Schwartz and the TRANSCOM team they can make the lift available to get the vehicles there. While we're ramping, even though we're getting 80 and expect over a couple hundred in July, the initial vehicles are going to be going by air because that is the most expeditious way to get them there. Once we begin to get significant numbers of vehicles, TRANSCOM and the team is looking at the right way and mix. In some cases, we will use surface or ship transportation to get the vehicles there. We've got to work through those details. There's another team that was formed under the task force to work on transportation and then delivery in theater and transit in company.

You had a second question.

Q What are we not buying with all the billions that we're reprogramming?

MR. YOUNG: The Comptroller's work with the services on the reprogramming and what things can be deferred, and so I'm not really prepared to address that other than to tell you what's consistent here is this is Secretary Gates' highest priority. We were willing to accept some pain -- and every dollar -- I used to say, every dollar in the Pentagon has a ZIP code on it, so some deliveries won't be made when we do this. We'll have a chance in the 2008 supplemental to go back and hopefully recover some of the things that may -- may be painful for us. But the thing we have to do right now is build MRAPs and get them in the hands of our deployed forces.

Q Is there a strategic hit for the next war or the next perceived conflict and different type of military needs?

MR. YOUNG: A strategic kit?

Q Because -- hit, because you are buying MRAPs with the expense of Strykers or something else.

MR. YOUNG: I don't -- there are no issues in that space.

Yes, ma'am.

Q Between the Army and the Marines it's estimated that something like 18,000 MRAPs are needed in Iraq. At this rate of production, when are the troops on the ground going to get the vehicles they need? And also, even -- of the 3,500 you hope to have in theater by the end of this year, how are you going to divide them between the forces?

MR. YOUNG: The Joint Staff team worked as part of the task force to identify those issues. That's another sensitive discussion that I won't talk about other than to tell you that Central Command and the Joint Staff and the theater commanders have had a very detailed discussion about the priority areas that will get the first MRAPs and which ones will get the next MRAPs. And then as you rightly said, we hope -- we should have 3,900 in hand by the end of the year and some part of that -- it's my estimate -- hopefully more than that 3,500 in theater. And if you're at a production rate of something like 1,300 vehicles per month, you can see -- we could deliver, you know, 10 (thousand), 12,000 or more vehicles in 2008.

And so that work with the theater, understanding how successful we were with manufacturing, understanding how successful the vehicles are in theater, that's all got to come together in the next few months, so we can decided what to do in 2008. Secretary Gates has committed that we will probably revise our 2008 supplemental based, you know, later this year, maybe in the September time frame, to tell the Congress what we want to do in 2008 for MRAPs.

But we're clearly on a path to get, you know, well over 10,000 and a much higher number. And the Joint Staff has endorsed buying as fast as we can and they're going to be the key element of working this final decision about what the inventory is, balanced against that discussion I had with you earlier about the Army and Marine Corps deciding how they sit in their force structure. But for now we have more than enough on our plate to build and get these to our deployed forces as fast as we can.

Q But that still means it could be a year-and-a-half before the troops on the ground have all the vehicles they need.

MR. YOUNG: I'm not prepared to say that. I mean, that gets to be a tough issue about which areas really need MRAPs. I think you heard General Castellaw say up-armored HUMVEES are very effective in many areas in-theater. They're going to continue to be used. MRAPs need to go in the priority places first.

You know, this is a delicate balancing act, and I apologize. It's hard to have this discussion with you. But I'd go back to the comment I made earlier too of -- a very small fraction of attacks are underbody, underbelly IEDs, and then an even smaller fraction are EFPs right now. That may change over time. That will lead us to make adjustments.

Some of those adjustments are tactics as well as vehicles. Because a key point of this is if we're trying to protect our soldiers and Marines at the point where they IED went off, we're late. We're going to do that, because MRAP -- and MRAPs help with that significantly, and we are making that our highest priority.

But we have a number of other efforts and significant dollars going into trying to stop that IED from ever being planted, to stop it from ever being built, to stop the people that are deciding to build and plant those IEDs. And that's where a significantly greater chance of success exists to stop all those pieces of the chain. We're going to take this step because we can't afford to lose people once the detonation goes off. But we will be far more successful if we can stop the detonation from ever occurring.

Yes, sir?

Q I'm curious, how much training is required to operate these vehicles for the crews? Will that kind of training be done in theater? And is there a risk to that?

MR. YOUNG: Actually, let me let General Brogan talk.

GEN. BROGAN: Fundamentally these are trucks -- large trucks, heavy trucks to be sure, but trucks. So all of our motor transport- trained individuals are fully capable of operating them right out of the chute. They have to do a little bit of understanding of the vehicle handling characteristics, but they're not difficult. I've driven several of the different manufacturer's offerings myself.

Initially we're using training in theater because our first priority is to get the vehicles over there into the hands of the users. At the same time, included in the overall numbers are some vehicles for home station training. We'll let the theater commander tell us when he believes we can move a portion of the vehicles that are being produced into that home station training role. But for right now, the training is being done for the troops in theater. I had it estimated for me by some combat engineer units that returned that it's not difficult for them to quickly get up on step on how to operate these vehicles.

MR. YOUNG: Yes, sir?

Q I just wanted to clarify some numbers. JROC has approved 7,774 MRAPs for all branches of the service. I believe SYSCOM has close to 5,000 ordered -- at least they put out a news release on Friday saying close to 5,000 were ordered. With this additional 2,600, does that mean you have reached or you're about to reach the number of MRAPs ordered that you are authorized?

MR. YOUNG: Let me try, and then General Brogan can add to that.

What I told you was that there were, I think, 3,765 vehicles on order through the end of June. A new contract was awarded last Friday, after the meeting with Secretary Gates, with his approval, that is part of this acceleration effort. We do need some of the funds we are moving to totally and fully fund that award. That award, along with the other vehicles we're going to award with the reprogramming, will take us to the number I told you, 6,415 under contract. So that 5,000 number is an interim number that reflects Friday's award that was recommended by the Joint Program Office and approved by Secretary Gates, and it's part of this acceleration effort.

Q Okay. So when you do reach that 7,700 figure, what happens next? Can you keep ordering MRAPs on top of that, or --

MR. YOUNG: Well, can I -- and thanks for reminding me -- the 7,774 was a previously approved step by the Joint Staff. I don't know the date of it. It was the April-May time frame.

There is a new approved Joint Staff document that clearly says they want to buy the maximum production capacity of MRAPs in the near term. And that number exceeds the 7,774, and it's the number that we're talking about between the Joint Staff and the services as to what the theater need is and how the theater need and possibly the long-term needs of the services will be integrated.

Q And the last question, for Brigadier General Brogan: You had mentioned that in early '06, the threat of IEDs from underneath became apparent. Why wasn't the -- why didn't the Marine Corps decide until late 2006 to tackle this by switching to MRAPs?

GEN. BROGAN: We'd have to go back and look at the threat data for the specifics of those dates. But that joint universal operational needs statement -- the first one for 185 vehicles, the second one for 1,000 vehicles -- were authored in theater in May and in July. The Marine Corps began acting on those in September.

So it was November, then, that I released that request for proposal and also issued that sole-source contract for 200 Category 2 vehicles to FPI.

MR. YOUNG: Jamie -- (inaudible).

Q I have just a couple things, and I came a little bit late, so if you already answered this, let me know. But what was the explanation for the decision to give Force Protection, Incorporated, a sole-source contract when, according to the DOD IG, that there were other contractors who might have been able to perform better? Did you explain what -- was that a mistake?

MR. YOUNG: General Brogan talked about that for a second. Let me let him --

Q But was that a mistake, in retrospect, or do you disagree with the DOD IG's conclusion?

GEN. BROGAN: I have some disagreement with some of their details in the report. As I said, we agree with all of their recommendations.

There was no hot production line producing MRAPs when we awarded that first sole-source contract in 2004.

The design has been around for a long time. People have accurately pointed out that South Africa used these in Rhodesia years ago. But they were a niche vehicle. In East Timor, the Australians used some vehicles called the Bushmaster. I mean, they had very limited quantities of these. There's no parking lots anywhere where we can go buy lots of MRAPs.

FPI stumbled a little bit in their start-up, clearly, and that's why some of those deliveries were late.

But that first contract was awarded in April of 2004, and it made its delivery in October.

If we go -- follow the process that I've been on right now that we embarked on in November -- and we'll eliminate some of those at- risk contracts -- we left the request for proposals on 8 November. We awarded contracts on 26 January. We began getting test articles in February. We completed the test in June, which means at the very end of June I would have been ready to place that first delivery order. And all of these vendors have either a four, five or six-month after the seat of order before they deliver. So if we add four, five or six to the end of June, I wouldn't have taken delivery of that very first vehicle until October, November or December depending on which of those nine vendors we ultimately chose. That's not as fast as April '04 to October '04.

So I don't believe it was a mistake. I think we made a good choice, and then once we had that production started -- remember that first order was for 27 vehicles, the next one was for either 160 or 169. When we had such a small quantity, it made sense to stay with the same vendor so as not to have that difficult sustainment challenge that you mentioned. We don't want to have multiple supply chains, particularly when we're using a small quantity of vehicles. Now we've accepted that risk. We'll have multiple supply chains because we have multiple vendors producing vehicles, but that's the most expeditious way for us to get these vehicles into the hands of the user.

Q Another question. I don't know if any --

MR. MORRELL: These are the last couple questions.

Q I know, but --

MR. MORRELL: (Off mike) -- he's asked and answered this one before, so let's refer to the transcript there. Last couple questions.

Q Let me just ask one other question.

MR. MORRELL: (Off mike.)

Q There was a key -- we had a general here briefing us just last week or a few weeks ago, General Rick Lynch, who's in charge of one of the sort of surge battalions, and we asked him, how many MRAPs do you have, how are they working, operating? It turns out he had none, none in the hands of the troops who are on the front line fighting surge south of Baghdad. And I don't know maybe you can't answer this, but is there anyone here who can explain why, of the limited MRAPs we have, none of them are in the areas where some of the heaviest fighting is?

GEN. SPEAKES: Let's just take this issue on. What you're talking about right now is MRAP as a program, and what General Brogan and Mr. Young have done is a very good job of explaining to you what the Department of Defense is doing to expedite this capability. And your specific question related to how we are expediting this summer to get something right away to the combat forces, what we also have is a very important capability that is resident in the Army, which is called a route clearance capability.

That's the only other element that has put an MRAP-like vehicle in the hands of soldiers. And we recognized that back in 2004, and what we've tried to do is equip a combination of engineers, and then also explosive ordnance disposal teams with MRAP vehicles, which give us the ability to operate in high-risk areas and clear routes.

So what you got to draw is the distinction between a general purpose force, which is what we're now working MRAP as a program for, from the niche capabilities and specialized forces that we've prepared and put into the Army formations over the last year and a half. So this is important because what we're doing right now is moving the forces forward -- we're moving forward jointly, we're moving forward under the secretary of Defense's initiative to put a capability across the breadth of the formation. We're out of the business of specialized capabilities and we're into equipping the general purpose force. That's what we ought to focus on, and that's what all of us are united behind the secretary of Defense and Secretary Young to do.

MR. YOUNG: Thank you, General. Let's got to the back -- the third row back here.

Q Gentlemen, I wonder if you could address the issue of how this program will be affecting resets and recap. You have huge bills there and a lot of machines that need help. You're using similar components in a lot of them, and I wonder what's the effect going to be.

MR. YOUNG: We're going to make this a priority right now. And I think we've identified sources to take the funds, and that's in the reprogramming before the Congress. The Congress communicated to the secretary yesterday that they want to be helpful to the department on the needs of the warfighter. Reset's one of those needs, so we've got to continue to put that before the Congress in 2008 and move forward with it. And I don't know how to tell it to you any different, other than the secretary definitely got a strong message from the Congress they're prepared to help with the near-term things like MRAP, and they understand there are longer-term issues like reset that will requirement investment on the part of the country.

MR. MORRELL: Okay --

Q General --

MR. MORRELL: Hey, Tony. Tony. Let's get in the back here, way back there.

Q Yeah. A couple of recent studies suggest that the IED threat, in particular the underbelly threat, could be around for years and years to come to the extent that it's affecting procurement, defense industry, and things of that sort. The commandant was quoted as saying he thinks of MRAP vehicle in a long-term post-Iraq, post- Afghanistan basis. So I've heard a bit about -- are the Marines currently looking at long-term plans for the MRAP which involve putting them in storage and using them in place, conceivably in the war on terror, such as Africa?

And then secondly, what, if any, is the Army's long-term plan for the MRAP?

GEN. CASTELLAW: Be glad to address the Marine.

Right now we're at -- 3,700 is our number. We got somewhere in the neighborhood of 200 plus over there now. We'll expect to have somewhere above a thousand by the end of this year, and that'll go to the units that are in the closest combat.

We are continually looking at what our future's going to be in terms of our ground mobility. We've got some assessments under way now. Surely MRAP will play a role in there. We're not exactly sure what it will be in the future. We know that such programs as JLTV will play a role. So as we continue to assist this, then we'll make resource and decisions and forward them to OSD.

MR. MORRELL: General Speakes?

GEN. SPEAKES: Remarkably similar to what General Castellaw just said. We recognize right now that priority is protection of soldiers and Marines in combat -- that's what MRAP is designed to do. We have some important questions that we'll have to answer: How much can we pull the Joint Light Tactical Vehicle Program forward? Can we get the combination of performance, payload and protection that all of us want in a more manageable package? None of us want a vehicle that weighs between 40,000 and 60,000 pounds. So what we'd like to do is see capability provided sooner that has more flexibility and more operational capability in a variety of spectrums as you identified.

We'll see how the next year bears out. We'll see how many MRAPs we get, and we'll see what capability we can pull forward, then the Army will make appropriate decisions.

MR. MORRELL: Let me just wrap it up with Dave.

Q Just quickly, does the acceleration of the production line drive up the per unit cost? And what is -- I know you have three different varieties here, but can you tell us what the per unit cost is, and does -- will this drive it up?

MR. YOUNG: I'm going to let General Brogan talk to you about that, but I wanted to take the chance to give some kudos to the Joint Program Office and the Systems Command Team under General Brogan. These contracts, the nine initial contracts for vehicles to be tested, and then the -- people that were -- successfully had their contracts exercised, if you would, for production, were firm fixed-price contracts. The taxpayer and the Defense Department are getting these vehicles firm fixed-price, and they come with a pricing in accordance with quantity. And because of the tremendous help of the Congress adding money in advance of us being able to say exactly how many would qualify, we have money to award significant quantities. So to be honest with you, General Brogan and the Joint Program Office Team, Paul Mann are taking advantage of quantity discounts, so the department is doing a very good job here with the taxpayers' money.

Let me let General Brogan add to that.

GEN. BROGAN: Sure. Each time we prepared a production recommendation for Secretary Etter, we took to her not only the fact that they had passed our tests and were ready to move into production, but information concerning their maximum available production capacity, what they told us they could produce in a given amount of time, and then what the price breaks were, given their proposals and the quantities.

As the secretary said, these are firm fixed-price contracts. So all those initial orders were met -- or placed against those firm fixed-price proposals.

As we look to accelerate, there are some minor instances where folks need some capital in order to facilitize for the production. So there may be some slight increases in the unit cost to account for that capital improvement, but no one -- no one -- is attempting to gouge the U.S. taxpayer. These vehicles all cost roughly the same amount for the unit price of the vehicle, and then we add on to that the cost of the government-furnished equipment, the first-year contractor logistic support, and a second option year of contractor logistic support.

Q So what are the costs?

MR. MORRELL: Thank you.

Q What are the costs?

Q Can we -- can I --

MR. MORRELL: Gentlemen, thank --

Q What are the per-unit costs that we see?

MR. MORRELL: We're going to get you exact details on each of these things at some point in the future. But let's --

Q (Off mike) -- Army?

MR. MORRELL: But let me just wrap it up twofold. We're going to provide a handout at the end. There's a lot of questions about where the reprogramming dollars are coming from. We have a handout from the Comptroller's Office that will give us a better sense of exactly where the money is coming from.

I want to just close by emphasizing that Secretary Gates's meeting ting last night with the "big eight" was described to me as very positive. He came away from it with the sense that they will continue to be, as they have been in the past, very supportive of any force protection efforts that we need to protect the men and women in the theater. And he is optimistic that they will swiftly approve this reprogramming request. And once they do, the secretary's made it clear -- and I'm sure that John Young can back me up on this -- that they're going to -- that he personally is going to be closely monitoring the production process to make sure that we indeed are producing these as fast as we possibly can and getting them to the theater as fast as we can, as well.

So thank you all for your interest in this subject. And John Young, I think, will be able to help with that a little bit afterwards.

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