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DR. CARTER:  Okay, well, thank you all for coming.  And I'm sure Cheryl has given you the ground rules and all that…You're welcome to come back with questions [on] anything I don't leave clear.  And there may be a factual matter, which I'll have to run and get you a number on and so forth.  I'm happy to do that. 

I just thought periodically -- there's not a particular occasion for doing this.  But I thought periodically I'd get together with you and run through the issues and give you an opportunity to ask questions about anything. 

I'll start with four issues that are likely to be on your minds.  But again I'll take questions on anything at all.  They are Joint Strike Fighter, the KC-X tanker, the presidential helicopter, and the effort that the secretary of Defense tasked me and the director of Operations on the Joint Staff, General Jay Paxton, to take on regarding countering IEDs in Afghanistan. 

So I'll start there, say a little something about each of those.  And then we'll just go around the table.  And everybody can ask about anything they want to. 

Let me start with JSF and tell you where I am in the process, and where the building is in the process, of reviewing the Joint Strike Fighter program for this year. 

I'm sorry about all the acronyms.  But I'll give you all the pieces that are going on.  There is a JET, which is a joint estimating team, which is the CAPE, formerly PA&E, group that does an estimate.  There is an independent manufacturing review team that we commissioned, to look at the manufacturing process on the line at Fort Worth.  There is a JAT, a joint assessment team, which I chartered to look at the engine, the performance of the Pratt & Whitney engine.  And then of course we have the budget discussions going on about -- for the FY '11 budget.  So all of this is happening simultaneously.

The -- I'll give you the status of each of those.  The JET is -- I had spent a considerable amount of time over the last couple of weeks with the JET team, hearing their briefing, understanding the analysis of -- behind the JET and the very credible work that they do.  And I'll say more about that in a moment substantively. 

The IMRT [Industry Manufacturing Review Team] has reported out.  It actually reported out a little -- a few months ago.  But again, very credible, very helpful recommendations and suggestions about how the performance of the line in Fort Worth can be improved, which they've shared with me, obviously, also with the program office and the contractor in that case.

The JAT -- I'm about to get my first briefing from the JAT this afternoon.  That's a team I sent up there to Pratt & Whitney to get on top of the issue, especially of cost growth in the Joint Strike Fighter engine. 

You know what our budget cycle is like -- (chuckles) -- so we're working on that all the time, but basically I've been spending a couple hours a day for the last two weeks reviewing the Joint Strike Fighter program with the service acquisition executives from the Air Force and the Navy -- because it is a joint program -- their military deputies, the director of CAPE [Cost Assessment and Program Evaluation], Christine Fox, and her staff, who've done the JAT analysis, those folks; the director of Operational Test and Evaluation, members of my own staff. 

And we've been slogging through every aspect, every detail of the program, the flight test program, the operation of the line, both as regards delivery of flight test aircraft and delivery of production aircraft, the software build for both the aircraft and the mission systems on the aircraft and so forth, every piece of it.

Going through it, I've tried to get everybody in the room so that I hear all different perspectives and get -- we have all the best information available, and in the last week have begun to involve Lockheed Martin, the prime contractor, including our meetings this weekend. 

We met as a government team most of the day Saturday.  And then yesterday, Sunday, the Lockheed Martin CEO and CFO and the senior leadership of this program came in and we talked about the Joint Strike -- Joint Strike Fighter program; not the way one wants to spend a Sunday -- a sunny Sunday, but necessary, and -- very productive and constructive discussion.

Once again, I need to have all the information and perspectives I can.

The JET -- I'll start with that.  The JET, so you know, methodologically looks at a program -- and of course, they do independent estimates of all of our programs, a very healthy thing -- by looking at the pieces of the program and then saying, what has been our historical experience with doing something like that?  And, as I said, they do a very credible job of that. 

The result of that is that I now have two different pictures of the Joint Strike Fighter program going forward: one which is built from the bottom up by the people executing the program, namely the joint program office and the contractor, and another one which is comparing this program to programs of the past and using other analytical techniques which are different. 

And they differ both in schedule and cost, with the JET forecasting schedule delay, schedule slip and cost increases of beyond those forecast by the program office and the contractor.

So I'm trying to dig down and understand what are the differences between these two pictures of the future.  And then obviously, to the extent possible, one would like to end up somewhere in between, so that we can improve upon what historical experience and so forth -- the other things underlying the JET forecast for the Joint Strike Fighter program.

There's another approach, which is just to take these estimates and say, well, why don't you just lay in the money and say it's going to take this much time and money.  And I think that's not responsible management to do that.  So I would like to do what we can do to manage differently, so that we get a better outcome than the JET estimate, which is their best estimate of where we will end up if we keep doing things the way we're doing them.  So we need to -- my job is to help the department think of ways that we can do things differently and end up somewhere in between the program office and the contractor estimate and the JET estimate.

So that's kind of -- that's what I'm working to do.  I can't tell you where in between that we'll end up, but we're looking for a realistic program schedule and cost.  And by bringing everybody together and getting them to look at the same set of facts, that's my best way of doing that.

And then where we see drivers of cost increase or schedule change, we want to see if we can eliminate those drivers or mitigate those drivers.  That's the management challenge.

So that's really what it's about, is trying to manage the program to the best outcome possible.  And I don't know where we'll get to, as I said here, but that's kind of a status report. 

I'll tell you something about the meetings, because I'm sure you'll ask about it, with Lockheed Martin.  These were very cordial, constructive, professional.  The leadership of Lockheed Martin is committed to the Joint Strike Fighter program.  They say that, and I believe them.  And [we had] a very constructive, very productive discussion [about] really, two things:  schedule and cost.  On schedule, I emphasized to the CEO, and he agreed, that we need a realistic plan and commitment to that plan, and, as regards cost, that we need to address the affordability issue, which is the hallmark of the Joint Strike Fighter program.  And whenever the Secretary of Defense is talking about the Joint Strike Fighter program, the principal thing he has stressed is that it -- is affordability, and therefore the need to have performance in this program. 

And so we talked about such things as how the improvement in the productivity of the line in Fort Worth that Lockheed Martin described to me could be reflected in the pricing of the production aircraft; and in the schedule discussion, the details particularly of the delivery of flight-test aircraft to flight test and the completion of the flight-test program, which constitutes the system design and development, or SDD, phase of the program.  So we talked about both schedule and a plan and commitment to plan and affordability. 

And those are very good discussions, and they'll continue on -- all this under, I should say, the Secretary of Defense's watchful eye.  And I think everybody recognizes that that eye is focused on performance; that we're entering a period in the Defense Department where we're not going to be enjoying double-digit, year-on-year growth.  I hope we continue to enjoy real growth, but we need to be disciplined and -- about how we shepherd resources.  And we need to manage programs and not just watch them or oversee them. 

So I don't know where that will come out.  By no means am I saying that everything is problematic with the Joint Strike Fighter program.  There's a lot of good things going on.  The ferry of the first STOVL [Short Take Off/Vertical Landing] aircraft to Pax River took place very recently and so forth.  So there are impressive successes out there, but still and all, we need to make sure that the success is uniform and that we know where we're headed and really disciplined about meeting our target.

[Regarding] KCX, the tanker.  The draft RFP [Request for Proposal] was issued about a month and a half ago, and in the intervening time, we have been receiving questions and comments from all comers; that is, both the potential bidders and the public and, of course Congress.  And we're carefully considering all of those comments and suggestions with an eye to issuing a final RFP just as soon as we can get through all of those questions and make sure we've done a responsible job of considering all of them.

One of the few advantages that the department obtained by going through this now -- depending upon how you count -- the third or the fourth time -- is that we do know very well what aircraft the warfighter wants, what kind of requirements there are.  And that's why the -- that's one reason why we were able to be as specific as we were in the draft RFP.  And you know that the -- when the deputy secretary and the secretary of the Air Force and I first described it, we said it is a much less subjective source-selection strategy than it was last time.  And that -- in that, we are responding to the GAO [Government Accountability Office], which felt that it was too subjective; that was the gist of their criticism. 

And so both to respond to GAO and because we have a learning curve, and so now we're able to be more specific about the -- what the warfighter's requirements are, for both those reasons, it's a crystal-clear draft RFP.  And we'll consider making changes to it on the basis of comments we receive, but we -- we're going to try to preserve the attribute of clarity in the final RFP so that it's clear to everyone next summer, when a contract is awarded, why it was awarded to the party that it was awarded to.

So that goes on.  That work goes on, and it's just a status update.

Another [one is the] presidential helicopter program that was terminated in the spring.  And we have now, working with the White House, which is the customer in this case, been working intensively in a series of meetings through the requirements, because the problem this project ran into last time was the piling on of requirements to such a degree that no helicopter could satisfy all of them simultaneously.  We can't let that happen this time.  We need to shape the requirements so the program becomes doable.  And the White House is very intent on doing that, so that's going well. 

We've looked and analyzed now.  And geez, I think we started out with 48 different -- thank you -- solutions that in different ways met different aspects of the requirements.  We've gotten that down somewhere around 17 now, and we continue to work that, and we will periodically brief that to the White House and make sure that they're comfortable that they're going to get a presidential helicopter for a lot less money than the cancelled program would have cost had it continued.

And I hope that fairly soon, sometime in the spring, we're able to be -- recommence that acquisition process around a reasonable set of requirements and a reasonable acquisition strategy.

The last thing I'll say something about is the counter-IED integrating function that the Secretary of Defense asked me and General Paxton to take on, on the way to Oshkosh a week and a half ago.  I just thought I'd say something about what we understand the intent of the secretary to be by creating this group.

A couple of things.  One is obviously his concern over IEDs in Afghanistan and becoming there like they were in Iraq, a major contributor to casualties and also a tactic with strategic -- of strategic importance.

I just want to say IEDs, I recognize, are not the only such tactic of potential strategic importance.  And there are others, and we -- we're working on other kinds of problems, like protection of forward operating bases, protection of rotary craft, rotary-wing craft and so forth in Afghanistan.  But the IEDs are front and center because of the level of casualties that they've been causing.

And the secretary would like us -- the department as a whole to quickly get up the learning curve that took a number of years in Iraq and we are still not on in Afghanistan.  And that principally means two things.  The first is to bring together all of the pieces that are already very ably working on this problem.  There is an ISR task force.  There's an MRAP task force.  There's JIEDDO [Joint Improvised Explosive Device Defeat Organization], a very capable organization, doing great work.  There are various organizations in the theater. There are components in the various military services. 

There are components in the acquisition world and so forth all doing good worth.  But the charge is, let's bring them together and make the whole greater than the sum of the parts.  That's thing one.  And thing two is to really focus on the theater.  Focus everything back here stateside.  Make sure it's being responsive to the theater. 

There's no silver bullet in the war against IED.  It's a multi-faceted approach that needs to be taken.  And there's no materiel solution.  So it's not a matter of buying things.  It's much more complicated than that.  And that's why there's General Paxton and me both involved in this. 

I've told General McChrystal that as I understand the secretary's intent, it's all about him.  And therefore I've told him that we will meet with him, talk to him on a day and time of his convenience, not our convenience. 

So if he wants us to meet with him and his people, in theater, we do this by video teleconference, at 3:00 in the morning on Wednesday, then we'll get up and do it at 3:00 in the morning on Wednesday, not make him stay up until 10:00 at night or 11:00 at night in Afghanistan.  That's not serving him. 

So that's the kind of focus on the theater that I think the secretary wants and that we need.  This is an integrating function.  This isn't creating some new bureaucracy or organization or something. 

I want to particularly say it's not taking the place of JIEDDO.  JIEDDO is a well functioning organization doing a whole lot of good stuff.  So this isn't a matter of moving chairs around. 

This is -- the secretary said it's a six-month effort.  So it's an intensive, integrative effort over a six-month period, not doing something that would make us better two years from now.  It's two months from now, four months from now, six months from now. 

That's the time horizon of this thing.  And we're under way.  Our first -- General Paxton and I -- our first period of time is just spent familiarizing ourselves and our group, which contains representatives or really the heads of all of these constituent pieces with what everybody else is doing here in Washington and also around the United States at our training centers, where troops are trained to deal with IEDs.  And then General Paxton and I will go and spend some considerable time in Afghanistan, and then we'll come back and make our first report to the secretary before Christmas.

That's a little catch-up on those things, and now we'll just go around the table and take a question from everybody.

QUESTION: Great.  All right.  Dr. Carter, on the Joint Strike Fighter program, what steps are you going to take to manage this program better?  What in particular are you going to do in FY '11 to make sure that you don't end up with the JET estimate?

DR. CARTER:  I'll give you some examples of things that are worth considering.  Again, we're -- I haven't made any final decisions yet, but the kind of things that one considers are, for example, adding test aircraft to the flight test program, so that one can conduct the necessary string of tests in a more compressed period of time.  Right now we have a certain number of  aircraft that we've allocated to the flight test program, and then there's certain amount of testing that needs to get done.  So it's how much testing can each aircraft do times the number of aircraft.  That determines the duration of the flight test program.  So we can consider, as an example, a concrete example, adding test aircraft and thereby compressing the flight test program.  There's a very specific example.

QUESTION: Mm-hmm.  Any other examples -- (off mike)?

DR. CARTER:  Well, yeah, I'll give you another example, which is, we look at the software build and the software teams and see whether their -- it's possible to accelerate their work in some way by adding additional workers on additional shifts working on the mission software, that kind of thing.  So it's very -- you know, it's blocking and tackling.  But that's the way we ought to be looking at the thing -- what can we do to make it different, so that it does deliver on time, does deliver on schedule.

QUESTION: Secretary Carter --

STAFF:  We're going to --

DR. CARTER:  Wait, we're going to go -- oh, okay.  Fine.

QUESTION: You said that you'll consider making changes to the tanker draft RFP in light of the comments you've received.  Some of the most vociferous comments have come from Boeing's political backers in the Congress.  They say that it's scandalous not to take into account the WTO [World Trade Organization] interim ruling.  And they say that, you know, it's -- it's very odd you have a U.S. government which is divided, as they portray it, to the extent that DOD is staging a competition while the U.S. trade representative has filed suit on the -- over this matter.  What -- are you considering in the end somehow factoring in any aspect of the WTO findings?

DR. CARTER:  We have heard that criticism, and we're -- and we've had, obviously, criticism from both parties.  And I suppose that was destined to be.  And this is a criticism made by one of the parties.  We addressed that at the time we -- we released the draft RFP, described the WTO process, and the action that we can take at this point; which is to make sure that whatever happens down the road in the unfolding of these claims and protests and so forth on both sides, that the taxpayer is not -- is held harmless in respect of any damages that end up being awarded in any of the cases before the WTO.

STAFF:  I think we -- (off mike) -- right here.

DR. CARTER:  I'm sorry.

QUESTION: Sticking with tankers, one of the criticisms has been of the draft RFP the 370 -- around that number -- mandatory requirements, that they're equally weighted.  And one of the teams says, you know, there are -- some things like fuel burn is far more important than the door knobs on the latrine, for example.  Why was that decision made to do it that way?  And are you looking at changing it?

DR. CARTER:  Well, they aren't all weighted the same.  Some are in the trade space that will be taken into account in the event that the adjusted prices -- if you're familiar with the algorithm -- are very close.  The others, the 373 that you referred to, are the ones that the warfighter says, "This is what I want on day one; I want a tanker that can go to war." 

And he's entitled to say that, because he's been flying tankers for a long time.  These are derivatives of commercial aircraft in widespread use, and he's had the benefit of three or four failed efforts to procure this aircraft in the past and has given it a lot of thought. 

So it just happens to be a case when we know exactly what it is that we want.  It doesn't require a Manhattan Project or a lot of invention and development to produce it.  And so that's the circumstance we find ourselves in and that is reflected in the nature of the draft RFP.

QUESTION: If I could go back to JSF, if that's just possible. 

DR. CARTER:  Sure.

QUESTION: I've got a two-part question.  First, kind of building off what you discussed with Chris, the options that you're looking at, which I realize are not decisions at this point, but it looks like both of them would require more money up front earlier in the program.  How do you feel about that, given the cost-constrained sort of environment that you're in now?

And secondly, are there any non-negotiable issues, non-negotiable milestones, or decision points in JSF that must be preserved, but particularly with regard to the foreign -- (off mike)? 

DR. CARTER:  Well, this is a joint program.  It's an international program, so there are many, many people who are counting on good performance out of it, which is why I would like to keep it as close to schedule and budget as we can manage it. 

The -- as we look at the funding for the program, we -- it makes sense to ask yourself whether, if you make an investment now that shortens the flight test program, and therefore doesn't require all those people who were involved in flight test to be around as long, you're not making an investment now that saves money later, and restores schedule. 

If so, that's a(n) investment that it's sensible for the parties to make.  And I think both the government and Lockheed Martin should be prepared to share in those investments.

QUESTION:     And -- (off mike) -- oh, I'm sorry.I don't think I got my second part answered.  Are there any non-negotiables?

DR. CARTER:  Oh.

QUESTION: Specific places, like you cannot --

DR. CARTER:  Well, you can't negotiate with reality, so we're -- we have to do the best we can in terms of cost and performance.  I will say that, once we have an agreed, realistic plan, that it's only reasonable for the government to hold those performing the program to that plan.  And I think that both the government side and the contractors involved understand that, and that's precisely the kind of commitment that Lockheed Martin made yesterday and made to the secretary down in Fort Worth several months ago.  Same thing.

QUESTION:  Sir, you've mentioned in the -- this isn't my question; I just want to be clear about something.  You mentioned in your statement about which -- what are you getting briefed on today, here?

DR. CARTER:  It's the JAT.  I'm sorry about these acronyms.  The JAT is the Joint Assessment Team, and it deals with the Pratt & Whitney engine.

QUESTION: Right.  Right.  Okay, that was one of the questions I was going to ask you about, but I'll leave that for another time.  You talked about the different -- the framing of it as you -- on JSF, you had, you know, sort of a historical view and the contractor view.  Can you give us any sense of how disparate those views actually are?  And can you sort of generally frame it up for us and tell us, well, what is the high end or the ridiculous end, and what is the -- you know, the good news?  And where is the middle?  I mean, there's no frame of reference for that.

DR. CARTER:  Well, a couple of things about that.  First of all, it -- by no means is the JET estimate ridiculous.  It's solid, analytical basis.  I don't mean to say it's purely historical; it's not.  It's a different analytical approach to -- which is informed by historical experience.  But it's a very credible piece of work.  And I'm not really prepared to tell you how big the divide is between the two, because they're both works in progress. 

I'm working with the contractor and the program office to improve the realism of the cost and schedule that is in the program of record, and CAPE is continually learning also and it's -- and will continue to revise its estimate. 

I mean, you'd like to see these things come together, because there is, after all, only one reality.  But it's just not possible to, you know, forecast with a hundred percent clarity.  So it's very useful to me as the manager to have the benefit of two different views, because what it does, you still don't know what is true, but it reveals where the pressure points are.  It reveals where the long poles in the tent are.  It reveals the kinds of things that are holding up the schedule or costing money that we might actually do something about rather than just throwing money at them.  And that's what we're supposed to be doing.

QUESTION: Following up on that, then, the JET, though -- you know, we all saw the -- you know, I guess the initial estimates that they came out with in the GAO report, I think, gosh, it was nine, 10 months now, last March.

DR. CARTER:  So it was a year ago.

QUESTION: Yeah.

DR. CARTER:  It was 11 months ago, I mean 13 months ago.

QUESTION: Has the JET estimate changed since then?  Can we still refer to that?  Is that accurate?

DR. CARTER:  They have.  They have changed since then, obviously -- I mean, not obviously, but the program's moved on; there's more information available upon which to base them.  But I think they tell a substantially similar story of cost and schedule growth, and again, very credibly.

QUESTION: Can you tell us --

DR. CARTER:  And I also -- I'd add also that I think that a lot of what the JET forecast last year would occur this year -- some of it has actually transpired that way, which adds additional credibility to the estimate.  So it's a fine piece of work, but it's not dispositive.  We're trying to get ourselves a plan that we can agree to, with the program office and the contractor, and then get commitment to that and performance to that plan. 

QUESTION: So what are the long poles in the tent that you just referred to?  

DR. CARTER:  Well, I mentioned two already which is, the duration of the flight-test program is an issue.  The delivery of aircraft to the flight-test program, that is, as they come off the assembly line.  The completion of the software build, the -- particularly the cost performance of the engine, which is an important part of the overall cost of the airplane. 

And then there are ingredients that are out of our control to some extent which is, what our international partners are going to do.  There are some coming in, some moving out jets here and there out of this year and that year.  Obviously we'd like to see as little of that as possible, in the overall interest of program stability. 

This is a program that has many beneficiaries.  And also because it's a collective program, anybody can introduce instability into it also.  So it's important that all of the partners hang in there.

QUESTION: Secretary Carter, if I may push the discussion to the presidential helicopter, you mentioned that you're narrowing down the requirements -- that you narrowed them down to 17.  And I was wondering how much -- how many requirements are you trying to look at, one, and, two, is it reasonable to assume that it's going to be a new helicopter, or are you looking at already existing platforms?

DR. CARTER:  I misspoke about -- it was not the number of requirements that I was speaking of.  And we're not -- "narrowing them down" isn't quite the right word, either.  So let me kind of correct both of those things, if I led you in that direction.

"Narrowing down" isn't quite the word.  They are the customer, so what they -- what we're trying to do is explain the trade-offs between different attributes.  And so do you -- for example, the range of the aircraft, the payload of the aircraft, the kind of communications that are on the aircraft, the number of passengers the aircraft can -- so that they can -- they -- it's their airplane -- can intelligently make those trade-offs.

If everything seems possible, of course, just like you and me, we'd want everything, right?  So they -- we're -- we're -- I would say it's about skimming them down, it's -- it's allowing them to make intelligent trade-offs within the requirements.

The 17 number I was referring to is the intermediate number of alternative program approaches that we identified, different types of helicopters and different mixes of helicopters.  And obviously, for affordability's sake, one would like to be able to adapt an existing helicopter, rather than start all over on a helicopter.  Obviously, that -- that would always be our wish with starting a helicopter program.

QUESTION: So you were just -- just to clarify, the 17 you're talking are 17 approaches?

DR. CARTER:  Seventeen different -- different approaches.

QUESTION: Right.

DR. CARTER:  Exactly.  Down from 48.  (Laughs.)  Got down there eventually.

STAFF:  Right here.

QUESTION: James Tobias -- (inaudible) -- when the Defense Department set up this JIEDDO a few years back, they said that the primary reason for establishing it was to focus on the engineering efforts, and then focus on the theater perspective for the reasons that you gave for your initiative.  So I guess my question is, what are you going to be able to do that JIEDDO couldn't do or didn't do?  Is it fair to interpret this as some kind of audit on what JIEDDO wasn't able to accomplish?

DR. CARTER:  No.  I think it's not an audit on what JIEDDO was able to accomplish.  JIEDDO has accomplished a great deal and still continues to accomplish a great deal.  We have a new circumstance in Afghanistan.  The IED problem is different from the IED [improvised explosive device]problem in Iraq.  And we are just beginning to get set and -- in Afghanistan, because of the very austere logistics base there, in doing everything that we can about IEDs. 

Also, in addition to JIEDDO, there are these other participants in countering IEDs in the theater -- the ISR [Intelligence, Surveillance and Reconnaissance] Task Force established by the Secretary of Defense, the MRAP task force established by the Secretary of Defense, the various activities in all of the armed services, which -- each have a focus on that.  So he would just like to make sure that, as I said, the whole is greater than the sum of the parts.

QUESTION: I thought that was the purpose, though, of JIEDDO.  It was supposed to be joint and supposed to have, again, all the resources that they needed, and they could go across the board to pool what they could to solve this problem.  So why -- what can you do that they can't do?

DR. CARTER:  Well, in the meantime, Iraq has become Afghanistan, and there are these other ingredients that need to become aligned with JIEDDO.

QUESTION: I wanted to go back to the Joint Strike Fighter.  One of the issues that you had mentioned earlier is the alternate engine.  You've had a chance to take a fresh look at all this.  Is there really no business case for keeping -- (inaudible)?

DR. CARTER:  I've tried to address this before, and I'll just go through the analysis there.  The -- if you have two engines, then you pay two development costs and you have two production lines.  And against that is the possibility that the -- in -- competition will drive cost out of both the development programs and the production programs in such a way that you get -- you get back the money you paid by doubling the investment cost.  That is the proposition behind advocacy of a second engine.  And I haven't seen, and we have not been able to do, an analysis that conclusively or persuasively indicates that those savings are likely.

And another point -- again, not a new one -- but is that the investments of the second -- in the second engine have been made at the expense of the larger JSF program.  And so the secretary's indicated that he -- you know, that not only does there not -- is there not a persuasive business case, but this has been disruptive to the Joint Strike Fighter program, and that's the reason that he's taken the position he has with Congress and the budget.

QUESTION: On the JSF, how long of a window do you have -- (off mike) -- before the budget increases -- (off mike) -- how do you get Lockheed to share in the costs on this contract?  (Off mike) --

DR. CARTER:  Well, the immediate decision, which we'll be making in the next few weeks, is what to do for Program ‘11.  And there will be RDT&E funding, and there will be procurement funding, in FY '11 and in the subsequent years.  And we can move money between production and RDT&E as we -- as we see fit.  And we should make our out-year projections on the basis of the most realistic plan that we can come to. 

Now, of course, you know, every year, we'll reassess.  And we'll be back here next year talking, about the Joint Strike fighter program, of necessity.  But I think that what we need to put in the budget is the realistic plan that I have described as the best output of this process.  And as you know, that needs to happen within the next couple of weeks.  It won't have every I dotted and every T crossed.  But we need to get the 80 percent solution there and then continue to manage the program intensively. 

And you said about sharing costs, we don't want to be in a situation where the government bears the cost of schedule slips, in a program, all by itself.  It's reasonable that risk in a program be shared, be shared equitably, fairly.  And that's what I mean. 

QUESTION: Can we delineate a little bit more on the JET itself?  Depending on what unnamed-source story you read, there was a dramatic or drastic deterioration between last year's JET and this year's assessment.  Is it accurate, that there was a dramatic deterioration, or was it roughly the same figures, albeit with a six-month increase -- ?

DR. CARTER:  I think they're roughly the same figures.  I consider that a -- drastically different from the program of record, which is why I'm interested in closing the gap.

QUESTION: That's different than last year's JET, though. 

DR. CARTER:  No, I would say it's substantially similar to last year's JET.

QUESTION: I mean, a lot of people are watching this.  So -- but so you reject the notion that there's been serious, dramatic degradation in the program the last year, as laid out by the JET last year -- ?

DR. CARTER:  The -- I -- both the methodology and basically the results are substantially similar to last year.  As -- I actually read last year's report as well.  I mean, it's very consistent methodology and a very consistent story.  And obviously some more -- it's based upon a -- taking the very little data we have, because we're just starting out, and extrapolating that.  That's what both the program office is doing and the JET is doing.

Now, with the passage of another year, you get a little bit more data, but we're still at the very beginning of the flight test program.  So next year we'll have more data, and then you get more data -- the more you get data.  And once it's all over, of course -- (chuckles) -- nobody can disagree, so eventually they have to come together.  I think that's a -- I --

STAFF:  (Off mike) -- we're going to let Jim ask you a question.

QUESTION: Mr. Secretary, let me just sort of -- (inaudible), but your office is also involved in logistics?

DR. CARTER:  Yes.

QUESTION: And there's a huge logistical challenge facing -- (off mike) -- as they move materiel out of Iraq and into Afghanistan.

DR. CARTER:  Oh, man.

QUESTION: How are you dealing with that?

DR. CARTER:  I take that very, very seriously.  I mean, here we've been talking about presidential helicopters and Joint Strike Fighters and KC-X tankers and so forth.  And they're all real important things, too, but the title is Acquisition Technology and Logistics, and it's no kidding, we've got the logistics part in it. 

And I've told some of you this before, but when I was first offered this job on January 5th by Secretary Gates, he said that the troops are at war, but the building is not, and especially AT&L.  And I've tried to change that, and I think one reflection of that is the counter-IED effort. 

But logistics is a huge amount of activity that I'm delighted you're tuning into, because a lot of people's eyes glaze over when they think about logistics.  But we have a retrograde from Iraq to make, that the president has prescribed a timetable for.  So no kidding, we have to get out when he says to be out. 

And that's a challenge.  In order to do that, you have to figure out where everything goes that is going out, which raises a lot of big questions about, do you want equipment to go back to the United States to reset the Army?  Do you want it in the Guard and the Reserves?  Do you want to swing it to Afghanistan?  Do you want to keep it in Kuwait for a future contingency?  Do you want to give it to the Iraqi security forces?  And so forth.  And so when you begin to get into the logistics job, it raises all kinds of other questions.

Afghanistan, getting into Afghanistan, which we need to do as quickly as we can possibly do it, is very difficult, because it is -- I always say, next to Antarctica, Afghanistan is probably the most incommodious place, from a logistics point of view, to be trying to fight a war.  It's landlocked and rugged, and the road network is much, much thinner than in Iraq.  Fewer airports, different geography.  And so working all the time on that.

I'll give you some -- I'll give you an example of that.  Everything that we talk about, you -- ISR task forces, any of the teams or the forensic capabilities that JIEDDO puts in there, the ISR aircraft, MRAPS -- all that stuff, it sounds like, you know, to -- when you first come to this, you say, well, it's just a matter of make it and then fly it over there or drive it in. 

But it turns out that for each of these examples -- and MRAP's a good example:  We can produce MRAPs faster than we can introduce them and get them to the soldiers there.  It's not our production capability that limits the rate at which soldiers will get MRAP ATVs in Afghanistan.  It's the rate at which you can ship them in there, get the soldiers back, get them trained.

And then you say, well, what limits that?  What limits that is things like, do you have enough concrete slab to park the trucks on?  So then you say, all right, now I'll go out and buy concrete.  Well, where do you buy concrete in Afghanistan? 

They don't make concrete in Afghanistan.  You have to go to Pakistan to get it.  So I don't know if you know the fairy tale of the -- or whatever it is; maybe it's a song or -- the -- for want -- or -- "for want of a nail." 

And it's -- everything is like that in Afghanistan.  And, you know, that's one of the reasons why the secretary, recognizing that, wants to keep the focus on, because each one of these things is agonizingly difficult to do.  It's easy to think what the right thing to do is, but, you know, our -- my job, with Jay Paxton, is just to do the blocking and tackling that -- and solving minor problems and logistical problems and so forth and keeping people focused on, because it's so darn difficult to do even what might be the -- to actually do what is so clearly the right thing to do.  Getting it done is something different.  That's our -- that's our job.

STAFF:  Ladies and gentlemen, we've run out of time.  Thank you so much.

DR. CARTER:  Thank you.

STAFF:  I wish we had more time.  But maybe somewhere down the road we can do that.  Thank you so much.

DR. CARTER:  Is this a useful thing to do?  Or do it periodically -- okay.

QUESTION: Can we just ask you about -- (inaudible) -- the tanker -- (inaudible) -- will make the end of November, plans (inaudible) -- clearly represent what you're saying?

DR. CARTER:  I can't say that yet, because we're -- I just don't know yet.  We're working as fast as we can.  We set ourselves 60 days, but there are a lot of questions.  We want to make sure we've done a very careful job answering every question and so forth, so.

QUESTION: Okay.  So it may or may not happen.

DR. CARTER:  Right.

QUESTION: Okay.

DR. CARTER:  It -- it'll happen when we're done doing a thorough job of considering all the questions and suggestions we've gotten.

STAFF:  Thank you all so very much.