McCain dresses down DOD deputy nominee

If Patrick Shanahan is going to be confirmed as the deputy secretary of defense, he has to do some additional homework and report back to the Senate Armed Services Committee, its chairman said.

After a generally cordial hearing, Sen. John McCain (R-Ariz.) informed the nominee that his history as an executive at Boeing and his answers to some of the questions in the confirmation hearing cast doubt on whether Shanahan's nomination deserved support.

"The answers that you gave to the questions, whether intentionally or unintentionally, were almost condescending," McCain said, pointing in particular to Shanahan's lack of robust support for sending defensive weapons to Ukraine.

"I am concerned that 90 percent of defense spending is in the hands of five corporations, of which you represent one," McCain added. "I have to have confidence that the fox is not going to be put back into the henhouse."

Shanahan is senior vice president of supply chain and operations at Boeing, and he previously served as vice president and general manager of Boeing Missile Defense Systems. He told senators that he would recuse himself from all DOD business with Boeing unless granted an ethics waiver on a project basis.

Senators asked Shanahan about his perspectives on the so-called Third Offset strategy of maintaining U.S. technological superiority, his views on the split of the office of Acquisition, Technology and Logistics, the role of the chief management officer and acquisition reform in general.

Shanahan pointed to his experience at Boeing in reforming programs and systems and said he would bring that approach to the Pentagon. He vowed to start an audit in September and to work to reform the business process inside the department.

He said he has not been briefed on classified Third Offset programs, but that the department will have to evaluate which new technologies merit further investment and which should be abandoned.

"When I look at the strategy exercise that we'll be conducting to put together the FY19 budget, it will be critical that we have an assessment how much funding needs to be applied against the Third Offset. I believe that restructuring of [Research and Engineering] will give us the concentrated skillsets so that we can have a more informed recommendation."

Shanahan expressed strong support for expanding the defense base and reaching out to small innovative businesses. He said he is a big proponent of programs like the Defense Innovation Unit Experimental that focuses on tapping new companies and technologies.  

"Innovation is messy," he said. "I'm a proponent of failing, failing fast, learning quickly. I think the faster you do that, the more we end up training people," he said, adding that people must learn how to better develop and integrate technology.  

Shanahan conceded that he was not familiar with the inner workings of the Pentagon and that he hoped to learn his way around by focusing initially on implementing the requirements in the 2017 National Defense Authorization Act to stand up separate offices of Research and Engineering and Acquisition and Sustainment as well as create a deputy chief management officer position.

Shanahan also stated he would work on speeding up procurement and the operationalization of prototypes based on processes used at Boeing.

"I hope that you will think about and perhaps convene a public-private group to think about how do we structure ... the procurement system to produce at lower cost and at higher speed," said Sen. Angus King (I-Maine), who argued that the procurement problem has been long standing and will require substantial effort.

"I think just saying, 'Well we're going to try to do better' is not going to be enough to change a system that is so thoroughly entrenched," he added.