Press Release
☷Senior Defense Officials Hold a Background Briefing
U.S. Department of Defense ( By Press Release office)
Mar 15,2024
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Hey there , good morning! Thanks for joining us today . I ' m Major General Pat Ryder , Pentagon press secretary , and I ' ll be leading today ' s background call . Just a heads up , this call is embargoed until Jake Sullivan announces a new PDA package later today . We wanted to give you some context and answer any questions before the official announcement . The call is on background and our briefers are senior defense officials 1 and 2 . Please keep your phones on mute unless you ' re asking a question . Now , over to senior defense official 1 for some opening remarks . Thank you , Pat . To give you some background , we ' ve pretty much used up all our funding to help Ukraine , and the last supplemental funding we received was 15 months ago . The situation on the battlefield has prompted discussions on what we can do , as we can ' t keep doing drawdowns without replenishing our stocks . We ' re looking into a new supplemental funding to address this issue . The terms and conditions for this funding will be available in the supplemental . The money for replenishment comes from a transfer fund , which allows us to take a pool of money and use it to replace anything we give to Ukraine . If we give them mostly Army equipment , the funding to replace it is moved to Army accounts . If any of it is not needed , it can be transferred back to the central pool to be reused . This is how all our transfer funds work , whether it ' s for counter - drug efforts , environmental restoration , or Ukraine replenishment . We ' ve done this before , but it ' s more interesting now because we ' re running low on funds . The connection here is that we have some savings that can cover the cost of a new replenishment package . This is a unique occurrence , but we ' ve had savings before . About six percent of all the funds we ' ve been given have been returned and reused , and you can find that information on our website . The bottom line is that these savings will help us fund one more package , but we can ' t rely on this in the future , so we need the House to act and vote on the supplemental funding . SENIOR DEFENSE OFFICIAL 1: Yeah , thanks . So we believe that the package that the Security Advisor will announce will be up to $300 million . So when you think about the savings that we have identified , it ' s in that same range . So it leaves us neutral . It doesn ' t increase or decrease the $10 billion . The $10 billion is a good example of why we need the supplemental approved . When we get funding from Congress to replenish things that we ' ve given or will give to Ukraine , that means we can use them to fill the hole or , if there are new drawdowns , we can at least break even . So that ' s an example of how you save money with good negotiations . We did something similar with joint light tactical vehicles . We used an initial cost estimate based on the previous JLTV contract , but once we were finalizing this contract award , we had a new contract in place , and the unit price went down as a result of a competition we did , where we now have a new vendor for JLTV . That resulted in savings . On Humvee , we also worked with the vendor to extend the ordering period and quantity , so we got more for our same dollars , but also a unit - cost break . So again , just working with the vendors , we came in under estimate , which generated savings that goes back to the replenishment pot . The funding in question being referred to here going back to the pot was a result of multiple contract actions over multiple months as they worked to finalize , as Senior Defense Official 1 said . You know , we made the department aware . There ' s a process where we make OSD Comptroller aware of such things , and that was part of the conversation about this drawdown package . And this has happened before . We ' ve had significant savings from Javelin , Stryker , and HIMAR awards that will also impact the replenishment pot . So it ' s not routine but it ' s also not unprecedented and is mostly the result of good stewardship by the Army to make sure we ' re getting the right thing at the right price for what the Army needs to replenish . Over . GEN . RYDER: Thank you very much , gentlemen . First question will go to Associated Press , Tara Copp . Q: Hi . Thank you both for doing this . I have a couple of questions . Can you give us a dollar figure for what this PDA will be and what kind of munitions or air defense it will cover? And then secondly , can you confirm that the DOD isn ' t just broke on this particular replenishment fund , it ' s actually $10 billion overdrawn . So how could you find more money through cost savings if you ' re already $10 billion in the hole? Thank you . The pace of events on the battlefield determines how much support we lean towards , but we definitely need funding for ourselves . Even if there was a terrible decision to stop helping Ukraine , we would still need Congress to step in . $10 billion seems to be the maximum amount we ' re willing to take on at this point . Congress has been supportive in the past , but there have been challenges recently . We ' re waiting for their signal before moving forward . The funding package we ' re sending includes anti - aircraft missiles , ammunition , artillery rounds , and armor systems . Stay tuned for more details later today . SENIOR DEFENSE OFFICIAL 2: This is Defense Official 2 . So , as Defense Official 1 mentioned , the funding comes in and then the DOD goes to Congress to request the use of that fund for specific purposes . These requests go back to Congress for approval . The Army has been receiving these requests at a fast pace , and that ' s how the funding for the contracts I ' m talking about was provided several months ago . It took time to go through contract negotiations and paperwork , but these things have been planned for a while . The timing is coincidental but also supports the overall decision . SENIOR DEFENSE OFFICIAL 1: Yeah , and I ' ll just add that the process takes time because we can ' t replenish anything until we ' ve actually given it to Ukrainians . That ' s a legal requirement . We have to give it to them first and then start the contracting process that Defense Official 2 described . It takes a while . As for the need for a supplemental moving forward , this doesn ' t impact it . This has happened before , but not on the scale we need . GEN . RYDER: Thanks , Courtney . Let ' s go to CNN , Haley . Q: Hi . Thanks for doing this . I ' m curious if you can talk about the timeline here . I don ' t think these contracts are immediately new , right? So how was this figured out today or recently? And could you address the inevitable questions from Congress and others about why this is happening now and what it means for DOD moving forward without Congress supplemental funding? If the announcement later could also mention when they expect some of these things to happen , that would be helpful too , unless you can share it now . Thanks . The situation in Ukraine is concerning , but I can ' t elaborate on that . And I ' m not sure if the package will include tanks . GEN . RYDER: Thanks . Now over to Noah Robertson from Defense News . SENIOR DEFENSE OFFICIAL 2: I think it ' s more about anti - armor . Q: Thank you both for taking the time to chat . Can you explain how the $10 billion hole in replenishment funds came about? Was it due to differences in pricing or something else? SENIOR DEFENSE OFFICIAL 1: Basically , when we first started providing support after the invasion in February ' 22 , we had to come up with a ratio for how much it would cost to replace items that were sent , compared to their value on our books . We initially estimated a 10% premium , but later found out that it was closer to 20% based on replacement values . So the shortfall in funds came from not receiving enough money to replace what was given out . It took us some time to gather data on different categories of items and their replacement costs . This issue has been known for a while , and we ' re hoping for some assistance to address it . It ' s kind of like what happened in Desert Storm and other previous conflicts where they had to make sure the Army had enough resources after the fact . Regarding the data showing the 20 percent estimate instead of 10 percent , that came in the second half of last year , after most of the work was already done . And as for the question about why not use the $4 billion in PDA instead of the $300 million , it ' s a matter of scale and uncertainty about approval from Congress . We don ' t want to dig ourselves into a deeper hole . It ' s a tough situation , but we ' re trying to balance our own funding needs with helping Ukraine . We ' ve got a chance here to , uh , do something , but it doesn ' t change the fact that we still have a tough problem , and we need the House to take action . Alright , folks , that ' s all the time we have today . Thanks for joining us . Just a reminder , this info is from senior defense officials , and it won ' t be released until Mr . Sullivan , the national security advisor , speaks later today . We ' ll have more details in our press release from DOD later . Thanks , everyone . See ya .
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