The MovieUpdates Global Affairs Project examines the increasingly intertwined relationship between the tech sector and global politics.
Much has been written in this space about the Department of Defense’s efforts to tap into Silicon Valley’s innovation — and the steep hill tech companies must climb to eventually win DOD contracts and cross the “Valley of Death.” The good news is that the US government has heard Silicon Valley’s pleas to cut red tape and promote new ways of doing business, and is taking action.
The Critical 4Cs
Over the past year, a strong, bipartisan alignment has developed between the executive and legislature around a series of actions aimed at closing gaps and removing barriers to success, best regarded as the “critical 4Cs”: Culture, Contracting, Congressional Budget cycles and champions†
Let’s start with champions. The American people are fortunate to have two of Silicon Valley’s greatest champions, Deputy Secretary Kathleen Hicks and Secretary of State for Research and Engineering (R&E) and (CTO) Heidi Shyu. Together with other champions in the Pentagon, they fully understand the challenge and have taken concrete steps from above to prepare the DOD system for innovation.
For example, Hicks and her former software czar made a huge effort in 2021 to realize DOD’s software modernization strategy, which aims to better organize the Pentagon’s internal processes for introducing new software technologies across the enterprise. In fact, the strategy also produces the formal “demand signal” of the Silicon Valley technology scaling policy in the DOD.
Hicks has also visibly empowered the CTO, her management group, and the Innovation Steering Group to map the Pentagon’s innovation efforts, examine its alignment and acquisition practices, and fairly engage—and account for— the smaller technical stakeholders in the industry moving forward. DOD has also established new programs to recruit and grow tech talent, thereby attracting and retaining a larger pool of defense technology champions. This adds to another important “4C”: building a tech-savvy – and technology-driven – culture within the DOD.
Under Shyu, an experienced senior procurement and acquisition manager with degrees in math and engineering, the Pentagon has made a series of efforts to “make it go faster.” As Head of Research and Engineering, Shyu helps coordinate the hundreds of innovation agencies and efforts within the Ministry of Defense. She is taking concrete action to empower small tech innovators and reduce barriers to working with DOD.
One of these is a Technology Vision released in February, which prioritizes key Pentagon focus areas such as Trusted AI, Space, Advanced Computing and Software. Secretary of State Shyu has also asked Congress for authority to help small innovators through an extensive Small Business Innovation and Research (SBIR) grant process to mature experimental programs and increase the likelihood of them becoming programs of record. This is one of many efforts underway to reduce systemic “contracting C” barriers to promising programs.
In the latest “C,” congressional budget, the Biden administration proposed in its 2023 budget a 9.5% increase over the funding level for the Department of Defense for research, development, technology and engineering in FY22. If passed by Congress, it would represent a significant effort to advance technology modernization and adoption, building on the measures passed by Congress in the FY22 National Defense Authorization Act (NDAA) and FY22 Budget.
The FY22 legislation specifically authorized and funded DOD’s plans to reduce barriers to technology adoption and provided additional funding for software and SBIR programs. For example, the FY22 has commissioned NDAA Section 833 DOD to develop a pilot program to implement unique acquisition mechanisms for emerging technologies. Meanwhile, Section 834 mandated accelerated procurement and deployment of advanced technology — both intended to address speed and ease the pain of the contracting “C” as funding levels would rise in FY23.
Congress members and staffers are still hearing from Silicon Valley startups about the lack of planned funding at the end of SBIR funding cycles, but Congress’s challenge, they say, is balancing rapid innovation success with oversight and responsibility for such financing by taxpayers. They don’t write blank checks. Therefore, Secretary of State Shyu’s request to Congress to extend the SBIR cycle is important.
As Congress and the Pentagon continue to address the “4C” challenges, they must avoid creating new ones. For example, when broader spending and powers on software and new technology were passed, Congress created new reporting requirements to explain how the money was being used, which in some cases discouraged innovation. As one DOD program director put it, “Now I have to provide quarterly quantitative and qualitative progress reports to include comparisons of similar programs. Thanks, but I’ll stick with [traditional programs] and focus on delivering products rather than reports.” New reporting burdens can overshadow intent and create cultural antibodies to do new things among respected but overworked program managers. There must be a balance between ‘supervision’ and ‘free for all’. View this space.
A recent report from the consulting firm Miter outlined why simply adding more money and expanding the latitude in the SBIR grant process is an incomplete solution to solving the problem of rapid technology adoption. In a nutshell, all defense acquisition is rooted in the formal requirements process, the lengthy Pentagon process that articulates what the military needs and why, and the associated acquisition and budget processes that determine how much it can buy, how, and when. If a certain new technology doesn’t fit into that process of requirements and budget, it would be difficult for the Pentagon to fund and deploy it.
Current processes often pit program and contract managers against the innovation teams and end users who now want advanced technology – a dynamic that makes it easier to maintain the status quo. To achieve technology adoption, these formal processes need an overhaul to ensure progress remains in the right direction. It’s one thing to develop or test new technology, it’s another to see it as a hard requirement and get it into the formal buying cycle to scale it across the world’s largest, most complex military force and its networks. .
Authorization to Operate (ATO) is a major hurdle for both startups and end users. If a company’s software or hardware is deemed safe on one military network, why isn’t it safe on another? Often, companies must go through separate approval processes for each office, branch, or Pentagon agency. This can be streamlined without making technology adoption itself a security issue, including through more effective use of cloud resources. Clearly, more work is needed to address ATO challenges if new technology is to be scaled at the speeds and levels that Pentagon leadership desires.
The US government clearly recognizes the serious national security and financial obligations to rapidly deploy Silicon Valley’s most innovative and applicable commercial/dual-use solutions. But as the adage goes, “Rome wasn’t built in a day” and continued efforts will be needed to close gaps and mitigate unintended consequences. Startups must continue to actively work with the Pentagon and Congress to communicate specific examples of their “pain points” and provide constructive ideas, while at the same time adapting to a corporate, compliance and contract culture vastly different from the Valley. Working together for success, the Pentagon and Silicon Valley are truly capable of anything, including defending the free world against the worst existential threats.