To Transform Tech, DoD Must Stop Being An ‘Innovation Tourist:’ Report

WASHINGTON: A new report urges the Pentagon to stop acting like an “innovation tourist… visiting new shops, spending some money, and moving on to the next destination” if it wants to truly achieve “a bona fide strategy for bringing emerging technologies into the department.”

The report, Ending Innovation Tourism: Rethinking the U.S. Military’s Approach to Emerging Technology Adoption, is authored by Melissa Flagg and Jack Corrigan of Georgetown University’s Center for Security and Emerging Technology.

Noting it’s “unlikely that any significant progress toward overhauling the DoD acquisition process will be made in the near future,” the report lays out several recommendations DoD could take today to accelerate the types of innovations needed to remain competitive against near-peer adversaries.

The authors note that the challenges around DoD innovation — or lack thereof — are many and multifaceted, but the crux of the matter is “under the DoD’s current organizational structure, defense innovation is disconnected from defense procurement.”

The report then provides a brief history, spanning from the end of World War II to present, of how DoD’s acquisition bureaucracy came into being, and how an acquisition structure that consistently produced innovations such as the internet and global position systems has, for decades, become more of a hindrance than a help.

The report notes that DoD has made some positive strides to adapt to an environment in which the private tech sector has displaced it as the driver of innovation. For instance, DoD has created innovation offices, such as those run by the Defense Innovation Unit — the Pentagon’s office originally established for outreach to Silicon Valley companies — as well as AFWERX, NavalX, and the Army Applications Lab. While these offices have produced some “one-off tools” and “bolt-ons” to existing military tech, they have “impacted only small slivers” of “the major platforms and systems that account for the vast majority of military warfighting capabilities,” the report observes.

Why? Well, just like everything defense acquisition related, the answer is complex, with factors ranging from Pentagon procurement requirements to business models. But a primary reason among many, the authors note, is that DoD’s innovation efforts are tied to the research & development part of the budget and not to specific procurement programs — especially so-called “programs of record” for the largest DoD projects.

Programs of record are funded through congressional appropriations and managed by Pentagon procurement managers and program executive officers, who tend to choose among a select few prime contractors they know and trust. Primes consistently choose subcontractors they know and trust. Why? Because the top goals for programs of record are on-time, on-budget, on-spec platforms and systems, the report notes, not innovation. With those primary goals, it’s safest to go with contractors you know and trust.  

Indeed, the report notes, of the $1.86 trillion DoD spent between 2016 and 2020, more than two-thirds went to five hundred contractors, about half went to the top 25 contractors, and the top five accounted for one-third of the Pentagon’s spend. The result is an “insular marketplace” around programs of record, one that locks out many non-traditional defense contractors, the report notes.

Because innovation budgets are tied to R&D programs, “This placement completely disconnects them from the procurement ecosystem, with separate chains of command, budget processes, and authorities,” the report notes. Further, “The problem is that the current organizational structure of the DoD acquisition ecosystem restricts them to innovating around the edges.”

The result is that DoD’s current approach to innovation “is more akin to innovation tourism — with the DoD sampling the local fare of the United States’ various tech hubs” than a long-term strategy. And for non-traditional defense contractors, “just as selling a few souvenirs will not sustain a local business, winning a few small R&D contracts will not keep a young tech company permanently afloat.”

The report notes that innovation offices are not to blame, because after all, “A group of small, disconnected, sparsely funded offices housed under the research enterprise cannot be expected to transform the culture and technological capabilities of the entire DoD acquisition system.”

The report then details three recommendations, which it acknowledges are not comprehensive, but are actionable today, including:

• Define innovation goals and increase transparency.
• Share and use market intelligence across the acquisition ecosystem.
• Create safe spaces for collaboration.

Many of the problems highlighted in the report are recognized by some in Congress, including Rep. Jim Langevin, D-R.I., chair of the House Armed Services Subcommittee on Cyber, Innovative Technologies, and Information Systems. That subcommittee’s markup this week of the Biden administration’s proposed Fiscal Year 2022 budget included special emphasis on programs to expand, improve, and streamline efforts for getting new tech from the private sector into the DoD’s hands.

And bipartisan legislative efforts such as the United States Innovation and Competition Act (formerly called the Endless Frontiers Act), passed by Congress this year, are meant to spur domestic innovation across an array of areas, including military-commercial dual-use tech, through substantial funding.

Will such efforts be enough? Is the US moving fast enough to retain its fragile military and high-tech advantages over countries like China, which are investing, innovating, and expanding aggressively? That remains to be seen.

One thing is for certain: “The DoD must act immediately to implement a true innovation strategy using the authorities it currently has at its disposal,” the report urges. “The country cannot allow perfection to be the enemy of progress.”