Pentagon’s tech chief promises stronger budget, support for DIU

WASHINGTON: With the outgoing director of the Pentagon’s Defense Innovation Unit raising concerns about the level of support his office has received, the department’s chief technology officer said she wants to find a replacement who both understands the acquisition process and has exposure to the commercial world. 

Testifying Thursday in front of the House Armed Services Committee’s Cyber, Innovative Technologies and Information Systems subcommittee, Undersecretary of Defense for Research and Engineering Heidi Shyu said she believes DIU has “very strong support” and is pleased with what the agency has accomplished, but acknowledged the frustration with unit’s budget. 

In a recent interview with Breaking Defense, DIU Director Mike Brown, who announced his plans to leave his role at his four-year anniversary in September, said the agency faces a critical lack of support from the department around its budget (DIU had a 20% cut in funding from fiscal 2021 to 2022) and said the unit needs “leadership in the department.”

Shyu promised to increase funding for the unit in the FY24 budget request after questioning from Rep. Seth Moulton, D-Mass., who said Congress, not DoD, has has driven investments toward DIU. 

“You just said you support DIU 100%, but your budget is basically flatlining it from FY21, you factor in inflation that’s about 90%,” Moulton said. “How do you think we’re going to improve on DIU success if in real dollars, we’re actually facing a budget that’s 10% less than what we gave it two years ago?”

Moulton called for a tenfold increase in funding, referencing a 2020 Future Defense Task Force report by HASC. 

“You got to realize, by the time I came in… [the] budget was pretty much baked two weeks before I came in,” Shyu said. “So my opportunity to influence is this year, in FY24. So you’ll see a much stronger request for funding for FY24.”

Shyu said the “biggest challenge” DIU has faced is trying to get “the pull” from the acquisition community to move innovation into production.

As Brown’s tenure comes to an end and Shyu starts searching for Brown’s replacement, she wants to find someone with experience in both the commercial sector and government to help address this gap. 

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“Because that’s where the gap is — a lot of small companies, great ideas, have produced a lot of prototypes — it’s this funnel that’s going down to production,” she said. “And it’s the pull from the acquisition community that we need. So I think that’s what I want to focus on and this is where I think having somebody… with experience on both sides would help.

“Understanding the acquisition process and having exposure to the commercial world can help to do a faster pull, rather than just being extremely frustrated by the bureaucracy internally,” she added. Brown, a former CEO at Symantec, had no major experience of working within the Pentagon’s acquisition system when he took over DIU in Sept. 2018.

In an effort to help address that gap, DoD will be rolling out a new initiative in the next few months called “Strategic Capital” to help small companies work closer with acquisition offices that will do that actual “pull” and get capital investments, Shyu said. DoD is currently in the process of creating the new office.

Shyu also did not lay out a specific timeline for finding Brown’s replacement, but added that she extended the role of Brown’s deputy by one year in order to have someone “with a skill set that’s been here for the last several years” while she looks for a new DIU director.