WASHINGTON — This week the Defense Innovation Board and other defense thought leaders released suggestions on how the Pentagon should rethink some of its major strategies related to innovation, warning that if it doesn’t, there could be severe national security consequences.
“The world is changing very rapidly, and if we don’t do something, there’s an awful lot of dangers, everything that we’ve built in the last 250 years can be thrown away,” chair of the DIB and former New York City mayor, Michael Bloomberg, said during a quarterly DIB meeting Monday.
During the meeting and in a report that came out afterwards, Bloomberg and a few outside contributors urged the Pentagon, Congress and industry to divest from legacy systems and change procurement processes, especially when it comes to dealing with nontraditional companies.
The report, titled “A Blueprint for Breakthroughs in Defense Innovation,” outlined a handful of suggestions; one being to shift DoD resources to innovative programs.
“The Department of Defense’s nearly $900 billion annual budget is a massive resource, yet much of it is locked into maintaining outdated systems rather than advancing innovation. Budget documents show that nearly 40% of the DoD’s budget is allocated to operations and maintenance, much of which sustains legacy systems rather than modernizing critical capabilities,” the report reads.
Further, it explains that given the declining tax base and “ballooning” national debt, the DoD is “unlikely” to see a “large increase,” and therefore should do more with less, relatively speaking.
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A more “viable” option for the DoD, according to the report, is a “divest to invest” strategy which calls to redistribute as much as 15 percent of current Pentagon budget resources from legacy systems to new capabilities.
An ‘Alternative Pipeline’ For Procurement
In terms of procurement, the authors of the report suggest that the Pentagon should treat nontraditional defense companies differently from traditional ones. Specifically, the report called the DoD to move its procurement efforts for innovative technologies out from under the planning, programming, budgeting, and execution (PPBE) system into an “alternative pipeline” that “prioritizes urgency and flexibility.”
Though the report lacked details on what exactly such a pipeline would look like, the authors emphasized that the Pentagon will have to ditch its risk-averse attitude to make it happen.
“Despite having alternative authorities to accelerate processes, the default remains slow-moving, traditional programs of record that minimize risk and leave valuable solutions untapped. Combatant Commands depend on the Services which favor these incremental improvements aligned with entrenched doctrines and domains, resisting transformative changes that challenge the status quo,” the report stated.
Similarly, DIB board member Gilda Barabino, who also serves as the president of Olin College of Engineering, laid out several of the board’s suggestions for how the Pentagon should act on nontraditional companies to enhance innovation. One such suggestion was the creation of a nontraditional vendor investment review committee overseen by the Secretary of Defense’s Office of Cost Assessment and Program Evaluation, she said during Monday’s meeting.
The board also recommended that the Pentagon should streamline security clearance requirements for nontraditional vendors, “including establishing a central credentialing authority” which would allow vendors greater access to sensitive compartmented information facilities, commonly known as SCIFs.
On a more granular level, Barabino said the board agrees that there should be a rapid integrated scalable enterprise program — a platform designed for small business to showcase their innovative tech and try to get it quickly integrated into acquisition programs — as a small business innovation research (SBIR) or small business technology transfer (STTR) permanent phase three fund. Phase three funds are provided to small businesses to deploy innovative tech by outside sources that do not qualify as SBIR/STTR vendors.
Putting the rapid integrated scalable enterprise program in a permanent phase three fund would mean that the nontraditional vendors involved in the program would have a constant access to outside funds, which would come from a “variety of sources, either additional appropriations or pooled funds from existing programs,” Barabino said Monday.
In both the report and during the DIB meeting, Bloomberg acknowledged the hard work and time that went into the numerous suggestions, but said they are no good unless they are acted upon.
“We have a long ways to go, and it’s a very dangerous world out there, getting more dangerous every single day,” he said. “Somehow or another, we’ve got to find ways to deal with that and to not throw in the towel and make some terrible, tragic mistakes, which, in this day and age, could lead to calamity.”