A decade ago, Secretary of Defense Chuck Hagel launched the Defense Innovation Initiative declaring we must “sustain and advance our military superiority for the 21st Century…American dominance…is eroding, and we must…sustain and…expand our advantages even…with more limited resources.” Those words ring even truer today, yet as the Defense Department spends a record level on R&D, these efforts are not formally connected to the requirements or acquisition processes at the Pentagon. These two worlds of R&D and acquisition operate separately. In the language of the Defense Department, technology development or R&D needs to transfer to acquisition or production to get to our warfighters.
Innovation Initiatives Proliferate
Defense innovation has a strong tradition most visibly from the Defense Advanced Research Projects Agency (created in 1958 as a response to Sputnik). Notably, according to the General Accounting Office, technology transfer is not a primary objective of DARPA. In 2015, Secretary of Defense Ash Carter created four new innovation entities with the objective of increasing technology transfer: the Defense Innovation Unit (which I led 2018-2022) to accelerate the adoption of commercial solutions, the Strategic Capabilities Office to use military systems in ways the world has never seen and doesn’t know how to counter, the Defense Digital Service, and the Defense Innovation Board.
In 2018, Secretary of Defense Jim Mattis created Army Futures Command and the Joint Artificial Intelligence Center. Along the way, AFWERX, NavalX, and Army Applications Lab began to leverage the $1 billion spent each year through Small Business Innovation Research grants. Also in that year, the Pentagon reorganized to increase R&D focus led by a new Undersecretary and another innovation program followed a few years later, the Rapid Defense Experimentation Reserve.
Defense R&D Spending Reaches Record
Unfortunately, with each new innovation organization and increase in R&D spending, there is no accompanying architecture of how these technologies, commercial solutions or research projects transition to ongoing production or what the military calls programs of record. Programs of record have a management structure, usually a program executive office, which houses the engineers, acquisition staff, test plan, sustainment strategy and budget to field a new capability. The current R&D budget is a record $130 billion (15% of total defense spending) but the research is not explicitly mapped to programs of record which means a high degree of uncertainty as to whether the successful efforts get into warfighters’ hands.
The Big Disconnect
While many research efforts need time to mature, a closer connection from the many R&D programs to capabilities the Defense Department wants to acquire would be a lot more efficient. In fact, with renewed great power competition, speed in the transition or transfer of R&D to new capabilities is a critical competitive dimension. While traditional defense primes are adept at navigating the Department to channel R&D efforts to programs of record they will likely be awarded, companies outside this ecosystem have difficulty in understanding how warfighters in the field, those that write requirements for new defense systems, contracting staff, and acquisition budgets can be in four separate organizations. This is one reason why just six defense primes are awarded 2/3 of all Pentagon procurement spend.
Further, many new capabilities find their way into the budget from outside the Defense Department through Congress. As I saw first-hand, lobbyists and companies influence members of Congress to add defense appropriations targeted at specific capabilities and vendors. While this may serve individual Congressional districts, earmarking appropriations in this way does not optimize for defense priorities or warfighter needs.
Acquisition Driven By Requirements and Budget—Not R&D
Inexplicably, the defense acquisition system is driven by a separate requirements process to specify what the military needs—which may be informed by research but is without a mechanism to do so. A defined and agreed upon requirement is the starting point for any defense acquisition program—not research in the labs nor a commercial capability already available like small drones or satellite imagery despite Congress requiring the Defense Department to assess commercial capability first. Regardless, the disconnect between research programs and the acquisition system is one of the reasons for the valley of death for non-traditional suppliers: vendors successfully performing on R&D or prototype contracts may be waiting years before there is a requirement written, appropriation request made to Congress and acquisition resources assigned to write a production contract.
What private investors see is aspiring suppliers who successfully competed for R&D dollars, like SBIR grants, often with no idea how to transition research wins to ongoing production contracts. From an investor perspective, a research award is interesting but means little without a transition to ongoing revenue. Only when the research informs a requirement and Congress appropriates budget to an acquisition organization—like Army Materiel Command—is a path set for production revenue to a vendor that scales capability for warfighters.
The Way Forward: Planned Transitions to Military Customer and Budget
Given the proliferated number of defense organizations spending an all-time high level of R&D dollars, mapping the most promising, highest impact and most mature research capabilities to the acquisition system is a long overdue reform. Either the Defense Department or Congress should require transition plans for successful research. Since research without a transition plan to production confines the research to a lab, research projects of any size should be explicitly mapped to a military need and a customer willing to identify budget dollars to acquire the capability. Since research outcomes are uncertain there will not be a one-to-one correlation of research to acquisition, but a system that does not even prioritize this connection is doomed to both waste money and frustrate vendors. We must ensure our record investment in research is connected explicitly to an acquisition system that fields capabilities for our warfighters. American military superiority is eroding fast and speeding research to new capabilities depends on successful transitions to acquisition programs.
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