May 26, 2022

The gaming-updates Global Affairs project explores the increasingly intertwined relationship between the technology sector and global politics.

Much has been written about the Department of Defense’s efforts to leverage Silicon Valley innovation in this area—and tech companies will have to climb a steep hill to eventually win Department of Defense contracts and cross the “valley of death.” The good news is that the US government has heeded the pleas of Silicon Valley and is taking action to cut red tape and promote new ways of doing business.

Critical 4C

Over the past year, a strong bipartisan collaboration between the executive and legislature has developed to bridge the gap and remove barriers to success, known as the “Key 4Cs”: culture, contract, convention budget cycle and championI

Let’s start with the champions. The American people are lucky to have two of Silicon Valley’s greatest champions: Assistant Secretary of State Kathleen Hicks and Secretary of State for Research and Development (R&E) and (CTO) Heidi Shue. Together with other leaders in the Pentagon, they fully understand the problem and have taken concrete steps from above to prepare the DoD system for innovation.

For example, Hicks and his former software czar made a big effort in 2021 to implement the Department of Defense’s software modernization strategy, which aims to better streamline the Pentagon’s internal processes to bring new software technologies into the enterprise. In fact, this strategy even provided a formal “demand signal” for the Silicon Valley technology scaling policy at the US Department of Defense.

Hicks urged the CTO, his management team, and the innovation leadership team to map the Pentagon’s innovation activities, study its alignment and acquisition practices, and properly engage and account for smaller technology stakeholders moving forward in the industry. The Department of Defense has also developed new programs to recruit and develop technical talent, thereby attracting and retaining a broader pool of defense technology champions. This adds to another important “4C”: building a tech-savvy and technology-focused culture in the US Department of Defense.
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Under the leadership of Shu, an experienced senior purchasing and acquisitions manager with a degree in mathematics and engineering, the Pentagon launched a series of efforts to “speed up the process.” As head of R&D, Xu helps coordinate hundreds of innovation agencies and the Department of Defense. She is taking concrete actions to empower small tech innovators and reduce barriers to working with the Department of Defense.

One is the Technology Vision released in February, which prioritizes key Pentagon areas such as robust AI, space, advanced computing and software. Secretary Shu asked Congress to empower small innovators through a comprehensive Small Business Innovation and Research (SBIR) grant process to improve pilot programs and increase their chances of becoming record-breaking programs. This is one of several ongoing efforts to lower systemic “Appendix C” barriers to promising programs.

In the most recent “C” Congressional Budget, the Biden administration proposed increasing the Department of Defense’s level of funding for research, development, technology, and engineering by 9.5% in fiscal year 2012 compared to its 2023 budget. If Congress passes it, it will mean a significant effort to build on the measures passed by Congress in the Fiscal Year 2012 National Defense Authorization Act (NDAA) and the FY12 Budget to promote modernization and technology adoption.

The FY22 Act specifically authorized and funded plans by the US Department of Defense to lower barriers to technology adoption and provide additional funding for SBIR software and programs. For example, in FY22, NDAA Section 833 DOD commissioned the development of a pilot program to implement unique mechanisms for acquiring new technologies. Meanwhile, Section 834 mandates accelerated procurement and deployment of cutting-edge technology—both aims to address the speed problem and ease the pain of Schedule C as funding levels rise in FY23.

Members of Congress and staff are still hearing about the lack of planned funding from Silicon Valley startups at the end of the SBIR funding cycle, but Congress, they say, is questioning taxpayer oversight and accountability for such funding. Rapid innovation must balance success. They don’t write blank checks. Thus, Secretary Shu’s request to Congress for an extension of the SBIR cycle is significant.

unintended consequences

As Congress and the Pentagon continue to address the 4Cs, they must refrain from creating new problems. For example, when extensive spending and powers on software and new technologies were transferred, Congress introduced new reporting requirements to explain how the money was used, which in some cases hindered innovation. As one Department of Defense program director said, “Now I have to provide quarterly quantitative and qualitative progress reports to include comparisons of similar programs. thanks but i will stick with it [traditional programs] And focus on delivering products, not reports.” The new burden of accountability can greatly influence intentions and create cultural resistance to new actions among respected but overworked program managers. There must be a balance between “oversight” and “free for all”. Check out this place.

the gap remains

A recent report from consulting firm Mater explains why adding more money to the SBIR grant process and expanding capacity is not a complete solution to the problem of rapid technology adoption. In short, all defense procurement is based on a formal requirements process, a lengthy Pentagon process that explains what the military needs and why, and related procurement and budgeting processes that determine how much, how, and when they can purchase. If some new technology does not meet the requirements and the budget process, it will be difficult for the Pentagon to fund and deploy it.

Current processes often pit program and contract managers against innovative teams and end users who now need cutting-edge technology—a dynamic that makes it easier to maintain the status quo. To ensure technology adoption, these formal processes need to be reformed to ensure progress stays in the right direction. It is one thing to develop or test new technology, it is another to see it as an urgent need, and quite another to put it into a formal procurement cycle to scale the world’s largest and most complex military forces and their networks.

Authorization for operations (ATO) is a major hurdle for both startups and end users. If a company’s software or hardware is considered secure on one military network, why isn’t it secure on another? Companies often have to go through separate approval processes for each Pentagon office, branch, or agency. By enabling more efficient use of cloud resources, technology adoption can be simplified without becoming a security issue. It is clear that more work needs to be done to address the challenges of ATO if the new technology is to scale at the speed and levels the Pentagon leadership is aiming for.

The US Government is clearly aware of the significant national security and financial obligations to rapidly deploy the most innovative and applicable commercial/dual-use solutions in Silicon Valley. But as the saying goes, “Rome was not built in a day” and it will take constant effort to close the gap and minimize unforeseen consequences. Startups must continue to actively work with the Pentagon and Congress to report specific examples of their pain points and come up with creative ideas while adapting to a corporate, regulatory, and contract culture that is very different from the valley. Working together to achieve success, the Pentagon and Silicon Valley are capable of almost anything, including defending the free world from the most dire existential threats.

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