Pentagon should expand Defense Innovation Unit’s role, experts say

WASHINGTON — Former defense officials and industry executives are calling on the Pentagon to expand the influence of its commercial innovation hub to make it easier for the military to buy off-the-shelf technology.

The recommendation comes from the Atlantic Council’s Commission on Defense Innovation Adoption — a panel of defense experts convened to consider how the U.S. Department of Defense can better integrate new technology into its arsenal.

“In our time serving in the Defense Department, we have found that the United States does not have an innovation problem, but rather an innovation adoption problem,” the commission said in an interim report released April 12 by the Washington, D.C.-based think tank. “Our nation leads in many emerging technologies relevant to defense and security — from artificial intelligence and directed energy to quantum information technology and beyond. But the DoD struggles to identify, adopt, integrate and field these technologies into military applications.”

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The Defense Innovation Unit, a Silicon Valley-based organization created in 2015 to champion commercial technology integration within the Defense Department, has had success transitioning capabilities from non-traditional defense companies for use by the military services. However, its former leader, Mike Brown, pointed to a lack of support from senior Pentagon leaders.

With that in mind, the group called on DoD to increase DIU’s role in shepherding commercial technology into the department by increasing its budget, tightening its relationships with the military offices that buy and develop defense capabilities and positioning it as an innovation and technology adoption leader.

“DIU should be resourced and empowered to broaden the defense ecosystem by robustly engaging start-ups, nontraditional vendors and capital market players,” according to the report.

To increase the organization’s technology transition rate, the commission — which includes former Defense Secretary Mark Esper, one-time Pentagon acquisition executive Ellen Lorde and Michelle Flourney, a past under secretary of defense for policy — recommends DIU work closely with the military services to make sure they’re taking advantage of commercially available weapons and other enabling technology.

Direct report

The Pentagon is on a path toward growing the agency’s influence. Defense Secretary Lloyd Austin announced April 4 the DIU director will no longer report to the undersecretary of defense for research and engineering but will instead answer directly to him.

The report also calls for DIU to partner with Under Secretary of Defense for Acquisition and Sustainment Bill LaPlante and other procurement officials to streamline the process for buying commercial capabilities, making it easier for companies to work with the government.

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“The team will reinforce ‘buy before build’ commercial practices in the early phases of programs by baking it into acquisition strategy templates and program reviews,” the report states. “It will also collaborate with defense industry, capital markets, and Congress to develop a broader set of rapid funding tools and approaches to demand signals consistent with the speed of commercial innovation cycles.”

DIU and the Pentagon’s acquisition leaders should publish a “commercial pathway or guide” for how programs can integrate technology from non-traditional companies by the end of 2023, the commission states.

Reducing innovation ‘lag time’

The DIU recommendation is one of 10 proposals included in the commission’s interim report. The ideas are meant to inform Congress and Pentagon leaders as they make policy and budget decisions in the coming months. The panel intends to issue a final report in September to expand on the initial reforms.

Several recommendations involve changes to Pentagon business practices and budgeting processes, including its long timelines for transitioning technology from demonstration to production.

One proposal aims to reduce that gap, noting that even after successful technology demonstrations, it often takes two to four years for DoD to buy the capability. The commission recommends Congress establish a $250 million fund in the fiscal 2024 defense spending bill that the services can use to “facilitate the acceleration and scaling of novel capabilities into the hands of the warfighter.”

“This will significantly shorten the traditionally long lag times for successful vendors to receive funding while DoD finalizes requirements, funding and contracts,” the commission said.

The panel also called out the Space Development Agency, an acquisition organization within the Space Force created to launch large constellations of small satellites on rapid timelines — doing in just over two years what it would take a more traditional organizations as long as 10 years to accomplish.

SDA should be a model for speedy acquisition practices that draw on commercial technology to meet requirements, the commission writes. It recommends that LaPlante form a team to examine the agency’s success and create a framework that other acquisition offices can replicate.