How to Loosen Up a Rigid Acquisition System

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The Defense Department’s longstanding culture of internally sourcing and acquiring the best, most innovative capabilities is mostly dead; with the notable exception of some highly classified programs, commercial entities now drive leading edge technology and its refresh rate, creating a need for changes to the legacy acquisition culture.

The department needs to move to a system featuring broadly written requirements describing what it wants to do to encourage and incentivize companies from a broad spectrum of America’s commercial sector and universities to compete for contracts based on existing and technologically possible solutions. Accomplishing this, though, requires the department to embrace acquisition risk in ways it has been reluctant to do.

First, the Defense Department needs to restructure its requirements process to address gaps in its acquisition system that constrain broad-based innovative solutions. It is simply not discovering innovative solutions it could rapidly acquire to dominate contested environments where military applications of emerging technologies may determine winners and losers. Why? Its legacy acquisition system is outdated and closed, with incentives that drive some current participants to resist change. Without change, however, the U.S. military will lose its technological advantage in the coming years.

Historically, the Pentagon could develop strategies and plans assuming its forces operated the most effective weapons systems because it funded most of the research and development that led to new technology. It also employed scientists and engineers who could operationalize new technology for warfighters. The Defense Advanced Research Projects Agency provides a great example: scientists and engineers leveraged Pentagon-funded R&D and found partners in industry who could manufacture/deliver specific capabilities from innovation breakthroughs. This collaborative effort has worked for more than 50 years.

Today, near-peer competitors embrace a commercial-based model that leverages new technology developed by the private sector; meanwhile, the Pentagon limits participation in acquisition by so narrowly defining the requirements in capability development documents that most U.S. companies cannot compete.

Adding to the system’s rigidity, Congress lacks incentives to disrupt the current process because traditional defense companies’ existing offices and manufacturing plants support well-paying jobs while future jobs, and thus constituents, by definition don’t yet exist.

An unintended consequence is traditional players have the resources, knowledge and structure necessary to master the existing acquisition policies, processes and bureaucracies, while most nontraditional companies see significant barriers to market entry. More risk is needed in the acquisition process now to drive down operational risk during future conflict.

So what are the mechanisms by which the Defense Department must restructure this system? With congressional support, it must significantly restructure and overhaul the requirements process to drive the broadest pool of competitors to participate in its procurement process. It must adapt an open, competitive system that spurs collaboration and encourages innovative nontraditional companies to leverage their commercial investments to deliver war-winning capabilities.

"Simplifying and broadening requirements alone will not spur innovation."

Simplifying and broadening requirements alone will not spur innovation. The department must also encourage traditional and nontraditional companies throughout the nation to engage and to compete in the procurement process, signaling to the Pentagon the innovative capabilities they can offer. Through feedback, the department can then begin to adjust requirements, if necessary, to adapt a commercial solution to a military environment.

Not only will this create organic competition as the open process picks the winner, it harnesses future collaboration between innovation centers in Silicon Valley, public research institutions and successful traditional defense companies who adapt to this process. Increasingly, the Defense Department will need rapid access to new commercial technologies and prototypes that have military application.

The benefits of opening the acquisition system to a broad spectrum of America’s commercial companies and universities are many. It will provide the department with the broadest spectrum of solutions; it will drive the competition it needs but increasingly lacks. New rules should create fairness and simplicity in how contracts are written, cut bureaucratic red tape and increase buying power. The department should minimize programs with narrowly defined requirements to those with very specific security requirements.

Opening the acquisition process will link the Defense Department to new value chains and will offer more diversity to the traditional U.S. defense supply chain, with the potential of increasing and sustaining high-end U.S. manufacturing. Above all, reducing requirements barriers incentivizes nontraditional entities to work with the Pentagon instead of doing commercial work with near-peer competitors.

Developing acquisition policies and processes to encourage broad commercial sector competition is the only reasonable strategy for the U.S. military to maintain its technological advantage.

In order to successfully support the warfighter in a time of rapid technological change, the Defense Department needs to restructure its current bureaucratic process to ensure service members fight with the best, most capable weapons systems. Adversaries have already adapted to the new reality; the department must evolve or be at significant risk in future conflicts.

Christian Larsen is a legislative research associate on the NDIA Policy Team. He can be reached at clarsen@ndia.org. Rachel McCaffrey, executive director of Women In Defense, contributed to this column.

Topics: Acquisition, Acquisition Programs, Defense Contracting, Defense Department