JUST IN: Flexible Defense Funding Needed to Keep Pace With Rapidly Changing Tech

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SAN ANTONIO, Texas — Technologies such as artificial intelligence and software-based products are “rapidly iterating,” and the Defense Department’s current acquisitions process isn’t going to keep up, one service official said.

The gap between an idea and when it falls into the hands of warfighters can be anywhere from three years to a decade or more, a reality William Nelson, deputy assistant secretary of the Army for Research and Technology, said is too slow for certain technologies.

“I can’t possibly tell you sitting here right today, what technology needs to look like in ’26,” what it will deliver, and how much it’s going to cost," Nelson said at the National Defense Industrial Association's Science & Engineering Technology Conference May 23.

He spun an anecdote of a creative pen — if the Army said they needed it right now, “the first dollar I can put on that is in [fiscal year] ’26,” he said. “I’m not kidding.”

The Defense Department is currently executing FY ’23, ’24 is “on the Hill,” and ’25 is “already buttoned up,” Nelson said. “This isn't just an Army problem. That's an all-the-services problem," he said.  There is a need for innovative flexible funding, he added.

Nelson said he has been working on “both sides of the House and in the Senate” on putting flexible funding in place to “be able to put at ideas in certain technologies that are advancing faster than the process.”

“We’re not going to build a tank in that kind of timeframe,” he said. “We’re not talking about large-scale acquisition types of programs, but things like artificial intelligence, things like software-based products, cyber,” he said.

Nelson said the process “that they all live in” requires a level of clairvoyance, utilizing a system that asks for a prediction of what technology needs will be three or four years out.

“We can’t possibly be anywhere accurate in that,” he said. In some cases, they get it right and make engineering guesses, using judgment to do the best they can in the situation, he added.

“What we’re hoping for is some flexible funding to allow us to put those rapidly changing technological ideas that are really, really important for us — to grab a hold of them quickly.”

Nelson said there is “a lot of support for this on the Hill, but it’s in the mechanisms and how we go about doing that.”

He wouldn’t dare ask Congress for a blank check, but is asking they work through the mechanisms in a responsible way and build confidence that “we can execute some of those programs and it builds trust and stability in the system.”

While there is much work to be done, Nelson also had some good news from the contracting world, stemming from the centralized SBIR Contracting Center of Excellence, stood up by the Army in 2021.

Nelson said he was “very proud” of the center, established to streamline contract execution across the Army’s Small Business Innovation Research program, making it easier and faster for U.S. companies to work with the Army.

Made up of 30 contracting specialists all working remotely, Nelson said the center is able to contract 75 percent of SBIR awards within 45 days.

“And for many folks, small businesses cannot afford to wait while the Army works through its complex contracting timelines,” he said. They started in a 180 to 250 day timeline for executing contracts, and are now down to 30 to 45 days, he added.

He attributed their success to the fact that “it’s all they do” at the center. Trying to run a small business contract through any number of Army installations across the country means local contracting commands, and “everything has a priority,” he said. “Everything is important, but not everything’s the most important.”

The competition within the local regional centers is eliminated by “taking all of those into one central area, and that’s all they do,” he said.

Topics: Acquisition, Acquisition Programs, Budget