The services’ acquisition officials on Thursday told a House panel that a flexible, “real time” funding account would enable the military to make better use of prototyping and experimentation.
In the early stages of a weapons program, prototyping and experimentation are an invaluable way to introduce game-changing new technologies and drive down their risk before committing large amounts of money, officials said during a House Armed Services Committee (HASC) hearing. The problem is that the current budget process requires acquisition officials to structure funding requests years in advance, meaning that planned prototyping and experimentation may not reflect the latest operational challenges or technological leaps.
“I’m not coming here asking for money, but what I’m describing is that with the budget process, if we have an emerging issue today, we’ve missed the train for PB (president’s budget) 2017,” said Sean Stackley, assistant secretary of the Navy for research, development and acquisition. “In fact, we’ve already submitted the POM (Program Objective Memorandum) issue sheets for PB 2018, so an emerging issue may or may not make the 2018 budget request.
“We’re sitting here in early 2016 without dollars that are available to address an emerging issue or a critical technology that creates an opportunity unless we have something like the entire department aligned to reprogram” funds from one area of the budget to another.
Richard Lombardi, the acting assistant secretary of the Air Force for acquisition, agreed that the Air Force also cannot predict years ahead which areas to invest prototyping and experimentation funds.
“If there’s more flexibility…that will allow us to start activities with less specific details, that would be very helpful for us,” he said.
Rep. Mac Thornberry (R-Texas), who has made acquisition reform a priority during his tenure as HASC chairman, indicated that he would be open to changing the law to make such funding more agile.
“If you think about how quickly technology changes and how quickly the threats change, you’ve got to be able to respond at a similar pace, and we can’t,” he said after the hearing. However, Congress will have to figure out how to balance the services’ needs with its own oversight responsibilities. “I think we can,” he added.
Other members of Congress were less supportive, voicing concerns that such a mechanism could lead to abuse of taxpayer funds.
“You are asking for less restrictions or requirements for how you spend the money,” said Rep. Loretta Sanchez (D-Calif). “I would see that as the American people seeing a lot more failures from both our Pentagon and our military industrial complex.”
Rep. Jeff Miller (R-Fla.) questioned whether it was that difficult for the services to reprogram money within the budget.
“I am wondering why you feel the need for flexibility,” he said. “I understand for rapid acquisitions. … [But] there probably was a reason at some point that Congress kind of stovepiped the money and the way it comes to you.”
About 20 years ago, the Pentagon had a flexible management account, called the M account, which the department could use as a reserve, Stackley said. Two things led to its demise: widescale congressional disapproval on how that money was managed, and fiscal pressures that led the department to prioritize other accounts.
After the president’s fiscal year 2017 budget is released, service officials intend to brief lawmakers on a proposed process that will increase the flexibility of prototyping and experimentation funding while also giving Congress oversight over how such money is used, he said.
Lombardi added he believes the services can alleviate congressional concerns.
“I think it’s very easy for us to come back together with a plan that will allow for all of us to have the flexibility that we need and the oversight for both the authorization and appropriations committees to make sure that we are executing the funds in a logical and a very meaningful manner,” Lombardi said.
Over the course of the hearing, Stackley, Lombardi and Lt. Gen. Michael Williamson, the principal military deputy to the assistant secretary of the Army for acquisition, logistics and technology, called for improved relations with the commercial sector, particularly nontraditional players in the defense industry with cutting edge technologies.
However, all three officials admitted that such companies continue to be hesitant to work with the Defense Department because of perceived bureaucratic overreach and the possibility of being forced to surrender intellectual property (IP).
“There is this myth that they’re going to lose their IP, and case by case you have to have that discussion. We have to do a better job of communicating,” Williamson said. The department also must recognize why companies preserving intellectual property rights is so important. “There are some cases where there have been specific algorithms, specific technologies that they’re bringing that they should protect, and if you want it, you should pay for it.”