Congress wants to pump the brakes on rapid expansion of the Pentagon’s tech innovation outreach initiative by limiting funding until it receives a detailed report on the unit’s structure and operation.
The conference report on the 2017 National Defense Authorization Act (NDAA) released Wednesday would restrict the Defense Innovation Unit-Experimental (DIUx) to 80 percent of its budget until Secretary of Defense Ash Carter or his successor submits a report on the “charter for and the use of funds to establish and expand DIUx.”
The Defense Department requested $45 million for the fledgling endeavor, which Carter launched earlier this year in Silicon Valley and has since expanded to Boston and Austin, Texas. In half a year, DIUx has launched a dozen contracts worth about $36 million total. Another 15 or so contracts worth $60 million or more are in the pipeline.
Congress remains “cautiously optimistic that the changes to the organizational structure and functions of DIUx could become important tools for the Department of Defense (DoD) to engage with new and non-traditional commercial sources of innovation, as well as rapidly identify and integrate new technologies into defense systems.”
“However, the conferees are concerned that investments made by DIUx to-date were not focused on rapid delivery of much needed game-changing technologies,” the conference report says. The House is expected to take up consideration of the NDAA on Friday while the Senate should consider the bill next week.
Carter and his surrogates within DIUx have lately made the case for continued funding for the effort. They note that it is still young and has already issued several contracts through the “commercial solutions opening” and other authorities that shorten the contracting cycle to as little as 60 days. Whether the effort will win favor with the incoming Trump administration and its pick to succeed Carter remains to be seen.
Bill Greenwalt, a Senate Armed Services Committee (SASC) staffer, said the upper house of Congress largely agrees the program should continue, if only as a “laboratory” for establishing new ways of working with the commercial sector.
“The view from SASC is ‘Yes’” that DIUx should receive continued funding, Greenwalt said Wednesday during a forum hosted by the Center for New American Security in Washington, D.C.
“There’s still learning to be done on what DIUx is supposed to do,” he said. “The way we look at it is someone needs to start driving these acquisitions more.”
Language in the 2017 NDAA details Congress’ concerns that the unit’s customer base is not as diverse as expect and has largely been confined to Special Operations Command (SOCOM), which already has special acquisition authorities.
“The conferees remain concerned that in the Department’s rush to try something new, defense leaders have not taken the time to determine how effective recent organizational and management changes are before seeking a rapid expansion of resources,” the bill says.
Questions also were raised about whether the unit is positioned to ultimately fulfill its goal of becoming a direct link between commercial technology companies and the Defense Department. Existing mechanisms for contracting with commercial firms like the Small Business Innovative Research and Small Business Technology Transition programs, the Department of Defense research laboratories, and other entities that look at technology in classified setting, should also be considered, the bill says.
Congress is “concerned that the Department has found useful mechanisms to identify and engage with new commercial entities, without making demonstrable progress in reducing the acquisition and contractual barriers of entry for these non-traditional providers, as well as all commercial entities wishing to do business with the Department,” the NDAA conference report says.
“Without such progress, the conferees are concerned that these non-traditional vendors will become frustrated over time, as has happened in the past, and will revert back to a posture that, at best, reluctantly partners in defense work, and at worst, actively rejects all work with the Department of Defense because the acquisition system is too burdensome and bureaucratic.”