12 June 2015

Sen. McCain: How to Get Silicon Valley to Help the Pentagon

AMERICA’S MILITARY TECHNOLOGICAL advantage is eroding—and fast.

For the past decade, our adversaries have invested heavily in rapidly improving their militaries to counter our unique advantages. At the same time, the speed of globalization and commercialization means that advanced disruptive technologies are now—and increasingly will be—available to less sophisticated militaries, terrorist groups, and other non-state actors.

Maintaining our military technological advantage is about much more than a larger defense budget or a better fighter or submarine. These things are important, but to give our military the capabilities it needs to defend the nation, the Department of Defense must be able to access innovation in areas such as cyber, robotics, data analytics, miniaturization, and autonomy, innovation that is much more likely to come from Silicon Valley, Austin, or Mesa than Washington.

Senator McCain is the Senior Senator from Arizona and the Senate Chairman of the Armed Services Committee.

In other words, the Pentagon confronts an emerging innovation gap. Commercial R&D in the United States overtook government R&D in 1980, and now represents 75 percent of the national total. The top four U.S. defense contractors combined spend only 27 percent of what Google does annually on R&D. The problem grows worse beyond our borders. Global R&D is now more than twice that of the United States. Chinese R&D levels are projected to surpass the United States in 2022.

Even when the Defense Department is innovating, it is moving too slowly. Innovation is measured in 18-month cycles in the commercial market. The Defense Department has acquisition cycles that can last 18 years. This is due to a defense acquisition system that has been broken for decades. It takes too long and costs too much—and that’s if it actually produces something. According to one estimate, the Defense Department spent $46 billion between 2001 and 2011 on at least a dozen programs that never became operational.

Our failing defense acquisition system is not just a budgetary scandal—it is a national security crisis.

This broken acquisition system, with its complex regulation and stifling bureaucracy, leads many commercial firms to choose not to do business with the Defense Department, or to limit their engagement in ways that prevent the Department from accessing the critical technologies that these companies have to offer. Export controls, security mandates, and Buy America barriers also limit cooperation with our allies and global commercial firms.

In short, our failing defense acquisition system is not just a budgetary scandal—it is a national security crisis.

That’s why as Chairman of the Senate Armed Services Committee, I have made acquisition reform a top priority. In the National Defense Authorization Act for Fiscal Year 2016 (NDAA), a major defense policy bill under consideration in the Congress, my committee has proposed the most sweeping acquisition reforms in a generation. Secretary of Defense Ash Carter called for “rebuild[ing] the bridge between the Pentagon and Silicon Valley” in a speech at Stanford University in April. If passed and signed into law, the reforms contained in the NDAA would take the most important steps to date toward doing just that.

The NDAA incentivizes commercial innovation by removing barriers to new entrants into the defense market. By adopting commercial buying practices, the bill makes it easier for non-traditional firms to do business with the Pentagon. The bill ensures businesses are not forced to cede intellectual property developed at their own expense to the government. Rapid acquisition authorities are expanded to cut through red tape and better support U.S. military operations around the world and address cybersecurity concerns. The NDAA ensures that the Secretary of Defense has the authority to waive unnecessary acquisition laws and utilize alternative acquisition pathways to acquire vital national security capabilities and maintain U.S. technological superiority. The bill also streamlines the process for buying weapon systems, services, and information technology by reducing unnecessary requirements, reports, and certifications. And the NDAA seeks to reinvigorate the acquisition workforce by expediting the hiring of STEM professionals and STEM-qualified veterans.

The bill ensures businesses are not forced to cede intellectual property developed at their own expense to the government.

The acquisition reforms proposed and adopted by the Senate Armed Services Committee are significant. But there is much more work to be done to transform the acquisition system from a Cold War relic to one agile and nimble enough to meet the challenges of a globalized information age.

There are those who say that even with changes like these, our nation’s innovators simply aren’t interested in doing business with the Pentagon. And after spending much of my career in Washington scrutinizing Pentagon business practices, I am not exactly surprised to hear such sentiments. But in the final analysis, I believe the brightest minds will always be driven to solve the world’s toughest problems. These are the problems our military confronts every day. And these are the problems we can solve if we create an acquisition system that enables the Department of Defense to take advantage of the best minds, firms, and technologies that America and the world have to offer.

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