For the first time since Better Buying Power was launched in 2010, spurring innovative new technology is one of the bedrocks of the strategy.
Better Buying Power 3.0, the newest iteration of the guidance, was released April 9, and the hope is to help the Defense Department buy weapons systems that are not only affordable, but superior to anything else on the market. That will mean forging closer ties with industry, said Frank Kendall, undersecretary of defense for acquisition, technology and logistics.
The original goal of BBP— to do as much as possible with the resources that are available—is just as important in this fiscal environment as it was five years ago, Kendall said.. But that cannot come at the expense of the United States’ technical edge, especially as competitor nations sink money into their own military budgets.
“The change here is to go in the direction of technical excellence, innovation and technical superiority, and to put that in the forefront of our thinking in a way we have not as much as we probably should have in the last few years,” he said.
Defense budgets have been flat since fiscal year 2012 despite continued demand around the world, said Deputy Secretary of Defense Bob Work. Funding largely has gone to paying personnel, keeping them ready to deploy and sustaining existing equipment.
“Something had to give, and the place where it gave was in our modernization accounts,” Work said. “For the last three years, our department has been chronically under-investing in weapons and new capabilities, and that is something that really, really bothers us here in the department.”
The military wants to use the newest, most innovative commercial technologies, which are often refreshed more often than their purpose-made counterparts. Many of the new tech that will form the backbone of the Third Offset Strategy currently under development by the Pentagon—such as robotics, autonomous guidance systems, big data, biotechnology, advanced computing and 3D printing —will come from commercial industry, Work noted.
Before it can take full advantage of commercial products, the Pentagon must remove barriers to buying them, the BBP 3.0 guidance said. To help move the department toward that goal, the Defense Department will develop by July 2015 a handbook of best practices for interfacing with commercial businesses under current regulations. It will also assess where laws and regulations could be changed to facilitate more access to commercial technology.
“We’re going to try to make it easier for people to do business with us, use some of the creative ways we have of doing contracting,” Kendall said. “We’re going to do more outreach to commercial firms. We’re going to take advantage of things like the small business innovative research program to do a better job there.”
Another change in policy calls for increased government oversight of companies’ internal research and development funding. The Pentagon has had little power to supervise IRAD dollars since the early 1990s, when legislation removed that authority. Kendall now wants companies to have a government sponsor sign off on IRAD work and to file a report to the department at the completion of the project.
Kendall said that the industry executives he spoke to about the change found it to be reasonable. “The amount of regulation I’m talking about is minimalist, as far as I’m concerned,” he added.
The Pentagon will also propose laws that would deter companies from using IRAD expenses as a means to reduce evaluated bid prices in competitive source selections, the guidelines stated. That’s been a growing concern for the department, as some companies have shown more interest in furthering their own intellectual property than technology, Kendall said.
Open architecture continues to be an emphasis of the BBP strategy. The military needs to be able to respond to a rapidly changing threat environment, and thus needs to buy modular weapons where new computing equipment, sensors or guns can be easily inserted, Kendall said. The easiest way for the government to do this is to own the interfaces and be able to control the design of a weapon system, so it can recompete for new subsystems when needed.
In the past, this has been a sticking point for industry, which wants to safeguard its intellectual property and keep competitors from using it to gain an edge. While the Defense Department tries to understand companies’ IP concerns, it is more attractive to buy a product where it can control the interfaces, Kendall said.
“We’re trying to do this in a way which is respectful to the industry’s rights, but at the same time, protects the government’s interest,” he said. “I think we’re doing a much better job of that.”
The Air Force’s long range strike bomber is one example of a future technology that will be built with modularity in mind, Kendall said. Part of the Pentagon’s acquisition strategy for this top secret program is to recompete for new components and subsystems that can be quickly installed on the platform.
The Defense Department needs to do better at communicating with industry, Kendall said, so BBP 3.0 includes a mandate for the services to share draft requirements as early as possible. As part of that initiative, the assistant secretary of defense for acquisition will review DoDI 5000.02 to determine if any regulatory change is needed to implement that new policy, the guidance stated.
BBP 3.0 calls for better use of the government’s own research and development facilities, including more long term R&D planning and an increased use of prototyping, Kendall said.
It also orders the department to cut down bureaucratic paperwork that hinders its own program managers and increase the use of incentive-type contracts when it makes sense, he said.