Earlier this month, two Senate subcommittee hearings addressed R&D and innovation at the Defense Department. Witnesses praised DOD’s existing innovation policies and department laboratories’ special administrative authorities. But they pressed for better access to military construction funds and described the administrative barriers that prevent lab leaders from fully using their authorities.
On May 3, the Senate Defense Appropriations Subcommittee and the Senate Armed Services Emerging Threats and Capabilities Subcommittee each held a hearing on R&D at the Department of Defense. Their objective was to lay groundwork for the fiscal year 2018 versions of the two major annual defense bills: the National Defense Authorization Act (NDAA) and the Department of Defense Appropriations Act. At the hearings, witnesses embraced DOD’s efforts to enhance innovation but emphasized the need for changes that they said would free R&D and technology acquisition from overly cumbersome administrative requirements.
Appropriators review DOD innovation policy
At its hearing, the Appropriations subcommittee focused on the DOD’s current innovation policy, generally referred to as the Third Offset Strategy. The strategy’s goal is to improve DOD’s ability to develop and acquire a variety of advanced technologies that will enable the U.S. to maintain superiority in conventional combat operations.
Although the Third Offset concept is strongly associated with former Defense Secretary Ash Carter, two of its key standard bearers are still with DOD and testified at the hearing: Deputy Secretary Robert Work and Strategic Capabilities Office (SCO) Director William Roper. Steve Walker, the acting director of the Defense Advanced Research Projects Agency, also testified.
For the most part, discussion concentrated on the role of SCO and DARPA and on particular R&D projects, but there were also updates on some ongoing policy issues. Notably, the Defense Innovation Unit Experimental (DIUx), which partners and contracts with companies and universities in regional innovation hubs, had its funding authorization zeroed out in the fiscal year 2017 NDAA and was granted only one-third of its $30 million request in the fiscal year 2017 appropriations law signed this month. Work, though, argued that DIUx should be fully supported, saying,
DIUx was an experiment, and we are very, very pleased with the outcome. And the more money that we can convince Congress to be able to put in this to allow us to exploit, the better. Right now, quite frankly … not all four of the [House and Senate Appropriations and Armed Services] committees are as equally supportive of the DIUx concept. We hope in FY18 we’ll be able to convince all four of the committees on just how righteous it is.
Work also addressed the NDAA’s direction to elevate the department’s head of research and engineering from the assistant secretary to the under secretary level. DOD had protested the provision before Congress passed the bill, but Work spoke positively of the final outcome, saying that the new under secretary would “look across the entire portfolio and make sure that we have a coherent S&T program and really focus a lot on rapid prototyping.” He said that DOD was set to begin engaging with Congress on the issue imminently, and that the department hoped to implement the change in advance of the NDAA’s February 2018 deadline.
Witnesses say labs lack access to facility improvement funds
The same day as the Appropriations subcommittee hearing, the Armed Services subcommittee invited four former administrators within the DOD research enterprise to testify: former Deputy Assistant Secretary of Defense for Research Melissa Flagg; the former director of the Engineer Research and Development Center (ERDC) of the U.S. Army Corps of Engineers, Jeffrey Holland; former Naval Research Laboratory (NRL) Director of Research John Montgomery; and the former executive director of the Air Force Research Laboratory, Ricky Peters.
The witnesses reported that it remains difficult for DOD labs to obtain military construction (MILCON) funds, which prevents them from addressing a large backlog of deferred maintenance and facilities recapitalization projects. Montgomery explained that DOD’s Sustainment, Renovation, and Modernization Model “provides 40 percent less for research and development establishment in DOD than it does to maintain the public restroom. So, the office building called the Pentagon gets about $8 a square foot per year. The Naval Research Laboratory … received in this model at most $2.60 a square foot.” For this reason, he observed, NRL can obtain state-of-the-art equipment but must install it in antiquated buildings.
Holland expressed his appreciation that last year’s NDAA raised the limit from $4 million to $6 million for labs’ use of discretionary “Section 219” funds for “minor” MILCON projects, which are simpler to initiate than more expensive projects. He also said there is a “labyrinth of implementation issues” that prevents ERDC from taking advantage of the provision in the fiscal year 2014 NDAA that allows labs to bank Section 219 funds from year to year for infrastructure projects.
At the appropriations subcommittee hearing, Deputy Defense Secretary Work said that labs may soon receive some infrastructural relief, reporting, “You’ll see when we drop the [fiscal year 2018] budget, we are putting more money into facilities.” The budget request is scheduled for release on May 23.
Lab directors hindered from fully using administrative authorities
The Armed Services subcommittee also addressed lab directors’ administrative authorities. The witnesses suggested new special authorities that could be useful. Much of the discussion, though, revolved around the difficulties that directors encounter using the authorities they have — an issue also raised in the Defense Science Board’s recent Defense Research Enterprise Assessment.
The witnesses, who as former officials could speak more candidly than sitting officials, reported that they had felt strong bureaucratic pressure not to use certain authorities. They said that there was a particular fear that, without absolutely clear policy guidance, the use of authorities could be challenged as an impropriety. Flagg was especially animated about her experiences with DOD legal constraints, saying,
I was horrified when I sat down with [Director of Defense Procurement and Acquisition Policy Claire Grady] and learned about the personal criminalization of taking risks in contracting, how they are publicly shamed for taking risks. And I think you’re never going to encourage someone to take risks if you tell them that if you do and somebody sues you, you may wind up on a website by name or you might wind up going to jail.
As with MILCON, the witnesses testified to DOD’s propensity to make contracting and other activities conform to DOD-wide policies that are not appropriate to R&D institutions. On this point, Flagg remarked, “Right now there is more of a focus on controlling your little pocket and making sure that nobody gets special treatment and everyone is equal and that the lawyers never tell you you’re going to go to jail than there is on getting the mission done, and it’s a problem.”