DOD looks to DIUX for the future of acquisition

(Editor's Note: This article first appeared on FCW.com)

The Defense Department's innovation shop is the great hope of true acquisition reform, according to the department's top acquisitions executive.

Under Secretary of Defense for Acquisitions, Technology, and Logistics Ellen Lord, who testified before the Senate Armed Services Committee hearing on Dec. 7, repeatedly mentioned the Defense Innovation Unit Experimental as a shining example of how the DOD should be tackling acquisitions reform and is hoping to scale up the organization's successes, reducing procurement times and ideally saving a lot of money.

"Our goal is to look at where we've had successes with DIUx, with SCO [the Strategic Capabilities Office]...because we think that they've demonstrated the right behaviors," Lord said. "We're looking at what the Rapid Capabilities Offices have done."

"And frankly," she added, "as we organize AT&L into A&S [acquisition and sustainment] and R&E [research and engineering], what we're doing is basically trying to scale the behaviors, the processes or the lack thereof that we've seen in these different groups."

Lord, who also mentioned leaning on the Defense Innovation Board and setting up roundtables with software companies to tap into Silicon Valley resources, said the DOD plans to cut acquisition time of major projects that have software and hardware capabilities down to 12 months. Currently, 30 months is more common.

Lord said that she and DIUx head Raj Shah had talked about leveraging DIUx methods to bring more small businesses in the fold with DOD.

She said DIUx has secured 60 contracts with startups using other transaction authorities to circumvent the traditional acquisition process, but that there were funding restraints regarding the Small Business Innovation Research (SBIR) program. Lord didn't offer any specifics on that matter.

Overall, her message meshed with that of Shah, who previously said DIUx would lead "agile culture change" and "getting the cultures and incentives right to empower contracting officers to feel like they can do that."

Her forecast also largely aligned with Sen. John McCain's (R-Ariz.) call for the DOD to acquire materiel more rapidly.

In his opening remarks, the Arizona senator said the ways of "DIUx, the Strategic Capabilities Office, and the Rapid Capabilities Offices should become standard practice, not work-arounds to the regular system. And we need these innovations for Major Defense Acquisition Programs, not just Science and Technology efforts."

Time will tell if McCain will be satisfied with Lord's plan to put DIUx at the fore of reform, as the senator seemed unimpressed with the organization's accomplishments to date. When it was mentioned that DIUx is now two years old, he said flatly: "That's not a lot of progress."

The committee also drilled the other witnesses -- who included Army Secretary Mark Esper, Air Force Secretary Heather Wilson and Navy Assistant Secretary for Acquisition, Research and Development James Geurts -- on bringing experimental technologies to bear faster.

Sen. Elizabeth Warren (D-Mass.) stressed that reorganization of ATL could widen the "valley of death" for capabilities on their way from the lab to field.

"I think having a senior leader focused on future technology is incredibly important, I support that," Warren said. "But one of the real problems in our system right now is that we struggle to convert promising new technologies in the lab into the field. … I am worried that splitting oversight of R&D from acquisition is going to make this problem even worse."

President Donald Trump recently nominated former NASA head Michael Griffin to be to be DOD's under secretary for research and engineering. Lord is widely expected to shift into the into the acquisition and sustainment post when the restructuring of AT&L is formalized.

Lord attempted to address Warren's concern but outlining a three-part process to transition over the next two years. That plan includes getting capabilities further along in the lab before engaging acquisitions, streamlining acquisition methodologies and sharing funds between the acquisition and research sides to facilitate communication.

For acquisitions, she said DOD needs to use the "simplest methodology possible to get things on contract so we're not held up in this 'do loop' where you want to do something but you can't get it on contract." She added that other transaction authorities were particularly "germane" to this new outlook.