Enterprise Challenges
Recommendations For Addressing Challenges
Outdated R&D model
Introduce a new capability portfolio model
1
House Armed Services Committee (HASC) approved an amendment directing the Undersecretary of Defense for Acquisition & Sustainment (USD A&S) to provide a briefing on implementing a capability portfolio model.
Legislative Action
Some Service Program Executive Officers (PEOs) have begun to study implementing a portfolio management model.
Department of Defense Action
Portfolio management models should be more widely considered across the DOD and enabled through congressional legislation.
Further progress to be made
In its interim report, the congressionally directed Planning, Programming, Budgeting, and Execution (PPBE) Commission recommended a systematic review and consolidation of budget line items among the “actions that can be implemented now.” The Senate version of the defense appropriations bill noted that the Army should consolidate Other Procurement Army funding lines.
Legislative Action
The deputy secretary of defense directed the department to adopt all actions (PPBE Commission recommendations) that can be implemented now.
Department of Defense Action
Progress still to be made on consolidating smaller budget line items to allow for greater year of execution flexibility.
Further progress to be made
Long timelines and inflexible execution
Fewer companies providing defense solutions
Valleys of death
Hamstrung workforce
Program-centric acquisition
Cumbersome reporting from DoD to Congress
Limited understanding of emerging technology
Consolidate program elements and budget line items
2
Reset reprogramming authorities to historical norms
3
Empower DIU & modernize the Department of Defense to align with the twenty-first century industrial base.
4
Strengthen existing capital market programs and create new pathways for mission-critical technologies.
5
Increase incentives and reduce barriers for leading technology companies to do business with the Department of Defense
6
Modernize budget documents
7
Establish a bridge fund for successfully demonstrated technologies
8
Realign existing organizations to adopt the Space Development Agency model
9
Modernize JCIDS and service requirements processes
10
Click on a challenge to learn more about its definition.
Click on a recommendation to learn about the legislative and Department of Defense actions taken, and where there is further progress to be made.
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This interactive graphic tracks how Congress and the DoD are tackling these barriers to defense innovation and implementing reform that aligns with the Commission’s ten recommendations. This graphic will be continuously updated based on the 2024 National Defense Authorization Act, defense appropriations bills, as well as the release of the Commission's final report.
The PPBE Commission’s interim report considered several alternatives to modify reprogramming authorities and policies. It seeks further inputs from congressional and DoD stakeholders on its recommendations.
Legislative Action
The deputy secretary of defense directed the department to adopt all actions from the PPBE Commission interim report that can be implemented now.
Department of Defense Action
Congress has not addressed the need to reset reprogramming authorities to historical norms or raising thresholds for reprogramming.
Further progress to be made
House Appropriations Subcommittee for Defense (HAC-D) recommends $1B funding for a hedge portfolio fund run by DIU for smart, affordable, modular, and sustainable systems $220M for helping DIU field capabilities with Combatant Commands. $600M is allocated for agile research, development, test and evaluation, procurement, production, modification, and operation and maintenance.
Legislative Action
Secretary of Defense has elevated the DIU to a direct report. New DIU Director has been given 90-days to provide a plan of action and resource request.
Department of Defense Action
Portfolio management models should be more widely considered across the DOD and enabled through congressional legislation.
Further progress to be made
HASC approved an amendment directing Services SBIR offices to conduct a study on expanding STRATFI programs to help small business seek Phase III awards. SASC 845 Extension of SBIR/STTR to transfer to production. SASC 831 Defense Industrial Base Advanced Capabilities Pilot Program - Public Private partnership with equity. SASC 834 Program on Capital Assistance to Support Investment in DIB. HAC-D directs a report on opportunities for additional strategic capital tools, and other needed resources or authorities that could allow OSC to achieve greater impact.
Legislative Action
DARPA, Army, Navy, and Air Force have allowed majority VC owned companies to participate in SBIR / STTR.
Department of Defense Action
Portfolio management models should be more widely considered across the DOD and enabled through congressional legislation.
Further progress to be made
SASC 805 - Create 3 new CSOs SASC 806 - Reduce barriers of commercial products/services.
Legislative Action
Some Service Program Executive Officers (PEOs) have begun to study implementing a portfolio management model.
Department of Defense Action
More work still needs to be done on addressing the barriers to doing business with the DOD for non-traditional and small companies.
Further progress to be made
HAC-D recommends directing Chief Digital and Artificial Intelligence Officer (CDAO) to submit a report on web interface that can provide access to data described for DIU project reporting to the congressional defense committees and recommends $50M to support this.
Legislative Action
Some Service Program Executive Officers (PEOs) have begun to study implementing a portfolio management model.
Department of Defense Action
More work still needs to be done on addressing the barriers to doing business with the DOD for non-traditional and small companies.
Further progress to be made
HAC-D recommends directing Chief Digital and Artificial Intelligence Officer (CDAO) to submit a report on web interface that can provide access to data described for DIU project reporting to the congressional defense committees and recommends $50M to support this.
Legislative Action
Some Service DIU and Indo-Pacom announce Joint Mission Accelerator Directorate which will include liaison officers from DIU to help Indo-Pacom adopt and scale new capabilities. Deputy Secretary of Defense Kathleen Hicks has announced the Replicator Initiative to field attritable autonomous systems at scale of multiple thousands, in multiple domains, within the next 18-to-24 months.
Department of Defense Action
More work still needs to be done on addressing the barriers to doing business with the DOD for non-traditional and small companies.
Further progress to be made
House Appropriations Subcommittee for Defense (HAC-D) recommends $1B funding for a hedge portfolio fund run by DIU for smart, affordable, modular, and sustainable systems $220M for helping DIU field capabilities with Combatant Commands. $600M is allocated for agile research, development, test and evaluation, procurement, production, modification, and operation and maintenance
Legislative Action
Secretary of Defense has elevated the DIU to a direct report. New DIU Director has been given 90-days to provide a plan of action and resource request.
Department of Defense Action
DOD should study which aspects of the Space Development Agencies model has allowed it to field capabilities faster than traditional acquisition timelines and how to apply that model to other organizations.
Further progress to be made
HASC approved an amendment directing Government Accountability Office to conduct a study on reforming DoD requirements processes.
Legislative Action
Some Service Program Executive Officers (PEOs) have begun to study implementing a portfolio management model.
Department of Defense Action
Further progress must be made on improving the requirements development process to account for available commercial technology and software-centric capabilities.
Further progress to be made
The DoD’s industrial base has shrunk by 40 percent over the past decade, due to both consolidation and exit. This decline stems from multiple causes, including a pivot to fewer more-complex major systems, long timelines, complex regulations, and the high compliance cost of doing business with the DoD. Many start-up, commercial, and international businesses are unable or unwilling to enter the DoD ecosystem. As a result, reduced competitive pressure has increased costs and decreased adoption of innovation.
Definition: Fewer companies providing defense solutions
The DoD’s requirements and acquisition processes were designed for a time when the DoD was the largest funder of global research and development. By 2020, however, the federal government’s share of national R&D had fallen below 20 percent, and yet its processes have not adapted to this new leader-to-follower reality. Today, while many of the most critical technologies are driven by the commercial sector, the DoD struggles to adopt this technology at a relevant speed.
Definition: Outdated R&D Model
Too often, the DoD delivers systems to meet requirements defined more than a decade earlier. It is difficult to insert new technology to effectively respond to dynamic adversary threats, technological opportunities, advances in warfighting concepts, or macroeconomic and supply-chain disruptions, especially within fiscal years. Hardware-centric models ineffectively integrate rapid software updates.
Definition: Long Timelines and Inflexible Execution
The DoD spends billions annually on research and prototypes, yet only a small percentage transitions to production contracts with revenue to sustain operations and scale output. Long timelines for contracts and funding, program constraints, and a disconnected ecosystem are among the transition challenges for companies that have developed viable products or services.
Definition: Valleys of Death
The DoD acquisition workforce is subject to a bureaucratic culture of excessive compliance and oversight, a challenging environment for innovation. Creative problem-solving and measured risk-taking are not often rewarded, and too few individuals with an industry background agree to take senior leadership roles at the DoD.
Definition: Hamstrung Workforce
Defining requirements, securing budgets, and acquiring capabilities are done for hundreds of individual programs. The DoD invests a significant percentage of its funds in complex major systems for which prime contractors offer closed, proprietary solutions. This impedes interoperability and responsiveness to changes in operations, threats, and technologies. Open-system architectures with well-defined interface control documents are rarely adopted, which constrains the ability to insert innovative technology.
Definition: Program-centric Acquisition
Budget justification documents run dozens of volumes and tens of thousands of pages. Document format, detail, and supporting information is inconsistent among military services and agencies. This impedes Congress’s ability to understand program objectives in a timely manner. In turn, Congress does not trust that delegated decisions will consistently result in more rapid technology adoption.
Definition: Cumbersome Reporting from DoD to Congress
The DoD struggles to effectively leverage critical emerging technologies due to a lack of understanding of their state-of-the-art applications among those who generate requirements and draft requests for proposals. As these technologies mature, the DoD is challenged to have meaningful conversations about how to adopt, leverage, and defend against these technologies.
Definition: Limited Understanding of Emerging Technology
Challenges Facing Innovation Adoption In The Department of Defense
Recommendations For Addressing Challenges
Outdated R&D model
Increase incentives and reduce barriers for leading technology companies to do business with the Department of Defense
1
House Armed Services Committee (HASC) approved an amendment directing the Undersecretary of Defense for Acquisition & Sustainment (USD A&S) to provide a briefing on implementing a capability portfolio model
Legislative Action
Some Service Program Executive Officers (PEOs) have begun to study implementing a portfolio management model.
Department of Defense Action
Portfolio management models should be more widely considered across the DOD and enabled through congressional legislation.
Further progress to be made
House Armed Services Committee (HASC) approved an amendment directing the Undersecretary of Defense for Acquisition & Sustainment (USD A&S) to provide a briefing on implementing a capability portfolio model
Legislative Action
Some Service Program Executive Officers (PEOs) have begun to study implementing a portfolio management model.
Department of Defense Action
Progress still to be made on consolidating smaller budget line items to allow for greater year of execution flexibility
Further progress to be made
Long timelines and inflexible execution
Fewer companies providing defense solutions
Valleys of death
Hamstrung workforce
Program-centric acquisition
Cumbersome reporting from DoD to Congress
Limited understanding of emerging technology
Consolidate program elements and budget line items
2
Reset reprogramming authorities to historical norms
3
Empower DIU & modernize the Department of Defense to align with the twenty-first century industrial base.
4
Strengthen existing capital market programs and create new pathways for mission-critical technologies.
5
Increase incentives and reduce barriers for leading technology companies to do business with the Department of Defense
6
Streamline budget justification documents and modernize supporting information system
7
Link operational experimentation to acquisition outcomes
8
Realign existing organizations to adopt the Space Development Agency model
9
Modernize JCIDS and service requirements processes
10
