Smaller firms and companies outside of the defense industrial base are generating much of today’s cyber innovations. Meanwhile, the DoD still turns to traditional defense contractors for most of its IT solutions. While these firms often have good products and are accustomed to supporting the military, they are not the only sources of innovation. If this trend continues, the U.S. military risks becoming reliant on outdated technologies that it cannot secure.
With close to $40 billion in annual IT spending, the DoD dwarfs other federal agencies. What many officials do not realize is that this constitutes only a fraction of the more than $2 trillion of total consumer IT spending. Whereas the DoD can typically request made-to-order items — this helicopter, that parachute — when it comes to IT, it represents just a drop in the bucket. This means that the Pentagon cannot influence IT like it can with traditional weapons systems. As a result, the department often adapts consumer products for its use, rather than procure products optimized for the military. This is like trying to retrofit a heat-seeking missile onto a Cessna airplane.
The defense procurement system was designed to purchase battleships or bomber fleets from the few companies that could produce them. Long procurement cycles and lower profit margins were useful in creating a fair defense market and protecting the American taxpayer from a near monopoly of suppliers.
However, this system also stacks the deck against small companies. Few Silicon Valley start-ups can wait for long a sale or have the expertise to navigate the DoD bureaucracy. This leads some investors to caution small firms against trying to enter the government market.
The solution, however, is simple: the DoD must reform its acquisitions process and improve private sector relations in order to access the latest innovations. Fortunately, Chuck Hagel can help repair the Department’s relationships with the private sector. As a successful tech entrepreneur in his own right, Hagel has experience building a company and responding to investors. He is also known for independent thinking and a willingness to buck the system. By spending more time with investors and entrepreneurs, Hagel can begin to change things for the better. Also, by streamlining the acquisitions process to allow for quicker, more flexible purchases, he can help small firms compete more effectively.
In order for our service members to operate in the information age, they need the best tools that we can provide. By reforming our defense acquisitions process, Hagel can ensure that we continue to have the best equipped military in the world.
McNerney is a former defense official who specialized in cyber policy. He is currently a fellow at the Truman National Security Project.