At a time when political consensus on anything can be hard to reach, there is general agreement that the United States military must modernize to fend off a rising China and meet other national security needs.
Bringing defense capability into the future usually generates thoughts of new weapons. However, much of the needed modernization must come from changes in how the Department of Defense operates: from process to concepts of operation to digital connectivity.
The Pentagon still has to pay the upkeep of the planes, ships, vehicles, artillery and satellites it has been using for decades. But even these weapons could be made more effective if they were upgraded, connected, and capable of using artificial intelligence tools to aid decision making.
The seemingly immense changes necessary to modernize how DoD operates can be made more manageable by adopting an acquisition approach built around evolutionary innovation. This will require leadership, cultural change, and funding lines that are flexible and responsive to rapid iterative development, testing and fielding.
Evolutionary innovation follows a simple formula: experiment with diverse options, select the most promising candidates and scale the results.
Currently budget and acquisition processes estimate the lifecycle cost of a system up front. This model was intended to foster careful consideration of important decisions and stabilize planning.
It is not as effective today. Committing to a set plan creates incentives for program managers to paint a rosy picture of performance so they can hold on to funds, even if they know there are better alternatives.
Managers become beholden to an obsolete plan rather than explorers of better options. This, in part, leads to the “valley of death,” where promising new capabilities die off waiting for funding that won’t be available for years.
To incentivize exploration, the department needs modest but stable lines of funding. They should not be dedicated to a specific program or weapon system. Funds that support the integration of existing systems, insertion of new technologies, and creation of new operational concepts would allow the department to competitively improve warfighting outcomes now, rather than waiting years for new weapons systems.
Important changes could be made during the fiscal year 2023 program and budget progress. In addition to modernizing better weapons systems that have longer ranges, the department could create programs for critical needs like joint force interoperability or the tracking of adversary force locations. These programs would have clearly defined quantitative long-term goals for performance, but would not predict how each requirement would be met.
Under this approach the program manager and industry would pursue solutions that could change over the years. For example, the use of new commercial satellite constellations designed to provide a mixture of sensing sources to track force locations, would continue to improve over time. This creates powerful incentives for the defense industry to think of ever-better ways to solve important problems instead of defending their legacy programs.
This process shouldn’t be simply an exercise of trust. Program managers would report in real time how they applied funding, what ideas worked, and which ones failed. Improvements to operational outcomes and value to those fighting would be measures of success.
To seize the opportunities of an evolutionary approach to modernization, the Pentagon needs three things.
First, it needs stable lines of funding that can accommodate the open-ended nature of an evolutionary development. The department’s newly proposed Rapid Defense Experimentation Reserve is a step in the right direction. To do better than previous attempts, it would need to be structured to provide current year funding for any type of appropriation aligned with joint and combatant command needs.
Second, it needs business systems that can track metrics for information-age military capability to keep up with the speed of continuous development and enable effective oversight. The Advancing Analytics capability, initially developed to support the Department’s full financial statement audit, has the potential to meet this need when fully implemented.
Third, it needs congressional support to modernize the Planning, Programming, Budgeting and Execution (PPBE) process to match acquisition reforms made over the last decade with agile, responsive and transparent funding not tied to a specific stage in development or fiscal year.
The challenges ahead — modernizing the way requirements are defined and the way capabilities are developed, funded, integrated, tested and fielded to compete in time — are daunting. But, with aggressive and creative leadership from the new administration, close partnership with industry and congressional support and guidance, the U.S. could unleash an evolutionary advantage for innovation built on core principles of experimentation and transparency.
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