The Committee is aware that distributed ledger technologies, such as blockchain, may have potentially useful applications for the Department of Defense, which include but are not limited to distributed computing, cybersecurity, logistics, and auditing. Therefore, the Committee encourages the Under Secretary of Defense (Research and Engineering) to consider research and development to explore the use of distributed ledger technologies for defense applications.
That was the House Appropriations Committee report for FY21. HT: Matt M. A couple initial reactions.
First, the Appropriations Committee is directing USD(R&E) to study blockchain in a number of areas, but gives them no funding to go do it! That’s what Appropriators are supposed to do — decide on funding priorities! The signal is that blockchain is important, just not important enough.
Second, it’s interesting that the committee mentions “auditing” as a use-case for blockchain but not “appropriations.” Auditing through blockchain means turning over dozens of accounting systems throughout the DoD onto the system. And then agencies don’t only transact with each other, but with contractors. So contractors will have to receive some DoD-token and then exchange it for dollars? Or will that act as the first link in the logistics supply chain?
At any rate, that’s a huge effort right there. Putting appropriations on a blockchain makes more sense because its relatively self-contained within the government, and can help clear up all the interdepartmental transfers (MIPRs). Not only is it lower hanging fruit, it (a) provides real-time insight into funding obligations; and (b) sends a signal to the agencies that Congress is actually on board with blockchain. Unfunded studies is the opposite signal: blockchain is interesting but in no way a real priority.
By the way, former Acquisition Talk podcast guest Joel Neidig’s blockchain company SIMBA Chain received a $9.5 million contract from the Navy for secure messaging. That was through a SBIR Phase III award, which is sole source by the way!
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