Mandy Smithberger [POGO]: Something that the department’s starting to emphasize more that I hope congress will support is that we get the intellectual property rights for some of these things because that’s going to really be key to being able to control costs later down the line… I think accountability is just so important and what do you see is that the consequences in program areas that we do not have the IP rights per our contract. So that’s where you get the TransDigm kinds of situations where you get companies that are able to buy the suppliers for these different kinds of [sole source] parts and where we see prices go hugely over cost. We aren’t able to get cost or pricing information that we need to in order to be able to control those costs. We don’t have the kind of acquisition workforce that we need and have them be empowered we’re probably underinvested under investing in the Defense Contract Audit Agency as well. I think if you know that there is going to be someone looking over your shoulder you’re going to be a much better steward.
Roger Zakheim [Reagan Institute]: Just a little bit of disagreement there. I think if we’re trying to modernize the force for the digital era we need to introduce software. Software in the commercial sector is all about maintaining the IP. The way that I think we could incentivize low prices is by having competition in the program of record when it comes to software. I think that’s a much better course of action than trying to own the IP and asking DCAA to enforce. I think that’s failed us when hardware was the rule for acquisition. I would not recommend it when it comes to software.
That was a nice interaction from a HASC hearing, “Non-Governmental Views on the Fiscal Year 2022 Department of Defense Budget.”
The Department is definitely moving towards owning for data and licensing rights to avoid vendor lock in. The question is whether that fear is actually driving away the companies DoD needs most.
I’m still struggling to figure out where to land on this. Does DoD need data/license rights to “own the technical baseline” (which I’m sympathetic to) or is IP a “red herring” and what is really needed is lowering barriers to entry to increase competition (which I’m also sympathetic to).
One thing that might be useful is considerations of time. If DOD will buy a system that it intends to keep around for 10 or 30 years, then it probably needs those data and license rights. If DoD can get the innovation cycle time to move closer to something commercial, say five or less years, then it can probably get by with competition.
In either case, DoD will likely still want to rely on (1) open standards that are commercial to the extent possible; and (2) rights to operational data generated in the field. DoD shouldn’t receive its own maintenance or ISR targeting data from industry servers with proprietary markings on them.
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