In a recent HASC hearing on S&T, several congress members bombarded USD R&E Heidi Shyu with questions about Defense Innovation Unit. Rep. Seth Moulton, who was co-chair of the Future of Defense Task Force, said that their report recommended 10x-ing DIU’s budget, but in FY 22 DIU’s budget was cut. Shyu noted that DoD increased DIU by $10 million between FY 22 and FY 23, but Moulton fired back that it followed a $10 million cut in FY 22 from FY 21. Since FY 21, “it’s a 10 cut if you factor in inflation.” Here’s part of Shyu’s response:
I completely concur. You got to realize by the time I came in — I came in July 29th into the administration, where the budget was pretty much baked two weeks before I came in. So my opportunity to influence is this year in FY 24 so you’ll see a much stronger request for funding for FY 24.
The hearing had all sorts of references to problems with the process for getting money. Some discussion was on the need for beefing up BA 6.4 accounts, which are for prototyping efforts. While BA 6.4 has more than doubled between FY 16 and FY 22, that doesn’t solve the underlying issues, namely, transition to full-scale development, procurement, and fielding. 10x-ing DIU’s budget doesn’t solve the problems of timeliness, reliance on prediction, and execution flexibility.
Representative Franklin asked R&E Shyu about how the Planning, Programming, Budgeting, Execution process affects defense innovation. Shyu has a strong response:
I’m all for changes in the cold war PPBE process. This is dialogue I had with Secretary Austin a year ago, he asked me the exact same question you asked, namely, ‘Heidi, why the heck why is it I see all this innovation outside and I can’t get it inside the department?’ One thing I said to him, “‘Sir, let’s just say you see some really great prototype and you want to buy a particular product. Did you have the foresight two years ago to put it into your POM [program objectives memorandum] request? If you didn’t, guess what, you have no authority.’
So that’s the problem. By the time you get the authority put it into your POM, it’s two to three years down the line the product that you’re buying is already obsolete. This process absolutely has to change. There’s plenty of innovation on the S&T side. It’s the bottleneck getting into the hands of the warfighter that the PPBE process has to change to reflect the agility that’s utterly needed. So how do we go about doing that? Well, I hear there’s a PPBE commission that’s ongoing so I do hope that they’re looking this very seriously to compress the timeline.
The other thing you look at China, how are they able to accelerate so fast, they invest heavily in their S&T and R&D enterprise and test enterprise. They rapidly test things out and they field it and they go right on to the next idea test it out and field it. They don’t take a decade.
That’s all well and good, but Shyu revisited the overarching effect of PPBE several times — it is the cost-schedule-technical baseline that boxes in program managers and denies the execution flexibility to bring innovation to the field. Here’s Shyu:
I think in the S&T area, we do test things out and failure is okay. It’s like DARPA, failure is absolutely expected because you’re pushing the edge of the envelope. It has to be okay to fail.
But once you get into a program of record, you have the schedule that you have laid out, you have the unit cost that you’ve laid out, you have the development cost that’s laid out, you have to predict what your maintenance and sustainment cost and logistics is going to be even though the system is not even designed yet. Everything is baked in very conservatively, and if you fail, guess what, you get called in to say ‘tell me why did you fail?’ Your career is dead. Congress will slam you on the top of your head. ‘Why did you fail that program? How did you screw that up so badly?’ The press jumps on your neck. It’s a death spiral.
If we want to be able to fail fast and accelerate we have to change the entire mentality. You can’t tell just the program manager, ‘I’m going to grade you how well you deliver cost and schedule and performance and not screw up — this is how you get promoted.’ So the incentive structure is not there.
This gets to the big issue with PPBE — the concept of a program of record, and the huge gates of lifecycle planning required to enter it. Here’s a bit more from Shyu on the program of record that gets to this idea of oversight by measuring execution to baseline vs. oversight through contextual metrics and a focus on outcomes:
This is where the program manager is going to be a lot more risk averse, because you’ve got a program that’s laid out that’s presented to the Hill and you are going to be judged in terms of success of how well you execute to your plan. They’re not going to be nearly as receptive to a new innovative a technology that is not mature enough to because it increases the risk of the program.
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