Anduril releases mission document: Rebooting the Arsenal of Democracy

Here is an interesting slice from Anduril’s mission document: Rebooting the Arsenal of Democracy.

In the early 1960s, under the direction of then Secretary of Defense McNamara, the Department of Defense instituted a labyrinth of new rules for acquiring military systems. McNamara was not merely reducing spending: his experience at Ford led him to believe that comprehensive reform was needed to reshape how the government bought technology. He revamped acquisitions to emphasize efficiency, the elimination of waste, and predictability. The Planning, Programming, and Budgeting System (PPBS, later changed to PPBE for “Execution”) process that he implemented is arguably the single most influential defense reform ever enacted, indelibly altering the incentives and business models of the major defense contractors.

Competition with the Soviet Union shaped McNamara’s actions — but perhaps not as modern observers would expect. Whereas today senior DoD leaders have rightly sounded the alarm on China’s ability to compete technologically with the West, McNamara did not believe the Soviet Union capable of out-innovating the United States. In the account of Brigadier General James M. Roherty, McNamara viewed the competition against the Soviet Union in terms of “quantifiables,” believing that “a relative stability characterized weapons technology in the 1960s… that ‘technological surprise’ [was] not a threat to national security and that major breakthroughs [were] not to be expected.”

Read the whole thing! Anduril adopted the following principles:

1. Outpacing the Threat
2. Building to the Mission, Not to Spec
3. Software-First
4. Controlling Defense Budgets

That last one is a bit confusing, I think they mean by using self-funded effort they will be incentivized to drive costs down.

Anduril identified five sources of failure:

1. Adherence to a Lengthy Bureaucratic Process
2. Working off Onerous System Specifications
3. Spending Little on Internal Research & Development
4. Prioritizing Proposals Over Performance
5. Tolerating Prolonged Failure

And made five recommendations for major progress, with links to past articles:

1. Thinking Software-First
   1. Establishing large, critical programs for key software priorities.
   2. Awarding prime contracts to software companies.
   3. Aligning acquisition policy with industry best practices.
2. Running Meritocratic Competitions for New Systems
   1. Shift from proposals-focused competition to performance-based competition.
   2. Always have a meaningful contract at the end of a competition, and issue it quickly.
   3. Keep rewarding new winners by frequently recompeting large programs.
   4. Measure outputs, not inputs.
3. Revamping Anachronistic Data Rights Practices
   1. Account for the size of the program in question, allowing vendors to retain greater rights for small programs and giving the government greater control for larger programs.
   2. Closely define the scope of the use of the software being acquired.
   3. Address technical lock-in by demanding adherence to technical interoperability standards such as APIs and Government-defined or industry-defined open protocols.
   4. Allow vendors to propose alternative contract structures, including as-a-service contracts.
   5. Weigh the costs, not just the benefits, of demanding greater data rights.
4. Helping Companies Cross the ‘Valley of Death’ by Loosening Contracting Timelines
5. Leveraging Existing Programs

What is missing from my perspective is some recommendations on portfolio management — creating more flexible pots of money aligned with current capabilities and organizations that enables those in the PEOs to make more rapid tradeoffs between projects and requirements. If Anduril noted the negative effects of McNamara’s PPBS, then moving away from program-stovepipes and towards the execution flexibility that used to exist in the 1950s and before is critical.