Podcast

Matt Steckman and Trae Stephens joined me on the Acquisition Talk podcast to discuss their approach at Anduril Industries to scaling up in defense. Matt is the Chief Revenue Officer and a former guest of Acquisition Talk, while Trae is Anduril’s co-founder and executive chairman, as well as a partner at Founder’s Fund.

In the episode, we discuss:

• How Anduril is becoming a hardware rich company
• Reactions as to whether nontraditionals are helping in Ukraine
• Why software companies have larger margins than defense primes
• Whether Anduril will adopt DoD business systems as they scale
• How to improve competition through product over white papers
• Why new entrants need an effective government affairs engine

Download the full-text transcripts. See highlights, commentary, and more on the podcast here.

In this special episode of the Acquisition Talk podcast, we listen into an event that explores how defense programs can harness modern development practices. Center for Government Contracting executive director Jerry McGinn moderates a panel with DIU director Michael Brown, head of strategy at Anduril Industries Zachary Mears, and Deputy PEO for Ground Combat Systems James Schirmer. They discuss ideas brought up in the Acquisition NEXT report recently released by Mason GovCon including adaptive requirements, continuous market research, and modular open systems.

In the episode, Jim Schirmer describes how in the new optionally-manned fighting vehicle, the Army is trying to control the architecture and define the key interfaces. This would allow companies to keep the intellectual property to their black boxes inside the interface boundaries while releasing government from the vendor lock of being beholden to the prime for all upgrades. “For us, this is this is new territory, so it’s way too soon to know.”

Zach Mears from the new defense entrant Anduril described the barriers to entry associated with long sales cycles and continuing resolutions, issues that rarely plagues commercial business. This can be a lot for companies to tolerate, especially if it is low profitability and only represents a few percent of their revenue. He argues the government needs to award and incentivize companies based on value rather than reducing everything to a labor hours. By doing so, government ignores issues of employee skill and use of modern software techniques. This focus on value is easier when evaluating functional prototypes rather than paper plans. At Anduril, Zach said, “We believe that risk to delivery as well as the risk to return on capital investment on capability should rest with industry.”

Mike Brown argued that 11 out of 14 of the defense modernization priorities are led by commercial firms, meaning DoD must have a “fast follower” strategy for adopting and integrating commercial tech. In this world, “You don’t need to start with requirements, the commercial market has already built it.” Usually defense official think the longer they criticize paper designs they will get to the right answer. However, this reliance on prediction indicates hubris. The alternative is an iterative approach, akin to how aircraft in the 1950s, can help align DoD with commercial processes.

Download the full-text transcripts. See highlights, commentary, and more on the podcast here.

I was pleased to have Jordan Noone and Jenna Bryant on the Acquisition Talk podcast to talk about how commercial companies in space and deep tech can do business with DoD. Jordan is General Partner of Embedded Ventures and had co-founded the space launch company Relativity Space. Jenna Bryant is a General Partner and CEO of Embedded Ventures, and was an investor and teambuilder before that.

Embedded Ventures is a venture firm that pursues the next generation of space companies — those new applications that are enabled by rapidly decreasing launch costs. They recently announced a cooperative R&D agreement (CRADA) with the Space Force where they will help companies navigate customers, requirements, and the acquisition process, and on the flip side, they help SpaceWERX evaluate the technical feasibility and talent of the companies.

In the episode we discuss:

• Why companies need to think about adversarial capital early
• How government and industry can solve each others valleys of death
• The future of of digital engineering workflows
• When dual-use companies should start engaging government
• How public affairs gets in the way of customer discovery

Download the full-text transcripts. See highlights, commentary, and more on the podcast here.

My colleague James Hasik recently published his newest book, Securing the MRAP: Lessons Learned in Marketing and Military Procurement. In this episode of the Acquisition Talk podcast, we listen in on an excellent event hosted by the Center for Government Contracting at George Mason University. It starts with a conversation between Senior Fellows Stephanie Halcrow and James Hasik. Afterwards, Stephanie moderates a panel discussion with:

• Susan Alderson, the statistician who sparked the successful drive to adopt the MRAP in the Marine Corps
• Damon Walsh, a former MRAP marketing executive at Force Protection Inc.
• Paul Mann, the first MRAP program manager

The MRAP, of course, was an urgent program in the mid-to-late 2000s that addressed the IED threat. Basically, it is a ground vehicle with advanced suspension, greater ground clearance, a v-shaped hull, and kevlar panels that make it survivable against enemy IEDs. Even though the basic problem had been solved in South Africa many years before, the interesting part is how this solution was not immediately obvious given all the different ways you can defeat IEDs. Many different groups of people — some of which didn’t even know each other — contributed to the genesis of the MRAP program, and then rapid scaling to 5,000 vehicles in less than 19 months after the JUONS requirement.

It is truly an amazing story, and the event really brought out some great lessons learned:

• Interservice rivalry can incentivize adoption
• Don’t break too many rice bowls
• DoD must improve its market research capabilities
• Experiment and test before working on requirements
• Ignore those who say you’ll fail
• Negotiating with suppliers on a DX rated contract

See highlights, commentary, and more on the podcast here.

Katherine Boyle joined me on the Acquisition Talk podcast to dive deeper into her stark warning on DoD’s relationship with the tech community. “After five years of DOD saying ‘we want to work with the best startups’, we have, at most, two years before founders walk away and private capital dries up. And many, many startups will go out of business waiting for DOD to award real production contracts.”

Katherine is a general partner at a16z, a venture capital firm, previously having left General Catalyst and the Washington Post before that. Her focus is on American Dynamism, or firms trying to solve major social problems with technology. “This is not govtech, this is not technology that’s selling into government to make incremental changes.” For example, Anduril is a defense startup in her portfolio. It doesn’t respond to an approved requirement but rather develops the capabilities in AI/ML, sensor fusion, and networking that it believes will revolutionize military operations.

In the episode, we touch on:

• How to get away from “spray and pray” investment mentality
• Why software is the most important tech innovation in history
• How revoking the draft changed the American character
• Can a startup sell into government and commercial at the same time?
• What needs to change in the culture of acquisition

Katherine argues that DoD has done an excellent job opening the front door to new firms who can win $50K or $1M dollar contracts. But it isn’t proven that the front door can lead to recurring revenue if the technology succeeds. DoD doesn’t need to award large production contracts to every company, it needs to double down on the very best companies with a proven track record. Awarding $20M to a handful of companies over the next year will continue to give promise to the idea that new entrants can succeed. Investors and entrepreneurs will respond.

One of the fears is that new entrants are losing contracts to the big primes despite delivering better technologies. The acquisition system rewards officials for working with big primes who can navigate the process. “If we had that system in Silicon Valley,” Katherine said, “IBM would still be the number one company.” She believes all the authorities are there for acquisition officials to start awarding production contracts to the best new entrants — those that can deliver product in five days rather than the five years it takes a prime. The culture, however, will have to change, and this gets into a long history of how attitudes toward public service have changed since the 1970s.

Download the full-text transcripts. See highlights, commentary, and more on the podcast here.

In this episode of Acquisition Talk, we listen in on a recent event on Other Transactions Authority hosted by George Mason University’s Center for Government Contracting. Many thanks to my colleague Stephanie Halcrow for moderating a panel that included Stan Soloway, who recently authored a report on the progress of OTs, Wes Bennett, Director of the Contracts Management Office at DARPA, and Dan Fick, Vice President of SAP.

In case you’ve been asleep at the acquisition wheel the past few years, Other Transactions (OTs) allow select government agencies to flexibly contract without all the rules found in the Federal Acquisition Regulation that can make it impossible to reach startups and nontraditional contractors.

Actually, as panelist Stan Soloway noted, OTs are not technically “contracts” because the term has a specific meaning in the FAR. They use the term “agreements” and are signed by “agreements officers.” But, in the general commercial sense, OTs are binding contractual documents.

Although OTs were invented around 1958 for NASA, they were expanded for use in DoD in 1989 with 10 USC 2371. It seemed by the time Future Combat Systems used OTs and was terminated in 2009, the authority reached its nadir. With the FY 2016 NDAA, OTs were refreshed, adding the ability to transition a competitive prototype OT into production (up to $500 million). That signaled Congressional intent for increased adoption.

See highlights, commentary, and more on the podcast here.

I was pleased to have John Ferrari join me on the Acquisition Talk podcast to discuss a wide range of issues facing DoD’s ability to field game-changing technologies in an era of strategic competition. He recently retired from the Army as a Major General and director of program analysis and evaluation at the G8. He is now a non-resident senior fellow at the American Enterprise Institute and Chief Financial Officers of QOMPLX, a data analytics and cybersecurity firm. We touch on:

• The impact of inflation on defense
• How the Army IVAS HoloLens program shows the future of acquisition
• Ways for organizing JADC2 and interoperability
• The challenges of running DoD on PowerPoints and disjointed IT systems
• Whether new entrants can scale in defense without suing the government

In the episode, John argues that DoD’s process looks to replace existing “legacy” platforms with newer versions of the same thing: aircraft, ships, ground vehicles, satellites, etc. This focus on the future leads to a dearth of experimentation today, leading to poor choices on those “next-gen” platforms. Instead, he argues that so-called legacy systems should be used as experimental test-beds for integrating new technologies.

For example, outfitting a navy ship with fiber optics and 5G, deploying a commercial-based operating system, and allowing nontraditionals to quickly deliver capabilities against that. Another example is the Army’s JLTV program, which is basically a small MRAP and while it met its requirement from 2012, has none of the new technologies widely available in the auto-industry like anti-lock breaks and backup cameras, not to mention a suite of sensors and automated software updates found in a Tesla.

DoD doesn’t have decades to move towards military technologies that have caught up with the 21st century. “If you’re building new systems and it takes you 30 or 40 years to get there, rather than taking commercial technology today and embedding it in the current systems, you’ll never get there.”

While the Secretary of Defense can accelerate this move towards rapid experimentation and adoption, it takes his personal attention to each and every project. That cannot scale. The system can only move as fast as trust allows, and since the 1970s there has been a major breakdown in trust between the executive and legislative branches. John argues that information technology provides an opportunity to build back trust, similar to the way parents have learned to trust putting their child into an Uber because they can track location, see the drive’s profile, and so forth.

Download the Full-Text Transcripts. See highlights, commentary, and more on the podcast here.

I was pleased to have on the Acquisition Talk podcast Joseph Murray and Andrew Van Timmeren. Joe is the co-founder of Blue Force Technologies, a small aerospace company that is developing a new combat UAV for the Air Force due to fly in 2023. Andrew is a former F-22 pilot and now advises companies on their defense market strategies.

In the episode, we discuss how Blue Force is positioning itself to become a prime contractor with DoD. They are developing a stealthy, high performance, and low cost UAV name is “Fury” — which comes from a mythological Greek creature that punishes mistakes. The title is fitting because the first mission that Fury intends to fulfill for the Air Force is Adversary Air (ADAIR). Currently, the Air Force uses front-line fighters in the role which severely hampers training and due to the wear, tear, and expense.

Fury provides many of the same characteristics of the adversaries they’re trying to emulate. It has a 5,000 pound takeoff weight, similar in size to a T-38 trainer, can operate up to 50,000 feet at Mach 0.95, turn at nine Gs, and boasts low observability. It has a modular design that allows for a range of sensors and weapons integration. Despite the performance, it was built almost exclusively with commercially available hardware, allowing it to target a sustainment cost per flying hour of under $4,000. While it’s often difficult to compare CPFH numbers due to understanding what goes in it, an F-16 is perhaps four or five times that amount and while F-35s and F-22s are perhaps ten times greater.

Certainly top-of-the-line fighters have a number of capabilities that emerging UAVs do not, but not all that capability is needed for many ADAIR training scenarios. Defense against cruise missiles is one example. Andrew explained in his 10 years as a F-22 pilot, he flew zero defense flights against cruise missiles. Instead, cruise missiles were simulated with Learjets — a commercial business jet — which fails to replicate important characteristics.

While Blue Force Technologies has started some engagement with the Air Force’s Skyborg program, it’s initial focus is ADAIR. This is an advantageous place to start because it not only provides a solution to an existing requirement for realistic training, it is a testbed for manned-unmanned teaming that will be critical to the future fight. As Andrew observed: “Maybe the greatest thing you can do from an operator perspective in manned-unmanned teaming is build that trust.”

Download the Full-Text Transcripts. See highlights, commentary, and more on the podcast here.

RAND researchers Cynthia Cook and William Shelton joined me on the Acquisition Talk podcast to discuss their new paper that takes a fresh look at the space acquisition enterprise. Not only is the US Space Force much smaller than its sister services (just 16,000 compared more than 10x that number in the Marines), it is also much more reliant on technology. They argue that the nation’s newest military service has a huge opportunity to shape a more agile process and flatter organization. This includes:

• Creating a culture of “warrior engineers”
• Embracing funding flexibility and portfolio management
• Empowering a single space acquisition decisionmaker
• Coordinating enterprise architectures and capability roadmaps
• Increasing cross-pollination between government and industry

In the episode, Cynthia and Bill emphasize the need for the Space Force to think differently about program management. Often, managers are incentivized to deliver on their baseline program instead of taking responsibility for broader integration issues. For example, the GPS capability set was broken out into separate programs for space vehicle, ground, user equipment, and launch, causing synchronization issues.

Bill explained how “As a program manager, I had the iron triangle. Don’t mess with my cost-schedule-performance. Anybody comes with a new idea, if it’s going to make me slip or cost money, thanks for your interest in national defense but I’m going to do what I got to do to meet my APB.”

Changing this system of incentives requires a different personnel structure, system of promotion, dedicated contracting officers, and methods of accountability. This is particularly true as space systems rely more on commercial, proliferation, and “good enough” solutions rather than exquisite systems that take more than a decade to field.

Download the full-text transcripts. See highlights, commentary, and more on the podcast here.

AJ Piplica joined me on the Acquisition Talk podcast to discuss transportation at hypersonic speeds. He is the founder and CEO of Hermeus, which is developing the Quarterhorse aircraft intended to fly at five times the speed of sound. It’s based on a turbine-based combined cycle engine which uses the off-the-shelf J-85 jet engine from GE. When the J-85 accelerates to supersonic speeds, a proprietary ram-jet kicks in that uses the aircraft’s forward motion to compress air, combust it with fuel, and accelerate to even higher speeds.

Hermeus has already shown that a lesser gas turbine engine designed to fly at Mach 0.8 at 26,000 feet can be outfitted to fly Mach 3.2 at 60,000 feet in a test facility. That’s closing in on the top speed of the famed SR-71! The first Quarterhorse prototype using the J-85 is expected to fly a couple hundred nautical miles, but the eventual transport aircraft will fly at Mach 5 for 4,000 nautical miles at an altitude of 90,000-100,000 feet.

One of the interesting technical breakthroughs at Hermeus is the pre-cooler. There’s a “valley of death” of sorts between Mach 2 and Mach 3 which is beyond the limits of the turbine engine but before the ramjet fully kicks in. The air entering the gas turbine engine at Mach 3 is over 800 degrees which is too hot for the materials to handle. Hermeus’ pre-cooler cools down that air by 675 degrees in one-tenth of a second so that the turbine engine can continue to provide thrust. Once the Quarterhorse accelerates past that regime the turbine engine will be bypassed and the ramjet does the rest up to Mach 5. “It’s not a very efficient system,” AJ noted, “so it’s important that we accelerate through that regime relatively quickly and then transition to the ramjet.”

This capability isn’t just about accelerating civilian transportation by reducing frictions to travel and trade. It has clear military applications. AJ points to survivable airborne ISR for the first use-case as the military environment shifts from permissive to denied. Even Iran knocked out an MQ-4C Triton back in 2019. A hypersonic reusable aircraft would be hard to see coming, and even harder to knock out. All of North Korea could be imaged in 30 minutes, for example.

Since the 1970s, however, the US Air Force has focused almost entirely on stealth (low radar cross section) as the primary means of survivability. Speed, altitude, and maneuverability are other knobs that can be turned in that equation. These knobs become more important as radar catches up to stealth.

The Air Force is hedging their bets. Hermeus was awarded the largest STRATFI award yet, with $30 million coming from the Air Force including $15 million from PEO executive airlift, and a matched $30 million from private sources. In the episode, AJ talks about what his company had to do to win the contract and provides advice for other companies trying to transition into defense programs.

Download the full-text transcripts. See highlights, commentary, and more on the podcast here.

I was pleased to have Phil Jasper, Mission Systems President at Collins Aerospace, join me on the Acquisition Talk podcast to discuss commercial item acquisition. In the early 1990s, there was a recognition that DoD needed to streamline its business processes in order to attract commercial companies. The Federal Acquisition Streamlining Act of 1994 led to FAR Part 12 procedures, which exempted items determined to be commercial from various regulations such as certified cost or pricing data, cost accounting standards, and business system administration. The past several NDAAs strengthened the preference and opportunities for commercial, including the creation of the DCMA commercial items group (FY13 Sec. 831), treatment of nontraditional contractors as commercial (FY16 Sec. 857), and reduced contract clauses and flowdowns (FY17 Sec. 874).

Phil argues that commercial procedures have important benefits to DoD. First, it allows companies to bring their internal R&D for commercial customers to bear, including open systems architectures. A common avionics system, for example, was tailored for UH-60 and CH-47 helicopters saving the government over $160 million. Moreover it was delivered in just 13 months compared to a normal defense cycle time of three years or more. Similar examples in the aircraft world are found in fuel systems, heads up displays, fire protection systems, and landing gears. These commercial items have lasting benefits in terms of continued private investment that generate capability enhancements throughout the lifecycle. This helps offload obsolescence management from the government and allows military systems to be upgraded on much faster cycle times.

Currently, DoD systems fall years behind the current state and need to leap-frog to the next generation before falling behind and doing it again. Embracing commercial items can break that cycle. “If you look at Moore’s law,” Phil says, “and the pace at which memory and processors double in capacity every 18 months, for example, and then you look at the life cycle of defense articles, airplanes flying 30, 40, maybe even longer years. Think of how technology evolves over that time. You really have to look at the value that’s provided from the company, assuming that redesigning obsolescence as part of a commercial business model versus me [government] having to pay each and every time one of those processors gets upgraded. And now I’ve got to go pay the reintegration costs and the recertification costs.”

There are still challenges to DoD use of commercial item procedures. Phil found that the number of flowdown clauses for commercial contracts was just 13 in the early 1990s, growing to more than 60 today. These flowdowns have a major impact on the commercial supply chain, with Collins having lost subcontractors due to the regulatory requirements. This is particularly true because government is a low volume buyer, making it hard to close that business case. Commercial items also have to be recertified regularly which adds time and cost. Intellectual property and reasonable pricing determinations are also sticking points that can bog contracting down.

Despite these challenges, Phil is hopeful about continued progress in commercial item adoption. “Frankly, at the end of the day, that’s what this is all about — industry and government are aligned in common purpose and that is to get the best technology to the warfighters as fast as possible at the most affordable price and best value for the taxpayer.” Amen to that.

See highlights, commentary, and full-text transcripts of the podcast here.

I was pleased to be invited for a discussion with Philip Candreva and Frederico Bartels hosted by the Heritage Foundation. Philip is a senior lecturer of budgeting at the Naval Postgraduate School and author of the book National Defense Budgeting and Financial Management. Fred is the senior policy analyst for defense budgeting at Heritage and has written an interesting new paper, Changing current ‘use it or lose it’ policy would result in more effective use of defense dollars.

Fred argues that the current budgetary incentives cause financial managers in government to accumulate resources and then try to obligate the entire sum before they expire at the end of the year. The 80/20 rule was intended to address this problem by restricting organizations to obligating 20% of their funds in the last two months, but that created yet another deadline. Making the time crunch even worse, Congress passes defense budgets three months late on average.

Fred provides three major recommendations: (1) Providing carryover, perhaps 5% of the budget, into the first quarter of following fiscal year; (2) Reduce restrictions obligation rates like the 80/20 rule; and (3) Speed up reprogramming of funds.

Philip also has a great paper exploring the issue: A Critical Look at “Use or Lose”. He argues that if an organization cannot manage its budget by the end of September, he doesn’t have faith they can manage it any better by December. To use a sports analogy, a football team’s red-zone offense is different than when they are further back. Organizations won’t get into crunch time for obligating until the deadline is upon them.

Moreover, Philip argues that the rollover might exacerbate the problem by quantifying and justifying cuts to the on-coming year’s budget. He recommends keeping the fiscal year constraints, but providing some flexibilities including: (1) speed up reprogramming in last quarter of the fiscal year, such as automatically approval if no action is taken by Congress in 10 session days; (2) allow for more anticipatory contracting, even if the money isn’t there yet; and (3) create a mechanism to resurrect expired, but not-yet canceled, funds.

See highlights, commentary, and full-text transcripts of the podcast here.

Lisa Porter joined Jordan Schneider and I for a discussion about Science & Technology (S&T) in the national security arena. She is co-president of LogiQ, a consulting company, and before that was deputy director of USD(R&E), founding director of IARPA, executive vice president of In-Q-Tel, and senior vice president of Teledyne Scientific & Imaging, among various other positions. We touch on:

• How the error correction of free markets is absent in DoD
• A round of overrated/underrated on critical S&T areas
• The split of AT&L into USD(R&E) and USD(A&S)
• How successful government organizations empower their staff
• Why the US lost it’s dominance in space launch

During the episode, Porter discusses how many people in national security misunderstand the phrase “space as a warfighting domain.” The popular imagination brings up ideas of spacecraft moving dynamically such as in Star War or Battlestar Galactica, but ignores physical realities. It takes a lot of time and propellant for satellites to move from one orbit to another, or to avoid kinetic threats, as demanded by the Law of the Conservation of Energy.

The near-term focus for warfighting in space is about smart investments in Low Earth Orbit (LEO), such as space situational awareness, missile tracking, resilient communications, and proliferation of spacecraft. Porter cites the Space Development Agency as one example where good headway is being made in these areas, particularly proliferation where they are trying to prove whether spacecraft production can be increased from once every few years to tens or ultimately hundreds per year.

One major issue that Porter doesn’t see enough emphasis from is continuous upgrading and replenishment of spacecraft. There is not yet enough cost-effective launch capacity to perform the task. While the commercial industry is investing heavily in space, DoD has not yet provided a clear requirement or funding for the replenishment mission over the next five-to-ten years to signal its importance to industry.

A major impediment to growth in national security space is the over-use of export controls like ITAR. Porter argues the US is behind where it should be with launch, whose export control policy was driven by fear of other nations being able to make ICBMs. The controls stopped investment and knowledge sharing with allies who had to develop their own launch capabilities. “All we did was create a situation where we’re no longer the best providers of launch,” Porter said, “and now we’re coming back, of course, but… we lost command of a global market in launch and we didn’t gain anything. The thing we were afraid of [adversarial capabilities] still materialized.”

See highlights, commentary, and full-text transcripts of the podcast here.

I was pleased to have Russell Rumbaugh join me on the Acquisition Talk podcast to discuss some of the most fundamental issues facing defense management. He is the systems director at the Aerospace Corporation’s center for space policy and strategy. Though we went off script for nearly the entire episode, it was the conversation I wanted to have with Russ. We hit questions including:

• Is weapons choice a political or technocratic process?
• Is there a boomerang effect in defense S&T?
• How can shared data be used to improve analysis of the force structure?
• Is the DoD organization at odds with portfolio management?

See highlights, commentary, and full-text transcripts of the podcast here.

As firms are finding out, the unit economics of AI/ML is not exactly like software. It requires more manual manipulation of data than one might expect – including ingesting data, cleaning data, tuning models – and deployment doesn’t scale like pure software does. Every customer has their own unique datasets. The Department of Defense has had enough trouble adapting its hardware-oriented acquisition system to buying software. Will AI/ML present an even greater challenge or does it lend itself to the traditional labor services model?

The Center for Government Contracting of the George Mason University School of Business and the Wharton Aerospace Community co-hosted an important discussion on the scalability, unit economics and cost estimating methodologies of AI/ML projects with a tremendous panel including: Sheldon Fernandez, CEO of Darwin AI; Ryan Connell, DCMA Commercial Pricing; and Diego Oppenheimer, CEO with Algorithmia with his colleague Craig Perrin.

Download the full-text transcript.

Listen to the podcast, watch the video.

See highlights, commentary, and full-text transcripts of the podcast here.

I was pleased to have an impressive trio from MITRE join me on the Acquisition Talk podcast to discuss the future of acquisition reform. Dan Ward, Pete Modigliani, and Matt MacGregor have been in on the ground floor of the Department’s implementation of the Adaptive Acquisition Framework, which has been hailed as the “most transformational change to acquisition policy in decades.” With six tailorable pathways, programs can potentially cut years of paperwork for software and rapid prototyping efforts.

While there is certainly more effectiveness to squeeze out of the AAF, my guests are looking ahead to other elements of the “big A” acquisition systems that will need change to support the ideals of the Adaptive Acquisition Framework. For example, rapid prototyping efforts using the Middle Tier pathway don’t have to use the JCIDS requirements process, but they still need a process that could take up to a year. Then it takes another two or more years to line up the funds to get started. These processes create barriers to programs being run with speed, thrift, and simplicity.

Requirements, budgeting, oversight, and workforce provide the next frontier of acquisition reform. Last year, MITRE released an excellent report that outlined enterprise-level requirements and a proposal for an Adaptive Requirements Framework. This year, they released another report called Five-by-Five which took that even further into an Adaptive Budgeting Framework and implementation of portfolio management.

These management issues are critical because, as Pete argued, “the industrial age bureaucracy poses the biggest threat to our ability to win future wars.” I appreciate their specific recommendations in requirements and budgeting because, as Dan warned, “the status quo appears inevitable when viable alternatives are not readily visible.”

See highlights, commentary, and full-text transcripts of the podcast here.

Mike Benitez joined me on the Acquisition Talk podcast to talk about the current state and future of the Air Force fighter inventory. He discusses the rationale behind the recent announcement from Chief of Staff CQ Brown that the USAF will neck down it’s inventory from seven systems to “four plus one.” Mike explains how the NGAD will replace the F-22, the logic behind buying both the F-35 and F-15EX, and the options for replacing the F-16. We also play a round of “retire it or not” for the A-10, RQ-4 Global Hawk, and the KC-135 tanker.

During the episode, Mike argues that laying in several major advances in the same clean-sheet development leads to poor outcomes — not only for the systems themselves but the industrial base. Shifting to a government reference architecture can help open up competition and even change business models. Rather than companies making their profits in sustainment, which represents 70% of lifecycle costs, the Air Force could change the paradigm by making development pay and potentially even breaking the link between development and production.

The F-117 was a great example of tackling one hard problem (low observability) while leveraging existing components everywhere else. While making a slightly different case, Mike points to Boeing’s T-7A which used digital engineering and parts commonality. “The T-7 was engineered from the ground up for commonality within its parts,” Mike said. “So the the left horizontal stabilizer is the same exact part as the right is just put in upside down… they’ve built an aircraft that has such a skinny supply chain that you’re able to actually operate… but the point is that most of the fighters right now are not developed like that.”

Mike discusses a more agile approach to fighter development, opportunities for test and evaluation techniques, the challenges presented by the budget process, the need to increase emphasis on logistics and communications, and much more.

You can find more from Mike Benitez by signing up for his weekly newsletter The Merge at themerge.co

Download the full-text transcripts.

See highlights, commentary, and full-text transcripts of the podcast here.

George Mason University and Wharton Aerospace Community held an excellent event on the productivity of independent research and development (IR&D). Discussing the topic was an insightful panel including former ASD(A) Kevin Fahey, defense analyst Byron Callan, and former Acquisition Talk guest Anne Marie Knott moderated by Stephanie Halcrow, senior fellow at GMU’s Center for Government Contracting.

IR&D, of course, in the defense world is different than the R&D done at commercial firms like Google and Netflix. IR&D projects are funded by defense contractors, but the cost is reimbursed by government as an indirect rate spread across their portfolio of contracts. (You can find more about that in the forward pricing rate process). This provides for some interesting incentives and comparisons with the commercial sector. The panelists discuss:

• Whether defense contractors spend enough on IR&D
• Rates of return on corporate venture capital
• The effect of profit policy on IR&D
• How to align contractor IR&D with defense objectives
• How the Research Quotient can be used to benchmark IR&D

See highlights, commentary, and full-text transcripts of the podcast here.

Thomas Shugart joined Jordan Schneider and I on another cross-over episode of the China Talk and Acquisition Talk podcasts. Thomas spent 25 years in the US Navy and is currently an adjunct senior fellow at CNAS. He argues that the Chinese justify preemptive strikes to be defensive in nature if they are challenged in the political realm, such as Taiwan declaring independence.

This possibility is made more dangerous considering the rise of China’s military, particularly in long-range missiles, bombers, and navy. The expansion of the PLA Navy over the last five years as been nearly identical to the legendary 1980s Reagan build-up. “For all the talk of them being next generation swarming and unmanned,” Thomas said, “they sure are bending a lot of iron building ships.”

Thomas notes that the United States’ response has been primarily the dispersion of forces to avoid concentration in large bases or carrier groups. But he doesn’t see the demise of multi-purpose manned systems like destroyers and bombers. The systems are survivable in a contested communications environment. Coupled with greater operational experience and warfighter initiative, this provides the US an advantage. However, the advantage can quickly dissipate if leaders make decisions from the wrong lessons.

We close the podcast discussing the computer game EVE and the military lessons that can be drawn from it. EVE is a massively open online game where tens of thousands of people self-organize into corporations that compete against each other in battles using spaceships, rail guns, electronic warfare, and many other capabilities. Actions in the universe are complex and the corporations are sophisticated. We compare the decentralized complexity of EVE to the relative simplicity and centralization found in StarCraft and Ender’s Game.

See highlights, commentary, and full-text transcripts of the podcast here.

I was pleased to have Steve Blank and Pete Newell return on the Acquisition Talk podcast to talk about the five-year anniversary of the Hacking 4 Defense program, or H4D. In the program, university students partner with defense organizations to solve problems. But they aren’t simply handed a requirement and asked to figure out a technology solution. In fact, out of more than 450 problems, only two groups ended with the same problem that they started. “As the students are learning,” Steve said, “the sponsors are also getting schooled.”

The students immerse themselves in user stories by interviewing dozens of operators and even walking a mile in their shoes. They then create minimally viable products and iterate to an innovative solution. This combination of problem curation and lean methodology provides students with invaluable experience at the same time it delivers value to our government.

Over the five years, H4D grew into Hacking 4 Everything, or H4X. It includes courses on homeland security, diplomacy, energy, oceans, sustainability, and national health service. The program is taught at roughly 50 universities, more than 2,000 students have gone through the course, 450 national security and intelligence problems addressed, and 14 startups were formed.

One tremendous statistic is that at Stanford, close to 40 percent of H4D students chose to continue solving problems for national security, which as Steve notes is “pretty amazing when their career paths include working for Facebook or Google or whatever the hottest startup is.” Without H4D, these students would likely have graduated without ever considering the option of solving the government’s hardest problems.

I’d like to thank Steve Blank and Pete Newell for joining me on the Acquisition Talk podcast. You can see more about Hacking 4 Defense here. Steve’s blog, books, podcasts, videos, and Modern War class can be found at his website, including a Secret History of Silicon Valley. You can find out about Pete’s company BMNT at their website, including more about H4XLabs. There’s a ton more to find on them and H4X just by googling!

See highlights, commentary, and full-text transcripts of the podcast here.

In this second discussion on the future of the Planning-Programming-Budgeting-Execution (PPBE) process, Center for Government Contracting executive director Jerry McGinn hosts a distinguished panel including:

• Jamie Morin — VP at the Aerospace Corp and former Director of CAPE
• Dov Zakheim — Senior Fellow at CNA and former USD Comptroller
• John Young — Principal at JY Strategies LLC and former USD AT&L

Watch the video here, and listen to it on the Acquisition Talk podcast. It is difficult to boil the conversation down because each of the three panelists had unique views. However, one theme that all seemed to agree on was the importance of flexibility to make program tradeoffs, and that such a construct requires trust between DoD and Congressional personnel. Here’s Dov Zakheim:

And I would argue very strongly that if the department is really serious about getting past with Kath Hicks, the deputy’s called the valley of death — the time it takes between the time you actually come up with some idea and actually field it, you’ve got to be able to move money around quickly. It’s as simple as that.

And as for getting there, “It is a matter of trust… Rule number one for the Pentagon is don’t try to bluff your way past Congress. Hey, they’re going to catch you and B they’re going to really beat you up, not just this year, but future years.” I think those comments provide some broad points of commonality.

See highlights, commentary, and full-text transcripts of the podcast here.

For the first time in more than 50 years, a serious discussion is emerging on the foundations of defense budgeting and oversight.  The “valley of death” issue has drawn people’s attention to the budget at the highest level, but the problems run much deeper. No longer will business as usual — comprised of industrial era methods and multi-year timelines — suffice in an era of great power competition.

I was excited to host a panel representing three key perspectives on the Planning, Programming, Budgeting, Execution (PPBE) process and the future of defense resourcing. They are Courtney Barno (NSCAI), Matt MacGregor (MITRE), and Dan Patt (Hudson). Each has contributed to a recent report addressing PPBE, and all three circle around the old concept of portfolio management. A short video describing the reports is here. The full video of our discussion is on YouTube here, and the audio has been published on the Acquisition Talk podcast.

The three reports we discuss are here:

• Bill Greenwalt (AEI) and Dan Patt (Hudson): Competing in Time: Ensuring Capability Advantage and Mission Success through Adaptable Resource Allocation
• Pete Modigliani, Matt MacGregor, and Dan Ward (MITRE): Five by Five: Five Disciplines and Five Strategic Initiatives for the Pentagon in the Digital Age
• National Security Commission on Artificial Intelligence (NSCAI): Final Report

And for more information, see my resource page on budget reform.

See highlights, commentary, and full-text transcripts of the podcast here.

Michele Flournoy joined Jordan Schneider and I on a crossover episode of the China Talk and Acquisition Talk podcasts. She is a former Undersecretary of Defense for Policy, co-founder of CNAS, and and currently the founder and managing partner of WestExec Advisors. We hit on a number of important issues, including:

• China’s approach to systems destruction warfare
• How to make a compelling case for technologists to join DoD
• Nuclear policy and affecting the strategic calculus
• Whether “legacy” weapons need divestment
• A “Manhattan Project” for AI/ML

In the episode, Michele drives home the importance of the acquisition workforce to military outcomes. “We don’t invest enough in the tech or business acumen of our professionals,” she said. Being a smarter customer in terms of negotiating contracts and having technical chops has a tremendous impact on the weapons and CONOPS. As Michele points out, Great Power Competition is no longer about nuclear deterrence alone, but maneuvering in cyber, in space, and in other domains that requires a range of options for affecting the strategic calculus.

See highlights, commentary, and full-text transcripts of the podcast here.

Colonel Nathan Diller joined me on the Acquisition Talk podcast to discuss the Agility Prime line of effort that seeks an innovative acquisition approach to advancing electric vertical take-off and landing (eVTOL) systems. Colonel Diller is the Director of AFWERX and before that was a prolific pilot with over 2,700 hours in 60 aircraft.

Agility Prime doesn’t look to establish requirements and line up a large amount of RDT&E funding to develop military-ready eVTOL systems. Instead, it uses the Air Force’s assets to help accelerate commercialization of existing eVTOL prototypes. For example, the Air Force has test ranges and experienced personnel that can help commercial firms make it through an airworthiness process that drives down regulatory risk and gets them to consumers faster.

Of course, there will be some funding to defray costs to the firms, but Agility Prime will help five aircraft prototypes get ready to fly on a scant budget. Moreover, the process helps the Air Force get smart on use cases and market research to help build the requirements for a program of record down the line.

The “Prime” methodology is ripe for several other areas of dual-use technologies. Colonel Diller identified some other potential Prime concepts:

• Space Prime for two areas: (1) space mobility, transport, and logistics; and (2) data access
• Energy Prime for batteries and perhaps other energy storage devices
• Vector Prime for supersonic transportation
• Autonomy Prime for… autonomous systems
• Microelectronics Prime to help solve security and availability
• Digital Game Prime to support digital engineering and even designing military campaigns

See highlights, commentary, and full-text transcripts of the podcast here.

Trey Herr and Simon Handler from the Atlantic Council’s Cyber Statecraft Initiative joined me on the Acquisition Talk podcast to discuss how the Department of Defense can improve the mission resilience of its systems. The three pillars of resilience are robustness, responsiveness, and adaptability. In that description, resilience is more than about responding to adversity, but capitalizing on opportunity. Oversight agencies should take note that that adherence to plan is nowhere in that definition. During the episode, we discuss:

• How mission resilience metrics differ from CMMC
• The costs of excessive classification to security
• How Netflix uses the chaos monkey to find failure modes
• Comparing CIA’s Corona satellite development to that of F-35 ALIS
• How the BattleLab idea can increase recombinatorial innovation

During the episode, we dive into a recent paper Trey and Simon wrote in conjunction with folks from MIT Lincoln Labs and Boston Cybernetics called “How do you fix a flying computer? Seeking resilience in software-intensive mission systems.” They recommend a new Center of Excellence for Mission Resilience in the DoD. The purpose would not be to duplicate cybersecurity initiatives, but rather to create metrics which can be put on contract to better verify that firms are using modern development processes like DevSecOps.

In order to have adequate status, such a Center of Excellence require a Senate-confirmed position, a dedicated budget account, and quick access to the DepSecDef. But ultimately, it shouldn’t be a Top Secret project creating DoD-unique rules and processes. Instead, the Center should adopt the thought leadership from the commercial and academic sectors as to what makes organizations resilient.

See highlights, commentary, and full-text transcripts of the podcast here.

I was pleased to speak with Colonel Bryon McClain on the Acquisition Talk podcast to discuss the biggest questions facing the defense acquisition system. He is the senior acquisition course instructor at the Eisenhower School, and before that he was the materiel leader for the rapid acquisition branch in the MILSATCOM directorate at the Space and Missile Systems Center. We touch on:

• The role of interservice rivalry in military innovation
• How today’s processes address risk but not uncertainty
• Moving past cost accounting when monitoring contracts
• How unintended consequences plagued the C-5 development
• Whether reform should focus on workforce culture or rules/regs

I’d like to thank Colonel Bryon McClain for joining me on the Acquisition Talk podcast. I have uploaded a working copy of some nice slides from Bryon on a unified framework for acquisition. As for that agile development chart Bryon mentioned, it’s here. There’s a bibliography of literature Bryon discussed in the episode below, and full transcripts of our discussion below that.

See highlights, commentary, and full-text transcripts of the podcast here.

Anne Marie Knott joined me on the Acquisition Talk podcast to discuss her book How Innovation Really Works. She is a professor teaching strategy and innovation at Washington University at St. Louis, and is a former researcher at Hughes. Anne Marie tackles a lot of innovation dogma, including whether:

• Smaller companies more effective at R&D than large
• US federal research has actually declined
• Decentralized R&D beats out central labs
• Scientists have picked the low hanging fruit
• Firms are not spending enough on R&D

In the episode, Anne Marie discusses her measure for R&D productivity called the research quotient (RQ). You can think of it as the relationship between R&D spending and revenues for a given firm, controlling for other factors including capital (from the balance sheet), labor (from the number of employees), and a couple other variables. The more responsive revenues are to changes in R&D spending, the more productive a firm’s R&D is relative to other firms.

Anne Marie draws a number of conclusions from looking at firm RQs across sector and time. She finds a 65% decline in average R&D productivity over the past five or so decades. Two-thirds of firms are actually spending too much on R&D, and could increase revenues by cutting R&D. But she’s also seen maximum RQs increasing over time particularly in newly formed industries, so there seems to be this divergence in outcomes. Anne Marie takes an optimistic view. There are ways firms can improve their R&D productivity, lessons that can benefit defense policy makers.

I’d like to thank Anne Marie for joining me on the Acquisition Talk podcast, and to Jaymie for introducing us. Be sure to pick up a copy of her book How Innovation Really Works, and check out her HBR article, The Trillion Dollar R&D Fix. Listen to her on the Behind the Markets podcast and the Edgewise podcast. Watch a short YouTube video and her speaking with Rich Makadok.

See highlights and commentary on the discussion here.

You can find transcripts of the podcast here.

Richard Danzig joined me on a joint episode of the Acquisition Talk and China Talk podcasts to discuss US-China relations and military innovation. Richard is a Senior Fellow at Johns Hopkins APL, a former Secretary of the Navy, and much more than that. We traverse a number of subjects, including:

• How the risk of war with China is reflected in trade policy
• The problems regulators face in high-tech industries
• Views on growing the US Navy to 500 ships
• How US prime contracts differ from state-owned enterprises
• Whether the Chinese are more risk-tolerant than the US

I’d like to thank Richard Danzig for joining Jordan and myself on our podcasts. Please read his excellent paper, Driving in the Dark: Ten Propositions About Prediction and National Security. You can read several of his pieces over at Muck Rack and CNAS, including “Artificial Intelligence, International Competition, and the Balance of Power.” Listen to interviews with Richard on CyberLaw podcast, Public Policy podcast, Silver Bullet Security podcast, and Defense & Aerospace report.

See highlights and commentary on the discussion here.

You can find transcripts of the podcast here.

Christian Smart joined me on the Acquisition Talk podcast to discuss his new book, Solving for Project Risk Management. He is the chief scientist at Galorath Federal, and before that he was the cost chief at the Missile Defense Agency. We touch on a number of important issues, including:

• Whether Augustine’s Laws still have relevance
• The track record of NASA’s better, faster, cheaper program
• How to do cost estimates on data projects like AI/ML
• Whether the DoD is trying to jam too many programs into the budget
• The effect of MDA’s matrixed organizational design

In his book, Christian talked about a prevailing belief in the 2000s that the Department of Defense could benefit from a “free lunch” when it funded to portfolios of projects. Similar to how diversification between uncorrelated assets gives investors the chance to get the same return with lower risk (or a higher return for the same risk), funding a group of projects at the 60th percentile cost estimate could achieve an 80 percent confidence level for the portfolio overall.

Christian argues that development projects have asymmetric probability distributions for cost and schedule. You are more likely to see black swans in the cost growth direction than you are in cost savings. When more projects are put under a portfolio, the likelihood that one of them will have relatively extreme cost growth increases. We discuss the implications of this result, and what procedures managers can take to mitigate or even remedy the effects.

See highlights and commentary on the discussion here.

You can find transcripts of the podcast here.

Bryon Kroger and Matt Nelson joined me on the Acquisition Talk podcast to talk about digital transformation in the Department of Defense. They are the CEO and COO of Rise8, a digital consulting company, and previously had leading roles in the Air Force’s Kessel Run software factory. In the episode, we talk about:

• Roper’s ‘There is no Spoon’ paper on the digital trinity
• Their take on the new DoDI 5000.87 Software Acquisition Pathway
• What it means for government to “own” the tech stack
• How Rise8 will support the Advanced Battle Management System
• Why entitlement funding is dangerous for organizations

I’d like to thanks Bryon Kroger and Matt Nelson for joining me on the Acquisition Talk podcast. You can learn more about their new company Rise8 here, and about their previous program Kessel Run here.

Some books Bryon mentioned include Eric Ries’ The Lean Startup and Lean Analytics; John Gall’s Systemantics; Eliyahu Goldratt’s The Goal; and Nicole Forsgren et al’s Accelerate. Here’s more on the Air Force’s 2015 Own the Technical Baseline report. Listen to Bryon on a number of podcast episodes: his exit interview on the Kessel Run podcast; Project to Product podcast; Pivotal Conversations podcast (and here’s another one). Matt has a number of good articles on Medium, including a Manifesto for Agile Acquisitions; How to establish a new culture in agile software acquisition; and From CDRLs to Agile Services. Watch Bryon’s YouTube videos, including Scale Leadership, not Technology; and Building a DoD Software Factory.

See highlights and commentary on the discussion here.

In this special crossover episode with ChinaTalk podcast host Jordan Schneider, we interview director of the Defense Innovation Unit Michael Brown. We touch on a number of topics, including:

• Industrial espionage and foreign investment
• The debate over basic vs. applied research
• China starting to determine technical standards
• Coordinating with allies on semiconductors
• Transitioning tech in the DoD

Before taking the helm of DIU in 2018, Michael co-authored a study with Pravneet Singh showing how Chinese participation in the US venture/tech ecosystem had surged from $300 million in 2010 to $11.52 billion in 2015. The Chinese made up of 16 percent of all deals in 2016. That work launched the Foreign Investment Risk Review Modernization Act (FIRRMA) which strengthened the government’s ability to block Chinese investments.

While the Chinese still work hard to transfer technology from the West, in several cases China itself is setting the standards and aggressively exporting that to other countries. They have national champions for artificial intelligence, e-commerce, 5G, drones, and so forth, which are strategically subsidized to achieve a monopoly on infrastructure.

The competition with China is not like the Cold War. Decades ago, the Soviets were at a disadvantage. They (1) had a much smaller economy (about half the size); (2) were not integrated with the global economy; and (3) were not developing technology standards. The answer is not to anoint domestic champions in the United States, but to invest more heavily in S&T and provide safeguards to protect it from IP theft.

See highlights and commentary on the discussion here.

In this special episode of the Acquisition Talk podcast, we listen in to a great conversation on intellectual property in defense. The panel is moderated by my colleague Jim Hasik (who, by the way, has a great blog) and features Richard Gray, the DoD’s IP chief — Shay Assad, former DoD pricing chief — Kelly Kyes, Boeing IP expert — and Bill Elkington, former IP director at Collins Aerospace.

There were tons of great insights throughout, including:

• What causes companies to “buy-in” on production
• Whether there is a level playing field for commercial and defense contractors
• The difference between OMIT and DMPD data
• How the DoD is moving to negotiate specially tailored deals early
• Whether government should get IP rights for a modified commercial product

The conversation is teed off by Jim’s third IP white paper where he looked at the effects of IP rights on the prices of military trucks using a natural experiment. The Army bought the IP rights to the FMTV cargo truck while the Marines did not buy the IP rights for their equivalent MTVR. When they both came up on follow-on procurement contracts, both services saw price increases roughly 20 percent, despite the fact the Army bought the IP rights. Jim has a good bit to say about this and more nuance in the paper.

A fascinating debate that caught my ear was the difference between IP rights related to defense and commercial contractors. Shay Assad argued that defense contractors have their independent R&D reimbursed by government, which puts them on an uneven playing field with commercial companies who funded R&D our of their gross profits. That dichotomy in risk should have consequences on pricing and on IP rights. Kelly Kyes argued that defense IR&D doesn’t have commercial applications, so needs government reimbursement. And in the case of Other Transactions contracts, the cost-sharing requirement is waived for nontraditional contractors which evens out the competition.

See highlights and commentary on the discussion here.

See transcripts of the event here.

Researcher Maiya Clark at the Heritage Foundation joined me on the Acquisition Talk podcast to discuss her recent paper on the Navy’s public shipyards as well as other industrial base matters. She finds that the four remaining public shipyards, which service the Navy’s entire nuclear fleet, are all over 100 years old. They are not designed to maintain larger ships like the Ford-class carriers or Block 5 of the Virginia-class submarines.

As a result of under-investment in capital, maintenance delays have been on the rise. Though delays have trended back in the right direction, exceptional procedures like 45% overtime on an on-going basis cannot last forever. During the episode, we discuss:

• The Navy’s Shipyard Infrastructure Optimization Plan (SIOP)
• How a fault line can claim one shipyard in Puget Sound
• What’s wrong with Buy American proposals
• A research agenda for defense supply chains
• The viability of Trusted Capital Marketplace

One major issue concerning the public shipyards is whether they can service a growing fleet. While the Navy’s ship count reached a nadir of 275, Congress was receptive to a plan for 355 ships. More recent discussions have the figure north of 500. Much of that expansion is in non-nuclear surface and unmanned vessels. But it still raises the question about shipyard maintenance capacity.

The Navy’s SIOP capital investment plan of $21 billion over 20 years will recover most of the expected maintenance delays for today’s fleet. Yet this has been underfunded in the past, and will be difficult to get fully funded in the foreseeable future.

I’d like to thank Maiya Clark for joining me on the Acquisition Talk podcast. Check out her reports at the Heritage website, including “U.S. Navy Shipyards Desperately Need Revitalization and a Rethink” and “How Pentagon’s “Trusted Capital” Program Can Secure Financing for Defense Industrial Base“. Listen to her on the Midrats podcast, and watch her event with Rep. Rob Whittman and the GAO’s Diana Maurer.

See highlights and commentary on the discussion here.

Ryan “Stinger” Fishel joined me on the Acquisition Talk podcast to discuss the future of the fighter aircraft community. Ryan is an F-15E pilot for the United States Air Force and a friend whose perspective I’ve benefited from over the past year. The views Ryan expresses in this episode are his own. Throughout the podcast, we discuss a number of timely issues, including:

• Implications of the DARPA AlphaDogfight simulation
• Hot takes on the news of NGAD’s first demonstrator
• Why it’s important to think about self-contained logistics
• How operators fit into the acquisition process
• John Boyd’s legacy on tactics and the mental/moral aspects of war

In the episode, Ryan argues that there is plenty of room for artificial intelligence to automate the tasks of a fighter pilot. However, many aspects of the job seem to require an understanding of the context that’s beyond AI at this point. The battlefield can be a complex place with multiple actors of differing intentions. Escalation has to be managed carefully, as tactical decisions increasingly have operational or strategic implications.

We also discussed the Next Generation Air Dominance (NGAD) program. Recently, the Air Force announced that it built a new demonstrator aircraft in just one year as part of the program using digital engineering and mature subsystems. NGAD isn’t intended to result in just a single aircraft, but progress a family of systems that can be integrated onto a new platform every few years. It hearkens back to how military aircraft used to be developed in the 1940s and 1950s. Though NGAD is controversial, it intends to inject competition into the aerospace industry, which has been going through a long period of consolidation and stagnation.

I’d like to thank Ryan Fishel for joining me on the Acquisition Talk podcast. Here he is talking on the Middle East Brief podcast, including a lot more goodness on the AlphaDogfight, and on the War on the Rocks podcast. He has a couple articles there as well, “Lessons Learned from the Air War Against Islamic State,” and “Self-Defense and Strategic Directions in the Skies Over Syria.” You can find more about some of his references here, including Marshall Michel’s book Clashes about the Vietnam Air War, and the fighter ace Francis Gabreski.

See highlights and commentary on the discussion here.

I was please to host a webinar event with George Mason’s Center for Government Contracting featuring three former Pentagon executives. We discussed my white paper on defense budget reform, which provides an overview of (1) the history of budgeting; (2) why budget reform is necessary for accelerating innovation; and (3) a proposed solution. I argue that the budget is the primary obstacle to transforming the defense force structure away from legacy platforms and toward emerging technologies. If budget line items can be consolidated, allowing more flexibility to start, ramp up, pivot, or cancel projects, it will provide mission-driven organizations the one thing they’ve always lacked: the ability to become true portfolio managers.

I was joined by Katharina McFarland (former Assistant Secretary of Defense for Acquisition), Bill Greenwalt (former SASC staffer and Deputy Assistant Secretary for Industrial Policy), and Bob Daigle (former HASC staffer and Director of Cost Assessment and Program Evaluation). In general, they agree with the idea of budget reform I put forward, but each panelist had their own insights and perspectives to add.

Katharina argued that the defense acquisition process is not agile by design, and it cannot be changed overnight. There are too many people that have equity in each and every program, slowing the entire process down and creating roadblocks to substantial change. She considers the people aspect of the problem, as well as how to create better systems of data collection and analysis to inform decisions that will help move the DoD away from long and bureaucratic processes associated with the budget.

Bill considers the defense budget process as a relic of the Cold War that needs complete change. The DoD attached itself to central planning ideologies because (1) it was the best practices of 1950s firms like Ford Motor and GM; and (2) because the Soviet Union posed an existential threat. Yet as Bill argues, the waterfall planning processes the DoD installed actually led to the rapid decline of US auto-makers in the decades after. Moreover, the US didn’t win the Cold War because its defense management was better than at central planning than the Soviets, but simply because the US had a market economy. With modern tech companies doing agile development and a new Chinese threat, there may be a window to complete overhaul of the defense budget like was done in 1961.

Bob points to the requirements process as the root of many problems with budgeting and accelerating technology. Requirements take several years to get defined, and are detailed to an excruciating level. That detail hen gets reflected in the programs that get budgeted for, creating inflexibility. Bob argues that both requirements and budgets should be less specified — raised up a couple levels — but that the fundamental Planning-Programming-Budgeting-Execution process is sound. Bob argues that defense is too big and complex to change at once, and requires smaller pilot programs that carve out completely new space that can then be scaled.

See highlights and commentary on the discussion here.

Joel Neidig joined me on the Acquisition Talk podcast to discuss how blockchain technology can support the military across a wide range of use-cases including supply chain management, financial transactions, additive manufacturing, secure communications, digital engineering, and much more. He is the co-founder and CEO of SIMBA Chain, a startup that won an early DARPA grant back in 2016 exploring blockchain’s potential for secure communications. The dual-use company has branched out into the military services, providing customers with low-code tools to build a diverse set of applications on top of several blockchain protocols.

For those unfamiliar, blockchain is basically a shared ledger that makes an immutable record of transactions, verified through a peer-to-peer network. The network nodes check and validate transactions for consistency, making it incredibly difficult to attack. Of course, Bitcoin and the use-case for money is a popular application. But Joel explained how SIMBA Chain is working with Boeing and other companies to create a trusted supply chain.

Any digital or physical asset can be given a unique identifier on the blockchain, creating a trusted record of the transfer of goods throughout the supply chain, such as from a producer to a shipping terminal, then to a ship, delivery truck, storage at another supplier, integration onto a component or subsystem, and so on until an end-item is delivered to the customer. This not only protects the supply chain from cyber risks emanating from counterfeit or tampered hardware, but also problems due to non-conforming parts that may be the wrong version or spec.

Supply chain is just one blockchain application among many that could help revolutionize the way government does business and fights in war. While the US government is only putting a million dollars here and there into blockchain, China is putting billions of dollars into their own blockchain capabilities. China is forcing US suppliers like Starbucks and Wal-Mart onto their national blockchain, which will soon be the only way they are able to do business in China. The Pentagon cannot afford to slow-roll its adoption of blockchain because it will be a crucial factor in securing and automating workflows for additive manufacturing, artificial intelligence, financial transactions, and much more.

I’d like to thank Joel Neidig for joining me on the Acquisition Talk podcast. Be sure to check out SIMBA Chain’s website for a ton of information on blockchain, including this short guide for government. Here’s an excellent white paper for blockchain uses in the Department of Defense. Really, take time to read that white paper. Lots of great use cases and background. Here’s Joel speaking on the Azure podcast, on the Future of Money, Governance, and Law podcast, and Frontier podcast.

See highlights and commentary on the discussion here.

I was pleased to have Bryan Clark and Dan Patt join me on the Acquisition Talk podcast to discuss a range of important subjects including mosaic warfare, joint all-domain command and control, the digital century series, systems architecture, and more. Bryan Clark is the Director of the Hudson Institute’s new Center for Defense Concepts and Technologies, where he is joined by a former deputy director at DARPA, Dan Patt. The two make a formidable team, and their center will focus on the application of emerging technologies to military concepts of operation.

In the episode, Dan and Bryan argue that the DoD’s reliance of monolithic platforms — a relic of the Cold War era — makes it increasingly fragile to defeat against peer adversaries. Major systems today are expected to perform numerous missions, requiring them to self-contain sensors, command and control, combat systems, and so forth. This not only increases unit costs and decreases force structure, it limits the number of different ways force packages can be composed. US commanders are thus limited in their options for effecting a result, making them much more predictable and subject to counter-measures.

The alternative is to decompose monolithic platforms into a wide array of smaller systems. While each system itself has fewer capabilities and is less survivable, there will be far more of them. Their lower cost allows them to be attritable. The benefit is magnified by increases to competition and economies of scale. Importantly, commanders will have far more options to decompose and re-compose the force structure.

An important element in the mosaic warfare concept is joint all-domain command and control, or JADC2. This can be described as the network that connects the relevant nodes of the disaggregated force structure, such as between sensor and shooter, and is often called the military “internet-of-things.” With a rise in the need for interfaces, we discuss a path forward to create ad-hoc interoperability between unique system requirements called STITCHES. This by-passes many of the rigidities faced in the pursuit of an agreement on global standards common in today’s modular open systems architectures.

I’d like to thank Dan Patt and Bryan Clark for joining me on the Acquisition Talk podcast. Be sure to read their excellent CSBA paper on Mosaic Warfare, as well as their various Breaking Defense articles including on JADC2 and the Digital Century Series, They have an excellent OTH article on Decision Maneuver.  Bryan is featured on this article on the Navy’s next-gen fighter. I’d also like to thank David Gerson for pointing me in their direction, and for sending me these two briefings on STITCHES (which I’ve uploaded here and here).

See highlights and commentary on the discussion here.

In a special webinar event of the Acquisition Talk podcast, I spoke with the excellent Ben McMartin. He is a managing partner at the Public Spend Forum, and before that was chief of the Acquisition Management Office at the Army’s CCDC Ground Vehicle Systems Center. He has been at the center of the recent rise of Other Transactions contracting in the Department of Defense, founding the Acquisition Innovation Roadshow and leading the Joint Acquisition Agility Summit.

In the episode, Ben argues that Other Transactions — a method of contracting outside the Federal Acquisition Regulation — is not simply a way to cut corners or move faster. Instead, it is a way to collaborate with industry, which is particularly important in the research and development stage. If the level of collaboration with industry starts to feel “dirty and wrong,” then you’re almost doing it right! This is important because R&D efforts cannot be priced like commodities. Instead, the contract terms must be flexible to updated information. What matters is how much funding is available, and what are the relevant alternative actions that could be a better use of funds.

Ben provides a ton of insights on contracting, barriers to entry, and more:

• Why industry buy-in will drive continued OTA growth
• How OTA consortia grew up in response to researchers wanting to outsource bookkeeping
• What are the two ways to OTA?
• How to determine value outside of price
• The lack of success stories with follow-on production

Two big insights for me were: (1) prototyping must be increased at the subsystem level using OTAs and other authorities like 2373 for experimental purposes, and then rather than transition to an OTA production follow-on, should more realistically be transitioned to the large primes for integration; and (2) that there is no objective cost for real innovative products from non-traditionals, the buyer must know the technologies and relevant analogies and do a more subjective evaluation to triangular a “fair and reasonable” price.

See highlights and commentary on the discussion here.

The sibling team that is Amanda Bresler and Alex Bresler joined me on the Acquisition Talk podcast to discuss their recent analysis on defense contracts, the industrial base, and innovation programs. They found that between 2010 and 2019, the number of unique defense vendors had fallen from nearly 80,000 to just over 50,000 despite a 286 percent increase the the number of transactions. Even more precipitous was the decline of new entrants, falling from over 15,000 to nearly 4,000. During the episode we dive into the data and discuss:

• Whether DoD innovation programs are stovepiped
• How new entrants receive a small fraction of SBIR/STTR Phase I awards
• The opacity of Other Transactions data
• How companies market themselves to the agencies
• Strategies for improving new entrant transitions
• (Bonus) Overtime discussion at the end on China and great power competition

One of the recommendations Amanda and Alex float is to incentivize the government and prime contractors to allocate a percentage of their funding to “proven innovators.” This sounds a lot like what Steve Blank recommended to me last month. The title “proven innovator” wouldn’t be given to just any firm, but new entrants that have done business with defense in the past and have tested solutions to meet military requirements. In effect, it could be managed much like the set-aside programs for women-owned, HUBzone, and so forth.

The Breslers have worked to close the information gap through their own work on a SBIR Phase II contract. Called Sheldon, the information system will bring together disparate sources to aid in market research. The need is great. They found nearly 50 percent of companies received zero or one follow-on contracts after SBIR/STTR, and just 3.5 percent of companies won a startling 80 percent of all follow-on contracts by value.

I’d like to thanks Amanda Bresler and Alex Bresler for joining me on the Acquisition Talk podcast. Be sure to read their two Naval Postgraduate School symposium papers: “The Effect of Defense-Sponsored Innovation Programs on the Military’s Industrial Base” and “Bridging the Gap: Improving DoD-Backed Innovation Programs to Enhance the Adoption of Innovative Technology Throughout the Armed Services.” Here is Amanda speaking with Rick Dunn about her findings. You can find out more about their company, PW Communications, and their SBIR project Sheldon.

See highlights and commentary on the discussion here.

Three of the co-founders of the Air Force Ventures program at AFWERX joined me on the Acquisition Talk podcast to discuss how they transition startups and new technologies across the valley of death and into major programs of record. While AFWERX is only approaching its third birthday, they’ve had some tremendous success. Over the past 18 months, they’ve contracted with 1,000 companies — many of which were new to doing business with the DoD. They brought in over $1 billion in matching venture capital dollars in 2019, more than the past 15 years combined.

And yet, one of the often head complaints is that the DoD spreads small dollars far-and-wide rather than making big bets on non-traditional firms. The process for changing that narrative was the focus of our conversation, including:

• The Strategic Finance (STRATFI) program and “pitch-bowls”
• How to create a vibrant industrial base without creating new defense primes
• Reducing time to first program dollar from 6 years to a matter of months
• Lofty goals of repeatedly creating new dual-use unicorns
• How to line up funding that isn’t tied to specific solutions or vendors

A lot of people perhaps imagine the people at AFWERX having coffee on Sand Hill road with VCs and startups, but in reality almost all of their time is spent refining the back end of the acquisition process. For example, AFWERX worked with organic software developers at Hill Air Force Base to automate several parts of the contract administration process, so less time is spent copying information from PDFs. As a result, AFWERX has been able to reduce time to contract to about one month, a target many contracting offices have been unable to achieve.

I’d like to thank Chris Benson, Steve Lauver, and Jason Rathje for joining me on the Acquisition Talk podcast. Spend some time reading the AFWERX Book and listening to the Disruptive AF podcast. There’s lots more to learn from the AFWERX newsletter as well. Jason has a couple tremendous War on the Rocks articles, including “The Rift Between Silicon Valley and the Pentagon is Economic, not Moral,” and “Solutions, Garbage Cans, and Platforms: How to Drive Commercial Solutions into the Military.” Read them if you haven’t. Here is Steve on the Air Force podcast and a short YouTube video on doing business with startups. And here is an excellent brief from Chris and Austin DeLorme from the AcquisitionX conference on Air Force Ventures.

See highlights and commentary on the discussion here.

Steve Blank joined me on the Acquisition Talk podcast to discuss the urgency of defense innovation in a world of authoritarian peer competitors. Steve is a serial entrepreneur, a founder of Hacking 4 Defense, a member of the Defense Business Board, a former Air Force officer, and a leader of the lean methodology movement. The conversation takes us to number of important areas, including:

• Why the Chinese couldn’t have done more damage to national defense than the Pentagon’s own requirements
• How agile programs like ABMS and Kessel Run are educating leadership
• Whether defense accelerators are stuck doing “innovation theater”
• How no startup could afford to deal with the DoD without a fanatical billionaire
• How most people who think they’re visionaries are actually hallucinating

When Steve talks to defense staffers, they think “lean” refers to reducing headcount — and therefore less budgets, jobs, and influence. He explains how that is exactly wrong. Lean is a completely different way of doing business that can be contrasted with the 20th century model defined by waterfall. The difference between lean processes and waterfall is demarcated to some degree by a generational gap. The junior grades seem to get it. The question is whether the leadership can get on-board before we reach a crisis point. Steve points to Chris Brose’s new book as a wake up call that the United States might not win the next major war without a new way of approaching acquisition.

While there are some hopeful signs that defense leaders are beginning to understand 21st century commercial business practices, he cautions how tacking small changes on a much larger system will not make progress. The entirety of defense acquisition process needs to be revamped, including the industrial base. Existing prime contractors are essentially sheet-metal benders, Steve argues, and software-native firms would be able to out-compete them in hardware if given a fair chance. But many in the commercial sector think the $1 million SBIR grants given to startups where everyone’s a winner without a transition oath into billion-dollar programs is deterimental. The goal isn’t to show up on the field, Steve says, but to win the game.

See highlights and commentary on the discussion here.

Alexander Canizares joined me on the Acquisition Talk podcast to discuss the legal side of the acquisition system. He is a senior counsel at Perkins-Coie, a lecturer at George Washington Law School, and a former trial attorney at the Department of Justice. Alex provides insights on a number of topics, including:

• Whether an OTA contract can be protested
• The Cybersecurity Maturity Model Certification (CMMC)
• What’s new in pricing policy for sole source contracts
• Whether VC funding disqualifies businesses from SBA loans
• The Procurement Collusion Task Force

Throughout the episode, Alex relates a fundamental tension in procurement law that I would describe as the tension between the desire to move with commercial speed and the fact that government is not just a big firm. For example, the CMMC addresses a real problem for national security but has a number of unknowns in terms of compliance issues. Bid protests help create fair procurement processes but can upset agency timelines and create risk aversion. Cost or pricing data requirements prevent abusive sole-source pricing but may deter competition from commercial firms.

One of the highlights was the discussion on whether an Other Transaction Authority (OTA) contract can be protested or not. Alex explains how the Court of Federal Claims rejected SpaceX’s bid protest of an OTA because they are not considered procurement contracts under the Tucker Act — they are outside the Federal Acquisition Regulation. The caveat is that a protest can be raised over whether the contract was able to use an OTA in the first place. For example, Oracle successfully protested an OTA follow-on production award because the agency did not specify in the original prototyping solicitation that follow-on production was available, citing the DoD OTA Guide.

I’d like to thank Alex for joining me on the Acquisition Talk podcast. Be sure to check out his various articles and webinars, including “Small Business Loans and the CARES Act: What PE and VC Investors Need to Know,” “Cost or Pricing Data: Emerging Developments and Risk Areas,” and much more. Here’s another timely article: “Bloomberg Article Re COVID-19 Investigations.”

See highlights and commentary on the discussion here.

Pete Newell joined me on the Acquisition Talk podcast to discuss a range of issues around problem curation and lean methodology. He is the CEO of BMNT, a firm that helps clients build problem solving teams to address significant issues. He is also on the board of Hacking 4 Defense and is a former Colonel who led the Army’s Rapid Equipping Force just prior to retiring. During the episode, we discuss a range of issues including:

• How to build and maintain discipline through the innovation pipeline
• Advice for business leaders in the Covid-19 crisis
• How Hacking 4 Defense is developing a new generation of entrepreneurs
• What it means to be disciplined in an agile/iterative environment
• Ways large enterprises can break away from their self-sabotaging processes

The episode features a host of lessons learned from Pete’s years of experience transitioning technologies. During his time leading the Rapid Equipping Force, Pete was able to take a $150 million budget and build an investment portfolio more than five times that size through partnerships and other methods. Ultimately, the REF transitioned 170 programs into production during Pete’s time there.

Pete explains how the Pentagon has become quite good at opening the aperture for new companies and ideas to get small projects started. More work is needed, however, on giving companies showing success multi-year/multi-million dollar programs of record. One problem he points to is in the handoff phases through the innovation pipeline. He recommends thinking about: (1) how we move people through stages; (2) how contract language should change as projects mature; and (3) what sources of funding are available. Until the government is able to demonstrate more successful transitions, it won’t impact the psyche of entrepreneurs and investors who still look upon public sector with suspicion.

I’d like to thank Pete Newell for joining me on Acquisition Talk, and his communications manager Terri Vanech for making this possible. Be sure to read Pete’s articles, including this one with Steve Blank in the Harvard Business Review, What Your Innovation Process Should Look Like. A couple other notables include Self-Sabotaging Systems: Why Doing the Right Thing Results in Failure, and Leading Dual-Use Companies through the Covid-19 Crisis. Check out his various articles on LinkedIn and on the BMNT blog. Watch Pete’s appearances on Government Matters, and listen to him on the What’s Next podcast, the Time4Coffee podcast, and The Innovators podcast. Learn more about Hacking 4 Defense here.

See highlights and commentary on the discussion here.

Peter Levine joined me on the Acquisition Talk podcast about his new book, Defense Management Reform: How to Make the Pentagon Work Better and Cost Less. He was a career professional staff member for Congress and former Deputy Chief Management Officer. During our wide-ranging conversation, we discuss:

• Why the DoD is more like an economy than a business
• The balance between experimentation and discipline
• Views on Middle-Tier and OTAs
• How budgets can be cherry-picked to meet a strategy
• The assertion of civilian control

Peter argues that the 2009 Weapon Systems Acquisition Reform Act (WSARA) should be viewed as a huge success on its own terms. The 1990s emphasis on deregulation and commercial item contracting was extremely important for less complex procurements, but created problems for major programs. Too often major programs were initiated without buying down sufficient technical risk through experimentation and analysis. This led to a great deal of cost growth in the 2000s.

By adding discipline, such as raising the status of independent cost estimates, programs started after WSARA have shown far greater stability and less cost growth. But there are no silver bullets, Peter reminds us. The valid criticism of WSARA is that it brought stability at the expense of innovation. This led to the 2015-present reforms re-emphasizing rapid acquisition, iterative development, and commercial procedures. These concepts are not new, and while they may apply well to software efforts, they does not obviate the need for cost, schedule, and technical baselines ahead of Milestone B.

I’d like to thank Peter Levine for joining me on the Acquisition Talk podcast. Remember to pick up a copy of his book, Defense Management Reform: How to Make the Pentagon Work Better and Cost Less. Read his various articles at War on the Rocks including Ten Rules for Defense Mgmt Reform and a Reform Agenda for the Next Administration, on Breaking Defense, and at IDA. Watch Peter’s numerous appearances on Government Matters, including the latest episode discussing his book. Here are links to the reports Peter recommends: Defense Innovation Board SWAP, National Commission on Service, and the NatSec Commission on AI.

See highlights and commentary on the discussion here.

I was pleased to speak with Navy Lieutenant Sean Lavelle on the Acquisition Talk podcast. He is the founder and lead of the iLoc development team, which rapidly deploys valuable software capabilities to the Navy’s P-8 fleet. During the episode, Sean describes how P-8 aviators took it upon themselves to code new applications that could solve hard problems with software rather than pencil and paper. One application reduced reporting errors by 90 percent.

Sean provides a compelling vision of the future where operators also take on duties as software developers or product managers. This doesn’t require everyone to have coding skills. The P-8A’s organic software team only has six rotating developers. Sean argues it is better to have many users involved in defining the business logic with a small team of software developers rather than a large software team with little access to user input. The result is a continuous process where knowledge from the military operators can quickly get embodied in software and deployed to the entire fleet. Sean calls this “software-defined tactics,” and it’s a compelling concept indeed.

One of the many benefits is that it decreases the burden of training as operators are constantly involved in small changes. This is in contrast to the large and infrequent software drops from contractors, where increased capability often comes at the expense of increased complexity. It usually takes 3 or 4 years, for example, to train a P-8 tactical coordinator. However, with the iLoc tools, a trainee of 6 months can reach a level of proficiency that used to take two or more years. Agile in-house software development vastly decreases complexity at the same time in generates new capabilities, allowing the US military to scale much more rapidly in the event of conflict with a great power.

I’d like to thank Lt. Sean Lavelle for joining me on the Acquisition Talk podcast. I’d also like to give a shout out to CDR Michael Kamas and CDR Jennifer Cragg for their support. I highly recommend that you read Sean’s articles in War on the Rocks — Fixing the Navy’s Software and A Solution to the US Military’s Scaling Problem — and in USNI Blog — The Navy’s Kessel Run, Presence vs. Posture, An Integrated Approach to Peer Competition, and Guiding Honor with Evidence.

See highlights and commentary on the discussion here.

Tambrein Bates joined me on the Acquisition Talk podcast to discuss his role in helping build an ecosystem of over 40,000 innovators in support of Special Operations Command (SOCOM). For the last five years, Tambrein has been the director of SOFWERX, and before that spent a career in US Army special operations. During the episode, we touch on:

• The Law of Diffusion of Innovation
• When to use a prize rather than a contract
• The horses vs. jockeys view of innovation
• Moving from a 2-D to a 4-D view of risk
• Whether we set a low bar in defense acquisition

SOFWERX is a non-profit chartered by SOCOM and DEFENSEWERX to transition commercial technology into the military. Tambrein says that commercial R&D has bypassed the Pentagon, and there is a great deal of potential for recombining existing technologies in new and provocative ways.

SOFWERX clients in government tend to access SOFWERX to: (1) help them think clearly about programs/technologies; (2) remove administrative burdens; and (3) access their network of firms and innovators that can address a wide range of requirements from submarines to satellites. SOFWERX is not a “front door” to the acquisition system, but remains important piece to accelerating tech transition.

See highlights and commentary on the discussion here.

In this episode of Acquisition Talk, I speak with Dan Ward. He spent 20 years in the US Air Force, and has just released his third book called Lift: Innovation Lessons from Flying Machines that ALMOST Worked and the People who NEARLY Flew Them. During the conversation, we discuss a wide range of topics related to accelerating innovation, including:

• How the Wright brothers built the first airplane with 1/73rd the funds
• Why waterfall development is “like gluing feathers on your arms as a way to fly.”
• Why contracts should add a termination clause if costs grow 15%
• The importance of diversity to developments
• Why economies of scale rarely pan out
• How the Navy used an X-Box controller at less than 1/100th the cost

During the episode, Dan explains why predictions become increasingly fragile over time. If large projects are broken down into smaller tasks, the greatest advance can be achieved for lower costs and in less time. While there is no longer a static technical baseline to measure performance against, the iterative learning process allows us to count on a positive outcome even if we can’t define it ahead of time.

Dan points to policies that explicitly favor modular projects and contracts. He recommends we all read FAR Part 39, acquisition of IT. In practice, however, many government officials continue to favor large monolithic contracts. We discuss how government can shift toward more modular contracts. History has shown how incremental steps emphasizing speed, thrift, and simplicity actually allows us to innovate faster. This pattern comes out clearly in Dan’s new book on the pioneers of aviation.

See highlights and commentary on the discussion here.

In this special episode of Acquisition Talk, we listen in on a conversation about the effects of COVID-19 on government contracting, including (1) the Defense Production Act, (2) emergency relief stimulus, (3) government contract data in response to coronavirus and business opportunities, and (4) guidance from government on navigating the crisis. It was recorded for George Mason University’s new series, the Mason Executive Podcast.

The episode features Dr. Jerry McGinn, executive director at the Center for Government Contracting, Dr. Bret Josephson, podcast host and Professor of Marketing, and myself. We discuss a recent report we released at the Center. It describes how more than $200 million has been obligated to contracts specifically for COVID-19 as of March 24. This includes $153 million for research and development, $34 million for medical equipment and services, $13 million to ventilators, $3.5 million for tests/panels, $2.5 million for personal protective equipment.

Jerry is an expert on the Defense Production Act (DPA), having overseen the program during his time in the Pentagon as Principal Deputy Director of the Office of Manufacturing and Industrial Base Policy. While the program usually has about $100 million in the fund, the new $2 trillion stimulus package that just passed the Senate includes $3 billion. President Trump delegated DPA authorities to Health and Human Services. As Jerry explained, “it gives HHS the authority to change the rating of company contracts and put the government order at the top of the line.”

I’d like to thank our podcast host Bret Josephson for interviewing Dr. Jerry McGinn and myself on his Mason Executive Podcast, and allowing me to re-post it here. Find out more about George Mason University’s School of Business, including my home the Center for Government Contracting. Listen to Bret Josephson being interviewed on the business of government. Here is Jerry’s piece on the Defense Production Act. Jerry was also featured on Government Matters, watch the whole interview. And again, you can find the Center’s Covid-19 report here.

See highlights and commentary on the discussion here.

Matt Steckman joined me on the Acquisition Talk podcast to discuss about a wide range of issues facing growth-stage companies in the defense industry. He is the Chief Revenue Officer of Anduril Industries. Topics include:

• Edge computing and the future of artificial intelligence
• How to think about risk taking in product development
• The beauty of the Air Force’s approach to enterprise tools
• How cost and pricing data becomes self-reinforcing
• Why the security clearance process is a barrier to entry

The podcast features a discussion of transitioning technology across the “valley of death” to a program of record. Matt applauds government efforts to make it easier for new entrants to get small government contracts. However, it often takes years to get funding lined up through a program office. While large incumbents can manage the system by having a portfolio of projects at various stages, new entrants may face a gap in revenues for multiple years. As Matt reminds us, Anduril didn’t even exist when this year’s budgets were being planned more than two years ago.

In order to bridge the valley of death, Matt recommends small companies field capabilities early and have honest conversations with government about what it takes to stay viable. You will often find an empathetic partner. He also provides three things the DoD can do that will allow industry to rise up and participate. (1) recompete programs more often; (2)  if the winner is new, be willing to move larger amounts of funds; and (3) increase flexibility to move funding within the fiscal year.

I’d like to thank Matt Steckman for joining me on the Acquisition Talk podcast. I recommend you read his articles on Medium, “Pilot to Production, Leaping the Valley of Death in Defense Contracting,” and “Access Impedes Innovation in Defense — There is a Simple Solution.” Here is an NBC news segment on Anduril Industries.

See highlights and commentary on the discussion here.

Tate Nurkin joined me on the Acquisition Talk podcast to discuss China’s weapons technologies. He is the founder of the OTH Intelligence Group, and a non-resident senior fellow with the Atlantic Council. We touch on a wide range of topics, including:

• Progress on civil-military integration
• Volume and velocity in Chinese development
• Advances in autonomous systems and drone swarms
• The fast pace of change in hypersonic missiles
• China’s PLA Navy shipbuilding
• How the United States needs to work better with other countries
• Kai-Fu Lee’s take on techno-utilitarianism
• The Army’s approach to Future Vertical Lift

Tate recognizes the rapid progress of China’s progress since the watershed 2013-2014 reforms, and indeed the number of Chinese firms marketing unmanned systems. For example, China has successfully demonstrated swarms of 119 UAVs and 56 unmanned surface maritime vessels. However, he argues that we have a tendency to overplay the challenges facing the United States defense industry, and underplay those facing China.

The Chinese defense industry still faces its own hurdles, including the inefficiency of state owned enterprises and persistent troubles developing aircraft engines. We should also treat the operational effectiveness of China’s hypersonic missile, the DF-17, with a dose of skepticism. Yet overall, it is impressive how fast China can get new applications out into the field. This should force the United States to think hard about the way it conducts business, and how that can be sped up to match the threat.

I’d like to thanks Tate Nurkin for joining me on the Acquisition Talk podcast. Follow him on Twitter @TateNurkin. I highly recommend you read the study he led at IHS, “China’s Advanced Weapons Systems.” I’ve excerpted some of that here. Listen to his podcast with CSIS, “UAV Technology in China.” I invite you to read his paper, “A candle in the dark: US national security strategy for artificial intelligence,” co-authored with Stephen Rodriguez and with a forward by former DepSec Ash Carter. Tate has testified before Congress a few times, such as for “Implications of China’s Military Modernization” and “Hearing on China’s Space and Counterspace Programs.” Read some additional articles here.

See highlights and commentary on the discussion here.

In this episode of the Acquisition Talk podcast, I speak with Richard Dunn about commercial contracting, and in particular, Other Transactions Authority (OTAs). He is the founder of the Strategic Institute, and has had a long career in government including General Counsel of DARPA.

Rick argues that the traditional Federal Acquisition Regulation (FAR) does not have enough flexibility to allow for commercial contracting. Instead of focusing on value and innovation, the FAR narrows government’s focus on cost. The system is “fundamentally unfair,” he said. If it were fair, we should expect to see greater business participation. One study found that just the top ten cost drivers contribute to an 18 percent cost premium. Why would any firm take on that cost at the expense of being noncompetitive in their commercial markets?

Other Transactions, by contrast, allow the government to legally negotiate terms and conditions without reference to the FAR. In other words, the government can do business like any commercial firm, leading to lower transaction costs. However, the adoption of OTs have been stymied for decades because of proactive resistance. Preexisting learning stops subsequent learning, and contracting officers tend to think in terms of FAR language. Rick suggests how to break out of the mindset.

During the conversation, we discussed:

• The reason Norm Augustine said Lockheed couldn’t do commercial business
• How contract regulations became so burdensome
• Why are most OT consortia are only “so-called” consortia
• The effect of telling contract officers they will go to jail for non-compliance
• How OTs “shop problems” while the FAR “shops requirements”
• How startups can use unfunded OTs to gain access to government capital and users
• Why payable milestones are outside of the FAR
• The history of OTs, including Paul Demling, NASA, and the Telestar satellite

I’d like to thank Richard Dunn for joining me on the Acquisition Talk podcast. I recommend his short articles at the Strategic Institute, including those related to our discussion: “The Virtue of Unlearning,” “Milestone Payments,” and “Consortia, the Lost Vision.” Here is a good video of Rick speaking with Capt. David Rothzeid. I recommend Rick’s book, Exploding Fuel Tanks.

Rick recommends this OT resource: The applicability of certain procurement-related statutes to DOD “Other Transactions.” Also, read the 2018 DoD Other Transactions Guide.

See highlights and commentary on the discussion here.

Soraya Correa joined me on the Acquisition Talk podcast to discuss small business programs, the procurement innovation lab, workforce training programs, why contracting officers might be risk averse, industry engagement, and much more. She is the Chief Procurement Officer for the Department of Homeland Security, and one of our government’s most impactful business leaders.

During the episode, Ms. Correa describes how she has taken a different approach to acquisition reform. As we often see in the Pentagon and as it is instigated by Congress, acquisition reform usually means trying to streamline regulations while creating new parallel structures (e.g., middle-tier acquisition, urgent capabilities, software, etc.). Ms. Correa, however, recognized that many authorities already exist. Real change comes from focusing on developing and then empowering people. “I’m not trying to change the rules,” she said, “I’m trying to change how we think about the rules.”

We discuss why, on the margin, leadership should focus on the inputs and trust that the outputs will take care of themselves. To that end, Ms. Correa has nurtured several workforce training and mentoring programs. Moreover, she set up an in-house “consultancy” to help those professionals innovate from the bottom up. The Federal Acquisition Regulation isn’t overly restrictive, Ms. Correa finds, instead it is risk aversion on the part of the workforce. Using her leadership position and backed by a long tenure, Ms. Correa provides the necessary top cover to allow her workforce to execute great solutions.

I’d like to thank Soraya Correa for joining me on the Acquisition Talk podcast. She is a frequent communicator, numerous videos are available on You Tube. She has been a recurring guest on Government Matters, watch them all! Another good interview is here, and you can find out her thoughts on business automation here. Listen to Ms. Correa on the “Let’s Talk about IT” podcast. You can learn more about doing business with DHS here, and career opportunities are here. And here is that OFPP myth buster memo.

See highlights and commentary on the discussion here.

Dr. Richard Connolly joined me on the Acquisition Talk podcast to discuss a wide range of issues, including Russia’s GPV modernization programs, the effect of sanctions, whether Russia can produce hypersonics in large numbers, dependence on oil, access to commercial technology, and even acquisition reform in the United Kingdom. Dr. Connolly is the director of the Center for Russian, European, and Eurasian Studies (CREES) at Birmingham University, and he is an Associate Fellow at Chatham House.

The discussion features an argument Dr. Connolly made about how to convert Russian military spending from rubles to dollars. The standard methodology uses the Market Exchange Rate (MER), which puts Russia’s economy on the same level as Spain’s, and their military spending comes out to around $61 billion. That may give the misleading impression that Russia’s military capability is perhaps less than one-tenth that of the United States, which spends over $700 billion. Dr. Connolly convincingly argues that the Purchasing Power Parity is a better measure, in which case Russia’s perceived military spending increases to $160 billion.

The MER reflects the supply and demand for rubles in US dollars to balance trade. The problem is that traded goods are not reflective of prices Russia’s military planners face. For example, food, housing, haircuts, and worker salaries are not reflected in the MER. Even after adjusting for the MER, consumer prices are less than half as much as they are in the United States — meaning Russia’s military planners can afford more.

The PPP provides a more apples-to-apples comparison for the quantity of real resources made available to military planners. Preliminary results from Dr. Connolly’s efforts to construct a PPP for military inputs show that it is close to the same value as the PPP for consumer goods. Dr. Connolly concludes that the PPP is roughly right whereas the MER is precisely wrong. The same is likely true of other low-income countries like China and Iran.

I’d like to thank Dr. Connolly for joining me on the Acquisition Talk podcast. Read his War on the Rocks article on Russia’s military expenditure, based on a longer paper written for CNA. Watch his great CSIS interview on Russia. Check out his books, Russia’s Response to Sanctions, Post-Soviet Affairs, and The Economic Sources of Social Order Development in Post-Socialist Eastern Europe. See more of his publications here, including an excellent procurement update on the GPV 2027 program, Russia’s New State Armaments Program.

See highlights and commentary on the discussion here.

In this episode of Acquisition Talk, I speak with Dr. John Kuehn. He is a professor of military history at the Army Command and General Staff College and former naval aviator. We discussed innovation in the interwar Navy, the newly created Space Force, how constraints may propel innovation, whether kinetic warfare is more important on land or at sea, what we can learn from Arthur C. Clarke, how the Netherlands invented wolfpack submarine tactics, and much more.

We had an in depth discussion of two of John’s books, Agents of Innovation and America’s First General Staff. The Navy’s General Board helped bring about the force that won World War II. One of the many aspects of its wisdom was withholding judgment until after experimentation. Change was helped along by post-World War I arms reduction treaties which limited capital shipbuilding and banned overseas bases in the Pacific. This led to gradual innovation away from the battleship and toward sea-based logistics, floating dry docks, long range submarines, carrier aviation, and more. John argues that a paucity of resources created an imperative to innovate.

The discussion turns to the 21st century. John argued a new arms reduction treaty would benefit the US and the world. While he doesn’t think budgets should be drastically cut, he is no fan of largess. A holiday on aircraft carrier construction, for example, would force military planners to really grapple with new challenges like anti-access. I ask about whether China would agree to limitations. Listen to the whole thing to hear his contrarian — and well-informed — point of view.

I’d like to thank John for joining me on the Acquisition Talk podcast. Check out all of his books available on Amazon. I’ve uploaded John’s excellent 2017 report to the CNO on Fleet Design. Watch some of his lectures available on YouTube. Here is a nice paper from John’s student, Innovation from the Sea, on unmanned aerial vehicle policy. He recommends that you check out a great PowerPoint presentation from Jim Corum, Development of German Army Operational Doctrine in the Interwar Period.

See highlights and commentary on the discussion here.

I was please to speak with Lt. Gen. David Deptula (ret.) on the Acquisition Talk podcast. He is currently Dean at the Mitchell Institute for Aerospace Studies and, as I learned in the episode, he was the only Air Force pilot to be mission ready to fly an F-15 all the way from Lieutenant to Lt. General. He also helped plan the air campaign in Desert Storm and was the first Deputy Chief of Staff for ISR including unmanned aircraft.

The episode starts with a discussion on his study of mosaic warfare, or the concept of disaggregating functions into simpler systems which are tied together in a broader operational network. These “tiles” will work alongside complex multi-mission platforms already fielded, complementing their capabilities with lower-cost solutions that are attritable. David dispels myths about mosaic warfare, such as resilience problems stemming from the need to be connected all the time in a single architecture. Mosaic is about building in adaptation and resiliency.

The conversation moves onto Dr. William Roper’s vision for a digital century series aircraft program, reminiscent of the experimentation of several diverse fighter aircraft during the 1950s. David finds the allusion unfortunate because he doesn’t expect the Air Force to procure large batches of different aircraft. However, he agrees with the principles of incrementally prototyping several designs and continuously maturing them, even if they aren’t procured. He also agrees with Roper’s decision to raise the Next Generation Air Dominance (NGAD) program into a Program Executive Office (PEO) that can pursue multiple concepts with gradual integration, and to this end supports a mission-funded budget account.

The episode also features discussions on digital engineering, the combat cloud, why the military is the as conservative as the catholic church, design as a process of discovery, how tactical decisions centralized between Desert Storm and Afghanistan, the questions of mobilization and resourcing the strategy, and ways to think about the F-15EX purchase.

I’d like to thank Lt. Gen David Deptula (ret.) for joining me. See more of his great work at the Mitchell Institute, including force sizing methods in The Force We Need and a great empirical paper on USAF inventory from 1950-2017, Arsenal of Airpower. He also writes relatively frequently at Breaking Defense, including an interesting piece that argues low bomber availability rates are a sign of high demand more than poor management. Here is David on the NGAD program. And here is David speaking with Vago Muridian about Nuclear C2 and F-15s. Be sure to listen to him on the Chrome 360 podcast discussing his experience in Desert Storm, highly recommended.

See highlights and commentary on the discussion here.

Andrew Hunter, director of the defense-industrial group at CSIS, joined me on the Acquisition Talk podcast to discuss a set of papers on adaptable systems, or systems that are based on hardware but defined by software. One of the defining features of adaptable systems is that they can be upgraded on shorter time frames than the usual 5+ year block upgrade cycle that traditional platforms have gone through. Yet the acquisition system is strained to accommodate such agile developments. We discuss challenges including budget flexibility, the requirements process, earned value management, cost and pricing data, the program office structure, and more.

The discussion also touches on acquisition reform, including the breakup of the Acquisition, Technology, & Logistics office into two undersecretaries — one for Research & Engineering and another for Acquisition & Sustainment. Andrew discusses why he was skeptical of the reform early on, and how he thinks it can work out. One issue is the messaging about culture. USD(A&S) cannot be thought of as simply cost conscious because it controls about 70% of technology insertion. Another issue is lines of authority, such as whether USD(R&E) will take over the (optional) Milestone A decision to initiate prototyping. Yet both undersecretaries have been losing control as many decisions are delegated to the services.

The podcast finishes up with a discussion of the industrial base. We talk about innovation hubs and whether they are lowering barriers to entry, the decline and then stabilization of new firm entry into defense, and how small business face difficulties graduating into larger firms. Andrew says industrial consolidation hasn’t reached new levels of concern, but he will keep an eye out for further developments.

See highlights and commentary on the discussion here.

Jim Hasik joined me on the Acquisition Talk podcast to discuss a wide range of topics. He was a former naval officer and long time industry consultant, now with the Center for Government Contracting at GMU and Renaissance Strategic Advisers. During the episode, I ask Jim to reflect on why the Better Buying Power (BBP) initiatives rode into the sunset, how he views the proposed UTC-Raytheon merger, what he thinks about the revolving door and the “iron triangle”, the impact of Buy American laws such as those affecting the FFG(X) program, how we can bend the cost curve to put an end to the 16th of Augustine’s infamous laws, and what Peter Thiel meant when he said “competition is for losers.”

The episode also features a discussion of the B-21 Raider. Jim says there is not much publicly known about the manned bomber program, but argues that more consideration should have been given to making the system remotely piloted. He discusses the tradeoffs in platform design, and speculates on reasons why the Air Force chose to make it manned. Some issues include targeting mobile objectives, the role of culture, and survivability of remote piloting with the increasing vulnerability of space communications.

Jim provides a primer in the challenges of intellectual property as well, a topic which has seen some debate and new policy rollouts in the Army. He discusses three situations in which government may need to purchase intellectual property, including for repair, modifications, and system re-buys. In such circumstances, the original system developer may gain a monopoly position, but not in the traditional sense because it is a regulated monopoly dealing with a monopsony customer (single-buyer). Jim illuminates how a fair deal can be struck because government and contractors have different time-values of money.

I’d like to thank Jim for coming on the Acquisition Talk podcast. Be sure to check out his books including Arms and Innovation: Entrepreneurship and Alliances in the Twenty-First Century Defense Industry and The Precision Revolution: GPS and the Future of Aerial Warfare. He has a new book coming out from Texas A&M based on his dissertation, MRAP: Marking Military Innovation. You can find his website/blog here, and he has also been featured on defense outlets like Defense News. Here is Jim on Government Matters discussing the revolving door. And don’t forget his essay on John Boyd, “Beyond the Hagiography,” and another good one on the defense reform movement.

See highlights and commentary on the discussion here.

I was pleased to have Don Vandergriff on the Acquistion Talk podcast. Don is a prolific educator of military training and strategy, and he has a new book out, Adopting Mission Command. During the episode, we discuss how modern organizations have been built around notions scientific management developed by people like Frederick Winslow Taylor. These methods are great for well-defined problems which can be broken down into sequential steps and optimized. It led to an education system that values checklist procedures and creating interchangeable workers for an assembly line.

For many years Don has been at the forefront of pushing military training to go beyond Taylorism. He looks to the wisdom of German methods of mission command, or auftragstaktik, that flourished toward the late 19th and first half of the 20th centuries. The basic idea is to determine commanders’ intent and empower subordinates to interpret the intent and even redirect orders depending on fast changing circumstances. This requires a type of training that produces critical thinkers and decisive decision-makers rather than training that emphasizes process without regard for context.

During the episode, we discuss outcomes based training and education, the impact of centralization and hierarchy, how to learn from mistakes, the role of moral courage, why mission command is a two-way street, how difficult it is to write a good intent, and much more. The principles discussed by Don are applicable to defense acquisition as well. Both military operations and acquisition are highly uncertain environments with fast changing information. Building a positive culture based on trust can vastly improve effectiveness by delegating responsibility within the scope of commander’s intent — rather than detailing a laundry list of parameters to be measured by.

I’d like to thank Don for joining me on Acquisition Talk. Be sure to check out all of Don’s books on Amazon. Here is a good selection of articles and videos, as well as a good article on “The U.S. Army Culture is French!” Be sure to check out his three excellent episodes on the POGO podcast, two of which are with the estimable Bruce Gudmundsson: “Tactical Decision Games,” “Military Personnel Reform,” and “Mission Command.” Don also recommends a book from Martin Samuels, “Piercing the Fog of War.”

See highlights and commentary on the discussion here.

I was pleased to speak with Will Thomas on the Acquisition Talk podcast. He is a senior science policy analyst at the American Institute of Physics, and is a historian of science and technology. His book is Rational Action: The Sciences of Policy in Britain and America, 1940-1960. There is a ton of interesting facts and useful analysis in the history of how the military learned how to learn, with clear application for today’s debates on innovation.

During the discussion we touch on a wide-range of issues, including the origins of operations research, whether a market in defense can actually exist, the separation of R&D from production — and whether software considerations have changed the logic, the uses of technology readiness levels, similarities and differences between healthcare and defense, and the experience of Donald Trump’s uncle, John, who was head of the British Branch of MIT’s radiation lab during WWII.

The talk features an analysis of the debate in RAND between systems analysts like ES Quade and luminary economists like Kenneth Arrow and Armen Alchian, who favored a sequential decision-making in R&D due to the prevalence of uncertainty. I tried to pick apart some distinctions between Arrow and Alchian, characterizing the former as more of an optimizer using an allocation paradigm and the latter as more evolutionary using an exchange paradigm. Will responds that I was over-interpreting Arrow, and that the goal of both was to support policies of government support to exploratory development without locking in technical configurations prematurely.

I’d like to thank Will for joining me on the Acquisition Talk podcast. Be sure to check out his website which includes links to his book Rational Action and nearly a dozen fascinating articles. Here is his paper on Donald Trump’s uncle, “A profile of John Trump, Donald’s oft-mentioned scientist uncle.” His Twitter handle is @GWilliamThomas and he occasionally blogs at EtherWave. Will also recommends reading David Edgerton, among others, on the history of science and technology.

Edward Keating joined me on the Acquisition Talk podcast to talk about a wide range of issues. He is the Deputy Assistant Director for National Security at the Congressional Budget Office (CBO), and before that, he was a longtime RAND analyst researching a number of areas including sustainment, shipbuilding, and compensation.

Edward provides us insights into the Navy’s 30 year shipbuilding plan, how preventative maintenance can create lasting impacts, whether cost escalation can persistently outpace economy-wide inflation, if defense planning should focus on inputs or outputs, how modern ships are floating computers, why acquisition history is important, and much more.

In the episode, we discuss Edward’s excellent article in the Acquisition Review Journal, “Approaches to F-35 Depot-Level Maintenance: Insights from Other Systems.” It showed readiness and cost-per-flying-hour data for a variety of fighter aircraft. We discuss the data, and how there is a great deal of heterogeneity depending on the aircraft model or even the tail number.

Edward sets me straight about my characterization of the F-35. Neither is cost-per-flying hour the sole determinate of sustainment costs, nor is the $1 trillion lifecycle figure cited useful for thinking about the opportunity cost. For example, the $1 trillion lifecycle estimate of the sustainment cost includes anticipated inflation, which over many decades amounts to a sizeable proportion of the figure.

I’d like to thanks Edward for joining me on Acquisition Talk. Be sure to check out his article in the ARJ, Approaches to F-35 Depot-Level Maintenance, and browse through his treasure trove of RAND reports. Find more from the CBO’s national security division here, including their analysis of the Navy’s FY 2019 shipbuilding plan. I also highly recommend reading some of the work from Mark Lorell, who is Edward’s former RAND colleague and has done a good job finding lessons in acquisition history.

See highlights and commentary on the discussion here.

Todd Harrison joined me on the Acquisition Talk podcast to discuss a wide range of issues, including how the reorganization of defense space forces is shaping up, why real authority in Washington is budget authority, whether rapid acquisition authorities are here to stay, why the KC-46A tanker program should be considered a success, and much more.

The episode features a discussion of the on-going space re-organization. Todd explained how the DOD’s growing reliance on space capabilities is also creating risks. Many other nations are rapidly gaining capabilities to deploy effective countermeasures. The lack of effective responses from the Air Force has brought criticism from Washington. Proponents for a Space Force argue that space is a distinct profession, with its own mission, culture, and technologies.

We learn about the various players in defense space and prospects for the future. Todd believes that more of the responsibilities for space, currently spread among out among the services and OSD, should be consolidated into the Space Force. He makes allusions to when the Air Force was created out of the Army, and that the separation of responsibilities perhaps didn’t go far enough. I push back, citing the benefits of diversity and competition. Todd responds that diversity should still exist, but we won’t have the unnecessary duplication of platforms when all that is needed is a new payload.

Be sure to find more information from Todd. Here is his article “Why we need a Space Force”. Here are a number of articles from Todd at CSIS and Defense 360. Here is Todd on the GovLoop podcast, talking to Vago Muradian on Military Space, and on a panel discussing the FY2020 budget. You can follow him on Twitter @ToddHarrisonDC.

I was pleased to have Bruce Cameron on the Acquisition Talk podcast. He is the director of the System Architecture Lab at Massachusetts Institute of Technology. Bruce also co-founded a consulting firm — Technology Strategy Partners — where he has worked with many of the leading firms in tech, aerospace, logistics, and consumer goods.

In the episode, Bruce tells us about open architectures, how the term modular is used so broadly as to be mean almost nothing, what leads to product lock-in effects, the three lens model of organizations, whether cybersecurity has fundamentally changed anything about architecture, and much more.

During the discussion, he tells us about the results of the MIT commonality study. It gives us a more positive framing of the F-35 program. Decreases in commonality from 80 to 90 percent down to 20 to 30 percent is common in joint defense programs and industry platforms. He provides four criteria for judging whether platforms of common parts will succeed.

Bruce also describes two of the “big levers” that we can use to improve product developments: quality of people and risk posture of the firm/agency. Without pulling these levers, agile processes cannot be used to a great effect. He also explains whether agile can be used for new systems architecture, or whether it is limited to the development of applications.

I was pleased to have Mark Vandroff speak with me on the Acquisition Talk podcast. He served 30 years in the US Navy before retiring as a captain, with his most recent positions including Program Manager of the DDG-51 shipbuilding program (2012-2017) and Commander of the Carderock division of the Navy Surface Warfare Center (2017-2019).

In the episode, we discuss why scientists and engineers should read the classics, how to manage large organizations, why we must start with the end in mind, whether or not the Department of Defense is risk-adverse when it comes to acquisition, how a working capital fund really works, and lessons Mark learned from Sean Stackley — including the “Stackley curve.”

The conversation features an analysis of the “valley of death” problem associated with transitioning new technologies from the labs into an official program of record. Mark argues that the principle cause of the “valley of death” is not the contract process — which can be alleviated by skipping over the Federal Acquisition Regulations (FAR) using special authorities — but in fact is traced to the Planning-Programming-Budgeting-Execution (PPBE) process.

Mark describes the coordination necessary for a program manager to make changes in the budget. He finds that there is no one responsible for taking new technologies from the lab to the program offices, whose managers couldn’t know which emerging technologies needed the funding when their requests went in 3 years before. He argues that there needs to be a mission-based appropriation which provides additional flexibility. Mark warns us, however, not to carry that idea too far. Major new items like ships should still proceed through regular channels.

I’d like to thank Mark for joining me on Acquisition Talk. Be sure to check out some of his great material, including articles discussed in the podcast “Power to the Polymath,” “Reflections on Tailoring Leadership for a Perfect Fit,” and his widely read article “Confessions of a Major Program Manager.” Here is Mark providing a great lecture on acquisition using Star Wars as an analogy. Here he is being interviewed on DefenseNews. And I highly recommend listening to both of his episodes on Commander Salamander’s Midrats podcast (on USN’s Labs, Research Facilities, and Ranges — and on Confessions of a Major Program Manager). He is also quite active on Twitter, follow him at @goatmaster89.

See highlights and commentary on the panel discussion here.

In this episode of Acquisition Talk, we’ll listen in on a panel discussion hosted by the Lincoln Network that focuses on defense acquisition, called, “From the Lab to the Battlefield: maximizing defense innovation.” This event took place during the Reboot American Innovation conference on May 2, 2019.

The speakers include Linda Lourie, who is the Associate General Counsel for Acquisition & Logistics and previously worked for the Defense Innovation Unit — Pablo Carrillo, the former chief of staff to Senator John McCain and a current counsel for Squire Patton Boggs — and Acquisition Talk host Eric Lofgren. The panel is moderated by Pasha Moore.

This discussion touches on the difficulty of lining up funding for new programs, the successes of the Defense Innovation Unit (DIU), barriers to entry for new firms to win major programs, the roll-out of the DOD’s new trusted capital marketplace — which seeks to identify companies with critical technologies for U.S. investment, and much more.

See highlights and commentary on the panel discussion here.

Bruce Gudmundsson joins me on the Acquisition Talk podcast to discuss the great work he is doing down in Quantico putting together case studies on military operations and acquisition. The case studies are different than you might see in business schools. He takes historical situations and puts you in the shoes of a central character. Bruce provides a lecture on the background, gives statistics and other images that help you understand the terrain or technology, and then at critical junctures in the story, he asks, “what would you do?” These “decision-forcing case studies” are at the intersection of the traditional case study method, decision games, and the Socratic conversation.

The podcast starts by introducing the audience to an accelerated version of a decision-forcing case study, one where we play the part of Emile Rimailho, a French artillery engineer. We learn about the technology, the conundrums he faced, and the major consequences of those decisions on the battlefields of World War I. We also discuss the French arsenal system of manufacturing, howitzer gun technology, Bruce’s fondness of paradoxes, advice for reading, how Ben Franklin appreciated Socrates, how case studies impart upon the student humility, an ability to handle ambiguity, and a bias towards action, and much more.

Bruce also took part in the Quantico Renaissance, which led to the development of updated Marine Corps doctrine that pivoted away from linear fronts and hierarchy to an appreciation of nonlinearity and uncertainty in combat. I ask Bruce whether such a reform is possible in defense acquisition as well.

There are three opportunities each week to take part in decision-forcing case studies with Bruce Gudmundsson. There is an in-person Thursday class at 4:30pm in Quantico, and there are two online classes Tuesday at 7:30pm and Friday at 10:30pm (all times Eastern Standard). I highly recommend giving his class a try. It’s free, fun, and not intimidating in the least. You’ll probably find me in an online class most weeks.

You can learn more by visiting teachusmc.blogspot.com and emailing Bruce at decision.forcing.case@gmail.com. He will provide you information and links to join the sessions. Also, be sure to check out Bruce’s fantastic books, which are available on Amazon, as well as other podcast episodes featuring Bruce, such as at POGO and All Marine Radio.

See highlights and commentary on the podcast with Bruce here.

William Hartung joins me on the Acquisition Talk podcast to discuss his book, Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex. In the episode, we discuss many of the defining moments of the defense industrial base, including: contract terms and cost overruns on the C-5A during the 1960s; the Lockheed bail out and international bribery scandals of the 1970s; the spare-parts pricing scandals of the 1980s, such as the $600 toilet seat; and the industry consolidation in the post-Cold War 1990s.

We also touch on how Congress gets involved in weapon systems decisions; why a dollar spent on the defense industry doesn’t produce as many jobs as investments in healthcare, education, and infrastructure; whether contractors can be considered specialists in government compliance; and much more.

I’d like to thank Bill for joining me as from his Twitter feed, articles at The Nation, Defense One, The Mises Institute, and his other books on Amazon. Here is his official page at the Center for International Policy. And here he is recently on Democracy Now talking about Boeing, the 737 Max 8 jets, the KC-46A, and more.

See highlights and commentary on the podcast with Bill here.

The second half of my conversation with Mark Mandeles has been released. In this episode Mark and I talk about whether science is slowing down, how path dependence analysis works, the benefits of positive feedback loops, what the central task of analysts ought to be, how we create high reliability organizations, what’s the role of history in weapon system projects, and much more.

I also ask Mark about how some of the great thinkers of the 20th century should impact our thinking about acquisition. From Charles Perrow on high reliability organizations and Martin Landau on the benefits of social redundancy, to Friedrich Hayek on the uses of knowledge and Herbert Simon on, well, almost everything. But Mark’s favorite philosopher of the 20th century is Karl Popper, who has much to teach us on falsification, the growth of knowledge, and the open society.

I again can’t recommend enough reading through some of Mark’s great papers, mostly online for free, including the B-52 Development book, Systems Design and Project Management Principles, and Needs and Opportunities in US Naval History which we discuss on the program. His books are also available to buy on Amazon here.

See highlights and commentary on the podcast with Mark here.

In this episode of Acquisition Talk, I speak with Mark Mandeles about a wide range of topics in defense management. Mark has had a fascinating career and has written numerous books and articles including The Development of the B-52 and Jet Propulsion, and, Military Transformation Past and Present.

Mark talks with me about how military organization impacted the innovation process, why it is impossible to predict the growth of scientific knowledge, how the B-52 development turned out to be a stunning success, the role of strong technical managers in a process-oriented culture, how the Air Force promised business efficiency to gain its independence, and much more.

He also describes some big problems with the systems program office concept, as well as other aspects of the defense management process as laid out in the 5000 series regulations. Mark argues that traditional notions of business efficiency are ill-equipped to handle uncertainty. He recommends and provides examples of an alternative concept based on system design principles.

Mark is a fantastic resource for thinking about complexity in defense management, and has been a constant source of inspiration to me. He has posted much of his writing online for free at Academia.edu, including the B-52 Development book, Systems Design and Project Management Principles, and Needs and Opportunities in US Naval History which we discuss on the program.

See highlights and commentary on the podcast with Mark here.

Rick Whittle joins Eric Lofgren on Acquisition Talk to discuss his book on the V-22 Osprey program development history.

In this episode, we learn about the development of the V-22 tiltrotor technology. It allows an aircraft to take off and land vertically — like a helicopter — and transform its rotors to face forward — allowing it to fly with the range and speed of a fixed-wing airplane.

Rick Whittle tells us why the sales process between the contractor and Government is a “courtship”; the difficulties of a 50/50 partnership between companies with clashing cultures; what is intellectually corrupt about the way defense systems are tested; how the V-22 was saved from the chopping block by personal relationships in industry, the military services, and Congress; the challenges of fixed-priced development contracts; his experiences with the first V-22 deployment to Iraq; and much more.

He also describes how the defense acquisition system impacted the long and sometimes tortured development of the V-22, and compares that to the very different experience of another defense program, the Predator unmanned aerial vehicle. Be sure to check out both of Rick Whittle’s books on The Dream Machine: The Untold History of the Notorious V-22 Osprey, and Predator: The Secret Origins of the Drone Revolution.

See highlights and commentary on the podcast with Rick here.

In this first episode of Acquisition Talk, Eric Lofgren speaks with guest Victor Deal, who is currently the director of contracts and grants at the Universities Space Research Association, and before that, was an Acquisition Innovation Advocate in the Office of the Secretary of Defense.

Victor has played an integral role in developing and deploying contracting methods which allow the Government to move quickly, harness new technologies, and bring in firms that traditionally would not have worked with the Government. In this episode, we will talk about innovation in the Department of Defense, and how that relates to Commercial Solutions Openings (CSOs) and Other Transactions Authorities (OTAs).

The discussion also addresses the role of the contract officer in an innovative environment, what part trust plays in contracting and culture in acquisition, how the DoD is looking to take advantage of platform concepts from Silicon Valley, and more. We learn about contract proposal evaluation and why cost realism might not make sense in R&D. Victor tells us how problems that arise when no one is accountable for end-to-end program success. And he addresses what effect the reorganization of the Undersecretary for Acquisition, Technology, and Logistics (AT&L) might have on the dreaded “valley of death” problem. We learn about how Victor got his start in the DoD, and what interesting projects are going on at USRA.

See highlights and commentary on the podcast with Victor here.