Maintaining Military Advantage

New Ways of Doing Business

The world today is markedly different from what it was during the Cold War. This new environment calls for new ways of conducting the business of defense. The Administration's initiatives in acquisition reform, dual-use technologies, and Advanced Concept Technology Demonstrations characterize our determined response to today's challenges. Sustained and effectively implemented, these new approaches will help get the highest return on defense investments in the future.

Defense Acquisition Reform

In October 1993, President Clinton signed into law the Federal Acquisition Streamlining Act of 1994, legislation that fundamentally reforms Federal procurement. The act provides for three key statutory changes. Most important, it makes it easier for the Defense Department (and other Federal agencies) to buy commercial components, products, and services. Second, it streamlines contracting procedures for small purchases. And third, it authorizes the Defense Department to undertake five pilot programs to test innovative approaches to acquiring commercially derived jet aircraft, aircraft engines, and other items.

The Defense Department is firmly committed to improving the defense acquisition processes to help improve long-term military readiness. Building on a February 1994 paper entitled Acquisition Reform: A Mandate for Change which provided the conceptual foundation for acquisition reform, the Defense Department has developed a strategic plan to ensure that reform measures are institutionalized and to create an environment for continuous improvement that will last well into the future.

In June 1994, Defense Secretary William J. Perry announced a reversal of the Pentagon's longstanding policy toward military specifications-"milspecs," the 31,000 specifications and standards that prescribe how military items are to be made and tested, down to the most minute detail. Secretary Perry instructed the military services to use commercial (or performance-based) specifications and standards in lieu of milspecs "unless no practical alternative exists." This decision has already dramatically reduced the number of milspecs for dozens of weapon systems. The required milspecs for the Air Force's Space Based Infrared System dropped from 150 to two; the Navy's SLAM missile, from 104 to six; the Army's BCIS Phase 1 antifratricide digital system, from 467 to 194.

Together, the statutory reforms embodied in the Federal Acquisition Streamlining Act and the administrative reforms such as the milspec policy enable the Pentagon to take full advantage of the inventiveness and efficiency of today's dynamic commercial market. And by simplifying acquisition processes of direct concern to Department of Defense S&T program managers and scientists, they greatly improve the efficiency of the Defense Department science and technology program.

Defense Acquisition Reform
In October 1993, President Clinton signed into law the Federal Acquisition Streamlining Act of 1994, legislation that fundamentally reforms Federal procurement. The act provides for three key statutory changes. Most important, it makes it easier for the Defense Department (and other Federal agencies) to buy commercial components, products, and services. Second, it streamlines contracting procedures for small purchases. And third, it authorizes the Defense Department to undertake five pilot programs to test innovative approaches to acquiring commercially derived jet aircraft, aircraft engines, and other items. The Defense Department is firmly committed to improving the defense acquisition processes to help improve long-term military readiness. Building on a February 1994 paper entitled Acquisition Reform: A Mandate for Change which provided the conceptual foundation for acquisition reform, the Defense Department has developed a strategic plan to ensure that reform measures are institutionalized and to create an environment for continuous improvement that will last well into the future. In June 1994, Defense Secretary William J. Perry announced a reversal of the Pentagon's longstanding policy toward military specifications-"milspecs," the 31,000 specifications and standards that prescribe how military items are to be made and tested, down to the most minute detail. Secretary Perry instructed the military services to use commercial (or performance-based) specifications and standards in lieu of milspecs "unless no practical alternative exists." This decision has already dramatically reduced the number of milspecs for dozens of weapon systems. The required milspecs for the Air Force's Space Based Infrared System dropped from 150 to two; the Navy's SLAM missile, from 104 to six; the Army's BCIS Phase 1 antifratricide digital system, from 467 to 194. Together, the statutory reforms embodied in the Federal Acquisition Streamlining Act and the administrative reforms such as the milspec policy enable the Pentagon to take full advantage of the inventiveness and efficiency of today's dynamic commercial market. And by simplifying acquisition processes of direct concern to Department of Defense S&T program managers and scientists, they greatly improve the efficiency of the Defense Department science and technology program.

Dual-Use Technologies

Over the last 30 years, barriers were gradually created between the defense and civilian industrial sectors as special defense requirements and business practices increasingly segregated the defense sector of the industrial base. Our dual-use technology policy reflects the recognition that our nation can no longer afford to maintain two distinct industrial bases. Our goal is to move toward a cutting-edge national technology and industrial base that will serve military as well as commercial needs. This dual-use technology strategy will allow the armed forces to exploit the rapid rate of innovation and market-driven efficiencies of commercial industry to meet defense needs. By drawing on commercial technology and capabilities wherever possible-along with the superior systems design and integration skills of U.S. prime contractors-the Defense Department can do its job more effectively and at lower cost. Conversely, the innovation and accomplishments that originate in defense programs and laboratories will move rapidly to the commercial sector.

"Dual use" goes beyond simply incorporating commercial off-the-shelf parts and equipment in military systems. It involves a fundamental shift toward technology that satisfies both civil and military needs-for lower costs and higher quality, as well as increased performance. We are working toward a future in which weapon systems are designed to use state-of-the-art commercial parts and subsystems and are built in integrated facilities. Of course, commercial technology will not meet every military need. But in a great many cases it will, and it will do so less expensively. Moreover, as flexible manufacturing systems are developed and more widely adopted, it will be increasingly possible to produce in a single plant both low-volume military equipment and similar high-volume commercial equipment.

By using components, subsystems, and technologies developed by commercial industry in our military systems wherever possible, we hope to attain three compatible objectives:

Access to leading-edge technology. This dual-use strategy will provide access to leading-edge technology and allow our military to introduce the commercial sector's continuous stream of innovations and updates both during the development and throughout the life cycle of our military systems. This will shorten development time and increase the pace at which technological improvements are incorporated into new weapons.

Affordability. Greater reliance on commercial capabilities can reduce our costs for procuring military systems incorporating leading-edge technologies. Commercial components, technologies, and subsystems in many instances can meet our functional needs at much lower cost than customized, military-driven technology.

Ability to rebuild. Our dual-use strategy will make it easier to build back military capabilities to a higher level if necessary in the future. Close integration with the private sector is imperative so we can be ready to quickly gear up our nation's industrial capabilities.

We must also direct R&D toward the manufacturing infrastructure that enables our dual-use technology initiatives. (A leading example is advanced metal matrix composites, which have numerous end item applications-both military and civilian-including missiles, defense vehicles, and automobiles.) Such manufacturing process technologies make our domestic commercial and defense industrial infrastructure more competitive and lessen our dependence on foreign sources for critical subtier items.

Our dual-use approach to technology development is supported by the Technology Reinvestment Project (TRP), unveiled by President Clinton in March 1993 (see box p. 22, "Technology Reinvestment Project"). The TRP employs mechanisms to encourage commercial companies to provide the Department of Defense early access to dual-use technology development. The TRP's customer is the Pentagon, which awards funds, on a cost-shared basis, to industry-led projects to create new dual-use technologies that address clear defense needs, both by providing new products and processes and by fostering affordability. Typical TRP projects include technologies to provide for affordable night-vision capability; to improve battlefield casualty treatment; and to make affordable the Army's technically superior but high-cost system for locating combat units on the battlefield in real time. By taking advantage of the potential for a commercial market, these projects offer the prospect of technology with improved performance at lower cost.

Advanced Concept Technology Demonstrations

The Advanced Concept Technology Demonstration (ACTD) program is the Administration's approach to capturing and harnessing innovation for military use rapidly and at reduced cost. ACTDs are acquisition programs designed to foster an intimate alliance directly between the operational forces and the technologists and to remove the barriers between them. Representatives of the forces, including the Joint Staff, the Joint Requirements Oversight Council, and the commanders of unified and specified commands, play a direct role in the management of the ACTDs.

ACTDs are focused on four principal objectives: (1) to gain an understanding of and to evaluate the military utility of new technology applications before committing to acquisition; (2) to develop corresponding concepts of operation and doctrine that make the best use of the new capability; (3) to provide residual operational capability to the forces; and (4) to facilitate a more informed acquisition decision.

ACTDs are not only for new technologies but also seek new ways to integrate existing technologies to make platforms more effective in battle. ACTDs typically last two to four years, and the concepts are then given to one of the military services or a defense agency for formal acquisition.

The intent of the ACTD process is to provide the user with detailed interactions very early in development as a means for a rapid and cost-effective introduction of new capabilities to operational forces. Examples of ACTDs include Unmanned Air Vehicles, Cruise Missile Defense, Mine Countermeasures, Advanced Joint Planning, and Synthetic Theater of War. Additional demonstrations are planned for Combat Identification, Navigation Warfare, Miniature Air-Launched Decoy, and others.