An office established by Secretary of Defense Ashton Carter to build bridges between the U.S. military and commercial technology hubs awarded $36.3 million in contracts in the last quarter of fiscal year 2016, the director told reporters Oct. 13.
The Defense Innovation Unit-Experimental, known as DIUx, is headquartered in Silicon Valley, with additional outposts located in Boston and Austin. The initiative, created last year, is intended to cut through bureaucratic red tape that often plagues the Pentagon’s procurement system, and fast-track contracts with high-tech commercial firms.
“Core to our value and our approach here … is to help non-traditional vendors work with the department so we get access to their technology earlier and more directly than we normally would,” DIUx managing director Raj Shah told reporters during a conference call where he provided the first quarterly update on the initiative since the new leadership team took over.
In the fourth quarter of fiscal year 2016, which ended Sept. 30, DIUx awarded 12 contracts. The average time between solicitation response to contract award was less than 60 days, Shah noted. The $8.3 million initial spend by DIUx was augmented by $28 million that the services and other Defense Department agencies kicked in to support the initiative.
Following a leadership shakeup in May, DIUx launched the “commercial solutions opening” contracting mechanism to provide a shot in the arm to the initiative, which in its early days was criticized for being ineffective.
The mechanism “facilitates fast, flexible and collaborative work between DoD and technology companies that traditionally have not done business with the department. This enables us … to work at the speed of business,” Shah said.
Projects funded to date include prototyping efforts in areas such as high-speed drones, autonomy, cybersecurity and wireless technologies.
An additional 13 projects are moving through the pipeline, according to a DIUx fact sheet. They include multifactor authentication for data access, cyber protection toolkits, micro-satellites and advanced analytics.
“These are things that the private sector is investing hundreds of millions, if not billions of dollars towards, and for us to leverage and harness that investment will be critical to our national defense,” Shah said.
The Pentagon requested $30 million for research, development, test and evaluation for DIUx in fiscal year 2017. If Congress approves that level of spending, the office expects to combine it with funds contributed by other Defense Department organizations, he said.
For many small commercial companies, there are several impediments involved in the traditional contracting process that dissuade them from doing business with the Pentagon, he noted.
DIUx has used new authorities granted by Congress in the 2016 National Defense Authorization Act to break down some of those barriers.
“It’s not really exclusive to us but we have leveraged it to great use,” Shah said.
The commercial solutions opening mechanism has increased speed and transparency in the contracting process. Upon the success of a prototype, the process enables a “quick translation or transition” into procurement contracts that enable the services or other Defense Department organizations to scale the prototype if it meets their needs, he said.
DIUx also requires less cumbersome accounting standards, and intellectual property and data rights are negotiable on project-by-project basis, Shah noted.
He hopes that other Defense Department organizations will follow his office’s lead when it comes to using new contracting authorities.
“Whenever you try something new there has got to be someone that’s first that goes through the motions and irons out the wrinkles and makes it into a reputable process, so we’re happy to have played that role,” Shah said.
“We’re in fact spending time educating others in the department of how they might use this capability and authority, and I’m very optimistic that others in the department will follow suit,” he added.
The DIUx initiative has been Carter’s pet project. Shah said he’s confident that it will survive well past the Pentagon chief’s tenure, which is expected to end when a new administration takes office next year.
“I’m quite optimistic that … the subsequent secretary and the subsequent secretary after that will see the value of this engagement and will be pleased to have DIUx in his or her quiver of tools to achieve their mission and goals,” he said.