From: The Hill

By Michael McNerney, fellow, Truman National Security Project

With sequestration now in effect, experts are debating the future of the  Department of Defense (DoD). The agency has already committed to $487 billion in  budget cuts over the next decade, but it also recognizes the need to modernize  as it slims down. As the new secretary of Defense, Chuck Hagel must address a  critical issue for America’s defense: how to keep the department at the  forefront of the information age. A smart first step would be bringing Silicon  Valley to the Pentagon.

The DoD is big, but not nearly as big as it thinks. True, the U.S. military  spends more on security than any other nation and it boasts close to 2 million  employees. However, it is only a small player in one of the most promising areas  of the global economy: information technology. Considering that the DoD uses  civilian networks for over 85 percent of its communications, this poses some  serious challenges for our military.

 

Smaller firms and companies outside of the defense industrial base are  generating much of today’s cyber innovations. Meanwhile, the DoD still turns to  traditional defense contractors for most of its IT solutions. While these firms  often have good products and are accustomed to supporting the military, they are  not the only sources of innovation. If this trend continues, the U.S. military  risks becoming reliant on outdated technologies that it cannot secure.

With close to $40 billion in annual IT spending, the DoD dwarfs other federal  agencies. What many officials do not realize is that this constitutes only a  fraction of the more than $2 trillion of total consumer IT spending. Whereas the  DoD can typically request made-to-order items — this helicopter, that parachute — when it comes to IT, it represents just a drop in the bucket. This means that  the Pentagon cannot influence IT like it can with traditional weapons systems.  As a result, the department often adapts consumer products for its use, rather  than procure products optimized for the military. This is like trying to  retrofit a heat-seeking missile onto a Cessna airplane.

The defense procurement system was designed to purchase battleships or bomber  fleets from the few companies that could produce them. Long procurement cycles  and lower profit margins were useful in creating a fair defense market and  protecting the American taxpayer from a near monopoly of suppliers.

However,  this system also stacks the deck against small companies. Few Silicon Valley  start-ups can wait for long a sale or have the expertise to navigate the DoD  bureaucracy. This leads some investors to caution small firms against trying to  enter the government market.

The solution, however, is simple: the DoD must reform its acquisitions  process and improve private sector relations in order to access the latest  innovations.

Fortunately, Chuck Hagel can help repair the Department’s  relationships with the private sector. As a successful tech entrepreneur in his  own right, Hagel has experience building a company and responding to investors.  He is also known for independent thinking and a willingness to buck the system.  By spending more time with investors and entrepreneurs, Hagel can begin to  change things for the better. Also, by streamlining the acquisitions process to  allow for quicker, more flexible purchases, he can help small firms compete more  effectively.

In order for our service members to operate in the information age, they need  the best tools that we can provide. By reforming our defense acquisitions  process, Hagel can ensure that we continue to have the best equipped military in  the world.

McNerney is a former defense official who specialized in cyber policy. He  is currently a fellow at the Truman National Security Project.