In its pursuit of cutting-edge commercial technology, the government established an innovation archipelago of new organizations and empowered them with alternative contracting vehicles with which to engage non-traditional suppliers. Given the threat environment, all these changes are coming the only question is how quickly. In cyberspace, human operators are rapidly being replaced by algorithms. At sea, unmanned surface and underwater vessels are expected to offset manned ships that are more expensive and vulnerable. The next generation of ground vehicles is likely to be increasingly optionally manned and robotic. More air-based capabilities are expected to be unmanned and disaggregated. Proposed new space architectures need higher volumes of highly networked and dynamic satellites. The next iteration of defense technologies, however, will require much more overlap with commercial industry. While a specialized defense industry emerged due to divestments and consolidation after the end of the Cold War, its supply chain remained relatively diverse. As electronic content on defense platforms increased starting in the 1960s and supply chains became more global, many subsystems and components (e.g., sensors, displays, processors) were sourced commercially, as were a growing share of raw materials. military systems.Īn ever-increasing share of military capability will rely on commercially sourced technology. advantage, they also reduce the value of current U.S. vulnerabilities and investing in new approaches to be competitive. rivals learned that they will need new strategies to offset American advantage, and they have spent decades observing U.S. Since Operation Desert Storm in 1991, U.S. systems and capabilities more predictable. Today’s defense industry is focused on developing highly complex systems that take, on average, 7–10 years to reach initial capability, and are expected to provide overmatch against adversaries for decades. share of global defense spending remains high at 38 percent, it has declined by 10 percent since 2001 China and Russia combined have nearly tripled their share. leadership had decreased, while those about China’s had increased. 4 Even before the current crisis, global perceptions about U.S. 3 A year before COVID-19 emerged, 60 percent of Americans believed the United States would be less important in the world due to its debt, inequality, and skills gap. share of global research and development (R&D), government and commercial investments combined, fell from 40 percent to less than 25 percent. Since 9/11-while the United States focused on countering terrorism, Afghanistan, and Iraq-the U.S. 2 For instance, every year since 2007, China has awarded more doctoral degrees in technical disciplines than the United States. Yet, while America remains the world’s leader in technology, its relative advantage wanes. "Tony" Ierardi, USA (Ret.)Īmerica’s future leadership in the world and on the battlefield will be dependent on its ingenuity. The proposed rule also would add more complexity to a proposal evaluation process already freighted with rules intended to further social policy goals – sometimes at the expense of rational, price-based proposal evaluation. The proposed rule is antithetical to policy considerations favoring IRAD as a valid and valuable component of a contractor’s indirect costs, purposes strongly endorsed by Congress recently in the National Defense Authorization Act of 2017 (2017 NDAA) enacted on December 23, 2016. For the reasons described in this entry, we think this rule is illogical and misguided, and we hope the DoD will retract the rule or substantially revise it as a result of the comments it receives. The proposed rule requires DoD agencies to assign an evaluation cost penalty to the proposed price of any contractor expecting to receive reimbursement from the United States Government for any future IRAD expenses through its indirect cost rates.Ĭomments on the proposed rule were due on February 2, 2017. On November 4, 2016, the Department of Defense (DoD) proposed a new rule applicable to major defense contractors who expect to use future independent research and development (IRAD) to perform DoD contracts.
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