Research and Development in Focus in the FY 2016 NDAA
Published: June 10, 2015
IT vendors positioned to support the DoD’s R&D efforts will benefit from working on projects whose funding is more reliable than other parts of the defense budget and is mandated by NDAA legislation.
Follow the money is a self-evident truth in federal contracting. This is why the analyst team at Deltek takes so much time parsing agency budgets in the search for new funding streams. As my colleague John Slye recently noted in a blog post on cybersecurity, we also keep an eye on pending legislation to identify technology areas where Congress is mandating that agencies should direct the budget dollars they receive. The most important (and recurring) piece of legislation we analyze is the National Defense Authorization Act, or NDAA, which Congress frequently uses to push the Department of Defense’s technology spending in one direction or another; and if there is one thing better than a proposed budget for a program or technology it is a mandated budget!
Fiscal Year 2016’s House and Senate versions of the NDAA are typical in this respect in that they outline several technology priorities. The House (H.R. 1735) and Senate (S. 1376) versions still need to be reconciled in committee, but this process won’t necessarily change specific provisions as long as both legislative bodies see value in the technology being promoted. One such provision that caught my eye in the Senate’s version is Section 212, which direct the DoD to develop a Technology Offset Program to “build and maintain the military technological superiority of the United States.” The technologies that Sec. 212 the TOP should focus on are “directed energy, high-speed munitions, autonomous systems, undersea warfare, cyber technology, and intelligence data analytics.” The development of appropriate acquisition practices for buying and adopting these technologies/systems is also called for, waving a big green flag that the DoD will be spending research and development dollars on these technologies.
Anticipated defense research and development spending on cyber, big data, and unmanned systems (i.e., autonomous systems) is something that we have written on extensively in the last few months, so seeing them called out in the Senate’s NDAA is no surprise. Still, it must be reassuring to vendors to see priorities like these clearly listed. It makes the business cycle that much more predictable.
Another provision in the Senate version that sticks out is Section 213, which reauthorizes the Defense R&D Rapid Innovation Program. An initiative that was announced by former Secretary of Defense Chuck Hagel, the DoD’s Rapid Innovation Program, also known as the Defense Innovation Initiative (DII) will be reauthorized until September 30, 2020. The DII received $225 million in funding in FY 2015, so this too bodes well for defense spending on R&D. This spending directly benefits information technology vendors because IT, particularly software development, is now a critical part of the R&D process for practically all new weapons systems and autonomous platforms.
Lastly, in a curious twist, Congress is pushing the DoD to make use of Science and Technology expertise for re-engineering business information systems in Section 215. The DoD has thousands of these systems, which cost tens of millions of dollars annually to operate. Section 215 mandates that the DoD use industry partners, federally funded research and development centers, and government laboratories to support the reduction of costs through technical expertise and innovation. The areas of focus for these efforts are as follows:
- Management innovation, including personnel and financial management policy innovation
- Business process re-engineering
- Systems engineering of IT business systems
- Cloud computing to support business systems and business processes
- Software development, including systems and techniques to limit unique interfaces (i.e., COTS!)
- Hardware development, including systems and techniques to limit unique interfaces (i.e., COTS!)
- The development of methodologies and tools to support the development and operational testing of large and complex business systems
- Analysis tools to allow decision makers to balance between requirements, costs, technical risks, and schedule in major automated information system acquisition programs
- Information security in major automated information systems
- Innovative acquisition policies and practices to streamline the acquisition of IT systems
The Bottom Line
Summing up, it is clear from the three sections outlined above that Congress desires the DoD to leverage its R&D spending as both a way of innovating and a tool for cutting costs. Innovation is the point of the R&D in itself, while the cost-cutting objective is a desired secondary outcome. Either way, IT vendors positioned to support the DoD’s R&D efforts will benefit from working on projects whose funding is not only more reliable than other parts of the defense budget, it is also mandated.