DOD Takes a Look at Blockchain Technology

Published: November 13, 2019

Federal Market AnalysisDISADLAInformation TechnologyResearch and Development

DOD takes a few halting steps toward the use of blockchain.

One of the newer approaches to data management and transfer to emerge in the last ten years, blockchain technology is a rapidly growing market in the private sector. Federal agencies, including the Department of Defense, have taken notice of this, and are investigating ways they might be able to leverage the technology for their purposes. A few of these efforts appear in the DOD’s Research Development, Test, and Evaluation budget request for fiscal year 2020, and while the threat of ongoing Continuing Resolutions may jeopardize the progress DOD is able to make experimenting with blockchain, these initiatives identify the ways in which some Defense entities are taking blockchain under consideration.

For those unfamiliar with blockchain the simplest way to think of it is as a string of code contained in an open ledger visible to anyone with access to the chain. Every alteration of the code, or “block,” meaning a transaction on it, is noted on the chain and verifiable. This transparency increases the security of transactions because users of the chain can see what has been done and by whom. The chain of blocks (transactions) grows with use, becoming more sophisticated and complex as time goes by, so maintaining the requisite computing power to transact via blockchain is a necessity. Given this computing requirement one can see why DOD’s move to enterprise cloud capabilities like the Joint Enterprise Defense Infrastructure (JEDI) could be important for making use of blockchain for large-scale military purposes.

A couple of 4th Estate organizations currently scrutinizing blockchain technology include the Defense Information Systems Agency (DISA) and the Defense Logistics Agency (DLA). Here are the programs with a blockchain-related component and their prospective budgets.

Defense Information Systems Agency (DISA)

Information Systems Security Program ($11.5M in FY 2020): The Cyber Innovation and Technology portion of DISA’s ISSP is an R&D program that conducts technology assessments to identify gaps in defense cyber capabilities that can be filled with commercially available capabilities. ISSP assessments involve the production of prototypes using commercial solutions, suggesting the use of DISA’s Other Transaction Authority to award agreements. In FY 2020, DISA plans to assess the viability of blockchain for identification and authentication capabilities using 2 pilot efforts.

Defense Logistics Agency (DLA)

The DLA intends to evaluate blockchain technology as part of 2 efforts related to its Logistics Research and Development Technology (Log R&D) program: Improving Logistics Processes (ILP) and Enhancing Analysis, Modeling, and Decision Support. ILP ($4M in FY 2020) includes R&D efforts “within the Weapon System Sustainment (WSS) Program to develop and implement advanced technology in the internal DLA logistics processes.” In FY 2020, the WSS Program will continue its research into the viability of blockchain for tracking physical inventory through the use of smart contracts. Enhancing Analysis, Modeling, and Decision Support, meanwhile, requested $3.2M in FY 2020 to investigate the application of multiple technologies, including blockchain to its Strategic Distribution and Disposition (SDD) Program. Both ILP and Enhancing Analysis are long-term investments for DLA, with projected budgets of $12.6M and $10M, respectively, through FY 2024.