Next year will mark the fourth iteration of the educational ICAP initiative, which DIU runs in partnership with the Defense Acquisition University. This fellowship is designed to provide DOD’s leading procurement professionals with hands-on experience and virtual training to help them more effectively buy in-demand commercial technologies from non-traditional military contractors. 

“We have other acquisition officers from across the department who can apply to the year-long fellowship with DIU — to learn our process, how we work with industry, and then bring that back to wherever they’re going. And [the next ICAP application] just opened today,” DIU’s Deputy Director for Commercial Operations Liz Young McNally told DefenseScoop during a panel at the Special Competitive Studies Project’s AI+ Expo.

If tapped for the fellowship, personnel will get a chance to work on a variety of real-world, military service-aligned projects alongside a DIU contracting officer, project team and commercial solution providers.

The fellows will also gain in-depth instruction on a flexible contracting mechanism designed for rapid prototyping and acquisition of commercial tech, known as other transaction (OT) authority. That mechanism, as well as DIU’s commercial solutions opening (CSO) solicitation process, helps the Pentagon operate at a pace that is closer to commercial speeds, when buying certain technologies.

Pointing to recent internal DIU stats, McNally said that for roughly 40% of the companies that win a new CSO deal each year, “this is the first time they ever worked with the DOD.”

“We’ve built all of these processes [to accelerate acquisition]. So we’re asking for a problem statement as opposed to a requirement. It’s a short response, right — like a few pages or a few slides, as opposed to something more — very rapid. And [the ICAP fellowship] is one of the processes that we have built to help not just do it ourselves, but then scale it across the department,” she noted.

Defense Secretary Pete Hegseth recently issued new guidance to inform how the Pentagon buys software capabilities. In it, he directed Pentagon officials to prioritize OT and CSO procurement options when purchasing digital assets for the military.

“[DIU is] also working very closely with [the Office of the Under Secretary of Defense for Acquisition and Sustainment] and others in the department to implement the president’s new executive order on acquisition. And programs like that fellowship are a real way that we’re going to be able to help upskill, and train, and drive the culture change required so that we bring in more commercial technology,” McNally told DefenseScoop.

Those who wish to apply for ICAP must be permanent government civilians or active component military contracting officers. Each fellow will produce a capstone project that will serve as a training plan for their home organization, based on what they learn throughout the 12-month program.

Applications will be accepted until July 31. DIU aims to notify selected candidates in September and begin the program in October.

“To ensure our warfighters maintain a decisive advantage, we need contracting professionals who are fluent in both the defense and commercial sectors, and who can help their teammates across the department to develop that same fluency. That is what the ICAP fellowship delivers, and we need to keep scaling it — and its impact — for the department’s critical needs,” DIU Director Doug Beck said in a statement.

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The guidance directs the implementation of an executive order that President Donald Trump issued to federal agencies last month.

“It is the policy of my Administration that agencies shall procure commercially available products and services, including those that can be modified to fill agencies’ needs, to the maximum extent practicable,” Trump wrote in the EO, which called for pursuing “more cost-effective” solutions and services for taxpayers in federal contracting.

Pentagon officials “must redouble our efforts to establish requirements in a way that avoids inadvertently disqualifying commercial solutions,” John Tenaglia, DOD’s principal director for defense policy, contracting, and acquisition policy, wrote in the new memo to acquisition executives at the Departments of the Army, Navy and Air Force, Cyber Command, Special Operations Command, Transportation Command, and DOD agency and field activity directors. “Requiring activities, program managers, and contracting officers must work together to identify commercial solutions to fulfill DoD mission requirements.”

He warned against “casting truly non-commercial products or services as ‘commercial’ for the purpose of misapplying policies and procedures unique to the acquisition of commercial products and commercial services.”

Tenaglia emphasized the importance of continuous market research so that the DOD acquisition community can stay abreast of commercially available solutions.

The EO implementation guidance calls for high-level oversight of proposed procurements, noting that contracting officers don’t have the authority to independently determine whether a commercial product or service is sufficient to satisfy a requirement owner’s needs.

The authority to approve or deny proposed non-commercial procurements will rest with DOD components’ senior procurement executives unless they delegate that authority to a general officer, flag officer, or member of the Senior Executive Service within their respective agencies.

“Any delegation(s) shall only be granted to acquisition officials possessing the necessary acumen to determine whether a proposed non-commercial procurement serves the best interests of the agency,” an attachment to Tenaglia’s memo states.

In the near term, contracting officers will be tasked to conduct a review, no later than June 15, of pending Federal Acquisition Regulation actions — including all open solicitations, pre-solicitation notices, solicitation notices, award notices, and sole source notices — for prime contract awards for non-commercial products or services valued at or above the “Simplified Acquisition Threshold.” That threshold is currently $250,000, according to the Defense Acquisition University.

The reviews don’t have to include contracts that have already been awarded, according to the new implementation guidance.

“Contracting officers are to either consolidate or create an application for each solicitation, pre-solicitation notice, solicitation notice, award notice, and sole source notice into a proposed application requesting approval to proceed with a prime contract procurement for non-commercial products or services. Applications must be submitted to the respective approval authority,” the guidance states.

In the future, program managers and requirement owners will have to submit a request for approval to procure non-commercial products or services under FAR-based prime contracts prior to releasing solicitations valued at or above the Simplified Acquisition Threshold. As part of those efforts, officials must provide a justification for pursuing a “Government-unique, custom-developed or otherwise non-commercial product or service,” as well as a report on the market research that was used to determine the availability of commercial products and services to meet the Defense Department’s needs.

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That was Dr. Bill LaPlante, DoD’s top acquisition executive, at a recent defense conference.

He also said: “If somebody gives you a really cool liquored up story about a DIU [project] or OTA [contract] ask them when it’s going into production, ask them how many numbers, ask them what the [unit cost] is going to be, ask them how it will work against China. Ask them all those questions because that’s what matters. And don’t tell me it’s got AI and quantum in it. I don’t care.” 

Dr. LaPlante is right to focus on volume production of munitions. This is a critical issue for Ukraine and for our own national security. I can appreciate his passion for wanting DoD to send a demand signal to ensure sufficient, long-term manufacturing capacity for Javelins, Stingers, High Mobility Artillery Rocket Systems (HIMARS), and other advanced munitions that America and its allies would need in a future conflict.      

His flippant comments on commercial technology, however, are misleading. “Tech bros” aren’t providing artillery, but the Ukrainians are directing the warfight on iPhones, social media, secure messaging apps, Starlink, and software applications they’re building on the fly. They are getting their intelligence from commercial satellite companies. And they are directing strikes using commercial drones. Commercial technology matters in the current conflict. More so than in any recent combat operation. 

I’d humbly suggest to Dr. LaPlante that if commercial technology isn’t scaling fast enough inside the DoD, it is precisely because the DoD isn’t focused on scaling commercial technology. And that falls squarely in his inbox as DoD’s chief acquisition executive.

The existing defense industrial base isn’t sufficient

Beyond underplaying the value of commercial technology in Ukraine, Dr. LaPlante set up a false dichotomy about volume production versus emerging commercial technologies. We need both. And indeed, neglecting either could leave the U.S. military unprepared for the next fight, as numerous studies have warned. 

Building the necessary capabilities to aid the Ukrainians and deter China requires considering not only how much we produce, but also what we produce, and how fast. This is one of the central findings in the interim report of the Strategic Competitive Studies Project (SCSP) Economy Panel. It calls for a new American techno-industrial strategy that harvests the best of traditional defense manufacturing and emerging technology through improved public-private partnerships. 

We will not be able to maximize our probability of deterring future conflict with China by focusing on systems that align with our current concepts and operational plans. That is exactly the same mistake Russia made, and we should not repeat it. 

Let’s be honest: will the existing traditional defense contractors create small unmanned drones, new cyber tools, and space-based communication and sensing capabilities — at high volumes and radically lower costs? That we can easily share with allies?  That can be rapidly adapted, integrated, and repurposed — even in the fog of war?  

Heidi Shyu, the DoD CTO, has identified 14 critical technology areas that are vital to national security. And the former Defense Innovation Unit Director, Mike Brown, observed that commercial industry already leads in 11 of those 14 areas. Maintaining our technological edge depends more on partnering with “tech bros” than ever, even if that’s not the industrial base that makes the Pentagon comfortable. 

Of course, we need traditional defense contractors and weapons systems. But they are not sufficient. We need to focus on how fast the DoD can incorporate emerging commercial technologies into its existing arsenal and future plans. 

As former Navy acquisition executive James “Hondo” Geurts and Gen. Joe Votel have argued, we need to take “full advantage of [technology] initially intended for commercial purposes … and agilely adapt such emerging technologies to defense use without costly and time-consuming reinvention and reduplication.”

VC-backed startups and scaleups: commercial innovation we need

The good news: many of the newer, innovative companies we need already exist. 

Startups and especially scaleups — startups that have good product-market fit and are rapidly growing revenue — can help DoD field important new capabilities. There is an entire ecosystem of ambitious defense-tech and dual-use companies in Silicon Valley and in other innovation hubs around the country. U.S. defense and aerospace startups raised $10 billion in 2021, triple the amount from 2019. More broadly, across industries, artificial intelligence and machine learning startups raised $115 billion in 2021, according to Pitch

Insight Partners, where I work, has invested in Rebellion Defense, Hawkeye360, Shift5, and LeoLabs — and we have met with most of the national security entrepreneurs seeking venture capital. We are also one of the larger venture and growth investors in AI, cyber, and enterprise software companies — many of which are also serving the U.S. government. 

I can say from a firsthand perspective: the innovation is here today. In most cases, commercial vendors are delivering important new capabilities at a much faster rate than any of the large defense contractors.   

Software and data analytics — which drive the intelligence that DoD desperately needs to deter next-generation conflict — do not rely primarily on physical production. Instead, software and AI are made, iteratively, by product managers, software developers, system reliability engineers and data scientists. 

Fortunately, VC-backed scaleups attract some of the best software and AI talent in the world. Scaleups compete on talent density, which creates product velocity and faster customer feedback cycles. And increasingly, talented technologists want to work on national security problems.  

Focus on the program executive offices

More good news: thanks to the efforts of current and past public servants — most notably the late Secretary Ash Carter, who was instrumental in pushing the DoD on this topic — thousands of startups and scaleups are already working with DoD. Through labs, rapid prototyping groups, and innovation units, venture-backed companies are coming through the DoD front door, alongside the traditional defense industrial base. It’s a positive development that the Department has become more startup-friendly with its R&D dollars. Now, it’s time to move the winners — those that have product-market fit inside the DoD — into production. 

The DoD should accelerate the buying and integration of commercial technologies by focusing on where procurement happens at scale: the program executive offices (PEOs). From ships to planes to enterprise logistic systems, PEOs are how the Defense Department buys and integrates technology into existing platforms, primarily through large defense contractors.

The Department should provide incentives for acquisition professionals inside the PEO portfolios to buy emerging tech for integration into existing programs. Winning technologies should be able to scale across different programs — what is known as “portfolio management” — even programs that comprise a number of different traditional defense contractors. Imagine the impact that would result from technology companies competing to become a “capability of record” for the DoD, rather than owning a smaller piece of a single program of record.   

PEOs should support innovative commercial companies by committing to procurement actions at the speed of relevance — and committing to experiment continuously with their capabilities. PEOs could accomplish this by creating a new executive role — a Portfolio Innovation Director — and giving them resources, tools, and most importantly, an innovation scaling mandate.

Building bridges with the PEOs is a two-way street, and the innovation community needs to do its part. I’ve been honored to participate in the U.S. Air Force training program, Banshee, talking with talented mid-career acquisition officials about how VC-backed companies differ from the defense contractors they are more familiar with. And as part of the Defense Ventures fellowship program, Insight Partners has hosted active-duty service members — including acquisition professionals — to build greater familiarity with the VC-backed innovation ecosystem. 

Let’s get Silicon Valley tech into production

Dr. LaPlante’s “tech bros” comments divert attention from the real issue: DoD won’t win a future war without embracing commercial tech. Commercial technology has changed the course of the conflict in Ukraine. Deterring a peer adversary like China will require the DoD to exploit a wide array of commercial technologies across the U.S. and our allies. And if deterrence doesn’t work, the side that can introduce new emerging technologies and updated software faster than the other is likely to gain a competitive tactical and operational advantage.  

As a former public official, I know how hard it can be to make changes in a large bureaucracy. It takes knowing the system deeply, starting small but aiming big, and partnering with unlikely allies. Heck, I wrote a book about it. The DoD machinery of requirements generation, acquisition, and budgeting is big and complicated. It’s easy to criticize DoD from the outside, and hard to make meaningful change from the inside. But with leadership commitment, it can be done.

Dr. LaPlante, you are the chief buyer for the entire Defense Department. You can lead the way. Will you put Silicon Valley into production? 

Nick Sinai is a senior advisor at Insight Partners, a commissioner on the Atlantic Council’s Commission on Defense Innovation Adoption, and a senior fellow at the Belfer Center for Science and International Affairs at Harvard Kennedy School.

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Unlike warheads on detectable rockets for ballistic missiles used in previous conflicts, when in-the-making and ultramodern missiles reach and maneuver at hypersonic speeds — or more than 5 times faster than the speed of sound — they become almost impossible to track or deter. America has attempted to master hypersonic flight in fits and starts over the last few decades, but recently sharpened its focus and started massively boosting investments to enable associated assets, largely in response to its competitors’ ambitious programs pushing rapid development. 

The SASC’s proposed defense policy bill for fiscal 2023 continues that upward trend in investing in hypersonics, with provisions that would mandate significant funding for the Defense Department’s hypersonics-aligned initiatives. But notably, the lawmakers behind it also revealed they are uneasy about the government’s capacity to assess such sophisticated capabilities and bring them into full fruition. 

China, on the other hand, last year shocked the Pentagon and the world with the first reported successful test of a nuclear-capable hypersonic missile, which lawmakers and national security leaders considered a “wake up call” for the U.S. 

“The committee notes the [DOD’s] overdue investment in fielding hypersonic defensive and offensive capabilities. The committee encourages additional funding for defensive and offensive capability to enable the department to not just pace, but leap ahead of peer competitors,” members of that committee wrote in a report accompanying their passed version of the National Defense Authorization Act for fiscal 2023.

The added: “However, one of the greatest concerns of the committee is the ability to test hypersonic systems, which requires extensive range space and sophisticated testing capabilities.”

To that end, the congressional cadre called for the defense secretary to provide a briefing to congressional defense committees by March 31, 2023 ”on the capabilities and shortfalls of existing and planned DOD, academia, and industry testing facilities to ensure the on-time development and fielding of these critical hypersonic systems.”

Facilities for this sophisticated type of testing essentially simulate the unique conditions of hypersonic flight, like speed and pressure. China reportedly has the world’s first operational wind tunnel that can assess a full-scale hypersonic missile through the key stages of flight.

SASC’s version of the NDAA for the next fiscal year incorporates a number of hypersonic-related funding proposals — including almost $300 million for the Pentagon’s glide-phase interceptor initiative to combat such capabilities, which is in its early stages and being steered by the Missile Defense Agency. 

Separately, while the department’s budget request included $2 million in a specific line for Navy weapons industrial facilities, the committee instead recommended an increase of $25 million for that line, specifically for a hypersonic test facility.

“The committee believes that further investment in hypersonic test infrastructure is vital to the rapid fielding of emerging hypersonic weapons technologies,” the senators wrote in their accompanying report. 

They also recommended an increase of $30 million for major range and test facility base improvements. 

In their report, the committee members wrote that they understand “that the test and training range in the eastern Gulf of Mexico has aging infrastructure and inadequate instrumented airspace to test the newest generation of weapons and munitions.” They also noted concerns “that open-air test ranges of the major range and test facility base are not capable of supporting the full spectrum of development testing required for current and next generation technologies, including hypersonic and autonomous systems.”

Further, the lawmakers encouraged DOD’s Test Resource Management Center (TRMC) to accelerate the making of launch and down range tracking facilities to support robust testing of both offensive and defensive hypersonic weapons. Alaska, in their view, is one unique geographical location where hypersonic testing could be conducted with “unrestricted flexibility” to meet mission objectives.

This overarching issue is top of mind now, but DOD has been grappling with its deteriorating hypersonics research infrastructure for years. 

In a 2014 study, the Institute for Defense Analyses warned that “no current U.S. facility can provide full-scale, time-dependent, coupled aerodynamic and thermal-loading environments for flight durations necessary to evaluate these characteristics above Mach 8.” The nation’s facilities and areas for experimentation have evolved since then, but more recent federal evaluations of the department’s assets to mature these capabilities have not been released to the public. 

SASC’s version of the NDAA also aims to require several further assessments related to this topic—including a proposal to require the Defense Secretary to “submit a report on estimated costs for conducting not fewer than one full-scale, operationally relevant, live-fire, hypersonic weapon test of the systems currently under development each year by the Air Force, the Army, and the Navy, once such systems reach initial operational capability.”

It’s not yet clear if the provisions mentioned will be included in the final version of the NDAA. The Senate has yet to vote on this version, while House lawmakers have already passed their chamber’s. The two versions will have to be reconciled in committee before the hefty bill becomes law. 

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