Government action on tech innovation is good news for startups – TechCrunch





The TechCrunch Global Affairs project examines the increasingly intertwined relationship between the tech industry and global politics.

Much has been written in this space about the Department of Defense’s efforts to harness Silicon Valley innovation — and steep tech companies must climb to ultimately win DOD contracts and traverse the “valley of death.” The good news is that the US government has heard calls from Silicon Valley to cut bureaucracy and foster new ways of doing business and is taking action.

The critical 4Cs

Over the past year, strong, bipartisan alignment has emerged between the executive and legislative branches around a set of actions to close gaps and remove barriers to success, best considered the “critical 4Cs.” : Culture, Contracts, Congresses Budget cycles and Champions.

Let’s start with Champions. The American people are blessed with two of Silicon Valley’s greatest champions, Assistant Secretary Kathleen Hicks and Under Secretary of Research and Engineering (R&E) and (CTO) Heidi Shyu. They, along with other Pentagon champions, fully understand the challenge and have taken concrete steps from the top down to seed the DOD system for innovation.

For example, Hicks and his former software czar led a huge effort in 2021 to implement the DOD’s Software Modernization Strategy, which aims to better organize the Pentagon’s internal processes for adopting new software technologies in the world. ‘business. The strategy also produces, in effect, the formal political “demand signal” for scaling Silicon Valley technology through the DOD.

Hicks also visibly empowered the CTO, her leadership group, and the innovation steering group to map the Pentagon’s innovation efforts, examine its alignment and acquisition practices, and honestly engage with – and incorporate the views of – small industry tech players moving forward. The DOD has also introduced new programs to recruit and develop technology talent to attract and retain more defense technology champions. This brings us to another key “4Cs”: creating a tech-savvy – and tech-focused – culture within DOD.
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Under the leadership of Shyu, an experienced senior procurement and acquisition executive with degrees in math and engineering, the Pentagon has launched a series of efforts to help it “move faster.” As head of research and engineering, Shyu helps coordinate the hundreds of offices and innovation efforts within the Department of Defense. She has taken concrete steps to strengthen the position of small technology innovators and reduce barriers to working with the DOD.

Among them is a technology vision released in February, which prioritizes key Pentagon focus areas such as trusted AI, space, advanced computing and software. Undersecretary Shyu also asked Congress for authorization to help small innovators through an expanded Small Business Innovation and Research (SBIR) grant process to mature experimental programs. and increase the chances of them becoming referral programs. This is one of many ongoing efforts to alleviate systemic “C-contraction” barriers to promising programs.

In the latest “C” Congressional budget, the Biden administration proposed in its budget for fiscal year 2023 a 9.5% increase over the fiscal year 22 funding level for research, development, Department of Defense technology and engineering. If passed by Congress, it would represent a significant effort to advance technology modernization and adoption, building on measures passed by Congress in the National Defense Authorization Act (NDAA ) and the FY22 budget.

The FY22 legislation specifically authorized and funded DOD plans to reduce barriers to technology adoption and provided additional funding for software and SBIR programs. For example, NDAA Section 833 for FY22 directed the DOD to develop a pilot program to implement unique acquisition mechanisms for emerging technologies. Meanwhile, Section 834 has mandated the expedited procurement and commissioning of advanced technologies – both intended to meet the speed and reduce the pain of “C” contracting as levels of funding were to increase in FY23.

Members and congressional staff keep hearing from Silicon Valley startups about projected lack of funding as SBIR funding rounds end, but the challenge for Congress, they say, is balancing rapid success innovation with taxpayer oversight and accountability for that funding. They don’t write blank cheques. This is why Under Secretary Shyu’s request to Congress to extend the SBIR cycle is important.

Unintended consequences

As Congress and the Pentagon continue to address the challenges of the “4Cs,” they must avoid creating new ones. For example, when broader expenditures and authorities for software and new technologies were passed, Congress created new reporting requirements to account for how the money was used, in some cases, discouraging innovation. As one DOD program manager put it, “Now I have to provide quarterly quantitative and qualitative progress reports to include comparisons of similar programs. Thanks, but I’ll stick with it [traditional programs] and focus on product delivery rather than reporting. New reporting burdens can eclipse intent and create cultural antibodies to do new things among respected but overworked program executives. There must be a balance between “control” and “free for all”. Watch this place.

Gaps remain

A recent report by consulting firm Miter explained why simply throwing more money and more latitude into the SBIR grant process is an incomplete solution to the problem of rapid technology adoption. In a nutshell, all defense procurement is rooted in the formal requirements process, the Pentagon’s lengthy process that spells out what the military needs and why, and its related procurement and budget processes that establish how much it can buy. , how and when. If a particular new technology is not part of these requirements and budget process, it would be difficult for the Pentagon to fund and adopt it.

Current processes often pit program managers and contractors against innovation teams and end users who want cutting edge technology now – a dynamic that makes it easier to maintain the status quo. In order to make technology adoption a reality, these formal processes need to be overhauled to keep moving in the right direction. It’s one thing to develop or test a new technology, it’s quite another to take it as a hard requirement and incorporate it into the formal procurement cycle to extend it to the largest fighting force. and the most complex in the world and its networks.

Authorization to Operate (ATO) presents a significant hurdle for startups and end users. If a company’s software or hardware is considered secure on one military network, why isn’t it on another? Often companies must go through separate approval processes for each Pentagon office, branch or agency. This could be streamlined without making technology adoption itself a security vulnerability, including leveraging cloud resources more efficiently. It is clear that more work is needed to meet the challenges of the ATO if the new technology is to be scaled at the speeds and levels desired by Pentagon leaders.

The US government clearly recognizes the serious national security and financial imperatives to rapidly adopt Silicon Valley’s most innovative and applicable commercial/dual-use solutions. But as the saying goes, “Rome wasn’t built in a day” and continued efforts will be needed to fill in the gaps and mitigate unintended consequences. Startups must continue to actively engage with the Pentagon and Congress to communicate specific examples of their “pain points” and come up with constructive ideas, while adjusting to a very different business, compliance, and contractual culture than of the Valley. By working together toward success, the Pentagon and Silicon Valley are truly capable of anything, including defending the free world against the worst existential threats.

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