Pentagon, Defense Contractors Are Out Of Step On Tech Innovation, GAO Finds

Two years after the Pentagon set out to spend billions on 10 breakthrough research and engineering efforts, defense contractors instead are putting most of their money in less ambitious research projects. The development gap between the military and its suppliers troubled investigators at the Government Accountability Office, or GAO, who determined in a report released Thursday that the Defense Department isn’t keeping good watch over those private efforts and doesn’t know how much of it would fit into the military’s tech goals.

The Pentagon’s undersecretary for research and engineering in 2018 laid out several big idea research areas that would be most relevant to maintaining an edge on China or Russia. Many are in the very early stages of maturation; the biggest breakthroughs are expected in the second half of the coming decade. 

They are: artificial intelligence, autonomy, biotechnology, directed energy, space, cyber, microelectronics, hypersonics, networked command and control, and quantum science. These areas of the future will go on to determine technology superiority in 2030, and the Department of Defense is eager to invest . It plans to spend $7.5 billion on artificial intelligence, autonomy, hypersonics, and directed energy this year, according to the report. 

But GAO found that defense contractors in the past four years have been putting only 40 percent of their independent research dollars, sometimes called IR&D, against those priorities. Coincidently, “our analysis also showed that the majority (67 percent) of IR&D projects completed between 2014 and 2018 focused on incremental, rather than disruptive, innovation.” 

In other words, while defense contractors are spending some of their money on big ambitious goals, they prefer to spend more on low-hanging fruit, in little improvements to existing technologies that they can sell to the government more easily.  

Part of the reason for the apparent spending priority gap may be that the Defense Department doesn’t track contractors’ research and development spending very well. “Neither DOD nor the military departments review industry IR&D projects as part of their science and technology strategic planning processes. DOD is not reviewing IR&D projects because DOD’s IR&D instruction does not require such consideration of the projects,” notes GAO.

The Defense Department maintains a database to track the projects where contractors are spending research money. But individuals within the department make very little use of it.  “For example… the Air Force accounted for more than 55 percent of all searches in 2019, primarily, from users with the Air Force Research Laboratory (AFRL).” The Pentagon’s own lack of awareness could result in components, offices, or other parts of the military investing in research projects without knowing that a private company has a similar project underway. 

GAO recommends a few simple things to put the Pentagon and contractors more on the same page. First, make it mandatory for personnel in the office undersecretary of research and development to actually review defense industry IR&D; and, second, make the database more useful by asking the contractors to submit more data, like whether the projects they are undertaking are disruptive or just incremental, and the estimated cost when completed.