Pentagon Sets Up a Silicon Valley Outpost

The Pentagon will set up a new office in Silicon Valley, aiming to harness the creativity of the world’s most famous technology community, senior Defense Department officials told reporters on Wednesday. The Department is working to build new partnerships, identify “game-changing” emerging technology, and clarify to the technology community what it does online to protect the nation.

On Thursday, Defense Secretary Ashton Carter will announce several new initiatives during a much-anticipated speech at Stanford, then meet with Sheryl Sandberg and other representatives at Facebook. (The department will also roll out its second Cyber Strategy, an update to the 2011 document that outlines plans and uses for offensive and defensive capabilities.) On Friday, Carter will attend a roundtable discussion led by one of the Valley’s most moneyed royals, Ben Horowitz, a founder of Andreessen Horowitz, the superstar venture capital firm behind Twitter, Pinterest, and GitHub.

“Yesterday’s startups focused on semiconductors, internet applications and software. Today’s startups are lobbing microsatellites into space, creating autonomous robotics, defining the biotechnology revolution, pioneering additive manufacturing, and exploring frontiers of big data, all technologies with military applications,” said one senior DOD official.

Carter will unveil several new initiatives meant to reshape how the Pentagon does business with the non-defense technology community.

(Related: The Pentagon Isn’t the Only Agency Turning to Silicon Valley)

The first change, and arguably the most significant, is the establishment of a Defense Department cell in Silicon Valley. Likely to be located at Moffett Field, near the NASA Ames research facility, this Defense Innovation Unit Experimental, or DIUX, will mark the DOD’s first permanent outreach presence in the West Coast technology hub. Here’s how the Pentagon is describing it: “Staffed by an elite cadre of active duty and civilian personnel, DIUX will also be complemented by reservists, representing some of the best technical talent in the world. They will focus on scouting emerging and breakthrough technologies and building direct relationships with DOD,” one official said, adding that several of these reservists have already “funded and sold multiple companies.”

DIUX could be up and running in May.

The Department will also establish a pilot program to “tap into the creativity of startup ventures,” the official said. “We will identify promising technologies with defense applications that we have traditionally not developed access to and will foster development of emerging technologies that have the potential for giving long-term advantages to DOD, possibly being game-changers.”

DOD is hunting for “game changers” this year, part of the ever-evolving offset strategy, an effort to identify the breakthrough capabilities that will define military innovation for the next decade and beyond.

The Pentagon will also make a small investment in In-Q-Tel, the CIA’s venture capital outfit, to build out new capabilities in nano-electronics, software and applications. “It’s worked well for the [intelligence community]. If it works for us we’re going to expand it,” said the official.

The Defense Department will also establish a branch of the U.S. Digital Service, a technology initiative former White House Chief Technology Officer Todd Park launched last August to help fix the healthcare.gov website. The Service has been called by NPR an effort to “remake the government’s online image, one website at a time.”

The new DOD branch of the service “will help us surge on some of [the Defense Department’s] most vexing problems” according to the official. The effort initially will focus on transferring electronic healthcare records for troops between the Defense Department and the Department of Veterans Affairs, a sticking point in efforts to forge closer cooperation between the two.

DOD will also upgrade its Corporate Fellows program. Established in 1994, the program sends 15 to 20 officers to top commercial companies every year for a period of about 11 months to learn best practices in the private sector. “The DOD hasn’t fully utilized the expertise that the corporate fellows require. We will expand the program into a two-year assignment,” said the official. Following their year at their assigned company, “fellows will be assigned to a part of DOD where they can implement relevant business practices learned in their experience with industry.”

But can this group of efforts infuse some start-up spirit into the drab goings-on at the Pentagon, let alone close the innovation gap with the private sector?

Peter Newell, a managing partner at the Palo Alto-based consultant group BMNT and a former director of the Army’s Rapid Equipping Force, said the efforts were a good start. But if DOD is going to get the most out of its new partnerships with California’s tech crowd, it needs to change its culture, particularly in the ways that it embraces experimentation (or doesn't.)

“The really hard work starts when it comes time to actually transition an idea out of an ‘incubator’ and into the system,” Newell said. “DOD has many of the tools they require to make it work, but they will need to train their people to use them and to expect some level of failure of the effort in the process. I would go so far as to say if there aren't some failures generated from the interaction between DOD and Silicon Valley, then they aren't trying hard enough. The lean start-up lexicon of ‘fail and fail fast’ will not be an easy thing for DOD to put into practice - however it is not impossible.”

Newell says DOD ought to get more troops, not just Pentagon types, interacting with the tech community. “The most ingenious people in the military are those who serve on the front lines and whom have to solve life and death problems with whatever they have on hand at the time,” he said. “DOD's innovation practice must include a means to put those ingenious ‘super-users’ from the front lines in direct contact with the innovators in the Valley to generate a discourse on the problems that need to be solved [instead of] just looking for new technology.”

We Come In Peace

As he meets with tech players and speaks to students, Carter will be spending some of his time wooing Silicon Valley types that might be skeptical about joining with the Department. Carter will be explaining what DOD will and won’t do online for the sake of the nation.

In particular, Carter will be discussing the limited role that the Department plays, or could play, in the nation’s cybersecurity. When it comes cyber attacks on the homeland, DOD’s role is dwarfed by those of the Department of Homeland Security and FBI. The Pentagon’s cyber teams spring into action only when a hostile action “rises to the level of an armed attack,” meaning “an attack of very significant consequence, not a denial of service attack or a mere hack,” said one senior official. These kinds of incidents  constitute less than 2 percent of the cyber attacks launched against the United States, one official estimated.

Carter will also seek to reassure members of the technology community that the Department of Defense comes in peace. “We’ve said this before, but because the secretary believes a lot in transparency, he just wants to make sure that is clear and in particular make sure that some of the people who have concerns about this in Silicon Valley have an opportunity to ask about that and get further insight into that mission,” the official said.

Of course, the primary cultural and political issue that divides the Pentagon and Silicon Valley is NSA activity. That, too, will be a topic of discussion between Carter and the industry types he’ll be visiting with.

“Because of some of the issues associated with NSA in the past, we also thought really clearly about how we want to communicate transparency, openness, the values that are important to the secretary and the department in terms of respecting privacy, respecting the constitution, the values and things that we cherish here in the Department and that we fight for when defending the nation,” said the official.