How JADC2, competition with China could spur DOD budget reform

Could the Defense Department’s goal of having unified communications across the military -- along with an escalating tech competition with China -- be the impetus needed for true budget and acquisition reforms?

Bill Greenwalt, a fellow for the American Enterprise Institute who served as the deputy undersecretary of defense for industrial policy during the Bush administration, said the budget process “is the single most important process to look at if you want to have acquisition reform.”

“In the near term, we need to move fast because China’s moving fast,” embracing flexible budget pilots that could be for specific missions, while striving for long-term reforms, Greenwalt said during a March 5 virtual Hudson Institute event on budget agility and competing with China. 

He suggested that one model for such a pilot could be Operation Warp Speed. “Think about that: multiple experimentations, multiple prototyping, multiple sources of innovation tied to acquisition authorities and Defense Production Act authorities,” Greenwalt said. “Doing all of that in testing at DOD would be something to start right away, so we could do it by mission.” Greenwalt said.

Greenwalt’s call for exceptions to the traditional procurement process echoed those of Eric Schmidt, Google co-founder and chair of the National Security Commission on Artificial Intelligence, during his February testimony before the Senate Armed Services Committee. Schmidt suggested Congress consider selecting four defense and “by law state that they will not be run by using the normal procurement mechanisms,” but rather by an congressionally appointed committee. 

Lt. Gen. S. Clinton Hinote, the Air Force’s deputy chief of staff for strategy, integration and requirements, said progress in IT and networking capabilities happens too quickly to “put a dollar figure on” what the military may need in five years.

"That sector is going so fast, that I don't know what the specific solution set might look like in 2027," Hinote said during the March 5 event. "While we have a general understanding of why networking is so important and a general understanding of the types of things that we have to be able to do -- we have to be able to sense, we have to be able to connect with each other, we have to be able to decide and act -- we know the general requirements and I think we know the general trajectory of the acquisition program. What we don't know is what we're going to buy in 2027."

The military, at its best, Hinote said, needs to be a team during conflict, which means warfighting domains -- air, space, sea, land, and cyber -- must cooperate and communicate. To get to that level of networking capability, DOD will likely need to "reimagine" its budget process to account for rapid IT developments, like those required for the Air Force's Advanced Battle Management System.

Hinote said the budget process would need to be flexible enough to include oversight from the defense secretary, Office of Management and Budget and Congress, while still allowing for experiments and iterative developments.

Rep. Adam Smith (D-Wash.), chairman of the House Armed Services Committee, said the modernization needs for DOD's command and control systems to combat information warfare was central in the debates around defense spending and budgets.

"If you have a 500-ship Navy and you're up against someone who has a five-ship Navy, but they're able to shut down your information systems so none of your 500 ships work, they win," said Smith during a virtual Brookings Institution event on March 5.

Smith said DOD's command and control information systems need to be durable, resilient and replaceable to avoid single points of failure.

"We have to be able to protect those systems and ideally we have to be able to build a system so that we can make our adversary systems more vulnerable. That really needs to be the focus," Smith said. "Let's just figure out what we need, buy it, and make it work."

But ultimately, it will require a culture change that shifts modernization conversations from the myopic to systemic.

"Instead of fixating on legacy systems, we should be thinking about how we can plan, develop, and modernize differently so we don't get stuck with what we know now when the systems deploy later," Elaine McCusker, a fellow at the American Enterprise Institute and former comptroller for DOD, said at the Hudson Institute event.