DoD is training procurement managers on the use of nontraditional contracting for technologies the military needs and where the private sector is moving fast.

WASHINGTON — The defense acquisition bureaucracy inside the Pentagon is being downsized from 17 to eight offices. Senior civilian management positions are being pared down from 353 to 233, and military posts from 61 to 42. Contracts that required 83 checks and approvals will need just 22. Weapon systems that were centrally managed by the Pentagon are being turned over to the military services.

“We are rethinking how we do business,” Ellen Lord, undersecretary of defense for acquisition and sustainment, told reporters on Friday.

With China and Russia threatening to out-innovate the United States in areas like advanced missiles, additive manufacturing, space weapons and artificial intelligence, the Pentagon is not just in a competition against adversaries but also in a race against itself.

How the Pentagon buys technology in the digital age has long been a cause for concern and is a major theme in the defense policy bill for fiscal year 2019 that a House-Senate conference passed last week. The bill includes dozens of provisions for “rapid innovation,” “rapid prototyping” and “rapid acquisition.”

Lord said her office is training procurement managers on the use of nontraditional contracting for technologies the military needs and where the private sector is moving fast. She is also working on a new policy on how to use new congressional authorities that give the Pentagon more freedom to experiment with prototypes.

The Pentagon continues to struggle with the acquisition of software-intensive technologies and that is worrisome, said David Deptula, a retired Air Force lieutenant general and dean of the Mitchell Institute for Aerospace Studies.

A key question is how the Pentagon will adapt industrial-age buying methods so it can benefit from the privately funded technology coming out of the space and information technology industries. Commercial companies are bringing capabilities to the market that the military needs to prevail in the so-called “great power competition” against China and Russia, and the Pentagon has not yet figured out how to work with these fast-moving industries, Deptula said. Small satellite companies, for example, will be able to provide signals intelligence from space as a commercial service. Others are developing space communications systems that will deliver enormous bandwidth capacity at a fraction of the cost of current technologies, he said. “DoD needs to capitalize on those capabilities.”

‘Scale and speed’

Technology is changing and “our industrial paradigm cannot keep up,” said Air Force Lt. Gen. VeraLinn “Dash” Jamieson, deputy chief of staff for intelligence, surveillance and reconnaissance. In the digital age, military commanders have to make “war fighting decisions at the speed of relevance,” she said last week at a Mitchell Institute event on Capitol Hill.

Something basic like updating the software of a military aircraft today is very time consuming and labor intensive. “If you drive a Tesla, every time you start the car there’s an instantaneous upgrade to all its software,” Jamieson said. “Netflix does the same thing. Instant updates at scale and speed. That’s where we have to be.”

The Tesla example illustrates why artificial intelligence is such a game-changing capability that the military absolutely must have, she said. “China is building digital AI cities in military-civilian partnerships.” Russian leaders have said they consider AI as the “key to beating the United States.”

Accurate and timely data is essential to winning wars, and that requires a different way of procuring technology, said Jamieson. A major problem today is the lack of data standards so platforms can’t share imagery or full motion video. “In the past we haven’t articulated that,” she said. “We said to industry, ‘build me a thing.’ Now we have to talk about how we will use the data.”

A Pentagon program to acquire an enterprise cloud-computing infrastructure should help bring the military into the digital age, she said. “I understand the power of the cloud. It will give us speed and scale.”

The Defense Department’s Chief Information Officer Dana Easy on Thursday unveiled the final request for proposals for the “joint enterprise defense infrastructure cloud,” a massive procurement projected to be worth $10 billion. One of the benefits of this cloud environment, Deasy said, will be a capability for “data-driven decision making.”

Traditionally the Pentagon has struggled with software procurements, noted Will Roper, assistant secretary of the Air Force for acquisition. Software is now bought as a service, he told reporters. Years ago, “I was trained that software was a product like hardware. Now it’s more of a service.”

The AI revolution is going to challenge the Pentagon’s acquisition system, Roper said. “We have to make awards in weeks, not months. AI companies are a different breed. The pace is faster, there is quicker turnover,” he said. “For AI we’re going to need software people that are tweaking algorithms with the users.” There is not sufficient talent in DoD today, he said. “I don’t think we’re attracting the right people.”

Technology executive Michael Hermus, founder & CEO of Revolution Four Group, said the government was never designed to move rapidly, but an even bigger problem than the speed of acquisition is poor understanding of what technologies are available and how they could be used. “Without the government itself understanding how to apply these technologies, you can’t simply outsource to commercial entities.” He said it is important for the government to have knowledgeable buyers.