The Air Force seeks a better approach to the thorny problem of software licensing

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The Air Force tests airplanes before it buys them. Now it’s testing software programming tools before buying them. Its goal is to establish the best tools for modernization efforts, both for Air Force programmers and for contractors. The Federal Drive with Tom Temin  got more on the Digital Tools for All initiative from lead program manager for the Air Force Digital Transformation Office, Vince Pecoraro.

Interview transcript:

Tom Temin: Is this primarily a program for the acquisition of software or for the use of software, or maybe a little both?

Vince Pecoraro: Definitely little bit of both. So this is a maybe a new idea on how the government should interact with industry and where the bill should get paid at, no one’s really questioning whether or not the government should have a role in the digital space, we know we have to be competitive with China. We have to be using all the cutting edge digital tools because they are, and because its going to make us a lot faster. But then we have this huge bureaucratic procurement process that we have to live through, the POM, and you know, future planning five years out. And it’s kind of an impediment to getting cutting edge digital tools, especially when you know, five years from now the tool that I need isn’t written yet, hasn’t been created. So we need to think differently about how we can get all the tools inside the government, who can leverage them. And then what’s the sustainable business model for the tool vendors on the back end of that, that can help support them, and also provide them something I call a virtuous cycle. You know, it’s a lot of work to sell in the federal government, it’s not an easy task, we don’t make it easy, especially for a new cutting edge tool vendor to get market share. So this virtuous cycle that I think this model creates, will help give them the ability to focus on their software, focus on the user experience of their software, focus on the connectivity in their interoperability of the software, and their tools. And the training they provide their tools. Help get broader adoption, and get them out of business to try and sell to government. That’s just a really hard thing to do.

Tom Temin: And just a couple of definitions. When you say digital tools, I said programming tools, but tell us what you mean by digital tools?

Vince Pecoraro: When we think about digital tools, think about model-based system engineering, think about open architecture standards and things of that sort. This Tools For All programmer initiative that we’re trying to get after, is really focused on things that the government will take delivery of normally, on a program. So in a program, every contract will have a CDRL that has a scheduled deliverable on it. Okay, well, I can get the schedule that’s in a PDF format, or just a piece of paper that says, hey, here are the milestone dates I’m going to hit. And that’s my scheduled deliverable. Well, that deliverable is only really valid, like the moment it was written. And then after that, it’s kind of old and obsolete. What I would like to get is a schedule delivered in a model, so that that model is constantly updated, just like my iPhone, when I put in my Apple Maps, here’s the destination I’m going to, it’s constantly updating, when I’m going to arrive there based on new inputs, traffic crash, you know, whatever. If there’s a cop running a speed trap that will pop up on the phone. It will give me all the inputs real time, as I’m going through the process of getting to my destination. I want the same thing for when I’m getting through the process of acquisition. I need my schedule to be live all the time. So I want delivery of the model. And that’s a simple example. But we buy really complex things in the Air Force, complex weapon systems. So I would like the model delivered for those complex weapon systems so that my engineers can live inside that model. And they can understand all the design choices that are going on throughout not just at a single point of time, but throughout the entire lifecycle of that initiative or that program. But doing this, it allows us to make much faster decision trades, and be able to adjust real time to what we see the contractor doing or going down a path of that may not be the path because they may not have a piece of information that we just got in or who knows what. The threat might have changed just recently. Instead of having to wait to like a PDR, or some type of like, big milestone review, to be able to provide that information to them or know they’re going down a certain path, we’re seeing a real time, we can do that with almost every CDRL that we have on a contract, instead of taking the paper copy, or the PDF version of that I want to deliver in a model. So anything that can be delivered in a model, that’s what I’m talking about with this Tools for All initiative.

Tom Temin: Therefore, the vendors need to do what with the tools they would normally just sell you and you would take a license to?

Vince Pecoraro: So the vendors, there’s two types of vendors in this scenario, you have tool vendors that make their software and then you have what the government normally buys. Right? We buy a kinetic end product we buy an airplane, we buy bombs, we buy stuff that we use in the warfighting mission. And that’s kind of what the business of the Air Force is. We need to find a way to leverage the good business tools and that’s what the tool vendors are providing, to be able to buy those end products better. So I want to make sure we keep those two lines, kind of in our head, as I talk through the rest of this, in the Tools for All vision, the tool vendors are going to actually give the Air Force all their tools at an enterprise level. So I don’t have to worry about how many licenses I need to buy, which program has all the funding that can buy those specific tools, and my engineers are on those, but I moved an engineer to another program and that program doesn’t have that same tool, I just wasted all my skill set of this great engineer that learned how to use this really cool digital tool, because the new program doesn’t have it and they don’t have funding to buy it. I get rid of the POM problem where I have to plan five years out for the software that I’m trying to buy that doesn’t exist yet. And I get out of the guessing game of what training I should be purchasing how many seats for training, and the tool vendors on the other hand, they have a unique role, right? So they develop the tool and that cost some certain money. But once they have it developed, there’s a deployment thing where, okay, if I put out 100 copies of a tool, or 10,000 copies of a tool, does it cost that tool vendor anything extra, probably not a whole bunch extra, if anything, it’s really the same tool, now you’re interacting with that tool and feeding it data and hopefully making that tool better. But from a tool vendors perspective, what they have to do is get adoption. You know, it’s great to have like the most capable tool in the world. But if nobody’s using it, it’s relatively worthless. Not to disparage anyone’s great coding ability, but like no one’s using it, it doesn’t have a purpose. So I want to give everyone the opportunity to get their tool used. And the government is a great place. Because we have such large datasets and we buy such complex things for these unique complex model-based tools to be utilized. So they’re gonna get value out of their tool being utilized not having to worry about who can sell to the government better. Now, these tool vendors still need to make money. And I’m fully aware of that. So my plan is to prescribe to the program offices, a list of all the different software tools that we have enterprise licenses for. Now, they will be required when they select their CDRLs to actually pick a file format, a proprietary file format of one of these software tools for each one of their CDRL deliverables. Alright, so I put a CDRL on contract for you know, Boeing, or Northrop, the people I buy stuff from, to get that kinetic end product. I’m gonna take a schedule, there’s gonna be all sorts of reports, financial data, all the stuff I need to get. And those are all CDRLs we’ll have on contract. If each one of those had proprietary file format from the tool vendors that I knew I had enterprise wide licenses for the deliverable that comes back to me from the Northrop, the Boeing, whatever defense contractor, it actually comes back to me in a file format that I know I can read. And I can leverage. That means that defense contractor has to figure out a way to either one, develop natively in the software that I asked them to build it in, or find a way to convert that file format. In either scenario, they’re having to work with the digital tool vendors’ software. And that’s where I think the money exchange should occur.

Tom Temin: What has industry’s reaction been so far? This is a fairly new gambit you’ve launched.

Vince Pecoraro: So we had a an initial session, I forget how many people were on there, maybe close to 100 different industry partners came online. We had some of the large companies, some just regular, small, upstart tool vendors, we actually didn’t get a single piece of pushback of like, “Hey, this is an untenable model.” Where I was expecting some pushback was, hey, what if I give you my software, it never makes it onto a contract or on to someone’s CDRL, so therefore, no vendors are actually interacting with my software, and I’m not getting paid for it? I put back to that question, which  wasn’t asked. But if it would have been asked, it would have been that if the government decided not to ever select your software for CDRL, we’d never would have bought your software to begin with, because we’re not going to use it. We want to be able to leverage the best of breed and the right software for the right CDRL deliverable. That’s really important. That means that we could have 10 different, again we’ll stick with the schedule software, if you schedule model 10 different scheduling tools. For certain things, certain scheduled tools might be better than other ones, certain government users may have better adoption or like knowledge of how to use certain tools, and they may kind of tend towards that one. So some of those schedule software may never be selected. And that’s okay. The people that gave us enterprise wide license for that software, it didn’t really cost them much for not using their software to give it to us. So you kind of had a net zero there. That scenario is kind of handled.

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Tom Temin: One more practical question. Does all of this fit within the contract writing system that the Air Force uses because some of those things are like concrete.

Vince Pecoraro: Yeah, so this is pretty tricky. We have or the way we’re going to roll this out to start is through other transactions agreement. So 10 USC 20 through 71 B is a unique other transaction agreement authority that we have to play with it’s protecting authority. And we’re here I want to prototype, how this business model works between industry and the government and us actually having access to relevant software. Under this arrangement, we can go make a business deal with industry, and the business deal or the proposition that I’m offering up the tool vendors, or the “Hey, you give me an enterprise software license, we’ll put you on a list of software that can be used, directed in CDRLs at the end of the day.” And this is getting to another part of that problem for the defense contractors. If I tell them what software to deliver in, they could say, well, I don’t know how to use that software, or I don’t have that software, well, that makes them go buy it, maybe get trained on it. But more importantly, it ensures that we don’t get software deliverables that we can’t read. You’d be shocked to find out how many times and this is what normally happens actually, in the CDRL we’d say contractor’s formats acceptable. So they can deliver in whatever file format they want. And you’d be shocked to find out how many times they build in a model, deliver us the model, but we don’t actually have the software to read the model. We might have spent $10 million on the CDRLl deliverable. And it comes in the form we can’t read. Or if we can’t read it, we have to do this verification validation that’s the government’s job of the CDRL, we check to make sure that it did what was supposed to do. That creates chaos, right? And the government, it happens all the time. So that’s the first problem. The second problem is the contractor knows we don’t have the software to read it. So what do they do, they go and take PDF screenshots of this beautiful model that they built. It’s a completely useless. And that’s what they deliver to us. So both of those scenarios are bad. And it’s obvious to me, and hopefully, it’s obvious to your listeners that industry can adapt much faster to change. You know, one of the comments we got through our event that we held, was that we’re asking industry to effectively be proficient with all software types, all the time. And my pushback to them was right now, that’s what industry is asking the government to do. Right. And we’re way less capable of doing that than industry is partly because of our funding strategy. And just the way how quickly we can roll stuff out there. The more  bureaucracy, the harder the change,

Tom Temin: it strikes me this solves a number of problems. One, the so called “color of money” problem when it comes to software, and to the Air Force’s push toward that digital modeling of everything, including, like you say, hardware, software, kinetic platforms, and making the digital tools fit into that overall model for what the ultimate thing you’re buying is because you buy computers to run software, you run software to do something in the real world. So it helps that real world problem. And then it also sounds like there’s a sync problem, a matchup problem and a cost problem that everybody shares, that you’ve kind of figured a way around. That a fair way to maybe sum it up?

Vince Pecoraro: Absolutely. I think it’s a elegant solution to a complex problem, it gets back to if we think differently about how we face our problems, we can solve any problem in front of us and the government gets back to that kind of like grassroots, specifically the Air Force, there’s a reason that there’s a Space Force. It’s because we had a culture problem in the Air Force, we couldn’t innovate fast enough. And we have to get back to that. Like, how do we think through these really complex problems, let’s just try a whole bunch of really off the wall ideas and see what sticks, and asking industry or digital tool vendors to give us their stuff for free. Like that isn’t off the wall idea that actually I think it has tremendous legs, and we have not gotten any real pushback from industry. They’re actually really excited. I’ve had multiple companies reach out to me saying, Hey, here’s my enterprise wide license, please get me on the list, we’re not quite ready for that we have to actually write a NTEE, you know, there has to be some consideration that government can’t get anything for free. We’re working through that. We have an agreements officer, we’re working through what will be called an invitation to participate. We used this once before and the government or maybe twice before, on something called the Light Attack Experimentation Campaign. I was agreements officer for that. And we actually got industry to give us airplanes. And we gave them no money. But instead, we gave them the opportunity to go through and get a military type certificate for those airplanes. And it was a really cool program. And lots of good stuff came out of it, we kind of proved out the authority. We’re following that same model for the Digital Tools for All and how we’re going to get this stuff with no cost, but super better, tremendous amount of value to the tool vendors.

Tom Temin: Right. And if you decide not to use that tool, then you ship all of the copies and clear your servers of it and so forth. Because there’s always that fear that governmental will keep using it for free, just because copies get made.

Vince Pecoraro: If you think about how the government operates, like, especially when it comes to CDRL deliverables, we are a CDRL reviewer. So that makes us really a light user of any tool. You know, we’re not the guy out there developing the airplane inside the model. You know, there might be a few engineers that are even capable that in the government, but normally we’re reviewing what some really smart people built. And even if we kept that software tool for forever on our servers, and we were not really using it the way they were designed. We only use it to review what comes in. Because we’re not the ones building the airplanes. We’re not the ones designing the bombs. That’s a really critical aspect to understand and kind of shows where the money responsibility should be at for the purchasing of these tools. Now, the other problem, or other solution that I think we highlight is not just the POM problem, right? Like, we’re still going to pay for these tools, from the standpoint of if I have to dictate a tool to Boeing, Boeing is going to then upcharge, whatever, in their contract their indirect to direct, depending on how it’s, you know, if they already have the tool or not, they’re going to charge that program for the use of that tool in some capacity, right? Nothing’s for free in the government. But what it does is that opens up the entire wallet of the Air Force, to be able to go buy digital tools. Instead of right now I have to go POM for specific money specific space of tool to go get it and I gotta guess how many trainings and everything else I need. Now I have the entire wallet. So yeah, Boeing up charged me a little bit, but that money’s already programmed, there’s already been lobbyists that have got that money set in place in its five year POM process. So it’s not a big deal, that they have charged us a little bit of money for the software tool, especially because we actually have the right software now. We have access to it.

Tom Temin: Right, you won’t get a download of 500 PDFs that are useless to you. And you mentioned there’s been very little pushback from industry, they see the advantages. I mean, what about pushback from Air Force brass, because that can be a pretty stodgy bunch, too?

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Vince Pecoraro: The biggest opposition I’ve gotten as come from inside the government, because it’s just a different way of doing business. When I told them, we’re gonna get everything for free, they’re like, that’s not a thing. I said, Look, I’ve done it before with airplanes, we can definitely do a software that’s way cheaper to provide for free. And then we start breaking down on what’s the business model look like? We got actually pretty good support inside the building. Inside the Digital Transformation Office, certainly we have great leadership team there that has empowered us to go down this path and try it. If it fails, what have we lost, really. But if it succeeds, we’ve literally rewritten the way we should be planning and spending money, especially with digital tools to a point where I’ve freed up billions of dollars. And there’s a lot of spend that goes into digital tools right now. All very dispersed, all very siloed, not cohesive. We’ve changed that. And then what more capability can we provide on the kinetic side? What better connectivity can we provide? All these things that the money could be spent on. I’ve worked the POM process for the last couple of cycles for the Digital Transformation Office. We came out as the top funding priority for AFMC, larger commands for the last three years, and we’ve been zeroed out corporately in the POM every year. So now that’s already pushed us three years behind trying to get the right capabilities in place. Instead, I don’t want to have to ask the Air Force corporately to make these tough decisions on what to fund, what not to fund. I want to free up funding for them to be able to make the right decisions on what to fund by giving us all the tools. And you’ll see pretty quickly that if industry does adopt this model, we will speed up so much faster our development cycles, where we’re pushing out more and more capability to the field. And that’s good for everybody.

Tom Temin: Vince Pecoraro is lead program manager in the Digital Transformation Office of the Air Force.

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