Buying commercial in DoD: Pentagon struggles to stay away from customization

Last year, the Pentagon spent nearly $75 billion on acquisitions of commercial items, more than double the amount from five years ago. But the word "commercial"...

It has been 15 years since Congress told the military to start buying more commercial products using more commercial buying practices. Leaders from across the military still are struggling — and in some cases succeeding — at meeting military needs with items industry already makes. Each of the military services wants to take advantage of rapid innovation in the commercial world, especially in the field of technology.

But sometimes, even when a product starts out its life as a commercial item, by the time it’s been altered to meet the Defense Department’s specifications, it bears little resemblance to its commercial roots and starts looking a lot more like a traditional military-specified item.

Kevin Kelly, chief operations officer, LGS Innovations
“It’s looking like these solutions are having to migrate to a more familiar DoD format before all’s said and done,” said Kevin Kelly, chief operations officer for LGS Innovations, the federal subsidiary of telecommunications giant Alcatel Lucent.

Kelly speaks from experience. His company spent about $30 million to participate in the Army’s Network Integration Evaluation, where companies get to show off their products in real-world environments to see if they meet current gaps in military capability. The product in this case was a commercially-developed 4G cellular base station. Or at least it started out that way.

“But when you look at what it’s going to take in order to deploy this in large form, this is a very specialized solution that has to withstand shock and vibration, temperature and environmental specifications that frankly don’t exist in the commercial telecom environment,” he said. “While we created that solution that’s going meet all of the Defense Department’s needs, that came at a cost. We found a way to take advantage of the commercial development in the best way possible, but at the same time, it’s a very non-commercial device when all is said and done. It’s really not sellable to the service providers of the world.”

NIE changes the Army’s traditional approach

The Army says, and many members of industry agree, that the NIE approach to testing and acquiring new capabilities, including ones from the commercial marketplace is a complete game changer compared to how DoD traditionally has bought new systems in long programs of record.

“We’re going to look for the latest and greatest network capabilities and make sure we’ve got them integrated so that we can start closing that gap we have with industry,” said Col. John Morrison, director of the Army’s LandWarNet/Battle Command directorate, in a recent interview with Federal News Radio. “That’s absolutely imperative to the Army’s modernization strategy. Industry is a key player in our approach as we move forward.”

The Army says the first couple of NIEs have already saved it enough money to pay for the next several years of such exercises. Much of the savings, the service says, have come from cancelling costlier, more traditional programs of record and replacing them with commercial products.

Col. John Morrison, director, Army’s LandWarNet/Battle Command
Kelly said the NIE approach is the right idea for keeping up with the commercial technology development cycle.

“But what you don’t see yet is an acquisition process and cycle that will match. If you’re interested in buying these commercial technologies, you have to recognize that many of them are on a six-to-eight month lifecycle,” he said.

Kelly said in order for the process to meet the Army’s vision, the service is going to have to develop standards and testing mechanisms that are flexible enough to accommodate commercial technologies without piling on expensive, time-consuming modifications and certification procedures.

“If you’re constantly going through a re-certification or a reclassification with these devices, that is what’s going to frustrate the commercial manufacturers,” he said. “They’ll lose interest in the process if they feel like they’re in an endless do-loop of re-certifying their solutions.”

Kelly said he’s optimistic that the process will get easier for commercial vendors as time goes on, and he’s a long way from being frustrated by the process.

But he’s still waiting to find out if or how the Army will buy the system his company tested.

Clear, industrywide standards

Retired Army Maj. Gen. Dennis Moran is more upbeat about the Army’s ability to buy products tested at the NIE, perhaps due in part to the fact that the first exercise led to a $60 million order for radios from his firm, Harris Corp.

“It’s a maturing process,” he said. “We’re only in the third iteration at Fort Bliss right now, and it is the Army’s intent, and they have the appropriate acquisition notifications out there that they’re going to use the results of this upcoming Network Integration Evaluation to buy some no-kidding commercial off the shelf products. I think you’ve got to remember that DoD and the Army in particular is a process-oriented organization. They have to put the appropriate rigor in to make sure that when they do make a decision it’ll stand up to oversight. I’m confident that it will.”

The Army says a key to agile acquisition is going to be establishing clear, open, industry-led standards for the network capabilities it will buy in the future. The service is doing that through the development of what it calls its Integrated Network Baseline and Common Operating Environment.

“It’s going to take us some time to work our way down that path, because we had a lot of stove-piped development going on,” Morrison said. “What we’re looking for now is integrated development so that we can give our commanders and our soldiers the capabilities they need.”

In 1994, Secretary of Defense William Perry ordered DoD to start using industry-led standards and transition away from the “MILSPEC” standards that had prevailed up until then. And today, standards are a major topic of conversation across the military services, particularly in the information technology field.

“There’s a simple rule that we’ve now established. Customization bad. Standards good,” Terry Halvorsen, the Navy Department’s chief information officer told an AFCEA industry audience earlier this month. “It’s almost that simple. Customization costs us lots of money. We’ve got to stop making everything so special with our IT. We’ve got to get out of that practice.”

Terry Halvorsen, chief information officer, Navy
The Navy says it did get out of that practice for its Consolidated Afloat Networks and Enterprise Services (CANES) program. CANES is designed to create a standardized IT architecture for ships across the fleet. Rather than designing a new military-specific system, the Navy decided on a common, completely open architecture that leans heavily on off-the-shelf hardware and commercial standards.

Because of that, Capt. DJ LeGoff, the CANES program manager, said the Navy let more vendors compete and beat initial cost estimates for the system by 44 percent.

“We took our five basic networks and we said we’re going to meet all of their requirements with this one open architecture,” he said. “This way we can continue to keep pace with industry, and we’re going to have the same infrastructure on the ship regardless of which enclave you’re using. Why we didn’t do it that way from the start is a bunch of hindsight.”

Avoiding the silo

And there are some firms selling to the government that couldn’t exist without industry-led standards.

Sean Varah, the CEO of Silicon Valley startup MotionDSP, said his company is one of those. His firm makes high performance software that analyzes and improves vast quantities of full motion video, like the kind that comes back from the unmanned aerial vehicles used by DoD and the intelligence community. His company purposely designed its software so it can run on off-the-shelf computer gaming hardware that’s available at a local Best Buy.

Varah said the reason his small company’s product can work with pretty much any video system the military uses is that the National Geospatial Intelligence Agency got together with industry and developed a common set of standards for full motion video.

“Whether you think about [commercial-off-the-shelf], open standards or [government-off-the-shelf], what the government needs is to be able to buy and source technology from a variety of vendors and to be able to get those capabilities to interoperate together in a practical way. They want to avoid the traditional siloed solutions that they were getting, traditionally from the defense primes,” he said. “I have a [Special Operations Command] customer who literally told me they have seen people die because systems couldn’t talk to each other. They need to not repeat that mistake.”

Varah said the open standards let companies like his who’ve written standards-compliant software integrate their products with existing DoD imagery systems in about half an hour. He said that keeps the government from getting locked into proprietary solutions and injects competition. And he said he’s happy to compete.

“The benefits of open standards and COTS is it lets companies focus on their strengths,” he said. “We’re a small company and we’re experts in image processing. I don’t particularly want to build my own silicon chips. I don’t want to build transport mechanisms. I don’t want to buy satellites to move video around. I want to focus on making the best image processing software. If that means I’ve got to head to head with a competitor, fine. Game on.”

Despite some successes, the Pentagon has a long way to go on the path toward buying commercial, according to Dr. Jacques Gansler, who served as DoD’s undersecretary for acquisition, technology and logistics from 1997 to 2001.

Little change since 2009

Gansler led a Defense Science Board study, which identified barriers to successful commercial buying in 2009, and said not a lot has changed since then.

“I really don’t see as much progress as I’d like to, and maybe it’s just because I think there’s such an opportunity here,” he said. “There’s such a need relative to the budget that didn’t exist a few years ago when we were living in a period of budget explosion. Now it’s pretty clear that if you look forward, the budget’s going to be driving a lot of things. Why shouldn’t we take advantage of the potential that come from buying commercial?”

Gansler said DoD’s recent proposal to crack down on the definition of commercial products and when streamlined commercial acquisition practices can be used appears to be a step in the wrong direction.

“That gets you to the difficulty of trying to distinguish between a product that’s commercial and a product that’s for the military. If it fits, use it,” he said. “The fact that we use some of those specialized practices to be able get commercial stuff is almost a shame. We have to go around the system in order to be able to get the best stuff. We really need to lower the barriers to buying commercial.”

DoD’s request to change the definition of commercial items was rejected by House lawmakers when they passed their version of the 2013 Defense authorization bill last week. It could still emerge in the Senate’s version of the legislation.

Editor’s note: This is the second part of a two-part series on commercial purchasing in the Defense Department. Read the first part here.

This story is part of Federal News Radio’s daily DoD Report brought to you by United Health Military and Veterans Services. For more defense news, click here.


Buying commercial in DoD: 15 years after acquisition reform

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Army readies new network standards

Navy says CANES network is 44 percent cheaper than expected

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