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Shanahan: Pentagon Needs to Learn from Industry to Develop Systems Faster

Defense Patrick M. Shanahan. DoD Photo

SAN DIEGO, Calif. –The Pentagon’s number two civilian says industry needs to develop the systems and programs the military doesn’t even know it needs yet.


When compared to the commercial sector, Deputy Secretary of Defense Patrick Shanahan said the Department of Defense is slow in evaluating and acquiring the innovations created and adopted by the industrial base.

“The department shouldn’t be setting standards, industry should be setting standards,” Shanahan said speaking at the WEST 2018 conference.

As an example, Shanahan mentioned the department’s move to adopt cloud computing. He wants a system put in place that’s both useful now, but adaptable to future needs. Industry has used cloud computing for years, but the Department of Defense is still evaluating the technology.

In the meantime, Shanahan said redundancies exist that probably could be erased using cloud computing. He pointed out how each service branch has its own financial service system. A cloud computing system could reduce this, he said, saving both time and money.

“It isn’t just about moving to the cloud,” Shanahan said.
“The cloud is a huge enabler so that we can get to doing things across the department that industry has done for a long time that has enterprise-wide services.”

At the same time, Shanahan wants to ensure once a new technology is adopted, a legacy system is not still funded to accomplish the same task. This means also instilling in the department a sense that individual technologies or systems are not what’s important, rather the focus should be on what such technologies or systems accomplish.

“The cloud is not our goal,” Shanahan said.
“Our goal is to get a lot of the data into an environment where we can start making better decisions.”

He created a reform management group to focus the department on finding ways to save time and money in adopting new programs. Doing so, he said, is really at the core of the recently released National Defense Strategy.

“We must make our systems and products affordable,” Shanahan said. 
“Our biggest opportunity is to be smarter and faster when it comes to the development of these programs.”

The military has the money to develop new technology. What he wants to do is develop a better understanding inside the Pentagon of how much things should cost and how to best define good.

“We have to get past everything is measured in improvement,” Shanahan said.

Shanahan recognized he’s asking a lot of industry. The military, he conceded, does not do what industry wants – integrate new products and services quickly, in a balanced manner with a predictable revenue stream. All too often, he said new systems and programs are bogged down in planning, increasing costs and ultimately decreasing their applicability when ultimately deployed.

“We know that you’re going to invest, it’s just we have to be very clear on how we want to integrate those investments and how we want to evolve certain capabilities,” he said.

  • Zorcon, Fidei Defensor

    A good place to start is by not crushing small businesses with onerous rules and regulations and streamline the procurement process. Small businesses can’t handle months to year long RFP to buy cycles. I have seen it take upwards of a year for a contract mod or a buy to take place. Each delay means re-quoting, checking inventory, etc only to see it slide endlessly to the right. Small business doesn’t have the cash to tie up on “maybe someday”. It did not used to be this way but since about 2008 it has become harder and harder to get a contract awarded and even after award, it takes months to actually start work.

    • Leatherstocking

      Agree. Several substantial new policies in areas such as cybersecurity and drawings/documentation have been levied without any way to pay for the additional costs. Small businesses in the DoD industrial base are being crushed by budget deadlocks, continuing resolutions and caps. Some 20% (17,000) companies contracting with DoD have abandoned the industrial base since 2011 according to a recent CSIS study briefed to Congress. I’d love to develop products as I do for my commercial customers but first remove the elephant on our backs.

    • Ctrot

      Agreed. Been there and did that. Used to work for a small family owned ~50 employee metal fabrication company that did some business with DoD. I can’t count the number of times we didn’t even bid on a job that would, had it been in the civilian world, have taken a week at most to put together a quote package for because the “onerous rules and regulations” in the DoD RFQ would have turned it into a costly months long process.

  • kye154

    What Shanahan is saying is not possible within DoD, when you have prime contractor’s, like Lockheed, or Booz,Allen,& Hamilton, Raytheon, and other contractors calling the shots for DoD..

  • Rudy43

    This is one of the more ignorant things I have heard from the military civilian leadership. It sounds too Macnamarish for me.
    1. The military is not about efficiency, it is about having the means and the will to do the job. The job is to overwhelm the enemy when called upon. This is not measured by efficiency, it is measured by secure force applied.
    2. In an age of cyber warfare concerns, the “Cloud” is one of the least secure suggestions I have heard.
    Where is Mattis on this?

    • MDK187

      Mattis has been firmly on the side of Snake Oil solutions thus far.

  • John Locke

    LOL
    “industry should be setting the standards”
    LOL
    Whose pocket is this guy in?
    Yeah, industry can set the standards, the standards that are most profitable for them.

    • Ctrot

      Because profit is a dirty word comrade?

      • Marc Apter

        So you are willing to sail and submerge on a Submarine built with standards industry will decide what standards will be allowed?

        • Ctrot

          Read the article. No one made any such suggestion.

      • John Locke

        No, because taxpayers expect their dollars to be spent wisely by the Gov, DB.

  • MDK187

    “the military doesn’t even know it needs yet” – it’s the only way to sell a lot of bullschit, you see.