For their next acts, former Trump administration DoD officials look beyond traditional defense contractors

WASHINGTON — It wasn’t until after Ryan McCarthy left his post as U.S. Army secretary that he discovered a company with technology he had spent years wishing existed.

During his time at the helm of the Army, McCarthy knew the service needed a cloud architecture that could operate at the tactical edge of the battlespace and control assets such as unmanned ground vehicles and drones. But “I never found the technology” to do that, he told Defense News in an exclusive interview.

McCarthy retired from government service in January 2021 after serving as Army secretary since September 2019, when then-Army Secretary Mark Esper was promoted to defense secretary. McCarthy had previously served as Army undersecretary, then as acting secretary until Esper was confirmed in late 2017.

Now McCarthy has joined the boards of several technology firms. While many former military officials sign on with major defense contractors, McCarthy has eschewed the brand names in favor of mostly smaller and nontraditional companies.

“It’s hard to leave an institution that you love,” McCarthy said, “but at this stage in my life, I was looking a lot for culture, as in: Where were the people that had similar interests and good chemistry, and where I had the most opportunity to provide advice, to add value, and where was the focus of their business, how did they want to contribute?”

Indeed, McCarthy is one of several former Trump administration Pentagon leaders to join less traditional companies since completing government service. The moves align with an increased focus by the Defense Department on transformative technologies — from artificial intelligence to 5G networks to hypersonic weapons — and a far more aggressive push to reach smaller technology companies and startups.

Byron Callan, a defense analyst at Capital Alpha Partners, told Defense News the trend reflects a changed environment that started with Silicon Valley outreach under Obama administration Defense Secretary Ash Carter.

“You didn’t have that in some of these prior cycles,” Callan said. “There just wasn’t this cohort of smaller ... techie startup people who really need a lot of help.”

Jerry McGinn, the executive director of George Mason University’s Center for Government Contracting and a former DoD official, told Defense News that at larger prime contractors, “it’s harder for you to go into a place where you can really move the needle.”

At a smaller company, on the other hand, board members are “making decisions with the company management on business strategy. You get more hands on, you get more of the ability to really shape the company and its direction.”

Looking to disruptive tech

Together with Esper, Army Chief of Staff Gen. Mark Milley (who is now chairman of the Joint Chiefs of Staff) and Vice Chief of Staff Gen. James McConville (who is now Army chief of staff), McCarthy helped establish in 2017 a new four-star command — Army Futures Command — tasked with rapidly modernizing the Army.

Creation of the command was touted as disruptive and an attempt by the Army to break out of its long-term pattern of failure when it came to adopting new technologies and weapon systems.

Knowing that he was departing, even as the Army was in the midst of this new transformation, McCarthy said he wanted his next step to correspond with that unfinished business.

Following a suggestion from a former colleague, McCarthy looked into Tomahawk Robotics, a company in Melbourne, Florida. He thought the business might have the answer to connecting assets through a cloud at the tactical edge.

“They have a technology [called Kinesis] that can command and control various sets of drones, from very low-end to high-end,” McCarthy said. It’s “able to fuse all of the information right there at the edge so that at the company-grade level, you could have one individual company commander and command group there [that] could operate and bring all of those different data points together into one common sight picture.”

“It was incredible,” he said. “I was like: ‘I’ve been looking for you guys.’ ”

McCarthy was so impressed, he agreed to join Tomahawk Robotics’ board of directors. Though the company is small, it has won a series of contracts with the Navy and the Marine Corps, and it is now starting work with the Army to demonstrate its technology.

“It’s really going to transform how human beings can work with robots and unmanned systems because today if you did it, you’d have eight to 10 people operating your 10 different drones on a target,” McCarthy said. “[The] Kinesis common control system is going to really be an [artificial intelligence]-edge processor.”

McCarthy continued to meet with both large defense firms and nontraditional companies in the early months of 2021 as he planned his new career outside of government. He was most drawn to companies specializing in artificial intelligence, robotics, autonomy and low-Earth orbit satellites.

He next agreed to join the board of Scout Ventures, the venture capital firm that owns Tomahawk. Both venture capital and private equity firms, he noted, “find all these very talented entrepreneurs and really good ideas, and they become the mechanism to bring all these good ideas to life.”

Discovering nontraditional talent has been a challenge and a focus for the Army. When McCarthy oversaw the service, Army Futures Command set up the Army Applications Laboratory at the Austin, Texas-based Capital Factory, a space meant to connect entrepreneurs with investors.

McCarthy has also joined the board of Austin-based Striveworks, an artificial intelligence and machine-learning technology company that initially developed algorithms for predictive analytics in electronic trading.

For example, if a bomb goes off in an oil field in Saudi Arabia, one of the company’s algorithms can quickly calculate how fast and how much supply would go offline as well as how it might affect global trading, McCarthy said.

“Why can’t we do something like that with targeting? You have all your assets stacked and racked worldwide. You’re in the middle of a firefight in Iraq or Afghanistan, wherever you are in the world. Why can’t you develop a solution in seconds?” he said. “Why does it take 20 minutes? How do we get technology to help us crunch the data faster to tee up options for a commander to help make a decision?”

Striveworks has already won contracts with U.S. Special Operations Command, McCarthy added.

In late 2021, McCarthy joined the board of a more traditional contractor: CACI International. The company has aggressively made acquisitions to strengthen its portfolio of products, he said.

“I liked the portfolio of the company,” he said. “If you look at where they are positioned in digital solutions or cyber and space — [those are the domains that are] going to be tested the most over the next decade and [have] the capabilities that combatant commanders are going to need in order to really win in a competition space and be able to support national objectives, because in near-peer competition that’s all phase zero.”

McCarthy said the slate of companies in which he’s involved reflects what he learned while in government.

“AI, robotics, autonomy, LEO satellites: Those things are very interesting to me. I tried to work on a lot of that when I was in the government because ... at the end of the day, I was listening to commanders, [asking] what do they need. It was less about my own personal view but more of how to answer the mail of the most important customer — the Department of Defense, the warfighters — and help them with capabilities to give them the technological margin they need to win,” he said.

Post-government choices

McCarthy is not the only former DoD official who sought work apart from big defense contractors. Esper in the spring of 2021 joined the board of Epirus, which was founded in 2018 and offers a counter-unmanned aircraft system swarm capability that caught the eye of the armed services.

(It’s worth noting both McCarthy and Esper worked for big defense contractors in the past. McCarthy worked, most notably, on the F-35 Joint Strike Fighter program at Lockheed Martin, while Esper was a senior executive at Raytheon Technologies.)

Former Navy acquisition chief James “Hondo” Geurts last month joined Esper on the Epirus board, along with retired Air Force Maj. Gen. Joseph Reynes, who most recently served as deputy chief of operations at Headquarters Allied Joint Force Command in the Netherlands. Geurts previously worked as the acquisition executive for U.S. Special Operations Command; he was notorious for rapidly finding and delivering the latest technology to the force.

Meanwhile, former Air Force acquisition chief Will Roper is now chief executive of Volansi, a commercial drone delivery company. He previously served on the board there. And over the summer, he announced he would become an adviser to the British Royal Air Force.

Roper was a champion of attracting commercial companies while heading Air Force procurement. For instance, he oversaw the creation of AFWERX, an Air Force program that focuses on awarding deals to startups and nontraditional contractors.

When Roper was tapped to lead Volansi, he noted in a statement how some commercial vendors bring “speed and agility historically absent in government procurement.”

“Volansi is uniquely positioned in the commercial UAV market because of their focus on cargo and logistics, both huge components of modern militaries. I am excited to help them think through opportunities to bring on-demand, life-saving capabilities to men and women in uniform,” Roper said at the time.

The Silicon Valley-based firm and Sierra Nevada Corporation announced a teaming agreement last month to compete for the second increment of the Army’s Future Tactical Unmanned Aircraft System program, which aims to replace the Shadow drone with a runway-independent aircraft.

Ellen Lord, who served as undersecretary of defense for acquisition and sustainment in the Trump administration, joined the boards of Denver, Colorado-based Voyage Space Holdings and of AAR, a provider of aviation services for both commercial and government operators.

Before serving under the administration, she was president and chief executive of Textron Systems.

“If you think about where you get the most bang for your buck,” Callan said, “it’s going to be the smaller startups because they really do need the most help at kind of navigating, and that’s ultimately what these board members are going to do.”

But, Callan added, he’s curious if these former top officials can help companies break into significant DoD sales.

“This is the start of a process, but I think the real proof of it will be in two or three years’ time with these guys. Have they been able to bid for programs? And if they win, all that experience and knowledge and the connections have paid off.”

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