WASHINGTON — Since 2007, Alan Shaffer has helped guide the Pentagon's research and development (R&D) efforts as the principal deputy in the Office of the Assistant Secretary of Defense for Research and Engineering. This summer, he is leaving that job to take a new one as the director of the NATO Collaboration Support Office.
With that unique experience in mind, Shaffer discussed the need for more international collaboration on research and development, how industry is reacting to Better Buying Power and how NATO might spend its future funding.
Q. As you prepare for your new role at NATO, what are your priorities?
A. You do research and engineering for three reasons. The first is to mitigate current threats, and very soon, future threats. So that involves electronic warfare, cyber defense, maintain space capabilities, counter WMD, and missile defense. I think that those are still going to be good both in the US and in NATO.
The second reason you do research and engineering from taxpayer money is to build affordability into the things that we are buying. Because money has been tight, that reason has been heightened over the last couple of years. That talks about doing better systems engineering upfront. It talks about enhancing your modeling and simulation capability. It talks about open systems architectures. It talks about prototyping to retire technical risk. So the second reason is more affordability, but it is attacked not through technology areas but through processing.
Then the third reason that you invest in research and engineering or S&T [science and technology] is to build technology surprise. In the US, we are trying to do that in hypersonics, directed energy, things like quantum sciences, human factors, human behavior and synthetic biology. I think many of those will be the very same in NATO.
Q. You see a lot of overlap between US and NATO priorities, then?
A. I think the three broad areas are really applicable, and you just have to apply the lens of the organization you are working for. For NATO, they will assume that we have the platforms to mitigate the current threats a little bit more. But affordability and interoperability are huge for NATO. It is not coincidental that one of the biggest and most active programs in NATO S&T is modeling and simulation, because that is something that all nations can contribute to. Then finally the things like synthetic biology and quantum sciences we are all going to do. Maybe I have some Pollyanna in me, but I do not see a whole lot of difference with the exception of the front-end platforms to protect national security.
Q. You've expressed an openness to having the US buy foreign technology. How do you envision that working, because foreign industry has complained the US isn't open to that?
A. There are two answers. Let me take them in relative order of maturity. For completed, developed design systems, we are recognizing that if we can buy someone else's product — Iron Dome would come to mind for Israel, and we are looking very hard at an augment to Hellfire that is a British-made product — we can save the non-recurring engineering costs for these systems. Typically, [we would] set up some manufacturing capacity in the US so that it is not a question of jobs, but we want the best possible technology and systems for the money.
The more long-term lucrative process is what we are doing with some of our science and technology collaboration. So in the technical cooperation program, which is a Five Eyes arrangement — US, UK, Australia, New Zealand and Canada — we have actually come up with a phrase, "enhanced mutual reliance." What that means is that we try to look at a problem as it is going into late-scale development prototype and decide which nation is going to take the lead in a particular effort. So if we get there early in the design phase, we might say, "US, you take the lead in this particular technology development, Australia you take the lead in this technology development," and then as long as the interfaces are done correctly, we can bring them together.
You are going to see more of that in the future because we have to fight and we have to deploy as partners. If I bring some money and the other nation brings some money, we figure out how to spend it best together. I think that is the model we are going to in the future, especially as technology becomes globalized. The real cost frequently in technology development is the non-recurring engineering up front. So if we can spread and distribute that load so that we all end up with much less technical risk when we go to buy, it becomes a good deal for the taxpayer as well as allowing us to get the products quicker.
Q. How do you work around the security concerns of working with multiple nations on R&D programs?
A. Well, you have to start with ITAR [the International Traffic in Arms Regulations], but we do have different levels of collaborative sharing with different nations. For instance, we can work at very highly classified levels with the Five Eyes nations, and there is a lot of data sharing at fairly highly classified levels. We are not going to work with all countries at that level, and there are certain places because of ITAR restrictions we cannot go, but there are an awful lot of places that we can go.
Q. Does that drive you toward more bilateral agreements versus multinational agreements?
A. I think a little bit of both. We are going to be working in some trilats [trilateral agreements], but we have very extensive bilats with UK, Canada, Australia, India, Israel and Singapore. All totaled, we have over 1,600 technology exchange agreements in the department — project arrangements or information exchange agreements. We have a sizeable footprint right now, we rely very heavily on other nations, and we should. If you look at Afghanistan, at one point in time, we had over 40 nations there. If a nation is good enough to come to war with us, they ought to be good enough to share technology with.
Q. The new US defense guidelines with Japan include a section on R&D work. What might that look like?
A. I think you will see a much larger R&D exchange program with Japan. We are also looking at going trilaterally with Japan and Australia following the trilateral defense agreement. The president signed a mutual defense agreement with Australia and Japan. We are going to look and see if there are some areas that would make sense to work together — robotics, power and energy, data processing, some of these things Japan and Australia are very, very good at. My goal is to find areas where we can have mutual benefit from all three nations.
Q. Is there a way to get industry to be more involved in the R&D programs and take on some of that risk?
A. At the end of the day, industry works for an incentive, which is profit. The best way to get industry more engaged is by outreach — letting them know more clearly what IRAD [internal R&D] we need. Now, we cannot direct IRAD, nor should we, but we can do a better job letting industry know what we are interested in buying. In fact, that is the whole point in [acquisitions chief Frank] Kendall's Better Buying Power [BBP] 3.0 of enhancing IRAD.
Q. Under BBP 3.0, there is a requirement for industry to get signoff on IRAD programs for them to be allowable costs. How will that work?
A. They have to find some government sponsor who will attest to that the IRAD is consistent with department goals. Once you do that, and then when this industry writes a short report of what happened with the IRAD, that is an allowable cost. Without coming to the government, we are not going to allow those costs. It is really a very low bar. It is just finding someone who cares. You know, it is a vast acquisition enterprise, over 150,000 people. If in 150,000 people you cannot find someone who says "I care about that particular work," something is probably wrong. Industry can still do it if they think it is going to give them a competitive advantage, but we, the taxpayers, should not pay for stuff that we do not want. It is very simple.
Q. What has industry's reaction been?
A. It will cause some friction, and we have already gotten some industrial people pushing back on it. It is a change, and change scares people. But from my perspective, it is only a minor change. For their significant IRAD investments, industrial CTOs [chief technology officers] would come to me anyways or come to one of the service CTOs and say, "I am thinking about doing XYZ, what do you think?' We pay $4.5-$5 billion for allowable IRAD costs each year. That is a pretty good chunk of change for industry, and we just want to make sure there is some accountability for what is being paid.
Q. Have you seen the budget situation influence industry to be more open to new ideas about R&D spending?
A. I have not seen that yet. I have not seen industry change their behavior except for cashing out, buying back their stock, and trying to position themselves for a future competitive edge. I really have not seen what I would call positive behavior out of industry based on the sequester. Now, industry would probably tell you they have not seen positive behavior out of government, and the truth is probably somewhere in between. We are still going to have to struggle with this over the next couple of years because I see very little hope that the sequester is going to go away.
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.