The war in Ukraine is a different kind of war. The size of the theater, number of troops and technologies used in the conflict are markedly different from conflicts in Iraq and Afghanistan.
Ukraine is a true “dual-use” technologies war; commercial products are widely used by both sides. Consumer drones are detecting and tracking unit movements, internet satellite maps are used for planning operational maneuvers and commercial satellites are providing internet/communication services.
The scale at which “dual-use” technologies is used should make us urgently rethink the way the Department of Defense does business. We need to speed up the acquisition process and allow for new technologies to be rapidly developed, deployed and scaled.
Problems with the defense-industrial base
Early in the war, it became obvious that consumption of ammunition, artillery, and missiles was exponentially higher than what Ukraine and the United States were prepared for.
A top Ukrainian military official was quoted as saying the country is firing between 5,000 to 6,000 shells per day; Russian expenditures are even higher.
Meanwhile, the annual U.S. production of 155mm artillery shells is approximately 80,000 shells, or enough for two weeks of fighting. The Wall Street Journal quoted a U.S. defense official as saying the U.S. inventory of artillery shells is “uncomfortably low.”
Artillery shells are not the only problem. Forbes noted there are reports Ukraine used 300 Javelins in the first week of the war; annual U.S. production is 2,100 missiles or enough for seven weeks of fighting.
In 2018, the Department of Defense hinted at such problems in a report on the state of the nation’s defense-industrial base.
The negative effects of sequestration and the budget caps shocked the market and accelerated the downward trend in vendor counts, resulting in an estimated 20% decline in the number of prime vendors,” the report found. “Upgrading the capacity of the industrial base would fix the problem in the short term, but in the long run the problem would remain. Once defense expenditures decline, manufacturing capacity will follow. It is not prudent to have an industrial base that is in a constant state of tension, either facing a rapid need to scale up or a rapid need to downsize.
The long-term solution to the problem is to change the procurement process. Specifically, we need to speed up the process, encourage creative solutions and reward innovation.
Today, the DoD’s acquisition process is driven by a checklist of detailed requirements.
Instead of checklists, the acquisition process should define: capability, key performance requirements, operators, and quantities required.
For example, a man-portable anti-tank system must penetrate a Russian T-90 tank, have a range of 5 km. It will be used by front line troops, and initially 2,000 units are needed.
Second, to encourage innovation, the Pentagon should approach every new product development as a blank slate. Third, the prototype demonstration should be scheduled 12 to 18 months from the project initiation date, and fourth, all submitted prototypes should be performance tested and evaluated on a cost-benefit basis.
Finally, the DoD should purchase the initial quantities from the “winner.” Perhaps counterintuitively, the Pentagon should avoid awarding research and development contracts or grants and only start sharing lessons learned once the product is in field trials.
Pentagon development grants would most likely end up going to companies that specialize in attracting them, meaning current suppliers would outmaneuver newcomers. We want companies to compete on their product development competencies and not on their ability to manage the procurement process.
This loosely defined and streamlined process will allow for the industry to develop creative “dual-use” solutions. For example, the next anti-tank weapon might not be a shoulder-launched missile, but might instead be a commercial drone or a directed-energy weapon. It is also highly likely that next system might be developed by a start-up or a non-defense company.
Compressed timelines should favor products and production processes that can scale quickly, resolving the long-term problem of having enough on-line capacity should a need arise. Guaranteed purchase orders should make DoD projects financially attractive to investors. Finally, having a blank slate would solve the “better horse” problem, where new products only offer incremental improvements.
Mislav Tolusic is managing partner at Marlinspike Partners, a venture capital firm investing in companies focused on U.S. national security and commercial work.