WASHINGTON — The White House wants the Pentagon to emphasize technology developments with both military and civil uses in its next budget, according to a new guidance from the Office of Management and Budget.

In a memo released Thursday, OMB head Mick Mulvaney and Michael Kratsios, deputy assistant to the president in the office of science and technology policy, laid out marching orders to government agencies for what fiscal 2019 research and development budgets should look like.

For defense, that means balancing military needs with a focus on technology that could find uses in a different context – while looking to trim costs for programs that may no longer be feasible.

“While military R&D should serve the national defense first and foremost, the Administration recognizes the contributions of military R&D to the development of tremendously useful civil applications,” Mulvaney and Kratsios write. “Accordingly, we encourage programs with dual-use potential to be leveraged for Federal non-military advancements.”

Click here to read the OMB memo

A similar push is evident in a section focused on homeland security needs, which emphasizes that “Special attention should be paid to R&D that can support the safe and secure integration into society of new technologies that have the potential to contribute significantly to American economic and technological leadership.”

However, the defense department should still spend R&D in a way that will “support the military of the future,” with an emphasis on a collection of technologies that lines up nicely with the so-called “Third Offset” technology push stewarded by former Deputy Secretary of Defense Bob Work.

Tech areas highlighted in the memo include “the development of missile defense capabilities, a modern strategic deterrent, hypersonic weapons and defenses, autonomous and space-based systems, trusted microelectronics, and future computing capabilities,” the guidance reads.

In terms of security, the memo calls out the need to protect critical infrastructure and develop new technologies for border security, a key Trump administration priority.

Mulvaney, a noted budget hawk from his time in Congress, also used the memo to tell departments to trim costly projects which may never yield results.

In the only bolded text of the memo, Mulvaney and Kratsios say “When considering new research programs, agencies should ensure that the proposed programs are based on sound science, do not duplicate existing R&D efforts, and have the potential to contribute to the public good.

“Agencies should also identify existing R&D programs that could progress more efficiently through private sector R&D, and consider their modification or elimination where Federal involvement is no longer needed or appropriate. To the extent possible, quantitative metrics to evaluate R&D outcomes should be developed and utilized for all Federal R&D programs.”

That melds in with the next bullet point in the memo – that agencies should “give priority to funding basic and early-stage applied research” which features greater uncertainty and hence will not attract private sector funding.

Taken together, the memo emphasizes that the government should be spending its R&D money in areas that the private sector will not, and look to cut funding for programs where the private sector is willing to invest.

That is likely good news for the Pentagon’s Defense Innovation Unit-Experimental (DIUx) group, which has the lead role in interacting with the commercial sector and bringing those technologies back into the department. That group recently received new authorities that should allow it to get commercial firms on contract more quickly.

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.

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