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SEC. 872. ESTABLISHMENT OF
MISSION-ORIENTED PILOT PROGRAMS TO CLOSE SIGNIFICANT
CAPABILITIES GAPS. (a) In
General.--The Secretary of Defense shall establish, within the
Strategic Capabilities Office of the Office of the Secretary of
Defense, not fewer than two mission-oriented integration pilot
programs with the objective of closing significant capabilities
gaps by developing and implementing capabilities and by
synchronizing and integrating missions across covered Armed
Forces and Defense Agencies.
(b) Elements.--The pilot programs
established under subsection (a) shall--
(1) seek to address specific
outstanding operational challenges of high importance to the
operational plans of the United States Indo-Pacific Command
and the United States European Command;
(2) be designed to leverage industry
cost sharing by using sources such as private equity and
venture capital funding to develop technologies and overall
capabilities that resolve significant capability gaps for
delivery to the Department of Defense, as a product or as a
service;
(3) not later than three years after
the date on which the pilot program commences, demonstrate the
efficacy of the solutions being developed under the pilot
program;
(4) deliver an operational capability
not later than five years after the pilot program commences;
(5) provide an operationally relevant
solution for--
(A)(i) maintaining resilient
aircraft operations in and around Guam in the face of
evolving regional threats, including large salvo supersonic
and hypersonic missile threats; or
(ii) an operational challenge of
similar strategic importance and relevance to the
responsibilities and plans of the United States
Indo-Pacific Command or the United States European
Command; and
(B)(i) providing a resilient
logistic and resupply capability in the face of evolving
regional threats, including operations within an
anti-access-area denial environment; or
(ii) an operational challenge of
similar strategic importance and relevance to the
responsibilities and plans of the United States
Indo-Pacific Command; and
(6) incorporate--
(A) existing and planned Department of
Defense systems and capabilities to achieve mission
objectives; and
(B) to the extent practicable,
technologies that have military applications and the potential
for nonmilitary applications.
(c) Role of Strategic Capabilities
Office.--
(1) In general.--With respect to the
pilot programs established under subsection (a), the Director
of the Strategic Capabilities Office, in consultation with the
Under Secretary of Defense for Research and Engineering,
shall--
(A) assign mission managers or
program managers--
(i) to coordinate and collaborate
with entities awarded contracts or agreements under the
pilot program, parties to cost sharing agreements for such
awarded contracts or agreements, combatant commands, and
military departments to define mission requirements and
solutions; and
(ii) to coordinate and monitor
pilot program implementation;
(B) provide technical assistance for
pilot program activities, including developing and
implementing metrics, which shall be used--
(i) to assess each operational
challenge such pilot programs are addressing; and
(ii) to characterize the
resilience of solutions being developed under the pilot
programs to known threats and single points of failure;
(C) provide operational use case
expertise to the entities awarded contracts or agreements
under the pilot program and parties to cost sharing
agreements for such awarded contracts or agreements;
(D) serve as the liaison between the
Armed Forces, the combatant commanders, and the participants
in the pilot programs; and
(E) use flexible acquisition
practices and authorities, including--
(i) the authorities under section
2371 and 2371b of title 10, United States Code;
(ii) payments for demonstrated
progress;
(iii) authorities under the
Defense Production Act of 1950 (50 U.S.C. 4501 et seq.);
and
(iv) other acquisition practices
that support efficient and effective access to emerging
technologies and capabilities, including technologies and
capabilities from companies funded with private
investment.
(2) Reports to congress.--Not later
than 180 days after the date of the enactment of this Act, and
every 180 days thereafter, the Director of the Strategic
Capabilities Office shall submit to the congressional defense
committees a report on the pilot programs.
(d) Additional Authorities.--The
Secretary of Defense shall assess authorities required for such
mission managers and program managers to effectively and
efficiently fulfill their responsibilities under the pilot
programs, including the delegation of personnel hiring and
contracting authorities.
(e) Data.--The Secretary of Defense
shall establish mechanisms to collect and analyze data on the
implementation of the pilot programs for the purposes of--
(1) developing and sharing best
practices for achieving goals established for the pilot
programs; and
(2) providing information to the
Secretary and the congressional defense committees on--
(A) the implementation of the pilot
programs; and
(B) related policy issues.
(f) Recommendations.--Not later than two
years after the date of the enactment of this Act, the Secretary
of Defense shall submit to the congressional defense committees
a recommendation with respect to continuing or expanding the
pilot program.
(g) Transition of Pilot Program
Responsibilities.--Beginning in fiscal year 2025, the Secretary
may transition the responsibility for the pilot programs to
another organization.
(h) Definitions.--In this section:
(1) Covered armed force.--The term
``covered Armed Force'' means--
(A) the Army;
(B) the Navy;
(C) the Air Force;
(D) the Marine Corps; or
(E) the Space Force.
(2) Defense agency.--The term
``Defense Agency'' has the meaning given such term in section
101(a) of title 10, United States Code.
(3) Mission manager.--The term
``mission manager'' means an individual that, with respect to
a mission under a pilot program established under subsection
(a), shall have the responsibilities described in
subparagraphs (B) through (F) of section 871(c)(2) of this
Act.
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Establishment of mission-oriented pilot
programs to close significant capabilities gaps (sec. 872)
The Senate amendment contained a provision
(sec. 1281) that would establish a pilot program to close
significant capability gaps in high-priority theaters by
leveraging private
investment resources such as equity and venture capital funding,
with a focus on integration challenges in existing platforms and
capabilities.
The House bill contained no similar
provision.
The agreement includes the Senate
provision with a clarifying amendment.
The provision directs the Strategic
Capabilities Office (SCO) to orient the pilot program around
broad missions or operational challenges, such as maintaining
the ability to conduct air operations from Guam or to conduct
joint logistics and resupply missions, all amid rapidly
worsening threats.
However, the provision also provides the
SCO the ability to choose other similarly scoped operational
challenges. The provision directs that the pilot must be built
to leverage capabilities developed with funding sourced from
private investment resources, such as equity or venture capital,
and such capabilities should be used to integrate existing
Department of Defense platforms and capabilities. Under the
pilot, proof of efficacy must be demonstrated within 3 years
such that an operational capability can be delivered within 5
years.
We strongly believe that solving
numerous high-priority operational challenges in a relevant time
period will require much more focus on integration of existing
capabilities. The provision directs the SCO to establish
coordination mechanisms between stakeholders, develop metrics to
assess pilot program progress, and frequently report to the
Congress to inform a planned discussion about whether to
continue or expand the program.
We further note that the lessons learned
from this pilot will provide valuable information for
consideration by the members of the Planning, Programming,
Budgeting and Execution
Commission established elsewhere in this Act as they consider
new ways of budgeting and iteratively developing, testing, and
fielding capabilities to meet operational challenges
inadequately addressed by existing processes. The pilot should
be structured to accommodate and balance risks and rewards for
both the Government and the private sector. The private sector
investors and performers would assume the risk of up-front
investment in capability development and realizing substantial
profit by solving hard problems at far less expense than the
Government could achieve by traditional program management
processes. The Government could appropriately mitigate that risk
through, for example, milestone payments for achieving agreed
upon performance objectives and otherwise allowing the private
sector participants to manage the capability development. The
Government could also use existing statutory authorities for
guaranteed purchases, as was accomplished in response to the
COVID-19 crisis. The Government would mitigate risk by
disbursing funds only for successful results.
We note that the SCO, in managing this
pilot, would have to function as a “mission manager” discussed
and authorized elsewhere in this Act to integrate any
commercially provided mission capabilities with existing
programs, systems, capabilities, and processes necessary to
implement mission solutions.
S. 2792--Senate Report117-39
Establishment of
mission-oriented pilot programs to close significant
capabilities gaps (sec. 1281)
The committee recommends a provision that would require the
Secretary of Defense to establish, within the Strategic
Capabilities Office, mission integration pilot programs with the
objective of closing significant capabilities gaps by
synchronizing and integrating missions across services and Field
agencies. The pilot programs would be aligned to high importance
operational challenges for U.S. European Command and U.S.
Indo-Pacific Command and would be designed to leverage industry
cost sharing, including private equity and venture capital, to
develop underlying technology and overall capability for
delivery to the joint force within 5 years. The provision would
require the head of the Strategic Capabilities Office to provide
reports every 180 days, beginning 10 days after the date of the
enactment of this Act, to the congressional defense committees
on the pilot programs. Finally, the provision would require the
Secretary of Defense to submit a recommendation to the
congressional defense committees with respect to continuing or
expanding the pilot program not later than 2 years after the
date of the enactment of this Act and would allow the Secretary
to transition responsibility for the pilot programs to another
organization beginning in fiscal year 2025. |
