New Ways of Doing Business

New Ways of Doing Business

The world today is markedly different from what it was during the Cold War. This new environment calls for new ways of conducting the business of defense. The Administration's initiatives in acquisition reform, dual-use technologies, and Advanced Concept Technology Demonstrations characterize our determined response to today's challenges. Sustained and effectively implemented, these new approaches will help get the highest return on defense investments in the future.

Defense Acquisition Reform

In October 1993, President Clinton signed into law the Federal Acquisition Streamlining Act of 1994, legislation that fundamentally reforms Federal procurement. The act provides for three key statutory changes. Most important, it makes it easier for the Defense Department (and other Federal agencies) to buy commercial components, products, and services. Second, it streamlines contracting procedures for small purchases. And third, it authorizes the Defense Department to undertake five pilot programs to test innovative approaches to acquiring commercially derived jet aircraft, aircraft engines, and other items.

The Defense Department is firmly committed to improving the defense acquisition processes to help improve long-term military readiness. Building on a February 1994 paper entitled Acquisition Reform: A Mandate for Change which provided the conceptual foundation for acquisition reform, the Defense Department has developed a strategic plan to ensure that reform measures are institutionalized and to create an environment for continuous improvement that will last well into the future.

In June 1994, Defense Secretary William J. Perry announced a reversal of the Pentagon's longstanding policy toward military specifications-"milspecs," the 31,000 specifications and standards that prescribe how military items are to be made and tested, down to the most minute detail. Secretary Perry instructed the military services to use commercial (or performance-based) specifications and standards in lieu of milspecs "unless no practical alternative exists." This decision has already dramatically reduced the number of milspecs for dozens of weapon systems. The required milspecs for the Air Force's Space Based Infrared System dropped from 150 to two; the Navy's SLAM missile, from 104 to six; the Army's BCIS Phase 1 antifratricide digital system, from 467 to 194.

Together, the statutory reforms embodied in the Federal Acquisition Streamlining Act and the administrative reforms such as the milspec policy enable the Pentagon to take full advantage of the inventiveness and efficiency of today's dynamic commercial market. And by simplifying acquisition processes of direct concern to Department of Defense S&T program managers and scientists, they greatly improve the efficiency of the Defense Department science and technology program.

Dual-Use Technologies

Over the last 30 years, barriers were gradually created between the defense and civilian industrial sectors as special defense requirements and business practices increasingly segregated the defense sector of the industrial base. Our dual-use technology policy reflects the recognition that our nation can no longer afford to maintain two distinct industrial bases. Our goal is to move toward a cutting-edge national technology and industrial base that will serve military as well as commercial needs. This dual-use technology strategy will allow the armed forces to exploit the rapid rate of innovation and market-driven efficiencies of commercial industry to meet defense needs. By drawing on commercial technology and capabilities wherever possible-along with the superior systems design and integration skills of U.S. prime contractors-the Defense Department can do its job more effectively and at lower cost. Conversely, the innovation and accomplishments that originate in defense programs and laboratories will move rapidly to the commercial sector.

"Dual use" goes beyond simply incorporating commercial off-the-shelf parts and equipment in military systems. It involves a fundamental shift toward technology that satisfies both civil and military needs-for lower costs and higher quality, as well as increased performance. We are working toward a future in which weapon systems are designed to use state-of-the-art commercial parts and subsystems and are built in integrated facilities. Of course, commercial technology will not meet every military need. But in a great many cases it will, and it will do so less expensively. Moreover, as flexible manufacturing systems are developed and more widely adopted, it will be increasingly possible to produce in a single plant both low-volume military equipment and similar high-volume commercial equipment.

By using components, subsystems, and technologies developed by commercial industry in our military systems wherever possible, we hope to attain three compatible objectives:

We must also direct R&D toward the manufacturing infrastructure that enables our dual-use technology initiatives. (A leading example is advanced metal matrix composites, which have numerous end item applications-both military and civilian-including missiles, defense vehicles, and automobiles.) Such manufacturing process technologies make our domestic commercial and defense industrial infrastructure more competitive and lessen our dependence on foreign sources for critical subtier items.

Our dual-use approach to technology development is supported by the Technology Reinvestment Project (TRP), unveiled by President Clinton in March 1993 (see "Technology Reinvestment Project"). The TRP employs mechanisms to encourage commercial companies to provide the Department of Defense early access to dual-use technology development. The TRP's customer is the Pentagon, which awards funds, on a cost-shared basis, to industry-led projects to create new dual-use technologies that address clear defense needs, both by providing new products and processes and by fostering affordability. Typical TRP projects include technologies to provide for affordable night-vision capability; to improve battlefield casualty treatment; and to make affordable the Army's technically superior but high-cost system for locating combat units on the battlefield in real time. By taking advantage of the potential for a commercial market, these projects offer the prospect of technology with improved performance at lower cost.

Advanced Concept Technology Demonstrations

The Advanced Concept Technology Demonstration (ACTD) program is the Administration's approach to capturing and harnessing innovation for military use rapidly and at reduced cost. ACTDs are acquisition programs designed to foster an intimate alliance directly between the operational forces and the technologists and to remove the barriers between them. Representatives of the forces, including the Joint Staff, the Joint Requirements Oversight Council, and the commanders of unified and specified commands, play a direct role in the management of the ACTDs.

ACTDs are focused on four principal objectives: (1) to gain an understanding of and to evaluate the military utility of new technology applications before committing to acquisition; (2) to develop corresponding concepts of operation and doctrine that make the best use of the new capability; (3) to provide residual operational capability to the forces; and (4) to facilitate a more informed acquisition decision.

ACTDs are not only for new technologies but also seek new ways to integrate existing technologies to make platforms more effective in battle. ACTDs typically last two to four years, and the concepts are then given to one of the military services or a defense agency for formal acquisition.

The intent of the ACTD process is to provide the user with detailed interactions very early in development as a means for a rapid and cost-effective introduction of new capabilities to operational forces. Examples of ACTDs include Unmanned Air Vehicles, Cruise Missile Defense, Mine Countermeasures, Advanced Joint Planning, and Synthetic Theater of War. Additional demonstrations are planned for Combat Identification, Navigation Warfare, Miniature Air-Launched Decoy, and others.

Technology Reinvestment Project

The mission of the Technology Reinvestment Project (TRP) is to increase the Department of Defense's access to affordable, leading-edge technology by leveraging commercial know-how, investments, and markets for military use. Advanced technology remains the linchpin of U.S. military superiority even as tight defense budgets shrink the specialized defense supplier base. Two forces are shaping the future of defense technology. First, much of the best emerging technology is now in the commercial sector. Second, as the cost of weapons becomes more crucial, commercial practices are the key to affordable defense. TRP is a forward-looking response to these new realities.

The primary focus of this project, led by the Pentagon's Advanced Research Projects Agency, is the development of dual-use technologies. Every TRP development project is selected on the basis of its technical merit and its defense relevance. TRP's ends are affordable, leading edge defense technology; leveraging commercial technology is its means. Two strategies, depending largely on the state of the military technology, are used by TRP:

  • Leveraging emerging commercial technology. Getting access to emerging commercial technology by using the commercial world's drive and ability to quickly develop and apply new technology. This begins by leveraging commercial know-how and investments and eventually drives markets to lower the price.
  • Embedding defense technology. Finding a new market for existing defense technologies that have nondefense uses, principally to lower the price. This strategy seeks commercial efficiencies in processing and production and strives to take advantage of commercial market size. It also sustains technologies that might otherwise disappear due to insufficient demand from the Department of Defense alone.

Through two competitions, TRP has funded dual-use technology effort in areas such as military mobility; battlefield casualty treatment; command, control, communications, and computers; battlefield sensors; mechanical systems; and electronics manufacturing.

In addition to this focus on technology development, TRP has also funded projects of longer term benefit to the Department of Defense. These include technology deployment; efforts to ensure that small manufacturers have the technology to remain viable for future Department of Defense acquisitions; and manufacturing education and training as well as efforts to improve undergraduate manufacturing curriculums and retrain defense workers. TRP also conducts a Small Business Innovation Research (SBIR) program linked to its technology development goals. Future competitions are expected to concentrate exclusively on technology development with SBIR.

The International Dimension

International cooperation in defense technology is an important factor in advancing our national security and foreign policy goals. International technology cooperation can enhance mutual defense capabilities through standardization and interoperability with the forces of friendly and allied countries. It can spread the burden of financing development, promote U.S. access to foreign technologies and innovations; and deepen mutual understanding. International cooperation is also a large and indispensable element of our economic security, offering global market opportunities to U.S. industry. Through broad-based international programs undertaken by the private and public sectors we seek to take advantage of the best the world has to offer.

Fundamentally, international cooperation in defense-related technology areas is conducted among private-sector companies. Mechanisms for cooperation include research and development joint ventures; contractor teaming arrangements; prime/subcontractor relationships; coproduction and technical assistance agreements; and direct sales and purchases. At the basic research level, the scientific community-both public and private-also engages in many forms of international cooperation and collaboration, including laboratory-to-laboratory projects; exchange programs; university fellowships and visiting professorships; field research; networking; and participation in a wide range of international forums for the exchange of scientific knowledge.

Despite its many benefits, however, international cooperation in defense technology also presents risks. This Administration is committed to striking a balance between sharing our technology and protecting it so that the benefits continue to outweigh these risks. For the many cooperative activities conducted under the auspices of government-to-government agreements, the agreements themselves explicitly address national security and industrial base concerns, such as technology transfer and retransfer rules, data rights, and procedures for the handling of classified information. For private-sector ventures involving munitions, certain dual-use goods, and technical data, export licensing regulations are used to protect our national security interests. To preserve the competitive posture of American manufacturers in an environment in which other nations are often inclined to exercise less stringent controls on technology transfer, we seek multilateral export control approaches where possible.

There are transactions in three areas of global trade and technology transfer that are occurring with increasing frequency and that have the potential for broad national security or economic impact. Sales and contracts with foreign buyers imposing conditions leading to technology transfer, joint ventures with foreign partners involving technology sharing and next-generation development, and foreign investments in U.S. industry that create technology transfer opportunities may raise either economic or national security concerns that can temper the benefit we perceive as a nation.

We will continue to encourage international cooperation in defense technology because the payoff can be great. But we will also continue to expect our international partners to provide protections and assurances comparable to our own in sensitive areas. And we will continue to strike a judicious balance between risks and benefits to ensure that all our international science and technology cooperation activities make positive contributions to our national security and economic well-being.

National Security Science & Technology Strategy -Table of Contents

President's Letter

Executive Summary

National Security Science & Technology Strategy - Introduction

Maintaining Military Advantage Through Science & Technology Investment

Carrying Out the Defense S&T Mission

New Ways of Doing Business

Controlling Arms & Stemming the Proliferation of Weapons of Mass Destruction

The Role of S&T

Meeting the Challenge of Global Threats

Policy Response

Strengthening Economic Security



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