Continued Efforts Required to Entice Novel Defense Industry Partners according to MITRE
Small and medium businesses continue to harbor skepticism regarding defense contracts, despite years of initiatives and legislation aimed at facilitating access and breaking down barriers for new entrants. However, this perception is gradually shifting, according to a recent industry survey conducted by MITRE.
Keoki Jackson, Senior Vice President and General Manager of MITRE's national security sector, believes that substantial efforts are still required to persuade newcomers that defense work offers worthwhile benefits. In an interview with Air & Space Forces Magazine, Jackson stated that this is the first time the research organization has surveyed the defense industry on acquisition-related matters.
MITRE asked over a thousand acquisition professionals from government agencies, industry, and other stakeholders a series of questions to assess their beliefs about the ease of collaborating with the government and the obstacles hindering innovation from reaching end-users.
The survey's most unexpected finding, according to Jackson, is the substantial disparity in viewpoints held by small and medium businesses, or non-traditional suppliers, versus those of other respondents. While almost 80% of large contractors, federal workers, and other stakeholders feel that barriers are diminishing, accelerating acquisition, and enhancing effectiveness, only one-third of small and medium businesses share this sentiment.
This divergence in perspective itself acts as a deterrent for new entrants wishing to enter the defense acquisition ecosystem, Jackson observes.
Half of the survey respondents cited the inflexibility and complexity of acquisition as the biggest impediment to joining the defense market. About one-third mentioned cost-type contracts, which do not compel companies to adhere to a specific product price, and another third emphasized supply chain reliability as a significant concern.
Jackson explains that the focus on cost-type contracts primarily stems from their complexity, which complicates accounting. He advocates for starting the system improvement process by making it less complicated and better understood.
When asked what would enhance the speed, responsiveness, and efficiency of defense contracting, the top responses included reducing bureaucracy, adopting modern digital technologies, and streamlining approval layers and simplifying procedures.
Last year, a comprehensive report from the bipartisan Commission on Planning, Programming, Budgeting, and Execution provided 28 major recommendations for quicker and more efficient reforms in defense acquisition. Jackson anticipates that these suggestions, alongside others still in development on Capitol Hill and within the Trump administration, will yield tangible impacts.
These changes primarily concern simplification of the acquisition regulations at the federal level. Furthermore, Jackson believes that addressing smaller-scale issues, such as holding people at lower levels accountable for a program's progress, will be highly beneficial.
Acquisition professionals also expressed a desire for artificial intelligence and automation to boost their efficiency, as well as the increased sharing of data through the wider adoption of digital contracting.
Jackson remarked that the survey's favorite quote was "Get rid of all the endless, useless crap," reflecting the desire for more streamlined processes in defense acquisition. In launching the survey, MITRE hoped to capitalize on Washington's interest in defense acquisition reform.
Moreover, MITRE aimed to assess the effectiveness of the "adaptive acquisition framework" it had helped develop, five years after its implementation. The framework introduced new pathways aimed at streamlining purchases in areas such as services and software and increasing the use of non-traditional acquisition authorities.
According to Jackson, the framework is in the "toddler stage" and has experienced growth in popularity over the past year. The number of software programs using the framework, for instance, has risen from approximately 50 to over 80 in the past year, while the number of programs employing middle-tier acquisition authorities for rapid prototyping has increased from about 35 in 2019 to over 100.
Nevertheless, Jackson cautions that, in 2023, only a small portion (approximately $16 billion) of the total defense contract spending ($430 billion) was channeled through other transaction authorities, indicating ample potential for growth in this area.
In conclusion, small and medium businesses face variety of challenges in entering the defense market, including cumbersome bureaucracy, complex contracting requirements, a lack of confidence in the process, and the urgent need for modernization to create an inviting and efficient environment for new entrants. Positive changes are being made, with focus on simplifying regulations, reducing bureaucracy, and adopting digital technologies. However, substantial work remains to be done, particularly in addressing negative perceptions and encouraging risk-taking among less-experienced acquisition professionals.
The defense industry's focus on cost-type contracts, despite their complexity, hinders small and medium businesses from entering the market, as acknowledged by Keoki Jackson, Senior Vice President of MITRE's national security sector. Moreover, the perceived inflexibility and complexity of acquisition procedures, as well as supply chain reliability concerns, are major obstacles for these businesses.
The survey conducted by MITRE revealed that small and medium businesses value modern digital technologies and the streamlining of approval layers and procedures to increase the speed, responsiveness, and efficiency of defense contracting. However, addressing these issues and altering negative perceptions will require substantial efforts to persuade these businesses that defense work offers beneficial opportunities.
