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Happy Spring! This week's newsletter hits a few themes, notably the FY2024 budget and funding for tech startups.
This week, DoD officials testified before Congress about various budget requests. The need to restore munitions supplies continues to be a hot topic.
- As our top story points out, the DoD's FY2024 budget request offers a few solutions. One is a new contract and financing pilot called Large Lot Procurement (LLP), an expansion of the much-touted Multiyear Procurement (MYP) strategy.
- The budget document explains, "savings generated by the use of Economic Order Quantities (EOQ) financing are used to procure additional quantities of munitions in a “Buy-to-Budget” contract strategy."
Several other voices add recommendations to this conversation: both Cynthia Cook and Jerry McGinn offer analysis and suggestions on how to increase industrial capacity.
The collapse of Silicon Valley Bank created a flurry of activity within DoD, notably at Defense Innovation Unit, about how to step in, if necessary, to provide financial support for startup tech companies working on defense-relevant technologies. As the FCW article points out, SVB plays a critical funding role that DoD needs to support within the innovation ecosystem.
- Meanwhile, the new Office of Strategic Capital, charged with a similar task, is moving out by partnering with the Small Business Administration to guarantee loans to innovative companies investing in technologies.
Marines are launching their own software development factory this summer in Austin, Texas, co-located with the Army's development effort. This launch implements the requirement that each service have its own software factory.
Two new policy documents came out recently: the biomanufacturing strategy and an updated strategic management plan for 2022-2026.
In NPS news, we've got an exciting update on recent facility upgrades enabling both supersonic testing and hypersonic research. Plus an update on the latest JIFX and student research on digital twins in the Navy.
And of course, what would a spring newsletter be without a reminder to join us in Monterey for the 20th Annual Acquisition Research Symposium? One of our keynote speakers, Nick Guertin, recently testified at his second nomination hearing for the position of Assistant Secretary of the Navy for Research, Development, and Acquisition. Currently the Director, Operational Test and Evaluation, Guertin connects the two worlds of engineering and acquisition. We know he'll bring some great insights to the symposium conversation!
Finally, our "One more thing" offering this week is a charming segment with Rear Admiral Grace Hopper on the David Letterman show. Hopper is famous for many things, but you probably know her best for her warning against the dangerous attitude of "we've always done it that way." Learn more about the woman behind this quote.
20th Annual Acquisition Research Symposium
10-11 May 2023
Monterey, CA
Join us in Monterey for the 20th Annual Acquisition Research Symposium. The program is now posted online. One of compelling in-person only panels is Panel #4: Leveraging Digital Engineering in Acquisition, chaired by Dennis K. McBride, Director, Acquisition Innovation Research Center (AIRC).
This Week's Top Story
‘Up our game’: The Pentagon’s 3 strategies to shore up munitions stockpiles
Ashley Roque, Breaking Defense
With demand for munitions in Ukraine only increasing and NATO members expressing fears about their own stockpile levels, Pentagon planners last week laid out a three-pronged approach to keeping US munition stocks at acceptable levels.
Now defense officials just have to get industry to trust them.
The three steps, revealed as part of the fiscal 2024 budget rollout and in subsequent statements by officials, are a mix of classic concepts and new ideas. On the classic side, it features a major push for multi-year munitions buys, which lock in guaranteed procurements instead of going year-by-year. On the new ideas side, the Pentagon is exploring a pilot project for larger-lot procurement, as well as a new “Joint Production Accelerator Cell” to understand and head off industry challenges.
The overall effort is a direct result of what has happened in the last year in Ukraine, with Pentagon Comptroller Michael McCord saying on March 13 that “Ukraine has really informed and highlighted the need to up our game here.” At the same time, the weapon systems lined up for multi-year buys are “not the kind of missiles that are key to the Ukraine fight: These are key to Indo-Pacific deterrence,” he later added. “What we’re trying to do here… is to think about lessons that we’re learning today and apply them to the future, apply them to other scenarios.”
But while munitions are a hot topic right now, industry officials have been burned before by the Pentagon raising munitions levels and then dropping them shortly after, which would leave companies who invest in increasing production holding the bag for new overhead costs.
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