Part 4: Other Transactions, Dual-Use and the Technology Reinvestment Project (TRP)

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How the opportunity to save Billions of dollars is being squandered 

As mentioned in Part 3 of this series Congress presented DOD, which handed the task to the Defense Advanced Research Project Agency (DARPA), a series of programs and what amounted to a very substantial increase in DARPA’s budget. Some of the programs seemed more relevant to civilian agencies than to DOD. DARPA leadership considered whether to farm out management of the programs and money to other defense and non-defense agencies or if Congress intended these dual-use programs to be executed by DOD. Eventually DARPA decided to retain overall direction but recruited a managing council of senior government officials from other agencies as well as working level help from those agencies to execute these programs.

The legislative basis for the policy and programs of what DARPA designated the Technology Reinvestment Project (TRP) still exist in Chapter 148, title 10, U.S. Code. Key policies including a military-civil integration policy currently exist in section 2501 of title 10. A key program of the TRP also still exists in law at section 2511. DOD routinely ignores both the policy and the program.

The principle elements of section 2511 were: multi-party agreements, cost-sharing, with OTs authorized but not required as the funding instrument. These were section 2371 agreements since section 845/2371b had not then been enacted. This approach encouraged partnering between defense and commercial companies as well as an indication of commitment to commercialize the outcome of the project if successful. The private sector proposers submitted their ideas based on the government’s broad description of its problem areas and potential needs. In a ‘partnership’ between defense contractors and commercial firms the defense contractor might bring its insights on defense relevance while the commercial firm could assess market potential of both defense and non-defense character. The multi-party team might include all elements needed to move a project from concept, to proof of principle, to demonstration and prototyping or any combination of those steps.

To recount all the successes of the TRP would take a large volume. There actually is one. It is The Technology Reinvestment Project – Dual-Use Technology for Stronger Defense (1995). The Under Secretary of Defense (AT&L), Dr. Paul Kaminski, provided insights for that volume:

Today, the Department of Defense not only has to ensure the capability of meeting a diverse range of threats, it has to do it in an economically challenging environment. What has not changed is the value of this country’s industrial base and technology capability to national security.

DARPA…has been charged with the responsibility of meeting the national security technology requirements within constrained economic resources…

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DARPA chose to utilize an unconventional strategy for this mission and called it the Technology Reinvestment Project (TRP). There are some unique characteristics of the TRP that separate it from other technology development programs [partnerships, cost-sharing, contracting authority outside FAR].

The statute underlying the TRP was enacted in October 1992. Basic TRP strategy was formulated in Winter 1992/1993. The FY 1993 competition was announced in March 1993. Award selections were announced on February 1994. Please note this was something entirely new. A nation-wide road show introducing the program took place. Eight separate programs with different selection criteria were involved. A large number of DOD and non-DOD subject matter experts had to be assembled to review the solicitation and then proposals that were submitted. Negotiations of multi-party agreements of a new kind had to take place. Compare the time involved in this complicated process to the acquisition lead time for a standard large DOD program which is often much longer.

In the first two years of TRP one hundred eighty-four project awards were made in the technology development and technology deployment categories. These obligated $762 million in government funds and leveraged over $1 billion in private funding.

In addition to the publication cited above two others that documented the success of TRP under DARPA management were Acquiring Research by Nontraditional Means (GAO/NSIAD-96-11) which reviewed both TRP and non-TRP projects; and, Dual-Use Research Project (PIPS-96-3). The latter report by a Potomac Institute for Policy Studies military-industry panel chaired by former Marine Commandant Al Gray recommended dual-use as DOD’s default position for research and technology development based on the TRP experience.

Management of the TRP shifted from DARPA to the Office of Secretary of Defense (OSD) where it was designated the Dual-Use Applications Program (DUAP). After continued success the concept was distributed to the military services in order to institutionalize it. Without central management and without dedicated funding DUAP and its off-spring COSSI eventually fell into disuse. Business as usual took hold and the advantages of TRP and COSSI were lost. A short description of the COSSI program is available on this website Solving the Obsolete Spare Parts Problem. The bottom line for that program was that $100 million spent on R&D resulted in $3 Billion of O&M funding saved!

With 2371 cost-sharing fading into oblivion some bright mind decided prototype projects should be cost-shared if no commercial firm was involved. This approach makes little sense. The 2001 NDAA imposed such a requirement while also permitting award to defense firms without non-traditional involvement if they employed new efficiencies in the prototyping of weapons or weapons systems (all that was then permitted under the prototype authority). The confusion caused by his ill-advised amendment persists with many experts unable to understand the basic distinction between section 2371 dual-use authority and 2371b defense specific authority. This results in section 2371b (d) (1) (D) being seen as a major obstacle rather than an opportunity (see Where Are the Major Defense Contractors on this website).

Use of section 2371 authority as atrophied and it is virtually never use. One reason for this is the FAR-like regulations governing Technology Investment Agreements, 32 C.F.R. Part 37. TIA regulations actually govern only a minor aspect of 2371 (when used for assistance and including a particular approach to patent rights). Unfortunately, the TIA regulations are often misread as applying to all 2371 projects.

In Part 5 we will explore OTs going beyond DARPA and explore in more detail forces that promoted and opposed their use.

 

written by Richard L. Dunn

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