Hi everyone , thank you for joining us
in this defense . Innovation board
public meeting . My name is Doctor
Marina Theodotu and I'm the designated
federal officer for the Defense
Innovation Board . Today's meeting is
being live streamed and recorded to
allow members of the public to attend
the meeting virtually or view it later .
Thank you to the Defense Media Agency
for providing their expert support and
to my team and all involved to bring
this event here today . The board will
now convene in its public session .
First , I would like to make a few
procedural announcements . This board
is a discretionary independent board
operated under the Federal Advisory
Committee Act and the government
Sunshine Act . Today's meeting was
announced in the Federal Register
notice posted on January 13th . There
have been no significant changes in the
agenda , and , uh , the meeting's
agenda is posted on the Federal
register notice due to time
restrictions , the board did not
receive any written comments from the .
Citizens , uh , for the board members
in advance of today's meetings and now
I would like to welcome back the
Defense Innovation Board and I would
like to turn it over to our Defense
Innovation board chair Mr . Mike
Bloomberg , sir , over to you , Marina ,
thank you and thank you to everyone who
is watching . Thanks for joining us .
This meeting of the Defense Innovation
Board , otherwise known as the DIB , is
the culmination of 2.5 years of good
work together , and I just want to
thank all the members that are here
with us and those that couldn't be here
today for the time and attention that
they've contributed to this big team
effort . I know I speak for everyone
when I say it's an honor to serve . We
have had the good fortune to meet a lot
of impressive talented people working
on incredibly complex challenges every
single day . Their commitment really is
inspiring to see , and our mission has
been to support them in every way that
we can . By the numbers , our board has
met with almost 750 leaders from
up and down the ranks in every military
branch , the defense department ,
universities , and business . We've
issued more than 150 independent
recommendations tailored to eight
specific challenges that Secretary
Austin directed us to study in depth .
And by the end of 2024 , the department
had implemented 40% of our initial
recommendations with hopefully more to
follow . The department really has come
a long way in recent years on
modernizing its data practices ,
procurement incentives , and working
more closely with the private sector ,
but I think it's also fair to say that
there's always more work to do , and
everyone in senior leadership that
we've talked with would agree . So
today we'll talk about some of the
department's most urgent priorities in
the context of our two newest reports .
The reports are called a pathway to
scaling unmanned Weapons Systems , and
the second one is scaling
non-traditional defense innovation .
Mac Thornberry is ready to tell us
about the former and Gilda Barberino ,
the latter . uh , Mac will speak first
and then the other board members will
have a chance to comment before we hold
a vote . Uh , we will then hold a vote
and try the same thing with Gilda . So
Mac , you're up . Thank you Mr .
Chairman , and I , I would say first
off , I really appreciate the
opportunity to work with Sue Gordon ,
Charles Phillips , and Admiral Mullen
on this study as well as the staff
and a draft special government employee
Hannah Jones . I , I think it's clear
to all of us that unmanned systems have
and are changing warfare . We use them
successfully in the fight against
terrorists to try to prevent , uh , a
recurrence of 9/11 . But what we're
seeing in Ukraine , in the Middle East ,
and what we think a potential conflict
in Asia might look like is of a
different order . Uh , it means we have
to build far more of these systems than
most of us can even imagine , and we
can't wait till the conflict starts to
go do it , uh , then it's , it's too
late . And , and the other thing I
think a lot of people don't realize is
we're we will have them need them in
every domain of warfare . Everybody
talks about drones , but it's also true
on the land and and in and under ,
under the sea . The department knows
this in August of 2023 , the deputy
secretary announced the replicator
program and as part of this study we've
talked with that team about what
they've learned . We've talked with
folks with firsthand knowledge of
what's happening in Ukraine as as you
mentioned , we've talked with uh the
services commanders , industry , and
we've also looked at other studies on ,
on this topic just to to summarize our
recommendations , I think I can boil it
down to 5 things . Number one , we need
to buy a lot of something and just get
going . Uh , there's a bit of a
catch-22 that uh the military needs to
have a lot of something in order to
experiment and war game in order to
know what they need , but they've got
to have enough of them to use in the
war games and , and we're at somewhat
of of an impasse we can't wait for the
perfect thing . Uh , we've got a
breakthrough and buy a bunch of
something so the military can focus on
what they need . We had a number of
people tell us the long pole in the
tent's not the technology . It's the
doctrine , the organization , the
training , the tactics , those are the
things that the military can help can
develop if it has enough systems ,
enough drones or whatever system it is
in in order to work with . Secondly ,
there needs to be money on the table .
Industry is not gonna invest based on a
press release . There's got to be money
there and it needs to be flexible so
that if the program manager pursues a
course and decides that it's not the
right thing , he or she can swiftly
change to another course and there's
all sorts of details about the lack of
flexibility and funding , but it is
essential for I think any . Area of
warfare that relies on technology that
is changing to have that flexibility
it's something that the department will
have to work with the congress on .
Third , somebody needs to be empowered
to drive the issue . As I mentioned ,
the deputy secretary has been driving
replicator , but you can't have the
deputy secretary involved at that level
in every program . We have some
suggestions on some organizational
changes . Uh , there may be some others ,
but , but the key point I think Mr .
Chairman is the department has moved
fast . In the past when it had to with
the warp speed , uh , program to
develop vaccines with JO when we had
service members getting blown up in in
Iraq and Afghanistan , uh , with , with ,
uh , and , and the MRAT program
similarly so it can move fast you gotta
have somebody though that pushes it .
Fourth , there are a number of supply
chain issues , uh , when it comes to
making a large number of drones that
the department's gonna have to address
and 5th , they're gonna have to work
hand in glove with industry , not just
day by day but hour by hour .
The speed of delivery has got to be a
crucial factor in deciding which
contract which companies to to contract
with . I would say , Mr . Chairman ,
you sum it all up , our most important
recommendation is to act . Do
something with the urgency that the
geopolitical situation and the
advancing technologies demand . And in
that sense I think in a lot of ways the
the message of this study on unmanned
systems is consistent and , and in some
ways the same as the message that we've
given in other studies over the last
2.5 years . We're too rigid , too
bureaucratic , and most of all too slow
in supporting our war fighters with the
best technology that our nation can
produce . Lots of people are doing good
things . But incremental steps are not
going to deter . Uh , or and prevent or
if necessary prevail in a great power
war as with the other studies that
we've done , we found that it's not
really a technology problem but it's in
people , processes and organizational
behavior problem and the good news of
that is those are things we can solve
for and we hope we do .
Mac , thank you and thank you for your
committee and all the work that you've
done , not just now but in your
previous career . Uh , we're gonna have
a vote on the recommendations and I
will call each member as name and they
will say yeah or nay Gilda
Barbarabino Sue Gordon .
Charles Phillips ,
Will Roper , there is a third that I
didn't know , but uh it's good that
I've learned that now . I should have
asked Ryan Swan , and here's the
tricky one , Mac Thornberry ,
uh , great , great , I think that
concludes the first study and now Gild ,
it's your turn to tell us about the
second study . Please go ahead . Thank
you Mr . Chairman and my thanks also to
other members of the study committee
Mary Meeker , Will Roper , and Ryan
Swan and thanks also to this , uh ,
staff who provided excellent support to
us . We were tasked to provide outcome
driven recommendations on scaling
non-traditional defense innovation . We
met with over 200 stakeholders to
include DOD leaders , industry experts ,
war fighters , and academics . We had a
number of key findings which I'll share
with you . First , despite the
competition with China and conflicts in
Ukraine and the Middle East , the DOD
still lacks the ability to rapidly test ,
procure , and field emerging capability
within months or weeks and without
aggressive action , our war fighters
are on track to risk defeat on the
battlefield . We strongly urge
immediately amplifying the urgency
level , taking a significant portion of
research , development , test and
evaluation investment out of the
planning , programming , budgeting ,
and execution process and placing it
within a system of flexible procurement .
We need to significantly enhance the
acquisition system's risk tolerance for
failure , enforce existing authorities
and contract mechanisms for
non-traditional vendors , and
incentivize the DOD contracting
workforce to place larger bets on new
market participants through a mix of
both critical acquisition targets and
open topic based pathways . Our
overarching recommendation . Is to
address the immediate imperatives of
focused organizational structure ,
cultural optimization , and dedicated
capital required for leveraging
non-traditional vendor capabilities at
scale . Among our key
recommendations one , Congress and the
DOD should expand DIU into a
cross-service Sherpa office , a fully
staffed and resourced front door to the
DOD market for commercial industry
that's capable of providing entry to
exit support to non-trad traditional
vendors at scale . 2 ,
train the DOD acquisition workforce on
relational contracting , and that's
including training for program
executive offices and balanced proposal
process pricing . We should eliminate
burdensome , confusing or lengthy
contracting . For example , eliminate
the defense contract audit authority
audits and accounting reviews for firm
fixed price contracts that are under 2
million . We should require the PEOs to
justify contracts with market research
in accordance with the Federal
Acquisition Streamlining Act . And we
should maintain clarity on trade-offs
across cost schedule and performance .
Establish a non-traditional vendor
investment review committee that's
overseen by OSD Office of Cost
assessment and Program evaluation . We
should commit to procuring and fielding
5 to 10 game changing capabilities
inside 2027 . And
embrace a minimum variable product
mindset to prevent Chinese overmatch we
could organize , for example , a first
breakfast with DOD , Congress ,
industry , and investment leaders to
commit to these procurements and grant
the Office of Strategic Capital equity
funding Authority . We should
streamline security clearance
requirements for non-traditional
vendors , including establishing a
central credentialing authority and
allowing vendors greater access to
utilize skiffs . We could implement an
ex post instead of ex ante
approach to risk in IT , cloud and
network security that is allow vendors
to compete on performance innovation
price and create a walk up to
compliance and male vendors on the back
end with liability instead of requiring
approvals on the front end . We could
create a senior leader tracking group
for recent ATODOD CIO
reciprocity changes and adopt the
Federal risk and authorization
management program . We could also
establish the Rapid Innovation Fund ,
which is now known as the Rapid
Integrated Scalable Enterprise program ,
as a stopgap DOD SBIR
STTR Phase 3 fund while working
with Congress to investigate options
for a permanent phase 3 program using a
variety of sources , either additional
appropriations or pooled funds from
existing programs . And finally we
could establish dedicated oasis funds
within each service complementing the
permanent SBIR STTR phase 3
fund with an additional funding vehicle
for promising non-traditional vendors
leverage decoorized in the fiscal year
contingency readiness funds instead of
separate appropriations or taxing
existing service programs . Thank you
Gilda thank you and thanks to all of
those that worked with you . I will now
vote on the recommendations , and each
member will say yeah or nay , assuming
they are authorized to vote in this one .
You can vote on this one . I can't wait
to see what you do first Gilda
Barrabino , uh , Sue Gordon ,
Charles Phillips , Will Roper , Loudon .
Ryan Swan Mac Thornberry . Well , that
concludes the second study for today ,
and , uh , Marina , would you please
share any public comments that we might
have received ? Absolutely , thank you
so much , uh , Mr . Chair . So the
board always welcomes public comments
and questions and feedback to the
studies and uh in this particular case
uh we haven't received any uh
pertinent or direct feedback for our
two studies however , the board has uh
been uh over the last 2.5 years has .
In receiving a number of
recommendations and we'll be we've been
fielding those back to the board so the
Defense Innovation board always is
listening and always welcomes your
feedback and uh perspectives because we
do share those with the chair and uh
the members for their consideration .
And with that , let me just say that
um we have a wonderful country . We
have a great military . The world's a
dangerous place . We need to have to
make sure that our military has the
assets that they need , as the training
that they need , has the spirit and the
understanding and support of the public .
And God help us all if we don't have it ,
but it's been an honor for all of us to
serve and to get what we think is a
program that can be implemented . Not
everything has to be done the way we
thought , but at least it will get
everybody to think and to take action
rather than just to sit around , and I
think that's really one of the key .
The world is changing very rapidly .
And if we don't do something , there's
an awful lot of dangers that everything
that we've built in the last 250 years
can be thrown away . Um ,
Time to take a break . Yes , I think
that's a , uh , that we're at the
juncture . We'll take a brief pause and ,
uh , we'll be back , uh , with the
deputy secretary and her comments .
Thank you . Thank you . Thank you
everybody for listening . Well thank
you . We are now glad to be joined by a
leader who knows the issues that we've
been discussing as well as anyone .
Kathleen Hicks is the deputy defense
secretary , and together with Secretary
Austin , she has run the department's
innovation portfolio for the past 4
years , most notably its replicator
Unmanned Systems Initiative , and her
council and partnership have been very
helpful to our board . Of course she
and her team are busy sprinting to the
finish line , so we certainly
appreciate her taking the time to say a
few words to us today and Deputy
Secretary Hicks , it is good to see you
and thank you for doing this and the
floor is all yours . Great , thank you
very much , Mike . It's great to see
you and the whole Defense innovation
board . Thank you all for the very hard
work that you've put forward on the
studies that you were published today .
Delivering innovations at scale with
speed is so important as you've heard
me emphasize before , innovation is a
never ending imperative for DOD , but
I'm really deeply proud of the progress
that we've made over the past 4 years ,
substantially lowering barriers to
innovation across the DOD enterprise .
From the boardroom to the battle space
from day one we focused on the urgency
to innovate and enabled DOD to deliver
using a clear and comprehensive war
fighter centric approach supporting
game changing initiatives , assuming
risk and investing in the workforce .
Innovation adoption is fundamentally a
change management problem . That's why
we've employed an effective theory of
change , building trust and confidence
across the defense enterprise ,
demonstrating what's possible ,
rewarding game changers , and promoting
the best ideas and success through
teamwork . For instance , DOD's Rapid
Defense Experimentation Reserve or
radar initiative begun in October 2021 .
Competitive advantage Pathfinders
established in April of 2022 , and the
replicator initiative launched in
August of 2023 . They all show how
we've realized the benefits of focused
senior leader attention on improving
process to accelerate the development
and fielding of innovative solutions
that address war fighter needs . To be
clear , these were all pathfinders ,
not the sum total of the changes we
have pursued or seek in launching ,
developing , and executing radar , cap ,
and replicator . DOD leaders took on
risk to show others what is necessary
to unleash what is possible within the
defense enterprise and with the private
sector . Beyond those three examples
we've elevated and resourced
organizations like the Defense
Innovation Unit and Strategic
Capabilities Office , which are scaling
our capacity for rapid prototyping and
fielding , working closely with the
services and cocoms . We've ignited a
culture shift in combatant commands and
military services and in our research
and engineering enterprise . For
example , by supporting innovation
leaders in CEO into Paycom and
elsewhere who are getting after
combined joint all domain command and
control by accelerating the Marine
Corps's force design to deliver agility ,
innovation and technological
advancement and in 2027 rather than the
previously planned 2030 . And by
creating the Office of Strategic
Capital , which has already begun
accepting applications for loans to
accelerate commercialization and scale
production of critical technologies .
You can also see the progress
monetarily . Over the last 4 years , at
least 375 billion
DOD dollars have gone to
non-traditional defense companies from
commercial firms to venture-backed
defense tech startups and scale-ups ,
because , as you've heard me say before ,
staying ahead in strategic competition
requires DOD to work better with
newcomers to our mission who have game
changing technologies that can benefit
the warfighter . In all , when we look
across 4 annual defense budgets and
multiple supplemental funding bills .
Adding up all our capability
investments for R&D plus procurement ,
the real dollar total is over
$1.2 trillion even after controlling
for inflation , that's more than DOD
invested in those areas across any four
year period during the Cold War . Money
matters , but at the same time we
cannot achieve the level of innovation
we need without talented people .
Critical outside the box thinkers with
top tier training , and it's important
that we get out of the way of skilled
talented experts because smart ,
creative people will go further and
widen the path of what's possible .
Over the last 4 years , top tech talent
from the private sector increasingly
chose to work for and with us , leaving
lucrative jobs at places like Lyft ,
Apple , Google AI , and others . We
also created the position of chief
talent management officer and hired the
inaugural CTMO , who was working
closely with leaders throughout the
department . And we continue to invest
in processes to modernize DOD talent
management where we are woefully behind
the private sector . This is especially
necessary for the civilian workforce
and speeding security clearances ,
maintaining a short time to hire and
attracting the finest talent are all
important goals we have only started to
advance . Looking ahead , I want to
share 5 key insights for success
because recognizing the bipartisan
consensus around the imperative to
innovate , there is still so much work
to do . First , innovation cannot be
the sole province of any one slice of
DOD or only the executive branch . Just
as there are no silver bullets ,
there's no sole owner of defense
innovation . Rather , it must always be
the responsibility of everyone , every
component , every leader . To do
otherwise gives the rest of the
bureaucracy a pass to say it's not my
problem , not my lane , not born here ,
and such excuses too often hinder
defense innovation in the first place .
And we must have support in Congress
for new ways of doing business from
authorizers and appropriators alike ,
ending the routine , now even casual
use of continuing resolutions , a
highly destructive habit Congress can't
seem to kick is a great place to start .
CR is often challenged the core of my
second insight , which is that
execution is paramount . And it must
occur across the entire delivery chain
that turns vision into capabilities at
scale . It's easy to talk a big game ,
but if you do , you have to be ready to
deliver . We knew execution would be
key with replicator . It's where other
innovation visions had stumbled in the
past , so that was part of our thinking
from the very beginning . My third
insight , well-intentioned disruptors
have more allies than they realize .
Sometimes they're hard to find . They
can even be encased in the so-called
frozen middle . You've got to find the
mavericks , thaw them out and embrace
them . Hold them accountable but
embrace them . Then create and align
incentives to build more disruptors
because so much depends on talent .
Make no mistake , DOD will always need
bold change agents from top to bottom
and bottom to top , willing to
challenge the status quo . It takes
leadership at all levels . The 4th
insight is something we can never
forget . Moving fast and breaking
things is necessary to win wars , but
we cannot break the law or oaths to the
Constitution or the public's trust .
Those who do cross those lines always
make it 10 times harder for themselves
and the well-intentioned change agents
that come after them . That brings me
to my 5th insight . We can never get
complacent because this is a protracted
campaign . Technology will keep
changing . Today's good habits and best
practices will one day be stale and
outdated . Our global competitors will
continue to advance their capabilities ,
especially the PRC . We're in a
generational competition for transient
advantage with a dynamic adversary , so
we must also be constantly learning ,
growing , evolving and pushing
ourselves . It's all hands on deck .
The Pentagon may be made of Indiana
limestone , but its processes weren't
meant to calcify for all eternity , nor
be stuck in concrete blocks . I've
heard plenty of salty language in my
days , but the most profound and
damaging seven words I hear in the
Pentagon are this is how we've always
done it . That is simply unacceptable
today . The Defense Innovation Board
has kept UUD accountable on this score ,
and I'm confident it will continue to
do so . A final thought America excels
at innovation because of our democratic
system , born of free minds , free
markets and free people . DOD can
only benefit from that as long as our
democracy endures . If we want to keep
changing the world , we have to
strengthen the democratic principles
that make this nation so worth
defending and make changing the world
even possible . When you think about it ,
these things are deeply interconnected .
Enforcing contracts and protecting IP
depends on upholding the rule of law .
Hiring a talented workforce depends on
having good schools , universities ,
and legal pathways for immigration .
The flourishing of all Americans
depends on ensuring equal rights and
equal opportunity for all . And
starting a business , investing in
others , inventing a product and taking
it to market depends on safeguarding
the institutions that provide the
blanket of liberty under which
Americans do so . Each of you on this
board has contributed to all of that .
I'm grateful to you for it , and I look
forward to the contributions you'll
make in the future just as I'll be
watching for our successors at DOD to
build on our successes with their own .
Thank you very much for your service ,
Madam Secretary , thank you so much for
the work that you've done . uh , the
country , uh , hopefully will listen to
what you said and the rest of us and
continue . I did not know about the
Indiana limestone . Always wondered
where it came from , but now I know um
before we wrap up board members , would
you any question you might have for the
deputy secretary or anything else ?
Well thank you uh thank you for your
partnership . Let me once again thank
Lloyd Austin and you and Heidi Shu and
the entire team . So , uh , uh , we'll
continue to look for opportunities and
hopefully you'll still have some impact .
Uh , we have a long ways to go and it's
a very dangerous world out there ,
getting more dangerous every single day
and somehow or other we've got to find
a ways to . deal with that and to not
throw in the towel or make some
terrible tragic mistakes which in this
day and age could lead to calamity . Um ,
thank you all , Marina thank you very
much .
You wanna do ? Good
Thank you Mr . Chair , and uh with that
we have come to the close of our public
meeting today . We thank you all for
joining us today . A a warm thank you
to all of our board members for all
your great work and uh with that , uh ,
we bid you farewell . Thank you
everyone . Thank you all .