Defense Dept. fails to capture available technologies.

IN THE RACE TO SECURE THE LATEST AND GREATEST technologies from the private sector and university labs, the Pentagon often comes up short, experts contend. The fault stems, not surprisingly, from beltway politics and the Pentagon's intransigent procurement bureaucracy.

As the government's biggest spender, the Pentagon is a natural magnet for technology entrepreneurs. In recent years, the Defense Department has actively courted businesses and academia to come forward with innovative technologies that it needs urgently on the frontlines, such as bomb neutralizers, protective gear for troops and lightweight truck armor.

Novel and potentially useful technologies are out there to be grabbed, but unless the Pentagon makes it easier for companies and universities to communicate with the decision makers, it will be left behind, says Stephen E. Cross, director of the Georgia Tech Research Institute at the Georgia Institute of Technology in Atlanta. He serves on various Pentagon technology advisory panels.

Organizations such at GTRI, which are not entirely dependent on government contracts for their survival, generate a steady stream of technologies that the Pentagon could tap, without having to pay seed money.

For the Pentagon, "funding is not the biggest challenge," Cross says. "It's fielding capabilities fast enough based on what the adversaries are doing." In critical areas, such as explosives detection and countermeasures against roadside bombs, the system conspires against the military's needs. "We take months to think through counter actions. The defense industry takes months. The terrorists take hours or days ... We see how quickly enemies can use commercial technologies. So we need to be much faster."

To tackle this problem, the Pentagon created new agencies such as the "defeat improvised explosive device organization" and the "rapid equipping force." But there are fundamental obstacles in the system that, no matter what these agencies do, will keep innovation out of the Defense Department's reach.

"It's difficult to introduce disruptive innovation into the Defense Department," says Cross. "You have to get it into the acquisition process, and it's just very difficult to do."

Universities frequently develop military-relevant technologies that the Defense Department doesn't have to pay for, says Cross. "More and more research is being funded internationally. We can tap into that research and bring it to the Defense Department."

Cross says he worries that the Defense Department may be missing an exceptional opportunity to capture ground-breaking technologies while the funds are still pouring in. The cost of the Iraq war and the escalating price tags of major weapon systems are expected to put a damper on science and research spending in the coming years.

"It's very much a concern," says Cross. While the response time is an urgent priority, an anticipated drawdown in R&D budgets is more of a long-term problem. "Just like in corporate America, if we focus on short-term results, eventually we are going to pay the price by not doing the research," says Cross.

As it plans future budgets, the Pentagon also must factor global technology trends. A decline in defense spending could very well jeopardize the Pentagon's standing as an influential buyer, Cross suggests. "There's a real risk there," he says.

He cites industry projections that show that most of the next-generation technologies will come from outside the United States. A global survey of corporate executives--published in April by IBM Corp.--predicts that in the next five to 10 years, 60 to 70 percent of the research in key areas will be funded outside the United States. "Top graduate students in India and China are staying in their own countries because of the research funding and the caliber of the academics at their universities," Cross says.

Last year, GTRI developed a lightweight ceramic armor for a vehicle that the Office of Naval Research designed for the Marine Corps.

The message from military officials was that they needed this technology immediately for troops in Iraq. "We prototyped one vehicle and delivered it to Quantico," where the Marine Corps acquisition command is based. "We are waiting to hear from the Marine Corps on what the next steps are," Cross says. "This is where we all get frustrated ... We think it's a good solution. There's no technology impediment for moving forward. It's the acquisition process."

The armored vehicle is not likely to go into production any time soon. The Army and the Marine Corps are studying proposed designs from major defense contractors for a new light tactical vehicle that would replace the Humvee. The program is not expected to deliver new vehicles for at least two more years.

Frustrations with the defense bureaucracy also can be found at a California university where Congress created a "technology transfer" office specifically to expedite the transition of promising concepts from the commercial sector to the military.

"The challenge is getting into acquisition programs. That consumes most of our time," says Steve Gordon, director of the Office of Technology Transfer and Commercialization at California State University San Bernardino.

The office scouts companies nationwide for technologies that show potential either for government applications or for private investment. Its funding from the Defense Department has shrunk from $8 million two years ago to $2 million currently.

Recent products that, with CSU'S help, contractors successfully sold to the Defense Department include biological detectors, radios, batteries and fuel cells.

"We have contacts at the office of the secretary of defense," Gordon says. "They are very supportive ... But when we ask them how we get into acquisition programs, frankly, they don't know. This is true for many of the technologies we have."

Getting to the right person who can write a purchase order so someone in the military can buy the product is "really a hard thing to do," Gordon says. Some officials at the Defense Department "want to help us but they don't know how."

The good news is that "we don't see any drying up of the innovative spirit," he says. "Our concern is that all this good work is not sufficiently noticed by the people who make procurement decisions."

One major obstacle for organizations such as the CSU technology transfer office is that most of their customers are small businesses that don't know how to sort out the Pentagon's obscure procurement ways.

Truth be told, small businesses are not among the Defense Department's preferred suppliers, says Greg Zerovnik, communications manager at CSU.

"The Defense Department and the Department of Homeland Security are comfortable working with large primes. When you start fooling around with small businesses, it's messy, it's unpredictable, difficult to assess, hard for a procurement officer to recognize good stuff ... Primes are the safe choice."

The government mandates that a percentage of defense contracts be awarded to small businesses. Otherwise, the Pentagon wouldn't do that willingly, says Zerovnik. "Primes say competition improves the breed, but they don't believe that. What they believe is that they want to be the monopoly."

Large defense contractors, he says, "are buying some of the companies we fund. We are identifying the hot movers and shakers."

Politics also becomes a huge factor in how small firms receive R&D funds. The Office of Naval Research, for instance, gets several hundred million dollars a year in congressional "earmarks," which are added to the defense budget at the request of an influential lawmaker. Those earmarks generally amount to about 20 percent of ONR's $1.5 billion budget.

"We do get a not insignificant amount of congressional plus-ups," says Rear Adm. William E. Landay III, director of ONR. "A member wants the plus-up to be spent in his district."

ONR habitually is criticized by contractors--both large and small--for playing favorites. Landay disputes that. "A lot of good ideas we can't just fund," he says. "Large companies complain that we favor small businesses. Small businesses claim bias for large contractors. Universities complain we favor industry. My sense is that I probably got it about right because everyone is unhappy, and I'm spreading the money fairly equally."

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