Non-Traditional Defense Companies Can Provide the Military With Unique Capabilities

March 28, 2020
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Over the past few years, the Department of Defense (DoD) has undertaken a major effort to encourage non-traditional defense companies to do business with the Pentagon. These are firms of all sizes and types that do not provide defense-specific goods or services. The idea is that DoD acquisition can benefit not only from access to the unique products such companies produce but from their alternative approaches to design, production and sustainment. The Pentagon's interest in accessing non-traditional providers has focused to a large extent on small, innovative companies. Large commercial companies, including major manufacturers, can provide the U.S. military with new products and to procure them in large volumes as needed.

The U.S. military has a long history of relying on commercial companies to provide defense products, particularly in wartime or a national crisis. With the advent of the Cold War, a class of companies arose that focused their efforts on providing goods and services for DoD and other government departments and agencies such as NASA and the Intelligence Community. At one point in time, defense-funded innovations led the commercial world in such areas as aeronautics, computers, nuclear power generation, long-distance communications and space systems. The key technologies and the overall architectural design for the Internet, central to the workings of modern societies and economies, were developed with funding from the Defense Advanced Research Projects Agency.

Why has DoD become so interested in gaining greater access to commercial companies that have not done business with the government? It is largely because, in several areas of technology and the economy, commercial products and services are now better, cheaper, and easier to acquire than what the Pentagon can obtain from defense-oriented companies operating through the traditional acquisition system. As noted by Frank Kendall, the former Under Secretary of Defense for Acquisition, Technology and Logistics: “It is clear that in many areas of technology the commercial market place is moving faster than the normal acquisition timeline for complex weapon systems. Examples include information technology, microelectronics, some sensor technologies, some radiofrequency devices, and some software products." Also, by going commercial, DoD can avail itself of goods and services developed without the need for government research and development funding.

The executive and legislative branches have put in place several innovative approaches to assist DoD in gaining greater access to commercial technologies. For example, in 2015, DoD created the Defense Innovation Unit (DIU) specifically to accelerate throughout the military the adoption of select technologies in which non-traditional commercial companies have a clear advantage over established defense companies. Recently, Congress reformed government acquisition regulations to expand the use of Other Transaction Authorities (OTAs) for the procurement of commercial products and the fruits of innovative research.

There have been some important success stories in DoD’s efforts to gain access to non-traditional defense companies. The military has made great strides in adapting commercially produced personal communications devices, smartphones, and in particular, tablets for the battlefield. It has had similar success with unmanned aerial systems (UAS). The Pentagon has contracted with a number of commercial builders of drones such as Insitu to provide high-performance, relatively low-cost militarized UASs.

It is a mistake to limit the focus on how DoD can access the best of commercial technologies to small and start-up companies. Lots of innovative research is going on in big commercial firms. Many of these are investing heavily in IT-related areas, such as autonomy, AI and virtual reality, which can be applied to the development of unmanned military platforms as readily as driverless cars. But they also have a proven record of innovation in large-scale systems such as power supplies, engines, drive trains, transmissions, aero-structures, communications networks and guidance technologies. Moreover, such companies have the knowledge, infrastructure and experience to take new ideas from concept or prototype to full-scale production. Integration still requires lots of people and support, even if systems and subsystems are coming from smaller or non-traditional vendors.

For decades, companies with a mixture of both commercial and defense lines of business have exploited innovations in the former to enhance their products in the latter. Boeing has long leveraged advances in commercial technologies to support critical defense programs. The venerable KC-135 tanker, the heart of the U.S. Air Force’s aerial refueling fleet, was derived from the B-707 commercial transport. Today’s KC-46A Pegasus aerial refueler is based on the B-767 commercial jet transport. Similarly, the advanced P-8 Poseidon Maritime Patrol Aircraft is a militarized version of the 737-800ERX.

Similarly, Pratt & Whitney, one of the world’s largest and most innovative producers of commercial jet engines, has used its skills in this area to provide the military with reliable and cost-effective power plants. For example, the F117 engine that powers the C-17 transport aircraft is a derivative of the PW2000. The KC-46 is powered by a militarized version of the PW4000 commercial jet engine.

There are instructive examples of how large, non-traditional companies have or could employ their unique commercial capabilities to provide the U.S. military with advanced products. Oshkosh Corporation, traditionally a producer of commercial trucks and construction vehicles and equipment, has become a major player in military vehicle markets. It currently produces both medium and heavy military transport vehicles. In 2015, Oshkosh Defense was awarded a multi-year contract to produce the Joint Light Tactical Vehicle.

The largest U.S. automaker, General Motors (GM), recently re-entered the defense marketplace after a nearly two decades-long absence. The new GM Defense is focused on combining the best of an innovative start-up with the experience, infrastructure, and resources of a major manufacturing company. GM Defense is focusing on lightweight tactical vehicles, revolutionary platform power supplies and autonomy. The new division has already demonstrated hydrogen power sources for both land platforms and unmanned underwater vehicles.

The contribution of large non-traditional defense companies also goes beyond the realm of national security, as it is classically defined. In a move that echoed their behavior when the U.S. entered World War II, automakers Ford and GM responded to the COVID-19 crisis by volunteering to produce ventilators.


Dan Gouré, Ph.D., is a vice president at the public-policy research think tank Lexington Institute. Goure has a background in the public sector and U.S. federal government, most recently serving as a member of the 2001 Department of Defense Transition Team. You can follow him on Twitter at @dgoure and the Lexington Institute @LexNextDC. Read his full bio here.



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