The contract period runs May 1, 2024, through April 30, 2029, with an option to extend it to April 30, 2034.

“This contract will accelerate innovation and continue leading the development of the Command and Control, Battle Management and Communications (C2BMC) system,” Lockheed said in a statement. “Under the new C2BMC-Next scope, the system will be upgraded with the latest 21st Century Security technology for faster, multi-domain coordinated responses to emerging threats.”

The C2BMC system connects a wide variety of systems and radars that together form a global missile defense architecture that protects the homeland as well as U.S. and allied forces worldwide from long-range missile attacks.

Work under the new C2BMC Next contract includes bringing in allies and partners, according to the company.

“Part of C2BMC-Next will be enhancing global integration, exploring possibilities of linking this decades-long proven, operationally-fielded system with allied nations for the first time,” the American firm’s statement noted.

“With C2BMC’s already well-established lines of reliable communication — operating 24/7, 365 days a year in more than 30 locations across the world — the ability to securely collaborate with other countries, across multiple domains, from any location in near real-time will be a game changer for the defense industry,” according to Erika Marshall, Lockheed’s vice president for C4ISR, which stands for command, control, communications, computers, intelligence, surveillance and reconnaissance.

The effort under the contract will also include providing C2BMC with technology “that will provide greater Space Domain Awareness,” according to the company’s statement. “Through the connection of sensors, and diffusion of data at a level that hasn’t been done before, this enhancement will allow operators to see a complete view of the battlespace around the world.”

Lockheed has been the prime contractor for C2BMC since 2002. The system, first fielded in 2004, has gone through numerous upgrades, which are spiraled in to adapt to threats. C2BMC was designed to focus from a strategic level down to an operational level.

Recent upgrades since 2021 gave the Ground-Based Midcourse Defense, or GMD, system a single, composite, real-time picture of threats by tying into and fusing data from a broader set of sensors to include satellites as well as ground- and ship-based radars, according to the company.

The GMD system is a U.S.-based capability designed to defend the homeland against intercontinental ballistic missile threats, particularly from North Korea and Iran. The system is made up of interceptors buried in the ground at Fort Greely, Alaska, and Vandenberg Space Force Base in California.

MDA also linked C2BMC to the Army’s Integrated Battle Command System, which provides threat pictures down to the tactical level, as part of recent upgrades. IBCS, which reached full-rate production in 2023, is the command-and-control system for the Army’s air and missile defense architecture.

More enhancements included giving C2BMC the capability to pass data back-and-forth with IBCS and other sensors, including space sensors.

The recent upgrades and upcoming development work done under the contract over the next several years will help the system support the Joint All-Domain Command and Control initiative. JADC2 is the Pentagon’s warfighting strategy focused on building an overarching network to fight advanced adversaries like China and Russia. This would require high-bandwidth, resilient communications as well as the ability to share massive amounts of data to help commanders rapidly make decisions.

Lockheed will perform the majority of its work under the new contract in Huntsville, Alabama, and Colorado Springs, Colorado.

The so-called hunt-forward missions, conducted by CYBERCOM’s elite Cyber National Mission Force, or CNMF, totaled 22 deployments, with some happening simultaneously across the world, Air Force Gen. Timothy Haugh said in testimony submitted to the Senate Armed Services Committee on April 10.

“Enhancing the security of government, private sector and critical infrastructure systems grows ever more imperative,” said Haugh, who took the helm at CYBERCOM and NSA in February. “Foreign adversaries continuously update how they operate, and frequently work through American-owned networks and devices.”

Hunt-forward missions are executed at the invitation of a foreign government and are not always disclosed. They’re part of CYBERCOM’s persistent engagement strategy — a means of being in constant contact with adversaries and ensuring proactive, not reactive, moves are made.

Haugh’s disclosure offers a rare look at the CNMF workload, which is often nebulous, as some countries prefer to keep quiet the digital cooperation.

The mission force has in the past worked with Ukraine, ahead of Russia’s invasion; Albania, on the heels of Iranian cyberattacks; and Latvia, where malware was unearthed. Other previous deployments included Estonia, Croatia, Lithuania, Montenegro and North Macedonia.

The Defense Department sought $14.5 billion for cyber activities in fiscal 2025. The figure is about $1 billion more than the Biden administration’s previous ask. It is also up from FY23, when it sought $11.2 billion.

“We work every day against capable and determined cyber actors, many of them serving adversary military and intelligence services,” Haugh said. “Our operational experience reinforces the importance of campaigning globally in and through cyberspace across the conditions of competition, crisis and armed conflict.”

The two countries will improve their respective command-and-control systems, form an industrial council to build weapons together, network their missile defense systems with Australia’s and start a joint exercise with the United Kingdom, among other agreements. For the first time, America will also adjust its force structure in Japan to better work with Tokyo’s defense forces.

“This is about restoring stability in the region, and I think we have a chance of doing that,” Biden said at a Wednesday press conference with Japanese Prime Minister Fumio Kishida in the White House Rose Garden.

The subtext in Biden’s comment is China, which over the last 15 years has grown far more powerful and aggressive. The change has worried the U.S. that China is trying to push it out of the region, isolate allies like Japan and potentially take Taiwan — which China considers a rogue province — by force.

There may be no better case study than Japan. In the last several years, it’s doubled a cap on defense spending from 1% to 2% — a share it plans to spend by 2027. Japan also entirely revised its national security strategy, scrapped limits on defense exports and bought weapons, such as the Tomahawk missile, that allow it to strike back if attacked.

Many of these changes altered Japanese defense policy that had been in place since after the Second World War, when Japan demilitarized and adopted a pacifist constitution.

“What Japan’s has been doing over the past few years is nothing short of astounding — just unthinkable even a few years ago,” said Toshi Yoshihara, a China expert at the Center for Strategic and Budgetary Assessments. “And I credit the Chinese for that. No one has done more to get Japan to modernize and get serious about defense than China itself.”

Speaking with reporters ahead of the event, senior administration officials said the new agreements won’t take effect for months.

Earlier in the week, defense officials from Australia, the United Kingdom and the U.S. said Japan and other countries may later join part of the AUKUS defense pact, an agreement to share nuclear-powered submarines and other defense technology. Any openings would be for AUKUS’ second pillar, which concerns advanced technology like artificial intelligence and hypersonic missiles.

“What we’re all focused on is demonstrating to our respective populations early victories on pillar two,” Australia’s Minister for Defense Industry Pat Conroy told Defense News in an interview.

Kishida is in the nation’s capital for a state visit — one of Washington’s top honors. He’s the fourth leader from the Indo-Pacific to do so during the Biden administration, and the White House cites that number as a sign of its commitment to the region.

Biden and Kishida will also meet later this week with Ferdinand Marcos, president of the Philippines, in the three countries’ first trilateral summit.

And the topic of U.S. military support for Israel overshadowed a hearing with the defense secretary that same day on the Pentagon’s budget request.

Rep. Gregory Meeks of New York, the top Democrat on the House Foreign Affairs Committee, had expressed reservations about the fighter jet sale and demanded a classified briefing from the Biden administration, raising questions as to whether he will greenlight the pending deal.

“I want to know what types of weapons and what the weapons would be utilized for,” Meeks told CNN on Tuesday.

“I don’t want the kinds of weapons that Israel has to be utilized to have more deaths,” he said. “I want to make sure that humanitarian aid gets in. I don’t want people starving to death, and I want Hamas to release the hostages. And I want a two-state solution.”

Meeks was referring to the Israel-Hamas war that began after the militant group launched a fatal attack on the country in October and took people hostage. Israel has responded by waging war in the Gaza Strip, which has led to the deaths of tens of thousands, according to many estimates. The “two-state solution” calls for separate nations — one for Israelis, another for Palestinians.

The sale includes 50 Boeing-made F-15 fighter jets; Raytheon-made Advanced Medium-Range Air-to-Air Missiles; and Boeing-made Joint Direct Attack Munition kits, which convert dumb bombs to precision-guided munitions. Politico and other outlets first reported on the sale last week.

Israel would not receive the fighter jets and munitions from the sale until the end of the decade.

The top Democrats and Republicans on the House and Senate foreign affairs panels have the authority to block arms sales, and the State Department typically alerts them to deals before formally notifying Congress in order to avoid embarrassing allies. The top Republicans on the committees, Sen. Jim Risch of Idaho and Rep. Mike McCaul of Texas, signed off on the sale soon after the Biden administration submitted the informal notification on Jan. 30.

The office of Senate Foreign Relations Chairman Ben Cardin, D-Md., declined to comment as to whether he supports the F-15 sale. Cardin met with Israeli opposition leader Yair Lapid on Monday.

Other House members previously supportive of U.S. military aid to Israel signed onto a letter to President Joe Biden and Secretary of State Antony Blinken last week expressing concern over the sale. Rep. Nancy Pelosi, D-Calif., a former House speaker, as well as Rep. Betty McCollum of Minnesota, the top Democratic defense appropriator, signed onto the letter alongside 38 other Democrats.

They also criticized Biden for another Israel arms transfer last week, noting in the letter that it “reportedly includes 1,800 MK-84 2,000-pound bombs, 500 MK-82 500-pound bombs and 25 F-35A fighter jets.”

The letter, which Meeks did not sign, called for a halt to offensive arms transfers pending Israel’s investigation into its strike last week in Gaza that killed seven humanitarian aid workers, six foreigners and one Palestinian.

It also called on Biden to “ensure that any future military assistance to Israel, including already authorized transfers, is subject to conditions to ensure it is used in compliance with U.S. and international law.”

‘2,000-pound bombs’

Meanwhile on Tuesday, Defense Secretary Lloyd Austin fielded questions during a Senate hearing from members of the Democratic caucus who are increasingly concerned with ongoing U.S. weapons transfers to Israel amid the war.

“I was surprised that at the very week the World [Central] Kitchen attack occurred, continuing the humanitarian crisis, that the administration approved the transfer of additional munitions to Israel, particularly offensive munitions,” said Sen. Angus King, I-Maine. “Two-thousand-pound bombs are not defensive. They’re offensive, and they’re not very precision.”

The Israel Defense Forces have acknowledged they were responsible for an attack that killed aid workers with the humanitarian organization.

Austin also faced skepticism from Democrats and Republicans alike over the Biden administration’s plans to construct a temporary pier in Gaza to deliver humanitarian aid.

Sen. Tim Kaine, D-Va., said “the pace of humanitarian aid is insufficient” and cited World Food Programme Executive Director Cindy McCain — the widow of former Sen. John McCain, R-Ariz. — who had warned of imminent famine.

“There’s no reason the United States should have to build a pier in the Eastern Mediterranean,” Kaine added.

Gen. Michael Kurilla, who oversees troops in the Middle East as the leader of U.S. Central Command, told the House last month that force-protection plans for the Gaza pier remain classified. Austin said Tuesday that nongovernmental organizations would be tasked with distributing the aid coming in through the pier, though the details have yet to be worked out.

Austin said he pressed Israeli Defense Minister Yoav Gallant on the need to open humanitarian corridors into Gaza and to ensure civilian evacuation and safety before any potential Israeli offensive into Rafah, where roughly 1.5 million Palestinians have fled amid the six-month-long campaign.

Still, Sen. Jacky Rosen, D-Nev., said that “U.S. security assistance to Israel must therefore continue unimpeded.”

Austin replied that the Biden administration is “doing everything we can to make sure we get them what they need as quickly as possible.”

“I would expect that as the nature of this fight begins to change, to become a more precision fight, then their requirements should change a bit,” he said. “We will stay abreast of their needs, and we will continue to provide security assistance as quickly as we can. We remain committed to helping Israel defend itself, but we expect that they would execute operations responsibly.”

Numerous protesters from the activist group Code Pink repeatedly interrupted the beginning of the hearing, shouting “stop the genocide in Gaza.” The interruptions prompted Chairman Jack Reed, D-R.I., to briefly recess the hearing, at which point the protesters left en masse.

Austin told senators that “we don’t have any evidence of genocide” in Gaza. The International Court of Justice in January found there was a “plausible” risk of genocide in Gaza and called on Israel to take steps to protect civilians and allow entry of humanitarian aid.

After a call with Israeli Prime Minister Benjamin Netanyahu last week, Biden called for an “immediate cease-fire” in Gaza and threatened U.S. policy changes absent “a series of specific, concrete and measurable steps to address civilian harm, humanitarian suffering and the safety of aid workers.”

It also requires submission of the often-misunderstood unfunded priorities lists, or UPL.

As detailed in our newly published analysis, the 12 unfunded priorities lists that have been made public to date this year total $28.7 billion in funding shortfalls and represent the best professional military judgement of our nation’s most senior uniformed leaders.

These unfunded priorities equate to about 3.4% of the $850 billion budget request. Given that inflation remains at about 3.2% and the pay raise for military members is 4.5%, the 1% topline increase in the budget request, when combined with the 3.4% in additional funding within the UPLs, would keep the Pentagon at a roughly zero real growth rate.

As there are two major wars ongoing, several shadow wars and the potential for a major conflict with China, we can expect the Pentagon may also have a fiscal 2025 emergency supplemental in the works. Even with this context, the UPLs contained several interesting surprises.

The first surprise is that, though China is the stated strategic pacing threat, the UPLs are filled with shortfalls in capabilities related to this challenge. In fact, the commander of Indo-Pacific Command monopolizes the list in asking for $11 billion, which is 38% of the entire UPL requests, and tops its own previous-year needs by more than $7.5 billion.

Research and development UPLs related to the Pacific and space make up 83% of shortfalls. Similarly, military construction gaps are up $4 billion over last year, an increase that is almost entirely for INDOPACOM needs. High-dollar requirements listed include facilities in Guam; harbor improvements in Palau; runways, wharfs and harbor projects in Micronesia; and water treatment and hangar projects in Hawaii.

Large shortfalls to counter China signal what we already know: The defense budget is too small. But it also may indicate priority disagreements during program and budget decisions, or that INDOPACOM has a more unrestrained view of the process than the service chiefs, or that Congress tends to support INDOPACOM UPLs in how it rescues the Pentagon budget. It likely means all of these things.

The second surprise is that within the investment accounts, there is a very notable shift in the UPLs away from procurement and into military construction as well as research and development. In FY23, procurement made up 53% of the UPLs. In FY25, that is down to 30%, with well over half (54%) not even submitted by the military departments but instead coming from INDOPACOM and the National Guard Bureau.

With procurement the known bill-payer for this year’s stated budget focus on readiness and the near-term fight, the UPLs were expected to make up for the lack of funding to actually buy the ships, planes, ground vehicles and space systems we know we need to remain competitive and to sustain our industrial base and supply chains struggling under uncertain and insufficient budgets.

The third surprise is in the readiness category, which includes appropriations for operations and maintenance as well as military personnel, along with targeted partner efforts funded through the Defense Security Cooperation Agency. Despite the FY25 budget request’s stated focus on readiness, the Air Force puts forth a single $1.5 billion request for spares, noting a one-time need for aircraft readiness that it could not fully fund in the budget due to fiscal constraints.

In addition, INDOPACOM lists a $581 million gap, which essentially means that the day-to-day operating forces and contracted logistics support functions of the Army, Navy, Air Force and Marine Corps components in the Pacific are underfunded, at least in the view of the INDOPACOM commander.

In conclusion, three key points stand out. The FY25 defense budget request is too low to meet even those readiness requirements it says it prioritizes, and it loses ground on crucial strategic innovation, posture and procurement efforts necessary for U.S. national security and military competitiveness.

UPLs are important tools in determining where to apply missing resources, but they also signal consequences to budget uncertainty and the resulting disjointed approach to supporting strategic priorities.

And third, as Congress examines the unfunded priorities and the capability gaps they represent to increase the defense budget to minimally required levels, it should also prioritize on-time enactment of annual appropriations as equally important to promoting our national security.

Elaine McCusker is a senior fellow at the American Enterprise Institute think tank. She previously served as the Pentagon’s acting undersecretary of defense (comptroller). Retired U.S. Army Maj. Gen. John G. Ferrari is a senior nonresident fellow at AEI. Ferrari previously served as a director of program analysis and evaluation for the service.

The secretary is rightly focused on the need for increased investment to facilitate greater innovation and production capacity for strategic competition with China. The management teams of some large defense primes, on the other hand, buy back shares as an efficient way to return value to shareholders after considering the attractiveness of investment opportunities available to the company.

Changing this situation and spurring increased investment in the defense market requires addressing the incentive structures that guide market behavior, including stock buybacks.

Before examining market incentives, it is worth noting that the U.S. government decided many decades ago to largely privatize the defense-industrial base. While the DOD retains a modest number of government-owned arsenals, shipyards and depots, the vast majority of the systems developed and services conducted for the DOD are performed by for-profit companies. These companies have developed the innovations and capabilities that have made U.S. forces the best in the world.

This industrial base includes approximately 200,000 small, medium and large companies, the vast majority of which are privately held. Including those traded on foreign exchanges, there are only about 100 companies that are publicly traded. And only a very small fraction of those companies use share buybacks consistently as a strategic management tool.

Secretary del Toro captures the essence of the anti-buyback argument, which has been articulated by Pentagon leaders for years: “You can’t be asking the American taxpayer to make even greater public investments while you continue, in some cases, to goose your stock prices through stock buybacks, deferring promised capital investments, and other accounting maneuvers.”

Why do defense companies continue to pursue stock buybacks? It is principally the large mature defense primes such as Lockheed Martin, Northrop Grumman and HII that buy back stock. These firms are profitable, generate significant cash flow, have a relatively low cost of capital and are not highly leveraged.

Lack of capital is not a problem hindering investment at the largest defense primes. The issue revolves around the capital allocation decision. If large defense primes are not making significant investments, it is because they believe that this incremental dollar is unlikely to materialize into a profitable contract in the future. For that to change, these primes need to see a better return for the earnings they intend to retain and reinvest. Those returns could come through an increased number of growth opportunities, a greater frequency and volume of competitions, or margin improvement.

In contrast to the large mature primes, smaller publicly traded companies such as AeroVironment and Kratos do not typically buy back shares. They are instead investing in growth, as they see significant opportunities in their own market segments and beyond as the DOD spends heavily in unmanned systems, advanced electronics, autonomy and other areas central to the National Defense Strategy. If similar, larger incentives existed for the larger primes, then that is where capital would be allocated.

Bigger budgets obviously help incentivize investment, but changing how the DOD buys through practices such as open architectures, multiyear contracts and multiple production lines will likewise create more contract opportunities and therefore that stronger demand signal that industry needs to invest.

The DOD is heading in that direction in several important ways, and more emphasis there would be productive. Adopting some of the recent recommendations of the congressional commission on defense planning, programming, budgeting and execution reform, for example, could substantially contribute toward improving incentive structures.

Another promising avenue the DOD can use to incentivize investment by the larger primes revolves around program performance. Secretary del Toro has justly emphasized in his recent remarks that “industry must deliver platforms and capabilities on time and on budget for the sake of our warfighters who are in harm’s way.”

How about, for example, rewarding contractors with substantial profit-margin expansion opportunities for delivering ahead of terms, and punishing them more severely for missing the mark? The beauty of a commercially viable defense industry is that its participants are responsive to incentives.

Ultimately, management at for-profit companies are stewards of others’ capital. Browbeating the financial practices of industry alienates firms large and small. Let’s work instead to change some of the incentive structures in the defense market. Addressing these will help foster the innovation and investment we need in our industrial base as well as reducing stock buybacks along the way. And it is ultimately that vibrant public-private partnership we need to confront today’s daunting national security challenges.

Jerry McGinn is the executive director of the Greg and Camille Baroni Center for Government Contracting at George Mason University and a former senior U.S. Defense Department acquisition official. Mikhail Grinberg is a partner at Renaissance Strategic Advisors and a member of the center’s advisory board. Lloyd Everhart is a research manager at the center.

In at least one case, an Australian company has even opened up a location inside the gates of a U.S. Army arsenal.

Indeed, Australian defense executives say the AUKUS agreement not only offers the opportunity to expand into the world’s largest defense market, but also a chance to transfer those benefits back to a growing Australian defense industry ready to help if a large-scale conflict breaks out in the Indo-Pacific region.

“All of a sudden America and Australia’s industrial bases naturally just need to be linked,” Rob Nioa, chief executive of Australian munitions company Nioa Group, told Defense News. “Where we ultimately want to be is a company operating in the U.S. munitions base with forward-deployed, production-ready capabilities in the Indo-Pacific region.”

The AUKUS collaboration, unveiled in September 2021, is organized into two pillars of effort. The first focuses on nuclear-powered submarines; the second covers critical technologies like artificial intelligence, quantum computing, hypersonics and autonomy.

Already, Australia has received $1.6 billion in U.S. defense contracts within the context of AUKUS, and Australia is “significantly investing in the United States to support the delivery of these contracts,” Paul Myler, deputy head of mission at the Australian Embassy in the U.S., said during an April 5 Center for Strategic and International Studies event.

The AUKUS pact “is not about making it easier for Australia to buy U.S. kit,” he added. “If we only look at it through a purchase-sale transaction lens, we have failed. This is a radical reimagination.”

But barriers to working together remain, Cynthia Cook, CSIS’ Defense-Industrial Initiatives Group director, told Defense News.

“Some of these relate to challenges that all companies have when marketing to the government, which is getting insight into government requirements and matching their products to a government demand,” she said. “Companies in partner nations can have challenges seeing tenders. And there is the simple challenge of the ‘tyranny of distance’ and the different time zones.”

Building a U.S. footprint

Nioa’s father founded Nioa Group in 1973 out of the back of a gas station in Queensland as a regional sporting firearms shop.

Over the years, the company expanded its customers to law enforcement and defense and its focus to munitions production. The company today provides all of the Australian Army’s artillery ammunition.

Nioa Group also has a business in New Zealand and a joint venture with Germany’s Rheinmetall called Rheinmetall Nioa Munitions, which recently established a munitions shell forging factory in Australia to supply the German military.

Roughly a year ago, the company established the Australian Missile Corp. under a contract with the Australian government to develop a domestic guided weapons enterprise.

Nioa Group has partnerships with some U.S. companies like Northrop Grumman and, in 2023, it purchased Murfreesboro, Tennessee-based Barrett Firearms, which produces the only shoulder-fired 50-caliber gun, the primary anti-personnel sniper rifle used by the U.S. Army and Special Operations Command.

Now, Nioa Group has signed a long-term lease at Picatinny Arsenal, New Jersey, home to the U.S. military’s guns and ammunition development, making it the first foreign company with a footprint on Picatinny’s property. The company took up its tenancy in late November 2023 to collaborate on a variety of armaments supply needs.

“We have existing work that would see us wanting to be inside the wire working with them,” Nioa said.

And Nioa will have the chance to work more with other U.S. companies based there, including Northrop, General Dynamics, Winchester and BAE Systems. Nioa recently named Dan Olson, formerly Northrop Grumman’s weapons systems division vice president, a Nioa advisory board member focused on developing its U.S. strategy.

“Aspirationally, we want to grow in the U.S. market,” Nioa said. “What we now need to do is develop an ammunition footprint in the U.S., and that path is not 100% clear to us, but it will likely come out of us understanding the supply chain constraints in the U.S. and where the U.S. government needs more production for the allied effort.”

Nioa Group is interested in acquiring companies already in the supply chain, he added, and will seek to work with or acquire components that would be needed in Australia as well, Nioa said, which could lead to easier co-production.

While AUKUS is making it easier to establish direct relationships with the U.S. government and partner more deeply with U.S. industry, he said, it’s still too early to see technology being transferred.

“People are a little nervous that actually when it comes time for transferring missile technology or something that despite it being agreed to at a policy level, actually the documents and authorities which will allow the physical transfer, they think is still going to be entrenched,” he said. “There’s a lot of inertia around existing systems.”

Another Australian company is taking a similar approach in the U.S., seeking to expand the technology development work it is doing in Australia in the U.S. and with U.S. partners.

EOS Defence Systems opted to establish a production footprint in Huntsville, Alabama, in 2018 “in response to an ever-increasing U.S. military requirement for [remote weapon station] systems,” according to a company announcement at the time.

The company is perhaps best known for its common remote weapons stations and previously supplied some to the U.S. military in the 1980s. It lost the latest contract to Norwegian company Kongsberg, according to EOS chief executive Andreas Schwer, but the company has three other business sectors it hopes to grow in the U.S.

EOS has been working on lower kilowatt directed energy solutions that could be considered for integration on smaller systems like armored vehicles. He said the company is close to signing two contracts for lasers with international customers and then plans to migrate that technology to the U.S.

EOS also has developed over the last 20 years a ground-based laser that can blind satellites. The company is now developing capability to also disable satellites’ sensors and ultimately the satellite itself. “We see huge export potential,” he said.

AUKUS is allowing conversations and collaboration that would have been very difficult beforehand and giving the company the ability to participate in classified programs, Schwer said.

“AUKUS will make our life easier in terms of exchange of product data or product information, software codes, but also even the hardware to push back and forth, demonstrators, prototypes and stuff like that,” Schwer said. “We have more commercial reason to do more in the U.S.”

Like Nioa Group, EOS already has some partnerships with U.S. companies like Northrop Grumman, but the company is also looking for acquisition opportunities and partnerships, Schwer said.

“We are ready to bring laser technology to the U.S. or our satellite terminals, maybe even under another brand name,” he suggested. “We are currently checking all opportunities before we undertake a formal decision.”

Small business breakthrough

Smaller and newer Australian companies are also evaluating opportunities in the U.S.

3ME Technologies, an Australian company specializing in electrification, is now making a more global push, but hopes to focus on the AUKUS countries, according to chief executive Justin Bain.

The company has converted the Australian Defence Force’s Bushmaster vehicle into a hybrid-electric variant and has worked on projects delivering the battery system and power solutions for counter-drone and directed energy systems. The company particularly specializes in battery safety, critical both in the mining industry and the defense industry, Bain said.

3ME has now begun preliminary discussions with a number of U.S. prime contractors, which could help it grow in the U.S. The firm plans to make its U.S. trade show debut at Sea Air Space this month.

Enabling 3ME’s conversations with U.S. primes is an Australian government program called Going Global, which assists companies that want to link up with U.S. defense prime contractors.

Bain said he sees a strong role for the company potentially establishing a robust high-end battery and electrification supply chain in the Indo-Pacific as the U.S. considers logistics operations in a contested environment in the priority theater.

“The key theme we’re getting out of the U.S. is we need to shore up supply chain in INDOPACOM. We need more support in INDOPACOM. It’s the fact that we exist, we’re here in Australia with the experience and that’s why we want to focus in this area,” Bain said.

Ellen Lord, who served as the Pentagon’s acquisition chief during the Trump administration, said during the CSIS event in April, that working with small Australian companies “is where the real challenge is.”

“What we’re missing is the engagement strategy to bring all these small companies together to understand the art of the possible, to have the contracting officers know what to do with it, because we don’t always do a great job in the Department of Defense in terms of motivating and incentivizing individuals to lean forward and do something differently,” she said.

Hugh Jeffrey, the Australian Department of Defence’s deputy secretary of strategy, policy, and industry, said during a March 5 CSIS event in Canberra, Australia there’s a long history of trying to link the Australian and U.S. defense-industrial bases.

There has been “only limited success,” Jeffrey said, but said he’s optimistic this time will be different.

Already, he noted, the U.S. Congress made significant export control reforms in the fiscal 2024 National Defense Authorization Act, which will enable faster sharing of defense industrial resources with Australia and the U.K. and “most crucially” establish a national exemption for AUKUS countries from some U.S. export control licensing requirements. The U.S. State Department still needs to grant the exemption, contingent on Australia and Britain enhancing their own export control laws.

“My view is that the consensus has emerged on both sides of the Pacific on this issue, that we do need to change things up and that’s why it’s so exciting to see the US and Australia commit to a generational shift in mindset around industrial base integration,” he said.

The Military Maritime Consultative Agreement, or MMCA, is an annual discussion intended to help U.S. and Chinese forces operate safely in the same areas. China scuppered it and all other military channels in 2022 after then-House Speaker Nancy Pelosi visited Taiwan, which China’s government considers a rogue province and has threatened to take by force.

The MMCA is notable for two reasons this year.

First, it’s part of a larger effort for the U.S. and China to talk more often.

American officials warned for more than a year that without speaking the two militaries would be more likely to accidentally end up in conflict. Those calls went unanswered until last November, when President Joe Biden met with Chinese leader Xi Jinping near San Francisco, where the two agreed to resume military talks.

Those officially restarted in late December, when America’s top military officer Gen. CQ Brown spoke to his Chinese counterpart. Weeks later, the two sides held another forum in Washington to discuss overall defense issues.

Earlier this week, Biden and Xi spoke over the phone in what a senior administration official described as a “check in.” According to a White House readout, they discussed issues related to Taiwan and the South China Sea, where Chinese forces routinely harass personnel from other countries.

Previewing the call, the official said that Defense Secretary Lloyd Austin would “soon” speak with his Chinese counterpart, Minister of Defense Admiral Dong Jun, who took his post late last year after his predecessor was removed without explanation.

Second, a forum focused on operational safety was surely fraught after two years of what the Pentagon called “unsafe and unprofessional” behavior from the Chinese military.

Last October, the Pentagon released images and videos of “reckless” intercepts by Chinese ships and planes. It said China had conducted 180 such intercepts — essentially steering too close to another ship or plane, like being cut off on the highway — since 2021.

Those have stopped since last November, at least around U.S. forces. China’s coast guard has harassed Filipino vessels around Second Thomas Shoal, a reef in the South China Sea where the Philippines have an outpost. The behavior has concerned defense officials in America, which has a mutual defense treaty with the Philippines.

“While we haven’t seen any unsafe interactions directed at U.S. forces in recent months we do continue to see the [People’s Republic of China] acting very dangerously and unlawfully against routine maritime operations,” said a senior defense official, briefing reporters ahead of the MMCA this week.

At the forum, the American and Chinese officials presented cases to each other of times they argued the other side acted dangerously — like traffic school for military operations. Both delegations — 18 Chinese and 18 U.S. representatives — then discussed the instances. The talks this week focused only on interactions between the two countries, but the defense official said that China’s behavior toward allies will come up in future discussions

“We’ll continue to press the PRC on those issues,” the official said.

These were difficult, even for the top Republican on the House Armed Services Committee. And he wasn’t the only one asking. Thornberry often traveled to Asia, where U.S. allies had the same questions. Thornberry didn’t know what to tell them.

“What do we have to offer?” he said.

For two years, Congress had asked the Pentagon for a report on how much extra money it needed for the Pacific region, but never received one. So Congress demanded one.

“The attitude was, tell us what you need and we’ll try to help,” Thornberry said during a recent interview. “Well, if they’re not going to tell us, then we’re going to tell them.”

The defense policy bill for fiscal 2021 — named for Thornberry, who was retiring — created the Pacific Deterrence Initiative, a new section of the defense budget. PDI had two goals: to push the Pentagon to spend more on the region and to make that money easier to track.

Four years later, PDI has done only one of those two things, according to experts. It has certainly made China-focused defense spending more transparent, but it hasn’t driven much new spending on the Pacific. In fact, the part of America’s defense budget created to help deter a war with China has no actual money.

“Your priorities are always better reflected in your budget rather than in your rhetoric,” Thornberry said.

Whether those two areas match up may be the most important question in American defense policy right now. The last three administrations have decided China is America’s top threat, and a rising one at that. But it’s less clear how much money it will cost to address it and who gets to decide — Congress, the Pentagon or military leaders in the Pacific?

“I don’t think that we are somehow dangerously short of funding for the Indo-Pacific, whether it’s PDI or not,” Rep. Ed Case, D-Hawaii, who sits on the House Appropriations Committee’s defense panel, told Defense News in February.

“We’re going in the right direction, but the question is: Are we going there fast enough?”

A second opinion

This was the question that led to PDI.

In 2021, the head of Indo-Pacific Command, Adm. Phil Davidson, was in Washington ahead of his planned retirement to testify before Congress. Davidson hadn’t appeared before the Senate Armed Services Committee in two years due to the coronavirus pandemic.

Early on, Sen. Roger Wicker, R-Miss., presented a set of charts during a short call and response. Wicker read a list projecting the number of Chinese and American weapons in the region by 2025, asking Davidson to check his numbers.

Three Chinese aircraft carriers to America’s one. Six Chinese amphibious assault ships to America’s two. Fifty-four Chinese combat ships to America’s six.

The admiral confirmed each one.

“Our conventional deterrent is actually eroding in the region,” Davidson said.

What concerned him most was not that Beijing had a more powerful military overall; it was a problem of speed and distance. Taiwan — which the Chinese government considers a rogue province and has threatened to take back by force — is about 100 miles from the mainland. It’s more than 5,000 miles from Hawaii, the headquarters of U.S. Indo-Pacific Command.

It would take three weeks for the U.S. to rush ships to the area from the West Coast, and around 17 days to do so from Alaska, Davidson estimated. If China launched a rapid invasion, it might overwhelm Taiwan before the U.S. had a chance to arrive.

“The important factor here is time,” he said.

Davidson’s answer, and that of many committee members, was to push America’s forces closer to Taiwan — the military version of a full-court press. But the U.S. didn’t yet have the necessary infrastructure in place. It would need to construct bases, airfields, radars and other buildings along the Pacific islands that arc around Taiwan.

And this would cost money — lots of money.

PDI was, at first, meant to be the source of that money. To understand why, it’s important to understand how the Pentagon writes its budget.

The process depends mostly on the military services — in particular the Army, Navy and Air Force. These services hold about four-fifths of defense spending each year and direct where that money goes.

Their incentives are different from those of the seven geographic combatant commands, who carry out America’s military goals around the world. Given their roles, the commands often focus on shorter-term needs. Hence, the services often don’t fund everything the combatant commands want.

To lawmakers, the gap seemed especially wide in the Pacific, where China has spent the last two decades upgrading its military.

Noticing this problem, lawmakers as far back as Sen. John McCain, R-Ariz., in 2017 wanted to fund Indo-Pacific Command’s goals with a separate account — something Thornberry also later supported.

It didn’t come together until three years later. In May 2020, the chair and ranking member of the Senate Armed Services Committee announced plans for a Pacific Deterrence Initiative that would reassure U.S. allies and improve its forces.

It had five goals: to improve presence, logistics, exercises, infrastructure and the strength of partners in the Pacific. The bill also added a voice to the budgeting process. Indo-Pacific Command would now give Congress an annual second opinion on America’s military needs in the region.

There was, however, a structural problem. The lawmakers that created PDI didn’t actually get any money for it. The policy bill named for Thornberry gave the Pentagon about $2 billion in authority for the effort but not permission to spend it. That would’ve required a signoff from the defense appropriations committees, who control the nation’s purse.

Those committees balk at initiatives like PDI, according to multiple congressional aides, because passing them makes it harder to write a defense budget — the same reason it’s harder to write a recipe when someone else decides your shopping list.

“The hope was for the following year that the appropriations and the budget would match,” said Kimberly Lehn, a former aide on the House Armed Services Committee who helped write the PDI legislation.

That didn’t happen, and by the time Davidson testified before Congress a year later, the initiative had become an accounting drill.

Think about it like a home improvement fund. If you want an upgrade — say, a nicer kitchen — then you have two options: Earn more money or spend less money elsewhere. Instead, PDI was, and still is, implemented in reverse. Each year, the Pentagon builds its budget and then reviews it to see what contributes to deterrence in the Pacific. It then labels that as PDI and highlights the total number in its budget request.

“It reflects their decisions, it doesn’t drive their decisions,” said Dustin Walker, a former Senate Armed Services Committee aide who helped write the PDI legislation and now works at the drone-maker Anduril.

‘Free chicken’

This was not the model PDI’s authors had in mind.

“It started basically as a straight copycat of [the] European Deterrence Initiative,” Walker said, referring to an effort that stemmed from Russia’s 2014 seizure and annexation of Ukraine’s Crimean Peninsula.

The Obama administration wanted to show commitment to NATO allies rattled by war on the continent. The government did so within months using what it originally dubbed the European Reassurance Initiative.

U.S. forces in Europe had declined for decades after the Soviet Union collapsed in the early 1990s — down to about 62,000 personnel by 2016. The smaller size made sense in Europe given there were fewer needs for America’s military muscle. But Russia’s invasion showed how far readiness had fallen, said Tod Wolters, the former head of U.S. European Command.

With the European Deterrence Initiative, the administration wanted to bulk up.

“We knew that we could not go back to Cold War status, with the number of forces that were going to be in the theater. So the question became: How do we make sure that we can rapidly deploy combat power?” said Al Viana, who works in European Command’s force structure and requirements office.

This became the focus of EDI, whose name changed in 2018 when it became clear Russia’s military activities in the region weren’t coming to an end. From 2015 to 2023, the U.S. spent $35 billion on the effort to empower allies and ensure its own forces were more agile. The second goal required funding to run more exercises, rotate more troops, improve infrastructure and store important equipment on the continent.

By the end of fiscal 2014, European Command had dissolved two heavy combat brigades. However, EDI helped rebuild those forces — deferring cuts to Air Force personnel, supporting a combat aviation brigade and making sure the Army had an armored brigade combat team rotating through the theater. In FY16, the Army’s forces in Europe conducted 26 total exercises per year. By 2023, that number was around 50.

In 2022, when Russia launched its full-scale invasion of Ukraine, the U.S. surged 20,000 extra personnel to Europe. That included an armored brigade combat team — including about 4,000 personnel, 90 tanks and more than 200 other vehicles — which arrived within a week from notification. Without those stocks already stored in the theater, it would’ve taken between four and six weeks, according to U.S. Army Europe and Africa.

“EDI is the place to go and see exactly what we’re doing,” Viana said.

The two initiatives’ different fates come almost entirely down to money. EDI was paid for through an account called overseas contingency operations, more commonly referred to as OCO (pronounced like “cocoa”). That fund started for the wars in Afghanistan and Iraq, supplementing the annual Pentagon budget.

“EDI was easy because you weren’t fighting with a service,” a senior defense official told Defense News, speaking on the condition of anonymity because the individual was not permitted to talk to the press. “It was free chicken.”

By the start of this decade, Congress had soured on OCO, partly because the Pentagon used it to dodge some budget cuts it faced in the 2010s. Lawmakers called it a slush fund.

This meant the Pacific Deterrence Initiative didn’t get any extra funding. The European counterpart transitioned away from supplemental money in fiscal 2022, and its funding amounts since then have steadily dropped.

The result is that many items Indo-Pacific Command lists in its annual report to Congress — the things the command says it needs to maintain its strength in the region — aren’t funded. So the command just resubmits those unfunded priorities on top of additional needs in the next year’s report. Hence, each year’s dollar amount snowballs.

When Davidson testified before Congress in 2021, his report listed $4.7 billion in requirements. This year, the number was $26.5 billion — $11 billion of which is unfunded. The bulk of that $11 billion would go to construction costs — much higher in the Pacific than on the U.S. homeland — and munitions.

“Our demand signal has been consistent,” George Ka’iliwai, the director of requirements and resources at the command, said in a March interview. “It is what it is because they are our requirements.”

The Pentagon has questioned some of Indo-Pacific Command’s priorities and whether they’re possible to carry out, even with funding. Infrastructure projects, for example, sometimes require negotiations with the host government as well as expensive labor and material costs. Only about a fifth of Indo-Pacific Command’s desired construction projects appear in the FY25 budget request, Ka’iliwai said.

Since its first report, the command has said the missile defense architecture of Guam — a U.S. territory crucial to the military’s Pacific posture — is its top goal. Others, such as infrastructure on Pacific islands or a secure network to communicate with allies, have also appeared each year.

PDI “doesn’t come close to scratching the itch,” the defense source said.

‘Trade-offs’

There are a few paths forward. One of them would see Congress give Indo-Pacific Command new money each year, like the account McCain sought in 2017.

There are lawmakers, such as Hawaii’s Case, who support that. But the appropriations committees don’t, and it’s unlikely that will change in the short term, according to multiple congressional aides.

Another option is in the Pentagon’s control. At the start of the budgeting process, department leaders could reserve money for the command’s priorities and build everything else around it. That would resemble how the deputy defense secretary is funding two signature initiatives: the Rapid Defense Experimentation Reserve, which helps accelerate prototyping; and Replicator, an effort to buy drones faster.

But these programs are loose change compared to what the command says it needs — hundreds of millions of dollars compared to more than $11 billion in unfunded priorities.

The way PDI works now is important, according to another senior defense official, who spoke on the condition of anonymity due to the sensitivity of the topic. The official argued that a different model for the initiative would make it more difficult for the Defense Department to plan and budget.

“The department has the best ability to find the right trade-offs,” the official said.

Points of view

Three years after Davidson testified, his successor stepped into a House hearing room this March.

“The risk is still high, and it is trending in the wrong direction,” Adm. John Aquilino noted in his opening statement, later adding that the Pacific is the most dangerous he’s ever seen it.

Sitting next to him, Ely Ratner, the assistant secretary of defense for Indo-Pacific security affairs, was more hopeful, citing higher spending and the administration’s “historic momentum” with allies in the region.

The higher spending is easier to see with PDI, which has charted large increases in funding over the last four years. Whether the initiative is working depends on whether you look at the Pacific through the eyes of Ratner or Aquilino. Both agree war isn’t imminent, but they’re split on whether deterrence is getting better or worse.

If it’s eroding, as Davidson argued in 2021, then PDI’s current model may not be enough. If the region is more stable, then the initiative looks better too.

The biggest misconception about PDI, according to the second defense official, is that the Pentagon doesn’t take it seriously.

“This is not a gradual slope of increase,” the official said of Pacific funding. “This is a significant and dramatic increase in investment, and we are more committed than ever.”

The PDI request for this year is $9.9 billion — more than $800 million over last year’s. But up until soon before the Pentagon released its FY25 budget request, it wasn’t, according to the first defense official and a congressional aide.

To show the Pentagon was focused on the threat from China, defense leaders tagged more items under the initiative at the last minute to raise its dollar figure, the first defense source and a congressional aide told Defense News. Among the late entries was the drone program Replicator.

At the recent March hearing, a member of Congress asked Ratner whether the $9.9 billion includes everything the Pentagon needs “for the PDI to be as effective as possible.”

“Congresswoman,” Ratner responded, “the PDI is simply an accounting mechanism.”

“We have assessed over the course of the last couple of months that Russia has almost completely reconstituted militarily,” said Deputy Secretary of State Kurt Campbell at an event hosted by the Center for a New American Security.

Campbell’s assessment seems to contradict those of the Pentagon and America’s allies in Europe.

At a meeting of countries that support Ukraine late last month, Secretary of Defense Lloyd Austin said that Russia had suffered more than 315,000 casualties during the war. With a drop in American aid, leading to ammunition shortages on Ukraine’s front lines, Russian forces have advanced. But those too have been costly, the Pentagon has said.

In an interview earlier this year, the chair of Lithuania’s national security committee estimated it would take Russia between five and seven years to reconstitute its forces for a full-scale war.

Still Moscow has surged defense spending since 2022 — up to 6% of national GDP in its 2024 budget. The rise is part of a larger effort by the Kremlin to move its economy, and in particular its defense industry, onto a wartime footing.

Part of its success comes from China’s support, along with that from North Korea and Iran. Both Campbell and another senior administration official, speaking with reporters this week on the condition of anonymity, said that China has helped its partner endure economic and military setbacks in the last two years.

“We’ve really seen the [People’s Republic of China] start to help to rebuild Russia’s defense industrial base, essentially backfilling the trade from European partners” that lapsed when Russia invaded, the official said.

President Joe Biden addressed this concern in a call with Chinese leader Xi Jinping Tuesday, according to a White House readout.

Moscow’s success has added pressure to the government in Kyiv, which this week lowered the draft age from 27 to 25 amid losses on the front lines. Ukraine is still hoping for a giant infusion of American aid still held up in Congress. House Speaker Mike Johnson has so far refused to call that national security supplemental for a vote, though he recently signaled one could come under certain conditions.

Without it, Ukraine’s armed forces will continue needing to ration ammunition and air defense on the front lines and around the country. Still, that doesn’t mean the front lines are verging on collapse, said Chairman of the Joint Chiefs of Staff CQ Brown.

“Does it make it more complicated, more challenging for the Ukrainians without the supplemental — yes,” said Brown at an event hosted last week by the Defense Writers Group. “But they’ve been able to defend fairly well.”

Under Secretary of Defense for Acquisition and Sustainment Bill LaPlante signed a memorandum establishing the Guam Defense Systems Joint Project Executive Office, which RCCTO will manage, Lt. Gen. Robert Rasch, said in a March 27 interview at the Association of the U.S. Army’s Global Force Symposium in Huntsville, Ala. It will consist of members from all of the services, he noted.

The office is already forming and fiscal 2024 money is being realigned to get it started, he said.

The Army last year was assigned to lead the acquisition and execution plan for the Guam architecture and the new office within RCCTO will focus on bringing the technology together to create a joint integrated air and missile defense fires capability to protect the strategic Pacific island.

“As we start bringing to bear defense of Guam Army systems, Navy systems and MDA systems, that sensing layer is going to thicken,” he explained. “And we think we have a lot to learn on how to assimilate or fuse that information from air defense perspective and that’s a really hard domain to get right. So if we can get it right there, [we] think that will scale very quickly to the other domains that don’t quite have the same latency [or] time requirements on it for them to execute their mission.”

Pentagon leaders, focused on China as a growing threat, say 2024 will be a key year for the Army to bolster defense around Guam. During this year, the service plans to have in place a foundational capability to help stave off a potential attack.

The Missile Defense Agency and the Army sought a combined $1.5 billion in FY24 budget to begin preparing the island by moving assets into place and integrating capabilities. The effort is a test for the Army, which decision-makers have at times overlooked amid the focus on air and naval power in the Indo-Pacific region.

Success in Guam could help cement the Army’s air and missile defense role in the region. The first wave of defenses will include radars, launchers, interceptors, and a command-and-control system.

The Army requested $638 million for FY24 for three Lower Tier Air and Missile Defense Sensors, multiple Patriot air defense systems, and an assortment of Mid-Range Capability missile launchers and Indirect Fire Protection Capability launchers. Additionally, the service plans to use the Northrop Grumman-made Integrated Battle Command System to connect the right sensors to the right shooters on the battlefield.

The Navy will provide technology and capability from its Aegis weapon system; the service holds jurisdiction over the sites where it will place the technology.

Additionally, FY24 funding requests are meant to cover the installation along the island’s periphery of four high-end, solid-state, mobile AN/TPY-6 radars, which are new sensors that use technology from the Long Range Discrimination Radar in Clear Space Force Base, Alaska.

“It’s the synchronizing of all of that at one point in time, or to arrive at one point in time, on Guam so you actually have a capability – not just delivering a radar to a location where there’s no power, there’s no place to put it, or we don’t have any maintenance setup for it,” Rasch said. “So a lot of our efforts, other than building this integrated layered capability, is making sure that all of the pieces and parts make a capability, not just a material thing.”

Chairman Mike Gallagher, R-Wis., who recently announced his imminent resignation from Congress, and Rep. Raja Krishnamoorthi, D-Ill., sent a letter asking Defense Secretary Lloyd Austin for updates on the mandatory assessment, highlighting one company’s operations in the U.S.

“The [People’s Republic of China’s] 14th five-year plan identifies dominance in biotechnology as critical to ‘strengthen [China’s] science and technological power’ and calls to deepen military-civil science and technology collaboration in the sector,” they wrote in a Friday letter to Austin. “Urgent action is needed to identify the [Chinese] biotechnology entities at the forefront of this work.”

The fiscal 2024 defense policy bill requires the Pentagon to assess whether any biotechnology companies belong on its list of Chinese military firms.

The assessment is due in June, but the letter asks the Pentagon to brief staffers from the House’s Committee on the Chinese Communist Party on the provision by May 1. Gallagher recently announced he will resign on April 19, with Rep. John Moolenaar, R-Mich., set to take his place as chairman.

Gallagher and Krishnamoorthi singled out six Chinese biotech firms that they believe warrant potential inclusion on the Pentagon’s list of Chinese military companies. The list includes Innomics, which has operated out of Massachusetts since at least 2010 as a subsidiary of China’s BGI Americas Corp. The other BGI subsidiary on the list is STOmics.

The four other Chinese biotech companies the letter cites are MGI Group, Origincell, Vazyme Biotech and Axibo.

Congress first mandated the Pentagon maintain a list of Chinese military companies in the FY21 defense policy bill. It requires the Defense Department to track companies “identified as a military civil-fusion contributor to the Chinese defense-industrial base” and “engaged in providing commercial services, manufacturing, producing or exporting.”

The list does not result in sanctions. However, it bans the Defense Department from buying goods or services from the designated Chinese military companies.

The department announced the creation of the Office of the Assistant Secretary of Defense for Cyber Policy on March 29, a little more than a week after it actually opened its doors. The organization was mandated by the fiscal 2023 National Defense Authorization Act.

“In standing up this office, the department is giving cyber the focus and attention that Congress intended,” acting Undersecretary of Defense for Policy Sasha Baker said in a statement.

President Joe Biden last month tapped Michael Sulmeyer to be the inaugural assistant secretary of defense for cyber policy. Sulmeyer currently serves as the U.S. Army’s principal cyber adviser. His nomination was referred to the Senate Armed Services Committee on March 21.

Ashley Manning will lead the office until Sulmeyer is confirmed by lawmakers, according to the Defense Department.

Responsibilities include developing and overseeing implementation of cyber policy and strategy; certifying the cyberspace operations budget and coordinating with Cyber Command; and crafting guidance for private-sector outreach.

The Defense Department requested $14.5 billion in cyber spending for FY25. The figure is about $1 billion more than the Biden administration’s previous ask. It is also up from FY23, when it sought $11.2 billion.

The Pentagon on March 28 made public its 2024 Defense Industrial Base Cybersecurity Strategy, proffering four goals and many more objectives. Among them are widespread adoption of cybersecurity best practices, preservation of supply chains critical to military manufacturing, and improved communication between public and private sectors.

“Our adversaries understand the strategic value of targeting the defense industrial base,” David McKeown, the deputy chief information officer for cybersecurity, told reporters at the Pentagon. “We have, departmentally, started paying a lot more attention to it and engaging with the companies.″

The Defense Department’s pool of contractors and related resources is under constant threat of online harassment and foreign influence. Both Russia and China are known to prod U.S. companies for their closely held designs.

The National Security Agency, FBI and other federal entities in October 2022 said hackers managed to inflitrate a company, sustain “persistent, long-term” access to its network and abscond with sensitive information. The victim went unnamed. Years prior, Chinese-sponsored cyberattacks breached a Navy contractor’s computers, jeopardizing info tied to work on an anti-ship missile, Defense News reported.

Biden picks Army’s Sulmeyer for Pentagon cyber policy post

Pentagon suppliers are considered critical infrastructure alongside water, food and energy facilities, health-care firms, and transportation systems. Attacks occur often, and attackers can dogpile on flaws that go ignored, according to McKeown.

“In this day and age, especially in the United States of America, everybody should believe the power of the hacker,” he said. “It’s been proven out numerous times.”

The cybersecurity strategy nests with the Defense Department’s higher-profile guidance: the 2022 National Defense Strategy, the 2023 National Cybersecurity Strategy and this year’s National Defense Industrial Strategy.

Publication comes weeks after the department introduced its fiscal 2025 budget blueprint, which included $14.5 billion for cyber activities. The figure is about $1 billion more than the Biden administration’s previous ask. It’s also up from FY23, when it sought $11.2 billion.

He spoke before a meeting with Israel’s Defense Minister, Yoav Gallant, during which Austin said Jerusalem needs to consider other options to a ground invasion of Rafah, where more than a million Palestinian civilians are sheltering.

But a senior defense official, speaking with reporters afterward on the condition of anonymity, wouldn’t say what those “alternatives” are.

The invasion of Gaza began in the north, as Israel sought to destroy the terrorist group Hamas, which killed more than 1,200 Israelis, mostly civilians, last October. The Israel Defense Forces have since pushed into Gaza City but failed to kill the group’s most senior leaders. Israel’s government has since been preparing to invade Rafah, a major city in Gaza’s south, where Hamas battalions have migrated.

Almost half of Gaza’s population has fled to Rafah since the war began. Many civilians have already escaped conflict more than once, the official said. An invasion would force them to do so again, and risk further civilian casualties. The Gaza Health Ministry estimates more than 32,000 Palestinians have died during the war, roughly two-thirds of whom are women and children.

Rafah sits near the Egyptian border and is the largest entry point for humanitarian support into Gaza. An invasion would risk Jerusalem’s relationship with Cairo, the official said, while also choking the flow of aid when it needs to widen, the official said. President Joe Biden said this month that the U.S. would build a pier on Gaza’s coast to allow in more assistance. Six ships with personnel will arrive within the next few weeks and start construction, the official said.

“The amount of humanitarian aid [in Gaza] is far too low,” Austin said in a short press conference.

Tuesday’s meeting follows a public spat between the U.S. and Israel earlier this week. Prime Minister Benjamin Netanyahu recalled a group of senior advisors who also planned to soon visit Washington, after the U.S. abstained from a non-binding UN resolution urging a ceasefire. America had previously vetoed such resolutions, though a spokesman for the National Security Council insisted on Monday that there was no change in U.S. policy.

Netanyahu this week also recalled Israel’s negotiators from Doha, Qatar, who were trying to make a deal for the release of hostages still held by Hamas.

Gallant nonetheless traveled with a list of weapons his country wants from Washington. The administration still supports such aid, which the American defense official said has “flowed more rapidly than ever” since last October, and isn’t weighing any restrictions on how Israel will use it.

Shortly before Gallant’s visit, Israel submitted assurances to the U.S. that it would comply with human rights laws as required under an executive memorandum Biden signed in February after growing pressure from Democrats in Congress. The memorandum references U.S. laws that cut off security assistance to military units that violate human rights or to countries that block U.S. humanitarian aid.

Former administration officials and many Democratic lawmakers say multiple administrations have not held Israel to these standards, despite credible reports of human rights abuses and the Israeli restrictions on aid trucks into Gaza.

“It’s hard to see how the Biden administration could with a straight face conclude that the Netanyahu government has provided credible and reliable assurances that it will facilitate and not arbitrarily restrict humanitarian assistance to Gaza when at this very moment they’re doing that,” Sen. Chris Van Hollen, D-Md., told Defense News last week. “Obtaining written assurances is only part of the requirement of [the memorandum], the other part is that they be deemed credible and reliable assurances.”

Under Biden’s memorandum, the Pentagon and State Department must assess Israel’s compliance with its human rights assurances in May, with noncompliance possibly resulting in the suspension of military aid as stipulated by existing U.S. laws.

The U.S. is instead trying to change Israel’s behavior in private. Gallant and Austin have spoken over the phone around 40 times, most of which came after last October. They spoke privately in more detail about alternatives to a ground invasion of Rafah, said the official — who wouldn’t explain further other than saying Israel would need to protect civilians before any fighting and also use precision strikes.

“This was the first of what I think will be quite a number of conversations,” the official said.

Correction: A previous version of this article misstated the number of Israeli civilians killed in the Oct. 7 attacks.

At the end of last year, the DOD made reliance on digital engineering official, with new guidance that requires the use of “digital engineering methodologies, technologies, and practices across the life cycle of defense acquisition programs, systems, and systems of systems to support research, engineering, and management activities.”

The reason for this guidance is clear, given the increasing demand to acquire weapons systems faster as well as the greater complexity behind current and emerging technologies.

For example, in the latest Block 4 upgrade for the F-35 fighter jet, 80% of the cost came from software changes and 20% from hardware. There is five times more software on the F-35 than on any previous fighter. Just to control the systems and surfaces to fly, the aircraft relies on about 2.5 million lines of code; the engine has nearly 1 million lines. This was a huge leap from previous generations, and future platforms and systems will only be more complex.

The DOD’s instructions also mandate the use of mission engineering, which adds another layer of modeling to get a clearer sense of performance of systems within an environment. For example, you might apply high-fidelity modeling of low Earth orbit, including radiation from the South Atlantic Anomaly, to better predict the true durability of your satellite’s design.

Many departments and organizations are working to respond to the new DOD guidance with various approaches to adopting software or building their own. Yet, satisfying the DOD’s instructions will come down to three steps:

1. Quickly digitalize processes or workflows that have not yet been converted.
2. Adopt mission engineering.
3. Connect models and data across disparate workstreams, tools and teams to create authoritative sources of truth.

Many of the organizations looking to adopt the DOD’s guidance are still in the first phase. How can organizations rapidly adapt to satisfy this guidance in the absence of clear industry standards, and without an expensive restructuring of their current processes and workflows? They should begin by implementing proven commercial software solutions that enable them to create open ecosystems for their nascent digital engineering environments.

Creating an open ecosystem relies on the enterprise-level adoption of software that possesses open application programming interfaces. To benefit from digital artifacts, digital threads, digital twins and other elements that the digital engineering ecosystem may provide, organizations need to ensure that the new can integrate with the old. Open APIs allow for this, with existing infrastructure connecting into a digital engineering environment, not brushed aside by one.

Building a digital engineering environment with an open ecosystem eliminates or substantially reduces reinvention of effective legacy tools and processes. It also enables organizations to adapt workflows in a way that keeps their human expertise fully engaged while making the most of the new technologies.

In the scramble to comply with the DOD’s instructions, defense organizations risk creating a sort of Wild West of digital engineering practices and standards. Instead, if organizations focus on adopting an open-ecosystem approach, the whole industry will be able to rally around specific best practices and standards, and each individual organization will be equipped to implement those practices and standards as they become formalized.

Something similar happened with protocols for routing data on what became the internet, when the open publication of interfaces led to agreed-upon standards.

This will preserve much of the technology that still works while remaining flexible as industry standards evolve and settle. Best of all, building an open ecosystem will achieve the vision the DOD seeks: an industry with the agility to respond to the quickening pace of adversarial competition.

As it has throughout its history, the DOD is challenging the defense community to rise to a new level of innovation and sophistication. The stakes are nothing less than our national security. We must answer the call.

Retired U.S. Air Force Brig. Gen. Steve Bleymaier is chief technology officer for aerospace and defense at software firm Ansys, where Kevin Flood is president of government initiatives. Bleymaier previously served as director of logistics, engineering and force protection with the service.

Sasha Baker’s departure will open a new gap in an office struggling to fill its top seats for almost a year. Colin Kahl, who the Senate narrowly confirmed to the position in 2021, left last summer. Since then, Baker has temporarily held the role.

Replacing her will be Amanda Dory, director of the Africa Center for Strategic Studies at the National Defense University and an alumna of the Pentagon policy office.

The White House nominated Derek Chollet, a high-ranking State Department official, to the top policy job in July 2023. Chollet testified before the Senate Armed Services Committee in late September, facing difficult questions about his role in the U.S. withdrawal from Afghanistan. The committee has not voted on his nomination.

“The sooner that confirmation can occur, the better,” Pentagon press secretary Gen. Pat Ryder told reporters this morning.

Ryder did not address why the nomination is stuck, instead referring reporters to Congress. The White House, as required by law, renominated Chollet at the start of 2024.

Meanwhile, the second-highest position in Pentagon policy will also soon go vacant. Last week the Senate committee voted for Melissa Dalton, who has filled the deputy role since Mara Karlin departed late last year, to be undersecretary of the Air Force.

A spokesperson for Baker did not say where she plans to move after leaving the Pentagon at the end of April.

More than 47 orders have already been awarded to contractors, and over 50 are “in the pipeline right now,” according to Defense Department Chief Information Officer John Sherman. The figures are up sharply from August, when officials said they were working with more than 13.

“In today’s environment … it is critical more than ever that we provide DOD personnel with secure and resilient software when and where they need it,” Sherman told the House’s Cyber, Information Technology and Innovation panel March 22. Exactly how many orders have been completed thus far was unclear.

The Defense Department in December 2022 tapped Amazon, Google, Microsoft and Oracle to supply digital services for the JWCC, itself the successor to the failed Joint Enterprise Defense Infrastructure venture, or JEDI. The JWCC is valued up to $9 billion over several years. The four companies compete for each order dished out, with each only guaranteed $100,000.

The cloud capability contract is considered the backbone of the Defense Department’s connect-everything-everywhere campaign dubbed Combined Joint All-Domain Command and Control. The CJADC2 concept envisions troops and their databases seamlessly linked across land, air, sea, space and cyber, and spanning unclassified, classified and top secret designations.

Pentagon won’t pause pursuit of AI, CIO Sherman says

“When I testified last year, the department was just beginning the enterprise cloud journey,” Sherman told lawmakers. “I’m happy to report significant and successful progress.”

Cloud is increasingly seen as a means to get the right data to the right people at the right time — a pillar of CJADC2. Sherman last year advised defense agencies, military services and other offices to prioritize JWCC, especially when inking deals involving the nation’s most sensitive information.

The guidance helps streamline cloud contracting and reduces “contract sprawl” across the Defense Department, Sherman said.

His directions for JWCC employment included carve outs for the National Reconnaissance Office, National Geospatial-Intelligence Agency, Defense Intelligence Agency and the National Security Agency. They rely on the intelligence community’s Commercial Cloud Enterprise, or C2E, which was awarded in 2020. It features the same vendors as JWCC, plus IBM.

The $825 billion bill will allow the Pentagon to launch the initiatives and begin the procurement of key weapons systems it had planned for this year. For more than five months, Congress had funded the Defense Department at FY23 levels via a series of stopgap measures, avoiding a government shutdown but hampering those initiatives and procurement plans.

“We made changes and decided on efforts that include countering China, developing next-generation weapons and investing in the quality of life of our service members,” House Appropriations Committee Chairwoman Kay Granger, R-Texas, said before the chamber’s vote. “I am proud to say this bill strengthens our national security and funds critical defense efforts.”

The House voted 286-134 to pass the bill as part of a broader appropriations package that adheres to spending caps imposed by last year’s debt ceiling deal. Granger, who is not running for reelection, announced shortly after the vote that she is stepping down as Appropriations chairwoman, anticipating another drawn-out budget process for FY25.

The Senate then passed the bipartisan spending package 74-24. President Joe Biden has committed to signing the bill.

The bill includes $33.5 billion to build eight ships and allocates funds for 86 F-35 and 24 F-15EX fighter jets as well as 15 KC-46A tankers. There’s also a combined $2.1 billion for the Army’s Long-Range Hypersonic Weapon and the Navy’s Conventional Prompt Strike hypersonic weapon system.

It also funds multiyear contracts to procure six critical munitions: the Naval Strike Missile, the Guided Multiple Launch Rocket System, the Patriot Advanced Capability-3, the Long Range Anti-Ship Missile, the Joint Air-to-Surface Standoff Missile and the Advanced Medium-Range Air-to-Air Missile.

Multiyear contracts are usually reserved for big-ticket purchases like ships and aircraft, but the Pentagon hopes using them for munitions will ensure demand stability, which in turn encourages defense contractors to ramp up production capacity. The American defense-industrial base has struggled to quickly replenish the billions of dollars worth of munitions drawn down from U.S. stockpiles for Ukraine.

The bill also includes $300 million for the Ukraine Security Assistance Initiative, which allows the Pentagon to place contracts for new equipment to send Kyiv. That amount is less than the $60 billion in security and economic support for Kyiv provided in the Senate’s foreign aid bill.

The Senate passed the aid bill for Ukraine, Israel and Taiwan in a 70-29 vote in February, but House Speaker Mike Johnson, R-La., has refused to put it to a floor vote amid opposition from former President Donald Trump, the presumptive Republican presidential nominee.

Johnson has also faced anger from the right flank of his caucus for working with Democrats to fund the government. Similar grievances prompted a small group of Republicans to instigate the ouster of his predecessor, former Speaker Kevin McCarthy, R-Calif., triggering three weeks of House dysfunction as the caucus struggled to select a new leader.

Rep. Marjorie Taylor Greene, R-Ga., filed a similar measure to oust Johnson shortly after the House passed the spending package. But it’s unclear whether she or anyone else in the caucus will actually trigger a vote to remove Johnson when Congress returns in April after a two-week recess. Putting a Ukraine aid package on the floor would likely anger Greene and other right-wing lawmakers.

The role of assistant secretary of defense for cyber policy was established by the fiscal 2023 National Defense Authorization Act.

Sulmeyer in the past served as a senior director of cyber policy at the National Security Council and as a senior adviser at Cyber Command. He was also the director of the cybersecurity project at the Harvard Kennedy School’s Belfer Center for Science and International Affairs.

The move comes a little more than a week after the Defense Department rolled out its fiscal 2025 budget blueprint, which included $14.5 billion for cyber activities. The figure is about $1 billion more than the Biden administration’s previous ask. It is also up from FY23, when it sought $11.2 billion.

U.S. Rep. Mike Gallagher, a Wisconsin Republican, last year said the Senate was ready to “rapidly confirm” a nominee.

Gallagher leads the House’s Cyber, Information Technology and Innovation panel.

This run of prosperity, however, cannot lead us to complacency. The past two years of heightened global unrest are evidence that the end of the Cold War did not mark the end of great power competition. Russia’s invasion of Ukraine, global aggression by the People’s Republic of China, the brutality of Hamas and other Iranian proxies, and the unending antagonism of North Korea are reminders of this sobering truth.

In the face of these challenges, American military strength is needed now more than ever. But we cannot rely on our legacy arsenal to retain military advantage and deter these threats. We must prepare for a modern fight to preserve America’s superiority. The fiscal 2024 Defense Appropriations Act funds these preparations.

The approximately $824.5 billion provided in the bill, which accounts for a $27 billion increase over the FY23 enacted level, is directed to the highest national defense priorities, in particular countering the People’s Republic of China, prioritizing innovation at the Pentagon, and investing in quality-of-life initiatives for service members and their families.

To deter Chinese aggression in the Indo-Pacific region, the bill maxes out the production of critical munitions, doubles security cooperation funding for Taiwan, and prioritizes the delivery of defense articles and services to Taiwan. It rejects the Biden administration’s inadequate procurement and divestment suggestions, and instead funds eight battle ships while retaining four others; increases investments in fifth- and sixth-generation aircraft; and provides over $66 billion in Indo-Pacific-relevant capabilities. These decisions demonstrate America’s capacity and intent to stand with Taiwan as well as our allies and partners in the region.

Today’s Department of Defense is an overburdened and antiquated bureaucracy confronted with the realities of the 21st century. The bill recognizes that the military will only achieve the modernization it needs by tapping into America’s entrepreneurial spirit, and it provides an unprecedented investment in innovation.

Included in that investment is $1 billion for the Defense Innovation Unit and military services to accelerate acquisition and fielding as well as $300 million for the successful Accelerate the Procurement and Fielding of Innovative Technologies program, which will work to overcome the infamous valley of death.

The most cutting-edge military technologies still rely on the ingenuity of American service members. At the core of our military might are the men and women who serve the nation so bravely. The bill recognizes that and honors them, funding the largest increase in basic military pay in more than 20 years (5.2%) and providing $123 million for recruiting and retention incentives and service member cost-of-living adjustments.

The bill also resources across-the-board investments in our military families with funding to address out-of-pocket family costs such as child care; to expand spouse employment opportunities; and to conduct medical research on areas of significance to the military community.

Undoubtedly, the bill invests in a more modern, innovative and ready fighting force. In the midst of unparalleled threats to the United States and its interests, this sends a strong message that we are prepared to meet and defeat any adversary.

Rep. Kay Granger, R-Texas, chairs the House Appropriations Committee, where Rep. Ken Calvert, R-Calif., chairs the Defense Subcommittee.

Congress is expected to begin votes on the $825 billion defense spending bill on Friday; Pentagon funding via a stopgap measure is slated to expire at the end of that same day. The bipartisan bill adheres to the spending caps imposed by last year’s debt ceiling deal. It funds the procurement of eight battle ships and dozens of new aircraft, provides a small amount of Ukraine military aid and offers multiyear procurement for six critical munitions.

“As chairman of the House Appropriations defense subcommittee, I have prioritized five areas that are reflected in this act: countering China and staying ahead of our adversaries; prioritizing innovation of military superiority, achieving a more efficient and effective Pentagon; enhancing the military’s role in countering efforts and supporting our servicemembers and their families,” Rep. Ken Calvert, R-Calif., said in a statement.

The bill includes $33.5 billion to build eight ships and allocates funds for 86 F-35 and 24 F-15 EX fighter jets as well as 15 KC-46A tankers. There’s also a combined $2.1 billion for the Army’s Long-Range Hypersonic Weapon and the Navy’s Conventional Prompt Strike hypersonic weapons system.

The bill retains $300 million for the Ukraine Security Assistance Initiative, which allows the Pentagon to place contracts for equipment to send Kyiv. House Republican leaders had initially removed the $300 million in Ukraine aid amid opposition from the right flank of their caucus when they narrowly passed their version of the defense spending bill 218-210 in September.

But even with the Ukraine Security Assistance Initiative funds back in the bill, the $300 million is far less than the $60 billion in security and economic support for Kyiv provided in the Senate’s foreign aid bill. The Senate passed the aid bill for Ukraine, Israel and Taiwan 70-29 in February but House Speaker Mike Johnson, R-La., has so far refused to put it on the floor amid opposition from former President Donald Trump, the presumptive Republican presidential nominee.

Separately, the compromise defense spending bill includes funding for multiyear contracts to procure six critical munitions: the Naval Strike Missile, the Guided Multiple Launch Rocket System, the PATRIOT Advanced Capability-3, the Long-Range Anti-Ship Missile, the Joint Air-to-Surface Standoff Missile and the Advanced Medium-Range Air-to-Air Missile.

Multiyear contracts are usually reserved for big-ticket purchases like ships and aircraft, but the Pentagon hopes using them for munitions will ensure demand stability to encourage defense contractors to ramp up production capacity. Defense appropriators granted the Pentagon’s request to use multiyear contracts for all but one munition: the Standard Missile-6. The defense-industrial base has struggled to quickly replenish the billions of dollars worth of munitions drawn down from U.S. stockpiles for Ukraine.

The FY24 defense policy bill, which Congress passed in December, authorizes multiyear contracts for six additional munitions outside the Pentagon’s request. But the FY24 defense spending bill does not fund those additional multiyear contracts.

War games hosted by the House China Committee in April found the U.S. would rapidly run out of munitions — including the SM-6, Naval Strike Missile and Long-Range Anti-Ship Missile — in a war with Beijing in the Pacific. That committee endorsed multiyear munitions buys as part of a series of 10 bipartisan recommendations on Taiwan it drafted in May.

Additionally, the bill provides an $800 million boost to the Pentagon’s Defense Innovation Unit, for a total budget of $983 million in FY24. It also provides $200 million for Replicator, the Pentagon’s effort to buy and field thousands of drones by next August.

Finally, the legislation cuts funding for the Defense Department civilian workforce by $1 billion.

The compromise bill eliminates many of the amendments Republicans introduced when they passed their version of the bill in September. That includes an amendment from Rep. Marjorie Taylor-Greene, R-Ga., that would have reduced Defense Secretary Lloyd Austin’s salary to $1.

The bill also drops a priority a proposal championed by Calvert that would have moved Mexico from U.S. Northern Command to Southern Command. Calvert argued last year this would “prioritize combatting the trafficking of fentanyl by Mexican drug cartels.”

Although Mexico will remain in Northern Command, the bill includes a $50 million increase to counter illicit fentanyl and synthetic opioids.

Congress just released the final text of its long-delayed fiscal year 2024 Pentagon spending bill. In it, the Replicator program would get $200 million.

The number is less than half of the $500 million Deputy Secretary of Defense Kathleen Hicks predicted earlier this month for her trademark program, which is focused on countering China. But it would square with the amount requested in a reprogramming package sent to Congress in early February. That request, in which the Pentagon asks lawmakers to allow it to move money around for new priorities, was reportedly $300 million.

This would be a two-track funding approach, somewhat in line with Hicks’ comments at an event hosted by the Ronald Reagan Institute this Wednesday. Hicks framed appropriations and reprogramming as two paths, but only “alternative” ones and not intended to work together.

“We need one of those two pathways to move forward,” she said, noting further funding for Replicator — $500 million — is already written into the Pentagon’s FY25 budget request.

At the same event, Army acquisition chief Doug Bush said that the first systems bought in Replicator mainly come from his service. Multiple outlets reported earlier this year that the AeroVironment Switchblade 600 is among those.

Some in Congress are still frustrated at the lack of transparency from the Pentagon on the initiative. One Senate aide, speaking to Defense News on the condition of anonymity, said that Pentagon officials briefed on Replicator earlier this month, mentioning specific systems for the first time.

“That’ll have to get better over the next six to eight months,” the aide said. “We need to get more into the details.”

The new bill addresses this shortage. It would require Hicks to brief lawmakers within 60 days of its passage. That briefing would need information on how much funding Replicator will require through the rest of the decade, how its systems will be sustained and how the Pentagon plans to use them.

In addition, the bill mandates a report within 90 days that would show how the Pentagon is leaning on commercial-style technology, examples of Replicator-type systems from each service and instances when such systems have become programs of record. This report will be unclassified but contain a classified portion.

The budget introduced this week arrives halfway through the fiscal year. If passed, the Pentagon will have just six months to spend it, potentially risking some money not being obligated after the crash effort.

“It’s a show me culture,” Hicks said of Pentagon innovation. “Show me you’ll put your reputation on the line to make change happen, and then maybe it’ll make change happen.”

This story has been updated with further details from the legislation and comments from a Congressional aide.

House and Senate appropriators released a compromise version of the fiscal 2024 defense spending bill March 21 that would grow DIU’s funding to $983 million — up from the $191 million enacted the prior year across multiple accounts that support the unit.

“The Department of Defense continues to identify innovation and expediting capability development as top priorities,” lawmakers said in a report accompanying the bill. “This agreement supports these priorities and takes steps to better enable innovation efforts to expeditiously translate into fielded capabilities.”

The House is expected to vote on the bill on Friday.

DIU was created in 2015 to draw more commercial technology into the Pentagon. Its role has grown from focusing on partnerships and proving the value that Silicon Valley startups can bring to national security to now leading efforts within the Defense Department to push that technology to the field in larger quantities.

The organization has struggled since its inception to get buy-in from DOD leaders as well as the funding to match. That started to shift last year when Defense Secretary Lloyd Austin elevated DIU to report directly to his office and named former Apple executive Doug Beck to lead the unit.

Beck now sits on the Deputy’s Innovation Steering Group, which oversees DOD efforts to rapidly field technology to address high-need operational problems. He also chairs a separate Defense Innovation Working Group and DIU is playing a key role in Replicator an effort to field thousands of drones in two years and develop a process for quickly delivering capabilities to military users.

Congress has recognized the organization’s growing importance. The House Appropriations Defense Subcommittee, led by Chairman Ken Calvert, R-Calif., proposed the creation of a “hedge portfolio” comprised of innovative, commercially available systems like satellites, drones and agile communication nodes. His subcommittee approved $1 billion for the effort and gave management authority to DIU.

The compromise bill replaces that language and slightly reduces the funding it called for. It also eliminates a proposal that would have required each military service to designate a Non-Traditional Innovation Fielding Enterprise lead who would be responsible for working with commercial industry partners and shepherding projects within the service.

The final bill does require each service secretary to identify an organization with “proven competence in partnering with commercial entities” and develop plans and processes for how that office will leverage DOD-wide innovation initiatives.

It also calls on DIU to provide details on the additional staffing, infrastructure and authorities it will need to execute its new role. Lawmakers also want information about the organization’s fiscal 2024 programs and an assessment from the organization of the military services’ participation in the Defense Innovation Working Group.

To this last point, the bill emphasizes the importance of collaboration among the Office of the Secretary of Defense and the services as well as the delegation of decision-making authority to the organizations that are best equipped to make sure capability can get to users in the field.

“The pursuit of innovation should enhance, not undermine, sound financial, acquisition, technical and management best practices essential to delivering capabilities to warfighters on time and on budget,” the bill states. “This requires efficient collaboration between requirements owners, acquisition officials, comptroller organizations and other stakeholders.”

Doug Bush, assistant secretary of the Army for acquisition, logistics and technology, told an audience at the Ronald Reagan Institute’s National Security Innovation Base Summit in Washington that the Pentagon selected a system the service proposed for the initial tranche of Replicator — an effort to field thousands of drones and other autonomous systems over a two-year period.

“We’re the biggest participant in terms of what’s actually going to come out of round one in terms of quantity,” he said March 20.

The Pentagon hasn’t revealed which systems it has selected for Replicator and Bush refused to discuss details about the Army effort he referenced. DefenseScoop reported in February that the service proposed AeroVironment’s Switchblade 600 for the effort.

Air Force Vice Chief Gen. James Slife, who spoke on a panel with Bush, said the service has ideas for future Replicator proposal rounds, but those efforts weren’t ready for the first tranche.

“The Air Force has got several compelling programs in the pipeline that could be considered,” he said. “They’re not quite as technologically mature as some of the army programs that are going to be in round one.”

Deputy Defense Secretary Kathleen Hicks unveiled Replicator last August, and the department has since requested $1 billion from Congress to execute the program fiscal 2024 and 2025. While the initial focus is on autonomy, the effort’s broader goal is for Replicator to become a repeatable process the Pentagon can use to push a range of capabilities to military users.

To do this, the department is funneling money toward existing programs to either help them move faster or ramp up production quantities and is selecting new efforts proposed by the military services.

A March 19 report from the Reagan Institute praised the department’s pursuit of Replicator and recommended full funding for the effort, but highlighted broader concerns with the Pentagon’s ability to translate U.S. innovation into national security capabilities.

“There has been a lot of activity in the last year as it relates to national security innovation, as it relates to harnessing and capturing that innovation for our national security goals,” Rachel Hoff, policy director at the Reagan Institute, told reporters ahead of the report’s release. “That activity has not necessarily translated into progress.”

Mac Thornberry, former chairman of the House Armed Services Committee and now a member of the Pentagon’s Defense Innovation Board, said the high-level leadership Hicks has put behind Replicator is a sign of progress within the Pentagon.

“To me, the most amazing thing about Replicator is the deputy secretary put it on her shoulders to say, ‘I’m responsible for this,’” he said during the conference. “It’s like a pass-fail on herself. And that sort of accountability is exactly the sort of thing we need to change the culture, to take more risks.”