WASHINGTON — Two of the Pentagon’s innovation offices have been granted special authorities to help speed the hiring of staff and awarding of contracts, in a move that could allow the groups to more quickly flow commercial technology into the department.

The authorities for the Defense Innovation Unit Experimental (DIUx) and Strategic Capabilities Office (SCO) were approved by former Deputy Secretary of Defense Bob Work on July 14, just weeks before he retired from service.

The needs of those two organizations “can only be met by being able to hire the most technologically advanced and experience individuals who can work and communicate with their counterparts in industry and build new relationships with technology companies where the Department has experience challenges,” Work wrote in his memo announcing the changes.

The two offices are critical parts of a broader effort, spearheaded by former Defense Secretary Ash Carter, to have greater outreach to the commercial technology sector. DIUx is specifically charged with talking and working with the tech sector in Silicon Valley, Boston and Austin, while SCO is charged with taking existing technologies and developing new capabilities for their use.

Secretary of Defense Jim Mattis, who is visiting DIUx as part of a west coast swing, certainly appears to be supportive of the office, telling reporters Wednesday that “I enthusiastically embrace it, and I'm grateful that Secretary Carter had the foresight to put something in place to anchor the Department of Defense out there.”

The personnel authorities come in two forms. The first is Work renewing, for another 18 month term, language in Section 1105(b) of the FY17 National Defense Authorization Act (NDAA) which allows DIUx and SCO to hire staff for up to 18 months in a noncompetitive manner. The idea is that the government organizations will not be able to compete with the commercial tech sector for talent if they have to go through the usual process.

Second, Work ordered the department to draft a legislative proposal for inclusion in the 2018 NDAA that would give both groups the ability to rapidly hire for long-term positions. This was based on positions granted to DARPA, the Pentagon’s long-running future technology hub, in what Chris Kirchhoff, one of DIUx’s coordinating partners, said was a conscious effort to mirror the group’s success.

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Kirchhoff notes that DARPA can hire people in as little time as one day, a “heck of an advantage” for DIUx to mirror given its competition with the commercial technology sector for talent. And while it may take “a couple months” before DIUx has its HR team staffed up and ready to hire at that rate, when that happens, it will be able to compete directly with the tech sector for talent.

Another authority Kirchhoff highlighted is the right to execute on contracts up to $5 million, particularly for operations and maintenance, without needing to go through the usual wringer of Pentagon procurement. In comparison, he notes, DIUx spent its first few months dealing with a $3,000 limit on its purchasing cards, with anything more needing to go through the main department’s purchasing system.

Like the new hiring capabilities, this authority comes with setting up a new contracting officer who will be located with the main DIUx office. The same is true for SCO, according to Work’s memo.

“We can let contracts much quicker. We often need to buy supplies in a hurry on the test range and you can’t wait six weeks for [the usual procurement process] to put in place to buy supplies, so we’re really excited,” Kirchhoff said.

Other authorities for the offices include the ability to publish advertisements, notices and proposals on their own, as well as authority to approve conference expenses for up to $500,000 without needing to go through traditional channels to get approved. Again, both of those are particularly vital for organizations that are outreaching to the tech sector, where new ideas and companies often pop up, develop and disappear in the time it might take the Pentagon to investigate them.

While much of the activity is focused on making it easier to attract outside talent, DIUx is also looking at ways to improve how it attracts internal talent — specifically from the uniformed military. As a result, DIUx is pushing to have permanently funded military positions count for the Joint Duty Assignment List, a key factor for military officers looking to advance in their careers.

“We’re a new organization; we often receive incredibly talented members from services who are on a particular career track with milestones they must hit,” Kirchhoff explained. “We’re delighted that we’re in the process of having our military billets be declared joint; … we are, of course, a deeply joint organization working on a deeply joint mission set, so it’s very logical.”

All of the authorities, minus the one that requires support in the FY18 NDAA, are now in place. Given the vocal support from the Hill for both DIUx and SCO, it is likely such language will be included in the final version of the defense bill.


About Aaron Mehta

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

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