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Military Alters Process for Industry IR&D Funding

February 22, 2012
By Rita Boland, SIGNAL Online Exclusive
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The U.S. Defense Department has released a new rule in which major contractors--defined as organizations whose covered segments allocated a total of more than $11 million in independent research and development (IR&D) and bid and proposal (B&P) costs to covered contracts during the preceding fiscal year--must enter project information into the Defense Innovation Marketplace for costs to be allowable. This regulation aims to create better communication between what the military needs and where companies invest their funding.

Currently, only groups reimbursed for IR&D projects in the past year will receive a PIN for use on the marketplace website, which also includes a variety of open-access resources for private industry. In the future, other companies, including small businesses, should be able to use the site to draw attention to their efforts. Ron Kurjanowicz, the senior advisor to the assistant secretary of defense for research and engineering in the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics, explains that through the online offering, companies will be able to showcase their projects to more military personnel including those in science and technology and in acquisitions. As travel and other budgets continue to shrink, industry can use the site to connect with decision makers at reduced costs.

The rule also will help eliminate the variety of methods industry uses to present its IR&D projects to the government. With the standards created by the website, all the information can be added through a form and then accessed in a uniform format. When developing the new rule, Kurjanowicz's office spoke to a number of stakeholder firms to ensure correct implementation. "What we're creating through the marketplace are new opportunities to share information between industry and government," Kurjanowicz says. "We're working together to make sure it's a win-win for both industry and government."

Though the regulation coincides time wise with the announcement of the Defense Department's budget and its included reductions compared to previous years, Kurjanowicz states, "It's not connected." The IR&D project has been underway for 18 months as part of the Better Buying Power initiative. However, the defense strategic guidance released earlier this year will suggest research areas to explore further, he believes.

Kurjanowicz adds that the new rule will help ensure that the military is aware of innovation opportunities available in the industrial base. Despite this closer connection, he emphasizes that the word "independent" remains crucial and that the Defense Department does not want to direct where companies invest their research and development money. He adds that government relies on the private sector to find creative solutions to challenges.

The initial benchmark of success for the reporting regulation will be an improvement in the communication between industry and government. After that, officials will evaluate if they receive proposals with reasonable technical maturity after they release requests, which has been a problem in the past. "If we're successful, then what we'll see in the future is more robust solutions," Kurjanowicz says. The military will try to share as much information as possible with industry, and as more companies begin entering their information on the website, the Defense Department will be able to target its messages more accurately.

Kurjanowicz expects that in the future the various military branches and agencies will begin to take ownership of the marketplace. He says the ultimate objective of his office is to hand off the effort and then return to focusing strictly on policy issues.