A REVIEW OF THE TECHNOLOGY REINVESTMENT PROJECT PIPS-99-1 30 JANUARY 1999 POTOMAC INSTITUTE FOR POLICY STUDIES 1600 WILSON BOULEVARD, SUITE 1200 ARLINGTON, VA 22209 A P O T O M A C INSTITUTE FOR P O L I C Y S T U D I E S R EPORT : PIPS-99-1 A REVIEW OF THE TECHNOLOGY REINVESTMENT PROJECT REVIEW TEAM: DR. JAMES J. RICHARDSON, PIPS, STUDY DIRECTOR MR. JOHN BOSMA, PIPS MR. SVEN ROOSILD, PIPS CONSULTANT TRP HISTORIAN: MS DIANE LARRIVA, PIPS 30 JANUARY 1999 POTOMAC INSTITUTE FOR POLICY STUDIES 1600 WILSON BOULEVARD, SUITE 1200 ARLINGTON, VA 22209 TABLE OF CONTENTS Executive Summary I. Introduction II. The TRP Review Project III. Some Aggregated (Program-Level) Conclusions and Lessons Learned IV. Recommendations A Review of the Technology Reinvestment Project I. Introduction and History II. The TRP Review Project III. Conclusions and Lessons Learned IV. Recommendations Annex A. List of Common Acronyms and Definitions Annex B. A Brief History of the TRP Annex C. TRP Military Need Categories Annex D. Synopses of Case Studies ii Preface This is the final report of a study conducted by the Potomac Institute for Policy Studies (the Institute) under the sponsorship of the Defense Advanced Research Projects Agency (DARPA) and the Office of the Director of Defense Research and Engineering (ODDRE). The Potomac Institute for Policy Studies is a not-for-profit organization dedicated to the development and support of non-partisan analysis of technology and technology policy. The Institute has conducted studies that provide insight into the impact of new technologies and processes on our society, the proper relationship between government and industry in meeting future needs, and the state of the U.S. industrial base. We would like to thank the sponsors of this review project, particularly Dr. Lee Buchanan, then Deputy Director of DARPA, and Mr. John Jennings and Dr. Steven Wax, past Managers of the Technology Reinvestment Project (TRP) Office, for their support and insight. We would also like to thank Mr. Dan Petonito, of the ODDRE for allowing us to continue the study under the Dual Use Science and Technology Program (DUS&T). We are especially grateful for the time contributed by industry participants, DARPA program managers (PMs), and Service agents. Their generosity in sharing their valuable experience is responsible for whatever wisdom is to be found in the ensuing pages of this report. Finally, our thanks to Ms. Mary Roko, who helped immensely with our database. Views expressed are our own, however, and do not necessarily reflect the opinions of any of the contributors mentioned. We believe this study is an honest look at the TRP, sufficient to identify winning management techniques and products that are currently benefiting the military and commercial sectors, or which soon will do so. It is important to note that this study has been on-going for some time. It is therefore inevitable that progress has occurred in many of the TRP projects beyond what is documented in this report. Furthermore, there is no question that a more intense look at the projects highlighted in this report would yield additional insight, but we feel that the report can stand on its own in offering important commentary on a remarkable program. iii Executive Summary I. Introduction The Technology Reinvestment Project (TRP) began in FY 1992.1 At close to $1B, it was one of the largest commercial investment programs ever undertaken by the Department of Defense (DoD).2 This initiative was managed by the Defense Advanced Research Projects Agency (DARPA), with heavy participation by all Military Services and other government departments and agencies. Through three solicitations held in FY 1993, 1994, and 1995, the TRP sponsored 1333 dual use technology development projects. Many are still in progress. There will be no new starts under the TRP, but some contracts will continue for another year or more, and success or failure of many projects may not be evident for over five years. The TRP also sponsored projects in two areas besides the Technology Development area studied here. They were Technology Deployment and Manufacturing Education and Training (MET). Both were funded at fairly low levels.4 The TRP can be viewed with respect to the areas of military need it addresses. These categories of need are: military mobility and deployment; C4I; battlefield sensors; casualty treatment; electronics design and manufacturing; mechanical systems and materials; and weapons, survivability and other. An explanation of how each was served by TRP projects is offered in Annex C. As the TRP ends, new programs, such as the Dual Use Science and Technology (DUS&T) Program, Commercial Operations and Support Savings Initiative (COSSI), and Commercial Technology Insertion Program (CTIP) are expanding and proliferating DoD’s commercial investment strategies. Like the TRP, these programs have strengths and weaknesses, successes and failures, each of which holds important lessons for the Department. 1 For a more detailed discussion of TRP’s history, see Chapter I and Annex B of this report. 2 Annex A offers a list of acronyms. 3 Two of these projects were terminated prior to beginning this study. Out of the remaining 131, 113 projects were examined and are reported on in this document. The remaining 18 projects were not included because of resource limitations, or because data was difficult to find due to the unavailability of government or industry project managers (often, the projects had shifted to new project managers, or even new companies, because of mergers or takeovers). 4 While Technology Development projects received approximately $820M, those performed under Technology Deployment received around $230M and $60M under MET. See, A Historical Summary of the Technology Reinvestment Project’s Technology Development Program (PIPS-93- 6), Potomac Institute for Policy Studies, 31 October 1996, (1993, 1994 Projects). iv II. The TRP Review Project The TRP has had its share of supporters and detractors, but until now there has been no formal attempt to determine how well the program has fared against an objective set of criteria. The Potomac Institute for Policy Studies (the Institute), formed a Review Team to accomplish this by identifying, measuring, and evaluating critical program characteristics. We, the Review Team, also authored this report. Specific goals of the review were to: 1. Document TRP History 2. Provide the status of each TRP Project 3. Document TRP project successes and failures 4. Provide metrics that will address requirements emerging from the Government Performance and Results Act (GPRA)5 5. Develop conclusions and lessons learned at both the project-level and the overall TRP program-level, which will aid in developing education and training materials for use in planning and implementing future DoD commercial investment programs, such as DUS&T and COSSI We employed a six-step assessment process. The process was initiated by choosing the TRP objectives to be assessed and then determining how to measure success or failure in meeting those objectives (see Table ES-1). Project-level metrics were developed and a case study was written for each project (these are synopsized in Annex D). After being reviewed by the entire team, each case study was returned to the consortium leader to ensure that no company-sensitive or proprietary data was included. When all case studies were completed, successes and failures were identified and the statistics collected were aggregated to the program-level. Subsidiary questions were used to forecast the likelihood of success of immature products and to clarify metrics values. We used case studies as illustrative examples to reinforce the statistics and conclusions presented (see Chapter III of the report). 5 The Government Performance and Results Act of 1993 (Public Law 103-62) requires the collection and reporting of metrics at all levels of government activity. v TABLE ES-1. TRP PROGRAM-LEVEL GOALS AND METRICS ASSESSED TRP METRICS METRIC DESCRIPTION OBJECTIVES 1. Demonstrate the efficacy Military/Defense This metric is used in the assessment of the of dual use technology Utility6 military or defense value of the TRP’s development for the DoD output. Quantifiable performance and cost specifications were derived from the original proposals, military or civil market requirements, state-of-the-art performance of the technology being pursued or from other credible sources. Technology Transition Transition into a Military Service demands (to the military) the commitment of Service funds to insert or continue development of the product or technology. Successful transition can occur at any level of acquisition. Commercial Viability The basic metric is simple: products resulting from the project are being sold commercially. 2. Develop and demonstrate Process Metrics This metric measures management process innovative management effectiveness. We addressed major aspects of procedures TRP’s business practices that are different from normal contracts under Federal Acquisition Regulations (FAR). III. Some Aggregated (Program-Level) Conclusions and Lessons Learned The TRP was an extraordinary program from many perspectives. Not only did DARPA pioneer a new mode of development called dual use, but the Agency also created innovative management tools to make it work. These tools included the use of cost share, agreements tailored to projects, consortia, flexibility on intellectual property rights (IPR) and foreign participation, and perhaps most importantly, immense empowerment of project managers (PMs), both government and industry. Most of those empowered managers performed exceedingly well, working hard to accommodate commercial interests, while maintaining military utility.7 As a result, DARPA truly contributed a new way of doing business. The extent of that contribution is evidenced by DoD’s wholesale adoption of TRP’s methods and tools. 6 The term ―defense‖ was added to include application to non-DoD defense activities, such as some of the work done at the National Laboratories. 7 It is important to mention that project management under the TRP was a lean operation.