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New Software Rules: The Digital Transformation – Part 9

Bottom Line Up Front: A whole new way of buying software is in the works by the Pentagon reformers.

Software Purchasing Redefined

Ellen Lord continues her article on how she is reforming acquisition at the Department of Defense. So what’s up next? An entirely new way of handling software acquisitions:

In collaboration with DoD’s Comptroller, we are also exploring the creation of a single, consolidated, multiple-year “color of money” specifically for software.

In the recently passed FY2021 NDAA, a pilot program was approved to fund select existing programs under a single appropriation called “Budget Activity 8.” If this approach proves to support more effective and efficient delivery of digital capability with software, our goal is to create a new title of funding on par with Research, Development, Testing, and Evaluation; Operations and Maintenance; or Military Construction.

This is a long road, but one we are intent on evaluating and fully implementing.

What Is “FY2021 NDAA”?

That’s the Fiscal Year 2021 National Defense Authorization Act (here’s a link), otherwise known as the 2021 Defense Act.

As the Defense Science Board and the Defense Innovation Board recommended, buying software is an entirely different animal than buying helicopters or combat boots, so it needs its own separate way of acquisition, one that is friendly to the modern development methods of Silicon Valley. The problem is, such a thing does not exist. Software has to be bought just like combat boots.

Until now.

The Pilot Program

The 2021 Defense Budget authorizes a pilot program called “Budget Activity 8” to test a variety of approaches and strategies to see how best to run this new way of buying software. With these tests, the Pentagon will eventually refine an entirely new way to buy software.

So What’s The Big Deal?

Any company that creates any sort of software for the Pentagon – and that’s a trainload of Defense contractors – is going to have its line of business completely thrown out the window. All new rules, all new methods. The entire industry is about to get overhauled.

Your software company doesn’t sell stuff to the Pentagon? Good news, they are about to open the gates wide open for you!