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After Hagel Exit, Innovation Drives Expected to Continue at Pentagon

WASHINGTON — In the last major address he delivered as defense secretary — just nine days before President Barack Obama announced his resignation — Chuck Hagel focused on two initiatives that may come, if successful, to define his brief tenure.

While neither initiative was his idea, analysts give Hagel credit for empowering his deputies to move ahead with their plans to reform a postwar DoD looking for new ways to operate.

The Defense Innovation Initiative — also known as the “third offset” — which was the main subject of the Nov. 15 speech, was actually the brainchild of Deputy Defense Secretary Bob Work. But Hagel nevertheless “deserves credit for being secure enough to create top cover for Bob to go and execute his ideas,” said Ben FitzGerald, director of the Technology and National Security Program at Center for a New American Security (CNAS).

CNAS is Work’s former home where he began to formulate the ideas that would become the third offset strategy.

Not only did Hagel use what he likely knew to be his last speech in office to tout the initiative, but he also spent much of his previous major address at a September defense conference in Newport, Rhode Island, toeing a similar line, pushing the importance of his staff’s work with the defense industry to design and develop leap-ahead technologies in order to counter the threats posed by peer competitors like China and Russia.

The third offset program is envisioned as a multi-administration effort to encourage rapid innovation in the defense sector in the fields of robotics, autonomy, long-range strike and big data. And its ambitions demand that the Pentagon find ways to work with the commercial tech sector in order to gain from the rapid advancements that have been made there; leaps in capability that have left many in the defense sector trying to catch up.

“I think it’s going to be critically important for the next secretary of defense to allow his or her deputy to actually be the deputy secretary and do this kind of work,” FitzGerald noted.

Over the past several months, Work and chief weapons buyer Frank Kendall have unveiled other reform programs that aim to bring Pentagon research and development and acquisition programs that are mired — as some critics contend — in Cold War modes of operating, into the 21st century.

Chief among them is the Better Buying Power 3.0 effort — spearheaded by Kendall — which builds upon its two previous iterations by aiming to share some of the research and development burdens with the defense industry and allies, while also pushing for more rapid prototyping efforts.

Hagel has pushed these initiatives without taking credit for them, analysts said.

“He made the case in those speeches that these things are important,” said FitzGerald, adding that Hagel’s recent speeches had the effect of telling the larger defense community that “Frank Kendall and Bob Work are my guys and have my full support. So when they’re speaking, they’re using my voice. Pay attention to what they’re saying. I think there was some leadership there.”

Like previous offset strategies in the 1950s and 1970s, the idea for this third offset would span several administrations, while continuously looking ahead for the next breakthrough technology or capability.

“This isn’t your 1970s offset strategy,” said Bill Greenwalt, a visiting fellow at the American Enterprise Institute and former deputy undersecretary of defense for industrial policy.

“If we think through this project in terms of the second offset strategy in the 1970s, it will be a failure” since that strategy took over a decade for its goals to be realized.

“We can’t think in 15-year innovation cycles like we did then. We have to think in terms of what is needed in the next 15 months,” he said.

While Hagel will soon be gone, his team has already set the conditions for potential reform, and now it’s up to the next secretary and Congress to have their say.

“If they do that right, these will be investments and initiatives that can run through multiple administrations,” FitzGerald continued.

“This shouldn’t be seen as political. This is about military innovation and power projection and wise investments, which one hopes are not partisan issues.”

Greenwalt agreed that for the offset and Better Buying Power strategies to be successful, “the new secretary will really have to buy in to this, because the Pentagon is very, very comfortable with the old Cold War acquisition process, and very comfortable with the practically privatized arsenals that have been created in the industrial base,” he said.

While the last several defense secretaries were focused on wartime issues and rapid acquisition, they paid little attention to the traditional acquisition system and the need for reforms there.

In that sense, Greenwalt said, “I have to give Secretary Hagel some credit for focusing on this in the last several months of his tenure. We haven’t had this discussion on innovation in defense market since the Rumsfeld transformation strategy before 9/11. This is a positive thing.”

Other initiatives that Hagel has championed also remain up in the air as the department waits for the Obama administration to name a new nominee.

The big ones are the reductions in headquarters staff and in the staff of the secretary’s office, along with a December 2013 initiative that called for the DoD to work with allies in the Arabian Gulf on better integration of its members’ missile defense capabilities.

It also remains to be seen what fingerprints Hagel was able to leave on the fiscal 2016 Pentagon budget, the only one in which he was able to shepherd through from beginning to (almost) end, since final drafts are still being passed back and forth between the White House and the Pentagon.