Undersecretary of Defense for Research & Engineering Heidi Shyu meets with Maj. Grover Smith of the Indiana National Guard during Technology Readiness Experimentation (T-REX) 2023 at Camp Atterbury, Ind. (DoD photo)

WASHINGTON – Hours before the Pentagon rolls out its budget request for 2025, with the 2024 budget still in the limbo on Capitol Hill, the Pentagon’s research & engineering chief emphasized how fiscal dysfunction makes it harder to compete with America’s “adversary” — which she made clear meant, above all others, China.

“Working closely with the Joint Staff and the COCOMs and all the services, we figured out what are the joint warfighting capabilities we need in a highly contested fight,” under secretary Heidi Shyu told the AFCEA TechNet Emergence conference this morning.

“You can imagine where that fight could be,” the Taipei-born Shyu said. She went on to tout an hour-long, classified meeting with new INDOPACOM chief Adm. Sam Paparo, who’s called for cutting-edge AI, and to list needed capabilities from ship-launched drones to unmanned warships to mine-hunting mini-subs and more that would be particularly relevant to a war in the Taiwan Strait.

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To fund those urgently needed technologies and get from prototype to production quickly as possible, Shyu’s boss, Deputy Secretary Kathleen Hicks, announced a new Rapid Defense Experimentation Reserve (RDER, pronounced “raider”) in 2021. Since then, the Pentagon’s own ponderous processes, like the Program Objective Memorandum (POM), and political gridlock on Capitol Hill, especially repeated Continuing Resolutions (CRs) in lieu of timely funding, have slowed what was meant to be a fast track to fielding, Shyu lamented.

“We started RDER experimentation last year,” Shyu said. “Remember the POM’s a two-year process, [so] we only got money last year — after the CR!”

Once the system finally disgorged the funding, RDER was able to deploy prototypes of 30 different pieces of technology to National Guard units around the country, a series of experiments called T-REX (Technology Readiness Experimentation). Tech that got good feedback from the Guard will graduate to field-tests in full-scale military exercises like Northern Edge in Alaska and Valiant Shield in Guam. Whatever does well in that demanding context will be pushed into production, Shyu said, using mechanisms such as APFIT (Accelerate the Procurement and Fielding of Innovative Technologies) — if she can shake loose the cash.

But with Congress passing proper appropriations often halfway through the fiscal year, Shyu said, she has to be cautious spending on even high-priority projects. That means not even spending the money she already has on hand from Congress, she explained, because she doesn’t know when, if, or how much that pot will be refilled. With APFIT, for instance, she said, “this year because of the CR, I only used the first $50 million, because I don’t know if my budget is $50 million, $100 million, $150 million.”

Even once Congress does provide the funds, there’s often not time to spend it responsibly in the remaining months of the fiscal year. Labs can only experiment so fast, combat units can only do so many field experiments, factories can only work so many shifts. That often forces the Pentagon comptroller to take back the money Shyu’s been allocated, she said, starting the whole multi-year process over again.

“On an annual basis, we have a CR, half the year’s gone,” Shyu said. “You can’t possibly spend it all, so they’re going to take take half your budget and give it back to you in two years time.”

What reform would Shyu love to see in the whole budgeting process, across the Congress and the Pentagon?

“I would love to have flexible money. Like, if I see something really great that some company’s developing, I want to just go buy it, instead of [having to say], ‘I love this! Wait two years’ [for funding],” she said. “That drives me nuts.”

“Our adversary doesn’t have the same constraints,” she warned.