Is This What the Pentagon’s ‘Third Offset’ Has Been Missing All Along?

Have changes to the U.S. industrial and technological sector posed new challenges for defense procurement?

Is This What the Pentagon’s ‘Third Offset’ Has Been Missing All Along?
Credit: U.S. Navy photo by Petty Officer 3rd Class Kyle Goldberg/Released

Two weeks ago, the Center for New American Security released a new report on the future of U.S. defense innovation. Titled Future Foundry, the report introduces the concept of “optionality,” an interpretation of the Third Offset; the idea that the United States can leverage technological advantage to offset the rise of China and the military re-emergence of Russia.

The authors (Ben Fitzgerald, Alexandra Sander, and Jacqueline Parziale) argue that changes to the industrial/technological sector have created new problems and opportunities for acquisition. The balance of research and development funding no longer favors the Defense Department, as the private sector (not to mention foreign countries) supply an increasing proportion of the overall pie.

DoD should respond to this new strategic and technological environment (perhaps better described as “environments”) by de-emphasizing monocapability; the heavy investment in one project or capability at the expense of alternatives. Instead of having a lengthy competition of the sort that weeded out the F-23 in favor of the F-22, or the F-32 in favor of the F-35, DoD should facilitate the development of multiple programs with overlapping and potentially complementary capabilities. DoD could then tack in a particular direction as strategic and technological problems and opportunities shifted.

The idea is that phenomena like the “Century” series of fighters — jet fighters between the F-100 Super Saber and the F-110 Phantom II — have more features than bugs. The Century series resulted in seven different fighters (depending on whether we include the F-110, which became the F-4), each with a unique set of capabilities. Some of these fighters worked out; others did not. Some performed well in unanticipated situations; the F-101, designed as an interceptor, became a fine recon aircraft, and the F-105 a fine medium bomber. The F-102 failed, but the F-106 and other aircraft quickly picked up the slack. The F-103, F-107, and F-108 failed at or before the prototype stage. Having this variety of aircraft gave the United States the ability to meet a multitude of different strategic and technological challenges, whereas exclusive concentration on the multi-role F-35 leaves few options.

The report argues that DoD currently has few good tools for managing such an approach. Intolerant of risk, it struggles to let projects fail, while at the same time lacking the agility to support projects that show great promise. In part this is by design; DoD prefers monocapability projects in order to reduce the logistical confusion and expense of having multiple systems on the front lines. In part, however, it has grown out of a long and complex series of interactions between DoD, the services, Congress, and the defense industry that have left all four risk averse and out of step. The authors include a useful timeline of efforts at procurement reform since the 1980s. They also includes a useful visualization of the four kinds of techno-industrial systems the U.S. military has to procure; military unique systems with constrained competition (aircraft carriers), military unique systems with viable competition (jet fighters), military adapted commercial technology, and pure commercial technology.

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The “optionality” concept doesn’t solve every problem with U.S. defense procurement, but then it isn’t supposed to. It does provide a useful foundation for discussion of how DoD might change a system that everyone agrees has failed to evolve with strategic and technological change. In a forthcoming column, I discuss some of the international implications of an “optionality” strategy, and point out some potential caveats to the underlying logic.