Ash Carter launches DIUx 2.0 with new leadership, Boston office

The Defense Innovation Unit Experimental is getting a facelift following criticism from lawmakers, Defense Secretary Ash Carter said Tuesday of the Pentagon’s Silicon Valley outreach effort, opening a new office in Boston and adding a new chief who will report directly to him. 

Calling the new iteration of the program DIUx 2.0, Carter said it is a “move from the Silicon Valley playbook” — an attempt to be “agile … throwing out what doesn’t work,” not even a year since launching the effort last August to connect DOD with commercial innovators out West. 

“Doing business with the tech industry forces DOD to look ourselves in the mirror, which is healthy for any organization,” he said in a speech at DIUx’s Moffett Airfield headquarters in Mountain View, California. “In this case, it’s helped us not only identify successes but also our shortcomings, both in how we engage with tech companies here and in the tools we use to accelerate the uptake of technology in the department.”

Under the new plan, DIUx will take a more nationwide focus, immediately launching an office in Boston, with more offices in the works. Carter’s speech Wednesday marked the fourth time he’s visited Silicon Valley since April 2015, when he became the first Defense secretary to make the trip in 20 years. 

This move appears to address concerns from the House Armed Services Committee’s Subcommittee for Emerging Threats and Capabilities, whose members, during the markup for the 2017 National Defense Authorizations Act, suggested DIUx focused too much on one geographical region. The subcommittee proposed capping DIUx’s funding at 80 percent of what the NDAA authorizes in 2017 until Carter provides a report to Congress on the use of prior funds to establish the team. The subcommittee’s language made it into the full committee’s bill. 

Carter said Wednesday he requested $30 million in new funding for “non-traditional companies” for 2017 DOD budget.  

Another part of the shakeup: Carter announced DIUx 2.0 will feature new leadership — what he referred to as an “operating system upgrade.” He established a partnership-style leadership structure, making it “as flat as any company” in Silicon Valley — who will report directly to him.

“I can’t afford to have everybody do that,” Carter said, “but this is to signify the importance I attach to this mission and also to the importance of speedy decision-making.” 

Raj Shah — a former senior director of strategy at Palo Alto Networks, special assistant in the Office of the Secretary of Defense and F-16 pilot in the Air Force — will lead DIUx 2.0 as managing partner, replacing former DIUx head George Duchak, who Carter relocated to the DOD Research and Engineering Enterprise.

DIUx 2.0 will also feature a military reserve leadership unit that “can provide unique value in this field … given the fact that many of these patriots are tech industry leaders when they’re not on duty for us,” Carter said. He appointed Naval Reserve Cmdr. Doug Beck, who also serves Apple’s vice president for the Americas and Northeast Asia, to head the reserve team.

In the overhauled engagement, Carter said DIUx will place more emphasis on working closer to the speed of innovative commercial technology firms. 

“DIUx will be a testbed for new kinds of contracting with startup firms. They’ll work quickly to execute time-sensitive acquisition programs, and they’ll move at the speed of business — we know how fast companies run here and in other tech hubs around the country, and we expect DIUx 2.0 to run alongside of them.”

Shah agreed: “The fast, iterative technology development that we all in this room take for granted must be applied to our most important national security issues.”

Shah, who has served on both sides of the DOD-Silicon Valley partnership, acknowledged the continuing struggle to match business and development timelines between the two beasts, a theme seen on the civilian side of the federal government as well. 

“We have our work cut out for us,” he said.

Congress has its doubts that technology will be a game-changer in the fight against adversaries like ISIS — the House Armed Services Committee said in the proposed 2017 NDAA that programs like DIUx and investing in commercial technology “will not provide an enduring warfighting advantage over near-peer adversaries.” But Carter maintains that DIUx and emerging technologies will play a role in maintaining America’s security and defense prowess.

“Technology is a critical part of everything we do,” Carter said. “And it’s critical to addressing every strategic challenge facing us today. And that’s why DIUx matters. It has to do with our protection and our security — creating a world where our fellow citizens can go to school, dream their dreams, live their lives, and one day give their children a better future.”  

Contact the reporter on this story via email at Billy.Mitchell@FedScoop.com or follow him on Twitter @BillyMitchell89. Subscribe to the Daily Scoop to get all the federal IT news you need in your inbox every morning at fdscp.com/sign-me-on.