The inability to translate saved time to increased funding is the single most limiting factor for the DoD in acquisition…
The regulatory isolation of the “colors of money” by which designated funding is controlled and utilized is what ultimately limits the opportunities for many products in the defense industry. The large regulatory walls between Personnel, Facilities, O&M, Procurement, and RDT&E funding types drives competition to isolate solely within each funding type. Offering a product that saves 2x time/manpower, but costs 25% more than the existing capability, is not a monetary savings that can be realized in any tangible way by the funding organization.
Defense businesses need to understand, first and foremost, the competition is between cost not impact. Needs drive requirements, requirements drive acquisition, and acquisition is a simple mathematical evaluation of capability vs cost. Once your product performs to a defined threshold, it’s far more important that it is the cheapest offering, rather than more capable but also more expensive product. There is a reason the stereotype exists of the “lowest bidder” contractor in the defense industry.
No where is this pain felt more acutely than in software acquisition. With a large amount of baseline capabilities existing already (the ubiquitous O365 suite, Adobe Acrobat, and other similar tools), the ability to achieve requirement thresholds is met for most tasks in most career fields (“we fight the war on PowerPoint and Excel”). It’s only the remaining highly specialized tasks that require/justify specialized software. So trying to sell a commercial SaaS product for typical office functions is almost a non-starter, especially if it’s not cheaper AND does everything the current capability can do. Remember your target customers are almost always not paying themselves for those baseline capabilities, so their threshold of cost is zero, and any new capability cost above zero has to be realized through the reduction or replacement of other unrelated capabilities from their budget. You can see how being graded on price first in a free software environment is challenging to say the least. It doesn’t matter that the capability sucks (looking at you DTS), if it’s free to use when any other option costs money you don’t have or can’t give up.
The separation of funding authority from capability impact is just hugely isolating and unique to the DoD, hence many commercial market products just don’t sell in the defense market.
