As the Defense Acquisition Program Administration is running a "rapid demonstration project" to quickly field weapons systems with new technology, the contractors that joined in 2022 have been unable to pick up speed because they are not covered by the rules revised the following year.
The reason is that while the Defense Acquisition Program Administration omitted "test and evaluation" to speed up the 2023 rapid demonstration project, the 2022 participants cannot benefit from that change. Some argue that test and evaluation can be replaced under Article 45 of the Defense Acquisition Program Act, but others say that too conflicts with the Ministry of National Defense directive, making a solution unlikely anytime soon.
On top of that, the revised directive created a rule allowing the military to enter into private contracts with rapid demonstration contractors, but the 2022 participants have no stipulated process for concluding mass-production contracts, inevitably requiring additional time to field the systems.
According to the defense industry on the 17th, of the 11 prototypes selected for the 2022 rapid demonstration project, only one — the "multi-legged walking robot for counterterrorism operations" — is currently drafting a basic business promotion strategy after the military's requirements decision. Although the lightweight 105 mm self-propelled howitzer went through various procedures and the military raised a requirement, the Joint Chiefs of Staff (JCS) has formed an integrated concept team (ICT) to again review the validity of the weapons systems.
Only four products, including the two above, have received the military's "acknowledgment" decision. For the sniper rifle artificial intelligence (AI) thermal sight, the military is preparing to raise a requirement. In addition, one product each received "not acknowledged" and "partially acknowledged," and five other products are still under trial operation.
◇ The "test and evaluation" phase before mass production was omitted, but not for 2022 contractors
Under the standards before the related rules were revised in Sep. 2023, once selected as a rapid demonstration project contractor, a company would produce a prototype through research and development, the military would conduct a trial operation of the prototype, and then decide acknowledgment or non-acknowledgment. If acknowledged, the military would review whether to raise a requirement, and if a requirement was decided, the process called for test and evaluation before entering mass production.
However, with the addition of Article 59, Paragraph 5 of the Ministry of National Defense directive on defense force development tasks in Sep. 2023, the rules changed to allow contractors to skip test and evaluation before mass production. The provision states that a "performance verification test result can substitute for test and evaluation."
The defense industry argues that even though they received acknowledgment decisions from the military, the 2022 applicants should be relieved of the burden of undergoing test and evaluation. They say they already produced prototypes for delivery for the military's trial operation and, despite receiving acknowledgment, must again make prototypes, resulting in duplicate investment.
Defense companies claimed that substitution for test and evaluation is possible based on Article 45 of the Defense Acquisition Program Act, but the military authorities reportedly did not accept that. The provision stipulates that, when necessary for the production, research, or prototype production of defense materials, they may be provided on a gratuitous lend or on lending. Companies argued that this clause provides grounds for the government to borrow their existing prototypes for use in test and evaluation and demanded a substitution for test and evaluation. However, the military authorities reportedly rejected the request, saying, "It is not a provision that can be used for the rapid demonstration project."
A defense company official said, "There is room for dispute over the interpretation of Article 45 of the Defense Acquisition Program Act, so there is a need to clearly amend it," adding, "For the 2022 rapid demonstration projects that are still underway, once trial operations are over, they must undergo test and evaluation again, and additional test and evaluation will continue to delay fielding schedules."
The Defense Acquisition Program Administration emphasized that the rules were revised to strengthen the level of test and evaluation to ensure the introduction of complete weapons systems. A Defense Acquisition Program Administration official said, "Before the revision, projects were subject to test and evaluation at the level of 'confirming military utility,' while after the revision, the evaluation level was strengthened to a 'performance verification test,'" adding, "Projects started before the revision did not conduct performance verification tests, so they cannot substitute for procurement test and evaluation."
◇ Contracting method for 2022 contractors also in limbo… "Fielding delays"
Even if the test and evaluation issue is resolved, another hurdle remains: the contracting method. Under Article 36-2 of the Ministry of National Defense directive revised in Sep. 2023, rapid demonstration project contractors selected after the revision may conclude purchase contracts through private contracts after the project. But for earlier contractors, there is no such provision, causing confusion, according to the industry.
An industry source said, "For the 2022 rapid demonstration project, there was no provision on whether to use private contracts after trial operation, but in Sep. 2023 a rule was created that says it 'can be done by private contract,'" adding, "For 2022 contractors, we are left wondering whether we must issue another public notice like general weapons programs."
The Defense Acquisition Program Administration said, "Even for projects before the rule change, if the military acknowledges utility and equipment standardization is completed, purchase contracts may be concluded through private contracts under the Enforcement Decree of the National Contract Act."
Given these circumstances, exports are also being hampered. Some products reportedly drew inquiries from overseas, but deals did not materialize. The key to exports is whether the system is fielded by the home military, which has not happened yet.
An official at a small and mid-sized defense company said, "For weapons systems whose technology level is similar to that overseas, operation by the home military is a guarantee check," adding, "Measures to resolve the ambiguities in each rule need to be prepared quickly."
The Defense Acquisition Program Administration is aware of the conflicts among various rules and is continuing reviews to improve them. A Defense Acquisition Program Administration official said, "As we push the projects, we will work closely with the requirements services and the JCS to ensure that ongoing projects are acknowledged for military utility and linked to requirements," adding, "We will continue to pursue related projects so that the performance needed for military operation is sufficiently secured, while faithfully reflecting the intent of the system."