As the Defense Acquisition Program Administration is running a "rapid demonstration project" to quickly field weapons systems with new technologies, the contractors that joined in 2022 are failing to pick up speed because they are not subject to the revised rules that took effect the following year.
The Defense Acquisition Program Administration skipped "test and evaluation" to speed up the 2023 rapid demonstration project, but 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 it conflicts with a Ministry of National Defense directive, making a solution unlikely anytime soon.
On top of that, while the revised directive created a rule allowing the military to sign negotiated contracts with rapid demonstration contractors, the companies that participated in 2022 face an unavoidable delay to fielding because there is no provision on how to conclude mass-production contracts.
According to the defense industry on the 17th, of the 11 prototypes selected for the 2022 rapid demonstration project, only one—the "quadruped robot for counterterrorism operations"—is currently drafting a basic project execution strategy after the military's requirements decision. The lightweight 105 mm self-propelled howitzer went through various procedures and the military raised a requirement, but the Joint Chiefs of Staff (JCS) has formed an Integrated Concept Team (ICT) to once again review the feasibility of the weapons systems.
Only four products, including the two above, have received a military "approval" decision. For the AI thermal scope for sniper rifles, the military is preparing to raise a requirement. In addition, one product each received "disapproval" and "partial approval," and five other products are still in pilot operation.
◇ The "test and evaluation" phase before mass production was skipped, but not applied to 2022 contractors
Under the standards before the related rules were revised in Sep. 2023, once selected as a rapid demonstration project contractor, a company produced a prototype after research and development, the military conducted pilot operations of the prototype, and then decided approval or disapproval. If approved, the military reviewed whether to raise a requirement, and if a requirement was decided, the process was to proceed to mass production after test and evaluation.
However, with the addition of Article 36-2 of the Ministry of National Defense directive on defense capability development tasks in Sep. 2023, the rules changed so that contractors do not have to conduct pilot evaluations before mass production. The provision states that "the results of a performance verification test may replace test and evaluation."
Despite having received approval decisions from the military, the defense industry argues that 2022 applicants should be relieved of the burden of undergoing pilot evaluations. They say they already built prototypes for delivery for the military's pilot operations and received approval, yet are forced into duplicate investment by having to build prototypes again.
Defense companies argued that replacement of test and evaluation is possible based on Article 45 of the Defense Acquisition Program Act, but the military authorities reportedly did not accept this. The provision stipulates that, when necessary for the production, research, or prototype production of defense articles, they may be provided by lend or lending free of charge. Companies claimed this article provides the legal basis for the government to borrow existing prototypes from companies and use them for test and evaluation, and demanded replacement of test and evaluation. However, the military authorities are said to have rejected it, saying, "This 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 for a clear revision," adding, "The 2022 rapid demonstration projects still underway will also have to undergo test and evaluation again after pilot operations end, and the additional test and evaluation will continue to delay the fielding schedule."
◇ Contract method for 2022 contractors also in limbo… "Fielding delayed"
Even if the test and evaluation issue is resolved, another hurdle remains: the method of concluding mass-production contracts. For rapid demonstration project contractors selected after Sep. 2023, once the military decides on a requirement, they can sign a negotiated contract. But for earlier contractors, it is unclear whether to use a negotiated contract or to issue a new notice as in a general weapons acquisition program.
A defense industry official said, "In the case of the 2022 rapid demonstration project, there was no provision on whether to sign a negotiated contract after pilot operation, but in Sep. 2023, a rule was created stating 'do so by negotiated contract,'" adding, "For 2022 contractors, it is full of questions as to whether they must issue another notice like a general weapons program."
As a result, exports are also being hampered. Some products reportedly drew inquiries from overseas countries, but deals did not materialize. In exports, the key is whether there is "fielding by the home military," which has not yet happened.
An official at a small and mid-sized defense company said, "For weapons systems whose technology level is similar to overseas products, operation by the home military is a guarantee check," adding, "Measures to resolve the ambiguity of each regulation 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 DAPA official said, "As we advance the projects, we will work closely with the requirements services and the Joint Chiefs of Staff (JCS) to ensure the ongoing projects are recognized for military utility and linked to requirements."