U.S. Navy seeks great access to industry intellectual property

Dan Parsons, Defense Daily
26 May 2015

The Navy needs greater access to industry intellectual property (IP) if it is to achieve the rate of technological refresh desired to keep those systems relevant, the service's director of transformation said on May 25.
In an interview that aired Sunday, Nick Guertin told Defense News that the Navy needs to establish open architecture systems that can be maintained in house while the software and other systems "under the hood" are continuously updated through competitive bids.
"I'm really focused on new contracts," Guertin said. "How do we get innovation opportunities into the new business relationships we are striking with industry so they can give us that environment where we can put in new products regardless of where they come from. We want to exercise our competitive alternatives regardless of source."
Guertin said that Navy efforts to develop unmanned aviation platforms and the consolidated afloat networks and enterprise systems (CANES) were exemplary of the open-architecture acquisition approach that need to be extended to other programs.
CANES will consolidate five stovepiped legacy computing and communication systems aboard Navy ships to a single interoperable system that will regularly undergo technological refresh. Each semiannual tech update will be competitive and separate from the incumbent hardware supplier and includes relatively extensive government access to industry IP. Even the initial work to install the information technology systems aboard ships is being shared by a total of seven contractors. 
Northrop Grumman [NOC] won the original $638 million contract to build and install the first phase of CANES systems in 2012. 
Northrop Grumman, along with General Dynamics [GD], BAE Systems, Global Technical Systems and Serco, in 2014 were awarded a total $2.5 billion in full deployment production contracts.
In an unusual move the Navy in January awarded one contract each to CGI Federal and DRS Laurel Technologies, for one system apiece and judged them eligible to compete for future work. The latter companies' bids were originally
rejected and rather than repeat the competition following a protest to the Government Accountability Office, the Navy decided to include both contractors. 
While the Navy has made efforts to purchase open architecture systems for decades, it has so far worked for specific programs like submarine systems, but has not been adopted by programs service-wide.
"It's been a maturing process to figure out how we get more and more programs to adopt those practices. We have been looking at how do we change our architectures, how do we change our business relationships, how do we change our cultures. All three of those are the dimensions of what it takes to transform our buying practices to be more open and get more competition and more innovation to the fleet faster.
Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall has made government access to IP a central, if controversial, theme of his Better Buying Power 3.0 acquisition plan. It seeks to allow the Defense Department a say in industry internal research and development decisions earlier in the development process.
Guertin said it was not the Pentagon's intention to infringe on contractors' IP or profitability. Echoing recent comments by Kendall, Guertin said that establishing open architectures and negotiating IP rights during early system development rather than trying to "break into" existing systems, is key.
"First we need to send a strong message to industry that we are not going to overreach on IP," he said. "But there are certain IP elements that we're just going to have to have-interfaces; form, fit and function information, what does it take to maintain it in the field.
"That's in our best interest to make sure that when you put sailors in harm's way on aircraft or ships or on the ground that we can take care of them wherever they are with organic capability. But, when it comes to the innovation space, what's going on under the hood, we're going to send a strong message to the non-defense and even the defense suppliers that it's OK to innovate, it's OK to invest and on the other side, we're going to leave you alone. But we're not going to do that blindly. We're going to make sure we can replace you competitively on your merits." 
Defense Daily will host Open Architecture Summit 2015, focusing entirely on OA's importance to the Department of Defense on Nov. 4 at the Grand Hyatt in Washington, D.C.

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