Shyu Wants New Funding To Bridge ‘Valley of Death'

Heidi Shyu
Credit: U.S. Government

The Pentagon’s new director of research and engineering wants more money for small businesses to mature technology to avoid the vaunted “valley of death” in acquisition and is proposing new leaders within her office to move faster on developing software and lowering sustainment costs.

Heidi Shyu, the under secretary of defense for research and engineering, said the Pentagon is proposing more tranches of funding for small business innovation research (SBIR) contracts because the current system does not effectively help companies mature their technologies before a full contract. 

The current SBIR process includes a first tranche contract covering about $50,000 to start a project and a second tranche of about $1.5 million for two years to continue development. 

“A lot of time that technology is not maturing enough to transition to a program of record,” Shyu said.

Shyu wants two more tranches of funding. This would help the small company progress substantially and then aid the program manager who wants to reduce risk.

Within her office, Shyu said she is proposing creating new positions to address problems with software development and sustainment. The new jobs would be a director of processing and software and director of sustainment technologies. They would be charged with finding “the really great technologies that’s out there to drive sustainment costs down,” she said.

This new organization chart will go to Deputy Defense Secretary Kathleen Hicks for approval, “hopefully pretty soon,” Shyu said.

Shyu wants the Pentagon to flip the ratio of procurement to sustainment. About 70% of a weapons system’s cost is currently on sustainment, with research and development making up just 30 percent. To enable that transition, the Pentagon needs to adopt more open systems architecture, additive manufacturing, and develop new materials that can last longer, Shyu said.

Brian Everstine

Brian Everstine is the Pentagon Editor for Aviation Week, based in Washington, D.C. Before joining Aviation Week in August 2021, he covered the Pentagon for Air Force Magazine. Brian began covering defense aviation in 2011 as a reporter for Military Times.