i

Report of the

Defense Science Board 

Task Force

for the

INVESTMENT STRATEGY

FOR DARPA

July 1999

Office of the Under Secretary of Defense

For Acquisition & Technology

Washington, D.C. 20301-3140



ii

TABLE OF CONTENTS

Preface................................................................................................................................. iv

Executive Summary............................................................................................................. vi

Chapter 1: Introduction ......................................................................................................... 1

Chapter 2: Overview of DARPA............................................................................................ 3

DARPA’s Budget and Projects............................................................................................. 4

Program Managers.............................................................................................................. 7

Strategic Planning ............................................................................................................... 8

Chapter 3: The Post Cold War Environment ......................................................................... 11

Chapter 4: The Future ......................................................................................................... 15

Chapter 5: The External Environment .................................................................................. 21

Chapter 6: Findings and Recommendations .......................................................................... 25

Annex A: Terms of Reference ............................................................................................ A-1

Annex B: Task Force Membership ...................................................................................... B-1

Annex C: Summary of Briefings......................................................................................... C-1
iii
iv

PREFACE

The Defense Advanced Research Projects Agency (DARPA) was established in 1958 by the 

Secretary of Defense in response to the launch of Sputnik and has continued to foster innovation

and pursue high-payoff, and, often, high-risk projects to assure technological superiority for U.S. 

military forces. Over the past 40 years, DARPA has been highly successful in developing and 

demonstrating advanced technologies and systems that have been incorporated into many of the

major weapon systems in America’s military arsenal. This success is due in large measure to the 

philosophy of the organization – a philosophy that promotes an entrepreneurial outlook on

technology research and seeks revolutionary advances that go well beyond conventional

approaches to system development. 

DARPA’s research agenda has varied since its inception in response to both external events 

such as the Soviet launch of Sputnik and to internal Department of Defense needs for

technological advancement. Over time, DARPA’s research has included advanced

microelectronics, data processing technologies, advanced radar and optics, missile guidance and 

propulsion, target identification and recognition, dual-use technologies, information

technologies, and biotechnology. In fact, a hallmark of DARPA’s reputation has been its ability

to redirect its investment portfolio with great agility.

With the change in the worldwide socio-political situation over the past ten years and the

changing threats to U.S. national security, the DoD is reassessing its missions, goals, force

structures, and national defense needs in the future. In this vein, the purpose of this study is to 

examine DARPA’s investment strategy for the 21st century.
v
vi

EXECUTIVE SUMMARY

At the request of the Under Secretary of Defense for Acquisition and Technology

(USD(A&T)), the Defense Science Board (DSB) formed a Task Force to examine the future

investment strategy for the Defense Advanced Research Projects Agency (DARPA). The Task

Force was formed to respond to concerns that DARPA has developed an investment bias that

favors near- and long-term projects and that this perceived bias might leave an investment gap in 

mid-term technologies that offer potential yield within five to seven years and are important to

maintaining our national defense superiority in the next several decades. Thus, the Task Force

specifically focused on assessing this perceived imbalance in DARPA’s investment mix of near-, 

mid-, and far-term technologies. The Task Force concluded that it is not possible to

quantitatively make judgements on the portfolio mix. Moreover, the term of a technology’s

applicability is not an appropriate judgement criteria. Instead the Task Force recommends that

the level of risk versus the degree of military utility offered by a specific program are the

appropriate criteria to judge DARPA’s portfolio.

DARPA serves as the agency responsible for pursuing research and development (R&D) for 

the Department of Defense, responding to tasks and guidance from the Office of the Secretary of 

Defense and Joint Chiefs of Staff. The Agency focuses on revolutionary initiatives with high

technical risk, thus pursuing a different class of programs from the typically evolutionary efforts

appropriate to the research and development programs undertaken in the individual military

Services. While primarily focused on its core research program – balancing innovative basic

research, applied research, and advanced technology development – it is appropriate for DARPA 

to respond, from time to time, to pressing near- or mid-term technological gaps that the Services 

need to have filled. DARPA is uniquely positioned to address technology developments that cut 

across all Services or respond to Joint Service needs.

During the early 1990s, a technological gap in the area of command, control, and

communications became evident. While Operation Desert Storm was a military success, post

conflict assessments identified a number of deficiencies and fundamental limits in U.S. military

capability, particularly in the area of command, control, communications, computers, and

intelligence, surveillance, and reconnaissance (C4ISR). Pressure mounted from DoD and

Congress to focus post Desert Storm science and technology investment strategies on addressing

these shortfalls. 

The Director, Defense Research and Engineering (DDR&E) made joint C

4

ISR solutions a

major priority within the science and technology budget and looked to DARPA to solve these

problems, recognizing that the Services were not able to address these issues alone. DARPA’s 

response to this requirement had a major influence on the character of many of its programs, 

which became shorter term in duration with specific joint warfare demonstrations as the focus. In

addition, DARPA Program Managers faced requirements to solicit early buy-in for their

programs from a military Service and to define technology transition plans early in the program. 

This requirement to secure buy-in led to pressures for early demonstrations of particular

technologies or systems and a higher degree of risk aversion than had been the norm.
vii

At the same time, DARPA took steps to improve the quality and technical expertise of its 

Program Managers by enforcing a four-year rotation cycle and significantly increasing the

number of Program Managers drawn from universities and other not-for-profit research agencies, 

federally funded research and development centers, and government laboratories. While this

policy change was important, it did create incentives for Program Managers to define programs

that had at best a near-term horizon. 

Together this complex set of factors resulted in a DARPA program portfolio in the post

Desert Storm era that had many programs focused on near-term demonstrations. This result was 

not by accident, and it is consistent with DARPA’s charter. However this trend can and should 

now be adjusted. With stabilization of the defense budget and the establishment of warfighting

laboratories within the Services and the Joint Experimentation Organization at U.S. Atlantic

Command, the burden of near-term demonstration of C

4

ISR systems is being shifted from

DARPA to the military Services.

DARPA now has an opportunity to redefine its overall objectives and portfolio mix and

characteristics. As the 21st century approaches, it is evident that DoD needs to develop

warfighting capabilities - and the technologies to support those capabilities - that are more farreaching and complex than the C

4

ISR deficiencies identified by the Desert Storm experience. 

These capability requirements are driven by the emergence of new asymmetric threats and the

complex and diverse missions that America’s military forces will be called upon to execute.

DARPA needs to transition to an investment strategy that shifts emphasis from a

portfolio biased toward near-term demonstrations to one with high risk and initiatives that 

have high military utility as demanded by the emerging threats and the new military

paradigms of the 21st century. To accomplish this transition DARPA management and

Program Managers must have a better appreciation for intelligence assessments, military 

operational needs, and trends within private sector technology development.

To execute this strategy, DARPA must take the following steps:

Plan deliberately for the future. DARPA should emphasize strategic planning, which 

should be based on a collaboration between the Director’s Office and Office

Directors. The resulting plan must be communicated to the Agency’s Program

Managers as well as the USD(A&T), DDR&E, the Joint Staff, and Congress. 

Caution should be taken not to make this process too bureaucratic, and resource

flexibility must be maintained to address emerging opportunities. DARPA’s culture

and approach to R&D management is unique and draws its strength from the

independence and quality of its Program Managers. While DARPA management

should regularly communicate their strategic plans, program composition, and

research goals to DDR&E, care should be taken to not burden DARPA Program

Managers with the TAP and TARA review processes that are used by DDR&E to 

coordinate the overall DoD science and technology investment portfolio.

Structure an investment portfolio and program that includes several major thrusts 

that address critical national security challenges of the 21st century. DARPA’s 

investment portfolio should include a mix of investments in technologies and

system-level technology experiments to support the new and evolving warfighting

concepts. The Task Force highlights six areas where DARPA should significantly
viii

expand its investments: chemical and biological warfare defense, assured

information dissemination and management, counter transnational threats,

underground facility characterization and negation, affordable stand-off precision

target engagement, and unmanned and robotics warfare.

Selectively demonstrate major innovative projects and technologies. DARPA needs 

to avoid requiring Service endorsement or financial support at the outset of a

program. The Agency must not allow near-term military deficiencies and the need

for immediate military acceptance of its research and development programs to bias

the portfolio mix. This must not exclude, on a case-by-case basis, the ability to

address critical warfighting needs that require short-term investments, but these

should be the exception not the rule. DARPA should continue to use and pioneer

innovative contracting vehicles for prototype development and the same authority

should be extended to the military sources to allow for seamless transition of

DARPA-developed systems to military-led acquisition programs.

Recruit highly qualified Program Managers from the public and private sector. 

DARPA’s rotation policy enables the Agency to maintain a staff that is constantly at 

the cutting edge. DARPA must be able to hire the most qualified Program Managers 

from the public and private sector as well as military officers. The use of the

Interagency Personnel Act (IPA), direct hiring from the private sector and enough

joint billets to attract the very best military officers are all important capabilities to

ensure Program Manager quality. To ensure that they are effective in managing 

DARPA’s programs, the Agency should develop a program to provide mentoring,

corporate knowledge, and program management skills. A mentoring process should

be established that helps new Program Managers become familiar with threats and

challenges that U.S. military forces face and will face in the future.

Create a structure for program management that addresses the needs of longerterm programs. Flexibility in Program Manager rotation policies that allows for a

mix of short-term and selective “term extended” Program Managers, at the discretion 

of the DARPA Director, can bridge gaps in oversight due to rotations, and provide 

continuity and corporate history. Along with this flexibility, DARPA needs to

develop a systematic project hand-off process to maintain program continuity and an 

explicit mechanism for technical exchange and collaboration among Program

Managers and across Program Offices.

Be cognizant of the external environment, developing and maintaining strong

relationships with the military, intelligence community, Congress, and the

private sector. DARPA cannot be successful if its agenda does not support and is 

not supported by the external community. Today’s environment requires DARPA to 

build and maintain these relationships with greater urgency in order to gain an

understanding of priorities, research and development agendas, investment plans,

and requirements. Visibility into private sector research and development will enable

DARPA to establish priorities for investments in technology areas critical to DoD

that are either not being pursued in the private sector or can be exploited from that 

sector in support of national defense.
ix

DARPA has been highly successful throughout its history. The end of the Cold War has

evolved into an era that will be defined by adversaries both capable and different and will be

defined by how the United States chooses to deal with this new range of threats. DARPA is

already developing an investment strategy to address this new era. By taking additional steps,

the Agency can enhance the success of that strategy, and, in doing so, will remain a leader in

defense technology innovation. Effective leadership - in establishing an investment strategy,

maintaining an effective staff, and developing and maintaining relationships with the outside

community - is the key to ensuring that DARPA remains a leader well into the future. 
1

CHAPTER 1: INTRODUCTION

At the request of the Under Secretary of Defense for Acquisition and Technology

(USD(A&T)), the Defense Science Board (DSB) formed a Task Force to examine the investment 

strategy of the Defense Advanced Research Projects Agency (DARPA). DARPA has long

maintained an ability to redirect its investment portfolio with great agility. The past two decades 

are particularly illustrative of the Agency’s changing mix of advanced technology research and

development (R&D).

During the mid- to late eighties, DARPA placed emphasis on developing and incorporating

newly developed advanced microelectronics and data processing technologies into weapon

systems designed to meet the tactical and strategic military threat of the Soviet Union. After the 

demise of the Soviet empire, the Agency turned its attention to dual-use technologies that are

both critical to military systems and also have commercial potential. This emphasis was

accentuated by concerns in Congress over a decline in U.S. competitiveness in the global hightechnology market.

By the mid-1990s, the United States had regained its position of global superiority in hightechnology areas. Consequently, DARPA shifted its focus back to military capabilities,

emphasizing information technologies, particularly those that promised to enable enhanced

situation awareness on the battlefield, and biotechnology. 

The evidence suggests that DARPA’s overall portfolio changes continually as old projects

are concluded, freeing up resources for new pursuits. In addition, the overall objectives of the

Agency are influenced by the goals and philosophy of each individual Director. However, recent 

controversy has arisen over DARPA’s current direction, with specific concern by some observers 

that DARPA has developed an investment bias that favors near- and long-term projects – that is, 

those projects with a payoff either within two years or beyond 10-15 years. This perceived bias 

might create an investment gap in mid-term technologies that offer potential yield within five to

seven years and are important to maintaining commercial economic vigor in the United States. 

In response to these concerns, the Task Force specifically focused on assessing DARPA’s 

investment mix of near-, mid-, and far-term technologies.1 In particular, the Task Force

addressed the following questions:

1. Is there an imbalance in the current investments toward technologies with near- and 

far-term payoff and away from technologies with a yield in the mid-term?

2. Is the current mix of the DARPA investment portfolio appropriate given directions,

capabilities, and resources of industrial research and development?

3. How does DARPA maintain a knowledge base on commercial technology?

 

1 Annex A contains the complete Terms of Reference for the Defense Science Board Task Force on Investment Strategy for the Defense 

Advanced Research Projects Agency.
2

4. What is the strategy for DARPA taking advantage of technologies with strong

commercial investment?

5. How should DARPA strengthen its relationship with the commercial and defenseoriented industry?

6. How should DARPA strengthen its relationship with military customers and the

intelligence community?

To address these questions it was important to draw Task Force members from a broad

spectrum of communities. The team included representatives from large defense contractors, 

small businesses, not-for-profit research companies, universities, government laboratories, and

federally funded research and development centers.2 This diverse group brought a wide range of 

technical and operational disciplines to the Task Force effort, enabling rich debate and

perspective. It was understood at the outset of this study that the questions posed in the Terms of 

Reference would not likely be answered through quantitative analyses. Rather, a broadly based 

set of individuals familiar with DARPA would be necessary to form a collective set of

judgements to address the issues raised.

As background for its work, the Task Force heard a variety of briefings from current

DARPA Office Directors, former DARPA Directors, and individuals in the DoD science and

technology community. DARPA’s six Office Directors each described the current investment

portfolio for their office and the process that they used for making decisions on the areas in

which to start new programs. 

Other briefings provided insight into DARPA’s past operations, how DARPA’s investments

fit within the Department’s overall science and technology investment strategy, and the needs of

the Agency’s potential customers. 

The Task Force also met with Senator Lieberman’s staff; DARPA Director, Dr. Frank

Fernandez; and the DARPA Deputy Director, Dr. Jane Alexander, to better understand their

goals for the Task Force. With this background, the Task Force began its assessment.3

The chapters that follow present the results of the Task Force deliberations. Chapter 2

begins with an overview of DARPA’s history – its mission, culture, organization, and

accomplishments. The next three chapters examine and evaluate DARPA’s investment portfolio, 

focusing in Chapter 3 on the post Cold War environment, in Chapter 4 on an investment strategy 

for the future, and then in Chapter 5 on DARPA’s critical relationships with the external

environment. The overall findings and recommendations are discussed in the final chapter.

 

2 A list of Task Force members is in Annex B.

3 Annex C contains a list of the briefings to the Task Force.
3

CHAPTER 2: OVERVIEW OF DARPA

DARPA was established as an agency within the Department of Defense, in response to the 

Soviet Union’s launch of Sputnik, for the purpose of initiating unique research and development

programs in often high-risk areas, that would, if successful, offer significant impact on the

Department’s military capabilities. The goal of these efforts is to help maintain U.S. military

technological superiority and to guard against unforeseen advances by potential adversaries. 

DARPA responds to tasks and guidance from the Office of the Secretary of Defense to establish 

an independent research agenda that is relevant to national security needs. DARPA is an “idea”

agency, able to reach beyond today’s technological frontier to develop what is needed by

America’s military in the future.

Based on its mission, DARPA focuses on revolutionary initiatives with high technical risks -

a mission that differs from the typically evolutionary efforts appropriate to the research and

development programs of the individual military Services. DARPA has been uniquely positioned 

to address technology developments that cut across all the Services or respond to joint-Service 

needs within the Department of Defense. 

The Service research and development establishments provide focused technology solutions

that are driven by specific Service requirements. The Service laboratories also provide a path by

which to transition DARPA-developed technologies for insertion into military systems. Together

DARPA and the Service research and development communities provide DoD with both radical

and incremental approaches required for defense innovation. Figure 1 compares the different

roles of DARPA and the Service laboratories.

The culture at DARPA has been instrumental to its success. Paramount is creative

management that provides strategic guidance for the Agency, while embracing risk-taking and

recognizing the possibility of failure. The DARPA environment minimizes bureaucracy,

allowing motivated Program Managers to aggressively tackle the hardest technical challenges in

a timely manner. The culture is supported by the Agency’s goal to foster the growth of new ideas 

and gain visibility into the private sector. It achieves this goal through a rotation policy for

Program Managers, with turnover typically every two to four years. The resulting environment

places strong emphasis on good ideas that provide high potential payoff to critical needs but are 

too risky to pursue within the Service R&D organizations. DARPA’s constantly changing

research agenda is driven from the bottom to address tomorrow’s critical challenges.
4

DARPA SERVICE R&D

Exploit opportunities, change paradigms

Integrated research

Big payoff -- radical change

Central DoD agency for R&D

Tolerant of high risk

Planned product obsolescence

Fulfill requirements

6.1 - 6.5 research separated

Weapon System focus

Support Service mission

Limited tolerance for high risk

Planned product improvement

Defense innovation requires both radical and

reliable, incremental approaches

DARPA’s Role

Figure 1. DARPA and Service R&D Approaches – A Comparison

DARPA’S BUDGET AND PROJECTS

A look at DARPA’s budget history shows resource levels that have fluctuated over the past 

40 years both in response to technological surprise from America’s adversaries and to

technological gaps that the Services need to have filled. Figure 2 highlights the events that

precipitated some of the most significant fluctuations, beginning in the early years with a

response to the Soviet space program and more recently with the Technology Reinvestment

Project. In certain cases, DARPA’s budget has declined as programs have been transferred to 

other organizations for implementation. The transfer of Project Defender to the Army in the late 

1960s and the transfer of the Ballistic Missile Defense programs to the Strategic Defense

Initiative Office in the mid 1980s are two examples. 

Examining DARPA’s core mission, as depicted in Figure 3, also illustrates how the

organization has responded to internal DoD requirements while maintaining a strategy that

balances among basic research, applied research, and advanced technology development (budget 

categories 6.1, 6.2, and 6.3). In recent years there has been concern that advanced concept 

technology demonstrations (ACTDs) have had undue influence on DARPA’s core research. In

fact there have been only minor perturbations from the Agency’s core portfolio. A greater

impact has instead come from commercial influences such as the Technology Reinvestment

Project, which attempted to have DARPA and other DoD R&D organizations focus on

developing technology with both military and commercial applications.
5

Legend

Response to Sputnik

Space for Peace

Transfer Project Defender to Army

Quick reaction support to S.E. Asia

Demonstration programs (EEMIT)

Transfer BMD programs SDIO

Submarine technology, Defense manufacturing

technology

Transfer of Electronic Systems from OSD,

Packard Comm. prototypes, NASP

Technology Reinvestment Project

Dual-Use technology development

1

2

3

4

5

6

7

8

9

10

1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997

0

500

1000

1500

2000

2500

3000

$ Millions

1

Fiscal Years

2

3

4

4

5

5

6

7

8

8

9

9

10

7

 Then Yr $

 Constant F 1997 $

Figure 2. DARPA’s Budget History

Commercial Influence

Military Influence

1958 (DARPA start)

1968197819881998

Dual-Use (TRP)

Vietnam

Prototyping

Project

Defender

WarsawPactSoviet Collapse

Central European Theater Space

Demos BMDO

Sputnik

Asymmetric

Threats

Regional 

Conflicts

ACTDs

CORE DARPA MISSION

National

Missile

Defense

? ACTDs, like similar military influences in the past, have been minor

perturbations on the DARPA core portfolio.

? Commercial influences, (e.g.,TRP), have also occurred and have had larger

impact on the DARPA core.

Figure 3. DARPA’s Core Mission
6

DARPA’s efforts have led to the development of numerous successful technologies and

systems over the years, some of which were witnessed by weaponry used in conflicts such as

Desert Storm, Bosnia, and Somalia (particularly stealth aircraft and JSTARS). Furthermore,

much of the Strategic Defense Initiative technology, particularly in surveillance and directed

energy, was a product of the Agency’s research efforts. Other successful developments in recent 

decades include the Javelin seeker, armor/anti-armor, unmanned underwater vehicles, acousticquieting techniques, endurance unmanned air vehicles, and missile launching systems. 

Some of DARPA’s successes have also found their way into the civilian sector, perhaps the 

most far reaching of which is today’s modern Internet systems which grew from DARPA’s

pioneering work on ARPANET. Figure 4 provides a partial listing of DARPA’s successes

throughout its history.

Late 50s

? ?Saturn space launch vehicle, Centaur RL-10 engine

? ?Vela Hotel satellites

Early 60s

? ?Foundations of BMD (Defender Project PRESS, KREMS)

 

 Vietnam Era (late 60s, 70s)

? ? M-16 Rifle (AR-15)

? ?Ground surveillance radars (Camp Sentinel Radars)

? ?SURTASS, Acoustic Research Center (Illiac)

? ?Transit satellites

? ?UAVs (Praerie, Calere)

? ?ROTHR

Early 80s

? ? Much of SDI technology (surveillance and directed energy)

? ?AMOS satellite imaging and adaptive optics

Modern Network Systems (ARPANET)

1980s

? ? Interactive simulation systems (SIMNET)

? ? Javelin (Tankbreaker); Armor/Anti-Armor

? ?Non-penetrating submarine periscope

? ?Unmanned underwater vehicles; acoustic quieting tech

? ? LPI/LO radars

? ?Endurance UAVs (Condor, Amber)

? ?Pegasus, Taurus launch vehicles

Display of Weaponry in Desert Storm

? ? JSTARS (Assault Breaker, Pave Mover)

? ?ATACMS (Assault Breaker)

? ?F-117 (Have Blue), B-2 (Tacit Blue)

Bosnia, Somalia

? ?Predator (Amber)

? ?Soldier 911

? ?Personnel and vehicle armor

? ?Bosnia C3 Augmentation System

? ?Natural Language

Figure 4. DARPA Successes
7

DARPA has also experienced unsuccessful programs, as would be expected from an agency 

involved in high-risk research and development. However, even though expected, it is important 

to examine and learn from the reasons for such outcomes. The Task Force observed two primary 

causes of unsuccessful programs. On the one hand, some programs end in failure due to

technical risk – lack of technical maturity, a problem that is simply “too hard,” a requirement that 

is no longer needed, or other technological solutions emerge. These are “acceptable failures” – a 

normal and expected part of the process of advanced technology research. 

On the other hand, DARPA experiences program failures due to program management – an 

issue of concern to the DSB Task Force. Cases of inconsistent and changing program objectives, 

a tendency to press for early demonstrations and programs that proceed with no clear exit criteria 

are evident. While the Program Manager rotation policy allows for the infusion of fresh ideas

and a staff familiar with the cutting edge of technological developments, it also causes program 

objectives to shift when research efforts are handed off from one Program Manager to the next. 

Well-defined exit criteria, important on their own merit, can also help to minimize the impact of

changing Program Managers. DARPA needs to set in place a process for capturing,

understanding, and learning from project failures. The lessons that are learned need to then be 

institutionalized in new behavior and passed on to new Program Managers.

PROGRAM MANAGERS

DARPA’s Program Managers in large measure drive the character of the institution. These 

individuals must be highly motivated visionaries who are successful at both management and

technology. They must be experts in their field, but, importantly, they must “think outside the

box” and they must be willing to take risk. To maintain a staff that is constantly on the cutting

edge, DARPA Program Managers are brought to the Agency for temporary assignments,

typically lasting two to four years. Its Program Managers come from industry, the military

Services, academia, not-for-profit research companies, federally funded research and

development centers, and the national laboratories. 

DARPA has traditionally used the 1971 Interagency Personnel Act (IPA) as a mechanism to 

bring in program managers. The IPA allows non-profit organizations, such as universities, to

temporarily loan scientific and engineering personnel to DoD agencies and the Services. 

However, the IPA Act does not permit temporary loan of personnel from private sector profitmaking organizations. DARPA has recently been given authority to hire Program Managers

directly from private sector firms. The Task Force is very supportive of this change. DARPA

access to high-quality Program Managers from within the military was limited a few years ago

by the decision not to grant joint billets to DARPA. The impact of this decision has made a tour 

at DARPA less attractive to many military officers at a point in their career where a joint

assignment is critical to career growth. The Task Force believes that DARPA should be assigned 

a number of joint billets to allow access to a broader cross section of military officers. 

While an important part of DARPA’s culture, the rotation policy also brings a unique set of

problems. The Task Force is concerned that Program Managers lack sufficient training and

mentoring about the goals of the agency and the defense community. New Program Managers

need to be educated, as early as possible, on the latest thinking on threats to the national security 
8

and the resulting DoD requirements to meet these threats in order to better focus their research

on DoD’s needs. While the DARPA research agenda is not tied to military requirements, per se, 

if its research is to be most beneficial to DoD, it needs to address the nation’s security needs. 

The rotation policy also tends to create a short-term focus by the Program Managers, who 

bring with them an inherent desire to accomplish a vision or goal within their tenure. Related is 

the fact that long-term programs can experience a gap in oversight and direction while Program

Managers get settled into their jobs and learn new programs. DARPA needs to address this

concern to ensure that there is continuity within the organization. Flexibility in Program

Manager rotation policies that allows for a mix of short-term and a few “term extended”

employees can bridge such a gap, with the more permanent employees providing continuity and

corporate history on individual programs, as well as experience within the Department of

Defense establishment. This tenure policy needs to be augmented with a systematic project

hand-off process to maintain program continuity, such as an effort to provide for overlap

between rotating Program Managers.

The rotation policy also has a tendency to suppress collaboration and technical exchange

among Program Managers, particularly across offices. Collaboration is a hit-or-miss exchange, 

driven primarily by Program Manager personalities rather than by programmatic needs. Where

natural collaborations tend to evolve through longer-term interactions among staff, DARPA

needs an explicit mechanism for technical exchange that accommodates for the shorter-term 

relationships that evolve with Program Managers continually rotating in and out of the

organization. 

STRATEGIC PLANNING

The Task Force believes that DARPA needs to strengthen its approach to strategic planning. 

The Agency identifies thrusts and focus areas to direct its research but has no systematic process 

for deliberately planning for the future. The process is decentralized, leaving the Office

Directors and Program Managers to define their own research portfolio. Moreover, DARPA

fails in communicating its plans both within the organization and outside. This creates the

impression that Program Managers are pursuing agendas that may be disconnected from the

Agency’s long-run goals. It also leaves the organization vulnerable to uninformed criticism

regarding their programs and plans. DARPA’s strategic planning process should be a

collaboration between the Director’s Office and the Office Directors. The resulting plan must be 

communicated to DARPA Program Managers as well as the USD(A&T), Director, Defense

Research and Engineering (DDR&E), the Joint Staff, and Congress. 

The strategic planning process should assess the current portfolio using criteria that assesses 

risk versus military utility. This process should establish long-term Agency goals and identify

emerging investment opportunities in technologies and programs where there is limited private

sector investment but the potential for significant military payoff. The Task Force believes that

the new DARPA management has initiated this process and has established a set of

programmatic themes (discussed in Chapter 4 and highlighted in Figure 10) that address 

important military issues that will dominate defense needs in the next century.
9

To be successful in implementing its research agenda, DARPA must foster relationships

with a variety of communities external to its organization including the Office of the Secretary of 

Defense (OSD) and the military Services, the intelligence community, Congress, and the private

sector. It is critical that this communication be two-way, with DARPA maintaining visibility

into the research and development efforts ongoing in DoD, the intelligence community, and the

private sector, as well as providing visibility for these communities into DARPA’s own research

agenda. By maintaining critical external relationships, DARPA will strengthen its basis for

establishing priorities on which to base its future portfolio investments. Chapter 5 provides a

more detailed discussion of the external environment.
10
11

CHAPTER 3: THE POST COLD WAR ENVIRONMENT

The end of the Cold War led to a steady decline in the Department of Defense budget, which 

only in the past few years has begun to stabilize. The overall budget decline in turn has caused 

significant reductions in the Service Total Obligation Authority. To compensate for this

reduction, the military Services have redirected funds from their science and technology budgets 

to provide needed resources for maintaining readiness and addressing issues associated with

personnel retention and morale. 

DoD’s total budget for science and technology research was $7.2 billion in fiscal year 1998, 

down from a high in 1993 of over $9 billion. Figure 5 shows the history of the Department’s 

science and technology budget from 1978 to 1998 and illustrates two important points. First, the 

military Services have each reduced science and technology funding since the end of the Cold

War. Second, DARPA and the other Defense Agencies – predominantly the Ballistic Missile

Defense Organization – now represent approximately half of the overall DoD science and

technology budget. 

10

9

8

7

6

5

4

3

2

1

0

1978 1982 1986 1990 1994 1998

Fiscal Year

FY97 $B AIR FORCE

NAVY

ARMY

OSD / DARPA / Other Agencies

* Note: OSD & Agencies are NOT “taking” Service S&T funding;

instead the Services are cutting S&T funding.

Figure 5. Defense-wide and Service Funding of Science and Technology

Moreover, the Services not only have reduced their overall investments in science and

technology, but also have directed much of their funding priority toward modernization. 

Technology advances for next-generation aircraft, precision munitions, ground combat vehicles,
12

helicopters, transport aircraft, new ship concepts, automation to reduce ship manning, and battle

group defenses are only some of the domains that require Service technology developments to 

meet future needs. 

For the United States and its NATO allies, the Cold War was a period when military

weapons and systems were designed to defeat the Soviet Union – America’s primary adversary –

and to support a confrontation with the Warsaw Pact, the logical military operational scenario. 

U.S. forces and weapon systems were primarily forward deployed, large, heavy, and static. 

Intelligence, reconnaissance, and surveillance assets, designed for an Eastern Europe conflict,

resulted in fixed communications, command and control systems that were well understood, and 

individual Service missions and responsibilities that were well defined.

To respond to the desert crisis in 1990, the United States transported a primarily Cold Warfocused set of military systems to Saudi Arabia over a six-month period and subsequently used 

these systems against Iraq in Operation Desert Storm. While Operation Desert Storm was a

military success, post conflict assessments identified a number of deficiencies and fundamental 

limits in U.S. military capability, particularly in the area of communications.

Desert Storm provided an assessment of joint Service operations and highlighted

deficiencies in command, control, communications, computers and intelligence, surveillance, and

reconnaissance (C4ISR). Limitations in available communications bandwidth, communications

to support command and control on the move, wide area surveillance, target identification,

planning tools, logistics management, sensor-to-shooter connectivity, situation awareness, and

the ability to manage and disseminate timely intelligence and reconnaissance information to joint

forces in theater were some of the deficiencies identified. Thus, pressure mounted from DoD

and Congress to focus post-Desert Storm science and technology investment strategies on

addressing these shortfalls. DDR&E made joint C

4

ISR a major priority within the science and 

technology budget and looked to DARPA to help solve these problems. 

In addition, the Defense Airborne Reconnaissance Office was created to address tactical

surveillance needs and the Deputy Under Secretary of Defense for Advanced Technology

pursued ACTDs as a means to quickly improve U.S. C

4

ISR capabilities. Typically short-term 

programs, ACTDs integrate existing technologies into systems that can be “tried out” by military

users to assess, experiment with, and ultimately provide direct military utility. Many of these

programs have focused on C

4

ISR issues. Despite the emphasis on ACTDs during this period, 

funding for these programs has never been a particularly large portion of the DARPA budget, as 

many have suggested. As shown in Figure 6, funding on ACTDs represented less than five

percent of the DARPA budget over the past five years.
13

97-99 Change

FY 96 FY 97 FY 98 FY 99 Category Total % DARPA Total

6.1 Basic 

Research

76.459 90.701 76.009 80.936 -11% -0.45

6.2 Applied 

Research

754.21 710 827.87 928 31% 10

6.3 Adv Tech Dev 1358.4 1298.7 1256.6 1216.7 -6%

Agency Total 2269.2 2140.4 2204.4 2271.9 6%

ACTDs FY 96 FY 97 FY 98 FY 99 FY 00

High Altitude 

Endurance UAVs

$22M $13M $5M $0M $0M

Synthetic Theater of 

War

$12.9M $12.6M $0M $0M

Battlefield Awareness 

and Data 

Dissemination

$28.9M $43.8M $14.5M $7.4M

Semi-Automated 

IMINT Processing

$24.9M $23.9M $13.6M $4.5M

Joint Logistics $9.8M $9.6M $9.72M

Miniature Air 

Launched Decoy

$17.9M $9.0M $2.0M

Combat Vehicle 

Survivability

$6.6M $6.3M

Figure 6. DARPA Investment, Fiscal Years 1996-2000

Figure 6 shows the distribution of DARPA investments in basic and applied research (6.1 

and 6.2) and advanced technology development (6.3). These data show no evidence that

DARPA programs have become focused on near-term military deficiencies. The Task Force

believes that many subjective factors have led to a near-term focus on demonstrations. First, as 

previously discussed, DARPA increased its focus on solutions to meet the near-term needs

established within the joint Service C

4

ISR community. Second, DARPA Program Managers

have been required to solicit early buy-in for their programs from a military Service and to define 

technology transition plans and Service funding profiles for that transition early in a program. In

order to secure Service support and buy-in, Program Managers are pushed to have early

demonstrations of particular technologies or systems. These factors, along with the reduced

Service funding for science and technology investment, have brought about a near-term focus for 

a large fraction of DARPA’s investment portfolio.
14

During this period, DARPA also took steps to remain technologically current by enforcing a 

four-year rotation cycle for its Program Managers and significantly increasing the number of

Program Managers from universities, not-for-profit research corporations, federally funded

research and development centers, and government laboratories. While this policy change was

important, it did create incentives for Program Managers to define programs that had at best a

three-year horizon. DARPA has a very limited training or mentoring program for new Program 

Managers and thus it may take as long as a year for new Program Managers to establish a set of 

programs. Moreover, the high quality, innovative, and competitive characteristics found in

DARPA’s best Program Managers do not support a great deal of collaboration between Program 

Managers or the likelihood for programs to smoothly transition from one Program Manager to

another. The fundamental character of a successful DARPA Program Manager as an innovator, 

an individualist, and an “anti-bureaucrat,” will create a culture in which a manager establishes

his/her own agenda and programs.

Together, this complex set of factors has resulted in a DARPA program portfolio in the postDesert Storm era that has many programs focused on near-term demonstrations. This result did 

not happen by accident. It is consistent with the DARPA charter and the DDR&E and DARPA 

strategy to solve the deficiencies in joint-C

4

ISR capabilities. 

Consequently, the Task Force believes that DARPA’s current portfolio does not have

enough high-risk, high-payoff programs. This situation should now be addressed. With

stabilization of the defense budget and the establishment of warfighting laboratories within the

Services and the Joint Experimentation Organization at the U.S. Atlantic Command, the burden

of near-term demonstration of C

4

ISR systems can be shifted from DARPA to the military

Services. DARPA funding for ACTDs will be near zero in FY 2000. Also, most importantly, 

the new DARPA management has taken this opportunity to redefine their overall objectives and 

portfolio mix and characteristics.

The Task Force attempted to address the portfolio imbalance hypothesis through a more

analytic process, but was unsuccessful. DARPA senior management provided data based on a

subjective judgement of the characteristics of the current portfolio, which indicated a bias

favoring near-term, low-risk programs which had significant utility for military operations. The

Task Force attempted to replicate this judgement by asking each DARPA Office Director to

provide an assessment of the level of risk associated with each program and the time required for 

the program to provide a useful military capability. 

These attempts at a quantitative analysis of program focus, along with an examination of the 

DARPA Science and Technology investments presented in Figure 6, did not result in a definitive 

set of data to address the question of portfolio mix. The Task Force concluded that an

assessment based on near-, mid- and far-term focus was not an appropriate methodology to

assess the DARPA portfolio mix. Instead the Task Force accepted a characterization that

measured technological risk versus military utility and believes that the DARPA portfolio should

be biased toward high-risk, high-payoff programs. This characterization and the recommended

distribution within the portfolio are discussed in Chapter 4. 
15

CHAPTER 4: THE FUTURE

As the 21st century approaches, it is evident that DoD needs to develop warfighting qualities 

and technologies to reach beyond the C

4

ISR deficiencies identified by the Desert Storm

experience to a more far-reaching and complex set of capabilities. These capability requirements 

are driven by the emergence of new asymmetric threats and new and diverse missions that the

military forces have been called upon to execute – such as peacekeeping and humanitarian

missions in Bosnia, Haiti, and Somalia and drug interdiction. They are also driven by the

overarching strategy embodied in Joint Vision 2010 that calls for military dominance made

possible by establishing information superiority for U.S. military forces. 

This national security environment, which is expected to dominate into the next century, and 

the asymmetric threats that the U.S. military must be prepared to address within this new 

environment are illustrated in Figures 7 and 8. 

• Conflict Increasing

• Proliferation of Military and

Commercial Technologies --

Multinational Corporations

• Operations in Urban

Environments

• Preponderance of Coalitions

• Ethnic Strife

• Nation-State Instability

Rogue Nation

States/Alliances

International Crime

Organizations

Transnational Actors/

Terrorists

Weapons of

Mass Destruction

Greater Range of

Solutions

No US Monopoly in

all Technologies,

i.e. Surveillance

Complex Targets/Terrain

Information Management

Critical -- Shrink the

Response Time

Security

Threats 21st Century Impact

Figure 7. Changing Security Environment
16

Mines Underground

Facilities

Diesel Submarines and

Advanced Torpedoes

Counter-Blue

RSTA and CCD

Inexpensive Missiles

(Thousands)

 A Few Very Sophisticated

 (LO/VLO, EGCM)

 Cruise Missiles

Offensive Information

Warfare

(OIW)

E=mc3

Weapons of Mass

Destruction

- Nuclear

- Chem

- Bio

Reconnaissance,

Surveillance,

Target Acq.

(RSTA) and

Precision

Strike

Figure 8. 21st Century Threats to the United States

The United States faces a highly dynamic international environment within which its

military forces will operate. Whereas the Cold War period was a bipolar alignment between

superpowers, today and in the future the situation will be far more complex. America’s

adversaries are more diverse and might include the potential emergence of either a regional or

world peer or coalition. While wars in the traditional sense may be decreasing, conflicts are

increasing. America’s adversaries have increasing access to threatening asymmetric capabilities

to offset U.S. and coalition military prowess. The U.S. military will operate alongside coalition

partners in diverse environments including the urban battlefield and its unique set of challenges. 

While the United States has been modernizing its forces to address this wider range of

missions and adversaries, these adversaries have also been modernizing their forces to

discourage the United States and its coalition allies from influencing their foreign policy. They

have learned from Desert Storm. Their military modernization has included the purchase of

large numbers of missiles and mines; some submarines with high-speed torpedoes; the

construction of underground facilities; and development of capabilities for weapons of mass

destruction including biological and chemical weapons. Further, potential adversaries can now

use the global information infrastructure, including the Global Positioning System and

commercial imagery satellites, as their C3I system, which in turn can use the worldwide, robust

commercial infrastructure to project “force” anywhere, anytime. Even a small nation with a

modest budget can afford such modernization – a military capability as potentially deadly as

large conventional forces.
17

Together, this picture suggests that the DoD’s science and technology agenda must be

reassessed and a new investment strategy established. This new strategy should include a mix of

investments in technologies and system-level technology experiments to support the new and

evolving warfighting concepts. This will require a shift in emphasis from near-term science and 

technology initiatives to a more balanced portfolio that includes mid- to long-term initiatives as 

demanded by the emerging threats. Within this strategy, however, there must be retained the

ability to address critical warfighting needs, on a selective basis, that require short-term 

investments. 

As part of the future science and technology strategy, the USD(A&T), DDR&E, and

DARPA leadership must jointly reaffirm DARPA as the corporate research and development 

agency for DoD. DARPA’s investment portfolio must address potential threats to America’s

national security in the 21st century and must focus on high-risk projects with high military

relevance and operational payoff. However, DARPA must be careful not to allow near-term 

military deficiencies and the need for immediate military acceptance of their research and

development programs to bias the portfolio mix. High-risk programs are not likely to gain early

military buy-in, but these are the type of projects DARPA was created to pursue. Accomplishing 

these goals will require deliberate planning for the future.

Figure 9 describes the distribution and type of programs that should comprise the DARPA

investment portfolio in coming years. The majority of the portfolio should focus on programs

with high-risk and high military payoff (H,H). Lesser investments should be made in longerterm research and development (L,H) and near-term programs with lower risk but high military

utility (H,L). DARPA management has recently suggested a distribution of 60 percent, 20

percent, and 20 percent respectively. The Task Force agrees with this baseline portfolio

distribution, but recognizes that, as occurred in the period following Desert Storm, DARPA must 

be prepared to sporadically increase the investment in near-term, high-utility programs in

response to military needs to counter a specific problem the Service R&D establishment cannot

address.

DARPA management has recently identified areas of interest that will guide future program

development, as shown in Figure 10. The nine focus areas respond to challenges in national

security, surveillance and targeting, and military operations. The Task Force agrees with the

general approach in this chart but suggests several important changes. First, DoD should not

ignore the chemical agent threat; thus DARPA should address chemical as well as biological

warfare defense. Second, the concept of information warfare defense should be broadened to

encompass assured information dissemination and management. This would incorporate

information security which is integral to the ability of the future Integrated Information

Infrastructure (DSB 1998 Summer Study “Joint Operations Superiority in the 21st Century”) to 

manage the dissemination of crucial military information and assure the integrity and reliability

of that information. The panel also recommends that DARPA focus on underground facility

negation technologies in addition to technologies necessary for their characterization.
18

L,L H,L

L,H H,H

*Potential Military

 Utility

*Technical

Risk

Invest in three types of programs characterized by the criticality of the military

capability they potentially provide and their technical risk*:

 (1) High-risk projects/technology with high military payoff (H,H)

– Longer term, larger projects

– Multi-discipline offices and programs

– Bulk of DARPA portfolio

 (2) Accelerated development of essential technologies and components (L,H)

– Fill niches within private sector

– Establish new military-relevant technology domain

(3) Near-term application of COTS to critical military systems (H,L)

– Fill critical military needs that cross service domains (C4ISR)

– React to military surprise

– Can represent sporadic large fluctuations in funding

Figure 9. DARPA Investment Prospectus

National Security

? Biological Warfare Defense

? Information Warfare Defense

? Counter Transnational Threats

Surveillance & Targeting

? Underground Facilities Characterization

Battlespace Preparation

Comprehensive Awareness

? Affordable Precision Target Engagement

Military Operations

? Unmanned & Robotic Warfare

Mobile, Distributed Command, Control, Communications

Figure 10. Current Areas of Interest
19

The Task Force believes that six of the focus areas, indicated by checks in Figure 10, are 

areas where DARPA should significantly expand its investments. To carry out this investment

strategy, the Task Force recommends that DARPA establish a number of thrusts in each area that 

address shortcomings to successfully counter these emerging asymmetric threats. Example

thrusts might include chemical and biological defense, counter transnational threats, underground

facility characterization and negation, and unmanned and robotics warfare. These thrusts should

include a number of individual projects and programs supported by multi-office and multiProgram Manager participation. The thrust areas will consist of programs focused on both

advanced technology development as well as system integration and demonstration. 

Addressing these challenges will require longer-term programs and investments and will

necessitate careful attention by DARPA management to Program Manager turnover,

collaboration, and mentoring. To define and launch such thrusts, the Task Force believes that

DARPA needs a more deliberate strategic planning process. DARPA’s Director and Deputy

Director should work closely with the Office Directors in establishing and implementing the

Agency’s long-term strategic vision. An integral part of the process will be to communicate that 

vision to individual Program Managers, USD(A&T), DDR&E, the Joint Staff, and Congress. It 

is critical that DARPA be supported by both DoD management and Congress as the Agency

addresses the demanding technological challenges imposed by the military missions and threats

that will be critical in the 21st century.
20
21

CHAPTER 5: THE EXTERNAL ENVIRONMENT

Throughout its history, DARPA has had to manage its relationships with communities

outside the organization. Today’s environment requires DARPA to place even greater emphasis 

on building and maintaining these relationships – with customers, constituents, and suppliers.

Facing complex problems with fewer resources, there is a need to gain understanding of the

priorities, research and development agendas, investment plans, and requirements internal to

those communities. Ultimately DARPA cannot be successful if its agenda does not support and 

is not supported by the external community. DARPA’s most important partners within DoD

include the Office of the Secretary of Defense, Joint Staff, and military Service communities. 

Outside DoD, DARPA’s partners include the intelligence community, Congress, academia, and

the private sector, including both defense and commercial industry. 

DARPA must maintain close ties with the Office of the Secretary of Defense and the Joint 

Staff to ensure a common vision for DARPA’s programs. The USD(A&T), DDR&E, and the

Joint Chiefs of Staff must develop a common understanding of the national imperatives and

priorities that DARPA’s programs should support and within which its programs should be

framed. DARPA’s relationship with other DoD components is also important in order to

coordinate research priorities among the Service laboratories to avoid duplication and, more

importantly, to facilitate technology transition. DDR&E’s active participation in technology

transition could help eliminate some of the transition bottlenecks that hinder moving DARPAdeveloped technology to the military Services.

DARPA must continue to collaborate with the military Services in order to maintain an 

understanding of the operational needs of the military and, in the long run, develop Service

support for DARPA’s efforts. The new joint and Service experimental laboratories should

provide an opportunity to evaluate DARPA technology, help to determine program priorities,

provide early feedback, help define meaningful experiments and demonstrations, introduce

DARPA to CINC warfighting needs, and help to develop constituencies and realistic transition

plans. Gaining an understanding of CINC needs and gaining endorsement from the CINCs will

help to ensure that there is continuity in program development after DARPA investments end.

DARPA must, however, resist requiring early military buy-in for its higher-risk programs as that 

requirement will inevitably drive program objectives towards near-term solutions and

demonstrations. Feedback from the military community also helps to ensure that concepts are

sufficiently mature to enter into the next stages of the development and acquisition process.

DARPA has pioneered the use of innovative contracting within DoD. After obtaining legal

authority to enter into “other transactions” in 1989, DARPA has entered into hundreds of flexible 

agreements with commercial firms and consortia as well as traditional defense contractors. 

These agreements initially involved cost sharing and were primarily useful in supporting dualuse technologies. In 1993, DARPA received additional authority to conduct prototype projects

outside the traditional contracting statutes. This authority has been used to develop a number of 

new innovative system prototypes as well as a variety of sub-systems and components. Both

these authorities have facilitated commercial business practices, unique teaming and

management arrangements, and have attracted participation by companies and organizations that
22

do not traditionally do business with DoD. With the shrinking defense industrial base and new

threats requiring DoD to deal with the bio-technology and pharmaceutical industries, among

others, these authorities are vital to DARPA’s future. If DARPA is to successfully and

seamlessly transition prototypes developed under these authorities to the Military Services, the

Services will need authority to conduct emerging model development and production programs 

with the same flexibility available to DARPA in its prototyping efforts. This will require

legislative action.

The intelligence community is another important partner for DARPA. This partnership has

lapsed in recent years and must be reestablished in order for DARPA to maintain awareness of

emerging national security threats and intelligence community technological needs. Many of

DARPA’s current thrusts – such as biological warfare defense, information warfare defense,

counters to transnational threats, and underground facilities characterization – are closely tied to 

intelligence community concerns. Understanding how the intelligence community is

approaching the assessment of these threats can be valuable and helps to ensure that DARPA’s 

programs remain relevant to the future. The intelligence community can also be a valuable

partner in technology and system development, providing early evaluation of DARPA-sponsored 

technology, as appropriate.

DARPA’s relationship with Congress has been uneven over the years, with DARPA largely

playing a reactive role to Congressional direction. DARPA tends to deal with Congress largely

from the Director’s Office with interaction at the Office Director level occurring only

sporadically. A more consistent approach to this relationship, reaching deeper into the DARPA

management structure, would be valuable. DARPA should initiate regular meetings with

Congress to share the Agency’s priorities and programs as well as understand Congressional

concerns and priorities. DARPA’s Director must proactively provide Congress with a strategy

and overall rationale for shifts in its investments – whether among thrust areas, levels of risk, or 

time horizon of investments. The Office Directors should also participate in this process by

providing program-level specifics including information on new program initiatives, program

goals, risks, milestones, and alternatives. Such an approach would greatly improve DARPA’s

relationship with Congress, creating a partnership that can lead to consensus building on funding

priorities. DARPA, through its strategic planning process, will have enunciated its long-range 

R&D plans to the USD(A&T), DDR&E, and the Joint Staff. High-level DoD support for the 

DARPA portfolio will allow coherent response to Congressional concerns and issues.

Perhaps the most important relationship for DARPA to foster in the decades ahead is its

interaction with the private sector, including both defense and commercial industry. This will be 

essential to establishing an appropriate investment strategy for the Agency. Consolidation in the 

defense industry is resulting in a reduction in internal research and development (IR&D)

spending by defense companies as well as a reduction in the competition that drives technology

development. IR&D spending on advanced technology has been reduced by 50 to 75 percent. 

DARPA needs to be better informed about where private industry is investing its resources to

better leverage these investments. 

To enhance its insight into commercial technology development, DARPA should hire

Program Managers with established connections to commercial companies. The Agency should

reach out to the private sector research community by conducting and attending seminars and

symposia to assess private sector technology trends. Another outreach program would be to
23

establish regular meetings with Chief Technical Officers in specific technology domains to

assess trends, gaps, and shortfalls in private sector technology roadmaps and plans. Through

these avenues, DARPA can begin to create an environment of trust and collaboration with this

community.

Understanding the private sector’s investment strategy in technology areas where there is

both defense and commercial interest is an important basis for identifying appropriate DARPA

investments in these technology areas. In addition to understanding private sector investments,

DARPA must understand the nature of the military’s needs as well, identifying the investment

areas that would prove most valuable for the Department. In areas where private industry is

investing heavily in technology development, DARPA should become a niche player, extending

the available technology where necessary to meet unique DoD needs. 

Where there are limited private sector investments in technologies critical to DoD, DARPA

should take a leadership position in developing a technology base. These investments should

focus, however, on developing technology to meet national security needs and not on

establishing a private sector industrial base. As technology development shifts from DoD to

private sector dominance, DARPA must establish an exit strategy to transition from a position of

technology leadership to one of a niche player. Once DARPA identifies a strategic plan for

technology investment, these plans should be communicated to the private sector. 

Semiconductor technology is an excellent example of how DARPA successfully made the

transition from technology leader to niche player, as the case of integrated circuits in Figure 11

illustrates. In the early 1970s, the Department of Defense was a major consumer of integrated

circuits. DoD played a major role in semiconductor development, with state-of-the-art integrated 

circuits driving the performance of defense systems and vice versa. However, the private

sector’s demand for semiconductors increased dramatically over the next two decades, resulting

in DoD representing only 1.1 percent of worldwide semiconductor production, limiting DoD’s

influence in the market’s product development. During this period DARPA shifted from a role 

of technology leader to niche player.

The case of advanced lithography technology is another example of how DARPA’s

investment strategy can complement commercial sector investments in a technology important to

both sectors. DARPA has invested significantly in lithography technology, financing work in

both deep ultra violet and x-ray lithography. There has been significant pressure from

commercial industry and Congress for DARPA to continue and expand its investments in these 

technologies to augment the current programs being conducted within the commercial sector.

The Task Force does not believe it is appropriate for DARPA to continue to invest in projects 

that represent an evolutionary improvement to existing deep ultra violet or x-ray capabilities. 

Rather DARPA should focus its investments in leap-ahead technologies – specifically on

innovative research projects in unique, new methods of lithography. The Task Force supports

the recent Broad Agency Announcement (BAA) from the DARPA Electronic Technology Office 

that focuses on innovative approaches to advanced lithography.
24

Worldwide Semiconductor Sales

(Billions of Dollars)

Military Percent of Worldwide

Semiconductor Market

DARPA

ETO

IC Development:

An Example of Successful Transition

from Leadership to Niche Player

= Total Worldwide Semiconductor Market

= Total Worldwide Military and Aerospace Semiconductor Market

Figure 11. Integrated Circuit Development

The Task Force believes that DARPA should not provide stop-gap investments in areas

where there is commercial utility but where the commercial sector is under investing. Nor

should DARPA provide stop-gap investments to fill Service needs. DARPA’s strategy should

focus on identifying the key technology areas that will provide a distinct advantage for the

Department in establishing and maintaining enduring superior military capabilities. In some

cases this will require DARPA to take a leadership position in technology investment; in other

cases it will be more appropriate for DARPA to be a niche player. An ongoing awareness of

private sector investment strategies will enable DARPA to most effectively invest its own

resources and to change its role when appropriate.

In order to maintain leadership in the science and technology community, the Task Force

believes that DARPA needs to strengthen and tend to its external relationships on an ongoing

basis. Only by working effectively with these communities can the nation’s resources for

science and technology development be most effectively invested and DARPA’s investment

strategy successfully implemented.
25

CHAPTER 6: FINDINGS AND RECOMMENDATIONS

DARPA has been highly successful throughout its history in providing the Department of

Defense with science and technology research and development that has led to technological

superiority in the country’s military forces. Further, DARPA’s leadership in technology

development has led to the establishment of entire commercial industries. Over the decades of

its existence, the Agency’s research portfolio has changed – both in subject and in the time

horizon of its efforts – in response to both external pressures and internal Department

requirements. 

In the recent past, DARPA has focused a significant fraction of its investments on near-term 

C

4

ISR programs largely in response to deficiencies illuminated in Operation Desert Storm. 

Many of these investments have paid off and much of this work has matured and is being

transitioned to the Services to support the acquisition of new C

4

ISR systems. This emphasis

during the mid-1990s was appropriate and responded to science and technology research

priorities established by the Department’s senior leadership. 

DARPA is now at an important transition point as it moves into the 21st century. The 

adversaries of the future will be both capable and different, capitalizing on asymmetric responses 

to America’s arsenal of forces and weapons. These asymmetric threats call for a new response 

and a new investment strategy. This strategy will require transition from a portfolio biased

toward programs that address deficiencies in C

4

ISR capabilities to one that addresses emerging

asymmetric threats and the far more diverse missions that America’s military forces will be

called upon to execute.

As an agency, DARPA is capable of meeting this challenge. But it will require

improvements in a number of areas, including setting objectives and strategy, personnel,

program management, portfolio management, and awareness. The following summarizes the

key Task Force findings in these areas.

Objectives and Strategy. DARPA should establish a systematic approach to strategic 

planning that provides clear definition of long-term Agency objectives in support of

evolving national defense threats. Further, the planning process should incorporate

increased awareness of intelligence, Department of Defense, and private sector needs 

and investments. 

Portfolio. DARPA’s current portfolio has many programs with short-term focus. An

increasing fraction of the projects appear risk averse, with fewer high-risk and high

payoff, longer-term program thrusts. Moreover there is a tendency to focus too

much on early demonstrations and military acceptance. Today’s portfolio has

evolved largely in response to the Department’s emphasis on C

4

ISR deficiencies

identified after Desert Storm.

Personnel. DARPA currently provides new Program Managers insufficient training,

mentoring, corporate knowledge, and insight into military needs. Program Managers 

need to quickly come up to speed on DARPA’s goals and objectives and the
26

Department’s threats and requirements. Moreover the rotation policy, when strictly

adhered to, results in a short-term focus for many programs.

Program Management. DARPA has difficulty executing larger, multi-office and 

multi-discipline programs. Programs can experience a gap in oversight and direction

while new Program Managers focus on developing new programs; this is

exacerbated by the lack of clear program objectives and exit criteria for many

existing programs. There is limited collaboration and technical exchange among

Program Managers, particularly across offices. 

Awareness. DARPA needs to strengthen its interaction with external communities. 

Ties to the intelligence community have lapsed in recent years. The Agency’s

interaction with Congress has become largely reactive. There is no formal process

for understanding emerging military needs. Further, DARPA needs to augment its

means for understanding private sector plans, technology shortfalls, and investment 

gaps.

To address these concerns, DARPA must take the following steps:

Plan deliberately for the future. DARPA needs to strengthen its approach to strategic 

planning. The strategic planning process should be a collaboration between the

Director’s Office and the Office Directors. The resulting plan must be

communicated to the Agency’s Program Managers as well as the USD(A&T),

DDR&E, Joint Staff, Congress, and the private sector. Caution should be taken not 

to make the process too bureaucratic, and resource flexibility must be maintained to 

be able to address emerging opportunities. DARPA’s culture and approach to R&D

management is unique and draws its strength from the independence and quality of

its Program Managers. While DARPA management should regularly communicate

their strategic plans, program composition, and research goals to DDR&E, care

should be taken to not burden DARPA Program Managers with the TAP and TARA 

review processes that are used by DDR&E to coordinate the overall DoD S&T

investment portfolio.

Structure an investment portfolio and program that includes several major thrusts 

that address critical national security challenges of the 21st century. DARPA’s 

investment portfolio should include a mix of investments in technologies and

system-level technology experiments focused on new and evolving national defense

threats and warfighting concepts. The Task Force highlights six focus areas where

DARPA should significantly expand its investments: chemical and biological

warfare defense, assured information dissemination and management, counter

transnational threats, underground facility characterization and negation, affordable

precision target engagement, and unmanned and robotics warfare.

Selectively demonstrate major innovative projects and technologies. DARPA must 

retain the ability to address critical warfighting needs and demonstrate new

capabilities that require short-term investments, on a selective basis. However, the

Agency needs to be careful not to allow these near-term military deficiencies and a 

desire for immediate military acceptance, endorsement, or financial support of

DARPA’s research and development programs to bias the portfolio mix. DARPA

should continue to use and pioneer innovative contracting vehicles for prototype
27

development, and the same authority should be extended to the military sources to

allow for seamless transition of DARPA-developed systems to military-led 

acquisition programs.

Recruit highly qualified program managers from the public and private sector. 

DARPA’s rotation policy enables the Agency to maintain a staff that is constantly at 

the cutting edge. DARPA must be able to hire the most qualified Program Managers 

from the public and private sector, as well as military officers. The use of IPAs,

direct hiring from the private sector, and enough joint billets to attract the very best 

military officers are all important capabilities to ensure Program Manager quality. 

To ensure that they are effective in managing DARPA’s programs, the Agency

should develop a mentoring program that provides context on national security and

military needs, program management success and failures and that helps to transition

longer-term research and development objectives. 

Create a structure for program management that addresses the needs of longerterm programs. Flexibility in Program Manager rotation policies that allows for a

mix of short-term and selective “term extended” Program Managers, at the discretion

of the DARPA Director, can bridge gaps in oversight due to rotations, and provide 

continuity and corporate history. Along with this flexibility, DARPA needs to

develop a systematic project hand-off process to maintain program continuity. The

Agency also needs an explicit mechanism for technical exchange and collaboration 

among Program Managers and across Program Offices. In addition, there needs to 

be an increased emphasis on defining clear program objectives and exit criteria to

ensure smooth transition when research efforts are handed off from one Program

Manager to another.

Be cognizant of the external environment, developing and maintaining strong

relationships with the military, intelligence community, Congress, and the

private sector. DARPA cannot be successful if its agenda does not support and is 

not supported by the external community. Today’s environment requires DARPA to 

build and maintain these relationships with greater urgency in order to gain an

understanding of priorities, research and development agendas, investment plans,

and requirements. Visibility into private sector research and development will enable

DARPA to establish priorities for investments in technology areas with both defense

and commercial application and to develop strategies to transition from a technology

leader to a niche player as private sector investments shift. 

DARPA has a well-deserved reputation as an institution that is dynamic and successful in

defense technology innovation. By evolving to meet the challenges posed by future threats,

DARPA’s performance and reputation will remain strong. Effective leadership – in establishing

an investment strategy, maintaining an effective staff, and developing and maintaining

relationships with the outside community – is the key to ensuring that DARPA remains a leader 

well into the future.
ANNEX A: TERMS OF REFERENCE

ANNEX B: TASK FORCE MEMBERSHIP

CHAIRMAN

Mr. Vincent Vitto

Draper Laboratory

MEMBERS

Dr. Elliot Brown

UCLA

Mr. Alan McLaughlin

MIT Lincoln Laboratory

Dr. John Foster

TRW, Inc.

Dr. Vincent Mrstik

Toyon

Dr. Michael Frankel

SRI International

Mr. Robert Stein

Raytheon Company

Dr. John Hennessy

Stanford University

Mr. Dale Von Haase

Lockheed Martin

Dr. Miriam John

Sandia National Laboratory

Dr. Robert Weiss

Physical Sciences, Inc.

EXECUTIVE SECRETARY

Mr. Bruce Gnade

DARPA

DEFENSE SCIENCE BOARD MILITARY ASSISTANT

CAPT Jim Lyons, USN

STAFF

Ms. Marya Bavis

Ms. Barbara Bicksler

Ms. Julie Evans

Strategic Analysis, Inc.
ANNEX C: SUMMARY OF BRIEFINGS

OCTOBER 30, 1998

SENATOR LIEBERMAN’S OFFICE

Dr. Peter Rooney, Senior Fellow

Mr. William Bonvillian, Legislative Director and Chief Counsel

Dr. Frank Fernandez

Director, DARPA

NOVEMBER 11-12, 1998

DARPA OFFICE DIRECTORS

Dr. Noel MacDonald, Director, ETO

Dr. William Mularie, Director, ISO

Mr. James Carlini, Director, STO

Dr. Larry Dubois, Director, DSO

Dr. David Whelan, Director, TTO

Dr. David Tennenhouse, Director, ITO

Dr. Jane Alexander, Deputy Director, DARPA

DECEMBER 9-11, 1998

Mr. Dave Ream, Director, Standards of Conduct

Dr. Robert Kahn, President, CNRI

Dr. Delores Etter, DUSD, Science and Technology

Dr. Vic Reis, Department of Energy

Dr. Jeff Freidhoffer, Technical Director of Technology and Systems, NSA

Dr. Anita Jones, University of Virginia

Dr. Gary Denman, GRC International