Breaching the Department of Defense's Biotech Bottleneck

Supply of Materials

Historically, the United States has been a leader in advances in the biological sciences, and the ability to meaningfully engineer biology is driving rapid innovation in biotechnology and growing a robust industrial US bioeconomy. Other countries are aggressively investing in similar capabilities, with the goal of dominating this fourth industrial revolution. Maintaining competitiveness and ensuring the security of the domestic bioeconomy is thus vital to maintaining the economic health of the United States. As well, the bioeconomy has important implications for the US defense industrial base, which has been steadily declining in recent decades. ¹⁰ The 2017 National Security Strategy delineates the importance of a stable and reliable industrial supply chain:

A healthy defense industrial base is a critical element of U.S. power and the National Security Innovation Base. The ability of the military to surge in response to an emergency depends on our Nation's ability to produce needed parts and systems, healthy and secure supply chains, and a skilled U.S. workforce. ¹¹

In response, the White House issued Presidential Executive Order 13806 on “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States.” ¹² Last year, a report in response to the executive order ¹³ highlighted specific concerns that were echoed by the Pentagon's own annual study of domestic defense capabilities, which stated, “long-term trends continue to threaten the health of the industrial base, limit innovation, and reduce U.S. competitiveness in the global markets.” ¹⁴

These studies emphasize the current reality that construction and resupply of many fielded defense systems are vulnerable to sole source suppliers in Asia and Europe, and existing domestic suppliers are fragile or nonexistent. Defense leadership must accept that biomanufacturing represents an untapped and affordable alternative to bolster domestic capacity. Today's technology can minimize reliance on expensive petrochemical production and provide a flexible bio-based alternative if the defense enterprise can mobilize to invest in and craft the proper coalitions. Creation of reliable, robust, and secure domestic supply chains could be supported in a number of ways.

The DoD should continue with efforts to establish a Manufacturing Innovation Institute under the MANTECH office in the Office of the Secretary of Defense (OSD). This effort is the cornerstone of the associate director for biotechnology and is part of an overall modernization strategy to build a defense biotechnology ecosystem. That biotechnology ecosystem will focus on pursuing breakthrough technical capabilities, building a domestic core capacity, securing the related data as a strategic operational resource, and shaping a biotechnology-capable manufacturing and acquisition process.

Through the efforts of the Office of the Deputy Assistant Secretary of Defense for Industrial Policy, which seeks to ensure secure, resilient, and innovative industrial capabilities on which the DoD can rely in an era of great power competition, the DoD is bolstering efforts to ensure the secure supply of critical chemicals used in DoD systems. A focused effort from this office to use authorities granted to it under its Title III program would contribute to sustaining defense bioeconomy initiatives and support policy outlined in Executive Order 13806, 2019 NDAA language, and upcoming legislation. ¹⁵

The DoD should continue its support for the development of standards and measurement tools to break bottlenecks in scale-up production and commercialization. These areas have become prominent risks for advancement of the US bioeconomy. ¹⁶ Standards and measurements are necessary components of approaches and best practices that lead to the consolidation of successful industry platforms that can perform at scale. Not only are standards required for the physical cellular components of the scale-up process, but standard ways of depicting and describing engineered constructs in computational language are needed; just as a common language is used to represent electronic circuits, a similar standard will need to be developed for engineered biological circuits. The DoD is already taking a lead on the potential development of manufacturing standards, ¹⁷ which will go far to advancing the US bioeconomy writ large—namely, reducing the risk taken on by industry.

Finally, serious vulnerabilities regarding the security of the US bioeconomy exist in the area of protecting innovations and securing supply chains from adversaries such as China. Not only were these issues highlighted in the White House report, but they have also been demonstrated, from the level of academic research misconduct, ¹⁸ through industrial espionage. ¹⁹ Through the DoD contractor certification process, best practices should be developed by the US bioeconomic industrial base—not only to ensure secure supply chains, but also to ensure secure intellectual property and corporate surety protections on many levels (financial, physical, cyber, and personnel/insider threats).

Incompatibility with DoD Acquisition Processes

As noted, we have studied the current synthetic biology industry ecosystem. ⁹ We found that the bioeconomy's industry space is spread out in horizontal tool sets innovated by small companies developing products such as synthetic DNA, gene editing tools, protein engineering, and laboratory robotics. The small companies provide tools to the broader, traditional vertical sectors, including fuels, chemicals, materials, and pharmaceuticals. Many are making tools that are not end products but are instead tools or materials that go into final products that DoD needs and that could be critical game changers. Defense programs purchase end products and are not structured to purchase enhanced ingredients or additives that are likely to be outcomes from traditional biotechnology companies.

Moreover, because DoD's acquisition life cycle ²⁰ is a structured process, featuring materiel analysis, maturation, manufacture, and deployment phases, it is a profound mismatch for the current synthetic biology industry ecosystem. Most small synthetic biology companies, while offering innovations that DoD wants to utilize, cannot hope to traverse the full DoD acquisition landscape within a reasonable time frame. It is in the traditional sectors where most DoD performers are, despite mandates to use small companies (as required by the Small Business Innovation Research [SBIR] program). Eventually the biotech industry may coalesce and naturally drive toward validated, standardized platforms housed within large company performers that DoD could utilize, but this path is not clear and could take more time than DoD has if it is to outpace its adversaries.

DoD has internal organizational obstacles that hamper the adoption of horizontal technology insertion areas such as biotechnology. DoD's acquisition process is designed to channel technology development into programs of record that draw resources from formalized funding processes necessary to manage a complex array of systems across the services. Unfortunately, program management offices whose success is measured by cost and performance are not incentivized to invest in cross-cutting technologies like synthetic biology, nor could they, given that the funding allocated to their offices is authorized for advanced development and fielding.

Furthermore, unless the programs fall under a Joint Program Executive Office that has tri-service responsibility, there is little push for one service to invest in another service's needs, leading to additional stovepipes. Even when you have a joint program office (such as exists within the Joint Program Executive Office [JPEO] for the Chemical Biological Defense Program), the programs of record are constrained by documented underlying requirements that limit their ability to innovate beyond achieving critical performance capabilities. ²¹ For these and many other reasons, the DoD acquisition process de-incentivizes the investment in cross-cutting capabilities such as biotechnology. As organized today, DoD is hobbled in its capacity to harness the value of the biological revolution sweeping across other global industries. All these represent current challenges for the US synthetic biology industry and the bioeconomy writ large.

What Can Be Done?

Despite the dire observations regarding the DoD's need to ensure a robust domestic supply of materials and the stark reality regarding the friction of traditional DoD acquisition processes with commercial biotechnology, there are signs that defense leadership is moving to bridge gaps. Investing in a manufacturing innovation institute, establishing senior leadership in biotechnology at the OSD level, and establishing a biotechnology community of interest are solid steps toward moving the pieces on the board for action. These efforts are important, but in the absence of resolving shortfalls in domestic manufacturing capacity and channeling the defense laboratories toward unified purpose, they are unlikely to be sustainable. The companies that flock to defense institutes will reap the benefits and will make the US bioeconomy more robust, but their attention to defense priorities is likely to be fickle and will dissipate once the DoD's checkbook shifts to other priorities. Investing defense funds will strengthen US competitiveness in the global biotechnology market, but will it translate into lightweight vehicle armor, a reliable domestic supply of propellants for cruise missiles, and next-generation vaccines to protect against biological weapons?

We suggest that strengthening the domestic biotechnology commercial industry is a crucial first step, but that without resolving the infrastructure and business mismatch issues identified here, the companies will quickly gravitate to nondefense sectors. Companies are motivated by other factors, and there is greater profit and less complexity in commercializing cosmetics, synthetic cannabinoids, and impotency drugs. We contend that the next steps should include a defense-wide consideration of an expanded role for the established tri-service defense laboratories and their collaborative role working with industrial partners. These labs have a singular focus on the DoD mission that should be channeled toward common purpose in concert with industry. Industry cannot translate life science advances into defense applications because they are not designed to do that, and the defense biotechnology applications with the most impact are not off-the-shelf products that can be purchased with a credit card. We contend that defense laboratories play a crucial role in channeling biotechnology toward defense programs, and if DoD is to be successful in harnessing biotechnology, then collaboration constructs must be established to bring government defense labs together with academia and industry. Framing these initiatives as pilot programs that draw talent from across the tri-service laboratories and resourcing from discovery to field testing could be a low-risk way to exercise these initiatives in a flexible manner. It is worth noting that for a pilot program of this nature to succeed, talent management of civilian scientists at defense labs may require temporary authorities to hire and retain personnel in crucial areas such as data management, synthetic biology, and chemical engineering.

Funding and collaboration models are also important areas to consider. There are many large-scale defense contractors that could partner collaboratively with smaller biotech innovation partners. This may be showing initial promise already, as companies like Lockheed Martin are using the Army's Open Campus model ²² to collaborate with universities, small business, and the army to create bio-based materials. ²³ Defense authorizations have allowed the use of “other transactional authorities,” intended to fund prototypes or pilot innovations for DoD by nontraditional defense contractors. The risks of using these authorities, which go outside of traditional defense funding rules and caps, include inflated cost requests on the part of applicants, many of whom are still traditional vendors. ²⁴ That said, DoD could explore the use of other transactional authorities within proscribed award caps, use judicious administrative oversight with milestones, and stipulate sole source awardees for very specific prototype biotechnologies.

Funding models for biotechnologies have also evolved over the past few years, with increasing dollars invested by venture capitalists, ²⁵ spurring innovation through support of start-ups and incubators. That noted, most of the venture capital is focused on information technologies and digital tools, rather than novel biotechnologies. ⁹ Another aspect of this would be for DoD to proactively engage with venture capitalists that directly support traditional DoD industries, particularly for DoD products that could be licensed for commercial use.

Conclusion

To summarize our recommendations about maximizing the defense potential offered by the biological revolution, we suggest the following:

DoD should launch a pilot program in the biotechnology ecosystem to test new governance and engagement concepts over the life cycle of several exemplar products, from discovery to fielding. The overall effectiveness of the ecosystem could be assessed and adjusted based on the success of the pilot outcomes.

In order to provide an acquisition environment that is more compatible with the current bioeconomy landscape, we suggest:

Action in these key areas could make the difference in the short term as to whether “defense biotechnology” will become a revolutionary reality or a continuing aspiration.