The Pentagon just named a drone czar. Here's what it means for every unmanned systems program and every startup building one.
Maggie 00:36
In this episode of the Techquisition Edition of the Mission Matters podcast, we discuss the Pentagon's new memo establishing a Direct Reporting Portfolio Manager, DRPM, for unmanned and autonomous systems, UXS. This is a major shakeup in the way the Department of Defense will procure, test, and field unmanned and autonomous systems. So of course, David and I are here with an emergency pod to break down the memo and what it means for startups. Just as a disclaimer, we're going to use the term Department of Defense in this podcast. We recognize the department is doing business as the Department of War, but statutorily it's still referred to as the Department of Defense, so that's the nomenclature we'll be using. David, thanks so much for getting this put together on such short notice. I know we were all scrambling to figure out exactly what this memo meant last night and this morning as we were preparing for this podcast. Let's start with a basic question: can you explain what exactly a Direct Reporting Portfolio Manager is, and why create this new DRPM UXS in the first place?
David 01:46
Yeah. Awesome. Thank you, Maggie. It's great to be here on an emergency podcast, and I guess I'll save talking about the US versus Bosnia and Herzegovina matchup for somebody else as we dive into what's happening in our world. But a DRPM is basically a high-level Pentagon official with extremely wide authority across all the services and other programs that might be doing similar activities. I think the term people like to throw around in the media is a "czar" for a broad acquisition area. This memo from Secretary Hegseth establishes a DRPM for unmanned systems, or as you said, UXS. And it calls this person the single joint integrator for all unmanned and autonomous system programs across the department. In practice, this means this person officially reports to the deputy secretary and oversees every drone or robot program, from micro unmanned aerial vehicles, or UAVs, to large autonomy projects. Though, notably, it did carve out the Collaborative Combat Aircraft, which will still retain ownership inside the United States Air Force, and then the Medium Unmanned Surface Vehicle, MUSV, will still reside, I believe, in the portfolio acquisition executive, or... remote autonomous systems, robotic —
Maggie 03:21
Autonomous systems.
David 03:22
— DAE/RAS, in the Navy.
Maggie 03:26
So how exactly is a DRPM different from, say, a normal PEO, portfolio executive office, which have now been rebranded portfolio acquisition executives, or PAEs, or something like a joint program office?
David 03:41
Sure, yeah. Lots of changes in the acquisition world, and at times like this, things might feel like they remain the same, but certainly the terminology and lexicon is changing all around us. Normally, each service will have its own PEOs. Now, as you identified, PAEs, or across the Fourth Estate you see these joint offices focused on one weapon or platform, and now we're taking this more portfolio approach. The most famous example of a joint program office would be the F-35, or in the Pentagon we call it the JPO. And they report directly to the Under Secretary of Acquisition and Sustainment. So the DRPM is actually even higher up in the food chain, as they report directly to the Deputy Secretary of Defense. On the PAE side, each service has lots of these, and they're now organized around these larger buckets of portfolios, whether that's fighter vehicles on the Air Force side or different sets of technologies grouped together. And they report through their service secretary. On the Air Force side, they'd report through the Assistant Secretary for Acquisition, or as I know it, SAF/AQ. And then, as kind of alluded to, these DRPMs are across all the service chains and can downward-direct on priorities and standards, and even reprogram funding within certain limits as designated by Congress. So in the example of the DRPM UXS, they'll take precedence on all acquisition matters related to unmanned system programs, and report directly to the Secretary of Defense and the deputy. So effectively, they're becoming their own milestone decision authorities — almost above your traditional program acquisition and portfolio acquisition executives, who are also milestone decision authorities for their respective programs. So there's a lot of crosscutting and matrices across these different reporting chains.
Maggie 05:53
So are the DRPMs going to be the organizations in charge of the budgets for these different programs? Are they the ones making decisions on who actually wins these contracts?
David 06:03
So in the short term, yes. They're going to be working in concert with a lot of these program offices, or PAEs, that are already underway. I recall listening to General Guetlein — that was the first DRPM stood up, for Golden Dome, around our missile defense architecture — and he has highlighted the fact that he can reach into Space Force or into the Missile Defense Agency and redirect a lot of their initiatives and activities to make sure it's tracking towards a holistic architecture. And in the case of these unmanned systems, whether it's aerial, ground, or maritime, making sure that we are leading up to certain standards — data links, not allowing the services to have as much autonomy, which then might lead to a situation where certain assets are unable to communicate with each other because those platforms or programs were developed in isolation from the other services. And as we know, in a joint force, if our systems and platforms aren't able to communicate with each other, then the whole is less than the sum of our parts. And so for this DRPM, the intent is they can downward-direct certain things to occur that maybe otherwise wouldn't, or would have to be reworked after they're already fielded, which is a huge problem across the department.
Maggie 07:39
Is there any precedent for this kind of setup?
David 07:42
I like the example of JIEDDO — the Joint Improvised Explosive Device Defeat Organization — which was established in 2006. So go back to 2006, and we're at the height of the wars in Iraq and Afghanistan, and our adversaries are using a lot of IEDs, improvised explosive devices, and causing havoc across our ground forces. And so JIEDDO was stood up to figure out a solution, and came up with the Mine-Resistant Ambush Protected vehicle, the MRAP. Now JIEDDO no longer exists — eventually it was turned into JIDA, which then got folded into DTRA, the Defense Threat Reduction Agency. I recall at the end with JIDA that they were doing a lot of counter unmanned aerial systems work, counter-UAS. So it's kind of ironic that now we're skipping forward, and the department is once again putting forward a joint organization — now what we're calling a DRPM — to tackle some of these same issues we've been dealing with all the way back to the mid-2010s.
Maggie 09:05
And are there any more recent examples of these DRPMs being used?
David 09:10
So I alluded to General Guetlein, who is leading Golden Dome, and that was the first DRPM stood up last year. And then there were a few others. We had the submarine acquisition DRPM, and then in the Air Force, General Dale White — he's in charge of strategic air systems, which includes the B-21, the F-47, Sentinel, and maybe a few other programs. But essentially, what we're seeing is a prioritization of certain programs that the deputy secretary has decided to put their thumb on the scale for, taking it out of the services themselves. So with the B-21 and the F-47, you'd expect the Department of the Air Force to have senior control and just report to the deputy and the secretary. But in this case, it's like: "Not so fast — actually, we're going to pull it out." The funding still resides in the budget line of the Air Force in the case of the B-21 and F-47, but OSW, or OSD, has decided we're going to take a hard, fast look at this alongside you.
Maggie 10:23
What are some of the other changed authorities with this new DRPM?
David 10:27
Yeah, so the memo grants pretty broad planning and oversight powers. The DRPM, for example, will provide oversight and authoritative direction for programming, planning, and budgeting for all unmanned system programs. It gets direct input related to all the different program elements, or PEs, across the president's budget, and can direct changes to the service budget submissions in coordination with DCAPE and the comptroller. So it certainly gives them a lot of latitude across existing budgets and funding. You might recall that the Defense Autonomous Warfare Group, otherwise known as the DAWG — the president's budget requested, I think, fifty-four billion for fiscal year '27, starting October 1st. We'll see how that ends up shaking out in the appropriations bill. I know HAC-D came out with a mark, and we've seen some marks from HASC and SASC, and it's not nearly to the level of fifty-four billion. So whether or not the unmanned systems DRPM has the ability to execute across these different lines of effort really depends on whether Congress is putting funding into these program elements that the DRPM is taking oversight and control over.
Maggie 11:52
Let's back up here for a minute. I feel like every six months or so, there seems to be a new initiative coming out related to how the Pentagon is going to acquire and field drones and other autonomous systems. During the Biden administration, we had Replicator, that ultimately turned into the Defense Autonomous Warfare Group, or DAWG, under Special Operations Command. We had the Drone Dominance Initiative. We had JIATF-401 — that's the Joint Interagency Task Force 401 — which is specifically focused on counter-unmanned systems. How does this DRPM fit into all those other initiatives, and why is the Pentagon so focused right now on unmanned systems in the first place?
David 12:34
Maybe I'll answer the second part first. Realistically, drones have gone from fairly niche to ubiquitous, and I think we're seeing a lot of that because of the war in Ukraine. Certainly on the counter side, we're experiencing that firsthand with Iran and across the Strait of Hormuz. And so I think this memo is sort of a reflection of that speed — it even calls that out in the memo — to start fielding these systems even faster. Now, whether the problem is organizational or not, I think it just shows the importance the department is putting on getting these unmanned systems out there faster. And as the memo highlights, the DAWG, JIATF 401, and Drone Dominance — given that its focus is on group one, group two UASs — are all going to now fall directly inside the purview of this DRPM. So the Army is going to have a major role, specifically on Drone Dominance, which was also being co-led with the Defense Innovation Unit. Same thing goes for JIATF 401. And then a lot of these unmanned surface vehicles for the maritime dominance domain, which was spearheaded by Replicator and now, I think, falls under the DAWG and Task Force Able — that's all going to come under the oversight of this DRPM, which I think just gives it more emphasis across the secretary.
Maggie 14:11
One of the things I find so interesting about drones and unmanned systems is this is not a new technology. We've been using these unmanned systems in warfare for several decades now, at least since the War on Terror, if not before that, in Vietnam and elsewhere. But the way we've used these systems has not really changed, despite there being huge leaps in the underlying technology — the cost of robotics hardware like motors, cameras, actuators. They're much cheaper, much better than ever before. We have meaningfully better edge compute than ever before. We've seen huge improvements in computer vision, in AI, in controls software — and yet we still seem to be treating these systems like the old Reaper and Predator drones we had in Afghanistan, Iraq, and elsewhere.
David 15:02
Yeah, I think you bring up a good point. It feels like we just took a hard paper copy and digitized it — you fill it out the exact same way, just on your computer instead of by pencil — not really taking advantage of the underlying opportunities that being digitally native would provide. And trust me, I've been on programs where the MQ-9, the Reaper drone, has certainly gotten better. But it's a far cry from where we're seeing commercial technology advancing. And a lot of this comes down to the tactics, techniques, and procedures, and the concept of operations, and how we think about employing these systems. So my hope is that one piece of this unmanned systems DRPM is really thinking through how we exercise and operationalize this technology, and ultimately change the nature of how we train and think about fighting. It's certainly changed the battlefield in Ukraine, and I've got a lot of friends who have just come back from there not too long ago — and certainly we have an investment that was born out of Ukraine in the company called UFORCE. The drones have changed the character of war in a major way, and I'd say this DRPM is maybe getting after that in a more emphatic manner.
Maggie 16:33
What exactly is the Defense Innovation Unit's, or DIU's, role in this new DRPM's initiatives? And more broadly, how is DIU's role changing in terms of managing autonomous systems and unmanned systems for the department?
David 16:48
Yeah, so going back to one of our earlier Techquisition Edition episodes, we talked about the acquisition transformation memo that had come out, I think, in the November timeframe. Emil Michael, the Under Secretary for Research and Engineering, has been very fixated on consolidating some of the innovation organizations. The Defense Innovation Unit was made a field activity, reporting directly to the CTO, or Emil Michael himself. But for the purposes of this program, the memo actually explicitly calls out DIU at least twice, and the main piece is that DIU will serve as the primary industry engagement interface between the Department of War and the commercial industry for all unmanned and autonomous system programs within the DRPM unmanned systems portfolio. So I think what you're going to see is DIU playing a front-and-center role — the front door for industry — engaging across a lot of these different contract opportunities, solicitations, and prize challenges — the things DIU does best — as a means to, one day, show off your capabilities to the department, and ideally that results in prototype contracts, production contracts, and maybe, at some point, programs of record.
Maggie 18:15
Let's talk about the budget. What has Congress actually funded for Replicator, DAWG, JIATF 401, and the other programs that are now going to be under this DRPM?
David 18:27
Sure. Yeah, I think we've got to go back to the beginning with Replicator, when it was announced by then-Deputy Secretary of Defense Kathleen Hicks. They had to repurpose fiscal year '24 RDT&E funding, and then they tried to reprogram significant other pots of funding. It wasn't until fiscal year '26 that the budget for the Pentagon added $225 million for the DAWG, and now FY27 is coming around. We already mentioned the president's budget, which tried to ramp it up to over $54 billion — with a B — for the DAWG. At the same time, the JIATF 401 program is getting hundreds of millions of dollars to execute its counter-UAS program. And whether or not programs like the Medium Unmanned Surface Vehicle are tied to any of these is a little challenging to understand and figure out. But needless to say, I think what we're going to see is significantly more funding going after these projects and programs, and that aligns with the $1.5 trillion top line — the base budget of $1.15 trillion plus the $350 billion in reconciliation. Of course, it's still yet to be seen how that plays out for FY27. But needless to say, if you're a company, this is definitely a space to look out for, where I think greenfield activities are going to thrive, assuming your technology works and is poised to scale.
Maggie 20:11
And of course, this all relies on Congress actually passing a budget this year.
David 20:15
Indeed. With the midterms — I'm no prognosticator — but we've had a continuing resolution most years, unfortunately a few years with a government shutdown, and very few budgets passed on time. So a betting man would likely say the continuing resolution. I put it to my sweat-equity counterparts a few weeks ago, and most people thought we wouldn't get a budget until after Thanksgiving.
Maggie 20:46
What should startup founders and investors make of all of this? Any immediate advice?
David 20:53
Yeah, at the end of the day, if you're a company, ideally you've found a champion or a stakeholder somewhere in the department who is aligned to the mission of your unmanned system. Keep them close. But recognize that there are going to be more stakeholders engaged in some of the decision-making. With that burden, I think comes additional opportunity, because these stakeholders are now probably going to get faster-aligned around the meritocratic solutions that are poised to scale. So it might be more work, and things might be a little bumpy in the near term, and it wouldn't surprise me if certain contracts that were deep into an RFP cycle, and maybe out for negotiations, potentially get held up. At the same time, for those ongoing competitions, seeing additional oversight from OSW and other stakeholders tied to this DRPM probably means that moving to production is going to be of significantly more value. At the same time, we're in July, so we're headed towards the end of the fiscal year. The two-year fiscal year '25 RDT&E funding is poised to expire, and the FY26 operations and maintenance funding is set to expire. So maybe contracts being negotiated right now will still get awarded because of all these parameters around fiscal law. But come next fiscal year, I'd expect to see some larger programs being announced, and with it, a large, sizable slate of stakeholders. So make sure your program office or your user advocate is engaged in this new DRPM. And if the Defense Innovation Unit isn't part of your engagement outreach, and you've got a capability that's ready to be demonstrated, you should definitely be engaging.
Maggie 23:07
Great. Well, David, thank you so much for sharing all these insights. As we always end these podcast episodes — what do you think will be the next Techquisition Edition of the Mission Matters podcast?
David 23:19
Well, truth be told, Maggie, I think we're maybe a little delinquent on behalf of our listeners — we probably should have done one on some of the NDAA bills that came out of HASC and SASC, and then there was a HAC-D bill as well. What I will tell our listeners is Maggie and I are planning something special, which is maybe why it's taking a little longer. So maybe not an emergency podcast, but it should be fairly informative. That's what I think our next one will be.
Maggie 23:52
Great. Thanks so much, David.
David 23:54
Thank you.