FY21 NDAA: National Security Innovation Base and Research Security Proposals

Publication date

This bulletin reviews provisions proposed for inclusion in Congress’ annual defense policy update that are focused on bolstering the “national security innovation base” and protecting federally funded research from exploitation by rival governments.

Senate Armed Services Committee Chair Jim Inhofe (R-OK).

Senate Armed Services Committee Chair Jim Inhofe (R-OK).

(Image credit – Office of Sen. Inhofe)

The National Defense Authorization Act (NDAA) is the only major policy bill that Congress commits to passing annually and comprises a sprawling array of provisions that are crafted by the House and Senate Armed Services Committees, supplemented with amendments introduced by individual lawmakers. These provisions touch on all aspects of national security, with many aiming to strengthen the defense R&D enterprise, promote specific military technologies, and bolster U.S. nuclear security.

The House and Senate approved their separate versions of this year’s NDAA at the end of July on votes of 295 to 125 and 86 to 14, respectively. A conference committee is expected to convene this fall to hammer out a final version.

This bulletin reviews broad proposals from the legislation and its accompanying committee reports that relate to defense-sector innovation, talent recruitment, and the protection of research from exploitation by rival governments. Throughout, references to corresponding bill section numbers and report pages are indicated in brackets.

Subsequent coverage will address proposals focused on particular technologies, DOD laboratories and research personnel, extramural R&D activities, and STEM education, among other matters.

National security innovation base

Congress has sought to use recent NDAAs to bolster DOD’s ability to develop new technologies and transition them rapidly into acquisition programs, and this year it is turning to focus more intently on innovation in the private sector. This includes the traditional stable of contractors known as the defense industrial base, but also the broader network of commercial suppliers and startups, academic researchers, and others now commonly referred to as the “national security innovation base.”

In an op-ed last December, Senate Armed Services Committee Chair Jim Inhofe (R-OK) explained,

The fact that many technological developments will come from the commercial sector means that state competitors and non-state actors will also have access to them, a fact that risks eroding the conventional overmatch to which our nation has grown accustomed. Maintaining the department’s technological advantage will require changes to industry culture, investment sources, and protection across the national security innovation base.

Toward this end, the fiscal year 2019 NDAA enacted sweeping reforms to export control policy and the U.S. government’s mechanisms for controlling foreign investments in U.S. companies. This year, the Senate and House bills lay groundwork for additional policy shifts that encompass efforts to promote private-sector innovation and talent recruitment alongside broader changes in DOD’s acquisition strategy and U.S. trade and economic policy.

Assistant secretary position. The House proposes establishing a new position of assistant secretary of defense for industrial base policy that reports to the under secretary for acquisition and sustainment. Among other responsibilities, the assistant secretary would address issues relating to “international defense technology security,” export controls, independent R&D conducted by contractors, and access to critical materials. [Sec. 902] The Trump administration “strongly objects” to this proposal on the grounds that it conflicts with DOD’s existing policy apparatuses.

Policy recommendations. The Senate bill would direct the under secretary for acquisition and sustainment to recommend executive, regulatory, and legislative steps needed to implement a 2017 executive order on strengthening the defense industrial base. These recommendations would cover technology challenge prizes, recruitment of foreign talent, and graduate education policy, as well as an array of economic, financial, and trade policy tools. [Sec. 801] A separate provision would require DOD to assess the national security innovation base, touching on similar matters, including immigration policy, intellectual property law, and the federal R&D tax credit. [Sec. 802]

International partnerships. The Senate would also direct DOD to identify relevant “technologies, companies, laboratories, and factories” within the national technology and industrial base (NTIB), a term referring to U.S. defense technology alliances with Canada, the United Kingdom, and Australia. The same provision would grant DOD authority to enter into cooperative R&D agreements with NTIB members and establish a “regulatory council” to address policy issues pertinent to improving cooperation within the NTIB. [Sec. 803]

Innovation initiatives. The House proposes cementing in statute the National Security Innovation Network, a program formerly known as MD5 that DOD established in 2016 to promote collaboration between the department, universities, and technology startups. [Sec. 215] DOD proposed eliminating the program in its latest budget request. Another provision would create an advisory board for National Security Innovation Capital, an as-yet unfunded activity that would invest in hardware technology startups to counterbalance the influence of investors based in rival nations. [Sec. 218]

Nuclear security industrial base. The House report asserts that the National Nuclear Security Administration lags DOD in monitoring its industrial base and directs it to make plans to do so “consistently and strategically.” The report notes the agency has identified difficulties stemming from the small scale and irregular nature of its parts procurements, its exacting performance requirements, and “intense foreign competition.” [p. 308]

Chinese industrial base. The House proposes initiating a study of China’s defense industrial base, focusing on manufacturing capacity, capability gaps, workforce skills and education, and supply chain integrity, among other matters. The study would also recommend ways the U.S. could erode the ability of China’s industrial base to meet that country’s national objectives “in the event of a conflict.” [Sec. 1255] A separate provision would direct the National Institute of Standards and Technology to commission a study of China’s growing influence over international engineering standards for emerging technologies. [Sec. 1705]

Research security and talent recruitment

Over the last two years, Congress and federal agencies have become increasingly aggressive in identifying Chinese talent recruitment programs as inimical to U.S. national security interests. The FBI has asserted such programs function as conduits for the misappropriation of federally supported research and a number of researchers have been fired or prosecuted for allegedly concealing their connections to them. At the same time, though, DOD has emphasized that recruiting foreign researchers is important for fostering innovation related to U.S. national security goals.

Chinese vs. U.S. recruitment efforts. The Senate proposes initiating a National Academies study to compare U.S. and Chinese efforts to “recruit and retain domestic and foreign researchers.” The study would list and characterize Chinese talent programs as well as U.S. incentive programs, and analyze the types of researchers and fields they target. It would also estimate how many individuals are participating in them and how many researchers they target in academia and in DOD and NNSA labs. [Sec. 232]

Disclosure of support. The House proposes that federal science agencies uniformly require prospective recipients of grants or cooperative agreements to disclose “all current and pending support and the sources of such support at the time of the application for funds.” The provision defines “support” as “all resources made available to an individual in direct support of the individual’s research efforts, regardless of whether such resources have monetary value, and includes in-kind contributions requiring a commitment of time and directly supporting the individual’s research efforts, such as the provision of office or laboratory space, equipment, supplies, employees, and students.” To address violations, agencies would be empowered to take actions of varying severity, including permanent disbarment from funding and referral to federal law enforcement agencies. Federal science agencies have recently been tightening up their disclosure requirements and the provision would also direct the White House Office of Science and Technology Policy to ensure the consistency of policies across agencies. [Sec. 229]

Researcher vetting. Last year’s NDAA directed DOD to establish “streamlined procedures” for collecting information on participants in R&D activities it funds, except for those engaged in “basic research.” The House bill would remove that exception. Some Democrats unsuccessfully attempted to block the addition of this provision in committee deliberations. [Sec. 1264]

Academic liaison. The fiscal year 2019 NDAA established a DOD “initiative” to support academic institutions’ research security efforts. The House proposes that the under secretary for research and engineering designate an official responsible for liaising with the academic and research communities. [Sec. 233] The Senate bill includes a provision clarifying that the initiative should include briefings for academic officials on espionage risks. [Sec. 1285]

Employment restrictions. The Senate proposes requiring DOD to develop mechanisms for restricting current or former employees of the defense industrial base who work on certain critical technologies from working directly for companies wholly owned by, or under the direction of, the Chinese government. [Sec. 891]

Threats from foreign institutions. The House proposes that DOD publish in the Federal Register a list of “foreign talent programs that pose a threat” to U.S. national security interests. [Sec. 228] A separate provision would require DOD to update and make public a list required by last year’s NDAA of Chinese and Russian academic institutions deemed to pose a national security risk. [Sec. 1264]

Chinese–Russian scientific exchanges. The House report directs DOD to assess exchanges of scientists, engineers, academics, and other technical professionals between China and Russia as part of a broader study of ties between the countries. [p. 214]

Innovation base recruitment. The House proposes that DOD explore creating a talent recruitment program for the national security innovation base. The study would cover mechanisms for engaging institutions of higher education, monetary and nonmonetary incentives, and vetting of recruits. It would also assess the number of individuals needed to advance competitiveness in “critical technologies” identified in the National Defense Strategy. [Sec. 265]

National security immigration program. The House proposes creating a new immigration category for scientific or technical experts who are specially endorsed by the secretary of defense. The program would admit up to 10 individuals per year through fiscal year 2030 and 100 per year thereafter. [Sec. 281]

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