Emil Michael, undersecretary of defense for research and engineering, directed the Pentagon’s Science, Technology and Innovation Board to examine how the department can adopt commercial artificial intelligence (AI) and cloud services on classified networks and improve the organization of its digital solutions engineering and software delivery activities.
In an Oct. 27 memorandum, published Oct. 30, Michael tasks the board with assessing the technical, security, and acquisition requirements for commercial providers bringing digital services into classified environments.
The review will examine the feasibility of common security authorizations, whether existing procurement regulations adequately support commercial services, and the organizational roles and authorities needed to address adoption barriers.
The directive also calls for evaluating structural changes to digital solutions engineering within the Office of the Secretary of Defense. Options include establishing a new defense agency or field activity, integrating functions into an existing organization, consolidating development responsibilities within existing staff organizations, or improving current structures and authorities.
Michael framed the study around the need to reconsider legacy organizational arrangements, acquisition processes, and approval frameworks.
“All-domain dominance is underpinned by rapid, nimble, and leading-edge digital hardware and software acquisition and engineering practices. Organizational structures that are excessively siloed, hierarchical, or hidebound by cumbersome processes may prove unequal to this imperative,” the memo states.
The board’s Permanent Subcommittee on National Security Innovation will conduct the study, examining both how the Department of Defense (DOD) organizes digital solutions engineering and software delivery and how it can adopt commercial AI and cloud services on classified networks.
Examining cloud services on classified networks
As part of that work, the subcommittee will assess the strategic and operational benefits of using commercial cloud services on classified networks, including applications, infrastructure, data, AI, and computing resources.
Its assessment will extend to how vendors obtain authorization, network access, and accounts to build, certify, procure, and sustain those services. Technical questions include physical facility requirements, computing and networking infrastructure, and mechanisms for vendors to access customer data across classified network environments.
Security approvals are another focus. The study will examine requirements for offerings that serve multiple military departments, DOD components, and defense intelligence organizations simultaneously, including authority to operate processes and the feasibility of a reciprocal or common authorization framework.
The acquisition review will consider whether the Defense Federal Acquisition Regulation Supplement and the department’s Financial Management Regulation adequately support these purchases. It will also examine barriers facing small businesses and nontraditional defense contractors and approaches that could help those companies compete.
Weighing software delivery changes
The organizational review will assess the responsibilities and deliverables of existing software delivery organizations, limitations imposed by enterprise data management platforms, resource allocation, and integration with departmentwide digital initiatives.
For each organizational option, the study will weigh advantages and disadvantages, costs, resource implications, and lessons from industry and academia. Recommendations must also address governance, including AI model management, and acquisition authorities that could support faster engineering and deployment.
Section 907 of the fiscal year 2026 National Defense Authorization Act requires a comprehensive study of the organizational structure best suited to align digital solutions engineering and software delivery across the department, the memo notes.
The study will begin by Nov. 26 and conclude within 12 months, unless an extension is granted, according to the memo.
It follows a DOD innovation-office realignment in January, which centralized technology and innovation oversight under Michael and grouped key organizations into an innovation ecosystem.
The Trump administration refers to the DOD as the War Department.