Procurement: November 12, 2002


In 1999, the CIA put up the money for a new venture capital company; In-Q-Tel. The reason was that the CIA has noted technology was developing so quickly that the usual, rather leisurely pace of government procurement was unable to keep up with it. By the time the CIA was able to get their hands on some new electronic or software gadget, it was made obsolete by an even better bit of gear. This was no big deal during the Cold War, when the Russians had their own, even more slothful, procurement bureaucracy. But now there were a lot of new players out there who had not yet learned how to slow down the procurement process. During the 1990s it was noted that potential foes like China were zipping right along when it came to noticing new technology and putting it to work for their military and intelligence services. Established procurement bureaucracies tend to be risk averse. That is, they are more afraid of making a mistake than getting things done. This has been going on for thousands of years. But new technology is developing so rapidly in the past century that such inability to seize on new techniques can be fatal in wartime.

The CIAs new venture capital operation has, in the past three years, reviewed over 800 proposals (business plans) and agreed to fund 23 of them. As a result, five new  technologies (so far) have been added to the CIAs intelligence arsenal. In-Q-Tel did this by looking for technology developers who had ideas the CIA could use right away, and had some commercial usefulness as well. If the developers were willing to develop their ideas initially to provide something the CIA could use right away, they would be the cash they needed to get started. The Department of Defense has noted the success of this approach and is trying to develop something like In-Q-Tel. But the Department of Defense is a large organization, and risk averse. Although DARPA (Defense Advanced Research Projects Agency) has, for decades, funded new ideas, this was not done with the idea of obtaining quick results. The idea of doing something like In-Q-Tel is attractive to many in the Department of Defense, but it is not the sort of thing that usually works in that huge organization. Check back in three years to see if anything comes of this new enthusiasm for venture capitalism. 


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