November 2, 2007 by jimstogdill
DISA Announces $2.5B Fund for Netcentric Transactions
In an effort to create a market dynamic to encourage NetCentricity within the Department of Defense Command and Control community, the Defense Information Systems Agency announced today that the $2.5B Net Enabled Command and Control program has been reprogrammed as the Defense Information Mobility Encouragement (DIME) fund.
The DISA press release describes DIME as a new approach to achieving NetCentricity; one where market incentives similar to those found in a commercial market will replace the centralized-program-oriented approach taken to date. It is a simple concept, beginning in FY 08 DIME will pay $.10 to any C2-related Program of Record for each and every service oriented transaction that it suppports during the five year period of the original NECC increment one. The idea is to encourage NetCentricity while leaving the door wide open for innovation by creating an additional funding stream for those programs that achieve adoption for their services.
Despite the bland bureaucratic language of the release, this is an amazing announcement. It is an unprecedented admission of the value of market forces in guiding co-evolutionary systems development in an enterprise too large to effectively centrally plan. While DIME doesn't eliminate policy and requirements such as Net Ready Key Performance Parameters, it fundamentally changes the drivers to achieve compliance. The faster a program operationalizes services, the faster it can start servicing transactions and get paid. Though the NRKPP's will still be verified, the spirit of the NRKPP's will be primarily tested by transaction adoption and volume.
DISA doesn't say it, but I suspect that they are also hoping that this approach, by being a funds multiplier to programs that are serving a broad customer base, will reward well-managed programs at the expense of those that don't grow their base.
I don't think it will take long for a more granular payment scheme to evolve as this approach will clearly benefit high frequency services such as situational awareness more than lower-frequency capabilities such as planning. I'm sure DISA will have to be nimble to evolve the program as high transaction rate designs are floated to game the fund, but despite these nits, I applaud DISA for taking a step that recognizes a dime of incentive can be more effective at achieving their goals than pounds of policy.
Implied in the new fund is the sheer scale of DISA's expectations; $2.5B will pay for 25 billion transactions.
Update (11/6/07): I guess the smiley face wasn't enough so it's time to come right out and say that this post is a farce. There is no "DIME" program but I can't help but think that a little bit of Adam Smith Invisible Hand would go a long way toward reducing the need for complex centralized planning as we move toward NetCentric systems. The question is, what simple incentives might make viable substitutes for the missing market economy that serves as that hand throughout the rest of our economy? Note the comment on centralized planning here.