Industry’s IR&D is a key source of innovation for the DoD. In 2010, under the Under Secretary of Defense for Acquisition, Technology and Logistics' Better Buying Power (BBP) initiative, DoD staff engaged with industry and government to determine how to improve IR&D effectiveness. The key challenge identified was communication–industry wanted information about Department investment priorities to help them better align their R&D, and DoD planners had limited insight into industry IR&D.

On 30 January 2012, the Department issued an update to the Defense Federal Acquisition Regulation Supplement (DFARS 231.205-18) to improve visibility into industry IR&D, further incentivizing productivity and innovation. The DFARS update required major contractors with more than $11,000,000 in IR&D and Bid & Proposal costs to submit IR&D project data to be eligible for reimbursement. The DoD implements its IR&D management policy through DoDI 3204.01, DoD Policy for Oversight of Independent Research and Development (IR&D).

In addition, the Defense Innovation Marketplace website was developed to provide a one-stop-resource for industry:

• To learn about Department and Service investment priorities and capability needs through links to key S&T documents and websites.
• For large companies to submit IR&D project data and comply with the DFARs rule.
• For small- to mid-size firms to securely share company IR&D projects in a database designed for Department S&T program managers and Acquisition executives.

For Department of Defense personnel, the Marketplace is the centralized place to:

• Highlight Service, program and acquisition S&T needs to the entire defense industrial base and
• Search, learn about and then leverage industry technology (IR&D) projects for current and future programs (select "Government IR&D Searchers" on the Marketplace site to access the industry IR&D database of over 40,000 project descriptions submitted since 2010).