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CHIPS Articles: DISA sees OTAs as step toward implementing new technology faster

DISA sees OTAs as step toward implementing new technology faster
By DISA News - July 10, 2018
It goes without saying, the warfighter’s needs change at the speed of sound.

Unfortunately for those on the front line, the Department of Defense’s acquisition process tends to move at the speed of a biplane.

The Defense Information Systems Agency (DISA) hopes to counter the bureaucratic paralysis and continue driving innovation and offering solutions for the warfighter by using the Other Transaction Authority (OTA) contracting methodology.

The OTA methodology offers acquisition flexibility because it isn’t bogged down by the same rules and regulations as the Federal Acquisition Regulation (FAR) process, and unlike a procurement contract covered by the FAR, Government Accountability Office (GAO) review of OTA actions are rare.

Because innovation moves at such a rapid pace, and threats to domestic security are real and evolving, DISA sees value in spurring innovation and attracting state-of-the-art companies to the conversation. These visionaries, many of whom hail from Silicon Valley; the Austin and Boston “tech corridors;” and other centers of excellence, such as universities and civilian research labs, offer leading-edge expertise to enhance defense missions.

“Many of the companies we’re dealing with are small start-ups,” said Scott Stewart, technical director in DISA’s Procurement Services Directorate. “They’re innovators, but can’t endure the traditional years-long procurement processes. They also don’t have the working capital to wait out the traditional FAR route. OTAs give the government flexibility to work outside the traditional process while allowing small businesses to get into the game.”

OTAs also give smaller businesses a level of comfort.

“Navigating the FAR system can become very confusing for small business,” Stewart, who also serves at the agency’s agreements officer, said. “They usually don’t have administrative staffs versed on all the paperwork, and can sometimes be somewhat intimidated by ‘big government.’ Under FAR, small businesses can also end up losing proprietary property because it ends up being a deliverable to the government. The way OTAs are structured, that doesn’t happen, and there’s just an added level of comfort.”

OTAs incorporate the flexibility needed for the government to approach acquisitions in a commercial-like manner with some restrictions. Prototype projects under OTAs must be directly relevant to enhancing the mission effectiveness of military personnel and the supporting platforms, systems, components, or materials proposed to be acquired or developed by DoD, or to improve platforms, systems, components, or materials in use by the armed forces.

Implemented by Congress in 1994, authorization to use OTAs reflects authorities NASA first used in 1958. The OTA methodology was made permanent in the National Defense Authorization Act for Fiscal Year 2016. Congress sparked enthusiasm for the methodology by doubling the dollar thresholds for required approvals of OTA in theNational Defense Authorization Act for Fiscal Year 2018.

Based on the OTA Process Guide, approval authority for OTAs at DISA up to $10 million require approval of the head of the contracting authority, more than $10 million and up to $50 million requires approval of a senior procurement executive, and OTAs greater than $50 million require approval of the Under Secretary of Defense Acquisition, Technology, and Logistics with notice to Congress.

Recent changes to OTA methodology

One of several changes Congress made to the statute was to widen the narrative regarding what constitutes a prototype. In the past, when teams talked prototypes, it would evoke visions of a tangible piece of hardware. Now, a prototype can be an analysis, a process improvement, and even hardware and software solutions.

The second change Congress enacted to spur OTA use was to expand the definition of who may qualify for an OTA award. Small businesses may receive an OTA award, and large businesses can also participate in this arena if they partner with a non-traditional defense contractor who participates to a “significant extent.” A significant extent is not defined as a percentage of work completed; rather, the non-traditional defense contractor may supply a key technology, facility, or unique capability.

The requirements of the OTA say if the prototype is successful, and the prototype phase was competed, OTA users can transition into the production phase without further competition.

To the maximum extent practicable, DISA will use a process where vendors may still have to compete for initial and follow on awards. In certain cases, leadership may determine a FAR-based contract is more appropriate for a particular project.

Congress, GAO provide oversight

While OTAs offer increased flexibility, new reports suggest the government will be providing stricter oversight as their use expands.

According to an article published June 14 by Defense Systems, House appropriators are telling the DoD Congress is keeping a close eye on these transactions.

Also, GAO isn’t going to be lax with its oversight moving forward. This comes on the heels of a successful protest by Oracle in which GAO ruled the Army overstepped its legal authorities when it awarded a $950 million OTA contract to Oracle competitor REAN Cloud.

DISA’s approach

The agency is currently utilizing OTA methodology for several projects, and DISA service development executive Terry Carpenter recently told FCW OTAs allow defense agencies to work prototype projects that improve mission effectiveness.

“OTA is a mechanism that forces us, and allows us, to have that conversation differently, with traditional DoD industry partners and up-and-coming companies at the table,” the program executive officer said in an interview during a FedScoop event. “It helps us to train our people that it's okay to have these kinds of conversations under this construct of the OTA.”

DISA acknowledged it’s preparing to use OTA methodology to set the framework for next generation applications in today’s command and control battlespace.

Although the agency’s OTA projects are currently under the authority of external agencies, this method is not necessary nor divergent from the agency’s OTA policies and procedures.

DISA was granted OTA by the Defense Procurement and Acquisition Policy nearly one year ago. Since that time, a well-defined process for executing the methodology has been established. This process was developed using the Commercial Solutions Offering process pioneered by the Defense Innovation Unit – Experimental, the DoD organization founded to help the military make faster use of emerging commercial technologies. This process, along with templates, can be found on the DITCO website.

“It's an interesting time,” Carpenter told FCW. “I think there’s convergence of technology where now application developers have to understand better what’s going on with virtualization, with software defined networking, with security. There’s more dialogue that’s going to occur across the different specialties of IT. And I think OTA is just a way to help change the dialogue both internally and externally as we sit down together.”

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