SPEED CONTRACTING
that more organizations in DOD can use this type of authority and design particular processes that meet their particular needs,” Schmidt said. “It doesn’t have to be exactly the way that we did the CSO. Tere’s lots of ways you can design a process so it meets the needs of your particular organization.”
X FOR EXPERIMENTAL
Secretary of Defense Ash Carter is greeted by DIUx Managing Partner Raj Shah as he arrives at Moffett Field, California, to deliver remarks on May 11, 2016. With them is Maj. Gen. Nick Tooliatos, commanding general of the U.S. Army Reserve 63rd Regional Support Command. Carter “refocused” the experimental unit, with Shah at the helm, on finding ways for DOD to do business as quickly as the tech companies innovating and experimenting in DOD areas of interest. (Photo by Senior Master Sgt. Adrian Cadiz, Office of the Secretary of Defense Public Affairs)
A JOINT EFFORT OF DIUX, ACC Seeking ways to get DOD up to Silicon Valley’s speed of busi- ness, DIUx, with help from the Army Contracting Command – New Jersey (ACC-NJ), came up with the commercial solutions opening (CSO). In contracting parlance, a CSO is a solicitation instrument allowing for the award of other transaction author- ity (OTA) agreements that DIUx has used to award $36 million in contracts so far. Using a CSO, the time from when a Silicon Valley entrepreneur with a promising company or technology first responds to a DIUx proposal to when a contract is signed has averaged 59 days, said Lauren Schmidt in an October 2016 interview with Army AL&T. Schmidt is pathways director for DIUx and a former special assistant to the principal deputy assistant secretary of the Army for acquisition, logistics and technology. Te fastest contact-to-contract was 31 days, she said.
Te National Defense Authorization Act for Fiscal Year 2016, signed in November 2015 by President Obama, encouraged broader, more effective use of OTA agreements, which are not subject to FAR documentation and reporting requirements. In late November 2016, DIUx released a guide on CSOs and OTAs to enable other federal government organizations to set up their own innovative contracting vehicles. “Our goal from DIUx is
110 Army AL&T Magazine January-March 2017
STRAIGHTFORWARD SYSTEM Te CSO process is fairly simple, Schmidt explained. First, DIUx posts basic areas of interest on its website. Tese aren’t detailed requirements, she said, but descriptions of a problem DIUx is trying to solve or a technology it’s interested in. Inter- ested companies submit a paper—fewer than five pages of text, or briefing charts—on the company or its technology, generally required within about two weeks. “We want to have a low barrier of entry to companies that have not worked with DOD before, have not put together a government proposal before,” Schmidt
The CSO process at a glance:
• Open to nontraditional companies and traditional defense companies under certain conditions.
• A streamlined application process requiring only mini- mal corporate and technical information.
• Flexibility to use best practices with relief from the FAR.
• No mandatory cost accounting standards or reporting requirements.
• No requirement for certified cost and pricing data.
• Fast-track selection timelines, with most awards within 30 calendar days of proposal submission.
• Negotiable payment terms.
• Nondilutive capital (financing that does not dilute com- pany owners’ shares).
• Negotiable IP rights.
• Direct feedback from operators, customers and users within DOD to help product teams develop and hone product design and functionality.
• Potential follow-on funding for promising technologies and sponsorship of user test cases for prototypes.
• For successful products and technologies, possible elig- bility for accelerated procurement by DOD.
(SOURCE: DIUx)
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