said. “So for this first step, they can just use information they probably already have on hand,” instead of what can often be a costly and time-consuming proposal development process.
Next, DIUx, acting in a sort of venture capitalist role, selects companies to pitch their technologies to its DOD customers. (DIUx officials are quick to point out that it is not a venture capitalist.) Finally, if DIUx, ACC-NJ and the DOD customer think the company or technology has promise, the company is invited to sub- mit a full proposal and negotiate an OTA. Under a CSO, nearly all terms, including intellectual property (IP), are negotiable.
THE DIUX DIFFERENCE
“Tis whole process is fast, flexible and collaborative, and these three attributes are really critical to our ability to work with a lot of these nontraditional compa- nies,” Schmidt said. Most important, she noted, is the collaboration. “Rather than the government issuing a detailed RFP [request for proposal]
that the contrac-
tor has to respond to behind a firewall, in isolation and without discussions with the DOD customer, we actually burn down that firewall and design projects together after we issue an RFP.”
DIUx’s CSO is a pilot in the use of this type of contracting instrument, said Paul Milenkowic, ACC-NJ executive director.
“We can move quicker in that we’re not bogged down on a lot of procedural time frames or steps that don’t apply to other transaction agreements,” he said. “So one benefit is that we can focus more on the desired outcome versus ‘are we following the proper steps.’ ”
FLEXIBILITY ALLOWS SPEED Te key to the CSO’s speed is the flex- ibility that OTAs allow as opposed to the FAR, Milenkowic said. “Te FAR’s going to define steps and time frames—a
How DIUx does contracting, versus the standard way. For high-tech products made by smaller, nontraditional defense contractors, the CSO contracting method can work better than the methods that often work with big defense firms. (SOURCE: DIUx)
lot of them are dictated by the regula- tion,” he said. “With that flexibility in the commercial solutions opening, we’ve created efficiencies in the process that we wouldn’t otherwise have the ability to do under the FAR. … Te FAR is more rules-oriented versus the other transac- tion authority.”
But moving quickly doesn’t mean slop- piness, Milenkowic emphasized. “We’re not doing speed at the expense of qual- ity.” Ensuring quality requires two things, he said. “Te first is people. … We have a mature staff here that we’ve developed over the past few years at ACC – New Jersey, and to me that’s essential, as there’s a higher level of engagement, communi- cation and interaction required and one has to feel comfortable taking this addi- tional responsibility on.”
Te second is a solid partnership. “Te other thing that’s helped us is the entire DIUx team has been highly aligned in
that we’re all on the same page, we under- stand the process that we laid out, and we understand the goals we’re working toward. Te team also has a high degree of commitment, and that includes the staff at DIUx, the staff here at ACC – New Jersey and our local legal support as well,” he said.
ENHANCED COLLABORATION CSOs provide an element of collabora- tion that’s not possible under the FAR, Milenkowic said. “Essentially, the CSO has turned the process on its head by asking commercial firms to provide a solution to our problem statement, and this is typically not what the government does,” he said. “We usually are dictating a solution, and here we are asking for one. And therefore we might have vastly dif- ferent approaches to solving a problem.”
CSOs also allow enhanced interaction between the stakeholder and the contractor. Once a contractor is selected—typically a
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CONTRACTING
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