Big Data Provisions in the November 2016 Conference Report for the FY 2017 NDAA

As the National Defense Authorization Act for Fiscal Year 2017 tortuously winds its way through congressional debates and committees, it is finally taking sufficient shape to allow an examination of the provisions that may have an impact on the market for big data goods and services at the Department of Defense. Language dealing with big data analytics in the FY 2017 NDAA deal is scant, but there are a couple of things worth noting.

Sec. 1003. Increased use of commercial data integration and analysis products for the purpose of preparing financial statement audits.

Anyone familiar with the announcement last August that the Army had made $2.8 trillion in wrongful adjustments to accounting entries for one fiscal quarter alone and $6.5 trillion for the year overall knows that the upcoming 2017 auditability date for the DoD is in severe jeopardy of not being met. Congress knows this too and so it is pushing the department to use whatever means are available to improve financial auditability.

Sec. 1003 requires “the Secretary of Defense to procure or develop, as soon as practicable, technologies or services, including those based on commercially available information technologies and services to improve data collection and analyses to support preparation of auditable financial statements for the Department of Defense.”

To fund this acquisition, the Congress authorizes the SECDEF to use Science and Technology dollars, prototypes, and test and evaluation (i.e., RDT&E) resources as necessary. This authorization basically shouts “use the DIUx” and its Other Transaction (OT) authority to buy the required capability. If the SECDEF elects to go this route, an award for the capability will be made to either a non-traditional government vendor or a small business with less than $50 million in sales to the DoD the previous year. For more details on how OT and the DIUx work, see my post from last week.

The specific mention of prototypes in relation to this requirement could be either a result of the DoD’s approaching auditability date or it could signify a shift toward efforts to circumnavigate standard procurement processes. Should the former be the motivation, it is understandable. Should the latter be the case, it suggests that frustration with the procurement process has grown so deep that OT will be used more frequently. For large and mid-sized businesses in particular this is a trend that bears watching.

Legislative Provisions Not Adopted: Enhanced use of data analytics to improve acquisition program outcomes

Citing language in the Senate version of the NDAA (Sec. 853), the conference report notes that “DoD does not sufficiently incorporate data into its acquisition-related learning and decision-making. Many major policy decisions are made without the benefit of being informed by substantive data.” Therefore, the DoD’s leadership should assess the analytics capabilities of the department and the measures in place for sharing data to improve business acquisition decisions.

The resulting report to Congress should be submitted in FY 2018 and detail steps the DoD will take “to develop and implement data analytics capabilities in support of improved acquisition outcomes” The conference report does not recommend an acquisition or a strategy, but the result of the assessment could easily be a recommendation for an acquisition and/or the release of a DoD data strategy that includes acquisition-related issues.