Navy to Use Non-Traditional Acquisition to Buy $100M in New Cyber Capabilities

The U.S. Navy’s Space and Naval Warfare Systems Command (SPAWAR) is seeking to procure $100 million in new cyber capabilities using an Other Transaction Authority (OTA) approach to sidestep the traditional acquisition process. SPAWAR’s choice of OTA follows suit with other Department of Defense (DOD) components recently where a consortium of industry, academia, small business and not-for-profit organizations is set up to provide rapid fulfilment of an agency’s emerging technology needs. The initial award is for a contracted organization to establish and administer the consortium going forward and to manage competition among consortium members for work on SPAWAR’s technology demands.

SPAWAR is calling the new consortium the Information Warfare Research Project (IWRP), (GovWinIQ Opportunity ID: 164902, login required) which will seek technology research and prototype work across the following 14 technology areas:

1. Cyber Warfare
2. Data Science/Analytics Technologies
3. Assured Communications
4. Cloud Computing
5. Enterprise Resource Tools
6. Collaboration and Social Networking
7. Autonomy
8. Internet of Things (IoT) Embedded Systems
9. Mobility
10. Model Based Systems Engineering (MBSE)
11. On-Demand Manufacturing
12. Assured Command and Control (AC2)
13. Integrated Fires (IF)
14. Battlespace Awareness (BA)

The Contracting Office issued the Draft Program Announcement on January 26 and an Industry Day is scheduled for February 1. The Solicitation is anticipated in Q2 FY 2018 with an anticipated award date in Q3.

Growing Momentum for OTA

Other Transaction Authority itself is nothing new. It has been around for years and traditionally used for thinks like weapons systems. But it was expanded and recast to include Information Technology (IT) a few years ago.

In the FY 2015 National Defense Authorization Act (NDAA), Congress authorized the DOD to use OTA for IT requirements and provided a $100 million annual budget per MILDEP for prototyping efforts. As such, OTA permits Defense customers to make contract awards to “non-traditional businesses” (i.e., non-defense contractors) for innovative or disruptive technologies that have the potential to be mission “game-changers.”  Traditional government contractors may participate in OTA awards if a non-traditional contractor is participating to a “significant” extent in the effort (i.e., supplying a new key technology or product).

The FY 2018 NDAA built on this by requiring the SECDEF to establish a preference for using transactions other than contracts, cooperative agreements, and grants for science and technology, prototyping, and experimental purposes. It also added provisions to ensure that OTA procurements are measured by transaction size versus project size, to increase the thresholds for service acquisition executives from $50 million to $100 million and for the Under Secretary of AT&L from $100 million to $500 million, and to establish guidance that contractors participating in small business innovation research and small business technology transfer programs shall be considered small businesses for the purposes of cost sharing requirements.

President Trump’s new National Security Strategy (NSS), released in late 2017, includes as one of his priorities the investment in commercial off-the-shelf solutions and prototyping to rapidly field new capabilities, including innovative technologies being developed outside of the traditional defense industrial base. That sounds a lot like the use of OTA to me.

Implications for Cyber

Use of OTA for the procurement of cyber defense capabilities is becoming more common across DOD. Like the SPAWAR effort, the Army is in the process of establishing a similar cyber-centric OTA called C-RAPID that will seek to achieve a 30-day acquisition cycle for prototype projects. Every MILDEP has established a Rapid Capabilities Office (RCO) dedicated to using OTA more aggressively in the future.

In an IT acquisition environment that for years has been grappling with the challenges of complicated regulations, slow and costly procurement cycles and the misapplication of LPTA, OTA continues to gain a position as a fixture and force within the Defense acquisition landscape. Look for large civilian departments to take note and look for potential ways to leverage OTA to bring innovation to bear on their mission IT needs. The results could further shake up the government-wide IT landscape.

Expansion of OTA use presents challenges to traditional contractors who are largely accustomed to the distinctiveness of the federal acquisition environment and have invested heavily in the capabilities it takes to compete in this space. The DOD’s use of OTA beyond research and prototyping to develop full systems will fuel further concerns. But traditional contractors should pursue opportunities to join these consortia with non-traditional businesses to participate in OTA actions and bring their federal expertise to bear.