DOD moves toward faster prototyping

NOTE: This article first appeared on FCW.com.

The Defense Department wants to make approving prototype contracts easier by delegating contracting authorities to agencies and combatant commanders during the coronavirus pandemic.

According to a recently released April 6 memo, Ellen Lord, DOD's acquisition head, issued new guidance for prototype contracts issued through other transaction authorities -- an expedited contracting vehicle for research and prototyping projects, often targeted at small startup companies and other non-traditional businesses looking to work with the Defense Department.

Lord's memo makes changes to approval authorities for defense components that will last throughout the COVID-19 outbreak.

For example, heads of defense agencies and field activities and combatant commands with contracting authority now have approval authority for the duration of the COVID-19 emergency for OTA prototyping contracts, any follow-ons or those more than $100 million. The director of the Defense Innovation Unit also has those authorities.

Other guidance delegated approval for prototyping agreements more than $500 million to military department senior procurement executives, and the heads of the Defense Advanced Research Projects Agency and Missile Defense Agency. Agency heads and senior procurement executives can delegate OTA prototype actions falling between $100 million and $500 million, according to the memo.

The memo is one of 17 guidance and policy updates promulgated in the midst of the pandemic the Defense Department pertaining to the defense industrial base.

DOD also released payment guidance for implementing the CARES Act, the $2 trillion economic rescue law passed in March, allowing DOD to pay for contractors' leave if they are ill or unable to report to their work facility during the COVID-19 crisis, reported Washington Technology, FCW's sibling publication.

The OTA contracting vehicle has become increasingly popular in DOD in recent years, tripling from $1.7 billion in 2016 to $3.7 billion in 2018. That rapid growth has drawn scrutiny from Congress. Moreover, the Government Accountability Office found that two out of 11 OTA contracts were not reviewed by the proper authority but made no recommendations in its November report.

Army Secretary Ryan McCarthy said service leadership tries to be "judicious" when it comes to OTA use, but without it the Army's experimental projects end up being more expensive.

"Contractually, it is a little more latitude to work with a contractor to study through prototyping the types of characteristics you want because they may have a better way of getting to the outcome," McCarthy said during a Feb. 15 speaking event at the National Press Club.

"We spent $23 million instead of spending $2.3 billion like we would have done a decade ago."