By Col. Joel D. Babbitt and Dr. Donald Schlomer, PEO for Special Operations Forces Warrior SystemsApril 25, 2019
The case for change in peacetime has rarely been made as succinctly as the last two National Defense Strategies. For 17 years, the U.S. military has focused on low-intensity conflicts, bending all of our resources and attention toward defeating the terrorist threat in Afghanistan, Iraq, Syria and Africa. However, with Russia's annexation of Crimea, the debut of Russia's New Generation Warfare using robots in eastern Ukraine, and China's rapid maturation of its navy, rocket forces and military in general, it has become obvious that a new era of peer competition has arrived.
But large enterprises don't change on a dime. It took us 17 years of focus on counterterrorism rather than on near-peer competitors to get to where we are--outranged by Russian artillery, lacking in air defense and discovering that our technological lead has eroded in several other areas as well. To regain our edge in these areas--quickly--is and will be a daunting challenge.
To meet this challenge, Gen. Mark A. Milley, Army chief of staff, is driving structural changes, and Congress is providing the top cover, through the development of a new four-star headquarters, the U.S. Army Futures Command. The Army Futures Command is breaking organizational friction by prioritizing the Army's research and development, promoting an open dialogue through its cross-functional teams and championing the use of new authorities to break through calcified acquisition processes, thereby ushering in a new era of Army acquisition.
All of this has created quite a bit of buzz in the program offices and in the cube farms of the Pentagon. The need is clear: Army acquisition must no longer be process-oriented, time-consuming and risk-averse, taking years to deliver a product.
Enter the dynamic duo of middle-tier acquisition and other transaction authorities.
So, what is middle-tier acquisition authority? It was introduced under Section 804 of the National Defense Authorization Act for Fiscal Year 2016, Public Law 114-92. This authority provides program managers (PMs) a means to use an existing need to rapidly assess advanced technological prototypes without the bureaucracy and restrictions of new requirements approval, or to rapidly field mature systems based on existing requirements of any form. While it doesn't throw out DOD Instruction 5000.02, "Operation of the Defense Acquisition System," it encourages a minimalist approach to program structure and oversight.
Mid-tier acquisition is a powerful mechanism because it allows you to "soft-start" a new program or rapidly advance an existing one by initiating a rapid prototyping effort. A program manager (PM) can acquire several prototypes for user assessment during the requirements development and maturation process, essentially allowing the users to "buy, try and then decide." The obvious advantages of prototyping early in the process, before a requirement is finalized, are many:
The user community can see what the actual state of industry is, not just what is stated by our congressional leaders in Washington.
Users can begin to make mission trade-offs and evaluate the relative priority of each aspect of a capability.
Industry partners can receive essential feedback much earlier in the process--when the cost of changes is much lower.
If the prototype does not meet the user's need, the PM can scrap it and try another one. Through testing and evaluating prototype alternatives, the PM can ensure that the user is not forced to take something that does not meet the need, as sometimes happens under today's bureaucratic, momentum-based systems--for example, a Navy work uniform that's not designed for use aboard ships.
All you need to use middle-tier acquisition authority is a service acquisition executive's delegation of the authority for either rapid prototyping or rapid fielding. Both authorities are delegated based on any type of need or justification or requirement, be it a capabilities development document, a joint urgent operational needs statement, an operational need statement, an urgent need statement or a directed requirement. The ability to address one of these documents and bypass the need to get a requirement approved through the Joint Capabilities Integration and Development System, paired with the exceptionally slim documentation required for program structure, is the essence and value of middle-tier acquisition.
An important component of middle-tier acquisition is the early coordination and robust involvement of a cross-functional team. These teams are constructed such that each member represents a different function of the acquisition effort and is empowered to address a vital function in acquiring a capability. Each function is necessary for the identification, funding, acquisition and user assessment of a prototype capability. The team includes the person refining the requirement, another developing the test plan, someone capturing the funding required, another determining if current technology exists to achieve the desired capability, and a person writing the request for proposal. Not to mention having the user determining if the capability of the prototype has value.
Having a small, empowered team is the best method to fulfill the purpose of a mid-tier acquisition, allowing for rapid decision-making and delivery of a new capability to the warfighter. The U.S. Special Operations Command (SOCOM) has used a "buy-try-decide" model of acquisition for decades--buying a product or prototype, trying it to see if it meets the need and deciding whether to keep it or buy something else. Currently, SOCOM is buying a prototype personal defense weapon--a weapon halfway between pistol and rifle--to assess its capability through a combat evaluation. Thus, warfighters will use the prototype weapon and undergo an eight- to 12-month in-the-field user assessment. After the evaluation, the milestone decision authority for the weapon will make a decision to either field or scrap the weapon prototype.
A MASSIVE LITTLE EXCLUSION
But what about contracting, you ask? Certainly if we speed up program timelines, traditional contracting will keep the overall process slow, right? Enter other transaction authority, which gives the contracting officer the capacity to enter into an "other transaction agreement"--acquisition-speak for a legally binding contract directed to a specific vendor for the purchase of a prototype. These specific vendors are normally not traditional defense contractors. Their purpose is to show how DOD could use current technology. Such a contract must be for $100 million or less, which means that it's designed for smaller acquisition category (II, III or IV) programs.
Other transaction agreements are nonstandard procurement contracts, and thus not subject to the Federal Acquisition Regulation (FAR). That little exclusion actually has a huge impact and completely reshapes the playing field for DOD contracting. This exclusion could decrease the amount of time to award a contract by 12 months. Other transaction agreements provide small, innovative companies an easier way of contracting with DOD.
The mid-tier acquisition process, teamed with an other transaction agreement for contracting prototypes, provides small vendors the ability to directly compete their prototypes against established DOD vendors--thus allowing the PM to contract directly with the small vendor to acquire those prototypes for user assessment. However, if the prototype meets the user's needs, a contracting officer should issue a request for proposal to all industry partners, using the specifications of the prototype, for a larger contract for full Army fielding.
This follow-on contract award enables the Army to engage competition to obtain the best value in acquiring the new capability in greater numbers. It may not seem fair: Little company develops a great new product that the Army needs, but it's not large enough to produce that product in the quantities and at the price demanded by the Army. The Army isn't being ruthless here, but it is positioning DOD to gain a lot more involvement from small, innovative businesses that don't traditionally sell to DOD. How? Even if the Army pays a small company to develop a breakthrough product but goes on to hire a big company to produce it in the necessary quantities, that's still important business for that small company. And the taxpayer is reaping the benefit.
NOT SO FAST
It's important to understand the limitations of an other transaction authority. Congress' intent, made clear in Section 812 of the National Defense Authorization Act of Fiscal Year 2016 and by the $100 million authorization ceiling, was that the mechanism be used for prototyping efforts. Therefore, it's not the tool to contract for full Army fielding. So this kind of agreement is not a cure-all for anyone's contracting woes. Once the user and the acquisition program manager agree to a capability after assessments of multiple prototypes, the PM can proceed with a standard FAR-based contract for full Army fielding of that capability. Thus, a PM will need to find a contracting officer who can do both.
ADDING IT UP
Let's put it all together. What do you get when you mix middle-tier acquisition and other transaction agreements? Speed, plain and simple.
Here's a good example. The Defense Technical Information Center (DTIC) used the middle-tier acquisition process with an other transaction agreement to develop prototypes to mitigate the current threat of shoulder-launched missiles with infrared seekers. DTIC worked with the National Security Technology Accelerator, an organization that searches the world to find companies with capabilities that can directly support the warfighter, and awarded an other transaction agreement for $15.2 million to Photo-Sonics Inc., a small company, to acquire prototypes that may have a capability. Under the mid-tier acquisition authority, Photo-Sonics won a DOD contract in 2018 to pursue this new capability.
Another example is the U.S. Army Missile Research, Development and Engineering Center using an other transaction agreement to engage the Defense Ordnance Technology Consortium, a large group of small, innovative companies, to develop that prototype personal defense weapon, which is lighter, more accurate, more lethal and quieter than existing weapons.
The need for speed is being driven by the exponential progression of technology and the rise of near-peer competitors. Russia, for example, has developed weapons that last longer, shoot farther and are more accurate than the Army's standard weapons. It is critically important that all of the Army, through the establishment of cross-functional teams, use the middle-tier acquisition process.
Using the mid-tier acquisition authority with the other transaction authority, PMs can rapidly reach out to traditional and nontraditional DOD vendors to close the gap with our adversaries. Working together through these new arrangements, we can quickly and more accurately meet the warfighter's needs.
For more information, contact Dr. Donald Schlomer at Donald.Schlomer@Socom.mil or 813-826-1353.
COL. JOEL D. BABBITT is the program executive officer for Special Operations Forces Warrior Systems within the U.S. Special Operations Command at MacDill Air Force Base, Florida. He previously served as the product manager for three product offices: Wideband Enterprise Satellite Systems within the Program Executive Office (PEO) for Enterprise Information Systems; Warfighter Information Network -- Tactical Increment 1 within the PEO for Command, Control and Communications -- Tactical; and Command, Control, Communications, Computing and Intelligence for a unit under the U.S. Special Operations Command. He holds an M.S. in computer science from the Naval Postgraduate School and a B.S. in psychology from Brigham Young University, and is a graduate of the U.S. Army Command and General Staff College. He is Level III certified in program management and Level II certified in engineering and in information technology. He holds the Project Management Professional certification and is a member of the Army Space Cadre and the Army Acquisition Corps.
DONALD SCHLOMER, LT. COL., USA (RET.), is a government civilian acquisition program manager within the PEO for Special Operations Forces Warrior Systems. He holds a doctorate in business administration from Walden University, specializing in Acquisition Category III requirements generation and in project management; an MBA in finance from Clemson University; and a BBA in information systems from the University of Georgia. He is a graduate of the Quartermaster Officer Advanced Course, and is the 2017 Frank Dilly Award winner for best doctoral dissertation. Schlomer is a retired Signal officer who deployed to Iraq and Afghanistan in support of Operations Iraqi Freedom and Enduring Freedom, respectively. He is Level II certified in program management.
This article is published in the April-June 2019 issue of Army AL&T magazine.