In a year that saw executive orders coming out rapid fire, a FAR revolution and a government shutdown, there is some good news. A Pentagon memo from earlier this year titled Directing Modern Software Acquisition to Maximize Lethality may simplify and expedite the process for companies to have the Department of Defense buy their software.
To learn more, please read on.
The Memo
The Pentagon’s memo, Directing Modern Software Acquisition to Maximize Lethality (Memo) notes that “software is at the core of every weapon and supporting system” the Department of Defense* has. So, it needs to be acquired, integrated, and updated at speed and scale to support an effective fighting and defense force. With more nimble acquisition and integration systems, DoD can move faster than adversaries in delivering, among other things, the software needed for weapons systems. The Memo diagnoses the problem with buying software as a historical focus on hardware acquisition and not software acquisition. The solution outlined in the Memo is to disrupt current thinking around software development and acquisition and move to a faster, more flexible acquisition process that prioritizes:
- Delivering software upgrades faster.
- Integrating software and other emerging technologies more effectively.
- Anticipating and responding to evolving threats.
This presents great opportunities for defense contractors, to include non-traditional defense contractors, to get their software into the defense supply chain and maybe right to DoD.
What’s The Plan to Do This?
The Memo directs that to become a lean mean software purchasing machine:
- The Defense Acquisition Units Software Acquisition Pathway (SWP) must be used across DoD as the preferred method to develop software for both business and weapons system programs.
- Commercial Solutions Openings and Other Transaction Authorities should be the default methods for acquiring software.
- The Under Secretary of Defense for Acquisition and Sustainment in conjunction with the Director of the Defense Innovation Unit must execute on the Memo.
What Is the Software Acquisition Pathway?
In short, the Software Acquisition Pathway (“SWP”) is a program designed to rapidly deliver software capabilities to replicate the speed and effectiveness of the commercial sector’s process for developing mission critical software.
SWP demands that:
- Delivery is iterative with real-time user engagement.
- This leads to a Minimum Viable Product within a year of identifying a need for the software.
- Commercial practices are used to develop software. Practices such as Agile Development and Lean Software Development, which are essentially iterative software development processes designed to respond quickly to customer feedback; cut out inefficiencies; and deliver improved software in quick bursts.
Congress blessed SWP. In the FY20 National Defense Authorization Act, Congress, among other things, directed that Software Acquisition Path programs must not be treated as major defense acquisition programs. This was done because major defense acquisition programs are slow and bureaucratic. The idea is that software purchases can be speedier and more responsive to the mission if out from under these requirements.
When the Memo came out, SWP was not used across all of DoD. The Memo mandates that it be used across DoD, which we think is good news.
Contract Vehicles
SWP is great, but it does not trump the Defense Federal Acquisition Regulations (DFARS) which, although necessary, can create for a slow acquisition process. So, the Memo makes clear that when acquiring software capabilities DoD must use certain acquisition methods that are supposed to be more efficient than traditional DFAR requirements:
- Commercial Solutions Opening (CSO) which is designed to be a speedy way to buy products, services, and software that will provide solutions to vexing problems or that are innovative solutions just like one would buy in the commercial market. To do this, the DFARS allow contracting officers to use a CSO but only when:
- Purchasing innovative solutions or capabilities, including R&D solutions, that fulfill DoD requirements;
- The solution being purchased will close capability gaps, or will provide potential innovative technological advancements;
- Meaningful proposals with varying technical or scientific approaches can be reasonably anticipated; and
- Fixed price contracts including fixed price incentive contracts are used for the purchase. (Read all about CSOs here DFAR 212.70).
Innovation in this context is defined as either:
- Technology, processes, or methods, including research and development, that is new as of the date when the contractor submits their proposal; or,
- Any application that is new as of the date when the contractor submits a proposal for technology, processes, or methods that may already exist.
- Other Transactions Authority are contracts (yes – they are contracts regardless of what you read online or have been told) that do not require the use of FAR/DFARS procedures to source or award the contract. DoD can use OTAs for research, prototypes and production. OT authorities were created to give DoD flexibility when contracting so it can adapt and incorporate best practices from industry when buying what it needs.
In DoD’s myth-busting Other Transaction Guide, DoD explained that: “When leveraged appropriately, OTs provide the Government with access to state-of-the-art technology solutions from traditional and non-traditional defense contractors.” Basically, it allows DoD to enter a contract without being constrained by DFARS. Given this, using an OTA to buy software would facilitate efficient acquisition of innovative software and technology.
Remember, generally, a business needs to be a non-traditional defense contractor to get an OTA; or at least partner with one. (Check out the Defense Salon post Non-Traditional Defense Contractors – Who Are They?).
How To Capitalize on This Good News
This seems like good news that may present opportunities for businesses, including non-traditional defense contractors, who are on the forefront of tech solutions in response to defense needs.
To capitalize on this opportunity:
- Do market research on how your R&D, software or other tech may be just what DoD needs.
- Develop a comms/business development plan on your capabilities that speaks to DoD needs.
- Develop relationships within DoD so those who may be interested in what you are selling can get to know your business and its solutions.
- Reach out to the Office of Small Business Programs, Department of Defense whose mission is to support small business in supplying innovative solutions.
- Gain an understanding of how the CSO process works so you can pitch its use to contracting officers who may be hesitant.
- Figure out if you are eligible for OTAs and gain an understanding of how OTAs work so you can pitch using OTAs to contracting officers.
- Make sure you understand and comply with DoD cybersecurity requirements, CMMC for example, and all the other DoD requirements that will still hit you.
Quote
“DoD is focused on increasing innovation and accelerating the delivery of secure capability to our warfighters.” Ana Kreiensieck, Former DoD CIO for Information Enterprise, Cloud and Software Modernization Directorate, Software Modernization Lead, GovCIO, Pentagon’s Software Modernization Plan Targets Speed
*We will continue using Department of Defense until there is a name change through the legislative process.
