In pursuit of innovative technologies, DoD creates another pathway around traditional acquisition rules

Amid the hype over its growing use of Other Transaction Agreements, the Defense Department is taking yet another step into unorthodox contracting methods as it pursues more participation from non-traditional vendors.

As part of a four-year pilot program, the Pentagon has just issued new rules that will let its contracting officers move though streamlined acquisition processes when they’re buying “innovative” commercial goods and services. Much like the department’s burgeoning use of OTAs, they’ll allow DoD to make purchases without issuing traditional requests for proposal and conducting formal competitions. But unlike OTAs, those purchases won’t be restricted mainly to prototypes.

And the term “innovative” is fairly broad, under the June 26 guidance DoD published, known as a class deviation.

It sweeps up any commercial “technology, process, or method, including research and development, that is new as of the date of submission of a proposal, or any application that is new as of the date of submission of a proposal of a technology, process, or method.”

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Congress first granted DoD the new authority in December 2016 as part of the annual Defense authorization bill, but the department hasn’t implemented it until now.

Under the pilot, acquisition officials will issue “general solicitations” to industry, instead of specific requests for proposals that describe precisely what the department wants to buy. And instead of the rigorous technical and price analyses that usually go into deciding a winner in a traditional procurement, officials will make a selection based on a “peer review” process involving subject matter experts.

“Written evaluation reports on individual proposals are required, but proposals need not be evaluated against each other since they are not submitted in response to a common performance work statement or statement of work,” Shay Assad, DoD’s procurement policy chief wrote in the guidance.

Military services and agencies will be allowed to use the process for procurements of up to $100 million — or even more than that, as long as they notify Congress and get permission from the Pentagon’s undersecretary for acquisition and sustainment.

The process is loosely modeled on the Commercial Solutions Opening: a process the Defense Innovation Unit-Experimental (DIUx) pioneered to award OTAs to nontraditional vendors.

But unlike OTAs, there’s no requirement for the new pilot program to focus on nontraditional vendors: the awards can go to anyone, as long as DoD deems them to be for “innovative” technology, and as long as it can “reasonably” anticipate that multiple companies will offer up different scientific or technological approaches. Also unlike OTAs, the awards have to be made as firm, fixed-price contracts.

Congress allowed similar authority to the General Services Administration and the Homeland Security Department as part of the same law, but pegged their use of the pilot program at $10 million per-award instead of $100 million. Thus far, neither GSA nor DHS has issued its own class deviations to take lawmakers up on the offer.

Read more of the DoD Reporter’s Notebook.