Speed to Contract: Know How to Fully Leverage OTAs & Other Tools & Tech
How can Other Transaction Authorities (OTAs) shift the US government’s acquisition process into overdrive? In a recent Speed to Contract, Speed to Market video podcast, host Tim Templeton gets the drop from Stan Soloway, former DoD Acquisition Official and CEO of the Professional Services Council. Soloway discusses the possibilities of bringing OTAs into daily contracting use, leveraging CSOs as another powerful yet underused strategy, and embracing corporate training models to educate the next wave of government employees.?
We’ve edited the below comments for brevity and clarity.??????
OTAs work well in emergencies. Why not day to day???
I have a very simplistic view of how we drive greater speed, efficiency, and performance in the acquisition process. I look at things we've done in emergencies and how the system has responded when needed. Of course, the most famous in recent years is the COVID-19 vaccine—a product of OTA development.?
I asked myself, “Well, what did we do there—that enabled us to get results so quickly—that is different from what we traditionally do? Why are we not mimicking that in traditional acquisition along with fixes, if you will, where problems may have emerged because of weaknesses or gaps?”
Why is it insufficient day-to-day if it's good enough in an emergency? That doesn't mean we waive audit requirements or compliance. In public procurement, these are essential components. But there are so many examples where the OTA system has performed admirably.?
Here’s my point: I don't think we do a very good job of looking at these things we've done in really exigent circumstances to figure out how we could mirror or mimic them day to day.
Less about a specific tool. More about what we learned.?
Are we going to use OTAs for everything in procurement? Of course not. Although I challenge people to tell me where OTAs are not appropriate because the question of appropriateness is determined, in my view, solely by whether or not a tool meets the basic tests of public procurement, the ethos of public procurement—transparency, competition, outcomes, et cetera.?
Why wouldn't you use it more commonly if a tool meets them? I’m not saying we should use OTAs everywhere. It's that, again, we have a tool that has led to other tools, which I'll talk about in a second. It’s a tool delivering value but struggling to get over the finish line to become a near-peer capability to the FAR-based competitions.
What holds us back from using OTAs effectively??
What is holding us back? In the report a colleague and I did a year and a half ago, we examined the questions, “Does it meet the tests of federal procurement, the ethos of federal procurement? If not, where do we need to improve?” And then second, “Why are we not getting more results out of OTAs?”
Spending through OTAs has gone from $500 million seven or eight years ago to $13 or 14 billion more recently. But I don't want to suggest that OTAs are the panacea. However, we can learn things from them that inform how we progress.?
The last point I'll make: There are pieces of the OTA process, mainly practiced by the Defense Innovation Unit, that are now mirrored through statutory authority elsewhere.
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CSOs: another underused tool
The main one is called a Commercial Services Offering or CSO. A CSO process is the front-end piece of an OTA. It’s used when a customer puts out a problem statement, invites people to come in with how they would address that problem, and then that customer selects one or more to move forward with prototyping. The FAR covers it; it's a performance-based approach to awarding contracts and should lead you to a performance-based acquisition.?
In this light, the CSO is a tool that is also underused, and the question becomes, “Why?” To the point of people responding, “The tools are there to use,” I'm hesitant even to say that because that was the line you heard from people who didn't agree with all the acquisition reforms of the 90s, the 2000s, the 2010s, and so forth.
Many said, “No, we don't need more reform. All the tools are there.” Well, they weren't there way back. They are there now. Some of them are severely watered down. I think the 809 Panel identified some areas a couple of years ago, particularly around commercial. And we've taken two steps forward, maybe a step and a half backward, but they're there. The question is, “How do we now capitalize on them? And what can we learn from what's happening in the workspace?”
Caution: We’re still having trouble transitioning OTAs to production?
OTAs are primarily an R&D tool that we've been pushing for years. I pushed for it when I was in office in the late 90s to get what we called “production authority.”
In other words, once I get a non-traditional contractor in the game, I want to take that company through the entire development-to-market process with the same terms and conditions I had to start. Otherwise, you go back under the FAR—and the problem of them potentially walking away happens.
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Authority granted:? Go full-production?
Finally, the government granted this authority several years ago. Yet only some programs have gone into production. There have been a few, but they —and I've talked to companies that have taken them forward—have been very painful. The authority has required huge companies to make difficult compromises they would not ordinarily have made.
Once you roll out of that prototype environment into a production capability, which the law now provides, the tendency to throw FAR clauses back into the production contract sort of submarines the whole intent of what an OTA is, to begin with.?
Over the years, Congress has repeatedly and specifically said, “No, you don't need to do that.” But the system—and here we’re starting to look through a culture lens— maintains a hold on a couple of different pieces of the puzzle, and they're not easy. But there is some encouraging work that’s happening.
The Defense Acquisition University (DAU) is working hard on a more robust curriculum around alternative acquisition tools. They're making a serious effort along those lines.?