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DIUx Releases Guide For Faster, Less-Costly Technology Acquisition

WASHINGTON, Nov. 30, 2016 — Bringing vital technology innovations from commercial developers to fighting forces more quickly is a challenge that the Defense Department’s Defense Innovation Unit Experimental, or DIUx, has been working to solve since its inception last year. Today, it shared its model for success as it released a “Commercial Solutions Opening” guidebook describing how other federal agencies can create “innovative contracting vehicles” to bring technological innovations to practical use in less time and at lower cost.

During a forum focusing on improvements in acquisition services at the Center for a New American Security in Washington, guest speakers from defense, Congress and the Office of Management and Budget discussed a broad range of potential improvements.

Lauren Schmidt, pathways director at DIUx, was one of the first panelists. She discussed her unit’s June 2016 debut of a first-ever Commercial Solutions Opening, or CSO, which is a new mechanism for working with private-sector developers to obtain prototypes of newly emerging technologies that can benefit U.S. military operations.

“We have to be able to change our business practices in order to be able to access these phenomenal technologies,” Schmidt said.

DIUx formed in April 2015 in response to a pressing problem: how to integrate newly emerging technologies into fighting forces in the midst of constrained defense funding. It created the CSO process as one way to meet the challenge.

Fast-tracking the Acquisitions Process

In the CSO process, DIUx solicits private-sector developers who are creating relevant new technology products and services that stand to benefit U.S. military operations. DIUx receives developers’ proposals, awards “Other Transactions,” or OTs -- which are similar to traditional contracts but offer more flexibility -- to those who show the most promise, and fast-tracks prototypes of the new technologies to defense units or departments that will deploy them in real-life settings.

“CSOs use merit-based selection approaches to address a particular problem the Department needs to solve,” said Frank Kendall, undersecretary of defense for acquisition, technology, and logistics, in a statement released alongside the guidebook. He added that the process is similar to that of broad agency announcements, or BAAs, by which the National Institutes of Health and other federal agencies fund scientific and technological research and development.

What sets CSOs apart, however, is their speed: On average, it takes no more than 59 days for DIUx to solicit a proposal, award a contract, and deliver the prototype. This amounts to massive time savings over typical technology-procurement processes that can take months or even years.

“Not only do we get a better outcome and better project, but it also saves a lot of time and money,” Schmidt said. “We’ve demonstrated through the CSO that DoD can move at the speed of business and be attractive to these companies.”

Schmidt also discussed the new guidebook during her talk. The guidebook, which is 99 pages and titled “Fast, Flexible, and Collaborative: The Commercial Solutions Opening and DIUx’s Approach to Other Transactions for Prototype Projects,” shows how other federal agencies can create CSOs of their own and how they can benefit from doing so. DIUx is now offering the book for free viewing on its website.

“We’re making this information more widely available, so that others can hopefully build on our success with the CSO and really help to build the acquisitions process. We’re hoping that by spreading this across the department, that we can really drive innovation throughout DoD,” Schmidt said.

More recently, DIUx has been advocating for expanded use of CSOs throughout the Defense Department. At present, a defense organization must first have an Other Transaction Authority, or OTA, before it can use a CSO to acquire prototype. However, the 2017 National Defense Authorization Act may allow agencies holding Federal Acquisition Regulations-based contracts to also procure prototypes via CSOs.

“DIUx is opening up the DoD to a new vendor base many times larger than the vendor base the department works with today,” the guidebook’s introduction states. “The CSO allows us to leverage the enormous amount of commercial research and development investment and quickly access cutting-edge technology.”

Distribution channels: Military