2021 NDAA – All Systems GO for Other Transactions! but curiosity about so-called “consortia”

posted in: Other Transactions | 0
Share this:

 

Two provisions of the National Defense Authorization Act for 2021 are likely to impact DOD’s use of Other Transactions (OT). One provision (sec.833) directly references 10 U.S.C. 2371 and 2371b OTs, but will probably have modest effect.  Another provision (sec. 846) makes no direct reference to OTs but could profoundly impact their use.

Section 833 directs DOD to publish a list:

of the consortia used by the Secretary to announce or otherwise make available opportunities to enter into a transaction under the authority of section 2371 of title 10, United States Code, or a transaction for a prototype project under section 2371b of such title.

This is a clear reference to the so called “consortia” which have been repeatedly replicated in recent years.  These consortia lack the key ingredient of a true consortium, the association or collaboration among members to conduct business or carry out a project jointly which none could do as well individually.  They appear to be modeled on the FAR-based concept of an indefinite delivery/indefinite quantity (ID/IQ) multiple award task order contract.  MITRE Corporation has created and maintains a list of the current OT consortia which is available at its website. This makes the need for section 833 seem questionable.

Section 846 is titled:

IMPROVING IMPLEMENTATION OF POLICY PERTAINING TO THE NATIONAL TECHNOLOGY AND INDUSTRIAL BASE.

The first sentence of section 846 mentions 10 U.S.C. 2501.  The provision also amends 10 U.S.C. 2440 requiring the Secretary of Defense to provide policy direction to military department and defense agency acquisition organizations.  Such policy guidance is to address “research and development, manufacturing, and production capabilities identified pursuant to chapter 148 of this title…”

Section 2501 and chapter 148, generally, of title 10 have implications for the use of OTs. Section 2501(b) states:

(b) Civil-Military Integration Policy.-The Secretary of Defense shall ensure that the United States attains the national technology and industrial base objectives set forth in subsection (a) through acquisition policy reforms that have the following objectives:

(1) Relying, to the maximum extent practicable, upon the commercial national technology and industrial base that is required to meet the national security needs of the United States.

(2) Reducing the reliance of the Department of Defense on technology and industrial base sectors that are economically dependent on Department of Defense business.

(3) Reducing Federal Government barriers to the use of commercial products, processes, and standards.

It should be obvious that making dual-use DOD’s preferred approach to R&D and expanded use of OTs is essential in order to comply with this policy.  DOD needs to be able to do business with companies unwilling or unable to do business via FAR procurement contracts.  Traditional defense contractors need to be unshackled from the high overhead DOD business practices that make them non-competitive in the commercial marketplace. In a recent article it was pointed out DOD regulations and business practices essentially have captured defense contractors and made them regulated public utilities.  Former Senate Armed Services Committee staffer Bill Greenwalt has used the term “privatized arsenal system” to describe the current state of the defense industry.

Chapter 148 contains section 2511, Defense Dual-use Critical Technology Program.  This section was at the heart of the Technology Reinvestment Project (TRP), the program in which OTs were first extensively used.  DOD let section 2511 fall into dis-use and has basically ignored the statutory civil-military integration policy.  This flaunting of congressional mandates by DOD and military department acquisition executives is further exemplified by their refusal to honor the mandate in NDAA 2018 section 864 to create a preference for using section 2371, 2371b and 2373 in conducting research, development, and prototyping programs.  Also ignored has been the direction found in 10 U.S.C. 2371 (g) to provide adequate education and training for program managers, technical and contracting personnel in the use of OTs and other forms of innovative contracting.

The recently departed senior DOD leadership from the Secretary down to service acquisition executives completely failed to implement mandates that are critical to DOD expanding its industrial and technology base. It waits to be seen whether new DOD leadership will be just as cavalier about implementing policies that can maintain our defense capabilities and national security in an affordable and timely manner.

 

written by Richard L. Dunn

Leave a Reply

Your email address will not be published. Required fields are marked *