Pentagon to publish OTA handbook this month; rapid prototyping policy expected early next year

The Defense Department is putting some guardrails around its new acquisition authorities, with a handbook on other transaction authority set for release later this month, and a policy governing rapid prototyping and acquisition on the way in early 2019, according to the Pentagon's acquisition chief.

DOD hasn't taken full advantage of acquisition authorities like other transaction agreements (OTAs) and rapid prototyping because the law hasn't been translated into guidance, Under Secretary of Defense for Acquisition and Sustainment Ellen Lord said today at the Naval Submarine League's annual symposium in Arlington, VA.

"We're writing handbooks," Lord said. "For instance, other transaction authorities have a very bad name in a lot of bad places because they've been misused a few times. However, they are very, very important contracts to use, because you don't always know exactly what your requirement is. OTAs are used when you're really experimenting and prototyping a little bit to find out exactly what the art of the possible is."

She said the OTA handbook would be ready by Thanksgiving, with courses to follow at the Defense Acquisition University.

Meanwhile, earlier this year, Lord provided the military services and agencies with interim authority to use a streamlined rapid prototyping path for so-called "middle tier of acquisition" programs that can be prototyped and fielded within five years.

Lord described how the authority allows DOD to sidestep the traditional acquisition requirements process, and she said the authority is being used "in the appropriate places."

"For instance, when there's commercial technology that just takes a little tweak to militarize it and get it into the warfighter's hands," she continued. "When you have an already fielded system that really, for an incremental investment, you can get step-function change in capability where you don't need to go through the [Joint Capabilities Integration and Development System] process and go through two years of requirements development."

Lord has already tightened oversight of how the military services are using the authority. Her office is collecting data on current-use cases, with "detailed guidance" expected early next year, she said.

The broadened use of OTAs and the rapid prototyping pipeline were both established in the Fiscal Year 2016 National Defense Authorization Act. But lawmakers moved to restrict DOD's flexibility with OTAs after a cloud services agreement went awry earlier this year.

Congress ultimately left DOD's ability to use OTAs untouched this year, but the FY-19 appropriations measure increases reporting requirements on their use.

Lord said failures will occur in some cases with the new authority, but her aim is to "fail quickly" and continuously prototype and experiment with new ways of doing business. Since finalizing plans for re-organizing the Pentagon's acquisition offices earlier this year, DOD officials have focused more on implementing purchasing reforms like OTAs and rapid prototyping.

"We want people to get out and use these authorities, not to be scared of them, and be very creatively compliant," Lord said.