My Mistake — Congress has Already Enabled DoD “Speed to Capability”

I am embarrassed to admit that, until now, I had fully believed the myth that Congressional Laws and Department of Defense (DoD) policies require 10-20 years to develop and field information intensive acquisition programs. Because of those beliefs, I have continuously ranted about Federal Law and DoD policy changes needed to enable Information Technology (IT) intensive programs to deliver “speed-to-capability” using leading-edge IT. I am passionate about this need because, in my opinion, our Nation’s warfighters will not prevail in future conflicts without leveraging the leading-edge IT products and services available to every other country through the $4 trillion dollar global IT market.

Fortunately, Congress is leading the charge! Starting in 1993, Congressional statutes first authorized DoD the authority to use Other Transaction Agreement (OTA) contracting to rapidly build Science & Technology (S&T) prototypes that could take better advantage of commercial and non-development products and services. The purpose of these OTA prototype activities is to allow Non Traditional Defense Contractors (NTDC) to sell to DoD as easily as normal industry-to-industry contracts. In turn the Department is able to more easily discover commercial and non-development products and services from companies not always interested in investing time and resources in certified DoD cost accounting systems, and dealing with long and expensive Federal Acquisition Regulation (FAR) contracting processes.

For these reasons, following my June 12th post, I made it a point to learn more about the OTA Statutes found in Title 10 United States Code Sections 2371, 2371b, and 2373. This new interest was driven by repeated Congressional budget language berating DoD acquisition leadership for not making better use of OT Agreements, FAR Part 12, commercial item procurement, and FAR Part 13, simplified acquisition. To understand this Congressional pressure one need only look at the findings of the House Armed Services Committee Panel on Defense Acquisition Reform Findings and Recommendations, March 23 2010 (page 15) that states:

  • “Only 16% of all IT [intensive] projects complete on time and on budget.
  • 31%are cancelled before completion.
  • The remaining 53% are late and over budget, with the typical cost growth exceeding the original budget by more than 89%.
  • Of the IT projects that are completed, the final product contains only 61% of the originally specified features.”

NASA was the first agency to be authorized OTA authority in 1952.  OTA was not authorized for DoD until DARPA was allowed to use it for prototypes in 1993. Since then, Congress has updated these statues every few years and have now authorized the use of OTAs by all Military Service projects and programs in support of rapid prototyping and, as of FY2016, early production systems. Most recently, H.R. 2810 – National Defense Authorization Act for Fiscal Year 2018, again modified OTA statues by removing dollar approval thresholds and allowing OTA prototypes to transition to sole source production if the prototypes were developed with competition, such as using an OTA consortium. Further, this Congressional language recommends the use of OT Agreements as a preferred choice:

“…the committee remains frustrated by an ongoing lack of awareness and education regarding other transactions, particularly among senior leaders, contracting professionals, and lawyers. This lack of knowledge leads to an overly narrow interpretation of when OTAs may be used, narrow delegations of authority to make use of OTAs, a belief that OTAs are options of last resort for when Federal Acquisition Regulation (FAR) based alternatives have been exhausted, and restrictive, risk averse interpretations of how OTAs may be used. These behaviors force innovative projects and programs into unnecessarily restrictive contracting methods, needlessly adding bureaucracy, cost, and time.”

Taking advantage of OTA Statues, beginning in 1998, DoD has established ten OTA consortia centered around different system functional products as shown below:

These consortium agreements are managed through non-profit management companies supporting parent DoD organizations. Program or Project Managers submit problem statements to these consortia to identify possible product and service offerings to their program. As mentioned in my last post, the Consortium for Command, Control, Communications and Computer Technology (C5T) has over 500 member companies specializing in commercial and non-development Command, Control, Intelligence, Surveillance, and Reconnaissance (C2ISR) and Cyber products and services.

So what is an OTA?


  • A standard procurement contract, grant or cooperative agreement;
  • Protestable.


  • Exempt from many provisions of the FAR;
  • A legally binding instrument;
  • Similar to a commercial-sector contract.

Why would a Program Manager want to use an OTA? The answer is to discover new technologies and quickly validate these technologies against operational mission requirements and system needs. OT Agreements help do this because:

  • OT Agreements can be obligated and awarded in as little as 90 days;
  • Innovators from Small Business and Non-Traditional Defense Contractors are more likely to participate in OTAs than traditional FAR contract processes;
  • Flexible Intellectual Property provisions improve both government and contractor opportunities;
  • Public/Private cooperative relationships are promoted;
  • Government program managers retain total project management control; and,
  • Project payments can be made based on measurable milestone achievement.

Unfortunately, the cultural challenge is that DoD, out of necessity, has always built it’s own military platforms, weapons, and supporting C2ISR capabilities. This need forced the Department to lead the development for most of today’s communications, networking, and computing technologies to include the famous DARPA internet development. In the process, the DoD 5000 acquisition process, plus supporting budgeting and requirements processes, were formed around “make” or “build” activities with little expectation of “buying” prebuilt solutions. Those “make” processes are still valid for the majority of DoD’s platforms, sensors, and weapons, but less so for information dominant systems where commercial information and technology (IT) is growing exponentially, while serving the $4 trillion dollar global IT market.

By better leveraging this $4T commercial IT market, and using the procurement tools Congress has authorized, DoD can turn most IT intensive program requirements into predominantly “buy” programs, while remaining near the leading edge of IT, rather than trailing 5-10 IT generations behind. Many of the reasons for the unacceptable 2012 Congressional IT Program report is that those programs were slowed down by culturally comfortable “make” requirements, budgeting, and acquisition processes, while exponential IT market growth created a shifting sand of IT hardware and software leaving them with end-of-life IT components even before new systems were deployed. 

  By actually listening to Congress and taking advantage of these current acquisition authorities, DoD could align with the 12-18 month IT upgrade cycles needed to remain on the leading edge of IT, as the world enters the era of artificial intelligence and cognitive computing. This can be done by dropping the time wasting top down “make” requirements and substituting early OTA prototypes to discover the latest commercial or non-development opportunities capable of quickly satisfying mission requirements and informing system “buy” requirements with greater empirical proof-of-concept knowledge.  By taking greater advantage of OTA consortium opportunities, acquisition programs can move more quickly through Milestone A and B, with demonstrated operational solutions capable of informing Milestone C full rate production decisions. If that solution then includes a predominance of commercial items, FAR Part 12 contracts can help speed C2ISR production into Full Operational Capability (FOC).

Fortunately, by using OT Agreements, Congress has fully enabled forward leaning acquisition executives and Program Managers to rapidly deliver IT intensive war-fighting capabilities delivered on leading-edge IT hardware and software. These C2ISR capabilities will be critical enablers of future DoD capability such as the U.S. Navy’s New Fleet Design vision. In the face of the commercial IT market enabling other countries to challenge our Nation’s maritime dominance the time for change is now!

The father of Public Administration, Max Weber, theorized that organizational bureaucracy was the only way large organizations could be efficient, however, upon occasion would permit himself to hope that “some charismatic leader might arise to deliver mankind from the curse of its own creation.” We know from the U.S. Navy’s acquisition history, strong charismatic leaders are largely responsible for the strong Navy our Nation’s defenses rely upon today, i.e. Admirals Hyman Rickover (nuclear submarines), Red Rayborn (submarine ballistic missiles), and Wayne Meyer (AEGIS missile defense ships).

In these pressing times, it is now imperative, more than ever, for today’s charismatic Naval leaders to deliver a New Fleet Design to help sustain our Nation’s global leadership.

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15 Responses to My Mistake — Congress has Already Enabled DoD “Speed to Capability”

  1. Chuck Alcon says:

    Marv- As I look back, clearly the painful, lengthy, expensive FAR procurement process with Preliminary Design Review, Critical Design Review, etc. cannot adapt to the modern tech cycle yet there are conflicts. A small number of system procurements ( tens not millions), the incredible expected service life, life cycle support, logistics support, technical training, operating environment, application specific software tailored for multiple mission threats, required ISA’s, the open systems mandate, second source, Leader/Follower, the eventual transition to the reserve forces of the technical systems ( add another 20 years) creates a most difficult procurement model. Maybe some form of modular system with replaceable units and a simplified standard interface with minimal inputs would allow for tech upgrades with a total replace methodology. Yet when I see Windows 8 is no longer supported and I can only use Windows 10 which has some functions I don’t need or desire what do I do? I down load Windows 10 and continue. We have fighting hardware which is 50 years old, I think some of the missile silos still use floppy disks. We have shipyard overhaul periods to upgrade the mechanical/propulsion/electrical systems routinely but the system struggles with a simple tech upgrade. One possible answer may be to establish a proven core combat system team made up of commercial military system designers and then inject OTR procurements into that team; many of the major issues noted above however will still remain. A different approach may be to not have such large and complex combat systems but rather a series of smaller, cheaper systems again with well defined, simple interfaces that could be changed out without a major, maybe a nodal network with each node being an OTR solution again simplified interfaces (i.e CIWS). Whatever it becomes we must continue to think outside the FAR procurement box; keep on keeping on. P.S. I never completely understood why the Sylvania CP–642B would not operate with the Univac CP-642B which is why only sets of the product by each supplier were installed (timing, system tolerance creep, margins, etc.)

    • Marv Langston says:

      Thanks Chuck, great comments spoken from a person that spent a career dealing the challenges you describe… I believe that past paradigm you cite has to change if Navy is to prevail in the near future. Today’s IT density, performance, and mobility are providing for a totally new C2ISR system in a carry-aboard box and when we learn how to do that, the same thing for the combat systems. It is similar to the Tesla automobiles that receive complete software downloads while you are sleeping. Those new software loads have driven a minimum of 600,000 miles of real world, but simulated highways in all forms of situations. We must learn to do the same or something similar… The challenge is that it may take a new skunk works team that comes from a new breed of engineers not currently employed in our Navy system…

  2. Michael Bachmann says:

    Marv, a great article, as always! A great resource for advancing DoD acquisitions for those that are courageous to pursue and unencumbered by legal and contracting entities who will interpret this statute differently!

  3. Frank Fernandez says:

    Good article and I agree. You might want to look at how the decision to focus on buying rather than internally developing and building affects the makeup of the technical staff at the government centers tasked with executing this approach.
    In may opinion, development centers ( including DARPA) would need to look for and recruit young technical people with motivation and skills needed to make them good”buyers” for the government. Technical schools would need to include classes in this area and the change would be very influential in the makeup of our technical staff in the government.

  4. Mike Covington says:

    Yes…I totally agree with your article. Anything that gets the right technology into the warfighters hands sooner is all goodness. I don’t know anyone that has been around this beltway for 30yrs in the IT industry that would not advocate acquisition reform. The 5000 process is broken as it relates to an IT implementation. The science of warfare is totally dependent on IT and it can’t be developed with the 5000 process. We have extremely bright people in Gov’t and Industry so why hasn’t acquisition reform happened. It all starts with technical Leadership within the service chiefs/operational ranks demanding reform. Until that happens I’m not sure change will ever happen.

  5. Terry Howell says:

    Great article. The “Program of Record” paradigm is a quagmire of bureaucracy. Every aspect is geared to keep the POR alive. Anything born outside of a POR’s baseline is doomed to failure unless it can get under a POR’s O&MN tail. For IT I would propose replacing “Program of Record” with “Portfolio of Record”. Have the OPNAV Resource Officer maintain the baseline of Requirements within a portfolio and replace Program Manager with Portfolio Manager. The PM would be responsible for meeting the requirements within his portfolio, within his budget. You would then be managing to a baseline of requirements rather than a baseline of code.

    • Marv Langston says:

      Thanks Terry, good comments and a good idea… as you say, in IT we need to constantly update and improve capability as quickly as possible. The portfolio idea is good but as you say, replacing program with portfolio can be a start but we need a DAU that learns how to teach “Buy” and not just “Make.”

  6. Michael Jacobs says:

    Great article Marv. Do you have any thoughts about best practices for transitioning, as a pilot or initiative matures, from OTA funding/acquisition to a FAR based acquisition program?

    • Marv Langston says:

      Michael, great question and thanks for asking. I think we have allowed the “make” biased IT intensive acquisition process become so convoluted that we can’t get out of our own way. We know that every program of record FAR contract, from first idea to awarded contract activity, takes 18-36 months and usually more towards that larger number after getting around protests. By following Congress’ lead and shifting these activities from bottom up spec writing to empirically derived system requirements based upon successful prototypes demonstrated to the Fleet users, we can change the overall game. Given that an OTA can be put in place in 3-6 months, with sole source limited production based upon successful prototypes, this would completely turn programs around from 10 years to IOC into 2-3 year to IOC, without generating needless specifications that often end up being of little value. By using OTAs up through limited production, a FAR contract could be let for full production numbers. However, at the same time, using the new DoD process for what they are calling “alternate acquisition pathways” a highly dynamic C2ISR program could remain in an OTA contract mode doing continuous capability improvement. I plan to blog about alternate pathways next. If you would like to discuss further shoot me a note at

  7. Carol A Haave says:

    Problem is the bureaucracy is focused on process while what we need is an acquisition corps that is focused on outcomes. If we were focused on outcomes, we would make different decisions about any number of things. And Congress needs to not punish the many for the bad actions of the few. There’s a reason that hammers cost $700. Congress enacts legislation to prevent the few from taking advantage while handcuffing the majority who are trying to do the right thing. OTAs are one answer to that but they need to be expanded to all activities and accommodate other priorities.

    • Marv Langston says:

      Thanks Carol, great points. That is why I say the #1 program metric should be “speed to capability” and we have to drop our culture of thinking it will only work if we “make or build” it… The changes Congress has made on the use of OTAs over the past couple of years go a long way to helping but our bureaucracy still wants to ignore OTA because it changes the game for contracts and that doesn’t feel comfortable to them…

  8. dan green says:

    Thanks for the tutorial on OTA. As we move into the post-AT&L era, understanding why USD R&E and CMO have been established underscore your points. Are USD R&E and CMO Business IT responsibilities even going to be considered “acquisition”?

  9. Davey Ahearn says:

    Dr. Langston, thanks for the informative article, the OTA is definitely gaining steam in the last year or two. I’m curious about your views on the constraints of the OTA (must be FFP), and how that will mesh with the popular Agile development methodologies advocated by govt today. This may be more a question of “how do FFP and Agile possibly co-exist?”, and deserve its own blog post. I support the use of OTA, but believe we will have execution challenges as adoption becomes wider, due to the requirement to use FFP contracts within the OTA vehicles.

    • Marv Langston says:

      Davey, great comments and concerns on the OTA constraints. My understanding, from talking with companies that have received OTA’s, is that all options can be negotiated including progress payments. In previous years, OTA has been strictly aligned with S&T activities, but the FY17 and FY18 NDAAs have completely opened up OTA as the preferred path forward for COTS/NDA and non-defense industry company business with the Federal Government. The real DoD challenge is the strong “make/build” culture, including the DAU teachings, that is pushing against these new opportunities.

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