DOD, DHS chart paths to acquisition innovation

DOD and DHS are both trying to tap into the best the tech sector has to offer, and each agency has new and experimental contracting mechanisms that are showing signs of short-circuiting existing procedures.

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The Departments of Defense and Homeland Security both face challenges in updating legacy IT and acquisition systems, and both agencies have pilot programs that they say are helping to bypass bureaucracy and tap into the best of the tech sector.

Representatives of DHS's Cyber Security Division and DOD's Defense Innovation Unit Experimental told a largely industry audience at the SINET Showcase in Washington that they are cutting contracting timeframes from years to in some cases days.

Dr. Doug Maughan, senior executive in charge of DHS's Silicon Valley Innovation Program, said that his team recently completed a contract in 10 days.

"On average we're about 25 days," he said. So far they have received 75 applications and have gone forward with five contracts.

The approach is to find early stage companies -- those past the accelerator/incubator phase with products in the concept phase -- that can partner with DHS and add the agency's requirements into their products.

Maughan said the process starts with a short application. "We'll invite you in for an in-person pitch, just like the Valley," he said. "We get to ask you questions for 15 minutes and we'll give you an answer the same day as to whether we're going to invest in your company or not."

He said the projects are then funded through DHS's Other Transaction Authority acquisition process. The goal, said Maughan, is to get DHS-spec versions of products that have large commercial potential.

For example, one product in the works is a dog collar that monitors the health of DHS service dogs, which the department spends thousands of dollars training, and therefore wants to make sure are healthy.

While he said DHS might only need 2,000 collars, there is "huge commercial play -- how many millions of dog owners would buy a collar for their dog that would monitor their health?"

Maughan said other upcoming projects will focus on financial sector cybersecurity, first responder topics and Secret Service needs as well.

Such prototype projects work in four phases with $200,000 available in each six-month phase for a vendor to take a product from proof of concept to initial deployment. DHS is in the process of working out regulations that would then allow the customer – Customs and Border Protection, Secret Service, etc. – to issue a sole source contract on the back end since the product is vetted.

Maughan added that DHS is taking a liberal position of allowing the vendor to own the intellectual property.

DOD has received more public attention than DHS in this area, in part due to the high-profile launches -- and initial stumbles -- of its DIUx hubs in Silicon Valley, Boston and Austin.

Maj. Gen. (Ret.) Robert Wheeler, a senior advisor to DIUx, said the DOD startup is aiming to complete the contracting process within 90 days, and so far most of the 12 projects to date have been contracted within 60 days.

He said DIUx's long-term goal is to learn lessons on rapid contracting and incorporate them into current Federal Acquisition Regulations to improve future acquisitions. "So it's a learning piece that provides capability to the warfighter very rapidly," Wheeler explained, "but also provides a pathway to doing better acquisition capability."

DIUx has funded $36 million worth of contracts to date, which Wheeler said was a fraction of the cost if DOD had to do all the research and development itself. And he argued that companies benefit from partnering with DIUx as well.

"We have spectrum, we have airspace, we have ranges where they can actually test equipment," he said, and that means those companies can get products market-ready faster than they could on their own. That, Wheeler said, could attract companies to DOD that might not have wanted to deal with all the red tape and lengthy contracting processes in the past.

Ironically, he said, one small company has complained to him that the DIUx contracting process is actually too fast.

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