Defense Innovation Unit shares lessons learned about acquisition of prototypes

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The Defense Acquisition University and the Defense Innovation Unit have teamed up to offer what you might call an acquisition baptism. It’s what they call an immersive course to get procurement people trained in commercial practices for buying goods and services faster. As DIU officials like to put it, at the speed of relevance. For more about the course to be offered this fall, the Defense Innovation Unit Director of Acquisition Cherissa Tamayori spoke to the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin: Ms. Tamayori, good to have you on.

Cherissa Tamayori: Hi, thank you for having me.

Tom Temin: What is an immersive experience for acquisition? It sounds like you put goggles on and walk around in a room or what’s going on here?

Cherissa Tamayori: Yeah, so one of the things that we noticed that the DIU’s mission really is to accelerate the adoption of commercial technology across the Department of Defense, we do that by really having a deep understanding of the commercial sector and through our acquisition process. And what we’ve seen as we’ve been executing our other transaction authorities, and our prototypes is that although the OT’s, the other transaction authority, has been around for a while, a lot of the contracting and acquisition professionals across the DoD really don’t have a thorough understanding of how to use the authority, or how DIU utilizes the authority to really reach these nontraditional vendors. And so what immersive means when it comes to this program is we are, we want our fellows we want our ICAP fellows – our Immersive Commercial Acquisition Program fellows – to really gain hands-on experience. I think there’s a multitude of online classes, I think, out there. But we really think that the experiential learning is really needed to get those throughout the Department of Defense a thorough understanding on how to actually utilize the the authority as well as the process.

Tom Temin: So that means this course will take place in person?

Cherissa Tamayori: So this program will actually be virtual, however, they will be working alongside our agreements officers on actual problem sets that diu is working on, which aligns to all the problems that we’ve worked on across the services. So we are still in a virtual environment, but we’ve been still been able to execute successfully even virtually.

Tom Temin: Okay. And just to make sure we understand he will be talking specifically in this course about other transaction authorities, but not necessarily or not at all FAR regular, FAR-based acquisitions or DFAR?

Cherissa Tamayori: Correct, correct. So DIU solely utilizes the other transaction authority to execute prototypes. And that’s where we really are able to create such an expertise in that areas, because that’s all that we focus on when we execute our prototypes.

Tom Temin: And also just to, again, make sure we understand the parameters. You can’t use OTA, for like emergency rapid acquisition, that’s a whole different area of acquisition.

Cherissa Tamayori: Correct. We utilize the other transaction authority to prototype efforts. There are some instances, like we recently seen with the coronavirus, where you can rapidly prototype solutions to field very quickly. So I guess it depends on what what we’re coming for. But we’re not a quick way to get to an end item.

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Tom Temin: If you’re an emergency response agency and you need 10 million water bottles the next day, you still have a FAR way to do that, but not an OTA way.

Cherissa Tamayori: Correct.

Tom Temin: Who can come to this course? Not every agency has OTA, most of them do have that authority. So who can come to the course?

Cherissa Tamayori: For this initial launch, we’re really targeting government, civilian as well as military contracting professionals that are mid- to senior-level contracting officials. We really want to make sure that those coming to experience the program to work with us have a baseline understanding of government procurement. I think that’s really important because you need to know what your baseline rules are in order to know why certain aspects are in place. And then to know that, knowingly deviate from those things and what those consequences are and or some of the benefits of deviating from from those baseline requirements. We are really targeting initially contracting professionals, the GS 13 to 14 range and military officers 04 to 05.

Tom Temin: All within DoD?

Cherissa Tamayori: All within DoD.

Tom Temin: We’re speaking with Cherissa Tamayori, she’s director of acquisition at the Defense Innovation Unit. There is, as you point out a history to OTA, it goes back quite a number of decades, really. And there’s a good deal of case law and regulatory information available about it. But is it fair to say that DIU has gotten really good at it and maybe have paved new ground for how it can be used legally, ethically and also effectively for a mission?

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Cherissa Tamayori: Yes, I believe that is the case 100%. Because we solely focus on executing OT’s, we have really been able to hone in on on that specific skill set. We think outside of the box while still being cognizant of the rules and regulations that we have to follow and maintaining an ethical, fair process. And our process is very highly competitive. As we’ve seen I think the latest numbers, I think are, last year we received over 1,000 submissions on our projects. And so it’s very highly competitive. But at the same time we keep an open mind and we partner. A lot of the DIU personnel are former commercial executives. So that provides us with insight that you don’t typically get within your typical acquisition office. So we are able to understand a little bit about the venture capitalist community a little bit about the motivations of some of these private companies that you may not otherwise get exposed to in your traditional acquisition organization. That’s really important, because the more that we understand how the commercial sector works, and their motivations, the better that we can, as contracting professionals craft better agreements, and create agreements that are mutually beneficial both to the government as well as to commercial industry.

Tom Temin: And I think a lot of people are mystified by the next step, once you have acquired a prototype with all this competition, and say, the Army or the Air Force says “Great, we love it, we’d like 10,000 of them,” whatever it is. And that is called the Valley of Death, or there’s different terms for it, but moving to the production level, where OTA is no longer the methodology of choice for the acquisition, is that part of the course too, how to navigate that next step?

Cherissa Tamayori: Yeah, so the acquisition team here at DIU, we do a lot of work working with our partner organizations. So that will definitely be a part of that experience, because they’re going to be working alongside our agreements officers. On all of our prototype efforts, we do reach out to the contracting entity that will be performing the production contract, whether it be a FAR contract or an OT – an other transaction agreement of production, other transaction agreement. And so they can see the work that we do internally, the highly competitive process, how we meet all the statutory requirements, and then how we communicate that and share our documents with the follow-on contracting activity to help smooth that process. And one of the things that we’re hoping to get out of this program is to just share that information. So share the process, shared DIU’s, what DIU does, how DIU does it and just share the information across the Department of Defense, there is a better understanding and a better comfort level, I think, with those who will then execute the production efforts. There are real 11-02s, we are actually, it’s very experienced contracting officers that have had experience across the DoD and just having that comfort level I think will help significantly with some more transitions.

Tom Temin: And just to detail, there is a mechanism for the occasional production OTA-type of award that does exist?

Cherissa Tamayori: Correct. Follow-on contracts for production can either be FAR type or they can be a production OT assuming the production, or assuming the contracting office executing the production OT has OT authority.

Tom Temin: How are you selecting the people that will participate? And how many will participate? And I guess my compound question is, do you expect those people to become kind of train-the-trainer-type folks?

Cherissa Tamayori: Yes, exactly. So we are initially selecting six ICAP fellows for this initial round. We chose six because that is the number of portfolios that we have. So DIU is split up into six portfolio areas, which really aligned to where the commercial sector is leading in innovation. Those portfolio areas are artificial intelligence and machine learning, autonomy, cyber, energy, human systems and space. And we have one agreements officer who works on each portfolio. And because we really want this to be a learning opportunity, and we want to make sure that our ICAP fellows have a mentor, we’re aligning each ICAP selectee to one of the portfolio areas and aligned with our agreements officers. So they’re going to work alongside with that person on actual projects. To your question about a selection, so we’re really looking for highly motivated people who are willing to think critically and think outside of the box. Obviously, contracting professionals to begin with, assuming the program is successful, we’re very excited about it, as well as the partnership that we’re having that we’re doing with the Defense Acquisition University on this, that assuming it’s successful we’re looking to expand to maybe other career fields outside of contracting. But for the initial round, it will be just for contracts.

Tom Temin: You said that it would be a virtual class, but what are the time requirements and time of day requirements and so forth, really? And how long will this whole thing run when the people are selected?

Cherissa Tamayori: Yeah, great question, thank you. So this will be a 12-month program. It’s a full-time, 12 month virtual program so we’re not asking anyone to move locations, but we are asking for them to be 100% dedicated during the work day to this effort. The primary focus of the experience, we’ll be working on projects, but we will also have quarterly training in partnership with the Defense Acquisition University and they recently launched a new credentialing program. So we’re incorporated their other transaction credentialing program as a part of this program. There will also be constant collaboration, like I mentioned, with the DIU’s commercial engagement team, which will really provide much more in-depth understanding of the commercial market. And some of the concerns, some of the constraints that the commercial industry has to deal with that will expose our fellows to some of the concerns and some of just the items that we all need to be aware of as we craft agreements, as we negotiate with these companies.

Tom Temin: And over this year, it’s all day for the year or is it just an hour a day for the year?

Cherissa Tamayori: It will be all day for the year.

Tom Temin: So it’s a major commitment on somebody’s part really for career development, and the agency has to give them leave from their regular workload.

Cherissa Tamayori: Correct.

Tom Temin: Cherissa Tamayori is director of acquisition at the Defense Innovation Unit. Thanks so much for joining me.

Cherissa Tamayori: Thank you.