DOD, COVID-19 and Other Transactions

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Early in the COVID pandemic crisis DOD and the Department of Health and Human Services (HHS) were directed to cooperate in coming up with a response to the crisis.  They entered a memorandum of understanding on their cooperation on what became know as Operation Warp Speed.  Despite partisan snipping it is widely recognized that the development and approval of new vaccines and therapies against COVID-19 in considerably less than a year was “miraculous” and “totally unexpected.”  Despite little mention Other Transactions played a key role in Operation Warp Speed.  Both DOD and HHS’ Biology Advanced Research and Development Administration (BARDA) had OT authority.  The DOD/BARDA Warp Speed team gets much credit for the results achieved.  Industry responded magnificently to streamlined government business practices.

A rare and limited glimpse into the role OT’s played in Warp Speed was revealed in a Senate Armed Services Committee hearing on February 25.  The official performing the duties of the DOD Undersecretary for Acquisition and Sustainment (in absence of a confirmed political appointee) testified.  Stacy Cummings testified DOD continues to use OT’s and the Defense Production Act (DPA) in response to the COVID-19 pandemic.  In April 2020, DOD eased certain approval authorities for OTAs, implementing § 13006 of the Coronavirus Aid, Relief, and Economic Security Act.  Sen. Kirsten Gillibrand (D-N.Y.) said OTAs “can empower the DOD to move faster and be more flexible in acquisitions and develop solutions via working with nontraditional, nondefense contractors,” but “there has been recent criticism that this authority is not being used to the fullest extent.”  A deficiency in workforce education was identified as the cause.  Gillibrand quoted Strategic Institute Founder Rick Dunn as the basis for her statement.  Cummings committed to work “to expand the knowledge and understanding across all of the different parts of the defense acquisition workforce, to include contracts and legal.”  She told the committee that, through a variety of acquisition tools, DOD has “executed contracts and agreements valued at over $30 billion in support of the national response.”  DOD “took immediate steps to mitigate the impact of COVID-19 on the defense industrial base,” she testified, pointing to “significant investments under DPA…in industrial capability to sustain businesses that would otherwise have been either fragile or have gone out of business, based on the impacts of COVID,” in aircraft manufacturing, shipbuilding, textiles, and other industries.  She noted that DOD has transitioned a strategic-investment pandemic task force into a permanent office in the Joint Rapid Acquisition Cell.  The office will maintain interagency relationships so that in an emergency DOD has the “interagency agreements in place to quickly respond to that requirement, without having to reestablish—or newly establish—those relationships and, frankly, all of the memoranda of understanding and paperwork associated with moving money or moving requirements from one agency to the other.”  In the public media little has been said about OT’s and Operation warp Speed.  Thanks to Sen. Gillibrand DOD has been challenged to up its game on OT competency and awareness.  While much was done, clearly more is needed to be able to respond to future emergencies that need inter-agency cooperation and flexible contracting.  The growing “acquisition capability gap” disadvantages the warfighter and Nation, there is a serious need for the new administration to grapple with DOD’s need for business process improvements, initially focused on contracting.

See article, Feature Comment, “New Administration: New Acquisition System?”

written by Richard L. Dunn, Founder, Strategic Institute for Innovation in Government Contracting, former DARPA General Counsel