SI’s managing partner, Christian Dunn, sits down with founder, Richard L. Dunn, to discuss Other Transactions. Are they just a tool in the toolbox or are they something entirely different?
Video Transcript:
CD: Defense leadership has been quoted saying that other transaction authority is just another tool in the toolbox. Advocates for OTs say they could be the core of an alternative system. What’s your opinion?
RD: Tool in the toolbox is an interesting concept. Claude Bolton, who studied OTS in 1990s when he was a major general in the Air Force, issued a report on the utility of authorities for the Air Force and there was a graphic in that report and it talked about the acquisition toolbox and it laid out different ways of doing business and acquisition under the Federal Acquisition regulation, buying goods and services using agreements contracts like sales contracts. I mean, the Department of Interior sells wood to two companies that need the resources of the forest, so in a sense, OTs fit into that toolbox, although they don’t fit into one space in that toolbox, they are spread across the range of that toolbox.
Another way of looking at other transactions is that they do in fact constitute the core of an alternative the acquisition system. Namely, there is a legal authority to conduct science and technology projects using other transactions, there’s legal authority to conduct prototype projects relevant to enhancing the capabilities and subsystems, components, and materials, there’s legal authority to enter into follow-on production successful prototype project and there are even examples of using other transactions in the sustainment area to develop replacement components, parts, and materials for legacy systems. So, the combination of the various legal authorities to perform other transactions can be put together in a way that creates a complete alternative to the far DoD acquisition system, under FAR 5000, DoD instructions 5000.2.
So, I suppose you could look at them either way. You could take the limited view of “oh it’s just a tool, I can use an OT instead of a procurement contract or a cooperative agreement under the appropriate circumstances.” But if you have a broader vision, you would say “No, I don’t have to do business under what the Packard Commission called the “cost too much takes too long system.” There’s another system out there that allows me to create multi-party arrangements, it allows me to have defense contractors partnering with commercial companies, it allows the government to structure transactions in ways that are quite different than a normal procurement contract and then most fundamentally it allows us to view the process of moving from deficit, to understanding potential solutions to a deficit all the way to capability.”
Today, we have a system that’s broken. Today, we have people doing science and technology work that are disconnected from the acquisition system that develops capabilities that are going to be fielded. We have a system of creating requirements that are separate from either the Science and Technology regime or it precedes the acquisition system. In fact, Federal Acquisition regulation FAR 2.101 says that the acquisition system doesn’t even begin until agency needs are known and requirements defined. With other transactions, we don’t have to fit within that paradigm. We can start with “What problem am I trying to solve?” “How does Science and Technology inform my understanding of the problem I’m trying to solve?” and “What are the solution sets that are available to solve that problem?” and that’s the beginning of the thinking that goes into other transactions. That thinking, by the way, is best done by a team not by someone who’s a specialist in requirements. Someone who’s a specialist in S&T, someone who knows systems contracting. Bring together the best and brightest. Bring in the lawyers, the financial managers, the program managers, maybe the testers and up front to try to get a grip on the problem and the solution set; and don’t do this merely as a government exercise but also reach out to industry it and find out how they can contribute to understanding solution sets to the government’s problems. In that sense, you can use other transactions in a way that’s fundamentally different than the traditional system, which is broken up into these segments that often don’t talk to each other and don’t understand needs in the same way.
CD: So, other transactions are non-far based and they almost inherently want to increase and encourage collaboration among partners and performers: the government, possibly academia, industry, and other subject matter experts.
RD: Whoever, whatever player makes sense to contribute to the program. Yes, you can bring in a diverse cast! In fact, the original 2371 authority had a litany of who you could do business with and it started, the first words were “any person” and then there was a litany of companies, and state and local governments, and academia and the last words were “and any other entity.” So, the idea that you don’t just do business with an existing stable of potential performers, but you go out and you reach out to whoever can help contribute to solving problems and fielding new capabilities that are needed by our fighting forces, by the fleet, the force, you know it’s an open field and you’re not restricted to who you do business with. By the way, that language is not in the current version of 10.USC.2371, but if you go back and trace the legislative history, the amendment that dropped it out was not intended to change the fact that you could do business with all those different types of entities.
CD: If you are curious about other transactions and what they can do for you and your team please visit our website: strategicinstitute.org.