The Other Transactions & Partnership Intermediary Connection

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Partnership intermediaries (PI) are an underutilized technique available to Federal agencies to make effective use of their Other Transactions (OT) authority. A PI can be used for outreach activities, screening potential technology contributors, and supporting the evaluation of technical proposals, among other things.

What is a partnership intermediary? A partnership intermediary and a Partnership Intermediary Agreement (PIA) are described in chapter 63, title 15 U.S. Code specifically 15 U.S.C. 3715. A PI is a state agency, or a non-profit organization chartered by a state that “assists, counsels, advises, evaluates, or otherwise cooperates” with business or academia “that need or can make use of technology related assistance from a Federal laboratory.” That assistance can be funding research or prototype projects. For purposes of the statute (15 U.S.C 3703) a Federal laboratory is “any  laboratory…owned, leased, or otherwise used by a Federal agency and funded by the Federal Government, whether operated by the Government or a contractor.” Some Federal agencies have created virtual laboratories or merely designated a particular facility a laboratory to meet the “any laboratory” standard.

The primary focus of a PIA is to facilitate collaboration between small businesses, academia, and the federal government for their mutual benefit. That can include a PI’s outreach activities for surveying all potential sources of technology of interest to a government agency. If needed for assisting in screening and evaluation, the PI can hire or contract with subject matter experts on a rapid basis to gain the expertise needed to assess state of the art proposals.

A PIA can be entered into through a contract or memorandum of understanding. The agency’s contracting office and a warranted contracting officer may, but need not, be involved. PIA funding can come from general operating funds or technology transfer funding.

What is the OT – PIA connection?  The marriage of OTs and a PI seems natural. PI’s work to establish a network of companies and academic institutions that have expertise relevant to the government organization they support. Their outreach can be tailored to a specific project and go beyond techniques common in government procurement. Their network may include companies that do not traditionally do business with the government, or that reject government business via a procurement contract due to the associated non-value added overhead and regulations that are unfriendly to commercial companies. They can provide the means to connect with companies that have technologies with dual-use potential, or which could partner with traditional government contractors.

PI outreach can be incorporated into a government competitive procedure (cf. 10 U.S.C 4022 (b)) or can aid in the establishment of multi-party or consortia agreements, when a coalition of diverse organizations is needed on a project. An OT agreement can facilitate both types of relationships. OTs can be executed with competitive procedures when that makes sense, as it often does. The resulting agreement can be friendly to commercial companies and not burdened with terms and conditions mandatory with procurement contracts. Multi-party agreements can be structured in flexible ways. These may include vertical, horizontal, or hybrid relationships. Multi-party OT agreements can include multiple signatories, rather than establishing a prime-subcontractor relationship.

Has this worked? Yes. Strategic Institute suggested this approach to the Acquisition Agility Office of U.S. Special Operations Command (SOCOM). SOCOM designated its PI (SOFWERX) to participate in the solicitation and award of OT agreements. Strategic Institute supported this effort by providing education and training to SOCOM and SOFWERX personnel and consulting during the subsequent pitch days, when presentations leading to award decisions were made. The pitch days took place at SOFWERX off-base location to facilitate the entry and accommodation of participants. The key is to keep any process used simple, open, and understandable.

Conclusion. OTs, if understood, can liberate the mind and promote thinking about entirely new ways of doing federal business.  Unfortunately, practitioners have seen one example of the use of OTs, conclude that they know what OTs are and how to use them. These blinders obscure solutions readily available.  There is a serious need for education and general support for flexible contracting for the purposes of delivering innovation and R&D.  For the Department of Defense, this lack of education ignores a congressional mandate (10 U.S.C 4021 (g)).  What is clear is the usefulness of existing statutes is being lost, as are many potentially fruitful opportunities.  The need is known, solutions are available and immediately actionable… what is everyone waiting for?


written by Richard L. Dunn


Related: Partnership Intermediary statute 15 USC 3715