DoD’s AI center setting itself up to be a more agile buyer, use of OTAs

The Pentagon’s entity for injecting artificial intelligence into the military is considering adopting a new acquisition model that has been championed by the Defense Department for its speed over the past few years, but also concerns government watchdogs for its lack of accountability.

The Joint Artificial Intelligence Center (JAIC) may use a consortium of companies and academic institutions to procure technologies and services needed to make AI a ubiquitous force within the military. The model pays a consortium manager to oversee a group of companies that pay a small fee to be part of the club.

The advantage of the consortium is it allows JAIC to exercise other transaction authority (OTA), a contracting method that has gained considerable steam since Congress expanded its use for the military. OTAs let DoD skip federal acquisition regulations to research, tests, prototype and even produce weapons at a faster speed. OTAs also put an emphasis on partnering with companies that DoD does not usually do business with.

“Up to now, JAIC has primarily worked through traditional defense contractors and traditional Federal Acquisition Regulation-based contracts,” Chris Cornillie, federal market analyst at Bloomberg Government, told Federal News Network. “Given some of the challenges that it’s facing with COVID, and the need to start to scale its production to the Pentagon’s requirements, it’s considering a change in its business model.”

Advertisement

Cornillie said the model offers flexibility for JAIC to move faster and pair with companies that may not be partnered with DoD already.

“JAIC would be an excellent candidate for this type of research given that AI is a cutting edge field and given its centrality to the Defense Department’s National Security Strategy,” Cornillie said. “There’s perhaps an opportunity to strike a balance. I don’t think that these traditional defense contractors are going to be totally sidelined. Given that there have already been contracts awarded to them, and that a lot of these traditional contractors play a key role within consortia as well. Certainly, going with the consortium model enables JAIC to work faster and more flexible more flexibly than they might have using just traditional DoD contracts.”

The request for information published on Aug. 28 states JAIC wants to “provide maximum targeted outreach to build a collaborative AI ecosystem.” That ecosystem will include “expanded access to a spectrum of AI leaders.” The organization is hosting an AI symposium next week, which may offer more details.

JAIC currently does not have OTA authorization, but hopes to get it by the end of the year. It wants to pair with an existing consortium, but did not rule out creating its own.

Bernice Glenn, a senior consultant at C5BDI — a strategic planning, management and business development consulting firm that works with OTAs and consortia — said moving to a new model is a starting point to ensure JAIC’s success.

However, there are concerns around OTAs. Since they do not follow federal guidelines, the oversight and transparency that is usually present is not required. DoD has ramped up its use of OTAs by billions of dollars, raising concerns from groups like the Project on Government Oversight (POGO).

“Speeding up the contracting process and bringing in cutting-edge technologies is essential to better buying, but it cannot come at the expense of taxpayers’ protections just because contractors find them burdensome,” Scott Amey, general counsel at POGO wrote in 2019. “While luring in nontraditional vendors may be a laudable goal, it is essential we protect sensitive technologies that are being created and prevent them from being shared with foreign governments or on the commercial market, which could fall into the hands of adversaries.”

DoD is putting considerable stock in JAIC and AI in general. It put $4 billion into AI and machine learning research and development for 2020.

JAIC recently awarded a $106 million contract for a Joint Common Foundation, which DoD hopes will be the building block for AI in the military.

“JCF will provide an AI development environment to test, validate, and field AI capabilities at scale across the Department of Defense,” JAIC spokesman Navy Lt. Cmdr. Arlo Abrahamson said last month. “The impact of the JCF will come from enterprise‐wide access to AI tools and data for AI developers across the department and its partners that will help synchronize AI projects, reduce development redundancy, and enable the broad deployment of AI-enabled solutions to the tactical edge where front line operators can benefit from these capabilities.”