DoD stands up permanent program to give vendors access to top-tier secrets

The DoD Reporter’s Notebook is a weekly summary of personnel, acquisition, technology and management stories that may have fallen below your radar during the past week, but are nonetheless important. It’s compiled and published each Monday by Federal News Network DoD reporters Jared Serbu and Scott Maucione.

DoD bringing companies into the fold for sensitive info

After a years long pilot, the Defense Department is establishing a permanent program that will let some trusted companies in on critical military information to help build needed systems.

“As the world sees a return to great power competition, DoD must strengthen its engagement with the defense industrial base in order to respond to the national security challenges facing the United States in a more responsive and cost efficient manner,” a Dec. 15 memo signed by Pentagon acquisition chief Ellen Lord states.

The memo goes on to state that, increasingly, technologies and information are squirreled away in special access programs.

Those are programs that exceed regular classified information and entail highly sensitive operations and black projects.

“The Special Access Program Corporate Portfolio Program was deliberately developed over the past several years to ensure it is a strong and sustainable program,” Pentagon spokesperson Jessica Maxwell told Federal News Network. “The pilot effort was established in 2016 and successfully carried forward into the current administration.  The director of the Department of Defense’s Special Access Program Central Office is responsible for executing this program and that position is filled by a military general officer (currently an Air Force  Major General). The DoD believes the Corporate Portfolio Program is an important effort and that it will be sustained into the future.”

DoD said the program will integrate DoD and corporate interests with the goal of increasing technology development and cost efficiency. The Pentagon hopes the program will allow the industrial base to gain more insight into what DoD needs for the purposes of independent research.

DoD says the program will also provide private sector professionals with accesses that will help them protect information better and allow companies to work better to serve their own missions.

Only certain companies will be able to participate in the program. For example, a corporation must be on contract with DoD for 15 or more special access programs to be eligible. — SM


DHA moving ahead with transition after pause and military service concerns

The Defense Health Agency said it is continuing to take over the military services’ hospitals and clinics despite concerns from the leaders of the branches.

DHA put the transition on hold in 2020 because of the COVID-19 pandemic.

“The pause in Military Health System (MHS) transition let us compile a number of lessons learned,” Barclay Butler, DHA assistant director for management, said. “We then applied those lessons learned to MHS reform. We also used the pause to improve the transition planning, and the transition products.”

DHA said those lessons included standardization of military health metrics reporting to the DoD. Previously, each military service reported that information separately to the DoD. DHA has now turned that into a collective system.

Butler said that one of the most important results of the past year was the confirmation that the DHA is progressing in the right direction with the market model. That model rearranges how family members and retirees can use treatment facilities. Some facilities would take on more of those patients, while about 200,000 others would be forced to find care in the private sector.

“The services asked the defense secretary to re-asses the approach and the secretary took that information and made a decision on the 9th of November to continue forward with our plan,” Butler said.

The leaders of the military services wrote a letter last August expressing concern that the transition may harm military health.

“The DHA end-state, as designed, introduces barriers, creates unnecessary complexity and increases inefficiencies and cost,” the military officials wrote. “Service command and control of the MTFs as military units, through our direct support, was critical to commanders’ operational response [to coronavirus] and swiftly adjusting resources across the enterprise.”

The letter asked DoD to stop the transition of MTFs, personnel and resources, and to return all MTFs to their respective services until the best course of action can be determined.

The letter also asked DoD to direct the military departments to establish a working group to provide a concept plan for what the next steps should be and what legislation might be needed.

“The proposed DHA end-state represents unsustainable growth with a disparate intermediate structure that hinders coordination of service medical responses to contingency operations, such as a pandemic,” the officials wrote. “It was the services’ legacy structures that provided the streamlined command and control and the stability required for execution of plans and deployment of medical forces.”

DHA seems to be saying that it has assessed the concerns and is still moving ahead.

Congress also wants to push forward with the plan. It is heeding the advice of the military services, however. While the transition started in 2018 and was supposed to originally only take a couple years, lawmakers pushed the deadline to 2022 out of caution.

In the 2021 National Defense Authorization Act, lawmakers pushed the movement of the service medical research arms to 2025.

“DoD must continue on the path required by law to eliminate the inefficient, stove-piped MHS structure that inevitably leads to turf wars among the services and the DHA, while simultaneously paralyzing decision-making and stifling healthcare innovation,” lawmakers wrote in the 2021 NDAA conference report. “The conferees expect that the DHA shall oversee, manage, and direct the MHS’s delivery of direct and purchased healthcare.”


DoD makes changes to how it certifies women-owned small businesses

The Pentagon will no longer let its own contracting officers make their own determinations about whether companies are eligible for set-aside contracts under the government’s women-owned small business programs, and is telling them to rely instead on a database maintained by the Small Business Administration.

A memo DoD’s office of Defense Pricing and Contracting issued on Dec. 17 tells procurement officials that sole source and set-aside contracts targeted toward women-owned small businesses can only go to firms that SBA has registered in its Dynamic Small Business Search system. The Federal Acquisition Regulation (FAR) Council is working on a change that would eventually apply similar dictates governmentwide, but the Pentagon has chosen to do it early via a class deviation.

Both the deviation and the FAR case are meant to implement changes SBA itself made last year when it made changes to how women-owned small business gain certification. They’ll no longer be able to self-certify as eligible for those awards; rather, either SBA or a recognized third-party assessor will have to verify they meet the criteria as either a women-owned small business (WOSB) or economically disadvantaged women-owned small business (EDWOSB).

In rulemaking filings last year, SBA predicted the changes will increase the share of government contracts that go to women-owned small firms – largely because agency contracting officers will now be able to consult an authoritative database, rather than doing the legwork of verifying a contractor’s eligibility themselves.

“Under the existing system, the burden of eligibility compliance is placed upon the awarding contracting officer. Contracting officers must review the documentation of the apparent successful offeror on a WOSB or EDWOSB contract. Under this rule, the burden is placed upon SBA and/or third-party certifiers,” the agency wrote in a notice in May. “This will encourage more contracting officers to set aside opportunities for WOSB program participants as the validation process will be controlled by SBA. Increased procurement awards to WOSB concerns can further close a gap of under-representation of women in industries where in the aggregate WOSB represent 12% of all sales in contrast with male-owned businesses that represent 79% of all sales.”

The changes are part of legislation Congress passed in the 2015 Defense authorization bill. It gave agencies the authority to make sole-source awards to WOSBs, while also telling SBA to take a more active role in the certification process.

Under DoD’s latest changes, women-owned firms who are on track to get a DoD contract but aren’t yet certified in SBA’s system are supposed to get a fast-track treatment: SBA has promised to process their certifications within 15 days if an award is pending, according to the DoD memo. —JS

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