This summer will be three years since the massive breach of the personal data of federal employees and retirees at the Office of Personnel Management, and the status of the new technology and processes for federal background investigations is unknown.
What we do know is the Defense Information Systems Agency issued a request for information in September explaining its goal of reaching initial operating capability by September 2018 and full operational capability by September 2019.
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But since that RFI, the actual work went into the blackhole of contracting known from here on out as Other Transaction Authority (OTA).
DISA decided to use an OTA to buy an “innovative” case management solution to vet individual’s trustworthiness and ensure they remain trustworthy during the person’s relationship with the government for the new National Background Investigation Services (NBIS).
After the OPM breach, the Obama administration decided that the Defense Department would oversee the IT modernization effort. Since then, Congress mandated DoD take back the process to investigate its employees and contractors.
But since all agencies will use the new NBIS technology, DISA continues to lead the modernization effort. To get there, DISA used the U.S. Army’s Armament Research, Development, and Engineering Center’s (ARDEC) Consortium for Command, Control and Communications in Cyberspace (C5) to run the OTA through.
“We’ve received whitepapers and they are being analyzed as we speak,” said Tony Montemarano, DISA’s executive deputy director at a recent AFCEA DC event. “It will only have that as a contract action. The rest of it will be existing contracts. We are exploiting the current capabilities Defense Manpower Data Center (DMDC) has deployed. It’s not a major new development.”
Montemarano said DISA realized as it was planning the new NBIS that many of the technology capabilities it needed existed inside the DoD infrastructure.
“We are in the downselect mode as we speak,” he said. “We are looking at operational releases starting in late spring or early summer that will provide meaningful capabilities.”
DISA and whichever contractor or team of contractors eventually wins the OTA prototype competition will be under additional pressure as the Government Accountability Office recently added security clearances to its High-Risk List.
“Our objective for the High-Risk List is to bring attention to policymakers of the need for action sooner, rather than later,” Comptroller General Gene Dodaro said in a statement back in January. “Renewed and strong top leadership commitment will be critical to facilitate progress in reducing the backlog and completing key improvements to the personnel security clearance process.”
The real issue here isn’t so much the one contract or the fact that NBIS remains nine months from IOC despite the OPM breach reaching the three-year anniversary.
The bigger problem is the use of the OTA for these services. Other Transactional Authority is becoming quite popular within DoD and now it’s quickly moving into the civilian market.
OTAs are an approach to acquisition outside the normal requirements of the Federal Acquisition Regulations (FAR). The goal is to find innovative companies who may not normally do business with the government and use a more “commercial-like” acquisition process to reach them.
OTAs are supposed to be for prototypes and similar research and development work. Contracts and awards cannot be protested to GAO or the Court of Federal Claims.
Vendors create groups or consortia to bid on OTAs. The consortia requires memberships so there is a fee and an application process to join.
Take the C5 consortia “bidding” on the NBIS case management system, there are more than 500 companies, including every major vendor from Amazon to VMWare to Accenture to Esri and many small ones in between.
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So much for the need to attract non-traditional companies?
Along with DoD, the Federal Aviation Administration, the National Institutes of Health, NASA and several other agencies are dipping their toes into the OTA pool.
Congress gave DoD the ability to use OTAs in 1994, but in 2016 lawmakers expanded the Pentagon’s authority to quickly move into follow-on production transactions without the need to go through a traditional contracting action.
So to sum up, OTAs are outside the FAR process, cannot be protested and DoD can do follow-on actions with little or no oversight or public transparency. What’s wrong with this picture?
Bloomberg Government looked at spending data around the use of OTAs and found spending across government through this process more than doubled in the past five years, to $2.3 billion in fiscal 2017 from $1 billion in 2012. Bloomberg found DoD’s use of OTAs grew from $695 million to $2.1 billion between 2015 and 2017 — and after Congress made the change to the law letting the military quickly move from prototype to production.
In fact, DoD recently awarded a contract for cloud support services that has a ceiling of $950 million through an OTA.
Bloomberg says the three vendors who have won the most work through OTAs are Analytic Services Inc. (ANSER), Boeing, and Space Exploration Technologies Corp. (SpaceX). But ANSER has won three times more than the second ranked contractor over the last five years.
“That’s because ANSER manages 10 consortia. Consortia are business focused contracts where the winner manages the administrative requirements that come with OTAs, including ensuring that nontraditional defense contractors, small-business participants, and nongovernmental funds are included in each contract,” Bloomberg Government reports.
OTAs are becoming so popular that Bloomberg found 19 consortia that already exist or are under development.
Montemarano said DISA likes the flexibility and timeliness of the OTA versus the using the FAR process, which is much more rigid.
“Our processes in the past were somewhat restrictive and what has happened, and forgive me for this comment, but the fact is with the wonderful world of protesting, everybody is dotting every ‘i’ and crossing every ‘t’ so it makes the process much more rigid,” he said. “The people that are actually running the process are very, very careful about what they are doing. With OTAs, we are still careful but there is more flexibility and not so much rigidity, and it is not protestable.”
And while few will argue with Montemarano’s candid observation of the federal procurement system, the answer to that challenge many in DoD and now civilian agencies are receiving from Congress is to go around, and not fix the acquisition process.
OTAs are a tool that have been around for a long time and is valuable. But now with the growth of their popularity, is the time for the acquisition community, maybe even the Office of Federal Procurement Policy — once an administrator is in place — to consider issuing guidance before we have one of those “$750 toilet seats” or $500 hammer” incidents.