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SOFWERX, AFWERX, DEFENSEWERX. Seems like there's a new WERX sprouting up every week! what do they do and does it work?
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- The Innovation EcosystemThis article originally appeared in Government Executive on Sept. 11, 2019 By Anne Laurent It’s still too hard for emerging companies and the agencies looking for them to find each other. I recently met a vice president from a hot artificial intelligence startup that found its way into a deal with a U.S. intelligence community agency. The company’s product uses AI to enable the rapid identification of elements on video, so you can imagine why the IC agency was interested. But the story the young executive told me about how this vital capability eventually got into the hands of the IC should give us pause. Like so many startups with great new capabilities and not much experience selling to government, the AI company was increasingly frustrated at its inability to break in at the IC agency. The staff either didn’t know about or was unable to tap the vaunted and rapidly expanding ecosystem of government innovation brokerages created by the Pentagon, IC and civilian agencies. These innovation hubs came into existence precisely to ease the way into the government market for nontraditional suppliers with bleeding-edge products and services. Instead, the AI firm’s VP took an old-fashioned, circuitous route. He went to an alumni event at his college hoping to snag a few minutes with an IC leader who was speaking to the group. He polished his elevator speech, jammed business cards in his pocket and muscled his way into the line of alumni awaiting a word with the speaker after the speech. And he scored. The IC leader connected him with an internal innovator at the agency. That fellow sent the startup guy to the agency's Silicon Valley tech scouting organization. Folks there helped the company break into the target agency, and finally, the firm hit pay dirt. Potholes and Detours Though it ended well for this small firm, the story points up potholes and detours in government efforts to pave a superhighway for innovators directly into the government market. In predictable bureaucratic fashion, would-be federal innovator sherpas have inadvertently become a convoluted, siloed maze. The new buying methods these brokers employ truly are easier and faster and designed to attract firms that heretofore eschewed government’s rule-laden, slow, intellectual-property-endangering, and expensive procurement process. Congress has provided remarkable new authority for the Defense Department and other agencies to waive procurement rules, test before buying, and get innovation fielded quickly. National security agencies are bristling with tech scouting organizations attempting to broker connections between the makers of edgy technology and a government badly in need of an edge on near-peer U.S. adversaries who are catching up with and even exceeding our capabilities. Yet, the startups, emerging tech companies, inventors and other nontraditional government suppliers for whom the new authorities and brokerages were created now must navigate a labyrinth. The welter of types, shapes and approaches is becoming nearly as daunting as the Federal Acquisition Regulation-laden, slow-twitch system that tech trailblazers rejected in the first place. I know how overwhelming the ecosystem appears to outsiders because to understand it, I’ve begun mapping it. I am identifying government innovation brokers and the sponsors that fund them and charting the interest areas for which they seek innovators. So far, I’ve found 25 currently active other transaction (OT) authority consortia, 16 Partnership Intermediary Agreement (PIA) organizations, and nearly 100 government innovation support agencies, ranging from the Marine Corps Rapid Capabilities Office to the Army Applications Laboratory to the National Geospatial Information Agency’s GEOworks, with many in between. All of them are in one way or another reaching out to the commercial market in search of innovators and innovations, often to address the same problems. For example, searching my map for the interest area “artificial intelligence,” brings up nearly 20 widely differing organizations. Among them are: • Other transaction authority consortia • An office devoted to running prize challenges • A federally funded research and development center • A website communicating IC needs to innovators • Technology scouting outposts • Several Defense Department research and rapid response procurement officesSmall business innovation and research (SBIR) programs • An office that evaluates, tests and develops emerging technology for federal agencies • A university-affiliated research center Searching “cyber” calls up another 20 organizations, while “sensor” and “unmanned” each net almost as many. Each type of broker operates differently and serves different programs within the military services and defense and civilian agencies. So, for innovators from outside the government market, and even for some within, it's tough to divine what each variety of brokerage seeks on whose behalf, how they work, and how to interact with them. This isn’t to say no overlap should exist among innovation hubs or that a single office should be put in place to dictate innovation swim lanes or cap participants in the ecosystem, as the Congressional Research Service appears to favor for Defense. Innovation is messy and relies on unpredictable, serendipitous collisions among ideas, inventors, practitioners, and experts. Sometimes, utterly unexpected folks make conjectures about combining unconnected innovations that result in unimagined new capabilities. Nonetheless, millions are being spent. Hundreds, if not thousands, of people are employed. Dozens of new organizations have sprung up, joining dozens more already in existence. All of it to make sure that every startup with a great product that might have a national security application gets hooked up with government. Yet many still remain undiscovered or too overwhelmed to bite. Certainly, there is outreach. Some brokers hold design sprints and meetups at conferences and events. Some scour LinkedIn and other social media and websites and conferences where product and service pioneers congregate. Others tail venture capitalists or run hackathons, demo days, prize competitions and the like to draw in makers, tinkerers and masterminds. But getting to and into events costs time and money that lean young companies often don't have. And hearing about them still is more by happenstance than design. Each OTA consortium charges a fee for membership, and most only show paid members the solicitations their sponsors issue. So, if the best solver hasn’t paid up to join, the best solution goes wanting. No 411 for Government, Either Just as there's not a directory where emerging companies can look up matching government innovation hubs, there’s no 411 for government to find them all either. This means not only that innovators who want into the ecosystem struggle, but defense and civilian agencies also are in the dark about each other’s innovation brokers. A promising prototype funded by one broker’s sponsor might, with a tweak or two, be perfect for another’s. But because neither knows the other exists, the opportunity for collaboration and savings is lost. Many within the ecosystem believe innovation effervescence will subside and consolidation will reduce the size and complexity of the broker playing field. But with 2019 Defense OTA spending already exceeding last year’s record and set to nearly double to more than $7 billion this year, the froth doesn’t appear to be evaporating yet. More than half of last year’s OTA spending went through consortia, and a new one, the Naval Aviation Systems Consortium, was born this summer. In addition, a Blue Force Tracking Consortium is due soon from the Army Futures Command’s C5ISR Center. PIAs, incubators, accelerators, pitch days, and rapid capabilities organizations continue sprouting as well. The challenge now is to get a handle on the innovation ecosystem without throttling it. That requires making it easier for innovators and innovation brokers to find one another and ensuring that government programs know about each other’s innovation support organizations and their activities so collaboration and piggybacking become common. As the solution emerges, I’ll continue mapping—highlighting the highways, byways, scenic routes and can’t-miss attractions across the network. Watch this space!Like
- Far Outside FAR: CSOsThis article published in Government Executive March 7, 2019 Streamlined solicitations for innovative commercial products and services, known as commercial solutions openings are beginning to take off in the Defense Department. Even the General Services Administration’s CSO service, which is open to all agencies for a fee, so far has been dominated by Defense users. CSOs aren’t as well known or broadly used as their procurement-innovation cousin, other transaction authority, which gives agencies the ability to strike contracts outside the Federal Acquisition Regulation for research, prototypes and production to obtain technology from nontraditional defense contractors. Eleven agencies including Defense have OT authority. GSA’s CSO holds the potential to bring civilian agencies, most of which don’t have OT authority, the ability to reach out to and select suppliers unencumbered by the Federal Acquisition Regulation. So far, civilian agencies haven’t been biting, but Pentagon organizations are, even though they have their own CSO provider. The very first GSA CSO customer was none other than the Defense Innovation Unit, a once-experimental buying organization that invented CSOs. Originally designed to lure emerging companies to work for the Pentagon by easing the pain of federal procurement processes, the Defense Innovation Unit Experimental, or DIUx, lost the X last summer, when it was designated a permanent outpost for testing defense buying boundaries. The Defense Innovation Unit uses CSOs for all of its deals on behalf of department programs in order to strike OT agreements to buy technology prototypes to improve military mission effectiveness. Lacking OT authority, GSA uses CSOs on its own or others’ behalf to ease the way for FAR-based contracts for new commercial items, new adaptations of existing commercial products or items in the “production/commercialization phase but not yet in broad use in government.” In the 2017 National Defense Authorization Act, legislators created a pilot program allowing the Defense and Homeland Security departments and GSA to test CSOs through 2022. GSA and Homeland Security CSO contracts are limited to $10 million, while the Pentagon’s limit is $100 million. The OT agreements the Defense Innovation Unit strikes for its customers permit a direct, sole-source award of a follow-on full-production contract to a successful prototype award winner. But even prototypes not slated immediately for follow-on production have utility. So DIU is creating an e-commerce portal for those not immediately picked up. To find a portal-builder, in 2018, DIU became GSA’s first CSO customer and engaged Apttus, maker of business-to-business e-commerce portals. The Air Force edged out DIU in taking a GSA CSO all the way to award. Thus was born the Air Force Accelerator Powered by Techstars, which opened in January 2018. The accelerator, based in Boston, focuses on early-stage startups making technology with both commercial and government applications. Examples include anti-collision radar for drones from OmniPreSense and anti-counterfeiting laser-activated ink to secure aviation parts from SecureMarking, both among the 10 companies in the first accelerator class. Original accelerator sponsor AFWERX, an Air Force technology incubator, has been joined by BAE Systems FAST Labs, the Air Force Research Laboratory, Air Education and Training Command and the MD5 Defense technology accelerator in supporting the 2019 class of 10 startups, including one that makes drones that can be thrown and bounce off floors and walls, and another that identifies and reports hostile drone swarms. In January, AFWERX teamed with AFRL and Space and Missile Systems Center on another CSO for a development and operations platform, where the Joint Force Space Command operations center can develop software, integrate data, perform machine learning activities and more. Meanwhile, other Defense programs also are striking out on their own in using CSO authority. This March 29 through April 11, Space and Naval Warfare Systems will conduct the 21st Century Combined Arms Advanced Naval Technology Exercise (ANTX) West. Sailors and Marines will help test more than 96 technology prototypes in information warfare, strike capability, and counter intelligence, surveillance, reconnaissance and targeting. The ANTX will constitute the live demonstration of solutions solicited under a CSO issued in August. A second ANTX, is slated for April to test technologies for command and control, force protection, tactical diction within littorals, operational distribution to the littoral, cross-domain mobility, signature management and deception, logistical support, and medical applications. The two exercises are part of the Fight the Naval Force Forward campaign exploring amphibious and sea multi-domain operations combining cyber, space and electromagnetic spectrum operations on land and at sea. Renovating After Protest Loss In November, the Defense Innovation Unit issued its second overarching five-year CSO, setting revised procedures for soliciting solutions in an array of areas of interest, including autonomy, artificial intelligence, human systems, information technology and space. DIU altered the new CSO to prominently address concerns raised by an adverse May 2018 Government Accountability Office bid protest ruling on a DIU-run CSO-OTA. GAO ruled against the Army on an Oracle America protest of a nearly $1 billion OT production agreement for cloud migration and operation services. GAO found that the service failed to apprise bidders on the original CSO solicitation that the winner could receive a sole source, noncompetitive follow-on production award. GAO also ruled that the production work was awarded before the initial prototype had been judged to be successful. DIU’s new CSO has a section spelling out follow-on production notice requirements—CSO areas of interest and prototype OT agreements will explicitly identify that a follow-on production award is a potential outcome of successful prototyping. Another section defines what successful prototype completion looks like—the project met the technical requirements, satisfied success metrics in the OT agreement, or had a “particularly favorable or unexpected result that justifies the transition to production.” Successful completion can occur prior to the conclusion of a prototype project so any aspect with utility can move into production even as other aspects remain to be finished. The new CSO also amps up the section on in-person or virtual solution pitches that may follow five-page or 15-slide solution briefs. Solution briefs and pitches will be evaluated for technical merit and uniqueness and innovation against the area of interest they address, as well as viability, both of the company and its proposal. The Defense Innovation Unit’s CSO renovations aren’t directly applicable to GSA’s version because DIU has OT authority and GSA doesn’t, said Chris Hamm, director of the Federal Systems Integration Management Center, which runs the program for GSA. Nonetheless, GSA can provide extra contracting expertise DOD organizations need. Hamm points out that freedom from FAR-imposed terms and conditions can make CSOs more difficult to conduct than standard solicitations and awards because there is so much more open to negotiation. Shutterstock.com Anne Laurent, former executive editor of Government Executive magazine, runs The Agile Mind Thought Leadership Consulting and The Acquisition Innovators Hub, a procurement innovation intelligence collector.
- Far Outside FAR: CSOsImage by Burhan Khawaja Pixabay
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