How to Launch an OT
These flexible contracting pathways can rapidly engage companies that haven't traditionally worked with the Federal government
Welcome to our third newsletter sharing best practices for driving innovative capabilities into the hands of real users. At BMNT, we are obsessed with outcomes, so we hope this newsletter will help you get things done inside large government organizations today, instead of waiting for the policy changes of tomorrow.
This week is about how a program manager can launch a successful Other Transactions (OT) capability. The Reagan Institute recently released the first National Security Innovation Base Report Card, calling for expanded use of OTs, especially for follow-on production contracts to field a capability at sufficient scale to matter.
OTs are flexible contracting pathways for the Federal government. They are commonly thought of as the best way for the government to engage startups and/or rapidly prove something in a customer environment.
For example, we helped the Defense Logistics Agency design and build an OT program whose average time to award is only 2.5 months, at least 2-3 faster than the norm. This program was used to produce the first Department of Defense (DOD) N95 respirator for COVID-19 response and to develop a rapid acquisition program that uses advanced manufacturing to solve the DOD’s worst parts backorders.
If you’re a program manager working in the DOD or one of the military departments, you can take a page from our approach. Here are three tips you should know:
Know your audience
Use a template, not a white paper
Prioritize buy-in for the process, not the projects
Let’s dive in!
Avoid common mistakes
To build an OT program, you first need to make sure you don’t make a few of the most common mistakes:
Replacing the “red tape” of the Federal Acquisition Regulations with similarly cumbersome procedures. This will make your life harder, not easier. After all, OTs are supposed to be an alternative to the norm.
Developing an onerous application. This will make life harder for industry.
Skipping meaningful market research. Without the right kind of market intelligence, you’ll get misaligned responses from industry.
So, here’s what to do:
Know your audience
The primary reason to use an OT is to rapidly engage companies that have not traditionally worked with the Federal government. Your process should be easy to understand, so you’ll need to translate a government dialect to make your OT solicitation practical and actionable.
For example, in co-creating an OT solicitation with DLA on advanced manufacturing (AM), we learned by talking with industry experts how geometric search solutions – including the ability to use photos, sketches, and multiple file types – were critical to future success. Valuable insights like this shaped the OT solicitation so DLA got exactly what they were looking for.
Knowing your audience also means setting expectations appropriately. Be sure to explain your evaluation criteria (to award an initial contract) and your success criteria (to award a follow-on) right up front so it’s crystal clear. In the AM example above, the first phase of the OT process was an opportunity for DLA – in partnership with the leading AM programs for the Army, Navy, and Marines – to determine the most viable and impactful solutions to test in a second phase based on geometric search capabilities, integration with an existing tool for consolidating DOD technical data packages, and hardware-software compatibility.
Use a template, not white papers
Starting with a templatized application, instead of variable white paper submissions, will help you to organize responses and keep them focused on your evaluation criteria.
A template is easier for industry to fill out, and the inputs are easier for you to review. A template produces better responses and is more transparent because it’s clear what you’re specifically asking for. For example, a good template should include:
How the proposed work relates specifically to the problem statement underlying the solicitation (alignment to government needs)
Whether the effort is a demonstration of commercially ready and feasible technology, or if development for potential defense application is required (potentially more risk and time)
A company overview that explains small business qualifications and relevant relationships with subcontractors and other key partners (could be a head start on the adoption readiness level of demonstrated capabilities)
Whether the company requires any government support in the form of facilities, equipment, data, and information or materials (clarify the resources needed)
Approve the process, not projects
Get your legal department to sign off on your process, and only require additional reviews if you deviate from it – for example, crossing a funding threshold. They don’t want extra work and neither do you, so get all the necessary buy-in and support for your process before you start running projects through it.
You should also use flexible payment milestones because each project is designed to prove different hypotheses about future success. For example, instead of payments at predictable time-based intervals, create crystal clear performance milestones – so if the company is willing and able to move faster, they get paid for outputs (mission achievements) rather than inputs (time).
That’s it!
Thanks for reading.
Reply to let us know what you found most helpful this week. We’d love to hear from you!
See you next month.
Brian Miller, VP @ BMNT
P.S. Go Deeper
For more ways to rise above the status quo:
BMNT blog: Superheroes Not Uniquely Required In The Innovation Ecosystem
The Defence Series podcast: The Defence Series - An Interview with Ali Hawks, CEO of BMNT UK
Richmond Times-Dispatch: Rep. Rob Wittman, Vice Chair of House Armed Services Committee, touts Hacking4Defense program
Defense One: How a Problem-Solving Course Could Help Rebuild Trust in the US Military
DAU News: Innovate to Win at SXSW