Other Transactions Agreements (OTs): A Tool for Enhancing CSRE-DARPA Collaboration Crane Lopes General Counsel Defense Advanced Research Projects Agency (DARPA) https://www.darpa.mil/ January 15, 2019 Distribution Statement A 1
Bottom Line Up Front (BLUF) • OTs offer CSRE a Department of Defense (DoD) agreement type that is excluded from most federal procurement laws and regulations. OTs can be negotiated to meet the project needs of CSRE and the DoD partner • I will briefly discuss OTs to distinguish them from traditional procurement agreements: contracts, grants, and cooperative agreements • I will summarize two DARPA OT projects (space launch and synthetic biology technologies) to give you a sense of how PSU/CSRE and DARPA could use OTs to broaden our research collaboration 2 Distribution Statement A
So, what are OTs? Other transactions are legally binding instruments, other than contracts, grants, or cooperative agreements that generally are not subject to federal laws and regulations applicable to procurement contracts. These instruments are used for various purposes by federal agencies that have been granted statutory authority permitting their use. (GAO B-416061, 2018, p. 1) 3 Distribution Statement A
Purpose of OTs (DoD OT Guide, 2018, pp. 4-5) The OT authorities were created to give DoD the flexibility necessary to • adopt and incorporate business practices that reflect commercial industry standards and best practices into its award instruments . . . OTs can help: Foster new relationships and practices involving traditional and nontraditional defense contractors, especially those that may not be interested in doing FAR based contracts with the Government Broaden the industrial base available to Government Support dual-use projects Encourage flexible, quicker, and cheaper project design and execution Leverage commercial industry investment in technology development and to partner with industry to ensure DoD requirements are included in future technologies and products Collaborate in innovative arrangements Distribution Statement A 4
Where did OTs originate? In 1958, Congress created NASA under the Space Act (Pub. L. No. 85-658, 1958). The Space Act allowed NASA to “enter into other transactions as may be necessary” (Pub. L. No. 85-658, 1958, Sec. 203(a)(5)). NASA used this authority to carry out a variety of innovative contractual arrangements with the private space industry, for instance, to build and launch the first communication satellites (Dunn, 2009). NASA refers to these as Space Act agreements. 5 Distribution Statement A
11 Federal Agencies with OT Authority (https://www.law.cornell.edu/uscode/text) • Department of Defense (DoD) 10 U.S.C. 2371a/2371b • Department of Energy (DOE) 42 U.S.C. 7256(g) • DOE Advanced Research Project Agency (ARPA-E) 42 U.S.C. 16358(f) • Department of Health & Human Sciences (HHS) 42 U.S.C. 247d-7e(a)(3) • HHS National Institutes of Health (NIH) 42 U.S.C. 285-3(b)(3); 42 U.S.C. 284n(b)(1) • Department of Homeland Security (DHS) 6 U.S.C. 391(a)(1) • DHS Domestic Nuclear Detection Office (DNDO) 6 U.S.C. 596(1) • DHS Transportation Security Agency (TSA) 49 U.S.C. 114(m) • Department of Transportation (DoT) 49 U.S.C. 5312(a)(1), (b)(2) • DoT Federal Aviation Administration (FAA) 49 U.S.C. 106(1)(6) • NASA 51 U.S.C. 20113(e) Distribution Statement A 6
Number of OTs, fiscal years 2010-2014 (GAO-16-209) Federal Agency 2010 2011 2012 2013 2014 Advanced Research Projects Agency-Energy 3 3 3 3 0 (ARPA-E) DoD 69 76 88 77 79 Department of Energy (DOE) 2 3 3 3 3 Department of Health and Human Services (HHS) 0 0 0 1 1 Department of Homeland Security (DHS) 19 14 8 4 3 Department of Transportation (DOT) 75 54 30 26 21 Federal Aviation Administration (FAA) 44 48 54 60 65 Transportation Security Agency (TSA) 2,217 2,611 2,891 3,080 3,223 National Institutes of Health (NIH) 6 6 6 5 5 NASA 408 435 564 579 637 Distribution Statement A 7
DoD OT spending, fiscal years 2011-2015 (dollars in millions) (DoD DPAP, 2015) DoD Organization 2011 2012 2013 2014 2015 DARPA 69.1 33.1 25.2 38.3 57.8 DTRA 65.8 21.4 6.8 2.8 - Air Force 0.3 5.1 0.7 1.6 - Army 476.8 391.9 314 529.9 580.3 Navy - - 1.1 2.7 2.3 Distribution Statement A 8
Three Types of OTs (DoD OT Guide, 2018, p. 7) • Research OTs (10 U.S.C. 2371a) • Prototype OTs (10 U.S.C. 2371b) • Production OTs (10 U.S.C. 2371b) Distribution Statement A 9
Traditional procurement agreement versus an OT Traditional procurement agreement OT Regulated by the FAR/DFARS Not regulated by the FAR/DFARS • • Mandatory terms and conditions Few mandatory terms and • • conditions Mandatory accounting and audit • requirements No mandatory accounting and • audit requirements No cost-sharing • Cost-sharing common • Formalized payment procedure • Payment procedure negotiable • Standard IP clauses • IP rights tailored for the project • Government owns all tangible • property Property ownership negotiable • Mandatory disputes process Disputes process negotiable • • Mandatory termination process Termination process negotiable • • Distribution Statement A 10
DoD OT policies (https://aaf.dau.mil/ot-guide/info/) Distribution Statement A 11
The DoD OT guide DoD OT Guide (Dec. 3, 2018 ed.), https://aaf.dau.mil/ot-guide/ • Mostly guidance, not binding policy • But widely used by DoD and contractors to help solicit, negotiate and • administer OTs Provides useful guidance on planning, publicizing, soliciting, • evaluating and administering OTs Practice tip: review the guide before negotiating an OT with DoD • Distribution Statement A 12
DARPA overview For sixty years, DARPA has held to a singular and enduring mission: • to make pivotal investments in breakthrough technologies for national security The genesis of that mission and of DARPA itself dates to the launch • of Sputnik in 1957, and a commitment by the United States that, from that time forward, it would be the initiator and not the victim of strategic technological surprises DARPA comprises approximately 220 government employees in six • technical offices, including nearly 100 program managers, who together oversee about 250 research and development programs DARPA is located in Arlington, VA • 13 Distribution Statement A
DARPA history Distribution Statement A 14
DARPA budget and spending Annual DARPA Budget (in millions) DARPA $3.4B 34613379 3378 $3,500 31513081 279129413031298229463069 $3,000 DoD S&T NIH $13.7B $2,500 DoE $2,000 DoD Military Systems $1,500 Development NASA $43.5B $1,000 All NSF other $500 Federal R&D $0 FY 2019 R&D Budget FY FY FY FY FY FY FY FY FY FY FY19 $118B 09 10 11 12 13 14 15 16 17 18 25% 17% 92% 67% of total DoD to universities of funding to to industry S&T funding projects 15 Distribution Statement A
DARPA technical offices BIOLOGICAL DEFENSE INFORMATION MICROSYSTEMS STRATEGIC TACTICAL TECHNOLOGIES SCIENCES INNOVATION TECHNOLOGY TECHNOLOGY TECHNOLOGY OFFICE OFFICE OFFICE OFFICE OFFICE OFFICE • Frontiers in Math, • Symbiosis: Partner • Electromagnetic Biology for Security Win In Any Enterprise • Outpacing Computation & with Machines Spectrum Environment via Disruption: Infectious Disease Design Adaptive Kill Webs Platforms, Systems, • Analytics: • Tactical • Sensing and Technologies • Neurotechnology • Limits of Sensing Understand the Information that Enable New • Comms, & Sensors World Extraction Warfighting • Gene Editing & Command, Constructs • Complex Social • Cyber: Deter • Globalization Synthetic Biology Control Systems Cyber Attack Crosscutting Themes • Effects • Eliminate High- • Anticipating Value Assets Surprise • Exploit Cross- Domain Seams • Enable Decision- Making Asymmetry 16 Distribution Statement A
Example OT: Experimental Space Plane (XS-P) CRANE WILL BRING VERSION WITH VIDEO EMBEDDED (18MB) • Distribution Statement A 17
Example OTs: Living Foundries Distribution Statement A 18
CSRE and DARPA: similar missions CSRE DARPA “The Center for Security Research and “DARPA serves as the research and Education (CSRE) at Penn State development (R&D) organization in promotes research and education to DoD with a primary responsibility of protect people, infrastructure, and maintaining U.S. technological institutions from the broad range of superiority over our adversaries.” hazards confronting society today. CSRE programs enhance (DoD Directive 5134.10, understanding of security threats and https://www.esd.whs.mil/Portals/54/D their underlying causes; strategies and ocuments/DD/issuances/dodd/513401 practices for preventing these threats; p.pdf) the effects of preventative efforts on individual liberties; and the consequences if or when prevention fails.” (CSRE Mission, https://csre.psu.edu/) Distribution Statement A 19
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