The recent award of the Space and Missile Systems Center’s second Space Enterprise Consortium (SpEC) agreement is driving a lot of buzz in the acquisition world, both because of its large ceiling — $12 billion — and because it utilized a unique contracting authority called other transaction authorities (OTs or OTAs). Personally, OTs seemed strange and intimidating, until I accepted the opportunity to lead the largest OT in the U.S. Space Force. SpEC OT is in its fourth year and continues to grow prototyping capability, enabled by this versatile nontraditional approach to acquisitions.
SpEC started in 2017 as a trial idea to expand the space industrial base and accelerate prototyping. Today, nearly 500 companies participate in the consortium, three quarters of which qualify as nontraditional suppliers, including small businesses, research labs and academic institutions that share their innovative technology directly with the government.
Will Roper, the former Air Force acquisition executive, said that the SpEC program has been one of the most successful OTAs in the Defense Department’s history. This is due in no small part to SpEC’s ability to provide government program offices with an agile and efficient means to explore both new prototype technologies, and diverse nontraditional developer options, at a fraction of the cost and time of traditional federal acquisition regulation (FAR)-based acquisitions. For single-phase projects, SpEC has been known to award in less than 90 days after posting a solicitation and deliver a prototype in a fraction of the time of traditional FAR-based contracts.
While the government has at its disposal a variety of contracting tools, OTs offer some unique advantages that have driven a significant increase in the use of this particular instrument across the DoD. These advantages include the ability to craft incredibly flexible arrangements between the government and industry, while removing challenges that typically bar entry into government contracts such as intellectual property rights, cash flow issues and compliance with government cost accounting standards.
The flexibility of these agreements can offer substantial schedule savings over traditional FAR-based contracting and allow the Defense Department to explore a greater variety of promising concepts for a moderate investment before it fully commits. This is where the phrase “fail fast” comes in — if the government team determines early in development that the technology or prototype is unsuitable, the OT gives them ability to easily end work on that effort, thereby minimizing sunk cost and allowing a pivot to a new concept.
Doing business with the government is hard, but a properly structured consortium model can help alleviate some of the difficulties associated with government contracts. With the help of SpEC’s consortium manager, a small government team can fuel a growing community of space technology vendors by providing access to experts in government acquisitions, tailored partnership opportunities with other vendors, industry engagement sessions and seminars directly with government requirement owners.
SpEC government program managers, requirement holders and contracting officers perform all inherently governmental tasks while the consortium management firm performs a series of other roles. They processes payments, allowing a single point of contact for companies in the consortium to process DFAS transactions. They create an online forum, bringing government and industry together, to post solicitations, to team and to network — all the more crucial as telework continues. In addition to this proactive modern engagement, for very new entrants the management firm conducts training sessions to learn about the proposal process, security requirements, invoicing and any other unique project requirements. Finally, the management firm is the Space Force’s relentless talent scout, turning over every rock from Austin to Boston, peeking in university labs and the garages of entrepreneurs across the nation in search of the next big breakthrough. This increases the space industrial base, and OTs capitalize on the best the commercial industry has to offer.
Col. Heather Bogstie is a senior materiel leader of rapid development for innovation and prototyping at the U.S. Space Force’s Space and Missile Systems Center.
The views expressed are the authors’ own and do not necessarily reflect those of the U.S. Air Force, DoD or U.S. government. The author would like to thank Lt. Col. Alonso Segura and Maj. Adam Burnetta for their inputs.
