DoD Funding Beyond SBIR: BAAs, CSOs and Other Transactions

Beyond SBIR and STTR, the Department of War buys research and prototypes from companies through three instruments: Broad Agency Announcements for research, Commercial Solutions Openings for innovative commercial solutions, and Other Transaction agreements for prototype projects. Each starts with a short document, a white paper or a solution brief, and only invited companies write a full proposal. I write the white paper, the brief and the proposal, and defense programs are among those behind the more than $11.7M secured for clients.

Who this fits and who it does not

The calls state their own eligibility, and most are wider than SBIR. The Office of Naval Research long range announcement says that all responsible sources from academia, industry and the research community worldwide may submit proposals and that all businesses, both small and large, are encouraged to submit. The Army Space and Missile Defense Command announcement lists institutions of higher education, nonprofit organizations, state and local governments and for-profit organizations, large and small. The Defense Innovation Unit says any individual or commercial entity is eligible to respond to its solicitations, and its current projects state that they are open to US and international vendors. The Special Operations Command solutions opening says foreign owned businesses may submit alone or through a teaming arrangement, subject to export clearances.

• It fits a company of any size with a technology that answers a published research topic or area of interest, and the registrations in SAM.gov done before the first submission.

• It fits a company that does not qualify for SBIR: size and ownership are not entry conditions here, and a nontraditional defense contractor, which the statute ties to not having performed a contract subject to full cost accounting standards coverage in the prior year and which includes small businesses, is exactly what the prototype authority favors.

• It does not fit a company that wants a defined requirement and a price list; these instruments ask the company to propose the work.

• Consortium calls open only to members are not included.

Broad Agency Announcements

The Federal Acquisition Regulation (FAR 35.016) reserves the Broad Agency Announcement for basic and applied research and the part of development not tied to a specific system, used only when meaningful proposals with varying approaches can be expected. The announcement describes the agency's research interest, the selection criteria and the period during which proposals are accepted; proposals are evaluated through a peer or scientific review and need not be compared with each other, and the primary basis for selection is technical merit, importance to agency programs and fund availability. The current long range announcements work in two steps: the Naval Research Laboratory says prospective offerors first submit a white paper with a rough cost estimate and are invited to submit a formal proposal if there is interest; the Air Force Research Laboratory trusted systems announcement accepts only white papers as initial submissions, with formal proposals by invitation; the Army Space and Missile Defense Command returns an encouraged or not encouraged recommendation on each white paper. Awards take the form of contracts, grants, cooperative agreements or other transactions, as each announcement states.

Commercial Solutions Openings

A Commercial Solutions Opening rests on 10 U.S.C. 3458, which lets the Department acquire commercial products, commercial services or nondevelopmental items through a competitive selection of proposals from a general solicitation and a peer, technical or operational review, with the resulting contracts or agreements fixed price and the option of a follow-on production contract or transaction. The defense regulation (DFARS subpart 212.70) limits the opening to innovative solutions, defined as a technology, process, method or application that is new as of the date of submission, and sets technical merit and importance to agency programs as the primary evaluation factors with price to the extent appropriate. In practice the process is the one the Defense Innovation Unit describes: a company sends a short brief, about five pages or fifteen slides, the unit replies within a stated period if it wants a pitch, and selected companies receive a request for a prototype proposal. The Defense Logistics Agency opening adds that a strong brief can go directly to award negotiations.

Other Transaction agreements

Under 10 U.S.C. 4022, the military departments, DARPA and the Defense Innovation Unit may carry out prototype projects directly relevant to mission effectiveness or to improving platforms, systems, components or materials, using competitive procedures to the maximum extent practicable. The statute allows a prototype agreement when at least one nontraditional defense contractor or nonprofit research institution participates to a significant extent, or when all significant participants are small businesses or nontraditional defense contractors, or when at least one third of the total cost is paid from non federal sources, or on a written determination of exceptional circumstances. A competitively awarded prototype agreement may provide for a follow-on production contract or transaction to the same participants without further competition once the prototype is successfully completed. The Defense Innovation Unit states that it uses this authority to award prototype agreements in as few as 60 to 90 days.

My read

• The white paper or brief is the whole competition. It has to state the operational problem, the technical approach, the team and a rough cost in the space allowed, and it has to match a published topic or area of interest.

• The follow-on clause is the business case. A prototype agreement that names a path to production under 10 U.S.C. 4022 is worth planning for from the first brief.

• Nontraditional status is an asset, not a disadvantage. A company that has never held a cost accounting standards covered contract should say so, because it unlocks the prototype authority for the government team.

• Long range announcements run for years; the deadline that matters is the one the topic manager sets after the white paper conversation, not the close date of the announcement.

Calls open now

Frequently asked questions

Does a company need to be a small business?

No. The open announcements and openings state that large and small businesses, universities and nonprofits may submit, and some accept international vendors.

Is cost share required for an Other Transaction?

Only when the agreement relies on the one third cost share condition. With a nontraditional defense contractor participating significantly, or with all significant participants small businesses or nontraditional contractors, the statute does not require it.

How is this different from SBIR?

SBIR is limited to small businesses that meet the size and ownership rules and pays in fixed phases. These instruments are open to any responsible source, start with a white paper or brief, and set the award size by the project. A company can pursue both at once.

What does the consultant do on a BAA, CSO or OTA submission?

The white paper or solution brief, the pitch deck, the full proposal or prototype proposal with its cost volume, and the SAM.gov registration and nontraditional contractor statements the agreement needs.