Next year will mark the fourth iteration of the educational ICAP initiative, which DIU runs in partnership with the Defense Acquisition University. This fellowship is designed to provide DOD’s leading procurement professionals with hands-on experience and virtual training to help them more effectively buy in-demand commercial technologies from non-traditional military contractors. 

“We have other acquisition officers from across the department who can apply to the year-long fellowship with DIU — to learn our process, how we work with industry, and then bring that back to wherever they’re going. And [the next ICAP application] just opened today,” DIU’s Deputy Director for Commercial Operations Liz Young McNally told DefenseScoop during a panel at the Special Competitive Studies Project’s AI+ Expo.

If tapped for the fellowship, personnel will get a chance to work on a variety of real-world, military service-aligned projects alongside a DIU contracting officer, project team and commercial solution providers.

The fellows will also gain in-depth instruction on a flexible contracting mechanism designed for rapid prototyping and acquisition of commercial tech, known as other transaction (OT) authority. That mechanism, as well as DIU’s commercial solutions opening (CSO) solicitation process, helps the Pentagon operate at a pace that is closer to commercial speeds, when buying certain technologies.

Pointing to recent internal DIU stats, McNally said that for roughly 40% of the companies that win a new CSO deal each year, “this is the first time they ever worked with the DOD.”

“We’ve built all of these processes [to accelerate acquisition]. So we’re asking for a problem statement as opposed to a requirement. It’s a short response, right — like a few pages or a few slides, as opposed to something more — very rapid. And [the ICAP fellowship] is one of the processes that we have built to help not just do it ourselves, but then scale it across the department,” she noted.

Defense Secretary Pete Hegseth recently issued new guidance to inform how the Pentagon buys software capabilities. In it, he directed Pentagon officials to prioritize OT and CSO procurement options when purchasing digital assets for the military.

“[DIU is] also working very closely with [the Office of the Under Secretary of Defense for Acquisition and Sustainment] and others in the department to implement the president’s new executive order on acquisition. And programs like that fellowship are a real way that we’re going to be able to help upskill, and train, and drive the culture change required so that we bring in more commercial technology,” McNally told DefenseScoop.

Those who wish to apply for ICAP must be permanent government civilians or active component military contracting officers. Each fellow will produce a capstone project that will serve as a training plan for their home organization, based on what they learn throughout the 12-month program.

Applications will be accepted until July 31. DIU aims to notify selected candidates in September and begin the program in October.

“To ensure our warfighters maintain a decisive advantage, we need contracting professionals who are fluent in both the defense and commercial sectors, and who can help their teammates across the department to develop that same fluency. That is what the ICAP fellowship delivers, and we need to keep scaling it — and its impact — for the department’s critical needs,” DIU Director Doug Beck said in a statement.

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The department’s Software Acquisition Pathway, or SWP, was set up during the first Trump administration under then Undersecretary of Defense for Acquisition and Sustainment Ellen Lord as part of a broader push for a so-called Adaptive Acquisition Framework that enables the department to procure software differently than it buys hardware. Programs on that pathway are not subject to some of the encumbrances associated with the Joint Capabilities Integration and Development System and major defense acquisition program designations.

“Programs using the software acquisition pathway will demonstrate the viability and effectiveness of capabilities for operational use not later than 1 year after the date on which funds are first obligated to develop the new software capability. New capabilities will be delivered to operations at least annually to iteratively meet requirements, but more frequent updates and deliveries are encouraged where practical,” according to DOD Instruction 5000.87 issued in October 2020.

The instruction also requires government and contractor software teams to use modern iterative software development methods such as DevSecOps.

Now, Hegseth wants to make sure all DOD components are taking advantage of the pathway.

“Software is at the core of every weapon and supporting system we field to remain the strongest, most lethal fighting force in the world. While commercial industry has rapidly adjusted to a software-defined product reality, DoD has struggled to reframe our acquisition process from a hardware-centric to a software-centric approach. When it comes to software acquisition, we are overdue in pivoting to a performance-based outcome and, as such, it is the Warfighter who pays the price,” he wrote in a March 6 memo addressed to senior leaders, combatant commanders, and agency and field activity directors.

To address the problem, Hegseth is decreeing that all DOD components must adopt the SWP as the “preferred pathway for all software development components of business and weapon system programs.”

“This will enable us to immediately shift to a construct designed to keep pace with commercial technology advancements, leverage the entire commercial ecosystem for defense systems, rapidly deliver scaled digital capabilities, and evolve our systems faster than adversaries can adapt on the battlefield,” he wrote.

As the U.S. military pursues new AI tools — a tech pursuit which Hegseth is prioritizing as the department moves to modernize for potential fights against advanced adversaries — software is expected to become even more critical.

To get software vendors on contract faster and cut through bureaucratic red tape, the Pentagon chief also wants DOD components to leverage commercial solutions openings — a solicitation mechanism that the Silicon Valley-headquartered Defense Innovation Unit has been using to bring commercial firms into the Pentagon’s acquisition fold — and Other Transaction agreements, which allow for rapid prototyping and follow-on production contracts for new tech.

However, Pentagon officials have noted that acquisition offices and contracting officers don’t always use or aren’t aware of some of these tools that are available to them, instead relying on more traditional processes associated with federal acquisition regulations.

“Effective immediately, for efforts that meet the threshold requirements enabling the application of authorities provided at title 10, U.S.C., § 3458 or title 10, U.S.C., § 4022, I am directing the use of Commercial Solutions Openings and Other Transactions as the default solicitation and award approaches for acquiring capabilities under the SWP. This applies to any software pathway program in the planning phase prior to execution. Department Components are prohibited from implementing further guidance on this point that would set out restrictive measures, guidelines, frameworks, directives, or policies other than required by statute,” Hegseth wrote.

“The reason this works better [is that] instead of spending years writing detailed requirements and going through a rigid … one-size-fits-all process, we can tap into the best tech available right now, prototype it fast and get it to the field quickly, if it works,” a defense official told reporters during a background call Friday regarding Hegseth’s directive. “So bottom line, we’re cutting out middlemen. Software companies make software. We’re going to buy software from software companies.”

Another senior defense official noted the importance of combining SWP with the commercial solutions opening and OTAs.

“The challenge with that software pathway is that it did nothing in and of itself for how we expose commercial, nontraditional vendors who are also developing innovative software to those software programs. So when we take that software pathway mechanism and we combine it with innovation that DIU has been working in commercial solutions openings, or CSOs, and other transaction authorities, OTAs, we get to the point where now we can expose the programs, the software programs, to nontraditional and commercial software developers, while we simultaneously … lower the barrier for those nontraditional and commercial software developers to get into defense programs of record,” they said.

As an example of the effectiveness of leveraging these types of mechanisms, a senior defense official noted that since 2016, DIU has awarded more than 500 OTAs using the commercial solutions opening process. About 88 percent of those deals went to nontraditional vendors and 68 percent to small businesses. The unit’s goal is to get vendors on contract in less than 90 days.

“This … [Hegseth] memo is applied to programs that are new heading into the planning phase of the software acquisition pathway. And then for any other programs where they have a natural transition point to adopt a new acquisition pathway, that’s when this would apply” to them, a senior defense official said.

DIU and the Defense Acquisition University plan to train and educate other acquisition professionals so they can also use a CSO OT model, according to officials.

Hegseth tasked the acquisition and sustainment directorate in the Office of the Secretary of Defense, in coordination with DIU, to develop and submit an implementation plan for the initiative within 30 calendar days.

The implementation plan is expected to address efforts to train the acquisition workforce.

There’s no dollar-value limit to OTAs for software, according to a senior defense official, although there are thresholds that require A&S-level approval to cross.

“What you do have is the mechanic that allows you to go from a prototype OT in software that may exist pre-acquisition into an acquisition program of record that has an associated production OT that follows on to that prototype OT, right? So that’s a key element of these OTs is that … you can prototype an OT and then a completely different organization can drop a production OT on top of that prototype OT,” a senior defense official told DefenseScoop during the call with reporters. “So think about that in the concept of a prototyping organization transitioning to an acquisition program of record, right? You suddenly have this tool that allows you to use that OT mechanic to go very quickly between the prototyping aspect and the production aspect. And again, of course, the production OT … has to have a successful prototype OT on which to base its award.”

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This award to the California-based geospatial analytics company — worth up to $2 million in pilot funding — is historic as it marks the result of NGA’s first-ever commercial solutions opening (CSO) solicitation.

“If this is successful, we may look to the CSO pipeline for other acquisitions,” an NGA spokesperson told DefenseScoop on Tuesday.

In conversations over email this week, the spokesperson and NGA Director of Commercial Operations Devin Brande briefed DefenseScoop on the recent selection process and how the agency is thinking about innovating its acquisition methods.

This CSO is one component of Project Aegir, NGA’s fresh attempt to shape a multiple-vendor approach to buying unclassified intelligence products and ultimately enabling a commercial architecture to sense and make sense of illicit maritime activity. 

The agency launched Aegir earlier this year in response to a direct request from U.S. Indo-Pacific Command, which oversees military operations in a region where illegal fishing is a top maritime security concern.

“Rather than telling industry what to give us, we’re asking them to show us what’s possible, unlocking new potential and leading to a stronger industry-government team,” Brande told DefenseScoop on Wednesday.

“Because of the evolving, global nature of the mission NGA recognizes we have to use all tools available to provide the GEOINT capabilities our customers need,” he said.

In total, 82 teams competed for the agency’s first-ever CSO. 

From those, a dozen finalists were selected by a panel of analysts and collection managers from NGA and Indo-Pacom to make their pitches in-person at the Defense Innovation Unit headquarters in Mountain View, California, earlier this month, according to an NGA press release.

The finalists were: Airbus U.S. Space and Defense, Anduril Industries, BlackSky Geospatial Solutions, Freedom Technology Solution Group, HII Mission Technologies, Orbital Insight, NV5 Geospatial, Planet Labs Federal, Royce Geospatial Solutions, Space-Eyes (Channel Logistics, LLC), Striveworks, and Ursa Space Systems.

During the pitch sessions, each of the finalists were evaluated “on their ability to fuse diverse data types to both identify maritime vessels and to increase confidence in using automation to confirm the characterization of maritime activity,” per the release. 

The U.S. Coast Guard Maritime Intelligence Fusion Center Pacific also participated in the pitch sessions at DIU to supply mission-based input.

Notably, the agency’s entire execution of this CSO solicitation — from public announcement to selection — unfolded in less than 90 days.

“The biggest thing here is that we’re exploring new ways of speeding up acquisition to get new capabilities to our customers, and warfighters, faster. Ninety days for a solicitation to award is insanely fast. So even though it’s a pilot, it’s very meaningful from an acquisition perspective,” the NGA spokesperson told DefenseScoop. “The fact that we’re looking at wholly commercial capabilities for this means that we can speed up the process.”

Over the next five months, pilot testing will be conducted on Orbital Insight’s capabilities. The results of those tests will determine whether NGA will pursue any long-term contracts or broader acquisition efforts.

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NGA Director Vice Adm. Frank Whitworth highlighted this CSO pilot program — and discussed the broader aims of the agency’s new Project Aegir initiative that it’s associated with — during his keynote at the annual GEOINT Symposium and in a media roundtable that followed. 

“On the maritime CSO, I would say that certainly what’s happening in the Red Sea would complement that. But in its infancy, this really stemmed from requirements that we get from the Indo-Pacom commander more than anybody,” Whitworth told DefenseScoop during the roundtable.

“And I hope — whether it’s now [the new Indo-Pacom commander Adm. Sam Paparo or former Indo-Pacom chief Adm. John Aquilino] because it was on [Aquilino’s] watch that we really listened hard to this requirement — I hope that they’re happy, because it’s another indication of how responsive we are,” he added. 

CSOs are a relatively new mechanism that enables the Defense Department and its components to buy innovative and emerging commercial capabilities from non-traditional vendors. 

Solicitations that follow CSO procedures generally allow the Pentagon to more rapidly select commercial solutions that meet fast-changing contemporary needs. 

“It was written into law in the [fiscal 2022] NDAA, and so we want to make sure that we’re using all the tools in our toolbox — not just operationally, but in the acquisition space — to get at those capabilities and to help unlock the potential in the industry,” NGA Commercial Operations Director Devin Brande told DefenseScoop during the media roundtable.

Through the new CSO pilot for capabilities to expand maritime domain awareness, NGA aims to “work more flexibly with industry and to allow them to come in with more creative ideas, where we don’t necessarily have the clearly defined thing that we want them to build and provide for us,” Brande explained.

This acquisition experiment marks just one element of Project Aegir, NGA’s new pursuit to shape a multiple-vendor approach and generate a commercial sensor architecture that can track and monitor illicit maritime activity all over the world. 

Whitworth emphasized how this new effort and aligned pilot collectively underscore the agency’s commitment to staying ahead of evolving threats and ultimately support frontline efforts against illegal, unreported and unregulated fishing, illicit trafficking, and other activities that pose problems for global security.

In this initial CSO pilot, “commercial vendors will work collectively to establish tasking algorithms for tipping and queuing a diverse array of sensors, conduct analysis and deliver wholly-unclassified, shareable intelligence of illicit maritime activities in the INDOPACOM area of responsibility,” according to the agency’s press release announcing the work.

Vendors can submit their responses May 6-24, after which time selected vendors will be invited to pitch their capabilities at Defense Innovation Unit headquarters in Mountain View, California, June 24-28, per the release.

“The selected vendor or group of vendors will be invited to participate in a $1.5 million pilot program to test capabilities. If the pilot program is successful, Project Aegir will be rolled into a major acquisition effort,” the release states.

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