Congress directed the establishment of the pilot in the fiscal 2024 National Defense Authorization Act to explore the use of “consumption-based” contracting.

In the conference report on the legislation, lawmakers defined “Anything-as-a-Service” as a model “under which a technology-supported capability is provided to the Department of Defense and may utilize any combination of software, hardware or equipment, data, and labor or services that provides a capability that is metered and billed based on actual usage at fixed price units.”

A key purpose of the effort is for officials to measure the cost and speed of delivery in comparison to using other buying processes at the regular intervals that are customary for the type of solution provided.

The Trump administration is now moving forward with implementation. The Defense Pricing, Contracting, and Acquisition Policy (DPCAP) directorate recently announced the establishment of the pilot program “to promote greater use of ‘Anything-as-a-Service’ as a concept to fulfill DoD mission requirements under FAR-based contracts or Other Transaction agreements.”

A May 1 memo from John Tenaglia, principal director of DPCAP, implemented statutory authority to employ the model “targeting an initial set of Product and Service Codes (PSCs) for Software-as-a-Service (SaaS), Data-as-a-Service (DaaS), and Space-as-a-Service (facility, including classified space as a service).”

For SaaS, that includes Business Application/Application Development Software as a Service, DA10; Compute as a Service: Mainframe/Servers, DB10; Data Center as a Service, DC10; End User as a Service: Help Desk, DE10; IT Management as a Service, DF10; Network as a Service, DG10; Security and Compliance as a Service DJ10; and Storage as a Service, DK10, according to an attachment to the memo.

DaaS includes Data Center Support Services, DC01; Mobile Device as a Service, DE11; Network: Satellite Communications and Telecom Access Service, DG11; Platform as a Service: Database, Mainframe, Middleware, DH10; Information Retrieval, R612; and Data Collection Services, R702; Special Studies/Analysis-Scientific Data, B529; and Special Studies/Analysis-Scientific Data (Other Than Scientific), B506.

For space-as-a-service, that includes Rental of Office Buildings, X1AA; Rental of Conference Space and Facilities, X1AB; and Rental of Other Administrative Facilities and Service Buildings, X1AZ.

DPCAP officials “will consider contracting officer proposals to include additional PSCs,” Tenaglia noted.

The memorandum was sent to the commander and acquisition executives of Cyber Command, Special Operations Command and Transportation Command, as well as the deputy assistant secretary of the Army for procurement, deputy assistant secretary of the Navy for procurement, deputy assistant secretary of the Air Force for contracting, and defense agency and DOD field activity directors.

Contracts accepted into the pilot can be exempted from certain requirements related to certified cost or pricing data and full and open competition.

To participate in the program, contracting officers must request approval from DPCAP.

If given the green light, contracting officers “shall, to the extent practicable, enter into a contract or other agreement under the pilot program within 100 days of synopsizing the contract action or posting the justification,” Tenaglia wrote.

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Their proposals come as lawmakers are working on fiscal 2023 National Defense Authorization Act (NDAA) legislation — and as software is considered increasingly critical to ensure military advantage in modern conflicts.

In a three-page letter penned to the House and Senate Armed Services Committees on Wednesday, the executives spotlighted some of what they deemed to be “key challenges in the defense acquisition process that slow the cycle time and impede innovative software companies’ ability to quickly deliver” capabilities to the Pentagon. 

“Software is critical in the new battlespace to ensure proactive defense, responsiveness, and adaptability when competing with near-peer adversaries,” they wrote in the letter, which was obtained by FedScoop on Thursday.

In particular, they called for a better Defense Department pathway for buying readily available Software-as-a-Service (SaaS) offerings. SaaS capabilities essentially provide a means of delivering technology applications remotely over the internet — as opposed to locally. 

“We recommend funding and authorization to allow military services to contract directly with SaaS product providers for software capabilities within programs of record for the acquisition of hardware platforms,” the executives wrote. 

“Fortune 500 companies today routinely use SaaS-based systems to stay competitive in the commercial world,” they noted. The U.S. “national defense community urgently needs to leverage SaaS products, so we can stay ahead of our adversaries in the rapidly-evolving digital battlespace.”

Further, the group called on policymakers to standardize the application of existing acquisition pathways across all of the military branches. They’d also like to see the reauthorization of the Small Business Innovation Research (SBIR)/Small Business Technology Transfer Research (STTR) program and the institution of “targeted reforms to assist small businesses in scaling contracts with the government from prototypes to production.”

Additionally, the executives urged the establishment of a clear pathway for extensive use of continuous Authority To Operate, which is the formal declaration that authorizes products to be used by agencies.

They wrote that they believe these recommendations “would significantly ease barriers to entry and allow small businesses dedicated to building mission-focused software the opportunity to break through the valley of death more quickly, thereby increasing innovation and technological superiority for the Department of Defense.” The term “valley of death” in the federal acquisition world refers to struggles to transition promising technologies into large-scale procurement.

The companies involved aimed to inform NDAA conference discussions before Congress’ August recess, FedScoop confirmed.

Those signed on to the correspondence include: Rebellion Defense, Recorded Future, Copado, Fiddler AI, Percipient.ai, Keeper, CalypsoAI, Interos, SandboxAQ, Nuvolo, LeoLabs, SparkCognition Government Systems, Second Front Systems, Tricentis, Aqua, Armis, Devo Security, Corelight and Jama Software.

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