NDAA includes new acquisition pilot for consumption-based solutions

Acquisition reform appears to be losing some momentum to go by the 2021 National Defense Authorization Act, but Congress is urging the Pentagon to pilot consumption-based buying and cloud, according to language in the conference report.

The consumption-based acquisition provision was originally recommended by the Section 809 panel, which was commissioned to develop recommendations to improve the Defense Department's acquisition practices, in 2019. Congress later took it up in the 2020 defense authorization bill, asking for a study of the contracting approach, but it was unclear whether anything was done. This year, Congress called for a pilot.

The consumption-based pilot program involves an agency getting billed for how much it uses, would help DOD evaluate how such contracts "address software-intensive warfighting capability, including criteria for selecting initiatives for the pilot, direction on certain contracting elements, requirements for monitoring pilot activities, and a series of congressional reporting requirements," according to the joint explanatory document. The pilot would also include "military applications beyond software."

But while making the new contracting mechanism shows marked improvement, the move is a baby step that falls short of the radical acquisition change DOD says it needs, according to Nick Tsiopanas, former Section 809 panel member who helped draft the recommendation.

"We're thrilled that there's something about this in the NDAA, but at the same time, it's the same old dipping the toe in the water instead of moving out," Tsiopanas, who is the president of ZYGOS Consulting, told FCW.

"And that was one of the big things coming out of the section 809 panel: the DOD acquisition system doesn't value time."

However, he said the pilot could work well with the Defense Department's Adaptive Acquisition Framework, which aims to simplify the buying process for acquisition professionals and includes a pathway just for software.

The mention comes alongside a push for the Defense Department to embrace the software-as-a-service model.

"The Department of Defense should take advantage of 'as-a-service' or 'aaS' approaches in commercial capability development, particularly where the capability is software-defined and cloud-enabled," the conferees wrote.

With as-a-service trending up, the contracting culture may have to author their own change outside of official policy, Lawrence Asch, who was on the 809 panel's professional staff said. But the best way to do that might mean starting from the bottom.

"Acquisition reform has absolutely slowed up. We need to keep pushing this speed. There is so much overhead, it's so slow...I think we're making a mistake by looking at these things at the top," Asch told FCW.

"Maybe forget 809, let's do something with the contracting officers and program managers -- the hardworking people in the field we need to listen to," Asch said. "Maybe we gotta start from the bottom up and listen to the people in the field and even if we do them as pilots that don't have to go to an NDAA. Let's try that."