Defense Department leaders and agencies have been granted much-needed flexibility to respond to the coronavirus pandemic.  Last week, Under Secretary of Defense for Acquisition & Sustainment Ellen Lord delegated approval authority for Other Transaction Agreements (“OTs”) related to the coronavirus response, consistent with Section 13006 of the CARES Act.

In an April 5 memorandum, Under Secretary Lord designated approval authorities for OT prototype projects and follow-on production contracts and agreements as follows:

  • Above $100 million, and up to $500 million, to the Directors of Defense Agencies/Field Activities with contracting authority, as well as the Director of the Defense Innovation Unit. This authority was otherwise vested in the Senior Procurement Executives (“SPE”) of the Military Departments, the Director of the Defense Advanced Research Projects Agency (“DARPA”), and the Director of the Missile Defense Agency (“MDA”).
  • Above $500 million, to the SPEs of the Military Departments, and the Directors of DARPA and the MDA. This authority was otherwise restricted to the Under Secretaries for Acquisition & Sustainment and Research & Engineering. Approval authority for OT prototype actions between $100 million and $500 million may now be further delegated by the SPE or Director.

In addition, in lieu of providing 30 days’ advance notice to congressional defense committees of OTs above $500 million that are related to COVID-19, Section 13006 permits Under Secretary Lord or the Under Secretary of Defense for Research & Engineering to provide notice as soon as practicable after the OT’s commencement.  The April 5 memorandum, however, delegates this authority to the SPE of the Military Departments, the Director of DARPA, or the Director of MDA approving any such OT.

The delegations and the removal of “prior notice” requirements are designed to strengthen the defense industrial base amid the uncertainties and challenges caused by the pandemic, while maintaining meaningful oversight and guidance over these tools.  OTs are expedited, flexible vehicles for research and development, prototyping, and rapid production projects.  Because they are not subject to the Federal Acquisition Regulation, they tend to foster engagement with nontraditional defense contractors and small businesses.  Over the past five years, Congress has been encouraging the Department of Defense (“DoD”) to make use of such alternative acquisition pathways to increase opportunities for innovation and expand the defense industrial base by lowering the barriers to entry to contract with DoD. In December, Under Secretary Lord described OTs as a method to “allow innovation to bypass bureaucracy, reducing timelines and lowering costs to provide the best capabilities to our men and women in uniform.”  Although the delegations are only effective until the COVID-19 national emergency declaration is rescinded, they are expected to fast-track approvals for prototype projects related to the virus and to encourage companies to come forward with innovative solutions when they are urgently needed.

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Photo of Samantha Clark Samantha Clark

Samantha Clark practices in the firm’s Public Policy Practice Group as well as the CFIUS and Government Contracts groups. Ms. Clark provides advisory and advocacy support to clients facing policy, political, and regulatory challenges in the aerospace, defense, and national security sector.

Before…

Samantha Clark practices in the firm’s Public Policy Practice Group as well as the CFIUS and Government Contracts groups. Ms. Clark provides advisory and advocacy support to clients facing policy, political, and regulatory challenges in the aerospace, defense, and national security sector.

Before joining the firm, Ms. Clark served in a number of senior staff positions on the U.S. Senate Armed Services Committee, most recently as Deputy Staff Director and General Counsel. In this role, she managed the passage of the National Defense Authorization Act (NDAA), the annual defense policy bill that authorizes the Defense Department’s budget. Ms. Clark worked on Chairman McCain’s legislative priorities to modernize the military retirement system and reform the defense acquisition system and served as an investigative counsel for the committee’s inquiry into cyber intrusions affecting U.S. Transportation Command contractors. During her time on the committee, she managed a multi-billion dollar policy portfolio that covered acquisition law and policy, national security law and policy, military, civilian, and acquisition workforce policy, congressional investigations, military end strength authorizations, military pay and compensation, law of war and detainee issues, and women in combat.

The Secretary of the Navy awarded Ms. Clark the Department of the Navy Distinguished Public Service Award for her “exceptional service to the Department of the Navy as Deputy Staff Director of the Senate Armed Services Committee,” and the Department of the Air Force awarded Ms. Clark her second Distinguished Public Service Award for her work leading specific legislative initiatives to modernize acquisition authorities and reform the military and civilian personnel systems in support of the Air Force during her tenure on the Senate Armed Services Committee.

Photo of Jeff Bozman Jeff Bozman

Jeff Bozman practices with the Public Policy & Government Affairs and Government Contracts practice groups in Washington, DC.  He focuses on the defense and aerospace industry, and on the labor and employment laws that apply to government contractors.