Analysis of Nontraditional Contractors as a Proxy for Innovation Through DoD Other Transaction Agreements

Abstract

The 2018 National Defense Strategy highlights the critical importance of leveraging technological advancements in a world with rapidly growing security concerns. For the Department of Defense (DoD) to integrate advancements into military capabilities, the acquisition community will need to innovate its business practices to support the changing character of war. Other Transactions (OTs) provide a tool that offers the flexibility to incorporate business methods similar to commercial industry best practices, thereby supporting faster design and execution. The recent increased use of OTs in federal contracting for research and prototype projects also incentivizes nontraditional defense contractors (NDCs), who would not otherwise overcome obstacles inherent in traditional Federal Acquisition Regulation contracting, to contract with the DoD and serve as proxies to innovation. Three primary techniques are employed. First, a spend analysis is performed on Federal Procurement Data System-Next Generation data. Second, consortium data is matched with the System for Award Management Application Programming Interface to assess the proposed scale using psychometric techniques. Last, a logit model estimates the predictive power of the proposed scale and the relationships between the variables and the current NDC statutory classification. Understanding the characteristics of OT NDCs will help the DoD leverage acquisition policy decisions to access emerging technology solutions.