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The Defense Department plans to revolutionize its approach to buying artificial intelligence and use fast-track funding arrangements to lure companies to help it build A.I. systems.
In an event on Sept. 9 and 10, officials with the Pentagon’s Joint Artificial Intelligence Center (JAIC) outlined a new contracting model for A.I. in a bid to stay a step ahead of rivals China and Russia. The move reflects a growing trend in the way the department pays for cutting-edge research and development.
“The bottom line is we want to make it easier for industry and academic stakeholders to work with the DOD and the JAIC to develop AI capabilities,” wrote Lt. Commander Arlo Abrahamson, a spokesman with the JAIC, in an email to Bloomberg Government. “Our goal is to inject speed and agility into the AI development process from contracting, design and development, testing, and fielding of these capabilities.”
The JAIC Business Model
A Consortium Model for JAIC R&D
The plan calls for first setting up a nonprofit consortium for A.I. research. The JAIC released a solicitation in late August seeking out a nonprofit organization to oversee collaborative research and prototyping efforts between defense agencies, federal contractors, technology companies, and research institutes. The Pentagon intends to award funding in the form of other transaction agreements (OTAs), according to the solicitation, arrangements that allow the department to fast-track spending for certain kinds of R&D work. The JAIC doesn’t currently have the authority to award OTAs on its own, but hopes to have authorization by the end of the 2020 calendar year.
Officials say the plan is necessary to help the department forge relationships with the kinds of A.I. startups and nontraditional defense contractors doing the most exciting work in the field.
From guided munitions, to electronic warfare, to hypersonic weapons, and now to artificial intelligence, consortia and OTAs are increasingly the way the Pentagon prototypes and develops emerging technologies. The DOD’s use of OTA contracts has risen dramatically in recent years: OTA spending grew from $1.4 billion in fiscal 2016 to more than $7.6 billion in fiscal 2019. Bloomberg Government projects that figure could reach $10.9 billion or more in fiscal 2020. About 64 cents of every $1 spent on OTAs flows through consortia similar to the one the JAIC is looking to set up. The remaining 36 cents represent OTAs awarded directly to contractors.
The Tradewind Platform
The second part of the plan calls for building an online portal as the central hub for information sharing between the JAIC and industry. The proposed platform, known as Tradewind, will “streamline the way industry and other strategic partners work with the JAIC to synchronize acquisition practices and develop and transition A.I. capabilities to the warfighter,” said Abrahamson.
The Pentagon released a request for information on Sept. 25 seeking an industry partner to help it build and maintain Tradewind. The portal will aid JAIC officials in communicating information to consortium members and would-be partners, as well as automating aspects of the contracting process, according to the RFI. Potential bidders have until Oct. 9 to respond to the RFI.
The Tradewind RFI outlines dozens of other features JAIC officials are requesting as part of the part of the platform. One module would serve as a site for engagement between industry and academia, enabling users to connect with virtual seminars and trainings. Another module would allow users to publish code to the JAIC’s cloud-based development environment, the Joint Common Foundation. Another module could be used to host hackathons and other crowdsourcing events.
Above all else, JAIC officials are seeking an easy-to-use platform that offers users step-by-step instructions, similar to “TurboTax” tax software, according to the RFI.
“We believe the advantages of Tradewind, when fully implemented, will create agility, speed, and transparency in how we work with industry and academic partners to deliver critical AI capabilities,” said Abrahamson.
Trusted Ecosystem Partners
The third component of the Pentagon’s JAIC acquisition plan calls for establishing a group of “trusted ecosystem partners,” consisting of think tanks, venture capital firms, technology accelerators, and consortia to serve as the department’s advisers on A.I. R&D. The JAIC’s trusted ecosystem partners won’t be the ones producing A.I. technologies. Instead, they will “assist technology providers with customer expertise, resources assistance, partnerships, and other similar related services,” according to a second RFI released on Sept. 25.
Together the JAIC A.I. R&D consortium, the Tradewind online portal, and the trusted ecosystem partners make up the three legs of the JAIC’s new buying model.
A Continued Role for Traditional Contractors
Despite the JAIC’s emphasis on a nontraditional acquisition strategy, traditional defense contractors and systems integrators will no doubt play a key role in its future plans. JAIC officials rolled out three new multiple-award, small-business set-aside contracts in April 2020 that will support various aspects of the center’s operations over the next several years.
The first, an RFI for JAIC Mission Support seeks “highly technical” personnel from up to two small businesses to provide software architecture, operations and systems analysis, technical writing, and subject matter expertise. The second, for JAIC Test & Evaluation Services, will deliver performance and security testing of all software assets developed by JAIC personnel and partners. The third, for JAIC Data Readiness will support data management and engineering services to prepare JAIC data sets for use in multiple cloud environments.
Previously, JAIC officials awarded Booz Allen Hamilton Holding Corp. an $800 million task order for the Joint Warfighter program and Deloitte Touche Tohmatsu Ltd. a $106 million award for the Joint Common Foundation.
Bloomberg Government projects that the federal government will spend about $2 billion on A.I. contracts in fiscal 2020, up from $1.5 billion in fiscal 2019. The Defense Department is expected to spend $1.4 billion on A.I. contracts in fiscal 2020. Subscribers can click here to download BGOV’s latest market forecast on Artificial Intelligence & Machine Learning.
To contact the analyst on this story: Chris Cornillie in Washington at firstname.lastname@example.org