DIU update: the 2020 annual report

Key statistics from DIU’s 2020 annual report that I compiled:

One additional piece of interest: 50 percent of DIU transitions used a production Other Transaction contract. Since 11 were transitioned in 2020, the figure probably indicates that 13 out of 26 total transitions used production OTs. By the way, DoD overall increased production OTs from $1M in 2019 to $354M in 2020 (out of a total of $16.2B).

I encourage you to read through the narrative of their projects, which is a great feature. But the thing I’d like to highlight is their approach to the project lifecycle, outlined below. The top part of the funnel is incredibly important. It doesn’t start with some opinion-based requirement and then gets handed over for market research (i.e., a Request for Information). Instead, it starts with a deep exploration into the state of the art and commercial markets in continuous interaction with understanding user needs.

Then, the concept moves into a Commercial Solutions Opening with gates that make it easy for commercial vendors to get involved, starting with a white paper, then an oral presentation, and finally negotiate an agreement. In many ways, this is a continuation of market research and requirements development, whereas a traditional FAR 12 solicitation is already locked down and DoD can only accept incoming proposals.

One major reason DIU is able to contract this way is because their funding isn’t tied to a particular requirement and program of record. Another reason is probably their organizational culture. Most program offices aren’t equipped to sift through 41 proposals per solicitation with multiple down selects. It requires a real market research capability that is almost totally lacking in the program offices. Though their goal is awarding contracts in 60-90 days, 127 days is pretty good considering this process has multiple phases.

Here’s an overview of last year’s report.