United States: The Future Of DIUx In Limbo Under Trump

Founded in August 2015 by Secretary of Defense Ash Carter, the Defense Department's Defense Innovation Unit Experimental, or DIUx, has been working to bring technology innovations from commercial developers to the armed services—quickly.   DIUx seems to be exactly the type of government entity that should appeal to the Trump administration; it is leanly staffed, is focused in locations (Boston and Silicon Valley) that are centers for the innovations the Department of Defense (DoD) is looking for, avoids the contractual burdens of traditional government procurement, and has streamlined procedures designed to appeal to commercial companies while avoiding red tape.  From the administration's perspective, DIUx has something else going for it:  it has been criticized by Congress.  Yet, it is hard to say whether DIUx will survive the change in administrations.  So, if your company has innovative technologies that might be interesting to the DoD, but you wish to avoid the headaches of traditional government procurement, now might be the time to weigh in with the DoD or Congress about the importance of DIUx.  Here is a perspective on how DIUx works that might assist you.

To help the DoD access cutting-edge technology from nontraditional contractors, DIUx introduced a new acquisition mechanism, known as the Commercial Solutions Opening, (CSO) through which DIUx solicits solutions to problems the military faces.  If a company's solution is accepted, the company is awarded a special agreement — an "Other Transaction" — for prototype projects (OT), which is not governed by the Federal Acquisition Regulation's (FAR) burdensome contracting obligations.

The CSO guidebook, "Fast, Flexible, and Collaborative: The Commercial Solutions Opening and DIUx's Approach to Other Transactions for Prototype Projects," available on the DIUx website, describes how federal agencies can create contracting vehicles that fast-track technological innovations using the CSO process.   DIUx solicits private-sector vendors that are in the business of creating technology products and services that could benefit the military.  Once DIUx receives a developer's "solution brief," the Government evaluates the brief against its criteria.  If the Government finds the brief has merit, the vendor is invited to submit a formal proposal.  A successful proposal can result in an OT agreement for a prototype project.  Essentially, the transaction is a merit-based selection process set up to address specific problems identified by the military.  The process is similar to that of broad agency announcements (BAAs)  already used by other agencies.

To bring together the government and commercial vendors that might not otherwise participate in government deals, DIUx takes advantage of enhanced OT authority granted just before DIUx's inception. In 2015, Congress expanded the use of OT Authority under Section 815 of the National Defense Authorization Act for Fiscal Year 2016 ("FY 2016 NDAA").  Section 815 replaces the OT Authority previously set out in Section 845 of the NDAA for Fiscal Year 1994. Under Section 815, 10 U.S.C § 2371b authorizes the Director of the Defense Advanced Research Projects Agency (DARPA), the Secretary of a military department, or any other official designated by the Secretary of Defense, to carry out prototype projects under OT Authority that are "directly relevant to enhancing the mission effectiveness of military personnel and the supporting platforms, systems, components, or materials proposed to be acquired or developed by Department of Defense, or to improvement of platforms, systems, components, or materials in use by the armed services."  10 U.S.C.§ 2371b(a)(1)(a).  This OT Authority expanded how DoD may use OTs, which may now be used for research, development, and demonstration (RD&D) projects and activities that help advance new technologies or processes.

Using this authority, coupled with its streamlined processes, DIUx has the potential to do a lot of good. In the three months from June 2016 through the end of fiscal year 2016, DIUx awarded 12 OTs worth $36 million, with awards averaging 59 days to complete.  This is an impressively fast process that anyone familiar with federal contracting might admire: typical procurement processes can take many months or years and often involve bid protest litigation. (2016 Protest Roundup)

Congress most recently further broadened DoD's OT authority.  Section 879(a) of the FY 2017 NDAA, signed at very end of 2016, authorizes the Secretaries of Defense and the military departments to carry out a "defense commercial solutions opening pilot program" to acquire, on a fixed-price basis "innovative commercial items, technologies, and services" via a "competitive selection of proposals, resulting from a general solicitation and the peer review of such proposals." This will allow agencies that use traditional FAR contracts to procure prototypes via procedures comparable to CSOs.

Despite the success DIUx boasts on a shoe string budget, it has its detractors.  Congress has expressed skepticism about DIUx, which is reflected in the FY 2017 NDAA. The Act places significant restrictions on the expenditure of funds ultimately appropriated until DoD delivers a report to Congress detailing DIUx's justification.  And the NDAA Conference Report states Congress is concerned that DIUx is not delivering "game-changing technologies" and that itsr "customer base is not as diverse as expected." The Conference Report indicates that DIUx is not integrated with DoD's "innovation ecosystem," which may impede DIUx's ability recreate its "effectiveness and networking potential."

Whatever one's opinion of Congress, it remains true that what Congress says in one year is apt to be different a year later, particularly when administrations change.  Now is the time for industry to weigh in on DIUx.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.