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A consortium is defined in Websters dictionary as “an agreement, combination, or group (as of companies) formed to undertake an enterprise beyond the resources of any one member.” A consortium in the Government contracts world is formed for a similar reason but is an organized group that consists of members in the form of non-profits, academic institutions, or contractors focusing on a specific technology area. Consortia can be used to develop an ecosystem of the above referenced entities working together on a project, whereby members of a consortium pool resources and collaborate. Consortia can also facilitate multiparty agreements where its members consider a problem or need presented by the Government and submit white papers for consideration. Consortia groups are especially beneficial for government buyers who are unfamiliar with emerging technology, and for nontraditional companies who are unfamiliar with navigating the government contracting world.

Joining a consortium is not difficult or expensive. The company/contractor merely pays a small membership fee ranging from around $500 to $5000 depending on the size of the company. Members can be traditional or nontraditional government contractors, but they all specialize in a specific technological area such as robotics or artificial intelligence among others. Consortia membership can range from a few members to over a thousand. The consortia business model generally starts when a consortium receives a high value Other Transaction Authority/Agreement (“OTA”) award from the government. Then, the government will include all of its needs/problem sets into a solicitation, which is released to the consortium. These needs/problem sets typically deal with a particular technological area of which the consortium’s members specialize in. The consortium will then determine which members will be assigned and/or sub-awarded the OTA on behalf of the government.

In the last 35 years, investment and advances in innovation have shifted heavily to the private sector, which necessarily includes non-traditional government contractors and companies that are likely off the governments radar. These innovative individuals and companies are constantly developing technology that the Government needs, our adversaries seek, and the private industry craves. Therefore, it is very important for the U.S. Government to find methods, like consortia, to reach these individuals and companies and become competitive in this ecosystem/marketplace.

Consortia can be beneficial to its members and the Government. First, consortia provide a group of like-minded entities that are experts in a subject matter area. Collaboration between members can create synergy and advance innovation beyond that which is normally enjoyed by a single entity. Second, as an OTA awardee, consortia groups have already completed the requisite competition which makes the process faster. Third, consortia members are already active in the relative subject matter area and can more readily, either individually or collectively, address agency problems and requirements. Thus, consortia can benefit both its members and the Government a great deal.

Not all consortia operate the same. A federal agency may choose to operate directly with consortia groups. However, it also has the option to work with a consortium management firm if the agency needs multiple different specializations and does not want to work with each consortium individually. For example, a government agency may have a project that deals with both medical and armament OTAs. Instead of working with two different consortia to handle the corresponding OTAs, the agency may simply work with a consortium management firm who will engage with the different consortia and assign OTAs as needed. Management firms provide a balance between the government and the industry, ensuring that the needs of both are met. Below are examples of consortium management firms:

  • Consortium Management Group, Inc. (“CMG”) is a nonprofit corporation created to serve as a consortium manager. CMG’s mission is to deploy technology to the United States military. It currently manages three OTA consortia:  Consortium for Energy, Environment and Demilitarization (“CEED”)Consortium for Command, Control and Communications in Cyberspace (“C5”); and Naval Aviation Systems Consortium (“NASC”). CEED and C5 are both currently in 10-year agreements with the Army to provide OTA awards to its members, as well as 5-year agreements with the Marine Corps System Command. Each of CMG’s groups is comprised of leading companies, academic institutions, and other organizations with expertise in their respective mission areas. The goal of CMG is to form an enterprise that the government can access directly through a single agreement.
  • Advanced Technology International (“ATI”) is another consortium management firm, which recruits, organizes, and leads OTA consortia. ATI helps team members, who are often competitors, produce technology solutions that benefit the government and the industry. It currently manages 13 OTA consortia, which includes specialized areas in shipbuilding and ship repair, advanced materials, medical technologies, electromagnetic spectrum capabilities, space technologies, and rapid prototyping. ATI considers itself to be a “one stop shop” that handles contracting, payments, cost analyses, negotiations, IP issues, etc. for prototype work.

Below are examples of individual consortium groups that a federal agency may choose to directly give its OTAs.

  • The Medical Technology Enterprise Consortium (“MTEC”) is a 501(c)(3) biomedical technology consortium collaborating under an OTA with the U.S. Army Medical Research and Development Command. The goal of MTEC is to prevent injuries, accelerate the development medical solutions, and assist the wounded to return to a fully functioning life. MTEC wants to apply its research development and technology across the entire medical infrastructure. This consortium is meant to benefit anyone––military, veterans, and civilians.
  • The National Armaments Consortium (“NAC”) is a team of leading technologists, engineers, designers, scientists, manufacturers, and program managers across industry, academia and laboratories. NAC develops weaponry that gives the United States a technological edge over its enemies. Their mission is to foster collaboration between the Government, Industry and Academia in order to deliver weapon innovation for national security.
  • The Department of Defense Ordnance Technology Consortium (“DOTC”) specializes in armaments system technology research and development. The DOTC works directly with the NAC, which takes over the industrial and academic components of the consortium. This consortium was developed under the Department of Defense (“DoD”) as a means to develop ordnance technology and prototyping.
  • The Consortium for Energy, Environment, and Demilitarization (“CEED”) develops warfighter technologies. CEED emphasizes the idea that they bring nontraditional innovators to the DoD on a more “commercial” basis as opposed to government contracting. CEED specializes in a wide variety of technologies ranging from environmental quality and installations to enabling technologies.
  • The National Shipbuilding Research Program (“NSRP”) is a consortium which assists with reducing the total ownership cost and improving capabilities for the government and U.S. flag commercial ships. The NSRP currently has 11 different collaborations and is sponsored by 7 different Navy sponsors.
  • The Space Enterprise Consortium (“SpEC”) assists its members with obtaining space-related prototype OTA projects. The SpEC helps non-traditional companies connect with space OTAs concerning force enhancement, space control, command and control, and situational awareness.

For a more comprehensive list of DoD consortia, click here.

Reference

DoD Use of Other Transaction Authority: Background, Analysis and Issues for Congress

OTAs––Role of the Consortium Management Firm and Lessons Learned

Traditional Contractors and OTAs

Author

Chelsea A. Padgett, Esq. is an associate attorney with Ward & Berry, PLLC. Ms. Padgett attended law school at the University of Florida Levin College of Law and is now licensed to practice law in the Commonwealth of Virginia and Florida.

Alan M. Apple, Esq. is a Partner with Ward & Berry, PLLC. He is part of the Ward & Berry GovCon team and is active in all areas of the firms practice. LTC (R) Alan Apple is a former U. S. Army Judge Advocate and Chairman of the Government Contracts and Fiscal Law Department of the Army’s JAG School. He holds a M.S. and B.S. from Louisiana Tech University, a J.D. from the University of Oklahoma College of Law, and a LL.M. from The Judge Advocate General’s School with a specialization in Government Procurement Law.

Chelsea Padgett

Author Chelsea Padgett

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