Christopher Yukins / GW Law: Hello! Welcome to this latest Webinar in our series here at George Washington University Law School and the Government Procurement law program. This program is a really interesting program about how procurement can be used to drive innovation. We're going to be talking about the Diana program in the North
Christopher Yukins / GW Law: American Treaty organization or NATO. We're going to be talking about the Diana program, which is a special program within NATO to harness private sector technology developments for dual-use technology through NATO, and it's an excellent case. Study on how we might accomplish procurement for innovation in a very effective way.
Christopher Yukins / GW Law: I'm Chris Yukins. I'm the Lynn David research professor in government procurement law at George Washington University Law School. Just a few technical points. The recording from this program is going to be available later today it'll be available both on the program page, which is at publicprocurementinternational.com and will also be available on the Gw. Law government procurement law program. Youtube page. If you'd like to watch it there.
Christopher Yukins / GW Law: we have questions and answers, and we have a chat available for members of the audience. If you'd like to ask questions. Please feel to do so. We will be answering questions. The panelists will be answering questions as we go through on a rolling basis.
Christopher Yukins / GW Law: We'll also have hopefully some time for discussion at the end. And if you have specific questions that you want to follow up on, please feel free to send me a note at Cukins at Lawgwuedu, glad to respond to those questions. Just a last point, because, as in many cases, we have members, we have officials from government here, so should emphasize that the speaker statements
Christopher Yukins / GW Law: or in their personal capacities. I want to make a special welcome to all of you who are joining from around the world. We had over 300 registrants for today's webinar, and from over 60 countries. It's really, it's very, very nice to see this webinar be able to reach so many people around the world.
Christopher Yukins / GW Law: Just an upcoming Webinar Webinar series we're going to have in July on open on the we're doing it in conjunction with the open contracting partnership is on open contracting, which is the idea that all procurement data should be publicly available and it should be machine readable. It's a revolutionary idea, and the open contracting partnership has made extraordinary strides around the world in terms of implementing open contracting, and we'll be having
Christopher Yukins / GW Law: an introductory session, and then we're going to be going continent by continent around the world, as you can see from the schedule surveying what's been accomplished in open contracting around the world. And that's in, as I said in July, and we'll be starting the the publicity for that in the coming weeks.
Christopher Yukins / GW Law: Now, our panelists. We're very, very pleased to have them join us here today. I'm going to just go quickly through their backgrounds. Tom Exorley is the general counsel in NATO, Diana, and he's going to be discussing Diana's procurement strategy. Major General George Cord Real, from Portugal, will be joining us to talk about. He's the Diana, military Deputy Director for Europe.
Christopher Yukins / GW Law: He's going to be talking about Diana's goals from a user's perspective, talking in detail about how Diana implements this goal of harnessing dual use technology for NATO,
Christopher Yukins / GW Law: joined as well by Lucian Cernan, who's the head of global regulatory cooperation and international procurement negotiations at the European Commission. He's going to be talking about procurement for innovation in the European Union. We're also joined by Sonia Tabriz, who's a partner at Arnold Porter in Washington, DC. She's going to be talking about us solutions for innovation, including other transactions and commercial solutions openings. These are very difficult. Sonia and I were kidding about this yesterday. These are very difficult terms
Christopher Yukins / GW Law: for clunky terms to use American slang for very important new methods of procurement for innovation.
Christopher Yukins / GW Law: I'm 1 of the moderators, as is my very dear colleague from the University of Turin, Gabriel Araca, and Dan Shaney is an adjunct professor at Gw. He's currently a lieutenant colonel in the Us. Air Force, and in August he's going to begin teaching at the University of Dayton in the Law school there, and I very much hope that, as I age out. He takes my place at Gw, so I'm very glad that Dan could join us today.
Christopher Yukins / GW Law: We're going to be talking about key elements of procurement for innovation first, st then, we're going to be talking with George and with Tom, and in more detail with the NATO Diana case study talking about the European union's approach. And we're talking about the Us. Approach to us to procurement for innovation with Sonia.
Christopher Yukins / GW Law: So we are going to first, st as I said, focus 1st on Diana, which is the Acronym, stands for the defense innovation accelerator for the North Atlantic. And if you want to learn more about Diana, the website there, the website. Link is there. As I said, the slides from this presentation are already posted up at publicprocurementinternational.com, and feel free as we go along, to to look at some of the resources we'll be referring to
Christopher Yukins / GW Law: now, we, Paul Payton, who's a retired major general from the Canadian Armed Services. He gave a speech at George Washington a few months back, and he talked about the key elements of what NATO Diana is trying to do the key goals, and I was stunned when I listened to the speech, because the speech
Christopher Yukins / GW Law: help really map out what are the 5 key goals in procurement for innovation in general? These are 5 key elements that have to be recognized. And for the lawyers and the law professors this is really important, because once you recognize what the 5 key elements are then setting up regulatory structures that match these elements becomes much, much easier. That's why Paul's presentation was such a breakthrough.
Christopher Yukins / GW Law: So he said that there were 5 key things, 5 key measures for NATO, success for NATO Diana's success operational impact. So he's looking to see whether or not the technology that's being developed in NATO. Diana is successfully integrated into the NATO operations. So the 1st question is, how do we structure procurement? So this new method of procurement. This new approach has an operational impact.
Christopher Yukins / GW Law: He looked at rapid prototyping which has become, which means making the procurement process, including the prototyping process faster and more efficient. So you can accelerate new solutions from the technology marketplace into government, or, in the case into dual use.
Christopher Yukins / GW Law: A cultural shift, he called for a cultural shift that moves towards
Christopher Yukins / GW Law: new ways of doing business that reflect best industry practice so that NATO Diana can move at commercial speed. This, in procurement terms, means thinking about some of the impediments, some of the cultural and regulatory impediments
Christopher Yukins / GW Law: to procurement that really that need to be pushed aside so that procurement for innovation can move more quickly, normalized collaboration that encourages ongoing dialogue between industry and government. So that there's not just a matter of the government calling for technology. But that there's collaboration ongoing normalized collaboration.
Christopher Yukins / GW Law: and the last is availability of private capital. In the case of NATO Diana. For security reasons, this has to be a trusted capital community, and what NATO Diana is looking for is a trusted capital community that aligns with NATO's mission is committed to human rights, and the rule of law and is ready to invest in deep tech companies.
Christopher Yukins / GW Law: Private capital plays an essential role in this procurement for innovation, and so anticipating what the constraints, the boundaries, the elements, or the key criteria for accepting private capital. That's a very important part of thinking through how procurement for innovation can work. So Paul's speech was nominally about
Christopher Yukins / GW Law: NATO Diana. It really serves as a framework for discussion for our discussion today, and more broadly for our discussion of procurement, for innovation in general.
Christopher Yukins / GW Law: With that I'm going to pass it off to George to talk about the the NATO Diana initiative in detail, and, George, with your with your permission, I'll advance the slides at your signal.
Jorge Corte-Real Andrade: Thank you. Good morning and afternoon. It's a pleasure and privilege to address you together with Tom Mcsorley. This subject next slide, please.
Jorge Corte-Real Andrade: As you know, defense capabilities have specificities and constraints. They are pushed by technology pulled by the end user's perception of needs. And normally they take a long period of time to be developed
Jorge Corte-Real Andrade: next.
Jorge Corte-Real Andrade: So we need to create the conditions, to integrate innovation whenever it appears, it responds to the end users needs, and when it brings superiority effects
Jorge Corte-Real Andrade: that significantly outweigh the risks.
Jorge Corte-Real Andrade: But in any case we need to ensure efficiency, accountability, and transparency in all procurement activities.
Jorge Corte-Real Andrade: Next, please.
Jorge Corte-Real Andrade: This is the capability driven innovation cycle that we follow trying to identify that window of opportunity that starts when we identify the minimum viable capability which is when a capability has not yet fully complete, but it has enough security and safety to be employed.
Jorge Corte-Real Andrade: and this winner opportunity lasts until the adversary adapts to the effects of this capability.
Jorge Corte-Real Andrade: So we need to bring agile processes to take the most advantage of this win of of opportunity.
Jorge Corte-Real Andrade: Next slide, please.
Jorge Corte-Real Andrade: First, st we need to overcome the innovation hurdles that we have already identified
Jorge Corte-Real Andrade: on the technology push side on the end. Users need pull side and also on the capabilities development, namely, the regulatory and intellectual property issues. But also. And this is a key point. The lengthy procurement process that are a bottleneck in this development
Jorge Corte-Real Andrade: next slide, please, Tom.
Jorge Corte-Real Andrade: please. Yeah. So how are we dealing with this valley of death problem? That now unfortunately is is almost become
Jorge Corte-Real Andrade: a cliche within. You know our the effort of bringing innovation into into capability development. And I think you know, as as George
Jorge Corte-Real Andrade: points out, with with the Valley of death and with the problem of procurement cycles. What I find really interesting when I talk out into the market or speak to people or on panels, and you look at the technological needs.
Jorge Corte-Real Andrade: No one doubts, really, that the technology that's needed won't be available.
Jorge Corte-Real Andrade: right? So we're in a really amazing place in in terms of human capability where people don't doubt. Oh, if there, if you need something, some kind of technology, it's possible to have that technology that we are so capable of manipulating technology
Jorge Corte-Real Andrade: and science. What's amazing is what people are often skeptical of is whether we can actually acquire that technology in the public sector because of the process difficulties of actually
Jorge Corte-Real Andrade: moving from the lab
Jorge Corte-Real Andrade: to operations. And so that is really what Diana is about is bringing together, as you see here in our little circle, graphic all of the various elements of the marketplace to work together, to, to innovate.
Jorge Corte-Real Andrade: and to do so, as we'll talk a little bit more about both for dual use. So to innovate, to solve really pressing resilience and security challenges, and then also to bring those innovations into defense capabilities as they're needed. And so we do this by bringing together the innovators
Jorge Corte-Real Andrade: as well as the public sector. As Chris mentioned the capital community because you need the funding to get across that valley of death academia as well as industry.
Jorge Corte-Real Andrade: meaning traditional supply chain who are needed to integrate innovation and also to scale innovation.
Jorge Corte-Real Andrade: So just a few important pieces here from these yellow boxes. So the 1st is, we are dual use focused, which is, you know, I think is, George will say it's sometimes controversial because people say, Well, isn't NATO really focused on collective defense? Shouldn't it be defense.
Jorge Corte-Real Andrade: use focus more than dual use focus. But the thing about dual use is, it's about finding technologies that have broad applicability. And what that means is, there's also a broad market.
Jorge Corte-Real Andrade: And so when we are looking to maximize the value of the investments we're making in terms of funding into Diana by identifying those groundbreaking technologies at a stage where they can do things like solve energy, the energy crisis
Jorge Corte-Real Andrade: when they can help secure our financial institutions and our critical infrastructure as well as secure our military. That's a much wider market on which you get the funding. You need to actually develop those technologies and you solve
Jorge Corte-Real Andrade: critical problems both in the civilian and the defense world. And so the dual use is a really important piece, because if you are focused on one use.
Jorge Corte-Real Andrade: that's a much smaller market and therefore much more public investment is needed to bring that technology into operation.
Jorge Corte-Real Andrade: The 360 approach. That's just what we've talked about being able to see the entire landscape across all sectors of the market
Jorge Corte-Real Andrade: deep Tech. We really, we select a whole spectrum of innovators. But we do look for those technologies that are really in the early stages that we can help shape and bring forward to solve tomorrow's challenges, not just, or maybe next year's challenges, not just tomorrow's challenges. And then finally, we're challenge based.
Jorge Corte-Real Andrade: And really, what that means is we describe problems and ask innovators to come with us to solutions, as our managing director always says we want to avoid the and I don't know if it's apocryphal or not. But the the apocryphal quote from the turn of the last century, which is, if you asked the Postmaster General what technology they were looking for, they would have said, a faster horse.
Jorge Corte-Real Andrade: And so we don't want a faster horse problem where we're already solutioneering. We want the innovators to tell us, how can we get somewhere faster without prescribing the tool to do that? We go to the next slide.
Christopher Yukins / GW Law: And Tom, can I? Can I ask a quick technical question.
Jorge Corte-Real Andrade: Yeah.
Christopher Yukins / GW Law: So the so Sonia is going to be talking about 2 procurement methods that are used in the in the Us. System, the commercial solutions opening, and the other transactions which are in many ways resonate with what you've been saying about native Diana.
Christopher Yukins / GW Law: What Sonia will not be talking about is the small business innovation research program, the Sbir, which has 3 phases and in many ways it marries up with innovative innovation partnerships in the European Union. Going back to your value of death point. So when you you have an incipient technology, it's developed, then the value of death is afterwards before it can be fully commercialized, and many technologies die during that 3rd phase.
Christopher Yukins / GW Law: Sbir Tom deals with that problem by creating a very strong commercial preference in sbir phase. 3. So that in essence the technology that is developed through sbir in phases one and 2 may have an absolute preference, and the small business administration would like it to have an absolute preference in phase 3.
Christopher Yukins / GW Law: So using a very strong procurement preference to favor technologies that have been developed in phase one and phase 2. By the Government in your experience in NATO Diana, do you see that as an essential part of procurement for innovation, that there be a strong procurement preference to drive these technologies through that phase. 3.
Jorge Corte-Real Andrade: I think so
Jorge Corte-Real Andrade: not directly, at least structured in the way you describe. And and that is because, as the I think, your EU procurement experts will tell you there's a much different view of what would be perceived potentially as subsidy programs where you're subsidizing technologies. And then you're actually, you actually have the opposite problem, which is, those
Jorge Corte-Real Andrade: subsidized companies are then handicapped because they were sort of given a benefit.
Jorge Corte-Real Andrade: And so that's 1 important reason that we, we actually go to the next slide because we're going to get into this from a technical standpoint, we have structured the entire process. Actually stay, stay here for a second, and then I'm going to add, on top of this. But we have. We have structured our entire pipeline, which is
Jorge Corte-Real Andrade: portrayed here and what is in our charter, and we lovingly call our squid diagram that describes our pipeline. But we've structured this entire process as a competitive dialogue, which is an EU procurement structure that has some resonance also with other transactions and commercial solutions, openings. So when you win a Diana challenge and come into Diana, you are given contractual funding.
Jorge Corte-Real Andrade: and that is contractual funding that then provides a competitive basis for follow on funding within a more limited market. So it's not a preference, but rather once you're into the competitive dialogue of Diana, you can then continue to compete
Jorge Corte-Real Andrade: to provide solutions to solve the problem. So we structure it all as one contractual pipeline rather than doing sort of a subsidy, and then a preference, if that answers your question, and actually and so to kind of talk a little bit here about the Diana pipeline.
Jorge Corte-Real Andrade: and a little bit of this is outdated because this is from our charter. But importantly, it illustrates the main way in which we operate. So we have the challenge that is formed based on inputs from our communities, the NATO communities, academics, industry around what are problems that need solving where there isn't already a solution in the market, that those challenges then go out
Jorge Corte-Real Andrade: to to to the startup world. And I keep saying startups. So we call them innovators, because right now we don't have a hard. There's not some timeframe or specific parameters we set. It's really about companies that would themselves perceive a benefit to to coming into the program, you know, as as a pathway based on their technology and their maturity.
Jorge Corte-Real Andrade: We then have phase it's illustrated here as phase 2. We now call it phase, one of our accelerator, which is where the companies iterate on their solution and are part of an accelerator program where the key piece is to meet people like George and our user community and actually understand what are the problem, what is the problem? And and so that they can then develop that solution with with that in mind, we then have a
Jorge Corte-Real Andrade: shortlisting, a down select process where you can then receive. Follow on funding to continue adaptation.
Jorge Corte-Real Andrade: and then you see the little dotted lines that the different squiggles. There is then a platform with which the nations on a multilateral or a bilateral basis can opt into follow on programs where we can then compete within that mini market for follow-on programs for solutions being developed, they can then go to prototype.
Jorge Corte-Real Andrade: and then, if the prototype is successful and this may sound familiar, if you're familiar with other transactions. If the prototype meets the benchmarks, we then have partner agencies within NATO that do procurement the NATO support and procurement agency and the NATO Communications and information agency. Their procurement regulations permit them to do sole sourcing if you have a competitively sourced prototype. And so, if you hit the button there.
Jorge Corte-Real Andrade: So you see that we have one competition that now it's a very rigorous process. With a 3 step evaluation process. Last year we spent over 10,000 person hours evaluating the applicants to our challenge. Call. Once you have that competitive basis, you then have a pipeline through this competitive dialogue, where you can move potentially all the way to delivery of the solution. So that's the way we structure the program, I think back to George
Jorge Corte-Real Andrade: to to talk a little more about how we then deploy this next slide, please.
Jorge Corte-Real Andrade: So to overcome those hurdles, innovation hurdles, we are developing these drivers. 1st of all, having this approach, this effect-based approach that enhances innovation because it allows to have several solutions to solve one problem instead of having just a specific product for that problem.
Jorge Corte-Real Andrade: We also following this iterative co-development and phase project models, where we bring together the end users with innovation in the co-development of the solutions and also testing and experimentation to minimize the risks involved in this approach.
Jorge Corte-Real Andrade: also scaling through pre-allocated funding for post-pilot projects.
Jorge Corte-Real Andrade: And with that we are creating the conditions to reduce those values of death
Jorge Corte-Real Andrade: and to and to achieve that minimum, viable, available capability which we also call it the initial operation capability.
Jorge Corte-Real Andrade: And from then on we can start working through a structure roadmap for adaptation and enhancement and timelines and objectives adjusted, based on real time feedback. And starting, we can from there we can start using the capability and develop it further. But taking advantage of that window of opportunity
Jorge Corte-Real Andrade: next slide, please.
Jorge Corte-Real Andrade: And with that we are not only reducing those values of debt, but also creating the conditions for modular bidding and rapid procurement to achieve in an agile way that mature capability which is the final operation capability.
Jorge Corte-Real Andrade: because next slide, please.
Jorge Corte-Real Andrade: What we are aiming is at this time frame this rapid adoption in less than 2 years, having 6 months to select potential innovative solutions to demonstrate its potential at the technological side. In more 6 months.
Jorge Corte-Real Andrade: 6 more months, just to mature and to adapt those solutions to the end users needs and click, please.
Jorge Corte-Real Andrade: and to have less than 6 months to have that procurement, those procurement processes, and to integrate those innovative solutions into capabilities
Jorge Corte-Real Andrade: back to you. Yeah, Tom, next slide.
Jorge Corte-Real Andrade: So and the 2 years is is really groundbreaking in the NATO timelines. I do. I think it was really there was an amazing speech. Last week I heard I was at a conference with one of the other NATO agencies, NATO communications and Information agency or Ncia, and they had a legal officer there from Ukraine.
Jorge Corte-Real Andrade: talking about many, many issues really focused on technology and innovation. It was an amazing speech. And one of the takeaways that really struck me is he was talking about the kinds of innovations that are happening.
Jorge Corte-Real Andrade: I would say organically on the battlefield, where, you know, troops that are on the front line. They're not waiting for procurement agencies. But but these days there's a tremendous amount that they can do with their hardware, and especially with software where they're using, you know, generative AI and their own knowledge and actually developing software on their phones
Jorge Corte-Real Andrade: on the battlefield to give them an advantage. And so 2 years is a really great start. I think that the reality of modern warfare is that we need to be prepared for constant iteration on the battlefield. In maybe a way we've never seen. Maybe it's always been the case that soldiers iterate in crisis. But anyway, all of that is to say.
Jorge Corte-Real Andrade: this illustrates in a nutshell exactly how we think about adoption, which is the term NATO uses, for sometimes in the Us. It's transition
Jorge Corte-Real Andrade: or acquisition. But it's that, taking the technology from the lab bench and bringing it into operation.
Jorge Corte-Real Andrade: there was a question in the Q. And A that I can address. Now about what do we mean by challenge formation? What we mean is the challenge is the formal term we use for the problem statements. So what we do at Diana. One of the key expertise we have on staff is technologists and end user experts. They are taking inputs from all kinds of sources.
Jorge Corte-Real Andrade: You know, primarily from allies as well as from our other NATO planning communities and armaments, communities as well as academics and industry. They're taking those inputs and they're developing Consolidated Challenge
Jorge Corte-Real Andrade: calls that have a statement that then goes out to the market. They're up on our website. In fact, you should look for them. Next week we'll have 10 more challenges published, and they then provide the basis on which we get proposals to then iterate. So that is all. What happens in that blue box which is the Diana Challenge program where we bring innovators in.
Jorge Corte-Real Andrade: And you know, as I mentioned earlier, with the squid diagram.
Jorge Corte-Real Andrade: we give them a contract to work on their solution and to engage with our end users to develop their their technology.
Jorge Corte-Real Andrade: And then what you see here is the pathways that we've developed, and Chris is kind enough to have posted that. We wrote a paper about this on exactly how this works from a legal standpoint. But essentially, if you have something that's lower than Trl 7, meaning a prototype, a validated prototype, our communities and the Allies can come and they can opt into a program
Jorge Corte-Real Andrade: which is just a fancy way of saying they can write, follow on contracts
Jorge Corte-Real Andrade: to innovators that meet, you know, needed criteria around. You know what what the technology is and then we then can write a prototype contract where we can set benchmarks for the prototype.
Jorge Corte-Real Andrade: And then if the prototype, or we can also do R&D, followed by prototyping if that makes more sense. And and then, once that technology is at the Trl 7 level where it's a validated prototype. We then have the single source justification, which is basically the possibility of writing a follow on procurement contract without
Jorge Corte-Real Andrade: additional competition, because the competition has already been done. When we publish the problem statement and the bottom line is, we don't need to keep processing the process. We have one process, one pipeline to go from need to delivery, and that you know, the the goal here is to just cut through. It's a cliche, but cut through the the red tape
Jorge Corte-Real Andrade: next slide.
Jorge Corte-Real Andrade: And this is how we are trying to demonstrate how Diana is finding and accelerating deep tech. And when speaking about the tech we're focusing. I'm not sure if you're familiar with this with starting with a Trl 4, it has to be
Jorge Corte-Real Andrade: that solution needs to be based on sound leading science. It's not just starting from scratch, but up to 7, where we have the ability to adapt those solutions to the end users needs.
Jorge Corte-Real Andrade: And also
Jorge Corte-Real Andrade: this is why we're doing this to critical defense, security and resilient challenges involving NATO allies, NATO stakeholders, academia industry innovators from public and private sectors and investors in an agile interaction between the tech push and need pool throughout the innovation process. As Tom highlighted.
Jorge Corte-Real Andrade: creating the conditions to foster shape and integrate innovation at the speed. Some call it at the speed of relevance. Let's call it at the speed of need and superiority, which is that window of opportunity that can be less than those 2 years, but it has to be the one that we can take the most advantage of it. Thank you.
Christopher Yukins / GW Law: Thank you very much, George and Tom. We've got a bunch of questions in the in the chat. If you guys want to respond to that. Those that'd be great, and we'll also have an opportunity hopefully at the end, to have a little bit of discussion. I apologize ahead of time to the audience. We may have to go a little bit over the hour to address these various questions that are coming up. Thank you in advance for your patience.
Christopher Yukins / GW Law: With that.
Jorge Corte-Real Andrade: Yeah. Sorry. Go. Ahead. Yeah.
Christopher Yukins / GW Law: And with Adam is Tom. Is it okay? If I go forward.
Jorge Corte-Real Andrade: Yep. Yep. Sorry. Yep.
Christopher Yukins / GW Law: With that I'm going to turn it over to Gabriela and Lucian to talk about procurement for innovation in the European Union. Thank you both.
Gabriella Racca: And you know, I think innovation in Europe is a very difficult question, and we try to tackle it. But now, with the reform of the directive, we should overcome a lot of issues that we still have to foster innovation. Some of them we have research and development. We have pre-commercial procurement. We have PPI procurement of innovation. But the problem is often, as
Gabriella Racca: as far as I am concerned, the idea of how we define what is innovation, how we push this innovation. So it's very interesting. The the Diana experience that we have just heard, because we then have also linked
Gabriella Racca: the commercial and the pi with the innovation partnership procedure. But it didn't work a lot.
Gabriella Racca: So we have to change. We have to change, maybe the structure of the innovators. So the idea in the drug report of having a kind of common status of the companies that we can define innovators.
Gabriella Racca: This would have a great impact on the reputation on the capacity, on the qualification issues of this company. Because we have to cooperate, we realize that for doing innovation we need the cooperation we have to overcome antagonism. We have to overcome opportunistic behavior. And to do this we have to go in a way when all the process is monitored
Gabriella Racca: and all, the process is a kind of win-win aspect, and not an antagonistic relationship among the 2 parties or the
Gabriella Racca: the group of innovators. The goal could be also to make them cooperate among themselves. And so not only the big players, because often the problem is also to have just big players, and the little company maybe sometimes can't reach the market with their innovation, and they have to sell them to the big players because the intellectual property rights are immediately both. And so this doesn't help them
Gabriella Racca: to grow. So we have a lot of issues. And the next process of reform and Lucien will go on and explain absolutely, deeply what is going on in Europe. But the problems are there. We have a lot have in mind a lot of solution, and we hope also to foster innovation, maybe in developing artificial intelligence issues, to also to foster diplomacy, capacity to tackle the problems, to solve the problems that arise. Thank you very much.
Christopher Yukins / GW Law: There you go!
Gabriella Racca: Lucien to you.
Lucian Cernat: Thank you. Thank you, Gabriella. Thank you, Christopher, for the invitation. I'm very glad to see that we have such a diverse audience, and we have a very, very large spectrum of issues that are highly relevant for today's challenges to to discuss. We have
Lucian Cernat: people in in the front line of procurement and innovation. We have things that will generate the ecosystem that will lead to the objectives that Gabriela mentioned. So I wanted to, just before I begin to reiterate the disclaimer that
Lucian Cernat: Christopher mentioned at the beginning. My opinions and everything I say today are personal views, and they do not necessarily represent an official position by the European Commission.
Lucian Cernat: Now, in the next slide, I just wanted to give you an overview of the the 4 things that I want to briefly cover in my intervention. I would like to zoom out a bit and take a helicopter view on the structural issues that affect Europe nowadays, and we will then zoom into the very specific issues of defense recruitment.
Lucian Cernat: But in order to do that, we'll have to go 1st at the innovation issues that affect the European economies overall, and that in itself creates challenges. Then we will look at the state of the single market in public procurement and then in defense procurement. That's the second item of the intra-european trade flows. How well do we
Lucian Cernat: cooperate with each other! How much we rely on each other! And you will see that there is a lot of scope for improvement.
Lucian Cernat: Then I'm going to look at some of the most recent proposals or policy instruments that we have put forward in the procurement for innovation in Europe, and I will conclude with some thoughts and some open-ended questions for future developments.
Lucian Cernat: Now, when it comes to the druggy and later report the diagnosis of the overall
Lucian Cernat: status of the European economy. Maybe we can move to the next slide.
Lucian Cernat: Can we move to the next slide, please, Chris. Okay, thank you. So, as I said, the starting point was that by many metrics, and I think this was clearly articulated by the 2 reports mentioned the Draghi report, the Leda report, clearly internalized by the top political leaders of the European Union. Europe needs to accelerate innovation.
Lucian Cernat: There was this perception, perhaps sometimes a combination of perception and reality definitely a number of very objective metrics pinpointing to the fact that Europe can do better when it comes to innovation, and there is a certain innovation gap between Europe and the United States on the one hand, and Europe and China. So this is the fundamental political priority that we had in front of us for quite a while.
Lucian Cernat: Then we had the Russian aggression against Ukraine. We had a war at our doorstep, and this became, in a sense also an existential threat. The fact that we might not be able to generate the new technologies that will allow us to live peacefully in Europe and pursue our prosperity in collaboration with countries around the world, made this whole idea of
Lucian Cernat: defense and innovation as as key driver for the European political agenda top of our priorities in Europe.
Lucian Cernat: Now, why? Why is it an issue for for procurement? I think one interesting thought I had when preparing for this talk was that we are essentially here. Addressing one way of
Lucian Cernat: generating innovation, we think procurement can help innovation. Of course we have procurement for innovation. I think the Diana example is excellent where you use procurement as an instrument to stimulate innovation and beyond defense. Procurement policies are one of the most promising, or at least
Lucian Cernat: one of the instruments with the highest expectations in Europe, to deliver also an innovation dividend. We want to instrumentalize procurement for the sake of promoting innovation.
Lucian Cernat: But there is also a reverse causality. If you have a very strong, if you manage one or another to generate a very dynamic innovative economy.
Lucian Cernat: Of course, that will help your defense sector, and that will help procurement. So there is a dual, a 2 way street, a dual interaction between
Lucian Cernat: innovation in of itself, and there are many policies in Europe that are exclusively aimed at promoting innovation R&D throughout the entire lifecycle of innovation. And then we have procurement, which is a separate area which can
Lucian Cernat: participate and stimulate innovation. But it also can be. It can also be the beneficiary of innovation. So what is specific to procurement, what really is missing in a way, what is standing in the way for this very nice story to unfold? It's easy to describe this objective, but then it's much more difficult to put it in practice. So when it comes to
Lucian Cernat: the EU we have insufficient joint action, so there is still a lot of fragmentation among European economies, and we lack economies of scale, and that affects innovation. Many startups cannot really generate the necessary demand side or the venture capitalist that would stimulate their growth. We also have a number of
Lucian Cernat: perhaps unnecessary regulatory requirements, especially on small and medium enterprises, and startups, to to unleash their innovative ideas and to zoom into the defense sector. For instance, we have perhaps even more so, a very fragmented situation in Europe. There are some numbers that I put together. Here, for instance, in 2022, only 18% of expenditure on defense equipment was done in a collaborative manner.
Lucian Cernat: We have agreed, and that was a key objective for the European Defense Agency to reach 35% of joint procurement.
Lucian Cernat: We're still far from that target.
Lucian Cernat: It's not just that we procure things separately in a fragmented way which leads to higher cost, and perhaps also lack of interoperability and the inability to develop common European standards in this area. Look at the number of tanks we have in Europe. I counted by some people there are 12 different tanks. Other people say there are 17 or 18 different tanks depending on
Lucian Cernat: what you call a tank, or a different type of other vehicle armored vehicle, whereas in the Us. I think the Us. Produces only one tank, and it's an excellent one.
Lucian Cernat: So these are the type of issues that we collectively need to address in the near future, and the near future doesn't mean the next 5 years. It may mean much, much quicker, because I think the emergency of the situation we face doesn't wait for so many years ahead to solve these issues which have been systemic for the EU.
Lucian Cernat: And again, we also have, as a result of this fragmentation in a sense, also some over dependency on specific items. If you look at the way in which we procure critical defense items by some metrics, we are overly reliant on the United States. I think 60 to 70% of
Lucian Cernat: procurement for critical defense equipment went to the United States. So this is the background against which
Lucian Cernat: we we need to take action. So I will move to the next slide just to give you some additional figures on
Lucian Cernat: the inability for us to leverage the single market. So I think one of the fundamental advantages, I would dare say the biggest
Lucian Cernat: comparative advantage of European countries is the single market. If we have a functioning single market that allows small and medium enterprises, small countries, large countries to to leverage and create synergies between their economic activities and really generate the type of economic prosperity you have in Europe. There are many estimates that try to put the number on the value of the single market.
Lucian Cernat: Just to give you an example, if we look at the private economy in Europe, so private operators, companies, commercial companies, the trade between European countries among private commercial companies is, roughly, I think, 20% of the European Gdp.
Lucian Cernat: So one out of 5 economic activities that companies undertake is with a client in a different country in Europe. Now, if we look at procurement, where do we stand? We stand on average at 5%.
Lucian Cernat: So if we are to compare the state of the European single procurement market. It's a quarter of the normal single market. So there's a lot of barriers or things that we need to put in place to stimulate cross border procurement because it's 1 of the missing ingredients for us to use
Lucian Cernat: the innovative capacities of European companies and allow them to scale up. I think we have one advantage. That we can turn into a huge asset is the diversity of the European defense ecosystem. We have between 2,000 3,000 small and medium companies that are
Lucian Cernat: really into the defense sector. This is their core business. They are suppliers or producers of defense related equipment, but they're very small, and they need to.
Lucian Cernat: you know, go beyond their their national market. So this is one of the priorities to move beyond the current fragmentation of the European economy, and we will have to monitor this very closely. We will see how quickly we can create this European single market
Lucian Cernat: for procurement.
Lucian Cernat: Now let's move at the current instruments, or the most recent measures that we tried to take at the U to address these challenges on the next slide, please.
Lucian Cernat: So, as I said, when it comes to defense, Europe is really not a newcomer. Of course we're not. If you look from a geopolitical perspective. The EU was not meant to deal with defense issues. And, of course, on many of these issues. On the majority of these issues, Member States are the key players, and we have our international alliances, etc. But it isn't as if at the European level there was a
Lucian Cernat: nothing on procurement or in defense procurement. We had a as part of the defense or part of the Procurement directives. We had one directive specifically on defense. We had a number of initiatives with European funds through the horizon. Europe, for instance, to promote innovative public procurement through different
Lucian Cernat: innovative solutions, we have the procurement, public procurement for innovative solutions. PPI we have pre-commercial procurement. It's another instrument that we try to generate through procurement the creation of a bigger demand for R&D services and for innovative companies. But I think
Lucian Cernat: it's fair to say I think we have to be honest and realize that this was not enough.
Lucian Cernat: and, for that matter, in recent years we really stepped up significantly the attempts to
Lucian Cernat: generate synergies and economies of scale at European level. So, just to give you an example, we have in 2016, we adopted the European Defense Action Plan, which is specifically designed to address the issue I mentioned earlier, where I show you those very low cross-border procurement. This is a specific instrument to generate more cross-border market access for Smes in the defense sector. Just for the anecdote, I think if you were to
Lucian Cernat: ask yourself, well, why is it so difficult for all those 2,000 or 3,000 Smes to operate on a pan-european scale? Well, it's because of the sensitivity of the defense material so unlike
Lucian Cernat: any product that you can put on a truck and move from Italy to Portugal immediately. So you serve your clients without any questions asked. If you are an Sme or a company that does defense material, you cannot move that equipment from Italy to Portugal, or vice versa. You need a license. Even within the European Union you would need a license for that particular equipment, and with all the security clearance. And there's
Lucian Cernat: quite a lot of paperwork justifiably so, I think, in many respects
Lucian Cernat: to to engage in cross-border activities for a company.
Lucian Cernat: While this Defense action plan tries to facilitate that, reduce some of these costs, and also, I think, there could be ways to reduce the procedural impediments for small companies who would like to expand beyond their domestic market.
Lucian Cernat: We also, I think, this is very important. In 2021 we launched a new European Defense Fund.
Lucian Cernat: which is specifically designed for joint R&D and defense procurement and technologies. We have a, I think, quite a sizable budget for the current period over 7 billion euros, and this is combined with 2 other very recent instruments, we have the European Defense Industry reinforcement through Common Procurement Act. Again, very specific instrument that
Lucian Cernat: tries to reduce the cost that may be involved both for the contracting authorities, for the defense agencies, but also for operators. When you have to deal with cross-border consortia, joint procurement, etc. So we have put money aside to incentivize both the demand side on the public
Lucian Cernat: on the defense Contracting agency, but also on the supply side on the companies to overcome some of these costs that are inherent in in a
Lucian Cernat: cross-border procurement and the rearm readiness package. I think this is where we try to deploy all the instruments, including through the European Investment Bank, including through other ways in which we can perhaps use more flexible fiscal criteria to allow Member States to ramp up their spending on
Lucian Cernat: procurement and defense. So these are some of the the
Lucian Cernat: most important and most recent instruments. I'm sure I have not done an exhaustive characterization of all our instruments. As I said, it's been a very active domain in which we took this to the next level, and now I would like to have one more slide, Chris, on
Lucian Cernat: what else we could try to do.
Lucian Cernat: I think one area that perhaps we should learn more from the Us. Or others is how to combine public spending with private attraction of private capital collaborative procurement.
Lucian Cernat: It's, as I said, still lagging behind. The idea of increasing joint cross-border procurement was already one
Lucian Cernat: one objective. But perhaps we could also
Lucian Cernat: use the existing system that we have through central purchasing bodies or through European groupings of territorial cooperation. There are many ways in which we can reduce the inherent barriers of operating cross borders. And then, again, I think what's very important is to see to what extent, in the rearm Europe readiness 2030 package where we can really go to the intended objective of raising around 800 billion
Lucian Cernat: to generate the necessary private capital injection in the European defense sector. And hopefully, when we do all this, we will manage to reach that procurement target of 35% that the European Defense Agency has set for ourselves. And I'm persuaded that if we try to deploy all these instruments, if we manage to
Lucian Cernat: use procurement for innovation. But, as I said at the very beginning, because we are not just active in procurement, the European Union has many instruments to stimulate innovation per se. If we manage to channel these additional elements that generate innovation throughout the overall economy and channel, that into the defense procurement.
Lucian Cernat: then we have a dual effect. We will have the procurement per se that can generate innovation, but overall the innovation instruments and all the activities we try to do through startups scale ups. We recently proposed a new instrument for the
Lucian Cernat: yeah
Lucian Cernat: kind of accelerate scale ups and startups in Europe, even though they may not originally intended for defense, they can be repurposing, and a sort of a reallocation of those breakthrough
Lucian Cernat: to defense. So maybe we will not ask necessarily for a faster horse. We will ask for innovation in general, and depending on what the the bright minds of Europe will generate one day will say, Oh, this can work for defense too.
Lucian Cernat: So I look forward to the next 2 to 3 years. I know that this is not like for tomorrow what armed forces we need in the battlefield yesterday. But I see through this coordinated action at European level great potential for us to be in a better place, as I said in a couple of years. Thank you.
Christopher Yukins / GW Law: Thank you very much.
Christopher Yukins / GW Law: The the references that legends included in this slide are included in the on the program page of public procurementinternational.com
Christopher Yukins / GW Law: with that I'm going to turn it over to Sonia to talk about the the Us. Experience. Welcome, Sonia.
Sonia Tabriz: Thank you. Hi, everyone. And with many thanks to my fellow presenters for their perspectives. Today I will be speaking with you about procurement for innovation in the United States.
Sonia Tabriz: By way of background, I'm a partner in the government contracts and National Security Practice group of the law firm, Arnold and porter. I represent companies that do work with the Us. Government across industries.
Sonia Tabriz: As you may know, traditional procurement contracts in the Us. Have long been governed by a robust set of regulations known as the Federal acquisition regulation, or the far and agencies can maintain their own regulations that supplement the far. For instance, traditional procurement contracts between Industry and the Department of Defense or Dod are also governed by the Dfars. The Defense Federal Acquisition Regulation supplement.
Sonia Tabriz: My work is comprised of advising companies that enter into these heavily regulated traditional procurement contracts with various Us. Government agencies.
Sonia Tabriz: I also represent companies that do work for the Us. Government in nontraditional ways, which is where we want to focus today.
Sonia Tabriz: These nontraditional ways of contracting are less regulated and intended to enable new entrants into the Federal marketplace in the United States to deliver innovative solutions to the Government, most often to the Department of Defense and Intelligence agencies that are always seeking cutting edge agile technologies to support our national interest.
Sonia Tabriz: I'll offer one example, and then we can launch into the slides here the Us. Government's recent efforts to domesticate semiconductor research and manufacturing through the issuance of what we have called direct funding and loan agreements. Pursuant to a statutory authority called the Chips Act.
Sonia Tabriz: These agreements constitute what we will refer to, and is what Chris referred to at the top of this presentation is other transaction, authority, agreements, or otas.
Sonia Tabriz: This is one category of nontraditional contract I will touch on here in a few minutes. The other category we will discuss is commercial solutions, openings, or csos. We we like our acronyms here in the States. So Otas and Csos, you will hear those acronyms many times as they are taking center stage in the recent discourse around procurement for innovation in the Us.
Sonia Tabriz: And while the statutory authorities for these nontraditional contracting methods have been in place for some time, recent efforts by stakeholders across the Us. Government have reenergized this discussion, driving significant reform to the way the Us. Government buys goods and services. Next slide, please.
Sonia Tabriz: The forged act is a piece of litigation that reflects these recent efforts. It was introduced by Senator Wicker, called the Fostering Reform and Government Efficiency in Defense Act. It's a bill that proposes significant changes to defense acquisition.
Sonia Tabriz: Senator Wicker, in his briefing to President Trump, called out the onerous regulations that apply to traditional Dod procurement, quote burdensome rules that quote keep startups from competing for military contracts, and specifically advocates for Dod to adopt private sector innovation to improve on the present state.
Sonia Tabriz: The bill proposes steps, including repealing numerous existing laws to streamline the acquisition process, deregulating defense, acquisition as to nontraditional contractors, introducing new pricing models and enhancing non-traditional methods of contracting and so forth.
Sonia Tabriz: and with Senator Wicker as the Chairman of the Senate Armed Services Committee. The Forged Act is poised to inform the forthcoming
Sonia Tabriz: National Defense Authorization Act for the upcoming fiscal year, which is the Us. Federal law passed each year by Congress as part of the Us. Defense budget process
Sonia Tabriz: next slide, please
Sonia Tabriz: another Us. Government stakeholder. So earlier this year, Secretary of Defense, Keith hexeth, carried forward this theme of reform in a memorandum to Dod, and as he writes in that memorandum. It is a top priority for the Department of Defense to reform its acquisition processes in order to acquire, deliver and iterate on our weapons and business systems, including software at speed and scale for our warfighter.
Sonia Tabriz: Recognizing that software and continued innovation and iterating on software is at the core of every weapon and supporting system
Sonia Tabriz: and after raising concerns regarding Dod's failure to reframe its acquisition strategies from a hardware centric approach to software secretary hexeth directed all dod components to adopt the software acquisition pathway as the preferred pathway for software development and components.
Sonia Tabriz: and further directed the use of
Sonia Tabriz: commercial solutions, openings, those Csos and other transaction authority agreements, Otas.
Sonia Tabriz: as the default, solicitation, and award approaches for acquiring capabilities. So again, we hear references to concern regarding traditional procurement methods in the context here of iterating on or innovating new software and a prioritization of nontraditional methods. Csos and Otas, as a way to address those challenges.
Sonia Tabriz: And on the next slide.
Sonia Tabriz: we reflect graphically the software acquisition pathway or Swp, which is intended to reduce some of the process and requirements associated with traditional procurement to facilitate rapid and iterative delivery of software capability to the government end user
Sonia Tabriz: next slide, please.
Sonia Tabriz: As those following recent developments in the United States know, there has also been a flurry of activity out of the administration surrounding procurement.
Sonia Tabriz: This administration has issued numerous executive orders over the past few months, as well as other directives, and many of those call for major changes in the way that the Us. Government buys goods and services.
Sonia Tabriz: Among other things, these Eos call for the consolidation of domestic procurement of common goods and services under a single agency. Specifically, the General Services Administration or the Gsa.
Sonia Tabriz: Which will also serve as the executive agent for all Government-wide acquisition contracts for information technology.
Sonia Tabriz: The Eos also call for broad deregulation, including of the Far and the Dfars, with an overhaul of the far pending and forthcoming this fall.
Sonia Tabriz: I know that, Chris, you're you're following that closely and and issuing updates as as the overhaul progresses
Sonia Tabriz: and relevantly here, the modernizing defense acquisitions and spurring innovation in the defense. Industrial, base executive order again calls out the quote antiquated processes presently governing defense, acquisition, and calls for quote a 1st preference for commercial solutions or Csos, and a general preference for Otas and other streamlined pathways. For acquisition.
Sonia Tabriz: With this we see the trump administration reflecting the same focus on welcoming new entrants to the Federal marketplace. These include startups in the tech space, for instance, or other commercial enterprises that have not historically been motivated to invest in compliance with a broad regulatory framework to sell to the Us. Government.
Sonia Tabriz: We also see the trump administration focused on maximizing the speed with which dod components can acquire what they need by prioritizing these fast track nontraditional methods for acquisition.
Sonia Tabriz: innovative methods really to acquire innovation.
Sonia Tabriz: Next slide, please
Sonia Tabriz: with that backdrop in terms of the recent developments here in the States. I want to spend a few minutes talking through Csos and Otas in a more practical manner, as you will see, both are rooted in dod statutory
Sonia Tabriz: authority. Csos are focused on acquisition of innovative commercial products and commercial services, and what constitutes innovative in this context is important. It is defined as a technology process or method that is new as of the date of submission of a proposal to a Cso.
Sonia Tabriz: Csos are general solicitations that
Sonia Tabriz: set out an agency's interest for an individual requirement or for broadly defined areas of interest.
Sonia Tabriz: Csos, in that regard tend to be quite short and high level in articulating the challenge that is being confronted by Dod and inviting solutions.
Sonia Tabriz: Unlike a traditional contract or far based procurement, which often calls for a robust multi-volume proposal submission specific to very particular and nuanced solicitation requirements. The Cso. May call for a brief white paper just a few pages as an initial round to enable the Government to assess those available solutions. In response to the problem statement.
Sonia Tabriz: A Cso. Shall result in a fixed price contract with the Us. Government, which places pricing overrun risks with the contractor, and can either be the sort of starting point for a far based contract with streamlined commercial terms, or an Ota
Sonia Tabriz: Csos are posted on a government government wide point of entry, like the system for award management, which is where traditional procurement opportunities are posted, and Csos can also be posted through periodicals to really target the new entrants in industry.
Sonia Tabriz: Moving briefly to Otas, Otas can be used for research projects or prototype projects with the potential for a production follow on this production, follow on concept is the parallel to what Tom was speaking on in the context of Diana's challenge program
Sonia Tabriz: that you know the the project culminating in a sole source, justification and award as part of procurement of a prototype. As long as there is competition underlying the earlier prototype award. This is very similar to the model. Here in the Us.
Sonia Tabriz: Otas are contracts. They are not far based procurement contracts. In other words, they are not governed by the far that ors body of regulation that the Government believes, and I think rightly so, has deterred the involvement
Sonia Tabriz: of new entrants.
Sonia Tabriz: Into the Federal marketplace the majority of Otas are for prototype projects so proof of concept, model or process, including business process, pilot or novel application of commercial technologies. So on.
Sonia Tabriz: In the Ota context, we see the desire for new entrants called out even more expressly at least one non-traditional defense contractor has to participate to a significant extent to be eligible for a prototype project.
Sonia Tabriz: Otherwise a traditional defense contractor of the sort that is typically undertaking. For instance, far based procurement contracts must contribute or invest at least a 3rd or more of the cost share of the project or the government must issue a waiver to proceed. This harkens back, I think, to Lucien's reference to driving private capital investment, and is a way for the Government to do so in order to
Sonia Tabriz: enable traditional defense contractors to gain access to these Ota opportunities, Otas can be awarded directly by the Department of Defense, or through what Dod has established as a consortia model consortia? Are these independent organizations that maintain a membership base of potential contractors focused on a particular
Sonia Tabriz: typically tech or science area and the consortia effectively act as a go between the government and its problem statement and the members developing white papers and the like for selection.
Sonia Tabriz: And while consortia have historically received the majority of Ota obligations here in the Us. There is limited transparency regarding their process, which adds another layer to this nontraditional though increasingly popular, method of contracting through Ota.
Sonia Tabriz: Note that because the far does not apply to Otas, there are, as I mentioned, no regulations that mandate inclusion of various terms and conditions into the contract, which is unlike the traditional model Otas are known for affording both the government and industry more flexibility in negotiations, including areas like IP, which, of course, is of significant interest to companies investing heavily in development.
Sonia Tabriz: though we have certainly seen Otas historically borrow from the far, and defars provisions over time.
Sonia Tabriz: So that was a lot of information. But if you take anything away from our segment on procurement for innovation in the United States. I hope it is that this is an era of significant change for our system. With rapid streamlining and deregulation of traditional procurement methods and a prioritization of nontraditional methods to increase the Us. Government's access to innovative solutions in a more commercially minded way. And with that I will turn it back to our co-hosts.
Christopher Yukins / GW Law: Thanks very much. That was an excellent summary. Thank you very, very much. With that. We're a little over time. So, Dan, I'm afraid we're only going to be able to handle one or 2 questions during our group discussion here, I wonder? Based on the we've got a ton of questions in through the chat over the session. I wonder if you could identify one or 2 questions you'd like to ask to the panel, and we can wrap up after that.
Daniel Schoeni: Yeah. Chris, thank you. Yeah. A number of great questions. I'm going to point a personal privilege. A Gw. Alum and friend of the program, Sandeep Verma from India, who is the additional Chief Secretary to the Government of Rajasthan? Just 81 million people there had a great question that he posted right at the very end, and I'll read from the chat directly it says
Daniel Schoeni: so. While Ota based contracts are not traditional, far based contracts. Csos look like traditional procurement
Daniel Schoeni: contracts concluded under far using a newer method of procurement. Apart from competitive negotiations of unsolicited proposals, methods that have always been available under far for procurement of innovative solutions. And there's a question mark at the end there, and that's directed to the whole panel. And that's a very sophisticated question. So I hope one or more of our panel might be able to jump in.
Christopher Yukins / GW Law: Sonia, would you like to tackle that.
Sonia Tabriz: Sure.
Sonia Tabriz: I think of Csos as a sort of streamlined, simplified, more flexible process for gathering
Sonia Tabriz: for lack of better word, innovative ideas in response to a very general problem statement. So I actually spent some time on sam.gov. Looking at some of the Cso. Postings which I hadn't done historically, as you might imagine. I spent a lot of time on sam.gov to draft bid protests, challenging traditional procurement contracts.
Sonia Tabriz: And when I look at Csos. The solicitation can be as few as like 5 or 6 pages, very high, level, and will call for a very high, level white paper, and once a white paper is selected, or a series of white papers are selected to progress to the next phase of the cso process.
Sonia Tabriz: Then you see some of the elements of a traditional, far based solicitation come in, but even then, at a much higher level, the offerors are asked to submit additional details regarding their technology, their IP assertions and pricing, and from there, as I understand it, reading some of these samples, the government and industry have an opportunity to build an agreement. That is the output of that cso and white paper.
Sonia Tabriz: or sort of summary solution submission.
Sonia Tabriz: And the reason why I want to focus on that latter point is the output of a Cso can be far based. It can be a far based contract with commercial products or services term.
Sonia Tabriz: It also can be, you know, starting from a blank piece of paper styled as an other transaction authority, agreement, and something of a far more different type of output than you would see in a sort of traditional, far based
Sonia Tabriz: method of contracting. I hope that's helpful. But that's how I think of Csos relative to sort of traditional, far based methodologies.
Christopher Yukins / GW Law: Thanks very much. Sonia Dan.
Daniel Schoeni: Just one additional question that we might be able to squeeze in, thanks to Paige Neiswanger from Tampa, Florida, who works at national security technology accelerator. She bookended our conversation with 2 great questions. But I'll just take the second one here at the very end, she said. The Us. Microelectronic comments, backed by an Ota. Mirrors, Diana and structure. Regional hubs, dual use, focus and commercial engagement.
Daniel Schoeni: Are these efforts to align Diana EU frame? Are there efforts to align Diana EU frameworks. And us Ota based models like Commons to streamline transatlantic innovation and procurement so great question.
Daniel Schoeni: And I'll throw that at the panel as a whole.
Christopher Yukins / GW Law: George, would you like to address that? I know that Thomas talked about the parallels between the other and already this hour.
Jorge Corte-Real Andrade: Indeed, our regulation is based on both the the best solutions that we've followed from the Us. And and the EU. Then, because we try to accommodate those solutions in order to to bring the most, the most innovative solutions. Then, just to to sum up our our.
Jorge Corte-Real Andrade: how are competitions are based on the and both the relations from the Us. And the EU.
Christopher Yukins / GW Law: Thank you very much. And as we put together the article that Dan very helpfully posted in the chat as we put together that article we constantly had to refer to reference points both in the European Union's law, Member States laws
Christopher Yukins / GW Law: and at the European Union level and at the United States in the United States, because a combined hybrid solution, like NATO Diana, has to accommodate those laws on both sides of the Atlantic so legally, it's a very interesting puzzle, and I think, George, your colleagues at NATO Diana have really done an outstanding job putting that together.
Christopher Yukins / GW Law: Dan, I think we're going to have to close out because we're running out of time. I do want to say, I think this has been a really really successful program, and I'm very grateful for Dan and for Gabriella for helping host it. I'm very proud that we are able to draw together these discussions on both sides of the Atlantic to make procurement work better for innovation both inside and outside the defense sphere.
Christopher Yukins / GW Law: This is a very important, obviously a very, very important issue on both sides of the Atlantic. I want a special special welcome to our colleagues from Ukraine and from the Baltics.
Christopher Yukins / GW Law: from Finland, Sweden, and Norway who joined today's program. This is a, this is a very key, hot.
Christopher Yukins / GW Law: difficult issue. And we appreciate all your input. So thank you all and look for the recording later today. Take care and see you. Bye-bye.