Keeping Chinese Rinding Out of U.S. Biotech.

• Author: Du, Eric
• Position: VIEWPOINT

Biotechnology is one of the Defense Department's top modernization priorities, and it is often considered to be the industry of the future.

Likewise, China is aggressively competing for primacy in this sector by pouring more than $ 100 billion into its domestic enterprises and foreign investments. In Beijing's "Military-Civil Fusion Strategy," the People's Liberation Army has the lead role in exploiting and weaponizing biotechnology for its offensive capabilities, including "specific ethnic genetic attacks."

How can the U.S. government maintain biotechnological preeminence and leverage the world's most innovative private sector? Operation Warp Speed may provide a clue. It mobilized national biotech resources to rapidly acquire and deploy COVID-19 vaccines. Its success can be attributed to many factors.

One that needs special attention is the expanded use of other transaction authority acquisition agreements. About 80 percent of Operation Warp Speed's funding was obligated through OTAs, with the rest using more traditional Federal Acquisition Regulations-based contracts.

Are OTAs the best way for the department to acquire biotech capabilities compared to traditional acquisition pathways? The short answer is, "yes--for now." However, there are more strategic policy tools that need to be implemented for full benefit.

What exactly is the other transaction authority? OTA is an authority given to the government in 10 USC 2371b to carry out certain research, prototype and production projects. They are neither contracts, grants, nor cooperative agreements, and they are not subject to many rules prescribed under FAR. OTAs allow the government to incorporate more flexible and business-oriented terms that can reflect the commercial world's best practices, which theoretically should make these programs more agile and efficient compared to traditional acquisitions.

Though originated in the 1950s, the use of OTA has only started to increase since the passage of the 2015 National Defense Authorization Act, which permanentized the Defense Department's other transaction authority, and modified the definition of nontraditional defense contractor.

A major advantage of OTA is that it encourages the department to work with nontraditional defense contractors. That includes most of the companies in emerging technology sectors, such as biotech. OTAs also allow for non-competitive, follow-on production contracts with the department.

One major challenge the commercial industry has with the government during the acquisition process is the ownership of intellectual property and various rights for the government to march in and intervene, as granted in the Bayh-Dole Act. OTAs often address it by eliminating or reducing provisions of Bayh-Dole, thus incentivizing companies to make high-risk...