2. Noontime Seminar: DoD Research Funding Processes John Albrecht 15 April 2014

3. Noontime Seminar: DoD Research Funding Processes John Albrecht 15 April 2014

4. DoD Major Appropriation Categories APPN CAT FUNDING POLICY RDT & E PROC (SCN) O & M MILPER MILCON SCOPE RDT&E Activities & Expenses End items >= $100K system unit cost, All Centrally managed items, Initial Spares, Labor for certain production-related functions (e.g., item assembly, quality assurance) Replenishment Spares, Fuel, Civilian Salaries, Construction Projects < $750K, Travel, Non- centrally managed end items < $100K system unit cost Military Personnel Expenses Construction Projects >= $750K INCREMENTAL FULL ANNUAL FULL

5. DoD Appropriation Structure Projects RDT&E Budget Activity Program Elements Procurement Budget Activity Line Item Sub Activity MILPER Budget Activity Group Sub Activity O&M Activity Group Budget Activity Project MILCON Budget Activity Group

6. DoD Appropriation Structure Projects RDT&E Budget Activity Program Elements Procurement Budget Activity Line Item Sub Activity MILPER Budget Activity Group Sub Activity O&M Activity Group Budget Activity Project MILCON Budget Activity Group

7. DoD Research Funding Sources 6.1, 6.2, 6.3 (basic, applied, and demonstration level research) – 6.1 is the closest DoD equivalent to NSF-style funding (ONR, AFOSR, ARO, DARPA, …) – primarily grants – 6.2 typically supports “big program” winners (e.g. microelectronics programs taking devices to circuits) or first attempts at applications. Spans the services (AFRL, ONR, DARPA, ARL, …) May be declared fundamental campus research OR come with restrictions (mandatory pre-pub review, etc) Often is ITAR and otherwise export controlled Solicitations (such as BAAs) will contain language discussing how these are handled and the contracting officers will adhere – 6.3 is advanced development money = functional prototypes, heavy deliverables, transition partners to the industrial base (ONR, DARPA, MDA, AFRL, NAVSEA, ARL (long list)) By law, all 6.3 money from DoD comes with restrictive clauses that cannot be removed by the contracting officer Very likely to be export controlled, at a minimum

8. DoD Research Funding Sources 6.1, 6.2, 6.3 (basic, applied, and demonstration level research) – 6.1 is the closest DoD equivalent to NSF-style funding (ONR, AFOSR, ARO, DARPA, …) – primarily grants – 6.2 typically supports “big program” winners (e.g. microelectronics programs taking devices to circuits) or first attempts at applications. Spans the services (AFRL, ONR, DARPA, ARL, …) May be declared fundamental campus research OR come with restrictions (mandatory pre-pub review, etc) Often is ITAR and otherwise export controlled Solicitations (such as BAAs) will contain language discussing how these are handled and the contracting officers will adhere – 6.3 is advanced development money = functional prototypes, heavy deliverables, transition partners to the industrial base (ONR, DARPA, MDA, AFRL, NAVSEA, ARL (long list)) By law, all 6.3 money from DoD comes with restrictive clauses that cannot be removed by the contracting officer Very likely to be export controlled, at a minimum

9. DoD Appropriation Structure Projects RDT&E Budget Activity Program Elements Procurement Budget Activity Line Item Sub Activity MILPER Budget Activity Group Sub Activity O&M Activity Group Budget Activity Project MILCON Budget Activity Group

10. Additional Research Funding Sources SBIR/STTR – Small Business Innovative Research, Small business Technology TransfeR – SBIR/STTR has its own opportunity website outside of fed biz ops – SBIR has to be >50% at the business – STTR can have large university components – Phase 2s are subject to funds availability – SBIR is not appropriated, it is an unfunded mandate that is a percentage tax internal to every agency. (It comes out of your 6.1 money too!) – SBIR has favorable IP rules that do not enforce govt use claims and restrictions – SBIR/STTR topics can and do come with export control restrictions Non-traditional Examples: Director’s Innovation Initiative (NRO), Joint DoD programs with other agencies, Manufacturing Initiatives

11. Other variations of funding… MURI – Multidisciplinary University Research Initiative – Each service’s 6.1 unit proposes topics (annually) – Office of the Secretary of Defense chooses – 3 year base, 2 year option at ~$1.5M/year – Often large teams – Does not come out of the base budget of the unit Internal forms of MURI-like activity – Example: AFOSR BRI topics – Large programs formed within an agency to reward/punish program quality and execution Congressional Insert Items – Significant change over last decade  often are forcibly inserted as unfunded mandates (core budgets have to be re-worked to accommodate them) Result: Your lab friends my find them onerous. – Scrutiny on execution has become intense from service leaders Labs – Caution: Labs influence more money than they spend on external research (NRL, AFRL are primarily using 6.2 to service salaries at this point). – No external 6.1 funding, but they can have great influence.

12. Other variations of funding… MURI – Multidisciplinary University Research Initiative – Each service’s 6.1 unit proposes topics (annually) – Office of the Secretary of Defense chooses – 3 year base, 2 year option at ~$1.5M/year – Often large teams – Does not come out of the base budget of the unit Internal forms of MURI-like activity – Example: AFOSR BRI topics – Large programs formed within an agency to reward/punish program quality and execution Congressional Insert Items – Significant change over last decade  often are forcibly inserted as unfunded mandates (core budgets have to be re-worked to accommodate them) Result: Your lab friends my find them onerous. – Scrutiny on execution has become intense from service leaders Labs – Caution: Labs influence more money than they spend on external research (NRL, AFRL are primarily using 6.2 to service salaries at this point). – No external 6.1 funding, but they can have great influence.

13. Where do I look? Federal Business Opportunities – https://www.fbo.gov/ https://www.fbo.gov/ – https://www.sbir.gov/ https://www.sbir.gov/ – Proposer’s Day announcements – Proposal Abstract requests (Do This. Always.) Agency websites are typically very responsive about posting new solicitations or funding policies and procedures Existing programs – Existing programs have money. – Large 6.2 programs generate basic research topics – Stay current with the literature and any public program reviews in your area. There are dedicated conferences to show off DoD programs

14. Key Elements of DoD Proposals -1 Read the solicitation carefully and completely – Technical specifications and any mandatory thresholds – Proposal structure expectations and preparation instructions – FAQs are posted, public forums are often held – What constitutes technical compliance Complete solutions only? Are any technical approaches specifically excluded? Technical innovation and responsiveness to the solicitation – Does the proposed solution break down the technical challenges and systematically address them? – Does the proposal demonstrate a sound understanding of the current state of practice? – Is there existing data to support the claimed research path?

15. Key Elements of DoD Proposals Clear SOW that has tasks supporting technical solution – Do the tasks match the proposed solutions to the key technical challenges? – Are the resources clearly identified (people/time/money) and adequate? Do they match the cost proposal and schedule? – Are the tasks aligned with the schedule (critical path, long-lead items)? – Recommend marking SOW on a task basis if there is a mix of fundamental research and export controlled or restricted work Schedule and project structure – If you are bidding a 6.2 project, install Microsoft Project and plot a gantt chart – Does it match the SOW and cost volume of the proposal exactly? Cost Proposals – Is the formatting compliant with the solicitation (non-compliance = rejection) – Does it match up with the SOW and Schedule – Are the sub-contractor proposals in place and compliant – Is it realistic? DoD proposals that are incorrectly over/under budgeted in time/money are strongly downgraded. – Watch out for equipment (computers are not equipment, they are IT within DoD)

16. So you won, now what? Be diligent during contract negotiation – Answer requests from OSP or your program manager promptly and accurately (the most dangerous word in the English language is “send”) – Primary clarification questions are on budgets – Fill out ECORRW (export control) forms early Include the proposal and solicitation if at all possible Contact me before submitting if you need to check the database for potential controls – don’t make up answers or allow the export control office to interpret for you. Expect that any restrictions in the solicitation will and can apply to your work (CDAs too) The government can change the award instrument – E.g., Grant Awards cannot contain physical deliverables

17. Post-Award Get an account. If there are lengthy negotiations, request a hardship account (Dr. Chatti). – Most 6.1 DoD money authorizes 90 days pre-award expenditure within certain budget limitations – Understand your post-award accounting procedures Is the DoD expecting montly invoicing (MSU default is quarterly)? Are you allowed to change the labor mix under the rules of your award? What is your sponsor’s policy on no-cost extensions? Are you incrementally funded or milestone based? Execution, execution, execution. – DoD funding rewards those that follow the contract plan – There have been movements to severely limit NCEs

18. Budget Execution DFAS Region Finance Center Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Procurement Request Project Order MIPR Commitment Color Year Amount Certified PR Negotiation Contract (Obligation) Record of Obligation Contract Oversight Certified Invoice / DD 250 Check / EFT (Expenditure) Voucher Summary Cash (Outlay) Check Expenditure Reporting System Certification Invoice DD 250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 If this doesn’t happen, you didn’t spend the money.

19. Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Commitment C-Color Y-Year A-Amount

20. Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Obligation

21. Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Invoice Starts work Incurs cost

22. Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Expenditure Check

23. Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Expenditure Reporting System

24. Budget Execution DFAS Region Finance Center US Treasury DFAS Disbursing / Finance Office ACO Administrative Contract Officer Contractor PCO Procuring Contract Officer PMO Program Management Office Congress OMB OSD Comptroller MAJCOM/PEO Comptroller Service Comptroller Outlay Cash

25. Summary Understand the DoD opportunities in your technical area (agencies, timing, color of money) Write clean proposals – Technical responsiveness – Cost and schedule – SOW development (especially for contracts) Understand any restrictions that can be expected for this research – Do not assume they will go away in negotiation Vigorously manage your post award execution – The DoD does reward good behavior in this area – Tell your program manager about know execution problems before they become acute