Global Hawk Systems Engineering Case Study

Other Transactions Authority (OTA). The HAE program had been classified as a Pilot Acquisition Program under Public Law 101-189, Section 2371, Title 10, United States Code (USC), and under Section 845 of the 1994 National Defense Authorization Act (NDAA) (Public Law 103-160). This not only released the contractor from complying with Military Specifications (MIL-SPECs) but also released them from a series of Government rules and regulations, such as the Federal Acquisition Regulations (FARs); Defense FAR Supplement; Armed Services Procurement Act; Competition in Contracting Act; and Truth in Negotiations Act. It also freed the contractor from the requirement to undergo Defense Contract Audit Agency (DCAA) audits, thus allowing the use of commercial auditors. In essence, all procurement system regulations were non-applicable. However, this waiver was initially granted only through Phase II. Extension of the waiver into Phase III was not a given and thus represented a program risk. If the program transitioned into Phase IV, there was a good chance that the program would return to the “standard” acquisition process.

Section 845 OTA allowed DARPA to operate under an “agreement” instead of a contract. Two key differences between a typical contract and an “agreement” are defined in Article IV and VII. For an “agreement,” Article IV, Payable Event Schedule, permits the parties to agree to changes in payable milestones based on program events, and Article VII, Disputes, designates the DARPA director as the ultimate arbiter of disputes. Section 845 OTA also transferred significant management and design responsibility to the contractor.