The Role of AI in Modern DoD Contracting with Mike Clark

Ryan: [00:00:00] Hey, my name is Ryan Connell. I'm here with the, uh, Chief Digital and Artificial Intelligence Office and joined today with, uh, Michael Clark from Air Force. Mike, how you doing? Doing well. How are you doing, bud? Okay. I complain, appreciate you being, uh, my first guinea pig as I take over the podcast here, excited to talk today, but you and I were just joking before we hit record about, uh, the fact that this is going to be probably the same line of conversation that we've had for the last 15 years, just recorded this time.

Mike: Yeah, exactly. So why don't you let me know where you want to go? I love talking about some of these topics with you. Problem solving is super fun. So you always come with a really challenging issue. So fortunately it's [00:01:00] never boring. So awesome. Uh, 

Ryan: you want to just quick intro, what you do, where you work, all that stuff.

Mike: Yeah, sure. So I'm at asking my force based contracting officer for about 16, I'm currently a branch chief at Kill Chain Integration Branch in Special Programs Division. We're a lifecycle management center at Hanscom. Prior to working in Kill Chain Integration Branch, I was a price analyst where we worked together.

So, I've been in Kill Chain Integration for about seven years and then I spent about seven years in pricing. Some of that time was with you, so. I spent a lot of time in, in offices where I really enjoy what I'm working on. Probably overstay my welcome there because I'm just having so much fun and feel like I'm having a pretty good impact.

So that's a little bit about me. Awesome. I appreciate it. 

Ryan: Yeah. It was a pleasure to work with Ian Pricing. I recorded a episode just kind of kicking off the transition from Bonnie to me. And, uh, one of the things we talked about was my expectations and things that I might [00:02:00] steer with this podcast. I said, I think there's going to be some high level things, but I also think that We're going to absolutely nerd out.

And I think that's what today's going to be a little bit, but I'm excited to do it. I'm excited to get into the, the nerdy part of contracting and problem solving. So, you know, let's just kind of dive in. I know obviously CDAO were involved with like artificial intelligence, machine learning, data, digital, um, those types of applications, you know, we just got our first contract awarded organically prior to that it was, you know, externally uh, assisted acquisition type things.

And I I'm constantly being challenged with. Contracting standards and these kinds of things that we should come out enterprise wide. And, and I'm constantly reflecting on like, I should just call Mike. Cause like, why am I going to sit here and do this where I can just like talk to someone who has awarded a lot of contracts for these types of technologies.

So let's just start there. Like kind of maybe any experiences you have with AI contracting or contracting for AI, I should say, and lessons learned, any data rights types of things you want to talk about. Just want to pick your 

Mike: brain there. So, you know, AI is super popular thing right now. Everybody's, you know, [00:03:00] generative AI.

So there's a lot of working groups. How do we buy AI? How do we do it responsibly? How do we know what we're buying? I've always sort of taken that approach to try and just, you know, understand what it is that you're trying to buy ultimately. Right. So most people that come to me in my, over in special programs division, don't come to me and say, Hey, can I get this like AI capability?

They just say, Hey, I have this, you know, I don't have accurate intel here. I don't understand what, you know, there's something going on over here. We have swaths and swaths of data. How do I figure out what's going on there? And so generally that leads me to AI sort of capabilities, which is, I think, you know, just a natural evolution for me.

You know, it's a sort of space that I'm just generally interested in. We used to call it, you know, big data analytics, or, you know, they always talk about big data, which has sort of, you know, you can define it how you want, and then applying some sort of machine learning algorithms to that. Or artificial intelligence, greater [00:04:00] artificial intelligence to it out of necessity.

Right. It's not like, like we didn't set out to say, can I buy AI? We set out to, you know, help a lot of what I've worked on has been bespoke solutions for a particular unit somewhere on the globe looking for something. And so we do your normal problem solving, start off with, uh, brainstorming with the user.

So we got. We have our, we have a pretty small IPT, you know, it's a contracting officer, program manager, engineer, maybe, maybe one other person in there. Sit down with the customer and with potential vendor, and then just talk about like, how might you go about solving this problem? And so it goes generally left at the door.

And then you walk in and just start talking about like, Hey, what's your mission? What are you working on? How is it that we can help? And I generally find it a lot easier for me to learn about, you know, the guys in the field and what their missions are enough to figure out how to acquire them something, then it would be for them to try and figure out how [00:05:00] to do our jobs in acquisitions when they're like, you know, firing bullets or whatever it is that they do.

Right. So in doing that, part of it is understanding your craft, knowing contracting, understanding the mission that you're trying to support. Right. And then also, you know, being aware of the latest breaking technology. So you can just figure out how to like bring all of these solutions. To those people in the field and then, and then we start to develop our strategy and how we're going to acquire that sort of thing, right?

So there's some relationship building that occurs there because you're out there meeting with these people go out to their facility generally is a lot easier. You know, it shows a lot more commitment. I've found. And then once you're showing this, this interest to really trying to figure out how to get them what they something that they sorely need.

And you can build up some trust that perhaps you can do it quickly if you're willing to consider anything. So I generally start with the avoidance of the word no, I would say, right? [00:06:00] So, you know, I perhaps, I'm not going to be able to do it exactly how, you know, you can't just go and just buy whatever you want right off the shelf.

Rid the O. D. Uh, We'll find a way, we'll get as close to, you know, being able to just swipe your card and having a company delivered two days later. We can't get that close, okay, but we can, you know, we can get really creative. We'll be open to using any avenue that's available to us. So Congress has really been pushing OTAs lately.

That's fantastic. But OTAs aren't the only way to procure things, right? CSOs are fantastic. BAAs are fantastic, but everything has its limitations. So, so it's a really challenging job. You got to stay up to speed on late breaking technology and also the evolution of what we're allowed to do, which acquisition pathways we can take to be able to go and procure those sorts of things.

And some things fall out of favor, you know, when you and I worked together, Ryan, T and M was, I mean, you didn't say T and M, right? So the pendulum swung the other way. When I first started, you still always talk [00:07:00] about pendulums, you know, like, Oh, everything's FFP. And then everything's CPF. There's so many different pendulums that swing, you know, and so you just kind of you got to kind of read Am I gonna get buy in for this sort of thing?

I mean, I remember working with another colleague of ours, Daddy Kent Where TNM was the approach that probably would have been in our best interest, but you're talking about a 7 billion thing. And at that time it was not in favor. So in the approval process, they're like, I understand that probably is the best.

It's not going to be approved. It's out of favor. And so we never have the ability to just walk away, right? We never have the ability to tell the user, you're not going to get that. You know, I can't help you at all. So you just got to find another way. My favorite part about it is just critically thinking, like, let me come up with a new solution.

Like, you know, and you mentioned how we talk all the time. That's, you know, having a network of people that you can reach out to and just bounce things off. Sometimes there's plenty of times when I've probably thrown some pretty crazy ideas that are, you know, most people are not going to [00:08:00] believe that's within the art of the possible, like either it's not a smart move or it's You know, we're not going to get a buy in to go and do that sort of thing.

You know, sometimes it is just stupid, right? But you got to throw all ideas out there. And when you leave, he goes at the door, that stuff's easy, you know? Cause now you're not worried about trying to impress. It's not about I've worked on this. So, you know, because I said it, let's do it. You know, I generally try and just problem solve with people that I know are going to show up to that discussion.

And then, you know, they're not judging what you know, right? It's just, everyone is hyper focused. On how to deliver the mission capability to the user as fast as possible and with an acceptable budget. 

Ryan: Yeah. Uh, awesome. I mean, you said so many nuggets that I want to unpack, but the one that kind of resonated with me the most is kind of at the beginning, you talked about this kind of mini IPT.

I think you said your PM, your contracting, maybe finance. I forget the exact people that you said, user and [00:09:00] potential solution provider. That concept, while maybe not novel, I don't think is like a regular course of business for DOD, like just this idea of like small group people in the room. Let's, let's forget that I'm contracting and that your finance and that your program management, we're just here to solve a problem together.

Why don't you think that's like normal business for everyone? 

Mike: Well, so I think that's multifaceted. I think when I go way back to when I first started 2008, right out of college during situation had, you know, was still very much in the forefront of people's minds. I forget exactly when that happened, but acquisition integrity was huge thing.

So we used to do this thing called one pass pricing where you'd fly down and you'd say, here's my budget. And the contractor would be there, the user would be there, acquisition office, and you're just like, here's my budget, let's write a SAO or a PWS that is attainable within that budget, and we're all like, you know, we're all friends and [00:10:00] everything's gonna be good, right?

Well, once the Arleigh Druin situation happened and, you know, we started to unpack the way that you're approaching things, that just doesn't really pass a sniff test. Right. And so speaking of pendulums, we swung all the way the other way and we're afraid to talk to the contractor. You know, once I released an RFP, communications are over and we'll get back their proposal and we'll evaluate it without talking to them.

And so the user got kind of thrown to the side in that, in my experience, right? So now, because we were so afraid that we might jeopardize integrity acquisition, which is a major problem. We want to talk to anyone. And so now you're just stove piped, looking at a proposal on your own and stove pipes are the devil.

So, so now we're going back right now, keeping the forefront acquisition integrity, you know, you don't have to actually do something, right? And you just need the perception. There's some sort of lack of integrity and you were going to have a major problem on your [00:11:00] hands. And so approach everything with maximum integrity, but sometimes you just sit down and you say, listen, like, we're not going to share with you the budget.

But I understand in this service type of thing, you need some sort of range. So, you know, how you're going to fill out. How you're going to man the capability. And let's talk about what's in the art of the possible. And generally I find that when users come to us, oftentimes they've heard of companies that are already at the tip of the spear already bring these great capabilities, which is, which is awesome.

That should continue to happen. We shouldn't be. Trying to prevent companies from being able to prove that they have a capability, right? So now where we, that might be able to help the user. So where we have to get involved is, you know, BD people tend to overstate the capabilities or oftentimes now I hear AI is possible.

Uh, we can do these amazing things. Only [00:12:00] problem is policy. Well, like I don't have any control over that really, right? I can, I can. You know, funnel up, Hey, this is a policy LIMFAC here, but, uh, policy really, really hard to change, especially depending on how high up you're going. And so cybersecurity, we always talk about ATOs being problematic.

You can complain about the process or you can be a solution to the process. And so in my experience, cybersecurity people aren't there to prevent progress. Right? Very far from the truth. Those people, in my experience, really understand the threats that we're facing from a cyber perspective, I would argue better than most understand.

And so, everything's about finding balance. I mean, As we all know, the most secure defense system is the one that's not switched on. So that also doesn't help do anything. So now we're managing, now we're talking about managing risk. You're somewhere with a, you [00:13:00] know, on a risk spectrum and that you work together with your program manager, contracting officer, we were, you know, the business advisor to the team, really helping to steer which way we're going to go, but I really like to be shoulder to shoulder with my program manager and, and understand as much as I can.

About, uh, what it is we're buying so that we can, we can assess as many factors as possible as we start to make some of the business decisions was sort of contracts we should use contract OTA contract types, commercial, see it, you know, all of those things. If I'm understanding how it's going to affect all the different stakeholders, different perspectives.

Now I have more data to just inform my decision. And that's where it all starts for me. 

Ryan: Yeah. Awesome. I think I'm going to add, uh, stovepipes are the devil to my signature block in my email after you said it. Uh, I love it. Uh, good stuff. Hey, you know, you, you talked a little bit about policy and I'm curious because we all have.

You [00:14:00] know, at a high level, you know, the department's policies, you know, FAR, DEFAR, these types of things aren't really as restrictive as I feel like they get a name for. And I think from talking with various contracting officers, et cetera, a lot of the challenges come like at a local level. And I'm just curious, like, How you've been able to kind of navigate with some of the things that you've been able to do and experiment with potential pushback from like policy or legal or your boss or like those kinds of things, just how you've navigated that, because it's not easy for anyone.

Mike: Yeah, no, it isn't. There's no one solution, you know, I mentioned earlier relationships matter. Well, it matters to when you're going to request, um, your leadership to buy into something that has risk. And so, you know, build some credibility. Don't shy away from risk. Don't hide risk. I mean, I feel like oftentimes in DOD, we, we try to bring solutions to senior leaders and try to tell them how there's no risk in any of them.[00:15:00] 

And so this is why you need to support it. But I think it's more important to just bring, address it head on, right? Hey, this is not traditional. I'm not being not traditional for the sake of not being not traditional. Cause that happens sometimes. Cause you hit the nail on the head. The FAR is not as restrictive as everyone really thinks it is.

I mean, when you start reading, you can find a lot of latitude within there. And so sometimes I've seen people like have to OTA everything. Okay. It's your responsibility. I, I generally do not like to question how another contracting officer reached the decisions that they made for their contract. I don't know all the facts behind that.

If I'm bringing an OTA or I bring an experimental procurement to you. It's document. Go look at the contract file. All the documentation is there, you know, pull all that together to lay out. Hey, there's some risk here. This is a little non traditional. So I want to explain to you why I think that this would be an optimal [00:16:00] solution.

There's no one way to do anything. So sure, I can pivot and do it another way. And so let's understand what makes another way, you know, either more advantageous or less advantageous to us. And so. So early engagement within my contracting chain, I am always advocating for doing that. So, and I really lean on my contracting chain to make the appropriate decision when, when they need to let their counterparts know, you know, so if I'm going to a division chief, you know, it's up to, you know, I trust that she'll know when it makes sense to, you materiel leader.

Hey, this is what we're thinking of doing, you know, so use that to just kind of like test, you know, the waters a little bit to see, are they going to say, absolutely not, are we going to be able to have a conversation if they're not on it, or are they just, you know, are they like, yes, totally empowering, go, go forth and conquer.

And so, you know, when you work in special programs, oftentimes folks that don't work in special programs. Tend to think [00:17:00] that not all the rules apply. And that is, it's just not true. In fact, there's probably more rules associated with what we're doing. It's going to be a little bit more streamlined because there's going to be fewer people that are briefed to what you're doing.

That's just the nature of, of how that stuff works. Right. But there's no, I still have to compete everything. Sika still applies, right? Perhaps a limited competition or something just to clear vendors, something like that. But I can't just say I'm behind the green door. I'm doing whatever I want. Right. And so as I transitioned recently into more of a contracting leadership role, let's try to continue to just preach that you want to assume that the Washington post test is still something, you know, at risk here, right?

We used to all, you know, ever since I first started in contracting, it was always like, Hey, assume that what you're working on is going to be the front page news. Okay. Are you going to be able to stand behind that? And sometimes, you know, It's like, yeah, like, I know I'm going to be on the cover of the acquisition [00:18:00] news articles machine, right?

And sometimes you just defend it, right? And sometimes it's like, you know, I'm not, I'm not being equitable to everybody. So perhaps we should take another, take another approach where we can be more inclusive. And so that's why. A lot of my time spent in pricing and then now in special programs is on like, what are those levers that are motivating the type of behaviors that you are actually seeking?

Right. And so I spent a lot of time going back and looking at things that we've done and, you know, it's like, Hey, when you, in fact, Ryan, we're working on super, super cool incentive arrangements or flat spots and all that stuff. Yeah. That was really cool, really novel, and what I find is, no offense to you.

No, yeah, I knew what you were going to say. Very complicated things are also problematic. You may have thought that we are honing in on incentivizing exactly the types of behaviors that we want. The things we're not thinking about is [00:19:00] like, listen, the perfect contract is always one modification away.

We're going to modify this thing. So how do we now modify a super complex incentive structure When the price analyst isn't with us anymore because he's on to greener pastures, right? So now you're going to find that balance, like, you know, a really complex, elegant solution. Is not going to withstand that test of time because nuance is just so hard to get across, right?

And so, so then you start to see what you are incentivizing. And so, so that's where I, I then spend a lot of time just researching that you and I have talked about. I, I did a, a fellowship at MIT artificial intelligence accelerator, and I spent a lot of my time there, less focused on machine learning algorithms that, and that sort of stuff.

But as a contracting officer. You know, what levers can I play here within an AI space to be able to incentivize the types of behaviors I actually want to get. And so you cannot [00:20:00] ignore where you're at. Right. So like we talk about, Hey, if I, if I increase cash flows and I do performance based payments, then effective fee rates will be higher because of internal rate of return, those sorts of things.

Right. The fact of the matter is like X, Y, Z company got, you know, they got 10 percent last time. You're not going to convince them to take 6 percent this time because their effective fee rate is higher. You're not comparing apples to apples, right? So it does not benefit us when our counterparts or their leadership on the contractor side are being fired every quarter because they're not meeting their goals.

So it doesn't matter how good of an argument you have. Stability is important as well. You know, just like it doesn't benefit anybody if one company gets the entire DOD budget, right? Like, we have to spread that across, building the DIB is super important. We have to maximize value for the money as well.

So you're, you're trying to find a balance there. And so, what you're actually incentivizing is super interesting to me, [00:21:00] instead of, like, what we're hoping to incentivize. 

Ryan: No, that's good. And I'm going to, I'm going to ping you on the AI accelerator and the paper you wrote with some of those incentives before I do what I thought you were going to say about no offense with my novel flat spot approaches.

I was so humbled to have read the 1969 NASA incentive contracting guide and realized that in 2010 or whatever we were doing that, um, we were nowhere near as smart as they were in 1969 when they wrote that guidebook. Hey, or 

Mike: we haven't really made advancements. In incentives, right? And there's been a lot in the field of economics and in finance that has changed since that time as well.

The whole marketplace is a lot different. And in fact, when you did that, that was, that was to be lauded at that time. We were, you know, we're in sequestration. We're trying to get every ounce out of the dollar, you know, maximize bang for the buck. And we want it to be very clear in chase out at the time was, was very [00:22:00] clear with industry.

Like, you know, it's not a warrant profits, right? We need to maximize value. That's what we're looking at. And so, you know, oftentimes, sure. Did that manifest as lower profit or fee rates than contractors were accustomed to perhaps, but it was also like trying to really hold your feet to the fire on some of the other, you know, performance metrics, schedule metrics, those sorts of things.

You know, I, he was championing a lot of FPI F type contracts. That was awesome. Right. And so now as we've pivoted, you know, you never. Price is never not important, right? You know, you always have to maximize, maximize the value for your dollar. Now we're pivoting towards great power competition. And we're talking about pretty much daily at this point.

And speed is the hands down most important thing. And that is yet another reason why we're here with, you know, with an AI focus around what we're doing, because you're not going to get there without artificial intelligence. 

Ryan: Yeah. So let's hit, um, You know, I know you wrote the paper. I think you had [00:23:00] some pretty neat ways of incentivizing thing.

Do you want to kind of just hit a couple of them or one of them or just talk about some of the things you had in that paper? 

Mike: Yeah, so all the paper was more exploratory, right? Not prescriptive, right? And so, so the way that I attempted to lay it out is just do a little bit of research. She just says, Hey.

Some of the things that are, I think, pretty common to folks like us, like, you know, DOD used to, or the federal government used to be the overall predominance of R& D spend in the country that is completely flipped, not even close to true anymore, right? And so, you know, a lot of the 1969 DOD NASA incentive guy.

Like that was written in 69, it's 2024. So things have changed since then, right? There was a lot of consolidation, you know, and now we're looking at building up the dib. You're getting a lot more new entrants. Now, I think, you know, partially biased, but I think the air force has done a great job in leveraging the SIPR program and bringing in a lot of new companies [00:24:00] through the SIPR program.

I'm not as familiar with what's going on in the rest of the services. But that's a great thing. Right now, the idea in the paper is to look at like, what is motivating people to do business with the government? It's not that easy to do business with the government when we did. When Dr. Roper coordinated that, the Pitch Day event that I supported in New York City in 2019, the bumper sticker was, we're open for business, we're trying to make it as simple as we can, so we did one page contracts and we just swiped a GPC, Government Purchase Card, so that we could pay right there on the spot, right?

And so you did this Shark Tank type thing, and there was, for my PEO, we had over 120 proposals, white papers that were submitted that we evaluated and invited 20 down to New York City, And then we awarded, I think, 18, what's the number, 16, 18, somewhere around there. So, why were those people willing to do business with us?

Well, we've got the Office of Strategic Capital now, that the Air Force is [00:25:00] pushing, Air Force, DoD, we're opening, right? And so that's a non dilutive kind of venture capital type of thing. So, sort of like an In Q Tel, but non dilutive. That's huge, right? I mean, we're at the point where, We want to invest in R and D.

We're not looking at taking shares, right? We're not looking at taking an equity stake in your company. We need the best and brightest to start helping us out as well. And so I think we went through a little bit of a little bit of a value there where like, You could go and work Google, Facebook, Meta, you know, those sort of companies and apply some, you know, real novel, like, you know, data scientist type work.

How are we going to get those sort of people? I mean, we remember Project Maven had that big, kind of like a little bit of like a company revolt, kind of open letter to the CEO sort of thing. And so how do you How do you incentivize people to get excited about working with, with DoD, right? So part of it's on a personal level.

Part of it's on like a company level. I mean, everybody wants to make money. That's what capitalism does is it's American, right? So why [00:26:00] would we be shy about that, right? Like we shouldn't be so fearful that a company might be that come the next billion dollar company. Right. You know, in fact, we should leverage that.

That's what people want. That that's what inspires people to create businesses that drive value. And so tap into that marketplace by saying, Hey, maybe this company that participated on the Sibber from the New York city event in 2019, there's several, several companies that are, I'm not going to name anybody, but our household names, I would say within DoD at this point.

And you want that. Yeah, that's, yeah, success, right? Yeah, exactly. And so, they're profitable, right? We generally are, you know, often times what happens, back to your question about like, some of the senior management and stuff, often times those people, they were kind of promoting while you and I were just learning.

You know, during this phase of sequestration and stuff, right? And so now the world's changed a little bit. Those people may have [00:27:00] taken the next step, I hypothesize, right? And so they know what's right because they were there. All right. And so I'm constantly coaching up like, Hey, we need to constantly be, you know, growing and evolving, understanding what's happening in the marketplace today.

So that's not to say that we should just be throwing money away, right? Like we shouldn't overread into those words. It's just. I would love, like, if somebody could, could build me a capability that brings world peace tomorrow, I'll find a way to get them a trillion dollars. Right. Like, like that would be perfect.

Right. But you know, back in reality, right. It's like, if the value proposition is there, then you can't be afraid of paying for it. Right. And so part of the paper is like, how do I build contracts or other sort of incentive type structures such that companies. Are bringing their capabilities to us. If I build a company, that's a billion dollar company.

I did a good thing because they've helped out a lot of, a lot of [00:28:00] people. So one of the concepts I laid out and I stole from, I stole this completely plagiarized it is if you can have a company, you want to pay them based on the quality of code that they deliver. And then structure this in a way where their incentive is tied to three things.

The quality of code that they write. The amount of their code that they wrote that was posted to like some sort of repository that's used by others in this modular sort of building software capabilities, because that's what I mean, a lot of our AI stuff is really, I mean, at the core, we're writing software, right?

And then, and then the last part is how much of others code did you reuse, right? So now I'm, I'm trying to get away from incentivizing companies. To hire people, put butts in seats and then just pay them. And then the worst would be, is he would give me what I asked for the perfect requirement doesn't exist.

You know, a formal big R requirement by the time it gets validated, the J rock and it gets down to us. 

I mean, there's always a long time there, right? And [00:29:00] so I try to write a requirement with some flexibility that allows us to flex. And sometimes it works well. And sometimes, sometimes it doesn't, but perhaps if I could tie, I'm working on a lot of modular type software capability, sort of thing. So if I can tie the sort of consortium of companies.

To working to support the users. So that means we've got to have user days. We've got to understand that. What are your pain points? What do you do daily? Understand what sort of missions, if it's Intel people or pilots or maintainers or whatever it might be, right? All of these things have a lot of data sources that come with them.

And then if you want to have like a better planning tool, you know, as you're planning sorties or whatever, you know, or like pilot readiness or whatever it might be, you know, as these people are building on the capabilities that they're delivering, if I can measure them on those three things, then I think I'm now I'm putting money in your pockets for not necessarily just putting a person in the seat and coding, [00:30:00] right, but building more useful code.

And so underpinning all of that is it needs to be tied to. The, the user's requirements, right? So I tried to explore that a little bit. I'm dying to put it into practice. I haven't had something that quite makes sense. So it was, you know, it's theoretical conversation starter, right? You know, I would love if someone else can do it before me.

Awesome. I'd love to know how it goes. And see how we could tweak it, maybe, or scrap it. I mean, maybe it's not a good idea. I don't know. 

Ryan: Sure. All right. I think, I think time for one more question for you. And it's in the line with the experimentation thing. You had texted me something about like bailment agreements and how you're using them potentially.

I know you want to talk about any specific contractor's name, but can you, can you like explain what the heck you were doing? 

Mike: Yeah, let me, I'll explain how we got there. So ever since that pitch day, really in 2019 down in New York city, I've had companies come to me pretty much nonstop and say, like, I have this thing, I know it's going to [00:31:00] help these warfighters, I just need access to data, please let me get access to data.

And I'm like, okay, what data do you need? And it's CUI or above. And I'm like, okay, so how can I get data streams over to you? You know, if it's above CUI, I need a DD 254 on the contract, right? How can I authorize that sort of thing? And so we had a unique, uh, situation pop up a few months ago, a company was saying pretty much the same thing.

And then they said, listen, just give us a 1 contract. And then we're going to go and, you know, the beeps and squeaks are going to do the really cool thing. And I'm going to prove to you that I can be that value that. I, as a business development person claim that I can be. And so the piece that you needed there was you needed a contract in place so that you give them the data.

Exactly. So for that particular case, we needed a contract in place so that we could then authorize them to get access to certain data. [00:32:00] And so they have a facilities clearance, right? It's already off, but without a contract that is saying, Hey, I have a need for this sort of thing. I can't just be like, yeah, sure.

Let me expose all this data, you know, go build something. The DOD doesn't do that. You know, Apple, I think does that, right? They expose data and then app developers come in and they say, Hey, like what sort of metrics can I get? Right. And then app developers independently make their decisions in developing their thing.

And so that's kind of. Where I was, my line of thinking was going. And so the company said, Hey, can I do a $1 contract? And they said, of course. Sure. $1 I can find, we can find a buck. And back to previous discussion, senior leadership was like, Hmm, a dollar contract that doesn't, that doesn't really pass a sniff test, you know?

And so did a little bit of brainstorming. Legal advisor was like, Hey, you know this other office, you know, they did, you know it's a software capability. They did a bailment agreement. Where the company bails over [00:33:00] the equipment, you know, the software license to you, allows you to use it for a little bit.

And so we built on that. We were using it by really to enable the company to get access to what they needed to do, right? And so we wrote a bailment agreement, got a contract number, age number. So that they could get access to the data streams they need. It's ongoing right now, but all signs are, I mean, I was just talking to the program manager this morning.

It's awesome. And they're like, Hey, how do we award this company a contract? Which is what you want to see now. Now that's a problem for me, but that's exactly what you want to see. That's a good thing. That means we're getting value. Right. And so. So I cautiously call it a free trial, like, I think you should probably be careful about that, you know, legal certainly hasn't blessed that these are opinions are my own, but it was an opportunity to get it into some users hands and then start to see, like, is this actually doing what [00:34:00] they claim they can do, or did we just get sold a really squeaky presentation?

And that happens a lot, right? Like I said earlier, oftentimes people have awesome presentations and then you throw a couple bucks away or support them for a sip or two or something like that. And they're like, Oh yeah, we could do this, but policy is the problem. Right. You know, said that earlier, listen, I understand.

So we have to figure out, we need to be a partner. In this to be able to get through some of the policy and limitations and stuff, but we got to work together through that. So the bailment agreement was outside the box thinking I hadn't heard of that before, but that's, you know, we talked about having a network of people you can contact, right?

And so I have an awesome attorney program attorney that supports us. He's got contacts elsewhere. So it was, you know, through the grapevine, it was like, okay, here's what I'm thinking of doing. And he's, you know, yep. I support that. I think. Something like that makes sense, we've limited our liability, we've gone through, we have a clause for commercial software, kind of an H clause that we attach [00:35:00] to that, because there's certain, you know, in a EULA, there's certain things that, you know, the government just can't agree to, so, so we worked on writing the bailment agreement language itself.

on the EULA clause that would be acceptable to us. So it was with their attorneys, our attorneys, and it's been pretty successful so far. And so now the next step is like, how do I scale, you know, from where, where I've been working, that is always the problem. Like, how do you figure out how to scale something?

So I say that as like, again, not a prescription on what everybody should be doing, but, You know, when you approach your problem solving your critical thinking with an open mind, right, then you might consider things and find yourself going down a path you would have never considered because Bailman agreement wasn't my first thought, right?

It was 1 contract. I was like, okay, there's some sort of like, OTA type arrangement that, you know, cause we want to do a quick prototype. So, I mean, maybe we'll just do a prototype OTA, you know, but even in advance of that, why send some money over there and then start [00:36:00] talking about data rights? Like, did I help develop this thing?

Was it commercial, you know, like. Or I prefer to, you know, not spend R and D on something and then just buy it commercially. That'd be awesome. I just avoided paying R and D on that. I can spend it on something else. Yeah. So, yeah, 

Ryan: no, that's awesome. Well, Hey, we're, we're at time got a wrap, but pay some homage to Bonnie.

I have a sign off question that she asked more legacy or more recent guests. So I'm going to keep that going, which is if you were given the choice, would you dip your grilled cheese in hot chocolate? 

Mike: Absolutely. Absolutely. Hot chocolate's awesome. Grilled cheese are awesome. There's nothing like grilled cheese and tomato soup.

So I feel like the consistency is going to be fairly similar there. Um, I mean, I'm a little leery. I don't typically mix those things, but you got to be willing to try anything once. So I'll give it a shot. I might try this now, actually. [00:37:00] 

Ryan: Awesome. Hey, Mike, I appreciate you being on today, being my first guinea pig.

Thank you so much for all the insights. Just appreciate it. All right. Hey, thanks for having me.