Take a Fresh Look – This is Not Your Grandfather’s OTA

Even if you are on the right track, you will get run over if you just sit there (Will Rogers)
By Ed Harrington

Other Transaction Agreements (OTAs) have morphed over time since their inception to create opportunities that did not once exist for Government contractors. Originally intended to access “nontraditional” contractors, foster increased technology innovation, and expand the Defense industrial base, OTAs continue to evolve in their utility and application to US Government (USG) contracting.

Most participants and observers of Government contracts will recognize OTAs as being the driving force behind converting former US Military installations to commercial, municipal, or mixed-use facilities under Public Private Partnerships (PPP). PPP agreements were highly popular during the last major Base Realignment and Closure (BRAC) round in the late 1990’s.

Changes to the OTA Authority granted in the 2016 National Defense Authorization Act now lets the Government include “traditional” defense contractors in this authority. It also provides the DoD with temporary authority to award OTAs in certain circumstances for prototype projects that are directly relevant to weapons or weapon systems proposed to be developed and/or acquired – even at production level quantities.

Today – the USG is using OTAs to create ‘consortiums’ designed to foster rapid prototyping, access new technology, and conduct test and evaluation. These consortiums are available to any organization with relevant capabilities – and especially target ‘non-traditional’ contractors. But only consortium members will be aware of potential opportunities – and must often pay annual membership fees to belong. And contractors seeking feedback from OTA-run procurements will likely be disappointed if they aren’t selected because the Consortium is the contracting authority and not required to provide debriefings.

Since they are not covered by the Federal Acquisition Regulations (FAR), OTAs are a flexible alternative to acquire and evaluate prototype (and commercial) capabilities. Government contracting officers have been designated as “Agreements Officers” and senior Acquisition Officials now include OTAs as decision alternatives when considering early production if risk reduction efforts warrant.

OTAs may be used for basic, applied, advanced research, and prototype projects when considered in the Government’s best interest to enter into an agreement that is not a contract, grant, or cooperative agreement. In one recent example, the Army used an OTA to acquire commercial items for test and evaluation with eventual down selection for production of significant quantities (up to 50,000 units). The follow-on production contract will always be a FAR based contract – but can be negotiated with the single source exiting the OTA competition.

Importantly, OTAs require a minimum of at least one nontraditional Defense Contractor participating to a significant extent in a prototype project, and ‘traditional’ Defense Contractors must contribute via a ‘cost-share’ approach if nontraditional contractors aren’t on their team.

One thing we have noticed is the limited pre-announcement notice and short response times associated with OTAs.

Given this new Government strategy, are you ready to submit an OTA proposal?

Comments are closed.