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OTA - Other Transactional Authority

by Mary Love - June 22, 2018

Earlier this month I attended the Industry Day for the Pine Bluff Arsenal where the primary focus was on the topic of Other Transactional Authority and contractors who were interested in providing technology and other expertise applicable to Department of Defense prototypes.

An "Other Transactional Authority" or OTA is defined as a legally binding agreement between the federal government (in this case, the Department of Defense) and the participant(s) of a transaction that is other than a procurement contract, grant, or cooperative agreement.

OTAs are not subject to the Federal Acquisition Regulations (FAR), its supplements, or most laws that apply to procurement contracts. It is an acquisition authority to help the Defense Department attract non-traditional defense contractors and increase access to commercial solutions related to a defense prototype to enhance the mission effectiveness of military personnel, equipment, systems, and platforms that support the war fighter.

A Nontraditional Defense Contractor is described at 10 U.S.C. 2302(9) as “an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by DoD for the procurement or transaction, and any contract or subcontract that is subject to full coverage under the cost accounting standards prescribed pursuant to 41 U.S.C. 1502 and the regulations implementing such section.” It is often a small business.

Through the OTA process, the Department of Defense may work with a consortium consisting of at least one nontraditional Defense contractor. This process helps to implement more efficient acquisitions of prototypes in a significant way. OTA’s often include a cost sharing arrangement requiring that at least one-third of the cost of the OTA come from non-federal sources.

Each military service has authority to execute up to $250 million to “tap into the research and development being accomplished by nontraditional defense contractors, and to pursue commercial solutions …” for defense prototype projects. For more information please refer to the Department of Defense Other Transactions Guide for Prototype Projects (dated January 2017).

It is important to note that the Department of Defense is not the only federal agency using OTA. Here is an excerpt from a recommendation from the General Accounting Office (GAO) study published Jan 7, 2016:

“Congress has authorized 11 federal agencies to use other transaction agreements—which generally do not follow a standard format or include terms and conditions required in traditional mechanisms, such as contracts or grants—to help meet project requirements and mission needs. The National Aeronautics and Space Administration (NASA) first received this authority in 1958. Over the next several decades, five additional federal departments were given this authority — Defense (DOD), Energy (DOE), Health and Human Services (HHS), Homeland Security (DHS), and Transportation (DOT). Congress also granted authority to five agencies within these departments, including DOT's Federal Aviation Administration and DHS's Transportation Security Administration (TSA). The statutory authorities for most agencies include some limitations on the use of their agreements, although the extent and type of limitations vary. For example, DOT's authority limits use of other transaction agreements to research, development, and demonstration (RD&D) projects that focus on public transportation. Ten of the 11 agencies have issued guidance to implement their authority. The last agency—the National Institutes of Health (NIH)—is in the process of developing guidance.”

If you want to learn more about OTA and think this could be a good fit for your business, give me a call at 501-671-2062 or e-mail .

Mary Love