Other Transaction Agreement
Other Transaction AUTHORITY
Refers to the agencies who have the lawful ability to enter into contracts that bring commercial technology solutions to the government to solve federal problems.
What is an Other Transaction Agreement (OTA)?
An “Other Transaction Agreement” (OTA) is a legal agreement with the federal government that is not a cooperative agreement, grant, or standard federal contract. OTA contract types have been around since the NASA Space Act Agreement of 1958, but their use is fast growing. Both the number of OT awards granted by the DoD and the dollar amount per award have increased substantially since inception. In short, Government OTAs are legally binding instruments that may be used to engage industry and academia for research and development or prototyping activities.
More than what they ARE, OTAs are typically better defined as what they are NOT. OTAs are not standard procurement contracts, grants, or cooperative agreements. Therefore, they are not typically subject to FAR regulations YET they are still legal and encouraged.
Q: Authority or Agreement – Which is correct?
A: Trick question! BOTH are utilized in the OTA Community.
Other Transaction AGREEMENT
The contract used to identify requirements and stipulations regarding deliverables, IP & Data Rights, etc. that are included within the solutions being delivered.
Why Use an Other Transaction?
OTA Opportunities by the Numbers
TOTAL SPENT ON OTAS IN FY21
$13.5 Billion
TOTAL SPENT BY DOD ON OTAS IN FY19-21
$37 Billion
- The customer needs a flexible option to provide commercial-type term contracts to organizations who have innovative solutions (almost exclusively in the R&D space)
- The team is developing and researching processes, prototypes, or technologies for the advancement and testing of the feasibility of a technology
- A non-traditional company has a solution that the federal customer can utilize but needs to circumvent flexible IP rights and to lower the barrier to entry for the non-traditional
- There is an emphasis on trying to attract and recruit innovative, non-traditional companies to participate in government R&D projects
- The customer is looking for a reduction in program costs: streamlined management and processes of OT projects can result in accelerated timelines and reduced administrative cost
Other Transaction Agreements (OTA) VS Federal Acquisition Regulations (FAR) Contracts
What’s the Difference?
- OTAs have a $500 Million cap (or require special approval) but are typically less expensive to implement
- OTAs have a better opportunity for negotiating clauses such as IP & Data Rights for both the customer and the small business
- OTAs are more accessible to Non-traditionals and Small Businesses without the strain of the technicalities associated with a FAR-Contract, allowing the government to source solutions from commercial enterprises
- OTAs have far more flexibility than FAR Contracts for the government in sourcing innovative solutions
When to Use an Other Transaction Agreement (OTA)?
To be eligible to utilize OT Authority one of the following two criteria must be met:
- The company being awarded is a NTDC*
- The company being awarded is a traditional defense contractor with one of the following additional criteria:
- One or more non-traditionals and/or nonprofit research institutions are participating to a “significant extent”
- All participants other than the Federal Government are small businesses (this applies to SBIR/STTR participants as well) or non-traditionals
- The organization being awarded has a financial or in-kind cost share of at least 1/3. (Noting that in general, the Government does not mandate cost-sharing requirements for specific defense items)
- The Senior Procurement Executive of the agency provides a written determination that justifies the use of an OTA due to needs set outside the bounds of a FAR-based contract (rarely used, if ever).
*As defined10 U.S. Code § 3014, a “nontraditional defense contractor” means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any contract or subcontract for the Department of Defense that is subject to full coverage under the cost accounting standards prescribed pursuant to section 1502 of title 41 and the regulations implementing such section.10 U.S. Code § 3014, a “nontraditional defense contractor” means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any contract or subcontract for the Department of Defense that is subject to full coverage under the cost accounting standards prescribed pursuant to section 1502 of title 41 and the regulations implementing such section.
What are the Types of Other Transactions?
OT Categories
Research OTs: Science and Technology OTs; Funding for applied and advanced research projects (10 U.S. Code 4021). Research OTs apply to basic, applied, and advanced projects in order to continue or develop dual-use technology solutions. They do not provide for follow-on production contracts within the terms of the agreement.
Prototype OTs: Formerly section 845 OTs; Can be follow up from successful Research OTs (10 U.S. Code 4022). They are typically utilized for R&D and prototype activities needed for military challenges. Prototype OTs CAN provide opportunities for direct award follow-on work without the need to engage in the re-compete process.
Production OTs: Follow up to successful Prototype OTs (10 U.S. Code 4022 (f) 3). As stated above, Production OTs typically can be directly awarded without the need of a re-compete as the Prototype OT has been proven effective and necessary.
Award Structures
Direct Awards: Direct Awards are openly competed within the GovCon Industry. The RFP is accessible publicly and can accept proposals from anyone eligible.
Consortia Facilitated Awards: These awards flow down from Government Customers through the Consortia Management Firms (CMF) to specific consortia that fit the requirements for the technology under the OTA and are available to those consortia members only.
What is the Consortium Model?
OT in Action
The Operation Warp Speed Vaccine Prototype was a Consortia Model-Awarded OT used to fund vaccine research and development to quickly and effectively distribute the COVID-19 Vaccines.
An OTA consortium is an association of industry and academia working with a government sponsor under an OTA vehicle to achieve a common goal. The consortium operates under a common ruleset with a specialization in specific technology areas, designed to minimize barriers to non-traditionals and small businesses. The consortium management firm (CMF) manages the administrative needs and the flow of information to serve as a force multiplier to the government program.
Most CMFs are not-for-profit organizations with expertise in acquisition support. The role of the CMF has evolved from merely supporting government requirements to providing an additional level of compliance and oversight, an ecosystem of resources to its membership, a facilitator of collaboration and SME in alternative acquisition strategy.
What are the Current Consortia?
Non-DOD
Sponsored
Air Force
Sponsored
OSD
Sponsored
Navy
Sponsored
Army
Sponsored
What is the History of Other Transactions?
Historically, the National Aeronautics and Space Act of 1958 was created by congress to develop a national space program. In its creation, NASA was granted broad authority to enter into and perform such contracts, leases, cooperative agreements, or other transactions as may be necessary to accomplish its mission.
Thus, the OTA was born!
The Defense Advanced Research Project Agency (DARPA) was first granted its authority for advanced research projects in 1989, with expanded prototype authority by 1993. The rest of the DoD received authority in 1996 with Section 845 of FY94 NDAA , with subsequent modifications in the coming years that added follow-on production authority, a pilot program for follow-on contracting for the production of commercial items, and more.
2015 was an important milestone for OTs, with the permanent codification of OTs in 10 U.S. Code 2371b (now re-named 10. U.S. Code 4022).
At present, 11 agencies have OT authority to date:
- ARPA-E 42 U.S.C. § 16538
- DHS 6 U.S.C. § 391
- DNDO 6 U.S.C. § 596
- DOD 10 U.S.C. § 4021 10 U.S.C. § 4022
- DOE 42 U.S.C. § 7256
- DOT 49 U.S.C. § 5312
- FAA 49 U.S.C. § 106(l)
- HHS 42 U.S.C. § 247-7e
- NASA 51 U.S.C. § 20113(e)
- NIH 42 U.S.C. § 285b-3 42 U.S.C. § 284n 42 U.S.C. § 287a
- TSA 49 U.S.C. § 114(m)
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