There’s a “New” Procurement Type in Town – Other Transaction Authority/Other Transaction Agreements

We all know the traditional acquisition types used in federal contracting – Full & Open competition, small business set-asides, sole source, etc. However, you’ve probably only just started hearing about OTAs and have been left scratching your head. We’ve been hearing more and more about this mysterious acquisition process that provides an alternative to traditional methods – no FAR regulation, no full blown proposal writing, much less red tape. OTAs, Other Transaction Agreements, are being used to create a more flexible, efficient, and cost-effective method for the US Government to buy technology.

What is an OTA? How is it different from traditional contracts?

History of OTAs

While OTAs have been around for decades, they’ve only recently gained significant attention within the acquisition community. First signed into order in 1958, along with the creation of NASA, OTAs were introduced as a mechanism to beat the Soviet Union in the Cold War Space Race. This new acquisition process provided NASA with the “authority” to enter into transactions not subject to regulations that applied to typical contracts.

In order to execute an Other Transaction Agreement, agencies must have Other Transaction Authority granted by Congress. What started with NASA in 1958 has now expanded to include the Departments of Defense, Energy, Health & Human Services, Homeland Security, and Transportation, as well as some specific government agencies and programs.

Differences between Traditional Contracts and OTAs

OTAs offer flexibility to what is typically a cumbersome process. In recent years, Non Traditional Contractors (for example: small, innovative commercial companies) have shied away from working with the US Government to avoid what is generally viewed as an expensive, time-consuming, and complicated process. The rise of OTAs have changed the calculus and could open the door to new competitors. The chart below summarizes the basic differences between Traditional Contracts and OTAs.

Key Takeaway

DoD (and the broader US government) has increasingly utilized OTAs as part of an overarching goal to reform the way it does business. As the chart notes, the streamlined OTA process has many benefits – it’s less formal, has fewer regulations, and requires less up-front costs, but it will take time for both the acquisition community and industry learn how to use this mechanism correctly. Richter and Company is here to help you navigate the process and succeed in today’s ever-more competitive marketplace. Since 2006, we have helped our clients win more than $30 billion in new business using our proven methodology and comprehensive tools. To see how we can help you win, please contact us.

We’ve covered the basics in this blog post, but we are excited to share a webinar and White Paper with more details in the upcoming weeks!