Other Transaction Authority (OTA) Overview

OTA is a powerful acquisition authority provided to the United States Department of Defense (DoD) and certain other federal agencies. However, Government and industry personnel commonly fail to understand the details of OTA and how it may be applied to improve Government acquisition programs and enable new business opportunities for industry.

 

DoD’s version of OTA is divided into two forms: OTA for Research (defined in 10 U.S.C. 2371) and OTA for Prototypes (10 U.S.C. 2371b). Given the broad definition applied by DoD for “prototypes,” the OTA for Prototypes authority is far more useful than the former. Wōden, for example, is currently only focused on pursuing opportunities with the OTA for Prototypes authority.

At its core, the benefit of OTA is that it enables DoD and industry to enter into business arrangements that don't have to comply with most federal acquisition law or regulation. Common industry challenges in working with DoD, such as auditing rules, intellectual property provisions, and slow contract award time frames, can be significantly diminished under an OTA. While the statute is specific to “prototyping” activities, it also allows the Government to issue non-competitive follow-on production contracts under certain conditions. These follow-on contracts may also be executed notwithstanding federal acquisition law or regulation. Hence, the business opportunities for Government and industry are far greater than simply executing one-off prototyping projects.

There are some nuances to OTA worth paying attention to, such as the distinction between "traditional" and "non-traditional" defense contractors, but even these nuances are easy to navigate with a trusted advisor. As a flexible acquisition tool, OTA can be used to enter into business arrangements that are far more commercial in nature. However, a flexible transaction is only one aspect of developing novel and high-value business relationships with DoD and other Government agencies. Despite DoD policy that directs programs to “tailor” their acquisition strategies to each circumstance, many program offices follow standard processes that diminish the potential value of a flexible acquisition tool. Wōden can work with Government and industry personnel to help design truly adaptive acquisition strategies that capture the full value of OTA and execute the full intent of DoD acquisition policy.

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