Other Transaction Agreements, or OTAs, are procurement instruments – other than contracts, grants or cooperative agreements – intended to create flexible business arrangements to acquire research and development, advance technology or quickly develop a prototype. Most federal acquisition laws and regulations don’t apply; OTAs are meant to acquire innovative research and development, often from non-traditional contractors.
OTAs are supposed to offer more speed, flexibility and accessibility for research and prototyping than allowed under Federal Acquisition Regulation-based rules and contracts. The White House Office of Science and Technology Policy states that OTAs “allow agencies and their contracting partners to enter into flexible arrangements tailored to particular projects and needs of the participants.” The fiscal 2018 National Defense Authorization Act required DOD to establish preference for OTAs and experimental authority in tech and prototype programs.
While they provide significant flexibility, there are limitations. OTAs are exempt from FAR and aren’t required to follow a standard format or include standard terms and conditions. But agencies must be explicitly authorized by Congress and contracting officers must have special authority to execute them. Eleven federal agencies currently have congressional authorization for OTAs.
OTAs appear attractive, due to perceived speed to award. But their primary goal is to engage non-traditional performers to support government needs; not to simply award agreements quickly or avoid FAR’s competitive processes.
So do OTAs work? What specific FAR provision(s) have driven some leaders to this “bypass” option? Although not articulated, and despite the above, bypassing the FAR is the real motivation for the growth in OTA use.
The logical government acquisition requirements for planning and development must still occur. One must still know the problem they’re trying to solve and perform the market research to understand what is available. This phase is also flexible, with minimal FAR-prescriptive guidance. The FAR does require clear, understandable requirements planning and prefers “performance-based” over design specs (such as describing needs by “what” vs. “how”).
The Procurement Integrity Act still applies under OTAs, as do competitive practices and basic laws and socio-economic objectives – just not FAR’s prescriptive clauses. Taxpayer dollars appropriated by Congress are still involved, which necessitates fairness, open opportunity, transparency and protest. OTAs may be protested to the U.S. Court of Federal Claims, although GAO has limited jurisdiction to review OTA decisions.
OTAs have been awarded to consortiums of both traditional and non-traditional entities (companies, schools, non-government organizations) that join together for the purpose of delivering whatever the government is asking for. These consortiums must figure out who is doing what and for whom. Somebody still has to be in charge and ensure project staff accountability, performance, quality, schedule and costs are controlled; that products or services paid for by taxpayers are delivered and work; protect everybody’s intellectual or physical property; maintain physical or cyber security; define who owns what when the product is finished; and someone has to be the ultimate point of contact for success – or failure. Everyone must know their role and responsibility. However, with so much about OTAs being undefined or lacking precedent, program risk can only increase.
As with so much in life, lessons must be occasionally re-learned. The recent increased use of OTAs is another acquisition strategy. But under OTAs, measurable, objective mission improvement over the myriad of authorities, strategies and risk management already available within the FAR must be re-created.
The results – good and bad – seen in today’s acquisition system emanate as a function of leadership and professional staff proficiency. These human-oriented competencies include entrepreneurship, commitment, knowledge, applied skills, experience, communication, teamwork, integrity and more.
Combined with an organizational infrastructure incorporating organizational buy-in, having clear lines of accountability, multi-level management support, common sense of mission and minimized bureaucracy create a viable pathway to future program success. The envied culture embodied by todays’ successful non-traditional private firms, and seen historically in government during significant national imperatives, must be nurtured to improve public mission outcomes today.
There is no bypass to solid program and acquisition planning, leadership and execution. There is no re-invention of basic contracting principles of offer and consideration between two parties, with rights and responsibilities between them. There is also no easy way out.
Michael P. Fischetti, LLC is an acquisition instructor for academic and training firms; he holds JD, MS, MA and BA degrees and professional certifications in contracting and association management. Fischetti most recently served as executive director of the National Contract Management Association. He also previously served as a federal acquisition executive and contracting official in defense and civilian agencies.