Other transactions authorities (OTAs) revitalized to advance science and technology
Another recent development is the issuance of the “Other Transactions Guide for Prototype Projects” by the DoD in January 2017. This is the most recent guide issued by DoD and provides useful information for both the government and potential contractors.
A recent GAO decision dated May 31, 2018 in the Matter of Oracle America’s challenge of a follow-on production OTA (P-OTA) to REAN Cloud LLC, because the award did not follow Section 2371 requirements, was upheld, resulting in termination of the OTA award. This demonstrates the risks associated with awarding OTAs if all the requirements are not fully considered.
The perception of risk related to OTA transactions appears to differ depending on roles of those involved.
Government Contracting Officer Perspective
If the award is for science and technology and prototyping programs, the question contracting officers will likely have to answer now is why they did not award as an OTA, since that is the preference memorialized in the 2018 NDAA. Contracting officers are aware that their decision to not pursue an OTA for these types of awards may be scrutinized by their superiors and the potential providers of these services. Therefore, it is much more likely now that OTAs will be considered for these types of awards. However, many contracting officers have not previously issued awards as OTAs and are not sure how the process should work. They do not want to be later criticized for how they conducted the OTA procurement. Education of the government contracting community on what should be procured with an OTA agreement is needed to further alleviate these fears.
Government Service Provider Perspective
The perspective of the service provider will depend on whether they have fully compliant FAR based accounting, estimating and billing systems. If they have climbed the mountain of rules and regulations needed to demonstrate compliance in these areas, they may not appreciate the attempt by the government to ignore these business systems under an OTA. We can expect backlash from some of these large, entrenched contractors if work that they would have had advantage on due to their mastery of FAR based contracting is now awarded as an OTA to a firm that doesn’t have FAR compliant systems. That will be interesting to watch unfold. For those entities that have not developed these FAR based business systems, this does present a golden opportunity to perform science and technology work for the government that they likely would not win in the past. Entities interested in performing science-and-technology work for the government should watch for these opportunities and pursue them. Understanding how to see these opportunities is one area that these companies may not have expertise in. These entities will need to become familiar with government sites such as FedBusOps to identify opportunities. I recently searched FedBusOps and noted a significant number of OTA opportunities. This should only increase as Contracting Officers attempt to comply with the OTA preference for new opportunities.
Some examples of recent OTA solicitations include:
- US Army solicitation to award up to 5 OTAs for next generation squad automatic rifle development (NGSAR)
- Air Force F-16 Cockpit Control Panel Organizer (C3PO) OTA opportunity
The website https://www.woden.one/woden-blog lists the current consortia for DoD. This indicates as of recently, there were 14 OTA consortia. Organizations should consider whether joining one of these consortia would be in their interest.
Some governmental entities have established special partnerships such as the one discussed at https://www.sofwerx.org. The purpose of this partnership includes helping to facilitate OTA transactions and provide an “ecosystem” of OTA interested parties. This is a partnership between the Doolittle Institute and the United States Special Operations Command (USSOCOM). Joining this ecosystem enables the company advantages as it attempts to identify OTA opportunities.
For more information about Other Transaction Authorities (OTAs), please contact: Jeffrey Witt, CPA, Senior Manager, CohnReznick Government Contracting Industry Practice, 703-744-6757 or Jeffrey.Witt@CohnReznick.com.
For over 40 years, CohnReznick has provided comprehensive services to assist government contractors with a full life cycle approach to winning and managing contracts. We ensure your financial and procurement processes are compliant, efficient and effective - so you can focus on what matters most, profitable growth.
 Other Transaction Authority report to congress dated July 15, 2011, Page 5
 Other Transaction Authority report to congress dated July 15, 2011, Page 31
 GAO Decision, Matter of: Oracle America, Inc. File: B-416061 dated May 31, 2018
 Other Transaction Authority report to congress dated July 15, 2011, Summary section
 American Bar Association, Section of Public Contract Law, Ad Hoc Working Group on Other Transactions, Department of Defense “Other Transactions”: An Analysis of Applicable Laws, American Bar Association, 2000, p. 26.
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