Understanding Other Transaction Authority (OTA) in Government Contracting

What is Other Transaction Authority (OTA)?

Other Transaction Authority (OTA) is a special acquisition mechanism that allows certain federal agencies to enter into agreements outside of the traditional FAR-based contracting process. This approach provides agencies with the flexibility to engage in contracts more swiftly and with fewer bureaucratic hurdles, particularly when working with non-traditional companies and small businesses.

Unlike standard FAR-based contracts, OTAs are intended to promote innovation and attract companies that might not otherwise engage with government contracts. By bypassing some of the more cumbersome requirements of FAR, agencies can directly collaborate with businesses to explore creative solutions and emerging technologies.

Why OTAs Matter for Small Businesses

OTAs are particularly appealing for small businesses and non-traditional contractors. The traditional government contracting process is often too slow and cumbersome to keep up with the rapid pace of technological advancement. OTA contracts allow the government to act more like a private sector entity, speeding up acquisition times and reducing administrative burdens.

According to recent discussions in the GovClose Certification Program, led by Rick Howard, the flexibility of OTAs is a game-changer for companies looking to break into government contracting. It's especially true for technology firms developing software, cybersecurity solutions, or digital platforms that require rapid iteration and deployment.

Types of OTAs

There are two main types of OTAs:

1. Research and Development (R&D) OTAs: These focus on innovation and new technologies that haven't been fully developed or tested.

2. Prototype OTAs: These agreements are designed to allow for the development, demonstration, and evaluation of innovative solutions to specific government challenges. Successful prototypes can often transition into follow-on production contracts without competition.

The Consortium Model

One common method for accessing OTA opportunities is through consortia. These are groups of companies, often managed by third-party organizations, focused on specific technological areas. Membership in a consortium provides access to a wide array of OTA opportunities without having to go through the lengthy FAR-based contracting process.

For example, cybersecurity consortia or medical technology consortia can be excellent entry points for companies developing innovative solutions in those fields.

The Future of OTA Contracts

With the Secretary of Defense’s memorandum pushing for increased use of OTAs, especially for software-related acquisitions, the use of OTA contracts is expected to grow significantly in the coming years. Additionally, agencies like the Department of Veterans Affairs and Treasury are launching pilot OTA programs, expanding this streamlined acquisition method beyond the Department of Defense.

Key Takeaways for Businesses

• Speed and Flexibility: OTA contracts are faster and less bureaucratic than FAR-based contracts.

• Access to Innovation: Non-traditional companies and small businesses have a greater chance of success.

• Expanded Opportunities: With more agencies adopting OTAs, businesses should consider adding an OTA-focused strategy to their overall government contracting plan.

• Faster Award Process: Companies can often submit short proposals—sometimes as brief as a few hundred words—and receive feedback or even contract awards in a matter of weeks rather than months or years.

How to Get Started

1. Identify Relevant Consortia: Research and join consortia that align with your industry and technology focus.

2. Engage Early: Build relationships with consortium managers and government customers to understand their needs and tailor your solutions accordingly.

3. Leverage Non-Traditional Status: If you're a small business or a non-traditional contractor, emphasize this advantage in your proposals.

If you are interested in learning more about how to win OTA contracts and other government contracting opportunities, check out the GovClose Certification Program. Rick Howard, former Lt Colonel and Acquisitions Officer with the United States Air Force, has trained hundreds of professionals and businesses on how to break into the world of government contracting.

By understanding Other Transaction Authority and leveraging it to your advantage, your company can gain a competitive edge in the fast-evolving landscape of government acquisition.