What is Other Transaction Authority

History

Since the end of the Cold War, the balance of the nation’s investments in research and development activities have shifted from Government to the commercial sector, with commercial expenditures now dwarfing Federal expenditures. Recognizing this shift, Congress embarked on a series of acquisition reforms to transform the defense acquisition system, built to support Government funded and led research and development, to an adaptive acquisition system better able to leverage commercial innovation and industry investments in technology. One significant reform was Other Transaction (OT) Authority.

A New Approach

OT Authority originated in 1958 with the creation of NASA. Congress extended its use to the DoD in the FY1990 National Defense Authorization Act to provide defense program managers with the flexibility to adopt and incorporate acquisition processes that are closer to Business-to-Business than Government-to-Business. Because Other Transaction Agreements (OTAs) awarded pursuant to this Authority are not subject to the Federal Acquisition Regulation (FAR), and many other regulations associated with Federal contracting, the DoD has been able to broaden its available technology base by using this streamlined, agile acquisition tool rapidly to find, collaborate and contract with innovative commercial companies and institutions not previously interested in entering into burdensome FAR contracts.

Accelerate

OTAs accelerate the development and delivery of new technologies, products and services and lowers costs by increasing competition and enabling more flexible and efficient project design and execution. Furthermore, OTAs provides for seamless transition from prototype development, across the valley of death, into follow-on production. And the cost share provision under OT Authority allows for simple integration of private capital to deliver projects at the speed of science versus the speed of budget. Put simply, OT Authority enables Government to function more like Business.

Why Use OTA?

Speed – Projects can be awarded in as little as 60 days.
Broadens the industrial and technology base available by providing a pathway for “non-traditional” entrepreneurs and innovators to participate in federal acquisition.
Lowers cost by increasing competition.
Serves as a platform for public/private collaboration to enable the Government to leverage commercial innovation and investments in technology.
Enables more flexible and cost-effective project design and execution.
Provides for seamless transition from prototype development, across the Valley of Death, into production.