What is an Other Transaction Agreement (OTA)?

An “Other Transaction Agreement” (OTA) is a legal agreement with the federal government that is not a cooperative agreement, grant, or standard federal contract. OTA contract types have been around since the NASA Space Act Agreement of 1958, but their use is fast growing. Both the number of OT awards granted by the DoD and the dollar amount per award have increased substantially since inception. In short, Government OTAs are legally binding instruments that may be used to engage industry and academia for research and development or prototyping activities.

More than what they ARE, OTAs are typically better defined as what they are NOT. OTAs are not standard procurement contracts, grants, or cooperative agreements. Therefore, they are not typically subject to FAR regulations YET they are still legal and encouraged.

Why use an Other Transaction?

• The customer needs a flexible option to provide commercial-type term contracts to organizations who have innovative solutions (almost exclusively in the R&D space)
• The team is developing and researching processes, prototypes, or technologies for the advancement and testing of the feasibility of a technology
• A non-traditional company has a solution that the federal customer can utilize but needs to circumvent flexible IP rights and to lower the barrier to entry for the non-traditional
• There is an emphasis on trying to attract and recruit innovative, non-traditional companies to participate in government R&D projects
• The customer is looking for a reduction in program costs: streamlined management and processes of OT projects can result in accelerated timelines and reduced administrative cost

Other Transaction Agreements (OTA) vs Federal Acquisition Regulations (FAR) Contracts

What’s the difference?

• OTAs have a $500 Million cap (or require special approval) but are typically less expensive to implement
• OTAs have a better opportunity for negotiating clauses such as IP & Data Rights for both the customer and the small business
• OTAs are more accessible to Non-traditionals and Small Businesses without the strain of the technicalities associated with a FAR-Contract, allowing the government to source solutions from commercial enterprises
• OTAs have far more flexibility than FAR Contracts for the government in sourcing innovative solutions

When to use an Other Transaction Agreement (OTA)?

To be eligible to utilize OT Authority one of the following two criteria must be met:

• The company being awarded is a NTDC*
• The company being awarded is a traditional defense contractor with one of the following additional criteria:
  • One or more non-traditionals and/or nonprofit research institutions are participating to a “significant extent”
  • All participants other than the Federal Government are small businesses (this applies to SBIR/STTR participants as well) or non-traditionals
  • The organization being awarded has a financial or in-kind cost share of at least 1/3. (Noting that in general, the Government does not mandate cost-sharing requirements for specific defense items)
  • The Senior Procurement Executive of the agency provides a written determination that justifies the use of an OTA due to needs set outside the bounds of a FAR-based contract (rarely used, if ever).

*As defined10 U.S. Code § 3014, a “nontraditional defense contractor” means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any contract or subcontract for the Department of Defense that is subject to full coverage under the cost accounting standards prescribed pursuant to section 1502 of title 41 and the regulations implementing such section.10 U.S. Code § 3014, a “nontraditional defense contractor” means an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the Department of Defense for the procurement or transaction, any contract or subcontract for the Department of Defense that is subject to full coverage under the cost accounting standards prescribed pursuant to section 1502 of title 41 and the regulations implementing such section.

REI Systems’ OTA/Consortium Participation

SOSSEC, Inc. exists to manage consortium-based OTAs by providing the expertise and infrastructure required to effectively and efficiently manage the OTA project life-cycle.

The SOSSEC Consortium was specifically formed to address the needs of the Department of Defense (DoD). It was founded on a simple concept: that collaboration, innovation, and cooperation among a broad spectrum of industry, academia, and non-profit entities are necessary for delivering top-quality service and innovative technology solutions to clients.

Through mission-oriented oversight, spirited competition, and an ever-expanding membership base offering a massive variety of capabilities and tech solutions, SOSSEC, Inc. ensures consistent delivery of top-notch prototype solutions executed within cost, schedule, and technical performance expectations.