Everything You Needed to Know about OTA but Was Afraid to Ask

 

Other Transaction Authority (OTA) has been getting a lot of buzz in recent months, as the Defense Department has looked to use it to accelerate access to cutting-edge technology. But its growing use also is raising a lot of questions.

OTA refers to an acquisition that is something “other” than a contract, grant or cooperative agreement—so it is not covered by all the same rules that govern traditional acquisitions. This makes it an ideal vehicle for trying out innovative ideas before doing full-scale procurements.

Originally, DOD had the authority to conduct Other Transactions to support research and prototyping for weapons or weapons-related systems. But in the 2015 National Defense Authorization Act, Congress expanded that authority to any program “directly related to enhancing the mission effectiveness of military personnel” and supporting systems (DTIC has a nice recap here).

The benefits of OTAs are clear, especially at a time when the military services are trying to inject more innovation into their operations. In theory, it reduces the risks associated with innovation—namely, investing too much money in a technology or idea that is unproven. Prove it through an OTA first, then you can run a full program with confidence.

But as OTAs are gaining momentum, some DOD leaders are wondering about how to govern their use, both to leverage their benefits and to prevent their misuse. Their questions include:

  • How does the concept of milestone decision authority apply to OTAs?
  • How comfortable are lawmakers with the authority they have granted DOD?
  • At what point does the lack of competition undermine the OTA approach? 

Check out the recommended reading below.

 

READING ROOM

  • OTA contracts are the new cool thing in DoD acquisition (Federal News Radio)  
    "...The Defense Department, the services and some of their components are all trying to jump on the OTA train as Congress continues to grant the military more authorities with the special contracts..."
     
  • USAF head praises OTAs, but warns on micromanagement  
    “…Wilson said other transaction authorities, a contracting tool that allows the Defense Department to carry out experimental projects and rapid prototyping, were ‘tremendously valuable’ but said that OTAs needed milestone decision authority, which allows programs or projects to move through the research and development process, at lower command levels…”
     
  • DISA embraces OTAs (FCW)  
    "...'OTA is a mechanism that forces us and allows us to have that conversation differently,' with traditional DOD industry partners and up-and-coming companies at the table..."
     
  • Why the Army is wary of other transaction authority (FCW)  
    “…The Army wants to be cautious about using agile acquisition authorities too frequently, largely because of oversight risks…”

 

And here’s an interesting sequence of stories:

 

For a more in-depth refresher: 

 

John Monroe

ConnellyWorks, Inc.
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Arlington, VA 22201
571.323.2585
info@connellyworks.com

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