What to Expect from Other Transaction Authorities in 2019

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Though the contract model is well-suited to research and development, expect to see it tried for other things too.

If there is one term that has punctuated government contracting in 2018, it is “OTA.”

The use of OTAs or “other transaction authority” agreements has grown significantly in the federal government over the last year, due to this contract vehicle’s ability to help federal agencies rapidly incorporate new technologies required to ensure the success of today’s complex missions.

Although this style of contract is not new to the federal contracting community (in fact, it was brought onto the scene in the 1950s to aid NASA in the space race), we can expect to see additional use of OTAs to gain access to groundbreaking technologies faster and more efficiently in 2019.

Here are three things we expect to see from OTAs in the next year and beyond.

Growth Outside of R&D

OTAs can be used for a wide variety of contracts; however, OTAs are especially well-suited for research and development. As opposed to a Federal Acquisition Regulation-based acquisition of commodities or services, R&D projects rarely have a specific, known outcome that the contract will yield. Rather, the contracts are often used to prototype and test new solutions to problems. In these instances, it benefits both the contractor and the contracting agency to work together to determine which requirements will be most beneficial for the execution of the contract. It helps tremendously for the government to learn the art of the possible, especially from nontraditional technology providers. OTAs allow this collaboration, rather than forcing agencies and contractors to abide by the often rigid requirements of contract vehicles like the FAR.

Even so, we are beginning to see agencies with other transaction authority use OTAs for contracts that are not traditional R&D contracts. For example, the Transportation Security Administration uses OTAs for things like airport security, education and outreach, and more. As the contract vehicle grows in popularity and awareness, we expect this trend to continue, and OTAs may be used in other capacities where appropriate.

Other Agencies Using OT

Currently, 11 federal agencies have other transaction authority—including NASA, the Homeland Security Department, TSA, Health and Human Services Department, and the National Institutes of Health—but the vast majority of these agreements are executed by the Defense Department. Although OTAs are ideal for Defense ’s accelerating need for R&D projects to keep pace with potential adversaries, we anticipate increased potential for other federal agencies to use this contract vehicle to help them get the technologies they need at the speed they desire.

Although the bulk of OTAs will remain in defense in the near future, other agencies, such as Homeland Security, are beginning to try out the contract vehicle based on the demonstrated successes of Defense OTAs. A proliferation of the model means new uses in new places.

Growing the Use of OTAs as a Whole

While the popularity of OTAs has brought this vehicle into the limelight recently, when we step back and look at the bigger picture, the model actually accounts for a relatively small portion of the overall contracting spend. Out of the $88.3 billion spent on R&D projects by Defense in 2017, only $2 billion was spent on OTAs. This discrepancy demonstrates that, even in the OTA “sweet spot” of defense R&D, there is enormous potential for additional growth. Compound this opportunity with the expansion to other agencies and other contract functions, and we begin to see the revolutionary potential that this model presents in government contracting.

An Evolving Model

Although it remains somewhat uncertain as to how OTAs will be used in federal contracting moving forward, we can be sure to expect that the model will continue to evolve, delivering even greater value to stakeholders as the federal acquisition workforce gains a greater appreciation for the freedom to innovate that the OTA model offers. The major catalysts that will drive that evolution remain to be seen; however, as the technology refresh cycle continues to contract and requirements grow and adapt to help federal agencies succeed in their missions, so too must the contracting vehicles that support them.

Bob Tuohy is the chief operating officer of Advanced Technology International, a consortia-management organization.