OTAs Time May Finally Have Come

Yesterday morning I read in Defense News that the use of Other Transactions Authority (OTA) has grown nearly 500% in the past 5 years in DOD alone. And DOD is not the only agency that has the authority to use OTAs as a procurement method. DOE, ARPA-E, NIH, TSA, and DHS are a few of the agencies that also have authority to issue contracts not subject to the traditional FAR contracting process. (A full listing of agencies with this authority along with links to the legislation can be found here.)

What is driving this increased use of OTAs?

According to Stan Soloway in Defense News, this increase is in part due to growing unhappiness of government customers and their frustrations with the traditional acquisition process. And I agree. Contracting professionals and their internal government customers who have critical missions to carry out on behalf of citizenry are on the same acquisition team. However, the teams appear to have problems agreeing on an approach that will satisfy both the need for speed and innovation and the demands of a rigorous set of rules and regulations that have not yet been adapted to account for the changes caused by advances in information technology.

In 2016 Congress directed the DOD to convene a panel to recommend what needed to be changed or eliminated form DOD’s contracting process in order to streamline and improve the efficiency and effectiveness of the acquisition process and maintain DOD’s technology advantage. This panel, known as the Section 809 panel has just issued their first report. Not surprisingly, they too touch on the increased use and award of OTAs. In their general comments they note that consortiums that pool companies with special technical capabilities and service offerings CAN help DOD collaborate and compete with one another to purchase innovative products and services. NSTXL is one such consortia as they help small businesses pursue and receive OTA awards within about 3 months. There are many consortia that focus on different needs.

However, consortia managers are not incentivized to recruit new members with newer and better technology. Nor do they generally perform technology-scouting to help DOD locate new technologies. While the speed and form of OTA awards deliver benefits to DOD, OTAs do not solve all of the problems the government experiences in locating and accessing new and innovative products and services. Nor do they solve the organizational and cultural issues that currently appear to be hyper focused on rules and the elimination of all risks, which of course results in unacceptable mission delays.

Still it is worth noting that OTAs did not escape their notice. This same report defines four “lanes” of procurement from which a DOD procurement may choose when determining the acquisition plan.

1. Readily available products and services
2. Products and services requiring minor customization
3. Products and services requiring major customization
4. Products and services uniquely developed for DOD

The report seems to indicate that the panel is leaning towards separate rules and processes for each of these lanes. For me, it’s not hard to imagine that OTA awards can, and should, play a major role in making it easier, faster and cheaper for the government to buy the products and services it needs to do the business of the people.

Will DOD Leadership Embrace OTAs Going Forward?

When you factor in the desire of DOD Undersecretary Ellen Lord to reduce acquisition time by half, it seems that the time to leverage Other Transactions Authority may have arrived.

Stay tuned.

Leave a Reply

Your email address will not be published. Required fields are marked *