Other Transaction Agreement

WHAT IS AN OTA?

An “Other Transaction Agreement” or “Other Transaction Authority” (OTA) is a streamlined purchasing vehicle that brings innovative research findings and state-of-the-art prototypes from industry to the Federal Government. OT-based collaborations are not subject to some of the regulations that apply to Federal Acquisition Regulation (FAR)-based acquisitions. OTAs enable fast acquisition of critically needed technologies in areas as diverse as shipbuilding, armaments, satellites, medical devices, and electromagnetic spectrum technologies.

WHY DOES THE GOVERNMENT USE OTAs?

  • Unlike the FAR (Federal Acquisition Regulation), the OT-based consortium model allows government and industry to communicate more openly, from requirement generation to the proposal stage
  • It affords greater technology and prototype acquisition speed, getting solutions to end users sooner
  • It emphasizes engaging a diverse range of technology suppliers of all sizes, casting a wider net for capturing ideas and innovations
  • OTAs enable faster contracting through long-term agreements between industry and Government that establish baseline terms and conditions (with the flexibility for negotiated modifications on a project-by-project basis)

The OTA-Consortium enterprise is good government in action—the competition it promotes between large, traditional R&D providers, academic institutions, and small and nontraditional suppliers drives innovation across the entire US economy.

In Other Transaction Agreements, Government gains a better understanding of state-of-the-art industry capabilities. Industry gains insight into Government needs, expectations and priorities.

Open Communications = More Relevant Technology Solutions

The Basket Provision

The Basket Provision is another innovative acquisition tool that can be employed within OT-based Consortia.  It is not uncommon for industry to propose technology development projects that cannot go forward due to a lack of available funding at the time the source selection decisions are made, despite being deemed valuable by the Government.  It is also possible that proposed technology development projects may be valid and approved, but not necessary to accomplish immediate Government needs.  In such cases, approved proposals can be held in an “electronic basket” for two or more years.  This allows for subsequent award of the previously-approved proposal in the event of emerging urgent needs, interest in the proposal by a different funding sponsor, end-of-year sweep-up funds or subsequent year funding availability.  The provision also eliminates costly, time-consuming start-from-scratch responses to new requirements or funding opportunities.

Industry submits proposal then government evaluates. If selected and funded, work begins. If selected but unfunded, the proposal foes into the basket. Within 3 years the original sponsor or other sponsors may fund proposals in the basket.

The Basket Provision preserves selected but currently unfunded projects until funding becomes available.

WHY DO I WANT TO JOIN?

Unlike the FAR (Federal Acquisition Regulation), the OT-based consortium model allows government and industry to communicate more openly, from requirement generation to the proposal stage; it affords greater technology and prototype acquisition speed, getting solutions to end users sooner; and it emphasizes engaging a diverse range of technology suppliers or all sizes, casting a wider net for capturing ideas and innovations.

FREQUENTLY ASKED QUESTIONS

Are there membership dues?

Member companies pay annual dues to belong to an OT-based collaboration.

How much are membership dues?

Dues vary depending on size and type of company, differing from consortium to consortium. For CWMD, dues for large businesses are $1,500 annually and dues for small, academic and non-profit entities are $500 annually.

What do membership dues pay for?

Annual dues and project award assessments pay for consortium activities, such as but not limited to consortium support, meeting costs and support, member application processing, membership management (“good standing” tracking, etc.), executing and managing the financial processes, dues and assessment invoicing and collection, communications efforts, business development and strategic planning efforts, maintaining public and private websites, and supporting any other subcontractors.

Is being a nontraditional defense contractor a requirement to join to the consortium?

No, membership is open to companies and universities which are capable of making a technical contribution to the advancement of technology that the consortium operates. Some consortia allow non-U.S. companies to participate.

What is a nontraditional company and how to discern if my company is one?

A nontraditional is a technology provider that does not typically participate in government sponsored research and development. These companies are often small businesses or new companies. They may have innovative technologies, but they lack the contracting resources and experience to navigate the FAR. The OT model is a good way for these companies to access the federal market.

A nontraditional 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 USC 2302(9)

For additional information on the applicability of cost accounting standards, please click here.

How long will it take to get the membership application approved after a company submits?

Typically, one week or less if an application is complete. If an application is incomplete, the Consortium Management Firm will call the applicant to discuss any missing elements.