BLOG

Other Transaction Agreement

on June 6, 2018

The Fast and the Tedious

Other Transaction Agreements streamline government technology acquisitions

U.S. industry moves fast:  profit motive, anxiety over competition, and constant advances in technology drive rapid evolution. In industry, you move fast or you move aside.  Innovation propels companies; tradition holds them back. That’s both the perception and the reality.

The government, especially the DoD, needs to quickly buy and apply new ideas, processes, and technologies, but too often the rules get in the way.  Federal Acquisition Regulations (FAR)-based acquisitions are designed to minimize the government’s risk in acquiring products and services.

Unfortunately, this traditional acquisition model can be cumbersome, limiting government access to the latest technologies available from industry. The complexity of navigating the FAR excludes participation by “nontraditional” contractors—businesses offering innovative technology solutions, but lacking the contracting resources and experience necessary to work with the government.

Challenges using FAR-based contracting ultimately led certain government sponsors to look outside the FAR for a solution and to charter an enterprise partnership using the Other Transaction (OT) consortium model, a streamlined alternative to the FAR.

Other Transaction authority has been around for a while: the model originated in 1958 at the advent of the Space Age. The Russian launch of the Sputnik satellite in 1957 kicked off a new era in human history and spurred the United States into action.  For the US to catch up, NASA needed to develop unprecedented technologies—and fast. Congress created the first Other Transaction authority as a contractual tool that NASA could use to acquire and apply breakthrough technologies from industry to counter Russia’s head-start in the Space Race.

Today, OTs are used to bring research findings and prototypes from industry to the federal market in areas as diverse as biotechnology, electromagnetic spectrum, and armaments.

In the coming months, we’ll be explaining the Other Transaction (OT)-consortium model through a comprehensive series of eleven posts that will bring you up to speed on how ATI uses Other Transaction authority to bring innovation to government. Up next: a quick run-down of OTs and how they work.

Other Transaction Agreement