Other Transaction Agreements (OTAs) offer agencies ready access to cutting edge technologies only available from companies that don’t typically work with the government
The government needs innovation from small and emerging companies, which is where many breakthrough technologies are created. For these small companies, government work represents a terrific business opportunity.
So why are so few small companies involved in federally-funded research? Because they are what they are: researchers, technologists, innovators, and creators. These startups and small businesses simply don’t have the contracting experience to navigate the FAR and often lack the financial and accounting systems required to do business directly with the government.
The engagement of these “nontraditional” contractors—companies that have not performed major work for the government in the last year—is a hallmark of the Other Transaction Agreement (OTA) model. The big guys often partner up with the little guys. They learn from each other. Everyone wins (except for our adversaries).
With an average membership makeup of 73% nontraditionals, substantial participation of small businesses, nonprofits, and academic institutions typical of ATI-managed consortia. Nontraditional participation is even greater in a number of our programs: nontraditionals make up 149 of 180 members (82%) of the Medical CBRN Defense Consortium (MCDC) and 169 of 213 members (79%) of the Countering Weapons of Mass Destruction Consortium (CWMD). Moreover, nearly every project across all of the ATI-managed OTA consortia involves significant nontraditional participation.
This nontraditional involvement brings radical innovation to research and prototyping work, enhancing government capabilities.
Other Transaction Agreements improve Government/Industry Communication
The Other Transaction (OT) model enables open communication between government and industry. Unlike traditional contracts, there are few rules about how and when parties can talk under OTs. This helps government learn about and better understand industry capabilities, and it lets industry better understand government requirements.
When government and industry communicate before and, especially, after releasing a request for proposals under an Other Transaction Agreement (OTA), government can identify and access promising new technologies, while industry can tailor their responses to meet government needs.
These insights from government also help industry focus their own investments (known as Internal R&D, or “IRAD”) on technologies that represent new opportunities. Well-targeted IRAD is a big win for the government, since agencies don’t have to pay to build technologies from scratch. Rather, government pays much less to customize what industry has already built using private money.
Robust government-industry communication is a hallmark of OTAs that leads to better technology outcomes and smoother acquisitions for industry and government alike.
Other Transaction Agreements give government access to groundbreaking R&D in a fraction of the time it takes under the FAR
The efficiency of the Other Transaction (OT)-consortium model makes OTAs extremely fast compared to typical government-funded prototyping projects. The average solicitation timeline in ATI-managed consortia—from releasing a solicitation to beginning project work—is less than 90 days. In many cases it’s much faster, as the process is designed to go as fast as the government customer and consortium members want it to go.
The below timeline shows how the OTA cycle stacks up against FAR solicitations.
This timeline assumes that the process operates optimally—actual FAR timelines tend to be much longer where the number of proposals overwhelms the government’s internal capacity for review or where extended contract negotiations or protests occur.
On the other hand, under the OT consortium model, timelines in “shared responsibility” areas can shorten over time as cycle-to-cycle learning curves improve.
Timeline comparison between FAR and OTA
One particular advantage of the using an OTA in partnership with a CMF is the consortium manager’s ability to surge resources to perform tasks that the government would be required to perform under a FAR-based contract. There are significant time savings when the government and consortium share responsibilities and maintain an open dialogue.
For instance, when the Air Force Research Lab needed to make an urgent end-of-year award, the ATI-managed National Spectrum Consortium helped the government release a project solicitation quickly. ATI’s internal team organized multiple “Industry Day” events for members to learn about the technology need. The Air Force awarded the project within 60 days and work started only 71 days after announcing the solicitation—much sooner than projects can be awarded under a traditional approach.
OTA Consortia Democratize Government Contracting for Small Businesses and Nontraditional Contractors
Through OTA consortia, small businesses and academic institutions can bring innovative technologies to the DoD to advance critical defense capabilities
This week, we’re looking at how diverse OTA consortia of government, industry, and academic organizations can better support federal contracting through collaboration with small businesses, large businesses, and academia. By bringing together the groundbreaking technologies from small businesses and academic institutions and the production and integration capabilities of large companies, diversity in federal contracting ultimately improves defense capabilities.
Before we begin explaining how OTAs democratize government contracting, it may be helpful to understand the current state of this market. Historically, the federal government has awarded most of its big contracts to large contractors in order to meet the substantial procurement needs of federal agencies. As the missions of these agencies continue to grow in both scope and complexity, only companies with the infrastructure to support wide-reaching national and international missions have the resources necessary to complete considerable initiatives or meet strict contracting, accounting, or security requirements.
The federal market offers significant opportunities for small and emerging business that can meet critical government technology needs: in 2017 alone, the federal government spent $3.98 trillion across all of its contracts with U.S. businesses, benefitting both these federal agencies and the domestic companies providing the talent necessary to complete that contract work. However, due to the nature of government contracting, in which large sums are often allocated to a single large vendor, small businesses and nontraditional contractors have typically been unable to participate in this “built for titans” contracting market. In the long run, this approach can restrict the government’s access to innovative technologies available from across industry.
Join us next time to learn how nontraditional contractors can offer better solutions to many of the government’s challenges!
The flexibility of OTAs makes it possible for the government and industry to use a single consortium management firm for all of their contracting and administrative needs—meaning government and industry can focus on building better technologies
You’ve already learned about how the government partners with an industry consortium through an OTA in Other Transaction 101. However, the benefits of an OTA are enhanced when the government and industry work with a consortium management firm.
Usually, the consortium management firm (CMF) handles the business operations of the consortium, dealing with all the contractual interactions needed to assemble project teams and dissolve them when the work is completed, taking care of contracting, payments, cost analyses, negotiations, IP issues, and all the other mundane tasks needed to enable the exciting prototype work. For the Government, this means the best of both worlds: the ease of one-stop shopping, coupled with easy access to innovations from flexible, as-needed industry teams.
The CMF can award projects one-by-one (as directed by the government), or it can use a streamlined approach where all Government contracting decisions are communicated through a single Agreements Officer to the CMF, which then places projects on award. In some OT-consortia, the consortium or CMF has very little involvement in technical/cost evaluation of project proposals. Others use non-Government subject matter experts to inform Government source selection bodies about the technical and/or commercial merit of project proposals submitted by consortium members.
Ultimately, allowing a CMF to take on some of the burdens of contracting meanings that the government can focus its time and resources on finding the technologies they need, and industry benefits from faster, simpler contracting.
Single Point Contracting Process for the OT Consortium Model
Other Transaction Agreements get rid of many of the contractual hassles of FAR-based technology acquisitions
In our previous post, we explained how Other Transaction (OT) authority, an alternative to cumbersome Federal Acquisition Regulation (FAR)-based acquisitions, brings groundbreaking technologies to the government quickly and efficiently [Link]. Today, we’ll give you the need-to-know about this innovative acquisition model.
Unlike the FAR, Other Transaction Agreements (OTA) are designed to allow fast purchases of rapidly changing technologies, making them ideally suited for research and development work. In particular, OTAs address FAR challenges to R&D like these:
Expensive and inefficient FAR-based acquisition requirements because of poor communication between government and industry.
Inability to attract and engage technology providers of interest to the government
Intellectual property disputes
Limited technology transfer to practice
Cumbersome and slow contracting processes
There are two types of Other Transaction (OT) vehicles: the Other Transaction for Research – fundamental, applied, and/or advanced research and development; and the Other Transaction for Prototypes – critically needed prototype development from an expanded technology based.
Other Transactions are particularly effective when the government partners with an industry-based consortium. In Other Transaction (OT) authority consortia, the government can be represented by a single “sponsor” (like a program executive office) or multiple sponsors coordinated through a lead agency. The consortium is made up of organizations with technology development skills in a specific area of interest, like:
For-profit companies, including small and nontraditional businesses;
Not-for-profit/nonprofit organizations; and
Academic research institutions.
These consortium partners are connected through a binding instrument called an Other Transaction Agreement (OTA). OTAs lower the barriers to participation by innovative small businesses and nontraditional contractors.
On the whole, the OT consortium model creates…
True “enterprise partnerships” between government and an industry-academia consortium where collaboration and dialogue happen throughout the acquisition cycle;
Innovation through participation by “nontraditional” defense contractors (firms who have never before worked with the government); and
Better outcomes in less time without sacrificing competition at the project level.
Next time, we’ll give you an overview of Other Transaction Agreements that exist today, which cover technologies ranging from shipbuilding and ship repair to the electromagnetic spectrum, from to biomedical capabilities to and space, and from armaments to aviation.
There are 23 Other Transaction (OT) authority consortia currently providing the government with access to diverse range of cutting-edge research and prototypes.
Last post, we gave a quick run-down of Other Transaction Agreements (OTA) and how they work. Today, we’ll show you how they’re being used by the government to access innovation.
Other Transaction (OT) authority is currently used to bring research findings and prototypes from industry to the federal market in areas as diverse as biotechnology, electromagnetic spectrum uses, and armaments technology. Other Transaction Agreements (OTA) enable quicker technology and prototype acquisitions, bringing solutions to end users sooner.
OTs also create a long-term channel for the government to collect industry input and feedback on rapidly evolving technologies. The collaborative nature of this model and its emphasis on engaging nontraditional technology suppliers casts a wider net for capturing ideas and innovations than available under the FAR.
For participating companies, the model lets them weigh-in on critical technology issues and gives them a voice to inform government technology requirements. The Other Transaction (OT) authority consortium fosters technology transition partnerships between small technology innovators and large system integrators. And its agile contracting features help government meet obligation benchmarks.
ATI has emerged as the leader in OTA collaborations.
Of the 23 Other Transaction (OT) authority consortia in operation today, ATI performs consortium management services for eleven of them.
Join us next time for some one-stop shopping using Other Transaction Agreements!
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.