What the OT?! Other Transactions (OT)

1. Navigating Federal Acquisition 

Navigating Federal acquisition is extremely complex; ergo, most companies take the most well-traveled paths or avoid the Federal market altogether.  Unlike the commercial market, it’s not enough to have a great product at a great price in the Federal space.  One of the most important principles in growing Federal business is to determine the best strategy to get your products and services to the Federal customer.  The basic difference is this; in the commercial space, there’s a customer with a requirement and a vendor with a product to meet the need with limited, if any, competition. In the Federal space, there’s an additional element between the customer and vendor – the CONTRACT. In recent years, as the Federal acquisition workforce has continued to suffer workforce shortages, agencies have sought to decrease the acquisition lifecycle through multi-award and other contract vehicles.  The most popular tend to become ‘must-haves’ and the aforementioned well-traveled path becomes the autobahn of contract vehicles; see the GSA IT Schedule 70.  As Robert Frost reflected, consider the less traveled way; in this case OT.

2. Other Transaction Agreements

Other Transaction agreements are a legally binding instrument used to engage industry or academia, typically for research or prototyping activities. OT are not a standard procurement contract, grant, or cooperative agreement and, generally, is not subject to the same federal laws and regulations applicable to the usual government procurement contracts.  OT agreements come in multiple forms and are typically distinguished according to its purpose:  technology investment (TI) for research (10 U.S.C. 2371) or prototype (10 U.S.C. 2371b) agreements.  OT can allow for much greater speed, flexibility, and accessibility to perform research and prototype activities and can also be used to design and implement innovative business models within the government that would otherwise not be feasible.

3. Eligible to Receive

Any commercial or academic institution is eligible to receive OT agreements; however, OT agreements may only be executed in the following circumstances:

  • The awardee is a non-traditional defense contractor not currently performing and has not performed for at least one-year prior to an OT solicitation:
  • any contract or subcontract subject to full coverage under the Cost Accounting Standards (CAS)
  • any other contract in excess of $700,000 under which the contractor is required to submit certified cost or pricing data
  • The awardee is a traditional defense contractor, but at least one of the following apply:
    • A non-traditional contractor is participating to a “significant” extent
    • The awardee provides a financial or in-kind cost share–typically, a 1/3 cost share is required
  • The Service Acquisition Executive provides a written determination for exceptional circumstances to justify the use of OT for the purpose of executing innovative business models or structures not feasible or appropriate with a FAR-based contract

For mature commercial organizations or new startups, an OT agreement may be the perfect opportunity to take the road less traveled to get to where you want to go in the Federal market.  For more information about Other Transactions and how they may fit into your company growth plans, contact us today!

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