GAO’s much-anticipated decision in Oracle America, Inc. confirms that GAO will not hesitate to review the details of an agency’s use of its Other Transaction Authority (OTA) in lieu of issuing a procurement contract.
GAO determined that the US Transportation Command (TRANSCOM) both: (a) failed to properly provide for a follow-on production contract in its initial “prototype OTA” instrument, and (b) issued its sole-source production order before the prototype was complete, in violation of the requirements of the statute that provides OTA.
The Oracle decision acts as a shot across the bow to agencies exploring OTA agreements as alternatives to traditional contracting. OTA is not new, but the recent advent of using OTA for follow-on production contracts, combined with increased government interest in using creative alternatives to traditional procurement procedures, has made OTA agreements particularly popular in recent years. While GAO will not review an agency’s award decision once it properly elects to utilize an OTA agreement, GAO will examine the transaction to assess whether the agency properly chose to use an OTA agreement instead of a procurement contract. That is the context in which GAO sustained Oracle’s protest of TRANSCOM’s OTA award. GAO did not seek to limit TRANSCOM’s ability to use OTA, and specifically declined to find that the agency was obligated to use FAR-based procurement. Rather, GAO identified specific process flaws and implied that had the agency written its prototype OTA award slightly differently, and waited slightly longer for completion of the prototype project before issuing its follow-on production order, there may not have been a problem from GAO’s perspective.
The Oracle decision does not prevent any agency from seeking to obtain the flexibility and lower administrative burden that comes with OTA, but instead cautions that GAO will not shy away from policing compliance with the strict letter of the statutory provisions that provide OTA.
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And the best thing about it is that contractors, academics, or whoever comes forth to compete for this money can ignore the Federal Acquisition Regulation, the dreaded FAR, and do an end run around its notorious red tape.
Long lead times and complex, overwrought requirements have made acquisition one of the main impediments to successful information technology procurements in the federal government, resulting in no shortage of handwringing over the rules included in the Federal Acquisition Regulation that govern most transactions. But there is another way, if program managers, contracting officials and agency lawyers are willing to take a chance.
Today more than ever, however, the federal government is making use of cutting-edge procedures and methods to attract commercial companies to government contracting and to encourage modernization and efficiency in procurements.
