TRANSCOM | The Contracting Education Academy

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.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=708740

Last week, the Department of Defense (DoD) issued a five-year, $950 million award to REAN Cloud to provide cloud adoption services to DoD agencies. DoD utilized its Other Transaction Authority (OTA) for the $950 million award as a follow-on to what was originally an OTA award to REAN for migration services valued at approximately $6 million.

The OTA process enables DoD to enter into agreements with industry and/or academia to provide research and development or prototyping work. In particular, the OTA process provides a means for DoD to access nontraditional vendors, such as those who have not engaged in cost contracting for a period of time. These agreements are not contracts, grants, or cooperative agreements, and they are generally exempt from the rules and regulations found in the FAR or DFARS. Recently, Congress expanded this authority for DoD.

When utilized effectively, OTAs can provide many benefits, including reducing red tape, increasing competition, enhancing DoD access to cutting-edge technologies, and allowing for quick implementation of innovative solutions. As with any procurement decision, however, there are many trade-offs that should be considered, especially considering the fact that the OTA process also can be less transparent than a FAR-based contract.

Keep reading this article at: https://federalnewsradio.com/commentary/2018/02/other-transaction-authority-a-tool-in-the-toolbox/

GAO sustains Oracle’s ‘other transaction authority’ protest

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.

Other Transaction Authority: A tool in the toolbox

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