The Government Accountability Office recently upheld a first of its kind protest of a contract awarded under the non-traditional contracting methodology known as other transaction authority.
The protest and GAO’s decision have stirred debate over the future of OTAs and their potential to fundamentally disrupt federal acquisition.
First, some background. OTAs enable certain federal agencies, most prominently the Defense Department, to enter into commercial contracts outside the constraints of the Federal Acquisition Regulation. Historically, OTAs have been used to engage commercial companies during the research and development of new technologies without burdening them with requirements and costs associated with the FAR, which can be a major disincentive for companies to work with the government.
But the attractiveness of OTAs was often limited by the fact that once a selected technology entered final development and production — in other words, was ready for market — the FAR came back into play, thus obviating some of the very benefits the initial OTA was intended to provide. Advocates have long argued that extending the authority through full production or deployment (known as “production authority”) was the key to their success and to enabling the government’s access to the full range of emerging capabilities. Two years ago, Congress decided to do just that, at least for Defense. And that decision has, in turn, been instrumental in the dramatic spike in OTA activity since.