Five Reasons for Using “Other Transactions”

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Other Transaction Authority (OTA) provides and alternative acquisition approach to the current “costs too much, takes to long system.”  The current system cannot be fixed; more than three decades of trying with worsening results is testament to this.

Why you should use OTAs:

1. General flexibility. OTA’s are constrained by few hard and fast rules permitting two or more parties to create mutually agreed, productive relationships unencumbered by the strictures of the government’s overly-regulated purchasing system. Actual contracting – freedom of contract: allowing goals rather than rules to be the primary force in forming the contractual relationship.

2. OT’s promote innovative thinking. Freed from process-dominated rules OTA’s facilitate openness to new ideas concerning business practices; ways to avoid non-value added, time consuming processes; and, even innovative technical approaches to problems. Think, achieve.

3. Speed and efficiency. Added time inherent in the process-oriented traditional contracting system costs money and often opportunities. By avoiding unnecessary process OTA’s can streamline and speed project completion. For example, competition can be structured by the needs of the project rather than projects being structured to meet the needs of inflexible rules concerning competition or other processes.

4. Funding flexibility. OTA’s can be structured as fully funded by the government, jointly funded by the government and non-government parties, or unfunded. OTA’s can be funded by third parties. Funds can flow in either direction. Funds coming to the government can be used for additional research and development (R&D) and need not be covered into the U.S. Treasury.

5. OT’s can be attractive to commercial companies. Private sector parties, often referred to as non-traditional companies, can negotiate flexible terms regarding intellectual property and other matters that are critical to their commercial success. They need not adopt government expensive business practices in order to participate in government R&D programs. This provides the government with access to innovative companies that would not do R&D business via the government’s heavy handed, overly-regulated procurement system.   

OTAs and related authorities that permit innovations in contracting and business arrangements can lead to rethinking on a range of related issues. They can be a catalyst for critical changes and innovation throughout the DoD and other federal agencies.

  1. EJH

    Can someone please point me to more resources about UNFUNDED OTs? And, can you please provide examples of unfunded OTs?

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