Other Transaction Authority (OTA) Trends, Points of Interest, and Entry Points

Published: September 07, 2018

USAFARMYDEFENSEDefense & AerospaceDHSInformation TechnologyNAVYProfessional ServicesResearch & DevelopmentTSA

Who are the top vendors? What are the various consortia? Which agencies and offices have used OTA agreements most frequently? What are the various ways OTA opportunities appear? We will seek to explore these and other questions surrounding the OTA market, entry points, and how to effectively stay on top of related developments.

A look at the OTA market through 7 charts: Notable Trends and Points of Interest

1) Trend: Total OTA spending (see first chart), as well the total anticipated value of OTs awarded (see second chart), indicate increasing momentum in the use of OTs.

Some additional context for the above graph:

For FY 2016, FY 2017, and FY 2018, the combined total estimated value of OTs awarded is just above $40B. However, the bulk of this needs to be looked at as ‘potential value’, rather than as a fixed value of OTs awarded. Why? 89% of the $40B is made up of six Other Transaction Agreements (OTA) that mimic some Broad Agency Announcements (BAA), in that they have an estimated potential value attributed to them, and through which Consortium members ‘compete’ (using procedures similar to BAAs) for individual prototype projects. These are not ‘ceiling values’ as with MA/IDIQs, but an estimate of the potential value of projects expected to be issued under the respective OTA.

The six referenced OTs are as follows:

  • Medical Countermeasure Systems OTA awarded in FY 2016 (with a potential total value of $10B)
  • Ground Vehicle Systems OTA awarded in FY 2017 (with a potential total value $2B)
  • C5 OTA awarded in FY 2017 (with a potential total value $2B)
  • CEED OTA awarded in FY 2017 (with a potential total value $2B)
  • Countering Weapons of Mass Destruction OTA awarded in FY 2018 (with a potential total value $10B)
  • DoD Ordnance Technology Consortium OTA awarded in FY 2018 (with a potential total value $10B)

2) Trend: The consortium model for awarding OTs has been heavily used, and its use has been increasing.

3) Point of Interest: The Army has been the most avid user of the Other Transaction Authority. The two charts below highlight spending by Contracting Agency and by Funding Agency.

Some additional context for the above graph:

“Dept of the Army:”

Of the $4.8B spent through the Army, just over $900M was funded by agencies other than the Army. In other words, agencies are leveraging Army contracting, particularly ACC APG Aberdeen Division A.

Also, of the $4.8B spent through the Army, over $2.3B was issued through the DOD Ordnance Technology Consortium OT (W15QKN1491001)

Some additional context for the above graph:

  • “Funding office not reported”: while a “Funding Office” was not reported for the contracts that make up this spending, 95% (or about $944M) of the spending was done through DARPA contracting, followed by $44M through Army contracting. In other words, the third largest funding source after TSA is likely to be DARPA.
  • “Dept of the Air Force”: For the Air Force, 79% of the activity noted above went through the four Rocket Propulsion System Prototype OTs (FA88111690001, FA88111690002, FA88111690003, and FA88111690004).
  • “Dept of Defense”: Activity designated with “Dept of Defense” as the Funding Agency includes offices such as OUSD(ATL), Washington Headquarters Service, DTIC, and others. 61% of the $535M noted above is attributed to using the Spectrum OT Agreement. 97% of the referenced spending lists Army as the contracting activity.?
  • “Dept of the Navy”: Unlike the prior agencies, Navy OT spending is more evenly distributed across different agreements. The bulk of their activity goes through the C5 OTA, which makes up 31% of the $118M noted above.

4) Point of Interest: The top 15 OTA vendors account for about 74% of OT spending during the FY 2013 to FY 2018 period. 

Some additional context for the above graph:

The vendors listed above reflect how they are reported. Below are some important caveats to keep in mind:

  • ATI: ATI is not the recipient of the dollars obligated. It manages a number of consortia through which the government has issued OTs. Which consortium member ultimately received the award cannot be seen from the above.
  • Consortia vs Consortium Management Firms: Spending, as reported, is being attributed to both the firms managing consortia (e.g. CMG, ATI, NCMS, SOSSEC), and in some cases, to the consortia themselves (e.g. CEED, C5). In the above graph, CEED and C5 are both consortia managed by CMG. All three have spending attributed to them.

5) Point of Interest: The top 15 OTA agreements account for about 65% of FY 2013 - FY 2018 OT spending. Below is a list of these top 15.

Other Points of Interest:

The FY 2019 NDAA does make some changes to the text of Section 2371b, most notably with respect to defining the terms for follow-on production.

Section 2371b gives DoD authority to “carry out prototype projects using a legal instrument other than a procurement contract, grant, or cooperative agreements under the authority of section 2371”. It also authorizes DoD to issue a follow-on production contract without the use of competitive procedures provided a prototype project was successfully completed and the initial OT competitively awarded.

The FY 2019 NDAA adds further language to this, stating that a follow-on production contract can be awarded when the prototype is successfully completed as part of a consortium.

Thus far, very few follow-on production contracts have been put into place. In 2017, the Defense Innovation Unit (DIU, formerly DIUx) moved two OTs to production. One was a cloud computing contract to REAN Cloud (which did not proceed following a GAO decision to sustain a protest from Oracle). The other was a follow-on production contract to World Wide Technology for an End Point Management Solution.

The FY 2019 NDAA, also includes requirements for Congress to be briefed on OTA activity. No-later-than than May 1, 2019, the Under Secretary of Defense for Research and Engineering is to submit to Congress a report on DIU. In addition, no-later-than December 31, 2018, and each December 31 through 2021, the Secretary of Defense is required to submit a report on DoD’s use of OTA.

Entry Points:

Other Transactions, by design, are not bound to a single methodology as far as how they can be announced or put into place. With that, there are variety of entry points for companies looking to do business in the OTA market. These include, but may not be limited to, the following:

  • Broad Agency Announcements (BAAs): OTs are among the several contract types that can result from a BAA (in addition to cooperative agreements, grants, and procurements contracts)
  • Federal Procurements Websites: Stand-alone announcements of efforts that are anticipated to result in OTs can occur through sites like FBO
  • Defense Innovation Unit (formerly DIUx): DIU was launched in 2016, and issues OTs using Commercial Solution Opening (CSO) procedures. As of its 2017 Annual Report, the organization had initiated 61 projects. Army Contracting Command New Jersey provides the contracting support.
  • Phase within a traditional procurement: An example is the Air Force’s Military GPS User Equipment (MGUE) program. The second increment will be utilizing the Space Enterprise Consortium (SpEC) for risk reduction / prototyping.
  • Commercial Solution Openings (CSOs): DIU utilizes CSO procedures, but CSO-based efforts are also announced through procurement websites like FBO and the FEDSIM CSO page.
  • Partnership Intermediary Agreements: PIAs have been used to establish the various ‘WERX’ organizations / innovation centers / tech accelerators such as SOFWERX, AFWERX, DEFENSWERX, ERDCWERX, MGMWERX, DreamPort, and the Dolittle Institute. Requirements going through PIAs can utilize a number of acquisition methodologies, to include 2371b authorities.
  • Multi-year Open Solicitations: Similar to open BAAs, but specifically for Prototype OTs. One example is the DHS Silicon Valley Innovation Program.
  • SBIRs: The FY 2018 NDAA included express authority to allow for the award of OTs for Prototypes in the Small Business Innovative Research Program (SBIR).
  • Middle-Tier Acquisitions (aka Rapid Prototyping / Rapid Fielding): Per Section 804 of the FY 2016 NDAA, once a program designated as a Middle-Tier Acquisition is ready to proceed to the acquisition phase, contracting officials are to use, wherever possible, expedited means for the procurement. This includes but is not be limited to IDIQs, OTAs, and PAR Part 12 procedures.
  • Consortia: Consortia have become the primary means through which OTs are being into place. Below is a list of some of the main consortia:
National Armaments Consortium Consortium for Energy, Environment and Demilitarization (CEED)
Border Security Technology Consortium Consortium for Command, Control, Communications in Cyberspace (C5)
Vertical Lift Consortium System of Systems Consortium
National Spectrum Consortium National Advanced Mobility Consortium
Medical Technology Enterprises Consortium Sensors, Communications and Electronics Consortium
Medical CRBN Defense Consortium National Security Technology Accelerator (NSTXL)
American Metalcasting Consortium Training and Readiness Accelerator
Consortium for Execution of Rendezvous and Servicing Operations National Center for Manufacturing Sciences
Countering Weapons of Mass Destruction Consortium Aviation and Missile Technology Consortium
DoD Forging Consortium Information Warfare Research Project
Space Enterprise Consortium Defense Automotive Technologies Consortium
Undersea Technology Innovation Consortium National Aviation Systems Consortium
Cyber Apex Solutions Naval Surface Technology Consortium

The GovWin Opportunities portal and database, using a saved search or combination of saved searches, can help interested vendors stay on top of these various entry points into the OTA space.

(This section was updated on August 21, 2019)