Georgia Tech Procurement Assistance Center

Journal article: OTAs are government contracts, and why it matters

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Readers of this Journal are likely aware of the burgeoning interest in Other Transactions and Other Transactions Authority (OTA).  Some believe that agencies endowed with OTA are free from the traditional rules of procurement contracting when forming Other Transactions.  With the freedom of OTA, the theory goes, agencies can contract with the most innovative commercial firms, which might otherwise decline the boilerplate terms and compliance burdens associated with procurement contracting.  This article is a reminder that the authority to create an Other Transaction is, at bottom, the authority to create a government contract.  It first explains why Other Transactions qualify as contracts and then begins exploring the implications of the contractual nature of Other Transactions.  Any private party entering into an Other Transaction should be aware of the significance of contracting with the United States.  OTA might clear away many burdensome procurement statutes and regulations, but principles of sovereign immunity and separation of powers, along with the pervasive precedents of the United States Court of Appeals for the Federal Circuit, will continue to ensure that doing business with the federal government, even by “Other Transaction,” is never quite the same as doing business in the commercial market.

Continue reading at:  Arnold & Porter

OTA agreements exploding in popularity

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The Defense Department is ramping up spending on other transaction authority agreements, according to a recent report by big data analytics firm Govini.

The agreements are a contracting mechanism intended to cut through bureaucratic red tape associated with the Pentagon’s standard acquisition practices, and help the department tap into innovation from nontraditional suppliers.  The 2016 National Defense Authorization Act expanded their application.  OTAs are now available for basic, applied and advanced research projects and for prototype projects and follow-on production, noted the Govini report titled, “Evaluating the Innovative Potential of Other Transaction Authority Investments.”

“To ensure U.S. military advantage, it is imperative for DoD to partner with businesses and academia to incorporate innovative technological advancements into military capability,” the study said.  “DoD is increasingly using OTAs to leverage commercial technology for research and prototyping.”

Following the change in the NDAA, obligation totals grew by 122 percent, eventually reaching a total of $3.4 billion in fiscal year 2018, according to the report.

Continue reading at:  National Defense Magazine 

Defense dominates experiment in streamlined bidding for innovation

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Streamlined solicitations for innovative commercial products and services, known as commercial solutions openings are beginning to take off in the Defense Department. Even the General Services Administration’s CSO service, which is open to all agencies for a fee, so far has been dominated by Defense users.

CSOs aren’t as well known or broadly used as their procurement-innovation cousin, other transaction authority, which gives agencies the ability to strike contracts outside the Federal Acquisition Regulation for research, prototypes and production to obtain technology from nontraditional defense contractors. Eleven agencies including Defense have OT authority.

GSA’s CSO holds the potential to bring civilian agencies, most of which don’t have OT authority, the ability to reach out to and select suppliers unencumbered by the Federal Acquisition Regulation. So far, civilian agencies haven’t been biting, but Pentagon organizations are, even though they have their own CSO provider.

The very first GSA CSO customer was none other than the Defense Innovation Unit, a once-experimental buying organization that invented CSOs. Originally designed to lure emerging companies to work for the Pentagon by easing the pain of federal procurement processes, the Defense Innovation Unit Experimental, or DIUx, lost the X last summer, when it was designated a permanent outpost for testing defense buying boundaries.

Keep reading this article at: https://www.govexec.com/excellence/management-matters/2019/03/defense-dominates-experiment-streamlined-bidding-innovation/155373/

GAO continues to expand the scope of ‘prototypes’ that DoD may buy through OTs

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The most common question heard about the recent boom in the Department of Defense’s spending on other transactions, or OTs, is a simple one:  How can I get in on the action? 

Understandably, OTs – essentially contracts not subject to procurement laws or regulations like the Federal Acquisition Regulation (FAR) – are very enticing to traditional and nontraditional contractors alike.  And opportunities for OTs abound, particularly since Congress, in 2015, codified the DoD’s authority to award OTs for “prototype projects” (previously just a pilot program) and expanded that authority to include OTs for follow-on production efforts.  But there are limits to DoD’s authority, foremost being that, in general, DoD may acquire only “prototypes” through OTs, and must buy all other goods and services through traditional, FAR-based procurement contracts.

So the question of how to access DoD’s surge in OT funding hinges, among other things, on more specific questions:  What exactly is a “prototype”?   And do my offerings fit the bill?

The answers, it seems, are quite a lot and probably yes.  Congress provided very little legislative direction, instead leaving to DoD the decision over just how broad its authority might reach.  Unsurprisingly, it took a broadminded approach to the term “prototype,” and so far the Government Accountability Office (GAO), as legislative oversight, has upheld the DoD’s expanding interpretation.  This continued in ACI Technologies, Inc., B-417011, Jan. 17, 2019, 2019 CPD ¶ 24, where the GAO found the DoD properly awarded a prototype OT for, among other things, training programs, skills development outreach, and the drafting of best practices for fostering commercial development of secure electronic parts.

Specifically at issue in ACI Technologies was a solicitation by the Naval Surface Warfare Center seeking a firm to manage a consortium of contractors in support of the agency’s Strategic & Spectrum Missions Advanced Resilient Trusted Systems (S2MARTS) initiative.  This initiative’s stated goal is to obtain “innovative technological solutions to address current and future security threats in the electromagnetic spectrum (EMS), trusted microelectronics, and strategic missions hardware environments,” which includes “developing a relationship with industry and academia to establish streamlined processes for obtaining innovative, State-of-the-Art (SOTA) technologies” and “establishing an agile and collaborative working relationship amongst the Government and academia/industry.”

Keep reading this article at: https://www.jdsupra.com/legalnews/gao-continues-to-expand-the-scope-of-91815/

For more information about OTs, see the Defense Acquisition University’s OT Guide at: https://aaf.dau.mil/ot-guide/

GTPAC hosts ‘Creating the Next: Defense Innovation Conference’

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The Georgia Tech Procurement Assistance Center (GTPAC) recently sponsored an event where 200 small innovative tech companies learned about special funding opportunities and programs that are available to small businesses at the Department of Defense (DoD), including the Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs.

“The goal of the January 14th conference was to help small companies, especially small technology companies and innovative manufacturers, learn about how they can do business with the Defense Department and its various components,” explained Andrew Smith, GTPAC’s program manager.  “We wanted to have an event where we could educate the small business community about DoD opportunities.”

GDX connects Georgia businesses with each other and with DoD contract opportunities.

The event featured numerous prominent speakers.  Khai Edouard, the co-founder of the technology consulting firm The Simple Vue, spoke about the Georgia Defense Exchange (GDX), a technology platform that was built for the Georgia Department of Economic Development that helps government defense contractors network with other contractors and find contracting opportunities with DoD.  Contractors can access the Georgia Defense Exchange at https://gdx.georgia.org

The National Security Technology Accelerator prospects, vets, and develops technology.

Tim Greeff, the founder, and CEO of the National Security Technology Accelerator (NSTXL), which prospects and develops innovative technology for the Department of Defense, spoke about Other Transaction Authority (OTA) contracts, and how DoD utilizes OTAs to fund research and prototype development.

Adele Navarrete, senior corporate counsel for the Logistics Management Institute, a major not-for-profit defense contractor, provided attendees with insights and advice on how to win business with the Department of Defense.  Ms. Navarrete later joined an industry panel with Raven Smith, senior regulatory compliance analyst with Lockheed Martin, and John Roman, senior vice president at Huntington Ingalls Industries – Technical Solutions.  They discussed the important attributes and qualities defense contractors look for in subcontractors.

Panelists, representing defense industry giants, provided attendees with subcontracting insights.
Lisa R. Sanders with U.S. Special Operations Command discussed technology problems she’s counting on industry to solve.

The keynote address was delivered by Lisa R. Sanders, the director of science and technology for the U.S. Special Operations Command (USSOCOM).  As a defense intelligence senior leader, Ms. Sanders is responsible for all research and development funded activities for the U.S. Special Operations Forces at MacDill Air Force Base.  Ms. Sanders gave an overview of USSOCOM’s technology and purchasing priorities, and the difficult technology problems Special Operations Forces needs industry to solve.  Ms. Sanders also gave an overview of how industry could engage and do business with the USSOCOM.

After the keynote speech, attendees were able to network with one another and forge potential business relationships.

Four concurrent workshops were also held in the afternoon sessions that covered a variety of topics of interest to government contractors, including how to develop successful bids and proposals and how to comply with DoD cybersecurity requirements.

“Overall, I’m very proud of the event and how industry and government came together to provide such excellent information and training to our attendees,” said Mr. Smith.  “I think everyone came away learning a lot about how to best engage the Department of Defense if you are a small technology company or manufacturer with the next great product or idea.  I firmly believe Georgia Tech can help connect the next great idea to those in DoD who need that idea and solution — and that is going to keep our nation safe.”

Copies of all presentations made at the Jan. 14, 2019 event — along with related resource materials — can be downloaded from: https://gtpac.org/training-video/

 

What to expect from OTA protests and disputes

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Ready or not — federal agencies are increasingly utilizing “other transactions authority” (OTA) to craft agreements that are not subject to traditional procurement laws and therefore should, in theory, allow the government greater access to innovative solutions.

While the goal of OTA procedures may be to avoid bottlenecks inherent in procurement under the Federal Acquisition Regulation, in the end they may result in valuable contracts with the government. As with any such contracts, it is inevitable that disputes will arise during their formation and administration.

While there is very little precedent relating to protests of OTA awards or claims arising under OTA-awarded contracts, there are some fundamental principles and analogous decisions that suggest how this early history of OTA protests and claims may unfold.

This article attempts to portray the current landscape for protests of OTA awards and contract claims arising during performance of an OTA agreement.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=721778

The gatekeepers of the government’s ‘other transaction’ deals

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In the little-understood realm of other transaction authorities, there is a widely used but even more obscure contracting model: the consortium.

When federal contracting offices with OT authority — an alternative procurement method outside the Federal Acquisition Regulation — issue a contract, they sometimes will solicit a consortium, or group of traditional and nontraditional government contractors self-organized around a specific technological area.  A consortium management company — often billed as a non-profit — will then be given exclusive access to the requirements to distribute among its association’s members.

The consortium model has been used since the early days of OT contracting at the Defense Department, and is now used in civilian agencies with OT authority like the Energy Department and Transportation Security Administration.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/04/gatekeepers-governments-other-transaction-deals/147524/

This is part of a series about ‘other transaction’ authorities. Read the first part here.

A fundamental shift is underway in today’s market — Are you prepared?

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As we move into the second half of the fiscal year, what can we take away from the last six months?

As most analysts have pointed out, we can say with some confidence that despite the budget chaos and uncertainty, the market continues to be strong. Both professional and IT services showed meaningful growth in the first quarter of fiscal 2018 and it is reasonable to expect that trend continued in the second quarter.

In addition, we now have a spending agreement that relieves the unnatural and problematic budget caps, at least for a few years. And that likely means even more growth.

And, of course, the long discussed consolidation of our industry appears to be upon us; a spate of deals has escalated talk about a restructuring of the industry.

But beyond those evident trends, there are other dynamics well worth considering.

Keep reading this article at: https://washingtontechnology.com/articles/2018/03/28/insights-soloway-market-changes.aspx

Company calls out ‘old guard’ after Pentagon cuts its $950 million cloud contract by 93 percent

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One week ago, Virginia-based REAN Cloud was preparing to hire an additional 100 employees to meet demand across the Defense Department after it received a $950 million other transaction authority agreement to provide cloud services across Defense agencies.

Now the company is calling out the contracting community that it feels helped successfully pressure the Pentagon to curb its contract award by more than 90 percent — from $950 million to $65 million — and looking for answers from the Defense Department.

“Based on the threat of legal action and protest by the old guard, the only winners in this delay are those large companies that stand to lose money if the Defense Department proceeds with innovation. In the meantime, the cost of maintaining antiquated government infrastructure has not subsided,” said Sekhar Puli, the company’s managing partner, in a statement.

Keep reading this article at: http://www.nextgov.com/it-modernization/2018/03/company-calls-out-old-guard-after-pentagon-cuts-its-nearly-1-billion-cloud-contract/146529/

DIUx and DoD ‘other transaction’ prototype agreements: Fast track to DoD funding

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On February 7, 2018 the Department of Defense (DoD) awarded REAN Cloud a contract valued at up to $950 million to work with defense agencies to migrate existing applications to commercial cloud solutions. The award is of significant relevance to efforts currently underway in connection with the upcoming DoD Joint Enterprise Defense Infrastructure — or “JEDI” — procurement. However, the award is also important in a broader context in that it was issued as a follow-on production contract to an “other transaction” (OT) prototype agreement awarded on an expedited basis by DoD’s Defense Innovation Unit Experimental organization (DIUx). The award, therefore, reflects DoD’s increased comfort with issuing high-value production contracts following preliminary work with DIUx under OT prototype agreements.

In 2015, DoD founded DIUx to increase its access to technical innovations from nontraditional contractors. Defense contractors’ spend on research and development in the last decade has been adversely impacted by increasing budget cuts, protracted procurement cycles, and numerous government shutdowns. As a result, DoD has both needed and wanted access to cutting-edge technology in the commercial sector, but commercial companies with robust global markets have historically been wary of the significant compliance obligations that come with traditional defense procurements. DIUx is the Department’s attempt to contract with these innovators in a way that mimics the speed and terms of commercial transactions and significantly reduces compliance obligations.

Essential to the success of this approach is the use of OT agreements to govern DIUx transactions. According to recent congressional testimony, since it was established, DIUx has awarded 61 OT agreements totaling $145 million and averaging only 78 days from initial contact with a potential partner to signing an agreement. And, beginning in September of last year, DoD has followed some of those DIUx awards with follow-on production contracts. In addition to the recent $950 million award to REAN, DIUx has awarded two more production contracts together valued at up to more than $1 billion. Importantly, DoD can issue these high-value follow-on contracts without competition as long as competition was established for an initial DIUx OT award.

Recent efforts, therefore, suggest that DIUx, OT agreements, and follow-on production contracts are here to stay, and potential contractors of all sizes and sophistication should understand how they may impact the competitive landscape.

Keep reading this article at: https://www.natlawreview.com/article/diux-and-dod-other-transaction-prototype-agreements-fast-track-to-dod-funding

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