The proliferation of Other Transaction Authority (OTA) in defense contracting has developed significantly, particularly after the 2016 defense policy bill, which transformed it into a key tool for moving innovative technologies from prototype to production. The 2016 legislation afforded the Defense Department greater flexibility in procurement that bypassed the lengthy Federal Acquisition Regulations, allowing for faster and more efficient contracting processes.
USAID, and by extension State, have OTA under Section 635(b) of the Foreign Assistance Act. It’s the basis for PIO grants, as an example. They provide the government with flexibility and offer recipients protection of intellectual property rights and exemption from compliance with government cost accounting standards. They are often used for research, development & demonstration (RD&D) of new technologies and processes. An OTA award may have collaboration arrangements that provide for an oversight committee that may include outside experts. With innovation remaining a priority under the new administration, these agreements present valuable opportunities for implementers to continue to advance their work.
