The Defense Department is increasingly turning to Other Transaction Authority contracts (OTAs) as a mechanism to fund research and development projects.

Between 2016 and 2022, DoD took 15,000 OTA actions worth about $70 billion. In fiscal 2022, the department took about 4,400 actions worth $10.7 billion.

While fiscal 2023 isn’t available yet, HigherGov, a government market intelligence company, estimates that DoD had over 1,200 active OTAs worth about $23.6 billion.

Despite the increasing growth, misconceptions around OTAs still linger, said Bonnie Evangelista, the DoD’s chief data and AI officer’s acting deputy for acquisition directorate, at the Advantage DoD 2024 symposium Tuesday.

Evangelista and other DoD experts tried to dispel four myths the defense acquisition community hears all the time:

1. OTs require extra work.

“I tell people that when you are going to decide to work in the OT world, you want to be omnipresent,” said Stephanie Wilson, the Army Contracting Command’s contracting officer.

Unlike some traditional contracting methods, OTAs demand constant oversight and active participation. This almost daily level of engagement opens up room for identifying areas of success and failure and making adjustments accordingly.

“If you’re not there, if you’re not omnipresent through the entirety of it, this could potentially lead you to better success or could lead you to complete failure,” Wilson said.

2. FAR-based contracts are the path of least resistance.

There is a misconception that Federal Acquisition Regulation-based contracts are more straightforward compared to alternative paths, including OTAs.

“This is usually when we are offering possible courses of action or procurement strategies that involve leveraging OTA; I hear a lot from some of the services, ‘I don’t have time for that, I’m just going to go with what my contracting officer already knows, I’m just going to do the FAR-based thing.’ That just breaks my heart,” Evangelista said.

It’s a cultural barrier, and Evangelista said they are working on ways to form new ways of thinking across the department’s workforce.

3. OTAs are the easy button.

“That can actually be true if you have a good team, a balanced team supporting you,” Evangelista said.

But what it usually means is that the current acquisition system is not adequately meeting the needs of the project.

“There’s a perception that OTs are a loophole around the existing infrastructure, institution or systematic nature of doing business. I’m just offering a different perspective. There’s usually something going on when I hear these things,” Evangelista said.

4. OTs are a loophole, to competition in particular.

“To me, when someone says OT is a loophole, it’s maybe a misunderstanding of the actual statutory authority. What I usually find is when people are saying ‘it’s illegal,’ what they really mean is it’s different. We might be creating a process that they’re not familiar with, or we might be creating a process that doesn’t conform to some of the constructs on the FAR-based side,” Evangelista said.

For example, under FAR-based contracts, all acquisitions must undergo a competitive process, with only a few exceptions. But with OTAs, the competition standard is more flexible. Under OTAs, competition requirements are determined by the agreement officer, allowing for more creativity in the procurement process.

“Sometimes, competition might not mean I post something on SAM.gov and get the world to respond to it. What if I host a competition in today’s symposium, and everybody at the symposium is part of that competition? That was one of our early prototypes of a business process,” Evangelista said.

Last year, the Office of the Under Secretary of Defense for acquisition and sustainment updated its OTA guidance in an effort to dispel most of the myths around OTAs.

The guide now provides a definition for what exactly constitutes a prototype, as well as defines who qualifies as a non-traditional contractor.

“That’s very important for us as practitioners,” Evangelista said.

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