What is Other Transaction Authority (OTA)?
OTAs are legally binding instruments used by the federal government to fast-track research and prototyping. They are NOT contracts, grants, or cooperative agreements, meaning they are NOT subject to the Federal Acquisition Regulation (FAR).
The "Un-Contract"
Think of an OTA as a commercial-style contract. Because they bypass the FAR (Federal Acquisition Regulation), they allow for much greater flexibility in terms, intellectual property rights, and payment milestones.
They were designed to attract "non-traditional" defense contractors—startups and commercial tech companies who refuse to deal with the red tape of standard government contracting.
Who Uses OTAs?
Heavily used by DoD agencies like DIU (Defense Innovation Unit), Army Futures Command, and various Consortiums (SOSSEC, C5, etc.).
OTA vs. FAR Contract
| Feature | OTA | FAR Contract |
|---|---|---|
| Regulation | Flexible (Commercial-like) | Strict (FAR/DFARS) |
| Speed to Award | Fast (30-90 days) | Slow (6-18 months) |
| IP Rights | Negotiable | Mandated by Bayh-Dole |
| Accounting | Commercial Standards (GAAP) | Gov Standards (CAS) |
Eligibility Requirements
To receive an OTA, you generally must meet ONE of the following conditions:
Non-Traditional Defense Contractor
A company that has not performed a fully CAS-covered contract in the past year. (Most startups fit here).
Significant Participation
If you are a traditional contractor, you must have a non-traditional contractor playing a "significant" role in the project.
Cost Sharing
If neither A nor B applies, you must pay for 1/3 of the project cost yourself.
Why Pursue OTAs?
- SpeedAwards can happen in weeks, not months or years.
- Production Follow-OnIf a prototype OTA is successful, the government can award a massive production contract without further competition.
- CollaborationThe process is collaborative. You can often demo your tech instead of writing a 100-page proposal.
Official Resources
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