Did you know the Soviet Union’s launch of Sputnik, the world’s first human-made satellite in 1957, lead to modifications in the US government’s purchase policy with the creation of what is now called Other Transactional Authority (OTA)?

In 1958, the United States passed the Space Act to create the National Aeronautics and Space Administration (NASA). Additionally, the act gave NASA a new, highly flexible purchasing tool called space act agreements speeding up the innovation cycle of much-needed products and services.

Congress followed this same model and passed a law to create Other Transactional Authority allowing federal agencies to encourage the rapid implementation of emerging technologies by making purchasing decisions outside the routine procurement procedures outlined in the Federal Acquisition Regulations (FAR) and other government contracting rules and laws. These purchases are called Other Transactions (OT).

While eleven federal agencies can use OTAs, the Department of Defense (DoD) is the biggest user of the OTA, spending $10 billion annually to ensure it has the most advanced technological innovations. DoD makes OT agreements to fund cutting edge research to develop prototypes and production of products. Their goal is to emulate Silicon Valley to be more agile, innovative, fail fast and pivot when necessary to find solutions to DoD needs. Some examples of technologies in development with OTs are high-tech targeting/night vision goggles, anti-aircraft and counter-drone weapons mounted on armored vehicles and networks to coordinate combat operations.

Additionally, OTAs encourage nontraditional organizations like small businesses and universities to partner with prime contractors to form consortia specializing in a unique field to bid on federal opportunities. Examples of consortia include Vertical Lift Consortium, Supply Chain Consortium initiative, National Geospatial-Intelligence Agency (NGA) Consortium and the Sensors, Communications and Electronics Consortium, to name a few.

If you want to learn more about other transactions and the OTAs, the Wyoming SBDC Network is hosting two nationally-recognized experts, Iain Skeete and Ben McMartin, on July 9 for a no-cost webinar titled Other Transactional Authorities: Funding for Research and Prototypes. With more than 2-decades of Federal contracting and OTA policy development experience, Iain and Ben will provide a behind the scenes look at how OTAs are used to capture technology solutions for DoD and how companies must position themselves to operate in this acquisition space. To watch the recording of this event, click here.

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