Margaret Cassidy slides from the DOD & The Intel Community Event on November 27th, 2018.

1. 3rd Annual
Doing Business
With
DOD & The Intel Community
November 27, 2018

2. November 27, 2018
JSchaus & Associates www.JenniferSchaus.com
Washington, DC 202-365-0598
Professional Services for Federal Contractors
- GSA Schedules;
- Proposal Writing;
- Pricing;
- Contract Admin & Compliance

3. 3rd Annual
Doing Business
With
DOD & The Intel Community
November 27, 2018
Using Other Transaction Authorities (OTA’s)
in
Defense Contracts

4. Other Transaction Authority - Definition
Easiest to say what an OTA is NOT:
• A Procurement Contract
• A Grant
• A Cooperative agreement
• Subject to FAR or DFAR
An OTA is:
A legally binding agreement/contract

5. Who Can Use an OTA?
• National Aeronautics and Space Administration
• Department of Defense
• Department of Energy - Advanced Research Projects Agency–Energy
• Department of Homeland Security - Domestic Nuclear Detection Office (DNDO)
• Department of Transportation – FAA and TSA
• Health and Human Services (HHS)

6. DoD Permitted to Use OTA for R&D
Definition: Attempts to identify and use scientific discoveries, improvements in
technology, materials, processes, methods, devices, or techniques
Attempts to advance the state of art in the field
Criteria to Use OTA:
• When determined practical by DoD
• Research cannot duplicate any ongoing DOD research.

7. Definition of Prototype: a model used to evaluate the feasibility or military utility
of a technology or process, concept, end item, or system
Criteria to Use OTA:
• Directly relevant to improving mission effectiveness
• Related to military personnel and
• Platforms, systems, components or materials that support missions
DoD Permitted to Use OTA for Prototype

8.  Production Agreements from OTA
• Prototype projects under an OTA may result in production agreements with
same contractors, without competition
• Production agreement extends the OTA
 Follow on work need not be competed if:
• There was competition to select the OTA parties and
• Awardees successfully completed the requirements under the OTA
 Or – Government may use procurement contract for production
DoD Permitted to Use OTA for Some Production

9. Additional Requirements for OTA
• At least one nontraditional defense contractor must participate to a significant
extent or
• All significant participants are small businesses or nontraditional defense
contractors or
• At least one third of the total cost must be paid with funds from sources other
than the Government or
• The government makes a written finding that an OTA is appropriate

10. Non-Traditional Defense Contractor
 An entity that is not currently performing and has not performed, for at least
one year before the OTA, any DoD contract or subcontract that is subject to full
cost accounting standards
 To avoid full cost accounting coverage:
• The contract must be for “commercial items”
• The contract price is set by law
• The contract is fixed price, awarded with adequate competition
• The contract is worth less than $7.5 million, if contractor has no other contract
worth more than $7.5 million that is subject to cost accounting standards.

11. Government Determination to Use an OTA
The senior procurement executive must determine in writing that:
• Exceptional circumstances justify the use of an OTA for innovative business
arrangements
• An OTA provides an opportunity to expand the defense supply base
• When a procurement contract is not feasible or appropriate

12. Types of Other Transaction Authority
Expenditure Based OTA:
• Contractor uses best efforts to complete the project for an estimated cost
• Costs are built off of contractor’s financial and costs records
Fixed Amount OTA:
Contractor completest the project for an agreed upon total price

13. DoD Other Transaction Authority - Example
• DoD and nontraditional defense contractor were the parties
• Contract to develop a new military sensor system
• DoD wanted to quickly obtain emerging sensing capabilities
• Commercial technology was rapidly evolving – often inside of 2 years
• DoD typical procurement for sensors had a 3 – 8 year development cycle
• 2 year contract, $8 million

14. Benefits of OTA’s
• Flexibility
• Speed
• Customized agreements
• Avoid FAR/DFAR
• More adaptable IP protections
• Easier for small, start-up businesses

15. Risks of OTA’s
• Contractor needs to protect its intellectual property
• Contractor must understand its costs
• Contractor must establish pricing that covers its costs
• Contractor must assure it meets the criteria for OTA
• Contractor must still comply with False Claims Act
• Government procurement professionals not always experienced with OTA’s
• If joining a consortium to perform – protecting interests in those agreements
Protect Your Organization With Contract Terms

16. WORD MATTERS – IN YOUR CONTRACT

17. WHICH IS IT…
Lets eat
Grandpa.
Lets eat,
Grandpa.

18. Be Sure to Consider In the OTA For Example…
• Quality – standards
• Deadlines, delivery dates
• What are the deliverables
• Communicating with the government
• Protecting information and assets – Intellectual Property
• Using assets – yours and the government
• Work location – security requirements
• Breach, Termination
• Pricing/Costs – Fixed price, cost, time and materials
• Invoicing methods

19. RESOURCES FOR THIS INFORMATION
• GAO REPORT: GAO-16-209 Other Transaction Agreements
• FAR: FAR 35.001;
• DOD GUIDE: Other Transactions For Prototype Projects, Jan. 2017
• LEGAL AUTHORITY: 10 USCS § 2371b; 10 U.S.C. § 2371

20. 3rd Annual Doing Business With DOD & The Intel Community – NOV 2018
‘
Using OTA's (Other Transaction Authorities) in Defense Contracts
THANK YOU.
Margaret M. Cassidy, Esq.
Principal, Cassidy Law
202-266-9928
m.cassidy@cassidylawpllc.com
Cassidylawpllc.com

21. November 27, 2018
JSchaus & Associates www.JenniferSchaus.com
Washington, DC 202-365-0598
Professional Services for Federal Contractors
- GSA Schedules;
- Proposal Writing;
- Pricing;
- Contract Admin & Compliance