2021 Brought Another 'Banner Year' for OTAs.

• Author: Harper, Jon

The Defense Department continues to run hot with its use of other transaction authority agreements, with experts calling 2021 another banner year for the contracting mechanism that has rapidly grown in popularity among acquisition officials.

OTAs are designed to cut through the red tape of the Pentagon's more traditional Federal Acquisition Regulation contracting processes. They are intended to facilitate rapid prototyping and follow-on production as well as attract nontraditional industry partners who would otherwise take a hard pass on working with the Defense Department's cumbersome bureaucracy.

Although other transaction authority has existed for decades, the use of OTAs has exploded since the passage of the 2015 and 2016 National Defense Authorization Acts, which encouraged Pentagon officials to leverage them more in pursuit of new capabilities.

The total dollar value of OTAs issued in fiscal year 2015 was less than $1 billion. By 2019, that number increased to more than $8 billion, according to a draft of the National Defense Industrial Association's Vital Signs 2022: The Health and Readiness of the Defense Industrial Base report, which included data provided by decision science company Govini.

The largest year-over-year bump was seen in 2020, when the dollar value of OTAs awarded roughly doubled to more than $16 billion--almost the same amount as the previous four years combined.

"In 2020, the Defense Department obligated a considerable amount in defense innovation at $73.5 billion," said the Vital Signs report. "While a large majority of these obligations were appropriated to [traditional] research, development, test and evaluation contracts as they typically are, most notable was a shift toward the use of other transactions authority awards."

An example of this trend in R&D efforts for key technologies is the Space Enterprise Consortium agreement. The program gives the Space Force the ability to grow the space industrial base through a more rapid acquisition process and provides flexibility between government and industry while prototyping new technology, the study said.

"With the space domain growing increasingly competitive amongst peer competitors, OTAs provide a new approach for increased resiliency and reduced cost to get technology in the hands of the warfighter at a faster rate," it added.

Although final data for 2021 was not yet available at press time, preliminary findings suggested it would be another strong year for...