Other Transaction Agreements Dod

(a) COLLECTION AND STORAGE. Military division service acquisition officials collect data on the use of other transactions by their respective departments, and the Under Secretary of Defense for Research and Technology and the Under Secretary of Defense for Procurement and Maintenance collect data on any other use of other transactions by the Department of Defense. including use by defence authorities. The data is stored in such a way that the Assistant Secretary of Defense for Acquisition and other appropriate officials can access it at any time. The military remains the leader in the use of OTA in DoD components, but the other components saw a significant increase in OTA usage in fiscal 2019. In fiscal 2019, the military`s OTA commitments increased from $3.07 billion to $4.95 billion, an increase of 61 percent. The military`s OTA commitments have increased by 416% since fiscal year 2016. The Air Force increased its OTA commitments by 190% in fiscal 2019, from $0.54 billion in OTA commitments in fiscal 2018 to $1.56 billion in fiscal 2019. Between fiscal year 2016 and fiscal year 2019, the Air Force`s OTA commitments increased by 486%. The Navy, which had reported marginal OTA commitments in previous years, saw an increase in OTA commitments last year, but it still lags behind other services. The Navy`s OTA commitments increased from $0.03 billion in fiscal 2018 to $0.17 billion in fiscal 2019, an increase of 431 percent. Other transactions (TOs) are contractual instruments other than standard government procurement, grants or cooperation agreements.

TOs may include flexible commercial agreements to acquire research and development activities to advance new technologies, and prototypes or models to assess the technical or manufacturing feasibility or military advantages of new or existing technologies. This may apply to processes, concepts, end products and systems of non-traditional defence companies* (as well as traditional defence companies where legal requirements for small business participation or cost-sharing arrangements are met) that provide the government with access to innovative solutions. TOs provide the opportunity to structure agreements that can leverage business practices and remove barriers to entry such as cost accounting (CAS) compliance and intellectual property rights requirements to encourage non-traditional defence contractors to do business with government. In a later NDAA, Congress gave the DoD explicit power to put OTA prototypes directly into production — as long as the original prototype was subject to some sort of competition and as long as potential suppliers pointed out that they might not have another chance to compete for a production price. As the Department of Defense and congressional leaders have looked for ways to maintain U.S. technological superiority over global competitors such as China and Russia, OTA agreements have become an increasingly popular tool. Between fiscal year 2015 and fiscal year 2019, the Department of Defense`s OTA commitments increased from $0.7 billion to $7.4 billion, an increase of 712 percent. Neither contracts, nor grants, nor collaborative agreements, OTAs are a more flexible procurement approach that allows certain federal organizations to access goods and services outside of traditional procurement processes.1 OTAs are not subject to the Federal Procurement Regulations (FAR) and other related regulations, which means that all common requirements for government contracts are absent or negotiable. In turn, OTAs give these agencies more flexibility and customization in designing a contractual approach that can encourage and attract non-traditional defense contractors, better manage risk and uncertainty, and increase efficiency.

However, OTAs are not without risk, as they can be more complicated to design and execute, which is compounded by a lack of familiarity and training in the wider acquisition community. In addition, OTAs are more restrictive in what they can be used for. The details depend on the laws and statutes that govern the OTA agencies of the various federal agencies, but OTAs are largely limited to activities that involve research and development. This letter builds on and expands on the methodology used in other CSIS reports that use and expand data from the Federal Procurement Data System (FPDS). Unlike other Reports from the Defense-Industrial Initiatives Group on federal contracts that rely on big data downloaded from USAspending.gov, this letter relies on data downloaded directly from FPDS.gov. All dollar figures are reported in constant dollars for fiscal year 2019 using the latest deflators from the Office of Management and Budget (OMB). In fiscal 2016, the DoD signed 342 OTAs worth just over $1.4 billion. In fiscal 2020, the numbers grew to more than 3,210 agreements worth $16.2 billion, according to figures from the Federal Procurement Data System. Data for fiscal 2021 has not yet been fully reported, but last year appears to be on track to reach an even higher total.

Other R&D and knowledge activities constitute the second largest portfolio of platforms in terms of the Ministry of Defense`s total OTA commitments. As a percentage of total defence OTA commitments, other R&D and knowledge commitments increased from 27.6% in FY2015 to 32.9% in FY2019. Other knowledge-based R&D and OTA commitments have increased by 1,081% over the past five years, from $0.2 billion in fiscal 2015 to $2.4 billion in fiscal 2019. Notably, other R&D and knowledge activities serve as a collection category that does not fit into platform portfolios, but includes a wide range of activities that include biomedical activities, engineering services and other R&D activities, among others. .