Bridging the Innovation Gap: Using Other Transaction Authorities (OTAs) to Reach Non-Traditional Vendors
Why you should care about OTAs
Federal missions now pivot on technology that evolves faster than the Federal Acquisition Regulation (FAR). If you lead acquisition or program execution, you’ve likely felt the frustration:
🪖 “We know a startup can solve this, but none of them will touch a 300-page RFP.”
OTAs were built for exactly this gap — giving you a contract-compliant, sprint-speed route to the 80 percent of innovators who would otherwise ignore federal opportunities. Naval Sea Systems Command’s (NAVSEA’s) Naval Surface Technology & Innovation Consortium (NSTIC) is a live example: 11,170 members — 80% non-traditional — and 65% of awards go to small businesses.
In this post, we’re providing actionable practices for leveraging OTAs to rapidly connect with innovative vendors via a simple, government-compliant process.
The OTA advantage, simplified
When your acquisition goals involve speed, flexibility, or engagement with non-traditional vendors, the Federal Acquisition Regulation (FAR) may not always be your best fit. Here’s how OTAs compare to traditional contracting pathways across four common federal challenges:
Need to Engage Dual-Use or First-Time Defense Vendors
- Under the FAR, Cost Accounting Standards (CAS) and compliance burdens often scare off commercial innovators.
- With OTAs, non-traditional vendors can participate directly without CAS. Traditional contractors can join by teaming with a non-traditional vendor (with “significant” participation) or by covering at least one-third of the project cost.
Need to Prototype New Business Models
- FAR-based contracts create rigid buyer–seller relationships with limited flexibility in terms and conditions (Ts&Cs).
- OTAs, by contrast, enable co-creation of key project elements — like milestones, payment terms, and intellectual property (IP) arrangements — to reflect the dynamics of the problem and the players involved.
Need to Expand the Industrial Base
- FAR competitions often draw from the same pool of traditional primes.
- OTAs remove common barriers to entry: consortium membership is often free or nominal, and administrative costs are typically absorbed by the government. The result is a dramatically broadened vendor pool: 80% non-traditional in some consortia.
Need to Move at Mission Speed
- FAR-based acquisitions can take 12 to 24 months to reach award.
- OTAs routinely deliver award timelines in the 45–120 day range. One NAVSEA OTA project, the Major Caliber Anti-Drone Air Program (MADCAP) C-UAS prototype, went from solicitation to award in just 45 days.
What OTAs mean for you
For federal program managers (PMs) and contracting officers (COs) navigating innovation pressure, OTAs can be a powerful tool, but only if you understand what they are…and aren’t.
Let’s clear up some common misconceptions:
💬 Myth: “OTAs are unregulated work-arounds.”
Reality: OTAs are not loopholes—they’re statutory acquisition instruments authorized under 10 U.S.C. §§ 4021 and 4022. They provide flexibility outside the FAR, but they still adhere to fiscal law, internal controls, and legal oversight. IP protections and ethics requirements still apply.
💬 Myth: “Only R&D labs can use them.”
Reality: OTAs aren’t limited to research labs or prototypes buried in the back office. They’ve been used for real operational needs like ship sustainment, counter-drone technologies, medical readiness, and even commercial battery charging for naval platforms. Their relevance is expanding rapidly across mission sets.
💬 Myth: “We’ll lose our data rights.”
Reality: Not at all. In fact, data rights under OTAs are fully negotiable—you’re not automatically bound to the standard DFARS clauses unless you choose to include them. If you need certain lifecycle sustainment rights, work closely with your legal team up front to ensure those are built into the agreement.
💬 Myth: “We must run everything through a consortium.”
Reality: While consortia can make OTA execution faster and more collaborative—especially for teaming and outreach—they’re not your only option. Organizations like the Defense Innovation Unit (DIU) use a Commercial Solutions Opening (CSO) process to award OTAs directly, with no consortium involved.
Bottom line: OTAs are not a free-for-all. They’re a legitimate, powerful acquisition tool when used correctly—and they can
5-Step Guide: What you need to know about OTAs
Use this for your next requirement — whether you’re a PM shaping demand or a CO building the file.
Step 1 – Frame a Problem Statement, Not a Spec
OTAs excel when the solution space isn’t fully known. Instead of a long list of requirements, frame a mission impact problem:
🪖 “We need to charge shipboard lithium batteries safely pierside in under four hours.”
This attracts non-traditional vendors with relevant commercial analogs (in this case, think golf-cart chargers).
Step 2 – Select the Right Consortium or Commercial Solutions Opening (CSO)
Match domain to mission: e.g., surface warfare → NSTIC; cyber → Consortium for Command, Control, and Communications in Cyberspace (C5); health → Medical Technology Enterprise Consortium (MTEC).
- Check membership costs: Many consortia are free to join; those that aren’t typically charge <$250 annually.
- Evaluate CSO option: Defense Innovation Unit (DIU) and other innovation organizations use CSO processes to solicit and evaluate OTA proposals without using a consortium.
📌 Evans tip: Build a one-page “Consortium Alignment Matrix” mapping your requirement to 3–5 candidate vehicles. Present it with your acquisition plan.
Step 3 – Use the “Basket” Mechanism for Pipeline Agility
When white papers meet merit but funds are delayed, the best consortia allow papers to be placed in a “basket” for up to three years. You can later award from this pool without issuing a new Request for Project Proposals (RPP).
Benefit: Maintains pipeline momentum and saves time on re-competition.
Step 4 – Document Non-Traditional Participation
To qualify under 10 U.S.C. §4022, at least one of these must apply:
- A non-traditional defense contractor (NDC) participates significantly, or
- A traditional contractor contributes at least 1/3 cost share, or
- A Senior Procurement Executive (SPE) grants a waiver (rare).
How to justify “significant” participation: There’s no numerical rule — value can come from unique intellectual property (IP), performance capability, cost avoidance, or innovative impact. Capture that clearly in the file.
Step 5 – Plan for Competitive Procedures and Follow-on Production
Prototype OTAs must be awarded using competitive procedures, unless justified in writing by the Agreements Officer (e.g., only one capable source).
To preserve the right to award a follow-on production OTA:
- Include the appropriate clause up front.
- Ensure the prototype was successfully completed.
- Stay below $500M unless higher-level DoD approval is obtained.
Also: ensure alignment with your resource sponsor to fund production and Operations & Maintenance (O&M). The DIU, for example, won’t proceed without a Program Executive Officer (PEO) and sponsor committed to the Program Objective Memorandum (POM).
OTAs in Action: Hypersonic sensor prototype
- Challenge: Collect mid-course sensor data for the Conventional Prompt Strike test series.
- OTA Solution: NSTIC issued an RPP, selected a non-traditional sensor company, and awarded in just 90 days. The prototype was built, tested, and fielded in 18 months.
- Outcome: The system supported live testing and transitioned to a second phase—far faster than a comparable FAR-based contract.
Ready to Use an OTA? Here’s Your 5-Point Prep Checklist
If you’re a Contracting Officer (CO) or Program Manager (PM) thinking about using an Other Transaction Authority (OTA), it’s important to do your homework up front. OTAs can accelerate timelines and broaden your vendor pool—but only if you align the planning and documentation early.
Here’s a quick 5-step readiness checklist to help you get it right:
📍 1. Draft a one-page problem statement and mission impact
- Owner: Program Manager (PM)
- Start with clarity: What’s the problem, and why does it matter to the mission? This helps justify OTA eligibility (e.g., innovation, speed, non-traditional participation) and frames your requirement for downstream conversations with legal, sponsors, and vendors.
📍 2. Schedule a 30-minute call with three consortia directors
- Owner: Contracting Officer (CO)
- You don’t need to guess which vehicle fits. Most consortium administrators are happy to advise on scope alignment, award timelines, and funding thresholds. These early touchpoints build confidence in your approach and give you market insight.
📍 3. Identify potential non-traditional partners via member directories
- Owner(s): PM + Business Development
- Use OTA consortium directories to scout vendors who qualify as non-traditional defense contractors. Early teaming conversations support your justification of “significant participation”—a key legal requirement for traditional primes to join OTA efforts.
📍 4. Draft an acquisition strategy addendum
- Owner: Contracting Officer (CO)
- Include a short addendum to your acquisition plan citing the legal authority (10 U.S.C. §4022) and competition method (e.g., CSO, white paper + downselect). This helps acquisition reviewers understand how your approach fits within statute—and how it differs from a FAR-based strategy.
📍 5. Prepare a funding and sustainment roadmap
- Owner(s): PM + Resource Sponsor
- Think beyond the prototype. How will you fund production or sustainment if the solution proves successful? This step ensures you avoid the dreaded “prototype-to-nowhere” scenario and sets you up for a follow-on production OTA or other scaling pathway.
Whether you’re leading acquisition or program execution, working through this checklist early can de-risk your OTA strategy—and accelerate real mission outcomes.
Metrics you can cite in your justification
These metrics were shared by federal OTA program leaders during the NAVSEA/United States Fleet Forces Command (USFF) Hosted OTA Day (June 2025). Use them to strengthen internal justification around “speed-to-fleet,” “industrial base expansion,” and “small business utilization”:
- 80% non-traditional membership. NAVSEA’s Naval Surface Technology & Innovation Consortium (NSTIC) has over 11,000 members—80% of which are non-traditional defense contractors. (Source: Cindy Montrief, NSTIC PM, NAVSEA/USFF OTA Day)
- 65% of awards go to small businesses. NSTIC reported that roughly two-thirds of all awards are made directly to small businesses. (Source: NAVSEA/USFF OTA Day)
- Typical award timeline is 45–120 days; record classified requirement awarded in 45 days. NSTIC advertises a standard 120-day turnaround but has executed awards in as little as 45 days for time-sensitive TS/SCI-level needs. (Source: Cindy Montrief, NAVSEA/USFF OTA Day)
- 170 days from award to live at-sea testing in C-UAS MADCAP prototype. The Major Caliber Anti-Drone Air Program (MADCAP), a complex integrated prototype involving multiple OTAs and live Navy testing, progressed from award to demonstration in just 170 days. (Source: NAVSEA/USFF OTA Day)
🪖“We are allowed to go faster — OTAs give us the latitude to reach people who don’t traditionally work with us.”
— Christopher Miller, NAVSEA Executive Director
Key Takeaway
OTAs are not a silver bullet, but they are the most agile legal pathway to access rapid innovation and dual-use technology. Use them when:
- The requirement is evolving or not well-suited for traditional specifications.
- Traditional primes can’t deliver fast enough or with the needed flexibility.
- You need to open access to innovators beyond the typical defense base.
Follow the five-step playbook above, and you’ll move from problem to prototype at a pace that matches operational urgency — while bringing new talent into the federal innovation ecosystem.
About the Author
