Breaking Down OTAs in Government Contracting

Other Transaction Authority (OTA), also referred to as Other Transactions (OTs), are procurement methods other than contracts, grants, or cooperative agreements. They allow flexible business arrangements to obtain research and development to support technology advancement or to quickly develop a prototype outside of the Federal Acquisition Regulations (FAR). In other words, OTAs are a way for small businesses to work with the government without dealing with red tape.

OTA Details

OTA prototype contracts can be up to $250 million in value and can be fixed-price, expenditure-based, or hybrid. Additionally, they:

  • Must use a nontraditional defense contractor,
  • Have all participants be small businesses,
  • Or, have at least a third of its total cost paid by parties other than the government.

Agencies must be authorized by Congress to use OTs and government Contracting Officers must have Agreement Officer authority to award OTs. The following federal agencies currently have Congressional authorization for OTs, but there are specific OT requirements, limitations, and restrictions for each agency:

  • National Aeronautics and Space Administration (NASA)
  • Department of Defense (DOD)
  • Department of Energy (DOE)
  • Human Health Services (HHS)
  • Department of Homeland Security (DHS)
  • Department of Transportation (DOT)
  • Federal Aviation Administration (FAA)
  • Transportation Security Administration (TSA)
  • Domestic Nuclear Detection Office (DNDO)
  • Advanced Research Projects Agency–Energy (ARPA-E)
  • National Institutes of Health (NIH)

Why OTAs?

OTAs have become a core element of the Department of Defense’s approach to technology and acquisition. DoD OTA obligations increased 75% in fiscal year 2019 and have increased 712% since fiscal year 2015. Why? Congress has been giving the Department of Defense OTAs to allow the Pentagon to take more risks in acquisition and fail before money is spent building a whole program.

Overall, OTAs are becoming more popular in government contracting and an increase in these opportunities could occur in the coming years.

Where can I find OTAs or Research and Development (R&D) opportunities?

The Defense Logistics Agency (DLA) R&D uses the Federal Contract Opportunities website at SAM.gov to post their opportunities using Broad Agency Announcements (BAA). More information on how to find these opportunities can be found on the DLA website.

Tech Transfer: Bridging the Gap Between the Abstract and Commercial Application

Ask most people to describe how their favorite app or gadget came to be, and you’ll get a version of the garage origin story, where a visionary genius and her team of misfits work all night, fueled by passion and coffee, to bring their idea to life. Sheer force of will and a lucky investor meeting is all it takes to make it, as long as you have the guts. A version like this story is told in the startup myths of tech giants like Amazon, Google, Apple, and Facebook: daring startups that happened to make it big.

Reality, of course, never quite measures up to the hype.

Ideas come to market in a variety of different ways – genius entrepreneur included – but much of the innovation we interact with day-to-day started as a question in an institution. Some are abstract, “How do we measure the temperature of a star?” while some are very specific, “How do we create a camera that fits in a small spacecraft?” And some, as in the case of both of those questions, end up having applications beyond their original purpose. It turns out that measuring star temperature at a distance works well for infrared thermometers and small cameras are great for phones as well as spacecraft.

Bridging the gap between the abstract and specialized questions, and their commercial application is a process known as tech transfer. In addition to thermometers and cameras, tech transfer has also brought us the internet, LASIK, cordless vacuums, and solar power.

The tech transfer process is typically implemented in three parts: design, prototype, and commercialization. In most institutions and government agencies, there is a formalized process for at least some part of that chain. Researchers may have to provide practical justification for budgets, or there may be a liaison office specifically seeking commercial technology applications. The results can be licensing agreements, joint ventures, or even new companies capitalized by public-private partnerships or direct investment.

The practical implications of this process are not just for large organizations on the cutting edges of their field. The Federal government, as well as many state agencies, have established funding and goals to create a pipeline in (and out) for innovative products.

Through programs like SBIR and STTR, they solicit best-in-class technology to solve problems ranging from reducing single-use plastics to better missile telemetry. In 2018, the federal government spent over 71 billion dollars at universities alone, a significant portion of which passed through spin-offs, joint ventures, or other partnerships.

Medium and small businesses, working directly or through an experienced prime contractor, can leverage their specific expertise to identify these tech transfer opportunities and create new markets. Although many of these tech transfer stories start out in a garage, the long term effects allow for endless possibilities. If you would like to learn more about working with an experienced prime contractor, contact us.

Volatility in The Freight Market

Of the major factors that make a logistics operation successful, managing volatility in freight markets is one of the most important. Volatility manifests as fluctuations in supply-side availability, or as customer demand, or as an external event (like a pandemic). It has immediate and substantial impacts on costs, and can be a major source of profit drag.

For logistics managers, mitigation isn’t straightforward. Simply pricing in the risk would make rates unsustainable, so organizations have to adopt more sophisticated strategies that adapt to market conditions. At JetCo, we have built our strategy on three pillars:

Organizational Resilience

When freight demand is strong, redundancy in the supply chain helps smooth spikes in pricing or dips in availability. Also, by actively developing multiple transportation options, opportunities to find efficiency naturally develop as demand eases.

Trusted Networks

Delivering to highly-secured or difficult-to-access locations demands a high level of trust and respect between companies and logistics partners, but organizations doing business commercially can benefit from developing trusted relationships as well. The freight market has an enormous amount of human capital, companies that recognize that as a place to invest real resources will find that it pays dividends in a volatile market.

Expert Resources

Resource diversity is key to active management of market uncertainty, and finding ways to multiply expertise internally and externally is a powerful way to mitigate risk. At JetCo, we utilize a mix of resources, including our own logisticians, brokers, and best-in-class technology platforms together to predict and mitigate market uncertainty.

In the past several years, the freight market has been severely tested by swings in demand due to general shifting industry in the United States, the ongoing pandemic, and technology. Through the application of these strategies JetCo has been able to maintain a 99% on-time rate for shipments. For more information on how we manage through volatility in the freight market, view our capabilities.

JetCo Federal Adds Hazardous Material Handling to Transportation, Warehousing Capabilities

JetCo Federal, a Grand Rapids-based supply chain management and warehouse supply company, recently added hazardous material handling to its supply chain management, transportation, and warehousing capabilities.

Hazmat certification is required for workers who handle, remove, or ship hazardous materials. JetCo Federal’s sales and operations teams have completed hazmat certification training, allowing the company to fulfill hazardous material orders and transport hazardous materials.

“This is an extension of how we work for our customers,” said Erik Greene, Director of Sales and Marketing at JetCo Federal. “A client identified the need for contractors who have this certification, and we jumped at the chance to deliver additional value.”

Hazmat certification incorporates general, function-specific, safety, and security training for all employees managing hazardous material operations.

Greene said, “We’re proud to be a company who handles complexity for our clients, and this certification adds to the ways we can provide comprehensive solutions in the market.”

For more information about JetCo Federal’s services, please visit www.jetcofederal.com.

Behind the Scenes: Logistics

Want to learn more about how our team thinks and operates? If so, you’ve come to the right place. Welcome to the first edition of our “Behind the Scenes” blog post series. Today, we’ll be talking to Adam Lewak, Operations Manager at JetCo Federal, and will be diving into the details of how our logistics team operates.

Adam Lewak, Operations Manager at JetCo Federal

Vanessa: Can you tell me a little bit about what you do in your role at JetCo Federal?

  • Adam: As the Operations Manager, I monitor all orders in production and consolidate the shipments that go to the same area. Once I have a shipment consolidated and built, I generate government-specific labels, provide the required paperwork, and source a carrier to haul the shipment. Sourcing a carrier requires daily spot negotiations. Once a carrier is secured, I schedule and monitor the shipment, making sure it is picked up and delivered on time.

Vanessa: We often talk about our team tackling complex projects daily and how we don’t shy away from a challenge. Can you talk a little bit more about the approach the logistics team takes to their work?

  • Adam: Our team keeps a daily watch on production and due dates. If there are multiple orders to one area, we typically wait to ship and consolidate those to ride together on the same truck. We utilize as much trailer space as possible, thus lowering freight costs. If due dates do not allow us to wait on production, we make sure to ship via the most effective cost option available. Our team performs in-transit check calls to verify that everything is going smoothly, and our team is always ready to jump into problem-solving mode as soon as we know of any issue.

Vanessa: There is a lot of planning, coordination, and attention to detail to make logistics run smoothly. Part of our logistics team’s role is to ensure our shipments won’t be rejected. Can you talk a little bit about why shipments are rejected, and about what happens when an order is rejected?

  • Adam: Shipments are typically rejected when the primary carrier does not have capacity. This means that the primary carrier does not have any drivers available at that specific date and time, or that there has been a change in national rates and the carrier can get a better pay moving different freight out of the same area. When an order is rejected by the primary first, then it is tendered to the secondary. If the secondary rejects the order, it is offered to the backup carriers on the lane. If it is still rejected, then it will typically end up on a spot market board where approved carriers and brokers can then bid on the shipment. The spot market’s lowest bid wins the shipment.

Vanessa: Another integral part of ensuring our products are delivered on time, every time is the carriers we use. Can you go in-depth on the strict requirements we have for our carriers?

  • Adam: Most of the freight JetCo Federal moves is delivered to U.S. military bases.  For a driver to get onto a base to deliver, he must be a U.S. Citizen carrying a Real ID – a driver’s license with a star in the top right corner, signifying it is accepted as a federal form of identification. The driver must also have a clean background with no criminal history or warrants, a clean driving record, and must have strong attention to detail as delivering to U.S. military bases can have complicated paperwork. Most military bases perform a background check upon arrival, and all of these requirements are in place due to national security.

Since our inception, government agencies have relied on JetCo Federal for the distribution of critically timed, urgent product.  To learn more about JetCo Federal’s logistics services, please visit our logistics and warehousing page.

Balancing Risk

In the freight markets, ‘expect the unexpected’ has always been sound advice, and especially so over the last few years. From driver shortages and skyrocketing rates to trucking companies constantly looking for freight, unpredictability has become the norm. As an experienced shipper, it’s my job to balance these risks while still delivering products on time, every time. To achieve that level of performance, we have three goals for every shipment: a trustworthy and transparent relationship with our clients and carrier partners; an intentional outlook to confront challenges with creativity; and the enforcement of strict standards for our carriers.

Trustworthy and Transparent Relationships.

JetCo Federal books trucks direct and uses experienced freight brokers when necessary. Because of market overcapacity, trucking companies are constantly looking for freight. This can make it a tough environment for brokers and carriers who are trying to maintain high levels of service at competitive rates. JetCo Federal does business with brokers and carriers that we trust, and have developed both transparent relationships and lines of communication with. This ensures better overall resiliency in our supply chain.

An Innovative Team.

Our team is mighty. Many companies see complexity as a risk, but we have a different approach. We embrace challenges and want to win every, single day. Whether it’s a demanding contract or thorny sourcing problem, our team delivers on time, every time. We apply this same mindset to our logistics operations.

Strict Standards for Carriers.

Fulfilling government orders requires strict government access standards within our transportation department. Agencies such as the Department of Defense have complex rules and regulations when it comes to receiving products from federal government contractors.

Our logistics team takes on these complex requirements, and we have strict standards for our carriers. Carriers play a critical role in these high-security deliveries, and in order to work with us, they must have:

  • U.S. citizenship;
  • No criminal history;
  • A clean driving record;
  • And strong attention to detail as paperwork can be complicated.

Meeting these goals for every shipment allows us to manage risk and create competitive advantages for our customers with on time deliveries, even in unpredictable environments. Our team is dedicated, mighty, and is ready to help your business succeed.