Breaking Down OTAs in Government Contracting

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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

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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.

Good is Baseline, Better is Competitive

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I used to have a coach that would tell us “early is on time, and on time is late” when we came in for practice. If you were only ‘on time’, you ran laps, and I spent a lot of time running laps.

It wasn’t until after a few years of customer-facing professional roles that the lesson really connected: in business, meeting the requirements is not the same as being competitive (there’s a life lesson too, but that’s for another blog). Truly serving your customers isn’t about offering a good product or experience, it’s about a better product or experience. Good is baseline, but better is competitive.

Better can mean more innovative, more customized, cheaper, or faster. Whatever it means in the metrics of an individual market is where organizations need to be looking for opportunities to improve. History tells us that no matter how special our sauce is or how rarefied our position, there’s no safety from better.

Finding those opportunities is a main objective of a motivated sales team, so when one lands in their lap, it’s incumbent upon them to recognize it and act. For example, in 2019, a major JetCo client began handling hazardous materials, but without Department of Transportation (DOT) certification, we were unable to help them move it. We evaluated the opportunity, built a training plan, and brought in a partner to help get the certification for our operations staff. Our sales team also demanded certification in the spirit of better understanding the business.

Did we expect to ever rate a shipment? Would we ever need to know how to read a code on a bill of lading? Not likely, but knowing how the sausage is made was intended to help us go beyond the “yes” for our clients, and help get into that consultative, problem-solving mode that we love so much.

Fast forward to 2020, and we’re seeing the unintended effects of that decision. The same clients that asked us about HAZMAT last year are now reaching out with a new project: COVID vaccine storage and transport. As that supply chain develops, partners who can handle dry ice (it’s hazardous!), pressurized gasses, and related materials are finding themselves fielding capability requests, JetCo Federal included. Without responding to the original request with the intent of becoming better for our clients, we would have never put ourselves in the right position for these opportunities.

The lesson in this isn’t TED-talk profound, being better at something isn’t a new way to competition. The secret is building the culture of being able to identify those opportunities when they appear and harness them effectively.

 

JetCo Federal Adds Hazardous Material Handling to Transportation, Warehousing Capabilities

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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.

The Computers Can’t Save Us: To Solve Process Problems, Think Like a Baker

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Business processes are a lot like cakes: good ones come from quality ingredients and are made by planning and proven recipes. If you have the wrong ingredients and little understanding of how to achieve the right result, it produces a bad cake. This analogy can be extended: If you’re working with poor ingredients and recipes, an industrial kitchen stocked with the latest tools won’t improve the result. You end up with more bad cakes, but faster.

Enter process automation.

We have asked computers to automate nearly every task-based element of our workday. Email is automated letter delivery. Cloud storage is automated file cabinets. Excel is an automated calculator. We’ve become so much faster and more efficient at low-level tasks that organizations are now handing more complex processes over. Relationship management, order fulfillment, and even human resources are increasingly mediated through software, but many organizations are finding that the investment in these systems hasn’t had a corresponding return.

Business process development has an analogy in computer science: GIGO, or Garbage In, Garbage Out. Many organizations are finding that weaknesses in their processes, the ‘Garbage In’, aren’t being solved by implementing new tools. Instead, they’re still getting ‘Garbage Out’. Worse, many problems are amplified by technology. While automation doesn’t necessarily help you do things better, it can almost always help you do them faster. More bad cakes.

“I’m living this right now. People are frustrated. What do I do?’

1. Recognize that CRM, ERP, or other tools won’t magically solve process issues.

This can be a hard conclusion to reach, especially where there has been (sometimes large) investment in systems on the implicit promise of solving the very thing they can’t fix. Process is just another way of saying ‘how people do things’. Even assisted by technology, people are the key factor in every process equation, which brings us to the next point.

2. Solve the root cause.

Teams that work together may have metrics that don’t align or lack shared buy-in on goals for the organization. Often, the causes are simple – communication, information sharing, measurement – but the solutions are complex. Each company will have unique challenges, but it’s critical that they’re addressed before operationalizing them into an automation tool.

3. Build feedback loops to identify and address new issues in your process.

This will help combat efficiency drift. As external variables change, the process and systems must change with them to stay relevant. Regular check-ins with each stakeholder group, external audits, and intentionally designed benchmarks or metrics, used together, are a powerful combination to measure performance and guide changes to prepare for the future.

System problems are hard to overcome if you don’t know where to start. By following the steps above and recognizing the weakness in your processes, you’ll be on-track to helping your organization maximize the benefits of automation.