Now that we have discussed what an OTA is, we also need to discuss what an OTA is not. An OTA is not a contract, grant or cooperative agreement. OTAs are not for everything. They are not bound by most of the Government statutes and regulations for procurements nor are they generally bound by the laws and regulations applying to grants or cooperative agreements. OTAs are not an easy sole source award and should be awarded based on competition. They are also not the panacea for doing business with the Government or to get around the rules.
One of the biggest advantages of an OTA is that they are not governed by the Federal Acquisition Regulation (FAR) or its supplements, Truthful Cost or Pricing Data (formerly called TINA), Competition in Contracting Act (CICA) (although competitive procedures may be used), the Contracts Disputes Act, or Cost Accounting Standards (CAS). By eliminating the need to be bound by these regulations, the Government has much greater flexibility. However, OTAs do not eliminate the applicability of all laws and regulations such as ITAR; OPSEC; the Procurement Integrity Act; Trade Secrets Act (18 USC § 1905), Economic Espionage Act (18 USC § 1831-39), Freedom of Information Act (FOIA)(5 USC § 552); Privacy Act (5 USC § 552a) and fiscal, property or criminal laws (such as false claims/statements) still apply.
Because CICA does not apply and OTAs are not procurement contracts, the General Accountability Office (GAO) does not have jurisdiction. Because the GAO does not have jurisdiction, protests are not usually a factor. That does not mean OTAs are protest-proof, though. Protests may still be filed at the agency-level or the U.S. Court of Federal Claims.
The Bayh-Dole Act which covers patents (35 USC § 202-204) and 10 USC § 2320-21 (which covers rights in technical data) do not apply, either, and therefore, intellectual property rights are open to negotiations. Although the Bayh-Dole Act does not apply, it will usually be the starting negotiation position of the Agreements Officer. (OTAs do not have Contracting Officers. Only an Agreements Officer has the authority to enter into, administer, or terminate a prototype agreement. Further, all Agreements Officers must also be a warranted Contracting Officer with a comparable dollar value warrant.)
OTAs are not subject to a DCAA audit or the cost principles in FAR Part 31, although many DoD agencies want to include cost requirements. Because of the cost-sharing arrangement, the Agreements Officer will typically include a clause in the agreement requiring some form of an accounting system – preferably the awardee’s existing accounting system – especially if they are using financing options such as advance payments and milestone payments. The system should be capable of maintaining adequate records for Federal funds received and the cost-sharing, as applicable.
OTAs give the Agreements Officer the flexibility to use best practices and the latitude to negotiate different terms. Ultimately, participants in an OTA need to understand the requirement and have expert individuals with the requisite knowledge and skills to be able to successfully negotiate an agreement. OTAs should be looked at uniquely for each individual transaction and it is advisable to seek legal counsel whenever there are questions. For more information, please refer to the latest OTA Guide located http://acqnotes.com/acqnote/careerfields/other-transaction-authority-ota.