Other Transaction Agreements are an increasingly popular contracting tool, and they’re affecting overall government contracting numbers. OTA purchases across the government surged from $2.3 billion in fiscal 2017 to over $4 billion in fiscal 2018.
The numbers come from the BGOV200, an annual ranking of the top 200 federal contractors created by Bloomberg Government.
“While multiple-award contracting is expected to dominate spending for years to come, agencies are also leveraging new acquisition methods to buy goods and services more quickly and easily in ways they haven’t before,” the report states.
The OTA authority, which was expanded by the 2016 National Defense Authorization Act, allows agencies to sidestep the Federal Acquisition Regulation and work with innovative, small companies that don’t normally do business with the government.
“Four billion dollars technically isn’t a huge amount considering the government spends $560 billion annually,” Daniel Snyder, director of government contracts research at Bloomberg Government, told FedScoop. “But it does have a tremendous amount of importance in terms of scaling new prototypes.”
OTA awards are generally quite small, as they are intended to fund prototype projects in an iterative fashion.
“It gives the government a huge flexibility,” Snyder said.
DIU and beyond
The Department of Defense’s Defense Innovation Unit (DIU) is a notable user of OTAs. In spring 2018 the group launched an innovative acquisition training program called HACQer, which gives DOD acquisition officials a four-month immersion in DIU’s operating model. The program’s 2019 cohort began in April.
Some in government, however, have warned against the overuse of OTAs.
“I think that’s the biggest risk,” Soraya Correa, DHS chief procurement officer, said at an event in November 2018. “That people use them properly, that we don’t overuse them, that we don’t abuse them, so they are around for the long haul.”
The BGOV200 also lists the top performing IT contractors for 2018 — General Dynamics with $3 billion in obligations, Leidos Holdings Inc. with $2.4 billion and Perspecta with $2.2 billion head up that list. Per the report, tech services is the third largest category of spending after knowledge-based services and facility-related services. Tech spending also grew by $5 billion between fiscal 2017 and fiscal 2018 — the fourth straight year of an increase in this area.