UNDERSTANDING OTHER TRANSACTION AGREEMENTS (OTA) AND CRADAS

Other Transaction Agreements (“OTAs”) are a unique federal contractual instrument which have flexible rules in order for organizations to develop certain product prototypes as well as pursue research and development opportunities for the government. OTAs can be awarded to individual entities or to consortiums, including consortiums formed specifically to perform a specific OTA. These OTAs frequently present the opportunity for parties to carefully craft and tailor the contract to maximize efficiencies and facilitate the effectiveness of the program, and because they are not subject to the procurement laws or regulations (including the Federal Acquisition Regulation or FAR). Consequently OTAs are touted as the “freedom to contract” and often are perceived to be less stringent than typical federal procurement contracts because they are free of many of the onerous requirements and practices characteristic of procurement contracts such as the government contract cost accounting , rights in data (and other intellectual property), and other procurement contract unique requirements. But OTAs still involve use of taxpayer monies and resources, and require prudent stewardship by all parties. Like any material contractual relationship, OTAs present unique challenges from formation, through administration and completion of the instrument.