FED GOV CON - OTA - The Fine Print

FED GOV CON
Webinar Wednesdays
2019 Series
JSchaus & Assoc.
Washington DC
+ 1 – 2 0 2 – 3 6 5 – 0 5 9 8

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About Our Speaker:
Anthony Anikeeff
Education:
University of London, London School of
Economics and Political Science (LL.M.)
College of William & Mary School of Law (J.D.)
University of Virginia (B.A.)
Company Name:
Williams Mullen
25+ Years Federal Gov Con Experience

Other Transaction
Agreements (OTAs)
Fine Print - The Details

WHAT WE WILL COVER
Definition
Environment
Use
Structure and Process
Term of OTA
Terms of Consortium Agreement and Project Agreements
Subcontracts
2019 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates

WHAT IS AN OTA?
Defined by what it is not:
1. Legally binding instrument
2. Congressional authority for agency to use
3. “Other than contract, grant or cooperative agreement subject to federal
procurement laws/regulations”

WHAT IS THE OTA ENVIRONMENT?
Who can use?
Congress has granted many agencies (Approx. 11) OTA authority
DoD most active
Authority varies between agencies
***
Department of Defense & delegated components
Federal Aviation Administration
Department of Transportation & delegated components
Department of Homeland Security & delegated components
Department of Health and Human Services & delegated components
Department of Energy & delegated components

WHAT ARE OTAs USED FOR?
Intractable issues not suitable for rigid procurement system
*** E.G.***
DoD: Prototypes to improve military technology
DHS: Prototype to improve energy security
DOE/ARPA-E: Solar/geothermal energy research
HHS and NIH: Medical issues research aimed at diseases, biomedical advances,
pharmaceuticals
DOT: Research to enhance oil/pipeline safety
FAA: Research safe unmanned aerial systems (UAS) operations in national airspace
NASA: Space Act Agreements, including international cooperative space activities

HOW DO OTAs WORK – GENERAL
Generally three types – some agency variation
R&D: Spur development of advanced technologies (potential commercial application)
Prototype: Advanced concept technology demonstrations; risk reduction prototyping;
evaluate feasibility or operational military utility of a concept or system
Follow-on production (without competition): Produce product from successful
prototype effort

WHAT ARE THE GROUND RULES?
Some agency variation
E.G., DoD (most active agency using OTAs) (See Other Transactions Guide, Office of
the Under Secretary of Defense for Acquisition and Sustainment (11/2018 Version
1.0))
A. R&D:
(1) Standard contracts, grants, cooperative agreements infeasible/inappropriate
(2) Work will not duplicate other DoD work
(3) Private sector cost share - 50% plus

B. Prototype:
(1) Must (a) enhance mission effectiveness of military personnel and supporting
platforms, systems, components, or materials; (b) improve platforms, systems,
components, or materials in use by the armed forces.
(2) Must have significant “nontraditional contractor”, nonprofit research, or small
business involvement; or
(3) 33% cost share by private sector (i.e., traditional contractor involvement).
Nontraditional contractor: Entity has not performed in past year on DoD contract or
subcontract subject to full coverage under the cost accounting standards.

C. Follow-on production contract without competition:
1. Prototype OTA provide for follow-on production contract
2. Prototype transaction must have used competitive procedures
3. Prototype transaction successfully completed prototype project

GETTING INVOLVED
Different types of OTA arrangements
> Direct engagement: Individual/joint venture
> Consortium
● Group of traditional and nontraditional government contractors
self-organized around a specific technological area
● Models vary, but for most:
Simple application
Low membership fee
● Management:
Self-managed
Consortium management company

OTA DETAILS - THE GOVERNMENT DEAL
Substantively similar terms for standalone and consortium OTAs
Characteristics
● No set format (government may propose model as opening offer)
● Commercial contract which must be negotiated
● No FAR clauses (negotiate if principles desired & resist government resorting to FAR)
● No preordained IP/data rights rules (negotiated) – Possible minimum government rights
● Flexibility for best practices
● Less oversight/red tape
● Only limited laws apply
● OTA terms will govern terms of lower tier agreements (consortium and subcontracts)
● Leverage counts (government will seek to protect its interests)

OTA DETAILS - THE GOVERNMENT DEAL
Sample elements (significant variations possible and as negotiated)
SOW // Definitions // Scope // Term and Termination // Project Management, Structure,
Obligations // Program Management Planning // Modifications // Payment and Pricing // Access to Records
// Disputes // Limitation on Damages // Patent Rights // Data Rights // U.S. Industry Preference //
Handling of Lower Tier Agreements // Restrictions on Foreign Participation (if applicable) // Restrictions on
foreign transfer of information // Property Disposition // Civil Rights Act // Special Terms // Reports //
Standard Terms

THE CONSORTIUM DEAL?
OTA negotiated between government and consortium manager
Members enter into consortium agreement with consortium manager
Sample Terms (Significant Variations Possible)
Objective // Membership Requirements // Relationships // Project Assignment
Process and Agreements // Project or Other Assessments // Membership Fees //
Management Structure, Duties and Operations //
Membership Rights and Duties // Term and Termination // Liability and
Insurance // Audit issues // Confidentiality // Antitrust Considerations // Disputes
Standard Agreement Terms

THE CONSORTIUM DEAL?
Master project agreement (optional)
SOW, price & all general substantive terms for work
Negotiated commercial terms
OTA flowdowns
Upon award of project
Individual project award agreement or
Task order assignment based off of master agreement (can be short)
SUBCONTRACTS
Standard subcontract agreement
Addition of OTA required clauses via project agreement with member

DOWNSIDE?
No traditional FAR protections
Must negotiate your rights
Limited protest protection
Being shut out - consortium
Limited direct access to government
Disputes
Protecting IP – up to you

CONCLUSION

THANK YOU!
JSchaus & Assoc.
Washington DC
hello@JenniferSchaus.com
www.JenniferSchaus.com
+ 1 – 2 0 2 – 3 6 5 – 0 5 9 8
Speaker: Anthony Anikeeff
Email: aanikeeff@williamsmullen.com
Phone: (703) 760-5206

FED GOV CON - OTA - The Fine Print

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