Other Transaction Authority (OTA) Cost Impact

Typical Department of Defense DOD acquisition contracts comply with the Federal Acquisition Regulation and are burdened by government unique regulatory compliance costCoopers and Lybrand TASC, 1994, government-induced overhead cost, and DOD regulatory cost premiums Barry, 1995. This bureaucratic and administrative cost BAC burden increases the cost of defense acquisition programs. Other Transaction Authority OTA agreements are not subject to the FAR, thus have potential to reduce the BAC burden, and lower the cost to the US taxpayer. The goal of this research was to investigate the predictability of any cost impact with utilizing OTA agreements for Defense Acquisition Programs. Understanding the predictability of associated cost impacts could assist in making budgetary and programmatic decisions. The research method employed was a literature review of unclassified open source documentation. This literature review resulted in a better understanding of the BAC burden associated with FAR based contracts, the 60-year history of Acquisition reform, and past success of innovation under OTAs. The results of this research project suggest OTAs are better, faster, and cheaper than FAR based contracts, but insufficient quantitative data exists to determine the predictability of the magnitude of any cost impact from utilizing OTAs. The conclusions and recommendations of the literature review are provided on pages 50 and 51.