Other Transaction Authority (OTA) agreements — the non-FAR procurement pathway originally designed for R&D prototyping — have become a significant channel for federal contract dollars. Per CSIS, DoD OTA obligations grew from $1.8 billion in FY2016 to over $18 billion in FY2024, with prototype OTA obligations alone exceeding $16 billion in FY24. The FY2026 NDAA further expands the authority. Coverage from CSIS, PilieroMazza, and GAO.

Why OTAs matter for small firms

Traditional FAR-based procurement is notoriously hostile to firms without established federal track records — past performance requirements, compliance infrastructure, and proposal cycles all favor incumbents. OTAs were explicitly designed to "access new sources of technical innovation" from firms and organizations that "do not usually participate in government contracting due to the typical overhead burden and 'one size fits all' rules."

Practical differences that matter:

  • Faster award cycles (often 60-90 days vs. many months for FAR)
  • Flexible IP terms — fewer compulsory rights for the government
  • No FAR clause flowdown requirements (subcontracting relationships are commercial)
  • Prototype → production transition available without re-competition

What the FY26 NDAA changes

Two significant expansions to OTA-adjacent authority:

  1. Commercial Solutions Openings (CSOs) expanded. NDAA FY26 amends 10 U.S.C. § 3458 to allow CSO use for all commercial products and services — not just innovative technologies. This materially broadens the scope of items procurable outside FAR.
  2. Written-determination requirement eliminated above $10M. Previously, CSO awards above certain thresholds required formal determination from the Under Secretary of the Navy (Acquisition & Sustainment). That requirement is gone for contracts above $10M — meaningful procurement speed gains.

Where to actually find OTA opportunities

OTA solicitations often don't appear on SAM.gov. Primary channels:

  • Defense Innovation Unit (DIU) — diu.mil. Commercial-tech focus, prototype OT agreements. See our DIU coverage.
  • DIBC (Defense Industrial Base Consortium) — membership-based consortium managing OTAs across DoD programs.
  • ATI (Advanced Technology International) — OT consortium manager across multiple defense programs.
  • DARPA — many DARPA solicitations are OT-based, including recent CLARA AI program.
  • Agency-specific OT consortia — Army CCDC, SOCOM, NAVAIR all run their own.

GAO's concerns

Per GAO's FY2025 report on OTs (GAO-25-107546), DoD's OT data quality limits oversight. The rapid growth has outpaced reporting infrastructure, meaning it's genuinely hard for third parties to assess whether OTAs deliver better outcomes than FAR procurement. Expect some congressional pressure to tighten reporting requirements even as the authority expands.

What to do this week

  • If your firm develops any tech that could plausibly prototype under DoD programs, join 1-2 OT consortia (DIBC, ATI, or agency-specific). Consortium membership is typically the entry point.
  • Register on DIU's commercial-solutions page. Their 60-90 day prototype award cycle is the fastest federal procurement speed available.
  • Rebalance your BD time: if your firm has been chasing FAR-path procurement with limited success, consider shifting 30-50% of capture hours to OT-accessible opportunities.

Sources