All about Other Transactions Authority (OTAs) with Richard Dunn

In this episode of the Acquisition Talk podcast, I speak with Richard Dunn about commercial contracting, and in particular, Other Transactions Authority(OTAs). He is the founder of the Strategic Institute, and has had a long career in government including General Counsel of DARPA. Rick argues that the traditional Federal Acquisition Regulation (FAR) does not have enough flexibility to allow for commercial contracting. Instead of focusing on value and innovation, the FAR narrows government's focus on cost. The system is "fundamentally unfair," he said. If it were fair, we should expect to see greater business participation. One study found that just the top ten regulations contribute to an 18 percent cost premium. Why would any firm take on that cost at the expense of being noncompetitive in their commercial markets? Other Transactions, by contrast, allow the government to legally negotiate terms and conditions without reference to the FAR. In other words, the government can do business like any commercial firm, leading to lower transaction costs. However, the adoption of OTs have been stymied for decades because of proactive resistance. Preexisting learning stops subsequent learning, and contracting officers tend to think in terms of FAR language. Rick suggests how to break out of that mindset. During the conversation, we discussed: - The reason Norm Augustine said Lockheed couldn't do commercial business - How contract regulations became so burdensome - Why are most OT consortia are only "so-called" consortia - The effect of telling contract officers they will go to jail for non-compliance - How OTs "shop problems" while the FAR "shops requirements" - How startups can use unfunded OTs to gain access to government capital and users - Why payable milestones are outside of the FAR - The history of OTs, including Paul Demling, NASA, and the Telestar satellite This podcast was produced by Eric Lofgren. Soundtrack by urmymuse: "reflections of u". You can follow us on Twitter @AcqTalk and find more information at AcquisitionTalk.com.