Author Archives: Alan Chvotkin

1. Using OTAs – Opportunities but Uncertainties

   December 2, 2025 5:03 pm Leave a Comment

   Introduction

   Other Transaction Agreements (OTAs) are again in the federal procurement newsfeeds because of new initiatives from the Department of Defense/War (DoD). I’ve represented companies in the negotiation and award of OTAs and taught classes to contractors on what they are and how to work with and towards them, while protecting their interests. Yet I’ve said many times: “If you’ve seen one OTA, you’ve seen one OTA!” DoD’s new attention will certainly bring new opportunities, but it comes with risks and uncertainties that can diminish their value or fail to bring the anticipated results.

   What Are OTAs?

   According to the Defense Acquisition University,[i] Other Transaction Agreements (OTAs) are valid U.S. Government contractual instruments other than standard procurement contracts, grants, or cooperative agreements. OTAs can include flexible business arrangements to acquire research and development activities to advance new technologies (Research OTAs), and prototypes or models to evaluate technical or manufacturing feasibility or military utility of new or existing technology (Prototype OTAs). This may apply to processes, concepts, end items, and systems from non-traditional defense contractors, as well as from traditional defense contractors when statutory requirements for small business participation or cost sharing arrangements are satisfied.[ii] Many laws and regulations governing federal contracts do not apply to OTAs (i.e., Federal Acquisition Regulation (FAR) and the Competition in Contracting Act (CICA)); however, the Procurement Integrity Act, most fiscal laws, and competitive practices are applicable.

   OTAs provide opportunities to structure agreements that may leverage commercial business practices and remove barriers to entry such as cost accounting standards (CAS) compliance. Also, intellectual property rights requirements may be negotiated to encourage non-traditional defense contractors to do business with the government.

   Awards can be made to a single organization or through a consortium organized around a particular technology or mission area. In recent years, the consortium model, and the creation of Consortium Management Organizations (CMOs), have become the dominant recipients of DoD OTA awards.

   Promoting the Use of OTAs within DoD

   The Department of Defense/Department of War (DoD) has the broadest legislative foundation for using OTAs. While first made available to the Defense Advanced Research Projects Agency (DARPA) in 1989, over time, Congress has expanded, tweaked and constricted their use by DoD. Now, they can be used for research and development or for prototyping. When appropriately planned for and successfully completed using either of these two types of instruments, they can also be used for follow-on production. According to a September 3, 2025, Government Accountability Office (GAO) report, DoD has obligated over $18 billion through OTAs in Fiscal Year 2024, the last full year for which data is available.[iii]  According to a June 30, 2025, blog from FedConsult,[iv] total government OTA  awards in Fiscal Year 2025 for all federal agencies was (only) $18.36 billion, with $18.12 billion of that coming from defense agencies. Total federal contract spend in Fiscal Year 2024 was $774 billion!

   On March 6, in a Secretary of Defense memo titled “Directing Modern Software Acquisition to Maximize Lethality,” he directed DoD components to use OTAs “as a default procurement approach for software acquisition pathway efforts.[v] Then, on April 9, 2025, the President issued an Executive Order directing preferential use of OTAs for DoD acquisitions.[vi]  Finally, on November 10, 2025, following the Secretary of Defense’s November 7 speech, the Department released it “Acquisition Transformation Strategy,” and under Pillar #1 to rebuild the defense industrial base, the strategy called on the department to maximize flexible contracting by promoting the use of OTAs, and indicated that the department will provide “additional resources, guidance and training” to expand the use of OTAs.[vii] Guidance and further instructions are to be issued within 90 days.

   The “Wannabees”

   Only 20 departments or agencies (or portions of agencies) have been given any type of authority to use OTAs in their acquisitions, and not every one of them has been given the full range of options that DoD has been given.[viii] In addition, many other federal agencies have petitioned Congress for either limited, unlimited, or expanded authority to use OTAs as part of their acquisition reform initiatives or to make temporary authority permanent.

   Data Challenges at DoD

   In its September 2025 report to Congress, the GAO noted that DoD “lacks full information about the outcomes of OTA use. For example, DoD cannot systematically track the extent to which DoD transitioned prototype projects using OTAs into production efforts. DoD also lacks aggregated data on the extend of NDC (non-traditional defense contractors) participation on OTAs.”[ix]

   GAO also noted that, in July 2021, “DoD (could) still not fully identify which consortia members are performing the work awarded under consortia-based OTAs and recommended that DoD develop and implement a systematic approach to track consortium members performing on OTAs. DoD concurred in that recommendation and in June 2022, GSA added new data fields to the Federal Procurement Data System (FPDS) to identify awardees performing consortia-based awards. In this report, GAO reviewed the updated FPDS fields and found that 84 percent of the covered records contained the proper information.[x]

   GAO’s report made two recommendations to DoD. First, that DoD develop and implement a systemic process to track FAR production contracts using DoD’s follow-on production authority. Second, that DoD fully and accurately report on consortia members performing on projects awarded under consortia-based OTAs.[xi] DoD concurred with both recommendations.[xii]

   However, there is no other known independent review of how other agencies with some form of OTA authority have complied with the recordkeeping and reporting of their OTA transactions.

   Conclusion

   OTAs have been available to DoD for decades and to many other federal agencies (other than NASA which was the recipient of the original OTA authority in the 1958 Space Act), for many years. They provide a valuable alternative to agencies to meet unique or specialized need, when used by knowledgeable government agencies and sophisticated, even if not “traditional,” contractors. The renewed push by DoD will certainly accelerate the learning curve for both the department and for those companies who might find this procurement method attractive. But with opportunities will come risks and challenges that neither the government nor industry should take lightly or ignore. Both sides need competent and experienced professionals versed in the uniqueness of OTAs to be successful.

   [i] Drawn from Defense Acquisition University (DAU), renamed in November 2025 as the Warfighting Acquisition University, Adaptive Acquisition Framework Contracting Cone, available at Other Transactions | Adaptive Acquisition Framework.

   [ii] Unique to the requirements imposed by statute on the Department of Defense is to utilize “non-traditional defense contractors.” A non-traditional defense contractor is an entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the DoD for the procurement or transaction, any contract or subcontract for the DoD that is subject to full coverage under the cost accounting standards (CAS).

   [iii] See Government Accountability Office  report: “Other Transaction Agreements; Improved Contracting Data Would Help DoD Assess Effectiveness,” Sept 3, 2025, available at GAO-25-107546, Other Transaction  Agreements: Improved Contracting Data Would Help DOD Assess Effectiveness, at 8.

   [iv] See Archisha Mehan blog for FedConsult: Federal Procurement’s New Frontier: The Rise of OTAs, available at Federal Procurement’s New Frontier: The Rise of OTAs – GovSpend.

   [v] See Memorandum for Senior Pentagon Leadership (and others), March 6, 2025, available at Directing-Modern-Software-Acquisition-to-Maximize-Lethality.pdf.

   [vi] Executive Order 14265 (April 9, 2025), titled “Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base,”, available at 2025-06461.pdf.

   [vii] See Department War November 10, 2025, “Acquisition Transformation Strategy,” available at Acquisition Transformation Strategy, at 10.

   [viii] As of August 2024. See Association for Talent Development Aug 9, 2024, blog titled “Unlocking Innovation: A Guide to Other Transaction Authorities (OTAs) for Federal Agencies,” available at Unlocking Innovation: A Guide to Other Transaction Authorities (OTAs) for Federal Agencies.

   [ix] See Note iii, supra, at 8.

   [x] See Note iii, supra, at 14.

   [xi] See Note iii, supra, at 32.

   [xii] See Note iii, supra, at 41.

2. Protorae Law’s Alan Chvotkin Quoted in Law360 on the Impact of the Shutdown on Federal Contractors

   November 6, 2025 2:16 pm Leave a Comment

   Protorae Law member Alan Chvotkin was quoted in Law 360’s October 31, 2025, article by senior reporter Madeline Lyskawa addressing the implications for Federal Government contractors of the on-going shutdown of federal activity due to the lapse in appropriations. Commenting on the impact from stop work orders issued by federal agencies to contractors, Chvotkin noted that “one of the biggest impacts will be on scheduling,” which can cause contractors to incur additional costs and face issues with funding.  Furthermore, he noted, “lifting of the shutdown doesn’t necessarily mean a restoration of 100% of prior funding.”  In addition, Chvotkin said that the longer the shutdown continues, “the more pay for work previously performed, or even work performed during the shutdown, is going to be backed up.”

   The article, titled “Contractors Face Rising Costs From Gov’t Shutdown,” is available at Contractors Face Rising Costs From Gov’t Shutdown – Law360 (paywall).

   If you have any questions about the effect of the shutdown on contractors while it is still in place, or actions to be taken when the shutdown ends, you can reach Alan at achvotkin@protoraelaw.com.

3. FAR Overhaul Remains a Work in Progress

   November 5, 2025 5:09 pm Leave a Comment

   November 3rd was the last date for public comments on most of the early template changes to the Federal Acquisition Regulation (FAR) “revolutionary” overhaul. Templates for revisions to all of the FAR have now been released. While impressive that the Executive Branch team has completed its core work of the first comprehensive rewrite of the FAR, and while the analyses of the changes proposed to each of the parts of the FAR are continuing, contractors should still be vigilant about how these changes are being addressed by individual federal agencies. 

   Timeline and Key Templates of the FAR Rewrite

   This FAR rewrite was launched by President Trump’s Executive Order 14275 on April 15, 2025 (i) with a target completion date of 180 days (ii) The final two sections of the FAR rewrite, covering Part 2 (relating to “Definitions of Words and Terms”) and Part 52 (relating to “Solicitation provisions and Contract Clauses”) were published on October 28, 2025, twenty-eight days into the Fiscal Year 2026 “shutdown” due to the lapse in appropriations. The last seven substantive changes to specific parts of the FAR were published on September 30, 2025.  

   Agency Deviation Requirement Creates Inconsistency

   But publishing the templates for each of the current Parts of the FAR was only the first, albeit a significant, step in the FAR overhaul process. From the outset of the FAR overhaul design, agencies were tasked with the responsibility for issuing class deviations to their own FAR supplements, based on the common templates (iii). As I previously noted (iv), this requirement for individual agency deviations has created confusion and inconsistency across the government – even though eliminating such confusion and inconsistency was the core objective of creating and maintaining the government-wide FAR from its April 1984 inception.  

   Low Compliance: Tracking Agency Deviations

   Throughout this FAR overhaul process, the Department of Defense/Department of War has been an integral participant in creating the various templates but has not issued a single class deviation to its Defense Federal Acquisition Regulation (DFARS). Furthermore, even excluding the last seven substantive changes that were issued on September 30, and the final two updated that were issued on October 28, agencies have failed to timely meet their obligations to publish deviations implementing the template changes within their own agencies.  

   The high-water mark for agency-published deviations was for the very first FAR overhaul template that was published on May 2, 2025, covering FAR Part 1. By August 7, 2025, 31 agencies had published a class deviation modifying their own agency acquisition supplement and none have been published since August 7. The first agency to act was the Millennium Challenge Corporation on May 8; the last was the U.S. Agency for International Development on August 7, 2025. However, as of October 31, 2025, that 31 number of agency-issued deviations was reached only one other time during this process, covering FAR Part 10 (relating to market research). Even excluding all of the FAR templates that were first published during September or October, the number of agency deviations published by October 31, 2025, range from a low of seventeen (for both FAR Parts 28 and 48) to a high of twenty-nine (for FAR Part 34)(v).   

   Contractor Due Diligence: Varying Effective Dates

   In addition, the effective date of each published agency deviation varies. For example, for the May 2, 2025, template changes to FAR Part 1, most were effective upon publication, with effective dates for any specific agency ranging throughout May to August, and several were made retroactive to the May 2 template publication.  

   Thus, contractors pursuing new procurement opportunities at a federal agency need to know what class deviations that agency has already issued, what is the effective date of each of those deviations, and whether those deviations have been properly incorporated into their new solicitations.   

   Challenges to Agency Action

   There is no doubt that the September publication of so many of the FAR rewrite templates, coupled with the government shutdown that likely furloughed many of the agency personnel responsible for issuing their own deviations, has affected agencies completing these actions. But what accounts for the incomplete action on earlier template publications? 

   The Next Steps in the FAR Overhaul Process

   The next steps in the overhaul process will be the FAR rewrite team’s review of the “informal” public comments that have been submitted to each template publication, followed by a determination to make any revisions to the templates/deviations, and then to publish the integrated FAR rewrite for official public comment.   

   According to the May 2, 2025, OMB memo: 

   “After the FAR Council has posted model deviation guidance for all FAR parts, it will turn to formal rulemaking using the notice and comment process set forth at 41 U.S.C. § 1707. The rulemaking will be informed by the model deviation text, public input on the text received on the RFO website, operational experience with agency deviations, recommendations from agency points of contact identified pursuant to subsection (b), testing of the buying guides, and other appropriate inputs.” 

   Conclusion: Focus on Agency Deviations and DFARS

   While there is still a long way to go on the formal FAR overhaul process before it becomes effective, in the near term the name of the game is in the agency deviations to their own acquisition supplements and when and how they are incorporated into agency acquisitions. We’re also waiting for action by the Department of Defense to modify its DFARS rules to align with the FAR templates. Contractors should closely follow their key agencies for publishing additional deviations and for implementation into upcoming solicitations. I’ll be watching their actions, as well.  

   If you have any questions or need any additional information, please do not hesitate to contact me at achvotkin@protoraelaw.com, or contact the Protorae Law attorney with whom you normally work.   

   Works Cited

   i Executive Order 14275 of April 15, 2025, titled “Restoring Common Sense to Federal Procurement.” 
   ii The 180-day target date for completion, as provided for in Section 4 of the Executive Order, was October 15, 2025.
   iii See Office of Management and Budget Memorandum M-25-26 (May 2, 2025), titled “Overhauling the Federal Acquisition Regulation”, and one from the FAR Council providing “Deviation Guidance to Support the Overhaul of the Federal Acquisition Regulation.” Under this FAR Council directive, agencies are to issue these deviations within 30 days of the release of the model deviation.
   iv See my June 4, 2025, blog for Centre Law & Consulting titled “FAR Overhaul – Emphasizing Speed Over Uniformity.”
   v As of November 3, 2025, I’ve not completed my matrix to show which agency has issued a deviation for each Part issued. However, on November 3, GSA’s senior acquisition executive, Jeff Koses, posted on LinkedIn that GSA, the Department of Agriculture, and the Department of Homeland Security have issued all of required deviations. That leave 28 agencies that have not completed publication of deviations for the templates for each of the FAR Parts, including zero deviations published by the Department of Defense/Department of War.

4. Alan Chvotkin Shares 5 Essential Shutdown Contract Strategies at WashingtonExec Event

   October 21, 2025 11:36 am Leave a Comment

   This prolonged government shutdown demands deliberate and careful attention from federal contractors. Protorae Law PLLC was proud to have Alan Chvotkin, a leader in our Government Contracts practice, serve as a featured expert at the October 10, 2025 WashingtonExec virtual seminar, “Federal Shutdown 2025 is Now Real, Not Just Hypothetical.” Alan provided a crucial briefing, emphasizing that circumstances could change rapidly, and contractors must stay on top of potential effects on their programs and contracts.  Key to proactive management is to closely watch the funding status of your specific contracts to guide your strategic decisions during the shutdown.

   Prioritize Performance and Funding Awareness

   Alan emphasized the critical importance of contract performance. Unless formally told to stop work, you must continue to perform all elements of your contract. This includes the timely submission of both invoices and required reports. 

   Meticulous Documentation is Essential

   Meticulous documentation is essential during this period. For each federal contract affected by the shutdown, Alan strongly advised contractors to separately track the time and expenses incurred. This dedicated effort to document costs is the foundation for any future requests for reimbursement.

   Understand Claims and REA Deadlines

   Finally, Alan provided a critical warning concerning recovery: Be aware of the strict timelines for submitting Requests for Equitable Adjustment (REAs) and formal claims once the shutdown ends. Missing these deadlines can irrevocably waive your right to recover costs associated with the shutdown’s impact.

   Alan’s insights underscore the need for vigilance and legal strategy in the government contracting community. If you or your company need guidance or additional help navigating the impact of the shutdown on your federal contracts, please contact Alan Chvotkin and our Government Contracts team.

5. Finally Something Good for Government Contractors About Inflation

   September 4, 2025 12:58 pm Leave a Comment

   It’s not often that inflation has a positive impact on federal procurement. But three rules issued in the last days of August fall into that category.

   First, on August 22, Small Business Administration published a proposed rule that would increase all of the revenue-based size standards for 263 NAICS codes, as part of SBA’s statutorily required five-year review of all SBA size standards. SBA also decided not to adjust the size standard for any of the 213 NAICS codes that would otherwise have seen a reduction, potentially affecting almost 8,000 firms. However, further rulemaking is required before this proposed rule becomes effective.

   Second, on August 25, the Department of Defense published a final rule, effective October 1, 2025, making inflation adjustments to its acquisition-related thresholds, as part of the statutory requirement for a five-year adjustment of statutory acquisition-related thresholds for inflation. Among the numerous DFARS changes is an increase to $15 million in the floor for post-award debriefing when requested by a small business (although the information required to be provided does not change).

   Third, on August 27, the FAR Council published a final rule, effective October 1, 2025, making inflation adjustments to Federal Acquisition Regulations acquisition-related thresholds, as part of the same statutory requirement for a five-year adjustment of statutory acquisition-related thresholds for inflation. Among the numerous FAR changes are an increase in the micro-purchase threshold (MPT) from its current $10,000 to $15,000 while increasing the levels for existing exceptions and raising the Simplified Acquisition Threshold (SAT) – and by implication the small business reservation threshold – from $250,000 to $350,000. The rule increases the ceiling for using FAR Part 13 Simplified Acquisition Procedures from $7.5 million to $9.0 million and raises the TINA threshold under FAR 15.403-4 from the current $2 million to $2.5 million.

   Conclusion

   These numerous adjustments have a significant impact on the entire government marketplace, for both federal agencies and for government contractors. Particularly when the SBA size standard are finalized, most companies will benefit from the higher levels, and some will even being able to retain their small business status. Watch for this final rule late in this calendar year.

   As to the FAR and DFARS adjustments, remember that many of these thresholds are either floors affecting when actions become available, or new ceilings below which certain benefits apply. After October 1, be sure to watch for the applicability of these revised thresholds in new solicitations and how they will apply to your particular contractual actions.

   If you have any questions or need any additional information, please do not hesitate to contact the author at achvotkin@protoraelaw.com or the Protorae Law attorney with whom you normally work.

    

   1- SBA proposed rule “Small Business Size Standards: Monetary-Based Industry Size Standards”, August 22, 2025, available at 2025-16142.pdf. Last viewed September 2, 2025.

   2- DFARS final rule “Inflation Adjustment of Acquisition-Related Thresholds”, August 25, 2025, available at 2025-16205.pdf Last viewed September 2, 2025.

   3- FAR final rule “Inflation Adjustment of Acquisition-Related Thresholds”, August 27, 2025, available at 2025-16412.pdf. Last viewed September 2, 2025.

   4- “TINA” formerly referred to as the “Truth In Negotiations Act,” requires contractors to provide current, complete and accurate cost and pricing data when negotiating government contracts in certain circumstances; it has been renamed the “Truthful Cost or Pricing Data” but everyone still calls it “TINA.”