5 Businesses That Found Success with OTA Contracts

As part of Vertx Partners’ series showcasing the ins & outs of Other Transaction Agreements, we highlight a few case studies exploring how OTAs benefited companies.

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At Vertx Partners, we believe results speak for themselves. Platitudes and promises of success are one thing – real-world success stories where ideas have come to life are another.

As we discussed in our Vertx Guide to OTAs, OTA (or Other Transaction Authority) gives the U.S. Department of Defense (DoD) a malleability that allows it to adopt procedural processes reflecting current industry standards and best practices into the mechanism of this award. This process encompasses research, prototype, and production projects the DoD partners with small businesses to complete.

In this guide, we explore a handful of case studies examining how small businesses become involved with Other Transaction Agreements, their roles, and how these agreements benefit them.

Here are five for your consideration:

1. Pivotal Software Inc. (acquired by VMware)

In May 2017, the Air Force submitted a solicitation for a prototype Air Operations Center (AOC) cloud software – essentially a means of re-platforming older software onto cloud-based servers more amenable to upgrades and modifications. Within three weeks, San Francisco-based company Pivotal Software Inc. was chosen to partner with the Air Force on the basis of a review process that involved first the submission of a short white paper for review and then a “start-up-style pitch.”

With Pivotal chosen, an agreement was struck, and the company was assigned a contract office that served as a middleman between the business and the AFLCMC (Air Force Life-Cycle Management Center, a sponsor of multiple consortia discussed in our OT Consortia guide). Pivotal was awarded a single 12-month award a few months later in August to work with the Air Force to develop the AOC cloud prototype.

The prototype was considered a success, and its later full-scale implementation still saves the Air Force an estimated $1 million daily in operation costs.

2. Applied Minds, LLC

This OT was awarded in 2018 when the Space Systems Command – at the time known as the Space and Missiles System Center – submitted a solicitation through the Consortium for Command, Control, Communications, and Computer Technologies (C5). After the review, Applied Minds was awarded funds to develop a concept for a facility the Space Systems Command was interested in, a facility that could expand the use and analysis of remote data collected from satellites.

Applied Minds was awarded $2.1 million to work closely with its federal contacts to design and eventually build this facility which is still in use today. This case study shows us the need for daily communication between the small business and the Technical Point of Contact (TPOC), the representative who ensures the project meets the precise requirements entailed by such agreements.

3. Technical Direction Inc.

Our next case study also comes out of 2018 and presents an interesting scenario highlighting OT contracts’ versatility. In particular, the nontraditional contractor in question, Technical Direction, was actually approached by the Air Force Research Lab (AFRL) to improve cost inefficiencies in the development of engines it made. A sole source “solicitation” occurs on occasion and, as Technical Direction is one of the few companies known to develop the sort of engine AFRL was after, the OT was drawn up with them in mind.

Technical Direction used the $1.2 million OT agreement to cut down on inefficiencies in manufacturing their Grey Wolf missile engine, aiming to halve the per-unit cost. And because they were a nontraditional contractor, no cost-sharing was necessary. The success of this OT drove down the cost of the engine by almost $14,000 (about half of its original cost), leading to a successful implementation of the contract.

4. Advanced Technology International

In 2017, Space Systems Command – again, at that time known as the Space and Missiles System Center – saw the need for an OT Consortium that focused exclusively on space. They released a solicitation calling for a manager of this proposed consortium, dubbed the Space Enterprise Consortium (SpEC). Advanced Technology International, a non-profit entity, was chosen to head SpEC based on their planned management strategy that used a cooperative committee approach where board members are voted in by consortia members.

OT solicitations don’t exclusively call for the services of a contractor who develops a contract – every level of the OT process except for the highest echelons in the public sphere is paved by industry best practices. This is how organizations like Advanced Technology have appointed positions within the transaction chain.

5. Blue Origin, LLC

In 2015, a congressional mandate seeking to shore up American supply lines and keep rocket production domestic required the DoD to develop a rocket propulsion system (RPS) that could be made in the United States by 2019. Crucial rocket parts had been sourced from Russia for many decades beforehand. The Air Force cast a wide net in search of a potential contractor who could fulfill their needs, and this approach turned out beneficial by revealing the then-largely unknown Blue Origin.

Blue Origin signed an OT agreement with the Air Force, and the solicitation ended up being subdivided between four separate teams executing specific milestones within the race to develop a new RPS. OTs – and here is a novel example that was congressionally mandated – are, again, flexible contracts that allowed for on-the-fly adjustments to the contract that benefited the Air Force and its commercial partner. Follow-on OTs were recently awarded to Blue Origin for its successful contract completion.

These are just five examples of innovative problem-solving funded through Other Transaction Agreements. As you can see, each has made its mark in several ways, whether through software, engineering, or logistical needs. The versatility of OTs even allows for several entities to become managerial bodies within the OT process.

Vertx Partners will continue to tell stories of small businesses making significant strides with federal funding. Read our other OT and OTA-inspired articles for more information. Inspired by what you see here? Contact Vertx Partners today with our 6-minute survey, and one of our experts will be in touch within 48 hours.