Other Transaction Authority (OTA) agreements have been gaining in popularity among federal agencies seeking to acquire Research and Development (R&D) and other innovative efforts outside the traditional Small Business Innovation (SBIR) and Small Business Technology Transfer (STTR) context. And, as OTAs have gained increasing status, contractors have tried to identify a forum that gives them a place to challenge those OTA awards. Last month, the Court of Federal Claims (CoFC) left no doubt that there is now at least one forum that is willing to consider certain challenges of OTA procurements. It held that it "has jurisdiction to review a follow-on production contract that seeks to acquire property or services for the government, whether the agency issued the follow-on solicitation under OTA authority or under FAR authority."
The court reached that conclusion in addressing a protest of an OTA solicitation for the production of some modernized vehicles. The protester, Independent Rough Terrain Center, LLC (IRTC), had developed prototypes for the same vehicles under another OTA agreement. While the court ultimately denied IRTC's protest, based on a lack of standing due to IRTC's non-compliance with the solicitation's requirements for System for Award Management (SAM) registration, its detailed decision illuminated some of the requirements needed to establish jurisdiction and standing for future challenges of OTA efforts:
Jurisdiction: The court held that it had the jurisdiction to review pre-award protests against solicitations seeking to acquire certain property or services for the benefit of the government in a follow-on production effort – regardless of whether those solicitations were issued as non-FAR based OTA-type solicitations or more common FAR-based solicitations. The court based that conclusion on the distinction that it found between the two different ways that the term "procurement" can apply to an OTA. In doing so, it recognized that the statute providing the authority for OTA agreements describes those agreements as different from FAR-based "procurement" contracts. It also acknowledged that its protest jurisdiction provided by a separate statute – the Tucker Act – extends only to matters in connection with a "procurement." But, as it pointed out, those references to "procurement" under the two statutes carry different definitions. The statute providing for the court's jurisdiction carries a much broader meaning than the OTA statute and does not limit the court to a review of challenges to FAR-based "procurements" alone. Instead, it vests the court with the jurisdiction to review challenges of any "procurements" for the "acquisition of property or services," including those for the production of modernized vehicles, irrespective of how the agency chooses to contract for those acquisitions (i.e., through an OTA or a FAR-based award).
The court explicitly rejected the notion that its holding would somehow contravene the CoFC's conclusion in one prior case (SpaceX), in which the CoFC found that no such jurisdiction existed for the court's review of protests against OTA solicitations for prototype development. As it explained, the acquisition of prototypes that it discussed previously did not attempt to procure or purchase or own any goods or services, instead focusing on investing in industry development – which was much different from the present case – and had to be viewed as such.
Standing: The court's decision indicates that even though an OTA solicitation is not FAR-based if the government decides to incorporate FAR-based provisions into an OTA solicitation – those FAR-based terms will dictate an offeror's standing in the same way that they would in a FAR-based procurement.
In IRTC's specific case, for example, the agency's OTA solicitation incorporated the FAR 52.204-7, System for Award Management, provision that has been a part of several recent protests because of various offerors' disregard for its requirement for offerors to "be registered in SAM when submitting an offer or quotation, and [to] continue to be registered until time of award . . . ."1 In prior cases, the court held that failure to comply with any aspect of SAM registration rendered offerors ineligible for award. In this case, the protester IRTC also overlooked its obligation to keep its SAM registration current through award. IRTC, however, argued that because the OTA solicitation was not a FAR-based procurement, the incorporated FAR 52.204-7 clause should not affect its standing for an OTA award – particularly because the issue arose during the agency's corrective action of an earlier protest. The court rejected that position. Relying on the fact that the OTA solicitation explicitly and unequivocally incorporated that FAR 52.204-7 provision, which stated that a SAM registration lapse was an incurable error, the court concluded that IRTC's registration lapse rendered its proposal ineligible for award and, therefore, IRTC lacked the standing necessary to bring the protest.
Final Thoughts.
While this decision is limited to a pre-award challenge, given the increasing use of OTAs, it is suspected that the court is likely to be called upon to consider an OTA post-award challenge on a similar basis in the relatively near future. It is worth noting, however, that though this decision is likely to be viewed as persuasive, a decision by a CoFC judge, in any particular case, is not binding precedent on other CoFC judges/cases. The question of how other fora, such as the Government Accountability Office (GAO), may view their own jurisdiction in certain OTA cases also remains open. But what is certain is that companies interested in OTA work will now at least have some room for challenging the government's process in making these awards.
Footnote
1. FAR 52.204-7(b)(1).
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