'Other Transactions' Are Government Contracts, And Why It Matters

Abstract

Some believe that agencies endowed with Other Transactions Authority (“OTA”) are free from the traditional rules of procurement contracting when forming Other Transactions. With the freedom of OTA, the theory goes, agencies can contract with the most innovative commercial firms, which might otherwise decline the boilerplate terms and compliance burdens associated with procurement contracting. This article is a reminder that the authority to create an Other Transaction is, at bottom, the authority to create a government contract. It first explains why Other Transactions qualify as contracts, and then begins exploring the implications of the contractual nature of Other Transactions. Any private party entering into an Other Transaction should be aware of the significance of contracting with the United States. OTA might clear away many burdensome procurement statutes and regulations, but principles of sovereign immunity and separation of powers, along with the pervasive precedents of the United States Court of Appeals for the Federal Circuit, will continue to ensure that doing business with the federal government, even by “Other Transaction,” is never quite the same as doing business in the commercial market.

Keywords: Government Contracts; Other Transactions; OTA; Federal Circuit

JEL Classification: H57, K12, K23, K21