Other Transaction Authority (OTA)
US federal procurement mechanism for prototypes that bypasses standard acquisition rules; used for Golden Dome and LASSO.
Last refreshed: 10 May 2026
Timeline for Other Transaction Authority (OTA)
Anduril names Sandia on Golden Dome team
Drones: Industry & Defence- What is Other Transaction Authority in US defence procurement?
- Other Transaction Authority (OTA) is a legal authority allowing certain US agencies to contract for prototypes and research outside standard Federal Acquisition Regulations. It enables faster, more flexible procurement and allows federal labs to participate as teaming partners without competitive-bid requirements that FAR would impose.
- Why does the US military use OTA instead of normal contracts?
- OTA bypasses the lengthy Federal Acquisition Regulations process, allowing faster contract awards and more flexible teaming arrangements. For cutting-edge weapons systems, speed matters more than the cost protections FAR provides. It was used for both the $3.2B Golden Dome SBI pool and the $1.2B LASSO award in 2026.Source: DefenseScoop / SpaceNews
- What is the controversy around OTA contracts in Congress?
- Congressional oversight committees argue that OTA's broad use shifts spending outside normal appropriations accountability, bypassing the competitive-bid protections and cost audits that FAR provides. Hearings on OTA reform are expected in the FY2027 budget cycle.
- How much has the Pentagon awarded via OTA in 2026?
- In the first half of 2026, two major OTA awards alone totalled $4.4 billion: a $3.2 billion Space Force pool for Golden Dome Space-Based Interceptors (April 2026) and a $1.2 billion Army LASSO award for AeroVironment's Switchblade 400 (May 2026).Source: SpaceNews / DefenseScoop
Background
Other Transaction Authority (OTA) is a legal authority granted to specific US federal agencies that allows them to enter into contracts for research, development, and prototype projects outside the standard Federal Acquisition Regulations (FAR). OTA was introduced in the 1950s for NASA and has been expanded progressively, most significantly in the 2016 and 2017 National Defense Authorization Acts, which broadened its use to production follow-ons for programmes that demonstrated prototype success.
OTA has become the dominant procurement vehicle for the new generation of US defence-technology contracts, used in programmes where speed and flexibility matter more than the audit protections that FAR provides. In April and May 2026, OTA featured in two major drone-industry programmes: the $3.2 billion Space Force pool for the Golden Dome Space-Based Interceptor (awarded to twelve companies) and the $1.2 billion LASSO award for AeroVironment's Switchblade 400 .
The mechanism's most structurally significant aspect is that it allows federal laboratories like Sandia National Laboratories to participate as teaming partners without triggering the FFRDC competition rules that would normally require competitive bids for lab involvement. This legal feature is what makes the Anduril-Sandia configuration legally possible, not just commercially desirable. Congressional oversight committees have raised concerns that OTA's broad use shifts spending outside normal appropriations accountability, and hearings on OTA reform are expected in the FY2027 budget cycle.