Why CSOs and OTAs Are Dominating Federal Acquisition in 2026
Commercial Solutions Openings (CSOs) and Other Transaction Agreements (OTAs) are dominating federal acquisition in 2026 because the FY2026 NDAA expanded CSO authority government-wide, the Department of War ordered a “commercial-first” acquisition posture, and OTA obligations have climbed past $18 billion a year. For contractors still building their pipeline around traditional FAR Part 15 solicitations, this is the year that strategy runs out of runway.
Quick Answer: CSOs and OTAs are growing because Congress and the Department of War have made non-FAR acquisition the default, not the exception. The FY2026 NDAA broadened CSO use beyond “innovative” solutions to general commercial acquisition, OTA obligations exceeded $18 billion in FY2024, and new thresholds effective June 30, 2026 remove certified cost/pricing requirements below $10 million. Contractors who aren’t positioned for these pathways are increasingly locked out of the fastest-growing part of the federal market.
What Are CSOs and OTAs, and What Changed in 2026?
Commercial Solutions Openings (CSOs) are solicitation frameworks under DFARS 212.70 that let agencies post a problem or capability need instead of a rigid specification. Vendors submit solutions on a rolling basis, and awards can result in either a FAR-based contract or an OTA. The FY2026 NDAA revised 10 U.S.C. Section 3458 to let the Department of War and military departments use CSOs to acquire products and services generally, not just “innovative” commercial solutions as the statute previously required. That single change turns CSOs from a niche innovation tool into a standard commercial acquisition pathway.
Other Transaction Agreements (OTAs), authorized under 10 U.S.C. Section 4021 and Section 4022, sit outside the FAR entirely. They let agencies, primarily the Department of War, contract with startups, universities, and other non-traditional performers without the compliance overhead of a standard FAR contract. OTAs can still incorporate FAR or DFARS clauses by choice, but they aren’t bound by them.
Here’s what’s different in 2026: OTAs are no longer a side door for prototype R&D. DoD obligations through OTAs grew from $1.8 billion in FY2016 to more than $18 billion in FY2024, and MITRE’s March 2026 analysis is now recommending Congress expand OTA authority to cover purely commercial transactions, removing the existing R&D and prototyping conditions entirely. If that recommendation moves, OTAs stop being a specialized vehicle and become a mainstream one.
When I was managing source selections at HHS, a non-FAR pathway was something you reached for occasionally, on a program with real technical uncertainty. What agencies are signaling in 2026 is a structural shift: commercial-first is now the stated default, and FAR Part 15 is becoming the exception that requires justification, not the other way around.
Why CSOs and OTAs Are Accelerating This Year
The commercial-first mandate is now policy, not preference. Executive Order 14275 (Restoring Common Sense to Federal Procurement) launched the Revolutionary FAR Overhaul, which is eliminating or revising more than 500 FAR provisions and directing contracting officers toward commercial-first approaches. Department of War leadership has separately ordered agencies to prioritize CSOs and OTAs over traditional FAR pathways wherever possible.
Golden Dome made OTAs the blueprint, not the exception. The Golden Dome Acquisition Model, a $23 billion FY2026 program with a lifetime value projected as high as $3.6 trillion, is built explicitly around OTAs, CSOs, modular design, and rapid prototyping. Agencies are studying Golden Dome as the template for how large-scale defense acquisition should work going forward.
Thresholds are removing the FAR-based cost barrier. Effective June 30, 2026, the certified cost or pricing data threshold rises from $2.5 million to $10 million, and the Cost Accounting Standards full-coverage trigger rises from $2.5 million to $35 million per contract. Combined with a Simplified Acquisition Threshold of $350,000, a large share of mid-market work no longer requires the compliance infrastructure that used to make FAR contracts the safer bet.
OTAs carry a protest-avoidance advantage agencies value. GAO received 1,688 new bid protests in FY2025, continuing a decade-long decline, but agencies still cite documentation and evaluation risk as a persistent vulnerability in FAR-based source selections. OTA awards are generally not protestable at GAO, which is part of why contracting officers are steering more requirements toward them. The new FY2026 NDAA also lets DoD contracting officers withhold up to 5% of payments from incumbent contractors with pending, weak-basis protests, a real financial disincentive to protesting that didn’t exist before.
CSO vs. OTA vs. Traditional FAR Contracts
Commercial Solutions Opening (DFARS 212.70): Problem-based, rolling solicitation. Can result in a FAR contract or an OTA. Now usable for general commercial acquisition under the FY2026 NDAA, not just “innovative” solutions. Best fit when you have a strong commercial offering and want to avoid a rigid, spec-driven RFP.
Other Transaction Agreement (10 U.S.C. Section 4022): Largely exempt from the FAR. Best fit for prototype, R&D, or (increasingly) production work with the Department of War, especially through a consortium. Fastest path to award, highest flexibility, but fewer standard contract protections around IP, disputes, and liability unless you negotiate them in.
Traditional FAR Contract (FAR Part 12/13/15): Fully compliant with FAR, maximum standard protections, and the most predictable dispute and protest framework. Still the right structure for long-term, high-dollar programs with a mature acquisition strategy and defined requirements, but increasingly the slower and more document-heavy option relative to CSO and OTA pathways.
What This Means for Your Pipeline in 2026
Get OTA-eligible now, not when you need it. Most OTA opportunities flow through consortiums (like the National Security Innovation Network, DIU, or service-specific OTA consortia). Consortium membership takes time to establish. If you’re not in the room before the solicitation drops, you’re not competing for it.
Restructure your pricing for the new thresholds. With certified cost/pricing data no longer required below $10 million as of June 30, 2026, proposals in that range can move to simplified pricing structures. If your pricing team is still building certified-data packages for sub-$10 million bids, you’re adding cost and time your competitors have already cut.
Build a CSO-ready commercial pitch. CSOs reward a clear, problem-centric narrative over a compliance matrix response. If your proposal team’s only muscle is FAR Section L/M compliance writing, you need a second track built for rolling, capability-based submissions.
Negotiate protections you’d otherwise get for free. Because OTAs sit outside the FAR, IP rights, liability, and dispute resolution terms are all negotiated, not defaulted. Don’t sign an OTA using a FAR contract mindset. Get these terms addressed before award, not after a dispute.
CIG’s Capture & Growth Strategy and Pricing services are built around exactly this kind of pathway diversification, positioning firms for CSO, OTA, and FAR-based opportunities in parallel instead of betting on one lane.
Frequently Asked Questions
Can a small business compete for an OTA award? Yes. Non-traditional defense contractors, which generally includes most small businesses without a cost-accounting-standards-covered contract in the prior year, are a priority category under 10 U.S.C. Section 4022. Most OTA awards flow through consortiums, so joining the relevant consortium is typically the first step.
Is a Commercial Solutions Opening the same as an OTA? No. A CSO is a solicitation method under DFARS 212.70 that can result in either a FAR-based contract or an OTA award. An OTA is the contract type itself, authorized under 10 U.S.C. Section 4021 and Section 4022. A CSO is how you compete; an OTA is one possible outcome.
Do OTAs still require compliance with any federal regulations? Yes, just not most of the FAR. Statutory requirements like the Buy American Act considerations, security requirements, and specific clauses the agency chooses to incorporate can still apply. OTAs are exempt from most FAR procedural requirements, not from all federal law.
Why are agencies moving away from traditional FAR Part 15 contracts? Speed, evaluation flexibility, and reduced protest exposure. The Revolutionary FAR Overhaul under Executive Order 14275 is also removing over 500 FAR provisions and directing contracting officers toward commercial-first approaches, which structurally favors CSO and OTA pathways over document-heavy FAR Part 15 source selections.
If your business has never competed through a CSO or an OTA, and your capture team is still built entirely around FAR Section L/M compliance, that is the gap CIG closes. Book a free GovCon Growth Diagnostic and we’ll map which non-FAR pathways fit your capabilities and what it takes to get positioned before your competitors do.
Kara D. Ryles is the CEO of Contracting Intelligence Group LLC (CIG), a women- and minority-owned federal acquisition consulting firm based in Ashburn, Virginia. She is a FAC-C certified acquisition professional and former federal contracting officer with experience across DoD, HHS, and civilian agencies. CIG helps small and diverse-owned federal contractors win and manage government contracts across the full acquisition lifecycle.
Sources
DFARS 212.70, Commercial Solutions Openings: acquisition.gov/dfars/subpart-212.70
10 U.S.C. Section 4022, Other Transaction Authority for Prototype Projects: law.cornell.edu/uscode/text/10/4022
FAR Part 12, Acquisition of Commercial Products and Commercial Services: acquisition.gov/far/part-12
GAO-25-107546, Other Transaction Agreements: Improved Contracting Data Would Help DOD Assess Effectiveness: gao.gov/products/gao-25-107546
Nextgov/FCW, “NDAA: Massive expansion of commercial solutions openings,” January 2026: nextgov.com
Mayer Brown, “What US Federal Contractors Can Expect in 2026 and Beyond,” February 2026: mayerbrown.com
FedBiz Access, “How the 2026 NDAA Transforms Requirements for Government Contractors”: fedbizaccess.com
