July 9, 2025
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Dr. Jerry McGinn, Executive Director of the Baroni Center for Government Contracting at George Mason University &
One of the most striking points McGinn makes is the dramatic increase in the use of Other Transaction Authority (OTA) contracts. According to new research from the Baroni Center, OTA spending in the Department of Defense is up 220% since 2018. Agencies across government are also embracing similar models to push innovation forward. But while the numbers are promising, McGinn is quick to point out that measuring the actual impact of these efforts is a major challenge.
“Innovation is sort of in the eye of the beholder,” he says. The term is used so frequently that it risks becoming meaningless. He notes that while tools like OTAs, Commercial Solutions Openings, and Small Business Innovation Research (SBIR) programs are often treated as proxies for innovation, their outcomes remain largely anecdotal and hard to evaluate in concrete terms. “We don’t have good metrics to show what’s really working,” McGinn adds.
To get a clearer picture, the Baroni Center conducts a comprehensive survey of more than 400 companies in the federal contracting space. The results reveal what truly drives innovation from an industry perspective. The key incentives? Profit, ease of doing business with the government, and steady, long-term partnerships. Companies measure success not only by how many proposals they submit or contracts they win, but also by how efficiently they can navigate the federal acquisition process.
This is where McGinn sees both a problem and an opportunity. The government, especially the Department of Defense, says it wants to attract more non-traditional companies. But the definition of “non-traditional” currently covers over 90% of the industrial base, making it an ineffective benchmark. Legislative efforts like the FORGE Act aim to revise these definitions and provide a clearer path for true non-traditional players to participate.
Ultimately, McGinn believes the government must change how it buys if it truly wants to innovate. That includes modifying cost accounting standards, adjusting incentive structures to reward performance, and rethinking how solicitations are crafted to promote speed and scalability without sacrificing quality or accountability.
As the government continues to flex its market muscle, McGinn and his colleagues at the Baroni Center are watching closely. “The companies respond to the rules of the market,” he says. “If you change the incentives, you change the outcomes.”
You can read the full Government Contracting Trends and Performance Index here.