FAR Based Strategies
Other Transactions (OT) are contractual instruments other than standard procurement contracts, grants, or cooperative agreements. OTs can include flexible business arrangements to acquire research and development activities to advance new technologies, and prototypes or models to evaluate technical or manufacturing feasibility or military utility of new or existing technology. This may apply to processes, concepts, end items, and systems from non-traditional defense contractors* (as well as from traditional defense contractors when statutory requirements for small business participation or cost sharing arrangements are satisfied) allowing the government access to cutting edge solutions.
OTs provide opportunities to structure agreements that may leverage commercial business practices and remove barriers to entry such as cost accounting system (CAS) compliance and intellectual property rights requirements, to encourage non-traditional defense contractors to do business with the government.
OTs typically use RDT&E funding, but the statute does not prohibit use of other appropriations. The nature of the activity and overall effort it will support should be considered when determining appropriate funding sources. OT agreements may be fixed-price, expenditure based, or hybrid.
Most laws and regulations governing federal contracts do not apply to OTs (i.e., Federal Acquisition Regulation (FAR) and the Competition in Contracting Act (CICA)), however, the Procurement Integrity Act applies and competitive practices are applicable. OTs may be protested to the U.S. Court of Federal Claims, and GAO has limited jurisdiction to review OT decisions.
*As defined in 10 U.S.C. §3014 a non-traditional defense contractor is an entity that is not currently performing and has not performed, for at least one-year period preceding the solicitation of sources for the other transaction, any contract or subcontract for the DoD that is subject to full coverage under the cost accounting standards (CAS).
The following are the types of Other Transactions available to the DoD:
- 10 U.S.C. §4021 Research OTs ***authority changed due to Title 10 Renumbering, effective Jan 2022***
- 10 U.S.C. §4022 Prototype OTs ***authority changed due to Title 10 Renumbering, effective Jan 2022***
- Authority for Use of Other Transactions for Prototype Projects Under 10 U.S.C. §2371b, USD(A&S), Nov 2018
- Definitions and Requirements for Other Transactions Under Title 10 U.S.C. §2371b, USD(A&S/R&E), Nov 2018
- Other Transactions Guide, USD(A&S), Dec 2018
- Other Transaction Agreements for Prototype Projects under 10 U.S.C. §2371b, Defense Pricing and Contracting
- Evaluating Price; Other Transactions (OTs), DCMA Commercial Item Pricing Group
- Pricing Other Transactions: Striking the Balance Between Speed and Price (video), DAU/DCMA, Jan 2021
- Continuous Learning Training Module, CLC 066 Other Transactions, DAU, Oct 2019
- Acquisition Innovation/OT Resources, DARPA, Jun 2019
- Defense Commercial Solutions Opening Pilot Program, DPAP, Jun 2018
- Other Transactions Simulation, DAU, Apr 2019
- Defense Innovation Unit: Pathways to Commercial Innovation and OTAs, DAU, Apr 2018
- Using Other Transactions – The Good, Bad, and the Uncertain, DAU, Apr 2018 (video)
- MITRE AiDA – Other Transactions