Other Transactions (OT) Guide

OT Authority History

The National Aeronautics and Space Administration (NASA) pioneered the first use of OTs following the enactment of the National Aeronautics and Space Act of 1958 (Pub. L. 85-568) (See Myth 2). Since then, the term has generally been used to refer to the statutory authorities that permit a Federal agency to enter into transactionsThe entire process of interactions related to, entering into an agreement, executing and transitioning a prototype project. other than contracts, grants, or cooperative agreements. In 1989, Congress codified 10 USC §2371, providing the Defense Advanced Research Projects Agency (DARPA), and later others within DoD the authority to enter into Research OTs. Section 2371 was later amended by section 845 of the National Defense Authorization Act (NDAA) for FY 1994 to expand the original OT authority and to allow DARPA, and later others within DoD, to carry out “OTs for prototype projects.” In 2015, this OT for Prototype authority was made permanent and codified at 10 U.S.C. §2371b.

OT Authority – Legislative History

Year Congressional Authorization
1958 OTA authority originates with the passage of the National Aeronautics and Space Act
1989 Section 251 of the FY90 NDAA codifies the OTA authority for Defense Advanced Research Project Agency (DARPA) in 10 U.S.C. 2371 for “advanced research projects” only
1993 Section 845 of the FY94 NDAA expands DARPA’s authority to include prototype development on a temporary basis with a three year sunset provision
1996 Section 804 of the FY97 NDAA authorizes OTAs for the military services and designated officials and extends the authority for another three years
1997 Section 832 of the FY98 NDAA adds subsection (i) for protection of information from disclosure
1998 Section 241 of the FY99 NDAA extends the authority for another two years
1999 Section 801 of the FY00 NDAA adds Comptroller General Review
2000 Section 803 of the FY01 NDAA introduces the concepts for cost-sharing and non-traditional defense contractors
2001 Section 822 of the FY02 NDAA creates follow-on production authority restricted to a specific number of units at a specific target price
2003 Section 847 of the FY04 NDAA expands the definition of weapons system, authorizes pilot program for follow-on contracting for the production of commercial items, and extends the authority for an additional four years
2005 Section 823 of the FY06 NDAA adds dollar-value threshold review levels and applies the Procurement Integrity Act to OTs
2008 Section 824 of the FY08 NDAA expands the scope of the NDAA FY04 pilot program and extends the authority for an additional five years
2010 Section 826 of the FY11 NDAA includes all options in dollar-value threshold review levels
2012 Section 863 of the FY13 NDAA extends the authority for an additional five years
2014 Section 812 of the FY15 NDAA broadens scope and exempts small business from cost sharing requirement
2015 Section 815 of the FY16 NDAA permanently codifies OTs in 10 U.S.C. 2371b thereby rescinding the authority under Sec 845, redefines and codifies non-traditional defense contractors in 10 U.S.C. 2302(9), and expands follow-on production
2017 Section 863-864 of the FY18 NDAA adds education and training requirements, increases approval thresholds, includes language to clarify approval levels applied to OTs, includes express authority to allow for the award of Prototype OTs in the SBIR program and non-profit research institutions, and broadens the follow-on production language to include individual sub-awards under an OT consortium
2018 Section 211 of the FY19 NDAA removes USD(AT&L) as the highest level approver and replaces it with USD(A&S) or USD(R&E) and clarifies the application of follow-on production authority for projects carried out through consortia; Section 873 provisioned for the collection, storage, use, and reporting of OT usage data; the Joint Explanatory Statement accompanying the Department of Defense Appropriations Act, 2019 (Public Law 115-245), pages 153-154, established additional reporting requirements