Other Transaction Agreements
An other transaction (OT) is a special vehicle used by federal agencies for obtaining or advancing research and development (R&D) or prototypes. An OT is not a contract, grant, or cooperative agreement, and there is no statutory or regulatory definition of "other transaction." Only those agencies that have been provided OT authority may engage in other transactions.
OT authority originated with the National Aeronautics and Space Administration (NASA) when the National Aeronautics and Space Act of 1958 was enacted. Subsequently, seven other specific agencies have been given OT authority: the Department of Defense (DOD), Federal Aviation Administration (FAA), Department of Transportation (DOT), Department of Homeland Security (DHS), Transportation Security Administration, Department of Health and Human Services, and Department of Energy. Other federal agencies may use OT authority under certain circumstances and if authorized by the Direction of the Office of Management and Budget (OMB).
Generally the reason for creating OT authority is that the government needs to obtain leading edge R&D (and prototypes) from commercial sources, but some companies (and other entities) are unwilling or unable to comply with the government's procurement regulations. The government's procurement regulations and certain procurement statutes do not apply to OTs, and accordingly, other transaction authority gives agencies the flexibility necessary to develop agreements tailored to a particular transaction. The Competition in Contracting Act (CICA), Contract Disputes Act, and Procurement Integrity Act are examples of three statutes that do not apply to OTs.
For more information on this topic, please view the documents below.
Other Transaction' Authority (OTA) for Prototype Projects
Defense Procurement and Acquisition Policy Website