Other Transaction(OT)
A flexible agreement that is not a contract, grant, or cooperative agreement — used by DoD and other agencies to access commercial innovation with fewer procurement regulations.
Overview
An Other Transaction (OT) is a legally binding agreement that is specifically exempt from most federal procurement laws and the FAR. DoD and other agencies use OTs to prototype technologies, conduct research, and engage with commercial firms that might otherwise avoid government work. OTs offer flexibility in terms, IP, and payment structures.
Why It Matters in GovCon
OTs have become a major pathway for non-traditional contractors — especially tech firms — to do business with DoD. They offer streamlined procedures, flexible IP arrangements, and access to projects that might not fit traditional contracting. Understanding OT authority and limits helps contractors evaluate whether to pursue OT opportunities.
Key Details
- Statutory Basis: 10 U.S.C. 2371 (research), 2371b (prototype), 2373 (production follow-on).
- Exempt from FAR: OTs are not procurement contracts; many FAR provisions do not apply.
- Types: Research OTs, prototype OTs, production OTs (with limitations).
- Consortia: Often awarded through consortia (e.g., consortium managers facilitate member awards).
Related Terms
- Other Transaction Authority (OTA)
- Prototype
- Research and Development
- Non-Traditional Contractor
More Contracts Terms
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