Update on Other
Transactions (OTs)
for National Contract Management
Association, Cape Canaveral Chapter
Agenda
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LMI Overview
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OT Overview
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How OT’s Might Help You
LMI Overview
 Located in McLean, VA
 500+ professional staff
 70% with advanced degrees
 Areas of expertise
 Acquisition
 Financial management
 Logistics
 Information Technology
 Organizations and Human
Capital
 Facilities and Asset
Management
Distinguishing
Characteristics
 Not-for-profit consulting
organization
 Serves government
 Independent—avoids
conflict of interest
 Powerful blend of technical
and functional experts
 Repeatedly asked to handle
tough assignments
LMI Offers Diversity of Capability
Metrics and
Balanced
Scorecard
Survey
Work
Outsourcing
Information
Technology
Supporting All Aspects of Acquisition
3
Agenda
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LMI Overview
OT Overview
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Brief definition
Agency and Program Availability
Limitations
How OT’s Might Help You
Defining Other Transactions
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“Transactions other than procurement contracts,
grant and cooperative agreements”
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Two types have been generally defined and used
 Other Transactions for Research ( DoD’s TIA’s)
 Assistance instrument
 Other Transactions for Prototypes
 Acquisition instrument
OTs Exempt from Laws/Regulations
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Generally not subject to federal laws and regulations
governing procurement contracts, grants and
cooperative agreements
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Specifically, acquisition OTs do not have to comply with
the FAR, its supplements, or laws that apply to
procurement contracts
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Allows for flexibility in accounting practices and
auditing procedures
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Can result in commercially friendly intellectual
property provisions
Value of OTA Varies Over Time
High
value
Progression of Program
Phase I
Agency and Program Availability
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Existing: DoD, FAA, FHWA
New: DHS and Bio-Chemical Defense
Programs regardless of agencies, i.e. HHS
and NIH
New Authorities tied to DoD’s limitations
DHS’s Scope (when the authority can be
used) is explicitly broader.
DHS OT Authority
(a) Authority.--During the 5-year period following the effective date of
this Act, the Secretary may carry out a pilot program under which
the Secretary may exercise the following authorities:
(1) In general.--When the Secretary carries out basic,
applied, and advanced research and development projects,
including the expenditure of funds for such projects, the
Secretary may exercise the same authority (subject to the same
limitations and conditions) with respect to such research and
projects as the Secretary of Defense may exercise under section
2371 of title 10, United States Code (except for subsections (b)
and (f)), after making a determination that the use of contract,
grant, or cooperative agreement for such project is not feasible or
appropriate.
Section 1441 of the 2004 Defense
Authorization
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Civilian Agencies may enter into transactions (other than
contracts, cooperative agreements, and grants) to carry out
basic, applied and advanced research, and development projects,
and prototype projects that are otherwise authorized and necessary
to the responsibilities of the agency, and have the potential to
facilitate defense against, or recovery from, terrorism or nuclear,
biological, chemical, or radiological, attack.
This authority is similar to that exercised by the Secretary of Defense
under section 2317 of title 10, United States Code, with certain
exceptions, as well as section 845 of the National Defense
Authorization Act for Fiscal Year 1994 (Public Law 103-160; 10
U.S.C. 2371 note).
For prototype projects, in applying the requirements and conditions
of Section 845 of the National Defense Authorization Act for Fiscal
Year 1994, the Director of the Office of Management and Budget
shall perform the functions of the Secretary of Defense.
Other Transactions for PrototypesLimitations
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At least one nontraditional defense contractor participating to a
significant extent in the prototype project; or
If not, at least one of the following circumstances exists:
 At least 1/3 of the total cost of the prototype project is to be paid
by industry, or
 The senior procurement executive for the agency determines
that the use of the OT provides for innovative business
arrangements or structures that would not be feasible or
appropriate under a contract.
Example of “to a significant extent” are:
 Supplying new key technology or products that impact costs/
schedule/ performance
 Significant amounts of efforts
Other Transactions for Prototypes
Limitations - Non-traditional defense contractor
(business entity):
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Can be primes, subs, lower tier vendors, intracompany business units or teammates
Have not entered into or performed under:
 any contract that is subject to full coverage
under the cost accounting standards, or
 any other contract in excess of $500,000 to carry
out prototype projects or basic, applied, or
advanced research projects for a Federal
agency, that is subject to the Federal Acquisition
Regulation.
Other Transactions for Prototypes
Limitations
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Full cost accounting standards (CAS)
coverage is:
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Total contracts (other than awarded under
adequate price competition) over $50M or $7.5 M
individual contract.
Modified CAS applies if contractor has Cost
Reimbursement contract. This means
Unallowable costs must be reduced from costs.
Agenda

LMI Overview

OT Overview
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How OT’s Might Help You
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Benefits
Overall Benefits of OT Authority
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Management flexibility
Take advantage of commercial technology
Supply chain relationships
Long-term strategic relationships with key suppliers
Payment methods focused on technical
accomplishments
Permit use of contractor’s IR&D as investment funds
(cost share)
Flexibility in intellectual property coverage
Flexibility in socio-economic provisions
Exploit Technology Trends
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Advanced technologies represent a “multiplier” for
Government Agencies
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Commercial technology funding far outpaces
government’s
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Reduced cycle times and costs
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Government is looking at mature technologies to get
away from specifying requirements and capabilities
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New contractual vehicles offered to commercial
companies as attractions for doing business
Use of Contractor Funds
OT authority allows Government
contractors to use their IR&D funds, to use
the funds set aside for investments in new
technology, to expand their technology
alternatives or concepts in early phases of a
program
How OT’s Might Help You
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LMI developing and will offer in the
near future, hands on, practical
application training for OT
practitioners