OT FAQs

A legally binding contractual instrument that is not a procurement contract, grant, or cooperative agreement and not subject to all acquisition laws and regulations (e.g., Competition in Contracting Act, Truthful Cost and Pricing Data Act, Cost Accounting Standards, Contract Disputes Act, Contractual Indemnification, Bayh-Dole Act, Federal Acquisition Regulation (FAR), and FAR supplements like the Health and Human Services Acquisition Regulations and Defense Federal Acquisition Regulation Supplement). Primarily used for research & development projects, OTs enable the government to leverage commercial industry investments in science and technology and access state-of-the-art technology solutions. 

The OT Community is a virtual community established by ARPA-H in 2024. The OT Community is comprised of business and contracting professionals with OT-related backgrounds and expertise or those seeking to expand their knowledge of OTs. The OT Community exists to share OT information and resources, provide OT training, and assist entities and individuals to appropriately and effectively use OTs relative to the applicable authority. ARPA-H will manage the OT Community content by relying on community contributors internal and external to ARPA-H, including those supporting other government entities and industry. 

There is currently not a formal process to officially join the OT Community. ARPA-H manages the website and content, which is available to the public at no cost. To obtain OT information and resources or see what the OT Community has to offer, visit ARPA-H.gov and click on “Other Transaction Community” from the “Engage and Connect” menu. 

Many federal government departments and agencies have OT authority. The National Science Foundation (NSF), for example, was established in 1950 with authority to award other arrangements. Additionally, the National Aeronautics and Space Administration (NASA) was developed in 1958 with authority to award space act agreements. Other government entities have obtained OT authority in recent decades. The following government entities have some form of OT authority: NIH, Dept of Defense, FAA, Dept of Transportation, TSA, Dept of Homeland Security, Pipeline and Hazardous Materials Safety Administration, Dept of Energy, Domestic Nuclear Detection Office, Intelligence Advanced Research Projects Activity, Advanced Research Projects Agency for Energy, Advanced Research Project Agency for Health, Biomedical Advanced Research and Development Authority, CDC, and Administrative Office of the US Courts. 

Yes, OTs are intended to attract potential performers of all types and sizes to expand the respective industrial bases. OTs provide the government significant latitude to creatively collaborate with potential performers, including those that have never conducted business with the government. 

OTs provide government entities the ability to enter into flexible business arrangements with potential performers and adopt and incorporate business practices like those within commercial industry. The government has substantial discretion to creatively negotiate with proposers on terms and conditions that are appropriately tailored for each project and the interests of the parties involved. OTs provide industry more freedom to perform without the compliance and administrative processes or costs associated with traditional procurement contracts. When appropriately used, OTs can lower barriers to entry, streamline processes by eliminating cumbersome business requirements, allow for more agile and cost-effective project design and execution, and expand industrial bases. 

Each federal government department and entity has different processes for training and warranting personnel capable of awarding OTs. A common title for personnel capable of awarding, administering, modifying, and terminating OTs across the federal government is Agreements Officer (AO). It is common for entities to establish processes for selecting, warranting, and terminating AO appointments based on existing business processes or unique needs. Besides being an official government employee, personnel are usually required to complete OT-focused training and have demonstrated expertise with complex acquisition instruments.  

No, OT authority is not the same for all federal government entities. Government entities must ensure they have appropriate contracting authority to award OTs before doing so. Although many federal government entities have OT authorities, the authority can differ in many ways. For instance, the DoD has two separate OT authorities: one specific for research OTs and one specific for prototype and follow-on production OTs. ARPA-H has broad OT authority but requires program managers to obtain an approved written determination for each planned use of OT authority per project (regardless of dollar amount). NIH’s OT authorities are specific to initiatives and programs and are limited in OT use based on a percentage of annual appropriations available. The Dept of Homeland Security is required to complete a determination for each OT that a contract, grant, or cooperative agreement is not feasible or appropriate. 

Yes. All prime performers must register in SAM (the federal government’s web-based tool for federal award data) to have an active Unique Entity ID at time of proposal submission and maintain an active registration from project award through expiration. 

Yes. The Government is required to use the Federal Procurement Data System (the federal government’s authoritative source for procurement and OT award data within SAM) to report OT awards. This includes OT awards made directly to consortia and awards made directly to consortia members or participants.  

No, CICA does not apply to OTs. As a result, the formal competition structures covered by the law, like three competition tiers and the terms “full and open competition,” “sole source,” and “justification and approval” are not applicable. The various OT authorities are intended to allow government entities to uniquely determine and structure competitive procedures for OTs. Most of the OT authorities require the use of competitive procedures to the maximum extent practicable, thus allowing for flexible procedures commensurate with each government entity’s preferences, missions, and goals. Government entities should exercise sound business judgment and ensure all OTs processes are fair and transparent.  

OTs can be protested, but what can be protested and where protests must be filed is more complicated and less established than protests of traditional FAR-based government contracts. The procurement protest process per 48 Code of Federal Regulation 33.1 does not apply to OTs. The Government Accountability Office (GAO) has limited jurisdiction to review decisions and protests. In many protest cases (see our “Resources” page), GAO concluded it did not have general jurisdiction over OTs and would not review protests associated with the award or pre-award process for OTs. In general, GAO will review protests where government entities with OT authority improperly used OTs or failed to comply with the OT authority provided via statute. The Court of Federal Claims has jurisdiction to review OTs but only those in connection with procurement contracts. Government entities may establish a process for agency-level protests, and if created, the process should be included within OT solicitations. 

IP is a crucial part of OT planning and implementation and is of equal importance to both the government and other parties involved with OTs. When compared to other types of contracting and financial assistance instruments (e.g., procurements contracts, cooperative agreements, grants), all parties have greater flexibility to negotiate IP. The government team, in collaboration with the other parties, should use an outcome-focused strategy that will benefit all parties involved with the OT. 

No, formal market research and acquisition plans are not required for OTs because these terms and actions are required per the FAR, which does not apply to OTs. However, for each OT agreement, it is best practice for the government team to perform sufficient market intelligence by completing relevant research and outreach activities. Effective market intelligence activities, among other things, will allow teams to identify state-of-the-art solutions and capabilities for applicable technology areas, industry leaders or potential performers, and how to reach industry leaders or potential performers most effectively. Another best practice is for the government team to develop a business approach or strategy after performing market intelligence. This information will allow the government to support that the use of an OT for the project in question is appropriate relative to the authority being used. 

While there is no requirement for an OT agreement file for each OT, it is best practice for government entities with OT authority to sufficiently document critical project information, analysis, and actions during pre-award and post-award. There is not a standard or mandatory listing of key supporting documents for entities, so the types of documents and information to be housed in agreement files is per the discretion of the government entity’s policies or the Agreement Officer’s preferences. Examples of key supporting documents to include in an agreement file include needs statement defining requirements or capability gaps, market intelligence performed, business approach or strategy, cost estimates, price reasonableness determinations, support of OT solicitations, evaluations, and selections, intellectual property and data rights, milestones and evaluation criteria, approval authority documents (if required), and OT agreements and modifications. 

OT use is dependent on the specific OT authority in question and the individual government entity’s preference. Although OTs are primarily intended for R&D projects, there are instances where government entity’s can use OTs for other purposes like production, construction, business process or system enhancements, and operations or maintenance. The Dept of Defense, for example, can use OTs for research, prototyping, and production purposes. The NSF can use OTs for basic science research and programs and strengthen education programs for various purposes, including facility construction. The FAA can use OTs to carry out the functions of the Administrator or Administration. 

It depends. Generally, resource sharing is not required unless the specific OT authority in question requires resource sharing as a condition for OT use. For example, the DoD’s research OT authority (10 U.S.C. § 4021) requires that Government funds for an OT do not exceed the total amount funded by other parties to the maximum extent practicable. Additionally, although the DoD’s prototype OT authority (10 U.S.C. § 4022) has four possible conditions for use, one condition requires at that parties other than the federal government pay for one-third of the total cost of the prototype project. ARPA-H and several other entities with OT authority are not required to use resource sharing; however, depending on the specifics of each planned project and OT agreement, Agreements Officers have authority to structure agreements with resource sharing. The application of resource sharing in OTs is typically limited to projects where the performer may have commercial or other benefits as a result of the project with the government.