"OTHER TRANSACTION"

Description of Instruments

"Other transaction" is a shorthand expression used to refer to any instrument other than a procurement contract, grant, or cooperative agreement. Accordingly, the term includes multiple instrument types that can be very different from each other.

The term "other transaction" gained currency following the 1989 enactment of section 2371 of title 10, United States code, which authorizes the use of instruments other than contracts, grants, and cooperative agreements for carrying out research projects. The authority's primary purpose is to help broaden DoD's technology and industrial base by allowing development and use of instruments that reduce barriers to participation in defense research by commercial firms that traditionally have not done business with the Government. The 10 U.S.C. 2371 authority can be used for this purpose because "other transactions" are not subject to statutes or regulations whose applicability is limited to contracts, grants, and/or cooperative agreements. The Defense Grant and Agreement Regulatory System (DGARS) governs any awards that may be made for assistance or other non-acquisition purposes using this authority.

Congress subsequently provided additional authority to use transactions other than contracts, grants, and cooperative agreements for certain acquisitions. Section 845 of the National Defense Authorization Act for Fiscal Year 1994 augmented the 10 U.S.C. 2371 authority, authorizing the Defense Advanced Research Projects Agency to use "other transactions" for prototype projects directly relevant to weapon systems proposed to be acquired or developed by DoD. Section 804 of the National Defense Authorization Act of 1997 (PL 104-201) broadened the authority to include the Military Departments and other designated officials and extended it to September 30, 1999.

Because this use of "other transactions" is for acquisition purposes, these "section 845 other transactions," also known as "other transactions for prototypes," are subject to guidance issued by the Director of Defense Procurement and are not subject to the DGARS. This Web site therefore does not address these instruments. See http://www.deskbook.osd.mil for information about them.

Applicable Guidance

"Other Transactions" that are Technology Investment Agreements. "Technology Investment Agreements," or TIAs, are described in the "Technology Investment Agreement (TIA)" attached to this Web site, with links to the pertinent guidance.

"Other Transactions" that are not Technology Investment Agreements. Except for those that are TIAs, "other transactions" currently are defined only by virtue of what they are not-contracts, grants, or cooperative agreements. But the guidance that applies to a particular "other transaction" depends upon what type of instrument it is. Therefore, one cannot state definitively what does or does not apply to all "other transactions"; the applicable guidance must be identified on a case-by-case basis. For example, if an "other transaction" is used to provide assistance, it is subject to national policy requirements in statutes and Government-wide rules that apply whenever a Federal agency provides assistance (as opposed to statutes and rules that apply specifically to grants and cooperative agreements only).

While one cannot definitively identify all of the requirements that apply to all "other transactions," the following information may be helpful:

• A statute authorizing use of "other transactions" may set forth requirements to be met when exercising that authority).
  
  
• In addition to requirements in the authorizing statute (10 U.S.C. 2371 or other statutory authority), there may be applicable requirements in the interim guidance issued by the Director of Defense Research and Engineering on February 8, 1994, as two attachments to a memorandum entitled "Grants, Cooperative Agreements and Other Transactions." Most of the guidance contained in the two attachments to that memorandum was superseded on April 13, 1998, when the DoD Grant and Agreement Regulations were formally issued. However, portions of it remain in effect for "other transactions" that are not TIAs, as shown in the table below. The table below also indicates that there may be applicable requirements in the new DoD Grant and Agreement Regulations (DoDGARs) that superseded the interim guidance contained in Attachment 2 to the 1994 memorandum.