Number: RL34670
Title: Other Transaction (OT) Authority
Authors: L. Elaine Halchin
Abstract: 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 Director 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. Evidence of congressional interest in the use of other transaction authority includes the expansion of OT authority over the years (as noted above), and a 2008 congressional hearing on the Department of Homeland Security's use of OT authority.
Date: November 25, 2006