Injecting New Ideas & New Approaches in Defense Systems: Are "Other Transactions" an Answer?

Abstract

Other Transactions (OT) Authority permits a form of contracting for research, development and for conducting prototype projects (and their production and deployment follow-ons) that is an alternative to military contracting under the Defense Acquisition Regulations and related statutes and regulations. This research shows that OT contracting can often produce better results, faster and at lower cost than contracting under FAR. Moreover, OT contracting has proven to be attractive to commercial firms that traditionally have spurned DoD R&D business. Thus, it has the potential to greatly expand the industrial base available to DoD. OT contracting has been limited by a number of factors: DoD acquisition personnel are generally poorly equipped to engage in freeform OT contracting; OTs have also been restricted by a broad misperception of their potential and risks involved; and there has been a tendency to restrict OTs to a niche role and to impose restrictions by regulation and statute. DoD could benefit greatly by expanding its use of OTs and recognizing them as a significant alternative to traditional contracting.