Other Transaction (OT) Authority

L. Elaine Halchin
Specialist in American National Government

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 leadingedge 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. The government’s procurement regulations and certain procurement statutes do not apply to OTs, and, accordingly, other transaction authority gives agencies the flexibility necessary to develop agreements tailored to a particular transaction. The Competition in Contracting Act (CICA), Contract Disputes Act, and Procurement Integrity Act are examples of three statues that do not apply to OTs.

Evaluating OTs and the use of OT authority is a challenging undertaking. Because the Federal Acquisition Regulation (FAR) and certain procurement statutes do not apply to OTs, the methods or mechanisms used to track contractor performance and results also do not apply. Additionally, the types of activities, functions, and outcomes associated with other transactions cannot be easily measured for the purpose of evaluation. It does not appear that anyone has yet devised a reliable method for conducting an evaluation that would yield quantifiable, objective data.

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 of Report: January 4, 2012
Number of Pages: 37
Order Number: RL34760
Price: $29.95

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