THE UNDER SECRETARY OF DEFENSE3010 DEFENSE PENTAGONWASHINGTON, DC 20301-3010ACQUISITION,TECHNOLOGY AND LOGISTICS21 Dec 2000MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTSDIRECTORS OF DEFENSE AGENCIESSUBJECT: Other Transaction Authority (OTA) for Prototype ProjectsReference: DoD Directive 5134.1, Under Secretary of Defense for Acquisition and Technology (USD(A&T), September 17, 1999This directive-type memorandum assigns responsibilities and prescribes procedures for implementation and use of OTA for certain prototype projects directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department of Defense. For DoD, other transactions is a term commonly used to refer to the 10 U.S.C. 2371 authority to enter into transactions other than contracts, grants or cooperative agreements. OTA provides tremendous flexibility since instruments for prototype projects, awarded pursuant to this authority, generally are not subject to federal laws and regulations limited in applicability to procurement contracts.It is DoD policy, under the above reference, to establish policies and programs that improve, streamline and strengthen DoD Component technology access and development programs, encourage open-market competition and technology-driven prototype efforts that offer increased military capabilities at lower total ownership costs and faster fielding times, and exploit the cost-reduction potential of accessing innovative or commercially developed technologies. OTA for prototype projects is a vital tool that will help the Department achieve these objectives. This authority should be used wisely, when it is appropriate. Agreements Officers and Project Managers are encouraged to pursue competitively awarded prototype projects that can be adequately defined to establish a fixed-price type of agreement and attract nontraditional defense contractors participating to a significant extent.8845Agreements Officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound. The OT Guide (attached) is intended to provide a framework for the government team to consider and apply, as appropriate, when using OTA for prototype projects. However, there are some mandatory requirements included in the Guide that are evident by the prescriptive language used.The Director, Defense Procurement shall monitor compliance with this memorandum and update the OT Guide, as needed. The Secretaries of the Military Departments and the Directors of the Defense Agencies shall establish agency procedures necessary to implement the OT Guide. Any delegation of authority to use this OTA will be to officials whose level of responsibility, business acumen, and judgment enable them to operate in this relatively unstructured environment. The guide must be considered for solicitations issued after January 5, 2001. The new reporting requirements are applicable to any prototype projects awarded after 1 October 2000. /signed/J. S. GanslerAttachmentAs statedOT Guide, January 2001OTHER TRANSACTIONS (OT)GUIDEFOR PROTOTYPE PROJECTSUNDER SECRETARY OF DEFENSEFORACQUISITION, TECHNOLOGY AND LOGISTICS8845THE UNDER SECRETARY OF DEFENSE3010 DEFENSE PENTAGONWASHINGTON, DC 20301-3010ACQUISITION, TECHNOLOGY AND LOGISTICS21 Dec 2000FOREWORDThis Guide provides a framework that should be considered and applied, as appropriate, when using other transaction authority for prototype projects directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department. There are some mandatory requirements included in the Guide that are evident by the prescriptive language used.This Guide supercedes the following memorandums:1) USD(AT&L) memorandum , 10 U.S.C. 2371, Section 845, Authority to Carry Out Certain Prototype projects, December 14, 1996.2) USD(AT&L)/DDP memorandum, Assignment of Instrument Identification Numbers and Collection of Common Data Elements for Section 845 Other Transactions (Report Control Symbol DD-A&T(AR)2037), October 16, 1997.3) USD(AT&L)/DDP memorandum, Financial and Cost Aspects of Other Transactions for Prototype Projects, October 23, 1998.4) USD(AT&L)/DDP memorandum, Comptroller General Access on Certain Other Transaction Agreements for Prototype Projects, June 7, 2000.5) USD(AT&L) memorandum, Section 803 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 - Other Transaction Authority for Prototype Projects, December 6, 2000.Send recommended changes to the Guide through your agencys POC to:Director, Defense Procurement3060 Defense PentagonWashington, DC 20301-3060/signed/J. S. Gansler288