There is increasing emphasis on the Department of War’s (DoW’s) use of Other Transaction (OT) agreements to obtain commercial solutions to provide better capabilities faster. Executive Orders and related DoW directives call for OTs to be more widely used and to better reach commercial solution providers, regardless of project type or entity status. But existing statutory OT authorities contain requirements for research and development (R&D) (10 U.S.C. § 4021), and/or prototyping projects (10 U.S.C. § 4022), amongst other conditions.
One option to address this issue would be for Congress to expand DoW’s OT statutory authority to support the DoW’s full utilization of OTs in its commercial pivot. To that end, any expanded authority could allow DoW to competitively award OTs for purely commercial transactions, without R&D, prototyping, or other conditions. In addition, DoW’s agency rules on the permissible uses of OTs under 10 U.S.C. §§ 4021 and 4022 should be rescinded. The existing rules in 32 Code of Federal Regulations (CFR) Part 3 are more restrictive than the authority provided for in the statutes. They may thus create unnecessary protest risk without significantly contributing to the effective uses of OTs. Therefore, any direction on the use of OTs, beyond what is in the statutes, should be limited to guidance such as the DoW OT Guide.