Pursuant to 10 U.S.C. 2371, Research Projects: Transactions Other than Contracts and Grants, DARPA may enter into Other Transactions (OTs). CMO awards Other Transactions for Prototypes and Technology Investment Agreements.
What is an OT for prototype?
An OT for Prototype is an acquisition instrument used for prototype projects directly relevant to weapons or weapons systems proposed to be acquired or developed by the DoD. OTs for Prototypes are often called 845 agreements, referring to Section 845 of Public Law 103-160 (as amended) that authorizes the use of OTs.
OTs are not subject to the FAR and DFARs; however, many agreements contain articles similar to common terms and conditions found in standard FAR procurement contracts, including articles for Intellectual Property, Foreign Access to Technology, and others. The OT Guide (January 2001) gives guidance on what should be included in an OT agreement.
Who is eligible to receive an OT for Prototype?
The authority for an OT for Prototype (845) can only be used when:
(A) There is at least one nontraditional defense contractor participating to a significant extend in the prototype project;
OR
(B) No nontraditional defense contractor is participating to a significant extent in the prototype project, but at least one of the following circumstances exists:
(i) At least one third of the total cost of the prototype project is to be paid out of funds provided by the parties to the transaction other than the federal government.
(ii) The senior procurement executive for the agency determines in writing that exceptional circumstances justify the use of a transaction that provides for innovative business arrangements or structures that would not be feasible or appropriate under a procurement contract.
Small Business Innovation Research Program proposers interested in pursuing OTs should see the SBIR OT page.
What should a proposal for an OT for Prototype include?
A proposal requesting an 845 Agreement should include all the information requested in the BAA, as well as:
• A detailed plan of measurable milestones, including payments associated with each milestone
• An explanation of cost share or how you meet the requirements as a non-traditional defense contractor
Nontraditional Defense Contractor
A nontraditional defense contractor is a company that has not, for a period of at least one year prior to the date of the OT agreement, entered into or performed on (1) any contract that is subject to full coverage under the cost accounting standards prescribed pursuant to Section 26 of the Office of Federal Procurement Policy Act (41 U.S.C. 422) and the regulations implementing such section; or (2) any other contract in excess of $500,000 to carry out prototype projects or to perform basic, applied, or advanced research projects for a Federal Agency that is subject to the Federal Acquisition Regulation.