This statute, titled “Authority of the Department of Defense to carry out certain prototype projects”, is the authority for prototype projects issued via Other Transactions. A pretty short read, this statute provides critical guidance related to the authority’s intent, approval levels, awardee eligibility, and follow-on activities.
Whether you are just being introduced to Other Transactions, or you are an expert in nontraditional acquisition, this is the link to regularly reference. In December of 2018, the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD(A&S)), issued a revamped guide for OTs that contains easy-to-understand language, abbreviated case studies, and a substantial list of other resources. Be sure to check out the Common OT Myths and Facts section!
See Paragraph (9) of the authority linked above. This statutory definition holds the key to some very specific eligibility requirements for OT awards. Although you can still receive an OT award if you are considered a traditional defense contractor, different requirements must be met. Take a quick look if you are unsure of your company’s status.
Not sure what type of effort can be considered a prototype project? Unclear about the prerequisites required for a prototype to scale up to full production? Here is the DoD’s official memorandum that solidifies the definition of prototype and clarifies appropriate use of follow-on production authorities.
In May of 2018, GAO sustained a protest alleging that the Government improperly followed OT authority as it relates to follow-on production. This case, a true wake-up call to some, was the genesis for more oversight being placed on prototype projects seeking to transition into production. It’s important to note that this decision did not change the pre-existing OT authorities, rather it was a strong reminder to use the authority properly.
Although slightly dated, this report from the Government Accountability Office provides some interesting historical information on OTs, as well as some valuable data points.