DOT 4600.17A

1. PURPOSE. This Appendix provides departmental guidance for implementing Sections 3015, 5102 and 5111 of the Transportation Equity Act for the Twenty-First Century (TEA-21) related to the use of other transactions. Other transactions are financial assistance or alternative procurement instruments specifically authorized by Congress that are not contracts, grants or cooperative agreements.They are designed to allow government and educational entities, non-profit organizations and private industry to freely transfer funds, materials and technical assistance among themselves for the mutual benefit of all participants. Programs with other transaction authority are not required to use most financial assistance provisions or Federal Acquisition Regulation clauses, but are free to negotiate provisions that are mutually acceptable to all affected parties.

2. BACKGROUND. Section 251 of Public Law 101-189 gave the Defense Advanced Research Projects Agency (DARPA) the first other transaction authority in 1989.  This allowed DARPA to contract for research and development, unconstrained by most of the regulations governing contracts, grants and cooperative agreements.  The research and development authority was expanded to all Defense departments in 1992.  Congress subsequently expanded DARPA’s authority to include development and production of prototypes in 1997.  Section 226 of Public Law 104-264 gave the Federal Aviation Administration (FAA) authority to use other transactions, which has been utilized primarily for procurements.  Public Law 101-611 gave the National Aeronautics and Space Administration (NASA) unlimited authority to utilize other transactions. Section 308 of Public Law 104-50 gave DOT the authority to enter into grants, cooperative agreements, and other transactions with any entity in execution of the Technology Reinvention Project authorized under the Defense Conversion, Reinvestment and Transition Assistance Act of 1992 and related legislation. This authority has been repeated in every subsequent DOT appropriations act. There are two primary types of other transactions:  those used for research and those used for prototypes. Other transactions for research are used to support research projects and assistance-type efforts where the goal is to stimulate development and commercialization of new technology. Other transactions for prototypes are used to develop and procure prototypes of systems, which will be owned by the government for its direct use.  In addition, FAA uses other transactions for acquisition and construction of airport and related facilities which are funded and utilized by two or more separate entities. This distinction is necessitated by the different laws and procedures that applied to "procurement" and "grant" related type actions.
   TEA-21 authorized the Department's use of the assistance-type other transactions for support of consortia doing research in support of mass transportation (Section 3015) and general surface transportation research (Section 5102). Section 5111 authorized the use of "other agreements" to promote research, development and deployment of transportation technologies related to the Advanced Vehicle Technologies Program.  The term, "other agreement" is considered as an "other transaction" for Department program purposes.  Authority for the use of other transactions for these three programs are codified at 49 U.S.C. §5312(d), 23 U.S.C. §502, and 49 U.S.C. §5506, respectively.

3. REQUIRED ACTIONS.
   • The Assistant Secretary for Administration shall issue additional guidance for implementing Sections 3015, 5102 and 5111 of TEA-21, and other authorities to enter into other transactions as applicable, only in those instances where prescribed requirements need further clarification.

   • Each OA and SO with other transaction authority shall:
     1. Develop program-specific guidance to ensure adequate management of other transactions, including:
        • Documenting the justification for selection of an “other transaction” agreement.

        • Preparing a justification, whenever competition is not the basis for selection of the award.  In this case, competition does not require a formal selection process, but some type of competitive procedure must be used.

        • Including provisions in the other transaction agreement which provide for sufficient government program oversight to ensure proper expenditure of public funds.

        • Consulting legal counsel. The use of an other transaction does not automatically eliminate the applicability of all procurement or financial assistance laws and regulations.  (For example, 49 CFR part 29, Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace Grants) may still apply to assistance type other transactions.)

     2. Designate an agreements officer who has authority to approve other transaction agreements, and act as the focal point for amendments or modifications to the agreements. Ensure that the person who executes such agreements has authority to obligate funds on behalf of the government.

     3. Report obligations made through these agreements to the Grant Information System and coded as an Aother” type of instrument. (See Appendix H.)