Authority to Award and Administer Other Transactions

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Richard L. Dunn –

 

One of the most basic issues related to DOD Other Transactions (OT’s) is who has signature authority with respect to OT’s. What personnel and organizations may award and administer OT’s?

    • Statutory Authority. “The Secretary of Defense and the Secretary of each military department may enter into transactions…The authority under this subsection is in addition to the authority provided in section 2358…” 10 U.S.C. 2371 (a). Additionally 10 U.S.C. 2371b (a) provides: “the Director of the Defense Advanced Research Projects Agency, the Secretary of a military department or any other official designated by the Secretary of Defense…may carry out prototype projects…” Finally, 10 U.S.C. 2373 says: “The Secretary of Defense and the Secretaries of the military departments may each buy…” As currently structured the Under Secretary AT&L has approval authority over certain high dollar value prototype projects 10 U.S.C. 2371b (a) (2). Cognizance over prototype OT’s is soon to be vested in the position of Under Secretary, Research & Engineering.  
    • The authority of the service secretaries may be delegated with respect to OT’s just as any other authority is delegated. It may be delegated to named individuals, to a class of personnel, or retained in the person the secretary.
    • Non-binding Guidance. The rather straight forward discussion of authority above is confused because of guidance issued with respect to both section 2371 and 2371b OT’s. The guidance is contained in 32 C.F.R. parts 21 and 37 (DOD Grants & Agreements Regulatory System) with respect to section 2371 and in “The DOD Guide for Other Transactions for Prototypes” (Jan. 2017) with respect to section 2371b.
    • The DODGARS does not actually mandate that a warranted contracting officer be appointed as an agreements officer with respect to Technology Investment Agreements (TIAs). More particularly TIAs, the only type OT instrument covered by the regulation, are merely a subset of the variety of OT’s that might be entered into under section 2371. TIAs are limited to assistance instruments and only certain assistance instruments that have characteristics described in the regulation. While many government agencies perform R&D by stimulating and supporting recipients (assistance) to carry out a statutory mandate to provide such support, virtually all of DOD’s R&D is mission oriented. Additionally it is more than merely buying goods and services. See generally Dunn, Appropriate Contractual Instruments for R&D, The Government Contractor (No. 59-25, 12 July 2017). For most section 2371 OT’s the service secretaries’ discretion with respect to delegating authority is unfettered by the provisions of the DODGARS.
    • DOD’s Guide for Prototype Projects states that it is just that guidance not regulation but it then uses mandatory language to state that only warranted contracting officers may exercise 2371b signature authority by acting as agreements officers (Guide sections C1.3.2 and D1.3). Contracting officers schooled in FAR-based contracting are typically not well equipped by virtue of training and experience to act as agreements officers. Additionally the Guide was issued by the director of procurement and acquisition policy (DPAP) an official that has no authority to mandate policy or limit the authority of service secretaries with respect to their statutory OT authority. DPAP has been delegated broad authority with respect to procurement by the USD (AT&L) pursuant to DODI 5000.35. There is no equivalent delegation of authority with respect to non-procurement agreements such as OT’s. See generally, Dunn, DOD Guide for Other Transactions for Prototypes – Fundamentally Flawed, The Government Contractor (No. 59-3, 25 January 2017).
Conclusion. Service Secretaries and defense agency officials expressly named in the OT statutes have unfettered discretion to delegate authority to award and administer OT’s to such personnel and organizations as seems necessary or appropriate in their judgment.

 

  1. Benjamin McMartin

    Mr. Dunn – Thank you for publishing your insight, and sharing your experience and knowledge in the area of Other Transactions. While I am commenting in response to this posting, I can tell you that the points you raise across all postings are of great interest to the community of professionals actively working in this arena. Thank you again, and I look forward to future posting/publications that you offer.

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