ࡱ>    U}Q@ Wbjbj TƟƟG/| | | | {{{~F_  pnlڃڃЇ`0$T       $R^ FT|ЇFF | | ڃd ڪڪڪF| ڃ ڪF ڪ,ڪV    0t{8P: / 0_ v/</ xl| | | | / 8h|ڪl0hhh  vĪv  "OTHER TRANSACTIONS" (OT) GUIDE FOR PROTOTYPE PROJECTS UNDER SECRETARY OF DEFENSE FOR ACQUISITION, TECHNOLOGY AND LOGISTICS FOREWORD This guide is authorized by DoD Instruction XXXX. Chapters 2 and 4 refer to requirements contained in DoD Instruction XXXX or 32 C.F.R. Chapter 3. The guide provides additional information on these requirements must be complied with when using "other transaction" authority for prototype projects. The remainder of the guide provides a framework that should be considered and applied, as appropriate, when using "other transaction" authority for prototype projects. This guide applies to the office of the Under Secretary of Defense for Acquisition, Technology & Logistics (USD(AT&L)), the Military Departments, and the Directors of Defense Agencies that have procurement authority for prototype projects directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department of Defense (hereafter referred to as the DoD Components). This guide is effective immediately and is mandatory for use by all the DoD Components. If you wish to recommend changes to the guide, please send them through your agency's point of contact to: Director, Defense Procurement and Acquisition Policy 3060 Defense Pentagon Washington, DC 20301-3060 TABLE OF CONTENTS Page FOREWORD TABLE OF CONTENTS TABLES INTRODUCTION CHAPTER 1 INTRODUCTORY INFORMATION C1.1. Definitions C1.2. Background C1.3. Individual Authority C1.4. Legislative Authority C1.5. Government Team Composition CHAPTER 2 STATUTE AND OVERACHING POLICY C2.2. Statutory Direction on the Use of Authority C2.2. Statutory Authority for Follow-on Production Contracts C2.3. Overaching Policy CHAPTER 3 ACQUISITION PLANNING C3.1. General C3.2. Market Research CHAPTER 4 APPROVALS & KEY DOCUMENTATION C4.1. Acquisition Strategy and OT Agreement C4.2. Senior Procurement Executive Determinations C4.3. Agreement Analysis C4.4. Report Submissions C4.5. Metrics CHAPTER 5 AGREEMENT EXECUTION C5.1. Agreement Number Coding C5.2. Recovery of Funds C5.3. Security Requirements C5.4. Consortia/Joint Ventures C5.5. Consideration of Protections Provided by Law C5.6. Agreement Funding C5.7. Protests C5.8. Flow Down C5.9. Price Reasonableness C5.10. Allowable Costs C5.11. Accounting Systems C5.12. Comptroller General Access C5.13. DoD Access to Records C5.14. Profit C5.15. Payments C5.16. Intellectual Property C5.17. Property C5.18. Changes C5.19. Disputes C5.20. Termination C5.21. Awardee Reporting C5.22. Administration C5.23. Agreement Close-Out CHAPTER 6 GOVERNMENT PROTOTYPE PROJECT REPORTING REQUIREMENTS C6.1. Reports Required for All Prototype Projects C6.2. Other Reporting Requirements, When Appropriate APPENDIXES AP1. Definitions AP2. Statutes Inapplicable to "Other Transactions" AP3. Cost-Sharing Other Considerations AP4. Protection of Certain Information From Disclosure AP5. Acquisition Strategy Considerations AP6. Accounting Systems AP7. Comptroller General Access AP8. DoD Access to Records AP9. Payment Considerations AP10. Intellectual Property Considerations AP11. Annual Report to Congress AP12. Instructions for DD Form 2759 Reporting TABLES C3.T1. Reports Required for all Prototype Other Transactions INTRODUCTION Other transactions (OTs) is the term commonly used to refer to the transactions other than contracts, grants or cooperative agreements, that are authorized by 10 U.S.C. 2371. The Department of Defense currently has temporary authority in 10 U.S.C. 2371 note to award OTs in certain circumstances for prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department. OTs for prototype projects are acquisition instruments that generally are not subject to the Federal laws and regulations governing procurement contracts. As such, they are not required to comply with the Federal Acquisition Regulation, its supplements, or laws that are limited in applicability to procurement contracts. Important Tool. This acquisition authority is, when used selectively, a vital tool that will help the Department achieve the civil and military integration that is critical to reducing the cost of Defense weapon systems. It is an important tool that should be used wisely. Restrictions on Use. In accordance with statute, this authority may be used only when: (1) At least one nontraditional Defense contractor is participating to a significant extent in the prototype project; or (2) 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 non-Federal parties to the transaction. (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. Encouraged Use. Agreements Officers and Project Managers are encouraged to pursue competitively awarded prototype projects that can be adequately defined to establish a fixed-price type of agreement and attract nontraditional Defense contractors participating to a significant extent. Using Business Judgment. Individuals using this authority should have a level of responsibility, business acumen, and judgment that enables them to operate in this relatively unstructured environment. They are responsible for negotiating agreements that appropriately reflect the risks undertaken by all parties to the agreement, incorporate good business sense and appropriate safeguards to protect the government's interest. C1. CHAPTER 1 INTRODUCTORY INFORMATION C1.1 DEFINITIONS The terms used in this guide are defined in Appendix 1. C1.2. BACKGROUND C1.2.1. General. 10 U.S.C. 2371 authorizes the award of transactions other than contracts, grants or cooperative agreements. Awards made pursuant to this authority are commonly referred to as "other transaction" (OT) agreements. "Other transaction" is a shorthand expression used to refer to any instrument other than a procurement contract, grant, or cooperative agreement. Accordingly, the term includes multiple instrument types that can be very different from each other. For purposes of this guide, we will break these multiple instruments into two types of OTs: (1) those for prototype projects and (2) those that are not covered by this guide. C1.2.2. OTs for Prototype Projects. This type of OT is authorized by Department of Defense (DoD) Authorization Acts with sunset provisions and is found in the U.S. Code as a Note in 10 U.S.C. 2371. Section 845 of Public Law 103-160, as amended, authorizes the use of OTs under the authority of 10 U.S.C. 2371, under certain circumstances for prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by the DoD. This type of OT is treated by the DoD as an acquisition instrument, commonly referred to as an OT for a prototype project or a section 845 OT. C1.2.3. OTs Not Covered by this Guide. This guide does not apply to OTs used to carry out basic, applied or advanced research projects in accordance with 10 U.S.C. 2371. For example, the authority of 10 U.S.C. 2371 currently is used to award technology investment agreements (TIAs) in instances where the principal purpose is stimulation or support of research. C1.3. INDIVIDUAL AUTHORITY C1.3.1. Agency Authority. Section 845 of Public Law 103-160, as amended (10 U.S.C. 2371 note), authorizes the Director of Defense Advanced Research Projects Agency (DARPA), the Secretaries of the Military Departments, and any other official designated by the Secretary of Defense to enter into OTs for certain prototype projects under the authority of 10 U.S.C. 2371. The Secretary of Defense has delegated authority and assigned responsibilities to the Undersecretary of Defense (Acquisition, Technology & Logistics), USD(AT&L). The USD(AT&L) has designated the Directors of the Defense Agencies as having the authority to use section 845 OTs. DoD Instruction XXX requires that any delegation to use this authority will be to officials whose level of responsibility, business acumen, and judgment enable them to operate in this relatively unstructured environment. C1.3.2. Agreements Officer Authority. Agreements Officers for prototype projects must be warranted Contracting Officers and may bind the government only to the extent of the authority delegated to them as Contracting Officers. C1.3.3. Administrative Agreements Officer Authority. Administrative Agreements Officers for prototype projects must be warranted Contracting Officers. Their authority is limited to the functions delegated to them by the Agreements Officer and the terms of the agreement. C1.3.4. Points of Contact. Points of contact (POC) referred to throughout this Guide or for information regarding prototype OTs can be found at the Director, Defense Procurement and Acquisition Policy and Acquisition Policy's (DPAP) Home Page at  HYPERLINK "http://www.acq.osd.mil/dp/dsps/ot/dspsot.htm" http://www.acq.osd.mil/dp/dsps/ot/dspsot.htm. C1.4. GOVERNMENT TEAM COMPOSITION C1.4.1. Composition. A small, dedicated team of experienced individuals works best. Subject matter experts such as general counsel and representatives of the payment, audit, logistics, technical, and administrative offices should participate early on, to advise on agreement terms and conditions. The OT approving official, as discussed in C4.1, also plays an important role. The roles of Defense Contract Management Agency (DCMA), Defense Finance & Accounting Services (DFAS) and Defense Contract Audit Agency (DCAA) should be decided up front. C1.4.2. DCMA. Selected DCMA field offices are designated to administer OTs. If administration is to be delegated to DCMA, refer to Section 10 of the DoD CAS Component directory to determine the appropriate administration location. The DCMA POCs can be found at http://www.DCMA.mil. Click on site index, CAS Component Directory, and Section 10. DCMA can provide assistance in determining the appropriate DFAS payment office. C1.4.3. DCAA. As discussed in various sections of this guide, DCAA is able to provide financial advisory services to support the Agreements Officer in awarding and administering these agreements. DCAA acts in an advisory capacity only and can provide assistance in the pre-award phase, during agreement performance, and at the completion of the agreement during the closeout phase. DCAA has assigned liaison auditors to selected DCMA field offices designated to administer OTs. C2. CHAPTER 2 STATUTE AND OVERARCHING POLICY C2.1. STATUTORY AND OTHER POLICY DIRECTION IN 32 CODE OF FEDERAL REGULATION, PART 3 C2.1.1. Appropriate Use. This authority may be used only when: (1) At least one nontraditional Defense contractor is participating to a significant extent in the prototype project (see Appendix 1 and C2.3.4); or (2) 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 non-Federal parties to the transaction. (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. C2.1.2. Limitations on Cost-Sharing. (a) When a nontraditional Defense contractor is not participating to a significant extent in the prototype project and cost-sharing is the reason for using OT authority, then the non-Federal amounts counted as provided, or to be provided, by the business units of an awardee or subawardee participating in the performance of the agreement may not include costs that were incurred before the date on which the OT agreement becomes effective. Costs that were incurred for a prototype project by the business units of an awardee or subawardee after the beginning of negotiations, but prior to the date the OT agreement becomes effective, may be counted as non-Federal amounts if and to the extent that the Agreements Officer determines in writing that (1) the awardee or subawardee incurred the costs in anticipation of entering into the OT agreement; and (2) it was appropriate for the awardee or subawardee to incur the costs before the OT agreement became effective in order to ensure the successful implementation of the OT agreement. (b) As a matter of policy, these limitations on cost-sharing apply any time cost-sharing may be recognized when using OT authority for prototype projects. Other policy considerations regarding cost-share are addressed at C2.3.5. and in Appendix 3. C2.1.3. Comptroller General Access. OTs for prototype projects that provide for total government payments in excess of $5,000,000 must include a clause that provides for Comptroller General access to records as specified in C5.12. and Appendix 7. C2.1.4. DoD Access to Records. Cost-type OT agreements that provide for total government payments in excess of $5,000,000 shall include appropriate access clauses and require the awardee to insert an appropriate audit access clause in subawards that provide for payments that exceed $5,000,000, unless a deviation has been approved. The details of this policy are provided at Appendix 8 C2.1.5. Authority for Follow-on Production Contracts. Make changes here, consistent with the proposed rule. Probably delete for now. C2.2. OTHER STATUTORY DIRECTION C2.2.1. Directly Relevant. Prototype projects must be directly relevant to weapons or weapon systems proposed to be acquired or developed by the DoD. C2.2.2. Competition. To the maximum extent practicable, competitive procedures shall be used when entering into agreements to carry out prototype projects under this authority (see competition considerations in Appendix 5). C2.2.3.. No Duplication. To the maximum extent practicable, no transaction entered into under this authority provides for research that duplicates research being conducted under existing programs carried out by the DoD. C2.2.4.. Annual Reporting. A report on the use of OT authority must be submitted to Congress each year as addressed in section C6.1.1. and Appendix 11. C2.2.5.. Permissive Language in 10 U.S.C. 2371. C2.2.5.1. Advance Payments. OT authority may be exercised without regard to section 31 U.S.C. 3324 regarding advance payments. However, generally the Government should avoid making advance payments (see payment considerations in Appendix 9). C2.2.5.2. Recovery of Funds. A transaction may include a clause that requires payments to any department or agency of the federal government as a condition for receiving support under an OT and provides for separate support accounts as addressed in C5.2 C2.2.6. Protected Information. As described in Appendix 4, participants may protect certain proposal information and should be so advised in the solicitation. C2.3. OVERACHING POLICY C2.3.1. Applicable laws. OTs for Prototype Projects generally are not subject to the Federal laws and regulations governing procurement contracts. As such, they are not required to comply with the Federal Acquisition Regulation (FAR), its supplements, or laws that are limited in applicability to procurement contracts, such as the Truth in Negotiations Act and Cost Accounting Standards (CAS). Similarly, OTs for prototype projects are not subject to those laws and regulations that are limited in applicability to grants and cooperative agreements. A list of statutes that apply to procurement contracts, but that are not necessarily applicable to OTs for prototype projects is at Appendix 2. The list is provided for guidance only, and is not intended to be definitive. To the extent that a particular law or regulation is not limited to the type of instrument used (e.g., fiscal and property laws), it would generally apply to an OT. Each statute must be examined to ensure whether it applies to a particular funding arrangement using an OT. The use of OT authority does not eliminate the applicability of all laws and regulations. C2.3.2. Scope of Prototype Projects. Prototype projects could include prototypes of weapon systems, subsystems, components, or technology. With regard to section 845 authority, a prototype can generally be described as a physical or virtual model used to evaluate the technical or manufacturing feasibility or military utility of a particular technology, process, concept, end item, or system. The quantity developed should be limited to that needed to prove technical or manufacturing feasibility or evaluate military utility. In general, research, development, test & evaluation (RDT&E) appropriations will be appropriate for OT prototype projects. Low rate initial production quantities are not authorized to be acquired under prototype authority. C2.3.3. Type of Instrument. OT prototype agreements are considered acquisition instruments, since the government is acquiring something for its direct benefit, notwithstanding that OT agreements are not procurement contracts. Terms such as "support or stimulate" are assistance terms and are not appropriate in OT agreements for prototype projects. C2.3.4. Preferred Use of Authority -- Nontraditional Defense Contractor(s). It is in the DoD's interest to tap into the research and development being accomplished by nontraditional Defense contractors and pursue commercial solutions to Defense requirements. One justifiable use of this authority, which is DoD's preferred use, is to attract nontraditional defense contractors that participate to a significant extent in the prototype project. These nontraditional defense contractors can be at the prime level, team members, subcontractors, lower tier vendors or suppliers, or "intra-company" business units; provided the business unit makes a significant contribution to the prototype project . Examples of a "significant contribution" includes supplying new key technology or products, accomplishing a significant amount of the effort, or in some other way causing a material reduction in the cost or schedule or increase in the performance. C2.3.5. Restriction on Cost-Share Use. Generally, the Government should not mandate cost-sharing requirements for Defense unique items, so the use of OT authority that invokes cost-sharing requirements should be limited to those situations where there are commercial or other benefits to the awardee. C2.3.6. Type of Agreement. Some commercial entities have indicated reluctance to do business with the government, citing concerns in areas such as cost accounting standards, intellectual property, and audit. Agreements Officers should consider whether the prototype project's performance requirements can be adequately defined and a definitive, fixed price reasonably established for the agreement. When prototype projects are competitively awarded and the risks of the project permit adequate definition of the effort to accommodate establishing a definitive, fixed-price type of agreement, then there typically would be no need to invoke cost accounting standards or audit. This is not true if an agreement, though identifying the government funding as fixed, only provides for best efforts or potential adjustment of payable milestones based on amounts generated from financial or cost records. If the prototype effort is too risky to enter into a definitive, fixed-price type of agreement or the agreement requires at least one third of the total costs to be provided by non-federal parties pursuant to statute, then accounting systems become more important and audits may be necessary. The government should make every attempt to permit an entity to use its existing accounting system, provided it adequately maintains records to account for federal funds received and cost sharing, if any. In addition, when audits may be necessary, the Agreements Officer has the flexibility to use outside independent auditors in certain situations and determine the scope of the audits. Additional guidance on accounting systems, audit access and intellectual property are provided in later sections. It is critical that the Agreements Officer carefully consider these areas when negotiating the agreement terms and conditions. C3. CHAPTER 3 ACQUISITION PLANNING C3.1. GENERAL C3.1.1. Essential Ingredient. Acquisition planning for both the prototype project and any expected follow-on activity is an essential ingredient of a successful prototype project. Prototype projects should include a team approach as previously discussed. Early and continued communication among all disciplines will enhance the likelihood of a successful project. C31.2. Appropriate Safeguards. OT authority for prototype projects provides flexibility to negotiate terms and conditions that are appropriate for the acquisition, without regard to the statutes or regulations governing a procurement contract. It is essential that OT agreements incorporate good business sense and appropriate safeguards to protect the Governments interest. This includes assurances that the cost to the Government is reasonable, the schedule and other requirements are enforceable, and the payment arrangements promote on-time performance. It is the Agreements Officers responsibility to ensure the terms and conditions negotiated are appropriate for the particular prototype project. The Agreements Officer should also consider expected follow-on program needs. C3.1.3. Skill and Expertise. The Agreements Officer should not view previously issued OTs as templates or models. An OT model intentionally has not been developed, to avoid undermining the purpose of the authority. The Agreements Officer should consider commercial business practices, typical FAR procedures and clauses, as well as OT agreements; but ultimately is responsible for negotiating OT agreement clauses that appropriately reflect the risk to be undertaken by all parties to the prototype project. If a policy or procedure, or a particular strategy or practice, is in the best interest of the Government and is neither specifically addressed in this guide nor prohibited by law or Executive Order, the Government team should not assume it is prohibited. The Agreements Officer should take the lead in encouraging business process innovations and ensuring that business decisions are sound. C3.1.4. Flexibility. In light of the legislated conditions associated with use of OTA for prototype projects, Agreements Officers are encouraged to structure acquisition strategies and solicitations that provide the flexibility to award a procurement contract in the event that conditions do not support use of an OT. C3.1.5. Agreement. The nature of the agreement and applicable terms and conditions will be negotiated based on the technical, cost and schedule risk of the prototype project, as well as the contributions, if any, to be made by the awardee or non-Federal participants to the agreement. C3.2. MARKET RESEARCH Market research is an integral part of the development of the acquisition strategy. The research needs to be done early in the acquisition planning process. A key reason to use OT authority is to attract nontraditional defense contractors to participate to a significant extent in the prototype project. In order to attract these companies, the government team should accomplish research of the commercial marketplace and publicize its project in venues typically used by the commercial marketplace. Some potential means of finding commercial sources could include specific catalogs, product directories, trade journals, seminars, professional organizations, contractor briefings, in-house experts, and vendor surveys. C4. CHAPTER 4 APPROVALS & KEY DOCUMENTATION C4.1. ACQUISITION STRATEGY AND OT AGREEMENT The complexity and dollar value of the prototype project will determine the amount of documentation necessary to describe the projects acquisition strategy and the need for updates as significant strategy changes occur. At a minimum, the acquisition strategy for a prototype project generally should address the areas in Appendix 5.The acquisition strategy and the resulting OT agreement must be approved no lower than the existing agency threshold associated with procurement contracts, provided this threshold is at least one level above the Agreements Officer. Exceptions to this approval level may be made by the Agency-Level Head of the Contracting Activity. The format and the approving official will be specified by agency procedures. C4.2. SENIOR PROCUREMENT EXECUTIVE DETERMINATIONS When the use of OT authority is based on exceptional circumstances, the agency SPE must determine in writing that the 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. The justification must be prepared in accordance with agency procedures and fully describe (1) the innovative business arrangements or structures, (2) the associated benefits, and (3) explain why the business arrangements or structures would not be feasible or appropriate under a procurement contract. C4.3. AGREEMENT ANALYSIS Each agreement file must include an agreement analysis. The agreement analysis must affirm the circumstances permitting use of OT authority. Therefore, the analysis must either (1) explain the significant contributions expected of the nontraditional Defense contractors, the cost-share that will be required, or any exceptional circumstances approved by the SPE; or (2) identify where this supporting information can be found in the agreement file. The analysis also must address the reasonableness of the negotiated price and key terms and conditions. Like the acquisition strategy, the agreement analysis should describe each negotiated key agreement clause and explain why the proposed terms and conditions provide adequate safeguards to the Government and are appropriate for the prototype project. C4.4. REPORT SUBMISSIONS C4.4.1. Required. The approving official for the award will review the submission for the annual report to Congress and the Department of Defense (DD) Form 2759 (see section C6.1) prior to approving the agreement for award. The DD Form 2759 and submission for the report to Congress must be submitted to the agency POC within 10 days of award. The agency POC will forward submissions for the report to Congress through the Agency-Level Head of the Contracting Activity to the D,DPAP by October 31. C4.4.2. When Appropriate. Agencies must provide notice of waivers to Comptroller General access or DoD access to records as detailed in C6.2.1. and C6.2.2. and Appendices 7 and 8. C4.5. METRICS Metrics are collected in two ways on OTA for prototype projects: (1) via the DD Form 2759 (see Appendix 12) and (2) in prototype project submissions for the statutorily required report to Congress (see Appendix 11). The key metrics include: C4.5.1. Reason for Using OT Authority. Enter the appropriate code in Block 36 of the DD Form 2759 and discuss the reason the authority is used in the answers to the questions in the submission for the report to Congress. C4.5.2. Nontraditional Defense Contractors. Enter a 3 in Block 13c of the DD 2759 for all prime nontraditional Defense contractors and report all nontraditional Defense contractors that participate to a significant extent in the prototype project in Block 14. Discuss the significant contribution of these nontraditional Defense contractors in the answers to the questions in the submission for the report to Congress. C4.5.3. Non-Federal Funds and Percent of Cost-Share. The DD Form 2759 reports the participant cost-share amount and percentage in Block 31 and the total agreement amount in Block 32. The non-Federal dollars and Government dollars get reported in the submission for the report to Congress. If a nontraditional Defense contractor is not participating to a significant extent in the prototype project and the reason for using OT authority is based on cost-share, the non-Federal amounts must be at least one-third of the total cost of the prototype project. C4.5.4. Competition. The extent of competition is captured in Block 33 and 34 of the DD Form 2759. C4.5.5. Other Metrics. The team is encouraged to establish and track any other metrics that measure the value or benefits directly attributed to the use of the OT authority. Ideally these metrics should measure the expected benefits from a cost, schedule, performance and supportability perspective. If an Agreements Officer or Project Manager establish other metrics that could be used across the board to measure the value or benefits directly attributed to the use of the OT authority, these metrics should be identified as a "Best Practice" in accordance with C6.2.3. procedures. C5. CHAPTER 5 AGREEMENT EXECUTION C5.1. AGREEMENT NUMBER CODING OT for prototype projects must identify the 9th position of the award number as a 9. The other position of the award number and modifications will be assigned the same as procurement contracts. C5.2. RECOVERY OF FUNDS C5.2.1. Payments. Title 10 U.S.C. 2371(d) provides that an OT for a prototype project may include a clause that requires a person or other entity to make payments to the DoD, or any other department or agency of the Federal Government, as a condition for receiving support under the OT. The amount of any such payment received by the Federal Government may be credited to the appropriate account established on the books of the U.S. Treasury Department by 10 U.S.C. 2371(d). The books of the Treasury include separate accounts for each of the military departments and various agencies for this purpose. C5.2.2. Reinvestment. The intent of the authority to recover and reinvest funds is to provide the Federal Government an opportunity to recoup some or all of its investment when Government funds were used to develop products that have applications outside the Government. The recouped funds can then be reinvested into other prototype projects. The Agreements Officer should consider whether expected applications exist beyond that of the Government, and whether it is appropriate to include a clause for the recovery of funds. The Agreements Officer should contact the agency's POC if this authority will be used. C5.2.2.1. Amounts credited under this authority will be available for the same time period during which other funds in such accounts are available. Payments received under an agreement should be credited to currently available appropriation accounts, even if the funds that were obligated and expended under the agreement were from fiscal-year appropriations no longer available for obligation. Amounts credited to each currently available appropriation account are available for the same time period as other funds in that account. C5.2.2.2. Similarly, amounts so credited under this authority will be available for the same purpose that other funds in such accounts are available (i.e., prototype projects directly relevant to weapons or weapon systems proposed to be acquired or developed by the DoD). C5.3. SECURITY REQUIREMENTS DoD security management and handling requirements outlined in regulations such as DoD 5200.1-R and DoD 5400.7-R apply to prototype OTs. C5.4. CONSORTIA/JOINT VENTURES C5.4.1. Legally Responsible Entity. The Agreements Officer should ensure that an OT for a prototype project is entered with an entity that is legally responsible to execute the agreement. That entity may be a single contractor, joint venture, consortium (or a member thereof), or a traditional prime/sub relationship. C5.4.2. Deciding How to Execute. The Agreements Officer should be aware of the risks associated with entering an agreement with a member on behalf of a consortium that is not a legal entity (i.e., not incorporated). The Agreements Officer should review the consortiums Articles of Collaboration with legal counsel to determine whether they are binding on all members with respect to the particular project at issue. Next, the Agreements Officer should, in consultation with legal counsel, determine the best way to execute the agreement with one member as responsible for the entire agreement, with all members, or with one member on behalf of the consortium. C5.5. CONSIDERATION OF PROTECTIONS PROVIDED IN LAW As indicated in Appendix 2, many of the statutory protections pertaining to a procurement contract do not apply to OTs. Nonetheless, the Agreements Officer is not precluded from and should consider applying the principles or provisions of any inapplicable statute that provides important protections to the Government, the participants, or the participants' employees. For example, the Agreements Officer typically should not award an OT to a company or individual that is suspended or debarred. The Agreements Officers also may want to consider whether whistleblower protections should be included in the agreement, especially if the prime awardee is a company that typically does business with the DoD. C5.6. AGREEMENT FUNDING C5.6.1. Funding Restrictions. Laws that are inapplicable to OTs include the Buy American Act (41 U.S.C. 10a-d) and the Berry Amendment (10 U.S.C. 2241 note) which are both applicable only to procurement contracts. The Agreements Officers should consult with legal counsel to determine the applicability of other funding restrictions (e.g., prohibitions on the use of funds for certain items from foreign sources) found in appropriations acts. C5.6.2. Funding Requirements. Acquisition funding requirements are applicable to prototype OTs and are contained in agency fiscal regulations. No Agreements Officer or other employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations (Anti-Deficiency Act, 31 U.S.C. 1341), unless otherwise authorized by law. C5.6.3. Limits on Government Liability. When an agreements provides for incremental funding or includes cost-reimbursement characteristics, the Agreements Officer should include appropriate clauses that address the limits on Government obligations. C5.7. PROTESTS The GAO protest rules do not apply to OTs for prototype projects. Solicitations for which the use of an OT is envisioned, should stipulate the offerors rights and procedures for filing a protest with the agency, using either the established agency-level protest procedure or an OT-specific procedure. C5.8. FLOW DOWN The Agreements Officer should consider which of the OT clauses the awardee should be required to flow down to participants of the agreement. In making this decision, the Agreements Officer should consider both the needs of the Government (e.g., audits) and the protections (e.g., intellectual property) that should be afforded to all participants. C5.9. PRICE REASONABLENESS C5.9.1. Data Needed. The Government must be able to determine whether the amount of the agreement is fair and reasonable. The Agreements Officer may require the awardees to provide the data needed to establish price reasonableness, including commercial pricing data, market data, parametric data, and cost information. However, the Agreements Officer should attempt to establish price reasonableness through other means before requesting cost information. If cost information is needed to establish price reasonableness, the government should obtain the minimum cost information needed to determine whether the amount of the agreement is fair and reasonable. C5.9.2. Advisory Services. DCAA, acting in an advisory capacity, is available to provide financial advisory services to the Agreements Officer to help determine price reasonableness. DCAA can provide information on the reasonableness of the proposed cost elements and any proposed contributions, including non-cash contributions. DCAA can also assist in the pre-award phase by evaluating the awardee's proposed accounting treatment and whether the awardee's proposed accounting system is adequate to account for the costs in accordance with the terms of the agreement. C5.10. ALLOWABLE COSTS C5.10.1. General. This section applies only when the agreement is a cost-type OT. C5.10.2. Use of Funds. The agreement should stipulate that Federal funds and the OT awardees cost sharing funds, if any, are to be used only for costs that would reasonably and prudently be incurred in carrying out the prototype project. C5.10.3. Allowable Costs Requirements. In determining whether to include some or all of the allowable cost requirements contained in the Cost Principles (48 CFR Part 31), the Agreements Officer should consider the guidance contained in the section C5.11. C5.11. ACCOUNTING SYSTEMS C5.11.1. General. This section applies only when the agreement is cost-type OT. In these cases, the Agreements Officer should consider including a clause that (1) addresses accounting system requirements and (2) requires the awardee to consider a subawardees accounting system capabilities when the subawardee is contributing to the statutory cost share requirement or is expected to receive payments that are based on amounts generated from financial or cost records. C5.11.2. System Capability. When structuring the agreement, the Agreements Officer must consider the capability of the awardee's accounting system and the guidance in Appendix 6. Agreements should require that adequate records be maintained to account for Federal funds received and any cost-sharing. C5.12. COMPTROLLER GENERAL ACCCESS Section 801 of the National Defense Authorization Act for Fiscal Year 2000 establishes a requirement that an OT for a prototype project that provides for payments in a total amount in excess of $5,000,000 include a clause that provides Comptroller General access to records. Section 804 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 provides clarification that limits access in certain situations. Because this is a mandatory requirement that has a substantial impact on the public, the rules implementing this law were published in the Federal Register and are codified in Part 3 of Section 32 of the Code of Federal Regulations, Subtitle A, Chapter I. The Final Rule implementing sections 801 and 804 was published in the Federal Register on November 15, 2001 and is effective for solicitations issued on or after December 17, 2001. The policy is reflected in Appendix 7 of this Guide. C5.13. DOD ACCESS TO RECORDS POLICY. The Departments policy concerning DoD access to awardee and subawardee records on OT agreements for prototype projects was published as a final rule in the Federal Register and is codified in Part 3 of Section 32 of the Code of Federal Regulations, Subtitle A, Chapter I. The Final Rule was published in the Federal Register on _____________ and is effective for solicitations issued on or after _____________________. The policy is reflected in Appendix 8 of this Guide. This access is separate and distinct from Comptroller General access. C5.14. PROFIT Profit or fee is permitted for awardees of OTs for prototype projects; but generally should not be permitted on projects that are cost-shared. C5.15. PAYMENTS There is no one means of providing payments for OTs. The agreement must identify clearly the basis and procedures for payment. Appendix 9 provides guidance for drafting the agreement payment clauses. C5.16. INTELLECTUAL PROPERTY C5.16.1. Applicability of Certain Laws. Because certain intellectual property (IP) requirements normally imposed by the Bayh-Dole Act (35 U.S.C. 202-204) and 10 U.S.C. 2320-21 do not apply to OTs, Agreements Officers can negotiate terms and conditions different from those typically used in procurement contracts. However, in negotiating these clauses, the Agreements Officer must consider other laws that affect the government's use and handling of intellectual property, such as the Trade Secrets Act (18 U.S.C. 1905); the Economic Espionage Act (18 U.S.C. 1831-39); the Freedom of Information Act (5 U.S.C. 552); 10 U.S.C. 130; 28 U.S.C. 1498; 35 U.S.C. 205 and 207-209; and the Lanham Act, partially codified at 15 U.S.C. 1114 and 1122. C5.16.2. Flexibility and Balance. IP rights are critical elements of successful prototype projects and must be addressed early in the acquisition strategy. The Agreements Officer should negotiate IP rights provisions that most effectively balance the Governments program objectives and the awardees business interests in the prototype technology. The agreement must explicitly address the Governments rights to use, modify, reproduce, release and disclose the relevant technical data and computer software. Where the agreement uses standard IP terms from the Defense Federal Acquisition Regulation Supplement (DFARS)(e.g., technical data, computer software, and computer software documentation) and the prototype is likely to be produced, maintained, or upgraded using a procurement contract, the definition of these terms must be consistent with that in the DFARS in order to prevent confusion. C5.16.3. Additional Assistance. Appendix 10 addresses issues that should be considered when negotiating IP rights for OT agreements. For additional assistance in understanding and negotiating IP rights, the Agreements Officer should consult the acquisition guidebook Intellectual Property: Navigating Through Commercial Waters (available at  HYPERLINK "http://www.acq.osd.mil/ar/dpc/intelprop.pdf" http://www.acq.osd.mil/ar/dpc/intelprop.pdf). However, the Agreements Officer should keep in mind that this guidebook focuses on IP rights in procurement contracts, which are subject to the requirements of the Bayh-Dole act (35 U.S.C. 202-204) and 10 U.S.C. 2320-21. Because prototype OTs are not subject to these requirements, Agreements Officers have additional flexibility when negotiating for IP rights that most effectively balance the parties interests. C5.17. PROPERTY C5.17.1. General. The government is not required to and generally should not take title to property acquired or produced by a private party signatory to an OT. However, an exception exists for property that the agreement identifies as deliverable property. In deciding whether to take title to property under an OT, the Government should consider whether known or future efforts may be fostered by the Governments ownership of the property. C5.17.2. Requirements and Guidance Government Title. If the Government takes title to property or furnishes Government property, the property is subject to statutes pertaining to the treatment and disposition of Government property, and a property clause must be included in the agreement. The property clause must be consistent with the Federal Property and Administrative Services Act and, as a minimum, should address the following: C5.17.2.1. A list of property to which the Government will obtain title; C5.17.2.2. Whether the awardee or the Government is responsible for maintenance, repair, or replacement of the property; C5.17.2.3. Whether the awardee or the Government is liable for loss, theft, destruction of, or damage to the property; C5.17.2.4. Whether the awardee or the Government is liable for loss or damage resulting from use of the property; and C5.17.2.5. The procedures for accounting for, controlling, and disposing of the property. When the awardee is a company that traditionally does not do business with the Government, the company's commercial property control system generally should be used to account for Government property. C5.17.3. Additional Government-Furnished Property Requirements. The OT agreement also should specify: C5.17.3.1. What guarantees (if any) the Government makes regarding the propertys suitability for its intended use, the condition in which the property should be returned, and any limitations on how or when the property may be used; and C5.17.3.2. A list of property the Government will furnish for the performance of the agreement. C5.17.4. Cost-Sharing Considerations. When the private party signatory has title to property that will be factored into the signatorys cost share amount, the private party signatory and the Government must agree on the method for determining the value of the property. C5.18. CHANGES C5.18.1. Method of change. The OT agreement should address how changes will be handled. The Agreements Officer should consider whether the Government should have the right to make a unilateral change to the agreement, or whether all changes should be bilateral. The fact that unilateral changes may lead to disputes and claims, particularly in agreements with fixed-priced characteristics, should be considered. C5.18.2. Need for unilateral change. The Government may need the right to make a unilateral change to the agreement to ensure critical requirements are met. If a significant cost contribution is not expected from the OT awardee, the Government normally should retain its right to make a unilateral change. The awardee should be entitled to an equitable adjustment for any unilateral change that caused an increase or decrease in the cost of, or the time required for, performance. C5.18.3. Accounting Systems. In determining the method for computing the amount of the equitable adjustment (i.e., monies due as a result of a change), the Agreement Officer should consider the accounting systems guidance contained in Appendix 6. C5.19. DISPUTES C5.19.1. Process. Although OTs are not subject to the Contract Disputes Act, an OT dispute can be the subject of a claim in the Court of Federal Claims. Agreement Officers should ensure each OT addresses the basis and procedures for resolving disputes. C5.19.2. Alternate Disputes Resolution. Agreements Officers should seek to reduce the risk of costly litigation by negotiating disputes clauses that maximize the use of alternative disputes resolution (ADR) when possible and appropriate. Agreements Officers should consult with the ADR Specialist in their organization for assistance in crafting ADR clauses. C5.20. TERMINATION C5.20.1. Basis for termination. Agreements Officers should consider termination clauses (both for convenience and for cause) in light of the circumstances of the particular OT prototype project. A unilateral Government termination right is appropriate. In cases in which risk allocation and cost shares are apportioned, an awardee termination right could be appropriate as well. Such a termination could occur in instances in which an awardee discovers that the expected commercial value of the prototype technology does not justify continued investment or the Government fails to provide funding in accordance with the agreement. Termination clauses should identify the conditions that would permit terminations and include the procedures for deciding termination settlements. Two examples of procedures for deciding termination amounts include (1) providing for no payment beyond the last completed payable milestone or (2) recognizing that the termination settlement costs are subject to negotiation. The latter procedure must be used when the agreement requires that at least one third of the total costs to be provided by non-federal parties pursuant to statute. C5.20.2. Remedies. Agreements Officers should consider whether the Government should be provided the opportunity to terminate for cause. Clauses should be tailored to discourage defaults in line with an agreements overall allocations of risk. When an agreement provides the Government the right to terminate for cause or provides the awardee the right to terminate, the agreement should address the remedies are due to the Government. For example, it may be appropriate to require recoupment of the Government's investment or to obtain unlimited or Government-purpose license rights to intellectual property created during performance that is necessary to continue a prototype project. C5.20.3. Accounting Systems. If termination settlement costs are expected to be the subject of negotiation based on amounts generated from the awardee's financial or cost records, the Agreements Officer should consider the allowable costs, accounting systems and audit guidance contained in the section C5.10 and Appendices 6 and 7. C5.20.4. Caution. If the Agreements Officer is attempting to establish a fixed-price type of agreement, the awardee typically should not have the right to terminate. If the Agreements Officer decides there are reasons to provide the awardee the right to terminate, termination settlements should be limited to the payable milestone amount of the last completed milestone. C5.21. AWARDEE REPORTING C5.21.1. Performance Reporting. The OT awardee is responsible for managing and monitoring each prototype project and all participants. The solicitation and resulting agreement should identify the frequency and type of performance reports necessary to support effective management. Effective performance reporting addresses cost, schedule and technical progress. It compares the work accomplished to the work planned and the actual cost and explains any variances. There is not a "one-size-fits-all" approach. Little, if any, performance reporting could be required if the agreement price is fixed and financing is provided by fixed payable milestones. However, if that is not the case, performance reporting will be necessary. C5.21.1.1. Teaming arrangements. If an awardee is teaming with other companies (e.g., through consortium or joint venture) for the prototype project, the Agreements Officer should consider whether performance reporting on all team members would be appropriate. C5.21.1.2. DoD 5000.2-R Earned Value Requirements. Prototype projects that meet the dollar criteria or risk management considerations discussed in DoD 5000.2-R must follow the earned value management systems guidance therein unless a waiver is obtained as specified in the DoD 5000.2-R. When cost performance reporting is required, the Project Manager is encouraged to seek the advice of appropriate experts on the elements of performance management visibility. The Project Manager should tailor the report to obtain only the information needed for effective management control. C5.21.1.3. DoD 5000.2-R Requirements for Cost Summary Reports. When a prototype project may evolve into a major Defense acquisition program, it is advisable for the prototype Project Manager to contact the Cost Analysis Improvement Group (CAIG) Executive Secretary. The CAIG is responsible for collecting actual costs of prototype systems and using the cost data in their statutory role of developing independent cost estimates for acquisition executives. If the CAIG concludes there is no other available source of relevant cost information, a summary cost report may be required. The agreement should provide for the delivery of an appropriate cost summary report if the program and OT agreement meet the criteria contained in section 6.4.1. of the DoD 5000.2-R. Such a cost report should generally be in OT awardee-specified format and provide data in a product-oriented structure. The report should be submitted to the contractor Cost Data Report Project Office located at 1111 Jefferson Davis Highway, Suite 500, Arlington, Virginia. C5.21.2. Technical Report. DoD Instruction 3200.14 requires the agency to deliver a technical report to the Defense Technology Information Center (DTIC) upon completion of research and engineering projects. A Standard Form (SF) 298, "Report Documentation Page," is established for that purpose. An OT agreement should include a requirement for the awardee to provide the appropriate information to the Agreements Officer to enable the agency to submit required reports to DTIC. C5.21.3. Link to Payment. The Agreements Officers, in consultation with the Project Manager, should consider whether reports required of the OT awardee are important enough to warrant the establishment of line items or separate payable milestones. They should also consider whether report requirements should be incorporated as a part of a larger line item or payable milestone. In either case, an appropriate amount should be withheld if a report is not delivered. C5.22. ADMINISTRATION C5.22.1. Documentation. It is vital that Administrative Agreements Officers receive all pertinent documentation to ensure the effective administration of the agreement. C5.22.2. Corrective Action. It is the Administrative Agreements Officers responsibility to ensure that all terms and conditions of the agreement are being satisfied. If the OT awardee has failed to comply with any term of the agreement, the Administrative Agreements Officer must take timely, appropriate action to remedy the situation. C5.23. AGREEMENT CLOSE-OUT The DCMA One Book includes procedures on close-out. This resource can be found at http://www.DCMA.mil. The One Book is listed under "Policy/Processes." Closeout, Chapter 10.2, is under Section 10.0, Contract Closeout Services. Guidance that will facilitate agreement close-out is provided throughout this guide, in areas such as audit requirements, cost sharing, payments, property, patents, and OT awardee reports. C6. CHAPTER 6 GOVERNMENT PROTOTYPE PROJECT REPORTING REQUIREMENTS C6.1. REPORTS REQUIRED FOR ALL PROTOTYPE PROJECTS The report submissions identified in this section are the Departments means of explaining the OT acquisition tools value to the Government. Electronic formats for these reports can be found at  HYPERLINK "http://www.acq.osd.mil/dp/dsps/ot/dspsot.htm" http://www.acq.osd.mil/dp/dsps/ot/dspsot.htm. . Table C6.T1 summarizes the reports that the Agreements Officer and Project Manager are responsible for preparing and identifies when these reports must be prepared and submitted to the Agency POC. Reports Required for all Prototype Other Transactions ReportsFreqPrepareApproving OfficialSubmitToFinal Desti-nationInput to Report to Congressonce (unless recoup)Prior to award In accordancewith Agency proceduresWithin 10 days of awardAgency POCD,DPAP and CongressDD 2759With each obligation or deobligationIn accordancewith Agency proceduresWithin 10 days of actionAgency POC and DIORAgency POC Table C6.T1 C6.1.1 Report to Congress. Title 10, U.S.C. 2371(h) requires a report be submitted to Congress each year by December 31st for awards made in the preceding fiscal year pursuant to this authority. This includes, for prototype projects that use this authority, all initial awards, new prototype projects added to existing agreements, and options exercised or new phases awarded . Each Agreements Officers input for the annual report will be prepared prior to award, approved by the approving official, and submitted to the Agency POC within 10 days of award. The agency POC will forward report submissions through the Agency level Head of the Contracting Activity to the Director, Defense Procurement and Acquisition Policy (D,DPAP) by October 31st. Report Control Symbol DD-A-T(A)1936 has been assigned to this annual report requirement. The format and instructions for preparing this report are provided in Appendix 11. If the agreement provides for recoupment of Government funds (see section C5.2), the amount recouped must be reported to the Agency POC in the fiscal year recouped, so that it can be included in Part II of the annual report to Congress. C6.1.2. Data Collection. A DD Form 2759 has been established to collect information on section 845 prototype project awards. The Agreements Officer must complete a DD Form 2759 at the time of award and each time funds are obligated or deobligated on the agreement. Use the instructions in Appendix 12 to complete the form and submit it to the designated offices within 10 days of the action. The DD Form 2759 information collection has been assigned Report Control Symbol Number DD-A&T(AR)2037. Until the time an operational database is established, the agencies will maintain key DD Form 2759 information in an excel spreadsheet and submit the agency information with the Congressional Report submissions. C6.2. OTHER REPORTING REQUIREMENTS, WHEN APPROPRIATE The sections below summarize the other reports or notices that the Agreements Officer and Project Manager may be required to submit. C6.2.1. Use of Independent Public Accountant. If the agreement provides for the use of an outside Independent Public Accountant (IPA) (as described in Appendix 8), the Agreements Officer must supplement the submission for the annual report to Congress with a Part III input (see Appendix 11). Generally, this information should be known for the awardee and key participants at the time of award and the Agreements Officer must submit it with the Part I input for the annual report to Congress, to the Agency POC within 10 days of award. However, if the use of an IPA is authorized for key participants after award, the Part III input should be submitted to the Agency POC within 10 days after this becomes known. The Part III input will not be forwarded to Congress, but will be provided to the Office of the Inspector General (OIG). The OIG has agreed to an annual notification instead of requiring pre-approval in each instance where an IPA will be used. C6.2.1. Comptroller General Access C6.2.3.1. Notification of Waiver. Any notification of a waiver to the requirement for Comptroller General access must be provided to the Committees on Armed Services of the Senate and the House of Representatives, the Comptroller General, and the D,DPAP before entering into the agreement (see Appendix 7). C6.2.3.2. Impact of Access Requirements. The Head of the Contracting Activity must notify the DDP of situations where there is evidence that the Comptroller General Access requirement caused companies to refuse to participate or otherwise restricted the Departments access to companies that typically do not do business with the Department (see Appendix 7). C6.2.3. Best Practices. The Agreements Officer and Project Manager are encouraged to submit to the agency POCs, at any time, lessons learned from negotiation or agreement execution that could benefit other Agreements Officers and Project Managers. Likewise, they also are encouraged to submit input on areas on which they feel they need further guidance or where the guidance needs to be changed. The agency POCs will ensure these lessons learned or recommendations for further guidance get passed on either through informal interdepartmental working groups or formally to D,DPAP. AP1. APPENDIX 1 DEFINITIONS (track to those published) Administrative Agreements Officer. An individual with the authority to administer OTs for prototype projects and, in coordination with the Agreements Officer, make determinations and findings related to the delegated administration functions. If administrative functions are retained by the contracting activity, the Agreements Officer serves as the Administrative Agreements Officer. Agency. Any Military Department or Defense Agency with authority to award OTs for prototype projects. Agency level Head of the Contracting Activity. The Head of the Contracting Activity within the Agency that has been delegated overall responsibility for the contracting function within the Agency. For the military departments this includes ASA(ALT)/SAAL-ZP, ASN(RDA)ABM and SAF/AQC. Agreements Officer. An individual with the authority to enter into, administer, or terminate OTs for prototype projects and make related determinations and findings. Approving Official. The official responsible for approving the OT acquisition strategy and resulting OT agreement. This official must be at least one level above the Agreements Officer and at no lower level than existing agency thresholds associated with procurement contracts. Awardee. Any business unit that is the direct recipient of an OT prototype agreement. Business unit. Any segment of an organization, or an entire business organization which is not divided into segments. Contracting activity. An element of an agency designated by the agency head and delegated broad authority regarding acquisition functions. It includes elements designated by the Director of a Defense Agency which has been delegated contracting authority through its agency charter. Cost-based procurement contract. A procurement contract that is subject to the provisions of Part 31 of the Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), or was awarded after the submission of cost or pricing data. Cost-type OT. Agreements where payments are based on amounts generated from the awardee's financial or cost records or that require at least one third of the total costs to be provided by non-federal parties pursuant to statute. This includes interim and final milestone payments that may be adjusted for actual costs incurred. Fixed-price type OT. Agreements where payments are not based on amounts generated from the awardee's financial or cost records. Head of the contracting activity (HCA). The official who has overall responsibility for managing the contracting activity. Nontraditional Defense contractor. A business unit 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. Other Transactions. The term commonly used to refer to the 10 U.S.C. 2371 (reference (a)) authority to enter into transactions other than contracts, grants or cooperative agreements. Points of contact. Agency individuals responsible for information regarding OTs for prototype projects. An automated listing is maintained at the Director, Defense Procurement and Acquisition Policy (D,DPAP) web site. Procurement contract. A contract awarded pursuant to the Federal Acquisition Regulation. Project Manager. The government manager for the prototype project. Segment. One of two or more divisions, product departments, plants, or other subdivisions of an organization reporting directly to a home office, usually identified with responsibility for profit and/or producing a product or service. Senior Procurement Executive. The following individuals:--- Department of the Army - Assistant Secretary of the Army (Acquisition, Logistics and Technology); Department of the Navy - Assistant Secretary of the Navy (Research, Development and Acquisition); Department of the Air Force - Assistant Secretary of the Air Force (Acquisition). The Directors of Defense Agencies who have been delegated authority to act as Senior Procurement Executive for their respective agencies. Subawardee. Any business unit of a party, entity or subordinate element performing effort under the OT prototype agreement, other than the awardee. AP2. APPENDIX 2 STATUTES INAPPLICABLE TO OTHER TRANSACTIONS This list of statutes that apply to procurement contracts, but that are not necessarily applicable to OTs for prototype projects is provided for guidance only, and is not intended to be definitive. To the extent that a particular requirement is a funding or program requirement or is not tied to the type of instrument used (e.g., fiscal and property laws), it would generally apply to an OT. Each statute must be examined to determine whether it applies to a particular funding arrangement using an OT. 1. Sections 35 U.S.C. 202-204 of the Bayh-Dole Act. Prescribes Governments rights in patentable inventions made with Government funds. 2. Competition in Contracting Act, Pub. L. No. 98-369 (1984), as amended. Promotes the use of competitive procurement procedures and prescribes uniform Government-wide policies and procedures regarding contract formation, award, publication, and cost or pricing data (truth in negotiations). See DoD coverage generally at Chapter 137 of Title 10, United States Code, particularly sections 2301-2305. 3. Contract Disputes Act, Pub. L. No. 95-563 (1987), as amended, 41 U.S.C. 601 et seq. Provides for the resolution of claims and disputes relating to Government contracts. 4. Procurement Protest System, Subtitle D of Competition in Contracting Act, Pub. L. No. 98-369 (1984), 31 U.S.C. 3551 et seq. Provides statutory basis for procurement protests by interested parties to the Comptroller General. 5. Pub. L. 85-804, 50 U.S.C. 1431-1435, Extraordinary Contractual Relief. Authorizes contractor remedies such as formalization of informal commitments, amendments without consideration, and correction of mistakes; and permits indemnification for unusually hazardous risks. 6. 10 U.S.C. 2207, Expenditure of Appropriations: Limitation. Permits the termination of contracts upon a finding that the contractor has offered or given gratuities to obtain a contract. 7. 10 U.S.C. 2306. Kinds of Contracts. Prohibits the use of cost-plus-a-percentage-of-cost system of contracting; requires a covenant against contingent fees paid to obtain contracts; and limits fee amount on virtually all cost-type contracts. 8. 10 U.S.C. 2313. Examination of Records of Contractor. Provides agency and General Accounting Office (GAO) access to contractors facilities to audit contractor and subcontractor records and gives the Defense Contract Audit Agency subpoena authority. (Section 801 of the National Defense Authorization Act for Fiscal Year 2000, Public Law 106-65, does provide for GAO access as addressed in C5.13 and Appendix 8.) 9. 10 U.S.C. 2320, Rights in Technical Data and 10 U.S.C. 2321, Validation of Proprietary Data Restrictions. Prescribes Government and contractor rights to technical data. 10. 10 U.S.C. 2353, Contracts: Acquisition, Construction, or Furnishing of Test Facilities and Equipment. Addresses acquisition, construction, or furnishing of test facilitites (to R&D contractors). 11. 10 U.S.C. 2354, Contracts: Indemnification Provisions. Prescribes indemnification authority against unusually hazardous risks for R&D contractors. 12. 10 U.S.C. 2393, Prohibition against Doing Business with Certain Offerors. Prohibits the solicitation of offers and contract awards to contractors that have, or are suspected to have, engaged in criminal, fraudulent, or seriously improper conduct. 13. 10 U.S.C. 2408, Prohibition on Persons Convicted of Defense-Contract Related Felonies and Related Criminal Penalty on Defense Contractors. Generally precludes convicted felons precluded from working in a managerial capacity on DoD contracts. 14. 10 U.S.C. 2409, Contractor Employees: Protection from Reprisal for Disclosure of Certain Information. Provides whistle-blower protection to contractor employees. 15. 31 U.S.C. 1352, Limitation on the Use of Appropriated Funds to Influence Certain Federal Contracting and Financial Transactions. Prohibits the use of funds to influence or attempt to influence Government officials or members of Congress in connection with the award of contracts, grants, loans, or cooperative agreements. 16. Antikickback Act of 1986, 41 U.S.C. 51-58. Prohibits kickbacks in connection with Government contracts, and provides for civil and criminal penalties. 17. Procurement Integrity Act, section 27 of the Office of Federal Procurement Policy Act, 41 U.S.C. 423. Imposes civil, criminal, and administrative sanctions against individuals who inappropriately disclose or obtain source selection information or contractor bid and proposal information. 18. Service Contract Act, 41 U.S.C. 351 et seq.; Walsh Healey Act, 41 U.S.C. 35-45; Fair Labor Standards Act, 29 U.S.C. 201-219. Provide protections for contractor employees. 19. Drug-Free Workplace Act of 1988, 41 U.S.C. 701-707. Applies to contracts and grants. 20. Buy American Act, 41 U.S.C. 10a-d. Provides preferences for domestic end products in production. 21. Berry Amendment, 10 U.S.C. 2241 note. Provides that no part of any appropriation is available to procure certain items of food, clothing, natural fiber products or other items that are not manufactured in the United States. AP3. APPENDIX 3 COST-SHARING OTHER CONSIDERATIONS AP3.1. NATURE OF COST-SHARE The Agreements Officer should understand and evaluate the nature of the cost share. Cost sharing generally should consist of labor, materials, equipment, and facilities costs (including allocable indirect costs). AP3.2. USE OF IR&D Awardees that have cost-based procurement contracts may treat their cost share as a direct effort or as Independent research and development (IR&D). IR&D is acceptable as cost sharing, even though it may be reimbursed by the Government through other awards. It is standard business practice for all for-profit firms, including commercial companies, to recover R&D costs (which, for procurement contracts, are recovered as IR&D) through prices charged to their customers. Thus, the Cost Principles (48 CFR Part 31) allow a for-profit firm that has cost-based procurement contracts to recover through those contracts an allocable portion of the IR&D costs. AP3.3. FULLY DEPRECIATED ASSETS Any part of the cost share that includes an amount for a fully depreciated asset should be limited to a reasonable usage charge. In determining the reasonable usage charge, the Agreements Officer should consider the original cost of the asset, total estimated remaining useful life at the time of negotiations, the effect of any increased maintenance charges or decreased efficiency due to age, and the amount of depreciation previously charged to procurement contracts and subcontracts. In determining the amount of cost sharing, the agreement should not count, as part of the awardee's cost share, the cost of government-funded research, prior IR&D, or indirect costs that are not allocable to the OT. AP3.4. ACCOUNTING TREATMENT The Agreements Officer should have a clear understanding of the awardee's accounting treatment for cost share. While the Agreements Officer should not include any provisions that would require the awardee to use a specific method of cost charging (i.e., direct or IR&D), the awardee may have procurement contracts subject to the CAS that could be affected by an awardee's inconsistent accounting treatment. If an awardee accounts for some of the costs incurred under the agreement as direct effort and other costs as IR&D, the contractors CAS-covered procurement contracts will be in noncompliance with CAS 402. Thus, if the awardee is using IR&D as its cost share and is performing a CAS-covered procurement contract at the time of agreement award, the Agreements Officer should request the awardee to disclose how it intends to treat the Government cost share of the agreement (i.e., as IR&D or as direct effort). If the awardee states that it intends to treat the government cost share as direct effort, the Agreements Officer must notify the cognizant Administrative Contracting Officer (ACO). The cognizant ACO can be identified by querying the DCMA Web site that matches contractors with their ACOs. The site can be accessed through the DCMA home page at:  HYPERLINK http://www.dcmc.mil http://www.dcma.mil (click on "Customer, then click on the Contract Admin Team (CAT) Locator icon") or through the query site at: HYPERLINK "http://alerts.dcmdw.dcma.mil/srk/owa/alerts.catlocator" http://alerts.dcmdw.dcma.mil/srk/owa/alerts.catlocator AP3.5. EQUITY WHEN SHARING COSTS Generally the Governments payments or financing should be representative of its cost share as the work progresses, rather than front-loading Government contributions. OTs that require cost sharing generally should provide for the adjustment of Government or private-sector investment or some other remedy if the other party is not able to make its required investment. Such OTs should address the procedures for verifying cost share contributions, the conditions that will trigger an adjustment, and the procedures for making the adjustment. AP3.6. FINANCIAL REPORTING OTs that use amounts generated from the awardees financial or cost records as the basis for payment, or require at least one-third of the total costs to be provided by non-Federal parties pursuant to statute, should require (1) financial reporting that provides appropriate visibility into expenditures of both Government and private-sector funds and (2) provide for appropriate audit access (see section C5.12). AP4. APPENDIX 4 PROTECTION OF CERTAIN INFORMATION FROM DISCLOSURE AP4.1. SPECIFICALLY EXEMPTED INFORMATION Certain types of information submitted to the Department in a process having the potential for OT award are exempt from the disclosure requirements of 5 U.S.C. 552, the Freedom of Information Act (FOIA), for a period of five years from the date on which the Department receives the information. Specifically, 10 U.S.C. 2371(i), as amended, provides that the disclosure of this type of information is not required, and may not be compelled, under FOIA during that period if a party submits the information in a competitive or noncompetitive process that has the potential for OT award. Such information includes the following: (i) A proposal, proposal abstract, and supporting documents. (ii) A business plan submitted on a confidential basis. (iii) Technical information submitted on a confidential basis. AP4.2. NOTICE TO OFFERORS The Agreements Officer should include in solicitations, a notice to offerors regarding FOIA disclosure. Such a notice should require potential offerors to mark business plans and technical information that are to be protected for five years from FOIA disclosure with a legend identifying the documents as confidential. AP4.3. GENERALLY EXEMPT INFORMATION The types of information listed above may continue to be exempt from disclosure, in whole or in part, after the expiration of the five-year period if the information falls within an exemption to the FOIA. Examples are privileged or confidential trade secrets and commercial or financial information. AP5. APPENDIX 5 ACQUISITION STRATEGY CONSIDERATIONS AP5.1. KEY AREAS As a minimum, an acquisition strategy for a prototype project should generally address the following areas. If a prototype project is covered by the DoD 5000.2-R, it must also comply with the acquisition strategy requirements specified therein. (NOTE: John recommends deletion, but need to confirm this with Barbara Glotfelty.) AP5.1.1. Consistency with Authority. A programmatic discussion of the effort that substantiates it is a prototype project directly relevant to weapons or weapon systems proposed to be acquired or developed by the DoD. AP5.1.2. Rationale for Selecting Other Transaction Authority. OT authority for prototype projects may be used only in those circumstances addressed in section C2.1.2. If appropriate, the strategy should provide for potential award of a contract in the event conditions do not support use of an OT. The acquisition strategy must identify and discuss the reason use of an OT is being proposed. If the use of OT authority is expected to attract nontraditional Defense contractors that will participate to a significant extent, the strategy should address how this will be accomplished. If cost-sharing is the reason, the strategy should explain the commercial or other perceived benefits to the non-Federal participants. If exceptional circumstances exist, those must be documented and approved as addressed in section C4.2. AP5.1.3. Technical description of the program. This section should discuss the programs major technical events and the planned testing schedule. AP5.1.4. Management description of the program. This section should discuss the projects management plan, including the program structure, composition of the government team, and the program schedule. AP5.1.5. Risk Assessment. This section should include a cost, technical and schedule risk assessment of the prototype project and plans for mitigating the risks. The risks inherent in the prototype project and the capability of the sources expected to compete should be factors in determining the nature and terms and conditions of the OT agreement. AP5.1.6. Competition. This section should address the expected sources or results of market research, the prototype source selection process, the nature and extent of the competition for the prototype project and any follow-on activities. During prototype planning, it is important to consider the extent and ability for competition on follow-on activities. For the prototype project, the team should consider using standard source selection procedures or devising a more streamlined approach that ensures a fair and unbiased selection process. A source selection authority should be identified. If competitive procedures are not used for the prototype project, or only a limited competition is conducted, the strategy should explain why. AP5.1.7. Nature of the agreement. There is not one type of OT agreement for prototype projects. This section should discuss the nature of the agreement (e.g., cost-reimbursement features, fixed-price features, or a hybrid), the way in which the price will be determined to be fair and reasonable, and the method for verifying compliance with the terms and conditions. The Agreements Officer is encouraged to consider whether the prototype project can be adequately defined to establish a fixed-price type of agreement. The precision with which the goals, performance objectives, and specifications for the work can be defined will largely determine whether a fixed-price can be established for the agreement. A fixed-price type of agreement should not be awarded unless (1) the project risk permits realistic pricing, and (2) the use of a fixed-price type of agreement permits an equitable and sensible allocation of project risk between the Government and the awardee. An agreement that provides only for best efforts or for milestone payments to be adjusted based on amounts generated from financial or cost records is not a fixed-price OT even if it identifies the Government funding as fixed. AP5.1.8. Terms and Conditions. This section should explain the key terms and conditions planned for the solicitation and generally should address protests, changes, termination, payments, audit requirements, disputes, reporting requirements, government property, intellectual property, technology restrictions (e.g., foreign access to technology), and flow-down considerations. Other important clauses that are unique to the project also should also be discussed here. The discussion should explain why the proposed terms and conditions provide adequate safeguards to the Government and are appropriate for the prototype project. AP5.1.9. Follow-On Activities. The acquisition strategy for a prototype project should address the strategy for any follow-on activities, if there are follow-on activities anticipated. The follow-on strategy could include addressing issues such as life cycle costs, sustainability, test and evaluation, intellectual property requirements, the ability to procure the follow-on activity under a traditional procurement contract, and future competition. AP6. APPENDIX 6 ACCOUNTING SYSTEM AP6.1. UNDERSTAND THE SYSTEMS CAPABILITY When structuring a cost-type OT agreement, it is important to understand the capability of a companys accounting system, to ensure that the system is capable of attributing amounts or costs to an individual agreement. AP6.1.1. The Agreements Officer should not enter into a cost-type OT agreement if the awardee does not have an accounting system capable of identify the amounts or costs to individual agreements or contracts. Identifying amounts or costs to individual agreements normally is accomplished through a job order cost accounting system. In such a system, the books and records segregate direct costs by agreement, and there is an established allocation method for equitably allocating indirect costs among agreements or contracts. However, any system that identifies direct costs to agreements or contracts and provides for an equitable allocation of indirect costs is acceptable. AP6.1.2. When the awardee has a system capable of identifying these amounts or costs, the agreement should utilize the awardee's existing accounting system to the maximum extent practical. The agreement should include a clause that documents the basis for determining the interim or actual amounts or costs (i.e., the identification of direct versus indirect costs and the basis for allocating indirect costs). Agreements imposing requirements that will cause an awardee to revise its existing accounting system are discouraged. AP6.1.3. When the business unit receiving the award is not performing any work subject to the Cost Principles (48 CFR Part 31) and/or the Cost Accounting Standards (CAS) (48 CFR Part 99) at the time of award, the Agreements Officer should structure the agreement to avoid incorporating the Cost Principles and/or CAS requirements, since such an incorporation may require the awardee to revise its existing accounting system. AP6.1.4. When the business unit receiving the award is performing work that is subject to the Cost Principles and/or CAS requirements, then the awardee will normally have an existing cost accounting system that complies with those requirements. In those cases, the Agreements Officer should consider including those requirements in the agreement unless the awardee can demonstrate that the costs of compliance outweigh the benefits (e.g., the awardee is no longer accepting any new CAS and/or FAR covered work, the agreement does not provide for reimbursement based on amounts/costs generated from the awardee's financial or cost records, the work will be performed under a separate accounting system from that used for the CAS/FAR covered work). AP6.2. DEFENSE CONTRACT AUDIT AGENCY The Defense Contract Audit Agency is available to provide information on the status of the awardees accounting system or to respond to any questions regarding accounting treatment to be used for the OT. AP7. APPENDIX 7 COMPTROLLER GENERAL ACCESS  Implementation of statutory requirements regarding Comptroller General access to records is codified in paragraph 3.7 of Part 3 of Section 32 of the Code of Federal Regulations, Subtitle A, Chapter 1. 3.7 Comptroller General Access (a) A clause must be included in solicitations and agreements for prototype projects awarded under authority of 10 U.S.C. 2371, that provide for total government payments in excess of $5,000,000 to allow Comptroller General access to records that directly pertain to such agreements. (b) The clause referenced in paragraph (a) of this section will not apply with respect to a party or entity, or subordinate element of a party or entity, that has not entered into any other contract, grant, cooperative agreement or other transaction agreement that provides for audit access by a government entity in the year prior to the date of the agreement. The clause must be included in all agreements described in paragraph (a) of this section in order to fully implement the law by covering those participating entities and their subordinate elements which have entered into prior agreements providing for Government audit access, and are therefore not exempt. The presence of the clause in an agreement will not operate to require Comptroller General access to records from any party or participating entity, or subordinate element of a party or participating entity, which is otherwise exempt under the terms of the clause and the law. (c)(1) The right provided to the Comptroller General in a clause of an agreement under paragraph (a) of this part, is limited as provided by subparagraph (c)(2) of this part in the case of a party to the agreement, an entity that participates in the performance of the agreement, or a subordinate element of that party or entity, if the only cooperative agreements or "other transactions" that the party, entity, or subordinate element entered into with government entities in the year prior to the date of that agreement are cooperative agreements or transactions that were entered into under 10 U.S.C. 2371 or Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Pub.L. 103-160; 10 U.S.C. 2371 note). (c)(2) The only records of a party, other entity, or subordinate element referred to in subparagraph (c)(1) of this part that the Comptroller General may examine in the exercise of the right referred to in that subparagraph, are records of the same type as the records that the government has had the right to examine under the audit access clauses of the previous cooperative agreements or transactions referred to in such subparagraph that were entered into by that particular party, entity, or subordinate element. (d) The head of the contracting activity (HCA) that is carrying out the agreement may waive the applicability of the Comptroller General access requirement if the HCA determines it would not be in the public interest to apply the requirement to the agreement. The waiver will be effective with respect to the agreement only if the HCA transmits a notification of the waiver to the Committees on Armed Services of the Senate and the House of Representatives, the Comptroller General, and the Director, Defense Procurement and Acquisition Policy before entering into the agreement. The notification must include the rationale for the determination.  (e) The HCA must notify the Director, Defense Procurement and Acquisition Policy of situations where there is evidence that the Comptroller General Access requirement caused companies to refuse to participate or otherwise restricted the Departments access to companies that typically do not do business with the Department. (f) In no case will the requirement to examine records under the clause referenced in paragraph (a) of this section apply to an agreement where more than three years have passed after final payment is made by the government under such an agreement. (g) The clause referenced in paragraph (a) of this section, must provide for the following: (1) The Comptroller General of the United States, in the discretion of the Comptroller General, shall have access to and the right to examine records of any party to the agreement or any entity that participates in the performance of this agreement that directly pertain to, and involve transactions relating to, the agreement. (2) Excepted from the Comptroller General access requirement is any party to this agreement or any entity that participates in the performance of the agreement, or any subordinate element of such party or entity, that, in the year prior to the date of the agreement, has not entered into any other contract, grant, cooperative agreement, or other transaction agreement that provides for audit access to its records by a government entity. (3)(A) The right provided to the Comptroller General is limited as provided in subparagraph (B) in the case of a party to the agreement, any entity that participates in the performance of the agreement, or a subordinate element of that party or entity if the only cooperative agreements or "other transactions" that the party, entity, or subordinate element entered into with government entities in the year prior to the date of that agreement are cooperative agreements or transactions that were entered into under 10 U.S.C. 2371 or Section 845 of the National Defense Authorization Act for Fiscal Year 1994 (Pub.L. 103-160; 10 U.S.C. 2371 note). (B) The only records of a party, other entity, or subordinate element referred to in subparagraph (A) that the Comptroller General may examine in the exercise of the right referred to in that subparagraph are records of the same type as the records that the government has had the right to examine under the audit access clauses of the previous agreements or transactions referred to in such subparagraph that were entered into by that particular party, entity, or subordinate element. (4) This clause shall not be construed to require any party or entity, or any subordinate element of such party or entity, that participates in the performance of the agreement, to create or maintain any record that is not otherwise maintained in the ordinary course of business or pursuant to a provision of law. (5) The Comptroller General shall have access to the records described in this clause until three years after the date the final payment is made by the United States under this agreement. (6) The recipient of the agreement shall flow down this provision to any entity that participates in the performance of the agreement. AP8. APPENDIX 8 DOD ACCESS TO RECORDS POLICY. Implementation of DoD access to records policy is codified in paragraph 3.8 of Part 3 of Section 32 of the Code of Federal Regulations, Subtitle A, Chapter 1. TBD AP9. APPENDIX 9 PAYMENT CONSIDERATIONS AP9.1. GENERAL The Agreements Officer should consider the following when drafting payment clauses. AP9.1.1. Are payments based on amounts generated from the awardee's financial or cost records? AP9.1.2. Are the payment amounts subject to adjustment during the period of performance? AP9.1.3. If the payments can be adjusted, what are the basis and process for the adjustment? AP9.1.4. What are the conditions and procedures for final payment and agreement close-out? AP9.1.5. Will an interim or final audit of costs be needed? AP9.2. PAYABLE MILESTONES There is no single uniform clause or set of procedures for payable milestones. Payable milestone procedures vary, depending on the inherent nature of the agreement. AP9.2.1. Fixed Payable Milestones. Fixed payable milestones are the preferred form of payable milestone. Agreements with fixed-price characteristics may contain payable milestone clauses that do not provide for adjustment based on amounts generated from the awardees financial or cost records. In that case, this fact should be clear in the agreement, and the negotiated payable milestone values should be commensurate with the estimated value of the milestone events. AP9.2.2. Adjustable Payable Milestones. Alternatively, agreements may provide for payable milestones to be adjusted based on amounts generated from the awardee's financial or cost records. When this is the case, the agreement must address the procedures for adjusting the payable milestones and consider the accounting system guidance in Appendix 6. . Payable milestones should be adjusted as soon as it is reasonably evident that adjustment is required under the terms of the agreement. AP9.3. ADVANCE PAYMENTS Generally, the government should avoid making advance payments to an OT awardee. AP9.3.1. Requirement to Establish an Interest Bearing Account. If advance payments are agreed to, the agreement should require the OT awardee to maintain funds in an interest-bearing account unless one of the following applies: AP9.3.1.1. The OT awardee receives less than $120,000 in Federal awards per year; AP9.3.1.2. The best reasonably available interest-bearing account would not expect to earn interest in excess of $250 per year on such cash advances; AP9.3.1.3. The depository would require an average or minimum balance so high that it would not be feasible within the expected cash resources for the project; or AP9.3.1.4. The advance payments are made once to reduce financing costs for large, up-front expenditures, and the funds will not remain in the awardee's account for any significant period of time. AP9.3.2. Interest Earned. The interest earned should be remitted annually to the Administrative Agreements Officer. The Administrative Agreements Officer must forward the funds to the responsible payment officer, for return to the Department of the Treasurys miscellaneous receipts accounts. AP9.4. PROVISIONAL INDIRECT RATES ON INTERIM PAYMENTS When the agreement provides for interim payment based on amounts generated from the awardee's financial or cost records, any indirect rates used for the purpose of that interim payment should be no higher than the awardee's provisionally approved indirect rates (when such rates are available). AP10. APPENDIX 10 INTELLECTUAL PROPERTY CONSIDERATIONS AP10.1. INTELLECTUAL PROPERTY AP10.1.1. IP refers to rights governed by a variety of different laws, such as patent, copyright, trademark, and trade secret laws. Due to the complexity of IP law and the critical role of IP created under prototype projects, the Agreements Officers, in conjunction with the Program Manager, should obtain the assistance of IP counsel as early as possible in the acquisition process. AP10.1.2. The Agreements Officer should assess the impact of intellectual property rights on the governments total life cycle cost of the technology, both in costs attributable to royalties from required licenses, and in costs associated with the inability to obtain competition for the future production, maintenance, upgrade, and modification of prototype technology. In addition, insufficient intellectual property rights hinder the government's ability to adapt the developed technology for use outside the initial scope of the prototype project. Conversely, where the government overestimates the intellectual property rights it will need, the government might pay for unused rights and dissuade new business units from entering into an Agreement. Bearing this in mind, the Agreements Officer should carefully assess the intellectual property needs of the government. The Agreements Officer should recognize that companies invest in research and development based on an expectation of a reasonable return on that investment through future sales. A key element in this strategy is the companys ability to protect and exploit its IP rights in the developed technology. Accordingly, the Agreements Officer should focus on obtaining the minimum IP rights that are necessary to protect Governments interests. AP10.1.3. The negotiated IP clauses should facilitate the acquisition strategy, including any likely production and follow-on support of the prototyped item. Further, the clauses should balance the relative investments and risks borne by the parties both in past development of the technology and in future development and maintenance of the technology. Also, the Agreements Officer should consider the effect of other forms of intellectual property (e.g., trademarks and registered vessel hulls) that may impact the acquisition strategy for the technology. AP10.1.4. The Agreements Officer should ensure that the disputes clause included in the agreement can accommodate specialized disputes arising under the IP clauses. Such disputes might include the exercise of IP march-in rights or the validation of restrictions on technical data or computer software. AP10.1.5. The Agreements Officer should consider how the IP clauses applicable to the awardee flow down to others, including whether to allow others to submit any applicable IP licenses directly to the Government. AP10.1.6. Where the acquisition strategy relies on the commercial marketplace to produce, maintain, modify, or upgrade the technology, there may be a reduced need for IP rights for those purposes. However, since the Government tends to use technology well past the norm in the commercial marketplace, the Agreements Officer should plan for maintenance and support of fielded prototype technology when the technology is no longer supported by the commercial market. For example, the agreement could provide the Government with additional IP rights that arise only when the technology is no longer being supported commercially, or could require the contractor to license the technology and related know how to other companies who are willing to provide continued support. AP10.1.7. In certain circumstances, the Agreements Officer must restrict awardees from licensing, to domestic or foreign firms, technology developed under an OT agreement. Such licensing should be restricted if it would unreasonably hinder potential domestic manufacture or use of the technology. In addition, the Agreements Officer must be aware that export restrictions prohibit awardees from disclosing or licensing certain technology to foreign firms. AP10.1.8. The Agreements Officer should consider including in the IP clauses any additional rights available to the Government in the case of inability or refusal of the private party or consortium to continue to perform the OT agreement. It may also be appropriate to consider negotiating time periods after which the Government will automatically obtain greater rights (for example, if the original negotiated rights limited the Governments rights for a specified period of time to permit commercialization of the technology). AP10.2. RIGHTS IN INVENTIONS AND PATENTS AP10.2.1. The Agreements Officer should negotiate a patents rights clause necessary to accomplish program objectives and foster the Governments interest. In determining what represents a reasonable arrangement under the circumstances, the Agreements Officer should consider the Governments needs for patents and patent rights to use the developed technology, as well as other IP rights that could be needed if the agreement provides for trade secret protection instead of patent protection. AP10.2.1.2. The agreement should address the following issues: definitions; allocation of rights; march-in rights; disclosure/tracking procedures;an option for trade secret protection; and additional considerations such as authorization and consent, indemnity, and notice and assistance. AP10.2.1.1. Definitions. It is important to define all essential terms in the patent rights clauses. The Agreements Officer should consider defining a subject invention to include those inventions conceived or first actually reduced to practice under the OT agreement. AP10.2.1.2. Allocation of Rights. The Agreements Officer should consider allowing the participant to retain ownership of the subject invention while reserving, for the Government, a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced (for or on behalf of the United States) the subject invention throughout the world only for Government purposes. In addition, the agreement should address the Governments rights in background inventions (i.e., inventions created prior to or outside the agreement) that are incorporated into the prototype design and may therefore affect the Governments life-cycle cost for the technology. AP10.2.1.3. March-in Rights. The Agreements Officer should consider negotiating Government march-in rights in order to encourage further commercialization of the technology. While the march-in rights outlined in the Bayh-Dole Act may be modified to best meet the needs of the program, only in rare circumstances should these rights be entirely removed. AP10.2.1.4. Disclosure/Tracking Procedures. The Agreements Officer may consider changing the timing of submission of the disclosures, elections of title, and patent applications. AP10.2.1.5. Option for Trade Secret Protection. The Agreements Officer may consider allowing subject inventions to remain trade secrets as long as the Governments interest in the continued use of the technology is protected. In making this evaluation, the Agreements Officer should consider whether allowing the technology to remain a trade secret creates an unacceptable risk of a third party patenting the same technology; the Governments right to utilize this technology with third parties; and whether there are available means to mitigate these risks outside of requiring patent protection. AP10.2.1.6. Additional Considerations. The Agreements Officer should consider whether it is appropriate to include clauses that address authorization and consent, notice and assistance, and indemnity. AP10.2.1.6.1. Authorization and Consent. Authorization and consent policies provide that work by an awardee will not be stopped from its work by a court order, based on allegations of patent infringement (see 28 U.S.C. 1498). The Government's liability for damages in any such suit may, however, ultimately be borne by the awardee in accordance with the terms of a patent indemnity clause. The agreement should not include an authorization and consent clause when both complete performance and delivery are outside the United States, its possessions, and Puerto Rico. AP10.2.1.6.2. Notice and Assistance. Notice policy requires the awardee to notify the Agreements Officer of all claims of infringement (that come to the awardees attention) in connection with performing the agreement. Assistance policy requires the awardee, when requested, to assist the Government with any evidence and information in its possession in connection with any suit or claim against the Government that alleges patent or copyright infringement arising out of performance under the agreement. AP10.2.1.3. Indemnity. Indemnity clauses mitigate the Governments risk of cost increases caused by infringement of a third-party-owned patent. An indemnity clause may be appropriate if the supplies or services used in the prototype technology developed under the agreement normally are, or have been, sold or offered for sale to the public in the commercial open market, either with or without modifications. In addition, where trade secret protection is allowed in lieu of patent protection for patentable subject inventions, a perpetual patent indemnity clause might be considered as a mechanism for mitigating the risks described in AP10.2.1.6.1 above. The agreement should not include a clause in which the Government expressly agrees to indemnify the awardee against liability for infringement. AP10.3. RIGHTS IN TECHNICAL DATA AND COMPUTER SOFTWARE AP10.3.1. Definitions. As used in this section, Computer software means computer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae and related material that would enable the software to be reproduced, recreated, or recompiled. The term does not include computer data bases or computer software documentation. Computer software documentation means owners manuals, users manuals, installation instructions, operating instructions, and other similar items, regardless of storage medium, that explain the capabilities of the computer software or provide instructions for using the software. Technical data is any sort of recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information. AP10.3.2. Technical Data Rights and Computer Software Rights. The terms technical data rights and computer software rights refer to a combined copyright, know-how, and/or trade secret license that defines the Governments ability to use, reproduce, modify, release, and disclose technical data and computer software. The focus of license negotiations often centers around the Governments ability to release or disclose outside the Government. Computer software licenses require additional consideration because restrictions may impact the Governments use, maintenance, and upgrade of computer software used as an operational element of the prototype technology. AP10.3.3. Agreement Issues. The Agreement should address the following issues regarding these rights: definitions, allocation of rights, delivery requirements, restrictive legends, special circumstances, and commercial technical data and commercial computer software. AP10.3.3.1. Definitions. The Agreements Officer should ensure that all essential terms are defined, including all classes of technical data and computer software, and all categories of applicable license rights. When they are used in an agreement for prototype technology that is likely to be produced, maintained, or upgraded using traditional procurement instruments, standard terms such as technical data, computer software, and computer software documentation must have the same definition as they have in the DFARS, in order to prevent confusion. AP10.3.3.2. Allocation of Rights. The agreement must explicitly address the Governments rights to use, modify, reproduce, release, and disclose the relevant technical data and computer software. The Government should receive rights in all technical data and computer software that is developed under the agreement, regardless of whether it is delivered. In addition, the Government should receive rights in all delivered technical data and computer software, regardless of whether it was developed under the agreement. AP10.3.3.3. Delivery Requirements. While not necessarily required to secure the Governments rights in the technical data and computer software, if the delivery of technical data, computer software, or computer software documentation is necessary, the Agreements Officer should consider the delivery medium and, for computer software, whether that includes both executable and source code. In addition, the Agreements Officer should consider including an identification list of the technical data and computer software to be delivered and the restrictions for such. AP10.3.3.4. Restrictive Legends. The Agreements Officer should ensure that the OT agreement requires descriptive, restrictive markings to be placed on delivered technical data and computer software for which the Government is granted less than unlimited rights. The agreement should address the content and placement of the legends, with special care to avoid confusion between the classes of data defined by the agreement and the standard markings prescribed by the DFARS. In addition, the agreement should presume that all technical data and computer software delivered without these legends is delivered with unlimited rights. AP10.3.3.5. Special Circumstances. The agreement should account for certain emergency or special circumstances in which the Government may need additional rights, such as the need to disclose technical data or computer software for emergency repair or overhaul. AP10.3.3.6. The Agreements Officer should also account for commercial technical data and commercial computer software incorporated into the prototype. The Government typically does not require commercial technical data and software rights that are as extensive as those for non-commercial technical data and software. However, depending on the acquisition strategy, the Government may need to negotiate for greater rights in order to utilize the developed technology. AP11. APPENDIX 11 ANNUAL REPORT TO CONGRESS This Appendix explains the format for the submission of data: Format Part I, Individual Inputs for Report to Congress Format Part II, Summary of Prior Year Agreements with Funds Recouped During the Current Fiscal Year Guidelines to Assist in Answering Part I Questions Format Part III, Use of Independent Public Accountants pursuant to OT Guide, Appendix 7. EXPLANATION OF THE FORMAT FOR SUBMISSION OF DATA FOR REPORTS TO CONGRESS Part I: Title 10, U.S.C. 2371(h) requires a report be submitted to Congress each year by December 31st for awards made in the preceding fiscal year, pursuant to this authority. This includes, for prototype projects that use this authority, all initial awards, new prototype projects added to existing agreements, and options exercised or new phases awarded. Individual agreement summaries should not exceed 2 pages. Formatted examples are available electronically at  HYPERLINK http://www.acq.osd.mil/dp http://www.acq.osd.mil/dp (under Defense Systems Procurement Strategies) and have all the settings properly implemented. Format settings are described below for clarification. Each agency should compile all Part I individual reports on prototype projects into one Microsoft Word document, with page breaks separating each prototype project. Page settings: Use portrait orientation. Set right, left, top and bottom margins at 1.0 inch; and set header and footer aat .5 inch from edge. Use 10 pitch Times New Roman for all text. Header and Footer: Content is preset. Do not change these. Body of Each Report: Part I will be the individual report submissions. For this part: Headings will be preceded by a blank line, terminate with a colon and be in bold. Apply Title Case (each key word starts with a capital) to data text of the following headings: Type of Transaction, Title, Awarding Office, and Awardee. Text data for all other heading will be in sentence case. Put two spaces between the heading colon and the data that is entered. The data entry for each heading is not to be bolded or italicized. Be sure to delete the italicized instruction/informational content provided within the sample. Data for the following headings should be on the same line as the heading: Agreement Number, Type of Agreement, Title, Awarding Office, Awardee (do not include the awardees address or locale unless needed for differentiation, i.e. University of California, Irvine), Effective Date, Estimated Completion or Expiration Date, U.S. Government Dollars, Non-Government Dollars, Dollars returned to Government Account. If additional lines are needed, indent the subsequent line(s) of text to meet the beginning point for prior line of data entry. Dollar fields should be in whole dollars without cents (not in $K) and every heading should have an entry even if its $ 0. Put one space between the $ and the first numeral. Data entry for the following fields will be on the line immediately after the heading and will not be indented: Technical Objectives , both Extent to which questions, and the Other Benefits question. Part II: Any Prototype Other Transactions that were reported in previous year Congressional reports that recouped funds during this reporting year are to be listed in a separate table. Provide the Agreement Number, Year the agreement was entered into and the amount of the recoupment. Each agency should submit one word document for all Part II prototype reported. PART I SAMPLE REPORT FORMAT (Delete this title in your submission, as well as all italicized instructions below.) Agreement Number: XXXXX-XX-X-XXXX (The ninth position of all prototype OTs will be coded "9".) Type of Agreement: Other Transaction for Prototype Title: Next Generation Electrical Architecture (provide a short title describing the research or prototype project) Awarding Office: US Army Tank-Automotive and Armaments Command (TACOM), AMSTA-CM-CLGC (identify the military department or defense agency and the buying office) Awardee: Boom Electronics, Inc. (entry is in Title Case do not use address) Effective Date: 29 Sep 1999 (entry is ## Aaa ####) Estimated Completion or Expiration Date: 30 Sep 2001 U. S. Government Dollars: $ 2,285,000 (entry is $ ###,### - If zero use $ 0 - identify the total dollar value of expected government contributions to the agreement) NonGovernment Dollars: $ 2,665,000 (identify the total dollar value of expected non-government contributions to the agreement - if the reason authority is used is cost-sharing, then this amount must represent one third of the total dollars) Dollars Returned to Government Account: $ 0 (identify the amount of any payments made to the federal government in accordance with 10 U.S.C. 2371(d)) Technical objectives of this effort including the technology areas in which the project was conducted: The technical objectives of this effort (describe the technical objectives and the technology areas being proven by the agreement). Extent to which the cooperative agreement or other transaction has contributed to a broadening of the technology and industrial base available for meeting Department of Defense needs: The use of an other transaction agreement has (Discuss how the use of an other transaction agreement has contributed to a broadening of the technology and industrial base available for meeting DoD needs. The Guidelines in this Appendix can assist you in responding to this question. If the reason OTA is used is because non-traditional defense contractors are participating to a significant extent, then the answer to this question shall identify who these non-traditional defense contractors are, what significant contribution they are making, and address how the use of OT agreement facilitated their participation.) Extent to which the cooperative agreement or other transaction has fostered within the technology and industrial base new relationships and practices that support the national security of the USA: The use of an other transaction agreement has (Discuss how the use of an other transaction agreement has fostered new business relationships or practices that support the national security of the United States. Again, the Guidelines in this Appendix can assist you in responding to this question. If the reason OTA is used is based on cost-sharing or exceptional circumstances, that reason shall be explicitly stated in answering this question and explained fully as discussed in the Guidelines to this Appendix.) Other benefits to the DOD through use of this agreement: The use of an other transaction has resulted in additional benefits, not addressed above (This is an optional field that can be completed if there are other benefits that warrant reporting beyond those addressed above. If there are no other benefits to be reported, then delete this header in your report submission.) PART II SAMPLE REPORT FORMAT (Delete this title in your submission, as well as all examples shown in the table below.) Funds recouped during FY XXXX (Fill in the appropriate fiscal year) Agreement number: Fiscal Year of Agreement: Dollar amount returned in FY XXXX N66604-99-9-30061999$20,000MDA972-95-9-00511995$8,675Total:$28,675 GUIDELINES TO ASSIST IN ANSWERING PART I QUESTIONS Extent the other transaction has contributed to a broadening of the technology and industrial base available for meeting DoD needs: (Focus on how the use of an OT makes a difference. Consider the following questions:) ( Did the use of the OT result in nontraditional defense contractors participating to a significant extent in the prototype project that would not otherwise have participated in the project? If so: ( Identify the nontraditional defense contractors and explain why they would not typically participate if a procurement contract was used? For example, are they business units that normally accept no business with the government, that do business only through OTs or contracts for commercial items, or that limit their volume of Federal contracts to avoid a threshold at which they would have to comply with cost accounting standards or some other Government requirement? ( Did provisions of the OT or features of the award process enable their participation? If so, explain specifically what they were. ( What significant contributions are expected as a result of the nontraditional Defense contractor's participation (e.g., supplying new key technology or products, accomplishing a significant amount of the effort, or in some other way causing a material reduction in the cost or schedule or increase in performance. Explain specifically how this contributes to a broadening of the technology and industrial base available to DoD. ( Did the DoD gain access to technology areas or commercial products that would not be possible under a procurement contract? If so, identify these areas and explain how the use of the OT facilitated the access. ( Are there any other benefits from using the OT that you perceive helped to broaden the technology or industrial base available to the DoD? If so, what were they, how do they help meet Defense objectives, what features of the OT or award process enabled them and why could they not have been realized using a procurement contract? Be specific. Extent the other transaction has fostered within the technology and industrial base new relationships and practices that support the national security of the United States: (Focus on what is different and attributed to the use anOT.) ( Was OT authority used in a circumstance where at least one-third of the total funds of the prototype project are provided by the non-Federal parties to the agreement? If so, state that this was the reason the authority was used and identify the percentage of funds being provided by non-Federal parties to the agreement. Was the decision to use OT authority based on an SPE determination that exceptional circumstances justify the use of an OT to provide for innovative business arrangements or structures that would not be feasible or appropriate under a procurement contract? If so, state this is the reason the authority was used, fully describe the innovative business arrangements or structures and their associated benefits, and explain why they would not be feasible or appropriate under a procurement contract. Did the use of the OT result in the establishment of new relationships between the Government and industry, among for-profit business units, among business units of the same firm, or between business units and nonprofit performers that will help the DoD acquire better technology in the future? If so: ( Explain the nature of the new relationships. ( Explain why it is believed that these new relationships will help the DoD get better technology in the future. ( Did provisions of the OT or features of the award process enable the creation of the new relationships? If so, describe those features and explain why the relationships could not have been created using a procurement contract. ( Did the use of the OT permit traditional Government contractors to use new business practices in the execution of the prototype project that will help DoD get better technology, get new technology more quickly, or get technology less expensively? If so: ( Who are those contractors and what are the new business practices? ( What benefits are expected from the use of these new practices? ( Did provisions of the OT or features of the award process enable the use of these new practices? If so, what are they and why could these practices not have been used if the award had been made using a procurement contract? Other benefits to the DoD of the use of this agreement: (Are any other benefits associated with the use of the OT beyond those addressed in the previous questions? If so:) What are those benefits, and how will they help meet Defense objectives? Are there provisions of the OT or features of the award process that attributed to these benefits? If so, what are they and why could these benefits not have been achieved with a procurement contract? Can the benefits directly attributed to the use of the OT authority be quantified? PART III SAMPLE FORMAT NEED TO CHANGE FOR FINAL AUDIT POLICY Agreement Number: XXXXX-XX-X-XXXX (The ninth position of all prototype OTs will be coded "9".) Title: Next Generation Electrical Architecture (provide a short title describing the research or prototype project) Awarding Office: US Army Tank-Automotive and Armaments Command (TACOM), AMSTA-CM-CLGC (identify the military department or defense agency and the buying office) Agreements Officer: John Doe (provide the name of the Agreements Officer) Phone Number: xxx-xxx-xxxx (provide the commercial phone number for the Agreements Officer) Business units that are not currently performing on procurement contracts subject to the Cost Principles (48 CFR Part 31) or Cost Accounting Standards (48 CFR Part 99) and will not accept an agreement that provides for government access to its records. (See Appendix 7 for information on audit policy.. Include the following information on each business unit that has been permitted to use an Independent Public Accountant for any needed audits.) Business Unit Name: ABC Company Business Unit Address: 2000 Commercial Plaza Houston, TX XXXXX Estimated Amount of this Business Units Efforts: $  AP12. APPENDIX 12 INSTRUCTIONS FOR DD FORM 2759 REPORTING The DD 2759 dated Oct 1997 is superceded by the DD 2759 dated Dec 2000 and should no longer be used. The new DD 2759 should be used for prototype projects awarded prior to Fiscal Year (FY) 2001 that report additional obligations, but the new data fields (Data Elements 14 and 36) need not be completed. Each military department and Defense agency must collect the common data elements for every Section 845 OT obligation or deobligation in accordance with the instructions specified herein. The awarding office must collect the data for covered actions issued on its behalf by the contract administration office. This information must be collected at the time of the obligation or deobligation and submitted to the agency POC within 10 days of the agreement action. DD Form 2759TEST has been developed to collect this information. The Directorate for Information Operations and Reports (DIOR) is the focal point for establishing a central unclassified database. Until this is accomplished, the information must be forwarded to the agency POC in hard copy or electronic format, in accordance with agency procedures. A copy must also be submitted to the DIOR. Electronic submission is encouraged where possible. Data for special access programs that use this authority must be collected in accordance with current agency guidance on special access programs. Until an operational automated database is established, the agencies are to maintain key DD 2759 information in a Microsoft Excel spreadsheet. Most data elements are similar to DD Form 350 blocks, and the attached narrative includes a cross-reference to instructions in the Defense Federal Acquisition Regulation Supplement (DFARS) 253.204-70 in parentheses( ). To the extent the DD Form 350 instructions in the DFARS are applicable, they should be used to complete the data fields. Instructions are provided in brackets[ ] for new data elements or selection choices and for data elements where the DFARS instructions clearly are not applicable. If the obligation action is a funding action or other within scope change or for a prototype project, then only data elements 1-11, 13, 25-27 and 31-32 must be completed, provided the information that would be entered in the other data elements remains unchanged from previous submissions. If it becomes evident after award that additional nontraditional Defense contractors are participating to a significant extent in the prototype project, these new nontraditional Defense contractors should be updated on the next DD 2759 action. DIOR Address: Washington Headquarters Services Directorate of Information Operations and Reports (DIOR) Attn: Mr. Ray Morris, Suite 1204 703-604-4572 1215 Jefferson Davis Highway e-mail: morrisr@dior.whs.mil Arlington, VA 22202 Common Data Elements for Section 845 Other Transactions 1. Type of Report (A1) 0 Original 1 Cancelling 2 Correcting 2. Report Number (A2) 3. Contracting Office Code (A3) 4. Name of Contracting Office (A4) 5. Agreements Officer 5a. Name 5b. Commercial Telephone Number 6. Procurement Instrument Identification Number (B1A) [The PIIN should be assigned in accordance with DFARS 204.7001. The ninth position will be coded 9] 7. Modification Number (B2) Action Date (YYYYMMDD) (B3) Completion Date (YYYYMMDD) (B4) 10. DUNS Number (B5A) [Enter the 9-position Data Universal Numbering System (DUNS) number for the business unit receiving the award. This number is obtained from the awardee. If the agreement is awarded to a Consortium, a DUNS number identifying the consortium should be obtained from the awardee and entered here.] 11. Reserved. 12. Consortium Agreement Y Yes N No [Y should be selected if the agreement is awarded to a consortium where two or more companies share the responsibility for performance. N should be selected if the agreement is awarded to one awardee with overall responsibility for performance.] 13. Awardee Information [Enter information on the business unit receiving the award. If the agreement is awarded to a consortium that is not a legal entity, identify the lead company at the time of the reported action here and report on the lead company in data elements 15-18.] 13a. Name 13b. Address (Street, City, State, Zip Code) 13c. Type of Entity [Identify whether the awardee is either: 1 - Non-profit (e.g. Educational Institution, FFRDC, Government organizations, or other non-profit) 2 - Traditional contractor (i.e., not a nontraditional Defense contractor) 3 - Nontraditional defense contractor (see Block 36 and OT Guide Definitions in Appendix 1) 14. Significant Nontraditional Defense Contractors. [Use a separate sheet of bond paper if necessary. Enter all nontraditional Defense contractors that participate to a significant extent in the prototype project (see Block 36 and OT Guide, section C2.3.4 and Appendix 1). Update this block if other nontraditional Defense contractors that participate to a significant extent are identified during performance.] 14a. Name 14b. Address (Street, City, State, Zip Code) 15. Awardee Type of Business (D1A) A Small Disadvantaged Business Performing in U.S. B Other Small Business Performing in U.S. C Large Business Performing in U.S. L Foreign Concern/Entity M Domestic Firm Performing Outside U.S. T Historically Black Colleges & Universities U Minority Institutions V Other Educational Z Other Nonprofit 16. Other Business Type 16a. Woman-Owned Business (D1B) Y Yes N No U Unknown 16b. Veteran-Owned Small Business (D1E) A Service-Disabled Veteran; or B Other Veteran 17. TIN (Taxpayer Identification Number)(B5F) 18. Parent TIN (B5G) 19. Parent Name (B5H) 20. Principal place of performance 20a. City or Place Code (B6A) 20b. State or Country Code (B6B) 20c. City or Place and State or Country Name (B6C) 21. Place of Manufacture (C13A) A U.S. B Foreign 22. Country of Origin Code (C13B) 23. Prototype Project 23a. Name [Provide a five word name of the project.] 23b. COSSI Y Yes N No [Answer Y if the project is awarded as a result of the Commercial Operations & Support Savings Initiative (COSSI); if not, answer N.] 24. Principal Product or Service 24a. FSC or SVC Code (B12A) 24b. DoD Claimant Program Code (B12B) 24c. Program, System or Equipment Code (B12C) 24d. SIC/NAICS Code (B12D) [Use the Standard Industrial Classification Code until it is replaced by the North American Industry Classification System Code.] 24e. Name/Description (B12E) 25. Type of Obligation (B7) 1 Obligation 2 Deobligation 26. Total Dollars (B8) [This refers to dollars obligated or deobligated by this action.] 27. Type of Action (B13-like) A Initial award B Out of scope change C Funding action D Within scope change [Select D for any within scope change not covered by other codes.] F Termination [Select F for a complete or partial termination, for whatever reason.] G Cancellation H Exercise of an Option 28. Credited Payments Y Yes N No [This is a statutorily required reporting element, if applicable. 10 U.S.C. 2371(d) allows an OT to require payment to the Department as a condition of receiving support under an OT and permits any such payment to be credited to support accounts (see OT Guide section C5.2). Enter Y if your agreement provides for such a condition.] 29. Type of Instrument (C5-like) J Fixed-Price Type of Agreement [See OT Guide, Appendix 1.] U Cost- Type of Agreement [See OT Guide, Appendix 1.] W Other [Select this code for hybrid or some other type of agreement.] 30. Financing (C12-like) A Progress Payments [Select A if a clause similar to FAR 52.232-16 is incorporated into the agreement.] D Unusual Progress Payments or Advance Payments [Select D if advance payments or progress payments other than A are incorporated into the agreement.] E Commercial Financing [Select E if the agreement provides for commercial-type financing payments.] F Payable Milestones [Select F if any form of milestone or performance-event payments are incorporated into the agreement.] Z Not Applicable [Select Z if none of the above codes apply (e.g., a cost-reimbursement agreement).] 31. Participant Cost-Share 31a. Amount [If a nontraditional Defense contractor is not participating to a significant extent in the prototype project and the OT authority is used because of a cost-sharing requirement (B in Block 36), the non-Federal cost share must be at least one-third of the total cost of the prototype project. If the agreement does not provide for cost sharing, report $0. If the agreement provides for participant cost-sharing, identify the total estimated amount or value of the participants cost-sharing.] 31b. Percentage (XX%) [If participant cost-sharing applies, identify the participants cost share percentage of the total agreement amount.] 32. Total Amount of Agreement [Identify the total value of the agreement, including Government and participant contributions. Do not include options that have not been exercised.] 33. Extent Competed (C3) A Competed Action [Select A if competitive procedures were used.] C Follow-on to Competed Action D Not Competed 34. Number of Offerors Solicited (C6) 1 One 2 More than One 35. Number of Offers Received (C7) 36. Reason Justifying Use of OTA A Nontraditional Defense contractor(s) [Select A if reason is based on the significant participation of at least one non-traditional defense contractor. If A is selected, Block 13C must be coded 3 or nontraditional Defense contractors must be identified in Block 14.] B Cost-Sharing [Select B if the reason is not coded A and is based on one-third of funds provided by non-Federal parties to the agreement. If B is selected, Block 31b must be at least 33%.] C SPE determination [Select C if the reason is not coded A and is based on SPE determination of exceptional circumstances.] [See OT Guide, Chapter C2, for further discussion regarding reasons for using OT authority for prototype projects.] Draft OT Guide Update Sep 2002 8845  PAGE 2 FOREWORD 8845  PAGE 4 TABLE OF CONTENT 8845  PAGE 5 INTRODUCTION 8845  PAGE 7 CHAPTER 1 8845  PAGE 11 CHAPTER 2 8845  PAGE 13 CHAPTER 3 8845  PAGE 15 CHAPTER 4 8845  PAGE 24 CHAPTER 5 8845 Draft OT Guide Update Sep 2002  PAGE \* MERGEFORMAT 27 CHAPTER 6 8845  PAGE \* MERGEFORMAT 29 APPENDIX 1 8845 Draft OT Guide Update Sep 2002  PAGE \* MERGEFORMAT 31 APPENDIX 2 8845  PAGE \* MERGEFORMAT 33 APPENDIX 3 8845  PAGE \* MERGEFORMAT 34 APPENDIX 4 8845  PAGE \* MERGEFORMAT 36 APPENDIX 5 8845 Draft OT Guide Update Sep 2002  PAGE \* MERGEFORMAT 38 APPENDIX 6 8845 57 APPENDIX 7 57 APPENDIX 8 57 APPENDIX 9 Draft OT Guide Update Sep 2002  PAGE \* MERGEFORMAT 49 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W!0WPrimary DatabasedBASECourier1Univers"CG TimesUnivers"CG Times111a 7'$7'` Y\KhC'c \?02JO2gJOdgjO02gvLOdg02gO2gJOdg02g`2UUTT2.IUUgU2 OT  O]P` gL,`MbF">;TVT()\KhC111&11,,1116c,,<X1a  hW7&WzhW&WzREPORT OF OTHER TRANSACTIONS FOR PROTOTYPE PROJECTS16cds,Xg1  (W&Wz(W&Wz1. TYPE OF REPORT"6_./$b4P'N&\_z_P'b (WPzTP!T'X!"6_./$b4P'N&\_z_P'b 1sRє,gI1  typerpt  RsdєIg1WIWzWWz0 Original 1 Cancelling 2 Correctingd6c)єX1  rptno W(WzW(Wz 2. REPORT NUMBER )6cєXv1 ctrcodeW&/WzW/Wz 3. CONTRACTING OFFICE CODE 6cєvX1  ctrofcname W#7WzW7Wz 4. NAME OF CONTRACTING OFFICE 1є)Z,1 >W|?Wz>W|?Wz5. AGREEMENTS OFFICER1Z)l,1  ofcrname *W6BGWz*WBGWz a. NAME (Last, First, Middle Initial) )є]l1  ofcrphone 2W5@OWz2W@OWz b. TELEPHONE (Include Area Code) ]єlY1  piin :WJ WzY Yes N No U Unknownc' 9*;Y0  projname Z WzZ Wz a. NAME ' 9*Y0  Wz Wzb. COSSI AI.9*Yw0  cossiy  .9*w0 Z Wz1Z WzY Yes N Noca0 Wz/Wz36. REASON JUSTIFYING USE OF OTAcp<0  justify  <p0WzrWzA Nontraditional Defense Contractor(s) B Cost-Sharing C SPE DeterminationOh+'0  8 D P \hpxINDEX FOR THEoNDEBK3K3K3 Normal.dotH OUSD(AT&L)H8SDMicrosoft Word 10.0@ @J@и @i?qMoSummaryInformation(Vq1TableGSummaryInformation( DocumentSummaryInformation8_̈XNKpUOh+'0q  $ 0 < H T`hphq|qq2Report of Other Transactions - Prototype Projects whs/dior287@F @@@@)jGo48D6 7 T  "2  "-%000000- -%00p0p`0`00-.- "Univers-- T2 L3REPORT OF OTHER TRANSACTIONS FOR PROTOTYPE PROJECTS               -`0``q`0q0-.- "Univers0-- "2 j51. TYPE OF REPORT.- -  U B  -%0pPpP00p- -pPpPP-.- "Univers---  2 wU0-- 2 w[ Original---  2 U1-- 2 [ Cancelling---  2 U2-- 2 [ Correcting.-  -%` ` `-.- -- !2 j2. REPORT NUMBER-.-  -% ``  `-.- -- 2 i%3. CONTRACTING-- 2 t% OFFICE CODE--.-  -%```-.- -- 42 j4. NAME OF CONTRACTING OFFICE- -%0  00-.- -- (2 55. AGREEMENTS OFFICER.-  -%0  00-.- -- 2 5 a. NAME"UniversZ-- 42 a (Last, First, Middle Initial)--.-  -%   -.- -- 2 % b. TELEPHONE--- +2 % (Include Area Code)--.-  -%-.- -- 2  6. PIIN-.-  -%-.- -- 2 7. MODIFICATION-- 2  NUMBER-.-  -%000-.- -- 2 58. ACTION DATE -- 2 (YYYYMMDD)"Univers--.-  -%-.- -- %2 9. COMPLETION DATE -- 2 F (YYYYMMDD)--.-  -%@@-.- -- 2 10. DUNS NUMBER-.-  -%@@@-.- -- 2 E11. CAGE-- 2 E CODE-.-  -%0  @0@0-.- -- 2 5 a. NAME- --.- -- 2 12. CONSORTIUM-- '2  AGREEMENT.-  -%- --.- ---  2 Y-- 2  Yes --  2  --  2 N--  2  No -P0P!P0a0-.- -- 12 Z515. AWARDEE TYPE OF BUSINESS .-  -%0`P`P00`- -PA-.- ---  2 hUA-- Q2 h\1 Small Disadvantaged Business Performing in U.S.---  2 sUB-- E2 s[) Other Small Business Performing in U.S.---  2 ~UC-- <2 ~[# Large Business Performing in U.S. ---  2 UL-- +2 Z Foreign Concern/Entity -@A-.- ---  2 ]EM-- B2 ]M' Domestic Firm Performing Outside U.S.---  2 hET -- I2 hQ,Historically Black Colleges and Universities--  2 h --  2 sEU -- '2 sRMinority Institutions----  2 ~EV-- $2 ~L Other Educational---  2 EZ-- !2 J Other Nonprofit.-  -%000-.- -- 2 517. TIN-.-  -%XX-.- -- 2 18. PARENT TIN-.-  -%XXX-.- -- 2 ]19. PARENT NAME- -0!0!00-.- -- :2 5"20. PRINCIPAL PLACE OF PERFORMANCE.-  -%000-.- -- *2 5 a. CITY OR PLACE CODE-.-  -%XX-.- -- +2 b. STATE OR COUNTRY CODE-.-  -%XXX-.- -- H2 ]+c. CITY OR PLACE AND STATE OR COUNTRY NAME- -000-.- -- +2 321. PLACE OF MANUFACTURE.-  -%0PP00- -PPP-.- ---  2 UA --  2 bU.S.---  2 UB -- 2 aForeign-.-  -%XX-.- -- (2 22. COUNTRY OF ORIGIN -- 2  CODE-- -XXX-.- -- '2 ]23. PROTOTYPE PROJECT -0y 0 y0!0-.- -- 72 5 24. PRINCIPAL PRODUCT OR SERVICE.-  -%0  P0P0 -.- -- 2 )5 a. FSC OR -- 2 45 SVC CODE--.-  -%  PP -.- -- 2 )b. DOD CLAIMANT-- !2 4 PROGRAM CODE--.-  -% X XPP -.- -- "2 )c. PROGRAM, SYSTEM -- !2 4OR EQUIPMENT CODE--.-  -%X  PXPX -.- -- "2 *]d. SIC/NAICS CODE--.-  -%  PP -.- -- %2 *e. NAME/DESCRIPTION- -P0PPqP0q0-.- -- 2 Y5 25. TYPE OF -- '2 d5 OBLIGATION.-  -%0`P`P00`- -hPhPP-.- ---  2 pU1 -- 2 pa Obligation---  2 {U2--  2 {[ -- 2 {a Deobligation.-  -%P P P-.- -- !2 Z26. TOTAL DOLLARS- -P PP a -.- -- "2 Z%27. TYPE OF ACTION.-  -% `@`@  `- -@-.- ---  2 gEA-- 2 gL Initial Award---  2 pEB-- '2 pK Out of Scope Change---  2 zEC-- 2 zK Funding Action -q-.- ---  2 [D-- '2 [ Within Scope Change --  2 eF-- 2 e Termination---  2 pG-- 2 p Cancellation---  2 {H-- *2 { Exercise of an Option -PpPPaPpap-.- -- '2 Zu28. CREDITED PAYMENTS.-  -%p``pp`- -``-.- ---  2 iY --  2 iYes---  2 uN --  2 uNo- -0!  00-.- -- (2 529. TYPE OF INSTRUMENT.-  -%0PP00- -P-.- ---  2 UJ-- 2 Z Fixed-Price --  2 Typ-- 2 e of Agreement---  2 UU -- *2 b Cost-Type of Agreement----  2 UW -- 2 ^ Other- - QPP  -.- -- 2 % 30. FINANCING.-  -% @@  - -@-.- ---  2 EA-- $2 L Progress Payments---  2 ED-- 42 L Unusual Progress Payments or-- '2 E Advance Payments -PPQ-.- ---  2 E -- %2 Commercial Financing---  2 F -- "2 Payable Milestones ---  2 Z -- 2 Not Applicable-.-  -%PPP-.- -- 2 U a. AMOUNT- -Q-.- -- $2 33. EXTENT COMPETED.-  -%- -Y-.- ---  2 A-- !2  Competed Action---  2 C -- (2 Follow-on to Competed -- 2  Action----  2 D-- 2  Not Competed -XXX-.- -- (2 [34. NUMBER OF OFFERORS-- %2 [ SOLICITED.-  -%XxxXX- -x-.- ---  2 }1 --  2 One---  2 }2 -- 2  More than One---.-  -%PP-.- -- 2  35. NUMBER OF-- '2  OFFERS RECEIVED---.- -- .2 5DD FORM 2759TEST, DEC 2000       -.-  -%000-.- -- 2 532. TOTAL AMOUNT-- $2 5 OF AGREEMENT-- -PPP-.- -- 02 U31. PARTICIPANT COST-SHARE .-  -%-.- -- 2  b. PERCENT-.-  -%p00`p`p0-.- -- *2 :u REPORT CONTROL SYMBOL-.- CG Times- - 2 KDD-AT&L(AR)2037    .- -  U B  -%000-.- -- *2 513. AWARDEE INFORMATION .- -  U B  -% @@@ @ -.- -- 2 % b. ADDRESS -- :2 b"(Street, City, State and ZIP Code)-- -@@@-.- -- "2 Ec. TYPE OF ENTITY.-  -%@ ` `@@@@ - -A@`@-.- ---  2 e1 -- 2 n - Non-Profit---  2 %e2 -- +2 %n- Traditional Contractor---  2 1e3-- -2 1k - Nontraditional Defense-- 2 =e Contractor -%0@@P0P0@-.- -- R2 J5214. SIGNIFICANT NONTRADITIONAL DEFENSE CONTRACTORS-- K2 JJ- (Continue on additional sheets if necessary)- -%0P P p0p0P-.- --- 2 d5 a. NAME- -% PPp p P-.- -- 2 d% b. ADDRESS -- :2 db"(Street, City, State and ZIP Code)-.-  -0 .-  -0 .-  -0 .-  -0 .-  -0 .-  -000 .-  -%0p p P0P0p-.-  - .-  - .-  - .-  - .-  - .-  -0 0.-  -% ppP P p--.- "Univers- - 32 PREVIOUS EDITION IS OBSOLETE. -PPPPPaP-.- -- +2 ZU16. WOMAN-OWNED BUSINESS  .-  -%P`p`pPP`- -`p`pp-.- ---  2 juY --  2 jYes---  2 xuN--  2 x| No---  2 uU-- 2 | Unknown-.-  -%XXX-.- -- 2 ] a. NAME- -%-.- -- 2  b. COSSI-.-  -%- --.- ---  2 Y -- 2 Yes --  2 N--  2  --  2 No- -PPP-.- -- 32 U36. 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INDEX FOR THE Title P@H\| _PID_HLINKS_AdHocReviewCycleID_EmailSubject _AuthorEmail_AuthorEmailDisplayName_PreviousAdHocReviewCycleID_ReviewingToolsShownOnceA$Uhttp://www.acq.osd.mil/dpe 7http://alerts.dcmdw.dcma.mil/srk/owa/alerts.catlocatorQJ http://www.dcmc.mil/K-http://www.acq.osd.mil/dp/dsps/ot/dspsot.htmp~,http://www.acq.osd.mil/ar/dpc/intelprop.pdfK-http://www.acq.osd.mil/dp/dsps/ot/dspsot.htmɼ Instr/GuideTeresa.Brooks@osd.milceBrooks, Teresa, Ms, OSD-ATL{rooQJo(HwQ/YWYKJ:HrqnkI{}j# [2tD~jD@R @+t?Hd@4H[]l||:- V`9smo!V>4L CS: gaI5 C~wq!)lNv0h)[yVvp =irG to! sY'R5^:(*l !~k|+z0dK 6F]bf$DGS#M4O:BS L-!9FzgV_Qo 8go}JKNOj 2-vi9&rw<4K\u$ksBb'Z$|JK-jEA-Ahp?- WA|z|E.&fe,DO,;glC#PG\@ ~2"Sf"-Ub9 'RWa hVJtk+f'Xr ,w1OLL,XossZpGAPCs~wB^ A U%[",V+iC6=}mtCtYx}] BPbNp~A :lw/u&T2;PA*kJX_GIfpE}"9-9pJ&`U^mSM7@^f0B*X&ypO4'(&_}td\p>G*7~ lx4 d6;[r$Z 2} "{: 6q\RH[Y mnJ*cDmc'stjn=T:nngK`V XA ?Z{g85&3! e'A*`S@h h^h`OJQJo(@9* @hh^h`CJOJQJo(Z. 9"yK_4 ? @ A B C D E F G H I J K L M N O P Q R S T U V W X Y Z [ \ ] ^ _ ` a b c d e f g h i j k l m n o p q r s t u v w x y z { | } ~  CompObj(j  FMicrosoft Word Document MSWordDocWord.Document.89q