That depends on the authority that was granted to the agency. For example, the following rules apply for DOD OTs for prototypes.
- At least one non-traditional defense contractor (NTDC) must be a participant to a significant extent; OR
- All significant participants in the transactions other the Federal Government are small businesses or NTDCs; OR
- At least one-third of the total cost is paid from parties to the transaction with non-federal funds NOT incurred prior to OT award; OR
- Agency’s senior procurement executive justifies exceptional circumstances for an innovative business arrangement, or to expand the defense supply base in a manner that would not be practical or feasible under a contract.
The authority granted to the Department of Homeland Security (DHS) authorizes the use of OTs for RD&D and prototypes and also contains similar participation requirements of an NTDC. However, DHS’s authority does not limit the types of prototype projects that may be conducted using OT agreements.