FY03CA_OTReporttoCongress-OfficeoftheUnderSecretaryof.doc

Department of Defense Annual Report on Cooperative Agreements and Other Transactions Entered into During FY2003 Under 10 USC 2371 INTRODUCTION This report is provided in accordance with 10 U.S.C. 2371(h) which requires the Secretary of Defense to submit a report annually to the Senate Committee on Armed Services and the House of Representatives Committee on Armed Services on all those transactions entered into under 10 U.S.C. 2371(a) which are not categorized as contracts, cooperative agreements or grants (hereafter referred to as “other transactions”) and all cooperative agreements entered into under 10 U.S.C. 2358 which include a section 2371 authorized clause requiring “Recovery of Funds”. The Secretary of Defense and the Secretary of each military department are authorized by section 2371 to enter into other transactions to carry out basic, applied, and advanced research projects. That same authority also permits certain transactions to include a clause requiring a person or other entity to make repayments of funds to the Department of Defense or any other department or agency of the Federal Government as a condition for receiving support under the agreement or other transaction. The authority of 10 U.S.C. 2371 was extended by Section 845 of Public Law 103-160, as amended, to permit the Director, Defense Advanced Research Projects Agency (DARPA), the Secretary of a military department, and any other official designated by the Secretary of Defense, to enter into other transactions to carry out prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department of Defense. The amounts reported for non-government dollars for research and prototype projects include research and development investments made by for-profit firms. It is standard business practice for all for-profit firms to recover research and development investments through prices charged to their commercial and Government custome