To maintain its technological edge, the Army spent approximately $1 billion in FY96 in basic exploratory development and advanced development research. Despite this outlay of money, the Army is facing constraints in maintaining its technological edge. The study examined promising options for the Army to consider in conducting collaborative research with nontraditional suppliers (NTSs). In 1989, Congress authorized cooperative agreements (CAs) for use by the military services and the Defense Advanced Research Projects Agency (DARPA) as alternative mechanisms for conducting research and development, and also authorized other transactions (OTs). Although OTs are promising options for conducting collaborative research with NTSs, the Services have not yet opted for them. CAs will not achieve government objectives; OTs are needed to attract NTSs. The Army Materiel Command (AMC) is beginning to explore using OTs, but to reach the most promising companies and realize gains, the Army must continue to move in this direction.