AUSA NEWS: Army Leading Charge for OTA Agreements

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The Army is No. 1 by a long shot among the U.S. military services when it comes using other transaction authority agreements to fast-track projects, according to analysts from Bloomberg Government.

OTA agreements were facilitated by the fiscal year 2016 National Defense Authorization Act, which provided other transaction authority to the Defense Department to help cut through bureaucratic red tape associated with traditional procurement processes. The authority enables the Pentagon to put companies on contract more quickly for prototyping and follow-on production. The intent of the legislation was to help the U.S. military acquire new capabilities faster and bring more nontraditional contractors into the fold.

Since the 2016 NDAA was passed, the use of OTAs has been on the rise.

“It’s kind of a hot thing these days,” said Robert Levinson, a senior defense analyst with Bloomberg Government.

Among the military branches, “the Army is the big dog when it comes to OTA,” he noted Oct. 15 during a briefing for industry on the sidelines of the Association of the United States Army’s annual conference in Washington, D.C.

The service accounts for about 63 percent of OTA contracting dollars obligated since 2016, he said, with Army Materiel Command being the top user.

Army leaders have been banging the drum about the need to be aggressive in prototyping and developing new capabilities as the service pursues its top modernization priorities, which include: long-range precision fires; next-generation combat vehicles; future vertical lift; the network; air-and-missile defense; and soldier lethality.

In fiscal year 2016, $804 million in OTA agreements were obligated by the Army. That number rose to $1.4 billion in 2017 and $2.6 billion in 2018. About $3.3 billion has been obligated this year based on the latest data, but that number is expected to rise when additional contracting data is available, according to Bloomberg Government researchers.

Total Pentagon OTA contract obligations could be as high as $7 billion for 2019, Levinson said. There are “lots of dollars flowing through the OTA account,” he added.

The vast majority of OTA funding has been awarded through consortia, he noted. Bloomberg Government tracks 26 different consortia. Analytic Services Inc., which manages many of them, is the top vendor.

“You pay like $500” to join a consortia, Levinson explained. “You can't bid on the work, you can't submit proposals unless you're a member.”

The Training and Readiness Accelerator, or TREX, could see an increase in OTA contract dollars flowing through it as the Army moves to develop a robust synthetic training environment, said Cameron Leuthy, a senior budget analyst with Bloomberg Government.

While the U.S. military, especially the Army, is gung-ho when it comes to other transaction authority agreements, and many in Congress support the concept, some lawmakers have indicated a desire for more oversight, Levinson noted.

“There's some expectation on the OTA front that … there's a little bit of a pullback coming,” he said.

“They're requiring a little bit more transparency, a little bit more reporting so they make sure that OTA is working as intended,” he added. “There is some suspicion that, you know, people will go in and get a little bit too far out ahead of their skis trying to use OTAs for things it really isn't intended. [But] right now there's still enthusiasm because it's seen as fast and quick and able to bring in those nontraditional contractors.”

Topics: Army News, Contracting