Why the Army is wary of other transaction authority

The Army wants to be cautious about using agile acquisition authorities too frequently, largely because of oversight risks.

The Army is "trying to be very judicious about this authority so we don't lose it," Undersecretary of the Army Ryan McCarthy said about other transaction authorities during the recent Association of the United States Army (AUSA) Global Force Symposium in Huntsville, Ala.

McCarthy said the Army's cross-functional teams were primarily using OTAs, which are contracting solutions that can help fast-track the acquisitions process.

OTAs have become a desirable solution to get around cumbersome requirements that can keep capabilities from quickly transitioning from the laboratory to the battlefield.

But the Army has a history of its OTA use being scrutinized. In 2005, the Army's Future Combat Systems (FCS) program faced congressional inquiry after it used other transaction authorities to secure a multibillion-dollar contract with Boeing and SAIC to modernize and replace battlefield vehicles and equipment with the latest technology.

Sen. John McCain (R-Ariz.) led the charge, voicing concerns about lack of oversight and potential waste of taxpayer money. The Army restructured the contract through a traditional federal acquisitions process on its own and ultimately terminated it, paying nearly $500 million in cancellation fees -- an experience that seems to haunt the Army today.

"The Army's concern is justified with past history on other transaction authorities," David Berteau, president and CEO of the Professional Services Council, told FCW.

And while McCarthy's trepidation may be warranted, Congress more recently has largely embraced OTAs and other acquisition reform tools to help speed up modernization efforts.

The Defense Department has production or milestone decision authority, which gives individual executives the authority to move programs throughout the acquisition process.

Army Secretary Mark Esper told the House armed services committee March 20 that he has had an overall "positive" experience with new acquisition authorities since his confirmation in November.

But McCarthy still indicated a need to play it safe: "If you abuse the authority, it could be taken away."

Celero Strategies CEO Stan Soloway told FCW that OTAs are a type of contract with requirements much like those that can be found in a traditional contract process, but the concern is around accountability and speed of acquisition.

"The undersecretary is right, they have to do them right," Soloway said. "But there's no evidence that they're not doing them right. And i think think their [use]is going to continue to grow."

"It is absolutely true that there have been programs started under other transactions have been unsuccessful," he said, referring to FCS, "But was the way the program was constructed and managed the reason for its failure," rather than the OTA itself?