Army triples use of OTAs as it pushes for modern technology

In the last three years, the Army has more than tripled its use of other transaction agreements (OTAs) — contracts that circumvent typical acquisition regulations to promote rapid, innovative contracting — as it prototypes and tries to field new technology, according to a new Government Accountability Office study.

In 2017, the Army obligated $1.59 billion in other transactions, which rose to $4.8 in 2019, according to the audit. The vast majority of those OTAs were issued for technology prototypes, the analysis shows.

OTAs are a relatively new method for the Defense Department to make quick purchases. The Army has prioritized use of Other Transaction Authority as it stands up Army Futures Command, which is focused on fielding emerging technology.

But the Army still has a lot to learn about how effective the novel contracts are, the GAO said. The watchdog group recommended the Army find a way to constantly analyze its use of the contracts to better understand if they are achieving the modernization objectives the department is seeking.

“Army Futures Command has not regularly analyzed the use of alternative agreements to gain insight on the distribution and trends in use,” the report states. “Such analysis could provide the command and other Army stakeholders in contracting and acquisition with improved information to help manage risks in decision-making for development and acquisition in support of modernization.”

Army leadership, including Secretary Ryan McCarthy, said the use of OTAs was a priority for the service and one that will continue to grow. The ability to navigate around the textbook-length acquisition regulations with OTA authority has been an attractive offer to leaders eager to modernize across the DOD.

“It is the speed of business,” McCarthy said of using OTAs in February. “We are changing the way we do business in Army acquisition.”