The Congressional Research Service Addresses Lawmaker Concerns about DOD’s Use of Other Transaction
Published: February 27, 2019
Lax DOD administration invites greater Congressional scrutiny.
In February 2019, the Congressional Research Service (CRS) published a report for Congress that is basically a primer on the Department of Defense’s use of Other Transaction Authority (OTA). A source of growing concern for lawmakers, as well as for contractors working in federal government IT, OTA use by the DOD has been subject to increased scrutiny thanks to an expanding number of high value awards. The CRS carried out the report to inform members of Congress about trends in DOD’s use of OTA, the reasons why Defense entities use OTA agreements, and the benefits and challenges surrounding OTA as an acquisition process.
After explaining the potential risks associated with OTA, the CRS reached the troubling conclusion that the “DOD lacks authoritative data that can be used to assess OT effectiveness and better understand broader trends associated with these agreements.” Part of the problem lies with the Federal Procurement Data System-Next Generation (FPDS-NG) system, which is supposed to be the authoritative source for all government acquisition data. The CRS found, however, that not all of DOD’s data related to OTA awards is available in FPDS-NG. The DOD plans to rectify this by the end of fiscal year 2019 when “all OT data will be reported through FPDS-NG.” Until then gaps will remain that do not provide Congress with a complete picture of OTA transactions.
The CRS also noted that procurement data in FPDS-NG “is not fully reliable [containing] quality issues relating to accuracy, completeness, and timeliness of data.” This finding comes in tandem with CRS’s conclusion that even though the DOD “competed” 89% of its OTA awards, it could not demonstrate that OTA contracts are awarded faster than those competed by traditional means. Speed and acquisition agility are often cited as reasons why the DOD needs OTA for prototype procurement, but the inability to prove this with data and the lack of OTA data itself could be big red flags for Congress, which might demand a greater oversight role in the future.
Issues for Congress
Unlike the Government Accountability Office (GAO), which tends to provide recommendations, the CRS outlines relevant issues that will help Congress debate the use of OTAs. The issues identified as important by the CRS are as follows:
- To what extent and in what circumstances do the potential benefits of OTAs in terms of cost, schedule, and added capabilities outweigh concerns over potential fraud, waste, abuse, diminished oversight, and other public policy objectives?
- Should OT authorities be extended further, curtailed, or maintained?
The big challenge for Congress is, as the CRS points out early in its report, that the data surrounding OTAs is incomplete and often inaccurate. Without accurate data, how is Congress supposed to determine the efficacy of OTAs and conclude whether or not they are actually helping the DOD meet its goals? This is something Congress could address by demanding the DOD make more efficient use of existing reporting mechanisms, or by recommending a variety of different reporting requirements.
Lastly, the CRS suggests that Congress might instruct DOD in pending National Defense Authorization Act legislation that the department must “should establish an acquisition innovation lab or center of excellence responsible for overseeing, executing, and approving all OTs across the department.” Where such an organization might be located is unclear. What is clear is that DOD’s administration of OTAs has fallen short to date, a situation that is bound to bring increased legislative scrutiny.