Pentagon Nearly Doubles Use of Other Transaction Authority Purchases

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The Defense Department is embracing the alternative procurement method but could use more oversight of the deals, a Government Accountability Office audit found.

The Pentagon upped its use of purchases through other transaction authority, or OTAs, significantly over the past fiscal year, nearly doubling both the number of total OTA contracts and total investment.

In fiscal 2017, the Defense Department issued 384 new awards, modifications or orders for OTA contracts totaling $2.1 billion in obligations. In 2018, the Defense Department contracted 618 OTA awards totaling $3.7 billion, according to a Government Accountability Office audit released this week.

Based on data from the Federal Procurement Data System, the audit indicates the Pentagon has more than tripled its use of OTA contracts since it received enhanced authorities from the 2016 National Defense Authorization Act. In that year, Defense agencies issued only 248 OTA awards for approximately $1.4 billion.

However, the audit suggests the Pentagon needs commensurate oversight to ensure OTAs are issued properly. In reviewing 11 prototype OTAs, GAO found two instances where agreements officers “did not obtain higher level reviews.”

“In both cases, agency officials reviewed the transactions after GAO brought these situations to their attention and found no issues with the awarded transactions,” the audit states.

GAO did not issue recommendations in the audit because the two agencies in question, the Defense Advanced Research Projects Agency and Army Contracting Command in New Jersey, stated their intent to address the issues. DARPA will complete an internal file review of OTAs to “check compliance with its review policy in fiscal year 2020 and take corrective actions, if necessary.” The Army Contracting Command plans to clarify who should review OTAs in those situations.