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On March 15, POGO submitted testimony to the Senate regarding our concerns with the Future Combat Systems (FCS) contract. Senator McCain (R-AZ) released this good news on the FCS contracting vehicle today:

[T]he Army indicated that it would convert the [FCS] OTA to a FAR-based contract, with provisions typically used to protect taxpayers' interests and help prevent fraud, waste and abuse specifically included.

Just to clarify, “other transaction authority” (OTA) is a term commonly used to refer to the DoD's authority to enter into transactions (OT agreements) other than contracts, grants or cooperative agreements. DoD has temporary authority to award such agreements in limited circumstances -- research and prototype projects. OTA is a customized agreement rather than contracts that can be specifically tailored based on the government's needs. The inherent problem, however, is that rather than the government controlling what it needs, the OTA contractors are placed in the powerful position of saying “here's what we will do for you.”

More disconcerting is the fact that OTAs generally are not subject to the federal laws and regulations governing federal contracts. They contain fewer oversight provisions in an effort to lure non-traditional defense contractors to bring innovative ideas to the government. As witnessed by the FCS program, however, the government is still contracting with the usual suspects.

The FCS' conversion from an OTA to a conventional contract means that usual controls and oversight mechanisms set forth in contracting statutes now will govern the program.