A National Defense Industrial Association (NDIA) report on the defense industrial base’s health shows that the Department of Defense’s (DOD) use of other transaction authority (OTA) agreements to encourage non-traditional vendors to work with the Pentagon has surged in recent years, National Defense reported Friday.
According to NDIA’s Vital Signs 2021 report, the average amount of DOD’s innovation-related investment per year that used OTAs climbed by approximately 300 percent. Analysts at Bloomberg Government said use of OTAs continued to rise in fiscal year 2020.
“Our data is showing $14.8 billion for DoD and $16.3 billion [for the U.S. government] overall for FY 2020, so the total has gone up over 100 percent over FY 2019 and we’re still waiting on the last month or so of data for DoD,” Robert Levinson, senior defense analyst at BGOV, said in a December email. “The enthusiasm for OTAs continues.”
A recent Center for Strategic and International Studies report showed that DOD recorded $7.7 billion in OTA obligations in 2019, a 75 percent increase from $4.4 billion reported in 2018. The U.S. Army emerged as the leading user of OTAs across the department, according to the CSIS study.
Rhys McCormick, a CSIS analyst, said he thinks the use of OTAs will continue to increase.
“I definitely don’t think the [current] growth rate is sustainable … but I think we’re going to continue to see growth in OTAs in the coming years,” McCormick said. “It just won’t be at that crazy rate that we saw” after the passage of the 2016 National Defense Authorization Act.
