A number of nontraditional companies told CRS that they are more likely to work with DOD because of the department’s other transaction authorities. Despite these claims, some observers question whether OTs are effectively bringing nontraditional contractors into the defense marketplace. A DOD Inspector General report examining other transactions from FY1994-FY2001 found that OTs did not attracted significant numbers of nontraditional defense contractors to do business with DOD. The report found that of the 209 prototype agreements examined, traditional defense contractors received 95 percent of the $5.7 billion in funds awarded.
A recent analysis of FPDS-NG data by Federal News Network had similar findings. According to the report, from FY2015-2017, while nontraditional defense contractors were awarded most of the new OTs (66% vs. 33% for traditional defense contractors) the dollar-value of the OTs favored traditional contractors ($20.8 billion vs. $7.4 billion for nontraditional contractors). Some observers have questioned the accuracy of the data published by Federal News Network.
According to Charlie McBride, President of Consortium Management Group (which manages two consortia working with DOD through OTs), 88% of the total dollar value of awards to CMG Group have gone to nontraditional prime contractors, and nontraditional entities have participated in the remaining 12%…
Available FPDS-NG data suggests that DOD is broadly complying with 10 U.S.C. 2371b’s competition mandate. Between FY2013 and FY2017, approximately 89% of all new OT prototype agreements were competed in some fashion.
That was from CRS paper “Department of Defense Use of Other Transaction Authority: Background, Analysis, and Issues for Congress.” Updated February 22, 2019.
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