Senator questions Army's 'Future Combat System' process

Acquisition method used to develop system under scrutiny by Sen. John McCain.

As part of his continued scrutiny of the Army's "Future Combat System," Senate Armed Services member John McCain, R-Ariz., is now questioning the Pentagon's acquisition approach for the multibillion dollar transformation program.

Instead of developing the program under statutes that have safeguards against waste, fraud and abuse, the Pentagon has develop the Future Combat System under "Other Transaction Authority," which is not subject to similar restrictions.

In a Thursday letter to Army Secretary Francis Harvey, McCain asserted Congress never intended for the Pentagon to rely on OTAs for large acquisition programs, and that OTAs should be used for small research or limited prototype projects, especially those in which the Defense Department seeks to engage nontraditional defense contractors that may be averse to the costs of regulation and red tape associated with the regular government procurement process. Boeing, a major defense contractor, is the lead company developing the Future Combat System.

Given that the Army's July 2004 decision to restructure the program is expected to delay its implementation in the field by four years and add $6.4 billion to its price tag, McCain said "questions as to whether an OTA was a suitable contract vehicle to use for this program in the first instance and to what extent it should be used going forward must be considered."

McCain cited a March 2002 Pentagon inspector general's report that found OTAs are able to bypass many federal statutes and regulations designed to protect the taxpayer. That report also found that, historically, OTAs have not attracted a significant number of nontraditional defense contractors to do business with the government.

"In fact, 95 percent of federal funding through OTAs was doled out to traditional defense contractors," McCain noted, a trend he termed finds "disturbing." McCain concluded that his concerns "underscore the need to revisit whether an OTA should continue to be used in this program." He called on Harvey to provide by April 8 an estimate of any additional costs the program would incur if the current OTA were converted to a traditional acquisition contract subject to federal acquisition statutes and regulations.