There is a new DOGE chief in Washington DC, and he has his sights on the Pentagon. His name is Russell Vought. Vought is the director of the Office of Management and Budget (OMB). During his confirmation hearing, he repeatedly testified that the White House has control over federal spending, not Congress.
Pentagon officials are reviewing all 72 major acquisition programs for potential cuts. This is pursuant to an Executive Order. Any program that is either 15% behind schedule or 15% over cost could get eliminated.
The use of Other Transactional Authority (OTAs) is increasing within DOD. OTAs are not FAR based. The fiscal 2025 defense appropriations bill introduced several significant provisions related to OTAs. One provision lowers the level of approval for OTAs up to $500 million.
The bill also clarifies that if an OTA was initially awarded for a prototype project, the DoD can transition to follow-on production without requiring a new competitive contract. The follow-on production contract does not have to be another OTA. In addition, the bill requires DoD to establish a process to track the number and value of awards to small businesses and non-traditional defense contractors using OTAs.
In other news, the Pentagon is eyeing base closures and consolidations and also reallocating funds for service members pay and benefits into funding the southern border Trump imitative.
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