Senator to question Army's acquisition of tech network

Senate Armed Services Airland Subcommittee Chairman John McCain, R-Ariz., is expected to criticize the Army's commercial acquisition strategy for its $3 billion Future Combat System program during a hearing Tuesday.

FCS, an Army technology development effort led by the Boeing Co., will be the centerpiece of the Army's transformation. It will be a joint network of computer systems through which a soldier linked via a database and sensors will have access to information providing a more detailed picture of the battlefield.

The administration is asking Congress to approve $3.4 billion for FCS research and development in fiscal 2006, up from the $2.8 billion enacted in fiscal 2005.

Last week, McCain hinted at his displeasure with the program's classification as "commercial," asking Army Secretary Francis Harvey whether it could be purchased commercially. Harvey told McCain it could not but did not explain the reasoning behind the classification.

Under the commercial classification, the Army is exempting numerous contractors involved in the FCS program from statutes designed to protect procurement integrity, according to a congressional aide. Boeing is only one of a few of large defense companies that stand to benefit from the Army's current acquisition approach, a designation known as "other transaction authority" or OTA, designed to bolster participation from smaller, more nontraditional companies that normally do not bid on defense contracts.

A congressional aide said the classification is particularly egregious given that Boeing, a company currently involved in one of the biggest procurement scandals in decades as a result of its failed bid to build a new Air Force refueling tanker, is the prime contractor. Typically, the OTA classification is used for small projects and prototypes through which the Pentagon or the services seek non-traditional defense contractors in the acquisition process. FCS involves numerous companies, but many fall outside the definition of non-traditional.

In addition to Boeing, the aide noted that Lockheed Martin, General Dynamics, United Defense, Raytheon, Honeywell, Textron, Northrop Grumman, BAE Systems, ITT and SAIC are among the top names included in FCS. All of them stand to benefit from the fact that many statutes governing federal procurements that seek to deter waste, fraud and abuse do not apply to projects classified as OTA.

"Stripping these protective statues for FCS is a formula for financial disaster," the aide said.

One Army official said it is unclear why the Army continues to use the OTA designation, initiated during early program development under the Defense Advanced Research Projects Agency.

"We're still partnering with DARPA on FCS," the official said. "But McCain's concern with the inapplicability of procurement laws to the program because of its OTA designation could be valid."