NDAA Passes House with Small Business Contracting Reforms

December 10, 2014

pic-capitolLast week, the 2015 National Defense Authorization Act (NDAA) (H.R. 3979), to authorize funding for national defense programs through September 2015, passed the House by a margin of 300-119. Now the bill moves to the Senate, but with an extensive list of priority lame-duck business to finish, including tax extenders and nominations, it is uncertain when the Senate will take up the measure. While the Senate will likely follow suit with the House and prevent votes on amendments to the bill, some senators are calling for delaying passage for a number of concerns, such as public land provisions that were attached to it.

H.R. 3979 is the product of two merged bills: S. 2410, drafted by the Senate Armed Services Committee but was never brought to the floor for a vote; and H.R. 4435, which passed the House in May. This previously passed House bill contained several provisions, including, but not limited to: language offered as an amendment by House Small Business Committee Chairman Sam Graves (R-Mo.) that would increase the small business prime contracting goal from 23 percent to 25 percent, which equates to $10 billion in annual new work for small businesses, and increase the subcontracting goal from 35.9 percent to 40 percent. The bill also contained a provision that would require the Government Accountability Office (GAO) to issue a report on the impact Federal Single Source Initiative (FSSI) has on small businesses.

FSSI is a government-wide program that allows agencies to work together to develop innovative sourcing strategies for a set of commonly acquired goods and services. Instead, as currently structured, this program greatly decreases the number of small-business contractors that can work with federal agencies, thereby reducing competition and threatening jobs. Quantifying the impact of FSSI would allow the Government Services Administration (GSA) and other federal agencies to make informed decisions regarding how best to achieve increased purchasing efficiency and desired cost reductions associated with federal procurement, while at the same time, avoiding any unintended consequences and maximizing federal business opportunities for small businesses.

House Small Business Committee-sponsored contracting reform amendments have been included in the final NDAA, such as provisions that would: simplify the multistep process of competing for design-build contracts with the Department of Defense; increase transparency and accountability in the Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans; and bring more transparency to data reported on bundled and consolidated contracts. NDAA also includes provisions intended to help small businesses comply with complicated import and export requirements with the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR); limit the use of reverse auctions; and expand sole-source contracts for Women-Owned Small Businesses (WOSBs) and Economically-Disadvantaged Women-Owned Small Businesses (EDWOSBs).

NSBA continues to support the House Small Business Committee’s contracting reform initiative and urges members to approve this must-pass legislation without major amendments to any of the small business contracting provisions. These provisions will help create a more efficient and effective federal contracting system, promoting and facilitating competition, job creation and long-term economic growth.

Having long advocated for a more fair and equal federal contracting system, NSBA is encouraging its members to contact their Senators and Representative today and urge them to support similar legislation that further improves small-business access to federal procurement opportunities. 

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