Senate Approves NDAA

October 14, 2015

pic-capital-capitolOn Oct. 7, the Senate voted to approve the $612 billion conference report for the FY 2016 National Defense Authorization Act (H.R. 1735) (NDAA) which predominately sets policy and spending priorities for the Department of Defense (DOD).  The Senate voted 70-27 in favor of the measure, now sending it to President Barack Obama for his signature. Twenty senate Democrats voted to approve the measure, while only two Republicans voted against it. The House had previously passed the measure by a vote of 270-156 on Oct. 1.  The White House has indicated that the president will veto the measure. The administration has voiced concern that the legislation circumvents budget caps by appropriating $38 billion to the Pentagon through overseas contingency funds. While the NDAA passed with a veto-proof majority in the Senate, Senate Minority Leader Harry Reid (D-Nev.) has already indicated that if called upon, his party would sustain the president’s veto.

Notwithstanding the potential veto threat, included in the NDAA are several measures which may impact small-business contracting policies, including contract bundling, subcontracting opportunities and overall small-business participation in the federal procurement process.

Some of the key provisions are highlighted below.

The NDAA amends the existing Department of Defense Mentor Protégé Program to require the Secretary of Defense to testify ninety days after the bill’s passage in both chambers. The Secretary will be expected to have suggestions to better ensure that the resources in the program are flowing to appropriate small businesses that do not already have large government contracts.

Also under the NDAA, the Department of Defense small business contracting goals will be tracked via scorecard. The Government Accountability Office (GAO) will need to prepare a report detailing the effectiveness of the scorecard’s methodology. However, there is currently no deadline for this requirement contained within the legislation.

NDAA amends the Small Business Act and establishes an Office of Hearings and Appeals to review petitions on size standards. Language is also included to modify joint ventures and teaming by requiring agencies  to give due consideration to the capabilities and past performances of small businesses involved in team or join ventures, bundles, consolidated, or multiple-award contracts.

The legislation also creates new responsibilities for Directors of the Offices of Small and Disadvantaged Business Utilization (OSDBU) throughout the Department of Defense. The legislation requires that in the event of the OSDBU being notified that a contracting process has been modified to exclude small business or give a specific contractor an advantage, the OSDBU must serve as an intermediary between the contracting officer and the small business in question.

NSBA strongly supports efforts to level the playing field for small firms that still face significant competitive disadvantages when it comes to the federal marketplace. NSBA has long supported legislation to enhance fairness, improve transparency and ensure small businesses voices are heard, such as those federal contracting improvement measures included in the NDAA.