The Senate takes up its version of the National Defense Authorization Act (NDAA) for Fiscal Year 2017 (FY17) this week, leading many in the federal contracting community to quickly analyze provisions that could affect federal contractors. From a proposed restructuring at the Department of Defense’s (DOD) Acquisition, Technology, and Logistics (AT&L) branch, to a complete overhaul of the DOD’s Cost Accounting Standards, there is certainly a lot to talk about. One thing is certain; both the House and Senate chambers have continued their commitment to acquisition reform.
The Senate bill and its 381 amendments are up for debate on the floor this week, and will head into conference debate alongside the House version of the bill (which was passed by that body in May) as early as next week. While the details of the bills are yet to be reconciled, the technology industry is pleased to see the two Armed Services Committees’ commitment to acquisition reform continue in the FY17 legislative process. Examples of topics currently incorporated in this year’s authorization include:
- Commercial Item Access– A number of provisions have been included in the bills to promote the acquisition of commercial solutions, from exempting commercial suppliers from burdensome government-specific regulations (e.g., the business systems rule), to expanding the definition of a non-traditional defense contractor. The Senate Armed Services Committee also states in its report that it is very concerned with DOD’s narrow interpretation of the commercial item definition. Should DOD not recognize and correct the restraints they are putting on commercial contractors, the committee has indicated it will consider expanding the definition.
- Incentivizing Share-in-Savings – The Senate Armed Services Committee’s bill reauthorizes a valuable tool that incentizes both the government and contractors to find and share contract savings throughout a project’s lifecycle. In addition, the language also includes additional training for the contracting workforce.
- Appropriate Use of Lowest Price, Technically Acceptable (LPTA) – Both bills contain language that limit the use of LPTA evaluation methods for complex procurements, including those for IT services. Our industry believes this evaluation tool has been improperly used at DOD (most recently with the ENCORE III contract) and should be limited to evaluations for simple, well-defined, low risk procurements. ITAPS would encourage conferees to expand this prohibition to information technology (IT) as well to encourage smarter, long-term buying decisions.
- Limitations and Exemptions from Executive Orders – Both bills currently contain language limiting or exempting DOD from implementing the burdensome Fair Pay and Safe Workplaces Executive Order. A coalition of government contracting groups, including ITAPS, have urged the administration to withdraw the order because it does not achieve its goal of weeding out bad actors and would actually add costs, burdens, and even unintended harmful impacts to the already complex federal marketplace. The Senate bill also exempts DOD from applying additional Executive Orders to commercial-off-the-shelf items.
- Effectiveness of Set Aside Programs – ITAPS supports more transparency on how agencies reach their small business contracting goals and exposure of inequitable award practices creating overreliance on certain industry categories to reach those goals. Both bills direct DOD to award contracts equitably across industry categories to avoid excessive concentrations in specific industries. Additionally, language in the Senate bill would ensure appropriate credit is given for small business goals by accounting for small business subcontractors in the first and second tier of major defense acquisition programs.
We applaud the House and Senate Armed Services Committees for making acquisition reform a priority in both versions of the NDAA legislation again this year, and understand that the conference could still take many months of debate before a final bill passes both chambers and reaches the President’s desk. While no single provision can reform the entire system, these deliberate and systematic changes will improve how DOD procures IT solutions and services, which will ultimately save valuable taxpayer dollars and deliver mission-critical technology to the warfighter faster. There is still more work to be done, but the current provisions indicate that the tech sector has much to support in the FY17 NDAA proposals.