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Select Acquisition Provisions in the House and Senate Defense Authorization Bills

Published: June 28, 2016

Acquisition ReformDEFENSENational Defense Authorization ActPolicy and Legislation

FY 2017’s National Defense Authorization act contains important provisions for acquisition reform and several potential procurements.

Two versions of the National Defense Authorization Act for Fiscal Year 2017 are winding their way through congressional committees. Eventually, these versions will be reconciled into a single NDAA that Congress sends to the President for signature. For the time being, these documents remain unique pieces of legislation, but there are some similarities, particularly in the area of defense acquisition reform. Industry should expect most of the language concerning acquisition issues to make it into the final version of the NDAA so here are some of the most important provisions to know.

First, the Senate version. It directs the Department of Defense to do the following:

Section 825 – Use lowest price, technically acceptable (LPTA) source selection proceduresonly when requirements are clearly defined, when no additional value is expected above the minimum price offered or by reviewing proposals other than that submitted by the lowest bidder, when subjective judgment is not needed to evaluate the technical approach, and/or when the contracting official can justify use of LPTA for an IT services contract. Incidentally, Section 847 of the House version goes further, adding LPTA “shall be avoided when the procurement is predominately for the acquisition of information technology services, systems engineering and technical assistance services, audit or audit readiness services, or other knowledge-based professional services.”

Sections 821 & 822 – Address bid protests by contracting a bid protest study, require that contractors whose revenue exceeds $100M pay the GAO’s processing costs if their protests are denied, withhold payments on bridge contracts to protesting incumbents unless the protested solicitation is canceled/released or if the GAO upholds any of the protests, and recommend that protests be prohibited if a “task order ombudsman” is appointed and a review process is established. Section 831 of the House version calls for a similar review.

Section 829E – Ensure competition is not limited by the use of brand names orequivalent descriptions in solicitations. Section 834 of the House version contains similar language.

Section 901 – Eliminate the position of Under Secretary of Defense for Acquisition, Technology, and Logistics (USD AT&L) and redirect responsibilities to a new Under Secretary of Defense for Research and Engineering and an Under Secretary of Defense for Management and Support. The White House opposes this reorganization.

Second, the House version. It directs the Department of Defense to do the following:

Section 803 – Calls for the Secretary of Defense to implement a method for inventorying DoD services contracts. The implemented system must make appropriate comparisons of contractor and Government civilian full-time equivalent employees for the purpose of informing sourcing decisions and workforce planning, distinguish between different types of services contracts, including contracts for labor or staff augmentation and other types of services contracts, provide qualitative information on the nature of the work performed, where the work is performed, and the entity for which the work is performed, and identify the number of contractor employees, expressed as full-time equivalents, using direct labor hours and associated cost data collected from contractors. Vendors should note that Congress directs the system be implemented within 90 days of the enactment of the FY 2017 NDAA, so watch for a potential procurement.

Section 824 – Directs the SECDEF to establish a database to provide the military departments and Defense Agencies with a method for “making commercial item determinations, conducting market research, and performing analysis of price reasonableness.” This requirement may also result in a procurement for a unique database that provides these capabilities. There is no timeline requirement for acquiring/creating the database.

Section 825 – Authorizes the SECDEF to carry out a Commercial Solutions Opening Pilot Program “under which innovative commercial items may be acquired through a competitive selection of proposals resulting from a general solicitation and the peer review of such proposals.” The contract awards for such a program cannot exceed $10M in value per contract and no more than $75M may be obligated in a given fiscal year. This program appears to be directed at maximizing the Other Transaction Authority that Congress gave to DoD in the FY 2015 NDAA and which Army and Navy have been using for cyber-related procurements.