Contracting Provisions in the House Draft FY 2025 National Defense Authorization Act

Last week, the U.S. House of Representatives passed a full draft of the National Defense Authorization Act (NDAA) for fiscal year 2025. Numbered H.R. 8070, the FY 2025 bill weighs in at 1,022 pages, and it will serve as the basis for amendments, mark-ups, and debate by the U.S. Senate before a final reconciled bill is sent to the White House for the president’s signature.

According to the latest schedule, the Senate is presently marking up certain portions of the NDAA prior to full debate on June 13-14. It is unknown if the completed legislation will be finished in June or July. It also remains unclear if certain provisions currently in the House’s version of the bill will make it through the reconciliation process.

In case they do, today’s blog examines some of the provisions related to contracting that could have an impact on the market if they are passed as is. My observations are provided after the summaries. Federal Market Analysis will continue to monitor the progress of the NDAA through congress and publish provision summaries in our upcoming Federal IT Market Forecast report at the end of June.

Small Businesses

Several sections of the bill pertain to small business contracting.

For example, one section requires the Department of Defense (DOD) to establish a goal for awarding contracts to businesses owned by veterans who are not service-disabled.

Additionally, the bill directs the DOD to increase the number of contracts awarded to service-disabled veteran-owned small businesses (SDVOSB) and requires the creation of a training regimen to increase the SDVOSB award percentage if the department fails to meet established thresholds.

Analyst Comment – Good news for veteran-owned small businesses! It appears the House wants to increase support for all veteran-owned contractors, not just those who were disabled by their military service. That said, the provision related to training seems misplaced given that the DOD already focuses a lot on SDVOSBs and has formal contract award goals.

Lastly, a third section calls for the DOD and Small Business Administration to share information on potential contract opportunities in critical technology areas available to small businesses.

Analyst Comment – Good news for small business technology providers! With luck, this provision will remain in the final bill and result in the publication of more information about upcoming opportunities.

Pricing Rule Changes

The bill also makes changes to the language related to acquisition pricing rules that

Allow contracting officials to consider if a product or service to be procured is commercial in order to make an accurate pricing determination.

Require that an offeror responding to a purchase order submit cost or pricing data before the award of the purchase order.

Direct that contracting officials must determine if the government is paying the same price for the same good or service from the same subcontractor or supplier during the 12-month period immediately preceding the issuance of an RFP/RFI/purchase order for that good or service.

Analyst Comment – If they remain intact in the final bill, these language changes further cement the government’s intention to increase investment in commercial solutions. Commercial partners, however, will be required to provide more data enabling the government to develop accurate pricing estimates. Whether enhancing the availability of pricing data will also lead to an increase in the use of Lowest Price Technically Acceptable procurement methods remains to be seen.