Small Business Provisions in the FY 2023 NDAA
Published: February 08, 2023
Federal Market AnalysisBig DataDEFENSEInformation TechnologyNational Defense Authorization ActPolicy and LegislationSmall Business
The FY 2023 NDAA contains several provisions of interest to small businesses.
Continuing our blog series on interesting provisions in the National Defense Authorization Act (NDAA) for Fiscal Year 2023, today’s post summarizes and provides commentary on a handful of provisions in the legislation that will be of interest to small businesses working with the Department of Defense (DOD) and the Intelligence Community (IC).
Small Business Integration Working Group
Section 874 requires the Secretary of Defense to establish a Small Business Integration Working Group to share “best practices for maximizing the contributions of small business concerns in the defense industrial base … and practices for conducting oversight of the activities of the military departments and other components of the Department of Defense with respect to small business concerns.”
The DOD is increasingly concerned about the drop-off in the number of small businesses available to support its operations. This working group should help increase the potential for small concerns to grow their business with the DOD.
Demonstration of Commercial Due Diligence for Small Business Programs
In Section 875 the Secretary of Defense is required to establish a program that demonstrates “commercial due diligence tools, techniques, and processes,” which help small businesses identify “attempts by malicious foreign actors to gain undue access to, or foreign ownership, control, or influence over the business.”
This requirement could result in the competition of a contract for a new due diligence tool that enables the DOD to accomplish its desired end. An assessment of tools currently used by the department’s Office of Small Business Utilization will be conducted first before any potential market research appears.
Development and Assessment of Mission Effectiveness Metrics
Section 875 calls for the Secretary of Defense, in coordination with the acquisition executives of the military departments to develop metrics for assessing the effectiveness of the DOD’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The metrics designed must identify gaps in current SBIR/STTR data and outline areas where a “new means” of collecting and/or visualizing the data is needed.
Recently re-authorized by Congress, SBIR and STTR programs provide the DOD with cutting-edge R&D and technical solutions. The development of metrics measuring the effectiveness of these programs could result in the competition of a contract for an advanced analytics suite.
Turning to provisions related to the IC we find the following:
Plan to Expand Sensitive Compartmented Information Facility Access by Certain Contractors
This section (#6715) directs the Director of National Intelligence (DNI), in consultation with the Secretary of Defense and the heads of such other elements of the intelligence community as the Director of National Intelligence may determine appropriate,” to develop a plan for expanding the access of small emerging technology companies to sensitive compartmented information facilities (SCIFs) where they can perform work.
This provision hints at a roadblock concerning small business access to SCIFs. Requiring the DNI and Secretary of Defense to jointly report on “the extent to which security clearance requirements delay, limit, or otherwise disincentivize emerging technology companies from entering into contracts,” it becomes clear that the vetting process for clearing contractor personnel needs to be reformed in order to support small business partners. Don’t expect a quick fix on this one.
Report on Potential Benefits Establishing An ICWERX
Referring to the success of the Air Force’s AFWERX program, Section 6722 instructs the DNI “in coordination with the Director of the Central Intelligence Agency and the Director of the National Security Agency” to assess if “the Intelligence Community would benefit from the establishment of a new organization to be known as ICWERX.” The new ICWERX “would incorporate lessons learned from AFWERX of the Air Force, the DOD’s Defense Innovation Unit, and In-Q-Tel, an IC-sponsored corporation.
The report resulting from the assessment “shall include a review of the existing avenues for small- and medium-sized emerging technology companies to provide to the intelligence community artificial intelligence or other technology solutions.” If an ICWERX is established it would assist small and medium-sized emerging technology companies by “accelerating the procurement and fielding of innovative technologies.” This provision could spur the development of innovative small businesses since the ICWERX would help establish an avenue for earning revenue by contracting with the IC.
Taken together, these provisions tinker around the edges of challenges facing small business industry partners. There is some potentially good news for companies working in emerging technology fields, but these will not benefit the majority of small businesses facing rising costs and labor shortages. This said, anything that can be done to speed up awards, increase award amounts, and generally make it easier for small businesses to succeed in federal contracting will be welcome.