DEFENSE AUTHORIZATION BILL HAS FEWER, BUT STILL IMPORTANT, ACQUISITION PROVISIONS

The acquisition section of the FY’2024 National Defense Authorization Act (NDAA) is much shorter than usual this year, but there are still several items of interest to contractors.  First up is the broadening of the prohibition on doing business with companies that operate in China. DOD will be prohibited from engaging in consulting contracts with firms that have in the last 5 years provided consulting services to the Chinese Government, the Chinese Communist Party, the People’s Liberation Army, or other covered entities.  This could impact certain multi-national consulting firms first, but DOD prime contractors may also want to review their lists of subcontractors or other business partners to ensure that such companies have no access to any DOD-related information.  Also of high interest is a provision continuing DOD’s ability to modify contracts due to the impact of inflation.  Companies will still be able to request price and cost adjustments when they can document the impact of inflation on contract fulfillment.  Another provision will require DOD to conduct at least three Commercial Solutions Opening (CSO) acquisitions a year.  This capability is similar to OTA acquisitions in that they are not FAR based.  CSO’s aren’t new but have not been widely used.  This could be of interest to contractors who are positioned to recommend innovative acquisition approaches in what will be a compressed buying season.  Companies that subcontract with small firms should be aware of a provision that requires a prime contractor to cooperate with a contracting officer regarding correcting and mitigating an unjustified failure to make a full or timely payment to a subcontractor once such contracting office determines that there was an unjustified failure by the prime contractor on a covered contract to make a full or timely payment.  The NDAA conference report has passed both chambers of Congress and the President is expected to sign it soon.  Contractors should take the time to review the measure and understand how it may change their business.