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Section 822 of the 2023 National Defense Authorization Act, Public Law No. 117-7776 (Dec. 23, 2022) provides new authority for some defense contractors and subcontractors to obtain price increases that address the impacts of inflation. The new authority is welcome relief for contractors and subcontractors holding fixed-price defense contracts, which typically do not allow a price increase due solely to inflation.

The Senate passed the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 [pdf] on Friday, December 12, 2014. President Obama is expected to sign the bill into law. The $585 billion bill authorizes the Pentagon’s activities in FY 2015. It includes $521.3 billion in base defense spending and another $64 billion in war funding. Here is a summary of the procurement reform initiatives that will be relevant to contractors in the upcoming year:

  1. Cyber incident reporting for operationally critical contractors. Section 1632 of the 2015 NDAA directs the Secretary of Defense to designate and notify “operationally critical contractors,” a term narrowly defined in the bill. After notification, designated contractors will be required to report to the Department of Defense each cyber incident with respect to any network or information system of such contractor. Reports must include: an assessment of the effect on the contractor’s ability to meet the Department’s contractual requirements; the technique used in the cyber incident; any sample of malicious software obtained; and a summary of information compromised by the incident. Despite the disclosure requirement, section 1632 provides for protection of contractor trade secrets and confidential commercial or financial information. It also limits the dissemination of information obtained to relevant entities and agencies.
  2. Enhanced authority for non-DOD Chief Information Officers. Section 831 of the NDAA increases the role of Chief Information Officers of agencies other than the Department of Defense. It provides that an agency may not enter into a contract for information technology unless the contract has first been reviewed and approved by the agency’s Chief Information Officer. The head of each covered agency must ensure that its Chief Information Officer has a significant role in all annual and multi-year planning, budgeting, and reporting related to information technology. The bill requires the Director of OMB and the Chief Information Officers of appropriate agencies to increase the efficiency and effectiveness of information technology investments and to develop opportunities to consolidate the acquisition and management of information technology services. The Chief Information Officer of each covered agency is directed to inventory agency data centers and develop a multi-year strategy for consolidation and optimization of those data centers inventoried.
  3. DOD CIO positions consolidated. Section 901 of the 2015 NDAA incorporates a DOD proposal to combine the positions of Chief Information Officer and Deputy Chief Management Officer into the position of Under Secretary of Defense for Business Management and Information. The new Under Secretary will oversee business operations, personnel, and IT projects and will be appointed by the President with the advice and consent of the Senate. This change will not take place until the next administration.

It should come as no surprise that the contracting policy changes in the National Defense Authorization Act for 2014 [pdf] reflect a continued focus on reducing spending. But they also encourage collaboration between the government and the private sector and emphasize the need for innovative contracting strategies and greater flexibility in the procurement process, which may benefit contractors in the long run. Here is a breakdown of a few of the highlights:

  • Extension of restrictions on contractor services spending. Section 802 of the 2014 NDAA amends Section 808 of the 2012 NDAA to extend the temporary limit on the amounts obligated for DOD spending on contract services in FY 2014 to the amount requested for contract services in the President’s budget for FY 2010. It also requires that the heads of each Defense Agency continue the 10-percent-per-fiscal-year reductions in spending for staff augmentation contracts and contracts for inherently governmental function for FY 2014, and requires that any unimplemented amounts of the 10 percent reductions for FY 2012 and FY 2013 be implemented in FY 2014.

Section 827 of the 2013 National Defense Authorization Act [pdf] permanently enhances whistleblower protections for employees of DoD and NASA contractors and sub-contractors. Section 828 establishes a“pilot program” to provide enhanced whistleblower protections for employees of civilian

agency contractors and subcontractors for the next four years. In plain English, here is a look at what the enhanced…

We have dedicated multiple posts to understanding the scope of jurisdiction over protests of task and delivery orders. Previous posts can be found here and here. Thanks to an amendment contained in the 2013 National Defense Authorization Act [pdf], the issue remains somewhat unsettled. Fortunately, Congress still has a few years to set the record straight.

Before the 2013 NDAA, disappointed offerors could protest the issuance of task and delivery orders valued over $10 million regardless of whether the order was issued by a civilian or Department of Defense (DoD) agency. Both of the authorizing statutes providing for task order protest jurisdiction on civilian and DoD orders over $10 million were set to expire on September 30, 2016 (the “sunset provisions”).

Section 830 of the 2013 NDAA amends 10 U.S.C. § 2304c(e) by eliminating the sunset provision, providing for permanent GAO jurisdiction over challenges to DoD task and delivery orders over $10 million. However, this amendment applies only to the statute authorizing jurisdiction over DoD task and delivery orders. The corresponding statute providing for task order protest jurisdiction over civilian agency task and delivery orders over $10 million, 41 U.S.C. § 4106(e), is still set to expire on September 16, 2016. 

The National Defense Authorization Act for Fiscal Year 2012 [pdf] puts an end to OFCCP’s effort to impose subcontractor status on retail pharmacies and health care providers serving TRICARE beneficiaries. The controversy had been brewing for some time. As we discussed in an earlier client alert, the October 2010 decision in OFCCP v. Florida Hospital, …

The FAR Councils have issued a final rule addressing the prevention of personal conflicts of interest (PCOIs) for contractor employees performing acquisition functions closely associated with inherently governmental functions. 76 Fed. Reg. 68,017 (Nov. 2, 2011). The final rule amends the FAR to add Subpart 3.11 and a corresponding contract clause (FAR 52.203-16) requiring contractors to identify and prevent PCOIs of their covered employees and prohibiting covered employees who have access to non-public information gained by performance of a government contract from using it for personal gain. This Subpart implements the requirement set out in section 841(a) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009.