Recent National Defense Authorization Act Presents Opportunities for Small Business Contractors


The recently enacted National Defense Authorization Act for Fiscal Year 2014 (NDAA 2014) contains some noteworthy provisions that will impact how small business contractors compete for and perform Federal contracts. The NDAA 2014 provisions relating to small business contracting reflect the continued efforts to assist small businesses in navigating the Federal procurement process and to incentivize the utilization of small business subcontractors with the ultimate goal of increasing competition by small businesses in the Federal marketplace.

Credit for Certain Small Business Subcontractors -

The NDAA 2014 (Sec. 1614) encourages greater use of small business contractors on Federal procurements through an amendment to the Small Business Act, which allows single award prime contractors to receive credit towards the achievement of their small business subcontracting plan percentage goals by utilizing small businesses to perform work as lower-tier subcontractors. This change will increase opportunities for small businesses to work as subcontractors on Federal contracts, by expanding the subcontractor pool from which prime contractors may fulfill their small business subcontracting percentage goals. The ultimate result, however, may not be as beneficial for small businesses as hoped. Instead of incentivizing large business prime contractors to increase the utilization of small businesses as subcontractors, this provision may simply push small businesses further down the contracting tier to second- and third-level subcontractor positions, while other large businesses take the more advantageous first-tier subcontracting roles.

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Topics:  DOD, Federal Contractors, NDAA, Small Business, Subcontractors

Published In: Government Contracting Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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