The 2020 NDAA's Impact on Government Contractors

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On December 17, 2019, the Senate passed the National Defense Authorization Act (NDAA) for Fiscal Year 2020, sending it to the White House for the President’s signature. As with prior NDAAs, the 2020 NDAA includes a number of provisions that affect procurement policy, management, and related matters. Below, we summarize some of the more notable provisions that will impact government contractors.
 
Section 823 – Modification of Justification and Approval Requirement for Certain Department of Defense Contracts
Section 823 of the 2020 NDAA increases the threshold for justification and approval for 8(a) Program sole-source awards.  While the 2010 NDAA required justification and approval for 8(a) Program sole-source awards valued at or above $20 million (later increased to $22 million), Section 823 of the 2020 NDAA increases this threshold to $100 million.  This change will benefit entity-owned 8(a) Program participants because, under the Federal Acquisition Regulation (FAR) and Small Business Administration’s (SBA) regulations, those are the only participants eligible for sole-source awards above the competitive thresholds ($7 million for manufacturing contracts and $4 million for all other contracts).
 
Section 872 – Reauthorization and Improvement of Department of Defense Mentor-Protégé Program
Section 872 of the 2020 NDAA makes many notable changes to the Department of Defense’s (DoD) Mentor-Protégé Program. Besides permanently authorizing the program, Section 872 requires DoD’s Office of Small Business Programs to establish performance goals and periodic reviews to be submitted to the congressional defense committees by February 1, 2020. This serves to improve outcomes, define expectations, and set measurable goals for the DoD Mentor-Protégé Program going forward.

Notably, Section 872 changes the definition of a “disadvantaged small business concern” to align with how small businesses are defined in other programs. To be considered small, the original definition required a business to have “less than half the size standard corresponding to its primary North American Industry Classification System code.”  The new definition states that a disadvantaged small business concern must not exceed the size standard corresponding to its primary NAICS code.  
 
Section 874 – Post-Award Explanations for Unsuccessful Offerors for Certain Contracts
Section 874 requires the FAR to be revised within 180 days to require that contracting officers provide a brief explanation of award, upon written request from an unsuccessful offeror, for task order or delivery order awards in an amount greater than the simplified acquisition threshold and less than or equal to $5.5 million issued under an indefinite delivery-indefinite quantity contract.  Currently, offerors are only entitled to a debriefing after award of an order exceeding $5.5 million.

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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