Controversial Sect. 838 in NDAA is gone

99 DOD acquisition changes

A problematic provision that would have affected how the Defense Dept.’s small business goals are computed was removed from the National Defense Authorization Act for Fiscal 2017 before its passage. President Obama signed the NDAA into law on Dec. 23.

Section 838 would have allowed the Defense Dept. to count first-tier and second-tier subcontracts on major weapons systems toward small business goals.

Currently, the government has separate goals for small business prime contract and subcontract participation. The Senate version allowed for a mix of the two.

Supporters of the provision said it reflected the fact that very few small businesses are primes on major weapons systems. But critics, including John Shoraka, associate administrator of government contracting at the Small Business Administration, said it would have set a bad precedent, watered down the meaning of small business goals, and hurt small business contractors.

Overall, the NDAA has 99 defense acquisition-related provisions, including these:

• Sect. 813 - Restrictions on LPTA contracting;
• Sect. 821 - Increased micro-purchase threshold to $5,000;
• Sect. 851 - Enhanced reporting by DOD on small business goals;
• Sect. 890 - Study and report on contracts to minority-owned and women-owned contractors.

The NDAA also has 18 small business contracting measures (see Dec. 16, 2016 issue).

Controversial Sect. 838 in NDAA is gone

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