Erica R. McCann photo
Christmas in July for Defense Contractors following the NDAA?

The National Defense Authorization Act (NDAA) often earns the nickname “the Christmas Tree bill,” not only because it tends to act as a catch-all for a variety of unrelated pet project amendments, but also because, like the holiday, its passage usually comes in late December. However, this year’s NDAA bill is poised to pass both chambers before the August recess.

The House and Senate Armed Services committees are currently in the laborious conferencing process of harmonizing the two chambers’ versions of the bill now. Last week, the IT Alliance for Public Sector (ITAPS), weighed in to express the information technology (IT) industry’s perspectives on key procurement provisions being considered during the conference that will affect federal contractors offering hardware, software, IT services, and solutions to the federal government.

NDAA provisions focusing on improving commercial access to the federal marketplace are of particular interest to our members as this was a major tenet of our IT Acquisition Reform Principles. ITAPS enthusiastically supported the legislation’s provisions and offered our suggestions on how to marry up the similar provisions in each of the bills to improve how the federal government acquires commercial technologies. Those provisions can also lay important groundwork for streamlining commercial item acquisitions, improving the tools needed to determine price reasonableness, and limiting the conversion of commercial items into a more complex procurement method.

Additionally, ITAPS expressed its concerns and opposition to only two provisions in the current NDAA bill and encouraged the committees to leave them out of the final conference report. Those sections were:

  • House Section 863, Extension of limitations on aggregate annual amount available for contract services: The Fiscal Year (FY) 2012 NDAA, Public law 112-81, capped Department of Defense (DOD) spending for contract services at the level of the president’s request for FY 2010 and the cap has been extended each year since. This cap limits the government’s ability to keep pace with the evolution of the commercial services market, effectively limiting its ability to obtain new or evolved service offerings because the labor rates DOD can contract for are below market value. Examples of the kinds of services acquisitions that are hampered by the perpetuation of very old labor rates include cybersecurity engineers and technicians, cloud computing capabilities, network architecture and storage, data management and analysis, services to evaluate and deploy the Internet of Things and all of the technology-as-a-service offerings for infrastructure, software and platforms. In addition to preventing existing and traditional defense primes and suppliers from effectively evolving labor rates for the skills necessary for their contracted offerings, the limitation is a direct contradiction to the efforts of the House and Senate to attract non-traditional companies to the DOD. By limiting the labor rates these companies can receive to FY 2010 levels, the DOD harms its ability to compete in the global commercial market for new talent and capabilities.
  • Senate Section 821, Preference for fixed price contracts in determining contract type for development programs: ITAPS opposes establishing a preference for fixed price contracts for development programs set forth in this provision. Given the high level of cost, schedule, and performance risk for both contracting parties when acquiring developmental capabilities on a fixed price basis, we believe contract type decisions should be based on program maturity and risk profile appropriate for the size and complexity of the work and the nature and scope of the capabilities being developed.

We’re pleased by the progress the House and Senate Armed Services committees have achieved so far and for their outreach to the various stakeholder communities as they look to improve acquisitions at the Pentagon. We share in that long-term goal, and as the process continues into the following years, we hope to see much of the good work being pioneered at the Pentagon applied governmentwide so that all agencies can benefit from streamlined, 21st-century procurement methods and incentives.

Public Policy Tags: Public Sector