Key Provisions in the 2021 NDAA for Government Contractors

‘Tis the season for holiday cheer and the National Defense Authorization Act (“NDAA”). The NDAA, commonly referred to as “must pass” legislation, is a key legislative vehicle that Congress uses each year to address a wide variety of issues, from defense spending to small business contracting matters. And this year is no different. Based on the recent Conference Report, the 2021 NDAA heading to the President will contain numerous provisions that will impact contractors doing business with the federal government. There is still some intrigue as to whether the President will sign the bill or if there may be further changes, which we will continue to monitor. While we continue to monitor those developments, this blog highlights several key provisions in the current version of the 2021 NDAA that are likely to impact government contractors and small businesses in 2021 and beyond.

Section 214 – Updates to Defense Quantum Information Science and Technology Research and Development Program

Section 214 would require the Secretary of each military department to establish programs and enter into agreements with appropriate medium and small businesses with functional quantum computing capabilities to provide such private sector capabilities to government, industry, and academic researchers working on relevant technical problems and research activities. While details on the business agreements are scant at this stage, it is likely that small and medium-sized IT businesses can expect increased government contracting opportunities should this provision become law.

Section 861 – Initiatives to Support Small Businesses in the National Technology and Industrial Base

Section 861 would direct the Secretary of Defense, the Assistant Secretary of Defense for Industrial Base Policy, and other officials to establish several initiatives to help the Department of Defense (DoD) better leverage small business concerns in its efforts to eliminate gaps and vulnerabilities in the national technology and industrial base, as highlighted by the coronavirus pandemic (COVID-19). This section specifically calls for the DoD to enter into agreements with government contractors that already provide services to military departments or any defense agency, indicating that more opportunities for those contractors may be forthcoming.

Section 862 – Transfer of Verification of Small Business Concerns Owned and Controlled by Veterans or Service-Disabled Veterans to the SBA

For many years, we and others have questioned why the government has two separate federal programs for service-disabled, veteran-owned small businesses (SDVOSB), one administered by the Department of Veterans Affairs (VA) and the other by the Small Business Administration (SBA). Congress has recognized that this creates confusion and unnecessary redundancy and has taken steps in recent years to consolidate the two programs, first with the change a few years ago to one uniform set of SDVOSB regulations under the SBA’s rules. Congress is now implementing the final stage of the consolidation of the two programs via the 2021 NDAA. Pursuant to Section 862 of the 2021 NDAA, Congress would eliminate the VA’s separate certification program through the Center for Verification and Evaluation and would require all SDVOSBs, working with VA or any other federal agency, to be certified through the SBA. SBA would also begin certifying VOSBs as well.

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