What is That ‘NDAA’ and Why Do I Keep Hearing About It?

By Ann Sullivan, WIPP Chief Advocate

Around this time of year, you will start to see communications from the WIPP policy team around getting legislation important to women owned businesses “into the NDAA.” If you have been around long enough, you have probably heard me decode this legislative strategy. WIPP has used this vehicle to pass a number of bills into law – including sole source authority for WOSBs. So, the question is, how can legislation about small business wind up in something authorizing defense? Let’s start with a little history of the Act.

The National Defense Authorization Act (NDAA) is one of the last “must pass” pieces of legislation left in Congress. Since the Constitution requires that Congress provides for a common defense, this bill is considered to be “must pass.” Therefore, every year for the past 58 years, Congress has passed the NDAA. Not to be confused with defense appropriations, with “defense” in the title, the purpose of the massive bill is to authorize defense policies and programs under which the funding levels are set.

Even though the bill is “must pass,” that does not necessarily mean must pass on time. In 33 years, the NDAA been passed only three times before the start of the new fiscal year. However, one of the three times was last year’s FY2019 NDAA.  The other two years the NDAA was signed on time were FY1997 and FY1978. ***Note: the calendar year the bill is passed and the fiscal year for the NDAA do not align. Congress is always working on it for the next fiscal year – therefore, Congress is currently working on the FY2020 NDAA.

So where does small business enter the mix? The bill falls under the jurisdiction of the Armed Services Committees in both the House and Senate, not the Small Business Committees. Each year, both sides of Congress craft their own version NDAA to pass in their respective chambers. Next, they come together with negotiators and hammer out the differences. Since this is not under Small Business Committee jurisdiction, adding small business provisions is a more internal process. Meaning, you won’t see us tell you about a public hearing to review proposed small business provisions, instead the House and Senate Small Business Committees work with the Armed Services Committee Members to include relevant small business provisions. The NDAA has not always had small business changes. In recent years, small business advocates in Congress realized that a stated U.S national security policy—the need for a strong industrial base— justifies inclusion of small business legislation. The NDAA quickly became the go-to legislation for procurement changes to small business programs.

A prime candidate for inclusion this year is a bill that would help bring parity to sole source authority for small businesses, especially WOSBs/EDWOSBs. H.R. 190, the “Expanding Opportunities for Small Businesses Act of 2019,” would increase sole source contracts for women, veterans and HUBZones at the amounts of $4 million and $7 million each year, instead of the life of the contract. It also raises the sole source dollar threshold for construction and manufacturing from $6.5 to $7 million. This legislation passed the House and is ready for Senate action. With category management shifting the way the government buys, contracting officers will have a bigger incentive to award work to small businesses if this bill passes. It’s time to mobilize around this huge opportunity for women-owned small businesses. The NDAA might just be the mechanism to get it done.