Changes Enacted By The John S. McCain National Defense Authorization Act

On August 13, 2018, President Trump signed into law the John S. McCain National Defense Authorization Act for fiscal year 2019 (FY 2019 NDAA).  This is the earliest an NDAA has been signed in a decade.  As is always the case, the NDAA authorizes (does not appropriate) activities in a whole range of defense areas (think fighter jets, submarines, cyber espionage etc.).  However, as it always does, the NDAA also includes provisions that are relevant to US government contractors and subcontractors.  Some of these direct the DoD to undertake actions or plans and does not change law or regulations in themselves – for example, it directs the agencies to study the frequency of bid protests and develop a plan for expedited protest or for the GSA to develop competitive procedures for procurements made through commercial e-portals.

In other areas, the NDAA explicitly stipulates changes in existing law or regulation.  Some of the more significant in the FY 2019 NDAA are:

-          Section 852 directs DoD to make prompt payments to small business concerns at both the prime and sub level with the goal of making payment within 15 days of receiving an invoice -this directs an actual change in the language of the US Code section dealing with prompt payment of small business contractors (10 USC 2307).

-          Eliminates the term “commercial “item” which encompassed both commercial products and commercial services and replaces them with separate definitions of “commercial product” and “commercial services” in 41 USC 103 and “commercially available off the shelf item” in 41 USC 104 to refer only to commercial products.  In itself, these revisions do not fundamentally change the terms as currently used (the FAR currently has a separate definition for commercial services). However, the other changes effective in January 2020 will identify which statutory provisions apply to commercial products, commercial services or both will be important.

-          Continues the micro purchase threshold of $10,000 for e-commerce portal purchases

These specific changes and others in the NDAA may require issuance of agency directives, FAR or DFAR changes or deviations to actually implement the provisions.  PCG will monitor those changes and keep our clients posted.

Written by Tom Suher. You can contact Tom for further details at 336.379.0442.