PSC Summary - Senate Armed Services Committee-passed FY23 NDAA

August 3, 2022

Selected Contracting Provisions in the Senate-passed National Defense Authorization Act for Fiscal Year 2023 (S.4543) On July 18, 2022, the Senate Armed Services Committee introduced their version of the Fiscal Year 2023 National Defense Authorization Act (NDAA), which was approved by the Committee on June 16, 2022.

The annual defense bill provides Pentagon acquisition and business policy and frequently includes provisions that have a broader effect government-wide. Below are some of the provisions in this year’s Senate committee-passed legislation that could impact technology and professional services firms.

The House of Representatives companion bill (H.R. 7900) was passed in that Chamber on July 14, 2022.

Sec. 214: Modification of authority of the Department of Defense to carry out certain prototype projects.

Would streamline follow-on production awards for successful OTA prototype projects.

Sec. 801: Modifications to middle tier acquisition authority.

Would require middle tier of acquisition (MTA) programs to have an approved acquisition plan that includes a life-cycle cost estimate and a pathway to an existing or planned program of record.

Sec. 803: Prohibition on certain procurements of major defense acquisition programs.

Would prohibit DoD from entering into, extending, or renewing a contract to procure any major defense acquisition program that contains items made in, or by companies controlled by, China.

Sec. 804: Revision of authority for procedures to allow rapid acquisition and deployment of capabilities needed under specified high priority circumstances.

Would streamline, resolve inconsistencies and codify rapid acquisition authorities (known as Section 804, MTA authorities).

Sec. 821: Treatment of certain clauses implementing executive order mandates.

Would clarify that change orders implementing a new requirement mandated by an Executive Order would be considered a Government-directed change.

Sec. 822: Data requirements for commercial products for major weapon systems.

Would require offerors for sole source contracts asserting commercial of a type determinations to provide price data to support their bid submissions under certain circumstances.

Sec. 827: Progress payment incentive pilot.

Would require DoD to establish and implement a four-year pilot program to make accelerated progress payments contingent upon responsiveness to Department of Defense goals for effectiveness, efficiency, and increasing small business contract opportunities.

Sec. 841: Analyses of certain activities for action to address sourcing and industrial capacity.

Would require DoD to review certain goods and services and make a determination regarding the applicability of domestic sourcing requirements.

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Sec. 842: Modification to miscellaneous limitations on the procurement of goods other than United States goods.

Would require DoD to conduct reviews every 5 years of the items included on certain domestic sourcing lists.

Sec. 843: Demonstration exercise of enhanced planning for industrial mobilization and supply chain management.

Would require DoD to conduct a demonstration exercise of industrial mobilization and supply chain management planning capabilities; and provide an assessment describing the use cases considered, how the elements of the demonstration exercise were addressed, outcomes, conclusions, and lessons learned, and any recommendation for legislative action.

Sec. 862: Permanent extension and modification of Mentor-Protege Program.

Would make permanent the Department’s Mentor-Protégé Program and increase the participation term from two to three years.

Sec. 863: Small business integration working group.

Would require DoD to create a small business integration working group to improve coordination of the Department's small business efforts.

Sec. 872: Key advanced system development industry days.

Would require periodic industry days to raise awareness within the private sector of capability needs and existing and potential requirements related to the key advanced system development areas.

Sec. 874: Incorporation of controlled unclassified information guidance into program classification guides and program protection plans.

Would require DoD to ensure that all program classification guides, and all program protection plans include guidance for the proper marking for controlled unclassified information (CUI) at their next regularly scheduled update; to establish a process for monitoring progress; and to have all updates completed by January 1, 2029.

Sec. 1624: Plan for commercial cloud test and evaluation.

Would direct DoD to submit a policy and plan to Congress on the test and evaluation of the cybersecurity of the clouds of commercial cloud service providers, within 180 days.

Sec 1627: Requirement for software bill of materials.

Would require a DFARS revision that requires a software bill of materials for all non-commercial software created for or acquired by DoD; and requires DoD to conduct a study of acquiring a software bill of materials for software already acquired by the Department.

Sec. 1631: Limitation on availability of funds for operation and maintenance for Office of Secretary of Defense until framework to enhance cybersecurity of United States defense industrial base is completed.

Would limit certain funding for DoD until the Cybersecurity Maturity Model Certification framework is completed and submitted to the congressional defense committees.

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