Subject: Conference Report to Accompany S. 1790 – National Defense Authorization Act for Fiscal Year 2020
The Conference Report to S. 1790, NDAA for FY 2020, is now available and will be considered by the House Rules Committee later today. Links follow along with “small business” excerpts from the Joint Explanatory Statement, and House and Senate Armed Services Committee Press Releases.
Hearing Information: Conference Report to Accompany S. 1790 – National Defense Authorization Act for Fiscal Year 2020
Meeting Information
Tuesday, December 10, 2019 – 3:00pm H-313, the Capitol View Announcement »
Text of Conference report to accompany S. 1790 PDF XML
Conference report to accompany the National Defense Authorization Act for Fiscal Year 2020 (H. Rept. 116-333)
Text of Joint Explanatory Statement PDF
Summary of the NDAA for FY 2020 PDF
(as provided by the Committee on Armed Services)
Joint Explanatory Statement (small business excerpts)
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SUBTITLE E—INDUSTRIAL BASE MATTERS
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Pilot program for development of technology-enhanced capabilities with partnership intermediaries (sec. 851)
The House amendment contained a provision (sec. 879) that would authorize the Commander of U.S. Special Operations Command to use not more than 5 percent of funds required to be expended by the Department of Defense relating to small businesses for a pilot program to increase participation by small business concerns in the development of technology-enhanced capabilities for special operations forces. The authority would terminate on September 30, 2021.
The Senate bill contained no similar provision.
The Senate recedes with an amendment that would revise the authority of the Commander of the United States Special Operations Command to use the greater of $2.0 million or 5 percent of funds required to be expended by the Department of Defense relating to small businesses for the pilot program and limits the scope to contracts and agreements to small business concerns.
SUBTITLE G—SMALL BUSINESS MATTERS
Requirements relating to credit for certain small business concern subcontractors (sec. 870)
The House amendment contained a provision (sec. 873) that would amend section 8(d) of the Small Business Act (15 U.S.C. 637) to clarify that large prime contractors have the ability to receive subcontracting credit for small businesses at lower tiers; strengthen the agency’s ability to collect and review data regarding prime contractors’ achievement of their subcontracting plans; require the prime contractor to keep and maintain records to demonstrate subcontracting credit claimed; and implement a new dispute process allowing small subcontractors to bring nonpayment issues to the agency small business advocate.
The Senate bill contained no similar provision.
The Senate recedes with amendment that would remove the new dispute process for nonpayment issues.
Inclusion of best in class designations in annual report on small business goals (sec. 871)
The House amendment contained a provision (sec. 874) that would amend section 15(h) of the Small Business Act (15 U.S.C. 644(h)) to require the Small Business Administration (SBA) to report Federal spending made through designated “best in class” vehicles, and to report on the dollars awarded through these vehicles to small businesses. Additionally, this section would require the SBA to report the dollar amount of contracts awarded to HUBZone, women-owned, service-disabled veteran-owned, and socially and economically disadvantaged (also known as 8(a)) small businesses.
The Senate bill contained no similar provision.
The Senate recedes.
Reauthorization and improvement of Department of Defense Mentor Protege Program (sec. 872)
The Senate bill contained a provision (sec. 841) that would amend Section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510; 10 U.S.C. 2302 note) to make the Department of Defense’s pilot Mentor-Protege Program permanent and to require that the Department’s Office of Small Business Programs establish performance goals and outcome based metrics for the program. The provision would also direct the Secretary of Defense to direct the Defense Business Board to study the effectiveness of the program and make recommendations for program improvements. Further, the provision would repeal the Department’s half-size standard restriction for protege participants.
The House amendment contained a similar provision.
The Senate recedes with amendments that would extend the pilot program by authorizing new agreements through the end of fiscal year 2024, but limiting them to two years, and would permit reimbursements and subcontracting credits associated with such agreements through fiscal year 2026.
Accelerated payments applicable to contracts with certain small business concerns under the Prompt Payment Act (sec. 873)
The House amendment contained a provision (sec. 883) that would amend section 3903(a) of title 31, United States Code, to accelerate, to the fullest extent permitted by law, the payment date for prime contractors that are small business concerns or that subcontract with small business concerns, with a goal of 15 days. The Senate bill contained no similar provision.
The Senate recedes.
Postaward explanations for unsuccessful offerors for certain contracts (sec. 874)
The House amendment contained a provision (sec. 884) that would revise the Federal Acquisition Regulation to require that contracting officers provide a brief explanation to unsuccessful offerors, if requested, for task or delivery orders in an amount greater than the simplified acquisition threshold and less than or equal to $5.5 million issued under an indefinite delivery indefinite quantity contract.
The Senate bill contained no similar provision.
The Senate recedes.
Small business contracting credit for subcontractors that are Puerto Rico businesses or covered territory businesses (sec. 875)
The House amendment contained two provisions (secs. 888 and 889) that would amend section 15(x) of the Small Business Act (15 U.S.C 644(x)). Section 888 would allow agencies to double the value of subcontracts to Puerto Rico businesses when determining agency compliance with small business contracting goals. Section 889 would allow agencies to double the value of contracts awarded to small business concerns that have their principal office located in the United States Virgin Islands, American Samoa, Guam, or the Northern Mariana Islands, when determining agency compliance with small business contracting goals.
The Senate bill contained no similar provision.
The Senate recedes with an amendment that combines the two provisions.
Technical amendment regarding treatment of certain surviving spouses under the definition of small business concern owned and controlled by service-disabled veterans (sec. 876)
The conference agreement includes a provision that would amend section 632 of title 15, United States Code, to clarify the treatment of certain surviving spouses under the definition of small business concerns owned and controlled by service-disabled veterans.
Extension of loan assistance and deferral eligibility to reservists and members of the National Guard beyond periods of military conflict (sec. 877)
The conference agreement includes a provision that would amend section 636 of title 15, United States Code, by extending the loan assistance and deferral eligibility to military reservists beyond periods of military conflict. The provision would also require the President of the United States to submit to the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate and the Committee on Small Business and the Committee on Appropriations of the House of Representatives a semi-annual report on the number of loans made under the Military Reservist Economic Injury Disaster Loan program and the dollar volume of those loans.
Modification to the Defense Research and Development Rapid Innovation Program (sec. 878)
The House amendment contained a provision (sec. 878(e)) that would amend section 2359a(b)(3) of title 10, United States Code, to increase the maximum per award threshold for projects participating in the Defense Research and Development Rapid Innovation Program from $3.0 million per award to $6.0 million per award, and would direct the Secretary of Defense to report on activities under the program, to include summarizing the proposals received, and associated Small Business Innovation Research (SBIR) program activities, and overall program effectiveness.
The Senate bill contained no similar provision.
The Senate recedes with amendments that would reemphasize the preference under the program for awarding to small business concerns overall, as well as the prioritization of such small business concerns; and would limit the total amount of awards under the program within a fiscal year to no more than 25 percent of the total available for that fiscal year.
Alignment of the Department of Defense Small Business Innovation Research Program and Small Business Technology Transfer Program with the National Defense Science and Technology Strategy (sec. 879)
The House amendment contained a provision (sec. 878(a)) that would direct the Secretary of Defense and the Secretaries of the military departments to align the research topics selected for activities conducted under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs with the National Defense Science and Technology Strategy, and would amend title 15, United States Code, to refer to this strategy to guide the prioritization of the Department’s activities.
The Senate bill contained no similar provision.
The Senate recedes with an amendment that would remove the amendment to title 15, United States Code.
Assistance for small business concerns participating in the SBIR and STTR programs (sec. 880)
The House amendment contained a provision (sec. 882) that would amend the Small Business Act (15 U.S.C. 638) to help small business concerns participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The provision would, among other things, require procurement center representatives and the appropriate Director of Small and Disadvantaged Business Utilization to assist participating small business concerns with researching solicitations and providing technical assistance to bid for federal contracts. The provision would also direct agency senior procurement executives, where appropriate, to assist small business concerns with commercializing research developed under SBIR or SBTT before awarding federal agency contracts.
The Senate bill contained no similar provision.
The Senate recedes with an amendment that would require procurement center representatives to consult with appropriate agency personnel to assist small business concerns in the SBIR program and STTR program, particularly in Phase III, and to provide technical assistance to submit a bid for an award of a federal contract.
Cybersecurity technical assistance under the SBIR and STTR programs (sec. 881)
The House amendment contained a provision (sec. 878(c)) that would permit the Secretary of Defense to enter into an agreement with one or more vendors to provide cybersecurity technical assistance to small business concerns engaged in Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) projects.
The Senate bill contained no similar provision.
The Senate recedes.
Funding for defense research activities of small business concerns (sec. 882)
The House amendment contained a provision (sec. 878(g)) that would amend section 9(f) of the Small Business Act (15 U.S.C 638(f)) to increase the required expenditure amounts for the Department of Defense from 3.2 percent to 4.0 percent, starting in fiscal year 2020.
The Senate bill contained no similar provision.
The Senate recedes with an amendment that would instead direct the Secretary of Defense to report on any assistance to small business concerns in fiscal years 2017 through 2019 under the Small Business Innovation Research and Small Business Technology Transfer programs, and any other research, development, test, and evaluation programs.
Modifications to budget display requirements for the Department of Defense Small Business Innovation Research Program and Small Business Technology Transfer Program (sec. 883)
The House amendment contained a provision (sec. 887) that would amend section 857 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Public Law 115-232; 132 Stat. 1891) to revise budget display requirements for the Department of Defense Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer (STTR) Program.
The Senate bill contained no similar provision.
The Senate recedes. The conferees’ aim is to allow visibility into the SBIR/STTR effort to better support the program, and to support the alignment of each military services’ SBIR/STTR program under the Service Secretary’s strategic vision for their budget.
Pilot program for domestic investment under the SBIR program (sec. 884)
The House amendment contained a provision (sec. 878(b)) that would express a sense of congress encouraging the Administrator of the Small Business Administration to promulgate regulations implementing existing authority under title 15, United States Code, that permits small business concerns that are majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms to participate in the Small Business Innovation Research (SBIR) program. The provision would further direct the Secretary of Defense to establish a pilot program to exercise this authority and make SBIR awards to such business concerns up to 10 percent of the Department’s annual SBIR allocation and would exempt the Department from the requirement for written determinations in advance of such awards. The provision would also direct the Secretary of Defense to include information about the activities under the pilot program in the annual report on the SBIR program.
The Senate bill contained no similar provision.
The Senate recedes with amendments that would eliminate the sense of congress; limit the Department of Defense exemption from the written determination to only those small business concerns meeting certain requirements related to foreign ownership; further expand the information provided in the SBIR annual report; and add a requirement for the Secretary of Defense to notify the Administrator of the Small Business Administration 30 days following an award.
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LEGISLATIVE PROVISIONS NOT ADOPTED
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Pilot program for development of technology-enhanced capabilities with partnership intermediaries (sec. 851)
The House amendment contained a provision (sec. 879) that would authorize the Commander of U.S. Special Operations Command to use not more than 5 percent of funds required to be expended by the Department of Defense relating to small businesses for a pilot program to increase participation by small business concerns in the development of technology-enhanced capabilities for special operations forces. The authority would terminate on September 30, 2021. The Senate bill contained no similar provision.
The Senate recedes with an amendment that would revise the authority of the Commander of the United States Special Operations Command to use the greater of $2.0 million or 5 percent of funds required to be expended by the Department of Defense relating to small businesses for the pilot program and limits the scope to contracts and agreements to small business concerns.
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Size standard calculations for certain small business concerns
The House amendment contained a provision (sec. 872) that would clarify that section 3(a)(2)(C) of the Small Business Act applies to the Small Business Administration (SBA). The section would align the size standards based on data to the Small Business Runway Extension Act of 2018 (Public Law 115-324) by changing the calculation from 3 years to 5 years. This section also would require the SBA to develop a transition plan for small businesses and Federal agencies to help them successfully navigate the transition from the previous 3-year calculation to the new 5-year calculation as mandated and would require that the System for Award Management be updated accordingly.
The Senate bill contained no similar provision.
The House recedes.
Small Business Administration cybersecurity reports
The House amendment contained a provision (sec. 875) that would require the Small Business Administration to issue reports that assess its cybersecurity infrastructure, including determining the country of origin of its information technology components, and report cyber threats, breaches, and cyber attacks.
The Senate bill contained no similar provision.
The House recedes.
Cyber counseling certification program for lead small business development centers
The House amendment contained a provision (sec. 876) that would amend section 21(a) of the Small Business Act by adding cyber strategy training for Small Business Development Centers (SBDCs) and require the Small Business Administrator to establish, or certify, an existing cyber counseling certification program to certify employees at small business development centers (that have directly received a grant from the Administration) to provide assistance to small businesses for planning cybersecurity practices and strategies to respond to cyber attacks. The Small Business Administration would be authorized to reimburse SBDCs for employee certification costs up to $350,000 per fiscal year.
The Senate bill contained no similar provision.
The House recedes.
Exemption of certain contracts from the periodic inflation adjustments to the acquisition-related dollar threshold
The House amendment contained a provision (sec. 877) that would amend subparagraph (B) of section 1908(b)(2) of title 41, United States Code, to exempt certain contracts from the periodic inflation adjustments to the acquisition-related dollar threshold. The Senate bill contained no similar provision.
The House recedes.
Phase 0 Proof of Concept Partnership program for the Department of Defense
The House amendment contained a provision (sec. 878(d)) that would amend section 9(jj) of the Small Business Act (15 U.S.C 638) to change references to “The Director of the National Institutes of Health” to “A covered agency head” which is defined as the Director of the National Institutes of Health (NIH) for NIH Small Business Technology Transfer (STTR) programs or the Secretary of Defense for Department of Defense STTR programs.
The Senate bill contained no similar provision.
The House recedes.
Briefing on the Trusted Capital Marketplace pilot program
The House amendment contained a provision (sec. 885) that would require the Secretary of Defense to provide a briefing to congressional defense committees on the progress of the Trusted Capital Marketplace pilot program.
The Senate bill contained no similar provision.
The House recedes. The conferees understand that the Secretary of Defense is intending to establish a Trusted Capital Marketplace pilot program to link technology startup companies with trusted sources of capital in areas relevant to defense missions. The conferees direct the Secretary of Defense to provide a briefing on the progress of the Trusted Capital Marketplace pilot program to the congressional defense committees to include plans for how the program will: align with critical defense requirements; use the acquisition flexibilities authorized under recent National Defense Authorization Acts; be coordinated with other research and engineering technology investment programs, including the Small Business Innovation Research program; and be managed and resourced so as to evolve into a stable, funded activity. The conferees direct the Secretary to provide this briefing no later than 6 months after the date of enactment of this Act.
Boots to Business Program
The House amendment contained a provision (sec. 886) that would codify and permanently authorize the Boots to Business program.
The Senate bill contained no similar provision.
The House recedes.
Report and database on items manufactured in the United States for major defense acquisition programs
The House amendment contained a provision (sec. 892) that would amend chapter 144 of title 10, United States Code, by inserting a new section requiring the Secretary of Defense to submit a report to the congressional defense committees assessing the domestic source content of procurements carried out in connection with major defense acquisition programs. This section would also require the Secretary of Defense to establish an information repository for the collection of domestic source content information.
The Senate bill contained no similar provision.
The House recedes.
Contractor science, technology, engineering, and math programs
The House amendment contained a provision (sec. 894) that would deem the cost of participating in certain science, technology, engineering, and math (STEM) programs an allowable cost under a contract between the contractor and the Department of Defense.
The Senate bill contained no similar provision.
The House recedes. The conferees note the importance of developing a world class cadre of technical talent who can perform critical STEM job functions in both government and industry, including a number which require security clearances. The conferees believe that a strong partnership between the defense industry and the Department of Defense can stimulate efforts to increase that pool of STEM talent. Therefore, the conferees direct the Secretary of Defense to enter into an arrangement with one or more academic institutions to study and develop policy options and recommendations to promote DOD-defense industry collaboration in STEM education activities. The conferees note that these partnerships should be primarily focused on developing collaborative DOD-industry activities relevant to: creating a clearable technical workforce to meet defense missions, supporting educational opportunities for defense sector personnel in both government and industry, and increasing educational opportunities for veterans and military dependents. Further, the study should focus on activities which are based on metrics and education best practices to ensure maximum effectiveness. The conferees direct that the study, accompanied by an assessment and plan for the Secretary to implement the recommended policy options, if appropriate, should be delivered to the congressional defense committees no later than October 1, 2020. The conferees direct that Secretary to ensure that the study is developed in consultation with industry, education experts, and all appropriate defense organizations with expertise in STEM education.
The House Armed Services Committee has also issued a Press Release: House and Senate Armed Services Committees Complete Conference for the FY20 National Defense Authorization Act (12/9/19) (https://armedservices.house.gov/press-releases?ID=F9E89B3C-3934-48AA-AD48-03E1EE659751 ) and Summary (https://armedservices.house.gov/_cache/files/f/5/f50b2a93-79aa-42a0-a1aa-d1c490011bae/3552B8ED0CB74FB28CC88F434EFB306A.fy20-ndaa-conference-summary-final.pdf). The Senate Armed Services Committee released a similar Press Release: Senate and House Armed Services Committees Complete Conference on FY20 National Defense Authorization Act (12/9/19) (https://www.armed-services.senate.gov/press-releases/senate-and-house-armed-services-committees-complete-conference-on-fy20-national-defense-authorization-act).
Excerpts from the Armed Services Committees’ Summary follow.
Supporting the Civilian Workforce The conference agreement provides 12 weeks of paid parental leave to all federal civilian employees. The conference agreement also ensures that civilians moving as part of their employment within the federal government are not taxed for their relocation expenses paid by the government. In addition, it provides a one-year extension on authorities for certain allowances, benefits, and gratuities for civilian personnel on official duty in combat zones. Finally, the conference agreement extends and expands several hiring authorities so that the Department of Defense can quickly hire civilian personnel into key areas, such as the defense industrial facilities (shipyards, depots, and arsenals) and Major Range and Test Facilities until 2025.
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Industrial Base Resiliency: The FY20 NDAA continues the work of previous NDAAs to enable the DoD to assess and mitigate risks to its supply chain posed by advanced intelligence services like China and Russia that seek to exploit vulnerabilities to erode our military advantage.
The NDAA:
- Modernizes risk assessment and mitigation across DOD’s contracting processes to strengthen decision-making about which suppliers to use;
- Strengthens reporting to Congress on key industrial base vulnerabilities and plans to address them, including with partners and allies.
- Improves insight to and mitigation of risks posed by foreign ownership, control and influence of defense contractors;
- Improves insight to contractors’ adherence to law and regulation pertaining to human rights and human trafficking, workplace safety, labor standards, sexual harassment, and fraud;
- Reduces reliance on foreign sources of rare earth minerals;
- Repairs microelectronics supply chain security; and
- Enhances manufacturing and small business innovation.
Accelerating Defense Innovation The FY20 NDAA aspects of the Accelerating Defense Innovation Act to assist DOD’s efforts to access new sources of innovation. It establishes inclusive pathways for the most promising small businesses to commercialize their innovations for the DOD market. The NDAA increases DOD’s engagement with innovation hubs across the country by establishing a Joint Reserve Detachment at Defense Innovation Unit locations and authorizing $75 million to the Defense Innovation Unit for the creation of a National Security Innovation Capital Fund.