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2018 National Defense Authorization Act opens up opportunities for more small and large businesses

On December 12, 2017, President Donald Trump signed the 2018 National Defense Authorization Act (NDAA). A number of the provisions increase opportunities for large and small businesses and open the Government contracting market to a number of vendors who otherwise might not be interested.

Small purchase threshold increased

A good bit of Government procurement red tape can be eliminated when the Government makes what it calls a micro-purchase. The size of a micro-purchase has been increased from $3,500 to $10,000 (§ 806). Essentially, a micro-purchase allows a Government agency to issue a purchase order for an item without going through a formal bidding process. In fact, other provisions of the act provide for Government agencies to simply purchase items on line through e-commerce portals (§§ 846-850). This provision potentially increases the Government’s ability to quickly procure commercial products and services commonly available to the private sector.

Simplified acquisition threshold increased

The Government currently has a simplified acquisition process for contracts valued at less than $100,000. This threshold has been increased to $250,000 (§ 805).

Threshold increased for requiring detailed pricing and cost information

Current law provides that for any procurement greater than $750,000, the vendor must provide detailed pricing and cost information. Having to provide this detailed information has discouraged many vendors from selling their products to the Government. The mandatory requirement for this detailed information has been removed (§ 811). However, contracting officers will have the option to require this information if they think it’s important to the Government’s procurement process.

Once a commercial item, always a commercial item

For a number of years, Congress has been trying to encourage Government agencies to meet their needs by purchasing more commercially available products instead of contracting for special Government-unique products. Despite Congressional encouragement, quite a number of complex decisions have built up over the years to discourage this practice. In particular, one of the problems has been that items have been procured as “commercial” (thereby being eligible for a simple procurement process) at some point in the past. Then at a later point, they are reclassified as “not commercial” (thereby requiring a more complex procurement process). The 2018 NDAA establishes a rule that once an item is been classified as commercial, it must remain commercial for future procurements (§ 848).

Summary

These and other developments should encourage greater participation in the Government market place and may make it easier and less costly for vendors to sell their products to the Government. However, don’t expect these improvements to be implemented quickly.

Items on this web page are general in nature. They cannot—and should not—replace consultation with a competent legal professional. Nothing on this web page should be considered rendering legal advice.

© 2017

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Friday, 21 September 2018

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