Each year, usually in late spring and early summer, the House and Senate Armed Services Committees mark up their versions of the National Defense Authorization Act. For defense contractors it is one of the most important bills Congress considers, and not mainly because of money. The NDAA is where many of the rules of defense acquisition are written, rewritten and tested.
Authorization is not appropriation
Federal spending generally involves two kinds of law. An authorization act establishes or continues programs and policies and sets the terms under which they operate. An appropriations act provides the budget authority to actually spend money. The NDAA is an authorization act. It authorizes funding levels for Department of Defense programs and for national security programs of the Department of Energy, sets policy and personnel rules, and amends the laws that govern defense acquisition. The money itself comes through the defense and military construction appropriations bills.
The NDAA has been enacted every year for more than six decades, a streak few other major bills can claim. Because it reliably passes, Congress often uses it as the vehicle for reforms that might stall on their own.
Why acquisition rules change through the NDAA
A typical NDAA contains a title devoted to acquisition policy and management, along with acquisition provisions scattered through other titles. Over the years, these acts have adjusted thresholds, created and expanded authorities such as other transaction agreements, changed rules for commercial products and services, addressed intellectual property and data rights, set cybersecurity expectations for the defense industrial base and adjusted small business programs. Some provisions apply only to the Department of Defense; others amend government-wide law.
Most provisions do not show up in contracts the day the bill is signed. They are implemented through changes to the DFARS or the FAR, sometimes through interim rules or class deviations, often over months or years. Following the NDAA gives you advance notice of changes that will eventually appear in your solicitations.
The yearly rhythm
- The Armed Services Committees hold posture hearings with military leaders after the budget request is released.
- Each committee marks up its bill and publishes a committee report explaining its provisions.
- Each chamber passes its version, often after considering a long list of amendments.
- House and Senate negotiators produce a final text and a joint explanatory statement.
- The final bill is often enacted late in the calendar year, after the new fiscal year has already begun.
How to follow it efficiently
You do not need to read the whole bill. Start with the committee summaries released after each markup, then search the text and reports for your industry’s terms: your type of service or product, small business, the vehicles you use, cybersecurity, intellectual property. Pay particular attention to provisions that direct the department to issue regulations or guidance by a deadline, since those become the rule changes of the next year or two.
When the final bill is enacted, the joint explanatory statement is the best single guide to what changed and why. Bill text and status are available at congress.gov, and implemented changes appear in the DFARS and FAR, which you can read at acquisition.gov.