Fiscal Year 2015 National Defense Authorization Act (NDAA) - Part 2 in an Occasional Series

This is the second part in a periodic update on the progress of the Fiscal Year 2015 NDAA. You can read the first in the series here. There is nothing new to report as to the Bill is progressing. It still has to be voted on by the entire House and then on to the Senate and probably on to Conference Committee after that. But there are a couple of other provisions that came to our attention after our first posting that will be of interest to some contractors.

First, the bill contains an extension of a spending cap on contract services. This spending cap prevents the Department of Defense from cutting civilian employees and transferring the work to contractors. The following comes from Representative Hanabusa's (Hawaii) official website:

A ... measure ... will extend caps on service contract spending, helping to ensure that work will not be arbitrarily shifted from the civilian workforce to contract workers. Hanabusa's amendment extends the cap on service contract spending through FY15, and would impose no new cuts in contracts.

Secondly, the bill contains a provision that forces DoD to eliminate any unauthorized personal services and contracts for any inherently government functions and reduce the spending on contractors for work close to being inherently governmental. The following also comes from Hanabusa's official website:

A(n) ... amendment would enforce an existing requirement that the Department of Defense eliminate any unauthorized personal services contracts and contracts for the performance of inherently governmental functions, and reduce the number of contracts for the performance of closely associated with inherently governmental functions to the "maximum extent practicable". After five years, the GAO reports that DoD has made little progress towards identifying "at risk" contracts, let alone correcting them. This amendment sets realistic deadlines for compliance and ensures that the Department continues to comply for the next five years.

These two provisions, if they're ultimately passed, will limit opportunities for growth among the services industry sector. In the first case, the Government is prohibited from outsourcing Government civilian jobs. In the second provision, the Government needs to pull back some contracted jobs for positions that involve inherently Government functions.