2020 NDAA to Create New Acquisition Pathways for DOD Software Contracts

The proposed National Defense Authorization Act for fiscal year 2020 introduces new pathways for certain Department of Defense software acquisitions. These proposed software acquisition pathways would be separate from the traditional Department of Defense acquisitions process, and contain sweeping streamlining functions, especially within their supervisory structure. If passed, this new pathway could have a significant effect on how defense agencies acquire software. 

The proposed National Defense Authorization Act (“NDAA”) for fiscal year 2020 would create new pathways for certain Department of Defense (“DOD”) software acquisitions. Specifically, section 801 of the proposed NDAA introduces two new DOD acquisition pathways for the “rapid acquisition” of (1) software applications and (2) software upgrades. If you are an avid SmallGovCon reader, you may recall that this is not the first time that an NDAA has created a unique acquisition pathway or other transactional authority for certain DOD contracts.  

The two proposed software acquisition pathways would be for the rapid acquisition of software applications and software upgrades. The NDAA defines software applications eligible for a unique acquisition pathway as “rapid development and implementation of software applications to be used with commercially available hardware” and defines software upgrades eligible for a unique acquisition pathway as “rapid development and insertion of software upgrades for embedded weapon systems or another hardware system solely used by the Department of Defense.” These software acquisitions would appear to rely heavily on products or hardware already in use by the DOD, allowing for a more rapid acquisition process. 

In addition to meeting the specific definition of “software applications” or “software upgrades,” an acquisition must meet price and time restrictions to qualify. For an acquisition to qualify for one of these pathways, it would need to be under $50 million, and last no more than a year. The contract can contain a one-time option to extend the contract for a period of one year or less, but cannot be for an amount greater than $100 million.  

These proposed pathways are similar in some ways to other “streamlined” DOD pathways—like the middle-tier acquisition pathway—in that they will generally not be subject to the “joint capabilities integration and development system manual” nor be subject to “Department of Defense Directive 5000.01.” In general the joint capabilities integration and development system manual specifies procedures for each acquisition and how to integrate these acquisitions to best fit the priorities of the DOD established by the joint chiefs of staff; while DOD Directive 5000.01 sets the standards for the Defense Acquisition System. These proposed pathways will also require over-arching guidance to be issued by the Department of Defense.   

In addition to not being subject to certain DOD Directives, these proposed software pathways will have a reduced supervision structure. There will be a project manager with significant relevant experience appointed. This project manager will be a government employee and selected from a pool of civilian employees of the DOD or a military department to manage each acquisition. This project manager will then directly report to the service acquisition executive of the military department that submitted the solicitation. 

The proposed NDAA grants this project manager great leeway to conduct rapid software acquisitions. The project manager may hire a technical staff, including experts when needed, and may make trade-offs among costs, requirements, and schedules for each acquisition, so long as these trade-offs are coordinated with the users and testers of the software.  The most interesting proposed power is that the project manager “shall be provided a process to expeditiously seek a waiver from Congress from any statutory or regulatory requirement that the project manager determines adds little or no value to the management of the acquisition.”  

If the proposed software acquisition pathways have implementations similar to other DOD rapid acquisition pathways, there may be some delays in the issuance of clear guidance on how these pathways should function, and some confusion on how the pathways should operate as different portions of DOD begin to utilize them. However, these pathways would be used for very short contracts that appear to build off of or supplement already existing DOD hardware.

The most dramatic portion of these proposed software acquisition pathways appears to be the ability given to the project manager to seek a waiver from Congress for any codified requirement that adds no value to the acquisition. It seems that with this ability to request waivers, the project manager in these situations could avoid the established rule-making avenues, and simply request waivers from certain rules so long as Congress approves. 

The mind can run wild at what those requests for a waiver may look like and what a project manager may request, but it undoubtedly will result in unique issues for any contractor involved in these proposed pathways. Stay tuned to see if this provision stays in the final NDAA signed by the President and if so how DOD implements this new authority.