Local construction contractors would receive new contracting preferences for Department of Defense contracts under the version of the 2022 National Defense Authorization Act passed by the House of Representatives on September 23.
During floor debate on the 2022 NDAA, the House agreed to an amendment proposed by representative Andy Kim. The amendment requires, to the extent practicable, that DOD give a preference to construction contractors who hire local employees. The amendment also requires all contractors and subcontractors for military construction projects to be licensed in the state where the work is to be performed.
Representative Kim’s amendment requires that “to the extent practicable, DoD shall give preference for military construction contracts to firms that certify that at least 51 percent of employees hired to perform the contract shall reside in the same State or within a 60-mile radius.” The amendment does not establish when it might be impractical to impose such a requirement, nor does it provide additional details on implementation of the requirement, such as what documentation DOD would require to verify compliance. If the bill becomes law as-is, specifics like these will be left up to the DOD as part of a DFARS revision.
The Kim amendment also “requires all contractors and subcontractors for military construction (MilCon) projects be licensed in the state where the work is to be performed.” Unlike the 51-percent requirement, the amendment does not use qualifying language like “to the extent practicable” when it comes to local licensure, indicating that this would be an across-the-board requirement.
Representative Kim’s amendment was adopted on a voice vote without objection, suggesting that the new requirements enjoy bipartisan support. However, the amendment is not yet law: the 2022 NDAA now moves to the Senate, and the fate of the Kim amendment likely rests with a House-Senate conference committee.
These new requirements would represent significant changes to the DOD construction contracting landscape–presumably benefitting local companies at the expense of out-of-state rivals. My colleagues and I will keep you posted as the debate over the 2022 NDAA continues.
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