National Defense Authorization Act moves a lot of chess pieces

The National Defense Authorization Act, which Congress finished just days ago, moves the marker on several matters peripherally connected to the armed forces. C...

The National Defense Authorization Act, which Congress finished just days ago, moves the marker on several matters peripherally connected to the armed forces. Covington and Burling attorneys Alex Hastings and Michelle Pearce dropped by the Federal News Network studios in Chevy Chase, Maryland to talk with the Federal Drive with Tom Temin.

Interview Transcript: 

Tom Temin Let’s start with the big picture here because there’s a lot of specific provisions throughout this bill. But what fundamentally is Congress and the national security establishment, which informs much of what happens in the NDAA? What are they all saying with this year’s bill? Michele?  

Michele Pearce There is a lot going on in this bill. As I look at the bill, there are some themes that kind of emerge in terms of national security. One theme is it is absolutely critical for our national security agencies to be working more closely and in partnership with industry and private sector partners. So you’ll see a lot of provisions in this year’s bill that enforce this concept that you cannot as a government official, a government agency, do your job on some of these really challenging issues and achieve your mission without reaching out to industry and finding ways to partner. So the concept of public private partnerships are incredibly important in this bill, and you’ll see a lot of provisions that either provide for a mandate to establish a public private partnership in a certain sector, or alternatively demand that the executive branch develop a strategy that incorporates private industry partnerships.   

Tom Temin All right, Alex, you’re the contracting attorney specialist on this side of the equation. If we call Michele the sort of the military analyst with her Army background. What does this all mean? What should contractors understand about this bill then?   

Alex Hastings So Michele is right that there is a lot of opportunity here for public private collaboration with the government, whether it’s supply chain or A.I. there were you know, there were we heard a lot of opportunities. There are a lot of places where the, you know, Congress had rigorous debate about some of the provisions in the bill. But what we didn’t hear a lot about is a lot of places where Congress agreed on issues, whether it was supply chain vulnerabilities when it came to China and Russia, or whether it was the need to assess opportunities for A.I. when it comes to DoD applications. These are areas where I think contractors have a lot of opportunity to work with counterparts in the DoD, whether it’s a public private partnership, whether it’s working with DOD on a, you know, a series of reporting obligations that the NDAA is going to impose on DoD to try to either bolster the supply chain or incorporate artificial intelligence. So there’s a lot of opportunities here, I think, for contractors to get involved in many of these issues.   

Tom Temin And there is a specific theme of Pacific deterrence initiatives, but that also takes place elsewhere in the NDAA, for example, I thought fairly significant provision. You can’t do business with DoD if in the past five years you’ve done business with China, and I don’t know how many defense contractors that actually affects, but it’s kind of a maybe more of a notice to other companies. Take your pick.   

Alex Hastings Yes. And there’s a series of those restrictions in the NDAA. So there’s a there’s broad restrictions like that. There’s also more specific restrictions that relate to batteries or critical minerals. It really is it’s a sort of a warning sign or warning shot to contractors to look critically, both at their supply chains and at their and at who they do business with and their ownership structures to ensure that you have foreign influence in their structure and in their business partners are identified to make sure that, you know, as these restrictions continue to increase, that they’re aware of them and track them closely.   

Tom Temin We’re speaking with Alex Hastings and Michele Pierce. They specialize in defense issues at the law firm Covington & Burling. But the Pacific Deterrence Initiative, that is a specific program.   

Michele Pearce The Pacific Deterrence Initiative is a program associated with funding in which we provide not just military support. And certainly we allow our military to partner with and then exercise existing operations with other friends and allies in the region. It’s a stream of secure funding such that those partners can rely on those authorities and that funding as it operates in all of those locations jointly and cooperatively with the United States.   

Tom Temin Got it. In other words, we can have subs and exercises and all kinds of stuff close to China, whether they like it or not.   

Michele Pearce We can train with other militaries, certainly in that region. And a former chief of naval operations used to say, you know, the tyranny of distance in the Pacific is so incredibly great that if we don’t have those types of relationships with our allies and partners in that theater of operations, we simply are not going to be able to do our jobs.   

Tom Temin Okay. And on that idea of public private partnerships, Alex, I mean, that’s an old idea that they’ve been talking about that for 50 years. What’s different now, do you think, under the NDAA and are there specific provisions to streamline the inculcation of new technology? Again, something DoD leadership has been talking about for ten years now. How can we get these faster to deployment? Just to simplify it.   

Alex Hastings Yeah. No, it’s a good point. Public private partnerships are nothing new. But I think the emphasis on them and the tools available for contractors and the DoD community are new. So, for instance, there is a provision in the NDAA that encourages public private partnerships for rare earth elements. I mean, rare earth elements right now are coming from Russia and China by and large, and they need to be near short or French, short or domestically sourced. And the NDAA directs DoD to look for a rare, look for partners who can help source rare earth elements from more friendly sources. So that’s a direction that I think NDAA, fully DoD will start to implement. In terms of tools, we see what we didn’t have, as you said ten years ago, 15 years ago was the other contracting authorities. This NDAA does a lot when it comes to OTA’s creators and others, other contracting authorities like that, which I think really help public private partnerships that won’t fit in a traditional far covered contract and help those partnerships flourish and really get off the ground.   

Tom Temin Are these all in the 800 series of provisions, the OTA and etc., or. Yeah, expands them to.   

Alex Hastings Expands them to other opportunities? It does the NDAA also. I mean, Congress gives and Congress takes. So they also imposes additional oversight authority over OTAs suggests that, you know, there needs to be more performance reviews for OTA recipients and that sort of thing. So we’re going to see more oversight of these nontraditional agreements. There’s a lot of money flowing through them right now for contractors, but there’s also more procurement authority there as well.   

Tom Temin And finally, what about just the basic units of end strength? What does it say about the size of the Army, Navy, Air Force and shipbuilding, which the Navy has all these multiple plans? They would like to pick one and pursue?   

Michele Pearce The critical question with respect to shipbuilding is, do we have enough ships to execute the Navy’s mission? There is widespread disagreement on that. But I think in my view, you know, reassessing based on military operations both in the Indo-Pacific and certainly in the Middle East right now is critically important. You know, we should always be reassessing and reviewing those plans and those numbers of ships and capabilities related to those ships and what they deliver. Separately I also think that as we look forward to, you know, what are we going to anticipate in the coming months in terms of Congress, You’re going to see continued emphasis on all of these priorities that we’ve outlined in this year’s bill. We are going to see continued scrutiny of sourcing materials, supplies, the numbers of ships, because we don’t have enough ships right now to execute, you know, missions continuously all around the world. We need more. And in terms of other just mission critical capabilities related to critical minerals and other supplies, we don’t have enough of those. So ensuring that we have a strong defense industrial base is a key objective, not just of the Department of Defense, not national and national security strategies, but generally speaking, you know, will remain a significant item of interest in the next Congress, both from Democrats and from Republicans.   

Tom Temin There are hardware dollars, though, in that 888 billion. There’s plenty to buy stuff at this point.   

Michele Pearce Sure. But how you prioritize those dollars, sometimes there is agreement with the administration and sometimes there is disagreement. And ultimately and as I have seen the process play out from both working on the defense authorization committees and appropriations committees, we tend to come to compromises and agreement, even when it doesn’t appear that that is likely to happen. And we typically work very closely together to get those differences resolved in order to get the bills passed.   

Tom Temin And if we could just build an aircraft carrier in two years, we’d really be on top of things. Huh?   

Michele Pearce That would be remarkable.  

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