DoD calls for more contracting flexibilities in 2025 NDAA

As Congress prepares to draft the 2025 National Defense Authorization Act, defense officials are asking lawmakers to include provisions that will enable greater flexibility in contracting procedures.

For example, the Defense Department can issue undefinitized contract actions, which authorize contractors to begin work within several weeks, well before all contract terms are finalized.

The department usually turns to undefinitized contract actions when it’s absolutely necessary since they involve inherent risks, including cost overruns as the contract progresses and uncertainties about final contract terms. But Pentagon officials are urging Congress to incorporate language into legislation that would provide the department with greater contracting flexibilities to accelerate procurement and fielding of innovative technologies.

“We need the contracting flexibilities that we have for Ukraine, we need that more broadly in other places,” William LaPlante, the under secretary of Defense for acquisition and sustainment, said during the House Armed Services Committee hearing on Feb. 15. “That’s really key.”

LaPlante said the department also needs lawmakers’ help with streamlining its IT security approvals process.

“The other key is rapid Authority to Operate new IT systems for cyber. Every time it comes up in a new system, it’s a different journey,” LaPlante said.

Doug Beck, the Pentagon’s Defense Innovation Unit chief, said there is a need for legislative action to address recruiting challenges. The current process doesn’t allow to quickly bring highly skilled professionals on board, and Beck said his team already has the language they want to put into law.

“We have incredible people who speak fluent military ease and tech sector ease who want to take 95% pay cuts and come work for us in the department to get after this mission, and we need to make it easier for them to come and do that. It’s very frustrating how hard that is to do for them and for us. We have the language. What we are asking is nothing new. It’s just authorities that already exist in [Defense Advanced Research Projects Agency] or [Space Development Agency], we just need that help,” Beck said.

Heidi Shyu, the under secretary of Defense for research and engineering, said her office already has enough authority under the Accelerate the Procurement and Fielding of Innovative Technologies program, or APFIT, to help companies pass over the valley of death and get innovation to scale. While her office has the authority to execute the projects, it is still awaiting a full appropriation to make additional selections for APFIT projects.

The APFIT program, established under the fiscal 2022 defense bill, is a competitive initiative for innovative and mature technologies that can meet military needs but don’t have enough funding to transition the capability into the production phase.

In fiscal 2022, Congress allocated $100 million for APFIT projects and increased funding to $150 million in fiscal 2023.

Over the span of two years, DoD selected 21 companies to receive APFIT funding to acquire innovative technologies from small businesses and non-traditional defense contractors.

“What would really help is for us to get the fiscal 2024 budget. I have a number of other companies waiting to get funded,” Shyu said.

Congress returns from recess on Wednesday, and it will have three days until the current continuing resolution expires for some parts of the government, including funding for military construction projects. Next week, the other part of the continuing resolution, which is funding the rest of the federal government, will expire as well.

LaPlante urged Congress to pass the 2024 budget so the Pentagon can ramp up production lines.

“We have no more supplemental; we were largely rebuilding our industrial base on the supplemental. On the counter UAS, we’re waiting to get the money so we can start turning up these production lines,” LaPlante said. “I would just ask all of us to start thinking about the production side of things, which we frankly haven’t thought of as a country for many, many years. And I think that’s something we’re going to have to change.”

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