New NDAA purchasing rules should benefit government shoppers, small business

The 2018 National Defense Authorization Act (NDAA) rules governing the acquisition of commercial items should give those making relatively small purchases more choices, and small businesses more hope for getting a piece of the federal spending pie.

Since President Donald Trump signed the 2018 NDAA into law on Dec. 12, the focus has been on rules providing a three-fold increase in the micro-purchase threshold for civilian agencies from $3,000 to $10,000.

A micro-purchase, because of its relatively low value, doesn’t require competition. With few limitations, it allows contracting officers to  buy any product from any company, so long as it doesn’t exceed the $10,000 threshold.

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“That’s really, really important because it gives federal employees access to the commercial marketplace on a much greater level. It provides more flexibility, and it shows the confidence we have in federal employees to  comparison shop  just like you and I do, ” Angela Styles told the Federal Drive with Tom Temin

Styles, the former administrator for Federal Procurement Policy in the Office of Management and Budget, now helps companies through the maze of the federal contracting process at the law firm Bracewell.  

“From office products to ‘I need a printer and I need it now,’ anyone in the federal government can go out right now to Amazon.com or Walmart and make a purchase as  long as it’s under $10,000,” Styles said.

A sudden increase in government spending isn’t anticipated, however, as contracting officers wait to see how the NDAA authority is incorporated into  the Federal Acquisition Regulations system (FAR).

The NDAA also set new spending thresholds for bigger contracts. The increased Simplified Acquisition threshold applies to purchases up to $250,000, and above that, the Certified Cost or Pricing Data threshold moves from $750,000 to $2 million. Both have their own 

For purchase between $10,000 and $250,000, the NDAA states some terms and conditions, and a requirement for competition, but it’s simplified.

“This is a ‘give’ to small business in the NDAA,” said Styles. “Hopefully, having such a broad dollar range should benefit small business.”

Given that agencies have met goals for buying from small business the past couple of years, it appears contracting officers have moved to the mindset of trying to buy more from small business. Styles called that a positive trend.

“I think they understand the importance of small businesses to the economy. They want to make those purchases. They get good products and services out of them. And, maybe, often times they are more responsive than some of the large businesses as well.”

Moving up the procurement food-chain, there is the new Certified Cost or Pricing Data threshold which increases from $750,000 to $2 million.

“It’s called the Truth in Negotiations Act,” Styles explained. “It’s where you’re supplying something on a sole-source basis and the government wants more insight into how you priced it.”

She explained that by moving this threshold up, it actually helps the government access more than just commercial products and services, it helps them access new technology more easily without onerous terms and conditions in pricing. It should encourage small businesses.

“Let’s say you’re a young research and development company, this really allows you to enter into an agreement with the government without feeling as nervous about the terms and conditions,” she said.

Styles traces the changes in procurement back to the failure of the Federal Acquisitions Streamlining Act of 1996.

“It  was written in the right way in terms of giving the federal government  flexibility. But at the end of the day, you actually ended up with larger, more onerous contracts than you probably had in the early 90s,” Styles said.

As for the future of the GSA supply schedule, Styles sees GSA’s role evolving.

“That doesn’t necessarily mean it’s going to rely on supply schedules. Certainly there’s going to be a period of time where we continue to rely on them, but I think you’ll see GSA taking a more pro-active role. Which I think is appropriate.”

A lot of the changes under the NDAA will require not just work by GSA, but also the FAR Council and the Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget plays a central role in shaping the new policies and practices.  Styles has confidence the job will get done.

“Absolutely. The changes in thresholds isn’t very hard to do. That won’t take them much time to do. The e-commerce portal — you’ve already seen GSA really aggressively take the lead on that,” she said.

The NDAA passed on Nov. 12.  and GSA had a notice out by the 14th.

“They were ready to go,” Styles said.