Jenner & Block

Client Alert: What Contractors Should Know About The FY 2013 National Defense Authorization Act

On January 2, 2013, President Obama signed into law the National Defense Authorization Act for FY 2013 (NDAA or the Act).  The legislation is a mixed bag for government contractors.  On the positive side, efforts to reduce the contractor compensation cap and increase access to internal audits were favorably modified from earlier versions of the bill.  Contractors also welcomed a more balanced approach to costs associated with counterfeit parts, as well as extensions to procedural rules, such as continued simplified acquisition for commercial item contracts until 2015 and the ability to protest defense agency task and delivery orders valued over $10 million, which was extended indefinitely.  Despite these favorable outcomes, the NDAA preserves controversial proposals, like the compensation cap, for further study and consideration.  It also creates new contractor obligations with respect to reporting cybersecurity intrusions, detecting and preventing human trafficking, and expanding FAPIIS disclosures to include trafficking violations as well as parent, subsidiary and successor information.  Below, we examine these and other key provisions.