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2024 NDAA expected to be signed by President Biden

Significant provisions of interest to government contractors

The president is expected to sign the 2024 National Defense Authorization Act (NDAA) — authorizing appropriations for fiscal year 2024 for military activities of the Department of Defense (DOD), military construction and for defense activities of the Department of Energy.

The NDAA for fiscal year 2024, which runs from Oct. 1, 2023, to Sept. 30, 2024, authorizes a total of $886 billion for national defense activities — $841 billion for the DOD including $169 billion for procurement, $146 billion for research, development, test and evaluation (RDT&E) and $289 billion for operation and maintenance (O&M).

In addition to authorizing annual appropriations for the DOD, the NDAA also prescribes policy for the Department. Title VIII of the law specifically addresses “Acquisition Policy, Acquisition Management, and Related Matters” and, for companies that do business with the DOD, Title VIII contains important provisions they must be aware of. The 2024 NDAA includes provisions that help address impacts of sustained high inflation, improve contract financing and reduce reporting burden on contractors along with other significant requirements designed to help ensure DOD remains a valued customer.

Some of the sections of the 2024 NDAA that are significant to government contractors include:

  • Section 802. Requires DOD to develop a framework for refining the parameters of what would constitute a denial of uncertified cost or pricing data.
  • Section 824. Extends DOD’s authority to modify certain contracts based on impacts of inflation.
  • Section 826. Authorizes DOD to use appropriated funds to modify the terms and conditions of a contract or option to provide an economic price adjustment.
  • Section 827. Requires DOD to update policies to exempt software contracts and subcontracts from earned value management (EVM) requirements and to increase contract value thresholds associated with requiring EVM on cost or incentive contracts.
  • Section 874. Authorizes a pilot program to incentivize contractors by paying a progress payment rate that is up to 10 percent higher than the customary progress payment rate.
  • Section 875. Requires a DOD feasibility study and recommendations on ways to improve the acquisition of commercial products and services.

Have questions about the 2024 NDAA and how it might impact your organization? Baker Tilly’s government contractor solutions team can help you navigate the complexities of this 3,000-page policy document and explore how its many important provisions may impact your business.

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