FY25 NDAA is Finally Here
Just in time for the holidays. . .
Congress published the bi-cameral FY25 NDAA bill and plan to vote on it this week.
Defense Tech and Acquisition Substack subscribers have seen this bill progress this year with multiple updates from us.
Key Themes
Some of the key themes we see in this update include:
Continual support for improving acquisition of commercial solutions through reduction of certain regulations, improving training, and providing incentives.
Streamlining processes and certifications to enable greater speed and agility.
Codifying rapid and software acquisition pathways into statute.
Continued modernization of DoD requirements and budget processes.
Notable Sections
Sec 804. Middle Tier of Acquisition for Rapid Prototyping and Fielding
Codified the Middle Tier of Acquisition pathway from the FY16 NDAA Section 804 to Title X. It adds the following language:
“If an operational capability is fielded for a program or project for which the authority under this section is used, the appropriate service acquisition executive may permit continuous iterative prototyping and fielding under the same program or project for an unlimited number of subsequent periods, where each period is intended to be five years.”
Our Take: As we were actively involved in implementing MTA within the DoD, we are happy to see this further cemented into statute with greater flexibility for use. More importantly this provision introduces a change that allows an MTA program to be executed in perpetuity as long as it delivers capability every 5 years. This is a game changer as today a program office, if they are planning to use the MTA pathway to deliver multiple iterations of a product, must create multiple MTA programs that become complicated and burdensome to manage and transition from one to another. This change introduces the first truly iterative acquisition pathway that can support faster deliveries and continuous innovation as the Software Pathway does for software programs.
Recommended reading: How to Properly Execute an MTA Program.
Sec 805. Revision and Codification of Software Acquisition Pathways
Codifies the Software Acquisition Pathway from the FY20 NDAA into Title X. It further permits use of the Software Acquisition Pathway for non-developmental hardware which the software is embedded in.
Our Take: The previous Senate and House bills focused on use separate pathways for UAS hardware and software, whereas this language simplifies to cover hardware. This is an important add as there has been inconsistent understanding of where the line is drawn for the SWP when it comes to fielding hardware in conjunction with software/digital capabilities.
Sec. 806/807. Streamlining Milestone A and B Requirements
Modifies the requirements for successfully receiving a milestone decision (A or B) by shifting from mandatory elements to “Factors to be Considered” for MDAPs.
Significantly changes the approach to requirements with the below adjustments (cross through is eliminated language and bold is new language).
the Secretary of the military department concerned and the Chief of the armed force concerned concur inthe cost, schedule, technical feasibility, and performance trade-offs that have been made with regard to the program do not overly constrain future trade space.
The Milestone Decision Authority (MDA) must now consider the following for MDAP programs: approved requirements, appropriate market research, risk reduction plan, sustainment plan, Analysis of Alternatives, and a cost estimate.
The MDA must issue a written record at Milestone approval.
Our Take: While most of these are sound practices, this provides the MDA flexibility to tailor the acquisition when needed. It is unclear precisely how DoD will interpret this change in terms of any substantial change in policy. Its important to remember that DoD and the military services can always (and often do) add additional steps to the minimum processes that Congress requires. We hope this will reduce the need for certifications to Congress given the language here and reduce the reporting and documentation burdens on program managers and acquisition executives.
We would have liked to see the AoA eliminated given the burden that currently places on the system in terms of moving quickly into prototyping. A study was conducted on AoAs that seriously questioned their utility given certain realties and the time taken to conduct them.
Sec. 814. Modifications to Commercial Product and Commercial Service Determinations
Extends a determination of commerciality to items procured under subcontracts, provided that the DoD contracting officer approves the determination, and extend a determination of commerciality to products that may have changed a part number, but provide substantially the same functionality.
Our Take: Yes, 100%. We need to Buy Commercial or Lose! Leveraging previous commercial determination should streamline and scale future buys. Today, most Contracting Officers (COs) treat each procurement as unique and execute the process agnostic to what was approved in other contracting strategies or contracts. This is somewhat intentional as each program has unique considerations and each CO is considered responsible for the acquisition under their control. This provision pushes COs to actually consider what was already done and accept the work of other COs to support their business clearance process. Some commercial item determinations require a Determinations and Finding document which adds time to the process. This provision should help alleviate that burden if one has already been accomplished elsewhere. Contractors will likely have to assist COs if they know a determination has already been accomplished as sharing of that type of information is not common today across the government.
Sec. 832. Updated Acquisition and Sustainment Training
USD(A&S) shall establish a training program that supports cross-functional DoD personnel and contractors involved in any phase of acquisition and sustainment. This shall include deployable training teams to coach personnel. It shall emphasize acquisition of commercial products, services, and COTS; technology procured “as-a-Service” or as a consumption based solution; and using the Middle Tier of Acquisition pathway. Training team shall include not less than one individual from the private sector or academia with experience in commercial transitions. During FY25 each military department shall carry out not less than one pilot program of this training.
Our Take: As co-authors of the Atlantic Council Commission on Defense Innovation Adoption, this implements a key recommendation on driving commercial acquisition to include training. Given the education that is needed around “as-a-service” models, this is important direction to better prepare the defense acquisition workforce.