The National Defense Authorization Act (NDAA) 2020, Section 823 increased the threshold for Department of Defense sole-source contracts that require justification and approval from $22 million to $100 million. Section 823 also directed the Secretary of Defense to issue guidance to implement this amendment no later than 90 days after the enactment of the Act.
As of today, March 13th 2020, guidance has not been written, however the Small Business Administration’s (SBA) Associate General Counsel for Procurement Law, Mr. John Klein, has provided SBA’s position on NDAA 2020, Section 823:
“We do not believe that section (b) delays the effective date of the provision. It merely requires DOD to issue guidance implementing the provision within the 90-day timeframe identified. In our view, the statute is clear – “no justification and approval is required under such section for a sole-source contract awarded by the Department of Defense in a covered procurement for an amount not exceeding $100,000,000.” A statute always prevails over contradictory regulations; so we believe that the current FAR/DFAR $22M threshold for a J&A is explicitly overruled by this provision with respect to DOD contracts. And, we do not believe that DOD must amend the DFAR in order for this provision to be effective. Nothing in the statutory language suggests that it is not effective immediately – Congress merely required DOD to provide guidance within a specified timeframe; it did not delay the effective date of the provision. Because we believe the statute supersedes federal regulations, SBA would accept a DoD sole source 8(a) offering on behalf of an 8(a) Participant owned by an Indian tribe, Alaska Native Corporation, or Hawaiian Native Organization without a J&A where the value of the offering exceeds the thresholds currently set forth in SBA regulations (but does not exceed $100M).“