Louis J. Jenny | October 16, 2015
Both Houses of the U.S. Congress have passed a final version of the National Defense Authorization Act (NDAA), the annual bill authorizing Defense Department activities. And although the President has said he will veto it and the end game for the bill’s passage into law isn’t completely clear (more on that later), there are a few provisions in the bill worth noting.
First, the bill establishes that going forward the US Army Corps of Engineers, or another federal agency, will take over design, procurement, and construction management services for Department of Veterans Affairs’ medical facility projects valued over $100 million. While Congress had considered several more complex versions of this provision (and we at DBIA were in contact with lawmakers regarding this), the final language passed is quite short and to the point. Further, we and the A/E/C community around Capitol Hill stayed in communication with each other and lawmakers as they worked toward finding the right dollar threshold.
Second, Sec. 874 contains some of the surety reforms that DBIA along with our A/E/C coalition partners have been pursuing. Specifically, the provisions would require that individual sureties comply with requirements similar to corporate sureties, thus reducing fraud. Also, the provisions would increase the reach of the U.S. Small Business Administration Surety Bond Guarantee Program.
Again, as stated above, the President has indicated he will veto the bill. He intends to do so because of the way some of the funding provisions are structured. It is generally agreed that Congressional Democrats have the votes to sustain that veto, and that the veto is part of an Administration effort to come to a larger budget deal involving both defense and non-defense spending. Republicans generally want such an agreement also, but those negotiations are effectively on hold for now due to the House of Representatives’ current contest for a new Speaker.
Exactly when the House’s leadership election is resolved is not clear, but ultimately those elections and the debate over broad spending are unlikely to affect the provisions discussed above. This is because Congress has in one way or another passed into law an NDAA every year for more than 50 years, and at some point they likely will again this year. The NDAA is considered one of the last truly “must pass” bills. So, while the larger spending issues in the NDAA might be affected by the budget negotiations, my guess is that the surety and VA provisions are likely to survive.