Pheniece Jones
Director, Media Relations, PSC

PSC Applauds Enactment of FY23 NDAA and Omnibus Appropriations Act 

Arlington, Va. (Dec. 27, 2022) The Professional Services Council (PSC) applauded the passage of the Fiscal Year 2023 National Defense Authorization Act (NDAA) and the Consolidated Appropriations Act (Omnibus) and thanks the President for signing them into law. While PSC remains convinced that legislation that authorizes or appropriates funding for federal agencies is best enacted before the beginning of each fiscal year, the Council appreciates all Congressional and executive branch efforts to complete legislative cycles as expeditiously as possible.

That said, PSC has identified several key themes of high interest – and potential high impact – to the federal contracting community, including but not limited to the 400+ government services contractors that comprise PSC membership. These themes are reflected in the following illustrative examples:

(1) Increasing transparency into the future Department of Defense (DoD) needs so contracting partners can plan and make needed investments.

NDAA Section 351, Resources Required for Achieving Materiel Readiness Metrics and Objectives for Major Defense Acquisition Programs, promotes transparency and unity of effort, requiring budget estimates to support materiel readiness objectives and mitigate vulnerabilities that allow one-year operations and maintenance to be “raided” each year. 

NDAA Section 127-129 includes several multi-year procurement authorities (certain helicopters, oilers, amphibious ships) and authorized approximately $800 million in advance procurement funds, allowing long-lead time and materials purchases and supply chain planning in advance of full ship funding. 

(2) Mitigating vulnerabilities to supply chains.

NDAA Section 5949, Prohibition on Certain Semiconductor Products and Services, expands to previous procurement restrictions on Huawei-related telecommunications equipment to Chinese-origin semiconductors. PSC will watch carefully how the Government implements this new prohibition over the next five years. 

NDAA Section 4101, Procurement, tables highlight budget authority that allocates defense industry base expansion funding across multiple munitions programs (e.g., PATRIOT, TRIDENT, HIMARS, JAGM, LRASM, etc.). These lines underscore support to supply chain stability.

(3) Helping companies recover costs caused by factors out of their control.

NDAA Section 822, Modification of Contracts to Provide Extraordinary Relief Due to Inflation Impacts, includes direction that may provide relief for contractors facing inflation pressure. In addition, the CAA includes almost $8 billion to address inflation and other cost increases above the President’s Budget Request, including but not limited to assistance to military families, fuel and utilities for the Department and Services, medical inflation, procurement programs, and research and development programs. 

NDAA Section 805, Treatment of Certain Clauses Implementing Executive Orders, allows costs associated with Government-directed contract changes stemming from Executive Orders (e.g., COVID-19 safety protocols for federal contractors, climate-related disclosures) to be potentially reimbursable. PSC will watch carefully how the Government implements this requirement.

“PSC is pleased that Congress worked together to pass the NDAA and full-year omnibus appropriations bill. The bills' provisions will promote a more effective, streamlined, and competitive federal contracting system and lead to improved mission outcomes for the Department of Defense and other federal agencies,” said David Berteau, President and CEO of the Professional Services Council. “We look forward to continuing our work on the Hill to get Congress to enact a bipartisan, on-time appropriations agreement for all agencies for next fiscal.”