Procurement Division

NDIA Actions

On April 24, 2001, NDIA responded to a request from the Defense Advanced Research Projects Agency (DARPA) for industry comments on the impact of section 803 of the National Defense Authorization Act of FY 2001 (PL 106-398) on the use of section 845 (Other Transactions for Prototype Authority).

The legislation, in an effort to broaden the technology and industrial base available for meeting DoD needs, introduced new conditions on the use of Section 845, and DARPA wanted specifically to know how those conditions might (1) impact potential offerors’ decisions on whether to utilize this authority, and (2) affect offerors’ strategy formulations (i.e., teaming and corporate investment commitments). The NDIA letter focused specifically on the legislative stipulation that the defense contractor must contribute at least one-third of the total cost of the prototype project. NDIA said that requiring defense contractors to pay any of the development costs of a weapon or weapon system was “highly suspect” and violated the general requirement that agencies spend only what Congress appropriates for programs. NDIA said that requiring contractor investment as a means of subsidizing inadequate government budgets is a practice that cannot be defended and should be stopped. The letter recommended that the text be changed to provide that the contribution by contractors is to be sought only when, and to the extent that, the contribution matches expected commercial benefit to the contractor.

Boeing North American, Inc. v. F. Whitten Peters, Secretary of the Air Force.

On December 26, 2000, the law firm of Miller & Chevalier filed an amicus curiae brief on NDIA's behalf in the United States Court of Appeals for the Federal Circuit. In the brief, NDIA argued for a reversal of the original decision against Boeing by the Armed Services Board of Contract Appeals because that decision confused the concepts of allocability and allowability. The brief expressed concern that as the result of this case, government auditors would begin disallowing not just litigation costs, but many other types of costs that are necessary to overall business operations but cannot be shown to confer an identifiable benefit either on the government or on the performance of government contracts.

On 15 May 2000, NDIA wrote House Armed Services Committee Chairman Floyd Spence and members of the House and Senate Small Business and Judiciary Committees opposing the scheduled sunset of the Court of Federal Claims/U.S. District Courts concurrent bid protest jurisdiction.

The letter noted that if the jurisdiction of the District Courts is permitted to lapse, all businesses - but particularly small businesses - will be deprived of the beneficial choice to pursue actions in their home district. A related article, written for the 22 March 2000 edition of The Government Contractor by Steven L Schooner, Associate Professor of Government Contracts Law, George Washington University Law School, is available at http://www.law.gwu/facweb/sschooner/GAO.pdf. NDIA is currently contacting other industry groups about meeting with congressional staff to generate support for legislative action to preserve the concurrent jurisdiction.

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