The 2019 NDAA and its Effects on Small Business

Recently, the President signed into law the John S. McCain National Defense Authorization Act (NDAA/ H.R. 5515) for Fiscal Year 2019, which included several provisions affecting government contractors. This annual NDAA process addresses military funding requirements and commits the Department of Defense (DoD) and other agencies to specific rules, regulations, and laws. Read below to see what changes were made to the 2019 NDAA and how it affects small businesses moving forward.


Section 821 of the 2019 NDAA increased the DoD micro-purchase threshold from $5,000 to $10,000, mirroring the current level for civilian agencies. This means any purchase under $10,000 per transaction may now be purchased from any size company. While the individual transaction value is small at under $10,000, over $30 billion of services and products are purchased through this method every year. This makes it a valuable tool for small businesses, even if mandated set-asides no longer apply. It is, however, necessary to use a proactive strategy to identify and market those sales opportunities.

Contrary to what many contractors assume, both products and services may be purchased by the government using micro-purchases. What many government service providers fail to understand is if it’s possible to provide a distinct service for under $10,000, then this may be an ideal tactic to open doors to new government customers.

For example, by creating a menu of services that could each be provided for under $10,000 (such as an assessment, analysis, testing, or research) one may have the ideal no-competition contract. This not only allows for a quick sale and payment, but also provides for a successful past-performance record, assuming, of course, that the service or product provided was successful and on time. This positive performance report card can then be the critical stepping stone to more, larger and profitable contracts. Call 866-579-1346 x320 or email the TargetGov team for help increasing your federal sales through transactions of under $10,000.

New Small Business Strategy

Section 851 of the 2019 NDAA requires the DoD to develop and implement a new small business strategy “to better leverage small businesses as a means to enhance or support mission execution.”  The NDAA states that “…such a strategy should include plans to integrate small businesses into a holistic view of industry; to realign the Department’s small business programs with agency mission under a unified management structure; and to clarify points of entry into the defense market.” Call 866-579-1346 x320 or email the TargetGov team for help developing an effective small business strategy that’ll get you well on your way to winning federal contracts!

Payment Obligations and Other Changes

Section 852 restores prompt payment obligations on DoD to small business prime contractors of an accelerated payment date with a goal of 15 days after receipt of a proper invoice for the amount due, unless a specific payment date is otherwise established by contract. It also addresses when a prime contractor subcontracts with a small business, noting that it will now be required to meet a goal of 15 days for payment to the small business subcontractor after receipt of a proper invoice for the amount due if: “(i) a specific payment date is not established by contract and (ii) the prime contractor agrees to make payments to the subcontractor in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor.”

Section 880 imposes government-wide restrictions on the use of “lowest-price technically-acceptable” (LPTA) evaluation factors for complex professional or IT services.

Sections 938 and 941-943 initiate several reporting requirements for security clearances which provide information for Congress to craft new programs to reduce the backlog and wait times associated with government security clearances and make overall improvements to that process.


Gloria Larkin is President and CEO of TargetGov and a national expert in business development in the government markets.  Email, visit or call toll-free 1-866-579-1346 for more information.

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