In late 2021, the National Defense Authorization Act for Fiscal Year 2022 (FY 2022 NDAA) included a first-of-its-kind provision that authorized a pilot program through which businesses that are owned 100% by an employee stock ownership plan (ESOP) could qualify for sole source awards on a follow-on contract. Of course, the devil is in the details, and this potentially historic provision merely authorized the program but included no details. The opportunity to fill in those details has arrived. The Department of Defense (DOD) recently announced that companies can submit feedback through the DARS website. ESOPs or other government contractors interested in how DOD implements the FY 2022 NDAA should take this opportunity to provide “early inputs” as DOD starts the rulemaking process.

DOD’s announcement encouraged contractors to submit early inputs on implementing the FY 2022 NDAA within the acquisition regulations—which would include the ESOP Sole Source pilot program—through the DARS website. DOD has not yet announced when it will stop accepting inputs but indicated that it would update the DARS website with that information.

This opportunity is not limited to the ESOP Sole Source pilot program. Any provisions from the FY 2022 NDAA are ripe for comment because DOD did not limit its request for early inputs. PilieroMazza previously reported on some of these key provisions, which include:

  • restrictions on the procurement of printed circuit boards from China (Sec. 851);
  • pilot program allowing DOD to procure four emerging technologies using newly developed, unique acquisition mechanisms to improve the transition speed of emerging technologies into acquisition programs or operational use (Sec. 833); 
  • pilot program establishing a competitive, merit-based program to accelerate procurement and handling of innovative technologies with preferences for small business and non-traditional contractors (Sec. 834); and  
  • pilot program for small businesses to develop technology-enhanced capabilities for special operations forces (Sec. 851).

If you have questions about submitting inputs about the FY 2022 NDAA, please contact Kevin Barnett, the author of this client alert, or a member of PilieroMazza’s Government Contracts Group.