With the military policy legislation known as the National Defense Authorization Act signed by the president over the holidays, contractors are looking for the changes that matter to them. We’ve singled out five measures that will be of interest to companies that work with the federal government.

Contractor compensation

Contractor compensation caps have come under fire in recent months, as the government, Congress and private companies battle over the appropriate limits on executive pay.

The defense policy law set the cap, which limits the amount of an executive’s compensation that can be covered by government contracts, at $625,000.

But it appears likely not last. The bipartisan budget bill, which sets the cap at $487,000, was signed by President Obama later on the same day, a White House spokesman confirmed. As a result, it overrides the defense policy law, according to industry group the Professional Services Council.

In a statement, the PSC said the reduced limit “could cause significant complications for government and contractors.”

A review of the acquisition process

The legislation requires the Pentagon’s comptroller general to review the department’s buying procedures in an effort to weed out those that provide “little or no value” or whose value is outweighed by the delays they create.

The report should note processes, organizations or layers of review that should be modified or eliminated.

Alan Chvotkin, executive vice president and counsel at PSC, said his group welcomes this new legislative measure.

Personnel security

Last year, security clearances came under intense scrutiny following the cases of Edward Snowden, a contractor to the National Security Agency who released government secrets, and Aaron Alexis, a contractor working at the Navy Yard who killed 12 workers there.

The law calls for a slate of analyses and reports related to security clearances, including one from the defense secretary — working with the Office of Management and Budget and through a cost assessment office director — on the costs, quality and timelines of security clearance investigations performed by the Office of Personnel Management compared to those handled by Pentagon organizations.

The legislation also requires the defense secretary, the OMB chief and the director of national intelligence develop a strategy to modernize Pentagon personnel security — and come up with metrics to measure its effectiveness.

Cloud computing

The new law includes a provision meant to ensure that the Internet-based cloud computing technology the government is buying is interoperable and universally usable.

Cloud computing has been a major focus of federal agencies in recent years, as they seek to modernize their systems and save money. The law calls for the Pentagon secretary to work with other defense officials to come up with plans for competitive purchasing of cloud computing systems and services.

Chvotkin said the move could be a “good thing, as long as it doesn’t act as a barrier ... to meeting agency needs for cloud services.” Alex Rossino of Herndon-based Deltek, a company that studies the government contracting market, said the provision reinforces the importance of making sure government systems work together.

“Interoperability remains the key word for 2014 and beyond,” he said.


In the new law, Congress calls for the defense secretary to designate from among the personnel of the Office of the Under Secretary of Defense for Policy a principal cyber adviser. The adviser — who will be Senate-confirmed — is to be the secretary’s key guide on military cyber forces and activities.

The new position is slated to handle offensive and defense cyber activities and manage policy, resources, personnel, acquisition and technology.