Chair Shaheen Secures Inclusion of Key Small Business Provisions in Senate NDAA Package

(Washington, D.C.) - U.S. Senator Jeanne Shaheen (D-NH), Chair of the U.S. Senate Committee on Small Business and Entrepreneurship, secured the inclusion of key provisions for small businesses in the Senate FY 2025 National Defense Authorization Act (NDAA) manager's package, which was filed to the bill yesterday. The leadership of both the Senate Armed Services Committee (SASC) and the House Armed Services Committee (HASC) will now work on a negotiated bicameral, bipartisan NDAA in the coming weeks. The manager's package includes several wins for small businesses like the modernization of the State Trade Expansion Program (STEP), accountability for subcontractor utilization and increased sole source thresholds for all small business set-aside programs.

"I'm proud to see these critical small business provisions included in the package, which if enacted, will improve and strengthen programs like the State Trade Expansion Program that I helped create to support small businesses interested in exporting and competing abroad," said Chair Shaheen. "I look forward to seeing these provisions signed into law and delivering much needed changes that will make it easier for small businesses to thrive."

STEP provides grants to state and territory governments to assist small businesses with export development. Chair Shaheen helped create STEP as a pilot program in 2010, and the program was fully authorized in 2016 by Shaheen's small business trade amendment. Since its creation, the STEP program has awarded $235.5 million in grants and directly supported over 13,000 small businesses' international expansion and export growth.

Chair Shaheen also fought to include an increase to sole source thresholds, which increases the maximum size of sole source contracts for women-owned small businesses (WOSBs), 8(a) businesses, service-disabled veteran-owned small businesses (SDVOSBs) and HUBZone businesses. Also included in the package were Chair Shaheen's provisions on subcontractor utilization, which improve the structure by which subcontractors engage with prime contractors and increase transparency between the two, as well as a provision that directs the Small Business Administration (SBA) to enable majority Employee Stock Ownership Plans (ESOPs) to retain set-aside designations.

Below is a full list of Chair Shaheen's small business provisions included in the manager's package:

Sec. 6001: Modernizing the State Trade Expansion Program

• Updates STEP by streamlining application, reporting and compliance requirements and improving award consistency and transparency to make the program easier to use.

Sec. 5861: Increasing sole source thresholds

• Increases the maximum size of sole source contracts for WOSBs, 8(a) small businesses, SDVOSBs and HUBZone designated small businesses for contracts awarded by the Department of Defense.

• The thresholds would increase from $4.5 million to $8 million for non-manufacturing and from $7 million to $10 million for manufacturing contracts and will be adjusted for inflation in the future.

Sec. 5862: Transparency and accountability in subcontractor utilization

• Requires prime contractors to provide their subcontractors as well as their contracting officers a subcontracting utilization plan. It also allows a subcontractor to confidentially report to the contracting officer whether they are being utilized in accordance with said plan. After such a report, a contracting officer is required to conduct a review of the prime's contract to determine whether the prime made a good faith effort to utilize the subcontractor. The provision directs the contracting officer to assess liquidated damages if the review shows they did not make a good faith effort.

• Directs the SBA, in consultation with the General Services Administration (GSA), to submit a report on improvements that can be made to contracting databases to improve the ability of contracting officers to evaluate whether primes achieve their subcontracting goals.

Sec. 5863: Retaining contracting set-aside designations for employee-owned businesses

• Directs the SBA to study and recommend alternatives to current requirements, as well as publish a report and submit a plan to Congress on implementing recommendations, that would enable majority ESOPs and worker cooperatives to retain their set-aside designations.

• Modifies statutory definitions to remove barriers to ownership through an ESOP for federal contractors with an SDVOSB designation.

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