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DOD Pilot Program Aims to Enable Employee-Owned Businesses to Receive Follow-On Contracts

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The Department of Defense has created a pilot program to allow DOD contracting officers to award sole-source, follow-on contracts to employee-owned businesses.

Section 874 of the fiscal year 2022 National Defense Authorization Act authorized the pilot program, which will run through Dec. 7, 2026, according to a memorandum signed by John Tenaglia, principal director of defense pricing and contracting at the office of DOD undersecretary for acquisition and sustainment.

Defense contracting officers looking to take part in the program should secure approval from DPC for each contract proposed for award under the pilot, come up with a justification and approval for each approved contract and award the contracts without conducting a full-and-open competition no later than Aug. 31, 2023.

Employee-owned companies must have a minimum performance rating of “satisfactory” in their predecessor contracts to be eligible for a contract award under the pilot program.

According to the memo, DPC will accept submissions from qualified businesses through April 28, 2023, or until it clears nine contracts for award through the program.