Bill Summary
This legislation aims to enhance competition in defense contracting by revising how the Department of Defense (DoD) evaluates potential contractors, particularly focusing on increasing opportunities for small businesses and nontraditional defense contractors.
Key provisions include:
1. **Expanded Use of Past Performance**: The Secretary of Defense is required to provide guidance within a year on how the DoD can consider a broader range of past performance, including commercial projects, for contract awards. This aims to help companies with relevant experience but without extensive government contracts to compete more effectively.
2. **Streamlining Regulations**: The legislation mandates the formation of the Defense Acquisition Regulations Council to identify and eliminate unnecessary procedural barriers that hinder small businesses and nontraditional contractors from competing for contracts. This includes consulting with the public and relevant stakeholders to find outdated or overly burdensome regulations.
3. **Implementation Timeline**: The Secretary of Defense must implement identified regulatory changes within two years and report back to Congress on the actions taken.
4. **Focus on Cost and Quality**: The legislation emphasizes that cost efficiency and quality should be prioritized in the contracting process.
Overall, the bill seeks to foster a more competitive and inclusive defense procurement environment, ensuring that a diverse range of contractors can participate and contribute to national defense initiatives.
Possible Impacts
The legislation aimed at increasing competition in defense contracting could have several impacts on various stakeholders. Here are three examples:
1. **Opportunities for Small Businesses and Nontraditional Contractors**:
- By removing procedural barriers and streamlining documentation requirements, small businesses and nontraditional defense contractors could gain better access to defense contracts. This would allow them to compete more effectively against larger, established firms, fostering innovation and diverse offerings in defense procurement. As a result, these smaller entities could experience growth, job creation, and enhanced economic contributions to their communities.
2. **Increased Competition Leading to Better Value**:
- With a broader acceptance of past performance from non-government projects and alternative evaluation methods, the Department of Defense may receive a wider variety of proposals. This increased competition can lead to lower costs, improved quality, and innovative solutions, ultimately benefiting taxpayers and the military by ensuring that the best value is achieved in defense spending.
3. **Enhanced Collaboration and Innovation**:
- Engaging with the public and contractor representatives to identify and eliminate restrictive policies could foster an environment of collaboration between the Department of Defense and the private sector. This could lead to more innovative approaches and technologies being developed, as companies that previously faced barriers could now contribute their unique expertise. Consequently, this could enhance the overall capability and effectiveness of defense systems and technologies.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3541 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 3541
To increase competition in Defense contracting, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 17, 2025
Mr. Peters introduced the following bill; which was read twice and
referred to the Committee on Armed Services
_______________________________________________________________________
A BILL
To increase competition in Defense contracting, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. INCREASING COMPETITION IN DEFENSE CONTRACTING.
(a) Uses of Past Performance.--
(1) In general.--Not later than 1 year after the date of
the enactment of this Act, the Secretary of Defense shall issue
guidance, including examples and templates where appropriate,
on--
(A) when the Department of Defense should accept
past performance on a wider range of projects, such as
a requirement without much precedent, in order to have
increased competition among eligible firms with
capability to perform a requirement, by including
commercial or non-government projects as relevant past
performance for the purposes of awarding contracts or
other agreements;
(B) a means by which the Department may validate
non-government past performance references, including
by requiring an official of an entity providing past
performance references to attest to their authenticity
and by providing verifiable contact information for the
references; and
(C) using alternative methods of evaluation other
than past performance that may be appropriate for a
requirement without much precedent, such as
demonstrations and testing of technologies as part of
the proposal process for contracts or other awards of
the Department.
(2) Supplement not supplant.--The guidance issued under
paragraph (1) shall supplement existing Department of Defense
policy and procedures for consideration of past performance and
other evaluation factors and methods.
(b) Enhancing Competition in Defense Procurement.--
(1) Council recommendations.--Not later than 90 days after
the date of the enactment of this Act, the Secretary of Defense
shall convene the Defense Acquisition Regulations Council (in
this section referred to as the ``Council''), to make
recommendations to identify and eliminate specific, unnecessary
procedural barriers that disproportionately affect the ability
of small business concerns and nontraditional defense
contractors, to compete for contracts with the Department of
Defense, with a focus on streamlining documentation and
qualification requirements unrelated to the protection of
privacy and civil liberties.
(2) Consultation.--The Council shall obtain input from the
public, including from the APEX Accelerators program (formerly
known as the Procurement Technical Assistance Center network)
and other contractor representatives, to identify procurement
policies and regulations that are obsolete, overly burdensome
or restrictive, not adequately harmonized, or otherwise serve
to create barriers to small business concerns and
nontraditional defense contractors contracting with the
Department or that unnecessarily increase bid and proposal
costs.
(3) Examination of actions.--The Council shall consider the
input obtained under paragraph (2) and any other information
determined to be relevant by the Council to identify
legislative, regulatory, and other actions to increase
competition and remove barriers to small business concerns and
nontraditional defense contractors participating in the
procurement process of the Department of Defense.
(4) Implementation.--Not later than 2 years after the date
of the enactment of this Act, the Secretary of Defense shall
implement the regulatory and other non-legislative actions
identified under paragraph (3), as determined necessary by the
Secretary, to remove barriers to entry for small business
concerns and nontraditional defense contractors seeking to
participate in Department of Defense procurement.
(5) Briefing.--Not later than two years after the date of
the enactment of this Act, the Secretary of Defense shall
provide to the Committees on Armed Services of the Senate and
House of Representatives a briefing on the legislative actions
identified under paragraph (3) and the actions implemented
under paragraph (4).
(c) Consideration of Cost-Efficiency and Qualify.--The Secretary of
Defense shall advocate for and prioritize contracting policies that
ensure that cost efficiency and quality of goods and services are key
determining factors in awarding procurement contracts.
(d) Definitions.--In this section--
(1) the term ``nontraditional defense contractors'' has the
meaning given such term in section 3014 of title 10, United
States Code; and
(2) the term ``small business concern'' has the meaning
given such term under section 3 of the Small Business Act (15
U.S.C. 632).
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