Congresswoman Scholten Secures Major Win for Small Businesses in National Defense Authorization Act

WASHINGTON, DC - Congresswoman Hillary Scholten (D-MI-03), member of the House Small Business Committee, secured a critical provision in the Fiscal Year (FY) 2027 National Defense Authorization Act (NDAA). The provision ensures that certain Department of Defense (DoD) contracts are actually reaching small defense contractors, which will strengthen both America's national security and small business economy.

The House Armed Services Committee (HASC) voted to approve the NDAA on June 5, which includes this provision as part of the bill's accompanying report language. The full House will now debate and vote on the NDAA bill text, but Members are unable to directly amend its report language from the version HASC approved. This means the Government Accountability Office (GAO) is expected to prioritize and conduct the study requested by Congresswoman Scholten in the report language.

"Small businesses in West Michigan and across the country rely on DoD contracts to hire new workers, innovate their systems, and compete in the modern economy, and we cannot afford to sideline them," said Congresswoman Scholten. "Enacting this critical provision has long been a priority of mine to help level the playing field for Main Street businesses while enhancing our national security. Effective legislating means using creative avenues to deliver solutions for my community, and that's exactly what I'll continue to do."

More information on the provision is available below:

Under federal law, most defense contracts valued at or below $350,000 are supposed to be set aside for small business competition. These smaller contracts often serve as an entry point for entrepreneurs looking to break into the defense marketplace. However, recent reports from the DoD show that more than a quarter of spending below this threshold has gone to businesses that do not qualify as small. Congresswoman Scholten's provision requires the DoD to review how these contracts are being awarded and to provide Congress with clear information on when and why small business set-aside rules are not being followed.

Congresswoman Scholten introduced this provision last year as an amendment to the FY 2026 NDAA, and again as a standalone bill earlier this year.

A video of Congresswoman Scholten explaining the win is available here

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