The sweeping defense policy bill poised to pass Congress this week seeks to crack down on stolen valor among businesses by making it harder for some of them to win federal contracts intended for veterans.

The compromise National Defense Authorization Act, or NDAA, includes an amendment that would stipulate that small businesses that self-certify as being service disabled and veteran owned could not count toward the government's target for how much contracting goes to such businesses.

The goal is to disincentivize stolen valor by motivating federal officials to award contracts to businesses that are formally certified as being veteran owned.

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"For too long, loopholes have allowed imposters to self-certify as service-disabled, veteran-owned small businesses and take advantage of government benefits set aside for our nation's heroes," Sen. Joni Ernst, R-Iowa, an Army^[2] National Guard^[3] veteran who sponsored the amendment, said in a statement to Military.com. "There is no room for error when it comes to our men and women who served, and service-disabled veterans should know that our grateful nation is doing everything in its power to support their success."

A separate provision of the bill would also increase the goal of how many contracting dollars go to veteran-owned small businesses from 3% to 5%.

Including the provisions in the compromise NDAA, the result of months of negotiations between House and Senate lawmakers, makes it all but certain to become law. The NDAA is anticipated to pass the Senate as soon as Wednesday and the House by the end of the week, sending it to President Joe Biden's desk for his expected signature.

Ernst's provision centers on the Service-Disabled Veteran-Owned Small Business Program, which allows the federal government to restrict competition for some contracts to just businesses owned by veterans with service-connected disabilities.

The 2021 NDAA required the Small Business Administration, or SBA, to set up a process to certify veteran-owned and service-disabled, veteran-owned small businesses. Previously, the Department of Veterans Affairs^[4] certified whether a business was owned by a service-disabled veteran for the purpose of awarding VA contracts, but businesses needed only to self-certify for contracts awarded by any other federal agency.

When the SBA announced the rules for the formal certification process in late 2022, it did not entirely end the ability to self-certify. Rather, the agency allowed self-certified businesses to continue to count toward the government's goal of 3% of contracting dollars going to small businesses owned by service-disabled veterans.

The SBA kept self-certification alive despite receiving numerous public comments calling for its elimination over concerns about fraud. But the SBA maintained that allowing self-certification for veteran-owned businesses was consistent with other programs, such as the Women-Owned Small Business Program, that allow for self-certification.

Still, the agency said it plans to do a comprehensive review of all self-certification programs and anticipated sunsetting any self-certification in five years.

The SBA estimated that applying for and maintaining formal certification would take businesses about three hours and cost $280.32 per applicant.

"Self-certification defeats the purpose of guaranteeing that service-disabled certified and veteran-certified firms are fairly represented in federal contracting as per the law," Ronald Washington, an executive committee member of a veterans entrepreneurship group called VET-Force, said in a statement shared by Ernst's office supporting her amendment. "Thousands of veteran-owned companies, and at an expense, have complied with becoming certified first through the VA and now with SBA.”

“It is only fair that everyone be held to the same expectations and standards," he said.

Related: Stolen Valor Among Small Businesses Lying About Being Veteran-Owned Targeted by Iowa Senator^[5]

A Pentagon working group established to provide recommendations for rooting out extremism in the ranks is set to be defunded under the sweeping defense policy bill Congress is expected to pass this week.

The compromise National Defense Authorization Act, or NDAA, which was released last week after months of negotiations between House and Senate Democrats and Republicans, would bar any funding from going to the Defense Department's Countering Extremist Activity Working Group.

The working group released its recommendations in December 2021, and the Pentagon said at the time that the release marked the end of the group's work, making it unclear what practical effect defunding the group will have. But lawmakers including the provision in their compromise bill signals they are ready to turn the page on what became a political lightning rod.

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Congress' move to make sure the working group stays dead also comes as the Pentagon continues to struggle with extremists in the ranks. An inspector general report released earlier this month found that dozens of troops were suspected^[2] of advocating overthrowing the government over the past year.

A Pentagon spokesperson did not immediately respond to Military.com's request for comment on the NDAA provision or the exact status of the working group now.

Defense Secretary Lloyd Austin established the working group early in his tenure after it became apparent that some service members and veterans participated in the Jan. 6, 2021, insurrection.

The working group released its recommendations at the end of 2021, and as a result, the Pentagon quickly updated its definition of extremism and tweaked classes for those transitioning out of the military to emphasize "the need to honor the oath of office and to support and defend the Constitution."

But the Pentagon's work to implement the rest of the group's recommendations appeared to stall^[3] as Republicans increasingly attacked what they derided as "wokeness" in the military.

Republicans charged that the Biden administration was using counter-domestic extremism efforts as an excuse to target conservatives and that they were a distraction from the military's purpose of preparing for war. Austin has been admonished by Republican lawmakers for the efforts at nearly every congressional hearing at which he's testified.

A report explaining this year's NDAA compromise agreement notes that efforts to implement the working group's recommendations will continue under the supervision of the under secretary of defense for personnel and readiness and the under secretary of defense for intelligence and security. Austin gave those two officials responsibility for overseeing implementation of the recommendations in a memo he released alongside the working group's December 2021 report.

This year's NDAA is not the first time lawmakers have used the annual defense bill to target the working group. Last year, the Senate Armed Services Committee included non-binding language in its initial NDAA draft that called any ongoing activity related to the counter-extremist working group "an inappropriate use of taxpayer funds" that "should be discontinued by the Department of Defense immediately."

The provision that made it into this year's compromise bill was somewhat watered down from the version that passed the House in July. In addition to defunding the working group, the original House-passed text would have required the Pentagon to submit all of the working group's documents to the House Armed Services Committee and a special committee House Republicans created to investigate government activities they disagree with called the Select Subcommittee on the Weaponization of the Federal Government.

Defunding the counter-extremism working group is one of several provisions Republicans fought to keep^[4] in the final NDAA that take aim at efforts to make the military more diverse and inclusive.

The Senate and House are expected to approve the NDAA by the end of the week, sending it to President Joe Biden's desk for his signature.

Related: What the Pentagon Has, Hasn't and Could Do to Stop Veterans and Troops from Joining Extremist Groups^[5]