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100% ESOP-Owned Companies Now Favored for Certain Defense Contracting Projects

Jan 4, 2022 | Timothy L. Stewart

As reported by the NCEO, the National Defense Authorization Act (signed by President Biden on December 27, 2021) allows 100% ESOP-owned companies to receive noncompete follow-on contracts with the Department of Defense.  The Program will run for five years and is contingent upon a finding that the company’s work was satisfactory or better.

This program was proposed through the Employee-Owned Contractors Roundtable (ECR), which is a group of ESOP-owned S Corporations seeking to qualify such Corporations with favored status for government contracts.  ECR will also be working on allowing 100% ESOP-owned companies to maintain previously held  statuses such as women-owned , services disabled veteran-owned, or minority-owned, even after becoming 100% ESOP owned.

About The Author

Image of Timothy L. Stewart

Tim is President & Managing Partner of DeWitt. He is also a partner in the Greater Milwaukee office specializing in Employee Stock Ownership Plans (ESOPs) and Employee Benefits. He can be reached at 262-754-2869.

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