CrowdStrike deepens its AWS partnership with automated Falcon SIEM configuration, AI security capabilities, EventBridge integrations and new MSSP-focused advancements.

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The Pentagon’s plan to fix its decades-old material weaknesses — its inability to reliably track government property in the possession of contractors — is failing, a new inspector general evaluation finds.

The Pentagon IG concluded that the department’s corrective action plan — which calls on DoD components to use a software application called the Government Furnished Property Module within the Procurement Integrated Enterprise Environment — has stalled due to a lack of enforcement from the Office of the Secretary of Defense and slow adoption by the military services.

Auditors warn that if DoD components don’t implement the GFP module, the department risks missing its goal of achieving a clean audit opinion by 2028.

“The implementation of that GFP module is the key to getting this to work,” Mark Thomas, DoD IG’s supervisory auditor, told Federal News Network.

One of the technical challenges, Thomas said, is that each military service uses its own accountable property system of record, or APSR, to track government assets in the hands of contractors. The office of the secretary of defense, however, wants the services to connect their systems to the GFP module.  

“That is something that the components have not been able to do yet. They’re still working to implement that. Each of the components has corrective action dates for that that are still into the future,” Thomas said. 

“The goal would be to complete everything by 2028, preferably before 2028 so that the auditors, as they come in to do the work, that control environment has been established and been working before the auditors come in and start to do some of the work. That would be the best way to do it,” he added.

But some of the timelines to remediate this weakness stretch beyond the 2028 deadline. 

“Unless there’s a change in those dates, then they’ll be at risk for missing the deadline,” Thomas said. 

Each military service has its own reasons for lagging in implementing the department-wide solution, but most of those reasons center around the same issue — every component is grappling with its own longstanding material weakness in accounting for government property in the possession of contractors. 

“They have their own systems which differ from component to component. So they have their own technical challenges and how their particular system in the Air Force functions and how it accounts for property versus how the Navy does it. Each group is kind of working on their own technical challenges and how they’re going to report this into their own APSR — they are busy doing that and they’re actively trying to clean that up so that they can all get opinions on their financial statements,” Thomas said. 

But the IG found that this component-level focus has come at the expense of the broader, department-wide effort. 

Thomas said the services have been receptive to adapting the department-wide solution, but each faces a number of technical challenges connecting their systems to the GFP module. 

“They understand the importance of it, and they understand what this really would give us if there is a functioning GFP module across the department. This would really give the department a larger bird’s eye view of all of the property that they have in the possession of contractors. And it would provide that enterprise level look and ability to tell we have so much property at contractor x,” Thomas said. 

Meanwhile, DoD leaders have not mandated the use of the GFP module, which is stalling the department’s efforts to remediate this material weakness. The audit found that the OSD could be “more forceful” in recommending and implementing the department-wide solution.

“They need to be more direct in saying that we will use this module, all the components will use this module. That was one of the areas that we thought was weak, that the department could improve their messaging, and they could improve to be more direct and require the use of this module,” Thomas said.

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Tens of thousands of blue-collar Defense Department workers are slated to receive their long-delayed 2024 pay raises. The raises were stalled for nearly a year after Defense Secretary Pete Hegseth’s purge of advisory committees halted the DoD Wage Committee’s ability to authorize new wage schedules.

The DoD Wage Committee met last week for the first time this year to approve publication of 2024 updates to about 1,600 wage schedules covering 250 wage areas. 

These raises will match the General Schedule locality increases, and they will be applied retroactively according to when they should have taken effect last year. DoD workers could see the pay bump reflected in their next paychecks.

“It will probably be in the next paycheck, or possibly a separate check. It will depend on which payroll processor is being used,” Jacqueline Simon, American Federation of Government Employees’ director of public policy, told Federal News Network. 

“There might be some other agencies, like the Bureau of Prisons, Social Security, even the Department of Veterans Affairs that might be more delayed. But I’m told the Defense Finance and Accounting Service says it will be the next paycheck,” she said. 

For blue-collar federal employees under the Federal Wage System, the process of getting a pay raise is more complex than for most General Schedule employees. While the GS base pay schedule is adjusted annually each January with an across-the-board pay increase set by the president or Congress, FWS adjustments are based partly on that overarching raise and partly on wage surveys conducted by the DoD Wage Committee, which then votes to implement new schedules region by region throughout the year.

But in March, Hegseth launched a review of all advisory committees, requiring them to justify their existence. He instructed the committees to explain how their advice “benefited the DoD, the federal government, and the United States,” and how it aligned with President Donald Trump’s goals and the department’s priority of “restoring the warrior ethos.” Hegseth dismissed all members of the advisory committees in April.

The DoD Wage Committee — made up of three agency officials and two union leaders, and whose sole function is to approve wage schedules for FWS employees — has been unable to meet since then.

“We don’t provide advice per se. We look through all the data, at the way the calculations were done, make sure everything was done right, and then you vote that yes, this is okay. And sometimes it’s not okay. Sometimes there are errors and they’re found. But that’s what the DoD wage committee is,” Simon said.

“The surveys happened, the calculation and the new wage scales and wage rates were determined, but none of them could be actually implemented or paid because of the pause on the advisory committees. Everything was ready to go. So people who were due their raise in March and April and May, in June, July, August, September, none of them got their raises when they were supposed to,” she added.

Simon said the Office of the Secretary of Defense never offered any explanation of why the committee could not be exempted. “They just wouldn’t do it. They were not permitted to meet with us,” she said.

It appears that pressure from lawmakers eventually pushed the department to reverse its course.

“We certainly talked to a lot of lawmakers, and we talked to as many people in the administration as we possibly could and tried to put some political pressure on the secretary, and I guess he finally relented,” Simon said. 

The delay, Simon said, has been deeply frustrating for workers. “Across the board, people were absolutely furious. There’s no way to overstate how angry and resentful people were that this was happening. And, of course, there was a hardship, of course there was the shutdown, and then this on top of it, and it was a terrible outrage.”

AFGE estimates that more than 118,000 DoD employees are paid through the Federal Wage System.

If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

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Interview transcript: 

Terry Gerton Virginia Tech has just launched a generative AI training program. Tell us about what the program is and why you decided to start it now.

Jamie Cogbill Okay, great. Well, this partnership between Virginia Tech and Amazon Web Services is really about preparing the next generation of national security leaders for an AI-driven world. As one of our nation’s six senior military colleges, Virginia Tech has had the chance to pilot AWS’s new generative AI training, which is the first of its kind, before it’s rolled out to nationwide, or at least to the other senior military colleges. It directly supports the recent White House call to make senior military colleges hubs of AI research and talent development. And our cadets are already finding it incredibly valuable training as they prepare to lead in a defense environment that’s rapidly being transformed by artificial intelligence.

Terry Gerton There’s a lot of AI courses out there. What sets this collaboration apart? What’s unique in terms of content or focus or tools?

Jamie Cogbill Okay. Well, this is the first generative AI training program of its kind offered specifically at senior military colleges. And it directly supports the recent White House AI Action Plan, which was released last July, which calls on senior military colleges to become hubs of AI talent and innovation. And our cadets are getting hands-on experience with the same AI tools and problem solving approaches that are being used in real defense and intelligence missions.

Terry Gerton You mentioned cadets a couple of times here. For folks who may not know that Virginia Tech has a Corps of Cadets, tell us a little bit about that and how many cadets are actually taking the course.

Jamie Cogbill Okay. So yes, Virginia Tech is, as I mentioned, is one of six senior military colleges, which means that they have a Corps of Cadets, just like Virginia Military Institute or the Citadel, or our closest comparison is Texas A&M. There’s currently close to 1,400 cadets in the Corps of Cadets at Virginia Tech. But for this first pilot, it was offered to a total of about 75 students, and the intent was that at least half of them be cadets. And in this case, it was. We had about 38 total cadets that participated in the program.

Terry Gerton And who filled the other seats?

Jamie Cogbill The other seats were mostly people who are affiliated with Virginia Tech’s National Security Institute, which is a hub for defense-related research, but also for preparing future national security leaders here at Virginia Tech. And so the advertisement went out to both cadets and to the students who are affiliated with the Virginia Tech’s National Security Institute.

Terry Gerton It sounds like you didn’t have any trouble filling the seats. What does that tell you about the interest in this topic from future military and civilian defense leaders?

Jamie Cogbill There’s definitely a huge interest and our cadets who I talked to after the training just found it to be very valuable for them with just learning about AI in general, because they know it’s going to be an important part of their future careers, but also learning how to use it more effectively through effective prompt engineering and other methods that they learned throughout the training.

Terry Gerton Talk to us about some of the specific defense AI applications that you’re covering in this course. We all think about Chat GPT and Copilot, but how are those topics specifically coming across in defense-related issues?

Jamie Cogbill That’s a great question. And I don’t know the exact answer to that, but I can say that it’s teaching the core Amazon Gen AI services, which is something they call Amazon Bedrock, which Department of Defense has partnered with Amazon Web Services in a lot of ways, so it’s likely already using some of these AWS services. And so some of the people who are participating in the training will likely go into defense- or national security-related careers and already be expected to use or quickly learn how to use AWS software and AI tools. But I think the big takeaway is just learning AI in general, which is clearly going to be part of their future in national security and defense.

Terry Gerton I’m speaking with Jamie Cogbill. He’s the deputy director of the Defense Civilian Training Corps at Virginia Tech’s National Security Institute. Well, we talk a lot about AI on this program and all of its different applications. One thing we do know about it is it’s powerful but it’s also risky. So in this kind of training, how are you preparing students not just to use the tools, but to really lead responsibly with AI when the risks could be pretty high?

Jamie Cogbill I don’t have specifics about how this training addressed those kind of risks. I haven’t taken the course myself. It was Amazon Web Services who provided it. Talking to my cadets, I think it was a pretty intense curriculum. They did have two different instructor-led sessions, both four hour sessions, and each session was about three hours of content and an hour lab. And then they had a final competitive kind of gamified lab at the end. It was another four hour session where they practiced with real world challenges and in using AI. So I would assume that some of the training in the instructor-led portions was related to the risks of using AI, how to avoid hallucinations that AI can provide. And but also, in the Department of Defense, a key thing is ensuring the use of responsible AI, or RAI as they call it. And so I imagine that was also covered in the curriculum.

Terry Gerton This is cohort one this fall, first time you’ve rolled out the course. What do you think happens next? Where does it go from here?

Jamie Cogbill So we’re hoping that, and this is partially up to Amazon Web Services, but AWS is actively exploring how to scale the program for our spring semester here at Virginia Tech, potentially bringing it back in the spring, but also for 2026 in general. AWS originally intended to expand this training to all six senior military colleges across the country. And I think the success here at Virginia Tech with the pilot proved that our cadets and probably other cadets across the nation are eager to learn and ready to lead in the AI space. And we’re hoping that it set the standard for what other programs could look like.

Terry Gerton Well, always in a pilot there are lots of lessons learned in the process. What do you at Virginia Tech and Amazon take away in terms of needing to improve or broaden the program as you tried it out?

Jamie Cogbill Well, I think as you mentioned earlier, I think the demand is there. So if we can scale it up even here at Virginia Tech and and offer it to more than just 75 cadets and students. But I think that the big takeaway is really that partnerships like this are essential. And AI is changing the nature of national security. And we need to ensure our future military and civilian leaders can lead confidently in that environment. And I think this program shows how academia, industry and government can come together to make that happen.

Terry Gerton AI is such a fast changing space. How do you imagine that the curriculum might have to adjust even from one semester to the next just to stay current?

Jamie Cogbill Absolutely. And I’m sure the folks at AWS are right there on the cusp of all that change. And so my guess is that they are constantly updating their curriculum to keep pace with that.

Terry Gerton Are you hearing from senior leaders in the Department of Defense about how they view the program and what their hopes for it are?

Jamie Cogbill So far, no, not directly. My guess is at the senior levels at AWS, they are talking to senior leaders in the Department of Defense and potentially at the most senior levels of our government, since it was a key goal of the White House AI Action Plan to offer this type of training.

The post Virginia Tech and Amazon Web Services are teaming up to train the next generation of national security leaders in generative AI first appeared on Federal News Network.

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The federal offices are back open and hundreds of thousands of federal workers have returned to work after the longest shutdown in history. But nothing is back to normal — federal workers say morale and trust in leadership are at an all-time low, tensions are high between furloughed staff and those who worked through the shutdown, schedules are slipping and projects are being pushed back, and more people are accelerating their retirement plans or leaving federal service altogether.

The recent shutdown, however, has just exacerbated the existing problems and added to what federal workers described as an already extremely trying year for the federal workforce. 

“As if morale wasn’t already non-existent, it sure is now. I expect a surge of people to (quiet) quit and I expect the remaining players to be bombarded with work with no support or guidance from leadership,” one employee told Federal News Network. 

“The mission is dead. Operations are barely running. Morale is toast,” another federal worker said. 

“Everything about being a federal employee in 2025 has destroyed workforce morale — from constant [reduction-in-force] threats, to losing colleagues to early/forced retirements and firings, to the loss of any telework to facilitate work/life balance for working parents or senior caregivers, this is the worst professional year I have experienced in nearly 20 years of service to my country. Nothing about the current [Office of Management and Budget] approach to leadership has moved our country forward,” another employee said.

A Federal News Network survey, conducted online between Nov. 17-30, asked federal workers what it has been like going back to work after the 43-day government shutdown. Survey respondents were self-selected, and they self-reported information to verify their status as current federal employees.

Federal workers described the experience as disorienting — returning to thousands of unanswered emails and scrambling to catch up with partners who kept work moving during the shutdown. There was little to no guidance from top management; they reported overwhelming backlogs and project schedules going completely awry.

Many said overloaded or outdated IT systems, lapsed system access and computer issues made even basic tasks difficult.

“IT issues as devices are set to expire and become inactive after 30 days of non-use, supervisory chain is still not back to work and others are catching up on leave. There are large gaps within the higher chain of command, tremendous amount of confusion, no clear description of how to verify back pay and related deductions are accurate, statutory deadlines did not stop during the shutdown, so crushing workload to return to,” one employee said on Nov. 24. 

“It is not so simple as flipping a switch. We are still waiting on funds to arrive and are unable to work on things until those funds arrive,” another federal worker said on Nov. 18. 

“I engage in very technical work. A 1.5-month shutdown has thoroughly derailed my train of thought. It will take a long time to refamiliarize myself with what issues were being sorted out, what solutions I had been pursuing, even how any of my own code works,” another employee said. 

Several federal workers said their agencies could face budget cuts due to not hitting mandatory spending benchmarks — goals that are “impossible to achieve” after a 40-plus day lapse in appropriations.

In addition, many employees now have to use their “use-or-lose” annual leave before the end of the year, which will further delay progress and extend timelines.

Nearly 1,500 people responded to the survey. Out of 739 federal workers who responded to this question, nearly 47% of respondents said it would take them more than two weeks to catch up on all the work missed during the shutdown.

“My program was halted immediately, but will take two months to ramp back up,” one worker said. 

“Can you really ever catch up? Some work will just be lost — deprioritized in the chaos,” another federal employee said. 

And the threat of another shutdown is looming — the bill President Donald Trump signed into law keeps the government open only through Jan. 30. The uncertainty, workers say, is making people reluctant to fully dive back into work. 

“With holidays coming, this will set projects back months,” one employee said. 

Federal employees who worked during the shutdown also expressed “apathy and annoyance” toward furloughed employees who did not work during the shutdown, saying the resentment has led to conflicts and made collaboration difficult. 

“Expect operations to be negatively affected as the furlough has driven a wedge between those furloughed employees and those who remained on the job,” one federal employee said.

Receiving back pay

Most of the federal workers worked without pay during the shutdown, missing more than four weeks of pay. 

When the government reopened on Nov. 13, the Office of Personnel Management said it would take several business days for workers to get their back pay.

Out of 728 individuals, 200 federal workers — about 27.5% — said they received their back pay within one-to-three days after returning to work. Another 200 said they were paid within four-to-seven days. For the remaining 323 individuals, it took more than a week to receive their back pay.

Many employees told Federal News Network that there was a lot of confusion about how to process timesheets and guidance changed a few times the first two days, which had contributed to the delay in issuing our pay.

“Smithsonian still has not managed to get us paid. They are wasting time making sure everyone has the correct time codes rather than getting people paid. It’s more important to them that they take a couple weeks to record we were furloughed. Can’t pay the mortgage, but at least they’ll have the correct time code,” one employee said on Nov. 22.

One Interior Department employee told Federal News Network on Dec. 1 the agency had only paid them for 72 hours worked during the shutdown and had promised the remainder by Nov. 25 — they are still waiting on that payment. They added that none of the 69 civilian employees at the U.S. Park Police have been fully paid. Sworn officers, however, received a flat 80 hours per pay period, and while overtime and night-differential corrections were made, it’s not clear if that pay had been issued. 

“We have not heard anything about when we will be paid beyond the deadline that passed a week ago, no reason has been provided to explain the delay,” the employee said. “I will be retiring early. While not the only reason, the recent hijinks played a role in my decision.”

One employee at INTERPOL Washington told Federal News Network on Dec. 1 that personnel there have received only partial back pay and some employees have only received pay for one pay period. The issue stems from the Justice Department’s decision to dismantle INTERPOL Washington and fold its remaining functions into the U.S. Marshals Service during the shutdown — while making changes in the pay system while payroll processing was underway.

The workers were initially told they would receive all of their back pay on Nov. 21, but instead received partial pay on Nov. 24. DOJ then promised the rest by Nov. 28, but only a handful of people were paid over that weekend. The agency now says it has finally identified the problem and that employees should be paid by Dec. 3.

“Every time that the DOJ claims to find a solution and puts another date out for when we should get paid, there is just another disappointment,” the INTERPOL Washington employee said.

Another Air Force civilian at Lackland Air Force Base, who was told they would be paid last week, is still waiting for their back pay now nearly three weeks after the shutdown ended. On Monday, they were told that “the comptroller squadron is working diligently to manually process over 3,000 timecards with an estimated completion date of Nov. 29.” 

For many of those who received back pay, determining whether the amount was correct was nearly impossible. 

Dozens of respondents said they were unsure if their payments were accurate because agencies did not issue accompanying paystubs for the affected pay periods. Several employees said since payroll providers such as the Defense Finance and Accounting Service do not provide leave and earnings statements for retroactive pay, meaning they will have to wait for the next pay period to verify whether the amount is correct.

“It seems to be off by a few hundred dollars, but I can’t determine where the discrepancy is,” one federal worker said on Nov. 26. 

“We don’t know since it was a partial payment with no documentation,” another respondent said on Nov. 24. 

“Many people at work say that their paychecks were less due to taxes on lump sum payouts,” another respondent said on Nov. 25.

More feds eyeing the exit

Federal workers were already overwhelmed, stretched thin and struggling with high levels of anxiety following the Trump administration’s push to reduce the size of the federal workforce. Now, the shutdown is pushing even more people out the door. 

Out of 758 federal workers, 329 respondents — about 43.4% — said that the shutdown made them reconsider staying in federal service.

Many said they are actively looking for an out, while for others the shutdown reinforced their decision to retire

“It is so untenable that I plan to quit in the next month or so. The situation has gotten even worse since returning,” one employee said.

“The shutdown did solidify that I will retire the first date I can,” a federal worker said.

“I have dedicated 20 years to serving my country, including service in the U.S. Army. It’s pretty thankless to be a federal civilian employee now. I used to encourage my children to pursue a similar career but now I am encouraging them to stay away from federal service,” another employee said. 

Financial, mental health toll

More than half of federal employees — 58% of respondents — reported experiencing financial challenges during the shutdown, and nearly a third said they struggled to pay bills. Over 51% of federal workers said they had to rely on credit cards, loans or emergency savings to pay their bills, while 14% reported missing rent, mortgage or other payments. About 10% of federal workers said they needed outside assistance, such as food banks and relief programs. But notably, nearly 62% said the shutdown impacted their mental health.

Several respondents said they dipped into retirement accounts or cleared out emergency savings to stay afloat, while others reported delaying Christmas shopping, postponing home repairs or borrowing from family members to cover basic needs. Younger workers and those in single-income households were hit especially hard.

And while some said they were fortunate enough to have savings or a second household income, many still described the experience as deeply destabilizing. 

“Fortunately, we are a two-income, no-child household and good savers. But I did give a monetary gift to a colleague who is in a much more tenuous situation,” a federal worker said.

“I requested a skip loan payment on my car since I could without fees. I have paid for things out of savings and since I’m a bit older I can do that, but I’m depleting savings still as I continue to not be paid,” one employee said.

“Outsiders calling it a ‘free vacation’ don’t understand the effects the shutdown has on furloughed staff,” another employee said. 

 Workers described experiencing “constant dread and worry,” “incredible stress and anxiety” and “the feeling of absolutely no protections.”

“It was very stressful. I had to take a part-time job,” one employee said. 

Ultimately, one worker said, the impacts were “cruel and petty and proved to be irrelevant to either side achieving their stated goals.”

If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

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The Cyberspace Solarium Commission’s (CSC 2.0) annual implementation report has sparked fresh concern from representatives and cybersecurity leaders that U.S. cyber progress is slowing. Bureaucratic delays, budget constraints and uneven policy follow-through, particularly around the Cybersecurity and Infrastructure Security Agency’s authorities and funding, are all apparent.

But does this paint the full picture of the technical implementation and enforcement of U.S. cybersecurity? Hardly.

Beneath the policy layer, the technical and strategic modernization of U.S. cybersecurity is actually accelerating faster than ever. While there’s a lot of doom and gloom at the civilian policy level, it’s important we acknowledge the progress individual agencies have made and provide constructive steps to continue to capitalize on that progress.

A defining moment came with the finalization of the CMMC 2.0 rule, which is now effective and entered its first implementation phase on Nov. 10. More than 80,000 defense industrial base vendors will be required by contract to comply with rigorous cybersecurity controls aligned to NIST 800-171, with a hard assessment deadline in 2026.

CMMC 2.0 ensures that cybersecurity is no longer a checkbox exercise or a “nice-to-have” policy objective. It’s now a legal and contractual requirement. By the time full assessments begin in 2026, the Defense Department will have reshaped the entire DIB into a verified ecosystem of secure software and systems providers.

That’s a significant milestone that will set the stage for the operationalization of accountability for government technology.

Equally as transformative is the DoD’s quiet revolution in risk management. In September 2025, the DoD introduced its Cybersecurity Risk Management Construct (CRMC). This is a long-awaited, direct successor to the outdated, paperwork-heavy Risk Management Framework.

The new construct adopts the continuous authority to operate (cATO) model, enabling near-real-time monitoring and risk response. It’s a move away from static compliance documentation toward dynamic, data-driven assurance, reflecting the pace of modern software delivery.

The DoD’s transformation is being powered by the Software Fast Track (SWFT) initiative, launched in mid-2025 to modernize acquisition. SWFT brings DevSecOps automation directly into the authorization process, ensuring secure software can reach warfighters faster and without compromising security. It’s a fundamental shift from compliance to continuous validation.

Lastly, the CSC 2.0’s report doesn’t touch on the work being done by the National Institute of Standards and Technology to operationalize the AI Risk Management Framework for 2026. This will bring much-needed clarity to secure and responsible AI adoption across government and industry.

It’s easy to equate stalled legislation or delayed budgets with a lack of progress. But in cybersecurity, the most impactful advancements rarely happen in congressional hearings. They happen in codebases, acquisition reforms and audit protocols. The policy narrative may be sluggish, but in those areas, we are actually seeing healthy progress as the technical foundation of U.S. cyber defense is advancing rapidly.

Through CMMC enforcement, cATO adoption, automated software assurance and AI governance, federal cybersecurity is entering an implementation era where secure software supply chains and continuous monitoring are not aspirations, but expectations.

With all that said, does this mean the CSC 2.0’s findings should be ignored? Absolutely not.

The reality is that we don’t have a cybersecurity problem; we have an insecure software problem. By not driving forward policy at the civilian-level to change the economics in such a way that incentivizes ensuring the delivery of secure software, we may be ceding the very progress I just outlined.

However, to say “U.S. cyber progress stalls” is to overlook this reality. The truth is that 2025 marks the year where U.S. cybersecurity finally shifted from policy to practice.

Antoine Harden is the vice president of federal sales at Sonatype.

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Interview transcript:

Terry Gerton: It is GivingTuesday and so I’m delighted to start this story with Navy-Marine Corps Relief Society. But as we sit here today, coming off of the longest shutdown in government history, walk us through how military families are doing right now. How did that shutdown affect them?

Robert Ruark: That’s an absolutely great question. I think the way military families feel is it can certainly affect their confidence in basically in the support of their families. And that’s the big thing is that if their pay is uncertain, then it is absolutely necessary that they have to have a backstop for that. So one of the things that’s come up with a lot of the banks that cater to the military is the Payroll Protection Plan, the PPP. So the banks like USAA, Navy Federal Credit Union, PenFed, PenAir, a lot of them to cater to the military, they have those. And where you can virtually, you got to get signed up for that if you’re basically active duty service member because they can guarantee a great part of that payday. But if you’re not, you talk about stress. I mean, there’s enough stress in military life between inflation, global conflict potential, unplanned deployments that are going on quite a bit right now, housing and gas prices and basic life events that happen to your families, especially when you’re raising a young family with children at a military base and you’re forced to relocate, deploy all the time, your spouse is trying to find work and it’s really difficult to do that. So to not pay a service member, to a service member, in my opinion, is a sin because of what they do for this nation because they’re not necessarily doing it for themselves. They’re doing it because they want to be part of something much bigger and that’s the country and the country that they love. There’s a very mutual relationship there. So you want that confidence. You don’t ever want to lose that confidence. So I think pay has to be there. We were taught when I was a young Marine: pay, mail and food. Pay, mail and chow is what we call it, but you need those three things. Those are rights. And so I think every military service member views it as a right to be paid on time.

Terry Gerton: People who aren’t familiar or haven’t lived a military lifestyle may not understand all of the things that you just walked us through. And that’s, I think, what makes this GivingTuesday campaign so interesting. Navy-Marine Corps Relief Society has partnered for the fourth year in a row with the other military aid societies for GivingTuesday. Tell us about that partnership and what it means for military families who may be facing some of the stresses you just described.

Robert Ruark: I think the best part about the partnership is, as everyone knows in the country that follows the armed forces, we consider ourselves a joint force. And so that should also apply to the military nonprofits. Unfortunately, most of the our nonprofit peers outside the military aren’t really partnered with a lot of people. There’s maybe a few exceptions, of course, but the bottom line is we thought we would do something about four years ago that would be really new. And so we decided to partner to benefit all of us because we fight together, we train together in a joint environment. So we decided on GivingTuesday, the last few years, to the four military aid societies, the Army Emergency Relief, Air Force Aid Society, Coast Guard Mutual Assistance and Navy-Marine Corps Relief Society, we would join forces to raise important funds to support military families in need through a different campaign each year. This year’s campaign is ‘Make Giving Your Superpower.’

Terry Gerton: Tell us about that campaign theme and why you chose it.

Robert Ruark: So the campaign is being conducted today on social media with the one-day goal to provide active duty service members and family members with vital emergency relief, financial support and education assistance. Those are the three things that we all have in common that we do to support everybody.

Terry Gerton: And how do you hope folks resonate with that superpower theme?

Robert Ruark: Well, the theme is a challenge to Americans to step up, suit up and make giving your superpower for the heroes who serve this country every day. All the donors need to do is visit the website missiongive.us. We believe our service members are truly superhuman in many ways and this is one way to honor their service. And the money goes straight to those different ways that we all support them. Financial assistance, education assistance, disaster assistance. And it goes primarily to those junior service members, the E-5s and below, with probably about five years or less service and a lot of them are married, they don’t make a lot of money and they’re looking to really improve their lives.

Terry Gerton: I’m speaking with retired Marine Corps Lt. Gen. Bob Ruark. He’s the president and CEO of the Navy-Marine Corps Relief Society. So something that’s really interesting with your campaign this year, you have a major matching gift partner. Tell us about Lockheed Martin’s role in this year’s campaign.

Robert Ruark: Lockheed Martin is the, of course, the global aerospace defense company. About three years ago, they started the $1 million match for all contributions, doubling the impact. That made this not only a competition, but a wonderful thing that very few nonprofits have. And so last year, we raised $1.3 million, which clearly doubled the impact. And so visiting missiongive.us is really what we ask, but that money will go right back out to the troops and especially those that are deployed, the families that are behind and help them with a lot of their needs. For example, financial assistance is our biggest need. And right now, the Navy-Marine Corps Relief Society alone, we do $50 million of financial assistance a year, interest-rate loans and grants and we sit and we do budgets. We do financial education. We do everything we can to help them basically make the money or make the dollars go as far as they can.

Terry Gerton: But if someone wants to go beyond giving on GivingTuesday and get involved, what are the opportunities and how might someone become a volunteer with you?

Robert Ruark: Well, there’s enormous opportunities. They can visit one of our offices at one of those 52 major Navy and Marine Corps bases. They can go to nmcrs.org. They can call us. They can email us. We will always accept the volunteers. And the best part about that is the volunteers, in a lot of cases, get some great training. They become caseworkers in financial situations. They can get retail experience in our thrift shops. They can assist the visiting nurse program because it’s in such demand where we make 12,000 patient contacts each year, and they can learn budgeting and be able to do that financial education. So there’s enormous capabilities to grow and we know military spouse unemployment, I should say, is a huge issue. They can get some skills and then hopefully apply those to a real job.

Terry Gerton: Do your volunteers have to be connected to the military or can they be real-life civilians?

Robert Ruark: They can be real life civilians. It is so easy.

Terry Gerton: Well, give us the website one more time.

Robert Ruark: Ours is nmcrs.org and the GivingTuesday website to give to all of us to choose your favorite military aid society is missiongive.us and please thank Lockheed Martin in some way, shape or form because they’re making it happen with a billion-dollar match.

The post This GivingTuesday, one campaign aims to turn generosity into a lifeline for military families first appeared on Federal News Network.

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The Defense Department wants to shake up how it works with value-added resellers.

In a draft memo obtained by Federal News Network, the Pentagon would place a 5% cap on most fees charged by resellers starting with a specific special item number (SIN) for IT products. This cap would only apply to IT products sold through the General Services Administration’s schedule contract.

DoD says it spent about $2 billion in fiscal 2024 through the GSA schedule on these technology products.

The draft memo is one of two expected from the administration to address what it believes are higher than normal costs when buying IT products and services through resellers.

GSA initiated this review and proposed overhaul of the reseller market earlier this year. It started in June with a letter to 10 value-added resellers to collect data to better understand the role of such companies and what it would take for original equipment manufacturers (OEMs) to sell directly to the government. Then in early October, sources said GSA was close to issuing a memo that would establish such a cap on resellers.

While GSA has yet to issue such a memo, this undated draft memo from the undersecretary of Defense for Acquisition and Sustainment, Michel Duffey, offered more specifics into what this market cap and oversight process would look like.

Duffey references GSA’s plans in his draft memo.

Duffey wrote the initiative would “initially entail GSA contracting officers’ use new control measures to support their determinations of price reasonableness for products offered for sale under IT Special Item Number 33411. Specifically, GSA will more closely scrutinize pricing from entities that hold themselves out as resellers.”

It would focus on SIN 33411, which is for the purchasing of new electronic equipment, including desktops, laptops, servers, storage equipment, routers and switches and other communications equipment, audio and video equipment and even two-way radios.

Since this cap would only apply to purchases off the GSA schedule, DoD is returning to the idea that these prices are no longer automatically considered “fair and reasonable.”

This harkens back to 2014 when both DoD and NASA issued deviations to the Federal Acquisition Regulations that said schedule prices shouldn’t be automatically considered fair and reasonable. Several years later, DoD and NASA removed that deviation.

“When placing orders on IT contracts, I expect the department’s contracting officers to independently determine fair and reasonable pricing by considering the unique factors of a given acquisition in the same manner as GSA,” Duffey wrote in the draft memo. “Finally, and in general, we will apply the same common-sense approach to avoid paying excessive pass-through costs and avoid paying non or low-value added price markups across the complete range of the procurement.”

A third change DoD would require is for vendors to disclose in their price proposal the manufacturer or dealer price, the percentage markup from the OEM price. DoD also will require a description of the value provided that compromises the markup amount. Any markup more than 5% would require additional vendor justification and a higher level management attention. The memo doesn’t describe what either of those will look like.

Multiple emails to DoD seeking comment were not returned.

DoD’s reasoning for price caps questioned

Federal acquisition experts and resellers questioned the DoD’s rationale for applying price caps.

Three different executives who work for resellers as well as a former federal acquisition official, all of whom requested anonymity for fear of retaliation and to talk about a pre-decisional memo, said this approach flies in the face of what the Trump administration has been trying to do since January to relieve the burden of federal acquisition and encourage more vendors to participate.

One executive at a reseller says the first thing that DOGE went after was cost plus contracts. Now, DoD wants to take what this person called clean and simple transparent firm fixed price contracts for commercial products and turn these into cost plus type contracts, which the executive said makes no sense.

“Audits, narratives, justifications, additional steps and time, how is this simplifying acquisition and growing the industrial base?” the executive asked. “Are they going to cap gross profit on other items they buy like cars, furniture, office supplies, building materials, heating, ventilation and air conditions (HVAC) systems, lighting, plumbing, tools, safety gear and maintenance supplies next?  Where does it stop? Why are we being targeted?”

The executive says there seems to be a big misunderstanding about the role of resellers and even how the market works.

“It’s competition, not price controls, that drive down price. If that’s the ultimate goal,” the executive said. “Capping margins would drive out the best, service-oriented partners that invest in engineering and innovation — leaving behind low-touch resellers who only process orders. This reduces competition, supplier diversity and access to expertise.”

Another executive at a reseller says determining what constitutes an “excessive mark-up” is subjective. The source said for an administration that wants to keep things moving in a timely pace, giving contracting officers discretion about what is an excessive mark-up will cause more problems than it will solve.

“They are assuming that the contracting officers have the appropriate knowledge and training to do that,” the executive said. “Unfortunately and frequently that isn’t what the contracting officers have. There is a lack of understanding that will end up causing confusion and delays.”

VARs solve problems

A third executive questioned how DoD, or any agency, would oversee this entire initiative.

They asked whether the resellers would not need a cost approved accounting systems? If so, that would add significant costs and burdens.

Finally, the former federal acquisition executive, who spent more than 25 years in the federal government, says resellers provide a lot of value to agencies, partly because OEMs traditionally don’t sell directly to the government nor do they want to, but also because the resellers solve problems for the agency.

“They know the technology. They know the OEMs and can tell you what will work or what will not work. Resellers are invaluable,” the former executive said. “In terms of their markup, you just have to negotiate better. If you get at least two resellers to bid, you will get a good price.”

Is capping profits even legal?

All the sources agreed that if DoD or GSA wants better prices, they should do two things: ensure there is competition at the task order level and train contracting officers and other acquisition workers to be better negotiators.

“If you don’t have contracting officers who can push for better pricing at the task order level, then how are you going to have contracting officers who can make these determinations of the value of the markups that are over 5%?” asked the third executive. “You are better off training contracting officers to go after better prices at the task order level. GSA has ways to help like the 4P tool that combs all over for publicly available prices. But applying caps on fees or profit goes against capitalism. It goes against common sense and it will be detrimental to the government and its industrial base.”

Aside from just questioning the rationale behind the price caps, experts also asked whether the memo would violate the FAR and even some federal laws.

One of the reseller executives highlighted five FAR provisions and/or laws this idea seems to violate.

The executive says this requirement seems to violate the Truth in Negotiations Act (TINA) in the sense that commercial Items are not subject to TINA, which requires contractors to provide certified cost or pricing data to the government during negotiations for other items because the commercial marketplace is presumed to be a competitive environment and should drive a reasonable price.

Another part of the FAR this initiative may violate is Part 2 for the acquisition commercial items. The executive said if the government is obtaining a “fair and reasonable” price, then the focus is not about contractor costs, reasonable mark-up, or profit, it’s about the price the agency is paying.

A third section of the FAR this may violate is under Part 15. This includes a prohibition on obtaining certified cost and price data for commercial items.

Cy Alba, a procurement attorney with the firm Piliero Mazza, said if the government is buying through a firm fixed price contract, then they are not supposed to be asking for cost or price information. He added if it’s awarded through the GSA schedule and it’s below the maximum order threshold then prices are determined to be fair and reasonable by GSA.

Alba also said if it’s a commercial item, or really anything that has adequate price competition, the market is supposed to make that determination that the price is fair and reasonable. He said if the government thinks the markup is too high, then they don’t have to buy the product or service from the vendor.

The post Draft memo details DoD plans to cap most reseller fees first appeared on Federal News Network.

© AP Photo/Alex Brandon

Interview transcript:

Terry Gerton: You’ve recently laid out a mix of reforms and warnings and priorities for the 2026 National Defense Authorization Act, which is still moving through Congress. What’s the overall message before we dig into the specifics that POGO wants to send about this year’s recommendations?

Greg Williams: Sure. I think we all welcome all of the extraordinary work that Congress has done this year to produce two different versions of NDAA bills that work very hard to overhaul military acquisition. Now that said, they place an enormous emphasis on deregulating military acquisition, with the Senate’s version repealing no fewer than 86 distinct statutes that govern military acquisition. Now, Congress has its own research arm to help inform for these decisions, and that’s the Government Accountability Office. Now the Government Accountability Office maintains a database of suggestions. And last I checked, there were 750 recommendations they had for how the Defense Department is run and exactly none of them recommend repealing any statutes having to do with military acquisition. Now I think the unavoidable question is if Congress doesn’t seem to be listening to the GAO, its own investigative body, well, who is it listening to? I think it’s only logical to wonder to what extent these changes are being pushed by the defense industry, perhaps at the expense of the interests of the taxpayer.

Terry Gerton: Are you seeing any specifics in the NDAA that relate back to those 750 GAO suggestions?

Greg Williams: Frustratingly few. Two that I’ll call out that I think are really important are passages in both the House and Senate versions that secure greater right to repair the military’s own equipment. Just imagine you’re far from home, you have a piece of equipment that you rely on, perhaps for your safety or in order to be able to complete your mission, and it breaks. Right now, there are rules, laws, contracts that often get in the way of military personnel fixing those things. This year’s NDAA, whether the Senate or the House versions prevail in this context, will dramatically increase the military’s right to repair its own equipment. And I think it’s really important that those passages survive conference. The other one that I think is particularly important in terms of acquisition law are some reforms to what’s called the Nunn-McCurdy Act, which stipulates that Congress needs to be informed if weapons development or procurement programs breach certain cost thresholds and requires that the Secretary of Defense or Secretary of War recertify those programs and provide updated timetables and budgets for their completion. So the passages that amend that provide Congress more say in the recertification of those programs and they make it easier to call out cost overages, especially in the case of large programs like naval shipbuilding, where if you look at the overall program, you may not have breached overall cost thresholds. But you’ve already built two or three ships and you can tell that they’re way over budget. What this passage allows you to do is to treat them as distinct subprograms and apply those thresholds to them individually.

Terry Gerton: Well, you’re right. There’s certainly a lot of coverage in the NDAA, both versions, around acquisition reform. One of the other pieces that POGO has really called out is the use of military force. First, you recommend that the authorizations for the use of military force from 1991 and 2002 tied to operations in Iraq be repealed. Why is it so important to take those off the books now?

Greg Williams: Well, those AUMFs have been used very pervasively to authorize all kinds of use of violence around the world that seem to have very little to do with the original intentions of those two AUMFs. And one of the ways Congress can clarify the use of its power to decide when and where we go to war is by not leaving things like that lying around to be potentially misinterpreted or reinterpreted by the executive branch.

Terry Gerton: I’m speaking with Greg Williams. He’s the director of the Center for Defense Information at the Project on Government Oversight. Greg, let’s follow up on this a little bit because there are conversations happening between the president and his team and Congress right now about operations in Venezuela. So how do those AUMFs relate to those kinds of current conversations?

Greg Williams: Well, I’m going to emphasize that there are operations against Venezuelan nationals and Venezuelan boats, and they’re being treated by the administration as being very distinct from potential operations that might take place in Venezuela. And in fact, the administration is arguing that they don’t need to comply with the War Powers Act in the context of the Venezuelan boats because we’re not deploying troops in harm’s way. As you may know, these boat strikes are believed to be largely conducted by unmanned aerial vehicles and so arguably, American troops are never in any danger as we execute these strikes. Now if we were to invade Venezuela or if we were to fly crewed aircraft over Venezuela or even close to Venezuela and engage in a shooting war with them, that would more clearly trigger the requirements of the War Powers Act, or at least that would not be subject to the exclusion that the Trump administration has called out in the context of those boats.

Terry Gerton: One of the other concerns that you raise about military deployments is border enforcement and the use of military forces in that function. What’s the concern there?

Greg Williams: Well, the overall concern is that what we’re seeing is a steady erosion of what we thought were bright lines, protecting both American citizens and others against being arbitrarily seized or killed. And whether we see those lines blurred outside our borders, as in the context of these boats or inside of our borders, it just makes us all a lot less safe. It’s much harder to count on not being swept up in some raid and potentially deported to a foreign country without any meaningful opportunity to defend our rights.

Terry Gerton: Well, military deployments and acquisition reform are really big topics. I want to pull you down to something a little more wonky and talk cost accounting standards because you’ve got a recommendation in here and there’s been a lot of conversation about moving DoD from cost accounting standards to GAAP, Generally Accepted Accounting Principles. Why was that important enough to raise in your memo?

Greg Williams: I think it represents a fundamental misunderstanding of how accounting in general works. And it undermines a very basic control that any customer organization wants to have over vendors that are submitting things like expense reports. So at a high level, I would describe the generally accepted accounting principles as a set of tools that are created by an industry consortium to protect shareholders in private organizations from misrepresentation of the value of the enterprise. Cost accounting standards are like the expense report guidelines that any consultant or anyone who’s ever worked as a customer for a big business has to comply with. And different customers have different standards. Some say you can’t have any alcohol at all with your dinner, some say you can have one drink. Some say if you’ve traveled less than 50 miles, you can’t submit any meal-related expenses. It represents an agreement between the customer and their vendor about what is and is not an acceptable expense. And it’s a very basic structure that any business person should recognize.

Terry Gerton: How does that relate to DoD’s ability to pass an audit?

Greg Williams: I don’t think it is particularly related. As long as you follow whatever rules are articulated for you, you can pass an audit. I think use of cost accounting standards is more about making sure that the government gets a fair deal from its vendors when those vendors submit cost reports for reimbursement.

Terry Gerton: So POGO’s list is pretty specific in terms of things that you would hope Congress would consider. If they were to take up your list, what kinds of impact would you expect to see in terms of military readiness and operations?

Greg Williams: Well, I think it’s really interesting that over the last several weeks we’ve paid a lot of attention to the USS Gerald Ford Carrier Strike Group. There are two readiness issues that bear on it directly that have received some attention, I think, should probably receive more attention. One is that it was called out as a specific example of how service people are affected by the inability to repair their own equipment. And the example that was used was, I think, more than half of the ovens used to prepare meals for sailors embarked on the Ford were out of commission and had to wait an extended period of time for the vendor to repair them. Now that’s one thing when you know you can’t have muffins with your breakfast. But if similar principles apply to systems that allow the aircraft carrier to launch and recover aircraft or move weapons to the flight deck and things like that, just imagine being 6,000 miles away from the contractor who might repair those things and having one of them break and having to wait or redeploy back to the continental United States to have those things fixed. It’s just, I think, a fundamentally unreasonable expectation and puts our troops needlessly in danger.

The post POGO has new recommendations to improve the 2026 NDAA before it’s finalized first appeared on Federal News Network.

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Interview transcript:

Terry Gerton: Well, I want to talk about your new book that talks about the U.S. campaign against the Sinaloa cartel and its Chinese chemical suppliers. This tells a story that a lot of people don’t know. So begin by filling us in on the background.

Jake Braun: Sure. So I initially got the idea to write this when I was sitting with some HSI, Homeland Security Investigations folks, at a retreat that we were doing in Crystal City, actually talking about fentanyl. And one of the guys there starts going into the takedown of El Chapo. And it’s just a fascinating story. And I had no idea how much HSI was involved in this. Obviously, the DEA was super involved as well. And he goes into all the wiretapping they were doing and working with the Mexican Marines and all this stuff to get them. And so he mentioned this group called the TCIUs, the Transnational Criminal Units that HSI pays. These are elite in Mexico’s case, Mexican law enforcement officials that are on the U.S. payroll and kick down doors for our brave men and women out there. So went down to meet some of them and we sat at the top of the Sofitel Hotel, which is right next to the U.S.-Mexico embassy. It’s where all the government people sit, and we’re sitting there with these agents and their HSI handlers and it’s like a rooftop thing. We’re drinking beers and by the end of the night, doing shots of tequila and everything. And these guys are showing me pictures in their phones of like them taking down these huge Sinaloa cartel groups, and they’ve got like guys with balaclavas all handcuffed next to these helicopters and so on. And talking about the shootouts they’re in and everything else and I was like, ‘Oh my God, somebody’s got to tell this story.’ And so I just kind of started writing down what we were doing every week and eventually it turned into this book. But really, there’s kind of three main pieces to it. One is really just an assessment of HSI and really just what they’ve become as an organization. And at least at that time, really just fascinating everything that they’ve done in the last 15 years or so since they were stood up. But then also that fentanyl is not a redux of the crack cocaine epidemic. Most people who are taking fentanyl don’t know they’re taking it. So it really is more like a mass poisoning than anything else. And then finally, as I came to find out when I was with HSI and their TCIUs and so on, just the complete transformation from a corporate perspective that the Sinaloa cartel has gone through over the last decade or so and how that is so responsible for what we’re facing with fentanyl today. So it was really a fascinating journey for me and hopefully, I’ve been able to pull back the curtain and for folks and add some interesting color to make it a cool kind of thriller type story while also going into some really kind of heavy topics.

Terry Gerton: Well, let’s take those three that you mentioned and sort them in order because this operation that you describe is really an unusual collaboration across agencies and across countries. What surprised you most about how that team was formed and how it operated?

Jake Braun: Well, it was really interesting in the sense that for most of history, law enforcement has looked at criminal organizations from kind of a kingpin strategy, right? It’s like in Chicago, where I’m from, they go in and they take down Al Capone and like help decapitates the mob here and everything else. Well, Sinaloa’s been around for over a century. They can outfight the government in parts of Mexico and they’re as big as a Fortune 50 company. We’ve taken out almost every head of the cartel they’ve ever had, and they’re stronger today than they’ve ever been. And so we started putting together a counter network approach, looking at it from a counterterrorism perspective, the way we took out ISIS or al-Qaida as a network, as opposed to trying to just take out bin Laden or one of the terrorist leaders, but trying to go after the network. And that really required a whole-of-government approach. So it wasn’t just HSI or DEA. I mean, they were in many ways the tip of the spear, but we had massive involvement from the intelligence community, the military from an intel perspective, obviously DEA, other parts of DOJ, and nearly every part of DHS, whether it be CBP, Coast Guard, Intel and Analysis, et cetera. And so the meetings we had on this, it was really a cast of everybody and anybody who had worked in the War on Terror because it was really kind of the same approach that we took to stand up this operation against Sinaloa. And by the way, in the first year after we launched the effort, which we launched in ’23, fentanyl fatalities went down by 37% in 2024. So we think it’s working and the current administration, I think, has picked up the many places where we left off and, hopefully, we’ll see the deaths further decline in coming years.

Terry Gerton: I’m speaking with Jake Braun. He’s the executive director of the Cyber Policy Initiative at the University of Chicago Harris School of Public Policy. Well, let’s come back to that for a minute, and that’s your second point. You mentioned fentanyl is really not so much a drug as it is a mass poisoning, but also the impact of this operation, reducing fentanyl deaths by about 40%. What are the key takeaways from those points? How should they impact what we’re thinking about in terms of national policy?

Jake Braun: Sure. So first off, people might view saying it’s a mass poisoning as somewhat hyperbolic, but I really don’t believe it is. And this is something else that I really did not know until I started working on this. Almost everybody, even drug users, avoids fentanyl like the plague. But the way they wind up dying from fentanyl almost always is that it is cut into something else that they’re taking. Now sometimes it’s cut into other drugs, which of course folks shouldn’t be doing, but they also don’t deserve to die for it. Oftentimes though, it’s cut into fake prescription pills that folks are given from a friend or there’s these horrible stories about a kid who’s studying for finals in college and they want to take an Adderall or a Xanax or something like that and they take one from a friend thinking it’s real. Oftentimes, the friend thought it was real, too. And it turns out it has fentanyl in it and they die from one dose. That’s where this is this again is not the crack cocaine epidemic. People are dying who don’t even know that they’re taking these drugs. And from a public policy perspective, I think that requires a very different approach for how we inform potential victims to not take the drug. It can’t just be like, ‘Hey, don’t take fentanyl.’ Nobody’s trying to take fentanyl. It’s you can’t really take anything that you don’t know exactly where it came from, even prescription pills. Not prescription pills you get from a pharmacy, but from a friend or a colleague or whatever. So that’s one major difference in how public policy needs to really think through how to address this. When it comes to the kind of counternetwork approach that we took and looking at Sinaloa, what again was so fascinating to me that I did not know going into this was that Sinaloa has completely changed its business model in the last decade. So it was an essentially a Fortune 50 company that had two main commodities that sold marijuana and cocaine. Well, marijuana, we’ve mostly legalized in the country and even in states where it’s not legal, they’re getting it from another state that is, generally not the Sinaloa cartel. And cocaine, which used to be incredibly popular back in the 80s, about 7% of the population reported doing it in any given month, it’s now down to 0.3% of the population is doing cocaine. So it’s like if you went to McDonald’s and said, ‘Oh, guess what? Nobody is going to buy your hamburgers and french fries anymore.’ I mean, what would they do? So what Sinaloa did is they’ve taken over the migration trade. I mean, you cannot cross the border in the United States or into the United States or Mexico unless you pay Sinaloa or their main rival, CJNG. That is a big shift. That is not the way migration worked years ago. And then separately, since cocaine and marijuana aren’t making money for them anymore, they figured out how to both cut fentanyl into the drugs they have to increase their margins. But also they got into this illicit prescription drug market and of course they did that right at the heels of us weaning the population off of oxycotton and other drugs that had plagued society for well over a decade. And they filled that void, which was something that a space they were not in before. And that’s made this so much more tragic is their entrance into the illicit prescription drug market.

Terry Gerton: What is the implication of Sinaloa’s realignment on U.S. operations in the Caribbean right now on our counter drug operations?

Jake Braun: Well, I think that they’ve largely moved, they and the other cartels have largely moved a lot of their operations out of the Caribbean because it’s easier for them to smuggle things across the border via tunnels, drones and so on and so forth. There’s still some, don’t get me wrong, but most of what they’re doing is not in the Caribbean. That being said, they have really dramatically stepped up their efforts to try and get fentanyl into the country from any vantage point, including the Caribbean. I think that what’s critically important with stopping what they’re doing is to really focus specifically on fentanyl, because no administration, Democrat, Republican, Libertarian, Green Party, no administration will ever end criminality. That has been around since humans have existed. It’s not going to stop. But we could end fentanyl and I think if we were able to turn up the heat so high and really just put our boot on the throat of Sinaloa the way we did on al-Qaida and ISIS, they would stop selling fentanyl because they could sell all the other stuff they do, and we’d relegate this back to normal cops and robbers the way we have before with all the other illicit things they do like racketeering and prostitution and other drugs and so on, things far less deadly than fentanyl. But without a real direct focus on fentanyl, I don’t see a world in which kind of a broader approach is really going to end this one issue. And the idea that we’re going to end the Sinaloa cartel in general, them or rivals will come in and take their place later. But again, if we focus narrowly on fentanyl, I think we could end this epidemic in the United States. And there and there’s a moment for this right now. I think the president has shut down the border and or at least shut down illegal crossings. He fulfilled his top campaign promise basically already. And so we’re in a moment now where they really could turn their attention to specifically stopping this horrible epidemic that’s killing so many people.

Terry Gerton: That sounds like a policy recommendation.

Jake Braun: I guess it is.

The post A new book reveals how a covert US campaign targeted the Sinaloa cartel first appeared on Federal News Network.

© AP Photo/Mark Schiefelbein

A new forecast projects that defense spending will keep rising through 2035, while civilian agencies face years of flat or shrinking budgets, continued cuts and growing pressure to scale back. 

The Professional Services Council’s latest federal market forecast, compiled with input from more than 400 industry volunteers and subject-matter experts, predicts that in an environment where legislative logjam is likely to persist, defense spending will continue rising at roughly 2% annually after its first $1 trillion budget in fiscal 2026 — a one-time spike driven by reconciliation —  while cuts will “continue to fall disproportionately on civil agencies until elections change the balance of power.”

“What this means in practical terms is that the fiscal environment for the next decade will be tight, competitive, highly dependent on supplemental funding, reconciliation and prone to crisis-driven appropriations. Base budgets alone will struggle to drive new initiatives, especially on the non-defense side. In this environment, as one of our interviewees suggested, it’s best to keep your customers close and your congressional supporters and lobbyists closer,” Mike Riley, a volunteer for PSC’s Vision Federal Market Forecast told reporters last week.

In the defense space, PSC volunteers said their discussions with defense stakeholders revealed a shift, or “strategic realignment,” in the Pentagon’s priorities. While the Indo-Pacific Command remains of “elevated importance,” the Northern Command and Southern Command are gaining new emphasis as the department puts greater focus on homeland, border security and expands its presence in Latin America and the Caribbean. 

“This year was a bit of an interesting year for us. A lot of defense folks acknowledge the growing importance under this administration, but also a lot of consternation about the directions the administration might be going and just kind of the lack of clarity. There’s some continuing trends — deterring China, integrated deterrence, that pivot to the Pacific — that’s an ongoing thing that didn’t change from the previous administration. Of course, border security, the Department finds itself in an uncomfortable position,” Jason Dombrowski, a volunteer for PSC’s Vision Federal Market Forecast, said.

“They are getting a little bit more heavily involved in domestic politics than they would otherwise prefer to. Certainly, they always reiterated their intent to be responsive to the commander in chief. But historically, of course, the American military has tried to avoid a domestic role,” he added.

The department is also placing greater emphasis on the Golden Dome missile defense system, shipbuilding and munitions under this administration.

“I think everyone’s been paying attention to the news that there has been some very notable plus ups and focuses of this administration, most notably around shipbuilding, but also to include things like nuclear modernization, which in previous years we had highlighted as a potential toss up, but this year definitely moved into the winners category,” Dombrowski said.

Acquisition reform

The Defense Department also moves to implement Defense Secretary Pete Hegseth’s sweeping acquisition reforms, which emphasize greater competition, faster delivery and making commercial technology the default option. It’s unclear whether the department has the ability to implement those changes given deep personnel cuts across the contracting workforce.

“The contracting professionals — there seems to be a large reduction. How do we get this done? That fundamental capacity to get things done is really going to make a difference, whether you’re putting out contracts, supply chain, workforce throughput … It’s going to affect how we can actually help out the government. Adaptability is the name of the game,”Jim Kainz, a PSC volunteer, said.

In addition, the department’s new acquisition strategy promises to lower barriers to entry to encourage startups and non-traditional vendors to join the defense industrial base. Dombrowski said that while stakeholders are cautiously optimistic about the reforms, there is also a “healthy cynicism of saying, ‘How is this time any different?’” 

“This administration has made a big priority of trying to attract new people, and we looked at the pros and cons of it. It’s probably worth noting that, aside from a few very notable successes that we can all figure out, there hasn’t really been much movement in this regard,” Dombrowski said. 

“We’re very excited, certainly [Commercial Solutions Opening] and [Other Transaction Authority] and just a variety of things that should provide a lot of flexibility, but let’s see it,” he added.

Winner and losers

Dombrowski and Kainz said several areas emerged as clear “losers” in this year’s defense outlook, including the department’s buying power, which continues to erode as inflation and reshoring efforts drive up costs across programs.

Legacy systems and advisory and assistance services are facing cuts, and U.S. Africa Command and Central Command are being pushed lower on the priority list as resources shift toward European Command.

There is also uncertainty around operations and maintenance funding, which Dombrowski and Kainz said remains a major concern for both think tanks and potential customers. Sustainability initiatives appear to be split — the “green side of sustainability” will most certainly lose ground, while efforts tied to energy resilience may gain momentum. 

Contested logistics, once considered a toss-up, is gaining traction as a priority, and scalability — the ability to rapidly increase production in a crisis — is emerging as a clear winner across the department.

Overall, research and development spending is increasing, but only in areas related to advanced weapon systems, technologies, drones and energy. 

“However, there’s a belief and a growing expectation that the contracting community will bear more of those responsibilities,” Dombrowski said. “It’s really unclear where that line is going to be drawn between things that are really government exclusive where DoD is willing to pick up all costs associated to it. There are things we can all imagine, like fighter jets. But what about things that are more in the gray areas? Avionics, business process systems, back-office systems, things like that — definitely more of a sense that we are going to have to be developing those on our own.”

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FEATURED INTERVIEW — As the Pentagon undertakes its most ambitious overhaul yet of how it acquires new warfighting capabilities, Silicon Valley entrepreneurs are weighing in on whether the modernization effort can happen quickly enough to bring the U.S. up to speed with China in a time of rapid technological development.

When the overhaul was announced earlier this month, Secretary of War Pete Hegseth said the reforms aims to dramatically accelerate how the Department buys and fields new capabilities and that the changes are specifically aimed at cutting bureaucracy, rewarding rapid development, and pushing defense primes to invest more of their capital in new capabilities.

In the weeks since the announcement, the U.S. Army has shared details on how it will reform its service-level acquisition process. Part of the change involves consolidating the service’s program executive offices (PEOs), which are responsible for buying new weapons, into six new offices called “portfolio acquisition executives” (PAEs). Plans also include the creation of a new office to rapidly field and scale emerging technologies. Similar initiatives are in the works at the other services.

Measures like these have been championed by the private sector, which has traditionally on the cutting edge of innovative capabilities for decades. Cipher Brief COO & Executive Editor Brad Christian caught up with Entrepreneur and Stanford Professor Steve Blank, who recently published a Department of War Program Executive Office directory to help entrepreneurs better navigate the current complicated system for selling to government. Their conversation has been lightly edited for length and clarity.

THE INTERVIEW

Christian: Describe your initial reaction to the Pentagon's somewhat surprise announcement that it was overhauling its acquisition process.

Blank: It was mind blowing. It was mind blowing not because anything the Secretary said was new; these are things that people who are interested in acquisition reform have been asking for the last 10 years. But it was put in a single package and was clearly done by the infusion of people who have actually run large businesses and were used to all the language of organizations that already know how to deliver with speed and urgency.

The part that didn't get said, is essentially that the Department of War wants to adopt startup innovation techniques of lean iteration, pivots, incremental releases, good enough delivery, and that gets you what the Secretary asked for, which was speed of delivery. But all those are things that we've lived with in Silicon Valley for the last 50 years. And it wasn't until we had people who worked outside of buildings with no windows inside the Pentagon to understand that those techniques could actually be applied. And it required blowing up the existing system. And they did that spectacularly well. There are very few holes in these proposals.

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Christian: Obviously the Pentagon procurement system is a product of decades of bureaucracy and rules. Are you hopeful that you're going to be able to see the kind of change in the rapid timeline that they've laid forth here?

Blank: Number one, this is a pretty extensive reorganization. Right now, the Department of War is siloed between requirements and system centers for testing and prototyping and acquisition, which was the acquisition with a small A with the PEOs and program managers, and then it went to contracts and then it went to sustainment, et cetera.

Those were silos. Now we're putting it all underneath a single portfolio acquisition executive. So, instead of making their offices 10,000 people, it's actually a matrix organization, much like a combatant command is. Most of those people will stay in their existing organizations but now be tasked to work on specific portfolios. And the portfolios will no longer be arranged by weapons system. They're going to be arranged, for example, by war fighting concepts or technology concepts, et cetera.

That said, boy are they trying moving an elephant and make it dance. And at the same time, they recognized - this was one of the genius parts - that people won't just get a memo and know what to do. Historically, they've depended on the Defense Acquisition University, which taught contracting officers and the rest, how to work with the 5,000 pages of the DFAR and FAR, Federal Acquisition, Defense Acquisition Regulations. One of the unnoticed things was that they basically told the Defense Acquisition University, to stop teaching what they're teaching today, recognizing that they need to teach people this new methodology. That's not going to happen by telepathy.

First of all, we need to train the trainers, then we need to train all the people who've grown up in their career following the paperwork. I predict six months or a year of chaos and confusion. And there are always saboteurs in a large-scale reorganization who are angry that their cheese has been moved or worse, their authority has been diminished or their head count went somewhere else. This is going to be no different except maybe at a bigger scale.

In the end, if we pull this off (and I'll explain the only possible reason not to do this) the country will be much better for it.

The other obstacle will be if you're on the board of directors and the executive staff of a prime, you're going to go through the 12 stages of denial and grief and whatever because I don't know how many times both Deputy Secretary of Defense Steve Feinberg and Secretary Hegseth made it clear that the primes weren't delivering and they weren't investing in the things the country needed and they got used to the system and we were kind of mutually dependent on a broken system - and that's over. Well, you're not going to let your stockholders say you just went home and packed up. Obviously, it's pretty clear that appealing to the Pentagon isn't going to work, but Congress is “coin operated”. This is now going to be a race of lobbying cash from the primes versus lobbying cash for the first time from private equity and venture capital. So it's going to be, who has the biggest pile of cash to influence Congress and the executive branch to keep these rules in place or modify them?

Remember what a disaster this is if you're an existing large company selling to the DoD. It says number one, we're going to buy commercial off the shelf. Number two, we're going to buy commercial off the shelf and then modify it. If and only if either one and two work, we will do some bespoke contracting with the existing organization. It's never happened before. Pretty clear, pretty direct. So, the easy thing would be for primes to change their business model. But my prediction is they're going to double and triple down on the amount of lobbying and dollars spent.

Christian: In addition to the lobbying are we going to see consolidation? A major prime, like you said, isn't going to just pack up their bags and go home. Are they just going to start scooping up all of the small commercial providers?

Blank: In the space segment, they were already doing that. And in fact, were told to kind of stand down and that these things needed to flourish. You have to remember that primes and corporations are companies. Their number one priority, at least in their heads, is no longer national interests, it's the shareholders and returns and revenues and profits. That's the nature of capitalism. The problem here is that the Department of War said, 'Well, that's nice, but we're not getting what we need out of that. Send a note to your shareholders that life's about to change'. That's going to create a lot of conflict - with a lot of money involved - in trying to bend the rules back.

And just as an aside, the primes aren't useless. You don't want them to go out of business. No startup is building an aircraft carrier or a joint strike fighter. We can make the argument of whether we should anymore, but that's secondary. That level of complexity and skill set is just not built yet. Maybe the Andurils and others will get there in another five years, but they're not there yet. And so, waving a wand and making the primes go away completely is equally inane as saying we could depend on startups for everything that the Department of War needs.

But the balance of power, at least as the secretary and deputy believe, is that we need to be building things faster and delivering them faster and on time. And we're going to look for alternate sources. That's just a mind blower. So, as I said, I see six months to a year of confusion as this reorganization happens and people come and go as they establish who's in charge, what the rules are, et cetera.

The only good thing about making this happen is in a normal administration, the administration would wait for Congress's approval. I've not seen that happen in many of these cases with this administration. And in this case, it might actually be good for the country. Time will tell.

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Christian: You referenced decades of Silicon Valley's experience with iterating and moving quickly. One of the threats and one of the actual challenges that a country like China poses to America is they have a top-down autocratic government that doesn't change every four years. That presents a unique challenge to the Pentagon that Silicon Valley doesn't know, or the private sector doesn't necessarily have. How much of a risk is there for the next administration to come in and potentially change everything? And then, if you're one of those big primes, are you baking that into your long-term planning that this might shift in a measurable way in the future? Or do you think these changes are going to be something that is so overwhelmingly positive that future administrations have to stick with it?

Blank: Well, if you were asking me this three years ago, I would have said you should get all this done now because it's going to be flipped back in three years. What's different now though, is the amount of capital available for startups, scale-ups, and private equity firms that can match or overpower the lobbying efforts of the primes. So as I said, both the executive branch and Congress are coin operated, even more so now than ever. And for the first time ever, the insurgents have as much or more coin than the incumbents. That's what's going to change this game.

So yes, a Democratic administration or another Republican one might have a different opinion. But in this case, we're talking about piles of money flooding the streets of Washington D.C. to try to change the game. Think about who is now sitting in the cabinet and in other places where we're seeing people with commercial experience for the first time ever at scale, inside the executive branch for sure and inside the Department of War which changes the nature of the conversation and as we're seeing - the types of things they're recommending. It wasn't that people didn't recognize this before. It was kind of hard to explain this to people who had never run a business or who have been career successful. I've said for years, we had world class organizations, world class people for a world that no longer existed.

Finally, we have people who understand what that world should be like because they've been operating in it. Secretary Feinberg has been writing checks for tens of billions of dollars- buying aircraft carriers, okay, he’s written those kinds of checks before. Tell me who else has ever been in that position.

Again, it's not that the DOW should run like a corporation or a startup, but having that experience sets a bar for what you know is possible for doing extraordinary things. It's what this country knew how to do in World War II and during the Cold War, and we just kind of lost it when Robert McNamara, ex-chief financial officer of Ford, put in the first version of the Planning, Programming, Budgeting and Execution System (PPBE) in 1962. We've been operating on that system for 63 years, or some variance of it.

Basically, he imposed a chief financial officer's strategy on budgeting and planning, which made sense at the time. It stopped making sense about 15 years ago, but no one inside the building knew what to do differently. That's changed.

There was also one set of announcements that kind of flew under the radar, and that was that the policy organization in the DOW lost three organizations to acquisition and sustainment (A&S). I think Elbridge Colby runs that group and it went to A&S. So all the foreign military sales and all the policy stuff kind of disappeared overnight. I don't know what the talking points will be, but the optics aren't great for policy. That's number one.

The second thing that got buried in the memo and I'm not sure it was in the speech, but this new Economic Defense Unit (EDU) I think has taken over the office of strategic capital. And I think that's good given what the agenda is, which is that we're essentially using the whole of nation approach to decouple from China and not only invest in critical minerals but in the other parts of the ecosystem that we need as well, everything from batteries to drone motors to whatever. So we can operate independently. Scaling that unit up was strategically as important.

This was an acquisition announcement, but watching all these other moves are really smart chess pieces at scale, not just nibbling around the edges, but at scale. And I think paying attention to the other moves that are being made inside the DOW, you'll at least understand the master chess game that they're at least trying to implement. It's pretty smart.

Christian: You've done incredible work recently with helping people understand and navigate his environment in ways that perhaps were difficult for people to understand before. What are you going to be looking for next and what are you potentially going to be working on as a result of these changes?

Blank: I think you're referring to the PEO directory that I wrote, which is about 300 pages long. It’s the first phone book for the Department of War with a 30 page preamble of go-to-market strategies. I literally have started rewriting it and it's now going to be called the Portfolio Acquisition Executive Handbook and now it's going to explain how PAEs work and what the silos looked like before and how each service is reorganizing.

For example, the Army likely will condense 12 PEOs into six portfolios and make major shifts, this month or certainly by the end of the year. And the other services will follow. I think the Army is a little ahead of everybody else. But having a phone book to actually explain who's who and what they're supposed to be doing.

As I said, it will be six months to a year of chaos and I think having some kind of handbook that at least shows you where things are heading and who are the new people to call on would be helpful. So that's what the Stanford Gordian Knot Center for National Security Innovation is doing.

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As the Defense Department moves to implement Defense Secretary Pete Hegseth’s sweeping acquisition reforms, Space Force leaders warn that the depth of workforce cuts is threatening to cripple the service’s ability to execute them.

“You have to have a strong, vibrant workforce to do the work and we’re in a really interesting time and a troubling time. There is a strong, motivated force but there have been an incredible amount of pressures on them this past year,” Maj. Gen. Stephen Purdy, acting assistant secretary for space acquisition and integration at the Department of the Air Force, said Nov. 20 during a Center for Strategic and International Studies event. 

“We have a looming increase in acquisitions coming down the pike, and so that presents us with a really difficult situation of where we need to double down on our acquisition workforce, our acquisition training. We are in a situation where we barely have enough acquirers to do all of the work that we have now,” he added.

Purdy said the service has spent the last few years implementing the acquisition tenets set by Frank Calvelli, who stepped down as assistant secretary of the Air Force for space acquisition and integration in January. Calvelli pushed the service to “build smaller satellites and smaller ground systems and minimize non-recurring engineering or new design.” He also preferred to use fixed-price contracts when possible. Calvelli’s “tenets” were a back-to-basics formula meant to fix chronic problems in space programs.

“We’ve built upon that this last year. We haven’t let grass grow under our feet as we’ve kind of taken over in January. And we’ve built upon that foundation and moved on out and really done a lot this year that kind of foreshadowed [Hegseth’s] acquisition reforms. But the workforce question is really the key piece,” Purdy said.

The Trump administration push to reduce the size of the federal workforce through initiatives such as the deferred resignation program and voluntary early retirement has had an “outsized impact” on the Space Force. In May, Chief of Space Operations Gen. Chance Saltzman told Congress the service had lost nearly 14% of its civilian workforce — much of it coming from Space Systems Command, the Space Force’s acquisition hub.

“I’m worried about replacing that level of expertise in the near term as we try to resolve it and make sure we have a good workforce doing that acquisition,” Saltzman told the Senate Armed Services Committee at the time. 

When asked about the acquisition workforce, Saltzman told reporters that these workforce reduction efforts have taken civilian experts “out of play,” leaving gaps in the institutional knowledge and technical skills.

As the Space Force begins implementing Defense Secretary Pete Hegseth’s acquisition overhaul, which calls for using commercial technology as the default option, great competition and faster delivery, Purdy warned the service may not have the workforce needed to shift to the new way of doing business. 

“If you look at [Hegseth’s] acquisition reforms that he’s laid out, a bunch of great initiatives and things we need to get after. But … you need the numbers of people, and you need the quality to understand. If you say ‘go commercial,’ and if you say, go after ‘new manufacturing mechanisms’ and take advantage of all of the new space companies that are out there, you need a larger number of people just to even track that activity. You need to be able to understand all that’s going on. You need to understand the incentive structure,” Purdy said.

The strain is particularly acute in contracting since the service simply doesn’t have enough contracting officers to handle a much larger workload created by recent acquisition reforms.

“In the past, if we had an acquisition program and we would go 20 years and it would be with one prime, we would maybe have one or two contracts, an R&D contract and a production contract. Pretty simple. One prime, a couple contracts. Now, with some of our programs there’ll be a five-year program, but we’ll probably have 20 contracts because I’m dealing with 10 or 15 different contractors in industry, which is literally what acquisition reform is telling us to do,” Purdy said.

“We have a serious issue here at a federal level on contracting and it’s just the numbers of folks. We do not have the numbers of contractors that we need at a federal level. Every federal agency has problems, and so we do not have the right numbers that we need,” he added.

Saltzman said the service is trying to ease the strain by requesting waivers to the hiring freeze that has been in place since the start of the Trump administration, as well as hiring authorities to fill essential acquisition and contracting roles.

The service also recently launched its first acquisition training course.

Kay Sears, vice president and general manager of space, intelligence and weapon systems development at Boeing, said that while the Space Force acquisition community is more open and collaborative than ever, it is also apparent that the service’s workforce is stretched thin.

“You can tell that they’re stressed. You can tell that they’re overworked. And then when you get into that contracting element that’s really where I see the slowdown, the, ‘Hey, I’ve only got one playbook — I’m going to go follow the playbook,’ and we really start to lose sight of the mission objective,” Sears said.

Acquisition experts have said that while the proposed acquisition changes could meaningfully reshape how the Pentagon buys capabilities, the success of Hegseth’s reforms will hinge on whether the department can equip the workforce with the skills needed to operate differently. 

“Scores of case studies have shown, there has to also be an aggressive, intentional and holistic approach to change management, prominently including how the relevant workforces are developed. Absent re-aligning those processes, real change will remain elusive,” Stan Soloway, president and CEO of Celero Strategies and federal acquisition expert, told Federal News Network.

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Nearly two weeks after the record-long government shutdown ended, some Defense Department civilian employees say they have yet to receive the back pay they are owed. 

The federal government reopened on Nov. 13 after President Donald Trump signed a bill to fund the government through Jan. 30, ending the 43-day shutdown and allowing tens of thousands of DoD civilians to return to work.

At the time, the Office of Personnel Management said that checks for DoD civilians were slated to go out on Nov. 16. DoD civilians, however, were told to expect payment sometime between Nov. 17 and Nov. 20. 

But with Thanksgiving week now underway, many workers say they are still waiting for as much as four weeks of back pay.

One civilian employee at Laughlin Air Force Base in Texas, who was furloughed during the shutdown, told Federal News Network that more than 150 people in their unit of more than 400 civilians have not been paid.

“When everybody got back to work, we were told that the next week — or mid-week — we would get paid. And a lot of people did get paid, but a lot of us have not. They keep saying, ‘It’s going to take a few days,’” he said Wednesday. 

The Air Force employee said there has been no official guidance or clear communication, but their supervisor told them Wednesday to expect back pay on Nov. 29.

“There’s nothing in writing,” the employee said. “It’s all the leadership just walking around telling us, ‘Expect to get paid.’ There’s no email traffic — it’s just their own interpretation of when they think we’re going to get paid. But there’s been nothing official sent out.”

A DoD spokesperson told Federal News Network that all civilians whose updated time and attendance have been received have been paid.

“It is essential that civilian employees review their time and attendance reports, and their Leave and Earnings Statements (LES) for accuracy. Civilians with questions or civilian pay issues should contact their local Agency Customer Service Representative (CSR) or immediate supervisor. [The Defense Finance and Accounting Service] will continue to work with the military components to resolve any remaining payment issues,” the spokesperson said.

Another Air Force civilian in San Antonio, who worked through the shutdown, said many civilians in their unit of police officers are still waiting for back pay. 

“Nobody in leadership has put out any message other than when I inquired with my person who handles the payroll. She just said we should be getting paid on the 23rd or 24th, but that didn’t happen. Now, we are going into past Thanksgiving, who knows when it’s going to be,” the Air Force civilian told Federal News Network on Wednesday. 

He said he has been trying for weeks to get answers for himself and the employees he supervises. When he asked his own supervisor for help, he was told to consider filing a congressional complaint.

“That’s just laughable to me because we have a GS-13, we have a commander and active-duty commander. There’s a whole bunch of people between me and my congressman that could probably provide answers. But going to your supervisor hasn’t worked,” the Air Force employee said.

“I don’t understand why they can’t just put out a simple explanation, because communication really helps, whether it’s good or bad, but at least they could explain why or what the problem is, but they haven’t. It’s frustrating,” he added.

The bill that Congress passed to reopen the government reaffirmed that both furloughed and excepted federal employees would receive back pay. The Office of Personnel Management official guidance stated the agency “is committed to ensuring that retroactive pay is provided as soon as possible,” and that the retroactive pay for excepted employees “must be provided at the earliest date possible after the lapse ends.”

A defense official told Federal News Network last week that “DFAS is running continuous pay cycles to expeditiously pay civilians a one-time retroactive lump sum payment for pay periods missed during the government shutdown. Civilians and service members who have questions regarding their pay may contact their local finance office or chain of command.” 

The Department of the Air Force did not respond to questions about how many Air Force civilian employees are impacted, the cause of the delay or when civilians should expect back pay.

With pay stalled for weeks, many federal workers were forced to dip into savings, rely on credit cards, seek out no-interest loans or take on part-time work to make ends meet. Military families have been turning up at food banks in greater numbers — the Armed Services YMCA, for example, reported a 30% to 75% spike in demand at its food pantries near military installations since the shutdown began. 

“I’ve joked with my family and my kids that if I don’t get back pay, we might have to push Christmas til maybe January, but the impending loom of another shutdown at the end of January, it can’t get worse,” the Air Force employee from Laughlin Air Force Base said.

Defense Department civilians aren’t the only ones still waiting for their back pay. 

“Smithsonian still has not managed to get us paid. They are wasting time making sure everyone has the correct time codes rather than getting people paid. It’s more important to them that they take a couple weeks to record we were furloughed. Can’t pay the mortgage, but at least they’ll have the correct time code,” a federal employee told Federal News Network on Nov. 22.

At the Federal Aviation Administration, one air traffic control employee reported receiving only partial back pay through the end of November. 

Meanwhile, federal workers who have received back pay told Federal News Network they cannot verify whether the pay was accurate as they have not received an accompanying Leave and Earnings Statement.

“Not sure if it is accurate, as no LES are being created for the back pay,” one federal employee said.

“Without a LES, I have no idea. I just hope it’s right. It feels like it might be right, but I don’t know,” another employee told Federal News Network. 

Others reported major errors — an employee who received their back pay said it was “taxed so incorrectly that my first paycheck after returning was missing about $500 and only one of two missed health insurance payments were taken out.”

If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747.

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D.C. National Guard members and their families lined up for free Thanksgiving meals at the D.C. Armory last week during an annual event hosted by Operation Homefront, a nonprofit that supports the military community. 

As part of their Holiday Meals for Military program, the organization provided families with all the fixings for a traditional Thanksgiving dinner — stuffing, cranberry sauce, mashed potatoes, pumpkin pie and more. Operation Homefront also distributed Harris Teeter gift cards so families could purchase their protein of choice, whether it’s turkey, ham or chicken. In total, the organization distributed 400 meal kits and grocery gift cards to pre-registered service members and military families. 

With grocery prices rising and many service members still feeling the financial strain of the recent shutdown, the organization says demand for assistance has surged — food requests alone are up 57% this year.

“Our case work is up — quadruple — what it was 30 days ago. Undoubtedly, the economic times are difficult for everyone in our country, I think that’s greater with the military,” Vivian Dietrich, Operation Homefront senior director, told Federal News Network. 

Operation Homefront, founded in 2002, serves military families nationwide by providing financial, emotional and social support through programs designed to keep households “strong, stable and secure,” Dietrich said. Financial assistance, however, is the backbone of the organization’s work, helping lower-ranking service members cover urgent expenses such as car repairs, rent and utility bills before these short-term problems spiral into long-term financial crises.

Through its Critical Financial Assistance program, Operation Homefront offers grants — not loans — and pays vendors on behalf of families. Caseworkers also review a family’s full financial situation to ensure they address the root of the problem.

“When we do our case work, often it’s somebody calling at the nth hour because the military is very proud. And generally, when they call, you’re at the point that you’re desperate, you need support, and our case workers are highly trained social workers. They spend time studying their finances. We work with them on how to manage their money and help them move forward,” Dietrich said. 

But food remains the organization’s top request for assistance, Dietrich said. 

Surveys conducted by organizations like Blue Star Families consistently find that food insecurity among active-duty families remains higher than the national average.

A number of factors contribute to military families’ financial vulnerability. Service members move dozens of times throughout their career, making it difficult for their spouses to find and maintain employment. Despite years of advocacy and policy efforts, the unemployment rate for active-duty military spouses has held stubbornly at around 22% for quite some time.  

Service members also face significant upfront costs when moving to a new base — military families spend an average of about $8,000 out of pocket during each move, which causes them to dip into their savings or accrue credit card debt.

During the recent government shutdown, military families were turning up at food banks in greater numbers — the Armed Services YMCA, for example, reported a 30% to 75% spike in demand at its food pantries near military installations. 

“Number one request for us is food — that has quadrupled right out of the top. But generally, it’s food, rent, maybe car payments, utilities — the day-to-day expenses that we all have. But it isn’t uncommon that there was some type of crisis that occurred that caused them to fall behind. A car would break down, or someone is sick and they had to miss work and they didn’t have pay. Or in the military, you can be deployed. You can be out on a training mission. And then if you have children, where’s the childcare?” Dietrich said.

“In general, it’s the basic expenses that we all live with, and if you don’t catch it at the very beginning, it really does become a crisis, and a crisis that can last for years. And our goal is to stay focused, get them strong, secure and stable,” she added.

Operation Homefront provides holiday meals for military families throughout the year, not just at Thanksgiving. 

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© U.S. Army National Guard photo by Sgt. Angelina Tran

Nearly every service member living in privatized military housing has experienced at least one serious issue in their home — and an overwhelming number say their family’s health has been negatively impacted by their housing conditions. Nearly half said a medical provider had confirmed the connection, a new survey found. 

The Change the Air Foundation recently conducted the Safe Military Housing Survey — one of the most comprehensive efforts yet to collect data the Defense Department has never been able to track accurately. The survey  was designed to answer questions previous studies had overlooked and to provide Congress and the Pentagon with better data on what families across all branches and ranks are actually experiencing in military housing. 

“We were hearing a lot of how many indoor air quality hazards and just housing hazards that these families were experiencing. But nobody was really ever asking, how is this affecting your physical health? How is this affecting your cognitive abilities? How is this affecting your mental and emotional health, and your and your personal finances? That’s a huge component of this survey,” Brandon Chappo, co-founder and director of public policy at the Change the Air Foundation, told Federal News Network. 

Erica Thompson, a military spouse and the military families’ liaison for the Change the Air Foundation, lived in military housing for 10 months at Maxwell Air Force Base located in Montgomery, Alabama. Thompson said her family immediately noticed serious issues with the house, including a failing AC system they were told couldn’t be replaced. Once contractors opened the walls without any containment, the entire family — including their dog — began experiencing a cascade of medical issues. Her son started passing out in the house and the dog started having seizures; three of their children were later diagnosed with asthma and one was diagnosed with bilateral pediatric cataracts in both eyes. 

“We saw a huge range of health implications across the board, throughout our whole family. And so I think using part of that, it was able to guide us through this questionnaire, some of those things that I wish offices knew. It was able to really give me insight into making some of these questions, because we would share our story with congressional offices, they would say, ‘How many more kids are there like yours?’ And I said, ‘I don’t know. There’s no data around that right now,’” Thompson told Federal News Network.

For decades, service members and their families living in privatized military housing have been exposed to hazardous conditions, including black mold, contaminated water, asbestos in ceilings and lead in walls. The survey found that mold, mildew or microbial growth were the most common issues, reported by 74% of respondents. More than half of respondents cited significant problems with temperature and humidity, pest infestations, water damage and HVAC failures.

“Mold and water damage can be extraordinarily hazardous to somebody’s health. That’s extremely dismaying,” Chappo said.

Overall, 76% of service members said their health has been negatively affected by housing conditions, and nearly half said a physician had confirmed their homes were making them sick. 

The survey also revealed an alarming statistic — 47% of service members said their housing issues impacted their ability to perform their duties or maintain mission readiness. The problem was particularly prevalent among those stationed in Florida. 

Three in five service members reported experiencing mental health challenges such as anxiety or depression, and roughly two in five service members said those issues affected their ability to attend work or training. One in six service members had to relocate — sometimes temporarily, sometimes permanently — often leaving behind personal items that had been damaged. 

“That is absolutely stunning. And so, if anything, it underscores the importance of trying to get these issues dealt with. It’s the fact that not only are our service members’ health and wellness being affected, it’s mission readiness. This is a national security issue, and we need to start talking about it in that light, and start really framing it in that way,” Chappo said. 

While anxiety, depression, mood changes, cognitive issues, insomnia, headaches, migraines, brain fog and skin, eye and respiratory irritation top the list of reported health problems, the survey found the health impacts to be far more extensive than that.

“This is extraordinary. These [medical conditions] weren’t just in the low percentages. We’re talking in the 20, 30, 40 percentages for some of these. Even those alone, being as high as they are, really should catch the attention of, hopefully, the country, and of course, those in Congress,” Chappo said. 

The survey found that Florida, Hawaii and Texas experienced housing-related issues at far greater rates and saw significantly higher rates of both health impacts and readiness concerns. Nearly 60% of service members stationed in Florida said housing issues impacted their ability to perform their duties. Health impacts were also higher than average — 84% of Florida service members said their families’ health had been impacted by house-related issues, compared with 83% in Hawaii and North Carolina. 

“I think it’s got to do with lots of these states are on federal land, and they don’t have to follow the state regulations for building and code, and so that’s something that needs to be looked at. But Florida, Hawaii and Texas were exponentially higher on those stats for both readiness and really across the board. And those have some really big commands in those states as well that need to have some attention drawn to it,” Thompson said. 

Marines reported the highest rates across all branches, with 85% saying their families were affected.

“We were displaced multiple times, with one displacement over 30 days. Relocation to a new home was requested, but we were denied a new home. We ultimately moved into a hotel on our dime after getting rid of everything we owned,” an active Marine service member in North Carolina told the Change the Air Foundation. 

Gaps in current dispute resolution process

Whenever a housing-related issue arises, service members are supposed to follow a three-step tenant resolution process that includes built-in escalation steps.

The first step is to file a service call. If the issue isn’t resolved to the service member’s satisfaction, it can be escalated to the Military Housing Office or the government housing office on base, along with the service member’s chain of command to help elevate the issues. Thompson said that’s where most families drop out of the process.

The survey found that nine in ten service members always reported the issues they were experiencing, but only 7% made it all the way through the tenant resolution process — and of those, 72% said it still did not resolve their problem.

One in 14 service members were denied the tenant resolution process altogether.

“I want people to try to understand this, nine of 10 service members reported issues as they should to the proper authorities. Nine of 10 had to report the same issue multiple times. 66% of those had their issues marked resolved without a satisfactory result and over 50% of those went unresolved entirely. We have a situation here where the families are asking, calling, screaming for help. They’re upholding their end of the bargain, and the other side isn’t, and it’s failing,” Chappo said.

“Only 7% of service members actually made it through the entire dispute resolution process. That shows us that it’s broken. It’s failing. It’s not working,” he added.

In addition, the survey highlights major gaps in seven-year housing histories, with only 43% of service members receiving one — and most of those were incomplete.

“You’re able to turn down a house if you recognize or see something you’re not comfortable with. But if their service calls aren’t accurate, or it’s not reporting accurately, I think that screams to a bigger issue of what is going on? What’s the further issue? It’s not only for the service members, but it’s for DoD accountability,” Thompson said. 

Out-of-pocket cost of privatized housing

Roughly half of service members reported paying an average of $1,680 out of pocket for costs such as pest control, mold inspections, hotel stays and medical bills .

“If they’re paying for pest control out of pocket, that’s not something that’s reimbursable. Our dehumidifiers and air purifiers are not reimbursable. You just end up paying out of pocket to do what you can, to try and make what you have work. And then same with medical bills, if you’re seeking extra time or care outside of the military, that’s out of pocket as well,” Thompson said. 

Nearly all military family housing in the United States — about 99% — is owned and managed by private companies. These projects are built around 50-year ground leases and legal agreements that private partners use to secure financing and guarantee predictable revenue over decades, which limited the Defense Department’s ability to cancel or renegotiate agreements when housing conditions declined, creating oversight challenges that have persisted for decades.

Thompson, along with other advocates, have been advocating for several amendments to be included in the 2026 defense policy bill, including the proposed Healthy at Home on Base Act, which would require the Defense Department to study mold and its health effects in both military housing and barracks. Another amendment would direct the department to adopt uniform mold remediation standards across all barracks and family housing.

“We’re hearing a lot of congressional offices are starting to read the report, and they’re already asking for meetings to discuss these a little more closely, and then, of course, talk about some of the fixes and solutions. We’re having some feedback and some conversations with folks at the Pentagon who are kind of taking a closer look at this as well, and trying to come up with long term fixes, as opposed to band aid fixes,” Chappo said.

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Interview transcript

Terry Gerton There’s so many headlines coming out of Congress, I can’t even keep track, but let’s get to funding. Rumor has it that the NDAA is going to get a vote soon. What are you hearing?

Loren Duggan That’s what we’re hearing as well. This has been a target to do something by the end of the year. Both chambers passed versions and sent them to informal talks where they’re trying to come up with a compromise and the big four, the chairman and ranking members of the committees have been sitting down and hashing that out. We first need to see texts. They’ll come up an agreement and post this text. We’ll be pouring over it and seeing what it says. And they had hoped for votes in early December, once they all get back to town after Thanksgiving and get that through and onto President Trump, because it is a big bill every year. They always do it. No one wants to fail at doing it. And so we’re likely to see a compromise and some votes in December on that.

Terry Gerton Any surprising additions over the last few weeks?

Loren Duggan Well, I think the big thing that’s been introduced to the debate has been whether or not to preempt state AI regulation using language in this bill. That was something that had come up in the summer around the reconciliation or the one big, beautiful bill act where they had inserted it in the house, took it out in the Senate and it’s come back as an issue and would talk around maybe a draft executive order on AI policy or some sort of legislative language to address that. So that’s, been one of the things that’s come up. And you know, the bill like that always attracts everything from contracting policy to defense questions to war and peace and things like that. So, you know I think the compromise that comes out will have broad support among the folks who need to vote on it. So that might mean some things drop out of the conversation, but … until we see that language, we won’t know what makes the cut.

Terry Gerton Well, it’s good to hear that it’s moving forward on that end of the year timeline. Let’s move to appropriations bills. When we got the shutdown settlement, we got a small minibus of bills with full-year appropriations. But now they’re talking about some other combinations. What are you hearing and what’s the progress before January 30th?

Loren Duggan Right, so the continuing resolution that reopened the government had three of the bills for agriculture and FDA, legislative branch, and military construction and VA. So those are all set, but there’s still nine to go. And one of the questions is, how do you package them? What do you do? And which chambers vote on things next? So what we have been anticipating is a package in the Senate that would be the Senate bills, not necessarily a compromise, but at least to move the ball forward, package together four or five bills. I think the keys to that would be defense and then the labor HHS education bills, which are kind of like your guns and butter combination, plus some other bills that have come out of the appropriations committee. Likewise, the appropriators, the top ones in the House and the Senate sat down and tried to find their own path forward. You know, what talks can we have? Do we want to wait for the Senate? So there’s been some talk and some activity, but the January 30th deadline gives them a little bit of wiggle room. They may try to get something done. Before the end of the year, but obviously they don’t have to do another thing until January 30th.

Terry Gerton Let’s talk about that first bundle you mentioned, Defense, Labor, H[ousing], and Education. The Trump administration has been announcing its dismemberment of the Education Department, not its disestablishment, but its dismemberment. If they pass an appropriations bill that treats the department like it always was, how do you put Humpty Dumpty back together again in those circumstances?

Loren Duggan I mean, this sort of goes back to the executive action on a lot of different things where Congress had asked — I mean let’s go back to the beginning of this year where USAID was a fully funded agency and was slowly phased out and some of its responsibilities diffused elsewhere. So, you know, the education department, as you mentioned, they took some steps last week, announced some, you know, spidering out of its duties across the government as they’d like to see. Congress would probably have to pass a bill to completely disestablish the department, but we’ll see what they say in these bills. I mean, they’ve written, to my knowledge, the education portion of that Labor-HHS-Education bill is as though the department was what it was when they approved that bill. So, you know, Congress may push back on a complete dismemberment of the department, but that’s part of the kind of ongoing dynamic here that we’ve seen all year.

Terry Gerton I’m speaking with Loren Duggan, he’s deputy news director at Bloomberg Government. Loren, a couple other things I want to take up with you. One, discharge petitions seem to be having a moment in the house. Talk to us about why that is happening and what it means in terms of regular order.

Loren Duggan So discharge petitions matter most when there’s a really narrow majority. And you know, there’s the majority party and the majority of a day. And the majority of a day means you get 218 to sign onto one of these petitions and you can pull forward legislation, even if leaders don’t want. And to your point, we’ve seen that a couple of times this year. We saw it on proxy voting for parents. We saw it on most recently — we saw it on the Epstein case, obviously, which was one that had dragged out for a while. And then Jared Golden, a Maine Democrat, got it on a labor-related bill, and he attracted enough Republican support. And that’s what it means here. There are a lot of Democrats, but you need at least a few Republicans. They cross over. You can control the floor or at least push your bill forward. Historically, this existed because the speaker had an iron grip on the House agenda and members banded together and created this process. There is some talk now, some pushback. Do we need to change this process, make it harder? And we’ll see if there’s any traction for that, but as long as the majority is as narrow as it is, and you get enough members to band with you, you can kind of control the agenda for a brief period of time.

Terry Gerton Well, it does at least seem to be moving some things forward.

Loren Duggan It definitely is moving things around. I mean, the Epstein vote had been wanted by people for a long time and then they finally got it. And what was even more interesting there is you went from like a bare majority signing onto the discharge petition to all but one of those who voted voting yes in the end. So, you know, the dynamics there are really interesting.

Terry Gerton So there’s one more topic that I want to take up with you, and it bundles several recent headlines together. We had a federal judge who ruled that Trump’s deployment of the National Guard in the District of Columbia was illegal. We had some members of both houses of Congress create a video talking about why the military doesn’t need to obey illegal orders, and a response from the White House on that. And then we’ve got Ukraine and Venezuelan operations that continue to circulate. I don’t want to dig into any of those specifically, but collectively, Congress has a responsibility here when it comes to military operations and deployment. Do all of these things perhaps portend a more active engagement from either the Senate or the House on these issues of military operations?

Loren Duggan I mean, we’ve seen some of that, obviously there’s pushback a lot of times from Democrats on what this administration is doing, but there is Republican pushback as well. We’ve seen that on some of the foreign policy questions, whether it’s terrorists or, attacking Venezuela, preventing an attack on land in Venezuela, dealing with the boats. So Congress is asserting itself in some places, but, you know, controlling the hearings right now, that’s all Republicans. And if they want to avoid a hearing that would perhaps raise some of these questions. But at the same time, if you get a a nominee for a defense job in front of some senators, they may ask some tough questions and likewise in the house. So I think we’ll see some discussions, some pushback on some of these things. The defense debate that we’ve talked about having both on the spending side and the authorization side, there could be discussion around all those topics in there as well. So, you know, we see Congress asserting itself in different ways and outside of Congress too, using social media channels, using the media to get their message across or try to push back on what they don’t like.

Terry Gerton So what are you anticipating will be at the top of the agenda when Congress gets back after the Thanksgiving holiday?

Loren Duggan One thing that’s going to surge back is this ACA enhanced premium tax credit issue, how to prevent increases in what people are paying for their health insurance under Obamacare. Going into the recess, there was no consensus. They’re going to try to push for it. Senators agree to vote by the end of the year on something. We’ll be looking to see what that something ends up being. But that’s really driving a lot of the discussion on and off the floor right now.

Terry Gerton I’m speaking with Loren Duggan, deputy news director at Bloomberg Government. Loren, thanks as always. Thank you. We’ll post this interview at federalnewsnetwork.com slash federal drive. Here at the federal drive on your schedule, subscribe wherever you get your podcasts.

The post What’s happening with the 2026 appropriations bills? first appeared on Federal News Network.

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Two lawmakers want to fully exempt military compensation from federal income tax — a move that would deliver a significant pay boost for service members and mark one of the most sweeping tax changes for the military community.

The legislation, dubbed the Service Members Tax Relief Act, seeks to eliminate federal income tax on all active-duty and reserve pay, including enlistment, retention and education bonuses and all special and incentive pays.

The measure would go well beyond previous tax-exemption proposals, which largely focus on bonuses or specialty pays.

In May, for example, a bipartisan group of lawmakers introduced the BONUS act, which would amend a section of the Internal Revenue Code of 1986 to explicitly exempt all military bonuses from federal income tax.

“The bill builds on existing tax exclusions for certain military benefits and responds to long-standing concerns raised by troops, families and advocates who believe those who serve should not be taxed on the bonuses they earn in service to our country,” Rep. Jen Kiggans (R-Va.), the sponsor of the BONUS act, said at the time.

Similarly, the No Tax on Bonuses Act, introduced in April, seeks to exclude service members’ enlistment and reenlistment bonuses from gross income.

Currently, service members deployed to combat zones receive tax-free income. In addition, most allowances that make up a significant portion of a service member’s total compensation, including basic allowance for housing and basic allowance for subsistence are tax-exempt.  Veterans’ disability compensation is also exempt from federal income taxes. Together, these exemptions amount to roughly $30 billion a year in foregone federal income tax revenue each year. 

Sen. Pete Ricketts (R-Neb.) and Rep. Abe Hamadeh (R-Ariz.), who introduced the Service Members Tax Relief act this week, are also sponsoring the Tax Cuts for Veterans Act of 2025, a measure that would amend Section 122 of the Internal Revenue Code to exclude all military retirement pay and veterans’ benefits from federal income taxes. This includes all retired and retainer pay under Titles 10 and 14, as well as all VA monthly benefits, including disability compensation and survivor payments covered under Titles 37 and 38. 

The two measures stand apart from prior proposals, as no recent bill has attempted a tax exemption of this scope.

“It is pretty sweeping… and it’s potentially a very expensive proposal. Now, there’s a reason why Congress has, on a bipartisan basis, provided these existing tax exclusions for military and veterans benefits — there’s a wide bipartisan appreciation for the fact that if you served our country, put your life and put your body on the line — you’re receiving benefits that you deserve for that service…I think any proposal that costs tens of billions of dollars per year, Congress is going to scrutinize,” Andrew Lautz, director of tax policy at the Bipartisan Policy Center, told Federal News Network.

It is unclear what strategy the sponsors plan to pursue — standalone bills often face political hurdles, and lawmakers frequently try to attach such proposals to larger legislative packages like the annual National Defense Authorization Act to increase their chances. 

“These bills are fiscally conservative in that they offer relief through the tax code instead of new spending. It is a win-win; the exemption instantly improves take-home pay, while helping with recruitment and retention, which in turn keeps our war fighters strong,” Hamadeh said.

Lautz pushed back on the idea that the bills are “fiscally conservative,” arguing that a dollar of a tax cut that isn’t offset adds to the deficit just as much as a dollar of new spending that isn’t paid for.

“If you’ve got $100 billion spending program or the $100 billion tax cut, and you’re not paying for that — that is not fiscally responsible. Now, Republican lawmakers have shown a preference for cutting taxes over increasing government spending, and Democrats vice versa, that is an unmistakable trend. But in terms of the fiscally responsible approach here, I think the message we’ve sent to both parties is that if you’re going to have a large tax cut or you’re going to have a large spending increase, you should pay for it with offsetting either spending cuts or tax increases,” Lautz said.

While the proposal would eliminate federal income taxes on military pay, active-duty and reserve personnel would still be paying payroll taxes on their income.

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Interview transcript

Terry Gerton Mr. Buzzett, let me start with you. Tell us a little bit about the National Armaments Consortium. What is it, how does it work with the Department of Defense?

Joe Buzzett Yeah, so the National Armaments Consortium is a group of engineers, designers, scientists and manufacturers from across the defense industry, really focused on the armaments part of the portfolio. We’re one of the oldest, I think the oldest [Other Transaction Authority (OTA)]. We were started in the early 2000s. We came out of what was called the [Warheads and Energetics Technology Center (WETC)]. It was really focused originally out of Picatinny Arsenal on warheads and energetics. And since that time, it’s really grown over the last 25 years to include now missile systems, broader energetics, rocket motors — across the whole industry. But we’re really the nation’s armaments consortium. We’re a CMF-based consortium, OTA, and we really have a broad range of large and small businesses.

Terry Gerton And one of the things that you all do is help DoD stay current with technology and innovation, right?

Joe Buzzett That’s exactly right. That’s exact right. And you know, over 75% of our members are small, non-traditional businesses. Of course we have a large traditional business, the Raytheons and General Dynamics and Lockheed Martins, but what really gives us the innovation is being able to have that collaboration that we bring through our consortium where we can get a lot of the startups, a lot of the non-traditional businesses and get that developed into the warfighter in a very quick manner.

Terry Gerton And Mr. Harris, Mr. Buzzett has just talked about the range of companies in the NAC, but you also have 1,100 … Member organizations. With that broad of a scope, could you give us your assessment of the defense industrial base, especially from the armaments perspective? How are we doing there?

Ben Harris We’re doing better than we were 10 years ago, but we have still a long way to go. Right before I retired from the army, we were working on a 15-year modernization plan just for the ammunition industrial base. So we started that in 2016 and we finally have support from throughout the department and Congress. And you see that pendulum now shifting everywhere because it’s not just building ammunition. You also have to be able to have all the depots to do the ship overhauls and repairs. You need the depots to rebuild your helicopters and paladins, so there’s a huge investment that this country is gonna have to make to really reset that industrial base.

Terry Gerton Well, certainly at current events, the war in Ukraine has shed a lot of light on the ammunition industrial base. How has that changed the focus or maybe increased the urgency of these modernization plans?

Ben Harris Well, the focus always seems to focus to ammunition when there’s at least more than one conflict happening, because we typically cut back on ammunition. And there’s a reason for that. If you order too much ammunition, 40 years later you’re going to have a huge demilitarization problem where you’re gonna have to pay to destroy it. So there’s delicate balance there. The good news is the weapons systems that this country has innovated on are proving to be very successful overseas. There are a lot of foreign customers now that are all looking to buy U.S. Weapons systems. So that’ll be good for the industrial base. So if the U. S. Has to cut back on its purchases, there should be foreign orders that can come in and keep the capacity running so that those plants are operational and able to surge.

Terry Gerton Mr. Buzzett, did you want to add on to that?

Joe Buzzett Yeah, I also wanted to add the aspect that, you know, we’ve been working on next generation capabilities specifically for the Pacific. So, you now, one of the highlights of the programs that we did was the Prism missile, you know a missile that goes out 500 plus kilometers that was started in 2018 under the OTA and has just been fielded. So there’s a lot of things, innovative things that we’ve been able to do through the use of OTAs and through the flexible contracting that we get with OTA’s to do things quick, get them out to the field, and get them tested and fielded.

Terry Gerton Mr. Harris?

Ben Harris I’ll just add that two other OTAs that went through the NAC [were] the new hypersonic weapon system, Dark Eagle, and the new radar upgrades for the Patriots, the LTAMs. Those both were OTA’s through the NAC.

Terry Gerton I’m speaking with Ben Harris. He’s the executive director of the National Armaments Consortium. Joe Buzzett is NAC’s executive committee chair. Mr. Harris, let me come back to you. You mentioned foreign demand for US armaments, as well as domestic. Talk to us about the biggest challenges that the industry is facing in terms of capacity, technology, innovation, supply chain.

Ben Harris Well, it’s time and money, first off. You know, they want it now. Factories don’t build themselves overnight. Everybody knows that. But … I see significant funding being added to increase that since 2022. There was a lot of congressional supplemental dollars that were added to expand our capacity. And now that we also see — we support the Navy at Indian Head. They actually now have funding where we see the beginnings of a rebuilding of the Indian Head facility there.

Terry Gerton So Mr. Buzett, let me come to you. You’ve just added five new industry veterans to your executive committee. Tell us about how their experience, their companies are going to shape NAC’s direction and really build better collaboration.

Joe Buzzett Sure. So our executive committee is made up of six large businesses and six smaller non-traditional businesses. And plus we have one university — Penn State University is representative. So we use this diversity to manage the board. We are all volunteers. We all have day jobs that are in this business, so we’re all very committed to this OTA model, to providing capability to the warfighter. So our new members are from Raytheon, Dan Zimmerman and Applied Research on the large business side. And then E-optic, which is an optics business. We have PER, Precision Energetics Research, and McCormick Stevenson. So we really have a diversity of large and small businesses that help us guide the NAC. We have goals and we have Ben Harris, who is our our lone employee, and Ben executes our vision for us. So he’s very hands-on, very experienced, and we go through and our vision is, we want speed. We want speed for the warfighter, and I think it lines up very well with with some of the new policy changes that are going on in the administration.

Terry Gerton Mr. Harris, let me come back to you to talk about some of those new policy changes. The Trump administration is really emphasizing speed, flexibility, OTAs, as both of you have already talked about. How are these changes affecting NAC, its objectives, and its members’ ability to deliver?

Ben Harris It’s all positive. Ever since the executive order came out on 9 April, we’ve really been able to share with everyone, hey, we’re here. We’ve always been here. And so what it’s enabled us to do is to focus on the time to award. We had kind of drifted away from being able to get OTAs awarded quickly. But now with all of the administration’s focus on trying to do as much as they can in the development sphere through OTAs … We’re able to now message, hey, let’s start focusing on not just where the dollars go, but how fast are those dollars are getting on contract, which is really what our members have been pushing for.

Terry Gerton And how are your members assessing their own capacity to respond to that faster delivery objective?

Ben Harris There’s no pushback from our members. We typically — we’re really looking forward to the Army’s announcement [about] the transformation that they’re doing. And then the memo that just came out this week from the Secretary on the transformation all focusing on speed. We’re still going to focus obviously on cost and performance, but this new emphasis of speed is what we need. It’s difficult for small businesses to write white papers one year, and it takes over a year to get it on contract. You’re counting on cash coming in and you spent dollars to actually write these white papers. So this is all going to be good news for our members.

Terry Gerton So, Mr. Buzzett, let me come back to you to kind of wrap this up. As you look to the future, 2026 and beyond, what are NAC’s critical priorities?

Joe Buzzett So as Ben mentioned, it’s doing things fast. It’s being able to answer to the department’s needs. Some of the needs that we’re really focusing on are counter-UAS. We see the proliferation of all these drones and how do you counter them. We’ve got active programs on proximity munitions and other ways to defeat these UASs. And then on the offensive side, the UAS weaponization piece. So as the army decides and the department decides how they were going to fight with drones as they watch what’s going on in Ukraine and how we use that as a force multiplier. So, you know, right now this isn’t our first rodeo, as they say. We have 550 active projects. We’ve been doing this a long time. We measure, every month how we’re doing on, from the time the Army or the [Department of] war says we want something to when we can get it under contract. That’s piece one. Piece two is actually delivering that prototype, and getting it to the hands of the warfighter quickly.

Terry Gerton Mr. Harris?

Ben Harris And I’ll just say we also continue to try to recruit new members to help expand the defense industrial base. So that is another one of our focuses going forward. So the more members we have, the better the competition is. And all our members are U.S. Based.

 

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The Army is taking the next step in its ambitions to start using small nuclear reactors to power critical infrastructure on at least some of its bases. This week, the service started the solicitation process for its Janus program via the Defense Innovation Unit, while also announcing some of the first bases that are most likely to host the new miniature nuclear generators.

Officials want to test the feasibility of using the microreactors to deal with what they say are several problems: frequent electrical outages, increasing power demands, and a limited menu of backup generation alternatives. The Army says it is convinced that the commercial technology behind the latest generation of reactors is viable — the big question is cost.

So this week, through the Defense Innovation Unit’s Commercial Solutions Opening, the Army released a solicitation asking vendors to propose microreactor designs that the service will use to test its resilience goals on nine separate bases between now and 2030.

“What resilience means to us is that we have power no matter what, 24/7, and right now, that resiliency is provided 100% by fossil fuels,” Dr. Jeff Waksman, the principal deputy assistant secretary of the Army for installations, energy and environment, told reporters at the recent Association of the U.S. Army conference in Washington. “With fossil fuels, you have a certain number of days of backup power, but that is a huge vulnerability, particularly if you start to look at like Arctic locations or Pacific locations. So the only technologies that we have now that could be possibly applied to Arctic or Pacific locations to provide 24/7 power for a long length of time is nuclear power. It’s the only option that we have right now.”

Cost considerations

Waksman said the Army is confident the commercial nuclear industry can support the service’s ambitions — and meet a Trump administration goal to have at least one Army-regulated nuclear reactor up and running on a domestic military base by 2028.

For now, the biggest question is cost. And for the time being, officials aren’t even sure exactly how to define the cost-effectiveness of a nuclear option.

“It’s a hard question, and it’s going to eventually be an Army senior leader discussion. And the question is, how much are we willing to pay for resiliency? That’s still an open question, and that’s going to be part of what we’re going to try to figure out here,” he said. “I don’t think we need to meet absolute parity with fossil fuels, but I think we’ve got to be reasonably close. But if you just go out to Hawaii or Alaska, they’re already paying upwards of 40 cents per kilowatt hour. So these reactors don’t need to be 10 or 12 cents a kilowatt hour to be parity. They need to be something like 40 or 50 cents a kilowatt hour. I think there’s going to be a big market for them. But exactly what the number is, that’s part of what we need to figure out for the next few years.”

Supply chain

But Waksman said there are other reasons for the Army to get involved now, beyond just determining the cost-effectiveness of commercial nuclear technologies.

He said the Army also wants to influence the development of the U.S. nuclear industry. And not necessarily with funding — there’s already plenty of that in private markets, with several companies having raised hundreds of millions of dollars to develop their reactor designs. He said the nuclear industry is already “very hot.”

“Now is the perfect time for the government to get involved, because there are multiple nuclear startups that have now gone public and have market caps of over a billion dollars. The problem is you have a dozen different companies with a dozen different supply chains, and there’s no way that that’s going to actually work — we’re going to have to neck this down,” he said. “For a comparison in aviation, Boeing and Airbus are vehement enemies, but they use a lot of the same supply chain, because having two fully parallel supply chains doesn’t make sense for airplanes. That’s part of the role that we’re going to play here, as these companies are developing their designs, is trying to help squeeze them into similar supply chains … that will not only give more options to these companies, but it also encourages these suppliers to actually expand and make assembly line components, because right now, nuclear reactor components tend to be one-off, custom, handmade components.”

As part of the partnership with DIU, the Army plans to use an iterative prototyping process, via other transaction agreements (OTAs), to test the reactor designs on nine bases, which were also announced this week. They are:

• Fort Benning, Georgia
• Fort Bragg, North Carolina
• Fort Campbell, Kentucky
• Fort Drum, New York
• Fort Hood, Texas
• Fort Wainwright, Alaska
• Holston Army Ammunition Plant, Tennessee
• Joint Base Lewis-McChord, Washington
• Redstone Arsenal, Alabama

At each of those sites, the companies selected are expected to start by building a “first of a kind” reactor, then use lessons learned to improve on that commercial design with a “second of a kind.”

Making nuclear “sexy” again

Waksman said there’s a precedent for that kind of government involvement — both in terms of technology and in workforce development. The Army is trying to emulate the model NASA used to spur development of the space industry through its Commercial Orbital Transportation Services program.

“When NASA wanted to start commercial rocketry, they started at the COTS competition, and that was the competition that basically created SpaceX. SpaceX took an industry where the A students in engineering didn’t want to go into rockets, it wasn’t cool, and SpaceX made it cool again, and suddenly you had all the really smart engineers on campus wanted to get into space and rocketry,” he said. “Nuclear needs its SpaceX. There are these innovative, exciting startups, and we’re hoping to cultivate them in the same way that NASA cultivated SpaceX, make nuclear sexy again, and encourage more of the top young engineering talent to want to go in the field. Because right now, there’s a tremendous shortage.”

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