When the Defense Department received a $23 billion down payment for the Golden Dome initiative through a reconciliation bill, lawmakers demanded a detailed plan for how the Pentagon plans to spend that money.

Six months later, lawmakers are still waiting for the Pentagon to provide “complete budgetary details and justification of the $23,000,000,000 in mandatory funding.” That includes a comprehensive deployment schedule, cost, schedule and performance metrics and a finalized system architecture. 

As a result, Congressional appropriators were unable to conduct oversight of Golden Dome programs for fiscal 2026.

The department’s $175 billion Golden Dome initiative President Donald Trump first ordered last January aims to build a network of satellites — possibly numbering in the hundreds or even thousands — that would detect, track and intercept incoming missiles. Pentagon officials have described the program as a “top priority for the nation.”

The effort has been shrouded in secrecy, and lawmakers’ demand for more detail on how the Pentagon plans to spend the initial tranche of funding is another sign of Congress’s limited visibility into the program’s early spending plans.

“Due to insufficient budgetary information, the House and Senate Defense Appropriations Subcommittees were unable to effectively assess resources available to specific program elements and to conduct oversight of planned programs and projects for fiscal year 2026 Golden Dome efforts in consideration of the final agreement,” appropriators wrote.

Elaine McCusker, senior fellow at the American Enterprise Institute, said it is not unusual or surprising for lawmakers to seek complete budget information for a complex program like the Golden Dome that pulls in multiple complex ongoing efforts and includes classified components.

“Congress often requests new budget exhibits and supplementary information for evolving, complicated programs with potentially high price tags so they can better understand what is existing and ongoing funding and what is really new or accelerated in the budget request,” McCusker told Federal News Network.

But Greg Williams, director of the Center for Defense Information at the Project on Government Oversight, said Congress’ request for complete budgetary information highlights a broader challenge with how the administration has rolled out major initiatives without providing sufficient detail.

“Golden Dome is an extraordinarily complex and ambitious program, for which we should expect extraordinarily comprehensive information. Instead, the American people and Congress have the opposite. The fiscal 2026 Defense Appropriations Act and its explaining document appear to appropriately reflect that disparity,” Williams told Federal News Network.

The House passed the final 2026 minibus funding package Thursday, which includes money for the Defense Department. If the spending bill becomes law, Defense Secretary Pete Hegseth, along with Gen. Michael Guetlein, the Golden Dome director, will have two months to provide a comprehensive spend plan for the initiative. Lawmakers want to see planned obligations and expenditures by program, descriptions, justification and the corresponding system architecture mission areas for fiscal 2025 through 2027. 

The Pentagon comptroller would also have to submit a separate budget justification volume annually beginning in fiscal 2028.

McCusker said Congress bears some responsibility for the delay — budget uncertainty has complicated the department’s efforts to develop the program.

“The Pentagon is pursuing new ideas in how it partners with industry to rapidly develop, build and deploy the myriad systems that make up Golden Dome while also navigating annual delays and uncertainty in getting its budget,” she said. “Congress has an understandable thirst for information on high profile defense programmatic priorities and may perceive a delay in getting the level of detail it seeks, but failing to pass annual appropriations on time has become so common it is a perpetual factor to mitigate. Congress has to accept responsibility for this and be willing to take some risk in providing funds in advance of all the information it needs.”

President Donald Trump said in May that the Golden Dome’s architecture had been “officially selected,” but details about the initiative remain scarce and the Pentagon has restricted officials from publicly discussing the initiative.

McCusker said that Congress’ request for detailed planning, performance and budget information doesn’t say much about the program itself other than “its level of complexity and maturity and the need to develop and convey the overall strategy and projected timeframe for its execution.”

There is no single “Golden Dome” line item in the 2026 spending bill, though it includes billions for related programs that will most likely support the broader system.

The Pentagon leadership received its first official briefing on the Golden Dome architecture in September, and an implementation plan was expected to be delivered in November.

Williams said producing a detailed plan of this complexity in a short period of time is understandably difficult, but added that crafting a plan that credibly explains how its goals will be achieved is “likely impossible according to many experts.”

“Golden Dome is a program of unprecedented, arguably reckless, complexity and ambition.” Williams said. 

“The lack of information is also a result of Congress’s choice to use reconciliation to increase defense spending: The reconciliation process does not provide for the formal submission of budget request materials from the executive branch and so risks exactly this kind of lack of information. Congress should return to the statutory process for clean Defense authorization and appropriations acts to ensure adequate information,” he added.

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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• Lawmakers are still waiting for the Defense Department to provide details on how it plans to spend $23 billion already approved for the Golden Dome effort. Congressional appropriators say the Pentagon has not provided key budget information such as deployment schedule, cost, schedule and performance metrics, as well as a finalized system architecture. The White House has estimated the project could cost as much as $175 billion over the next three years. As a result, House and Senate appropriators were unable to conduct oversight of Golden Dome programs for fiscal 2026. Lawmakers want Defense Secretary Pete Hegseth to submit a detailed spending plan within 60 days of the bill’s enactment.
  (DoD failed to provide budget details to Congress for $23 billion Golden Dome effort - House.gov)
• GSA is giving agencies access to a software to develop AI capabilities. The General Services Administration signed an enterprise agreement with Broadcom, becoming the 24th deal under its OneGov strategy. GSA says agencies can receive up to a 64% discount off Broadcom's schedule prices for access to several platforms, cybersecurity and development tools. Agencies can purchase software packages from Broadcom ranging from VMWare's data intelligence platform to its vDefend cybersecurity tools to its Tanzu starter kit to speed up AI prototyping and deployment. The OneGov deal will be in place through May 2027. GSA's agreement with Broadcom is the third OneGov deal since January and sixth since December.
  (GSA signs 24th OneGov deal - General Services Administration)
• Senate Democrats want to bar political appointees from moving into leadership positions at agency watchdogs. A new bill called the Inspectors General Independence Act would prevent presidents from nominating their own political appointees as Inspectors General. The legislation comes after recent reporting showing that many of Trump’s confirmed IGs were previously political appointees in his administration. Senator Tammy Duckworth, who introduced the bill, says it would help restore public trust and keep IG offices free from conflicts of interest.
  (Inspectors General Independence Act - Sen. Tammy Duckworth (D-Ill.))
• The acting director of the Cybersecurity and Infrastructure Security Agency faces questions about steep staffing cuts at his agency. Acting CISA Director Madhu Gottumukkala told lawmakers that there are no reorganizations in the works at CISA. But he offered few specifics on how the cyber agency would continue to meet its mission after losing roughly one-third of its staff last year. During a House Homeland Security Committee hearing yesterday, Gottummukkala said CISA was getting back on mission and that he would communicate with lawmakers about any future reorganizations.
  (Lawmakers press acting CISA director on workforce reductions - Federal News Network)
• The IRS is abandoning a customer service metric it’s been using for the past 20 years. An independent watchdog within the IRS told Congress last year that this old metric is “misleading” and that it doesn’t “accurately reflect the experience of most taxpayers who call” the IRS. Agency leadership says it will use a new measurement that better reflects its interactions with the public. The IRS is pursuing these changes as part of a broader shakeup of its senior ranks less than a week out from the start of the tax filing season.
  (Ahead of filing season, IRS scraps customer service metric it’s used for 20 years - Federal News Network)
• Agencies have more guidance on how to implement the “rule of many.” But actually adopting the new federal hiring practice may still be put on the backburner. Without enough funding or staffing, agencies are not likely to overhaul their current and already well-established hiring practices in the short term. That’s according to Jenny Mattingley, vice president of government affairs at the Partnership for Public Service. “The rule of many is a good tool, but until those ingredients are all put together, I don’t know that you’ll see it rolled out immediately,” Mattingley said. The “rule of many,” a change that’s been several years in the making, aims to create broader pools of qualified candidates for federal jobs, while adding flexibility for agency hiring managers.
  (OPM details expectations for the ‘rule of many’ in federal hiring - Federal News Network)
• President Donald Trump has turned to the Marine Corps to find the next leader of the Defense Intelligence Agency. Trump this week nominated Marine Corps Lt. Gen. James Adams to serve as director of DIA. Adams is currently deputy commandant for programs and resources at Marine Corps headquarters, where he helped lead the Marines to achieving two clean financial audits. DIA has been without a permanent leader since Trump ousted its former director, Air Force Lt. Gen. Jeffrey Kruse, last August.
  (General officer announcements - Defense Department)
• A third-party arbitrator ruled the Trump administration’s return-to-office memo doesn’t override telework protections in a union contract. The arbitrator is ordering the Department of Health and Human Services to rescind its return-to-office directive and restore telework and remote work agreements for thousands of employees represented by the National Treasury Employees Union. The arbitrator says HHS committed an unfair labor practice by unilaterally terminating these agreements without regard to its five-year collective bargaining agreement with NTEU. HHS officials argued a return-to-office memorandum signed by President Trump on his first day in office supersedes its collective bargaining agreement with the union.
  (Trump’s return-to-office memo doesn’t override telework protections in union contract, arbitrator tells HHS - Federal News Network)
• While the full impact of operating under continuing resolutions is difficult to quantify for the Defense Department, the Government Accountability Office says the funding lapses have led to delays, increased costs, administrative burdens and operational challenges. GAO found that at Joint Base San Antonio, the cost of a facilities sustainment contract more than doubled after CR-related delays in fiscal 2024. Officials told GAO the contract, which was originally estimated at around $580,000, increased to $1.45 million after a final appropriation was passed. U.S. IndoPacific Command said a funding lapse in 2024 disrupted training and exercises. F-35 program officials told GAO that roughly 20% of their financial management staff’s time is spent adjusting budgets to manage through CR constraints.
  (Continuing resolutions cause delays, increased costs across Pentagon programs - Government Accountability Office)
• The Defense Department is putting some details behind Secretary Pete Hegseth's decision to audit the 8(a) small business contracting program. In a new memo released yesterday, DoD is giving combatant commanders, military services and defense agencies until Jan. 31 to identify three types of contracts: 8(a) sole source, 8(a) set-aside and any small business set-aside contract worth more than $20 million. Once identified, Hegseth says these contracts will undergo further reviews by DoD's DOGE team to ensure they are not pass-throughs to larger firms or to ensure they are critical to DoD warfighting capabilities. That review is scheduled to be completed by Feb. 28.
  (Hegseth lays out plans for 8(a) audit reviews - Department of Defense)

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The Defense Logistics Agency — an organization responsible for supplying everything from spare parts to food and fuel — is turning to artificial intelligence and machine learning to fix a long-standing problem of predicting what the military needs on its shelves.

While demand planning accuracy currently hovers around 60%, DLA officials aim to push that baseline figure to 85% with the help of AI and ML tools. Improved forecasting will ensure the services have access to the right items exactly when they need them. 

“We are about 60% accurate on what the services ask us to buy and what we actually have on the shelf.  Part of that, then, is we are either overbuying in some capacity or we are under buying. That doesn’t help the readiness of our systems,” Maj. Gen. David Sanford, DLA director of logistics operations, said during the AFCEA NOVA Army IT Day event on Jan. 15.

Rather than relying mostly on historical purchase data, the models ingest a wide range of data that DLA has not previously used in forecasting. That includes supply consumption and maintenance data, operational data gleaned from wargames and exercises, as well as data that impacts storage locations, such as weather.

The models are tied to each weapon system and DLA evaluates and adjusts the models on a continuing basis as they learn. 

“We are using AI and ML to ingest data that we have just never looked at before. That’s now feeding our planning models. We are building individual models, we are letting them learn, and then those will be our forecasting models as we go forward,” Sanford said.

Some early results already show measurable improvements. Forecasting accuracy for the Army’s Bradley Infantry Fighting Vehicle, for example, has improved by about 12% over the last four months, a senior DLA official told Federal News Network.

The agency has made the most progress working with the Army and the Air Force and is addressing “some final data-interoperability issues” with the Navy. Work with the Marine Corps is also underway. 

“The Army has done a really nice job of ingesting a lot of their sustainment data into a platform called Army 360. We feed into that platform live data now, and then we are able to receive that live data. We are ingesting data now into our demand planning models not just for the Army. We’re on the path for the Navy, and then the Air Force is next. We got a little more work to do with Marines. We’re not as accurate as where we need to be, and so this is our path with each service to drive to that accuracy,” Sanford said.

Demand forecasting, however, varies widely across the services — the DLA official cautioned against directly comparing forecasting performance.

“When we compare services from a demand planning perspective, it’s not an apples-to-apples comparison.  Each service has different products, policies and complexities that influence planning variables and outcomes. Broadly speaking, DLA is in partnership with each service to make improvements to readiness and forecasting,” the DLA official said.

The agency is also using AI and machine learning to improve how it measures true administrative and production lead times. By analyzing years of historical data, the tools can identify how industry has actually performed — rather than how long deliveries were expected to take — and factor that into DLA stock levels.  

“When we put out requests, we need information back to us quickly. And then you got to hold us accountable to get information back to you too quickly. And then on the production lead times, they’re not as accurate as what they are. There’s something that’s advertised, but then there’s the reality of what we’re getting and is not meeting the target that that was initially contracted for,” Sanford said.

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The 8(a) small business contracting program is coming under the microscope of its biggest user.

The Defense Department is joining a growing list of agencies auditing the use of sole source contracts through the 8(a) program.

Experts warn that DoD’s decision to launch this new audit signals that this 40-year-old small business development program is teetering further on the edge.

“It’s not a death knell, but it’s absolutely going to leave a mark. It’s absolutely going to hinder our ability to bring some of that new technology, that new manufacturing capability to the federal marketplace. That’s probably my bigger concern,” said Norm Abdallah, executive vice president at Hui Huliau, a Native Hawaiian-owned firm in the 8(a) program, in an interview with Federal News Network. “We’re behind in terms of the ability to manufacture here in the U.S., and have outsourced that beyond what one should in the defense of their own country, and so hindering the ability for us to help bring some of that to bear in the U.S. marketplace is probably the biggest concern.”

Abdallah said the 8(a) program is an avenue for companies to enter the market, obtain past performance experience in the federal sector and learn the ropes so DoD, and really every agency’s, ongoing distrust and scrutiny of the program is likely going to impact the government in bigger ways than expected.

Secretary Pete Hegseth posted a video on X on Friday explaining that the Pentagon is worried about two main things: The 8(a) program is a diversity, equity and inclusion (DEI) program, and it’s wrought with fraud.

We are taking a sledgehammer to the oldest DEI program in the federal government—the 8(a) program. pic.twitter.com/c9iH8gcqG7

— Secretary of War Pete Hegseth (@SecWar) January 16, 2026

“Providing these small businesses with opportunities is a laudable goal, but over the decades, as it happens, the 8(a) program has morphed into swamp code words for DEI, race-based contracting. And here’s the worst part, in many, many instances, these socially disadvantaged businesses, they don’t even do work. They take a 10%, 20%, sometimes 50% fee off the top, and then pass the contract off to a giant consulting firm, commonly known as beltway bandits. For decades, this program, 8(a) has been a breeding ground for fraud, and this administration is finally doing something about it,” Hegseth said. “Effective immediately, I’m ordering a line-by-line review of every small business sole source, 8(a) contract that is over $20 million, and we’ll look at everything smaller than that too. The Department of War has the biggest chunk of 8(a) spending by far, 10 times more than any other agency. So our cleanup, it’s going to be 10 times tougher.”

DoD’s audit will include two phases. Hegseth said if a contract doesn’t make meet the DoD’s goal of increasing lethality, they will terminate it.

“We have no room in our budget for wasteful DEI contracts that don’t help us win wars, period, full stop. Second, we’re doing away with these pass through schemes. We’ll make sure that every small business getting a contract is the one actually doing the work, and not just some shell company funneling your money to a giant consulting firm,” he said. “This approach is, of course, not meant to hurt small businesses, and that’s not the point. America is full of great, amazing small businesses. This is part of a larger effort to transform our acquisition ecosystem into one that makes sense for the threats we face in the 21st century.”

An email to DoD seeking more details about the audit and a timeline for the audit wasn’t returned.

Experts say Hegseth’s decision to review sole source contracts worth at least $20 million is directed at Native American, Alaskan Native, Hawaiian Native and other tribal companies. Congress raised the sole source threshold for these firms to $100 million from $22 million in 2020. Firms not belonging to one of these groups have a sole source threshold of $5.5 million for manufacturing and $8.5 million for non-manufacturing contracts. These non-tribal or native firms can receive a sole source contract up to $20 million with certain justifications and approvals.

While experts say Congress may not act to change the law, the ongoing audits by the Small Business Administration, the Treasury Department, the General Services Administration and now DoD are sending signals that, at least for sole source contracts, the program doesn’t work.

A former DoD acquisition executive, who requested anonymity because their current company still does business with DoD, said he believes federal small business goals are at risk across the board, and while they may not be affected this year, in two to four years, agencies will see a huge reduction in their industrial base.

The former DoD executive said the administration is sending an inconsistent message to the federal contracting community. The audits and the reduction of staff in small business offices are sending one message that small businesses aren’t important. But then the White House, and DoD particularly, are expressing the desire to attract new participants to the federal market, including non-traditional companies. The executive said these companies typically depend on small business offices and programs like 8(a) to help them get a foot in the door.

John Shoraka, a former associate administrator of government contracting and business development at SBA and now the co-founder and managing director of GovContractPros, an advisory services firm specializing in federal procurement, said DoD’s audit is part of a concerted effort by the administration to undermine the 8(a) program.

“I think if you look at the dollars in the 8(a) program, especially at DoD, some will point to the fact that they actually went up in 2025. But the challenge that we saw across a lot of our clients was that offer letters that have to go through the district office in order for a sole source award to happen were being held up and or never being processed. So we saw a slowdown in sole source awards,” he said. “I think given what we’ve seen with respect to the SBA audit, given what we’ve seen with respect to the number of 8(a)s being approved, in 2024 there was something like 500 plus 8(a)s approved. In 2025, I think the last count I saw was 66 approved. So given the audits, the slowdown in processing, I think contracting officers are looking over their shoulders. I think in the short term, given the current administration and the current congressional makeup, if you will, we will see a trend away from the 8(a) program.”

DoD’s decision to audit the 8(a) program comes after Treasury and SBA announced similar audits earlier this fall. SBA is looking at the entire program and companies had to submit data to the agency by Monday.

The SBA general counsel’s office is driving the audit, which is unusual because usually these things are either done by the inspector general or program office.

Fraud, DEI concerns unfounded

Shoraka said while the questions being asked by SBA, and now eventually DoD, are legitimate questions, the approach is causing some chaos.

“A lot of our clients reached out to their district office and the district office was actually unaware that those letters had originally gone out with respect to the audit, so there was a disconnect there. The field offices aren’t sure how the data is going to be used, or who’s going to use it, or what they’re looking at,” he said. “From my perspective, given the types of questions that were asked, I think it leads to the question, are there pass throughs happening? Because there was a lot of questions with respect to, who are your subcontractors, who are your vendors, et cetera. So the question is, and I think what SBA was looking at is, are there pass throughs and who’s really in control? Is the disadvantaged individual really owning, operating and benefiting from the 8(a) company? And I think those are legitimate questions. But again, there are legitimate processes and mechanisms to monitor that, including the annual review, which occurs every year on every single 8(a) company.”

The former DoD acquisition executive said while there are concerns about the use of sole source awards over $20 million to tribal companies, the allegations of fraud and the belief that the 8(a) program is a DEI program are unfounded. He said DoD should go to Congress and change the law to reduce the risk of large sole source contracts turning into pass throughs.

Experts agreed that while no program is perfect and there probably are some challenges, the 8(a) program is typically well overseen and maintained.

In fact, Abdallah, from Hui Huliau, said most 8(a) firms spend a lot of time meeting the compliance requirements. But he said it’s also a shared responsibility for oversight with the government.

“There are several folks that have responsibility in there. The first one is the contracting officer. In some cases, they’ve got to approve subcontracts. But more basically, with SBA, we go through a review every year where we have to submit our financials, what work did we do and what work happened?” he said. “They worry about the business mix, how much of your work was set aside versus not set aside? Quite honestly, what means you got the work by some means other than the 8(a) program, be that a subcontractor to another straight commercial, et cetera. So there are lots of hooks to watch it. Do they audit the books, per se, to check for percentages? That’s less common. But it’s part of your overall review.”

Shoraka added there are a significant number of regulations or requirements to mitigate the risk of pass throughs, and most rules allow for legitimate subcontracting.

One thing all of the experts pointed out is that the program is set up to help the 8(a) firm grow and learn, but they still have to do at least 51% of the work under services contracts and 15% of the work under construction contracts.

Shoraka said what is being lost in this entire discussion is there is more fraud in non-small business socio-economic programs across government than there are in the 8(a) and other small businesses initiatives.

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Interview transcript:

Terry Gerton I want to start with Secretary Hegseth’s Arsenal of Freedom tour. He’s taking his pitch on the road and recently spoke at the Lockheed Martin Air Force plant in Fort Worth, Texas. I know you’ve been following this, the developments in defense procurement for quite a while. What are you hearing at this point?

Stephanie Kostro So Terry, this “Arsenal of Freedom” is a month-long tour, and it really is Secretary Hegseth going around to various places. He started out in Newport News, here in Virginia, talking with shipbuilders about what it means to be part of the team, right? Being part of the arsenal of freedom and in making things faster, more efficiently, etc. He then went out to California and spoke with folks, and then most recently, just last week in Texas, visiting Lockheed Martin as you mentioned, but also SpaceX. And so talking to folks about, what does it mean to be part of the arsenal of freedom? This is building on his November 7th Arsenal of Freedom speech that he gave here at Fort McNair in the D.C. area. And it is really about reviving this team mentality of, “we are in this together.” Against that backdrop, of course, we have recent activity in acquisition transformation, but also an executive order that came out earlier this month about limiting executive compensation for defense contractors, limiting dividends and also share repurchases or stock buybacks. And so this is a very interesting time to be in the defense industry.

Terry Gerton Stephanie, with all of the changes in the FAR and the DFAR and now the Defense Appropriation Act that’s in law, do you think that DoD has the policy tools it needs and wants to accomplish its transformation?

Stephanie Kostro There are two elements of the answer here. One is, with the fiscal year 2026 National Defense Authorization Act, which was just signed into law last month, they received a lot of new authorities, a lot of a sense from Congress about the ways in which this should be tackled. There is language there about technical data rights and intellectual property. There were things in there about how to define a nontraditional defense company, etc. But I don’t think that was sufficient; we still have work to do. And so does the department have all of the authorities and resources it needs to move forward? I think we’re going to see a lot of legislative proposals come out of the department for this next round of the NDAA, the fiscal year ’27 NDAA. And I think we’ll see things about acquisition workforce. We’re going to see things about working outside of the Federal Acquisition Regulation way of doing contracts. That is code for things like Other Transaction Authority or commercial solutions openings, etc. I don’t think they have everything they need. Part of the Arsenal of Freedom tour and the rollout of this acquisition transformation is to look at how the department can buy things more effectively and more efficiently. That’s time, not having cost overruns, etc. And so all of this is sort of coming together, in a way, to ultimately really transform the way the department buys. And I’m very excited to be part of this.

Terry Gerton Having the rules and authorities is only one piece. What’s your sense of whether the acquisition culture and workforce are aligned to actually accomplish the goals?

Stephanie Kostro Culture is the hardest element of any kind of transformation, right? I do think they’re trying to empower contracting officers and other key members of the acquisition workforce, program managers, contracting officer representatives, etc. This is a longer-term issue, and I think they are trying to tackle it through training programs, etc., letting folks know tools are at their disposal and giving them the authority to go ahead and use those tools. Now, folks don’t get into acquisition within the civil service because they’re risk-loving. A lot of times they get into it because they want to do things very smartly, very efficiently and oftentimes they look back on precedent to see how things were done before. Layer over that, Terry, the fact that we lost a lot of contracting personnel through deferred resignation programs, voluntary early retirement programs and reductions in force. So we are trying to rebuild the workforce in numbers as well as in training. I don’t think they’re there yet; I do think there’s a path to get them there. I’m eager for industry to work with the Department of War and others about how to train effectively and to let industry folks sit in the same training as the government folks, so everyone’s hearing the same thing.

Terry Gerton Stephanie, before we leave this topic, you touched on the executive order about defense contractors and compensation and buybacks. There’s a lot of unknowns still in how that will play out, but what are you hearing from your members?

Stephanie Kostro Our members were very eager to hear how the Professional Services Council would summarize that EO. So we did put out — based on the fact sheet from the White House, based from some interactions we’ve had with administration officials — our interpretation of it. That said, we’ve also asked our member companies, and we have 400 member companies and the majority of them do business with the Department of War and the intelligence community, “hey, what questions for clarification would you like us to ask?” And that list is growing. It is very long. It’s things like, is this really just for publicly traded companies? What about privately owned, or S corps and LLCs? The reason I mentioned that, Terry, is S corps and LLCs will often pay out a dividend to an executive at the company so that executive can pay taxes. They pay out of dividend, so it’s not only a dividend payment, it’s executive compensation, but it’s really just to go ahead and pay federal taxes. What do people do in that regard? How do they explain this? If they have a parent company that is overseas in Europe or elsewhere, how do they explain this executive order to those folks? And that executive compensation, there’s a limit if the company is underperforming, and all of this is predicated on the company’s underperforming — either cost overruns or schedule overruns. How do they explain this to folks? And is it really just about government contracts, or what if you’re a commercial and a government company and your executive compensation is based usually on both elements, commercial and government? So how do you go ahead and limit compensation there? This is a fascinating area to be engaged with the government on. We are all learning this together.

Terry Gerton As Secretary Hegseth tries to walk this tightrope between encouraging defense contractors to be on the team and work with us, and at the same time kind of tightening the screws on enforcement and compensation, the president has said he wants to spend $1.5 trillion on defense next year. That’s a lot of money. How is that going to get spent, do you think?

Stephanie Kostro Oh, it is an eye-catching number, right? $1.5 trillion when we are roughly $1 trillion now are just under, and it is a huge increase. Now, we’ve had large increases in the defense budget in other times in U.S. history. In the early 1950s with the Korean War, the Reagan buildup that some of us remember from the ’80s. Some of us who are listening may not remember it. They may not have been born yet, and that’s okay too. You know, there is some precedent for huge increases in the defense spend. The question here becomes, if the department and the military services are going for commercial-first mentality to prioritize speed of award and innovation, etc., they certainly can spend that money throughout the defense ecosystem. The question that we have is really, what is the organizing construct for this? What would we be spending the money on? Would it be shipbuilding, combat aircraft, the logistics piece, which always tends to be an issue? We also know operations and maintenance accounts are sometimes used and reprogrammed away if they’re not spent by a certain time, because it’s one-year money at the department, it gets reprogramed away. It’s going to be an interesting mathematical problem to tackle. In addition, I would mention, we had the reconciliation bill, the One Big, Beautiful Bill Act that passed and was signed into law last July. That infused a bunch of cash into both the Department of Defense and the Department of Homeland Security. I understand some of that money hasn’t been apportioned and provided to the departments yet, but we are now at this point in January of 2026 talking about, what would a reconciliation bill look like for 2026? Congress can pass one per fiscal year. The one that was passed last July was the one for fiscal ’25. What happens this year? There are a lot of different mechanisms to get that money through Congress and over to the government to apportion to the department.

Terry Gerton Well, speaking of 2026 appropriations, it looks like Homeland Security and Defense will be two of the last bills out, hopefully before the end of this month. What are you hearing from folks on the Hill?

Stephanie Kostro I’m hearing that they’re trying really, really hard to avert a shutdown. And I think we’re going to get there. I’m not a betting person, Terry, you know, I’ve talked about that in the past. And I’m not in this case, either. The chance for a shutdown is never zero. That said, the experience that we all had back in October and November last year would indicate that there really is no appetite for a shutdown this year. The National Defense Appropriations Act and the DHS [bill] I think are probably the last because they want to get everything done before they tackle those. Those are the two departments that received the lion’s share of the money from the reconciliation bill, One Big Beautiful Bill Act last year, and they are looking to get more money in a reconciliation bill this year. So I’m not surprised to hear that those are last, but I actually don’t think that indicates that they’re very far apart on the numbers.

Terry Gerton And on those two departments, PSC is sponsoring a trip in January to the border to do some on-site research. Tell us about that plan.

Stephanie Kostro I am so excited about this. PSC has not typically done this. I do know other entities have done this, I used to be at a think tank where we would do things like this. We are bringing almost 30 different companies out to California next week, Jan. 28 and 29, to do a behind-the-scenes access with the Customs and Border Protection folks who are out there. And the ports of LA and Long Beach, the ports at entry, the land ones over at San Ysidro and Otay Mesa, really talking with folks on the ground there about what their requirements are. This is really focused on technology. How do we use technology and the art of the possible to protect our borders? Now, I would hasten to add, Terry, border security is not a partisan issue in many, many ways. The Biden administration, the Obama administration, the previous Trump administration all focused on border issues in different ways. Our companies really want to mention to folks on the ground, here is technology that you may not have experience with that is up-and-coming. How can we leverage it to better secure our borders? Talking about cargo screening, etc. I think this is a really good opportunity for companies to sit down with folks who are in the field and hear about what they need.

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The Army is updating its software directive and scrapping its existing policy on software funding that has routinely hindered software projects across the service. 

Michael Obadal, the service’s undersecretary, said the new software directive will be released “in the coming weeks.” The service plans to revise the document annually to keep pace with the rapidly changing environment. 

Meanwhile, canceling its existing policy governing how the service pays for software will allow the Army to “apply the appropriate type of money to the applicable use case.” 

“For many years, as many of you know, we’ve been trapped by the color of money. We try to buy modern, agile software with rigid funding authorities. Predictably, it doesn’t work,” Obadal said during the AFCEA NOVA Army IT Day event on Thursday.

This shift will give the Army greater flexibility in how it uses its operations and maintenance, procurement and research, development, testing and evaluation funds for software.

While flexible use of different colors of money will offer the service some relief, it is still not “the most effective method” for funding software. Obadal said the Army ultimately plans to pursue Budget Activity 8 (BA-8), which will allow program managers to move away from the hardware-centric budgeting model and instead draw funding from an appropriations category specific to software.

“We’re going to pursue Budget Activity 08 for our software, which would realign funding from various appropriations to new software and digital technology in its own budget activity,” Obadal said.

The Defense Department has long struggled with software acquisition for a number of reasons, but the rules that govern how the department pays for software have possibly been one of its major obstacles. The model Congress and the Pentagon have used to plan and execute the Pentagon’s spending was originally built for long-term hardware acquisition. But this structure doesn’t apply well to the agile software development model. 

The department has been experimenting with using a separate appropriations category for software. The idea started to gain traction in 2019, when the Defense Innovation Board found that “colors of money tend to doom” software programs. “We need to create pathways for “bleaching” funds to smooth this process for long-term programs,” the board wrote in its report. 

But lawmakers have been hesitant to authorize broader adoption of this pathway beyond a small number of pilot programs until the Defense Department is able to produce data comparing this approach to traditional appropriation practices.

“Agile funding … we have to have that in the right focus area to be able to apply it to modern software, and it’s a little more difficult than we think because it involves Congress … But these are the steps we’re taking,” Obadal said.

Obadal also urged industry to “build [systems] to scale, don’t build it to demo.”

“What we’re asking from industry as we tackle those things is the confidence in your solution to scale, not just demo … That means that you have to take extra steps, and you have to think about what happens in a year or two years for you. Open architectures, interoperable designs, secure by design software, not bolted-on cybersecurity. That’s another incredibly important one, is your design and a willingness to align with Army timelines and with our operational realities,” he said.

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The nation’s newest military service still has a lot of work to do to chart its future. The Space Force had been planning to use a new “Futures Command” to handle that work, and it was supposed to be up and running by last year. That didn’t happen as scheduled, but the idea’s not dead either.

Leaders say they’re still planning a new organization to help shape the service’s future, but they also needed to make sure it aligns with the new administration’s priorities.

The Space Force first unveiled its plans for a new Futures Command almost two years ago. The idea at the time was to combine the existing Space Warfighting Analysis Center and the Concepts and Technologies Center with a new Wargaming Center. Those plans were put on pause late in 2024 when it became apparent new political leadership was on the way.

But Gen. Chance Saltzman, the chief of space operations, said Air Force Secretary Troy Meink is on board with the overall idea.

“Secretary Meink 100% understands what we were trying to accomplish with Futures Command and the importance of it,” he said during the annual Spacepower conference in Orlando, Florida, last month. “How are we looking at the future? How are we categorizing and characterizing the threats we’re going to face, the missions we’re going to be asked to do, and how are we going to respond so that we can put the force in place to meet those challenges? We will look at concepts, we will do the war gaming, we will do the simulations, we will do all the manpower assessment, we will do the military construction surveys to figure out what facilities are needed, and then document that so that everybody can see what we’re progressing towards. It is this idea of establishing a command that’s focused on what is it we’re going to need in the future and making sure all the planning is done, synchronized with the resources so we get that right.”

And while the Space Force certainly isn’t the first military service in recent years to contemplate a new command as part of big organizational changes, it is the first time in modern history that a service is having to do that from scratch.

“In December of 2019, the law said, ‘There is a Space Force,’ and nothing could have been further from the truth,” Saltzman said. “It legally made there be a Space Force, but it was still in work. It was a thought process, it was pulling things together as rapidly as possible. So I think the hardest thing is overcoming this mentality that there’s been a Space Force for decades, that we’ve got all this figured out. These are hard things to do on a government scale with government oversight and government resources. And so convincing people that we had to start from scratch on almost every process we had, on every decision we make, that was unprecedented. Convincing people that we don’t really have anything to fall back on. If I don’t deliver a service dress [uniform], then we’re using an Air Force service dress — there wasn’t something else. We had plenty of uniform changes when we were growing up, but there was always an Air Force uniform before those changes that we were in until we transitioned. Not the case for the Space Force. We had to start from scratch. We’re not just enhancing the Space Force, we’re actually creating one. And that’s been a real challenge.”

New leadership education initiatives

The Space Force traces most of its roots to the Air Force, and until now, it’s leaned heavily on its sister service within the Department of the Air Force for combat support and other functions. But it’s increasingly working to build infrastructure, doctrine and culture of its own.

As one example, Saltzman said just last month, the Space Force launched its own Captains Leadership Course. That initiative is a partnership with Texas A&M University and led by the Space Force’s Space Training and Readiness Command.

“The bottom line is each service brings something unique in terms of what it focuses on for professional military education. I remember General [Jay] Raymond, when he stood up the service, talked about some of the things that services have to do. You have to have your own budget, you have to have your own doctrine, you have to develop your own people. And that’s kind of stuck with me,” he said. “We have to develop our Guardians for the specifics of the Space Force. And this basic understanding at the captain’s level is going to be foundational to what follows in the rest of their career. And so while we need to find ways to give them experience with other services, I wanted to make sure that the service had a core offering at that grade to educate our officers on the Space Force. Now we’re going to include joint doctrine, will include communications and leadership. But they need that foundational understanding of the service first before they start to branch out and figure out how they integrate with the other services.”

First Space Force OTS graduates

And in 2025, the service graduated its first group of newly-minted officers from officer training school. Those first 80 officers, Saltzman said, represent a mentality within the service that seeks to build “multidisciplinary” leaders. The enlisted force, he says, will be tactical experts, while officers will need expertise in “joint integration.”

“Do we need deep expertise? Absolutely. Do we need people that broadly understand how to integrate with a joint force? Absolutely. How do you do both? This is the tough part of the job, you have to get that balance just right,” he said. “If you go down to kind of the micro management side of this and ask how you develop a single Guardian to best perform, then you get caught in that conundrum. I have to think about what I need the entire service to be able to do. Do I need deep experts? Yes. Do I need broad integrators? Yes. So we have to find a way to, across the entire service, create opportunities to maximize what people can do, what they do best, and fill the jobs that are required based on those skills and those competencies. You have to make sure you think about it from an enterprise perspective, and what might apply to any one Guardian doesn’t necessarily have to apply to all Guardians.”

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The Pentagon doesn’t know exactly how many civilian employees telework or work remotely across the Department of Defense, according to the Government Accountability Office.

While DoD has good data on which positions are eligible for telework or remote work, it does not consistently track whether civilian employees are actually using those programs. As a result, official figures have at times overstated remote work usage by counting eligible positions instead of the number of employees approved to telework or work remotely, a new watchdog report shows.

In May 2024, for instance — a period within the December 2021 to February 2025 span reviewed in the new GAO report — the Pentagon publicly reported it had 61,549 remote employees. One month later, however, the Defense Department told GAO it had 35,558 remote workers.

“The reason that happened is because they were reporting position eligibility. They were not reporting the individual employees. That’s exactly what we found — they had good data on the positions eligible but didn’t have such good data on who was actually using those programs,” Alissa Czyz, director of defense capabilities and management at GAO, told Federal News Network.

“We found that two-thirds of the positions in 2024 were eligible for telework, but the data were not very good when you got to the individual employee level,” she added.

Czyz said her team found that most DoD civilians were already working in person even before the current return-to-office policy, and that fully remote workers made up only a tiny fraction of the workforce.

“According to our data, the vast majority of civilians — about 81% — were in person. About 1% were doing remote work. That perception that large amounts of federal employees were teleworking, at least at the Department of Defense, did not bore out in our analysis,” Czyz said. 

Since President Donald Trump terminated remote work for federal employees, about 8% of the DoD civilian workforce — roughly 62,000 employees — had not returned to in-person work. About 6%, or 45,000 workers, did not return to office after accepting offers for deferred resignation. The government used the deferred resignation program last year to reduce the size of the federal workforce. Another 2%, or about 17,000 people, did not return due to reasonable accommodations.

No formal review of telework, remote work

Office of Personnel Management guidance requires agencies to evaluate how telework and remote-work programs affect their mission, employee recruitment and retention, and operating costs. However, GAO found that the Defense Department has not evaluated the impact of those programs on the department’s broader goals.

While there were scattered efforts across the department to assess some aspects of telework and remote work, there was no comprehensive, departmentwide evaluation of both benefits and drawbacks of those programs. One data source — the Federal Employee Viewpoint Survey — previously included telework-related questions, but OPM canceled the survey this year. 

Czyz said her team was able to gather some anecdotal feedback on telework and remote work, with DoD officials citing benefits such as improved communication, recruitment advantages for hard-to-fill positions and potential cost reductions. Some disadvantages included reduced in-person collaboration and decreased morale among employees who were not eligible for telework. But ultimately officials were not able to provide concrete data demonstrating cost savings or other outcomes.

“I mean, the bottom line was they were not conducting formal evaluations of telework or remote work,” Czyz said. “There was maybe some anecdotal cost savings with reduction in office space and that sort of thing, but there had been no formal evaluation of cost savings in the department.”

DoD also hasn’t assessed whether increased in-person requirements have created new costs, but GAO is examining those potential increases as part of a separate review of the department’s use of office space. That review comes as DoD seeks to reduce its office footprint while simultaneously bringing employees back to the office. GAO expects to release that report in early spring.

The Pentagon updated its telework policy in 2024 for the first time since 2012, instructing DoD components to “actively promote” telework and remote work and to eliminate barriers to program execution through education and training. The department has since rolled back the policy.

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 Defense Department has long tried to simplify and reform the reserve duty status system, which has expanded to more than 30 separate statutes scattered across about 20 different titles of federal law. 

This complex system has created pay and benefits inequities and frequent administrative delays when National Guard members and reservists shift between duty statuses.

A new bipartisan bill now seeks to consolidate dozens of duty statuses under which National Guard members and reservists are called to service to just four.

If passed, the Duty Status Reform Act would ensure service members performing assignments in the same category receive the same pay and benefits. 

Rep. Gil Cisneros (D-Calif.), the bill’s sponsor, said the effort is his “number one priority returning to Congress.”

“With the current duty status system, service members doing similar jobs often receive significantly less benefits due to them being under different duty statuses. Currently, at any point during activation, a Guardsman can go between up to 10 different duty statuses, resulting in lapses of pay and administrative hurdles. This bipartisan bill fixes existing problems like this and puts active duty under our one category,” Cisneros, a Navy veteran who returned to the House in 2025 after serving from 2019 to 2021, said at a Jan. 8 press conference.

The current system is a product of decades of patch fixes done by Congress spanning from World War II to the Global War on Terror. And while the Defense Department has attempted to overhaul the system over the last two decades, most efforts have failed to gain traction.

“It’s been a very gradual build up process, and so over time, there have been these gaps that have been developed where a reserve component member may be doing duty of one sort right next to reserve component duty person doing that kind of duty right next to them and they’re receiving potentially different pay and benefits. Or it could be the case where they’re on one sort of duty, they come to do their next day of duty, and they’re on a different status, and their underlying pay and benefits may change,” Lisa Harrington, senior operations researcher at RAND, told Federal News Network in August.

The bill builds on a Defense Department–commissioned RAND report that recommended consolidating the reserve duty status system into four categories, including contingency duty, training and support, reserve component duty and remote assignments.

Contingency duty covers deployments and mobilizations where reservists and National Guard members are called to serve, usually involuntarily, for combat operations, national emergencies, disaster response or other missions requiring additional manpower. 

Training and support assignments include required training, administrative assignments or support to other units. 

Reserve component duty, which is most commonly associated with traditional reserve service, includes training periods, administrative assignments and support activities.

Remote assignments are designed to account for duty that can be completed virtually, such as online courses.

“Let me be clear about what this bill does and what this bill does not do. It does not create new entitlements, new pay or new benefits. It does align existing benefits so service members performing the same mission alongside their active duty counterparts receive the same rights, protections and predictability. This is about parity and fairness, not expansion,” retired Maj. Gen. Francis M. McGinn, president of the National Guard Association of the United States, said at the press conference.

It is unclear what strategy the lawmakers plan to pursue to pass the measure, but Cisneros said he has spoken with Rep. Adam Smith (D-Wash.), ranking member on the House Armed Services Committee, and plans to meet with HASC Chair Mike Rogers (R-Ala.).

“I think now is the time to move it forward, and we’re going to keep working to make sure that it does get over across the finish line,” Cisneros said.

Rep. Jack Bergman (R-Mich.), the bill’s cosponsor, said he is “more than cautiously optimistic on the timing that we have here.”

“When you think of a defense dollar, we don’t talk about the totals, but how do we spend a defense dollar in the right way without overspending? But also the very subtle part of this — in the end, if we do it right, it’s about our readiness, but it’s also about the recruiting and retention of those men and women who have not even yet thought about serving,” Bergman said. 

Harrington said the potential cost of the reform might be one of the concerns since accurately predicting how much the reform would ultimately cost is difficult.

“The costs we think are not something that would stop the reform from happening when people understand exactly how the costs play out,” she said.

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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A new bill will require the Pentagon to assess whether its current efforts to recruit, train and retain cyber talent are working — and to produce a new department-wide plan aimed at addressing persistent cyber workforce gaps.

The legislation, titled the Department of Defense Comprehensive Cyber Workforce Strategy Act of 2025, tasks the Pentagon with developing a cyber workforce strategy and delivering a detailed report to Congress by Jan. 31, 2027. 

Sens. Gary Peters (D-Mich.) and Mike Rounds (R-S.D.), the bill’s sponsors, want the Pentagon to assess progress made and remaining gaps in implementing the DoD’s 2023–2027 Cyber Workforce Strategy, and identify which elements of the current strategy should be continued or dropped. 

The lawmakers are also requesting detailed workforce data, including the size of the cyber workforce, vacancy rates, specific work roles and other data related to personnel system metrics.

In addition, the legislation calls for a detailed analysis of the Defense Cyber Workforce Framework itself, including its goals, implementation efforts, the milestones used to track progress and the performance metrics used to determine whether the cyber workforce strategy is actually effective. The Defense Department issued the framework in 2023 to establish an “authoritative lexicon based on the work an individual is performing, not their position titles, occupational series, or designator.” The goal of the framework is to give the Pentagon a clearer picture of its cyber and IT workforce, which has been difficult since cyber-related work often falls under traditional military jobs titles that do not clearly reflect those job responsibilities.

The Pentagon would also be required to identify “any issues, problems or roadblocks” that have slowed implementation of the framework — and outline steps taken to overcome those barriers.

The legislation encourages the Defense Department to explore alternative personnel models, including cyber civilian reserve or auxiliary forces, and to leverage talent management authorities used by other federal agencies. The Pentagon would also be required to examine the use of commercial tools for tracking workforce qualification and certifications, identifying talent and skills in existing personnel management systems.

The bill further calls for partnerships with universities and academic centers of excellence to improve workforce development and talent acquisition.

The Pentagon would be required to provide Congress with a timeline and estimated costs for implementing the new cyber workforce strategy.

The bill comes amid personnel reductions across the Defense Department over the past year, including at key cyber organizations such as U.S. Cyber Command and the Defense Information Systems Agency. The Pentagon faces a shortage of approximately 25,000 cyber professionals. 

In May, the Defense Information Systems Agency, for instance, said it expected to lose nearly 10% of its civilian workforce due to the deferred resignation program and early retirements. The organization said it was experimenting with automation and artificial intelligence to offset the impact of workforce reductions.

Meanwhile, Cyber Command lost 5 to 8 percent of its personnel amid the department’s efforts to shrink its civilian workforce.

The Pentagon has lost approximately 60,000 civilian employees since President Donald Trump took office.

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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President Donald Trump took aim at defense contractors Wednesday, announcing new restrictions on executive pay and stock buybacks as part of the administration’s push to speed procurement and revitalize the defense industrial base. 

In an executive order issued late Wednesday, Trump said companies “are not permitted in any way, shape, or form to pay dividends or buy back stock, until they are able to produce a superior product, on time and on budget.”

The order directs Defense Secretary Pete Hegseth to identify defense contractors providing critical weapons, supplies and equipment that are “underperforming, not investing their own capital into necessary production capacity, not sufficiently prioritizing U.S. government contracts, or whose production speed is insufficient as determined by the Secretary,” while simultaneously engaging in stock buybacks or corporate profit distributions. 

Contractors identified under the review must be notified and given an opportunity to submit a remediation plan within 15 days to address performance issues. 

If disputes over underperformance issues cannot be resolved within 15 days or the remediation plan is deemed inadequate, the defense secretary “may initiate immediate actions to secure remedies for the secretary that will expedite production, prioritize the U.S. military and return the contractor to sufficient performance, investment, prioritization and production, to the maximum extent permitted by law.”

The executive order also directs the Defense Department to ensure that future contracts with new or existing defense contractors include provisions prohibiting stock buybacks and corporate profit distributions during periods of underperformance, contract noncompliance, insufficient investment, or “insufficient production speed as determined by the secretary.”

The government already has a whole set of tools in its toolbox to incentivize, reward or penalize companies based on their performance, and the executive order relies in part on mechanisms the Defense Department already uses. What is different, however, are the remedies the administration is focusing on — and the main challenge in implementing this executive order will be defining the key parameters contractors are going to be held accountable for, Protorae Law member Alan Chvotkin said.

“The remedies of no stock buybacks and caps on executive compensation — that’s not a remedy that the government already has available to it,” Chvotkin told Federal News Network. “It’s not so binary to say it’s 100% of contractor’s problem or zero of the contractor’s problem, and that’s where the hard work is going to come on each of these major programs — defining the specific parameters that the department is expecting.”

Stan Soloway, president and CEO of Celero Strategies and federal acquisition expert, said the executive order seems to presume that any cost overrun is the fault of the contractor without recognizing that “not all cost overruns are created equal.”

“The [executive order] is full of vagaries and ambiguity. It is going to be very interesting to determine how they measure whether a company is performing … There’s no mention about the responsibility the Defense Department has for cost overruns and program delays. While companies are far from perfect, all too often, the delays are driven by changing requirements, by requirement rigidity, lack of flexibility in the requirements and by budget uncertainties,” Soloway told Federal News Network. 

Back in 2007, the Defense Science Board, for instance, examined three troubled programs — the Littoral Combat Ship, the presidential helicopter and the Army’s Comanche helicopter — and found that constantly changing government requirements were a major driver of cost overruns and schedule delays. The Packard Commission reached the same conclusion two decades before the Defense Science Board issued its report.

“Accountability is key here, but there is a shared responsibility between the government and contractors. There are many tools to hold contractors accountable, but way fewer tools to hold the government accountable. This EO doesn’t do anything to make the government more accountable,” David Berteau, former president and CEO of the Professional Services Council and now president of David Berteau & Associates, told Federal News Network.

“The disconnect of this EO is if the desired outcome is better contract performance, how can implementing this EO produce better results? That isn’t clear to me. Someone will have to write implementation guidance that does that. I spent a lot of my career writing implementation guidance, and I have a hard time seeing implementing this in such a way that it produces better performance quickly,” he added.

If the goal of the executive order is to push companies to invest in production capacity and capability rather than shareholder returns, that approach only works if there are returns on that investment, Berteau said.

Lockheed Martin’s recent deal with the Pentagon to increase Patriot missile interceptor production to about 2,000 missiles a year is a significant step toward that approach, Berteau said. Lockheed agreed to fund an expansion of its Patriot missile factory in exchange for a seven-year commitment from the Pentagon.

“We have to wait to see the implementation guidance to get a sense of what the real goal is, better contract performance leading to faster deliveries or what,” Berteau said.

“It is critical that the relationship between the government and contractors be one of shared responsibility and partnership, particularly around defining and deciding what the contract will give you and the structure of the contract to make sure the government will get what it needs. There is a lot about this EO that doesn’t seem to be about strengthening that partnership. It seems to be more about punishing one side of the equation,” he added.

The Defense Department did not respond to questions about whether contractors should expect formal guidance in the coming weeks or how many underperforming contractors it has already identified.

“After numerous years of failing to meet contractual obligations, under President Trump’s order, defense contractors will no longer be allowed to leave our warfighters behind while giving themselves massive payouts from stock buybacks. This will give Department of War the ability to meet national security objectives and ensure efficiency and accountability. Our obligation is to our warfighters; not Wall Street,” Chief Pentagon Spokesman Sean Parnell told Federal News Network in a statement. 

Executive pay

In one of his Truth Social posts, Trump said no executive should be allowed to make more than $5 million, but the figure did not make it into the executive order.

Instead, the president directed the defense secretary to ensure future contracts require executive compensation to be tied to performance — such as on-time delivery, increased production and “all necessary facilitation of investments required to rapidly expand the United States stockpiles and capabilities” — rather than short-term financial metrics like cash flow or earnings per share driven by stock buybacks.

If a contractor has “engaged in underperformance, non-compliance, insufficient prioritization of the contract, insufficient investment, or insufficient production speed,” the department could cap executive base salaries at current levels.

Executive compensation was a contentious issue in 2013, when President Barack Obama called on Congress to cap executive pay at $400,000.

A cap on executive compensation already exists in some form — contractors can pay their executives whatever they choose, but the government only reimburses costs up to a certain limit.

The executive order, however, goes a step further — it’s shifting from how much the government will reimburse the contractor to limiting how much the company can pay its executives.

“Pretty significant difference, but maybe they’ll fall back on the same mechanisms. I don’t know that yet. Nobody in the department is talking yet about how they’re going to implement this. I’m sure they’re still trying to work that out,” Chvotkin said.

“I think there’s a fair question, broadly speaking, in commerce, generally, not just in the government market, about executives having the right incentives to drive long-term performance and excellence. But I don’t know what the standards are going to be, what the metrics are going to be.  There’s a ton of ambiguity in here,” Soloway said.

Who does the EO apply to?

While the executive order targets contractors that provide “critical weapons, supplies and equipment,” it doesn’t clearly define the term “critical.” 

Chvotkin said new contracts could easily specify which vendors qualify as critical suppliers or require all new contracts to include the provisions laid out in the executive order.

And while the executive order is broadly aimed at “all contractors,” Chvotkin said its likely target is traditional defense contractors rather than the commercial firms the Pentagon has been trying to attract. 

“I think it’s all contractors, but fixed-price contractors — less likely, they’re going to have binary decision. Commercial contractors, where the effort is to bring more of them in, but probably not as many of them have the triggers, the buyback, the sort of where the government is reimbursing for executive compensation as they do for many of the traditional defense contractors,” Chvotkin said. 

What’s next?

Chvotkin said the Defense Department is likely to issue general guidance to programs on how to carry out the secretary’s review.

“I think they’ve already done quite a bit of that, but I would expect [the undersecretary for acquisition sustainment office] to lead a fair amount of that responsibility to describe what those contracting provisions are relating to critical weapon systems and supplies and equipment. They’ve got to identify those first, then catch up with everybody else on a rolling basis,” Chvotkin said. 

“From the contracting folks, I would expect a broad set of contract provisions, both modifications to existing contracts, as well as provisions to go into new solicitations and new contracts to be awarded. That includes the identification of the key performance parameters for each solicitation and new award, the requirement for the company if notified by the Department of Defense or the contracting officer of the failure to adequately meet the performance objectives, the requirement for the remediation plan and then the additional remedies that the department might ask for as part of either the failure of the contractor to meet the original contract performance of projections or the remediation plan,” he added.

Jason Miller contributed to this report.

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• A government watchdog found that the Defense Department has never formally evaluated telework and remote work programs against agency goals. DoD officials, however, reported “perceived” benefits and challenges. The Government Accountability Office said without formal evaluation of these programs, DoD cannot determine whether these programs help meet agency goals. While defense officials told GAO that their use of these flexibilities improved productivity, efficiency, and recruitment and retention, some officials said that telework reduced opportunities for collaboration and information sharing and decreased morale. The watchdog also found that the data on the number of teleworkers and remote workers DoD previously reported is likely inaccurate.
  (DoD never formally evaluated telework, remote work programs, watchdog finds - Government Accountability Office)
• The Defense Department is putting additional safeguards around the research it funds. The Pentagon is telling the military services and defense agencies to review fundamental research awards to ensure there is no foreign influence, intellectual property theft or any other form of exploitation that could threaten the security and economic interests of the country. A new memo from Under Secretary of Defense for Research and Engineering Emil Michael establishes additional oversight requirements to protect government funded research. Along with the reviews of awards, DoD will establish a department-wide Fundamental Research Risk Review Repository to improve information collection and sharing across all components. It also will develop automated vetting and continuous monitoring capabilities to help detect and mitigate foreign influence risks.
  (DoD mandates additional oversight for research awards - Department of Defense)
• The Labor Department recovered more than a quarter billion dollars in back wages for American workers last year. That’s the most money the department’s Wage and Hour Division has recovered in a single year since 2019. Those back wages went out to nearly 177,000 employees. On average, that's more than $1,400 per employee. The department has launched new tools aimed at helping employers stay informed of their obligations.
  (Labor Department recovers more than $259M in back wages for workers in 2025 - Labor Department)
• The Air and Space Forces are "aggressively" implementing Defense Secretary Pete Hegseth’s acquisition reforms. The services are replacing program executive offices with new organizations called portfolio acquisition executives. The Air Force has already redesignated five program executive offices as portfolio acquisition executives, including those overseeing Command, Control, Battle Management and Communications (C2BMC) and Nuclear Command, Control and Communications (NC3). Meanwhile, the Space Force has designated its first tranche of mission areas to be overseen by portfolio acquisition executives, including space access and space based sensing and targeting.
  (Air Force, Space Force replace program offices with portfolio acquisition executives - Space Force)
• Cohesity became the 22nd company to sign up for an enterprise software deal under GSA’s OneGov program. Under the agreement, GSA said agencies can buy Cohesity’s cybersecurity data protection and replication tools at a discount of more than 72% off the company's GSA schedule price. Agencies also have access to other Cohesity offerings, such as its FedShield tool bundle at discounted prices. The prices are good through September 2027. GSA’s contract with Cohesity is the third OneGov deal with a cybersecurity firm since December.
  (GSA adds third cyber firm since December to OneGov program - General Services Administration)
• Clearer numbers on the federal workforce are coming into view from the Office of Personnel Management. A new OPM website contains a far more detailed and modernized view on the federal workforce, compared with its predecessor, FedScope. The new platform also reaffirms the significant reshaping the federal workforce experienced over the last year. OPM’s numbers reveal a major drop in workforce size, a decline in federal union representation and far fewer telework hours.
  (OPM data overhaul reveals deeper federal workforce insights - Federal News Network)
• The Federal Bureau of Prisons is offering retention bonuses to correctional officers and other frontline positions, in an effort to address staffing challenges. The size of the pay incentive depends on the employee’s position and the staffing level at their facility. The retention bonuses will take effect in February, and will be reviewed annually, according to the agency. But federal union officials are urging a more permanent pay fix for the BOP, which has faced years of significant understaffing.
  (Update on BOP retention incentives - Federal Bureau of Prisons)
• The Social Security Administration is rolling out nationwide systems in the coming months that will impact how the agency triages its workload to employees. Someone applying for SSA benefits in California could soon be speaking to an employee in Maine. The agency is rolling out systems in March that will allow employees to tackle a nationwide inventory of cases. SSA employees say they’re used to processing claims submitted locally and that these changes could make their work much more complicated. The agency lost about 7,000 employees through voluntary incentives last year.
  (Social Security seeks nationwide system to manage caseload for smaller workforce - Federal News Network)

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The Defense Logistics Agency is initially focusing its use of artificial intelligence across three main mission areas: operations, demand planning and forecasting, and audit and transparency.

At the same time, DLA isn’t waiting for everyone to be trained or for its data to be perfect.

Adarryl Roberts, the chief information officer at DLA, said by applying AI tools to their use cases, employees can actually clean up the data more quickly.

“You don’t have a human trying to analyze the data and come up with those conclusions. So leveraging AI to help with data curation and ensuring we have cleaner data, but then also not just focusing on ChatGPT and things of that nature,” Roberts said on Ask the CIO. “I know that’s the buzzword, but for an agency like DLA, ChatGPT does not solve our strategic issues that we’re trying to solve, and so that’s why there’s a heavier emphasis on AI. For us in those 56 use cases, there’s a lot of that was natural language processing, a lot around procurement, what I would consider more standardized data, what we’re moving towards with generative AI.”

A lot of this work is setting DLA up to use agentic AI in the short-to-medium term. Roberts said by applying agentic AI to its mission areas, DLA expects to achieve the scale, efficiency and effectiveness benefits that the tools promise to provide.

“At DLA, that’s when we’re able to have digital employees work just like humans, to make us work at scale so that we’re not having to redo work. That’s where you get the loss in efficiency from a logistics perspective, when you have to reorder or re-ship, that’s more cost to the taxpayer, and that also delays readiness to the warfighter,” Roberts said at the recent DLA Industry Collider day. “From a research and development perspective, it’s really looking at the tools we have. We have native tools in the cloud. We have SAP, ServiceNow and others, so based upon our major investments from technology, what are those gaps from a technology perspective that we’re not able to answer from a mission perspective across the supply chain? Then we focus on those very specific use cases to help accelerate AI in that area. The other part of that is architecting it so that it seamlessly plugs back into the ecosystem.”

He added that this ensures the technology doesn’t end up becoming a data stovepipe and can integrate into the larger set of applications to be effective and not break missions.

A good example of this approach leading to success is DLA’s use of robotics process automation (RPA) tools. Roberts said the agency currently has about 185 unattended bots that are working 24/7 to help DLA meet mission goals.

“Through our digital citizen program, government people actually are building bots. As the CIO, I don’t want to be a roadblock as a lot of the technology has advanced to where if you watch a YouTube video, you can pretty much do some rudimentary level coding and things of that nature. You have high school kids building bots today. So I want to put the technology in the hands of the experts, the folks who know the business process the best, so it’s a shorter flash to bang in order to get that support out to the warfighter,” Roberts said.

The success of the bots initiative helped DLA determine that the approach of adopting commercial platforms to implement AI tools was the right one. Roberts said all of these platforms reside under its DLA Connect enterprisewide portal.

“That’s really looking at the technology, the people, our processes and our data, and how do we integrate that and track that schematically so that we don’t incur the technical debt we incurred about 25 years ago? That’s going to result in us having architecture laying out our business processes, our supply chain strategies, how that is integrated within those business processes, overlaying that with our IT and those processes within the IT space,” he said. “The business processes, supply chain, strategies and all of that are overlapping. You can see that integration and that interoperability moving forward. So we are creating a single portal where, if you’re a customer, an industry partner, an actual partner or internal DLA, for you to communicate and also see what’s happening across DLA.”

Training every employee on AI

He said that includes questions about contracts and upcoming requests for proposals as well as order status updates and other data driven questions.

Of course, no matter how good the tools are, if the workforce isn’t trained on how to use the AI capabilities or knows where to find the data, then the benefits will be limited.

Roberts said DLA has been investing in training from online and in person courses to creating a specific “innovation navigators course” that is focused on both the IT and how to help the businesses across the agency look at innovation as a concept.

“Everyone doesn’t need the same level of training for data acumen and AI analytics, depending on where you sit in the organization. So working with our human resources office, we are working with the other executives in the mission areas to understand what skill sets they need to support their day-to-day mission. What are their strategic objectives? What’s that population of the workforce and how do we train them, not just online, but in person?” Roberts said. “We’re not trying to reinvent how you learn AI and data, but how do we do that and incorporate what’s important to DLA moving forward? We have a really robust plan for continuous education, not just take a course, and you’re trained, which, I think, is where the government has failed in the past. We train people as soon as they come on board, and then you don’t get additional training for the next 10-15 years, and then the technology passes you by. So we’re going to stay up with technology, and it’s going to be continuous education moving forward, and that will evolve as our technology evolves.”

Roberts said the training is for everyone, from the director of DLA to senior leaders in the mission areas to the logistics and supply chain experts. The goal is to help them answer and understand how to use the digital products, how to prompt AI tools the best way and how to deploy AI to impact their missions.

“You don’t want to deploy AI for the sake of deploying AI, but we need to educate the workforce in terms of how it will assist them in their day to day jobs, and then strategically, from a leadership perspective, how are we structuring that so that we can achieve our objectives,” he said. “Across DLA, we’ve trained over 25,000 employees. All our employees have been exposed, at least, to an introductory level of data acumen. Then we have some targeted courses that we’re having for senior leaders to actually understand how you manage and lead when you have a digital-first concept. We’re actually going to walk through some use cases, see those to completion for some of the priorities that we have strategically, that way we can better lead the workforce and their understanding of how to employ it at echelon within our organization, enhancing IT governance and operational success.”

The courses and training has helped DLA “lay the foundation in terms of what we need to be a digital organization, to think digital first. Now we’re at the point of execution and implementation, putting those tools to use,” Roberts said.

The post DLA’s foundation to use AI is built on training, platforms first appeared on Federal News Network.

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Comprehensive acquisition reform proposed by the Trump administration has broad and bipartisan backing. Designed to strengthen both the military itself and its supporting defense industrial base (DIB), the initiative as outlined in Defense Department documents issued in November has been long in gestation.

Among those championing the reforms: Mac Thornberry, the former chairman of the House Armed Services Committee and advisor to Amazon Leo for Government. The Texas Republican retired from Congress a few years ago but remains active in defense and procurement reforms – issues he pushed for during his congressional days.

Looking at the community of suppliers to the Defense Department, Thornberry said in a recent interview, reform must do more than ease a few Federal Acquisition Regulation rules. That’s because of the mass of what constitutes the DIB.

“I think that the defense industrial base is far broader than we’ve thought about before,” he said. That is, it goes wider and deeper than the large, prime contractors who make airplanes, ships and tanks.

“Now it includes everything from communications and batteries and minerals to space and cyber. There are more players than there have ever been before,” Thornberry said.

More than the breadth of the DIB favors reform, though, according to Thornberry. A perhaps more important factor is the innovation coming in so many technologies from the private sector – innovation often aimed at commercial use but which also proves essential for the deterrence and lethality of U.S. forces.

“It used to be that the government would be the leader in making the best tank or the best ship or the best fighter jet,” Thornberry said. “But now it’s often private industry that is the best at artificial intelligence or quantum or a lot of things in space.” Ergo, “If private industry is the best at making a lot of the stuff we need to protect the country, relationships have to evolve between government and industry and also among allies.”

Add in the speed at which the technology front is moving, and the need for faster, more streamlined acquisition becomes more pronounced. In the Cold War era, much innovation was sparked by defense needs in the first place – things like stealth coatings, radar guidance and revolutionary energetics. Now, Thornberry points out, innovations occur whether the Defense Department takes two weeks or two decades to acquire them and turn them into capabilities for troops.

Thornberry cited still another factor in favor of acquisition reform: “How interconnected it all is. We tend to think of the separate military services, separate domains, separate theaters around the globe,” he said. “In a way, it’s all interconnected, one global theater right now, especially when you talk about space and cyber.”

The result? “We can’t just fall back on the way we’ve done things in the past,” Thornberry said. “We’ve got to change. Partnership is the key word. It must not just be a label. It’s got to be a reality for us to take advantage of everything that the best in the country can produce.”

Make room for space

Among the policy updates the administration emphasizes is greater use of the very commercial technologies driving the economy. Much commercial innovation occurs in space, specifically in the burgeoning technologies of low earth orbit (LEO) satellites. Competing vendors, including Amazon Leo, have launched hundreds of small LEO satellites that robustly fill a missing link in the worldwide communications network.

As for defense, Thornberry said, “The only way we can do a lot of what needs to be done for the country’s national security is in and from space.” The LEO capacity stands as a case in point for the need to more readily adopt commercial technologies.

“If you’re going to provide the best that the whole country can produce for the benefit of the war fighter,” Thornberry said, “you’ve got to take advantage of that commercial part of space.”

He added, “I’ve been surprised, as I have left government, at how much investment is going into space, from both the companies and the investment community.”

Two advantages of technology pursued by multiple companies are the resulting levels of competition and the resiliency of not depending on a sole supplier.

“That is true in space as well,” Thornberry said. “If you’re going to rely on commercial space providers, as we must, then you’ve got to make sure you have the resilience of multiple providers.”

In fact, he said, the Defense Department needs greater supplier diversity in all of the domains in which it operates.

“We’re not going to have one company or two or three companies that are going to solve all our national security issues,” Thornberry said. “We need to have this diverse ecosystem with partnerships of various kinds.”

He added, “And that’s especially true, I think, in space.”

Within the ecosystem of suppliers and technologies in space, Thornberry said, the government will require disparate systems to interconnect. He cited Defense Secretary Pete Hegseth’s reference to modular, open systems architecture.

That means, Thornberry said, “you can have different capabilities, but they have an interface that means you can put a plug in whatever sort of capability you need to; and that interface is something that’s available to everybody.”

The open systems approach, which he said Congress tried and ultimately failed to codify a few years back, is now needed for projects such as the Combined Joint All-Domain Command and Control (CJADC2) project and the Golden Dome missile protection program. Both Defense initiatives are essentially integrations of multiple existing systems and capabilities.

Acquisition for speed

Space has become a highly contested environment, Thornberry said.

“Anything that is valuable is threatened and gets under attack,” he said, “and we see adversaries doing that. They have demonstrated anti-satellite weapons. We’re seeing a whole variety of capabilities to deny us the advantages of space.”

Moreover, this is happening “at an incredibly fast rate,” he said. It all gets to a key goal of acquisition reform. Hegseth “talked about the importance of speed, and I do agree that that is a characteristic we have not placed at the top of the pecking order, but we have to now.”

That includes the speed at which commercial technologies get adapted and turned into capabilities. Thornberry called Ukraine and its war with Russia a masterclass in agility afforded by speed of adaptation.

“Ukraine can adjust their drones with a week’s time,” he said. “We’ve got to get better at adapting to meet the circumstances and working through commercial providers is the only way that can happen.”

Ukraine shows what’s possible and needed everywhere.

“A few years ago, it became clear that adversaries were moving at an incredible rate to improve their capability,” Thornberry said. “At the same time, technology in general was advancing at an amazing rate.” He noted that the Pentagon had programs here and there to speed technology adoption. These include the Defense Innovation Unit and the Air Force’s Kessel Run.

Thornberry said those efforts produced results, but not systemically. He said there’s evidence of resistance deep within the bureaucracy then and now. Therefore, he said, the latest effort to reform acquisition throughout the Defense Department requires comprehensive adoption to succeed.

“The tendency is to do things the way we’ve always done them. If we do that, we will not be able to defend the nation,” he said.

Besides speed, the acquisition system must produce a market attractive to companies in the first place, Thornberry said.

The old-line defense companies have learned the existing system, “and they’ve done some pretty innovative things in limited spheres,” he said. “But they’re oriented towards the rules and requirements that the current process gives them.”

By expanding use of other transactional authority (OTA) and, as Thornberry put it, letting off some of the procurement shackles, more defense-focused innovation would flow from commercial companies and startups.

Equally crucial, the Pentagon must find a way to send clear and consistent demand signals to maintain the attractiveness of the defense sector to the investment world.

“They need to have some wins. It doesn’t mean everybody wins, but these folks need to see that there is the potential for a profit in making these investments,” Thornberry said.

He added, “The purpose of all this is to get the very best that the whole country can produce into the hands of the war fighters so they can defend the country.”

As for acquisition reform, Thornberry said, “Will the investors continue to invest? Will the commercial companies be willing to work in defense? Is there a chance for startups to earn enough business to stay in business? All of that is yet to be determined.”

The post Military acquisition reform has important backing first appeared on Federal News Network.

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President Donald Trump put defense contractors on notice today. In a post on Truth Social, Trump said his administration is capping executive compensation at $5 million and prohibiting companies from doing stock buybacks and paying out dividends to shareholders.

President Trump signed an executive order Wednesday evening putting these restrictions in place at a policy level.

“All U.S. defense contractors and the defense industry as a whole, BEWARE: While we make the best military equipment in the world (no other country is even close!), defense contractors are currently issuing massive dividends to their shareholders and massive stock buybacks, at the expense and detriment of investing in plants and equipment. This situation will no longer be allowed or tolerated!” President Trump wrote in a post this afternoon. “Also, executive pay packages in the defense industry are exorbitant and unjustifiable given how slowly these companies are delivering vital equipment to our military, and our allies. Salaries, stock options, and every other compensation are far too high for these executives.”

President Trump said going forward, until these companies build new and modern production plants for military equipment, no executive should be allowed to make in excess of $5 million.

The limiting of executive compensation isn’t a new idea. President Barack Obama called on Congress to limit executive competition to $400,000. In 2013, the White House said under current law, government-reimbursed contractor pay is tied to a formula that mimics the compensation levels of top private-sector CEOs, which has grown by more than 300% since 1995.

An hour later, President Trump sent out a second post taking specific aim at Raytheon, now known as RTX. He said Raytheon has been “the least responsive to the needs of the [DoD], the slowest in increasing their volume, and the most aggressive spending on their shareholders rather than the needs and demands of the U.S. military.”

Trump said if Raytheon wants to do further business with the government, it will not be allowed to do any further stock buybacks.

“Either Raytheon steps up, and starts investing in more upfront investments like plants and equipment, or they will no longer be doing business with [DoD],” President Trump wrote.

An email to RTX seeking comment was not immediately returned.

The defense giant said 54% of its $80.8 billion in revenue came from its defense business worldwide in 2024.

In fiscal 2025, USASpending.gov shows RTX held 1,652 contracts worth more than $7.2 billion. The Navy and Air Force are among RTX’s biggest DoD customers.

RTX is known for providing systems like Patriot, National Advanced Surface-to-Air Missile System (NASAMS) and Upgraded Early Warning Radars.

Federal procurement experts question whether the executive order would even be legal and how this would “chill” the markets.

“So much of this ignores that the speed to build/buy/repair is often the fault of the government, not the contractor,” said one industry expert, who requested anonymity.

President Trump went even further in a third post, calling on Congress to increase the DoD’s fiscal 2027 budget to $1.5 trillion.

“This will allow us to build the ‘dream military’ that we have long been entitled to and, more importantly, that will keep us safe and secure, regardless of foe,” the president wrote. “If it weren’t for the tremendous numbers being produced by tariffs from other countries, many of which, in the past, have ‘ripped off’ the United States at levels never seen before, I would stay at the $1 trillion dollar number but, because of tariffs, and the tremendous income that they bring, amounts generated that would’ve been unthinkable in the past … we are able to easily hit the $1.5 trillion number, while at the same time producing an unparalleled military force and having the ability to, at the same time, pay down debt, and likewise, pay a substantial dividend to moderate income patriots without our country!”

DoD requested $848.3 billion for fiscal 2026 which was slightly lower compared to its $849.8 billion request in 2025.

Industry associations like the Professional Services Council, the National Defense Industrial Association and Aerospace Industries Association all declined to comment or didn’t respond to a request for comment.

The post Trump calls for capping executive pay at defense contractors first appeared on Federal News Network.

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Interview transcript:

 

Mike Meese When you think about it, [2025] had as many changes for the federal workforce and for military service members as we have had almost in the last 60 years that was not during wartime. You know, if you think about it we had massive changes after 9/11, an external crisis. We had massive changes after the 2008-2009 Great Recession; another economic crisis and obviously massive changes after COVID. But here we had the election of President Trump, and in a lot of ways that he came in was adjusting for the expansions of government that took place during the last three crises, where he peeled back a lot of that. People may agree with it, people may disagree with it, but it certainly had a huge impact on people in the military, people that were veterans that were serving in the civilian workforce and many other aspects of government.

Terry Gerton Give us a couple of examples of things you saw there at Armed Forces Mutual.

Mike Meese A lot of our members, a lot of our folks were former military, they end up now working for the federal government and were given the option of the early retirement. Consequently, many of them had to go through very rapidly and assess, what is my financial situation? How much longer can I work? If I take this fork in the road, so to speak, is my family going to be secure? Again, without knowing the unknown of what happens if you leave federal service, are there going to be jobs that are going to be out there within the economy? At the same time, you had other pretty radical changes. It wasn’t an economy that you knew that you were jumping out into. There was the liberation day, so to speak, on the first of April when the tariffs were put in place, and there was substantial economic uncertainty. So it was, there’s one government train that you were on that you might want to step off of, and if you recall back earlier in this year, many economists felt that we were going to go into a recession. Fortunately, we managed to avoid that. The market continues to do well. The economy actually seems to continue to be doing well in spite of some of the mastications of a lot of economists.

Terry Gerton Were there any changes you saw in the past year that you’d want to make sure continue?

Mike Meese Well, I think being able to be respectful of government workers and giving them the options wherever you did. The people in the Department of Veterans Affairs talked very rapidly about that they were going to try to take down 80,000 workers. Most of those have tended to be by voluntary separations or not hiring new people, and it’s had an impact on the workforce. But as much as possible, respecting the wishes of government workers and being able to do that has been a positive thing. Also, it will be very interesting because, as sort of a studier of this from a public policy perspective, the president has really stretched the bounds of executive power, and now courts and increasingly the Congress are peeling that back. One example was when the president adjusted the collective bargaining rights of many federal workers, Congress has recently started to peel that back. And so the question is, are many of these changes that were done unilaterally by the executive going to stand the test of time as a powerful president doing things? Whether you agree or disagree with them, unless they become institutionalized, we will tend to revert back to where we were before.

Terry Gerton That’s helpful insight. Certainly one of the things that marked the calendar year 2025, the beginning of fiscal year 2026, was the government shutdown, the longest lapse in appropriations ever. I think so many folks don’t understand the tenuousness of many service members and veterans’ financial status. And whether they missed a SNAP payment or they missed up a paycheck, many were really significantly impacted. Talk us through that and what you saw at Armed Forces Mutual.

Mike Meese Yeah, it’s unfortunate, but somewhere in between a quarter and a third of service members are just one or two paychecks away that if they had a $400 extraordinary expense, that would really set them back. And so consequently, although fortunately, the shutdown was resolved and no military paychecks did not take place, there was a heck of a lot of uncertainty in that. For Armed Forces Mutual, for example, we have a lot of people that pay us their insurance payments by allotment. Normally we get those allotments four days before payday, or we get the information from the Defense Finance and Accounting Service four days before payday. We actually did not get them until about 12 hours before payday. So it literally was the federal government putting things together right before the 31st of October to be able to get things done. And that anxiety for us, and I’m sure every other military-supporting organization, all the banks and everybody else, were working right at the last minute. Service members were postponing vacations. The biggest issues that we saw was people that were literally in the middle of a permanent change of station and the funds either would not come through for that, or maybe they were supposed to go into government quarters, but it was not an essential person that was going to inspect those government quarters. So they’re living on the economy having to pay for a hotel bill while they were moving into those quarters. And so although it did not affect everybody across the board, there were selected pockets where people ended up with some very extraordinary expenses that they might not have been prepared for.

Terry Gerton Mike, there was some proposed legislation that would perhaps mitigate this in the future. What’s your sense of its possibility?

Mike Meese The good news was, and I think we talked about this when we talked in October, everything in the law says that people that were going to be furloughed were in fact going to get back pay. And when this passed, part of the law was for individuals to get back pay. That ought to be permanently part of that law so that you remove the uncertainty and the potential threats that people are not going to get paid on that. In fact, what we really ought to do is find a way for Congress and the executive to work together to get all 13 bills passed by the end of the fiscal year. And that way, you don’t run into this challenge. In fact, this shutdown is probably a good example because I don’t think, whether you’re on one side or the other, anybody hugely politically benefited from this one way or the other. People will write op-eds about it, but nobody outside of Washington cares about that. They just know that government didn’t function for almost a month and a half.

Terry Gerton I’m speaking with Mike Meese. He’s the president of Armed Forces Mutual. Mike, what lessons do you want to make sure that service members, families and veterans take from 2025?

Mike Meese Well, the first is, just following up on the shutdown, some people, especially federal civilian workers, they got lump sum pays in November, at the end of November, where they deferred going out to dinner, deferred vacation or deferred other spending in October. When you get that lump sum pay, that’s actually a good opportunity because you can’t go back out to dinner like you were going to in October. Save that money, set it aside in an emergency fund. Prepare for future potential shutdowns and put the money toward your long-term goals. So that, I think, would be a very important thing. The second thing is, be prepared yourself, always. And that’s keeping your skills up, keeping your resume handy, keeping that LinkedIn profile there. I don’t know what will happen in the future in terms of other federal government shutdowns or opportunities for a deferred retirement system, but it’s always something that people should bear in mind that, especially since we have seen that government jobs that they thought were going to be permanent may not be permanent, you’ve got to be able to have other options.

Terry Gerton Well, speaking of that smart financial planning, any advice for folks who are navigating financial stress through the holidays or perhaps just after?

Mike Meese Well, that is always a challenge. What I tell people, we sometimes have gotten a little bit of a habit; back during COVID when you couldn’t travel, you tended to get more extravagant gifts for the family that you were not visiting. Now that you’re visiting and traveling to them, recognize that just being there is part of that gift, so you don’t need to be quite as lavish on the expenditures. The other thing that I talk with military families, there was one Christmas where I had five members of our family, it turned out that visiting two sets of relatives, we actually flew on Christmas day. And if you fly on Christmas, it’s actually a very cheap fare. It’s kind of strange being in the airport on Christmas but all the flight attendants and pilots are wearing hats and singing Christmas carols. They have to work that day and it turned out to save us a lot of money for a family of five. So there are ways that you can get deals even during the holidays.

Terry Gerton And as you turn your attention to 2026, what legislation or policy changes will you be watching for as the new year begins?

Mike Meese Well, it’ll be very interesting what happens with federal government workers as well as the military. Currently in the National Defense Authorization Act, the military pay increase is going to be 3.8%. And so that is actually ahead of inflation. For me as a military retiree, my pay increase as military retiree and Social Security age is only 2.8%, so the military is doing a little bit better. Federal workers, on the other hand, are going to get a 1% increase, except if they are in federal law enforcement positions, like the FBI, Customs and Border Protection, Secret Service and any other federal border law enforcement. The proposal is for them to get a 3.8% increase, the same as the military. So when you do get that pay increase, whether it’s 1% as a civilian worker, well you’ll be a little bit behind inflation, or 3. 8% in the military or law enforcement, be sure to use that judiciously and maybe put some of that away into savings because you don’t know what will end up happening in 2026.

The post From paychecks to policy shifts, 2025 tested military families. How will they fare in 2026? first appeared on Federal News Network.

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Interview transcript:

Terry Gerton We are in our first full week of January, and we’ve started it with big news over the weekend, the capture of Nicolas Maduro in Venezuela. What impact does that have on the government contracting community? Tell us what you’re hearing.

Stephanie Kostro We have started 2026 with a bit of a surprise for some of us, right? And in terms of contractors, you know, contractors have long been involved in U.S. engagements around the world. This is no different. And so as we move forward, whether it’s military operations or if it’s critical infrastructure protection for oil and gas lines in Venezuela, etc., depending on where the White House wants to go with this plan they have, contractors will be certainly a part of that. We’ve heard in the news media about the president talking to oil and gas companies. I would also say government contractors have a role to play in what’s coming up, and I hope that we can collaborate and cooperate with the White House, with the agencies involved, to make sure that contractors’ voices are being heard and that we’re being used effectively.

Terry Gerton We’re certainly going to hear more about that over the next few days as the operation unfolds, but let’s change topics a little bit; still looking forward to what you’re hearing in 2026. The Revolutionary FAR Overhaul was a big topic in 2025 and now it’s playing out in practice. What are you seeing in the Department of Defense’s class deviations?

Stephanie Kostro Well, we were seeing a lot of activity, Terry, over the holidays. To go back a little bit into the Revolutionary FAR Overhaul, which is this massive rewrite of the Federal Acquisition Regulations, we saw lots of class deviations released from the FAR Council last year, and there was direction from the president as part of this overhaul to undertake a rewrite of all the supplements of the FAR. And every agency has its own supplemental documentation regarding the acquisition regulations. The Department of Defense/Department of War, they have one of the largest supplements, if not the largest supplement, so undertaking a rewrite of that documentation is a massive effort as well. In mid-December, on December 19th, we saw coming out of the department 31 separate class deviations that would take effect on February 1st, which is not too far away, and they’ll guide contract writing until the formal rulemaking process can catch up. This was a large tranche of Phase 1 class deviations. We were unpacking the 31 pieces of language as we speak. In addition to the actual changes to the DFARS language are changes to non-statutory policies and procedures that are found in what’s called at the department procedures, guidance, and information, or PGI. This is the supplemental body of work to the supplement itself. As we go through all of these documents, it’s really important for contractors to look at them carefully, figure out how they’ll impact their work, their business, and the mission of the agency that they’re supporting, and to give feedback to the Department of Defense/Department of War regarding how these are going to play out.

Terry Gerton What are you seeing in the first 31? What stands out to you, at least in the initial look?

Stephanie Kostro There are several that do stand out to me. We’ve had this conversation before about this push in the government to go towards commercial products and commercial services. When you think about the Department of Defense, you think a lot of the very bespoke, military-focused products and services or solutions. But they do actually acquire lots and lots of commercial services and commercial products. And we heard this in the November 7th Arsenal of Freedom speech from Secretary Hegseth, about this need to incorporate more commercial components to what the department is acquiring. When I looked at the class deviations, I saw some of the subparts on applicability of certain laws for commercial products, commercial services and commercially available off-the-shelf items. I also saw a lot of activity there on simplified acquisition procedure, so they’ve retained rapid contracting for combatant commanders, authority within the DFARS, and some other special contracting methods. So this is really reflective of what we’ve seen in the FAR Overhaul, but more specific to the service members and the warfighters.

Terry Gerton I’m speaking with Stephanie Kostro. She’s president of the Professional Services Council. Stephanie, there are contractors who work across agencies. How are they keeping track of all these deviations if every agency has their own new rule book?

Stephanie Kostro It is such a challenge to think through. You’ve got the FAR, which is what governs so much of acquisition within the federal space, but every single agency does have its own supplement. They’re trying to make sure that they’re aligned, or at least not misaligned. That said, it is a challenge for your run-of-the-mill contractor, particularly for small businesses who don’t necessarily have the resources or the knowledge base to go, hey, this is tweaked in this way, but that other agency is tweaking it in a different way, and that’s what it means for my business. I understand that there will be training opportunities that the government’s putting together, not just for government employees and the contracting officer and the acquisition corps, but also for contractors. And I’m encouraged that it will be coursework that both the contracting officers in the government and the contacting folks outside the government can take together and understand what is going on. But you’ve put your finger on one of the major complications that we’re facing, which is, okay, the FAR is being changed, but all of the agencies are going to interpret changes differently for their own purposes, and what does that mean for industry?

Terry Gerton And you mentioned that the new DFARs deviations go into effect 1 February. Do contractors have an opportunity right now to provide feedback or is this a done deal?

Stephanie Kostro So the class deviations are out. We do have a line of communication open to folks at the department to say, hey, you know, this could be an unintended consequence of this particular phraseology or language, etc. They will take effect February 1st. I believe that they’re open to modifying them before the actual rulemaking process starts. And we’re hoping that as a trade association — PSC, we have 400 member companies — we’ll go out to them and say, hey, what is a burr under the saddle or what is real sticking point for you here? And we’ll convey that, or they can convey it themselves. There seems to be an openness to receiving that feedback, but again, not sure what they’ll do with it, particularly as different supplements from different agencies may be misaligned. And so again, it’s very complicated. I think we’ll be playing this out through all of 2026.

Terry Gerton Well, speaking of complications and burrs under the saddle, also over the holidays there was a leak of a draft executive order that might limit buybacks, dividends, and executive compensation for military and defense contractors. What are you hearing about that?

Stephanie Kostro So it’s been fairly quiet on that since last you and I talked Terry. There was an executive order, as you mentioned, in draft form that was being discussed in the media. We still haven’t seen the language, we haven’t heard much more about meeting with decision-makers about that. We are very hopeful that when language does come out or is shared, or if these conversations happen, that the White House and others will be open to contractor feedback regarding how this impacts industry. I would mention, PSC, we often highlight, as I did earlier in this discussion, we have 400 member companies. Collectively, our companies, between commercial and government contracts, contribute $1 trillion to the U.S. economy. And that’s just our 400 member companies. So we are a big player in the national economy between commercial and government contracts. So as we have these discussions, I hope that concerns will be taken under advisement.

Terry Gerton Even the leak of this executive order had immediate impact in the stock market. What are you hearing from your member companies about the potentially negative effects of these requirements?

Stephanie Kostro These new requirements, as I understand — again, haven’t seen the language — but as I understand they’ve been drafted, would have impacts on shareholders, would have impacts on the broader economy. Already the rumor of it had an impact on some share prices. I really hope that as we work together — we’ve had a long history of public private partnership and of collaboration with the government — and again, we are here to help with federal missions and making sure the taxpayers in America get what they’re paying for in terms of mission success, whether it’s Internal Revenue Service or Department of Defense/Department of War or Homeland Security, border security, etc. But these companies need to remain viable. They need to be able to pay their workers, able to do the work themselves. That is the conversation that we want to have about the longer-term impacts of some of these potential actions. And I hope, again, that the government will take that under advisement.

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The Military Family Advisory Network is conducting its biennial survey to better understand the needs of military and veteran families worldwide. The survey — the largest independent research effort focused on the military family population — has helped shape major policy and quality-of-life reforms, including the Military Housing Privatization Initiative Tenant Bill of Rights and the creation of a congressional quality-of-life panel for service members and their families.

Unlike many surveys focused on military families, MFAN manages the research process internally from start to finish, which allows the organization to analyze its findings beyond broad, high-level trends.

“We know that there is not one experience that applies for all military families. There are a lot of variations based on where you’re living, based on your family size, based on your rank, based on your branch. And so what we’re able to do is dig into our findings in a way that gives us really concrete and actionable data, so that we’re not trying to boil the ocean with the solutions that we put in place,” Shannon Razsadin, MFAN’s chief executive officer, told Federal News Network.

“It’s very important, and it is very much counted on by a variety of different stakeholders as they shape policy and programs that military families count on,” she added.

MFAN opened the survey in October but paused its outreach efforts during the government shutdown. “We felt that it was too much to ask people in such a time of immense stress to take the time to complete the survey,” Razsadin said.

It has since ramped up outreach and is monitoring response rates to determine when to close the survey. The organization received over 10,000 responses in the last survey cycle. 

Razsadin said MFAN’s research has helped drive several quality-of-life reforms — the Senate Armed Services Committee relied on its study on military housing, which became the “cornerstone” for privatized housing reforms. When the organization’s research first identified food insecurity issues in the military, it launched the One Million Meals Challenge, distributing over a million meals to military families living in places where MFAN’s data showed the highest need.

Further analysis, however, revealed a key driver for food insecurity among military families — a previous study showed that 51% of respondents who had moved in the last two years were food insecure. In response, the organization launched its PCS Restock Program, providing families with household essentials and pantry staples after a permanent change of station move. 

“That’s a tangible example of how MFAN has used our data to drive really important programmatic decisions while at the same time advocating from the policy perspective, because policy takes time, and oftentimes military families don’t have that luxury. These things are about moving on parallel tracks, with the ultimate goal of those intersecting from where programs and policies can meet,” Razsadin said.

“This research effort is for a whole-of-ecosystem approach, because there is no one organization out there, even the government, who can do all things for all people. And so it’s really making sure that we have the data, we are sharing it proactively. We are maintaining the highest levels of institutional review board standards so you can trust this data, that it has gone through the most rigorous review process possible. That has been very helpful for us in making sure this research effort stands up on the Hill, within the Pentagon, to make sure that it can really drive the change possible,” she added.

Issues covered in the survey

The survey examines a wide range of military family wellbeing issues, including finances, housing, childcare and PCS moves, but respondents are only asked questions relevant to their life. Respondents without children, for instance, won’t be asked about education and childcare.

While the survey includes perennial questions asked in every cycle, the organization introduces new topic areas based on feedback from the community. This year, MFAN added questions examining online gambling.

“We’ve heard a lot, and just even outside the military population, online gambling has hit a new level. It is very accessible, and it’s something that we want to understand what’s happening there. But also, what are the intersection points between things like online gambling and financial security? What are some of the intersection points between that and loneliness or social isolation? We’re really interested to see if this is something that is a broad issue or is something that is being consumed at very high levels within the military population, but what also are some of the implications related to that, and what could be some of those drivers that we’ll need to dig deeper into as an organization,” Razsadin said. 

For the first time, MFAN has incorporated methodology designed to produce findings representative of the broader military community. Razsadin said it will allow the organization to speak more confidently about trends across the military population rather than just the experiences of survey respondents.

“It was an intensive effort from a research design perspective, and we’re really looking forward to releasing those findings, and we think that it will give the data even more legs than it had before,” Razsadin said.

MFAN also uses validated measurement scales throughout the survey, which allows the organization to create “apples-to-apples comparisons” between the military population and the civilian population. 

“This allows us to really have data that we can then bring to the Hill and other stakeholders and say, ‘This is how the military population is stacking up as compared to the civilian population,’ which has been really helpful for us in the advocacy work that we do as an organization,” Razsadin said.

Recently, the organization has been focusing its advocacy efforts on increasing military pay and examining the basic allowance for housing, particularly how the system could be made more responsive — and possibly more predictive — to changing housing market conditions. The survey data will shape MFAN’s policy priorities for the next several years.

“It’s so important that we hear from people through this research effort, because it really does shape the future as far as what is discussed within the Pentagon, what is discussed on the Hill, and making sure that the well-being of military families always stays at the forefront as not just a nice-to-have, but as a must-have, and that’s more important now than ever,” Razsadin said.

MFAN plans to release its findings in May.

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• Kirsten Davies has officially taken over the role of the Defense Department's chief information officer. She was sworn in right before the Christmas break. Congress confirmed Davies on Dec. 18 as part of the final tranche of nominees from President Donald Trump. Davies succeeds Katie Arrington, who has performed the duties of DoD CIO since March. Arrington spearheaded a number of major initiatives during her tenure, including an overhaul of the department’s legacy processes for buying software.
  (Kirsten Davies officially takes helm as DoD CIO - LinkedIn)
• The Marine Corps has stood up the Family Member Travel Screening Cell to address long-standing delays and coordination issues with overseas and remote-duty assignments. For many Marines and their families, one of the most challenging parts of moving overseas is the suitability screening process, which has long been complex and confusing. The new office will serve as a central help desk, providing information about the screening process, connecting Marines and families with the appropriate medical screening offices and offering support to ensure screenings are completed on time. Officials say the lack of a coordinating office has led to missed deadlines, gaps in manning and added stress for families.
  (Marine Corps creates new office to improve overseas moves for families - MARADMINS message)
• A Navy contractor has agreed to pay $1.5 million over allegations that it sold the service parts that didn’t meet their contract’s specifications. The Justice Department claims Teledyne Electronic Safety Products violated the False Claims Act when it delivered critical ejection seat components that turned out to have been sourced from an unauthorized broker. The components, part of what’s called Digital Recovery Sequencer, were sold between 2011 and 2012.
  (Navy contractor violated False Claims Act - Justice Department)
• Congressional appropriators are rejecting some of the most severe agency budget cuts proposed by the Trump administration. The latest spending package seeks modest spending reductions for most agencies. But it departs from the Trump administration's calls for major budget cuts. It would cut the EPA’s budget by about 4% in fiscal 2026, a far cry from the 55% budget cut the Trump administration proposed. It also rejects the administration’s proposals to cut NASA’s science budget by nearly half. The spending package seeks additional guardrails on unilateral agency reorganizations that could further shrink the federal workforce.
  (Lawmakers reject deep budget cuts, limit agency reorganizations in ‘minibus’ spending package - Federal News Network)
• A Democratic holdout on plans to keep the FBI’s headquarters in Washington, D.C., said there’s a compromise in the works. Sen. Chris Van Hollen (D-Md.) said a spending deal for fiscal 2026 allows the FBI to tap into funds previously approved for an FBI campus in Maryland. But first, the FBI must provide congressional appropriators with a plan for a new headquarters in the Ronald Reagan Building. Van Hollen said this plan would help address longstanding security concerns.
  (Lawmakers reject deep budget cuts, limit agency reorganizations in ‘minibus’ spending package - Federal News Network)
• The National Institute of Standards and Technology would get a funding bump under the minibus spending agreement. The appropriations agreement released by House and Senate lawmakers yesterday includes $1.8 billion for NIST, well above the cuts proposed by the Trump administration. The bill would include $55 million for NIST’s artificial intelligence research efforts. And it would allocate $128 million in construction funding for NIST to upgrade outdated facilities, including at its main campus Gaithersburg, Maryland.
  (Lawmakers boost funding for NIST after proposed cuts - Federal News Network)
• UL Solutions has withdrawn as lead administrator for the FCC’s Cyber Trust Mark program. The company notified the FCC of its decision in a Dec. 19 filing. That comes after the FCC last summer launched a probe into the company’s potential ties to China. The voluntary Cyber Trust Mark program was started late in the Biden administration to certify whether digital consumer products like smart TVs and refrigerators are cyber secure. The FCC has not said whether it picked a new company to serve as a testing lab for the Cyber Trust Mark program.
  (UL Solutions filing - Federal Communications Commission)

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The Defense Information Systems Agency isn’t just talking about meeting Secretary Pete Hegseth’s goal of “speed to capability.” It’s holding contracting officers and program managers accountable.

By March, at least 40% of all task or delivery orders let through the General Services Administration’s schedules program or an agency blanket purchase agreement must use at least one “acquisition accelerator.” By September, 80% of all task and delivery orders issued through GSA or their own BPA must use these tools to speed up the acquisition process.

“It’s oral proposals or presentations. It is confidence ratings. It’s about reaching consensus as soon as a presentation is provided instead of waiting a couple [of weeks]. It’s saying, ‘No, you’re doing it now and you have an hour,’” said Doug Packard, DISA’s procurement services executive, at the recent Forecast to Industry day. “It’s best suited where you have 20 firms submit an offer and you get the two that are best suited to meet that requirement. You have a couple of things to talk to them about that aren’t minor. You can pick the firm and talk with just them, not the other 19, and that saves us months in trying to get us to who is the awardee.”

While Packard didn’t have any specific metrics, he estimates that DISA is shaving weeks off acquisitions timelines, specifically during the source selection phase.

DoD issues 31 FAR deviations

DISA is receiving some additional policy support to expand the use of these accelerators. The Defense Department’s Office of Pricing, Contracting and Acquisition Policy issued the first set of deviations to the Federal Acquisition Regulation to begin implementing the Office of Federal Procurement Policy and the FAR Council’s overhaul of the 40-year-old regulations.

On Dec. 18, John Tenaglia, the principal director of DPCAP, signed 31 class deviations that will be effective on Feb. 1.

“[T]hese class deviations retain DoD-specific statutory direction and direction determined necessary for sound procurement within the new, streamlined RFO structure,” Tenaglia wrote in the Dec. 19 memo. “The [revolutionary FAR overhaul] Phase 1 changes represent actions we can take unilaterally, in advance of formal rulemaking, to reduce regulatory and procedural burden on both our workforce and on industry. Issuing this first tranche of class deviations now provides a preview of the kinds of changes you can expect to see next month once we release the remaining class deviations.”

Among the 31 deviations DoD initially issued are updates to FAR Part 6, competitive procedures, Part 10 for market research and Part 12 for commercial products and services.

“Each class deviation reflected below consists of the revised DFARS part with its associated solicitation provisions and contract clauses, followed by the revised procedures, guidance and information (PGI),” DoD wrote on its FAR deviation website. “The line out documents reflect the current DFARS and PGI with markings to identify high level changes to the official versions at 48 CFR chapter 2 and published on the DPCAP DARS website. The portions of the regulation and PGI that are proposed for removal are struck through. Regulatory text and guidance that have been revised are retained in their original form.”

DoD plans to issue a second tranche of deviations later this month and throughout 2026.

In the coming months, the Pentagon will issue the deviations for FAR Parts 8 and 16. DISA is applying its acquisition accelerators to contracts under these sections.

So far, 23 civilian agencies have issued FAR Part 8 deviations and 18 have issued Part 16 updates.

OFPP seeking feedback through Jan. 12

OFPP and the FAR Council also have issued FAR Companion guides and practitioner albums to help the training and education of the acquisition workforce on the new rules.

Additionally, OFPP Administrator Kevin Rhodes held a series of roundtables with contractors, industry associations and others to gain their perspectives of the FAR overhaul. OFPP says these contractors and associations “shared feedback on five priority goals: increasing competition, reducing costs, accelerating the acquisition system, changing cultural norms and deploying best practices.”

Rhodes said in a statement that “the feedback we received will help inform our efforts for the next phase of the RFO.”

OFPP is accepting more feedback through Jan. 12 through its IdeaScale on ways to continue to improve the FAR across the five priorities.

“Please share a specific buying practice that should start, stop, continue, adjust, or scale in the new era of federal acquisition. Your idea does not need to be new, it only needs to address a real issue or practice that matters to you or your organization that can improve federal buying today,” OFPP wrote in asking for feedback.

As of Jan. 6, public and private sector stakeholders have submitted 86 ideas, ranging from ensuring the “rule of two” remains in place to expanding oral presentations and streamlined source selection beyond IT acquisitions to limiting the flow down requirements to small business subcontractors.

The use of streamlined source selection and oral presentations are examples of what DISA is requiring of its contracting officers in 2026.

Packard said DISA tested out these about 11 different accelerator tools over the last 18 months and determined they worked for both the agency and industry.

Carlen Capenos, the director of the Office of Small Business Programs at DISA, said at the DISA event that the accelerators don’t just benefit the agency, but contractors too.

“We hear often from small and large business that if they’re not going to win, they want to know that fast, the idea of failing fast. So we see step things where you have to provide X, Y and Z, and if you don’t have that, well, then we don’t need you to put together a full-blown proposal because you don’t have the ability to ever win. Or if there’s somebody that’s so much better that has a better solution that we’re talking about, instead of all the check marks, we can eliminate the rest of it and go fast,” she said. “There’s a lot of those things that are really great for small business when they just want to get in front of folks to say, ‘I have the solution. Let me articulate it for you.’ So there are those that really like that point. Our office has done a couple trainings with the contracting folks that have set these up, and they run through it once a year, twice a year, where they provide it to anybody who wants to sign up for it.”

Packard said now that DISA has tested out these accelerator concepts, even winning a protest, it’s time to apply them to increase the “speed to delivery” and attract more commercial companies into DoD.

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