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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© AP Photo/Kevin Wolf

Congressional appropriators are backing the Pentagon’s push to speed up weapons buying, but warn that speed “must be factored alongside cost, performance, lethality and scalability.”

The House released the final 2026 minibus funding package early Tuesday, which includes money for the Departments of Defense, Homeland Security, Labor, Education, Housing and Urban Development, Transportation and Health and Human Services. If passed, the bill would increase defense spending to more than $839 billion — roughly $8.4 billion above the White House’s fiscal 2026 request. House leaders plan to vote on the package later this week. 

Congressional negotiators said they “strongly support” the Defense Department’s acquisition reforms, but pushed back on the Pentagon’s efforts to seek additional authorities or changes to its budget and appropriations framework until it fixes its internal processes. 

“Rapid delivery of ineffective weapon systems at exorbitant cost will not serve the warfighter well,” the appropriators wrote. 

Lawmakers also raised concerns about joint requirements process reform and deep cuts to the department’s acquisition workforce that could jeopardize its ability to carry out Defense Secretary Pete Hegseth’s acquisition reform agenda.

Budget flexibility

Hegseth recently unveiled a plan to overhaul the department’s acquisition system — some of those reform proposals made it into the fiscal 2026 defense policy bill, which became law in December.

At the very end of the document, Hegseth instructed the department to “improve budget flexibility.” 

“Where additional authorities are required, the [undersecretary of defense for acquisition and sustainment], in coordination with the military departments, shall develop a legislative engagement plan to ensure Congress is informed of and aligned with proposed reforms requiring any statutory change,” Hegseth wrote. “All actions will comply with applicable statutes, appropriations law, and procurement integrity requirements.”

That language was likely to become a friction point with Congressional leaders, and now appropriators are saying that reforms laid out in Hegseth’s memo are “internal in nature,” and that the Defense Department needs to “demonstrate progress on these internal procedures and administrative measures” before pursuing additional budget flexibility.

For instance, lawmakers said above-threshold transfer and reprogramming requests are often slowed because “a significant amount of the subcommittees’ time is consumed by waiting for the department to provide requested additional details and justification for these requests.”

“Providing this information alongside the submission of the request would accelerate consideration and create a nimbler process without altering existing authority or reprogramming thresholds,” the appropriators said.

Congressional leaders urged the department’s comptroller and the services’ assistant secretaries to work with the House and Senate Defense Appropriations Subcommittees to improve the amount of detail and justification provided in reprogramming submissions.

Congress gave the department some budget flexibility in 2024 but stopped short of granting broader authorities the department and reform advocates have been seeking that would allow DoD to move money more freely within its accounts without explicit congressional approval.

The Defense Department has also been pushing to change the hardware-centric budgeting model Congress uses to plan and execute the Pentagon’s spending by moving away from the traditional “colors of money” tied to different phases of weapons development. And while DoD has run several pilot projects to test the idea, lawmakers have been hesitant to authorize broader adoption of the approach due to the department’s inability to provide Congress with sufficient data showing the new approach would be more effective than traditional appropriation practices.

“To date, the agreement observes no new or compelling justification or quantitative analysis to support proposals that would alter the current appropriations framework, including with respect to reprogramming thresholds, notification requirements, new start guidelines, or consolidation into a single color of money,” the appropriators said.

“Consideration of legislative changes to the appropriations structure is premature until the Department has demonstrated full and effective use of its existing flexibilities and addressed persistent internal delays,” they added.

Army’s agile funding request rejected

While appropriators approved all 13 budget line-item consolidations requested by the Army in its fiscal 2026 budget, they flatly rejected the Army’s “agile funding” request to raise notification threshold for reprogramming or transfers from $15 million to $50 million for procurement programs and to $25 million for research and development efforts.

“The Department already has sufficient authorities to restructure its internal programming and budgeting processes, and many current challenges with execution can be solved by actions within the Department and do not require statutory change or congressional intervention … Increasing reprogramming thresholds alone is unlikely to improve program execution. Decisions to unilaterally move funding in the year of execution without sufficient oversight introduce uncertainty to both the programs impacted and the industrial base, increasing the risk of development and procurement delays,” the appropriators said.

“The House and Senate Defense Appropriations Subcommittees discourage the secretary of defense and the service secretaries from submitting future requests of this nature,” they added.

Joint requirements reform risks

The Defense Department kicked off the process of dismantling its decades-old Joint Capabilities Integration and Development System (JCIDS) process last year — and Hegseth ordered the Joint Requirements Oversight Council (JROC), which oversees the process, to stop validating service-level requirements to the “maximum extent permitted by law.”

House and Senate appropriators said they support the reform but want more detail on how defense officials plan to mitigate potential risks, such as the military services potentially prioritizing service-specific solutions over joint ones or top-down decision-making stifling bottom-up innovation.

The deputy secretary of defense, vice chairman of the Joint Chiefs of Staff and service secretaries have 60 days to brief appropriators on how they plan to address those risks. 

Workforce is the linchpin of acquisition reform

DoD leaders have long warned that the depth of this administration’s workforce cuts could cripple the department’s ability to execute Hegseth’s acquisition reforms.

Appropriators echoed those concerns, saying they are “concerned that recent reductions to the acquisition workforce, the effects of which have yet to be realized, will negatively affect the Department of Defense’s ability to achieve the initial speed and agility sought by this reform effort.”

Lawmakers directed the defense secretary along with service secretaries to submit an acquisition workforce strategy, including a comprehensive assessment of the personnel needed to execute Hegseth’s and Congress’ proposed acquisition reforms.

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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© Getty Images/Westy72

 

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 Associated Press

Russia has announced a record increase in its export weapons portfolio, with First Deputy Prime Minister Denis Manturov stating on Friday that Moscow now holds $70 billion in signed defense contracts. Manturov delivered the figures during a meeting with President Vladimir Putin, marking the largest reported volume of foreign military orders in Russia’s history. According […]

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.

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 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.

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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.”

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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.

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If you only read the contract clause, you’re missing the playbook.

As of Nov. 10, the Defense Federal Acquisition Regulation Supplement (DFARS) 252.204-7021, also known as the “Cybersecurity Maturity Model Certification [CMMC] clause,” is now in effect. With implementation officially underway, contractors are under pressure to understand not only what 7021 demands of them, but also what contracting officers (KOs) are required to do behind the scenes. Those instructions, which are buried in DFARS subpart 204.75, tell KOs when to include 7021, when they cannot award, and what they must verify before exercising options or extending a period of performance.

Contractors often treat 7021 as a black box dropped into their contracts. Now that the clause is active across new awards, KOs are following explicit procedures you never see. Understanding those procedures gives you visibility into how requirements are determined, enforced and sustained over the life of your award.

Where 7021 really comes from — and what KOs must do

The CMMC clause doesn’t appear in your contracts out of nowhere. It’s part of a stack. At the top is 32 CFR Part 170, the Defense Department’s CMMC program policy (effective Dec. 2024). DFARS 204.75 translates that policy into concrete guidance for contracting officers: policy, procedures and instructions on when to use the clause. You see it in practice as DFARS 252.204-7021, paired with 252.204-7025. DFARS 204.7500-7501 set the scope and definitions. The point is that DFARS isn’t inventing anything new; it’s carrying out CMMC program policy and telling KOs how to enforce it.

The KO instructions are unambiguous. Under DFARS 204.7502, a KO shall insert the required CMMC level when the program office or requiring activity tells them to. The KO doesn’t decide the level, as that comes from the program office based on the data and mission, but they are responsible for putting it into your contract language. Just as clearly, KOs shall not award a contract, task order or delivery order to an offeror without a current CMMC status at the required level.

Two qualifiers matter. First, “CMMC status” doesn’t mean “in progress.” It means you’ve achieved the minimum required score for the assessment, and your status is recognized (self or third-party; final or — at Levels 2 and 3 — conditional). Second, “current” matters. Status is generally valid for three years, and you must maintain it for the life of the award.

To make sense of this, it helps to decode what “status” really means at each level:

• Level 1: Only a final self-assessment counts and no plans of actions and milestones (POA&Ms) are allowed.
• Level 2: Can be self- or certified third-party assessor organization (C3PAO)- assessed, in either final or conditional status.
• Level 3: Always a government assessment — Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) — which can be final or conditional.

KOs may award if your status is final or conditional at Level 2 or 3, provided it meets the required level in the solicitation and any open items are limited to those allowed by 32 CFR §170.21. But conditional status is time bound: 180 days from the status date. If you achieved conditional four months ago and bid today, you’ve only got about 60 days left to close those POA&Ms. There is no conditional path for Level 1.

The message is clear: While conditional paths exist, they are narrow and tightly limited.

The SPRS/UID reality check

Before a KO awards, extends or exercises an option, they verify your status in the Supplier Performance Risk System (SPRS) using your 10-character alphanumeric CMMC Unique Identifier (UID), which is tied to the specific system or enclave that was assessed. This binding matters. The government wants traceability from the contract to the exact enclave processing its data. If your UID points to System A, but CUI ends up in System B, you’ve created a mismatch with contractual — and potentially False Claims Act — implications. Keep your boundary, documentation and operational reality aligned to the UID you present.

This KO check isn’t one-and-done. KOs verify at initial award, again at option exercise or performance extensions, and again if you introduce a new UID mid-performance (for example, after a significant scope change requiring a new assessment). If your status isn’t current at any of those points, the instruction is simple: no award, or no option for extension.

When 7021 must be used — and when it isn’t

The rule is now active, placing us in the phased rollout period that runs through Nov.9, 2028. During this stage, DFARS 204.7504 requires KOs to insert 7021 whenever the program office identifies a CMMC level and no waiver applies. Waivers remain rare and are issued only at the contract level, not as carve-outs for individual contractors.

When the rollout ends on Nov. 10, 2028, the requirement broadens: 7021 must appear in any contract involving the processing, storage or transmission of federal contract information (FCI) or CUI, unless formally waived. Wherever 7021 is used, 7025 follows to ensure all offerors see the requirement before bidding.

What this means for the contractor

Contractors should assume that KOs are already verifying CMMC status in SPRS today, not at some future point. Here’s how the KO’s world translates into your action list:

• Don’t “strategy-bet” on KO discretion: The KO isn’t picking your level. The program office is. The KO’s job is execution and verification under “shall” language.

• Know your status category and the timeline: If you’re planning to bid with conditional Level 2, track the 180-day closeout window from your status date. Build that into proposal schedules and risk plans.

• Engineer your scope and keep it stable: Your CMMC UID binds the assessment to the specific system that will handle DoD data. Avoid unnecessary “significant change” events mid-performance that would force a new assessment/UID, unless you’ve planned for it.

• Keep status current through the entire period of performance (PoP): Treat the three-year validity like a maintenance interval. If your status expires during performance, you’ve put option exercises and extensions at risk.

• Map data flows to the assessed system: Ensure your CUI boundary and your assessed enclave are the same in reality, not just on paper. Align your system security plan (SSP), network diagrams, asset inventory and boundary controls to the UID’s scope.

• Bid packages should include UID clarity: Make it easy for the KO to verify SPRS entries. Label the UID, level, status (final or conditional), status date and expiration in your cover letter or compliance matrix.

• Have a POA&M closure plan you can execute: If conditional, your plan should show who/what/when, procurement lead times and validation steps. Assume the government will ask for evidence of progress.

• Prepare for options early: Six months before option exercise, review your status currency, any scope drift, and whether new UIDs have appeared. Give your KO a smooth verification path.

The KO’s lens

Now that 7021 is in effect and being applied to new awards, KOs are already following the same mandatory procedures across solicitations, evaluations and option exercises. From the KO’s perspective, 7021 is not subjective. It’s a procedure backed by “shall” language: Include the required level, verify status in SPRS by UID, and do not award or extend if the status isn’t current at the required level. Conditional Level 2/3 can win you work, but only within the 180-day window and only with allowable POA&M items per policy.

By understanding the KO’s checklist, contractors can predict how requirements will appear in your contracts, anticipate when status checks will occur, and avoid surprises that might otherwise cost you awards or option years.

Jacob Horne is the chief cybersecurity evangelist at Summit 7.

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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 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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Many Americans remain unaware of a troubling reality that is deeply consequential to our daily lives. Buried within the obscure corners of the periodic table are elements that are essential to our modern economy and national security. These elements, known as critical minerals, are indispensable.

They’re found in everything: health and beauty products, semiconductors in our smartphones, and in the fiber optics that enable internet connectivity. Yet, disconcertingly, we are exceedingly reliant on foreign suppliers for these minerals; this dependency puts America on its back foot.

Consider gallium, used in LEDs and solar panels. Despite possessing considerable gallium resources, the U.S. has no current domestic gallium production and is 100% reliant on imports (most of which come from China). In fact, the U.S. is entirely dependent on foreign sources for at least 12 of the 54 critical minerals identified as essential by the U.S. Geological Survey. For another 29, we are over 50% reliant on non-domestic sources. Our industries — from advanced manufacturing to defense — remain susceptible to supply chain disruptions because of this, as USGS’ latest draft assessment lays out.

This was not always the case. From the 1950s to the 1980s, the United States led the world in the production and refining of rare earth elements (REEs), a subset of critical minerals. However, increased global interconnectedness, high domestic production costs, and environmental challenges contributed to a decline in domestic production. As the United States shifted focus, the People’s Republic of China aggressively invested in its REE mining technology and infrastructure, transforming itself into the world’s dominant player by the mid-1990s. Today, it’s clear that America’s lost dominance in the critical minerals sector is a path it can no longer afford.

China has recently ramped up export controls on minerals like gallium, germanium, antimony and several others. This action underscores a precarious position for the United States and its allies. In December 2024, China banned the export of these minerals to the U.S., Japan, and the Netherlands and subsequently expanded controls to include tungsten, indium, bismuth, tellurium and molybdenum. This move has severely impacted the availability of minerals for which the U.S. is significantly import-reliant.

It is within this context that the administration has made critical minerals security a key component of its energy strategy. Yet, despite these efforts, progress has remained slow because of overlapping initiatives. Intentional coordination among more than 15 federal agencies involved in mineral security could speed up opportunities.

Cohesion, coordination and a comprehensive approach could help to overcome this. A U.S. Critical Minerals Action Plan could focus on fostering a domestic renaissance in mining and processing, strengthening international cooperation, and mitigating risks while fostering a more transparent market.

First, domestic mining and processing capabilities would need to be enhanced. This could mean accelerating permitting processes, streamlining regulations, and investing in exploration and workforce development. It’s not just about digging up minerals; it’s about revitalizing the entire industry value chain, from education to innovation, to support sustainable and efficient production.

Second, international cooperation could be paramount. The U.S. may expand its role in existing multilateral arrangements and invest strategically in the critical mineral projects of allied nations. This could help diversify supply chains and reduce dependency on any single source — specifically, reducing reliance on China.

Third, the U.S. can mitigate risks by creating a well-functioning critical minerals market. This includes implementing targeted incentives to stabilize the market and encourage investment.

The considerations laid out in the U.S. Critical Minerals Action Plan are not a luxury; they are a necessity. Such a plan could serve as a blueprint for reducing American vulnerabilities, securing supply chains, and maintaining national security and economic stability. By taking concerted action now, leaders across the country can ensure that America’s future remains bright, innovative and secure.

Richard Longstaff is a managing director for Deloitte Consulting LLP.

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The Army is creating a dedicated artificial intelligence and machine-learning career field for officers as it pushes to integrate AI more deeply into its operations.

The new 49B specialty establishes artificial intelligence and machine learning as an official “area of concentration” for Army officers, a move the service says will help accelerate its transformation into a more data-centric and AI-enabled force.

The Army will roll out the new career field in phases. Army officers interested in transferring will be able to apply through the service’s Voluntary Transfer Incentive Program beginning Jan. 5. Selected officers are expected to formally transfer into the new career field by October 2026. 

“We’re building a dedicated cadre of in-house experts who will be at the forefront of integrating AI and machine learning across our warfighting functions,” Army Spokesperson Lt. Col. Orlandon Howard said in a statement.

The Volunteer Transfer Incentive Program allows active-duty officers in the competitive category to voluntarily transfer into a different branch or functional area based on Army manning needs. Human Resources Command typically opens application windows once or twice a year, depending on a branch’s strength and personnel requirements.

Officers selected for transfer will incur a three-year active-duty service obligation, which will begin after completion of all required training.

The specialty will be open to all officers eligible for the voluntary transfer program, but those with advanced academic degrees or technical experience in AI- and data-related fields are expected to be more competitive candidates.

Selected officers will undergo graduate-level training and “gain hands-on experience in building, deploying and maintaining” the service’s AI-enabled systems.

The Army is also considering expanding the specialty to include warrant officers in the future.

The service created a new robotics tech warrant officer career field earlier this year to provide tactical units with in-house experts who can deliver robotic and autonomous capabilities directly to soldiers. The role includes training on unmanned and counter-unmanned systems, as well as networking, software engineering, electronic warfare, artificial intelligence and machine learning.

The decision to establish a new AI and machine-learning career pathway for officers comes amid a broader transformation effort aimed at preparing the Army for future warfare and optimizing its force structure and workforce. Earlier this year, Defense Secretary Pete Hegseth directed the Army to enable AI-driven command and control at theater, corps and division headquarters by 2027, field unmanned systems across every division by the end of 2026, and accelerate the integration of counter-UAS capabilities at the platoon level by 2026. 

The Army also brought in four senior executives from tech giants like Palantir and Meta to be part of Detachment 201, the service’s new executive innovation corps. The four men were sworn into the Army Reserve as direct-commissioned officers in June and work at companies heavily invested in artificial intelligence and machine learning.

Meanwhile, the Defense Department has been pushing the use of large language models across the force — earlier this month, the department launched GenAi.mil, a platform designed to put “frontier AI models” into the hands of warfighters. DoD selected Google Cloud’s Gemini for Government as the first AI deployed on the new platform. 

“The future of American warfare is here, and it’s spelled AI,” Hegseth said.

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Interview transcript:

Terry Gerton You have a very cool job title. You are the director of the DC3 Cyber Forensics Lab, the DoD Cybercrime Center. Most people probably don’t even know that kind of function exists, much less what you do. So I want to give you an opportunity to do that first. Tell us about the lab and its mission.

Kevin Rivera The cyber forensics lab has existed for already about 27 years. I agree with you; I think many across the DoD don’t even know that we exist. We’ve been serving for the last 27 years in the Department of Defense, primarily the Defense Criminal Investigative Organizations in support of their investigations of crimes either against or committed by members of the Department of Defense or somehow affecting the Department of Defense. We do digital forensics of digital media related to those crimes. So when crimes occur and they’re investigated, the investigators conduct crime scene searches. They seize evidence. That evidence often is digital evidence in the form of mobile devices, tablets, computers, laptops, gaming systems, etc. And those evidence items have artifacts of relevance to those crimes very often. Our job is to look at those devices and find the artifacts that are related to the criminal activity and either support or refute the allegations against those individuals.

Terry Gerton It sounds very much like what we might see in a TV show. What are some of the more interesting cases that you’ve been involved in?

Kevin Rivera One of our specialties is recovering data from damaged media or media that stops working properly. We have the expertise and specialized skill sets here with our subject matter experts that are able to troubleshoot those broken or failing devices, determine what about them has failed, repair or replace those failing parts, and get those items back to functioning so that we can pull the data off of them and then analyze it. A customer recently came to us with a server that was eight drives that comprised about 800 terabytes of data. Forty terabytes of that data was critical to that organization and the server had failed. So they came to us, not knowing who else they could turn to, to recover that critical data that was not replaceable. Long story short, within about three weeks’ time of troubleshooting and a collaborative team effort here at the Cyber Forensics Lab, we were able to troubleshoot, identify and replace the failed parts, get those hard drives back to working condition, and then recover and reconstruct that data and return it to the customer.

Terry Gerton So that sounds like a case where it wasn’t a crime, it was just a failure of hardware. So you’re tackling both hardware failures and also malware or cyber crime or other sorts of things I’m not even sure I could imagine.

Kevin Rivera That’s correct. We also support the defense industrial base and the Department of Defense from a cybersecurity perspective. We do malware analysis, malware reverse engineering, cyber intrusion forensics to identify if an intrusion has taken place. If it has, we identify for the investigative agencies where that attack came from, how that initial computer or point of entry was compromised and help them further those investigations to bring justice to the offenders.

Terry Gerton I’m speaking with Kevin Rivera. He’s the director of the DC3 Cyber Forensics Lab. You mentioned that the lab’s been in existence now almost 30 years. I would imagine you’ve seen quite a difference in mission and problem sets from when you began to where you’re operating at today. What are the most significant changes in that timeframe?

Kevin Rivera The most prolific change that I’ve seen in the almost 20 years that I personally have been here at the Cyber Forensics Lab, back in the early 2000s, we were investigating and analyzing computer hard drives. Nowadays, in 2025, almost 2026, every person essentially in America that’s walking around is walking around with a computer in their pocket. Most of us call them our cell phones. And every one of those devices has just an enormous volume of data. And that’s just one device that almost every person has. Many people also have laptops and computers and they’re moving around and conducting digital activities across a variety of different devices. So the investigations into those devices and to find the artifacts of relevance have become increasingly complex as we have to correlate activity between multiple devices for a single offender and attribute how the offender is obtaining the data, whether it’s child sexual assault material or whether it is artifacts related to a conspiracy to hurt somebody or you name it, anything that you can imagine, we’ve probably seen it here at the Cyber Forensics Lab. The complexity and the volume of data just continue to explode on orders of magnitude.

Terry Gerton You mentioned also the technology challenges. I would imagine that the forensics mission has got to evolve as quickly as technology does. And these days, of course, if we insert AI into that equation, it gets even more complicated. What would you say are the toughest technology challenges that your team faces today?

Kevin Rivera I think one of the most difficult challenges that we face is the encryption of digital data. The encryption is becoming increasingly complex. Apps are exploding onto the scene of availability, again, on orders of magnitude, and the number of apps that are available to folks. Where offenders are looking to conceal their activities, they never run out of creativity in how they might go about that. And there’s always more and more apps exploding onto the scene that make that possible for them to try to conceal the things that they’re doing and make it hard for the eventual would-be investigator to uncover what they’ve been doing by analyzing those devices. So the encryption of those apps and the data in those apps, I think, is probably the most challenging issue that we face.

Terry Gerton And you mentioned also that you work not only across the service lines there within DoD, but you work across agencies, you support DOJ investigations, you also work with the defense industrial base. How complex are all of those collaborations and how do you integrate operations across those various facets?

Kevin Rivera It’s very challenging, I will say. When we’re supporting an intrusion investigation that’s affected the defense industrial base, we are often working, not necessarily collaboratively, but in parallel with probably a commercial incident response firm that’s essentially a hired gun by the corporation that’s been compromised. To come in and try to protect the integrity and reputation of that company, because as we know, major defense contractors that are compromised, that’s a blemish on their record as far as a contractor that’s appealing for the department to work with. Because as the Department, we value the privacy of our information. It’s important for us for national security to be able to protect and keep that information safe.

Terry Gerton We hear every day about cyber threats. I can’t imagine there are very many slow days for you there at the lab. But as you look forward, are there upcoming initiatives or new technologies maybe that you’re looking forward to that will help shape the digital investigation field?

Kevin Rivera I think a field that everyone across the DoD is trying to lean into is learning how to understand and analyze the artifacts associated with critical infrastructure, because that’s one of our nation’s biggest points of vulnerability. It spreads across a variety of industry sectors and the hardware that’s in use in those infrastructures is such a wide range of hardware that has proprietary software running on it, computers that are 25 years old that they can’t update because it would break something and cause something to stop working properly. The vulnerability that exists across that range of territory is astronomical.

Terry Gerton And you’re looking at the pieces after an attack or an event has already happened. What do you wish people knew on the front end that could protect themselves, their devices, and their information from cyber threats?

Kevin Rivera I think that the old adage of “be careful what you click on” is probably the most predominant suggestion that I could give to anybody. Spear phishing and spam, we see it all the time and we take it for granted, but it really presents a great risk to the everyday user. Clicking on those links — because of what we do now with our digital devices, and so many of us are doing mobile banking and interacting with the Social Security Administration — and all these different things that we take for granted, we’re putting out there by way of doing that the possibility that somebody could compromise our device and steal our identity very easily.

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© U.S. Marine Corps Forces Cybersp/Staff Sgt. Jacob Osborne

At the recent Professional Services Council’s Vision Conference, one of the presentations on acquisition trends highlighted as many as 10 agency specific multi-award technology contracts that have been cancelled or put on indefinite hold.

These included COMET 2 from the General Services Administration, the Army’s Modern Software contract and the IRS’s digital services blanket purchase agreement.

The leaders of the vision team said agencies made the decision to cancel these and other contracts based on the requirements outlined in President Donald Trump’s executive order from March calling for the consolidation of contracts.

One of those acquisition programs that is bucking the cancellation trend is the Army’s huge multiple award contract for professional services.

The service said in a Dec. 19 posting on SAM.gov that it will proceed with the Marketplace for the Acquisition of Professional Services (MAPS) contract after all.

The Army had shelved the program back in March when the White House issued the EO.

“We are pleased to announce that after careful consideration the Government has decided to PROCEED forward with the MAPS acquisition!” the Army Contracting Command at Aberdeen Proving Ground wrote.

MAPS would bring together two existing contracts, IT Enterprise Solutions-3 Services (ITES-3S) and Responsive Strategic Sourcing for Services 3 (RS3), and would have a 10-year life with a $50 billion ceiling.

The Army planned to combine the two contracts in MAPS back in 2024. Instead of recompeting its RS3 as a vehicle called Ascend and moving to version four of ITES-3S, the Army wanted to create its own broad-based professional services contract. Baker Tilly says in a blog post that the Army awarded RS3 in multiple phases between 2017 and 2019, with 260 companies currently participating in the $37.4 billion vehicle. The advisory firm says the service awarded ITES-3S in 2018 and includes 135 companies, and it has a $12 billion ceiling.

The Army had considered moving its requirements that MAPS will address to OASIS+ since there is some overlap of professional services requirements. Under MAPS, the Army is looking for a wide variety of IT and engineering professional services, including program management, business process reengineering, cybersecurity and many others. Baker Tilly says while more details are coming, it believes “MAPS is currently proposed as a full and open competition with small business reserves. The government intends to make 100 awards in total, 20 awards per domain with an unknown number of small business reserves for each of the five domains.”

Now MAPS is back on tap and the Army will hold an industry day on Jan. 28 at Aberdeen Proving Ground in Maryland to discuss the rebooted solicitation.

The Army’s decision comes as the General Services Administration is opening an on-ramp and expanding its OASIS+ contract.

GSA to expand OASIS+

GSA said it will enter phase 2 of OASIS+ on Dec. 4. This means the updated multiple award professional services contract will add five new service domains across all six current contracts. OASIS+ eventually will have 13 total domains. The five news ones are:

• Business administration
• Financial services
• Human capital
• Marketing and public relations
• Social services

GSA says this expansion is a direct response to the market research and feedback it received from federal and industry partners.

“Through in-depth spend analysis, customer engagement and a formal request for information (RFI) that was posted on June 17, 2025, GSA identified critical service areas that represent a significant portion of unmanaged government spending,” GSA said in a release.

GSA expects to release the RFP for OASIS+ phase 2 on our about Jan. 12. Additionally, on Dec. 16 the agency posted draft scorecards outlining the evaluation criteria for all 13 domains combined under the six solicitations.

In its first year, OASIS+ saw agencies obligate more than $366 million through 102 task orders, according to GSA’s data-to-decisions dashboard.

The Department of Homeland Security and the Air Force accounted for the biggest agency customers based on total task orders, awarding 31 and 29, respectively, in fiscal 2025.

Deloitte Consulting won the most task orders with four, and Leidos won the largest task order for $219 million.

And speaking of GSA contracts, its Polaris small business governmentwide acquisition contract is moving forward. As of Dec. 3, agencies can place task orders against Polaris service-disabled veteran-owned small business (SDVOSB) and Historically Underutilized Business Zone (HUBZone) pools.

Among the IT services included on Polaris are:

• Artificial intelligence and automation
• Cloud and edge computing
• Distributed ledger technologies
• Immersive and emerging technologies

“More awards in both pools are expected in Fiscal year 2026. Through this approach, GSA can ensure strong program oversight, manage vendor onboarding effectively and create room for additional opportunities,” wrote Larry Hale, GSA’s assistant commissioner in the Federal Acquisition Service’s Office of Information Technology Category (ITC), in a blog post. “Polaris was built from the start with flexibility in mind. The contract includes key features that help it stay current and responsive, such as on-ramps, no contract ceiling, and technology refresh capabilities.”

GSA still is reviewing bids for the small business and women-owned small business pools.

GAO dismisses AI contract protests

Another program that has garnered a lot of interest and attention received some good news last week as well.

The Government Accountability Office dismissed the protest by AskSage of GSA’s awards to artificial intelligence providers under its OneGov initiative.

GAO rejected the complaint not on its merits, but because it doesn’t have jurisdiction over contract modifications. GSA modified its schedule contracts with Carahsoft to offer access to AI providers for $1 or less.

“Under the Competition in Contracting Act (CICA) and our bid protest regulations, we review protests of alleged violations of procurement statutes and regulations by federal agencies in the award or proposed award of contracts for the procurement of goods and services, and solicitations leading to such awards,” GAO wrote in its decision. “Once a contract is awarded, our office will generally not review protests of allegedly improper contract modifications because such matters are related to contract administration and therefore not subject to review pursuant to our bid protest function.”

GAO says because AskSage challenges the reasonableness of the modification of the schedule contract between GSA and Carahsoft, “AskSage’s protest raises matters of contract administration and therefore is not subject to review pursuant to our bid protest function.”

GAO also determined that AskSage isn’t an “interested party” and therefore not in a position to challenge the modifications.

“To challenge the scope of a contract modification, a protester must demonstrate its direct economic interest with respect to its status as an actual or prospective offeror,” GAO stated. “Here, AskSage is a subcontractor or supplier to Carahsoft, not an actual or prospective offeror for the FSS contract between GSA and Carahsoft that has been modified.”

Nic Chaillan, the founder of AskSage, wrote LinkedIN that there are always loopholes when it comes to federal acquisition rules.

“We are obviously right on the merits. Sad day for America. Now [F]ortune 500 can build a $1 dollar unlimited offering in a contract modification for 12 [months], get agencies locked in and charge billions [in] year 2. Uncompeted. Sad day,” Chaillan wrote in response to others’ comments. “Sad to watch the administration letting those shenanigans happen.”

AskSage filed protests with GAO in August, claiming the awards for access to Anthropic and OpenAI tools violated several laws and regulations, including the commercial item pricing requirements under FAR Part 12 and CICA.

GSA said at least 43 agencies have taken advantage of the low-cost OneGov agreements for AI tools.

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In an era increasingly defined by rapid technological change, the ability of the United States and its allies to communicate and operate as a unified force has never been more vital. Modern conflict now moves at the pace of data, and success depends on how quickly information can be shared, analyzed and acted upon across Defense Department and coalition networks. Today, interoperability is critical to maintaining a strategic advantage across all domains.

The DoD has made progress toward interoperability goals through initiatives such as Combined

Joint All-Domain Command and Control (CJADC2), the Modular Open Systems Approach (MOSA) and the Sensor Open Systems Architecture (SOSA). Each underscores a clear recognition that victory in future conflicts will hinge on the ability to connect every sensor, platform and decision-maker in real time. Yet as adversaries work to jam communications and weaken alliances, continued collaboration between government and industry remains essential.

The strategic imperative

Interoperability allows the Army, Navy, Marine Corps, Air Force and Space Force to function as one integrated team. It ensures that data gathered by an Army sensor can inform a naval strike or that an Air Force feed can guide a Space Force operation, all in seconds. Among NATO and allied partners, this same connectivity ensures that an attack on one member can trigger a fast, coordinated, data-driven response by all. That unity of action forms the backbone of deterrence.

Without true interoperability, even the most advanced technology can end up isolated. The challenge is compounded by aging systems, proprietary platforms and differing national standards. Sustained commitment to open architectures and shared standards is the only way to guarantee compatibility while still encouraging innovation.

The role of open standards

Open standards make real interoperability possible. Common interfaces like Ethernet or IP networking allow systems built by different nations or vendors to talk to one another. When governments and companies collaborate on open frameworks instead of rigid specifications, innovation can thrive without sacrificing integration.

History has demonstrated that rigid design rules can slow progress and limit creativity, and it’s critical we now find the right balance. That means defining what interoperability requires while giving end users the freedom to achieve it in flexible ways. The DoD’s emphasis on modular, open architectures allows industry to innovate within shared boundaries, keeping future systems adaptable, affordable and compatible across domains and partners.

Security at the core

Interoperability depends on trust, and trust relies on security. Seamless data sharing among allies must be matched with strong protection for classified and mission-critical information, whether that data is moving across networks or stored locally.

Information stored on devices, vehicles or sensors, also known as data at rest, must be encrypted to prevent exploitation if it is captured or lost. Strong encryption ensures that even if adversaries access the hardware, the information remains unreadable. The loss of unprotected systems has repeatedly exposed vulnerabilities, reinforcing the need for consistent data at rest safeguards across all platforms.

The rise of quantum computing only heightens this concern. As processing power increases, current encryption methods will become outdated. Shifting to quantum-resistant encryption must be treated as a defense priority to secure joint and coalition data for decades to come.

Lessons from past operations

Past crises have highlighted how incompatible systems can cripple coordination. During Hurricane Katrina, for example, first responders struggled to communicate because their radios could not connect. The same issue has surfaced in combat, where differing waveforms or encryption standards limited coordination among U.S. services and allies.

The defense community has since made major strides, developing interoperable waveforms, software-defined radios and shared communications frameworks. But designing systems to be interoperable from the outset, rather than retrofitting them later, remains crucial. Building interoperability in from day one saves time, lowers cost and enhances readiness.

The rise of machine-to-machine communication

As the tempo of warfare increases, human decision-making alone cannot keep up with the speed of threats. Machine-to-machine communication, powered by artificial intelligence and machine learning, is becoming a decisive edge. AI-driven systems can identify, classify and respond to threats such as hypersonic missiles within milliseconds, long before a human could react.

These capabilities depend on smooth, standardized data flow across domains and nations. For AI systems to function effectively, they must exchange structured, machine-readable data through shared architectures. Distributed intelligence lets each platform make informed local decisions even if communications are jammed, preserving operational effectiveness in contested environments.

Cloud and hybrid architectures

Cloud and hybrid computing models are reshaping how militaries handle information. The Space Development Agency’s growing network of low Earth orbit satellites is enabling high bandwidth, global connectivity. Yet sending vast amounts of raw data from the field to distant cloud servers is not always practical or secure.

Processing data closer to its source, at the tactical edge, strikes the right balance. By combining local processing with cloud-based analytics, warfighters gain the agility, security and resilience required for modern operations. This approach also minimizes latency, ensuring decisions can be made in real time when every second matters.

A call to action

To maintain an edge over near-peer rivals, the United States and its allies must double down on open, secure and interoperable systems. Interoperability should be built into every new platform’s design, not treated as an afterthought. The DoD can further this goal by enforcing standards that require seamless communication across services and allied networks, including baseline requirements for data encryption at rest.

Adopting quantum-safe encryption should also remain a top priority to safeguard coalition systems against emerging threats. Ongoing collaboration between allies is equally critical, not only to harmonize technical standards, but to align operational procedures and shared security practices.

Government and industry must continue working side by side. The speed of technological change demands partnerships that can turn innovation into fielded capability quickly. Open, modular architectures will ensure defense systems evolve with advances in AI, networking and computing, while staying interoperable across generations of hardware and software.

Most importantly, interoperability should be viewed as a lasting strategic advantage, not just a technical goal. The nations that can connect, coordinate and act faster than their adversaries will maintain a strategic advantage. The continued leadership of the DoD and allied defense organizations in advancing secure, interoperable and adaptable systems will keep the United States and its partners ahead of near-peer competitors for decades to come.

 

Ray Munoz is the chief executive officer of Spectra Defense Technologies and a veteran of the United States Navy.

Cory Grosklags is the chief commercial officer of Spectra Defense Technologies.

The post Interoperability and standardization: Cornerstones of coalition readiness first appeared on Federal News Network.

© III Marine Expeditionary Force //Cpl. William Hester