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Here are key acquisition reforms dropped from the 2026 NDAA
For months, congressional leaders have been working to deliver what they have described as “the most significant acquisition reforms in a generation.” But several key provisions — including measures on pricing transparency, oversight of major programs and Other Transaction Authorities — were ultimately dropped from the final version of the fiscal 2026 defense policy bill.
Both the House and Senate sought to close the loophole that allows companies to submit cost and pricing data after contract price is agreed upon.
The House version of the defense bill included a provision that would prohibit contractors from using cost or pricing data that is more than 30 days old as a defense against defective pricing allegations. Lawmakers backing the proposal said it would “empower the Defense Department to enter into contracts with sufficient pricing information.”
The Senate version of the bill contained a similar provision, but both proposals were removed from the final bill.
Instead, lawmakers directed DoD officials to examine whether late disclosures of cost or pricing data is a systemic problem and recommend ways to fix it.
“We note that the sweeps process under the Truth in Negotiations Act is a post-price agreement review requiring contractors to disclose any updated cost or pricing data in their possession for certification before contract award. We are aware of concerns that contractors may not be providing disclosures of cost or pricing data in their possession prior to a price agreement, opting to disclose such data only after agreement and immediately before contract award,” the lawmakers said in the joint explanatory statement. “This practice may result in upward adjustments to contract pricing without providing time for sufficient review due to factors such as the expiration of funds or urgent military needs for the products or services.”
House-led efforts to rein in cost overruns and strengthen oversight of major defense acquisition programs were also blocked during the conference process. The proposal would have accelerated the Pentagon’s reporting timeline, requiring the department to alert Congress within 30 days of any significant or critical cost overruns.
Also omitted is a House proposal to curb the outsized influence of tech giants over the cloud computing and artificial intelligence defense contracting spaces. The measure would have directed DoD to ensure there is a competitive award process when procuring cloud computing, data infrastructure and AI capabilities.
OTA reforms
While other transactions are intended to move innovative technologies out of the lab and into production, lawmakers said it remains unclear how often these agreements actually lead to follow-on production contracts.
But a House proposal that would have required Pentagon officials to provide a report on detailing use of follow-on agreements made under Other Transaction Authorities between 2022 and 2025 did not make it into the bill.
Instead, the Government Accountability Office was directed to conduct a review of how OTAs are used, including whether follow-on agreements deliver long-term capability.
The House also sought to require large OTA-funded projects to follow the same oversight rules as major defense acquisition programs, but that proposal was ultimately dropped from the final bill as well.
Small business and workforce provisions left out
A House provision aimed at expanding opportunities for veteran-owned small businesses was stripped from the bill — the measure would have required DoD to set annual contracting goals for small businesses owned by veterans. Moreover, it would have allowed the Pentagon to use noncompetitive procedures when awarding certain contracts to veterans.
“We note that veteran-owned small businesses are an important part of the defense industrial base and we encourage the Secretary of Defense to continue supporting veteran-owned small businesses,” the lawmakers said.
The House’s proposal to create a standardized Schedule V for reporting veteran employment and retention data across all DoD contracts and grants was also dropped from the final bill.
Another House provision would have required the department to ensure contractors are meeting the federal 7% disability hiring requirement.
Portfolio management reforms
While the move to a more portfolio-centric approach to acquisition is a feature of the defense policy bill, negotiators dropped a Senate proposal to establish “capstone requirements” for future portfolio acquisition executives. The shift in strategy for defining needs aimed to improve speed and innovation by revising programs in consultation with the Joint Requirements Oversight Council.
The House also tried to address DoD’s longstanding high turnover in key acquisition leadership roles by requiring a six-year minimum assignment for bosses formerly known as program executive officers, but the effort failed to advance. Instead, the final bill directs the Pentagon to brief Congress next year on “actions taken to strengthen stability in program management and tenure for critical acquisition positions.”
Legislators did endorse the spirit of the foiled measure.
“Stable, milestone-aligned tenure is essential to program continuity, accountability, and cost and schedule performance. Short-term assignments can incentivize short-sighted decision-making by officials who will not be present to manage long-term consequences,” they said. “Longer tenure strengthens accountability by ensuring that the same leaders who initiate major acquisition decisions remain responsible for their execution and outcomes. Frequent rotations disrupt long-term planning, erode institutional knowledge, and hinder the Department’s ability to deliver capabilities to the warfighter on time and within budget.”
The House passed the annual defense bill on Wednesday. The legislation now heads to the Senate.
The post Here are key acquisition reforms dropped from the 2026 NDAA first appeared on Federal News Network.
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