Congressional leaders removed language delaying a ban on hemp THC from a spending bill released this week, complicating the picture for CBD treatments promised by President Trump.
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 DoDโs decision to launch this new audit signals that this 40-year-old small business development program is teetering further on the edge.
โItโs not a death knell, but itโs absolutely going to leave a mark. Itโs absolutely going to hinder our ability to bring some of that new technology, that new manufacturing capability to the federal marketplace. Thatโs probably my bigger concern,โ 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. โWeโre 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.โ
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 agencyโs, 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 itโs wrought with fraud.
We are taking a sledgehammer to the oldest DEI program in the federal governmentโthe 8(a) program. pic.twitter.com/c9iH8gcqG7
โProviding 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 hereโs the worst part, in many, many instances, these socially disadvantaged businesses, they donโt 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,โ Hegseth said. โEffective immediately, Iโm ordering a line-by-line review of every small business sole source, 8(a) contract that is over $20 million, and weโll 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, itโs going to be 10 times tougher.โ
DoDโs audit will include two phases. Hegseth said if a contract doesnโt make meet the DoDโs goal of increasing lethality, they will terminate it.
โWe have no room in our budget for wasteful DEI contracts that donโt help us win wars, period, full stop. Second, weโre doing away with these pass through schemes. Weโll 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,โ he said. โThis approach is, of course, not meant to hurt small businesses, and thatโs 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.โ
An email to DoD seeking more details about the audit and a timeline for the audit wasnโt returned.
Experts say Hegsethโs 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 doesnโt 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 arenโt 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 DoDโs audit is part of a concerted effort by the administration to undermine the 8(a) program.
โI 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,โ he said. โI think given what weโve seen with respect to the SBA audit, given what weโve 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.โ
DoDโs 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 counselโs 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.
โA 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 arenโt sure how the data is going to be used, or whoโs going to use it, or what theyโre looking at,โ he said. โFrom 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 whoโs 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.โ
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 itโs also a shared responsibility for oversight with the government.
โThere are several folks that have responsibility in there. The first one is the contracting officer. In some cases, theyโve 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?โ he said. โThey 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? Thatโs less common. But itโs part of your overall review.โ
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.
Defense Secretary Pete Hegseth stands outside the Pentagon during a welcome ceremony for Japanese Defense Minister Shinjirล Koizumi at the Pentagon, Thursday, Jan. 15, 2026 in Washington. (AP Photo/Kevin Wolf/)
A Florida lawmaker has introduced a new bill to legalize recreational marijuana that also aims to break up what he calls โmonopoliesโ in the state's current medical cannabis program by revising the business licensing structure.
The legislation, filed by Sen. Carlos Guillermo Smith (D), comes as the state Supreme Court reviews the constitutionality of proposed adult-use legalization initiative that an industry-funded campaign is seeking to place on the November ballot.
Under the new bill, adults over 21 years of age could legally possess up to four ounces of smokable marijuana or cannabis products containing up to 2,000 milligrams of THC. Medical cannabis patients would be allowed to grow up to six flowering plants at home for personal use.
Medical marijuana businesses that apply for adult-use licenses could begin selling cannabis for recreational purposes beginning next January.
โWe can't call ourselves the 'Free State of Florida' while continuing to criminalize cannabis use by grown adults,โ Smith told Marijuana Moment on Thursday, adding that a majority of voters approved a legalization initiative at the ballot in 2024 that wasn't enacted after โfalling just short of the state's arbitrary 60 percent threshold.โ
โThe message from voters was unmistakable: they want change,โ he said. โSenate Bill 1398 answers that call by legalizing cannabis for adults 21 and over in a safe, responsible, and tightly regulated way.โ
โIt also ends state-created medical marijuana monopolies by opening the market to small businesses and gives Floridians the freedom to cultivate their own cannabis if they choose,โ the senator said. โIt's time for the Legislature to stop ignoring the will of the people, end draconian criminalization laws, and finally deliver a fair, legal, and accountable cannabis system for Florida.โ
Under the new bill, current medical cannabis dispensariesโknown as medical marijuana treatment centers (MMTCs)โcould apply for retail licenses to sell recreational marijuana. And only cannabis purchased from licensed businesses would be legal to possess.
People with prior convictions for activity made legal under the bill would also be given an opportunity for resentencing and expungement.
The legislation stipulates marijuana and paraphernalia would be exempt from being taxedโbut only for medical cannabis patients and caregivers. Additionally, local governments would be able to levy a business tax on dispensing facilities.
There's been some criticism among advocates about the current medical marijuana system, specifically around the idea that vertical integration and licensing caps have effectively created a marijuana monopoly in the state.
In an attempt to address that issue, the bill would break out licensing categories. In contrast to the current system of seed-to-sale businesses, regulators would offer individual licenses to cultivate, manufacture, transport and sell cannabis products.
There isn't a specific mandate for an increase in the number of licensed marijuana businesses, but the measure would direct the state Department of Health to adopt rules on โprocedures and requirements forโฆthe registration and registration renewal of MMTCs.โ Depending on the outcome of that rulemaking process, new businesses could enter the market.
Also, registered cultivator and processors would be able to do wholesale transactions with other MMTCs, which is not currently permitted under Florida's medical cannabis program.
Theย legislationย would also task the Department of Agriculture and Consumer Services to adopt rules adopt โregulating the cultivation of marijuana by members of the public for their private use, including rules regulating the use of a cooperative model for cultivation.โ
Here's an overview of additional Florida marijuana developments:
In the background, a campaign is working against the clock to collect enough signatures to again put the question of adult-use marijuana legalization to voters at the ballot. But there have been complications.
The attorney general's office last monthย asked the state Supreme Court to review the constitutionality of the legalization initiative. The court accepted the request and set a schedule for state officials and the cannabis campaign to file briefs this month. Proponents of the measure have until January 12 to submit response briefs, then the opposition has until January 20 to reply.
In March, meanwhile, two Democratic members of Congress representing Florida asked the federal government to investigateย what they described as โpotentially unlawful diversionโ of millions in state Medicaid fundsย via a group with ties to Gov. Ron DeSantis (R). The money was used to fight against the 2024 citizen ballot initiative, vehemently opposed by the governor, that would have legalized marijuana for adults.
The lawmakers' letter followed allegations that a $10 million donation from a state legal settlement was improperly made to the Hope Florida Foundation, which later sent the money to two political nonprofits, which in turn sent $8.5 million to a campaign opposing Amendment 3.
โThere's a lot of different perspectives on on marijuana,โ DeSantis said. โIt should not be in our Constitution. If you feel strongly about it, you have elections for the legislature. Go back candidates that you believe will be able to deliver what your vision is on that.โ
โBut when you put these things in the Constitutionโand I think, I mean, the way they wrote, there's all kinds of things going on in here. I think it's going to have big time trouble getting through the Florida Supreme Court,โ he said.
While there's uncertainty around how the state's highest court will navigate the measure, a poll released last Februaryย showed overwhelming bipartisan voter support for the reformโwith 67 percent of Florida voters backing legalization, including 82 percent of Democrats, 66 percent of independents and 55 percent of Republicans.
This January, the Texas Department of State Health Services (DSHS) is considering a proposed ruling that could restrict the rights of Texans to access hemp products that they have come to rely on. Even after a similar ban was vetoed by the governor last year, new proposed regulations would effectively ban smokable hemp products entirely [โฆ]
Congressional appropriators are backing the Pentagonโs push to speed up weapons buying, but warn that speed โmust be factored alongside cost, performance, lethality and scalability.โ
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 โ roughly $8.4 billion above the White Houseโs fiscal 2026 request. House leaders plan to vote on the package later this week.ย
Congressional negotiators said they โstrongly supportโ the Defense Departmentโs acquisition reforms, but pushed back on the Pentagonโs efforts to seek additional authorities or changes to its budget and appropriations framework until it fixes its internal processes.ย
โRapid delivery of ineffective weapon systems at exorbitant cost will not serve the warfighter well,โ the appropriators wrote.ย
Lawmakers also raised concerns about joint requirements process reform and deep cuts to the departmentโs acquisition workforce that could jeopardize its ability to carry out Defense Secretary Pete Hegsethโs acquisition reform agenda.
At the very end of the document, Hegseth instructed the department to โimprove budget flexibility.โย
โWhere 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,โ Hegseth wrote. โAll actions will comply with applicable statutes, appropriations law, and procurement integrity requirements.โ
That language was likely to become a friction point with Congressional leaders, and now appropriators are saying that reforms laid out in Hegsethโs memo are โinternal in nature,โ and that the Defense Department needs to โdemonstrate progress on these internal procedures and administrative measuresโ before pursuing additional budget flexibility.
For instance, lawmakers said above-threshold transfer and reprogramming requests are often slowed because โa significant amount of the subcommitteesโ time is consumed by waiting for the department to provide requested additional details and justification for these requests.โ
โProviding this information alongside the submission of the request would accelerate consideration and create a nimbler process without altering existing authority or reprogramming thresholds,โ the appropriators said.
Congressional leaders urged the departmentโs comptroller and the servicesโ 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 Pentagonโs spending by moving away from the traditional โcolors of moneyโ 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 departmentโs inability to provide Congress with sufficient data showing the new approach would be more effective than traditional appropriation practices.
โTo 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,โ the appropriators said.
โConsideration 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,โ they added.
Armyโs 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 Armyโs โagile fundingโ 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.
โThe 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 โฆ 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,โ the appropriators said.
โThe House and Senate Defense Appropriations Subcommittees discourage the secretary of defense and the service secretaries from submitting future requests of this nature,โ 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 โ and Hegseth ordered the Joint Requirements Oversight Council (JROC), which oversees the process, to stop validating service-level requirements to the โmaximum extent permitted by law.โ
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.ย
Workforce is the linchpin of acquisition reform
DoD leaders have long warned that the depth of this administrationโs workforce cuts could cripple the departmentโs ability to execute Hegsethโs acquisition reforms.
Appropriators echoed those concerns, saying they are โconcerned that recent reductions to the acquisition workforce, the effects of which have yet to be realized, will negatively affect the Department of Defenseโs ability to achieve the initial speed and agility sought by this reform effort.โ
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 Hegsethโs and Congressโ 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.
Terry Gerton I want to start with Secretary Hegsethโs Arsenal of Freedom tour. Heโs taking his pitch on the road and recently spoke at the Lockheed Martin Air Force plant in Fort Worth, Texas. I know youโve been following this, the developments in defense procurement for quite a while. What are you hearing at this point?
Stephanie Kostro So Terry, this โArsenal of Freedomโ 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, โwe are in this together.โ 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 thatโs 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 donโt 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 weโre going to see a lot of legislative proposals come out of the department for this next round of the NDAA, the fiscal year โ27 NDAA. And I think weโll see things about acquisition workforce. Weโre 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 donโt 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. Thatโs 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 Iโm very excited to be part of this.
Terry Gerton Having the rules and authorities is only one piece. Whatโs 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 theyโre 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 donโt get into acquisition within the civil service because theyโre 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 donโt think theyโre there yet; I do think thereโs a path to get them there. Iโm 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 everyoneโs 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. Thereโs 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 โ based on the fact sheet from the White House, based from some interactions weโve had with administration officials โ our interpretation of it. That said, weโve 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, โhey, what questions for clarification would you like us to ask?โ And that list is growing. It is very long. Itโs 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 itโs not only a dividend payment, itโs executive compensation, but itโs 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, thereโs a limit if the company is underperforming, and all of this is predicated on the companyโs underperforming โ either cost overruns or schedule overruns. How do they explain this to folks? And is it really just about government contracts, or what if youโre 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. Thatโs 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, weโve 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 โ80s. Some of us who are listening may not remember it. They may not have been born yet, and thatโs 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 theyโre not spent by a certain time, because itโs one-year money at the department, it gets reprogramed away. Itโs 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 hasnโt 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 โ25. 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 Iโm hearing that theyโre trying really, really hard to avert a shutdown. And I think weโre going to get there. Iโm not a betting person, Terry, you know, Iโve talked about that in the past. And Iโm 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 lionโs 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 Iโm not surprised to hear that those are last, but I actually donโt think that indicates that theyโre 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.
FILE - Containers with Yang Ming Marine Transport Corporation, a Taiwanese container shipping company, are stacked up at the Port of Los Angeles with the the Long Beach International Gateway Bridge seen in the background on Wednesday, April 9, 2025 in Los Angeles. (AP Photo/Damian Dovarganes, File)