HASC FY26 NDAA: Acquisition Reform
An Early look of the HASC NDAA ahead of Markup.
The House Armed Services Committee (HASC) released their draft FY26 NDAA. It includes the SPEED Act that the Chairman and Ranking Member published last month and much more. The markup will be Tue Jul 15 at 1000. We dive into the acquisition and related sections for your awareness.
Full Text of the Chairman’s Mark of H.R. 3838
Major Takeaways
The HASC in a bi-partisan manner is fed up with Defense Acquisition and looking for transformational change. If you didn’t pick up on the SPEED Act that includes a RAPID directorate, streamlining the bureaucracy to accelerate delivery timelines is the primary objective. Similar to the SASC’s FORGED Act, the HASC seeks to drive reforms in:
PEO Portfolio Management
Commercial Acquisition
Requirements (JCIDS)
Deregulation - Raising Acquisition and Contracting Thresholds
Contracting
Defense Industrial Base
Acquisition Workforce and Training
Many of the defense acquisition reforms align with recent Executive Orders.
Acquisition Policy
801—Multiyear Procurement Authority for Covered Weapon Systems
DoD enter one or more multi-year procurement contracts if full rate production decision AND projected full rate production for 5+ years for programs > $1B.
802—Assumption of Uninsurable Risk on Certain Contracts
Ensure a contractor is not required to assume risk of loss for work under a contract if due to classified nature the contractor is unable to obtain insurance or process a claim for loss of work.
1801—Alignment of the Defense Acquisition System with the Needs of Members of the Armed Forces
Updates Title X to rewrite the purpose of the defense acquisition system and shall issue guidance on the activities, best value, innovation, risk taking, training, etc.
Portfolio Management
1802—Program Executive Officer Responsibilities
Codifies role of PEO into new statute 10 USC 1732 and empowers PEOs for oversight of program plans, budget, development, production, and sustainment. They would be able to adjust requirements other than KPPs. Could terminate capability development. Service Secretaries shall ensure personnel assigned under each PEO to include contracting, cost estimation, financial management, product support, program management, engineering, and developmental T&E.
1805—Major Capability Activity Areas (MCAA) and Pathfinder Programs
Develop plan to reorganize relevant defense budget materials to be organized around MCAAs per the PPBE Reform Commission to more effectively facilitate the development, fielding, operation, sustainment, and modernization of DoD capabilities or activities. Designate at least two PEOs to be pathfinders empowered with some transfer authority (no new starts, no terminations, and may not exceed 40%).
CITI 1834—Bridging Operational Objectives and Support for Transition (BOOST) Program
This section would require the DIU Director to establish a program to support the transition of technologies into established capability development and procurement activities of the military services. The BOOST program would directly support PMs and PEOs by matching identified technologies with program requirements and serving as an on-ramp to integration of the needed technology into programs of record. The committee also intends that the BOOST program would create an active feedback loop between the program manager or PEO and the innovator, which would inform and guide prototyping efforts in the context of an existing requirement in an established program.
1013—Navy Senior Technical Authority
Aligns each Senior Technical Authority (STA) in the Navy under the authority of a PEO and requires that any STA-imposed requirement be directly tied to a key performance parameter or key system attribute, ensuring technical support contributes to the timely delivery of capabilities.
1803—Product Support Manager Responsibilities and Requirements
Establishes a new section (section 1733) in chapter 87 of title 10 to elevate and strengthen the role of a product support manager as the individual responsible for managing the support functions required to field and maintain the readiness and operational capability of major weapon systems in support of the program manager’s life cycle management responsibilities. Also makes further amendments to chapter 87 to establish the product support manager as a critical acquisition position and enact minimum education, training, and experience requirements. PSMs of MDAPs to accept a minimum assignment NLT four years.
Commercial Acquisition
1822—Clarification of Conditions for Payments for Commercial Products and Commercial Services
Streamlines government contracting and payments, particularly clarifying advance payments for services; and authorizing advance payments for certain content and technology. These changes aim to make it easier for government agencies to acquire commercial services and technology by removing some of the restrictions on advance payments, while still emphasizing the importance of protecting the government's interests through sound payment terms and security measures.
1823—Alternative Capability-Based Pricing
Contracts authority to use alternative capability-based analysis to determine whether a proposed price or fee for a commercial solution is fair and reasonable.
1825—Review of Commercial Buying Practices
Comprehensive review of DOD’s approach to commercial buying and FASA implementation.
CITI 1833—Requirements for MOSA and Modifications to Rights in Technical Data
This section would amend 10 USC chapter 327 to streamline and simplify the requirements for a modular open system approach to the design and development of a major weapon system. This section would also make conforming amendments to 10 USC 3771 related to IP and data rights in modular system interfaces
Requirements
1811—Joint Requirements Council
Transform JROC to a Joint Requirements Council (JRC) to refocus the JROC from document validation to joint operational problems.
1812—Establishment of the Requirements, Acquisition, and Programming Integration Directorate (RAPID)
Creates RAPID with VCJCS and CAPE as co-chairs and members from CCMDs, MEIA, PEOs, JRAC based on joint operational problems. RAPID would provide prioritized policy and resourcing recommendations to the DEPSECDEF to ensure the Armed Forces are equipped with the capabilities necessary to operate effectively, to address evolving threats, and to maintain the military advantage of the U.S. in the most cost-effective manner practicable.
1813—Establishment of the Mission Engineering and Integration Activity (MEIA)
Creates MEIA to lead cross-services analysis to address joint operational problems per RAPID. The MEIA would lead cross-service activities to develop, identify, and analyze integrated technology solutions to address joint operational problems, and would provide analysis and recommendations to support the Requirements, Acquisition, and Programming Integration Directorate in the evaluation of joint capability requirements.
Deregulation
1821—Adjustments to Certain Acquisition Thresholds
Major Defense Acquisition Programs 10 USC 4201
RDT&E: From $300M FY90 CY to $1B FY24 CY
Procurement: From $1.8B FY90 CY to $5.5B FY24 CY
Major Programs 10 USC 3041v (aka ACAT II programs)
RDT&E: From $115M FY90 CY to $275M FY24 CY
Procurement: From $540M FY90 CY to $1.3B FY24 CY
Other Than Competitive Procedures 10 USC 3204
At the contracting officer level, from up to $10M to $100M ceiling
At the head of procuring activity from $10M -$75M to $100M-$500M
Senior Procurement Executive (or USD(A&S) for 4th estate) >$500M
Simplified Acquisition Threshold 10 USC 3205
Shifting simplified acquisition threshold from $5M to $10M
Simplified Acquisition Threshold 10 USC 3571(a)
$10M and shift Micro-purchase Threshold from $10K to $100K
Multiyear Contracts 10 USC 3501
Agency head ceiling from $500M to $1B
Contract cancellation ceiling from $100M to $150M
Economic Order Quantity from $20M to $50M
Submit Cost or Pricing Data 10 USC 3702(a)
June 30, 2018 to June 30, 2026
Those after June 2026 $2M to $10M
Those before June 2026 $750K to $2M
Subcontracts: $2M to $10M
1824—Matters Related to Cost Accounting Standards
Reduce or eliminate requirements for compliance with Cost Accounting Standards (CAS) in cases where Generally Accepted Accounting Principles (GAAP) would serve as a viable commercial accounting standards and system.
1804—Amendments to Life-Cycle Management and Product Support
Updates statute on programs that require lifecycle sustainment plans, their scope, and the role of product support managers. Removes the statutory requirement for sustainment reviews every five years.
Contracting Reforms
811—Additional Amendments Related to UCAs
Amends 10 USC 3374 on allowable profit – when substantial work before final price negotiation, profit on Undefinitized Contract Action (UCA) include if after award. 10 USC 3804 progress payments, UCA not definitized within 180 days, CO shall increase rate of payment by 5%. Repeals 80% progress payment limit for un-definitized contracts.
813—Amendment to Procurement of Services Data Analysis and Requirements Validation
Amends 10 USC 4506 to eliminate internal notification requirements related to the use of a services bridge contract where inadequate planning prevented the timely award.
814—Changes to Reference Documents
Requires that when a contract references a document, the specific version or date of the referenced document shall be identified if the document and any associated performance or compliance requirements of the contractor are subject to change.
816—GAO Bid Protest Process Enhancement
Allow contracting officers to file a claim against an incumbent contactor for a recompete who files a GAO protest and awarded a bridge contract or extension, and GAO dismisses protest for lack of reasonable legal or factual basis.
1831—Amendment to Other Transaction Authority
Amends 10 USC 4022 to remove limitations on use of Other Transaction Authority on the basis of how a firm is categorized. With these limitations removed, a covered official would assess demonstrated performance and the alignment of capability with needs of the DoD as the primary determinants of the financial structure of an award.
1832—Data-As-A-Service Solutions for Weapon System Contracts
Amends chapter 323 of title 10 by adding a new section that would require SECDEF to ensure that contract negotiations for weapons system consider, to the maximum extent practicable, the negotiation of data-as-a-service solutions and associated license agreements to facilitate access to certain information necessary for the Department to maintain a core logistics capability.
GAO Review of Use of Data-Driven Procurement Solutions by the DoD
GAO review the Department's use of data-driven procurement tools, including AI-based analytics, to assist in auditing activities, fraud detection, identification of procurement inefficiencies, supplier management, compliance measures, and contracting activities, while identifying cost-saving opportunities and best practices for modernizing defense acquisitions.
Justification for Change in Contracting Procedures
Report on all contracts awarded in the last two years at a value >$100M that were changed from FAR Part 12 (Commercial) to FAR Part 15 (Negotiated) after contractors provided their best and final offers.
Defense Industrial Base
833—Supply Chain Illumination Incentives
Establish minimum qualifying criteria for supply chain illumination for contractors, published in Federal Registry by Apr 2026. Contractors with nonconforming item to immediately take corrective action.
834—Strategy to Eliminate Sourcing of Optical Glass from Certain Nations
Eliminate optical glass by Jan 2030 from China, Russia, Belarus, North Korea, and Iran.
835—Voluntary Registration of Compliance with Covered Sourcing Requirements for Covered Products
In 180 days establish publicly available online repository containing info on products complying with sourcing requirements to encourage offerors to register covered products and use supply chain illumination tools per Section 833.
842—Applicability of the Prohibition on Acquiring Certain Metal Products
Prohibit acquisition of materials mined, refined, or separated in Russia, North Korea, China, or Iran after Jan 2027.
851—Permanent Extension of Phase Flexibility and Inclusion of STTR
Makes SBIR Phase II permanent and extend authority to STTR
852—Authority to Make Additional Sequential Phase II Awards Under the SBIR/STTR
Authorize DoD from FY26-29 to award one additional sequential Phase II SBIR or STTR award to a small business that received an additional Phase II for continued work.
CITI 1532—Pilot for Data-Enabled Fleet Maintenance
Requires the Secretaries of the Army, Navy, and Air Force to establish pilot programs to use commercially available artificial intelligence technologies to improve the maintenance of ground vehicles in each military service's inventory.
CITI 1533—Generative AI for National Defense
Authorizes the DoD to create up to 12 generative AI lines of effort. Evaluate how genAI can enhance the efficiency and mission effectiveness of battle damage assessment, human-machine teaming, cybersecurity, mission analysis, order of battle, mission planning, intelligence collection and analysis, and any other areas the CJCS or CCMDs determine appropriate.
1841—Amendments to the Procurement Technical Assistance Program
Amends chapter 388 of title 10 to enhance the purpose of the Procurement Technical Assistance Cooperative Agreement Program.
1842—Defense Industrial Resilience Consortium
Establishes the Defense Industrial Resilience Consortium (IRC) under the authority of SECDEF to enhance the resilience, innovation, and competitiveness of the U.S. defense industrial base. The IRC would serve as a collaborative forum for cutting-edge manufacturers, technology developers, supply chain stakeholders, and research institutions to address critical challenges related to parts obsolescence, diminishing manufacturing and sources of supply, and single-source dependencies within the defense industrial base. The consortium aims to tackle such key challenges in the Department's supply chain regarding integrating products from advanced manufacturing processes. This includes improving access to advanced manufacturers within crucial sectors of the industrial base, such as the maritime industrial base.
1843—Qualification, Acceptance, and Supply Chain Management of Products Manufactured Using Advanced Manufacturing
The Defense Industrial Resilience Consortium to develop recommendations for improving DoD policies and procedures for the qualification, acceptance, and management of the supply chains of products manufactured using advanced manufacturing. Also requires the Secretary to NLT one year from this Act’s enactment submit a report on the recommendations.
1844—Report on Surge Capacity in the Defense Industrial Base
Requires the ASD Industrial Base Policy and the DPCAP Director to NLT 1 Mar 26 jointly submit a report to the congressional defense committees on the regulations or policies that disincentivize DoD contractors from maintaining or investing in surge capacity.
Assured Access to Microelectronics for Defense-Critical Technologies
ASD Industrial Base Policy, in coordination with the USD(A&S), to brief Congress on investments and initiatives to strengthen the Department's efforts to support the industrial base in buttressing the U.S. ability to source legacy semiconductors and to develop domestic microelectronics packaging capability.
Directed-Energy Industrial Base
Develop a strategy to grow and strengthen the Directed Energy Weapon (DEW) industrial base. Such a strategy should include identification of anticipated needs for DEW capabilities; opportunities to accelerate the transition of DEW technology into programs of record; approaches to stabilize funding through long-term DEW investment strategies; and avenues to promote international partnerships.
Acquisition Workforce
821—Improvements to Public-Private Talent Exchange
Amends 10 USC 1599g to limit the applicability of the restrictions on former employees of the executive branch to cases in which a private sector employee participating in the public-private talent exchange has performed inherently governmental work at the direct, written request of SECDEF.
822—Development of the Advanced Manufacturing Workforce
Requires the establishment of a working group to address workforce shortages in advanced manufacturing in the defense industrial base. SECDEF would then be required to submit a report to Congress on the recommendations developed by the working group, including recommendations on the establishment of public-private partnerships to develop the advanced manufacturing workforce and identify incentives for both government and industry to enable the success of such partnerships.
823—Development and Employment of Members of the Defense Civilian Training Corps
Requires the USD(A&S) to establish a program to appoint members of the Defense Civilian Training Corps to Department civil service positions, if existing career and development programs do not already achieve this objective. The USD(A&S) would have the authority to pay the basic pay of an individual appointed under this section with amounts from the Defense Acquisition Workforce Development Account during a one-year initial appointment term which is renewable by not more than one year.
824—Comptroller General Review of Matters Relating to Individuals Assigned to a Critical Acquisition Position
GAO to conduct an assessment of the efficacy of career development policies for the defense acquisition workforce, including those policies related to the progression of an individual to a critical acquisition position.
825—Comptroller General Review of the Management, Training, and Development of the Acquisition Workforce
GAO to examine the management, training, and development of the Department’s acquisition workforce, including an assessment of the current processes and authorities with the objective of fostering an acquisition workforce that can optimally meet mission requirements.
826—Report on Strengthening the Defense Acquisition University
The Director of the Acquisition Innovation Research Center shall conduct a comprehensive assessment of DAU, with a focus on enhancing its operations and performance in training and developing the defense acquisition workforce.
1601—Acquisition Career Path in the Space Force
Several proposed changes to the Space Force's officer training and organizational structure to enhance the role of acquisition officers and ensure a well-rounded Space Force. While the Space Force establishes warfighting doctrine and new training structures, it should shall also develop acquisition officers who possess both operational and acquisition experience, particularly given the unique technical nature of space missions and the value of assets involved.
Development of the Advanced Manufacturing Workforce
Report include training, education, and career development programs for people with disabilities for careers in advanced manufacturing.
Reforming the PPBE Process
Report to Congress on how the DoD would develop a framework to integrate PPBE requirements and resourcing decisions with real-time, scenario-based information. Ensure data interoperability using APIs to enable secure commercial software to interact with the data. Increase integration of Global Force Management, the PPBE process, and JCIDS to enhance strategic prioritization, and examine the role of combatant commands in the PPBE process.
Cyber, IT, and Innovation Subcommittee
211—Modification to Authority to Award Prizes for Advanced Technology Achievements
This section would amend the authority to operate prize competitions to enable the Secretary of Defense to delegate the authority and increases the potential value of the prize challenges.
212—Extension of Authority for Assignment to DARPA of Private Sector Personnel with Critical Research and Development Expertise
This section would extend the authority for the Defense Advanced Research Projects Agency to temporarily assign employees of nontraditional defense contractors to the Agency by five years.
213—Review and Alignment of Standards, Guidance, and Policies Relating to Digital Engineering
This section would require the Secretaries of the military departments, in coordination with the USD(R&E), USD(A&S), and DOT&E to conduct a review of the reference architectures, standards, and best practices for the use of digital engineering tools at all stages of program design, development, and testing.
214—Application of Software Innovation and Data Management Plans to Modernize Test and Evaluation Infrastructure
This section would require the Director, Test Resource Management Center, in coordination with the DIU Director, the DOT&E, and the military services, to develop and maintain a digital test and evaluation environment for developmental and operational testing. The section would also require program managers to submit data management plans prior to executing a test and evaluation event. Finally, this section would establish a pilot program to determine how commercial software could accelerate and improve testing for priority mission areas.
901—Modification to Authorities of the USD(R&E)
This section would expand the authorities of the Under Secretary of Research and Engineering.
902—Additional Authorities for the Office of Strategic Capital
This section would allow the Office of Strategic Capital to charge fees on their transactions.
912—Authority to Establish Regional Outreach Centers for DIU
The section provides statutory authority for the DIU regional outreach centers which include domestic or international locations. Provide Congress a briefing detailing plans to stand up at least two additional OnRamp Hubs in FY26, including planned locations for such Hubs and the necessary personnel and resourcing.
1501—Accountability of the Authorization to Operate (ATO) Processes
This section would add additional reporting requirements to the Authority to Operate (ATO) process and streamline timelines for approving an ATO.
1531—AI/ML Security in the DoD
This section would create a requirement for a software bill of materials for AI.
We’ll provide a more comprehensive analysis when this takes shape following the HASC Markup or House approved NDAA bill (Sept).
The SASC completed markup of their FY26 NDAA bill and voted 26-1 to advance to the full Senate for consideration the last week in July. The SASC published an Executive Summary. The NDAA includes many elements of the FORGED Act.
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Reading through the PEO empowerment section and the Navy tech authority section, makes me think that OPNAV resource sponsors and SYSCOMs will not be happy.
Will be interesting to see how the SPEED and FORGED Acts get harmonized in conference, and eventually into Title 10.