The Trump Administration continues to focus on procurement reform aimed at increasing acquisition efficiency, including through the “Revolutionary FAR Overhaul” and reinforced preference for commercial products. Now, with the House Armed Services Committee (HASC) introducing a defense procurement reform bill, it is clear that HASC leadership is also targeting increased efficiency as a key goal of the Fiscal Year 2026 National Defense Authorization Act (FY26 NDAA). We cover the bill’s key proposals and their potential impact on defense contractors below.

Introduced on June 9, 2025, the “Streamlining Procurement for Effective Execution and Delivery (SPEED) Act” focuses on five pillars of reform:

  1. Aligning Acquisition to Warfighter Priorities and Operational Outcomes
  2. Accelerating the Requirements Process
  3. Striking a Balance Between Regulation and Efficiency
  4. Strengthening the Defense Industrial Base and Leveraging Commercial Innovation
  5. Developing a Mission-Oriented Defense Acquisition Workforce

While the first two pillars focus on stages of the procurement lifecycle that precede the solicitation, the Act contains several proposed changes that could impact defense contractors. We discuss key changes below.

Reduction or Elimination of CAS

Section 301 directs the Secretary of Defense to identify actions necessary to reduce or eliminate Cost Accounting Standards (CAS) compliance requirements in Department of Defense (“DoD”) contracts, and to replace them with the Generally Accepted Accounting Principles (GAAP). GAAP is a private-sector accounting standard published by the Financial Accounting Standards Board (FASB) and is the default accounting standard used by private companies in the U.S.

Notably, Section 301 does not amend 41 U.S.C. § 1502, which grants the CAS Board exclusive authority to prescribe, amend, and rescind CAS. Instead, Section 301 requires the Secretary of Defense to evaluate the actions needed to replace CAS with GAAP and submit a report to Congress with findings and recommendations. Accordingly, Section 301 represents only one step towards eliminating CAS.

Review of Commercial Buying Practices

Section 302 directs the Secretary of Defense to review DoD’s commercial buying practices, including implementation of the Federal Acquisition Streamlining Act. Among other things, the review must include a report on the extent to which commercial contracts include terms that should not apply to FAR Part 12.

This focus on maximizing efficient use of commercial procurements is consistent with President Trump’s Executive Order, “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts,” which we previously covered. With both the President and the HASC focused on reinforcing commercial preferences, contractors able to demonstrate the commerciality of their products and services could eventually see new awards with reduced regulatory requirements.

Adjustments to Certain Acquisition Thresholds

Section 303 increases several existing statutory dollar thresholds under Title 10.

  • DoD dollar thresholds for Major Programs under 10 U.S.C. § 3041 would more than double, with the thresholds increasing from $115 million to $275 million for research, development, testing, and evaluation, and from $540 million to $1.3 billion for eventual total expenditures.
  • The justification and approval thresholds for other than competitive procedures under 10 U.S.C. § 3204(e)(1), which determine the level of approval required for non-competitive procedures, including when property or services are available from only one source or there is unusual and compelling urgency, would increase more than ten-fold:
    • The range for competition advocate approval would increase from contracts between $500,000 and $10 million to contracts between $5 million and $100 million;
    • The range for head of procuring activity approval would increase from contracts between $10 million and $75 million to contracts between $100 million and $500 million; and
    • The range for senior procurement executive (SPE) approval would increase from contracts exceeding $75 million to contracts exceeding $500 million.
  • The Truth in Negotiations Act (TINA) threshold for requiring certified cost or pricing data under 10 U.S.C. § 3702(a) would increase from $2 million to $10 million.
  • A DoD-specific simplified acquisition threshold (SAT) of $10 million would be established under 10 U.S.C. § 3751(a).
  • The threshold for the use of simplified acquisition procedures under 10 U.S.C. § 3205(a)(2) would also be increased: those procedures currently apply to commercial contracts valued between the existing SAT of $250,000 and $5 million; the SPEED Act would set the floor at the new DoD-specific SAT ($10 million) and the ceiling at $50 million.

The goal of these increased thresholds is to increase contracting officer authority to use simplified and non-competitive acquisition procedures, and also reduce the number of contracts subject to TINA.

Expanding Other Transaction Authority

Section 402 would expand DoD’s other transaction agreement (OTA) prototype authority under 10 U.S.C. § 4022. Such authority would no longer be limited to situations where: (A) at least one nontraditional defense contractor or nonprofit research institution is significantly participating in the prototype project; (B) all significant participants other than the Government are small businesses or nontraditional defense contractors; (C) at least one-third of the total cost of the project is to be paid by sources other than the Government; or (D) the SPE makes a written determination of exceptional circumstances justifying the use of the authority.

If enacted, this amendment would mean that DoD could issue prototype OTAs to traditional defense contractors within the defense industrial base without seeking separate funding or SPE justification.

Congressional Oversight of Acquisition Workforce

Two provisions may signal interest by HASC in maintaining congressional oversight over DoD’s acquisition workforce:

  • Section 502 requires the Comptroller General to examine the composition and capabilities of DoD’s acquisition workforce, including, among other things, any “impediments to members of the acquisition workforce receiving training and education.”
  • Section 503 instructs the Comptroller General to review DoD’s workforce education, training, experience, and development including, among other things, recommendations to improve education, training, and career development programs offered by DoD for members of the acquisition workforce.

These provisions are consistent with the Act’s overall focus on empowering the defense acquisition workforce. President Trump’s Revolutionary FAR Overhaul similarly seeks to empower the acquisition workforce by reducing mandatory regulatory requirements and allowing contracting officers to exercise increased discretion. An acquisition workforce equipped with increased discretion and training may provide an opportunity for creative solutions to complex problems. Nevertheless, risk-averse contracting officers may revert to FAR-based terms even where they are not required.

Next Steps for the FY26 NDAA

The SPEED Act overlaps in many key respects with the FoRGED Act introduced by the Senate Armed Services Committee (SASC) in December 2024, which will likely form the basis for the Senate’s version of the FY26 NDAA. The resulting House and Senate versions of the FY26 NDAA will need to be reconciled through the conference process, in which the SASC and HASC staffs negotiate the final bill. Contractors with views on key issues contained within the SPEED Act or the FoRGED Act have a window of opportunity to provide their input.

Covington’s Government Contracts and Public Policy practices will continue to track the development of the FY26 NDAA and related procurement reform efforts.

Photo of Peter B. Hutt II Peter B. Hutt II

Peter Hutt represents government contractors in False Claims Act and fraud matters, and accounting, cost, and pricing disputes and counseling matters.

Peter is a leading False Claims Act lawyer in the government contracts arena. He has represented contractors for 35 years in matters…

Peter Hutt represents government contractors in False Claims Act and fraud matters, and accounting, cost, and pricing disputes and counseling matters.

Peter is a leading False Claims Act lawyer in the government contracts arena. He has represented contractors for 35 years in matters alleging cybersecurity noncompliance; cost mischarging; CAS violations; quality assurance deficiencies; substandard products and services; defective pricing; health care fraud; price reduction issues; inadequate subcontractor oversight; and reverse false claims. He has testified before Congress concerning the False Claims Act, and is a thought leader in the field. Peter also conducts internal investigations and advises clients on whether and how to make disclosures of potential wrongdoing.

Peter also represents contractors and grantees in accounting, cost, and pricing matters, and other contract and grant matters. He has addressed issues concerning pensions and post-retirement benefits; TINA and defective pricing; alleged CAS violations; cost accounting practice changes; alleged charging of unallowable and expressly unallowable costs; terminations; contract financing; price reduction clause issues; subcontracting and supply chain compliance; specialty metals compliance; and small business and DBE compliance. He has litigated cost, accounting, and contract breach matters in the Court of Federal Claims and the ASBCA.

Peter is recognized for his work both in False Claims Act and government contract disputes by Chambers USA, which notes that “He is absolutely outstanding. He is thoughtful and client-focused.” Chambers also notes that “Peter’s judgment and problem solving ability is unique. He is a very good False Claims Act lawyer.”

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Photo of Stephanie Barna Stephanie Barna

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior…

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior leader on Capitol Hill and in the U.S. Department of Defense (DoD). Most recently, she was General Counsel of the Senate Armed Services Committee, where she was responsible for the annual $740 billion National Defense Authorization Act (NDAA). Additionally, she managed the Senate confirmation of three- and four-star military officers and civilians nominated by the President for appointment to senior political positions in DoD and the Department of Energy’s national security nuclear enterprise, and was the Committee’s lead for investigations.

Previously, as a senior executive in the Office of the Army General Counsel, Stephanie served as a legal advisor to three Army Secretaries. In 2014, Secretary of Defense Chuck Hagel appointed her to be the Principal Deputy Assistant Secretary of Defense for Manpower and Reserve Affairs. In that role, she was a principal advisor to the Secretary of Defense on all matters relating to civilian and military personnel, reserve integration, military community and family policy, and Total Force manpower and resources. Stephanie was later appointed by Secretary of Defense Jim Mattis to perform the duties of the Under Secretary of Defense for Personnel and Readiness, responsible for programs and funding of more than $35 billion.

Stephanie was also previously the Deputy General Counsel for Operations and Personnel in the Office of the Army General Counsel. She led a team of senior lawyers in resolving the full spectrum of issues arising from Army wartime operations and the life cycle of Army military and civilian personnel. Stephanie was also a personal advisor to the Army Secretary on his institutional reorganization and business transformation initiatives and acted for the Secretary in investigating irregularities in fielding of the Multiple Launch Rocket System and classified contracts. She also played a key role in a number of high-profile personnel investigations, including the WikiLeaks breach. Prior to her appointment as Deputy, she was Associate Deputy General Counsel (Operations and Personnel) and Acting Deputy General Counsel.

Stephanie is a retired Colonel in the U.S. Army and served in the U.S. Army Judge Advocate General’s Corps as an Assistant to the General Counsel, Office of the Army General Counsel; Deputy Staff Judge Advocate, U.S. Army Special Forces Command (Airborne); Special Assistant to the Assistant Secretary of the Army (Manpower & Reserve Affairs); and General Law Attorney, Administrative Law Division.

Stephanie was selected by the National Academy of Public Administration for inclusion in its 2022 Class of Academy Fellows, in recognition of her years of public administration service and expertise.

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Photo of Peter Terenzio Peter Terenzio

Peter Terenzio routinely advises clients regarding the multiple regulatory regimes that apply to federal contractors. His practice also extends outside of traditional government procurement contracts to include federal grants and Other Transaction Authority (OTA) research, prototype, and production agreements.

Among other things, Peter…

Peter Terenzio routinely advises clients regarding the multiple regulatory regimes that apply to federal contractors. His practice also extends outside of traditional government procurement contracts to include federal grants and Other Transaction Authority (OTA) research, prototype, and production agreements.

Among other things, Peter regularly helps clients with the constantly evolving domestic-preference requirements promulgated pursuant to various federal laws, including, for example, the Buy American Act (BAA) and Trade Agreements Act (TAA), but also including more recently the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA). He also has particular experience with helping clients navigate the complicated prevailing wage rules imposed by the Davis Bacon Act (DBA) and Service Contact Act (SCA). Peter has used this regulatory knowledge to help clients negotiate the specifics of their contracts, grants, and OTA agreements.

Peter also has significant experience with the disputes that may arise during the execution of government prime contracts. He knows how to work closely with the client’s subject matter experts to prepare and submit detailed requests for equitable adjustment (REAs) in order to secure much-needed price or schedule relief. Where necessary, he has assisted clients with converting their REAs into certified claims, and when disputes cannot be resolved at the Contracting Officer level, he has helped clients vindicate their contractual rights in litigation before the Boards of Contract Appeals.

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Photo of Homer La Rue Homer La Rue

Homer La Rue is an associate in the firm’s Washington, DC office and a member of the Government Contracts Practice Group. Drawing on his experience in industry and at the U.S. Department of Defense (DOD), Homer advises a diverse mix of clients on…

Homer La Rue is an associate in the firm’s Washington, DC office and a member of the Government Contracts Practice Group. Drawing on his experience in industry and at the U.S. Department of Defense (DOD), Homer advises a diverse mix of clients on a broad range of matters related to government contracting, including: complex regulatory compliance matters, high-stakes investigations, enforcement actions, corporate transactions, and prime contractor / subcontractor disputes. Prior to joining the firm, Homer spent over a decade at the Defense Contract Management Agency (DCMA) working in support of key Defense and Intelligence Community buying commands. As a warranted Corporate Administrative Contracting Officer (CACO), Homer’s duties included a wide range of enterprise-wide contract administration and audit resolution functions.

Homer also maintains an active pro bono practice focused on indigent criminal defense.

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Ethan Syster

Ethan Syster is an associate in the firm’s Washington, DC Office. He is a member of the Government Contracts Practice Group. Ethan assists clients with a broad range of issues across all stages of the public procurement process.

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