Federal Defense Acquisition Policy Update: Key Developments (July 1-16, 2025)

1. Executive Summary

The period of July 1-16, 2025, has witnessed a confluence of significant legislative and executive actions fundamentally reshaping federal defense acquisition. Key themes emerging from these developments include a concerted drive for accelerated procurement, deep-seated reforms to reduce bureaucratic hurdles, a strategic embrace of commercial innovation, and substantial investments in critical future capabilities. The passage of the One Big Beautiful Bill Act (OBBB Act) and the advancement of both House and Senate versions of the Fiscal Year 2026 National Defense Authorization Act (NDAA) underscore a strong bipartisan commitment to modernizing the defense industrial base and equipping the warfighter with cutting-edge technology. Concurrently, executive orders are translating into tangible regulatory changes, notably the Revolutionary Federal Acquisition Regulation (FAR) Overhaul (RFO) via Class Deviation 25-10, aimed at streamlining procurement processes. These developments collectively signal a dynamic shift towards a more agile, technologically advanced, and resilient defense acquisition ecosystem, presenting both opportunities and challenges for the defense industrial base.

II. Introduction

This report presents an expert-level analysis of the key federal defense acquisition policy developments that occurred within the first two weeks of July 2025. It aims to distill complex legislative and regulatory changes into actionable intelligence for stakeholders across the defense sector. The rapid pace of technological change and evolving geopolitical landscapes necessitate a defense acquisition system that is both efficient and innovative. The policies highlighted in this report represent a critical inflection point, reflecting a unified governmental effort to enhance national security through reformed procurement practices, targeted investments, and a modernized acquisition workforce. The swearing-in of Michael Duffey as Under Secretary of Defense for Acquisition and Sustainment on June 5, 2025, provides a new leadership context for these ongoing reforms, signaling a renewed focus on the execution of these broad policy directives.¹

III. Major Legislative Policy Developments

A. Fiscal Year 2026 National Defense Authorization Act (NDAA)

The FY26 NDAA, currently progressing through Congress, is poised to introduce sweeping reforms to defense acquisition. Both chambers have advanced their respective versions, signaling a strong legislative mandate for change.

House Armed Services Committee's FY26 NDAA (SPEED Act)

The House panel passed its version of the FY26 NDAA by a 55-2 bipartisan vote on July 15, 2025.² This bill, incorporating Chairman Mike Rogers' "Streamlining Procurement for Effective Execution and Delivery Act" (SPEED Act), explicitly aims to set major reforms to speed development and fielding of modern technologies while reducing bureaucracy within the defense acquisition system.²

Key provisions include preserving the U.S. Air Force E-7 advanced airborne warning and control system, fully funding the modernization of the U.S. strategic nuclear deterrent (including the Sea-Launched Cruise Missile – Nuclear), and authorizing additional security assistance to Ukraine.³ Furthermore, the House bill directs the Secretary of Defense to prepare an implementation plan for establishing a Joint Task Force Cyber for the Indo-Pacific area, and mandates an acquisition and fielding strategy for the F-47 advanced fighter aircraft program.³ It also pushes for digital manufacturing transition plans for critical components and leverages artificial intelligence (AI) to bolster cybersecurity skills and explore generative AI.³

Senate Armed Services Committee's FY26 NDAA (FORGED Act)

The Senate Armed Services Committee passed its version of the FY26 NDAA on July 9, 2025, unveiling it on July 14, 2025, with a total of $924.7 billion in national defense funding.⁴ This bill includes provisions from the "Fostering Reform and Government Efficiency in Defense" (FORGED) Act.⁴

A significant reform is the amendment to the definition of a "nontraditional defense contractor," expanding it to include entities without significant independent research and development (IR&D) or bid and proposal (B&P) costs reimbursed by the government. These nontraditional companies would be largely exempt from several defense business requirements and treated as commercial firms unless a waiver is approved.⁴ Other proposed reforms include redefining Program Executive Officers (PEOs) as "portfolio acquisition executives" with greater authorities, establishing capstone requirements for these new PEO roles, and amending acquisition strategy requirements to focus on portfolio management of capability sets to promote competition and continuous iteration.⁴ An alternative pathway for test and evaluation of software acquisition programs is also proposed.⁴ The bill also aims to amend Commercial Solutions Openings (CSO) solicitation procedures by eliminating approval thresholds and establishing sole-source follow-on authority for other transactions.⁴

The legislative efforts of both the House and Senate demonstrate a converging intent towards agility and innovation in defense acquisition. The House's SPEED Act explicitly focuses on accelerating development and fielding and reducing bureaucratic hurdles.² Concurrently, the Senate's FORGED Act aims to redefine nontraditional defense contractors and streamline processes, indicating a shared objective of making defense acquisition faster and more accessible to a broader range of innovators, particularly commercial firms.⁴ This unified legislative push suggests that future defense contracting will increasingly favor companies demonstrating rapid prototyping, iterative development, and the ability to integrate commercial technologies, implying a reduced tolerance for protracted development cycles and rigid, bespoke defense-unique requirements.

The Senate NDAA's proposal to redefine PEOs as "portfolio acquisition executives" and focus on "portfolio management of capability sets" represents a significant conceptual shift.⁴ Historically, PEOs often managed individual programs in a more siloed manner. Moving to a portfolio approach implies a more integrated view of capabilities, potentially fostering better interoperability, reducing redundant efforts, and optimizing resource allocation across related systems. This suggests a move away from isolated program management towards a more holistic, enterprise-level strategy for capability development, which could lead to a more coherent and strategically aligned acquisition strategy. However, it also requires a higher level of systems integration expertise and a broader understanding of warfighter needs across multiple platforms. Contractors will need to align their offerings with broader capability sets rather than just individual programs.

Furthermore, the House NDAA specifically mentions provisions to leverage AI to bolster cybersecurity skills, create new lines of efforts for using generative AI, and direct digital manufacturing transition plans for critical components.³ This is not merely about funding specific AI projects, but about embedding AI and digital processes into the very fabric of defense operations and manufacturing. This indicates a strategic recognition that these technologies are foundational for future military advantage and operational efficiency. This signifies that digital fluency and AI integration will become increasingly non-negotiable requirements for defense contractors, impacting everything from design and production methodologies to supply chain management and cybersecurity practices. Companies that fail to adopt these advanced digital capabilities risk being left behind.

The following table provides a comparative overview of the acquisition reforms proposed in the House and Senate FY26 NDAA drafts:

Reform Area	House HASC FY26 NDAA (SPEED Act) Provisions	Senate SASC FY26 NDAA (FORGED Act) Provisions	Common Themes/Differences
Overall Goal	Speed development & fielding of modern technologies; reduce bureaucracy 2	Streamline acquisition process; reduce administrative complexity; remove outdated requirements 2	Both aim for faster, simpler acquisitions; House emphasizes new directorate, Senate focuses on statutory amendments.
Nontraditional Contractors	Not explicitly detailed in provided snippets	Amends definition to include entities without significant IR&D/B&P costs; exempts from some defense business requirements; treats as commercial firms unless waived 4	Senate explicitly expands and streamlines engagement with nontraditional firms.
Acquisition Process	Establishes new directorate as decision hub for faster timelines 2	Redefines PEOs as "portfolio acquisition executives" with greater authority; establishes capstone requirements for PEOs; amends acquisition strategy for portfolio management; alternative pathway for software T&E 4	House focuses on structural change (directorate); Senate focuses on PEO authority, portfolio management, and software acquisition pathways.
Key Technologies	Leverages AI for cybersecurity & generative AI; directs digital manufacturing transition plans for critical components 3	Not explicitly detailed in provided snippets, but supports general innovation	House explicitly highlights AI and digital manufacturing.
Strategic Priorities	Preserves E-7 system; fully funds strategic nuclear deterrent (Sea-Launched Cruise Missile – Nuclear); authorizes Ukraine assistance; directs Joint Task Force Cyber for Indo-Pacific; F-47 strategy 3	Supports $924.7B national defense funding; aligns with general defense priorities 4	Both support broad national security priorities; House lists specific program directives.
Commercial Solutions	Not explicitly detailed in provided snippets	Amends Commercial Solutions Openings (CSO) to eliminate approval thresholds; establishes sole-source follow-on authority for other transactions 4	Senate provides specific mechanisms to streamline commercial solution adoption.

B. The One Big Beautiful Bill Act (OBBB Act)

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (H.R. 1, Public Law No: 119-21), providing approximately $156 billion in funding for the Defense Department.⁵ This act represents a monumental investment, directly shaping the acquisition landscape through specific funding directives.

The OBBB Act allocates substantial funds across a diverse array of defense-related areas, including border security, missile defense, the marine industrial base, hypersonic defense systems, critical minerals, uncrewed aircraft, long-range aircraft, military spacecraft, and bolstering the U.S. nuclear arsenal.⁵

Key acquisition-related investments include:

• Naval Modernization: $5.4 billion for two additional Arleigh Burke-class guided missile destroyers, $4.6 billion in fiscal 2026 for a second Virginia-class fast attack submarine, $2.7 billion for procurement of T-AO class replenishment oiler, $2.1 billion for medium uncrewed surface vessels, $1.8 billion for new class of medium landing ships for the Marine Corps, and $1.5 billion for small uncrewed surface vessels.⁵

• Space and Missile Defense: $7.2 billion for military space-based sensors, $5.6 billion for space-based and boost phase intercept capabilities, $2.2 billion for hypersonic defense systems, $2 billion for air moving target indicator military satellites, and $2 billion for ground-based missile defense radars.⁵

• Innovation and Technology Scaling: $2 billion for the Defense Innovation Unit (DIU) to scale commercial technology for military use, $1.7 billion to modernize military cryptographic systems, $1.5 billion for low-cost cruise missiles, $1.4 billion to expand the small uncrewed aircraft base, and $1 billion to expand programs accelerating the fielding of innovative technologies.⁵

• Strategic Deterrence: $4.5 billion to expand B-21 strategic bomber production capacity, $2.5 billion for risk reduction activities associated with the Sentinel intercontinental ballistic missile program, and $2 billion for the development of sea-launched nuclear cruise missiles.⁵

• Industrial Base and Manufacturing: $1 billion to support up to $100 billion in loans and loan guarantees through the Office of Strategic Capital's (OSC) credit financing program, and an additional $500 million to support $100 billion in OSC financing to bolster the U.S. manufacturing base for critical minerals.⁵

• Readiness and Infrastructure: $16.3 billion to enhance U.S. military readiness, including funding for maintenance, spare parts, equipment, and modernizing shipyards, depots, and other maintenance facilities.⁵

• Aircraft: $8.6 billion for military aircraft, including $3.2 billion for F-15EX jet production and $1.1 billion for long-range strike aircraft development/procurement.⁵

The OBBB Act is not merely a general appropriation; it meticulously details significant funding allocations for specific weapon systems and technological areas, such as hypersonics, uncrewed systems, space-based sensors, the B-21 bomber, and the Sentinel Intercontinental Ballistic Missile (ICBM) program.⁵ These allocations directly correspond to the strategic capabilities emphasized in the NDAA discussions and the broader National Defense Strategy Guidance.³ This explicit alignment demonstrates a clear, top-down prioritization of defense investments. This strong alignment between funding and strategic priorities provides clear signals to the defense industrial base regarding where future investment and demand will be concentrated. Companies should align their research and development (R&D) and production capabilities with these explicitly funded areas to maximize their competitive advantage. It also signifies a long-term commitment to these specific capabilities, reducing uncertainty for industry.

Furthermore, the OBBB Act's provision of $1 billion to support $100 billion in loans and loan guarantees through the Office of Strategic Capital (OSC) and an additional $500 million for critical minerals manufacturing ⁵ goes beyond direct procurement. This represents a strategic use of financial instruments to stimulate private investment and strengthen the domestic industrial base, particularly in areas deemed critical for national security and supply chain resilience. This indicates a proactive approach to addressing industrial vulnerabilities. This suggests a recognition that traditional contracting alone may not be sufficient to address industrial base vulnerabilities. It opens new avenues for companies, especially those involved in critical minerals and advanced manufacturing, to access capital and expand capabilities, fostering a more resilient and self-sufficient supply chain for the Department of Defense (DoD). This could reshape the financial landscape for defense-related industries.

IV. Key Executive Actions and Regulatory Reforms

A. Executive Order 14265: Modernizing Defense Acquisitions and Spurring Innovation

On July 9, 2025, the Defense Department published a Notice of Request for Comments on Executive Order 14265, "Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base".⁷ This Executive Order (E.O.), issued by President Donald J. Trump, aims to accelerate defense procurement and revitalize the defense industrial base by reforming acquisition processes and modernizing the defense acquisition workforce.⁷

The comment period for this notice ends on August 8, 2025 ⁷, indicating a window for public and industry input that will shape the specific implementation policies. This proactive solicitation of feedback suggests a desire for broad stakeholder engagement in the reform process, aiming to ensure practical and effective outcomes. While the NDAA provides legislative direction, E.O. 14265 and the subsequent Request for Comments demonstrate the executive branch's direct intent to operationalize these reforms. The request for comments is a critical step in translating high-level policy goals into practical, implementable regulations and processes. It signifies that the administration is actively seeking input to ensure the reforms are effective and address real-world challenges faced by the industrial base, moving beyond aspirational goals to concrete implementation. The comment period offers a crucial opportunity for industry and other stakeholders to directly influence the specifics of how "modernizing defense acquisitions" and "spurring innovation" will be achieved. Active participation in this process is vital for shaping favorable regulatory environments and ensuring that new policies are practical and effective. This also suggests that the reforms will be iterative, incorporating feedback from the defense ecosystem.

B. Executive Order 14275: Restoring Common Sense to Federal Procurement & FAR Class Deviation 25-10

Executive Order 14275, "Restoring Common Sense to Federal Procurement," signed on April 15, 2025, mandates a comprehensive review and simplification of the Federal Acquisition Regulation (FAR). This initiative, known as the Revolutionary FAR Overhaul (RFO), aims to make the FAR more concise, understandable, and focused on core procurement requirements by eliminating non-statutory, redundant, or obsolete language.⁸

As a direct implementation of this E.O., FAR Class Deviation 25-10 was approved, specifically targeting FAR Part 11, "Describing Agency Needs." This deviation, effective immediately, ensures that requirements are clear, focused on commercial standards, and do not unnecessarily limit competition.⁸ The Department of Homeland Security (DHS) acquisition workforce is directed to follow the RFO Part 11 deviation text instead of the codified FAR Part 11.⁸

Specific changes introduced by FAR Class Deviation 25-10 (as of July 1, 2025) include:

• Language and Framework Updates: The deviation eliminates non-statutory, redundant, or obsolete language; enhances clarity through plain language; aligns with a new FAR framework; and preserves essential government-wide acquisition standards.⁸

• Retained Statutory Requirements and Clauses: Key statutory requirements such as Planning and Solicitation (41 U.S.C. § 3306(a) and 10 U.S.C. § 3206(a)), Preference for Commercial Products and Services (41 U.S.C. § 3307 and 10 U.S.C. § 3453), and Liquidated Damages (15 U.S.C. § 637(d)(4)(F)) are retained. Specific clauses like 52.211-5 (Material Requirements) and those related to the Defense Priorities and Allocations System (DPAS) are also preserved.⁸

• Removed Requirements and Clauses: Notably, prescriptive procedures like requirements for including ecolabels in specifications based on the Green Procurement Compilation and "brand name or equal" purchase descriptions have been removed. Twelve specific clauses and provisions have been eliminated, including those related to the availability of federal specifications (52.211-1, 52.211-2, 52.211-3, 52.211-4), brand name or equal procurements (52.211-6), alternatives to government-unique standards (52.211-7), and certain delivery schedule clauses (52.211-8, 52.211-9, 52.211-10), as well as clauses addressing variations from firm-fixed price contracts (52.211-16, 52.211-17, 52.211-18).⁸

• Implementation Instructions: Removed provisions should not be included in future solicitations, and requirements for establishing delivery/performance schedules will be moved to a FAR Companion Guide, allowing greater flexibility.⁸

The removal of specific prescriptive requirements, such as those for ecolabels and "brand name or equal" clauses, and the explicit goal of focusing on "commercial standards" and not "unnecessarily limiting competition" are direct consequences of the RFO initiative.⁸ This signals a deliberate effort to reduce the administrative burden on both government and industry, particularly for commercial entities. By removing highly specific, often government-unique requirements, the DoD aims to make it easier for commercial products and services to be adopted, thereby broadening the vendor base and increasing competition. This regulatory streamlining complements the legislative efforts to engage nontraditional contractors. It suggests a future where defense procurement will increasingly resemble commercial transactions, requiring contractors to focus on demonstrating commercial best practices and value rather than navigating overly complex, defense-specific compliance hurdles. This could significantly lower the barrier to entry for innovative commercial companies.

The removal of prescriptive delivery schedule clauses and the intention to move these requirements to a "FAR Companion Guide" indicate a move towards greater flexibility for acquisition teams in tailoring contract terms.⁸ This decentralization of detailed procedural requirements from the FAR itself allows contracting officers more discretion to adapt to specific program needs, rather than adhering to rigid, one-size-fits-all rules. This shift aims to empower contracting officers to make more agile decisions. While intended to increase efficiency, this flexibility places a greater onus on contracting officers to exercise sound judgment and on industry to clearly articulate their capabilities and proposed delivery timelines. It could lead to more tailored contracts but also requires robust communication and negotiation between government and industry.

The following table summarizes the key changes introduced by FAR Class Deviation 25-10 to FAR Part 11:

Category	Specific FAR Reference/Description	Impact/Significance
Language & Framework Updates	Elimination of non-statutory, redundant, obsolete language; plain language enhancement; alignment with new FAR framework; preservation of essential government-wide acquisition standards 8	Simplifies FAR, making it more concise and understandable, focusing on core procurement.
Retained Statutory Requirements	41 U.S.C. § 3306(a) & 10 U.S.C. § 3206(a) (Planning & Solicitation); 41 U.S.C. § 3307 & 10 U.S.C. § 3453 (Preference for Commercial Products/Services); 15 U.S.C. § 637(d)(4)(F) (Liquidated Damages) 8	Ensures fundamental legal mandates for procurement planning, commercial preference, and contract enforceability are preserved.
Retained Clauses	52.211-5 (Material Requirements); Clauses related to Defense Priorities and Allocations System (DPAS) 8	Maintains critical operational and national defense support mechanisms within contracting.
Removed Prescriptive Requirements	Requirements for ecolabels in specifications; "brand name or equal" purchase descriptions 8	Reduces administrative burden and aims to broaden competition by allowing more commercial standards.
Removed Clauses/Provisions	52.211-1 to 52.211-4 (Availability of specs); 52.211-6 (Brand Name or Equal); 52.211-7 (Alternatives to Gov-Unique Standards); 52.211-8 to 52.211-10 (Delivery schedules); 52.211-16 to 52.211-18 (Variations from FFP contracts) 8	Streamlines solicitations, removes outdated or overly prescriptive clauses, and provides greater flexibility in contract terms.

C. Notable Open FAR Cases with Recent Activity

Beyond the formal deviation, ongoing adjustments to the FAR are evident in the list of Open FAR Cases. As of July 11, 2025, Case 1908, related to "Acquisition-Related Thresholds," saw an update where Defense Acquisition Regulations (DAR) staff notified FAR staff of DAR Council (DARC) differences.⁹ This indicates active work on adjusting statutory acquisition-related thresholds for inflation and other policy matters, planned to be effective October 1.⁹ Additionally, Case 2025-006, "Ending Procurement and Forced Use of Paper Straws," saw a proposed FAR rule sent for preparation of a Federal Register notice on July 2, 2025, implementing E.O. 14208.⁹ While seemingly minor, this demonstrates the continued, granular adjustments to procurement rules.

These updates to specific FAR cases, such as "Acquisition-Related Thresholds," highlight that beyond the sweeping reforms, there is a continuous, often detailed, process of regulatory refinement.⁹ These smaller, ongoing adjustments, like those related to inflation, are essential for maintaining the practical applicability and fairness of the FAR. The "paper straw" rule, while specific, illustrates that even seemingly minor executive orders are translated into FAR changes, demonstrating the comprehensive and ongoing nature of regulatory compliance.⁹ This indicates that the regulatory environment is not static. Defense contractors must maintain vigilance not only on major legislative and executive shifts but also on these continuous, incremental changes to the FAR and Defense Federal Acquisition Regulation Supplement (DFARS). These smaller adjustments can have significant impacts on specific contract types, cost allowability, or administrative burdens.

V. Implications for the Defense Industrial Base and Future Acquisition

The combined force of the OBBB Act's targeted investments, the NDAA's reform efforts, and the FAR overhaul presents a transformative period for defense contractors.

The Senate NDAA's redefinition of "nontraditional defense contractors" and the FAR Part 11 deviation's emphasis on commercial standards significantly lower barriers to entry.⁴ This creates substantial opportunities for commercial technology companies, startups, and small businesses to engage with the DoD, particularly those offering innovative solutions in AI, cyber, space, and advanced manufacturing. The $2 billion allocated to the Defense Innovation Unit (DIU) in the OBBB Act to scale commercial technology for military use further reinforces this trend.⁵

The move towards simplified FAR language, elimination of redundant clauses, and the potential for alternative acquisition pathways for software suggest a shift away from highly prescriptive, defense-unique contracting.⁴ This may lead to more streamlined solicitations, potentially faster contract awards, and a greater emphasis on performance-based outcomes rather than process compliance. The "Maximizing Warfighter Edge Through Efficient Acquisition" webinar series and the overall push for faster timelines underscore a heightened focus on optimizing DoD's purchasing power.² Contractors will face increased pressure to demonstrate cost-effectiveness, timely delivery, and the ability to integrate into complex supply chains.

The SPEED Act's explicit goal of "faster development and production timelines" and the directives for "digital manufacturing transition plans" highlight a clear imperative for accelerated, digitally-enabled acquisition.² This means adopting agile development methodologies, leveraging digital engineering, and integrating advanced manufacturing techniques across the acquisition lifecycle. The recent acceptance of the GPS Next Generation Operational Control System (OCX) after years of delays serves as a stark reminder of the challenges in large-scale defense IT acquisition and reinforces the urgency behind these reforms to prevent future delays and ensure timely delivery of critical capabilities.¹¹

These policy changes will have a distinct impact on specific defense sectors. For Space, the OBBB Act's significant investments in military space-based sensors, boost phase intercept capabilities, and military satellites signal a robust and growing market for space-related acquisition.⁵ The recent acceptance of the GPS OCX and the $2.4 billion contract for new nuclear command and control satellites demonstrate active procurement in this domain, aligning with the strategic importance highlighted by Spacecom leadership.¹ For

Cyber, the directive to establish a Joint Task Force Cyber for the Indo-Pacific and the emphasis on leveraging AI for cybersecurity indicate a critical and expanding need for advanced cybersecurity solutions and talent within the defense sector.³ For

Advanced Manufacturing/Industrial Base, the OBBB Act's funding for critical minerals manufacturing and the Office of Strategic Capital's loan programs directly support the revitalization of the domestic industrial base.⁵ This, coupled with directives for digital manufacturing, points to a future where advanced, resilient domestic manufacturing capabilities are paramount for national security.³

The continued emphasis on Defense Acquisition University (DAU) training schedules, the Immersive Commercial Acquisition Program Fellowship, and other professional development opportunities underscores the DoD's commitment to cultivating a skilled acquisition workforce capable of navigating these complex changes and leveraging new authorities.¹This is critical for successful implementation of the reforms, as a well-trained workforce is essential to effectively utilize new flexibilities and manage complex, technology-driven procurements.

The various policy changes, from legislative funding to regulatory simplification and workforce development, are not isolated initiatives; they form a cohesive "acquisition ecosystem" aimed at enhancing national security. For example, the OBBB Act's funding for DIU directly supports the FORGED Act's intent to engage nontraditional contractors, which is further enabled by the FAR RFO's focus on commercial standards.⁴ This interconnectedness suggests a deliberate, multi-faceted strategy where each policy reinforces the others towards common goals of speed, innovation, and resilience. Defense contractors must view these changes holistically. Success will depend not just on responding to individual solicitations but on understanding how their capabilities fit into this broader ecosystem, leveraging new pathways, and demonstrating alignment with the DoD's strategic priorities for innovation, speed, and industrial resilience. This requires a more integrated and strategic approach to business development and internal capabilities.

VI. Outlook and Recommendations

Anticipated Next Steps

The immediate next step for the NDAA is the reconciliation process between the House and Senate versions. While both versions share common objectives of speeding up and simplifying equipment purchases, the specific language and mechanisms differ.² This reconciliation work is anticipated to continue into the fall, with the final bill likely incorporating elements from both the SPEED and FORGED Acts. The comment period for Executive Order 14265 (Modernizing Defense Acquisitions) concludes on August 8, 2025.⁷ The feedback received will inform the specific regulations and implementation guidance that follow, potentially leading to further FAR/DFARS changes. Ongoing FAR cases, such as the adjustment of "Acquisition-Related Thresholds," will continue to progress, leading to incremental but important regulatory updates.⁹

Strategic Recommendations

The sheer volume and interconnectedness of the legislative and executive policy changes within just two weeks underscore that the defense acquisition landscape is undergoing a fundamental transformation, not merely incremental adjustments. The comment periods for E.O. 14265 and the ongoing reconciliation of the NDAA indicate that the policy environment is still fluid and open to influence.² This dynamic state demands continuous monitoring and strategic foresight. This means that a reactive approach to compliance will be insufficient. Stakeholders must adopt a proactive stance, actively engaging in policy discussions, anticipating future changes, and rapidly adapting their business models, technological investments, and workforce capabilities. The ability to quickly pivot and innovate will be a key differentiator in this evolving market.

For Traditional Defense Contractors:

• Proactively adapt to agile methodologies and digital transformation. Investment in digital engineering, advanced manufacturing, and AI capabilities is crucial to align with the DoD's push for faster timelines and modernized production.³

• Embrace commercial best practices and solutions. Be prepared to demonstrate how offerings align with commercial standards and provide value beyond traditional defense-unique requirements, especially in light of FAR Part 11 changes.⁸

• Strengthen supply chain resilience. Given the OBBB Act's focus on critical minerals and industrial base financing, assessing and de-risking supply chains, potentially exploring domestic partnerships and diversification, is advisable.⁵

For Nontraditional/Commercial Firms:

• Actively engage with DoD through new pathways. Leverage the redefined "nontraditional defense contractor" status and Commercial Solutions Openings (CSOs) to access defense markets. Understanding the specific requirements and benefits associated with these new avenues is paramount.⁴

• Focus on scaling commercial technologies. The DIU's increased funding indicates a strong appetite for readily scalable commercial solutions. Highlighting the ability to integrate and adapt existing commercial products for military use, demonstrating clear value propositions, will be advantageous.⁵

• Participate in policy discussions. Submitting comments on E.O. 14265 is an opportunity to ensure perspectives on innovation and market access are considered in future policy formulation, helping to shape a more favorable regulatory environment.⁷

For All Stakeholders (Government and Industry):

• Invest in workforce development. Both government acquisition professionals and industry personnel require continuous training on new policies, emerging technologies (AI, cyber), and agile practices to effectively implement and operate within the new acquisition framework.¹

• Foster collaboration and communication. The complex nature of these reforms necessitates close collaboration between government program offices, contracting activities, and industry partners to ensure successful implementation and achieve desired outcomes, building trust and shared understanding.

• Monitor legislative and regulatory updates closely. The NDAA reconciliation and ongoing FAR changes will continue to shape the environment. Staying informed is crucial for strategic planning, compliance, and identifying new opportunities.

VII. Conclusion

The first two weeks of July 2025 have solidified a clear trajectory for federal defense acquisition: one characterized by a relentless pursuit of speed, innovation, and industrial resilience. Legislative actions, particularly the OBBB Act and the advancing NDAA, are channeling unprecedented funding into strategic capabilities while simultaneously mandating systemic reforms to reduce bureaucracy and foster agility. Executive actions, exemplified by E.O. 14265 and the FAR Class Deviation 25-10, are translating these high-level objectives into tangible regulatory changes, streamlining processes and opening doors for nontraditional and commercial partners. The long-term significance of these shifts lies in their potential to fundamentally alter the competitive landscape, accelerate technological superiority for the U.S. military, and strengthen the domestic defense industrial base. Success in this new environment will hinge on a proactive, adaptive, and collaborative approach from all participants in the defense acquisition ecosystem.