On December 18, President Donald Trump signed the National Defense Authorization Act for Fiscal Year 2026, enacting nearly $900 billion in defense policy and formally incorporating delivery and procurement reforms that could reshape the way military construction is acquired and executed.
The law authorizes defense policy throughout the US Department of Defense, including acquisition reform and military construction. Although final funding for the project depends on fiscal year 2026 appropriations, the statute now gives defense construction agencies explicit authority to use delivery tools that were previously applied unevenly or cautiously.
RELATED
Final $900M Defense Bill Passes House With Big Changes to Procurement, Infrastructure
For engineering and construction firms, the most consequential provisions are concentrated in Division B—Military Construction Authorizations, particularly Title XXVIII, which governs how projects can be planned, contracted, and delivered.
For the first time, Congress has expressly authorized progressive design and construction for military construction. Section 2809 allows military departments to use “accelerated design and progressive design-build procedures” for MILCON projects, removing long-standing uncertainty over whether ratings-based collaborative delivery models are permissible under federal law.
Progressive build design allows owners to select equipment based on qualifications and collaborate during the initial design before negotiating the final price, rather than fixing the cost at the proposal stage. State and local agencies have used the approach on complex projects, but previously lacked a clear legal basis within the Department of Defense.
The importance is practical: the law now supports the earlier involvement of contractors and designers in projects where the scope, site conditions and sequencing risks are difficult to define in advance, including shipyard work, industrial facilities and overseas post projects.
RELATED
Navy selects eight firms for $15 million Pacific deterrent construction contract
The multi-year procurement body extends beyond maintenance
The NDAA also extends DOD’s ability to contract construction work over several years. Section 2814 authorizes multiyear procurement authority for certain military construction projects, allowing agencies to structure delivery beyond single-year performance periods.
This authority is distinct from MILCON’s traditional annual procurement and is intended to improve cost control, workforce continuity, and schedule certainty in large or phased programs. For contractors, it opens the door to longer planning horizons and potentially less stop-and-start procurement at major facilities.
At the same time, section 2816 authorizes cost plus incentive and fee contracts for selected projects under the Navy Shipyard Infrastructure Optimization Program, recognizing the technical complexity and risk profile of dry dock modernization and shoreline recapitalization work.
Beyond delivery, the law reinforces long-term demand signals. Section 2803 requires military departments to develop and update 20-year infrastructure improvement plans, formalizing a multi-decade planning framework for bases, depots, and industrial facilities.
Other provisions expand the types of eligible projects and flexibility. Section 2807 explicitly includes demolition projects in the Defense Community Infrastructure Program, while section 2804 strengthens requirements related to water management and security at military installations, areas that may generate subsequent civilian and environmental work.
Collectively, the promulgated authorities point toward procurement changes that ENR readers will want to watch closely. Agencies now have legal support to place more emphasis on qualifications-based selection, early pre-construction services and phased pricing, especially on complex or high-risk projects.
Firms with experience in integrated design, cost modeling and construction capability are likely to be better positioned, as owners gain the flexibility to defer final price commitments until design maturity improves. The multi-year authority also favors teams capable of maintaining workforce and supply chain capability over longer lead times.
Implementation will fall primarily to the U.S. Army Corps of Engineers, the Naval Installations Engineering Systems Command and the Air Force Civil Engineer Center, which are expected to issue internal acquisition guidance interpreting the new authorities before applying them to upcoming acquisitions.
Early adoption is expected on technically complex projects such as shipyard recapitalization, depot modernization and Indo-Pacific posture upgrades, but the timing will depend on agency guidance and FY 2026 appropriations.
As with prior defense authorization bills, the law authorizes policy rather than appropriates funding. Still, by enshrining delivery reform directly into statute, the FY 2026 NDAA establishes a lasting framework that could materially change how military construction is planned, contracted, and delivered over the next decade, well beyond a single budget cycle.
