On Dec. 10, the U.S. House approved a fiscal 2026 defense spending authorization package that earmarks nearly $900 billion for national security programs and begins what leaders of both chambers’ Armed Services Committees describe as the most substantial overhaul of the Pentagon’s acquisition system and industrial base in a generation.
The legislation represents the conference package negotiated between S.2296 and the House’s companion amendment and now moves to the Senate for final action.
In a joint statement, the leaders of the House and Senate Armed Services Committees said the bill reflects months of cross-party negotiations and “delivers the most important acquisition reforms in a generation: cutting red tape, speeding up decision-making and improving our ability to get modern capabilities into the hands of our troops on time and on budget.”
Democrats raised objections to certain policy criteria, but stressed the need to maintain continuity in basic defense programs.
“There are provisions in this bill that are divisive and unnecessary, but our priority is to ensure that the men and women who serve have what they need,” said Rep. Adam Smith (D-Wash.), the committee’s ranking member, in comments reported by the Associated Press.
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He added in a formal statement that the authorization reflected “months of bipartisan negotiations conducted in good faith,” although he highlighted concerns about the final negotiations.
The core of FY26 NDAA industrial base review units
The committee’s emphasis on revitalizing the industrial base is reinforced by the new contracting authorities and investment structures detailed in the Congressional Budget Office’s cost assessment.
One of the most consequential changes is the long-term authority for multi-year procurement in ship maintenance.
In its formal estimate, CBO wrote that “expenditures would total $5.95 billion over the period 2025-2030 and $6.6 billion through 2035,” highlighting the expanded workload expected in public and private Section 321 yards.
The measure also establishes a Defense Industrial Base Fund with annual recurring budget authority. The CBO projects “spending will total $550 million over 2025-2030 and $800 million through 2035,” supporting targeted investments in munitions production, shipyard modernization, undersea industrial base tools, and advanced manufacturing.
Additional CBO analysis identifies new funding for automation, robotics, and additive manufacturing to increase surge capacity in power and other critical systems.
The bill’s acquisition reform provisions, stemming from the committees’ work on streamlining requirements, accelerating decision cycles, and expanding open systems modular design, aim to shorten delivery times and reshape planning frameworks for contractors and suppliers in the defense construction and manufacturing sectors.
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CBO projects large spending for shipyards and manufacturing capacity
Military construction spans a broad set of projects across all services, including short-term recapitalization of aging maritime infrastructure at Navy shipyards, such as the dry dock modernization that supports production of the Columbia- and Virginia-class submarines, and multiple Indo-Pacific posture upgrades focused on hardened facilities and airfield improvements in Guam.
While appropriations will determine final spending levels, Division B of the authorization outlines dozens of new beginnings and major recapitalization efforts that set the framework for FY26 work.
Other sections direct the services to expand capacity at existing depots and shipyards, including digital engineering investments in the undersea enterprise and strengthened oversight of the Navy’s Shipyard Infrastructure Optimization Program.
These authorizations collectively signal multi-year demand that could shape engineering, construction and supply chain planning for companies engaged in federal maritime, aviation and base infrastructure work.
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MILCON, the energy and environment mandates expand the scope of infrastructure
Energy and environmental provisions extend the scope of long-term construction and repair mandates. The House amendment includes a nuclear power pilot at a Navy installation and establishes a Defense Department Nuclear Advanced Transition Task Force to evaluate future deployment pathways.
Authorities related to PFAS are expanded, including accelerated cleanup strategies, provision of alternative water for affected communities, and authorization of specific fluorinated compound destruction technologies.
The updated wildfire prevention training requirements for National Guard units reflect the department’s growing role in preparing for weather-related risks.
As the Senate prepares to take up the measure, its Armed Services Committee has indicated it intends to preserve the industrial base and acquisition reform components while negotiating remaining policy disputes.
Senate Armed Services Committee Chairman Jack Reed (D-R.I.) told Reuters that Congress must advance a bill that “protects our national security without undermining the bipartisan foundation that has long guided defense policy.”
With the core industry-based, MILCON and environmental frameworks aligned between both chambers, the final action is expected to establish multi-year procurement tools, manufacturing capability programs and infrastructure authorizations that could influence defense construction and supply chain activity over the next decade.
— Pam McFarland contributed to this story
