Warfighting at Warp Speed: Tracking the 2026 NDAA and DOW’s Acquisition Overhaul

In November, PilieroMazza explained the Department of War’s (DOW) Acquisition Overhaul and why defense contractors need to stay informed, as understanding how DOW plans to fast-track contract delivery will be key to thriving in this evolving landscape. Since DOW released its plans in a memo titled “Transforming the Warfighting Acquisition System to Accelerate Fielding of Capabilities,” the government took further action to reshape the defense acquisition process via the 2026 National Defense Authorization Act (NDAA) released by Congress on December 7, 2025. In this blog, we break down key highlights from the 3,000-page NDAA for defense contractors tracking how these important updates will affect their ability to compete.

DOW Acquisition Overhaul

DOW announced on November 7, 2025, that it would institute a sweeping overhaul of its weapons acquisition procedures to address three longstanding problems:

1. fragmented accountability where no single leader is empowered to make tradeoffs between speed, performance, and cost;

2. misaligned incentives that reward meeting every specification at significant cost over on-time delivery; and

3. procurement patterns that disincentivize industry investment, leading to constrained industrial capacity that cannot surge or adapt quickly.

The Under Secretary of War for Acquisitions and Sustainment (USW(A&S)), along with all military departments, are tasked with implementing guidance to immediately remedy such challenges. Of note, DOW intends to:

1. push for greater intellectual property rights;

2. make Contracting Officers (COs) more responsible for tangible results instead of compliance metrics;

3. increase use of non-FAR-based instruments;

4. revamp Defense Acquisition University; and

5. clearly incentivize timely delivery.

NDAA

Every year, Congress is tasked with negotiating the NDAA, which grants DOW and all its members, appropriations for military activities, personnel strengths, and construction—as well as other purposes like defense activities of the Department of Energy.

This year, the NDAA tops $900 Billion and includes provisions aimed at remaking the defense acquisition process that align with DOW’s November 7, 2025, announcement and clue the public into some of the administration’s priorities and plans. The following sections are particularly interesting for defense contractors:

1. Section 805 of the NDAA requires DOW to develop a digital system to track and manage all technical data and verify contractors’ compliance with technical data contract requirements. This requirement is not just future-focused, as DOW is also mandated under Section 805 to review all existing contracts to determine contractors’ data delivery requirements and what DOW can access. 

2. Section 824 of the NDAA appears to be aimed at increasing competition, as Secretary Hegseth is required to do the following:
     
   a. issue guidance on past performance in contract proposals, specifically noting where DOW should consider accepting non-government projects in evaluating past performance and how to validate same;

   b. explain how DOW can find alternatives to past performance evaluations, like “demonstrations and testing of technologies” in evaluating contract proposals; and

   c. convene the Defense Acquisition Regulations Council to eliminate procedures that disproportionately affect small businesses and nontraditional defense contractors (NDCs) that want to bid on DOW contracts.

3. Section 875 of the NDAA directs Secretary Hegseth to revise the Defense Federal Acquisition Regulation Supplement (DFARS) to establish procedures for a CO to withhold payment to an incumbent that files a bid protest that is dismissed for lack of a legal or factual basis.

4. Section 886 requires Secretary Hegseth and the DOW Chief Information Officer to “harmonize cybersecurity requirements applicable to the defense industrial base” across the DOW and reduce the number that are unique to a specific contract. This action must be taken by June 1, 2026.

Key Takeaways

1. Data Rights. The NDAA isn’t in perfect alignment with DOW’s Acquisition Overhaul with respect to data rights. Notably, despite bipartisan support and seemingly contrary to the DOW Acquisition Overhaul’s push for broader data rights, the NDAA did not contain a right-to-repair provision, which would require DOW to negotiate access to technical data and necessary software before signing a contract. This was removed along with a provision requiring contractors to provide the military with detailed repair and maintenance instructions. Section 805 of the NDAA appears to be a compromise on these points, so time will tell just how far DOW plans to push for increased data rights as part of its revamped acquisition process.

2. Increased Competition. The NDAA and DOW’s Acquisition Overhaul both aim to increase competition and expand the defense industrial base. The current administration’s priorities on this topic have been apparent for months: “the more the merrier” when it comes to defense contracts. DOW’s plans to prioritize non-FAR based contracts like OTA, which emphasizes participation from NDCs, appears to be in total alignment with the NDAA’s goal to increase competition. That said, seasoned federal contractors and new defense contractors alike should keep an eye out for DOW’s anticipated guidance with respect to the anticipated shift in past performance evaluations.

3. Bid Protests. The DFARS are going to be revised to penalize contractors who file legally and/or factually insufficient protests. While the Government Accountability Office (GAO) did not agree with Section 875 of the NDAA, stating that there are already sufficient barriers in place to stop frivolous protests, the NDAA instructed DOW to revise the DFARS to allow a CO to withhold payment to an incumbent contractor filing a protest that GAO dismisses as insufficient. Incumbent contractors preparing to recompete will need to keep a close eye on changes to the DFARS in 2026.

4. Much of the contract-based discussion in the NDAA is written with an eye toward efficiency. While Section 886 should not come as a surprise to defense contractors given the CMMC being phased in over the next three years, this section demonstrates how the NDAA appears to share DOW’s and this administration’s overall goals of streamlining acquisitions where possible.

Should you have any questions regarding the NDAA, DOW acquisition, FAR or non-FAR procurements, or defense contracts, contact Lauren Brier, Josie Farinelli, or another member of PilieroMazza’s Government Contracts Group.

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If you’re seeking practical insights to gain a competitive edge by understanding the government’s compliance requirements, tune into PilieroMazza’s podcasts: GovCon Live!, Clocking in with PilieroMazza, and Ex Rel. Radio.