Is Change Around the Corner? One Proposal to Forge Sweeping Changes to Defense Contracting

At the end of 2024, Senator Roger Wicker (R-MS) published a plan ("Restoring Freedom's Forge: American Innovation Unleashed") and introduced a bill (the Fostering Reform and Government Efficiency in Defense Act or FoRGED Act). The plan and the FoRGED Act propose significant changes to the future of defense innovation and acquisition reform. But that was last Congress. This year, the proposal is gaining traction. Where does that leave the FoRGED Act, and what will it mean for federal contractors? We break down the proposal and its outlook here.

What's in the proposal?

General

Overall, the bill is focused on repealing existing statutes and reducing regulations. Consistent with Executive Order 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts, the bill aims to elevate commercial contracting as the default means for defense procurement and simultaneously leans into the use of rapid acquisition pathways and nontraditional defense contractors. The proposal is overflowing with significant changes-many of which would be headline-worthy on their own if enacted.[1] Here is a sampling of changes, followed by a title-by-title breakdown.

A key goal is the reduction of red tape. In line with this, the FoRGED Act includes a five-year sunset provision designed to automatically terminate indefinite-duration statutory reporting requirements after that period. Any new statutory reporting requirement would automatically cease to be effective five years after it went into effect, unless explicitly exempted.

Structurally, the legislation would transition program executive officers' roles to new portfolio acquisition executives-a move intended to integrate requirements, centralize decision-making, and reduce bureaucracy. Specifically, in Title II, the bill transitions to a model where acquisitions are overseen in a portfolio-by-portfolio acquisition executives (PAEs) model and particular systems are managed holistically. Requirements and programming staff would be moved to PAEs, where a set of capstone requirements would inform requirements. Key individuals among the PAEs would report to a Joint Requirements and Programming Board.

The establishment of the Joint Requirements and Programming Board would alter the way contractors interact with their customers by centralizing decision-making processes that are related to joint military capabilities and program evaluation. Policy decisions would be subject to a vote by the board. Decisions will be made by committee vote-this may distance decision-makers from decision impacts and affect the speed of decision-making.

Separately, both the Act and report emphasize investing in and increasing access among nontraditional defense contractors and creating advantages for commercial contractors. For example, the legislation promises a crackdown on Organizational Conflicts of Interest as, per Title III, within 180 days of enactment, "the Secretary of Defense shall issue guidance on steps to identify and prevent the potentially unfair competitive advantage of entities providing technical advice to acquisition officials in the award of research and development work by such officials." Here, ''potentially unfair competitive advantage'' means unequal access to acquisition officials responsible for award decisions or allocation of resources or to acquisition information relevant to award decisions or allocation of resources. The concurrently issued report stated: "When government standards and reference architectures are overly prescribed, they can become a back door to sole-sourced solutions. . . . We can work against this conflict of interest."

Title-by-Title Overview

The bill includes five main titles, each of which addresses a different facet of defense acquisition:

Title I: Defense Acquisition Process Streamlining

• Repeals numerous existing laws to streamline the defense acquisition process (Sections 101-103).
• Introduces modifications to current defense acquisition requirements, including changes to procurement thresholds and acquisition strategies (Sections 102-103).
• Establishes automatic sunset provisions for indefinite-duration statutory reporting requirements (Section 103).

Title II: Defense Acquisition Roles, Responsibilities, and Organizations

• Transitions the role of Program Executive Officer to Portfolio Acquisition Executive, emphasizing overall management of defense acquisition programs (Section 201).
• Amends responsibilities and procedures of the Joint Requirements Oversight Council (Section 202).
• Establishes the Joint Requirements and Programming Board to coordinate requirements and program evaluation (Section 204).
• Introduces iterative capstone requirements for acquisition portfolios to enhance speed and innovation by revising programs in consultation with operational commands and the Joint Requirements and Programming Board (Section 205).

Title III: Rapid Acquisition and Commercial Contracting

• Exempts nontraditional defense contractors from nearly a dozen specific regulatory requirements (Section 303).
• Modifies treatment of certain products and services as commercial products and services (Section 304).
• Introduces alternative capability-based pricing and adjusts procurement thresholds (Sections 306-307).
• Enhances commercial solutions openings and other transactions authority (Sections 308-309).
• Encourages nontraditional defense contracting and uplifts the middle tier of acquisition for rapid prototyping and rapid fielding (Section 315-317).

Title IV: Promotion of Competition in the Defense Industrial Base

• Establishes a program to enhance secondary sources and supply chain management for the Department of Defense (Section 401).
• Creates an industrial expansion program to fund defense logistics, including updating and refining specifications, and reinforce supply chain resilience, including reverse-engineering or re-engineering property to create technical data packages or manufacturing capabilities (Section 402).

Title V: Defense Budgeting Processes

• Compels a review of the structure of the budget and appropriations for defense acquisition programs to improve management and efficiency (Section 501).
• Modifies the Defense Modernization Account to streamline funding processes (Section 502).
• Amends and repeals various budgetary requirements for defense acquisition to simplify financial management (Section 503).

What's the likelihood of implementation of the proposed legislative changes?

Last Congress, the FoRGED Act bill had no cosponsors and no House companion. However, the bill served as a marker in the sand for what was to come. On January 3, 2025, the 119th Congress began, and Senator Wicker was selected as chairman of the Senate Armed Services Committee (SASC). With Senator Wicker becoming chairman of the key committee and Republicans in control of both the House and Senate, passage seems more likely.

Momentum is gathering for the proposed legislation, both in Congress and the administration. In January, Secretary of Defense Pete Hegseth endorsed the "Freedom's Forge" plan, signaling support from the Trump administration. Then, in a January 28, 2025 hearing on defense innovation, Chairman Wicker touted his "Restoring Freedom's Forge" plan as a way to fundamentally change how the Pentagon does business by streamlining regulations and increasing competition.

The National Defense Authorization Act (NDAA) for fiscal year (FY) 2025 ushered in changes to the Department of Defense's acquisition approach and strategy. It is possible that the proposal will be the basis for reform via NDAA for FY 2026. After all, there is not another legislative vehicle that is reliably enacted. Tracking the amendments by both the House and Senate, resolution of differences, and the version of NDAA FY 2026 signed by the president will provide the only certainty about how this proposal will fare, how much it will change, and whether it will be enacted at all.

[1] It is seemingly unlikely that this specific legislation will pass, but it would be no surprise to see these concepts incorporated in other legislation such as the National Defense Authorization Act.