Rep. Garamendi, Sen. Warren Agree with Trump: Defense Contractors Must be Held Accountable For “Failures to Meet Our Warfighters’ National Security Needs”

WASHINGTON, D.C. - Today, Congressman John Garamendi (CA-08) a senior member of the House Armed Services Committee, U.S. Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.), along with Rep. Chris Deluzio (D-PA) wrote to Secretary of Defense Pete Hegseth in support of their effort to limit underperforming defense contractors' executive pay and the ability to buy back their stock. The lawmakers pressed the President and Secretary Hegseth to provide clarity on how the administration plans to tackle these contractor practices to inform legislation that would codify oversight tools for the industry. The letter follows large defense contractors agreeingto quadruple the production of "Exquisite Class" weaponry amid the Trump administration's war with Iran.

On January 7, President Trump signed an executive order(EO) restricting executive pay packages and limiting stock buybacks and dividend payments for defense contractors that don't meet DoD's needs and fail to invest in expanding their production capacity. The order addresses the decades-long problem of defense contractors consistently falling short in delivering weapons programs to the Department of Defense (DoD) on time and on budget.

"Amidst these failures, some of the largest defense contractors have increasingly issued dividends and engaged in stock buybacks… instead of making investments in their capacity to produce quality products," wrote the lawmakers.

The American Enterprise Institute has equated this patternby defense contractors of delaying weapons programs, going over budget, and delivering under scale, to "running a victory lap after finishing fifth."

A report by the Government Accountability Office (GAO) found thatabout 100 of the most costly defense systems in the 23 years "continue to cost more and take even longer to deliver." Delays in just 5 programs by General Dynamics, Raytheon, Boeing, Northrop Grumman, and Lockheed Martin represent 34 years of delayed capability. 

At the same time, large defense contractors have directed a significant portion of their cash towards shareholders and stock buybacks. In 2024, Lockheed Martin used almost $6.8 billion to conduct buybacks and pay dividends to benefit its shareholders. That same year, RTX, General Dynamics, and Northrop Grumman each gave $3 billion or more to shareholders. And from 2020 to 2024, Northrop Grumman increased the amount of money it put toward dividends and buybacks by over 156 percent.

Defense contractors have failed to invest in research and development despite ongoing failures to meet required timelines. DoD has warned that even when contractors do invest, those programs are not meeting the needs of service members. In 2023, the Army issueda warning to General Dynamics explaining that an order did not meet the "technical requirements of the contract" and that the Army would seek to replace General Dynamics with another contractor for that program if it did not invest in the proper equipment.

"We are also concerned that the defense industry is underinvesting in its workforce," wrote the lawmakers, highlighting a high turnover ratein the industry that "mak[es] clear that defense contractors' investments in talent are not enough to keep a consistent workforce..

"Congress needs to codify this effort to ensure the executive order is a step towards lasting change. Therefore, we urge President Trump to support legislation that enhances the executive order and cements accountability tools for the defense industry," concluded the lawmakers. 

The coalition asked President Trump and Secretary Hegseth to clarify how they plan to evaluate companies and enforce President Trump's executive order's limits by March 24, 2026. 

###