Acquisition Provisions in the FY 2026 NDAA

Published: January 15, 2026

The latest NDAA contains acquisition provisions that may make many defense contractors happy.

Passed on December 18th, S.1071 – National Defense Authorization Act (NDAA) for Fiscal Year 2026 provides funding authorizations, priorities and policies for DOD and national security programs.

The team has identified the small business impacts contained in the new bill, as well as key provisions relating to several major technology areas such as cloud, cyber and AI. However, the finalized FY 2026 NDAA is also packed with new provisions to potentially reshape the defense procurement environment.

In reviewing these acquisition-related provisions, several overarching themes stuck out to me:

Promotion of increased defense acquisition competition
Fewer regulatory barriers and reduction in contractor compliance burdens
Shift from cost minimization focus to best value
Emphasis on rapid procurement pathways to pursue and accelerate innovation
- Expansion of non-traditional acquisition approaches such as OTAs and CSOs
Reduction in barriers to entry for nontraditional defense contractors, small businesses, commercial companies, and foreign contractors of allied nations
Broadened past performance requirements
Emphasis on domestic supply chain and commercial-first acquisition processes

It would seem many of the themes benefit rather than hinder defense contractors. With these themes in mind, below is a comprehensive list of acquisition clauses within the FY 2026 NDAA. While not an exhaustive list of all acquisition clauses, the provisions below are those I believe will have the broadest impact across defense contracts and the wider defense acquisition landscape.

Sec.	Title	Description
801	Assumption of uninsurable risk on certain contracts	Ensures contractors with classified, fixed-price contracts do not incur financial expenses for work when commercial insurance is unavailable.
802	Changes to certain documents	Requires that any document in a procurement contract include a version number, date and indication of change made after the initial contract award.
803	Pilot program for financing for covered activities	Establishes a pilot program to research alternative financing mechanisms for defense acquisitions to give DOD more flexibility in structuring payments and potentially accessing commercial-style financing to accelerate program timelines.
811	Repeals of existing law to streamline the defense acquisition process	Amends or repeals 86 provisions of existing acquisition statutes. Major repeals include eliminating limitations on the use of undefinitized contract actions, removing requirements that restrict when DOD can treat major weapons systems as commercial products, and eliminating limitations on weapon system component or technology prototype projects.
812	Modifications to current defense acquisition requirements	Revises core acquisition requirements to promote innovation and value over cost minimization. Changes include acquisition focus from lowest overall cost to best value and requires COs to document why competitive alternatives were not viable in sole source scenarios.
813	Modification to award amount for program to accelerate the procurement and fielding of innovative technologies	Increases dollar thresholds for rapid acquisition programs to a minimum award amount of $10M.
814	Additional amendments related to undefinitized contractual actions	Provides additional flexibility for undefnitized contract actions (UCA) including covering pre-award contractor costs before a UCA is awarded, and covering costs from negotiations lasting more than 180 days to definitize the UCA.
815	Amendment to procurement of services data analysis and requirements validation	Allows nontraditional defense contractors to submit recent price history instead of certified cost or pricing data, and for all contracts requires DOD COs to rely on historical data of recent prices paid when determining fair subcontract and purchase order costs.
816	Modification of program and processes relating to foreign acquisition	Reduces bureaucratic delays in foreign acquisition processes, and simplifies procedures when acquiring from trusted allies or partners.
824	Increasing competition in defense contracting	Allows small businesses and nontraditional defense contractors to submit alternative past performance where traditional past performance is absent. Acceptable alternatives include commercial projects, non-defense government contracts and relevant industry experience.
836	Voluntary registration of compliance with covered sourcing requirements for covered products	Requires DOD to create a public and searchable online database where contractors can voluntarily register and attest to compliance in domestic sourcing requirements.
837	Acceleration of qualification of compliant sources	Establishes a working group to streamline the process for qualifying new suppliers that meet domestic content requirements.
861	Amendments to the procurement technical assistance program (PTAP)	Enhances PTAP to help small businesses compete for defense contracts. Sample amendments include expanding types of organizational eligibility, and increasing authorization levels for PTAP grants.
875	Ability to withhold contract payments during period of pendancy of a bid protest	Discourages ill-intentioned bid protests by incumbent contractors by allowing DOD to withhold payments and potentially impose financial penalties ONLY when there's a contract extension or bridge contract due.
1801	Alignment of the defense acquisition system with the needs of members of the Armed Forces	Requires acquisition system reforms to better serve warfighter requirements. Reforms include best value redefinition and prioritization, reorienting acquisition around warfighter needs, prioritization on integrating commercial products and services.
1804	Adjustments to certain acquisition thresholds	Raises dollar thresholds for various acquisition categories to account for inflation and streamline processes, including the Truth in Negotiations Act (TINA) threshold from $2.5M to $10M and sole source award approval threshold without higher level approval from $10M to $100M.
1806	Matters related to cost accounting standards	Raises the threshold for Cost Accounting Standards (CAS) compliance from $50M to $100M, and the threshold for CAS applicability for a contract from $2.5M to $35M
1822	Modifications to commercial products and commercial services	Amends previous acquisition clause to require commercial products, services and non-developmental items to be used to the greatest extent possible. Requires additional considerations for DOD acquisition before using non-commercial options.
1823	Modifications to commercial solutions openings	Expands the use of Commercial Solutions Openings (CSOs) by allowing CSOs for any commercial products and services acquisitions and allowing DOD to award follow-on production contract to CSO awards.
1826	Exemptions for nontraditional defense contractors	Reduces several barriers and compliance requirements for nontraditional defense contractors entering the defense market
1828	Review of commercial products and commercial services acquisition approach	Directs DOD conduct a full review of current commercial acquisition approaches with goals to increase acquisition of commercial products and services, increase commercial item determinations, and identify barriers to commercial acquisition.
1831	Modifications to procurement for experimental purposes	Expands the use of Other Transaction Authority (OTA) by extending procurement to include experimentation and prototyping and lifting more narrow circumstances to OTA use.
1833	Bridging Operational Objectives and Support for Transition program	Requires the DIU to creates the BOOST program to accelerate transition of prototypes to production contracts.
1847	Report on surge capacity in the defense industrial base	Requires a DOD report to Congress on regulations or policies that discourage or prevent contractors in the defense industrial base from maintaining or investing in surge capacity.

I previously wrote on the acquisition provisions contained in the draft Senate and House versions of the FY 2026 NDAA. While some of the provisions in the draft, such as the expansion of CSOs and OTAs, are in the final bill, there are noteworthy differences in the NDAA’s evolution. For one, the finalized NDAA does not appear to include language surrounding the Contractor Performance Assessment Reporting System (CPARS) reforms, which seemed to emphasize negative contract performance. Also notably missing is the mention of any revisions to DOD small business participation goals. Regardless, the FY 2026 NDAA makes clear – the defense acquisition landscape is poised to change with the bill – and seemingly so for the benefit of the defense industrial base.

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The latest NDAA contains acquisition provisions that may make many defense contractors happy.