Interview transcript:
Terry Gerton So we’re going to talk a little bit about what you’re currently seeing in the National Defense Authorization Act. The 2026 NDAA makes some pretty significant reforms to defense acquisition processes. What stood out to you in the 3,000 pages of text that really make the biggest changes in how the Defense Department buys and builds?
Stephanie Barna Well, so first I have to give a little bit of a pitch for the NDAA itself. This was the 65th iteration of the National Defense Authorization Act that passed. And so, of course, that is a record probably that extends far beyond any other piece of repetitive legislation in Congress. And so I always think of the NDAA as this big, sturdy engine that ends up attaching to it a lot of legislative cars, understanding that the NDAA is going to get through, is going to be enacted in law, and is going to make a difference in our national security. As you said, this bill was focused on defense acquisition and hopefully modernizing that system. We had the FoRGED Act coming out of Sen. Wicker’s office on the Senate side, the SPEED Act, coming out of Chairman Rogers’ office on the House, and they were combined and conferenced in what we saw in the National Defense Authorization Act in 2026. From my perspective, though, the real excitement was in those feeder bills, the FoRGED and the SPEED Act. And what I saw in the NDAA was probably a little less than I expected to see. I think the focus on commercial procurements and making procurements easier by using commercial products and commercial measures, I think the focus on Other Transactions as opposed to contracts — Other Transactions need not be FAR-based — and so there is a desire that’s pretty evident in that bill to move more to the Other Transaction side of the house when feasible. But in the end, I think I saw a lot less than I’d originally expected to see, given where the FoRGED and the SPEED Act themselves sought to go. I don’t say that’s necessarily a bad thing. I think the Department of War took the signals from FoRGED and SPEED and given that, and the president’s intent to modernize acquisition across the federal government with a particular focus on the Department of War, the Department Of War took some actions based on what they saw. Didn’t need a law to get them there. They used their policymaking authority and did a lot of what I think we’d expected to see from FoRGED and SPEED; they did a of that on their own in policy mechanisms earlier in the year. So I think the Congress determined they don’t need to take some of these more extreme actions and they perhaps put them to the side to see how some of these policy developments from the department will work their way through the system.
Terry Gerton You’ve been in the so-called smoke-filled rooms when the NDAA gets hashed out at the end. Does that approach from the department surprise you? Have other administrations tried that, where they say, don’t worry about writing that into law, we’ll take that and do it ourselves?
Stephanie Barna In some cases, it’s not an uncommon tactic. I think as the NDAA comes together, particularly at the end of that negotiation, there’s significant consultation between the committees, significant consultation with the department, with industry to let them know where things are heading. Are we landing in the right spot? So yes, I think that’s a very common tactic. I just saw it to a greater extent than perhaps I’d anticipated, given how in-depth both FoRGED and SPEED were when first issued.
Terry Gerton Do you think as this law gets put into practice that these changes will help address some of the pain points that industry says they experience as a result of the Defense Department’s procurement process?
Stephanie Barna I think that’s the intent, but you’re so right. We can put all sorts of things into law and policy. It’s really implementation that’s going to matter. So I’m hoping that the department is going to put its money where its mouth is or where its policies are and really commit to working through some of these very challenging, bureaucratic obstacles to more innovative and widespread participation in the defense acquisition system. But we’ll have to see if they’re going to follow the policies that they’ve actually promulgated.
Terry Gerton I’m speaking with Stephanie Barna. She’s of counsel with Covington and Burling. She was formerly general counsel of the Senate Armed Services Committee and principal deputy assistant secretary of Defense for manpower and reserve affairs. So Stephanie, where does the defense department go next? What will be next on their change agenda?
Stephanie Barna Well, last week, Secretary Hegseth delivered a very rousing speech at SpaceX headquarters in California. I don’t think that his choice of location was any accident. He was there to talk about the reforms that he’s initiating in the defense innovation system. Now, we’ve talked a lot about defense acquisition, and how important bringing innovators into the defense acquisition system is if we want to remain ahead in the national security competition that we’re facing as we look forward. But this is the first time I’ve seen really meaningful reform in the defense innovation system itself. So rousing speech from Secretary Hegseth, followed by two memoranda, one of which made plain that he’s centralized the innovation authority in a single chief technology officer, that being Undersecretary of War for Research and Engineering Emil Michael, who’s been in the job for some time now, who has received excellent reviews for his work in bringing innovative technologies into the military. So he has really centralized Secretary Michael’s authority over the innovation enterprise. He’s also formalized roles for the Strategic Capabilities Office and for probably one of the most innovative organizations in the Department of Defense, the Defense Innovation Unit, which probably a lot of your listeners are familiar with. So he’s given them enhanced and more formal roles in the system. And then in the second memorandum, he said AI is going to be our first proving ground for these new reorganizations, for these new authorities that I’m giving to the innovation system. So no surprise that he would choose AI to be the first test case out of the box, but I think a very important and an insightful memorandum on the Secretary’s part. For those who follow data in the Department of Defense, we also had Secretary Feinberg issue a memorandum about ADVANA, which we know is the department’s first effort to sort of centralize and make accessible just the host of data that the Department of War has collected over so many years. I thought it very interesting that the Feinberg memorandum focused not only on data that will help our war fighters make better, faster, more effective decisions, but also data on Department of War auditability. So it sort of shows where Feinberg in his role as the chief operating officer for the Department is thinking, where his mind is.
Terry Gerton Fascinating to see how all of this will play out. And I know that the NDAA for 2026 is just over a month old, still in the crib. Let’s talk about the 2027 NDAA. So with all of the work on acquisition reform, the new headlines around innovation and data, what will you be watching as the first drafts of the 2027 NDAA gets circulated?
Stephanie Barna Well, it is never too early to talk about the 2027 NDAA, Terry. So I think it’s an excellent question. In fact, the House Armed Services Committee has already set a deadline for its members to bring their new proposals for the 2027 NDAA as Feb. 17th. So that is a good line in the sand for members of industry, for your profit-making and nonprofit organizations out there who want to see policy changes brought into the system. This is a great time to talk to your members of Congress and let them know where those pain points remain. Chairman Mike Rogers of the House Armed Services Committee has also announced that this bill, the 2027 bill, will focus on the defense industrial base. So while certainly we saw some of that in the 2026 bill, which was focused on the defense acquisition system, 2027 is going to have to open the spectrum a bit, open the aperture and take a good, hard look at what more we can do to incentivize growth, development, participation in the defense industrial base.
Terry Gerton What will you be looking for as indicators that the conversations are moving in that direction?
Stephanie Barna I think we’ll be looking for outreach by the committee to industry, outreach to different types of industry, your traditional participants in the defense industry, your nontraditionals. We have consortium management firms that pull together these nontraditional defense contractors in partnerships and help facilitate their entry. So I’ll be looking for whether or not Congress actually begins engaging with the defense industrial base to say, where do those pain points remain? And what can we do to help eliminate or mitigate those for you?