On April 9, 2025, the Navy outlined aggressive goals to boost shipbuilding capacity—one Columbia-class and two Virginia-class submarines annually, along with advancing Ford-class carriers and Flight III destroyers. Meeting these targets requires expanding supply chains and overcoming workforce shortages that have slowed progress and created delays. To address these challenges, shipbuilders are accelerating outsourcing efforts, for example: Huntington Ingalls Industries (HII) recently moved major hull sections to Eastern Shipbuilding, while Austal USA partnered with Master Boat Builders to collaborate on Austal’s current programs such as the Landing Craft Utility 1700 series. Additionally, in July 2026 Austal USA will open a new $750 million facility in Mobile to manufacture submarine modules.

On January 7, 2026, the Executive Order (EO) titled “Prioritizing the Warfighter in Defense Contracting” was issued, setting forth several policy priorities relevant to major defense contractors. The EO identifies four areas of focus (see Section 3(a) of EO) that may be reflected in future Department of Defense oversight or contracting actions: (1) reinvestment in production capacity, (2) restrictions on stock buybacks and dividends during periods of contractor underperformance, (3) alignment of executive compensation with delivery and performance metrics, and (4) the timely delivery of capable systems within cost and schedule parameters. The EO directs the Secretary of War to identify contractors supporting critical weapons, supplies, and equipment, and authorizes consideration of enforcement mechanisms and future contract clauses. The specific scope, timing, and application of these authorities remain subject to further clarification and agency action.

December 5, 2025 marked a major shift for small business contractors as the U.S. Small Business Administration (SBA) issued letters to every firm in the 8(a) Business Development Program requiring submission of financial records within 30 days. By January 5, 2026, all 4,300 participants must provide documentation for the last three fiscal years including bank statements, financial statements, general ledgers, payroll registers, and contracting agreements. Firms that fail to comply risk removal from the program and potential enforcement actions.

In March 2025 the Defense Contract Audit Agency (DCAA) released its Annual Report to Congress. The report covers the Agency’s audit activities in FY 2024 and plans for FY 2025. The areas addressed in the report include Forward Pricing, Incurred Cost, Claims and Terminations, Business Systems, Cost Accounting Standards (CAS) & Truth in Negotiations.