Pentagon should shave defense procurement regulation, industry group says
Defense Industry Calls for Overhaul of Pentagon Procurement Regulations
By Mike Stone
WASHINGTON (Reuters) -As the Pentagon overhauls procurement regulations, an industry group that represents defense and aerospace companies says it identified over 50 regulatory requirements that discourage companies from doing business with the government.
The Pentagon has embarked on a renewed attempt to change how the Pentagon acquires weapons and support systems. One example was a March memo signed by Secretary of Defense Pete Hegseth changing how the Pentagon buys software.
In a June 3 letter to Hegseth, the Aerospace Industries Association, which represents defense companies including RTX, Boeing, and General Dynamics, said its members want to eliminate burdensome regulations that have frustrated them for years.
“The cumulative growth of these requirements over time has created a regulatory framework that itself poses an endemic risk: stifling innovation, diminishing the supplier base, driving up costs, and delaying delivery,” Eric Fanning, head of the AIA, said in the letter.
Key areas AIA targeted for reform include cybersecurity compliance, cost accounting standards, intellectual property rules, and commercial acquisition requirements. Industry leaders have argued these regulations create unnecessary obstacles to an expedited acquisition process.
Particularly problematic were the Cybersecurity Maturation Model Certification requirements, which industry representatives say place substantial risk and liability on prime contractors who must verify compliance throughout their entire supply chains.
Other targeted regulations include cost accounting standards that force companies to maintain separate accounting systems from standard commercial practices, and intellectual property rules that industry claims discourage companies from offering their best technologies to the Pentagon.
Later on Monday, the House Armed Services Committee revealed a bill aimed at overhauling the Department of Defense’s acquisition process to deliver military capabilities more rapidly and cost-effectively.
The Streamlining Procurement for Effective Execution and Delivery Act of 2025 would restructure how the Pentagon buys weapons systems and technology, with a focus on aligning acquisition to Pentagon priorities and operational outcomes.
(Reporting by Mike Stone in Washington; Editing by Sharon Singleton and Rod Nickel)
The defense and aerospace industry is pushing for a significant overhaul of procurement regulations within the Pentagon. In a recent letter to Secretary of Defense Pete Hegseth, the Aerospace Industries Association (AIA) highlighted more than 50 regulatory requirements that have been hindering companies from engaging in business with the government. These regulations, according to AIA President Eric Fanning, have accumulated over time to create a regulatory framework that stifles innovation, limits the supplier base, increases costs, and delays delivery.
Key areas that the AIA is focusing on for reform include cybersecurity compliance, cost accounting standards, intellectual property rules, and commercial acquisition requirements. Industry leaders argue that these regulations pose unnecessary obstacles to an efficient acquisition process. Of particular concern are the Cybersecurity Maturation Model Certification requirements, which place significant risk and liability on prime contractors to ensure compliance throughout their supply chains.
Additionally, AIA is targeting cost accounting standards that deviate from standard commercial practices, as well as intellectual property rules that discourage companies from offering their best technologies to the Pentagon. The industry believes that these regulations are counterproductive and hinder the development and delivery of cutting-edge technologies to the military.
In response to these concerns, the House Armed Services Committee has introduced the Streamlining Procurement for Effective Execution and Delivery Act of 2025. This bill aims to revamp the Department of Defense’s acquisition process to expedite the delivery of military capabilities in a more cost-effective manner. The focus will be on aligning acquisition strategies with Pentagon priorities and operational outcomes to streamline the procurement process.
Overall, the defense industry is calling for a reevaluation of procurement regulations to facilitate innovation, reduce costs, and improve the efficiency of delivering essential technologies to the military. The proposed changes could lead to a more agile and responsive acquisition process that better meets the needs of the Department of Defense.
