POGO’s FY27 NDAA Recommendations, Revisited

In February, we released our recommendations for the Fiscal Year 2027 National Defense Authorization Act (FY27 NDAA) via a public letter to the House and Senate Armed Services Committees. Since then, we have actively worked with Congress and coalition partners to advocate for these priorities throughout the NDAA’s legislative process. Now, Congress is poised to start conferencing the NDAA between the House and Senate — the final step of that process. As representatives and senators move toward codifying this year’s bill, we want to provide an update as to where our recommendations stand across both the House and Senate versions of the bill, and continue to actively advocate for those priorities that remain viable in this final stretch.

In June, the House Armed Services Committee (HASC) released H.R. 8800, its base text for the FY27 NDAA. It passed the House 216-212 on July 22. Also in June, the Senate Armed Services Committee (SASC) released their version of the NDAA, S. 4784, which later, by a vote of 50-46, failed to be brought to the Senate floor for official consideration. While the door is still open for the Senate to engage in more internal NDAA debate, it may proceed into conferencing using only the committee-produced bill. For this update, we are focusing on the House-passed bill and SASC’s base text as our authoritative references on the current state of the NDAA.

We broke down our original recommendations into eight categories: reforming Nunn-McCurdy; addressing long-outstanding GAO recommendations; strengthening military right to repair; strengthening the Truth in Negotiations Act; illuminating and limiting conflicts of interest; requiring justification for the firing of general officers; reasserting Congress’s authority over waging war; and clarifying the process for handling allegedly unlawful orders. While the legislative proposals we provided may not be precisely reflected in either bill’s text, we’re happy to say that both chambers have made notable progress on six of these eight priorities. In these cases, the language in one or both bills strongly aligns with POGO’s February recommendations.

Reforming the Nunn-McCurdy Act

Passed in 1982, the Nunn-McCurdy Act increased congressional oversight of major defense acquisition programs, requiring the Defense Department to notify Congress when a program exceeds its budget, and to either cancel, restructure, or recertify it. However, Nunn-McCurdy has been poorly enforced over the years. We advocated that the FY27 NDAA include the text from H.R. 4372 — previously proposed legislation that, as we said in February, would “require shorter reporting times, the inclusion of sustainment costs, and that programs be reauthorized by Congress upon their second critical Nunn-McCurdy breach.”

The House Prevails: Nunn-McCurdy reform was not addressed in the Senate bill text. However, the House’s NDAA bill delivers two of these three asks in Section 1892, which amends 10 U.S.C. § 4374(a), (b), and (c)(2) to impose a 30-day reporting and notification deadline; amends § 4214(a)(2) to capture operations and sustainment costs across program life cycles; and expands major subprogram designation. The ask that programs be reauthorized by Congress is not carried in the bill. Section 1892(d) does bar the secretary of defense from delegating the critical-breach certification below their office, but the decision remains with the Pentagon rather than with Congress — a continued limitation of necessary congressional oversight.

This is considerable progress, albeit only in the House bill. We support this language and remain hopeful that meaningful Nunn-McCurdy reform will be carried through conference to the final bill.

Address Long-Outstanding GAO Recommendations

In February, we highlighted that Congress’s own investigators in the Government Accountability Office (GAO) had over 1,300 open recommendations for the Defense Department, with 74 of them designated as critical, some having been outstanding for over a decade. While we specifically highlighted recommendations regarding shipbuilding, we are excited to have Congress codify any number of these long-outstanding DOD-specific GAO recommendations into this year’s NDAA.

A Step in the Right Direction: GAO’s shipyard recommendation did not appear in either the House or Senate bills, but both chambers’ bills force action on other open GAO recommendations. House Sections 167 and 168 require that, within 180 days of the NDAA’s enactment, the secretary must submit to the defense committees a plan addressing 11 specific recommendations GAO made regarding the F-35. In the Senate, Section 321 requires similar action on four additional, classified GAO reports regarding weapons systems maintenance, fuel supply in the Indo-Pacific, force structure, and reserve component readiness.

While we are disappointed that our specified GAO shipyard recommendation was not addressed, we are hopeful that the inclusion of these provisions across both chambers shows an increased willingness from Congress to begin addressing the significant backlog as a whole. We support the language used in each provision and believe they show a congressional commitment to compel action based on GAO recommendations, especially when a specific program garners attention, like the F-35.

Strengthening the Military’s Right to Repair

We continue our advocacy, as we said in February, for “increasing warfighters’ access to technical data needed to repair their equipment,” by once again asking that right-to-repair provisions be included in this year’s bill. While a version of right to repair was included in both the original House and Senate NDAA texts last year, both provisions were stripped away during conference and did not make it through to the final FY26 NDAA bill. In February, we asked that Section 836 of last year’s original Senate bill be added again this year.

In June, the House Chairman’s Mark of the FY27 NDAA contained no meaningful right to repair language. However, an amendment was added during HASC’s markup process, and the bill the House passed still retains it. Meanwhile, in the Senate, a similar provision was included in their base text.

A Solution, in Parts: With House Section 861 and Senate Section 804, both bills establish that government purpose data rights must be the default, with contractors having to provide clear and convincing evidence for the need to deviate from that default. They also amend existing statutes to provide allowances for the release of detailed manufacturing or process data for wartime and contingency operations.

Despite their similarities, there are some notable differences between the two chambers’ provisions: In the House, the scope is wide-reaching, requiring these changes apply to any deliverable under a DOD contract. Meanwhile, the Senate provision covers a narrower band of products and services. However, the House bill limits the applicability of the provisions only to contracts solicited and awarded post-enactment. The Senate’s provision has more teeth, with stronger enforcement mechanisms that would make contractors that repeatedly fail to comply ineligible for future data or software delivery contracts. There are additional provisions in the House bill that address intellectual property concerns, and both the House and Senate bills have sections that touch on secondary source qualification. While these issues are relevant in their relationship to the right to repair, House Section 861 and Senate Section 804 are the strongest vehicles for codifying the military’s right to repair its own equipment.

Ideally, we hope during conferencing that the final bill adopts the broad-reaching applicability of the House, paired with the Senate’s reach back to existing contracts and stronger enforcement mechanisms. We will continue to actively push leaders in both the House and Senate to keep right to repair in the conferenced bill, and to avoid the removal that happened at this stage of the legislative process last year.

Strengthen the Truth in Negotiations Act

Our recommendation for strengthening the Truth in Negotiations Act (TINA) was simple: Include the language of the Stop Pentagon Price Gouging Act, which was introduced in the House and the Senate in 2023, in the FY27 NDAA. TINA protects taxpayers by requiring contractors to provide information about their costs during negotiations. The proposed 2023 bill refined competitive bids and offered incentives for information provided in a timely manner.

A Win for TINA: This year, the House and Senate bills both fully realize the intent of the original 2023 legislation. House Section 804 and Senate Section 822 make near-identical amendments to Title 10, implementing an expiration requirement on contractors’ pricing information. House Section 805 and Senate Section 821 also add to Title 10, establishing a required timeline for reports of price increases. Collectively, these provisions meaningfully address the intent of the Stop Pentagon Price Gouging Act and effectively strengthen TINA.

We consider the inclusion of these provisions across both the House and Senate bills as major wins, and will continue to push Congress to guarantee their survival through conferencing.

Illuminate and Limit Conflicts of Interest

Private industry’s reach and influence within the Pentagon have expanded. As we observed in February, new perspectives within the military establishment can be valuable, but concerns about conflicts of interest will always be present. We centered our original recommendation on reforming the oversight of Special Government Employees (SGEs). In February, we recommended that the NDAA include language from the SGE Transparency Act (S. 1196), the SGE Ethics Enforcement Reform Act (S. 1491), and the Employee Limits ON Profiteering Act (H.R. 2824), all previously proposed legislation pertaining to the oversight of SGEs.

Falling Short on SGEs: Unfortunately, none of the language from any of the bills was included in either chamber’s NDAA. House Section 1101 does propose amendments to Title 10. The provision addresses: (1) curtailing covered DOD personnel, to include SGEs, from earning outside income without a review from an ethics official determining that the income is unrelated to their federal duties; (2) ensuring that the same personnel have no official business before the DOD; and (3) ensuring that they do not represent a foreign agent or government. This House provision is the most explicit oversight of SGEs, with no companion in the Senate bill text. However, it fails to emplace the more explicit prohibitions and other oversight mechanisms — such as creating a public database to track SGE employment, and prohibiting contracts from being awarded to SGEs, their relatives, or their private industry employers— that we recommended in February.

Ethics Addressed Elsewhere: However, there are provisions in both bills that address conflicts of interest beyond SGEs. Senate Section 903 requires that a professional code of conduct be established for personnel and contractors in the Economic Defense Unit, the Office of Strategic Capital (OSC), the Office of Expanded Competition, and the Assistant Secretary of Defense for Industrial Base Policy. It also requires documentation of the communication of those offices’ personnel with industry. Additionally, Senate Sections 1052 and 1053 require that OSC conduct an ownership review before any equity investment and mandates congressional notification. Again, while these provisions do not directly address SGEs, they do expand the requirements and controls around determination and oversight of conflicts of interest.

Finally, both the Senate and House bill texts address a growing area of concern when it comes to conflicts of interest across government, but notably within the military: prediction markets. POGO has proposed amending the Commodity Exchange Act to ban government employees’ use of prediction market platforms and establish meaningful civil and criminal penalties to deter insider trading. In the Senate NDAA bill text, Sections 1081, 1082, and 1083 implement a trading ban for DOD personnel, mandatory ethics reporting thresholds, regulatory bans that extend to defense contractors, and a federal ban on bets regarding military operations. In the House, Section 517 establishes a ban on service members and DOD civilian employees making trades using nonpublic information. Again, these provisions would only apply to the DOD, but can serve as a potential beginning for wider prediction market reform.

While our initial recommendations specific to SGEs were not present in either chamber’s bill, we are pleased about the above proposed reforms and oversight tools that are present across both bills. Our support is always in favor of increased oversight and limitations of conflicts of interest, and we feel that the provisions proposed in the Senate bill, specifically, carry the most weight. We are advocating for their continued inclusion through conferencing.

Require Justification for Firing General Officers

The continued purge of senior leaders from the military is a deeply concerning issue, and the lack of enforceable accountability measures makes it difficult for Congress to demand justification for these removals. We have previously proposed potential changes to statutory language that Congress could make to enable oversight and made the same recommendations in February. While Congress did not use the exact legislative language we provided, the provisions included in both the House and Senate bills would have a similar impact.

Positive Movement Toward Pentagon Accountability: In the House, Section 502 adds a provision to Title 10 that would require that Congress receive a written report within five days of a three- or four-star general officer being fired, describing the performance concerns, actions, or inactions that caused an officer to be removed.

The Senate, in Section 507, goes even further, extending the notification requirement to include instances of relief, removal, reassignment, resignation, retirement, request for retirement, or other separation that occurs before expected completion of active service. It also mandates that the notification requirement apply regardless of whether the department or the officer initiated the action. Senate Section 507 also includes a mandatory five-day window for congressional notice, with the notification including the basis for the removal and whether any investigation, command inquiry, or inspector general review took place. A follow-on report signed by the relevant service secretary or secretary of defense is also required within 30 days. The report would include any investigation findings, a certification that the removal was not in retaliation for good faith actions by the officer, as well as an optional written statement from the removed officer.

While the House language is materially similar to our proposal, we are in strong support of the Senate language being the version that is retained through conferencing. The enforcement mechanisms it establishes will limit the DOD’s ability to shirk oversight and provide Congress with a necessary check on potential abuses of power by Pentagon leadership.

Reassert Congress’s Authority Over Waging War

At POGO, we have continued to be a strong voice in favor of Congress reasserting its war powers. At the time we released our initial recommendations in February, our demands were centered on the military’s ongoing strikes in the Caribbean and Eastern Pacific, with an acknowledgment of the previous operations in Iran in 2025. Now, they extend to include the ongoing operations against Iran.

A Failure on War Powers: Unfortunately, our original recommendations to reform the War Powers Act to clarify the president’s role and responsibilities in military engagements — in addition to including provisions that would expressly repeal the standing Authorizations for Use of Military Force (AUMFs) — were not included. In fact, there are no meaningful attempts in either chamber’s bill to curtail the executive branch’s ability to wage war indiscriminately.

That being said, both bill texts do include increased reporting requirements and demand information pertaining to both operations in the Caribbean and Eastern Pacific and the conflict with Iran. While we are disappointed that our core ask did not advance through either chamber, we are in favor of these requirements and support their retention through conferencing, as they increase the potential for congressional oversight, albeit minimally.

Clarify the Process for Handling Allegedly Unlawful Orders

Orders Unmentioned: Out of growing concern for the demands that might be placed on U.S. service members, we asked that further protections be put in place for those who may refuse orders they believe to be unlawful. Unfortunately, neither the House nor the Senate included any provisions that would achieve this. While we are disappointed by this, we still plan to maintain our work and advocacy in this area and will continue to demand Congress act on this issue in future legislation.

The Path Ahead

As previously mentioned, the House and the Senate are starting the process to reconcile their two bills through conferencing. As it stands now, provisions that appear in both chambers’ bills with matching or near-matching text are the most likely to make it through conferencing unscathed. From our recommendations, that applies to the TINA reforms. By no means does this mean we will slow our advocacy in favor of strengthening TINA, but we are hopeful that its strong representation across both chambers is an indication of the reform’s imminent success.

For provisions that overlap in general issue area but differ substantially in approach and application, reconciliation will have to happen, and meaningful language may be lost in the negotiation. For our sections where this applies — right to repair, prediction market reform, and general officer relief — it is imperative that we continue to advocate and push for the language we feel will be most effective.

Finally, for those provisions that appear in only one chamber — Nunn-McCurdy reform, specific GAO recommendations, and the Senate’s expansive conflicts of interest reviews — continued advocacy pushing for their inclusion in the final NDAA is vital.

When we make our annual NDAA recommendations, our hope and work are centered on achieving all of them. While it is obviously disappointing that two failed to manifest materially in any version of the NDAA and are unlikely to appear between now and the final vote, it is still heartening that six of our recommendations have a textual foothold and paths forward to making it into the final bill.