The Senate and House of Representatives have passed their versions of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2026. The Senate and House Armed Services Committees will now work to negotiate a compromise bill. Key sections within the Senate and House versions of the FY 2026 NDAA are listed below:

• H.R. 3838 (House bill), Section 802, Elimination of Late Cost and Pricing Data Submission Defense – Amends 10 U.S.C. § 3706, Price reductions for defective cost or pricing data, to add “updates to cost or pricing data submitted by the prime contractor or subcontractor after the date of agreement on the price of the contract” to the list of invalid defective pricing defenses. Section 838 in the Senate version of the FY 2026 NDAA includes a similar provision.
• H.R. 3838, Section 803, Reporting of Price Increases – Requires contractors to submit a report to the Contracting Officer within 30 days when the price of a product or service reaches or exceeds the bid price or the amount paid in prior years by certain percentage thresholds.
• H.R. 3838, Section 837, Restructuring of Performance Evaluation Metrics for the Acquisition Workforce – Within 180 days, the Department of Defense (DoD) will need to implement certain performance metrics or indicators for evaluating members of the acquisition workforce, including the use of commercial acquisition methods and demonstrated preference for commercial solutions.
• H.R. 3838, Section 1821, Adjustments to Certain Acquisition Thresholds – Increases the cost or pricing data threshold from $2 million to $10 million and increases the simplified acquisition threshold from $250,000 to $500,000. Section 839 in the Senate version of the FY 2026 NDAA includes a similar provision.
• H.R. 3838, Section 1824, Matters Related to Cost Accounting Standards
  • Requires the DoD and the CAS Board to assess opportunities to streamline CAS within 90 days.
  • Establishes a $10 million CAS applicability threshold.
  • Increases the full CAS coverage threshold from $50 million to $100 million.
  • States that beginning January 1, 2028, an individual who is a member of an audit agency will be ineligible to serve on the CAS Board. Section 806 in the Senate version states that the DoD representative shall be the Director of Defense Pricing, Contracting, and Acquisition Policy.
  • Requires the CAS Board to clarify or improve standards if misrepresentation or lack of clarity in a standard was a primary component of a dispute.
  • S. 2296 (Senate bill), Section 821, Modification to Nontraditional Defense Contractor Definitions – Provides an additional opportunity for an entity to qualify as a nontraditional defense contractor if it is not considered a covered segment under Defense Federal Acquisition Regulation Supplement (DFARS) 231.205-18. This DFARS clause defines a covered segment as a product division that allocated more than $1.1 million in independent research and development and bid and proposal costs to covered contracts during the preceding fiscal year.
  • S. 2296, Section 876, Assessment of Competitive Effects of Defense Contractor Transactions – Requires the Comptroller General to review the competitive effects of defense contractor mergers and acquisitions from the past 10 years.

The final version of the FY 2026 NDAA will be addressed in the next iteration of HKA’s Government Contracts Quarterly Regulatory Update.

The House version of the FY 2026 NDAA can be found here, and the Senate version can be found here.