Window Opens For Contractor Input On SPEED Act

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“NATIONAL DEFENSE MAGAZINE” By Peter Hutt II, Homer La Rue and Ethan Syster

“The Streamlining Procurement for Effective Execution and Delivery Act, or SPEED Act, contains five general categories of reform — two of which focus on the requirements process preceding a procurement.”

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“The Trump administration continues to focus on procurement reform aimed at increasing acquisition efficiency, including through the “Revolutionary FAR Overhaul” and reinforced preferences for commercial products.

Now, with the House Armed Services Committee introducing a defense procurement reform bill, it is clear that Congress is also targeting increased efficiency as a key goal of the fiscal year 2026 National Defense Authorization Act.

Introduced on June 9, the Streamlining Procurement for Effective Execution and Delivery Act, or SPEED Act, contains five general categories of reform — two of which focus on the requirements process preceding a procurement.

To start, Section 301 directs the secretary of defense to identify actions necessary to reduce or eliminate the cost accounting standards, or CAS, compliance requirements in Defense Department contracts and to replace them with generally accepted accounting principles, or GAAP, a private sector accounting standard published by the Financial Accounting Standards Board that is the default accounting standard used by private companies in the United States. Notably, Section 301 does not amend 41 U.S.C. § 1502, which grants the Cost Accounting Standards Board exclusive authority to prescribe, amend and rescind cost accounting standards.

Instead, Section 301 requires the secretary of defense to evaluate the actions needed to replace cost accounting standards with GAAP and submit a report to Congress with findings and recommendations. Accordingly, Section 301 represents only one step toward replacing the standards.

Section 302 directs the secretary to review the Defense Department’s commercial buying practices, including implementation of the Federal Acquisition Streamlining Act. Among other things, the review must include a report on the extent to which commercial contracts include terms that should not apply to Part 12 of the Federal Acquisition Regulation.

This focus on maximizing efficient use of commercial procurements is consistent with President Trump’s executive order, “Ensuring Commercial, Cost-Effective Solutions in Federal Contracts.” With both the president and the House Armed Services Committee focused on reinforcing commercial preferences, contractors able to demonstrate the commerciality of their products and services could eventually see new awards with reduced regulatory requirements.

Section 303 increases several existing statutory dollar thresholds under Title 10 with the goal of increasing contracting officer authority to use simplified and non-competitive acquisition procedures and reducing the number of contracts subject to the Truthful Cost or Pricing Data Act.

Defense Department dollar thresholds for major programs under 10 U.S.C. § 3041 would more than double, with the thresholds increasing from $115 million to $275 million for research, development, testing and evaluation, and from $540 million to $1.3 billion for eventual total expenditures.

Several justification and approval thresholds for other than competitive procedures under 10 U.S.C. § 3204(e)(1), which determine the level of approval required for non-competitive procedures, would increase tenfold.

For example, the dollar range for competition advocate approval would increase from contracts between $500,000 and $10 million to contracts between $5 million and $100 million, and the dollar range for senior procurement executive approval would increase from contracts exceeding $75 million to contracts exceeding $500 million.

The SPEED Act would also increase the Truthful Cost or Pricing Data Act threshold for requiring certified cost or pricing data under 10 U.S.C. § 3702(a) from $2 million to $10 million and create a Defense Department-specific simplified acquisition threshold of $10 million under 10 U.S.C. § 3571(a).

Section 402 of the SPEED Act would expand the Defense Department’s other transaction agreement prototype authority under 10 U.S.C. § 4022. Such authority would no longer be limited to agreements involving small businesses or nontraditional defense contractors. If enacted, this amendment would mean that the department could issue prototype OTAs to traditional defense contractors within the defense industrial base without seeking separate funding or senior procurement executive approval.

Finally, the SPEED Act may signal interest by the House Armed Services Committee in reasserting congressional oversight over the Defense Department’s acquisition workforce. Section 502 requires the comptroller general to examine the composition and capabilities of the department’s acquisition workforce. Section 503 instructs the comptroller general to review the Pentagon’s workforce education, training, experience and development programs.

These provisions are consistent with the act’s overall focus on empowering the defense acquisition workforce. The Revolutionary FAR Overhaul — conducted in connection with Executive Order 14275, “Restoring Common Sense to Federal Procurement,” issued on April 15 — similarly seeks to empower the entire federal acquisition workforce by reducing mandatory regulatory requirements and allowing contracting officers to exercise increased discretion.

As a final point, the SPEED Act overlaps in many key respects with the Fostering Reform and Government Efficiency in Defense Act, or FoRGED Act, introduced by the Senate Armed Services Committee in December 2024, which will likely form the basis for the Senate’s version of the fiscal year 2026 NDAA.

The resulting House and Senate versions of the fiscal year 2026 NDAA will need to be reconciled through the conference process. Contractors with views on key issues contained within the SPEED Act or the FoRGED Act have a window of opportunity to provide their input to committee staffs.”

GOVERNMENT CONTRACTING INSIGHTS: Window Opens for Contractor Input on SPEED Act

ABOUT THE AUTHORS:

Peter Hutt II is a partner, and Homer La Rue and Ethan Syster are associates, in the Washington, D.C., office of Covington and Burling LLP. Stephanie Barna, of counsel, and Peter Terenzio, special counsel, also contributed to this article.