Defense Industry Calls for Regulatory Reform to Improve Procurement Process
By Mike Stone
WASHINGTON (Reuters) – As the Pentagon moves to revamp its procurement regulations, the Aerospace Industries Association (AIA) has identified more than 50 regulatory requirements that hinder companies from engaging in business with the government.
The Pentagon has initiated a renewed effort to transform how it acquires weapons and support systems, exemplified by a recent memo signed by Secretary of Defense Pete Hegseth outlining changes in software procurement processes.
In a letter addressed to Hegseth on June 3, the AIA, representing defense giants like RTX, Boeing, and General Dynamics, expressed the need to eliminate burdensome regulations that have hindered their operations for years.
“The accumulation of these requirements has led to a regulatory framework that poses inherent risks such as stifling innovation, reducing the supplier base, escalating costs, and delaying deliveries,” stated Eric Fanning, AIA’s head, in the letter.
Key areas highlighted by the AIA for reform include cybersecurity compliance, cost accounting standards, intellectual property regulations, and commercial acquisition requirements. Industry leaders argue that these regulations add unnecessary hurdles to the acquisition process.
The Cybersecurity Maturation Model Certification requirements have been particularly challenging, placing significant risk and liability on prime contractors responsible for ensuring compliance across their supply chains.
Other regulations targeted for reform include cost accounting standards mandating companies to maintain separate accounting systems from standard commercial practices, and intellectual property rules that discourage offering top technologies to the Pentagon.
On the legislative front, the House Armed Services Committee unveiled a bill on Monday aimed at overhauling the Department of Defense’s acquisition process to enhance the delivery of military capabilities in a more timely and cost-effective manner.
The Streamlining Procurement for Effective Execution and Delivery Act of 2025 seeks to reshape how the Pentagon procures weapons systems and technology, focusing on aligning acquisitions with Pentagon priorities and operational outcomes.
(Reporting by Mike Stone in Washington; Editing by Sharon Singleton and Rod Nickel)
