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1 1 (February 11, 2026)

handle is hein.crs/govetpv0001 and id is 1 raw text is: La Congressional * Research Serrvice Executive Order on Defense Contracting February 11, 2026 The Department of Defense (DOD), which is using a secondary Department of War designation under Executive Order 14347 dated September 5, 2025, relies on a large and complex defense industrial base (DIB) to produce materials, products, and services that enable the department's warfighting capabilities and business operations. DOD procures such materials, products, and services from contractors. In 2025, both the executive branch and Congress have introduced efforts to reform DOD contracting processes. On January 7, 2026, President Trump issued Executive Order 14372 (E.O. 14372), entitled Prioritizing the Warfighter in Defense Contracting. E.O. 14372 states that many large contractors - while underperforming on existing contracts - pursue newer, more lucrative contracts, stock buy-backs, and excessive dividends to shareholders at the cost of production capacity, innovation, and on-time delivery. The order directs, effective immediately, [large contractors] are not permitted in any way, shape or form to pay dividends or buy back stock, until such time as they are able to produce a superior product, on time and on budget. The E.O. makes a similar prohibition for major defense contractors. This Insight discusses the authorities invoked in the order, the processes it establishes for DOD, and potential legal challenges to the E.O. While executive orders may announce new administration policies or direct executive agencies to take certain actions, they are not codified in statute. Congress may consider whether or not to pass legislation that codifies, clarifies, or revokes elements ofE.O. 14372. Congress may also conduct oversight of DOD as it executes the E.O.'s directives. DOD Acquisition Reform and E.O. 14372 Since January 2025, both the executive branch and Congress have introduced efforts to reform DOD acquisition and contracting and to maintain estimated DOD program costs and schedules. Such efforts continue over a decade of defense acquisition reform initiatives and reporting requirements. E.O. 14372 directs the Secretary of Defense, who is using Secretary of War as a secondary title, to identify any defense contractors for critical weapons, supplies, and equipment that are underperforming on their contracts, not investing their own capital into necessary production capacity, not sufficiently prioritizing United States Government contracts, or whose production speed is insufficient as determined by the Secretary, and that have, during the period ofunderperformance or insufficient prioritization, investment, Congressional Research Service https://crsreports.congress.gov IN12654 CRS INSIGHT Prepared for Members and Committees of Congress