This week, the Association sent a letter to Senate Armed Services Committee leaders opposing Section 815 of the FY2027 NDAA.
The provision: Section 815 would condition DOD contract eligibility on a company’s agreement to forgo stock buybacks and dividends for the life of the contract, absent a waiver. It would apply to any DOD contractor, not just major defense manufacturers.
Our argument: The provision could discourage publicly traded companies from bidding on defense work, ripple into employee retirement savings tied to equity markets, and set a precedent for using federal contracts to steer corporate governance decisions unrelated to contractor performance. We urged the Committee to strip Section 815 during floor consideration and conference.
Looking ahead: Congress has two more weeks before August recess. To date, Senate Democrats have blocked the FY2027 defense authorization bill from reaching the floor (a departure from its usual bipartisan trajectory), citing opposition to the war in Iran and concerns over defense spending growth. House Armed Services Chairman Mike Rogers (R-Ala.) has signaled the House could take up its version next week before members leave town.
What’s next: The bill will need to pass both chambers and make it through budget reconciliation, the latter of which is subject to deadlock and delays. Expect passage no earlier than Fall 2026.
The Association will continue advocating against Section 815’s inclusion in the final bill. We will keep members updated.
