Secretary Hegseth’s Message to the Force

In regards to rebuilding the defense industrial base (DIB) and reforming the acquisition process:

“We will rebuild our military by matching threats to capabilities. This means reviving our defense industrial base, reforming our acquisition process, passing a financial audit, and rapidly fielding emerging technologies. We will remain the strongest and most lethal force in the world.”

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Executive Order on Strengthening and Promoting Innovation in the Nation’s Cybersecurity

Section 1.  Policy.  Adversarial countries and criminals continue to conduct cyber campaigns targeting the United States and Americans.  These campaigns disrupt the delivery of critical services across the Nation, cost billions of dollars, and undermine Americans’ security and privacy.  More must be done to improve the Nation’s cybersecurity against these threats.

Sec. 2.  Operationalizing Transparency and Security in Third-Party Software Supply Chains.  (a)  The Federal Government and our Nation’s critical infrastructure rely on software providers.  Yet insecure software remains a challenge for both providers and users and makes Federal Government and critical infrastructure systems vulnerable to malicious cyber incidents.  The Federal Government must continue to adopt secure software acquisition practices and take steps so that software providers use secure software development practices to reduce the number and severity of vulnerabilities in software they produce.

Sec. 3.  Improving the Cybersecurity of Federal Systems.  (a)  The Federal Government must adopt proven security practices from industry — to include in identity and access management — in order to improve visibility of security threats across networks and strengthen cloud security.

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Army Introduces Regulation on Small Business Programs

The regulation directs the secretary of the Army to establish an Office of Small Business Programs within the department and ensure that the director of SBP has sufficient resources to oversee the Small Business Program. The department’s principal officials should ensure that all requirements sent to contracting are free of restrictive requirements that hinder small vendors from performing as prime contractors. They should also solicit advice from small business professionals when conducting market research and identifying companies that can perform the work.

Under the new regulation, the assistant secretary of the Army for acquisition, logistics and technology should oversee the execution of the Small Business Innovation Research, or SBIR, and Small Business Technology Transfer, or STTR, programs; coordinate with the SBP director regarding the two programs; and share information on procurement opportunities, prize competitions and industry engagements.

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Defense Innovation Board Releases Two Studies on Scaling Innovation in Nontraditional Industry and Drone Manufacturing

Secretary of Defense Lloyd J. Austin III and Deputy Secretary of Defense Kathleen Hicks hosted the Defense Innovation Board (DIB) for its winter Board meeting in the Pentagon on January 13th, 2025.  Underscoring Secretary Austin’s commitment to defending the nation through innovation and modernization, the DIB, chaired by Michael R. Bloomberg, discussed its efforts to catalyze and empower defense innovation leaders within the DoD and the defense industrial base.  The Board presented its two latest studies on Scaling Nontraditional Defense Innovation and A Pathway to Scaling Unmanned Weapons Systems.

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DOD Releases List of Chinese Military Companies in Accordance with Section 1260H of the National Defense Authorization Act for Fiscal Year 2021

The Department of Defense released an update to the names of “Chinese military companies” operating directly or indirectly in the United States in accordance with the statutory requirement of Section 1260H of the National Defense Authorization Act for Fiscal Year 2021.  The People’s Republic of China’s (PRC) Military-Civil Fusion strategy supports the modernization goals of the People’s Liberation Army (PLA) by ensuring it can acquire advanced technologies and expertise developed by PRC companies, universities, and research programs that appear to be civilian entities.  Section 1260H directs the Department to begin identifying, among other things, Military-Civil Fusion contributors operating directly or indirectly in the United States.  The Department will update the list with additional entities as appropriate.

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Government Contracting: Subcontracting Program

The U.S. Small Business Administration (SBA) proposes to revise its Small Business Subcontracting Program regulations to encourage faster payments to small business subcontractors and streamline the reporting process for prime contracts. This proposed rule will require prime contractors notify contracting officers in writing when it fails to make full or timely payments to the subcontractor within 30 days past due; require prime contractors cooperate with contracting officers to correct/mitigate this failure until payment is made in full to the subcontractor; and allow contracting officers to modify a prime contractor’s past performance for failure to make full or timely payments.  Comments must be received on or before February 18, 2025.

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Defense Spending by State, Fiscal Year 2023

The Department of Defense’s Office of Local Defense Community Cooperation released its Fiscal Year 2023 Defense Spending by State report to help states and communities better understand how Defense procurement, personnel, and grant spending impact their economies.

The report’s graphs, maps, and tables present a range of findings, such as total spending figures, categories of contracted goods and services, major defense vendors, numbers and types of defense personnel, and grants awarded by the Department of Defense (DOD).  This snapshot provides public and private leaders with a starting place to assess how defense investments across installations, communities, and the private sector can be optimized by supporting regional innovation, industrial capability and capacity, supply chain resilience, and cultivating a skilled workforce.

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Contracting in Disasters

Contractors are a critical force-multiplier during any disaster response. The U.S. Army Corps of Engineers (USACE) relies heavily on these partners in industry to help meet mission requirements quickly, efficiently, and effectively. To facilitate rapid engagement with the industrial base, USACE maintains an inventory of already awarded contract tools, pre-positioned to support major emergency response missions.  These contracts are part of the USACE Advanced Contracting Initiative (ACI), a program developed and implemented specifically for emergency and disaster scenarios. This suite of targeted contract tools provides USACE with a rapid response capability to support a wide range of mission requests, to include needs such as bottled water, packaged ice, debris removal, and temporary roofing. All companies doing business with USACE must be registered in the System for Award Management (SAM) and their registration must be in an active status.

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Report to Congress on Small Business Subcontracting Plan Goals Status

The FY2023 data in eSRS indicates that, for categories where a goal was established, 64% of the goals for small business on completed contracts were met or exceeded, and between 40 and 55% of the five socioeconomic small business goals were met or exceeded. The aggregate dollars lost by all small business categories when contractors fail to achieve their goals is substantial. If contractors had met their subcontracting plan goals on completed contracts, small businesses would have received $1.5 billion more in subcontracts, SDBs would have received $857 million more, and SDVOSBs would have received $383 million more.

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